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Child Tax Credits Have Nothing to Do with Economic Freedom
Yesterday I griped at length over at The Economist about Rick Santorum's so-called "economic freedom agenda." One point of Santorum's ten-point plan includes tripling the tax-code subsidy for kids. I can't for the life of me see what this has to do with economic freedom. Reihan Salam, for my money the most knowledgeable wonk in America, sort of comes to Santorum's defense:
Some non-trivial share of the expenses associated with child-rearing can be understood as investments in human capital akin to investments in business enterprises. Most advanced market democracies give preferential tax treatment to capital income on the understanding that doing so will encourage productivity-enhancing investment. This kind of tax policy is necessarily more fraught in the context of human capital, as there is a great deal of heterogeneity in how parents deploy resources and, thankfully, human capital is not terribly “liquid.” So I completely understand that why some might question the notion that a well-designed child tax credit might actually be a sensible growth-enhancing measure.
It may not be not be obvious that growth-enhancing measures have anything to do with economic freedom, but freedom has a number of meanings, and one of them is "ability to do stuff." Economic growth does increase the means, the doing-stuff power, of those who gain from growth. So I accept that in this sense growth-enhancing measures might have something to do with economic freedom. But given the "negative," non-interference conception of freedom which conservatives and libertarians usually claim to prefer, it's not clear how optimal corporate tax rates have anything to do with it. Persons, natural or legal, are either coerced or they aren't. Mugged people with fat wallets aren't coerced or wrongly interfered with more than mugged people with thin wallets. They just lose more money. That conservatives and libertarians always ultimately do treat tax increases as losses of freedom suggests to me that they're really proponents of positive liberty after all, but haven't thought the implications through. In that case, they're right to see growth as a matter of freedom. But then they'e also are quite wrong to think that a well-functioning welfare state isn't a matter of freedom. I digress.
Back to kids. I'm glad Reihan concedes that it's reasonable to be skeptical about child tax credits as a way to boost growth. But it's not just there's "a great deal of heterogeneity in how parents deploy resources." More fundamentally, there's a great deal of heterogeneity in the amount different sorts of people contribute to economic growth. If growth is really the justification for government paying people to breed, then people likely to produce kids who will grow up to consume more than they produce ought to pay tax penalties for their precious, pitter-pattering economic dead-weight. Generally, people more likely to produce growth-enhancing kids should be subsidized more heavily than people who aren't. Pro-growth tax policy ought to especially reward those who produce kids exceedingly high in conscientiousness and IQ, which is to say, tax policy ought to reward people who are themselves very conscientious and highly intelligent. Of course, this sort of Grade A human livestock is likely to do quite well economically without special tax breaks. So perhaps it would be better to reward them medals for fecundity, as the Soviet Union used to do. Anyway, hardy is the supply-sider who does not break a tooth biting the eugenic bullet. But the logic of the pro-growth argument for the child tax credit really does require biting it.
If the idea is to promote growth through human capital, the obvious freedom-enhancing solution is to offer work visas to any highly-skilled foreigner who would like to live in the States. Effects on growth aside, this policy increases economic freedom in a straightforward way: it lifts coercive barriers to U.S. labor markets for a large class of people, allowing economic exchange previously forbidden to take place. Notably, nothing along these lines appears in Rick Santorum's "economic freedom agenda."
Of course, it would do even more for both economic freedom and human welfare to lift barriers to free movement and free exchange altogether. That would be fairer, too. There's something more than a little perversely self-serving about selectively enhancing freedom of movement and association just for those already relatively well-to-do foreigners whose industry would benefit us most. But the wheel of progress turns slowly; we can't have it all and have it now. Anyway, human-capital subsidy enthusiasts should note that a policy of welcoming large numbers of high-skilled workers is pretty straightforwardly eugenic. A lot of these folks are going to have kids. That is to say, we could achieve more or less the same result of too-odious-to-contemplate child-quality tax credits by selectively reducing barriers to American labor markets--a policy that really would enhance economic freedom, whether or not it enhanced growth.
Reihan goes on:
[L]et’s acknowledge that something like an expanded child tax credit and income-splitting (which aren’t quite what Santorum has in mind, but bear with me) does represent social engineering of a kind [as I claim my original post]. Social engineering through fiscal policy is unavoidable, as I suspect Will would agree. Short of a head tax, which has its own problematic implications, almost any imaginable income tax will shape the choices of individuals and communities along a number of dimensions: Do we concentrate on market or non-market production? Do we privilege those with a proclivity towards asset-building over those with a proclivity towards consumption?
I don't actually agree that social engineering through fiscal policy is unavoidable. Of course, every effective legal rule shapes choice. That's the point of rules. The philosophically liberal ideal is to have rules that more or less everyone can affirm from within their own moral perspective. The illiberal idea is to have rules that compel everyone to conform to a substantive idea of how people should live that some of us reasonably reject. To live within such an order defined by such rules is largely what it means to be free, politically and economically. Social engineering or "choice architecture" in the vacuous sense of having rules that shape choice is indeed inevitable. Social engineering in the sense of wheedling and bullying people into living their lives according to a conception of the good life they don't share is a predictable consequence of democratic politics in a less than ideally liberal culture, but it's not by no means logically inevitable. It's worth noting that this bad, illiberal sort of social engineering is pretty much the only thing Rick Santorum cares about.
Reihan and I are incredibly close to each other on the nature and value of economic freedom. Our disagreement I think is largely confined to the question of how to understand the implications of the platitude that the rules of the game shape our choices. I don't think you can get from there to a defense of child tax credits on grounds of anything resembling economic freedom. Maybe pro-natal policies are pro-growth. But do you think we'd be freer economically if we levied heavy excise taxes on birth control?
[UPDATE: Reihan tells me over Twitter that "I thought it was so obvious that the Santorum agenda wasn't pro-freedom that I didn't even mention it!" Whoops! So this post is based on a bit of a confusion. Still, I think the discussion's useful, so I'll just leave it as is.]
What is human dignity? Here's a primer, told through 200 years of great essays, lectures, and novels.
- Human dignity means that each of our lives have an unimpeachable value simply because we are human, and therefore we are deserving of a baseline level of respect.
- That baseline requires more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose.
- We look at incredible writings from the last 200 years that illustrate the push for human dignity in regards to slavery, equality, communism, free speech and education.
The inherent worth of all human beings<p>Human dignity is the inherent worth of each individual human being. Recognizing human dignity means respecting human beings' special value—value that sets us apart from other animals; value that is intrinsic and cannot be lost.</p> <p>Liberalism—the broad political philosophy that organizes society around liberty, justice, and equality—is rooted in the idea of human dignity. Liberalism assumes each of our lives, plans, and preferences have some unimpeachable value, not because of any objective evaluation or contribution to a greater good, but simply because they belong to a human being. We are human, and therefore deserving of a baseline level of respect. </p> <p>Because so many of us take human dignity for granted—just a fact of our humanness—it's usually only when someone's dignity is ignored or violated that we feel compelled to talk about it. </p> <p>But human dignity means more than the absence of violence, discrimination, and authoritarianism. It means giving individuals the freedom to pursue their own happiness and purpose—a freedom that can be hampered by restrictive social institutions or the tyranny of the majority. The liberal ideal of the good society is not just peaceful but also pluralistic: It is a society in which we respect others' right to think and live differently than we do.</p>
From the 19th century to today<p>With <a href="https://books.google.com/ngrams/graph?year_start=1800&year_end=2019&content=human+dignity&corpus=26&smoothing=3&direct_url=t1%3B%2Chuman%20dignity%3B%2Cc0" target="_blank" rel="noopener noreferrer">Google Books Ngram Viewer</a>, we can chart mentions of human dignity from 1800-2019.</p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg0ODU0My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MTUwMzE4MX0.bu0D_0uQuyNLyJjfRESNhu7twkJ5nxu8pQtfa1w3hZs/img.png?width=980" id="7ef38" class="rm-shortcode" data-rm-shortcode-id="9974c7bef3812fcb36858f325889e3c6" data-rm-shortcode-name="rebelmouse-image" />
American novelist, writer, playwright, poet, essayist and civil rights activist James Baldwin at his home in Saint-Paul-de-Vence, southern France, on November 6, 1979.
Credit: Ralph Gatti/AFP via Getty Images
The future of dignity<p>Around the world, people are still working toward the full and equal recognition of human dignity. Every year, new speeches and writings help us understand what dignity is—not only what it looks like when dignity is violated but also what it looks like when dignity is honored. In his posthumous essay, Congressman Lewis wrote, "When historians pick up their pens to write the story of the 21st century, let them say that it was your generation who laid down the heavy burdens of hate at last and that peace finally triumphed over violence, aggression and war."</p> <p>The more we talk about human dignity, the better we understand it. And the sooner we can make progress toward a shared vision of peace, freedom, and mutual respect for all. </p>
A new study finds surprising evidence of the self-evolution of urban foxes.
- A study from the University of Glasgow finds urban foxes evolved differently compared to rural foxes.
- The skulls of the urban foxes are adapted to scavenging for food rather than hunting it.
- The evolutionary changes correspond to Charles Darwin's "domestication syndrome."
How much can living in the city change you? If you were an urban fox, you could be evolving yourself to a whole new stage and becoming more like a dog, according to a fascinating new study.
Researchers compared skulls from rural foxes around London with foxes who lived inside the city and found important variations. Rural foxes showed adaptation for speed and hunting after quick, small prey, while urban fox skulls exhibited changes that made it easier for them to scavenge, looking through human refuse for food, rather than chasing it. Their snouts were shorter and stronger, making it easier to open packages and chew up leftovers. They also have smaller brains, not meant for hunting but for interacting with stationary food sources, reports Science magazine.
Interestingly, there was much similarity found between the male and female skulls of the urban foxes.
The observed changes correspond to what Charles Darwin called the "domestication syndrome," comprised of traits that go along with an animal's transition from being wild, to tamed, to domesticated.
The study was led by Kevin Parsons, an evolutionary biologist at the University of Glasgow.
"What's really fascinating here is that the foxes are doing this to themselves," Parsons told the BBC. "This is the result of foxes that have decided to live near people, showing these traits that make them look more like domesticated animals."
The researchers are not suggesting you should go out and get a fox as a house-pet just yet. But they are seeing the evolutionary process taking place that's moving the urban foxes along the path towards becoming more like dogs and cats, explained the study's co-author Dr. Andrew Kitchener from National Museums Scotland.
A fox beneath a tree in Greenwich park, south east London on May 14, 2020.
Photo by Glyn KIRK / AFP
"Some of the basic environmental aspects that may have occurred during the initial phases of domestication for our current pets, like dogs and cats, were probably similar to the conditions in which our urban foxes and other urban animals are living today," said Kitchener. "So, adapting to life around humans actually primes some animals for domestication."
The specimen came from the National Museum Scotland's collection of around 1,500 fox skulls.
You can read the study in the Proceedings of the Royal Society B.
A fox at the LV County Championship, Division two match between Surrey and Derbyshire at The Brit Oval on April 9, 2010 in London, England.
Photo by Clive Rose/Getty Images
Is Bitcoin akin to 'digital gold'?
- In October, PayPal announced that it would begin allowing users to buy, sell, and hold cryptocurrencies.
- Other major fintech companies—Square, Fidelity, SoFi—have also recently begun investing heavily in cryptocurrencies.
- While prices are volatile, many investors believe cryptocurrencies are a relatively safe bet because blockchain technology will prove itself over the long term.
Presentation slide from Sanja Kon's presentation on the evolution of money at 2020 Web Summit
Credit: Sanja Kon<p>The move came shortly after the payments company Square invested $50 million into Bitcoin, and after Fidelity announced that it was opening a Bitcoin fund into which qualified purchasers could invest <a href="https://www.bloomberg.com/news/articles/2020-08-26/fidelity-launches-inaugural-bitcoin-fund-for-wealthy-investors" target="_blank">(minimum investment: $100,000)</a>. Together, this institutional backing might have something to do with Bitcoin's recent surge back to near its 2017 price peak of $19,783. (Bitcoin is listed at 19,384.30 as of Dec. 3.)<br></p>
Presentation slide from Sanja Kon's presentation on the evolution of money at 2020 Web Summit
Credit: Sanja Kon<p>But more importantly, it suggests cryptocurrencies might soon have the opportunity to prove themselves in real-world use cases. After all, skeptics have long doubted the ability of cryptocurrencies to go mainstream as a form of everyday payment. But people seem increasingly comfortable with digital payment systems.</p><p style="margin-left: 20px;">"The entire world is going to come into digital first," Schulman said at Web Summit, adding that PayPal's services already go hand-in-hand with cryptocurrencies. "As we thought about it, digital wallets are a natural complement to digital currencies. We've got over 360 million digital wallets and we need to embrace cryptocurrencies."</p><p>Sanja Kon, vice president of global partnerships at the cryptocurrency payments processor company UTRUST, also spoke at Web Summit about the increasing adoption of digital payments:</p><p style="margin-left: 20px;">"Physical cash is becoming more and more obsolete. And the next step in the evolution is digital currency."</p><p>Kon noted some of the inherent advantages of cryptocurrencies, namely ownership. </p><p style="margin-left: 20px;">"For many people, this is really the main benefit of cryptocurrency: Users owning cryptocurrencies are able to control how they spend their money without dealing with any intermediary authority like a bank or a government, for example," Kon said, adding that there are no bank fees associated with cryptocurrencies, and that international transaction fees are significantly lower than wire transfers of fiat currency.</p><p>Kon said cryptocurrencies have unique growth opportunities in areas where people aren't integrated into modern banking systems:</p><p style="margin-left: 20px;">"With cryptocurrencies and blockchain, with the use of just a smartphone and access to internet, Bitcoin and cryptocurrencies can be available to populations of people and users without access to the traditional banking system."</p>
Bitcoin as 'digital gold'<p>Still, it could take years for people to start using cryptocurrencies for everyday purchases on a large scale. Despite this, many cryptocurrency advocates see digital currencies, particularly Bitcoin, as a way to store value—digital gold, essentially.</p><p style="margin-left: 20px;">"I don't think Bitcoin is going to be used as a transactional currency anytime in the next five years," billionaire investor Mike Novogratz recently told <a href="https://www.bloomberg.com/news/articles/2020-10-23/novogratz-says-bitcoin-is-digital-gold-not-a-currency-for-now?srnd=markets-vp" target="_blank">Bloomberg</a>. "Bitcoin is being used as a store of value. [...] "Bitcoin as a gold, as digital gold, is just going to keep going higher. More and more people are going to want it as some portion of their portfolio."</p><p>There are obvious parallels between gold and Bitcoin: Both are mined, do not degrade over time, are finite in supply, and aren't directly tied to the value of fiat currency, making them <a href="https://www.reuters.com/article/us-gold-inflation/gold-as-an-inflation-hedge-well-sort-of-idUSKCN1GD516" target="_blank" rel="noopener noreferrer">relatively invulnerable to inflation</a>. The obvious objection is that the price of Bitcoin, and cryptocurrencies in general, is far more volatile than gold.</p><p>But for investors who believe the inherent value of cryptocurrency technology will prove itself over the long term, these price fluctuations are just bumps on the long road to the future of currency. </p><p style="margin-left: 20px;">"It's no longer a debate if crypto is a thing, if Bitcoin is an asset, if the blockchain is going to be part of the financial infrastructure," Novogratz said. "It's not if, it's when, and so every single company has to have a plan now."</p>
Singapore has approved the sale of a lab-grown meat product in an effort to secure its food supplies against disease and climate change.
Approve for your dining pleasure<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="dd3f57f8baf14e654812d30a309d1f17"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/307gysA18_E?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p><a href="https://www.ju.st/en-us" target="_blank" rel="noopener noreferrer">Eat Just</a>, a company that produces animal-alternative food products, announced the news earlier this week. In what the company is calling a world first, Singapore has given it permission for a small-scale commercial launch of their GOOD Meat brand product line. For the initial run, the cultured chicken meat will be sold as an ingredient in "chicken bites."</p><p>"Singapore has long been a leader in innovation of all kinds, from information technology to biologics to now leading the world in building a healthier, safer food system. I'm sure that our regulatory approval for cultured meat will be the first of many in Singapore and in countries around the globe," Josh Tetrick, co-founder and CEO of Eat Just, <a href="https://www.businesswire.com/news/home/20201201006251/en/Eat-Just-Granted-World%E2%80%99s-First-Regulatory-Approval-for-Cultured-Meat" target="_blank" rel="noopener noreferrer">said in a release</a>.</p><p>According to the release, Eat Just underwent an extensive safety review by the Singapore Food Agency. It provided officials "details on the purity, identity and stability of chicken cells during the manufacturing process, as well as a detailed description of the manufacturing process which demonstrated that harvested cultured chicken met quality controls and a rigorous food safety monitoring system." It also demonstrated the consistency of its production by running more than 20 cycles in its 1,200-liter bioreactors.</p><p>While Eat Just did not offer details on its propriety process, it likely follows <a href="https://www.newscientist.com/article/mg24032080-400-accelerating-the-cultured-meat-revolution/" target="_blank" rel="noopener noreferrer">one similar to other lab-grown meats</a>. It starts with muscle cell samples drawn from a living animal. Technicians then isolate stem cells from the sample and culture them <em>in vitro</em>. These cultured stem cells are then placed in a bioreactor, essentially a fermenter for fleshy cells. The bioreactor contains scaffolding materials to keep the growing tissue from falling apart as well as a growth material—the sugars, salts, and other nutrients the tissue needs to grow. As the cells grow, they begin to differentiate into the muscle, fat, and other cells of meat tissue. Once grown, the tissues are formed into a meat product to be shipped to restaurants and supermarkets.</p>
An abattoir abatement?<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg2Mjg5OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyODg1NDI3N30.AYmFJfWQbPjK-o1IatyFHL-OLjcfXBMmQKYyvz4oT3s/img.jpg?width=980" id="8a82d" class="rm-shortcode" data-rm-shortcode-id="93f824fe4c6f397ab2b65e4665847e71" data-rm-shortcode-name="rebelmouse-image" />
A graph showing the number of animals slaughtered in the United States per year from 1961–2018.
Credit: Our World in Data<p>Singapore's approval is an important step in support for clean meats—so-called because they don't require animal slaughter and would likely leave a reduced carbon footprint—but hurdles remain before widespread adoption is possible.</p><p>The most glaring is the price. The first lab-grown hamburger was eaten in London in 2013. <a href="https://www.bbc.com/news/science-environment-23576143" target="_blank" rel="noopener noreferrer">It cost roughly $330,000</a>. As with any new technology, investment, iteration, and improved manufacturing will see the price drop substantially and quickly. For comparison, Eat Just's chicken will be priced equivalent to premium chicken.</p><p>Other hurdles include up-scaling production, <a href="https://www.nature.com/articles/d41586-019-00373-w" target="_blank" rel="noopener noreferrer">the need for further research</a>, and developing techniques to reliably produce in-demand meats such as fish and beef. Finally, not all countries may be as receptive as Singapore. Countries with large, entrenched meat industries may protect this legacy industry through a protracted and difficult regulatory process. Though, the meat industry itself is investing in lab-grown meat. Tyson Foods, for example, has <a href="https://euromeatnews.com/Article-Tyson-Foods-announces-investment-in-clean-meat/697" target="_blank" rel="noopener noreferrer">invested in the food-tech startup Memphis Meats</a>, the company that debuted the world's first beef meatball.</p><p>"I would imagine what will happen is the U.S., Western Europe and others will see what Singapore has been able to do, the rigours of the framework that they put together. And I would imagine that they will try to use it as a template to put their own framework together," <a href="https://www.reuters.com/article/us-eat-just-singapore/singapore-approves-sale-of-lab-grown-meat-in-world-first-idUSKBN28C06Z" target="_blank" rel="noopener noreferrer">Tetrick told Reuter's during an interview</a>.</p><p>Regardless of the challenges, the demand for meat substitutes is present and growing. In 2020, plant-based substitutes like Beyond Meat and Impossible foods <a href="https://bigthink.com/coronavirus/plant-based-meat" target="_self">gained a significant foothold in supermarkets</a> as meat-packing factories became coronavirus hotspots. The looming threat of climate change has also turned people away from meat as animal products. Livestock production is environmentally taxing and leaves <a href="http://css.umich.edu/factsheets/carbon-footprint-factsheet" target="_blank" rel="noopener noreferrer">a much larger carbon footprint</a> than grain and vegetable production. </p><p>Then there's the moral concern of animal cruelty. In 2018 alone, 302 million cows, 656 million turkeys, 1.48 billion pigs, and a gob-smacking 68 billion chickens were <a href="https://ourworldindata.org/grapher/animals-slaughtered-for-meat" target="_blank" rel="noopener noreferrer">slaughtered for meat worldwide</a>. And those figures do not include chickens killed in dairy or egg production.</p><p>If brought to scale and widely available, clean meats could become serious competitors to traditional meat. <a href="https://bigthink.com/technology-innovation/meat-alternatives" target="_self">One report has even predicted</a> that 60 percent of the meat people eat by 2040 won't come from slaughtered animals. It could be just the thing for people looking for a meat substitute but who find tofurkey as distasteful as, well tofurkey.</p>