A note on the three Californias and arbitrary borders

As many of you may know, there is a proposal to split up California into three parts: north, south and ‘ye olde’ California. This proposal is idiotic on several fronts. For starters the best university in LA, the University of Southern California, would find itself in ye olde California. Meanwhile my university, UC Riverside, would overnight become USC Riverside. Now, I wouldn’t be against the Trojan football team relocating to Riverside, especially since Riverside doesn’t have a team of it’s own. However the proposed split would cut off the Inland Empire and Orange County from Los Angeles county.

This despite the fact that the greater LA area is composed of LA-Ventura-Riverside-San Bernardino-Orange counties. These counties are deeply interwoven with one another, and dividing them is bizarre. Imagine the poor “Los Angeles Angels at Anaheim”. What horrendous name will they have to take on next? The “San Diego Angeles at Anaheim”?

Beyond it’s idiocy the proposal makes a larger point: government borders are, for the most part, arbitrary and plain stupid. The proposal to split up California ignores the regions socio-cultural ties to one another, but there are countless other examples of senseless borders.

For example, who was the bright guy that decided to split up Kansas City between Missouri and Kansas? And let’s not even get started on the absurd borders of the old world.

Thoughts? Disagreements? Post in the comments.

Weed, and the Libertarian Party’s future

Last week, the Trump administration announced it would be pursuing a federalist approach to cannabis legislation, effectively allowing states to create their own rules about how the drug is classified and sold.

This is a big change in American drug policy. One common opinion of the Obama era is that the federal government took a relaxed approach toward policing states that were decriminalizing marijuana. The 2008-2016 administration shifted the financial language of the drug war from a law-and-order crackdown to a public safety effort, and placed a low priority on intervening in states with medical legality. Real reform was introduced like the Rohrabacher-Farr amendment which prohibited the Department of Justice from policing medical marijuana states with federal funds. However, DEA raids and reconnaissance missions continued — like in my home state, where counter-economizing Californians sold a whopping five times more weed than they consumed (often to states where it is illegal).

Under Obama, it looked like, with a president less enthusiastic about beating up stoners, American drug policy might start to approach the 21st century. Some skepticism was reintroduced when Senator Sessions was appointed Attorney General under President Trump. Jeff “Good People Don’t Smoke Marijuana” Sessions is explicit about supreme federal authority for drug laws, and supported overturning Rohrabacher-Farr. This, indeed, would be a return to normalcy. For the last half century, it has not been characteristic of the federal government to stay out of drug use — rather than the Trump administration being a Republican re-installation of the war on drugs, we would be witnessing a general return to the 20th century status quo. However, Trump’s announcement makes it seem like we can finally welcome the unexpected.

Trump’s representatives have positioned this move to give up cannabis regulation to the states in a philosophy of states’ rights. Whether or not Trump cares about dual federalism, the repeal of marijuana prohibition — medical, recreational and federal — sweeping across states the last decade is a big win for individual liberty, and, since neither Party has been particularly friendly to cannabis, would seem to point to mainstream party acceptance of libertarian ideas.

What is the Party’s track record on cannabis? The Libertarian Party explicitly opposed drug laws in its first 1972 national platform. Now, in our present day, drug decriminalization is not a radical stance but something more mainstream. Failed or ex-politicians from either party have made a habit of coming out in support of legalizing marijuana the last few years, and up north, the Canadian Liberal Party may now endorse wide-scale reforms. Just yesterday, Senate Minority Leader Chuck Schumer announced he would introduce a bill to directly decriminalize marijuana as a federally classified substance. We’ll see how it goes. But it is now clear that in the same way Libertarians supported gay marriage decades before either partisan establishment now does, one doesn’t have to seek out a minarchist anymore to find someone who opposes drug laws or mass incarceration. (One mainstream policy position that hasn’t budged — war.)

So although we see radically unlibertarian moves nearly every day in Congress and the executive (e.g., FOSTA and Syria), some of the ideas of liberty have spread and reached mainstream status.

This raises some questions about the state of the philosophy and the Party, and more than just drug policy. What does it mean when our more eccentric ideas gain traction in the bigger political world? This question is tied to the purpose of an embedded libertarian political party in the first place.

Economist David Friedman made the point in the postscript to Machinery of Freedom that the purpose of the Libertarian Party is to not have a Libertarian Party. David’s argument is not the same thing as Austin Peterson’s brand slogan, to “Take over government in order to leave people alone.” Instead, David’s argument was built around a public choice understanding of political institutions, but the same conclusion follows from several different premises about the nature of third parties and especially those with a goal of mitigating or eliminating politics.

For American institutional reasons — codified in law and practice — a third party is almost certainly never going to win an election. David thinks, therefore, the purpose of a fringe political party is aspire to the legacy of the Socialist Party of the early 1900s. The Socialist platform in 1928 has succeeded in infiltrating establishment policy, even if the Party last election drew less than a tenth of 1% of the vote. Fringe parties are more successful as beacons of alternative policy than legitimate political competitors. The Party does not pursue political success but influence; hopefully, we will one day not need it to affirm liberty.

So, let’s return to cannabis decriminalization, where we are seeing a libertarian idea achieve mainstream political support.

Legalizing weed is a victory for libertarian ideas and a defeat for the Libertarian Party. Part of the simplistic draw of Libertarianism is “fiscal conservatism and social progressivism,” which, as a one-liner, allows recruitment from both the Republican and Democratic Parties. Now, however, if the progressive leaders, and the Republicans, are co-opting drug decriminalization, there is a lot less draw for social liberals to vote for Party alternatives more aligned with their radical agenda. (I know this, for instance, because drug legalization as an issue first drew me from Democratism to libertarianism in high school.) Hillary Clinton could have partially avoided her image as a crony neoliberal if she adopted more social freedoms, which would only leave her smears on the Left as an imperialist and capitalist.

A recent, rather strange video by AJ+ took aim at libertarianism (read: the Libertarian Party) as “ultra far-right” and spent seconds noting that libertarians are, on the flip side, “anti-NSA, anti-intervention and anti-drug laws.” These are not the only policies that small government people have to offer to the Left if they properly understand themselves. But, as libertarians, we should actually hope this list grows smaller and smaller; the more it shrinks, the more it means that establishment parties are appropriating libertarian positions. Pretty soon, being “anti-drug law” may disappear from the elevator pitch. Subsequently, the “worthwhile aspects” of the Libertarian Party fade to the back, and the draw of the Party (to the left, or the right) decreases until it looks heavily status quo.

So, we could expect that the influence of the Libertarian Party shrinks with the increasing influence of libertarian ideas in general society, as the general electorate pressures establishment politicians to adjust their policy space.

However, a lot of things are being taken for granted here. Do politicians actually respond to the general public consensus and public desire? Is it the case that “libertarian” ideas are spreading to the mainstream, or is it more “progressive” or “traditionalist” ones that are moving it in ostensibly similar directions? Can the ideas alone move policy positions without backing money?

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We also know that the power of the Libertarian Party has greatly increased since its humble beginnings (whether or not its reputation has improved). My hypothesis is that the influence of libertarian ideas in society at large pressures the estabishment parties to adjust their positions, which in turn makes the Libertarian Party more irrelevant. This is not disproved by an increase in Libertarian Party power. The ideas, even if libertarian, still need to be seen as “libertarian” for it to hurt the Party. For instance, Chuck Schumer said “Looking at the numbers” guided him toward decriminalizing cannabis at the federal level and cited the ACLU.  These “numbers” have been available for decades, from a potpourri of alternative political thinktanks. Citing them from the ACLU will not embed the bill — also faux-embedded in a philosophy of states’ rights — in libertarianism, but in the context of mass incarceration, criminal justice racial disparity and THC research opportunity. These are all good contexts. But the individual freedom element key to libertarianism will be missing, and of course it is, because Schumer says nothing about the other plethora of federal drug laws which prohibit freedom. Recognition of the libertarian aspect of ideas which are libertarian, I think, is essential for them to harm a Party which bases itself around the philosophy.

All of this means that there will be perverse incentives in third-party leadership. Politicians want job security like the next guy, and organizations in some sense want to “survive,” so the interests of libertarianism and the Libertarian Party are in one way opposed (or environmentalism and the Green Party). Liberty is more advanced by incumbent politicians (who are liberty-advancing, of course) than defeated politicians. And the mainstream parties are successful, the fringe parties are not. Thus, liberty is better spread when our ideas take off and get mainstream acceptance, but this will only serve to weaken the Libertarian Party itself, as its attraction as a political outlier fades. This must be obvious: no Libertarian Party candidate is going to claim the White House in our lifetime, and the best hopes of libertarian success are in influencing other parties. So, even when we gain more percent of the vote, the success is in getting people to hear about libertarianism, not in actually convincing people to vote Libertarian.

Conflicting incentives (working in the Party and advancing liberty) means that the Party could be taken over by bad actors like any other political organization, and indeed David predicts this with the increase of political clout. Parties with political power have plenty of favors to dish out, and it only takes a few non-ideological Party members to break ranks. As some of the ideas become more mainstream, this is one possibility. Another is disintegration: there might be no reason for the Libertarian Party to continue, given that its unique draw has suffused into larger bases. A third option is that more radical contingents, like the Mises Caucus, achieve ideological supremacy as the moderate libertarians leave for the newly-libertized Democrat and Republican parties.

In any case, libertarianism faces a conundrum in its Party format. Much of the problems apply to other third parties, but some are unique to libertarianism. One brutal confrontation is the acknowledgement that legalizing cannabis will advance liberty and simultaneously hurt the liberty movement. To this end, Saul Alinsky’s reflection in Rules for Radicals is potent.

The Woodlawn Organization in Chicago is trying to stop the University from bulldozing the black ghetto. The activists issued five demands for the city council, grew in power, and defeated the construction project. Eight months later, the city crafts a new policy on urban renewal to the frustration of the Woodlawn Organization, who barge into Alinsky’s office denouncing the policy statement. But “Through the tirade it never occurred to any of the angry leaders that the city’s new policy granted all the five demands for which the Woodlawn Organization began. Then they were fighting for hamburger; now they wanted filet mignon; so it goes. And why not?”

The solution to one problem creates a new problem, and there are always future problems to work on. Liberty will just have to keep trucking through the victories, and learn from our friends the Socialists of 1928 and Saul Alinsky, who never joined a political party.

Happy 4/20.

“Does Russia own a piece of the US?”

That’s the title of my latest piece over at RealClearHistory. An excerpt:

The Russian-American Company was run through Saint Petersburg and thus had a strict racial hierarchical code in place, in conformity with the latest beliefs about race at the time. The neighborhoods of Fort Ross were segregated, but an archaeologist at the University of California, Berkeley, Kent Lightfoot, has produced excellent research at Fort Ross, showing how the Company’s racist charter was unofficially ignored, with miscegenation widespread (“creoles” was even created as an official race for documentation purposes) and interethnic activities commonplace. The people inhabiting Fort Ross preferred to follow instead something the anthropologist Jean-Loup Amselle calls “mestizo logics.”

Please, show me some love.

Kent Lightfoot can be found at NOL here. Jean-Loup Amselle can be found at NOL here. I also give a shoutout to Andrei Znamenski‘s work in the piece, so be on the lookout for that.

I didn’t get to delve as much into this piece as I’d have liked to. I wanted to get more into the inner workings of the Russian-American Company and compare it to the Dutch East India Company, but that sounds like a tall task even for a PhD dissertation.

I don’t think I did a good enough job of highlighting just how rich Pacific Rim trade was in the early 19th century. I tried in vain to sneak a reference to Hawaiian laborers that could be found throughout the Pacific world at the time of Fort Ross’ founding, but I’ve got a 600 word limit.

Also, I wanted to highlight the fact that Native Americans weren’t losers in the opening up of the Pacific to the world. They were active participants in the globalization of the Pacific Rim trade. They were powerful. I don’t know if I’d focus on California Indians to highlight Native American actors. I’d probably focus on an area a little further north, in the Puget Sound-Vancouver area.

At any rate, hope you enjoy the piece!

Mormons and California’s Gold Rush

The folks over at RealClearHistory have enjoyed my weekly column so much that they’ve invited me to write a second weekly column for their Historiat blog. I was tasked with writing the introductory essay for a blog that has been dormant for 3 years. Here’s an excerpt:

Initially the Mormon leadership in Nauvoo sought to establish a new homeland in northern California – which was far enough away from the American, Mexican, and British governments to be considered safe – and Brannan was tasked with the initial wave of settlement. Once Brigham Young reached the Salt Lake valley, however, he changed his mind and decided that the state of Deseret should be run from Salt Lake City instead of northern California. Much of this decision had to do with the fact that the trek from Nauvoo, Ill. to Utah was so arduous, and there was little inclination to keep pressing onward to northern California through the Great Basin’s high altitude desert. But Samuel Brannan’s success in San Francisco, coupled with his earlier wayward fancies, also played a part in Brigham Young’s decision to establish the Mormon church’s capital in Utah instead of northern California. Samuel Brannan was competing with Brigham Young to be the leader of the Mormon church.

Please, read the rest. I am not quite sure if there will be a specific day assigned for my Historiat posts, but my regularly-scheduled Friday column is still a thang.

I haven’t seen anybody here explain why Trump’s protectionist tariffs are horrible (yet), so here’s Jacques on the topic. Here is the NY Times on the same topic.

Inequality and Regional Prices in the US, 2012

I have just completed a short piece on the impact of regional prices on the measurement and geographic distribution of low income individuals. Basically, Youcef Msaid and myself* used the March 2012-CPS data combined the BEA’s regional purchasing power parities database to correct incomes.

We found is that the level of inequality is very modestly overestimated (0.5%). Now this is a conservative estimate since we used state-level corrections for price differences. This means that we took price corrections for New York state as a whole even if there are wide differences within New York state. Obviously, with more fine-grained price-level adjustments we would find a bigger correction but it is hard to imagine that it could surpass 1-3%.

That was not our most important result. Our most important result relates to where the bottom decile of the income distribution is geographically located. We find that instead of being found disproportionately (relative to their share of the total US population) in poorer states, the bottom decile is disproportionately found in rich states. The dotted black line in the figure below illustrates the change in the number of individuals who are, nationally, in the bottom 10%. New York and California have significant increases while West Virginia has a large decrease. The dark black line shows the same for the top 10%.

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Another way to grasp the magnitude of this change is to relate the change to the population shares of each decile by state. For example, New York had 6.29% of the US population in 2012 and 6.61% of all Americans in the bottom 10% of the income distribution before adjusting for regional purchasing parities. After adjusting however, New York’s share of the bottom 10% surges to 7.88%.

Why does it matter? Because most of the cost difference adjustments come from differences in housing costs. The first obvious point is that housing is a crucial aspect of any discussion of inequality. The second, but less obvious point,  is that these differences are massive barriers to migration within the United States and the poorest are those for whom these barriers are the heaviest. Unfortunately, the high-cost areas are also high-productivity areas (New York, San Francisco for example) whose high costs are largely the result of restrictions on the supply of housing. This means that high-productivity areas – which would raise the wages of low-skilled and low -income workers are inaccessible to them. It also means that those who were present before the increase in productivity of these areas capitalized the gains in more valuable real estates (even if this means lower real incomes).

In this light, the geographic reallocation of the bottom 10% is consistent with an emerging literature that argues that inequality is in great a result of housing policy (see notably Rognlie’s reply to Piketty in the Brookings Papers).  This small modification (I consider it small) that me and Youcef made has important logical ramifications.

* Thank you to my friends Rick Weber (who blogs here at NOL and whose research can be seen here) and Ryan Murphy (whose research can be found here) who provided good comments to bring the paper to the stage where we are ready to submit.

How to split up California?

The idea of splitting up California has been previously discussed on NOL (see here, here, and most recently). In this post I wish to consider how California could be split up.

California has a large population of 38.8 million. For comparison Canada has 35.1 million residents distributed among its 10 provinces and the New England states house 14.7 million yankees in six states. With such a large population it is not surprising that the state has several regions with distinct cultures. This in itself is not sufficient merit to split up the state. One of the wonders of a liberal republican form of government is that diverse populations can coexist so long as they are treated equally before the law and have the freedom to exercise their various cultures. The problem is when these cultural differences lead to different public policy demands.

Consider for example the issue of abortion. In most matters of religion it is sufficient to allow different faiths to practice their beliefs so long as they keep to themselves. Why should non-Jews care if Jews must follow kosher dietary restrictions? The same cannot be done with abortion though. Those who believe, often due to their religious inclinations, that abortion is murder cannot tolerate its practice among those of other faiths or atheists. What is to be done?

One option would be to break up California. Although those on both sides of the abortion debate exist across California, there is also quite a bit of spatial correlation. See here. The Central Valley and Inland Empire counties both have significant portions of their populations favoring abortion limitations. Both regions also have low support for same sex marriage, see here, so it is safe to assume that their cultural differences with the rest of California is not on just one issue but several important public policies.

I would caution those who propose splitting up California between its inland and coastal regions. Both the Central Valley and Inland Empire may be culturally conservative, but the inland northern counties do not seem to fall in line. Nor would I recommend the Coastal/Inland split for those concerned about partisanship, see here. The San Francisco Bay Area, Northern Coast and Los Angeles are liberal strongholds but the Central Coast and Orange-San Diego region aren’t.

Similarly a North/South split would do little to help address regional cultural differences. The North/South split would usually split the state apart at San Luis Obispo-Kern-San Bernardino county lines. This would lead to the conservative Central Valley being lumped into the same state as ultra-liberal San Francisco. Meanwhile the Inland Empire and Orange-San Diego counties would find themselves sharing a state with blue Los Angeles.

What would be a good split then?

I personally favor the creation of four new states. Jefferson (the northern coastal and inland counties), San Francisco (the bay area states), Los Angeles (LA County), Central Valley (everything between Fresno and Bakersfield roughly) and the rest of southern California.

Given that any division would have to be approved by Congress the new states of Jefferson, San Francisco, and Los Angeles would have to be gerrymandered in such a way as to ensure they are blue states and maintain as many electoral votes from old California as possible. The Central Coast would likely be gobbled up between LA and San Francisco.  This gerrymandering would be needed to get Democrat votes who would otherwise be against losing all those electoral votes. Although Democrats would get two more seats in the Senate the Republicans could favor the deal in order to sweep extra electoral votes from the Central Valley and Southern California.

Although the split would be less than perfect, it would still grant greater say over public policy to the conservation counties.

Thoughts? Further maps on Californian public policy opinions can be found here.

P.S. In regards to the water issue, I like to think that the split of California would lead to a revision of the Colorado River Compact and related laws in order to create a more market oriented process for water allocation. I can dream can’t I?

Is government decentralization the right answer to differences across regions?

That’s the main question being asked by Federico Boffa, Amedeo Piolatto, and Giacomo A. M. Ponzetto, all economists. I cruised through the whole paper (pdf) and have some superficial thoughts. One snippet:

Western California is more liberal, even among Republican voters and politicians; Eastern California considerably more conservative […] At a first glance, such a political divide might suggest that a break up of coastal and inland California would be optimal on preference-matching grounds […]

[H]owever [this is a] superficial assessment. [Eastern California] contain[s] a large Hispanic population that overwhelmingly prefers the Democratic party. This group is much less educated, less politically knowledgeable, and less likely to vote than Republican supporters in the region, who are on average older, whiter, and wealthier. At the same time, the left-wing Hispanic working class in the Valley shares the political leanings of highly educated liberals on the coast. This ideological alignment goes beyond mere partisanship and includes shared preferences over policies.

As a consequence, our model suggests that the political integration of California is welfare maximizing. For relatively uneducated inland minorities to have a government corresponding to their preferences, it is essential that they share a state with ideologically aligned liberal elites in the Bay area. Right-wing Californians, instead, are sufficiently educated and influential to have a voice in state-wide politics, despite being in the minority: California had a Republican governor for twenty-one of the past thirty years.

[This lesson] applies more broadly. Disadvantaged ethnic minorities— which are less educated and often politically underrepresented— should belong whenever possible to the same polity as better educated and higher-status voters having similar political preferences. Only then are politicians effectively held accountable to both groups. (29-30)

California is “welfare maximizing”? Somebody help me out here. Isn’t it also possible that poor Hispanics and rich liberals form a voting bloc in California as it is because of how the GOP is patched together? If California split into an East/West, current coalitions would be shattered and it doesn’t follow that rich liberals and poor Hispanics would share the same voting preferences in the new arrangement. It doesn’t follow that rich conservatives and poor Hispanics in a hypothetical East would be at odds, either.

The biggest weakness in the paper, if you can call it that, is that the authors are focused on the fiscal aspects of federalism rather than the diplomatic, cultural, and political aspects. Federalism binds people together and forces them to at least try to come to an agreement about some issues. That’s a big deal, though it’s obviously not sexy.

The paper is focused on the EU and the US. There are lots of interesting insights into the European Union but the US angle is kinda boring (I’m sure is vice-versa for readers living and working in Europe). (h/t Mark Koyama)