Tuesday, 21 May 2019

The Decoy Strategy in American Abortion Laws

     A LOT of people are really worked up about how outrageous and extreme the new anti-abortion legislation in Alabama, Georgia and Ohio is. Even among pro-birthers, people are saying it's too much, and that there ought to be exceptions allowing abortion in cases of abortion or incest.  For a while, I thought the extremist legislators were severely miscalculating, taking for granted that the 5-4 Republican majority on the Supreme Court was eagerly awaiting any old opportunity to overthrow Roe v. Wade.
     But now I've realized the method to this madness. The bits in the law that are getting people the most upset are absolutely deliberate, and they're meant to make everyone angry, and in particular they are meant to fail at the Supreme Court. Why?

     It's ablative armour to the bill. They hope that everyone will scream loudly enough that the law doesn't even provide exemptions for rape and incest, that nobody will bother to raise the more fundamental objection that banning abortion for anyone is and remains contrary to the principles articulated in Roe v. Wade. They hope that the Supreme Court will strike down the law citing only the fact that they don't include exemptions, and then they will immediately turn around and "fix" the problem by passing an identical version of the law with a couple of exemptions included, thus satisfying the Court's objections to the first version.

     I'm not sure how to defeat this strategy, if the Republicans on the court are determined to go along with it, but I hope the lawyers arguing for the pro-choice side focus their arguments on the substance of the ban itself, and don't get baited into focusing on the parts they don't intend to keep in the final bill anyway.

Wednesday, 13 March 2019

More on Revenue Neutrality

     Since my last post I've been trying to make sense out of the idea of revenue neutrality and why anyone would think it a desirable quality in any tax, let alone one like a carbon tax which is intended to provide an active incentive to shift away from fossil fuels. I have found two ideas plausible.

     The first is that someone has co-opted the concept of revenue neutrality from its original context. There are, after all, situations in which you want a particular set of options to be revenue neutral. 
     For example, suppose you run a small business as a corporation of which you are the owner and sole employee. You have a couple of options as to how you might take your compensation. You can have the company pay you a salary, which is deducted from the company's revenues as an expense so the company doesn't pay corporate income tax on it, but it means you have to pay personal income tax on your salary. Or, you can have the company pay you no salary as an employee, but issue you as a shareholder dividends on its profits. (Or you can use some mix of the two methods.) There may be all sorts of considerations you take into account in deciding which way to go. Maybe you want the company to buy some equipment, or maybe you expect to be able to sell the business to someone else in a couple of years, or maybe you need to establish a particular salary to qualify for a credit card or something. But your choice of method shouldn't make a big difference to your tax bill: we want the choice between paying a salary and paying a dividend to be revenue neutral in that respect. 
     There are a whole lot of similar scenarios in which we don't want tax consequences to  unduly influence a person's decisions, and so we need to design our tax regime to be revenue neutral with respect to those sorts of decisions.
     Notice, though, the context in which revenue neutrality of this sort applies. It doesn't apply to overall revenue, just the revenue consequences of a particular set of options for a given taxpayer or group of related taxpaying entities. Presumably, the government would be happy if the business prospered, made more money and ended up paying more taxes as a result. Indeed, that's part of why these particular choices should be revenue neutral; for the business to prosper, it should be making its administrative decisions on solid business reasons, rather than trying to figure out the best way to keep more of the money it's already earned. Encouraging it to favor dividends over salary or vice versa doesn't really help it to be more productive in the future. If you want to encourage them to invest more in new equipment or hiring more staff, it makes sense to give them those incentives regardless of whether they're paying dividends or salaries. There shouldn't be rewards or penalties for doing things that make no difference to the state's interest in promoting prosperity. So making these sorts of choices revenue neutral in the immediate instance is arguably part of a policy to increase revenue overall in the future.

     So I suspect that the term "revenue neutral" derives some of its appeal from the fact that it's often used in discussion of this sort of tax policy problem. And, as a term perhaps vaguely remembered as something tax policy experts treat as a desirable feature, it makes the objection that a carbon tax is not revenue neutral more informed and credible than just complaining "it makes you pay more taxes!" 

     The other way in which revenue neutrality might make some sense in the context of a carbon tax is when it's structured simply as a complete internalization of the externalities. As I argued in the previous post, the harmful impact of carbon fuels on climate is a cost that is paid by everyone, while only the consumer of the carbon fuels enjoys the benefit; that cost is external to the balance sheet of the consumer, and doesn't really factor into their buying decision. The carbon tax is intended to make the consumer pay a price that more accurately reflects that externalizer cost, thus encouraging them to use less carbon. 
     But that's only half of the externality equation. Ideally, the revenue from the carbon tax would be going to compensate those who are affected by climate change, in proportion to their losses. Failing that, it could go to funding efforts to reduce or avoid the damage. In an ideal world, the carbon tax would raise exactly enough money to make it all work out, either fully compensating the victims or fully preventing the damage. And, of course, if the costs of remediation or compensation are exactly equal to the revenue raised by the carbon tax, then in principle it's revenue neutral.
     If you see the entire purpose of a carbon tax, then, as redistribution of the costs of carbon emissions back to the people doing the emitting, then ideally, yeah, it should be revenue neutral as a broad first approximation. Person A inflicts an externality of $50 on person B, so government taxes person A $50 and gives it all to person B. Obviously there will be some administrative costs along the way, so it might not be perfectly revenue neutral, but close enough.

     The reason I reject this argument, though, is because it ignores the value of the shared resource itself: the carbon sink, our planet's capacity to absorb our carbon emissions without harm by growing plants or forming the calcium carbonate shells of sea creatures or whatever. A person who releases carbon into the atmosphere has a responsibility to ensure they don't thereby cook the planet, and ideally can use a little bit of the carbon sink to do that. But the sink can only absorb so much carbon in a given year, and so it's a scarce resource, one that can be rationed the same way we ration most other scarce resources: by pricing it appropriately. 
     A private owner of the carbon sink would be justified in charging a fee for its use, and earning income on that asset. A prudent manager would reinvest some of their revenue in efforts to preserve the asset's usefulness in the future, but there is no reason why that private owner should be expected to structure their fees to be revenue neutral. Of course, the carbon sink does not belong to any one person, but it is a valuable and scarce resource nonetheless, and one that the Crown therefore ought to manage on behalf of its collective owners (i.e. everyone). And our collective interest in it is no less than that of any single private owner would be: we should want to earn as much profit as we sustainably can from it. So we should want the government to charge a carbon tax on it that generates lots of revenue from it.
     Importantly, this principle applies independently of the whole externality concern; if the price of carbon is kept high enough that carbon emissions are kept low, there is no need to compensate those who don't suffer the consequences of a climate change that never happens. If we had started charging an appropriate fee for the use of this scarce resource many years ago, we could have avoided our current peril. 


Saturday, 9 March 2019

Some Invalid and Irrelevant Criticisms of the Carbon Tax

     An ad opposing Canada's carbon tax came across my Facebook feed the other day, sponsored by the Fraser Institute, and I'm going to unpack it here. This is the original image:


     As you can see, the ad objects to the carbon tax on four criteria: that it's not revenue neutral, that it doesn't replace existing regulations, that it doesn't reduce other harmful taxes, and that it doesn't fund subsidies to alternative energy sources. These are all silly and irrelevant objections, which I'll address in turn. 

Revenue Neutrality

     Whenever there's talk of a new tax or indeed any change to the tax system that isn't a straight up tax cut, the anti-tax crowd likes to insist that it should be "revenue neutral", meaning that it shouldn't change the total amount of revenue collected by the government, as if somehow the government is currently making exactly the right amount of revenue and should avoid disturbing this perfect balance.
     The carbon tax is a new tax on fuels that emit carbon dioxide into the air. The basic idea is that emitting carbon creates what economists call an externality: a cost of an activity that is not reflected on the balance sheet of the person choosing to engage in the activity. Someone else ends up paying the cost. In the case of carbon emissions, someone who chooses to burn a fossil fuel enjoys the benefit of the energy, but the cost (in terms of increased greenhouse effect and the resulting climate change) is borne by everyone, and not equally. In economic terms, the problem with an externality is that it distorts the decision-making process; the agent making the decision doesn't have a full measure of costs and benefits on their balance sheet.
     So the purpose of a carbon tax in this case is to change that calculus by making the price of carbon a little more reflective of the true cost, with the hope that people will shift their purchasing choices accordingly. Just like you might find yourself eating more bread if the price of potatoes goes up.
     What, then, would be the point of making a carbon tax revenue neutral? None, really. If a blight makes potatoes scarcer and thus more expensive, the grocery store does not reduce the price of bread for the sake of revenue neutrality. Potatoes just get more expensive, and so people start buying more bread instead. That's how markets work, and incidentally that's why the carbon tax is generally preferred by economists as a more free-market-friendly approach to the problem.

Replacing Existing Regulations

     There's a certain amount of sense here, if you consider the regulations in question to be straightforward restrictions on how much carbon you're allowed to emit. After all, ideally the increased price of carbon fuels should encourage people to use less simply out of economic self-interest, with no need for minimum fuel-efficiency standards.
     Except that regulations exist for a whole lot of reasons besides simply encouraging fuel efficiency. There are regulations requiring, for example, that diesel and gasoline pumps be clearly marked and identified as such, because you can do a lot of damage putting one in a vehicle designed to use the other. I suppose if you're paying more for fuel you might be extra careful not to waste money buying the wrong kind, but it seems unrealistic to hope that might be enough.
     It's entirely possible, of course, that there are regulations which are indeed rendered unnecessary by a carbon tax, and of course such regulations probably should be repealed. But that's only a valid criticism of the obsolete regulations, not the carbon tax itself. It's not the fault of your new refrigerator that you can't be bothered to take your old one to the dump.

Reducing Other Harmful Taxes

     I feel like this particular complaint is just a sneaky way of counting the first one on revenue neutrality twice, because the only way to make the carbon tax revenue neutral is to reduce other taxes accordingly. But let's pretend it's an independent argument, one that doesn't try to pretend that current revenue levels are ideal.
     Let's agree, for the sake of argument, that other taxes are indeed harmful and should be reduced. (In general, I do not think taxes are such a terrible thing, but I'm sure there are some which really should be cut or even eliminated.) With respect to the carbon tax, though, so what? Why is it the responsibility of the carbon tax to address these other inappropriate taxes? There are all sorts of important and pressing problems that the carbon tax utterly fails to remediate. It doesn't improve literacy scores. It does nothing about electoral reform. It doesn't prevent bank fraud, drunk driving, shark attacks or plagiarism. SO WHAT? Neither does brushing your teeth.
     Want to reduce other harmful taxes? Fine, have at it. But you can do that whether or not there's a carbon tax in place to try to combat climate change. Sheesh.

No Subsidies to Alternative Energy Sources

     Of all the criticisms, this is the one that actually makes the most sense. Yes, it actually would be good if some of the proceeds from the carbon tax went to either subsidize alternative energy sources, or to compensate the people most affected by climate change, the people paying the true cost of the externality. (In fact, the Alberta provincial carbon tax does fund programs aimed at facilitating the transition to other energy sources, but let's pretend it doesn't for the sake of argument.)
     But this is not an argument against having a carbon tax. A carbon tax is a carbon tax; what you spend the revenue on is a separate question. The tax end of the equation works regardless of what you do with the money, because it encourages people to shift their consumption away from fossil fuels by raising the price. Indeed, that in itself is a kind of indirect subsidy of alternative energy sources, because it makes them more price-competitive.

     I can't help but feel there's something a little disingenuous about the Fraser Institute objecting to a carbon tax for failing to offer subsidies to alternative energies. The other three (two) criteria are all consistent with their ideological concerns of reducing taxes and regulation, and it seems to me likely that if someone were to propose, independent of any carbon tax, that we should subsidize wind or solar power, they would object. And they'd object to adding a carbon tax to pay for it, since apparently they think a carbon tax ought to be revenue-neutral.

     It doesn't really seem like they're arguing in good faith.



Tuesday, 26 February 2019

On "Thinking for yourself"

     I have often seen memes circulating with text to the following effect:

"Did you know that it's possible to disagree with BOTH liberals and conservatives? It's called thinking for yourself!"

     It's always vaguely annoyed me, but only recently have I been able to articulate exactly why.  It's not that I am in any way opposed to the idea of thinking for oneself, because I consider that to be a very very good thing. Rather, it's that this particular expression of the idea is subtly framed in a way that tends to undermine that very ideal of independent thought.

     First, it equates "thinking for yourself" with disagreement. In fact, it is entirely possible to think for yourself and decide that ultimately you agree with someone else; indeed, that's kind of what's supposed to happen if you're both applying valid reasoning processes to the same data. If, however, you choose to disagree with someone else's conclusion for fear of not adequately "thinking for yourself", you're falling into a particularly perverse form of dependent thinking: you didn't reach your own conclusion so much as you just embraced the opposite of whatever someone else concluded.

     Second, it's also entirely acceptable and even appropriate sometimes to decide that someone else knows more about a particular subject than you do, and choose to defer to their expertise. I don't know an awful lot about medicine or human anatomy, but I had reason to believe that my surgeon knew what he was talking about when he said I had colon cancer, and so I made a conscious choice to follow his advice with respect to surgery and chemotherapy. Recognize that the decision to defer or not to defer to someone else's authority is always yours, and own that decision.

     Third, look at the "BOTH liberals and conservatives" language, and how it subtly advances the insidious "both sides are just as bad" narrative, which I think is just monstrous. At best, it's a lazy way of seeming savvy, because it allows you to hint that you are aware of various sins on both sides without actually having to know any specifics whatsoever. But it has the effect of providing a karmic subsidy to whichever side actually is worse, at the expense of the side which isn't.

     Do, by all means, think for yourself. And think about what it means to think for yourself, too.

Tuesday, 30 October 2018

Judicial Temperament

     What is a judicial temperament?

     Well, to begin with, what is it that a judge is supposed to do? We want them to listen patiently to all of the evidence and argument provided in a case, to consider it all impartially and render a reasoned, fair decision at the end. That's the external behavior we expect of them, but temperament is a matter of internal behaviour. I want to suggest that internally, we should want a judge to behave exactly the same way.

     There is a widespread view that we want a judge to put their emotions aside. I think this is not quite the right way to think of things. Emotions are an important part of our cognitive tool box, and should not be ignored. But they do need to be thoroughly cross-examined critically, because what they actually mean is not always what it seems.
     Imagine, for example, that you are hearing testimony from a man accused of sexual harassment. With great anguish, he talks about the pain and shame these accusations have brought to him and his family. Just imagine, he implores you, how you would feel if you were falsely accused of such heinous behaviour.
     And yeah, you figure, you'd probably feel pretty terrible. Maybe even more upset than he is. And so something in your gut tells you he's innocent.
     See, emotions can be misleading. Not his -- they're probably 100% authentic, though to be sure, they don't show he's innocent; a guilty person would feel every bit as much shame and fear and anger at being truly accused. So the fact that he's expressing genuine emotions isn't really strong evidence either way.
     No, it's your emotions that may be misleading you, and so you need to inquire more deeply into exactly what it is you're feeling here. You're seeing a man who is clearly suffering, whether that's deserved or not, and decent people naturally feel uncomfortable at seeing suffering. And it's clear that what is causing this suffering is that he is being suspected of truly shameful behaviour, and that means you can easily do something to help ease it: you can stop suspecting him, and maybe get angry at the other people who are still subjecting him to this cruelty.
     Your gut isn't telling you he's innocent; it's telling you to stop accusing him. They're not the same thing. Once you recognize this is what your emotion is telling you, you can evaluate it appropriately. It's not wrong to want to drop the matter, but there are lots of things we want to do that we recognize we shouldn't. The judicious approach is to listen to that feeling, understand what it really means, and then to listen just as carefully and critically to the counsel of all your other emotions and faculties before rendering a decision. What makes this difficult is that a strong emotion often seems to be urging you to ignore all these other considerations; a judicial temperament is one which resists that urge.

     This is actually the theme in Plato's Republic. The well-constituted city (a metaphor for the well-balanced human soul) is populated by the artisans (representing the material appetites), the guardians (representing the passions) and the philosopher kings (representing reason). Reason rules, but it must do so with regard for the needs of the other constituents. It must listen to and consider carefully their counsel, but it must not abdicate the actual decision-making power to any of them.
   

Monday, 30 July 2018

The Meaning of "Collusion"

     The first time I encountered the word "collusion" in a formal, technical sense was in a family law class. We were talking about the legal history of divorce, and what used to be required to get one.
     Way back in the 16th Century, Henry VIII founded the Church of England in large part because the Catholic Church wouldn't annul his marriage to Catherine of Aragon, but that really didn't make divorce palatable to the lawmakers generally. In Ontario, you actually needed a private Act of Parliament to dissolve a marriage, right up until 1930. It wasn't until 1968 that the federal government passed the Divorce Act making divorce law uniform across Canada. Even then, you needed adequate "grounds for divorce"; you couldn't just both mutually decide you didn't want to be married anymore. And one of the grounds for divorce specified in the Act was adultery.
     But not just any old act of adultery would do. See, divorce was seen as a remedy to a wrong, which meant that you had to genuinely have been cheated upon, wronged by an act of infidelity that thereby made it impossible for you to remain married to that cheating scumbag. That meant that, for example, a couple that both agreed they wanted to split could not get around it by arranging for one of them to go have a one-night-stand. If you agree to it, you haven't been cheated on. And if you then represent to the court that OMG, your spouse cheated on you so can you please have a divorce, then you're in effect defrauding the court by claiming to have been hurt by something you actually wanted.

     Now, that's kind of a ridiculous way to structure the law on divorce, such that you can only get a divorce if one of you kinda still wants to stay married enough to be hurt by adultery, and the law was changed in 1986 so that you only needed to have a breakdown in the relationship as evidenced by living "separate and apart" for at least a year. (That still sounds like a lengthy delay, but in practice it need not be. I know of couples who simply moved to separate bedrooms in the same house, and that counted. What's more, since legal proceedings take some time, you don't actually have to have started living separate and apart for a full year when you file; it'll take several months at least to get before a judge, so by then it's usually been close to a year since you moved to separate bedrooms.)

     But collusion is still a thing. Black's Law Dictionary defines it thusly: "An agreement between two or more persons to defraud a person of his rights by the forms of law, or to obtain an  object forbidden by law." While it's no longer relevant to the law of divorce, it does still apply to other situations, most obviously insurance fraud.
     Consider this hypothetical example. We both have cars we don't really want anymore, and don't need to replace. Maybe we've already got other vehicles, or maybe we've decided to take the bus more often and just don't want to own cars anymore at all. Nobody's offering a good price to buy them from us, but we have pretty good collision coverage on our insurance policies, so we decide to stage a collision and write them off.
     If we stage it just right, it will look like one or both of us was negligent, and only guilty of breaking a few non-criminal traffic regulations, but if we don't intend to keep our licenses or insurance policies, we can stand to suffer a few demerits, and if the fine isn't too great the insurance payout may still be worth it. So we arrange to find an intersection where we're unlikely to cause greater harm or be observed by too many witnesses, and trusting to our seatbelts and airbags to prevent serious permanent injury, we deliberately smash our cars together just badly enough for them to be insurance write-offs.
     The damage to the vehicles and any resulting injuries are genuine. In damaging each other's cars, we have not committed torts against each other because we've both consented to this arrangement, and assuming our injuries are modest, the same argument applies to criminal or tortious assault. But for the fact that we both deliberately brought this about, there would be no legal obstacle to an insurance payout indemnifying us for our losses. Heck, even if only one of us had deliberately caused the accident, the other would still be entitled to compensation as the victim of an intentional tort. But in this scenario, we both intended for this to happen, and the fraudulent claim to this insurer is simply that we didn't have any agreement to do this, or in other words, that we did not collude.

     It's true that collusion itself is not a crime. There is no statute that expressly prohibits "collusion". But it's also true that there's no statute that expressly prohibits "punching someone in the face", either.  Whether punching someone in the face is a criminal act depends on other factors, particularly the absence of consent. (See Criminal Code of Canada, s.265(1).)

     So it's not especially helpful to point out that collusion isn't a crime. It depends on what you're colluding to do.  Colluding to obtain a divorce wasn't criminal; it just meant you didn't get your divorce decree if you were caught. Colluding to collect an insurance claim is insurance fraud, which often is a crime. But regardless of what you're colluding to do and whether it's technically criminal or not, collusion is inherently shady.


Monday, 23 July 2018

On "Virtue-Signalling"

     I've been in a number of arguments in the last year or so where my opponent has thrown out "virtue-signalling" as a way to discredit my position, which I found rather baffling at first. I always understood virtue signalling to refer to conspicuous behaviours meant to signal virtue, without necessarily being virtuous themselves. For example, you don't have to actually be virtuous to wear a T-shirt that says "I'm virtuous!" but it still might trick other people into thinking you are and treating you accordingly. Actually advocating virtuous positions, though, didn't seem to me to be the sort of thing you'd criticize someone for.
     But I understand now that it's a fairly common ploy among the alt-right and others to try to undermine the arguments of anyone who might say something, well, virtuous. The intent is to suggest that the person saying "Don't torture puppies" is just a hypocrite who doesn't actually care about puppies and really just wants to impress people with how kind they are to puppies, while deep down you know they're probably torturing lots of puppies in secret.

     It's a stupid argument, if you think about it, but it's not really meant to be thought about. It's successful when it baits you into bickering about how really truly sincerely you mean it, instead of focusing on establishing the point you set out to make in the first place. And there's no way to win that fight.
     Nonetheless, it is a stupid argument, because if you don't take the bait it pretty much surrenders the whole debate. I mean, if you're arguing X and I'm arguing Y and I say you're just saying X to impress everyone with how virtuous you are, haven't I just conceded that X is the sort of thing a virtuous person would be expected to say? And if that's the case, who cares if you're actually virtuous or not? The issue is not how virtuous you are, but whether X or Y is correct.
     It gets even dumber. Remember that the point of accusing someone of virtue-signalling is to imply that they're a hypocrite, and don't really believe what they're saying. But if I concede that X at least appears to be correct while I am arguing for Y, I have effectively confessed my own hypocrisy; why on earth am I arguing for Y if I recognize that X is the more virtuous answer?

     When someone accuses you of "virtue signalling" in an argument, they're not saying you're wrong. They're mocking you for being right.