Category: Law and Inequality

Automation and Jobs, cont’d

The always excellent Thomas B. Edsall has a piece today discussing the dilemmas addressed in the “jobless futures” post I wrote over the weekend. Here are some of the questions posed by “young researchers and prospective entrepreneurs at Singularity University” whom Edsall observed:

How much can wealth accumulate for a small slice of the population at the top, while large numbers of people are forced to work for ever lower pay or to drop out of the workforce altogether? For such a future society to function, would wealth need to be (coercively) redistributed from the top to those below, in order for the mass of the jobless population to survive? Who would have power and how would tax and spending policies be determined in such a radically bifurcated, automated, workless society?

These are tough questions, but at least they are the right questions. The management experts interviewed by Edsall have 19 proposals for addressing this transition.

Exiling the Poor from the Insurance Market

John Roberts’ jurisprudential wizardry in NFIB has been compared to the artistic genius of pro wrestlers and rappers. Poor Americans in states newly empowered to resist the ACA’s Medicaid expansion may need even more ingenuity to get themselves insured. Both Kevin Outterson and my colleague John Jacobi have observed the perplexing predicament imposed on the poor in states that keep Medicaid 1.0, and resist Medicaid 2.0. From Jacobi’s post:

The reform provides insurance subsidies through tax credits. The credits are calculated on a sliding scale, according to household level, for people with income up to 400% of FPL [the federal poverty line] — subsidizing more generously someone earning 200% of FPL, for example, than someone earning 350% of FPL. But, under 26 USC 36B(c)(1), credits will not be distributed to those with incomes below 100% of the FPL. Why? Because Congress assumed states would take up the Medicaid expansion, obviating the need for exchange-based subsidies for the very poor. . . .Bottom line: states rejecting Medicaid 2.0 will not only forego about 93% federal funding for the program between 2014 and 2022, but they could also be depriving the poorest of the uninsured from any shot at coverage — potentially affecting millions nation-wide.

Georgia hospitals are already worried about the “unexpected prospect of lower reimbursements without the expanded pool of patients” to be covered by the Medicaid expansion:
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Academic Biases (Regarding Google, and Beyond)

Yesterday a vice president of the European Commission announced preliminary conclusions regarding the EU’s antitrust investigation into Google. The EC has warned Google to “change or face fines,” as Alex Barker puts it, noting “possible antitrust problems in how Google favours its own products in search results.” I cannot predict exactly how far US cases will go, or if the EC’s efforts to guide the development of the search market will succeed. (I have offered some preliminary thoughts at Danny Sokol’s excellent symposium on Google at the Antitrust & Competition Law Blog.) However, I applaud the EC for its attention to the matter.

After attending the “Regulating Search” conference in 2005, I spent some of my early academic career trying to understand whether complaints about Google had merit. I was publishing on the matter in 2006, and have continued to do so. When I started writing about this topic, some established scholars mocked my interest in it. After I published Federal Search Commission? with a co-author, one IP professor loudly scoffed that “maybe we need a federal map commission” at a conference where the restaurant location was unclear. Establishment voices who have fought for net neutrality looked with disdain or bored incomprehension at someone who dared to question a Silicon Valley darling. One scholar even threw a draft of mine on the table at a faculty talk, loudly muttered “This is not scholarship!,” and boldly predicted that Google’s dominance of search couldn’t last for more than a few years. (That was in 2008.)

I don’t know whether the EU’s actions today will lead these skeptics to a different view of my work, or to condemnations of creeping socialism. But I do think the EU has now confirmed that it was appropriate for a legal scholar to raise the types of questions I have posed over the past six years. They deserved to be part of the agenda of internet law.

This is a somewhat roundabout (and hopefully not too self-pitying) response to Frank Bowman’s earlier post on the role of outside funding in academic research (and particularly Eugene Volokh’s intervention regarding First Amendment protection for search results). Like Bowman, I worry about the effect of outside money on research. However, I think it is often the academy’s own biases and presumptions that most threaten independent thought.
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Please Make Room for the Stateless Superrich

A recent panel at the Milken Institute decried a grave injustice. Jeff Greene, a billionaire real estate investor, noted that a single mother who weighed “over 300 lbs” received welfare of about $600 a month. “She could barely take care of herself, much less her kids,” lamented Greene. The redoubtable Niall Ferguson swiftly summed up the problem:

Why, he wondered, was Greene letting this lady off the hook? Why doesn’t she get up off her fat lazy butt and get a job?!, he demanded, with his Scottish brogue in full Braveheart mode. “Taking from the successful and giving from the unsuccessful.”. . . Loud applause ensued from the Wall Street-friendly crowd, most of whom paid several thousand dollars for a conference ticket.

Contrast the target of Ferguson’s wrath with the “stateless superrich,” whose “second, third, or fourth homes” are often vacant as they “spend a few months in St Moritz, before moving to their trophy mansion in London, and then on to their luxury villa in Sardinia for the summer months.” Some worry that “their children will become indolent spongers, who will blow their inheritance ‘recklessly and lose their ambition or even their health.'” But they tend to employ “legions of charge-by-the-hour gurus” who can help make crucial decisions about, say, “how to divvy-up seven properties between three” heirs. That is job creation par excellence.*
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Why Do We Lack the Infrastructure that We Need?

Brett Frischmann’s book is a summa of infrastructural theory. Its tone and content approach the catechetical, patiently instructing the reader in each dimension and application of his work. It applies classic economic theory of transport networks and environmental resources to information age dilemmas. It thus takes its place among the liberal “big idea” books of today’s leading Internet scholars (including Benkler’s Wealth of Networks, van Schewick’s Internet Architecture and Innovation, Wu’s Master Switch, Zittrain’s Future of the Internet,and Lessig’s Code.) So careful is its drafting, and so myriad its qualifications and nuances, that is likely consistent with 95% of the policies (and perhaps theories) endorsed in those compelling books. And yet the US almost certainly won’t make the necessary investments in roads, basic research, and other general-purpose inputs that Frischmann promotes. Why is that?

Lawrence Lessig’s career suggests an answer. He presciently “re-marked” on Frischmann’s project in a Minnesota Law Review article. But after a decade at the cutting edge of Internet law, Lessig switched direction entirely. He committed himself to cleaning up the Augean stables of influence on Capitol Hill. He knew that even best academic research would have no practical impact in a corrupted political sphere.

Were Lessig to succeed, I have little doubt that the political system would be more open to ideas like Frischmann’s. Consider, for instance, the moral imperative and economic good sense of public investment in an era of insufficient aggregate demand and near-record-low interest rates:

The cost of borrowing to fund infrastructure projects, [as Economic Policy Institute analyst Ethan Pollack] points out, has hit record “low levels.” And the private construction companies that do infrastructure work remain desperate for contracts. They’re asking for less to do infrastructure work. “In other words,” says Pollack, “we’re getting much more bang for our buck than we usually do.”

And if we spend those bucks on infrastructure, we would also be creating badly needed jobs that could help juice up the economy. Notes Pollack: “This isn’t win-win, this is win-win-win-win.” Yet our political system seems totally incapable of seizing this “win-win-win-win” moment. What explains this incapacity? Center for American Progress analysts David Madland and Nick Bunker, see inequality as the prime culprit.

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The Material Foundations of Corporate Culture: Goldman’s Lessons for Silicon Valley

Two resignation letters rocked Wall Street and Silicon Valley this week. Greg Smith elegized a once-great Goldman Sachs, now reduced to “ripping eyeballs out” of clients. (The industry sure has changed since the 90s, when the goal was to rip off the whole face of the client. I guess Dodd-Frank is working.)

On the West Coast, James Whittaker explains “Why I Left Google.” His complaints are more measured than Smith’s: “The old Google made a fortune on ads because they had good content. It was like TV used to be: make the best show and you get the most ad revenue from commercials. The new Google seems more focused on the commercials themselves.” Whittaker laments that the company has become obsessed, Ahab-like, with the social web’s whale, Facebook.

On one level, it’s not fair to compare the companies: the engineers at Google have contributed far more to society than finance’s “money-massagers.” Goldman represents the terminal phase of a liquidationist capitalism unmoored from social value. But its culture did not rot overnight. Rather, legal and material factors accelerated decay. Silicon Valley’s managers and regulators should take notice: the same process could happen there.
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Racey, Racey Neuro-Hype! Can a Pill Make You Less Racist?

Media outlets around the world reported yesterday that a pill can make people less racist.

“Heart disease drug ‘combats racism’” heralds the UK’s Telegraph.  “A Pill that Could Prevent Racism?” asks The Daily News.

Is this for real?

The answer is less racy – and less raced – but actually more interesting than the headlines suggest.

Researchers at the Oxford University Centre for Practical Ethics, led by Sylvia Terbeck, administered a common blood-pressure lowering drug, called propranolol, to half of a group of white subjects and a placebo to the other half.  (Read the study’s press release here and the research paper here)  The subjects then took a test that measures “implicit associations” – the rapid, automatic good/bad, scary/safe judgments we all make in a fraction of a second when we look at words and pictures.  The subjects who took the drug showed less of an automatic fear response to images of black people’s faces and were less likely to associate pictures of black people with negative words than the subjects who did not take the drug.  Based on the study’s design, it is likely that results would be the same in trials involving racism by and against other racial and ethnic groups.

This looks like the pill treated racism in the research subjects.  But this isn’t so.

Researchers have long known that propranolol has a range of effects that include lethargy, sedation, and reductions in several kinds of brain activity.  In high-flown medical parlance, this drug makes people really chilled out.  I know: I’ve been on propranolol myself (unsuccessfully) for migraine prevention.  When I was on the drug, my biggest fear was falling asleep at work – and even that didn’t stress me as much as it should have.

Because propranolol muffles fear generally, it reduces automatic negative responses to just about anything.  Propranolol has been used to treat everything from “uncontrolled rage” to performance anxiety and is being explored for treating PTSD.  Very recent research shows that it generally reduces activity in the brain region called the amygdala (more on that, below).

But the study remains interesting and important for a few reasons.  This is the first study to show that inhibiting activity in the amygdala, which is crucially involved in fear learning, directly reduces one measure of race bias.  This validates extensive research that has correlated race bias with heightened activity in that brain region.  (Although some contrary research also challenges the association.)  So this study helps support the idea of a causal relationship between automatic or pre-conscious race bias and conditioned fear learning.

The cure for racism born of conditioned fear learning is not to chemically dampen the brain’s response to fear generally – because fear is often useful – but to attack the causes of the conditioned associations that lead to bias in the first place.

The rest of this post will show how the fear response, claims about race, and the way the drug works all come together to point to the social nature of even “neurological” race bias – and to its economic and legal repercussions.

The fear response

When we see something that frightens or startles us, several regions of the brain become active – particularly the amygdala.  The amygdala has many functions, so a neuroimage showing activity in the amygdala does not necessarily mean that a person is experiencing fear.  But if a person has a frightening experience (loud noise!) or sees something she’s afraid of (snakes!), activity in the amygdala spikes.  This activity is pre-conscious and totally outside our control:  We startle first and then maybe stop to think about it.

The automaticity of fear serves us well in the face of real threats – but poorly in much of daily life.  Fear learning is overly easy: A single negative experience can create a lasting, automatic fear association.  Repeated, weak negative experiences can also form a strong fear association.  And, we can “catch” fear socially: If my friend tells me that she had a negative experience, I may form an automatic fear association as if I had been frightened or harmed myself.  Finally, fear lasts.  I can consciously tell myself not to be afraid of a particular thing but my automatic fear response is likely to persist.

Race bias and the fear response

In neuroimaging studies using functional magnetic resonance imaging (fMRI) on white and black Americans, research subjects on average have a greater amygdalar response to images of black faces than to images of white faces.  Researchers have interpreted this as a pre-conscious fear response.  Indeed, the more that activity in a person’s amydala increases in response to the images of black faces, the more strongly he or she makes negative associations with images of black faces and with typically African-American names (see paper here).

These automatic fear responses matter because they literally shape our perceptions of reality.  For example, a subject might be asked to rate the facial expressions on a set of white and black faces.  The facial expressions range from happy to neutral to angry.  A subject who has a strong amygdalar response to images of black faces is much more likely to misinterpret neutral or even moderately happy expressions on a black facial image as being hostile or angry.  This shows how fear changes our perceptions, which in turn changes how we react to and treat other people.  It also shows how fear alters perception to create a self-reinforcing loop.

This kind of pre-conscious or automatic racism matters economically and legally:  A majority of white people who have taken these implicit association tests demonstrate some automatic bias against black faces both associationally and neurologically.  White people numerically and proportionally hold more positions as decision-makers about employment – like hiring and promotion – and about legal process and consequences – like whether to charge a suspect with a crime, the severity of the crime with which to charge him or her, and whether to offer a generous or harsh plea bargain.  A study of two hundred judges serving in jurisdictions across the United States has shown that judges, too, more readily make these automatic, negative associations about black people than they do about white people.  The implication is that automatic racial bias could play a role in pervasively tilting the scales against black people in every phase of economic life and in every phase of the legal process.

Yet, current anti-discrimination law only prohibits explicit racial bias.  An employer may not advertise a position as “whites only” nor fire nor refuse to promote a worker because the employer does not want to retain or advance a black person.  Systematic racial bias that creates unlawful “disparate impact” also rests on explicit racism: plaintiffs who claim that they are proportionally under-represented in, say, hiring and promotion by a particular employer must show that the disparate impact results from an intentional discriminatory purpose.

Automatic race bias, by contrast, takes a different form – a form not barred by law.  Automatic discrimination expresses itself when the white supervisor (or police officer, or prosecutor, or judge, or parole board member) just somehow feels that his or her black counterpart has the proverbial “bad attitude,” or doesn’t “fit” with the culture of the organization, or poses a greater risk to the public than an equivalent white offender and so should not be offered bail or a plea deal or be paroled after serving some part of his sentence.

Tying it all together

If current anti-discrimination law does not touch automatic bias, and automatic bias is pervasive, then does this point to a role for drugs?

On propranlol, an implicitly biased interviewer or boss might perceive a black candidate more fairly, unfiltered by automatic negative responses.  (She might, of course, still harbor conscious but unstated forms of bias; propranolol certainly would not touch race-biased beliefs about professionalism, competence, and the like.)  But it also would generally dampen the decision-maker’s automatic fear responses.  An overall reduction in automatic negative responses would not necessarily be a good thing:  while it might free decision-makers from some false negative judgments based on race, it also would likely impair them from picking up on real negative signals from other sources.

And the take-away …

That a fear-dampening drug reduces racial bias in subjects helps confirm that much racial bias is based in automatic negative responses, which result from conditioned fear learning.  Although this finding is hardly surprising, it is interesting and important.  Any person reading this study should ask him- or herself: How does automatic fear affect my decisions about other people?  How does it affect the judgments of important economic and legal decision-makers?  How can we make it less likely that the average white person sees the average black person through distorting fear goggles in the first place?

The problem with this study and the headlines hyping it is that they perpetuate the idea that racism is the individual racist’s problem (It’s in his brain! And we can fix it!).  A close reading of the study points to the importance of socially conditioned fear-learning about race – which then becomes neurologically represented in each of us.  Despite the headlines, racism is not a neurological problem but a cultural one, which means that the solutions are a lot more complex than popping a pill.

What Economic Recovery & Growth Look Like in America

We are being told that it is “morning in America” once again. Economic growth is back. But where is the growth going? According to research by a prominent economist, from 2009 to 2010, those among the “bottom 90% of Americans lost $127,” while those in the “top 1% gained $105,637.” This is what recovery, “on average,” looks like: as long as individuals at the top can gain income at a rate higher than 90 times what the individuals in the bottom 90% are losing, “growth” is evident and “the economy” is in recovery. Perhaps this paper should be retitled “Properties of an Economy Without 90% of the Human Beings,” to raise its relevance for today’s policymakers.

On Social Policy, A Growing Divide Between Conservative Policy Elites and the Base

Mike Konczal has an interesting interpretation of the recent rise of Gingrich in GOP polling:

A common trope for conservative policy intellectuals is that they want to “means test” the welfare state – reduce its availability for those with high wealth and income and focus it on those with the least wealth and income. But the Tea Party base wants the opposite – they are opposed to a welfare state for the poor, young people, undocumented workers and other groups they think are undeserving. The welfare state is ok for people like themselves, but for people they think that don’t make the cut it should be a nonexistent or a burdensome affair.

From the latest research on the Tea Party we learn that “Tea Partiers judge entitlement programs not in terms of abstract free-market orthodoxy, but according to the perceived deservingness of recipients…The fundamental distinction for them is not state vs. individual, it is the division of the United States into ‘workers’ vs. ‘people who don’t work.’” This is welfare as private charity, charity conditional on fitting certain expectations, not as an unconditional right. . . .

[T]he conservative mind doesn’t see the economy as something that is defective when involuntary unemployment shoots up or something that should work to the advantage of those who have the least. To them, the threat of people going hungry for failing in the market is what creates the ability to thrive in that market. The market doesn’t just reward the successful, it punishes those who fall behind. Food stamps deny people of that experience[.]

So, too, might burial money intended for the poor. Gingrich has not yet elaborated on the bracing effects of dying without enough money for a funeral. But he does have hard-edged answers for those near the beginning of life, repeatedly urging a repeal of “outdated” child labor laws. Remember, you heard it on this blog first.

“The Workers are Animals. Let’s Replace Them with Robots.”

Among the billionaires at the vanguard of global capital, Terry Gou of Hon Hai (also known as Foxconn) deserves special recognition for his honesty. “Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache,” said the chairman. His company has also begun building “an empire of robots” to replace a whining workforce.

To get a better sense of why the “animals” may be complaining, be sure to listen to Mike Daisey’s extraordinary report on his trip to Shenzhen, home of a massive Foxconn factory. Here’s one excerpt:

N-hexane is an iPhone screen cleaner. It’s great because it evaporates a little bit faster than alcohol does, which means you can run the production line even faster and try to keep up with the quotas. The problem is that n-hexane is a potent neurotoxin, and all these people have been exposed. Their hands shake uncontrollably. Most of them can’t even pick up a glass.

I talk to people whose joints in their hands have disintegrated from working on the line, doing the same motion hundreds and hundreds of thousands of times. It’s like carpal tunnel on a scale we can scarcely imagine. And you need to know that this is eminently avoidable. If these people were rotated monthly on their jobs, this would not happen.

But that would require someone to care. That would require someone at Foxconn and the other suppliers to care. That would require someone at Apple and Dell and the other customers to care. Currently no one in the ecosystem cares enough to even enforce that. And so when you start working at 15 or 16, by the time you are 26, 27, your hands are ruined. And when they are truly ruined, once they will not do anything further, you know what we do with a defective part in a machine that makes machine. We throw it away.

When workers are already treated as machines, perhaps their replacement by robots should be a cause for celebration. But the question then becomes: what do the displaced do for a living? Is there an alternative to exploitation?
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