Moral Effects of Socialism feedly

Moral Effects of Socialism
// Marginal Revolution

Dan Ariely and co-authors have an interesting new paper looking at moral behavior, specifially cheating, in people who grew up in either East or West Germany.

From 1961 to 1989, the Berlin Wall divided one nation into two distinct political regimes. We
exploited this natural experiment to investigate whether the socio-political context impacts
individual honesty. Using an abstract die-rolling task, we found evidence that East Germans
who were exposed to socialism cheat more than West Germans who were exposed to
capitalism. We also found that cheating was more likely to occur under circumstances of
plausible deniability.

…If socialism indeed promotes individual dishonesty, the specific features of this socio-political
system that lead to this outcome remain to be determined. The East German socialist regime
differed from the West German capitalist regime in several important ways. First, the system
did not reward work based to merit, and made it difficult to accumulate wealth or pass
anything on to one’s family. This may have resulted in a lack of meaning leading to
demoralization (Ariely et al., 2008), and perhaps less concern for upholding standards of
honesty. Furthermore, while the government claimed to exist in service of the people, it failed
to provide functional public systems or economic security. Observing this moral hypocrisy in government may have eroded the value citizens placed on honesty. Finally, and perhaps most
straightforwardly, the political and economic system pressured people to work around official
laws and cheat to game the system. Over time, individuals may come to normalize these types
of behaviors. Given these distinct possible influences, further research will be needed to
understand which aspects of socialism have the strongest or most lasting impacts on morality.

It’s interesting that Ariely et al. try to explain cheating as a result of socialism. My own approach would look more to the virtue ethics of capitalism and Montesquieu who famously noted that

Commerce is a cure for the most destructive prejudices; for it is almost a general rule, that wherever we find agreeable manners, there commerce flourishes; and that wherever there is commerce, there we meet with agreeable manners.

See Al-Ubaydli et al. for a market priming experiment and especially McCloskey on The Bourgeoise Virtues for more work consistent with this theme.


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Income Inequality Is Not Rising Globally. It’s Falling. – feedly

Income Inequality Is Not Rising Globally. It’s Falling. –
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Paying Teachers According to Seniority is Nonsensical and Ineffective feedly

Paying Teachers According to Seniority is Nonsensical and Ineffective
// Reason Magazine – Hit & Run

TeacherSo argues a recently released study by The New Teacher Project. According to The Huffington Post:

The report, titled “Shortchanged: The Hidden Costs of Lockstep Teacher Pay,” says the “lockstep pay” system of most school districts gives all teachers the same pay increases, regardless of performance. The report contends effective teachers should be rewarded, especially in high-poverty districts that pose the greatest teaching challenges. It estimates that U.S. school districts spend at least $250 million a year on automatic pay raises for ineffective teachers.

“Beginning salaries have to be high, one because it’s fair and new entrants are not going to consider a profession with low starting salaries,” Tim Daly, TNTP president, said over the phone. “The second thing is we need to accelerate salary growth for early top performers. In other careers people often start at a moderate salary, but top performances accelerate quickly because they get promoted.”

The study essentially finds that “lockstep pay”—automatic yearly salary raises given to all teachers regardless of merit—incentivizes bad teachers to stay in the field (since their raises are unconditional) and drives away good teachers (since their efforts go unrewarded).

Paying teachers according to their degree attainment is also ineffective, the study finds:

Last year alone, schools across the country spent an estimated $8.5 billion on raises for teachers due to master’s degrees—enough to cover the cost of all school nutrition programs for more than 15 million students. When teachers earn a master’s degree or a PhD, they move into a new “lane” on the salary scale, which translates into thousands of extra dollars in salary every year for the rest of their career. In fact, teachers who pay $25,000 for a master’s degree today and remain in the profession for 20 years could expect to triple their investment. Not surprisingly, 56 percent of all teachers have master’s degrees.

However, there is mounting evidence that this massive investment in advanced degrees is wildly disproportionate to its actual impact on the quality of instruction in classrooms. Over the last several decades, studies have found that advanced degrees have little to no measurable effect on a teacher’s ability to help students learn. In some cases, advanced degrees may even have a negative effect.

Teachers union leaders will likely condemn the study—they remain stubborn defenders of lockstep pay—but perhaps it can provide ammunition for good teachers whose hard work deserves a logical pay system.

For more coverage of teacher pay, watch ReasonTV‘s “The Two-Million-Dollar Teacher.”


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Quotation of the Day… feedly

Quotation of the Day…
// Cafe Hayek

(Don Boudreaux)

… is from page 220 of my colleague Tyler Cowen’s 2007 book, Discover Your Inner Economist:

Markets are not just about the steam engine, iron foundries, or today’s silicon-chip factories. Markets also supported Shakespeare, Haydn, and the modern book superstore. The rise of oil painting, classical music, and print culture were all part of the same broad social and economic developments, namely the rise of capitalism, modern technology, rule of law, and consumer society. The Renaissance occurred when growing cities and reopened trade routes created enough wealth to stimulate demand for beautiful art. Beethoven gave music lessons and concerts to a rising middle class and later sold them sheet music; his rise required the printing press, the affordable piano, and ready travel around Europe.


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Fair Trade is Fraud. And Getting Worse. feedly

Fair Trade is Fraud. And Getting Worse.
// Kids Prefer Cheese

Alan Reynolds: Why Piketty’s Wealth Data Are Worthless – WSJ


Dear Ultra-Rich Man : The Freeman : Foundation for Economic Education feedly

Dear Ultra-Rich Man : The Freeman : Foundation for Economic Education


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