YOU SAY YOU WANT A REVOLUTION--WELL, YOU KNOW WE ALL WANT TO CHANGE THE WORLD ---Episode 3

  GEORGE HERBERT WALKER BUSH BEAT DUKAKIS
                                    1988 POTUS ELECTION


   The 1987 stock market crash had sown doubts about the strength of the  U.S. economy, and these were reinforced in 1988 by analyses such as Yale historian Paul Kennedy's The Rise and Decline of the Great Powers, suggesting that the United States might be going the way of Britain. Whereas Ronald Reagan had proclaimed "morning in America," in 1988, Senate Republican leader Robert Dole, Bush's nomination rival, called it "high noon." The economic showdown, many thought, would come with Japan, picture as overtaking the United States in both technology and the valuation of its stock market.
   The reason for citizen concern about apparent global retreat was less interest in foreign policy than in standards of living.  Because the global supremacy ushered in by World War II brought the U.S. golden age, a major decline could further erode what already seemed threatened. Polls taken for the various foreign policy organizations in the seventies and eighties made the point well enough. When asked what should be the priority of U.S. foreign policy, the public answered quite simply : JOBS. GOOD JOBS IN THE UNITED STATES. 

   Periods of Middle American Radicalism invariably touched his nerve. In 1990, with sensitivity to decline running high even before the recession,  Congress considered some vehicles of economic nationalism : proposals to tighten laws regulating foreign takeovers of U.S. companies, to target the lobbying activities and alleged tax evasion of foreign corporations in the United States, and to attach new "Buy American" requirements to U.S. foreign aid and promote exports in the face of German and Japanese advances. Statistics published in June 1990 indicated that the 1980s had been a decade of greed and wealth concentration. Taking that argument into the midterm election, Democrats blocked the Republicans' hoped-for gains. Autumn's preelection debate turned to new taxes. Bush's preoccupation with capital gains rate cuts, and alleged favoritism to the rich ; and by late October reports had the GOP in "free fall." Some party identification polling reported a ten-point Republican drop --- until the Republicans managed to partially refocus the public on the confrontation developing in the Persian Gulf. 

   When the recession seemed to worsen in 1991, even as official scorekeepers judged it as being over, public anger wiped away President Bush's huge gains from the seemingly successful Gulf War. By the end of 1991 the Democrats had won a surprise victory in a special Pennsylvania U.S. Senate election conducted on economic frustration issues, and right-wing populist and extremist David Duke had carried a statewide nomination contest in economically dissatisfied Louisiana.  The president in turn had a combative populist Republican opponent already stumping in the snows of New Hampshire, where the first 1992 presidential primary was just two months away. 
   

YOU SAY YOU WANT A REVOLUTION--WELL, YOU KNOW WE ALL WANT TO CHANGE THE WORLD---Episode 2

    

MIDDLE AMERICAN RADICALISM IN THE UNITED STATES , 1970 ---- 2000

   We now turn to specific issues ---- trade and globalization, corporate practices and CEO salaries, the domination of politics by big money, anger at the rich and their consumption, the Federal Reserve Board, and the international financial agencies as well as   Wall Street, speculation and insider practices----that voters and ideological activists have taken up in response to uncertain economic horizons. In contrast to other industrial countries, the United States had an especially prominent populist heritage; its stirrings have been a frequent electoral litmus. 

   Late in 1974, when Watergate was fresh in the U.S. psyche and unemployment was reaching post-Depression highs, Patrick Caddell---George McGovern's pollster in 1972 and Jimmy Carter's from 1976 to 1980---employed a survey using two-and-one-half - hour interviews to surface political beliefs and pathologies missed by more superficial inquiries. In his 1972 election samplings, 18 percent of Americans had been willing to back Wallace for president. By late 1974 that had doubled to 35 percent --- 18 percent wanting actually to elect him, 17 percent inclined to a protest vote. Voter ideology was churning. Many simultaneously favored radical socialistic economic solutions while taking a hard-line on cultural issues. 

   "The people smack in the middle --- the people who are the least ideological --- are the most volatile," Caddell argued. "Forty-one percent thought that the American way of life is disappearing so fast that we may have to use force to save it." "The middle class," he said, "is coming unhinged. 'Center extremism' is correct as a description."

   These views quieted by 1976, remaining subdued until 1978, when inflation was rising, OPEC was on the cusp of another oil price increase, and the Carter administration had reopened Vietnam-era psychological wounds over U.S. global retreat through a pair of treaties to convey the Panama Canal to Panama. The measures' strong support by U.S. banks and corporations seeking Panamanian and Latin American goodwill for their regional operations became a side issue. One activist later recalled the charges that certain large banks were holding IOUs that could not be redeemed unless canal revenues became available to Panama. Conservative populist leader Richard Viguerie called the treaties "a bail-out of David Rockefeller" and the Chase Manhattan Bank. 

   Liberals and corporation executives unacquainted with the dynamics of Middle American Radicalism found this opposition quaint and crude. However, as one historian of U.S. conservatism later noted, the New Right targeted treaty backers in 1978 and 1980. Of the 68 senators who had voted for ratification, 20 were denied renomination or reelection in those two years.

   By 1980 the canal fight, the second OPEC oil price hike, surging inflation, and the Iran hostage crisis had heightened a climate that Walter Dean Burnham, a leading scholar of U.S. political realignments, put in a context involving the end of the 1945-65 "golden age" a crisis of the economy, empire, culture, and state, and a politics of a "middle class under stress." The immediate result was the election of Ronald Reagan by a coalition much like Richard Nixon's of 1972 ; most of the usual GOP electorate with a notable increment of white working-class, Northern ethnic, and Southern religious fundamentalists voters. 

   What Burnham found unnerving about the Reagan coalition----his thesis that the early-stage crisis of the American "empire" and regime was producing a "reactionary revitalization movement" ---rested on multiple foundations. Beyond the broad conservative revivalism, the United States of the sixties and seventies, like London in the 1890s and Weimar Germany in the 1920s, had a prominent and affluent intelligentsia deplored by many ordinary folk and regarded by some as a symptom of national decay. In the Britain of the 1890s, this mood, together with concern about the industrial threats of the United States and Germany, added to the John Bull nationalism and Boer War imperialism promulgated by the Conservatives, giving them their crowning election victory in 1900. 

    Indeed, the Republicans of the Nixon and Reagan eras, deploring radicals, the avant-garde, and troublesome minorities (blacks) whie praising the patriotism of Merle Haggard's ballad "Okie From Muskogee" and defending overseas military involvement , were more than a little like the British Conservative governments of the late Victorian years. These Conservatives had deploredBloody Sunday, Fabians, Oscar Wilde, the Decadence movement, and troublesome minorities (Irish) while praising Rudyard Kipling and defending overseas military involvement. Thestage of British disillusionment represented by economic radicalization came later. 

   In the United States of the Reagan era, the frustration so visible in1980 had cooled by the 1984 election, which Reagan won with 59 percent of the vote, closely replicating the Nixon coalition of 1972 (61 percent) . In 1986, however, a sharp regional downturn hit the agricultural and energy states,and the Republicans lost the Senate they had controlled since 1980.  Frustration politics began regrouping after October 1987 when the stock market took its huge one-day drop. Through the summer of 1988 it looked like the Republican nominee, George Herbert Walker Bush, might lose the November presidential race. 

   Luckily for Bush, the Democratic nominee was Massachusetts governor Michael Dukakis, a humorless Harvard intellectual disdainful of the Middle American Radical stream who by October was himself under fierce Republican cultural attack. Democratic strategists complained that , "They're running a class war against us, saying we're a bunch of Cambridge-Brookline eccentric literature professors. We've got to fight back and say they're the party of privilege, the party of the rich folks." Dukakis made some populist remarks in the final days,which helped him. but it was too late.Bush's campaign manager, Lee Atwater, privately observed that Dukakis had missed the boat by failing, until the end, to develop the class issue and divide the haves and have-nots. 

YOU SAY YOU WANT A REVOLUTION---WELL, YOU KNOW WE ALL WANT TO CHANGE THE WORLD--- Episode 1

       THE RADICALISM OF THE MIDDLE AMERICANS 
                                                1970---2000

    Frustration politics gathered in the United States during the last three decades of the twentieth century, especially during periods of reduced confidence in America's institutions and future in the world economy. For six or seven years ---1972 to 1975 and 1988 to 1992 ----the frustrated politics were heated ; however, they were usually muted. 
    Before the late 1960s, the splinter politics of the United States tended to hark back to the conflicts and issues of the New Deal coalition. One such was how Henry Wallace's 1948 Progressive campaign for the presidency recaptured the leftish naivete of the 1930s. { I just finished a biography of Henry Wallace---- he was a great American.} The more powerful example was the insistence on states' rights and opposition to civil rights that guided South Carolina governor Strom Thurmond and his 1948 Dixiecrat movement and spurred Alabama governor George C. Wallace to run for president in 1964, 1968, and 1972, while in between promoting several Deep South slates of independent presidential electors in 1956 and 1960. 
   Gathering in the late sixties and early seventies, however, three overlapping events --- U.S. embarrassment and defeat in the Vietnam War, the trauma of the Watergate scandal, and the ability of the Organization of Petroleum Exporting Countries (OPEC) to impose a major oil price increase --- combined to stir popular concern about the nation's governmental and global incapacities. In 1974 a worn-out Richard Nixon had concurred with pundit Walter Lippmann's evaluation that his historical role had been "to liquidate, defuse, deflate, the exaggerations of the romantic period of American imperialism and American inflation. Inflation of promises, inflation of hopes, the Great Society, American supremacy --- all that had to be deflated because it was all beyond our power. . . " 
   Politically, however, Nixon shaped a mobilization of Middle American frustration over the events of the sixties. That coalition was renewed and extended between 1978 and 1980 around a kindred trio of issues --- the treaties returning the Panama Canal, the second OPEC oil price hike in 1979, and the Iranian seizure of the U. S. embassy in Tehran. Once again the populace sensed the economic weakening of the American prospect. 
   Still another surge of frustration politics gathered in the late eighties and crested in the early 1990s. Some of its shapers were the 1987 stock market crash, the attention in 1988 and 1989 to books contending that the United States was in a decline like Britain's a century earlier and the growing national fear of Japanese economic rivalry. Others included the 1990 debate over the eighties as a "decade of greed," and the 1991-92 disquiet over high deficits and the economy---1990 had ushered in America's first white-collar recession---and the weak aspects of the Gulf War. These were the failure to dislodge Iraqi leader Saddam Hussein and the U.S. budget difficulties that required Washington to pass the hat for allied financial support of U.S. military operations. 
   Although the discontents of the early seventies, 1978-80, and the early nineties are not usually strung together, it makes sense to do so. They have a continuity. Each yielded an identifiable, though by no means similar, radicalization and frustration affecting a significant portion of the U.S. electorate : the so-called Middle American Radicals (MARs) of the 1970s, the vital working-class increment of the Reagan coalition of 1980, and the worried Perot, Buchanan, and Clinton electorates of 1990-92. More than economics was involved, but each of these periods did overlap one or more recessions. 
   

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES----Episode 6

                                                          SUMMING UP

   Three main arguments have been advanced. First, stretching across and defining most policy debates, there is a gaping divide arising from two fundamentally different ways of explaining behavior and events. That is, beneath the surface of most law-related discussions, there are two conflicting and competing attributional presumptions : dispositionism and situationism. Second, for a variety of reasons that have been mentioned, dispositionism is the default attributional outlook for most Americans, despite the fact that situationism is the more accurate presumption. Finally, the familiar liberal / conservative divide that is so prominent in policy discourse is loosely the same as (and largely explained by) the less familiar situationist / disositionist divide that we have identified. 
   Taken together, these arguments shed new light on concepts and categories that have been largely ignored in the legal-academic research, but that have been extremely important in the real world of policy attitudes and policymaking. Almost every major policy debate today is defined and animated by the great attributional divide. Even a policy concern as broad as poverty --- which, in Katrina's wake, was, at least briefly, placed back at the center of the policymaking map---has long reflected this attributional rivalry.
   On the one hand, there is nothing new about dispositionalizing poverty, although modern commentators often employ similar reasoning. Comedian Bill Cosby, in speech at a 2004 NAACP ceremony, lambasted poor African Americans for not taking responsibility for their lives and for being bad parents. Similarly, journalist Michelle Singletary (2005) solicited comments from the public about the causes of poverty and recorded nearly identical sentiments : 

* "We would live in a much better world if people pulled themselves up by their own bootstraps instead of waiting for a handout. "

* "Bottom line, most people are poor because they choose to be poor. They choose to buy a new car instead of buying a used car and investing the difference. They choose to buy new clothes instead of shopping at thrift stores (as I do) and investing the difference." 

* Many poor, of all colors, are where they are because they are foolish with their money, integrity and philosophy." 

   On the other hand, there is the harder-to-grasp situationist account, which sees poverty more as a cause, than as a symptom, of individual "choice." By stating that poverty is a form of "violence," for example, Gandhi was flipping the attributional default and urging people to look at poverty as a situational cause. That was also President Johnson's (1965) message in his famous "We Shall Overcome Speech" : 

   This great, rich, restless country can offer opportunity and education and hope to all : black and white, North and South, sharecropper and city dweller. These are the enemies : poverty, ignorance, disease. They are our enemies, not our fellow man, not our neighbor. And these enemies too, poverty, disease, and ignorance, we shall overcome.

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES ----Episode 5

ATTRIBUTIONAL TENDENCIES UNDERLYING THE 
LIBERAL--- CONSERVATIVE DUALITY


Using labels : Liberal and Conservative 

   Given the variability of dispositionism and our great reliance on schemas, it is unsurprising that we humans commonly employ labels to categorize relatively dispositionist and relatively situationist individuals, approaches, institutions, movements, and societies. The most significant (and, for many, chronically activated) of those schemas is the liberal / conservative bipolarity, which Americans routinely employ to explain, predict, and understand a range of subjects including our policies, our history, ourselves, and others. This left / right dichotomy has found resonance in almost every cultural context in which it has been introduced. 
    This section argues that a major part of what it means to call a person "liberal"is to designate that individual as relatively sensitive to situation. And, conversely, the label "conservative" is often meant to designate a person as relatively dispositionist. Again, the point is not to suggest that people neatly fit into one of two categories.  The point is that those referred to as liberals tend to be relatively situationist, but are often still rather strong dispositionists. Thus, it is about a spectrum based on recognition of the power of situation, openness to ambiguity, and a host of other factors. Moreover, I should reiterate that being a situationist is only a necessary condition, not a sufficient one, for accurate attributions. Liberals, in as much as they have come closer to meeting that condition and are looking for the hard-to-see and less-affirming role of situation, stand a better chance, other things equal, of more closely approaching the truth in explaining behavior. 
   Although the correspondence between attributional tendencies and these ideological labels is not widely perceived (owing largely to the fact that people generally fail to cognize attributional styles as such), it is nonetheless quite strong. Social psychologists have shown that political world views do correlate with attributional styles. Two of my favorites social psychologists, Gail Zucker and Bernard Weiner, for instance, have found that "[C]onservatives generally rate individualistic (or dispositional) causes as being more important than do liberals who, in turn, rate societal and fatalistic (two types of external situationist) causes as being more important than do conservatives." 
   As Susan Fiske (2004, p. 98) explains, summarizing the relevant literature : 

   Conservatives tend to believe that people are poor because they are lazy, do not improve themselves, cannot manage money, and abuse drugs or alcohol. Less conservative beliefs correlate with situational attributions : perceiving societal causes, feeling pity, and intending to help. In this view, people are poor because of prejudice and discrimination, inadequate education, exploitation by the rich, and low wages. The conservative dispositional attributions imply that poor people have a controllable predisposition to stay poor. 


   Relatedly, conservatives tend to be less sympathetic to and less willing to help individuals harmed by everything from natural disasters to low income, in part because they tend to attribute the suffering to the victims' faulty dispositions. 

    

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES ---Episode 4

Situational Sources of Dispositionalism ( continued ) 

4. Motive for group-affirmation

The strong dispositionism many of us experience also derives from the way we perceive the groups to which we are and are not a part. The simple act of categorizing people into groups minimizes within-group variability and maximizes between-group differences. As soon as a group is created, we begin to lose our ability to perceive variability among members, particularly when they are members of an outgroup. In such circumstances, we may largely forego making individualized attributions and, instead, may rely on ready schemas ---often dispositionalizing stereotypes --- to explain outcomes. This process, in part, reflects a strong motivation to see our ingroups in affirming ways. The process may either be one of selectively privileging ingroup members or de-privileging outgroup members through our attributions. When we are considering positive results for an ingroup member, for example, we will tend to be strongly dispositionist (that is, we will explain his or her success as resulting from the good disposition common to members of the ingroup), just as we will tend to be in explaining negative results for an outgroup member (in other words, we will explain his or her failure as resulting from the bad traits common to members of the outgroup). This "ultimate attribution error," as it is sometimes called, is influential in the maintenance of stereotypes. When, other things being equal, a woman wins the office NCAA Tournament pool, for example, men will be more likely to write off her success as"lucky," whereas a man's success is more likely to evince his sports acumen. Although it is the same action and the same result, we perceive it in very different ways depending on our group associations for the actor. Subconsciously, we pick and choose our attributional styles. This selective dispositionism and selective situationism turns out to be strongly affirming. 

5. Motive for system-affirmation 
   Just as we are motivated to see our ingroups and ourselves in positive ways --- and in ways that allow us to feel in control --- we are also inclined to believe that the systems of which we are a part are just and legitimate.We maintain that illusion by attributing bad outcomes to bad people not to a bad world. And we tend to see evidence of apparent unfairness or inequality as the result of disposition or merit. A good summary is this :

   American legitimating myths justify these differences {in economic or social status across social groups } through reference to stereotypes about the characteristics of the members of groups. For example, minority group members are argued to deserve subordinate economic status because they are "lax" or "not intelligent," and holding higher status is associated with possessing more favorable traits, such as competence.

   People are particularly eager to defend their systems when they perceive the legitimacy or stability of such systems as threatened. In those circumstances, people will internalize favorable and unfavorable stereotypes to rationalize the relative positions of advantaged and disadvantaged groups, respectively. Indeed, we often maintain complementary stereotypes that make sense of anticipated social and political outcomes : for example, "poor but honest" and "rich but miserable (or dishonest)."People will also oppose extensions of equality (disrupting the established order), when it comes at the expense of themselves or their own ingroups. 

           EXTERIOR SOURCES OF DISPOSITIONISM 

   The interior sources of dispositionism are often powerfully linked to exterior sources, cues, and frames. As noted earlier, the strength of our dispositionism changes based on whether we are making a causal attribution for our own behavior or for others' behavior and based on whether the outcome is god or bad. We may also make different attributions based on whether we are caught in the moment or trying to make sense of a past event. Moreover, in some cases, elements in our environment that appear quite separate from the attribution at hand may influence the extent of our dispositionism. For example, since the strength of our dispositionism seems to depend significantly on whether we are facing an outside threat, a series of terrorist attacks may make us more likely to explain a homeless person's condition as the result of a poor disposition rather than a result of systemic problems. 

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES --- Episode 3

A. Interior sources of Dispositionalism ---continued

2. Motives for reasons, closure, and simplicity

   People like their world to make sense. All of us have a strong desire to understand how and why things happen -- call us "curious." And it is not just that we desire reasons ; it is that we seek particular kinds of reasons --- ones that bring closure and minimize any threat to ourselves, our groups, and our systems. 
   Those motivations are so strong that we are often willing to make rather surprising concessions to reach a definitive answer or conclusion. Indeed, social psychologists have demonstrated that, in many circumstances, the urge to reach a solution and to resolve uncertainty results in individuals avoiding, misconstruing, or discrediting information that would undermine their initial hypothesis. Simple explanations prove to be most appealing, and we are motivated to defend straightforward theories against more complex ones. Dispositionism, by offering simple and automatic answers to complex problems, often satisfies our urge for expedient resolution. 

3. Motive for self-affirmation
   Another reason that we are inclined toward dispositionist attributions lies in our desire to see ourselves in self-affirming ways.  We like to believe that we are independent, intelligent consumers of life's many options --- the attitude-driven, reasoning choice makers of commercials and Westerns. Rather than victims of situation, we see ourselves as in control of our destinies --- "Marlboro Men" and "Virginia Slims." 
   Our desire to maintain that satisfying conception causes us to react strongly whenever we sense that our freedom is being unfairly limited. Indeed, we often react to perceived constraints on our choices (DO NOT READ THE REST OF THIS SENTENCE !) by taking (or suddenly wanting to take) the prohibited option. Psychologists call this desire to maintain (the perception of) control REACTANCE --- a tendency that marketers have been exploiting for as long as there have been marketers. Attempts to restrict an individual's emotions, attitudes, or behavior often produce a similar "boomerang effect" --- that is, an increase in the restricted feelings or behavior . Although we often enjoy no more than an illusion of control over our situations, we are strongly motivated to see ourselves in the driver's seat. Dispositionism, WITH ITS FOCUS ON INDIVIDUAL CHOICE, puts the wheel in our hand and the brake and accelerator beneath our feet.  
   Our craving for control is evident not only in our response to apparent restraints but also with respect to how we deal with the news of negative outcomes. When something bad happens, we want someone to blame ; when something really bad happens we really want someone to blame. The worse the outcome, the greater is our desire to find an evildoer behind the act --- particularly,an evildoer who does not implicate us. Again, the motive is generated by our need to feel safe and in control. When it is situation and not disposition that caused a problem, all of us who share that situation feel threatened. We defensively seek protection through our attributions. If, for instance, we can find a way to blame the victim f a bad event, by focusing on his or her bad disposition or flawed choice, we can assure ourselves that the world is just and maintain our firm grip on the reins of destiny. We can continue to be the strong individualists who, unfazed by the winds of situation, avoid negative results by making good choices and relying on our stalwart dispositions. We can blaze our own trails, march to our own drummers, pull our own strings, create our own luck, and, in the autumn of our lives, look back without regrets knowing we did it "our way." 

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES ---Episode 2

      SITUATIONAL SOURCES OF DISPOSITIONISM

    While our dispositionism is the result of many largely complementary influences, this missive addresses several of the most central interior proclivities. For the sake of time and space, the missive will merely sketch those that have been detailed elsewhere and will detail only those that are the newest to legal and political scholarship. 

                       Interior Sources of Dispositionism

1. Perceptual limitations 

   Individuals realize that situational factors play a significant role in shaping behavior when, and to the extent that, the situational factors are cognitively striking. With our limited cognitive capacities, we humans can attend to only a few elements of any drama and notice the situation only when it somehow stands out. Often we concentrate only on the "lead actors" and miss the "extras," the lighting, the scenery, the script, and the director sitting in the front row. In our eyes, the welfare recipient buying a wide-screen Magnavox at inflated prices on a rent-to-own credit plan is a foolish consumer making another bad decision --- a wasteful extravagance for someone struggling to pay the light bill and save for retirement. All of the situational elements that moved her toward renting the TV --- the promise from her kids that they will spend more time at home, the deceptive wording of the credit plan, the clever sales technique of the retailer, the fact that a neighbor has one and "loves" it, the absence of other retailers willing to sell  in the inner city, and the optimism that a raise will come through at the end of the year --- are not particularly noticeable as we watch her sign on the dotted line. Were we the ones making the purchase, those and other situational elements might seem very relevant (and, indeed, hard to miss), but as mere observers, we find it difficult to see anything but a spendthrift exercising her free choice and a retailer responding to the customer's demands. Without some overt, coercive element to draw our attention ---say, a gun to the woman's head---disposition comes to the fore and situational influence fades into the background. 
   Relatedly, our minds seem to have little space for any notion of partial or incomplete autonomy (though it need not be that way). When we see the welfare mother exiting the rent-to-own appliance store, our attributional options are limited to "choice" or "coercion" with no place in between for imperfect agency. Such is the bipolarity of our categories and schemas --- a manifestation of our mind's desire to avoid the cognitively costly task of distinguishing among the grays. 

OUR DISPOSITION + THE SITUATION USUALLY INFLUENCE OUR CHOICES ---Episode 1

                       DISPOSITIONISTS AND SITUATIONISTS
                { Their Influence on Public Policy and Law }
    
    There is a real, meaningful divide in America --- a great rift that extends across debates. As we are about to explore, the divide is based on two attributional approaches : the dispositionist approach , which explains outcomes and behavior with reference to people's dispositions {that is, personalities, preferences, and the like} and situationist approach, which bases attributions of causation and responsibility on unseen (though often visible) influences within us and around us. Those different methods of constructing causal stories and assigning fault not only color individual issues from gay marriage to welfare and from abortion to social security reform, but also help define the walls of the broader liberal--conservative crevasse. 
   Marking out the contours of the crevasse is especially important because law is centrally concerned with making attributions.  At its foundation, most law seeks to answer three central questions : (1) What caused an outcome ?; (2) Who or what was responsible ? ; and (3) Is anyone to blame ? A legal education trains students in the categories and distinctions of law that help sort out what counts as a harm and what fines, punishments, rewards, and compensations people should receive based on those attributions in different settings.  Moreover, attributions matter to legal scholars and lawmakers because if legal policy prescriptions are based on the wrong attributions, they are unlikely to solve the problems that they are designed to address, and, indeed, may make matters worse. Thus, lawmakers and legal theorists should be, and often are, very concerned with determining if certain attributions are more likely to be correct, and, if so, which attributions those are. 
   As it happens, social scientists have been working hard on those very questions for many decades and have come to some surprising conclusions. Nonetheless, their research has yet to be thoroughly taken up by legal academics. 
   What social scientists have discovered is that, far from being neutral processors of information, we humans are subject to significant attributional biases. We tend to rely heavily on familiar stories of thinking, preferring, willing, and choosing to explain human actions. Do you want to know what made America great ? Easy : people with the most American of character traits, rugged individualism and self-reliance. Do you want to know what is "poisoning" America ? Again, easy : not "impersonal forces beyond anyone's control" but "specific individuals" with bad dispositions. In spite of the prevalence and strong appeal of those notions, however, we are actually moved significantly more by our situations ---unseen or under-appreciated elements in our environment and within our interiors --- than we are by disposition-based choice. 
   That dispositionalism is a significantly more inaccurate attributional approach than situationalism may seem to be a controversial claim. However, were social science our guide, it would not be. Just one feature of the tendency we are focusing on is so fundamental to our attributional proclivities that it has actually been dubbed the "fundamental attribution error" by social psychologists. That error --- the tendency to attribute to the person what is often the consequence of the person's exterior situation --- has been fully researched, tested, and documented, and (although there are well-documented exceptions to it) it remains the most settled of psychological insights. 
   Thus, situationist accounts ---- those that, for instance, suggest that people tend to file for bankruptcy because of lost jobs, divorce, or unforeseen medical costs---tend to hold more promise for being correct than dispositionist accounts --- those that, for example, assert that bankruptcies are the result of character flaws. Unfortunately, just like everything else, our attributional tendencies are situationally-dependent, and for most of us (some of us more than others), our situations lead us toward dispositionism. 
   An apt metaphor for this tendency can be found in the old joke about the drunk who loses his keys in a distant field but searches under a lamppost because the light is better. Social scientists have shown that we humans tend to make our behavioral attributions under the lamppost of dispositionism when the key to our behavior is to be found in the dark field of situation. 
   I want to consider the familiar liberal/conservative divide that is  explicit in most of our policy debates and suggest that, in significant part, it reflects the less familiar situationist/dispositionist rift. That analysis leads to the conclusion that we ought to encourage policymakers to rely more heavily on situationist advisers and adopt additional measures to strengthen situationism in broader society. 

     Arguments NOT Being Made and NOT Being Endorsed 

(1) I'm not claiming that situationism leads directly to the truth and dispositionism directly away from it. Clearly, if a situationist approach were to focus on the wrong situational factors or to give too great or too little weight to the correct situational factors, such a model would be inaccurate. The point is that dispositionism, by itself, is almost certainly going to lead us astray. Any hope of making accurate causal attributions lies in taking situation seriously. Situationism is a necessary, though not sufficient, condition for making accurate causal attributions. 

(2) The claim about the inaccuracy of dispositionism is about the correctness of attributions ( "People are poor because they are lazy") not about the correctness of their beliefs ("I don't believe the government should help poor people"). The implication of this missive is that beliefs based on incorrect attributions ought to be reconsidered, but I'm not taking a position on whether it is "right" or "wrong" to, for example, believe that each person should take care of himself and not be forced to assist others. 

(3) I am not asserting that dispositionism is without value or influence. Dispositionism, even if inaccurate, can be a simple, time-saving, affirming, psychic-cost-minimizing approach. It can be useful as a means of predicting and influencing those with whom we interact. And it may be quite valuable as a means of 
encouraging individuals to make the most of their situations. A strong belief in the power of individuals to succeed through good choices, hard work, and personal responsibility has undoubtedly helped many individuals born into impoverished environments to achieve wealth and power, from Oprah Winfrey to former Attorney General Alberto Gonzales. In addition, dispositionist attributions, self-concepts, and narratives can themselves have a powerful, often self-fulfilling, impact on people's behavior even if the perceived disposition is just imagined. 

(4) I am not suggesting that there are just two kinds of people in the world ---situationists and dispositionists--- and that situationists are smart and "get it" and that dispositionists are stupid and "miss it."  We are all basically dispositionists, and we all sometimes make situationist attributions. The important question to be examined concerns the extent of our dispositionism : how low or high is our threshold to situationism and how much of the situation do we see ? Where we fit along the attributional spectrum is itself situational and, thus, generally beyond our conscious awareness and control. 

(5) The argument ultimately turns on the reasons that we make particular types of attributions as much or more than it does on the types of attributions we make. As we'll see, there are many factrs that contribute to the ubiquity of dispositionism --- including numerous subconscious motivations --- and it is those factors that are the real source of inaccuracy. In certain circumstances, those factors can actually encourage situationist attributions, and in such cases, the attributions are no more reliable or accurate than dispositionist attributions. 

(6) Finally, I'm not claiming that the human animal is without agency --- the ability to influence his or her own behavior toward some ends. Rather, my claim is that situational forces around us and in us are far more influential than we generally recognize and that human agency is different in kind and in significance from what is generally presumed. 

   

MARKET REASONING RENDERS MORAL CONSIDERATIONS IRRELEVANT --- Episode 13

                 CONTINUING ON WITH A DISCUSSION 
                 OF THINGS THAT MONEY SHOULDN'T
                 BE ABLE TO BUY 


                                     WEDDING TOASTS 

      Consider another social practice closely connected to friendship -----a wedding toast to the bride and groom. Traditionally, such toasts are warm, funny, heartfelt expressions of good wishes delivered by the best man, usually the groom's closest friend. But it's not easy to compose an elegant wedding speech, and many best men don't feel up to the task. So some have resorted to buying wedding toasts online. 
   ThePerfectToast.com is one of the leading websites offering ghostwritten wedding speeches. It's been in business since 1997. You answer a questionnaire online --- about how the bride and groom met, how you would describe them, whether you want a humorous speech or a sentimental one --- and within three business days you receive a professionally written custom toast of three to five minutes. The price is $149, payable by credit card. For those who can't afford a bespoke wedding toast, other websites, such as InstantWeddingToasts.com sell standard prewritten wedding speeches for $19.95, including a money-back guarantee.
   Suppose on your wedding day, your best man delivers a heartwarming toast, a speech so moving it brings tears to your eyes. You later learn that he didn't write it himself but bought it online. Would you care ? Would the toast mean less than it did at first, before you knew it was written by a paid professional ? Most of us would probably say yes, the bought wedding toast has less value than an authentic one. 
   It might be argued that presidents and prime ministers routinely employ speechwriters, and no one faults them for it. But a wedding toast is not a State of the Union address. It is an expression of friendship. Although a bought toast might "work" in the sense of achieving its desired effect, that effect might depend on an element of deception. Here's a test : If, seized with anxiety at the prospect of giving a speech at your best friend's wedding, you purchased a moving, sentimental masterpiece online, would you reveal this fact, or try to cover it up ? If a bought toast depends for its effect on concealing its origin, thats a reason to suspect it's a corrupt version of the real thing. 
   Apologies and wedding toasts are goods that can, in a sense, be bought. Buy buying and selling them changes their character and diminishes their value. 

                             THE CASE AGAINST GIFTS 


   Consider now another expression of friendship --- gift giving. Unlike wedding speeches, gifts have an unavoidably material aspect. But with some gifts, the monetary aspect is relatively obscure ; with others, it is explicit. Recent decades have brought a trend toward the monetization of gifts, yet another example of the increasing commodification of social life. 
   Economists don't like gifts. Or to be more precise, they have a hard time making sense of gift giving as a rational social practice.  From the standpoint of market reasoning, it is almost always better to give cash than a gift. If you assume that people generally know their own preferences best, and that the point of giving a gift is to make your friend or loved one happy, then it's hard to beat a monetary payment. Even if you have exquisite taste, your friend may not like the tie or necklace you pick out. So if you really want to maximize the welfare your gift provides, don't buy a present ; simply give the money you would have spent. Your friend or lover can either spend the cash on the item you would have bought, or (more likely) on something that brings even greater pleasure. 
   This is the logic of the economic case against gift giving. It is subject to a few qualifications. If you come across an item that your friend would like but is unfamiliar with --- the latest high-tech gadget, for example --- it's possible this gift would give your ill-informed friend more pleasure than something he or she would have bought with the cash equivalent. But this is a special case that is consistent with the economist's basic assumption that the purpose of gift giving is to maximize the welfare, or utility, of the recipient. 
   Joel Waldfogel,an economist at the University of Pennsylvania, has taken up the economic inefficiency of gift giving as a personal cause. By "inefficiency," he means the gap between the value to you (maybe very little) of the $120 argyle sweater your aunt gave you for your birthday, and the value of what you would have bought (an iPod, say) had she given you the cash. In 1993, Waldfogel drew attention to the epidemic of squandered utility associated with holiday gift giving in an article called "The Deadweight Loss of Christmas." He updated and elaborated the the theme in a later book, Scroogenomics : Why You Shouldn't Buy Presents for the Holidays : "The bottom line is that when other people do our shopping, for clothes or music or whatever, it's pretty unlikely that they'll choose as well as we would have chosen for ourselves. We can expect their choices, no matter how well intentioned, to miss the mark. Relative to how much satisfaction their expenditures could have given us, their choices destroy value." 
   Applying standard market reasoning, Waldfogel concludes that it would be better, in most cases, to give cash: "Economic theory --- and common sense --- lead us to believe that buying stuff for ourselves will create more satisfaction, per euro, dollar, or shekel spent, than does buying stuff for others. . .Buying gifts typically destroys value and can only, in the unlikely best case, be as god as giving cash. 
   Beyond playing out the economic logic against gift giving, Waldfogel has conducted surveys to measure how much value this inefficient practice destroys. He asks gift recipients to estimate the monetary value of the gifts they've received, and the amount they would have been willing to pay for them. His conclusion: "We value items we receive as gifts 20 percent less, per dollar spent, than items we buy for ourselves." This 20 percent figure enables Waldfogel to estimate the total "value destruction" brought about, nationwide, by holiday gift giving :"Given the $65 billion in U.S. holiday spending per year, that means we get $13 billion less in satisfaction than we would receive if we spent that money the usual way---carefully, on ourselves. Americans celebrate the holidays with an orgy of value destruction."
   If gift giving is a massively wasteful and inefficient activity, why do we persist in it ? It isn't easy to answer this question within standard economic assumptions. In his economics textbook, Gregory Mankiw tries gamely to do so. He begins by observing that "gift giving is a strange custom" but concedes that it's generally a bad idea to give your boyfriend or girlfriend cash instead of a birthday present. But why ?
   Mankiw's explanation is that gift giving is a mode of "signaling," an economist's term for using markets to overcome "information asymmetries." So, for example, a firm with a good product buys expensive advertising, not only to persuade customers directly but also to "signal" to them that it is confident enough in the quality of its product to undertake a costly advertising campaign. In a similar way, Mankiw suggests, gift giving serves a signaling function. A man contemplating a gift for his girlfriend "has private information that the girlfriend would like to know : Does he really love her ? Choosing a good gift for her is a signal of his love." Since it takes time and effort to look for a gift, choosing an apt one i a way fr him "to convey the private information of his love for her." 
   This is a strangely wooden way to think about lovers and gifts. "Signaling" love is not the same as expressing it. To speak of signaling wrongly assumes that love is a piece of private information that one party reports to the other. If this were the case, then cash would work as well---the higher the payment, the stronger the signal, and the greater (presumably) the love.  But love is not only, or mainly, a matter of private information. It is a way of being with and responding to another person. Giving, especially attentive giving, can be an expression of it. On the expressive account, a good gift not only aims to please, in the sense of satisfying the consumer preferences of the recipient. It also engages and connects with the recipient, in a way that reflects a certain intimacy. This is why thoughtfulness matters.
   Not all gifts, of course, can be expressive in this way. If you are attending the wedding of a distant cousin, or the bar mitzvah of a business associate's child, it is probably better to buy something from the wedding registry or give cash. But to give money rather than a well-chosen gift to a friend, lover, or spouse is to convey a certain thoughtless indifference. It's like buying your way out of attentiveness. 
   Economists know that gifts have an expressive dimension, even if the tenets of their discipline can't account for it. "The economist in me says the best gift is cash," writes Alex Tabarrok, an economist and blogger. "The rest of me rebels," He offers a good counterexample to the utilitarian notion that the ideal gift is an item we would have bought for ourselves : Suppose someone gives you $400, and you buy a set of tires for your car. This is what maximizes your utility. Still, you might not be terribly happy if your lover gave you car tires for your birthday. In most cases, Tabarrok points out, we'd rather the gift giver buy us something less mundane, something we wouldn't buy for ourselves. From our intimates at least, we'd rather receive a gift that speaks to "the wild self, the passionate self, the romantic self."
   Tabarrok is probably on to something. The reason gift giving is not always an irrational departure from efficient utility maximizing is that gifts aren't only about utility. Some gifts are expressive of relationships that engage, challenge, and reinterpret our identities. This is because friendship is about more than being useful to one another. It is also about growing in character and self-knowledge in the company of others. As Aristotole taught, friendship at its best has a formative, educative purpose. To monetize all forms of giving among friends can corrupt friendship by suffusing it with utilitrian norms. 
   Even economists who view gift giving in utilitarian terms can't help noticing that cash gifts are the exception, not the rule, especially among peers, spouses, and significant others. For Waldfogel, this is a source of the inefficiency he decries. So what, in his view, motivates people to persist in a habit that produces a massive destruction of value ? It's simply the fact that cash is considered a "tacky gift" that carries a stigma. He does not ask whether people are right or wrong to regard cash gifts as tacky. Instead, he treats the stigma as a brute sociological fact of no normative significance apart from its unfortunate tendency to reduce utility. 
                               

MARKET REASONING RENDERS MORAL CONSIDERATIONS IRRELEVANT----Episode 12

                         HOW MARKETS CROWD OUT MORALS

     Are there some things that money should not be able to buy? If so, how can we decide which goods and activities are properly bought and sold, and which are not ? The better way to approach these questions is by asking a different one : Are there some things that money cannot buy ?

                   WHAT MONEY CAN AND CANNOT BUY

   Most people would say that there are some things that money should not be able to buy. Consider friendship. Suppose you want more friends than what you have. Would you try to buy some ? Not likely. A moment's reflection would lead you to realize that it wouldn't work. A hired friend is not the same as a real one. You could hire people to do some of the things that friends typically do ---picking up your mail when you're out of town, looking after your children in a pinch, or, in the case of a therapist, listening to your woes and offering sympathetic advice. Until recently, you could even bolster your online popularity by hiring some good-looking "friends"for your FaceBook page ---for 99 cents per friend per month. ( The phony-friend website was shut down when it emerged that the photos being used, mostly of models, were unauthorized.) Although all of these services can be bought, you can't actually buy a friend. Somehow, the money that buys the friendship dissolves it, or turns it into something else.
   Or consider the Nobel Prize. Suppose you desperately want a Nobel Prize but fail to get one in the usual way. It might occur to you to buy one. But you would quickly realize that it wouldn't work. The Nobel Prize is not the kind of thing that money can buy. Nor is the Most Valuable Player award of the American league. You could buy the trophy if some previous winner is willing to sell it, and you could display it in your living room. But you could not buy the award itself.
   This is not only because the Nobel committee and the American League don't offer these awards for sale. Even if they auctioned off, say, one Nobel Prize each year, the bought award would not be the same thing. The market exchange would dissolve the good that gives the prize its value. This is because the Nobel Prize is an honorific good. To buy it is to undermine the good you are seeking. Once word got out that the prize had been bought, the award would no longer convey or express the honor and recognition that people receive when they are awarded a Nobel Prize.
   The same is true of baseball's MVP awards. They too are honorific goods, whose value would be dissolved if bought rather than earned by a season of game-winning home runs or other heroics. There's a difference, of course, between a trophy which symbolizes an award, and the award itself. It turns out that some winners of Hollywood's Academy Awards have sold their Oscar statuettes, or left them to heirs who have done so. Some of these Oscars have been auctioned off by Sotheby's and other auction houses.  In 1999, Michael Jackson paid $1.54 million for the best-picture Oscar for Gone With the Wind. The academy that awards the Oscars opposes such sales and now requires recipients to sign an agreement promising not to sell them. It wants to avoid turning the iconic statuettes into commercial collectibles. Whether or not collectors are able to buy the trophies, it is obvious that buying the Academy Award for best actress is not the same as winning it. 
   These fairly obvious examples offer a clue to the more challenging question that concerns us : Are there some things that money can buy but shouldn't ? Consider a good that can be bought but whose buying and selling is morally controversial --- a human kidney, for example. Some people defend markets in organs for transplantation ; others find such markets morally objectionable. If it's wrong to buy a kidney, the problem is not, as with the Nobel Prize, that the money dissolves the good. The kidney will work (assuming a good match) regardless of the monetary payment. So to determine whether kidneys should or shouldn't be up for sale, we have to engage in a moral inquiry. We have to examine the arguments for and against organ sales and determine which are more persuasive. 
   Or consider baby selling. Some years ago, Judge Richard Posner, a leading figure in the "law and economics" movement, proposed the use of markets to allocate babies put up for adoption. He acknowledged that more desirable babies would command higher prices than less desirable ones. But he argued that the free market would do a better job of allocating babies than the current system of adoption, which allows adoption agencies to charge certain fees but not to auction babies or charge a market price. 
   Many people disagree with Posner's proposal and maintain that children should not be bought and sold, no matter how efficient the market. In thinking through this controversy, it's worth noticing a distinctive feature of it : like a market in kidneys, a market in babies would not dissolve the good the buyers seek to acquire. A bought baby differs, in this respect, from a bought friend or Nobel Prize. If there were a market in babies for adoption, people who paid the going price would acquire what they wanted --- a child. Whether such a market is morally is a further question. 
   So it seems at first glance, that there is a sharp distinction between two kinds of goods : the things (like friends and Nobel Prizes) that money can't buy, and the things (like kidneys and children) that money can buy but arguably shouldn't. But it is suggested that this distinction is less clear than it first appears. If we look more closely, we can glimpse a connection between the obvious cases, in which the monetary exchange spoils the good being bought, and the controversial cases, in which the good survives the selling but is arguable degraded, or corrupted, or diminished as a result. 

          BOUGHT APOLOGIES AND WEDDING TOASTS

   We can explore this connection by considering some cases intermediate between friendship and kidneys. If you can't buy friendship, what about tokens of friendship, or expressions of intimacy, affection, or contrition ?
   In 2001, The New York Times published a story about a company in China that offers an unusual service : if you need to apologize to someone---an estranged lover or business partner with whom you've had a falling out --- and you can't quite bring yourself to do so in person, you can hire the Tianjin Apology company to apologize on your behalf. The motto of the company is, "We say sorry for you." According to the article, the professional apologizers are "middle-aged men and women with college degrees who dress in somber suits. They are lawyers, social workers and teachers with 'excellent verbal ability' and significant life experience, who are given additional training in counseling."
   I don't know whether the company is successful, or even whether it still exists. But reading about it made me wonder : Does a bought apology work ? If someone wronged or offended you, and then sent you a hired apologizer to make amends, would you be satisfied ? It might depend on the circumstances, or perhaps even the cost. Would you consider an expensive apology more meaningful than a cheap one ? Or is the enactment of the apology by the person who owes it constitutive of contrition, such that it can't be outsourced ? In no bought apology, however extravagant, could do the work of a personal one, then apologies, like friends, are the kind of thing that money cannot buy. 


   

MARKET REASONING RENDERS MORAL CONSIDERATIONS IRRELEVANT ---Episode 11

 
                            THE MORAL LIMITS OF MARKETS


      INCENTIVES AND MORAL ENTANGLEMENTS 


   During the second half of the twentieth century, Paul Samuelson's Economics was the leading economics textbook in this country. Samuelson identified economics with its traditional subject matter : "the world of prices, wages, interest rates, stocks and bonds, banks and credits, taxes, and expenditure." The task of economics was concrete and circumscribed : to explain how depressions, unemployment, and inflation can be avoided, to study the principles "that tell us how productivity can be kept high" and "how people's standards of living can be improved." 
   Today, economics has wandered quite a distance from its traditional subject matter. Consider this definition of an economy offered by Greg Mankiw in a recent edition of his own influential economics textbook : There is no mystery to what an 'economy' is. An economy is just a group of people interacting with one another as they go about their lives." 
   In this account, economics is about not only the production, distribution, and consumption of material goods but also about human interaction in general and the principles by which individuals make decisions. One of the most important of those principles, Mankiw observes, is that "people respond to incentives."
   Talk of incentives has become so pervasive in contemporary economics that it has come to define the discipline. In the oening pages of Freakonimics ( surely all of you have read this ), Steven D. Levitt, an economist at the University of Chicago, and Stephen J. Dubner declare that "incentives re the cornerstone of modern life" and that "economics is, at root, the study of incentives." 
   
   It is easy to miss the novelty of this definition. The language of incentives is a recent development in economic thought. The word "incentive" does not appear in the writings of Adam Smith or other classical economists. In fact, it didn't enter economic discourse until the twentieth century and didn't become prominent until the 1980s and 1990s.  The Oxford English Dictionary finds its first use in the context of economics in 1943, in Reader's Digest : "Mr. Charles E. Wilson . . . is urging war industries to adopt 'incentive pay'----that is, to pay workers more if they produce more." The use of the word "incentives" rose sharply in the second half of the twentieth century, as markets and market thinking deepened their hold. According to a google book search, the incidence of the term increased by over 400% from the 1940s to the 1990s. 
   Conceiving economics as the study of incentives does more than extend the reach of markets into everyday life. It also casts the economist in an activist role. The "shadow" prices that Gary Becker invoked in the 1970s to explain human behavior were implicit, not actual. They were metaphorical prices that the economist imagines, posits, or infers. Incentives, by contrast, are interventions that the economist (or policy maker) designs, engineers, and imposes on the world.  They are ways of getting people to lose weight, or work harder, or pollute less. "Economists love incentives," write Levitt and Dubner. "They love to dream them up and enact them, and tinker with them. The typical economist believes the world has not yet invented a problem that he cannot fix if given a free hand to design the proper incentive scheme. His solution may not always be pretty --- it may involve coercion or exorbitant penalties or the violation of civil liberties --- but the original problem, rest assured, will be fixed. An incentive is a bullet, a lever, a key : an often tiny object with astonishing power to change a situation. 
   This is a far cry from Adam Smith's image of the market as an invisible hand. Once incentives become "the cornerstone of modern life," the market appears as a heavy hand, and a manipulative one. (Recall the cash incentives for sterilization and good grades.) "Most incentives don't come about organically," Levitt and Dubner observe. "Someone --- an economist or a politician or a parent --- has to invent them."
   The growing use of incentives in contemporary life, and the need for someone deliberately to invent them, is reflected in an ungainly new verb that has gained currency of late"incententivize." According to the OED, to incentivize is "to motivate or encourage (a person, esp. an employee or customer) by providing a (usually financial) incentive." The word dates to 1968 but has become popular in the last decade, especially among economists, corporate executives, bureaucrats, policy analysts, politicians, and editorial writers. In books, the word scarcely appeared until around 1990. Since then,its use has soared by more than 1,400 percent. A LexisNexis search of major newspapers reveals a similar trend : 

   Appearance of "Incentivize" or "Incentivise" in Major Newspapers


   1980s-----------------------------------------------------------48

   1990s-----------------------------------------------------------449

   2000s-----------------------------------------------------------6159

   2010-11--------------------------------------------------------5885


Recently,"incentivize" has entered the parlance of presidents.George Herbert Walker Bush, of the Kennebunkport Bushes, the first U.S president to use the term in public remarks, used it twice. Bill Clinton used it only once in eight years, as did the younger Bush. In his first three years in office, Barack Obama used "incentivize" twenty-nine times. He hopes to incentivize doctors, hospitals, and health-care providers to give more attention to preventive care and wants "to poke, prod, {and} incentivize banks" to provide loans to responsible homeowners and small businesses. 

Britain's prime minister, David Cameron, is also fond of the word. Speaking to bankers and business leaders, he called for doing more to "incentivize" a "risk-taking investment culture." Speaking to the British people after the London rits in 2011, he complained that "some of the worst aspects of human nature" had been "tolerated, indulged, even incentivized,"by the state and its agencies. 

Despite their new incentivizing bent, most economists continue to insist on the distinction between economics and ethics, between market reasoning and moral reasoning. Economics "simply doesn't traffic in morality," Levitt and Dubner explain. "Morality represents the way we would like the world to work, and economics represents the way it actually does work." 
  

        

MARKET REASONING RENDERS MORAL CONSIDERATIONS IRRELEVANT---Episode 10

                SUBWAY CHEATS AND VIDEO RENTALS

   In practice, the distinction between a fine and a fee can be unstable,even contestable. If you ride the Paris Metro without paying the $2 fare, you can be fined up to $60. The fine is a penalty for cheating the system by evading the fare. Recently, however, a group of habitual dodgers came up with a clever way of converting the fine into a fee, and a modest one at that. They formed an insurance fund that will pay their fine if they get caught. Each member pays in about $8.50 a month to the fund (called a mutuelle des fraudeurs), far less than it costs to buy a legitimate monthly pass. 
   The members of the mutuelle movement say they are motivated not by the money but by an ideological commitment to free public transportation. "It's a way to resist together,"a leader of the group told the Los Angeles Times. "There are things in France which are supposed to be free --- schools, health. So why not transportation ?" Although the fraudeurs are unlikely to prevail, their novel scheme converts a penalty for cheating into a monthly insurance premium, a price they are willing to pay to resist the system. 
   To decide whether a fine or a fee is appropriate, we have to figure out the purpose of the social institution in question and the norms that should govern it. The answer will vary depending on whether we're talking about showing up late at the day-care center, jumping the turnstile in the Paris subway, or ... returning an overdue DVD to the local video store. 
  In the early days of video stores, they treated late fees as fines. If I returned a video late, the person behind the counter had a certain attitude. I was as if I had done something morally wrong, keeping the movie an extra three days.I thought this attitude was misplaced. A commercial video store is not a public library, after ll. Libraries impose fines for overdue books, not fees. That's because their purpose is to organize the free sharing of books within a community. So it's right that I feel guilty when I slink back with an overdue library book. 
   But a video store is a business. Its purpose is to make money by renting videos. So if I keep the movie longer and pay for the extra days, I should be regarded as a better customer, not a worse one. Or so I thought. Gradually, this norm has shifted. As a result of getting sued in a class action lawsuit, video stores now treat overdue charges as fees rather than fines. 

                    TRADABLE POLLUTION PERMITS 

    The distinction between a fine and a fee is also relevant to the debate over how to reduce greenhouse gases and carbon emissions. Should government set limits on emissions and fine companies that exceed them ? Or should government create tradable pollution permits ? The second approach says in effect that emitting pollution is not like littering but simply a cost of doing business. But is that right ? Or should some moral stigma attach to companies that spew excessive pollution into the air ? To decide this question, we need not only to calculate costs and benefits ; we have to decide what attitudes toward the environment we want to promote.
   At the Kyoto conference on global warming (1997), the United States insisted that any mandatory worldwide emissions standards would have to include a trading scheme, allowing countries to buy and sell the right to pollute. So, for example, the United States could fulfill its obligations under the Kyoto Protocol by either reducing its own greenhouse emissions or paying to reduce emissions somewhere else. Rather than tax gas-guzzling Hummers at home, it could pay to restore an Amazonian rain forest or modernize an old coal-burning factory in a developing country.
   I think valid arguments can be made against the trading scheme. I worry that letting countries buy the right to pollute would be like letting people pay to litter. We should try to strengthen, not weaken, the moral stigma attached to despoiling the environment. I also worry that, if rich countries can buy their way out of the duty to reduce their own emissions, we may undermine the sense of shared sacrifice necessary to future global cooperation on the environment. 
   But, those who disagree with my position on paying to pollute suggest that I fail to understand the virtue of markets, that I don't understand the efficiencies of trade, or the elementary principles of economic rationality. Some are nice enough to say they understand that I'm concerned about the welfare of the environment but I need to study more about economics. 
   There is a more moderate viewpoint I could adopt. Unlike tossing litter out of the car window onto the highway, emitting carbon dioxide is not in itself objectionable. We all do it every time we exhale. There's nothing intrinsically wrong with putting carbon dioxide into the air. What is objectionable is doing so in excess, as part of an energy-profligate way of life. That way of life, and the attitudes that support it, are what we should discourage, even stigmatize.
   One way of reducing pollution is by government regulation : require automakers to meet higher emissions standards ; ban chemical companies and paper mills from dumping toxic waste into waterways ; require factories to install scrubbers on their smokestacks. And if companies fail to abide by the standards, fine them. That's what the United States did during the first generation of environmental laws, in the early 1970s. { None other than Richard M. Nixon was POTUS.} The regulations, backed by fines, were a way of making companies pay for their pollution. They also carried a moral message : "Shame on us for spewing mercury and asbestos into lakes and streams, and for befouling the air with choking smog. It's not only hazardous to our health ; it's no way to treat the earth."
   Some people opposed these regulations because they dislike anything that imposes higher costs on industry. But others, sympathetic to environmental protection, sought more efficient ways of achieving it. As the prestige of markets grew in the Reagan years, and as economic ways of thinking deepened their hold, some environmental advocates began to favor market-based approaches to saving the planet. Don't impose emission standards on every factory, they reasoned ; instead, put a price on pollution and let the market do the rest. 
   The simplest way of putting a price on pollution is to tax it. A tax on emissions can be seen as a fee rather than a fine ; but if it's big enough, it has the virtue of making the polluters pay for the damage they inflict. Precisely for this reason, it is politically difficult to enact. So policy makers have embraced a more market-friendly solution to pollution --- emissions trading.
   In 1990, President George Herbert Walker Bush, of the Kennebunkport Bushes, signed into law a plan to reduce acid rain, which is caused by sulfur dioxide emissions from coal-burning power plants. Rather than set fixed limits for each power plant, the law gave each utility company a license to pollute a certain amount, and then let the companies buy and sell their licenses among themselves. So a company could either reduce its emissions or buy extra pollution permits from a company that had managed to pollute less than its allotted amount.
   Sulfur emissions declined, and the trading scheme was widely regarded as a success. Then, later in the 1990s, attention turned to global warming. The Kyoto Protocol on climate change gave countries a choice : they could reduce their own greenhouse gas emissions or pay another country to reduce theirs. The rationale of of this approach is that it reduces the cost of complying. If it's cheaper to replace kerosene lamps in Indian villages than to abate emissions in the United States, why not pay to replace the lamps ?
    Despite this inducement, the United States did not join the Kyoto agreement, and subsequent global climate talks have foundered. But the interest here is less in the agreements themselves than in how they illustrate the moral costs of a global market in the right to pollute. 
   With the proposed market in procreation permits, the moral problem is that the system prompts some couples to bribe others to relinquish their chance to have a child. This erodes the norm of parental love, by encouraging parents to regard children a alienable, as commodities for sale. The moral problem with a global market in pollution permits is different. Here, the issue is not bribery but the outsourcing of an obligation. It arises more acutely in a global setting than in a domestic one. 
   Where global cooperation is at stake, allowing rich countries to avoid meaningful reductions in their own energy use by buying the right to pollute from others ( or paying for programs that enable other countries to pollute less ) does damage to two norms : it entrenches an instrumental attitude toward nature, and it undermines the spirit of shared sacrifice that may be necessary to create a global environmental ethic. If wealthy nations can buy their way out of an obligation to reduce their own carbon emissions, then the image of the hiker in the Grand Canyon may be apt after all.  Only now, rather than pay a fine for littering, the wealthy hiker can toss his beer can with impunity, provided he hires someone to clean up litter in the Himalayas. 
   True, the two cases are not identical. Litter is less fungible than greenhouse gases. The beer can is the Grand Canyon is not an offset by a pristine landscape half a world away. Global warming, by contrast, is a cumulative harm. From the standpoint of the heavens, it doesn't matter which places on the planet send less carbon to the sky.
   But it does matter morally and politically. Letting rich countries buy their way out of meaningful changes in their own wasteful habits reinforces a bad attitude --- that nature is a dumping ground for those who can afford it. Economists often assume that solving global warming is simply a matter of designing the right incentive structure and getting countries to sign on. But this misses a crucial point : Norms matter. Global action on climate change may require that we find our way to a new environmental ethic, a new set of attitudes toward the natural world we share. Whatever its efficiency, a global market in the right to pollute may make it harder to cultivate the habits of restraint and shared sacrifice that a responsible environmental ethic requires.