The Only Winning Move

Markets in Everything - even homelessness, in this case. The link goes to an interesting article about an internet marketing specialist who helped a homeless man double his begging takes with clever marketing.

The connection with this earlier post - about a “homeless” man near my day job who seems likely to be a huckster - may not be obvious, so here it is. I don’t know anything about this man (”Keith”) that our marketing expert helped out, so no comment on whether he did a good, bad, or merely interesting thing by helping him double his intake. The comment is merely that this highlights what should be obvious: homeless people ARE selling something. This is a market too. I won’t say it’s a market “like any other,” since what you get out of helping a homeless man isn’t very tangible. But the point remains: homeless people have to entice people to donate to them on some basis, which in turn implies that people don’t donate unless they think they are getting something in return - presumably a feeing of having proven that they are “good” or “caring.”

The way I see it, there are three things at work here.

(1) Put your money where your mouth is. The betting culture is ubiquitous (I recently posted a $1000 bet on Facebook as a way to prove to myself that supporters of the healthcare bill privately don’t actually believe most of the crap they say in public) - and in this case the implication is that if you care about homelessness, you need to be willing to help pay for it. So people who like to think that they care about homeless are willing to part with some money to help out - they just need to be given a nudge to do so.

(2) The illusion of fair exchange. It’s interesting that including a squirt of hand sanitizer with donations was effective. People are uncomfortable with charity, but they nevertheless understand that it is necessary. Actually, I think a lot of the motivation for support of welfare state programs comes from our awkward feelings about charity. Conservatives are happy to trumpet statistics that show that they are more generous with their money than leftists - and rightly so: giving to the needy is not only good, but necessary, as some people really do fall hard on their luck. At the same time, I think conservatives make too big a deal out of these numbers. It’s probably true that conservatives are slightly more generous, but this isn’t the whole story. Also playing a role is that a lot of leftists are distinctly uncomfortable with the implication of inferiority involved in giving someone a handout. Handouts come with strings attached, and let no libertarian pretend otherwise since one of the major reasons we prefer charity to government programs, after all, is that we trust individuals to be more perceptive in discerning who is deserving of their handouts and who is simply freeloading than government. Not all leftists are covertly scheming to make us wards of the state: many are simply trying to take the obligation out of the relationship by shifting it to an “entitlement” that the government gives, rather than something that is given or taken away at an arbitrary whim. They consider it an outrage that someone who has already fallen on their luck should be obligated to anyone to get back up on their feet. It’s a sentiment that we libertarians can understand, if not exactly share. And I think the hand sanitizer gimmick works on precisely the people who are uncomfortable with the implied power relationship between hander and hanout-recipient. They want to donate because they like to think of themselves as the kind of people who can make sacrifices (never mind that it’s actually just a nominal amount - whatever’s in pocket) to alleviate suffering, but they feel awkward about it, and the illusion of fair exchange helps them get around it. They’re not actually fooled that they’ve bought a service, mind you - the hand sanitizer just acts as a nudge, a pretext.

(3) The realization that the “homeless” are often frauds. Notice how the improved sign says “support the homeless,” rather than including any details about Keith’s personal life. It doesn’t get a comment in the linked article, but I don’t think I’m out of line in suggesting that the litany of details about Keith’s personal life on the original sign, true or not, read like a list of ad hoc excuses - the kind of thing that someone thinking of how to sell a fraudulent homelessness situation to passers-by might come up with. After all, the first question that comes to anyone’s mind in a society as historically affluent as ours is “how does anyone come to this? Surely he can get a job at McDonald’s if nothing else!” Honestly, it kind of stetches the imagination to think that with all the opportunities out there there isn’t already in place some solution to the problem of homelessness. We all suspect that people begging on the streets could get off their asses if they wanted to. So Keith started out with what looked like the right approach: address this head on. The problem, though, is that addressing it head on raises too many uncomfortable questions in our minds, calls attention to the wrong lines of thought. When you depersonalize it, however, make it about homelessness in general, as the marketing advisor does for Keith on his improved sign, then people can safely tuck these questions away. It isn’t about Keith personally anymore, it’s about homelessness in general. EVERYONE can agree that we’d like to help hard-luck cases, and the new sign neatly sidesteps the issue of whether Keith actually is one of those cases.

Of course the one question that’s burning in everyone’s mind by the end of the article doesn’t get answered: 100% increase in ROI over what? We’d all like to know what a standard-issue bum makes begging, but our marketer isn’t telling. Which rather raises the suspicion that it’s a greater number than most of us probably think it should be, and that a condition for being featured on the blog imposed by Keith was that no such disclosures should be made. Fair enough even if Keith didn’t actually impose the condition, actually: our interpid reporter probably doesn’t want to stand between legitimate beggars and their takes by giving information fodder to those who are looking for an excuse not to give. But it seems to me that that’s what he’s done nevertheless. I think if there is to be real social change on matters like this, it will need to start with an honest assessment of just how much fraud is at work here, and on giving we innocent bystanders ways to detect it when we see it. Far from hurting the homeless, I think such an endeavor would end up benefiting them: people would be more willing to donate if they could rely on their money going to an actual good cause. Proving that you can play marketing games with homelessness, obvious though it be in retrospect, doesn’t do much to inspire confidence here.

TOWM quote of the day comes from Ed Sperling writing for Forbes:

The timing of all these pieces couldn’t have been planned better, which is interesting considering none of it was planned at all.

He’s talking about how server farms managed to drastically cut their power bills recently. It depends on several things, all of which happened to crop up at about the same time. They are:

(1) Moore’s Law hit a bump: you can’t keep cutting the size of chips in half without leaking a lot of heat, so hardware manufacturers started switching focus to multi-core processors.

(2) BUT - most software wasn’t ready for multi-core, so server farms just kept running stuff on older chips, but this required a huge power bill for cooling.

The solutions were:

(1) Virtualization got better, so it got easier to run old software on multicore systems without having to rewrite it, which is what people did.

(2) Server farms started looking for ways to cut their power bills.

What’s interesting for me about this article is that Ed Sperling seems to think it’s a minor miracle that all of this stuff got accomplished “without planning.” This is a common misconception about the free market, actually - that there’s “no planning.”

In actuality, Mr. Sperling shouldn’t be the least bit surprised, and that’s because MORE planning goes on in free market economies than in planned economies. Free market economies are the economic corollary of Linus’ Law(Eric S. Raymond vesion): “given enough eyeballs, all bugs are shallow.” Substitute “bug” for “market inefficiency” and you get the point. When literally EVERYONE is allowed to participate in the economy at the planning level, problems get solved a lot faster than if you leave it up to corrupt panels of politically-appointed experts. This is why market economies will always outperform planned economies in the long run. And this is also why it shouldn’t be surprising that what Sperling considers to be a minor miracle actually occurred. There’s nothing mysterious about how server farms figured this out. Give them a power bill that they actually have to pay and customer demand that they actually have to meet and they have a real incentive to solve their problems. By contrast, if internet space was something apportioned by the government on the basis of “social need” or what have you, then what we would get instead would be a bunch of people saying “well, the internet is a social good, so they should have power to run their machines,” and some pol would snap his fingers and it would be so, and all kinds of opportunities for innovation would be missed. And they would be missed not just because the financial incentive had been taken away, but also because the number of entities running the servers would have been much smaller. Rather than hundreds of independent server farms, you would have a handful of government-approved server farms. And so there would be fewer chances to innovate. Ditto the hardware manufacturers, of course. Absent marketplace competition, it’s hard to see what would motivate anyone to design multicore processors in the first place, much less adopt them. Moore’s Law could safely reach a trough, and the one or two quasi-government entities could just sit on their thumbs and say “well, that’s as good as it gets, so here ya go!”

The truth, you see, is that there is TONS of planning - ACTUAL planning - going on in the real economy by real market actors with real budgets and real profit reports and real bosses breathing down their necks to get real work done.

I think there are two problems here.

The first problem is linguistic. The word “plan” in English calls up an image of someone with a spreadsheet listing all his resources, which he then allocates. The point is that it isn’t a word that encompasses much innovation or creativity, or even more than a single-stage process. But the word is inadequate, because in real life planning is often (even usually) done over probabilities about uncertain resources, and it can span several stages in development. When I “plan” a move in Chess, for example, it’s true enough that I focus more on the board as it is now, since that’s something I know with certainty - but a good Chess player will, of course, plan several moves ahead, in response not just to the most likely, but to an array of possible responses from his opponent. And for this analogy it’s probably telling that Warrent Buffet and Bill Gates aren’t Chess players but Bridge players - Bridge being a game where planning is over uncertainty, because you don’t know what the other players have in their hands and therefore have to take odd contingencies into account.

The second problem is an undue focus on planning. It turns out, you see, that economic activity isn’t all about planning, but also about agility. People love to use boardgame analogies for economics (I just did, after all), but there’s a realtime aspect to running acompany too. In these cases, martial arts make a better proxy - because one of the things you learn in martial arts is never to commit yourself before you have to, and in fact to use it against your opponent when he does. The point is that since a fight happens in real time, you can’t always see what will be coming your way, and so you need to be prepared to react quickly to anything. The businesses that succeed are, unsurprisingly, often the flexible ones that use agility rather than strength (which here is “throwing money at the problem”) to respond to whatever comes their way. And so some aspects of economic success we can actually chalk up to anti-planning, to not committing oneself to any particular course of action before all the relevant information is in.

It seems to me that it is these twin errors - (i) an undue focus on planning as being something that is done in a single stage over known quantities when in fact it is typcially done in several stages over largely unknown quantities and (ii) an undue focus on planning rather than efficient reaction as the wellspring of success - that leads people like Mr. Sperling astray. The answer to his astonishment is that his perception is both too big and too small. It is too big to see that a lot more planning than he gives credit for DOES go on - each and every day and by more people than he imagines. And it is too small to see that planning is not the only thing that accounts for economic success. A lot of it has to do with flexibility and reaction time as well.

Since I do not make these two mistakes (though I fully admit I had to train myself out of it - it is a natural human tendency to err in this way, I think), I am not at all surprised to see that the computer industry coped with a potential profit shortfall by both reacting to the situation and implementing contingency plans. I wouldn’t have expected any less, and indeed I expect that every industry goes through just this kind of “crisis” just as successfully at least once a decade.

I like to think that by the time people reach adulthood they have stopped believing in magic. But of course the evidence suggests otherwise. Case in point: one of my Facebook friends is shocked, SHOCKED! to find that his medical insurance bills have increased in the wake of the new healthcare legislation.

Well, hello mister fancy pants! My glorious insurance company undoubtedly anticipating the passage of the Healthcare Reform bill, has raised my monthly insurance rate to $374.32. That’s 34%! That’s worse than getting a lube-less colonoscopy with no anesthesia and they decided to keep the results to themselves.

I, of course, being something of a snark, posted something snarky that went a little something like this:

Gee, it’s almost like if you artificially inflate demand for a service, the price of that service increases!

To which he responds that while that’s true of general products, it’s not true of insurance. With insurance, the more people who pay in to the pool, the lower the cost to the individual payer should be. Which is true enough, but only under the assumption that payOUTs from the pool grow more slowly than the number of subscribers to the fund. Obviously - OBVIOUSLY - that assumption isn’t going to hold for a situation where you’ve suddenly mandated that insurance companies can now no longer screen their applicants - just have to take whoever comes begging. Obviously - OBVIOUSLY - in a situation where some insurance applicant expects to pay x dollars to get y in return, where y is strictly greater than x, then he’s going to do it. Obviously - OBVIOUSLY - therefore, this scheme is going to end up costing SOMEONE money. Which is generally true ANY time people consume more resources - medical or otherwise.

So I’m left scratching my head wondering whether the people who supported the healthcare bill ACTUALLY followed this line of “reasoning” when they assumed that the bill would lower costs? Did anyone ACTUALLY think that mandating that everyone buy insurance while simultaneously forcing insurance companies to take on customers they know are bad investments would lower insurance premiums? JUST on the basis of there being more people paying in? I mean - I always assumed that the claim that the bill would cost the average citizen nothing was just its supporters being disingenuous. They knew good and well that it was going to cost, they just found it politicially expedient to pretend otherwise in public. It’s not so unusual in politics.

But no, apparently there are people out there who think that you can increase demand for medical services and simultaneously lower the cost of insurance payouts. Citation: (their ass, ibid gullibility et al 2010) - or something. To believe this, of course, you have to be in a position to believe, among other things, that insurance profitability is entirely a function of how much gets paid in and that how much gets paid out has nothing to do with it. And you further have to believe that insurance companies knew all along that they could have clicked the ruby slippers and increased their profits at any time just by deciding (a) to lower their premiums to attract more customers while simultaneously (b) not rejecting anyone on the basis of a preexisting condition, and they just decided not to do it anyway, even though it would’ve helped their bottom line. Which just further implies that you honestly think that being “evil” is more important to insurance companies than making money. They are just so all about rejecting people’s applications that they can’t even be bothered to make more money? C’mon. Even Michael Moore doesn’t believe that!

What’s particularly astounding is that these people understand enough about economics to grasp similar concepts about, say, grocery stores. So, you go to the store one week, and you buy some amount of food, and of course you have to give the store money for this food, or else they won’t let you take it home. And then, if the next week, you go to the store and buy twice as much of roughly the same stuff that you bought the week before, you’re going to have to give them roughly twice as much money before they will let you take your double helping home. NONE of this is controversial. What’s more, these people even broadly understand the reason: the store has to stay profitable to, among other things, pay its employees, buy more stuff with which to stock the shelves, pay off its investors, possibly expand in the future to open more stores which provide more food, or otherwise attract people into the grocery business. They even get why the store has to charge everyone, broadly speaking, the same prices: because if you undercharge some people your profits become unpredictable, complicating your calculations, not the least of the reasons for which is that these people will buy more of this stuff than those charged more, etc. What’s mysterious is why, whenver the issue is political, all of this common sense just goes out the window, and people apparently become willing to believe that there’s some magic wand you can wave whereby the normal rules of economics don’t hold anymore, and you can just sell people more stuff from the store without actually charging them extra money for that stuff! It’s ludicrous, and yet, in essence, that’s what this Facebook friend was believing - up to and incredibly even beyond the moment he got his increased insurance bill!

OK, now to be fair, there is a lot of price inflation in the medical field, so in theory there actually is some kind of “reform” that’s cost-neutral or even cost-efficient. There hasn’t been real market competition in medicine for a long time now, and the fact that everything is mediated through insurance meanes that we the paying customers are largely shielded from the kinds of tradeoffs that one typically makes in an ordinary, functional market. So I’m willing in principle to entertain the notion that someone could put on the table a cost-neutral healthcare reform. But in reality it’s extremely unlikely that anyone would hit on the magic formula - and even if they did, there would STILL have to be readjustment costs of some kind. Because any time you’re shuffling around 13% of the economy, you’re talking about folding companies, laying people off, reeducating them, employing them elsewhere, etc. You’re talking about people choosing not to go into insurance because it doesn’t pay enough anymore, not to go into medicine because it doesn’t pay what it used to, etc. It’s just impossible to do this in a way that it never, ever shows up on your bottom line. Impossible!

Now, don’t get me wrong - just because it shows up on your bottom line doesn’t mean it wasn’t worth doing. I meant what I said in yesterday’s post after all: short-term pain in exchange for long-term gain is THE single secret of success. It’s THE reason we make fun of lottery winners as being trashy, actually - because in real life gains don’t typically just fall out of the sky. So saying that healthcare reform will cost in the shortterm isn’t the same as saying it’s not worth doing. (Though, for the record, the kind of reform I would be willing to support would have to be pretty heavy on deregulation and reintroducing competition into this field, not just new rules about who pays what to whom when.) My purpose here has just been to marvel at the kind of dogfood people are willing to eat. Obamacare increased your insurance premiums and you’re SURPRISED? REALLY? How do you even manage to tie your shoes, man?

TOWM’s quote of the day:

So this is the GOP’s problem going forward: people love to hate “socialism” in the abstract, but they love their benefits once they have them, and now the GOP will have to go from saving people from “socialism” to taking away benefits, and that’s a hard row to hoe.

That’s John Scalzi unwittingly highlighting THE reason it is important to oppose Socialist programs on general principle. The Republicans have taken a lot of flak in the media for “going all in” on healthcare - but I, for one, think they know what they’re doing. If you compromise on this stuff - even a little bit - you find yourself in the unenviable position of having to support it forever. This is EXACTLY why the dole is dangerous. Individual voters are unable to see the real choices before them. They only see “today I got ‘free’ money from the government, tomorrow I don’t.” It’s really, really difficult to explain the actual tradeoffs involved in a way that people will understand. Actually, it’s really, really difficult explaining to them that there are tradeoffs at all on these terms.

But tradeoffs are ubiquitous - in all walks of life, and the ability to see them is, if I’m not overstating the case, what separates successful people from the average. The ability to take short-term losses for long-term gains. Take a Chess player for example. The very first step to becoming a better Chess player - after you’ve learned the rules and some basic opening strategies - is to accept that if you’re playing anyone good, it’s eventually going to come down to you having to take a risk and sacrifice one of your pieces in the service of getting a better position. It’s not just good advice, it’s the only way to win. If you just total up the cannonical point values of everything and do whatever it takes never to lose a piece, you’ll lose the game. It’s that simple.

And it’s that simple with everything in life. If you want to get somewhere, you have to put stuff on the line. You can’t just graze. Unfortunately, lots of people are happy to do just that. They can see yesterday, and they can see today, and tomorrow for them is always someone else’s problem.

There was a sterling example of exactly this kind of thinking of Facebook today. One of my friends - a former student of mine who I used to think was pretty cool before he jumped on the Obama bandwagon like Ric Flair on Magnum T. A. - posted a link to this bit of gratuitous fallacious reasoning. For those who can’t be bothered to skim it, it’s a list of all the even mildly successful government programs we take for granted day-to-day - such as the power company, the roads, the police, etc. And so of course it concludes with the idea that since all this stuff works out ok, Socialism can’t be all that bad (it’s fair to say it implies that Socialism is therefore good). Which is a bit like Soviet citizens worrying, on the collapse of that absurd state, that there wouldn’t be any bread anymore because who would supply it if not the government? It turns out, you see, that just because the government can do something moderately functional (hey - there may have been massive queues, but by the 1970s no one was starving in the USSR), it hardly follows that the private sector can’t do it better. But in the overwhelming majority of cases, the private sector can and would do it better without government interference. Now, I’m not saying there doesn’t need to be a basic framework of regulations in place; I’m not an anarchist. I’ll be the first to agree that a basic framework of “rules of the game” needs to be in place for the market to function. But it’s a long logical road from there to “the government can and should supply our basic needs,” and in fact you have to cross a couple of bombed out bridges to make it even halfway there.

Most people are Soviet citizens at heart. They see that the bread (where “bread” is any/all of electric power, roads, education, internet, etc.) comes from the government store affixed with a price tag that’s within their budget, and it never occurs to them that waiting in line is actually expensive, or that having to plan for the days you know the store will have bread is actually expensive, or that the lack of variety is expensive, or that the price that seems low, relatively speaking, merely because they can afford it, could actually, in some alternate universe capitalist paradise, be SO low that they wouldn’t even have to hardly budget for it - that they could work just one hour a day, even, and be able to afford more bread than they could possibly eat, quantities which they could actually purchase, because there was just that much available for sale. That’s everyday reality here in the USA, but Soviet citizens circa 1989 could be forgiven for not believing it if they heard it. They had no standard of comparison, you see.

Just like we don’t for electric power. Or roads. Or, now thanks to the first step down the slippery slope that we no doubt took yesterday, medical care. Now medical care is going to be one of those things like bread in the Soviet Unions - where it’s going to be inconceivable to people that they could afford it without the government’s help. In actual fact, without the government’s “help” (which currently primarily takes the form of stifling competition) we’d all be able to afford a hell of a lot more of it than we afford now. But having wrecked the healthcare market, they now want to “help” us pay the inflated prices they caused, and pretty soon people will think that without these subsidies, there’d just be no way.

So Scalzi is right. The Republicans are not going to scale back Obamacare. They’ll want to, but they won’t, and that’s because bought votes can only be unbought. It’s like kidding yourself that a blackmailer only wants this little bit and then will leave you alone. Consequently, there won’t be much to gain by voting Republican next time around. Until there’s a US Margaret Thatcher, your choices are Wilson, whose primary advantage is that he’s consistently Socialist, and Heath, who will run Socialism in a schizophrenic and damaging way but at least won’t add to the programs on the books.

Yeah, I don’t feel like playing this game either. Vote Libertarian.

I think a useful thing for someone to do at some point would be to compile - in book format, I guess - a handy list of all those contradictions you’re in danger of espousing if you don’t properly contextualize your political points of view. To cite a gratuitous example: latte leftists who are all about marriage rights for gays regard as outragous the idea that there could be marriage rights for polygamists. Or another: feminists who make a touchstone out of spousal rape on the grounds that a woman owns her own body even after marriage are unwilling to extend the same ownership rights to unmarried prostitutes. Or Republicans who complain about the tax burden but don’t mind deficits. It isn’t that I think these positions can’t be reconciled with an appropriate amount of logical contortion - it’s that the slogans these groups use simply don’t fit. If your support for gay marriage amounts to “love shouldn’t be political,” then you end up having to say that a polygamist union can never be loving to stay consistent, and that’s an unenviable position to try to defend. And if your argument that husbands cannot take advantage of their wives hinges on “my body my rights,” then you’re kinda stuck when a woman is willing to sell use of the body that you unambiguosly just said was hers. And if you oppose tax hikes on economic grounds, it does look rather Keynesian of you to then sit on your hands about the budget deficit.

Anyway, I’m thinking about this because Matt Yglesias has a fun post on the Arab-Israeli conflicts, basically calling out people like Jeffrey Goldberg for reducing every question about Israel to “b-but if only the Palestinians had accepted the 1948 settlement everything would be peachy now!” Here’s Yglesias with an ace dissection:

It does today seem like if you could go back in time and persuade the Arabs to accept the original UN partition plan, that contemporary Palestinians would be much better off. But what’s the cash value of this with regard to a humanitarian crisis in the contemporary Gaza Strip? And of course once you’re just constructing pure counterfactuals, all kinds of ways to postulate a better outcome become plausible.

Right. Absolutely right. But I wonder how this position sits with someone who on a typical day spends about a third of his column space calling Republicans racist for not supporting affirmative action? Here’s my thinking: the Palestinian leadership undoubtedly made a mistake in the 40s not accepting the partition plan, and Yglesias seems to want to say “so what? People make mistakes, and there’s no reason why dumb decisions made in 1948 should be paid for so heavily by the now-deceased decisionmakers’ descendants.” Well, sure, but if that’s your take, and the statute of limitations on bad political decisions runs out over a 60-year timespan, then surely it’s run out for white people on civil rights as well? Granted that a lot of opposition to the Civil Rights Bill of 1965 was driven by racism, what about that suggests that white people in general continue to be racist today, such that it would be OK to penalize poor whites for being white in the way that affirmative action policies always do? Because it sure isn’t the children of connected rich whites who have to worry about being passed over for jobs so that black people can have them instead.

Again, I’m not saying Yglesias can’t reconcile these positions, I’m just saying that it would help him be more consistent if there were a helpful list of reminders for political commentators on potential points of inconsistency. It would say things like “if the government is required to issue marriage licenses to all people who claim to be in love, then this will include polygamists. Either have a cogent response for this, or think of another flagship argument for official gay marriage.” It would say things like “if people own their bodies, then they are allowed to sell sexual favors just as readily as they are allowed to sell manual labor services. Either come up with a cogent qualification on legal prostitution, or stop claiming that you believe in self ownership.” It would say things like “if current taxes are a burden on the economy now, then future taxes will be a burden on the economy in the future. Either acknowledge this and justify defering the tax burden, or drop the pretense that you’re opposing tax hikes for economic reasons.”

And yes, it would also say things like “if decisions that leaders made decades ago are inadmissible as evidence of the kinds of decisions we expect their descendants to make today, then this is just as true of whites in America as it is of Arabs in Palestine.” And Yglesias would then be obligated to explain is support of affirmative action on more solid grounds than “some bad stuff happened generations ago.”

Because politics, ultimately, is a Humanities subject. And one cliche about Humanities subjects that I think is misstated is that there are no wrong answers. Actually, I would prefer if people said there are no RIGHT answers, or at least that there is no answer that is unambiguously right to the exclusion of all others. Because in fact there is no shortage of wrong answers in humanities subjects. It is always possible to analyze a book wrong, or come up with a philosophical argument that’s just plain fallacious, or spin a reading of history such that it gets the facts right but interprets them in a completely self-serving and misleading way. There are wrong answers in humanities - very definitely so. The issue is distinguishing the best among the “not wrong” answers - that’s the rub, and it is from this, rather than the supposed lack of wrong answers, that accounts for the Humanities’ reputations as being “open-ended” subjects. So education on how to reason over literary pursuits, it seems to me, should really recalibrate - take an approach more like that of medicine, i.e. take “do no harm” as a starting point. And so in line with that, we could do worse than start by reviewing a list of known mistakes and discussing how to avoid them.

Noah has been reading Dan Ariely’s bestseller Predictably Irrational recently. It’s one of the more successful books of a popular new subgenre in pop science: the one that claims that we are evolutionarily wired to get certain things wrong. There isn’t a name for this yet, so let me suggest “Anthropological Relativity.”

I’m not a big fan of Anthropological Relativity books - the main reason being the obvious: establishing to a scientific certainty that people are irrational in predictable ways begs the question of how the scientists who established this managed to avoid the trap themselves. And the answer to the begged question is equally obvious: since this irrationality is predictable, the behaviors associated with it can be identified and avoided. Much the way we learn to avoid having our anger buttons pushed as we get older, actually. So in theory, the Anthropological Relativity subgenre is like the Self-Help book’s RICH cousin - the one that actually has good advice about how to get a leg up on other people. But in practice, the authors of these books tend to fall into a particular pattern - that of assuming that overcoming these weaknesses is hopeless, and that this somehow justifies more government intervention in our lives, as though carrying a government badge has the magic power to render someone immune to these weaknesses that the rest of us are supposedly hopeless to overcome on our own (or that if it did, that the government agents can somehow be trusted not to exploit this power to take advantage of the rest of us).

Noah confirms that Predictably Irrational has this slant. And in fact I already knew that, because Alexis read it last year and reported the same finding.

Noah’s biggest bone to pick so far comes from the second chapter, The Fallacy of Supply and Demand, in which the author (apparently, I haven’t read the book myself) strongly hints that the market system is broken in the important sense that market forces cannot be trusted to reach the “correct” (aka the market clearing or equilibrium) price on a given class of good because people can only assess relative value and have no independent basis for setting a starting point. The argument is that people tend to “peg” their expectation of how much something should cost at the initial price they saw associated with a good of that class, and forever after they assess things priced more highly than that initial price as “expensive” and lower as “cheap.” To show that this initial price is arbitrary, the author cites some research (actually, I think it’s mostly research he himself performed?) to the effect that two groups were given different initial starting prices for some kind of bauble and then asked whether they would buy similar baubles at price x or price y, and invariably the people in the group with the lower initial price were less likely to buy at the higher price y than the people in the group with the higher initial price. Conclusion: OHMIGOD there are NO SUCH THINGS AS ABSOLUTE PRICES!!!

And that’s basically the content of Noah’s objection: that the idea that there are no such things as absolute prices - i.e. no sense in which there is a “correct” price for anything - is not something that needed to be proven by experiment, and so this is not revealing. The author is burning a straw man in saying that Free Market Capitalism believes in absolute prices for things that the market will eventually reach. Free Market Capitalism asserts no such thing.

Noah is mostly right - Free Market Capitalism doesn’t make this exact claim. But I still think this isn’t the best critique of this chapter - because in truth, while Free Market Captialism doesn’t assert exactly that thing, it does make a highly similar claim - namely that markets will converge on an equilibrium price for a good, and this equilibrium price will in some sense be “ideal.” The difference between what Free Market advocates (such as myself and Noah) claim about this equilibrium price and what Mr. Ariely thinks we claim about it is NOT that there isn’t “one such price” (at a given time in a given context) - because there IS. It’s that Mr. Ariely seems to think that Free Market Fundamentalism claims that the market will reveal the BEST such price that operates in everyone’s best interests, however defined. And that it clearly does not (though it does claim to do a better job than most of the proposed alternatives, more on which later). And the reason it does not is because we Free Market Fundamentalist types do not, as a general rule, claim to know better than anyone what is in his best interests and, more to the point, we are highly skeptical of people from the government making the same claim. Actually, we’re downright suspicious of the government making that claim - one of the many reasons for which is that the government by and large uses the same mechanisms the market uses, only more crudely. (So, for example, in an ideal world in which prices operated to encourage people to do things in their own interests and avoid things that were not in their interests, the price labels on alcohol bottles would show higher numbers for people who drink too much and lower numbers for people who don’t drink so much (what you might call perfect price discrimination), and the legal blood alcohol content for driving would be high for people who function well with a lot of alcohol in their systems and low for those who don’t. But the government doesn’t take these kinds of approaches. When it taxes to try to make alcohol expensive, it taxes all people equally, and when it imposes regulations on driving while intoxicated, it imposes the same regulation for everyone. And it tends to get these numbers wrong because it accumulates less total information than the market does, and tends to filter what information it gets though an ideological alternator besides. So the government does what the market does, only in a less flexible and less informed manner.)

But as for equilibrium prices, I think Free Market Fundamentalists (and I am one, so I should know) DO make something like the claim that Mr. Ariely is saying we do: we do claim that there is an equilibrium price that the market will eventually find. Now, Noah’s right that this equilibrium price can change as attitudes and needs change with time, so he’s right in one sense that there’s no “correct” price for everything across times and contexts. But he’s wrong in thinking that the Market Advocates such as myself (and himself too, actually, though I suspect he’s somewhat less of a fundamentalist about it than I am) do not believe in a “correct” price of sorts for a given time and population, because we do. And we think that all other things equal, the market will find it. And yes, I’m here saying that Mr. Ariely’s “fallacy of supply and demand” is a red herring - in the following way.

It’s probably true enough that people take arbitrary fixed starting points of comparison for their pricing - but these pricing points will only stay abritrary on unimportant goods, or else goods shielded from competition. The more important a good, the more quickly the market price will converge to equilibrium. And in fact Alexis confirms that Ariely’s experiments mostly deal with baubles, which is why he’s able to sustain the illusion.

The difference between baubles and actual goods - like gasoline - is that people can afford to throw money away on baubles but can’t similarly afford to throw money away on gasoline. And of course the science of ECONOMICS is only interested in and makes claims about the LATTER type of good, the one that, if you’ll pardon the not-so-pun, they have to economize over. The trouble with Mr. Ariely’s experiments is that they disconnect these purchasing decisions from the real world. Put differently, Mr. Ariely, like so many others, is fetishizing money.

In the real world, prices represent tradeoffs. Money has no value independent of the total economy - it is merely a medium of exchange. It’s as though Mr. Ariely has never even heard of inflation; he certainly doesn’t seem to have done much reading about it. But in the real world, there is inflation, and that’s what happens when there’s too much money relative to actual goods and services available floating around. Printing more money doesn’t have the magic power to create new goods and services, so what happens instead is that prices on the existing goods and services rise to absorb the excess money supply. Money expands or contracts to reflect how much actual “stuff” and “demand for stuff” there is in the world. Put differently, prices rise or fall to make sure that they continue to represent the percentages of everyone’s budgets that they’re actually willing to dispose for those goods.

When people spend money, they aren’t doing so under experimental conditions. Their spending represents tradeoffs. If I buy a bottle of wine for $30, then that’s $30 that I don’t have available to spend on other things. But there’s nothing about the number 30 itself that means anything here. 30 is just an arbitrary score, and it only means something in the context of the equally arbitrary scores attached to all those other things that I would like to buy with my 30. Put differently, 30 only matters as a percentage of my budget taking into account what percentages of my budget are required to obtain other things that I want. If I pocket $30,000 a year, after taxes, then I can buy exactly 1,000 bottles of wine - BUT I WOULDN’T, because of course if I did that I wouldn’t be able to eat, or drive, or sleep under a roof. I’m limited in how much wine I can purchase and how much I am willing to spend on such wine as I do purchase by all those other things that I also need to buy.

Mr. Ariely strikes me as being similar to all those people who thought, two years ago, that the oil companies were free to just keep raising prices on gasoline indefinitely. They’re not, you see, because at some point gas gets to be so expensive that people HAVE to find ways to economize on it. And even those people who “can’t” economize on it (because, they have a 50mile commute every day or whatever) will eventually HAVE TO if the price gets high enough. And the reason they HAVE TO is because there are other things besides gasoline that are necessary to their survival. Oil companies can comfortably raise prices to a certain extent, granted. But when you push people beyond a certain point, then raising prices actually hurts their profits, because people HAVE TO economize on gas once gas becomes a certain critical percentage of their budget, and at that point they buy less of it. And if enough people buy enough less of it, which at a certain price level will definitely happen, then the oil company loses money even though the price is higher just from the lower volume of sales. The oil company would, of course, like to sell you as little oil as it can at as high a price as it can, but there’s only so much it CAN do to achieve this.

OK, Mr. Ariely would presumably say, but doesn’t the oil company still want to reach as high a point on that curve as it can before everything busts? Isn’t it going to devote as much time and research energy as it can to finding that point? Well yes, and why shouldn’t it? The point is that everyone else is doing that too. So the oil company’s efforts in this regard are offset by the watchmakers’ efforts, and the pharmacists’ efforts, and the breadmakers’ efforts, etc. Everyone would like to reach that sweet spot - and an open market as good as guarantees that they keep trying until they do.

To put this in a context that the economically uninformed like Mr. Ariely can understand: let’s indulge in a hypothetical about his arbitrary price point. So, assume wine is 30/bottle out here in the real world. But for the summer we all go to an island resort town where wine is more like 55/bottle on average, because there’s only the one store on the island. At first this will seem expensive, but if Mr. Ariely is right, we’ll soon adjust and 55/bottle will come to seem reasonable. Now, when we “treat ourselves,” we might spend 80 for a bottle. This would have seemed completely outrageous at home, but since 55 is our point of comparison, 80 for something really nice seems acceptable. So Mr. Ariely’s point is made, right?

No, not exactly. He’s right that 80 can come to seem reasonable for a nice bottle of wine. But he’s wrong about two much more important things. The first is that while the acceptability of 80 as a price for a bottle of (nice) wine may have changed, our wine budget has not. There’s still only so much money that we can afford to spend on wine before we have to start giving up other things that we’d like (cheese, say), and this will necessarily limit how much wine we’re willing to purchase. We may come to find 80 a normal number to see on a wine tag, but we may also find ourselves drinking less wine - or at least find ourselves drinking worse wine. The other is that this new wine price is only sustainable to the extent that we’re on an island where there is imperfect competiton in wine. If someone else opened another wine store next door and priced his wine at 45/bottle on average, then this would seem cheap to us on the island (even though it’s still expensive by the standards we’re used to at home), and we would tend to buy more wine from him, and eventually his competitor would have to lower his prices too. Now it’s 45 that comes to seem normal for wine rather than 55, and of course it’s easy to see that if there were free competition in wine on the island then the price would reach the 30 we’re used to at home. And this is so because Mr. Ariely is forgetting that it’s not just from the purchaser’s point of view that the starting point is arbitrary, it’s also from the seller’s point of view. The original seller on the island thought of 55 as a normal price for a bottle, bt he, like everyone else, adjusts in the face of changes. And the market works for THAT reason - because there are two sides negotiating, not just one setting prices at which the other has to buy. It doesn’t matter that the purchasers can’t see for themselves that wine merchants can afford to sell at 30 rather than 55 - the wine merchants themselves will reveal this by undercutting each other’s prices. And yes, of course there’s a lower limit on how low prices can go, and that’s because wine merchants have budgets like everyone else - things they want to buy - and if the profit margin gets too low in the wine business then wine merchants will find other things to do.

So sorry, Mr. Ariely, but the market only fails to reach equilibrium in your artificial experiments over inconsequential goods. In the real world, where we do this with currency rather than monopoly money, it does reach equilibrium. Indeed, one of the most powerful arguments I’ve heard in favor of markets is that they aggregate information in a way that central planners can’t. People individually may suffer from the irrational bias that Mr. Ariely has identified, but as a group they do not. Mr. Ariely’s experiment is like playing someone who’s never heard music punk and stadium rock and asking him to declare himself a fan of one or the other, and then taking him to a record store and noting that he avoids the classical section and calling this insight!

It’s true enough that people can only make comparisons on the basis of the options in front of them. What is completely ludicrous is using the fact that people can only make choices on the basis of the options in front of them as an argument for limiting the options in front of them, as Mr. Ariely is apparently doing. Quite the contrary - what Mr. Ariely has in fact established is that it is extremely dangerous to allow the government to have this kind of power. It is why, for example, the people of North Korea think they’re well off when in fact they’re dirt poor. Compared to their parents’ generation, of course, they are actually somewhat well off. But they’re much less well off than citizens of most other countries in the world, and the ONLY reason the illusion of prosperity persists for them is because they’re not allowed to see any other options.

Mr. Ariely’s experiment is analogous in a rough way. Now, it’s true enough that Mr. Ariely’s subjects still have some concept of how much money they have available to spend, and this is informing their intuitions about how much they’d be willing to spend on his baubles. Nevertheless, he has removed an important component of real markets - that of the competitor’s freedom to undercut the big seller. It’s true enough that people in one group may consider the same price “high” that people in the other group consider “reasonable;” what’s artificial is that it would ever happen in the real world that these two groups would remain separate. The fact that the members of the one group consider the price “high” is what gives merchants an incentive to lower their prices, and what guarantees that they WILL lower their prices eventually. Wal Mart, after all, is not an illusion or a figment of anyone’s imagination. It’s a real chain that really competes with Mom and Pop stores and puts them out of business by finding ways to undercut their prices. And it’s possible only because that component that’s missing from Mr. Ariely’s experiments - the motivation to show people who are not otherwise aware that they are overpaying for something that they are overpaying for it - is very real. The merchant who sets the initial price peg may have no motive to make things comfortable for his customers, but his competitors do. And the market reaches equilibrium for this reason - i.e. exactly when the government isn’t limiting people’s freedom to price things.

That, it seems to me, is the better critique. Yes, there’s no such thing as an “ideal” price - but that’s only because we don’t know what’s in everyone’s best intersts simultaneously. Neither does the government, or anyone else. The best a standard price can ever do is aggregate these interests, and that won’t work out for every individual. (People who really like fine tea, such as myself, for example, are kind of screwed because tea just isn’t as popular as coffee, and so more of my budget than I would ideally like gets spent on having tea shipped in from Chicago. But that’s on me for having unpopular tastes; I am always free to aquire the taste for coffee if it comes to that.) The question isn’t whether the market can ideally aggregate people’s interests, but whether the government would do any better. It seems obvious to Noah - and I really agree - that the government would do a worse job. But I would go one step further than Noah: Mr. Ariely’s experiment in fact fails to demonstrate what he claims it does, and that’s because it is an unrealistic setup to begin with. Not only does Mr. Ariely NOT answer Noah’s question (i.e. on what basis he believes the government would do a better job aggregating interests and what it is about government that would help it avoid the limitations he seems to think the market suffers from), he doesn’t, to my mind, even establish his original point - which was that markets will fail to reach equilibrium. Quite the contrary - I see every reason to believe that real world markets WILL reach equilibrium - i.e. WILL converge on “the” price for a good - to the extent that this is possible (which is isn’t completely, but it’s certainly a lot more possible than Mr. Ariely seems to credit). It’s the government that won’t - and that’s because only the government can impose the same artificial conditions on economic transactions that exist in Mr. Ariely’s experiments. Mr. Ariely is using a contrived situation to argue that we should mandate the same contrived situation. The remedy is not to turn the real world into a lab. Done!

So no, there isn’t an “ideal” price which is in everyone’s best interests simultaneously - but there IS such a thing as an equilibrium price, and markets WILL tend to reach it. The equilibrium price is NOT arbitrary, but rather represents the best that the system can do to balance the interests of the people seeking to economize on it against the interests of the people seeking to profit by supplying it. What this perfect equilibrium is will change over time as needs and interests change, but it does exist, and the market is the ONLY mechanism I know that has any hope of discovering what it is, even if the market won’t ever hit it exactly on the nose. The government, by contrast, will never even be in the ballpark.

Today’s Bogus Stats Award in the amateur category goes to Megan McArdle, who claims, in an Atlantic article called How Real are the Defects in Toyota’s Cars? to have discovered that the “overwhelming majority” of the sudden acceleration incidents involved people “over 55.”

First of all, this isn’t even clear from the graph she provides, which has a 50-60 category, but nothing that cuts off at 55 specifically. Here it is (without permission, but also available at the original site):

And second of all, I count 20 - not 24, as she claims elsewhere - out of 35, which is a clear majority, sure, but not really an “overwhelming majority.” It’s 57%. Now, granted, this total includes 5 unknowns, and if we extrapolate from the knowns (which I don’t recommend, but just for shits and giggles), in which case older people are 20 in 30, or 67%, then we would expect about 3 of those unknowns to be above 50 - i.e. 23/35, or 66%. And 66% is nothing if not an “overwhelming majority.” Not to mention, people over the age of 50 are, according to the 2000 census, only about 27.3% of the total population. Even if we take that with the grain of salt that fully 10% of the population is below driving age, the over-50 category is still less than half of the population but is accounting for almost 70% of these accidents - WAY more than their fair share. So McArdle is on to something, right? There’s a high correlation between age of driver and these incidents?

Yeah, not so much. This is a classic example of what I like to call the “baseline fallacy,” and it works like this: you take a completely legitimate sample (I have no reason to believe that McArdle is cooking her numbers - no doubt the demographics of these incidents work out just as she claims) and conclude things about the relations between arbitrary subsets of that sample BUT - and this is the key step - you neglect to take into acount how unlikely membership in the sample is to begin with. No matter how you cook these numbers, we’re still talking about 35 affected drivers out of millions of Toyota drivers. So yeah, when you say 23/35 affected drivers were over 50, aka 66%, that looks significant. But when you put these numbers in perspective? I can’t find any exact numbers on how many Toyotas are on the road vs. other kinds of cars, but in 2006 about a million Japanese cars were sold in the US, and there are close to 300 million vehciles registered in the US, just under half of which (about 136 million) are passenger cars. So, let’s just throw up a number of something like 100,000 Toyota cars per year for the last 15 years and just arbitrarily decide that 1.5 million of the 136 million autos on the road are Toyotas. That srikes me as a GROSS underestimation, so I think I’m being fair when I say that if we’re really talking about 23/1.5million drivers who are elderly and 12/1.5million who are not, then your chances of having this happen to you if you’re old are 0.000015% and 0.000008% if not. The chances are so vanishingly small for both groups - because 35/1.5million is only 0.000023% of all Toyota drivers, even by my bogus and overly generous estimation - that I would really hesitate to make anything out of this. I would feel more comfortable saying that when you pull 35 marbles out of a 1.5million-marble jar, it sometimes happens that 23 of them are red and not blue is all.

McArdle’s point seems to be that because older people are slower to react (and she also throws in some numbers that indicate that most of the incidents happen when stoping and starting back up), that there’s no real problem here. It’s just the molehill of old people getting confused while driving being blown up into a mountain. I agree that this is basically a nonissue (Toyota should, of course, proceed with the recall, but the lawsuits are all frivolous, and I really very seriously doubt that Toyota has been just sitting on the knowledge that there might just maybe be a sudden acceleration problem without doing anything about it) - but NOT because there’s one way of looking at the data that provides some exremely slight statistical evidence that mostly old people have this problem! I say “one way of looking at the data” because to do this properly she would have to show that old people weren’t disproportionately likely to be Toyota owners - which they might be - that old people don’t clock more road hours - which they might well, and so on. There are a lot of potentially significant variables unaccounted for here. No, the reason this is a nonissue is just because it doesn’t seem to happen very often. Her basic point is solid:

At any rate, when you look at these incidents all together, it’s pretty clear why Toyota didn’t investigate this “overwhelming evidence” of a problem: they look a lot like typical cases of driver error.

Right. When no more than 35 of your millions of customers call to complain about sudden acceleration, and the damage in most cases is minimal because it happened in parking lots, you do rather tend to assume that the person in question probably just stepped on the gas by accident. ESPECIALLY when making the opposite assumption with little to no evidence would cost you billions precisely when the economy is troubled and your competitors are getting free money from the government! No, at best Toyota’s guilty of political stupidity; they’re certainly not guilty of callousness - at least, I don’t see any evidence for it. So let’s cut the crap about spurious correlations, shall we?

I like to think that McArdle knows what’s wrong with her article, and she wrote it partly to have something to publish, and partly because the “safety über alles” crowd won’t be convinced by the actual facts (they truck in this kind of statistical fallacy for a living, after all). But even so, she’s doing her readers a disservice by not telling them what she’s up to. Now, instead of just the “safety über alles” crowd playing useful idiots for the Big Three, even Toyota’s defenders are getting their stats wrong. I don’t know when political discourse first got moronic - probably it was ever thus - but I do know this isn’t helping.

I’m not one to defend Sarah Palin, but the 11,000+ comments on HuffingtonPost in the wake of her recent admission that she and her family used to go to Canadian hospitals when she was young seem a bit of a cheap shot. Apparently, it’s “hypocritical” of Palin to denounce Canada’s healthcare system when she herself once took advantage of it.

Yeah - only if you’re in a position to believe that 5-year-old kids are responsible for decisions that their parents make. Further, that people in general are not allowed to change their mind ever about anything, not even over a 50-year time window.

AND you have to ignore the fact that the nearby hospital in Whitehorse that Palin and her parents regularly went to when they lived in Skagway is the only one in the area. Alaska and the Yukon Territory are remote, people.

But even assuming the left’s preferred spin on this were true - that Palin’s parents were deliberately freeriding on the Canadian system - how does that possibly become an argument in favor of such systems? All that does is confirm what the right has been saying about the public option all along: that it will crowd out private options and function - intentionally or not - as a kind of trojan horse that brings us an eventual single-payer system.

If I were a left-wing supporter of single-payer healthcare, far from celebrating it, I would want this story buried.

There’s a “homeless” man who stands on a corner near where I work with a sign asking for free money. Even if I hadn’t seen him get out of a car to put in a hard 3-hour day of begging recently, I would have my suspicions: he’s been doing this since at least summer of 2005. I get that sometimes people fall hard on their luck and need a leg up - but you don’t need one from 2005-present if you’re really trying.

Anyway, I mentioned something at work about the “homeless” man - drawing my shock quotes in the air like a metrosexual corporate powerpoint addict - having gotten out of a car prior to begging and got an angry retort from one of the resident leftists. It turns out I don’t know his situation. Which is true - I don’t. But once again I find myself marveling at the credulous tacit assumptions some people have to make to keep their ideologies afloat.

Consider the assumptions going in to this temper tantrum. It won’t surprise you to hear that this person is one of those who thinks that pretty much anything a corporation does is evidence of it being up to no good, deliberately scamming people to line its pockets. Which means she’s in a position to believe that all currently operative con artists consistently dress the part and that she can tell the difference. Which is just astoundingly naive when you think about it.

In her world, someone apparently thinks to himself “I wanna be a con artist when I grow up.” And then he studies up on con artistry, which in a great deal of cases involves getting an MBA. And having gotten this golden ticket, he then proceeds to dress and act like a con artist, so that everyone knows just exactly what he is and is up to, and yet somehow for some reasons that we’ll just wave our hands over, despite the fact that all con arists have what ammounts to a name tag that says “Hello my name is Con Artist,” people continue to be conned. Meanwhile, you can rest assured that anyone who appears to be homeless is completely sincere - because while it’s easy to imagine that someone would exchange goods and services for money in a dishonest way, it could never ever be the case that someone would put on a costume and pretend to be someone they’re not for handouts.

I mean, what does she honestly think con artistry is? Isn’t deceiving people about who you are and what motivates you the whole mechanism by which it typically operates? And what would possibly explain why people who were willing to lie and cheat and steal on the million dollar scale would be completely unwilling to do so on the $10-100,000 scale? You know, there’s Burger King and Burger King, and the main difference between the two is that the former was founded by ambitious people and the latter not so much. Why would con artistry be any different? Just like any other occupation, there are talented con artists, mediocre con artists and downright inept con artists. There are take-no-prisoners scorched earth ambitious con artists, merely successful con artists, and lazy con artists. Coming up with the formula for success is difficult in any field, involving, as it does, a complex interplay of innate talents, personality traits, and facts about the environment in which an aspiring climber finds himself. Why would that be any different for con artists? Why would con artistry alone among human endeacors be the kind of thing that you could identify by the fact that everyone who tried it was not only a roaring success, but the fact of his success is the very thing that tipped you off as to what he does? If that were the case, would there be any honest men left? And if it really were the case that the more successful in business you were the more likely to be a sham were your products, then what would these successful people spend their ill-gotten gains on? Also sham products that they well know - they better than anyone! - are shams? Or is there some mythic parallel economy where everything’s high quality, and “they” know about it but “we” don’t, and which nevertheless accepts money from this economy where everything is a crappy fraud, even though it knows that everything in this economy is a crappy fraud?

No, it’s just too much. I don’t have that kind of faith. It’s just easier for me to believe that there are hucksters at all pegs on the income totem because hucksters, like everyone else, are successful at what they do to varying degrees, that all that is required to entice a dishonest man into hucksterism is the perception (true or not) that he is better off conning than doing an honest day’s work - that calculation being carried out at whatever level of potential he operates - that hucksters can and will prey on the good intentions and community instincts of their better-meaning but more naive fellow men, that it follows from this that a certain percentage of beggars are deceiving us about their circumstances, and that when you see one get out of a car to go stand on a corner he’s been begging on for 5 years, he’s probably one of them.