Does Americans really want Sweden’s wealth distribution?

Last September or so there was a lot of headlines about a survey that claimed people in the US wanted a wealth distribution more like Sweden’s. OK, that was maybe not so surprising.

I recently got a reason to read the survey, and  it is interesting. It asked a couple of questions, in the first one they got to choose between three unlabeled wealth distributions, where one was a perfectly even distribution (obvious even when unlabeled) with every quintile having 20% of the wealth, one was a wealth distribution where the bottom quintile had 0.1% of the wealth and the top quintile 84% of the wealth. And the third was a wealth distribution where the bottom quintile had 11% and the top 36%. They asked people which one they preferred.

Well, which one would you choose, if you don’t know anything about economics? Right, the middle one. The one with a completely equal wealth distribution is obviously one extreme. If you don’t know anything about the subject, you will automatically assume the 84% – 0.1% to be extreme as well. But it isn’t. That would be having 100% for the top quintile and 0%for all the others. They didn’t show any such chart, making the question completely biased from the start.

To make matters worse, of these three distributions, only one was real, the 84% – 0.1% distribution. It was the US wealth distribution. The perfectly equal one was obviously unreal, but the third one is also fictional. In the survey they claim it’s Sweden’s wealth distribution, but that is not true. In a footnote (yes a footnote) they admit that it’s not. It is Sweden’s income distribution. Although possibly that isn’t true either. According to data from SCB, the top 20% have 40% of the income and the bottom 20% have 4%of the income. Not 36% and 11% as Norton and Ariely claims.

However, the big problem here is of course that income and wealth distributions are completely different beasts and will look very different. They claim they chose the income distribution to have a bigger contrast, because although Sweden’s wealth distribution is more equal the the US wealth distribution it is still, according to them ”extremely top heavy”. Yes, because that’s how wealth distribution works. Sweden’s wealth distribution is 73% in the top quintile and 0% in the bottom one. And that’s the worlds most equal country.

So Norton and Ariely showed one real and two completely fictional and unrealistic income distributions and asked which one they preferred. The 8% that preferred the US income distribution to the fictional Swedish one are likely the 8% of people that know enough about economy or maths to notice the flaw.

What should Norton and Ariely have done here if they were serious? Well, they probably should have shown them several different income distributions taken from real countries, with two fictional (but not wildly unrealistic) extremes. Why income distributions? Because wealth distributions are by nature extreme. The people in the bottom quintile will not tend to save money, but to spend their income. They don’t really have money over to save. Hence, they will always fall close to zero. That looks much more unequal than what it really is. Income distribution is less unintuitive in that way. Maybe they could have had Sweden, US and Namibias income distributions, for example. There will likely always be a bias towards the middle in such a question, so it’s important to have US as the middle of the road to avoid a bias, and see when people then prefer, more or less income distribution.

Then they got asked what they though the US income distribution was, and then of course put the numbers somewhere in the middle of the option they choose (the unrealistic fabricated option) and the one they thought was extreme (US), proving that they didn’t know what they were being asked. And then they asked what they wanted it to be, and then wanted in average a slightly more equal distribution than they thought they had. In fact, slightly more equal than the completely unrealistic center option they had got, with the top quintile earning 36% of the total and the bottom quintile 11%.

These choices are both influenced by the false data they were fed in the first question, and an effect of the unintuitive maths here. This survey got Americans to claim that the average guy on the top 20% should earn about three times as much as the average guy in the bottom 20%, while in the most equal country in the world, Sweden, he in fact currently earns around ten times as much. This is not an expression of what people really want in a society, it’s an expression of that people won’t understand the issues if they are expressed in unclear maths after being feed misleading information.

I think this survey is interesting and you can learn a lot from it. It would be an excellent case study in how to not make surveys as they pretty much did everything wrong.

So what did this survey show? It shows that the maths involved are unintuitive. Most people in the lower 20% doesn’t save money. They will have very little of the wealth, because even if they have money over at the end of the month they spend it. That’s normal and expected, and every country will work like that, always. It also shows that people in the US believe that the US is more unequal than they would like. That’s it. But it doesn’t show any of the things they claim it shows, much less that Americans prefer Sweden’s income distribution. Maybe they do, maybe they don’t. But this survey doesn’t show it.

Annonser

Paul Clarke and the shotgun.

I completely agree that it’s wrong to carry concealed weapens without a license. I also agree that if you find a shutgun (or are in possession of one, and want to stop being in possession of it) it’s reasonable to call the police to ask them to pick it up. But there can be millions of reasons why you don’t want the police to pick it up. Maybe you have nosy neighbours. Maybe you simply don’t want to explain to your kids that somebody for some reason put a gun into your trash.

So the behaviour of Paul Clarke, taking a shotgun to the police and handing it in, is perfectly normal and understandable. Yet he got arrested and found guilty of possessing a firearm, a crime that carries a minimum of a five year prison sentence. And that is utterly insane.

What we have here is a case of somebody taking an illegal gun off the streets, and being arrested for it. In other words, he is facing five years of jail for no longer wanting to engage in an illegal activity.

In the twitter storm that resulted some people linked to an article about somebody called Paul Clarke that threatened someone for no reason. Also they point out that his story seems unlikely, and that he probably had the shotgun in possession a long time before, instead of just finding it as he claimed. Let me clarify that this is completely irrelevant. It may be true, and in there was proof of him having the gun in possesion for a long time, then possibly he should have been arrested. But there is no proof of that. Also what he did before should not enter in to this. He is not arrested for being a jerk or an aggressive man.

What is the result of this kind of interpretation of the law? Well, let us look at a question Lee Griffin asked me on twitter: What if Paul Clarke had been mugged on the way to the station and then later used to kill 5 people. Would Paul Clarke still innocent of wrongdoing? Well, in the eyes fo the law, he would. Because he would then have been out of possession of the gun, and not arrested and not convicted of any wrongdoings. Also, continuing to hide the gun from the police would also have been rather safe, unless the police have a habit iof raiding his house. Another good safe bet would be to sell it to some criminal. All of these alternative actions would have kept the illegal gun out there on the streets, and Paul Clarke wouldn’t have been arrested.

His only cause of action if he wants to do the right thing is to tell the police about the weapon. And if he does not want the neighbors excited or the kids worried his only possible action is the go with it to the police station. Which got him arrested. A moral cause of action got him arrested, where an immoral one would not have, even if he had made nothing wrong from the start.

So this is a case where Paul Clarke is convicted of doing the right thing, when doing something wrong would have kept him safe. And that’s why this is insane. It tells people that handing in guns is dangerous. It tells people to not invoke the police. If you get involved or see anything criminal, go home, keep your mouth shut and if you should happen to have anything illegal in your possession, on no account tell the police. Just chuck it in a lake. That’s what it tells people.

Crime may not pay. But if being legal doesn’t pay either, then the base of the law has been undermined.

Some random thoughts on the Fall of the Wall

I do remember the pictures on the TV so clearly. And I remember that I couldn’t really believe them. Surely it was a temporary glitch. Surely the people of east Berlin had not just forced the gates and crossed the border. Surely the might of Russia would come crashing down. But days passed, and nothing happened. And people was chipping away on the Berlin wall. And after a while, the East German military started actually dismantling it, and my skepticism and fear slowly lifted into a euphoria that lasted almost a year, and a lingering happiness that lasted longer. A great weight had been lifted from my shoulders. The world had been changed.

And the world changed a lot. And that’s probably why this state of happiness I was in lasted for so long. When the wall fell, and the the Soviet union, the world I grew up in disappeared completely. Because in that world, nuclear war was not a risk, it was a certainty. There was never a doubt the world would end in a nuclear war, it was just a question of when, and what would be best: Getting burned to death by radiation, or be forced to live through the Mad Max-hell that surely was how the post apocalyptic world would look. That dark, gloomy and doomed world was changed to a globalized, peaceful world. And it was a world that had a soundtrack, and the soundtrack was called MTV Europe.

Because something that propelled me through this state of happiness that lasted years was the constant reminder from MTV Europe. MTV Europe was only two years old when the wall fell, and in some sense probably still finding it’s feet and it’s audience. And to my constant joy, a large part of that audience turned out to be the youth of eastern Europe. The MTV of the early 90’s would with great fanfare welcome new countries of eastern Europe as they gained coverage there. In 1992 Ray Cokes started the show MTV’s Most Wanted, where people could call in and wish for songs. And armed with only a handful of words in English, people would call in on crappy telephone lines from what then seemed to be remote parts of Europe we hardly have heard of, and ask songs for they loved ones. The youth of Europe was united to a single rhythm.

But in 1993 I moved, and for various reasons I didn’t have MTV until 1997, when to my dismay I found MTV Nordic on my TV instead of MTV Europe. The magic bond to the youth of Europe had broken, and the sense of freedom and globalization I had in the early 90’s had disappeared, as the new Europe had become normality. But if I ever despair about the state of the world, I only have to remember back to those early 90’s and the nervous teenagers that was using Ray Cokes as an expression of their newfound freedom.

It’s getting better. Peoples thirst for freedom will win in the end. Sometimes it goes slowly, sometimes fast, sometimes it may go a bit backwards. But it is getting better.

Democracy vs Hunger

Professor R J Rummel is complaining about IFPRIs Global Hunger Index, because they exclude ”developed countries” from their data, simply because there is no hunger there. I agree with him, it makes the data much harder to use. It also, more specifically, makes it hard to know if a country missing from the data is there because they don’t think the country is big or significant enough to be in there, or because they have decided that it is a ”developed country”.

However, I may make Professor Rummel happy by noticing that it doesn’t matter when it comes to showing what he wants to show. Even though developed countries (and thereby most democracies) are excluded, the data that exists are still so overwhelmingly clear that it is almost scary.

”Hunger” in this graph measured on the IFPRI hunger index and ”Democracy” is a measure on how free/democratic countries are on a scale from one to twelve, with the data coming from Freedom house. I simply grouped all countries that had a particular democracy level, and took an average of the hunger index for these countries.

So, simply speaking, if a country is extremely totalitarian or just averagely oppressive doesn’t matter, people will still starve. But when countries are moving out from what Freedomhouse calls ”Partly Free” into what they call ”Free” countries (8-12 on my scale above) we see a significant drop in hunger, that directly follows the level of freedom!

It couldn’t be much clearer than that, really. Freedom, baby, yeah.


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