Though not quite as good as his 2014 book, the new one is, nevertheless, quite good. One Nation Undecided gives detailed background on the facts and analysis of five controversial U.S. issues: poverty, immigration, campaign finance, affirmative action, and religious exemptions from government policies. Whatever your views on these issues, it’s important to know the facts. Reading this book carefully made me, a policy wonk, realize how little I knew about four of those issues and that I didn’t know quite as much as I thought I knew about the fifth, immigration.
In Why Government Fails, Schuck laid out in exquisite detail the ways that government fails. That led me to wonder why he considers himself a political moderate rather than a libertarian or classical liberal. The fact that he’s not a libertarian shows throughout One Nation Undecided. In it, he seems overly confident in government officials’ ability and willingness to craft effective policies on the five issues he addresses. That being said, he generally lays out the policy tradeoffs clearly, and sometimes both his reasoning and his conclusions will hearten a libertarian.
To his great credit, he almost never pulls his punches and virtually never fights dirty. Moreover, even if all he presented were the facts, a public discussion informed by those facts would be head and shoulders above what we hear and read in most forums.
Poverty / Of the five issues he discusses, Schuck, the Simeon E. Baldwin Professor of Law Emeritus at Yale University, devotes the most space to U.S. poverty. He points out that many important social changes since 1965 distort “and vastly overstate” the current poverty rate in America. If we include noncash government benefits such as food and housing, if we take account of the Earned Income Tax Credit, and if we use a more realistic measure of inflation than the Consumer Price Index, then we would conclude that the 2013 poverty rate was not the reported 14.5%, but, rather, 4.8%. Moreover, he notes, the official double-digit poverty rate treats cohabiting couples differently than married ones. Treating them the same “would lower the poverty rate even more.”
One refreshing aspect of his chapter on poverty is that he distinguishes clearly between poverty and income inequality, and between inequality and inequity. Schuck writes that inequality is “an empirical fact,” whereas inequity “is not fact but a moral judgment about the moral fairness or justice of a particular level of inequality” (italics in original). Actually, inequity can also refer to unfair treatment that has nothing to do with inequality, but his distinction is a good one. It is one, moreover, that many economists—including Nobel prizewinner Joseph Stiglitz in his textbook Economics of the Public Sector—fail to make.
The poverty chapter is full of evidence, some not surprising and some quite surprising. As an example of the latter, Schuck notes that an important factor in being poor, not just as a child but also later in life, is being born to an unmarried mother and an absent father. This and other facts led poverty experts Isabel Sawhill and Ron Haskins to advocate the “success sequence,” three choices that would substantially reduce the poverty rate, especially if carried out together. The sequence is: complete high school; work; and have children only when married and over the age of 21.
Another example of a surprising statistic is the small number of people who are in prison for mere drug possession: only “3 percent of state prisoners, who constitute 87 percent of U.S. prisoners.” He points out that almost half of prisoners “are violent offenders.” So why is our incarceration rate so much higher than Europe’s? It is, writes Schuck, “because our incidence of violent crime and recidivism is so much higher.” Interestingly, he reports, “incarceration is not a leading driver of poverty.”
On the idea of “banning the box” (BTB)—that is, prohibiting employers from asking potential employees about their criminal records—Schuck quotes a 2016 National Bureau of Economic Research (NBER) study that finds that BTB would hurt job prospects. While he doesn’t explain why, the reason is apparent to anyone who thinks about it. In the absence of information on applicants’ criminal records, employers will use other statistical categories in which they expect the number of criminals to be disproportionately high. And, sure enough, the authors of the NBER study, Jennifer Doleac and Benjamin Hansen, write that “BTB policies decrease the probability of being employed by 3.4 percentage points (5.1%) for young, low-skilled black men, and by 2.3 percentage points (2.9%) for young, low-skilled Hispanic men.” (See “Working Papers,” Fall 2016.)
In discussing how policymakers might change policy to help poor people, Schuck points out that most Americans distinguish between the “deserving” and “undeserving” poor. Specifically, only 14% of Americans “support giving [government] cash to poor, able-bodied adults without dependent children.” He doesn’t make clear what he thinks about this, but I found this statistic heartening. Certainly, it helps make the case that a Universal Basic Income, which even some libertarians have proposed, is a political nonstarter.
Immigration / In his chapter on immigration, Schuck nicely lays out the history of U.S. immigration policy and some of the most relevant facts and numbers. Here’s one striking number: between 1993 and 2015, the Border Patrol’s budget increased from $363 million to nearly $3.8 billion. Even inflation-adjusted, that’s more than a five-fold increase.
Schuck shows what a complicated web immigration law and policy are. He made me realize that even I, a consciously pro-immigration economist and an immigrant, had much less understanding of the history and facts than I had thought I had. To take one instance, I have long advocated that there be lengthy waiting periods—on the order of 20 years—before an immigrant can become a U.S. citizen. My reasoning is that it would handle the somewhat plausible objection that immigrants will “vote our system away” because they would have 20 years to learn about our system before being able to vote. Schuck points out that the 19th century Know-Nothings had proposed a 21-year wait for citizenship. Whatever the Know-Nothings’ motives, I still think it’s a good idea. I became a resident alien in 1977 and didn’t vote until I obtained citizenship in 1986. Voting was a letdown, which I should have anticipated given that I’ve taught my students since the 1970s that an individual’s vote is unimportant. Had someone told me in 1977 that I could avoid all the hassles of hiring a lawyer and, for a short time, facing deportation, in return for being able to immigrate but never be able to vote or go on welfare, I would have said, “Where do I sign?”
Schuck is concerned that the naturalization rate for eligible Mexicans who are U.S. permanent residents is a low 36%. But is that bad? Given that many people worry that immigrants from more-regulated societies will vote to weaken U.S. economic freedom, couldn’t one just as easily see this as a glass that is 64% full?
Schuck, always a keen observer, notes “the relatively low quality of the immigration bureaucracy.” I experienced that first-hand in my dealings with the Immigration and Naturalization Service from about 1973 to the early 1980s. If he wants to understand why the quality is low, even compared to that of other U.S. government agencies, he would do well to consult public choice theory. Government employees have limited accountability to the public. They are hard to fire, and when you complain about them to your congressman, he might write a letter to the appropriate administrator but not do much else. However, limited accountability does not mean zero accountability. After all, if you’re a citizen, you can vote for or against your congressman if he fails to act on your behalf. But whom do immigration officials deal with primarily? Noncitizens. Noncitizens can’t vote legally. It should not be surprising, then, that accountability and, therefore, the quality of immigration officials are lower.
Schuck, who tends to think through the unintended consequences of various policy proposals, does not seem to do so with his call for compulsory E‑Verify, a government program that would require employers to verify electronically that the person they hire is legally able to work. Consider the bugs that come along with any government program, ones that tend to be fixed only slowly. It’s quite conceivable that the federal government would nix the hiring of tens of thousands of people who are legal. But an even bigger problem is that E‑Verify could well turn into a federal work permit program. It is not a big stretch to imagine that this or that administration, responding to the faddish fears of the day, would prevent, say, people who are on the sex offender registry or who have past drug convictions from being able to work. On E‑Verify, he discusses literally zero downsides.
Campaign finance / On campaign spending, Schuck puts the numbers into perspective. In 2014, Americans spent over $31 billion on holiday gift cards, more than eight times the $3.7 billion total spent on the 2014 campaigns. He does blow a decimal place, though, stating that the $3.7 billion “represented a mere 0.0002 percent of U.S. GDP that year.” Actually, it was 100 times as much as his estimate, at 0.02% of GDP. Still, it was tiny.
Multiple academic studies conclude that campaign spending has only a small effect on election outcomes and not much effect on policy outcomes.
What are the effects of campaign spending on election outcomes? Surprisingly, according to multiple academic studies, they are small. Moreover, the spending does not have much effect on policy outcomes. Schuck quotes one of the key studies: “Legislators’ votes depend almost entirely on their own beliefs and the preferences of the voters and their party” (Stephen Ansolabehere, John de Figueiredo and James M. Snyder Jr., “Why Is There So Little Money in U.S. Politics?” Journal of Economic Perspectives 17:1, 105–130 [2003]).
That helps explain “Tullock’s puzzle,” named after the late public choice economist Gordon Tullock. The puzzle is that political contributions are so low relative to the potential payoffs to beneficiaries of government policy. The resolution of the puzzle: it makes no sense to spend a lot of money to influence a politician who is influenced more by his own beliefs, party pressure, and constituents’ desires.
Schuck has an extensive and nuanced discussion of the various Supreme Court cases on campaign finance regulation and freedom of speech. Unlike many other commentators, he distinguishes clearly between the famous Citizens United case and other important cases such as McCutcheon and SpeechNow.org v. FEC. One point he makes that helps explain the Supreme Court’s finding in Citizens United is that the government’s logic in preventing a movie from being shown just before the election would equally apply if the item at issue were a book. This, as Schuck notes, seemed to sanction book-burning, something Justice Samuel Alito found “pretty incredible.” Indeed, although Schuck doesn’t mention this, in the Supreme Court hearings Deputy Solicitor General Malcolm Stewart explicitly said as much. Under intense questioning, he admitted that his and the government’s logic would allow the government to ban books that were paid for with corporate funds if the books advocated voting for or against a candidate. In the limit, this would have meant a prison sentence for publishing a book.
Affirmative action / On affirmative action, Schuck writes, “No one doubts that blacks present the strongest case for affirmative action—historically, morally, and politically.” He continues: “If that case fails, as I believe my analysis will demonstrate, then the case for favoring other groups must fail as well.”
He disposes quite nicely of the “diversity” rationale for affirmative action in higher education. “The claim that members of the preferred minority groups actually create diversity value on campus,” he writes, “rests on certain essentialist premises that not only are false as a general matter but also tend to ratify the very stereotypes that the programs are intended to combat.”
As elsewhere in the book, Schuck deploys ample data to make his case. He notes a study finding that the admission bonus for being black “was equivalent to 310 SAT points relative to whites and even more relative to Asians.” One implication of these racial preferences is that black students, on average, “perform relatively poorly, yet they would have probably succeeded at less select institutions.”
Schuck favors nondiscrimination. Here, though, he slams “some” libertarians, writing that nondiscrimination “is no longer controversial in American society except among bigots and some libertarians.” In a book with 1,079 footnotes, he doesn’t footnote this disturbing claim. I suppose that some libertarians oppose nondiscrimination, but I, a libertarian, haven’t encountered one in decades. It’s possible that he is confusing favoring discrimination with the idea of allowing people to discriminate, something that many libertarians do favor.
Religious freedom / On religious tolerance, Schuck points out that U.S. society is one of the most religiously diverse in the world and that this came about mainly because of immigration of various religious sects. This diversity led bit by bit to religious tolerance. However, religious tolerance has been tested recently by government policies that force some people, especially employers, to violate their religious beliefs.
One interesting recent case involved Hobby Lobby, the family-owned company that was unwilling to pay for certain kinds of contraceptives for its employees despite being required to do so under the 2010 Patient Protection and Affordable Care Act. The case went all the way to the Supreme Court, where Hobby Lobby’s rights were upheld. Where most believers in freedom would see a clear-cut gain for freedom, Schuck instead sees a tough tradeoff. Referring to work by Harvard law professor Mary Ann Glendon, Schuck writes, “The proliferation and assertion of religious-based rights by A necessarily reduces the rights-free space in which B, C, D … can exercise their freedom to act with reducing A’s rights.” In short, Glendon and presumably Schuck see a conflict of rights.
I don’t. Hobby Lobby’s exercise of its right to provide only a certain bundle of health care coverage does not infringe on its employees’ rights, if rights are properly understood. Simply by being your employee, I don’t have the right to require that you provide me certain items. They are part of a voluntary contract arranged between you and me.
Unfortunately, as Schuck realizes, conflicts between the religiously devout and others whose beliefs and behaviors they find offensive are multiplied by “the vast increase in the number and scope of government policies that regulate people’s behaviors.” If only there were a solution. Who knows? The Peter Schuck who wrote Why Government Fails So Often could be just the person who could come up with a solution. My proposal for his next book title: How to Reduce Social Strife by Reducing Government Power.
