More examples of signals rather than causes

Being a homeowner makes one responsible.  More likely: Responsible people become homeowners.

Going to preschool improves ones chances of success. More likely: Having parents that do a lot of things, including sending kids to preschool, improves ones chances of success.

A college degree increases your earnings. More likely: Ambitious folks find ways to make more money. I’ve heard of studies that look at non-college graduates that have similar ambition and work ethic as college graduates that show that they have about the same earnings as college graduates.

Countries with government health care have better health, as measured by life expectancy and infant mortality, than the U.S. More likely: Other factors like health habits, diet choices, demographics, lifestyle choices and differences in the way these health stats are tracked from country to country have bigger impact than whether the health care system is provided by government or not.

Can you think of any?


11 thoughts on “More examples of signals rather than causes

  1. On another blog I read, it has been alleged by many that IQ is what defines whether or not one will be productive. That is, not only is a high IQ necessary for success, but a high IQ means that you will be successful. I have argued (unsuccessfully) that talent (IQ) is overrated and that non-cognitive factors, as we have discussed at the dinner table, are better determinants of success or productivity.

    Indeed, one of the “studies” used by the blogs author compares the average IQ of a nation’s population with its economic output and insists that the fact that there exists a positive correlation between IQ and income, that the higher IQ necessarily caused the high income. I have reminded him that correlation doesn’t equal causation and that (1) the high income may result in better nutrition and better schools which may lead to a more intelligent populace, and (2) most of the low income/low IQ countries cited also have political institutions that have poor laws regarding property rights, individual freedoms and enforcement of contracts, i.e. Nigeria isn’t poor because the majority of the folks are stupid, it’s because the government is corrupt.

    Many of the bloggers there insist that foreign born low skilled workers living in the US can NEVER become highly productive workers capable of producing more than the handouts they get from the government and certainly incapable of gaining the skills needed to work in “high end”, e.g. high tech industries (I believe the blog’s author is an engineer in the tech industry). I have argued that determination and work ethic are a more valuable asset than mere intelligence and that people (foreign or US born) may be non-productive either due to low skills or simple laziness, but that proper incentives (reducing welfare/entitlement programs and reducing taxes on the productive) will encourage the low skilled to gain skills and will motivate the lazy.

    The solution to the “problem” of low skilled immigrants taking more from the system than they contribute is not trying to erect more physical barriers or impose immigration taxes on foreign born low skill workers – neither of these works – but to align our incentives with our goals, i.e. stop rewarding low productivity (with entitlements/welfare) and stop punishing high productivity (with taxes). The best way to keep rats out of the pantry is not by closing the door (the rats will chew through the wall), it’s by removing the cheese. Eliminate the government subsidies to sloth and both the foreign born and US born rats will disappear.

    In regards to healthcare, the US has, by far, the best medical care in the world. That’s not to say that we have the best health as health and medical care are two different things. When the WHO ranks the US poorly for healthcare, they are really rating things that are affected less by medical care than by other factors such as genetics, diet, drug abuse, smoking, etc. Decades of experience shows that the medical profession has limited to zero effect on people’s lifestyle choices. Is there any semi-literate person over the age of 10 in the US who doesn’t know that smoking is bad for your health? Yet, millions continue to smoke…..and eat crap and refrain from exercise, etc. I’ll see if I can find the paper that thoroughly debunked the WHO rankings as pure political hogwash.

    • Correlating IQ and wealth is a good example bad cause and effect. I’m willing to bet there’s a pretty correlation between amusement parks and wealth, as well, so we should just build amusement parks in third world countries to solve their problems.

  2. Is health care only intervention? Like splinting someone’s arm, or prescribing anti-biotics for an ear infection.)

    Or does health care include prevention? (Like public ad campaigns against drugs and smoking or when a doctor prescribes/recommends exercise or a change of diet to a patient.)

    Smoking rates gone down since 1965 – from about 42% to about 20%. What is creating that effect?

    Link to stats on US cigarette consumption from 1900-2007

    • Health care can be all of that, but that still doesn’t take away the possibility other factors contribute to the statistical differences between countries.

      As with all things, I imagine there are many reasons for falling cigarette consumption.

    • There is a difference between “health” and “medical care”.

      In terms of preventive care, decades of experience has shown that education is quite ineffective. Doctors counsel their patients to stop smoking, exercise, lose weight, refrain from illegal drugs or unsafe sex, etc., but it’s to little or no avail. As you know from your own field, unless the individual is self-motivated to change his lifestyle, it won’t happen. This can best be explained in economic terms, e.g. time preference (or discounting). People place more value on the present than the future – for a variety of reasons – we may not live to see that future, the future’s impact (good or bad) is not as imminent at the present, etc. While certain bad behaviors have gone down, others have gone up. I think it has less to do with what government or healthcare providers do and more to do with what’s in fashion.


      Preventive care is important. For myself, I have chosen to take preventive measures in hopes of avoiding (or at least postponing) certain bad heath events. However, I think we cross a line between rights and responsibilities versus an authoritarian nanny state if we limit people’s choices to make their own decisions, e.g. banning fats or jumbo soft drinks, etc. Banning X usually results in either some people thinking it’s cool and doing it despite the ban or (as in the case of illegal drugs) higher costs (but no less consumption) for X or the substitution of some new vice (Y) for X.

      The insurance ramifications are another issue. If the govt pays for your healthcare, should they be entitled to modify your behaviors that affect your health? I think the obvious answer is “yes”. If Seth is watching TV all day, smoking unfiltered Camels, eating jelly filled donuts and washing them down with MD20/20…..and he expects me to take financial RESPONSIBILITY for the ill effects, I should have the RIGHT to curtail certain of his behaviors. However, that’s not the approach to healthcare or medicine that I support.

      If we look at the insurance aspects and how insurance works, it becomes evident that insuring against universal events is not really insurance (as we think of insurance as either pooling risk among parties or transferring risk to some other party), but simply wealth redistribution – at least as how coverage and payment for universal events is handled under ObamaCare. If (virtually) everybody in the population is going to get treatment (including preventive treatment) for something, then we are not really pooling or transferring risk. We are simply either adding an administrative burden or we are forcing some people to pay for other people’s treatments. Preventive care, is by definition, a universal event. Using insurance to “pay” for it is, at best, a waste of your own money and, at worst, a foray into socialism.

  3. I doubt that educating the public (public health campaigns, doctor’s advice, etc.) has had as much effect as raising the tax on cigarettes – 18 cents per pack in 1970 to $2.35 per pack today – when you tax something, you get less of it. Of course that doesn’t mean people aren’t smoking non-taxed products or abusing other (perhaps even less healthy) substances. People generally find substitutes when the price of their otherwise favored goods go up. USA Today agrees with me…

    There is ample evidence that education programs don’t do much good, e.g. D.A.R.E. has been shown ineffective in altering substance abuse in teens, but we continue to throw money down that rat hole because it’s politically incorrect to oppose D.A.R.E.

    In most countries, particularly developing nations, cigarette taxes are low or non-existent – and cigarette smoking continues to rise in these countries even though education programs do exist (although their quality can certainly be questioned).

    My big beef is that I resent having to pay (a) to have someone else counseled, educated, etc. about the dangers of smoking, obesity, inactivity, poor diet, having sex with hookers, etc. just because they’re either too stupid or lack the discipline to refrain from such behaviors, and/or (b) to treat the health consequences of someone else’s bad habits. I realize many use the argument that if “we” don’t pay for the preventive stuff for these people, “we” will have to pay for the care later on. That’s creating a false dilemma. There’s a third option – give people the RIGHT to make their own choice and the RESPONSIBILITY for their choices, i.e. have the courts hold people strictly accountable for paying for their health care, no more visits to the ER and then expecting the hospital or the taxpayers to foot the bill. Bring back debtors prisons and make them work off their debt – it will sink in real fast that you need to change your lifestyle or pay your bills.

  4. Would the third world countries with low or no cigarette taxes and no health care system be a good example of giving people the right to smoke and having them bear full responsibility for their actions (at least in regards to smoking)?

    • Hi Wally – Third world countries are good examples of societies with high concentrations of political power in the hands of a few with those few people having little or no respect for the property and individual rights of others. Not sure many other comparisons are all that informative.

    • Hi Wally – the facts from countries with low/no cigarette taxes was mentioned to show that – and this is supported by virtually all of the organizations involved in global health efforts – economics (especially high taxes) is the biggest factor that negatively impacts smoking rates.

      Almost universally, third world countries are poor because they lack political institutions that guarantee people’s property rights (as broadly defined). In terms of having no health care and having to bear the responsibility for smoking, the AVERAGE citizen of these countries is out of luck, not because the government has given them rights and responsibilities, but because the government has denied them rights while leaving them with the responsibilities that naturally go along with those denied rights. These aren’t really governments as we know them in the sense of democratic institutions, but slave states ruled by dictators (or virtual dictators) who rule by force of their armies. If these people truly had rights, they would be productive and prosperous enough to afford health care and with the corresponding property rights in place (including enforcement of contracts), a private health insurance market could develop (as it did in all free nations). If we look at rich countries versus poor countries, the overwhelming difference is that in free countries, there are political institutions that PROTECT the rights of its citizens, while in poor countries, the government (controlled by a very small minority) has a system of PREDATION where the rulers (the political class) neglects the rights of its citizens for the purpose of enriching themselves – the direction we’re heading.

  5. Pingback: More Signals v Causes | Our Dinner Table

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