Monday, April 21, 2014

Has Medicaid Made America Less Religious?

In a previous post I argued that American religiousity has declined due to the expanding U.S. welfare state. I arrived at this conclusion after a fair amount of research, and in the following post I am now prepared to share my results.

Since the early 1990s religious affiliation and metrics of involvement in religion such as the frequency of church attendance have significantly declined, while the share of the U.S. population claiming no religion has more than doubled. Some of the effect must be generational, but surveys like the GSS show a sudden jump in religious “nones” rather than a demographic wave. Researchers call it the U.S. "secular boom"

Traditionally, theories of secularization focus on wealth and modernization, but the US did not become suddenly more wealthy in 1990. Rather, I argue that the secular boom coincided with the massive expansions in eligibility for public medical benefits, like Medicaid. State welfare crowds out religion as a lower cost social safety-net, and therefore lowers the cost to apostasy. Comparing CATO’s rankings of the most generous states for welfare packages with Gallup’s rankings of the most religious states, the negative relationship that emerges is striking:


Yet explaining exactly how the state substitutes for religion requires a theory of religious organizations. The most successful theories in the economics of religion have modelled religion as a rational solution to the free rider problem. Congregations must find a way to survive off voluntary member contributions while weeding out the moochers. A well supported view argues that strength of conviction in religious beliefs and ritual practices act as costly signals of commitment that screen out low contributors, and direct larger benefits to high contributors.

Historically, among the “public goods” provided by religion is social insurance of one type or another. Religious participation smooths income shocks and helps to elicit social support in turbulent times. Self-enforcing insurance arrangements form all the time in developing countries. They’re especially likely to form if individuals have a low tolerance for risk, and religiosity is known to be associated with risk aversion.

In the U.S. in particular, Christianity has had a long history supplying charity or mutual-aid based healthcare. By state, the largest public charities tend to be sectarian hospitals, like Baptist health providers in the South, or the 1 in 6 patients who are served annually by Catholic institutions. Indeed, many of today’s public hospitals developed directly from religious almshouses after the civil war.

The passage of Medicaid and Medicare in 1965, and the rising costs of healthcare through the 1970s, portended major changes to the U.S. hospital system. With so many reimbursement dollars flooding the market, as Dr. Barbra Mann-Wall writes the 1980s: 

… witnessed the growth of for-profit hospital networks, resulting in increased vulnerability of smaller not-for-profit institutions. More than 600 community hospitals closed. It was at this time that both for-profit and not-for-profit institutions began forming larger hospital systems, which were significant changes in the voluntary hospital arena. … The balance of power in these institutions shifted from caregivers to the organized purchasers of care, with Medicare and Medicaid becoming a huge governmental influence in all types of hospitals. At the turn of the twenty-first century, rising costs have forced many hospitals to close, including public hospitals that have traditionally served as safety nets for the nation’s poor. Some of the larger not-for-profit corporations have bailed out public facilities through lease arrangements. These types of arrangements have had their own problems, however, such as the complications that arise when a large secular organization tries to join forces with a hospital whose policies are dictated by its religious affiliation.

The key transmission mechanism in all this was undoubtedly the statutes directing states to make payments to Disproportionate Share Hospital (DSH): hospitals where a disproportionately large share of services goes to of low income patients. The statutes originated in the 1981 federal budget, conceived to soften the blow on safety-net hospitals in light of the states’ new ability to decouple Medicaid and Medicare payment rates. But states were slow to begin paying DSHs. Thus in 1986 law makers passed a budget that included provisions aimed at forcing states to make DSH payments. As Spivey and Kellerman explain, these enticements backfired:

Matters changed in 1989, when enterprising budget experts discovered that they could claim federal DSH funds without expending general state funds. The hospitals that were slated to receive DSH funds were asked (or, sometimes, directed) to contribute the required state share; the state would then use this money to draw down a large federal matching payment. The hospitals would get their contributions back and perhaps a bit more, but the states often kept the lion’s share of the federal payment. Some states even “recycled” a portion of their retained federal DSH funds and used it to draw down additional federal Medicaid dollars. With the DSH system effectively serving as a money pump that pulled federal funds into state coffers, the program experienced explosive growth. Between 1990 and 1996, federal DSH payments ballooned from $1.4 billion to more than $15 billion annually.

Combine this with the 1990 Supreme Court decision on Sullivan v. Zebley, which extended SSI and by association Medicaid to hundreds of thousands of children, and you have a recipe for sky-rocketing public health spending, recorded at the federal level as vendor payments. Past research has shown how these rule changes directly crowded out religious charity. Comparing the expansions against religious “nones” seems to indicate they have affected affiliation, as well.


To test this correlation empirically I used a panel data multiple regression technique known as fixed effects with two sets of data on religious affiliation, and a set of standard controls for median income, age, education, poverty and racial diversity.

The first test uses the GSS data on religious preference by region. The GSS is grouped by the nine census divisions, like New England or West South Central. Regressing changes in “none” affiliation against Medicaid per-capita and state health spending as a percent of GDP, my results indicate a $100 increase in Medicaid per-capita led to a 1.3 percentage point increase in the population of Nones within census divisions, while a percentage point increase in state health as a percent of GDP led to a 3.5 percentage point increase in Nones. These are big magnitudes, given that Medicaid per-capita grew by over $1000 in most regions. 

I found very similar results using data on religious adherents from the RCMS, which conducts a decadal census of church membership by state and county. Adherents and church membership were fairly stable through the 1970s to 2000, but suddenly collapsed 12 percentage points in 2010, a phenomenon I dub the “adherents shock”.

Remarkably, the states that suffered the largest drops in adherents between 2000 and 2010 also had the largest growth in per-capita medical benefits (Medicaid + Medicare) in every preceding decade

Running another fixed effects regression gives the same effect size as the GSS results. After controlling for poverty, education, wealth, age and racial diversity, a $100 increase in medical benefits per-capita led to a 1.3 percentage point drop in adherents by state.

As a fledgling economist, I am obliged to use the preceding information to construct a (hopefully non-tendentious) narrative. Here goes:

Religious organizations, as natural providers of community social insurance, are entwined in the U.S. hospital care system. But with the rapid expansion of state subsidized health spending on the poor, the more moderate to liberal religious adherents were able to let go of their affiliation. As time wore on, Medicaid and Medicare expansions interacted with the increasingly profit-oriented hospital sector, and many religious hospitals closed down or converted to secular ownership. Falling congregational membership followed suit.  

This narrative is still, in its detail, provisional. Nonetheless, my results demonstrate a remarkably consistent relationship between spending on public assistance medical benefits and the decline in U.S. church adherent rates, and the emergence of a growing non-religious population. 

This is one example of the non-neutrality of the U.S. welfare system on forms of social capital, and it will have big implications going forward. With the continuing roll-out of Obamacare, 8.7 million new people are expected to be enrolled into Medicaid in 2014 alone, with an additional 8.8 million expected by 2016. And with 24 states opting out of Medicaid expansion, it represents a nearly ideal natural experiment to challenge the validity of my “adherents shock” hypothesis. 

Be sure to stay tuned. If you would like to read more about my research, a much fuller account can be found in my honours thesis available here

Thursday, April 17, 2014

Excellent and highly informative Q/A on US immigration law

Tuesday, April 15, 2014
It is possible to argue that the primary evolutionary function of the self is to be the organ of impression management (rather than, as our folk psychology would have it, a decision-maker). Jerome Barkow. If our conscious self is mainly for managing PR and defending the illusion that it is in charge, then maybe technologies like Facebook are unhealthy. It exploits the sensitivity of an impression management instinct that was designed for a very different environment, where the people you sought to impress actually mattered. FOLK PSYCHOLOGY, FREE WILL AND EVOLUTION - Jerome H. Barkow
Monday, April 7, 2014
Robust and inclusive civic institutions and innovation are both important means to the end of human flourishing. To whatever extent that they are in conflict, we are better off resolving the conflict through narrowly-tailored ex post court decisions rather than through clumsy ex ante regulations. Once this simple point is conceded, any apparent tension that Morozov identifies in pro-innovation leftist attitudes evaporates. What remains are mood and emotion, and other non-cognitive residues that are a poor guide to public policy. From Why the Left Doesn’t Have to Hate Innovation by Eli Dourado
Thursday, April 3, 2014

A dose of statistical sobriety. 

Thursday, March 27, 2014

Hayek on group selection, humean ethics, and the evolution of social institutions before it was cool.  

Wednesday, March 19, 2014

The 21st Century Monads - Willard Van Orman Quine

Monday, March 17, 2014

The Problem of Evil and its Coasian Solution: a dialogue on the economic theory of theodicy

The year is 2035. Breakthroughs in genomics, artificial intelligence and synthetic biology have led to a scientific renaissance, a second enlightenment, as the brains of the great intellectual and academic figures of the past (at least those with surviving DNA fragments) are regrown and reprogrammed with the contents of their original corpus mentally intact.

Meanwhile, at the massively online University of Chicago, a controversy is brewing. The brain of the late, great economist George Stigler has been made a Professor Emeritus at – of all things – the Divinity School. His appointment causes especial uproar among a coalition led by the brain of the late biologist Stephen Jay Gould, under the slogan that economic science and religion belong to “non-overlapping magisteria.”

Fresh from the hereafter, Stigler’s first post-posthumous seminar bears the title “The Problem of Evil and its Coasian Solution,” which, according to Stigler, will launch a field of research known as “Theology and Economics.” Unbeknownst to Stigler, Gould is present in the audience taking notes, ready to pounce when the lecture concludes.


STIGLER: In summary, heretofore theologians have developed incomplete theodicies due to their failure to grasp the Coase Theorem. The evil god allows, as a type of harm, is always and everywhere reciprocal. We should not waste our time moralizing about victims and perpetrators of evil – the best we can do is seek the least costly way of reducing said evil: that mutually beneficial outcome which leads to minimized social cost. This means the existence of evil is not only consistent with a benevolent and all powerful God, but further demonstrates his providence through Coasian means. Any questions?

GOULD: Yes. I have several questions to pose to you. You seem to be saying that evil does not exist, that it is only apparent. This is a most absurd and reactionary view, it seems to me, given mass technological unemployment and the enduring plight of the Global South.

STIGLER: Ah, Professor Gould! So glad to see your mind was salvaged. You went much too early. But yes: to say that “evil is only apparent,” as Hume pointed out, is indeed contrary to human experience. That is not my view. My view is simply that in some sense there is an optimal amount of evil in the world, which, like pollution, is unlikely to be zero. If there is an excess of evil in the world it is due to an incompleteness of property rights. The crux, then, is not evil per se, but the quantity thereof.

GOULD: So you’re saying the ten billion humans living in subsistence is optimal? Do you not err in much the same was as the naïve adaptationist who treats natural selection as ruthlessly molding an organism for optimal utility? “Our world is not an optimal place, fine tuned by omnipotent forces of [economic] selection … History matters.” The evolution of societies, just like organisms, often “reflects inherited patterns more than current environmental demands.”

STIGLER: That’s right. But it is precisely this ubiquitous influence of history and transaction cost (stretching back to the Garden of Eden) that forces us to live in a “second best world” – that is, one separated from God. Every durable evil is efficient for the context or else it would not persist over time. Otherwise, the rational agents involved would have practiced their God given free will (i.e. negotiated) and improved their situation through a Coasian bargain. It is nonsensical to declare, in the abstract, that a state of affairs is evil. It must be put in context, measured against the opportunity cost of the alternative state of affairs. In other words, evil compared to what? My position is similar to the “greater good” theodicy developed by Richard Swinburne many decades ago. In a finite world, God allows for the best of possible logical worlds. That implies efficiency in the pareto sense, constrained, as it may logically be, by path dependency. I therefore am with Hume, too, in rejecting the view that God will rectify evil in the future. If an evil can be efficiently rectified it will already have been – there are, after all, no $1000 bills left lying around on the sidewalk.

GOULD: Ah, the economist’s version of the “myth of natural harmony—all is for the best in the best of all possible worlds. Is that not the foolish vision of Dr. Pangloss, so vividly satirized by Voltaire in Candide—the world is not necessarily good, but it is the best we could possibly have.” The quasi-optimum you describe is at best merely local, not global.  The world is too random and complex for your stylized analysis. Do you defend the evil of African American slavery on the basis that it persisted for over 80 years? Mere efficiency could not be less relevant to the problem of evil. The concept is an amoral technocratic farce: pure ideology.

STIGLER: On the contrary, Stephen. Violations of the pareto principal create outcomes in which one person is made worse off without anyone receiving any benefit. To quote the philosopher Joseph Heath, “one way of formulating the Pareto principle would therefore be to say that it recommends the elimination of gratuitous suffering.” Indeed, from my readings on the problem of evil it seems to be more typically framed as the problem of gratuitous suffering. Efficiency, or the seeming lack thereof, is thus the issue at the heart of any theodicy. The end of American slavery did not come without costs. The Britons, for example, got rid of slavery without having a destructive civil war by buying the slaves up and setting them free. In economics, we call that approach compensating variation.

GOULD: That’s all fine and good, but this focus on efficiency completely ignores the issue of massive class inequality around the globe. Forget simply about class – God fails so much as to provide equality of opportunity – and for whole nations! Your vision of God strikes me as brutally and implausibly meritocratic. Perhaps even racist.

STIGLER: Hold on now. I’m with Swinburne again on this, in that we both recognize that such disparities are not evil, per se. To quote the man himself, “[I]f [God] gives to some ten good things, and to others twenty good things, no one is wronged; nor has he failed to be perfectly good. He has been generous, and, more so, he has made it possible for us to be generous.” Swinburne may not have realized it, but that is pure Pareto principal. And, if I may proffer another Coasian formalism, the notion that in some sense poverty creates the conditions for compassion strikes me as eminently describable in terms of positive externalities.

GOULD: Some show of compassion. So do you follow the Irenaean line that suffering – even if not strictly gratuitous in your view – exists to aide in spiritual development?  

STIGLER: More or less. I prefer to cite the models by my colleague, the brain of Gary Becker. Indeed, he has a forthcoming paper in the Journal of Theology and Economics titled “Spiritual Capital: A Theoretical and Empirical Analysis.” Preliminary results indicate spiritual capital formation adds two percent annually to the growth of gross domestic spirit.

GOULD: And what spiritual development comes out of the ichneumon parasites? That genus of wasp which plants its eggs in a caterpillar’s body, but not before permanently paralyzing the host so that it can live to be devoured alive, bit by bit, when the eggs hatch? Is the total, senseless deprivation of the animal kingdom not the death knell of your economic theology?

STIGLER: I think not. Perhaps if my theology gave moral status to a caterpillar, but I have my doubts that something so small should feel much pain at all. More to the point, suffering demands a marginal analysis. How is the life of a caterpillar likely to resolve if it manages to avoid contact with an inchneumon? Death by fire ants, bird beak, or being baked in the sun? Everything biological ages and decays; and, until recently, death was a human inevitability. Parasites exist in humans too, and have evolved symbiotically to help regulate our immune systems. The providence of God is evident in the balance of marginal costs caused by the earth’s carnivora against the marginal benefits of a stable but dynamic ecology, our natural resource endowment, on which to build human civilization. As they say, there are two kinds of theologians: those who understand price theory… and everyone else.

GOULD: And of other natural evils, like earthquakes or tsunamis?

STIGLER: God is the kind of parent that lets his children learn from their mistakes. In other words, God recognizes that intervention in these areas tends to lead to moral hazard, so God in his infinite wisdom gave man skin in the game. The Coasian corrective to your specific examples is to make sure the people who live on fault lines or near the coast pay a premium on their homeowners insurance to internalize the cost of their risky choices.

GOULD: Disgusting – you are simply substituting one evil for another: insurance. Perhaps God’s laissez faire attitude to suffering is due to the fact that he’s been swindled by a ‘free market’ hack.

STIGLER: You’ve reminded me of a remark I made in my Nobel Prize banquet: A Swedish physicist cannot discuss his work with fifty people unless he goes abroad. A Swedish economic theologian can get opinions and instructions in his native language from thousands upon thousands of his fellow citizens. It seems we will have to leave matters at that. I am giving a lecture at my prayer tank on finite horizon models of Christian eschatology that I’m quite late for.

Tuesday, February 25, 2014

David Pizarro on the intentional stance and moral error.

Monday, February 17, 2014

What “God” Means to a Materialist

Explaining just what is meant by the word “god” has proven very problematic for generations of philosophers and theologians. Given the abstract and invisible nature of god, the standard approach has been rationalistic – applying “pure reason” to divine from logic and a few plausible premises what, by deduction, god must be. Since Kant, this approach has clearly failed, and still no consensus exists on god’s essential properties. Where agreement abounds, the logical dilemmas of qualities such omnipotence, omniscience and omnipresence have been inadequately resolved. What follows is my own proposal for what is in practice meant by “god,” which will in turn provide an explanation for why the standard attempts have been so problematic.

Beforehand, I need to contextualize this essay by confessing my own basic convictions with respect to language and meaning more generally. Unless justification or elaboration is required on a specific point, these position statements will have to stand on their own in the interest of space and focus.

Mental States and Translation

First, I am an eliminative materialist in the pragmatic and radically empirical traditions of Hume, W.V. Quine or C.S. Peirce. This is the view that most of our everyday terms for mental states are useful fictions; that numinous entities such as “self” or “thought” can in principal be eliminated with a more fundamental physical explanation.

This position is not nihilistic about the language of mental states. On the contrary, it is both acceptable and unavoidable to carry on truly meaningful conversation using the conceptual animism embedded in our ordinary language. Communication is possible because our usual interlocutors, other humans, have a common evolutionary inheritance and thus a common set of ontological commitments that place them in the same language game.

In particular, human brains share folk models of psychology and physics which help imbue the world with meaning and structure for interfacing in our environment. We have stubborn instincts about causality, being, object, purpose and identity. These instincts are so fundamental to functioning in our daily lives that even professional philosophers can be fooled into thinking that the elements of our mental asset library are not merely an interface but are literally fundamental to reality. To paraphrase Quine: Metaphysical thinking arises from the sensation of computation modeling the world.

Imagine if a Martian Scientist were to land on earth and begin to make observations. How should we explain ourselves? How could we explain even a simple to understand (for us) statement like: “As payback, Johnny stole Susie’s lunch money.” We could point to examples, but what is our plan B if our ostensive explanations are lost on them?

Other humans understand that “payback” refers to the retributive quality of Johnny’s intentions, but what is intention anyway; and how do we make the attribution without reading Johnny’s mind? Human attempts to elucidate these irreducible concepts usually just beg the question: “Well, if you intend something that means you meant to do it!” Indeed, it would probably be easier for the Martian and the human to converse about quantum mechanics than a simple intentional sentence.

Suppose the human-Martian discourse on intention continues. As the human circles back for the fifth time to contrast “intentional” with “indifferent,” the Martian interrupts. “When two atoms come into proximity and begin to share an electron, forming a covalent bond, does one say that the atoms intended to form the bond? Do atoms ever intend to find another atom with which to bond but fail? Are there atoms which form bonds on accident?”

“No of course not, that’s absurd,” replies the human. “How can atoms have intentions?”

“That is our question to you. You are composed of atoms after all.”

The communicative difficulty that inevitably frustrated the human is due to his reliance on his intuitive tool kit of stand-on-there-own concepts, for which the Martian has no innate ability to process. A solution is to shift from the misnomers of folk psychology to a more fundamental level of analysis – one hopefully within the grasp of the Martians. Applied to folk psychological concepts such as intention, this summarizes the practical program within eliminative materialism. Move from the ordinary language of mental states to the neuroscience of mental states and the chances of Martian communication go up.

Thus one way to proceed would be to offer high resolution scans of a human brain – some during the act of intention and others while at rest. One study that tried something like this concluded that intention is just the sensation of early movement, and that awareness of intention reliably occurred after the execution of executive motor functions.

Whatever the case may be, we can be sure the Martians would discover that our ordinary language for certain types of mental states does an awful job at describing what is really taking place. By analyzing the brain, a sufficiently intelligent Martian would be able to arrive at a definitive translation of “intention” defined in computational terms. If the Martian is Turing-equivalent, it will in time discover the physical pathways of the  sophisticated pattern recognition algorithms that search for cues of vitality in other beings; that scan eyes for sincerity; and that discover conspiracies couched in random events.

Perhaps the Martian discovers a subtly within his analysis, delineating mental states correlated with intentional action and mental states correlated with the perception and attribution of intention in other beings. Without knowing it, the Martian has discovered the phenomenon of the intentional stance – the ability to represent the knowledge, beliefs and intentions of another. Indeed, with sufficient resources the Martian will be able to understand any of our ontological commitments on the basis of the mental state’s physical correlates. In general, since the abstract mental state A is understood as supervening on the physical correlates X, it is a definitive definition. The Martian will be able to search for any instances of X-like physical systems and by induction conclude that it embodies the mental state A.

God and the Intentional Stance

With the above establish I can now turn to what I think is meant by God.

God has been defined as an invisible universal being of omnipotence, omniscience, benevolence, and design. God is a higher power capable of consolation, intervention, forgiveness, and punishment.  More than betraying a general anthropocentricism, these attributes are connected by a common thread: they all illustrate the phenomenon of a human mind taking an intentional stance to the universe – that is, of attributing wants, desires, and motives to the natural environment.

Everyone has experienced the pain of stubbing their toe on a piece of furniture with the concurrent feeling of anger directed at the furniture piece responsible. But why lash out against a hardwood chair? It is not as if the chair intended to inflict harm. Yet this simple example demonstrates the powerful human ability to construct a representation of an inanimate object’s motives, to see intention in the non-mental.  Indeed, the typical human is more fluent at perceiving light flickers in terms of demons than wiring.

So when I consider what is meant by god, I ignore the specific attributes. God as a universal intentionality is prior to these product differentiations. Take the god of the deists. 17th century deists were enlightened enough to recognized the indifference of the universe, that is, the absence of an active intentional agency. Yet they could not help project intentionality onto the prime mover, conflating a naturalistic higher power with a weakly human consciousness. As an aside, this was in part because the self-evident moral ontology of Natural Law felt so real as to demand an intrinsic reality.

This picture of god can be successfully elucidated to other humans with the use of more of these sorts of thought experiments. However, if we sought verification in a more definitive, translatable way, then we could measure the mental states of someone “perceiving” god and someone perceiving more prosaic demonstrations of the intentional stance, and compare their computational structures. In both cases, I bet one will find algorithmic systems that function to detect reliable cues of other beings which embody representational goal oriented software, too, each with their uniquely assigned reaction function. Perhaps the main difference between a secular adult and a spiritual mystic comes down to a set of neurological parameters controlling the sensitivity of these detection systems.

The example of the malicious hardwood chair demonstrates that in some sense our propositional attitudes towards the world can be more or less appropriate and more or less useful, according to the proposition’s “direction of fit.” As a benchmark, seeing intention in the chair is an error that will lead nowhere, while seeing intention in another awake and active animal is highly useful and predictive. This is because in the case of another human, our mental representations (or attributions) of their intentions A supervene nicely onto the complex arrangements of their brain matter X, while failing to map onto Y, a homogenous arrangement of wood fiber.

The same analysis can be done for god. If notions of god arise from people taking an intentional stance towards our natural environments – that is, actively constructing a representation of, for example, what nature “wants” – then the next question to ask is whether this projection can find a direction of fit. While the abstraction of intentionality A can be easily projected onto any number of things, from voodoo dolls to lightning bolts, this says more about the functional sensitivity of our brain than voodoo dolls or lightning bolts. Neuroscience has established that intention is a specific kind of physical state X in the brain. If some object Y lacks the properties of X then it is unwise to project A on to it. In this way, god is a type of attribution error or category mistake and thus can be rejected as a useless, meaningless, and erroneous application of the intentional stance. The lack of a direction of fit implies meaninglessness because, though humans find no problem talking meaningfully as if nature has intention, the Martian will be locked out from communicating without an X for empirical reference.

It should not be surprising that so many cultures across space and time have independently invented gods. Human mental faculties were not selected for on the basis of Ultimate Truth. During our evolution, “accuracy” always served an end. It is extremely useful to be able to tell the difference between an angry stranger and a happy one; to model the knowledge inside the heads of our friends and enemies; to judge two organism’s interests as potentially divergent; to form alliances; and to distinguish theft from “accidental borrowing”. Having an internal knowledge of precisely what intentional mental states are on a physical level is not evolutionarily important compared to the ability to actively infer and project intentionality in social interactions or in the wild.

It is so important that, in error management terms, our intentionality detection system would rather take on many false positives than to accept a genuine and potentially lethal false negative. Monotheists are simply those who choose to worship one false positive in particular.