The RBA is not the Fed, thank goodness

This is based on a comment I made here.

At the Bubbles and Busts blog, there is a post criticising Marcus Nunes' post positively contrasting Australia's economic performance over New Zealand for failing to deal with Australian economist Steve Keen's warnings over the Australian housing bubbles and their debt-deflation implications.

That impending crunch is a long time coming. I agree completely that Australian housing prices are a series of bubbles and that many Australian households are highly leveraged on bureaucratic approval. But the air was out of the various American housing bubbles before the Global Financial Crisis or Great Recession hit. The former was a result of (1) some bizarre evolution in financial instruments, (2) poor prudential regulation, (3) a pattern of the destruction of prudence by intervention and the (4) US Fed deciding to go with specific credit management (pdf) rather than general liquidity support. It then proceeded to (5) disinflate by "passively" tightening monetary policy in what Matt Yglesias rightfully calls a massive failure in monetary policy while (6) entirely fail to anchor income expectations (giving it what I have called unbalanced credibility).

In the case of Australia, (1) does not apply anywhere to the same degree (2) is likely rather better (but as yet not seriously tested by a domestic crisis rather than an imported one) (3) does not really apply (4) is not something the Reserve Bank of Australia (RBA) is likely to do, (5) it won't do and (6) it does the reverse.



Like Keen, I admire Fisher's Debt-Deflation analysis (pdf) of the Great Depression. But that analysis was in the situation of massive deflation imposed on the goldzone by the Bank of France abetted by (pdf) the US Federal Reserve. You need seriously destructive monetary policy to get the effect.



Yes, it will be ugly when the bubbles burst but better monetary policy than the Fed managed will make things a lot less ugly in Australia when and if the housing bubbles burst (rather than subsiding).

Decision inertia

Econblogger Scott Sumner, extends an excellent comment on one his posts which raises the issue of policy "stickiness", or what I have long thought of as policy inertia.

That there is such a thing as policy inertia is clear from history or from observation of the world around us. An example of policy inertia is that, during the Pacific War, it was decided to base a Royal Navy task force at Singapore, Force Z. It was to be a fairly standard force of aircraft carrier (HMS Indomitable), battleship (HMS Prince of Wales), battlecruiser (HMS Repulse), and support ships (four destroyers). Unfortunately, HMS Indomitable ran aground in the Caribbean en route. Yet the deployment of the rest of the Task Force went ahead anyway. As a result, Force Z lacked naval air support and HMS Prince of Wales and HMS Repulse were sunk by Japanese aircraft off the coast of Malaysia. (Yes, Admiral Tom Phillips was a dill who did not believe in airpower and failed to call for the RAF air support that was fueled and waiting, but the lack of an aircraft carrier made Force Z much more exposed to air attack in the first place; Mediterranean experience being that even a small number of fighter aircraft could break up attacks on ships even if the attacking aircraft were also supported by fighters.) There was a good reason why an aircraft carrier had been originally assigned to a task force operating in such open waters and HMS Indomitable's mishap should have changed the deployment decision, but policy inertia kicked in.

Generally, changing a policy involves higher institutional transaction costs than keeping with the current policy. People have to come to a new agreement, orders have to be changed, new arrangements worked out, etc. If reputation or credibility effects operate, the costs rise further. If changing the decision involves increased uncertainty (e.g. because past experience provides little or no guidance), that raises costs again; further increasing the policy inertia.

Policy inertia (or policy stickiness, in economic jargon) is an observable tendency of organisations and, if one thinks about it, not a surprising one.

Indeed, a certain amount of price stickiness can be understood as being a form of policy inertia, not merely within the firm but also the signaling and other costs involved in communicating changes in existing arrangements with its customers/clients.

Taking it further, policy inertia is an institutional form of cognitive inertia; the tendency to continue with patterns of action or beliefs in an unconsidered fashion. There has to cognitive inertia, we simply do not have the time or cognitive capacity to continually re-assess every decision; so we use habits, routines and other cognitive shortcuts. Similarly, organisations would find it very costly to reconsider every decision all the time. Particularly when you consider the signaling costs to their own staff and other stakeholders and the problematic effect on expectations.

Of course, if you are a central bank and essentially a single decision (monetary policy) is your raison d'etre, then policy inertia is less acceptable. Alas, reputation affects are likely to be particularly strong (and, sadly, get worse the worse economic conditions get since the amount of avoidable economic misery your policy failures are causing mounts and so the greater the implied humiliation in changing policy).

Either way, policy inertia (or what we more broadly might call decision inertia) should be a feature of institutional and macro-economic analysis.

Rhetoric matters

US Presidents generally fulfill, or seek to fulfill, their campaign promises (via):

Michael Krukones in Promises and Performance: Presidential Campaigns as Policy Predictors (1984) established that about 75 percent of the promises made by presidents from Woodrow Wilson through Jimmy Carter were kept. In Presidents and Promises: From Campaign Pledge to Presidential Performance (1985), Jeff Fishel looked at campaigns from John F. Kennedy through Ronald Reagan. What he found was that presidents invariably attempt to carry out their promises; the main reason some pledges are not redeemed is congressional opposition, not presidential flip-flopping. Similarly, Gerald Pomper studied party platforms, and discovered that the promises parties made were consistent with their postelection agendas. More recent and smaller-scale papers have confirmed the main point: presidents’ agendas are clearly telegraphed in their campaigns.

Or, to put it another way, what Presidential candidates say as candidates is generally what you get as Presidents.

Sure, we remember broken political promises (generally, more than kept ones) but a President is generally going to do (or seek to do) as they promise. So, paying attention to what Presidential candidates say on the campaign trail is a very good idea.

Which is good news for democracy-as-voter-power. What candidates tell the voters is what they will (mostly) do if elected. The implicit contract with the voters (if you elect me I will do X) has genuine power. Indeed, a study of how members of Congress behave indicate just how much power:

What he has found is that representatives and senators see every election as a cycle that begins in the campaign, when they make promises to their constituents. Then, if they win, they interpret how those promises will constrain them once they’re in office. Once in Washington, Fenno’s politicians act with two things in mind: how their actions match the promises they’ve made in the previous campaign; and how they will be able to explain those actions when they return to their district. Representation “works,” then, because politicians are constantly aware that what they do in Washington will have to be explained to their constituents, and that it will have to be explained in terms of their original promises.

No wonder Americans generally like their local representative even as they dislike Congress. Their local representative is far more likely to try to do what they want than Congress as a whole.

The deeper question is why? Why are politicians from the President down so fixated on their political promises?

To which the simplest answer is: that there is an implicit contract, an exchange, a transaction, going on between candidate and voters. The exchange is votes-for-promises. In offering this exchange a politician faces various dangers: insufficient promise-credibility (insufficient, that is, to offer voters something worth their votes); misdirected promises (not what the voters want to be offered); misguided promises (not the consequences voters wanted when enacted). Acting as if promises matter signals credibility and so keeps the politician in the exchange-for-votes game.

And, since they are all in that game, it becomes a crucial currency with each other as well as the voters. They do promises trade-offs because that gives them win-wins--they give each other credibility. A clever politician offers specific promises so they can "horse-trade": they can help other politicians keep their promises without breaking their own. Which means politicians with congruent promises will tend to work together and those with contradictory promises will tend not to.

But they are not only signalling to voters, they are also signalling to their activists, staff and subordinates. This applies particularly strongly to Presidents, who have to signal to an entire Administration. The notion of "secret" channels of communication successfully hermetically sealed from public communication is deeply implausible (especially in such an open society as the US) and hardly any more functional, given the need to interact with other office-holders.

So, what you see is (mostly) what you get because the key communications are public. True, there is some talking in "code" (in phrases which resonate in particular ways with particular groups) but it is a "code" embedded in public speech. Rhetoric matters because it is crucial to the signalling that is so much the stuff of politics.

[Cross-posted at Critical Thinking Applied]

Signaling support

This is based on a comment I made here.


Xavier Marquez has a great post on the role of cult of personalities in signaling support for a dictator. The basic idea is that adhering to the cult of personality is a way to signal support by engaging in costly activity (public endorsement and engagement of overblown praise).

This is a very plausible, indeed powerful, analysis. There may also be a further element, one general to propaganda in totalitarian societies in particular: crowding out. Part of the purpose is to literally leave no public space for critical views. So, not only are you signaling support by the rituals of the cult of personality, it excludes alternatives.



In the original post, commenter AC offered the following:

Thought experiment: suppose that instead of a single dictator, there is an elite class, which has general control over most cultural organs and elite institutions but whose political ascendancy is somewhat tenuous. Like the dictator, it will want signals of loyalty (both for determining loyalties and because of general ingroup/outgroup dynamics.) But because it’s not a single dictator, the signal can’t just be “the Generalissimo is awesome.” Instead, the shibboleth would be particular statements, or articles of faith, that are known to be supported by the ruling class.


Of course, making the shibboleth a mathematical axiom would be pointless; if nothing else, non-loyal mathematicians would be misperceived as loyal elites. The signal must be costly. So the articles of faith must be faintly ridiculous; easily challengeable on the facts, so that only people really devoted would at first make those claims. (Of course they can’t be obviously false either, else the integrity of the ruling class would also be called into question.)

Like cults of personality, there is a ratchet effect. As the elite becomes more entrenched, the shibboleths, while never changing in form (too costly to coordinate), will ever increase in intensity and audaciousness. And the enforcement of the party line will be strongest in educational institutions where the future members of the elite class are trained. It would be considered a matter of proper education – like the finishing schools of old – when “politically incorrect” thoughts in these institutions are mercilessly squelched.

Continuing AC's analysis of political correctness, one notes the rhetorical viciousness with which people who are critical of said markers of virtue are often treated. The point being to preserve said markers as signs of virtue (which clearly they are not if merely contestable opinion: so having "wrong" opinions clearly has to be a character defect) as well as punishing, and seek to crowd out, dissent.

Continuing the extension of Xavier Marquez's original analysis, political correctness often involves overblown, or even contradictory, positions. (e.g. being in favour of high migration while being against new dams, power stations or releasing land for housing). Such signaling virtue by adherence to one-sided, overblown or even contradictory positions works in a similar way to the way cults of personalities work in Xavier Marquez’s analysis: by taking on the implicit cost one signals one’s membership of “Club Virtue”. Taking on AC’s point, it is also why one gets particularly intense forms of political correctness in certain milieus (e.g. academic departments). Not only is more effort, more cost, have to be taken on to differentiate and so to signal one’s virtue, the lack of internal challenge allows various considerations to be ignored: hence the intensifying effect.

So, instead of status through conspicuous consumption, you get status through conspicuous compassion or other forms of conspicuous virtue. It is not what one spends in money which counts, but what one accepts and undertakes in cognitive intensity: including willingness to discount contrary evidence and disparage those who offer it or otherwise have contrary perspectives.

(Partly related, Arnold Kling offers a comparison of two status systems -- it is obvious which one would be more prone to the above pattern.)

Why do the poor remain with us?

Norman Geras raises a point that recurs in his commentary in his excellent blog:

but what a mark against the world's wealthiest countries that there remains in them such a category of people - the poor - who can be spoken about in this way. These are societies fat, bulging, overflowing, with stuff; oozing personal wealth, economic crisis notwithstanding; and they are yet to provide all their citizens with a standard of material well-being such that no one would any longer need to be referred to as the poor but might enjoy, even as unequals, the advantage both of a more comfortable state and a more dignified style of description.

An obvious response is that, by the standards of history and of much of the globe, the people referred to as ‘the poor’ in developed democracies are not poor. [This point is made very powerfully via a graph here.] They have life expectancies, security of food and shelter and rates of possession of consumer durables that mark them out as among the blessed of history. Indeed, as Michael Cox and Richard Alm point out in their Myths Of Rich And Poor: Why We're Better Off Than We Think, poor people in the US in the mid-90s had an average level of possession of consumer durables that would have marked them off as middle class in the early 1970s. [This point is expressed graphically here.]

But, by the standards of their own societies, they are poor, even if poor means “middle class two or so decades ago”. So, why do we have a persistent category of people who lag behind the general prosperity?

Well, for no single reason. As Norman Geras intimates, it is not a matter of how productive the society is, as used to be the case when poverty was the general human condition. There have been sharp drops in the general level of poverty in Western societies over time. Which is another way of saying that developed societies have been great engines of mass prosperity: that is what makes them “developed societies”. But these drops in poverty rates slowed and then stopped: for example, the proportion of people in poverty in the US dropped steadily, even dramatically, during the postwar boom until the mid 1960s and has been stubbornly persistent ever since. Rather discouragingly, the apparent ending of mass exit from poverty coincided with increased government effort against war on poverty: the US “war on poverty” has been about as successful as the “war on drugs”. But similar patterns can be discerned in other developed societies.

Indeed, one way to put the question is “why has poverty persisted despite massive expansions in the welfare state?” The question is not often put like this, but it is a very reasonable question to ask, on the evidence. After all, the welfare state is a century or more old: the failure of eliminate poverty is a reasonable criteria to evaluate it by, particularly given its massive expansion from the 1960s onwards. (It can hardly be the fault of “capitalism”, as its success in generating unprecedented and steadily increasing mass prosperity is what has made the elimination of poverty a remotely plausible goal in the first place. Indeed, the first post-classical public welfare measures – Venetian public health measures, English poor law provisions – grew up in the most commercial societies in part precisely because they were the richest societies.)

One answer to the persistence of poverty might be: because of the expansion of the welfare state. After all, the great mass exits from poverty clearly were not products of the welfare state: they were the result of massive expansion in productive capacities. The welfare state needs clients: if there are no poor people, then there are no poor people to be clients. Milton Friedman pointed out that, if one took the entire expenditure on anti-poverty programs and divided it by the number of poor Americans, there would be no poor Americans. Clearly, employing people in secure jobs with good pensions in welfare bureaucracies, and the transferring of funds to people who are not poor, take up a considerable amount of welfare resources and generate a considerable number of beneficiaries: beneficiaries who might be of some risk of losing said benefits if poverty was abolished.

So, waste and failure in welfare might be one reason for the persistence of poverty. Particularly if such retards economic growth – given why the mass exits from poverty have occurred – by, for example, reducing the level of productive investment.

Or it might be due to welfare subsidising unfortunate patterns of behaviour. The richer the society, the less absolute the penalties for destructive behaviour patterns tend to be, but they still exist. One of the effects of welfare can be to soften the effects of folly (or, to be less blunt, lessen the penalty for patterns of behaviour not conducive to increased income). People can get away more with clinging to leisure preferences, instant gratification preferences or familiar attitudes and patterns of behaviour which are not conducive to good incomes. (And the behaviour of parents may well have effects on the prospects of their children.) If there is a bell-curve of income-producing behaviour, then there will always be a tail end. The richer the society, the better off the tail-end will tend to be. But they will still be the tail-end.

In the US, if one completes high school, get and stays married, get and stays employed (even starting at a minimum wage job) and avoids becoming involved in crime, one’s chances of staying poor are small.

We also get into some stubborn persistences here. Consider that, in the US, students of Asian ethnic backgrounds do far more homework, on average, than do black students. If lifetime income prospects are connected to educational achievement (as they are) and educational achievement is connected to student effort (as it is) then we can reasonably predict that poverty will be more common among black Americans than Asian-Americans on that one indicator alone (as it is).
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So, what can we do about this? If doing less homework leads to higher rates of poverty, does poverty lead to doing less homework? No, but the patterns of behaviour and outlooks which lead to poverty (for example, by discouraging scholastic effort) may do so. A society where human capital is important, and increasingly important, has limited ability to get specific groups to value the acquisition of human capital. But, if they fail to do so, they will have higher rates of poverty. So poverty will persist due to a failure to take advantages of the opportunities available (with some depressive effect on the general productivity of the society, since the level of human capital will be lower than it otherwise would be).

Moreover, how good is the welfare system likely to be at putting itself out of business by encouraging patterns of behaviour that lead to exiting from poverty? Noting that, to the extent that a social system can be said to have “an interest”, poverty is not in the interest of “capitalism” – there is far more profit to be made from selling to rich consumers than poor ones. More precisely, the logic of capitalism has clearly been to generate mass prosperity, since capitalism is the best system ever developed for creating and using capital (the produced means of production) and the more capital, the more production, the more prosperity, the less poverty.

The welfare system can also create barriers to exit from it. Public housing can “trap” people in high unemployment areas, as to move is to lose one’s eligibility. The very high effective marginal tax rates that beneficiaries face (from their benefits reducing, and taxes increasing, as they earn more money) also constitute a barrier to exiting from poverty. But such are expensive to fix and tend to keep the level of clients for the welfare system higher, so there is little incentive from within the system to push for reform.

There are also some forms of poverty that simply are not much of a concern. That university students have low incomes in their 20s is not a concern if they end up being high-earning professionals in their 40s. Indeed, as Cox and Alm point out, the increased participation in higher education is a major reason for increased income inequality – we can tell this, because the slope of “life cycle” income changes (i.e. average income by age group) has become much steeper than it used to be.

So, given the increased participation in higher education, something that also took off in the 1960s, some of the persistence in poverty is a life-cycle effect.

Some of the persistence of poverty is a “recent entry” effect. New migrants, lacking skills and entre into various networks, will tend to start off with low incomes. Increased low-skill migration will also tend to lead to persistence in poverty rates, particularly if there is an increase in the importance of human capital in an economy. It is likely that the children and grandchildren of new migrants will not live in poverty, but if the flow-in is constantly replenished, then the poor are being replenished.

And, of course, if migration to a developed democracy becomes a guarantee that one will not be poor, the incentive to migrate will be greatly increased. Milton Friedman famously argued that the welfare state was incompatible with open borders: certainly the welfare state is likely to increase the resentment of migrants if people believe they are paying for people whose arrival they had no say in.

The low-skill migrant point interconnects with the educational point. It is clear that the Anglosphere is better at attracting productive migrants than much of Europe (and, apparently, my own country of Australia is the very best at cherry-picking its migrants).

But that second-generation male Muslim migrants in Europe are “going backwards” in their economic participation points to another difficulty – barriers to economic participation. Some of these can arise from the behaviour of those with lower levels of economic participation (e.g. the lower levels of homework among black American students). Others can flow from regulation or other institutional factors.

Regulation has a persistent tendency to protect the interest of incumbents: this is particularly true in land use regulation and labour regulation: unfair dismissal laws, for example, protect incumbents against new entrants to labour markets (since they raise the risk of employing new people, particularly for small businesses). Faced with increased risks in employing new staff created by such regulations which is not compensated for by increased productivity, businesses respond by cutting back on hiring, relying more on certification and on “vouching for” networks, became more reluctant to deal with differences that might get in the way of communication (i.e. the transaction costs of cultural differences) and so on. If migrant Muslim males put less effort into school and so are less certificated, are more likely to “have attitude” (or are believed to be so), are less plugged into networks, have less skills then they will be disproportionately excluded by such regulation. Though young people generally suffer from such “protect incumbent” laws.

The problem of persistence of attitudes not conducive to exit from poverty are not only a matter for the poor, they can be attitudes among the better connected as well. Labour market regulation penalising the more marginal in the labour market, land use regulation driving up rents and housing prices by restricting the supply of land for housing are not created or justified by the poor, and certainly do not benefit them, but do disproportionately penalise them.

The capacity for “progressives” (or, as former Labor Senator John Black puts it [pdf] the inner city rich, the code word for which is apparently, ‘progressive’) to romanticise green fields (which are every bit as much human creations as any suburb, and may well have less biodiversity), thereby driving up the value of their inner city properties by restricting the supply of land able to be used for housing, and to frame labour market regulation as “protecting workers” (as, indeed it does: it protects incumbent workers against competition from marginal workers) does its bit to increase barriers to economic participation and so to the persistence of poverty.

Add all these factors together and the elimination of poverty – that is, of a category of “middle class minus two or so decades” – becomes difficult, to say the least.

So, is it a “mark against the world’s wealthiest countries”? Well yes, though not as much as it may seem at first blush and those who are most likely to hold it so are often very much part of the problem.

Or, to put it another way, the sort of mushy, self-satisfied reasoning that Norman Geras likes to berate Guardianistas for in international affairs has its domestic equivalents. There is even some suggestive social science research (pdf) that implies that conservatives signal competence while progressives signal trust: hence the importance to the latter of policy positions which allow one to signal one’s good intentions (and conservative contempt for any disastrous consequences, which the liberals deride as being unfeeling or otherwise lacking in virtue).

Indeed, we observe people who not that many years ago would have been nodding along to descriptions of science as a “patriarchal Western discourse”, not worthy of any privileging, now holding the results of climate science as absolutely authoritative: attitudes to science clearly being subordinated to the commitment to signalling virtuous intentions. But embracing of such serial, or even concurrent, contradiction actually improves the capacity to signal that one’s priority is membership of the club of the ostentatiously virtuous.

If we allow actions to have income consequences (since that promotes productive behaviour) but not negative ones (since that can lead to poverty), stop low-skill migration, ensure that the welfare system promotes independence and not dependence (even at the risk of losing its client base) but otherwise pays those who cannot be independent enough not to be poor, only permit students in higher education who won’t be on low incomes while they are studying and eliminate regulations and other institutional factors that are barriers to economic participation (which will require neutering the “progressive” intelligentsia having any effective capacity to frame public debate so as to block such changes), we in developed countries can have “tail ends” which are not poor by the standards of our societies.

Good luck with that.

Still, the good news is that we could do better: the bad news is that we probably won’t (beyond general increases in productivity).

The pill and Church attendance

In Lois McMaster Bujold’s Vorkosigan saga books, a contrast is drawn between the very technologically advanced (and sexually free) Beta Colony and the technologically backward, highly socially controlled, Barrayar. On Beta, people have complete sexual freedom, though there is very strong social pressure to wear the appropriate ear-rings to signal one’s sexual and relationship status. There is, however, complete control over reproduction: people can only reproduce if they have a license to do so. Their technology allows them to separate control over ovaries from control over the body the ovaries are in.

Barrayar had previously suffered a drastic drop in its technology and so in its standard of living. The result was that they could only control reproduction by controlling the whole body, leading to a very restrictive set of sexual and gender mores familiar to us as “traditional social values”. In a poor society, women have an interest in making sure that they are not stuck with raising children on their own. Hence pressures to confine sex within marriage (or intention to marry) and for men to accept responsibility for the baby-results of their sexual activity.

One way for women to signal to men that sex involves sharing responsibility for child-rearing is to attend public gatherings where such sexual and gender mores are strongly endorsed. We call such places ‘churches’. (Or ‘synagogues’ or ‘mosques’.)

Then along comes the contraceptive pill. Suddenly, women have a high degree of unilateral control over their fertility. Technology has separated control over ovaries from control over the whole body.

Moreover, this is in societies of greatly increased prosperity: societies where upper body strength no longer had a general social premium (whether in providing protection, or in employment). Societies where the risks of dying in childbirth have massively decreased, so that the expected return on investing in educating women has increased. The combined result was that having a child became much less risky activity for one’s health and single parenthood became much less of a disaster for one’s income.

So the benefits to women of signalling one’s adherence to very controlled sexual and gender mores massively dropped. (The benefits to men of such signalling also dropped: indeed, largely disappeared.)

Worse than that, going to church involved listening to men preaching about how women should not control their own bodies in such a way.

In such a situation what would one predict?

A steep drop in Church attendance: particularly by younger women (and men).

As this review of a book on the pill notes, the contraceptive pill was a case of technology with unintended consequences.
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But, viewed in this light, one feature of the pill becomes much more understandable:

In one of America and the Pill's most interesting chapters, May asks whether men would tolerate the sorts of side effects that women have regularly experienced. The prospect of a male pill has appeared on the horizon various times over the last 50 years, but the issue of side effects scuttled every effort. Scientists, May reports, "actually discovered an effective vaccine that completely stopped the production of sperm without interfering with sex drive." But it also made users' testicles shrink by a third, so the researchers abandoned it, concluding, "The psychological trauma of shrinking testes just cannot be overcome."

Of course not, because there is nothing to do with reproduction that offers men anywhere near the advantages that the pill offered women. As the review notes:

Yet for all this, as May demonstrates, the pill has been a tremendous boon for women, transforming sex and reproduction so thoroughly that it's hard for many to imagine what life was like before it. …

We have to be careful not to engage in too much technological triumphalism, however. This was technology in particular social contexts:

After all, the pill is widely available in Saudi Arabia, but it hasn't made a dent in that country's brutal patriarchy.

Technology is not magical, it remains embedded in human action, human institutions and human cultures. Its possibilities may shape human action, institutions and cultures but it can also be constrained and directed by those actions, institutions and cultures.

In Muslim societies and communities, enforcement of sexual and gender mores tends to be much more active—up to and including violence. Attending the mosque, wearing approved clothing, becomes a way of avoiding sanctions rather than signaling expectations. Hence much higher rates of mosque attendance continuing after the introduction of the pill.

Nevertheless, it is hard to disagree that the impact of the pill in Western cultures was one of:

… social maelstroms that made the pill so significant. The millions of women who … have used the pill to slip the bonds of biology, turning childbearing from an obligation into an option, have utterly reshaped our ideas about sex, marriage, and family.

Which was a major problem for Churches who saw themselves as uttering eternal verities, rather than manifesting evolved social mores anchored in social presumptions whose foundations had been transformed.

But which churches would we predict would handle the change best? Established monopolies (as in Europe) or churches used to religious competition (as in the US)? Clearly, those used to religious competition. Or which can only operate through it—for example, emerging churches such as Pentecostalism.

It is a dangerous foolishness, to infer from the failure of sluggish monopoly Churches of the Europe to deal with dramatic social change based on a new technology, particularly a technology that changed incentives for women—so Churches run by men (in the Catholic Church’s case, celibate unmarried childless men) were particularly likely to be “blindsided”—to some grand social theory about “inevitable tendencies” in social development. The religious impulse is a powerful one, and can find new vehicles to manifest. As, indeed, it is.

But we should always keep in mind the signaling role of norms and how changing what people want to signal will change those norms.

ADDENDA Mary Eberstadt's piece Christanity Lite pointing out that Churches which relax traditional Christian sexual strictures experience declining membership in effect looks at the issue the other way: lessening the signaling value of church attendance discourages church attendance—but that value that can be lessened from within as well as without. Another essay of hers connects secularisation to declining fertility.