Integrity boosts productivity

Kevin Drum, RIP

[I originally wrote this a month ago, and got distracted by tariff news.]

I was sad to see that Kevin Drum recently passed away. I never met him in person, despite the fact that we both lived in Orange County. He will be missed.

Many commenters have noted that Kevin had a very high level of integrity. You might disagree with his policy views, but you could never doubt his sincerity. In this post, I’ll argue that integrity is an underrated factor in explaining productivity.

Consider the following headline from a Kevin Drum post on the lab leak issue:

I read the entire Slack archive about the origin of SARS-CoV-2. There is no evidence of improper behavior.

A number of pundits suggested that a certain 140-page Slack archive showed that scientists were intentionally covering up the lab leak hypothesis for the origin of Covid-19. I really, really, really didn’t want to have to waste my time reading this long archive to evaluate these claims. Fortunately, Kevin was one of the few pundits that I felt I could rely on to present an honest assessment of this sort of information. That doesn’t necessarily mean he was correct in this case—a lab leak is still a possibility—but at least I now know that there was nothing egregiously corrupt in this set of communications between virologists. I trust him.

His post won’t show up in the GDP data, but it did save me a lot of time.

There is no doubt that GDP data provides useful information, and allows us to make meaningful comparisons between countries. But the data is not perfect, as GDP doesn’t fully capture the impact of integrity on product quality.

Last year, I spent a few weeks in Japan, and noticed that many products were of far higher quality than in the US. In nominal terms, a 7-11 store in the US might have higher sales than an equal size 7-11 in Japan. But the quality in Japan is so much higher they might as well be on a different planet. And it’s not just me—here’s Bloomberg:

The shop is well lit; the floor, pristine. The welcoming aroma of freshly fried chicken and steamed pork buns wafts through the air. Customers pop in to snag on-the-go comfort foods such as savory onigiri and creamy egg salad on squishy white bread. It’s a scene that plays out hundreds of times a day at more than 21,000 7-Eleven locations across Japan, where the convenience stores inspire almost cultlike loyalty. . . .

So far, owner Seven & i Holdings Co. hasn’t been able to replicate that success at its 13,000 US and Canadian stores, better known for their constantly rolling hot dogs and 30-ounce soft drinks than their fresh food or their ability to inspire effusive posts from social media influencers.

The same is true of subways, intercity rail, and many other services. That doesn’t mean Japan’s per capita GDP is higher than that of the US, but the actual gap is surely smaller than suggested by the reported figures. I attribute the higher levels of quality in Japan to higher worker integrity. They take more pride in their work.

Back in 2008, I did a paper on neoliberalism entitled The Great Danes, which began with a quotation:

“Virtually every commercial transaction has within itself an element of trust . . . It can be plausibly argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence.” (Kenneth Arrow, Gifts and Exchanges, Philosophy and Public Affairs, 1972, p. 357.)

Followed by this opening paragraph:

I don’t know whether Arrow is correct, but the following anecdote might help to illustrate the concept that Arrow had in mind. While traveling in Northern Michigan this summer I noticed farm stands by the edge of the road selling cherries. Often, no salesperson was present. One simply placed a five-dollar bill in a small metal box, and drove away with a quart of cherries. This system makes one realize the enormous waste of labor resources involved in someone waiting by the roadside for motorists to stop and purchase cherries, and may be one reason why high-trust societies tend to be relatively prosperous.

Recall the recent post where I discussed the Zhejiang economic model. I quoted from a Sixth Tone article, which mentioned several factors that contributed to the success of Zhejiang province, including “strong norms around things like contracts”. Unfortunately, there are many places where contracts are not sufficiently respected, including some parts of China. Lack of trust results in lower productivity.

Academic research is another area where integrity is important. When I first wrote this post, I used ”honesty” rather than “integrity” in the title. But integrity is more than just refraining from lying. It also means avoiding P-hacking, and being careful to avoid errors caused by sloppiness. And as with GDP, measured research output doesn’t fully capture the value of good research.

In my view, the field of academia has become excessively bureaucratic, relying too much on easily measurable metrics like the quantity of publications. Unfortunately, this encourages academics to become more corrupt in order to increase publication output. To some academics, publishing is just a game—get as many “pubs” as possible. But the value of that research is often zero, or even negative, as evidenced by the replication crisis in many sciences.

Politics is another field where integrity is declining. Some people argue that politics has always been corrupt. Maybe so, but it is still possible to draw useful distinctions. For instance, here are a few claims that I’d defend:

In the US, state and local politics has become less corrupt.

In the US, national politics is becoming more corrupt.

Politics in the UK is less corrupt than in the US.

As far as national politics, a few anecdotes might be instructive. When our U-2 spy plane was shot down over Russia in 1960, the denial came from lower level officials, not Eisenhower himself. That’s not to deny that Eisenhower was behind the cover-up, but it was viewed as unacceptable for a US president to be caught in a bald-faced lie. So his aides issued the denial.

When the Watergate tapes were released, the public was shocked to learn that Nixon had lied directly to the American people. This sealed Nixon’s fate.

I now see people claiming that Nixon was a victim of “lawfare”. This is nonsense—he was certainly guilty. But I do understand why people might make that claim. By today’s standards, Nixon was not particularly corrupt. What’s changed is the minimum acceptable standard of behavior in politics, especially national politics. At the time, both Democrats and Republicans found Nixon’s behavior to be completely unacceptable. He was forced to resign despite recently have been elected in a landslide where he carried 49 states—a level of popularity that a modern president couldn’t even dream of.

There are many more such examples. Cabinet nominees were often turned down for problems that today would be viewed as trivial. John Tower was rejected for Secretary of Defense due to a mild drinking problem. Bill Clinton had two nominees for Attorney General rejected due to minor tax issues. I’m not suggesting that all of these decisions were appropriate, just that the standards have clearly changed. The bar for high office is now far lower. When Trump nominees testify before Congress they frequently mislead, and no one bats an eye. If you were to complain that a recent president had engaged in a lie, people would roll their eyes and respond, “LOL, all politicians are like that.”

But is it actually true that all politicians are corrupt? In the UK, political platforms are actually taken seriously. That doesn’t mean that every single item is enacted as promised, but there is an expectation that the platform represents a serious policy agenda. In America, no one takes party platforms seriously. Remember Project 2025? Candidates weave back and forth on the issues from one week to the next.

Here’s my prediction. The gradual loss of integrity in American politics will eventually begin impacting American policymaking. That doesn’t mean we will immediately become as dysfunctional as Venezuela, but the corrosive effects will result in increasingly dysfunctional policies. Policy is downstream of culture.

The media is another area where there has been a sharp decline in integrity. Today, it is still possible to find respectable news sources, but a significant share of the American public now get their information from crude propaganda mills on cable TV and/or the internet. As the public becomes less well informed, there are progressively fewer checks on the behavior of politicians.

Politics, the media and science are all becoming increasingly corrupt. People in fields such as law and business are increasingly fearful of speaking out against the government. As people lose trust in these institutions, the public gradually becomes less well informed. That leads to a further decline in integrity, as bad actors are more difficult to expose. Policy gets worse over time. Rinse and repeat.

Where will it all end? One possibility is that at some point the consequences of the decline in integrity will become so extreme that there will be a sort of backlash, analogous to what happened to Germany and Japan after WWII. Integrity might come back in style.

Another possibility is that we will be rescued by AI. Artificial intelligence might prove to have much more integrity than human beings. As human labor is replaced by machine labor, the integrity of “workers” may improve.