Summaries of Important Research
Edited By Iain Murray

Less Marriage, More Poverty
Kay Hymowitz, “Marriage and Caste: America’s Chief Source of Inequality?” City Journal, Winter 2006 (city-journal.org)

After analyzing data on family structure, Kay Hymowitz of City Journal concludes that different attitudes toward marriage are a key factor separating the rich from the poor.

Statistics show that starting in the 1960s, women of all educational levels divorced, separated, and bore children out of wedlock at increasing rates. Then after 1980, the divorce rate of the growth in their rate of illegitimacy slowed substantially. This has led to a marriage gap, with educated women mostly maintaining traditional families, and less well-educated women more likely to be single parents.

In 2000, about 10 percent of mothers with a college degree or higher were living without a husband, compared to 36 percent for non-college graduates.

The economic impact of this is significant. Only 6 percent of the nation’s married families live below the poverty line, and most of those are recent immigrants who move out of poverty quickly. Among female-headed households, fully 36 percent live below the poverty line.

Hymowitz notes that, “The results radically split the experiences of children.” She then asks why lower-income women fail to marry, while women with sufficient resources marry anyway. She dispenses with the notion that there’s a shortage of marriageable men among the less educated. Plenty of women do find men, and marriage rates are hardly better among men with stable jobs. Her answer? Interest in, and commitment to, marriage has crumbled at the bottom of American society.

Hymowitz is concerned this will perpetuate social divisions. “Instead of an opportunity-rich country for all, the Marriage Gap threatens us with a rigid caste society.... When Americans announced that marriage before childbearing was optional, low-income women...lost a traditional arrangement...needed for upward mobility.”

Captain, My Captain
Nigel Aylwin-Foster, “Changing the Army for Counterinsurgency Operations,” Military Review, November-December 2005 (leavenworth.army.mil)

Although the U.S. Army is an acknowledged master of conventional war, it isn’t as adept at tying up loose ends when a conventional war ends. Nigel Aylwin-Foster, a brigadier in the British army who served in Iraq for a year, argues that the Army failed to “exploit success immediately after the fall of Saddam,” and was too slow to adapt to changed conditions.

He’s especially critical of the bureaucratization of the Army during the years following the first Gulf War, which resulted in an “exodus of the captains.” By 2000, the Army could fill just over half of its positions slotted for experienced captains. One result: Prior to 1994, the average “pin-on” time to captain was 54 months; by 2002, this dropped to 38 months, a sign that inexperienced officers were being promoted into demanding posts.

Why did these young officers leave? Aylwin-Foster suspects a “zero-defects” culture, whereby officers took the full blame for their unit’s mistakes, was part of it. And as younger officers had to be pushed up to fill the ranks, superior officers came to trust their subordinates less, thus relying even more on the zero-defects culture.

Counterinsurgency expert John Nagl writes that, “The American Army’s role from its very origins was the eradication of threats to national survival,” while the British army was more a tool for diplomacy—“an instrument of limited war, designed to achieve limited goals at limited cost.” The U.S. Army has continued to emphasize the destruction of an enemy rather than his defeat. Yet destruction isn’t as feasible in counterinsurgency operations as in conventional warfare. The U.S. Army needs to recognize that there will be wars where a different goal will be needed, and that human talent, not technology, may be the key to adaptability.

Indian Summer
Arvind Panagariya, “The Triumph of India’s Market Reforms: The Record of the 1980s and 1990s,” Cato Institute Policy Analysis # 554, 2005 (cato.org)

Will China or India be the dominant Asian economy in the years ahead? India’s annual growth rate since 1992 has averaged 6.1 percent. Arvind Panagariya of Columbia University attributes this growth to India’s market liberalization, including tariff reductions, liberalization of import regulations, export incentives, relaxation of industrial controls, and a more realistic exchange rate. But industry remains over-regulated, so that growth in the manufacturing sector of the economy has actually slowed since the ’80s.

Panagariya concludes that if India is to catch China, it must liberate conventional industry: “Bring all tariffs down to 10 percent or less, abolish the small-scale industries reservation, institute an exit policy and bankruptcy laws, and privatize all public-sector undertakings.”

Dollar Billed
John Makin, “Why the Dollar Is Rising—Again,” AEI Economic Outlook, December 2005 (aei.org)

According to AEI visiting scholar John Makin, “the dollar, like a Republican President...faces incessant predictions of imminent collapse, but in the end it wins out over weaker alternatives.” Makin notes that the dollar’s value has risen by more than 14 percent over the past year. Against its major competitors—the yen and the euro—the rise is by 17 and 16 percent, respectively.

Assessments of a currency rest on several factors, including the performance of the issuing country’s economy, and the credibility of its central bank. Today, only three currencies are capable of acting as this global store of value— the dollar, the euro, and the yen.

The U.S. has persistently outgrown Japan and “Euroland.” Also, the heavy tax load that increases prices in Japan and Euroland doesn’t drag down the U.S. economy, and investors looking for inflation-protected returns consistently earn higher yields in America.

The U.S. has an even stronger advantage in its central bank. The Federal Reserve has successfully pursued stable growth and low inflation for many years, and the transition from Alan Greenspan to Ben Bernanke is likely to be smooth. But the European Central Bank has wildly differing economies under its guidance, with independent economic ministries ready to exploit the differences for their own gain.

Looking east, the nominally independent Bank of Japan is currently in a dispute with the ruling Liberal Democratic Party, which suggested last November that the Bank’s independence may need to be curbed. If the Bank responds to the Japanese economic recovery by favoring the government bond market as savers look elsewhere, inflation will result.

What’s more, neither Japan nor Euro-land want to see a weaker dollar, because it would decrease their exports. Investors who bet against the dollar, Makin concludes, may be in for a shock.

Private Funding Best for Science
Arthur Diamond, “Relative Success of Private Funders and Government Funders in Funding Important Science,” European Journal of Law and Economics, forthcoming (cba.unomaha.edu)

Since Truman, much of America’s basic scientific research has been financed by public funds. Counting the number of bibliographic citations listed in scientific articles, Arthur Diamond of the University of Nebraska at Omaha used regression analysis to test the effects of funding sources on the importance of scientific research.

Two different measures produced the same finding: Private funders are more successful than government at identifying and sponsoring important research.