3 stars

Killing the idea that communal action can solve social problems

A famous Orwell quote that crossed my facebook feed:

Whether the British ruling class are wicked or merely stupid is one of the most difficult questions of our time, and at certain moments a very important question.

This 'wicked or stupid' question has been on my mind a lot recently, so it was striking to see exactly the same thought from eighty or so years back. It's the Tories I'm referring to, of course. Caveat: there are many, many decent tory voters out there - good people all. And many decent Tories in politics even. But the bunch actually doing the ruling? Well.

There are plenty of examples to choose from to characterise our current rulers, but let's start with the recent secretive push to scrap what remains of grants for the poorest university students.

If you google 'lifetime earnings university degree', the first thing that comes up is a report from 2013, funded by the Government's own Department for Business, Innovation and Skills. (Copy here if the official link goes AWOL).

It makes clear the massive benefit of a university education for the person getting it - but also how much benefit is gained by government. I mean, the principle's obvious, right? Someone who earns more over their lifetime will pay more tax. If they end up paying more tax than it cost to educate them, there's a net benefit to the country. The word often used for this, I believe, is 'investment'. I've included the key table - this study has a breakdown by type of student, too, so we can see the gain for individual students who'd be getting the bursaries ('e', at the bottom), as well as the gain to government. The study finds a net government gain of 246 thousand from men and 300 thousand from women.

Even if those numbers were a quarter of this or less, there'd be a net gain for government. For every single student lost who decides they can't afford university any more, government coffers lose out too. Osborne claims these grants are unaffordable - that clearly makes zero sense. Ditto his point about "a basic unfairness in asking taxpayers to fund grants for people who are likely to earn a lot more than them". Taxpayers will gain, not lose out.

And that's before all the gains for the individuals themselves - in earnings and life satisfaction - as well as the increase in education levels for the country as a whole, where there's basic economics telling us the spillover gains over time for everyone.

But this is missing the point, I think - and this is why I think they're cruel, not stupid. It appears stupid only if one assumes they have the same frame of reference. They don't, not at all. No amount of logical argument on the costs and benefits will affect this government's aims. Yes, they use this language of unfairness to taxpayers, but this is little more than effective PR (which is Cameron's background, let's not forget). Flak to cover them in pursuit of the main prize.

The sell-off of housing association properties paid for by selling-off council houses shows the same aim. Housing associations are some of the last living examples of solving social problems communally. The fact that they're actually privately owned makes no difference to that.

So it's not simply a matter of shrinking the state. They actually want to kill the idea that communal action can solve social problems. A smaller state is a consequence of that belief, not a cause - which is why framing student support as an investment would make absolutely no moral or logical sense to this government. They don't see there's anything to invest in.

The NHS will go last, unless something changes. It's their biggest political goal and one that will require all of their PR know-how. They can't quite let the wolves out of the door yet - they know the political ground isn't prepared. But they're very good at this game and blithely content to use whatever bullshit argument will get them to their atomised oligarch utopia.

Hmm. That's interesting. Turns out I'm a bit cross about this.
New year's earnestness 3/17 , just.

How to avoid comparing rich and poor

Reading Mark Blaug on Pareto efficiency was a lightbulb moment. As he says, Pareto's idea was a 'watershed moment' in arguments about utility. From a distance, the outcome can seem pretty meaningless but it's an important political fork in the road - and one that shines a light on how the abstractions of economic theory get tangled with power politics. There's a story about Pareto himself to be told, too - I'm not going into that. This is about where his idea went after that.

Benthamite utilitarianism hadn't been going badly. But it was premised on the idea that different people's well-being could be compared - after all, there's no other way of knowing if you're increasing or decreasing the general welfare.

This seemed intuitively straightforward at the time. But, perhaps as the study of utility as an economic concept developed, that began to change. Attempts to actually track down a scientific measurement of people's utility got underway. Folks got upset about the obvious problems in trying to define what utility really was.

Pareto offered a way out of this. I'd known the concept before but not understood its significance until reading Blaug. Pareto efficiency: you've reached an optimal state when it's not possible to make anyone better off without making someone else worse off. Sounds innocuous enough. But notice that it sidesteps comparability. As Blaug says:

"The beauty of Pareto’s definition of a welfare maximum was precisely that it defined the optimum as one which meets with unanimous approval because it does not involve conflicting welfare changes."

It rules out the possibility that one could -

" - evaluate changes in welfare that do make some people better off but also make other people worse off" (Blaug / economic theory in retrospect/ 1997 p.573-4).

So it can say absolutely nothing about inequality. Or rather, it implicitly says that it doesn't matter: you cannot, for example, assess whether taking money from one person and giving it to someone else will improve welfare overall. Bentham schmentham.

Pareto optimality, unsurprisingly, became very popular and is essential to most general equilibrium models. I don't understand those - I'm only familiar with Krugman's spatial GE stuff, which is not the same (they're driven by explicit utility differences across space). But I'm not surprised models that, by default, exclude inter-personal comparisons should form the inner sanctum of modern economics. A model that can, by design, exclude any discussion of redistribution was always going to thrive.

Which is not to say there aren't plenty of approaches that do analyse the differences between rich and poor. But... and I'm not on solid ground with this point at all... the kind of economics that sits in rooms with ruling elites don't generally use those.

I want to make two little points about this. The first comes from having actually used utility as a concept in my modelling work and found it extremely valuable. I spent far too long listening to the siren-calls of agent modellers telling me to go towards 'realism', then in the process of slowly solving my problems, realising I had ended up back at basic micro-economics.

So first: if you're going to use utility at all, you'd better accept it's a silly idea that lets you do useful things. People are not actually utility maximisers, but the concept is a superbly effective way of thinking about how people react to cost changes in certain situations. (This is all very Friedman [pdf].)

So all that pursuit of the actual foundations of utility in our meat-brains is, somewhat, beside the point. Given that, we should use the idea in ways that are useful. Ruling out utility comparisons is just a little bit too convenient a result, politically. There isn't really any reason to, and the angst about utility's epistemological status makes about as much sense as rejecting traffic models because they don't use gravity equations. (Er, at least I think they don't...)

Second, one of the most powerful ideas that utility gives us is diminishing returns. It's easy to forget how much of a puzzle this was - the whole water/diamond problem thing. It should be blatantly obvious to anyone who thinks for a few seconds that money itself has diminishing returns. Say a 7% drop in income forces your family to eat less well and you to have to skip meals sometimes. It shouldn't be beyond our economic theory to see this as more severe than having to compromise on the Land Rover you had your eye on by buying a Mondeo.

This is kind of paragraph that sets the flying monkeys off, though. Particularly since the 2008 crash, particularly in the UK - the story that's been slowly pushed through all media channels is solidifying into political reality: such talk is the politics of envy, rather than - as it actually is - a perfectly sensible way to think about wealth.

These days I generally end up thinking "it's all about the middle way". The same applies here - effective economic comparability could imply deep intrusion in people's lives, the state charged with measuring and judging what forms of spending were more worthy than others, creating a kind of state-sanctioned Maslow hierarchy. But it doesn't need to - if one is capable of accepting the basic premise that severe poverty makes people's valuation of money much higher than for richer folk, it just implies the need for policies that reduce inequality.

And there isn't necessarily anything wrong with Pareto efficiency. The problem here is what happens when powerful abstract ideas interact with powerful political forces. Things get warped to Wizard of Oz proportions. Other perfectly sensible ideas can't get their shoe in the door. But it's foolish to use Pareto efficiency to exclude distribution thinking, just as it would be idiotic to ban its use because it was too right-wing.

I wouldn't want to live in a world where political schools had their own paid-for economic theorists. I do still believe in the pursuit of actual social-scientific truths. But Pareto efficiency is one of those ideas that hammers home just how hard it is to pull economics and politics apart.

The point: as far as possible, your economic/mathematical models shouldn't rule out one particular political way of thinking. The choice of how we balance wealth in society - that's a political issue. There's no easy way to keep an unbreachable line between positive and normative - modelling methods will always interact with our political assumptions and power structures in sometimes very-hard-to-see ways. And I also believe in the power of quant modelling to help us understand which things may not work if pursuing certain political aims. But modelling distribution issues - and using utility to do this - no more makes you a communist than using Pareto efficiency makes you a fascist.

(p.s. googling Pareto inequality reminds me there's a mountain of stuff on this subject I don't know. But if I think like that all the time, I won't get a single blog entry written, let alone seventeen...!)

New year's earnestness 1/17

Would you trust Uber and Google with your city streets?

Uber-branded taxis are now ubiquitous* in Leeds, having launched last November. I'm back in Leeds for a month - it was immediately striking that pretty much every taxi now has the large white Uber label, at least in the city centre. That's a pretty impressive transformation in just over six months.

It's a classic disruptive firm; one can imagine CEO Travis Kalanick has personal targets for how many local government authorities to annoy. It can certainly be spun as a nimble tech firm zipping around the tree-trunk legs of a geriatric industry. Predictably, there's been trouble. As well as various protests, some Uber drivers are getting organised to fight for a bigger slice of the profits. (If, as that article says, Uber are taking 20-25% per ride, there isn't a lot of head-room for wages to increase - Uber's dirt cheap fares would have to rise.)

Uber have placed themselves between drivers and customers in a way that reminds me of the weirdness of Apple's app store. In a world where anyone can dump code on their blog and anyone can downoad it, Apple have thrived by creating a portal and sitting as gatekeeper. They take around 30% of every single app sale - and, for developers, this has actually worked out great. They get access to a huge market while getting to code on a single, predictable platform. Small niggles about the political implications of that control might buzz about irritatingly but cause no serious discomfort.

Equally, existing tech could - in theory - link customers and taxi drivers without the need for such a powerful intermediary. The possibility of open-standards platforms transitioning us to the next level of transport has excited many people. Harvey Miller's work, for instance (and this great presentation) sees hope for a "transportation polyculture" where smart-city tech opens up a world of collaborative/co-operative transport. In this world, the kind of fluid, efficient city roads that Uber talk about, where ride-sharing is easy and prevalent, come about via open source principles entirely at odds with Uber's - though such a world would perhaps be just as disruptive to existing taxi firms.

Two radically different internet myths are at the heart of this difference. In one founding myth (as the Economist says) the Net is "the spontaneous result of co-operation by growing numbers of people acting outside the control of the governments and big companies" - a "libertarian paradise" promising a level of openness, connectedness and democracy never before possible. That story is still being told.

But then this other story appears.

Blood, sweat and containerisation

The last episode of blood, sweat and luxuries aired on BBC3 last night. In this series, a bunch of UK consumers have been made to work on products that end up on British shelves. They stay with other workers for the duration. I've only caught two of them, but it was powerful stuff, if occasionally cringeworthy watching some of the Brits deal with it. A 'part time male model' in particular seemed to wear his outrage in front of the camera as an accessory, and mostly flounced off the jobs after an hour or so.

Last night's saw them working in a relatively small Phillipino components factory in Manila - called EMS - making small changes to a hard-drive wire for mp3 players in a cleanroom, looking out through a tiny slit in their blemish-free gowns. The factory is in Laguna, the 'Silicon Valley of the Philippines.' (Google found that in a copy of the Philippine Daily Inquirer from 2000. How did it do that??)

To begin with, they clown about; when the supervisor points out the workers are trained not to look up from their work regardless of what they hear, a couple of them take to banging on the windows - and indeed, no worker moves from their task. "Every unit takes 3 seconds, a single glance takes 3 seconds," points out the supervisor, "so you will fail to meet your output."

Meat and symbols

Often, in the moments between sleeping and waking, ideas become visceral, almost literally. This can include things like 'oh my God, Sarah Palin might be one heartbeat away from leader of the free world' or 'oh my Christ, we really are managing the fuck the one planet we have.' That last one is often accompanied by the 93 million miles between the Earth and sun shrinking so that the heavenly bodies are almost within mental grasp, almost in the same room. There really is a star blasting at us, churning our water and atmosphere.

More recently, there's been a few occasions when it's been more corporeal: yanked back from sleep and plopped into a vast dark room of consciousness, so I can have some stark fact about my physical form klaxoned at me. For some reason, my spine got that treatment (probably because of a bad back); a keen sense of bone and gristle holding my centre line together. More recently (probably after some film or other) my brain decided to get all 'aaargh' at the idea of a bullet going through it. Quite reasonable thing for it to do, one might think. The fact that usually it doesn't says something about our ability to just get on with what the world presents us with. But right then, my brain wasn't having any of it: so, here's a bullet, right? It goes through and me, this person - suddenly I'm goo, I'm all over the place.

One hundred years

I went to hear Nicholas Stern speak a couple of nights ago: the subject was 'after Copenhagen'. It was a great talk; the man has the gift of speaking in a way that, written down, would make excellent reading. (A skill many politicians learn early.) But I was struck most forcefully again by timescales we now now talk about: what will happen in a hundred years? Current emission rates, according to climateinteractive, give a mean of 3.9 degrees. (OK, that's 90 years...) The spread's wide: if we're lucky, closer to 3, if we're unlucky, closer to 5. It hasn't been 5 degrees above current temperatures for 55 million years. Stern had a nice turn of phrase: these are the kind of changes that move people, move deserts, and are already manifesting as season creep (discussed in this recent paper that attempts a robust framework for analysing the impacts. No model in sight there: 30 years of data.)

One hundred years. Very few humans last that long. A hundred years ago, no first world war. The Los Angeles International Air Meet showcases some crazy new designs. The first commercial air-freight flight takes place - and the first commercial dirigible flight. (Now, this many flights happen in a 24 hour period.) Albania rises up against the Ottoman empire. George V becomes king. Wow - the Vatican makes all its priests take a compulsory oath against modernism. Mark Twain dies; 1.75 billion people live on.

It turns out the past is a different planet. Let's make a prediction: a hundred years hence, it'll be a different planet again.

Climate science and the political compass

In all my banging on about good science yesterday, I realise on one thing I was being unscientific. A couple of links, to Next Left and Crooked Timber, wondered why there seemed to be such an anti-AGW consensus on the right. I speculated it may have something to do with a different assessment of the risks - but this is missing a basic question that could be asked. I'll ask it now, and then suggest that it doesn't matter anyway.

Climate change science for everyone!

I believe that climate change is happening and that humans are mainly responsible because of greenhouse gases (GHGs) we're putting into the atmosphere. But the number of people who believe this has been going down, it seems - in the US, 20% less think the planet's warming than did so two years ago. (And that's before you've asked them whether they think it's natural variation.) Concern about climate change has, unsurprisingly, been affected by the economy, as the HSBC climate confidence monitor shows. (Opens PDF.) In this survey, people in the UK are the least concerned citizens anywhere in the world; we're second only to the US in thinking there are higher priorities for public spending - odd when you consider the level of state welfare we already have compared to other countries surveyed. There may be high scientific consensus - not so in public opinion.

Three adaptive landscapes

Three communities I've come across in the last few years have made me see language and order in a new way. Two I've read about - Peruvian potato farmers and Balinese rice-growers. The other - Mutawintji - I visited as a tourist on an Outback safari before the PhD started. I'll get all my caveats out of the way: no in-depth knowledge of any of these; it'll seem like a pretty functionalist argument; I know almost nothing about anthropology. Given that…

The social technology of drug production: can we do better?

Last night, BBC2 aired The Price of Life, a documentary examining the NHS’s purchase of a new cancer drug. Myeloma is a cancer of the plasma cells. A US company, the Celgene Corporation, holds the patent on lenalidomide (Revlimid in the US.) People survive for an average of just over a year longer than they might have done without it.

In the programme, Adam Wishart follows a number of patients awaiting a decision from NICE, and several other players in the health market: the chair of the NICE committee making the decision, an NHS fund manager, and the head of Celgene.

We’re present at a NICE committee meeting where it’s decided the NHS can’t afford lenalidomide. There’s a specific money limit per year for treatment at certain points in life, based on Qalis - a combination of economic and social value. This leads to a specific cost limit, and this drug is too much. By the end of the programme, this situation has been reversed – back to that in a moment.

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