Sunday, 31 December 2017

Homework For Owen Jones In 2018.....



The regularly confused Owen Jones had an article out over Christmas in which he laments what he perceives as the rise of individualism and the demise of solidarity in society (Jones' perception is based on the results of a survey by the European Commission, where apparently 52% of the people surveyed are hoping for more solidarity).

Owen Jones predictably blames all this on what he calls 'Thatcherism' or 'neoliberalism', which, according to him, has encouraged a maximisation of individualism that has sought to "bulldoze every last remnant of solidarity we felt".

This is, of course, utter hogwash, built on the fact that neither Jones nor the European Commission understands the concepts they are trying to evaluate. Humans do not look to maximise individualism, we look to maximise utility. In conjunction with this, economics is a proper empirical method for assessing what humans prefer given many combinations of goods, services and opportunities for mutually beneficial exchanges.

Therefore, what Owen Jones sees as selfish individualism is no such thing, because the pursuit of human utility for each individual is underpinned by solidarity in cooperation. Once you factor in the billions of combinations of goods and services and the billons of combinations of tastes and preferences, you see that suppliers only provide what consumers desire, and at a price people are willing to pay.

Consequently, economics is about human preferences and behaviour played out in the form of mathematics (utility). For example, indifference curves represent a series of combinations between two different economic goods, and they play out in geometrical terms when slopes of indifference curves on a graph reflect marginal value. This is the very basis on which utility operates - but fairly obviously this is based on cooperation between buyers and sellers, not on the kind of isolated individualism that Jones thinks has bulldozed this country.

What Jones also doesn't understand is that the process that drives the death of failing industries in the UK is part of the very same solidarity we were just talking about. Industries that fail do so for exactly the same reason that salt and vinegar flavoured crisps succeed at the expense of strawberry flavoured crisps - people are revealing their preferences and relying on each other to try to maximise their own utility.

So when small corner shops close because their customers switch to the nearby Tesco; and when a music store closes because people download their tunes straight from the Internet; and when businesses are made better off by importing Chinese steel than by supporting British steel, there is no bulldozing of solidarity - just cooperation with more efficient agents for the benefit of increasing utility.

The market's revealed preferences are simply instances of increasing utility spread thinly across society, whether that's by producing things cheaper, using fewer resources or being more efficient with time. These matters of individual utility are part of solidarity in cooperation; they are not at odds with solidarity as Jones thinks. Cooperation helps individuals to maximise net utility.

Friday, 29 December 2017

The Rapid Immiseration Of A Nation State Blighted By Socialism


A video has been doing the rounds, with the following tagline:

In just one generation, Venezuela has gone from being one of the richest countries in the world to 2nd to last, just above to North Korea. Today, people are starving and Nicolas Maduro's military and police forces are set against the civilians protesting in the streets.

How could this happen? In a word: Socialism.

Overly-simplistic? Yes! But the kernel of the point is a valid condemnation of a system of thought that has brought about mass misery every time it has been tried. This point wouldn't be so compelling were it not for the fact that currently in the UK the leader of the opposition, Jeremy Corbyn, is a vocal advocate of Venezuelan-style socialism, and wishes to impose something similar on our country. To that end, the only thing more shocking than the lack of disgust at Jeremy Corbyn and John McDonnell is the shock that so many people will give his facile and dangerous policies the time of day. Let me explain why.

One pretty normal thing about human beings is that we positively promote things that are good for us and no one bats an eyelid. Protein is good for us, as are carbohydrates, as is exercise, fresh air, happiness and security. A writer who advocates the virtues of any of those things is not likely to be heavily criticised.

Alas, humans do not always follow this consistency through; for there are some things that are really good for humans that many don't take full advantage of. Perhaps the most obvious example of this is how so many fail to value the quality of revealed preferences and the value in having freedom to make personal decisions. In fact, quite often they advocate having a state that makes those decisions on their behalf with far less knowledge than the agents in question. It is, in my submission, one of the most absurdly self-impeding things we do: it's part of the human propensity for lazy thinking and uncritical delegation - what William Blake called the 'mind-forged manacles'. 

Why socialism never works
Society is made up of billons of life choices each day, and the prices we see in the marketplace are a reflection of those choices and the value we place on things. Cars are popular among 50 year olds, whereas roller skates are not, because 50 year olds tend to prefer cars to roller skates. Beer is more popular than mint tea in a nightclub because people value beer more than mint tea when they are clubbing. These are society's revealed preferences, and prices reflect those wants and needs.

In most cases, therefore, when choice is involved, society would be better off if resources (labour, goods and services) were allocated based on individual preferences, not on top down nationalisation. Our country's defence, for example, is fine as a nationalised service, because everyone wants to feel protected from foreign attacks, and few people want to spend much time and energy choosing between different defence alternatives.

You can make a similarly good case for road maintenance and the police force. But most things we consume are not of this kind - we value the choice to spend our money on what personally benefits us, and society thrives on the basis that our choices are all different.

The Venezuelan problems, though numerous and complex, belong to what's known in economics as the economic calculation problem - which is that centrally planned economies are dangerous and inefficient because they lack reliable price signals, and therefore fail to distribute resources rationally. As has been seen in every country that has tried a state control of an economy, what it leads to is shortages, brutality, oppression, mass suffering, and ultimately total immiseration of the country. 

The main problem with command economies is that there is no rational employment of capital goods, which stifles vital information signals about how much to produce of what, who desires what, and how much they desire it. Socialism, by centralising the ownership of capital goods, necessarily skews the markets in which these goods are traded, which tramples all over evidence-based economic calculation.

With skewed markets for production, you get skewed prices, which impairs the ability to decipher which lines of production should be pursued, and for how much. That is the base reason why socialism produces material hardship and free markets produce material abundance - there is no magic overseer of markets, it is just that free exchanges in markets allow for much more information-clarity, which is what enables the right amount of stuff to be produced, for the right price, and with as few distortions as possible.

Corbyn's Labour Party, with shades of Venezuela, represents everything that is crass, foolish and dangerous about political influence in the free exchange economy. I wonder if it's too much to ask that Venezuela's calamitous retrogression will be enough to awaken the young Corbynites from the sleep of their foolishness. It is the season for miracles, after all.

Thursday, 28 December 2017

Why Some Questions Fail To Get Answered


Many of the big questions people ask are the same questions that they have debated to death for centuries, mostly with no resolution. If we've seen one thread on free will, God's existence, absolute morality, capital punishment, abortion, and questions of that nature, we've seen hundreds.

To my mind, the most probable reason why many of these questions linger is that the questions that are being asked are unreasonable ones. By 'unreasonable' I don't mean it's wrong to ask such questions, I mean they are probably being asked in the wrong way.

Here's a useful tip. Whenever you ask a question, you would be advised to consider whether that question can actually be reasonably asked in the way you are asking it. And as a corollary, you are also at the same time asking whether it can be answered. If the answer to the first part is 'no', the answer to the second part is going to be 'no' as well.

But how do you ascertain whether a question is being reasonably asked? Here's my tip on how you do it. If either or all of the answers you are considering in relation to a question would sit equally well with the reality you perceive, whereby each putative conclusion bears no change to the reality you perceive objectively, then your question cannot be reasonably asked.

Let me make that simpler by giving two examples of questions that cannot be reasonably asked, as per the above. Question 1: Did God cause X to happen? Question 2: Do we have free will?  Again, by that I don’t mean it’s unreasonable to speculate on these questions (and I have done), I mean they are questions where either answers leaves us in the same epistemological position. 

The question Did God cause X to happen? – must be followed by the question; is there any X in nature that can be explained by God that can’t be explained by nature, and vice versa? Empirically speaking, there is not. Similarly, the question Do we have free will? must be followed by the question; is there any action that can be explained by our free will that wouldn’t have otherwise occurred if we don't have free will? Again, there is not.

Over the years I've often found myself saying to antagonists that the answers they get will likely be as intelligent as the questions they ask, and that the rewards of what they get out of an enquiry will be roughly commensurate with the resources they put in. In cases like the above, though, we sometimes just have to remind ourselves that some questions are more interesting than answers, and that badly formulated questions will leave people on an endless treadmill of mediocre, unfruitful debate until they are executed properly.

Friday, 22 December 2017

Why It Is *Possibly* Safer To Drive Home Drunk Than Walk Home Drunk


This is the first time I've ever let someone else write a Blog post here, but I figured regular readers who are interested in the sort of things I write about would probably be interested in this, taken from the intriguing book that is Superfreakonomics by Steven D. Levitt and Stephen J. Dubner. If you're anything like me, you'll probably notice the trade-off between counter-intuitiveness and rationality, and that there's a sleight of hand going on in order to make the argument fly, but it's something you'll likely be glad you got to consider:

Many of life’s decisions are hard. Some decisions, meanwhile, are really, really easy. Imagine you’ve gone to a party at a friend’s house. He lives only a mile away. You have a great time, perhaps because you drank four glasses of wine. Now the party is breaking up. While draining your last glass, you dig out your car keys. Abruptly you conclude this is a bad idea: you are in no condition to drive home.

For the past few decades, we’ve been rigorously educated about the risks of driving under the influence of alcohol. A drunk driver is thirteen times more likely to cause an accident than a sober one. And yet a lot of people still drive drunk. In the United States, more than 30 percent of all fatal crashes involve at least one driver who has been drinking. During the late- night hours, when alcohol use is greatest, that proportion rises to nearly 60 percent. Overall, 1 of every 140 miles is driven drunk, or 21 billion miles each year.

Why do so many people get behind the wheel after drinking? Maybe because— and this could be the most sobering statistic yet— drunk drivers are rarely caught. There is just one arrest for every 27,000 miles driven while drunk. That means you could expect to drive all the way across the country, and then back, and then back and forth three more times, chugging beers all the while, before you got pulled over. As with most bad behaviors, drunk driving could probably be wiped out entirely if a strong- enough incentive were instituted— random roadblocks, for instance, where drunk drivers are executed on the spot— but our society probably doesn’t have the appetite for that.

Meanwhile, back at your friend’s party, you have made what seems to be the easiest decision in history: instead of driving home, you’re going to walk. After all, it’s only a mile. You find your friend, thank him for the party, and tell him the plan. He heartily applauds your good judgment. But should he? We all know that drunk driving is terribly risky, but what about drunk walking? Is this decision so easy?

Let’s look at some numbers. Each year, more than 1,000 drunk pedestrians die in traffic accidents. They step off sidewalks into city streets; they lie down to rest on country roads; they make mad dashes across busy highways. Compared with the total number of people killed in alcohol- related traffic accidents each year— about 13,000— the number of drunk pedestrians is relatively small. But when you’re choosing whether to walk or drive, the overall number isn’t what counts. Here’s the relevant question: on a per- mile basis, is it more dangerous to drive drunk or walk drunk?

The average American walks about a half- mile per day outside the home or workplace. There are some 237 million Americans sixteen and older; all told, that’s 43 billion miles walked each year by people of driving age. If we assume that 1 of every 140 of those miles are walked drunk— the same proportion of miles that are driven drunk— then 307 million miles are walked drunk each year.

Doing the math, you find that on a per- mile basis, a drunk walker is eight times more likely to get killed than a drunk driver. There’s one important caveat: a drunk walker isn’t likely to hurt or kill anyone other than her- or himself. That can’t be said of a drunk driver. In fatal accidents involving alcohol, 36 percent of the victims are either passengers, pedestrians, or other drivers. Still, even after factoring in the deaths of those innocents, walking drunk leads to five times as many deaths per mile as driving drunk.

So as you leave your friend’s party, the decision should be clear: driving is safer than walking. (It would be even safer, obviously, to drink less, or to call a cab.) The next time you put away four glasses of wine at a party, maybe you’ll think through your decision a bit differently. Or, if you’re too far gone, maybe your friend will help sort things out. Because friends don’t let friends walk drunk.

Monday, 11 December 2017

The Popular Annual Myth Of December 11th


Today is December 11th, and the chances are that at some point today you've seen at least one of the many articles doing the rounds informing you that December 11th is the most fertile day on the calendar in the UK. There are articles (albeit old ones) in The Telegraph, The Daily Mail, The Guardian, and The Times being shared around Facebook, all making the claim that more babies are conceived on December 11th than any other day of the year, and that apparently this happens year on year.

Despite appearing in reputable newspapers, my initial instinct was that this story is poppycock, and that what we are seeing with this account is lazy, uncritical journalism. Save for one of those extremely rare coincidences that one expects every now and then when the law of large numbers throws up some irregular statistical patterning, the probability of the same day each year being the most fertile day of the year is vanishingly small. There are just too many variables and complex interlinking causes for such a peculiar pattern to emerge, and I could definitely smell a rat. 

So after a bit of probing, I found out that December 11th is not consistently the most fertile day on the calendar in the UK, this was simply an example of the researchers distorting the evidence. It turns out on closer inspection that they merely did a survey collating people’s birthdates and found that September 16th is the most popular within that survey period (and by slight margins). This is not the same thing as saying that year on year December 11th is the most fertile day on the calendar in the UK - the search space consisted of only a small, unrepresentative sample that would hold to no patterned regularity once broadened.

One thing of interest though
Even though it turns out that the specific date reported is untrue, it is apparently true that December is the most fertile month of the year on a consistent year by year basis, and that is something that may still be of interest to readers here. The fact that there is consistently a particular month of the year when most sexual unions occur ought to be no surprise really, particularly if there are regularities in human behaviour that could easily cause such a statistic to be true.

I can think of three reasons why December might be the most fertile month of the year:
 
One is that colder air helps to improve sperm quality. Actually, I didn't think of that one - it was reported after the media consulted a biologist. What the biologist didn't mention, though, is that by itself that's not compelling, because the 'colder air' factor should only narrow it down to winter months, not specifically December.
 
Two is that quite a few parents plan pregnancies in December so that their children’s birthdates are in September, which increases the probability that their children are among the oldest in their school year (giving those children an advantage).
 
Three is that early to mid December is when the country has lots of Christmas office parties and work nights out*, which might amount to an increase in sexual activity in early to mid December. 

So my best guess is that it’s a combination of the colder weather, school planning, and Christmas conjugation that gives us the statistic that December is the most fertile month on the calendar each year. 

 
* Note that Christmas office parties usually happen on Fridays and Saturdays, and those days are different dates each year, which increases the spread of probability away from any specific date in December.

 

Sunday, 10 December 2017

A Radical Way To Change Politics For The Better


I have three radical, brilliant and yet wacky ideas for how to revolutionise our political system. The first one involves ditching constituencies and drastically reducing the number of MPs with a new system of representation (your local council could fulfil any need your MP can). The widespread mediocrity of our MPs is a lot to do with the fact that they are working within a system that does not provide much of an incentive for moral probity or intelligent policy-making. 

It's only when professional people are accountable for their actions or words that we lessen the duplicity and complacency. I doubt we would have seen the MP expenses scandal nor be subjected to the regular tosh to which we have become habituated if we had upstanding MPs who feared the opprobrium (and voting power) of the electorate, and had to conduct themselves with integrity and intelligence to secure their next vote. 

The main cause of this lack of incentive is that too many MPs are in safe seats in their constituency, and party associations that choose the candidates for constituencies can ensure that those in Ministerial roles get the safest seats. My antidote to this is a whole new system that instils some kind of accountability to MPs, and ideally brings in a better and more scrupulous calibre of candidate, and a more carefully thought out voting process.

Idea 1
First we need to decimate the notion of votes attached to constituencies according to geographical borders. As a replacement, my radical proposal would be that candidates will stand to represent surnames demarcated into sections of the alphabet, not regions of the country. We could reduce the exorbitant number of MPs down to about 500 (that'll save on expenses) - and then have a system in which MP 1 represents everyone whose surname begins with Aa-Ad, MP 2 represents everyone whose surname begins with Ae-Ah, and so on. 

Under such conditions, an MP really would have to work hard to forge a good reputation and the prowess for positive influence, because the people he or she represents would be all over the country, and they would make up a body consisting of a diverse range of classes, cultures and ethnicity. MPs are much less likely to be complacent if they are required to have a positive impact on tens of thousands of people scattered across the country rather than people concentrated in a specified area of the country - they will have to think more innovatively about plans, policies, investments and strategies.

And instead of having constituents and holding surgeries, elected MPs could get involved with local issues through regional councils, primarily motivated by doing good, honest, decent work for the region. There may be occasions when conflicts of interests occur between a local person and a person he or she represents alphabetically, but I don't expect them to be too frequent. Put this system in place and I'll bet we'd see a higher standard of MPs, in a system in which Westminster attracts more candidates who want to be MPs for the right reasons.

Idea 2
In addition, my second idea adds even more intellectual and moral scrutiny to the process - because in order for MP 1 to represent everyone whose surname begins with Aa-Ad, and MP 2 to represent everyone whose surname begins with Ae-Ah, and so on, we could try to lessen party political biases and tribalism by offering category distinctions between policies and parties. In other words, rather than everyone whose surname begins with Aa-Ad voting for a party candidate, they could instead be asked to tick boxes for a large range of policies they support (after reading intelligent annotated arguments for the costs and benefits of each policy - we could make this mandatory), while being blind to the parties to which those policies belong.

I got this idea during the last election, after clicking on one or two of those websites that attempt to tell you which party it thinks you should vote for based on a series of policy selections you've made from behind a Rawls-type veil of ignorance, blind to the parties to which those policies belong. It’s obviously not totally blind, as it’s fairly easy to tell which policy belongs to which party in the most obvious areas - but it certainly was the case that when people did the exercise they frequently ended up being most closely aligned with parties that were not the parties for whom they would usually vote.

Being more economically right wing than most, and more socially left wing than most, when I partook in the exercise it was clear that I am further from all the mainstream parties than any of them are from each other, which means there is no obvious party for me to vote for. However, this isn't true of the average voter - in fact, rather worryingly, a poll seemed to indicate that if people voted for policies not personalities, the Green Party would have won the last election - which does rather suggest that the average voter is likely to make a real mess of things with a policy-only vote, and that democracy would not be all that safe in their hands.

Idea 3
This is where my third idea can help - because, as I talked about in this Blog post, I think the nation pays too much regard to the so-called qualities of democracy. Leaving decisions and policies that require intelligence and evidence-based analysis in the hands of largely uneducated and short-sighted populations is highly overrated. What's needed, in my view, is a voting system comprised of fewer, smarter voters - but having tweaked my system a bit, I'd now wish to incorporate my two above ideas into it.

Added to my above system of having MPs represent surnames rather than constituencies, and voters voting on policies not personalities, I'd also want the outcomes to be in the hands of far fewer, more educated voters - maybe with something resembling jury duty, where a random selection of the population (to ensure a proportional representation of sexes, ages, ethnic backgrounds, income groups, religious beliefs, political views, education, and so forth) - let's say 50 people for each letter group (at 500 groups, that's 25,000 voters) - are called to partake in a rigorous voting process involving careful, considered analytical scrutiny over a number of weeks.

So here's how it would work. The first step is to ensure that voters voting in my reduced voter election are better apprised of the facts, and of the pros and cons of all policies (the seen and the unseen). Rather than decide where your vote should go based on personalities, the 50 x 500 chosen voters get to spend a number of weeks, getting paid for their time, studying the economic, sociological and philosophical tenets of all aspects of the policies in front of them, attending lectures from speakers of both sides of the argument, partaking in group discussions and becoming involved in debates orchestrated by experts in the fields (the benefits of the outcome would more than pay for the financial costs of this, and some of the offsetting savings will occur by not having to employ polling clerks throughout the country on election day).

And then at the end of the process, after developing a much broader understanding of the costs and benefits of all policies, the individuals get to vote on those policies, and then the results are announced, with the winning 500 MPs taking their place in Parliament

You may worry that this will disenfranchise most of the other citizens that don’t get to vote – but there’s no reason to think this.  At the start of play, everyone has exactly the same chance of being selected, and everyone in the country (both those selected and those not) will be secure in the knowledge that the people who are going to represent them in Parliament will have been chosen with more rigour and a higher degree of analytical scrutiny by highly conscientious citizens in the country. That cannot be as disenfranchising as the current system in which every single person that votes knows that that vote will have the same use as if they’d stayed at home.

What I'd also predict will happen is that if politicians knew that their policies would be subjected to proper, rigorous analytical scrutiny - and that they'd have to be credible to pass intellectual muster - the policies offered would be far more carefully thought out, and more in tune with a formal economic accountability.

One would hope the politicians that made empty promises, and sold policies based only on benefits with scant regard to costs, and politicians who took advantage of the electorate from within the comfort of their safe seats, would be greatly diminished, and in many cases got rid of altogether in my proposed system. Who knows - it's even possible that higher quality politicians with properly analysed policies may end up rubbing off on a greater proportion of the electorate.

Tuesday, 5 December 2017

The Trojan Horse Of Public Goods: Beware Of Politicians Bearing Gifts


Government Minister Greg Clark, the Secretary for Business, Energy and Industrial Strategy, has unveiled a 255-page white paper explaining the party's industrial strategy for the nation. The government is promising to 'invest' in our country and increase productivity with taxpayers' money (although they never mention taxpayers' money, of course).

These are promises that should concern us - and the concern should be based on a well worn economic phenomenon that assesses whether the state should be involved in an industry at all, or whether it is doing more harm than good.

The assessment can be stated like this: if the provision of a good or service would have happened anyway by commercial demand, then it's better if private investors provide it (as I've explained before repeatedly). If the provision of a good or service would not have happened anyway by commercial demand, then it's costly to society for the state to take our money to provide it - even more so when you factor in all the crony capitalism, self-serving lobbyists and special interest groups distorting the market.

The upshot is, when all the costs and benefits are weighed up, there isn't very much that the state should be doing. Consequently, a strategy that's based on all the things the government wants to do for us is going to be one that engenders lots of inefficient use of money that we'd be much better off spending directly out of our own pockets.

One exception needs bearing in mind though - and that is the kind of product or service that is widely desirable but may not be provided by the market - or could be, but may be better provided by the state. These are what are referred to in economics as public goods.

Public goods and private goods
The state provides some public goods from which we all benefit equally, like national defence and rule of law, but it also provides private goods like health care, education and pensions which would be better run under a 'consumer pays' model. The distinction is that we more or less want the same thing when it comes to national defence, but not so when it comes to health care, education and pensions.

Because the private goods and services that the state provides are devoid of a 'consumer pays' model, there is no measurement of consumer demand for the goods and services nor commercial value in how they are costed.

Before we get into this further, let me deviate for one moment to tell you a shocking fact connected to state provision. Once you factor in all the stealth taxes on top of the more transparent taxes, the state takes on average around 60% of our earnings in taxation. To put that into perspective, that means you have to work until roughly August 7th each year until you begin to earn money that the state doesn't somehow confiscate.

A left wing friend of mine said she thought this was good news because it shows how much we as a society are willing to show we voluntarily care for one another in the form of redistribution. As much as I love my friend, this is a strange view to have because it is just about the opposite of the truth. Tax is taken from us precisely because we otherwise would not voluntarily donate to these things (a point I illustrated before by using the example of foreign aid, and here regarding the welfare state). To explain, let me tell you a bit more about the concept of public goods in economics.

A public good is something that is referred to in economics as non-excludable and non-rivalrous, in that agents cannot be effectively excluded from it, and whereby if one person consumes the good it does make that good unavailable for others. Obvious things that do not qualify as a public good are things like a car parking space and a bunch of grapes. If Jack parks in the only available car parking space, Jill cannot also park there. If Jack buys the last bunch of grapes, Jill cannot buy them. The nice view of London’s skyline from Primrose Hill, on the other hand, is a public good because Jack can enjoy it without excluding Jill’s ability to enjoy it too.

The problem with public goods is that they have what’s referred to in economics as a free rider problem. That is, if a good is a public good it is difficult to prevent others from enjoying that good without having to pay anything towards its cost. Suppose there is an alley between two terraced houses owned by Jack and Jill in an area with a recent spate of burglaries. Jack says to Jill ‘Let’s go halves on a £500 gate to make our alley more secure'.

If Jill wants the extra security but figures that Jack will pay for the gate even if she does not pay her half, then Jill free rides on the security, and Jack foots the bill. Jack may therefore decide to not buy the gate, leaving them both with a less secure alleyway. If the situation was favourable, the government could tax the whole street and put up the gates in all the alleyways on the street. Of course if the alleyway gates are worth their cost to all the residents, then everyone on the street is better off.

But then you have to add further consideration, because in a scenario where only some people paid for alleyway gates, the people that didn’t are made more vulnerable because their unguarded alleyways are now more attractive to burglars. The same is true of burglar alarms; if numbers 1, 3 and 5 in a cul-de-sac install a burglar alarm, numbers 2, 4 and 6 that don't have burglar alarms are more likely to get burgled.

The key analysis with tax and government industrial strategy is assessing whether a good or service is like the alleyway gates, and whether everyone involved is better off by paying a tax and sharing the benefits, or better off being left to their own devices in a free market.

One obvious example of a public good that everyone benefits from is national defence: so effectively the nation is treated as a single consumer paying for this through taxation. Another example of a similar service is the police force, as is the infrastructure that provides the framework for the rule of law. There are people, such as David Friedman in his seminal Machinery of Freedom, who maintain that even things like defence, police and rule of law don't need to be provided by governments, but can be sustained instead by non-coercive market and charity-based systems. But we'll give the state the benefit of the doubt for now in terms of providing a few of these public goods, even if it is easy to envisage a time when things may be different.

When taxes are paid to provide things that the government can provide more efficiently than the market then we should support them. But that is the only condition under which a public service like defence or policing is preferable to a private service. As I reminded people in a recent blog post, public services cost about 30% more to provide the same equivalent service provided privately, therefore it is desirable that anything that can be provided by the market is done so, which doesn't leave the state that much it should be doing, because there are not many things it can provide better than the market.

Monday, 4 December 2017

Junk Food, Junk Theory


Statistics often provoke incredulity. For example, The London School of Tropical Medicine sent out a report that says the surplus (stress, that's surplus) food consumed by all the obese people in the world is enough to feed 1 billion of the world's poorest people. You don't need to be a genius to predict what many will say when they tap away on their keyboards by way of a response:

"Ah, so if the over-eaters consumed normal amounts, we could give all that food to those billion people".

Not quite. That's a bit like saying that if we gave some of Europe's rainfall to Africa, there would be less barren land in Africa. True, but not possible. The same goes with food - obese people consuming less does not mean that we could feed the billon poorest people, because what makes them hungry isn’t just lack of food, it is lack of many of the other things that may otherwise result in enough food.
 
All that said, it would certainly be useful if we were all more careful with our food consumption. Perhaps the most useful and practical measures we can take would be to take the lead of the supermarkets that voluntarily donate their surplus food and drink to good domestic causes - either by spending money on the food donation schemes they run, or by adding some extra items to your shopping basket that you can donate to food banks.

On a happy note to end, well done to the Co-op for being the first major retailer to voluntarily sell food on a large scale at a reduced price after its 'best before' date, in an effort to simultaneously cut its losses and reduce its food waste too. What I like most about it is that it's an entirely voluntary decision - no enforcement, no pressure from regulatory bodies - just a straightforward sensible decision that mutually benefits sellers and buyers.

Thursday, 30 November 2017

Britain, Trade Histories & The EU


A reader emailed to ask about Britain's historical relationship with free trade and Europe, and whether the current uncertainty surrounding Brexit makes things precarious for us. Here's my reply:

There was little free trade in Britain until it was taken up consciously as national policy around about the mid 19th century. Previously, tariffs were sometimes sky high, as in the case of the French against British wool products, British tariffs against Indian cotton cloth, etc.

But also there was no mass immigration because welfare was only available locally to select inhabitants. The nearest thing we came to it, except very recently, was the French Huguenots in the early 1700s fleeing persecution. As expected, Londoners kicked up a stink and a special Act had to be passed allowing them to stay. Excise taxes at border posts, as before, could be very high.

Of course, Europe then was far different to now - it amounted to lots of principalities with border posts. Germany had a score of them and Italy a dozen until late in the 19th century - so any merchants travelling down the Rhine had to repeatedly pay excises at border posts. Only a few cities in Europe, such as Antwerp and Hamburg were freer.

It was only when Ricardo's arguments about free trade started to become more widely appreciated that cities became freer. David Ricardo would often be heard in the House of Commons in the early part of the 19th century extolling the virtues of removing tariffs, but the most the UK responded with was Imperial Preference - whereby, free trade was freer with its colonies but not with other nations.

Then two world wars interrupted the free flowing migration of widespread trade, and as well as mass murder on an unprecedented scale, socialistic tyrannies were spread across lots of Europe via the Russian, German and Italian dictatorships. Consequently, many of the resultant post-war government interventionist policies that followed the world wars set precedents for the economically stultifying State meddling that we've become so used to in the past six decades.

Once upon a time, the idea that Europe would need a bunch of unelected socialist bureaucrats for its nations to enjoy the free movement of people, goods, services and capital in a "single market" would have been ludicrous - but alas, that is what we have with the current EU from which we've just promised to distance ourselves.

During the next sixty years or so, Britain became more diverse in its trade agreements with the rest of the world, and although there have been some serious peaks and troughs, generally we have been going in the right direction. This has been the beauty of a freer market unbound by over-regulation and special preference blocs. If it’s beneficial for Britain to trade with France for wine, Germany for BMWs, China for steel, Kenya for coffee and Brazil for bananas, then that’s what will (should) happen.

All any country wants in terms of trade is to import goods in which foreign exporters have the comparative advantage, and export goods in which they have the comparative advantage – and within that process find the nations that have the most attractive comparative advantage. The Netherlands may have a comparative advantage over us in terms of fuels and metals, but if there is an even greater comparative advantage by having a fuel and metals trade deficit with the United States and Japan then that option is preferable.

So trading with anyone with whom a mutually beneficial transaction occurs is the desired result. Apart from a few exceptions regarding meeting quality standards, the idea of even having to talk of 'having access to a market' by going through doors in a politically constructed labyrinth is preposterous.

One shouldn't forget that, ostensibly, the post-World War 20th century was unprecedented, and the nations that came together to co-operate in the reparation job deserve a lot of credit. We live in the most peaceable Europe we’ve ever seen, and no doubt attitudes to union and unity have helped. The problem is, I think it has gone way too far, and there are interferences in our freedoms, and in prices too, which go way beyond the desire to secure peaceful co-existence.

The European Union has effectively put up a de facto wall around its bloc to protect its own European agents from more competitive prices outside the EU, which makes it more difficult for poorer African, Asian and South American traders to compete. If the EU opened its barriers to free trade with, say, Africa on farming, and stopped subsidising its own farmers, as one example, it would be the first big step towards the revival of the developing nations' agricultural industries.

Rather like our own NHS on a smaller scale, the EU is the world’s best living example of the limit of economies of scale, where once an institution becomes too fattened up you get dis-economies of scale**, where scores of extra management are added to the workforce, along with such increased bureaucracy and self-preservation that lack of communication and inadequate understanding from the top to the bottom, and sideways too, means there are more problems than solutions. I think history will show that our coming out was a good thing for us, and a catalyst for good in Europe too as other nations will follow suit.

Then of course there is another charge to level against big bureaucracies - it's what's called the Ringelmann effect, which is the tendency for individual members of a group to become increasingly less productive as the size of their group increases. A good example is in a tug of war event, where you'll usually find there is an inverse relationship between how many of you there are pulling your team's side of the rope, and the magnitude of each agent's individual contribution to the total effort.

Another example, when you're in a crowd and the speaker enters the stage and says good morning, there is usually a murmured response. When he says "come on you can do better than that", the reciprocation is much louder. The volume of the words you utter will be less loud than if you were asked to respond on your own.

This phenomenon of increased group size resulting in lower individual effort or productivity is also known in psychology as social loafing. Large institutions like the EU, the civil service, and local authorities are going to be replete with social loafing, particularly when you factor in Parkinson's law and the Allen curve, which is even more reason why we're better off out of it.

Wednesday, 29 November 2017

It's Time For A Post-Racial World


It’s time that humanity moved forward with its understanding of how humans define one another. Here’s some practical advice - it certainly works for me. Ditch the term ‘race’ when trying to define individuals according to their skin colour or nationality. The word ‘race’ has too many negative connotations and associative misunderstandings about what humans are and how they treat one another - it's time to wise up!

It’s far better to use the word ‘race’ in terms of our being the human race, although personally I prefer to say the human species. Either way, race or species refers to us humans as a collective, and with that, all the shared genetics, behaviours, evolutionary legacies, hopes, dreams, fears, insecurities and curiosities that bring about a kind of oneness implicit in our species.

After that, we have a breakdown of different types of human, where race used to mean anything from skin colour, to facial features, to wherever on the planet someone comes from. Needless to say, there is a word that adequately covers a breakdown of the human species in terms of belonging to a social group that has a common national or cultural tradition - and that word is ‘ethnicity’, which includes one’s heritage, and 'nationality' which includes the status of belonging to a particular nation.

People from Germany or Canada or Ethiopia have a different nationality, ethnicity and heritage, but they are all part of the same human race. That’s why, when a child is born from a German father and an Ethiopian mother, they are dual heritage, not mixed race.

Skin colour is also nothing to do with race. Skin colour is to do with a number of genetic factors, which is linked to ethnicity too - but at a genetic level, melanin is the primary determiner of skin colour. If the human race is the only viable definition of race, and if skin colour is genetically determined, then racial discrimination on the basis of skin colour is a foolish, short-sighted misnomer.

I mentioned genetics, and genetics is another way that the human race can be broken down into categories. There are relatively very few differences in the number of genes between organisms. The human genome has 3 billion nucleotides but only somewhere between 20,000-25,0000 genes. A gene is a rather arbitrary designation anyway - it simply means a series of nucleotides that code a protein. Most evolutionary changes are the result of gene duplications, inversions and translocations.

The pretexts that people have used (and sadly still use) to determine a basis of racial discrimination are both arbitrary and ill-conceived. Their definitions bear no relation to similarity or diversity in the genetic populations. For example, generally speaking, there is more genetic diversity between a man in Nigeria and a man in Kenya than there is between a man in Nigeria and a man in Belgium, Holland or Spain.

This is because humans originated in Africa, and there have been longer execution times for mutations to have occurred in Africa than in the shorter time that humans have migrated to Europe. The longer the time for mutations, the greater the genetic diversity - so perceived genetic similarity as a basis for racial discrimination is also absurd, and always has been.

So, let's recap: skin colour is down to genes; ethnicity and heritage is where in the world you come from and the culture(s) with which you identify, and the only way that race should have any meaning is in recognising that human beings are one species, and that what makes us different is miniscule compared with all the things that make us remarkably similar.

Now we have got all that straight, let's all use the appropriate language to help move towards a post-racial world, where our place of birth, our skin colour, our nationality, culture and heritage, and our genetic features are not tools for contention and division - and where someone can get engaged to someone else of a different heritage and no one thinks even the slightest thing of it.  

 
EDIT TO ADD: There have been a few people (although far in the minority) unhappy with me that I am triviallising 'race' as a valid genetic subspecies description.

Indeed, yes, I am, because even a sketchy understanding of genetics will tell you that race does not easily conform to a genetic subspecies description. If genetics is the way one wants to frame this, then 'race' as a synonym for subspecies is very unsound genetically. A genetic basis for demarcating race is nothing like as pronounced as you may think. Genetic variations among populations that are spuriously called different races are much smaller than is often imagined, and this will continue to narrow more and more as we move forward as a species and become even more globally diversified.

As I hinted in the Blog, the genetic differences between a person from Nigeria and a person from Sweden are frequently fewer on average than the genetic differences between many sets of people who onlookers might say are from the same race based on all kinds of loose descriptive terms. Genetics demonstrates that what you might call race blend seamlessly together through all sorts of genotypic variations - the change is a continuum.  

There is relatively very limited genetic variation in the human species in terms of what people habitually call race with regard to genetic markers. The odds are the genetic difference between you and an equatorial African is not greater than the genetic difference between you and your next door neighbour who you may well call the same race.

Evolution has played a long percentage game in shaping us over hundreds of thousands of years, and compared to all the ways humans are similar, nothing about human beings in any area you'd care to mention is genotypically, phenotypically or psychologically distinct enough to warrant more than a tenuous acknowledgement of fairly trivial differences. Further, most of what humans define as races are a hotchpotch of localities, not even terribly distinct ones. The vast majority of this diversity reflects individual genotypical uniqueness far more than it does the race definition.

Degrees of genetic differentiation are primarily about containing some unique alleles or sometimes different frequencies of alleles. What is actually required is a level of genetic differentiation that is well above the degree of genetic differences that actually exist among what people who observe local populations call a 'race'.

The next time someone tries to tell you that race is an established definition for subdivisions of the human species, ask them the following: using the criterion of genetic differentiation alone, what sufficient delineation would you posit as satisfactory to define a race within the human species? It is very unlikely you'll get an answer, and if you do, it won't be an empirically satisfactory genetically distinctive subdivision of homo sapiens, as there is also no classification of DNA sample that is amenable to a straightforwardly defined racial population or racial phenotype.

And finally, even if we're super-generous to the point of choosing to ignore all of the above, it is still the case that nationality, ancestry, ethnicity, heritage and skin colour perfectly well cover the definitions required, and do so better than the more ambiguous, and sometimes totally incorrect, term race.

Put it this way. If I asked a random selection of people to name an instance when race is used without there being a less ambiguous alternative, people would struggle. On the other hand, if I asked a random selection of people to name cases where race was used to describe something that is better defined by another term, no one would have any trouble naming an example.

This is what I think is going to start to change in the coming decades. Language is always evolving, and many of the terms that get modified are done so because their original appearance came at a time when humans understood a lot less about these things. And this in a world that is becoming ever more connected and genetically diverse.

Sunday, 26 November 2017

Ask The Philosophical Muser: On Washing Up and Cycle Helmets



Here's my latest Q&A column - if you have any questions for me, you can message me on Facebook, or email them here j.knight423@btinternet.com

Q) My husband and I both work full time, and take it in turns to cook the evening meal. He thinks it is better if the one who cooks also washes up, giving each of us one night off from the kitchen out of every two. I would prefer a system where one cooks and the other washes up. Who is right?

A) You both have points in your favour. Your case makes the best out of utility but the worst out of efficiency, whereas his does the opposite. After cooking dinner, the cook has diminishing utility which makes washing up harder for him or her than for the other, which is an argument in favouring of a system where one cooks and the other washes up. But preparing and cooking dinner involves externalities in the form of making mess, so a system whereby the cook also washes up incentivises him or her to make as little mess along the way as possible. In an ideal scenario, your system if preferable, as long as you both signal your care for the other one by making as little mess as possible along the way. Failing that, get a dishwasher!

Q) Dear Philosophical Muser, What is the overall effect of cycling helmets on accident and emergency units in the hospital?

A) Dear Reader, I've no idea, but I could hazard a guess. While cycle helmets greatly reduce what would otherwise be minor injuries, they also convert some accidents from fatal to near-fatal or serious injury - meaning, if that is the principal concern of your enquiry, they are likely to place an extra strain on the NHS. 

The other thing to consider is that even in absolute terms they may not benefit the cyclist, particularly if drivers are more likely to drive less cautiously around a cyclist with a helmet on. Equally, it may also be the case that people who ride with cycle helmets on are, on average, safer and more conscientious riders than those that do not. Or it may be true that cyclist with helmets on feel safer and therefore ride less safely. All these have to be factored in to the analysis.

EDIT TO ADD: There is a debate going on at the moment as the government is considering whether to make it mandatory for riders to wear a cycle helmet. Alas, both those for the proposal and those against it are basing all their arguments only on what they perceive is the least risky and statistically safer - they are giving almost no thought to the most important factor: the freedom of individuals to decide how they wish to ride - with or without a cycle helmet.

It is not the state's job to try to govern in loco parentis, whether that's on the matter of cycle helmets, alcohol, cigarettes, fatty foods, or whatever. There are costs and benefits to all things, and it is the job of the individual to decide how they weigh up those costs and benefits with regard to their own utility.

Some prefer to cycle without a helmet, saving on the cost of the helmet, increasing their awareness of what's going on around them, and knowing that they will cycle more cautiously without a helmet on, and drivers around them will likely to the same. Some, on the other hand, prefer to buy the helmet because the costs of having a helmet are less to them than the benefits. Both those decisions are absolutely fine, which is why the state should not a pass a law that makes wearing cycle helmets compulsory.

 

/>