Friday, 30 August 2013

Why The Minimum Wage Is More Costly Than Beneficial


In my last Blog I proposed an interesting way that employment laws conceal hidden costs that impair those they are supposed to protect. On a more general level, what's also strange to me is the extent to which in everyday life things are often automatically assumed to be good, just because it's easy to focus on the headline-grabbing positives while overlooking, or not understanding, what lies beneath. When you hear that the law imposes a compulsory work break on employees, it sounds like a good headline-grabbing positive, because it appears to guard against employers denying people their rightful break time. But in reality, in a competitive market where supply and demand applies to labour as well as goods, no firm in the UK would last very long if they imposed a 'no breaks' policy on their staff (even if such a thing was legal) - so the law is largely superfluous in that matter. With that in mind, let's look at another policy in which a supposed headline-grabbing positive overlooks the hidden costs that lie beneath. I'm talking about the minimum wage.

A SIMPLE REASON WHY THE MINIMUM WAGE DOES MORE HARM THAN GOOD
In a famous parable in the second book of Samuel in the Old Testament, Nathan conveys to King David an illustration of a rich man who took away the one little ewe lamb belonging to his poor neighbour. David responded with indignation and disgust until realising that the illustration was actually an indictment against him for his actions regarding the death of Uriah the Hittite and the impregnation of his wife Bathsheba. Here's my own little parable for people (including a great many politicians) who think the minimum wage is a good thing overall.

In a town called Beansville there are lots of harsh winds that damage the town on a regular basis. When this happens there is always a regular group of volunteers (comprising 10% of the population) who on top of their regular jobs spend time clearing up the mess and repairing the damage, while the other 90% go about their business. Out of the blue the Mayor of Beansville declares that even more time needs to be dedicated to clearing up after the harsh winds, and that the people to take on this extra voluntary work should be the 10% of people in Beansville already volunteering.

If you told that parable to a minimum wage-endorsing MP he or she would almost certainly be outraged at the Mayor of Beansville's inequitable policy. But just like King David, the MP should be remorseful and contrite because the Beansville policy serves as a good indictment against the MP's support of the minimum wage. Here's why. Should we decide that the extra burden ought to fall on those people in Beansville already volunteering? Or should we decide that everyone else ought to muck in as well? I think most sensible, fair-minded people would agree that it should be shared more evenly, not all heaped on a small segment of that society. Why, then, do so many people support the minimum wage, when the policy is more or less as skewed and injudicious as the Mayor of Beansville's policy? Or to put it another way, if we're going to give low-earners a boost, why do so many people fail to realise that it is unfair to place the entire cost of that boost onto the small percentage of the population that employs low-paid workers? The prudent and fairest thing to do is to spread the cost among all of us - which can be done through a taxation that is passed on to low-earners in the shape of tax credit for low-earners, or probably even better, lower personal tax thresholds for low-earners. That in a nutshell is why the minimum wage is not a good policy overall - it unfairly heaps the burden on a small segment of society - a small segment, you may note, that is outweighed by a much bigger majority in terms of potential voters.

Consider some analogous examples; we don't expect the entire burden of our navy bill to fall only on a few people, nor our health bill, nor our parks, nor our roads and streetlights - we expect the cost to be broadly shared through taxation. The same applies (or should apply) to the minimum wage - if we want to do something for low earners we should share the cost. Let me state it in the most compelling way. Poundland, Bernard Matthews, McDonald's, Burger King, KFC and similar such businesses employ a few thousand low-skilled, low-paid workers in your region - all of whom are better off than they would be on the dole (which makes us all slightly better off). So Poundland, Bernard Matthews, McDonald's, Burger King, KFC and similar such businesses are all doing something for low-skilled, low-paid workers. What, on the other hand, have you or I done for low-skilled, low-paid workers recently? 'Not much' would be my guess - so if it's desirable to do something more for low-skilled, low-paid workers, maybe it's our turn rather than the turn of Poundland, Bernard Matthews, McDonald’s, Burger King, KFC and similar such businesses, who are already doing their bit.

You might argue that our navy, health bill, parks, roads and streetlights are all public goods and services, which is why we pay for them in taxes, and that Poundland, Bernard Matthews, McDonald’s, Burger King, KFC and similar such businesses are privately owned and do not need subsidising. But that misses the point; those who support the idea of a better wage for low-paid earners (which seems to be everyone on the left, and a great many on the right) are doing so precisely because they consider it to be a public good, so the objection is remiss. And further, if you think low-paid workers are being ripped off by wealthy companies earning heavily from their labour, you'll pleased to know that one of the basic rules of economics is that the very nature of low-skilled labour is that it is easily transferable from person to person, and that because of the forces of competition, the wages of low-skilled workers are dictated by the marginal product of that labour.

It's true that the minimum wage has so-called positives (at least they're claimed to be positives by minimum wage proponents); it increases living standards for the poorest in society, and it increases the incentive for people to get back to work. But it does no good to simply endorse a policy based only on its qualities, without considering the negatives, and whether they outweigh the things in its favour. One might argue that the ill-effects of the minimum wage are more detrimental to the economy. The minimum wage has positives, but as well as unfairly loading the burden on firms that employ low earners, it also encroaches on low end business, it reduces job availability, and it often causes inflation of prices as firms try to recoup their losses on increased wages. A minimum wage does two further things. It shifts capital from employers in an unstable competitive market to low paid workers, and it induces some employers to let their staff go because they cannot afford the wages. If you’re getting £7 per hour and only bringing £6 per hour worth of benefits to your company, you’ll likely find yourself on the dole. If you are a lower paid man or woman going from here to there in different jobs, you will find less work available with every rise in the minimum wage – and the higher the rate the more unemployment. This might amount to a road block for young, unskilled workers and the unemployed – which is why tax credits are a more effective method because they target those who have children or high level benefits, and need high wages to make it worth their while signing off benefits, but who don’t have the skills or experience to command that kind of salary.

THE MINIMUM WAGE ALSO CONSTRAINS TRADE
One of the other golden rules of economics is that if you limit the use of monies you limit transactions too, because money brings about increased opportunity for trade. Minimum wage restrictions are an example of constraining trade by indirectly discouraging the use of money against the natural 'invisible hand' mechanism of supply and demand. Here's a simple illustration to show why this applies to the minimum wage. If I want to pay someone to do my gardening for me at a rate of £4.50 per hour, the law says I'm not allowed to. Yet the law doesn't prohibit me from saving £4.50 by doing gardening myself for an hour. So the law is an imposition precisely for the person it's claimed to protect - the gardener who needs the £4.50 an hour - which, if I don't want to do the gardening myself, then only encourages cash-in-hand tax-avoiding payments. Income taxes have a similar effect. Suppose I am willing to pay no more than £12 per hour to have some work done, and the workmen at the lowest rates are willing to do the work for anything over £10 per hour. That being the case I should have success in finding someone to do the job. But once the Government imposes 20% income tax, things change, because now the most the workmen can earn from me is £9.60 per hour, which means they'd be unwilling to do the job for me. This can mean that we all forcibly pay more - but quite often it doesn't, it means we try to get things done cash-in-hand on the cheap, or do more ourselves inexpertly.

Obviously it's easy to extol the virtues of income tax, but as you can see, it provides a good analogue for how the minimum wage constrains trade, as it has negative effects beyond involuntary payments, despite being a beneficial policy overall. I can't say the same about the minimum wage - its negative effects outweigh the positives to the extent that it is a bad policy to endorse. These are what are technically referred to as invisible deadweight costs - they restrict trade and transfer of money, and they damage employment prospects - but yet they are always sold as headline-grabbing positives by politicians. I think we shouldn't be surprised, though, that the Government wants to unfairly heap the low-wage burden on a small segment of society that is outweighed by a much bigger majority in terms of potential voters. Invisible costs occurring for the sake of vote-winning visible benefits are music to most politicians' ears.

* Photo courtesy of bbc.co.uk

Tuesday, 27 August 2013

The Ill-Effects Of Compulsory Lunch

I found out something the other day about my workplace regulations that I think I knew, but that has slipped back into the recesses of my mind. Under legal compulsion we employees are obliged to take at least 30 minutes lunch break.  So if I want to work through lunch and leave off 30 minutes earlier, then according to the HSE Working Time Regulations I'm breaking the law.  This basically means that if I can find better employee-use for my time then the law restricts my use of it. Is it better that lawmakers err on the side of 'health and safety' caution, or better that my ability to control my own devices is adhered to?  My gut instinct is they're doing the right thing - but at least in one sense it is constricting, because it has negative spillover effects.

Here's why. If I go into a sweet shop to buy sweets then the sweet shop owner is the supplier and I am the consumer. But in the labour market, the equivalent of sweets is the labour itself - meaning employers are the consumers of labour, and employees are the suppliers. I'm selling my labour, and the HSE Working Time Regulations are telling me about the quantitative service limit imposed on what I'm selling. When it comes to sweets, or just about any saleable product, we have regulations imposed in the form of minimum standards (criteria that products must meet). In other words, a sweet shop owner can't just sell anything as a sweet, because there are parameter lines (product quality, edibility, sell-by dates, trade description, copyright, etc) within which his product must be placed.

So while saleable products mustn't fall below a certain quality, the HSE Working Time Regulations are ostensibly saying the opposite about labour - that is must not 'exceed' a certain quality, where quality means hours generated.  By working through your lunch you're exceeding the standards, even if for whatever reason your doing this has proved immensely beneficial to you and the company.

I'd hazard a guess that if you asked most politicians about the benefits of this law they'd tell you it is for the benefit of those with the propensity to work too hard (try it by emailing your local MP if you're curious). That's about the opposite of the truth; the law doesn't benefit those with the propensity to work too hard - it punishes those whose ability for hard work makes up for other inabilities - and it benefits those with the 'other abilities' the hard workers might lack.  Suppose I employ two project coordinators whose overall output is of equal value, but whose qualities differ.  Matt is smarter, but Tim is a harder worker, often in contravention to the HSE Working Time Regulations. If I stop Tim, who do I benefit most? Not Tim. In stopping Tim I impede his ability to be on a par with Matt, and reduce his chances of a promotion, because it's Tim's hard work that puts him on the same par as Matt. Denying someone the ability to work too hard benefits not the extra hard workers but those with better qualities in other areas.

Working Time Regulators are trying to keep the price of products higher than their market value, so they must stop those producing products from competing on quality.  Of course, I cheated in that last sentence - I said 'products' instead of 'labour' - because it would be corruption if it were done with products, yet perfectly acceptable when done with labour. Working Time Regulations do not get rid of competition between workers - they merely artificially confer benefits on some skill sets at the expense of others.  In fact, to take it to its extreme, if you got rid of skill-based competition altogether, you'd end up with employers discriminating on much less desirable things like looks, skin colour, ethnicity, sexual orientation, and similar such considerations we wouldn't wish to see in the workplace.

So at least in one sense, employees don't need the kind of regulatory protection in the labour market that stops them working hard.  Just like the free market itself - competition between employees allows them to compete on an even playing field.  Here's an illustration that should help.  Suppose there's a specialised type of data-reader computer that is manufactured. If the most efficient computer-maker could produce such a computer at the cost of X, then X will be its market price. In a free market economy, competition between providers drives down the price of goods, which is good for buyers and bad for providers. To avoid price competition there could be collusion, where it is agreed that no one will sell this type of computer for less than Y, where Y is double the value of X. But imagine what then happens; providers who are no longer competing on price now start to do the natural thing - they compete on quality instead.  If I can make a better computer for Y than you can, I have an advantage, because our prices are the same, but mine has qualities or features that yours doesn't have. So the only way to retain the benefits of our collusive minimum price agreement is to restrict the quality of the type of computers being made - which is to impose maximum standards by ensuring neither of our computers is qualitatively better than the other one.  If you can see how absurd that is, you should have a sense of why employment regulations don't benefit those they're supposed to benefit.

You may say that regulations are good for a reason that seems obvious - they guard against over-working, which as a corollary guards against tiredness, aches, cognitive impairment, not eating enough and so forth. but I think this assumes the wrong thing twice over; 1) That arbitrarily designated times imposed by the Government are better than other times that could be imposed, and 2) That we are not the best at deciding what is best for us.  Not only are both of those manifestly wrong; as well, there is an incorrect assumption attached to it - that people only manage their own affairs because of legal precedents.  That's obviously not the case; the reason we aren't over-working or cognitively impaired or short on food is because we know best how to manage our affairs.  To offer an analogy; the reason supermarkets don't employ a member of staff to direct customers to checkouts is that it would be a completely superfluous job post, because we shoppers are just as good at assessing queues, the number of shopping items for each customer, the speed of cashier, etc as a paid member of staff would be.  The upshot is, employment laws conceal hidden costs that impair those they are supposed to protect - because we are the best at deciding our life patterns - and no one is a better custodian of our own destinies than we are, including our ability to sell our labour.

* Photo courtesy of bbc.co.uk

Tuesday, 20 August 2013

Why Your Partner Probably Wants You To Shave, Eat Well, & Be A Non-Smoker

In biological evolution, sexual selection is one of the processes of natural selection by which an organism increases its ability to attract and copulate with a mate (a famous example is the tail the peacock has evolved).  In humans, a modern form of sexual selection occurs in things like desire for clean-shaven-ness, eating well and not smoking - as these are seen to be attractive qualities.  Facial hair is associated with high testosterone, which is why in the old westerns the baddies were nearly always bearded and the good guy was usually clean-shaven (maybe that’s why the sheriff usually had a moustache – he had to represent the conflation of those two personalities).  It’s easy, though, to see why men shaving caught on – I should imagine the number of women who prefer clean-shaven men far outweighs the number who prefer men with facial hair.  But also, the number of women who would prefer not to go out with a hairy man is much greater than the women who wouldn’t go out with a man because he is clean shaven. 

The same is true when it comes to eating fatty foods and smoking – in terms of partnership costs and benefits, if you smoke and eat fatty foods you get all the benefits of indulgence (we're good at discounting the future - the costs come later) but your partner only gets the smoky breath and the flabby stomach and double chin.  If you don’t shave then potential mates incur precisely the number of costs commensurate with number of women who don’t like facial hair.  Therefore a man who eats well, doesn’t smoke and is clean-shaven is sexually selectable in two ways – not just because those things are more attractive, but also because it gives a potential female partner indication that you have the mindfulness for looking after your body.  This makes a man good husband and father material.

*Photo courtesy of ebritic.com

Saturday, 17 August 2013

When Benefits Are Really Costs

I'm amazed how often issues crop up in politics that lead me to question whether a particular politician is a muddled thinker or whether they are trying to pull the wool over the public's eyes.  Here’s a classic case in point. The HS2 project is a high capacity railway project linking London to cities in the North of England (such as Manchester and Leeds).  This might be a strange Hitchhiker’s guide-type phenomenon for many Londoners who have never travelled further north than Watford before, but never mind.

Both David Cameron and Nick Clegg have recently been raving about this report which details the benefits of HS2, including the creation of thousands of jobs.  Naturally the report is a bit vague on the precise number of jobs that HS2 will create with regard to organising, building and administrating the project – but the estimate is several thousand jobs, which Cameron and Clegg have both enthusiastically cited as major benefits of the HS2 project.  This is such an absurd claim to make that I can only infer, either that Cameron and Clegg have a muddled understanding of accounting, or that ‘employment’ is such a positive watchword for the electorate that they are trying to deceive the public by simply saying what people want to hear. 

It strikes me as fairly obvious, but job creation is not a benefit to the HS2 project – it is a cost.  Yes, if the HS2 project helps generate jobs by way of businesses starting up to capitalise on high speed transportation, then that can be included amongst the benefits of HS2.  But Cameron and Clegg hardly even gave that a mention – their preoccupation was on the benefits of the project’s inception with regard to jobs created for organising, building and administrating the project. 

To see why such jobs are a cost, not a benefit to the taxpayer, suppose for the sake of argument that David Cameron’s Government is about to spend £50 million on wages for a UK Local Government building project, but then found out that they could hire cheaper workers to do the job at the same standard for £30 million.  According to Cameron and Clegg’s rationale, they should hire the £50 million workers not the £30 million workers, because spending an extra £20 million on the project increases the benefits of the project, and is better for the economy.  That's absurd. It’s obvious that the £20 million saved is a benefit to the taxpayer, because it can be spent on other public goods and services.

The same is true in the real life example of the HS2 project; the labour required to organise, build and administrate the project is part of the overall cost of the project, not part of the benefits.  When politicians proclaim costs as benefits, it leaves me wondering whether they are muddled economists or disingenuous hoodwinkers. 

* Picture courtesy of itv.com

Saturday, 10 August 2013

Letter To My Unborn Child

I think a good rule of thumb for being true to your own convictions is this; don't do or champion anything in the name of a group that you wouldn't do or champion as an individual - for if you do so, you become a chameleon that fades into the colours of group think, and you compromise the autonomy of individuation.  Before you contemplate becoming immersed in the collective, make sure you become immersed in the liberation of your own individualism.  Rescue yourself from seeking refuge in group think, or from being transfixed on the false security of cooperative agendas, and first master the essence of your own individuality.  Only then will you really be a valuable part of a collective.
James Knight
 
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                                                                                                               Saturday 10th August 2013



My Dear Son or Daughter,

At the time of writing, you have not yet blessed your mother and me with your presence in this world.  If all has gone to plan between the time of my writing this and the intervening years that led up to the time of your reading my words, then today is your 16th birthday, and this letter is written for you from my past to your future – intended to guide you as you approach young adulthood.  I don’t as yet know if you are a son or daughter – but whichever you have turned out to be, I know you’ll have been told countless times, with sincerity of heart, that you are loved immeasurably by us, your parents, and that you have been more of a blessing than your mother and I could have ever imagined.  At the time of writing, I also don’t as yet know whether you are our much loved only child, or whether you have any siblings – but rest assured, if we are blessed with any more children, they too will share in their own copy of these words.

As you are aware, you have always been encouraged to make the most of your life, to seize every opportunity to fulfil your potential, and focus on learning ‘how’ to think well, rather than been taught ‘what’ to think.  If my hopes have reached fruition, then you’ve always valued independence of mind and willingness to critically examine propositions, and I hope as a father I’ve achieved my goal of trying to be an encouragement to you in all you’ve attempted to do, while at the same time allowing you the latitude of volition that has enabled you to make your own choices, and learn from your mistakes.

This letter contains what I hope will be a helpful guide to you in your immediate future, as you begin to take your teenage worldview into young adulthood, and formulate your opinions further, as you face the world’s ups and downs with more independence.  So for you, precious son or precious daughter, this is the recipe-like wisdom I have to offer you in preparing your mind for what is to come in the adult world – wisdom I learned on my own journey into young adulthood.  As a child I know how greatly enriched I would have been if my future, older (and wiser) self could have time-travelled into my youth to impart all he had learned henceforth – so I offer this to you now, dear son or daughter, in the hope that it will pre-empt the regret your future self may feel when he or she has not the option of sending that retrospective wisdom back through time to you.

Regarding what you’re about to read; once you can think this way as a force of habit you'll find you're able to tackle any subject with the utmost clarity of mind.  You'll also greatly increase your chances of spotting straight away what is wrong with any argument you encounter (if indeed it is wrong) - or if it's right you'll probably be able to suggest to yourself a better or augmented way of seeing its truth.  It all takes practice, of course - but you are in a good position, with everything still in front of you. The main thing is to always remember that these things take time, and that time to mature is a point in your favour, because if you diligently feed the human hunger (however dormant or latent it is) for mental and moral excellence, then with maturity you will find a continual sharpening of the intellect, and a recurrent building of your wisdom, as the pieces in the jigsaw begin to fit and exhibit a clearer picture.

So here goes.  To start with it's important to identify just what we humans are, because this will go some way to explaining why humans are so susceptible to error. 

1) Our evolution
We may live in a world of hugely populated cities, with skyscrapers, planes, computers, and worldwide travel - but don’t let those achievements fool you.  We have brains hard-wired for hunting in the Savannah.  Humans have been around for nearly two hundred thousand years – and yet we have been technological and industrial for only a few hundred years.  I’m telling you this because the sort of brains we have and the sort of creatures we are, were, I believe, never prepared to be rushed into a world like the one we have today.  We humans have relatively primitive brains in an environment that is now not primitive.  We have brains that thrive on simplicity in a socio-personal environment that is very complex, and we have brains that seek patterns in an environment where patterns are often scarce. 

The main reason this observation is important is because it teaches us to not have unrealistic expectations of people, and hence, to not accept something as true just because a lot of people happen to believe it.  That's a strong rule I live by - because of the above, you'll find you need to attune your radar to pick up when people aren't being particularly smart or logical, and when they are lacking much of the knowledge required to have a clear picture of the topics they debate.  It is because people are a patchwork of cultural biases and bad influences and habits from others that you’ll be wise to keep sharply focused.  Don't misunderstand me - it's not something for which they should be reproached; it takes an awful lot of work to attain a highly evolved mind, and few find it; but the good news is, it is available to you (and anyone else) if you (and they) have the tenacity to work towards it.

Moreover, the realisation that humans shouldn't excite our expectations is important because it helps facilitate love, grace and understanding, and encourages kindness and generosity in realising that often people are doing the best with the raw material they have.  All this is the first step in helping people off their pedestals – because years of experience of others has taught me that pedestals are not where we humans belong – and it does us no good to be put on them.  Don’t misunderstand; be charitable with praise where you feel it’s merited, and be keen to encourage and build up others with deserved compliments and generosity of heart – but help people down from their pedestals – it will do them no good to be on them in the long run.

2) The Necessity of Unlearning
A further part of the limitation of humans is the ways of thinking that have held most people back since childhood.  I mean this; it’s clear to me that we as humans have to unlearn lots of things that are instituted in childhood, because they are the sort of things that will eventually go on to impair our conceptual abilities.  For example, from the cradle upwards parents instil in their young a very black and white mental manifold, where ideas of right and wrong and cause and effect are instituted.  This is necessary for that time in the child’s life because children don't see the world through abstract concepts or probabilistic mental models; they require straightforward, tangible truths or facts to enable them to build a model of consistency in apprehending the world. 

Now of course, it's not that parents are at fault for helping their children process information in this black and white way; these things are necessary in childhood because the deeper realms of human subjectivity, abstract thinking and complex mental models are not engaged with until children reach greater maturity - and even then many teenagers struggle to see the world in non-polarising terms.  It is a bit of a catch 22, but some of the things that were necessary to make sense in childhood are things that go on to be very bad habits that will hinder us in young adulthood and beyond. I hope as you read this you will have found I did this for you when you were young – but always with the precaution that as you got older you’d be encouraged to broaden your perspectives beyond an overly-simplistic black and white view of reality.  A lack of unlearning bad habits is largely the reason that you’ll find so many people out there with the ‘If you don’t agree with me you’re wrong’ attitude and the ‘them vs. us’ mentality. They have lots to learn, but they also have a lot of unlearning to do. 

So, in order to reach great heights with our thinking, we humans have to rid ourselves of these bad habits by 'unlearning' some of the things that served us so well in childhood - and I fancy that this getting rid of bad philosophical baggage is something that not enough people manage to do.  Again, like most things, it takes two steps; first, awareness, and second, lots of practice. 

3) Everything we learn is gained from experience
Believe it or not, this isn’t obvious to everyone, but all our knowledge, sensory perceptions, emotions, logic, and auxiliary capabilities are the result of our cumulative experience of the world (either primarily one’s own experiences, or the experience of others).  This is one of David Hume’s most significant contributions to philosophy; he showed that it is only our experiences that enable us to form impressions of the world, and that those impressions are made from within the limitation of the human ability to form those impressions.  Without experience we would know nothing.  I’ll give you an extreme illustration I once thought up, which will show why.  Imagine we grabbed a baby from birth, stuck it in a room, kept it alive with food and liquid for 18 years, but at the same time we disconnected its ability to see, touch, taste, feel, and listen. The 18 year old brain would have none of the things I mentioned - he or she would be mentally moribund, devoid of any of the concepts ordinary humans have acquired through our experiences of the world.  So whatever you do, always remember this vital piece of wisdom; our knowledge of matters of fact amounts to explanations of descriptions of the ways external reality is after we have discovered something through experience.  If you always have this at the forefront of your mind you’ll become quite acutely perceptive to the errors I’m now going to talk about in 4 and 5.

4) Awareness of human constructs
Knowing that everything we learn is gained from experience, we then begin to see human opinions and debates for what they are – they are discussions about human constructs from the perspective of human constructs.  To expand the point, think of all the things that people talk about in debates that are constructed from mankind’s incomplete ideas on what ‘truth’ might entail.  Consider the following concepts that we focus on as talking points; morality, religion, race, country, species, virus, rich, poor, progress, prosperity, infrastructure, child, adult, education, goodness, depressed and marriage.  Those are a few words that popped into my head – and if we were to debate them at length we would go on for weeks, producing thousands of pages of text as we carried it through.  But notice something here – all of those words (and many more like them) are humanly created concepts – they do not exist as objective reality beyond the conceptions of men – they are abstract ideas that we cannot touch or feel or see.  The upshot is, when debating these subjects we are debating the ideas and thoughts of men and women, and we must guard against treating them as though they are anything more.

So be wary of what you catch people preaching or pontificating, and how they try to get you to concur with their views.  If all of these things are human constructs, then naturally humans brought them into this world – meaning the authority with which these ideas are propagated originates with humans too, and they are often based on numerous misconceptions and situational prejudices.  In summary, the strength of humans’ convictions is very often circular because most things are humans talking about human ideas as though they are objectively true outside of human self-referencing.  This leads nicely to number 5

5) Be wary of how ideas are formed and how they are passed on.
This is a very important thing to keep a check on.  Whenever someone makes a claim about something being true, don’t just ask where is the evidence for this, or what are the rational grounds for this belief, make sure you ask yourself how this claim is likely to have been brought into the world.  Whether it’s scientology, creationism, tarot, astrology, superstitions, coincidences, spurious lucky streaks, faulty ideas about numbers and patterns in nature, the many hundreds of religious beliefs, or anything of that kind - you’ll soon start to notice (if you haven’t already) how absurd many of these views are.  It’s not just because humans are clumsy thinkers who will come up with attractive theories that they think can convince others, nor is it even the fact that the past is full of charismatic people (preachers, dictators, heads of state, executives, cult leaders, celebrities, radicals, political figures, etc) who went on to lead astray millions of people or have them under their thrall.  It’s that intrinsically many of things people speak about as true or factual have little or no power when subjected to analytical scrutiny, and that this fact is largely concealed by long passages of time, after which people just assume there must be something in it when usually there isn’t.    

Here’s another good rule of thumb; if what is being taught is occurring from within a hermetically sealed discourse, it is usually the kind of nonsense that appeals to the gullible or to those who will willingly divest and delegate some of their critical autonomy onto a leader or figure of self-proclaimed authority.  The dead giveaway that exposes their falsity is usually that their central beliefs are at odds with some or many of the mainstream findings of empirical studies, which is why they mostly resist external scrutiny and dissuade their group members from engaging with the outside world.  Usually people who genuinely believe what they say, and hold those beliefs with confidence, will happily have those views subjected to critical examination, open discourse, and empirical study.  Those who have something to hide do not allow this.  So, my son or daughter, please do your best to ensure you always get a sense of how open someone is willing to be in discussing their views.  Embrace openness, but be wary of closed minds – they are usually like dead fish floating along with the flow of the river. 

What makes it harder for the untrained eye to detect nonsense is that when it comes to ideas, most of them do not stay in their original form; they are copied, changed, developed, reduced, and so forth – meaning that some initially good ideas can be disfigured into bad ones (and vice versa too).  Just like mutations in DNA, ideas (often called ‘memes’) are susceptible to duplication (the copying of an idea), insertion (where something extra is added to an idea), deletion (where something is taken away) and point mutation (where a part of the idea is changed into something else).  This means you’ll need concentration in assessing which ideas are good and which are not - and further to that, whether various interpretations of those ideas are (in your opinion) good or bad ones. 

On that point, ensure too that if you are to discuss anything with anyone, check beforehand what they mean when they use certain terms in their language. This avoids ambiguity, but it also exposes the deceivers quite readily, because, as I’m sure you’ve already sensed in life, many people compose a sentence comprised of terms without really having a clear thought about what those terms mean in relation to their point.  Clear, honest and rational thinkers usually won’t mind openness. 

6 and 7 involve two more helpful tips concerning knowledge. 

6) Most knowledge is not certainty, it is probability.
Have you ever stopped to consider how peculiarly people adhere to systems they believe are rigid?  They almost forget that most of the demarcation lines we adhere to (such as legal precedents, values, and moral issues) are humanly constructed, too often with minimal consideration for the arbitrariness of their composition.  This is illustrated best in the classic ‘Sorites’ paradox often attributed to Eubulides, who had a handful of beans, and in front of his students placed one bean at a time on the table asking them each time whether that particular bean made it a heap of beans.  They continued to say no, and then when the 15th bean was laid down, they said 'yes', that's a heap'.  The whole point of the paradox is that it’s absurd to just assume 15 or any arbitrarily designated number is a heap.  Why is 15 a heap and not 14? Why not 16? What about if Eubulides did the same experiment on another group of students and they thought a heap amounted to 19 beans?  What if one or two in the group thought a heap should be 20?  The take home lesson is that although people adhere to systems they believe are assented to with rational enquiry - most often what they are actually dealing with is arbitrary classifications that were first thought up by humans.  Whether an animal is one species or another, or whether a planet is a planet, or whether a virus is classed as a ‘living thing’, and questions of that kind, all fall within the purview of humanly constructed classifications. 

Regarding the question, when does a heap become a heap?  Clearly there is no ‘out there’ true/false line as there is in other aspects of human constructed logic.  The question 'When does a heap become a heap?' can only be answered in two ways.  We can say a heap must exceed n where n equals a designated number for qualification, but that method doesn’t always help us with the more complex subjects because we could then define our evidence and facts however we wanted in the most arbitrary way (we must be particularly careful not to do this with personal experiences). 

The other way to solve the heap problem is to say that the probability of calling the pile a heap increases with every bean added.   This is the correct epistemological route to take, because the world is full of many comparable examples, where things of which we think we are certain are really feelings we have based on probability estimates.  Everything that constitutes knowledge is arrived at analogously to the Sorites situation – each increase in evidence or data increases the probability of something constituting knowledge, where in each case we’ve decided where the demarcation line should sit (often with good reason, but sometimes not).  In life you’ll find no thought process occurs in a vacuum, as our discoveries and our constructs are inextricably linked. To discover is to construct, and to construct is to discover – and epistemic humility should govern your enquiries at all times, as the current word on anything probably won’t be the last word.  Think of how marvellous the modern world of hugely populated cities, skyscrapers, planes, computers, and worldwide travel would look to a stone age man, and magnify that marvel a hundred or thousand fold when contemplating what the coming years will look like when your present culture has equivalence with the stone age for future men and women. 

7) The truth about true and false
The second helpful tip is something that so few people realise – it is that only propositions are true or false.  You see, only propositions ‘can’ be true or false, nothing else can be – yet so many people base their views about truth on things that aren’t propositional.  By that I mean the following; for a statement to be considered true or false it must make a claim that is propositional, which means the statement must be able to be correct or incorrect when valued against some metric. 

For example, these statements are propositional; ‘All men are mortal’, ‘Sears Tower is the tallest building in America’.  These statements are not propositions; ‘It is windy outside’, ‘Blue jeans are better than black jeans’, ‘I like Casablanca’. Most beliefs, questions, observations and feelings are not true or false, because most are not propositions.  The strength of justification for believing a particular proposition to be true depends on the extent to which its truth can be demonstrated.  Propositions differ in the extent to which they can be shown to be true or false. 

Your sensory knowledge is everything derived from your senses (that is, touch, taste, smell, sound, sight), and can only be a fact or not a fact.  A further reason they are called facts is because they contain impermanence about them, or because they have the potential to be revised.  Truths are true irrespective of experience, whereas facts needn’t be, as facts change, and hence propositions about facts change.  If the Empire States building had some work done to it, it may then become taller than Sears Tower, which is why we use the terms fact, to denote its possibility of revision.  The other reason is that a perfectly viable fact can continue to remain a fact in one reference frame and yet be superseded by a more accurate fact in a more enhanced frame of reference.  For example, consider the relationship between the earth and the moon. This relationship cannot be a matter of truth, only a matter of fact, because science is only an internally consistent way of describing one aspect of reality (the physical), and remains distinguishable from the truths in real world.  This was demonstrated in the following way; Newton showed that the moon is in relation to the earth under the system F=GMm/r² - (which, as I’m sure you’ll know from your school physics classes, is a mathematical formula derived from an internal model of the mind which Einstein showed to be able to be superseded by a better matter of fact).  The Newtonian relation turned out to be approximate because it wasn't an explanation that acted at the preclusion of all other explanations (Newton didn't know about relativity or space-time curvature).  The upshot is, reality is describable in a multitude of ways, consistent with whichever lens through which we are assessing it (scientific, poetical, mathematical, theological, literary, to name but a few). 

The take home lesson here is that facts always require a context, which is why science gives us truths about reality only in the same way that chess does or language does - they are rules within a closed system we call ‘facts, and must only be called factual or non-factual on the basis that they are empirically evidential through the lens of human physical interpretation of reality.  It is the propositions about these facts that are true or false – so be careful with the language you’re employing, and watch for the way others misuse language in this way.    I have talked about ‘facts’ in a way that may surprise you – but the reality is, your knowledge of tables, chairs, buildings, and anything material is not classed as true or false, because such knowledge is also not propositional.  That’s a good golden rule - sensory knowledge isn’t true or false either – it is judgements about our perception of the outside world.  The brown, smooth left-handed crescent desk in front of me isn’t true or false – it is a medley of potential perceptions.  The colour brown isn’t true or false – for the shading changes according to my relative positions in the room, and my perception changes in accordance with where the light is shining in, and so forth.  The smoothness isn’t true or false – again, its texture depends on my reference point of observation.  From a distance I see the table as being smooth.  With a powerful microscope I see lots of pits and crevices.  That is why sense data of this kind is not true or false.  You can say that it is true that tables exist if you like, and I won’t disagree.  But you haven’t made any meaningful statement about what accounts of truth actually are.  Sadly, that is what you will catch many people doing.  Be wary of them. 

Mind in potentia
A few more points and I am done here. Time is on your side as the flowers of your mind bloom – and in the advent of bloom I encourage you to develop your interpretations of the foregoing considerations further into your years, as I have confidence that they will be immensely edifying for you.  See them not as authoritarian templates, but as recipes that require necessary input from you, as you invest meaning in them and attach them to your own personal pursuits in life. And just like food recipes in real life – they are only paper and ink awaiting culinary fruition when they are actioned into the production of wholesome food.  Recipes of the mind are no different.

That you have (I hope) had the kind of upbringing that has helped engender your already smart mind has, I believe, been in no small part down to what I’ve called the ‘six key tenets of personal development. I’ve said that we need to unlearn bad habits, but that also those learned aspects of childhood serve us well in growing up.  These are the tenets - where, from childhood to adulthood, I find that minds work best when they have had the following;

1) A mind that has been shown love and encouragement in order to will its highest intellectual development;

2) A mind that has been taught how to think not what to think, and has remained free from indoctrination, and had uninhibited access to all forms of education available.

3) A mind that has had the freedom to pursue all areas of information and knowledge it chooses, and remained virtually unrestrained in its pursuance of ideas.

4) A mind that has experienced the wide considerations of what others believe and why they believe these things.

5) A mind that is well equipped to assess complex subjects and work out the relationship between objectivity, subjectivity and relativism.

6) A mind that has been taught love for one another (even those against us), goodness, patience, kindness, and concern for one’s fellow human irrespective of their culture and beliefs.

These six tenets are the protective shield against extremism, fundamentalism and indoctrinated worldviews. If you can take the tenets into adulthood – maybe even as foresight for your own children – remember that these six key tenets do not just happen in our younger years – they are developed and enhanced right through to young adulthood, and then right throughout one’s life into old age.  You may have also noticed that these six key tenets are based more on the background, home life, culture and environment in which one was brought up rather than specific things one does.  Conversely the things we need to unlearn are not really to do with what we are – we don’t really need to unlearn our culture or environment – we unlearn the specific ways that we’ve been asked by our parents to view the world, and we unlearn by separating the epistemological wheat from the epistemological chaff.  A person who has an environment consistent with and conducive to the six key tenets, but who has gone on in mature years to unlearn his philosophical baggage from childhood, is the most likely to have rich wisdom and high intellection – and that is what I hope for you as you approach young adulthood.  . 

Closing wisdom regarding others
On courtesy, conduct and how you treat others – continue to afford value to what I’ve always taught you as being valuable – it has held you in good stead thus far and will continue to do so.  Continue to; respect authority when you feel it has been earned, but always be prepared to question what you've been told, and check if it corresponds with the facts as you interpret them. Never shy away from formulating your own views based on what seems rational to you, even if those views seem to depart from the consensus; if it turns out you're right you'll teach someone something or help them attain greater clarity of thought, and if you're wrong then someone will teach you something and you'll learn something new - so it's win-win for you.

Finally, keep faithful to what I've always taught you about treating others with love, grace, kindness, mercy, generosity, compassion and respect – and keep close to your heart the mindfulness of not discriminating against anyone on the basis of things that are beyond their control (skin colour, ethnicity, gender and sexual orientation). 

While I hope this has proved a useful insight – I think that’s about as much as I should include right now without sending your mind into overdrive.  I want you to know that I write all this as a very proud father – one who delights in the fact that your love, grace, kindness, mercy, generosity, compassion and respect for your fellow humans has held you in good stead over the years.  Whenever possible, always find ways to forgive others, as you look to see the best in people – and, last but not least, always be keen to search for the goodness in others, and make it easy for others to see the goodness in you.  Leave others in a better state than when you found them and you’ll increase the likelihood that they’ll do the same for you. 

I wish for you every blessing in the forthcoming years

Lots of love

Your Father

James Knight

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Monday, 5 August 2013

The Truth About Greed, Coercion & Exploitation

We haven't talked about greed, exploitation and coercion yet, have we?  Let's do it now.  I’ll come to greed in a moment – but, first off, the archetypal example of 'exploitation' or 'coercion' usually given is one of a rich company setting up a factory in a third world country and hiring impoverished workers to work for meagre wages, and in conditions in which virtually no Westerner would consider working. The other popular example is of a big supermarket franchise coming into town and taking customers away from local businesses. Now I'm the first to admit that (particularly in the first case) these conditions are not ideal, and that labour is being bought at a cheaper rate than I'd wish to see in an ideal world.  Nor would I deny that in a lot of cases the conditions under which such work is taking place in third world countries are of a far less good standard than we'd put up with in the developed world.  Finally, I'd also concur with the view that anything we can do to help improve the situation in any of these places is most welcome.

But despite those admissions, it is simply inaccurate to say that what's going on is 'coercion' or 'exploitation'.  To suggest anything to the contrary is to confuse 'coercion' or 'exploitation' with 'imperfect’ or ‘not ideal’ conditions. The upshot is; although it is true that workers in third world countries do long hours for little pay, and that small businesses often collapse due to larger and more competitive corporations, in most cases no one is being exploited or coerced.  When a new Tesco's store opens up in a market town, nobody forces the residents to switch grocery suppliers.  When a business hires workers in underdeveloped countries their situation is usually better than the alternative of not-working.  It may still not be as good as we'd like, but to call it exploitation or coercion is often a spurious and misjudged attack on success.

Imagine a man in Bangladesh working 65 hours per week to provide himself with just enough resources to survive.  A new clothes factory opens in his town offering him the 60 hours per week with a wage that enables him to not just survive, but live relatively comfortably.  Not only will he take the job, he will do it voluntarily, and benefit in doing so.  Typically, if the factory was started up by an indigenous young Bangladeshi businessman there would be positive vibes, but if it was brought to the town in the shape a rich American company, there would be lots of claims of exploitation.  Of course, I'd like the American company to pay the workers a better wage, but paying workers more than you have to is generally speaking not a good model for business, and the chances are that that clothes factory wouldn't exist if its shareholders had started off by trying to pay workers more they have to, because they would have been out-competed in the price market by the businesses that maximised their profits by paying workers as little as they had to.  

The truth is, in a free market economy where supply and demand are the driving forces, and monopolies scarce, the only way to exploit or coerce someone is to get them to act involuntarily by preventing them from buying the goods they desire at the most competitive prices.  In other words, coercion isn't occurring when Tesco's opens up a store in a market town and takes away business from local shops - coercion is occurring when pressure groups are preventing people from using Tesco's because they want them to pay more at local stores (again, I would prefer it if the locals paid that little bit extra to support their local businesses, but that's a different issue).

Here's a way to make it even clearer – let’s use an example of dating, which just about everyone agrees is voluntary.  Gary is the university hunk whose looks and intelligence gets him all the prettiest and most intelligent girls. Then along comes Mike, with better looks and even more intelligence than Gary.  Now all the prettiest and most intelligent girls want to date Mike instead of Gary.  Gary is put out, but he has no grounds for complaint because the girls have switched their attention Mike voluntarily.  To force them to ignore Mike and stick with Gary would be to prevent them from doing something they'd chose to do voluntarily.  There is no real difference between the dating illustration and the situation between the supermarket and the local businesses. In the shop model, Tesco's is to Mike as the local grocery stores are to Gary, and the customers are the girls who've shown their preference. 

So greed isn't always bad for the majority of beneficiaries, and coercion isn't very often seen in the places anti-capitalists claim it is?
That’s right. Even though there has been a lot of noise made about what people (usually on the left) refer to as corporate greed – it is erroneous to talk about greed as though it has the same effects as coercion or exploitation. It doesn’t. What I will say is, there's no denying that a greedy individual does a degree of harm both to his own psychology, and to his interpersonal relationships, as such people are often very self-centred, parochial and relatively disinterested in the emotional needs of others.  But the kind of aversion to greed that is peddled by academics in disgust directed at the corporate world, with accusations of multi-national companies 'exploiting' their workers and 'forcing' smaller companies out of business is, at best, only sometimes partially right, and at worst, completely spurious.  The real irony is that the arguments against corporate greed are usually made as an attack against unfettered capitalism - which is about as wrong as you can get.  Exploitation and worker coercion does occur in the world, but only usually when companies wield totalising and monopolising power.  If there's one place it happens in a much less damaging way it is in free markets where supply and demand drives the global economy.

Here's the real truth about the benefits of greed in a market economy.  Consider Greedy George - never has a man been so avaricious, and so voraciously hungry to obtain wealth.  But Greedy George can't force anyone to give him money, so he must earn it - and to earn it he must find someone willing to pay him, either for goods or services.  George's greed isn't necessarily detrimental to everyone else because if George wants lots of money he needs to produce goods or acquire skills for which others are willing to pay him big money.  To do this he must be innovative; and to be innovative in a competitive market he must come up with something valuable and beneficial to a lot of people, otherwise George won't satisfy his greed.  If he becomes one of the world's most popular comedians he'll entertain a lot of people; if he invents something that millions of consumers buy he'll sell a lot of something that people desire; but he won't force anybody to make him rich, so there's no exploitation or coercion. 

Greed can be destructive for the few – but when it engenders multinational success it has benefits for the many, because people won’t just hand over their money unless there’s something more valuable than that money in return.  Similarly, what can seem like coercion and exploitation to the untrained eye is usually nothing of the kind – it is usually consumers and workers voluntarily choosing a cheaper product and a more efficient method of obtaining it (supermarkets enable consumers to buy all their groceries in one place, as well as at a cheaper rate), or a job that even with low wages is an improvement on not having that job. 

* Photo courtesy of demotix.com

Friday, 2 August 2013

Love & The Singles Market



Is there an illustration that links being unemployed to being single?  You might like to consider the Beveridge Curve, which is named after the economist William Beveridge - the man responsible for the famous post-war 'Beveridge Report'. The Beveridge Curve graphs the relationship between unemployment and the job vacancy market, where the vertical axis shows the vacancies and the horizontal axis shows unemployment (see picture above). If you look at the diagram, you'll see there is a downward slope when we have higher unemployment and decreased employment vacancies. When we have increased levels of unemployment it means the labour market is inefficient, as jobs are either not being created, or vacancies are not being filled. This, like most markets, is a case of supply and demand. If we see high wages we'll see increased incentive to work but deceased incentive for employers to take on workers. If we see low wages then we'll see increased incentive for employees to take on workers but decreased incentive to work. 

The upshot of the equation is that a healthy labour market occurs when jobseekers and vacancies are closely matched. If the Beveridge Curve shifts outwards, when both job vacancies and unemployment rise simultaneously, then we have a failure to match jobseekers and vacancies - meaning something about the labour market is inefficient, and potential vacancies are not getting filled.

Can we apply The Beveridge Curve to the singles market? The relationship between two single people is similar to the employment market in the sense that each is looking to make a deal with the other; in the employment market it's an asymmetrical deal between those willing to offer their labour and those willing to pay for it - and in the relationship market it's a more symmetrical deal between two single people willing to offer their love, faithfulness and commitment to each other.

Now I haven't done any research on this, but I'm pretty sure that there are more single people in the present time in the UK than at any time in the past fifty or sixty years - and I'm pretty sure we all know why that is (anyone can see how the cultural landscape has changed since the 60's revolution). But by way of analogy to the labour market in The Beveridge Curve, is it the case that jobs (relationships) are not being created, or vacancies (single people) are not being snapped up? A healthy singles market occurs when the number of single men and women are closely matched. But if the romance equivalent of the Beveridge Curve shifts outwards, when single men and single women rise simultaneously then, of course, that doesn't mean an inefficient singles market - it probably means that in this contemporary age a lot more people are happier being single (by happier, I include being preoccupied with other things - studies, job, travel, culture of hedonism, etc).  It used to be the case that single people were stigmatised if they were not in a relationship; that you used to have to be married to have children; and that women's employment rates and career aspirations were significantly less than men.  Things aren't like that anymore - and in a world nowadays that imposes fewer social demands on single people, a lot more people are choosing singledom as a life choice.  

Now don't get me wrong, I think there are quite a few exceptional cases - but my intuitive feeling is that, in the main, being in love is one of the highest fulfilments a human has - and that to not have it involves a degree of emotional absence, and a hunger (however dormant) never fully satisfied.  Far from being uncomfortably yoked with another, being in love actually seems to give one a sense of freedom from the regular constrains of life that accompany the pursuit of fulfilment. This is brilliantly summed up by Alexander Pope…..

"How oft, when press'd to marriage, have I said,
Curse on all laws but those which love has made!
Love, free as air at sight of human ties,
Spreads his light wings, and in a moment flies."

Although Alexander Pope was a Catholic, his work shows a continual oscillation between Christianity and Deism.  The above quote is taken from his “Eloisa to Abelard”, which is an Ovidian heroic letter inspired by the Parisian Héloïse's illicit love for her teacher Pierre Abélard in about the 12th century. It has brutal undertones, but conveys an important truth that there are “laws which love has made” - and those laws are not formal systems that can be instituted, they are heart laws that tell us how to treat our beloved in the eyes of God, and can be felt and known intuitively if one seeks to adhere to Divine fulfilment.  In actual fact, one suspects that Pope was more sympathetic to Christianity than Deism because in his ‘Essay On Man’ he expresses support for the ways of God to Man by offering vindication in speaking up for God, rather similarly to how Milton did in Paradise Lost, by suggesting that man’s fallen nature in relation to God, and his compulsion to seek his own salvation, are sine qua non.  I suppose this also echoes the dictum from Polonius in Hamlet "To thine own self be true", because that's where the intuitions for love are at their most powerful.

* Beveridge Curve picture courtesy of econfix.wordpress.com
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