Sunday, 30 March 2014

Crimea River

As expected, with the tension in Crimea and the rather impotent threat of economic sanctions, some people on the left have used the opportunity to take issue with Russian ownership of UK business, complaining that profits made in the UK are sent overseas and are not being filtered into the British economy.

This is a foolish and absurd comment to make - it completely misunderstands the value of business and how financial exchanges are made. When a foreign investor looks to buy a UK business they pay less than the price at which they value it, and the seller sells for more than the price at which they value it. The buyer is buying a business that has been valued by the seller on the basis of future profits factored into the price. If Coventry Clive sells his tennis club to Moscow Mary he is exchanging his expected future profits for the buyer's price in the here and now. Moscow Mary on the other hand is buying the tennis club at a purchase price in the here and now in exchange for future profits henceforward to come.

So, far from any worry about her profits leaving the UK, when Moscow Mary buys the tennis club her forecasted profits are all contained in the purchase price which has just come into the UK. When her future profits leave the UK and go to Moscow they are future profits that have been paid for in the purchase price.

It is true that sometimes future profits will exceed the purchase price, but it is equally true that other times the purchase price ends up exceeding future profits. In fact, one might expect the latter to happen more than the former. If the buyer's offer was less than or equal to the seller's expected future profits then in many cases no sale would take place. Hence, in most cases the seller must value the expected future profits as being less than the buyer's offer - and every time this happens there is a net gain for the UK.

Finally, to criticise foreign ownership is often to be blind to other benefits. Take a Russian billionaire who buys a football club as a good case in point. The net gain for the UK is significant (and that's aside from the other ancillary benefits his wealth brings). In spending lots of money on players' wages he uses money that wouldn't have come into the UK economy to buy players whose tax from high earnings does come into the UK economy.

Don't listen to misguided politicians who complain about foreigners' profits going overseas - they are missing most of the picture.

What about the situation in Crimea?

Regarding the circumstances in Crimea, while I understand the fears about where Putin will go next, the actual situation in Crimea seems to me to be centred on a desired destiny that Westerners usually support - most notably self-determination and democracy. 

I can't see that mobilising troops, holding a referendum at gun point and claiming a democratic vote is something for which Putin would want to be thought responsible by his European associates. Thus, it seems to me that if he wanted to argue the case for democracy and self-determination for the Crimeans all he had to do was to push for a referendum under the rule of the Ukraine, observe that most Crimeans want to be Russian, and then push for that outcome. Given Ukraine's frosty reception from major EU countries, I can't think that he wouldn't have had a case, even perhaps being able to appeal through the conduit of international law. There are a few possible reasons why Putin didn't take that particular course of action:

1) He didn't think of it.

2) He did think of it but thought the Ukraine would be unwilling to offer the Crimeans a fair referendum without his intervention. 

3) He was feeling intense pressure from Russian people to stand up for fellow Russians in Crimea, so he took the more reactionary route.

4) He is starting of a series of aggressive military mobilisations under which he plans to annexe other small nations.

For me, 1 is highly unlikely; 2 and 3 are quite likely but if true then perhaps not really deserving of the Western reaction, and 4 is the biggie on which the European and American response hinges.

Let's discount 1. For me, 2 and 3 do not seem to me to be reasonable pretexts on which either Europe's elite or America can have too many complaints, particularly if you consider their military escapades in the past few decades supposedly for the cause of self-determination and democracy. Which leaves us with 4. Now I'm no fan of the Putin regime - but I can't help thinking that if Europe and America's present response has been because they fear it is number 4 then it seems to me to be an extreme response.

Whichever is the case, the Western understanding of local Crimea issues is bound to be both exaggerated and inadequate. People immersed in the immediacy of the troubles are going to have a broader and clearer perspective of their own troubles than those on the outside. Think of the difference between our perception of the Iraq conflict and those caught up in the Iraq quagmire. Imagine the difference between the UK perspective of the Syrian crisis and those actually afflicted by the tragedy. Or, if you want an example with the signs reversed, recall when the IRA were bombing on UK soil and remember the difference in reaction between the American government compared with the British government (and its citizens).

Just as the reality of the situation is felt much more intensely at home in those three examples above, it is bound to be the case that the Crimeans' push for self-determination regarding their own destiny and identity is much more meaningful to them than it is to us.

* Photos courtesy of Forbes and NY Post

Wednesday, 26 March 2014

Who Is The Chancellor Trying To Kid?

As I've explained before on this Blog, the notion of linking a CEO's pay to a company's market value is not a very reliable measure of the CEO's performance. Suppose a CEO receives a £2 bonus for every £200 increase in the market value of the company. That would be a more watertight system if the CEO was responsible for every pound of that £200. But that's not the case; a CEO of an oil company, an energy company, a steel company, or a timber company is not responsible for the fluctuations in the global demand for those raw materials, nor the global supply, nor the price of other raw materials linked to the production of the products. Consequently, a CEO who claimed he was responsible for his Timber company's 300% increase in market value would be being very flexible with the truth.

Anyone who understands economics would know this. I think George Osborne understands at least the basics of economics - which means he also probably understands that many of his claims of success in the recent Budget are also as specious as those of our aforementioned Timber company's CEO.

When George Osborne talks about his successes in relation to economic growth and lower unemployment (his two favourites) he is simply listing facts that are largely beyond his control and taking credit for them. Increased economic growth and increased employment are going on while George Osborne is chancellor, but they are going on in spite of his being chancellor not because of it. To take credit for this is to commit a fallacy called the cum hoc ergo propter hoc fallacy, which is a with event x therefore y causative fallacy.

I'm sure George Osborne knows how little Chancellors actually control the economy - so in taking credit for events that are beyond his causal power he must hope that enough people won't notice and will give him largely underserved credit. Also, let's not forget - taking credit for success stories gives them the ability to blame the opposition for unsuccessful outcomes in their past legacies.

In recent decades, the three principal causes for the UK's economic growth have been:

1) The flexibility of our market economy and the embracing of free market trade.

That was largely thanks to Margaret Thatcher's government and their pro-privatisation and deregulation reforms, as well as dealing with stultifying unions choking the British economy and inefficient British businesses that were being artificially propped up.

2) The prudent use of interest rates to manage demand at a domestic level.

That was due in no small part to our no longer being subservient to the Exchange Rate Mechanism.

3) The increased demand (and prices) for the knowledge-based services we provided throughout the world in a transition away from such large-scale manufacturing.

This was due to globalisation and the ability to capitalise on specialisation. Incidentally, when UK folk lament the loss of manufactured goods in this country, they often overlook the fact that we are still huge manufacturers - it's just that our production is not so much about goods anymore, it is much more service-oriented.

Once the Thatcher reforms were in place, and once we escaped the thrall of the ERM (both Conservative initiatives), future Chancellors like George Osborne were set up with a large box of cigars.

With that in mind we return back to George Osborne's Budget. The economy is getting better, but economies do - they fluctuate, largely independent of Osborne's initiatives. Here's an analogy. At the moment I feel really ill - I have a sore throat, I'm full of cold and I am continually coughing. Suppose I tell George Osborne that I'm going to take a couple of weeks off work and have lots of rest. Osborne says "No, that won't make you better - have some of my magic baked beans, they will make you feel better". I take them every day, but I still decide the rest will do me good. In a week or so I begin to feel better, and on seeing the improvement George Osborne tells me that it was my taking the magic beans that made me better, not the rest. Just as anyone who understands sore throats, colds and coughs knows that the rest would have made me better anyway without the beans - anyone who understands economies understands that global demand and global supply at both short-term and long-term levels are the decider of economies, not Chancellors. Chancellors do not exactly do 'nothing', but they also should understand that the national well-being is largely beyond their scope.

The same is true of employment - governments don't do 'nothing' - but they don't have much of a long-term effect on employment. It is easy to temporarily lower the unemployment level (apprenticeships and renaming statuses are two good ways), but if demand exceeds supply in the labour market, the successes will fluctuate and usually be short-lived.

The next time you see a politician taking credit for economic growth, be sure to scoff. And remember that exclaiming a strong causal link between the state of the economy and the performance of the government has a two-way effect - you can attempt to take unjust credit for good outcomes when you're in government, but you can also attempt to discredit previous governments by laying all the bad outcomes at their door. I'd advise that both should be undertaken with very sober judgement.  

* Photo courtesy of

Friday, 21 March 2014

Diversity: When It's Good & When It's Bad

An interesting turn up this week after the further developments in the big bang theory (not the sitcom), the Daily Mail's Ephraim Hardcastle made an insinuation that two women (scientists Maggie Aderin-Pocock and Hiranya Peiris) were invited to comment on the BBT report on Newsnight for the purposes of gender diversity rather than for their expertise. UCL Professor David Price responded by writing a very good letter of indignation to the egregious Daily Mail editor Paul Dacre (see link at bottom of page for full article)*. Naturally, it’s pretty obvious that Maggie Aderin-Pocock and Hiranya Peiris were brought in for their expertise and not because of their gender – but just as obvious to me is that any pressure felt by institutions to fill a particular gender quota for the sake of diversity is often a case of misunderstanding the true qualities of diversity.

When people extol the virtues of diversity they are often actually arguing against it. Suppose in a think tank there are two men - a white man and a black man, and they disagree on a particularly important issue related to the project. What's the most relevant difference: the difference in their skin colour or the difference in their viewpoint? Clearly it's the difference in their viewpoint. The resultant brainstorming would likely involve a revision of thought for one of them, or maybe a coalescence in which both were able to feed off each other and improve their views to strike a balance. Their diversity in skin colour is inconsequential to the task, just as would be the case if their main diversity was in gender.

Yet whenever we read about positive discrimination and increase in diversity we are usually reading about some attempt to get more women in Parliament or more ethnic minorities in an institution, as though gender or ethnicity are the real measure of diversity not viewpoints and ideas. Of course, you'll be inclined to argue that gender diversity and ethnic diversity brings diversity of perspective, and that's true, but naturally it's better to start with diversity of viewpoint and ideas irrespective of gender or ethnicity rather than starting your focus on gender diversity and ethnic diversity and hope it brings diversity of perspective.

The thing about diversity of viewpoints and ideas is that a balance must be struck. Too much diversity is bad because it leads to erratic thinking. For example, at a science convention I don't want the attendees to be such a diverse bunch that some subscribe to phlogiston theory, or young earth creationism, or astrology - because that involves so much diversity that it contains nonsense. But too little diversity diminishes the variance of innovation, and it stultifies the wider perspective, which is not desired either.

Moreover, it must be noted that diversity in science is not the same as diversity in the whole of the UK. Scientists have a tangibly shared goal of obtaining evidence and testing hypotheses to achieve a consistent body of theories that explain physical reality. A nation doesn't have such a tight shared goal, so it is harder to know the balance.

As a word of warning, it should be noted as well that what people say in the abstract often sounds good when it disguises what is actually meant in the particular. The other day I heard a priest from Northern Ireland state very eloquently that when there is diversity of opinion it is wrong to impose a too rigid standard on one kind of belief. Sounds good, and eloquently put, except that it turns out that he was talking about homosexuality - and the 'too rigid standard' he was worried about was the one that champions the liberty of homosexuals. I heard an Imam extol the virtues of adhering to the law of the land, only to later reveal that he won't be satisfied until the law of the land is Sharia Law. I once heard an American pastor castigate religious extremism with aplomb, until it emerged that the religious belief he found 'extreme' was one that denies a 6,000 year old earth. So be careful to read between the linguistic lines.

Lastly, what sometimes looks like diversity is actually the opposite of diversity. For example, it looks good for diversity that we have multifarious belief systems like Islam, Hinduism, Mormonism, Sikhism, and Scientology. But I think they are bad for humanity, and thus, I would love to live in a world in which such beliefs were weeded out of the population by rational enquiry and intelligent scrutiny. That is to say, they look like they increase diversity because they are different, but in fact, I think they are a lot of the same kind of falsehood, and they stifle diversity by locking people into spuriousness that can only retard diversity.

The pros and cons of diversity at a general level
Diversity has its downside of course - it can create tension, make communities inimical to community-spirit, impair social cohesion, and foster resentment because of cultural or linguistic barriers. Plus it creates perverse incentives to artificially engender diversity by legislation, which always brings with it the consequence of artificially disadvantaging others in the process. Further, in championing a diverse mix of people in the hope of eradicating prejudice it can have the opposite effect too, as spending more time with people different from you can cause you to realise how little you have in common with them and how little you like them.

But once people can transcend any feelings of raw tension and insularity they'll find diversity is a wonderful thing (although the fruition can take years). It is great for soliciting opinions, forming think tanks, forecasting, or debating topics, because a diverse array of minds is of huge benefit to the group or project. And that's to say nothing of all the socio-cultural benefits associated with diversity in friendships, integration, learning from one another, employment of skills, cuisine, fashion, art, crafts, engineering, and so on.

Finally, a lack of diversity can also be bad by virtue of the fact that reliance on one thing makes people vulnerable. The Great Irish Famine wasn’t just due to unfortunate infestations in potatoes – it was over-reliance on one single crop that severely added to the plight.  The Irish found to their cost that it is important to diversify, because diversity leads to increased qualitative change. It is largely because of diversity that you can be sure that our technology will continue to progress - we diversify our skills and our imagination by not having an over-reliance on too narrow a range, and this aids the human development in a multitude of ways.

Let's continue to champion diversity - but let's ensure it's the positive kind of diversity that's interested in ideas, viewpoints, personality and broad perspectives, not the spurious kind that has virtually no bearing on these qualities.  

* For a full look at the article mentioned in my opening gambit, see here  

** Photo courtesy of

Tuesday, 18 March 2014

Robin Hood Charity or Not Giving A Friar Tuck

You may have heard of a tax called the Robin Hood Tax - it's been getting a lot of attention recently.

The website I linked starts with the words - "A tax on banks..."

First things first, it's not a tax on banks, it's a tax on financial transactions.

And then it goes on - "The Robin Hood Tax is justice. The banks can afford it. The systems are in place to collect it. It won't affect ordinary members of the public, their bank accounts or their savings. It's fair, it's timely, and it's possible."

Ok, before we get to the positives, let's have a reality check - I'm afraid that's just not going to be the case - the cost of this tax will be borne by ordinary members of the public, largely through their pensions and/or their savings. Just about every tax of this kind is filtrated down to end users. If the government suddenly whopped an arbitrary tax on Argos, the result would be a price hike at Argos, and it would probably culminate in Argos going out of business. Similarly, a tax on financial transactions will hit the customer making the transaction, either in their pockets or in prohibiting them from making the transaction.

The big problem with the Robin Hood tax for individual nations is that any government implementing it will put its own nation's financial sector at a disadvantage compared with all the countries that do not implement it. It is potentially terrible for early adopters (as the disastrous outcome of Sweden's adoptions showed, who lost about 60% of their banking trade to the UK as a result of transaction taxes). Here's why it's bad for early adopters.

I said that if the government suddenly whopped an arbitrary tax on Argos, the result would be a price hike in Argos goods, which as a consequence would probably eventuate in no one buying anything at Argos. If the government suddenly whopped an arbitrary Argos-tax on Argos then customers would make a rational decision and switch to every shop that isn't Argos. In the analogy to financial transactions, the world's countries are represented by shops in the UK, with the UK being Argos. The imposition of transaction taxes on UK bank transactions by the government would be equivalent to Argos lobbying the government to impose an Argos-tax on Argos. That is to say, if the UK government introduces a Robin Hood tax on UK financial transactions in its own banking system, then UK financial services will simply relocate to countries without a Robin Hood tax, similar to how Starbucks, Amazon and Google use tax havens to do their accounting.  

For those who don't relocate, the Robin Hood tax would mean increased risks for speculative bankers, and a disincentive for ordinary users to save for the future. The general reason that taxes on banking transactions are unwise is that they have a different true value to their face value. As an analogy, take car insurance. Betty pays £350 car insurance to be insured by Admiral, but she knocks down a man and permanently disables him, costing Admiral £750,000. The true value and the face value differ by £749,650. A 10% tax on Betty's value costs her an extra £35. If Admiral taxes Betty 10% to insure against the full loss it's going to add £75,000 to her premium. This is what will happen in the banking world with transaction tax - it will encourage risk and injudicious spending for the bankers, and it will be an increase that is passed onto the banks' customers.

And as regards the disincentive for ordinary users - to give you an illustration of why a surcharge incentivises imprudence, suppose all banks implemented a 10% service tax every time you used the cash machine. In response people would make fewer withdrawals of larger amounts, and disposable spending would increase as a result.

Now let's look at the positives. The idea that relatively wealthy people can be taxed to give directly to relatively poor people has plenty of mileage - but that is the primary way on which Robin Hood taxes should be capitalised. There is so much need in the world, and in the absence of enough drive to do more, I support this kind of enforced-charity.  But if this is going to work properly, the effort needs to be a collective, with every developed country being co-signatories in this policy. This will guard against the disadvantaging of those who sign up for it.

What will also really help is when banking becomes more advanced, enabling individuals to simply place money directly in other people's accounts - it'd work like the sponsor a child systems work, but much more directly. This has been tried in Kenya with a charity called GiveDirectly - it is a charity that passes donations straight to poor families in Kenya (among other places) - and I believe it has yielded good results.

A similar scheme has been tried in Uganda too. Poor entrepreneurs are given grants by people like you and me, and they manage to achieve a high rate of return. This emerged from a study by Chris Blattman, Nathan Fiala and Sebastian Martinez. They helped the Ugandan government give out $10,000 to young people in various project groups, as well as some random selections. Per person, these donations worked out about twice the annual income of the young people in question. Blattman and his colleagues then tracked their stories over the following four years, and they found that many of the young people set themselves up in a new skilled trade or as budding entrepreneurs who were able to transform their opportunities and help others too.

Naturally in terms of meeting global need, projects like this are part of an incipient process. They are the first signs of what can emerge when the banking system can facilitate more and more personal accounts and easier access to charitable donations. Benefactors can sponsor individuals more directly; they can exchange letters, and play a more intimate part in helping those that that currently can't get themselves on a higher rung of the economic ladder do so.

While it is not without its problems, I'm all for the kind of Robin Hood Tax that helps lift the world's most desperate people out of poverty and into an economic system in which they learn skills and trade self-sufficiently in a country with right of ownership and a stable government enforcing the rule of law.

* Photo courtesy of creative-collaborations

Saturday, 15 March 2014

On Tipping

I hold the view that being generous is good, but equally that it is nigh-on impossible to be generous without also conferring a benefit to the self. Quite simply, being generous makes us feel good, so all acts of generosity are at least in some part self-beneficial too.

Tipping is a social convention whereby in most cases one's generosity aids lower paid workers. But tipping also encourages a better relationship between service provider and customer, and it incentivises a better service too. This varies, though, according to the service. When we tip taxi drivers we pay into an optimisation ethos which encourages every customer to give a tip and encourages every taxi driver to deliver a good service. I suppose a good service for a taxi driver is turning up on time, not taking a circuitous route, and being friendly and chatty. Given that we expect the first two as being integral to the service, I suspect the tip variance is mostly to do with the personality of the taxi driver. I feel more compelled to tip a friendly talkative taxi driver than I do a terse grumpy one.

When it comes to waiters and waitresses I think things are different. Tips for waiters seem to be part of a social custom that increases their low wages to a more decent level. I'm not sure that is as bad as many people claim. A tipping system helps restaurant owners employ good staff - the more reliant a waiter is on his or her tips the greater the incentive staff have to be friendly and proficient. If wages were higher then prices would be higher too. Lower wages and tips means lower food prices and the same wages for waitresses. An optional tip service incentivises friendliness and proficiency, and leaves it to the customers' discretion whether or not they want to contribute to the wages of the staff. Price-sensitivity is a factor too. With tipping policies more generous customers pay more for their meal by leaving a tip than stingy customers do by not leaving a tip.

But whichever way we cut the cloth, there is little rhyme or reason to it. There are many low wage workers that we do not tip due to a lack of social custom. And similarly there are people who earn more than us that we still tip due to social custom. We don't tip staff behind an information reception desk, nor the till operator in Sainsbury's even though many of them earn the same sort of money as hairdressers and window cleaners whom we do tip. Conversely, a taxi driver probably earns more per hour than many of his low wage tipping customers, and a painter or builder is often tipped by clients less well off than himself.

Clearly a big factor in tipping is service and intimacy. The relationship a client develops with a builder working on his kitchen for three days may be sufficient to make him feel compelled to offer a tip. On the other hand, a McDonald's worker who earns less than your builder probably won't get a tip on the basis that they only spend a minute serving you.

In restaurants it is often the case that tips do not go to the individual waiting on you but into a collective tip jar that's shared out at the end of the week (this is classed as taxable income in the UK by the way). Is this a better policy than each individual keeping their own tips? Mostly yes. Although there is one obvious exception. When tips are pooled there is less incentive for Lazy Larry to work super hard and be super polite. If he under-performs he can still be carried by Diligent Dave and Hard-working Helen, and reap a proportion of the total tips collected. But aside from that, it seems that the policy of sharing out tips works best, because it means the bar staff, and staff behind the scenes receive a share too and are not penalised for not dealing with the customers directly, despite working just as hard and being on similarly low wages.

Lastly, I've considered that tipping is a sign of generosity which confers benefits on the self - and that this is probably primary over our desire to help low earners. To see why that might be the case, consider this hypothetical scenario. You're on holiday in Cornwall, eating on your own in a restaurant you're never likely to visit again. There is one other customer in the restaurant. A coin will be flipped; if it's heads each of you leaves a £5 tip on your table; if it's tails the other person leaves £10 and you leave nothing. As far as helping low paid workers goes, both results are exactly the same - but I'll bet most people wouldn't be wholly indifferent to how the coin lands.

The upshot is, the world of tipping is built on social protocols and on conferring pleasure on the self by distilling pleasure from being generous. It is not all about helping low paid workers, because there are a lot of low paid workers that is it not customary to tip. It is not all about performance, because we tip people even when they have under-performed. It is much to do with the good that comes from generosity and the rapport developed between clients and service providers over a sustained working period.

Just a closing thought: if being deserving of a tip is predicated on a sustained short-term relationship, low pay and (in addition) importance of the service to you, then perhaps nurses and firemen are good candidates for tipping.

* Photo courtesy of

Tuesday, 11 March 2014

Euthyphro’s Dilemma Solved

In Plato’s famous dialogue we are given the classic philosophical conundrum called Euthyphro’s dilemma:

Are things good because God commands them, or does God command them because they are good?

(NB: Good here refers to a standard of good distinct from God and to which God may be subject).

Apparently we are told that philosophers, theists and atheists have debated this for centuries, continually reaching a stalemate.  When I first read Euthyphro’s dilemma in my formative years I couldn't really see why it was such a poser - it seems pretty easy to solve with a little economic analysis.

If what is meant by God is the God who is thought to be omnipotent, omniscient, omni-benevolent and the all-loving creator of everything in nature, then it stands to reason that God does not command good things because they are good, because that would be to suggest that goodness has an existence independent of God.  I don't think a creator God that has the properties of omnipotence, omniscience, omni-benevolence and all-lovingness can be subject to a standard higher than Himself, because if such a God exisits then 'omni' properties contain the very properties from which such qualities emanate.

Given the foregoing, it must be the case, then, that things are good because God commands them. And unless we want to make the injudicious suggestion that a God with 'omni' properties commands anything arbitrarily, we must say that the goodness that emerges because God commands it is, in fact, due to God being the epitome of goodness. Hence, there’s no real problem if we say that qualities like goodness, love and grace are inherent properties of the Divine mind, and are thus inextricably attached to Divinity. 

The solution to Euthyphro’s dilemma seems quite straightforward to me. Things are good because God commands them, but God commands them because what is being commanded is an inherent part of, and inextricable from, God's own nature.

* Photo courtesy of christian.resourses

Saturday, 8 March 2014

This Disgrace Mustn't Go On....

When people in poorer countries can't trade freely, they suffer. One of the biggest barriers to free trading for poorer people (like many in Africa, Asia and South America) is when they are priced out of the market by richer providers (like Americans). If this was going on in a free market capacity there would be less to object to - but it isn't. Government subsidies and high tariffs on imports are two examples of how richer countries are distorting the free market by preventing poorer countries from competing to sell their resources. The European Union subsidises European farmers and the American government subsidies American farmers, placing African, Asian and South American farmers at a huge disadvantage, because they cannot easily sell their own produce as they are unable to compete with richer countries in the price market. When George Bush affords American farmers 180 billion dollars in subsidy deals to buy American votes (which he did when he was President), he depresses prices across the globe, which robs unsubsidised (and much poorer) Africans Asians and South Americans of their ability to be able to sell their crops competitively in the global market. This costs poorer countries tens of billions of dollars in lost revenue.

When President Roosevelt originally set up farmers' subsidies, the policy was intended as a temporary plaster over the bleeding wound of the American depression. In the modern age where we have a widespread global economy, these government subsidies and import tariffs are a disaster for those struggling to make a living in the developing world. To their credit, New Zealand, a country more dependent on agriculture than America, ended their farm subsidies in the 1980s when the government was short of money - and the whole country has seen hugely positive rewards as a result.

In subsidising farmers, the governments in question don't just disadvantage those struggling in developing countries, they retard innovation locally too. Stopping the subsidies helps farmers explore new market potential; it incentivises them to innovate, to diversify their output, and to generally be more economically prudent without government funds to fall back on. When a government subsidises farmers it removes some of the need to run a business in accordance with market demands and price fluctuations. Non-subsidised business owners are much more alert to profit and loss signals, just as any business that makes decisions with other people's money tends to make those decisions less prudently than with their own money. Furthermore, business owners who receive subsidies try to curry favour with the politicians handing out the cash, when they should be trying to win the customers by providing a good business practice and competitive prices.

Farm subsidies in the shape of the very rich giving to the relatively rich at the expense of the relatively poor are a disgrace - and no nation can claim any kind of moral accomplishment in the global scene while they continue to engage in this egregious policy of subsidising their own at the expense of those desperate to get a stronger foot in the free market.

* Photo courtesy of quicktake.wordpress

Thursday, 6 March 2014

What Are You More Afraid Of - Cancer Or Hell?

I'm pretty well read when it comes to the works of George Orwell. Here, though, is a quote from Orwell that I hadn't come across before:

"Belief in the next world does not influence conduct as it would if it were genuine. Most Christians profess to believe in Hell. Yet have you ever met a Christian who seemed as afraid of Hell as he was of cancer?"

George Orwell finds it irrational that people aren't more afraid of something as eternally terrible as Hell, in comparison to something as temporally terrible as cancer. Orwell is missing something obvious here. Most Christians aren't afraid of Hell because they feel confident that they won't be going there. And presumably most atheists aren't afraid of Hell because they don't think it exists. Therefore, it would make sense for fear of cancer to be more ubiquitous in this world than fear of Hell.

* Photo courtesy of 

Tuesday, 4 March 2014

An Inconsistency In The Judicial Process

A thought occurred to me today regarding an inconsistency in the judicial system - one that you may not have noticed. Prior to being called as a juror for a case, the court ensures that none of the prospective jury members knows anyone involved in the case for fear of compromising it. This is fine - any information that could impair a juror's impartiality is rightly declared beforehand. But as far as I know, the court never asks whether would-be jurors wish to disclose any strong moral beliefs or traumatic experiences that would compromise their ability to judge the case in a balanced and impartial manner. This seems to me to be a case of guarding against one kind of potential impartiality while at the same time blatantly failing to guard against other potential impartialities of a moral or emotional kind.

Suppose you're an innocent female biologist on trial for malpractice. You'd probably want to feel assured that no one in the jury is a fanatical creationist who thinks that all evolutionists subscribe to Social Darwinism. Or suppose you're an innocent Polish immigrant on trial for mugging a British pensioner. You'd probably want to feel assured that no one in the jury is an anti-immigrant xenophobe. Or suppose you're an innocent Catholic priest accused of child abuse. You'd probably want to feel assured that no one in the jury has suffered horrific abuse in a Catholic Magdalene asylum in their own childhood. Or lastly, suppose you're an innocent black youth on trial for beating up a white youth. You'd probably want to feel assured that no one in the jury is a hardened racist.

If the pre-trial policy is that information should be disclosed if it could affect a juror's ability to assess the case impartially, then strong moral beliefs and traumatic experiences ought to fall into that category too, because they can have a significant impact on impartiality. Given the relatively short time it would take to invite prospective jurors to disclose these potential partialities, I find it an oversight on their part that they are not part of the court's considerations.

To read an older Blog post of mine on further judicial flaws, see here.

* Photo courtesy of