Friday, 27 February 2015

On Interventionist Foreign Policy

Interventionist Foreign Policy does throw up some interesting situations, where ‘interesting’ sadly often means ‘bloody awful’. The West has contempt for Assad's government in Syria, where initially any insurgency against him was thought by many politicians to be the lesser of two evils. Similarly in 2003 Blair and Bush thought they were making Iraq a better place by removing Saddam, but over a decade later the country is now overrun with Islamic fanatics who make Saddam’s Ba’athist regime seem like the lesser of two evils.

Islamic State was, of course, one of the insurgency groups against Assad’s regime in Syria. Now they’ve seized lots of Iraqi territory, and regularly slaughter innocent people in front of cameras. And if you want to go further back you may also recall that our enemies in Afghanistan were once our allies against the Soviet Union.

The wisdom of all this is that our foreign policy has to be based not just on the present but on our past legacies and on future forecasts too. It’s not too difficult these days to consider military intervention against a government or group that was once our ally against some other government or group we disliked. Equally it’s not too difficult these days to consider military intervention against a government or group that will one day be our allies, just as we regularly consider that current allies may well be enemies in the future.

Consequently, in order for our foreign policy to be prudent, politicians must correctly ascertain which governments or groups are going to be our enemies and which are going to be our allies henceforward, otherwise they may get into wars trying to defend Iraq (Japan) from Iran (China), and soon find out that Iran (China) are very useful allies against ISIS (the Soviet Union).

 
* Photo courtesy of rackjite.com

Thursday, 26 February 2015

Favourite Screen Characters Blog Hop

I've been tagged by the very good writer Kris Holt to participate in the Favourite Screen Characters blog hop. It’s a simple, fun hop in which you name your ten favourite TV or Movie characters, and then nominate some people with a Blog to do the same! Here are mine, in no particular order:

Lisbeth Salander from The Girl With The Dragon Tattoo
An absolutely mesmerising, scene-stealing character who you just can't take your eyes off. She's introverted, anti-social, vengeful, vulnerable and dreadfully damaged, but is also a brilliant computer hacker with an eidetic memory, who never fails to surprise all who stereotype or dismiss her.


Fitz from Cracker
In arguably the best British drama of them all, the acutely perceptive but hopelessly flawed and undependable criminal psychologist Edward "Fitz" Fitzgerald is the pivot around which all the police investigations and domestic commotions revolve. This is the role Robbie Coltrane was born to play.
 

Sir Humphrey from Yes Minister
The pompous, arrogant yet loveable Oxford-grad wordsmith makes a hugely funny and erudite Permanent Secretary to his less well informed Minister Jim Hacker - frequently using his superior command of language and more comprehensive grasp of the political system to obtain the results he requires. Possibly British sitcom's best ever character.
 

George Costanza from Seinfeld
Seinfeld is probably the best sitcom ever made, and perhaps with the best characters of all. George is a litany of qualities and traits - full of clever observations, but always held back by his neuroses and self-deprecation, which comes from the fact that he is, at heart, a self-serving arse who never quite works out how to rescue himself from the parochialism of his plight. The interactions between Jerry, George, Elaine and Kramer are pure comedy gold, and, for me, have yet to be matched anywhere.
 

Celine from Before Sunset
There's something invigorating about two people meeting on a train and having the spontaneity and adventure of heart to spend the day together in an unfamiliar city, leaving themselves open to what develops. Celine is an attractive person with whom one could have a string of interesting conversations - and in the last quarter of Before Sunset (filmed in real time) we see the whole gamut of emotions that sum up what the vulnerabilities of love do to a person.
 

Hannibal Lector from Silence Of The Lambs
 Yes it's true, there's a slight fault with this character in that he's a murdering cannibal. But behind those staring eyes there lies a sophisticated, classically educated polymath with a towering intellect, and without whom the world would be a less interesting place (this is observed far more acutely in the books than the films). Naturally, given his cannibalistic proclivities, the viewer is somewhat torn regarding the desired trajectory of Dr Lector.
 

Larry from Curb Your Enthusiasm
The creator of Seinfeld plays himself in this terrific sitcom, based on Larry David's worldview. Due to Larry's moniker as 'The social assassin', each episode is littered with punchy perceptions about people and social situations that you've felt all along are accurate, but have always been too courteous or reticent to say out loud.  Larry says what most of us are thinking, and what most of us would say if ordinary social protocols were suspended for a time.
 

Penny Carroll from Swing Time
Oh how I love the Fred Astaire & Ginger Rogers musicals of the 1930s - they are the most wonderful kind of escapism, and perhaps the most apt movies about which one can say "They don't make 'em like that anymore". Penny Carroll, like many of Ginger's characters, was smart, self-assured, beautiful, artistic, and more than a match for any male that tried to pursue her. These are classic boy meets girl, boy nearly gets girl, boy loses girl, boy ends up winning girl's heart movies - and you're always rooting for Fred Astaire's character because Ginger Roger's characters are so alluringly winsome.


Jimmy Porter from Look Back In Anger
 A superb play by John Osborne, and in Jimmy Porter we have a great leading character for whom the frustrations of other people's unwillingness to think, engage and explore the depths of their cognition perpetually angers and frustrates. Often he's unmercifully harsh, but like most harsh intellects, what lies in the subterranea of their personality is an agglomeration of frustrations and disaffections towards mediocrity and a failure to maximise potential.
 

Sheldon Cooper from The Big Bang Theory
 Whether it's with his rigidly logical put-downs and intellectual prowess at the expense of others, or his near inability to get to grips with the socio-personal need for empathy, thoughtfulness and reading between the lines, this genius of a theoretical physicist has become The Big Bang Theory's biggest draw, despite being surrounded by a whole host of other excellent characters. Perhaps the best praise I have for the character is that I can't ever remember a dull moment when Sheldon has been on screen. He's even starting to get to grips with sarcasm, bless him.
 

That was my 10, but here are a few other excellent characters worth a mention:


Norman Stanley Fletcher from Porridge
 
Johnny from Naked 
 
Elaine Bennes from Seinfeld
 
Norma Desmond from Sunset Boulevard
 
Frasier Crane from Frasier
 
Randall P McMurphy from One Flew Over The Cuckoo's Nest
 
Jessa from Girls
 
George Kellerman from The Out Of Towners 
 
 Karen from Outnumbered
 
Carol from One Night 
Robert Dupea from Five Easy Pieces  
 
 
 

THE END
(Thanks for reading)
 
 

 


 

 
 
 

 

 
 
 

 

Tuesday, 24 February 2015

We Must Defend People's Right To Demonstrate Free Of Charge


Libertarians generally subscribe to several maxims. Here are two:

1} That everyone has the right to express their views, providing their expressions are within the orbit of the law.

2} That it’s a good thing when people feel the effects of the social costs they impose on others.

A recent debate on Radio 2 - about street demonstrators possibly having to pay to protest after police look to refuse to close roads for them to demonstrate – pits these two maxims against each other. However misjudged we find the views of groups like "The Campaign Against Climate Change", "The People’s Assembly Against Austerity", "Global Justice Now", and "Friends of the Earth", there is clearly a case here of the immovable object of people's freedom to protest coming smack bang against the irresistible force of valuable resources being exhausted by the presence of these demonstrators on our streets, in this case in the shape of exhausted police resources, blocked roads, temporary traffic regulations and potential disturbances of the peace.

On the one hand we wouldn’t want a situation where people’s right and ability to protest was predicated on their ability to pay. But on the other hand we want protesters to feel the costs of their actions. So while we are all for defending people's prerogative in being able to demonstrate against actions they dislike - when those actions come at a social cost to others, some are arguing that it is not particularly unreasonable that they should pick up the bill for these negative externalities imposed on others.

It may not be unreasonable, but I don't think it should be desired either. The state chooses to have a police presence at a demonstration (it is compulsory to notify the police for any planned demonstration), not the demonstrators. A very risk-averse state apparatus operates under the ethos that modern life is safe but expensive. Any restrictions of this kind on the ability of people to protest legally is bound to retard freedom of expression, and at the same time increase the likelihood of people protesting illegally - and that is not likely to make organised demonstrations any cheaper or safer.

Monday, 16 February 2015

Do We Already Have Too Many Books In The World?


And by books, I mean works of fiction - there is always going to be the need for new works of non-fiction (for obvious reasons). Whichever conclusion you reach, I think you're going to find the question interesting.

In a recent Blog post I explained an interesting way that we could justify the contention that top sports stars could be argued to be overpaid. If we hold the view that sports stars are overpaid because wages have escalated beyond their reasonable level of utility, we can extend that kind of consideration into books too, because the writers' market is a noteworthy one for this kind of thought experiment. Consider how many books of fiction you think you'll get to read in your lifetime. You'll soon realise that when you compare the average reading time most of us afford ourselves in a lifetime against the time it would take to read all the excellent books ever written, it's clear that there are many more excellent works of fiction in the world than you'll ever get a chance to read. In other words, there are enough books in the world already to keep every one of us replete with good reading material, which in market terms could suggest the world doesn't need any more books written.

Now don't misunderstand, as we'll see in a moment, I am in favour of more books being written, and I'm glad that book writing doesn't come to a halt - but if there are enough high quality books of fiction in the world already, this suggests that every new book of fiction written imposes a social cost on the world.

You may protest that if, say, Donna Tarrt produces a new novel, and you buy it and really enjoy it, then that novel has brought about a social benefit to your life (and doubtless many others), not a social cost. To see what's wrong with that protestation, let me first briefly explain how markets give exhibition to social costs.

The writers' market is one of those oft-called winner-takes-all markets* (much like sport, movies and music industries) where those at the top-end of the profession earn very large sums of money and the rest comparably very little. But yet it is the allure of those very large sums of money (and the social kudos) for which many entrants still try to break into the writing market - which amounts to each new entrant lowering the probability for every other person in the writers' pool. Because of this, new entrants into the market have a very low probability of success - such low probability, in fact, that many of them would confer more societal value if they tried their hand at something else instead.

Because of the efficiency of a supply and demand market, price signals direct extraneous resources to their most valuable and effectual uses. When there is a surfeit of a resource there is supplier gain in re-direction. Or put more simply; in a world with too many apples, the market says Bob the greengrocer would be wise to buy more oranges and bananas. Consequently, then, in a world with enough books already, the market says a great many budding authors would contribute more value to society if they did something else.

Your willingness to purchase a Donna Tartt book for £10 is not just about conferring £10 (or more) worth of value to you, nor is it about the money that goes to the Tartt estate - it is about the total societal gain measured against the societal costs. To make things clearer, imagine it's just Donna Tarrt and you in the transaction, and multiply the ratios for a wider audience. Donna Tartt figures that with £7 worth of effort she can produce a book for which you will willingly pay £12. By selling it at the retail price of £10, Donna Tartt induces you to buy her book instead of buying a book from the list of superb books already written. In buying her book, the societal gain for you is £2 pleasure (because you paid £10, and valued the book at £12) + the reading, and for her it is £3 (because she expended £7 worth of effort and sold the product for £10), making a total societal gain of £5**.

The point being, to say that every new book contributes little societal value overall is not to say they are not good books - it's to say that there are hidden deadweight costs, not just in the already superb books not being purchased, but in the fact that in writing these new books society is being robbed of whatever else Donna Tartt would contribute to that society if she weren't writing novels. Whatever she would have done as an alternative to writing - a mobile hairdresser, a psychologist, a baker, a jewellery maker, or whatever the market dictates - is what is missing from the world due to her being a writer. So we have to factor in not just the £5 societal value from a Donna Tartt book, we must include the hairdressing she never undertook, or the psychotherapy she never practiced, or the bread or jewellery she never made, as well as counting the cost to the estates of the aforementioned past excellent authors in the list of books that make up all the books we need, and of which we already have enough.

Notice this is the same conclusion we reached with the top paid sports stars in the last Blog. Just like Donna Tarrt, it is the societal value lost by choosing sport instead of whatever else they would have done. If this kind of thinking seems strange to you, it's probably because you're not used to paying attention to those deadweight costs that hide behind the more palpable benefits that grab the attention first. Conversely, though, it's worth noting that many writers enjoy writing to the extent that even if they remained unpublished the projects would still be intrinsically rewarding enough to confer net benefits on the writer - and that must be offset against those deadweight costs.

As well as that, and despite the question "Do We Already Have Too Many Books In The World?" being an interesting one" (and despite evident social costs with every new book), I will now say why I still want to see new books being written so freely. The assumption that enough superb books have already been written to satiate us for a lifetime is possibly a precipitous and ill-conceived one - because who is to say that future writers won't take literary writing to a whole new level beyond our current expectations?  Just as some people in Roman times thought every invention that could ever be invented had been invented already, so too might the people brought up on Homer, Herodotus and Sophocles have hastily thought that this is the best literature can ever be.  How wrong they'd have been. Just as the Greeks and Romans couldn't forecast what was to come with the likes of Dante, Shakespeare and Flaubert, so too might we be ill-equipped to foresee what kind of literary quality might lie ahead in the future. Therefore we might be missing out if we assume everything that has already been written is enough.

And as well as saying that we really have no idea what future writers will produce to confound our expectations, and that they may well take literary writing to a whole new level beyond our current anticipations - the other important thing to say is this. Let's say on that basis of market superfluity we stopped producing works of fiction from this point on. There is another caveat that must be brought to bear - namely, for how long would we keep this up? Because humankind would eventually reach a point at which all books were so old that there would be nothing in the fiction market to which those with a contemporary backdrop could relate.

In conclusion, then, even though in terms of time and reading potential there are actually already enough books in the world already to keep every one of us replete with good reading material, and that in a winner-takes-all market each new entrant into the market lowers the probability for every other person in the writers' pool, I think we should prefer that books of fiction do actually carry on being written - the deadweight costs are probably compensated for by the treasures thrown up. One thing though - while you continue to enjoy the fresh and current material, always try to find time for the classic works of literature if possible. You won't be sorry!

 
* This notion was first popularly posited in Robert Frank's well known tome - "The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us", and has now become standard fare in most popular economics textbooks.

 
** Now, of course, writing a book takes more than £7 worth of effort, but obviously the marginal value scales up per item where the book only has to be written once, and sales can keep increasing while the net effort costs do not increase.

Wednesday, 11 February 2015

Are Top Sports Stars Actually Overpaid Or Not?


This is one of the longer Blog posts I've written (at just under 3500 words) - but if you are the sort of person who a) reads my stuff regularly, or b) is interested in this particular subject, then you hopefully won't mind its lengthier nature.

I've just read that Sky and BT Sport have paid a record £ 5.1 billion for live Premier League TV rights, which amounts to a 70% increase on the current £3 billion deal. It's a good time, then, to ask the question: Are top sports stars like the highest earning footballers overpaid? I think they are, but not for the reason you might imagine. In actual fact, the standard reason given for why the top footballers are said to be overpaid is, I think, misjudged. The usual argument is that it is obscene to reward footballers with the same money in a week that a heart surgeon gets in a year, or a soldier defending his or her country gets in several years. The odds are some of you reading this now probably hold that view. Here's why that view needs redressing. What people earn is not an issue of moral probity, it is an outcome of market forces related to supply and demand. If a footballer or actor can generate millions of pounds per year more than a nurse or a soldier we are not seeing immorality, we are seeing what people are prepared to pay for a certain skill or service they value. Of course you'll respond by saying that we 'ought' to value a nurse or soldier more than a footballer, musician or actor, but market processes give clear demonstration that we do not.

Quite a few people can be nurses, but only one person can be Jim Carrey or Meryl Streep. And preferences are made up of a collection of the individuals in society, so there is no logical argument that says it's unethical if more people value multi-millionaire Meryl Streep than an individual nurse on £25,000 per year. There is no way to judge the 'fair' pay of a film star, a nurse, a bookmaker, a chemist, a taxi driver or a bouncer except by the demand for what they do and how much those skills and services can generate through market processes. It's not my fault that a soldier gets paid less than a top footballer, and nor is it yours, but it is ours, where 'ours' means everyone in society.

In a supermarket customers pay for the goods the supermarket produces because they value those products. The market rewards of Tesco and Sainsbury's depend, very directly, on the value that their products deliver to society as a whole. Similarly, football wages reflect the scarcity and skill of the players.

Hang on, I hear you object - this is true, but doesn't it miss one key point? The English Premier Football League contains many clubs that are paying players beyond their means, resulting in huge losses which are maintained by benevolent owners who subsidise the shortfalls with earnings from other investments. Doesn't this suggest not that they confer value to justify their earnings, but rather that some people (like Roman Abramovich) have so much money that they've lost touch with the marginal revenue productivity of wages?

I understand the objection, but it isn't a valid one - after all, unless you or I have never paid a little over the odds for something we really wanted, who are we to speak? If an owner wants to pay millions to see his or her team win silverware, that simply reflects their desire to spend their money as they wish.  It is no different from you or I paying over the odds for something we desperately want. Of course, I'd much rather Roman Abramovich gave millions to Water Aid instead of using it to buy egotistical prima donna footballers, but unless we want to live in a world in which people aren't free to spend their money as they wish, we have little to say in the matter.

Given the foregoing, how, then can I maintain that sports stars are, in fact overpaid, as the title of this blog suggests? I'll explain, but to do so it'd be good to start with a basic assessment of value. For many people this is thought to be an entirely subjective issue, contingent on the personal value you place on sport and its performers. But economics usually has a way of answering these questions – and this one is pretty standard textbook stuff.

Assessing value
How do you know if you are of value to your employer? Easy – your value can be measured by what’s called the marginal revenue productivity of wages, which is basically the benefits your employer earns from employing you. If your wages are more than your marginal revenue productivity then you earn more than the sum total of value you bring to your company. The question is, do footballers, tennis players and the like earn more than the sum total of value they bring to their sport or the person paying their wages?

If you tried to answer that question purely on grounds of marginal revenue productivity then it gets tricky, because some sports stars do have such a star status that they have a positive effect on their employer’s revenue. Research done by economists Jerry Hausman and Gregory Leonard showed that star players such as Michael Jordan, Magic Johnson and Larry Bird “raised television ratings by around 30%, in addition to their effect on paid attendance.”

Knowing a bit about English football, I know that some of the big-spending teams (like Chelsea and Manchester City) regularly make losses by spending over the odds on big name players. In most businesses such high sums would not be paid out when the result constitutes such a deficit on the marginal revenue productivity. But with clubs like Chelsea and Manchester City their owners are not too bothered – they see their clubs as hobbies, and they are willing to make financial losses to attain wins on the field.

In the case of the biggest sports stars, wages are often higher than the marginal revenue productivity of labour – but equally the supply of those extraordinarily talented players is very small, which leads to the spectacularly high wages they receive each week (to give an example: Gareth Bale – one of the world’s best footballers earns in one week what Prime Minister David Cameron earns in two years).

Or take Lionel Messi - perhaps the greatest player the game has ever seen. Messi has been blessed with an immense footballing talent, which is a combination of background, natural ability and hard work. The market system that sees Messi being paid millions of Euros per year to play for Barcelona FC and a Sainsbury's shelf stacker or the CEO of Sainsbury's being paid nothing to play for Barcelona FC is a market that's delivering a better outcome than if Messi was shelf-stacking and Joe the shelf-stacker was a striker for Barcelona FC, even if Messi is earning more than we'd like, and the shelf-stacker less.

But our desires aside, this is the epitome of a supply and demand market - its analogue occurs in price theory, which says that if a product is highly sought by hitting a target then its price will go up when it is in short supply. In football Lionel Messis are in short supply, and in supermarket retail CEOs are in shorter supply than shelf-stackers, with shelf stackers being in more regular supply than top footballers and chief executives. Despite much dissonance, no one should want it any other way, because if there was a mechanism that prevented popular products making inventors rich, and rare skills making CEOs and top footballers sought after, then not only would that be terribly bad for acquiring skills, it would be terribly bad for consumers too, because without consumer prices, suppliers cannot know how much value people place on things.

Adam Smith explained it famously by drawing our attention to a paradox:

"The things which have the greatest value in use have frequently little or no value in exchange; on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it."

If I offered you a choice between a diamond ring and a glass of water you'd choose the diamond ring. The reason why is obvious; you can easily get a glass of water from the tap any time you like, but you'd have to work hard and save up to buy a diamond ring. But paradoxically if I said you have to give up one thing for the rest of your life - diamonds or water, you'd give up diamonds, because while you could live without diamonds, without water you'd die. That's a little like how it is with Lionel Messi (a diamond) and a shelf stacker (water). If you had to have one less shelf-stacker or one less Lionel Messi you'd choose to have one less shelf stacker, because Lionel Messis are much rarer and much more uniquely talented. But if you had to choose to live in a world with no shelf stackers or no footballers you'd probably prefer to keep shelf stackers, lest the food buying industry runs amok (replace shelf stackers in this equation with policemen or car mechanics and the point holds even more so)

So how is it that top sports stars are overpaid then?
I explained that wages are governed by supply and demand, but I hinted earlier that some people (sports stars etc) may actually be overpaid in a market that is pre-dominated by benefactors with big money (like Abramovich, etc). The key question is, how do we measure quantity to find what is excessive and what isn't?  The way we do it is by assigning value using an economic template.

In sport relatively small numbers of participants earn disproportionately vast sums of money compared to the majority of other participants with less talent. But are the differences in talent significant enough to justify the translation into such large differences in wages? I seriously doubt it, which is the best argument for their being overpaid. For example, in football the best premier league players can earn ten times more than the best players from the championship league below, but I doubt they are ten times better in ability. The difference in earnings between a top footballer and a second-tier footballer is not based just on marginal productivity but instead on the financial power of benefactors pumping money into the clubs and the economic power of the media. This applies in all sorts of areas too. People only allocate a limited amount of time to movie watching and cookery books, which means a Brad Pitt film and a Nigella Lawson cookbook each has a higher probability of big sales despite probably only being marginally better than competing films and books.

It's tempting to ask; if sport gives people great pleasure, and people wilfully follow it at some personal cost, who is anyone to say the money could be better spent elsewhere? But that is the wrong question.  The right question would be - if the vast sums of money associated with sport were diminished and put into more worthwhile uses, would the diminution that greatly compromises the quality of sport be worth it against the gains obtained from the increased resources in other uses?  Let's say the benefactors and businessmen behind sport and its media outlets got together and agreed to charitably take 50% of the crazy money out of sport and invest it in projects that helped the needy (Oxfam, Water-Aid, Save The Children, etc). You'd find that the quality of sport would decrease, but not by as much as you'd fear, and not by enough to drastically reduce your pleasure, because the enjoyment levels would soon equilibrate again. Whereas, on the other hand, thanks to the money given to the charities, the quality of life for those in need would increase greatly. 

That is the essential point - sport involves huge sums of money that generates rewards that would not be greatly diminished with much of the crazy money taken out. Good charities that invest their money well ensure that the recipients of that money greatly benefit from as much money as they can get. In the global sense, where we are measuring quality of life and well-being, sport (and many other things, of course) sucks up a lot of money and provides relatively little in return.

Once again, that is not a wild speculation - it is based on the economic principle that market economies quite naturally shape rewards, contribution and demands commensurably.  With a small degree of flexibility, the price of a bunch of bananas, or a mobile phone, or a lawnmower, or a scarf, or the fees of bricklayers, plumbers and removal men reflects the demand and willingness to pay a particular sum for those goods or services.  That is why (save for anomalies) the market generally isn't over-saturated or in great scarcity of the products consumers buy and the services people need. Sport doesn't have this Smithian 'invisible hand' to regulate its dispensations - it can extend globally and amount to a huge over investment which robs us of a great many resources and denies the more valuable and worthwhile alternative uses.  Because of this, irregularity in the market economy doesn't provide the optimum number of sports stars as it does goods, supplies, bricklayers, plumbers and removal men. 

I first came to this realisation while I was watching a Wimbledon tennis match a few years ago: the realisation that we could shave off the top 10% of quality tennis players and not significantly diminish the overall quality of tennis, retaining pretty much the same enjoyment or appreciation as before. That is to say, if the top 10% of tennis players suddenly disappeared, then once we'd adapted I think we’d still have more or less the same enjoyment of tennis with the remaining 90% (I would actually say the same for all sports - which is probably why I'm not very interested in sport generally). A friend of mine had the following objection:

"Ah but how would the world benefit by getting Andy Murray to do something else like play the harp? There's no evidence he would be any good and the net result would just be lower standard of tennis being played and no improvement in world harp playing standards."

That's true if he ends up doing something that he's no good at (like playing the harp). But he won't end up doing something he's no good at, because that won't be sufficient to pay his bills. If tennis suffers no major diminution by Murray's absence, then anything else he does will benefit the society as a whole, so long as what he does earns him a living. The main indication that someone is benefitting society in a vocation is if someone else is willing to pay them for what they're doing. If Murray had no aptitude for the harp then no one will pay him for it. If someone pays him to be a baker or a carpenter or a painter then society is the better for it.

Conversely, I think if the top 10% of contributors to popular music and literature suddenly disappeared I don’t think once we’d adapted we’d still have more or less the same enjoyment of music or literature with the remaining 90%. To paint a picture, and I know this is subjective, but in popular music you'd have to envisage that shaving off the top 10% would leave you with a world in which there were no Beatles, Stones, Dylan, Led Zeppelin, Pink Floyd, Bowie, Neil Young, Jimi Hendrix, and so on. In literature you'd have to envisage that shaving off the top 10% would leave you with a world absent of Dickens, Tolstoy, Austen, the Bronte sisters, Eliot, Dostoyevsky, Greene, Lawrence, Joyce, Woolf, Hardy, and so on.

This is part of a general piece of wisdom that says the world benefits on the whole when great talents go on to employ those talents. I want the future Einsteins to be studying physics at Oxford or Cambridge rather than bumming out and working at Tesco. I want the future Mozarts to be involved in music rather than working in factories or driving in cabs.

A novelist like Dan Brown or JK Rowling has rewards that are easy to demarcate – each book sold is a unit of income. But Roger Federer or Wayne Rooney do not have easily measurable units of income, because their pay cheques are based on relative performance not absolute performance. Tennis tournaments offer huge incentives for effort because under tournament conditions relative performance is primary over absolute achievement. All the winner has to do is play better than his opponents. In absolute terms he may play better the year after he won it and lose because his opponents played even better still. This, of course, is what motivates other players to improve – it is the allure of the big pay cheque, even though the ratio of winners to losers is miniscule. A similar logic applies to the marketplace in general. The salaries of the high earners above us aren’t just high to reflect the skill set of the Chief Exec – for as we know, often the performance of a company is down to factors outside of the Chief Exec’s control. But a higher salary for Chief Execs, managers, supervisors, etc doesn’t just motivate them, it motivates those underneath them. A workplace full of staff wanting to climb the ladder is going to be a stronger workforce than a workplace full of staff with no tangible aspirations, and that probably is one of the hidden benefits of paying your Chief Execs and managers high salaries.    

Another interesting difference between say literature and tennis (as per my examples above) is that if the top 10 % of tennis players weren't playing tennis for a living they'd be doing other things and making perhaps equally good contributions to society overall. Conversely, I think it may be argued that if the top 10% of literary contributors had not written novels but done something else instead their contributions to society overall would not be equally good. This is perhaps heightened by the fact that one only needs to write each book once, and its legacy can endure for any future time.

Do you add any value to tennis by becoming a tennis player?  A tiny bit, but negligible.  If you make bread (and make a living), the world has more bread.  If you become a plumber (and make a living) the world has someone else to fix people's plumbing.  If you become a tennis player or gymnast and win a medal then the world won't have one more winner, it will just have you instead of someone else. 

Follow that pattern.  So, if you reduce tennis players by 10% - the world will have n quality instead of n+1, but that's very slight, particularly when you are none the wiser about those 10% once they've gone.  So virtually no change in tennis. But as far as the world goes, those 10% are now free to do something else.  If they all become plumbers or builders or taxi drivers the world has more of these services, so it's a social gain.  In sport, top performers merely capture lots of income that would have gone elsewhere in the sport, so 10% reduction is not a social cost it's a transfer of wealth. Incidentally, a lawyer largely transfers wealth too - the defendant's gain is the plaintiff's loss (and vice-versa).  They do act as deterrents to unproductive behaviour, but also to productive behaviour and activity too.

Put it this way, if all other tennis players had spent their 15 years playing professional tennis, and Andy Murray had spent those 15 years baking bread, the world of tennis would be just about as good, and the world have 15 years' worth of additional bread. Of course a baker can replace another baker, but the key difference is that another baker can go and do something else, whereas a losing tennis player still spends 15 years playing tennis and losing in tournaments. If one tennis player is a baker instead of competing, the tennis tournaments are almost as exciting, and we would have 15 years' worth of baked goods. It' a valid question to ask how we know the value of the baker's output exceeds the value of say 100 million people's enjoyment of Andy Murray - but what they'd be missing is that those 100 million people would still be enjoying some other tennis player just as much.

The standards to enter the market are different too. A baker who performs 85% as well as the average baker can expect to receive about 85% of the average baker's income, whereas a tennis player who plays 85% as well as the average tennis player probably wouldn't even make it to professional status.

The market has produced good outcomes when it delivers rewards that match the social contribution of the participants. Most sport fails this standard*. The point is, when other inventions fail that standard they are weeded out because demand for them is too scarce to justify their existence. This doesn't happen in sport like it would, say, if Cadbury brought a new combination of flavours in a chocolate bar (called Bananpeach) that almost no one liked. The value of an activity socially is the aggregate of all benefits to everyone, where benefits amount to how much people are willing to pay. If no one is willing to buy the Bananpeach, it will not be manufactured for long. On the other hand, in sport people's willingness to pay is retained due to them not realising that the top earners don't add all that much to how much they'd enjoy the sport if they were absent. In other words, in the chocolate market, the superiority of the Twix, Kit-Kat, Dairy Milk and Mars Bar over Bananpeach makes the Bananpeach unable to compete any more, whereas the superiority of the semi-finalists at Wimbledon no longer makes the first round losers unable to compete anymore.

Does all this mean people should give up their love of sport?  Not necessarily - it gives them pleasure, and the crazy sums of money involved aren't going to change for the better anyway.  Compounding this is the fact that money isn't the same as wealth - money buys you the things you want and need, but it is the assets that money buys that gives quality of life.  You don't create wealth just by giving someone millions of pounds. You create wealth when you start a company that fulfils the demands of the consumer with the supply of a particular product that adds quality or well-being to people's lives. You create wealth when you streamline a company of its extraneous staff. You create wealth every time you close down an entity that sucks up more resources than it provides. You create wealth when you invent new things, or synthesise multiple concepts in innovation, or construct new theories that generate prosperity when actioned. That is why the crazy money in sport is doing much less good than that crazy money could do elsewhere.

*Obviously I'm only talking about professional sport. People who partake in sport in their leisure time are doing so for their own pleasure, so it's unlikely it will provide rewards below their contribution. 

Monday, 9 February 2015

On Democracy


On January 20th people in the UK celebrated the 750th anniversary of the first parliament, calling it Democracy Day. Democracy is far from perfect, but it does at least give people a voice and makes our representatives accountable at the ballot box. There is a fundamental reason, though, why democracy is strictly limited - it is because, unlike Aumann's Agreement Theorem*, a democratic system isn't about closing the gap on the issues about which we disagree, it is about a proportion of conflicting ideologies winning popularity over others.

While a rigorous intellectual enquiry reconciles discordances, democracy merely inflates them with a system of winners and losers. To rub salt in the wounds, politicians know that a huge number of the electorate are pretty ignorant about politics and economics, so they look not to what's good for the country but what is likely to be popular in terms of votes

Because of how our top earners raise the average wage, the majority of people in the UK earn below the average wage, which means they are going to be swayed by redistributionist policies targeted at the rich, and economic policies that hamper progress. Unfortunately, in terms of viable representatives, this means the public do not get what they need; they get what they think they want. Or to use a culinary analogy, instead of getting to choose between a fillet steak, a sirloin steak and a rump steak, the public instead gets to choose between several rump steaks with slightly different flavoured sauces.

Despite the increased human assent to democratic values, there is one key thing that will always provide a resistance; and it is that for all her picturesque backdrops and glorious natural scenery, nature is not very democratic at all. When it comes to health, looks, size, shape, talents, intelligence, sensory apparatus, opportunity and background, nature is far from democratic - there is a notable difference in all of these human qualities in each of us, as their attainment depends on undemocratic things like fortune and pursuit.

Further, there is no democracy in the qualities we try to attain either. Successful romantic love is not democratic: it reveals itself more to the faithful pursuer of monogamy than it does the uncommitted philanderer. Goodness is not democratic: it emerges more in those who seek moral probity than those who pursue selfishly bad ends. Knowledge is not democratic: it is the natural reward of diligence and effort, and absent in lazy-minded slackers. Good health is not democratic: it is contingent on the lifestyle chosen, genetic legacies, and other physiological factors too. And more generally, the achievements, the wisdom, and the fulfilments we secure are not democratic: they are the reward of hard work and an earnest pursuit of things that are good for us.

Our democratic leanings, then, are assented to in spite of nature not because of it. Those leanings are based on a popular view about equality - the view that it is fundamental to a successful society and peaceable co-existence. Our yearning for equality is in one sense a good thing - it is the recognition that we want everyone to make the best of their raw material, irrespective of genes, looks, intelligence and background. But in another sense, and sadly the predominant sense, it is pernicious in its fear of success and advancement. At its worst its proponents hate the thought of wealth stratification, superiority and divergence in achievement - they behave like starved organisms desperate to lament the oxygen of others, leading only to envy and resentment.

While the first tenet of equality is noble, the second is ignoble, and we must have no truck with it. Just as an education system that gave everyone the same grades would be unrepresentative, and a 400 metre race in which everyone crossed the line together would be pointless, similarly, a society devoid of wealth stratification, superiority and divergence in achievement would be a society in which those richest of human qualities - freedom to pursue talents, rewards for hard work, benefits to innovation, and positives that emerge from moral and intellectual excellence - were rendered meaningless.

I tend to agree with Churchill that democracy is the least bad of all alternatives rather than being stunningly good in itself. Still, we have it, and we're better off than most countries, so we mustn't grumble too much - as long as we keep one step ahead of democracy's limitations.  

* See here for my blog post on Aumann's Agreement Theorem

Saturday, 7 February 2015

The Greens Are Growing In Popularity - But Be Careful What You Wish For


I was reading the other day that The Green Party Is The Second Most Popular Party For Young People (with Labour being the most popular).

So despite losing the intellectual battle years ago, it seems that the economic left does have a political future then?

Alas, yes, it seems that way, but it's easy to see why the myths perpetuated by the economic left continue - we are all socialists really.

What? What do you mean we're all socialists? David Cameron is not a socialist; neither is Jacob Rees-Mogg, nor Owen Paterson, and neither are you, Philosophical Muser. It's just not true.

But you mean something different. Here's what I mean. There's a very important distinction - one I made here - the one between the socialist in the socio-personal economy and the socialist in the market economy. In their attraction to the economic left, many young people are confusing the two by a false conflation. When it comes to the evolutionary socialist in us - the one that assents to kinship, inter-personal bonds and shared-interest groups, the predominant force is the socio-personal economy, explaining our natural assent towards sharing, being generous and kind, and mutually assisting one another. This legacy has primed us for millennia, long before any such thing as a market economy of trade came into place. Consequently, on grounds of adhering to our socio-personal make-up, we are justifiably faithful to a socialistic framework in our cognition.

That is not the same, though, as saying that because of our socio-personal socialism we can justify socialism on market economy grounds. As the history of hard left economics taking root in China and Russia shows, and as is still being shown today in France under Hollande, the market economy operates under a different heuristic to the socio-personal.

Our affinity with friends and family is based on bonds of attachment, either blood-connection (relatives) or like-mindedness (beloveds, friends, and social groups). But the market economy extends way beyond these affinity rings, where success isn't just about familial bonds or connecting with like-minded people, it is about connecting with the vast majority of people who are not like us. I may have little in common with the Indian chef who cooks my chicken biryani, or the garage mechanic who fixes my car, or the vet who cares for my cat, but what connects us is our ability to specialise in a market economy where goods and services create value, and where diversity augments that value through multiplicity.

The qualities of the affinity rings related to the socio-personal are not the sort of qualities that can be artificially engendered from on high in a top-down organisational hegemony, which is why socialism in the market economy is futile as well as being empirically imprudent. What's happening with the rise in popularity from the economic left is that they are trying to rivet on to their (our) socio-personal socialism a justifiable market socialism, which is a bit like trying to justify sleeping with all our colleagues at work on the grounds that we sleep with our husband or wife at night in our own homes. Different strokes for different folks.

Hmm, so if we can see where these socialist tendencies come from, this green popularity surge is probably not that surprising either, is it?

It's not that surprising. In the forties and fifties most of the general public would have been fairly unmindful and apathetic towards environmental issues. Even when I was a lad in the late seventies/early eighties you hardly heard a word about the environment. Environmental campaigners in those days were generally regarded as over-sensitive and largely eccentric neurotics - an easy imputation when you're part of a minority cult. What's apparent, though, is that the next couple of generations that followed had been taking a great deal of notice of what they were saying, eventuating in this young green-conscious generation that is now reaching positions of influence in government and business, and turning our mainstream parties greener too.

So politicians are under pressure to be greener?

They are if they want to appeal to young voters, yes. I'm told that the RSPB has over one million members, which alone tops the number of members of all the main political parties. Add to that all the Greenpeace members and people of the green-left persuasion and it's probably becoming apparent that environmental concern is a great deal more ubiquitous than is given credit for. We know the civil service runs thousands of private opinion polls and focus groups each year, as well as heeding the pressure from farming syndicates and various interest groups keen to preserve the greenness of the UK, so it's unsurprising that politicians are feeling the pressure to respond to the nation's greenness. Politicians are, after all, primarily interested in votes and popularity, so they have to generate policies that won't be seen as costly in terms of votes.

Even though we see increased environmental awareness in younger people these days, it’s often the case that a vote for a minor party means a vote that expresses disenchantment towards the mainstream parties.

True as that is, I think over the next few decades we might see a change in the political landscape, where instead of having two predominant parties, we have five or six mid-size parties, which will mean policies that used to be trivial will soon be more in the mainstream.

Gulp!

Exactly! It's well known that when you're a minor party your policies don't have to withstand quite so much rigorous intellectual scrutiny as the major parties. When I talk of policies, I mean, of course, proposals that require the management of funds. Don't forget, the government do not have any funds of their own - they only have public money handed over by the taxpayers. So everything needs paying for, meaning that the policies that come under the most intense scrutiny are the ones that require the most diligent economic analysis. Minor parties scarcely have to do this because there is little chance of them ever having enough power to implement those policies. Consequently, then, minor parties are able to have the charmed political life of promising attractive things without ever facing the danger of having to balance them out in the economy. For a long time the Liberal Democrats had this distinction, until slow increase in popularity eventuated in a coalition with The Conservatives which then mercilessly exposed their economic policies . Like the minor parties of today, the Lib Dems used to proffer policies that told people what they thought they wanted to hear, only to have them candidly exposed when their merits and demerits were under more careful examination.

And the Green Party is even worse than the Lib Dems?

Worse? You bet it's worse; it's worse in the same way two broken legs are worse than a grazed knee. For an indication of this, have a look at Andrew Neil's Sunday Politics interview with Green Party leader Natalie Bennett, which stands out for me as one of the most alarming exposures of ill-conceived economic policy I've seen in a long time. It's rare to see a leader having her party's policies torn to shreds without even the smallest ability to defend them or balance them up - instead simply getting in a jam each time and responding with “I would urge your viewers to go our website and see how the figures are worked out.” 

Alas, that's the reality, though - their policies are indefensible - economic moonshine of the worst kind I've seen. Not only are they inimical to successful human progression and increased prosperity, they are antithetical to even the basic truths you'd learn about in first year economics.

Even if we pretend there is some solid rationale for the so-called ‘Citizens’ Income’, which promises a minimum weekly income of £72, the economic cost (£280 billion) is a pipe dream. The same is true of their proposed wealth tax, which Bennett claims will generate between £32 billion and £45 billion, when the reality is that wealth taxes in other European countries generated only a fraction of that. Add to that the proposals for import tariffs, business subsidies, increased minimum wage, price controls, and the kind of Piketty-esque redistributive taxations that would retard innovation, and probably drive much of our best talent out of the UK, and there is a good case to made that with The Green Party in their current form, we have, in terms of the economy, perhaps the most dangerous fringe party of them all - a party whose policies would severely compromise the global benefits of innovation, trade, competition and the free market of supply and demand far more than all the other parties would.

A vote for the Green Party actually gives every indication of being a vote for negative growth, as they look to free humankind from what they perceive as the disaster of its Promethean economic advances. While it’s true that in some cases people willingly vote for one of the smaller parties because they are disenchanted with mainstream politics, it’s also true that as the landscape begins to shift, and dissection of the minor parties' policies intensifies as more look to get their feet in Westminster’s door, surely very few people could actually bear to envisage what the country would be like if The Green Party's policies were ever made manifest in any kind of sphere of political influence.

With the ever-rising popularity of the Green Party, it is no longer the case that the green vote is a spoiled vote in protestation at the mainstream parties, nor merely a principled vote towards a candidate they actually like and believe cares about the world - it is, in terms of human well-being, a vote for what is surely the party with the most dangerously counter-productive set of policies that has ever got this close to the mainstream.

 * This was also published as an Adam Smith Institute Article (see here)

** Photo courtesy of bbc.co.uk

Wednesday, 4 February 2015

Stephen Fry: A Response To The Responses - Why Evil & Suffering Are Not Valid Objections To Christianity


There have been one or two responses to Stephen Fry's viral video from prominent atheists (such as from Larry Moran and from PZ Myers), claiming that to give any attention to the theodicy problem is to give Christianity too much intellectual consideration. I wrote a Blog post in response to Stephen Fry's video, which received a widely positive reception, although one commentator was disappointed that I didn't, in his view, actually attempt to respond to the theodicy problem (the problem of evil and suffering).

It's true, I didn't, but for good reason - and the reason is, when it comes to Christianity's truth or falsehood, there is no theodicy problem in the first place, because propositions about theodicy depart from the central claims of Christianity, so cannot be used as a tool against its efficacy. For example, suppose I made the following three claims:

1) Hinduism is false because India is not the richest country in the world.

2) Islam is false because it hasn't rained in Mecca every Tuesday since Mohammed's birth.

3) Astrology is false because the moon isn't made of cheese.

Now there are plenty of good arguments for why Hinduism, Islam and Astrology are false, but the ones I gave above are not good examples, they are extreme and irrelevant. I've picked extreme cases to make the point obvious: they are not good arguments against Hinduism, Islam and Astrology because those claims are not claims made by Hindus, Muslims and Astrologers, so have no bearing on their truth or falsity.

For example, astrology is false because the position of the sun and the constellation configurations at the time of a baby's birth bears no relevant relation to the personality or future endeavours of that baby - it is not false because of the moon's lack of cheesiness, for the simple reason that astrology makes no claims about the moon's cheesiness. Similarly, Hinduism is false because the gods the founders made up don't actually exist; it has nothing to do with India's material prosperity because Hinduism makes no claims about that.

Now notice how those extreme examples are brought to bear on the issue of Christianity. Stephen Fry rejects Christianity on the basis that suffering occurs in the world, but just like the above examples, Christianity doesn't make any claims of a suffering-free world - quite the contrary, we are told that this temporary state of affairs comes with tremendous amounts of evil, pain, injustice and general misery. This is the affliction - the tragedy of being human - from which the cross offers us eventual escape and emancipation, as the book of Revelation tells us.

The only rational basis on which Christianity can be dismissed is by counterclaims to what the faith intrinsically says about itself. It cannot be rationally dismissed with an argument (like the existence of evil and suffering) that Christianity doesn't even claim to be true of itself.  So although Mr Fry may feel like there is too much evil and suffering in the world to justify belief in a perfect Divine Creator, if we are being faithful to solid, rational enquiry, it should be made known that philosophically the issue of evil and suffering is not a sound objection to Christianity - it is, like most objections to Christianity, an objection to a made-up alternative version of Christianity to which most Christians don't actually subscribe.

 
* Photo courtesy of virtueonline.org
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