Thursday, 29 March 2018

Bless Him - Owen Jones Has Got Himself All Confused Again

Owen Jones' latest gripe about the outrageous injustice of Britain’s wealth inequality is that our MPs, even Labour ones, are lacking the ambition to tackle it to his satisfaction. He thinks that because the rich have a lot more than the poor, this makes this economy 'dysfunctional and rotten', and he is calling for almost all transfers of funds (inheritance, gifts, capital gains) to be treated as money in waiting for the government.

What Owen Jones has never been very good at is understanding causality in these kinds of situation. Rather like how feminist proponents of the spurious gender pay gap don't grasp that when left to their free choices, there will be unequal outcomes as regards men and women's average pay because men and women want and prioritise different things, radical redistributionists rarely seem to grasp that when the results of societal free choices are measured - even in the most equal countries - the lowest two quintiles own next to nothing compared to those in the top quintile.

Alas, Owen Jones is not alone though - errors of causality are highly common. This is because when we ascribe causes to effects we do so by focusing on what seems to be the most primary element of causality at the time. So for example, people will assert that ISIS was caused by (among other things) Blair and Bush's Iraq invasion; that the financial crash of 2008 was caused by (among other things) bankers' recklessness; that the Brexit majority vote was caused by (among other things) a huge anti-immigrant feeling; and that the Trump election was caused by (among other things) a large anti-establishment feeling.

But consider a heart attack by way of an analogy. Your obese neighbour Bob is outside washing his car on a hot July afternoon, when suddenly he keels over and dies of a heart attack. The most primary element of that event, the one on which the local newspaper report would probably focus, would be on the fact that Bob was an obese man over-exerting himself on a boiling hot summer day.

But there are other causes too, multiple causes. For example, Bob's obesity was in part caused by genetics, but also by his eating and drinking habits. Bob drank 40 units of alcohol a week and had a fry-up for breakfast three or four times a week. He also suffered from depression, which drove his excessive drinking. His depression was triggered by multiple past legacies, including being treated badly by his father, and having a mother too scared to protect him.

The upshot of all this is that causes are numerous and complex, and they depend very much on which link on the causal chain is being zoomed in on at the time. Moreover, in the case of Bob's heart attack, all of the causes have some relevance and none of them contradict the others.

The things that are causing all this inequality of outcome are very much not instances of unfairness, they are, by and large, instances of freedom in action, where a society with billions of individual decisions, in aggregation, naturally leads to expected power laws and income disparities. It's all very much to be expected, and probably always will be - it's a natural outcome of societies with diversity and a multitude of options.

And lest we forget, a few other pertinent points, namely: