Inflated Expectations, Sunk Trade & The Tariff Tango

Let me start with one of the plainest economics truisms in the whole subject of trade; if a country makes things more expensive to produce domestically, it becomes less competitive, increases trade deficits with other countries, and confers an advantage on countries that produce those equivalent things less expensively.

Consequently, it shouldn’t be hard to get the Brexiters/Remainers debaters to concur that, as UK costs are in pounds and, say, French costs are in Euros, what determines the exchange rate between them is, among other things, the cost of producing things. We can put aside here that while inflation reduces the value of the pound, it doesn’t always translate to reduced demand for UK goods if the exchange rate adjusts appropriately (remember that in the cases when inflation leads to a depreciation of the pound, whereby it can initially boost foreign demand for UK goods due to their relative cheapness, the very same inflation will also raise production costs domestically, which will have a cancelling effect of the competitiveness gains from currency depreciation). But the upshot here is, it is always the case that economic policy errors that increase the cost of producing things for your own domestic citizens are counter-productive and inimical to healthy trade.

For ease, let’s forget about all the other trades that UK and France make with other nations, and make the point with a simple trade flow between these two nations (and for further ease, we can put aside the fact that because multiple countries use the Euro as their currency, this complicates the relationship between production costs and exchange rates, and just focus on a simple case, which could be applied to any 2 currencies).

In this model, the only reason Brits want to buy Euros with pounds is to buy French goods, and the only reason France want to sell Euros for pounds is to buy British goods. If Brits try to buy more Euros than the French want to sell, the price of Euros in pounds goes up. If the French want to sell more Euros than Brits want to buy, the price goes down, as it does in other markets. The price of Euros in pounds, the exchange rate, ends up at the price at which supply equals demand, which means that Brits are importing the same pound (and Euro) value of goods that they are exporting.

Suppose the UK government mistakenly decides to impose a tariff on French imports. French goods are now more expensive to Brits, which is obviously bad for Brits. Since they want to buy less from France, they don’t need as many Euros, so the demand for the Euro goes down, and the price of Euros in pounds goes down, which reduces the cost of French goods to Brits (remember this is just a consideration of UK and France – for this exercise, forget that other European nations use the Euro)*.

Suppose the UK becomes less good at making things due to bad political policies (a scenario that, sadly, doesn’t need much imagining). Pound prices of UK goods in the UK go up, which makes UK goods more expensive to French purchasers, so they buy fewer of them, decreasing the demand for pounds on the pound/Euro market. This shifts the exchange rate, where pounds are now less valuable, so their price falls. This doesn’t mean we are less competitive in the short term, but it does erode domestic purchasing power, which is particularly problematic in an import-dependent economy like the UK.

One of the main follies of getting trade wrong, especially uttered by bombastic politicians who want to give the impression of ‘putting our country first’ is that language is distorted, so terms like competition are often confused with combative ‘zero sum’ language, inaccurately framing trade as a “them vs. us” scenario. When that happens, political attempts to apply tariffs or regulations to confer domestic advantage are confused due to bad analogical thinking, which usually ends up reducing domestic productivity and thinly spreading costs of bad policies onto domestic citizens.

And finally, of course, the sure fire way to devalue the pound even more is to inflate the currency, which has happened off the scale in recent years in the UK. What that does is lower the value of the pound in international trade, but it does not make our goods more attractive to foreigners — they get more pounds for their currency, but need more of their currency to buy our goods, since prices have gone up – which is a bad thing for just about everyone.

*It’s true that exchange rates are influenced by more than just trade flows and production costs (especially capital flows and interest rate differentials) and inflation’s effects on exchange rates and competitiveness are complex, but that doesn’t undermine the argument above, and is beyond the scope of this article.

Why Couldn't God Have Just Forgiven Our Sins Without The Cross?

 

Also published on my Network Norfolk page this week

Regarding Christ's sacrifice on the cross as an act of grace in atonement for our sins, the question is frequently asked: Why couldn't God have just forgiven our sins anyway, without the need for the torture and death of the crucifixion? God must have known about alternative options when considering all possible creation stories, but instead chose the cross, which suggests He knows things we don't about why the cross is a better method of atonement than simply forgiving us all.

I have a speculative answer as to why that might be. I think the above explores two similar scenarios, but with a key distinction: the first (the cross) is God acting to pay off the debt on our behalf, and the second (just forgive us anyway) is God writing off the debt without action. If it's better to pay off a debt than simply write it off, we may be able to discern this by looking at actions between humans. If we think of all the people each of us has wronged in our lives, some cases will involve acts of forgiveness and reconciliation, but some won't. In other words, in the human story, there is a lot of unforgiveness that resembles unpaid debt, and the only way it can be put right between human agents is through volitional forgiveness and reconciliation. It can't be put right by writing off the debt without action—or even if it can, it is definitely an inferior resolution to the aforementioned alternative.

Now, consider it another way. Suppose Frank owes Jack £1000 after a loan, and Frank is forever struggling to pay it back. Tom could offer to pay Jack on behalf of Frank, so the debt is settled, but he couldn't reasonably suggest that the three of them just forget about the £1000 and that that settles things in the same way.

I think these illustrations might show why God can't just forgive sins without paying the debt Himself. God could perhaps use writing off the debt without action as a means to forgive our sins against Him, but perhaps He cannot use writing off the debt without action as a sacrificial Divine gesture to cover the human sins committed against each other. However, by having suffered and died for us on the cross, God acted to pay off all the debt on our behalf. This became the instrument through which we are enjoined to forgive each other, because we are enjoined to share in Christ's suffering in order to live a life that emulates Divine love, grace, and forgiveness.

Exploring Mental Health

Today is World Mental Health Day, which aims to “raise awareness of mental health issues around the world and to mobilise efforts in support of mental health”. Fair enough, I’m game, because mental health is important.

I nearly always welcome comments on my posts, but for this one, I actively encourage participation because diverse perspectives might be particularly valuable here, and I’d value your views on the subject.

Here I’m considering the UK’s perception of mental health and how we are performing in diagnosing negative mental health. Getting the right kind of mental health diagnosis at a population level is a complex problem to solve. Are we over-diagnosing or under-diagnosing mental health problems in the UK? And how would we measure that?

Let’s start with something we can probably say with confidence. Given that, throughout most of our modern history, very little regard was given to the subject of mental health, and given that most of the mental health problems people now encounter were undiagnosed and not even conceived of in our history, it’s a fairly safe assumption that we have under-diagnosed mental health problems in the past. But what about now?

Part of the consideration of under or over-diagnosis has to be about the definitions used. For example, the World Health Organisation (WHO) defines mental health as “A state of well-being in which every individual realises his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community.” Under that definition, I’d expect most people to claim sub-optimal mental health, especially during many difficult periods of their life, because those criteria are big asks. 

Moreover, because of the numerous ways the UK has made a big mess of its own society, there are lots of impediments (some of them self-created) to an individual realising their abilities, coping with the normal stresses of life, working productively, and contributing positively to their community, that may not be proximally attributable to poor mental health. Perhaps we are under-diagnosing negative mental health in some cases and over-diagnosing it in others. Perhaps we are not focusing enough on the causes of positive mental health or doing enough to encourage these things. I don’t know.

And the places in which we are over-diagnosing negative mental health are bound to be extremely costly for UK society as a whole. There are likely to be many areas in life in which the cause of sub-optimal well-being is more directly attributable to things like not seeking the truth, failing to take proper responsibility for thoughts and actions, having too few close connections, an absence of positive people in life, life choices that negatively affect sleep, exercise, and diet, inadequate emotional awareness, and things of that nature. These are likely to increase anxiety, and may even lead to a diagnosis of depression, which in some cases might not be justifiably clinical.  

A successful diagnosis can give an individual access to medication, support and other resources they might not otherwise have had. A faulty diagnosis may deepen the problems further, create a stigma, and distract attention from more viable correctives. And there are obvious costs with false negatives (not diagnosing a mental health issue when it’s there) and obvious costs with false positives (diagnosing a mental health issue when there is a better explanation).

At some point in the future, I hope to address the complex landscape of mental health with a video series on my YouTube channel. But for now, I’d love to hear your perspectives in the comments section.

Sticky Belief Traps

In seeing what you are willing to believe, bad agents acquire the opportunity to know how easy it would be to get you to comply with their aims. For example, if they can get you to believe that a man is really a woman, or that there is an impending climate catastrophe, or that women are paid unfairly compared to men, then it sends out information signals that you are able to comply without being much of a friend of rigorous scrutiny. These information signals reveal to bad agents those who might be more easily influenced to be part of their in-group, and those who are likely to question them more rigorously, and reject their claims after a deeper analysis.

But there are also different types of uncritical belief that depend on external factors, which means in some cases if an individual is likely to fall for x, they are highly likely to fall for y, yet unlikely to fall for z – where x, y and z are things that people believe relatively unquestioningly. For example, if you are willing to accept that a male can become a female on the basis of subjective preference, you are probably also more likely to believe that there is a climate crisis, and that women are paid unfairly compared to men. If you believe that capitalism is a net force for ill, and that the rich are getting most of the spoils at the expense of the poor, then you are much more likely to stand in a pro-Palestine march than a pro-Israel march.

On the other hand, if you’re a young earth creationist, you’re more likely to side with Israel, but less likely to believe that a man can become a woman. Because young earth creationism is a conservative error, young earth creationists are also less likely, on average, to subscribe to climate alarmism, but more likely to believe that homosexual practice is sinful. This is because the information signals that exhibit what you are likely to comply with are also influenced by external factors, like whether you’re a liberal or a conservative, religious or not religious, educated or uneducated, a working taxpayer or not a working taxpayer, young or old, that sort of thing.

Of course, while this observation is about adults, and how their susceptibility to certain beliefs provides information signals that can be exploited by manipulative agents to determine how easily they might conform to certain ideological agendas – the other part of the disturbing picture is that many of the schools, universities and the majority of the media are already trying to get children under their thrall from as young an age as possible, with their parents often fully complicit in the cultural conditioning, as they’ve been through similar indoctrination processes or lack of critical engagement themselves. 

 

People Are Finally Starting To Wake Up To The 'Net Zero' Madness

Imagine if a teenager with no knowledge of cars walked into a garage and started to tell the mechanics how they should be tuning the engines they are working on. Or imagine if a passenger on a flight attempted to break into the pilot’s cockpit and take over the flying of the plane, without knowing the first thing about flying a plane. Or imagine if a guy off the street offered to rewire your house, without the faintest clue about electrical wiring. You get the gist. In each of these cases, it’s obvious that they don’t have the competence or authority to make these demands.

But there are millions of people today – ranging from young daft nuisance vandals, through to mature politicians and media commentators – who think they have the competence and authority to demand an end to fossil fuels, or at the least 'net zero', by an arbitrary date. Alas, not everyone grasps how absurd this is. Compared to the intractability of the world’s carbon industries in a highly complex global industry, with tens of billions of interconnected needs, fixing a car, flying a plane or rewiring a house is a highly manageable task.

Yet on these matters we still wouldn’t counsel opinion from amateurs, unskilled in the industries in question. So with that in mind, why on earth do people entertain the deranged fantasy that individuals have the first clue about the world’s optimum oil consumption at any given time, about what the right balance of energy sources is, about the dynamically shifting global economies and the intricate web of energy demands that sustains them, and about prospective dates when we should just pretend we can bring a halt to all this?

Net zero has been one of the most widespread Dunning-Kruger ‘Mount stupid’ delusions ever wrought on modern societies, and thankfully, although it's still early days, we are starting (stress, starting) to see increased pushbacks, as more and more people are slowly waking up to how irresponsible it is, and how impoverishing it is for poorer people (and the poorer the society, the more disastrous net zero policies are for them).

Fossil fuels powered the greatest material progression-explosion the world has ever seen, lifting billions of people out of poverty and hardship - and they are still the cheapest and most efficient fuel on the planet. It's disgraceful that British MPs voted to represent our national interests are hell-bent on impeding our industrial standing in the world, prioritising misguided policies that undermine energy security, production and economic growth. They are prepared to jeopardise the UK in the name of perverse ideological agendas, for the purposes of reckless, narcissistic virtue-signalling. 

Some people have always been awake to this nonsense, while many others have been sceptical but passive. Thankfully, the signs are that enough people across Europe are now beginning to get so fed up of having their livelihoods compromised by eco-fanaticism that their influence is beginning to gather some momentum. Let's hope it continues, because the right and most pressing political question of this time is not Has the damage we’ve done to the climate taken us too far into an irreparable plight? – it is Has the damage already done by the preposterous net zero lunacy taken us too far into an irreparable plight? You can tell the kind of person you’re dealing with by which of those questions occupies most of their concern.

Truth, Beliefs & Confidence

 

Think about your individual beliefs and views on any given subject. Take a belief and call it x. You believe x is true, but what is your level of confidence in that belief? You might say you know it's true, or you don't know if it's true, or you are unsure of the strength of your conviction. The strongest statement is that you believe x and you know x is true. Think about how many of your beliefs fall into this category.

Now think about the beliefs you hold where you do not know if they are true. Then ask two further questions; 1) Why don't I know if the belief is true? And 2) Why do I still believe it if I don't know it's true? Note; I'm not saying it's always wrong to believe things you do not know are true - I'm just inviting you to think about the meta-questions surrounding your beliefs.

It's quite possible to have a justified belief in x without being sure x is true. It's also possible for x to be true without your knowing why you should know it's true. But for all the beliefs you have where you don't know they are true (for example, if you believe x, and x isn't true, it's impossible for you to know it's true - obviously!), some might be false, and you don't know why they are false. Not knowing a belief is false is primarily the reason why you mistakenly think it's true. But if you think it's true, but can't claim to know it's true, you should start to consider why you feel you don't know it's true.

Of all the beliefs in this category (where you accept P but reject -P without full comprehension of why), we can bring in a philosophical term called defeasibility. Beliefs are said to be defeasible when there is a realistic possibility that they could yet be shown to be false (we could discuss what we mean by 'realistic' but that's too much for this post). For something to defeat your belief x, a proposition would have to be presented that makes you no longer believe x. To be sure that your belief x is true, you'd have to be fully confident that there are no propositions that could be introduced that would change your mind about x.

But this level of confidence requires a kind of meta-level confidence in your ability to know that there are probably no prospective defeaters out there - and that is perhaps the defining wisdom in the confidence in believing x and being confident x is true. Furthermore, if you are in the position where you have no defeaters, you will probably be able to comfortably identify some (if not all) of the defeaters in your opponent's position.

One of the fundamental human problems is this; If someone you think you're allied to says something, you're more likely to believe it; if someone you think you're opposed to says something, you're more likely to reject it. This causes blindness to your own faults and to your opponents' strengths, and it amplifies to the point where you find it prohibitively difficult to see any other perspective or listen to balanced reasoning on particular matters.

Humans are primed to pursue status and reputation, and the status and reputation they prefer most is gaining regard from the people about whose thoughts, opinions and acceptance they care about most (call it group x). But left undisciplined, this creates a feedback loop, in that they look to gain more regard from group x, and care more about what group x thinks, and the more they care, the more regard they need from them, and the more regard they need, the more they care what they think, and so on. 

The trouble with feedback loops like this is that individuals who succumb to them get swallowed up into a cause or ideology or belief system from which it becomes harder and harder to disentangle themselves - and, as a consequence, harder to remain individuated and authentic. The only antidote to this is to look for allies in an honest search for the truth, because that is the alliance most valuable to yourself and to others.

How Likely Are Long Distance Relationships To Work?

 

Everyone knows the potential barriers to the success of long distance relationships, where many result in dissolution. But with strong communication, trust, transparency, frequent meet ups, and clear, mutually established expectations, many of them do turn out to be successful in the long run.

One of the key incentives in long distance relationships might be the increased quality of time spent together in the teeth of lack of frequency. Think of it like this. One of the well known (to economists) effects of trade taxes like import/export tariffs is the Alchian–Allen effect, which says that when a fixed unit price is added to two similar goods of different prices, consumers will sometimes have an incentive to favour the higher priced good. In other words, if the fixed cost is high, the quality will increase too. 

Here's an example of why. Suppose you live in the UK and are looking to buy one of the newly designed music systems on the Japanese market. There are two kinds, and they are the only two of their kind in the world - let's call them Model A and Model B. Let's say that in UK currency, Model A is the £150 model, and Model B is the £300 model. Model B is twice the cost of Model A, except for one additional fact - we'll say all Japanese items shipped to the UK come with a supplementary £100 overseas postage cost.

That is to say, to buy Model A will actually cost you £250 and to buy Model B will actually cost you £400. But notice what's happened when we add on the Alchian–Allen effect; if there were no postage costs then Model B (£300) would be double the cost of Model A (£150) - but with the additional £100 postage cost, Model B (£400) is only 1.6 times the cost of Model A (£250) - meaning that when that fixed unit price (£100) is added to the two goods of different prices, we've more chance of favouring the higher priced good because it becomes more worth our while.

The nature of increased consumption of the higher variable cost good occurring when adding a fixed cost to two independent prospects could be creatively applied to long distance relationships too: they are a bit like an equivalent postage cost, because for some couples, the increased effort required in seeing one another might play out in improved quality of time spent together, deepening the mutual bond and connection. If you've travelled from Brighton to Leicester to see your beloved, you are unlikely to sit in and watch Netflix together all weekend – you are likely to want to make the most of every moment spent together.

What's It Like Being An Eco-Vandal?

 

I recall a quote by computer designer Charles Babbage that has stuck with me over the years, about having an opponent who strikes him as so confused that he is difficult to understand - "I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question", Babbage said.

After eco vandals threw soup on great works of art last week, the weekend got me thinking about what it must be like to be one of those Just Stop Oil members who committed such an act. Like Babbage, I am not able rightly to apprehend the kind of confusion of ideas that could provoke an individual to believe they have no future because of climate change - much less, cause misery to innocent people as a result.

Consider the journey you'd have to make to go from ordinary citizen in society, to someone who behaves like that. Just imagine how divorced from reality you'd have to be, to be willing to damage private property and works of art while being filmed, cause misery to holidaymakers, put lives at risk through mass congestion, and rob yourself of your own freedom by being thrown into prison for such acts - all for the distinction of being puppets having your strings pulled by corrupt organisations and self-serving narcissistic cult leaders.

I guess you might point out that they don't know they've been ensnared by a cult, and that most people never do - but if they’re willing to risk prison for their beliefs, then it seems surprising that they haven't up to this point undertaken the relatively simple task of thinking things through with more care and consideration. I actually find it hard to even conceive of the journey downwards one would need to take from sane analysis to the depths of madness we are seeing with climate alarmism and hysteria-driven criminal activity.

What would a sane analysis of climate change reveal? I am almost certain it would reveal that there are problems we are going to have to solve - but that we don't have, and will not have, a climate crisis or a climate catastrophe to deal with. With climate change, we are not talking about a massive change in the short term (which might constitute a crisis), we are talking about gradual changes over a long period of time. Over the course of the next century, we are likely to see climate change necessitating small changes in behaviour, alongside which our technological advancements will be far more substantial. Human ingenuity will enable us to adjust to gradual climate change, where we make tweaks to correct for gradual temperature rises when we need to.

The insistence that we are facing a climate crisis is not one that someone committed to a sane analysis would easily arrive at once they'd factored in the full suite of considerations at play. Consequently, falling for the 'climate crisis' narrative as a bystander is an act of moderate failure. But falling for it to the extent that you are willing to cause harm to others, get yourself locked up in prison, and think that you are a force for good in doing so, is an act of such absurd madness, attention-seeking and selfishness that I really do find it hard to imagine what it's like to arrive at that place, or be such a person.

In Fairness to Trussonomics

 

Liz Truss has said this week: “Things would be better if I was still in charge” – a comment which has elicited ridicule and chagrin with almost equal measure.

I’m not convinced that most of the critics of what’s been pejoratively labelled ‘Trussonomics’ are qualified enough to know better, especially those who looked to reject the whole thing; but I’m equally unconvinced that Liz Truss ever had a proper handle on things either. And although it’s a personal thing, I don’t find her very likeable, which probably makes it harder to warm to her intentions, and give her some benefit of doubt.

But I'll try, because theoretically Trussonomics needn't have been quite as bad as many people made out – it’s a combination of one main fatal flaw in the idea and the practical elements which made it a disaster. The framework of Truss’s proposals are the very thing the UK so badly needs – especially tax cuts, supply-side reforms, deregulation, and stimulating economic growth by removing state-imposed impediments and incentivising investment. Because what Britain needs is long-term economic growth – and that will only happen with deregulation, decreased state spending, increased private sector investment and job creation.

Truss wanted to turn Britain into a much-needed thriving economy, with increased productivity, and as a place where outsiders were willing to invest. Critics who favour free markets said the big problem was the execution, not the idea. But that’s not quite right. The execution was indeed terrible – that’s plain for all to see; it culminated in panic, financial turmoil and lost confidence in the markets, necessitating a quick government u-turn. But the idea was fundamentally flawed too, because it was based on increasing borrowing with a flaky strategy for fiscal discipline. Combined with the high levels of public debt and the unique inflationary pressures around that time, the idea was defective and poorly timed, which made the execution inevitably disastrous.

The upshot is, I think Truss deserves most of her criticism – but it should be borne in mind that many of the fundamental principles of Trussonomics are still exactly what the country badly needs – especially lower taxes, a less burdensome state, supply-side reforms, mass deregulation, increased private sector investment and job creation. It’s just that I honestly can’t think of any politicians in any of the current political parties in whom I’d have enough confidence that they have the combined competence and courage to do what’s required to turn this economy around.

When Simplicity Becomes Over-simplicity

In one of my book’s chapters, I have a section in which I state that a great many of the issues with people’s faulty reasoning, arguments and views are due to the problem of over-simplistic thinking. In fact, if a proposition is defective, you can be fairly sure that over-simplicity is involved somewhere. And just as we know the well-worn truism that it takes more effort to correct a falsehood than state one, the concomitant truth is that the amount of effort needed to redress an overly-simplistic proposition is vastly greater than the effort required to produce it. To correct an over-simplified view, one must reintroduce the complexities, provide detailed explanations, and often counteract the appeal of the simpler narrative – and that’s to say nothing of the investigation of cognitive biases and defectiveness involved in producing the errors.

Consequently, then, a most reliable syllogism is this:

Topic X is complex

A’s position on X is over-simplistic

Therefore, A’s position on X is inadequate and likely to be strewn with error.

Here are a couple of easy examples:

Prices are complex

A’s position on price fixing is overly-simplistic

Therefore, A’s position on price fixing is inadequate and likely to be strewn with error.

And....

Climate change is complex

 A’s position on fixing climate change is overly-simplistic

Therefore, A’s position on climate change is inadequate and likely to be strewn with error.

Here I’m drawing the distinction between being simplistic and over-simplistic. Being simplistic is frequently fine; being over-simplistic is frequently not. The challenge, then, is to try to determine when something simplistic (and is presentable in a succinct argument) becomes over-simplistic and compromises the accuracy, nuance, or essential complexity of the subject. An argument can present the main points clearly, but omit some details for the sake of parsimony (simplistic), whereas an argument that omits essential information or key variables, and significantly undermines the understanding of the issue, is likely to be over-simplistic. An argument that relies on some generalisations for brevity, but where they are generally reasonable and broadly applicable is fine (simplistic), but if it includes unfounded assumptions or cunningly neglects to factor in the true diversity and complexity of the subject matter, then it is over-simplistic.

Consider these two examples:

Free trade is complex

Economists’ position on X is simplistic

Therefore, economists’ position on free trade is inadequate and likely to be strewn with error

And…

Biological evolution is complex

Biologists’ position on biological evolution is simplistic

Therefore, biologists’ position on biological evolution is inadequate and likely to be strewn with error

There’s nothing fundamentally wrong the two sets of premises here, as long as they are simple but not overly-simple. Relative to the collective complexity of free trade and biological evolution, even those who speak best on these subjects do so by shaving off a lot of complexity in order to make succinct but accurate statements about these subjects. So, it isn’t always the case that using simplistic language is a synonym for being in error. It’s certainly possible to write saliently about a complex subject in a simple way – that’s what most good writers do. Economists and biologists who write simply and accessibly are usually not writing this way because they do not understand the complexities: it’s usually to help the reader understand complex subjects in a rudimentary, manageable way. This isn’t true of groups like socialists and climate change alarmists – they frequently over-simplify complex matters because it helps them to justify their actions and gather support for their cause.

It’s fine to write simplistically to make key points or to present short writing pieces, but over-simplistic statements are problematic when the reduction of complexity leads to a loss of essential truth, failure to factor in the full gravitas of the subject, and other inadequacies that undermines your position. And here’s a particularly incisive truth to close with, I think. If you have a viewpoint, and it is overly-simplistic and inadequate, it’s not as though you won’t be aware of it – you will know deep down that you are being disingenuous, and that what you are saying does not do proper justice to the complexity of the considerations that need to be included. If you’re in that camp in any of your views, you’re going to be suppressing emotions that make you feel ashamed and disappointed – and deep down, you’re not going to be feeling good about yourself, and nor are the people supporting you.

Over-simplicity, coupled with a perverse agenda, is the cause of many false, toxic, and damaging belief systems in the world. But I think that’s because over-simplicity is one of the most effective tools for perverting the agenda, attracting followers, and dismissing outside scrutiny - especially if one can attempt to lay claim to moral superiority in doing so.

The Only Way To Heal Society

 

Political issues aside, everything wrong in the UK has multiple, complex causes. But I believe that the primary causes - directly or indirectly - of what’s fundamentally wrong in society are: 

1)    The decline of Christian beliefs and priority of Christian values

2)    A lack of care or desire for the truth

3)    The breakdown of marriage and the family unit

4)    The weakening of church community and engagement

I’d say literally everything that’s wrong with the UK society – the devaluation of human life, the erosion of a robust moral framework, increased anxiety and confusion, false religions and cults, loss of purpose and identity, idolatry, hedonism, excessive consumerism, narcissism, neglect of community and social responsibility, self-serving leadership, rising mental health issues, wokeism, cancel culture, confusion over identity, extreme factions, isolation, the list goes on – is directly or indirectly linked to some or all of the above four things.

A society that became transformed and re-rooted with those four pillars would be thriving, healthier, happier, more truthful, unified, purposeful and fulfilled.

The Economics Of Queuing, Booking & Paying

At the weekend, my wife and I went to a pub restaurant that operated on a first-come, first-served table system. When we arrived, there were no tables available, so we were added to a waiting list. After having a drink, we were seated within 15 minutes. The dining experience was wonderful, and the food was fabulous. I got talking to the manager about their non-booking system, and how they'd made a success of it, maximising turnover in the process. From an economist's perspective, there are pros and cons to both types of system (booking and non-booking) - but to make the latter work, you typically have to offer a top-notch customer experience and have an excellent reputation.

Just as this restaurant made queuing a pleasant experience for its patrons, I predict that with continually advancing technology we will have to queue a lot less than we do now. There'll be far less queuing in shops, in bars, on roads, etc because automated bots will be bringing us our goods, serving our drinks and driving our cars. But until that day comes, let's have a further chat about queues, booking and paying.

We all know what it is like to decide which checkout line to go to in a busy supermarket. The human motivation of all shoppers is to get out of the store as quickly as possible. To do this, one must first do a quick scan at the number of people and the number of goods in each shopping trolley in each checkout line, to get a sense of how long each person in the queue may take. During this time, we'll be on the lookout for potential delays, such as old ladies with vouchers or chequebooks, items that have hard to read barcodes, items like fruit and veg that may need a manual entry from the cashier, single people packing their own bags vs. couples with one of them doing the packing, that sort of thing.

This is the basis of complex systems theory: individual agents trying to maximise their own utility, whereby in just a few seconds the mind executes some rapid computations to ascertain which of a number of possibilities is the optimal one. Because of this, in busy supermarkets, most checkout lines most of the time will appear to involve roughly the same perceived waiting time (and usually the same actual waiting time too).

Queues frustrate many people, but we use queues as a way to deal with short-term fluctuations in demand. Queues are usually a problem of supply meeting demand without any additional costs. But the best way to understand queues is that they are a constraint on the supplier's ability to provide a good or service at the price or speed the consumer (and often the provider) desires. Additionally, it's usually to do with number of personnel, skills of personnel, amount of space, etc - but whenever you have to wait in line, there is a constraint occurring somewhere. 

With the qualities of the free market, you are all but guaranteed (through price theory) to facilitate the most rational, incentive-driven allocation of resources possible. In theory, if the price is set right according to supply and demand, there should be virtually no queuing. If prices are too low, demand exceeds supply, and queues are expected to form. As the price rises, we lose the consumers who are not willing to pay more, so the queue diminishes. We reach equilibrium when the price is high enough to ensure the quantity demanded equals the quantity supplied - which is the point at which we'd expect no queue. In other words, if prices are set correctly, demand will fall until the queue reaches zero.

I don't queue very often because I rarely care enough about any consumable good to wait 20 or 30 minutes in line for it. Because there are many people like me, queues engender lots of opportunity costs for providers and suppliers. Imagine a queue at a Building Society in which one customer arrives every two minutes, and one customer every two minutes is dealt with by a member of staff. All it takes is a hold up somewhere in the Building Society (a customer with a complex problem, one of the team on a lunch break, someone off sick, or an influx of people joining the queue), and you could have a queue of ten people. That means anyone joining the queue has to wait for at least twenty minutes to be served. While a Building Society may not lose much custom this way, a food stall surrounded by lots of competition probably would. Queues allocate resources efficiently, but not optimally, because they do not distinguish between Jack, who wants a good or service really badly, and Jill, who doesn’t care much about the good or service but joined the queue simply because she saw there was only one person waiting in line.

Waiting in line is an example of a sub-optimal event, which has been improved by technology that improves sale experiences for consumers. For example, being able to buy a cinema seat online in advance is a far more useful way of allocating the scarce resources of a popular movie than queuing outside in the hope that the cinema won't sell out of tickets. Improved technology that enables consumers to pay according to how much they value something is superior to waiting in line, where there is no way of telling exactly how much someone values something. To that end, popular restaurants that operate under a table booking system should charge for booking a table at peak times as well as for eating the meal. It's obvious to everyone that the laws of supply and demand factor in to the dining out experience too. A 6pm booking on a Tuesday night at a restaurant that has been open for 10 years is bound to be in much lower demand than a 7:30pm booking on a Saturday night at a popular restaurant that has only been open a few weeks.

That is why it's so easy to distort the true signals of value. A couple that phones up and books a table at random, or a few friends who walk past and grab a table on a whim, may not value their table as much as people that would have paid an extra surcharge to eat in there. Consequently, charging for table bookings at high demand restaurants increases the chances that the people who most value a dining experience have that experience, while at the same time leaving room for less-discerning people to choose other restaurants. Moreover, if non-price sensitive people pay more at peak times, price-sensitive people should find cheaper meals of the same quality at non-peak times. 

So why, then, don't such restaurants charge for booking a table? It could be for the same reason that hugely popular concert tickets don't sell for more. But it's probably also the case that popular individual restaurants that adopted this policy would unilaterally place themselves at a disadvantage against other popular restaurants that chose not to charge a booking fee. In all likelihood, this is why reservations do not have the kind of prices that would allocate diners with restaurants more optimally, and create extra societal value in doing so.

Should We Trust The Anecdotal Or The Statistical?

 

You’ve probably heard of the wisdom of crowds – the notion that, when it comes to decision-making and prediction, large groups of people are often collectively more accurate than individual experts. That is, with 100 people guessing, the average guess of, say, the weight of a cow is likely to be closer than the guess of a single expert (see blog post here). And you probably know that in statistical analyses, individual anecdotal accounts are generally less reliable than statistical data collations. The anecdote “I knew someone who smoked all his life and lived to 95” is a less good way to evaluate the life expectancy of heavy smokers than statistical analysis of a set of heavy smokers against non-smokers. And you’ve probably also worked out that the news and media are not robustly reliable channels for distilling the truth when compared with statistics. The media is biased, but the statistics report more accurately (although not perfectly) on facts.

Given the foregoing, what is the best way to get to the truth of a matter? Statistics are generally more reliable than individual anecdotes and crowd-based opinions, but at one level there is no truth quite as powerful as first-person truth. On the other hand, given that there is no such thing as an average person, and that the first person perspective cannot easily be representative of some hypothetical social mean, some of our first person perspective is bound to mislead us into thinking we reflect wider societal views or preferences. For example, if you’re convinced you live in a patriarchy, or under a right wing government, or in a Christian country, or under oppression, or in a country with great opportunity, then conformation biases might exacerbate those beliefs against wider counter-indicators.

Here’s where I think this leaves us. In some cases, the first-hand experience knows best, but other times it should give way to the wisdom of the wider consensus. And where we defer to the wider consensus, we should first do so through hard statistical data (that can be rigorously demonstrated), not skewed media narratives, which depart further from the full truth with every passing year.

Minds Closed For Business

Tom Gilovich, a social psychologist, has made intriguing discoveries about human beliefs, which go some way to explaining why so many people believe absurd things that are just plain wrong, and are so hard to be convinced otherwise. His research shows a consistent tendency that when we desire to believe something, we internally pose the question, "Can I believe this?" – and then we actively seek out evidence that supports our desired belief, and convince ourself that it is sufficient.

However, when faced with a belief we find undesirable, our internal query shifts to "Must I believe this?" – and then we look for reasons to discredit the claim. If we come across even one piece of pseudo-evidence that casts doubt, we feel justified in rejecting the belief. We use that as a pretext for freeing ourselves from the obligation of belief.

This whole “When we want to believe something, we try our best to justify belief in it, and when we don’t, we try to justify non-belief” is probably the best insight we have in to why people have such strange beliefs, and associate themselves with such nutty groups. They simply want to believe these things – which also explains why it’s so hard to talk people out of wrong thinking, even when most of the rational world continues to show how incorrect they are.

We can, of course, relate this to most of the world’s current mainstream follies. Most people in climate hysteria groups don’t really believe in the doomsday scenarios about which they forewarn – you can see from their behaviour and body language that they don’t really. Being in a climate alarmist group satisfies their need for virtue signalling, it feeds their attention-seeking, it reflects their dislike of successful people, it makes them feel like they have a cause, and it gives them a sense of identity and a sense of moral superiority (similar motivations apply to most socialists, in my experience, as there is so much overlap). All this is easy to figure out once you look carefully enough, and the same applies to many other cults, conspiracy theorists and extremist groups.

Young earth creationism is that other bogey that falls in these same traps, and perhaps the one I’ve challenged most in recent decades. Because of the perceived moral duress in terms of Divine punishment, and a perceived Biblical injunction, young earth creationists are perhaps the most prone of all to seeking out pseudo-evidence that supports their desired belief (Biblical literalism, no transitional fossils, irreducible complexity, unreliability of radiometric data, micro not macro, etc) and convince themselves that it is sufficient. And because they have no desire to accept evolution, despite the overwhelming evidence supporting it, they take the "Must I believe this?" approach, and use their pseudo-science to justify discrediting the evidence, and free themselves from the obligation of the facts.

Because the psychological roots of these cognitive biases lie in the deep-seated need for reinforcement, in-group validation and social cohesion, experience shows that rational persuasion is very rarely effective against anyone who feels they must believe something, and actively seek out evidence that supports what they want to believe. Views that are so entrenched, forming the bedrock of an individual’s perceived moral duty, ego, group identity and social solidarity are not on the table to be corrected. They are minds closed for business. 

If Only Beliefs Were As Efficient As Markets

 

The essence of capitalism is that our market innovations have gone through selection pressure and benefited consumers by cumulative step by step improvements. Co-operation and competition are the main driving mechanisms for this success. Due to competition, and the market punishing inefficiency, bad service and poor quality products, the present day tends to produce the highest quality of goods available rather than any time in the past. It's not true in every sense, of course, but generally speaking, a laptop, mobile phone, washing machine, car, movie player, data storage device, and so on should be better now than previous versions 10, 20 or 50 years ago (perhaps notwithstanding planned obsolesence). Our products and technology get better, as does our knowledge and understanding of the world around us. No one sane would deny that we’ve never been better off materially and that we’ve never had more knowledge than we do right now.

Now, to a great extent, a similar mechanism also ought to exist in the evolution of the competency of the views we hold. And clearly, in many places it does. But….here’s the big but – we’ve also never had so many people alive with so many incorrect and absurd viewpoints. Now, you may say that’s simply because we’ve never had so many people alive - which is true to some degree – but it’s not quite enough.

The kind of selection process I described for goods, services and knowledge doesn't seem to happen with the same rigour in beliefs and viewpoints. In other words, we don’t seem to have refined the quality of our beliefs and viewpoints as successfully as we have in other areas that reflect the gradual slopes of improvement – especially in socio-cultural areas like politics, economics, social commentary and religion.

It's probably because of the vicissitudes of the human mind, or the complex nature of the social environment, or the lack of competing selection pressures on those beliefs, or the subjection to chaotic non-linear feedback effects - or more likely a combination of the four - but the present day state of affairs for political, economic, social and religious discourse doesn't seem to produce the modern day equivalent of the efficiency improvements seen in the free market.

But I think it's also because the stakes are different. In the market, we are heavily penalised if we don’t provide what people want and need – we could lose our job, our business, and even fail to feed our family. Capitalism has quality control that keeps us at the top of our game, otherwise we go bust. But there isn’t the same intense selection pressure on our socio-cultural views. What seems lacking there is the right amount of accountability. In market economics, providers and sellers are accountable to consumers who will shop elsewhere if something better or more desirable comes along. Accountability is a powerful mechanism in society because it acts as a modifying tool in response to performance. 

We shouldn't be surprised it is so effective - we see it happening all the time. The principal mechanism of biological evolution is that natural selection acts on phenotypes to confer survival advantage. In science, experimental testing is accountable to results, which forms a body of evidence for a particular theory. Each of these systems is subject to selection pressure that confers overall improvements. In market economics, unwanted goods or services don't stay around long. In biological evolution, it's rare for an organism that is prohibitively not adapted to its current environment to survive. In science, it's extremely rare for something counterfactual to be classified as a theory after much experimental testing.

There is some accountability in politics when it comes to who is in power. A democratically elected group of MPs are accountable to their constituents, and can be voted out if they perform poorly or behave immorally. In politics it's been historically rare (although sadly not rare enough, and getting less rare by the decade) for a hopelessly incompetent or scandalously unethical politician to last more than a few terms in office. The trouble is, the average member of the electorate isn’t very demanding when it comes to the purveying of good ideas and sound political and economic judgements. In fact, the incompetence of the majority of voters is even weightier than the incompetence of the people they are voting into power, which militates against proper accountability or adequate selection pressure on the statements and ideas of politicians. If only beliefs were as efficient as markets. 

Prohibiting Knowledge of Good Things

In my early days of being a Christian, I was puzzled by God’s instruction that Adam & Eve should not eat from the tree of the knowledge of good and evil, because it seems like having knowledge of good and evil is a good thing. I was puzzled because it seemed like the only text I could find in scripture where God seems to prohibit something that is good and beneficial. Which brought me to the question; if that’s the case, on what grounds might a good and perfect God prohibit something that is good and beneficial to us? And I could think of only one reason why – it was prohibited because we weren’t yet ready for it, but one day might be. And what could that ‘it’ be? To become like God, of course. So that is how I interpret that part of the story in Genesis; the best thing we could possibly have cannot be given to us in one solitary grab – we have to work towards becoming Divine.

A correct interpretation of Genesis reveals it is richly layered with symbolic and archetypal meaning. Given the foregoing, I was pleased recently to hear a like-minded interpretation of Genesis 2:17 from Biblical scholar Jonathan Pageau – who shared his belief that when God says, “you must not eat from the tree of the knowledge of good and evil, for when you eat from it you will certainly die.” – Pageau contended that, actually, God would have given them permission to eat from it, because ultimately, it’s necessary knowledge, just not yet.

Most Genesis scholars see the tree as representing a kind of profound Divine wisdom over and above our current understanding – so the interpretation that humanity was not yet prepared to fully understand or handle being that much like God, but decided to take it anyway, seems to be a reasonable one. Because that really is what the primary sin is; our fallenness means missing the mark, where our very nature falls short of the glory of God, and the worst response to that is to put self ahead of God. It’s the fundamental error that bootstraps all other aspects of fallenness. And the primary sin has always been trying to put self ahead of God by attempting to become like God through pride and rebellion. When Satan (the serpent) tempts Eve to eat from the tree, claiming that they will not die but become like God, he’s cunningly revisiting his own fall for exactly the same sin, where he was cast out of Heaven for seeking to exalt himself above God.

So, when God said to Adam and Eve “You must not eat from the tree of the knowledge of good and evil”, perhaps this prohibition is God’s mandate for preserving the order of creation and humanity's place within it, which would be consistent with the framework and writing style of the verses that precede it. That is to say, maybe the allegory really means something like: we are made in God’s image (Genesis 1:26-27), and we will eventually be transformed to be like God (1 John 3:2, 2 Corinthians 3:18, Philippians 3:20-21), but our greatest falling is to try to make ourselves like God prematurely or with misguided self-centred motives. With this interpretation, the story of the fall is a deeper story than simple disobedience. It conveys a profound issue that the full suite of human growth and self-understanding is available through a relationship with God, but attempts at premature attainment bring about in self-induced curses rather than Divinely bestowed blessings.

 

On Attraction

 

Several studies have confirmed what we already know; that physical attractiveness plays a significant role in initial attraction and relationship formation, as it often serves as a gatekeeper to pursuing potential partners. But research* also shows that while men generally tend to consciously prioritise looks more, both sexes value attractiveness similarly in dating. 

However, over time, as partners get to know each other, positive personality traits like humour and kindness become more important, and the significance of physical appearance diminishes. 

So, the upshot is, some form of moderate attractiveness is jointly necessary and sufficient** to elicit positive evaluations, but in the long game, for both sexes, other qualities are more valuable on the whole. 

*Notably, Kniffin and Wilson, 2004; David Feingold, 1998; Fugère and colleagues, 2015; and Menelaos Apostolou, 2011,2015 

** In case you’re not familiar with necessary and sufficient conditions, it’s basically this: if X is a necessary condition for Y, then Y cannot happen without X. If X is a sufficient condition for Y, then whenever X happens, Y will definitely happen. So, X being both necessary and sufficient for Y means that Y will happen if and only if X happens. So, for example, having a ticket is a necessary condition to see a film at the cinema, because you can't get in without one. It's also a sufficient condition, because if you have a ticket, you're permitted entry. In the attractiveness case, then - moderate attractiveness is necessary because it is required to get you a date, where without meeting this minimum threshold, you are unlikely to be considered as a potential partner. And it’s also sufficient, because if they fancy you enough, it is enough to elicit positive interest, where further increases in attractiveness aren't required to make someone more desirable.

 

Spacetime As A Canvas For Divine Genius

 

Some Christians struggle with the concept of a universe that spans billions of years, as if it challenges God's sovereignty and precision. I don’t agree. Given time’s highly complex relationship with space (the four dimensions of space-time), I think it’s another opportunity for us created creatures to see God’s genius at work. When you think of how impressed we can be by what humans create - Shakespeare’s Hamlet, Escher’s staircase, Beethoven's 9th Symphony, Welles’ Citizen Kane, etc - I think not enough people are highly impressed with the intricacies of God’s spacetime. In fact, they probably just take it for granted - but it’s actually much more majestic than they are willing to consider.

Spacetime is rather like a canvas on which the process of God’s artistic critical path analysis goes to work: the splendour of the cosmos, atoms to molecules, molecules to cells, cells to communities, communities to multi-cellular differentiations, and so forth. If you think about the standard SI unit system, which measures all macroscopic activity (length, time, substances, electricity currents, temperature, mass, etc), it is built on the discrete, grainy substrate of spacetime, and resembles some kind of giant cosmic computational process, which can be measured in critical path operations within a search space in a finite execution time.

So when we get something like Psalm 33:9, which states that “He spoke, and it came to be”, and some Christians get tempted to say “Ah that fits in nicely with Genesis 1, and how God instantaneously brought these things into existence, not over billions of years” - I think, no, it just won’t do. Firstly, even computational commands are merely the apex of a whole host of complex background computations that require billions of critical pathways. And secondly, where in any other area of God’s created nature do we see such fait accompli results that require no prior work or effort? The answer is nowhere. Nothing exists in the whole of nature that provides a free lunch without someone having to plan, prepare and cook it - and that truth is instantiated in the cosmic process, from the macroscopic process of inorganic matter, right down to the discrete interstices of spacetime where the computations are underwritten.

In my submission, the prodigious amount of mathematical wash in the universe, far from exhibiting a God of profligacy, actually shows a Cosmic Genius able to undertake the most intricate sift and select computations, with an upper level of complexity beyond what the entire collaboration of human mathematicians could enumerate. Humans had to spend hundreds of years creating some of the most sophisticated computers in the world just to be able to get a slight handle on the topological mysteries behind God’s creative dispensations - and the vast stretches of time actually give glory to God and some of His creative genius.

Further reading: Why Did God Use So Much Space & Time?

Just Prices

 

Suppose you own a rare first edition book, and a dealer desperately wants to buy it from you. You would sell it for £250, but the dealer offers you £500, not knowing that you would have let it go for half the price. Have you acted immorally in accepting his offer? Most people would say no, and I think they’d probably be right. But what about in the case of Locke’s famous horse owner and traveller, where the horse owner would have sold his horse for £40 yesterday, but when meeting a breathless traveller the next day, uses the situation to his advantage and sells it for £50? Has the horse owner acted unjustly? What about if you encounter a man dying of thirst: is it unjust to sell him a bottle of water for £500? If he’s desperate and about to die, you can be pretty sure he values his life at more than £500, so in that context he’s probably getting a bargain, right? Yet understandably, almost no one thinks this is right. 

In economics, we believe the just price is the market price, based on the complex information signals generated by the busy marketplace of supply and demand. In other words, it is the actions of billons of local decisions across the world which determine the price of bananas, walking sticks, holidays and cars – there is no objective value in any good or service or job – the value is determined by billions of people's revealed preferences.

So how then do we square that with the notion of unjustly charging a desperately thirsty man £500 for a glass of water? Few would deny that’s wrong – we should be encouraged to give him some water for free. The upshot is, ethical judgements are not the same thing as just prices. Consequently, we are dealing with something rather like a sorites paradox-type of scale, where the nearer we remain at the individual consideration (like Locke’s horse owner and traveller), the more a price is subjected to strict ethical judgment, and the more we extend out to the wider economy in an information-generating nexus, the less a price is subjected to strict ethical judgment, because the more it has been shaped by lots of people through the mechanism of supply and demand. Excepting the terrible political policy of state price-fixing (rent controls, minimum wage laws, etc),the price of just about everything in a market economy is what it is because of the activities of billions of individuals over sustained periods of time - it resembles a democracy in that we've all voted for it to be that way.

This leads us to the labour theory of value. Adam Smith and David Ricardo posited views about the labour theory of value (LTV), which argues that the price of a good or service should be determined by the total amount of labour required to produce it. It’s a theory with little mileage, and whereas Smith and Ricardo never felt entirely comfortable with LTV as a broad-brush explanation for the price of labour, Karl Marx was fonder of it, using LVT (or variations of it) to bemoan what he saw as the powerful capitalist classes.

What gave LTV its redundancy notice was the more accurate notion of subjective theory of value, which states that the value of a good or service is not determined by the labour required to produce it, but by the value placed upon it by the consumer. A brick wall built around your garden is not valued by the labour required to build it - it’s the other way around - the labour required to build it is valuable precisely because the builder can produce something that the homeowner finds valuable.

If the anti-capitalist neo-Marxists were better informed, they would understand that far from being an exploitative force for bad, capitalism is a liberating and enriching way of enhancing people’s well-being and improving their standards of living. Labour and capital are what enable producers to provide things of value in society, and price them in line with supply and demand to allocate resources most efficiently. Prices of goods and services are information signals that convey subjective perceptions of value - and it is this information that tells us how much a thing is valued.

This is why we are always banging on about politicians’ inept and uneconomical interferences in the market - their activity so often impedes the highly complex process that most efficiently matches supply with demand at the optimal (or near optimal) prices. The optimal price of any good or service occurs when the most the consumer is willing to pay is equal to the least the supplier is willing to accept.