Gambler's Crime

There was an article in the Express yesterday talking about how absurd it is that criminals are receiving up to 10 suspended sentences before they are finally locked up. Yes, well, most of us know that you have to be a hardened career criminal to go to prison for any length of time these days.

The article writer asks what kind of message this sends out, if a potential offender is almost certain that he or she will not end up behind bars, there isn't much of an initial deterrent to stop them from going into crime. The key word here is 'incentives', and economics is very interested in the word. 

I remember as a child being told a neat piece of wisdom on incentives. How do you ensure that two brothers have an equal piece of a chocolate bar given to them by their mother? Get one brother to break it and then allow the second one to choose which piece he wants. That’s a sure fire way to encourage the first brother to break it as evenly as he can. The incentive is that he has self-interest in the equitable division of the chocolate bar. 

Incentives have the strongest influence when there is a tangible focal point. So, for example, in a national lottery, people will be more attracted to buying a ticket with one very sizeable jackpot (say £1 million) than with 10 smaller jackpots (say 10 x £100,000). Lottery gamblers prefer a reduced chance of a huge win over an increased chance of a less-huge win. 

The enquiring article writer would be pleased to know that this kind of psychology applies in ethics and jurisprudence too. Criminals generally prefer a reduced chance of a lengthy sentence over an increased chance of a shorter sentence.

So if you want the optimal deterrence for criminals it is better to focus on improving the rate of successful convictions more than increasing the jail sentences (although the latter may be prudent too if incarceration were to provide stronger steps towards rehabilitation and the bringing about of greater human worth, purpose and self-esteem).

Consequently, then, psychology says that a system in which an offender receives several suspended sentences before they are finally locked up would be improved greatly if there was an increased chance of being convicted and an increased chance of a prison sentence with unfavourable conditions.

It is clearly a problem that, for many, prison isn't much of a worse lifestyle than being free, particularly when offenders' feelings of self-worth make them fairly indifferent to either scenario. Therefore, I'd suggest a good balance would be to increase the chance of an offender being convicted, increase the chance of a prison sentence with not-too-comfy conditions, and ensure that rehabilitation transforms offenders' lives in a way that makes them positively not want to come back to prison.

Why There Are Too Many Sports Participants In The World

What do sugar, salt, rapists and breast cancer have in common? Answer: You can have too much of all of them, but in different degrees. Any incidence of rape or breast cancer is too much, whereas with sugar and salt, healthy amounts are good for you, and excessive amounts are bad for you. Sports stars are like sugar and salt - in moderation they are a good thing, but in excess there is superfluity, which amounts to a bad thing.

What do we mean, though, by excess? Quite simply, it's easy to imagine excessive sports stars, just like it's easy to imagine excessive amounts of pretty much anything. A world in which 90% of people were sports stars or taxi drivers or carpenters would be fraught: we'd have too few doctors, shop workers, chefs, farmers, and so forth. So it's easy to imagine what having too much of an occupation means.

It's then easier to ask, is the current number of sports stars too large? Consider if we just replaced one random tennis player and added one financial advisor to the market - the loss to the sport would be meagre (he or she would just be replaced in the hierarchy by another, slightly less good player) but the gain in the business sector would be significant.

Financial advisers have much better market incentives than sports stars. The rewards of a financial adviser (or a coffee grower, or a butcher) depend on the price of their supply per unit, which depends on the price consumers are willing to pay, which depends on the signals in the market of supply and demand. That's a sure fire way of producing neither too many nor too few of them.

Sports competitors are not constrained by anything like the same mechanism. Because of this, the reward of being a sports competitor is out of line with the value of his or her contribution. The many losing sports participants are contributing in an environment in which they are making up the numbers for the winners. This doesn't make them worthless, it just makes them too numerous.

Because we could remove 10% of all sports participants and still have the sport enjoyed almost as much, the top sports stars that reap astronomical rewards for adding only slightly more value to the sport do so at the expense of other competitors. A financial adviser, on the other hand, only reaps rewards to the same extent that price signals dictate, meaning there are almost no deadweight financial advisers in the same way that there are deadweight sports participants. The reason being, deadweight financial advisers would find the market dictates they do something else, whereas deadweight sports participants merely remain in the pool as losers.

 

For further reading, check out this blog in which I explain why top sports stars are overpaid.

Hey, Why Has No One Asked The Most Important Question About Our Next Prime Minister?

The most pressing concern for me about the Leadsom/May battle is not about whether motherhood matters in being a good Prime Minister (it doesn't, but it's something the media has been preoccupied with for decades because it thinks that reflects the feeling of the average voter), nor whether our prospective Prime Minister knows the price of a pint of a milk, and all that kind of malarkey.

No, what matters most for me is who is going to be best at pulling out the pre-scripted funnies at PMQs now Cameron has gone, and then pull that face that Cameron does afterwards when he's so pleased that he's made the house laugh?

Which of May or Leadsom will be most likely to welcome in a newly elected maiden Labour MP and then advise her to leave her phone on as she might be in Corbyn's shadow cabinet by the end of the day? Or which of them will be most likely to congratulate Corbyn (or an equivalent opposite number) on doing his share of job-creation by giving so many different MPs the chance to work in that self-same shadow cabinet?

 

Because if you're going to lead a Conservative Party that isn't in the least bit Conservative any more, against a Labour Party that is currently leaning too far to the left for even the majority of its grass roots supporters, you're going to need a decent sense of humour - and I'm sure neither May nor Leadsom are exactly going to give Voltaire, Mencken, Twain or Wilde a run for their money in leadership wit!

Two more things

On the discussion about whether the next Prime Minister needs to be someone who voted Brexit or not - I don't think so, as long as they invoke Article 50 of the Lisbon Treaty and respect the result, I don't have an issue if the PM voted Remain in the referendum.

In actual fact, playing the long game - one thing that may favour Theresa May is that when all the cross-party dissensions and media tensions are brought to bear on her leadership, a woman who voted Remain (albeit tepidly) but who steered us with some aplomb through the process of leaving the EU may actually in a very subliminal way be able to procure a modicum of connection and empathy with both sides.

Lastly, it shouldn't go unmentioned how interesting and ironic it is that the party that didn't go down the all-women shortlist route has ended up with two women contenders for PM on merit, whereas the opposition party that tried to design their representation of sexes with all-women shortlists and silly pink buses is all over the place and currently replete with second-rate female representation in senior roles, and three under-duress men at the forefront of their leadership.

Corbyn Needs To Learn The Contrast Between Two Very Different Words

On PMQs this Wednesday just gone Jeremy Corbyn asserted, as he has repeatedly before, that it's about time this government 'Invests in places across the UK outside of London'. Countless individuals up and down the country support this idea, and why wouldn't they? After all, investment is a good thing right?

Not quite. Corbyn's confusion lies in not identifying that what he's describing are not 'investments' they are 'costs'. Whatever projects he wants the government to invest in are actually costs of employing people to do things, and costs of natural resources (metal, wood, plastic, fuel) to do them. When Corbyn uses the term 'investment' he is making it sound as though he's describing the benefit of doing something, when he's actually describing the cost of doing something.

And projects that cost money and material resources only ought to be undertaken if they bring value to the country. The reason should be obvious; any labour or materials used for one thing are labour and materials that cannot be used for other things. The opportunity cost of doing x is not doing y and z.

Most of our politicians speak of creating jobs with taxpayers' money as a good thing. Using their logic, then, the more jobs they create with taxpayers' money the better it is for the country. But to see how foolish this assertion is, suppose for the sake of argument that the government is about to spend £50 million on wages for a UK Local Government building project, but then found out that they could hire a more competitive firm to do the job at the same standard for £30 million. 

According to Corbyn's rationale, the government should hire the £50 million workers not the £30 million workers, because spending an extra £20 million on the project increases the benefits of the project, and is better for the economy. It’s terribly obvious that the £20 million saved is a benefit to the taxpayer, because it can be spent on other public goods and services, as could all the labour gained be expended on other projects.

Equally importantly, whether a project adds value to our society is not a question that is best left to politicians, because in business private investors are much more likely to be prudent with their cost-benefit analyses, as it is their own money at risk.

If a project looks like a good investment, then investors can acquire the money from a bank, because a bank will usually lend if the borrower's ultimate gain from spending the money enables him or her to pay back the loan with interest. A government won't have anything like the same kind of risk signals, nor the same incentive for prudence because taxpayers pick up the costs of any imprudence.

When politicians proclaim costs as benefits, it leaves me wondering whether they are muddled economists or disingenuous hoodwinkers. Let investors invest with their own money - it is the best guarantee of value in the shape or consumer and producer surpluses, not politicians with other people's money.

This does not, of course, apply to financial donations given to the charity sector - but that is not what Corbyn means when he talks about investing in places in the UK - he means taking taxpayers' money to effectively subsidise British industries at uncompetitive rates to shut out foreign competition, and appeal to the insularities of so many regions of the UK.

Be very wary when politicians declare that they want to 'Invest in places across the UK' - the last thing you should ever do is encourage them, for they usually make us worse off in net terms, as well as making foreigners worse off too, as they lose out in the ability to trade in our economy.  

Chilcot's Philosophical Conundrum

Regarding the Chilcot report, the following philosophical point looms large in my mind. If there were actually weapons of mass destruction (WMD) but they were either a) in Iraq but undiscovered, b) moved out of Iraq, or c) destroyed (either deliberately or in conflict), there would be enough people unapprised of their existence to engender a mounting campaign of being deceived by Tony Blair.

So, do you think Tony Blair deliberately misled the British public with information he knew to be false?

I don't, actually - I think he believed it at the time, or at the very least played fast and loose with the element of doubt and the necessary caution that ought to have been employed.

Sometimes caution costs lives too though?

Indeed it can.

I wonder what those who are always banging on about the 'legality' of the Iraq war would have made of our heroic activities in both World Wars?

Yes it's a relevant question. Under the legal luminaries' pretext those wars would have been illegal too. I think it is evident from our observations of neighbouring Middle Eastern states in 2003 and before that Tony Blair and George Bush made a Dulce et Decorum est-type of decision that the intervention was their equivalent of Churchill intervening while Hitler was making plans for the Rhineland (albeit on a smaller scale).

But the two situations are hardly comparable are they?

No, and it is much easier to assert that with the benefit of hindsight. But every historical failure in preventing genocide contributes to the decision-making process. The failure in averting World War Two is one of the gravest mistakes in Western History, and it was clear that Blair and Bush were never going to make that mistake in the Middle East, especially not after observing the intentions (and in some cases, actions) of the neighbouring Middle Eastern countries. One only need think of Chamberlain's reaction to Hitler sending troops into the demilitarised Rhineland - it seems a fair point to suggest that if allied democracies had acted sooner they probably would have prevented the Holocaust.

What about Blair's claim that "The world is a safer place now"?

Yes, well, the statement is true in about the same way that the statement "Jeremy Cobyn is a UKIP politician" is true if you replace the words 'Jeremy Cobyn' with the words 'Tom Cruise' and the words 'UKIP politician' with the words 'short Scientologist'.

And what about Blair as a war criminal?

No, not a bit of it. Those who foolishly argue that Blair should be sent off to the Hague ought to consider the correlative effects if such action were taken. No future Prime Minster would dare sanction any intervention in the foreseeable future for fear of the same reprisals, and that would somewhat tie our own hands behind our back and make our enemies sit up and take note.

Fair point.

Thanks. In actual fact, we probably already have a comparable situation. One of the other main lasting legacies of the Iraq war is that no British government is ever likely to attempt an intervention process in that way and on that scale ever again.

But what about those elusive WMDs - do you think they were there or not?

Possibly. The real question you have to ask is, if they were there at some point and yet not found, how would we know about it? One cannot simply claim absence of evidence as evidence of absence. If they were there, then the almost unanimous belief in their non-existence must go down as one of the occasions in human history when the greatest number of people were mistaken.

I don't know if there were WMDs, but as regular readers of this Blog will be aware, I am not the sort of person who automatically trusts the consensual view either. I'm open to the idea that there were, because I have heard a positive claim for their existence, whereas on the other side we've only heard that a lack of satisfactory evidence for their existence is enough to rule out their existence (people do this a lot when the subject is God's existence too).

Really? Who made a positive claim fro the existence of WMD?

The positive claim for WMD was from a man who served under Saddam and openly testifies that he had WMD. That man is Georges Hormiz Sada: a retired general officer of the Iraqi air force and a born-again Christian. He has had a book published (called Saddam’s Secrets) in which he talks about Saddam’s plans to destroy Israel, his attempts to control the Arab world and how he aspired to command and occupy much more of it.

Mr Sada also talks about his own role in supervising the removal of WMD to Damascus in Syria because Saddam was worried that the Western troops would find them. There have been many other sources which expose Saddam’s complex concealment plans, and the media have nothing credible to say on this.

Hmm, but one man's word against a mountain of investigative analysis is quite meagre though.

It is, but that just takes us back to the philosophical conundrum at the beginning. I mean, it is more generally known, I think, that Saddam had a nuclear centrifuge - or at least it was in its incipient stages, which was found by US troops thanks to compliant scientists.

Moreover, there had also been emergent information about a plutonium-producing reactor in Syria which had been hit following an Israeli air-strike; it was a reactor being built by the Syrians with the help from expert North Korean engineers.

So this rather incriminates North Korea and makes them culpable for their actions in securing nuclear knowledge to rogue leaders.

It is quite worrying that America seems so impotent in the face of North Korea’s nuclear proliferation, and that they have faced no penalties for their criminal activities. That is perhaps the most trenchant argument against reticence when it comes to nuclear weapons in the international community.

The much derided doctrine of pre-emption still stands over counter-arguments – and it is supported by the realisation that once a country with a fanatical leader acquires nuclear capacity it is that much harder to do very much about it. Any exaggeration regarding Saddam’s capability does not detract from the fact that inaction was seen by Blair to have been too risky, and any misjudgement on the subject of WMD might have brought about a Middle Eastern catastrophe that was perfectly plausible with the knowledge they had at the time.

Don't get me wrong; I didn't believe it myself, even though the Middle East was (and still is) the most unstable region of its size in the world - because despite it being a horrible dictatorship, Saddam's rule did to some extent keep the genie in the bottle, particularly when contrasted with what is going on now.

Deporting UK-Based EU Migrants After Brexit Would Be As Foolish As Scratching Your Car Because You Don't Like How Others Are Driving

Theresa May is under fire for not unequivocally ruling out deporting EU migrants after Brexit, and the UK government believes it would 'unwise' to guarantee that EU migrants can stay in the UK unless they can secure a reciprocal arrangement from other European countries about Brits living abroad.

It would be absurdly imprudent to entertain the idea of deporting EU migrants living here, not to mention horrible - but for reasons that run deeper than the media is telling you. It's all to do with the free movement of people, and for that we need to start with perhaps the primary edict of libertarians - the non-aggression principle.

The non-aggression principle (while nothing like as absolute as many libertarians would have you believe) is an ethical axiom which says persons should not initiate force on other persons. In other words, your right as an individual and as a property owner must not be violated against your will.

It's a knotty issue and there are all sorts of ways (such as taxation) in which people semi-voluntarily trade off a proportion of their earnings into a state treasury fund for the perceived cross-national benefits and stability such a system brings. But generally, in a Sorites-type manner the principle holds for the majority of life.

To see why deporting EU migrants would be a bad idea, and why welcoming their ability to carry on living and working here is a good idea, we have to understand when free movement of people is a problem. Without an intelligent policy as a substratum, free movement of people can violate the non-aggression principle, because many of the citizens of the countries in which free movement is being enabled are not voluntary participants in the policy.

To take an extreme example, suppose there was a free movement of people arrangement between the UK and Somalia. With such an arrangement but also with disproportionately different size economies, populations and welfare states, there is asymmetry in the gains and losses (although one must also include the gains of the immigrants themselves).

This can lead to a situation where large swathes of people from the less-prosperous nation pour into the more-prosperous nation on the basis of a state-mandated arrangement and add all kinds of economic pressures and social duress on the citizens of the latter country.

A system that just allowed any number of prospective welfare claimants from some of the world's poorest countries into more prosperous nations would come with all kinds of strains on the health services, housing, school places, plus a drain on the economy through increased unemployment benefits and other financial entitlements.

However, a system intelligently managed whereby any citizen is free to travel, live and work in any nation is most welcome, and it would be an infringement on their liberties to have this denied to them. This is because a person going to work in another country is, by definition, bringing value to the economy in terms of consumer and producer surpluses.

Because the free movement of people policy is fairly well constructed in Europe, among nations that can offer each other beneficial migrations, we have, largely speaking, the positive kind of free movement of people where there is not too much asymmetry in the gains and losses.

So not only is it pretty evident that deporting EU migrants would be an opprobrious thing to do morally, it is also the case that robbing our nation of people that bring value to our country on the grounds that we are no longer in the EU would be a pretty foolish thing to do as well.

Of course, being a globally-minded citizen, it's important that human beings do all they can to help the world's most deprived people, and that is largely done through opening up their trade opportunities.

Alas, though, an awful lot of the problems nations face with mass immigration are problems created domestically by politicians (not to mention through their foreign policies): it is politicians that cause an awful lot of the shortage of jobs (minimum wage price controls, green taxes), the shortage of housing (over-regulated industry, environmental laws, and in some countries, rent controls), the shortage of school places (by not freeing up some of the education sector to the market of competition), and more generally, with far too much taxation.

The Dangers Of The Past's Prologue

Although media headlines are completely dominated at the moment by the EU referendum result, we still shouldn't lose sight of the fact we are currently in one of the most severe and globally unsettling refugee crises of the past 70 years.

Irrespective of domestic political leanings or views on the EU, let's never forget that we are human beings first, and that across the world right now there are hundreds of thousands of displaced people seeking a safe haven because they have suffered or have been in danger of suffering persecution by horrid groups like Islamic State or murderous dictators that run their country.

There's also a lot of feeling (correct feeling, in my view) that we in the UK are not doing enough to help refugees - particularly with the current crises in Syria, Iraq, Libya, and the countries like Yemen, Mali, the Central African Republic, Afghanistan, the Democratic Republic of Congo, Burma, Nigeria, Somalia and South Sudan that have endured decades of open-ended war and civil unrest from which many of their citizens have fled.

Because of this, there is repeated talk of whether our domestic politicians are doing enough to help (and I haven't exactly been silent on the issue myself). Given the foregoing, I thought you might be interested in this little bit of history that has been pretty much airbrushed from British and American discourse.

Once upon a time there was an initiative called the Évian Conference which was set up in response to the plight of the increasing numbers of dispossessed Jewish refugees fleeing Nazi persecution throughout Europe. Hitler's response to the conference was to say that if the nation state members (including the UK and USA) could offer them refuge he was ready to put them at their disposal and even send them on ships if necessary.

In response, most of those nation states were extremely reluctant to take in very many of the persecuted Jews - a mistake that was exacerbated when shortly after in that same year Britain and France gave Hitler the right to occupy the Sudetenland of Czechoslovakia, which led to a further 120,000 Jews becoming stateless.

After a multi-national failure to deal with the problem of so many persecuted Jewish refugees, we all know what happened next - Hitler dealt with them through his genocidal Final Solution, in which he systematically looked to eradicate as many Jews as he possibly could, and ended up exterminating two thirds of Europe's Jews.

One hopes that we'll never see anything so horrific on that scale again - but it's certainly a sobering lesson regarding the hell that can be unleashed when political leaders are casual and reticent about offering refuge to some of the world's most persecuted people. Let's hope we don't find what Antonio and Sebastian found in Shakespeare's The Tempest when conspiring to kill Alonso the King of Naples - that, unfortunately, "What's past is prologue".

If you're familiar with The Tempest you will recall that Antonio and Sebastian were thwarted by Ariel. Politicians by nature are usually narrow and provincial, and internal in-country political disagreements (what Freud called 'the narcissism of small differences') often means they are allowed to get away with most of it.

Consequently, unless we become a nation of caring and kind individuals that is outwardly vocal about wanting our politicians to represent that care and kindness in helping the world's most vulnerable people, they will continue to get away with their far too indolent attitude towards the refugee crisis. And given that there are some forces in the world who desire to unleash a hell even worse than that of Hitler, indolence and complacency is not something we should allow to continue.

Just Like The Kernel Of Wheat In Jesus' Parable, The Dead Seeds Of The EU Must Be Sown Into The Earth

Today, thousands of people with scant regard for democracy are marching through London to protest against the democratically voted for referendum decision to leave the EU. Putting aside the issue of valuing democracy, the people who voted Remain, and the people who voted Leave that are now regretting it, are worried about the future post-Brexit. They should not be, particularly once they get a handle on the bigger picture that extends several decades henceforward.

Sometimes a little bit of pain is required to prevent even more pain. If your young child comes to you with a splinter in his thumb, you know the best way to deal with it is to get it out from the under his skin straight away by pressing down on it with your fingernail.

Your young boy may resist the added pain, but you know that what is causing him that extra pain is actually reliving him from worse pain, soreness and possible infection in the long run. This is what is happening with our leaving the EU - we are getting out at a time when very few people understand that it is a gradually crumbling empire, and that in its current state it is going to have to eventually die before its constituent nation states can live.

Brexit will almost certainly set off a domino effect of other nations joining us with their own exit in the next few decades. It will be a slow dismantlement of the EU, but it is almost inevitable that it will happen, for reasons I talk about in greater detail in other Brexit-related blog posts. 

Don't misunderstand, I have no time for all the anti-immigration bile going around, and I'd hope that when the other nations follow suit and join us outside the EU that they'd do so because they can see how even more prosperous our nation becomes with independence, not under the influence of the plethora of extreme right-wing parties gathering momentum in the north-western European countries. But for the good of the continent, individual nation states need to save the EU from itself: it is stagnating, it is unsustainable by being inimical to growth, and no nation past or present that has copied its model has seen anything other than economic disaster.

Playing the long percentage game, with the exception of Germany, France and possibly Belgium and the Netherlands if things go their way, the majority of the EU countries are almost certainly going to trail behind the world's emerging nations in the next few decades, and it's for five main reasons.

Firstly, in a wider global market with most countries more actively involved than ever before, cross national competition is going hinder set-ups like the EU that impose tariffs against imports from non-EU countries.

Secondly, the market for consumable goods is steadily shifting away from Europe towards Asia, which will give them the advantage in the market for future consumables too.

Thirdly, the single currency (the Euro) ultimately works far better for Europe's big players - but it is in many ways a hindrance for the rest, which means Germany (in particular) is going to be involved in a lot more Greece-like scenarios as the predominance of the market shifts Eastward.

Fourthly, and this is a development of the second and third points, as the market predominance shifts Eastward, the quantities of advanced engineering products that Germany, Belgium and the Netherlands sell to China are going to diminish as China becomes the leading player in advanced engineering in the next two or three decades. And this won't necessarily be the case, but the yuan is the only realistic trading currency in the world that could become a gold standard.

Fifthly, the whole continent of Europe has a serious fiscal crisis in that it is catastrophically failing to restrain the pressures of increasing government spending with an ever-aging population. The tax burden necessary for a society of this kind is going to be severely detrimental to the economy even if it were a free trade area with the removal of barriers.

However, given that it's not a free trade area, it's a customs area under the thumb of a political superstructure that erects a common tariff bloc around its member nations and robs them of open trade with the rest of the world, I think we can replace the word 'detrimental' with the word 'ruinous' economy.

Forget for a moment about the world we do actually live in - the one where politicians, bureaucracy and establishment-interference is ingrained in our expectations - and consider this question. Why should the UK leaving the EU cause any market instability at all? To answer honestly is to admit that, it shouldn't, and that what's causing the bulk of the problems is the size of the interference in free trade of the politicians, bureaucracy and establishment-interference in the first place.

The moment we decided to leave the EU, nothing about the UK's productivity or its businesses' ability to create value changed. It's as not as though there was a national flood that drowned out the UK's commercial activity. When everyone awoke the following day they woke to the same physical UK. The big thing that changed, however, was that the EU, which regulates countless details of our exchanges became, in potentia at least, a different kind of obstacle for buyers and sellers to trade freely.

Moreover, the attitude of Eurocrats since Brexit was announced gives exhibition to the very reasons it was good to leave them in the first place. The reaction to the prospect of their not having such a big say in our lives, plus their threats of even bigger impediments to our free trade by further taxes, tariffs and social restrictions, demonstrates not just why we're better off out, it also gives a future hint of the fragility of the foundations on which its structure of constraint is built.

As long as each domestic government oversees the basic necessities of light regulation to protect consumers from any of the undesirable things that might affect a mutually voluntary transaction (trades description issues, health and safety breaches, quality of product, and so forth) - basically all the things that we as consumers wouldn't wish to be victims of due to asymmetry of information - there is absolutely nothing that prohibits mutually voluntary and beneficial trade between two people or two nations except the unhelpful constraints imposed upon them by politicians, bureaucracy and establishment-interference.

What we are in danger of is a self-fulfilling prophecy of doom, whereby pontificating about how troubled economy is going to be creates an insidious social instability which affects business and outside investment, which precipitates the more troubled economy for which everyone was blaming the opposition.

What we need, however, is to be smart and resolute, and understand that the freer we can be in becoming even more of a global trade power, the less turbulence we'll see in our economy, and the more other EU nations will begin to see how, in extricating ourselves from the union, and enjoying more mutually beneficial trade relations and increasing our status as dominant global economy, they too can follow suit and help signal the beginning of the end of many of the ways that politicians, bureaucracy and establishment-interference place unnecessary constraints on our lives.

Mark my words, here is what's going to happen - and I probably will be quoting this in a few years' time. After the expected volatility and instability over what people seem to be referring to as 'uncertainty', England (possibly without the union of Scotland, Wales and Northern Ireland, although they'd be mad to divorce us to become wedded to the crumbling EU) will be thriving with their improved global trade relationships, and perhaps (if our leaders are wise) a healthy attitude in not restricting the movement of people, goods and services in Europe.

Then, bit by bit, as the EU political union becomes ever-more precarious, and as more and more countries start to desire autonomy and obtain the domestic economic stability to break away*, the EU as we know it will fold in on itself, as Europe's nation states gradually claw back their ability to play to its market strengths outside the EU bloc, and as everyone gets wiser and wiser to the fact that models like the EU model just won't be sustained for longer than a brief-ish passage in humans' trajectory of gradual progression, less involvement by the establishment in their lives, and increased freedom and liberty.

* No one could have failed to notice what the Eurozone crisis has done to the likes of Greece, Italy and Spain.

Why Most Party Leaders Are Probably More Extreme Than The Average MP In Their Party

Today I stumbled upon a very interesting paper, in which the author Andreas Murr from the University of Oxford predicts that according to a Bayesian analysis there is a 95 per cent probability that having the larger winning margin in party leadership elections increases the chances of winning the General Election, and that the party leader with the largest winning margin will almost certainly become the next Prime Minister. Murr was one of the few people last May to predict what most people didn't expect - that David Cameron, not Ed Miliband, would be Prime Minister for the next term. 

What, then, does that say about the best kind of leader for a party to have? It's certainly a pertinent question, given that at the time of writing the Tories are looking to elect a new leader after the EU Referendum result has rocked their party, and that Labour is in a shambolic mess under Jeremy Corbyn.

Because politicians only exist by virtue of votes, popularity is the main driver of political rhetoric. If an idea is socially unpopular then any politician that holds it ensures he or she is stuck on the fringes, eliciting ridicule or opprobrium among the majority (a good example is Nick Griffin of the BNP). To hold such a position means you depart from the electorate's view of what mainstream, common-sense politics is all about.

By equal measure, once an idea is socially popular, anyone that departs from it is likely to be accused of being a socially toxic person. Given that party members want to be valued by their tribal group, the opinions each member holds are more likely to be in line with what they perceive the general opinion to be (obviously things like the EU referendum throw up spanners in the works).

If dissenting voices are known to be suppressed then there is usually a prejudicial reservoir flowing through the party, which increases the likelihood that the leader is going to be slightly more extreme than the average MP or party member.

But also, given that leaders are so important to the party's chances of winning an election, and that the principal goals of a party are to ensure in-group solidarity and cohesion (as much as possible) and to be popular enough to form a government, I suppose the goal of all parties is to have a leader that best represents a kind of weighted average of the nation, rather than a leader that best represents a kind of weighted average of the party, which also adds weight to the idea that the leader is likely to be slightly more extreme than the average MP or party member.

If The Premier League Had Fewer English Players, The England National Team Would Probably Be Better

In response to yesterday's blog about the England football team being over-achievers, a reader asks whether the problem of England's poor performances is also in no small part down to the hundreds of foreign players playing in the Premier League, making it hard for home-grown talent to flourish.

It's a popular argument, and one which has been made before by professionals like Steven Gerrard, Michel Platini and Alex Ferguson. For surely the sheer number of foreign players in our league is bound to make it harder for English players to get good enough to be top international players.

At first glance, the argument seems impeccable - the more English players that get regular match time for their teams each week the better the squad of players the England manager will have. Unfortunately, while attractive, the argument is probably the opposite of the truth.

The problem for the England team (well one of their problems) is not that there are too many foreigners; it is that there are not enough foreigners. Yes, paradoxically, the fewer English players in the Premier League the better I'd expect their international team to be.

Here's why. Foreigners playing in the Premier League are there because they are good players. Therefore, more and more good foreign players in the Premier League means it's harder for English players to break into their club teams, which means at the top clubs you need to be a really good English player to be playing regular football (a point I developed more fully here).

The book Soccernomics seems to back this up, showing that since foreigners started to populate the Premier League in greater numbers (from 1995 onwards) England's overall win ratio is up by six percentage points (although naturally other factors could be at play too).

I also remember reading about how in the 1980s and early 1990s discrimination against black players proved to be costly for a team's success. Basically, when team's wage budgets were similar (a factor that is perhaps the biggest indicator of a team's likely success) the teams with the fewest black players finished lower in the league than teams with more black players.

When all clubs were deliberately slow in signing black players (which was sadly the case in the 1970s and early 1980s) discrimination costs were not very high. But when some clubs started to sign talented black players, the clubs that still discriminated paid increasing costs, as results suffered as a consequence (I've blogged before about similar discrimination penalties in the market here).

The upshot of all this is that, as you'd expect, increasing the pool of talented players occurs more fruitfully when there are no discriminatory barriers to that pool being increased. And when the pool is open to footballing quality from all over the world, the standard increases, meaning the standard required by English players increases too. As long as the ratio of English players to foreigners doesn't drop below a prohibitively low threshold, more foreign talent in the pool will probably increase the home-grown talent too.

Our EU Money Should Be Given To Scientific Research

Regarding the money we give to the EU that can now be spent in the UK, and the bickering over who promised what, and to where, my advice would be to give a significant proportion of the money to our UK scientific research.

Britain's science sector has been well funded by the EU's European Research Council in recent years, and while there is always a danger on any kind of research funding being overly-reliant on EU grants, there's no denying that Brexit will hurt some parts of our science industry.

It is important, then, that the post-Brexit government spends a significant proportion of that extra money on our science industry. In a world in which a global market is pretty well established for most countries, the developing countries' progression race is likely to be decided in no small part by how scientific the country is - particularly in terms of money put into research, and the extent to which that research can bring them into closer competition with the bigger players in the global market.

The primary European nations (England, Scotland, Germany, France and the Netherlands) that dominated the market for trade in the late 19th century were also all the biggest players in terms of scientific endeavours too (joined by America shortly after). They remained the nations that lead the way in the global market, and were later joined by the likes of Norway, Switzerland, New Zealand, Canada, Sweden, Australia, Denmark, Belgium and Finland.

Excluding China, which is an exception all of its own, the other recently developed countries that have the biggest edge on the developing world nations are the smaller countries like Japan, South Korea, Hong Kong, Israel and Singapore, which, unlike India, Brazil and Russia (prior to its own internal problems) are able to advance scientifically with a great degree of rapidity, and become big players in the global market without having a large proportion of the population still at the subsistence level.

Alas, when it comes to popular opinion and issues that our citizens are most concerned about, science funding will be way down on the list. But this is a big mistake, and the government needs to shape up and act on the fact that a healthy, progressive country is one in which economic development and scientific development are coterminous.

Finally, even if the government steps up and matches the EU funding it has lost, it is important that our scientific institutions retain the international relations they have, as the global pursuit of discovery, knowledge and research is more interconnected and interdependent than ever before.  

The most prodigious collaborative science project in Europe - the Large Hadron Collider, built near Geneva in Switzerland - was designed and commissioned by engineers and particle physicists whose provenance spans 100 universities across the globe.

Moreover, let's never forget that the UK, with 99 Nobel laureates in the sciences, more than three times that of the EU per million people (minus the UK's contributions, of course), one and a half times that of the United States, and over four hundred times that of China, is a leading player in the now global scientific community. Consequently, although the EU has lost us in terms of a political union, it would be mad to lose us in terms of the scientific union - and both agents must ensure that doesn't happen.

You've Probably Got It Wrong About England: They Are Overachieving, Not Underachieving

England's 2-1 defeat at the hands of Iceland last night was perhaps their biggest ever tournament low (although I have to say, congratulations Iceland - well played!). For years England's supporters have lived in the past glory of 1966. Ever since, we find that before each new tournament there is half-hearted confidence that this might be the year we emulate our World Cup win at Wembley.

But then, surprise surprise, every two years you can pretty much guarantee that England loses to a nation with whom we've been in conflict during a war - it's usually Germany or Argentina. Then once we get knocked out everyone laments how close we were this time around; losing on penalties (Stuart Pearce , Chris Waddle, Gareth Southgate and David Batty, look away now), or by some incident on which the game turned (David Beckham's sending off for lunging at Diego Simeone, Rolandinho's freak lob over David Seaman, Wayne Rooney's sending off followed by Cristiano Ronaldo's wink, and Lampard's shot that went over the goal line but wasn't given).

In the past a scapegoat, an instance of injustice or a narrow margin has been identified to cushion the blow of our elimination. But in recent tournaments, things have changed. To my memory, the last four tournaments (including this one from which we've just been eliminated) have been entered without very much hope or expectation, and the team has been pretty sub-standard in each of them.

However, all that said, it's actually quite probable that we are expecting too much of our football team - after all, it's no use considering whether a team is better or worse than expected without first asking how well they should be expected to do. When we ask such a question, things change a bit. After reading a book called Soccernomics a while back - a book full of interesting statistics - we find that, in actual fact, from 1972 England only tend to win about two thirds of their matches (England's record during that period is P402, W208, D113 and L81, so if we treat a draw as half a win, then England's overall win ratio is 66%).

The reality is, winning only 66% of your games makes it highly unlikely that you'll win a tournament outright because you're going to come up against teams whose win percentage is in the 70-80% range (Brazil, Germany, Argentina, Spain, Italy, France, the Netherlands).

Averaged out over a few knockout matches in a single tournament England's chances with a 2/3 ratio are quite slim (66% then 44% then 30% then 20% in respective rounds). As an average that's only a 20% chance of winning the tournament, but in reality it's slimmer than that, because in knockout stages when they're playing better teams their win probability will sometimes be less than 66%  

But the story doesn't end there, because the authors of Soccernomics (Simon Kuper and Stefan Szymanski) have worked out a way to determine whether fans are being too hard on England or not. And it turns out they are, because England, believe it or not, are not under-achieving, they are actually over-achieving.

Using three key data points relating to countries: income per head, total population and international experience, and a whole chapter's worth of explanation that space here doesn't permit, Kuper and Szymanski have a formula which maps how well a nation's football team is expected to do, where the more average income per person, the better; the larger the population of the country, the better; and the more games played against other countries, the better - with all three combined constituting the better chance a team has of being successful.

Plugging England's vital statistics into the equation, it turns out that on average our football team is doing slightly better than they should have been doing. When Kuper and Szymanski analysed England's income per head, total population and international experience, they found that after running the numbers England should score on average 0.63 goals per game more than their opponents.

In the period from 1980 to 2001 England's win ratio was 65% (taking a draw as half a win), and during that period it emerges that England outscored their opponents by 0.84 goals per game on average, which is 0.21 more than expected. In other words, in the period when England fans had frustration after frustration because their team was 'under-achieving' they were actually over-achieving.

Finally, in recent times, I wonder if England's poor performances have been in some part down to fatigue. The English teams play a greater number of competitive games than their continental neighbours, in a very fast-paced and no doubt energy zapping league.

An interesting statistic is that prior to Euro 2016 in the past six tournaments England scored 25 of their 38 goals in the first halves of matches, but even more significantly in the matches in which they went out of the tournament they scored 8 out of their 9 goals in the first half.

The England team is badly under-performing in the 2nd half of their big matches. This could be because their players suffer from fatigue after such a demanding season, or because they play at the Premier League pace in the first half of internationals and then run out of juice in the second half - but either way it seems highly possible that these things are a factor in England's tournament results.  

All in all, (the Iceland defeat excepted) the next time you feel like declaring that England should be doing better in tournaments than they are, just remember that not only are they doing slightly better than they are expected to do, they are also doing so while being tired bunnies too.



The Best Way To Improve Outcomes Is To Have Better, Fewer Voters!

It's been a funny week for the word 'democracy' - the recent EU Referendum, despite having the largest voting turnout for nearly 25 years, has called some to question the democratic process if it throws up outcomes that are unsettling.

Some have asked whether democracy itself is a sufficient system when the results bring about a sense of foreboding, and whether potential costs ought to allow a mechanism by which democracy can be overruled.

 

This is slightly ironic in that people are always calling for more UK citizens to engage in politics and get up and vote, yet when this does happen there are widespread complaints that too many ignorant and ill-informed people voting does not a good outcome make.

Of course, given that politically and economically the majority of the electorate are abjectly uninformed, it is not in the least bit surprising that big decisions put in the hands of the public can be a dangerous thing.

All this makes a blog post I wrote over three years ago seem quite prescient. It was there that I addressed the problem of the voting public and came up with an idea for a solution:

"The only way to vastly improve the quality of our MPs is to improve the quality of the voters – and the only way to improve the quality of the voters is to drastically reduce the number of them, and then give a randomly selected few the time and resources to rigorously research and analyse the candidates before them. 

Here’s what I’d suggest. Reduce the number of voters in each constituency to 200 people chosen at random (to ensure a proportional representation of sexes, ages, ethnic backgrounds, income groups, religious beliefs, political views, education, and so forth) and have each of them accompany the political candidates to a location in which they stay for a week, ensuring the time, resources and intellectual and emotional capacity to question the MPs, give and solicit feedback, and test the candidates’ political calibre before casting their votes at the end of the week (the benefits of the outcome would probably more than pay for the financial costs of this, and some of the offsetting savings will occur by not having to employ polling clerks throughout the country on election day).

You may worry that this will disenfranchise most of the other citizens that don’t get to vote, but there’s no reason to think this. At the start of play, everyone has exactly the same chance of being selected, and everyone in the country (both those selected and those not) will be secure in the knowledge that the people who are going to represent them in Parliament will have been chosen with the utmost rigour and analytical scrutiny by the most conscientious citizens in the country. That cannot be as disenfranchising as the current system in which every single person that votes knows that that vote will have the same use as if they’d stayed at home. 

All that said, the bottom line is, even if the system I proposed is a superior system for improving the calibre of our MPs (which seems logically unimpeachable to me), it might still instinctively be the case that our present less effective voting system is a pearl of great electoral price from which it is too emotionally and psychologically costly to depart."

As would always be the case, you'd have to decide whether you prefer including everybody in the voting process and therefore giving some of the craziest cats and bigoted individuals a voice, or whether for the good of the country you'd be happier with far fewer but possibly better informed voters.

Or suppose, if we could find a workable method for this, we somehow only allowed the smartest, knowledgeable and best-informed 1000 people in the UK to vote on who ran our country, how would that sit with you?

 

If allowing everyone to vote is not as good for the country as allowing a selection of only smart and informed people to vote, which seems like a sine qua non to me, then there will always be a trade off between better outcomes and a better spirit of total inclusivity in the country.

Of course, rather amusingly, I'd like to leave you with the following thought, which perhaps kills two birds with one stone. The whole country gets to vote on whether the smartest, knowledgeable and best-informed 1000 people get to vote for our political outcomes.

 



The Psychopath Might Be The Closest Present-Day Similarity We Have To Our Palaeolithic Past

The title of this blog post is based on a kind of half-awake, half-asleep dream I had last night (possibly brought about by the recent mass shooting in Orlando, and the killing of MP Jo Cox in West Yorkshire, although one can't be sure).

Psychopaths have always been a bit of an enigma to psychologists: their morals, their empathy levels, what their inner-self is like, and how they perceive the outside world have been topics of study for many years (which is also one of several reasons why I think we are best not putting people to death, even for heinous crimes).

Psychopaths are certainly different to most other humans, and this plays out with a complex combination of genetic factors (as evidenced by studies of monozygotic twins and their genetic predispositions for genetic personality disorders) and, of course environment and the concomitant socialisation.

It’s worth considering just how similar to each other we are as a species – phenotypically, genotypically – we are so alike in our mental composition that if we had a shared existence in exactly the same culture, the same environment, the same health and well-being, and with the same access to knowledge, we would reach the same conclusions about a great many more things than we do.

It may surprise you to hear this but biologically (that’s genotypically) we are almost identical to Paleolithic man – and those primitive traits that helped those distant ancestors reproduce are not all that absent in modern humans.

There's probably a pretty good evolutionary truth in that – and we know that post-social contract humans are behaviorally enormously different from the more primitive homo-sapiens, and this is so much truer regarding our distant ancestors, whose comparable absence of conscience and empathy would violate even the basic social norms and expectations for modern social harmony.

Picture in your head two things:

1) A modern day psychopath.

2) A primitive man alive long before we began to develop any formal, communicable sense of morality.

While it's obviously a lot more complex than what I'm now going to say, there may well be a kernel of truth in the fact that when one considers those well known tendencies we observe in modern day psychopathy, such as cunningness, lack of remorse or guilt, emotional shallowness, lacking in empathy, failure to accept responsibility for their own actions, revocation of conditional release, a parasitic lifestyle, poor behavioural control, lack of realistic long-term goals, impulsiveness, and irresponsibility, we can see that these all bear quite a close resemblance to traits of our primitive-human past, in that they might well have qualified as being in some way comparable (stress the word 'comparable', not the same) to a modern day psychopath if they were brought into modern day social surroundings.

You Voted For Them To Be Rich, Silly!

It was Matt Ridley in his excellent book The Evolution of Everything who talked of the Internet as being a living example of the phenomenon of evolutionary emergence - a thing of complexity and order spontaneously created in a decentralised fashion without a designer. What he means is, nobody sat down one day and planned the Internet as a fait accompli phenomenon - it is a global system of interconnected computer networks that evolved over time, and is still evolving, in a cumulative step by step process of trial and error that tailors to our tastes and needs. 

The emergence of the Internet - like cities, cars, houses, clothes, supermarkets, science and medicine - was driven by consumer demand, be it for global communication, widespread knowledge, online shopping, social networking and the countless other benefits it brings to human beings all across the world. It provides a microcosmic example of markets in general - where the complex emergence of order occurs not from being designed top down, but by a long natural selection-type process of good and useful ideas surviving, and bad ones being weeded out.

Given the foregoing, I find the irony of people on Facebook bemoaning the mega-rich's wealth quite amusing. Because it ought to be remembered that making people rich is rather like how an electorate votes people into power in government - in a way that slightly resembles a democracy. Most of the mega rich - Bill Gates, Warren Buffett, George Soros, Mark Zuckerberg, etc - get rich by people voting with their wallets.

The same is true of film stars, musicians, authors and painters - it is democratic in the sense that when a lot of people buy what they have on offer, be it computer products, films, or whatever, they are voting to make those pioneers and innovators richer than the average person. They are doing so because they recognise that value is being provided in the shape of consumer surplus and producer surplus.

Mark Zuckerberg is the most obvious case here as we discuss this matter on Facebook. Zuckerberg is one of the mega-rich people - richer than most people in the UK and USA, yet the benefits of Facebook and the enjoyment and connectivity it brings to hundreds of millions of us is very evident. That one meets so many people on Facebook who are blind to this irony is, as I say, amusing to say the least.