Club Troppo

Corporate Social Responsibility (CSR) is something I’d like to do some more work in. I haven’t because I’ve not been able to get a consulting gig for Lateral Economics on the subject (hint, hint, if you know anyone who wants some consultant to go boldly where no consultant has ever gone, I’ll tell them you sent me.) Anyway, I’ve offered a few posts bearing on some of the issues.

Right now from what I have read, CSR is in a pretty parlous intellectual state. One the one hand you have the Milton Freedman view which is that the business of business is business. This has the advantage of intellectual coherence and in that regard it’s way ahead of what I’ve seen of the CSR movement which seems to be a kind of rhetorical arm waving. It’s rare that there’s much rigour about what it is or why firms should worry about it.

However CSR is a serious thing.  I think it should focus on the interface between business as the kind of ethically anorectic profit maximising entity one finds in neoclassical economic models and the three dimensional ethical beings that populate the workforce, firms and polity. One of the main drivers of existing CSR initiatives is the desire to attract and hang onto employees who want to think of themselves and their job as ‘making a difference’ for the better in the world.¹

Often CSR is pretty arbitrary, and involves a firm committing to (for instance) reducing its carbon footprint, or raising some money for a local charity.  And the reason for doing so is that CSR helps give the firm a ‘licence to operate’ from the community it serves.

Well that’s all fine, I guess. But it seems to me that there are two powerful ideas that can be brought to the table, but which rarely are: (Continued)

I made a comment here a couple of days ago which I believe expresses the frustrations of many about the chronic failure of the Labor government, both under Rudd and Gillard,  to effectively prosecute the case for reform in just about every area:

The puzzle here, as in contemporary Australian politics more generally, lies in the evident inability of the federal Labor government to robustly and effectively defend and promote its own policies, and the equally evident unwillingness of the mainstream media to see its role as doing anything beyond “horse race” reportage.

Rudd was just an abysmal communicator as well as (apparently) a complete prick, but Julia Gillard clearly has the capacity to communicate effectively and engagingly.  Yet invariably both she and her Ministers choose not to do so.  It’s an observation Peter Lewis makes in an article at ABC Unleashed with specific reference to the Murray-Darling water debate, and that Niki Savva makes more generally in today’s Oz:

If politicians give journalists something interesting to report, and lead debates, then they will oblige by publishing it and broadcasting it. If politicians find new things to say about old issues, or say them in an interesting way, they will get run. As well as using the right tactics, they also need to muster the right arguments. They require a strategic approach, taking account of the pitfalls and dealing up front with them.

Politicians will not always like the way their remarks are reported. The reports could be negative, outrageously misinterpreted and downright unfair, but the Prime Minister, backed by her senior ministers, has to be out in the public arena leading and steering important debates.

Labor has largely allowed the public debate to go by default to the Opposition not only in the Murray-Darling water debate but on climate change, the current debate about the role of the independent Director of Military Prosecutions, and even the National Broadband Network,  just to pick a few current examples.

I can’t help wondering why?  Gillard is clearly no fool nor are her colleagues (well, some of them anyway), and there must be at least a few advisers with a bit of nouse.  So why are they continuing Rudd’s “strategy” of failing to engage pro-actively in substantive public debate until it’s too late and the well of public opinion has been irretrievably poisoned on a given issue? It’s a sincere question, and I’d really like some help from Troppo readers because I’m truly mystified and have been for quite some time.  Here are a few possibilities:

1. There is some deeply cunning principle of spin-doctoring that dictates failing to defend one’s own policies and giving an ongoing free kick to your opponents.
2. They really are trying to defend their policies, but they’re so bad at it that this is the best they can manage.
3. They are so busy with actual policy implementation that they don’t have time to publicly defend and prosecute the policy agenda.
4. They think it’s pointless to prosecute any particular policy agenda because they’re going to be forced to negotiate it with the Greens and Independents so that the final outcome may bear little resemblance to the initial policy proposal, so why bother risking antagonising potential losers when you can duck for cover, leave the public servants out front and refer the issue to a parliamentary committee?
5. They think that the great unwashed in marginal seats are completely uninterested in substantive policy in any real sense, and why waste time on the self-appointed cognoscenti minority like political blog readers,  ABC viewers and broadsheet newspaper readers?
6. The Parliamentary Labor Party is now so full of career politicians whose entire experience is in the union movement or as party apparatchiks that they have neither knowledge of nor interest in anything beyond their own immediate political survival.  They don’t in fact possess any substantive beliefs or policy aspirations at all, and therefore there is no issue worth defending unless opinion polls and focus groups suggest it’s worthwhile.  Policy is for “policy wonks”.

Please explain, as Pauline H once famously put it.

This post began as a response to Julia Thornton’s brief comment on a previous post in which I outed myself as a fan of the philosopher Hegel, directing me to a site where Hegelians roamed free. It’s an interesting thing what we make of what we learn at uni – and to some extent maintain beyond it with a bit of reading. Outside one’s field, one can’t take too deep an interest in a particular area – or it’s practically very hard. So what does one take into life outside the field one might follow? An ossified set of propositions from some old codger. Well perhaps. For me anyway, I can say that my study of Hegel helped shape a few important things about my intellectual orientation to things.

I doubt it really changed me (for good or ill, these things are largely temperamental I suspect) but it gave me a bit of a vocabulary to express some things. And as I said in the comment to Julia, ”the thing is, I’m not a Hegelian. I’m not an anything much.”

I think Hegel is the most amazing, eye-opening philosopher I’ve ever come across, and I think of his ideas a lot, but I don’t think they create a program for anything much – or at least not for me. My own idea of philosophy is that it’s a kind of ‘rhetoric of epistemology’. If, as is likely that means nothing to you I’ll try to explain – though who knows how I’ll go, it’s quite tricky to explain.

Since we don’t have a clue what makes up the world, or how we should think, the thing I love about Hegel is that he reinvents the world in a fabulously rich way. I divide philosophy and those who discuss philosophy into two camps. The first lot fancy themselves as devilishly commonsensical and they’re forever lecturing us that if only we could jolly well sort ourselves out, then we could cure the world of all known diseases march down the road to truth, principally by eliminating error.

Logical Positivism was in this tradition. And, in reinventing ‘Hume’s fork’ – in saying that something was either falsifiable or meaningless metaphysics – they didn’t quite account for the fact that this linchpin of their system, their criterion of meaningfulness itself was unfalsifiable and therefore (presumably) meaningless. To me Logical Positivism is the philosophical equivalent of the Titanic – the unsinkable ship, sinking on its maiden voyage. Richard Dawkins is the amateur philosopher in this mould, blissfully unaware of his own capacious ignorance of the very topic on which he writes whole books. I call this philosophy as ‘metaphysics by default’. The practitioners do metaphysics but are unaware of the fact, thinking it’s commonsense. In this sense they are actively unphilosophical, but blissfully unaware of it trooping on through the undergrowth, pith helmets firmly strapped to their chins.

In this world of thought categories like ‘matter’ or (though this is a bit out of fashion) ‘mind’ lurk either explicitly acknowledged or implicitly fundamental categories on which thought gets built. But no-one has got the foggiest clue what ‘matter’ or ‘mind’ really is. (Paradoxically they’ve got a pretty good idea of what ‘mind’ is because they experience it from the inside, but they can’t escape the subjectivity of that experience. As for matter, well even as a scientific endeavour the more we look into it the futher it recedes from us as intelligible. It gets curiouser and curiouser.)

My own personal conclusion from this is, as I’ve suggested on this blog before, is that if we go looking for foundations for our thought, we end up in fictions. It’s best we acknowledge that and since they’re fictive, we get the opportunity to make up fertile fictions – fictions which will help us think in a fruitful way rather than just lead us to rehearse what seems obvious to our senses (but which is in fact the quite arbitrary artefact of our intuitions as beings which inhabit a largely ‘Newtoninan’ world between galactic and atomic scales.) (Continued)

NSW Premier Kristina Keneally has continued her stoush with Prime Minister Julia Gillard, described being forced to choose between signing up to uniform national workplace laws and $144 million in federal grants as a “Sophie’s choice”.

I wonder whether the photogenic but seemingly vacuous Keneally has any idea just how offensive this statement must seem to her Jewish constituents, or indeed just about anyone with any meaningful acquaintance with the events of the Holocaust.

That is especially so when the focus of Ms Keneally’s concern is her desire to pander to the thuggish demands of NSW Right trade unions that she preserve outrageous provisions conferred by NSW industrial legislation at their behest:

1. whereby unions have the right to prosecute employers  for alleged workplace safety offences; and
2. reversing the onus of proof for employers so charged, so that they are guilty unless they can prove themselves innocent!!

This has little or nothing to do with workplace safety and everything to do with giving the unions a bargaining chip to intimidate employers in award and other negotiations.  Can you imagine the reactions of the unions if the Howard government had included in Work Choices powers for employer groups to prosecute unions and their members for workplace breaches, and reversed the onus of proof for workers so charged?

The consolation is that we only have to put up with the NSW Labor government for a few more months before they suffer the electoral oblivion they so richly deserve.  Presumably Keneally’s pandering to the demands of the union thugs is designed to induce union bosses to squander their members’ funds on campaigning for NSW Labor and thereby minimise the scale of its annihilation.  At least in a general sense I don’t have a problem with that.  The wider public interest in a democratic system requires that we still have an effective Opposition after the election.  As Lord Acton famously put it, power corrupts but absolute power corrupts absolutely.  That will eventually apply to Farry O’Barrell’s impending Coalition state government as much as it so obviously does to the current Labor rabble.  In that sense at least Keneally might unwittingly be serving the public good.

Well well well. I’m a fan – perhaps a bit of an ex-fan of WordWeb. It’s a great little dictionary, thesaurus which enables you to highlight any word in any app and by clicking a few keys get a definition of a word and synonyms, antonyms and so on. It’s a ‘freemium’ model of monetisation, though recently it’s acquired a twist. It’s free for the general cut down edition and I used it for a good while – over a year, and then one day, on a bit of a whim, I bought a copy of the full program on the grounds that I didn’t mind tossing $50 odd bucks their way for providing such a fine service to the world, and I was sure I’d get $50 out of any extra services a ‘pro’ version of the program would offer. And so it has been.

But on the computer I originally installed the program on  I reformatted the hard disc. I didn’t bother installing the full version, and just installed the free version over the net, as it was more convenient. I figured when I needed it I’d install the full version, but since I kind of bought the full version out of the goodness of my heart, I didn’t really have much use for it and made do with the cut down free version.

Anyway, WordWeb have made some changes. The free version told me that because it was free it was doing a quick survey on my habits and started by asking how many commercial flights I took a year. I thought ‘fair enough’ they’re earning some money by doing this, so I answered the first question “more than two” and then the lights went out. (Continued)

From Deidre McCloskey’s The Secret Sins of Economics

A very pompous linguist was giving a talk at Columbia and noted that there were languages in which a double negative meant a positive (standard English, for example: “I am not going to not speak” = “I am going to speak”) and languages in which a double negative is a stronger negative (standard French and Italian, for example; or non-standard English: “You ain’t got no class”). But, says he, articulating what he imagined was a universal of grammar, “There are no languages in which a double positive is a negative.” Pause. Silence. Then came a loud and knowing sneer from the back of the room: “Yeah, yeah.”

As readers of this blog will know I regard the state of the economics profession as a scandal, and have for years. It’s only occasionally when it really matters, as no matter how good the discipline was it is mostly condemned to ignorance – the world is too complex to understand. But as people like Delong and Krugman have been pointing out simply bizarre arguments – like that US unemployment is mainly structural – (it structurally went from ~5 to ~ 10% following a financial crisis and it’s structural!  Sure it is. And the Great Depression was a spontaneous holiday – sadly that’s not a joke. Economics is a profession where people much cleverer than me think things that are absurd.)  This is just one example, pretty much every odd week sane economists fight off idiotic propositions championed by highly credentialled economists. Like the ‘bond vigilantes’ who were lurking ready to strike at any moment during a prolonged and deep recession. Like that low interest rates present a danger of deflation not presented by higher interest rates – yes folks this view was put by Minnesota Fed President Narayana Kocherlakota.

Anyway, I knew most of the pathology documented in this critique of medical research and publication, but it’s somehow shocking nevertheless.  Of course it’s not really news to anyone but the most naive that the drug industry corrupts both the conduct and the reporting of drug research. But it’s amazing how much of the problem is driven by something much more mundane. Publication bias – the fact that publications publish results, not non-results and science is mostly made up of non-results – tests for possible correlations that turned out not to be there. Publication bias is a bad bad thing, but then of course it gets made much worse because academics need publications and go hunting them. Anyway the article is about Professor John Ioannidis – which in Greek I would have thought would be something like Ioanis Ioannidis:

In poring over medical journals, he was struck by how many findings of all types were refuted by later findings. Of course, medical-science “never minds” are hardly secret. And they sometimes make headlines, as when in recent years large studies or growing consensuses of researchers concluded that mammograms, colonoscopies, and PSA tests are far less useful cancer-detection tools than we had been told; or when widely prescribed antidepressants such as Prozac, Zoloft, and Paxil were revealed to be no more effective than a placebo for most cases of depression; or when we learned that staying out of the sun entirely can actually increase cancer risks; or when we were told that the advice to drink lots of water during intense exercise was potentially fatal; or when, last April, we were informed that taking fish oil, exercising, and doing puzzles doesn’t really help fend off Alzheimer’s disease, as long claimed. Peer-reviewed studies have come to opposite conclusions on whether using cell phones can cause brain cancer, whether sleeping more than eight hours a night is healthful or dangerous, whether taking aspirin every day is more likely to save your life or cut it short, and whether routine angioplasty works better than pills to unclog heart arteries.

But beyond the headlines, Ioannidis was shocked at the range and reach of the reversals he was seeing in everyday medical research. “Randomized controlled trials,” which compare how one group responds to a treatment against how an identical group fares without the treatment, had long been considered nearly unshakable evidence, but they, too, ended up being wrong some of the time. . . . This array suggested a bigger, underlying dysfunction, and Ioannidis thought he knew what it was. “The studies were biased,” he says. “Sometimes they were overtly biased. Sometimes it was difficult to see the bias, but it was there.” . . . Perhaps only a minority of researchers were succumbing to this bias, but their distorted findings were having an outsize effect on published research. To get funding and tenured positions, and often merely to stay afloat, researchers have to get their work published in well-regarded journals, where rejection rates can climb above 90 percent.  . . . (Continued)

Japan.

(HT The Melbourne Urbanist)

What is more interesting however is the fact it looks like…a Phillips curve. This is kind of astounding. You could pick up a vintage late 60s macro textbook and it’d be struggling to explain the situation that was unfolding then, but the problems in contemporary Japan (and increasingly the US)? There’s not much in the past 40 years of macro that is going to help in a way the old edifice could not- though the standards of the debate in the US shows there’s alot than can inhibit.

Yes, folks it does at least according to the paper below. Which is pretty good news, because cultural diversity does or can do some other bad things – like undermine social solidarity and trust. Like the resource curse, I suspect cultural diversity can be pretty good all round in the presence of good institutions.

In the economic development literature, cultural diversity (for example, ethnolinguistic fractionalization) has been shown to have a negative impact on economic outcomes in many underdeveloped countries. We hypothesize that the impact of diversity on economic performance depends on the quality of a country’s institutions. Under bad institutions diversity leads to conflict and expropriation, while under good institutions diversity leads to economic progress. A culturally diverse society or interaction among different cultures encourages exchange of, and competition between ideas and different world views. Under good institutions, this amalgamation of ideas and views leads to greater entrepreneurial initiatives. We show that higher levels of cultural diversity increase the rate of entrepreneurship in the presence of good institutions using evidence from the United States.

One word would be OK too – Tragedy. HT Lord Turner (again).