The generative commons of generalised social capital

Paul Krugman has an interesting blog post on the extent to which there might be contagion from one area of social capital (or lack thereof) to another. He’s responding to the claim CEOs made to him that they only started arcing up their pay demands when they saw sportspeople doing it. And we can all understand the micro-foundations for rises in superstar sportspeople – local sub-urban live audiences morphing into TV audiences at the city, national or global level.

One of the things that’s gradually been happening over the same period is a kind of leeching away of general social solidarity. The most striking aspect of this is a stat I heard on Radio National’s All in the Mind. Asked of the importance of “being very well off financially”

The latest data from 2013 for entering university students here in the US, 82% say that that is an important life goal. And back in the late ’60s and early ’70s only about 45% said that was an important life goal.

Continue reading

Politics in the Courtroom: Political Ideology and Jury Decision Making

by Shamena Anwar, Patrick Bayer, Randi Hjalmarsson. Publication is available here.

This paper uses data from the Gothenburg District Court in Sweden and a research design that exploits the random assignment of politically appointed jurors (termed naemndemaen) to make three contributions to the literature on jury decision-making: (i) an assessment of whether systematic biases exist in the Swedish naemndemaen system, (ii) causal evidence on the impact of juror political party on verdicts, and (iii) an empirical examination of the role of peer effects in jury decision-making. The results reveal a number of systematic biases: convictions for young defendants and those with distinctly Arabic sounding names increase substantially when they are randomly assigned jurors from the far-right (nationalist) Swedish Democrat party, while convictions in cases with a female victim increase markedly when they are assigned jurors from the far-left (feminist) Vaenster party. The results also indicate the presence of peer effects, with jurors from both the far-left and far-right parties drawing the votes of their more centrist peers towards their positions. Peer effects take the form of both sway effects, where jurors influence the opinions of their closest peers in a way that can impact trial outcomes, and dissent aversion, where jurors switch non-pivotal votes so that the decision is unanimous.

Overton Window – Overton Juggernaut: Part Two


Well folks, when I put “Overton Window – Overton Juggernaut” into Google and looked for an image, this came up naturally enough. If the cap fits . . .

Continued from Part One yesterday.

Over the last few years, there been a sense in which we didn’t like cutting cash rates to bring them too close to zero. Thus amidst fiscal contraction – initially quite strong as the one off aspects of the fiscal stimulus ceased – though tailing off in severity, and then mining investment boom came off, the RBA showed it’s penchant for very gradual easing (never cutting rates by more than 0.25% and then usually stopping for some time before the next rate cut). For the last few years, we’ve witnessed a situation where the government has been committed to gradual fiscal contraction – however successful it’s been at getting it through the parliament – and the Official Family have forecast slack in the economy to remain for a considerable time. In its February 2012 Statement on Monetary Policy the RBA suggested this:

Employment growth is expected to remain fairly subdued in the first half of this year . . . and the unemployment rate is expected to increase modestly. Employment growth is expected to begin to strengthen later in the year [with] the unemployment rate . . . expected to decline modestly over the later part of the forecast period.

By May 2012 output was forecast to average a sub-par 3% through 2012 and then grow to a sub-par 3–3½% in calendar 2013 which would be consistent with unemployment either remaining high or drifting higher. By Feb 2013 this was the RBA story:

Employment growth has remained subdued in recent months, with the unemployment rate drifting gradually higher. . . . Employment is expected to grow only modestly in the near term, broadly in line with the outlook implied by a range of leading indicators. Employment growth is then expected to pick up gradually, but to remain below the pace of population growth over most of the forecast horizon. Accordingly, unemployment is expected to drift gradually higher. Continue reading

Overton Window – Overton Juggernaut: Part One

Overton Window diagram.svgThe Overton Window is a quite well known expression describing the demarcation between political/policy discussion that is and is not acceptable in mainstream discussion. Sometimes what removes your idea from the window is that, whatever policy merit it might have, it would arouse the politically powerful and so ensure that it could only be implemented by democratic politicians with a death wish. This ‘rational’ interpretation of what’s in and outside the window is the one illustrated in most of the illustrations from which I took the one above. But a lot of the demarcation is much more arbitrary than that. It’s often just about what’s getting talked about. <MixedMetaphorAlert>So I have at least one policy horse in the race that’s outside the Overton Window for the classical reason that half a trillion dollars of market capitalisation of banking oligarchs would be seriously inconvenienced by it.</MixedMetaphorAlert> But other policy proposals of mine aren’t like that. They’re typically moderate, low or very low risk with high to very high potential payoffs.

So why aren’t they talked about? Well no reason really. They’re not talked about because they’re not talked about. Well they’re talked about by me. And when I give a presentation on them, people often respond as if they’re positively elevated to hear them. They complement me on how ‘lateral’ they are. Just hearing such ‘out of the box’ thinking makes them feel more innovative. They sometimes say I really should come and give a talk to their whole management group or some subset of it. They sometimes, though much more rarely, make that happen. And then they get back to their in-tray.

When I was working for the Business Council of Australia I once tried to sell independent fiscal policy to Australian Democrat Treasury spokesperson Andrew Murray. After my presentation he was very complimentary and asked if I couldn’t perhaps get anyone really important to publicly endorse the idea. It’s a reasonable question from him, as a person with limited expertise and resources at his command he needed to protect himself against crank proposals or proposals that earned him the ire of the powerful. I suggested he ask Ross Garnaut what he thought of the idea, but in the end Senator Murray just got back to his in-tray. And somehow most of the gatekeepers to the Overton Window don’t see it as their role to widen it in helpful ways.

They all get greater kudos for entertaining more mainstream thoughts, like “how soon should we balance the budget?”, “do we need more workplace flexibility?” or “will the RBA cut cash rates at it’s next meeting?” or that perennial “what’s the outlook for the Hawks next week the economy and how does [insert important person/institution] think it will go?”. Another fave is “how can we get back to the glory days of productivity growth?” (so long as it’s a well understood answer – like “more micro-economic reform” – which will be just like what we already know from the glory days of reform).

Those ‘out of the box’ the ideas I’ve sketched out often arise from a little reframing of an issue. So they’re not answers to well known questions – which very often come in the form of “should we spend more or less money on” or “should we tax this or that activity more?” complete with a quick cross to the interest groups who can be relied upon to slip into the trenches lobbing soundbites back and forth across the terrain of interests and ideologies. Continue reading

Professionalism as tyranny: a liberationist fantasy

‘People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public’ - Adam Smith

Adam Smith put it memorably above. I’ll be forever grateful for my time at the Australian Centre for Social Innovation because it has shown me the generality of that statement. Whether Smith intended it or not, it applies not just to businesspeople of the same trade, but to professions. And it applies not just to the professions whose anti-competitive practices are familiar to us all – lawyers and medical specialists for instance. The behaviour of these high status professions is consistent with the entire sentence from Smith which ends “or some contrivance to drive up prices”.

Some of the lower status professions also try to use their political power to drive up their own wages and, leaving aside the vexed question of the political and economic means by which their campaigns might be waged, I have a lot of sympathy for their desire to be paid and treated better than they are.  I’m talking of teachers and nurses most particularly, but I could be tempted to add academics and various others. However, often in an almost thoroughly well-intentioned way these professions exercise a kind of tyranny in the way they work. They see things in a particular way and, because they are either in charge of or an integral part of the functioning of some important social institution, it gets built around their world view. This is the meaning of the marvellous French expression déformation professionnelle

As I recounted in my speech launching the Centre’s family mentoring programme in Mt Druitt:

These are the words of Mystic (pronounced Mystique). She’s 21 now but was in out of home care since she was 3.

It happened so quickly. Once I turned 18, they sort of kicked me on my arse. They said ‘here’s $750, see you later, thank you’. And I’m just like ‘what the hell?’. A book and $750. That’s for being in care all your life.

Actually it makes you feel like an outsider. It makes you feel non existent on this earth. Like you are an alien. It does. It affects when you go to school too. You’re so used to being called ‘client’ and stuff that you start looking at yourself different to everyone else.

That ladies and gentlemen of the Tropposphere is, to purloin and marvellous expression of William Easterly’s the “cartel of good intentions”, or do-good professionalism as tyranny. Why is this tendency so strong and what could be done about it. Both good questions, but this post is dedicated to a fantasy of how it could be – to a bit of rhetoric. The sentiment might be said to be utopian I guess, but it’s not devoid of seriousness, or even practical import of some kind. Recall that, not only are the professions full of people who have taken them up for real love of the texture of the work, the intrinsic reward for doing it well and for the good they do, but professions are all built implicitly and often explicitly on noble ethical commitments – like the doctor’s to do no harm, the lawyers to uphold the rule of law ahead of the rule of men and the generalised duties of care of the many caring professions.

In any event, when I read Albert Camus’ magnificent lecture accepting the Nobel Prize for Literature for the first time, inside my brain the speech morphed into one in which Camus used the word ‘professional’ wherever he had used the word ‘artist’ and mutatis mutandis for all the associated derivatives of both words. This is what I read: Continue reading

Some stimulating debate on the sensitive subject of gender differences in specific cognitive abilities

On a difficult subject, let’s throw the conversation over to some people who know nothing about it, but who have flawless makeup on and vigorously assert mutually inconsistent propositions. If you think the first 90% of the video is exemplary, wait, there’s more – when the panelist asks whether it might not be time to talk about her again – and return to the subject of how ‘hot’ she is – and then tops it all off with a truly masterful summary of her position.

The original article that sparked the celebrities’ analysis is here.

Neoclassical economics: what is it good for?

Michael Leunig says the tough economic times will plant seeds of change and happiness.I sent the passage below to my friend Alex Coram noting “I like this post from Brad Delong – though you may not”. Alex, you see, has a deeper understanding than me of these things. I was right – he wasn’t that impressed – but for reasons that I also agreed with and might have offered if I were not a thirsty man in a desert.

I think that modern neoclassical economics is in fine shape, as long as it is understood as the ideological and substantive legitimating doctrine of the political theory of possessive individualism. As long as we have relatively self-interested liberal individuals who have relatively strong beliefs that things are theirs, the competitive market in equilibrium is an absolutely wonderful mechanism for achieving truly extraordinary degree of societal coordination and productivity. We need to understand that. We need to value that. And that is what neoclassical economics does, and does well.

Of course, there are all the caveats to Arrow-Debreu-Mackenzie:

  1. The market must be in equilibrium.
  2. The market must be competitive.
  3. The goods traded must be excludable.
  4. The goods traded must be non-rival.
  5. The quality of goods traded and of effort delivered must be known, or at least bonded, for adverse selection and moral hazard are poison.
  6. Externalities must be corrected by successful Pigovian taxes or successful Coaseian carving of property rights at the joints.
  7. People must be able to accurately calculate their own interests.
  8. People must not be sadistic–the market does not work well if participating agents are either the envious or the spiteful.
  9. The distribution of wealth must correspond to the societal consensus of need and desert.
  10. The structure of debt and credit must be sound, or if it is not sound we need a central bank or a social-credit agency to make it sound and so make Say’s Law true in practice even though we have no reason to believe Say’s Law is true in theory.

An adequate undergraduate economics major will spend due time not just on the excellences of the competitive market equilibrium, but on these 10 modes of market failure, and in so doing become, effectively, a history and moral philosophy major as well.

A first-rate undergraduate economic major will also spend due time on government failure and bureaucratic failure, and thus reach the very economic conclusion that there are substantial trade-offs, and we must pick our poison among inadequate and imperfect alternatives, even in institution design.

In any event Alex disagreed in terms that I completely agree with as below: Continue reading

A film and a couple of poems in the lead-up to Anzac day

Regular readers will know of my enthusiasm for the recent movie adaptation of Vera Brittain’s Testament of Youth about the disaster that was WWI and how it blighted the lives of a generation. It’s opening in Australia today – read my review on the link above and go and see it if you can.

A month or so ago I was in the bookshop of the NSW State Library and flicked through a marvellous fat book of war poetry – in Penguin’s new very cheap collection of books in old original Penguin covers – in this case the beigy-puce colour which seems to have been set aside for war literature. In it I read a remarkable poem. But before setting it out, I also read – I think later on on the net – a poem by Rupert Brooke: he of “If I should die think only this of me, that there is some corner of a foreign field that is forever England”.

Here is the poem “Peace“.

Now, God be thanked who has matched us with his hour,
      And caught our youth, and wakened us from sleeping!
With hand made sure, clear eye, and sharpened power,
      To turn, as swimmers into cleanness leaping,
Glad from a world grown old and cold and weary;
      Leave the sick hearts that honor could not move,
And half-men, and their dirty songs and dreary,
      And all the little emptiness of love!
Oh! we, who have known shame, we have found release there,
      Where there’s no ill, no grief, but sleep has mending,
            Naught broken save this body, lost but breath;
Nothing to shake the laughing heart’s long peace there,
      But only agony, and that has ending;
            And the worst friend and enemy is but Death.

Brooke is suggesting that the crucible of war might make essences visible to our jaded ordinary selves otherwise tangled up in the mundane surface appearances of everyday life. The poem I read in the Penguin anthology contains the very same idea as Brooke’s – that there’s a surface reality and then a deeper one beneath it. But their treatment of this ‘reality exposed by war’ theme is diametrically opposed. In “To A Conscript of 1940″ the poet and WWI veteran Herbert Read suggests that reality lying beneath the surface is altogether different. His message is not so dissimilar to that of Vera Brittain. That the worthiness of pre-war aspirations were a mirage, not just a trap, but a trap for those of good heart but without their wits about them – the wits that Vera Brittain slowly come to through experience.

A soldier passed me in the freshly fallen snow,
His footsteps muffled, his face unearthly grey:
And my heart gave a sudden leap
As I gazed on a ghost of five-and-twenty years ago.

I shouted Halt! and my voice had the old accustom’d ring
And he obeyed it as it was obeyed
In the shrouded days when I too was one

Into the unknown. He turned towards me and I said:
`I am one of those who went before you
Five-and-twenty years ago: one of the many who never returned,
Of the many who returned and yet were dead.

We went where you are going, into the rain and the mud:
We fought as you will fight
With death and darkness and despair;
We gave what you will give-our brains and our blood.

We think we gave in vain. The world was not renewed.
There was hope in the homestead and anger in the streets,
But the old world was restored and we returned
To the dreary field and workshop, and the immemorial feud

Of rich and poor. Our victory was our defeat.
Power was retained where power had been misused
And youth was left to sweep away
The ashes that the fires had strewn beneath our feet.

But one thing we learned: there is no glory in the dead
Until the soldier wears a badge of tarnish’d braid;
There are heroes who have heard the rally and have seen
The glitter of garland round their head.

Theirs is the hollow victory. They are deceived.
But you my brother and my ghost, if you can go
Knowing that there is no reward, no certain use
In all your sacrifice, then honour is reprieved.

To fight without hope is to fight with grace,
The self reconstructed, the false heart repaired.’
Then I turned with a smile, and he answered my salute
As he stood against the fretted hedge, which was like white lace.

In fact Testimony of Youth’s Australian release coincides with the centenary of another event. Already the feted poet of the British War effort, Rupert Brooke died on April 23, 1915. In sad contradistinction to the ardour of his poetry, he never saw a shot fired in anger, dying of sepsis from an infected mosquito bite on a French ship, moored at Skyros, a Greek island in the Ionian sea a good way off from the looming battle for the Dardanelles.

And just as I mentioned John Maynard Keynes in the thick of things in the previous post about the film, the contrast between these two poems puts me in mind of something that Keynes said that stuck with me the moment I read it. Writing to a friend in 1943 – back at the Treasury as he had been in WWI while Vera Brittain’s friends and brother were being blown to pieces – he wrote this to a colleague:

Here I am back again in the Treasury like a recurring decimal – but with one great difference. In 1918 most people’s only idea was to get back to pre-1914. No-one today feels like that about 1939. That will make an enormous difference when we get down to it.

And so it did. WWI, a four year catastrophe on a hitherto unimaginable scale killing 17 million people or whatever it was wasn’t enough to make people really want to try hard to avoid the problems of the past. It turned out that it required a lot more than that. It required that, followed by the desperation of depression and then another world war of a far larger magnitude to get people to really want to get things right for a new generation.

And that’s the situation we’re in all over again. Deep in the grip of VerySeriousPersononomics, with a banking system that, having destroyed the prosperity of a generation, snaffled itself a couple of trillion dollars to pay its uberlords for their continuing fine work at the helm and is now reformed in a sufficiently mild way that it will happen again once the memories fade. I keep thinking of W. H. Auden lamenting that ”low dishonest decade” that had just steered his own world back into world war in Sept 1939.

Our ABC: some great Radio National listening

Scales of JusticeI drove for the best part of 11 hours over the last few days giving a Do Lecture (would you believe?) which was fun. In any event I listened to some seriously great radio. Inside the drug court I was riveted by three 50 minute docos on the NSW Drug Court. It really is a tragedy that our media overlords have decided that this innovation is ‘soft’ on crime compared with the traditional system. I think it’s much better understood as simply breaking down the interface between prison and out of prison in a more thoughtful way than the traditional system does. The traditional system exercises various sentencing and post-sentencing discretions. All the NSW Drug Court does is design a system of discretion and resources so that the incentives in the prison system actually work in the short term – where we know from research (and commonsense) that stimulus-response mechanisms work much more effectively. The NSW Drug Court operates by suspending the sentences of prisoners and bringing them into a regime where their progress and their liberty is reassessed every week in a court hearing before a judge. This is combined with some counselling resources and drug tests three times weekly. They must attend all appointments on time, and they must self-declare all breaches of their conditions in their weekly court hearing. When they acquire 14 ‘sanctions’ or recorded failures to meet these conditions (and with their chaotic lives they often they acquire several in a single week) they are sent back to prison detox unit for 14 days and so the process goes on until they either graduate to stages two and three which involve progressively less intense supervision after which they graduate altogether. The alternative throughout is that they simply lose their place in the program and complete their prison sentence. As you can see, it’s hardly ‘soft’. Just a sensible adaptation of the prison system and its resources to the challenge which the radio programs show you is an immense one, of rebuilding the life of a person who’s leant on drugs to get them through their life for often at least one, and frequently two or more decades, while their life has fallen further and further apart, while what semblance there was of order in their lives has been thoroughly white-anted, whose whole identity and social network is built on their life on drugs and outside the law. So it’s pretty much out of the fire of prison and into the frying pan of a Skinner box of active operant conditioning. It still struck me how legally based the program still was. I have no problem with the legal architecture. A court hearing once a week might make a lot of sense, but it seemed to me the program, as good as it seemed to be was still crying out for more peer support mechanisms such as those we build in TACSI, in addition to – and probably in replacement of some – of the professional support. The three programs were made over 14 months and take you inside the process and into the lives of four or five people who go through the process. If you don’t have three hours listen to one of the programs. (This is an order from Troppo Headquarters - your internet address has been logged). I found them gripping. You’ll love and despair at some of the characters. The programs, in order are here, here and here. The vagabond Fascinating story of an eccentric Melbourne man who set himself up as The Vagabond, (presumably) Australia’s first ‘embedded’ journalist reporting from the front-line of various institutions of Melbourne that would have been, without him, out of sight out of mind. Here’s the link. Peter Sculthorpe I’m not much of a fan of modern ‘serious’ music and so have not listened to Peter Sculthorpe.  Indeed, after listening to him being interviewed and loving doing so, I’m curious to listen to some of his music which I will, though I don’t have any strong expectation that I’ll even like it. But the moment you hear his voice you can hear that he’s a certain kind of older person. Centred, thoughtful, humble, insightful about his life and the world around him. I love listening to such people. His music wafts beautifully mostly in the background. Here’s the link.   Note: All these programs other than the last are on a new program called Earshot which seems to simply scoop up all sorts of docos on just the kinds of subjects that interest me. It also seems to have absorbed the ABC’s religious program Encounter, which I’ve always liked, though some of the programs I listened to on my drive were pretty disappointing. One on Volunteer Tourism took an awfully long time to get to the point of what was wrong with it beyond vague generalities and the second program in three on Faith, reason and the three Abrahamic religions – on Islam which let radical Islamic spokespeople off way too lightly IMO.  They all claimed to be non-violent and I presume they were, but the scene was set with references to Australian Muslims demonstrating with signs calling for the death of those who ridicule the prophet. The Muslims in the program were not even asked to say what our attitude or policy should be to such conduct or required to confront it as a problem. The episode on Christianity interviewed some very interesting people – like poet Christian Wyman. It offered a reasonable alternative view to schoolboy atheism, but having set up the dichotomy between atheism and belief drifted into a comfortable “we’re among Christians here” mood offering the alternative view without going to the trouble of offering anything that would have any chance of at least slightly unsettling the schoolboy atheists they’d framed the program around (many of whom are readers of this site).

Postscript: the audio of the audio.