I’ve been having to go further and further in the world to get anyone to listen to me. But in any event, I enjoyed this breakfast radio interview in Regina Saskatchewan.

I’ve often thought that in politics, the signature of honesty is not lack of dishonesty – an impossibility in party politics – but a certain discomfort with the the lies you have to tell. I’m giving Joe the benefit of the doubt on this one. And good on you Penny for your dignity in the midst of indignity.

EVEN as the contrast between left and right fades in mainstream politics, politicians continue ideological warfare like lions eat red meat. But somehow left-leaning politicians have become vegetarians. And they’re being eaten alive by the carnivores of the species.

Deep in the psyche of the electorate, the right is dad and the left is mum. Seriously! The electorate instinctively feels that the right is better with money while the left is better at ”caring” things such as health and education. The left’s desperation to avoid the right’s stereotype of them as feckless spendthrifts sees them continually hamstrung in articulating their case. Seeking to appease our economic anxieties they buy into the right’s way of framing the issues. In the name of managing the news cycle they give up more and more political and ideological ground.

Thus, for instance, to allay electoral fears about rising debt, US President Barack Obama suggested that, since American families and businesses were tightening their belts, the government should do the same. This is nonsense on stilts. By the very logic of his stimulus (and Bush’s cash handouts before him), the whole point of deficit spending was to reverse or counterbalance a temporary lack of private spending. As Paul Krugman argues, one can forgive Obama for compromising on the policy, but not on the truth; not, that is, for casually adopting his opponents’ framing of the issues that gainsaid the whole point of the stimulus in the first place.

Australia’s economic circumstances are different. Partly because our stimulus worked so well and also because of the surging resource sector, our central bank hasn’t needed to cut its cash rate to near zero. So it hasn’t run out of conventional monetary ammunition like the US Fed. So unwinding our fiscal stimulus makes sense.

Yet our left-leaning politicians can’t take credit for their greatest achievement because they’re forever thrusting their little vegetarian heads into the lion’s jaws of their opponents’ framing of the issues.

Recall how initially the government couldn’t even bring itself to mention the word ”deficit”? The real damage wasn’t how silly this made it look but how in being so defensive it hamstrung its explanation of what it was doing and why.

And when the opposition and the Murdoch press mounted a campaign against the wastefulness of the inevitable snafus in stimulus projects, it needed to stand and fight: not just because it had to defend its greatest achievement, but also because this was its issue. It should have said, ”Yes, the necessary haste meant there’d be some mistakes in more than 20,000 projects, but they were minimal, especially compared with keeping more than 100,000 people employed. That’s not just good for them. It’s good for the budget. They’re off the dole and paying tax so we got thousands of school halls for a song. Come to one near you to see what we’ve built together and hear us debate the opposition who criticised us for building it.”

And as some opposition politicians continue to laugh to themselves and journalists, the government was so consumed by its economic inferiority complex that it was suckered into foolish bravado. On her first day in office, Prime Minister Julia Gillard turned a budget forecast into an ironclad promise to return to surplus by 2012-13, immediately rendering her government a hostage to fortune.

The less you stand and fight, the more ground you lose. And the mindset in which one makes progressively riskier and more desperate assertions of one’s own economic bona fides by promising a surplus come what may is one in which the deficits funding the fiscal stimulus become something shameful, rather than the government’s crowning achievement.

ALP state governments followed a similar path of populist fiscal rectitude – to their doom. Clutching their AAA ratings, ALP governments mortgaged their economic future and their cities’ amenity by starving them of infrastructure investment. Ask former premiers Keneally, Brumby, and Bligh how those AAA ratings turned out.

And so to the budget. It really brought home the bacon. ”The deficit years of the global recession are behind us. The surplus years are here.” Makes you wonder why we ever ran deficits. And what happens if there’s another GFC?

In fact, the very night before the budget, Australians were being polled on just that. Just 25 per cent said they’d trust the ALP if there were another GFC, down from 31 per cent just in August. For the government that could reasonably lay claim to being the world champion at steering its people through the last GFC, how extraordinary, how sad that it’s come to this.

Postscript: the podcast of the column - on James McLoghlin last Sunday night.

For this I got charged $866.25 and that was for my personal return. There’s also the company . . .  In any event, I’m after a new accountant. I don’t want or need anything fancy. Someone who is reasonably diligent and preferably someone who has some ideas from time to time about structuring a small business. If they come from Melbourne that’s well and good, but it’s by no means essential – we have post and email these days, and the person who does the books is in Queensland.

If you’ve got an accountant who’s Just Great, please let me know either in comments or by email on n g r u e n  AT g m a i l DOT c o m

I’ve thought and talked and written about the deep discomfort that ebbs and flows in me with my work. Well, not my work as such, but the work that I do. The industry I work in. The impact we have on lives, as lawyers.

Conflict is normal, and sometimes the people in conflict need help to resolve their disputes. This is what lawyers are primarily engaged in. Dispute prevention and dispute resolution. So our primary purpose is good and honourable. I’m just not always sure that our system and our work meets that standard.

A good friend has asked me a few times now if my discomfort is guilt. I don’t think it is. I think it’s deeper than guilt. After all, guilt can be sorted with an apology. “sorry about that. I made a mistake”. I think my discomfort creeps dangerously close to shame. Shame is a dark shadow that can overtake so much of ourselves. All of us have it lurking somewhere. …

I met with some colleagues recently for coffee. We chatted about lots of stuff. Family. Friends. Fun. Work. Then this comment, like an electric shock, threw me off my path and back into the shadow of my lawyer shame. “I like the research. I like the structured arguments. But you know the bit where we make out the other person to be something they’re not so our client gets what they want. I don’t like that”.

Am I just a “liar liar” who doesn’t even know it?

I was speechless as my mind yelled “Are you for real? Is that the game we’re playing?”. I felt a bit like I was in suspended animation, unable to do or say anything. And with that one comment, all my lawyer shame was back.

Is that the game I’m playing? Is informing someone of the factors that are influential and persuasive, and advising them to present those and minimise and work on their weaker factors, is that as dishonest as that other comment felt. Have I been completely duped by this industry? Am I just a “liar liar” who doesn’t even know it?

And then this “Nice people can’t be barristers, because they just can’t do their job properly”. Another speechless moment. Really? REALLY? Some of my most open and wholehearted conversations have been with my barrister friends. I believe they are nice people and are completely equipped to do their job properly.

So, in discomfort I sit. Once again. It’s dark here in the shadow of shame.

Speaking for myself, I sometimes have analogous feelings about being a lawyer, although I wouldn’t quite label them as “shame”. In my professional practice as a lawyer before coming to CDU as a legal academic, I assiduously avoided practising in the areas of criminal and family law. There were several reasons for that personal policy.

Family law especially in my observation is an area where both parties more often that not are out to exact retribution on each other, sometimes at any cost including the truth. I can certainly understand how people reach that stage of mutual bitterness and recrimination, but I don’t want to spend my working life coping with people in such a state of mind. I know there are others who are better equipped temperamentally to do so.

Victims and their families in criminal matters often report having been as traumatised by their experience with the adversarial legal system as by the original crime.

The reason for my aversion to criminal law practice is slightly different. I worked for a short time as a probation and parole officer for juvenile offenders after my graduation in law. I fairly quickly noticed that I didn’t have all that much sympathy for many of my young clients. I could intellectually recognise that many of them had experienced trauma and disadvantage that made their behaviour at least understandable. However my emotional response was that most of them basically deserved the fate the courts had meted out to them, and in quite a few cases should have been more harshly sentenced in my view (even taking into account criminology research about recidivism and the effects of imprisonment on first offenders).

I didn’t think that was a productive mindset to have in dealing with young offenders, and my conviction was later reinforced when my own immediate family experienced a particularly nasty crime that continues to echo in our lives. I simply would not be able consistently to apply the level of coolness and objectivity that proper legal representation requires. I had no problem achieving that in the areas of public law and commercial litigation where I mostly practised.

The other main reason for my aversion to practising both in family and criminal law was that I was aware that representing a party in those areas very commonly required aggressive cross-examination of the other side. Victims and their families in criminal matters often report having been as traumatised by their experience with the adversarial legal system as by the original crime. There’s no way of completely insulating victims (or alleged victims) from such experiences, because the presumption of innocence and a defendant’s right to a fair trial requires a reasonably extensive ability to test and challenge adverse evidence.

However I remain to be convinced that justice usually requires the sort of nasty, aggressive cross-examination that one often sees in criminal matters, especially though not exclusively from defence counsel. It’s not quite shame, but I’m certainly not proud to be a member of a profession which continues to permit and even aggressively defend the continuation of such practices with fairly minimal constraint except where children or other “vulnerable” witnessses are involved.

Is a witness whose evidence is exposed by cross-examination as containing inconsistencies more worthy of being believed than a glib, intelligent, well-rehearsed liar?

It’s not even clearly demonstrable that such techniques assist in getting to the truth, or that either judges or juries are very good at detecting the truth when they hear it in any event. Is a witness whose evidence is exposed by cross-examination as containing inconsistencies more worthy of being believed than a glib, intelligent, well-rehearsed liar? Is someone temperamentally able to withstand the pressure of aggressive cross-examination more credible than someone who can’t? As Barbara Tversky and George Fisher argue:

Bias creeps into memory without our knowledge, without our awareness. While confidence and accuracy are generally correlated, when misleading information is given, witness confidence is often higher for the incorrect information than for the correct information. This leads many to question the competence of the average person to determine credibility issues. Juries are the fact-finders, and credibility issues are to be determined by juries. The issue then arises whether juries are equipped to make these determinations. Expert testimony may not be helpful. Indeed, since the very act of forming a memory creates distortion, how can anyone uncover the “truth” behind a person’s statements? Perhaps it is the terrible truth that in many cases we are simply not capable of determining what happened, yet are duty-bound to so determine. Maybe this is why we cling to the sanctity of the jury and the secrecy of jury findings:

We can put such questions before the jury entirely without fear of embarrassment, because the way the jury resolves the questions and, in all likelihood, the soundness of its answers will remain forever hidden. Perhaps the allure of the black box as a means toward apparent certainty in an uncertain world has tempted us to entrust the jury with more and harder questions than it has the power to answer.

The courts’ reliance on witnesses is built into the common-law judicial system, a reliance that is placed in check by the opposing counsel’s right to cross-examination—an important component of the adversarial legal process—and the law’s trust of the jury’s common sense. The fixation on witnesses reflects the weight given to personal testimony. As shown by recent studies, this weight must be balanced by an awareness that it is not necessary for a witness to lie or be coaxed by prosecutorial error to inaccurately state the facts—the mere fault of being human results in distorted memory and inaccurate testimony.

I’m not arguing that either jury trials or the adversarial system should be abolished. However, given the well-documented limitations on the ability of that system to detect truth reliably, surely there is a persuasive argument for greater limitations on the ability of counsel to cross-examine witnesses aggressively and thereby inflict surplus trauma on already traumatised people. Maybe the “shame” label is justified if we as a profession fail constructively to address such issues in light of the findings of modern psychology (including the research of Jonathan Haidt about how humans reach moral judgments).

Berg draws on Jonathan Haidt‘s moral foundations research. Haidt argues that moral judgments are largely intuitive and rest on six foundations – care/harm, fairness/cheating, liberty/oppression, loyalty/betrayal, authority/subversion and sanctity/degradation.

Haidt and his colleagues have found that progressives (liberals) rely almost entirely on the first three foundations when making moral judgments. In contrast, conservatives rely on all six.

In many ways libertarians are like progressives. "We found that libertarians look more like liberals than conservatives on most measures of personality" Haidt wrote in his recent book, The Righteous Mind: Why Good People are Divided by Politics and Religion. However:

Where they diverge from liberals most sharply is on two measures: the Care foundation, where they score very low (even lower than conservatives), and on some new questions we added about economic liberty, where they score extremely high (a little higher than conservatives, a lot higher than liberals).

So if progressives are wrong about conservatives, could they be right about libertarians? In a recent paper, a group of researchers including Haidt reported that libertarians reject the morality of altruism "as well as all other moralities based on ideas of obligation to other people, groups, traditions, and authorities."

Interestingly, the research suggested libertarians may be less satisfied with their lives than either progressives or conservatives. The researchers reported that "libertarians may be less happy in part because they care less about others and (most likely) bond less with others, particularly close others." Libertarians seem to rely less on emotion and more on abstract reasoning.

Given their lack of interest in conservative values, why do American libertarians consistently favour the Republican party? According to Haidt:

People with libertarian ideals have generally supported the Republican Party since the 1930s because libertarians and Republicans have a common enemy: the liberal welfare society that they believe is destroying America’s liberty (for libertarians) and moral fiber (for social conservatives).

There is always potential for tension between conservatives and libertarians. As I argued in a 2008 article for Policy magazine – ‘Defusing the American Right‘ – the alliance comes under stress when conservatives enlarge the size and scope of government in order to pursue their values. The wars in Iraq and Afghanistan and the war on drugs were areas of tension under the Bush administration.

But perhaps not all libertarians lack concern for people who are poor and marginalised. Recently a number of libertarian thinkers have gathered together at the Bleeding Heart Libertarians blog. Some of them are even talking about social justice.

Other than the car – I don’t know what’s wrong with taxis – this seems OK to me. Indeed if the story is to be believed, it’s only for six months after he resigns – to handle correspondence etc (one needs a driver to handle correspondence for obvious reasons).

Anyway, though the reporting was neutral enough there’s a poll on whether this is OK or not. And of course they don’t just want you to vote ‘yes’ or ‘no’. They want you to run your own little story on A Current Affair. With a yawning and very dreary excluded middle, one gets this choice:

Is Mike Rann entitled to the extra perks?

• Yes, he served the state well
• No, this is outrageous

And of 2815 votes, 86.47% said it was outrageous. I’m generally down on perks – like outrageously generous superannuation or free business class travel for life, but these seem to me to be some of the least outrageous perks I’ve come across.

Johns also implies that advocates of social justice and equality are opposed to democracy. As he writes in the Australian: "In a democracy, achieving a just distribution of society’s wealth requires permission to take money from some to distribute to others. Often, those others do not agree to hand over the money." In his essays and articles Johns misconstrues social justice and egalitarianism as well as the relationship of these ideals to democracy.

People fight for equality when they feel they are being bullied or dominated, writes psychologist Jonathan Haidt. Haidt argues that social justice movements not only urge compassion for the poor and disadvantaged, they also "call for people to come together to fight the oppression of bullying domineering elites". On this view social justice is not fundamentally about an equal distribution of wealth or income, it’s about freedom.

Philosopher Iris Marion Young makes the same point in her book Justice and the Politics of Difference. Commenting on signs and banners bearing the slogan "Peace, Jobs and Justice" at an American political rally she asks:

What does "justice" mean in this slogan? In this context, as in many other political contexts today, I suggest that social justice means the elimination of institutionalized domination and oppression. Any aspect of social organization and practice relevant to domination and oppression is in principle subject to evaluation by ideals of justice (p 15).

As Young explains in Inclusion and Democracy, the ideals underlying this idea of social justice are self-development and self-determination. Young’s idea of self-development is similar to Amartya Sen’s idea of capability. For Sen what matters is a person’s opportunity to live the kinds of life they have reason to value Freedom plays a central role in the capability approach. In his book The Idea of Justice he writes:

… we have reason to be interested not only in the various things we succeed in doing, but also in the freedoms that we actually have to choose between different kinds of lives. The freedom to choose our lives can make a significant contribution to our well-being, but going beyond the perspective of well-being, the freedom itself may be seen as important (p 18).

While material resources are an important means to self-development they are not the only thing that matters. For example, philosopher Elizabeth Anderson raises the prospect of ‘contract feudalism’ where an employer is able to dictate how employees behave outside the workplace. She argues for "the right to conduct one’s life outside of work independently of one’s employer’s arbitrary will."

Another example is marginalization. Young writes about the way dependence on the state can limit a person’s freedom:

Being a dependent in our society implies being legitimately subject to the often arbitrary and invasive authority of social service providers and other public and private administrators, who exercise power over the conditions of their lives. In meeting needs of the marginalized, often with the aid of social scientific disciplines, welfare agencies also construct the needs themselves. Medical and social service professionals know what is good for those they serve, and the maginals and dependents themselves do not have the right to claim to know what is good for them (p 54).

When people have no other way to secure an income they are vulnerable to coercion. Single parents, people with disabilities and Indigenous people in remote communities can lose control of their lives when the state ties income support to compliance with mutual obligations.

Violence and the threat of violence can also limit a person’s freedom. As long as social institutions and norms tacitly condone acts of violence and intimidation against groups like women, immigrants or homosexuals, these groups lack freedom. As Young points out: "Violence is a form of injustice that a distributive understanding of justice seems ill equipped to capture."

For Young, oppression is the opposite of self-determination — the second ideal of social justice: "Persons live within structures of domination if other persons or groups can determine without reciprocation the conditions of their action, either directly or by virtue of the structural consequences of their actions."

Young defines social justice "as the institutional conditions for promoting self-development and self-determination of a society’s members." Politically this is a much broader agenda than the redistribution of income. The pursuit of justice is understood not just as adherence to rules and norms established by the traditions and institutions we have today but as a search for better rules and norms. As Anderson writes in her essay What is the Point of Equality:

Positively, egalitarians seek a social order in which persons stand in relations of equality. They seek to live together in a democratic community, as opposed to a hierarchical one. Democracy is here understood as collective self-determination by means of open discussion among equals, in accordance with rules acceptable to all.

There will always be disagreements about what social justice means in practice. But if there is a common thread to demands made in the name of social justice it’s about the pursuit of freedom rather than a more mathematically equal distribution of income.

Ken argues that there is something that doesn’t seem quite fair about Nick D’Arcy’s “strategic” decision to voluntarily declare himself bankrupt and so avoid paying the court order for compensation (and costs) made in favour of Simon Cowley in relation to injuries that Cowley suffered when D’Arcy assaulted him in 2008.  He suggests that perhaps the liberal forgiveness of debts which occurs under Australian law should be amended somewhat where the bankruptcy is commenced voluntarily to avoid this sort of peverse incentive to file for bankruptcy.

I disagree.  But I find it more interesting the way that this narrative suggests that D’Arcy has acted in an immoral way.  Just what is our morality of debt?

Nick D’Arcy is clearly an unpopular young man.  Most of the coverage of his decision to file for bankruptcy and the consideration of the AOC as to whether this should disqualify him from the Olympic team has allowed considerable room for comment from people who consider that bankruptcy allows him to avoid this debt, most notably Cowley’s lawyer.  See for example here, here and here.  Avoidance in this context has a particular moral weight.

High profile cases don’t necessarily make good law.  The fact that D’Arcy is a medical student from a wealthy family doesn’t help the way that the whole thing looks.  And I am constantly surprised by just how many people there are who are willing to dishonestly exploit the letter of the law to their own financial advantage.

However, as I said in the comments of Ken’s post, there are plenty of cases where so-called ‘strategic bankruptcy’ is in fact an entirely reasonable and sympathetic situation.  While bankruptcy has lost some of its stigma over time, the vast majority will avoid it if they can.  In my experience in practice doing a lot of insolvency work, I can think of only one client I advised who acted like the decision to become bankrupt was an easy one.

Even more tellingly, the main thing that differentiates voluntary bankruptcy from involuntary bankruptcy in this discussion is the feeling that the debtor is ‘getting away with it’.  That sentiment is an undeniably penal and retributive idea that a debtor should literally pay, even if they can’t afford it.  Accompanying that thought is that because he may be wealthy in the future or because his family is wealthy, then they should take on the moral obligation to pay this debt, even though they have no legal obligation to do so.

Bankruptcy law attaches no moral distinctions in processing of debts.  In most cases, the law conforms to the principle of pari passu, the idea that creditors shall share in the recovered assets of a bankrupt equally in proportion to their debt.  It also makes almost no distinctions as to which debts shall be released on bankruptcy.  The old provisions which privileged tax debts in some ways have now largely been removed.

Nonetheless, most people have a sense of morality about debts which are “more payable” than others.  Acting for particular creditors, I have many times experienced debtors who continue to pay a particular debt after their legal obligation to do so has been removed.  Sometimes this is for commercial reasons – the supplier needs to be maintained, so their old debt is still honoured.  However, sometimes this is purely for moral reasons.  Primarily this happens with debts owed to family members, friends, or people who we feel “deserve” to be paid.  I have seen it with people who continue to pay schools, trusted tradespeople or health professionals or other people that we can put a face to.  In contrast, though I often have clients who assert that paying their debts is a moral issue, I have never seen anyone continue voluntarily to pay a bank, finance company or the taxation office as a moral issue.  I doubt that anyone would have the same questions about D’Arcy’s escape from his obligations if he were escaping a debt owed to a bank after a failed business venture.

Expanding personal credit (particularly credit cards) has chased bankruptcy into the middle class.  Business related financial failure is largely destigmatised.  However, there is still a considerable stigma attached to personal financial failure for a lot of people.  And for all that people say that people are free and clear after discharge, this is simply not true for most people.  A credit rating trashed by bankruptcy is a lasting and significant hurdle for most people trying to get back on their feet.

Here’s a picture of the moon and the sun juxtaposed. They cycle between being the same size in our heavens and being a bit bigger or smaller than each other. It’s spooky.  Just the right size to deliver a total eclipse, or an annular one, depending on how they are feeling at the time. A proof of the existence of God if ever there was one. (Now for an explanation of cystic fibrosis).

To make this picture, the Full Moon on May 6 was photographed with the same camera and telescope used to image the Sun (with a dense solar filter!) on the following day. Of course, on May 6 the Moon was at perigee, the closest point to Earth in its eliptical orbit, making it the largest Full Moon of 2012. Two weeks later, on May 20, the Moon will be near apogee, the most distant point in its orbit, so by then it will be nearly at its smallest apparent size. It will also be a dark New Moon on that date. And for some the New Moon will be surprisingly easy to compare to the Sun, because on May 20 the first solar eclipse of 2012 will be visible from much of Asia, the Pacific, and North America. Along a path 240 to 300 kilometers wide, the eclipse will be annular. Near apogee the smaller silhouetted Moon will fit just inside the bright solar disk.

Here’s a picture of the moon and the sun juxtaposed. They cycle between being the same size in our heavens and being a bit bigger or smaller than each other. It’s spooky.  Just the right size to deliver a total eclipse, or an annular one, depending on how they are feeling at the time. A proof of the existence of God if ever there was one. (Now for an explanation of cystic fibrosis).

• “Blog reading selections” at the top of the sidebar links to various human-curated “best of” features, both blog and twitter-based.
• A bit further down the sidebar is “Missing Link on Twitter”, Don Arthur’s continually updated “best of” service.  Someone else on Twitter recently rated it as the best source for locating excellent blog writing.
• Blogroll (now updated) – also in sidebar.
• Bottom of front page – RSS feeds to what I regard as the 12 consistently best Australian blogs.  They cover politics, law, economics and culture/arts.

Swimmer Simon Cowley

There’s been lots of media coverage of the washup of swimmer Nick D’Arcy’s bashing of fellow swimmer Simon Cowley in a bar some 4 years ago.  Understandably the victim is not willing to allow the perpetrator to escape scot-free by declaring himself bankrupt to avoid paying more than $370,000 in damages and costs awarded in the NSW District Court last year.

Moreover, D’Arcy is off to the London Olympics despite Cowley’s equally understandable view that he should never have been selected and that a secret deal was done, probably due to D’Arcy’s threats of legal action against Swimming Australia and AOC if his earlier banning was renewed on the basis that his cunning bankruptcy move rendered him in breach of SA’s code of conduct.  Cowley is in no doubt that D’Arcy is in breach and unfit to represent Australia:

Under Swimming Australia’s behavioural guidelines, competitors are required to be ”ethical, considerate, fair and honest”; refrain from any form of abuse, harassment or victimisation of others; and ”be a positive role model”.

Cowley said the organisation appeared to have overlooked those requirements when it recommended to the Australian Olympic Committee that D’Arcy be included in the Australian team for London.

However it appears that the AOC’s legal advice was rather different:

D’Arcy declared himself bankrupt, and AOC boss John Coates revealed legal action was sought then to see if he deserved his place on the team.

“(Chef de Mission) Nic Green told me he wanted to get legal advice to see if bankruptcy constituted misconduct, and meant bringing the team into public disrepute,” Coates said.

“It was not. …

It needs to be kept in mind that D’Arcy has already served a significant period of disqualification from the sport for his assault on Cowley.  Despite the fact that he has evinced little or no contrition for his thuggery, D’Arcy has served his time for the substantive assault.  It’s reasonable to suggest that the double jeopardy principle should be regarded as just as applicable in the sporting sphere as in criminal law.  Accordingly, D’Arcy could only be properly re-suspended if entering voluntary bankruptcy could be treated in itself as a further instance of misconduct.  It appears that the AOC’s legal advice was that it couldn’t be so regarded, and so D’Arcy had to be selected if his trial performances warranted it.  They did and so he was selected.

However, I wonder whether the legal conclusion is necessarily so clear-cut.  Certainly voluntary bankruptcy in itself could not be viewed as misconduct, but mightn’t it be relevant to examine all the surrounding circumstances? If a person enters voluntary bankruptcy as a result of a truly dire financial situation from which there is no hope of recovery then that is one thing, but if they make a calculated strategic decision to enter bankruptcy merely to avoid paying a judgment debt might it not be reasonable to take a different view?

Should he be permitted cynically to take advantage of his current short-term “poverty” to avoid paying Cowley?

I confess I haven’t examined the case law (if any) on the point but it’s a reasonable question on first principles.  D’Arcy is a 24 year old medical student whose father is a wealthy surgeon.  No doubt his current income and asset position is meagre, but equally without doubt he’ll be very well off in the fairly near future and well able to pay Cowley his justly awarded damages.  Should he be permitted cynically to take advantage of his current short-term “poverty” to avoid paying Cowley?  It appears that his Trustee in Bankruptcy thinks this is pefectly OK:

SWIMMER Nick D’Arcy made numerous attempts to reach an arrangement over debts totalling $800,000 before declaring himself bankrupt, his trustee said yesterday.

The trustee, Robert Whitton, said D’Arcy petitioned his own bankruptcy when it became apparent Simon Cowley intended to force it.

D’Arcy was dumped from the 2008 Beijing Olympic team after an altercation with Cowley in a Sydney nightclub.

He was given a 14-month, 12-day jail sentence fully suspended after conviction for inflicting grievous bodily harm.

Cowley, who was left with a shattered cheekbone, was awarded civil damages of $180,000 this year.

With costs and interest he is now owed about $380,0000.

D’Arcy, a 24-year-old medical student, filed for bankruptcy on November 30, listing his father and Cowley as creditors.

Mr Whitton said yesterday that there was no doubt about the veracity of the debt owed D’Arcy’s father Justin, a Sunshine Coast surgeon.

“His parents funded his defence,” Mr Whitton said.

“It (the loan) was properly documented over time.”

Mr Whitton said it was very unlikely that he would withhold D’Arcy’s passport, preventing him from contesting the 2012 London Olympics.

He said a successful Games could bring D’Arcy financial reward which could then allow payment to creditors.

D’Arcy would be required to make payments to creditors after he reached an after-tax income of $47,000.

“That wasn’t an offer, that was an insult.”

But was D’Arcy’s “offer” a serious one or just another cynical manoeuvre in a game to avoid payment orchestrated by the lawyers paid for by his surgeon dad?  Cowley’s lawyer is in no doubt about the answer:

Mr Cowley’s lawyer Sam Macedone told Channel Nine on Tuesday night that bankruptcy was “just a way of walking away from this whole mess and this debt and this judgment that he owes”.

“I would have thought that he would have had the courage at least to try to speak to Simon and try and negotiate something with him, whatever it was,” he said.

Mr Macedone, who did not respond to questions from the Daily, told AAP yesterday that an offer of $25,000 had been made.

“Out of $380,000, he offered $25,000,” Mr Macedone said.

“That wasn’t an offer, that was an insult.”

Perhaps it’s time to revisit and reform the rules for voluntary bankruptcy.  As academics Ian Ramsay and Cameron Sim observed in a recent paper, voluntary bankruptcy is becoming an increasing middle class phenomenon:

Between 1990 and 2008 there was a 261% increase in the number of personal insolvencies in Australia. We suggest one important aspect of this increase is that
Australian personal insolvency has become an increasingly middle class phenomenon.

If even a significant proportion of these are cynical strategies like D’Arcy’s gambit, maybe the rules need to be changed. Certainly another very recent case involving a son of a WA politician suggests this sort of thing is not an isolated aberration.

[T]he liberal approach prioritises the concept of a ‘fresh start’ for debtors.

Ramsay and Sim observe that Australia’s bankruptcy laws are at the liberal end of the international spectrum:

The function of personal insolvency laws depends upon what their ultimate goal should be. Australia has been placed in the liberal category of bankruptcy jurisdictions. These jurisdictions are seen as offering levels of debt forgiveness with both a high degree of certainty and relative haste. This is in contrast to many other jurisdictions, which have been categorised as taking either a conservative or moderate approach to debt forgiveness, under which there is an absence of debt forgiveness provisions, or the offer of debt forgiveness exists but is tempered by great uncertainty as to whether it will be granted. …

[T]he liberal approach prioritises the concept of a ‘fresh start’ for debtors. Accordant with this observation, Australian courts have viewed the intention of Australia’s bankruptcy laws as serving a fair distribution of bankrupt’s assets among creditors, as well as allowing bankrupt debtors to start afresh. Consequently, personal insolvency laws reflect attempted reconciliation of two competing goals: a fresh start for debtors and protection of the interests of creditors (together with equality of distribution for creditors).

While I have no major problem with bankrupts being released after 3 years with a “clean slate”  where they’ve been bankrupted on a creditor’s petition (the currrent legal regime), perhaps we should have a different regime when dealing with (strategic) voluntary bankruptcies.  I suggest that in that situation a discharged voluntary bankrupt should be required to continue contributing one-third of his/her income and assets acquired at any time within (say) 10 years after discharge. That would still allow a debtor to make a “fresh start” but prevent lawyered-up middle class debtors from taking advantage of short-term impecuniosity to avoid their creditors (who in D’Arcy’s case consisted only of his own parents and his victim Cowley).

Readers as geriatric as me will probably remember British comedian Benny Hill’s famous spoof song Ernie (He drove the fastest milk cart in the west). It topped the UK Singles Chart in 1971, reaching the Christmas number one spot, and also reached no. 1 in Australia. But you probably didn’t know (or at least I certainly didn’t) that there was a very similar real life case in western New South Wales in the early 1970s, which was recounted in the latest edition of Bar News, the journal of the NSW Bar Association. Below are the reasons for decision of Cross J on appeal after a wronged husband was sentenced to one month’s imprisonment by a magistrate. Hat-tip Law Geek Down Under:

It has been said that revenge is a kind of wild justice. And, though the courts may not approve the infliction of deliberate injury, still one’s heart goes out in sympathy to all those who are moved to violence in defence of their family. Circumstances, which understandably give rise to a degree of passion may properly be regarded as mitigating factors on the question of sentence for violent conduct.

In the present case Mr Laundess had been happily married for seven years and has four small sons. The evidence reveals that about a week before 18th February, 1973 his wife informed him that she wanted him to leave the home in Grenfell as she no longer loved him. The surprised Mr Laundess asked if there was another man. No, lied the wife, she had merely fallen out of love with him. In an understandably bewildered state Mr Laundess was shortly afterwards informed by a friend that a local milkman named Keys had been carrying on with his wife. Mr Laundess confronted Keys, who admitted it. Mr Laundess then confronted his wife with his information, whereupon she confessed her past misconduct with the milkman, said she was madly in love with the milkman, could not live without him, etc. etc. She told Mr Laundess that he would have to leave home, and he subsequently found his bags had been packed for him. He was understandably confused. Of course, he could have ordered his wife out of the house; but there were four small sons in need of a mother’s care. Considerations such as these, added to the understandable bewilderment and confusion, led him to accept his wife’s direction and he moved out.

He felt, of course, some sense of injustice. He approached Keys and complained of the milkman’s intrusion into his marriage. He pointed out the possible disadvantage to the children, and he asked Keys if Keys was really going to take on all the responsibilities that the wife was asking him, Mr Laundess, to abandon. Keys replied that he would give the situation a week’s trial and let Mr Laundess know!

This statement by Keys that he would take the wife for a week, apparently on appro., no doubt deepened the husband’s gloom. He felt that he – at least he – was getting the wrong end of the stick. He brooded over a few drinks with his brother on the night of 17th February. Thoughts turned to resolve and resolution to action; and about 3am on 18th February, Mr Laundess and his brother arrived at the matrimonial home.

They entered the house, and Mr Laundess entered the bedroom. He found the wife and the milkman both naked in bed together. In Mr Laundess’s own words, ‘I lifted him up and got into him’. When he finished getting into the milkman, Mr Laundess told him to get out. The milkman raised a minor objection to appearing in the Grenfell streets at night totally unclad. The husband, becoming irritated at the thought of the milkman’s sense of propriety being offended by these sartorial or thermometric considerations, happened to notice a rifle on the top of the wardrobe, which he remembered was loaded, perhaps not inappropriately, with rat-shot. He grabbed the rifle and asked the milkman to leave. The milkman had by then donned some clothes and commenced to move off.

Perhaps by another piece of wild justice … the pellets hit the wife’s legs and not the milkman’s.

All this time, the wife — as some wives, tend to do in these situations — had remained noticeably audible. She had put on a dressing gown and now decided to leave with the milkman. At this stage the husband, becoming even more irritated at the slow rate of the milkman’s departure, at his wife’s wailings and at her pursuit of the milkman, decided to fire some rat-shot at or near the milkman’s feet to speed him on his way. At that very moment, however, the wife had run up near the milkman; and perhaps by another piece of wild justice (and partly due to the husband’s inexperience at shooting from the hip) the pellets hit the wife’s legs and not the milkman’s. This development did not cause the wife to fall silent. The husband’s brother then took the rifle from him. The milkman helped the wife into the milk truck which was parked outside and, getting his priorities into an order that may not have instinctively occurred to all persons, drove first to the police station to demand that the husband be charged and only then to the hospital, where the devoted surgical staff removed eight pellets from the skin of the wife’s lower legs. Since that night the wife’s mother has visited her in Griffith and I am informed that there is some possibility that the wife with the children may move to the mother’s home at Katoomba; and there was a suggestion that the milkman’s ardour has cooled.

It is in the light of that background that it falls to this court to determine an appropriate sentence on the two charges preferred against the husband — one, a summary charge of assault on the milkman and the second, an indictable charge of ‘Malicious’ wounding of the wife. The learned magistrate felt that an appropriate penalty for the husband assaulting the milkman was one month’s imprisonment with hard labour.

The affair between the wife and the milkman had been carried on for some time before the husband knew of it. The husband was acting as father, husband and provider while the milkman was clandestinely the wife’s lover. When spoken to by the husband the milkman replied in terms which were on any analysis contemptuous of the husband and indeed contemptuous of the wife. It appears to me that if a man elects to intrude into another’s marriage, putting the welfare of the children as well as that marriage at peril, he must expect a hiding from the husband. On any realistic basis this milkman appeared to have asked for what he got. In my opinion the circumstances surrounding this assault on the milkman are such as to reduce its seriousness below the level which attracts a prison sentence, even one to the rising of the court.

TO THE PRISONER: In lieu of the learned magistrate’s penalty you are fined the sum of twenty cents, which you must pay to the Clerk of Petty Sessions, Cowra, within seven days; otherwise imprisonment with hard labour for twenty-four hours.

As to the shooting it must be said that rat-shot from a .22 rifle from some distance away is scarcely lethal. There was clearly no intention to do serious injury to any person nor was any serious injury done. The incident occurred at a time when your mind was cursed by domestic affliction. And it must also be remembered that it was the milkman and your wife who created this explosive situation which you in an understandable excitement merely detonated. You do not present any threat to society; you are conceded by the police to be an honest and hard worker; and you have already spent fourteen days in Bathurst Gaol as the result of the magistrate’s order. Compassion blends with responsibility in inducing me to defer passing sentence on you entering into a recognisance yourself in the sum of $400 to be of good behaviour, for a period of two years and to be liable to be called up at any time for sentence for any breach committed within that period. That recognizance may be taken before a magistrate.

As to the appeal, I formally say that the appeal is dismissed, the learned magistrate’s conviction and findings are confirmed, but in lieu of the learned magistrate’s penalty of one months’s [sic] imprisonment, you are fined the sum of twenty cents, in default imprisonment with hard labour for one day.

One of the things that the last few years have shown I think is that rank cynicism plays much worse for the left than the right of centre. Cynicism isn’t such a problem for a right of centre government because one of the reasons you’d vote for one is that you think the world is a pretty average kind of place and that any grand ambitions to make it better are naive or – well an even higher form of cynicism dressed up as altruism, or perhaps a bit of both. Just writing it down makes it rather compelling actually ;)

In any event, when Howard wheels out a carbon pricing system having said he wouldn’t, when he ‘clears the decks’ of potential policy losers before an election, gets rid of petrol excise indexing for instance, it works for him. I remember thinking that ‘clearing the decks’ of an easily exploited policy promise – to price carbon – may not have been good policy, but it was probably good politics. How wrong I was. Julia has made one mistake after another of that kind. The way she shafted Wilkie was simply shabby and seen to be so.

Hawke would have done the same, but would have telegraphed a whole narrative for some time beforehand about how he was wrestling with the moral issue of whether to pursue quixotic policy or shaft Wilkie, and how hard it all was but . . . “Well thanks for your question Alan/Kerry/Maxine/Leigh. It’s been a tough time for me. On the one hand I had an obligation to Alan and I’m not the only person in this country who admires his courage and integrity, and on the other, I realised that it couldn’t be got through the Parliament. So I had to make a tough call. Some people will disagree with me. I don’t blame Andrew for being mad at me. If I were him I’d be mad too, but as PM I have higher responsibilities etc etc”.

Julia’s basic message was “Andrew had outlived his usefulness and so you can find his body somewhere over there.” Likewise the ‘carbon tax’ which is actually more or less what was on the table, even if it came with a community assembly first – carbon pricing with an introductory period of fixed price permits. When challenged about her breaking a promise Julia showed a remarkably ill judged mix of candour and dissembling. She needn’t have admitted it was a carbon tax, but she did need to say that the policy had changed and she needed to justify it in all the circumstances. She did the opposite.

She came out and told us how honest she was being and admitted it was a carbon tax (when neither she nor Rudd, IIRC, had admitted the previous temporary permit system was a carbon tax) and then when she was challenged on breaking her promise not to introduce one said aggressively “look at all the words I used”. Well Julia you’re responsible for all of them and you’ve broken a promise. You had good reason to, so admit it and explain it. Alas that happened weeks later when her minders explained that she’d never actually put the case for breaking the promise, and eventually she did so – when it was way too late.

She did the same over grabbing the leadership. She’d managed to be a loyal deputy and then grabbed the job – which I thought at the time was the right thing to do in all senses. But all she could say was via a cagey euphemism “the government had lost its way”. She failed to challenge the obvious narrative of ambition and treachery. Yet it would have been easy to do – Hawkie or Peter Beattie would have lapped it up. See my proposed words for Hawkie above and remix as appropriate.

First it was David Brooks’ Harold and Erica. Now it’s the Obama campaign’s Julia. Harold, Erica and Julia are all fictitious characters born into a perpetual present. They live and grow old in a world that doesn’t change. As Michael Shear at the New York Times writes:

At age 3, Julia is enrolled in Head Start programs, thanks to Mr. Obama. By 22, she’s covered by her parents’ health care because of Mr. Obama’s health reforms. At 42, she’s getting a small-business loan from the government. When she reaches 67, she’s retired and drawing Social Security benefits.

In Julia’s world, demographic, technological and environmental change are on pause. She doesn’t need to worry about waiting for the new Intel chip to come out before she buys a new laptop. The new chip never comes. And in the same way, the government doesn’t need to worry about the effect of unforeseen new medical technologies on the cost of health care. The policies that work today will work equally well tomorrow.

There’s no ageing population problem. There’s no demographic bulge threatening Social Security or Medicare. The labour market goes on as it does now with undisrupted by technological or trade induced change. And while climate change is a constant source of anxiety, it remains lodged in a future that never comes.

Are Americans in denial about history? And if they are, how would that warp their decision making?

Peter Whiteford, University of New South Wales

There has been at least on fictional treatment of a corporation taking over a country in John Brunner’s wonderful 1968 novel Stand on Zanzibar. It is based in 2010 and the corporation is transparently based on General Electric, and the country based on what would become Benin. Like much science fiction, it tends to tell us a great deal from what change it didn’t anticipate. In particular it didn’t anticipate how corporations (at least in the US) would change, and why the idea of a corporation taking over a country is less plausible than it once was.

It made sense in the 1960s to think of Corporations as great sprawling organisations that could possibly marshall the array of skills involved in running a country. Companies did have wide ranges of businesses and were more relaxed. But attitudes changed in the 1980s – maximizing return on capital meant that companies would shrink down to core products with the greatest returns, and jettisoning or spinning off other projects. In many ways I suspect this had alot to do with the movement from internally fostered management to a floating class of specialists in exploiting the principal agent problem in corporate governance. Shuffling projects between companies and identities meant an apparent increase in return on capital became the basis for bonuses – even though in aggregate there was no improvement.

Nowadays only a few companies still dominated by the shareholdings of a few (like Microsoft, News Ltd or Google) are prepared to fritter away money on unprofitable side projects. Even zaibatsu are less keen to expand the range of what they do now, and the chaebol were forcibly shrunk in the late 90s.

So we end up with a company like Apple, with a handful of very successful products that make a great deal of money it can’t do anything with. It has no other divisions to cross subsidize subsidize, or research to undertake (the company’s success has always been in packaging end products and not developing technology. They either cop the tax when they repatriate the money and pay larger dividends, or they let it sit in a bank account. They certainly wouldn’t pursue something outside their core – unless there was a tax dodge in it.

To be sure, owning a country would free the company from tax obligations were they to incorporate there and pay dividends there. But do they pay them in Apple dollars, get another country to let them use their currency or make sure the country they buy already has an easily currency? Think about what would be needed to support a new currency. They’d either start taxing, issuing debt, or make Apple dollars backable by Apple products – all of which seem foolish and still unlikely to make it a tradable currency (assuming shareholders want to buy things other than consumer electronics). But whom would let them use their currency, and countries that already have hard currencies are likely to be too large.

And of course, if shareholders remain in other countries, they’d be reliant on their resident states continuing to recognise Appledonia as a sovereign state in a way that prevents them taxing those same dividends. Maybe they’d also pay to join the WTO?

Previously I wrote this.

What depresses me is that this is not hard. All it takes is to try seriously to be useful, rather than to follow a procedure. If governments can’t do this kind of thing – or rather bugger this kind of thing up – it is depressing to think of how much more limited their usefulness is than it might otherwise be.

This one reads as a kind of send up of usefulness. Virtually everything it says is a kind of joke. Some of my favourite passages.

Do not take NAPROSYN if you have
an allergy to:
• NAPROSYN or any ingredients
listed at the end of this leaflet . . .

Ask your doctor if you have any
questions why NAPROSYN has
been prescribed for you. [Now there's an idea!]

If you take this medicine after the
expiry date has passed, it may not
work as well.

If you are not sure if you should
start taking NAPROSYN, talk to
your doctor.

Follow all directions given to you by
your doctor or pharmacist carefully.

A donation of 20K seemed in order, but was not forthcoming. And for whatever reason my candidature didn’t proceed any further. (I also opined on a tour of the campus that I thought it would be a pity if they ripped out the only remaining grass covered oval and replaced it with synthetic grass, no matter how much truer it made they hockey balls travel.)

Today I got an invitation to give money to Ormond College where I spent a year. It was cleverly crafted – written to me by someone in my year with a personal note to me. This was my chance to make a difference for the next generation. I could contribute to allowing someone hard of means to attend the College. Well that’s better than contributing to someone easy of means I guess. Anyway it transpired that to qualify, this person who was hard of means had to be someone whose parents had attended Ormond. And yes, they might have been hard of means, but then they might just have been good at minimising their income. I decided to pass.

Perhaps displays of optimism are not such a bad thing, even if they are unwarranted.

In a study that just came out, we (myself, David Johnston at Monash and Gigi Foster at UNSW) found that optimistic expectations are key to making  people happy with their lot in life. People are much less affected by regret than previously thought, nor do they tell themselves things will be bad in the future so that the present will be a pleasant surprise: people systematically over-estimate how rosy the future should be and this is crucial for their well-being.

Our study, of which the working paper version is here and the on-line article is here (for those with access) has the following highlights:

1. In a sample of over 10,000 Australians followed for 9 years (the HILDA), it turns out that people’s expected future health has about 1/6^th the effect on current happiness as their actual current health, with any difference between the health that was expected and that eventuated having very little effect.
2. Future imagined health was more important to Australians over 35 and to women than to men and those under 35, for whom future imagined health was not important for happiness.
3. As a result, we concur with the medical literature that has long argued that hope is important in itself for health, as witnessed by the strong placebo effect. In the medical literature hope has now become the default standard for new medicines in that new medicines have to be better than placebos if they are deemed to be of real use. Our advise is also to err on the side of optimism whenever possible.

Now, to classically trained economists, the fact that hope itself is a consumption good quite apart from realised consumption may be surprising, but in the reality of economic policy the big lesson from this kind of finding has been incorporated long ago: always pretend the economy will keep going strong or will soon improve unless there are really strong indications to the contrary. Hang on to see many an overly optimistic statement in the Federal budget next week …. and rightly so.

For more information on the study, see here.

“[A tax induced increase of 6 percent in alcohol prices] resulted in a reduction of 4.7 percent in injury deaths nationwide.”

ecause consumers reduce alcohol consumption in response to price increases, rising excise taxes on alcohol are associated with reduced levels of alcohol abuse and the related consequences for public health and safety. In The Virtuous Tax: Lifesaving and Crime-Prevention Effects of the 1991 Federal Alcohol-Tax Increase (NBER Working Paper No. 17709), authors Philip Cook and Christine Piette Durrance estimate the effects of a change in the federal tax on alcohol that took place on January 1, 1991. The federal government doubled the tax on beer and raised tax rates on wine and spirits as well, and alcohol prices jumped an average of 6 percent (adjusting for overall inflation) nationwide.

The authors find that this price increase resulted in a reduction of 4.7 percent in injury deaths nationwide during the first year. Both violent and property crime also declined after this increase in the federal tax on alcohol. Violent crime — especially robbery, aggravated assault, and rape — was apparently more sensitive to the level of alcohol consumption within a state than property crime. Among the category of property crimes, burglary and motor vehicle theft rates were most sensitive to a state’s per capita alcohol consumption after the tax increase. The authors’ results demonstrate that the alcohol-price elasticity for several health and safety outcomes is closely related to average alcohol consumption.

This doesn’t make any sense and the government should lean against this wind, putting more effort into such investment during downturns and recouping its equity or tax revenue with less assistance during the upswing.

I don’t know if the OECD suggests this somewhere in its report, but, though it finds it’s a major problem it doesn’t suggest any solutions in the press release to its new report which corroborates the phenomenon over the current downturn in a wide cross-section of countries.

Abstract:

We identify the major public debt overhang episodes in the advanced economies since the early 1800s, characterized by public debt to GDP levels exceeding 90% for at least five years. Consistent with Reinhart and Rogoff (2010) and other more recent research, we find that public debt overhang episodes are associated with growth over one percent lower than during other periods. Perhaps the most striking new finding here is the duration of the average debt overhang episode. Among the 26 episodes we identify, 20 lasted more than a decade. Five of the six shorter episodes were immediately after World Wars I and II. Across all 26 cases, the average duration in years is about 23 years. The long duration belies the view that the correlation is caused mainly by debt buildups during business cycle recessions. The long duration also implies that cumulative shortfall in output from debt overhang is potentially massive. We find that growth effects are significant even in the many episodes where debtor countries were able to secure continual access to capital markets at relatively low real interest rates. That is, growth-reducing effects of high public debt are apparently not transmitted exclusively through high real interest rates.

Drift into Failure, by Sidney Dekker, is one of the most thought-provoking books I’ve read in a while.

“Thought provoking” is usually a shorthand used by buttered-up friends of the author to mean “I agree” or “he/she provided a great blurb for my dust jacket and now I’m returning the favour”.

But in this case, I found that the book provoked a lot of thought on my part. It tied to a lot of other books I’ve read in the past year or so, some of which I’ll name check.

So … what’s it about?

Dekker discusses how complex systems ‘fail’ in unforeseen ways. He characterises some of these failures as ‘drifts’. The system didn’t visibly zoom towards failure; there was no massive perturbation, no onrushing catastrophe, not even dark clouds on the horizon. In a drift-failure, the failure just happens, and only afterwards is there any chance of diagnosing the whys and hows.

Drift essentially crosses two fields of work. The first is reliability / failure studies and the second is complex systems. I’m not very familiar with reliability studies except through a Chinese-whispers version that has been transmitted via software operations literature. I feel that I have a more-than-nodding acquaintance with systems theory through a uni course and my own reading in that area.

To a reader unfamiliar with either body of thought, this book might be a bit difficult. Dekker isn’t really addressing the book to the layperson, it’s really addressed to practitioners reliability/failure field. Dekker’s ultimate hypothesis is that a “Newtonian-Cartesian” approach to failure does not and cannot address failures in complex systems.

If you’re not from the reliability field, Dekker’s writing is a bit like being an atheist at a theological debate. Interesting, but a little hard to follow in parts. But boy does he have lots of points to make.

I respectfully disagree

I don’t think Dekker quite nails his case down. For the rest of the review I will try to explain why. Hang on, because it’s a long, circuitous ride.

Postmodernism

As I said above, Dekker posits that a Newtonian-Cartesian worldview can’t explain or predict failures in complex systems. Of most concern for yours truly is that, in addition to reaching for complex systems theory, he reaches out for postmodernism. I’m not a particular fan of postmodernism — I think that some of its insights can be usefully appropriated into modernist thinking, but its universalist claims are dangerously nigh to total bunkum. I don’t think Dekker needed it.

Dekker uses postmodernism to posit that failure is a negotiated label. A system isn’t “failed” until after a failure, and the very concept of failure is constructed as an agreement between observers and participants of the system. Hence: failure is subjective.

Well, yes. Certainly, failure is, after a fashion, transmitted backwards in time. But many of the systems humans build are purposive. The purpose is known ahead of time, in advance. Even before further negotiation between subjects take place, many failures are instantly recognisable as failures.

Local optimality, global optimality and failure

Dekker chose the “drift” metaphor because a system arrives at failure in small, locally-rational steps. In one case study, he examines Alaska Airlines flight 261 in great detail. In this case study, a series of small relaxations on safety standards eventually lead to a catastrophic system failure (sudden, unpredictable loss of human life).

Dekker asks: when did the system fail?

• Did it fail when the particular acme nuts failed?
• When maintenance was not performed?
• When times between scheduled maintenances were extended?
• When the design was made without accounting for the possibility of the above?

This goes back to the distinction between proximal and ultimate causes, popular amongst both reliability studies practitioners and lawyers. The proximal cause is clearly the acme nuts failing … but in this case, Dekker says, where is the ultimate cause? It’s diffused across the entire system, across a series of locally optimal solutions.

Local and global optimality is a classic human problem. In Daniel Kahneman’s excellent book Thinking, Fast and Slow he metaphorically describes different ‘selves’. One self is a fast, almost subconscious self; an intuitive rationaliser. It excels at locally optimal solutions. A second ‘consciously rational’ self must be aroused purposefully. “Math is hard”, as Barbie says, so let’s go shopping. Hence we almost never actually engage that second self, even in situations where we think we have. Kahneman includes lots of little fiendish self-tests for the reader that abundantly prove his case.

Once you see the distinction between the locally optimal and the globally optimal, cases jump out of the woodwork everywhere you look. It’s funny, because I learnt the concept of local/global optima at university but never really clicked to it before reading Kahneman.

And as with optimality, so too rationality. What is rational locally may transpire to have irrational global consequences. Little agents optimising their corner of a large system can cause failed systems. Part of Dekker’s broader hypothesis is that assigning blame is a bit rich in such circumstances — everyone was just acting according to sensible rules within their own situation. It’s all so complicated, give them a break.

I’m not so sure. Take for example the question: “when was the system in a failed state?”

By itself, that question supposes a binary logic. The system IS in a failed state, OR the system IS NOT in a failed state. Dekker sees what anyone can see as a bit of a nonsense and pushes it downwards to our notion of blame. I prefer to look at it and push it up to a narrow conception of logic.

To explain what I mean, I need to make two diversions.

Diversion I: Fuzzy Logic

Here’s where fuzzy logic pops in (and also where, based on the title of this subsection, I lose both of the readers who got this far without giving up out of boredom).

The core insight of fuzzy logic is that we can think of things as belonging to “fuzzy sets”. In normal logic, sets are cut-and-dried. Remember Venn Diagrams? They all looked like this:

Look at all that sharp delineation! Any “thing” in that diagram indisputably in one of five possible states:

• Blue
• Yellow
• Blue AND Yellow
• Blue OR Yellow
• NEITHER Blue NOR Yellow

Traditionally we ignore that last condition — the neither/nor — because that way we get a neat formula for calculating the possible number of states for any number of exclusive sets or logical variables.

There’s a lot to like about conventional logic. It’s the granite foundations of the field I hold a degree in — Computer Science. Given ANDs, ORs, NOTs and some ones and zeros, one can build essentially infinitely complex systems (I’ll return to this point later on).

But it doesn’t actually describe a heap of common problems in the actual world.

And speaking of heaps — here’s a classic philosophy question: is this a pile of sand?

Well yes. And if I remove a grain? Still yes. In computer science terms I’ve performed an inductive step, it’s now “turtles all the way down”. The pile of sand is always a pile of sand, perhaps until I remove the last grain.

But we know that’s not “true”, in the every day sense. A few grains of sand does not a pile make. And it gets worse, for when does the pile become a dune? And when does the dune become a desert?

Fuzzy logic sidesteps the issue by saying that the pile of sand has a degree to which it is a pile of sand. This is expressed with a “membership function”. To what degree does this pile of sand belong to the set of all piles of sand? Well in this case, I think we can all agree that it’s a pile of sand, so we grant it a high membership and say it’s a member of that set to a degree of 0.9.

When it gets small, we lower its membership degree. A few handfuls of sand might only rate 0.05 in the membership function. And as it grows very large, its membership degree again shrinks to a low number, even as its membership of the set of dunes grows larger.

Hence in Venn diagram terms, fuzzy sets look a bit more like this:

It’s … fuzzy, as you’d expect. Membership in the blue and yellow sets is not a binary proposition, there are degrees of membership.

Diversion II: Phase Space

Why do we care about sets all of a sudden? Because sets are one way to represent systems. More accurately, any given system has many states, and states can be grouped in various ways as sets.

First, let’s look at a very simple system: a switch. It has two possible states, on and off. The system can be described with a graph, like so:

This is a phase space, a space of all possible states of the system. The phase space diagram here is simple. It has one axis — one dimension — because the system only has one controlling variable. It has two states — two coordinates in phase space — because it’s a discrete binary variable. The switch is on or off. That’s it.

Systems of interest are, unsurprisingly, more complex than that.

Suppose now we have a control panel with one dial. It controls a vent which emits cold air. Next to the dial is a temperature gauge. The dials and gauge are wired to a room which you cannot directly observe. Your job is to reach a certain temperature.

A phase space diagram here would have two axes: one for the dial and one for the temperature. You need both axes to fully describe the configuration of a system at any given point in time.

What does that look like? A bit like this (warning, unsexy diagram):

Now suppose you twiddle the dial. You have changed the configuration of the system — you’ve moved through phase space to a new set of coordinates. We draw a line on the diagram to represent that:

After a while, the temperature falls:

Not the most stunning of diagrams, I grant you. But this is broadly how phase diagrams work. The line is implied to be a span of time, the points are particular configurations of the system.

So when is a system in a state of failure?

Dekker says that systems drift and that from inside the system, such drift isn’t visible until the failure occurs. But we still try to back track to discover “causes”, even when it might make no sense to.

Suppose a 2-variable system drifts to failure:

Dekker posits that in the Newtonian-Cartesian paradigm, we aim to trace that line backwards in time to discover who and what failed. But this is insensible, says Dekker, because in fact the causes can be so diffused over the entire system and not individuals or components.

The “Newtonian-Cartesian mindset”

Dekker decries the “Newtonian-Cartesian” mindset of trying to find discrete causes for failure. Instead each step can be sensible in itself, or causes too diffuse to tease out, or insufficient information to work it out.

I don’t think that Dekker really refutes N-C mindset at all. Just because a step was locally, but not globally optimal, doesn’t excuse it. If global reasoning was available, it should be exercised. Causes that are diffuse are still causes. Causes that can’t be detected due to lack of evidence or lack of instruments can still be considered causes (“hidden variables”, in physics parlance).

But Dekker wants to excuse a lot of such cases because, he posits, the Newtonian-Cartesian paradigm is itself broken.

I don’t think he proves his case. Worse still, he handwaves a lot of the rough edges of his argument away. Complex systems are hard to govern, he says. Why are they hard to govern? Because they’re complex. It’s a circular logic.

Ultimately Dekker’s logic relies on the incomplete conception of logic I gave above. In Dekker’s conception, a system is or is not failed. The observable paradoxes of meaning that this generates are then resolved by slapping a “warning: complex system!” tag on it, plus a dose of postmodern voodoo.

What I propose as an alternative is that systems have degrees of failure. Just because, in the every day sense, they have not “failed”, nevertheless within the phase space are fuzzy sets of states that represent all possible failures. And every state in the phase space has some degree of membership in each of those failure states. It might look like this:

(An alternative rendering would be to add the “disaster” membership degree as another axis, but my graphics skills extend only so far).

Going back to Alaska Air Flight 261, when the plane crashed, the aviation safety system was obviously belonged to the “tragedy” failure set to a 1.0 degree. But before the crash, its degree of membership in that set grew steadily as the system drifted towards it.

My formulation does not excuse actors and components in a complex system. They are, where any degree of global insight is possible, still on the hook.

Legalism and Realism

Dekker describes the hunt for a single person or component causing a failure is something he describes as being a “legal view” of things. Which is funny, because lawyers have been grappling with complex systems for thousands of years. They’ve got some tricks up their sleeves.

One debate amongst lawyers is in what role a judge should play. One classic doctrine is “Legalism”, most famously demanded by Sir Owen Dixon during his tenure as Chief Justice of the High Court of Australia:

Close adherence to legal reasoning is the only way to maintain the confidence of all parties in federal conflicts. It may be that the court is thought to be excessively legalistic. I should be sorry to think that it is anything else. There is no safer guide to judicial decisions in great conflict than strict and complete legalism.

Legalism meant that, in considering a case, judges should strive to ignore all considerations but the law. This is, in a strict sense, impossible. The world is too mixed up in the law, the law to mingled with the affairs of the world. Judges are mere humans; a sea of passions with a few stony outcrops of reason. Legalism is, like Newton’s laws stretched to their limits, strictly impossible.

That last argument leads us to Realism, which basically says: judges are biased. Judges make law, in practice. Get used to it.

But the funny thing is that, when we zoom out, which better serves society at large? I would personally argue legalism, imposing as it does much lower uncertainty costs and politicking costs on society at large. And that was Sir Owen’s point. The loosey-goosey “broadness” of Realism turns out, upon closer inspection, to be founded on a narrower view of society than Legalism. The Legalist embraces an important impossibility because it serves a higher good.

My analogy here is that Dekker is poo-pooing the analogical Legalism of the Newtonian-Cartesian world view — that causes can be ultimate derived from computation and analysis — in favour of a kind of Realism. Systems are complex, he says. Get used to it.

But like the Realists, his analysis is too narrow. Even if he is right (and I think he is only half right, as I will go on to say below), his postmodern / complex system view nurses dangerous seeds. Embracing the concept that there is always a cause or a set of causes leads to better systems, even if it isn’t true.

What is a Complex System, anyhow?

Dekker never really makes this clear, perhaps because he lacks the fuzzy logic terminology to point out that it’s a matter of degree.

I suggest that a “complex” system is any system which successfully confounds human understanding. That’s a fuzzy statement already: which human? What counts as confounding? What counts as understanding? But if we accept the fuzzy logic worldview, it’s less of a problem. Systems will belong to the “complex systems” set with a different level of degree.

But I suggest that there is no qualitative change. It’s just that some problems are too big for humans. Some problems are too big for any computational device, as computer science has discovered — some problems cannot be solved at all by a computing device; some can’t be solved before the heat death of the universe.

But suppose availability of sufficiently advanced hypercomputer (or more quaintly, a god). What could it predict? How deep a system? What level of complexity? Newtonian — really Einsteinian — physics breaks down at the limit because of the uncertainty principle. But supposing it could be done, would this universe be predictable?

I think so. And that’s the most complex conceivable system there is — ie, the System of Everything. No qualitative shift has occurred. It’s a matter of (very, very, very large) quantitative differences.

So in fact “complex” systems are a human phenomenon, a label given to things that exceed 1) our ability to observe and 2) our ability to compute.

Epistemological Confusion

Dekker’s contest between the Newtonian-Cartesian vs Complex-Postmodern worldviews
is really akin to the debate of atheism vs agnosticism.

Newtonian-Cartesianism says “this is reality, this is what is objective” — it’s a statement of belief. Postmodernism/Complexitism is “it’s unknowable, it’s constructed between subjects, it can’t realistically be done that way”. That’s a statement of epistemology, about what is knowable.

But these are talking past each other. Reality is, in a sense, both. There’s an objective reality, broadly a Newtonian-Cartesian reality at the humanly experienceable macroscale. And there’s our understanding of that reality. In a sense complexity just means “intractably difficult to compute”. Dekker has confused a statement of fact (“the world is not Newtonian-Cartesian at the macroscale”) with a statement of epistemology (“the world is not truly knowable at a complex scale”).

To me, a mechanistic universe does not preclude complexity, it predicts it. I can only imagine that a non-mechanistic universe would have no emergent phenomena and would resemble mere randomness. A non-mechanistic universe is entropic in an information-theoretic sense. No information arises from it, and therefore any claims of complexity are meaningless in a postmodern sense.

For example, the mechanistic nature of computers (Turing machines) belies the experienced complexity of modern computer systems. Alan Turing wrote a paper to discuss an important mathematical question, and as a side-effect invented one pillar of the modern world. At the basic level Turing’s hypothetical machine is extremely simple: a tape, a tape reader, a pen and some agreed symbols that can be read or written on the tape. Modern computers, at their most basic and fundamental level, still resemble a pastiche of the Turing machine.

Yet from this very modest little well springs a fountain of complexity. Modern software systems are stupendously complex. Failure is their normal condition; trying to exhaustively test every combination of factors is so vast a task that it is laughed out of polite company. Yet we can test the common cases. Better yet, with some deft mathematical footwork we can simply eliminate whole swathes of phase space from consideration. This is the Newtonian-Cartesian paradigm at work, busily mending its own fences.

Should you read this book?

Yes, I think so. But critically. Dekker’s book makes fascinating reading and I greatly enjoyed it. I may have attacked it here, but that’s only because I think he fell short of elucidating and proving his case. A fine book can still be a fine book even if its contents or conclusions are, in one’s own opinion, wrong (cf. Plato’s Republic).