In an article that will bring succour to hard-pressed press officers everywhere, Zoe Williams has declared:

“Straight talking is one thing, but when you’re straight repeating work that has already been done, but sloppily, with less sophistication, drawing egregious conclusions, isn’t that a waste of time?”

Of course, she’s talking about policy advisers, not journalists, but exactly the same lesson applies. Any short-term investigation into a complex topic without spending a significant amount of time with the literature and the people who spend their lives digging into the subject will necessarily be superficial and has a high likelihood of coming out with conclusions only loosely related to the evidence to hand.

This is a not unreasonable summary of much journalism on complex topics, including, for example, the energy sector, the one with which I have the most familiarity. I distinctly recall a conversation with a very senior broadcast journalist in which he outlined the methodology by which he constructed his pieces: “I’ll spend about a day quickly reading everything I can about the subject, by the end of which I’ll be sufficiently expert on it to ask questions and come to conclusions I think the viewers will like. By the next day, I’ll have forgot all about it.”

No. It is impossible to become an expert in a day, but this is what journalism relies on: short-term investigations somehow translating into copy which is accurate and informative. This is not to say that journalists don’t get it right – in fact, they do so frequently, which does attest to many of them being at least passably clever – but that criticisms of policy advisers for facile investigations are somewhat hypocritical. Both the media and advisers play a role in shaping policy, and both have a responsibility to make their recommendations with as much rigour as possible. Neither side, right now, can justifiably criticise the other.

The Paradox of Walden

July 17, 2012

Yesterday, watching Paul Kingsnorth and Tim Worstall spar on Twitter over the price of milk, I was struck by two notions. Firstly, it’s fun to watch people who are wrong for different reasons argue. Secondly, the reasons for their disagreement are so fundamental that such a debate is pointless; there’s insufficient common ground for any kind of resolution to be reached.

Tim is a neoliberal, while Paul fancies himself as some kind of neo-Thoreau. Tim describes neoliberalism using the following:

“[Neoliberalism] does rather assume that individuals maximise, to the best of their ability and knowledge, their utility. But as any fule kno, utility and profit are not the same thing. Utility leaves room for feeling better about contributing to the care of others for example, something that profit doesn’t.”

This is actually an astonishingly weak claim; all it’s saying is that individuals aim to achieve their goals, whatever they may be, and however short-term they are. I can maximise my utility by buying either a full-fat meaty burrito this lunchtime, or a healthy snack consisting entirely of fruit, depending on my preferences and objectives. As such, it’s so tautological as to be almost entirely uninteresting: claiming that ‘people aim to achieve their aims’ is not going to set the intellectual world on fire.

The interesting claim is the second half of neoliberalism: ‘and markets are frequently the best way of enabling people to maximise their utility’. Tim might contrast this with an alternative, which is getting the Government to decide how best you maximise your utility. Certainly, it seems clear that you have a better understanding of your preferences than a far away civil servant in Whitehall, and that being able to decide which product or service that will be better at meeting your needs can be a preference in itself.

However, there is a problem with this approach, and it relates to the idea of untradeable goods. In deference to Paul’s position, let us consider this in the context of Thoreau’s Walden, accounted one of the greatest American novels and a forbear of modern environmentalism. Walden is a pond near Concord in Massachusetts by which Thoreau spent two years of his life in an effort to develop his understanding, intellect and spirituality through the tenets of the contemporary philosophy of transcendentalism.

Transcendentalism holds that society and its institutions corrupts the purity of Man, and that a true community can only be derived from self-reliant and independent individuals. In Walden, Thoreau goes a little beyond this to discuss the role of nature and wilderness in the introspection necessary to cultivate the spiritually self-reliant individual.

The self-reliant man creates the goods he needs to maximise his utility himself, and his utility is maximised because he created them himself. The utility provided by these goods is therefore not wholly intrinsic, but rather their extrinsic quality of being untraded.

It is this value – that a good being untraded provides maximum utility – that presents a problem for neoliberalism. If a good has utility because it is untraded, then this form of utility cannot be maximised by a preference expressed in a market. Thoreau expresses the price of the components of his hut at Walden in dollars, in order to demonstrate how cheaply it is possible to live a fulfilling life, but the actual cost of the hut should include the labour he spent creating it. If Thoreau were to buy such a hut on the open market, it would have a value, but because the utility of the hut to Thoreau is given by it being his own creation, the two are incommensurable. The paradox is that the market value of the hut is simultaneously zero and infinite: zero, because it is not offered for sale, and infinite, because no amount of money would persuade Thoreau to part with it.

This value presents a problem to neoliberalism because any dispute over a good to which some ascribe utility as a result of its non-traded status must necessarily be solved by politics. That is to say, when some members of a society ascribe value to a good as a result of it not participating in a market, the resolution of a dispute over its use can only be carried out within an agreed political framework, as the alternative is violence. If trade or negotiation is impossible, then the only way of resolving a problem is through force, whether in person or via the Government. Therefore, the Government must have a role to play in determining how we maximise our utility if such disputes cannot be resolved within a community. Moreover, if you ascribe value on the basis of goods being non-traded, it is preferable to have Government resolve disputes than leave it to the market.

It is worth noting that the wisdom of ascribing value as a result of a good’s non-traded status is not considered, I merely observe than there are people who do so. Paul’s attribution of non-tradeable extrinsic value to small-scale ‘uneconomic’ dairy farmers is something about which Tim will never be able to persuade him. I therefore suggest that both gentlemen resolve this issue in an appropriate fashion, with duelling pistols at dawn.

Chris presents us with a question: what are politicians for? And this, although it may not be obvious, is in fact a very naughty question. We know that Chris knows this is a naughty question because he cites the person I spent yesterday’s post complaining about, Alasdair MacIntyre.

To MacIntyre, everything has a purpose or telos (from Aristotle) in line with a community’s ends. This means each person has a telos too, a purpose which is defined by their membership of that community, and can be understood as the role they play within it. As a result, other members of that community can justly condemn and punish someone for failing to fulfil their role within that community.

What Chris is doing in asking for the purpose of politicians is subtle: it’s to ask you to consider how society should judge its politicians as a whole, rather than as individuals making individual judgements about particular politicians. He wants us to consider the telos of politicians as a class, rather than a given politician in particular. In doing so, you’re thinking like MacIntyre, and less like one of those despicable liberals.

I can’t help but wonder whether Chris is trying out matchstick theory for himself…

Shadows of the Future

July 11, 2012

During the brief spike of intellectual interest in the Blue Labour movement a few years back, I was somewhat baffled by the inability of most commentators to understand where it came from and what it was really about. I have been reminded of this today by a comment from Jonathan Freedland on identity, which I shall reproduce below and explain its importance.

Firstly, I want to cover some ground on what the likes of Maurice Glasman were intending to bring onto the political agenda. As Keynes nearly said, ‘Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct philosopher’ and in this case the philosopher is Alasdair MacIntyre.

MacIntyre is credited with reviving the Aristotelian understanding of virtue ethics, perhaps best understood as the notion that the ethical life consists in achieving excellence in a range of virtues, rather than simply acting correctly in a given situation. He is directly cited by Glasman, and has the privilege of not being defunct yet; improvements in communication technology apparently hastening the pace of intellectual slavery.

His position is complex, and I will not do it justice in this post – you can find a useful summary here. Broadly, it can be characterised as a theory of communal virtue. The individual in MacIntyre’s proposed communities is an individual that is subordinate to the agreed practices of that community, which are aimed at the good life. Participation in those practices, and engagement with the traditions from which they arise and are composed, enables the individual to develop the internal excellences associated with them. The goods derived from playing chess, for example, are internal: skill, planning and strategy. They cannot simply be given, but must be achieved through practice. Moreover, they are good for the community, as everyone can learn from the games of chess you play as part of your practice. Examining games played in the past must form part of your practice, and amendments cannot be made to the rules without the consent of the community of chess players, following internal debate from those with sufficient excellence to meaningfully participate.

MacIntyre claims that this is the way our society should function, and it should be clear from this that the identity of an individual would be necessarily bound up with their community as a result. Indeed MacIntyre claims that this is always the case anyway, even we believe ourselves to be separate, because our opinions are formed in large part by the traditions of our community. Attempts to philosophise about morality outwith this context are doomed to failure, which is how MacIntyre describes the rest of moral philosophy post-Enlightenment. Individual moral claims are meaningless outside the context of a community that agrees to aim at a definition of the good life.

This is a philosophy fundamentally opposed to liberalism, as the practices of a community are the bounds of the identity of its members, and the liberty of the individual to define their own forms of practice is not recognised. Members of a community have a claim to condemn others if they do not believe they are fulfilling their role in that community, regardless of that individual’s attempts to be virtuous on their own terms. If all virtues are communal, then failing to exhibit that community’s virtues is a sin, which can be punished.

So, for small communities with particular traditions of practice, you can forget several things. You can forget rights for gays, women, outsiders, and indeed anyone who does not cohere with that community’s idea of the good life. This is not a bad thing on this reading (although MacIntyre somehow tries to claim that it is, seemingly ignoring his own logic), as the community defines individuals, and disruptive ideas about individuals’ freedom to develop themselves are attacks on the whole community. You can forget capitalism too, as trade outwith the community can damage internal practice – if I can sell my products elsewhere and acquire more external goods, then my wellbeing is no longer dependent on my community and I do not need to be subordinate to it. MacIntyre describes this as ‘undermining communal ties’.

I bring this up because of the Freedland comment I mentioned above. It comes in the context of an article in which he claims that attacks on Islam are frequently tantamount to racism, instantly drawing the ire of people who think that the adherents of Islam who are opposed to women’s rights are bad people regardless of what race they are:

“I think much of the trouble with this subject comes in this area. Some believe that in attacking Islam they are simply attacking a set of intellectual beliefs – like criticising, say, fiscal conservatism. The trouble is, what we call religion is for many people not really a matter of adherence to a set of theological ideas. Rather it is about their identity, their tradition, their family, their history. I suspect that for many Muslims, as for many Jews and perhaps for many Christians too, what others call their religion is really better described as their identity.”

Freedland is here affirming his agreement with Glasman and other communalists: attacking an individual whose beliefs are sourced from traditions and a specific community is the same as attacking that community. Attacking a community-based identity is, on this reading, the same as attacking anyone who is part of that community. ‘Racist’ is not the correct word, but given that we do not have an appropriate word (perhaps ‘communalist’), Freedland’s reasoning now becomes understandable.

It is important to put this the context of a wider movement. The likes of the New Economics Foundation, and their promotion of the work of Polanyi on community-based politics fall under the heading of the anti-individualist camp. The attacks from the Church of England on gay marriage bring them under this heading too. The attempts by Tory traditionalists to maintain the House of Lords in its present form also fall under this category too, as they are focused on asserting existing forms of practice and subordination. Labour’s renewed focus on immigration is part of this movement.

All this may yet be the beginning of a new political alignment – or the revival of a very old one – and, as a threat to the freedom of all individuals to cultivate their own virtues in any way they choose, it must be resisted.

We need a price for carbon. Preventing climate change requires that we find a way of minimising our emissions of carbon dioxide and its equivalents, and by far the best way is by assigning a price to those emissions, providing an incentive to people to innovate their way round the difficult process of decarbonising our economy. However, I’ve always been slightly ambivalent about how we do this. There are, broadly speaking, two options:

  • A market for emissions permits, making the right to pollute a tradeable good. This is exemplified by the EU’s Emissions Trading System. This has the advantage of – if the number of permits are set correctly – setting a price for carbon that genuinely reflects the cost of displacing emissions, as markets are excellent at price discovery.
  • A tax on emissions, providing a flat cost (rising under some models) per tonne of CO2 produced. This has the advantage of being set at an appropriate social cost of carbon, reflecting it as an externality rather than the technical difficulties associated with no longer emitting it.

I have always found it difficult to decide which mechanism I prefer. The first allows us a clear way of reducing emissions to zero, while the second appeals to the classical liberal in me. However, the news today that Poland has been claiming emissions permits for coal plant that doesn’t exist has decided me.

An ETS provides an incentive to ‘invent’ sources of emissions that can accrue free permits if free permits are permitted as a result of political pressure to not over-burden sections of the economy. Conversely, a carbon tax provides an incentive to conceal sources of emissions. However, concealing sources of emissions is difficult for one very clear reason: they continually release big clouds of smoke.

Over on Crooked Timber, Bertram, Robin and Gourevitch (BRG) have put up an interesting argument claiming that the commonly understood objective of libertarian ideology, freedom (defined as the absence of coercion) does not necessarily imply that a market economy is the best way of organising society. This is for two reasons.

Firstly, the cornerstone of a market economy, the freedom to enter into contracts of your choosing, is not necessarily freedom-maximising as it is entirely possible to sign away your freedoms when signing a contract. Whether contracts are freedom-maximising is therefore an empirical question not amenable to philosophical analysis, and cannot be used as an ideological plank.

Secondly, an economy in which the price of labour is its value in the marketplace permits coercion within the workplace; changing jobs is not a frictionless process and the cost of changing jobs can be sufficient in particular contexts (e.g. debt, supporting a family) to prevent a worker from selling their labour elsewhere. This permits out-contract coercion on the part of the employer; the example used by BRG is an employer demanding a female worker sleep with him or lose her job.

The above are sufficient to demonstrate that libertarian principles are not necessarily freedom-maximising, which would appear to defeat what is commonly held to be the point of the ideology. However, over on Bleeding Heart Libertarians, Matt Zwolinski thinks differently:

“I think the idea that libertarianism can be understood as fundamentally about freedom, simpliciter, is a mistake. It is an even graver mistake to suppose that libertarianism is committed to the maximization of freedom. […] What makes restrictions of freedom acceptable, and what differentiates the acceptable from the unacceptable infringements of freedom, is a matter of some dispute among libertarians themselves. For neo-Lockean libertarians like Robert Nozick, freedom as a moral category is strictly subordinate to a prior theory of rights – my freedom to sell my kidney is worthy of political protection because it is compatible with my right of self-ownership and violates no one else’s rights; my freedom to swing my fist at your face is not. For consequentialist libertarians, freedom will only be worthy of political protection to the extent that this is compatible with the underlying teleological theory. But no libertarian, as far as I am aware, holds that mere freedom as such is the core value.

If you asked the philosopher in the street what the core value of libertarianism was, I’d be amazed if ‘freedom’ didn’t make up a majority of the responses. However, the above represents a wholesale retreat from the value, into the domains of rights and consequences. In order to spell out what this means, let’s consider the three questions that would be asked by three groups of people when considering how to organise society, the Neo-Lockean Libetarians, the Consequentialist Libertarians, and the liberals (small ‘l’, most definitely):

1) How do we organise society to best protect a given set of rights?

2) How do we organise society to best achieve a given set of goals?

3) How do we organise society to maximise freedom?

Now, the position being advanced by Zwolinksi is that libertarians are asking the first two questions, rather than the third, and that freedom (of various sorts) is frequently found to be the answer to them both. The problem is that in both cases freedom as a value is secondary – if there is a better way of organising society identified in response to those questions, then freedom will be eschewed.

As a result, the root of libertarianism is applied incorrectly: the philosophy is only incidentally related to liberty, and even then only on a empirical basis. If a way is found of protecting property rights that involves surrendering some civil liberties, then it’s possible that some libertarians will support it. If a way is found of maximising prosperity that involves shackling people unable to pay their debts to some kind of work engine, then it’s possible that some libertarians will support it. By allowing the name ‘libertarianism’ to be associated with a creed that supports liberty only as a matter of likelihood, our political discourse is tarnished. I would therefore call on anyone discussing the subject to eschew the term in favour of something more suited. I would opt for Possessionism.

Lord Ashcroft, the gentleman who owns the Conservative Party, has commissioned a poll on the attitudes of people who read newspapers towards those newspapers. He looked to find out whether people were able to identify the political allegiance of their favoured newspaper. The results are fascinating, and I repeat them below:

Here is proof, if proof were needed, that 18% of the Telegraph’s readership are bonkers. However, what’s more interesting is how Lord Ashcroft presents these results.

Lord Ashcroft chooses to interpret this as evidence that newspapers do not lead opinion, but rather follow that of their readers. He claims this on the basis that if they led opinion, more people should recognise that they act as such:

“Part of the genius of successful newspapers is that they understand their readers and give them what they want. They don’t determine their readers’ political outlook, they follow it. […] But the view that the tabloid editor is a kind of Chief Whip, corralling the votes of biddable readers in support of the paper’s chosen victor, is patronising and wrong.”

The claim here is that it is only possible to lead opinion if people recognise what it is that you’re trying to do. This is an interesting claim, because it is the exact opposite of the approach that Thatcher took to leading opinion:

The Attitude Change Process

5.2.1 The traditional model of political communications resembles a military bombardment, in which you bomb your audience into agreeing with you, shouting louder when they appear not to understand.

5.2.2 The model we have suggested in earlier papers is quite different. It is based on the private perception of reality by the individual. The analogy we used was the building of a model of, say, St Paul’s, out of matchsticks. The structure would gradually take shape, but only when most of the matchsticks were in place would the observer suddenly realise the meaning of the model. At that point his attitude would start to change.

5.2.3 Each nugget of information that reaches him (a speech, two seconds on TV of the Grunwick pickets, an article, the report of a new wage claim, the plight of the Boat People) may only be one matchstick. This is why major speeches which take a great deal of effort to prepare are often not particularly cost-effective in communication terms. Their “yield” is usually only one or two matchsticks, in a few column inches. And of course they are discounted to some extent as propaganda, which live events – eg Grunwick, NUPE – are not.

5.2.4 Since in the nature of things we will seldom get everything right, it is a matter of making sure we take two or three steps forward for each step back. Of course there will be occasionally a rapid succession of matchsticks – as, for example, the events of last winter which altered the “mental sets”, at least temporarily, of a significant proportion of the electorate. But whenever we get something wrong, a matchstick will be removed from the model.

5.2.5 The important thing to recognise is that the process requires many matchsticks and lots of time – usually years rather than months.

It was quite clearly the position of the Conservative Party for many years that a drip-drip-drip effect of communication changes attitudes, rather than the marshalling of forces on election day. Tabloids do not need to be overtly political in order to fulfil a role useful to a political agenda – in fact, being overtly political would diminish their value as a source of matchsticks. Given the role Lord Ashcroft has played in developing Conservative strategy it is difficult to believe that he is not aware of this, which would make his claims above rather disingenuous.

Monbiot’s Mistake

July 3, 2012

George Monbiot has today announced his discovery of economics. Well, that’s perhaps not precisely what he meant, but it’s certainly what this means:

“The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.”

You see, there’s no such thing as supply-and-demand as discrete quantities. What there is is ‘demand-at-a-price’ and ‘supply-at-a-price’. Until oil passed the $70/barrel price – and looked to remain there for the long term – there was no additional supply, because there was no demand for oil at $70/barrel. Now the market price is reaching over $100/barrel, there certainly is.

Monbiot is interpreting this to mean that peak oil, which he seems to conceive of as actually running out of the stuff, is not going to happen. However, this isn’t what peak oil actually is. Rather, ‘peak oil’ is a price of oil so high that other commodities fulfilling a similar role become cheaper by comparison. This includes, for example, renewable sources of electricity, hydrogen or electric cars, and non-oil based plastics and lubricants. In economics, these are known as ‘substitute goods’.

The increasing supply of oil from non-traditional sources spurred on by the high oil price is beginning to foster a market in substitute goods. For example, the US firm Metabolix has been in the business of producing plant-based plastics for several years now, and is the brainchild of ex-oil and pharmaceutical types. This stands outwith any Government subsidy programme, although I’m sure significant amounts of subsidy for corn in the US helped. We can expect this to continue as the price of oil rises.

As a result of this, there will not be one ‘peak’ for oil – there will be multiple plateaus and transitions in the price, as one substitute good replaces demand for oil from a particular sector. Eventually, our economy will no longer be dependent on it, as the price rises so high that we substitute it entirely. This will be long before it actually runs out; as has been said, the stone age did not end because we ran out of stones.

The above is not an argument against environmental activism, or leaving everything to the market – far from it. ‘Peak Oil’ will not come soon enough to prevent dangerous climate change, and so activism, both for subsidies for cleantech which bring forward the date at which they’re cheap enough to be a substitute good and against oil production fromthe likes of the tar sands, which increases the cost of gaining permits and so on, makes a difference. This fundamentally economic difference made by environmental activists may yet be the difference between dangerous climate change and climate change we can just about adapt to.

I know I’ve been blathering on about the Adam Smith Institute quite a lot lately (my reasons for doing so aren’t unique, though), but this is particularly egregious:

“Do we need an inquiry on the Libor scandal? No. The boom phase of every boom-bust cycle breeds this sort of excess and dishonesty. It is to be expected. All another banking investigation will conclude is that we need more curbs on the banks. That might cure the symptoms – quite probably by killing the patient – but it will not prevent the disease from coming back.

Instead, we would be much better investigating and curbing the excess and dishonesty of the politicians who created the artificial, unsustainable boom in the first place, and thereby encouraged the banks – and we borrowers too – to make some pretty massive mistakes and do some pretty colourable things.”

Dr Butler, Director of the Institute, is asking us all to ignore the actions taken by bankers over the period during which Barclays, amongst others, were purposely manipulating the LIBOR rate in order to gain pecuniary advantage. Instead, we should blame the politicians who were responsible for the cheap credit that inflated an unsustainable boom. Apparently, bankers are incapable of controlling themselves in the presence of large amounts of money, and so should be left well alone:

“And sure, in the process, a lot of people did a lot of stupid things, and a lot of bad things. It’s pointless, though, for the people who actually hosted the party now to wring their hands, blame the people who got drunk on their easy credit, and say that we need new investigations over what went on, and new restrictions to stop them doing it again. What went on is perfectly obvious. And it was encouraged by government-created disincentives and excess.”

What Dr Butler is saying is that if you host a party and provide alcohol, you’re to blame if people get drunk and vomit all over the upholstery. This provides an interesting, but I’m sure inadvertent, insight into Dr Butler’s social life: at parties hosted by the Adam Smith Institute, the host always pays to clean up when people get too tipsy for their own good.

I regret to say, at my parties people who act like twats get kicked out (although in one notable instance, they did try to kick down the door afterwards). Perhaps I’m insufficiently libertine for the ASI, but I think the problem lies in an interesting inversion of standard left-wing tropes about the poor.

During the London riots, the instinctive response of many Guardian-reading types was to point to the social conditions of the rioters as an explanation for their actions. They were always very careful to say that these conditions did not excuse the riots, but they were something we should bear in mind when considering our policy response. This is in much the same vein as Dr Butler’s plea that the venality of the bankers involved in manipulating LIBOR should be understood in the political context of the times.

Both parties are making the claim that the structure of incentives surrounding the actions of their preferred social group at a given point go at least part-way to, if not justifying, then explaining their actions, and demanding that Government action bear this explanation in mind. Both parties are making the fundamentally patronising and dehumanising claim that their preferred group is incapable of making moral judgements because of a nice big fat pile of cash or a lovely pair of trainers. Both parties are guilty of spouting bollocks.

No-one can claim that someone else is incapable of making moral judgements, because no-one gets exclusive access to morality. Making such a claim is tantamount to saying that only your moral vision is true and pure, and that the vision of other people is in some way fogged by returns on interest-rate derivatives or a flat-screen telly.

In this case, Dr Butler is doing precisely that. Moreover, he is doing so in a way which ignores the facts of the case, and the sheer spivvery of the people involved. The role of Government and the Bank of England in setting LIBOR is tangential – the short-term interest rates which are in the BoE’s gift do have an impact upon on it, but the strongest influence rests with the group of banks whose estimates for the rates other banks will charge them for money go into deriving it. Blaming Government for this is rather like blaming the party host for the people who make ‘cocktails’ using every available kind of alcohol, and are surprised when they’re violently ill. The best way of dealing with such people, of course, is to not invite them back to the party.