Joris Luyendijk’s new project up at the Guardian is aiming to apply the methods of social anthropology to the financial sector in the City of London. He’s carrying out interviews in pubs and coffee bars with people at all levels and in different roles in financial services industry, to get a proper picture of how the social roles all fit together. So far, he has made at least one major discovery:

• People in the Guardian comments section really, really hate bankers

I know, I was just as surprised. I’ve been doing my own amateur social anthropology exercise too. By which I mean that I’ve got a Twitter account and some spare time, and as a result, have been collecting[1] prime specimens of banker abuse. So far, I’ve gathered that I, personally, have stolen from every single benefits claimant in England, and that Sir Fred Goodwin (crime: got a big pension, managed a bank poorly) is clearly a bigger criminal than Sir Anthony Blunt (crime: betrayed dozens of serving agents to Stalinist Russia). And, of course, during the recent London riots, dozens of variations on “who is the real criminal – the man who smashes a shop window and steals an iPod, or the man who gets paid a bonus?”

Because, at the end of the day, Dr Harold Shipman murdered 52 infirm old women in order to steal money from their wills, but bankers, get bonuses. Who is the real criminal, eh??

It is without any anticipation of popularity or agreement (or even any real hope of not being called an asshole on my own blog, although I must say that would be jolly nice if you were in the mood) that I tell you that I think this is all rather a pack of bollocks.

[click to continue…]

It isn’t a good thing to have contradictory beliefs. Since I’ve notice what appear to be such beliefs in myself recently, I thought I’d share, both because I guess that there are others out there who also have them, and in the hope that Crooked Timber’s community of readers can tell either that I should discard some of them (on grounds of falsity) or that I’m wrong to think them contradictory. So here goes.

Belief 1: As a keen reader of Paul Krugman, Brad DeLong (yes, really), our own John Quiggin and other left-leaning econobloggers, I believe that most Western economies need a stimulus to growth, that austerity will be counterproductive, and that without growth the debt burden will worsen and the jobs crisis will get deeper.

Belief 2: As someone concerned about the environment, I believe that growth, as most people understand it, is unsustainable at anything like recent rates. Sure, more efficient technologies can reduce the environmental impacts of each unit of consumption, but unless we halt or limit growth severely, we’ll continue to do serious damage. There are some possibilities for switching to less damaging technologies or changing consumption patterns away from goods whose production causes serious damage, but the transition times are likely to be long and the environmental crisis is urgent.

Belief 3: Some parts of the world are just too poor to eschew growth. People in those parts of the world need more stuff just to lift them out of absolute poverty. It is morally urgent to lift everyone above the threshold where they can live decent lives. If anyone should get to grow their consumption absolutely, it needs to be those people, not us.

Belief 4: The relative (and sometimes absolute) poverty that some citizens of wealthy countries suffer from is abhorrent, and is inconsistent with the status equality that ought to hold among fellow-citizens of democratic nations. We ought to lift those people out of poverty.

If I were to attempt a reconciliation, I’d say that this suggests zero or negative growth in material consumption for the wealthier countries but a massive programme of wealth redistribution among citizens at something like the current level of national income, coupled with a commitment to channel further technological progress into (a) more free time (and some job sharing) or a shift in the mix of activity towards non-damaging services, like education (b) switching to green technologies (c) assistance to other nations below the poverty threshold. All of those things need mechanisms of course if they’re to happen — and I’m a bit light on those if I’m honest, outside of the obvious tax-and-transfer. What we don’t need is more in the way of “incentives” to already-rich supposed “wealth creators” and the like. What we certainly don’t need is a strategy that purports to assist the worst off in the wealthiest countries by boosting economic activity without regard to the type of activity it is, in the hope that this gives people jobs and, you know, rising tides, trickling down and all that rigmarole. The trouble is that Belief 1, which I instinctively get behind when listening to the austerity-mongers, is basically the same old tune that the right-wing of social democracy has been humming all these years. It is just about the only thing that will fly for the left politically in a time of fear, joblessness and falling living standards, but it seems particularly hard to hold onto if you take Belief 2 seriously.

Via “Kevin Drum”:http://motherjones.com/kevin-drum/2011/09/wisdom-ignoring-crowds, a piece by Ed Yong “which argues”:http://blogs.discovermagazine.com/notrocketscience/2011/09/13/knowledgeable-individuals-protect-the-wisdom-of-crowds/

bq. Whatever it’s called, the principle is the same: a group of people can often arrive at more accurate answers and better decisions than individuals acting alone. There are many examples, from counting beans in a jar, to guessing the weight of an ox, to the Ask The Audience option in Who Wants to be a Millionaire? But all of these examples are somewhat artificial, because they involve decisions that are made in a social vacuum. Indeed, James Surowiecki, author of The Wisdom of Crowds, argued that wise crowds are ones where “people’s opinions aren’t determined by the opinions of those around them.” That rarely happens. From votes in elections, to votes on social media sites, people see what others around them are doing or intend to do. We actively seek out what others are saying, and we have a natural tendency to emulate successful and prominent individuals. So what happens to the wisdom of the crowd when the crowd talks to one another?

bq. … You can insert your own modern case study here, but perhaps this study ends up being less about the wisdom of the crowd than a testament to the value of expertise. Maybe the real trick to exploiting the wisdom of the crowd is to recognise the most knowledgeable individuals within it.

[click to continue…]

Two weeks ago I made a post that was as comprehensively misunderstood, relative to my intent, as anything I have written in quite a while. So let me try again. I meant to assert the following:

1) Sometimes Republicans (conservatives) make loud, radical, extreme ‘philosophical’ claims they don’t really mean. Democrats (liberals), on the other hand, don’t ever really do this.

I was interpreted by some as asserting the following:

2) Invariably, whenever Republicans (conservatives) seem to say something crazy or radical, they don’t mean it. They are always moderates about everything. In fact, they are liberals. We can ignore any appearances to the contrary.

Well, I for sure didn’t mean 2. Crikey.

In general, the way to keep 1 clear of 2 is by applications of ‘some’, and appropriate cognates. (I’m saying that sometimes Republicans/conservatives do something that Democrats/liberals never do, not that Republicans/conservatives never don’t do this thing that Democrats/liberals never do.) It may be that my original post was insufficiently slathered with ‘some’. For present post purposes, if I should ever seem to be saying 2), add ‘some’ until it turns into some variant on 1). On we go. [click to continue…]

… is set out over the fold. I’m confident readers who take a little time to think about it will realise it’s far superior to existing policy, and to any alternative proposed so far.

[click to continue…]

A bunch of standard measures of US economic wellbeing (median household income, real wages for workers with high school education, educational attainment by age 25 and so on) show strong improvement from 1945 to the early 1970s, followed by stagnation or very slow growth thereafter. A variety of arguments, have been put forward to suggest that the standard statistical measures understate improvements in wages, incomes and so on since the 1970s. Some of these arguments are valid (for example household size has fallen), some not (for example, the fact that we now have more of goods that have become relatively cheaper). Regardless of validity, the main reason people believe these arguments is that, for anyone who was around at the time, it seems implausible that our parents’ living standards in the 1970s were comparable to our own today (assuming roughly similar class positions)

This reasoning is invalid for a reason that should be familiar to those on the conservative side of debates over inequality. The measures mentioned above compare snapshots of incomes at different times. But (as conservatives regularly point out) standards of living are determined mainly by lifetime incomes, not by income in any particular year. Given the pattern described above, lifetime income for someone who worked, say, from 1940 to 1985 was well below that for someone in a similar class position who started work in 1970, just when the long increase in real wages was slowing for most and stopping for some. For every year of their working life, the 1970 starter gets a wage (adjusted for age, education and so on) that’s as high as the maximum attained by the 1940 starter after 30 years of steady growth. Unsurprisingly, that translates into a bigger house, and more of most items that require savings, whether or not their price has risen relative to the CPI.

[click to continue…]

Aside from containing a brilliant exposition of how blogospherical “rebuttal” actually works — basically endless posts by halfwits repeating that X (an eminent scholar) is an ignoramus because X has contradicted the received wisdom of a tribe — this post by Dave Graeber at Naked Capitalism has to be one of the most informative and entertaining pieces I’ve read in a long while. What happens when the findings of anthropologists about earlier societies clash with the a priori assumptions of economists about how things _must_ have happened? Well, you can guess. The really interesting stuff is in the anthropological detail, so read the whole thing, as they say, but I’ll just quote Graeber on economics and scientific method:

bq. Murphy argues that the fact that there are no documented cases of barter economies doesn’t matter, because all that is really required is for there to have been some period of history, however brief, where barter was widespread for money to have emerged. This is about the weakest argument one can possibly make. Remember, economists originally predicted all (100%) non-monetary economies would operate through barter. The actual figure of observable cases is 0%. Economists claim to be scientists. Normally, when a scientist’s premises produce such spectacularly non-predictive results, the scientist begins working on a new set of premises. Saying “but can you prove it didn’t happen sometime long long ago where there are no records?” is a classic example of special pleading. In fact, I can’t prove it didn’t. I also can’t prove that money wasn’t introduced by little green men from Mars in a similar unknown period of history.

Denmark goes to the polls tomorrow, Thursday 14th. For those who incline to the view that elections don’t matter, this one may be particularly interesting, since the centre-left group of parties looks very likely to win. This will not only put the current right-wing government out of power, but will marginalize the far-right Danish People’s Party. The DPP has pulled the framework of debate well to the right in recent years on immigration, rights, welfare, because it’s been pivotal to government-making initiatives since the early 2000s. This time, the Social Democrats have managed to focus debate on economic issues:

Thorning-Schmidt has promised a new era of public investment in welfare, education and infrastructure. The government is preaching austerity and public spending cuts, the general trend across a Europe dominated by the centre-right.

Discourse really matters!

On a completely irrelevant note, but one that I find mildly interesting nonetheless, SD leader Helle Thorning-Schmidt, who’s been SD leader since 2005, is married to a son of Neil Kinnock.

I’ve been buried in seclusion the last several days, trying to get a review article on the consequences of the Internet for politics (from a political science perspective) finished. Obviously, this is far too large an undertaking for a 12,000 word piece, so I’ve concentrated on two debates – arguments over the Internet and political polarization, and arguments over the putative role of the Internet in the Arab Spring. An initial draft is available here – comments and criticisms welcome (I’m already aware of, and planning to fix, the slightly ropy bibliography, the tendency to grossly over-use the word “plausibly” and the unexplained switch from discussion of ‘sorting’ in the opening section to ‘homophily’ in the main text). This is a topic where there are relevant literatures in political science, sociology, communications studies, and computer science that overlap without necessarily talking to each other that well. I’ve tried to gather as much as I can from across these disciplines, but am sure that there is plenty of material out there that I am unaware of.

I haven’t been reporting or commenting for a while on the ongoing political crisis in Belgium, which most recently started with the elections 15 months ago and the inability to form a government afterwards, but in fact genuinely started after the elections in June 2007 and the inability of the subsequent government to tackle some major socio-economic and political problems. In essence, the country has been politically unstable or incapable of effective governance for the last 4 years (In case you lost the story, here are my earlier posts on Belgian politics (starting with the oldest): “one”:https://crookedtimber.org/2007/09/19/the-ingredients-of-the-belgian-cocktail/ “two”:https://crookedtimber.org/2007/11/07/one-hundred-and-fifty-days-after/ “three”:https://crookedtimber.org/2007/12/02/175-days-and-still-counting/ “four”:https://crookedtimber.org/2007/12/19/belgium-time-out-of-the-political-crisis/ “five”:https://crookedtimber.org/2008/03/19/belgium-no-longer-exists/ “six”:https://crookedtimber.org/2008/09/22/15-months-of-belgian-political-mess/ “seven”:https://crookedtimber.org/2008/12/22/a-dramatic-turn-in-the-belgian-political-crisis/ “eight”:https://crookedtimber.org/2009/07/30/if-language-trumps-reasonableness-we-must-be-in-belgium/ “nine”:https://crookedtimber.org/2009/11/19/whether-or-not-it-is-good-for-europe-it-is-very-bad-for-belgium/ “ten”:https://crookedtimber.org/2010/06/13/belgian-elections-strong-victory-for-nva/ “eleven”:https://crookedtimber.org/2011/02/18/thanks-to-250-days-nogov-surrealism-flourishes-in-belgium/).

The last months were filled with one attempt after the other to find a coalition, all in a climate of the absence of trust between the two main linguistic groups, and also in what I’d call the ‘bad-divorce-atmosphere’. With that latter I mean that if one listens to the interpretation or explanation of a certain event by either the Flemish or the Francophones, it is just like listening to two spouses in the middle of a very ugly divorce: it is as if they live in two completely different realities. This, in fact, is probably the factor that makes me most pessimistic regarding the odds that the two linguistic groups will stay in the same country in the long run: just like a bad marriage, they no longer have enough valuable things in common, and their common past may no longer be enough to keep them together.

So now, in this mess, another event was just announced that may cause Belgium to sink even deeper: Yves Leterme, the Christian-Democratic former Prime-Minister, who has been been running the daily affairs for the last 15 months waiting to be succeeded by the new PM, has announced that he is moving to the office of the OECD.
[click to continue…]

The latest data on US incomes make for grim reading, both as regards the bottom of the income distribution where the number in (absolute) poverty is at an all-time high (the proportion of the population was the highest since 1993), and in the middle, where median household incomes have fallen back to the 1997 level. For some groups, such as male wage earners without college education, real incomes haven’t risen since around 1970

Having discussed this issue before I’m familiar with most of the standard arguments[1] used to show that things really aren’t that bad. The big ones are
(i) household size is decreasing
(ii) the consumer price index doesn’t take adequate account of product quality
(iii) the Earned Income Tax Credit isn’t taken into account
(iv) health insurance and other benefits are undervalue

Looking at the period from 1970 as a whole, there’s some truth in these claims, though not enough to offset the dramatic contrast between the huge gains before 1970 and the relative stagnation thereafter. But over the last decade or two, these excuses have run out.

[click to continue…]

My piece in the National Interest is now up under the exciting headline China’s imminent collapse. That’s great for reader interest – the piece has only been up a few hours and is already #1 on the Most Popular list, but I fear readers will perceive a bit of bait and switch when they reach the conclusion

Given the opacity of the system, there is no way of telling how and when a breakdown might occur except to observe that is likely to be precipitated by an economic crisis of some kind. Moreover, there is no way to tell whether a crisis would produce a relatively smooth transition towards democracy or something more chaotic and perhaps bloody.

Paul Krugman tells me he gets to choose his own headlines, a rare privilege in the world of newspapers and magazines. I asked my Australian Fin Review editors about this and they have said I can suggest them if I want to, though the tradition there runs more to cute subeditorial puns that I can’t really replicate.

Meanwhile apologies to readers for not providing accessible links to the papers I mentioned in my previous post. Through a mental process I won’t try to explain, I’d convinced myself that simply uploading the papers to CT would result in the imminent collapse of our hosting facility. Looking at the filesize that’s silly. So here are near-final drafts of:

The Politics and Society piece on financial markets
The Chronicle of Higher Education piece on inequality and the admissions race

CT has long been the go-to blog on the cultural significance of underwater zombies (as in this classic). But now as reported by Paul Krugman in the NYTimes, they’ve taken over the ECB.

The Rugby World Cup got under way last weekend, with no big surprises so far—although Wales were very unlucky against South Africa. Ireland sputtered along against the U.S., clearly in need of something to get them focused. So with that in mind—and in the hope that they can do it the next time they face New Zealand—I suggest they adopt this excellent haka. Some rudimentary knowledge of Irish is required for the full effect.