Stuck Inside of Mobile

Ethics, Politics, The economy

… with the Oxbridge Blues again

One of the enduring myths in Britain is that grammar schools aided social mobility. I will aim to demonstrate this really is a myth.

It’s undeniable that the UK has the worst record on social mobility in the western world: the graph below, taken from a just-published IMF report, shows the UK (alongside Italy) firmly at the top of the graph – which means we’re the (equal) least socially mobile country in the developed world.

Inequality and Mobility graph

So where does the myth come from? Ofsted disagrees, so it’s not them. One source is Conservative Voice, the Telegraph quoted Boris Johnson as saying so and Nigel Farage in the Express reminds us it was all Margaret Thatcher’s fault! But then, some commentators in the Telegraph disagree with others…

It’s generally agreed that social mobility was greater in the 1950s and 1960s than today and there were more grammar schools around then. But that coincidence proves nothing.

Changes in the Economy

During the 1950s and 60s, there was a major shift in working patterns, as increasing disposable income and technological progress shifted the balance of employment away from traditional working class jobs to a higher proportion of white-collar workers. Growth averaged 2.8% a year. This shift in the economy created the demand for more middle-class workers, which necessarily meant that many people from a working-class background moved up the social ladder.

By contrast, between 1980 and 2014, when growth was lower at 2.1% and most of that was grabbed by top earners as inequality increased, technology tended to destroy the middle-class jobs that were created a few decades earlier. More recently, the shift away from reliable, well-paid jobs to part-time and zero hours contracts has witnessed a halt to long-term rising productivity and standards of living. Who would have imagined forty years ago that carwash machines would be replaced by manual labour in the 21st century?

So, for social mobility, “it’s the economy, stupid” that did it – not the education system.

Other Countries

Another look at the graph above shows that, as to be expected, social mobility in the Scandinavian countries, clustered around the bottom-left of the graph, have very much higher rates of social mobility. But all these countries have some sort of comprehensive education system. So, their schools are not holding them back. It’s also striking how low inequality goes with high social mobility. This is fairly obvious if you think of mobility as a ladder. It’s much easier to climb if the ladder isn’t so long and the spaces between the rungs are closer together.

So let’s kill off the “return to grammar schools” myth once and for all.

Myth Two

And while we’re myth-busting, take a last look at the graph above and notice which country is next-highest on the graph (meaning second worst for social mobility). It’s the United States of America, the most unequal of all the western states. So the Great American Dream that, through hard work, anyone in America can make it to the top is also a myth. As Harvard Professor Michael Sandel said in a 2011 lecture broadcast on BBC4, “The American Dream is alive and well – and living in Denmark”.

So that’s two myths busted for the price of one!

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Joining the Dots

Religion, Social and Relationships

This is a tale of Visions and Signs from God, and of the Tiger Who Came to Tea – eventually.

Jesus?

Throughout history, signs and visions from a God or gods have been reported in all sorts of places: lights and cloud formations in the sky, entrails, tea leaves (in pre-teabag days!) and other natural phenomena. They often lead to amazing acts of bravery or compassion – sometimes even to being burned at the stake.

Here’s a fairly typical example of a miraculous “vision” which made the press a few years ago:

image / likeness / jesus face on a piece of toast item sold on ebay no date available web grab no fee

Yes – it’s a representation of a classic portrait of Jesus – on a slice of toast.

Now look at this picture:

Random dots

It’s just a random set of dots. But, now watch this short video:

We can’t help but “see” moving human figures doing a variety of actions: it’s just moving dots. But our brains are very good at joining the dots. What’s going on? Why do our brains trick us in this way?

Tiger?

In evolutionary timescales, it’s but a blinking of an eye since our hunter-gatherer days.

Imagine a scene from this period. Times are hard for the tribe. Food is scarce. Two hunters are out looking for food to kill. In the middle distance, Hunter A notices a movement in the bushes. The subtle changes of light and dark patterns in the leaves and branches alert him instantly. It’s the tell-tale pattern of movement of a tiger on the prowl. He runs for cover. Hunter B notices nothing and carries on hunting.

Nothing happens. It’s just the wind in the trees.

The same story is repeated for ninety-nine days. Hunter A is hungrier and more tired than his companion, because of all the unnecessary running around. But on the hundredth day, there really is a tiger!

So the moral of this tale is:

  • Hunter A, tired and hungry though he is, goes on to pass on his genes to his children.
  • Hunter B is eaten by the Tiger Who Came to Tea on the hundredth day.

And that, dear reader, is an example of what Charles Darwin first called “natural selection”.

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So, Was It Labour’s Fault?

Politics, The economy

Before the Tories finally get away with their version of history, let’s look at a few facts….

Debt

In 2010, the UK government debt stood at £1,100 billion pounds, no small sum! But when expressed as a percentage of Gross Domestic Product (GDP) – roughly national “turnover” – this comparison with other countries in 2010 gives some perspective:
Greece:                       170%
USA:                               90%
France:                       110%
Germany:                    95%
UK:                                 60%
So, in comparison with other countries, our debt was relatively small.

Yes, but how does this compare with past years? This graph gives some perspective:

UK National DebtOver a 300 year perspective, debt rose slowly and then more rapidly to its all-time peak, just after the battle of Waterloo in 1815, of over 2½ years’ GDP. The next 100 years were spent slowly paying off this debt. The years from 1914 to 1945 show a sharp rise, reaching almost the same peak level at 238% of GDP in 1945. It then fell to a low of 29% and has continued to rise after 2010 to around 80% today, the steep rise following the global economic crash in 2008. (It’s worth noting, in passing, that the near-record levels of debt in 1945 did not prevent the Labour government creating the NHS three years later – and that wars are very expensive!!)

So, debt in 2010 was not exceptionally high by historical standards.

Deficit

So, what about the deficit: the ability of the government to live within its means in any one year? This graph shows the position since the start of the Thatcher government in 1979:

UK deficit 1979 to 2015The solid blue and red bars above show the actual deficit for each year of Conservative (or Conservative-led) and Labour governments respectively. The pale pink shows a hypothetical scenario for the years 2002-3 to 2007-8, which is when the Tories said Labour should have had a budget surplus. I’ve used a fairly arbitrary figure of 1.3%, which, by historical standards, would have been quite an achievement.

So what can we tell from the figures?

  • Their track record shows the Tories are in no position to lecture Labour about budget surpluses!
  • At March 2002, the final year of Labour surpluses, national debt stood at 29.3%, close to the record low.
  • Six years later, after Labour “profligacy” and at the start of the global crash, it had risen to 36.7%, a rise of just over one percentage point a year.
  • In the next two years, deficits rose sharply causing the debt to shoot up another 25 percentage points, to 62%. This resulted from the “nationalisation” of record private debts by rescuing the banks and pumping money into the economy.
  • Deficits then slowly decline to around half the 2010 level, in contrast to Osborne’s prediction, at the 2010 “emergency” budget, of eliminating the deficit by 2015.

What conclusions can we draw? On some simplifying assumptions (which work very much in the Tories’ favour), if Brown and Darling had followed Osborne’s retrospective advice, national debt would have fallen to a 300-year low of 25% of GDP at the start of the crash, rather than the actual 37%. This certainly would have helped a bit, but is enormously overshadowed by the effects of the recklessness of the financial sector.

Who’s to Blame?

No one saw the crash coming in 2007-8. Mervyn King, Governor of the Bank of England said it wasn’t Labour’s fault, but rather “a shared intellectual view right across the entire political spectrum”. Even using my simplifying calculations (heavily biased in the Tories’ favour), blame would be apportioned:

  • 80% financial sector
  • 20% Labour Government.

And that’s before we even consider the benefits (Sure Start centres, increased NHS spending, etc.) that the extra money was used for.

One final thought about numbers – just a coincidence, I’m sure:

  • 37%: National debt at the start of the crash
  • 37%: Proportion of the vote to secure a Tory Government in 2015.

It’s a funny old world, isn’t it?

 

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Why George Osborne Is Only Half Human*

Politics, The economy

* economically speaking

Two events from recent history:

  1. The Berlin Wall fell in 1989 – the symbolic end to communism as a way of organising society and the economy.
  2. With the collapse of Lehman Brothers and government rescue of failing banks, Free Market Fundamentalism – my term for neoliberalism or neoconservatism – collapsed in 2008.

No serious commentator in the west or in the former Soviet bloc doubts event one, but many are still in denial about event two. Gideon George Osborne is one such person.

The “EffEmEffs”

Now, to back-track a bit. (This is not meant to be a lecture on the history of economics. Much, perhaps too much, has already been written on the clash of the ideas of Keynes and those of Hayek and Friedman. Suffice it to stay, the latter got the upper hand nearly forty years ago and won’t let go.)

As is well known, the core message of free market fundamentalism is that market forces are the best and most efficient way of organising society and the economy. Each individual pursuing his or her own interests leads to the best possible outcomes. Governments should “keep out” from interfering in the workings of markets.

I was instinctively against such ideas when they first emerged into public debate in the early 1980s, but could not articulate a full, coherent argument against the FMF movement.

Markets Increase Inequality

It was clear even then that free markets, left to themselves, would, over time, lead to ever increasing levels of inequality. The “invisible hand” of millions of individual decisions about which products and services would be bought and sold, and at what price, inevitably leads to an economy at odds with people’s preferred wishes overall. There would be more luxury goods in the world and fewer doctors, nurses and teachers than people would choose if asked to express their priorities directly. The reason is simple: in free markets, choices are made by the “votes” of each transaction: the more money someone has, the more “votes”. Markets thus respond in a way that makes poor people poorer and the rich richer. Even the smallest initial levels of inequality, processed through the amplifying effect of repeated transactions with the rich getting most say, lead to an ever-widening gap between rich and poor. This is an immutable law of free markets.

The Psychopathic Economy

Imagine for a moment, if you will, that the economy is a person. We would say that that person, exhibiting the behaviour required by the FMFs, has a severe personality disorder. Such a person would have a high risk of antisocial, predatory or even criminal behaviour. In lay terms, we’d call them a psychopath.

Curiosity Conscience Competition CompassionNow, using the Four Cs framework from my earlier post Being Human II: The Four Cs, it is easy to see why this should be so. Free market rules (i.e. pursuing self-interest) do not represent human thinking. The twin attributes “curiosity” and “competition” are modelled fully in the workings of markets. But the balancing attributes of “conscience” and “compassion” are missing completely.

George Osborne is our national cheerleader for the “EffEmEffs”. And it’s in that way that he is only half human.

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Jam Tomorrow on the M3

Politics, The economy

Do you remember M3? Or M1? Or M0? No, I’m not talking motorways here, I’m referring to monetarism.

Ah…! Monetarism: the new religion of the early 1980s.

In the late 1970s, the standard methods of managing the economy seemed no longer to work. Major shocks, such as the five-fold increase in the oil price, had wreaked havoc. Enter the Chicago school of economics under their leader Milton Friedman. Much has been written about his ideas and I don’t plan to repeat them here. But these ideas had a profound effect on government thinking which continue to this day. Even Dennis Healy, Chancellor in Jim Callaghan’s government, seemed to think there was something worth considering. But it was Margaret Thatcher and Chancellor Geoffrey Howe who were the true believers.

There was much talk about the definition of what was money – hence the various M’s – and its “velocity of circulation”, which was asserted to be stable, at least in the long term. Followers of Keynes hit back with their hero’s famous “In the long run, we’re all dead” quote from 1923. But, at the start of the 1980s, Howe pressed ahead with great vigour to implement policies based upon Chicago school thinking.

And what happened?

Uk Growth 1975 to 1986
UK National Growth 1975-86

As can be seen from the graph, the great monetarist experiment plunged Britain into a wholly unnecessary recession, which lasted about three years. The main consequence was the permanent destruction of much of our manufacturing industry, from which we have never recovered. The very lop-sided state of our economy towards services, and in particular financial services, starts here – we never did get the “jam tomorrow” promised by the theorists.

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Freedom or Crucifixion?

The economy

Towards the end of Monty Python’s Life of Brian film, there is a scene where a row of condemned prisoners shuffle past a sympathetic Roman officer (played by Michael Palin). He checks each prisoner to ensure they are in the right line and asks each in turn “Crucifixion?” The first few prisoners confirm this and the officer directs them to where they can pick up their crosses. One prisoner tries it on: he says it was all a mistake and that he was promised his freedom. The officer immediately believes him but, on the brink of his release, the prisoner admits he was lying and he’s really due for crucifixion.

Given the choice, would you opt for freedom or crucifixion? The answer, in modern parlance, is a “no brainer”.

Thomas Picketty’s book Capital in the 21st Century is a review of western capitalism over the past 200 years. Some of the more depressing findings in the book are:

  • Income inequality was extremely high in Europe just before World War I
  • Inequality in the USA has now risen above this level, with Britain and other main European countries not far behind (see chart below)
  • The fall in inequality in the mid-20th century was the result of the two world wars; inequality is now climbing back to its “natural” level.
Income of top ten percent
Proportion of national income going to top 10% (click to enlarge)

The graph above shows a measure of inequality of income; inequality of wealth is far higher.

Picketty argues that the fall in inequality after the wars was due to a combination of two exceptional factors:

  1. The physical destruction of capital and the earnings derived from it, through real estate, bonds, stocks and shares, etc.
  2. Emergency high levels of progressive taxation and similar policies (war bonds, etc.) made possible by changes in popular attitude: wartime solidarity, need to rebuild infrastructure, etc.

He goes on to show that, under current economic policies, inequality will continue to rise to equal or surpass the pre-1914 levels. He argues that, in the long term, this would be incompatible with modern liberal democracy: sooner or later, it will end in tears – war or revolution or some such. He suggests a less violent alternative:

  • increased progressive taxation (especially on wealth)
  • closer international cooperation on taxation policy, starting with the countries of the EU
  • inter-governmental exchange of data to give transparency of global wealth.

These measures would also enable systematic steps to reduce or eliminate tax havens, currently estimated by Gabriel Zucman of the LSE to harbour about 10% of global GDP.

So, what’s it to be? War or taxation? Freedom or crucifixion? It’s a no brainer.

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One In Four

Politics

Big Brother Watch’s report today reveals that the number of police requests to spy on our phone calls and texts reached a quarter of a million last year, with 93% approved. At that rate, over an adult lifetime of sixty years, it would mean that one in four of us would be targeted at some time in our lives. That shocking statistic alone says that something has gone horribly wrong with the democratic control over our “security” organisations.

Isn’t it time someone, i.e. Parliament,  got a grip?

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Being Human II: The Four Cs

Ethics

I had some interesting and thought-provoking comments about my 23rd May Being Human post. As a result, I have had a re-think, and now propose the following framework upon which to add further ideas:

VitruvianCCCC

There are two changes: “Compassion” replaces “Empathy” and a fourth characteristic: “Conscience” has been added. Some explanations follow…

Compassion

I originally wrestled between this and “empathy”. It was pointed out that empathy is morally neutral and can be used for good or evil. On the one hand, empathy can lead to compassion and altruism; on the other hand, psychopaths and sexual predators groom their victims by exploiting their well-developed empathic skills. Compassion better represents the point I am trying to make.

Conscience

The suggested addition of “conscience” is, I think, an excellent one. It appears to me to be uniquely human and follows from our ability to place ourselves in time. We recall the experiences and lessons from our past lives and reflect on these in developing a moral framework for our future actions. It’s a kind of “moral matrix”, or prism, if you like. Although Shakespeare’s most acclaimed character remarks “conscience doth make cowards of us all”, I do believe that a conscience, consistently but responsively applied over time, earns a person greater respect. So, “conscience” makes it four, not three.

I’ve nothing new to add to my earlier remarks about “curiosity” and “competition” as such. But I do want to talk about the interrelation between these four human characteristics.

I placed conscience and curiosity at the base of my new diagram as I believe are, in some sense, “causes” and compassion and competition “effects”. Another way of putting it is that the bottom two are inward, almost mechanistic, components of the way we think and the upper two are the contrasting outward appearances of our actions. In practice, all four interact, but the left / right choice is also deliberate. Conscience and compassion are natural bedfellows, as are curiosity and competition.

An academic in, say, psychology or philosophy could say this is simplistic: it is, deliberately so. But my firm conviction is that an awful lot of fruitless argument and debate arises because the two parties haven’t agreed the basic assumptions from which they’re arguing. This is my attempt at establishing some ground rules!

Of course, it’s the actions that matter, and future posts will return to the balance and conflict between compassion and competition. But curiosity and, especially, conscience might get a look in too!

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Useless and Pointless Knowledge

Education, Ethics

Bob Dylan released Tombstone Blues, from which the above title comes, in the same year I started my maths degree course. The Mathematics Department divided into two distinct cultural camps: pure and applied. The pure mathematicians were snobs. They looked down on their lesser “applied” colleagues, who got their hands dirty by supplying useful tools for scientists, architects, meteorologists and all sorts of other people in the “real” world. To the purists, the quest was for “beauty” and the term was often used synonymously with “uselessness”: the more useless, the more beautiful.

One small part of my course concerned number theory and a subset of this dealt with prime numbers and modular arithmetic. (Links are provided for anyone who is curious or sad enough to want to know more; otherwise, read on…) Frankly, I found this part of the course a bit boring and – dare I say? – pointless. However, its enthusiasts pointed out how elegant, how beautiful and, above all, how useless it all was.

Fast forward thirty years. My son was now a student, reading computer science. He told me about an assignment he had to do, concerning encryption on the internet. The purpose of the assignment was to find the most efficient way to write computer code which would encrypt and decrypt data to keep it secure over the web. These were the days before superfast broadband, and speed of transmission was all-important. Imagine my surprise when I discovered that underlying the encryption systems was the same useless maths I had learnt thirty years earlier!

My point is this. In the days since I was a student, the debate around education and its purpose has shifted more and more to a purely economic one. The talk is all about training the minds of the next generation to maximize their own job prospects and for the greater good of “UK plc”. Whatever happened to the idea of knowledge, insight and even appreciation of beauty as moral goods in their own right?

So, the next time you stand in awe at a beautiful sight, when someone tells you some strange, new fact that doesn’t fit – that makes you think: “hang on a minute” – or, more basically, the next time you’re doing some online shopping, just spare a thought and raise a cheer to all that “useless and pointless knowledge”!

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