Tim Harford The Undercover Economist
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Marginalia

Books to make you feel better about the world

I recently reviewed the excellent Factfulness (UK) (US) by the late Hans Rosling, his son Ola and his daughter-in-law Anna. It’s an absolutely terrific, inspiring, and wise book, which among many other things is likely to make you feel better about the world. This is not because everything is rosy, but because most people’s perceptions of the world are badly skewed by a mixture of outdated ideas, dramatic media stories, and our own instincts to spot the worst and most frightening facts about the world. Hence “Factfulness” is a relaxing condition.

Bravo – everyone should read this book. But there are some others to look out for.

Charles Kenny, in Getting Better (UK) (US), also points to dramatic progress in achieving some (not all) of the goals that really matter, and in showing the connections between economic growth and progress on health, education, freedom and happiness. He also explores what else needs to be done to get the most out of development aid and to make development work for everyone; this is a nice complement to Factfulness, which is more focused on helping people understand the world.

Steven Pinker, in Enlightenment Now (UK) (US) also reviews this progress. But where Pinker differentiates himself is in Better Angels of Our Nature (UK) (US), which even for an optimist like me is surprising in its message that violence, torture and cruelty – measured in a variety of ways – has been in widespread decline for centuries. Well worth your attention, and I found Pinker persuasive in rebutting many of the obvious objections.

Rebecca Solnit’s A Paradise Built In Hell (UK) (US) takes a different tack, telling stories of the way people respond to disasters such as 9/11, Hurricane Katrina or the Blitz. Solnit argues that the famous “stiff upper lip” is a common response across communities. We scare each other with tales of looting and anarchy, but in fact most communities pull together.

One of the best and most thought-provoking books I’ve ever read – although sadly it did not make me feel as good about the world as the others – is David Mackay’s Sustainable Energy Without The Hot Air (UK) (US). David, who died far too young, goes step by step through the way we consume and produce energy, teaching us how to make estimates, what really matters, and what the most promising sustainable energy sources might be. Spoiler alert: sustainable energy will probably involve some very hard choices. Utterly brilliant book and it is available online as a free resource.

I suppose I should mention my own Fifty Things That Made The Modern Economy (UK) (US) – although I don’t see the book as making an argument for progress as such, it’s impossible to ponder the list of ideas and inventions, from the contraceptive pill to the cold chain, the S-bend to the light bulb, without feeling grateful for those who went before us. It’s true that barbed wire was a bit of a mixed blessing and leaded petrol was an unmitigated disaster – but still, where would we be without paper, or beautiful beautiful concrete? A French journalist told me that the book put me squarely in the category of optimistic Anglo-Saxons, so there.

 

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23rd of April, 2018MarginaliaResourcesComments off
Undercover Economist

Even in Trump’s White House, chaos has its limits

Written for and first published in the Financial Times on 23 March 2018.

“So many people have been leaving the White House. It’s actually been really exciting and invigorating,” said Donald Trump earlier this month. “I like turnover. I like chaos. It really is good.” It is not clear whether he was joking — the remark was made during a light-hearted dinner speech — but, for Mr Trump’s sake, one hopes he meant it.

The past month has seen the resignation of his communications director Hope Hicks, the downgrading of his son-in-law Jared Kushner’s security clearance, the resignation of his senior economic adviser Gary Cohn, the sacking-by-tweet of the secretary of state Rex Tillerson, the escorting-out-of-the-building of his aide John McEntee, the firing of Andrew McCabe, deputy director of the FBI – and now HR McMaster has gone too.

Along the way Mr Trump has railed against the investigations of special counsel Robert Mueller. Chaos reigns.

It remains unclear how much method there is in all this madness, but there may be more than we think. Mr Trump does not drink, but his leadership style is reminiscent of “drunken boxing” — a style of martial arts associated with staggering around unpredictably until your opponent lets his guard down, whereupon you pop him in the mouth.

The disadvantage of chaos is that it is destabilising; the advantage is that it may destabilise your foes more than you. About four decades ago the US military strategist John Boyd (UK) (US) gave a series of influential talks about this idea. Boyd, whose admirers included senior Republican Dick Cheney and management guru Tom Peters, argued for rapid, confusing manoeuvres, improvised if need be, with the aim of disorienting the enemy. Create enough chaos and you could completely paralyse your foe. If the chaos made life uncomfortable for your own side, no matter. Synchronisation, said Boyd, was not for organisations, but for watches.

This messy, improvised approach to tactics is not entirely new. Sun Tzu, the near-mythical author of The Art of War, declared that “quickness is the essence of war”, but also advised being “without ascertainable shape”. This sounds like the incessant, incomprehensible activity of the Trump White House.

It also sounds like the campaign for the UK to leave the EU in 2016. The Brexiters seemed hamstrung by the fact that they ran two mutually suspicious campaigns — Leave.EU and Vote Leave. “It wasn’t one of my adverts,” said Nigel Farage about Vote Leave’s bus, while Boris Johnson said Mr Farage’s inflammatory poster about refugees was “not my campaign” and “not my politics”. This left the Leave campaign, as Sun Tzu advised, “without ascertainable shape”, so voters picked which ever message resonated, while the Remain campaign did not know where to look. Dominic Cummings, of Vote Leave, later said a united Leave campaign would have been easily defeated.

On the battlefield, the master of messy improvisation was the German general Erwin Rommel. He championed swift, energetic action, even if it left his own men scrambling to figure out what was happening. “I have a feeling that things are in a mess,” lamented one Berlin-based general of Rommel’s north Africa campaign in 1941. They were, but for many months the chaos took a worse toll on the British than the Germans.

The same fast-paced seizing of opportunities has worked for some businesses. In the early years of Amazon, Jeff Bezos was clear that he needed to get ahead of rivals such as Barnes & Noble and Toys R Us, even if it meant chaos within Amazon. A more methodical start-up would have been caught and crushed. “It’s a messy process,” Mr Bezos told his biographer, Brad Stone (UK) (US), but there was simply no time to be meticulous. A visitor to an Amazon warehouse in the run-up to Christmas in 1999 would have said the company was a shambles, but the chaos paid off. Amazon bled money but shipped on time, while rivals have been struggling to catch up ever since.

Of course the more ponderous forces of planning and organisation may reassert themselves in the end. Mr Trump has an uncanny ability to dominate the news cycle, change the subject whenever he wants, and turn the spotlight away from his critics and towards himself. This was a huge asset during the election campaign but is a mixed blessing in government.

Facebook’s old mantra, “move fast and break things”, suddenly looks less clever. Mark Zuckerberg must now explain exactly what he has broken.

The Brexiters are running into the limits of the improvisation, ambiguity and self-contradiction that worked so brilliantly as a campaigning strategy, and indeed as a way of managing their own divisions. On a playing field criss-crossed by technical and legal details, EU negotiator Michel Barnier’s ploddingly careful preparation now seems to be paying dividends.

Even the unpredictable Rommel was eventually defeated, by Bernard Montgomery’s cautious and meticulously planned application of force at El Alamein. Montgomery was in no hurry as he assembled everything he needed. Mr Trump may have noticed that Robert Mueller is displaying the same patience.

My book “Messy: How To Be Creative and Resilient in a Tidy-Minded World” is now available in paperback both in the US and the UK – or through your local bookshop.

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The past, present and future of banking

img_20180404_120458253

(Business seals; Rishengchang Museum.)

Not long ago I was fortunate enough to visit the Rishengchang in Pingyao – which I tentatively understand to be the oldest “draft” bank in China, allowing merchants to send money across the nation. Pingyao is well worth a visit, if ever happen to be in that part of China. It put me to thinking about some fine histories of money and banking I’ve read in the past few years.

I knew a little about the Chinese system of Feiquan or “flying money” from reading William Goetzmann’s excellent Money Changes Everything (UK) (US), which has a vast trove of material on money and finance in China.

Fifty Things That Made the Modern Economy (UK) (US) also described the Chinese inventions of paper, paper money, and forms of banking. I just loved the way that paper money blew Marco Polo’s mind.

For another magisterial take on money and banking, try Felix Martin’s Money: An Unauthorised Biography (UK) (US).  Martin writes deftly and his book, especially the first half of it, is packed with fascinating historical anecdote and colour.

For a take on banking in the great depression, try Lords of Finance (UK) (US) by Liaquat Ahamed. This book won the FT’s Business Book of the Year award a few years back – a riveting account of how the Great Depression could have been prevented, and wasn’t.

And for the present and future of banking, I strong recommend John Kay’s Other People’s Money (UK) (US), which begins with the question: if we were designing a financial system to do what we say a financial system is supposed to do, would it look anything like Wall Street today? (Spoiler: the answer is no.) Kay is an elegant writer, a well-informed historian and a superb economist. This is a terrific book.

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16th of April, 2018MarginaliaResourcesComments off
Undercover Economist

Stephen Hawking’s restless scientific curiosity pulled us all in

A few months ago, my teenage daughter and I went to see a lecture by Stephen Hawking at Oxford’s Mathematical Institute. The event had been postponed once because he was unwell; I worried that his body might finally give out, albeit five decades later than doctors had expected. Yet a new date was set and Hawking duly arrived, as if from another world, to deliver a spellbinding talk in his distinctive synthetic voice.

I had given a lecture myself at the same venue earlier, striking a pessimistic tone: it was easy to pollute the stream of conversation about science and statistics, I said, and simply intoning the facts would not dispel misinformation. Hawking, who died this week, went some way to restoring my hope. He showed that it was possible to communicate difficult ideas, if you went about it in the right way.

What was his secret? He acknowledged that his disability attracted the spotlight, but there was much more going on than the spectacle of a brilliant mind in a malfunctioning body.

First, he did not patronise his audience: presenting the most complicated ideas was a sign that he respected our intelligence. If we did not grasp everything, we would still be better off for having tried.

“I know the book is difficult,” he commented after his A Brief History of Time (UK) (US) had become a bestseller. “It does not matter too much if people can’t follow all the arguments. They can still get the flavour of the intellectual quest.”

That instinct was right. His talk demanded concentration. Most of it was beyond my daughter. Much of it was beyond me. Then Hawking would crack a joke about hairy black holes, and the audience would all be back on the same page, laughing, and ready for another attempt to scale the intellectual heights.

Second, he was immensely curious. “My goal is simple, “ he said. “It is a complete understanding of the universe, why it is as it is and why it exists at all.”

That sort of curiosity is contagious. It makes us want to join his hunt for answers, rather than passively receiving (or rejecting) information from an expert who claims to know them already.

The third quality followed from the first two: unlike some public intellectuals, Hawking was not very interested in conflict for the sake of it. The economist Paul Krugman and the biologist Richard Dawkins are instructive contrasts to Hawking: both are brilliant communicators, but they often present their ideas as a battle between good and evil, wisdom and stupidity.

When you have a noble cause it can be tempting to pursue it in an antagonistic way: Economy, a charity that aims to improve economics literacy, has been fundraising with an endorsement from writer George Monbiot saying that economists are “a pox on the planet”.

These insults seem to work, at first. If you call out your opponents as fools, knaves, or even transmissible diseases, you enthuse your own supporters. But you will win few new converts when every issue becomes a matter of tribal loyalty.

We humans are social creatures. Given a choice between being right on a partisan question (abortion, guns, Brexit, globalisation, climate change) and having mistaken views that our friends and neighbours support, we would rather be wrong and stay in the tribe. This becomes clear in surveys of views on climate change: college-educated Republicans and Democrats are further apart on the topic than those who are less educated.

If our goal is to persuade, the curiosity-driven approach works better than the conflict-driven one: the evidence suggests that curious people are less subject to the temptations of partisanship. When the national conversation becomes polarised, we need to encourage curiosity about how things work rather than them-and-us tribalism.

Hawking, of course, did have robust political views. He criticised the UK health secretary Jeremy Hunt for cherry-picking evidence on the National Health Service and spoke out against Brexit. But after the referendum went the other way, he continued to argue in favour of mutual understanding and solving problems together, rather than dismissing voters as ignorant.

If experts want to persuade us to wrap our minds around a complex issue, they need to get us to abandon our cynicism towards unwelcome information. It does no harm to be the most recognisable scientist on the planet, but Hawking also understood that insults do not work. Instead, he treated us with respect and fired our enthusiasm.

Towards the end of his lecture, after a difficult discussion of quantum effects near the boundary of a black hole, Hawking offered a simpler idea: “If you feel you are in a black hole, don’t give up. There is a way out.”

It was a message any teenager could hold on to. I sat next to my daughter and thought about how Hawking had lived such a rich life under the burden of an apparently unbeatable illness.

We have been told that people have had enough of experts. That is true for some experts. It wasn’t true for Stephen Hawking.

 

 

Written for and first published in the Financial Times on 16 March 2018.

My book “Messy: How To Be Creative and Resilient in a Tidy-Minded World” is now available in paperback both in the US and the UK – or through your local bookshop.

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Marginalia

In praise of Factfulness

“I use normal statistics that are compiled by the World Bank and the United Nations. This is not controversial. These facts are not up for discussion. I am right and you are wrong.”

That was Hans Rosling, delivering a celebrated smackdown  on Danish television to a journalist with an excessively gloomy view of the world. And although the quote displays just one facet of the the late Professor Rosling, it isn’t a bad place to start in considering his posthumous book, Factfulness (UK) (US). Rosling takes something rather ordinary – “normal statistics” – and turns it into a passionate, witty, and encouraging view of the world that also happens to be far more realistic than the “realists” have to offer.

Hans Rosling – perhaps most famous for a series of hugely popular TED talks – was the greatest and most versatile communicator I ever met. He would use spectacular graphics, but also props such as jugs of juice, bayonets (for his sword-swallowing demonstrations) and rolls of toilet paper. He was a magnificent storyteller, an inspiring guide to a complex world, and – when the situation demanded it – could display flashes of righteous anger. He was also much more than a showman: he spent long periods of time living in poorer countries and working for underfunded healthcare systems across the world, most recently participating in the fight against Ebola in Liberia.

Factfulness was co-written with his daughter-in-law Anna and his son Ola, although it is in Hans’s distinctive voice. It is a wonderful guide to an improving world, as well as being a well-stocked source of sound advice as to how to think about factual and statistical claims. The book identifies ten often-unhelpful instincts, such as the Negativity instinct (we, and our media, find sudden bad news more interesting and memorable than slow-burn good news) or the Destiny instinct (we feel that some things never change – that, for example, Nigeria will always be poor for “cultural reasons”, when in fact all societies, including modern western societies, are constantly learning and changing). And it suggests antidotes or reality checks for these instincts.

This structure works well enough, but the real joy of the book is the string of surprising facts and unforgettable stories to illustrate them: the Tanzanian midwife whose dearest wish was for a torch, so that when walking barefoot at night to a birth she could spot snakes more easily; the time Hans Rosling’s student nearly lost a leg because she tried to keep open the door of an Indian elevator (which, unlike Swedish elevators, did not have a safety sensor fitted); Rosling nearly drowning in sewage (in Sweden); Rosling thinking on his feet to avoid eating lavae in Congo; Rosling being humbled by the quality of his fellow medical students in Bangalore; and Rosling confessing to numerous mistakes over the course of his life, some embarrassing and some tragic.

The book is a pleasure to read – simple, clear, memorable writing – and when you’ve finished you’ll be a lot wiser about the world. You’ll also feel rather happier, because while Hans Rosling has seen far more suffering and premature death than most of us ever will, he also saw that suffering and premature death are on the retreat almost everywhere. Hence, “Factfulness” – the relaxing peace of mind you get when you have a clearer view of how the world really is.

I strongly recommend this book. (UK) (US)

Meanwhile here is a programme about the fight against Ebola that we made with Hans a couple of years ago; here is a radio obituary; here is an interview I conducted with him on our first meeting; and here is my favourite Hans Rosling talk.

My book “Messy: How To Be Creative and Resilient in a Tidy-Minded World” is now available in paperback both in the US and the UK – or through your local bookshop.

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11th of April, 2018MarginaliaComments off
Marginalia

My favourite indy projects

I am, of course, not sure what the definition of “indy” really is these days, but I’ll leave that one to the philosophers.

I’ve written before about Can You Brexit? (Without breaking Britain) (UK) (US) – a fabulous, well-researched and very funny choose-your-own-story gamebook by Dave Morris and Jamie Thompson. It casts you in the role of the Prime Minister the morning after the Brexit referendum, in a parallel but highly-recognisable universe. (The leader of the Labour party is the dishevelled hard-leftist “Barry Scraggle”, while one of the leading Brexiters is the near-Edwardian “Tobias Tode”.) The book achieves two notable feats: it makes the chewy details of Brexit engaging, and one starts to sympathise – or at least empathise – with the plight of the Prime Minister who has the impossible task of keeping all sides happy.

For music, try the remarkable loops of Duotone, aka Barney Morse-Brown. It’s hypnotic, and he is the most astonishingly talented musician. (One of his side gigs, I believe, is that he plays cello for Birdy.) Ropes (UK) (US) was my introduction to Duotone, but his new album “A Life Reappearing” is out very soon – here’s the single, “Martha”.

I’m still loving Amazing Tales by Martin Lloyd, a lavishly illustrated, simple and elegant role-playing game for parents and young children to enjoy together – often in the time it might take to enjoy a bedtime story. My 6 year old has just created a new character, “Death Man”, whose special skills include “Smashing” and “Eating”. Marvellous. Martin has pared role-playing to its essentials, designed a system that involves rolling funny-shaped dice (indispensable), and offered many ideas for keeping things fast and fun and not too scary.

And while my podcast feed is packed with high-production-value shows assembled by large production teams with talented presenters, somehow whenever Futility Closet drops into the feed, I pause everything to listen to Greg and Sharon Ross chat about the latest quirky historical story, go through an increasingly thought-provoking mailbag, and solve a lateral thinking puzzle. Production values have improved, but the show still sounds a little amateurish in the best possible way. Unique, engaging, and well worth a listen.

 

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10th of April, 2018MarginaliaComments off
Undercover Economist

A clever nudge to improve diversity

In the introduction to my book, The Undercover Economist, I invite readers to imagine that, as they leaf through the pages, there’s an economist sitting nearby. Because he’s an economist, he sees things — hidden patterns, curious puzzles — that they might not notice. The book had been out for a decade when a young economist wrote to me. She had a simple question: why was my undercover economist a “he”?

I was reminded of the question this week by the musician David Byrne’s embarrassment. Mr Byrne, formerly of Talking Heads, has just realised that his new album is a string of collaborations with men. He apologised for being “part of the problem”.

It is easy for white men in a white man’s world to do this sort of thing without malice — almost by default. Sometimes we need a nudge to do better. Frances McDormand has just such a nudge in mind. Accepting her second Oscar for best actress on Sunday, she invited every female nominee in the room to stand up. “Look around, ladies and gentlemen, because we all have stories to tell and projects we need financed,” she said. Adding a final enigmatic phrase: “inclusion rider”.

Inclusion rider? The idea was proposed a couple of years ago by media researcher Stacy Smith. Ms Smith observed that minor characters could easily be demographically representative of a film’s setting — which is likely to mean more women, more ethnic minorities and more disabled actors on screen. An A-List celebrity could simply insist on this requirement — an inclusion rider — in his or her contract.

This is a clever nudge. A straightforward demand for “more diversity”, however reasonable, can be evaded. A black Superman or female Gandalf apparently feels too bold for some studio executives. But the inclusion rider clause is specific and straightforward to satisfy; nobody is going to die in a ditch to make sure that straight white men get all the bit-part roles. Off-screen jobs could be covered, too. And it’s easy to imagine Hollywood A-listers throwing their weight around on this point.

There is no doubt that Hollywood movies fail any reasonable test of being demographically representative. The most famous test — imperfect but instructive — is named after cartoonist Alison Bechdel. To pass, a movie must contain two women, who talk to each other about something other than a man. A low bar, it might seem, but a surprising number of movies fail.

Despite some prominent examples of more diverse casting (the recent superhero movies Wonder Woman and Black Panther and the Oscar-winning Moonlight, which ironically fails the Bechdel test) it is not obvious that the situation is improving. Even online reviews are dominated by male reviewers.

We shouldn’t blame Hollywood alone for this. Data scientist Ben Blatt, author of Nabokov’s Favourite Word Is Mauve (UK) (US) conducted a computer-aided analysis both of recent fiction bestsellers and classics of the literary canon. One simple test: how often does the word “he” appear, relative to the word “she”?

In The Hobbit (US) (UK), JRR Tolkien’s adventure story that contains a variety of fairytale protagonists, none of them with wombs, the word “he” is used 1,900 times. The word “she” appears only once, referring to Bilbo’s mother. That is an outlier, but Mr Blatt found that many male novelists wrote about a world in which the opposite sex barely existed. This was far less true for female authors.

The economics profession has a particular problem when it comes to diversity, according to research by economists Amanda Bayer and Cecilia Elena Rouse. In the US, more than 50 per cent of both bachelor’s and doctoral “Stem” degrees — science, technology, engineering and mathematics — are now awarded to women. But, in economics, the proportion is just 30 per cent and shows no sign of improvement. Economics is also behind the curve in including some ethnic minorities.

To the extent this reflects discrimination, or a hostile environment for women, that is a disgrace. And if it is purely, or even partially, that young women don’t find economics appealing, we economists should be asking why not. A monoculture in academia is unfair, and it leads to blind spots, like the significance of unpaid housework.

One recent study is a nice reminder that a more inclusive environment can pay dividends. The Norwegian Defence Research Establishment randomly assigned female recruits into mostly male squads of six. During eight weeks of boot camp, the squad members trained together and shared a single dormitory. The experiment markedly shifted the attitudes of the men, with substantial increases in their evaluation of mixed-gender teams, and more egalitarian views on women and housework. “Gender stereotypes are malleable and can be altered by integrating,” noted the economists who ran the experiment.

There is a vast difference between an eight-week boot camp and the experience of watching a movie or reading a book that reflects our diversity. Still, we make what progress we can. I shall follow the topic of inclusion riders with interest. And the mysterious protagonist of The Undercover Economist? That street-smart enigma is now a “she”.
Written for and first published in the Financial Times on 9 March 2018.

My book “Messy: How To Be Creative and Resilient in a Tidy-Minded World” is now available in paperback both in the US and the UK – or through your local bookshop.

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Marginalia

Five of the best introductions to economics

I’m often asked which economics books I recommend to someone who wants to get a good introduction to the subject. There are some obvious choices – a good textbook, for example – and of course I wrote The Undercover Economist (UK) (US) and The Undercover Economist Strikes Back (UK) (US) to be the very best introductions to microeconomics and macroeconomics I could manage.

But of course there’s so much more, and I wanted to make a few suggestions.

Thinking Strategically (UK) (US) by Avinash Dixit and Barry Nalebuff is the book that made me fall in love with economics. Without it I’d have dropped the subject completely at university. Thinking Strategically is an introduction to game theory – a mathematical analysis of human vs. human interaction from a tennis match to a salary negotiation. There’s not much maths in the book, but just enough to make the point. The writing is lively and the insights are full of counterintuitive wisdoms. Excellent stuff.

Money Changes Everything (UK) (US) by William Goetzmann was a real inspiration for the financial sections of Fifty Things That Made the Modern Economy (UK) (US). Goetzmann goes deep into the history of financial ideas from money itself to insurance to banking. A detailed and scholarly book, but never a dull moment.

Hidden Order (UK) (US) by David Friedman is a brilliant alternative to a microeconomics textbook. Friedman is a libertarian – even more so than his father Milton – and the politics emerges from time to time in this book, but there’s no shame in that. It is scintillatingly clear about how economic theory fits together, and full of clever thought experiments.

The Truth About Markets (UK) (US) by John Kay presents the flip side to Friedman: where Friedman sees simplicity, Kay warns that markets are a little messier and more socially embedded. Unlike many critics of classical economics, Kay understands exactly what he is chipping away at, and both the genius and the limits of the market. A wonderful book – and prescient in many ways.

Grand Pursuit (UK) (US) by Sylvia Nasar is a magisterial history of economic thought: Marshall, Robinson, Keynes, Fisher and the rest. A real education for a history-of-thought ignoramus like me. (On a similar theme, I’m looking forward to reading the brand new The Great Economists (UK) (US) by Linda Yueh, which looks good.)

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3rd of April, 2018MarginaliaResourcesComments off
Undercover Economist

How referendums break democracies

The Dutch parliament have just agreed to abolish advisory referendums. I don’t blame them. I did not much care for the result of the latest referendum that was held in the UK, so I confess to disliking referendums with the fervour of a sore loser.

The winners no doubt feel more cheerful about the idea but even they may agree with this: the campaigning process was corrosive, and the consequences for the health of British politics have been even worse.

This scepticism might be seen as kicking democracy when it is down. The Pew Research Center found last year that 17 per cent of Americans think military rule would be a good idea, while 22 per cent favoured a strong leader “without interference from parliament or the courts”. The numbers in the UK were fairly similar.

Most of us still believe in democracy, but even its staunchest supporters will admit that it has its flaws. The most obvious of these is that we voters pay little attention to the issues. Consider Jeremy Corbyn’s recent shift; his opposition Labour party now advocates the UK leaving the EU but remaining in the (or “a”) customs union — not to be confused with the single market. This has been roundly agreed to be a significant change in the political landscape. But the now-momentous-seeming distinction between the customs union, the EU and the European single market was obscure to all but the wonkiest of wonks until a couple of years ago (myself included). It surely remains obscure to most voters today.

I do not mean this as a criticism of the voters. Why should we pay attention? We have other things to do. A decade ago, economist Bryan Caplan’s book The Myth of the Rational Voter (UK) (US) argued that it made sense for us to express our misconceptions, prejudices and tribal loyalties at the ballot box, since doing so was almost costless.

A voter thinking of popping to the polls and then trying out a new pizzeria would be perfectly rational in checking out TripAdvisor, rather than the party manifestos. This is because her vote will almost certainly not make any difference to her life, but her choice of restaurant almost certainly will. We vote because we see it as a civic duty, or a way of being part of something bigger than ourselves. Few people go to the polls under the illusion that they will be casting the deciding vote.

If voters are not paying close attention, then what might we expect from a referendum? The psychologist and Nobel laureate Daniel Kahneman, in Thinking, Fast and Slow (UK) (US), writes, “When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.”

The difficult question in a referendum might be, “Should the UK remain in the EU?”; the easier substitution is, “Do I like the way this country is going?”

Another simple heuristic is this: “If one of the options was awful, they wouldn’t be asking, would they?” Except that in the UK’s referendum on EU membership, for reasons of short-sighted political expediency, they did ask.

Of course, any democratic system is weakened by the fact that voters are not paying close attention. But representative democracy provides a line of defence against voter ignorance, by asking us to elect someone to make considered choices on our behalf.

I can’t fix a blocked drain, so I ask a plumber to do it for me. I am not sure whether that blotch on my cheekbone is malignant, so I ask a doctor. And I am, truth be told, a bit vague about the difference between the European Court of Justice and the European Court of Human Rights, which is why I elect an MP who can call on the advice of civil servants and the House of Commons library on my behalf.

I may make the same knee-jerk, tribal decision in an election as in a referendum, but at least I will be assisted by my recognition of longstanding party brands. Just as we recognise brands like Apple, Coke and HSBC, most voters know the difference between Conservative and Labour, or Republican and Democrat. We vote for people who seem to share our instincts and trust them to handle the details.

These brands have another advantage: they provide their owners some modest incentive to tell the truth and keep their promises. The shortlived campaigns that coalesce to fight referendums have no such constraints.

That points to one other disadvantage of a referendum: there is nobody to hold to account after the result. Theresa May campaigned for Remain. Three-quarters of MPs were for Remain. So if the result of the exit process goes badly, who can be blamed? Not them — and we’re certainly not going to blame ourselves. The buck stops nowhere.

No voter can master every issue, and few voters try. Any democratic system must cope with that. Referendums, instead, invite us to ignore the question, give the snake-oil peddlers an edge, concentrate our ignorance into a tightly focused beam, and hold nobody accountable for results. They magnify the vulnerabilities of our democracies and diminish their defences. The Dutch are wise to avoid them.

 

Written for and first published in the Financial Times on 2 March 2018.

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Highlights

“Basic income is about the freedom to say no” – Rutger Bregman goes bouldering

“You have the instinct for it,” says Rutger Bregman, as I haul myself up an indoor climbing wall, nestled under the arches at Vauxhall station in London. “Shit, this is some talent!” he bellows, as I reach the top. I am inwardly delighted, even though I realise the praise is absurd: I have climbed about four metres and it’s a beginner’s route.

Bregman has suggested that we go bouldering together. Bouldering is a variety of rock climbing, done over short distances without safety ropes. Coming from Bregman, it seems a curious choice. The young Dutch historian and author is most famous for advocating a universal basic income — a regular cash grant to every single person, given unconditionally, to support them and provide a minimum standard of living, no matter what might go wrong.

His book, Utopia for Realists (UK) (US), has been a surprise bestseller, finding an audience eager for radical yet plausible policy ideas. Yet this celebrated advocate of unconditional handouts has chosen a sport that is all about self-reliance, and the ultimate departure from the principle of the safety net.

“There is a safety net — look!” says Bregman, pointing at the crash mats. I am not totally convinced. It doesn’t take long before I fall off — a combination of lack of skill and lack of fitness. As I peel myself off the mat, I realise the skin of one elbow has not remained with me.

Bregman’s contention is that a basic income would be the logical and perfectly affordable next step for a human race that has already taken huge leaps forward since before the industrial revolution, when, he writes, “nearly everyone, everywhere was still poor, hungry, dirty, afraid, stupid, sick and ugly”.

Bregman himself looks the picture of health, possibly because, at 29, he’s 15 years younger than me, and possibly because he’s been practising. He climbs twice a week; his T-shirt says Sterk, the name of his local bouldering hall in Utrecht. The word means “strong” in Dutch. My limited experience of rock climbing with my daughters has taught me that the legs take the strain. Bouldering, however, requires more upper-body strength.

“It’s more explosive,” I am told. And within 15 minutes, I’m done: the tendons below my wrist have given up and I am close to doing the same. The first three routes were exhilarating but without a rope, even the short climbs under the arches of VauxWall are starting to feel vertiginous. I’m losing my nerve as well as my strength. Bregman, on the other hand, is just getting started.

“How long is a typical session?” I ask. “Fifteen minutes or an hour or . . . I can’t imagine anyone keeping this up for an hour.

“Two, two-and-a-half hours, if I have the time. Which I usually don’t,” he says. “If you warm up slowly, not like today, then you are at your peak after 45 minutes, and then you can keep that up for another 45 minutes.”

I spend much of the next hour watching Bregman solve one route after another. Sometimes he is dangling loosely off an overhang, as though resting in an invisible hammock. Sometimes he is moving laterally, his legs as high as his arms in a spiderlike scurry across the wall. Once, he hangs vertically as he works his way from left to right across a whimsical hold: a huge pair of pouting lips in one corner, just below the roof. He took up the sport three years ago. “I didn’t like to exercise at all. It’s so soul-destroying. But this is different.”

Bregman sees soul-destroying activity in much of modern life. Too many people, he says, are doing jobs they dislike or see as pointless, because they have no alternative. A basic income would liberate people: perhaps a minimum of €1,000 a month, given unconditionally as a cash grant, or through the tax system as a negative income tax.

Bregman has branded a basic income as “venture capital for the people”. A good line, I congratulate him. But what does it mean?

“OK, so basic income is all about the freedom to say no. That’s a privilege for the rich right now. With a basic income, you can say no to a job you don’t want to do. You can say no to a city in which you no longer want to live. You can say no to an employer who harasses you at work . . . that’s what real freedom looks like.”

Part of the impetus for a basic income has come from the sense that the robots are coming for our jobs — maybe not today, maybe not tomorrow, but soon. The venture capital firm Y Combinator is funding research into basic income, which seems to be a popular idea in Silicon Valley. But Bregman has no patience for the idea that technological change underpins the case for basic income.

“This is not about AI,” he insists. “You go back to the 1960s, and all the economists, all the philosophers, all the sociologists said we’re going to be working less and less and less and less and boredom is going to be the great challenge of the future. Didn’t happen . . . mostly because we have this ideological obsession with creating new jobs.”

Advocates of basic income have included two rather different Nobel laureates: the civil rights activist Martin Luther King Jr and the free-market evangelist Milton Friedman. The idea draws support from leftwingers who see an opportunity to redistribute and to give workers more bargaining power, and rightwingers who see an opportunity to dismantle paternalistic bureaucracies and empower ordinary people to make their own choices.

Bregman’s own sympathies seem to lie more with the left. At one point I tease him about the fact that he is in London on Valentine’s Day while his wife Maartje (a photographer and collaborator) is not. His response is spat out with a vehemence that might have been for comic effect, and might not: “You know that Valentine’s Day is just a capitalist scam to make you buy stuff you don’t need, to impress people you don’t like, right?”

But like Friedman, Bregman is clearly no fan of paternalistic bureaucracies. “Nowhere you’ll find as much support for something like basic income as [among] people who work for unemployment agencies,” he says. “In Holland I did a couple of lectures for those groups and they just give me a standing ovation when you say that we should abolish their jobs.”

It is the unconditional nature of the cash transfer that particularly appeals to him. With the transfer of money, no strings attached, there is a transfer of dignity, of bargaining power, and of responsibility. People have to make their own choices.

Again, I venture a connection between the basic income idea and bouldering: it’s a solo sport in which individuals need to find their own path, judging risks for themselves?

“If I would make this sport political, what I like about it is that it is competitive, but with yourself. So you’re not competing with anyone else, you’re just trying to do better yourself. And it’s a puzzle, every time it’s different. It’s a very creative sport, I guess.”

Utopia for Realists was itself a slowly assembled puzzle. The early drafts were articles in De Correspondent, an online crowdfunded news website founded by a Dutch pop-philosopher and columnist, Rob Wiijnberg. “It’s an anarchist-idealist collective of journalists who don’t follow the news,” Bregman explains.

This may explain why Utopia for Realists is such a curiously enjoyable read. The title sums up Bregman’s belief that evidence-based pragmatism should not rule out provocative, ambitious ideas. The book is lively, well researched and full of unlikely pieces of history, from the Speenhamland system of poor relief, developed in England in 1795, to US President Richard Nixon’s flirtation with the idea of a basic income in 1969. (Bregman studied history rather than economics or politics.) It is also perfectly orthogonal to anything one might read in a newspaper. The book was published in Dutch by De Correspondent, built a following slowly, then was self-published in English.

“I was my own PR employee at that point. I was emailing everyone — no interviews, no reviews. Nothing.” Yet when Bregman emailed me out of the blue with the English translation and a request for my support, I was sufficiently impressed to endorse the book. Steven Pinker also gave it a glowing cover quote. And as Bregman and his colleagues were pondering giving up, the project suddenly took off. While not quite Fifty Shades of Grey, in a short space of time Utopia for Realists went from brave failed experiment to international bestseller, due to be published in 28 languages.

“Ideas always start on the fringe and then they move towards the centre,” he says. “Then I was invited to come to Davos this year. Like, yeah, that’s pretty much it, right? My first lectures about basic income were for anarchists with long hair, and smelly.”

Did he go to Davos? “No, I had to go to a book fair in Colombia.” He did, however, give a talk at TED last year, and seems aware of the irony of advocating the dismantling of an entire class of do-gooders.

“You’re talking for an audience of 1,500 people, many of them involved in kinds of charities. The CEO of Toms, for example, was there.” Toms donates a pair of shoes to a poor family for every pair purchased; Bregman isn’t impressed. “Buy one shoe, give one shoe. That is just a horrible, horrible idea.”

He got a huge round of applause when he proposed scrapping aid bureaucracies and replacing them with direct cash transfers. The rapturous reception struck him as odd. “I was saying we should hand over the salaries of all these paternalistic bureaucrats and give them to the poor, who are the real experts on their own lives. And they were all clapping and laughing, and I was thinking on stage, ‘But I’m talking about you! It’s you!’”

It’s a good talk, I tell him. “I like to prepare for these things. I knew it off by heart three months before I went on stage.”

I press him on the details of the talk. He skips a little too lightly between the idea of replacing international development aid with direct cash transfers to poor people, and the idea of overhauling modern western welfare states to place unconditional cash payments at their heart. The two ideas are cousins, not identical twins, I suggest. Adding a dollar a day, no strings attached, to a non-existent social safety net might be transformative in rural India or Africa. A resident of London is going to want a little more than that before she willingly gives up her housing benefit. Bregman agrees: his focus now is on welfare reform.

Another question mark is over the evidence base for a basic income. Bregman mentions “dozens of experiments” but, arguably, there has never been a completely satisfactory randomised trial of a long-term basic income. (A literature review by the charity GiveDirectly counted six shorter-term randomised trials; policymakers should conduct many more.)

One promising episode — a four-year trial in Manitoba, Canada, in the 1970s — received little attention. When the economist Evelyn Forget managed to get hold of the mothballed archives in 2009, they were on the verge of being discarded. There is a new study in Kenya, funded by GiveDirectly. With 5,000 recipients getting a basic income for 12 years, that trial shows real ambition — but the income in question is just over $20 a month. This is unlikely to tell us much about reforming a European welfare state. Nor is a much-hyped but rather small trial in Finland, which will last just two years and is focused only on those already receiving unemployment benefits.

Other trials have been excitedly announced but have yet to begin, let alone conclude. We are still waiting for a study large and patient enough to tell us much about a basic income in a developed economy. So what are these “dozens of experiments”?

Bregman says that the experiments he has in mind are less evaluating a full basic income scheme, and more exploring the impact of cash transfers in development aid. That is indeed a well-studied area, although not quite the same thing. Those experiments provide encouragement for proponents of a basic income: households tend to put the money to good use, and reap long-term benefits.

By now, we’re talking over a coffee, my enfeebled hands thankfully strong enough to grip a mug. My final question is about one of his other ideas: dramatically liberalising immigration rules.

“Every utopian system is obviously grounded in the injustices of the present,” he says. “What’s the biggest injustice in the world right now? It’s pretty easy to see. It’s borders: apartheid on a global scale.”

But while basic income seems to be having a day in the sun, an end to passport control is hardly in tune with the Trumpian zeitgeist, is it? “Well that’s almost my problem with basic income right now. I get questions during lectures, people say, ‘Is this really a radical idea?’ So I’m like, I should move on. Because utopias are meant to make people angry.”

Fair enough: as in bouldering, so in utopian politics. Once you’ve solved one puzzle, it is time to move on to a new challenge.

 

 
Written for and first published in the Financial Times on 9 March 2018.

My book “Messy: How To Be Creative and Resilient in a Tidy-Minded World” is now available in paperback both in the US and the UK – or through your local bookshop.

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