Monday, May 29, 2017

Reality Cheque

The UK's Office for National Statistics has just published a handy guide to the cost of running the kingdom, especially all those 'less-than-self-sufficient' regions outside of London and the South East of England.

It turns out that total public sector expenditure by the British Government in Northern Ireland was £26 billion in 2015/16. Fortunately (for the English taxpayer) a lot of that was then recouped by way of taxation on all those public sector wages etc. So total net public sector expenditure in Northern Ireland was 'just' £10 billion in the same period.

Which provides some useful context to the recent flurry of North-South Delusions about the prospect of a United Ireland post-Brexit.

£10 billion is about €11.5 billion in real money. It's also more than the Republic of Ireland will spend this year on Education, Defence and the Environment combined.  Only Health and Social Protection cost more that the UK Government's net subvention to Northern Ireland.

Now maybe we could afford it if the EU (and remainder of the UK) chipped in a few extra quid/euro to see us through the transition. Though by the time we had 'levelled up' UK social welfare payments to our own rates we might just need more than a few quid...

Would I like to see a United Ireland? Yes I would, and a pity it was ever partitioned in the first place. But that was then, this is now.

Would I be willing to pay a great deal more income tax to fund it? Hmmm. What was the first question again?

Monday, May 22, 2017

Blog Cuttings #6

John Milbank on how populism is essentially the rejection of liberalism:
And here one has to say that the vox populi may intuitively grasp the obvious, even though it has mostly eluded the educated. And this is that the conflict now between an economically liberal right and a culturally liberal left is in many ways a sham. For it is not an accident that the right have been winning the economic war and the left the cultural one. 
In deep reality it is liberalism - the cult of the unrelated, freely-choosing individual - that has been winning both wars in a cunning two-pronged assault of conscious enemies who are secret allies. This triumph involves above all the notion that that there is no common shared sense of the human good; the good is just whatever we happen diversely to prefer. But now the massed expression of a common view about, at least, a local good life is interrupting all this.
It's not the next Hitler we should fear, but the next Caesar.

Or as RR Reno puts it, we are witnessing the return of the strong gods, even as our elites double down on the post-war strategy of disenchantment.

Meanwhile Ben Hunt thinks the West's major political parties are going through a secular bear market (sell you shares now?). Which is one reason why political entrepreneurs are disrupting what are the equivalent of old style media companies: you just need a spare billion or two (or rich backers) to succeed. It's the politics (and economics) of Westworld.

Remind me how that ended?

Monday, May 1, 2017

North South Delusions

"The heart has its reasons, which reason does not know." Blaise Pascal

The list of Cognitive Biases is already very long, but I feel the urge to add another. I call it the 'Reasonable People Bias' which describes arguments based on the presupposition that 'reasonable people agree...' or 'reasonable people believe...' or 'any reasonable person would accept...' followed by whatever point the person wishes to make. The assumption is that everybody in a policy discussion sees the world the same way through logical, reasonable (liberal, agnostic) eyes. Breaking news: they don't.

We see this in the recent flurry of speculation about a United Ireland. It's there in Christopher Kissane's article in today's Irish Times, and in Kevin Meagher's book 'A United Ireland - Why Unification is Inevitable and How it Will Come About'. Both suffer from the Reasonable People Bias which involves the following set up:

- Brexit dooms the UK to turmoil and fragmentation
- Northern Ireland needs to jump into a United Ireland/European Union before it's too late
- The Unionists/Loyalists will see reason when they realise this is the best outcome once proper assurances are in place etc etc

All very reasonable... and all very wrong.

You would think after Brexit and Trump (and close scares in the Netherlands and France) that people might have realised that 'reason' doesn't have quite the same sway it used to have. I pointed this out in the run up to the Brexit referendum, drawing on Scott Adam's model of the Persuasion Stack, which looks like this:

Brexit was a vote driven by Identity. Right now, all the Reasonable People are trying to persuade Unionists at the level of Reason. That's if they're even trying - most of what I hear sounds more like talking over the heads of Unionists.

Now if the monologue/dialogue about a United Ireland continues at the level of Reason then there will only be one of two outcomes: either A) nothing will change (because its a lousy way of persuading people), or B) the people who feel strongest about their Identity will enter the fray and the Reasonable People won't know how to handle them.

Given the depressing group think that seems to perpetually grip Irish mainstream media (wrong on Brexit, wrong on Trump... wrong on a United Ireland?) I suspect we'll end up with option B, and it won't be pretty. But maybe I'm just not being reasonable?

Sunday, March 12, 2017

The Economics of Empathy

"How could they?"

That's most people's reaction to the various reports and allegations about the Bon Secours Mother and Baby Home in Tuam between 1925 and 1961. Hopefully the truth (or as much of it as is possible after such a long period of time) will be revealed in due course.

But back to the question: "how could they?" Some attempts have been made at answers, focusing say on the 'Victorian' social policy ethos that endured in Ireland into the 20th century; while others see it as yet more evidence of a repressive, sexually-obsessed Catholicism that added a uniquely Irish edge to the cruelty inflicted on the young and vulnerable.

No doubt such views will form part of the final explanation (if there ever is one) when the different investigations are completed.

But I wonder will economics form part of the final explanation as well? Ireland wasn't the only country to treat its children cruelly in the past (especially orphans and those of single mothers). The UK's 'Home Children' programme saw more than 100,000 children (often against their will and without the consent of their parents) sent to the 'colonies' right up to the 1970s.  Sweden tried to 'solve' its orphan problem with compulsory sterilisation (to prevent any recurrence) also up to the 1970s. Religion and culture are only partial explanations for the past.

So again, how could they? We look back from our privileged position in a wealthy country with a growing economy and wonder why they did what they did instead of what we would do. But there's the rub: they didn't have the economic resources then that we now have (nor did the British or Swedish for that matter). The nuns and others in Tuam were making appallingly difficult decisions under extremely constrained conditions. At one point as many as five babies and children were dying every week during some of the more virulent infections in Tuam, while the local county council 'supported' the home to the tune of just £1 per week per child.

No doubt such conditions brought out the worst in some of those running the home (and similar institutions throughout the country), while they also brought out the best in others.

Would we have done things differently? Of course we would, or so we think. But what were the real options in Ireland (or Britain or Sweden) in the first half of the 20th century? An unmarried woman who became pregnant back then meant an extra mouth to feed in her family home without the financial support of the child's father (usually), and little or no prospect of her working outside the home (for reasons of stigma certainly, but also because in mainly rural societies there just weren't many such options).

So what were the state's options in response to the real pressures families faced in such situations? The 'affordable' one was to subcontract the care of the children - and sometimes the women - to the religious orders. They were low cost operations (run essentially on voluntary labour: the 'gift economy' preceded the 'gig economy' by some centuries). And so the state did, as it did also with the running of hospitals and schools. Not having colonies was another constraint, of course. The task of caring for the children was essentially outsourced to poorly trained, poorly resourced and poorly managed volunteers; well intentioned for the most part perhaps, though not all evidently, but clearly it wasn't enough.

So would we have done things differently? Faced with the same conditions I'm not so sure we would. Indeed, we still operate under resource constraints: we can't do everything we want to do for those who might benefit from more help, support, expertise or just money. And even when we increase the resources available it's not obvious how to solve the problem - as the ongoing saga of homelessness reminds us on a daily basis. Or hospital waiting lists or the treatment of asylum seekers.

Moreover, in the event of another recession or economic shock (and I'm sure you and I could imagine 2, 3 or 10 such scenarios in the not too distant future), then we might find even our current level of resources put under severe pressure - forcing us to make choices and hard decisions we thought we wouldn't have to make again.

But there's another problem - more resources may not be enough. As Paul Bloom points out in his book 'Against Empathy' (discussed recently on Econtalk), we may have reached the limits of empathy as the basis for settling and solving the social issues and problems that we face. He argues that 'empathy' is cheap (emotionally and even financially), and that what is needed instead is 'rational compassion'. Rather than feeling people's pain (and then moving on), we need to look at their situation compassionately but rationally and figure out the best way to help resolve their situation, if it can be resolved.

As Tuam and other revelations have revealed, the Economics of Empathy is not enough: it wasn't back then and it isn't now.

Thursday, February 2, 2017

It's Complicated

Via the UK Government's white paper on Brexit published today:

Maybe we should do a deal, and get the Germans to leave the eurozone instead? Ambrose agrees with Trump that Germany should stop running an illegal currency racket. Ireland (and Italy and Greece etc) is the mark, in case you're wondering.

Saturday, January 21, 2017

Think Big

From 2004:
"To me it’s very simple: if you’re going to be thinking anyway, you might as well think big. Most people think small because most people are afraid of success, afraid of making decisions, afraid of winning. And that gives people like me a great advantage."
The words of Donald J. Trump, President of the United States of America. Impressive.

The next 8 years are going to be extraordinary. Though not always in a good way. And not necessarily for a small island in the North-East Atlantic.

Time we began to think big too.

Monday, January 16, 2017

Children of the Millennium

Bliss was it in that dawn to be alive,
But to be young was very heaven!
William Wordsworth
That was Wordsworth on the French Revolution, although it's fair to say his ardour diminished somewhat as the blood toll rose. 2016's Brexit & Trump weren't quite the French Revolution (at least not yet), though I'm pretty sure the young aren't feeling the bliss right now.

My article in today's Irish Times.

Saturday, January 7, 2017

News of the Realm

Ben Hunt, channeling Sir Thomas Gresham - the Elizabethan economist - speculates that:
The fiat news business is booming. As a result, the counterfeit news business is booming, too. And if the history of fiat money and counterfeit money is any guide, we ain’t seen nothing yet.
Smartest thing you'll read about fake news ever. And that's the truth.

Meanwhile, on a slightly lighter note, a different kind of headline:

Culture In Which All Truth Is Relative Suddenly Concerned About Fake News
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