Tuesday, December 14, 2010

Tuition Fees: For and Against


OK, so 20 years ago we had a situation where a tiny group of people had their entire higher education costs paid for by the state. These people, ceteris paribus, went on to earn vastly more than people who did not go to university. It was the latter group whose income tax went to pay for the education of the former. It was a massively regressive situation. You had poor people paying rich people so that the rich could get richer.

Over time we have shifted towards a system where more of the costs are paid by the individual who gains most from going to university, both in terms of their future income and in terms of the experience.

Now one could argue that even the poor receive indirect benefits from having a bunch of highly educated people in society, but this objection falls for two reasons: 1) There is no reason to imagine that charging high fees will mean people *won't* go to university, there might be fewer, but the externalities will still be there and 2) The person who benefits most directly, concretely, and straightforwardly is the person receiving the education, so it is only fair that they pay the bulk of the costs.

Now there are a bunch of arguments about community and reciprocity and all that jazz which I am sympathetic to but still don't find terribly persuasive, probably because I have been conditioned within an atomistic liberal individualistic society to believe all the stuff I just wrote outweighs that hippy BS.

Peace out.


1) Although poor people's taxes paying for wealthier people to have free university education is regressive, it is not the only thing the state does. If you look at the welfare state in aggregate is generally redistributive and progressive in that poor people get out more than they pay in and rich people get out less than they pay in. However it is important that rich people get *something* for two reasons:
a) If it is only poor people who gain from something it will become stigmatised, so being a beneficiary of the welfare state will become something to be ashamed of.
b) If rich people perceive the state to be constantly taking away from them and giving nothing in return they will be begin to resent the welfare state. As rich people are generally more politically influential than poor people (because they can fund political parties and are more likely to vote and more often live in marginal constituencies) then this will result in rich people agitating for a smaller welfare state, which will have long term negative effects for poor people, if they succeed (and as rich people are generally better at being organised and have more resources they are quite likely to succeed).

On the other hand if the rich perceive the welfare state to be a community enterprise, with everyone paying in and everyone receiving some kind of benefit, then it will not be considered a "bad thing" to be the recipient of welfare because everyone receives it, and the rich will not resent the welfare state, so the poor won't end up being on the losing side of a class war.

So by subsidising the higher education of the children of the rich you are tying the rich into the system of mutual obligation and support that underpins our political community.

2) Externalities: we want as many people as possible to go to university because it's good in and of itself and because it is good for the economy. More educated people are more skilled, more skilled people earn more money and in so doing create more wealth, which is better for society as a whole, including poor people. Also more better-off skilled workers pay more tax which means more support for poor people through the welfare state and redistributive taxation. More people will go to university if going to university is cheaper. Therefore it should be subsidised. Moreover if more people go to university then it makes more and more sense to pay for it out of general taxation anyway, because the state can more easily bear the burden of cost than the individual.

Friday, December 03, 2010

Why Deborah Orr is Wrong

Making some cuts in national spending is necessary at present because the bond markets, which lend money to countries, tend to see nations unwilling to stop piling up ever larger structural deficits as larger credit risks (because they are), and hike interest rates on their lending accordingly. This is what is actually happening. It is the situation we are in, like it or not. No metaphors are needed to explain it.

Except it isn't the situation we are in, and hasn't been for years. The interest rate the British government has had to pay on its debt has been at record low levels[1] since the financial crisis. This is because investors are more concerned about lacklustre economic growth than they are about the solvency of the British government, which is why they are keen to purchase government debt.

Fiscal discipline really is necessary, unless a nation chooses to default

Putting aside how ridiculous this sounds (having defaulted, a country would presumably find 'fiscal discipline' forced upon them, because nobody would lend to them), it is a perfect example of the tendency Chris Dillow identifies in right-wing polemic: tell a small truth and use that truth to obscure a bigger, and different, truth.

Here the small truth is that fiscal discipline is indeed necessary. But the larger truth is that the options aren't the binary 1) cuts or 2) default. There is spectrum between these and it may be the Coalition government is too close to the 'cuts' end of the spectrum. Perhaps by cutting government spending so aggressively the Coalition is reducing economic growth.

We'll never know, of course. But it is critical to recognise that 'the cuts' are a political choice, not a necessity.

[1]: This was the case even before the Coalition government came to power, and was the case even when the 'spendthrift' Labour government was in power.

Thursday, October 28, 2010

A State Bank

Chris Dillow has been arguing in favour of a state bank. Recently I finished reading "The Truth About Markets" by John Kay, in which Kay describes the fiasco of the development of British Advanced Gas Cooled nuclear reactors.

These reactors were announced in 1965 by the Labour Minister of Power Fred Lee, who promised that we would "hit the jackpot" in exports of AGRs.

The AGRs were sold for £1.9 billion when British Energy was privatised in 1996, along with a promise by the government to underwrite any future clean-up costs. The total cost of developing the AGRs was around £50 billion at 1996 prices.

On the face of it this sort of thing makes it look like it is a bad idea to put the state in charge of allocating investment. Kay's point is more subtle though, he explains that what markets possess and the state does not, and what makes markets such effective wealth creation systems, is the disciplined pluralism of the market.

In the market new ideas are implemented all the time. Most fail. Companies either ditch the bad ideas or go bankrupt. The problem with the AGRs was that the government wanted the electricity industry to speak with "one voice", and the civil servants who made such bad decisions were never properly held to account. There was no plurality of ideas and no discipline when things didn't work.

The problem then is not that necessarily with the state funding things, but rather with the state funding things without its decisions being subject to any kind of disciplined pluralism.

Back to Dillow's point: can it really be so hard for the government to create an independent state bank? It could be run in a similar fashion to the BBC, with an independent income guaranteed from some kind of levy.

As Dillow points out, the future is inherently unknowable. Professional VCs expect only around 1 in 8 of their investments to work out. Small loans made in sufficiently large quantities may generate enough benefits to outweigh the losses.

Tuesday, August 31, 2010

A public service person

It occurs that I probably will never meet Tony Blair in person. I have never seen him. I have never shaken his hand. I have never spoken to him and probably never will.

For all I know Tony Blair could just be a fictional celebrity conjured up out of nothing. All I have to show for him is the few hundred pounds of EMA I received and the few thousand of working family tax credits my family received.

Oh well.

Update 23/09/2010: It occurs this could be read as being sympathetic towards Mister Blair. It isn't intended as such. I believe Mister Blair is a bit of a tit.

Monday, August 30, 2010

Sunglasses and the Burqa

Apropos this, and this, am I the only one who perceives a parallel between burqas and sunglasses?


Both have a "distancing" effect and both are vaguely poserish and both (arguably) have some practical purpose (I agree with Jamie Kenny that there is someting viscerally appealing about being anonymous in public).

Of course sunglasses are only considered religious wear in some Dudeic sects.

I know not how it tastes; though it be dish'd

I left the following comment on this post by Shuggy:

Not sure I agree with this.

1) As you admit, conspiracies occur. We know this because some conspiracies in the past have failed and been revealed. Some have succeeded and been revealed (Iran Contra, for example, was successful, in that some of the goals the conspirators sought to achieve were achieved and everyone involved basically got away with it). Note that 'revelation' is not the only possible failure mode for a conspiracy.

2) I observe that to a large extent society is heavily influenced by a large number of quite powerful organisations composed of individuals of various levels of public profile and accountability. This observation is consistent both with a good-faith interpretation of what the saner wing of the para-political community claim and with any number of entirely rational theories about how the world works.

3) Pace Popper, of course some things 'just happen,' but sometimes things happen because small groups of people secretly and illegally and unethically cause them to happen.

4) One doesn't have to believe the 'conspiracy theory of society' to have entirely legitimate concerns about the role and behaviour of the secret state.

Shorter: to claim that a conspiracy theory is automatically nonsense by virtue of someone describing it as a conspiracy theory is unwise.

Wednesday, August 11, 2010

More economics, and similar

I left the following comment at this post on Falkenblog, which was itself in response to this post by Paul Krugman:

Krugman contemptuously ridicules Paul Ryan's proposed budget because it freezes discretionary spending in the future, as if this modest fiscal restraint is insane. How is this sustainable?

Government can choose one of two options:

1) The government can reduce spending at the same time as households and businesses (which is what Ryan's plan amounts to), resulting in a fall in aggregate demand and concomitant rise in spending due to increased welfare provision and falls in tax revenue due to falls in GDP.


2) The government can borrow to increase spending, thus stimulating demand and increasing GDP, thus increasing tax revenues, allowing the government to service the debt it has incurred.

"In a private company, if you are losing money you cut until revenues meet expenses"

Clearly you have never worked in a high-tech startup.

Many businesses "lose" money for years before they start making profits. They borrow money to invest in future growth, much as the US government can borrow to invest in future growth.

Tuesday, July 27, 2010

Economics, and similar

I left the following two comments on this post my Mario Rizzo, which was commenting on this post by Brad DeLong:

Brad DeLong is ot making an epistemological point, he is simply saying that there are two kinds of people who call themselves economists:

1) Hacks
2) People who study the economy

He does not claim that economists in sense 2) do not create theories to explain economic behaviour, he is simply claiming that there are are a large number of economists in sense 1) who create models containing assumptions that lead to those models leading to conclusions that are conducive to the desires of powerful individuals.


“ot” should be “not”, of course.

And can I confirm, Mario Rienzo, that you think that people who sincerely try to understand things about the world are “pathetic” and of the same order of moral depravity as people who deliberately try to undermine the free and fair discussion of ideas by pushing ideas that favour their own interests whilst knowing these ideas to be wrong?

Go read both posts and tell me what you think.

Friday, June 25, 2010

When in the why and the wherefore is neither rhyme nor reason?

What follows is some comment on an article by Simon Jenkins.

The content of said article is the usual hackworthy guff about how “science” is the new Stalinist religion and how “science” has eaten up so much of the curriculum for itself and how “science” needs to justify the huge amounts of money spent on “science” and why "science" needs to explain why that money should be spent on “science” rather than on the arts or anything else and how scientists only care about money.

Maybe if I was at a dinner party with someone making the various points Jenkins expurgates in his article it would be worth my time laying out exactly why he is wrong. Given that I'm not and I suspect anyone reading this will be smart enough to join the dots themselves I will restrict myself to a general commentary. So here are a few points I think relevant, but I honestly don’t have the energy or inclination to elaborate further:

Education in the disciplines of engineering, physics, chemistry, and biology cost more ceteris paribus than education in the disciplines of English literature, media studies, philosophy, maths, history, and art. This is because in order to learn the scientific subjects properly you need to spend a certain amount of time at a lab bench studying how the universe actually fits together. The bits of the universe you study generally have to be prepared by paid lab technicians and – as well as possibly being costly in and of themselves – often require the interplacement of similarly costly apparatuses to observe and analyse said components of the universe at a finitude of observation greater than that of the human eye.

As it isn’t obvious that education in scientific subjects is in fact less valuable than that in other disciplines – both in terms of the return to society and to the individual to be educated – I see no reason why university physics departments, for example, should be required to justify their greater expense when it is clear that this is a product of the nature of their discipline.

If it were the case that physics was obviously of equal societal and individual utility to (say) English literature then we might be in a position to suggest that maybe fewer people should study physics, as it costs more to no greater reward. The fact that there is a strong argument that physics does in fact have greater societal utility than English literature suggests that maybe the directors of university finances indulge the greater monetary demands of the physics department. [The argument goes like this: economic growth is good for everyone, education is also good for society, but education that leads to economic growth is better, you don’t need to have an English degree to write a bestselling novel (which generates economic growth) but you do need an engineering degree to build a better method for manufacturing microchips (which also generates economic growth].

Then there is Jenkins’ weird obsession with the idea of “science” vs. “arts” or “science is the new religion”. I honestly don’t know how to respond to this nonsense because I don’t perceive “science” to be in competition with “arts”. They are both avenues for expressing what it is to be human, whether that expression is the search for truth without or within a particular human being. It just so happens that the positive economic externalities of science are greater and could not be tapped without a certain level of direct support.

Finally, the reason we fund “blue sky” research in physics, biology, and chemistry, is that we don’t know what may have value until we find it. In studying the universe in all the ways available to us we gain a deeper understanding. And when it comes to science, in terms of Michael MacIntyre’s distinction, we can persue both the goods of excellence and the goods of effectiveness. A deeper understanding of the universe has intrinsic value in and of itself, as well as instrumental value.

Monday, March 29, 2010

Goodbye, apathy

Why exactly should I vote?

I've been turning this question over in my mind over the last few weeks and have come to realise that there is absolutely no reason to do so.

I'll just briefly address each of the usual answers offered as to why I *should* vote.

1) It is in my interests to vote.

Sorry, but this dog just won't hunt. Even if I lived in a marginal constituency (I don't) and even if my vote was "the decider" (and it wouldn't be) and even if my constituency MP was the difference between one or the other of the control parties having a working majority and not having a working majority (unlikely) then the chances that my action would result in a government that is more likely to behave in a fashion conducive to my wellbeing would still be so remote I would more profitably spend the day playing videogames or, you know, *working*.

Furthermore just where does my putative inquisitor get off assuming I'm some kind of greedy dastard who only wants what's in my interests? Perhaps I feel I have a duty to vote for the party I feel best represents the national interest?

2) I have a duty as a citizen to vote.

This is just plain wrong. The only duty I have as a citizen is to obey the law. If voting were to become compulsory I would, of course, vote, because to do otherwise would be breaking the law.

If I feel I have further duties as a *person* then I shall do my best to fulfil them, but I certainly do not believe that choosing not to vote makes me a bad person. Particularly if it is on a point of principle.

But if I am to be morally culpable for something that is considered "bad" then surely *I* must be responsible for my decision? But if the cause is apathy (and in my case, it isn't, but supposing it were) then surely that is the responsibility of politicians for not inculcating in me a desire to engage with the political process by actually voting?

3) I owe it to the shades of all those who fought for the rights of people like me to vote.

This is probably the most interesting, and also the most frequently cited reason for voting. It also raises all sorts of interesting questions about the nature of inter-generational obligations, harms to the dead, and so forth.

I would say that what the various democratic heroes of the past did was to give me the *right* to vote, but not the obligation to do so. Or maybe they didn't think about it like that. Maybe if they knew about me they'd despise me, but that says more about them than it says about me.

So what's to be done?

Now I don't want this post to turn into one of those whiny disquisitions on how politicians aren't "engaging with the youth" - I basically disagree with Sian Anderson's view that politics is presented as too complicated or boring, and that this is what is dissuading young people from voting (and why should this dissuade only *young people* from voting? There are plenty of older folks with low attention-spans and better things to do with their lives).

It is not the case that I'm not interested in politics. I read as many newspapers as I can and generally try to keep up to date on what is happening. And I do occasionally badger my MP about legislation when the mood takes me.

So, given I'm actually fairly turned on to politics, why do I still feel it isn't worth my while voting?

Basically because of each of the following:

1) Government has a lot less ability to affect change than people generally credit them with. Therefore even if my vote *did* have an effect on the makeup of the government it wouldn't make a lot of difference quickly.

2) The two control parties have hit upon a basic raft of positions and policies that are designed to appeal to a narrow, non-ideologically-aligned, section of the electorate who live in marginal constituencies. The "floating voters" or "scorekeepers." As I mentioned above, I'm not one of these, so the government genuinely *doesn't* have any reason to give a damn about me.

3) The areas where I feel government *could* make substantive improvements are in areas like prohibition, immigration, housing, and tax policy. These areas are essentially precluded from discussion by the necessity of pandering to the perceived self-interest of the aforementioned "floaters." I disagree with *both* of the control parties on a number of issues that they just don't have the guts to act reasonably on (viz mephedrone).

And this is what it comes down to. It's not that I don't care. It's that I do care and I care enough to know I'm being ill-served by the current offering.

I appreciate that the Tories are much more vociferous class warriors than Labour and are likely to arrange matters to suit the super-rich, rich, and extremely well-off at the expense of the poor but maybe a bit of Sideshow Bob right wingery is what the public needs right now. And who knows, a few years of a Conservative government may be character forming.

So in conclusion: I might vote, or I might not. But it doesn't matter if I do or don't. And I say this as a fairly politically-engaged yoof. If I really want to make a difference there are plenty of other avenues to do so, and if I really can't be bothered I might as well comp my punt to these guys [via Penny Red], who actually might give a damn.


(A) Incidentally, I have personally done rather well out of the Labour government. Contrary to popular belief they have managed a fairly solid redistribution from rich to poor, especially considering the structural factors (globalisation) they've been fighting against. If it weren't for the bloody stupid wars, stupid policies, and nasty authoritarianism I probably would vote for them.

(B) And, as with every bloody thing, I discover Daniel Davies said it first, said it briefer, and said it better.

(C) As has Alix Mortimer.

Wednesday, February 10, 2010

The grey technocrat

A good name for a blog?

Monday, February 01, 2010

Tell me that somebody stopped the war

An interesting point of clash between Daniel "dsquared" Davies and Chris "Stumbling & Mumbling" Dillow lies in their attitude to Tony Blair and the Iraq War, Chris says:

Those protestors outside the Chilcot enquiry on Friday [...] accuse Blair of lying, as if this is a bad thing. Surely, what matters is the allegation that the war was a bad idea badly executed. This stands or falls independently of the question of Blair’s honesty.
Instead, there seems to be a huge premium upon sincerity; Blair himself exploited this when he famously claimed that he was “a pretty straight kind of guy.”

Daniel Davies, in his classic "One Minute MBA" argues that when a project needs to be lied about in order to get it implemented, that is a fairly strong indicator that the project is a bad one:

Good ideas do not need lots of lies told about them in order to gain public acceptance.

So I'm not sure Chris' point about the overvaluation of sincerity stands. Sincerity is generally valuable in political leaders (perhaps because it is so rare?). So those protesters were accusing Blair of lying, because lying by politicians is a bad thing, and (as Iraq shows) a potentially very destructive thing.

But this raises an interesting question: are there circumstances under which it is *necessary and advisable* for political leaders to tell lies?

I would be inclined to say that there never are. Things can justifiably be kept *secret* because the state is often privy to information that could, if broadcast, breach the individual privacy[1] of private citizens, or cause negative effects like mass panic, or even undermine the efficacy of policy (e.g. interest rate changes), but when it comes to actually broadcasting data that governments know to be false, I can't see any justification that isn't based around the interests of the individuals that make up states and governments, rather than the interests of society as a whole.

So pointing out that Blair lied[2] is in fact very relevant to the allegation that the war was a bad idea badly executed.

[1]: I would say the state as an entity should have no right to privacy, as it is not a person.

[2]: On which subject, Davies notes that:

"the difference between "making a definite single false claim with provable intent to deceive" and "creating a very false impression and allowing it to remain without correcting it" is not one that you should rely upon to keep you out of jail."

Monday, January 04, 2010

If I were PM...

...I would cease all government activity for the entirety of my first term. No legislation should be produced, and MPs should return to their constituencies and concentrate on casework.

The results of this would be that any major issues in the way the state operates would be highlighted and after five years of non-interference from central government it would be possible to clearly identify what the *actual* problems are as opposed to the problems caused as an inevitable side-effect of managerialist power politics.

It would also mean the media would suddenly have nothing to talk about. This could have two positive effects on different areas of the media:

a. Tabloids could do away with all the boring bits and shift their *entire* output to celebrity gossip.

b. Broadsheets might be persuaded to concentrate on more important questions than who is up or down in the Westminster bubble. The self-consciously serious could spend the entire five years in argument about what is really important to do at the end of the five years.

Further if there are any major economic crises during this period the absence of a centralised government to coordinate a response would serve as a demonstration to vulgar libertarians that having a government is sometimes quite a good idea.

Friday, January 01, 2010

Low-rent shitheads

There's no other way to say it: Barack Obama, a once-in-a-generation political talent whose graceful conquest of America's racial dragons en route to the White House inspired the entire world, has for some reason allowed his presidency to be hijacked by sniveling, low-rent shitheads.

Read, as they say, the whole thing.