Bonuses for MPs

But how do we attract abler MPs? Pay them less and reduce their perks is Cameron's answer – I can't wait until he gets his hands on Afghanistan. Steve Punt did a bit of salary research for Radio 4's The Now Show and takes a different view: "Another way of looking at it is that they do a rather thankless and time-consuming job under relentless public criticism and yet they're paid less than the head of estate capacity procurement at the Ministry of Justice or the head of consumer services at Calderdale Council."

The problem, as David Mitchell points out, is not that MPs are exceptionally greedy, or even exceptionally stupid, it is that they are incentivised to appear frugal when they have no desire (and who would?) to engage in frugality.

So: a solution? Performance-linked bonuses. This would mean that how much an MP is paid is reflected in how well that MP is seen to do their job by their constituents.

So: pay MPs a base salary of something somewhat less than they are paid now (say: £50 000/year) then pay them a bonus on top of that.

The bonus is determined by the electorate. So if a voter thinks an MP has done a good job then they can tick the box saying "I wish to contribute £20 to the incumbent's bonus."

If the MP had done a really good job and 15000 of their constituents ticked the box then they'd get a payout of £300 000 on top of their £50 000 salary. This would work out to a salary of around £110 000/year.

One of the good things about this system is it would allow people like me to express personal support for our MP, despite the fact I would never consider voting for his party. It also means that MPs wouldn't have to be childless millionaires in order to get by.

This brilliant idea of performance-linked bonuses for MPs brilliant idea (c) the inestimable Daniel Davies

Update: thanks to @PaulGrahamRaven for this video of Dan Pink talking at TED on why financial incentivisation might actually harm and disrupt creative faculties.

In the speech Pink argues that the kind of non-mechanistic, creative industries of the 21st century will actually suffer under a traditional Taylorist regime of incentivisation. Pink highlights results of the candle-problem as evidence that the prospects of true creativity and innovation are damaged by gross financial incentive.

People, Pink argues, respond better when they are given autonomy: freedom to persue our own projects in our own time and in our own way.

It's a good point.

The question to ask then is: what kind of work are MPs supposed to be doing? Are they performing the (relatively) mechanistic tasks that a good constituency MP is supposed to be doing, like sorting out parking tickets, solving planning issues, and trying to help their constituents with their problems?

Or are MPs supposed to be doing the more abstract, creative job of crafting excellent pieces of legislation?

Considering how royally (no pun intended) screwed-up our political system is the effect (either positive or negative) of any kind of incentive structure would not show up against the huge systemic institutional failure of the safe-seats/marginal-constituency problem.

Dan Pink identifies what is wrong with managerialism in much the same way as Dillow does, with recourse to scientific fact, and offers much the same solutions: more freedom, less hierarchy, no meaningless targets and greater worker power.

Managerialists believe in hierarchy and manipulating symbols, they believe that people must be coralled and controlled and inventivised to work well and be productive.

The truth, as Dan Pink describes, is that people work better when they are simply given a task that they believe is important, and are given as much freedom to persue it as possible.

MPs obviously know what they do is important, so this is an argument for greater independence amongst MPs from the party machine, a weakening of the parliamentary whips, and a rebalancing of power away from the Crown towards parliament, and more independently-minded MPs in general.

The Accidental Pornographer: not actually a review

A brief summary of lessons learned from The Accidental Pornographer:

1. Do not fall in love with the concept before you have scoped out opportunities for expansion. Griffiths discovers that the potential market for his product is smaller than he assumed only after he is well into it.
   
2. Do not get hypnotised by the prestige of others. Griffiths uses M&C Saatchi for marketing, despite their high-cost.
   
3. In planning your cash-flow always bear in mind the worst case scenario.
   

I've actually met the author, Gavin Griffiths, though I didn't know who he was at the time. I was working in our local branch of WH Smith and he came in to ask if we had this book in stock, as he had written it and wanted to know if it had hit the shelves yet.

My fleeting impression of him was of an earnest and unobjectionable individual. This is reinforced by his book and his blog.

The book is recommended for much the same reasons as Paul Carr's book Bringing Nothing to the Party. It is story of business failure, though neither Carr or Griffiths fail completely.

And you learn more from failure than you learn from success. Karl Popper teaches us this.

On The Origin of Wealth

After a brief hiatus I have started reading this book again. Everything Taleb has written, sans the epistemic philosophy and general snark, can be seen as a subset of this book.

As I read Beinhocker is discussing how the observation that businesses evolve in the marketplace can be applied to practical strategy. He makes the point that for the most part conventional strategy and long-term planning is futile in the face of the complex non-linearities of the marketplace.

Beinhocker grounds his descriptions of economic activity in modern physics itself, rather than attempting to ape physics as many early economists (like Jevons and Walras) did.

Beinhocker defines wealth as useful order. And order is information, and useful information is knowledge. So knowledge is wealth.

Beinhocker says that value is created by:

• Irreversible actions
• Local reductions of entropy and
• Fitness

Fitness is determined by an evolutionary process, the free market, which can be thought of as a knowledge-generating machine.

Beinhocker advocates ideas similar to Alex Harrowell of the Yorkshire Ranter (who I suspect is familiar with the book), stating that we need to build institutions that evolve more effectively.

This sentiment runs counter to many traditional conceptions of Big Man, top down, authoritarianism. Politicians are praised for ignoring evidence and not adapting to circumstances.

The scientific method and free markets work so well because they lead to the creation of a large number of ideas and then subject each idea to testing, selecting the most successful ones, replicating and recombining these successful ideas, then repeating the whole process continuously.

The outcome is a an increase in knowledge, and hence wealth.

Mystic double D

Reading a post on D-squared by David Davies is amazingly prophetic:

This is the doctrine of the "wealth effect", and if you can dig up a few factoids and linear regressions to illustrate it and avoid using the word "shit", you can make a quite decent living as a pundit by repeating the paragraph above. On the other hand, if you had been placing bets on a US double-dip recession so far, you'd have lost them, because Alan Greenspan and his merry gang at the Fed have a solution to this problem. Basically, the solution's pretty simple and it involves screwing interest rates down to the floor until mortgage rates follow them down to Low Low Prices levels, and pointing out to the Great American Consumer that it's "Bye-Bye, Magic Stock Market Bubble Money!" but "Hello, Magic Housing Market Bubble Money!". Marvellous.

This is pretty impressive.

Blessed are the engineers

For a long time I've been struggling to articulate something that ought to have been obvious to me all along.

I am not an engineer.

I respect engineers. A key component of human existence is concerned with shaping matter and the physical world in ways that suit our purposes. As the arbiters of this process engineers, inventors, hackers, and designers are owed a special place in our collective consciousness. It is sad that (in the UK at least) they are not afforded the level of respect of lawyers, doctors, accountants, teachers, and even businessmen.

I am fascinated by engineering, but it is a vicarious fascination. I would rather bask in the warm glow of effective, efficient design than actually attempt to design anything myself.

So where do my interests and proclivities lie?

I have always had a hunger for understanding, knowledge too, but specifically comprehension of the world and the way it works.

So what route am I to take in order to sate my thirst for understanding?

In the somewhat crude terms of conventional academic subjects my search will probably take me through some basic science, psychology, economics, politics, and philosophy.

Because computers are are key component of the universe I occupy some appreciation for them and their functioning must also be taken into account.

These are all areas I am interested in - but how will I go about the task of comprehension?

There is another element, beyond merely identifying academic subjects, that I believe to be necessary to attaining a comprehension of the world and how it works. In fact two elements.

Time and money.

10, 000 hours

I am obsessed with talent, intelligence, achievement, and success.

Not, you must understand, in the sense that I am talented, or that I strive daily to succeed, but rather in the sense that I am obsessed with the lives, opinions, and achievements of those who are talented, intelligent, and successful.

I'm a sucker for books like How to Get Rich by Felix Dennis; I love reading the entrepreneur profiles in The FT; I know the top ten of the Sunday Times Rich List off by heart.

I am, in fact, a wealth nerd. I have an unhealthy obsession with the rich and filthy rich.


This isn't an aspect of my personality I'm particularly proud of - but it's there and it isn't going away.

In a broader sense I am interested in those who are successful in all areas, like science fiction writing or economics.

But my main concern is money: what is it about these people that allows them to acquire so much more of the stuff than everyone else?

Malcolm Gladwell's latest book Outliers: The Story of Success sets out to answer that question. I enjoyed Gladwell's previous book, Blink: The Power of Thinking without Thinking; but I did feel that it felt more like a collection of essays with a common theme than a cohesive argument (viz people analyse facts and make decisions very, very quickly - in the blink of an eye).

The Guardian has published an excerpt from Outliers that I advise you all go and read:

What we think of as talent is actually a complicated combination of ability, opportunity and utterly arbitrary advantage.

...

(((of a study by K Anders Ericsson of three groups of violin students)))

By the age of 20, the elite performers had all totalled 10,000 hours of practice over the course of their lives. The merely good students had totalled, by contrast, 8,000 hours, and the future music teachers just over 4,000 hours.

The curious thing about Ericsson's study is that he and his colleagues couldn't find any "naturals" - musicians who could float effortlessly to the top while practising a fraction of the time that their peers did. Nor could they find "grinds", people who worked harder than everyone else and yet just didn't have what it takes to break into the top ranks.

Their research suggested that once you have enough ability to get into a top music school, the thing that distinguishes one performer from another is how hard he or she works. That's it. What's more, the people at the very top don't just work much harder than everyone else. They work much, much harder.

This, to me, is an interesting and crucial observation. Gladwell isn't necessarily saying "everyone can do it" but rather only those capable (either by genetic predisposition, the manner in which they are raised, or the circumstances of their lives) of practicing the requisite 10, 000 hours in order to become an expert.

I look forward to reading the complete book, and of finding out if this is a universal component of success.

One of my bugbears is my mathematical ability. I have several friends who are simply better that I at maths (solving differential equations, set theory, number theory, discrete maths, integral equations, geometry etc).

However if I were to spend 10, 000 hours doing differential equations would I becomean expert? Probably. Would I ever achieve the intuitive brilliance of Newton or Einstein?

I doubt it.

Polly Toynbee's new book: "Unjust Rewards"

I've taken to reading newspapers so obsessively I sometimes have difficulty remembering that most of what is written in them is self-indulgent wank of a magnitude equaled only by my own bloviations.

In that spirit...

The area of political discussion in which I feel most conflicted is that of the distribution of wealth.

Polly Toynbee published a book today called Unjust Rewards. An excerpt from the book can be read here and another article discussing the same ideas can be read here.

History, many like to believe, is a Whiggish tale of wealth, social progress and fairer distribution, an onward march: we all wear the same clothes, meet on equal terms on Facebook.

[[[In terms of social deference, we are certainly more equal now.]]]

Yet background predicts who will run the banks and who will clean their floors. It's not happenstance; it is largely pre-programmed.

[[[This is an issue of education and social policy, rather than how much banks pay their employees.]]]

General mobility is a myth. The top 10% of income earners get 27.3% of the cake, while the bottom 10% get just 2.6%.

[[[The solution then, would be to work towards equality of opportunity.]]]

Twenty years ago the average chief executive of a FTSE 100 company earned 17 times the average employee's pay; now it is more than 75 times.

Toynbee uses a very specific line of attack. Rather than suggest that self-made entrepreneurs like Richard Branson, Felix Dennis, or Alan Sugar should pay up she is attacking "fat cat" directors, wealthy lawyers, and bonus-acquiring bankers:

High-earners tend to be elusive, preserving their privacy at home and at work, journeying between them in expensive cars.

[[[Nice lifestyle.]]]

But in sessions conducted by Ipsos Mori over two evenings we did meet partners in a law firm of international renown and senior staff from equally world-famous merchant banks.

Their business is money, and they make it: the law partners earned between £500,000 and £1.5m per year, putting them in the top 0.1% of earners in the UK, while the merchant bankers ranged from £150,000 up to £10m.

[[[Good money if you can get it then.]]]

Toynbee is suggesting it is unfair that people should earn these amounts of money. She demonstrates that they are both ignorant of the plight of the poor, but are still highly opinionated on social policy:

How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000.

In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that.

As for the poverty threshold, our lawyers and bankers fixed it at £22,000. But that sum was just under median earnings, which meant they regarded ordinary wages as poverty pay.

[[[Ignorance is no excuse for anything.]]]

...

Once our conversation turned to tax, the high-earners' arguments against rebalancing the system ranged from threat to bluster to attack.

Response one: we will leave, and you will be poorer. Or: we don't deserve to be forced to pay more. Or: even if we were taxed more, the money would all be wasted.

[[[Well these are fair points. Still, I reckon it would still be fairer if people paid a little more on earnings over, say, £100, 000]]]
...

Masters of the universe our groups might be, but their outlook was pure Daily Mail: "Single people . . . get pregnant and get a flat and more money. You just see everybody pushing prams, then they'll get more income and a little flat that they can stay in for life."

[[[Which only demonstrates that stupidity and ignorance is no barrier to success, which is reassuring.]]]

There was much talk of the perverse incentives for single parenthood, with one banker complaining that the 18-year-old mother on benefits "doesn't get that much less money than another 18-year-old working in a shop". It didn't seem to occur to this speaker that the shop worker's pay might also be too low.

[[[Well OK. But his basic point that there is a perverse incentive to state-dependence remains.]]]

They were contemptuous of anything that gave extra money directly to poorer people: "This thing of giving pregnant women £200 for dietary supplements. Like, as if they'll really spend it on fruit."

[[[Chocolates and crisps and cola and donuts.]]]

Most were adamant, along with this banker: "We don't think just chucking money at the welfare state is the answer."

From what I can gather this is a polemical rant, on Toynbee's part, rather than a constructive attempt to actually work things out.

I think on balance I dislike Toynbee's hectoring self-importance more than the ignorance and prejudice of the wealthy.

Superclass and the New Elite

I've mentioned my obsession with the ultra-wealthy before. Reading David J. Rothkopf's The Superclass: The Global Power Elite and the World They Are Making today I was stuck by the utterly unoriginal insight that it might not be that much fun being an elite.

Rothkopf punctures a lot of the usual paranoid beliefs about a mysterious global elite - he observes that conspiracy theories are almost always psychologically comforting fictions: it is disturbing to think that one man, working alone, can assassinate a president.

This fact suggests a random and capricious universe. Much better to imagine that bad things that happen are the result of organised conspiracy.

However I do feel that it isn't really worth being a member of any kind of global elite.

The symbol of the global elite

Constant pressures on your time; scrutiny from the press, your peers, and governments; concerns over kidnapping, and the happiness of your friends and family would probably nullify most of the advantages of being extremely wealthy and/or powerful.

No, not for me famous, multi-billionaire status. Give me £30 million and obscurity, reputably and happily earned, and I will be satisfied.

Finkelstein

For several months now I have been trying to put my finger on exactly what about Polly Toynbee's attitude towards high-pay for bankers and CEOs I find so distasteful.

Her argument is that it is morally incorrect for footballers, directors, and bankers to be paid quantities of money so much greater than other people, whilst these "other people" include many who experience poverty.

Daniel Finkelstein wrote in a recent article:

"...what all these people have missed is that wages are not a statement about status or a measurement of moral worth. They are a price for a service..."

He makes the point that if you personally disapprove of how much someone is paid then you do not pay for their services.

In the case of footballers' salaries you do this by not purchasing Sky, watching ITV, attending matches or buying club merchandise.

In other words the market, through the invisible hands of supply and demand, will decide the salary of each person based on the demand for the services that person can provide.

Toynbee would rejoin that markets are prone to failures and that the massive bonuses for company directors are an example of this. The directors can influence how large their salaries are and each year the amounts paid increase, as the directors decide they'd like more and more money for their troubles.

In the case of large public companies shareholders would presumably take action against any directors that paid themselves too much. It is the shareholder's prerogative to ensure the director is providing a good service for a fair price.

I prefer the materialistic logic behind Finkelstein's argument to the self-righteous moralising behind Toynbee's.

The problem with Toynbee's arguments is that her methods and goals always seem to require greater state-intervention. I don't believe "the free market" is any better than the state at deciding who gets paid what, but I respect the point that things are the way they are because our current system sort-of-works.

And our economy is still growing and the world is becoming a more pleasant place to live.

Providence and Black Swans

This article from The Guardian mentions Felix Dennis’ book How to Get Rich. At some point in HtGR Dennis quotes Goethe (according to some website I looked at, this quote may not be attributable to Goethe):

Until one is committed, there is hesitancy, the chance to draw back. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one's favour all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now.

This is similar to the “Black Swan Theory” explored by Nassim Nicholas Taleb, who also contributes to Edge.org here. Taleb argues that random and utterly unexpected and unexpectable events like 9/11 are occurring with greater frequency because their frequency, number, and effect are amplified by the networked and highly technological world we now live in. From Edge:

Against what one might expect, this makes me extremely optimistic about the future in several selective research-oriented domains, those in which there is an asymmetry in outcomes favouring the positive over the negative — like evolution. These domains thrive on randomness. The higher the uncertainty in such environments, the rosier the future — since we only select what works and discard the rest. With unplanned discoveries, you pick what's best; as with a financial option, you do not have any obligation to take what you do not like. Rigorous reasoning applies less to the planning than to the selection of what works. I also call these discoveries positive "Black Swans": you can't predict them but you know where they can come from and you know how they will affect you. My optimism in these domains comes from both the continuous increase in the rate of trial and error and the increase in uncertainty and general unpredictability.

I am convinced that the future of America is rosier than people claim — I've been hearing about its imminent decline ever since I started reading. Take the following puzzle. Whenever you hear or read a snotty European presenting his stereotypes about Americans, he will often describe them as "uncultured", "unintellectual" and "poor in math" because, unlike his peers, they are not into equation drills and the constructions middlebrows people call "high culture". Yet the person making these statements will be likely to be addicted to his Ipod, wearing t-shirts and blue jeans, and using Microsoft Word to jot down his "cultural" statements on his (Intel) PC, with some Google searches on the Internet here and there interrupting his composition. Well, it so happened that the U.S. is currently far, far more tinkering an environment than that of these nations of museum goers and equation solvers — in spite of the perceived weakness of the educational system, which allows the bottom-up uncertainty-driven trial-and-error system to govern it, whether in technology or in business.

It fosters entrepreneurs and creators, not exam takers, bureaucrats or, worse, deluded economists. So the perceived weakness of the American pupil in conventional and theoretical studies is where it very strength lies — it produces "doers", Black Swan hunting, dream-chasing entrepreneurs, or others with a tolerance for risk-taking which attracts aggressive tinkering foreigners. And globalization allowed the U.S. to specialize in the creative aspect of things, the risk-taking production of concepts and ideas, that is, the scalable and fat-tailed part of the products, and, increasingly, by exporting jobs, separate the less scalable and more linear components and assign them to someone in more mathematical and "cultural" states happy to be paid by the hour and work on other people's ideas. (I hold, against the current Adam Smith-style discourse in economics, that the American undirected free-enterprise works because it aggressively allows to capture the randomness of the environment — "cheap options"— not much because of competition and certainly less because of material incentives. Neither the followers of Adam Smith, nor to some extent, those of Karl Marx, seem to be conscious about the role of wild randomness. They are too bathed in enlightenment-style causation and cannot separate skills and payoffs.)

I like this point of view. I have great plans for the future, but I they aren’t currently too specific. Obviously I’ll need to write up a sober business plan, but as long as I keep my wits about me I should be able to spot potential Black Swans when they occur. Felix Dennis mentions “the search” in his book. This corresponds, I suppose, to the time when you try to sensitise yourself to BSE (lol) and leap in when you find something useful. This must also be the reason that large corporations and governments engage in “blue sky research”, and Google employees dedicate 1/5 of their time to personal projects.

All the while institutional science is largely driven by causal certainties, or the illusion of the ability to grasp these certainties; stochastic tinkering does not have easy acceptance. Yet we are increasingly learning to practice it without knowing — thanks to overconfident entrepreneurs, naive investors, greedy investment bankers, and aggressive venture capitalists brought together by the free-market system. I am also optimistic that the academy is losing its power and ability to put knowledge in straightjackets and more out-of-the-box knowledge will be generated Wiki-style. But what I am saying is not totally new. Accepting that technological improvement is an undirected (and unpredictable) stochastic process was the agenda of an almost unknown branch of Hellenic medicine in the second century Mediterranean Near East called the "empirics". Its best known practitioners were Menodotus of Nicomedia and my hero of heroes Sextus Empiricus. They advocated theory-free opinion-free trial-and-error, literally stochastic medicine. Their voices were drowned by the theoretically driven Galenic, and later Arab-Aristotelian medicine that prevailed until recently.

This idea applies to so many other technological domains. The only bad news is that we can't really tell where the good news is going to be about, except that we can locate it in specific locations, those with a high number of trials. More tinkering equals more Black Swans. Go look for the tinkerers.

I like the idea of opinion-free science. It also strikes me that from an investment point of view, I wonder if taking a million dollars and investing in a thousand companies would be better than simply investing in one company. If you had even one Microsoft to start off with, and a few 3663’s and other success-stories, would you achieve greater growth in wealth than if you invested in an ISA account?

A Materialist Viewpoint

I sometimes think it would be nice to strip away all the ideologies, the seemingly solid sets of mutually contradictory arguments that people latch onto because they provide a framework with which they can define themselves, and a group that they can ally themselves with.

It would be nice if we looked at things from as objective a viewpoint as possible. It is lazy to say that people can never be objective. However it is difficult to be objective, so on this occasion I won’t even try to be objective, but I will try to be sensible.

Call it the materialist viewpoint.

There are six and a half billion people in this world. Each individual is made of carbon, oxygen, hydrogen, nitrogen and several other elements. And yet each one is more intricate and wonderful than any of the other things we can see in the universe.

The human brain is the most complex object we have yet discovered. If any one of us were given the choice between meeting Aristotle, Newton, or Shakespeare, and the opportunity to explore an entire lifeless galaxy, it is likely we would choose one of the three human beings over the galaxy.

Of these six and a half billion people many do not have the luxury of being able to consider matters of ethics, philosophy, mathematics, science, art, or culture. They live lives that we would consider to be nasty, brutish, and short.

This simply isn’t acceptable. A recent psychological survey I read claimed people were more ready to feel emotionally about the plight of individuals, rather than simply being told that a certain number of thousands of people had died for whatever reason.

This lack of emotion concerning the many people currently living in poverty may go some way to explaining why something hasn’t been done.

Some claim that western capitalist countries have influenced the global free market, through the IMF and World Bank, in order to protect their own prosperity over that of poorer countries.

I don’t know enough about economics to be able to give an opinion on this. If asked, I would say I enjoy the privilege of living in a liberal western democracy, and I would certainly agree that the state of the state I find myself living in is pretty good and I would agree that it is desirable that this state of affairs continues.

I would have expected, if it were not that I have learnt a little about human nature since I was born, that some system would be devised that would distribute the vast wealth of humanity; including all our knowledge, the resources of the Earth, and our own minds and skills, as widely as possible.

I am given to understand that inequality is rising in the developed world, and is already rampant on a global scale, and has been for centuries. That a few should have proportionally more than the many is a fact that I find very difficult to be angry about. Perhaps a few of those wealthy people did something truly useful that means they earned their fortune, many of them seem to give charitably, if perhaps not as much as I’d like them to.

But the problem is not with a few rich people. The problem is that there are a vast number of people who don’t even enjoy the standard of living I enjoy, with access to reasonable healthcare that I don’t have to pay for immediately, with effective public transport, free education, and a welfare safety net. I am also given the opportunity to do pretty much anything I’m capable of.

I am not advocating a socialist world government. The necessary extent and power of such an institution would invite corruption and mishandling. Applying democracy on a global scale, even with extensive federalisation, would be difficult. With so many diverse concerns and competing interests, no single person could reasonably be elected to a “world senate”, let alone a world presidency.

I am not especially libertarian in outlook. If you read this document closely you will notice that I mention that I consider my political views to be “liberal socialist secular humanist democratic”, roughly in that order of precedence. But again, it is necessary to put aside these tribalistic labels we apply to ourselves and simply consider the basic conditions of humanity.

I dislike pain and hunger; both of the physical, emotional, and mental variety (although I haven’t actually experienced anything I’d describe as mental pain, I suppose mental hunger would be an unsated sense of curiosity). I can model my own behaviour well enough to consider myself, as an entity. I can also model the universe around me and the people within that universe. I can project my own feelings of pain and hunger onto my model of another individual. This allows me to empathise with people.

I find it disagreeable that there are so many people experiencing pain and hunger, and that there does not seem to be any fundamental reason. There is no physical law that prevents everyone from having the chance to lead a long, healthy, and happy life. I also find it disagreeable that all those billions of unhappy people exist in my conscious as only a vague blur. I can’t really identify with any number of people over about three or four at any one time. Beyond that I use abstract tricks to deal with the immensity. Orders of magnitude and logarithms and so on, but you can’t apply a logarithm to human suffering.

It is clear that Something Needs to be Done. I'm not yet sure what It is. I suspect I will know It when I see It. It may be a slightly different way of running the global economy. It might be an invention. It might just be a way of looking at the world. Perhaps the trick is to simply allow things to carry on as they are, but constantly keep nudging events towards more favourable outcomes. It will probably take quite a long time, but I suspect we will get there eventually.

Is Personal Wealth a Good Thing?

Here are a few things that have been on my mind for the past few days. At the moment I’m re-reading Learning the World by Ken MacLeod. It is superbly written, and assumes a degree of (admittedly fragile) civility in the (post-)humans of the future, in stark contrast to Stephen Baxter’s peculiarly pessimistic view of the future (Baxter disregards all possible human enhancement, and instead concentrates on natural human evolution, which has ceased to be a major factor in the future of humanity).

In the futuristic society MacLeod envisions in LtW humanity has spread out from the solar system and colonised several star systems. The method of colonisation involves launching vast generation ships (with indefinite longevity all of the original inhabitants survive to see the end of the trip. Once the ship arrives in a new system the youthful “ship generation” disassemble the asteroids, moons and minor planets and build a vast green sphere of space habitats around the new star. The original ship, divorced of its engines, turns into one of many habitats and the engines themselves are outfitted with raw materials, and become part of the first of many more ships to travel out to the next system to repeat the process.

Over the course of the journey, as more information about the destination system comes to light, there is much (monetary) speculation over the destinations system, with “resource futures” divvied up between members of the crew and passengers. MacLeod has explored the idea of an anarcho-capitalist society and the idea of an anarcho-socialist society in his previous (and excellent) Fall Revolution sequence.

All this has got me thinking about the nature of capitalism, the distribution of wealth, and the future of a posthuman humanity.

At the moment, in Britain and the USA there is a trend towards greater disparity in wealth, average incomes for the top 1% of the population in terms of wealth are increasing, whereas average incomes for the bottom 50% are remaining more or less static. Upper-middle-class people, who would be considered “well off” in another era now believe that they are “poorer” than they actually are. This is because of a combination of factors, including the greater visibility of the rich and their lavish lifestyles. This phenomenon is explored in depth in Stewart Lansley’s excellent book Rich Britain.

This book raises an interesting ethical question: is it fair (and is it just) that some can have so much and some can have so (comparatively) little?

From what I have absorbed on the subject there seem to be two broad schools of thought on the subject:

1. People who believe that enormous individual wealth is good. These people argue that individuals who possess great wealth have grown assets (e.g. property, land, a business), worked hard, taken risks and deserve their wealth. People who believe this argue that these wealthy individuals pay enormous amounts of tax money (more than other individuals on more modest incomes pay over a lifetime), and also create employment in their businesses and in the services and products they consume. This is an opinion shared by Winwood Reade (see elsewhere in this text).
2. People who believe that great personal wealth can only exist at the expense of other individuals. These people believe that the owners of capital are given too many advantages, way out of proportion to their actual contribution to society. People who believe this argue that the uber-rich can afford tax-havens and accountants who can hide their wealth and ensure that the uber-wealthy can pay as much, or as little, tax as they want.

My own opinions lie somewhere between these two extremes (although slightly closer to the first school of thought than the second – incidentally, check out The Political Compass for a much more rational description of how [relative] political views should be talked about, in contrast to the traditional left/right image), I believe that individuals should be given as many freedoms as possible, and that these freedoms should extend to things like access to top-quality education, healthcare and biological self-determination (see democratic transhumanism for what I mean by that last point).

I agree with Warren Buffett that inherited wealth is generally a bad thing (here engineered indefinite longevity would solve problems – if individuals never expect to die, they would have no desire to pass on their wealth to their offspring), but I believe the competitive and entrepreneurial spirit has done a great deal of good for humanity as a whole.

One of the more controversial aspects of the new breed of super wealthy has been highlighted by the recent record-high bonuses paid to bankers and financiers. I think that those who gain the most wealth should be the people who create the most wealth – the people for whom the platitudes of the first school of thought apply. I would probably include Andrew Carnegie, Thomas Edison, George Westinghouse, and Howard Hughes (only because I have a soft spot for Howard Hughes – he was probably a most objectionable individual). In the process of making their fortunes, these individuals improved the lives of many other people, either through philanthropy (Philanthropist: a rich (and usually bald) old gentleman who has trained himself to grin while his conscience is picking his pocket – Ambrose Pierce The Devil’s Dictionary), or improvements in the standards of living brought about by their industrial actions.

However there are bankers and usurers who don’t so much create wealth as rearrange it, mostly so that it ends up in their pockets. I’m thinking of Carl Icahn, Mike Milken, and Phillip Green amongst others.

This trend of the rich getting richer and the middle-incomers staying the same without any detectable improvements brought about by the new super-rich may one day backfire, with greater controls put on the recently liberalised financial markets.

Also, I think the most essential question does not concern relative wealth in wealthy countries, but relative wealth between countries. Is it an immutable fact of life that there will always, somewhere, be poor people who must suffer in order for others to lead comfortable lives? Is the fact that there are a few uber-wealthy individuals a cause of the problems faced by poor countries?

I don’t think it is a fact of life. I believe that one day we will be able to arrange the matter of this Earth and this solar system is such a way that it can provide for each and every one of us a lifestyle that Bill Gates or George Soros could not buy today.

However until that time we are forced into considering whether a more authoritarian socialist-style redistribution of wealth might not be better for the time being.

Unfortunately “from each according to his ability to each according to his needs” simply doesn’t work without an unacceptably powerful (and inevitably corrupt) state, and even when it is created it means that no one has any great need to excel, except for the empty promises of corrupt governments.

What about social democracy? I suspect that Tony Blair’s third way is a reasonably compromise between social justice and individual liberties. Aside from the Really Bad Idea Tony Blair has been a good premier, and has overseen one of the largest redistributions of wealth in history via the family tax credit system.

I think the middle class consensus of greater consumerism and aspiration that allowed the “third way” to work has broadly been a Good Thing, with the obvious (MASSIVE) problem of third-world poverty as the price-tag for cheap(-ish) designer clothes and nice coffee.

Now that I’ve got that out of the way I need to consider more personal things: I know that as an individual I can have very little influence on global affairs. I know it will make little difference if I recycle, or vote for a particular political party, or write a letter to my MP. I will do all of those things at one time or another, and will do so more out of principle than anything else.

However. Is it not my duty as a responsible citizen to extend my influence as wide and as high as I am capable and in doing so enact the changes I believe need to be undertaken? I’m not sure.

There is a difference between being faced with the abstract reality of a few wealthy people vs. the down-to-earth grinding poverty much of humanity is forced to live in and actually being offered the choice of wealth or power. Power corrupts. Good advice, so is the answer to water down power (through democracy) until its debilitating effect is destroyed?

What I’m trying to say is this: I am in a very fortunate position as a young, healthy, male in a progressive Western democracy. There are problems in the world that I feel I can have no effect on as an individual at the moment. I believe that I can amplify my positive effects through gaining large personal wealth (and incidentally having a good time into the bargain – money corrupts, see?), and ganging up with a load of other guilty people and trying to make a New and Better World. Which option should I take?

1. Live an ethically and financially secure life as a middle-class writer/academic/engineer. Vote, recycle, minimise my carbon footprint, write to my MP, attend protests and try to shuffle through life without causing trouble or offence to anyone.
2. Live a somewhat more exciting life as an entrepreneur. Make lotsa money and retire to try to force my idea of what a perfect world should be down various people’s word-holes.

Phrased like that, neither choice seems particularly appealing.

What about the Future?

Between now and the time when the cost of production goes down through magic nanotechnology, everyone is turned into an artificial genius, and everyone gets a butler robot in their own glittering space habitat and the present moment we will need to explore a few important questions:

1. Is large personal wealth broadly a good thing or broadly a bad thing? Answer: broadly a good thing as long as the wealth is created in an entrepreneurial manner and the wealth is not derived from anything that is detrimental to society as a whole.
2. Is capitalism, and the free market, broadly a good thing or broadly a bad thing? Answer: I’m not sure about capitalism, however the free market is a powerful resource allocation tool as well as being a necessary side-effect of personal liberty.
3. Should corporations and limited companies continue to be granted the legal personhood they enjoy today? Answer: Yes, if only to allow for the legal personhood of AI and virtual humans. However corporations should be held to account to a much greater extent than they are today.
4. Will democracy exist in a posthuman world? Can it exist? Should it exist? Answer: probably. Answer: Probably. Answer: Probably.
5. Will a posthuman world be broadly libertarian or broadly socialist? Answer: a glib answer might be that as transhumanists seek to overcome the basic causes of human suffering, the very same thing the socialists and the liberals have been trying to do for three hundred years, then a future society will be libertarian, without a need for a state to nanny and bother and help and hinder. But really it depends on what kind of posthumanity various people end up with. Another way to phrase this question is: “will a posthuman world have an all-powerful state (or dominating organised body or group [to account for group minds {in as much as I can judge what a group mind would be like} etc]) that can override individual liberties to a great extent, or will a posthuman world be anarchistic?”

I understand that this is a somewhat rambling summary of some of my political and economic beliefs, I think I will re-write it a few times in the future.