Author Archives: Guy Lipman

What I am researching and why

At the time of writing this, I am two months into my PhD, and I’m starting to get some clarity to the question of what I’m researching and why.  For the benefit of any friends who want to know but are scared to ask (rumours of my ability to talk about it for hours without end are admittedly fairly accurate), I decided to write a blog post outlining my area of research.  Needless to say, it is a rapidly evolving field, and I plan on changing my opinions many times over the next 3-4 years, so please don’t count on my final dissertation to stick too closely to what I’ve written here.

The background to my research is society’s need to reduce its carbon footprint (net emissions of greenhouse gases), in order to reduce our exposure to climate change.  I’m not claiming to know exactly how climates will change nor their impact, but I do accept that: a) we risk serious economic and social consequences from climate change, b) there are lots of actions we could take to reduce that risk, and c) many of these actions make sense: their benefits in terms of risk reduction outweigh their costs.  

In many spheres of economic life, people are already incentivised to do the best action (or at least a pretty good one).  Laws, markets, social pressure and evolution give us reasons, for example, to follow traffic laws, go to work, and be polite to each other.  Unfortunately, these factors don’t work as well in incentivising us to take the right actions to reduce our exposure to climate change. I blame this on the fact that climate change is subject to massive uncertainty (in terms of what actions could be taken, how much they will cost, and much impact they will have), and that both the problem and actions to address it operate over the whole planet and long timescales.  

In light of this, one answer is for people to just go and do the right thing on climate change, irrespective of incentives that make it tempting to leave action for another day, another person in another place.  I do know people that are doing the right thing, and I commend them for that. However, I am looking to contribute to another approach that I believe is also important: to improve incentives so societies and individuals make fewer suboptimal decisions, by understanding the possible interactions between regulations, market structures and social forces. An example of this has been the decision by the UK to force supermarkets to charge customers for plastic bags, massively reducing the number of bags given out.        

Situation 1: Guarantees of Origin (Green Certificates)

The main situation that I’m focussing on is incentivising individuals and companies to reduce the carbon footprint associated with energy purchases (sometimes referred to as scope 2 emissions).  This can be done by reducing energy consumption, but it can also be done by reducing the carbon intensity of the energy consumed. It is actually quite challenging to think about where the electricity you consumes comes from.  Does everyone use the same grid average, or is there a way to allocate the greener portions to those customers that are willing to pay most for it? Many markets take the second approach, with the European Union (including the UK) introducing a requirement for electricity retailers to disclose their fuel mix, based on tradable Guarantees of Origin (that certify that a unit of energy has been generated renewably).

Allowing greenness to be traded between customers (or at least energy retailers) should, at least according to economic theory, provide better incentive to decarbonise electricity supply.  However, how well this works in practice is an open question. Obstacles can include a distrust in the meaningfulness of the allocation of greenness (the term ‘greenwashing’ or ‘cheat electricity’ gets used).  Calculations can lack transparency, introducing the risk of double-counting or computational errors. If not all guarantees of origin contributes equally to decarbonising, a market may lead to customers acquiring the inferior ones. For example, buying excess Guarantees of Origin from old Norwegian hydro stations does less to decarbonise the UK’s electricity than supporting the construction of a new wind farm.  Finally, the whole market process may be so expensive and administratively burdensome, wasting money and time that would be much better spent directly decarbonising.

I am therefore researching the ways in which we can improve the incentives offered by tradable markets for guarantees of origin.  This is a fun topic, giving me a chance to learn more about renewable energy technology, market mechanisms, and social dimensions. New computing technologies have the potential to make markets more effective, but if implemented poorly could prove counterproductive, for example if they end up wasting undermining trust or wasting money.

Situation 2: Flexibility of Demand

Another situation that I’m very interested in is how we incentivise flexibility in energy demand.  The background for this is that the cheapest sources of electricity (especially when the cost of emissions is taken into account) are variable, and storage is expensive.  If we can incentivise electricity demand to adjust to availability, we can considerably reduce the cost to decarbonise. For example, as battery electric vehicles become more prevalent, there is a huge gain to be achieved if we can incentivise the coordination of charging according to grid capacity and available supply.  Longer term storage, for example dealing with seasonal imbalances or months with lower than expected wind generation, is even more expensive. As a result, we should be incentivising companies to develop longer term flexibility – perhaps an ability to schedule energy intensive processes for times of the year when renewable electricity is abundant.  Time-of-use tariffs, imbalance markets at the retail level, and peer-to-peer trading, are all possibilities for incentivising socially optimal behaviour. (This isn’t to rule out small nuclear reactors or fossil fuel with carbon capture and storage, if we can get them cheap enough without excessive risk, though I’m not prepared to assume we will.)

Two questions: fairness, and use of emerging technologies

These two situations intersect with two important questions that are receiving increasing attention at present.  The first is the question of fairness of arrangements, which has historically been neglected by economic literature.  For example, is it fair if a wind farm, which has received public funding, earns Guarantees of Origin? Is it fair if a government disqualified biomass generators built in the expectation that they would receive guarantees of origin?  Is it fair for tenants to pay more for their electricity when they have limited ability to modify their demand? As well as there being a moral argument in favour of fairness, there is also an economically rational argument that unfair arrangements are ultimately unsustainable, and may lead to much worse outcomes than we might achieve if we took fairness into account.

The second question is how we should use new computing technologies to improve incentives.  In particular, distributed ledger technologies (for example those underpinning bitcoin and blockchain) are currently being tested both for trading of Guarantees of Origin and for demand flexibility. Depending on who you listen to, these technologies might be the answer to all our problems, a massive distraction, or actively harmful.  My current belief is that there will be scenarios in which some of these technologies will prove useful. However, more importantly than deciding whether to use them, I do believe considering these technologies forces us to think about some questions, which are crucial even if we’re not using distributed ledger technologies. For example, how do we balance user privacy and the transparency necessary to prevent cheating?  How do we balance the contractual or regulatory certainty required for investment with the flexibility needed to cope with uncertainty? How do we balance efficiency of incentives with fairness and protecting vulnerable citizens?

I’m really excited to have found such an interesting area to research – one that feels relevant and following quite naturally from my previous work experience and study.  I will try to occasionally blog about books and papers I read, and ideas that I am thinking about. And please do ask if you’re interested in talking about any aspects of my research in more detail.

The challenge of setting mortgage rates fairly

I’ve been thinking a lot recently about different ways to manage market uncertainty.  Most of my research is on electricity price volatility, but it got me thinking about another example of  market uncertainty: mortgage rates. (Please note that this post is intended to be illustrative, and shouldn’t be taken as financial advice.)

When you buy a house, you typically borrow under a mortgage.  Generally, your mortgage is guaranteed for 20-40 years (so long as your keep up your repayments).  However, the interest rate that you pay generally won’t be fixed for the whole period.

One possible option is a floating or adjustable rate, which allows the mortgage provider to adjust the rate every month, in line with general market interest rates.  In some cases the bank gets to set them, in other cases they’ll be a fixed margin to a centrally set benchmark (eg the Bank of England base rate). But either way, if you have a floating rate mortgage, you have a risk that rates will rise, perhaps very considerably.

In some countries, you can get mortgages where the rate is fixed for the life of the mortgage.  This avoids the risk of rates rising (though correspondingly, you lose the benefit if rates fall).  The fixed rate you are charged will generally reflect how market participants expect the floating interest rate to change – they usually expect it to rise over time.  But longer term fixed rates tend also to be biased up compared with expected short term rates, perhaps because there are generally more fixed rate borrowers than lenders.  There is an argument that this bias is unfair on borrowers who are less able to handle the interest rate volatility, who are therefore forced to use a fixed term rate.

One significant difficulty of long term fixed rates is that they may charge a significant penalty if borrowers want to repay early (for example, if they sell the house, receive an inheritance, or receive a pay rise).  This isn’t just borrowers being greedy – they’ve generally hedged these interest rates, and incur significant costs, especially if market rates have fallen. In the UK, these early repayment fees have tended to be so high that borrowers have avoided the products, and most borrowers only fix for 3-5 years at a time.

In the US, because the bulk of mortgages were financed by a government (the Federal National Mortgage Association, commonly known as Fannie Mae), early repayment fees aren’t charged.  This may seem like the kindest thing to do, and means that the majority borrow at a fixed rate for the full term of the loan. But the fact is, lenders will definitely include the expected cost of repayments when setting the fixed rates, so borrowers are still paying.  In addition, financially savvier customers, and wealthier ones are more likely to repay early, especially when rates drop, meaning those worse off are paying a higher rate for a benefit they are less likely to take advantage of. I suppose you could charge a smaller premium for people that you knew were less likely to strategically repay early, and you could offer a discount for people prepared to waive their right to repay early, but these choices bring their own risks.

In conclusion, I don’t think there’s a straightforward way to make things fair.  In this case, I believe that forcing everyone to use the one approach would lead to significant suboptimality, reduce borrowers’ abilities to manage their risk, and wouldn’t even make things substantially fairer.  But I still believe fairness is an important factor to be aware of when designing and regulating markets.

A few links:

https://www.moneysavingexpert.com/mortgages/fixed-discount-mortgage-guide/

https://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10594494/Why-Britons-cant-have-40-year-fixed-rate-mortgages.html

Dissertation: The consequences of differing car insurance premiums

Abstract:

Insurance companies use a range of factors to set car insurance premiums, some of which have unwelcome consequences. Much of the relevant philosophical and legal literature has focussed on when these factors constitute discrimination, and has sought non-consequentialist grounds to justify when discrimination is wrong. In this dissertation, I support Lippert-Rasmussen’s argument for consequentialism (2014). However, I argue that we should consider all consequences of differential pricing, and not merely those that constitute discrimination. I argue that such an analysis is pragmatic, allowing us to appeal to those with consequentialist and non-consequentialist ethical perspectives, and to more effectively recognise and reduce harms. I explore a range of potential consequences of different mechanisms for pricing car insurance: increased implementation costs, susceptibility to cheating, reduction in privacy, reduction in insurance, changes in behaviour, economic inequality, stigma and fairness. I argue that these consequences should be taken into account by companies, society, and regulators.

GL_Dissertation

This was my dissertation for my MSc in Philosophy of the Social Sciences, 2018.

Philosophy of the Social Sciences essay

This is an essay submitted for Philosophy of the Social Sciences, as part of my MSc in Philosophy of the Social Sciences.

According to some philosophers, mental states are holistic. When we rationalize action, inferring back from people’s actions to their beliefs and desires requires knowing more about further beliefs and desires. Donald Davidson captures the point in the following words: “When we attribute a belief, a desire, a goal, an intention or a meaning to an agent, we necessarily operate within a system of concepts in part determined by the structure of beliefs and desires of the agent himself. Short of changing the subject, we cannot escape this feature of the psychological; but this feature has not counterpart in the world of physics” (2001: 3). Why does Davidson think that the holism of the mental makes the prospect of understanding people scientifically – the prospect of a science of the social – so difficult? Discuss and critique.

 

 

  1. Introduction

The natural sciences have experienced considerable success in formulating laws that explain and predict the natural world.  The social sciences, in contrast, have struggled to formulate laws that explain and predict human behaviour. In this essay, I aim to consider an important source of difficulty facing the social sciences: what Donald Davidson has labelled “holism of the mental”.  This is the idea that mental states, such as beliefs and desires, with which we usually explain human behaviour, are not directly observable. They must instead be logically implied from actions, and this process depends on assumptions, for example other beliefs and desires that the individual holds.  This leaving the whole endeavour susceptible to error.

Davidson has not written specifically or extensively on holism of the mental, mentioning it within his essays Mental Events (1970) and Psychology as Philosophy (1974) as part of arguments on the impossibility of psychophysical laws; that is, laws in which mental states cause or entail physical states (Davidson, 2001).  Holism of the mental should also not be confused with the parallel idea of semantic holism: that the intended meaning of any term depends on the meanings of all other terms (Jackman, 2017).  As a result, I have focussed on what I understand to be the likely implications of holism of the mental, drawing in part from discussion of mental explanations in Rosenberg (2015). While I will accept that holism of the mental poses difficulties, I will offer some ways in which they may, to some extent, be overcome.  

The essay will be structured as follows: In section 2, I describe Davidson’s view of the role of mental explanations of behaviour, and indicate how the differ from physical explanations.  In section 3, I acknowledge the difficulties posed by holism of the mental. In section 4, I suggest some ways in which progress might nonetheless possible.

 

  1. Mental and physical explanations of behaviour

Davidson’s consideration of laws within the social sciences relies upon the distinction between two kinds of explanations of human behaviour: mental (psychological) and physical.  Mental explanations are the ones most often used, and I will first describe these and explain how Davidson understands these working. I will then describe physical explanations of human behaviour, highlighting how they differ to mental explanations.

Our usual way of explaining human behaviour is with mental or psychological explanations.  These are used intuitively by most people, hence are sometimes referred to as “folk psychology”.  Mental explanations are sets of beliefs and desires (or more generally any such propositional attitudes), that, combined with other beliefs and desires, rationally justify the observed behaviour.  For example, we say that a man carried an umbrella because he believed it might rain and desired not to get wet. Not all behaviour can be rationalised this way, for example mere (unintentional) behaviour, but we designate as action that behaviour we can explain by beliefs and desires.  Mental explanations are subjective (dependent on how we interpret the action) and implied rather than objectively observed.  

Physical explanations are of the type more typical in natural sciences, and involve identifying objectively observed initial conditions, and laws (perhaps but not necessarily physical mechanisms) that determine the resulting outcome.  In the case of human behaviour, we may expect it to result from an initial physiological state (including the state of the brain), via physiological mechanisms. Unfortunately, explanations of this type have been of limited use within social science, as behaviour depends greatly on variation in the state of the brain, and this cannot currently be known precisely enough to form accurate predictions.  

Davidson believes that mental explanations are the appropriate ones for human action (2001, p239); that psychology should take philosophy as its template instead of the natural sciences like neuroscience or even physics.  However, as Davidson recognised, mental explanations have limitations, which I will consider in the next section.

 

  1. Difficulties posed by mental explanations

In the previous section I described mental explanations, which Davidson believes are the appropriate ones for explaining human behaviour.  However, mental explanations, though widely used, have struggled to provide law-like generalisations of the sort that have contributed to the success of the natural sciences.  I argue that much of this difficulty is due to the holism of the mental: the fact that beliefs and desires do not operate individually, but collectively, as a whole. This section will discuss the difficulties that holism poses to mental explanations. Firstly, I describe how individual beliefs and desires depend on the other beliefs and desires for their significance.  Secondly, I describe how this allows indeterminism: multiple sets of beliefs and desires can rationalise observed actions, which makes it difficult to choose between them. Finally, I discuss how unconsidered factors, can undermine the logical relationship between beliefs and desires and behaviour.

According to Davidson’s understanding, mental explanations consist of beliefs and desires logically implied from an individual’s behaviour.  This logical process of implication requires us to assume many of their other beliefs and desires. For example, if we see someone choosing chicken from a menu, we would likely imply that they desire chicken, but this logic relies on them being able to read the menu and believing that the item was in fact chicken.  We may practically consider one belief or desire to be the primary reason for an action, but this is only because we have taken for granted other beliefs or desires, and the lack of further beliefs and desires. Holism of the mental means that no belief or desire can be deduced with certainty, each requires the assumption of others.  Furthermore, we can never rule out a belief or desire: we can always explain additional actions by supposing additional beliefs and desires.

Because actions are more correctly explained by an individual’s full set of beliefs and desires, we can often explain action in multiple ways, and our choice cannot be objective.  For example, on seeing a man picking up someone else’s umbrella, one viewer might explain it as him mistakenly thinking it is his own, while another might explain it as him intentionally stealing.  One could interpret this indeterminism as suggesting that no set of beliefs and desires can ever be considered the correct one. I dispute this point; there exist some beliefs and desires that we would maintain even if we had all possible evidence of the individual.  However, we must accept that more evidence may change our view of which alternative is most plausible, and the difficulty that this uncertainty adds to our being sure of our beliefs and desires.

Finally, other factors, beyond beliefs and desires, can have an influence on our behaviour, blurring the scope of mental explanation.   Davidson refers to this problem as that of the mental not being a closed system, as it is affected by non-mental factors (2001, p224). For example, I may believe that there is an apple on the table, and I may desire the apple, but if my belief is mistaken I will not take the apple.  Similarly, if someone else takes the apple before I can, then I will not take it. Sometimes the effect of these factors are captured by ceteris paribus conditions which recognise that people may act differently when circumstances change, however these are generally vague and in practice circumstances will never remain constant.  We cannot expect to have law-like generalisations if we accept that they are susceptible to these other factors.

This section highlighted a number of reasons why our efforts to develop mental explanations have largely failed to provide law-like generalisations necessary for a rigorous science of the social.  However, I do not believe the endeavour is totally hopeless, and in the next section I will suggest some ways in which these difficulties may be overcome, at least to some extent.

 

  1. Hope for improving the power of mental explanations

In this section I will suggest three ways in which the difficulties posed by holism of the mental may be tackled, in order to allow progress within social science.   Firstly, I argue that the holism described above is not complete, and in some cases clusters of beliefs may be isolated, or dependence on particularly uncertain beliefs may be reduced.  Secondly, I suggest that evidence for certain beliefs or desires may be found via physical means, allowing objective measurement. Finally, I suggest that we may extend the scope of mental explanation to cases where other factors undermine intentional action, reducing our need for vague ceteris paribus conditions.

Holism of the mental means that every belief or desire depends for its significance on the person’s total structure of beliefs and desires.  I argue against such a complete interdependence. I accept that some beliefs and desires are fundamental, and influence many other beliefs; for example, our belief that we should generally communicate honestly, or our desire to have the things we think will please us.  However, I argue that there are clusters of desires and beliefs that do not depend on those in other clusters, and some desires and beliefs on which no others rely. In addition, I argue that some beliefs are sufficiently specific that they will seldom, if ever affect the operation of other beliefs and desires.   As a result, if we incorrectly determine some of an individual’s beliefs and desires, it will not necessarily contaminate all other beliefs and desires, or all predictions.

While the beliefs and desires within mental explanations are usually derived logically, I believe that as neuroscience develops, we will have opportunities to objectively identify some.  Already, FMRI analysis is able to determine neural correlates of aspects of our decision-making: that is, measurable physical activity in the brain that differs in a consistent way with our mental states  (Rosenberg, 2015, p68, 117). As we better understand these correlates, we will be able to make physical observations to determine what certain mental beliefs and desires are likely to be. To give an analogy from the natural sciences, the recognition that mercury expands in a consistent function of experienced heat significantly increased chemistry’s ability to accurately measure temperature and therefore experiment (Rosenberg, 2015, p67).  I acknowledge that what we currently know about the way the brain works is vastly outweighed by what we don’t know, and we most likely will not ever have full knowledge. However, it would be surprising if neuroscience’s ability to understand the basis of mental states, remained constant over the next 50 years.

Finally, rather than settling for vague ceteris paribus conditions that make mental explanations untestable in practice, I believe that considering the factors that undermine intentional action will allow social science to develop.  If we can understand specifically when lack of willpower prevents us from acting rationally, or when environmental factors will outweigh or alter our behaviour, we will be able to make falsifiable predictions and develop them into useful law-like generalisations.  For example, rather than seeing wealth maximising behaviour as something that people do just sometimes, we will be able to define a restricted set of contexts when we can genuinely expect people to act that way.

 

  1. Conclusion

In this essay, I described Davidson’s model of distinct physical and mental explanations for human action.  I considered how the idea of holism of the mental presents difficulties for a science of human behaviour in contrast to the natural sciences.  Although I accept these difficulties, I argued that we should not be too pessimistic, and suggested a number of ways in which I believe mental explanations can become more objective, based more on empirical evidence rather than entirely on logic and assumption.  Holism of the mental makes the mind a bit like a crossword. The task seems daunting at first, before you are confident of any letters, but solving even a few clues does make further progress easier. Human behaviour may never be as predictable as the movement of the planets, but there is good reason to expect progress.

 

References

Davidson, Donald, 2001. “Essays on Actions and Events”, Oxford University Press, Oxford

Elster, Jon, 1985. “The Nature and Scope of Rational Choice Explanation”, reprinted in Readings in the Philosophy of Social Science (1994), edited by M. Martin and L.C. McIntyre, MIT Press, pp. 311-322.

Herstein, Gary, 2005,  “Davidson on the Impossibility of Psychophysical Laws”, Synthese, Vol. 145, No. 1 (May, 2005), pp. 45-63

Jackman, Henry, 2017. “Meaning Holism”, The Stanford Encyclopedia of Philosophy (Spring 2017 Edition), Edward N. Zalta (ed.), URL = <https://plato.stanford.edu/archives/spr2017/entries/meaning-holism/>.

Latham, Noa, 1999.  “Davidson and Kim on Psychophysical Laws”, Synthese, Vol. 188, No. 2 (1999)

Lepore, Ernest and Kirk Ludwig (eds.), 2013, A Companion to Donald Davidson, Oxford: Wiley-Blackwell.

Malpas, Jeff, 1992, “Donald Davidson and the Mirror of Meaning”, Cambridge University Press, Cambridge

Malpas, Jeff, 2015.   “Donald Davidson”, The Stanford Encyclopedia of Philosophy (Fall 2015 Edition), Edward N. Zalta (ed.), URL = <https://plato.stanford.edu/archives/fall2015/entries/davidson/>.

Pettit, P. (2002). “Three Aspects of Rational Explanation”, in Rules, Reasons, and Norms, Oxford: Oxford University Press, pp. 177-191.

Rosenberg, Alexander, 2015. “Philosophy of Social Science (fifth edition) ”, Westview Press, Colorado

Philosophy of Economics Essay

This is an essay submitted for Philosophy of Economics, for my MSc in Philosophy of the Social Sciences.

In Haybron and Alexandrova’s “eminent domain” case, is it paternalistic to build the shopping centre? If yes, does this count against using cost-benefit analysis to guide public decision-making?

1 Introduction

In this essay, we are asked to consider a case study, proposed by Haybron and Alexandrova (H&A), in which a government makes use of “eminent domain” powers, that is, in which property owners are forced to sell their properties.  This is done in order to build a shopping centre that it believes (based on cost-benefit analysis) will benefit citizens enough to compensate the owners. H&A argue that the government’s decision, made on behalf of the people and then forced upon them, is potentially paternalistic and inappropriate.  I will consider this argument, and its wider implications on using cost-benefit analysis within public decision-making.

In section 2 I will consider paternalism in general, defining it and describing the harms that make it a concern.  I will argue that this definition is broader than sometimes thought, and includes cases with benefits that outweigh the harms, which I will argue are justified.  Sections 3 and 4 examine H&A’s case study, which I will argue displays paternalism in two ways: the decision to use eminent domain (section 3), and the way in which costs and benefits of the project are estimated (section 4). I will argue that both these aspects involve paternalism, and therefore inflict harms, but are nevertheless justified. In section 5 I will generalise these conclusions to provide guidance as to when cost-benefit analysis is appropriate and how it should be done.

 

  1. Paternalism

Throughout this essay, I will adopt Dworkin’s definition of paternalism[FN: H&A consider a definition of paternalism by Shiffrin (2000, p218), and propose their own (H&A, 2013, p163). However, the arguments in this essay do not depend on which of these accounts is adopted.], which suggests that a government acts paternalistically towards citizens when

  • It interferes with their liberty or autonomy
  • Without their consent
  • It believes this will improve their welfare or promote their interests (Dworkin, 2017)

Paternalism imposes harms. First, it undermines the liberty of the citizens – their freedom to make their own choices.  Second, it can damage their ongoing ability to make decisions and exercise their will. Third, the decision maker can, despite good intentions, be incorrect in their assessment of what will enhance the individual’s welfare.  Examples of paternalism are requiring cyclists to wear helmets, or requiring companies to reduce the sugar content of drinks[FN: I note that some of these laws do not represent pure paternalism, but also seek to reduce the cost incurred by the rest of society.].

While the harms of paternalism are real and should not be ignored, I argue that paternalistic action can have benefits which may outweigh those harms and make it justified.  It is certainly conceivable that a government has knowledge or capabilities that will genuinely and significantly improve its citizens’ welfare (however defined), compared with what they could do themselves.  

It might be challenged that this definition is broader than paternalism is usually envisaged, and in particular includes government decision-making done on behalf of citizens, that could not be decided individually.  For example, national defence policy could not left to each individual to decide. However, I believe the definition’s breadth is appropriate, for two reasons. First, it is difficult to draw a clear distinction as to what individuals could or couldn’t decide; some might argue that citizens indeed could defend themselves.  Second, government decision-making on behalf of citizens still inflicts the harms of paternalism, which should be recognised. However, the paternalism of much of legitimate government action does support the argument that paternalism is justifiable where the benefits outweigh the costs.

I argue that collective action problems are a case where paternalism is particularly likely to be justified.  Collective action problems are ones where individuals, acting rationally, are likely to reach a suboptimal outcome; that is, one where an alternative exists, which is preferred by each individual.  For example, each citizen may highly value a national defence, but would not individually choose to contribute; government is a way to ensure, albeit paternalistically, that the optimal outcome is achieved.

 

  1. The decision to use eminent domain

In the previous section, I defined paternalism, and argued that while harmful, it could nonetheless be justified, where the benefits outweigh the costs.  I suggested collective action problems are an example where paternalism provides benefits that may outweigh its harms. In this section I wish to argue that government decision to use eminent domain, such as in the H&A case study (described in the introduction), addresses a collective action problem: individual property owners have an incentive to not sell unless they are paid above their fair value.  I will argue that in this case paternalism is likely to be justified. I will also suggest ways in which the harms of paternalism can be reduced.

The use of eminent domain is paternalistic, according to Dworkin’s definition; it interferes on property owner’s freedom, they have not consented, and it is being done because the government believes it will maximise the welfare of all citizens.  I also argue that it inflicts the harms of paternalism described in the previous section. For example, the government may incorrectly assess how people feel about property owners being forced to sell. In the case study, H&A suggest that citizens “would be appalled” to see other people forcibly removed from their homes (p8), however, no evidence is given for this.  It is possible that only a vocal minority of citizens are concerned, or that they are merely expressing outrage despite actually preferring the shopping centre to be built.

However, the use of eminent domain also has benefits, which may well justify its paternalism.  It addresses a collective action problem, in which property owners have a good reason to resist selling, hoping to get compensation beyond how they value it.  Disallowing eminent domain can stop much-valued (or even essential) projects, and allow some to profit by strategically buying property that the government needs.  Cost benefit analysis, which will be considered in the next section, can be used to estimate the benefits.

In order to ensure the use of eminent domain is justified and to reduce the harm, I would suggest a process of public deliberation to gain a clearer consensus on what arrangements citizens felt were preferred.  This would consider an acceptable method of determining compensation; for example, people may wish non-market considerations to be taken into account, or a premium to be paid. Similarly, people may have views as to how essential and/or valuable the project should be to society before it is able to justify use of eminent domain.  These steps would increase individual liberty and improve the government’s understanding of what people value.

In this section, I have argued that although paternalistic, use of eminent domain may be justified, where it offers sufficient benefit to outweigh its harms.  I have noted that cost benefit analysis can be used to estimate the benefits of its use. However, cost benefit analysis introduces a further source of paternalism, which I will discuss in the next section.

 

  1. Estimation of costs and benefits

In the previous section, I argued that eminent domain is paternalistic, though justified if it allows a project with sufficient benefit to outweigh its harms.  I noted that these benefits will often be estimated using cost-benefit analysis. In this section, I will consider how we should conduct this cost-benefit analysis.  I will argue that using much of the data we have available is paternalistic. However, I will argue that using this data has significant benefits that make it justified.  I will argue that rather than attempting to minimise paternalism, we should seek to maximise accuracy, taking into account any data that helps us do this.

When a government performs cost-benefit analysis in order to justify a project in which eminent domain has been used, it can use a variety of methods to estimate the loss of value by those who lose their existing property (similar considerations apply to estimating the value to those benefiting from the project).  Firstly, it can use revealed or stated preference, seeing how much the owner has recently sold property for (though they are unlikely to have sold a similar property under similar circumstances), or asking the property owners what they are willing to sell for. Secondly, it can use other market information, seeing how much others are or were willing to buy or sell for.  Thirdly, a number of economists are now recommending the use psychological research into how people’s wellbeing is affected by experiences (this is often referred to as happiness-driven economics – see H&A, 2013 ). For example, research might indicate that people tend to overestimate how upsetting they would find moving.

There is an argument that it is paternalistic to rely on anything other than revealed or stated preferences of the individuals affected.  I find this argument convincing; without ensuring that individuals have consented to having their own views ‘downplayed’, this is likely to result in the harms of paternalism described in section 2.  For example, economists adjusting for psychological evidence are liable to introduce their own biases.

However, I argue that we shouldn’t only pay attention to revealed or stated preferences, ignoring all other evidence.  First, applying stated preferences does not prevent paternalism; for example, a restaurant is not justified in forcing patrons to eat the food, just because they ordered it.  Second, I don’t believe that these people can reliably predict how losing the property will affect their welfare. Nor can we imply this from their past actions. Third, especially when the figures used for cost-benefit analysis are also being used to guide compensation, individuals have a strong incentive to overvalue the property in order to increase the compensation they receive, thus revealing an untrue preference (that they would prefer not to sell at a price above their true valuation).  

I believe that planners should take into account all data they have available, and attempt to generate an accurate cost-benefit analysis.  This should include elements that are subjective, such as psychological evidence. Planners should recognise the uncertainty in their own theories and models, and the fact that these may not reflect how the individuals affected will experience the project.  The existence of this uncertainty is part of the reason only projects that are sufficiently valuable should be justified by cost-benefit analysis, as noted in the previous section. However, planners should not be afraid to downplay revealed preference data, particularly when there is evidence it is unreliable.  

 

  1. Conclusion

In this essay, I have argued that the use of eminent domain and cost-benefit analysis will generally be paternalistic, as citizens will seldom unanimously consented to their use.  However, I do not believe we have a duty to minimise paternalism at all costs. I have highlighted collective action problems as being a particular case where paternalism can potentially make individuals significantly better off, for whatever definition of welfare we choose to apply.  In these cases, individuals have an incentive to reveal untrue preferences, and planners are justified in downplaying these preferences, and enriching their decisions with other information, including psychological and happiness research that people may not take into account sufficiently when forming their own preferences.

This is not to argue that paternalism is harmless.  I have argued for greater public deliberation; scepticism does not mean ignoring the views of people.  We should seek to understand the conditions under which people believe coercion, such as eminent domain, is justified.  We should seek to genuinely understand how people experience the loss of their property. Finally, we should seek to transparently report how we reached the decision to apply cost-benefit analysis, and how we estimated the costs and benefits of the project.  Steps like these would reduce the risk of incorrect decisions and somewhat restore people’s sense of autonomy, while still allowing projects that significantly improve total welfare.

  

References

Adler, M. and Posner, E, 2006. “New Foundations of Cost–Benefit Analysis”, Harvard University Press

Dworkin, G., 2017. “Paternalism”, The Stanford Encyclopedia of Philosophy (Winter 2017 Edition), Edward N. Zalta (ed.), URL = <https://plato.stanford.edu/archives/win2017/entries/paternalism/>.

H&A (Haybron, D & Alexandrova, A),  2013, “Paternalism in Economics”, In Paternalism: Theory and Practice. Cambridge University Press. pp. 157-177

Schmidtz, D,  2001, “A Place for Cost–Benefit Analysis,” Noûs, October 2001, Vol.35, pp.148-171

Shiffrin, S., 2000. “Paternalism, Unconscionability Doctrine, and Accommodation”, in Philosophy & Public Affairs, Vol. 29, No. 3 (Summer, 2000), pp. 205-250

Sunstein, C., 1999,  “Cognition and Cost-Benefit Analysis” ( John M. Olin Program in Law and Economics Working Paper No. 85, 1999).

 

Business and Organisational Ethics Essay

This is an essay submitted for Business and Organisational Ethics, for my MSc in Philosophy of the Social Sciences.

 

Adam Waytz argues that offering monetary rewards to whistleblowers is potentially problematic. He suggests that for one thing, “the mere mention of a whistleblower receiving money [might alter] public perceptions of them from heroes to gold-diggers” (Waytz, 2016, p. 3). Should whistleblowing be encouraged through financial rewards? How else might whistleblowing be appropriately encouraged? Discuss this question by employing at least one moral framework that was introduced in the context of this course.

  1. Introduction

In their course of employment, individuals may discover wrongs performed by their company, and will be forced to consider whether to whistleblow, that is, to announce their discovery to the public or government officials.  In this essay, I will consider how whistleblowing should most appropriately be encouraged, and in particular, whether financial rewards should be used. I believe that to answer this question, we must first consider the circumstances under which whistleblowing is ethically appropriate.

In section 2 I will outline an ethical framework and use it to define a corporate wrong.  I will then argue that whistleblowing is necessary when, and only permissible when, an individual is aware of a wrongdoing and does not believe the company will voluntarily stop and remedy the wrong.  In section 3 I will argue that proposals to offer financial rewards to whistleblowers are inappropriate, as they lead whistleblowing to be viewed as a choice rather than a duty. In section 4 I will suggest other policies that will more appropriately encourage whistleblowing when it is required.

  1. The ethics of whistleblowing

In this section I will begin by providing an ethical framework, which allows us to evaluate company and individual action.  I will then use this framework to define the concept of a corporate wrong, which we will depend on throughout this essay. I will then consider employees’ competing duties: to loyalty and confidentiality on one hand, and to not facilitating corporate wrongdoing on the other hand.  Based on these, I will argue that employees have a duty to prevent wrongdoing and ensure remedy, if necessary, by whistleblowing.

The ethical framework I am proposing is deontological, that is, based on rules or obligations, in which individuals and companies are constrained by laws and ethical custom, but otherwise free to act as they please.  This framework draws support from Mill’s On Liberty (1859), and in a business context, Friedman’s Capitalism and Freedom (1982).  I believe that many people would intuitively support such a framework, though there would be likely disagreement on the scope of law and ethical customs that should constrain individuals and companies, for example, how small their environmental footprint must be.  Democratically legitimate laws may be a useful benchmark, but most people would agree that even some actions that are legal would still be unacceptable based on ethical custom. I refer to corporate activities that are illegal or clearly outside most people’s ethical custom, with the term ‘wrongdoings’.  

Throughout this essay I am focussing on cases that are clearly illegal or outside most people’s ethical custom.  In practice, I know that there will often be uncertainty. Employees may not be fully aware of what the company has done, or how it has affected others.  Likewise, employees may not know whether the activity would be illegal or clearly unacceptable to most people. Some things that do not reach the threshold of a ‘wrong’ according to this definition may still be undesirable, for example wasting a bit of paper or a manager losing their temper.  The question of how employees should act in these more uncertain situations is important and difficult, but has intentionally been excluded from the scope of this essay: I am focussing on the question of employee duty in the case of clear wrongdoing.

Employees are subject to two potentially conflicting obligations.  Firstly, they are often bound to confidentiality by a legally enforceable contract.  Even where not bound by contract, ethical custom dictates a duty of confidentiality and loyalty to their employer.  Secondly, employees are prevented by ethical custom, and potentially by law, from engaging in or facilitating wrongdoing.  Importantly, in many cases being aware and not reporting wrongdoing would be considered facilitation, and also wrong. One might argue against this view, that it is unfair to blame a single individual for not reporting a wrongdoing, at significant cost to themself, when others were also aware of it.  While I agree that it is unfair to blame one and not the others, I argue that society is better served by giving all a duty to speak up, especially for more significant wrongdoing, and this is reflected in the existence of laws and professional ethical standards that require reporting any known wrongdoing.        

In order to balance these two obligations, I would suggest that the employee first consider whether the company is likely to prevent the wrong and remedy past wrongs without external pressure.  For example, the employee may believe the wrong to be an honest mistake. If so, the employee should first raise the issue internally. Where this is not likely, or the employee has already tried, I believe that they have a duty to report the wrong externally, either to the public or a regulator.  While I recognise that this will involve breaching confidentiality and loyalty to the company, I believe that this is permissible, as the company is acting outside its legitimate powers and cannot expect to have this its rights enforced. Indeed, some jurisdictions already recognise that requirements for confidentiality should not overrule the duty to report wrongdoing [FN, For example, the UK Government’s website advises that “A confidentiality clause or ‘gagging clause’ in a settlement agreement isn’t valid if you’re a whistleblower” (GOV.UK, 2018)]  

In this section I have established the concept of corporate wrongdoing, and argued that where an employee cannot stop and the wrong and ensure it is remedied internally, they have a duty to whistleblow.  Having now established the duty to whistleblow, in the next two sections I will consider appropriate policies to encourage whistleblowing where necessary.

  1. The inappropriateness of financial rewards to encourage whistleblowing

In the US, bodies such as the Securities and Exchange Commission (SEC) offer financial rewards to whistleblowers (FCA, 2014).  These rewards aim to provide a positive incentive to potential whistleblowers, and pay between 10% and 30% of financial sanctions imposed on wrongdoing companies (Gaafar, 2016).  By basing the reward on the financial sanctions imposed, I believe these rewards are not merely compensating the whistleblower for their costs incurred. The UK Financial Conduct Authority (FCA) has considered introducing such awards but decided against it (FCA, 2014) and Australia’s parliament has recently proposed introducing financial rewards for whistleblowers (Khadem and Ferguson, 2017).

I believe that offering rewards for whistleblowers is inappropriate, as it changes the nature of the decision to whistleblow to one where the employee is permitted (by society) to decide what to do.  This stands against the argument in the previous section, that an employee has a duty to stop the wrongdoing, where possible without breaching confidentiality, and where not, by whistleblowing. By giving the employee a new (and likely powerful) reason to whistleblow, it distorts the employees motives, as well as public perception of the whistleblower as a “golddigger” (Waytz, 2016).  The employee may feel entitled, or even virtuous, for not whistleblowing, despite what I have argued may be a duty.

Some would argue that financial rewards are nonetheless justified if they lead to increased whistleblowing and therefore greater social good.  For example, one might believe that the employees that work for companies that are most likely to be committing serious wrongdoings are more likely to be incentivised by financial rewards than a sense of duty.  I would caution against this conclusion. I believe there are fairer ways to prevent wrongdoing by such companies than by rewarding employees who work in these companies. Whistleblowers motivated by rewards may also bring more opportunistic and unnecessary whistleblowing, in cases that would have been better dealt with internally (FCA, 2014, p3).  

I therefore would argue that financial rewards are an inappropriate way to encourage employees to carry out their duty to whistleblow where necessary.  In the next section I will propose a number of more appropriate policies to encourage whistleblowing.

 

  1. Appropriate policies to encourage whistleblowing

The FCA argue that we should “create a culture … where speaking up becomes normal business practice and people are more prepared to report concerns, which will help to improve behaviour in firms and ultimately improve outcomes“ (FCA, 2014, p2).  This supports my argument from section 2 that whistleblowing is a duty, in cases that internal reporting is unlikely to lead to the wrongdoing being stopped and remedied. In this section I will propose a number of policies that I believe are appropriate, individually and as a group, for building this culture and encouraging whistleblowing where necessary.

In the previous section I argued that financial rewards are not appropriate for encouraging whistleblowing, however I do believe society should aim to minimise the harmful consequences of employees carrying out their duty to whistleblow.  This can be done through a mix of legal protections against retaliation by their employer, and payments to the employee that are directly linked to their economic costs incurred. By ensuring that any payments are purely compensatory, they cannot be the reason for the whistleblowing, but we can reduce the disincentive and personal cost.

Improving the processes around reporting potential wrongdoing will help reduce the unintended harm that can result from public disclosure.  For example, public whistleblowing may lead to employees losing jobs or shareholders losing share value, where the wrongdoing is an honest mistake or perhaps merely a misunderstanding.  Where companies have procedures that allow individuals to report wrongdoing internally, and see that it is resolved satisfactorily, including with appropriate reporting and remedy, employees will have less need to whistleblow.  Similarly, ensuring regulators are trusted and have sufficient power to act will reduce the need for whistleblowing in more public forums where the harm may be greater.

We can also improve our narrative around whistleblowing.  I believe that at present, the media too often emphasise the whistleblowers as angry or greedy, rather than merely wanting to do the right thing.  Rather than second-guessing how the whistleblower should have handled things differently, we could take a more charitable interpretation of their actions.  Emphasising the extraordinary heroism of a whistleblower is better than criticism, but we should be working to portray whistleblowing as the right and normal thing to do.  The FCA are working towards this, with an annual report on all cases of whistleblowing, aiming to portray it as a relatively common activity that often leads to socially beneficial resolution (FCA, 2014, p2).  This has the added benefit of discouraging wrongdoing by companies.

Finally, if we want to promote whistleblowing as an obligation rather than a choice, I would argue that we should seek increased penalties against employees that do not prevent corporate wrongdoing where they have the chance.  This can be done through professional bodies and legal proceedings. Care must be given to recognise that employees face uncertainty in understanding whether wrongdoing has occurred and whether whistleblowing is necessary to prevent it.  Justice also requires care to ensure individuals are not scapegoated, particularly where other employees also knew about the wrongdoing. However, I do believe an appropriate part of ensuring that employees fulfil their obligations is to ensure that they will incur consequences if they do not.    

 

  1. Conclusion

In this essay I have argued that some actions by a company are illegal or clearly outside ethical custom: I refer to these as wrongdoing.  When employees are aware of corporate wrongdoing, I have argued they have a duty to prevent it, where necessary, by whistleblowing. I have argued that providing financial rewards to whistleblowers is inappropriate, as it promotes the idea that whistleblowing is a choice rather than a duty.  I have instead proposed a number of alternative policies that are consistent with promoting whistleblowing as a duty: minimising economic harm to the whistleblower, improving reporting processes, reframing the public narrative around whistleblowing and penalising employees that do not observe their duty to whistleblow.

 

References

Friedman, Milton, 2002. “Capitalism and Freedom”, University of Chicago Press, Chicago

McConnell, Terrance, 2003, “Whistle-blowing”, in R.G. Frey and Christopher Heath Wellman., (2003) Companion to Applied Ethics, Cambridge, UK: Blackwell Publishing Ltd.

Mill, John Stuart, 2003. “On Liberty”, Yale University Press

Waytz, Adam, 2016.  “Whistleblowers are Motivated by Moral Reasons Above Monetary Ones”, [online] ProMarket, The blog of the Stigler Center at the University of Chicago Booth School of Business, Available at: https://promarket.org/whistleblowers-motivated-moral-reasons-monetary-ones/, [Accessed 22 April 2018]

Gaafar, Leila, 2016.  “Money talks: should the UK introduce financial incentives for whistleblowers?” [online] WilmerHale, Available at: https://www.wilmerhale.com/blog/wireuk/post/?id=17179883237 [Accessed 22 Apr 2018]

Khadem, N. and Ferguson, A. 2017. “Bring in bounty rewards for whistleblowers, federal inquiry says”, [online] Sydney Morning Herald, Available at: https://www.smh.com.au/business/the-economy/bring-in-bounty-rewards-for-whistleblowers-federal-inquiry-says-20170913-gygmmg.html [Accessed 22 April 2018]

FCA, 2014.  “Financial Incentives for Whistleblowers”, [online] prepared by Bank of England / Financial Conduct Authority, Available at: https://www.fca.org.uk/publication/financial-incentives-for-whistleblowers.pdf [Accessed 22 April 2018]

GOV.UK, (2018), “Whistleblowing for employees”, [online] Available at: https://www.gov.uk/whistleblowing [Accessed 22 April 2018]

 

Book Review: Rebel

With a goal of better understanding the appeal of Brexit, I recently read UKIP politician Douglas Carswell’s latest book: Rebel: How to Overthrow the Emerging Oligarchy.  

I enjoyed the book and found it a lot less controversial than I expected; it had a lot more in common with ideas of Bernie Sanders than anything I’d expect from Trump or Farage.  The most enlightening and enjoyable part of the book for me was his historical illustrations of his points, using examples of successful periods and failures from Ancient Greece and Rome, Venice, Holland, Germany, France, Britain, America and China, and discussion of the influence of different philosophers.

Carswell’s primary argument is that societies can only thrive when they maintain both independence and connectivity (internally and with other societies) and are able to prevent parasitic behaviour by members and outsiders.  I’m very much inclined to agree with his argument, though I’m not sure how helpful it is: just about any political action could claim to be improving either independence or connectivity.  Similarly, while we all do seem to think parasitic behaviour has become more widespread, it seems impossible to agree on whether particular policies will prevent or rather increase it.

He makes a classically conservative argument against excessive faith in ‘facts’, ‘evidence’ and ‘experts’.  I acknowledge that this faith may be misplaced, or exploited by those that wish to seize power, and scepticism is sometimes appropriate.  But I felt he was wrong to ignore how often a refusal to accept scientific evidence is itself parasitic behaviour, for example where people refuse vaccinations or refuse to reduce their carbon footprint, expecting others to wear the cost.

I’m more sympathetic to Carswell’s criticism of unsustainable debt-issuance by governments, which he likens to debasement of currency.  I agree that we can’t keep borrowing increasing amounts and forcing future generations to pay for it.  But the costs of making our our existence sustainable have to be shared fairly, which is why I don’t support austerity as it is typically practiced.  

Carswell had a lot to criticise about the UK’s political system (what he refers to as the Oligarchy) – where political parties, the media and the establishment conspire to maintain power and keep things from changing.  He also warned against excessive faith in overly populist leaders on the left and the right, who would inevitably lead to chaos and disappointment and a rush back to the parasitic establishment.  As with so much of this book, it was a worthwhile point, but unhelpful as a prescription.

I wouldn’t recommend the book if you’re looking to understand Brexit: Carswell had virtually nothing to say about how Brexit would actually put the UK in a better position, and seemed almost as critical of Westminster as he was of Brussels.  

But all in all, and despite those criticisms, I did enjoy this book as a general political and philosophical commentary.

What’s wrong with our job markets?

Worry about the lack of ‘good jobs’ is growing, with a widely held perception that our job markets aren’t working.

While I agree the job markets have problems, I disagree with some of the diagnosis, or proposed solutions.  I am concerned that expecting the government to take action to ensure good jobs risks taking us away from what the job market should be doing: incentivizing people to make and do the things people want made and done.

In what follows, I will outline what I think is wrong with our job markets, and what could be done better.   In particular, I see four fundamental problems:

  • Ignorance: people don’t know what their choices are
  • Externalities: people don’t experience all the repercussions their actions
  • Lack of Capacity: some people don’t have the ability to engage in free markets
  • Injustice: free markets lead to an outcome we consider unjust

I believe there is a lot that can be done to address each of these, strengthening the power of job markets to deliver the work that should done.

Ignorance

I acknowledge ignorance is a problem, particularly in an interconnected and fast-changing world.  We will all, on occasion, display preferences and make decisions that we probably shouldn’t.

The challenge of working out what we want, can tempt us to make simplifying assumptions that we only care about ourselves and our own wealth (economic models frequently do this).  While I’m not going to claim that everyone is perfectly altruistic, the vast majority of us do genuinely care about others and about things other than wealth, and it seems genuinely irrational to ignore that when deciding what work we want to do.

Another unhelpful simplifying assumption is that only paid work done for an employer, is justified as work and valuable.  I would argue that any activity that creates value for others, that improves people’s lives and improves the world, should be considered a worthwhile activity – for example caring for others or enriching our culture.

We will never have certainty, but I do believe that both education and reflection can help us improve our knowledge of the likely outcomes of our various choices.  In particular, I’d argue that the temptation to believe that some group or institution knows better than us what is in our best interest.  I’d argue that this rarely goes well.

Externalities

Our actions have consequences for others, good and bad, that we ignore when making decisions as they don’t affect us.

As societies have grown in size and interconnectedness, our action are more likely to affect others.  Examples come to mind easily, for example someone else polluting near us, or painting their house which improves my neighbourhood.  We should also bear relative position in mind – for example, someone else cannot gain status without us losing it.

I would argue that we need to increase awareness of externalities, and understanding of how each person’s actions affect others in the world (and the planet itself).

While we can punish those that hurt others, or reward those that help others, there is a cost to this monitoring.  (Indeed, bearing this cost is often itself an externality, something done by an individual to help the group.)  I accept that as society has grown and become more open, it has become less good at performing this function, but I’m certain there was never an age of complete justice.

The goal here is to design better incentives to reflect externalities.  This involves challenging trade-offs, between the cost of monitoring and punishing, our value of compassion, and how completely externalities are reflected in individual incentives.  I believe we can do it better than we do now.  

For example, charitable foundations could play a larger role in recognising and rewarding individuals and groups that promote the wider good.  And, though there are definite dangers in public-minded vigilantism, public media does a lot of good in raising awareness of those that benefit at the expense of others.

Lack of Capacity

At present, financial insecurity limits the capacity of a small but growing population to freely engage in labour markets (described by Guy Standing’s book The Precariat).  When you are desperate, it is difficult to make sensible decisions.

Social welfare programmes should work to address this, however our current system makes the problem worse, reducing individual agency and creating perverse and distortive incentives (for example, low or even negative marginal return from working).  

I believe a universal basic income would go a long way to improving such people’s capacity to engage in a free market.

Injustice

Economics suggests that free markets will lead to ‘pareto optimal’ outcomes (those in which no one can be made better off without others being worse off).  Contrary to what some people believe, it makes no claim that these will be outcomes that we’d necessarily consider just or desirable.  For example, we may consider it unjust that someone benefits from a large inheritance; a free market will not correct for that.

People sometime highlight the post-war period as one when labour got its fair share of the profit (in contrast to 2000-2015).  I would argue that while it is good when markets do lead to fair outcomes, we shouldn’t count on this in general.  Rather than blaming markets for this, I believe we should accept this limitation of markets, and use other tools for achieving justice, for example redistribution or social care.

Why I support Corbyn

Friends of mine are often surprised that I could support Jeremy Corbyn, given socialism’s track record.  

It is a difficult question to respond to, for several reasons:

  • Socialism as a label is ill-defined: critics can invoke Stalin and Pol Pot, while apologists describe it as mere concern for others.  
  • It is impossible to know what Corbyn and his party would do, if in power.  I can easily imagine dreadful decisions, but also decisions that are brave and much-needed.  Also, no one knows how some of his policies would turn out in practice.  If I’m honest, I have to recognise that outcomes from decisions will differ from my expectations, for better and for worse.
  • It is also impossible to know how the future will pan out in a world if we stick with the status quo.  It may lead to major social and environmental disaster, but it may not: small changes may lead to a better, or at least tolerable outcomes.

So, despite those caveats, what do I think?

Am I a socialist?

Firstly, I wouldn’t define myself as a socialist, but mainly because I feel it suggests too many ideas that I don’t support.  In particular, I don’t believe that states, institutions, principles and abstract concepts (like class or nation) should ever be given priority over individual people.  

Having said that, I don’t believe that genuine individual well-being can or should be optimised as individuals; we clearly derive happiness and meaning from our relationships and our communities, and also benefit from markets. Individuals would be very much worse off without any government with powers of enforcement, but is easy to see how some actions of such a government could hurt individual well-being.  As a result I accept tradeoffs, but believe they should be made in such a way that promotes sustainable individual well-being.

When it comes to individual ownership of property, I do feel that allowing property rights enhances overall well-being.  But I don’t see how these property rights can be absolute; after all, they depends on others to recognise and enforce them.  In practice, this means I support property rights, but also laws that ensure those property rights remain in the general public interest.

From this mix of views, I don’t think I fit neatly into any other political label either, but I can live with that.

Do we need political change?

Firstly, I believe the status quo is unsustainable, both from an environmental and a social perspective.  I believe that the majority have their heads in their sand, choosing not to recognise just how much our well-being is vulnerable to the Earth’s whims and to the actions of its populations.  

In many ways, our current political system, being fundamentally driven by markets and democracy, is compatible with a greater awareness of the factors that drive genuine individual well-being, and the need to ensure environmental and social sustainability. Indeed, many people are already doing this, individually and within their communities.  I do believe that this will increasingly occur, even without major political change.

However, I do worry that it may not happen fast enough.  Political and environmental changes, both negative ones and positive efforts to mitigate, take time, and are impossible to model accurately.  By the time the problem is sufficiently serious that enough people are convinced to act, it may be too late.

It also seems unfair to reward those who happen not to recognise the risks, letting them reap the last remaining benefits of an unsustainable system, while others incur the costs.

As a result, I do support political changes to move us to a more sustainable future in a faster and fairer way that would occur if left entirely to individual choice.

Do I believe Corbyn and his policies are the answer?

To be honest, I don’t know.   

I support the thrust of most of the policies as stated in Labour 2017 Manifesto.  

An obvious point I disagree with his support of Brexit, but this hardly seems a reason to support the Conservatives instead!

I’m ambivalent about its approach to workplace rights. I would prefer an approach that involved creating more freedom and genuine flexibility (say with a basic income), rather than more rules. But I do accept that something has to be done.

The most socialist component of his policies is that of nationalisation.  While I do believe that private property make people generally better off, I am less convinced when it comes to  ‘utility’ industries like rail and energy.  As a result, I am supportive of these returning to public ownership, though this shouldn’t be seen as a guaranteed solution; governments are also capable of running organisations contrary to the public interest.  Also, I’d note that nationalisation doesn’t have to mean centralisation – there have been some great programmes involving local groups running utilities and transport.

I would worry if I thought Corbyn intended to bring all industry within government control, but I don’t get that sense.  Likewise, I don’t think he believes that a government has all the answers or can solve all problems.   Instead, he seems to show an awareness that there’s a tradeoff between freedom and rules that allow individual well-being, and I’m not convinced his position is a million miles away from my own.

There’s a temptation for the left to paint politics as class war, where the goal is to destroy those that are successful.  I prefer a more inclusive approach, where all are given opportunities, and all who support the public interest are welcomed.  Others may disagree, but I found Corbyn’s campaign pleasingly inclusive.

That said, I do have other concerns.  Firstly, understandable as it is (given how many people have been ignored by our political system), I am worried by the tendency of a small minority in the party towards change by undemocratic means.

But more critically, I’m not convinced Corbyn will be able to work with other parties and convince sceptics to deliver his policies (I don’t believe major political changes should occur without widespread support – say over 60%).  Logically, this isn’t a reason to not support him, or to prefer another five years of the same.  But I do worry that he won’t deliver, and then people might use this as proof that progressive, sustainable policies don’t work in politics.

 

Overall, though, given my conviction that we do need changes like these, I feel justified in supporting Corbyn and his policies.  And I’m not worried about him wanting to bring about a totalitarian state.

Six months of reading

The last six months has been a particularly enjoyable and productive time in terms of reading, though I think my ‘to read’ list has still grown rather than shrunk.  A lot of the books are aimed towards getting me ready to go back to University in September, and I certainly wouldn’t recommend all of these to everyone I know, but I still thought some people might be interested in what I’ve read so far this year (in chronological order).

 

Leaving Alexandria, by Richard Holloway (UK) (US)

I enjoyed this thought-provoking memoir by the former Bishop of Edinburgh – it didn’t shy away from difficult questions of imperfect faith in an imperfect world.  

Think Like a Freak: Secrets of the Rogue Economist, by Levitt and Dubner (UK) (US)

An easy read which gave me a few interesting insights, though I’ve possibly read enough of these kinds of books that I’ve started to find this kind of thinking normal rather than freakish.

The Unseen World, by Liz Moore (UK) (US)

A surprisingly emotional novel about a girl, Ada Sibelius, struggling to understand the world and how she fits into it.  

Doing Good Better, by William MacAskill (UK) (US)

This was a great book on effective altruism and how best to make good decisions in your career and in life.  I blogged about it here.

The Rage against God, by Peter Hitchins (UK) (US)

Journalist Peter Hitchins, brother (and opponent) of atheist Christopher Hitchins, writes of the harm that arises when humans attempt to destroy God, with particular reference to the Soviet example.

Algorithms to Live By, by Brian Christian (UK) (US)

This book, subtitled The Computer Science of Human Decisions, highlights the parallels between the decisions computers make and those that we make.  

100% Christianity, by Jago Wynne (UK) (US)

This is aimed at Christians, particularly those who may be struggling to see why Christianity matters and how it can change our lives today, even in a city like London.  

The Econocracy, by Joe Earle and Cahal Moran (UK) (US)

I really enjoyed this analysis of how economics has become the preserve of experts, taught to unquestionably accept assumptions that are wrong, and how we might make economics better reflect our values.  I blogged about it here.

Building the New American Economy, Jeffrey Sachs (UK) (US)

I read this after attending a talk by the author and found it good, if a bit light on detail – it talks about the potential to make the US economy smarter, fairer and more sustainable.  

Honesty, by Seth King (UK) (US)

Although quite depressing, I enjoyed this novel of two young men coming to terms with themselves and first love in the southern states of America.

Gay, Straight and the Reason Why, by Simon LeVay (UK) (US)

Many people (both conservative and progressive) hold their views on sexual orientation (and gender) as a matter of faith, but in reality it is something that science is learning more and more about, and I was keen to learn what we actually know and what we’re still finding out.

Different Eyes: The Art of Living Beautifully, by Steve Chalke and Alan Mann (UK) (US)

A short book on Christian ethics, but I ultimately found it a bit forgettable.

The Boy made of Blocks, by Keith Stuart (UK) (US)

A beautiful story from the point of view of a father, struggling to cope with a son with autism.

Dear Lupin, by Roger Mortimer (UK) (US)

For several years I had been meaning to read this collection of letters from a father to his son, but I found it quite disappointing – hard to relate to either the father or the son.

Rethinking the Economics of Housing and Land, by Ryan Collins, Lloyd and MacFarlane (UK) (US)

An excellent book on one of the biggest challenges to society – why standard economic approaches fail to lead to good outcomes.  I blogged about it here.

The Philosopher’s Toolkit, by Julian Baggini (UK) (US)

This book from my pre-course reading list was good for learning some of the terms and approaches used in philosophy.

A Brief Inquiry into the Meaning of Sin and Faith, by John Rawls (UK) (US)

20th century philosopher John Rawls is most famous for his Theory of Justice, which I confess I haven’t yet read, but I found his final undergraduate dissertation thought-provoking, particularly his contrast between the natural/objective and the personal perspectives on relationships.  I disagreed with some of the logic and conclusions (as subsequently did Rawls), but it has shaped my thinking.

From Bacteria to Bach and Back, by Daniel Dennett (UK) (US)

This is a very recent book which gave me a good overview of biological, cultural and technological evolution, and the helps inoculate the reader against the overly simplistic perspectives that can easily entice thinkers in this field.

Free Will, by Sam Harris (UK) (US)

This is a very short book, and ultimately quite disappointing – much more focussed on criticising other viewpoints than providing a clear alternative.

Doughnut Economics, by Kate Raworth (UK) (US)

The best book of the list – it considers how many assumptions of standard economic are increasingly harmful, and how we could do better in the 21st century. I blogged about it here.

Conversations on Ethics, by Alex Voorhoeve (UK) (US)

This was another book of my university pre-reading list.  It is presented as a set of conservations with quite a broad range of contemporary philosophers.  Some I had read of, some were new to me, but I enjoyed seeing the range of perspectives.

The Zero Marginal Cost Society, by Jeremy Rifkin (UK) (US)

This book optimistically describes how technology and collaboration will lead to a transformation of capitalism.  The start was a bit of a struggle, but it got much better.

Natural Justice, by Kenneth Binmore (UK) (US)

I was introduced to Binmore by Conversations on Ethics, and he is definitely my kind of philosopher – pragmatic, rational and aware of the limitations of any model.  In this book he proposes that much of what we consider ethics arises from societal coordination problems, allowing us to analyse it using game-theory approaches.  I blogged about this book here.

Debating Religious Liberty and Discrimination, by Corvino, Anderson and Girgis (UK) (US)

The news these days is full of stories highlighting the tension between maximising liberty and minimising harm to individuals, particularly with respect to free speech and discrimination.  I found this book helpful in directing my thinking, though ultimately I have come to quite different conclusions than either the position proposed by Corvino, or that proposed by Anderson and Girgis.

The Precariat, by Guy Standing (UK) (US)

If The Zero Marginal Cost Society was a touch optimistic, the Precariat makes much more depressing reading; it describes a world in which a majority lack hope and genuine opportunity, for too many reasons to hope for a simple solution.  

I Was told to Come Alone, by Souad Mekhennet (UK) (US)

This got a good review in The Economist, and I wasn’t disappointed – German-born journalist Mekhennet describes her life experiences and efforts to understand the rise of Jihadism in the Middle East and in Europe.  

The Retreat of Western Liberalism, by Edward Luce (UK) (US)

Also picked up based on a review in The Economist, this consideration of the challenges the world is going through (eg Brexit, Trump, fake news) had some interesting thoughts, but I struggled to get a clear message from it.