We went to see the Rolling Stones on Sunday evening at the SBC Stadium in San Francisco.
I had expected this to be a rather pitiful experience, like watching an elderly performing animal in a zoo – a historical curiosity rather than an enjoyable night out.
How wrong we were. Watts, Wood, Jagger and Richards all seem in excellent shape – somewhat surprisingly, given what they have put their bodies through over the years. They are all heroin-thin, and full of energy. Jagger, in particular, danced, pranced, ran and jumped over the stage as if he was half his 62 years.
They peformed Stones classics such as Honky Tonk Women, Satisfaction, Sympathy for the Devil, Get Off My Cloud, Miss You, Brown Sugar, Start Me Up, and some tracks from their new album, which sounds as if it is a return to classic Stones form. Some of their numbers were hits before I was born.
I couldn’t help feeling that the edgy rock and roll of the Stones compares favourably with Paul McCartney’s much tamer, more nostalgic tour playing old Beatles and Wings records. McCartney is looking back; the Stones are still in the game.
There was a tremendous spread of ages in the crowd – from elderly rockers, reliving and remembering their youth, to teenagers seeing the Stones for the first time. The entire stadium danced throughout the warm San Francisco evening.
Seeing them live it is obvious that Charlie Watts is underrated. His assertive drumming creates a disciplined framework, setting clear boundaries for his more anarchic friends. Richards was playing his 5-string guitar most of the time, most noticeable in his trade-mark riffs in Honky Tonk Women, Brown Sugar, and Start Me Up. Ronnie Wood, who still looks like his old band-mate, Rod Stewart, accompanies Jagger and Richards not only with his distinctive playing but with energy and a stage presence that makes you forget that he’ll soon be getting his bus pass.
I am confused about why Martha Kearney chose to ask the two Davids what sort of underwear they wear. If a male interviewer had asked a female politician about her knickers, he would be thrown off the radio. And rightly so.
I have two older sisters, and no brothers. So I obviously learned some of my language from them. When I went to boarding school, at the age of ten, it took several weeks before I realised that referring to my own underwear – Y-fronts, since you ask – as my "knickers" was not likely to make me popular with the other boys. Or not the ones I wanted to be popular with.
The Center for Global Development (which is where I work) has a new blog on international development issues.
… our own new effort at CGD has plenty of company – and plenty of competition for the limited attention span of our audience. Of course, as any development economist knows, competition is good. We are happy to be joining in such a lively marketplace for ideas and hope in our small way to make it livelier still.
David Davis has set out his stall on the size of the state and tax cuts:
A Conservative Government led by David Davis would introduce a new ‘growth rule’, ensuring that public spending increases by one per cent less than the trend rate of growth in the economy. This would allow for a reduction in the nation’s tax bill of £38 billion a year by the end of the next Parliament, which could be used to cut the basic rate of tax by 8p in the pound.
That sounds nifty. Public spending up, tax bills down, without adding to borrowing. All through the miracle of economic growth.
Is this as good a rule as Wat Tyler, Euroserf, The Right Way, and Andrew seem to think?
No, it isn’t. Here’s why:
- It locks in whatever level of spending a Davis Government inherits – which might follow a pre-election spending spree, or a cyclical spending trough.
- It chokes off the automatic stabilizers, adding to the boom and bust cycle. Public spending should vary counter-cyclically. Spending on benefits rises naturally when economic growth is slow. This rule would force cuts in discretionary spending to offset those cyclical increases. (An alternative formulation of the rule would have trend growth of spending slower than trend growth in GDP; this is avoids the mistake of being pro-cyclical, but at the expense of being impossible to monitor and enforce).
- It is too blunt – it fails to distinguish government spending on goods and services, in which the government actually pre-empts the use of the economy’s resources, from transfer payments which move purchasing power from one person to another. It is not at all obvious that these two – which have very different economic effects – should be subject to the same target growth rate.
- It is too centralist – a central government target for General Government Expenditure means that central government has to set limits on local spending and stifle local decision making. But then you cannot delegate choice to local communities to spend less, or more, on their local services. Under this rule, if local communities decide to pay less tax, and reduce their local services, then central government would immediately step in to expand spending and tax elsewhere in the system to compensate.
- It is not ambitious enough – it is a managerialist rule under which everything would grow a little bit every year. A change of government should be the opportunity for radical reforms to produce a smaller public sector – for example by abolishing CAP, industrial subsidies and the independent nuclear deterrent.
- It creates perverse incentives to fiddle the figures – a ceiling on General Government Expenditure creates incentives to pursue policy in sub-optimal ways such as through complicated tax reliefs instead of spending subsidies or by shifting spending to public sector corporations.
(I cannot resist making the ultra-pedantic point that the growth of public spending should be one percentage point, not one per cent, below the trend growth of the economy. This only matters because it suggests that whoever wrote the policy does not have much feel for economic statistics.)
Deciding the right size of the state is one of the most important choices any government can make. It defines the scope Government’s program and ambitions, and its attitude to the relationship between state and citizen. A simplistic rule like this does not do it justice.
Update 3 November: Check the comments. On my estimate, the Davis Rule would involve increasing spending by £30 billion a year by the end of a 5-year parliament. It would be £14 billion a year lower than if spending grew in line with GDP (not £38 billion a year lower as DD claims).
Finishing a half marathon yesterday in Silicon Valley the only water available was sugared water (misleadingly labelled "Vitamin Water"). No normal water was available for the runners. That’s a disturbing new development. You would have expected that runners would tend to have healthier habits than the population as a whole, so why would we want to drink sugar?
It is almost impossible to buy anything here in the US that is not filled with sugar. The manufacturers lace sugar into foods that you might not expect to contain sugar – such as a tin of tomatoes or beans, breakfast cereal, bread, orange juice, soy milk, salad dressing, pasta sauces, pickles and crackers.
And the quantities are large. Kellogs Crunchy Nut cornflakes are about one-third sugar by weight (about the same as a Pop Tart).
Why do manufacturers do this? Because sugar tastes nice and is addictive. You will enjoy the food and come back to buy more.
If food manufacturers were adding heroin to our food, we wouldn’t allow it. The food industry is cynically and deliberately poisoning us. It is time we forced it to stop.
Avoiding added sugars when buying staple foods requires extreme vigilance. Foods here are often misleadingly labelled, with the sugar disguised as maltodextrin, sucrose, fructose, glucose, corn syrup, maltitol, dehydrated sugar cane, fruit sugars or other equivalents. And by splitting the added sugar into these different components, the manufacturers can push sugars further down the ingredients list than if the sugars were all bundled together.
The good news is that sugar consumption here in the US is beginning to dip down, after a peak in 1998. From the mid-70s to the mid-80s, high fructose corn syrup exploded onto the scene, taking about a third of the cane and beet sugar market, adding to overall sugar consumption, and contributing to the obesity epidemic. But while the total appears to have peaked, as the graph below shows, Americans still consume more than 5 ounces (150g) of sugar per day: the equivalent of about 4 cans of coke. Apart from soda, most of this is sugar added to ordinary food items by the food processing and catering industries.
Here is an article I wrote a while ago explaining the biochemistry of sugar consumption. Added sugar will be the new tobacco: it is highly dangerous, addictive and poisonous, and is central to chronic health problems afflicting affluent societies today.
The Conservatives have demanded an urgent enquiry by Sir Gus O’Donnell, Head of the Home Civil Service and Cabinet Secretary, into allegations that David Blunkett has broken the Ministerial Code by failing to seek the approval of an independent committee before becoming a non-executive director of a DNA testing firm.
Whatever the merits of this particular case, we should kill off the idea that it is the job of civil servants to investigate the behaviour of ministers.
Sir Robin Butler set a ill-judged precedent in 1994 by agreeing to investigate allegations against Jonathan Aitken. In the absence of any powers to carry out any sort of investigation, he took Aitken’s word that he had done nothing wrong, and cleared him of improper behaviour. Later in the same year he did the same by clearing Neil Hamilton of receiving bribes from Mohammed Al Fayed. In both cases, he was subsequently proven wrong. That he was unable to discover the truth is not entirely Lord Butler’s fault; but he should never have accepted the task in the first place.
It is not civil servants’ job to hold Ministers to account. The job of civil servants is to serve the elected government, not to police it. Ministers are accountable to Parliament, and through Parliament to the public.
The current version of the Ministerial Code says this about enforcement:
Ministers are personally responsible for deciding how to act and conduct themselves in the light of the Code and for justifying their actions and conduct in Parliament. The Code is not a rulebook, and it is not the role of the Secretary of the Cabinet or other officials to enforce it or to investigate Ministers although they may provide Ministers with private advice on matters which it covers.
So the Ministerial Code explicitly excludes the Secretary of the Cabinet from having to try to enforce the Ministerial Code, and rightly so. If Parliament wishes to ask an independent person to investigate the conduct of a Minister, it should appoint somebody to carry out this task. Neither the Conservative Party, Parliament nor the Prime Minister should ask civil servants, who owe their loyalty to Ministers, to investigate them.
Update 31 October: According to the BBC, the Prime Minister has asked the Cabinet Secretary to see if Mr Blunkett’s shares, held in trust for his sons, breached the ministerial code. As quoted above, the Ministerial Code is absolutely clear that it is NOT the role of the Secretary of the Cabinet to enforce the code, and if Gus has any sense he will refuse.
There are so many people fleeing from the new attacks on villages that all we can do is scramble to keep up with registrations and emergency distributions for the new arrivals: people are coming to the camps, particularly the bigger ones clustered around state capitals, in droves.
Families – mostly women and children – have just plopped themselves down underneath some shady trees with their meagre bundle of belongings, usually some sleeping mats and a few old cooking pots. They hang their clothes and blankets in the branches and wander around the camp looking for the rest of their family and their tribe. It’s obvious they need services – food, water, medical attention – but when you speak to them all that they ask for is security. "It’s good to be here. No we are safe."
Jack Straw, at the UN Summit on 17 September:
I believe that it will be the agreement on our Responsibility to Protect that will be seen in the future as the decision of greatest significance. If we follow through with that Responsibility to Protect, then never again will genocide, ethnic cleansing and crimes against humanity be allowed to take place under our noses with nothing done.
A propos of not much – some meta-blogging thoughts:
- The irrepressible Worstall will be wetting himself to be in the running for this - The Blooker Prize, a prize for books based on blogs or websites. (I have never understood the value of dead-tree versions of the internet myself.)
- On the subject of Timothy, is it just me or is his site now so laden with advertisements, sitemeters etc that it takes an age to load? Most of the time it doesn’t matter, because I see all I need in my RSS reader; but it has become a real deterrrent to going to the site itself. Or is that just because I am many thousands of miles away?
- Typepad seems to be down quite a lot recently?
- As well as being very slow to load, Truth Laid Bear rankings seem very volatile.
- Google’s new online feed reader is way too slow to be useable
- Not so many blogs quote the New York Times columnists now that they are behind a $50 a year TimesSelect barrier – Krugman, Kristof et al must be in a rage
I am full of admiration for Justin at Chicken Yoghurt – he writes brilliantly, and is full of passion about all the right things. But I do want to challenge his criticism of the use of consultants by DFID before it enters into the blogosphere as an accepted meme.
I know what you are thinking – in the immortal words of Mandy Rice Davies – "well he would say that, wouldn’t he?". Yes and no: I do have some criticisms of DFID’s use of consultants, but the issue is more nuanced than Justin suggests.
Supporting international development is about more than merely transferring resources. One of the things we can do is "transfer knowledge" – for example, by providing specialist expertise which is not available in the developing country. In the words of the famous cliche: "Give a man a fish, you feed him for a day. Teach him how to fish, you feed him for a lifetime." Many people who are sceptical about the value of aid in general are more ready to support the use of development assistance for skills transfer, and to support building institutions and help implement reform programmes that will benefit the recipient country in the long run.
And that is, for the most part, what consultants employed by DFID do. They go to developing countries and advise on everything from the best type of tarmac to use on a road to the IT system needed for the administration of courts. They develop training materials for teachers, or design supply chain logistics to get vaccines to remote rural areas. They advise Governments on how to create an environment for small businesses, priorities for trade liberalistion, improvements in tax administration, how to set up independent electoral systems, or how to train farmers to use fertilizers and new seeds.
Now DFID could employ an army of civil servants to do all this. But it makes more sense to use consultants. Many of these are specialists in their field. Many have themselves been successful in business or other walks of life, and now choose to spend some or all of their time transferring their expertise to developing countries. Demand for these skills fluctuates, according to priorities in developing countries, and depending on the latest trend in development thinking. As I pointed out in my recent paper, in the 1960s there were about 16,000 British staff working on contract to developing countries, receiving a salary supplement from the Overseas Development Ministry. By 1990, this had been reduced to almost none. Those roles were instead being filled by consultants.
I expect there are some people who take the view that employing staff in the public sector is always better than using private sector contractors. Civil servants do not look quite so cheap when you take into account the expectation of job security, a public sector pension, and all the costs of recruitment, training, sickness, holidays, maternity and paternity leave, and administrative overheads – all of which are bundled together in the price we pay for consultants. Some would prefer to use public employees for ideological reasons. I would prefer to maintain the flexibility to use scarce aid resources as efficiently as possible – buying in just the right mix of skills that are needed in a particular place at a specific time.
Justin says:
We have know way of knowing if £270m of our money has been spent in any way efficiently.
That just isn’t true. DFID has an extensive system for tracking how money has been spent, and for appraising the individual impact of each aid project and programme. It has an independent evaluation unit, which analyses the effectiveness of DFID’s approach and makes recommendations for improvements in the future. And it has both internal audit and external audit and value for money analysis by the NAO and the Public Accounts Committee. But it makes sense to analyse the cost effectiveness of each project and programme, including all the resources used, not to try to measure the impact of the use of computers, or secretaries, or consultants across the whole of the organisation.
Chris is right when he remarks in the comments at Chicken Yoghurt that the public sector rules do often lead to perverse incentives. For example, the current limit on headcount in civil service departments recreates an incentive to contract out activities that could be done more cheaply internally – whereas a limit on "running costs" would prevent the bureaucracy from growing but would be neutral about whether it was more cost effective to use civil servants to perform those tasks or buy in the services needed.
I do not mean to imply that there is no room for improvement in the way that we provide technical assistance. The UK still spends a relatively large share of total aid on technical assistance. We should be better at considering whether we can use those resources to help developing countries develop and retain their own skills (for example, by providing incentives to offset the brain drain); and facilitate south-south learning. We do not have good systems for appraising the skills of technical experts (by definition, they know more about their subject than we do). We are not particularly good at training technical experts in the more general skills of communication and skills transfer, and we do not have good metrics to measure their performance. This agenda was identified by the Berg Report back in 1981, and it still remains to implemented.
But while there is clearly room for improvement in the provision of technical assistance, that is quite different from the suggestion that all the money spent by DFID on consultants is wasted, or used to peddle privatisation. Knowledge transfer is an important component of the support we can provide to developing countries, and it is entirely rational for DFID to make extensive use of consultants to deliver that goal.
The lovely lady and I were at a conference in Sonoma on Thursday and Friday, so we decided to spend the weekend at Harbin. Harbin is a California institution – a hippy commune, established in the early 1970s, where people come for yoga, organic vegetarian food, thermal springs, wandering around naked, escape, and generally wearing tie-dye kaftans in the evening.
As you all know, I am reality-based, and I don’t go in for transcendental bullshit of any sort. I can tolerate yoga only if there is guaranteed to be no chanting – so not even the prospect of topless girls doing yoga persuaded me to take part at Harbin.
Ignoring the spiritual stuff, the place is very relaxing – we loved the combination of sunshine, running on remote trails and cappuccinos by the pool. The hippy culture is fascinating to observe, and mostly harmless. There were lots of naked bearded men meditating in the sunshine, and a large number of somewhat neurotic, new-age women of all ages.
For those of us brought up with English sensibilities, there is something odd about having dinner in the café and knowing what everyone you are eating with looks like naked.
Harbin does not allow cellphones, and the only internet connection is dial-up (no wifi). There are no televisions either. That is nice enough for a few days, but I was beginning to feel cut off by the time we left.
Lots of people go to Harbin to escape, to de-stress and de-tox. I would have expected that some moderate exercise – for example, jogging, hiking or swimming – would be part of a strategy for improving your sense of well-being. But physical exercise, other than yoga, isn’t part of the Harbin culture at all, and we were the only people out on the many miles of trails in the hills of the Harbin property and beyond. In my view, running in the early morning sunshine on completely empty trails is a perfect way to start the day and set yourself up for a huge, vegetarian, organic breakfast, and then many long hours by the pool with a stack of books that you are overdue to read.
Verdict: great fun, if only as a spectator, as long as you can do without the internet for a few days.
What Tony Blair said in Parliament after Gleneagles is not true:
On aid and debt relief, in respect of the new money aspect, I am somewhat puzzled by some of the people who have been claiming that it is all recycled money. It is absolutely clear to me that the EU commitment is additional, the Japanese commitment is definitely additional, and as far as I am aware, Canada and the US are agreeing to double their aid from their present position. Although people keep saying that there is an issue about whether it is new money, it seems to me certainly true that it is, at least the vast bulk of it.
…
If we deliver on what has been promised, yes, we can say that the millennium development goals will be met; but, obviously, we have got to deliver on it.
Here are the numbers of the additional pledges made during 2005. The UN Millennium Project estimated that in 2010, ODA would need to be $152 bn (in 2003 prices) That’s about $160 in 2004 prices.
My estimate based on DAC projections is that $114 bn had been pledged by September 2004 for 2010; which has been increased during 2005 to pledges totallying about $128bn. That is an increase in pledges during 2005 of just $14 billion. Of that, the bulk ($9 billion) is due to promises from Germany and Italy, both of whom have cautioned that their increases are subject to fiscal priorities at the time. There would need to be an additional $33 billion pledged by 2010 to reach the UN Millennium Project estimate of what is needed.
It is true that if $128 billion were achieved, this would be an increase of around $50 billion compared to 2004 levels. But at most $14 billion of that increase is additional money pledged during 2005, and it is not safe to count on about half of that.
John Densmore, the drummer for The Doors, has turned down $15 million offered by Cadillac last year for the right to use “Break On Through” to promote its luxury SUVs:
People lost their virginity to this music, got high for the first time to this music. I’ve had people say kids died in Vietnam listening to this music, other people say they know someone who didn’t commit suicide because of this music…. On stage, when we played these songs, they felt mysterious and magic. That’s not for rent.
Apparently Ray Manzarek and Robbie Krieger and not too pleased with John Densmore’s principled stance.
What would Jim Morrison think?
Here are the lyrics from Black Polished Chrome, which apparently Cadillac didn’t want to use:
Someone knew the tv showman
He came to our homeroom party
And played records
And when he left in the hot noon sun
And walked to his car
We saw the chooks had written
F-u-c-k on his windshield
He wiped it off with a rag
And smiling cooly drove away
He’s rich. got a big car.
As a public service, I have transcribed verbatim the interview with Tony Blair on the Today Programme on 16 September. You can read the full text here.
The interview touches on the Government’s draft anti-terrorism legislation, the UN summit, development, Iraq, and Tony Blair’s legacy of reform of public services.
If I have time, I will post soon about the Government’s proposed anti-terrorism laws. In the meantime, I will let the Prime Minister’s words speak for themselves:
let’s be absolutely clear: there will be all sorts of people who say for all sorts of reasons: "look, I understand why the terrorists do it, and you know, you can sympathise with their motivation." Now I happen profoundly to disagree with that, but I am not suggesting that you make that a criminal offence. Er, what I am suggesting should be an offence is somebody who in effect by glorifying is inciting and is saying to people – particularly impressionable people – and we know, look, that this is a modern phenomenon that we have, this extremism based on a perversion of Islam – is in effect saying to impressionable young people: this is something you should do.
I remain unclear what statements the Government wishes to make illegal. Are there statements which are not incitement, which is already illegal, and which are not merely expressing sympathy with a terrorist’s motivation, which Mr Blair does not think should be illegal. Can anyone think of an example of such a statement?
Americans call public spending that they don’t approve of "pork". Apparently the term comes from the idea of the government giving every voter a barrel of pork (smoked pork products were, at one time, shipped in barrels).
And by golly there is a lot of it here in the United States. This is partly because Congress has much more power over the budget than does the British House of Commons. The British system has a rule that only a Minister can propose increases in expenditure or taxation; it is for the House of Commons then to decide whether to grant the money needed. In the US, by contrast, Congress can insert additonal spending in almost any bill.
President Clinton was briefly given the power to veto particular items (the "line item veto"), and he used it 82 times in 1997 to delete unnecessary expenditures in 11 spending bills. The savings to taxpayers total nearly $2 billion over five years. But the Supreme Court struck down the line item veto in 1998, and now the President has to accept the pork inserted in the Budget by Congress, or send the whole thing back.
In August 2005, Congress passed, and President Bush approved, a transportation bill stuffed with pork. The bi-partisan pressure group Taxpayers for Common Sense identified 6,371 pieces of pork – at a cost of $24bn. These included $450m for two bridges in sparsely populated Alaska and $2.3m for landscaping along the Ronald Reagan highway in California. There was also funding for a snowmobile trail, a deer-avoidance system and something described as "dust control mitigation" on rural roads in Arkansas.
And that is why this porkbusters campaign is such a good idea: use the blogosphere to identify a comprehensive list of pork. Instapundit explains:
Identify some wasteful spending in your state or (even better) Congressional District. Put up a blog post on it. Go to N.Z. Bear’s new PorkBusters page and list the pork, and add a link to your post. Then call your Senators and Representative and ask them if they’re willing to support having that program cut or — failing that — what else they’re willing to cut in order to fund Katrina relief. (Be polite, identify yourself as a local blogger and let them know you’re going to post the response on your blog). Post the results. Then go back to NZ Bear’s page and post a link to your followup blog post. The result should be a pretty good resource of dubious spending, and Congressional comments thereon, for review by blogs, members of the media, etc. And maybe even members of Congress looking for wasteful spending.
Of course, one person’s pork is another person’s essential infrastructure project or welfare payment, and I’m not sure who will decide if each entry truly qualifies. We’ll have to see whether the quality of catalogue can be maintained. I’d be inclined to have a community voting system to determine which spending is the most egregiously porky.
In general, I’m an admirer of much of the United States’s system of government. But their inability to exert any sort of fiscal discipline is not an advertisement for their budget process. Perhaps the blogosphere can help to shed some light on the worst excesses and put pressure on Congress to do better?
I just love this idea. Religious fundamentalists are picketing a planned parenthood health centre in Southern Pennsylvania. Staff and patients are being harassed.
So the centre has set up a pledge bank by which people who support the centre and want to stand in solidarity with them can pledge an amount which increases for each picket that shows up:
If you pledge 30 cents per protester, and PPSP has 100 protesters in October and 160 protesters in November, your donation would be 78 dollars for the entire two-month campaign.
The centre will have a sign outside which tracks the number of pledges, so that the protesters know that the more pickets they send, the more the financial support for the centre will grow.
(Hat tip: Warren Ellis)
Those of a right-wing disposition may care to look away now.
Robert Reich’s 2004 book, Reason, argues that liberals* have twice saved capitalism from its own excesses:
The first time was in the early 1900s. By then, captains of American industry had monopolized the economy into giant trusts, American politics had sunk into a swamp of patronage and corruption, and many factory jobs were unsafe – entailing long hours of work at meager pay, often exploiting children. In response, liberals championed anti-trust laws, civil service reforms, and labor protections.
The second save occurred in the 1930s, after the stock market collapsed and a large portion of the American workforce was unemployed. Then liberals regulated banks and insured deposits, cleaned up the stock market, and provided social insurance to the destitute.
Both times, liberal reformers were accused of interfering in the free market. But in both instances, liberal reformers prevailed. They did so by appealing to public morality and common sense.
It is time, once again, for liberals to restore confidence in our system and save capitalism from itself.
This seems interesting in two ways. First, Reich is right that progressive politics has rescued capitalism from a tendency to self-destruct. In this way, progressives have enabled capitalism to continue to serve its purpose as a driver of innovation and prosperity in society. Pure laissez faire policies would have failed, resulting in a collapse of the capitalist project. Second, this is a powerful narrative for the progressive left to adopt. Progressive politics should define itself not in opposition to capitalism but as its guardian.
Is Reich right that it is time, once again, for liberals to step in to restore confidence in capitalism? I think he probably is: we are seeing structural challenges which capitalism does not seem to be able to solve on its own terms.
The origins of capitalism’s next crisis?
To my mind, the heart of the problem of capitalism today is its interaction with politics in modern democracies. Many of us want to live in a world in which citizens elect and control governments; and governments, in turn, regulate business to create well-functioning markets. But over the past quarter of a century we have an increasing sensation that this has been reversed. To an increasing extent, businesses fund the political process and much of the media, and so control government; and government increasingly controls the citizen.
That reversal of the normal flow, in which businesses rather than citizen determine government decision-making, is increasingly shifting our societies away from the outcomes which we expect from well-functioning markets. The consequences include:
- The large and widening gap between rich and poor within developed countries.
Top earners now earn 300 times as much as the bottom earners, compared with 20 times as much only twenty years ago. There is no economic rationale for the salaries earned by the super rich – far above their economic value on any reasonable measure – but the forces of corporate governance have been captured and seem powerless to bring the irrational exuberance of excecutive pay into line with the fundamentals. - The large and widening gap between rich countries and poor countries.
The inequality between rich and poor is at historically unprecedented levels, and poor countries (such as many in Africa) appear to be trapped in a future of low growth. The traditional mechanisms of catch-up – such as trade, technology and knowlege transfer and migration – are being deliberately choked off by the rich countries, apparently determined to pull up the ladder behind them. - A failure to grapple with the world’s most important long term challenges
A drive to short term economic performance is leading us to ignore critical long-term challenges. We are unable to create incentives for our markets to tackle the growing environmental crisis. We face an obesity time bomb, driven by the cynical and deliberate efforts of the processed food industry to sell us food that is addictive but unhealthy. We face an alarming growth of drug-resistant diseases, caused by mismanagement of existing pharmaceuticals, and an unwillingness to invest enough in future medicines. - Erosion of confidence in financial services: heads-I-win-tails-you-lose
The financial services industry is failing in its task of ensuring an efficient allocation of capital. Financial services companies earn large salaries investing our savings on our behalf, which is an economically valuable activity if they do it well. I don’t expect traders and investors to anticipate expected profits in 15 years time within a margin of 50 percent either way. But I do expect them to be able to distinguish a viable business with real customers, revenues and profits from a company with no economic foundations such as Enron or Worldcom. Furthermore, we have reneged on society’s contract – implicit or explicit – to provide a decent life after a lifetime of work. The companies that took "pensions holidays" when the stock market was rising – unilaterally choosing not to make contributions for their employees’ pensions – now walk away from their obligations when pension funds underperform.
These are not short term, temporary problems, like the US current account deficit. These are deep, structural challenges that require enlightened, intelligent intervention to restore the conditions in which free markets are able to deliver the kind of society we want.
To achieve this, we have to address the relationship between corporations and government. That may require relatively modest, and quite inexpensive changes such as campaign finance reform and an adjustment of the legal status of companies. It is not a plea for wholesale regulation and government interventionism: but rather to create a different sort of relationship between government and business, so that it government more responsive to the collective, long-term welfare of society, and less to the short term commercial pressures of powerful firms.
Fly-by-wire capitalism
The F117A Nighthawk fighter aircraft is aerodynamically unstable. It stays aloft because a computer constantly adjusts the flaps of the plane to keep it from falling out of the sky. The plane is faster as a result of this design, but it needs constant trimming and adjustment to make it work.
Capitalism seems to be the same. The very forces that make it so effective at generating innovation, growth and incentives also make it unstable. The rewards that drive innovation also reward rent-seeking and creation of monopolies. The accumulation of wealth that motivates the most inventive people in our economy results in an accumulation of power that we do not find acceptable. Capitalism is a great way to deliver the benefits of a dynamic, fast-moving economy; but like the F117A, it needs an occasional intervention to prevent it falling into a tailspin.
Retaking the agenda
Conservatives and neo-conservatives have succeeded in framing liberals as idealogues, driven by their political agenda to undermine the efficient functioning of proven mechanisms to deliver growth, jobs and prosperity.
Liberals should resist this. It is Conservatives who claim that unr
egulated markets are not only efficient but also the only morally justified way to organise society: and hence their ideology that hinders understanding of how markets can be effective at delivering the kind of society we want to build. Liberals, by contrast, are pragmatists who see competitive markets as an essential and efficient way to deliver prosperity and opportunity for everyone; and who recognise that there is a role for Government to create the conditions in which they will do so consistent with our vision of how we want to live.
Conclusion
Perhaps I am too pessimistic about the ability of democratic, liberal societies to adjust course. But Reich’s examples are compelling: in both cases, intervention was needed to put the evolution of capitalism back on course.
We are facing failures of capitalism that are potentially cataclysmic: whole generations of the developing world condemned to unacceptable poverty, financial systems which lack credibility, and ticking time-bombs, visible to us all, that we are unwilling to defuse. Is it time for liberals, once again, to save capitalism from itself?
(* Note that the word "liberal" is being used here in the American way, not with the European meaning).
Tim Worstall reacts to an article by Bill Easterly which I quoted here last week. Bill Easterly argues that we do not have evidence to support the view that countries are caught in a poverty trap, or that countries can be helped to "take off" in a virtuous circle of growth and rising prosperity.
Tim says:
But when a respected academic in the field (as Bill Easterly is) says that the basic structure of the problem has been misidentified, and that thus our solution is completely wrong, don’t you think we might want to sit down and have a little discussion? Instead of throwing money at it in a way that we know is incorrrect?
Of course, that isn’t what Bill Easterly says at all. He would be horrified at being misrepresented in this way.
This is not a debate about whether aid works (which we know it does, on average). Nor is it a debate about the many good things that can be done with aid to help countries to grow and reduce poverty. Bill Easterly would agree with Jeff Sachs and just about every other development expert that these are good things to do, and we should do more of them.
At the heart of the debate is a different question. Bill Easterly (and many of his colleagues at CGD, including me) think that Jeff Sachs overstates the effect that more money, by itself, will make to developing countries. We think that there are many things that poor countries can and should do to help themselves, most of which go under the general banner of improved governance. We think that there are many things that rich countries can and should do, over and above giving aid, to help poor countries, including opening our markets, reducing conflict, tackling corruption, intelligent migration policies, tackling climate change, and reducing the arms trade. Aid is an important part of the story, which definitely helps, but it is only part of the story. Bill Easterly’s point is that it is simplistic to think that we can throw money at the problem and think that this alone will solve it.
In a debate between experts like Bill Easterly and Jeff Sachs, the common ground is often taken for granted, and the discussion focuses areas of difference. To an outsider it may look as if views are heavily polarised. In reality, there is a great deal of agreement: neither Bill Easterly nor Jeff Sachs would say that aid alone is enough; and neither would say that aid is not effective in reducing poverty. They would both agree that the rich countries have a moral duty (as well as it being in their self interest) to give more aid, and to give that aid better. They would agree that there are many other things that the goverments of poor countries and rich countries should do to accelerate the reduction of poverty.
Nothing like Tim’s conclusion follows. Nobody thinks that "the basic structure of the problem has been misidentified". Nobody thinks "our solution is completely wrong". There is a remarkable amount of consensus about the causes of the problem of poverty. There is very widespread agreement, supported by evidence, that aid is effective in promoting sustained economic growth, as well as directly alleviating the effects of poverty in the short term. Far from "throwing money at it in a way that we know is incorrrect", we have clear evidence that aid expenditure is one of the most productive investments of funds that we know of, yielding higher returns than other public or private investments.
So, Tim asks, "don’t you think we might want to sit down and have a little discussion"? There are endless discussions on all this, including one at the United Nations next week. The last thing we need is more discussion. The international community made a historic commitment at the beginning of this Millennium to a set of goals of profound importance, including to halve the proportion of people living in poverty by 2015. We know that we are not on track to meet those goals. Furthermore, we know what we could do to meet them. It would not be particularly expensive for the rich countries – indeed some of the measures, such as opening our markets, would make us better off. The summit next week is an opportunity for the rich nations to recognise that we are not doing enough to live up to the goals that we have set ourselves. We should agree now to do the simple and inexpensive things, which we know work, to put the misery of world poverty behind us.
President Bush, at 10.30am this morning, arriving in Mobile Alabama:
The good news is — and it’s hard for some to see it now — that out of this chaos is going to come a fantastic Gulf Coast, like it was before. Out of the rubbles of Trent Lott’s house — he’s lost his entire house — there’s going to be a fantastic house. And I’m looking forward to sitting on the porch. (Laughter.)
Err, that would be the same Trent Lott who had to resign as Senate majority leader in 2002, for making apparently nostalgic remarks about racial segregation:
When Strom Thurmond ran for president, we voted for him. We’re proud of it. And if the rest of the country had followed our lead, we wouldn’t have had all these problems over all these years, either.
Could President Bush have thought of a more inappropriate way of empathising with the victims of Katrina?
No good ever comes of trying to change someone’s mind about abortion. So I should know better than to react to Andrew’s argument against abortion at The Sharpener, which has already generated a lot of discussion over there (noticeably, among a bunch of mainly men rather than women). But my first degree was in Philosophy, so I can’t resist an argument about ethics. Especially when I think the discussion would be helped by a little more clarity and precision.
As is often the case with people who are against abortion, Andrew gently glides between two different arguments for attributing rights to a foetus:
- One argument is that the foetus already has characteristics that give it moral status.
- A separate argument is that the foetus has potential to become something that has moral status.
If you believe that the foetus has a moral status, then there is the further question of how to balance the interests of the foetus with the interests of the mother. But if you don’t believe that the foetus has a moral status then this issue does not arise.
So let’s look at the two arguments for giving moral status to a foetus. (Like Andrew, I am not going to address those who are against abortion for religious reasons. If you have an invisible friend who has told you that a foetus has rights, then none of what follows is going to convince you.)
What characteristics does the foetus have that would give it moral status because of what it is? An analogy with our treatment of other species is instructive: it seems that we generally grant moral status in proportion to an animal’s consciousness. Most humans do not eat higher primates, because monkeys seem to be not only conscious, but self-aware and capable of entering into quite complex relationships. We routinely kill and eat animals that feel pain, however, such as cows and pigs, though we generally frown upon deliberately causing pain. And nearly everyone thinks there is no moral harm in stepping on an ant, because it is regarded as having a very low level of consciousness and little ability to feel pain. So we seem to think that there is some positive correlation between moral status and consciousness or self-awareness. But if that is our basis for granting moral status, the foetus would not come very far up the scale. It seems that a foetus does not feel any pain until at least 26 weeks at the earliest (a recent paper in the Journal of the American Medical Association says that that brain nerve connections are unlikely to develop enough by 29 weeks to feel pain). Even when it does begin to feel pain, on this yardstick for judging moral worth it is only reaching the equivalent status of perhaps a fish or a bird – and a foetus at an advanced stage of development would not have the level of self-awareness of a cow or a dog.
So perhaps there is something else about what a foetus is that might be the basis of a moral status, even though it has a low level of consciousness and limited ability to feel pain? Some people take the view that it has status because it consists of human DNA. But so do sperm, and we don’t generally think that sperm has moral status, so it can’t be that.
We are tempted at this point to say that a foetus is more important than a cow or a sperm because of what it may become – namely a human being. But that is an argument based on the future potential of a foetus, not because of what it already is; and we will come to that separately. It seems very hard to say that a foetus should have significant moral status because of what it already is.
So what about the second argument, that a foetus has moral status because of what it will become? For Andrew, this seems to be the clincher:
The potential for life, which I identified earlier, is paramount. … To deny the potential for life is, at least in my own opinion, morally equivalent to murder.
But what does this really mean? Taken literally, this is an argument not only against abortion but also against contraception and against chastity or sexual abstinence. If we say that every potential future life has the value of a living person, then we are bound to say that no egg should go unfertilized, and no opportunity for conception should go unconsummated. Are families who choose to limit the number of children they have – even if by abstinence – guilty of pre-meditated acts of murder against potential future human beings? We clearly have no general obligation to ensure that all potential future human beings come into existence, and so there is no general moral status for "a potential human being".
It does not appear that, considered separately, there is a convincing case for granting moral status to a foetus on the grounds of what it is; nor is there a case for granting moral status to all potential future human beings. Is there, perhaps, some hybrid case, based on a mixture of the two? Those who oppose abortion often seem to be saying that something that occurs at conception as a result of which we should begin to pay attention to the potential future human life that it embodies. But what is it about the fusing of two zygotes that gives the combination of them a morally valuable possible future that they did not have when they were separate? It is true that conception marks a moment when the range of possible future outcomes narrows, as conception settles the issues of which genes will be combined. But there remains a very wide range of possible outcomes. And why does "potential future human life" only have moral status once there is a more narrow range of possible outcomes about what that person would be like?
It is interesting to read Andrew’s original post in the light of this. The first of his three arguments (which he calls "the science") slides back and forth between the argument about potential and the argument about what the foetus already is. My view is that when you prise these two thoughts apart and examine them separately, neither stands up to examination; and there is no satisfactory explanation of how the two approaches might interact to make a combination of the two more persuasive than either argument on its own.
Because I do not think that a foetus has significant moral worth, I do not think that there is anything to weigh up against the rights of the woman. So on my view of the status of the foetus, Andrew’s second point falls away entirely. However, if you did not agree with the reasoning above, and you were still persuaded that a foetus has the same moral status as a fully grown, conscious human being, it would still not follow that there should be restrictions on abortion. There is no general duty to sacrifice your own rights to control your body to save the life of another person. For example, I do not believe that people should be compelled against their will to give away a kidney or undergo a bone marrow transplant to save the life of another person. (It might be nice if they chose to do so; but most of us would not want to make it illegal to refuse.) For similar reasons I do not believe that a woman should be forced to incubate another human being if she chooses not to; even if that means the death of the other person. (I realise that this argument also depends on the fact that I don’t think there is a moral distinction between action and inaction – but that is a topic for another day.) So even if I believed that a foetus had moral status – which I don’t – I would still favour allowing women to choose whe
ther or not to end the pregnancy.
This is a topic on which there is scope for a range of possible opinions. Andrew does not want to hear arguments of the form "if you take that argument to the extreme, you’d be condoning x". But I do think it is important to try to articulate the principles that seem to guide our judgements, and then to ask whether those principles make sense, including by considering whether we would want them applied more generally. If the principles on which we believe we are basing our judgements also lead us to conclusions that we find unacceptable, then that is surely a good reason to question the principles themselves.
The argument against abortion is, in my view, a good argument of how intelligent and well-meaning people can reach the wrong conclusions on the basis of imprecise reasoning. The argument against abortion seems to depend on a combination of two separate arguments which sound superficially attractive when intertwined, but which does not seem convincing when the pieces of the argument are disassembled and examined in turn.
When I was 11 at boarding school, one of the boys in my dormitory (a lad by the name of Adam Wolf) had a cassette of Beatles Love Songs, a compilation double album released by Capitol Records in 1977. We listened to those cassettes all day every day. Nothing reminds me more of my time in boarding school.
I bought the record myself when I was a bit older. But Beatles Love Songs was long out of print by the time CDs began to replace vinyl, and Capitol has never released the compilation on CD. I sold all my vinyl records (which I had not played for many years) when I left for the United States. This is one of the albums I most regret saying goodbye to.
Now that all my records are stored on my hard disk, however, I have been able to recreate the album simply by making a playlist of the tracks from the original albums. Though it was nearly thirty years ago, I actually remember the track order (though you can just make out the names of the tracks from the above picture of the cover). For the record, here are the songs, and the original albums you will find them on.
Side one: Yesterday (Help!), I’ll Follow the Sun (Beatles for Sale), I Need You (Help!), Girl (Rubber Soul) , In My Life (Rubber Soul), Words of Love (Beatles for Sale), Here, There, and Everywhere (Revolver)
Side two: Something (Abbey Road), And I Love Her (Hard Day’s Night), If I Fell (Hard Day’s Night), I’ll Be Back (Hard Day’s Night), Tell Me What You See (Help!), Yes It Is (Past Masters Vol 1).
Side three: Michelle (Rubber Soul), It’s Only Love (Help!), You’re Gonna Lose That Girl (Help!), Every Little Thing (Beatles for Sale), For No One (Revolver), She’s Leaving Home (Sgt Pepper),
Side four: Long And Winding Road (Let It Be), This Boy (Past Masters Vol 1), Norwegian Wood (Rubber Soul), You’ve Got To Hide Your Love Away (Help!), I Will (White Album), P.S. I Love You (Please Please Me)
I’m listening to the album I’ve created right now. It sure takes me back. This would have been possible, but time-consuming, in the days before digital music – I could have made a tape of the relevant tracks. Now it is a doddle.
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