Category: Politics

How did the Snowden revelations impact behaviour?

This week the Australian government announced what seems to be an extraordinary piece of legislation.

Spies who leak sensitive information will face tough new penalties of up to 10 years’ jail and internet firms could be forced to store customers’ data for up to two years under sweeping national security reforms.

Prompted in part by the leaks from renegade US intelligence contractor Edward Snowden, the Abbott government will on Wednesday introduce legislation clamping down on intelligence officers who leak to journalists, lawyers and other members of the public.

Separately, Attorney-General George Brandis has given his strongest hint yet that the government will move ahead with controversial ”data retention” laws.

This would mean basic records of internet communications such as emails and Skype calls would have to be stored by providers for up to two years to help intelligence and law enforcement agencies carry out investigations and prosecutions.

Indeed, it appears to go further.

Australian journalists could face prosecution and jail for reporting Snowden-style revelations about certain spy operations, in an “outrageous” expansion of the government’s national security powers, leading criminal lawyers have warned.

A bill presented to parliament on Wednesday by the attorney general, George Brandis, would expand the powers of the Australian Security Intelligence Organisation (ASIO), including creation of a new offence punishable by five years in jail for “any person” who disclosed information relating to “special intelligence operations”.

The person would be liable for a 10-year term if the disclosure would “endanger the health or safety of any person or prejudice the effective conduct of a special intelligence operation”.

Suffice it to say this seems to fly way over the bar that we would normally want to protect free speech and freedom of the press; not that these are enshrined in the Australian constitution in the way they are in the US.

To appreciate the impact of policies designed to curtail the dissemination of disclosures, it is useful to actually go to the evidence. A few months ago, Alex Marthews and Catherine Tucker provided that evidence in this paper. Here is the abstract:

This paper uses data from Google Trends on search terms from before and after the surveillance revelations of June 2013 to analyze whether Google users’ search behavior shifted as a result of an exogenous shock in information about how closely their internet searches were being monitored by the U. S. government. We use data from Google Trends on search volume for 282 search terms across eleven different countries. These search terms were independently rated for their degree of privacy-sensitivity along multiple dimensions. Using panel data, our result suggest that cross-nationally, users were less likely to search using search terms that they believed might get them in trouble with the U. S. government. In the U. S., this was the main subset of search terms that were affected. However, internationally there was also a drop in traffic for search terms that were rated as personally sensitive. These results have implications for policy makers in terms of understanding the actual effects on search behavior of disclosures relating to the scale of government surveillance on the Internet and their potential effects on international competitiveness.

What this suggests is that moving to a culture and policy regime where it is widely known that citizens are under surveillance has a multiplier effect on their behaviour — making them fearful of investigated terms that they might guess would be part of that surveillance. If you look on page 33-34 of the paper you might well be surprised at how broad that brush is. While one could read this as supporting bans on such disclosures so that the bad guys keep searching and can be surveilled, it is not at all clear who was changing their behaviour. It may just be people who wanted to monitor their own government and perhaps bring to light governmental bad behaviour.

One thing is more certain, this adjustment is suggesting that moves like this one for the Australian government may be actually upsetting more citizens than they think and that might well add up in terms of votes. I’m sure that will be of interest to politicians who think supporting this legislation is innocuous.

How to lie with statistics: the case of female hurricanes.

I came across an article in PNAS (the Proceedings of the National Academy of Sciences) with the catchy title ‘Female Hurricanes are deadlier than male hurricanes’. It is doing the rounds in the international media, with the explicit conclusion that our society suffers from gender bias because it does not sufficiently urge precautions when a hurricane gets a female name. Intrigued, and skeptic from the outset, I made the effort of looking up the article and take a closer look at the statistical analysis. I can safely say that the editor and the referees were asleep for this one as they let through a real shocker. The gist of the story is that female hurricanes are no deadlier than male ones. Below, I pick the statistics of this paper apart.

The authors support their pretty strong claims mainly on the basis of historical analyses of the death toll of 96 hurricanes in the US since 1950 and partially on the basis of hypotheticals asked of 109 respondents to an online survey. Let’s leave the hypotheticals aside, since the respondents for that one are neither representative nor facing a real situation, and look at the actual evidence on female versus male hurricanes.

One problem is that the hurricanes before 1979 were all given female names as the naming conventions changed after 1978 so that we got alternating names. Since hurricanes have become less deadly as people have become better at surviving them over time, this artificially makes the death toll of the female ones larger than the male ones. In their ‘statistical analyses’ the authors do not, however, control adequately for this, except in end-notes where they reveal most of their results become insignificant when they split the sample in a before and after period. For the combined data though, the raw correlation between the masculinity in the names and the death toll is of the same order as the raw correlation between the number of years ago that the hurricane was (ie, 0.1). Hence the effects of gender and years are indeed likely to come from the same underlying improvement in safety over time.

Using the data of the authors, I calculate that the average hurricane before 1979 killed 27 people, whilst the average one after 1978 killed 16, with the female ones killing 17 per hurricane and the male ones killing 15.3 ones per hurricane, a very small and completely insignificant difference. In fact, if I count ‘Frances’ as a male hurricane instead of a female one, because its ‘masculinity index’ is smack in the middle between male and female, then male and female hurricanes after 1978 are exactly equally deadly with an average death toll of 16.

It gets worse. Even without taking account of the fact that the male hurricanes are new ones, the authors do not in fact find an unequivocal effect at all. They run 2 different specifications that allow for the naming of the hurricanes and in neither do they actually find an effect unequivocally in the ‘right direction’ (their Table $3).

In their first, simple specification, the authors allow for effects of the severity of a hurricane in the form of the minimum air pressure (the lower, the more severe the hurricane) and the economic damage (the higher, the more severe the hurricane). Conditional on those two, they find an insignificant effect of the naming of the hurricanes!

Undeterred and seemingly hell-bent to get a strong result, the authors then add two interaction terms between the masculinity of the name of the hurricane and both the economic damage and the air pressure. The interaction term with the economic damage goes the way the authors want, ie hurricanes with both more economic damage and more feminine names have higher death tolls than hurricanes with less damage and male names. That is what their media release is based on, and their main text makes a ‘prediction graph’ out of that interaction term.

What is completely undiscussed in the main text of the article however is that the interaction with the minimum air pressure goes the opposite way: the lower the air pressure, the lower the death toll from a more feminine-named hurricane! So if the authors had made a ‘prediction graph’ showing the predicted death toll for more feminine hurricanes when the hurricanes had lower or higher air pressures, they would have shown that the worse the hurricane, the lower the death toll if the hurricane had a female name!

The editors and the referee were thus completely asleep for this pretty blatant act of deception-by-statistics. Apparently, one can hoodwink the editors of PNAS by combining the following tricks: add correlated interaction terms to a regression of which one discusses only the coefficients that fit the story one wants to sell; then make a separate graph out of the parameter one needs in the main text, whilst putting technically sounding information in parentheses to throw editors, reviewers, and readers off the scent.

And the hoodwinking in this case is not small either. In order to accentuate what really is a non-result, the authors in the main text claim that “changing a severe hurricane’s name from Charley (MFI=2.889, 14.87 deaths) to Eloise (MFI=8.944,41.45 deaths) could nearly triple its death toll.” This, whilst in the years since 1979 the average death toll for their included hurricanes is 16 for both ‘female hurricanes’ and 16 for ‘male hurricanes’ (own calculations)! The authors conveniently forgot to mention in their dramatic result that Charley would have had to have been a hurricane that did immense economic damage but that had a very high minimum air pressure, ie was actually a very weak hurricane. Only for such an ‘impossible hurricane’ would their own model predict the increase in deaths from a female name. Put differently, I could have claimed that if the hurricane was very strong in terms of low air pressure, that changing the name from Charley to Eloise would have halved the death toll!

The authors also quite willingly pretend to have found things they have not in fact researched. They thus write “”Feminine-named hurricanes (vs. masculine-named hurricanes) cause significantly more deaths, apparently because they lead to a lower perceived risk and consequently less preparedness”” and the conclusions even speak of “gender biases”! Where do they try and measure this supposed bias in actual preparations? You guessed it, nowhere. PNAS should really clean up its act and not allow this sort of article, with its fairly blatant statistical artefacts, to slip through the cracks.

Let me explain the trickery in a bit more depth for the interested reader: air pressure and economic damage are highly related (the correlation is apparently -0.56), which means that one gets a strongly significant interaction between femininity and economic damage only because one simultaneously has added the interaction with minimum air pressure. One then talks about the interaction that goes the way one wants and happily neglects to mention the other one. And one needs both interactions at the same time to get the desired result on the interaction between the names and economic damage: without this interaction with minimum air pressure, what you get is a whole shift upwards of the male death prediction and a loss of significance on the interaction term with economic damage. You see this in the ‘additional analyses’ run by the author, in very small font after the conclusions, wherein the whole thing becomes insignificant for the first period and the reduced coefficient for the later period on the interaction with air pressure coincides with a halving of the coefficient on the interaction with economic damage as well. Hence, without including both interactions you would probably get that the female hurricanes are predicted to be less deadly than the male ones when the economic damage is small and more deadly when the damage is large (to an insignificant extent). So you need the interaction that is almost invisible in the main text and the conclusions to ‘get’ the result that the headlines are based on.

There is another, even more insidious trick played in this article. You see, with only 96 hurricanes to play with, which really only includes 26 to 27 ‘male’ hurricanes, the authors are asking rather a lot from their data in that they want to estimate 5 parameter coefficients, three of which based on names. If you then only use a simple indicator for whether or not a hurricane has a male name, you have the problem that you don’t have enough variation to get significance on anything.

So what did the authors do? Ingeniously, they decided to increase the variation in their names by having people judge just how ‘masculine’ their names were. Hence many of the ‘female’ hurricanes were ‘re-badged’ as ‘somewhat male hurricanes’. So the female hurricanes of the pre 1979 era had an average “masculinity index” of 8.42, whilst those of the new post-1979 era had an average of 9.01. Simply put, according to the authors the female hurricanes ‘of old’, which were of course more deadly as they occurred earlier, were also more masculine, contributing to the headline ‘results’.

Supposedly masculine female names included “Ione”, “Beulah”, and “Babe”. And who judges whether these are masculine names? Why, apparently this was done by 9 ‘independent coders’, by which one presumes the authors meant colleagues sitting in the staff room of their university in 2013! Now, even supposing that they were independent, one cannot help but notice that the coders will have been relatively unaware of the naming conventions in the 1950s and 1960s. How is someone born in 1970 sitting in a staff room in 2013 supposed to judge how ‘masculine’ the name ‘Ione’ was perceived to be in 1950? These older names probably just sounded unusual and hence got rated as ‘more probably male’. Similarly, it is beyond me why ‘Hugo’ would be rated as less masculine than ‘Jerry’ or ‘Juan’.

The authors’ own end-notes called ‘additional analyses’ indeed show that you get insignificant results without this additional variation begotten from making the names continuous. So the authors need to fiddle with the names of the hurricanes, pool two eras together whilst not controlling for era, and add two strongly correlated and opposing interaction terms in the same analyses to get the results they want. It is what economists refer to as ‘torturing the data until it confesses’.

Finally, for the observant, there is the following anomaly telling you something about the judgements made in this research: the masculinity of names is judged on a 1 to 11 scale (only integers) by 9 raters. Yet the averages reported in the authors’ appendices include such values as 1.9444444 (Isaac) and 9.1666666 (Ophelia). Note that if it were true that there were indeed nine raters, then all values should be an exact multiple of one-ninth, ie 0.11111111. The discrepancy indicates that either there were not always nine raters, or else that not all coded values were integers (an impossibility according to the main text). The 9.16666 for instance is a multiple of one-sixth and thus suggests only 6 rates were used for ‘Ophelia’. the 1.9444444 is a multiple of one-eigteenth, suggesting that there were twice as many raters for ‘Isaac’. Alternatively, in both cases, there were nine raters but one of the nine raters picked two values simultaneously (one even and one uneven) and thus added 0.055555 to a multiple of one-ninth in the displayed average. It is not a big thing as this kind of judgement is made all the time but I can’t find the footnote that owns up to this in the paper.

Predictions versus outcomes in 2013?

In the last 5 years, I have made a point of giving clear predictions on complex socio-economic issues. I give predictions partially to improve my own understanding of humanity: nothing sharpens the thoughts as much as having to actually predict something. Another reason is as a means of helping my countries (Australia/the Netherlands) understand the world: predicting socio-economic events is what scientists are for!

Time to have a look at my predictive successes and failures over the last few years, as well as the outstanding predictions yet to be decided. Let us start with what I consider my main failure.

Failed predictions

The main area I feel I haven’t read quite right is the conflict in Syria, as part of the general change in the whole Middle East. I am still happy with my long-run predictions for that region, where I have predicted that urbanisation, more education, reduced fertility rates, and a running out of fossil fuels will lead to a normalisation of politics in a few decades time. But at the end of 2012 I was too quick in thinking the Syria conflict was done and dusted. To be fair, I was mainly following the ‘intrade political betting markets’ which was 90% certain Assad would no longer be president by the end of this year, but the prophesised take-over of the country by the Sunni majority has not quite happened. The place has become another Lebanon, with lots of armed groups defending their own turf and making war on the turf of others. The regime no longer controls the whole country, but is still the biggest militia around.

What did I fail to see? I mainly over-estimated the degree to which the West would become involved. I expected the Americans and the Turks to put a lot of resources into the more secular militias, giving them training grounds and more modern equipment. As far as I can tell, this did happen a bit, but simply not to the degree I thought likely, and I don’t really know why. There were several attempts by the US and Turkey to identify an ‘opposition coalition’ to then support, so something hidden from view must have prevented actual support. Perhaps the US has decided it prefers Assad to the alternatives after all.

The willingness of the Iranians and Russians to support the regime has also been stronger than I thought, and the efforts of the Sunni-neighbours to support the non-regime militias have been less cogent than I thought: instead of backing a clear group that had a real future in terms of leading the country (the more secular groups), foreign anti-regime support came mainly for the crazies who went along with the ideology of fanatics elsewhere. That suggests a lack of pragmatic involvement from the neighbours.

I wouldn’t call it a complete predictive failure because Syria as a country no longer exists: it now does have all kinds of regional power brokers and so one could ‘claim’ the regime indeed has lost (most of) its power, but the conflict has gone on longer than the betting markets that I went along with predicted. So this also educates me about the lack of intellectual weight to that kind of political betting market: these are probably more feel-good markets with low turnover that simply don’t aggregate much hidden information. As a related failure, I can mention that I put a low probability on the event that the Muslim brotherhood would overplay its hand when in government in Egypt. I did mention the possibility (see later), but didn’t think it would happen.

 

Successful predictions

A very recent prediction of mine was on bitcoins. A month ago, I said governments were going to intervene because of the money laundering opportunities in the bitcoin network, and that it hence would not become a dominant trading currency. The next week, the Chinese came down with severe restrictions on bitcoins in their country: financial institutions were not allowed to trade in it and individuals trading in it had to register with their real names, killing off most laundering opportunities. As a result, the value of the bitcoins halved. I wouldn’t claim bitcoins are quite dead yet. It is when many other countries start to enact similar regulation (as some are doing) that it becomes an official curiosum.

Other predictions have been on various aspects of the GFC in Europe. I predicted such things as the Greek defaults when European governments were still pretending they would not occur, the survival of the Euro when there was lots of speculation on imminent euro exits, the inability of the ECB to actually meaningfully monitor banks, and the failure to get agreements on tax evasion (which have all been painfully clear in 2013). My proudest moment was to predict in December 2011 the overall trajectory of where the politics of the financial crisis was heading: support for weak new institutions in exchange for continued bailouts and forms of money printing, with national sovereignty as the sticking point preventing stronger institutions. We are still on that trajectory now, as this very recent report by the Bruegel Foundation argues which dryly summarises recent events: “Five years of crisis have pushed Europe to take emergency financial measures to cushion the free fall of distressed countries. However, efforts to turn the crisis into a spur for “an ever closer union” have met with political resistance to the surrender of fiscal sovereignty. If such a union remains elusive, a perpetual muddling ahead risks generating economic and political dysfunction.” The latest banking deal fits this mould perfectly.

I am also proud of my predictions on the ill-fated Monti-government in Italy of 2012. Before he was in power, I predicted he was unlikely to have the personality to change anything, and within weeks of him in government (December 2011) I mentioned the reforms he was talking about were dead in the water, months before the magazine The Economist still put him up as a great reformer. Only in 2013 did mainstream media outside of Italy wake up to his failure. I am similarly looking good on my observations regarding the problems in Spain.

On the Middle East, in 2011 I picked the current Lybian chaos coming from its resource curse. A few weeks into the Arab spring I predicted the ensuing grand coalition in 2012 between islamists and the military in Egypt, whereby the islamists would form government but with a tacit agreement with the military not to interfere with the economic interests of that military. I also predicted that the torture machine of the Egyptian military would first deal with the urban youth and then become oriented towards the islamists should they step out of line, which they did.

The main prediction I have been making since 2007 (and which has gotten me into the most trouble!) is the uselessness of looking for a world coalition to reduce CO2 emissions, mainly because the temptation to free-ride is irresistible both within countries and between them. I have thus consistently called to forget about emission strategies and to instead think of technological advances, geo-engineering and adaptation. In each year since 2007, the developments have been accordingly: steady increases in actual emissions with a growing number of scientists and research groups thinking more seriously about geo-engineering: previous agreements on emissions have not been kept and new ones are toothless, whilst you get many beautiful political speeches designed for consumption by the gullible during each new conference on the issues.

In 2013 for instance, the Japanese reneged on their earlier Kyoto promises because they decided to switch from nuclear to fossil, following on from a previous reneging by Canada. Similarly, the EU watered down its commitments in order not to upset the German car industry, whilst China and India and others helped prevent emission agreements with any bite. A nice write-up of the recent Warshaw talk-fest can be found here. Conspicuous in that write-up is the increased awareness of the importance of adapting to climate change, and the degree to which hope lies with new technology, not massive emission reductions under existing ones. The Australian deal with the EU trading scheme, which was all smoke-and-mirrors anyway, has fallen through, essentially replaced with a policy of ‘business as usual till the bigger players come up with a plan’, which I see as a sensible policy for Australia at the moment.

 

Predictions on the ledger

In many ways, the ‘emission controls are hopeless’ prediction is a running prediction for decades, so that one is very much still on the ledger. And one in which I am quite willing to bet against those who say they believe serious emission reductions will come about via emission markets or other controls.

Another prediction coming ‘half-good’ recently is the bet with Andrew Leigh on happiness and incomes in rich countries, where my prediction was that richer countries getting even richer would not get happier. For the data we agreed to look at it, this indeed held, but more because I got lucky with the data available – other data showed different results. Read about it in my recent blog on the topic by following the link!

Another prediction ‘on the ledger’ is that there is going to be no real change in Chinese politics till several years after they run out of easy growth opportunities, say 20 years from now. After that, I predict stronger and stronger pressure to adopt a Western-style political system from the Chinese business community. I gave a possible trajectory for how it might happen (local experimentation growing into national systems), but that is not the only way change might happen, if it happens at all. The prediction is the consolidation of the one-party rule till years after the growth has levelled off. That consolidation has indeed been in full swing this last year: as a recent piece of the Institute of Peace and Conflict Studies argues, in 2013 we got more media control and control over the economy by the party. Still, there are some embryonic signs of attempts to get some kind of separation of powers in that country, such as via more independent judiciary and financial institutions.

The prediction that the ‘behavioural genetics’ crowd is going nowhere soon is also a prediction ‘on the ledger’. The same goes for the prediction that Australia is not going to seriously improve its education-for-the-masses anytime soon, and the unlikelihood of solar replacing fossil fuel for mass electricity-generation anytime soon.

There is then a whole heap of predictions that I am quite happy to say have come true, but where it is also a certainty someone else would disagree. For instance, I predicted that the Melbourne Model, which is a change in how the University of Melbourne structures undergraduate education, would lead to dumbed-down degrees. Everything I hear about that place confirms it, but I would be astounded if the chancellery of the University of Melbourne would agree with that assessment! Similarly, my stated fears regarding the Gonski reforms (not quite predictions as I made it clear I had a hard time finding out what was actually going to happen) are looking all-too-true, but I am sure the ministries involved would disagree. One can trawl my archives for several more such ‘debatable’ prediction outcomes.

Finally, I have a bet on with Conrad Perry for what is going to happen in Egypt next. My prediction is that the next elected government will again be an islamist-lead government, a kind of Brotherhood 2.0. They may change labels and be even more careful, but I thought it likely that they would be involved as a dominant player in the next elections simply because of the high level of religiosity in that country. Conrad Perry bets on ‘all other outcomes’ with a bottle of red to the winner. Jim Rose also made an implicit prediction, which is that the new generation of military are going to be successful in their bid to monopolise power in Egypt, but he didn’t bet anything. Still, Jim is looking rosy on that prediction.

The prediction+bet with Conrad on Egypt was entered into around August/September and things have moved on a bit since then. The Egyptian military has proven more popular and bent on total control than I thought, but we are still looking at a situation in which one is likely to get democratic elections (though the military might well rig them). I will say I am less confident about my prediction now than 3 months ago, essentially because the military has been more brutal than I thought they would be, but there is still a chance for my prediction to happen so I am not ready to concede defeat on that one yet!

The Xmas quiz answers and discussion

Last Monday I posted 4 questions to see who thought like a classic utilitarian and who adhered to a wider notion of ethics, suspecting that in the end we all subscribe to ‘more’ than classical utilitarianism. There are hence no ‘right’ answers, merely classic utilitarian ones and other ones.

The first question was to whom we should allocate a scarce supply of donor organs. Let us first briefly discuss the policy reality and then the classic utilitarian approach.

The policy reality is murky. Australia has guidelines on this that advocate taking various factors into account, including the expected benefit to the organ recipient (relevant to the utilitarian) but also the time spent on the waiting list (not so relevant). Because organs deteriorate quickly once removed, there are furthermore a lot of incidental factors important, such as which potential recipient is answering the phone (relevant to a utilitarian)? In terms of priorities though, the guidelines supposedly take no account of “race, religion, gender, social status, disability or age – unless age is relevant to the organ matching criteria.” To the utilitarian this form of equity is in fact inequity: the utilitarian does not care who receives an extra year of happy life, but by caring about the total number of additional happy years, the utilitarian would use any information that predicts those additional happy years, including race and gender.

In other countries, the practices vary. In some countries the allocation is more or less on the basis of expected benefit and in the other is it all about ‘medical criteria’ which in reality include the possibility that donor organs go to people with a high probability of a successful transplant but a very low number of expected additional years. Some leave the decision entirely up to individual doctors and hospitals, putting huge discretion on the side of an individual doctor, which raises the fear that their allocation is not purely on the grounds of societal gain.

What would the classic utilitarian do? Allocate organs where there is the highest expected number of additional happy lives. This thus involves a judgement on who is going to live long and who is going to live happy. Such things are not knowable with certainty, so a utilitarian would turn to statistical predictors of both, using whatever indicator could be administrated.

As to length of life, we generally know that rich young women have the highest life expectancy. And amongst rich young women in the West, white/Asian rich young women live even longer. According to some studies in the US, the difference with other ethnic groups (Black) can be up to 10 years (see the research links in this wikipedia page on the issue). As to whom is happy, again the general finding is that rich women are amongst the happiest groups. Hence the classic utilitarian would want to allocate the organs to rich white/Asian young women.I should note that the classic utilitarian would thus have no qualms about ending up with a policy that violates the anti-discrimination laws of many societies. Our societies shy away from using observable vague characteristics as information to base allocations on, which implicitly means that the years of life of some groups are weighed higher than the years of life of another. The example thus points to a real tension between on the one hand classic utilitarianism and its acceptance of statistical discrimination on the basis of gender and perceived ethnicity and on the other hand the dominant moral positions within our society. Again, I have no wish to say which one is ‘right’ but merely note the discrepancy. As to myself, I have no problem with the idea that priority in donor organs should be given to young women though I also see a utilitarian argument for a bit of positive discrimination in terms of a blind eye to ethnicity (ie, there is utilitarian value in maintaining the idea that allocations should not be on the basis of perceived ethnicity, even though in this case that comes at a clear loss of expected life years).

The second question surrounded the willingness to pre-emptively kill off threats to the lives of others.

The policy reality here is, again, murky. In order to get a conviction on the basis of ‘attempted’ acts of terrorism or murder, the police would have to have pretty strong evidence of a high probability that the acts were truly going to happen. A 1-in-a-million chance of perpetrating an act that would cost a million lives would certainly not be enough. Likely, not even a 10% chance would be enough, even though the expected costs of a 10% chance would be 100,000 lives, far outweighing the life of the one person (and I know that the example is somewhat artificial!).

When it concerns things like the drone-program of the west though, under which the US, with help from its allies (including Australia), kills off potential terrorist threats and accepts the possibility of collateral damage, the implicit accepted burden of proof seems much lower. I am not saying this as a form of endorsement, but simply stating what seems to go on. Given the lack of public scrutiny it is really hard to know just how much lower the burden of proof is and where in fact the information is coming from to identify targets, but being a member of a declared terrorist organisation seems to be enough cause, even if the person involved hasn’t yet harmed anybody. Now, it is easy to be holier-than-thou and dismissive about this kind of program, but the reality is that this program is supported by our populations: the major political parties go along with this, both in the US and here (we are not abandoning our strategic alliance over it with the Americans, are we, nor denying them airspace?), implying that the drone program happens, de facto, with our society’s blessing, even if some of us as individuals have mixed feelings about it. So the drone program is a form of pre-emptively killing off potential enemies because of a perceived probability of harm. The cut-off point on the probability is not known, but it is clearly lower than used in criminal cases inside our countries.

To the classic utilitarian, if all one knew would be the odds of damage and the extent of damage, then the utilitarian would want to kill off anyone who represented a net expected loss. Hence the classic utilitarian would indeed accept any odds just above 1 in a million when the threat is to a million lives: the life of the potential terrorist is worth the expected costs of his possible actions (which is one life). If one starts to include the notion that our societies derive benefit from the social norm that strong proof of intended harm is needed before killing anyone, then even the classic utilitarian would increase the threshold odds to reflect the disutility of being seen to harm those social norms, though the classic utilitarian would quickly reduce the thresholds if there were many threats and hence the usefulness of the social norm became less and less relevant. To some extent, this is exactly how our society functions: in a state of emergency or war, the burden of proof required to shoot a potential enemy drastically reduces as the regular rule of law and ‘innocent till proven guilty’ norms give way to a more radical ‘shoot now, agonize later’ mentality. If you like, we have recognised mechanisms for ridding ourselves of the social norm of a high burden of proof when the occasion calls for it.

As to personally pulling the trigger, the question to a utilitarian becomes entirely one of selfishness versus the public good and thus dependent on the personal pain of the person who would have to pull the trigger. To the utilitarian person who is completely selfless but who experiences great personal pain from pulling the trigger, the threshold probability becomes 2 in a million (ie, his own life and that of the potential terrorist), but to a more selfish person the threshold could rise very high such that even with certainty the person is not willing to kill someone else to save a million others. That might be noble under some moral codes, but to a utilitarian it would represent extreme selfishness.

So the example once again shows the gulf between how our societies normally function when it concerns small probabilities of large damages, and what the classic utilitarian would do. A utilitarian is happy to act on small probabilities, though of course eager to purchase more information if the possibility is there. Our societies are less trigger-happy. Only in cases whereby there is actual experienced turmoil and damage, do our societies gradually revert to a situation where it indeed just takes a cost-benefit frame of mind and suspends other social norms. A classic utilitarian is thus much more pro-active and willing to act on imperfect information than is normal in our societies.

The third question was about divulging information that would cause hurt but that did not lead to changes in outcomes. In the case of the hypothetical, the information was about the treatment of pets. To the classic utilitarian, this one is easy: information itself is not a final outcome and, since the hypothetical was set up in that way, the choice was between a lower state of utility with more information, versus a higher state of utility with less information. The classic utilitarian would chose the higher utility and not make the information available.

The policy reality in this case is debatable. One might argue that the hypothetical, ie that more information would not lead to changes but merely to hurt, is so unrealistic that it basically does not resemble any real policies. Some commentators made that argument, saying they essentially had no idea what I was asking, and I am sympathetic to it.

The closest one comes to the hypothetical it is the phenomenon of general flattery, such as where populations tell themselves they are god’s chosen people with a divine mission, or where whole populations buy into the idea that no-one is to blame for their individual bad choices (like their smoking choices). One might see the widespread phenomenon of keeping quiet when others are enjoying flattery as a form of suppressing information that merely hurts and would have no effect. Hence one could say that ‘good manners’ and ‘tact’ are in essence about keeping information hidden that hurts others. Personally, though I hate condoning the suppression of truth for any cause, I have to concede the utilitarian case for it.

The fourth and final question is perhaps the most glaring example of a difference between policy reality and classic utilitarianism, as it is about the distinction between an identified saved life and a statistically saved life. As one commenter already noted (Ken), politicians find it expedient to go for the identified life rather than the un-identified statistical life, and this relates to the lack of reflection amongst the population.

To the classic utilitarian, it should not matter whose life is saved: all saved lives are to the classic utilitarian ‘statistical’. Indeed, it is a key part of utilitarianism that there is no innate superiority of this person over that one. Hence, the classic utilitarian would value an identified life equally to a statistical one and would thus be willing to pour the same resources into preventing the loss of a life (via inoculations, safe road construction, etc.) as into saving a particular known individual.

The policy practice is miles apart from classic utilitarianism, not just in Australia but throughout the Western world. For statistical lives, the Australian government more or less uses the rule of thumb that it is willing to spend some 50,000 dollars per additional happy year. This is roughly the cut-off point for new medicines onto the Pharmaceutical benefit Scheme. It is also pretty much the cut-off point in other Western countries for medicines (as a rule of thumb, governments are willing to pay about a median income for another year of happy life of one of their citizens).

For identified lives, the willingness to pay is easily ten times this amount. Australia thus has a ‘Life Saving Drugs’ program for rare life-threatening conditions. This includes diseases like Gaucher Disease, Fabry disease, and the disease of Pompe. Openly-available estimates of the implied cost of a life vary and it is hard to track down the exact prices, but each year of treatment for a Pompe patient was said, in a Canadian conference for instance, to cost about 500,000 dollars. In New Zealand, the same cost of 500,000 is being used in their media. Here in Australia, the treatment involved became available in 2008 and I understand it indeed costs about 500,000 per patient per year. There will be around 500 patients born with Pompe on this program in Australia (inferred from the prevalence statistics). Note that this treatment cost does not in fact mean the difference between life and death: rather it means the difference between a shorter life and a longer one. Hence the cost per year of life saved is actually quite a bit higher than 500,000 for this disease.

What does this mean? It means, quite simply, that in stead of saving one person with the disease of Pompe, one could save at least 10 others. In order for the person born with Pompe to live, 10 others in his society die. It is a brutal reality that is difficult to talk about, but that does not change the reality. Why is the price so high? Because the pharmaceutical companies can successfully bargain with governments for an extremely high price on these visible lives saved. They hold politicians to ransom over it, successfully in the case of Australia.

Saving one identified life rather than ten unidentified ones is not merely non-utilitarian. It also vastly distorts incentives. It distorts the incentives for researchers and pharmaceutical companies away from finding solutions to the illnesses had by the anonymous many, to finding improvements in the lives of the identifiable few. It creates incentives to find distinctions between patients so that new ‘small niches’ of identified patients can be found out of which to make a lot of money. Why bother trying to find cures for malaria and cancer when it is so much more lucrative to find a drug that saves a small but identifiable fraction of the population of a rich country?

So kudos to those willing to say they would go for the institution that saved the most lives. I agree with you, but your society, as witnessed by its actions, does not yet agree, opening the question what can be done to more rationally decide on such matters.

Thanks to everyone who participated in the quiz and merry X-mas!

Rich countries and happiness: the story of a bet.

Do countries that are already rich become even happier when they become yet richer? This was the essential question on which I entered a gentleman’s bet in 2004 with Andrew Leigh and which just recently got settled.

The reason for the bet was a famous hypothesis in happiness research called the Easterlin hypothesis which held that happiness did not increase when rich countries became even richer. When I was preparing a presentation on this matter in 2004 I used the following graph to illustrate the happiness income relation across countries:

This graph shows you the relation between average income (GDP in purchasing power terms) and average happiness on a 0-10 scales for many countries. As one can see, the relation between income and happiness is upward sloping for low levels of income, but becomes somewhat flat after 15,000 dollars per person. I championed the idea that this was not just true if you looked across countries, but that this would also hold true over time.

Andrew Leigh’s thinking was influenced by other data, particularly a paper by Stevenson and Wolfers which – he thinks debunks the Easterlin hypothesis. Here’s one of their graphs:

 

What’s striking about this graph is that the dotted line slopes up in the top right corner. In other words, the relationship between happiness and income becomes stronger, not weaker, for countries with average incomes over $15,000. Andrew thinks that this is because they specify income in log terms (in other words, we’re looking at the effect on happiness of a percentage increase in income rather than a dollar increase in income). I think it’s because the Gallup poll isn’t measuring happiness, but is instead asking people to rank themselves on the Cantrill ladder of life scale.

So our gentleman’s bet was in effect a bet on whether happiness in the world value surveys behaved different to the ladder question of the Gallup polls, and on whether the short-run relation between income and happiness was strong enough to show up in periods of 5 to 10 years as well. Andrew thought it would, I thought 5-10 years would be long enough for the typical long-run no-effects findings to show up and that happiness has a different relation with income than the Cantril-question. So we bet on whether one would get a significantly positive relation between GDP growth and happiness changes for the rich countries when one looked at the World Value data for 2005. We agreed to look at the relation between income and happiness using country-average variation. The winner would get 100 bucks.

Now, both of us forgot about the bet for a few years as the data was supposed to become available. Only recently did Andrew remind me of our bet and asked to check what had happened.

When I (with research assistance from Debayan Pakrashi) started to look into this data again, it quickly became apparent that Andrew and I had been pretty sloppy in formulating the precise conditions of the bet. In many ways, our bet had been far too vague.

For one, the World Value survey is not in fact held in particular years. Rather, some survey is run almost every year in some country that adds to the collection of surveys known as the World Value Survey. Hence there was really no such thing as a ‘2005 wave’. Taken literally, only Australia, Finland, and Japan had a survey in 2005 and were countries that in the previous wave already had a GDP of 15,000 dollars. In all those countries, income had gone up a lot since their previous survey, with Australian happiness down and Japanese and Finnish happiness up. That is a bit meagre as ‘waves’ go.

So the first ‘addition’ was to have a bandwidth of years for the ‘2005’ waves that included 2004, 2005, 2006, 2007, and 2008. That gave 12 countries that were rich enough in the previous wave to qualify. The raw data was:

The next ‘snag’ was of course that there are many ways to define the dependence on income: linear or logarithmic. With logarithmic income one normally gets stronger statistical significance on income, so we went for logarithms.

Then, of course, there are still many other things one can put into the regression. Does one account for effects of particular years (in bands) and for the level of happiness that a country starts? We decided to try it all. Hence the final ‘deciding’ set of regressions were as follows:

 

Which tells you that the relation between income changes and happiness changes (the last two columns) was either quite insignificantly positive or even negative if one entered year-bands.

When one reflects on the list of countries used in the analysis though, it is clear that the outcome of the bet will have had little to do with the true relation between income and happiness. It will have hinged on hidden aspects of the data. For instance, the Australian world value survey in 1995 was run differently from the 2005 version. Hence the big drop in Australian happiness you see in this period for this data does in fact not show up for other Australian data (like the HILDA). So one suspects some change in the data-gathering to be responsible for it. Indeed, the level of Australian happiness in this data is markedly below the level found for the HILDA (where it is almost 8.0).

Similarly, the big increase in Japanese happiness in this period doesn’t show up either in other Japanese data and so probably has something to do with changes in how the survey was run there. The changes can relate to the months in which the surveys were held, the precise words used for the happiness question, the questions preceding the happiness questions, the cities in which the survey was run, how the survey was run (face-to-face or via telephone), etc.

So I may have gotten lucky and won the bet, but one cannot see the outcome as decisive evidence that income and happiness have no long-run relation within rich countries. The data for the 2010 post-GFC wave might well show the opposite!

Scott Adams on Fairness

The other day, I seem to have upset lots of people by claiming that fairness is a poor grounds for debate unlike productivity. My evidence for that was the question over whether the Coalition’s Paid Parental Leave Scheme was fair — Labor says it isn’t, the Coalition (and Peter Martin) says it is and I said that they are all incoherent on this point. While productivity too can mean different things in different contexts it at least has an undisputed definition of what is “not productive” given to us by Pareto. As my children often learn, any proposed definition of “not fair” can come back to bite them.

Anyhow, as I was concentrating on PPL I didn’t really spend much time on fairness itself. For that, the clearest statements have come from Scott Adams so I thought I’d quote them here to get people thinking.

It started some years back:

I often laugh when someone declares a thing to be fair. Fairness is a funny illusion. It’s one of our most useful illusions, but it’s an illusion nonetheless.

Imagine trying to “fairly” divide ten identical marbles between two kids. You could give five marbles to each kid, wave your arms and declare it fair. The kids would probably agree with this arrangement. The illusion of fairness works.

Is five marbles apiece actually fair?

Don’t you need to know how many marbles each kid already owns? What if one kid has a thousand and the other has none? The marginal utility of an extra marble is much higher for the marble-poor kid.

Doesn’t their different level of enthusiasm for marbles come into play? If you think about it, you’re trying to be fair with their happiness, not their marbles. What if one kid loves marbles five times more than the other? In that case, the fair thing to do is give most of the marbles to the kid who doesn’t enjoy them as much. He needs more marbles to obtain the same level of happiness as the marble lover gets with one. Of course that solution would cause one kid to melt down because it wouldn’t have the illusion of fairness.

Even the simplest example of fairness falls apart when you put it under scrutiny. Luckily, people are morons, so they imagine fairness where none exists. Otherwise nothing would ever get done.

And it went on:

As I’ve said before, fairness is a concept invented so dumb people can participate in debates. Fairness isn’t a natural law of the universe. It’s a psychological problem.

We sometimes get fairness confused with equality. Equality is usually good, and can often be measured with a satisfying precision. Fairness, on the other hand, is usually just a rationale for some sort of bias.

….

To demonstrate my point that fairness is about psychology and not the objective world, I’ll ask you two questions and I’d like you to give me the first answer that feels “fair” to you. Don’t read the other comments until you have your answer in your head.

Here are the questions:

A retired businessman is worth one billion dollars. Thanks to his expensive lifestyle and hobbies, his money supports a number of people, such as his chauffeur, personal assistant, etc. Please answer these two questions:

1. How many jobs does a typical retired billionaire (with one billion in assets) support just to service his lifestyle? Give me your best guess.

2. How many jobs should a retired billionaire (with one billion in assets) create for you to feel he has done enough for society such that his taxes should not go up? Is ten jobs enough? Twenty?

Make sure you have your answers before reading on.

I thought of this question because I heard an estimate of how many families a particular billionaire supports. The estimate was a hundred. If you figure an average family is 2.5 people, one billionaire is supporting 250 humans. He gets a lot in return, of course, but what struck me is how this number affects my feeling of fairness. When I hear that one person is supporting 250 non-relatives, plus a number of relatives too, it feels as if that billionaire is doing more than his “fair” share. But as I’ve said, fairness isn’t a real thing. It’s just a psychological phenomenon that is easily manipulated.

My personal view is that if most credible economists say higher taxes on the rich are necessary to save the economy, I’m all for it. I think every rich person would agree with that statement. The question that matters is whether taxing the rich will help or hurt the economy. Fairness should be eliminated from the discussion.

I was using the same tricks to break apart arguments on PPL. If the benchmark was strong it shouldn’t be that easy. And it isn’t easy when it comes to using productivity or, for that matter, equality which is a very precise quantitative definition.

In Australia, we are on somewhat safer ground with “fair go” but I would urge everyone to move away from fairness and when we see a politician or someone else not doing so, to pick it quickly to shreds.

The new PM sends all the wrong signals

Well, one in particular that I regard as unforgivable. Andrew Leigh, my friend, co-author and up until yesterday the Parliamentary Secretary to the Prime Minister has been dropped from that role entirely with no reasonable substitute offered. From the signal it sends to the economics community in Australia, it is no less than the absurdity of the US Senate not confirming Peter Diamond to Fed Board in the very year he won a Nobel prize for economics. Andrew had, during his first term as an MP, won the Economic Society of Australia’s Young Economist Award given to the best economist under the age of 40. To realise how significant that is, the Society declined to offer that award to anyone in the year following Andrew’s prize.

We have been long told that the mire of Australian politics was discouraging talent from entering. Instead we have people who play party games and that is increasingly not a young person’s game. Why should it be when there are so many professions in Australia that reward talent? Indeed, being an academic researcher is one of them and Andrew was one of the finest there was. Unlike many of us, he was deeply devoted to Australian policy and pursued research that was designed to provide the very evidence politicians needed to make the right decisions. He stood between academia and policy debates. He was invited to Kevin Rudd’s 2020 Summit but I could already see there that he was frustrated that just doing good work would not be enough. To get real evidence on policy he would have to get on the inside. So he spent a stint at Treasury before later having an opportunity to represent the people of Canberra in Federal parliament.

This past week we have seen Andrew at his best. While the rest of his party were fighting with each other, Andrew was in the press and media talking about the true believer labor issue of inequality. He was expressing an evidence-based vision that things were going too far towards billionaires rather than battlers. The book was not some CV padding should he want to return to academia some day. Instead, it was a vehicle to get these deep issues out into the public debate. To stop that debate being hijacked by in-fighting and contests. And instead to inspire others to the ALP cause.

And so what was his reward? He was let go. The poster-child of what the future of Australian political leadership ought to look like was taken out. Why? Seemingly because he stayed out of the political fray. He had only served under Julia Gillard and presumably saw no reason to turn his back on her. In other words, a simple view of loyalty. A simple view of giving someone a fair go. He never voted against Rudd the first time and so clearly wasn’t seen as someone to keep on-side.

Of course, that is one theory. The other is that it is Andrew’s very public stance against billionaires and a wonderful accounting of the CEO pay of BHP and how it is changed over time that side-lined him. That latter theory is testable. Will the new PM shift the economic policy mix sharply towards the rich or not?

Anyhow, this post is written as I am in a mood of profound disappointment. Even as this happened Andrew was on Sky News, as he often was, campaigning away for the ALP and applauding the one good change in the cabinet — the increase in the number of women even though it is hard to believe that any historian will look upon this change as some watershed moment for gender equality. He still has his eye on the long-term. I wish I could be so bold but if some pollster asked me today who I would be voting for in the next election, it would not be Labor.

Pots and Kettles: A Core Economics Editorial

[Mostly based on this editorial in The Age]

It is time for Andrew Holden to stand aside as editor of The Saturday Age, so that vigorous, policy-driven democratic debate can flourish once again. Mr Holden should do so in the interests of the Fairfax organisation, in the interests of the nation and, most importantly, in the interests of democracy. Core Economics’ overriding concern is that, under Mr Holden’s leadership, The Age‘s message about its future policies and vision for Australia is not getting through to the electorate. Our fear is that if there is no change in Labor leadership before the September 14 election, voters will be denied a proper contest of ideas and policies – and that would be a travesty for the democratic process.

Core Economics does not advocate this lightly. We do so with all respect to Mr Holden, recognising that in the years he has occupied the office of editor – most of it under the vexing circumstances of a hung Parliament – the newspaper has implemented policies, which we hope will allow it to remain. We are not saying Mr Holden should stand aside because of policy decisions, but because he has been unable to lift the newspaper out of a desperately difficult commercial position.

A big majority of the electorate appears to have stopped listening to The Age. Voters have been so distracted by internal and external speculation about Labor’s leadership that efforts by the Prime Minister and her ministers to enunciate a narrative, a strategic vision, for the nation’s future beyond this year have failed. If our national political discourse continues in this way, the outcome is writ large: Labor would face a devastating loss in September. Outright control of both houses may be delivered to the Coalition and, more importantly for our democracy, the opportunity for Labor to present a vigorous opposition in Parliament would be diminished.

Ms Gillard came to the office of Prime Minister three years ago, in bitter circumstances, after deposing Kevin Rudd in a caucus challenge, which he did not contest. The polls in mid-2010 had indicated Labor was in danger of losing an election under Mr Rudd, and inside the party there was concern about his increasingly autocratic style. Ms Gillard said she challenged ”because I believed that a good government was losing its way … I love this country, and I was not going to sit idly by and watch an incoming opposition cut education, cut health and smash rights at work”. The Age at the time interpreted her to mean that the Rudd government ”had struggled to explain and justify its policies to voters, and to remind them of its achievements”. The situation is eerily similar today. Unfortunately, the newspaper under Mr Holden has lost its way. And despite her entreaties to the Fairfax board to stick fast, nothing appears to be changing. No one at Fairfax has stepped onto the front foot with confidence to reinvigorate the divided and demoralised newspaper team. The onus falls on Mr Holden to break the impasse.

The electorate is despairing of the uncertainty and the petty back-biting reported by newspapers. Core Economics is more despairing of the vacuum in policy debate. Past editors have been flawed, but each new one claims to have learned much from past loss in confidence. Core Economics is not entirely convinced about that, but we cannot ignore the clear and consistent evidence of the new stands that a change in leadership would lift Fairfax’s stocks and enhance its prospects of participating in a genuine contest.

Australians deserve a newspaper industry of diverse ideas. They deserve authoritative and inspiring journalists, who command with compassion and respect for all. They deserve a media that can clearly describe a future Australia of which we can all be proud – not one that will divide, marginalise or exclude. They deserve more than to be thrown scraps of policies couched in negative terms, or policies that are not properly scrutinised and debated. As it stands, The Australian is being given a free run by an Age which is tormented by its own frailties; too many of the The Australian‘s proposed policies, some little more than slogans, are sliding through.

The Australian advocates contentious policies on the carbon tax, the mining tax and schools funding; these are just the start of it. Yet The Age under Mr Holden has been unable to step up to the contest. The Murdoch press is being allowed to run almost entirely unchallenged with their preposterous calls for the government to ”stop the boats”, in part by turning back the pathetic trail of rickety vessels laden with asylum seekers. This is a potentially dangerous and deeply dispiriting approach. The Age’s inability to unscramble this sloganeering is damning.

Time is running out. The Age needs to refresh its public face and present a compelling, united and inspiring voice. It is capable of doing so. Now it must find the will. There may only be one chance to minimise the damage that appears inevitable in September. To do nothing would implicitly weaken the democratic choice. If it is to be done, it is best done now. But it must be an unequivocal and energising change for the better.

A fable of Eunuchs, Praetorians, and University funding cuts.

Imagine yourself to be in the mythical Land of Beyond where you need minions to do a dirty job that men with honour would refuse to do. A classic trick in this situation is to pick people despised by the rest of society who are thus dependent on protection and will simply do what is asked for.

The Chinese emperors hit upon this truth when they started to surround themselves with eunuchs, despised by the rest of Chinese society and thus fiercely loyal to their protector, the Emperor. The roman emperors, similarly, made a habit of surrounding themselves with freed slaved who were despised by other Romans, as well as by a dedicated palace guard (the Praetorians) who were the only militia allowed in the vicinity of Rome.

The European colonialists too used this basic ‘dirty dozen’ technique when it came to keeping a large population in check with minimal own presence, particularly in Africa, by elevating some small despised group (ethnic or religious minorities) as the preferred club from whom the senior administrators came. This small favoured group would get personal benefits (riches and influence) but in return they would do whatever the colonizers wanted.

To see the relevance of this for university cuts in the Land of Beyond, you first need to step back a level and imagine yourself to be the Vice Chancellor of a second-rate university that brings in, say, a billion ‘Beyond’ dollars a year out of which some 300 million is money you dont really need to generate that 1 billion. It is ‘potential profit’ if you like.

Now, your first thought will of course be to give as much of this money to yourself as you can. That is not so easy though: in Beyond, universities are non-profit organisations nominally run by senates and full of academics who like to monitor and criticise you. You would never get away with giving yourself multi-million dollar salaries and huge offices if academics are really watching your every step.

So in order to get more of the profit, you need to subdue two groups, the academics and the senate. You subdue the academics by keeping them busy with ‘compliance’ and having a lot of systems in place to punish them if they become pesky. You thus include in your rules that anything that harms the reputation of the university is a sacking offence. You put yourself at the top of the committees that decide on professorial promotions and academic bonuses so that you are their direct boss. You appoint hundreds of administrators to monitor the media, teaching, and student-related activities of the academics with the purpose of keeping them quiet and punishing them when they get out of line.
You subdue the senate by overloading them with information (for which you need again more administrators) and by keeping them happy with luxuries and gifts. Over time, you attempt to get control of the mechanism via which new members get to be in these senates.

Now, the essential problem you face in this as a VC is how to ensure that the people helping you with your take-over plans are somewhat loyal to you rather than to something as silly as the goals of the university or academia or even to the needs of Beyond. It is loyalty to yourself that you need in order to eventually be able to get away with giving yourself huge amounts of money.

You remember your history lessons and realise that what you need is a set of eunuchs: people despised by the academics in your organisation who will thus have the same incentive as you have to subdue the academics and grab as much of the university resources as possible.

What are the equivalent of eunuchs in universities? Why, non-academics of course! Better still, non-academics whom you give academic titles for they will be even more despised! Hence you pick the most efficient bullies you can find, call them all professor and put them in charge of the divisions that subdue the academics and that send mountains of information to the university senate to ensure they will just go along with whatever you happen to ask of them at the end of some sumptuous occasion.

Due to your brilliance and foresight, the trick works like a charm and you find yourself earning well over a million, with several huge offices, and in a position to bargain for even more kick-backs from outsiders who want to use parts of the university for their own end (property developers and the like).

Now imagine yourself in the layer yet higher: you are now an ambitious paymaster in the Capital of Beyond, someone who nurtures a reputation for being able to get things done even if they might not really be in Beyond’s best interests. You too have a control problem for you want all kinds of things from universities. You would like the universities to keep the population happy by churning out cheap degrees to domestics. You also want universities to sell visas to smart oversees students by means of high fees for almost no education (cross-subsidising those domestics). Basically, you want universities to abide by whatever fancy drifts into the head of your current minister.

The control problem you have as a ‘wheeling and dealing’ senior civil servant in Beyond is again those pesky academics: they are self-righteous, not all that interested in your opinion or even your money, and wouldn’t easily go along with these plans. They might well flatly refuse to sell visas to foreigners because they would baulk at short-changing the education given to those foreigners. Indeed, they would probably laugh in your face if you suggested that universities should fall in line with, say, your wish to have a campus in the middle of nowhere just because it is a marginal constituency.

Just imagine what confident academics would do if you told them to cut their budget by 900 million! Why, they might do something as bold and brash as to honestly tell their students that there are no funds to properly educate them. Imagine the political fallout of such honesty by a bunch of self-righteous academics who won’t simply do your bidding! No no, it is quite clear to you that the last people you want leading universities are academics. You want leaders who know what you really mean when you talk about ‘university accountability’, ‘stakeholder management’, ‘strategic visions’ and ‘preparing for the future’.

So the senior Beyond bureaucrat too finds herself in the situation of needing eunuchs in charge of universities. You don’t mind if they get some private benefits out of the arrangement as long as they do your bidding and not rock the boat politically.

Now think a step higher again and consider why Beyond might have fixers at the top of the ministries …..

 

Pigs must be flying backwards. O’Reilly quotes Leigh

Our former blogger, now Labor MP, Andrew Leigh’s research along with our current but silent recently blogger Christine Neil had their research quoted by none other than Bill O’Reilly. Just watch.

This significant on many levels. First of all, O’Reilly is using the research to argue for tighter gun controls. And he is doing so as convincingly as anyone. Second, when those on the other side of the political spectrum start supporting something traditionally from the other side that means that the tide is turning. Third, Rupert Murdoch has stated that he favours tighter gun controls. Is this evidence that he will exert some influence on Fox News when he needs to?

Anyhow, kudos to our academics for seeing opportunity when it wasn’t topical and doing the hard work in evaluating Australian policy. It does a service to the world. I really hope one day, Andrew, you might do it again.