(Or, why the public's cult of the expert has gone so far that we don't even make informed decisions about which experts are worth listening to.)This is occasioned by, but not limited to, the recent comments by Professor Sir David King, who suggested a couple of weeks ago that the Bank of England's Monetary Policy Committee should have on it a climatologist (link). Yes, a climatologist. I heard him explain his bright idea on the Today programme, and Justin Webb was too polite (or too slow) to burst out laughing instantly .King's reasoning was that the MPC has a labour economist who makes sure that the committee bears in mind the effects of its decisions on the labour market, and so a climate scientist would be able to keep the MPC on the environmental straight-and-narrow. The only flaw in King's plan is that, well, climate scientists are scientists, not economists. The MPC doesn't have a trade union leader, it has a labour economist, and for good reason: economists are experts in economics; trade unionists aren't. (And don't we know it.) Now, if King had suggested an environmental economist sit on the MPC, that would be a different proposal: but climatologists are not experts in economics, and would add no more value to the MPC's discussions than you or I.This is why I don't trust any policy where the main proponents appear to be climate scientists: not because I have significant doubts about their ability to do the science, but because I have profound doubts about their abilities in economics and politics, especially given the absolute certainty with which they make their pronouncements. So I'm not really just writing about Professor Sir David King, whom one might have expected to have a good idea about the divisions between the academic disciplines: the media and the public are at it too, every time they lap up whatever a climate scientists starts saying about 'the policies we need to tackle climate change.' They may be right, but I'd sooner hear an economist say it.And I'm not just writing about climate, either. People ask businessmen what should be done about the economy, as though they necessarily know substantially more about the discipline of economics than you or I. In that regard, Srallen's notorious response to such a question (youtube) was unrepeatably gruff, but at least he didn't rise to the temptation to speak outside his area of expertise.Likewise, the modern tradition of the singer-songwriter has led people to act as though one cannot be good at only one of those very distinct roles. They expect special interest groups, like public sector unions, to have an unbiased point of view on public sector reform. They think — and this is a very personal gripe, because it affects my career prospects — that top-rate research and excellent teaching go hand-in-hand in academia.The truth is that each of these ideas is a misconception, founded on a broader misunderstanding. The public, and the media, want an expert on a particular issue, but instead of listening to the real experts, the media in particular will simply cast around for the mouthiest person from something which sounds vaguely related, and then parade them as some sort of an expert . The misunderstanding is the idea that if someone is good in one thing, then they must be equally good in things which are linked, however loosely, to that one thing. Sure, they may have a slightly better vantage point, but they may also have biasses and they may, in some senses, be too close to the matter to be aware of their own lack of understanding. That causes obvious problems for the way we view government, especially as Whitehall becomes increasingly technocratic and managerialist: it would be bad enough were we handing over our democracy to rule by experts, but we're not even picking the right experts. It was an odd interview. Webb took a lot of flak from the Usual Suspects, because he put some probing questions to King on the UEA email business. He didn't try to undermine King's actual policy suggestions, though. I still don't quite know what Webb was trying to do there.
 Let me be clear that this is the point. If these people were put up as laymen with a point of view, that would be fine: after all, we're all entitled to our opinions, and goodness knows we bloggers have no shortage of those. It is the ascription of the role of 'expert' which is the problem.
Wednesday, December 30, 2009
Tuesday, December 29, 2009
It has been a year for birthdays. Calvin and Darwin, famously; but also a Prime Ministerial anniversary. Arguably the last properly liberal Prime Minister we had, William Gladstone was born on the 29th of December 1809. He was of the Liberal party, and held firmly to the classical liberalism of his contemporaries. He argued vociferously against the income tax, and succeeded in halving it over his period as Chancellor. He was in favour of enfranchising the working classes and a clear believer in limited government and individual responsibility. It was his Chancellor of the Exchequer, William Harcourt, who said of freedom:
Liberty does not consist in making others do what you think right.Gladstone could only have approved. He decried the concept of 'positive freedom' as 'construction,—that is to say, taking into the hands of the state the business of the individual man', and held firmly to the principle that we are to take charge of our own lives and not to rely on the State.As Daniel put it at Charlotte Gore's blog earlier in the year, the man 'was a friggin' hero.'You can read two very good articles about Gladstone in newspapers of very different political stables: Simon Heffer in the Telegraph a few days ago (link) and Geoffrey Wheatcroft in today's Guardian (link).
Thursday, December 24, 2009
Writing about the non-monetary difficulties which taxation can place on a man of business, Smith comments,
Though vexation is not, strictly speaking, expense, it is certainly equivalent to the expense at which every man would be willing to redeem himself from it. (WN, V.2.2. src)It is well-known that Smith adhered to the labour theory of value (wiki), and I believe I might have commented on this earlier. The interesting thing about this quotation is Smith here is quite specifically not adhering to the labour theory. A labour theorist would have written, 'Vexation … is certainly equivalent to the price of the labour necessary to redeem a man from it.' Smith, by contrast, locates the (negative) value of a non-monetary 'vexation' in the price which the businessman is willing to pay to relieve himself of it. This is the subjective theory of value (wiki), which is the view on which almost all modern economic theories are founded.To make clear the difference, the labour theory would say that a tax accountant's time is worth so much per hour, and therefore the vexations of tax accountancy are worth however much you'd have to pay the tax accountant to do the work for you. In order to explain the actual price of a tax accountant's time, the labour theorist has to appeal to the laws of supply and demand without any particularly strong justification for those (observably true) laws.By contrast, the subjective theory explains all of this, by treating the tax accountant's time as a derived price, rather than a given value. Everyone values the time spent dealing with tax matters according to their own personal circumstances: income, free time, ability to handle tax matters and so on. This is the maximum amount they would be willing to pay to be relieved of the administrative burden (Smith's point).We may then derive the law of demand as follows: Tax accountants will capture the business of the people offering the highest amounts (roughly speaking; this process is never perfect, of course). Since there are comparatively few of them, supply is exhausted by demand at the upper end of the price range, and tax accountants' time is consequently priced highly. If the number of tax accountants were to increase by some sudden shock to the system, the price for their services would necessarily descend.I hope you can understand a little of the power of the subjective theory from that illustration, and see that a part of that power is that we can derive the objective laws of supply and demand from our very subjective preferences. Hopefully too, this shows the impossibility of a centrally-planned economy: if prices are derived from the preferences of individuals, then no economic planner can even hope to be able to assign prices to goods in a way which optimises their production.That's the economics, but the history still has an interesting question. Given Smith's earlier and clear espousal of the labour theory, did he realise that this view clashed with his earlier stated view, or was he not aware of the implications of what he was writing? Sadly, I don't suppose we shall ever know.
Tuesday, December 22, 2009
See, this is one of the big problems with the way government operates:
'Logbook loans' to be outlawedOf course, that's the Guardian's write-up, but the point is clear. The government has decided on a policy (the merit of the plan is irrelevant to the point I wish to make) and is now holding the consultation. Open minds might have held the consultation first to gather evidence, and made the decision on the basis of the consultation. But then, open minds are hard to find on the green leather benches either side of the dispatch box.
Government announces consultation into controversial loans which offer cash in return for a borrower signing over their car's logbook (src)
Monday, December 21, 2009
The Hussain case, in which two men beat and incapacitated an intruder who held a family hostage and threatened them with death (BBC), is the latest in a sparse string of cases where people have been punished for what some in society see as 'self-defence'. The Hussain case itself is a tricky one, and might well have turned on the question of whether self-defence was a legitimate claim. Despite that subtlety, however, the general sentiment appears to be that the law has gone too far in criminalising people for trying to defend themselves, their families and their property. Responding to this current, the Conservatives have reiterated their pledge to revisit the legal role of self-defence, with a view to allowing a defence in cases which do not involve 'grossly disproportionate force' (BBC) although they are clear that they would only be reviewing, and have not produced a firm proposal for modifying the law on self-defence.It seems to me that the best place to argue that the current law is unsatisfactory is in the basis of our legal system; and that such considerations would lead us to conclude that something which captures the notion of 'not grossly disproportionate' is best.As we know, we are considered innocent until proven guilty, but in order to lodge a defence of self-defence, the householder must accept the facts of the case as the prosecution presents them, and then differ with the prosecution as to the application of the law. So the householder is arguing that he (for it almost always is a 'he') is not guilty, not because the attack didn't take place, but because he was defending himself. In other words, the householder has cast reasonable doubt on the prosecution case by claiming self-defence.At this point, the law goes wrong. The proportionality test may be thought to be a sensible one, but the problem is that the case is made to turn on various versions of what is proportionate. Given that the householder is assumed to be innocent until proven guilty, and given that we desire proof beyond reasonable doubt, it flies in the face of these treasured principles to let a case turn in such a way that the householder can be required to prove his innocence, rather than forcing the defence to prove its case.That is why the law needs to change, and that is why something like 'not grossly disproportionate' is a good example: by raising the standard sufficiently high, the defence is given the freedom to use reasonable doubt as it is meant to be used, and the prosecution is forced to prove its case as we expect prosecutions to do.
Saturday, December 19, 2009
As a public, we are exceptionally poorly-served by the climate change debate. It is one of the most important debates of our time, and yet false perceptions abound. One of the most pernicious of these, fuelled by the media's inability to ask anyone else to speak, is that there are only two basic positions: either (1) climate change is happening, it is caused by human activity, and a certain set of policy proposals must be enacted as soon as possible; or else (2) it is not happening, humans are not responsible, and the policy proposals ought not be followed.It is not then helped by politicians who talk about the people in camp (1) as being pro-climate change (when, strictly speaking, they are anti) and the people in camp (2) as being anti-climate change (when, strictly speaking, they think it doesn't exist: it's like describing me as being anti-flying spaghetti monster).The 'inconvenient truth' for those two sides of the climate debate is that it is not that simple. There are other positions to be taken in the debate. For example, I would hazard to guess that there are rather a lot of people who take the following view, or something like it:Sure, we see evidence of the climate changing around us. It's been doing this for decades. And carbon dioxide emissions are a reasonable explanation for an element of what's going on: technically, the Sun is the source of all our heat, but atmospheric composition has a part to play in how well the planet retains that heat. But that doesn't mean that cutting emissions is the only policy worth discussing or worth pursuing.I'm one of them, I think. I'm not particularly sceptical about the science , but I am profoundly sceptical about the policy, not least because the politicians are so often refusing to debate it. We get presented with a list of policies which will 'Combat Climate Change', and if we demur, or question their usefulness, we get accused of 'Denying The Science' as though this is some awful thoughtcrime. The irony is, at risk of repeating myself, that I don't Deny The Science; I merely question the wisdom of the policy.One of the frustrations is that climatologists, so precious of their own expertise when others challenge them, have taken it upon themselves to tell us what policies to pursue on the basis of their science. When they do this, they move illegitimately from 'is' to 'ought'. They step outside their realm of expertise and into economics and politics. So when a scientist tells you we need to follow a particular policy to deal with climate change, you can safely weight his opinion as that of an educated member of the public.But why should we be sceptical about the policy, if we basically accept the science? Let me give four reasons.
- Because it suits both main camps to try and shut down the middle ground. The raging greens can't understand how you can come to a different view on policy from the same science; and the science-sceptics keep trying to present themselves as the only face of policy-scepticism.
- Because the politicians and the media won't debate the policy. I haven't yet heard an interview where the interviewer has really understood the case for policy scepticism: they always elide us with science-sceptics. And when politicians are telling us that this particular set of costly proposals to give them more influence and power over our lives is the only way to act, we should have the democratic vigour to treat them with suspicion.
- Because the Stern review, the government's own economic review of climate change, was riddled with dodgy working. He was hopelessly optimistic about the cost-effectiveness of mitigation, more pessimistic than any other study on the cost-effectiveness of adaptation to climate change, and used an inappropriately low rate to discount the future. (wiki)
- Because when it was first introduced, the Climate Change Act 2007 was given an Impact Assessment which concluded that it had a net benefit range of -£95bn to £52bn. This was a measure of the costs of the bill against the benefit in terms of climate change: clearly, the weight was on the side of the bill being a bad idea. The final assessment, made once the bill had been amended, changed this to £53bn to £696bn, and smells strongly of an ex post facto justification. (src)
Friday, December 18, 2009
I know it's said of climate change, and it's true of course, although one must be subtle about this. However, I'm actually thinking of the debate about the value of fiscal tightening. Paul Krugman, Brown's useful economist, says that cutting government spending is going to skewer GDP. In turn, that means that the debt-to-GDP ratio, which measures the affordability of the national debt, would increase; in short, the suggestion is that cutting spending is counter-productive.Given the propensity of the left to cite Krugman as though that settles the matter, I give for your perusal a few academic abstracts on the question of fiscal contraction. You'll note they don't all agree: that's to be expected among people who are trying to understand the evidence. But the overall message is pretty clear: fiscal tightening can lead to GDP growth, and the best kind of fiscal tightening emphasises spending cuts over tax rises. Here they are.
This paper studies the determinants and channels through which fiscal contractions influence the dynamics of the debt-to-GDP ratio and GDP growth. Using data from a panel of OECD countries, the paper shows that the success of fiscal adjustments in decreasing the debt-to-GDP ratio depends on the size of the fiscal contraction and less on its composition. … In particular, stabilizations implemented by cutting public spending lead to higher GDP growth rates.Ardagna S., Eur. Ec. Rev., 48.5:1047 (2003) (link)
Many economists are convinced that longer-term benefits from fiscal consolidation are in a trade-off with short-term deceleration in output growth. However, more recent research suggests that curbing fiscal imbalances contributes to faster growth already in the short term. This paper is about such non-Keynesian effects.Rzonca R. and Cizkowicz P., ECB Working Papers, No. 519 (2005) (pdf)
This study uses the fiscal expansion and consolidation experiences of the industrial countries over the period 1970 to 1995 to examine the interplay between fiscal adjustments and economic performance. A key finding is that fiscal consolidation need not trigger an economic slowdown, especially over the medium term. Fiscal consolidation that concentrates on the expenditure side, especially transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation. Also, the greater the magnitude of the fiscal consolidation, the more likely it is to succeed in reducing the public debt ratio.McDermott J. C. and Westcott R. F., IMF Staff Papers, 43.4 (1996) (link)
This paper presents a dynamic general equilibrium analysis of the hypothesis that fiscal spending reductions may be expansionary. The impact of balanced budget fiscal spending on output in this model is normally negative. Quantitatively, these effects can be large. Moreover, the effects are distinctly non-linear; the higher is the initial fiscal spending to GDP ratio, the greater the expansionary impact of fiscal spending cuts. Nevertheless, the effects are likely to be accrued only gradually, so that fiscal contraction does not lead to large immediate increases in output.Barry F. and Devereux M. B., J. Macro. 25.1:1 (2003) (link)
This paper analyses the characteristics of episodes of fiscal consolidation in the EU exhibiting non-Keynesian features, i.e., followed by an improved growth performance. Roughly half of the episodes of fiscal consolidations that have been undertaken in the EU in the last 30 years have been followed by higher growth. Probit regressions indicate that the consolidations that turned out to be expansionary were more likely started in periods with output below potential and based on expenditure cuts rather than on tax increases. These results appear quite robust with respect to the criteria used to identify the consolidation episodes and to classify such episodes as expansionary.Giudice G., Turrini A. and in't Veld J., O. Ec. Rev., 18.5:613 (2007) (link)
Monday, December 14, 2009
In response to the public outcry over the extent and the severity of the Vetting and Barring Scheme, the Department for Screaming 'Paedo!' at Adults undertook a review of the scheme, which recommended modifications (BBC). The scheme, if you haven't been following this story, is a means of checking on adults who have regular contact with children in a formal setting: a school, a playgroup, a Scout troop, that kind of thing. Apart from the insanely wide remit, which appears to cover almost anything except raising children of one's own, one of the more insidious aspects of the scheme was that the officials would act not simply on judgments in court, nor on evidence produced therein, but on allegations and accusations. 'Innocent until proven guilty' has never been a favourite principle of this Labour government.So the review reported, and the DCSF has accepted its recommendations in full. The evidential requirements will not be
weakened [strengthened is what I meant!], but the number of people caught in the net of this scheme will decrease from 11 million to 9 million, although the BBC is reporting that the number could be a bit higher than that. This is not a U-turn; this is a 'tweak'.The expectation of the civil servant running the scheme is that an extra 20,000 individuals will be prevented from working with children as a consequence of this scheme. (That figure from an interview on this morning's Today programme.)I'll let you digest that. Checking up on 9,000,000 people to catch 20,000. That's a catch rate of just a little over 0.2%. That's not using a sledgehammer to crack a walnut, it's using a wrecking ball.And what, I wonder, is the false positive rate of this procedure? I'd be willing to guess that it cannot be much lower: if it is even 0.01%, a thousand people prevented from working with children — and enduring social stigma as a result — will be entirely innocent. Can we live with our consciences if we blight the lives of a thousand through false accusations which they have no way to challenge, no recourse to clear their name?Another principle of English law, Blackstone's Principle — better to free ten guilty men than to convict one innocent one — is set on its head by this government.Labour came into office promising to be tough on crime, and promising constitutional renewal. I don't think that abandoning the rule of law and the principles of liberty were the means by which we expected them to achieve those goals.
The New Economics Foundation, an anti-free-market thinktank, has issued a report claiming to assess the value of various professions (BBC). Are they credible?Not on your nelly.You might want to agree with them that hospital cleaners are worth more than bankers: the claim is that cleaners create £10 of value for every pound of pay, while bankers have destroyed £7 of value for every pound of pay. But wait a minute.First of all, the bankers were responding to a market with government-structured incentives. The credit crunch which, as Gordon Brown reminds us at every available opportunity, began in the States, had as chief among its causes the government-sponsored enterprises Fannie Mae and Freddie Mac, especially since the US federal government had been using them as a tool of social policy to encourage people into home ownership who, frankly, couldn't afford to own a home. That was bad policy for banks, bad policy for the economy and extremely bad for those people who were mis-sold a home by Washington. The administrations which ran this crazy scheme thought they were being nice to the poor by encouraging them to own a home, but if those poor people have been forced into bankruptcy, then they are worse off than when they started.So actually, it was politicians and regulators who destroyed all that value. But hey, let's keep blaming the bankers, even though at least one of the politicians has 'fessed up (link).But here is the reason why I don't believe their results at all:
Tax accountants:Is it really credible to say that a pound spent by a rich person generates no economic benefit while a pound spent by the government generates a pound's worth of economic benefit? Not a chance. The rich — at least, those whose riches come from their own business or exertions — rarely stay rich without being prudent and sensible. The government, meanwhile, spends your taxes and mine on such deserving projects as massive NHS IT projects, ID cards, public 'consultations' and state-funded recipe books. Labour government ministers are the real value-destroyers in the British economy.The aim of this report is clear. Anyone claiming to know the 'true' value of someone's labour to another person is making a power-grab. They believe they are better placed to know what an employee is worth than the employer employing them. The end result is a group of experts — or, heaven forbid, politicians — directing the economy from the centre and determining wages and prices. New Economics? More like Old Bennites, if you ask me.
"Every pound that a tax accountant saves a client is a pound which otherwise would have gone to HM Revenue. For a salary of between £75,000 and £200,000, tax accountants destroy £47 in value, for every pound they generate."
Wednesday, December 09, 2009
He said at today's PMQs, "Mr. Speaker, there are some people who get into the White House on false pretences, and even have their photo taken with the President." Inquiring (and trouble-making) minds want to know. ;-)
Saturday, December 05, 2009
The results from the second open primary contest run by the Conservatives, this one in Gosport, came in yesterday (BBC). Caroline Dinenage (yes, that Dinenage; she's a daughter) won the candidacy. So, out of two open primaries, the Tories have returned two female candidates. Isn't this a more sensible way to increase women's participation in politics, than the rather demeaning all-women shortlist?
Friday, December 04, 2009
Making waves on the Reformed blogs and discussion lists is an article by Stuart Olyott in this month's Banner of Truth magazine, titled 'Where Luther got it wrong and why we need to know' (src) (1, 2, 3). (I note Young Mr. Brown (blog), respected of this parish, has weighed in on one of the blogs.) I haven't read the article since Banner don't put them up on the Internet, but Olyott is interacting with one of Luther's bons mots — should I say, güte Wörte? — in which Luther disclaims responsibility for the storm which engulfed Europe, saying,
I simply taught, preached, wrote God’s Word: otherwise I did nothing… I did nothing: the Word did it all.Olyott asks, is it proper to say the Word did it all, or ought we to say that the Spirit did it all?Abstruse and technical it may sound, but Olyott's concern is that he perceives among British evangelicals a tendency to ascribe agency to the Word which distracts our attention from the work of the Spirit. That is clearly not a matter of mere technicality. As I say, I have not read the article, but there are I think Olyott is labouring under something of a misapprehension. Here is a (re-)quote from the article:
Mediate regeneration teaches that when the Holy Spirit transforms somebody into a new creature in Christ, he uses an instrument to bring this about. That instrument is the Word—the Holy Scriptures. The work of the Spirit is so intimately connected to his instrument, that we can say that the Word of God actually contains the converting power of the Holy Spirit. (src)Olyott contends that it is true, and contrary to this doctrine, to say that:
Although the Word can bring a new spiritual life to birth and visibility, it can never bring about the generation of that new life. God himself must do that, by a direct action of his Spirit within the human soul.If this is a fair summary of Olyott's argument, or a part of it at least, then he appears to be conflating the following three statements:
- The Word of God is typically used by the Spirit as an instrument in regeneration.
- The work of the Spirit in regeneration is exclusively through the external preaching of the Word of God.
- Talk about the role of the Word in regeneration precludes talk about the work of the Spirit in regeneration.
What is true faith?True faith is not only a certain knowledge, whereby I hold for truth all that God has revealed to us in his word, but also an assured confidence, which the Holy Ghost works by the gospel in my heart; that not only to others, but to me also, remission of sin, everlasting righteousness and salvation, are freely given by God, merely of grace, only for the sake of Christ's merits. (emph. mine)Ursinus clearly saw no problem in affirming that the Holy Spirit uses the gospel to create faith, as though it were an instrument in his hands. Again, the Canons of Dordt affirm in Head 3, Art. 6:
What, therefore, neither the light of nature nor the law can do, God accomplishes by the power of the Holy Spirit, through the Word or the ministry of reconciliation.The Westminster divines noted the same truth in the Larger Catechism (link), when they wrote in answer 71:
Justifying faith is a saving grace, wrought in the heart of a sinner by the Spirit and Word of God.Proof texts can be found appended to the two catechisms at the links provided; anyone wishing to clarify the biblical position is encouraged to start there. Therefore, the instrumental role of the Word of God in the work of God is clearly biblical and Reformed (but I repeat myself!). However, Olyott's concern is noted: we must not believe that the Spirit is so bound to the Word that he cannot work apart from it. As the Westminster Confession put it in ch. X, para. 3:
Elect infants, dying in infancy, are regenerated, and saved by Christ, through the Spirit, who works when, and where, and how He pleases: so also are all other elect persons who are incapable of being outwardly called by the ministry of the Word.It is important at this point to note that Westminster delimits this to the outward calling of the ministry of the Word. It is entirely possible — and this we cannot know this side of glory — that the Spirit himself preaches the Word to all those who cannot be called externally. Westminster carefully leaves open the Spirit's instruments for those who cannot be called externally, and we do well to follow their lead.Olyott's rhetoric, as reported on the blogs, opposes any hint of the instrumentality of the Word in the regeneration of sinners: in being as forthright as he is, he is in danger of divorcing the work of the Spirit from the Word of God. On the other hand, the error he wishes to oppose so marries them as to bind the sovereignty of the Spirit to work as he pleases. Neither is true and neither is Reformed: instead, it is correct to say that those of the elect whom the Spirit externally calls by the ministry of the Word, he also regenerates through the same Word; and yet, he does not give us a guarantee that everywhere that the Word is preached, he will do the same work. So we have both a confidence and a spur, which is that the Word is effectual in the hands of the Spirit, so let us pray for those who minister that Word and trust that the Spirit who blesses will do on this occasion as he has been promised in general to do.
Wednesday, December 02, 2009
Today's PMQs contained a novel piece of politics: Gordon Brown agreed with Celia Barlow (Lab, Hove) that Rayners, a company of opticians (link) which was founded in Brighton, was doing good work. He expanded on his comments, telling us how proud we ought to be of Britain's medical researchers and medical companies.I don't believe he really thinks that, though. Surely the best way to demonstrate how proud we are would be to start opening up the health system so that private providers can earn public money for carrying out taxpayer-funded treatments: if Gordon thinks our private healthcare companies are as good as he says they are, why are we cutting them off from doing good for everyone in the UK?