Stumbling and Mumbling

Publishing Cabinet minutes

Should the minutes of Cabinet meetings be published? James Forsyth says not:

If Cabinet Minutes can be released so soon after the event, no one will speak their mind in cabinet anymore.

For me, though, this is precisely the reason for publishing them (subject to caveats such as not jeopardizing national security). We don't want these idiots speaking their mind. We want them to do better than that. And publishing the minutes should achieve this, by improving ministers' incentives to argue better for policies. If a minister knows that a bad argument will be published, he'll be less inclined to press it, and more inclined to press good arguments.
There's plenty of precedent for minutes of policy meetings being released quickly; both the monetary policy committee and Welsh Assembly Government do it, without obvious adverse effects.
Nor is it a big problem if this leads to decisions being taking outside Cabinet. If minutes reveal that some policy decisions weren't taken in Cabinet, we can ask why they weren't.
Instead, the problem here is that I might be too optimstic in believing that publicity will help filter  out bad arguments and select good ones. The danger is that the moronic mass media will misrepresent the minutes, for example by presenting healthy discussion as "splits" or by jeering intellectual arguments. But this is an argument for a better media, not for ministers hiding away. After all, if they've nothing to fear, they've nothing to hide.

Reciprocity and size

Danny Finkelstein says the Tories "should design institutions that encourage reciprocal altruism." But how feasible is this? I fear there are at least  three barriers:
1. Britain's too big. One measure of fellow feeling is income equality. People who have more reciprocal altruism are likely to want greater equality. And this tends to be found in smaller countries than big ones; compare Scandinavia to the US, Brazil, China, Russia. 
Of course, equality is but one measure of reciprocal altruism. But others are also correlated with country size. People in small countries are more likely to trust (pdf) each other, for example.
2. Ethnic diversity. It's a shameful fact that the desire to help others - at least by paying more tax - is greater in more ethnically homogenous countries.
I suspect there's a simple reason for both these points. In large diverse societies people are more likely to regard likely objects of altruism as "others", and this increases the fear that one will be taken for a ride.
A story in Choosing Justice, a sadly neglected book by Norman Frohlich and Joe Oppenheimer shows this. They ran some laboratory experiments to discover what sort of redistribution people wanted from productive to less productive workers. In one experiment, a worker who had done well in one round of tasks stopped working in the second round in protest at having to subsidize a less productive team-mate. But when he saw that his colleague was genuinely trying, but was just not good at the task in hand, he began working frantically to make up.
The message is that reciprical altruism works better when we trust others not to rip us off. And sadly this is more likely in smaller homogenous nations. 
3. Hierarchy. This paper (pdf) found that trust in others - the basis for reciprocal altruism - is   much lower in countries which have been dominated by hierarchical religions. This suggests that hierarchy can break down the horizontal networks of cooperation that generate trust.
Insofar as civic conservatism stands against statism, it recognizes this fact. But the state isn't the only source of hierarchy. Are the Tories really ready to attack hierarchy in general? And if they are, isn't it to this government's shame that the Tories can credibly appear to its left?

In praise of class hatred

The best thing to have happened in the MSM for a long time is Max Gogarty’s blog, which was crushed by a tsunami of class hatred.
Good. There’s much to be said for class hatred.
Just consider some of the advantages a middle-class kid has over his poorer contemporaries. He’s more likely to grow up in a home that promotes learning. His parents give him self-confidence and ambition. He has role models to show that people like him can have successful careers - the importance of which mustn't be under-estimated. In living in an expensive house, he gets into a good state school. And he benefits from positive peer effects whilst kids from the ghetto suffer adverse ones.
All these advantages, though, were not sufficient for little Maxwell (or is it Maximillian, or Maximus Twattimus?) He had to use nepotism as well.
And even that wasn’t enough. His connections then tell us that  little Max is “talented and hard-working” and “impressive.” To which we can only quote Barry Switzer: “some people were born on third base and go through life thinking they’ve hit a triple."
When such privilege is rammed down our throats, it’s entirely right that it be vomited back. Better still, this hatred serves two useful functions.
One is that it gives the middle-class a tiny payback. It shows them that the costs of living in a  class-divided society don’t always fall upon the poor. Of course, little Max can’t help being middle class (though he can help being a pushy ponce with no self-awareness). But nor can the millions of people who’s lives are blighted by poverty and bad schooling help being poor. We should save our sympathy for them.
Also, such hatred sends a message. It says to the middle class: “your so-called achievements and talent mean nothing. Any idiot can have ability. What matters is opportunities. And your class has nabbed a disproportionate share of these. This, not "talent", is the reason for your wealth.”
Above all, though, there’s a third message - if you don’t like our class hatred, there’s a solution - abolish class divisions.

Immigration & social cohesion

Whatever its financial benefits, immigration is bad for social cohesion. Such is the conventional view. But this might be wrong. This new paper suggests that, in theory, migration might actually improve cohesion.
To see the point, start with the standard view, for which there is some evidence. It says people prefer living in ethnically homogenous areas because they find it easier to trust people like themselves; we know how like-minded folk behave. In this view, immigration is a bad thing because it makes the actions of our neighbours more unpredictable. People don't like foreigners not because they are racist but because they don't like uncertainty. This is why anti-immigration sentiment tends to be greatest when the migrants are new - because that's when their behaviour is most uncertain; just look how hostility to Ugandan Asians has faded since the 1970s.
However, there are two forces which can offset this tendency for immigration to increase the uncertainty of others' behaviour.
First, immigration can help in creating new social norms. Take four examples:
1. Danny wants to institute a social norm whereby we all give 1% of our incomes to charity. The presence of migrants might help create and sustain this norm, because it's given us two groups of people who already possess it: Jews with their tzedakah and Muslims with their zakat. Because we tend to imitate others' behaviour, these can give a kickstart to Danny's initiative.
2. If you want to live in a quiet area, you should hope for Indians or Chinese neighbours, as these are less likely than indigenous whites to have regular loud parties or wild teenagers.
3. Immigrants can reinforce norms against heavy drinking. If people have Muslim or American colleagues or friends, they are less likely to socialize with them by spending all night in the pub.
4. Immigration has helped shore up Christianity in Britain; churches are full of Poles and West Indians.
Secondly, the existence of immigration throws the very question of social cohesion and social norms into open discussion. The questions "what does it mean to be British?" and "how can we increase social cohesion?" are responses to mass migration. And the effect of discussing these questions might be to increase trust among people by making hitherto implicit, tacit social norms more explicit.
It's possible, therefore, that immigration might actually be a force for social cohesion, at least in the long-run. Could it be then that the lack of social cohesion as a result of immigration is (just?) a temporary disequilibrium?

Socialism & the state

I fear DK misunderstands socialism. He says:

The entire concept of socialism is based around the idea that a large part of the population is too...thick to be able to look after themselves. Because these people are so...thick, they need wise leaders to look after them and, naturally, everyone seems themselves as that wise leader.
It is an irritating and patronising attitude but is just another reason why I hate bloody socialists. It's also one of the main reasons why Leftist governments always move inexorably towards totalitarianism.

It's easy to see where DK got this impression. But he is wholly wrong to claim that this is the entire concept of socialism.
Indeed, my socialism is founded on the opposite view. I'm a socialist precisely because I believe bosses and politicians know no more than ordinary people, and so their claims to power - based as they are upon a pretence to expertise - are mistaken.
And I'm not eccentric here. There's a long tradition in proper socialism - as distinct from the fat-headed "progressive" pseudo-left Fabian drivel DK thinks representative of all socialists - which  is sceptical of the state. Marxists have regarded the state not as a tool for leading the unenlightened but rather as a device for promoting the private interests of the ruling class. In this sense, Marxism and public choice theory have something in common.
Here, for example, is Fred Engels:

The state, therefore, has not existed from all eternity.  There have been societies which have managed without it, which had no notion of the state or state power.  At a definite stage of economic development, which necessarily involved the cleavage of society into classes, the state became a necessity because of this cleavage....The society which organizes production anew on the basis of free and equal association of the producers will put the whole state machinery where it will then belong - into the museum of antiquities, next to the spinning wheel and the bronze ax.

This might be overly utopian. But it contains an insight which is esasily overlooked by left and right - that the state is no friend of the worker. And socialism and statism are two different things.

Complexity in politics

The people who are giving Alistair Darling stick for his U-turns on CGT and taxation of non-domiciles are missing an important point - that his problems should never have arisen.
Truth is, there is a very simple solutions here: don't tax incomes or capital gains, but land values and consumption instead. If we had more of these taxes, non-doms and hedge funds managers would be taxed upon their Kensington mansions and dinners at the Mirabelle whilst incentives to work would be preserved, insofar motives for doing so were not to have lavish lifestyles.
This would be, potentially, both more equitable and more efficient than current arrangements. If we had them, Darling would not be in the mess he is.
So why are neither more progressive consumption taxes nor land value taxation being even considered? 
Part of the answer, I suspect, lies in a peculiar pathology of politicians' thinking - namely, that problems must have complex solutions.
But why? In our everyday lives, most problems are solved either easily or not at all. And yet politicians hardly ever believe this is true in politics. Their response to the endless "crises" that characterize managerialist politics is hardly ever either "there's nothing we can do about this"  or "this one's easily solved in principle - just give us a few weeks to sort out the details."
Why is this? Part of me thinks it's the representative heuristic - people think that because problems have complicated causes, they must have complicated solutions. Another part, though, thinks it's to do with politicians' self-image. To believe that one is wrestling with complex issues - in an fast-changing modern globalized world of unprecedented challenges of course - is to cultivate a heroic self-image. No such image is projected by believing that solutions are easy or just unattainable.
In this sense, Darling's troubles are the result not (just) of personal individual failings, but of our political class in general.

Leaders' unfree speech

One aspect of the witch-hunt against Rowan Williams hasn't got the attention it deserves. It shows, as Rick points out, that leaders' effective freedom of speech is seriously curtailed. 
Consider just some of the constraints leaders face:
1. The need to maintain the morale of their supporters. Much of the hostility directed at Williams arose from the belief that he should be standing up for Anglicans, not Muslims.
2. The need to smooth over anxieties. As Rick says, a manager who muses, however wisely, about the possibility of selling off part of his business merely imparts fear into his staff and (I'd add) probably increases time wasted in office politics.
3. A fear of avoiding (sometimes wilful) misinterpretation.
4. A need to create an impression of certainty and decisiveness. When leaders talk about "tough decisions" they do so to show how manly they are to take them. They rarely do so in the more proper sense, of drawing attention to tough trade-offs or to undertain pay-offs and the impossibility of gathering sufficient relevant knowledge.
5. A need to identify with the people. A lot of the flak aimed at Dr Williams have been motivated by his apparent academic intellectualism; he's not "one of us."
6.  The need to win marginal supporters. This means pandering to their prejudice.
These constraints can be tightly binding - as Dr Williams discovered when he ignored them. As I've said, power doesn't so much corrupt the powerful as enslave them.
What's worrying about this, though, is the destructive impact it has upon public discourse. One effect it has is to force politicians to speak in a code that is only accessible to media Kremlinologists; think, for example, of all those Blairite speeches about public sector "reform".
But the worse effect is to constrict the range of public debate. Because leaders can't speak freely, and can't discuss the full range of policy options available to them, many reasonable policies - basic income, land taxation, whatever - become marginalized.
And we're left not just with an impoverished discourse, but with a vacuous  politics.

Where's the production function?

Should small schools be closed? Is the government right to build giant prisons? These two questions share a common theme - the theme being that the government's pretensions to technocratic expertise are a sham.
In principle, the question of what size schools or prisons should be is a narrow technical - mere mathematical -  one. The question is simply: what is the production function?
Take prisons. A desirable output might be a low recidivism rate. Our independent variables might include prison size, guard-prisoner ratio, money spent on therapies and education, diet, controls for the type of prisoner and so on. We then regress the recidivism rate upon these variables across all prisons, and estimate the coefficients. We can then see the impact prison size has upon recidivism.
Prison size, then, is not a political question, but a mathematical one.
So, why are questions of school or prison size political ones, rather than mere maths? Here are some possibilities:
1. There are multiple desirable products of schools or prisons. For example, in schooling the desire to maintain community cohesion might argue for small schools, whilst exam grades might argue for larger ones. The production function approach still has a role here, however, as it allows us to better estimate the trade-offs between these objectives. It allows us to say (for example): "keeping a village school open costs one GCSE per student."
2. The notion of a production function might be incoherent. There might be more than one optimum technique. For example, big prisons might work well with big spending on education, but worse than small prisons if there's little such spending. 
3. There might be insufficient variation in inputs to allow us to estimate coefficients well - for example, if spending per pupil varies little from school to school.
4. Politicians - and unions - might not like what production functions say. For example, there's evidence (pdf) that spending on schools on its own doesn't (pdf) do much to improve outcomes.
5. Drawing attention to production functions forces politicians to look at outputs, not inputs. Their boasts of spending billions more on education (or health) become vacuous. And they have to do the grunt work of actually making things work.
Whatever the reason, the fact's the same. In not thinking about the maths of production functions, politicians  - unless they have Sraffian doubts about their efficiacy, which I doubt - are like cargo cults. They practice a sham ritualistic imitiation of rational management, not the substance of it.

Conway and class war

If you're looking for someone who defrauds the taxpayer, you are four times more likely to be successful if you look amongst MPs than amongst benefit claimants. And you're 13 times more likely to find a fraudster on the Tory benches than you are among benefit claimants.
The National Audit Office reported (pdf) recently that there 6964 people were successfully prosecuted or cautioned for benefit fraud in 2006-07. That's one in 2585 claimants.
However, thanks to Conway, there are one in 646 MPs who are fraudsters and one in 198 Tory MPs who are.
Given that there are more fraudsters per person among MPs than among benefit claimants, the questions arise. Why do the main parties make so much fuss about benefit fraud? And why are the penalties for it greater than the penalties MPs suffer for fraud? For cheating the taxpayer of £77,000 Conway is merely suspended from the Commons for 10 days; for most people, being free of the company for MPs for a fortnight would be a blessed relief. By contrast, benefit fraud of such magnitude is highly likely to land you in chokey.
So, why the difference? There are four possibilities:
1. I'm just exploiting sampling error. If you take a small sample (Tory MPs say), the proportions you find of any behaviour - good or bad - are likely to be biased.
2. The sums involved in benefit fraud are larger. True, they are large relative to MPs outright fraud. But they are small relative to MPs incompetence. The DWP  estimates that in the 12 months to September 2006, fraud in Income Support and Jobseekers Allowance cost just £260m (figure 2C of this pdf). That's 26p  for every £10 we'll spend on the Olympics. And it's less than a penny for every £20 of overall government spending. MPs seem to expend a lot of wind on a small problem.
3. Freudian Projection. In smearing benefit claimants, perhaps MPs are doing what queer-bashers notoriously do; they project their own "sins" onto others. Knowing subconsciously that they themselves are frauds - if only in the non-criminal sense of falsely claiming to be able to control society for the better -  they imagine that others are also fraudsters.
4. Class hatred.  Politicians' hatred of benefit claimants is based not upon the damage they do but upon the fact that claimants are low class and unskilled. Conway, by contrast, despite his modest background, is "one of us."

"Contacts, contacts, contacts"

Commenting on Blair's latest job - advising Zurich Insurance on climate change - Bryan Appleyard says:

I know more about climate change than Tony Blair; if I had a dog and had taken it on my last trip to see Jim Lovelock it would know more about climate change than Tony Blair.

He's right, but misses the point. What Blair's selling is not expertise but contacts - not human capital but network capital.
And there's tons of evidence that network capital matters. Knowing other researchers allows scientists to collaborate on generating ideas. Social capital is often crucial in helping scientists turn inventions into companies. Non-executive directors are often useful not so much for their expertise as their contacts with suppliers or customers. And it's a knowledge of other people that helps entrepreneurs make money; any good salesman will tell you that it's at least as important to know your customer as your product.
It's for reasons like this that the internet and mobile phones can boost economic growth, particularly in Africa, and this may be why the privately educated earn more than the state educated, even controlling for qualifications.
Indeed, it could be that network capital is actually more important in raising incomes than human capital. I mean four things:
1. What looks like a return to experience is in fact a return  to knowing more people. If you've done a job for a few years, you'll have met likely employers and your reputation will have grown. Beyond a certain point, it may be these that raise your earnings more than the technical skills you've acquired from an extra year of work. This, surely, accounts for Blair's high earnings now.
2.  Returns to human capital might be over-estimated, if a university education serves to signal ability rather than merely develop it.
3. This lovely paper (pdf) by Marcel Fafchamps estimates that, among agricultural traders, network capital gives a higher return than human capital.
4. Macroeconomic evidence for a strong link between human capital and subsequent growth is surprisingly weak; see, for example, the critiques here (pdf) here (pdf) and here (pdf). 
Which brings us to a nice irony. Blair famously said the key to economic success, for individuals and economies, was "education, education, education." But his subsequent career demonstrates that what might be more important are "contacts, contacts, contacts."