Stumbling and Mumbling

How intelligence fails

Shuggy asks: how it is possible for supposedly intelligent men to be that stupid? He’s speaking of Tommy Sheridan, but the question has been posed so many times of so many people that there must be some widespread mechanisms which cause intelligent people to act stupidly. Here are a few:
1. Over-confidence. Intelligent people are often surrounded by others who tell them how intelligent they are, and who reward them (though not in Sheridan's case) with prestigious jobs and big money. This can cause confidence in one’s ability to exceed the reality of that ability. Worse still, a high regard for one’s own intelligence is often matched by a low regard for others’, which can cause smart people to over-rate their chances of pulling the wool over others’ eyes. Mr Sheridan follows Oscar Wilde and Lord Browne in thinking he could win a legal action against the facts. 
2. A form of category error. Intelligent people can fail to see that just because you are intelligent relative to others does not mean that you are intelligent enough to solve complex problems.
3. A failure to see that intelligence is context-specific: there are no general purpose experts. A good example of this fact comes from chess. Grandmasters tend to be no smarter than ordinary players. Instead, what they have is a superior ability to recognise chess patterns. But such a skill is not transferable outside of chess.
This sort of problem explains why people who are successful in particular domains look like asses when they step out of that domain, as when scientists, businessmen or artists enter politics.
4. Some mix of the endowment effect and deformation professionnelle causes intelligent people to over-rate wit, originality and bold hypotheses, and to underweight other virtues, such as accuracy or mollifying others’ sensibilities. This is what got Stephen Fry into trouble when  he claimed that women don’t like sex. Larry Summers and James Watson have devoted their lives to doing such things.

Tail risk & incentives

The trouble with Northern Ireland’s water supply reminds me of the financial crisis. Both are examples of the dangers of tail risk.
For years, there was an under-investment in the province’s water supply. This freed up cash in the good years, but left the region vulnerable to disaster in the event of low-probability extreme weather of the sort we’ve seen.
This behaviour was like hoovering up pennies in front of a steam-roller. It yields a small return in good times, but risks catastrophe if you trip up. This is, of course, just what financial institutions did before 2008. In selling credit insurance or holding mortgage derivatives they too made steady low returns, only to blow up when a low-probability event hit.
These are not the only examples. BAA’s low spending on de-icing equipment, or BP’s under-spending on maintenance under Lord Browne, are also cases of firms taking on tail risk and suffering.
But here’s the thing. Such behaviour is not merely the result of particular ownership or market structures: banks were shareholder-owned but NI Water is state-owned; banks were in a competitive(ish) environment but BAA and NI Water are, in effect, monopolies. This raises the possibility that there are incentives to take on too much tail risk which exist across various types of ownership and market structure. There are three here:
1. Losses are socialized. In the case of banks, losses were borne not just by bankers but by tax-payers and workers made redundant by recession. In the case of BAA and NI Water, it is customers who lose consumer surplus. In BP’s case, it was workers who were killed in the Texas City explosion.
2. Positive feedback loops. Imagine there’s a strategy - be it selling insurance or cutting spending on de-icing gear - which yields £3 a year with a 98% probability but loses £150 with 2% probability. This has a negative expected value. However, there’s a two-thirds chance of it consistently paying off over 20 years. During this time, the manager who irrationally implements it will become increasingly over-confident, and his over-confidence will induce his employers to invest more faith and bonuses in him. And rival firms will wish to emulate him. The upshot will be a selection in favour of an irrational strategy.
3. Uncertainty. The above calculation assumes what often cannot be proven - that a strategy is in fact irrational. What’s more likely is that the odds are unknowable. This allows bosses to claim, as Paul does, that spending money to avoid extreme events would be irrational. When the extreme event occurs, therefore, they can argue that they were unlucky rather than incompetent. But the very possibility of being able to make this defence emboldens them to take the risk, in the knowledge that their incompetence can‘t be proven.
Because of this, we can’t say for sure that NI Water, BAA or bankers were definitely incompetent.
What we can say, though, is that there are systemic incentives to over-invest in tail risk even outside of banking.

A role for Simon Hughes?

The government has asked Simon Hughes to “persuade as many [people from poor backgrounds] as possible to consider higher education.”
My immediate reaction was that this is just witless economic illiteracy. The way to persuade people to do something is to give them incentives. But this is the precise opposite of what the coalition has done in raising tuition fees and scrapping Educational Maintenance Allowances. The belief that such policies can be offset by some “special advocate” is to give too much weight to PR flummery and too little to hard material facts.
But then I had a second reaction. Could it be that poor students’ educational choices are shaped by a cognitive bias? If so, Hughes might have a useful role, insofar as he combats such a bias.
I’m thinking here of the availability heuristic. If you grow up poor, you are usually surrounded by adults who are poor; I was 21 before I met a graduate who wasn‘t a teacher. This can give you a downwardly biased estimate of the earnings and job opportunities which a degree brings. As a result, some bright but poor kids mightn’t attend university. If Hughes can publicise the fact that the average graduate earns £3.73 an hour more than the average A level holder, then he might indeed persuade some poor students to go to university.
But would this lead to a net increase in university applications by people from poor backgrounds?
Not necessarily. There’s another cognitive bias which might affect the decision to apply: over-confidence. It’s possible that other poor kids over-estimate their chances of earning megabucks in the City and so go to university even if it does not, in fact, pay.
And let’s be clear. For a lot of men (returns are better for women), tuition fees of £7000 a year will be a bad investment. Ian Walker and Yu Zhu have estimated that this is the case for most men studying the humanities and social sciences other than law, economics or management, and for the lowest quartile of science graduates.
A priori, then, it’s not clear to me that providing better information will, on its own, get more poor kids into university. Maybe my initial reaction wasn’t so wrong.

Happiness & genes

Happiness is partly genetically determined:

We estimate the heritability of subjective well-being at 33%, indicating that about one-third of the variance in individual life satisfaction can be attributed to genetic influences. We also find that there are meaningful differences across gender (women 26%, men 39%) and that the heritability of happiness tends to increase with age.

This is based upon a study of young Americans.
Although there is not a single “happiness gene”, the authors say that “individuals with a transcriptionally more efficient version of the serotonin transporter gene (SLC6A4, also known as 5-HTT) are significantly more likely to report higher levels of life satisfaction.”
Does this undermine David Cameron’s desire to promote general well-being?
In one sense no. A genetic contribution of 33% leaves two-thirds amenable to non-genetic factors, some of which might be changeable by policy.
But there might be another sense in which it does matter. I suspect that it is at the extremes of happiness that genes matter: some people suffer clinical depression, others seem always cheery. At these extremes, happiness policy might have little traction: though of course mental health policy could. This, though, means that such policies affect the middle of the happiness distribution. They might raise people from “can’t complain, I suppose” to “not so bad really.” Would this really be a big deal?

What should be the tax base?

I’m not happy with the debate surrounding UKUncut’s demand for companies to pay more tax. On the left, this seems to consist of denying the evidence about tax incidence, making dubious factual claims, or wibble about ethics. The right,  on the other hand, seem relaxed about the rich minimizing tax.
There is, though, a third way - to consider ways of changing the tax base to make the rich pay more.
For the left, what matters is not that companies pay tax, but that the rich do so. There are, I suspect, at least three ways of achieving this:
1. A progressive consumption tax. This, in effect, taxes high spenders rather than high earners. It is less likely to encourage high earners to migrate, to the extent that such earners live modestly. It can also be a backdoor way of taxing inheritances. Remember - housing is a consumption good, and should be taxed accordingly.
2. Land value tax. Unlike labour or head offices, land cannot migrate, which makes it an obvious candidate for tax in a global economy. A hefty tax on land in Kensington would, in effect, hit the rich.
3. Nationalize the banks. This, in effect, amounts to a 100% tax upon their profits, which they cannot avoid by migrating.
Of course, there are counter-arguments and problems with all of these. And they could be a complement to cracking down on corporate tax loopholes and not just a substitute. But don’t they deserve more inspection than they’ve had?

In defence of Corrie

Over at Labour Uncut, someone claims that Corrie is "a bastion of petit bourgeois Tory values".This is contrary to reason and evidence.

The small businessman does no wrong.

Tony Gordon, owner of Underworld, was a murderer. So was financial adviser Richard Hillman. Charlie Stubbs the builder and Les Clegg the shop-owner were wife-beaters.Arnold Swain the pet-shop owner was a bigamist. Owen Armstrong the builder has arrganged for a love rival to be beaten up and is quite possibly responsible for the explosion at the Joinery.Numerous businesspeople - Leonard Swindley, Annie Walker, Norris Cole - have been pompous snobs. Nick Tilsley, owner of the Joinery is just a bell-end. 

The poor are usually loveable buffoons. Simpletons like Tyrone. Bone-idle shirkers like Jack Duckworth. Harridans like his wife Vera. Feckless dole dossers like Les Battersby.

Yes, anyone with book-learning and ambition, such as Todd Grimshaw or Andy MacDonald, leave two-up, two-downs.But this glib dismissal overlooks the hard-working honesty of Tyrone, the decency and - in his old age - wisdom of Jack Duckworth. And even Les Battersby had his good points; he was a decent father.There are virtues other than pseudo-intelligence and ambition. Corrie knows this, even if our ruling class does not.
The fact is that Corrie was pretty much the first mainstream TV show to feature real working class people. And even now, it shows them to be far more rounded characters than they are ever portrayed by the media-political class.   

"Mr Baldwin” never once received the comeuppance he sorely deserved

But that's capitalism. Sweat-shop bosses don't get their comeuppance. Anything else would not be realistic.

Hoity toity Rita dispenses wine gums, Weatherfield Gazettes and matronly Tory smugness. (Of her surname I have long since lost track, given a predilection for matrimony that makes Liz Taylor look like a one-man gal).

Rita's relationship with Alan Bradley did more than perhas any other TV programme to bring domestic violence to public attention. She has been unswervingly supporting of Sian and Sophie's lesbian relationship. She has been married just twice.

Car mechanic Kevin is a reliable son of toil.

Will someone tell him?

Rosie has graduated into a poster girl for sluttish wastrels everywhere. Sally would have been better sending her to Weatherfield High.

Exactly. How many other TV programmes portray private education so badly, and so stand up for state education (note that, for all his faults, John Stape is a dedicated teacher).

Social mobility has definitely slammed into reverse for Audrey’s brood.

Again, this mirrors society.

There has not been a single trade unionist on those famous cobbled streets in living memory.

Ida Clough. Ivy Tilsley. Peggy Barton.

Ethnic characters are sparingly shoe-horned in. And, wouldn’t you know it, end up running the corner shop.

Lloyd is a cabbie. Cheryl is a barmaid, as was Poppy. Amber and Minnie were students. Nathan was a mechanic.Fiona was a hairdresser. Shirley, Kelly, Jessie and Joanne were machinists.
So who wrote this pish?

Kevin Meagher is a campaign consultant and former adviser to Labour ministers.

Explains a lot, doesn't it?

Repressive democracy

Does representative democracy, as it exists, preclude open rational debate? I ask because of Bob Ainsworth’s call for drugs to be decriminalized.
The thing is, he did not make this call when he was minister in charge of drugs policy, but only now he is an irrelevant, marginal has-been. As a result, it is easy for the main parties to close down the debate.
There are, I think, three filters at work here, acting to prevent a reasoned high-profile debate.
1. Career concerns. Given the public (or at least media) opposition  to legalizing drugs, it would be career death for any politician to support it. As Ainsworth said:

I know that [James Brokenshire] will disagree with me today-he has to; he would not be allowed to be the Minister if he were to agree with me

Hopi puts it bluntly: “You don’t get to have both power and freedom of speech.”
The problem here though is that, as the Heresiarch and SepticIsle both point out, public support for decriminalization is at least in part the result of decriminalization itself. People think drugs are dangerous and a cause of crime because they are illegal. 
This gives us a vicious circle. Drugs are illegal. People therefore think they are wrong. So politicians support keeping them illegal.
2. The logic of collective action. Decriminalizing drugs would confer small benefits onto lots of people - less crime. But this means that, for almost everyone, the benefit of setting up a pressure group and lobbying for a change of policy outweigh the costs of doing so. (A possible  exception to this is the drug-users themselves, who would benefit from less police harassment. But these lack the resources to organize, and even if they did, no-one would listen to them.) The result is that there’s no strong pressure group calling for decriminalization.
3. Social proof. Thanks to (1) and (2), there are very few “mainstream” voices demanding a change of policy. This leads people to think that existing policy must be reasonable, given that so many support it and so few seem to oppose it. They fail to see that, in drug policy, we see an example of what Timur Kuran called preference falsification.
These three filters ensure that we don’t get a reasoned debate about drugs.
But here’s the thing. What’s true of drugs is true of other policies. Should we nationalize the banks, have open borders, establish a citizens basic income, or a market in organ donations, or fully legalize prostitution? In all cases, the above mechanisms act to narrow the Overton window and limit debate. So democracy - in its current form - cannot give us rational policy-making.

Disorder aversion

The student protests have led to calls (apparently rejected) for the use of water cannon and for marches to be banned. For someone of my age, this raises a puzzle. Back in the 1980s, there was more public disorder and violence than there is now, and yet there were no such illiberal demands, at least on the mainland. (Yes, there were restrictions on picketing, but that was class warfare rather than pure illiberalism.) Why the change?
I suspect that what’s happening is that people are more averse to disorder now than they were then. The demand for marches to be repressed is part of the same mindset as bansturbation - even against things that don't exist - and the taking of offence at any slight to our sensibilities.
But why has this mood emerged so much since the 80s? Here are a few possibilities:
1. Increased expectations for government. In the 70s and 80s, no-one had much faith in the power of government: managed decline was the best that could be expected. Today - for reasons not obviously fully grounded in facts - people expect more. They expect the state to provide complete order.
2. Egomania. The left is fond of bewailing the rise of individualism since the 80s. But what I suspect has happened is rather the rise of ego. People have constructed “purified identities” for themselves and regard any challenge to these as existential threats.
3. The increased assertiveness of the police. They - more than in the 80s - regard themselves as a special interest group, and are keener to press their sectional demands.
4. The spread of the media, among which is the rise of 24-hour news channels. This leads to a search for “stories”, and people making a fuss about minor troubles is one source of stories. Also, the media loves to apportion blame, and the desire to avoid this causes the police and politicians to clamp down upon messy reality; "shit happens" is not an acceptable position. And with all those dead trees and broadcasting hours to fill, there’s a demand for nannies and ninnies to plug the space. Just listen - if you have more fortitude than me - to You and Yours.
My point here is not a left-right one. Rather, it’s to repeat something I said a few years ago, that we are losing the culture of liberty. Threats to freedom don’t come merely from the state - whether it is Labour or the Tories in temporary custody of it - or from the police. They also come from public attitudes.

On media bias

Several people have complained about Ben Brown’s interview with Jody McIntyre as evidence of James Bloodworth’s claim that “the gulf between what has taken place on the day and what is reported by the mainstream media has reached increasingly absurd proportions.”
I’m not sure. It seems to me that Brown is pastiching Chris Morris: “rolling towards the police“ is just brilliant.
But I might be wrong. If I am, I suspect that what’s going on here is not an individual’s folly, but rather a set of systematic forces that bias even the reasonable media - I’m ignoring filth like Littlecock - towards the police’s point of view. I’m thinking of several reinforcing ones:
1. Mutual interest. The media need the police to feed them titbits of stories about crimes. You don’t bite the hand that feeds you.
2. Hierarchy speaks to hierarchy. The BBC, like most mainstream media, is grotesquely hierarchical. And like attracts like. Journalists - being comfortable with hierarchy - are sympathetic to other hierarchies such as the police, and antipathetic to decentralized tendencies be they blogs or protesters.
3. Laziness. If you to know the police’s view, a phone call to their press office suffices. If you want to know what protesters think, you have to get off your arse and look for them. The former generates regular contact, which in turn naturally generates a mutual sympathy which one-off interviews do not. In this sense, the bias towards the police is a part of a general journalistic failing, a bias towards any well-resourced special interest group which plays the PR game. As Oliver Kamm once said, the BBC is “a soft cushion bearing the impress of whichever pressure group sat on it last.”
4. Class. Ben Brown went to Sutton Valence school, where fees (including boarding) are almost as much as the typical worker earns all year. He, like his colleagues, comes from that class for whom the police is a benign service, rather than an alien oppressive power. And, naturally, they are more sympathetic to well-spoken, clean-shaven empty suits than to scruffs like Mr McIntyre.
5. Agency. Journalists are much better at looking for individuals who are responsible for doing things, rather than at impersonal social and psychological forces or emergent behaviour; this is why they are traditionally so bad at reporting finance and economics. But this bias means they are determined to split protesters into peaceful protestors and troublemakers, and oblivious to the possibility that conflict thrill turns some protestors and police towards violent behaviour even if they set out without such intentions.
6. The impartiality myth. Protesters are an obviously biased group. Police, by contrast, are regarded as impartial upholders of the law. The result is that the media stand with the police, and see things as police do. The job of reporting from protesters’ viewpoint is left to blogs and the fringe media.
These biases generate a systematic tendency for even reasonably honest journalists to side with the police and against protesters.
I say this not to allege widespread police misbehaviour, nor to deny that some protesters have behaved badly. It’s just that I wouldn’t expect unbiased reports of such behaviour from the media.

Caring about the X Factor

“Do clever people care about the X Factor?” asks Matthew Taylor.
Yes - by definition. The X Factor final got 17 million viewers. Any clever person must be curious about such a significant social phenomenon. There is, in my dictionary, though not I fear Matthew‘s, a difference between being clever and being a pompous self-obsessed middle class prat.
Although I wouldn’t dream of buying an album by any of the contestants, I’ve watched the series with a morbid fascination. I say morbid because I think it highlights some of the less attractive features of our culture.
I don’t refer to the pursuit of fame without merit. The point about all those hopeless auditionees is that we laugh at them, not with them. Talent sumps such as Jedward and Wagner get ejected eventually. And, let’s be honest, Rebecca at least is not without ability.
Instead, I have four problems. One is that the show highlights just how fickle and inconsistent is public taste. Past winners of the X Factor/Pop Idol include Steve Brookstein, Michelle McManus and Leon Jackson. All were hailed as great stars at the time. None could fill a room today, apart from Ms McManus who can do so on her own.
Secondly, the show reveals the public’s Dianafied desire for empty histrionic emoting. Contestants are applauded for hitting “big notes”, with the result that the tenderest love song is belted out like Brian Blessed greeting a long-lost friend at the other end of the Emirates Stadium.
Thirdly, there’s the perpetuation of a form of the fundamental attribution error - the notion that the singer matters more than the song. But this is not true. Many people - Elton John, John Lennon, Bob Dylan, Willie Nelson… - have had successful careers despite having indifferent voices, because they’ve written great and/or popular songs. Mariah Carey is almost unique in thriving for long by singing bad material.
Take That show what I mean. When they broke up, everyone tipped Gary Barlow or Mark Owen for solo success, and thought Robbie Williams would disappear. They were wrong, not because Robbie had the talent, but because he had the songs. 
Another version of this elevation of the singer over the song lies in the ambiguous attitude to tradition. On the one hand, this is scorned. The singer who tries to adhere to a particular genre is urged to show more versatility. On the other hand, though, it is regarded as a resource to be plundered at will - as exemplified by this tin-eared insult. 
In both respects, the X Factor is the antithesis of The Genius:

Music is so much about what our dead gave us. It’s a cultural medium that speaks backwards and forwards to the generations. Dead people designed the guitar and the piano and recording devices, amplifiers. Gazillions of lives of dead people and animals went into designing these bodies we sing out of. We’re the tip of an iceberg.

There is, though, a curious thing here. A programme such as the X Factor would have been inconceivable in the 60s,70s or 80s; teenagers and 20-somethings singing songs written before they were born would have been an anachronistic freak show. So why is it possible now? It is, I suspect, because popular music today is no longer a progressive or rebellious force, but rather something safe for both capitalists and all the family.
But then, wasn’t this always so? The fact is that pop music - be the lies of John Lennon or the truth of Johnny Rotten - never did change the world, and was only ever a commodity surrounded by romantic illusion.
In all this, I suspect, lies the reason why so many affect to dislike the X Factor. They’re shooting the messenger. The X Factor draws attention to some truths we’d rather not know.