Category Archives: Economics

Inequality In Higher Education and Expectation

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Asked to rank the importance of efficiency, optimisation, welfare, opportunity and equality, I was the only one that placed equality first. The rest of my undergraduate tutor class placed equality last. To a man, to a woman. A politics class came up with the order that the market not people came first.

There was a huge difference between us. They had all been to private school whilst I had been in the state system. I was on a full grant at the grace of the tax payer, whilst they were dependent on a willing and existent family largesse. This was my first choice university, while for most of them it was a consolation having not obtained the grades for Oxford or Cambridge.

I had myself phoned the admissions helpline for one of the colleges at Oxford. My concern was they required a good grade in French. This seemed rather unreasonable as I wanted to read Economics and Politics (PPE). Nor took into account half the lesson time was the French teacher being told she was fat, ugly and probably still a virgin by my less aspiring classmates. They were failing, much as their parents had failed before them. I knew education was my chance not to stay chained to a housing estate by my own ignorance.

Needless to say, I never even reached how poor foreign languages was at my school. The impression was no one actually used this phone line to discuss admission to one of the best colleges in the world. Contrast that with my alma mater. The admission tutor in all his professional career had never heard of my school. Reading my application, he was intrigued enough to lower the usually expected grade requirement.

Even though I more than passed that, there were still hundreds of applicants for every single place with the same grades as myself. My back story, the first person from my family to apply, a school that had never sent an applicant before, in addition to my grades helped me get in.

The reason for mentioning this today, is twofold. It is blog action day on inequality. The other is today I saw a photo of the man I am named after. This John planned to be a physicist, however his father disapproved of education. To a point he threw books at his own son’s head. Rather than becoming despondent, he took refuge in the local library and with the help of teachers applied successfully to university. Tuition fees did not exist, and a generous grant system that covered living costs existed.

By contrast my grant did not even cover the rent. The generosity of the state had not matched the expansion in higher education. The student loan I could take out amounted to £5 a day to live on in the late 1990s.

At University you want the best and brightest going to receive the best education possible. The system should also attract them from the whole of society. Money should not be a barrier, nor parental expectation. Low expectation by schools and the community should not either. There was a reason my degree was never going to be in a foreign language.

Unless we are concerned about equality, too many children will not receive the education that will unlock their potential and allow them to thrive in both the labour market and civil society. Things will never change, if only the elite are able to attend elite universities.

That was the unexpected lesson I learnt in that politics tutorial, so many years ago. It is a lesson too few countries want to learn. It is the price you pay when you treat people as money rather than citizens.

Article written by John Sargeant on Homo economicus’ Weblog

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Video: Sunny Hundal on 60 Million Indian Women Missing

Sunny at the TED Amsterdam Women Conference

Sunny at the TED Amsterdam Women Conference

Hundal explains why there are 60 million less women in India, a unique gender differential in the world.

In Sunny Hundal’s 15 minute TED talk, the gender difference between Indian men and women is explained by economic status. Men are financial assets, women financial liabilities – graphically shown by 8,000 dowry related deaths of women in a year – and that is just the official figures.

Education is not enough, nor urbanisation, to stem the tide of what Sunny describes as a genocide against women from gender selected abortion and infanticide through to dowry deaths. Financial independence will truly empower women. Having jobs, starting their own companies – no longer seen as a burden on family’s resources.

So whilst empowering women is the most effective way to end oppression, education is a means not an end in this. Jobs, well paying careers, which give independence to women are the way forward. We do not just need the right economic conditions but a cultural shift in attitudes which have been dominant for centuries.

As Sunny concludes in an article he wrote on this:

But the problem in India goes to the heart of cultural practices that have been around for centuries. Culture doesn’t just determine a country’s laws and how well they are implemented, it also discourages or encourages violence against women. Practices such as paying dowry for brides, shunning divorced women, passing on inheritances only to men, not putting girls through schools – are all part of the problem. As families get richer, there is more pressure to pay out bigger dowries for girls and they have more money to afford an abortion.

According to one estimate, by 2020 India will have an extra 28 million men of marriageable age. The social impact of such an imbalance is unprecedented in history, and India barely has a police force and judicial system that can cope with the current problem.

Unless the country recognises the gravity of the problem and does more to protect half the population, the social impact will be felt in every aspect of Indian society for decades.

Article written by John Sargeant on Homo economicus’ Weblog

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Immigration – Migrating to a Civil Discourse

Nihil humanum a me alienum puto, said the Roman poet Terence: ‘Nothing human is alien to me.’ The slogan of the old Immigration and Naturalization Service could have been the reverse: To us, no aliens are human.” ~ Christopher Hitchens Hitch 22

“I don’t see how the party that says it’s the party of the family is going to adopt an immigration policy which destroys families that have been here a quarter century.” ~ Newt Gingrich

“Britain’s an island; it’s always had a constant ebb and flow of immigration – it makes it a better place.” ~ John Lyndon

“Uncontrolled, mass immigration displaces British workers, forces people onto benefits, and suppresses wages for the low-paid.” ~ Theresa May, British Home Secretary

“Illegal immigration can never be completely stopped, no matter how high the wall or how many patrol agents you have watching it.” ~ Gail Collins

Whichever side of the Atlantic you are on immigration is an issue that in austere times comes onto the political agenda. For some it is a moral issue rewarding those that work hard and play by the rules, or that people are treated as human beings wanting a decent future and not labeled as illegal immigrants. A political issue in swing states/marginals that will decide the polls if you are too soft.

In the UK two things have recently happened to focus on. The twitter hash tagged #racistvan touring the road courtesy of The Home Office – much derided as reported by blogger FutileDemocracy – and how the government department uses their twitter account.

Illegal immigrants vanguard

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Looking at the van it seems quite clear – if you are illegally residing in the UK go back to your country of origin or face arrest. A telephone number for advice and help with travel documents is included. The small print that by cooperating no fear of arrest or detention. So the credibility of detection and fear of arrest or detention over the benefits of being an illegal immigrant matters for this to work.

A far greater concern is the deliberate profiling of citizens and legal immigrants at our borders and at identity checks for fears that they may be illegal immigrants – treatment which suggests an inhuman alien distinction. We should not have such sweeping low opinions on citizens or immigrants. Suspicion breeds contempt.

Likewise, to suggest legal immigrants would somehow think they were being targeted by the van billboard is not giving them the credit they deserve. The UK has a points system, sponsorship, exceptional talent provision and particular jobs which allow legal immigration. Perhaps a route to achieving legal status would be a more positive way to promote – especially for those with a family.

Such an amnesty is controversial – but the danger is children, who had no part in breaking the law, become victimised as criminals. Ending the detention of such children worldwide is a campaign I urge you to support The right to family life is a protection in the European Convention of Human Rights.

Home Office Twitter Account

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Owen Jones, a left wing young socialist polemicist, invited us all not to feel pride being British reading the Home Office twitter account. How I feel about my government is separate from the loyalty and love of my country. Like the van above the tweets are a sensationalist simple message detaining illegal immigrant suspects.

It is important to know that the law is being enforced, and to have that information and transparency. Equally we should be concerned it is reported impartially and not prejudicially. On that score note the hashtag #immigrationoffenders picked up by Jack of Kent blogger.

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The full quote though is “suspected #immigrationoffenders” in the tweets. The legal argument would be whether suspected makes clear innocence till proven guilty.

[UPDATE: Jack of Kent has commented below that several preceding tweets from those shown above by the home office account neglected to include the word “suspected”. A huge oversight by whoever tweeted as he mentions]

Top 3 Myths On Immigration Debunked Video

One Planet One Human Race

Dignity and cultural diversity of open borders are stronger positives than the economic arguments. For the economy these benefits accrue with smart policies that reflect domestic demand for foreign labour rather than government quotas and restrictions on numbers.

A legal means for immigration, and a path to citizenship are things to have for a vibrant society, strong economy and also the strengthening of a civil nation. There are concerns a welfare state cannot afford, especially in these fiscal belt tightening times, such open borders – but wrong headed government restrictions could mean the solution is worse than the problem. Let alone unfair.

Citizens need to know what law enforcement is doing, making them accountable. This does not excuse gaudy displays or sensationalist reporting. But if you want the far right to be taken on it is important to show immigration law is being enforced.

The debate needs to be measured with a view to the human rather than an abstracted unit of labour. We may be waiting for such a discourse to be maintained in the political arena but we can demand it, and certainly conduct it ourselves when discussing.

It may even catch on.

[Update following Jack of Kent’s comment below]:

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Definitely should have made clearer a few tweets by Home Office missed word suspect – looking back on Jack of Kent’s tweets I included in post realise not make that as clear as I thought. Even with as I said “the full quote … ‘suspected #immigrationoffender’ ” the twitter feed called into question how prejudicial it would be to a defendant’s case.

Should have made clearer that some home office tweets lacked the full quote (not Jack of Kent) – assumed that would be understood. Happy to make clear I was agreeing with Jack of Kent hence RT favouriting his tweets on as I mentioned days before this post on twitter:

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Hope that clarifies.

Article written by John Sargeant on Homo economicus’ Weblog

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The law of large numbers will save democracy

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The usual refrain about democracy is that the average citizen is not informed enough to make a decision. We go through this every once in a while, often after polling and a debate ensues whether the average Joe should be either better informed or even involved. We will come back to Joe later.

The latest is by Mori on the UK: Perceptions are not reality: the top 10 we get wrong

These misperceptions present clear issues for informed public debate and policy-making, which will be discussed at an event being run by the Royal Statistical Society, King’s College London and Ipsos MORI today, as part of the International Year of Statistics.

The top misconception is teenage pregnancy, that on average 15% of girls under the age of 16 get pregnant when actually it is 0.6%.

Sam Bowman at the Adam Smith Institute points out these absolute howlers as quoted by Mori:

  • 29% of people think we spend more on JSA [Job Seekers Allowance] than pensions, when in fact we spend 15 times more on pensions (£4.9bn vs £74.2bn)
  • 26% of people think foreign aid is one of the top 2-3 items government spends most money on, when it actually made up 1.1% of expenditure (£7.9bn) in the 2011/12 financial year. More people select this as a top item of expenditure than pensions (which cost nearly ten times as much, £74bn) and education in the UK (£51.5bn)
  • the public think that 31% of the population are immigrants, when the official figures are 13%. we greatly overestimate the proportion of the population who are Muslims: on average we say 24%, compared with 5% in England and Wales.
  • people are most likely to think that capping benefits at £26,000 per household will save most money from a list provided (33% pick this option), over twice the level that select raising the pension age to 66 for both men and women or stopping child benefit when someone in the household earns £50k+. In fact, capping household benefits is estimated to save £290m, compared with £5bn for raising the pension age and £1.7bn for stopping child benefit for wealthier households.
  • The reaction though of commentators is missing that this is not just about being informed about a particular debate. Such misconceptions impact also on the priority placed with regard social policy issues. That order of priorities based on perception not knowledge may concern us more if it affects the political agenda of Ten Downing Street, not least if the misconception aids a policy we disagree with.

    Thing is we do not get to decide what the voter finds relevant when they form their decisions. Politicians can look to make their arguments to engage with the people to their message, media can report the facts and opinion to sway the political agenda, and political elites will be a fountain of facts that confidently point to policy prescriptions they ideologically support.

    This may matter perhaps more when the informed are split 50/50 on a decision and then Joe who does not know the key facts adds their decision. We may look on in disbelief if they tell us why they decide the way they do if they have an inaccurate perception – but that is for them to decide in the end even if we wonder at how derived. That is democracy, but most policy decisions are not so marginal.

    The best defence here is widespread civic participation. The law of large numbers suggests the more people involved in the decision making process the more likely it is to be based on factual accuracy. Do not worry about Joe thinking JSA is greater than pensions because for every one of him more than two people know not the case. Get enough people involved and Joe will either know different speaking to the other two or be hugely outnumbered in the final decision.

    This will be easier than Joe thinks – he thought only 43% voted at the last UK general election when it was 65% according to Mori.

    Increasing participation rather than trying to get someone to drink from the fountain of knowledge is the way forward, though how data and facts are presented may prove important. Remember the majority of people polled were getting these questions right, based on facts from somewhere.

    Article written by John Sargeant on Homo economicus’ Weblog

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    Secular Economics?

    Quick distinction before we begin: atheism states there is no conclusive proof god exists; secularism that the state is neutral with regards religion using neither coercion or favour on citizens to one belief or another. The conscience of the believer and infidel is safeguarded equally. Sadly an article in the National Catholic Register mixes them up, accusing secularism of adding to the fiscal cliff, confuses the two. They mean atheism and in particular non belief in heaven and hell stopping us being virtuous.

    Economics without God

    Economics does not lend itself to an atheistic philosophy, because political economy is not really into those questions. Marx tackles religion from a philosophical context, and for him economic relationships underpin the social order of any given system in his political economy, theocratic or capitalist. Critical examination of such things matter for him because: “The criticism of heaven turns into the criticism of earth, the criticism of religion into the criticism of law and the criticism of theology into the criticism of politics.” (Marx)

    A moral economic philosophy that may almost sound appealing to atheists is Buddhist Economics by Schumacher. That uses Right Livelihood, one of the eight parts of the noble path, to suggest that economic development needs to also address moral development – something which traditional economics does not model. The idea here, at a basic level, is not simply generating happiness. It is reducing suffering for both labour, producer and consumer. That for Schumacher is the basis of his thinking in using Buddhist philosophy to maximise the traditional economic maxim of optimising well-being.

    That does not require the idea of an after life because Schumacher is using the here and now of a life. With no deity to worship or please Buddhism can be said to be atheistic. However, we cannot get away that the major suffering idea in Buddhism being samsara – the cycle of death and rebirth. The goal is to, by such things as right livelihood, end this cycle, possibly taking many future lives to achieve. As written in Why I Am Not A Buddhist, atheists could reject such ideas as being unverifiable on an empirical level – the same reason for rejecting god. The point is Schumacher in his thesis is not using thoughts of an after life in how we should behave with every day economic activity. Rather he is using philosophical ideas for making very real everyday decisions concerning our own welfare.

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    For the writer at the National Catholic Register, such thinking that ignores an after life explains why the fiscal cliff ever emerged on the horizon:

    To boil it down, the moral world of Christianity was prefaced on the existence of the soul and a hierarchy of its virtues. In this moral scheme, avarice (aka greed) was a vice, and so the inordinate desire for worldly wealth was a character defect that ruined one’s soul (and hence damaged one’s chances for bliss in the next life).

    However, secularism, in rejecting Christianity, left us with no heaven to hope for or hell to fear. One of the effects was the dilution and then dismissal of the need for virtue. The notion arose among early “capitalists” that passionately pursuing one’s own material self-interest actually resulted, as a happy side effect, in producing moral social order and even something like virtue in the individual. In buying and selling, they reasoned one must be honest or risk losing customers; one must be just in one’s transactions for the same reason; one must be industrious and prudent or one’s business would fail.

    But as we became more secular, things became more crass. Some began to argue that a vice, greed, was actually good, because the desire for wealth — especially if it is inordinate and all-consuming — will produce more wealth for oneself and others and spread technological, medicinal and practical benefits that enhance everyone’s life.

    Source

    In summery the desire to spend more than was coming in, and creating a social welfare state like Europe, is to be blamed on us abandoning the notion that at least God is watching and keeping score. Though by spending more on the less advantaged via social welfare receipts may be considered virtuous by some, especially Jesus. Also, when it mentions USA government expenditure being similar to the European level it crucially misses out military spending – account for that and Europe is significantly higher. No mention of “those who live by the sword die by the sword” could mean the cost of holding said sword for so long. Which the USA as number one military spender is equal to the same expenditure as the next 20 odd countries combined.

    Why do I sell myself?

    Adam Smith observed:

    “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

    However that advocate of free markets also had this to say:

    “How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it. All their pockets are stuffed with little conveniences. They contrive new pockets, unknown in the clothes of other people, in order to carry a greater number. They walk about loaded with a multitude of baubles, in weight and sometimes in value not inferior to an ordinary Jew’s-box, some of which may sometimes be of some little use, but all of which might at all times be very well spared, and of which the whole utility is certainly not worth the fatigue of bearing the burden.”

    “Theory of Moral Sentiments” is a primer if you ever believe free market promoting economists by nature lack feeling, or empathy. The economy supplies our wants and needs without appealing to anyone’s better angels. At a restaurant you do not have to convince the waiter you are a good person before he takes your order. The chef feeds you because ultimately they need to feed themselves. How we chose an occupation is a worthwhile question to explore from a material and psychological point of view.

    Gekko

    The article essentially is making as it’s straw-man Gekko from Wall Street. Remember that prior to his “Greed is good” speech he talks about a time when executives were accountable to the stockholder for the running of the business – and that times have changed. He suggests that his ability to liquidate as an asset stripper is the only sanction to make them run a business properly. In a free market economy, to ensure they focus on making real profits for their share holders or else:

    The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.

    IMDB

    Rather than an economic regulator in the sky being taken more seriously in compliance meetings, we could argue that real and immediate sanctions in the career of chairs and executives of boards would be productive. That means real accountability to stockholders, transparency in the statistics of the company, and effective regulation and enforcement of rules including sanctions that will modify behaviour, or at least recuperate any loss and more then punish any reward for breaking.

    As such game theory, moral hazard, and other concepts used in economics would be a better tool than trying to make people believe there is treasure in heaven rather than asking about stock options. Virtue is something we all have an interest in promoting without thinking we need heaven and hell to make people moral. We need something more palpable.

    How we deal with knaves is the thing in the here and now, as well as making our own character not all about the materialistic, but about living a good life that makes us happy.

    The picture comes from a thoughtful blog on thinking about economists of the past here

    Article written by John Sargeant on Homo economicus’ Weblog

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