Sunday, 31 August 2008
All in the mind...
I was googling around last week and found something that Matthew Taylor of the RSA wrote on his blog a few months back that chimed with what I've been thinking lately. Here's a snippet:
Certainly it does seem that a lot of interesting stuff in the future is going to be based a lot more on an understanding of how we actually think, make decisions etc, rather than assumptions about our behaviour (ie that we will respond rationally to incentives).
Personally speaking, the George Lakoff stuff I've read lately has had a big influence on me. To be honest I find his attempts to apply some of his insights to politics far less interesting than the original theories themselves, which really do reveal a lot about how our minds work. If you accept the idea that our ways of thinking about the world are not abstract and machine-like systems but rather are deeply rooted in our human experiences (including basic experiences like movement) it does put a rather different perspective on things. It also suggests answers to why so many of our ideas don't work, and so many of our predictions are wide of the target. Often I think we simply don't properly grasp what we are dealing with.
Then you've got the rise of behavioural economics, seeking to apply insights from psychology and sociology to economic decisions. I find this stuff really interesting since it has had a bit of an influence already in two areas I've been involved in - pension reform and institutional investment (though the book that first got me interested was probably the Paradox of Choice). It helps explain why when we make economic decisions we don't act like the rational creatures we have been presumed to be. Very small influences, intended or not, can have a significant impact on our actions (for example, the way a game is named can change the way we play it).
My one reservation is that to date a lot of these developments have been better at highlighting how we get things a bit wrong, and make mistakes, rather than helping identify how we might do things better (though perhaps books like Nudge are starting to address that). But in general I think that Matthew Taylor might be right to argue that there is fairly significant shift taking place.
I think the Tories have been quite canny to talk about these kinds of ideas, though I'm still sceptical about the extent to which they will really apply them, as the recent food-labelling decision highlights. In addition I think that some of findings from these new areas of research pose some pretty big challenges for the typical right-of-centre view of the world. It continues to baffle me therefore why the Left doesn't take more of an interest and even champion some of these ideas.
advances in related fields of inquiry and activity together amount to what could become a paradigm shift. One way of putting this is that instead of being concerned primarily with what we think about the world and how we act on this we may increasingly be concerned with how we think about the world.
By ‘what we think’ I mean conscious thought expressed through the always and ever present ‘voice’ in our heads, and though intentional verbal and written communication. By ‘how we think’ I mean the ways in which the unconscious processes of our brains condition our thoughts and behaviours.
Certainly it does seem that a lot of interesting stuff in the future is going to be based a lot more on an understanding of how we actually think, make decisions etc, rather than assumptions about our behaviour (ie that we will respond rationally to incentives).
Personally speaking, the George Lakoff stuff I've read lately has had a big influence on me. To be honest I find his attempts to apply some of his insights to politics far less interesting than the original theories themselves, which really do reveal a lot about how our minds work. If you accept the idea that our ways of thinking about the world are not abstract and machine-like systems but rather are deeply rooted in our human experiences (including basic experiences like movement) it does put a rather different perspective on things. It also suggests answers to why so many of our ideas don't work, and so many of our predictions are wide of the target. Often I think we simply don't properly grasp what we are dealing with.
Then you've got the rise of behavioural economics, seeking to apply insights from psychology and sociology to economic decisions. I find this stuff really interesting since it has had a bit of an influence already in two areas I've been involved in - pension reform and institutional investment (though the book that first got me interested was probably the Paradox of Choice). It helps explain why when we make economic decisions we don't act like the rational creatures we have been presumed to be. Very small influences, intended or not, can have a significant impact on our actions (for example, the way a game is named can change the way we play it).
My one reservation is that to date a lot of these developments have been better at highlighting how we get things a bit wrong, and make mistakes, rather than helping identify how we might do things better (though perhaps books like Nudge are starting to address that). But in general I think that Matthew Taylor might be right to argue that there is fairly significant shift taking place.
I think the Tories have been quite canny to talk about these kinds of ideas, though I'm still sceptical about the extent to which they will really apply them, as the recent food-labelling decision highlights. In addition I think that some of findings from these new areas of research pose some pretty big challenges for the typical right-of-centre view of the world. It continues to baffle me therefore why the Left doesn't take more of an interest and even champion some of these ideas.
Saturday, 30 August 2008
Short review of The Sub-Prime Solution by Robert Shiller
Robert Shiller has written some very interesting things over the years. In my opinion Irrational Exuberance is still one of the best books to read about stockmarkets, and in the New Financial Order he set out some new ideas for democratising finance so that it better serves the public. This book (actually it's more of a pamphlet) draws a bit on the ideas mapped out in the New Financial Order as a way out of the current mess.
To massively over-simplify, Shiller says we need a mix of short-term sticking plasters and longer-term reforms. In respect of the former camp he says we have to accept bailouts as a necessary evil, even though it goes against the moral hazard arguments. he also suggests setting up a revamped Homeowners Loan Corporation which would take on mortgages as collateral for loans to mortgage lenders in return for influencing the form future mortgages take (in order that they offer a better deal to homeowners).
Turning to the longer term Shiller sets out 6 key policies - comprehensive financial advice (based on fees rather than commssions), the establishment of a consumer finance watchdog, the creation of more default financial options (not just pensions, mortgage arrangements could also be included), improved financial disclosure, to improve accountability, the creation of better financial databases which would help provide consumers with better advice and more tailored products, and finally and most radically the creation of new units of economic measurement, based on what things actually cost.
There are big plus points about this book. First, Shiller is willing to think big. he's effectively arguing for more financial innovation, not less, but also that the process should be carried out in a way that meets the needs of the public. Secondly he warns against scapegoating the financial sector. In the epilogue he argues that we should be focusing on the systems that went wrong, rather than seeking to punish the industry as a whole. As tempting as it might be to try to stick the boot into the super-rich in the City, that isn't really going to take us very far. Shiller instead is setting out some new ideas for how we might stop this kind of crisis arising again.
To massively over-simplify, Shiller says we need a mix of short-term sticking plasters and longer-term reforms. In respect of the former camp he says we have to accept bailouts as a necessary evil, even though it goes against the moral hazard arguments. he also suggests setting up a revamped Homeowners Loan Corporation which would take on mortgages as collateral for loans to mortgage lenders in return for influencing the form future mortgages take (in order that they offer a better deal to homeowners).
Turning to the longer term Shiller sets out 6 key policies - comprehensive financial advice (based on fees rather than commssions), the establishment of a consumer finance watchdog, the creation of more default financial options (not just pensions, mortgage arrangements could also be included), improved financial disclosure, to improve accountability, the creation of better financial databases which would help provide consumers with better advice and more tailored products, and finally and most radically the creation of new units of economic measurement, based on what things actually cost.
There are big plus points about this book. First, Shiller is willing to think big. he's effectively arguing for more financial innovation, not less, but also that the process should be carried out in a way that meets the needs of the public. Secondly he warns against scapegoating the financial sector. In the epilogue he argues that we should be focusing on the systems that went wrong, rather than seeking to punish the industry as a whole. As tempting as it might be to try to stick the boot into the super-rich in the City, that isn't really going to take us very far. Shiller instead is setting out some new ideas for how we might stop this kind of crisis arising again.
Friday, 29 August 2008
TPA says don't even join the LGPS
The TaxPayers Alliance mob are reaching a new level of anger at the Local Government Pension Scheme (LGPS). Now they don't even want Tory councillors to join the scheme (just Tory ones, funny that an independent lobby group only appeals to one political party eh?). The 'argument' is that since the Tories want to cut back the LGPS (though the TPA aren't sure if it should be a DC or a DB scheme) they shouldn't let their councillors join it.
So Councillors shouldn't even accrue a pension until what's on offer is less generous - no pension is better than an LGPS pension. This is getting close to an actively anti-pension stance, and is already very stupid one. Why not take it further - David Cameron and his colleagues should leave the MPs' pension scheme immediately and when they retire should repay their pensions to the state.
I'm not thick enough to think that increased life expectancy doesn't put pressure on public sector schemes, and that some reforms are probably inevitable, but the TPA don't contribute anything to addressing this. They are only interested in attacking what good pension provision remains without a clear idea of what should offered instead. They say that employer contributions to the LGPS are "very high", yet they are lower than comparable contributions in the private sector and many LGPS funds manage to keep other costs (admin, investment etc) much lower than average.
As I've said before, the real problem in pensions is the collapse of good provision in the private sector and that's where attention should be focused. Public sector provision hasn't suddenly become generous overnight, it's a reminder of what typical pension provision looked like in the public and private sectors a few years ago. Yet the TPA's ideological blinkers don't allow them to see this, hence they advocate vanadlising good provision purely because it's in the public sector.
TPA campaigns director Mark Wallace said: "The Conservatives keep talking about public pensions and how they need reforming. With the LGPS they have a real opportunity to show their intent.
"They control the majority of local councils and could put a stop to their councillors joining the scheme. You can’t criticise the level of employer contributions in the scheme while you are at Westminster and then have your councillors signing up to it across the rest of the country."
So Councillors shouldn't even accrue a pension until what's on offer is less generous - no pension is better than an LGPS pension. This is getting close to an actively anti-pension stance, and is already very stupid one. Why not take it further - David Cameron and his colleagues should leave the MPs' pension scheme immediately and when they retire should repay their pensions to the state.
I'm not thick enough to think that increased life expectancy doesn't put pressure on public sector schemes, and that some reforms are probably inevitable, but the TPA don't contribute anything to addressing this. They are only interested in attacking what good pension provision remains without a clear idea of what should offered instead. They say that employer contributions to the LGPS are "very high", yet they are lower than comparable contributions in the private sector and many LGPS funds manage to keep other costs (admin, investment etc) much lower than average.
As I've said before, the real problem in pensions is the collapse of good provision in the private sector and that's where attention should be focused. Public sector provision hasn't suddenly become generous overnight, it's a reminder of what typical pension provision looked like in the public and private sectors a few years ago. Yet the TPA's ideological blinkers don't allow them to see this, hence they advocate vanadlising good provision purely because it's in the public sector.
UNI report on private equity investment
UNI has put out a useful little report (PDF) looking at pension fund investment in private equity as an asset class. It helpfully points out where the labour movement has representation in the funds that are investing in PE (actually this is quite common).
It's another sign that unions are developing another element to their engagement with private equity. So far we've had the air war - the 'fat cat' media campaigning - and policy engagement (ie lobbying for changes to taxation, for TUPE to apply to PE takeovers etc). But the next stage looks to be developing the capital stewardship role - finding out which of our pension funds invest in PE, and where we have trustees involved in the decision-making process.
The UNI report is good as it suggests ways that trustees can constructively engage, rather than firing them up to distrust PE as an asset class. And they've produced the set of principles below as a framework.
It's another sign that unions are developing another element to their engagement with private equity. So far we've had the air war - the 'fat cat' media campaigning - and policy engagement (ie lobbying for changes to taxation, for TUPE to apply to PE takeovers etc). But the next stage looks to be developing the capital stewardship role - finding out which of our pension funds invest in PE, and where we have trustees involved in the decision-making process.
The UNI report is good as it suggests ways that trustees can constructively engage, rather than firing them up to distrust PE as an asset class. And they've produced the set of principles below as a framework.
Global Principles for Private Equity
1. The goal of private equity deals should be to create economic opportunities that align the long-term interests of everyone and that build the value of a company.
• For customers this means a commitment to maintaining good quality services or products.
• For owners it means a fair and reasonable return on capital investment by means of increasing the efficiency and productivity of the company rather than cuts in jobs and benefits.
• For employees it means protection of wages and conditions, decent work and working conditions and fair treatment free of discrimination.
2. Private equity firms must recognize the role of the Global Union Federations in their respective membership areas UNI calls upon them to undertake to develop a global dialogue with the Global Unions.
3. UNI Global Union will endeavour to negotiate global framework agreements with the relevant private equity companies.
4. In these agreements, private equity firms will commit to abide by the core labour standards of the ILO, in particular Conventions 87, 98 and 135, the ILO Tripartite Declaration on Multinationals, and the OECD Guidelines.
5. Where a private equity firm is buying a company, existing union recognition must continue. Such union or unions must be consulted and be able to negotiate the terms of the workers’ participation in the deal and its effects.
6. Such consultations and negotiations should take place, whenever possible, prior to the deal being announced, but in every case prior to the deal being closed. The private equity firm will provide the union with details of the business plan for the company, including equity and debt levels, investment plans, earnings expectations, risks, and other information necessary for the union to be an informed negotiating partner with the company and its new owners.
7. Private equity firms, companies and unions must abide by existing collective bargaining agreements, whether national, industrial, company-wide, or plant-specific. There shall be no unilateral changes or elimination of terms without collective bargaining.
8. Where employees are not already represented by a trade union, companies will recognize their right to organize. The company will allow the union access to the employees. The company will not act in any way to discourage or prevent employees from joining or creating a union.
9. As part of a global agreement the private equity company will agree the most expedited, legally-permitted means for determining employees’ wishes to be represented for purposes of collective bargaining.
10. Private equity portfolio companies will sign up to UNI’s responsible contractor policy and only hire contractors that have a demonstrated record of responsible labour practices, including abiding by all applicable labour laws; honouring the right of workers to organize into a union; ensuring workers fair and decent wages and benefits; maintaining safe and healthful working conditions; maintaining a policy of no-tolerance for discrimination; and providing adequate training to workers.
11. Prior to exiting or ceding control of a portfolio company, private equity firms shall ensure that collective bargaining agreements and related agreements, including outsourcing arrangements and organizing procedures, shall be continued or assumed by the new corporate entity, owner or owners as a condition of sale.
Thursday, 28 August 2008
HP sauce
Ooerr… I feel a bit disoriented by the mud-slinging that is going on over the attempt to ‘censor’ Eustonite blog Harry’s Place. You can read the background to the fight... errr... pretty much everywhere in the political blogosphere. But so far I haven’t found a view expressed that I really agree with, and much of commentary seems driven by political point-scoring in respect of bigger issues.
Here’s my random collection of thoughts:
• It’s extremely crap to threaten a blog with legal action because they say things you don’t like. Why not just ask them to remove the article/picture in question?
• It’s also crap to caption a photo naming an individual in a way that implies they have links to the far-right (rather than that they have posted a link to a far-right website), even if that wasn’t your intention. A newspaper could easily get sued over this.
• It is unbelievably stupid to post a link to David Duke’s website, and even a quick glance at said website should alert anyone intelligent to its perspective.
• If the link had been posted by, say, a Tory councillor who also claimed it was a mistake and also subsequently threatened legal action what would our response be?
• I have a problem with the whole strategy of ‘outing’ people for doing stupid things. For a site with a strapline that quotes Orwell, this reminds me too much of ‘orthodoxy sniffing’.
In general if there is one thing I hate it is the form of political discussion that seeks to focus on mistakes or trivial inconsistencies in others’ arguments in a way that (deliberately or otherwise) undermines proper discussion of larger issues. This only makes it less likely that people will say what they really think, and hampers out ability to talk to each other (which I consider to be a pretty fundamental requirement to sorting difficult issues out).
So bizarrely, despite my distaste for his politics and even though he clearly has his own agenda, I have a bit of sympathy for the arguments made by verbose Swuppie blogger Lenin, although he doesn’t rise above getting a ‘you’re just as bad as the Nazis’ jab in himself:
The pro-boycott mob in the UCU will (rightly) have been stung by this mistake, and maybe they ought to consider how it is that one of their number can read something written by a far-right nutter and not find anything wrong in it. I’m not at all suggesting that this implies that they are anti-semitic. Though I disagree with them I genuinely don’t believe that this is the case. But I do think it demonstrates that their arguments often degenerate to a cartoony level which really aren’t any more sophisticated than those propagated by the far right.
But equally let’s not pretend that publicly (and imprecisely) naming and shaming an individual for a foolish mistake in a way that may cause them all kindsof problems is some kind of noble expression of free speech. I bet the UCU member who is at the centre of this is getting all kinds of abuse since her name is plastered all over the interweb. Yet it’s Harry’s Place that gets the emotional expressions of solidarity for the terrible injustice it has suffered.
And what was the extent of this attack on free speech? The HP site was down for what, a day or so, whilst mirror sites sprang up immediately and the issue was plastered all over numerous other blogs. Somehow I don’t think Pastor Niemöller would beat himself up too much over this one.
Here’s my random collection of thoughts:
• It’s extremely crap to threaten a blog with legal action because they say things you don’t like. Why not just ask them to remove the article/picture in question?
• It’s also crap to caption a photo naming an individual in a way that implies they have links to the far-right (rather than that they have posted a link to a far-right website), even if that wasn’t your intention. A newspaper could easily get sued over this.
• It is unbelievably stupid to post a link to David Duke’s website, and even a quick glance at said website should alert anyone intelligent to its perspective.
• If the link had been posted by, say, a Tory councillor who also claimed it was a mistake and also subsequently threatened legal action what would our response be?
• I have a problem with the whole strategy of ‘outing’ people for doing stupid things. For a site with a strapline that quotes Orwell, this reminds me too much of ‘orthodoxy sniffing’.
In general if there is one thing I hate it is the form of political discussion that seeks to focus on mistakes or trivial inconsistencies in others’ arguments in a way that (deliberately or otherwise) undermines proper discussion of larger issues. This only makes it less likely that people will say what they really think, and hampers out ability to talk to each other (which I consider to be a pretty fundamental requirement to sorting difficult issues out).
So bizarrely, despite my distaste for his politics and even though he clearly has his own agenda, I have a bit of sympathy for the arguments made by verbose Swuppie blogger Lenin, although he doesn’t rise above getting a ‘you’re just as bad as the Nazis’ jab in himself:
They have behaved unconscionably, thuggishly, in a manner that befits far right websites such as Redwatch (to my knowledge, one of the few other websites that posts photographs, personal information and inflammatory material about private individuals).
The pro-boycott mob in the UCU will (rightly) have been stung by this mistake, and maybe they ought to consider how it is that one of their number can read something written by a far-right nutter and not find anything wrong in it. I’m not at all suggesting that this implies that they are anti-semitic. Though I disagree with them I genuinely don’t believe that this is the case. But I do think it demonstrates that their arguments often degenerate to a cartoony level which really aren’t any more sophisticated than those propagated by the far right.
But equally let’s not pretend that publicly (and imprecisely) naming and shaming an individual for a foolish mistake in a way that may cause them all kindsof problems is some kind of noble expression of free speech. I bet the UCU member who is at the centre of this is getting all kinds of abuse since her name is plastered all over the interweb. Yet it’s Harry’s Place that gets the emotional expressions of solidarity for the terrible injustice it has suffered.
And what was the extent of this attack on free speech? The HP site was down for what, a day or so, whilst mirror sites sprang up immediately and the issue was plastered all over numerous other blogs. Somehow I don’t think Pastor Niemöller would beat himself up too much over this one.
Fidelity bungs the Tories another £30K
In May this year, according to the Electoral Commission website:
Coincidentally I've just done my first post on Labour Outlook about this very issue (before I had the latest figures though).
Conservative And Unionist Party [The]
Conservative Central Office
Fidelity Investment Management Ltd
status: Company
company reg no: 2349713
Oakhill House
130 Tonbridge Road
Hildeborough
Kent
TN11 9DZ
30/05/08
£ 30,000.00
Coincidentally I've just done my first post on Labour Outlook about this very issue (before I had the latest figures though).
Subscribe to:
Posts (Atom)