Category Archives: Modest proposal

Why Greece Needs a Pinochet: A Modest Proposal

A panel of distinguished German experts led by Lars Feld have recently written an interesting column about the Greek debt crisis. It largely echoed a recent piece by Jürgen Stark, former (German) European Central Bank Board member. The gist of these two pieces is basically a) that the problems that Greece faces are essentially self-made b) That austerity works and is the only solution to solve Greece’s economic problems c) that the newly elected Syriza government should continue on the path of drastic austerity of its predecessors in spite of the unrealistic promises it has made to its voters. Germany, of course, is acting responsibly whereas Southern countries have lived beyond their means:

“The political elites of the eurozone periphery are responsible for having lost access to the financial markets in 2010. Years of mismanagement and failure to observe the rule of law have led to increasing budget deficits and mounting debts (…) The truth is that, in contrast to many eurozone countries, Germany has reliably pursued a prudent economic policy. While others were living beyond their means, Germany avoided excess”

Of course, this view has been criticized by dangerous leftists such as Paul Krugman and Simon Wren-Lewis, who argue that the pain inflicted by austerity reforms could have been avoided if it had been carried out less violently, more slowly, or possibly if Greece had left the Eurozone, through external – rather than internal – devaluation. Now, since the Syriza government has committed to stay in the Eurozone, internal devaluation is the only available option, and prices and wages should go down. The state should be rolled back, the public sector downsized, pensions should be cut, wages should decrease, the labour market should be deregulated.

The problem with the reforms favoured by our German friends and the Troika is that they are very difficult to implement in a democratic regime where voters can kick out governments out of power. Indeed, such measures tend to be very unpopular, and governments trying to implement them are bound to face significant electoral losses up to a point where they can no longer rule. This is precisely what happened in most countries of the European periphery, where incumbents at the beginning of the crisis have been systematically voted out of power (e.g Fianna fail in Ireland, the Socialists in Portugal and Spain, Silvio Berlsuconi in Italy, and more recently PASOK and New Democracy in Greece). In Italy, Spain and Greece, anti-austerity or anti-system parties have become leading political forces ahead of established “centrist” parties. The latter have tried to band together in political cartels to implement unpopular austerity reforms, but this strategy has faced severe limits. Indeed, their electoral base has shrunk to a point where they may no longer hold a majority, as happened in Greece. Hence, the main stumbling block impeding Greece from implementing further austerity is a democracy where dissatisfied voters hit by unemployment and falling living standards can vote governments out of power. Karl Polanyi rightly showed that market liberalisations always create a countermovement of protection from society, and citizens badly hit by austerity will turn to political forces that promise to stop the pain, triggering a “countermovement”. This is why extreme austerity such as that implemented in Greece seems difficult to reconcile with democracy.

There is of course a fairly simple solution to this, and that is the establishment of a military junta such as that of Augusto Pinochet in Chile, which has been praised by the likes of Friedrich Hayek and Milton Friedman for the extensiveness of his economic reforms along market lines. Technocratic governments in Greece and Italy were already an attempt to suspend democracy and implement austerity partly in isolation from electoral politics. However, they proved short-lived an fragile. A real military regime would have nothing to fear from unhappy voters bearing the consequences of austerity reforms, and the occasional protest could be easily dealt with through military repression. Pay cuts, which are difficult to achieve in a system with powerful unions, could easily be enforced with military intervention in factories. Portugal’s Salazar, for instance, has a fairly good record in wage restraint during the 1950s and 1960s under state control over unions, and demands observed elsewhere to expand social programs could be swiftly squashed by the political police. It no coincidence that Chile was able to achieve such a level of economic liberalization whereas other countries were wasting time with the consensus-building imposed by democratic institutions.

Greece displays a number of favourable conditions for the establishment of such a political regime. First, it has one of the biggest armies in Europe compared to its population, and up to the crisis, had the largest military expenditures as a share of GDP in the European Union. Second, it also has a past of military dictatorship (1967-1974), and the large support received by Golden Dawn in the last elections shows that a sizable share of its population would be confortable with a fascist regime. This creates good conditions for radical methods. These are clearly the only way to overcome opposition to the radical economic reforms that the Troika and Germany wants implemented in Greece.

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A modest proposal to curtail the political influence of the elderly

Modern political economies are strongly skewed towards the interests of older people. In the United states, per capita spending on the old via pensions or medicare stood at $26’000, while spending on the young via child benefits or other programs was at less than $12’000 (data for the graph below from here). Pensions in particular represent a bigger share of public budgets than any other social scheme, and a large share of health spending goes to care for the elderly. In 2013, the UK spent 139 billion GBP in pensions, compared to 5.9 billion on unemployment, 18.8 on family and children and 37.8 on education. This distribution is even clearer in the case of the US, where pensions and health federal expenditure – more largely targeted at the elderly though Medicare – represented 52% of the federal budget as compared to 16% for education an 8% for other welfare expenditures. At the same time, the United States do not have statutory paid maternity leave.

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The high level of spending on the elderly is of course justified because elderly people need more state support in bad health and old age, and pensions are more expensive than other other schemes because they are meant to be the main source of income of people rather than an ancillary benefit. Many social security schemes were established at a time when poverty was a very salient risk in old age, and when lower female participation in the labour market did not require subsidised childcare or other schemes that young families now require. After the 1970s and the end of the period of high growth that followed WWII, when tighter fiscal constraints on state budgets kicked in, the door steadily closed for the development of new schemes to accompany labour market changes: the welfare state hasn’t been retrenched, but its ability to cover new risks has declined. This is what Hacker calls the policy drift. However, notwithstanding popular images about poor elderly people inherited from previous decades, a large part of this spending now goes to categories of the population that are significantly better off than the average, for instance, in Britain, in the form of fuel allowances distributed indiscriminately of income or wealth.

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This would not be less of a problem if the prospects of the young across generations were similar, but the young of today may never reach the level of prosperity and comfort of the current elderly who started their career during the period of strong growth that followed WWII. Many people worry that the benefits of our current elderly will ultimately undermine those of our future elderly, as the commitments made during the period of very high  growth of the trente glorieuses won’t be sustainable in the long term, with much lower growth rates and productivity growth than before. In Southern Europe, young generations face extremely high levels of unemployment while they are paradoxically much better qualified than their parents. Many companies implement a “last in, first out” policy when it comes to dismissals, which means that young people are systematically disadvantaged in the labour market, leading to much higher unemployment rates. When we talk about the risks of a lost generation who can’t get onto the job ladder, it’s partly because the previous generation kicked the ladder away.

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The main reason behind this is that young and older people display strikingly different patterns of electoral behaviour: old people usually vote, while young people don’t. The graphs above (data from the US census bureau) show reported voting rates for the 2012 US presidential election, as well as the share of different age groups both in the overall population entitled to vote (which excludes non-citizens, who also tend to be younger) and the population that actually votes. First, voting rates markedly increase among older citizens: reporting voting rates are about 40% for the 18-24, where they are at 73.5 for the 65-75, and decline somewhat afterwards. We need to note that the turnout a presidential elections is higher than for other elections, especially at midterms. The lower the turnout, the more it is usually biased in favour of the old. The result of these differences is that older age groups are overrepresented among voters as compared to the overall population entitled to vote, with fairly clear incentives for politicians to be especially attentive to their preferences. Hence, people between 45 and 74 represented 46% of the overall population entitled to vote in 2012, but 52% of the population who actually voted. Since life expectancy is around 78 years, it is theoretically possible to win a majority exclusively with votes from people in the second part of their lives, who are already well inserted in the labour market, have completed their education, and who don’t need childcare or maternity leave anymore, while it is not possible to win a majority only with younger people in the first half, who may need these things. The median voter, the one that politicians need to convince to win – majoritarian – elections, has become increasingly older, and she is likely to become ever older in the future.

As a consequence, politicians on the right and left engage in a rat race to court the grey vote and please the elderly: defending pensions is much more likely to win votes than childcare or education because those who benefit from the latter are much more likely to cast a ballot than those who benefit from the former. For instance, the British government has been able to implement a cap on benefits affecting mostly young people (jobseekers allowance, child benefits) almost at leisure, while it has ring-fenced pension benefits in spite of the fact that cuts in pensions would allow much more substantial savings in government budgets. In contrast, spending for child care has stayed in a stalemate. With ever lower levels of turnout among the young – partly underpinned by worse economic conditions than their parents – and an aging population, this skew is likely to become bigger and bigger. Ultimately, we may come to a society where the large majority of voters are old and don’t work, while those work and fund public spending don’t vote. The drive towards tighter immigration controls in many countries is also partly underpinned by the preferences of the elderly, for whom immigration is much more of a concern than for young people who have grown up in more multicultural settings. Incidentally, UKIP voters are also strongly overrepresented among older generations. What older UKIP voters are saying concretely is that we should fund their pensions but limit immigration levels which could fund ours.

A democracy that is biased towards people in the late stages of their lives is problematic because it is more backward-looking than forward-looking, that is, more interested in defending its acquired rights than anticipating a future that they will not live. Why should a 70-year-old care about the depletion of energy resources in 50 years time? Of course this is a somewhat caricatural way of presenting things, and each generation does not always vote with selfish motives. People may care about their children or grandchildren or simply young generations in general. But then, why do we observe the biases in spending outlined above? In Switzerland, only men were entitled to vote until 1971, and a statutory paid maternity leave was only put in place in 2005. Why did Swiss men not advocate the interests of their wives, daughters or sisters before? Because when choices have to be made with scarce resources, selfish motives tend to prevail. This also does not mean that older people are selfish, but politicians tend to project certain preferences on them in order to win votes. Hence, we need to reconfigure the incentives for politicians.

Weighting votes by expected life expectancy

There are different ways to solve the political bias towards the elderly. One is to introduce compulsory voting to compensate for the turnout deficit of the young, or to lower the voting age to tip the balance a little bakwards. Some people also advocate demeny voting, whereby parents can cast votes on behalf of their children. However, with population ageing and declining fertility rates, this is unlikely to solve the problem as the number of elderly voters will expand at a much higher rate than the number of children and young voters. Another proposed solution is the introduction of a maximum voting age, but depriving people of votes altogether is questionable. What we need is a substantial top-up in the weight of young citizens in the political process.

There is a case for tipping the balance towards the young on a permanent basis not only for pragmatic but also for normative reasons: young and old face different incentives regarding the interests of the other group even if both are selfish. Young people need to consider the interests and policies for the old because they will be old one day. In contrast, the old will unfortunately never be young again, and therefore only need to care about themselves. For instance, members of the current British government who have introduced 9k university fees and hardened access to benefits for young people have studied themselves for free, and possibly entered the labour market at a time when unpaid internships weren’t the necessary step towards a real job.

One radical way to rebalance the political power of generations would be to weight the number of votes according to the average number of years a citizen will have to live with a particular political choice. For instance, a citizen who votes at an election when he is 18 will have to deal with the consequences for 62 years, if one considers that life expectancy is about 80. By contrast somebody who is 70 will on average only deal with the consequences for 10 years. We could for instance weight the number of votes according to this criteria. In order to avoid some citizens having 60 times more political power than others, we could take the rounded square root of their expected life expectancy to reduce this imbalance to a factor of 1 to 8. People between 18 and 23 would have 8 votes, people between 24 and 37 would have 7 votes, and so on (see graph below). People reaching the average life expectancy and beyond will keep one vote. The number of votes could be adapted at each election with the increase in life expectancy.

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This system would be a departure from the 1 person, 1 vote rule, but many systems actually depart from this rule already. For instance, Wyoming has 0.18% of the US population, while California has 11.91%, yet both have the same number of senators in the US Senate. This means that citizens of Wyoming have 65.7 times more influence than Californians in this house. The system I outline here is actually less unfair, because everybody goes through the whole cycle, and nobody is systematically disadvantaged. People who die young will actually have a higher average influence on average throughout their life than people dying very old: on average, somebody born in an impoverished area of Glasgow, where life expectancy is shorter, will have had more average influence on political decisions than somebody born in Kensington. Such a reform of the electoral system could also have interesting redistributive properties. Empowering young people is also empowering people who are on average less well-off.

Of course, the establishment of such a system would require substantial constitutional amendments decided within the current system biased towards the old, and are therefore politically suicidal. In order to restore the power of of the young, what we need are political kamikazes.

A modest proposal to improve the efficiency of assessment in universities

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Essay writing and assessment is a drag. For academics, it eats out an awful lot of time which could be devoted to research or other productive activities counting for tenure. For students, writing essays requires a great deal of investment and time which could be more productively spent on facebook or other things that the youth of today does. Moreover, the extent to which it really is able to assess learning – rather than abilities acquired or inherited completely outside university – is questionable.

Luckily, the student side of it is being rationalised along market principles. A couple of weeks ago, at a time where most students are precisely writing essays for May deadlines, I was handed out the card above right in front of the entrance of my university. The man who was distributing cards for this “essay and dissertation help” company was surely unaware that I am actually supposed to mark essays rather than write them. Arrived in my office, I checked the website (deleted here not to provide any “advertisement help”) and the “help” provided is fairly straight forward: they write essays for you. You give the subject, word length, the deadline, and the website provides an “instant quote” with a list of prices which depend on the grade you want. This is what I got for a 3500 word essay in politics with a deadline in two weeks:

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Now, this system has a number of deficiencies. First, how can you be sure that you will get the grade that you paid for? I wonder how the writers who work for this essay mill – surely drawn from the army of underpaid PhD students roaming around in need of income to survive – manage to lower their level to a 2.2 standard, for instance. Second, given the somehow shady nature of the activity, how can students who paid for a First and got a 2.2 obtain compensation? They surely won’t seek redress from justice by exposing their own practices. Third, this does nothing for the time wasted by academics to mark these essays, so that the system remains broadly inefficient. There is no reason why students should be the only ones benefiting from the wonders of outsourcing.

A simple solution to this problem would be to diversify the activities of these essay mills to cater for the needs of academics as well. Teachers would outsource the marking of the said essays to the same companies that write them for students. Shady “essay mills” would become very respectable “assessment contractors”. This would increase the efficiency of assessment for both students and academic staff. The first advantage of this would naturally be to relieve academics from the burden of reading and marking essays. The second would be to reduce the uncertainty for students: if the same company writes and assesses the essays, it can make sure that they get the grade that they paid for. The natural evolution of this would of course be to suppress the essays altogether, and students would pay the assessment contractors directly for their mark. The payroll costs of the assessment contractors would go down because no actual writing would take place, and profitability for shareholders would increase. As I argued in another modest proposal, there is no reason that the practice of marketisation that has been so successful elsewhere shouldn’t be extended to assessment, for the benefit of teachers and learners.

 

A Modest Proposal to Improve Value for Money for Customers of Universities

Students increasingly want “value for money” from their university education. On a number of occasions, I have heard or read students concerned about what they get for the money they pay, especially with respect to the different individual components of their education. I have received emails calculating the price of individual modules saying that for that money, they’d expect a speedy return of marked essays, or heard students voicing concerns about how much they were paying for each hour of lecture or seminar that they attended. A friend of mine at another university told me that one of their students had asked for money back after one seminar session was cancelled. If you think about it, it is fairly normal that the introduction of fees has led students to put a price on each individual component of their education, and assess more closely the value that they get for their money. Arguably, the value of fees has tripled since they were introduced, but it is difficult to argue that the quality of teaching can triple as well.

This movement of pricing is what many people call the “marketisation” of universities, often with a tone of disgust. I do not think that this marketisation has gone far enough. Students pay very high fees to get an education, but they get little choice about the product that they get. If you compare universities to true commercial enterprises, you’ll understand that they actually sell a very small number of products, and choice, which is primarily what a market system should deliver, is actually very limited. Choosing a degree works as if you could choose between different airlines to get from point A to point B, but each airline would only have one class, you wouldn’t be able to choose your seat, there would be no speedy boarding and the price would be the same if you booked 3 months or 1 day in advance. Precisely, airlines could be a good model for universities to pursue their movement of marketisation, with a much greater deal of choice in price and quality of products for their customers. A simple way would be to introduce a clear and transparent price list for all the different services that we provide, allowing students to choose different speeds and quality of service. This could look like this:

Price of seats in lecture halls: 3 pounds standard, 5 pounds to sit in the front, luxury seats with reclinable back and built-in head massage to stimulate thinking: 10 pounds per lecture. Note-taking service by experienced unemployed PhDs available.

Replying to students’ emails: 2 pounds within a week, 5 pounds within 2 days, 10 pounds for a 1-day service. For an additional 3 pounds, correction of eventual spelling mistakes or typos.

Student meetings to discuss dissertations: 20 pounds an hour; 30 for a service with notes taken. Business premier service with gourmet coffee, cookies and shoe-polishing on demand (booking in advance recommended).

Recommendation letters: pricing per length and degree of positiveness of the letter. Extra pricing for the placement of specific words: “outstanding”, “amazing” and “mindblowing”: 30 pounds. Budget option available for 10 pounds, includes “alright” and “not too bad”.

Marking and feedback on essays. Budget service with no feedback and date of return undetermined: 10 pounds. Business premier service for 50 pounds: 5 pages of feedback, 10% top-up on the the grade, returned within 3 days on your doorstep by a drone, with a bottle of champagne. Personalized help in writing essays available on demand.

Credit cards and paypal accepted.

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A Modest Proposal to Improve Cycle Safety in London

Cycle safety in London has become an issue of growing concern. After five cyclists died on the road in only nine days, the Mayor Boris Johnson has had to appear a number of times on telly to justify his cycle policy. The top cornflake’s superhighways have notably been criticised for leading cyclist into dangerous roundabouts. Barclays has recently pulled out of the Boris bikes scheme, officially for unrelated reasons.

Boris has argued that these deaths were essentially due to the erratic behaviour of some cyclists, notably at red lights. This is a strange thing to say for somebody who is a cyclist himself. I do often cycle to work and I do not think that the behaviour of cyclists is the main problem. I have regularly cycled to work in  Switzerland, the Netherlands, Italy and Germany, and I am actually surprised by the high proportion of cyclist over here who do respect red lights and signalisation. People even stop at pedestrian crossings with no pedestrians around. Official figures tend to confirm this: “in accidents were a cyclist was killed or badly hurt, the cyclist was presumed to have committed an offence in just 6% of cases. The vehicle driver was assumed to have done so 56% of the time while 39% of the time it wasn’t clear” (quoted from here). Cycling in London is great, but it is indeed more dangerous than in other places where I’ve lived; Amsterdam and Cologne are really different cases as there are separate cycle lanes pretty much everywhere. The problem, then, is drivers, not cyclists.

The problem in London is that bikes compete for the road with a restricted subset of drivers: professional drivers. Because of the congestion charge, it is completely unaffordable to drive to work with your private car unless you are an oligarch, and the only vehicles to be seen in central London are driven by people who make a living out of it: cabs, lorries, trucks, buses and minicabs. This can have two potential effects on cycle safety. First, since there are fewer private cars, the remaining vehicles can drive faster and more erratically. The total number of vehicles has decreased after the introduction of the charge, the number of cabs has increased, and average driving speeds have tended to increase, even if they have declined later on. This argument doesn’t hold all the time, however, as traffic jams are fairly common. Second, and more importantly, professional drivers tend to be overconfident. Cabs systematically stop on the space reserved for bikes at red lights, and  honk their horn right at you if you take a second too long to move off. If you make a living out of driving, time is money, which leads to more erratic driving. They would perhaps be more modest and less arrogant if they were swamped in a flow of private cars like in Madrid, Paris or Rome. In London, the congestion charge has given them too much power: they basically own the road, and behave accordingly.

At a more practical level, a major source of risk is simply trucks and lorries turning left (Figure 1). This is a especially problematic issue for me as a Continental European because, seen from the back, I still expect drivers to sit on the left of their car and see me if I’m on the left of the road. However, they don’t because they sit on the right and I may be in the dead angle. If they turn left, I can be quickly in trouble. There is a fairly simple solution to this, however: forbidding trucks to turn left (Figure 2). This would involve a few more manoeuvres on their part, but they would be able to see cyclists at all stages. This could be implemented through appropriate signalisation, or more realistically, by some simple but compulsory technical modifications to lorries, cabs and trucks so that they can only turn right. Since the omnipotence of professional drivers is surely a major cause of cycle casualties, such small restrictions on their freedom couldn’t possibly hurt.

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Figure 1: Dangerous left turn

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Figure 2: Series of safe right-turns

 

A Modest Proposal for More Efficient Networking at Conferences

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It’s that time of year again: conference season. Great opportunities for academic exchange in different guises: presenting your work and hearing about the work of others, but also multiple venues for socialising, schmoozing and networking. Making the right connections may help you get that publication out, obtain that next job, and open the doors of success, glory and wealth.

For young and ambitious academics eager to distribute their stack of business cards, however, networking is not such a straightforward task: identifying targets for socialising can be tricky. Time is limited, and the aspect of people cannot be taken as a proxy for their value and usefulness, so it is difficult to make rational decisions. You may spend too much time talking to people working at no-name universities or even worse, PhD students, while missing out on the editor of some prominent journal specialising in non-parametric methods. It is easy to identify unsuccessful social interactions ex post when people regularly browse their surroundings while talking to a particular person, looking for an opportunity to escape. The main problem is that interacting with actual human beings is a much more messy business than the safe, precise, clean and predicable environment of statistical analysis. In the comfortable zone surrounding your computer, everything can be measured, quantified and ordered in a limited number of variables.

Now there is no reason why the safety in numbers that many political scientists find in front of their computers could not be extended to social interactions at conferences. A fairly straightforward way to reduce this uncertainty would be to attribute a score – corresponding for instance to people’s H-index – that conference participants would display on a giant shield. This would signal whether it is worth socialising with them or not. For a more technological solution, participants could also display a barcode on their foreheads that special readers could link to their Google scholar profile; one could also imagine a detector that would beep at closer intervals upon approaching a prominent political scientists, like a Geiger counter. Technology opens endless possibilities.

My favourite low-tech solution would be to physically signal the status of participants by specific pieces of clothing such as hats. Academics with lots of publications would wear giants hats. Their size would be proportional to their status. Different disciplines could also be signalled by different colour codes: green for international relations, red for comparative politics, and so on. The problem with this system is that prominent but very short academics would probably be laughed at, and therefore fail to receive the respect that their status deserves. In order to solve this problem, we could also use stilts instead of hats, so that really big shots would gravitate high above everybody else, closer to the stars.