Showing posts with label gift. Show all posts
Showing posts with label gift. Show all posts
Saturday, 29 January 2022
Sunday, 18 February 2018
Ramanujan and Salam — what inspired them?
Pervez Hoodbhoy in The Dawn
SRINIVISAN Ramanujan (1887-1920) and Muhammad Abdus Salam (1926-1996), two intellectual giants of the 20th century, were born in the same corner of the world. Of humble origin and educated in local schools, they nevertheless rose to dizzying heights in the arcane world of theoretical science. Few others on the subcontinent enjoy their iconic status.
What I shall address below is that both attributed their works to some divine agency. Some of their devotees see this in validating their own respective belief system. With the rise of Hindutva in India, and the violent persecution of Ahmadis in Pakistan, these claims assume considerable importance. Hence a careful, impartial examination is called for.
No mathematician has a story more romantic than Ramanujan’s. Many books, plays, and movies — such as The Man Who Knew Infinity (2015) — dwell upon this enigmatic figure. Drawing upon deep intuition, Ramanujan created new concepts in the theory of numbers, elliptic functions and infinite series. Even full-blown mathematicians take years to grasp his complex ideas.
Exceptional genes plus fortunate circumstances is why some become maths-science superstars.
Born in Madras to a low-level clerk, this young Brahmin boy was steeped in tradition, sang religious songs, attended temple pujas, and was a strict vegetarian. But by age 12, he was inventing sophisticated theorems and unwittingly duplicating some results of European mathematicians of the previous century. He flunked college twice for lack of interest in anything but mathematics — in which he excelled. His awestruck teachers could not decide whether he was a genius or fraud.
At 16, encouraged by one of his teachers, Ramanujan sent off a letter to the renowned pure mathematician G.W. Hardy at Cambridge University. It was accompanied by theorems densely packed into nine pages. Hardy was stunned and arranged for him to travel to England. Ramanujan duly obtained permission from the family goddess Namagiri, consulting appropriate astrological data before his voyage overseas.
At age 32, Ramanujan was dead. He had returned to Madras exhausted, half-famished and fed up with English winters. But even on his deathbed, his pen scrawled out profound results. A century later these still intrigue the brainiest of mathematicians and string theorists. He attributed his exceptional qualities to the psychic visitations of Namagiri who would whisper equations to him. Sometimes, he said, “she wrote on my tongue”. He told colleagues, “An equation for me has no meaning unless it represents a thought of God.”
This was how Ramanujan saw it. But how does one explain that Euler, Bernoulli, Gauss, Cantor, Hilbert and Gödel were non-Brahmin mathematicians who stood still taller? The edifice of modern mathematics owes largely to them, not to Ramanujan. Some were ardent Christians, others agnostic or atheistic. Nobody knows how to explain their feats.
Curiously, Abdus Salam, then a 19-year-old student at Government College Lahore, wrote his very first paper proposing a simpler solution to an intriguing mathematical problem posed about 20 years earlier by Ramanujan. He ended his paper by triumphantly declaring: “His [Ramanujan’s] solution is much more laborious”.
This was Salam’s debut into the world of high mathematics. Born into a conservative religious environment in Jhang — then a village-town — this child prodigy rapidly outpaced his teachers. Fortunately they bore him no grudge and helped him move on to Lahore. The next stop was Cambridge, where he excelled. By the early 1960s, he was one of the world’s top particle physicists, ultimately winning 20 international prizes and honours including the Nobel Prize in 1979.
In his later years, Salam gave numerous public lectures and interviews, recorded on camera and in print, locating his source of inspiration in his religious belief. In particular he said the concept of unity of God powered his quest for the unification of nature’s fundamental forces as well as his search for ever fewer numbers of elementary particles.
For me, to engage on a sensitive matter with one so senior and superior was not easy. But sometime in 1986 I picked up the courage to ask Salam the obvious question: both he, who thought himself a believer, and Steven Weinberg, an avowed atheist, had worked independently on unifying two of nature’s four fundamental forces and yet had arrived at precisely the same conclusions. How?
Salam gave his answer in the preface he wrote for my book on Islam and science (1990), where he stated: “I can confirm that he [Hoodbhoy] is right…”, and then went on to explicitly clarify that any bias towards the unification paradigm in his thinking was only unconsciously motivated by his religious background.
There is not the slightest doubt that Salam used exactly the same tools as Weinberg did — principally quantum mechanics and relativity theory — and did physics exactly as other physicists do (but better than most). His political and religious views were irrelevant to his work. Let’s note that although they are giants of physics, Salam and Weinberg stood on the shoulders of still greater giants — Einstein, Pauli, Dirac, Wheeler, and Feynman — whose personal philosophies of life vastly differed from each other.
Salam sourced his inspiration to his religious beliefs, while Ramanujan claimed direct transmission from his gods. These claims cannot ever be proved or disproved. It is also irrelevant here that Salam thought of himself as a Muslim whereas, by Pakistani law, he is not.
How can prodigious talent blossom in the absence of rigorous scientific training? Two factors explain Ramanujan’s and Salam’s successes. First, nature sometimes gifts an individual with exceptional innate mathematical ability. This is associated with brain circuits in the parietal lobe and acquired through genetic transmission. Second, by good fortune, Ramanujan and Salam managed to escape into a scholarly environment — Cambridge University — where their genius could flower. Had either stayed back home he would be unheard of today.
It is usual to take pride in the geniuses belonging to one’s own tribe. The ancient civilisations of China, India, Greece, Arabia, and modern European civilisation all claim superiority over others because of the creations of their most brilliant minds. But in fact an individual’s exceptional genes and fortunate circumstances — not some supreme transcendence — are the real reasons. While sources of inspiration do differ, empirically and logically deduced results don’t. Science and its heroes belong to all humankind, not to any one tribe.
SRINIVISAN Ramanujan (1887-1920) and Muhammad Abdus Salam (1926-1996), two intellectual giants of the 20th century, were born in the same corner of the world. Of humble origin and educated in local schools, they nevertheless rose to dizzying heights in the arcane world of theoretical science. Few others on the subcontinent enjoy their iconic status.
What I shall address below is that both attributed their works to some divine agency. Some of their devotees see this in validating their own respective belief system. With the rise of Hindutva in India, and the violent persecution of Ahmadis in Pakistan, these claims assume considerable importance. Hence a careful, impartial examination is called for.
No mathematician has a story more romantic than Ramanujan’s. Many books, plays, and movies — such as The Man Who Knew Infinity (2015) — dwell upon this enigmatic figure. Drawing upon deep intuition, Ramanujan created new concepts in the theory of numbers, elliptic functions and infinite series. Even full-blown mathematicians take years to grasp his complex ideas.
Exceptional genes plus fortunate circumstances is why some become maths-science superstars.
Born in Madras to a low-level clerk, this young Brahmin boy was steeped in tradition, sang religious songs, attended temple pujas, and was a strict vegetarian. But by age 12, he was inventing sophisticated theorems and unwittingly duplicating some results of European mathematicians of the previous century. He flunked college twice for lack of interest in anything but mathematics — in which he excelled. His awestruck teachers could not decide whether he was a genius or fraud.
At 16, encouraged by one of his teachers, Ramanujan sent off a letter to the renowned pure mathematician G.W. Hardy at Cambridge University. It was accompanied by theorems densely packed into nine pages. Hardy was stunned and arranged for him to travel to England. Ramanujan duly obtained permission from the family goddess Namagiri, consulting appropriate astrological data before his voyage overseas.
At age 32, Ramanujan was dead. He had returned to Madras exhausted, half-famished and fed up with English winters. But even on his deathbed, his pen scrawled out profound results. A century later these still intrigue the brainiest of mathematicians and string theorists. He attributed his exceptional qualities to the psychic visitations of Namagiri who would whisper equations to him. Sometimes, he said, “she wrote on my tongue”. He told colleagues, “An equation for me has no meaning unless it represents a thought of God.”
This was how Ramanujan saw it. But how does one explain that Euler, Bernoulli, Gauss, Cantor, Hilbert and Gödel were non-Brahmin mathematicians who stood still taller? The edifice of modern mathematics owes largely to them, not to Ramanujan. Some were ardent Christians, others agnostic or atheistic. Nobody knows how to explain their feats.
Curiously, Abdus Salam, then a 19-year-old student at Government College Lahore, wrote his very first paper proposing a simpler solution to an intriguing mathematical problem posed about 20 years earlier by Ramanujan. He ended his paper by triumphantly declaring: “His [Ramanujan’s] solution is much more laborious”.
This was Salam’s debut into the world of high mathematics. Born into a conservative religious environment in Jhang — then a village-town — this child prodigy rapidly outpaced his teachers. Fortunately they bore him no grudge and helped him move on to Lahore. The next stop was Cambridge, where he excelled. By the early 1960s, he was one of the world’s top particle physicists, ultimately winning 20 international prizes and honours including the Nobel Prize in 1979.
In his later years, Salam gave numerous public lectures and interviews, recorded on camera and in print, locating his source of inspiration in his religious belief. In particular he said the concept of unity of God powered his quest for the unification of nature’s fundamental forces as well as his search for ever fewer numbers of elementary particles.
For me, to engage on a sensitive matter with one so senior and superior was not easy. But sometime in 1986 I picked up the courage to ask Salam the obvious question: both he, who thought himself a believer, and Steven Weinberg, an avowed atheist, had worked independently on unifying two of nature’s four fundamental forces and yet had arrived at precisely the same conclusions. How?
Salam gave his answer in the preface he wrote for my book on Islam and science (1990), where he stated: “I can confirm that he [Hoodbhoy] is right…”, and then went on to explicitly clarify that any bias towards the unification paradigm in his thinking was only unconsciously motivated by his religious background.
There is not the slightest doubt that Salam used exactly the same tools as Weinberg did — principally quantum mechanics and relativity theory — and did physics exactly as other physicists do (but better than most). His political and religious views were irrelevant to his work. Let’s note that although they are giants of physics, Salam and Weinberg stood on the shoulders of still greater giants — Einstein, Pauli, Dirac, Wheeler, and Feynman — whose personal philosophies of life vastly differed from each other.
Salam sourced his inspiration to his religious beliefs, while Ramanujan claimed direct transmission from his gods. These claims cannot ever be proved or disproved. It is also irrelevant here that Salam thought of himself as a Muslim whereas, by Pakistani law, he is not.
How can prodigious talent blossom in the absence of rigorous scientific training? Two factors explain Ramanujan’s and Salam’s successes. First, nature sometimes gifts an individual with exceptional innate mathematical ability. This is associated with brain circuits in the parietal lobe and acquired through genetic transmission. Second, by good fortune, Ramanujan and Salam managed to escape into a scholarly environment — Cambridge University — where their genius could flower. Had either stayed back home he would be unheard of today.
It is usual to take pride in the geniuses belonging to one’s own tribe. The ancient civilisations of China, India, Greece, Arabia, and modern European civilisation all claim superiority over others because of the creations of their most brilliant minds. But in fact an individual’s exceptional genes and fortunate circumstances — not some supreme transcendence — are the real reasons. While sources of inspiration do differ, empirically and logically deduced results don’t. Science and its heroes belong to all humankind, not to any one tribe.
Friday, 10 March 2017
Lessons from Amma
Shubhankar Dam in The Friday Times
From 1991 to 1996, four residents of 36 Poes Garden, Chennai—J Jayalalithaa, the chief minister of Tamil Nadu and her foster family—amassed a 3,200% increase in wealth. This staggering surge, a rate of superhuman returns, beggars belief. What begot this? Prodigious business acumen? Or a colossal abuse of public office?
In June 1996, one Subramanian Swamy filed a complaint against Jayalalithaa alleging assets in titanic disproportion to her accredited sources of income. Investigations laid bare an incestuous web of businesses and vicariously held properties. The three other residents of Poes Garden, VK Sasikala, J Elavarasi, and VN Sudhakaran, appeared deep in cahoots with the matriarch. In Jan. 1997, they, too, were arraigned alongside the alleged mastermind.
The matter gingerly inched through India’s legal complex, wobbling from one court to another. Calendars turned, as parties wrangled over legal process. Two decades went by.
On February 14, 2017, at last, the final word. The Indian Supreme Court delivered a decisive verdict. What it enounced should put public officials, politicians and corporates, too, on alert.
Presented with fawning tributes on birthdays or other times, politicians holding public offices must turn them down: that is the only legal option now. No longer can they summon the alibi of customary practice-insistent adulation of their devotees-to fatten their bank balances
The conspiracy, the crime, the charge
Jayalalithaa was charged with criminal misconduct under the Prevention of Corruption Act, 1988: possessing, directly or through a person, while in public office, resources or property disproportionate to one’s known sources of income—something the public servant cannot satisfactorily account for. Her familial acolytes were indicted for criminal conspiracy and abetment.
Persons conspire, the Indian Penal Code, 1860, says, if two or more agree to do an unlawful act or a lawful act by unlawful means. Persons abet an offence, the code adds, if they intentionally aid others in an unlawful act.
The trial court, and later, the high court, distilled the facts, weighed the evidence, and applied the law. The first court convicted; the latter acquitted. Why? They disagreed on all counts: facts, evidence and the law. The Supreme Court stepped in, and broke new ground. Measuring disproportionate assets will never be the same again.
Tamil Nadu CM Jayalalithaa was charged with criminal misconduct under the Prevention of Corruption Act, 1988: possessing, directly or through a person, while in public office, resources or property disproportionate to one’s known sources of income-something the public servant cannot satisfactorily account for
Accounting for criminal income
Jayalalithaa and her aides asserted large incomes from assorted sources: business, agriculture, loans, interests, gifts, rentals, and sale of party literature. They produced income tax returns as proof. Income tax officials had accepted these documents. So, they sufficed as proof, all four optimistically pleaded. The Supreme Court rubbished this approach. Tax laws are distinct from anti-corruption rules. Income tax officers only assess incomes; they don’t bother with sources, the court insisted.
In Sept 1958, Indian police detained one Piara Singh as he ventured to cross into Pakistan. Searches revealed a sum of Rs65,500 on his person; interrogations revealed a gold-smuggling racket. Officials quickly seized his cash. Of the impounded sum, Rs60,500 was Singh’s income from undisclosed sources, income tax officers assessed. It was liable to tax.
Singh protested. Smuggling was his “business,” he told the Supreme Court. The impounded cash amounted to a “business loss”. It should be tax-exempt. The court agreed. Tax laws are catholic—they apply to all profits and losses, licit and illicit. The sources don’t matter. So, Singh’s business loss was indeed tax-exempt.
Anti-corruption law is different: It obsesses over sources. The 1988 Act says: If charged, a public servant must satisfactorily explain the disproportionate assets through his or her known sources of income, that is, “income received from any lawful source”.
Jayalalithaa had massive incomes but no evidence of their legality—no credible records, witnesses, explanations or inferences. The court affirmed the charge against her. A clean bill of financial health from the tax department, in other words, won’t ease matters in an anti-corruption court. Independent verification is the key.
But that’s not all. The court went further—much further. It proscribed a commonly asserted source of income, and that should alarm politicians in India even more.
Tax laws are catholic-they apply to all profits and losses, licit and illicit. The sources don’t matter. Anti-corruption law is different: It obsesses over sources
New law of public affection
Jayalalithaa’s birthdays were an annual orgy of love and presents. Cash, foreign remittances, jewelry, sarees, and silver items—her democratic devotees inundated her with them, she claimed.
Are such gifts lawful sources of income in an anti-corruption context? No, the court emphatically said. They are “visibly illegal and forbidden by law”. Gifts are bribes by another name. Legalising them would erase the bar on bribes, it reasoned.
Presents to public servants come in many forms. Some are designed to induce or reward abuse of office. Others come with no manifest motive. They are “simply” gifts. But these, too, are unlawful, the court pronounced. Why?
Gifts are “likely to influence [a] public servant to show official favour to [the] person” offering them, if opportunities arise. Opportunities, though, may arise in umpteen, unpredictable ways. Many citizens are likely to have business to transact with, say, a minister (get a policy altered), bureaucrat (get a permit issued) or police officer (get a matter investigated).
Are gifts from all citizens unlawful? Relatives, friends, acquaintances, too? The court didn’t say. But if so, a generous embargo on presents is a revolutionary piece of reasoning.
Presented with fawning tributes on birthdays or other times, politicians holding public offices must turn them down: that is the only legal option now. No longer can they summon the alibi of customary practice—insistent adulation of their devotees—to fatten their bank balances.
The bar applies to all public servants and corporates, not just politicians. Under scrutiny for purportedly spinning a web around public officials to promote business interests, the Essar Group defended its practices in an affidavit to the Supreme Court in Nov. 2015. Small gifts and favors to government servants are “common courtesies”, it claimed. They aren’t improper, much less illegal. They are illegal: The verdict makes it emphatically clear.
Declaring illegality is the easy part; proving criminal collusion is much harder. But corrupt politicians, corporates and their handlers, be warned. A new judicial zeal is doing the rounds.
Poes Garden: house of crimes
Jayalalithaa invited her friend Sasikala to the residency at Poes Garden in 1987. Together, they ran two business partnerships. Later, Elavarasi and Sudhakaran, Sasikala’s relatives, were inducted into the home in 1991 and 1992, respectively.
The new residents had no business experience or sources of income. Yet, they acquired six companies, and held directorships. (More firms were incorporated later.) Accounts linked to Jayalalithaa and Sasikala funded the acquisitions.
The companies, originally, had nothing of worth: funds, assets, loans or anything else. Not even bank accounts in some cases. But, suddenly, they stirred into brisk action. They surveyed and negotiated deals, bought land, and executed sale deeds. They also operated some 50 bank accounts. Cash promiscuously flowed in and out. No walls separated them. Intriguingly, that is all the companies did: hoard properties and move cash around.
These were shells, not companies. It strained credulity to believe that they transacted ordinary business. The Supreme Court did not believe, either. Business registrations, deals, transfers, appointments, resignations had remarkable synchronies. These weren’t coincidences, the court inferred. The collaborators were part of an elaborate commercial incest. The firms, their holdings, and deals were shams, contrived to lend an ounce of entrepreneurial legitimacy.
Poes Garden was a conspiratorial den, and Jayalalithaa masterminded it, the court found. She funded the partnerships. These, in turn, funded the companies. Those, then, bought properties. The 50 bank accounts were effectively one: Jayalalithaa’s. Guilty, all of them, the court decided.
The verdict will resonate far beyond the immediate facts. It has an air of urgency. There’s a readiness to peel away legal facades, probe nooks and crannies, unite the dots and draw aggressive inferences. Gone are the days when judges willingly suspended disbelief, demanded impossible standards from prosecutors, and granted careless benefit of doubt to the accused.
It augurs well for corruption trials now underway. The decision puts undertrials on notice, and those plotting their next rendezvous with public corruption, too.
Altogether, it feels rosy it shouldn’t. Ominous clouds still lurk on the legal horizon.
This ain’t a happy ending
The verdict, again, betrays the rot at the heart of India’s criminal justice complex. For one, it ground ahead slowly, far too slowly. Two decades to litigate a criminal charge is inordinately long. This point isn’t worth belabouring—it is well known.
But another point is the systemic lack of investigative and prosecutorial independence, and the inability to hold serving public officials, particularly, political offices, to account. Lest we forget, anti-corruption sleuths didn’t pursue Jayalalithaa. A private complainant did: Subramanian Swamy. The director of Vigilance and Anti-Corruption, Chennai, joined in after a court directive. That Jayalalithaa’s political rival in Tamil Nadu, the Dravida Munnetra Kazhagam (DMK), held power in the state during the investigations only helped matters along.
A credible investigation against a sitting chief minister in India, even now, is an absurd idea. Investigations are only the beginning. Prosecutions must follow in deserving cases. It followed in this case, and quite well. But only till the DMK was in power. By August 2000, nearly 250 witnesses had been examined; just over 10 remained. The marathon trial was in its last mile.
Suddenly, it fumbled
In May 2001, Jayalalithaa and her party returned to power. Witnesses turned hostile. Prosecutors lost their zeal. The trial went awry. In Nov. 2003, the Supreme Court, in response to a petition by a DMK leader, K. Anbazhagan, transferred the trial to Bangalore. A fair trial against a sitting chief minister was impossible within the state, the court implied. Such is the rancid reality of prosecutorial affairs in India.
The trail began anew. Even there in Bangalore, prosecutors struggled. Interference lurked at every turn. The Supreme Court routinely intervened to keep matters on track—often at the dogged insistence of Swamy and Anbazhagan. Only they seemed keen to try Jayalalithaa, not the state.
Successful anti-corruption drives marry tough rules, investigative and prosecutorial independence with judicial reasonableness. India has two of these—or at least a semblance of them. The middle one is missing; it has always been so.
Without it, the Jayalalithaa-Sasikala matter will remain a celebrated exception. Without it, prosecuting high corruption in India will remain a private pastime, always directed at opposition politicians against an obstinate state apparatus, and overly reliant on courts. Without it, only lesser mortals will endure the fury of anti-corruption rules: Those more equal than others will forever remain immune.
Saturday, 14 February 2015
How economists view love, marriage, and Valentine’s Day
Pramit Bhattacharya in Live Mint
Can the dismal science of economics throw light on the seemingly irrational phenomenon of love? For a long time, economists did not consider love to be within the ambit of their study, and ignored it altogether even as they used the economic lens to study other esoteric subjects such as crime and fertility. The neglect of love ended in the 1970s, when the Nobel winning economist Gary Becker for the first time laid out a framework to analyse love and marriage in a series of research papers.
Using simple economic tools and high school algebra, Becker showed how seemingly irrational life choices and decisions could in fact be explained by rational choice theory. Becker’s analysis was based on two simple principles. First, given that marriage is almost always voluntary, either by the couples or their parents, the theory of preferences can explain marriage and couples (or their parents) can be expected to derive more satisfaction (or higher utility) from being married than from remaining single. Second, Becker held that a market in marriages can be presumed to exist since many men and women compete as they seek mates. Each person tries to find the best mate subject to market conditions.
Based on these two principles, Becker draws out a theory of marriage that says that each person will tend to pair with someone with whom the chances of maximizing their household production of goods and services are the highest. The set of household goods and services include tangible goods the market provides as well as non-market goods such as shared pastimes, or the joys of raising children. The couple’s level of satisfaction is determined both by market and non-market earnings. But, given that time and effort spent on raising market earnings can diminish non-market earnings, each couple uses economic principles to allocate the scarce resource of time.
Becker argued that the division of labour within the family is driven by the differences in market earnings, which in turn are determined by the marginal productivity of the two partners. The partner with a higher wage then specializes in the production of market goods and services, while the partner with the lower wage specializes in the production of non-market goods and services. Other things being equal, a high-earning male is more likely to marry a low-earning female and vice-versa. Of course, if women are perceived to have a comparative advantage in the production of non-market goods (such as those involved in raising children), it is likely that the marriage market equilibrium will tend to have many more pairs where men rather than women are the sole wage earners.
While spouses are likely to differ in market earnings, both theory and empirical evidence suggested likes tend to attract more when it comes to other attributes such as education or physical attractiveness, wrote Becker. He argued such attributes as education or beauty are complementary inputs in the production of non-market goods and services whereas wage income could be substituted by one partner for the other. The lack of complementary attributes could well explain a significant chunk of separations among couples, Becker hypothesized.
The gains from marriage are determined by how the division of labour occurs. If a lot of effort is expended on policing whether a partner is performing his or her assigned role, then the net gains to the couple will be relatively less (the gains are essentially reduced because of transaction costs). The gains also depend on whether a sizeable fraction of the output generated after marriage can be jointly shared. Love accentuates the gains from marriage because each partner then cares about the satisfaction (or utility function) of the other. Consequently, with love, transaction costs are lowered and the gains from marriage increase. Love also increases the likelihood of increased production of shared family goods, thereby raising the gains from marriage further.
Becker was among the first economic imperialists who extended the reach of economics to analyse complex social behaviours that were considered the exclusive domain of sociology. Social scientists initially ignored, then mocked, and finally began accepting some of Becker’s key insights into the nature of marriage. Later work by economists and sociologists have refined, extended and, in some cases, revised Becker’s framework.
A 1997 review essay by economist Yoram Weiss of Tel-Aviv University succinctly summarizes some of the key economic insights into marriage. Weiss lists four key economic reasons for marriage. First, division of labour after marriage tend to raise joint gains. Second, with imperfect credit markets, marriage can solve credit intermediation problems, with one partner investing in the other. For instance, if both partners work but one has a greater ability to earn, it may be profitable for the partner with the lower ability to earn to fund his or her partner’s education while he or she takes care of home expenses. Such arrangements are indeed common in the modern world. Thirdly, marriage leads to the production of shared family goods (more technically, public goods, which are non-rivalrous and non-excludable). Finally, marriage leads to risk-pooling when two partners have uncertain but different sources of income.
An influential 1999 study of cohabiting couples by sociologists Julie Brines and Kara Joyner extended Becker’s framework of married couples to analyse the behaviour of people living together. The duo analysed data on both married and cohabiting couples to find that although there was some evidence pointing towards specialization among married couples, the evidence was weak.
There was no evidence to suggest specialization among cohabiting couples. On the contrary, live-in relationships tended to be durable when both partners shared equally in domestic work. Unlike married couples who have a more collectivist approach, cohabiting couples tend to display a more individualist streak. Hence, cohabiting couples tend to balance their individual interests by basing their behaviour on the principle of equality.
More interestingly, the chances of a break-up were far higher among cohabiting couples than among married ones when women earned substantially more than men. In contrast, the chances of a break-up are much smaller when a wife begins to earn more than her husband. While cohabitation seems to be based on the premise of equality and rejects traditional gender roles, it is not immune to them, the study suggests. It is marriage that seems to withstand unorthodox economic power relations better.
“Cohabitation draws part of its appeal from an image that promises greater flexibility and experimentation,” wrote Brines and Joyner. “In short, it bespeaks few ‘rules.’ For a relationship to persist, however, some operating principle must mediate the tension between the interests of the parties involved. For husbands and wives, the marriage contract helps to manage these interests, encourages joint investment, and permits some flexibility around the norm of male providership…. For cohabitors, uncertainty and implied contracts intensify the tension between the interests of the two partners and place greater stress on a bargaining principle that is difficult to adhere to over time. Thus, we find that breaking the rule in an arrangement ‘without rules’ is more disruptive than any comparable violation in marriage.”
As Weiss pointed out in her essay, economics alone is not enough for marital analysis. Very often non-economic considerations do play a dominant role in romantic relationships. Yet, economics can provide valuable insights into the nature of relationships, which together with observations from other disciplines such as sociology can feed into a unified theory of relationships.
The power of economics stems from its ability to explain how rational calculations underlie seemingly irrational behaviour. Even romantic melodrama, such as a lover fasting outside his beloved’s house, can be explained by rational choice theory. Such an act is a powerful way of signalling commitment, according to the Nobel economist Michael Spence.
Do Valentine’s day gifts also satisfy the test of economic rationality? Neil MacArthur and Mariana Adshade use game theory to show why it is best to avoid such gifts, especially if a couple is already committed.
“Valentine’s Day, essentially, is a game in which each person who is in a relationship must choose between two strategies; buy a gift for their significant other or do nothing to celebrate the day,” the duo writes.
Given that there are two players, each with two strategic options, there are three possible outcomes that can happen on the day. The first outcome is that both buy gifts, and are satisfied to learn that their partner is committed to the relationship. But that satisfaction comes at a huge cost as most Valentine day gifts are over-priced. The second outcome is that one partner buys a gift and the other does not. One need not explain the consequence. Suffice to say that break-ups tend to spike up in the second half of February, according to Facebook data. The third outcome is that neither gifts.
“The best strategy would be for couples to ignore the holiday altogether, but they won’t because there is just too much pressure to conform to the holiday traditions from both inside and outside the relationship. From a game strategic perspective, participating in the holiday just leads to sub-optimal outcomes,” the duo argues.
Can the dismal science of economics throw light on the seemingly irrational phenomenon of love? For a long time, economists did not consider love to be within the ambit of their study, and ignored it altogether even as they used the economic lens to study other esoteric subjects such as crime and fertility. The neglect of love ended in the 1970s, when the Nobel winning economist Gary Becker for the first time laid out a framework to analyse love and marriage in a series of research papers.
Using simple economic tools and high school algebra, Becker showed how seemingly irrational life choices and decisions could in fact be explained by rational choice theory. Becker’s analysis was based on two simple principles. First, given that marriage is almost always voluntary, either by the couples or their parents, the theory of preferences can explain marriage and couples (or their parents) can be expected to derive more satisfaction (or higher utility) from being married than from remaining single. Second, Becker held that a market in marriages can be presumed to exist since many men and women compete as they seek mates. Each person tries to find the best mate subject to market conditions.
Based on these two principles, Becker draws out a theory of marriage that says that each person will tend to pair with someone with whom the chances of maximizing their household production of goods and services are the highest. The set of household goods and services include tangible goods the market provides as well as non-market goods such as shared pastimes, or the joys of raising children. The couple’s level of satisfaction is determined both by market and non-market earnings. But, given that time and effort spent on raising market earnings can diminish non-market earnings, each couple uses economic principles to allocate the scarce resource of time.
Becker argued that the division of labour within the family is driven by the differences in market earnings, which in turn are determined by the marginal productivity of the two partners. The partner with a higher wage then specializes in the production of market goods and services, while the partner with the lower wage specializes in the production of non-market goods and services. Other things being equal, a high-earning male is more likely to marry a low-earning female and vice-versa. Of course, if women are perceived to have a comparative advantage in the production of non-market goods (such as those involved in raising children), it is likely that the marriage market equilibrium will tend to have many more pairs where men rather than women are the sole wage earners.
While spouses are likely to differ in market earnings, both theory and empirical evidence suggested likes tend to attract more when it comes to other attributes such as education or physical attractiveness, wrote Becker. He argued such attributes as education or beauty are complementary inputs in the production of non-market goods and services whereas wage income could be substituted by one partner for the other. The lack of complementary attributes could well explain a significant chunk of separations among couples, Becker hypothesized.
The gains from marriage are determined by how the division of labour occurs. If a lot of effort is expended on policing whether a partner is performing his or her assigned role, then the net gains to the couple will be relatively less (the gains are essentially reduced because of transaction costs). The gains also depend on whether a sizeable fraction of the output generated after marriage can be jointly shared. Love accentuates the gains from marriage because each partner then cares about the satisfaction (or utility function) of the other. Consequently, with love, transaction costs are lowered and the gains from marriage increase. Love also increases the likelihood of increased production of shared family goods, thereby raising the gains from marriage further.
Becker was among the first economic imperialists who extended the reach of economics to analyse complex social behaviours that were considered the exclusive domain of sociology. Social scientists initially ignored, then mocked, and finally began accepting some of Becker’s key insights into the nature of marriage. Later work by economists and sociologists have refined, extended and, in some cases, revised Becker’s framework.
A 1997 review essay by economist Yoram Weiss of Tel-Aviv University succinctly summarizes some of the key economic insights into marriage. Weiss lists four key economic reasons for marriage. First, division of labour after marriage tend to raise joint gains. Second, with imperfect credit markets, marriage can solve credit intermediation problems, with one partner investing in the other. For instance, if both partners work but one has a greater ability to earn, it may be profitable for the partner with the lower ability to earn to fund his or her partner’s education while he or she takes care of home expenses. Such arrangements are indeed common in the modern world. Thirdly, marriage leads to the production of shared family goods (more technically, public goods, which are non-rivalrous and non-excludable). Finally, marriage leads to risk-pooling when two partners have uncertain but different sources of income.
An influential 1999 study of cohabiting couples by sociologists Julie Brines and Kara Joyner extended Becker’s framework of married couples to analyse the behaviour of people living together. The duo analysed data on both married and cohabiting couples to find that although there was some evidence pointing towards specialization among married couples, the evidence was weak.
There was no evidence to suggest specialization among cohabiting couples. On the contrary, live-in relationships tended to be durable when both partners shared equally in domestic work. Unlike married couples who have a more collectivist approach, cohabiting couples tend to display a more individualist streak. Hence, cohabiting couples tend to balance their individual interests by basing their behaviour on the principle of equality.
More interestingly, the chances of a break-up were far higher among cohabiting couples than among married ones when women earned substantially more than men. In contrast, the chances of a break-up are much smaller when a wife begins to earn more than her husband. While cohabitation seems to be based on the premise of equality and rejects traditional gender roles, it is not immune to them, the study suggests. It is marriage that seems to withstand unorthodox economic power relations better.
“Cohabitation draws part of its appeal from an image that promises greater flexibility and experimentation,” wrote Brines and Joyner. “In short, it bespeaks few ‘rules.’ For a relationship to persist, however, some operating principle must mediate the tension between the interests of the parties involved. For husbands and wives, the marriage contract helps to manage these interests, encourages joint investment, and permits some flexibility around the norm of male providership…. For cohabitors, uncertainty and implied contracts intensify the tension between the interests of the two partners and place greater stress on a bargaining principle that is difficult to adhere to over time. Thus, we find that breaking the rule in an arrangement ‘without rules’ is more disruptive than any comparable violation in marriage.”
As Weiss pointed out in her essay, economics alone is not enough for marital analysis. Very often non-economic considerations do play a dominant role in romantic relationships. Yet, economics can provide valuable insights into the nature of relationships, which together with observations from other disciplines such as sociology can feed into a unified theory of relationships.
The power of economics stems from its ability to explain how rational calculations underlie seemingly irrational behaviour. Even romantic melodrama, such as a lover fasting outside his beloved’s house, can be explained by rational choice theory. Such an act is a powerful way of signalling commitment, according to the Nobel economist Michael Spence.
Do Valentine’s day gifts also satisfy the test of economic rationality? Neil MacArthur and Mariana Adshade use game theory to show why it is best to avoid such gifts, especially if a couple is already committed.
“Valentine’s Day, essentially, is a game in which each person who is in a relationship must choose between two strategies; buy a gift for their significant other or do nothing to celebrate the day,” the duo writes.
Given that there are two players, each with two strategic options, there are three possible outcomes that can happen on the day. The first outcome is that both buy gifts, and are satisfied to learn that their partner is committed to the relationship. But that satisfaction comes at a huge cost as most Valentine day gifts are over-priced. The second outcome is that one partner buys a gift and the other does not. One need not explain the consequence. Suffice to say that break-ups tend to spike up in the second half of February, according to Facebook data. The third outcome is that neither gifts.
“The best strategy would be for couples to ignore the holiday altogether, but they won’t because there is just too much pressure to conform to the holiday traditions from both inside and outside the relationship. From a game strategic perspective, participating in the holiday just leads to sub-optimal outcomes,” the duo argues.
Wednesday, 12 December 2012
On the 12th day of Christmas ... your gift will just be junk
Every year we splurge on pointless, planet-trashing products, most of which are not wanted. Why not just bake them a cake?
Illustration by Daniel Pudles
They seem amusing on the first day of Christmas, daft on the second, embarrassing on the third. By the twelfth they're in landfill. For 30 seconds of dubious entertainment, or a hedonic stimulus that lasts no longer than a nicotine hit, we commission the use of materials whose impacts will ramify for generations.
Researching her film The Story of Stuff, Annie Leonard discovered that, of the materials flowing through the consumer economy, only 1% remain in use six months after sale. Even the goods we might have expected to hold on to are soon condemned to destruction through either planned obsolescence (wearing out or breaking quickly) or perceived obsolesence (becoming unfashionable).
But many of the products we buy, especially for Christmas, cannot become obsolescent. The term implies a loss of utility, but they had no utility in the first place. An electronic drum-machine T-shirt; a Darth Vader talking piggy bank; an ear-shaped iPhone case; an individual beer can chiller; an electronic wine breather; a sonic screwdriver remote control; bacon toothpaste; a dancing dog. No one is expected to use them, or even look at them, after Christmas day. They are designed to elicit thanks, perhaps a snigger or two, and then be thrown away.
The fatuity of the products is matched by the profundity of the impacts. Rare materials, complex electronics, the energy needed for manufacture and transport are extracted and refined and combined into compounds of utter pointlessness. When you take account of the fossil fuels whose use we commission in other countries, manufacturing and consumption are responsible for more than half of our carbon dioxide production. We are screwing the planet to make solar-powered bath thermometers and desktop crazy golfers.
People in eastern Congo are massacred to facilitate smartphone upgrades of ever diminishing marginal utility. Forests are felled to make "personalised heart-shaped wooden cheese board sets". Rivers are poisoned to manufacture talking fish. This is pathological consumption: a world-consuming epidemic of collective madness, rendered so normal by advertising and by the media that we scarcely notice what has happened to us.
In 2007, the journalist Adam Welz records, 13 rhinos were killed by poachers in South Africa. This year, so far, 585 have been shot. No one is entirely sure why. But one answer is that very rich people in Vietnam are now sprinkling ground rhino horn on their food, or snorting it like cocaine to display their wealth. It's grotesque, but it scarcely differs from what almost everyone in industrialised nations is doing: trashing the living world through pointless consumption.
This boom has not happened by accident. Our lives have been corralled and shaped in order to encourage it. World trade rules force countries to participate in the festival of junk. Governments cut taxes, deregulate business, manipulate interest rates to stimulate spending. But seldom do the engineers of these policies stop and ask, "spending on what?" When every conceivable want and need has been met (among those who have disposable money), growth depends on selling the utterly useless. The solemnity of the state, its might and majesty, are harnessed to the task of delivering Terry the Swearing Turtle to our doors.
Grown men and women devote their lives to manufacturing and marketing this rubbish, and dissing the idea of living without it. "I always knit my gifts," says a woman in a TV ad for an electronics outlet. "Well you shouldn't," replies the narrator. An ad for a Google tablet shows a father and son camping in the woods. Their enjoyment depends on the Nexus 7's special features. The best things in life are free, but we've found a way of selling them to you.
The growth of inequality that has accompanied the consumer boom ensures that the rising economic tide no longer lifts all boats. In the US in 2010, a remarkable 93% of the growth in incomes accrued to the top 1% of the population. The old excuse, that we must trash the planet to help the poor, simply does not wash. For a few decades of extra enrichment for those who already possess more money than they know how to spend, the prospects of everyone else who will live on this Earth are diminished.
So effectively have governments, the media and advertisers associated consumption with prosperity and happiness that to say these things is to expose yourself to opprobrium and ridicule. Witness last week's edition of Radio 4's The Moral Maze, in which most of the panel lined up to decry the idea of consuming less, and to associate it somehow with authoritarianism. When the world goes mad, those who resist are denounced as lunatics.
Bake them a cake, write them a poem, give them a kiss, tell them a joke, but for God's sake stop trashing the planet to tell someone you care. All it shows is that you don't.
Monday, 22 October 2012
What happens to a Lottery winner?
Lottery millionaires each fund six jobs a year, study shows
3,000 £1m-plus winners have created another 3,780 millionaires among family and friends and contributed £750m to GDP
Some of the National Lottery's 3,000 millionaire winners. Photograph: David Parry/PA
The balls have dropped and all six numbers match, so it's time to buy that Audi, book the holiday in the US and phone the estate agent. At least, that's what most lottery millionaires do, according to an analysis of spending and investment by jackpot winners.
Since its launch in 1994, the lottery has created 3,000 millionaires who have won more than £8.5bn in total, at an average of £2.8m each. The trickle-down effect means that between them they have created a further 3,780 millionaires among their children, family and friends, according to the forecasting consultancy Oxford Economics.
Most winners (59%) give up work straight away, but 19% carry on doing the day job and 31% do unpaid voluntary work. The good news for the economy is that 98% of winners' spending remained in the UK. Through their spending on property, vehicles and holidays, it is estimated that each winner keeps six people in a full-time job for a year.
Winners have contributed almost £750m to GDP, and generated more than £500m in tax receipts for the Exchequer. The bulk of the money went on property, with £2.72bn spent on winners' main properties, and £170m in paying off existing debt and mortgages.
Maintaining income was a priority, with £2.125bn spent on investments. Gifts to family and friends accounted for £1.17bn, and £680m was spent on cars and holidays.
The study, commissioned by Camelot to mark the 3,000 winners milestone, was based on research from 100 £1m-plus winners. It found that in total the 3,000 winners have purchased 7,958 houses or flats in the UK, or 2.7 each, spending £3.3bn. Most winners (82%) changed their main residence, spending an average £900,000.
The new home is likely to come with a hot tub, with almost a third (29%) putting that on their shopping list. A walk-in wardrobe was a must for 28%, almost a quarter (24%) opted for a property behind electric gates, and 22% had a games room, with 7% installing a snooker table.
Larger properties need maintaining, and 30% of winners employed a cleaner and 24% a gardener. A small proportion (5%) employed a beautician.
Audis were the favourite cars of 16% of winners, with Range Rovers and BMWs also popular purchases (11% each), as well as Mercedes (10%) and Land Rovers (5%). Winners spent £463m on 17,190 cars, with the average price of their favourite being £46,116.
Holidays were also a priority. The majority (68%) choose five-star hotels overseas. The US was the favoured destination for 27%, followed by the Caribbean (9%). Closer to home, however, UK caravan sales have benefited. Over the past 18 years, 10% of millionaires have bought a caravan, generating sales worth about £7.4m.
Some winners (15%) have started their own businesses, 9% have helped others to do so, and 6% have invested in or bought other people's businesses. Businesses started or supported by lottery winners employ 3,195 people, according to the study.
Andy Logan, co-analyst and author of the report, said: "The effect of a win spreads much further and wider than we anticipated. Not only does it transform the lives of friends and family, but each win has a measurable effect on the UK economy, especially with so much of it being spent in the UK. The use of each win creates a ripple effect across this generation and very often the next."
Tuesday, 22 November 2011
The billionaire Virgin boss Richard Branson is no radical, he's no entrepreneur, he's just a plain old-fashioned carpetbagger
Last week, you, me and every other taxpayer in Britain each handed £13 to the billionaire Richard Branson. Not that we were told about this national whip-round. Instead, George Osborne claimed the heavily discounted sale of Northern Rock to the Virgin boss and a few of his chums represented "value for money". That's a funny way to describe a deal where taxpayers come out at least £400m poorer, but at least we now have an answer to that perennial pre-Christmas question of what to give the man who has everything.
And what do Team Branson plan to do with the Rock? Listen to Virgin Money chairman David Clementi's talk of creating "a significant banking competitor" and you'd have come away with wholesome impressions of commitment and investment. If you'd leafed through the FT this weekend, though, you'd have read about how the Virgin consortium will raid the business of its own cash to pay for the purchase – and then, as the chief investor, American financier Wilbur Ross, puts it: "We would hope to sell out a few years down the road." In other words, the business plan is to buy it cheap, strip it of assets – then flog it dear.
Hang on, you're probably thinking. Is this the same Branson who had those record shops? Who always pops up in the papers dressed as a woman or riding in a hot air balloon? Sir Richard of the Beard and the Overbite?
And the answer is: yes. Sure, Branson would like you to believe that he's the greatest iconoclast since John Calvin, leading a Reformation of established business. And if you won't buy that, he'll settle for being cast as a public-school Don Quixote for ever tilting at insiders and interest groups. Yes, the entrepreneur screws up – as with cars, cola, cosmetics and all those other discarded Virgins – but he takes risks.
The more prosaic truth is that the Virgin boss keeps himself in homes in Holland Park and Necker Island by taking taxpayer subsidies and operating heavily protected businesses. After all, you don't get much safer than a small mortgage lender that's had all its rubbish assets taken off it by the Treasury, in a market where the big banks are keeping their eyes down and their fingers crossed.
Think about the great Branson triumphs and you'll see what I mean. Virgin Rail? A monopoly on the West Coast main line, complete with initial subsidies worth hundreds of millions. Virgin Radio and Virgin Mobile? Both granted government licences to operate in a heavily restricted market. Virgin Airlines? The beneficiary of regulators' decision to strip British Airways of landing slots between London and New York and award them to the number two player. Again, a closed market where Branson has tried to keep the door shut tight against further competition.
Despite all the awards and the cosy relationships with whoever's in Downing Street, the Virgin boss neither makes anything, nor changes anything. He's no radical. The Northern Rock purchase is typical of his style: he fronts up a deal where the real money tends to come from someone else (in this case, an American and an Abu Dhabi investment firm), slaps the Virgin name everywhere and then cashes out as soon as possible. Branson isn't an entrepreneur; he's a carpetbagger.
Early in Tom Bower's splendid biography of Branson, there is a scene in which he is giving a Millennium Lecture at Oxford University in November 1999. The "lighthouse for enterprise" is asked what his great hope is for the new century, and a hush falls over the audience. What might he say? Were this Bill Gates, a picture would be painted of a software revolution. The head of Nissan might summon up a vision of Africans and Asians gaily pootling about in cheap new hatchbacks. What does the bearded visionary have in mind? "To run the national lottery."
Of course he does: a government-gifted licence to get his brand name plastered everywhere – the sort of thing Branson is always after.
But here's the thing: in his desire for sheltered money-makers, the Virgin boss differs from the rest of British business only in his desire for publicity. Look at our household names: take out retail, banks and commodities and the things you're left with bear names such as Wessex Water or Centrica or Arriva. In other words, they do things the public sector used to do – pump water or pipe gas or lay on public transport. Alternatively, they're outfits such as Serco, or Capita and they're bidding for contracts from the government; or they're engineers bidding for PFI projects. Now look at the big names in America or Germany: there are firms such as Google or Siemens.
Over here much of the private sector isn't adding anything or innovating – indeed, it's tricky to do that when you're running an administrative office or supplying water. They're simply taking contracts and cutting staffing costs.
This is a picture of lazy British business, either seeking business from the state or the protection of sheltered industries. And yet if you listen to the Conservatives, the problem with the economy is that the labour markets are too heavily regulated. No 10 lets it be known that it's taking seriously ideas to scrap laws around unfair dismissal, so that employees can be sacked without explanation.
The implication of all this is that Cameron and Osborne think the workers are to blame for the malaise of the British economy. Look at the Northern Rock deal, however, or flick through the business pages, and the opposite appears to be the case: it's business that needs to be prodded into working harder.
And what do Team Branson plan to do with the Rock? Listen to Virgin Money chairman David Clementi's talk of creating "a significant banking competitor" and you'd have come away with wholesome impressions of commitment and investment. If you'd leafed through the FT this weekend, though, you'd have read about how the Virgin consortium will raid the business of its own cash to pay for the purchase – and then, as the chief investor, American financier Wilbur Ross, puts it: "We would hope to sell out a few years down the road." In other words, the business plan is to buy it cheap, strip it of assets – then flog it dear.
Hang on, you're probably thinking. Is this the same Branson who had those record shops? Who always pops up in the papers dressed as a woman or riding in a hot air balloon? Sir Richard of the Beard and the Overbite?
And the answer is: yes. Sure, Branson would like you to believe that he's the greatest iconoclast since John Calvin, leading a Reformation of established business. And if you won't buy that, he'll settle for being cast as a public-school Don Quixote for ever tilting at insiders and interest groups. Yes, the entrepreneur screws up – as with cars, cola, cosmetics and all those other discarded Virgins – but he takes risks.
The more prosaic truth is that the Virgin boss keeps himself in homes in Holland Park and Necker Island by taking taxpayer subsidies and operating heavily protected businesses. After all, you don't get much safer than a small mortgage lender that's had all its rubbish assets taken off it by the Treasury, in a market where the big banks are keeping their eyes down and their fingers crossed.
Think about the great Branson triumphs and you'll see what I mean. Virgin Rail? A monopoly on the West Coast main line, complete with initial subsidies worth hundreds of millions. Virgin Radio and Virgin Mobile? Both granted government licences to operate in a heavily restricted market. Virgin Airlines? The beneficiary of regulators' decision to strip British Airways of landing slots between London and New York and award them to the number two player. Again, a closed market where Branson has tried to keep the door shut tight against further competition.
Despite all the awards and the cosy relationships with whoever's in Downing Street, the Virgin boss neither makes anything, nor changes anything. He's no radical. The Northern Rock purchase is typical of his style: he fronts up a deal where the real money tends to come from someone else (in this case, an American and an Abu Dhabi investment firm), slaps the Virgin name everywhere and then cashes out as soon as possible. Branson isn't an entrepreneur; he's a carpetbagger.
Early in Tom Bower's splendid biography of Branson, there is a scene in which he is giving a Millennium Lecture at Oxford University in November 1999. The "lighthouse for enterprise" is asked what his great hope is for the new century, and a hush falls over the audience. What might he say? Were this Bill Gates, a picture would be painted of a software revolution. The head of Nissan might summon up a vision of Africans and Asians gaily pootling about in cheap new hatchbacks. What does the bearded visionary have in mind? "To run the national lottery."
Of course he does: a government-gifted licence to get his brand name plastered everywhere – the sort of thing Branson is always after.
But here's the thing: in his desire for sheltered money-makers, the Virgin boss differs from the rest of British business only in his desire for publicity. Look at our household names: take out retail, banks and commodities and the things you're left with bear names such as Wessex Water or Centrica or Arriva. In other words, they do things the public sector used to do – pump water or pipe gas or lay on public transport. Alternatively, they're outfits such as Serco, or Capita and they're bidding for contracts from the government; or they're engineers bidding for PFI projects. Now look at the big names in America or Germany: there are firms such as Google or Siemens.
Over here much of the private sector isn't adding anything or innovating – indeed, it's tricky to do that when you're running an administrative office or supplying water. They're simply taking contracts and cutting staffing costs.
This is a picture of lazy British business, either seeking business from the state or the protection of sheltered industries. And yet if you listen to the Conservatives, the problem with the economy is that the labour markets are too heavily regulated. No 10 lets it be known that it's taking seriously ideas to scrap laws around unfair dismissal, so that employees can be sacked without explanation.
The implication of all this is that Cameron and Osborne think the workers are to blame for the malaise of the British economy. Look at the Northern Rock deal, however, or flick through the business pages, and the opposite appears to be the case: it's business that needs to be prodded into working harder.
Friday, 30 September 2011
Journalist opens a Public Register of income. I wish all others follow.
A register of journalists' interests would help readers to spot astroturfing
Pieces paid for by lobby groups would become apparent if, like me, other writers opened a public registry of their interests
Expenses submitted by David Heathcoat-Amory MP for horse manure.
Journalists are good are dishing it out, less good at taking it.
We demand from others standards we would never dream of applying to
ourselves. Tabloid newsrooms fuelled by cocaine excoriate celebrity
drug-takers. Hacks who have made a lifetime's study of abusing expense
accounts lambast MPs for fiddling theirs. Columnists demand
accountability, but demonstrate none themselves. Should we be surprised
that the public place us somewhere on the narrow spectrum between
derivatives traders and sewer rats?
No one will be shocked to discover hypocrisy among hacks, but there's also a more substantial issue here. A good deal of reporting looks almost indistinguishable from corporate press releases. Often that's because it is corporate press releases, mindlessly recycled by overstretched staff: a process Nick Davies has christened churnalism. Or it could be because the reporters work for people who see themselves, as Max Hastings said of his employer Conrad Black, as "members of the rich men's trade union", whose mission is to defend the proprietorial class to which they belong.
But there are sometimes other influences at play, which are even less visible to the public. From time to time a payola scandal surfaces, in which journalists are shown to have received money from people whose interests they write or talk about. For example, two columnists in the US, Doug Bandow and Peter Ferrara, were exposed for taking undisclosed payments from the disgraced corporate lobbyist Jack Abramoff. On top of the payments he received from the newspapers he worked for, Bandow was given $2,000 for every column he wrote which favoured Abramoff's clients.
Armstrong Williams, a TV host, secretly signed a $240,000 contract with George W Bush's Department of Education to promote Bush's education bill and ensure that the education secretary was offered slots on his programme. In the UK, a leaked email revealed that Professor Roger Scruton, a columnist for the Financial Times and a contributor to other newspapers, was being paid £4,500 a month by Japan Tobacco International to write on "major topics of current concern" to the industry.
These revelations were accidental. For all we know, such deals could be commonplace. While journalists are not subject to the accountability they demand of others, their powerful position – helping to shape public opinion – is wide open to abuse.
The question of who pays for public advocacy has become an obsession of mine. I've seen how groups purporting to be spontaneous gatherings of grassroots activists, fighting the regulation of tobacco or demanding that governments should take no action on climate change, have in fact been created and paid for by corporations: a practice known as astroturfing. I've asked the bodies which call themselves free-market thinktanks, yet spend much of their time promoting corporate talking-points, to tell me who funds them. All but one have refused.
But if I'm to subject other people to this scrutiny, I should also be prepared to expose myself to it. So I have done something which might be foolhardy, but which I feel is necessary: I've opened a registry of my interests on my website, in which I will detail all the payments, gifts and hospitality (except from family and friends) I receive, as well as the investments I've made. I hope it will encourage other journalists to do the same. In fact I urge you, their readers, to demand it of them.
Like many British people, I feel embarrassed talking about money, and publishing the amounts I receive from the Guardian and other employers makes me feel naked. I fear I will be attacked by some people for earning so much and mocked by others for earning so little. Even so, the more I think about it, the more I wonder why it didn't occur to me to do this before.
A voluntary register is a small step towards transparency. What I would really like to see is a mandatory list of journalists' financial interests, similar to the House of Commons registry. I believe that everyone who steps into public life should be obliged to show who is paying them, and how much. Publishing this register could be one of the duties of whatever replaces the discredited Press Complaints Commission.
Journalists would still wield influence without responsibility. That's written into the job description. But at least we would then have some idea of whether it's the organ-grinder talking or his monkey.
No one will be shocked to discover hypocrisy among hacks, but there's also a more substantial issue here. A good deal of reporting looks almost indistinguishable from corporate press releases. Often that's because it is corporate press releases, mindlessly recycled by overstretched staff: a process Nick Davies has christened churnalism. Or it could be because the reporters work for people who see themselves, as Max Hastings said of his employer Conrad Black, as "members of the rich men's trade union", whose mission is to defend the proprietorial class to which they belong.
But there are sometimes other influences at play, which are even less visible to the public. From time to time a payola scandal surfaces, in which journalists are shown to have received money from people whose interests they write or talk about. For example, two columnists in the US, Doug Bandow and Peter Ferrara, were exposed for taking undisclosed payments from the disgraced corporate lobbyist Jack Abramoff. On top of the payments he received from the newspapers he worked for, Bandow was given $2,000 for every column he wrote which favoured Abramoff's clients.
Armstrong Williams, a TV host, secretly signed a $240,000 contract with George W Bush's Department of Education to promote Bush's education bill and ensure that the education secretary was offered slots on his programme. In the UK, a leaked email revealed that Professor Roger Scruton, a columnist for the Financial Times and a contributor to other newspapers, was being paid £4,500 a month by Japan Tobacco International to write on "major topics of current concern" to the industry.
These revelations were accidental. For all we know, such deals could be commonplace. While journalists are not subject to the accountability they demand of others, their powerful position – helping to shape public opinion – is wide open to abuse.
The question of who pays for public advocacy has become an obsession of mine. I've seen how groups purporting to be spontaneous gatherings of grassroots activists, fighting the regulation of tobacco or demanding that governments should take no action on climate change, have in fact been created and paid for by corporations: a practice known as astroturfing. I've asked the bodies which call themselves free-market thinktanks, yet spend much of their time promoting corporate talking-points, to tell me who funds them. All but one have refused.
But if I'm to subject other people to this scrutiny, I should also be prepared to expose myself to it. So I have done something which might be foolhardy, but which I feel is necessary: I've opened a registry of my interests on my website, in which I will detail all the payments, gifts and hospitality (except from family and friends) I receive, as well as the investments I've made. I hope it will encourage other journalists to do the same. In fact I urge you, their readers, to demand it of them.
Like many British people, I feel embarrassed talking about money, and publishing the amounts I receive from the Guardian and other employers makes me feel naked. I fear I will be attacked by some people for earning so much and mocked by others for earning so little. Even so, the more I think about it, the more I wonder why it didn't occur to me to do this before.
A voluntary register is a small step towards transparency. What I would really like to see is a mandatory list of journalists' financial interests, similar to the House of Commons registry. I believe that everyone who steps into public life should be obliged to show who is paying them, and how much. Publishing this register could be one of the duties of whatever replaces the discredited Press Complaints Commission.
Journalists would still wield influence without responsibility. That's written into the job description. But at least we would then have some idea of whether it's the organ-grinder talking or his monkey.
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