Showing posts with label morality. Show all posts
Showing posts with label morality. Show all posts
Sunday, 2 June 2024
Monday, 12 December 2022
The Moral Governance of Others
Nadeem F Paracha in The Dawn
In September, 22-year-old Mahsa Amini was admonished by the Guidance Patrol for ‘improperly’ wearing her hijab. She was then allegedly beaten to death. Her death triggered an unprecedented protest movement, in which women as well as men are attacking symbols of Iran’s theocracy like never before.
The protests have evolved into an open rebellion against Iran’s morality laws and against groups that the state has employed to implement these laws.
The Guidance Patrol is the successor of the Islamic Revolution Committees that were formed in 1979 to forcibly implement ‘Islamic morality’ in public spaces — especially when wearing the hijab was made compulsory in 1983. Over the years, there have been isolated protests against this law, but nothing like what Iran is witnessing today.
The protests are challenging the whole idea of ‘moral policing’ that began to be adopted by the state in many Muslim-majority countries from 1979 onwards. After Iran, moral policing units also emerged in Saudi Arabia and, from the 1990s, in Sudan, Afghanistan, Nigeria and, in certain regions of Malaysia and Indonesia.
The state gives the units powers to check and correct ‘moral digressions’, such as ‘inappropriate’ dressing (especially by women), ‘unseemly’ interaction between men and women in public, or the exhibition of any other ‘un-Islamic’ behaviour. Moral policing outfits have often been accused of using violent methods, mostly against women.
However, as morality policing organisations are now being openly challenged in Iran, recently they were disbanded in Saudi Arabia by the crown prince Muhammad bin Salman. Their presence contradicts his reformist agenda. Also, the criticism against the tactics used by the police was intensifying. Morality policing units were also dismantled in Sudan in 2019, after the overthrow of the dictator Omar al-Bashir.
According to Amanda F. Detrick (University of Washington, 2017): “States with religious systems of government, employ morality police as a formal method of social control to expand and stabilise their rule. Morality police units enable the regime to project power into society and retain dominance by affirming religious legitimacy, suppressing dissent and enforcing socio-religious and political uniformity.”
Moral policing can also emerge as an informal method of social control. According to the French philosopher Michel Foucault, the “governance of the self” can lead to the “governance of others.” In other words, sometimes, when an individual or a group embraces an idea of morality, they may end up enforcing this idea on others. If the enforcement finds traction among a large body of people in a society, the state is likely to adopt it as policy.
For example, even though most Muslim-majority countries do not have moral policing outfits formed by the state, ever since the 1980s, vigilante groups have been known to implement ‘morality’ by force. Such enforcements have often been turned into law by governments.
In Pakistan, for years, non-state groups campaigned to oust the Ahmadiyya from the fold of Islam. At first, the state treated the campaigns as subversive. But when the campaigns began to find greater traction among the polity, especially in the Punjab, the government declared the Ahmadiyya as a non-Muslim minority.
Informal methods of social control that emerge from below have been highly successful in Pakistan. From the late 1960s, there were campaigns against nightclubs, cinemas and the sale of alcoholic beverages by right-wing vigilante groups. They were suppressed by the government. But in the late 1970s, when a government was struggling to stall a political movement against it, it suddenly agreed to close down clubs and ban alcohol. But this was a futile attempt to regain social control.
Consequently, in 1980, there were plans by the Ziaul Haq dictatorship to form state-backed moral policing units. They were to enforce gender segregation in public spaces, ‘proper’ dressing habits (especially among women), compulsory prayers in the mosques, etc. Women’s organisations saw these as a way to strengthen a myopic patriarchal ethos. Their activism deterred the dictatorship from forming moral policing squads.
However, the frequency of vigilante groups enforcing (their ideas of) morality increased. For example, a group calling itself the ‘Allah Tigers’ started to raid hotels and even homes on every New Years Eve. Technically, their actions were unlawful, but the dictatorship tolerated them and saw them as the actions of ‘common people’ who were willingly implementing the state’s ‘Islamisation’ project.
There have also been non-state groups enforcing the hijab and discouraging the celebration of events such as Valentine’s Day. Although the government and the state have not appropriated these as policy, many educational institutions have.
But formal and informal methods of social control through moral policing are not only restricted to Muslim-majority countries. Ironically, outside the myths of ancient ‘pious’ states, one of the first formal examples in this respect appeared in 19th century England.
The regular police force in 19th century England was encouraged to ‘morally regulate’ the society. To 19th century British ‘gentry’, morality was deemed a necessary part of life, in order to hold and keep social stability. The police often took action (sometimes preemptive) against alleged prostitutes, drunkenness, betting and ‘habitual’ criminals.
Nevertheless, moral policing in most Muslim and, particularly in non-Muslim regions, has largely remained informal. But it has been rather successful in influencing state institutions. For example, years of anti-abortion activism in the US finally led to an abortion ban imposed by the US Supreme Court.
Also, in many countries, non-state moral policing of content on social media and the electronic media has pushed governments to pull down websites, films and TV shows. Interestingly, informal moral policing in a non-Muslim country has been most rampant in India. Vigilante groups often emerge to enforce ‘Hindu values’. These can include action against those celebrating Valentine’s Day, to lynching those who are accused of eating beef.
Moral policing is a serious issue. Morality has mostly to do with factors rooted in religion. There may be a consensus on the more general aspects of a faith, but there are always many interpretations of various topical aspects of it. One cannot impose morality based on a single interpretation.
Instead, states need to educate citizens to embrace pluralism and tolerance and exhibit behaviour that does not create social disruption and divisions. An individual’s choices that form their moral self-governance should be respected, as long as they are not raging to turn it into the governance of others.
In September, 22-year-old Mahsa Amini was admonished by the Guidance Patrol for ‘improperly’ wearing her hijab. She was then allegedly beaten to death. Her death triggered an unprecedented protest movement, in which women as well as men are attacking symbols of Iran’s theocracy like never before.
The protests have evolved into an open rebellion against Iran’s morality laws and against groups that the state has employed to implement these laws.
The Guidance Patrol is the successor of the Islamic Revolution Committees that were formed in 1979 to forcibly implement ‘Islamic morality’ in public spaces — especially when wearing the hijab was made compulsory in 1983. Over the years, there have been isolated protests against this law, but nothing like what Iran is witnessing today.
The protests are challenging the whole idea of ‘moral policing’ that began to be adopted by the state in many Muslim-majority countries from 1979 onwards. After Iran, moral policing units also emerged in Saudi Arabia and, from the 1990s, in Sudan, Afghanistan, Nigeria and, in certain regions of Malaysia and Indonesia.
The state gives the units powers to check and correct ‘moral digressions’, such as ‘inappropriate’ dressing (especially by women), ‘unseemly’ interaction between men and women in public, or the exhibition of any other ‘un-Islamic’ behaviour. Moral policing outfits have often been accused of using violent methods, mostly against women.
However, as morality policing organisations are now being openly challenged in Iran, recently they were disbanded in Saudi Arabia by the crown prince Muhammad bin Salman. Their presence contradicts his reformist agenda. Also, the criticism against the tactics used by the police was intensifying. Morality policing units were also dismantled in Sudan in 2019, after the overthrow of the dictator Omar al-Bashir.
According to Amanda F. Detrick (University of Washington, 2017): “States with religious systems of government, employ morality police as a formal method of social control to expand and stabilise their rule. Morality police units enable the regime to project power into society and retain dominance by affirming religious legitimacy, suppressing dissent and enforcing socio-religious and political uniformity.”
Moral policing can also emerge as an informal method of social control. According to the French philosopher Michel Foucault, the “governance of the self” can lead to the “governance of others.” In other words, sometimes, when an individual or a group embraces an idea of morality, they may end up enforcing this idea on others. If the enforcement finds traction among a large body of people in a society, the state is likely to adopt it as policy.
For example, even though most Muslim-majority countries do not have moral policing outfits formed by the state, ever since the 1980s, vigilante groups have been known to implement ‘morality’ by force. Such enforcements have often been turned into law by governments.
In Pakistan, for years, non-state groups campaigned to oust the Ahmadiyya from the fold of Islam. At first, the state treated the campaigns as subversive. But when the campaigns began to find greater traction among the polity, especially in the Punjab, the government declared the Ahmadiyya as a non-Muslim minority.
Informal methods of social control that emerge from below have been highly successful in Pakistan. From the late 1960s, there were campaigns against nightclubs, cinemas and the sale of alcoholic beverages by right-wing vigilante groups. They were suppressed by the government. But in the late 1970s, when a government was struggling to stall a political movement against it, it suddenly agreed to close down clubs and ban alcohol. But this was a futile attempt to regain social control.
Consequently, in 1980, there were plans by the Ziaul Haq dictatorship to form state-backed moral policing units. They were to enforce gender segregation in public spaces, ‘proper’ dressing habits (especially among women), compulsory prayers in the mosques, etc. Women’s organisations saw these as a way to strengthen a myopic patriarchal ethos. Their activism deterred the dictatorship from forming moral policing squads.
However, the frequency of vigilante groups enforcing (their ideas of) morality increased. For example, a group calling itself the ‘Allah Tigers’ started to raid hotels and even homes on every New Years Eve. Technically, their actions were unlawful, but the dictatorship tolerated them and saw them as the actions of ‘common people’ who were willingly implementing the state’s ‘Islamisation’ project.
There have also been non-state groups enforcing the hijab and discouraging the celebration of events such as Valentine’s Day. Although the government and the state have not appropriated these as policy, many educational institutions have.
But formal and informal methods of social control through moral policing are not only restricted to Muslim-majority countries. Ironically, outside the myths of ancient ‘pious’ states, one of the first formal examples in this respect appeared in 19th century England.
The regular police force in 19th century England was encouraged to ‘morally regulate’ the society. To 19th century British ‘gentry’, morality was deemed a necessary part of life, in order to hold and keep social stability. The police often took action (sometimes preemptive) against alleged prostitutes, drunkenness, betting and ‘habitual’ criminals.
Nevertheless, moral policing in most Muslim and, particularly in non-Muslim regions, has largely remained informal. But it has been rather successful in influencing state institutions. For example, years of anti-abortion activism in the US finally led to an abortion ban imposed by the US Supreme Court.
Also, in many countries, non-state moral policing of content on social media and the electronic media has pushed governments to pull down websites, films and TV shows. Interestingly, informal moral policing in a non-Muslim country has been most rampant in India. Vigilante groups often emerge to enforce ‘Hindu values’. These can include action against those celebrating Valentine’s Day, to lynching those who are accused of eating beef.
Moral policing is a serious issue. Morality has mostly to do with factors rooted in religion. There may be a consensus on the more general aspects of a faith, but there are always many interpretations of various topical aspects of it. One cannot impose morality based on a single interpretation.
Instead, states need to educate citizens to embrace pluralism and tolerance and exhibit behaviour that does not create social disruption and divisions. An individual’s choices that form their moral self-governance should be respected, as long as they are not raging to turn it into the governance of others.
Friday, 29 July 2022
The strange case of the cricket match that helped fund Imran Khan’s political rise
Simon Clark in The FT
At the height of his success, the Pakistani tycoon Arif Naqvi invited cricket superstar Imran Khan and hundreds of bankers, lawyers and investors to his walled country estate in the Oxfordshire village of Wootton for weekends of sport and drinking. The host was the founder of the Dubai-based Abraaj Group, then one of the largest private equity firms operating in emerging markets, with billions of dollars under management.
At the “Wootton T20 Cup”, over which Naqvi presided from 2010 to 2012, the main event was a cricket tournament between teams with invented names: the Peshawar Perverts or the Faisalabad Fothermuckers. They played on an immaculate pitch amid 14 acres of formal gardens and parkland at Wootton Place, Naqvi’s 17th-century residence. Veteran cricket commentator Henry Blofeld attended along with expert umpires and film crews.
“You can choose to play in order to impress or make a fool of yourself, or alternatively just to be an innocent bystander,” Naqvi wrote in an invitation to the event. The guests were asked to pay between £2,000 and £2,500 each to attend, with the money going to unspecified “philanthropic causes”, Naqvi said.
It is the type of charity fundraiser repeated up and down the UK every summer. What makes it unusual is that the ultimate benefactor was a political party in Pakistan. The fees were paid to Wootton Cricket Ltd, which, despite the name, was in fact a Cayman Islands-incorporated company owned by Naqvi and the money was being used to bankroll Pakistan Tehreek-e-Insaf, Khan’s political party. Funds poured into Wootton Cricket from companies and individuals, including at least £2mn from a United Arab Emirates government minister who is also a member of the Abu Dhabi royal family.
Pakistan forbids foreign nationals and companies from funding political parties, but Abraaj emails and internal documents seen by the Financial Times, including a bank statement covering the period between February 28 and May 30 2013 for a Wootton Cricket account in the UAE, show that both companies and foreign nationals as well as citizens of Pakistan sent millions of dollars to Wootton Cricket — before money was transferred from the account to Pakistan for the PTI.
The funding of the party is at the centre of a years-long investigation by the Election Commission of Pakistan, an inquiry that has taken on even greater importance as Khan — who lost office in April — plots a political comeback.
But back in 2013, Khan — a World Cup-winning cricket captain — was riding a wave of popular support and campaigning to upend Pakistan’s politics on an anti-corruption ticket. He presented himself to the electorate as a democratic reformer — born in Pakistan and with experience of living in the west — who could break the hold of the political family dynasties that had dominated the country for decades.
Although Khan lost the 2013 general election to longtime rival Nawaz Sharif, his party became the third largest in the National Assembly. Naqvi’s star was also rising. His private equity firm was expanding and winning new investors. He became a regular fixture at World Economic Forum meetings in Davos.
In July 2017, Pakistan’s Supreme Court removed Sharif from office over corruption allegations. Khan won the election in July 2018. As prime minister he became increasingly critical of the west, praising Afghanistan’s Taliban when US forces withdrew in 2021, and visiting Vladimir Putin in Moscow on the day Russian forces invaded Ukraine in February.
The Election Commission of Pakistan has been investigating the funding of the PTI for more than seven years. In January, the ECP’s scrutiny committee issued a damning report in which it said the PTI received funding from foreign nationals and companies and accused it of under-reporting funds and concealing dozens of bank accounts. Wootton Cricket was named in the report, but Naqvi wasn’t identified as its owner.
In April, Khan stood down after losing a parliamentary vote of no confidence, triggered in part by rising inflation. He has accused the US of orchestrating the vote and is now attempting to stage a political return to contest a general election due to take place by October 2023.
That re-election effort means that although the Naqvi funding took place almost a decade ago, the controversy around it, and the final findings of the election commission, are likely to be at the forefront of Pakistan politics for some time.
While it has previously been reported that Naqvi funded Khan’s party, the ultimate source of the money has never before been disclosed. Wootton Cricket’s bank statement shows it received $1.3mn on March 14 2013 from Abraaj Investment Management Ltd, the fund management unit of Naqvi’s private equity firm, boosting the account’s previous balance of $5,431. Later the same day, $1.3mn was transferred from the account directly to a PTI bank account in Pakistan. Abraaj expensed the cost to a holding company through which it controlled K-Electric, the power provider to Karachi, Pakistan’s largest city.
A further $2mn flowed into the Wootton Cricket account in April 2013 from Sheikh Nahyan bin Mubarak al-Nahyan, a member of Abu Dhabi’s royal family, government minister and chair of Pakistan’s Bank Alfalah, according to the bank statement and a copy of the Swift transfer details.
Naqvi then exchanged emails with a colleague about transferring $1.2mn more to the PTI. Six days after the $2mn arrived in the Wootton Cricket bank account, Naqvi transferred $1.2mn from it to Pakistan in two instalments. Rafique Lakhani, the senior Abraaj executive responsible for managing cash flow, wrote in an email to Naqvi that the transfers were intended for the PTI. Sheikh Nahyan didn’t respond to requests for comment.
“Like other populists, Khan is made of Teflon,” says Uzair Younus, director of the Pakistan initiative at the Atlantic Council, a Washington-based research group. “But his opponents will try to use the foreign funding controversy to weaken the argument that he is not corrupt,” he adds, and to encourage the election commission to “punish him and his party”.
A useful ally
Naqvi, 62, was born into a Karachi business family. After studying at the London School of Economics he spent the 1990s working in Saudi Arabia and Dubai and started Abraaj in 2002, building it into an investment powerhouse. With offices in Dubai, London, New York and across Asia, Africa and Latin America, the company raised billions of dollars from the Bill & Melinda Gates Foundation, the US administration of Barack Obama, the British and French governments and other investors.
Well-connected, Naqvi liked to impress. John Kerry — a speaker at one Abraaj event — was approached by the company about working with it after he served as US secretary of state. Naqvi met Britain’s Prince Charles and was active in one of his charities, the British Asian Trust. He was a board member of the UN Global Compact, which advises the UN secretary-general, and sat alongside former Nissan chair Carlos Ghosn on the board of the Interpol Foundation, which raises funds for the global police organisation.
In Washington he was seen as a useful ally. The Obama administration pledged $150mn to an Abraaj fund investing in Middle Eastern companies: a press release said that the partnership would help turn the US president’s promise to improve economic relations with Islamic nations into a reality. Some even saw him as a possible future political leader in Pakistan, which he once described as “a country not known for transparency”, before adding that Abraaj “did everything by the book” during its control of K-Electric.
“We avoided every single point where you would have had to come into contact with government — even though you were a utility — and have to pay someone something,” he said.
K-Electric was Abraaj’s single largest investment. But as the private equity firm ran into financial difficulties in 2016, Naqvi struck a deal to sell control of the power company to Chinese state-controlled Shanghai Electric Power for $1.77bn. Political approval for the deal in Pakistan was important and Naqvi lobbied the governments of both Sharif and Khan for backing. In 2016, he authorised a $20mn payment for Pakistan politicians to gain their support, according to US public prosecutors who later charged him with fraud, theft and attempted bribery.
The payment was allegedly intended for Nawaz Sharif and his brother Shehbaz, who replaced Khan as prime minister in April. The brothers have denied any knowledge of the matter. In January 2017, Naqvi hosted a dinner for Nawaz Sharif at Davos. After Khan became prime minister, Naqvi met him. While in office Khan criticised officials for delaying the sale of K-Electric but the deal has still not been completed.
Abraaj collapsed in 2018 after investors including the Gates Foundation started investigating whether the company was misusing money in a fund intended to buy and build hospitals across Africa and Asia. Abraaj said it was managing assets of about $14bn at the time. In 2019, US prosecutors indicted Naqvi and five of his former colleagues. Two former Abraaj executives have since pleaded guilty. Naqvi denies the charges.
Naqvi was arrested at London’s Heathrow airport in April 2019 after returning from Pakistan and faces up to 291 years in jail if found guilty of the US charges. Khan’s telephone number was included on a list of contacts he handed to police — a fact mentioned by lawyers representing the US government during Naqvi’s extradition trial in London.
His appeal against extradition to the US is expected to conclude later this year. But he has had to pay £15mn for bail and has hefty ongoing legal expenses. Wootton Place was sold to a hedge fund manager in 2020 for £12.25mn. Naqvi and his lawyer did not respond to requests for comment on this story.
Moving money around
In 2012 Khan visited Wootton Place. In a written response to questions from the FT, the former cricketer said he had gone to “a fundraising event which was attended by many PTI supporters”. Blofeld, the cricket commentator, recalls that Khan “was persuaded to take the field” at Wootton. “It was extraordinary to see how he still had the knack of bowling those fast inswingers,” he says.
Naqvi, a self-described cricket purist, provided the bats, balls, osteopaths, masseurs, food, accommodation and clothing. He literally wrote the rules for the matches. Ball tampering — banned in cricket — was permitted in matches at Wootton because “it is important to encourage innovation and experimentation in cricket, as what is considered illegal today may be de rigueur tomorrow,” Naqvi once wrote to guests.
It was a critical time for Khan to gather funds ahead of the election scheduled for May 2013, and Naqvi worked closely with other Pakistani businessmen to raise money for his campaign. The largest entry in Wootton Cricket’s bank account in the months before the election was the $2mn from Sheikh Nahyan, now the UAE’s minister for tolerance. He is also an investor in Pakistan.
After Lakhani, the Abraaj executive responsible for cash flow, told Naqvi in an email that the sheikh’s money had arrived, Naqvi replied that he should send “1.2 million to PTI”. In another email to Lakhani after the sheikh’s money entered the Wootton Cricket account Naqvi wrote: “do not tell anyone where funds are coming from, ie who is contributing”.
“Sure sir,” Lakhani responded. He wrote that he would transfer $1.2mn from Wootton Cricket to the PTI’s account in Pakistan. Then after considering sending the funds to the PTI via Naqvi’s personal account, Lakhani proposed sending the money in two instalments to a personal account for businessman Tariq Shafi in Karachi and an account for an entity called the Insaf Trust in Lahore. Although the ownership of the Insaf Trust is unclear, the emails state that the final destination was the PTI. “Don’t eff this up rafiq,” Naqvi wrote in another email.
On May 6 2013, Wootton Cricket transferred a total of $1.2mn to Shafi and the Insaf Trust. Lakhani wrote in an email to Naqvi that the transfers were for the PTI. Khan confirmed that Shafi donated to the PTI. “It is for Tariq Shafi to answer as to from where he received this money,” Khan said in response to the FT. Shafi didn’t respond to requests for comment.
‘Prohibited funding took place’
The ECP investigation into the funding of Khan’s party was triggered when Akbar S Babar, who helped establish the PTI, filed a complaint in December 2014. Although thousands of Pakistanis worldwide sent money for the PTI, Babar insists that “prohibited funding took place”.
In his written response, Khan said that neither he nor his party was aware of Abraaj providing $1.3mn through Wootton Cricket. He also said he was “not aware” of the PTI receiving any funds that originated from Sheikh Nahyan. “Arif Naqvi has given a statement which was filed before the Election Commission also, not denied by anyone, that the money came from donations during a cricket match and the money as collected by him was sent through his company Wootton Cricket,” Khan wrote.
Khan said he was waiting for the verdict of the election commission’s investigation. “It will not be appropriate to prejudge PTI.”
In its January report, the election commission said Wootton Cricket had transferred $2.12mn to the PTI but didn’t reveal the original source of the money. Naqvi has acknowledged his ownership of Wootton Cricket and denied any wrongdoing. In a statement, he told the election commission that: “I have not collected any fund from any person of non-Pakistani origin, company [public or private] or any other
The bank statement for Wootton Cricket tells a different story. It shows that Naqvi transferred three instalments directly to the PTI in 2013 adding up to a total of $2.12mn. The largest was the $1.3mn from Abraaj which company documents show was transferred to Wootton Cricket but charged to its holding company for K-Electric.
The impact of the scandal could yet hit Khan’s re-election ambitions. In July he renewed his call for an early poll after the PTI won a critical victory in by-elections in Punjab, Pakistan’s most populous province. On Twitter, he called the Election Commission of Pakistan “totally biased”.
At the same time prime minister Shehbaz Sharif has urged the commission to publish its verdict in the PTI case, saying that the delays caused by political infighting had given Khan “a free pass despite his repeated & shameless attacks on state institutions”.
Yet the Atlantic Council’s Younus says that Khan’s loyal supporters won’t be moved whatever the outcome. They “do not and will not care. In fact, Khan may claim that the story is further evidence that foreign powers are leveraging global media to conspire against him.”
For Babar, who helped found the PTI, the controversy is proof that Khan has fallen short of the ideals they set out to champion in politics. “He had the opportunity of a lifetime and he blew it,” Babar says. “Our cause was reform, change — introduce the values in our politics that we espoused publicly.” Instead, he says, “[Khan’s] morality compass in a political sense went haywire”.
Friday, 15 June 2018
Adam Smith Revisited - The Moral Crisis of Capitalism
Shahid Mehmood in The Friday Times
When the economic recession of 2008 struck the world economy, not many would have guessed that this event would set off a wave of serious introspection about the nature and morality of present day capitalism. Many, including economists, thought that this is just a continuation of the traditional cycle that an economy goes through, whereby periods of growth are followed by recessions (which in general means lower GDP growth rates). It was expected that things would be back to normal within a few years.
But something different transpired this time around. Millions of people around the globe, especially in the leading centers of global capitalism like London and New York, spilled onto the streets and vented their anger against the present state of capitalism. This movement became the ‘Wall Street vs Main Street’ movement. Many years down the line, the world economy (mainly the industrialised world) is yet to regain its growth trajectory and the waves generated by the movement still reverberate. In effect, what we have is a crisis of the workings of capitalism. It would be interesting to delve into some details in order to understand how this state of affairs came to be?
This discussion takes us back to a Scottish professor of moral philosophy and his writings on market economy and capitalism. Adam Smith, who is now revered as the father of economics, wrote his magnum opus Wealth of Nations (WON) in 1776. Considered the bible of economics, one of the most outstanding insights of the book was that a person’s greed ends up benefitting the community as a whole. Two sentences (abbreviated) lay out this principle; Smith contends that: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest…” and “Every individual… neither intends to promote the public interest nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”.
Smith’s workings of an efficient capitalist system is tied to the workings of the ‘invisible hand’, the famous concept which explains how greed that ends up promoting the greater good. But the most noticeable aspect of this concept is that Smith first mentioned it in an equally remarkable (though less discussed) book of his called the Theory of Moral Sentiments. Published before WON, it outlined the moral pre-requisites for an economy to function properly. Smith’s concept of the invisible hand, therefore, was closely tied to morality. It reads as follows: “[The rich] consume little more than the poor and in spite of their natural selfishness and rapacity…they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life …”
What Smith envisioned has, up till the end of 20th century, worked pretty well. What we saw in the industrialised nations was that capitalists and entrepreneurs, in pursuit of profit, implemented ventures and projects that ended up benefiting the society as a whole. Setting up a plant for production, for example, was purely done for personal gain. But the venture needed employees, and thus many aspiring job seekers found their sustenance due to the pursuit of greed by the industrialists/capitalists. Gradually, in the face of rising resistance in the form of Marx and others, the economies of nation states gradually transformed into welfare states, whose main beneficiaries were the larger, lower segments of the population and the middle classes. This setting worked remarkably well, and explains how it managed to weather stiff resistance over centuries, none bigger than Communism which met its demise in 1991 with the dismemberment of the Soviet Union.
But the 21st century has seen the consensus starting to unravel, with the Wall Street vs Main Street only the first sign of widespread consternation. And the simple reason is that the workings of the invisible hand are now skewed starkly in favour of the one percent.
The signs of this dysfunction are all around, in numbers and other instances. All around the world, labour’s share of total national income is on a constant decline. The real income (income adjusted for the cost of living), except for top percentile of earners, has been falling gradually. Income inequality is at a historic high. Credit Suisse, which tracks global wealth, estimated that the richest one percent now own half of total global wealth (estimated at $280 trillion).
The 18th, 19th and 20th century witnessed entrepreneurship and capitalism in a manner that every new venture resulted in creation of newer job opportunities, generation of real wealth and comparatively proportionate distribution of wealth. In contrast, today’s wealth creation is largely centered upon financial engineering and application of technological developments. The former is merely a transfer of wealth from the lower percentiles (poor and middle classes) to the rich, and the latter is leading to lesser need for workers as artificial intelligence (AI) does the work without requiring any benefits (wages, health insurance, etc.) and thus saving the owners/entrepreneurs major costs of operating a venture. The global economic scene was once dominated by companies like GM that employed thousands of people. Now, it’s dominated by organisations like Google and Amazon whose quantum of wealth is much larger, yet they employ not even half of the labour employed by big players of yesteryears. Facebook, for example, has a market cap of $370 billion, yet employs no more than 14,000 people.
What factors drive this concentration of wealth? The main culprit, apart from others like government regulations, is technology, especially software and AI. Today’s technology has this extraordinary feature that only a small initial investment is needed to make the first software copy, but the millions following it can be replicated at zero cost. Thus, the owner can earn billions without the need to invest further. In technical lingo, there is zero marginal cost of replication, which makes all this different from yesteryears. These technologies do produce jobs, but these are ‘gigs’ rather than good, quality jobs with financial security. And they pay little, usually sustenance level wages except for technically exceptional people. This means that majority of workforce is already out of contention for good, high-paying jobs, thus contributing towards the labour’s falling share of national income.
The anger of Main Street is understandable. Today’s capitalism delivers wealth in the hands of a few. Those responsible for all those Ponzi schemes that destroyed the hard-earned savings of the working class have largely gone scot-free (too big to fail phenomena). And today’s global economic scene has a heavy imprint of rent-seekers, tax dodgers and financial wizards who do not contribute much to the well-being of the citizens or the real economy. This situation aptly describes the challenge faced by Capitalism. A system that has been exceptional in delivering prosperity and successfully warding off challenges over time now finds itself under severe scrutiny because its underlying mechanism of shared prosperity has, to a large extent, stopped working. Not surprisingly, as the dreams of shared prosperity recede, so does the moral ground for its continuation.
When the economic recession of 2008 struck the world economy, not many would have guessed that this event would set off a wave of serious introspection about the nature and morality of present day capitalism. Many, including economists, thought that this is just a continuation of the traditional cycle that an economy goes through, whereby periods of growth are followed by recessions (which in general means lower GDP growth rates). It was expected that things would be back to normal within a few years.
But something different transpired this time around. Millions of people around the globe, especially in the leading centers of global capitalism like London and New York, spilled onto the streets and vented their anger against the present state of capitalism. This movement became the ‘Wall Street vs Main Street’ movement. Many years down the line, the world economy (mainly the industrialised world) is yet to regain its growth trajectory and the waves generated by the movement still reverberate. In effect, what we have is a crisis of the workings of capitalism. It would be interesting to delve into some details in order to understand how this state of affairs came to be?
This discussion takes us back to a Scottish professor of moral philosophy and his writings on market economy and capitalism. Adam Smith, who is now revered as the father of economics, wrote his magnum opus Wealth of Nations (WON) in 1776. Considered the bible of economics, one of the most outstanding insights of the book was that a person’s greed ends up benefitting the community as a whole. Two sentences (abbreviated) lay out this principle; Smith contends that: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest…” and “Every individual… neither intends to promote the public interest nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”.
Smith’s workings of an efficient capitalist system is tied to the workings of the ‘invisible hand’, the famous concept which explains how greed that ends up promoting the greater good. But the most noticeable aspect of this concept is that Smith first mentioned it in an equally remarkable (though less discussed) book of his called the Theory of Moral Sentiments. Published before WON, it outlined the moral pre-requisites for an economy to function properly. Smith’s concept of the invisible hand, therefore, was closely tied to morality. It reads as follows: “[The rich] consume little more than the poor and in spite of their natural selfishness and rapacity…they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life …”
What Smith envisioned has, up till the end of 20th century, worked pretty well. What we saw in the industrialised nations was that capitalists and entrepreneurs, in pursuit of profit, implemented ventures and projects that ended up benefiting the society as a whole. Setting up a plant for production, for example, was purely done for personal gain. But the venture needed employees, and thus many aspiring job seekers found their sustenance due to the pursuit of greed by the industrialists/capitalists. Gradually, in the face of rising resistance in the form of Marx and others, the economies of nation states gradually transformed into welfare states, whose main beneficiaries were the larger, lower segments of the population and the middle classes. This setting worked remarkably well, and explains how it managed to weather stiff resistance over centuries, none bigger than Communism which met its demise in 1991 with the dismemberment of the Soviet Union.
But the 21st century has seen the consensus starting to unravel, with the Wall Street vs Main Street only the first sign of widespread consternation. And the simple reason is that the workings of the invisible hand are now skewed starkly in favour of the one percent.
The signs of this dysfunction are all around, in numbers and other instances. All around the world, labour’s share of total national income is on a constant decline. The real income (income adjusted for the cost of living), except for top percentile of earners, has been falling gradually. Income inequality is at a historic high. Credit Suisse, which tracks global wealth, estimated that the richest one percent now own half of total global wealth (estimated at $280 trillion).
The 18th, 19th and 20th century witnessed entrepreneurship and capitalism in a manner that every new venture resulted in creation of newer job opportunities, generation of real wealth and comparatively proportionate distribution of wealth. In contrast, today’s wealth creation is largely centered upon financial engineering and application of technological developments. The former is merely a transfer of wealth from the lower percentiles (poor and middle classes) to the rich, and the latter is leading to lesser need for workers as artificial intelligence (AI) does the work without requiring any benefits (wages, health insurance, etc.) and thus saving the owners/entrepreneurs major costs of operating a venture. The global economic scene was once dominated by companies like GM that employed thousands of people. Now, it’s dominated by organisations like Google and Amazon whose quantum of wealth is much larger, yet they employ not even half of the labour employed by big players of yesteryears. Facebook, for example, has a market cap of $370 billion, yet employs no more than 14,000 people.
What factors drive this concentration of wealth? The main culprit, apart from others like government regulations, is technology, especially software and AI. Today’s technology has this extraordinary feature that only a small initial investment is needed to make the first software copy, but the millions following it can be replicated at zero cost. Thus, the owner can earn billions without the need to invest further. In technical lingo, there is zero marginal cost of replication, which makes all this different from yesteryears. These technologies do produce jobs, but these are ‘gigs’ rather than good, quality jobs with financial security. And they pay little, usually sustenance level wages except for technically exceptional people. This means that majority of workforce is already out of contention for good, high-paying jobs, thus contributing towards the labour’s falling share of national income.
The anger of Main Street is understandable. Today’s capitalism delivers wealth in the hands of a few. Those responsible for all those Ponzi schemes that destroyed the hard-earned savings of the working class have largely gone scot-free (too big to fail phenomena). And today’s global economic scene has a heavy imprint of rent-seekers, tax dodgers and financial wizards who do not contribute much to the well-being of the citizens or the real economy. This situation aptly describes the challenge faced by Capitalism. A system that has been exceptional in delivering prosperity and successfully warding off challenges over time now finds itself under severe scrutiny because its underlying mechanism of shared prosperity has, to a large extent, stopped working. Not surprisingly, as the dreams of shared prosperity recede, so does the moral ground for its continuation.
Monday, 28 August 2017
Economists have started to take morality seriously
Ben Chu in The Independent
“We don’t do God,” Tony Blair’s press secretary, Alistair Campbell, once famously remarked. Similarly, economists don’t “do” morality.
They are a breed concerned with economic efficiency not spiritual uplift; human choices and incentives, not human values. They believe questions of morality can be left to philosophers and theologians.
There’s an element of truth in that stereotype. Economists have indeed tended to leave aside issues of morality. In some cases that’s because they think, on ideological grounds, that it has no place in the discipline.
But even more thoughtful and less dogmatic economists have tended to shy away from the question on the grounds that moral values are tricky to pin down, much less quantify.
That’s not to say that their research agendas have not supported “moral” agendas. They often expose market failures which harm the less well-off. And they defend the right of governments to intervene in markets in ways that might reduce short-term economic efficiency, such as by fining polluters.
They argue for the responsibility of governments to provide public goods like education. And there are also plenty of mainstream economists who justify progressive taxation on the grounds that high inequality is socially undesirable.
Yet their theoretical models themselves have generally had no place for morality.
But things might be changing. Two economic Nobel laureates at a meeting on the German island of Lindau last week outlined a bold attempt to put morality into theoretical economical modelling.
Oliver Hart, a 2016 Nobel winner, presented a paper, co-authored with Luigi Zingales, in which he looked at how the personal morality of shareholders might affect the behaviour of the companies in which they invest, in particular whether those firms will behave in a way that will maximise profits or whether they sacrifice some profit for the sake of behaving in a socially responsible manner.
To give an example, it’s perfectly legal for the American supermarket giant Wal-Mart to sell automatic weapons. But its executives could, in theory, choose not to do so. So what determines the corporate decision?
The Hart model raises the possibility that the incentives in the system of stock-market listed companies – the psychology of shareholders and the pressures on managements – might be behind an “amoral drift” in corporate behaviour.
In a similar vein, Jean Tirole, who won the Nobel in 2014, outlined at Lindau a theoretical framework in which he, along with Armin Falk, tries to model behaviour taking into account how certain popular “narratives” can inhibit people from doing what they would normally consider the right thing. A good example of such a narrative in the British context might be popular opposition to the admittance of Syrian child refugees on the false belief, pushed hard by the right-wing media, that they are all really adults pretending to be children.
“Economics is fundamentally a moral and philosophical science, embedded in the larger social sciences,” Mr Tirole said, urging other economists in the audience to join in the project of trying radical new approaches.
It remains to be seen whether this particular research agenda gets anywhere. There are plenty of holes that one can pick in the very simple models presented by Hart and Tirole and the broad-brush assumptions they make about people’s decision-making processes – something they both readily acknowledged.
It may turn out that the particular value that economics adds does indeed lie more in analysing the behaviour of broadly self-interested individuals in markets (whether competitive or not) rather than trying to build models that factor in more complex human motivations.
Yet those who criticise the “dismal science” for assuming that we are all self-interested robots should at least acknowledge these efforts by some of the luminaries of the field.
And this work is also a useful rebuke to the charge that by analysing human behaviour as narrowly self-interested the economics profession is implicitly encouraging people to behave in that selfish way, that the axioms of classical economics have a “normative” impact on society.
They are a breed concerned with economic efficiency not spiritual uplift; human choices and incentives, not human values. They believe questions of morality can be left to philosophers and theologians.
There’s an element of truth in that stereotype. Economists have indeed tended to leave aside issues of morality. In some cases that’s because they think, on ideological grounds, that it has no place in the discipline.
But even more thoughtful and less dogmatic economists have tended to shy away from the question on the grounds that moral values are tricky to pin down, much less quantify.
That’s not to say that their research agendas have not supported “moral” agendas. They often expose market failures which harm the less well-off. And they defend the right of governments to intervene in markets in ways that might reduce short-term economic efficiency, such as by fining polluters.
They argue for the responsibility of governments to provide public goods like education. And there are also plenty of mainstream economists who justify progressive taxation on the grounds that high inequality is socially undesirable.
Yet their theoretical models themselves have generally had no place for morality.
But things might be changing. Two economic Nobel laureates at a meeting on the German island of Lindau last week outlined a bold attempt to put morality into theoretical economical modelling.
Oliver Hart, a 2016 Nobel winner, presented a paper, co-authored with Luigi Zingales, in which he looked at how the personal morality of shareholders might affect the behaviour of the companies in which they invest, in particular whether those firms will behave in a way that will maximise profits or whether they sacrifice some profit for the sake of behaving in a socially responsible manner.
To give an example, it’s perfectly legal for the American supermarket giant Wal-Mart to sell automatic weapons. But its executives could, in theory, choose not to do so. So what determines the corporate decision?
The Hart model raises the possibility that the incentives in the system of stock-market listed companies – the psychology of shareholders and the pressures on managements – might be behind an “amoral drift” in corporate behaviour.
In a similar vein, Jean Tirole, who won the Nobel in 2014, outlined at Lindau a theoretical framework in which he, along with Armin Falk, tries to model behaviour taking into account how certain popular “narratives” can inhibit people from doing what they would normally consider the right thing. A good example of such a narrative in the British context might be popular opposition to the admittance of Syrian child refugees on the false belief, pushed hard by the right-wing media, that they are all really adults pretending to be children.
“Economics is fundamentally a moral and philosophical science, embedded in the larger social sciences,” Mr Tirole said, urging other economists in the audience to join in the project of trying radical new approaches.
It remains to be seen whether this particular research agenda gets anywhere. There are plenty of holes that one can pick in the very simple models presented by Hart and Tirole and the broad-brush assumptions they make about people’s decision-making processes – something they both readily acknowledged.
It may turn out that the particular value that economics adds does indeed lie more in analysing the behaviour of broadly self-interested individuals in markets (whether competitive or not) rather than trying to build models that factor in more complex human motivations.
Yet those who criticise the “dismal science” for assuming that we are all self-interested robots should at least acknowledge these efforts by some of the luminaries of the field.
And this work is also a useful rebuke to the charge that by analysing human behaviour as narrowly self-interested the economics profession is implicitly encouraging people to behave in that selfish way, that the axioms of classical economics have a “normative” impact on society.
And in a sense this is a return to older ways of thinking. Seventeen years before he wrote The Wealth of Nations in 1776 Adam Smith produced The Theory of Moral Sentiments.
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it,” wrote the revered father of economics.
Some of Adam Smith’s successors, at least, are taking those insights seriously.
“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it,” wrote the revered father of economics.
Some of Adam Smith’s successors, at least, are taking those insights seriously.
Tuesday, 23 June 2015
Greece is a sideshow. The eurozone has failed, and Germans are its victims too
'This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets.' Photograph: Matt Kenyon
Aditya Chakrabortty in The Guardian
Aditya Chakrabortty in The Guardian
Nearly every discussion of the Greek fiasco is based on a morality play. Call it Naughty Greece versus Noble Europe. Those troublesome Greeks never belonged in the euro, runs this story. Once inside, they got themselves into a big fat mess – and now it’s up to Europe to sort it all out.
Eurozone creditors raise hopes of Greek bailout deal
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Those are the basics all Wise Folk agree on. Then those on the right go on to say feckless Greece must either accept Europe’s deal or get out of the single currency. Or if more liberal, they hem and haw, cough and splutter, before calling for Europe to show a little more charity to its southern basketcase. Whatever their solution, the Wise Folk agree on the problem: it’s not Brussels that’s at fault, it’s Athens. Oh, those turbulent Greeks! That’s the attitude you smell when the IMF’s Christine Lagarde decries the Syriza government for not being “adult” enough. That’s what licenses the German press to portray Greece’s finance minister, Yanis Varoufakis, as needing “psychiatric help”.
There’s just one problem with this story: like most morality tales, it shatters upon contact with hard reality. Athens is merely the worst outbreak of a much bigger disease within the euro project. Because the single currency isn’t working for ordinary Europeans, from the Ruhr valley to Rome.
On saying this, I don’t close my eyes to the endemic corruption and tax-dodging in Greece (nor indeed, does the outsiders’ movement Syriza, which came to power campaigning against just these vices). Nor am I about to don Farage-ist chalkstripes. My charge is much simpler: the euro project is not only failing to deliver on the promises of its originators, it’s doing the exact opposite – by eroding the living standards of ordinary Europeans. And as we’ll see, that’s true even for those living in the continent’s number one economy, Germany.
First, let’s remind ourselves of the noble pledges made for the euro project. Let’s play the grainy footage of Germany’s Helmut Schmidt and France’s Giscard d’Estaing, as they lay the foundations for Europe’s grand unifier. Most of all, let’s remind ourselves of what the true believers felt. Take this from Oskar Lafontaine, Germany’s minister of finance, on the very eve of the launch of the euro. He talked of “the vision of a united Europe, to be reached through the gradual convergence of living standards, the deepening of democracy, and the flowering of a truly European culture”.
We could quote a thousand other such stanzas of euro-poetry, but that single line from Lafontaine shows how far the single-currency project has fallen. Instead of raising living standards across Europe, monetary union is pushing them downwards. Rather than deepening democracy, it is undermining it. As for “a truly European culture”, when German journalists accuse Greek ministers of “psychosis”, that mythic agora of nations is a long way off.
Of all these three charges, the first is most important – because it explains how the entire union is being undermined. To see what’s happened to the living standards of ordinary Europeans, turn to some extraordinary research published this year by Heiner Flassbeck, former chief economist at the United Nations Conference on Trade and Development, and Costas Lapavitsas, an economics professor at Soas University of London turned Syriza MP.
In Against the Troika, the German and the Greek publish one chart that explodes the idea that the euro has raised living standards. What they look at is unit labour costs – how much you need to pay staff to make one unit of output: a widget, say, or a bit of software. And they map labour costs across the eurozone from 1999 to 2013. What they find is that German workers have barely seen wages rise for the 14-year stretch. In the short life of the euro, working Germans have fared worse than the French, Austrians, Italians and many across southern Europe.
Yes, we’re talking about the same Germany: the mightiest economy on the continent, the one even David Cameron regards with envy. Yet the people working there and making the country more prosperous have seen barely any reward for their efforts. And this is the model for a continent.
Perhaps you have an image of Deutschland as being a nation of highly skilled, highly rewarded workers in gleaming factories. That workforce and its unions still exist – but it’s shrinking fast. What’s replacing it, according to Germany’s leading expert on inequality, Gerhard Bosch, are crap jobs. The low-wage workforce has shot up and is now almost at US levels, he reckons.
Don’t blame this on the euro, but on the slow decline of German unions, and the trend of business towards outsourcing to cheaper eastern Europe. What the single currency has done is make Germany’s low-wage problems the ruin of an entire continent.
Workers in France, Italy, Spain and the rest of the eurozone are now being undercut by the epic wage freeze going on in the giant country in the middle. Flassbeck and Lapavitsas describe this as Germany’s “beggar thy neighbour” policy – “but only after beggaring its own people”.
In the last century, the other countries in the eurozone could have become more competitive by devaluing their national currencies – just as the UK has done since the banking meltdown. But now they’re all part of the same club, the only post-crash solution has been to pay workers less.
That is expressly what the European commission, the European Central Bank and the IMF are telling Greece: make workers redundant, pay those still in a job much less, and slash pensions for the elderly. But it’s not just in Greece. Nearly every meeting of the Wise Folk in Brussels and Strasbourg comes up with the same communique for “reform” of the labour market and social-security entitlements across the continent: a not-so-coded call for attacking ordinary people’s living standards.
This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets – and the two are increasingly incompatible. Germany’s Angela Merkel has shown no compunction about meddling in the democratic affairs of other European countries – tacitly warning Greeks against voting for Syriza for instance, or forcing the Spanish socialist prime minister, José Luis RodrÃguez Zapatero, to rip up the spending commitments that had won him an election.
The diplomatic beatings administered to Syriza since it came to power this year can only be seen as Europe trying to set an example to any Spanish voters who might be tempted to support its sister movement Podemos. Go too far left, runs the message, and you’ll get the same treatment.
Whatever the founding ideals of the eurozone, they don’t match up to the grim reality in 2015. This is Thatcher’s revolution, or Reagan’s – but now on a continental scale. And as then, it is accompanied by the idea that There Is No Alternative either to running an economy, or even to which kind of government voters get to choose.
The fact that this entire show is being brought in by agreeable-looking Wise Folk often claiming to be social democratic doesn’t render the project any nicer or gentler. It just lends the entire thing a nasty tang of hypocrisy.
Don’t blame this on the euro, but on the slow decline of German unions, and the trend of business towards outsourcing to cheaper eastern Europe. What the single currency has done is make Germany’s low-wage problems the ruin of an entire continent.
Workers in France, Italy, Spain and the rest of the eurozone are now being undercut by the epic wage freeze going on in the giant country in the middle. Flassbeck and Lapavitsas describe this as Germany’s “beggar thy neighbour” policy – “but only after beggaring its own people”.
In the last century, the other countries in the eurozone could have become more competitive by devaluing their national currencies – just as the UK has done since the banking meltdown. But now they’re all part of the same club, the only post-crash solution has been to pay workers less.
That is expressly what the European commission, the European Central Bank and the IMF are telling Greece: make workers redundant, pay those still in a job much less, and slash pensions for the elderly. But it’s not just in Greece. Nearly every meeting of the Wise Folk in Brussels and Strasbourg comes up with the same communique for “reform” of the labour market and social-security entitlements across the continent: a not-so-coded call for attacking ordinary people’s living standards.
This is what the noble European project is turning into: a grim march to the bottom. This isn’t about creating a deeper democracy, but deeper markets – and the two are increasingly incompatible. Germany’s Angela Merkel has shown no compunction about meddling in the democratic affairs of other European countries – tacitly warning Greeks against voting for Syriza for instance, or forcing the Spanish socialist prime minister, José Luis RodrÃguez Zapatero, to rip up the spending commitments that had won him an election.
The diplomatic beatings administered to Syriza since it came to power this year can only be seen as Europe trying to set an example to any Spanish voters who might be tempted to support its sister movement Podemos. Go too far left, runs the message, and you’ll get the same treatment.
Whatever the founding ideals of the eurozone, they don’t match up to the grim reality in 2015. This is Thatcher’s revolution, or Reagan’s – but now on a continental scale. And as then, it is accompanied by the idea that There Is No Alternative either to running an economy, or even to which kind of government voters get to choose.
The fact that this entire show is being brought in by agreeable-looking Wise Folk often claiming to be social democratic doesn’t render the project any nicer or gentler. It just lends the entire thing a nasty tang of hypocrisy.
Thursday, 7 May 2015
How friendship became a tool of the powerful
William Davies in The Guardian
Imagine walking into a coffee shop, ordering a cappuccino, and then, to your surprise, being informed that it has already been paid for. Where did this unexpected gift come from? It transpires that it was left by the previous customer. The only snag, if indeed it is a snag, is that you now have to do the same for the next customer who walks in.
This is known as a “pay-it-forward” pricing scheme. It is something that has been practised by a number of small businesses in California, such as the Karma Kitchen in Berkeley and, in some cases, customers have introduced it spontaneously. On the face of it, it would seem to defy the logic of free-market economics. Markets, surely, are places where we are allowed, even expected, to behave selfishly. With its hippy idealism, pay-it-forward would appear to go against the core tenets of economic calculation.
But there is more to it than this. Researchers from the decision science research group at the University of California, Berkeley have looked closely at pay-it-forward pricing and discovered something with profound implications for how markets and businesses work. It transpires that people will generally pay more under the pay-it-forward model than under a conventional pricing system. As the study’s lead author, Minah Jung, puts it: “People don’t want to look cheap. They want to be fair, but they also want to fit in with the social norms.” Contrary to what economists have long assumed, altruism can often exert a far stronger influence over our decision-making than calculation.
Such findings are typical of the field of behavioural economics, which emerged in the late 1970s. Like regular economists, behavioural economists assume that individuals are usually motivated to maximise their own benefit – but not always. In certain circumstances, they are social and moral animals, even when this appears to undermine their economic interests. They follow the herd and act according to certain rules of thumb. They have some principles that they will not sacrifice for money at all.
It seems that this undermines the cynical, individualist theory of human psychology, which lies at the heart of orthodox economics. Could it be that we are decent, social creatures after all? A great deal of neuroscientific research into the roots of sympathy and reciprocity supports this. Optimists might view this as the basis for a new political hope, of a society in which sharing and gift-giving offer a serious challenge to the power of monetary accumulation and privatisation.
But there is also a more disturbing possibility: that the critique of individualism and monetary calculation is now being incorporated into the armoury of utilitarian policy and management. One of the key insights of behavioural economics is that, if one wants to control other human beings, it is often far more effective to appeal to their sense of morality and social identity than to their self-interest.
This is symptomatic of a more general shift in policy and business practices today. Across various fields of expertise, from healthcare to marketing, from military training to finance, there is rising hope that strategic goals can be achieved through harnessing the power of the “social”. But what exactly does this mean? As the era of social democracy recedes further into the past, the meaning of the term is undergoing a profound transformation. Where once the term implied something concerning society or the common good, increasingly it refers to a technique of psychological intervention on the individual. Informal social connections and friendships are being rendered more visible and measurable. In the process, they are being turned into possible instruments of power.
Using the social to make money
Over recent years, generosity has become big business. In 2009, Chris Anderson, former editor of Wired magazine, published Free: The Future of a Radical Price. Anderson argued that there was now a strong business case for giving products and services away for free, in order to forge better relationships with customers. Giving things away for free becomes a means of holding an audience captive or building a reputation, which can then be exploited with future sales or advertising. Michael O’Leary, boss of Ryanair, has even suggested that airline tickets might one day be priced at zero, with all costs recovered through additional charges for luggage, using the bathroom, skipping queues, and so on.
What Anderson was highlighting was the potential of non-monetary relationships to increase profits. And just as corporate giving can be used as a way of boosting revenue, so can the magic words that are used in return. Marketing specialists now analyse the optimal way of saying the words “thank you” to a customer, so as to deepen the social relationship with them.
The language of gratitude has infiltrated a number of high-profile advertising campaigns. Around Christmas 2013, Lloyds TSB, one of the British banks to bemost embarrassed by the 2008 financial crisis, launched a campaign consisting entirely of cutesy images of childhood friends enjoying happy moments together, concluding with the words “thank you”, written in party balloons. There was no mention of money. More bizarrely, Tesco, whose brand has suffered in recent years, released a series of YouTube videos in 2013 with men in Christmas jumpers singing “thank you” to everyone from the person who cooks Christmas dinner, to those driving safely, to other companies such as Instagram and so on. Tesco, it was implied, sprays gratitude in all directions, regardless of its own private interests.
There is inevitably a limit to how much of a social bond an individual can have with a multinational company. Businesses today are obsessed with being social, but what they typically mean by this is that they are able to permeate peer-to-peer social networks as effectively as possible. Brands hope to play a role in cementing friendships, as a guarantee that they will not be abandoned for more narrowly calculated reasons. So, for example, Coca-Cola has tried a number of somewhat twee marketing campaigns, such as putting individual names (“Sue”, “Tom”, etc) on their bottles as a way to encourage gift-giving. Managers hope that their employees will also act as “brand ambassadors” in their everyday social lives. Meanwhile, neuromarketers have begun studying how successfully images and advertisements trigger common neural responses in groups, rather than in isolated individuals. This, it seems, is a far better indication of how larger populations will respond to advertising.
All this – along with the rise of the “sharing economy”, exemplified by Airbnb and Uber, offers a simple lesson to big business. People will take more pleasure in buying things if the experience can be blended with something that feels like friendship and gift-exchange. The role of money must be airbrushed out of the picture wherever possible. As marketers see it, payment is one of the unfortunate “pain points” in any relationship with a customer, which requires anaesthetising with some form of more social experience. The market must be represented as something else entirely.
Digitising the social
Yet the greatest catalyst for the new business interest in being social is, unsurprisingly, the rise of social media. At the same time that behavioural economics has been highlighting the various ways in which we are altruistic creatures, social media offers businesses an opportunity to analyse and target that social behaviour. It allows advertising to be tailored to specific individuals, on the basis of who they know, and what those other people like and purchase. These practices, which are collectively referred to as “social analytics”, mean that tastes and behaviours can be traced in unprecedented detail. The end goal is no different from what it was at the dawn of marketing and management in the late 19th century: making money. What has changed is that each one of us is now viewed as an instrument through which to alter the attitudes and behaviours of our friends and contacts. Behaviours and ideas can be released like “contagions”, in the hope of infecting much larger networks.
FacebookTwitterPinterest Illustration by Pete Gamlen
The most valuable trick, from a marketing perspective, is how to induce individuals to share positive brand messages and adverts with each other, almost as if there were no public advertising campaign at all. The business practice known as “friendvertising” involves creating images and video clips that social media users are likely to share with others, for no conscious commercial purpose of their own. The science of viral marketing, or the creation of buzz, has led marketers to seek lessons from social psychology, social anthropology and social network analysis.
Businesses have long worried about their public reputations and the commitment of their employees. It also goes without saying that informal social networks themselves are as old as humanity. Despite the countercultural rhetoric of the “sharing economy”, what has changed is not the role of the social in capitalism, but the capacity to subject it to a detailed, quantitative, economic analysis, thanks primarily to the digitisation of social relationships.
In the longer term, the most profound cultural and ethical implications of this may be how we come to view ourselves and those around us. As data about social ties becomes easier to collect and access, and as concepts of duty and altruism become increasingly understood by economists (as the pay-it-forward study exemplifies), the temptation to ask self-interested, strategic questions about one’s own social circle will arise. Applying the mentality of cost-benefit analysis beyond the realms of the market is often controversial to start with, but can quickly become normal. Government economists today have no problem calculating the price of human life or the natural environment, if it is useful for purposes of policy appraisal.
Could we come to view our own personal acts of generosity and friendship in a similarly utilitarian sense? The evidence to support such an egocentric logic is growing rapidly. The area where there could be most to gain from such calculations is in the domain of health: social contact is good for us, in both body and mind. Just be sure that it is contact with the right people.
Using the social to improve health
In February 2010, I found myself sitting in a large hall, with a huge golden throne on my left, and the future leader of the Labour party, Ed Miliband, to my right. We were watching images on a screen that reminded me of the fractal videos that used to be sold by “herbal remedy” salesmen on Camden market in London in the early 1990s. Also present were a number of government policy advisers, all straining to appear as relaxed as possible – a status game that goes on in the corridors of power, played to indicate that one is at home there. (The game was won under the coalition government by David Cameron’s former adviser, Steve Hilton, who was notorious for wandering into meetings barefoot.)
There were about 10 of us in the room, one of the more baroque offices in the Cabinet Office, and we were all staring at the screen, transfixed by the movement of individual lines and dots that were being displayed. Standing next to the screen, clearly enjoying the impact that his video was having on this influential audience, was the American medical sociologist Nicholas Christakis. Christakis was on a speaking tour, promoting his book Connected, and had been invited to present some of his findings to British policymakers during the dying days of Gordon Brown’s government. As a sociologist with an interest in policy, I had been invited along.
Christakis is an unusual sociologist. Not only is he far more mathematically adept than most, but he has also published a number of articles in respected medical journals. The images we were watching on the screen that day represented social networks in a Baltimore neighbourhood, within which particular “behaviours” and medical symptoms were moving around. Christakis’s message to the assembled policymakers was a powerful one. Problems such as obesity, poverty and depression, which so often coincide, locking people into chronic conditions of inactivity, are contagious. They move around like viruses in social networks, creating risks to individuals purely by virtue of the people they happen to hang out with.
FacebookTwitterPinterest Illustration by Pete Gamlen
Christakis is part of a growing movement within the policy world. While marketers desperately seek to penetrate our social networks in order to alter our tastes and desires, policymakers have come to view social networks as means of improving our health and wellbeing. The “social neuroscience” pioneered by John Cacioppo of the University of Chicago suggests that the human brain has evolved in such a way as to depend on social relationships. Cacioppo’s research suggests that loneliness is an even greater health risk than smoking. Practices such as “social prescribing”, in which doctors recommend that individuals join a choir or voluntary organisation, are aimed at combating isolation and its tendency to lead to depression and chronic illness.
Driven particularly by neuroscience, the expert understanding of social life and morality is rapidly merging into the study of the body. One social neuroscientist, Matt Lieberman, has shown how pains that we have traditionally treated as emotional (such as separating from a lover) involve the same neurochemical processes as those we typically view as physical (such as breaking an arm). Social science and physiology are converging into a new discipline, in which human bodies are studied for the ways they respond to one another physically.
At the Cabinet Office presentation, there was something mesmeric and seductive about Christakis’s images. Could entrenched social problems really be represented by graphics of this sort? Christakis’s technical prowess was certainly alluring. In the grand tradition of American GIs bringing chewing gum and nylon stockings to the British during the second world war, his hi-tech social network analysis seemed novel and irresistible.
But what I found slightly surreal that day, aside from the gold throne, was the freakish view of this particular inner-city US community that we were privy to. Like the social analytics companies, which try to spot consumer behaviour as it emerges and spreads, there we were in London observing how the dietary habits and health problems of a few thousand relatively deprived Baltimore residents were moving around, like a disease. It felt as if we were viewing an ant colony from above. The fact that these flickering images represented human beings, with relationships, histories and agendas, was almost incidental.
It would seem a little perverse to suggest that policymakers ignore this evidence of the impact of social networks and altruism on health. If medical practitioners can change the behaviour of just a few influential people in a network for the better, they can potentially spread a more positive “contagion”. Yet there is a danger lurking in this worldview, which is the same problem that afflicts all forms of social network analysis. In reducing the social world to a set of mechanisms and resources, the question repeatedly arises as to whether social networks might be redesigned in ways to suit the already privileged. Networks have a tendency towards what are called power laws, whereby those with influence are able to harness that power to win even greater influence.
One example of this is known as “emotional contagion”. Psychologists working with social analytics can now track the spread of positive and negative emotions, as they travel through social networks. This was the topic of Facebook’s controversial experiment using newsfeed manipulation, the results of which were published last summer. Different moods, including anger and depression, are now recognised to be more socially contagious than others. But what will we do with this knowledge? The anxiety, as social life becomes swept up by quantitative analysis, is that happy, healthy individuals might tailor their social relationships in ways that protect them against the “risk” of unhappiness. Guy Winch, an American psychologist who has studied this phenomenon, advises happy people to be on their guard. “If you find yourself living with or around people with negative outlooks,” he wrote on the website Psychology Today, “consider balancing out your friend roster.” The impact of this rebalancing on those unfortunate friends with the “negative outlooks” is all too easy to imagine.
The fabric of social life is now a problem that is addressed within the rubric of health policy, and there is something a little sad about that. Loneliness now appears as an objective problem, but only because it shows up in the physical brain and body, with calculable costs for governments and health insurers. Generosity and gratitude are urged upon people by positive psychologists, but mainly to alleviate their own mental health problems and private misery. And friendship ties within poor inner-city neighbourhoods have become a topic of government concern, but only to the extent that they mediate epidemics of bad nutrition and costly inactivity.
The irony is that, for all the talk of giving and sharing, this is potentially an even more egocentric worldview than that associated with the market. The cornerstone of orthodox economics, dating back to Adam Smith, is that self-interest in the marketplace is ultimately beneficial for society. The era of social optimisation looks set to stand this claim upside down: being social in your everyday life is worth it, because it will ultimately deliver benefits back to you. The trouble is that our appetites for this new commodity can spiral out of control.
Addicted to contact
Over the past decade, the ubiquity of digital media – and social media in particular – has become a lightning rod for media hysteria. The internet or Facebook can be blamed for the fact that young people are increasingly narcissistic, unable to make commitments to one another or concentrate on anything that is not interactive, and so on. There is indeed some evidence to suggest that individuals who use social media compulsively are more egocentric, prone to exhibitionism and grandiose behaviour. But rather than treat the technology as some virus that has corrupted people psychologically and neurologically, it is worth standing back and reflecting on the broader cultural logic at work here.
What makes social media so compulsive, even addictive? It is the experience of social life, stripped of all its frustrations and obligations. People who cannot put down their smartphones are not engaging with images or gadgetry for the sake of it: they are desperately seeking some form of human interaction, but of a kind that does nothing to limit their personal, private autonomy.
FacebookTwitterPinterest Illustration by Pete Gamlen
What we witness, in the case of a social media addict, is only the more pathological element of a society that cannot conceive of relationships except in terms of the psychological pleasures that they produce. The person whose fingers twitch to check their Facebook page when they are supposed to be listening to their friend over a meal is a victim of a philosophy in which other people are only there to please, satisfy and affirm an individual ego from one moment to the next. This inevitably leads to vicious circles: once a social bond is stripped down to this impoverished psychological level, it becomes harder and harder to find the satisfaction that one wants. Viewing other people as instruments for one’s own pleasure represents a denial of the core ethical and emotional truths of friendship, love and generosity.
One grave shortcoming of this egocentric idea of the social is that none (or at least, vanishingly few) of us can ever constantly be the centre of attention, receiving praise. And so it also proves with Facebook. As an endless stream of exaggerated displays of positivity or success, Facebook often serves to make people feel worse about themselves and their own lives. The mathematics of networks means that most people will have fewer friends than average, while a small number of people will have far more than average. The tonic to this sense of inferiority is to make one’s own exaggerated displays of positivity or success, to seek the gaze of the other, thereby reinforcing a collective vicious circle. As positive psychologists are keen to stress, this inability to listen or empathise is a significant contributor to depression.
If wellbeing resides in discovering relationships that are less ego-oriented, less purely hedonistic, than those an individualistic society offers, then Facebook and similar forms of social media are rarely a recipe for happiness. It is true that there are specific uses of social media that lend themselves towards stronger, more fulfilling social relations. One group of positive psychologists has drawn on its own evidence of what types of social relations lead to greater happiness, to create a new social media platform, Happier, designed around expressions of gratitude and generosity, which are recognised to be critical ingredients of mental wellbeing.
What remains unquestioned by such efforts to redesign social networks for greater wellbeing is the underlying logic, which implies that relationships are there to be created, invested in and – potentially – abandoned, in pursuit of individual optimisation. The darker implication of strategically pursuing positive emotion via relationships is that the relationship is only as good as the psychic value that it delivers. “Friend rosters” may need to be “balanced”, if it turns out that one’s friends are not spreading enough pleasure or happiness.
Neoliberal socialism
Our society is excessively individualistic. Markets reduce everything to a question of individual calculation and selfishness. Unless we can recover the values associated with friendship and altruism, we will descend into a state of ennui.
These types of claims have animated various critiques of capitalism and markets for centuries. They have often provided the basis of arguments for reform, whether moderate attempts to restrain the reach of markets, or more wholesale demands to overhaul the capitalist system. Today, the same types of lament can be heard, but from some very different sources. Now, the gurus of marketing, behavioural economics, social media and management are first in line to attack the individualistic and materialist assumptions of the marketplace. But what they are offering instead is a marginally different theory of individual psychology and behaviour, in which the social is primarily an instrument for one’s own medical, emotional or monetary gain.
What we encounter in the current business, media and policy euphoria for being social is what might be called “neoliberal socialism”. Sharing is preferable to selling, so long as it does not interfere with the financial interests of dominant corporations. Appealing to people’s moral and altruistic sense becomes the best way of nudging them into line with agendas that they had no say over. Brands and behaviours can be unleashed as social contagions, without money ever changing hands. Empathy and relationships are celebrated, but only as particular habits that happy individuals have learned to practise. Everything that was once external to economic logic, such as friendship, is quietly brought within it.
How would one break out of this trap? The example of “social prescribing” by doctors is an enticing one. While it starts from a utilitarian premise, that individuals can improve their wellbeing through joining associations and working collaboratively, it also points towards the institutions to make this happen, and not simply more cognitive or behavioural tips. If people have become locked in themselves, gazing enviously at others, this poses questions that need institutional, political, collective answers. It cannot be alleviated simply with psychological appeals to the social, which can exacerbate the very problems they aim to alleviate, once combined with digital media and the egocentric model of connectivity those media facilitate. There is a crucial question of how businesses, markets, policies, laws and political participation might be designed differently to sustain meaningful social relationships, but it is virtually never confronted by the doyens of social capitalism.
It is not very long since the internet offered hope for different forms of organisation altogether. As the cultural and political theorist Jeremy Gilbert has argued, we should remember that it was only a few years ago that Rupert Murdoch’s media empire was completely defeated in its efforts to turn Myspace into a profitable entity. The tension between the logic of the open network and the logic of private investment could not be resolved, and Murdoch lost half a billion dollars. Facebook has had to go to great lengths to ensure that the same mistakes are not made – particularly by anchoring online identities in “real” offline identities, and tailoring its design around the interests of marketers and market researchers. Perhaps it is too early to say that it has succeeded.
The reduction of social life to psychology, or to physiology as achieved by social neuroscience, is not necessarily irreversible. Karl Marx believed that by bringing workers together in the factory and forcing them to work together, capitalism was creating the very class formation that would eventually overwhelm it. This was despite the “bourgeois ideology” that stressed the primacy of individuals transacting in a marketplace. Similarly, individuals today may be brought together for their own mental and physical health, or for their own private hedonistic kicks; but social congregations can develop their own logic, which is not reducible to that of individual wellbeing or pleasure. This is the hope that currently lies dormant in this new, neoliberal socialism.
Imagine walking into a coffee shop, ordering a cappuccino, and then, to your surprise, being informed that it has already been paid for. Where did this unexpected gift come from? It transpires that it was left by the previous customer. The only snag, if indeed it is a snag, is that you now have to do the same for the next customer who walks in.
This is known as a “pay-it-forward” pricing scheme. It is something that has been practised by a number of small businesses in California, such as the Karma Kitchen in Berkeley and, in some cases, customers have introduced it spontaneously. On the face of it, it would seem to defy the logic of free-market economics. Markets, surely, are places where we are allowed, even expected, to behave selfishly. With its hippy idealism, pay-it-forward would appear to go against the core tenets of economic calculation.
But there is more to it than this. Researchers from the decision science research group at the University of California, Berkeley have looked closely at pay-it-forward pricing and discovered something with profound implications for how markets and businesses work. It transpires that people will generally pay more under the pay-it-forward model than under a conventional pricing system. As the study’s lead author, Minah Jung, puts it: “People don’t want to look cheap. They want to be fair, but they also want to fit in with the social norms.” Contrary to what economists have long assumed, altruism can often exert a far stronger influence over our decision-making than calculation.
Such findings are typical of the field of behavioural economics, which emerged in the late 1970s. Like regular economists, behavioural economists assume that individuals are usually motivated to maximise their own benefit – but not always. In certain circumstances, they are social and moral animals, even when this appears to undermine their economic interests. They follow the herd and act according to certain rules of thumb. They have some principles that they will not sacrifice for money at all.
It seems that this undermines the cynical, individualist theory of human psychology, which lies at the heart of orthodox economics. Could it be that we are decent, social creatures after all? A great deal of neuroscientific research into the roots of sympathy and reciprocity supports this. Optimists might view this as the basis for a new political hope, of a society in which sharing and gift-giving offer a serious challenge to the power of monetary accumulation and privatisation.
But there is also a more disturbing possibility: that the critique of individualism and monetary calculation is now being incorporated into the armoury of utilitarian policy and management. One of the key insights of behavioural economics is that, if one wants to control other human beings, it is often far more effective to appeal to their sense of morality and social identity than to their self-interest.
This is symptomatic of a more general shift in policy and business practices today. Across various fields of expertise, from healthcare to marketing, from military training to finance, there is rising hope that strategic goals can be achieved through harnessing the power of the “social”. But what exactly does this mean? As the era of social democracy recedes further into the past, the meaning of the term is undergoing a profound transformation. Where once the term implied something concerning society or the common good, increasingly it refers to a technique of psychological intervention on the individual. Informal social connections and friendships are being rendered more visible and measurable. In the process, they are being turned into possible instruments of power.
Using the social to make money
Over recent years, generosity has become big business. In 2009, Chris Anderson, former editor of Wired magazine, published Free: The Future of a Radical Price. Anderson argued that there was now a strong business case for giving products and services away for free, in order to forge better relationships with customers. Giving things away for free becomes a means of holding an audience captive or building a reputation, which can then be exploited with future sales or advertising. Michael O’Leary, boss of Ryanair, has even suggested that airline tickets might one day be priced at zero, with all costs recovered through additional charges for luggage, using the bathroom, skipping queues, and so on.
What Anderson was highlighting was the potential of non-monetary relationships to increase profits. And just as corporate giving can be used as a way of boosting revenue, so can the magic words that are used in return. Marketing specialists now analyse the optimal way of saying the words “thank you” to a customer, so as to deepen the social relationship with them.
The language of gratitude has infiltrated a number of high-profile advertising campaigns. Around Christmas 2013, Lloyds TSB, one of the British banks to bemost embarrassed by the 2008 financial crisis, launched a campaign consisting entirely of cutesy images of childhood friends enjoying happy moments together, concluding with the words “thank you”, written in party balloons. There was no mention of money. More bizarrely, Tesco, whose brand has suffered in recent years, released a series of YouTube videos in 2013 with men in Christmas jumpers singing “thank you” to everyone from the person who cooks Christmas dinner, to those driving safely, to other companies such as Instagram and so on. Tesco, it was implied, sprays gratitude in all directions, regardless of its own private interests.
There is inevitably a limit to how much of a social bond an individual can have with a multinational company. Businesses today are obsessed with being social, but what they typically mean by this is that they are able to permeate peer-to-peer social networks as effectively as possible. Brands hope to play a role in cementing friendships, as a guarantee that they will not be abandoned for more narrowly calculated reasons. So, for example, Coca-Cola has tried a number of somewhat twee marketing campaigns, such as putting individual names (“Sue”, “Tom”, etc) on their bottles as a way to encourage gift-giving. Managers hope that their employees will also act as “brand ambassadors” in their everyday social lives. Meanwhile, neuromarketers have begun studying how successfully images and advertisements trigger common neural responses in groups, rather than in isolated individuals. This, it seems, is a far better indication of how larger populations will respond to advertising.
All this – along with the rise of the “sharing economy”, exemplified by Airbnb and Uber, offers a simple lesson to big business. People will take more pleasure in buying things if the experience can be blended with something that feels like friendship and gift-exchange. The role of money must be airbrushed out of the picture wherever possible. As marketers see it, payment is one of the unfortunate “pain points” in any relationship with a customer, which requires anaesthetising with some form of more social experience. The market must be represented as something else entirely.
Digitising the social
Yet the greatest catalyst for the new business interest in being social is, unsurprisingly, the rise of social media. At the same time that behavioural economics has been highlighting the various ways in which we are altruistic creatures, social media offers businesses an opportunity to analyse and target that social behaviour. It allows advertising to be tailored to specific individuals, on the basis of who they know, and what those other people like and purchase. These practices, which are collectively referred to as “social analytics”, mean that tastes and behaviours can be traced in unprecedented detail. The end goal is no different from what it was at the dawn of marketing and management in the late 19th century: making money. What has changed is that each one of us is now viewed as an instrument through which to alter the attitudes and behaviours of our friends and contacts. Behaviours and ideas can be released like “contagions”, in the hope of infecting much larger networks.
FacebookTwitterPinterest Illustration by Pete Gamlen
The most valuable trick, from a marketing perspective, is how to induce individuals to share positive brand messages and adverts with each other, almost as if there were no public advertising campaign at all. The business practice known as “friendvertising” involves creating images and video clips that social media users are likely to share with others, for no conscious commercial purpose of their own. The science of viral marketing, or the creation of buzz, has led marketers to seek lessons from social psychology, social anthropology and social network analysis.
Businesses have long worried about their public reputations and the commitment of their employees. It also goes without saying that informal social networks themselves are as old as humanity. Despite the countercultural rhetoric of the “sharing economy”, what has changed is not the role of the social in capitalism, but the capacity to subject it to a detailed, quantitative, economic analysis, thanks primarily to the digitisation of social relationships.
In the longer term, the most profound cultural and ethical implications of this may be how we come to view ourselves and those around us. As data about social ties becomes easier to collect and access, and as concepts of duty and altruism become increasingly understood by economists (as the pay-it-forward study exemplifies), the temptation to ask self-interested, strategic questions about one’s own social circle will arise. Applying the mentality of cost-benefit analysis beyond the realms of the market is often controversial to start with, but can quickly become normal. Government economists today have no problem calculating the price of human life or the natural environment, if it is useful for purposes of policy appraisal.
Could we come to view our own personal acts of generosity and friendship in a similarly utilitarian sense? The evidence to support such an egocentric logic is growing rapidly. The area where there could be most to gain from such calculations is in the domain of health: social contact is good for us, in both body and mind. Just be sure that it is contact with the right people.
Using the social to improve health
In February 2010, I found myself sitting in a large hall, with a huge golden throne on my left, and the future leader of the Labour party, Ed Miliband, to my right. We were watching images on a screen that reminded me of the fractal videos that used to be sold by “herbal remedy” salesmen on Camden market in London in the early 1990s. Also present were a number of government policy advisers, all straining to appear as relaxed as possible – a status game that goes on in the corridors of power, played to indicate that one is at home there. (The game was won under the coalition government by David Cameron’s former adviser, Steve Hilton, who was notorious for wandering into meetings barefoot.)
There were about 10 of us in the room, one of the more baroque offices in the Cabinet Office, and we were all staring at the screen, transfixed by the movement of individual lines and dots that were being displayed. Standing next to the screen, clearly enjoying the impact that his video was having on this influential audience, was the American medical sociologist Nicholas Christakis. Christakis was on a speaking tour, promoting his book Connected, and had been invited to present some of his findings to British policymakers during the dying days of Gordon Brown’s government. As a sociologist with an interest in policy, I had been invited along.
Christakis is an unusual sociologist. Not only is he far more mathematically adept than most, but he has also published a number of articles in respected medical journals. The images we were watching on the screen that day represented social networks in a Baltimore neighbourhood, within which particular “behaviours” and medical symptoms were moving around. Christakis’s message to the assembled policymakers was a powerful one. Problems such as obesity, poverty and depression, which so often coincide, locking people into chronic conditions of inactivity, are contagious. They move around like viruses in social networks, creating risks to individuals purely by virtue of the people they happen to hang out with.
FacebookTwitterPinterest Illustration by Pete Gamlen
Christakis is part of a growing movement within the policy world. While marketers desperately seek to penetrate our social networks in order to alter our tastes and desires, policymakers have come to view social networks as means of improving our health and wellbeing. The “social neuroscience” pioneered by John Cacioppo of the University of Chicago suggests that the human brain has evolved in such a way as to depend on social relationships. Cacioppo’s research suggests that loneliness is an even greater health risk than smoking. Practices such as “social prescribing”, in which doctors recommend that individuals join a choir or voluntary organisation, are aimed at combating isolation and its tendency to lead to depression and chronic illness.
Driven particularly by neuroscience, the expert understanding of social life and morality is rapidly merging into the study of the body. One social neuroscientist, Matt Lieberman, has shown how pains that we have traditionally treated as emotional (such as separating from a lover) involve the same neurochemical processes as those we typically view as physical (such as breaking an arm). Social science and physiology are converging into a new discipline, in which human bodies are studied for the ways they respond to one another physically.
At the Cabinet Office presentation, there was something mesmeric and seductive about Christakis’s images. Could entrenched social problems really be represented by graphics of this sort? Christakis’s technical prowess was certainly alluring. In the grand tradition of American GIs bringing chewing gum and nylon stockings to the British during the second world war, his hi-tech social network analysis seemed novel and irresistible.
But what I found slightly surreal that day, aside from the gold throne, was the freakish view of this particular inner-city US community that we were privy to. Like the social analytics companies, which try to spot consumer behaviour as it emerges and spreads, there we were in London observing how the dietary habits and health problems of a few thousand relatively deprived Baltimore residents were moving around, like a disease. It felt as if we were viewing an ant colony from above. The fact that these flickering images represented human beings, with relationships, histories and agendas, was almost incidental.
It would seem a little perverse to suggest that policymakers ignore this evidence of the impact of social networks and altruism on health. If medical practitioners can change the behaviour of just a few influential people in a network for the better, they can potentially spread a more positive “contagion”. Yet there is a danger lurking in this worldview, which is the same problem that afflicts all forms of social network analysis. In reducing the social world to a set of mechanisms and resources, the question repeatedly arises as to whether social networks might be redesigned in ways to suit the already privileged. Networks have a tendency towards what are called power laws, whereby those with influence are able to harness that power to win even greater influence.
One example of this is known as “emotional contagion”. Psychologists working with social analytics can now track the spread of positive and negative emotions, as they travel through social networks. This was the topic of Facebook’s controversial experiment using newsfeed manipulation, the results of which were published last summer. Different moods, including anger and depression, are now recognised to be more socially contagious than others. But what will we do with this knowledge? The anxiety, as social life becomes swept up by quantitative analysis, is that happy, healthy individuals might tailor their social relationships in ways that protect them against the “risk” of unhappiness. Guy Winch, an American psychologist who has studied this phenomenon, advises happy people to be on their guard. “If you find yourself living with or around people with negative outlooks,” he wrote on the website Psychology Today, “consider balancing out your friend roster.” The impact of this rebalancing on those unfortunate friends with the “negative outlooks” is all too easy to imagine.
The fabric of social life is now a problem that is addressed within the rubric of health policy, and there is something a little sad about that. Loneliness now appears as an objective problem, but only because it shows up in the physical brain and body, with calculable costs for governments and health insurers. Generosity and gratitude are urged upon people by positive psychologists, but mainly to alleviate their own mental health problems and private misery. And friendship ties within poor inner-city neighbourhoods have become a topic of government concern, but only to the extent that they mediate epidemics of bad nutrition and costly inactivity.
The irony is that, for all the talk of giving and sharing, this is potentially an even more egocentric worldview than that associated with the market. The cornerstone of orthodox economics, dating back to Adam Smith, is that self-interest in the marketplace is ultimately beneficial for society. The era of social optimisation looks set to stand this claim upside down: being social in your everyday life is worth it, because it will ultimately deliver benefits back to you. The trouble is that our appetites for this new commodity can spiral out of control.
Addicted to contact
Over the past decade, the ubiquity of digital media – and social media in particular – has become a lightning rod for media hysteria. The internet or Facebook can be blamed for the fact that young people are increasingly narcissistic, unable to make commitments to one another or concentrate on anything that is not interactive, and so on. There is indeed some evidence to suggest that individuals who use social media compulsively are more egocentric, prone to exhibitionism and grandiose behaviour. But rather than treat the technology as some virus that has corrupted people psychologically and neurologically, it is worth standing back and reflecting on the broader cultural logic at work here.
What makes social media so compulsive, even addictive? It is the experience of social life, stripped of all its frustrations and obligations. People who cannot put down their smartphones are not engaging with images or gadgetry for the sake of it: they are desperately seeking some form of human interaction, but of a kind that does nothing to limit their personal, private autonomy.
FacebookTwitterPinterest Illustration by Pete Gamlen
What we witness, in the case of a social media addict, is only the more pathological element of a society that cannot conceive of relationships except in terms of the psychological pleasures that they produce. The person whose fingers twitch to check their Facebook page when they are supposed to be listening to their friend over a meal is a victim of a philosophy in which other people are only there to please, satisfy and affirm an individual ego from one moment to the next. This inevitably leads to vicious circles: once a social bond is stripped down to this impoverished psychological level, it becomes harder and harder to find the satisfaction that one wants. Viewing other people as instruments for one’s own pleasure represents a denial of the core ethical and emotional truths of friendship, love and generosity.
One grave shortcoming of this egocentric idea of the social is that none (or at least, vanishingly few) of us can ever constantly be the centre of attention, receiving praise. And so it also proves with Facebook. As an endless stream of exaggerated displays of positivity or success, Facebook often serves to make people feel worse about themselves and their own lives. The mathematics of networks means that most people will have fewer friends than average, while a small number of people will have far more than average. The tonic to this sense of inferiority is to make one’s own exaggerated displays of positivity or success, to seek the gaze of the other, thereby reinforcing a collective vicious circle. As positive psychologists are keen to stress, this inability to listen or empathise is a significant contributor to depression.
If wellbeing resides in discovering relationships that are less ego-oriented, less purely hedonistic, than those an individualistic society offers, then Facebook and similar forms of social media are rarely a recipe for happiness. It is true that there are specific uses of social media that lend themselves towards stronger, more fulfilling social relations. One group of positive psychologists has drawn on its own evidence of what types of social relations lead to greater happiness, to create a new social media platform, Happier, designed around expressions of gratitude and generosity, which are recognised to be critical ingredients of mental wellbeing.
What remains unquestioned by such efforts to redesign social networks for greater wellbeing is the underlying logic, which implies that relationships are there to be created, invested in and – potentially – abandoned, in pursuit of individual optimisation. The darker implication of strategically pursuing positive emotion via relationships is that the relationship is only as good as the psychic value that it delivers. “Friend rosters” may need to be “balanced”, if it turns out that one’s friends are not spreading enough pleasure or happiness.
Neoliberal socialism
Our society is excessively individualistic. Markets reduce everything to a question of individual calculation and selfishness. Unless we can recover the values associated with friendship and altruism, we will descend into a state of ennui.
These types of claims have animated various critiques of capitalism and markets for centuries. They have often provided the basis of arguments for reform, whether moderate attempts to restrain the reach of markets, or more wholesale demands to overhaul the capitalist system. Today, the same types of lament can be heard, but from some very different sources. Now, the gurus of marketing, behavioural economics, social media and management are first in line to attack the individualistic and materialist assumptions of the marketplace. But what they are offering instead is a marginally different theory of individual psychology and behaviour, in which the social is primarily an instrument for one’s own medical, emotional or monetary gain.
What we encounter in the current business, media and policy euphoria for being social is what might be called “neoliberal socialism”. Sharing is preferable to selling, so long as it does not interfere with the financial interests of dominant corporations. Appealing to people’s moral and altruistic sense becomes the best way of nudging them into line with agendas that they had no say over. Brands and behaviours can be unleashed as social contagions, without money ever changing hands. Empathy and relationships are celebrated, but only as particular habits that happy individuals have learned to practise. Everything that was once external to economic logic, such as friendship, is quietly brought within it.
How would one break out of this trap? The example of “social prescribing” by doctors is an enticing one. While it starts from a utilitarian premise, that individuals can improve their wellbeing through joining associations and working collaboratively, it also points towards the institutions to make this happen, and not simply more cognitive or behavioural tips. If people have become locked in themselves, gazing enviously at others, this poses questions that need institutional, political, collective answers. It cannot be alleviated simply with psychological appeals to the social, which can exacerbate the very problems they aim to alleviate, once combined with digital media and the egocentric model of connectivity those media facilitate. There is a crucial question of how businesses, markets, policies, laws and political participation might be designed differently to sustain meaningful social relationships, but it is virtually never confronted by the doyens of social capitalism.
It is not very long since the internet offered hope for different forms of organisation altogether. As the cultural and political theorist Jeremy Gilbert has argued, we should remember that it was only a few years ago that Rupert Murdoch’s media empire was completely defeated in its efforts to turn Myspace into a profitable entity. The tension between the logic of the open network and the logic of private investment could not be resolved, and Murdoch lost half a billion dollars. Facebook has had to go to great lengths to ensure that the same mistakes are not made – particularly by anchoring online identities in “real” offline identities, and tailoring its design around the interests of marketers and market researchers. Perhaps it is too early to say that it has succeeded.
The reduction of social life to psychology, or to physiology as achieved by social neuroscience, is not necessarily irreversible. Karl Marx believed that by bringing workers together in the factory and forcing them to work together, capitalism was creating the very class formation that would eventually overwhelm it. This was despite the “bourgeois ideology” that stressed the primacy of individuals transacting in a marketplace. Similarly, individuals today may be brought together for their own mental and physical health, or for their own private hedonistic kicks; but social congregations can develop their own logic, which is not reducible to that of individual wellbeing or pleasure. This is the hope that currently lies dormant in this new, neoliberal socialism.
Tuesday, 23 December 2014
Why the bouncer is not essential to cricket
The death of Phillip Hughes was also the death of a certain kind of false, if sincere, innocence about the game. We are reminded that cricket balls can kill. So what should we do about bouncers?
The standard answer - unanimous, even, when it comes to the old pros who constitute the majority of those who write and talk about cricket, is: nothing. There is nothing to do. Keep calm and carry on. We must understand that what happened to Hughes was a tragic but freak accident (by the way, as Andy Bull wrote in the Guardian, such tragedies happen more often than we might unthinkingly assume). Be sad because it's a tragedy, but don't let it change anything because it was a freakish one.
Let one view stand for the rest. This is what Mark Richardson had to say:
Don't get me wrong. I don't want to see people getting seriously hurt and what happened to Phillip Hughes is just awful but what people have to accept is that this was such a freak occurrence and serious injury is still so rare that it does not in any way suggest cricket has a problem with the short ball at all. In fact, if cricket took away the bouncer, then we would have a problem. So let's mourn the loss of Phillip Hughes but not use it to grandstand unnecessarily.
I agree. Let's not grandstand unnecessarily. But let's also realise that this is a difficult question, and to dismiss the view that bouncers ought to be banned is itself unnecessary grandstanding, just from the opposite direction.
Let's first realise that there is a moral question here. When you run in and bowl a bouncer, you are (often, not always) aiming it at the batsman. If you're even halfway quick, you know - or after the death of Hughes you ought to, anyway - that you're doing something that carries a risk of causing death, a much greater risk than most other actions carried out while playing cricket.
It doesn't follow that you ought not to do it, or that you are to blame for doing it. What does follow is that you need a valid justification for doing it, and this is not provided by the trope that the bowler doesn't intend to hurt the batsman. Good for the bowler, but it still doesn't address the question of whether he's morally justified in imposing the risk of a very great harm on the batsman.
Now imposing a risk of a very great harm is not the same as imposing a great risk of harm. For instance, each time you fly, you run a tiny risk of a very great harm, while if you gently lob a pebble at someone from a few metres away, you impose a very big risk of a very small harm.
We seem comfortable with the former. Driving, for example, kills hundreds of thousands of people every year, but we do not believe that it should be banned. Why not? Because of roughly these two reasons: first, we believe that the benefits of the practice of driving outweigh the harm of the tragedies it causes; second, we believe that the risk of causing those harms is to some extent unavoidable. We try to minimise those risks, but we accept that given current technology we cannot eliminate them, and we accept them because of the value to us of being able to drive.
And this has been roughly the argument when it comes to bouncers. People outline its benefits: it's thrilling (which Test cricket needs to stay alive), it maintains the balance between bat and ball, it's a test of courage and thereby reveals character (men from boys and all that), it is part of the tradition of the game.
We can accept all of that, for the sake of the argument. But even after we do, we haven't justified the use of bouncers because there is one crucial difference between the practices of driving and of bowling bouncers.
For the justification of driving, it's crucial that its benefits can't be realised without running the accompanying risks. If they could, there would be absolutely no justification left for running those risks.
The bouncer does indeed create benefits. But it does not seem indispensable to creating them. Tradition is not justification, and even if it were, our traditions are mostly the innovations of an earlier time. Eliminating the bouncer would end a tradition, but it would simply be part of the story of the evolution of cricket, and many other traditions would remain. And if you want thrilling Test cricket and a competitive balance between bat and ball, you can achieve both by the simple expedient of making pitches better.
Eliminating the bouncer would end a tradition, but it would simply be part of the story of the evolution of cricket, and many other traditions would remain
One way of doing this would be, of course, to make pitches bouncier, which would increase the risk of inflicting harm, and this might seem to contradict my argument. To quote Mill, via Kipling, "nay, nay, not so, but far otherwise". First, leaving grass on, and allowing pitches to take spin, both make pitches more competitive without necessarily imparting greater bounce. Second, a bouncy pitch would certainly make it more likely that harm will be inflicted, but it's short-pitched bowling that would make it more likely to inflict great harm. And my argument is in part to do with proportionality. I'm not saying take the risk of harm out of the game, I'm saying (well, I will be shortly) that I can't see a good argument from risk vs benefit for imposing the great risks of bowling bouncers.
Make boundaries bigger while you're at it. As for courage and revealing character, well, there are any number of ways cricket does that without the bouncer. Sacrificing your wicket, playing in an unnatural style, bowling into the wind, your response to defeat and victory and misfortune - all these things reveal character. Facing spin on turning pitches is a test of courage, of confronting the fear of looking stupid. Calling for a crucial catch, standing under a ball that steeples high into the air and on which the fate of the game depends - this requires courage.
Ah, but the bouncer is special, people will say, because it's about physical courage. I agree with the latter but disagree with the former. A game with a hard ball travelling at speed will necessarily test physical courage. A game that requires the kind of unnatural exertion demanded of fast bowlers will necessarily test physical courage. A game that people play with niggling injuries, with broken fingers and torn hamstrings, as with in Michael Clarke's case basically no back - this game will test physical courage.
Some may have the intellectual honesty here to go the extreme position. The bouncer is special, they will say, because it tests - especially now, after the death of Hughes - the fear of death. And this testing creates benefits that nothing else can.
But even this, sadly, isn't true. It is not special in carrying the risk of death. To take the most recent example, think of the Israeli umpire who died because of a shot that ricocheted off the stumps. Simply by virtue of the hard ball, and the speeds at which it can be thrown and struck, cricket will always intrinsically carry the risk of causing death. People can die without bouncers being bowled. So even if you maintain that the fear of death is an essential part of cricket, you don't need bouncers to do it.
The point is not that we must make the game riskless. The only way this could even be attempted to be done is to make the ball soft. This would indeed destroy cricket. The point is that we must aim to reduce unnecessary risks. What are unnecessary risks? Well, a pretty good example is something which is not essential to creating the benefits associated with it, and something which directly increases the risk of deaths on the cricket field.
The bouncer.
I love the bouncer. It's electrifying, both to play and to watch. Atherton v Donald, Morkel v Clarke, Johnson 2.0 (or 3 or 4 or 7.7, new Mitch, moustachioed Mitch) v everyone. Who doesn't want to see that?
But I can't see an argument from the morality of risk that justifies it. I can see one other possibility, an argument from, roughly, the value of self-realisation. But reasons of space mean that will have to be the topic of a separate piece.
Tuesday, 16 December 2014
Captain Cook and loyalty in sport
Simon Barnes in Cricinfo
If England want to reach the World Cup quarter-finals, they are more likely to do it without Cook, but dropping him would be disloyal © Getty Images
Loyalty is seen as one of sport's cardinal virtues - even though calculated disloyalty is sometimes a shatteringly effective tactic. Take Jimmy Greaves. A great footballer, but the England manager Alf Ramsey showed him no loyalty and dropped him in the course of the World Cup of 1966, preferring Geoff Hurst. Hurst scored a hat-trick in the final, Greaves became an alcoholic.
Yet there are times when loyalty counts. During that same tournament, so dear to the English mind, there were calls from British politicians to drop Nobby Stiles because of his "dirty" play - and people in the Football Association thought they had a point. But Ramsey said he'd resign if ordered to drop Stiles. Stiles stayed, was destructive and brilliant, and England won the tournament.
Loyalty, then, is an equivocal thing, in sport as in anything else. Loyalty isn't a virtue plain and simple: it depends on what - and whom - you are loyal to. Liverpool Football Club made a great show of their loyalty to their forward Luis Suarez when he was accused of racism. Suarez was found guilty and Liverpool's loyalty looked like self-serving parochialism.
Indian cricket remained loyal to Sachin Tendulkar and indulged him right to the end. Would it have been wiser, kinder, more dignified to have moved him on while he had that gloriously imperfect - and Bradmanesque - 99 international centuries to his name? Instead of waiting until he had scored his 100th, inevitably in a losing cause against Bangladesh? In the last couple of seasons Tendulkar lost some of his poetry.
This year English cricket has been all about loyalty. I'm not saying this as a fanciful observer: loyalty was the agenda set by those who run the English game. It's as if they had determined that cricket should become a morality play, one in which the good end happily and the bad unhappily.
But they haven't. Good and bad look equally unhappy.
Perhaps they thought that loyalty was a simple issue. If so, they have been sadly disabused. Poor old Alastair Cook: it was never his ambition to be a symbol of righteousness. He just wanted to play cricket and score runs, and for a while he was immensely good at it.
| Be very careful before you get moral in public. Especially in sport. Runs are not the reward for good behaviour. Nasty men can also score centuries | |||
But they forced him into the role of Captain Loyal: compare and contrast with Kevin Pietersen, Batsman Vile. Pietersen was sacked for various crimes of disloyalty, despite being England's top scorer in their disastrous tour of Australia last winter.
They couldn't just drop him: they wanted Pietersen publicly disgraced. Accordingly, they staked everything on Cook as Pietersen's antithesis: hero to Pietersen's antihero; quiet, composed and decent where Pietersen is loud, rude and self-advertising; generous and team-minded where Pietersen is self-obsessed; above all loyal where Pietersen is disloyal.
A lot of that is a pretty good fit, but this is sport, not politics, and in sport you can't get by on bluster and good intentions. Cook is a batsman and a batsman needs runs. Cook at his best is one of the most certain players who ever took guard. But the traumas of the winter made that certainty a thing of shreds and patches.
He began to rebuild his life post Ashes, post KP. He was greatly helped by India's feeble performance in last summer's Test series, but now, as cricket gets ready for the World Cup early next year, the question of loyalty crops up once again.
For Cook is having a disastrous series against Sri Lanka. England haven't a clue about 50-over cricket, never have; beneath their dignity, I suppose. Cook's attempts to be a one-day batsman mix Dad-dancing embarrassment with Candide-like naiveté. And he has scored no runs.
So England are in a difficult situation. When does it become appropriate to be disloyal to Captain Loyal? Ex-players are saying it's time he was dropped as both captain and player from the one-day team. The most intriguing argument, from the Guardian's Mike Selvey, is that his scrappy one-day batting has removed the certainty from his Test match play.
The irrefragable fact is that Cook is not good enough as either batsman or captain in the 50-over game. If England want to put on a respectable show at the World Cup - i.e. reach the quarter-finals - they are more likely to do it without Cook. But dropping him would be rather disloyal, and this is a team that is flamboyantly built on loyalty.
Eoin Morgan, Cook's likely replacement, is in equally poor batting form © Getty Images
Naturally the players are showing public loyalty to Cook: strong man, difficult patch, got the character to pull through etc etc. But that's their job; they are not going to say: Well, Cookie's struggling, I think I ought to do the job instead.
In sport, as in politics, looking loyal is the default position.
The selectors are now wondering about the cost of public disloyalty. So here's some advice: don't do it unless you have a plausible alternative. Don't drop Bradley Wiggins as your main man in the Tour de France unless you have Chris Froome already in the team. Team Sky were bold enough to risk such disloyalty, and that's how they won the event in 2012 and then 2013.
And here's some more advice. Pity it comes too late, really: be very careful before you get moral in public. Especially in sport. You have to accept that runs are not the reward for good behaviour. And that nasty men can also score centuries. It's also true that a person whose nature is fundamentally disloyal can do a fine job for a team. There's something offensive about the very idea but every team that has even known success has experienced it to some degree. Certainly England have.
But if not Cook, who? Eoin Morgan is the obvious choice, but he can't buy a run either and looks like a busted flush. No point in being publicly disloyal to Captain Loyal - and finding yourself even worse off. So here's the moral: sport may be a minefield but it's not half as explosive as morality.
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