Alex's Archives Bitesize

Tony Atkinson makes the case for rediscovery at the start of his book Inequality:

Yesterday in Hay-on-Wye I acquired a copy of Jo Grimond’s 1963 book “The Liberal Challenge”. I’ve read snippets of it before, but I’ve never attempted to read the whole thing.

I was very taken with the following passage (pp.25-26), which is probably even more relevant now than it was then:

As a Liberal Democrat, I'm supposed to be against the House of Lords in its current form. As a matter of principle. And I should be most especially against bishops in the House of Lords.

At one level, I am. I don't think that the sort of patronage exercised in sending people to the Lords is healthy for a democracy. I don't think the way that the parties appear to be forever multiplying the number of peers to try to gain advantage is sensible or sustainable.

But, at another level, I'm not so sure. As I've discussed on my blog more than once, most recently today, members of the House of Lords have made some telling interventions in policy debates. For every tale of expenses abuse by an occupant of the red benches, for every evident conflict of interest that comes to light, and for every episode of demonstrable disconnection from reality as it imposes itself on most of us, there is, in contrast, a display of wisdom, compassion and insight into the problems facing our country and its citizens that outshines anything on offer in the Commons.

Turning the Lords into a replica of the Commons, as it currently operates, would make our democratic system more dumb and dysfunctional than it already is.

At the Evening Standard today @amolrajan provides a pithy summary:

Earlier this week, on the UN Day of Disabled People, Habinteg published a report examining the impact of the Coalition's benefit cuts on their tenants. There was a particular concern to investigate whether policy is undermining the possibility of independent living.

This evidence suggests that disabled people are being hit hardest by the cumulative impact of welfare reform. 

In today's Observer Andrew Rawnsley has an interesting piece about privatisation, in the wake of the Royal Mail sell off.

He notes that you can explain the Tories' enthusiasm for the sell off as a bid to out-Thatcher Thatcher. But that clearly doesn't carry over to the Liberal Democrats.

He then writes the following:

The enthusiasm of Vince Cable and the Lib Dems is harder to fathom. This will seem counterintuitive to anyone who is not a Lib Dem minister, but for them this was also a political virility test. They believe that they burnish their credentials as a party of government by doing things that most of the public say they hate.

If that is anywhere near the vicinity of the truth then that is one of the most dispiriting things I've read today.

I don’t think anyone can be against the idea that the evidence base used to influence policy should be high quality and robust. Poor quality research should not be given undue influence. The question then is how that assessment of quality is made and by whom.

All scientific knowledge is provisional. We may have plenty of corroborating evidence in favour of a particular position, enough to draw conclusions with a degree of confidence, but never certainty. I don't think there should be any disagreement about that. The disagreement comes over the degree of confidence that would justify action and the type of action it justifies.

I don’t disagree with what I think is your main point, which is that it is important to look at costs and benefits and to think about substitution effects when assessing the desirability of intervention. However, once we’ve done that to the best of our ability we might well conclude intervention is justified. The question then is how we assess how well we’ve accounted for everything. If, on the other hand, we were to apply a standard to the measurement of costs, benefits and substitution effects that was so stringent that it meant they were never acceptably measured, and therefore no intervention could ever be justified on the basis of ‘evidence’, we might as well drop the pretence that we're trying.

You ask ‘does anyone think preferences are fixed?’. My answer is pretty much the whole of post-Samuelsonian microeconomics, which dominated the field until relatively recently, and still dominates much economics education. This would include some of the most fundamental theoretical results in welfare economics. It would include most of conventional cost-benefit analysis, including some of the key valuation techniques for intangibles. You don’t have to say that you are assuming fixed preferences, but if you invoke arguments making use of those sorts of ideas/methods then the assumption is implicit. In the last decade or two microeconomics has become much more comfortable with ideas such as peer-group effects, references levels, multiple-equilibria, and the use of techniques like evolutionary game theory. These types of approaches can encompass preferences being endogenously determined and they can deliver very different results to those derived from conventional microeconomic analysis. They can also place a question mark over the use of standard techniques (eg. if well-being depends on relative rather than/as well as absolute consumption then standard cost-benefit analysis becomes problematic).

Much of the move to consider reference levels, rank effects, peer groups etc originates in the behavioural economics literature. The literature also points to phenomena such as time-inconsistent preferences, loss aversion, inconsistencies/”irrationalities” in discounting, differences between decision utility and realised utility. These are all relevant to the question of how best to assess utility/well-being.

I didn’t say that your arguments were superficial, but that your engagement with the various policy areas you discuss is relatively superficial. Your arguments may well be logically sound and fully justified in relation to the material you cover. But your discussion of each policy area is not heavily embedded in the various literatures – or at least not explicitly; your publication typically focuses upon only one or two example references in each policy area. It may be that you are taking these as exemplars and that knocking those down means the whole edifice tumbles. I’m not sure that works. To draw robust conclusions about the current state of knowledge in a complex field would need much closer engagement. And to dismiss large bodies of literature on the basis of an a priori application of a very particular understanding of what constitutes ‘proper’ science would be a controversial move.

Your counter-arguments in a number of cases rely on thought experiments rather than a weight of contrary empirical evidence. The unwary reader might take these experiments as carrying the day, but that would be imprudent. For example, you are clearly a strong believer in bargaining solutions to social problems. Coase’s point was that these can work at small-scale with no transaction costs and equality of arms. But in situations where those conditions don’t hold bargaining solutions become problematic/impossible. The reader may miss that if they don’t know that particular literature at all. It is an important piece of the jigsaw they need in order to appraise the plausibility of proposed solutions of whatever type.

Your critique of evidence-based policy making focuses on a selection of examples in a selection of policy areas. Whether or not that critique is valid it can hardly count as a critique of the reasoning behind “much” evidence-based policy, unless the case is made that the sample of areas considered is representative of 'policy' generally.

The thesis that your publication could be part of a move to question academic independence, which is advanced briefly in the original post but not argued through at any length, has little to do with its content or, to be honest, with authorial intent. Once it is in the public domain the publication - any publication - takes on a life of its own. It could be represented in all sorts of ways, including as an argument to government that they shouldn’t listen to academics because they are all ‘self-interested’ and an elite trying to foist their ideas on to government against the wishes of the public. Few will read the report itself to find out whether that is what it actually says. That process can be seen to some extent in the press release which accompanied the report: it simplifies the argument, cuts out all the nuance, and strikes a different, more negative, tone than the report itself.

I came across this again today:

Nothing is esteemed except money, nothing accounted except a banking account. Quality, education, civic distinction, public virtue, are valued less and less. We have in London an important section of people who go about preaching the gospel of Mammon advocating the 10 per cent commandments - who raise each day the inspiring prayer "Give cash in our time, O Lord".

Earlier I was reading today's speech by Nick Clegg and thinking about what I might blog in response. This evening I re-encountered the following quote, which seems apposite, not to Clegg particularly, but to the whole business of political blogging in general. It's from the Acknowledgements (p.vi) in Constructing the political spectacle by Murray Edelman (1988):

Today, for the first time in a long time, I came across Oliver Cromwell's speech on the dissolution of the Long Parliament in 1653. Its contemporary resonance is evident. Its sentiment is no doubt shared by many contemporary observers of our political scene. I'm not saying that I'd advocate a Cromwellian approach to the issue. But, if nothing else, the rhetoric and oratory are marvellous: