If I Wanted Your Opinion, I'd Have Told You What It Was

All forms of government are failures to some extent. In ten thousand years of experimentation we have yet to come up with the 'definitive' system for running a community. The size of the community has changed, the technology, the language, the ethics have all changed, and still we have the same kind of problems. So, why do the various -'ocracies fail, and what is wrong with our current model?
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 Any system of government has certain underlying assumptions about the state of the world and the people in it. The system is then effective to the extent that those assumptions hold true when compared to the real world.
 

Monarchy generally makes the assumption that due to some quirk of fate, luck, birth, breeding or divine intervention the eldest son of the current monarch is the best person to run the country. In some instances throughout history this may even have been close to the truth and thus we get Augustus Caesar (author of the Pax Romana), the Holy Roman Emperor Joseph II (who tried to abolish slavery in 18th century) and so on. History has also given us some impressive failures. Either way though, this is far from a reliable source of long term rulership. 

Plutocracy (rule by the rich) makes the assumption that those successful in financial enterprise will be equal successful in political endeavours, oligarchy makes a similar assumption to monarchy, though allowing for a group rather then an individual, meritocracy (rule by the skilled, and the politically acceptable version of elitism) assumes it is possible to quantity and test for the aptitudes required to be a successful national leader. Each has problems when confronted with reality.

Thus we come to democracy - the current flavour of the month as far as global governments go. In the name of democracy the western world has embarked on some of the bloodiest conflicts in history, and then, its own affairs in order, we have begun to start wars elsewhere round the world in the sacred name of 'the people'. 

Before looking at any underlying assumptions a more specific context then simply 'democracy' needs to be established. We, in 21st century Britain, exist in what is alternatively called a constitutional monarchy or a representative democracy. I'm going to stick with the latter term since the former is something of a misnomer (we have neither a constitution nor a monarchy in the traditional sense of the term). 

For the sake of clarity the alternative type of democracy being discarded is 'direct democracy'. In a direct democracy decisions are made by the people without the use of intermediaries or elected officials. A group of survivors cut off from the rest of the world may function along the lines of a direct democracy - each member of the group having an equal say in the decisions made. In practise the size of modern communities has made direct democracy an effective impossibility - whether technology will one day deliver a solution to this remains to be seen, however, until it does this is as much a fairy tale style of government as the Artificial Intelligences of the Civilization games.

Given we are operating within a representative system, what then are our assumptions? (For the sake of this example and discussion I am going to assume the only decision made government is taxation and spending).

1. Voters (as individuals) have a rational and to some extent consistent opinion on how their government should raise and spend funds.
2. Voters (as individuals) will utilise their opinions (as established in assumption 1) when making voting decisions.
3. The community as a whole agrees to abide by the outcome of an election (though the exact method for determining the outcome may change - first past the post, proportional representation etc.)
4. The community as a whole agrees on the powers to be bestowed on the elected officials and to abide by the use of these powers within their proscribed limits.
5. Candidates will give fair representation to their intentions if elected, and will be to some extent consistent in these intentions if elected.
6. Voting power is consistent across group members.
7. Any individual is free to stand for election.
8. A member of the community would seek election if no existing candidate's intentions matched his own opinions.
9. No individual in the community will seek to influence the voting decision of another by methods deemed unreasonable by the community as a whole.
10. Once elected an official will not be subjected to pressure or influence to undertake an action, or make a decision, which would be contrary to his stated intentions prior to election.

I'm aware that this list is far from exhaustive, however, these seem to give a core around which a viable system of representative democracy could be established. If all of these assumptions held a vote would allow the people as a whole to choose one or more officials whose intentions are known and consistent to act within defined boundaries on behalf of the community. Victory in such an election would go to the candidate whose intentions are supported by a segment of the population pursuant to some agreed method of declaring victory. After the election all members of the community would then agree to abide by the decisions made by the elected officials and to support their decisions to the extent that they fall within the agreed scope of the official's mandate. 

Many of the assumptions above are not required for a democracy per sé but cause problems if removed (1, 2, 3, 4, 5, 7, 8), the other two are fundamentally required to prevent a democratic failure (defined as a situation in which a member of the population does not have any input into the ruling of his or her community). To illustrate this consider a removal of assumption 6. Without this there is nothing stopping one voter (or a group of voters) having sufficient voting power to outweigh the rest of the community combined - in this situation anyone aside from the 'super voter' effectively has no control over the outcome of an election. Removal of 9 effectively opens the door to a theory-sanctioned return to a "stickocracy" (rule by the people with the biggest stick).

Having established some semblance of what we would like to see in a representative democratic process, how does our current predicament in the UK match up? As far as I can tell the only assumption which holds (and even then with the odd blemish) is number 9. At present it is, largely, frowned upon for political parties to threaten violence to those who don't vote for them (though we do accept the main parties criminalising various opinions and thereby influencing the ability of people to vote for candidates or groups representing those opinions). 

But what assumptions do we seem to make in our actual political system?

1. The full spectrum of opinion is adequately expressed by a small handful of existing political institutions.
2. A refusal to vote is a tacit endorsement of the winner of an election (whoever that may be).
3. The election of officials is simply a proxy mechanism for the election of quasi-corporate institutions (political parties).
4. Elected officials are agents of political parties and their 'success' or 'failure' is therefore a function of the perceived success or failure of the party itself.
5. The mandate of an elected official is determined by elected officials (or the entity they represent).
6. Transpose 3 from above.

These all seem to hold when compared to real-world politics. Elections are largely determined by the media image of a party to which a politician belongs, rather then any kind of individual action by the candidates themselves. Elections are not invalidated by low voter turn out, and there is no significant backlash to the lack of political diversity offered by a system dominated by two to three main parties. 

One of the stated roles of parliament is to act as a legislative body, and in this respect the government is itself responsible for determining the role of government, this seems to be accepted without any question of the legitimacy of a 'representative' body deciding its own function. 

It is not the assumptions above we should be worried about though - it is the absence of some of the assumptions originally made in my model of representative democracy. We no longer expect political parties or their agents to abide by the commitments they made prior to election, we do not expect freedom of entry into the political arena and we don't require voting power to be equal.  In effect we are happy to be ruled for four years at a time by a small group of individuals who we do not hold to any standard of accountability or consistency, who are free to expand or contract their own mandate, and who are influenced, if not actively controlled, by the unelected officials of a profit/power driven organisation which is closed to outside influences, is stacked high with vested interests and to which we have happily handed to the keys to the gates of representation. 

If this does not conform to your idealised notions of democracy then I encourage you to close your eyes and truly consider what influence you have had on any policy decision taken by a ruling party in your lifetime. Allow me to use my own experiences as a guide;

Years 0-18:  Ineligible to vote, hence, no influence. (Note the imposition of a minimum voting age direct contradicts assumption 6 from my own list.)

Year 18-23: Happily there was an election within 6 months of me turning 18. The party I voted for lost (i.e. did not secure an overall majority).  Now, under the assumptions in both 'real world' representative democracy, and the 'ideal' version, I have now agreed to abide by the election of whichever candidate won for my area. Fair enough - however my elected official was neither cabinet minister nor swing voter. To the best of my knowledge they abided by any whips issued during their time acting as my representative. As such they were only free to act as my representative where this either made no difference, or was not contrary to the intentions of a political parties elite. 

Year 23-present: New elections are held, and this time my party wins! Surely now I've had some impact on the decision making process? Unfortunately not. The 'whip' issue still stands. My representative is only free to influence a vote to the extent that they either defy a whip, or their intended action conforms to the party line. 

This should hopefully illustrate one of the last two issues I want to discuss here. The first is 'whips' the second is the actual role of a representative. 

For those who don't know political parties issue 'whips' prior to parliamentary votes. This is an instruction from party headquarters on how an MP should vote. Whips comes in three flavours (1 line, 2 line and 3 line). A one line whip is an indication of what a party's general policies would dictate, it is not considered binding. On 'one line whip' issues you could consider your representative to actually act on your behalf, unfortunately these are also likely to be inconsequential or uncontested issues. 'Two line whips' are stricter, and can generally be considered binding. If an MP wants to abstain or vote against a two line whip they have to agree with the party in advance. In practice this means that voting against a two line whip delivered from a party with a majority is a token gesture; permission would only be granted where the required outcome is obtained even taking into account the defection of a given individual. In effect your representative has no reasonably exercisable influence over the outcome of a two line whip. "Three line whips" are strict orders on how to vote. Failure to do so generally brings significant reprisals to the individual (contravening 'ideal' assumption 10).   Ironically the status given to three line whips means that some influence is potentially returned to a representative if the issue at hand is sufficiently contentious. Defying a three line whip is often considered 'news worthy' and where the policy at hand is largely unpopular reprisals against those defying a whip to vote with the general consensus could invite a significant media backlash. (This actually leads on to another point - the dominance of the media in modern politics, but this is a matter for another time). 

Overall then my representatives have had remarkably little, to no, influence on the decisions taken by my government over the course of my life.To me this does not smack of a functioning democratic process. 

The final point I want to address is the actual role of a representative. This isn't immediately obvious, and isn't explicitly stated in either of the assumption sets above. We aren't going to change the problems of a political system dominated by corporate-media mega-parties any time soon (if you get hold of £130 million and would like to do something about this please let me know), however, we might, just, be able to do something about the ambiguity around the role of an elected representative. 

It seems to boil down to two possibilities;

A.  A representative is there to present the views and opinions of their election group to the best of his/her abilities, and irrespective of his/her own opinions or views should these differ. The success of an elected official would be judged by how effectively they advocated the collectively agreed upon opinions of their constituency. 

B. A representative is there to act on their own opinions, judgement and initiative. They are elected because the people feel they have the most suitable set of attitudes, skills and experience to act in the best interests of the community. A representative of this type would be free to go against the opinions of their electorate (in effect the doctrine of 'just because I'm in the minority doesn't mean I'm wrong' would apply). Success would be determined by the outcomes the official delivers versus the expected outcomes other officials would have been able to deliver.

One of our key problems as a society at the moment is we (the people) think the answer should be option A, and then get offended when politicians do their own thing, but the politicians think the answer is option B - and that they have been endorsed by the people to follow their own ideas and opinions. 

Maybe if we actually sorted out what it is we want our representatives to be doing, we can then start looking at how we pick them.

/Z

Eco-Moo-Mics

I should probably preface this post with an apology for the awful title; Sorry. However one does not often get to make cow jokes in the field of sociopolitical and economic discourse, and woe betide he who passes up such an opportunity. 

 

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Free market economics has been a powerful force in much of the western world for some two hundred years or more. Under the auspices of Adam Smith's dead hand successive governments have taken the theory that rational agents pursuing their own utility maximisation is 'good' for society and tried to bend either policy, or sometimes the world itself, to fit. This week gives us an excellent example of failures in the assumptions of perfect competition undermining the whole idea, and the chance for some prescriptive rather than purely descriptive conclusions.

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This is actually the third attempt at this article. The first used the opening shots of the current skirmish between dairy farmers and the supermarkets to segue into a more theoretical discussion on "value". Ultimately this is a topic that needs some more thought before being offered up for pseudo-public consumption. Secondly it was going to be an explanation of why it was time for some farmers to hang up their milk buckets and do something else (a point of view that is, in part, discussed below). Finally on reflection it has become an explanation of how our model of competition has failed, and what the farmers should do to restore balance to the universe.

Perfect competition is a nice idea, unfortunately the real world rarely obliges by meeting any (let alone all!) of the assumptions required. In brief perfect competition states that efficiency will be achieved in a market where;

1. There are an arbitrarily large number of buyers and sellers.
2. The products sold by each provider are interchangeable (or "homogeneous").
3. There are no barriers to entry into the market.
4. All consumers have perfect knowledge of the price at which each seller is selling at.
5. Producers and Consumers are rational.

(Disclaimer: There are a couple of other assumptions and some specific definitions of things like profit, but the points above are good enough for this analysis).

From this it should follow that the prevailing market price will become the cheapest price at which any possible provider can sell and still remain in business. As you knock out these assumptions you begin to get a higher market price, and by extension less overall consumption (which is held to be a priorii worse than more consumption - remember you live in a material world).

In perfect-competition world (PC World), the current issue is resolved by some of the milk farmers ceasing to produce. Since they are unable to produce at the prevailing market price they should cease to produce altogether and get out of the way of the providers able to supply at the prevailing price. This is the view being taken by many of the more pro-free market commentators assessing the current situation. Originally this was also the view I was going to take - attempting to defend a seller claiming the market price was too low seemed to be skirting awfully close to the dreaded realms of the Planned Economy - especially when there are other providers in the market still making a tidy profit (Robert Wisemen - the suppliers of around 30% of Britain's fresh milk posted a £34 million profit last year). After all, if you’re not going to let the market decide who should decide the price of milk? A quango? The government? The EU? 3D6x4?

The prosecution rests.

A change of perspective often helps in these matters. Let's start by looking at which of those PC assumptions actually hold;

1. An arbitrarily large number of buyers or sellers. False
   Although literally millions of people consume milk every day, farmers do not sell to the population. The main supermarkets are, for all intents and purposes, the only buyers. This means approximately 6-8 consumers. In May 2012 there were 10,724 dairy producers in the UK. This is close to an arbitrarily large number (with some caveats discussed below).
2. The products are interchangeable True
   Leaving aside the whole GM/Organic issue, milk is milk.
3. No barriers to entry into the market False
   There are significant costs associated with obtaining the land required to set up a new dairy farm and becoming certified by the Food Standards Agency. 
4. Consumers have perfect knowledge True
   Slightly contentious, but I would argue the tiny number of consumers, coupled with the resources at the disposal of the supermarket buyers means that a supermarket is aware of the price available from all suppliers before committing to a purchase.
5. Rational consumers and producers Debatable
   To some extent this is a moot point. Its inclusion is to rule out fringe groups who don't make production decisions on price/profit factors. If you choose to supply based on whether there is an N in the name of the day no amount of economics is going to help you.

 All in all - not great. Only 2 out of 5 can be said to definitively be true, and, importantly, they are the two that benefit consumers more than suppliers. An interchangeable product means that a supplier can't leverage reputation or "unique selling points" to get a higher price. Whatever you have - everyone else has as well. Perfect knowledge is obviously an advantage by allowing a consumer to always pick the cheapest price.

The first point above will be addressed last since it is in effect the solution. Moving on then to point 3; consumers indicate their preferences by either buying (or not) at a prevailing price. If the price is too high consumers don't consume and therefore either the price comes down or the product ceases to exist. This seems intuitive because "no barriers to entry" almost universally applies to consumption - and certainly applies in the case of bottled milk. If you stop buying milk for a week there is absolutely nothing to stop you buying it again in two weeks’ time when the price changes. How do producers indicate their preferences? By producing (or not) at a given price. Unfortunately now we hit the 'real world' problem. A dairy farmer can't decide to not produce for three weeks because the price is too low, and then start up again as if nothing happened. This means that the producers don't have the same ability to influence the market as the consumers. Or do they?

The first point about many buyers and sellers is the vanguard of a fundamental underlying assumption - that no specific individual in the market has more power than any other, and here we hit the nub of the problem. The power all rests with the buyers. There are a small number of highly resourced and knowledgeable buyers controlling virtually all the trades in the market. They can chose to buy from any producer (because of interchangeable products), they have knowledge of all the available prices, the producers don't have a choice about who to sell to, and the producers can't decide to not produce because of the barriers to re-entry when the price changes.  

Addressing this imbalance is actually very simple - the producers become unionised for the purposes of negotiating trade prices. If a small number of buyers meet an equally small number of sellers balance is restored. No longer can one side or the other use the threat of withdrawing from the market to influence the price unduly in their favour. Although the barriers to re-entry remain as a point against the producers I can't see a supermarket relishing the prospect of losing the ability to sell milk (with 165 million cups of tea per day being made in Britain milk is a great way of getting people into shops). 

Would we see a higher price for milk in the shops? Probably not - the price between the supermarket and the public consumer is a different game played by different rules. Would we see some milk farmers still going out of business? Probably - ultimately farming has been decaying as a % of total economic activity since the Stone Age, in fact it is one of the underlying indices of civilisation. Would we get a get a price determined by a reasonably open market where evenly empowered agents negotiate in their own best interests? Yes. 

Problem solved.

/Happy Trails

Z

The £24 Billion Flashlight

The Olympic Games have come a long way since 776 BC. No longer are the Games about anything as trivial as individual achievement, honouring traditions and stopping wars - now they are all about the two great driving forces in the world; money and perceived international influence. 

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 When the bid for the Olympic Games was launched it was portrayed to the public as a minor spending item which would return vast intangible benefits by turning the eyes of the world on London, and if that weren't enough it would also bring in heaps and heaps of cash from all the Olympic tourists. But as we get increasingly close to the over hyped opening ceremony is there any good evidence this is going to be the case?

Firstly it should be said that London does not need to hold the Olympic Games to spring from obscurity onto the world stage. Founded as one of the furthest bastions of Rome near the height of its power, two millenia of growth and change saw London become the centre of the world's largest empire and the most populous city on the planet, survive the bloodiest conflicts in human history, and now, although slightly diminished, it still remains the financial capital of the world, Europe's richest city, the busiest hub for global air passenger travel and a list of other accolades and achievements that speaks for itself. London is not in danger of disappearing into the darkness anytime soon.

 But glory aside, will there be riches at the end of the Olympic rainbow? Unfortunately this seems to be the same answer as the glory - yes if your Middleofnowhereville, not really if your London. Tourism already contributes around £15 billion a year to London coffers and provides 350,000 jobs. 14 million international visitors come to London every year - more then any other city in Europe. The Games aren't going to change that. A report by Tourism Insight (a think tank of tourism professionals who report on trends and events in British tourism), reaches the conclusion that while the Games do attract Olympic Tourists (who henceforth will be termed Lympies) they also deter regular tourists who don't want to get caught up in the Olympic furore. The net effect? Yes Summer 2012 will be a busy year for London - will it be busier then any other "good" year? - No.

This story of lympies replacing regular tourists extends to the facilities and events. Free cultural events planned around London and the wider country steal customers from businesses which rely on the tourist trade, no doubt pushing many to the brink and some into closure. Once the games are done we will be left with surplus stadiums and sports parks which will compete with existing facilities for an unchanged residential demand, again the result will be sport and leisure businesses finding their trade reduced or dry up altogether. The legacy of the Olympics will not be a shimmering place on the world stage and an economy recovered from a slump by a surge in sports related tourism and domestic spending, but another set of unneeded monuments to our political class's obsession with international prestige and the ruin of a swathe of small and medium sized enterprises pushed out of existence as public spending again swamps private business.
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So, to recap the Olympics are a £24,000,000,000 white elephant that will do little to boost London's already stellar tourism industry, and will have a damaging knock on effect on the wider economy, what could we do with that money instead? Here are a few ideas;

• Provide safe, clean water to every person on the planet. In addition to saving as many as 2 million lives a year in some of the world's poorest regions this would boost African economies by as much as £100 billion a year by ending productivity losses from water related illness and disease.
   
• Provide free primary school education to every child on the planet. (£10 billion)

• Pay the combined average salaries of 27,000 teachers or 10,000 GPs for the next 35 years.

• Double the average salary of every UK Firefighter for the next 10 years.
  
• Maintain Britain's nuclear deterrant for 10 years.
  
• Provide a boost to the UK economy of £432 billion by funding adult and junior apprenticeships.
  
• Fund 500,000 university courses, including all fees and living allowances.

Or, if your slightly less altruistic, how about giving everyone in the country a lump sum of £4,000 to do with what they want? At the end of the day the home-grown Lympies can use the money to go visit whichever global city the politicians have decided to make an example of next, and leave the rest of us in peace.

Happy Trails,

Zarl

Musing in Monochrome

Reading is dying, and given the range of alternative pastimes now available to us is that really a surprise? From thousands of TV channels to the multitude of internet websites churning out everything from eSports to "funny" cat pictures never has the humble tome been faced with such a challenge.  It was therefore a shock to find the latest fad sweeping my office, and apparently a significant part of the literate world, was nothing other then a Book.  


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In the interests of avoiding accusations of hypocrisy I put down my epic fantasy, shelved the weird and wonderful steampunk world of Burton & Swinburne, and, albeit with gritted teeth, purchased FSoG. Over the previous week I have skimmed, slogged and eventually ploughed my way through 1,500 pages of 'mommy-porn,' - I am unimpressed.

There was a chance for the eponymous Mr C Grey to be a great character; Patrick Bateman at his most sadistic crossed with Dorian Grey's supernatural sensual innocence - twisted, beautiful, broken and alluring.  He is not. In fact, Mr Grey is borderline "normal" - his sexual tendencies aren't completely mainstream but with as much as 25% of the sexually active population at least dabbling in the "community" (according to wiki!) this is not some extreme aberration. And let's face it - in our increasingly sexualised world, where the BBC's most watched show is the one with a naked dominatrix in it, where we use sex to sell everything from sunglasses to celery, are any of us truly shocked by the concept of spanking or being tied to a bed?


If Mr Grey fails to deliver, then, regrettably, Miss Steele is even worse. My only real reaction to this trilogy was an increasing anger at a lead character and narrator who was wonderfully described by a colleague as "insipid". With gleeful abandon Ms James " " develops " " (/sarcastic quotes), her quiet, bookish, dreamy, intellectual and self-secure heroine into a sex-crazed, short-sighted, insecure and borderline schizophrenic hypocrite who apparently has less ability then the average Labrador to understand her significant other.  By halfway through the first book a reader can predict "Mr Mercurial's" reactions - he is surprisingly consistent, and nor should it come as a shock that most men will get annoyed when their new girlfriend, in a moment of post-coital balm, begin to nettle them about their issues.


I would like to say that a plot full of suspense, drama, atmosphere and emotion makes up for the shortcomings of Fifty Shade's characters - unfortunately it doesn't. In fact the entire trilogy is really the same scene on repeat - have sex, poke Grey about this past, he gets angry, rage a bit, have sex. (Yes this does mean you get two sex scenes one after the other with no actual plot linking them). Suspense is added by sometimes adding sex between steps three and four!

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For all its shortcomings, I would still recommend Fifty Shades to any student of human nature. Unlike watching or listening which are passive, reading is active - we, as readers, must engage with the characters and settings the author has laid before us, and invariably project ourselves into the characters, their emotions and their choices. An interaction which is, regardless of the quality of the subject matter, personal and revealing if approached openly and honestly.

On reflection my own negative reaction to the Fifty Shades trilogy is simple -  this is the story of two individuals seeking to express themselves, in their own way, outside the scope of the mainstream mob mentality, who are "cured" of being different by a diet of money, sex and childish thoughtlessness.

I leave you with a final observation; Fifty Shades of Grey is the story of;

"the extraordinary made ordinary."

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 Happy Trails,

Zarl