Speaker: Inequality: Too big to ignore
104 Responses
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BenWilson, in reply to
the hypothesis behind any policy change is “This will make things better for people in our electorate by delivering xyz outcome,” surely?
That's not really very specific. I wouldn't call that a hypothesis, just a sales pitch. But what I'm getting at is that it's never suggested that they will make a change and then rescind it if it doesn't work. It's got to be accompanied by ridiculous levels of confidence about something that seems to be incredibly uncertain in reality.
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BenWilson, in reply to
I agree that you are right to feel uneasy about that.
I didn't just get a major in stats so that I couldn't question causation claims :-). Thanks for your reply and Bart and Matthew too, I have to split for the rest of the evening so hopefully the thread can get back on topic :-)
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steve black, in reply to
It’s not like it’s a crime to look at your observations and then predict a model that looks like the pattern you see there.
Well…changing the goal posts (hypotheses under test in an experiment) leads to some sticky ethical as well as scientific issues (incorrect p values) in my neck of the woods, thus is frowned upon:
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Matthew Poole, in reply to
But what I’m getting at is that it’s never suggested that they will make a change and then rescind it if it doesn’t work.
I think I understand how we ended up with this discussion. You're confusing political and economic ideology with actual science :P
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Bart Janssen, in reply to
But what I’m getting at is that it’s never suggested that they will make a change and then rescind it if it doesn’t work.
I think I understand how we ended up with this discussion. You’re confusing political and economic ideology with actual science :P
The issue is scientists are wrong ALL THE TIME. Generally we try and be wrong in private but sometimes ... Our response to being wrong is to say "we were wrong, lets try something else with the aim of being right".
Politicians are also frequently wrong. Their response is to blame the data or the person providing the data.
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Kim_Wright, in reply to
That’s not really very specific. I wouldn’t call that a hypothesis, just a sales pitch. But what I’m getting at is that it’s never suggested that they will make a change and then rescind it if it doesn’t work. It’s got to be accompanied by ridiculous levels of confidence about something that seems to be incredibly uncertain in reality.
Isn't that the premise for most if not all government policy. Not many are introduced as "suck it and see" options. It's not usual to hear a minister saying," Oh we'll give it a bash but if it doesn't work we'll dump it". I guess one recent exception is the foreign terror thingamajig which does have a sunset clause but it's a given they aren't going to biff it away just take longer to make a new one.
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Ian Dalziel, in reply to
It’s not usual to hear a minister saying,
” Oh we’ll give it a bash but if it doesn’t work we’ll dump it”INCIS anyone?
...and maybe Novopay and the Joint Border Management System (JBMS)
some time soon?I haven't heard much about the IRD's $1.5 billion computer system upgrade, lately, either...
;- )
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Sacha, in reply to
Not many are introduced as “suck it and see” options. It’s not usual to hear a minister saying,” Oh we’ll give it a bash but if it doesn’t work we’ll dump it”.
Except in disability policy. A parade of pilot programmes.
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Kim_Wright, in reply to
Good examples Ian, but the MO seems to dig in and bludgeon the dying beast back to life rather than introduce an initiative with one possible outcome being humane euthanasia. Look how long Novopay was in the death throws before monster Joyce stopped trying to resuscitate it by throwing good money after bad at it.
They did eventually ditch the health benefits system that was labelled akin to a ponzi scheme. I doubt we will see the like with National Standards or 'partnership schools".
Sacha, I think pilot projects probably have a different threshold for success, adoption and/or abandonment given they are almost experimental by default. I'm not saying that I condone treating the population as guinea pigs for a succession of pilots.
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Kiwiiano, in reply to
"It seems the OECD report is very easy to ignore for the MSM as it’s already relegated to the nether regions of Stuff and the Herald websites."
That's why it should be more properly termed 'lame-stream media' LSM.
It's blindingly obvious that all our media (& politicians) are captive to corporates. This week's offering from George Monbiot talks of Britain's woes on the subject but they are clearly applicable to New Zild. It's dismaying to find that we are world leaders in the equality gap. Presumably because our super rich are somewhat less blatant about their excesses compared to UK or US.
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Rosemary McDonald, in reply to
That's because its okay to experiment on the disabled....
oh, sorry, that was the Nazis.....
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chris, in reply to
It’s dismaying to find that we are world leaders in the equality gap
If it’s any consolation we’re not even close. Were the OECD the world, and if in that period, the economic growth hadn’t skedaddled off to developing countries, where the greatest inequality incidentally is, then be dismayed. Chile, despite being the OECD country with the greatest inequality somehow absconded from graph duties there. It’s difficult to know exactly what we’re looking at, if the 11 most equal countries are: 11. Germany, 10. Finland, 9. Kazakhstan, 8. Austria, 7. Slovakia, 6. Luxembourg, 5. Malta, 4. Czech Republic, 3. Norway, 2. Hungary and 1. Sweden, and the economic growth of those countries is respectively ranked 203. Czech Republic -.9%, 201. Finland -.6%, 191. Hungary 0.2%, 186. Austria .4%, 185. Luxembourg 0.5%,183. Germany 0.5%, 178. Slovakia 0.8%,175 Sweden 0.9%, 153. Norway 1.6%, 135. Malta 2.4%, 58. Kazakhstan 5%.
The OECD paper puts cart before horse asking:
Does income inequality hurt economic growth?
Push come to shove who really gives a hooton about degrees of economic growth – what we want is greater income equality. With available data, a similarly tenuous argument could be made that economic growth hurts income equality. Mainly, like most things, a fair suck of the accountability sav probably boils down to crappish management by the autorites.
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BenWilson, in reply to
I think I understand how we ended up with this discussion. You’re confusing political and economic ideology with actual science :P
No, I'm not confusing them. I'm saying one is a pale shadow of the other, and it could do better. It is worth discussing how it could do so, although of course giving up is an easier option. Call me a dreamer. This is a thread about how such scientific evidence as we do have suggests a course of action. It is also possible to take a course of action that is also scientific (and also happens to be the same course) in it's very nature, a conscious exploration of a possibility. Well, let's face it, on the evidence it's a high probability (so far as we can calculate by simply relying on external events to provide us with data). But it is not a certainty, not even close.
Our response to being wrong is to say “we were wrong, lets try something else with the aim of being right”.
If you were designing a political system, this is what it would do.
Isn’t that the premise for most if not all government policy.
It seems to be. But it doesn't have to be. It at least worth thinking about how it could not be.
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Katharine Moody, in reply to
Which leads to that horrid neck of the woods that sees economics in terms of class struggle rather than assuming that those in control of it actually even want equality, or see it as a good at all.
Why is that a horrid neck of the woods, if it is what it is, better to acknowledge it and understand it - it's your classic Marxian / political economy sort of analysis. They tend (IMO) to be the ones I like to read. David Harvey is a favourite. He coined the term 'accumulation by dispossession' as a means to describe our 21st century brand of class struggle. He's not an economist, rather a political geographer/historian.
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Katharine Moody, in reply to
Try popping the other hat on for a sec and tell me how it could be made more scientific…I’d be interested to see what you can come up with.
This to me is a bit of the problem with our general view of economics - it is not a 'science' in the sense of Bacon's scientific method. Makhlouf recently gave a speech worth reading;
http://www.treasury.govt.nz/publications/media-speeches/speeches/economics
He uses a phrase borrowed from Keynes which describes economics as a 'moral science'. We have lost sight of this in terms of economics education in my opinion. I've looked at the various uni offerings in economics degrees - and none that I've seen yet require the philosophy of ethics as part of the core papers. In fact you have to hunt down ethics as a subject - and it seems to be totally divorced from the business/economics and/or public policy schools.
What I find in practice is that all the economic analyses I read as part of my work are based on only one 'school' of ethical thought, that being teleological/consequentialism. So, if economists generally don't know of any other moral framework under which to ask questions and seek answers - then it's no wonder economic modelling fails us so often.
Many economists I've spoken to see their questions as fundamentally how to deal with scarce resources. Had they understood other schools of moral thought (say, Aristotelian virtue ethics), their theory and tools would instead have been developed to discover the midpoint between excess and deficiency, rather than the highest value use.
My point is, forget the Baconian method where economics is concerned - that type of 'experimentation' seems to me precisely what Milton Freidman had a go at with Chile.
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Sam Bradford, in reply to
Katharine, I think you're right. Economics is a profession where conflicting unprovable theories circulate, to be picked up and used by those in power -- not used to create policy, but to justify whichever policy they already wish to pursue. No analysis of the statistical validity of this research will make any difference. It's irrelevant. It could be as watertight as the theory of gravity, but it takes more than that to unseat an ideology. The fact that this report can come out of the OECD is a sign that new ideas are circulating amongst economists, but that will mean absolutely nothing to the gifted economic managers (property bubble! all-in on dairy!) running the government.
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steve black, in reply to
Bill English tells RNZ the report is wrong (and Guyon does not let him off the hook). Then Grant Robertson says it’s right while Susie Ferguson spends most of her time trying to blame previous Labour govts.
Alas, Guyon failed to pick Bill English up on his use of the bogus "50% of people pay no net tax" statistic. I remarked to my wife at the time that Keith Ng has had a bit to say about this sort* of ill defined bogus Nat party (based on Republican party) ideological spin dressed up as an informative and well defined statistic. I was going to have to do the research so I could point it out here in an informed manner, but fortunately my mate Thomas Lumley has already done it:
why "50% pay no net tax" is bogus
And Susie Ferguson is in good company when she blames growth in inequality on the previous Labour Governments. Our Prime Minister agrees and goes further blaming the Green Party.
Key blames Greens for growing inequality
It really must be silly season.
* note: I say this sort because Keith was responding to a slightly different (equally bogus) series of claims about the tax burden on higher versus lower income people
I'm sure Keith has specifically mentioned the bogus stat "net tax" issue before but I haven't found it. Maybe somebody else can help us out... Meanwhile, I must say that reading up on how earlier NAct budgets were pitched (versus how things turned out) in Keith's older posts makes very interesting reading.
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Sacha, in reply to
sadly, not in this case. http://en.wikipedia.org/wiki/Action_T4
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Ian Dalziel, in reply to
the Late Show...
It really must be silly season.
The fact that Key still thinks he can rely on his memory says it all.
That, and the fact that they pushed through a Draconian Bill to increase the SIS's powers under urgency just so they could clear the decks for their annual 'open mic comedy' day - er, adjournment debate
Maybe they really are Muppets - the urge to be comedians seems to dwarf any will to run the country properly....
Still it could have been worse, Key could have been there! -
Bart Janssen, in reply to
and it seems to be totally divorced from the business/economics and/or public policy schools.
Not true. Business courses teach students in the first year all about ethics.
They are taught that ethics has no place in business and should be avoided at all costs.
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BenWilson, in reply to
Why is that a horrid neck of the woods, if it is what it is, better to acknowledge it and understand it
My main problem with it is that it tries to boil all economic choices down to moral choices, rather than practical ones. I think that moral choice is at the bottom of economics, but it's not the whole business. The choice of whether to spend public funds on a railway, for instance, isn't just about class struggle. It's also about whether it would be the best use of the money even if the planners are entirely sympathetic to class struggle. Which are decisions that have to be made constantly. To attempt to put them onto an evidence based footing is important.
Furthermore, a great deal of the class struggle paradigm means that useful discussion becomes impossible, since the theorists themselves are part of the class struggle, so you end up with discussions about their ideas boiling down to ad hominems about their own personal interests.
Which is not to say there's no truth in it. I think there is. But I don't think pointing that out gives very much guidance to the resolution. If economics is not scientific enough, the solution is not to say that it's all vain ambition in the end, that nothing can be done about that, that all economic debate is a shouting match between tribes. Maybe something can be done about that. Maybe this statistic from the OECD isn't just a bunch of rich wankers trying to play a trick on the working class, but is actually them genuinely trying to grasp a phenomenon in the world. And maybe, with improved techniques, they could actually make progress on that. It's at least possible.
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The interview with Jane Gleeson-White on Kim's Hill's most recent Saturday morning show included suggested alternative ways (six capitals theory) for measuring the success or failure of economic policies. If we find better metrics for measuring the impacts of policy rather than the blunt implement that is GDP we can perhaps be more scientific in determining causal relationships?
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BenWilson, in reply to
What I find in practice is that all the economic analyses I read as part of my work are based on only one ‘school’ of ethical thought, that being teleological/consequentialism.
That seems highly likely to me. They're trying to be progressive, after all. They want to build a science. They want to make the tools by which to achieve economic ends with the best possible chances. Debating the ends themselves doesn't have to hold that up.
Had they understood other schools of moral thought (say, Aristotelian virtue ethics), their theory and tools would instead have been developed to discover the midpoint between excess and deficiency, rather than the highest value use.
Perhaps. But I studied virtue ethics in my philosophy degree and I couldn't make head or tail of it. Not sure how it would help people who maybe do a couple of weeks on it to make sounder choices about what to do with billions of dollars. Choice though it may be to "walk slowly and talk deeply" as the "magnanimous man" the embodiment of virtue, might, it's not helping to decide between rail or more buses.
Yes, I'm being dismissive of virtue ethics. Yes, there's probably a lot more to it. But I sure wasn't convinced after a year long course by a major fan of it on applied ethics. I came away thinking that it was giving more credence to pre-Christian philosopher's insights into how to make moral choices in the 20th Century than he deserved.
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Katharine Moody, in reply to
Hi Ben, the best example I've seen of an economic analysis that to me seems to be grounded in Aristotelian virtue ethics (i.e., a scientific/mathematical analysis aiming for the 'golden mean' .. that being the midpoint between excess and deficiency) can be found in the "marginal cow" economic analysis (with a bit of work I believe one could also apply such an analysis for the whole of the country, that is for NZ Inc.). Google "marginal cow".
And then note this (and previous) governments (and Fonterra and the financial institutions) policy/objective (i.e., the social or moral choice they have made for society at large) to entirely ignore such an analysis in favour of increasing production (and debt) regardless of what the marginal cow theory tells us.
Why? Apply a Marxian analysis to the choices made/actions of these elite (corporate and politico) classes... and (for me anyway) David Harvey's accumulation by dispossession theory looks pretty spot on.
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Sean_us Handley, in reply to
"Society and the economy are organized so only the wealthy do not need to go into debt, which is serfdom in a neofeudal arrangement.
The essence of neocolonialism is the “company store,” which extends credit that can never be paid off as wages are stagnant. In a neocolonial economy in which only the top Caste of Managers, Technocrats and Professionals (the top 10%) can expand their income and wealth, debt-serfs are impoverished by servicing debt. As the real (inflation-adjusted) incomes of the bottom 90% decline or stagnate, debt service consumes an increasing amount of disposable earned income."
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