A Theory of (British) University Business Cycles

Put simply, the theory of political business cycles goes like this: in the run up to elections, governments increase public spending or/and lower interest rates (if they can control them) in order to stimulate the economy and reduce unemployment. They supply voters with more goods or cheap credit as a way to make them happy so that they will re-elect them. After the elections, however, governments have to implement drastic austerity to pay for all the goodies they supplied to voters, or increase interest rates to slow down inflation triggered by cheap credit. As a whole, political business cycles can lead to phases of booms and busts, and reduce certainty for investors in a way that is ultimately damageable for the economy. This idea was one of the reasons that led central banks to become independent in most countries. By taking away monetary tools away from governments, one could make sure that they couldn’t use them for electoral purposes.

The evidence for the actual existence of political business cycles is at best mixed. However, the overall reasoning can be useful to understand the cycles that – some – British universities go through in the context of the Research Excellence Framework, the giant bureaucratic exercise set up by the government to assess its universities and allocate funds based on research quality. Essentially, the REF can fulfill the same function as elections in the theory of political business cycles, leading to cycles of boom and bust that are ultimately damageable for research and teaching. Universities in the last REF cycle were assessed based on their research output in the 5 year period before the 31st of December 2013. While universities have spent massively in research in the run-up to the last REF, many of them are now downsizing or refocusing strongly on teaching in the direct aftermath of the period of evaluation. In a very stylized way, the REF business cycle would look a little bit like this:

The Pre-REF spending boom

The motto is “research, research, research”. Universities spend significant resources on research and new hires with established track records of publications, partly by “poaching” star researchers who carried out research funded by other institutions. Part of this expansion, however, consists in fixed-term or precarious contracts that can be disposed of after the REF deadline. This touches both research and teaching. As to research, the Times Higher documents a 63% increase in 0.2 FTE (full time equivalent) contracts in the year that preceded the REF, allowing universities to submit the publications of these short-term hires in their REF submission. Universities may have offered such positions to hitherto retired academics or academics based abroad (who are not submitted to the REF by their university) as “visiting” or “research professors” as a way to buy their publications. But this also concerned increasing spending in teaching staff on irregular contracts (teaching assistants; teaching fellows) in order to free universities’ core workforce from part of their teaching duties (seminars of marking) to increase their research output. As a result, student evaluations that are so central to league tables and student enrollments suffer, as students are taught mostly by casual or junior staff. Casual or junior staff are often better and more dedicated teachers, but students may want to actually interact with the renowned researchers at their universities.

The post-REF austerity

The motto is “teaching teaching teaching”. Once the REF is over, universities re-focus on teaching as their main source of revenue, especially since it seems that there will be much less money to be distributed than anticipated after BIS blew its budget. The fixed-term teaching and research “industrial reserve army” is disposed of and teaching duties are reallocated to the core academic workforce, who is asked to teach more and mark more. Marina Warner, who resigned from the University of Essex in 2014, reports being enthusiastically encouraged to take part in the jury of the Man Booker prize in the pre-REF phase focused on “impact”, and then being told that she’d eventually have to take unpaid leave in the post-REF phase, where the things that were so praised a few months before were being flushed down the drain. However, much of the new focus on teaching does not translate in more teaching staff, but rather in increased investment in facilities and services. My own university, once the REF was over, set about to carry out a vast downsizing of its school of biomedical sciences and medicine to invest in new buildings. Emblematically, what was a cosy senior common room reserved for staff on the second floor of the King’s building has now been converted into an “informal learning space” for students. This is partly related to the format of the student surveys that have become so central as a way to assess and rank the quality of teaching: a large share of the questions in the survey actually deal with the “service” dimension (staff was accessible; timetable worked; IT resources were appropriate) rather than the actual content of courses. In line with the idea that “unleashing the forces of consumerism is the best single way we’ve got of restoring high academic standards”, student surveys are essentially like consumer surveys. What is assessed is the service that is provided rather than the quality of the content. It is a bit like writing a book or movie review where you’d give equal weight to the solidity of the cover or the comfort of the seats in the cinema as to the actual story being told.

The Big European Political Party Network

Party Network

A new European Parliament has been sworn in on July 1st, with a greater number of populist Eurosceptic MEPs than ever before. Out of the 751 seats in the European Parliament, 48 are now held by the Europe of Freedom and Direct Democracy group, uniting essentially Nigel Farage’s UKIP and Beppe Grillo’s Movimento Cinque Stelle, while 52 are held by non-affiliated parties such as the French Front national, the Dutch PVV or the Austrian FPÖ. After the success of UKIP or the Front National, many media outlets have mentioned earthquakes, landslides and other geological metaphors to describe changing power relationships that would allegedly change the face of Europe. However, in a political system where alliances and cooperation across political parties at different levels are fundamental, the eurosceptic populist right remains badly connected and deprived of access to power.

In the picture above, I have represented the European political system as a network of political parties connected to each other both transnationally and domestically (high version here). The nodes in the network represent all political parties that obtained seats in the EP in the last European elections, and their size is proportional to their number of seats. Transnationally, they are connected via their membership in the European political party groups. These groups broadly correspond to the traditional party families: the Social-Democrats (Alliance of Social Democrats and Progressives: Labour, German SPD, Italian Democratic party), the centre-right (European People’s Party: the German CDU, the Spanish PP, the French UMP, Forza Italia), the Liberals (Alliance of Liberals and Democrats for Europe: Libdems), the Greens, the Radical Left (United Left: Syriza, Podemos), the Conservatives, and Europe of Freedom and Democracy (UKIP and Beppe Grillo’s Movimento Cinque Stelle).

Many of these parties that cooperate transnationally with like-minded parties are also engaged in government coalitions with other parties at the domestic level. For instance, the German SPD, who is a member of the social-democratic political group, is in a coalition with the CDU, who is a member of the European people’s party. The British Conservatives, who belong to the European Conservatives and Reformists, are in a domestic coalition with the Liberal Democrats, who are a member of the Alliance of Liberals and Democrats for Europe. Knowing who is connected with whom is interesting because it can play a role in coordinating domestic and European policies. In the case of the CDU and SPD, the fact that two of the largest parties in the European Parliament are in a coalition together at the domestic level can provide a strong action power to promote policies.

Unsurprisingly, social-democrats and the European People’s party are well connected via a number of domestic government coalitions. Such “red-grey” coalitions are in place in Romania, Germany, Austria, Greece and Italy. What is perhaps more surprising is the prevalence of liberal/social democratic coalitions, making the Liberals a well-connected party family in spite of their relative electoral weakness. Such coalitions are in place in the Netherlands, Denmark, Slovenia, Lithuania, Estonia and Bulgaria. In fact, network measures of centrality indicate that Liberals parties are even better connected than the Social Democrats. This is essentially due to the fact that the size of these parties doesn’t allow them to govern alone at the domestic level, and they are therefore forced to coalesce with other parties to be in power, increasing their connectedness. Finally, grand coalitions uniting social-Democrats, Liberals and the centre-right, sometimes with other parties, are in place in Finland, Belgium, and the Czech Republic. Coalitions between centre-right and liberals are rather rare, and only observable in Sweden. Compared to the days of red-green coalitions in Germany, Green parties appear as weakly connected, with members taking part in coalitions only in Luxembourg and Finland. The British Conservatives, by deciding to leave the EPP in 2009, have given up on substantial connections in the sense that their partners in the ECR are mostly small and badly connected, with the exception of their Polish (they are not small) and Latvian (they take part in government) partners.

Moving to the Eurosceptic right, in spite of their electoral success, these parties appear clearly isolated, with no link to any coalition government at the moment. This is true both for the parties that failed to form a political group of their own (Marine Le Pen and Geert Wilders did not manage to find partners in a sufficient number of countries), but also for UKIP, whose partners in the “Freedom and direct Democracy” group are not connected to any relevant party in power. This is also true for the radical left group, in the upper right corner. Hence, in the absence of the connections and access to power that the mainstream parties possess, the “earthquake” that the media has been talking about is very unlikely to happen.

A version of this post was published on the European Politics and Policy blog.

A modest proposal to curtail the political influence of the elderly

Modern political economies are strongly skewed towards the interests of older people. In the United states, per capita spending on the old via pensions or medicare stood at $26’000, while spending on the young via child benefits or other programs was at less than $12’000 (data for the graph below from here). Pensions in particular represent a bigger share of public budgets than any other social scheme, and a large share of health spending goes to care for the elderly. In 2013, the UK spent 139 billion GBP in pensions, compared to 5.9 billion on unemployment, 18.8 on family and children and 37.8 on education. This distribution is even clearer in the case of the US, where pensions and health federal expenditure – more largely targeted at the elderly though Medicare – represented 52% of the federal budget as compared to 16% for education an 8% for other welfare expenditures. At the same time, the United States do not have statutory paid maternity leave.

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The high level of spending on the elderly is of course justified because elderly people need more state support in bad health and old age, and pensions are more expensive than other other schemes because they are meant to be the main source of income of people rather than an ancillary benefit. Many social security schemes were established at a time when poverty was a very salient risk in old age, and when lower female participation in the labour market did not require subsidised childcare or other schemes that young families now require. After the 1970s and the end of the period of high growth that followed WWII, when tighter fiscal constraints on state budgets kicked in, the door steadily closed for the development of new schemes to accompany labour market changes: the welfare state hasn’t been retrenched, but its ability to cover new risks has declined. This is what Hacker calls the policy drift. However, notwithstanding popular images about poor elderly people inherited from previous decades, a large part of this spending now goes to categories of the population that are significantly better off than the average, for instance, in Britain, in the form of fuel allowances distributed indiscriminately of income or wealth.

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This would not be less of a problem if the prospects of the young across generations were similar, but the young of today may never reach the level of prosperity and comfort of the current elderly who started their career during the period of strong growth that followed WWII. Many people worry that the benefits of our current elderly will ultimately undermine those of our future elderly, as the commitments made during the period of very high  growth of the trente glorieuses won’t be sustainable in the long term, with much lower growth rates and productivity growth than before. In Southern Europe, young generations face extremely high levels of unemployment while they are paradoxically much better qualified than their parents. Many companies implement a “last in, first out” policy when it comes to dismissals, which means that young people are systematically disadvantaged in the labour market, leading to much higher unemployment rates. When we talk about the risks of a lost generation who can’t get onto the job ladder, it’s partly because the previous generation kicked the ladder away.

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The main reason behind this is that young and older people display strikingly different patterns of electoral behaviour: old people usually vote, while young people don’t. The graphs above (data from the US census bureau) show reported voting rates for the 2012 US presidential election, as well as the share of different age groups both in the overall population entitled to vote (which excludes non-citizens, who also tend to be younger) and the population that actually votes. First, voting rates markedly increase among older citizens: reporting voting rates are about 40% for the 18-24, where they are at 73.5 for the 65-75, and decline somewhat afterwards. We need to note that the turnout a presidential elections is higher than for other elections, especially at midterms. The lower the turnout, the more it is usually biased in favour of the old. The result of these differences is that older age groups are overrepresented among voters as compared to the overall population entitled to vote, with fairly clear incentives for politicians to be especially attentive to their preferences. Hence, people between 45 and 74 represented 46% of the overall population entitled to vote in 2012, but 52% of the population who actually voted. Since life expectancy is around 78 years, it is theoretically possible to win a majority exclusively with votes from people in the second part of their lives, who are already well inserted in the labour market, have completed their education, and who don’t need childcare or maternity leave anymore, while it is not possible to win a majority only with younger people in the first half, who may need these things. The median voter, the one that politicians need to convince to win – majoritarian – elections, has become increasingly older, and she is likely to become ever older in the future.

As a consequence, politicians on the right and left engage in a rat race to court the grey vote and please the elderly: defending pensions is much more likely to win votes than childcare or education because those who benefit from the latter are much more likely to cast a ballot than those who benefit from the former. For instance, the British government has been able to implement a cap on benefits affecting mostly young people (jobseekers allowance, child benefits) almost at leisure, while it has ring-fenced pension benefits in spite of the fact that cuts in pensions would allow much more substantial savings in government budgets. In contrast, spending for child care has stayed in a stalemate. With ever lower levels of turnout among the young – partly underpinned by worse economic conditions than their parents – and an aging population, this skew is likely to become bigger and bigger. Ultimately, we may come to a society where the large majority of voters are old and don’t work, while those work and fund public spending don’t vote. The drive towards tighter immigration controls in many countries is also partly underpinned by the preferences of the elderly, for whom immigration is much more of a concern than for young people who have grown up in more multicultural settings. Incidentally, UKIP voters are also strongly overrepresented among older generations. What older UKIP voters are saying concretely is that we should fund their pensions but limit immigration levels which could fund ours.

A democracy that is biased towards people in the late stages of their lives is problematic because it is more backward-looking than forward-looking, that is, more interested in defending its acquired rights than anticipating a future that they will not live. Why should a 70-year-old care about the depletion of energy resources in 50 years time? Of course this is a somewhat caricatural way of presenting things, and each generation does not always vote with selfish motives. People may care about their children or grandchildren or simply young generations in general. But then, why do we observe the biases in spending outlined above? In Switzerland, only men were entitled to vote until 1971, and a statutory paid maternity leave was only put in place in 2005. Why did Swiss men not advocate the interests of their wives, daughters or sisters before? Because when choices have to be made with scarce resources, selfish motives tend to prevail. This also does not mean that older people are selfish, but politicians tend to project certain preferences on them in order to win votes. Hence, we need to reconfigure the incentives for politicians.

Weighting votes by expected life expectancy

There are different ways to solve the political bias towards the elderly. One is to introduce compulsory voting to compensate for the turnout deficit of the young, or to lower the voting age to tip the balance a little bakwards. Some people also advocate demeny voting, whereby parents can cast votes on behalf of their children. However, with population ageing and declining fertility rates, this is unlikely to solve the problem as the number of elderly voters will expand at a much higher rate than the number of children and young voters. Another proposed solution is the introduction of a maximum voting age, but depriving people of votes altogether is questionable. What we need is a substantial top-up in the weight of young citizens in the political process.

There is a case for tipping the balance towards the young on a permanent basis not only for pragmatic but also for normative reasons: young and old face different incentives regarding the interests of the other group even if both are selfish. Young people need to consider the interests and policies for the old because they will be old one day. In contrast, the old will unfortunately never be young again, and therefore only need to care about themselves. For instance, members of the current British government who have introduced 9k university fees and hardened access to benefits for young people have studied themselves for free, and possibly entered the labour market at a time when unpaid internships weren’t the necessary step towards a real job.

One radical way to rebalance the political power of generations would be to weight the number of votes according to the average number of years a citizen will have to live with a particular political choice. For instance, a citizen who votes at an election when he is 18 will have to deal with the consequences for 62 years, if one considers that life expectancy is about 80. By contrast somebody who is 70 will on average only deal with the consequences for 10 years. We could for instance weight the number of votes according to this criteria. In order to avoid some citizens having 60 times more political power than others, we could take the rounded square root of their expected life expectancy to reduce this imbalance to a factor of 1 to 8. People between 18 and 23 would have 8 votes, people between 24 and 37 would have 7 votes, and so on (see graph below). People reaching the average life expectancy and beyond will keep one vote. The number of votes could be adapted at each election with the increase in life expectancy.

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This system would be a departure from the 1 person, 1 vote rule, but many systems actually depart from this rule already. For instance, Wyoming has 0.18% of the US population, while California has 11.91%, yet both have the same number of senators in the US Senate. This means that citizens of Wyoming have 65.7 times more influence than Californians in this house. The system I outline here is actually less unfair, because everybody goes through the whole cycle, and nobody is systematically disadvantaged. People who die young will actually have a higher average influence on average throughout their life than people dying very old: on average, somebody born in an impoverished area of Glasgow, where life expectancy is shorter, will have had more average influence on political decisions than somebody born in Kensington. Such a reform of the electoral system could also have interesting redistributive properties. Empowering young people is also empowering people who are on average less well-off.

Of course, the establishment of such a system would require substantial constitutional amendments decided within the current system biased towards the old, and are therefore politically suicidal. In order to restore the power of of the young, what we need are political kamikazes.

Does a surplus of men explain gang rapes in India?

Indian states by gender ratio and ratio of reported rapes

Indian states by gender ratio and ratio of reported rapes

The press has widely reported today on another horrid gang rape in India. Two girls aged 14 and 15 were raped by several men in Katra Sadatganj, a small village in Uttar Pradesh, and were found hanged from a mango tree. There were completely shocking pictures of the two girls still hanging there, as their family refused to have them taken down until the truth had been established about the role of the police (who apparently hadn’t bothered because the two girls belonged to the Dalit “untouchable” caste) and the culprits (who belonged to a higher caste) were arrested.

This just another case in a series awful gang rapes in India, after the case of the student raped and killed in a bus in Delhi in December 2012, or the gang rape of a Swiss tourist in 2013. Even if one shouldn’t extrapolate from the media emphasis, rape and violence against women have often been presented as an endemic problem in India. One factor that has sometimes been mentioned to explain this is demographics: India is one of the countries with a distinctly unbalanced gender ratio: there are 37 million more men than women, and 1.1 men for each woman. This is due in part to a large share of young girls not being born, via abortion or other means, because of a preference for males among many social groups. This is essentially a social norm, but is also driven by economic decisions: the dowry system means that money has to be paid by the family of the bride to the family of the groom when they get married, so that girls are a liability. Preferences for males at birth creates an unbalance gender ratio and an undersupply of women. Uttar Pradesh, the state where this latest gang rape has happened, is incidentally one of the states where this gender unbalance is the most pronounced: there are 912 women for 1000 men.

The question is to know whether this unbalanced gender ratio creates structural conditions favouring sexual violence against women. This would of course in no manner excuse individual behaviors, but behaviour always happens in a context. Hence, the bias against women at birth (via birth control) could hurt women again during their life (via rape). The demographic factor behind violence against women in India was evoked in a number of reports, as the mass of angry young men fed by frustration and anger turn to violence against women, especially in a context where traditional structures or social control are unravelling. This was nicely explained in NYT piece by Lavanya Sankaran:

Indian cities are awash with feral men, untethered from their distant villages, divorced from family and social structure, fighting poverty, exhausted, denied access to regular female companionship, adrift on powerful tides of alcohol and violent pornography, newly exposed to the smart young women of the cities, with their glistening jobs and clothes and casual independence — and not able to respond to any of it in a safe, civilized manner. This is the world of women under siege, the medieval world of the walking undead, the rise of the zombies, targeting females rich and poor. For women, at least, winter is coming.

Does an unbalanced gender ratio in favour of men foster violence against women? In the graph above, I have plotted together the ratio of reported rapes in Indian states (taken from page 206 of this report) and the gender ratio for each state as reported in the census (Stata data file here). There is a very slight positive correlation against the hypothesis explained above (the more women in relation to men, the more rapes), but there are many reasons to believe that this is completely spurious because of huge problems with the measurement of rapes, which are without doubt the most under-reported crimes. Hence, it is probably in the places where male dominance is the strongest, and where rapes are the most likely to happen, that rapes are the least likely to be reported. On the contrary, they are more likely to be ignored by – overwhelmingly male-dominated – police forces. If you look at international data, Sweden ranks extremely high among the countries with the highest number of rapes per population, whereas the United Arab Emirates, which also has a strongly unbalanced gender ratio, have very low levels. This is more likely to be due to differences in the way rapes are reported than to huge differences in the number of rapes. Paradoxically, it might even be that the greater the number of reported rapes, the better the situation of women is.

What the Piketty-Financial Times Affair says about journalism and academia

Thomas Piketty has issued a response to the FT’s criticism claiming that bad computations and flawed estimates undermined the overall thesis of his book, namely that wealth concentration had increased. I have read the 10-page letter by Piketty and found it extremely convincing. Basically, he doesn’t give an inch, explaining each and every point that the FT raised with references either to the very dataset that the FT used, or to research papers he had published and uploaded. He concedes that a few minor points could have been more transparent in the dataset, but if anything, his response points more to the FT’s sloppiness than his own, as does another piece in the Guardian by Howard Reed. When you write a 600-page book drawing on a humongous mass of disparate data, you are bound to make thousands of judgement calls and adjustments. Keeping track of and documenting them almost takes more time than actually finding and analysing the data.

But besides the substantial points, what i found interesting about the whole FT (a commercial news outlet) vs. Piketty (an economics professor) affair is the still huge differences between the world of journalism and academia precisely at a time when these are getting closer and competing with each other.

Until recently, journalism and academia were clearly distinct. The race towards specialisation has led academics to invest in ever more sophisticated skills and take part in arcane debates that remained obscure to lay people, and journalists occasionally consulted them or reported about their research, but they held a monopoly over the means of communication of science to the public. Hence, academics tended to stay in the ivory tower, and needed journalists to diffuse their knowledge, while journalists needed the expertise of academics – or more often borrow their credibility to support common sense arguments. In many ways, roles were clearly defined. I think that things have changed recently with the development of academic blogging, where academics are increasingly investing the public sphere directly without the mediation of journalists. At the same time, the development of “data journalism” in the recent period can be understood as the diffusion of academic – essentially quantitative – techniques within journalism, and I suppose a more scientific approach to journalism. So what we have is the emergence of an intermediate sphere where both academics and journalists compete for communicating knowledge to the public. However, journalists and academics still have very different habituses - ways of seeing things, professional standards, time horizons – that make this competition a very unequal and often pointless struggle.

One of the major differences is the issue of time. Journalism needs to be fast rather than deep. Since the Pikettymania has started, I think it is fair to say that the overwhelming majority of journalists reporting on “Capital in the 21st century” haven’t read the book, and have relied on second-hand accounts by other journalists instead. Of course, this is a very long book and journalists simply don’t have time to read long books, especially if they have to maintain their twitter account beside writing articles. But this has tended to create what Bourdieu called the “circular circulation of information” where most media outlets have simply tweaked the titles used by other media outlets to report about it, adapting it according to their pre-existing ideological agenda without engaging with its content. The same has happened with the FT/Piketty affair, where most media outlets have reported on the FT criticism by hyping it up and reporting on the FT’s “takedown” without engaging with or evaluating the substance of the criticism. Fraser Nelson jumped on the bandwagon right away, accusing Piketty of “fiddling” data with a somewhat idiotic and hasty Schadenfreude. The FT seems to have given Piketty 24 hours to reply to their piece in the same edition, which is preposterous to give a substantial reply if you need to teach or even do substantial research on the topic. It takes often 2 years or more between the time I write an academic article and when it is published. I write it, revise it, present it at a conference, get feedback, revise it again, submit it to a journal, it is rejected, I revise it again, submit it again, am asked to revise it, until it is accepted. Hopefully, this leads to more serious and reliable scholarship, but journalists have really a hard time understanding that making reliable science takes time.

The second difference is perhaps cohesiveness. In academia, you make a reputation for yourself by criticising what others do or what they miss, and emphasising how what you do is original. Anybody that has gone through a journal peer review process knows that criticising others is much easier than doing research yourself, and this often creates fairly nasty battles. There is surely competition and criticisms among and between media outlets, but what always strikes me is the extreme degree of corporatism of journalists as a whole. While their job is to criticise and hold people to account, journalists are actually very bad at taking criticism and being held to account for their mistakes. Attacks by outsiders on the handling of a particular news event are often dismissed as attacks against journalism or press freedom itself. Journalists are always right, and journalism is what journalists are the most interested in. This applies to every sphere: plumbers certainly consider plumbing to be a cornerstone of modern civilisation, and most academic blogs actually talk about academia rather than subjects that academics study. But the difference is that journalists have a disproportionate visibility for everybody else because, well, they work in news outlets. This has applied in the FT/Piketty case as well. First, the debate would never have been hyped up so much if it had come from an academic. As written above, journalists don’t read academic papers of even academic blogs: they read other newspapers. Hence many news reports had a manifest pro-FT bias, showing how journalists were so good at debunking theses by professional academics. This was propped up by a journalistic norm which requires journalists to give balance to a subject by always including criticism of an argument, or “the other side of the story” even if the criticism is stupid or not credible. When I wrote a piece on dualisation in academia comparing it to a drug gang, I was asked a few questions by an Australian journalist who told me she had found the piece “just brilliant”. The article they published afterwards ended with a quote from a tweet calling my piece “a load of bollocks”. I was told the tweet had been inserted to “add balance”. A good controversy is always better than one plausible argument. When the criticism comes from a fellow journalist, you kill two birds with one stone.

The third is a huge difference in standards. Almost all news reports have lauded the FT’s “very serious work” in “debunking” Piketty and digging in his data. Now this was surely good work by journalistic standards, but it must have taken 3-4 days. By any academic standard, it is a bit light to debunk a 600-page book drawing on 10 years of research. The FT piece was apparently checked by an unnamed “economics expert”, which, as far as the reader could tell, could be the author’s aunt, or a banana. It was quite striking to read journalists denouncing Piketty’s lack of transparency – “he needs to explain himself” – whereas he put all his data online. Such a level of transparency is simply never seen in journalism. In journalism, dodgy data are used every day to support doubtful theses that will sell copies, and plagiarism is common: a Google search with the keywords “Daily Mail plagiarizes” yields 8’630 (!) results, and that’s only with the American spelling. A few months ago, a Greek newspaper asked me if they could quote from a blog post of mine. I said yes, but when I saw the finished product a few weeks later, they had made up an interview with me that never happened, where they had copy-pasted and translated my blog post, inserting questions in between, presenting it, I suppose, as a sort of exclusivity next to a picture they had found online. I am not saying that these practices are generalised, nor that there isn’t bad practice in academic research sometimes, but there are much higher barriers to entry in academia – get a PhD – and this type of malpractice is severely punished. Nowadays, the multiplication of media outlets – competing for falling advertisement revenues – means that anybody can claim to be a journalist – many people are simply ready to work for free – and the standards are often simply dismal. Hence, the critique of Piketty by many newspapers in this case was not only unfair, but was also a disgraceful example of double standards.

The man who is wrong about everything, and especially the EU

Reading the columns by Conservative eurosceptic MEP Daniel Hannan in the Telegraph is a somewhat masochistic pleasure: I suppose the reason why I do it is that I have become fascinated by the degree to which I systematically disagree with absolutely everything he says and advocates. Daniel Hannan is a champion of British free-market conservative chauvinism, which is quite admirable for somebody who grew up in Peru. He lashed the NHS on Fox News, saying it’s a 60-year mistake, declared Enoch Powell was his political hero, he’s been advocating a pact between the Conservatives and UKIP, he says that the decline in foreign language learning in Britain is a totally rational “market response” (even if he himself, of course, speaks French and Spanish) and claimed that Shakespeare was “the greatest imaginative intelligence evolved by our species” because he was British, the greatest civilisation of all, as he argued in a book that Niall Ferguson had already written. It is a bit like eating broccoli: I eat it from time to time just to remind me of how I hate it. Sometimes I wonder if that’s because all his political positions are really diametrically opposed to what I think, or if I oppose them because they’re voiced by Daniel Hannan. If he advocated the protection of kittens, I would perhaps want them drowned.

Yesterday, Daniel Hannan wrote a piece titled “Euro-federalists have created precisely the angry nationalism they kept warning against”, essentially blaming the EU bureaucracy and regulations for the rise of eurosceptic and xenophobic parties. Following this logic, you can also blame black people for the apartheid, jews for the Holocaust, and foreigners for racism. What is interesting is that Daniel Hannan is the kind of libertarian eurosceptic that considers the EU as a socialist superstate and want a freer market instead: less state, more market, the global race and all that. I think that believing that freer markets and less EU bureaucracy would lower support for populist and nationalistic parties is completely wrong. If you consider for a moment that support for Eurosceptic parties is really directed against the EU, it is directed against its market-making dimension, and notably the free movement of labour, rather than its political dimension. People don’t care about the EU politics or bureaucracy: they don’t see it and probably don’t know it exists. What they may care about is industries closing down to go to cheaper places elsewhere in the EU, large corporations not paying their taxes because of profitables tax arrangements in Luxembourg or the Netherlands, or people with better skills or ready to accept lower jobs coming into Britain. Now the kind of libertarian world that Daniel Hannan advocates would precisely feed this kind of sentiment rather than appease it, just like the period of unregulated markets in the early 20th century fed fascism and communism as a mode of protection against markets.

This is especially interesting because Daniel Hannan has a somewhat funny conception of the free market. In a previous column, he justified why he abstained in the vote of the abolition of mobile phone roaming charges in the European parliament, while a very large majority of MEPs voted in favour (UKIP voted against). He basically said that abolishing roaming charges will benefit people who travel, while telephone companies will have to increase domestic prices to make up the shortfall: “Teenagers on housing estates in Sheffield will end up paying higher bills so that Cleggie can have cheaper roaming when he’s in Brussels or Spain”. Daniel Hannan, the Robin Hood of modern times. This argument is plain stupid. It would make sense if roaming fees were a real service whose cost had to be passed on from one category of consumers to another, as Hannan implies. However, roaming fees are just a big rip-off. They are essentially a private tax on other operators imposed by large players with a stranglehold in the market, and their amount do not correspond to any real operating cost. A good way to understand when you’re being charged for thin air is when the same service can drop in price very quickly, or varies tremendously across countries in an industry where labour costs don’t factor much. I once went to Portugal with a German and a Swiss phone, and received a message on both indicating the roaming costs: 46 cents on the German, 1.40 on the Swiss (remember Switzerland, that country outside the EU?). How could prices vary so much if they really represented the costs of connecting my phone abroad via the same network? How can you decide to scrap these charges overnight without increasing prices? How can roaming cost just a fraction of the price if you subscribe to a plan? The answer is: that’s because they’re a fee imposed on you because operators can, and not a cost that operators have.

For once, there is one market-enforcing European regulation that really benefits people, and Daniel Hannan opposes it. He prefers large telecoms oligopolies extracting fees from consumers for no real reason. So much for the free market, Daniel Hannan.

The far right vote in the European elections: It’s not the economy, stupid


In the European elections yesterday, the far right has done extremely well in the UK, in France, Austria and Denmark (four fairly affluent Northern countries) while – Greece set aside – it has stayed non-existent in the countries most severely hit by the crisis, Portugal and Spain. Golden Dawn in Greece is the exception, but it is nowhere near UKIP, the Front National or the Danish People’s party. The idea that crisis and unemployment feed the far right is appealing, but it does not seem to be supported by facts.

I have made a quick scatterplot plotting together the share of votes for the biggest far right party in each country that took part in the EP elections 2014 yesterday (on the y axis, from Euractiv) and the harmonised unemployment rate (on the x axis, from Eurostat) (Stata datafile here). Any mistake in the coding of far-right parties is mine (I am not overly confident about central and Eastern Europe), and this classification is surely an always contentious issue. There seems to be a small to moderate negative correlation between these two variables (the lower the unemployment, the bigger the far-right vote), but of course there may be a myriad intervening variables, and this is a much too coarse analysis. There are many countries where there is no or only an insignificant far right party, and one doesn’t know how this relationship would look over time, namely with different levels of unemployment across time within the same country. However, the fact that the strongest far right parties stem from countries that are doing relatively well economically (in the upper left corner) is quite significant.

There are a number of possible explanations for this, outlined notably in Cas Mudde’s excellent book on the far right, where I took the tile for this post. First, far-right parties may not do that well when the economy is doing badly because they are generally not considered very competent in terms of economic and social policy: their main selling point is immigration and law and order. France is surely not doing great at the moment, but the FN vote has surely more to do with anger at the current government than a genuine belief that the FN is the best choice to restore economic growth: when unemployment and growth come centre stage, far-right parties tend to be eclipsed because they do not “own” these issues. By contrast, high economic growth tends to be accompanied by higher immigration, the topic that far-right parties can capitalise on.

Second, the move to the right of well-off countries who have directly or indirectly bailed out poor countries during the crisis may be understood as another sign that far-right parties are insider rather than outsider parties. They appeal to people who have something that they don’t want to lose, rather than to people who have lost everything.

A modest proposal to improve the efficiency of assessment in universities


Essay writing and assessment is a drag. For academics, it eats out an awful lot of time which could be devoted to research or other productive activities counting for tenure. For students, writing essays requires a great deal of investment and time which could be more productively spent on facebook or other things that the youth of today does. Moreover, the extent to which it really is able to assess learning – rather than abilities acquired or inherited completely outside university – is questionable.

Luckily, the student side of it is being rationalised along market principles. A couple of weeks ago, at a time where most students are precisely writing essays for May deadlines, I was handed out the card above right in front of the entrance of my university. The man who was distributing cards for this “essay and dissertation help” company was surely unaware that I am actually supposed to mark essays rather than write them. Arrived in my office, I checked the website (deleted here not to provide any “advertisement help”) and the “help” provided is fairly straight forward: they write essays for you. You give the subject, word length, the deadline, and the website provides an “instant quote” with a list of prices which depend on the grade you want. This is what I got for a 3500 word essay in politics with a deadline in two weeks:


Now, this system has a number of deficiencies. First, how can you be sure that you will get the grade that you paid for? I wonder how the writers who work for this essay mill – surely drawn from the army of underpaid PhD students roaming around in need of income to survive – manage to lower their level to a 2.2 standard, for instance. Second, given the somehow shady nature of the activity, how can students who paid for a First and got a 2.2 obtain compensation? They surely won’t seek redress from justice by exposing their own practices. Third, this does nothing for the time wasted by academics to mark these essays, so that the system remains broadly inefficient. There is no reason why students should be the only ones benefiting from the wonders of outsourcing.

A simple solution to this problem would be to diversify the activities of these essay mills to cater for the needs of academics as well. Teachers would outsource the marking of the said essays to the same companies that write them for students. Shady “essay mills” would become very respectable “assessment contractors”. This would increase the efficiency of assessment for both students and academic staff. The first advantage of this would naturally be to relieve academics from the burden of reading and marking essays. The second would be to reduce the uncertainty for students: if the same company writes and assesses the essays, it can make sure that they get the grade that they paid for. The natural evolution of this would of course be to suppress the essays altogether, and students would pay the assessment contractors directly for their mark. The payroll costs of the assessment contractors would go down because no actual writing would take place, and profitability for shareholders would increase. As I argued in another modest proposal, there is no reason that the practice of marketisation that has been so successful elsewhere shouldn’t be extended to assessment, for the benefit of teachers and learners.


A succinct political economy of the UEFA Champions’ League

The final of the UEFA Champions that will take place in Lisbon on May 24th is remarkable for a number of reasons: it will oppose two teams not only from the same country, but from the same city (Real and Atletico Madrid), none of which actually won the Spanish Liga last year (FC Barcelona did). Such a final would have been impossible in the 1980s and early 1990s, when only the winner of each national league was allowed to take part in the most prestigious European club competition. In 1986, Steaua Bucarest won the European Champions Clubs’ Cup, as it was called then (against Barcelona, on penalties), and in 1991, the Red Star Belgrade won against Marseille, again on penalties. Nowadays, it would be difficult to imagine Red Star or Steaua winning the competition, partly because it has become much more difficult for the champions of low-ranked national leagues such as Romania or Yugoslavia to actually make it to the group stage.

This year, Steaua Bucarest had to go through two qualifying stages to make it to the pool stage; the Romanian league is granted one representative, providing it makes it through the qualifying rounds. By contrast, up to 4 teams of the best – and richest – national leagues (England, Spain, Germany) can take part in the Champions League, and they will have up to 5 or 6 clubs as from 2015. In total, up to 7 clubs from each of these countries currently take part in Continental competitions, Europa league included. It is true that if the share of the cake of rich countries has expanded, the size of the cake has also increased with the multiplication of participants in the competition (from 16 teams in the group stage in 1996 to 32 teams in 2013). However, what we have witnessed over the last 20 years is a considerable movement of concentration where the richest clubs are almost guaranteed a spot in the Champions League and its huge TV revenues, while the league winners of smaller football nations have to go through a number of hurdles to access it. How can we explain this evolution?

Until 1992, the European Champion Clubs’ Cup was a straight knockout competition where only the champion of each national league, and possibly the winner of the previous competition, were allowed to enter. Straight knockout entails a great degree of risk for bigger clubs, as they are not sheltered from a bad game, or an elimination on penalties. However, the financial stakes back then were not as high as they are now because of two big limits on revenues. First, the number of bidders for TV rights was smaller and essentially limited to public TV broadcasters; the number of private TV channels was nowhere near what we see today. Second, the market for football players was subjected to the equivalent of massive import quotas, as clubs were not allowed to field more than three foreign players in their team. For European competitions, Welsh, Scottish or Northern Irish players playing in English teams were even considered as foreigners and therefore included in the quota of foreign players. Hence, the demand for players was smaller because only few foreign players could actually employed, and salaries were also much lower. Besides, the bargaining power of players was also limited and the balance tipped towards their employers, since they needed the agreement of their club to leave, providing a transfer fee even if their contract was ended. This would change dramatically with the Bosman ruling, which completely transformed the face of European football.

Jean Marc Bosman was a fairly obscure Belgian player whose contract with Belgian club RC Liege had expired in 1990, and wanted to move to the French side FC Dunkirk. However, Dunkirk refused to pay the transfer fee asked by Liege, and Bosman was left unemployed. Bosman took his case to the European Court of Justice, which ruled  in 1996 that the restrictions on the number of foreign players in European football clubs contravened to the principle of free movement of workers in the European Union, and that the payment of transfer fees when players’ contracts had expired was illegal. The implications of this ruling have been massive. First, the best – and richest – clubs now had access to all the best European players, contributing to a massive take-off in the attractiveness and revenues or the best football leagues – England being the prominent case – but also to a massive concentration of talent in a few very rich leagues. The best players in each European league could now move freely to the richest leagues in pursuit of higher salaries. While a team like Ajax Amsterdam was able to win the Champions league in 1995 and reach the final in 1996 with a pool of almost exclusively home-bred players (Davids, Kluivert, Frank & Ronald de Boer, Rijkaard, Seedorf, Overmars and others), after Bosman it has become increasingly difficult for a team like this to retain its excellent young players for long in the face of the much higher salaries that British or Spanish clubs are ready to pay for them.

Before Bosman, the demand for young foreign players was limited because clubs couldn’t make them all play anyway. Nowadays, teams such as Chelsea or Arsenal regularly field teams with no or very few British players, and regularly recruit very young foreign players even before they have played for the professional clubs that have formed them. The increase in demand for foreign players contributed to the skyrocketing salaries of the best players, as the demand was no longer limited by quotas. Moreover, the scrapping of out-of-contract transfer fees gave more power to players and their agents to negotiate higher salaries and sign-in fees, agents taking a cut in ever bigger deals. Before Bosman, players could not threaten their employer to leave at the end of their contract; after Bosman, players could ask higher salaries in order to stay. In 1996, the world’s biggest transfer was Alan Shearer’s 15 million GBP move from Blackburn to Newcastle. In 2013, Gareth Bale moved from Tottenham to Real Madrid for nearly six times that amount (86 million GBP).

With the increasing attractiveness of the bigger leagues able to recruit the best players and the multiplication of private TV channels competing for TV rights, there was a lot more money to be made in the football business than in the past, but also much bigger salaries to be paid to star players. In 2013, Premier League clubs paid 1.6bn GBP in players’ wages, while the TV rights of the Champions League for Britain were acquired for 1bn GBP by BT sports, a branch of the privatised former telephone monopoly, thereby outbidding Sky and ITV. From the late 1990s, the Champions League was to become the most lucrative European competition precisely because it would be the place where all the best clubs from the richest leagues would play against each other, and therefore where the most expensive TV rights could be sold. Now, restricting access to the competition to only one club per country meant a severe loss of potential revenue for many of the big clubs in Spain, England, Italy or Germany, especially since they needed these revenues to pay the skyrocketing salaries of star players. Hence, they needed to guarantee their steady participation in the CL bonanza.

In order to defend their interests, the richest clubs formed the “G14” in 2000, a lobby group whose aim was to put pressure on the UEFA and FIFA on behalf of the big clubs, for instance by forcing them to pay the salaries of their players while playing for international competitions such as the World Cup or the Euro. In this context, the G14 also wanted better guarantees to participate in the lucrative Champions League. A major lever of blackmail was the threat to form its own closed international competition gathering all the major clubs, as outlined in a policy document leaked in 2006. Such a model is already practiced in European Basketball: the “Turkish Airlines© Euroleague Basketball”, for instance, the basketball equivalent of the UEFA Champions League, works with a system of licenses where 13 rich teams are guaranteed to take part in the league more or less independently of their national performance, a bit like the US system of franchises in the NBA or NFL. Basically, the Euroleague model is what the richest football clubs threatened to do in order to guarantee their TV revenues: if they weren’t granted more spots in the Champions League, they would go and form their own European League where Barcelona, Real, Manchester, AC Milan or Arsenal would play against each other, deserting official UEFA competitions and basically emptying them from their interest.

To use a concept by the economist Albert Hirschman, they used their power to “exit” in order to increase their “voice” within European football competitions. Eventually, the G14 disbanded in 2008 and accepted to abandon its court cases against UEFA, but only after significant concessions were granted as to the influence of the big clubs in the running of football competitions (e.g more Champions League spots), and the creation of an official body within UEFA for clubs’ interests, the European Clubs Association gathering about 200 members. However, tensions about revenues are still present. In 2007, UEFA president Michel Platini, championing an agenda of democratisation of the competition, changed the rules again so as to allow better chances for winners of lower associations, who would be competing against each other for five spots in the pool stage instead of playing against runners-up from the big leagues. As could be expected, big clubs whose chances to access the TV revenues were not amused. In 2011, the “exit” threat to create an alternative competition of the biggest clubs was revived. The 10 bigger clubs argued that they would no longer be committed to take part in UEFA competitions after 2014, and would be free to set up their own competition in which they could manage the revenues and TV rights themselves without UEFA. A board member of ECA was explicit about it:

“The fact that Bayern Munich, who have always been close to the institutions, are being so vocal and loud about the situation is a clear sign we’re very close to breaking point. We have a memorandum of understanding with Uefa that expires in 2014. After that time we can no longer be forced to respect FIFA statutes or UEFA regulations. And we won’t be obliged to compete in their competitions.” When asked what that would mean for clubs’ finances if they were to withdraw from the Champions League, which generates tens of millions of pounds a year for his organisation’s richest and most influential members, the ECA board member responded: “Don’t be naive. Don’t think there would be no alternative competition.”

Now, a compromise could be found in the new memorandum of understanding between the UEFA and ECA which runs until 2018, but beyond that, the creation of a closed European super league may become a reality, as acknowledged by Istanbul’s Galatasaray Chairman in October 2013. So far, threats of exit by the richest clubs have contributed to increase their power within the UEFA and increase their representation in the competition. In the long term, however, an actual exit and the creation of a closed European super-rich, super-league may enable them to manage their own revenues. In the even longer term, and since the multiplication of games per season has been a major concern for clubs, one could even imagine the disappearance of national leagues, or national leagues devoid of the best teams, who could play a season-long championship against the best teams from other countries. In the future, it could not only be near- impossible for teams such as Steaua Bucarest or Red Star Belgrade to win the Champions league, but plain impossible because they wouldn’t be allowed to take part in the first place.


“A useless pile of half-truths and sensationalistic linkbait”

Dear Mr. Salustri,

I am the author of the piece “how academia resembles a drug gang” that you describe on your blog with the words above. You also write that it is “mortally flawed”, “laughable” and “a complete mischaracterization”. You call my argument “stupid” in a reply to a comment on your piece which defends mine.

My piece, originally published on my blog in November last year, has now been viewed 267’000 times (not counting the version on the website of the London School of Economics), shared more than 10’000 times on Facebook and more than 2000 times on Twitter. I was the first to be astonished by this success, but I assume that it wouldn’t have been shared so widely if it was only “sensationalistic clickbait” and didn’t contain some real insights about the functioning of academia. The comments about the blog have been overwhelmingly positive (on twitterhere or here). Outlets such as Science, the Times Higher education have reported about it. The title is of course overtly provocative, but the piece tries to make a very serious point by using comparative data. You essentially dismiss all of it with the qualifiers above. I thought I should reply to some of your claims, at least those that I can make sense of.

Firstly, you are right to say this piece is “not what one should expect from the London School of Economics” because I work at King’s College London, as is made clear at the bottom of the article. This just shows how carefully you have read the piece.

Secondly, you criticize my perspective, arguing that academics are “not in it for the money”. Now, this is not the point that I make in the piece. My point is to outline the dynamics of dualisation in academia between a shrinking core of insiders and an expanding core of outsiders in precarious positions. I use drug gangs as the most extreme example of such a situation, by trying to explain why “outsiders” accept to stay in academia in spite of very precarious job situations. I am happy to read that your combined income “allows my wife and I to not be particularly worried about our finances”, because many academics are: precisely because of the dynamics I talk about. The incentives are surely not only money, but also precisely the things that you cite (although if you want to “escape pedantry”, academia is probably not the right place to go). My point is that the difference between what is promised to prospective PhD students and the actual reality of academic prospects is huge, just like in a drug gang. I am not saying that academia is like a drug gang, I argue that its logic is similar. I accept that it is an inconvenient characterization, especially for respectable tenured professors, and others have also dismissed it as stupid *without even reading the piece*, but I still think it is accurate.

Thirdly, you criticize how I use the data and evidence in different countries. It is of course true that Slovakia produces much less PhDs than the United States, but the proportion of PhDs as as share of the population is surely the relevant measure, and not the absolute number because that’s what gives an idea of the capacity of different countries to “absorb” their production of PhDs. Of course Slovakia produces fewer PhDs, but Slovakia also has much fewer potential jobs. I accept the idea that the academic job market is not limited by national boundaries, and is largely transnational. Now even if we would consider the world as a whole, the relation between the “global production” of PhDs and the number of permanent jobs available changed dramatically: the number of jobs available has been massively outpaced by the production of PhDs. Now this precisely supports my point. After that, you write that I do not take into account the Bologna Process, “ the anti-science and anti-education lobbies” in the US, “the effect on academia of the billions of dollars that America spends on defence – more than any other country in the world”, I ignore Germany’s “tumultuous recent history, including reunification and becoming probably the most important country in the EU”, and my analysis of the UK “ignores the impact of the development and growth of the EU on UK, which has been staggering”. Well, I also completely ignore the fact that the weather in the UK is usually bad, that Germany won the World Cup in 1990 and that the United States put a man on the moon in 1969. I simply do not understand how the factors you mention challenge my analysis, and you make no effort to explain how either. Being Portuguese, I am well aware of the context of austerity in Greece and Portugal, but again, this reinforces my point: the discrepancy between the increase in the number of PhDs before the crisis and severe cuts afterwards has created a large mass of “outsiders” left with dire job prospects.

Coming back to the general discussion about PhDs, I happen to have had a look at another piece published on your blog which discusses a similar argument than the one I make. I was particularly struck by one segment of it:

Getting a doctorate isn’t (or, rather, shouldn’t be) just for specializing in a particular area; it gives one a chance to refine one’s thinking skills, to become a better reasoning agent, to make better decisions generally.  And this gets us back to the success of a society.  The better people can think, the better the decisions they make, and everyone will benefit. Some find this laughable because of the cost, time, and effort required to get a PhD.  What’s the point, they might argue, in getting a doctorate if you’re just going to be a tradesperson, or a shopkeeper, or an office worker What’s the point indeed.  Most people who would ask such questions haven’t got advanced education anyways. Which rather proves my point.

I found this piece problematic and condescending. I find it perfectly legitimate for people “who do not hold advanced degrees” to question how the money is spent in higher education, especially if they are subsidizing rich people to get these “advanced degrees” while themselves or their children are often excluded from them: rich kids are highly overrepresented in college, so that higher education spending if often a transfer from the low-educated poor to the higher-educated rich. Of course I agree with you that education is good for everyone, but dismissing criticism as simply “stupid” – which seems to be your method of analysis in general – simply delegitimizes the critical approach and openness that should characterize academia. Second, it is all good and well to write that getting a doctorate is not about finding a job but becoming a better citizen, but it is is fairly naive to think that PhD students do not build expectations as to a career in academia, and the point I was making is that the structure of the academic job market is bound to disappoint these expectations.

Please note that i have refrained from using the kind of vocabulary that you use in your own post, even if it was fairly tempting.

Yours faithfully,

Alexandre Afonso