Why Greece Needs a Pinochet: A Modest Proposal

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A panel of distinguished German experts led by Lars Feld have recently written an interesting column about the Greek debt crisis. It largely echoed a recent piece by Jürgen Stark, former (German) European Central Bank Board member. The gist of these two pieces is basically a) that the problems that Greece faces are essentially self-made b) That austerity works and is the only solution to solve Greece’s economic problems c) that the newly elected Syriza government should continue on the path of drastic austerity of its predecessors in spite of the unrealistic promises it has made to its voters. Germany, of course, is acting responsibly whereas Southern countries have lived beyond their means:

“The political elites of the eurozone periphery are responsible for having lost access to the financial markets in 2010. Years of mismanagement and failure to observe the rule of law have led to increasing budget deficits and mounting debts (…) The truth is that, in contrast to many eurozone countries, Germany has reliably pursued a prudent economic policy. While others were living beyond their means, Germany avoided excess”

Of course, this view has been criticized by dangerous leftists such as Paul Krugman and Simon Wren-Lewis, who argue that the pain inflicted by austerity reforms could have been avoided if it had been carried out less violently, more slowly, or possibly if Greece had left the Eurozone, through external – rather than internal – devaluation. Now, since the Syriza government has committed to stay in the Eurozone, internal devaluation is the only available option, and prices and wages should go down. The state should be rolled back, the public sector downsized, pensions should be cut, wages should decrease, the labour market should be deregulated.

The problem with the reforms favoured by our German friends and the Troika is that they are very difficult to implement in a democratic regime where voters can kick out governments out of power. Indeed, such measures tend to be very unpopular, and governments trying to implement them are bound to face significant electoral losses up to a point where they can no longer rule. This is precisely what happened in most countries of the European periphery, where incumbents at the beginning of the crisis have been systematically voted out of power (e.g Fianna fail in Ireland, the Socialists in Portugal and Spain, Silvio Berlsuconi in Italy, and more recently PASOK and New Democracy in Greece). In Italy, Spain and Greece, anti-austerity or anti-system parties have become leading political forces ahead of established “centrist” parties.

The latter have tried to band together in political cartels to implement unpopular austerity reforms, but this strategy has faced severe limits. Indeed, their electoral base has shrunk to a point where they may no longer hold a majority, as happened in Greece. Hence, the main stumbling block impeding Greece from implementing further austerity is a democracy where dissatisfied voters hit by unemployment and falling living standards can vote governments out of power. Karl Polanyi rightly showed that market liberalisations always create a countermovement of protection from society, and citizens badly hit by austerity will turn to political forces that promise to stop the pain, triggering a “countermovement”. This is why extreme austerity such as that implemented in Greece seems difficult to reconcile with democracy.

There is of course a fairly simple solution to this, and that is the establishment of a military junta such as that of Augusto Pinochet in Chile, which has been praised by the likes of Friedrich Hayek and Milton Friedman for the extensiveness of his economic reforms along market lines. Technocratic governments in Greece and Italy were already an attempt to suspend democracy and implement austerity partly in isolation from electoral politics. However, they proved short-lived an fragile. A real military regime would have nothing to fear from unhappy voters bearing the consequences of austerity reforms, and the occasional protest could be easily dealt with through military repression. Pay cuts, which are difficult to achieve in a system with powerful unions, could easily be enforced with military intervention in factories. Portugal’s Salazar, for instance, has a fairly good record in wage restraint during the 1950s and 1960s under state control over unions, and demands observed elsewhere to expand social programs could be swiftly squashed by the political police. It no coincidence that Chile was able to achieve such a level of economic liberalization whereas other countries were wasting time with the consensus-building imposed by democratic institutions.

Greece displays a number of favourable conditions for the establishment of such a political regime. First, it has one of the biggest armies in Europe compared to its population, and up to the crisis, had the largest military expenditures as a share of GDP in the European Union. Second, it also has a past of military dictatorship (1967-1974), and the large support received by Golden Dawn in the last elections shows that a sizable share of its population would be confortable with a fascist regime. This creates good conditions for radical methods. These are clearly the only way to overcome opposition to the radical economic reforms that the Troika and Germany wants implemented in Greece.

Syriza shows the failure of ‘cartel politics’

As expected, the radical left party Syriza was the big winner of the Greek elections, coming only two seats short of an absolute majority in parliament. But it’s unclear if new Prime Minister Alexis Tsipras will be able to effectively pursue his anti-austerity agenda and renegotiate the terms of the Greek bailout with creditors — and he will surely need to make a number of concessions to its coalition partners, the Independent Greeks, a right-wing anti-immigration party.

What does this victory mean for Greece and for the debt-ridden countries of southern Europe?

Read it over at CNN.com.

Read our article on austerity politics and clientelism in Greece and Portugal in the Journal of European Public Policy.

Charlie Hebdo: In praise of outrage

The kind of humour practiced by Charlie Hebdo has no equivalent in the English-speaking world. They did not care if its satire offended governments, the pope, the clergy, Islam, the police or the army. While it has received international attention for its satire of Islam and religious extremism, nobody has been spared by its vitriolic humour. People who have read reports about it in the English-speaking press may have perceived it as a xenophobic outlet, but it wasn’t. The Front National and the rants of Michel Houellebecq were as likely to be their target as the taliban. What it fought for was the right to criticize and ridicule anybody in a position of power or authority, a stance with a long tradition in France, as well explained by Art Goldhammer here. That’s basically why its forerunner, Hara Kiri, was closed down (or rather banned from sales to minors and publicity) by the French government when it dared make fun of the death of Charles de Gaulle (“Bal tragique à Collombey. Un mort”). Some of it was tasteless, but it took a great deal of courage to face the government and fundamentalists in such an upfront way. It fought for the right for any institution, religion or country to be criticised and ridiculed equally. Some say that they were going too far, but sometimes you need people who are ready to go far to test the limits of democracy and prevent it from shrinking. There is no real equivalent in Britain or in America because many media outlets are obsessed by the fear of offending anyone or anything, for fear of retaliation, accusations of racism or lawsuits for libel. It is quite telling that no British newspaper has dared publish any of the front covers of Charlie Hebdo, even those that did not concern Islam.

In general, those that criticise political correctness and the “PR brigade” usually do so as an excuse to utter xenophobic or misogynistic opinions whose ultimate goal is to censor those that are different from theirs. For instance, Nigel Farage claims the right to say the most outrageous things about immigrants, but then criticises their right to speak their own language on trains. However, very few people or outlets actually assume the egalitarian stance that Charlie Hebdo adopted (and hopefully will continue to adopt in the future), that is, to say “screw you” to everyone and dare to say anything about anybody. They adhered to what Max Weber called the “ethics of conviction” (do what you believe in notwithstanding the consequences”) rather than the “ethics of responsibility” (consider the consequences even if it means betraying your ideals). Many people in Britain adhere to the second. This is because in Britain in particular, any little insignificant word or stance will be taken as a potential offense against one or the other group. Tottenham fans were to be denied the right to called *themselves* yids; the scientist who landed that device on a comet had to apologise because of his allegedly misogynistic shirt; Tintin comics are banned from the shelves because of their racist undertones that were common in the 1930s. Boris Johnson even said that the super-rich are an oppressed minority that shouldn’t be stugmatised. Everything has now become beyond the limits of what is acceptable to say.

However, this only concerns words, and not behaviours. Politically correct language has become a cover for the most abject policies in the areas of immigration and welfare, very often in the neutral, technical, inoffensive language of efficiency and fairness. Adolf Eichmann mostly described his work not in vivid ideological arguments, but in cold, technical words like quantities, solutions, efficiency. The fear of offensive words potentially leads to absurd situations, for instance when Jesse Jackson, a leading figure of the civil rights movement, is forced to apologise for using the word “nigger”. This creates a climate where the wrong people are stigmatised and the real issues are neglected (see Ferguson and white privilege) but also where the control over what we say (or draw) is exerted by those with the most extreme views, or those that want to impose their views on others. I am also a strong believer in the idea that self-censorship in words and images actually leads to the most deviant behaviours: what doesn’t come out often rots in the inside. For instance, I have always been amazed by US puritanism about swearwords and nudity not to offend children and family values, contrasting with gun violence and teenage pregnancy rates seen nowhere else in the advanced world. By respecting the moral authority of no-one, Charlie ensured the freedom of everyone. This was surely worth dying for.

A Political Economy of the Rebranding of King’s College London

My university has decided to rebrand itself as “King’s London”, abandoning the name it has sported since 1828/. According to an email sent by the principal Ed Byrne, market research

“revealed that our current name was causing considerable confusion: is King’s a residential college, is it an academic college akin to the colleges of Oxbridge, or is it an educational institution of some other type such as a further education college? Internationally, there was further misunderstanding as ‘College’ is not a widely understood term in many countries”.

This decision has caused a massive uproar from the student community. The reactions on social media have been overwhelmingly negative, a petition to oppose the rebranding has gathered more than 11’000 signatures in about 3 days (KCL has about 25’000 students), and the facebook page against the rebranding now has 2’500 “likes”. In spite of the “wide consultation” that senior management claims to have carried out, most students and staff had never heard of these plans announced on Wednesday, and it has quickly turned into a big PR disaster only partly hidden by KCL’s stellar results in the Research Excellence framework. Now King’s may be “rethinking” its rebranding plans in the face of the massive backlash.

How can we explain this? Without singling out KCL (thanks to which I manage to pay my rent every month), I think that what happened with the rebranding of KCL is fairly symptomatic of the hierarchical system of governance of British universities. It also reflects the way companies are run in Anglo-Saxon economies as compared to Continental countries. This often results in erratic decisions implemented in a top-down manner, with little involvement from people directly affected by them, including students. In fact, their involvement in the governance of British universities is minimal, and their role is essentially constructed as consumers rather than stakeholders.

In comparative political economy, we usually differentiate between a “shareholder” and a “stakeholder” model of corporate governance. The shareholder model as practiced in the UK or the US gives greater power to shareholders (those who own firms) and little to stakeholders (e.g employees). The governance structure of British or US firms is hierarchical, with a greater concentration of power in the hands of managers, and top-down command structures that can react quickly to changing market conditions. The main way for shareholders (and employees) to exert power is through exit, either by selling their shares or quitting their job. By contrast, the stakeholder model as practiced in Germany or other Continental countries gives greater power to stakeholders, for instance via elaborate structures of employee representation (works councils, etc.). This makes decision-making structures slower but ensures a wider consensus among the the actors involved in the firm, who do have a voice in the governance of companies.

The way universities are run in different countries largely mirrors these differences. In Britain, power is concentrated within a fairly hierarchical structure of management with little veto power for other actors. One symptom of this is the strong role of vice-chancellors, whose stellar pay packages have attracted quite a bit of controversy lately, and the weak involvement of staff and students. In contrast, there is involvement from business actors from outside and a much larger layer of professional “senior managers”. The funding structure of higher education in Britain clearly creates these incentives for universities to be organised like for-profit endeavours, via the fierce competition for student income streams and research funding. For instance, the governing body of KCL is the college council, whose members are drawn from the professoriate, senior management and “lay members” drawn from private companies. The Chairman of the Council (and descendant of the founder of KCL the Duke of Wellington) Lord Douro is also the chairman of a luxury goods company, while other members are drawn from a variety of business backgrounds (e.g communications multinationals or the food industry). The college council only counts one student member, the president of the student union. To my knowledge, there is no institutionalised voice for junior or middle-tier staff, even if there are a number of consultative committees.

This structure differs sharply from my home university in Switzerland, where the Rector is elected by a University Council constituted by an elected body of Professors, junior staff (including PhD students), support staff (office managers, cleaners) and students, and which vets the members of the university direction designated by the rector. Obviously, this system makes decision-making much more cumbersome (change is very incremental, to say the least) , but it also ensures a great deal of consensus within the main stakeholders within the university. Similarly, students and junior staff are more involved in the day to day business of university. When I told my my colleagues in Britain that students and PhD students would be routinely involved in search committees for the appointment of new staff (I know it is also the case in the Netherlands), they would look at me as if I was coming from planet Zorg. Within this context, it is also difficult to imagine decisions such as the programme of mass redundancies that KCL carried out in its health school this year, or the said rebranding because of the number of veto points these plans would have to overcome. Now Swiss universities may not have the reputation of British institutions, but they nevertheless do very well in international rankings.

In a nutshell, British universities seem to be run more like companies, and companies prone to massive blunders, whereas continental universities are run a bit more like democracies (and perhaps subject to sclerosis). The concentration of power within British universities in the hands of managers and business people also probably underpins their obsession with ruinous outsourcing endeavours. The said rebranding, commissioned to Saffron brand consultants, is said to have cost the sheer amount of 300’000 pounds while financial issues have been the main justification for staff cuts.

What is perhaps the most interesting with these developments is that the explicit goal of recent university reforms was to “put students at the centre of higher education reform”. In the words of former Higher Education minister David Willetts (who recently joined King’s as a visiting professor)

Our changes to the financing system will also drive structural reforms in higher education. The force that is unleashed is consumerism. We would not have been willing to put in the extra funds and go through the political pain unless it was for the benefit of students and their educational experience. I recognise that the very term “consumerism” causes deep anxiety for some. But it is not a threat to the classic relationship between academic teacher and student – it is an opportunity to rebalance academia so that teaching gets its rightful place alongside research.

However, if these reforms have empowered students at all, it is precisely as consumers to whom brands are sold, not really as stakeholders or members of a community. A bit like the power I have on the operations of Tesco when I buy yoghurts.

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.