Tuesday, June 20, 2017

Availability bias in politics

Six months ago, nobody expected Macron to be French president and Corbyn to be the new star of British politics. Now everybody seems to believe that they should be imitated, anywhere. Some even think that a synthesis between both of them is possible, like Will Hutton in The Guardian. It is a good example of the availability bias combined with hindsight bias. Is it possible to replicate Macron in another country? Is it possible to replicate Corbyn? I doubt that I had voted for any of them, at least in a first round or in a primary election. I can't think of any politician that resembles either of them in Spanish politics. Macron is a uniquely French figure that can be explained by a combination of luck, skill, trial and error, and evolution, similarly to Corbyn in England. Both of them have good things, which could be seen even when their success was deemed unlikely. Macron is a bold pro-European leader full of energy. Corbyn is an honest egalitarian politician. But their bad things are as equally visible today as they were six months ago. Macron is an elitist individual whose professional experience was among the olygarchic banks. Corbyn is an old-fashioned trotskist, who has been lucky to receive some lessons from Bernie Sanders, who looks centrist compared to the British labour leader. I will be happy if both of them do well, hopefully eliminating their bad sides. I would be especially happy if the combination of both of them reinvigorate the space between the center and the left in Europe. But I do not count on it. Most likely, politics in Europe will keep evolving, and if there is any jump it will be in some unexpected direction.

Sunday, June 18, 2017

Social choice and secessionist referendums

Reading about social choice (the theory about voting rules and in general how to go from individual preferences to collective choices) teaches several lessons about the dangers of many secessionist referendums, like the Brexit referendum or the aspiration of Catalan and other nationalists in rich European regions to secede from their states. Social choice does not present many problems when there are only two options. There is not much scope for strategic voting, there is little risk of indeterminacy and irrelevant alternatives do not have any influence (there are none at that stage), and there is no difference between plurality and majority. But the manipulation comes in the reduction of complex phenomena to only two options. Once there are only two options, the battle for framing is over. The solution is not simply to increase a number of apparently simple options to three or more, because then the question keeps giving the false impression of simplicity (it would have been hard to know precisely what devolution max meant in Scotland). And then the usual procedure of plurality voting may deliver a winner that is hated by a majority (as opposed to the Borda count, which however is vulnerable to comparisons being dependent of irrelevant alternatives), and to strategic voting. The best option for sovereignty issues in advanced democracies is to reach a broad agreement for a yes/no question on a detailed proposal (like the Irish referendum on the Good Friday agreement). That is the appropriate framing in a democracy that wants to preserve tolerance and reasoned debate, leveraging the best practices in representative and deliberative democracy. A second lesson is precisely about the need for reasoned and informed discussion, something that was dramatically absent in divisive plebiscites such as the Quebec referenda of 1985 and 1990, or the Scottish referendum of 2014 or the Brexit one last year. Finally, as Amartya Sen reminds us in the final pages of the expanded edition of his book on Social Choice, the view of outsiders should be welcomed in any debate to avoid the excesses of parochialism. It is very difficult to know about social choice and agree with secessionist referendums or at least not to have some serious doubts. For the main conclusions of social choice are i) that the will of the people is ill defined and ii) that there are many possible voting rules in democracy, none of them being perfect.

Thursday, June 15, 2017

Pragmatic but hard behavioral policies

Raj Chetty has an Ely Lecture at the American Economic Association where he defends a pragmatic contribution of behavioral economics to public policy. The video of the lecture can be watched here. Chetty sees behavioral economics as contributing to design new policy tools, such as nudges or frames. But also as contributing to making new predictions about the impact of traditional policy tools, or as contributing to analyzing welfare effects when there is a difference between experienced utility (real individual welfare) and decision utility (the objective function used to make decisions). In the lecture he gives useful examples with retirement savings, cash transfer programs and moving decisions. A good complement of Chetty's lecture, in my view, is a recent article by Loewenstein and Chater, in the new journal Behavioural Public Policy, entitled "Putting Nudges in Perspective." These authors regret that behavioral economics has been reduced to many to be seen as a synonym of nudges. They claim that behavioral insights can be used to help in the deployment of hard policies that have their origins in traditional economics but that would crucially benefit from the help of emotions, narratives and the management of perceptions. They argue that humanity has three key challenges: climate change, inequalities and automation. In the three of them, behavioral insights can be of help, but not as a soft excuse to avoid hard interventions. Instead, behavioral insights should be a key aid to develop deep interventions that make change possible.

Friday, June 9, 2017

Orwell on nationalism and Einstein on patriotism

After Theresa May's own goal and anticipating chaos among Brexiteers (with the UKIP replaced in influence by the heirs of Rev. Paisley) in the UK and similar movements in other places, I thought it could be of interest to remind the reader about what two of the brightest minds of the past century had to say about patriotism and nationalism:
-Albert Einstein said that "He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would fully suffice. This disgrace to civilization should be done away with at once. Heroism at command, senseless brutality, deplorable love-of-country stance, how violently I hate all this, how despicable and ignoble war is; I would rather be torn to shreds than be a part of so base an action!"
 -George Orwell, in a long article said among other things that "By ‘nationalism’ I mean first of all the habit of assuming that human beings can be classified like insects and that whole blocks of millions or tens of millions of people can be confidently labelled ‘good’ or ‘bad.’
And, "Indifference to Reality. All nationalists have the power of not seeing resemblances between similar sets of facts. A British Tory will defend self-determination in Europe and oppose it in India with no feeling of inconsistency. Actions are held to be good or bad, not on their own merits, but according to who does them, and there is almost no kind of outrage — torture, the use of hostages, forced labour, mass deportations, imprisonment without trial, forgery, assassination, the bombing of civilians — which does not change its moral colour when it is committed by ‘our’ side. The Liberal News Chronicle published, as an example of shocking barbarity, photographs of Russians hanged by the Germans, and then a year or two later published with warm approval almost exactly similar photographs of Germans hanged by the Russians. It is the same with historical events. History is thought of largely in nationalist terms, and such things as the Inquisition, the tortures of the Star Chamber, the exploits of the English buccaneers (Sir Francis Drake, for instance, who was given to sinking Spanish prisoners alive), the Reign of Terror, the heroes of the Mutiny blowing hundreds of Indians from the guns, or Cromwell's soldiers slashing Irishwomen's faces with razors, become morally neutral or even meritorious when it is felt that they were done in the ‘right’ cause. If one looks back over the past quarter of a century, one finds that there was hardly a single year when atrocity stories were not being reported from some part of the world; and yet in not one single case were these atrocities — in Spain, Russia, China, Hungary, Mexico, Amritsar, Smyrna — believed in and disapproved of by the English intelligentsia as a whole. Whether such deeds were reprehensible, or even whether they happened, was always decided according to political predilection."

Wednesday, June 7, 2017

The Tory delusion

At least Mrs. Thatcher knew where she was going. The current generation of leaders of the Conservative Party lack any sense of direction. Hopefully tomorrow the British people will punish them in proportion. This is what an article in The New York Times just said:
"First there was the Brexit drama. Now comes the farce. Almost a year after a narrow majority of Britons voted to pull out of the European Union, British voters face a general election on Thursday that was as unwanted as it was unexpected.
One thing on which all people agree about Britain’s prime minister, Theresa May: She knows how to keep a secret. Even senior party colleagues were taken unawares by the timing of the snap June 8 election. Most still appear to be in the dark about what their campaign message is supposed to be. The prime minister’s mantra, “Strong and stable leadership,” was fine as far as it went. But to what larger purpose?
“Brexit means Brexit” also has a clean ring to it, but Mrs. May has had trouble spelling out what a post-European Britain would look like. There is a world of difference between an amicable divorce and a messy one.
A more honest slogan would be: “Making the best of a bad job.” But no one, not even the party of Winston Churchill, is in the business these days of selling blood, sweat and tears. Brexiteers propose instead recapturing the spirit of an earlier Elizabethan age, when plucky English buccaneers forged pathways to the New World. This is a delusion based on a fantasy of how the 21st-century world works..."

Sunday, June 4, 2017

Paris, federal capital of the Planet

After the deplorable speech of Donald Trump announcing that the USA would leave the Paris agreement on climate change, for the first time a world leader has addressed all the international public opinion in the current lingua franca (English) to say clearly that it is everyone's obligation to "Make the Planet great again." Emmanuel Macron won the French presidential election under what his rival Marine Le Pen called a radical federalist pro-European platform. It seems that Macron does not have enough, and actually he has global federalist ambitions. He will not be alone, and he deserves the support of all those who beleive that the nation-state is obsolete and that we should make progress towards shared sovereignty. France's environmental minister said that his country will redouble his efforts on climate change: "Hulot was speaking hours after U.S. President Donald Trump confirmed his plan to pull the world's second biggest carbon emitter out of the deal on the basis that it was bad for the American economy and would weaken its sovereignty.
"It's not dead. On the contrary France itself, rather than reduce its ambitions, will revise them upwards and we will pull along in our wake a number of other states," Hulot said on Europe 1 radio. "France intends to maintain and reinforce its diplomatic leadership on this subject."
Hulot is a well-known French environmentalist who was pulled into the new government of President Emmanuel Macron as a minister when it was formed less than three weeks ago." Perhaps Trump's announcement will have the unintended effect of uniting more people than before against climate change, similarly to the effect that the Brexit referendum had on many Europeans, who are now more determined to secure a more integrated Union.

Friday, June 2, 2017

National sovereignty or federalist hope

Donald Trump used the word "sovereignty" three times in the deplorable speech he gave yesterday to justify his decision to leave the Paris agreement on climate change:
“There are serious legal and constitutional issues as well. Foreign leaders in Europe, Asia, and across the world should not have more to say with respect to the US economy than our own citizens and their elected representatives. Thus, our withdrawal from the agreement represents a reassertion of America’s sovereignty. [Applause.]
“The risks grow as historically these agreements only tend to become more and more ambitious over time. In other words, the Paris framework is a starting point – as bad as it is – not an end point. And exiting the agreement protects the United States from future intrusions on the United States’ sovereignty and massive future legal liability. Believe me, we have massive legal liability if we stay in.
“As president, I have one obligation, and that obligation is to the American people. The Paris accord would undermine our economy, hamstring our workers, weaken our sovereignty, impose unacceptable legal risks, and put us at a permanent disadvantage to the other countries of the world. It is time to exit the Paris accord –[applause] – and time to pursue a new deal that protects the environment, our companies, our citizens, and our country."
Luckily, the president of the US is less sovereign than he thinks. Not only the European Union and the other powers of the world are not going to give up on fighting climate change, but sub-national powers and business leaders in the US are committed to respecting the Paris agreements to the best of their possibilities, as an article today in the New York Times reports. The world is evolving towards global federalism and national sovereignty is no longer what it used to be.

Thursday, June 1, 2017

Nationalism kills: a global community does exist

Paul Krugman has posted a tuit where he expresses his embarrassment at some supporters of Trump who claim that a "global community" does not exist, but the world is an arena where nations compete. This is a notion common to all nationalists, for example Catalan otherwise neo-liberal nationalists who believe in the theory of competing small nations in a free trade world due to Alesina and Spolaore. The problem is that nations also compete to set (or eliminate) the rules of international trade, instead of cooperating to set them, which is achieved by basically giving up the monopoly of sovereignty. I find useful that Krugman has taken advantage of the opportunity to go back to an old idea of his: the criticism of the abuse of the word "competitiveness" in economics, by which some mean seeking advantage in a world of zero-sum competition between nations. As Trumpians try to kill the global agreements on climate change, it is a good time to remind everybody that nationalism and related philosophies kill. In the absence of global agreements and transnational cooperative action, climate change will intensify and human civilization as we know it today will disappear. As Krugman says in his old article on "competitiveness:"
"As for fear, it takes either a very courageous or very reckless economist to say publicly that a doctrine that many, perhaps most, of the world's opinion leaders have embraced is flatly wrong. The insult is all the greater when many of those men and women think that by using the rhetoric of competitiveness they are demonstrating their sophistication about economics. This article may influence people, but it will not make many friends.
Unfortunately, those economists who have hoped to appropriate the rhetoric of competitiveness for good economic policies have instead had their own credibility appropriated on behalf of bad ideas. And somebody has to point out when the emperor's intellectual wardrobe isn't all he thinks it is.
So let's start telling the truth: competitiveness is a meaningless word when applied to national economies. And the obsession with competitiveness is both wrong and dangerous."