Quotulatiousness

May 21, 2012

Will privacy be on one of the things that differentiates the rich from the rest?

Filed under: Britain, Bureaucracy, Government, Media — Tags: , , , , — Nicholas @ 09:23

Brendan O’Neill in the Telegraph:

Is privacy being turned into a privilege that only the moneyed and the well-connected may enjoy? Two striking stories in the news last week suggest that it is.

In the first story, it was reported that activists and hacks are heaping further pressure on Mark Zuckerberg to improve the privacy settings on Facebook, so that they might update their statuses and post photos of their social shenanigans without having the world and its mother peering over their shoulders. In the second story, we were told that social workers, backed by much of the media, are calling on the prime minister to get rid of “red tape” so that they might more easily interfere in — I’m sorry, intervene in — so-called problem families. There are a lot of damaged families out there, the social workers hinted, and thus we need to rip up some of the rules governing when it is and isn’t okay to stick our snouts into their business.

That these two stories could appear in the same week, and not be considered contradictory, suggests we have a pretty screwed-up attitude to privacy today. Indeed, sometimes the very same members of the political and media classes who believe that their private lives must remain absolutely private will think it is perfectly logical that other people’s private lives — the lives of Them — should be thrown open to state snooping.

May 11, 2012

Sneering at both the rich and the poor: the modern “equality” campaigners

Filed under: Economics, Media, Politics — Tags: , , , , , — Nicholas @ 09:16

Daniel Ben-Ami on the equal-opportunity snobs in the so-called “equality” movement:

It is easy to make the mistake of assuming there is a big drive towards equality in the world today. Politicians, pundits and even billionaire financiers rail against the dangers of inequality, excess and greed. A handful of Occupy protesters claiming to represent the ‘99 per cent’ against the super-rich ‘one per cent’ are widely lauded in influential circles. Parallel campaigns slate the wealthy for failing to pay their fair share of tax. Officially sanctioned campaigns promote fairness, social justice, social equality, equal access to education and the like.

From this false premise it appears to follow that radical politics is alive and well. If equality was historically a core principle of the left then, so it is assumed, the current discussion must be enlightened and humanistic. Those who oppose the plethora of apparently pro-equality initiatives are therefore cast as reactionary souls who are probably in the pay of giant corporations.

[. . .]

In contrast, the discussion in recent years has shifted decisively against the idea of economic progress and towards a deep suspicion, even hatred, of humanity. It promotes initiatives to counter the dangers of social fragmentation in an unequal society. Indeed, this fear of a disintegrating society can be seen as the organising principle behind a wide range of measures to regulate supposedly dysfunctional behaviour. These range across all areas of personal life, including childrearing, drinking alcohol, eating, sex and smoking. Such initiatives assume that public behaviour must be subject to strict regulation or it could fragment an already broken society.

A distinct feature of the current discussion is that the rich are also seen as posing a threat to social cohesion. Their greed is viewed as generating unrealistic expectations among ordinary people. In this conception, inequality leads to status competition in which everyone competes for ever-more lavish consumer products. A culture of excess is seen to be undermining trust and a sense of community.

The contemporary consensus thus marries the fear of social fragmentation with anxiety about economic growth. It insists that the wealthy must learn to behave responsibly by maintaining a modest public face. It also follows that prosperity must be curbed. This is on top of fears about the damage that economic expansion is alleged to do to the environment.

This drive to curb inequality is informed by what could be called the outlook of the anxious middle. It is middle class in the literal sense of feeling itself being torn between the rich on one side and ordinary people on the other. Its aim is to curb what it regards as excesses at both the top and bottom of society. It sees itself as living in a nightmare world being ripped apart by greedy bankers at one extreme and ‘trailer trash’ at the other.

April 27, 2012

Social polarization in America

Filed under: Economics, Education, Media, USA — Tags: , , , — Nicholas @ 09:27

Frank Furedi reviews the latest book by Charles Murray, Coming Apart: The State of White America, 1960-2010.

The nineteenth-century British politician Benjamin Disraeli once characterised ‘the rich and the poor’ as ‘two nations between whom there is no intercourse and no sympathy; who are as ignorant of each other’s habits, thoughts and feelings, as if they were dwellers in different zones, or inhabitants of different planets’. It is a description that applies uncannily to contemporary American society.

I recall the first time I travelled to America — back in 1967 — having a discussion with my then girlfriend about how difficult it was to distinguish between the well-off and the not so well-off people on the streets of the places we visited. That was then. When I visit these days, I am struck by the contrast in appearance between rich and poor white citizens. They now look so different. They eat different food; they pursue different cultural interests; they speak differently; and, most important of all, they communicate values and attitudes that are often strikingly at odds with one another. It is all very redolent of the kind of social and cultural polarisation so prevalent during the nineteenth century.

Coming Apart: The State of White America, 1960-2010, Charles Murray’s exploration of the socioeconomic segregation that divides the US, is a valiant attempt to give a coherent account of this polarisation. What is important about Murray’s discussion of the intensification of the socioeconomic segregation of America is that it shows not simply the economic but also the cultural drivers of this process. So differences in income and living standards, and growing economic inequality, are also paralleled by a divergence in ‘core behaviours and values’. For example, Murray focuses on divergent attitudes towards marriage, industriousness, honesty and religion to demonstrate the disturbing fact that upper-class and lower-class Americans inhabit very different moral communities. His thesis is that this polarisation of cultural attitudes threatens the coherence of society and puts the American project at risk.

April 22, 2012

Earth Day: 42 years of crying “wolf”

Filed under: Economics, Environment, Health, Media, Politics — Tags: , , , , , — Nicholas @ 00:09

Peter Foster piles on the scorn for the 42nd anniversary of Earth Day:

For more than 40 years, Earth Day has both reflected genuine environmental concern and mirrored the UN’s attempted eco power grab. Sunday’s Earth Day comes two months ahead of the vast, but significantly brief, UN Rio+20 conference. Both are pale reflections of their original radical aspirations. Earth Day is still celebrated, but 42 years of crying wolf have inevitably had an effect. The event has also been corporatized, greenwashed and taken over by such announcements as that of the “50 sexiest environmentalists.” Rio+20 will represent the graveyard of aspirations for all prospective — and inevitably less sexy — Captains of Spaceship Earth, Global Saviours, and High Priests of Gaia.

That Earth Day has gone Happy Face, and Rio+20 will be a farce, reflects the fact that their apocalyptic assumptions have turned out to be so wrong. In Canada, as in other developed countries, we can celebrate significant improvements in air quality, and success in coping with industrial impacts on water. The Great Lakes have been cleaned up, forest cover has been maintained, and the amount of “protected” land doubled. The use of toxic chemicals in industrial production has been slashed. Some credit must obviously go to activism, but the more radical end of the movement has always had a lot more than just the environment in mind.

[. . .]

That misunderstandings and misrepresentations were at the root of radical environmental thinking was exemplifed by an “equation-of-doom” hatched in the 1970s by two prominent radicals, Paul Ehrlich and John Holdren (President Obama’s current senior science and technology advisor). The equation was I=P x A x T: Human Impact (I) equals Population (P) times Affluence (A) times Technology (T). The formula was vague, but it clearly suggested that population, wealth and technology were all “bad” for Mother Earth.

Such thinking was based on a primitive, static, zero-sum view of economic development and a demonization of business. Since resources were “finite,” all development was claimed by definition to be “unsustainable.” Advancing technology merely chewed up resources faster and accelerated us down the road to exhaustion. All this came with biblical overtones. On the first Earth Day, Prof. Ehrlich thundered that “In ten years all important animal life in the sea will be extinct. Large areas of coastline will have to be evacuated because of the stench of dead fish.”

April 15, 2012

Increasing taxes on the “1%” won’t close the gap — and might make it worse

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 11:13

Joseph Brean in the National Post:

That the rich should contribute more than their current share to the common good is a proposal with popularity. From Paris and London to Nova Scotia and Alberta, “tax the rich” has become a dominant theme in budget debates and elections around the world.

In Ontario, for example, NDP leader Andrea Horwath’s proposal to create a new tax bracket for people who make more than half-a-million dollars a year, illustrates the persistent attraction of such schemes for governments in deficit.

“The issue really is one of perceived fairness,” said Robin Boadway, a taxation expert and professor of economics at Queen’s University, who notes that the income of the highest earners has been increasing much faster than the middle and lower ranks. Taxation, to a great degree, relies on the goodwill and trust of citizens, he said, and inequality in tax codes can violate that trust.

Governments acting like Robin Hood, however, have tended to provoke unforeseen problems, most recently in Britain, where an effort to tax the rich ended up — quite literally — costing the government deeply.

It always seems to be a surprise when people respond to incentives in creative ways … and this applies especially to creative ways to avoid paying higher taxes. People will adjust their behaviour to minimize their tax burden — both legally and not-as-legally. This is after all one of the reasons that there are so many tax provisions: the government wants to encourage certain kinds of behaviour (and so gives a tax credit) and discourage other kinds of behaviour (and so levies a specific tax on it). Flexibility occurs on both the tax-levying and tax-paying sides of the fence.

One of the complaints of middle-class taxpayers is that there are few mechanisms they can use to legally reduce their tax burden, while the wealthy have lots of ways to do this. This isn’t going to change if the government increases the top rate of tax — in fact it will encourage more creative use of the tax-lowering provisions of the law (and lawyers and accountants will benefit by helping their wealthy clients ot take advantage of those provisions).

April 11, 2012

QotD: The silly claims about “capitalism in crisis”

Filed under: Economics, History, Media, Quotations — Tags: , , , — Nicholas @ 00:08

Yes, times are tougher than they otherwise could be; however, to claim that the bumps in the road over the last few years show that “capitalism is in crisis” is absurd.

[. . .]

Even with the a few recessions, Real per-capita Gross Domestic Product is a lot higher than it was in 1960, 1970, 1980, 1990, or 2000. The truly unique fact about the world as it has changed in the last few centuries is that, as a number of economic historians have emphasized, we live in a world where economic growth is taken to be the norm. […]

Indeed, as the economist Joseph Schumpeter pointed out long ago, capitalism has given us the time and energy to criticize capitalism. People content themselves by being outraged at working conditions in Foxconn plants in China. However, it is the economic growth we have achieved in the western world that allows us the comfortable working conditions from which we express horror at working conditions elsewhere in the world. Further, not all the workers are greeting the reformers as saviors (HT: Doug Stuart). If people are willing to trade off longer working hours for higher incomes, I don’t see how it’s my right to stop them.

[. . .] Donald J. Boudreaux points out how we have to be very careful with income data if we are going to get an accurate picture of trends in standards of living.

If we’re going to talk about “stagnation” we also have to be very clear about precisely what we mean. Consider the near-ubiquity of the iconic gizmo of the early 21st century and its technological cousin: the smart phone and social media. My Forbes.com colleague Erik Kain reported in February that “472 million smartphones were sold worldwide in 2011.” In a world of 7 billion people, the top 1% would be 70 million people. If all the gains really went to them, that would be about six and a half smartphones each for the members of the world’s Top 1%. I’m pretty sure that isn’t what’s happening.

Art Carden, “It’s the Final Crisis of Capitalism, Charlie Brown!”, Forbes, 2012-04-10

March 28, 2012

The “Greatest Generation”, then the “Luckiest Generation”, and now the bill comes due

Filed under: Economics, Government, Politics — Tags: , , , , , — Nicholas @ 10:01

John Kay on the luck of the Baby Boomers:

I belong to a lucky generation: too young to have experienced the Depression, or the second world war, or postwar austerity. The first political figure I recognised was Harold Macmillan, who told voters they had never had it so good.

His statement was true, if foolish, and my contemporaries and I benefited. The government paid us to go to university. We took for granted we would choose between attractive job offers. I was quickly appointed to a post from which it was practically impossible to be fired and which offered a pension scheme with generous, index-linked benefits. I bought a flat with a mortgage whose value was wiped out by inflation. By the time I was paying a higher rate of income tax, the level had been cut from 83 per cent to 40 per cent. My life expectancy is several years longer than my father’s, and I have already considerably exceeded the age at which his father died.

If young people today want to attend university, they will have to pay for tuition and borrow to meet living expenses. When they graduate, they face a much more competitive job market. Few careers will offer the job security once characteristic of middle-class employment. Defined benefit schemes have almost disappeared from the private sector, and public sector pensions are to be substantially less generous. Tax rates must rise, partly to pay for the care and medical treatment I will demand as senility advances. The only financial consolation for the next generation is the windfall when we leave them our houses.

The first half of the baby boom generation certainly were the luckiest cohort in human history. The second half of that generation didn’t do quite as well, the Gen X kids and the Millennials are going to be stuck with most of the bill for all the government-provided goodies that the early boomers have arranged for themselves. Pensions and healthcare, in particular, will have to be reined in for younger workers … just as the bulk of the early boomers have squeezed all the juice out of the system.

Aside from retroactively cutting back the benefits to baby boomers, the only other way to mitigate the financial burden is growth, but most governments in the west are pursuing goals that will not help and in many cases will retard economic growth.

March 23, 2012

Millennial generation not following the script

Filed under: Economics, History, Liberty, USA — Tags: , , , , — Nicholas @ 11:57

They’ve been subjected to more “sharing/caring” and “we are the world” propaganda than any group of youngsters since the Young Pioneers and the Hitler Youth, yet they appear to be shrugging off the programming in double-quick time:

Young Amer­i­cans care less and less about the the en­vi­ron­ment, pol­i­tics, and the world around them in gen­er­al, a study has found; even the idea of seek­ing a mean­ing­ful life is out of fash­ion.

In­stead, mon­ey, im­age and fame are the idols of our time.

“Pop­u­lar views of the mil­len­ni­al genera­t­ion, born in the 1980s and 1990s, as more car­ing, com­mun­ity-oriented and pol­i­tic­ally en­gaged than pre­vi­ous genera­t­ions are largely in­cor­rect, par­tic­u­larly when com­pared to ba­by boomers and Genera­t­ion X at the same age,” said the stu­dy’s lead au­thor, Jean Twenge, a psy­chol­o­gist at San Die­go State Uni­vers­ity and au­thor of the book Genera­t­ion Me. “These da­ta show that re­cent genera­t­ions are less likely to em­brace com­mun­ity mind­ed­ness and are fo­cus­ing more on mon­ey, im­age and fame.”

[. . .]

The wish to save the en­vi­ron­ment, an ar­ea of par­tic­u­lar con­cern to mil­len­ni­als, showed some of the larg­est de­clines, with three times as many mil­len­ni­als as ba­by boomers at the same age say­ing they made no per­son­al ef­fort to help the en­vi­ron­ment. Fif­ty-one per­cent of mil­len­ni­als said they made an ef­fort to cut down on elec­tri­city use to save en­er­gy, com­pared to 68 per­cent of boomers in the 1970s.

[. . .]

In the Amer­i­can Fresh­man sur­vey, the pro­por­tion of stu­dents who said be­ing wealthy was very im­por­tant to them rose from 45 per­cent for ba­by boomers (sur­veyed be­tween 1966 and 1978) to 70 per­cent for Genera­t­ion Xers (sur­veyed be­tween 1979 and 1999) and 75 per­cent for mil­len­ni­als (sur­veyed be­tween 2000 and 2009).

The frac­tion who said it was im­por­tant to keep up to date with pol­i­tics dropped, from 50 per­cent for boomers to 39 per­cent for Genera­t­ion Xers and 35 per­cent for mil­len­ni­als. “Be­com­ing in­volved in pro­grams to clean up the en­vi­ron­ment” fell from 33 per­cent for boomers to 20 per­cent for mil­len­ni­als. “De­vel­op­ing a mean­ing­ful phi­los­o­phy of life” de­creased the most across genera­t­ions, from 73 per­cent for boomers to 45 per­cent for mil­len­ni­als.

March 18, 2012

Reason.tv: Why The Future Is Better Than You Think

Filed under: Economics, Health, History, Liberty, Technology — Tags: , , — Nicholas @ 14:06

January 21, 2012

Those aren’t rules of economics. These are rules of economics!

Filed under: Economics, Gaming, Humour — Tags: , — Nicholas @ 00:07

The D&D rules of economics:

These are the Rules of Fantasy Economics:

Rule 1: Everyone has roughly the exact same amount of money and/or property as everyone else of his or her respective experience-point total. Except at character creation, obviously, where some people totally get the shaft, which sucks … but “being poor” and “staying poor” are two very different things.

Only about 99.9% of all people — specifically those who lack the initiative to spend every dollar they own on studded leather and a knife and to abandon their families for the open road on a mad, bloodthirsty whim — ever really STAY poor.

[. . .]

Rule 2: Money cannot make more money. Investing in businesses is a fool’s bargain: stores burn down, castles crumble, merchants and/or bandits will constantly steal your shit, and you will never, ever make a dime. Ever.

It is far wiser to invest in non-depreciable items like swords, hats and magic boots. Likewise, the things that you need to do your job (boats, armor, weapons, rope and horses, for example) do not depreciate at all and may be used forever unless somehow completely destroyed.

Rule 3: All currencies of all countries are worth almost exactly the same amount — and all currencies of all countries are evenly divisible into platinum, gold, silver and copper pieces by factors of exactly ten. No other non-magical objects have any real value, including land.

The exceptions to this rule are gems, which are randomly & subjectively priced (and therefore effectively useless as trade goods) and ‘art objects’, presumably meaning paintings and such, the value of which are objectively determined, fixed and unchangeable, making them a lot like personal checks.

January 10, 2012

When “everyone agrees” about excessive executive pay, something else is being sold

Filed under: Economics, Media, Politics — Tags: , , , , , — Nicholas @ 09:45

Tim Black on the amazing unanimity of thought that the most pressing problem in the world right now is big pay packets for corporate CEOs:

Occupy London, the Labour Party, the Lib-Con coalition, the Archbishop of York… It doesn’t matter to what or to whom you look, you’ll find the same simple-minded sentiment: the root cause of our economic and social problems is greed. The greed, that is, of bankers, of overpaid CEOs, of those at the top of society who simply have and want too much.

[. . .]

If there was ever a striking indication of the deadening political conformism, the dearth of social imagination, that so characterises our contemporary impasse, it is there in the sheer ubiquity of the Greed-is-Bad argument.

So what is driving this pervy, across-the-board obsession with the pay packets of super execs? It’s certainly not impelled by a desire to get to grips with the economic crisis that holds most of the developed world in its grip. No doubt there are some simple-minded souls in a state of Occupation who believe that blaming and bashing company CEOs or bankers is somehow to understand the economic crisis. But just as the remuneration packages of a few bankers and bosses did not bring about the current crisis, so seeking to limit their wages, to impose a maximum national wage, will not solve the crisis. And while £3million or £4milllion for a CEO’s annual salary does seem huge, such figures amount to very little in the grand economic scheme of things. As the Investor’s Chronicle points out: ‘The average FTSE 100 CEO is paid £3.9million year. But this is only one four-thousandth (0.025 per cent) of the average market capitalisation of a FTSE 100 company.’

The current fashion for attacking large pay packages, then, is economic neither in impulse nor intent. Rather it is driven, in the first instance, by a narrow moralism. For its numerous proponents, either in party offices or in spartan tents, it represents an easy posture, a cheap critical pose. One Guardian columnist virtually gave the game away: ‘Like phone hacking or MPs’ fiddled expenses, this is an issue that only needs to be described to seem reprehensible.’ That is, to the right-thinking types on liberal broadsheets, criticising large salaries is just too good an opportunity to miss. Indeed, like attacking tabloids and MPs, it is a mark of one’s membership of the right-thinking to have a pop at the really, really rich.

But there’s a deeper, darker impulse driving this cheap attack on exorbitant pay packages than just preening self-righteousness. And that’s the belief that the large pay packets pursued by the undeservedly wealthy are a symbol of a society-wide pathology. The cheap attack on top earners is also an attack on the material aspirations of the rest of us. We are, in short, just too greedy now to be left to our own unregulated, uncontrolled devices. A report from the High Pay Commission — a grandiosely monikered body established by centre-left think tank Compass, a few trade unionists and business secretary Vince Cable — makes this clear by drawing the highly questionable link between this putative celebration of ‘greed’ — or ‘an elevation of the concept of the rational self-interested man to unprecedented heights’ — and the August riots. ‘It should not perhaps surprise us’, the report states, ‘that the rioters took the trappings of wealth that they could not afford — the TVs and designer trainers. It reflects a sense of entitlement that pervades society from the very top to the bottom.’

January 8, 2012

George F. Will on big government

Filed under: Bureaucracy, Economics, Government, Politics — Tags: , , , , — Nicholas @ 10:54

Even fans of bigger government should recognize the accuracy of this short summary:

Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.

Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.

The left’s centuries-old mission is to increase social harmony by decreasing antagonisms arising from disparities of wealth — to decrease inequality by increasing government’s redistributive activities. Such government constantly expands under the unending, indeed intensifying, pressures to correct what it disapproves of — the distribution of wealth produced by consensual market activities. But as government presumes to dictate the correct distribution of social rewards, the maelstrom of contemporary politics demonstrates that social strife, not solidarity, is generated by government transfer payments to preferred groups.

[. . .]

The tax code, government’s favorite instrument for distributing wealth to favored factions, has been tweaked about 4,500 times in 10 years. Generally, the beneficiaries of these changes are interests sufficiently strong and sophisticated to practice rent-seeking.

Not only does redistributionist government direct wealth upward; in asserting a right to do so it siphons power into itself. A puzzling aspect of our politically contentious era is how little contention there is about the ethics of coercive redistribution by progressive taxation and other government “corrections” of social outcomes it considers unethical or unaesthetic.

December 13, 2011

The Zero Sum Fallacy

Filed under: Economics, Humour — Tags: , , , , — Nicholas @ 09:02

P.J. O’Rourke on the big economic issue that the Occupy folks always get wrong:

The “Occupy This, That and the Other Place” people are right about the sins of the financial system and right about the evil of government supporting and subsidizing this malfeasance. It’s not fair that 1 percent of Americans are rolling in dough while the rest of us are scrimping to pay for our Internet connection so we can go on Groupon.

But the Occupiers are wrong about something much more important. They believe in the Zero Sum Fallacy — the idea that there is a fixed amount of the good things in life. Anything I get, I’m taking from you. If I have too many slices of pizza, you have to eat the Dominos box. The Zero Sum Fallacy is a bad idea — dangerous to economics, politics, and world peace. It means any time we want good things we have to fight with each other to get them. We don’t. We can make more good things. We can make more pizza — or more tofu, windmills and solar panels, if you like.

The Zero Sum Fallacy is just that, a fallacy. Economic history since the Industrial Revolution proves — be the rich however stinking rich — we ordinary people can make more of the good things in life. But we have to make them ourselves, with our knowledge, skills and hard work. Government can’t give us good things. Government doesn’t make things, it just redistributes them. This brings us back to fighting with each other.

December 10, 2011

Barack Obama and Teddy Roosevelt: the economic parallels

Filed under: Economics, History, USA — Tags: , , , , — Nicholas @ 12:12

Jim Powell looks more deeply at the similarities between Barack Obama and Theodore Roosevelt:

President Obama is a smart man who believes great wealth is a social problem, and ordinary people would be better off if wealth were substantially taxed away. Recently he drew inspiration from Theodore Roosevelt, another smart man who had a similar view, completely misinterpreted what was happening in the economy, and actively disrupted it.

Theodore Roosevelt was the man who, in 1906, encouraged progressives to promote a federal income tax after it was struck down by the Supreme Court and given up for dead. He declared that “too much cannot be said against the men of great wealth.” He vowed to “punish certain malefactors of great wealth.”

Perhaps TR’s view was rooted in an earlier era when the greatest fortunes were made by providing luxuries for kings, like fine furniture, tapestries, porcelains and works of silver, gold and jewels. Since the rise of industrial capitalism, however, the greatest fortunes generally have been made by serving millions of ordinary people. One thinks of the Wrigley chewing gum fortune, the Heinz pickle fortune, the Havemeyer sugar fortune, the Shields shaving cream fortune, the Colgate toothpaste fortune, the Ford automobile fortune and, more recently, the Jobs Apple fortune. TR inherited money from his family’s glass-importing and banking businesses, and maybe his hostility to capitalist wealth was driven by guilt.

Like Obama, TR was a passionate believer in big government — actually the first president to promote it since the Civil War. He said, “I believe in power … I did greatly broaden the use of executive power … The biggest matters I managed without consultation with anyone, for when a matter is of capital importance, it is well to have it handled by one man only … I don’t think that any harm comes from the concentration of power in one man’s hands.”

December 5, 2011

Debunking memes: the Gini co-efficient as a spark for rioting

Filed under: Britain, Economics, France, Media — Tags: , , , , — Nicholas @ 08:33

Theodore Dalrymple shows that the widespread habit of journalists in Britain to attempt to attribute the root cause of August riots to the Gini co-efficient fails the common-sense test:

An August feature story on the riots in Time offered a particularly striking example. The author suggested that to understand the riots, we should start with “something called the Gini co-efficient, a figure used by economists to indicate how equally (or unequally) income is distributed across a population.” In this traditional measure, the article notes, Britain fares worse than almost every other country in the West.

This little passage is interesting for at least two reasons. First is the unthinking assumption that more equality is better; complete equality would presumably be best. Second is that the author apparently did not think carefully about the table of Gini coefficients printed on the very same page and what it implied about his claim. Portugal headed the list as the most unequal of the countries selected, with a 0.36 coefficient. Next followed the U.K. and Italy, both with a 0.34 coefficient. Toward the bottom of the list, one found France, with a 0.29 coefficient, the same as the Netherlands. Now, it is true that journalists are not historians and that, for professional reasons, their time horizons are often limited to the period between the last edition of their publication and the next. Even so, one might have expected a Time reporter to remember that in 2005 — not exactly a historical epoch ago — similar riots swept France, even though its Gini coefficient was already lower than Britain’s. (Having segregated its welfare dependents geographically, though, France saw none of its town or city centers affected by the disorder.)

As it happened, when I read the Time story, I had an old notebook with me. In it, among miscellaneous scribblings, was the following list, referring to the riots in France and made contemporaneously:

    Cities affected 300
    Detained 2,921
    Imprisoned 590
    Burned cars 9,071
    Injured 126
    Dead 1
    Police involved 11,200
    Average number of cars burned per day before riots 98

And all this with a Gini coefficient of only 0.29! How, then, could it have happened? It might also be worth mentioning that the Netherlands, with its relatively virtuous Gini coefficient, is one of the most crime-ridden countries in Western Europe, as is Sweden, with an even lower Gini coefficient.

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