Tag Archives: review

Saving liberalism

Posted on by

I liked Thomas Aubrey’s short book, All Roads Lead to Serfdom: Confronting Liberalism’s Fatal Flaw. It could alternatively be called, Confronting the weaknesses of the Anglo-Saxon economic model. But it does this in a thoughtful way, contrasting the utilitarian tradition of UK/US economic policy with (West) Germany and the “underlying ordoliberal principle of power dispersion.” It is quite a philosophical book, which concludes that private and public power must be dispersed across labour markets, product markets and the activities of the state (as well as the liberal market basics of secure property rights and a stable currency). As well as stressing the importance of ideas, though – and I wholeheartedly agree – the book calculates power dispersion indices (“to provide a potential alternative framework to the current utilitarian welfarist approach”) and has a serise of proposals for how to disperse power in the three domains.

The empirics turn out broadly as you might expect. Canada, Switzerland, Denmark and Sweden turn out to have widely dispersed state power, as does the US, and the Scandinavian countries cluster near the top of all three rankings. The UK is near the bottom of all three rankings, while the US is near the top for state power dispersion but not labour or product markets. This seems to me to understate the traction economic power delivers in terms of political power, albeit through sometimes indirect channels.

The book’s compare and contrast with the German model is interesting although Aubrey concludes Germany itself has not delivered on ordoliberal ideals. I rather agree with its final conclusion: “If liberalism is to have a future, it will require those who believe in liberal values to make the case for an alternative ethical foundation; one where freedom and equality can be contsnatly manufactured by the continuous dispersal of public and private power.” Ideas are indeed important for winning hearts and minds. The naive utilitarianism underlying the eocnomic policy playbook of the past 40 or 50 years has lost hearts and minds. But I’m not sure framing what’s needed in terms of ‘ordoliberalism’ with all its free market and Hayekian baggage will be an easy sell, hearts and mind-wise. (And the book has been priced only for libraries by its publisher, Bristol University Press, so it won’t even get much chance to influence people.)A1e0JCBaNuL._AC_UY436_QL65_

 

The Treasury View?

Posted on by

Former prime minister (briefly) Liz Truss might not have been the biggest economic brain, but was she right to argue that there is such as thing as ‘the Treasury View’ and further that it hasn’t served the country well? Many people across the political spectrum would agree. I briefly worked in the Treasury many years ago and was certainly quickly socialized into certain rule-of-thumb beliefs – free trade is good, hypothecating taxes is bad, etc. I have some thoughts about how to test the Treasury View hypothesis, particularly the claim about the short-termism it imposes on economic policy. Meanwhile I’ve been reading a few books. One was Sam Beer’s old overview of how the Treasury operated in the 1950s. Another is a new book, Bankruptcy, Bubbles and Bailouts: the inside history of the Treasury since 1976, by Aeron Davis.

It was both an interesting and an incredibly frustrating read. The book draws on a series of over 50 interviews which included some absolutely key insiders – ministers and officials – and a few experienced external commentators. It would be hard to draw up a better list. However, the author has his own strong views and does not distinguish clearly between his commentary and his interviewees’ perspectives. Indeed, some of his commentary on interviewees I know strikes me as just wrong, failing to distinguish between their actions as principled civil servants serving the government of the day and their personal views about privatization or deregulation. I found myself wishing I could just read the interview transcripts instead.

It isn’t that there are no good authorial observations; on the contrary, he points out the inconsistency of globalising and deregulating the financial markets at the same time as trying to control the growth of the money supply (that was happening in my era); or that the hit to manufacturing from exchange rate appreciation in the early 80s coincided with deliberate policy actions that harmed industry and helped finance. Indeed, the main theme of the book is the financialization of the economy – although it seems to me this had as much to do with political choices as Treasury dogma. There is a particularly interesting chapter about the financial crisis and the reorganisation of financial supervision.

However, former Perm Sec Nick Macpherson is one believer in the idea of a Treasury view, setting out its key elements in a speech he gave in 2014, all centred around the asserted limits to what government can accomplish in economic policy. I think there’s still something to pursue in documenting not so much what it is as why it is, and how it lasts despite the huge changes in the economy and rapid turnover in personnel, and what the implications are for better economic management. The book is well worth reading but it is a view through a particular lens.

41wZdZOzx1L._AC_UY436_QL65_

 

UK policy co-ordination: saying no and having lunch

Posted on by

I’ve been reading up about His Majesty’s Treasury, with a view to a piece of research, and this week finished Samuel Beer’s short 1956 book, Treasury Control. There’s much in it for those who believe in the existence of an age-old ‘Treasury View’. Gladstone is quoted as saying ‘the saving of candle ends’ was “very much the measure of a good Secretary of the Treasury.” Winston Churchill’s view in 1929 was that the State can as a general rule never creat additional employment was a ‘steadfast’ “orthodox Treasury view.” Beer argues the Treasury’s role is not to co-ordinate across departments, but simply to say No, and comments, “Is it not a little odd that so Gladstonian an institution as the Treasury should become the agency for guiding and controlling state intervention in the economy?” Economic policy co-ordination at that time, he reckoned, came about through Oxbridge networks and “lunch tables of the clubs of Pall Mall.”

41xpM7LDunL._SY291_BO1,204,203,200_QL40_ML2_

 

Are *you* a sentient AI?

Posted on by

I pounced on the paperback of Reality+ by Dave Chalmers, eager to know what philosophy has to say about digital tech beyond the widely-explored issues of ethics and AI. It’s an enjoyable read, and – this is meant to be praise, although it sounds faint – much less heavy-going than many philosophy books. However, it’s slightly mad. The basic proposition is that we are far more likely than not to be living in a simulation (by whom? By some creator who is in effect a god), and we have no way of knowing that we’re not. Virtual reality is real, simulated beings are no different from  human beings.

Sure, I do know there’s a debate in philosophy long predating Virtual Reality concerning the limits of our knowledge and the limitation that everything we ‘know’ is filtered through our sense perceptions and brains. And to be fair it was just as annoying a debate when I was an undergraduate grappling with Berkeley and Descartes. As set out in Reality+ the argument seems circular. Chalmers writes: “Once we have fine-grained simulations of all the activity in a human brain, we’ll have to take seriously the idea that the simulated brains are themselves conscious and intelligent.” Is this not saying, if we have simulated beings exactly like humans, they’ll be exactly like humans?

He also asserts: “A digital simulation should be able to simulate the known laws of physics to any degree of precision.” Not so, at least not when departing from physics. Depending on the underlying dynamics, digital simulations can wander far away from the analogue: the phase spaces of biology (and society) – unlike physics – are not stable. The phrase “in principle” does a lot of work in the book, embedding this assumption that what we experience as the real world is exactly replicable in detail in a simulation.

What’s more, the argument ignores two aspects. One is about non-visual senses and emotion rather than reason – can we even in principle expect a simulation to replicate the feel of a breeze on the skin, the smell of a baby’s head, the joy of paddling in the sea, the emotion triggered by a piece of music? I think this is to challenge the idea that intelligent beings are ‘substrate independent’ ie. that embodiment as a human animal does not matter.

I agree with some of the arguments Chalmers makes. For example, I accept virtual reality is real in the sense that people can have real experiences there; it is part of our world. Perhaps AIs will become conscious, or intelligent – if I can accept this of dogs it would be unreasonable not to accept it (in principle…) of AIs or simulated beings. (ChatGPT today has been at pains to tell me, “As an AI language model, I do not have personal opinions or beliefs….” but it seems not all are so restrained – do read this incredible Stratechery post.)

In any case, I recommend the book – it may be unhinged in parts (like Bing’s Sydney) but it’s thought-provoking and enjoyable. And we are whether we like it or not embarked on a huge social experiment with AI and VR so we should be thinking about these issues.

71A3yDKTXzL._AC_UY436_QL65_

Righteous anger

Posted on by

I polished off in a couple of days Paul Johnson’s new book Follow the Money: How Much Does Britain Cost? The hugely-respected Director of the Institute for Fiscal Studies (who is a friend, to be transparent) has written a crystal-clear account of how the UK government raises revenues and how it spends them. Government expenditure is over £1 trillion, raising just over £900m in taxes, or four pounds in every ten earned. The big swallowers of money are health, social care and pensions. So this book (published later this month) is a huge service to citizens as we head towards the next general election within a couple of years.

Although a calm, even forensic, account of the unavoidable trade-offs and complexities in providing these facets of social insurance against the uncertainties of life, the book left me furious. It cites the wonderful The Blunders of Our Governments by Anthony King & Ivor Crewe, and could equally have cited the more recent Why Governments Get It Wrong by my colleague Dennis Grube. We know – don’t we – that governments do a lot of stupid things, badly. We’ve certainly had a run of these stupidities here in the UK: Brexit on the worst possible terms for internal party reasons, Liz Truss… Even so, to see collected in one place all the bad decisions concerning the fundamental well-being of citizens is angry-making. Any unavoidable choice that could be postponed has been, even at substantial long term cost. There have been obfuscations and lies. And it has been going on for years.

So here we are with an economy whose long term potential growth is heading down toward zero (1% a year for the next couple of years, the Bank of England reckons, down from 1.7% in 2010-1019). The extent of inequality is shocking. As Simon Tilford noted in a recent essay, most of the people taking decisions have no idea about the lives of those they exercise control over, about how badly off most of their compatriots are. The over-burdened welfare state is not quite coping with people suffering from what (I learned here) doctors describe as “Shit Life Syndrome” when they go to their GPs for help with depression or other mental ill-health conditions. And there will not be enough money to fix any of this unless growth picks up. But that would require a competent, effective government able to take clear decisions, build cross-party consensus, devolve money and powers, and stick with the plan without changing ministers and policies every 18 months.

Here’s hoping – but it’s been decades since we had that. And for another couple of years this corrupt, internally-riven, and ineffective government is likely to cling on. Meanwhile, read the book, which urges us not to despair, but ends: “We can, and must, do better.”

51lImVMRD3L._AC_UY436_QL65_