Tot ziens Australie!

Posted on December 7, 2016 by Paul Frijters

It’s been a great 15 years in Australia for me and the family, so we will be leaving lots of friends and colleagues behind as we seek new adventures in London, where from next week onwards  I will be part of a Wellbeing centre, pretty much the same topic as the Australian Research Council has been generously funding me to look at for the last 3 years.

The essential aim of the ‘Centre of Wellbeing’ at LSE will be to put utilitarianism into practice as much as possible. To this end, we hope to be part of wellbeing policy experiments, textbooks on how a decision maker can be a better wellbeing-bringer, longitudinal studies, large data-gathering exercises, policy briefs, Master’s courses, inter-active wellbeing systems, and all the rest of it. We have partners all over the world and an international panel for wellbeing is up and running at the end of next week. If you happen to have a few million lying around to help us get to our goals quicker, then please help!

Whilst the grass is greenest in Australia, variety is the spice of life so I am looking forward tremendously to the new adventure. Still, the family is not truly leaving Australia, as my 3 kids now carry Australian citizenship and one kid is still studying in Sydney. So it is ‘Tot ziens’ (‘See ya later!’) rather than farewell!

To all my friends and colleagues in the Australian economics community: do come and look me up in London; please join in with utilitarian-oriented research projects; and best of luck.

Posted in Uncategorized | 9 Comments

Early Education and Social Preferences – Pretty interesting!

Posted on December 5, 2016 by Nicholas Gruen

The Effect of Early Education on Social Preferences by Alexander W. Cappelen, John A. List, Anya Samek, Bertil Tungodden

We present results from the first study to examine the causal impact of early childhood education on social preferences of children.  We compare children who, at 3-4 years old, were randomized into either a full-time preschool, a parenting program with incentives, or to a control group. We returned to the same children when they reached 7-8 years old and conducted a series of incentivized experiments to elicit their social preferences.  We find that early childhood education has a strong causal impact on social preferences several years after the intervention:  attending preschool makes children more egalitarian in their fairness view and the parenting program enhances the importance children place on efficiency relative to fairness.  Our findings highlight the importance of taking a broad perspective when designing and evaluating early childhood educational programs, and provide evidence of how differences in institutional exposure may contribute to explaining heterogeneity in social preferences in society.

Posted in Economics and public policy, Education | Leave a comment

Wellbeing: more please

Posted on December 5, 2016 by Nicholas Gruen

Health and Wellbeing, Resilience EngineThe well-being or ‘happiness’ push has been rolling for more than a decade now. Though there were plenty of other voices like Bruno Frey, I date its take-off from around the turn of the 21st century when Richard Layard started cranking up the issue and invoking the ghost of Bentham. 1 This new development shared with many other new departures in economics the rediscovery of things that were relatively commonsensical but nevertheless had been eclipsed by neoclassical formalism. 2

I recall reading Layard at the time and thinking that I’d been saying the same kind of thing for a long time3 – that money was an input with the output being some notion of wellbeing, that like all other commodities there were diminishing marginal returns to money 4 Still, as I argued in a presentation on the subject of wellbeing and the HALE last Friday (slides here at least for a while) at a conference commemorating Paul Frijters contributions to Australian economics (and UQ hounding him out of the place for his trouble – File under “never let a good deed go unpunished”), it’s surprising how little the new focus has yielded in strong new policy insights and priorities.

What’s typically happened, as happened with the other disciplinary departures I mentioned above, is that the new lenses that these new sub-disciplines generated were then trained on all the same old chestnuts. So new trade and development economics were trained on the old ‘free markets versus government intervention’ debate. Likewise, Layard used a wellbeing framework to address questions like the relation between income and happiness (the so-called Easterlin Paradox) and the wellbeing impact of inequality. Of course, that’s all fine and dandy, but you’d think that a new focus might produce new things to think about, not just slightly new ways to think about old things.

As an aside, by coincidence, the period during which wellbeing has risen to prominence in the academy also coincides with Australia sliding down the league ladder from preeminent neoliberal reformer to also-ran. Since our last successful major economic reform – in 2001 – I can think of at least three areas in which the UK has forged a path well ahead of our own. The first is information policy where the UK has opened up a big lead in open data policy know-how and is moving to second generation issues like personal information management. The second is social innovation where David Cameron put a lot of money into Big Society Capital and lots of things have been happening – though very little that I know of has been really done on a national scale.

And the UK government now explicitly targets well-being as an outcome of policy. This wasn’t just nice words. It was championed by the former most senior bureaucrat – Gus O’Donnell (or GOD as he’s known) both towards the end of his tenure as Cabinet Secretary. The UK has also set up a ‘what works’ centre on wellbeing – which I think was initially chaired by GOD who is now the Patron. 5

Still, progress has been slow. Continue reading →

  1. Google identifies 2,590 articles containing the expression “happiness economics” of which around 100 were published before 2000 with the number growing strongly in each five year interval I’ve checked. ↩
  2. Thus, just as new or ‘strategic’ trade theory and ‘new’ development theory rediscovered things about the economy that had been well known and thought about until their eclipse by the modelling orthodoxies of the 1960s on, so the new focus on wellbeing rediscovered some propositions that had been commonplace foundations of economics at the turn of the previous century. ↩
  3. As had he. ↩
  4. An extra dollar in the hands of a poor person meets more urgent needs (and so contributes more to net wellbeing whatever that means) than an extra dollar in the hands of a wealthy person. ↩
  5. What works’ centres are British institutions which seek to translate the state of the art in various fields into actionable conclusions for practitioners. You’d think that such services might be provided by academia, but you’d be wrong. ↩
Posted in Economics and public policy, Health, Inequality, Social Policy | 8 Comments

The artists resale royalty

Posted on December 5, 2016 by Nicholas Gruen

Image result for artists resale royaltyCross posted from the Mandarin

It is six years since Australia’s Artist Resale Royalty scheme (ARR) commenced and three years since submissions to its Post Implementation Review (PIR) closed, though the review itself has never been published. However, in the absence of a healthier public commitment to transparency, we can now answer some questions about the scheme.

How much has the ARR helped artists?

Supported, both at its inception and since, largely for its assistance to indigenous artists, the ARR has delivered approximately $1.6 million to indigenous artists, or about $260,000 per year according to Copyright Agency (CAL), which manages the scheme. Over the last six years about 420 non-indigenous artists — about 5% of the total of around 9000 professional non-indigenous Australian visual artists — have received around $2.6 million in royalty payments averaging $430,000 per year.

Of the total number of  individual ARR royalty payments made to date, 41% have been between $50 and $99 (minus the 15% management fee). However, because so many artists commanding the highest prices are dead, 168 estates have received 45% (around $1.9 million) of all ARR’s payments. This compares with government payments to the start-up and administration costs of the ARR of 2.2 million.

Does the scheme generate more benefits than costs?

Continue reading →

Posted in Art and Architecture, Economics and public policy, regulation | 5 Comments

Carlsen and the world championship

Posted on December 1, 2016 by Nicholas Gruen

After a very gruelling 11 rounds of classical chess which produced nine draws and one win for either side, Magnus Carlsen surprised most people by not trying very hard for a win in his final ‘classical’ game with challenger Sergey Karjakin. He was biding his time for the playoff with four games of ‘rapid’ where players get 25 minutes plus several seconds per move. It was his 26th birthday! The first game was a draw. Carsen secured a won game in the second game but couldn’t pull it off. He won the third and then had to draw or win the fourth. The final position was this which as you can see looks rather hazardous. If white doesn’t mate his opponent he’s about to get mated himself. What should Carlsen play?

You can play this and other games here.

Meanwhile other countries take it all rather more seriously!

Posted in Chess | 5 Comments

Little platoons of the left and right

Posted on November 28, 2016 by Nicholas Gruen

Image result for little platoons burkeThe intimidatingly well informed Brad Delong used the following quote from Rosa Luxemburg to bid “good riddance” to Fidel Castro. I don’t know enough to agree or disagree, but as I read Luxemburg’s words, I wasn’t thinking of communism. I was thinking of managerialism. I’m not seeking to suggest any moral equivalence with the gulags. But there are plenty of systems of tyranny, petty and otherwise, in our lives as the stuffing somehow oozes out of our institutions.

A generation ago academics were a privileged elite jealous of their privileges (and as is the case with privileges, some grew fat and lazy on them.) Ditto bureaucrats including of course the bureaucrats running private companies. Professionals could be directed within professional structures (an engineering firm say). But all such people owned a degree of fiduciary duty to the public and some independence from their bosses. Today managerialism runs rampant over such things and these people are so many lab rats in a Skinner box hitting their KPIs and (of course) learning to manipulate them apace as well as learning to pump out the bullshit in ever increasing quantities.

 

Continue reading →

Posted in Economics and public policy, History, Political theory | 10 Comments

Where else would they come from?

Posted on November 23, 2016 by Bruce Bradbury

Minister Dutton says that 2/3 of people recently charged with terrorism in Australia have Lebanese Muslim backgrounds. However, the first rule when considering dramatic statistics should be to think “compared to what”. In this case, where else might we expect Islamic extremists to come from? A quick look at the Australian Census tells us that this statistic is not so exceptional. Now that Islamic terrorism has arisen and spread (in a small way) to Australia, it is not at all surprising that most people involved will be of Lebanese background. This is simply because they are the largest relevant population group in Australia.

Simplifying somewhat, the majority of people seeking to undertake terrorist acts in the name of Islam in Western societies have been young adults (mainly men) who are second or third generation migrants. Moreover, such violent acts are just as much political as religious acts and have been concentrated in the diaspora of countries with on-going political-religious conflict.

The table below shows the self-reported ancestries of young people who were born in Australia and reported Islam as their religion in the 2011 Census. Lebanese was the most common ancestry (about 18,000), followed by Turkish and then Australian. (Up to two responses were permitted, of which Australian was often the second). If we exclude those parts of the world which have not been sources of Islamic terrorism, Lebanese youth make up 47% of the total, followed by Turkish at 26%.

Why have Lebanese, but not Turkish youth, appeared in Dutton’s statistics? The answer is much more likely to be found in the political environment of the home country than in anything inherent to the migrant population in Australia. Despite a range of groups exercising political violence in Turkey, it has not been a country where Islamic violence has focused on Western interests (until very recently, and even then it is probably not ‘home grown’).

Interestingly, if we include Turkey as a non-starter as a source of terrorist recruits, Lebanese youth make up just under 2/3 of the ‘population at risk’ in the table – the same as Dutton’s statistic.

Ancestry1

Posted in Immigration and refugees, Politics - national, Race and indigenous, Religion, Society | 6 Comments