Category: Governance

Are financial markets – markets?

Philippine-stock-market-board

(source: wikimedia)

What a weird question, you may think. But consider:

  • In textbook markets, what is traded are products that are supposedly useful to customers. What is traded in many financial markets are highly artificial contractual arrangements that are several layers away from what happens in the real economy.
  • In textbook markets, participants are liable to go bankrupt if they overspend. In financial markets, some market participants know that they are too big to fail, creating problems of “moral hazard.”
  • In textbook markets, participants are expected to inform themselves about the products they trade. At least in some financial markets, what matters are not the “fundamentals” (e.g. the economic success of a company the shares of which are traded), but what other participants do. Many participants try to make profits by outrunning market movements or “sentiments”; this can lead to large swings, in disconnect from fundamentals (more…)

Criminal (in)justice and social contribution

The latest figures show that the proven reoffending rate for adult ‘offenders’ released from custody between April 2013 and March 2014 was 45.8%, with those who served sentences of less than 12 months having reoffended at a rate of 59.8% (Ministry of Justice, 2016). These kinds of statistics mean that increased attention has been directed towards understanding the reasons why people stop offending – largely in the hope that this evidence will support the design of reoffending-reducing reforms (see, e.g., the Discovering Desistance project). Another recent Ministry of Justice report brings together much of this research in its compilation of a list of ‘desistance factors’ in response to the question: What helps individuals desist from crime? (‘Transforming Rehabilitation’, 2014)

MarkoLovric at Pixabay (CC0 Public Domain)

MarkoLovric at Pixabay (CC0 Public Domain)

Two of these factors are of particular interest, given my purposes here: (i) ‘having something to give to others’ and (ii) ‘being believed in’ (see below for a brief account of each, respectively; and see Table 2.2 for the full list). (more…)

Sacrificed for hope?

Sacrificed for hope?

Economic transition and intergenerational justice

« Poverty and oppression are here, and they will not

be alleviated by the possibility of a better future.”

Adam Przeworski

Suppose you believe that the nationalization of the means of production is necessary for the achievement of justice. Suppose, besides, that your political party enjoys enough popular support (an absolute majority) for this radical reform. Yet you know from experiences in other countries that such radical reforms engender an economic crisis, with higher unemployment and lower incomes. What you do not know is how the economy is going to fare in the future and how long the crisis can last.

These are a lot of assumptions, certainly, but please accept them for the sake of the argument. What I am asking you is to put yourselves into the shoes of western European socialist leaders from the first half of the 20th century. They faced both a strategic and an ethical dilemma. (more…)

Two arguments on Scottish Independence, one for and one against

I was not personally affected by the vote for Scottish independence, but like many political junkies, I was very much interested. Though it wasn’t merely intellectual curiosity that drove me to follow it: the vote was a unique and precedential event on the stage of global politics that may well have implications beyond the Kingdom-that-is-for-now-still-United. Among my British friends, there was a split between those were tentatively relieved and those were tentatively disappointed that Scotland did not, in fact, secede yet all of them had a hard time deciding. I believe this is partly because we don’t have good frameworks to think through issues of boundaries and succession, as the old political ideologies (like imperialism and nationalism) are losing their grip. Liberalism and democracy are typically perceived to have no say on questions of boundaries and membership, and that’s a big problem for anyone who believes in individual rights and democracy. With this kind of motivation in mind, I’d like to briefly present two arguments, neither conclusive, that were not featured prominently in the debate about Scottish independence – one for, one against.

What reasons do people give for and against Scottish independence? To put it very crudely, the Yes argument was mostly nationalistic and the No argument commonly economic (which means it was about material welfare). Thus, the Yes people said that Scots are a nation and therefore deserve to have political independence – it is their right to control their own collective affairs. The No people said that an independent Scotland will either do worse than it is doing now or terribly bad, with all sorts of catastrophic scenarios flying around. Of course, the Yes people have responded by saying that independence would not have such dire consequences and may even have some economic benefits but their argument was still, for the most part, about national self-determination.

That brings me to one argument in favor of Yes. It seems important to have a living example of a nation achieving independence via a vote. It’s an historical opportunity to witness a nation gain statehood by ballots, not bullets and poke a hole in the generalization that independence is gained with blood and tears or not at all. Some political leaders worried that other national minorities looked to the vote with thoughts of their own national aspirations. If the vote succeeded, the thought went, such aspirations would be strengthened and that would lead to instability. But it seems to me that the opposite is true: such a peaceful campaign is a remarkable example of the potential of discursive and non-violent means for achieving political goals, which might encourage minorities to pursue similar non-violent means in the quest for their political autonomy. That wouldn’t be the cause of any ensuing instability, but a much better way of addressing the already existing tensions, which is a euphemism for the fact that many national minorities suffer discrimination, mistreatment and oppression. If you value democracy, you want to see it succeed where much blood has been shed before: in the struggle for political independence.

This leads us to the problem with the Yes argument. That the conversation has been couched mostly in nationalistic terms is, I believe, a source of concern. For various reasons I can’t enumerate here I am very skeptical about the idea of nationalism in general and about nationalism as a basis for political independence in particular. One troubling aspect of nationalism is that the idea that nations should have their own states and states should be nation-states forces people to choose. Why can’t someone be both Scottish and British? If nations are to have their own state, each state should have a clear nation. If there’s a nation that doesn’t have a state – either it should have its own state, or live as a minority in a state that isn’t its own.

More importantly, I think that there is a potentially better argument for the Yes campaign that wasn’t as prominent in this discussion. That is the democratic aspect: would a new independent state improve the Scottish people’s ability to affect the matters the concern their own lives? Some Yes people have made that argument, usually within the nationalistic framework: as a nation, the Scots will be in a position to manage their own life. But I’m not interested in the Scots as a nation, but in Scots (and the English, and all other affected parties) as individuals. Would it improve individuals’ democratic standings? Will they have more say in decisions that impact their lives? I’m not sure, and I haven’t heard many people make a persuasive argument either way. Some Yes people think that an independent Scotland would result in an improvement in democracy because there are differences in preferences, generally speaking, between the population of Scotland and the rest of the UK: Scots tend to support more social policies, such as governmental funding of education and healthcare than the policies of the UK government. Therefore, an independent Scotland would reflect better the preferences of most Scots while the remaining citizens of the UK would have policies that reflect their preferences.

This might be true. However, there are various other issues that complicate the story. Will an independent government in Scotland be sufficiently strong to have its own policies in the face of pressures from international markets and a strong neighbor? For example, if the now independent Scotland attempts to regulate labour standards more rigorously will they be able to enforce it given the competition with their southern neighbors or will they have to end up complying with the standards of the Westminster government only that now it’ll be a much more conservative government in which they will have no say?

These are empirical questions that are hard to answer, but to my knowledge they have not been the focus of empirical study in recent years. Partly, that’s because the kind of democratic considerations I’m raising here have not been prevalent in discussion on boundaries and succession, though I think they should be.

In defence of a constitution for the UK

Magna Carta Memorial, by Karnaphuli / CC BY-NC 2.0
In honour of the 800th anniversary of the Magna Carta, the United Kingdom is presently considering whether to adopt a written constitution.  Of course, the UK has various legal documents that set rules and precedents for government and legislation.  There is a Ministerial Code that outlines the duties of ministers and a Human Rights Act that stipulates various rights and freedoms to be upheld.  But it does not have a single, formal, codified document encapsulating the essence and dimensions of all these segments.  In this post, I outline two reasons in favour of the UK adopting such a constitution.
1) A Constitutional Code, which would outline essential elements and principles of government, but not be legally binding.
2) A Constitutional Consolidation Act, which would bring together the various segments of existing common law and parliamentary practice.
3) A Written Constitution, which would be a legally binding statement of basic UK law, democratic procedure, and the relationship between state and citizen.
 
What I have in mind to defend is a version of 3 not dissimilar to the draft of this option in the Select Committee Report.  I think there would be value to the UK adopting a document which details certain core existent and aspirational principles of governance – “liberty, equality, tolerance, and the rule of law” are the draft’s specification (on p.285) – and delineates their manifestation in various rules – such as the rights to life, security, and a fair trial of citizens.  This change would replace the existing patchwork of acts of parliament, legal texts, and conventions through which the UK now operates with a clearer focal point containing the essential rules of state and the principles on which they are based.
One benefit of doing so is that it would make these structures easier for citizens to find and comprehend.  Andrew Williams persuasively argues that justice can make only demands that fall within the epistemic capabilities of citizens.  Individuals must be able to know what the rules require and whether they are being observed, because it respects them as citizens to put this information within their reach and allows them assurance that others are complying.  Arguably the current UK structures fall outside this requirement.  They can be difficult even for legal practitioners to master.  But, at any rate, it seems reasonable to think that a tighter, collated outline of the rules would help meet this goal better.
Another benefit would be that it would provide a clearer mandate for a system of judicial review.  Some worry that adopting a constitution would allow (unelected) judges a political role in setting the rules of society.  Given that UK judges already have power to overrule legislation under the Human Rights Act, it is not clear that adopting a constitution is any more liable to this objection than the status quo.  But, regardless, as Ronald Dworkin argues, there is value in judges having this mandate if it protects certain principles and rights we deem important, such as those mentioned above.  And while some suggest that the British unwritten constitutional model has been good at protecting freedom over time, the evidence is that independent courts operating with safeguarded statutes have the stronger record in protecting human rights, especially those of minorities.  Moreover, offering judges a tighter, collated outline of the relevant principles and rights seems, if anything, likely to improve the viability of this task.  It would help distinguish these cases from instances of legislation more concerned with improving general welfare, thereby establishing a clearer domain and set of parameters within which their rulings must operate.
One important question asked about the project of adopting a constitution is whether there is a clear objective in doing so.  I have some (perhaps overly optimistic) hope that the process could help the UK clarify what truly follows from some of its foundational values – that equality requires far more in terms of social and economic rights than our existing structures offer, for example.  But, whatever else, I do think that bringing principles and current rules into sharper focus and alignment would set the tone and motion for a better political climate in the senses described above.  That, I believe, would be a worthy objective.

Questioning the State

The history of nation-states is not a pretty one. State creation is often a bloody and very painful exercise. Either states boundaries are decided through years of fighting or as an arbitrary decision by colonial authorities. Once states have been created, violent border disputes aside, states have been responsible for the repression of thousands of its own citizens. Perhaps even more damning, the nation-state framework seems to be an obstacle to addressing urgent international issues, such as global climate change and a growing refugee crisis. The on-going bloody history of states and pressing international issues present strong reasons to consider a justification of the primacy of the state.
This post is not intended as argument against or in favour of the primacy of the state, rather to make the case that its primacy is not an automatic good and needs to be justified for those (like Rawls) who take it as the prime site of justice.  There seem to be three key arguments for the state 1) the identities argument, 2) the justice promoting argument and 3) the pragmatic argument. I will go through these in turn to demonstrate that justification for states as the prime site of justice relies on a pragmatic argument:  they exist and so we should make them better. I suggest that this leaves room for important work to consider whether there are other more effective institutional arrangements that would promote justice.
So, let us consider the identities argument. The world has many different communities, who have distinctive cultures, histories and ways of approaching politics. As such, they need their own territorially distinct institution to conduct their affairs. Although there are very different communities across the globe, current borders do not match the boundaries between these communities. A quick glance at postcolonial Africa demonstrates that borders do not follow divisions between existing communities. Redrawing boundaries would not fix this. Identities no longer (and arguably never did) map neatly onto distinct and clearly defined territorial areas. The territorially exclusive state enclosing a coherent political community is not a reality. The state is not a natural political unit reflecting distinct political identities. Therefore justification requires some belief that its existence promotes a particular good.
The second argument is the ‘justice-promoting argument’. It goes something like: “Having nation-states promotes justice. We need localised institutions, such as the NHS, tax redistribution, education to ensure justice. The state is the best organization for this. ” This, unfortunately, is not the reality for much of the worlds population. In the Global South, justice-promoting states are not the norm, and often states can produce a considerable amount of injustice. Moreover the poor environmental practices and unfair trade policies of states in the Global North also harm the lives of those in the Global South. The response may be: Don’t dismantle states rather improve the unjust states! But, on what grounds have we decided the state is the best institution? There are other forms of political organization, be it townships, chieftaincies, kinship networks, cooperatives and charities which also promote justice and in many cases are a more meaningful avenue for providing the necessary services of justice. What makes a state the most valuable form of political community?
I think the crux of the ‘pro-state’ position comes to a pragmatic argument. The overwhelming majority of the globe’s population live under the legal jurisdiction of states.  Even where, in practice, the state does not exist or it is is repressive, the trend is to improve state capacity and to make it more functional. Therefore let us not waste time considering alternative political arrangements or a more serious empirical consideration of whether the state is indeed a good provider of justice and rather work on ways to improve what is already there.
I am not totally against this final argument. States do exist, and improving them may be best in the short term. It comes down to a practical judgement call. If, in the short term, it is more effective to improve states – this is something we should do. However this is an empirical question. Given the violent history of states and current pressing international questions. Would it be more effective to improve states or create alternative political institutions, which promote justice better? Both avenues deserve careful normative and empirical consideration.

Moral Motivation and Sustainable Behaviour Change

‘Climate change’ and ‘behaviour change’ are both central themes in the policy landscape, academic research, and media discourse of the twenty-first century. The former has been described by the former Secretary-General of the UN, Kofi Annan, as “the greatest humanitarian challenge facing mankind today”, a statement that carries added weight in light of the complete devastation inflicted upon the Philippines by Typhoon Haiyan – one of the strongest storms ever to make landfall. The latter, ‘behaviour change’, has become a ubiquitous phrase in policymaking circles, representing a radical shift towards a non-regulatory policymaking paradigm, often referred to as nudging.

The 2008 Climate Change Act established the world’s first legally binding climate change target. This has committed the UK to reducing its greenhouse gas emissions by at least 80% by 2050 – a target that requires a major change in the way we live, representative of an unprecedented reversal of a universal trend among industrialised nations concerning the relationship between economic growth and carbon emission. The key question going forward, therefore, is: How is such a radical behavioural/cultural transformation going to be brought about? The current government’s answer appears to rest heavily upon behaviour change techniques that seek to nudge (implicitly encourage, incentivise, etc.) citizens’ toward more sustainable behaviour patterns.

(more…)

Should the UK be granted a referendum on membership in the European Union?

My answer to the question posed in the thread title is a ncaa tentative ‘no’.  My answer is tentative partly because I usually bestow considerable value on democratic choice and partly because I remain worried that my natural negative reaction to all Tory policy might cloud my judgement.  But, to the best I can exempt myself from this partiality, I do think that the ‘no’ answer is correct.  Here is my reasoning.

In the literature on secession, there wholesale mlb jerseys are two broad positions.  On the one hand, some think there is a direct or primary right to secede.  That is, groups always have a right to choose to leave an existing state provided that they, as a group, meet some criteria.  The usual criteria are (a) being a ‘people’ with a shared set of cultural traditions or heritage distinct from those cheap jerseys of the wider nation of which they are presently a part or (b) democratic election (e.g., by majority vote).  On the other hand, some think that there is ‘only’ a default or secondary right to secede.  Groups have this right of only if their present government mistreats them in certain ways.  Here, the right to secede is like the right to revolution.  It is ‘activated’ if governments abuse citizens’ most basic rights, by, for example, torturing them or imprisoning them for their political beliefs.
My view is that secession cannot be a primary right.  It seems to me too permissive to allow groups such broad discretion on leaving an existing state.  In certain cases, this would permit patently unjust possibilities, such as the white South Africans responding to the end of Apartheid by voting to form an independent nation.  More generally, we surely think that there are limits on what a people can choose.  People do not have a right to disenfranchise part of the existing population of a nation on matters that concern them all, so why should they have a right to vote for border changes that would have the same effect?
Thus, my sense is that any right to secede from a political association must exist only on the condition that been the political association surpasses a certain threshold of injustice.  If this line of reasoning is applied to the case of the EU, the UK clearly does not have a right to vote on its membership.
I guess that there are two possible objections to this view.  First, it might be argued that the EU is nfl beyond a threshold of injustice.  I find it difficult to see wholesale mlb jerseys how such a position could be substantiated.  Indeed, given some of its decisions, such as voting rights for prisoners, I am inclined to think it propagates less injustice than the UK.  But, at any rate, it clearly does not fall foul of grave human rights abuse or anything that would permit rebellion.  Second, it might be argued that there is a difference between seceding from a state and seceding from a supranational organisation.  I cannot say that I disagree with this thought, but I do not think that the difference will be sufficient to challenge my central claim.  Whatever the differences, the EU wholesale jerseys is a political association with binding rules of membership subject to demands of justice.  The parallels are not so far from much decentralised federal structures like Switzerland.  So, just as I believe the people of Zug do not have a right to choose independence from the Confœderatio, I do not think the UK should be granted a referendum on European Union membership.