A collage of images, featuring most prominently a person holding a sign reading "no justice no peace"

Category: Old Blog

Distribution / Economics / Health / Liberty / Old Blog

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Capping Working Hours

Recently, the scandalous decisions of some investment banks to treat their employees like human beings by suggesting they take Friday nights and Saturdays off has raised much debate amongst financial journalists and their ilk.
The issue of long working hours is not limited to investment banks; a survey in the US of 1000 professionals by Harvard Business School found that 94% worked fifty hours or more a week, and for almost half, working hours averaged over 65 hours a week. With the increase of automisation in production chains moving labour into customer facing service roles, more individuals will likely face this challenge in their daily lives.
There are good reasons to think that these hours are not useful at all. Economists have long known that as working hours increase, the marginal production of workers fall – mistakes increase and the quality of work produced falls.
More importantly than the impacts on productivity however, are morally relevant considerations that are related to cultures of long working hours:
Industries with long working hours are typically biased in favour of those who do not have other commitments which limit their available time – most notably child care and currently, in our society, this means women. Economist Claudia Goldin finds that gender gaps in wages are greatest in those industries which exhibit “non-linear pay structures” – essentially those in which individuals who can work extremely long hours are disproportionately rewarded. This describes most jobs in the corporate, financial and legal worlds.
There are important health implications of longer working hours with significant evidence that those who work longer than 48 hours a week on a regular basis are “likely to suffer an increased risk of heart disease,stress related illness, mental illness, diabetes and bowel problems.”
Finally there are various employment related issues worth considering – for example would unemployment be decreased if each 100 hour-per-week job were split into two of 50? Would such a policy help reduce the concentration of power in organisations as key managerial tasks would likely have to be increasingly shared?
While our society may gain significantly from moving away from working long hours, it will always be incredibly difficult for any firm to act unilaterally in this matter due to substantial co-ordination failures in this area.
The appropriate response, I believe, is for Government to intervene with a hard cap of 48 hours per week that applies across almost all industries, with no built in exceptions beyond those which are absolutely essential. The current EU working times directive which is supposed to provide a similar function, is farcical in its ability to constrain individuals from working, due to the amount of exceptions and opt out clauses built into it.
A hard cap of 48 hours would be hard to implement, would have some uncomfortable implications (for example – forcing individuals who enjoy their jobs to go home and stop working) and would likely have some negative consequences on the economy. However there would seem to be substantial positive gains to be made and I believe that these are large enough to justify developing such a cap.

*Update: Marxist economist, Chris Dillow, has an excellent post describing how problems like long working hours can naturally arise without actually benefiting anyone.

International / Migration / Old Blog

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Which way will Europe go in May 2014? Is free-movement the key to the elections and a just Europe?

In the aftermath of the euro-crisis, there is an increased awareness (both in the hallways of the EU parliament and amongst the citizens of Europe) that what is most needed is some type of political union. It is my contention that the greatest threat to such a political union and any sense of solidarity between the many people and nations that make up Europe is the attack on free movement that first arose from several national right-wing parties. Preventing free movement is a top priority for all these parties: Marie Le Pen’s National Front in France, UK’s UKIP Party, Geert Wilder’s PVV party in the Netherlands, Norway’s Defense League, Sweden’s Democrats, Hungary’s Justice and Life Party, Bulgaria’s Attack Party, Austria’s Freedom Party, the Greek neo-fascist Golden Dawn party, Germany’s new anti-euro party (AfD), and closer to home the Flemish NVA Party led by Bart de Wever. All are expected to have record high turnout in May 2014; several are also trying to join forces to form an anti-European and anti-migration coalition. Their rhetoric that the euro-crisis and the rising unemployment figures are all due to the free-movement policies is immensely successful, so much so that it is being adopted by many more center and left-leaning parties. Within Europe, their discourse attacks the most recent members of the EU, those from Bulgaria and Romania. From beyond the borders of the EU, their discourse is one of a defense of the so-called Judeo-Christian tradition that grounds Western and European civilization. Tragically, both of these positions often boils down to a form of Islamophobia as the implicit assumption is that free-movement has allowed for Muslims (the Jews of the 21st century) to invade Europe. This point is even more acute this week with Monday being International Holocaust Remembrance Day.
If they have their way in May 2014, Europe will shift so far to the right that it will, like Humpty Dumpty, have a great big fall. The solution is that the voting public needs to realize that immigrants, and

third-party nationals, are the solution and not the problem. Here are three reasons why Europe needs to further open the borders, rather than further restrict movement.

  
    1.     The economic expense of restricting free movement is excessive. David Cameron, among other leading European politicians, is trying to keep this evidence from the public until after the elections. It is not only a historical truth that Europe could not have survived without immigration; it is the current economic reality of all major European nations as demonstrated by Phillipe Legrain (LSE). The other economic cost is the rising budget of Frontex, the EU’s border management agency. While it’s official budget was only €86 million (in 2013), this is only the administrative costs as all the equipment costs (which are well into the billions) are taken directly from the national budgets of the poorest European countries (who are required by EU policy) to ‘control’ their borders.
2.     The ethical price is too high to pay. As Nina Perkowski documents there have been almost 20 000 deaths from those trying to get into Fortress Europe. This scandalous number does not include the many, including the elderly, children and pregnant women, who have been seriously injured, imprisoned or exiled all for wanting nothing more than a better life for themselves or their loved ones.  
3.     The controlling of these borders, especially as implemented by Frontex since Eurosur (a pan-European surveillance system) went live in December of 2013, has broken many basic human rights and thus blatantly ignored the Charter of Fundamental Rights of the European Union. These include the overcrowded and unhygienic conditions in supposedly temporary prison cells, the ‘alleged’ use of torture, etc. 
(for the interactive map see: http://frontex.europa.eu/trends-and-routes/migratory-routes-map)
If the above three reasons to open Europe’s borders don’t convince you, perhaps the political or pragmatic truth will. As long as pro-European parties continue to adopt the anti-immigration rhetoric of the right and deny the importance of open borders, there is very little hope of either economic or political solidarity in Europe. Political solidarity in a democratic and just polity cannot be constructed upon a Schmittian friend/enemy distinction; the ‘us’ cannot only exist as long as there is a ‘them’ to define it.
What do you think? What way will Europe go? Is there another issue that you think will be more pivotal than free movement?

Distribution / Economics / International / Old Blog

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Ethical trading as profit sharing: An alternative perspective on the terms of international market transactions

The increase in cross-border trade around the world during recent decades has been accompanied by a growing concern with the terms under which international market transactions occur. The claim that these terms are often morally problematic has come to play a prominent role in theoretical debates as well as in political initiatives such as the Fairtrade movement. While it is not always clear what the exact normative basis for this claim is taken to be, defenses most commonly focus on the low absolutelevels of welfare enjoyed by trading parties in developing countries. My aim in this contribution is to suggest that this focus tends to ignore what appears to be a justified independent concern with the relativedistribution of the economic benefits that result from international market transactions.
According to what appears to be the predominant perspective, the terms of international market transactions are morally problematic if they leave one of the trading parties badly off in certain absolute terms – for example, if the price that producers of coffee or other agricultural commodities are being offered is insufficient to provide for even their basic needs. Common as it is, this perspective faces a well-rehearsed objection. First, badly off as a party may be in absolute terms, she typically derives an economic benefit from the transaction; and second, it is not obvious why the mere act of engaging in a mutually beneficial exchange with a party that happens to be badly off should be taken to give rise to a particular (role-specific) responsibility for that party’s absolute level of welfare.
For the present purpose, I am going to set aside the question of whether this objection is successful or whether transacting parties can indeed be held responsible for each other’s absolute welfare. Instead, I am going to present an alternative perspective on the evaluation of the terms of market transactions that is immune to the mentioned objection and that seems to be neglected in current debates. According to this perspective, trading parties have a responsibility to transact at a price that ensures that each of them receive a fair share of the economic benefits that result from a transaction.
In rough terms, the argument in support of this view takes the following shape. International market transactions represent a form of mutually advantageous cooperation: they are typically beneficial for both parties involved, and the realization of each party’s benefit depends on the other party’s material contribution to the exchange. At the same time, trading parties generally face a range of possible mutually advantageous prices. The limits of this range are defined by the respective price at which an exchange would cease to be beneficial to each party, such that the choice of the price at which the transaction ultimately takes place determines the size of the benefit that each party derives from the transaction. Given the cooperative character of market transactions, parties ought to be disposed to transact at a price that ensures a fair amount of benefit to each of them.
This second perspective imposes clear constraints on the morally permissible terms of international market transactions even if we assume that parties have no responsibility for each other’s absolute welfare. In one way, the demand of a fair distribution of transactional benefits is more limited than the initial perspective described above. Conceptually, the demand is constrained by the range of mutually advantageous prices in a given situation, and it may well be that no price on this range is sufficient to fully provide for a party’s basic needs. There is another way, however, in which fairness in the distribution of transactional benefits is significantly more demanding. According to the first perspective, there would appear to be no moral constraint on the profit that a party may make as a result of a transaction above and beyond what is required to guarantee that each party enjoys the relevant absolute level of welfare. To stay with the example, provided that her foreign suppliers are sufficiently well-off, a European coffee importer would be morally free to make whatever profit she is able to obtain in the market. Any such profit, however, is a reflection of the price at which the initial transaction took place and thus subject to a fair distribution of transactional benefits. Following the perspective I have described, then, rather than focusing on absolute levels of welfare, we should think about ethical trading in terms of profit sharing.

Democracy / Governance / Old Blog

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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.

Distribution / Gender / Old Blog

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How poverty antagonises the interests of children and those of women

This is a post about the difficulty of addressing a particular issue of justice that exists against a background of unjust economic and politic arrangements. It illustrates how attempts to rectify one kind of injustice risk to aggravate others.

All around the world there are lots of kids who spend many of their childhood years, and sometimes their entire childhood, without much face to face contact with the people who used to be their primary caregivers, and whom they still see as their parents. This happens as a result of temporary migration for work, of the kind that, for legal, economic and other pragmatic reasons, doesn’t allow migrant parents to take their children with them. Temporary migration has always existed, but it has been on the raise recently, thanks to the opening of labour markets and to the increased accessibility of long-distance travel. Moreover, temporary migration has become increasingly feminised due to the world-wide abundance of jobs in traditionally feminised sectors such as care for children, the ill, the elderly and menial work.

And this is the point where some of the trouble starts: parenting, too, is a traditionally feminised activity, especially the bits that have most to do with hands-on care, daily involvement and emotional support. It’s true that a new model of involved fatherhood is becoming popular in some of the richer countries in the world; but most temporary migrants come, for obvious reasons, from the poorer countries that also tend to be more gender conservative. Because mothers are usually the more involved parent, their migration (without the children) is bound to be harmful at least in one way: it deprives children of continuity in care. And children are generally believed to need continuity in care: severing a firmly established bond between children and parents represents significant harm to the child. No doubt, many of the migrants’ children also benefit from their parents’ migration, because parents usually send remittances that pay for better housing, education and creature comforts. It is hard to aggregate the benefits and harms that parental migration entails for children. Some studies suggest that these children are worse off with respect to educational achievements and social relationships with their peers, others deny it. Most studies I’ve seen tend to agree that, compared to their peers, migrants’ children suffer from more feelings of sadness, insecurity and isolation and from lack of adult guidance. So, even if migrants’ children are better off materially, this doesn’t take away from the fact that growing up with very little, and only sporadic, face to face contact with one’s parents is an important kind of deprivation. These children suffer an injustice.

But who is responsible for the injustice – who has the duty to prevent or mitigate it? It is their individual parents, to whom they are already attached, that children need, and so it seems that it is these individuals who should make things right. This is a difficult claim to make, for two reasons. First, on closer inspection, it often turns out that the mothers’, rather than the parents’, absence is most harmful. But isn’t it obviously unjust to blame women for ‘abandoning their children’, as the media often puts it? Why aren’t fathers equally involved in parenting in the first place, such that they become able to provide practically and emotionally for their children when mothers-only migrate? And, second, leaving this unjustified gender asymmetry to the side, in many cases it seems unjust to ask migrants to take the full responsibility for their children’s predicament. Temporary migrants usually cannot find proper – or any – work in their country or region of origin, and migrate in order to provide for basic necessities for themselves and their families. They do not abandon their children merely in order to keep up with the Joneses and, morally speaking, they don’t abandon their children at all; part of their reason to migrate is children’s wellbeing. Migrant parents merely find themselves in the impossibility to provide for all the important interests of their children: in continuity of care as well as in proper housing and reasonable economic security, for instance. It is not their fault that they cannot ensure all these things. And it would be too easy to say ‘they should not have had children under these conditions.’ Maybe it was not entirely their choice to become parents. Maybe they did not, and could not, foresee their current poverty or economic insecurity. And, in any case, it is unjust for people to find themselves in a situation in which they ought not to parent due to (collectively avoidable) economic circumstances.

What do you think?

Duties / International / Old Blog / Punishment / Rights

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Should Snowden go back to America?

Source: Wikimedia Commons http://en.wikipedia.org/wiki/File:Edward_Snowden-2.jpg  

“Mr Snowden violated US law. He should return to the US and face justice,” argued a senior White House advisor. That attitude reflects the reaction of many in the American and British security establishment to Snowden’s leaking of classified documents detailing the mass surveillance programs of the US and British governments. Currently Snowden has temporary asylum in Russia, which is due to expire at the end of July 2014 (though I’m still hoping Germany might do the right thing and offer him asylum). There are however I think broadly three reasons that could be given for why Snowden should instead go back to America and face trial, only one of which has I think has some plausibility, though I think its overridden by other considerations.
First, some might argue that Snowden should go back and face trial because he harmed national security. This is the kind of argument made by the security services themselves and their political allies. The head of Britain’s MI6 for example said that the UK’s enemies were “rubbing their hands with glee” at Snowden’s revelations about spying practices. I think this kind of argument is entirely wrong. Not only should we be sceptical that national security, as it conceived by the US and UK authorities, is something to be protected. But as Glenn Greenwald shows in his excellent replies to this BBC interview the supposed harm done to national security is unproven, and most likely untrue. ‘Terrorist’ groups for example already know that everything they do is subject to intense monitoring by the security services. It is also an attempt to distract from how these surveillance programs have invaded the privacy of innocent people. Furthermore, we should always question official claims of harm done to national security if those same officials deny the public access to the information required to evaluate those claims.

Glenn Greenwald on BBC Newsnight
A second kind of argument doesn’t claim that Snowden did anything wrong but argues that if you carry out an act of civil disobedience you should be prepared to bear the legal consequences of it. It is often thought that even if breaking an individual law (such as leaking classified documents) can be justified for conscientious reasons, you are still have an obligation to the overall legal and political system. This means that you should stand trial as a way to show both your disagreement with the specific law and your commitment to that system. But as Kimberley Brownlee points out it is not clear that willingness to accept punishment is really an essential part of civil disobedience. In many cases of civil disobedience there does not seem to be any obligation to the overall legal and political system because that system is so unjust. This is definitely true of the US during the period of the civil rights movement (often thought a defining case of civil disobedience) and it is, I would argue, still true of the US today. The enormous levels of economic inequality, the extensive and institutionalised racial and gender injustices, and the military and economic actions of the US across the world, mean that citizens (such as Snowden) do not I think have an obligation to the US legal and political system.
A more plausible version of the previous argument is that Snowden should go back because this makes it more likely that people will take his views more seriously and challenge the surveillance programs of the state. This is essentially a strategic argument about what is most likely to convince people. A frequent reaction in the American press has for example to point to Snowden’s supposed ‘hypocrisy’ in asking for asylum from an authoritarian regime like Russia (it is frequently forgotten that Snowden was forced to stay in Russia because the US withdrew his passport). Returning to America, it could be argued, would make it easier to counteract this kind of argument and make the case against state surveillance.

While I think this is the most plausible argument (because we desperately need a campaign against the surveillance of the state) I don’t think its decisive. Its not clear to me that if Snowden would go back that it would make that much difference to the debate. There is an enmeshed security and media establishment in the US (and the UK) that is dedicated to the destruction of his credibility. Furthermore we have to consider how terribly the US has treated other similar whistle-blowers, such as Chelsea Manning. She was subjected to 11 months of solitary confinement, which the UN special rapporteur on torture described as “cruel, inhuman and degrading treatment” that “could constitute torture”, and she has now been sentenced to 35 years in prison. Given that Snowden could expect similar treatment I think he is justified in staying as far away as he can.

Governance / Old Blog

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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…)

Distribution / Duties / Health / Old Blog

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‘Social’ Deprivation

To say that a citizen suffers social deprivation is typically thought to imply that the citizen suffers poverty, has poor education, and has a low socioeconomic status. In this blog post, I am not concerned with social deprivation conceived in this way. Rather, what I understand by ‘social’ deprivation is ‘a persisting lack of minimally adequate opportunities for decent human contact’*. According to this definition, citizens suffer social deprivation when they are denied minimally adequate opportunities for interpersonal interaction, associative inclusion, and interdependent care, for example.
 
Social deprivation is closely related to loneliness – defined as the perceivedlack of opportunities for valuable human contact. A 2010 survey by the Mental Health Foundation reported that, in the UK, only 22% of citizens never feel lonely, 11% feel lonely often, and 42% have felt depressed as a result of loneliness. More tellingly, the survey also found that 48% of citizens strongly agree or agree that people are getting lonelier in general. Strictly speaking, loneliness need not be caused by social deprivation; however, it seems reasonable to think that social deprivation will often play an important causal role.
 
Worryingly, the adverse affects of social deprivation and loneliness are manifold. For example, various empirical studies have revealed that both social deprivation and loneliness are associated with numerous adverse health outcomes and morbidity and mortality, in particular. Notably, loneliness is reported to be as much as a predictor of bad health as smoking! In addition to their adverse physiological effects, social deprivation and loneliness also have adverse psychological effects: in fact, in extreme cases, such as those involving long-term solitary confinement, social deprivation and loneliness are often reported to be as agonising an experience as torture.  
 
What is the significance of all of this? Clearly, this evidence suggests that, in addition to a concern for citizens’ material interests, we should also have a concern for citizens’ social interests. In other words, we have weighty reasons to care about, and to protect against, social deprivation and loneliness. In the remainder of this post, I outline and briefly defend two more specific proposals that aim at serving this end.
 
First, our concern for citizens’ social interests seems to suggest that we should prohibit use of institutionalised forms of social deprivation, such as long-term solitary confinement and medical isolation and quarantine. Instead, and even if it is more expensive, we should look to use alternative practices that serve the same function as the original institution, but in a way that protects citizens’ interest in decent human contact. The argument here is simple: evidence suggests that these practices cause considerable psychological and physiological harm, and this harm far outweighs the level of harm citizens – and even serious criminal offenders – are liable to bear.
Second, our concern for citizens’ social interests also suggests that we have weighty reasons to invest in infrastructure that is conducive to the protection of opportunities for decent human contact. This could take the form of mobility assistance for those, such as the elderly, who are most likely to suffer social deprivation, or subsidies for organisations, such as community pubs, that play an important role in meeting many citizens’ social needs. Failing to invest here amounts to risking neglect for citizens’ social interests and, for this reason, must be avoided. 

*I take this definition of ‘social deprivation’ from Kimberley Brownlee, ‘A Human Right Against Social Deprivation’, The Philosophical Quarterly, 63 (2013), 199-222. 

Democracy / Economics / Old Blog

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Privatising Royal Mail: An Objection to Sub-Contracting a Commitment

Much has been written against the privatisation of Royal Mail. Often objections focus on one of two issues. First, majorities of both workers of Royal Mail and the British public were against it. Second, there are worries it will undermine the service it provides, with increased prices and decreased access in remote areas only two of the problems already cited. I sympathise with both worries, but my sense is that there is also a further difficulty, something that bothers me beyond concerns for popular sanction and proper provision.

There is clearly something problematic about sub-contracting certain actions. I should not, I think, appoint someone else, even someone who might do a better job, to write the message in my partner’s anniversary card. Such qualms can also arise in group actions. For example, if I am a member of a neighbourhood watch group, it does not seem appropriate for me to have a third party fulfil my duties. Some worry here regards proper provision; perhaps a third party would not have the same interests in doing the job aptly. But even aside from this worry, even if the third party was more reliable and more vigilant, I think the group could object to me outsourcing the task. “We did not agree merely that the job is done”, they might say, “we agreed that you would do it”. Unless I had good reasons for delegating the duty – that I was incapacitated by illness, for example – I think I owe them an apology. I seem to have violated some constraint assumed in our commitment.

Similar cases can arise in the citizen-government relation. It can be thought that government is justified, in part, by its contribution to realising collective goods. There are goals individuals cannot achieve alone, so they collectively empower an agent to coordinate these activities. Obvious examples include national defence and law and order. When a government assumes these roles, it provides a commitment to undertake these tasks on behalf of a population, and, again, there seem cases where sub-contracting this commitment is inappropriate. I suspect that it is something like this concern which explains the high numbers uncomfortable with privatising prisons. This function seems like a collective end handed to a collective agent that, through privatisation, it is not performing. Even if it is done effectively by the sub-contracted, I think we can say: “but we asked you to do it”.

Does this argument apply to the postal service? I guess it is most plausible to suggest that the relevant collective good asked of the government here would be ‘to provide a coordinated means of communication between dispersed individuals’. Mediums other than postage could meet this requirement. However, my sense is that when the government does not provide an alternative medium – whilst it does not, itself, provide, say, phone or internet connection to all – a case can be made that it should provide one means of communication for its population, a default option of sorts. We collectively empowered an agent to facilitate nationwide contact and when they sub-contract or privatise that role completely, I think we can say: “but you committedto providing at least some form of communications network for us”.

There are cases where a government would be excused this responsibility: 1) if the population agreed to sub-contracting; 2) if the government were unable or found it too costly to provide the service. 1 does not apply here since the population did not have a say, and, as noted above, were against privatisation. 2 does not apply to a business making profit. In the case at hand, I contend that privatising Royal Mail involves objectionably sub-contracting a commitment, and that there is some (additional) reason for the government to reverse that decision or provide an alternative default option for societal communication.

 

Distribution / Economics / Old Blog

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Rewards and Responsibility in the Banking Sector

The source of a particularly spirited 4-hour debate in a bar in Istanbul with Will Abel (we know how to have fun) – I thought I would bring this debate to a broader discussion in, dare I say it, a more intellectually rigorous environment.
In the lead-up to the financial crisis of 2007-8, senior executives at investment banks oversaw a system in which their firms reaped substantial rewards for selling products which they knew would ultimately lead to substantial losses for whichever firm was left ‘holding the buck’. The result of these actions we know all too well: an international financial crisis which has negatively impacted the livelihoods of billions of people worldwide.
The low number of criminal prosecutions for these actions appears to be due to a combination of the complexity of the financial products involved, the widespread and interconnected nature of the transactions and the fact that it is notoriously difficult to prove harmful intent.Thus, while their actions were dishonest, immoral and reckless, they were not technically illegal.
If a doctor were to knowingly take risks when treating a patient and that patient were to be adversely affected as a result, the doctor would be criminally liable for their actions. Likewise, if an individual takes the risk of driving when overtired or intoxicated and injures another person as a result, the driver would be criminally liable. Yet, in the case of banking, we require an additional proof of intentional malfeasance in order to prosecute.
At the current time, senior banking executives are entitled to large scale benefits while passing on the risk to their shareholders, the taxpayers who are (effectively) forced to bail them out, and a global community which relies on a banking sector in order to function. Sanctions, meanwhile, have focused on fining the offending institutions – punishing shareholders and reducing banks’ ability to lend to individuals and small businesses – rather than the individualswho ultimately made these decisions. 
I move that, given the banking industry’s importance to society and the large benefits bestowed upon its senior custodians, they have a responsibility to avert such systemic levels of risk and should be legally liable for creating such levels of risk, regardless of intentional malfeasance. Not only is this a more just alignment of power and responsibility, it is a more effective way to deter reckless behavior in the future, thereby benefiting society more broadly in the long term.
Admittedly, there are difficulties in defining exactly what level of risk is palatable for society, assigning responsibility to specific individuals (since in this case the practice was so widespread) and how to deal with rogue traders such as JP Morgan Chase’s Bruno Iksil. To an extent, however, I think that these issues can be resolved on a case-by-case basis – in a sector which perennially finds new and innovative ways to make money this may even be preferable. But by establishing a precedent that not just intentional malfeasance but a negligent attitude to risk is an illegal act, we can develop a more just reward-responsibility balance and protect the interests of society from the excesses of the few.
Finally, as much as I still hope to see prosecutions brought against individuals whose actions led to the 2007-8 crisis, I do not advocate for retrospective punishment and would intend for the standards outlined above to implemented only moving forward. As frustrated as I have been by the lack of widespread prosecutions, I take solace in the fact that the rule of law has been upheld in the face of strong public pressure. Conducting prosecutions based on retrospective law changes could ultimately create a broader ‘chilling effect’ on society which would be contrary to my intentions.