FIFA and the wider problem of corruption

Sepp Blatter, re-elected as head of FIFA, gained so many first round votes that his opponent withdrew.  Many of those votes came from Africa, Latin America and Eastern Europe.  Not many came from Western Europe and North America.  How could the man be re-elected after presiding over an administration that for decades has involved bribes to delegates and illegal payments by sovereign governments? 

The answer may be simple.  In many of the countries whose delegates gave him votes, corruption is a normal part of everyday life.  You want to do business?  You bribe a bureaucrat.  You want to move goods across the country?  You have cash ready at the police checkpoints.  You want to win a government contract?  You transfer funds into the secret foreign bank account of the President's sister.  Corruption is endemic, and their people suffer its consequences.  This could be why so many delegates seemed relatively sanguine about its exposure in FIFA.

That corruption is so widespread is a major factor holding back economic growth in developing economies.  The Organization for Economic Co-operation and Development estimates it at more than 5% of global GDP, with the World Economic Forum putting it at US$2.6 trillion, and the World Bank putting the amount paid annually in bribes at over US$1 trillion.

It adds costs to business activity.  The kickbacks have to be factored into production costs, raising prices and therefore reducing the volume of activity.  Less wealth is created than there would be without it.  Corruption is like a tax, but a particularly toxic one because of its covert and unpredictable nature.  Tax incidence is public; it can be calculated and taken account of; but no-one publishes tables of bribes that will have to be paid.

Corruption causes resources to be misallocated, with contracts being awarded to firms that would not have won them in open competition.  Bribes to ministers lead to construction projects for which there is no genuine market demand.  Those with access to decision-makers, and with resources to bribe them with, are advantaged at the expense of those lower down the social scale with neither influence nor resources.

Because corruption is illegal, its prevalence undermines respect for the law.  It also corrodes the public trust that is part of the background of successful market economies.  The only antidote to it is a government with the moral integrity to uphold the law, and for a legal system that remorselessly exposes and punishes the perpetrators.  The FIFA scandal is about more than football; it gives us another glimpse into a worldwide problem.

RIP John Nash

In a Think Piece for the Adam Smith Institute, Vuk Vukovic pays tribute to the endlessly influential theorist John Nash:

It is with great sorrow we hear that one of the greatest minds in human history died this weekend in a car crash with his wife while they were returning home from an airport. John Forbes Nash Jr., was widely known as one of the founders of cooperative game theory whose life story was captured by the 2001 film "A Beautiful Mind", is truly one of the greatest mathematicians of all time. His contributions in the field of game theory revolutionized the way we think about economics today, in addition to a whole number of fields - from evolutionary biology to mathematics, computer science to political science.

You can read the whole piece here

Madsen Pirie writes for the Times on EU subsidy of rapeseed

Madsen has a piece in today's Times (paywall). He links the yellow fields of rapeseed that are making hay fever sufferers sneeze and wheeze to EU subsidies. After the Canadians bred a low acid version of rapeseed in the 1970s, the EU originally subsidized the seeds and the planting of it, not the actual crop. Then it went on to subsidize it for making bio-diesel, because it wanted a renewable energy source. So our green fields have been overtaken by a lurid yellow that many people dislike, and hay fever sufferers dash to the chemist's in large numbers.

By careful breeding, Canadian scientists produced a low acid version. Rapeseed was transformed, and spread rapidly across Britain, changing the look of the spring landscape with its lurid yellow flowers. Its UK production soared from about 1,000 tonnes in 1970 to more than two million tonnes in just a few years.

It was not the crop itself that made it a farmers’ favourite but the EU subsidy paid to those who planted it. The EU paid cash not for the crop that resulted but to fund the seeds and planting. It was a bonanza for landowners.

Read the full article here (paywall).

No, we don't want to bring back National Service

For the extremely simple reason that it is slavery to the State:

Prince Harry has called for the country to bring back National Service after revealing his time in the Army 'saved' him.

As he prepares to leave his 10-year military career next month, he has revealed his life could have been different if he had not served in the Army.

He said: “I dread to think where I’d be without the Army.

“Bring back National Service – I’ve said that before. But I put my hand up, as I said to the kids today, you can make bad choices, some severe, some not so severe.

“Without a doubt, it does keep you out of trouble. You can make bad choices in life, but it’s how you recover from those and which path you end up taking.

"I did it because since I was a kid I enjoyed wearing the combats, I enjoyed running around with a rifle, jumping in a ditch and living in the rain, and stuff.

"But then when I grew up, it became more than that, it became an opportunity for me to escape the limelight."

That military service has been good for Prince Harry we're entirely willing to agree (although we would point out that this is rather the purpose of Princes, that military stuff). Similarly, that many who do military service benefit from it we've no doubt at all.

But the imposition of enforced military service upon all is something we're adamantly against. The Army doesn't want it (and as with last time, that's where almost all would end up), we can't afford it (not so much paying people peanuts while they do it, rather the loss of what they would have been doing otherwise) and when we did have it it bred nothing but contempt for the entire society that imposed it.

But hugely more important than any of those practical reasons is the moral one. National Service is slavery to the State. For 18 months, whatever the service period is, they must put aside their lives to become a cog in the designs of the politicians. This is not something that a civilised society does, impose such loss of liberty upon all.

That military service benefits those who volunteer is just dandy. But the important word there is "volunteer". The imposition of conscription upon all, whether military or the various "compulsory community service" options being bandied about is an abhorrence.

More fool's gold for the public health lobby

The Telegraph published a feature yesterday on a father and son who decided to take on a new area of research in “gut microbiodiversity” – by seeing what a McDonalds-only diet would do to gut bacterial species. Spoiler alert: your prediction is correct.

Quite openly adapted from the film ‘Super Size Me”, Tom Spector follows a strict diet of McDonald meals, beer, and crisps for 10 days straight, measuring the diversity of bacterial species in his gut at the end. Tom spends most of the article detailing his 10 day adventure:

At first it was really quite easy. I always went to the same branch of McDonald’s. I got quite friendly with them at the drive-through. “Oh, it’s you again,” they would say. I had to explain to them that it was part of my dissertation, I didn’t just have a twice-a-day McDonald’s habit.

Shockingly, things take a dive for the worse:

By about day three or four it started to get harder, with the tedium of the same food. But around the sixth to the seventh day I started to have some real problems. I was feeling really tired and lethargic, and I had trouble sleeping. I like to think I have a good metabolism, but I felt my body was having a hard time processing all the sugar and fat.

Phew, a happy ending:

Straight after the experiment, I drove to the supermarket and got two big bags of salad. I ate them all. I was over the moon. And the test results were fascinating. I’d lost 1,400 bacterial species in my gut in just 10 days, which was extraordinary. After a week back on my normal student diet I’d recovered a bit but not completely. I still don’t know if I’ve completely restored the diversity of species to my gut.

I realise this isn’t a particularly interesting or hard-hitting story. (Is it worth an ASI blog? Only tweets will tell.) But it thoroughly annoys me that these stories, clothed as ‘human interest pieces’, will inevitably be dubbed as a contribution to the ‘exposé' of fatty foods – also known as the fool’s gold mine tapped by the public health lobby.

For example, the article has three separate-but-related articles planted in the middle of the piece. Apparently this article should be linked to:

‘Junk food may not be dangerous for a quarter of the people, says scientists’ ‘Junk food kills bacteria that protect against obesity, heart disease and cancer’ ‘Health diet costs three times that of junk food’

Putting aside the third article for now, as there’s evidence that such claims are misleading, this fluffy human interest piece shouldn’t be linked-in with any kind of article that’s actually making claims about health. Extreme scenarios like Tom’s experiment don’t tell us anything about the real impact of fatty foods on our everyday lives – and they certainly don’t tell us anything about the effects of moderation.

No one thinks only eating McDonalds and intentionally not eating anything else for days on end is good for you. That’s just lunacy. What some of us do think is that Tom and his dad should be able to conduct any kind of gut microbiology experiment they want.

And if you’re the kind of person who enjoys reading about these wacky experiments, by all means, read on. I don’t get it – but I suppose the appeal of articles like these taps into whatever inspires people to watch extreme-scenario reality TV – where their diets spur just as much, if not more, controversy. Just whatever you do, don’t translate this into any kind of scientific analysis, or worse, evidence for public policy.

Women like dyads - men like groups

According to social psychology, stereotypes about groups tend to be accurate. This makes sense, because you'd expect an inverse Gresham's Law to operate: accurate stereotypes make you better at life; inaccurate stereotypes make you worse. It's like how markets drive out taste-based discrimination (racism, sexism) by making people pay for their unjustified prejudices. One such accurate stereotype is that women prefer one-to-one dyadic relationships, and men prefer membership in larger groups, particularly hierarchical coalitions.

New evidence for this comes in a recent study: "Women Favour Dyadic Relationships, but Men Prefer Clubs: Cross-Cultural Evidence from Social Networking" (full html paper) by Tamas David-Barrett, Anna Rotkirch, James Carney, Isabel Behncke Izquierdo, Jaimie A. Krems, Dylan Townley, Elinor McDaniell, Anna Byrne-Smith, and Robin I. M. Dunbar.

They added to the literature supporting this result in a rather interesting way:

The ability to create lasting, trust-based friendships makes it possible for humans to form large and coherent groups. The recent literature on the evolution of sociality and on the network dynamics of human societies suggests that large human groups have a layered structure generated by emotionally supported social relationships. There are also gender differences in adult social style which may involve different trade-offs between the quantity and quality of friendships. Although many have suggested that females tend to focus on intimate relations with a few other females, while males build larger, more hierarchical coalitions, the existence of such gender differences is disputed and data from adults is scarce.

Here, we present cross-cultural evidence for gender differences in the preference for close friendships. We use a sample of ~112,000 profile pictures from nine world regions posted on a popular social networking site to show that, in self-selected displays of social relationships, women favour dyadic relations, whereas men favour larger, all-male cliques. These apparently different solutions to quality-quantity trade-offs suggest a universal and fundamental difference in the function of close friendships for the two sexes.

This plays into Roy Baumeister's & Kathleen Vohs's work (see e.g.) on some of the sex differences (again, these may be biological or socially/culturally constructed) that may be working to underly differences in labour market activity and in turn the gender wage gap.

There is no inherent reason why men and women must have on average similar lives in order to have equally good lives; or in order for them both to have as good lives as possible (even if not equally good). It's OK for there to be differences between men and women.

Logical Fallacies: 20. Argumentum ad numeram

https://www.youtube.com/watch?v=7BUNbDelojg  

The final instalment in Madsen Pirie's series on Logical Fallacies; here he looks at the 'argumentum ad numeram'.

You can pre-order the new edition of Dr. Madsen Pirie's How to Win Every Argument here

Logical Fallacies: 19. Wishful thinking

https://www.youtube.com/watch?v=Z-R8tPr7Ab4  

In his penultimate video on logical fallacies, Madsen Pirie takes a look at 'wishful thinking'.

You can pre-order the new edition of Dr. Madsen Pirie's How to Win Every Argument here

The dark history of the minimum wage

We read today that the national minimum wage will increase by 20p an hour to £6.70 from October, and that this will benefit more than 1.4 million workers. What we hardly ever hear from politicians is how many people will feel the costs of this increase, in addition to the people who are already being hurt by having a minimum wage law in the first place. The problem with state-enforced minimum wage laws is pretty standard economic text book stuff: the minimum wage makes it harder for low-skilled workers to get a foot on the labour market ladder, it unfairly loads the burden on firms that employ low-wage earners (a burden that could be avoided by simply reducing the tax low-earners pay, or taking them out of tax altogether), and as a result it often causes inflation of prices and reduction in staff as firms try to recoup their losses.

With the announcement today, and with the Budget looming, I was very interested to stumble upon an article this week by Jeffrey Tucker about a Eugenics Plot Behind the Minimum Wage, in which we find out that in the early 20th century some eugenicists tried to introduce the minimum wage as a means of getting some of the lesser able people out of the employment market. Here are some relevant quotes that are bound to shock:

A careful look at its history shows that the minimum wage was originally conceived as part of a eugenics strategy — an attempt to engineer a master race through public policy designed to cleanse the citizenry of undesirables. To that end, the state would have to bring about the isolation, sterilization, and extermination of nonprivileged populations.

It was during this period and for this reason that we saw the first trial runs of the minimum wage in Massachusetts in 1912. The new law pertained only to women and children as a measure to disemploy them and other “social dependents” from the labor force. Even though the measure was small and not well enforced, it did indeed reduce employment among the targeted groups.

Leonard documents an alarming series of academic articles and books appearing between the 1890s and the 1920s that were remarkably explicit about a variety of legislative attempts to squeeze people out of the work force. These articles were not written by marginal figures or radicals but by the leaders of the profession, the authors of the great textbooks, and the opinion leaders who shaped public policy.

“Progressive economists, like their neoclassical critics,” Leonard explains, “believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it performed the eugenic service ridding the labor force of the ‘unemployable.’”

So when we hear politicians make minimum wage commitments in the run-up to the election, bear in mind that those that preceded them were always fully aware that wage floors precluded people from the labour market, and that they were once deliberately implemented to expunge the demographic landscape of those they thought inferior citizens that were unworthy of earning a living. That they so readily endorse a policy that places a barrier to employment for so many people tells you just about all you need to know about the extent to which winning votes matters far more than aiding people’s job prospects.

I hope that, in my lifetime, politicians and social commentators begin to get the simple message that if you artificially remove the lower rungs on the labour ladder, you make it difficult (often impossible) for people to climb it, or in some cases, get on it at all.

Logical Fallacies: 18. We must do something

https://www.youtube.com/watch?v=J_tnXrK8Zmk  

The latest logical fallacy examined by Madsen Pirie is the idea that 'we must do something'.

You can pre-order the new edition of Dr. Madsen Pirie's How to Win Every Argument here