GAYE: incidental charity

27 05 2011

I was very pleased to read that David Cameron is supporting the roll out of charitable donations via PAYE; I call it “Give as you earn.”  I’ve been a supporter of this idea for several years now as I find the main objection to charity isn’t the amounts involved, but the hassle (opportunity cost) of signing up.  People have money, but they don’t have time.  I am of the general opinion that instead of bewailing people’s lack of consideration for one another, they should focus on how to get the most out of people the way they already are.  People are busy, they don’t necessarily want to know, they don’t want to be stopped in the street.  But they do want to help, if it’s not too much trouble.  Some might find that cynical, but I don’t see the problem with it- there are ways of leveraging that human nature to the advantage of millions of people in need.

Equally, I’m sure that for many people, giving to charity seems like it won’t achieve much.  The Oxfam “£2/month or whatever you can” ads certainly had a strong impact on me as a child, although whether that was the awesome music is another question.  Nonetheless, it’s getting people to buy in to the idea that if we all just give a little, just a little, then on aggregate that’s a huge difference.

I would like to see by law, in every PAYE contract, a tick box granting 1% of your salary (or 0.5%) to a standard group or a rotating group of 5 star charities each month (or a given charity of your choice).   1% of net income (i.e. after tax) is, for reference, £10/month to someone earning £1000/month.  In 2010 UK GDP was £1474bn; 1% of that would be £14.7bn/year.

Charities received £52bn in 2009/2010 [source – The UK charitable sector: a snapshot,], so we’re talking about increasing their income by almost 30%.  So 1% gives 30%, and all it would require is a change to employee contract law to include a tick box.

For reference, I’m already signed up to a scheme of this kind, via Bell Fundraising.  In order to run a scheme, a company needs to have an agreement with a PGA (Payroll Giving Agency), there are 3 main PGAs who all offer a similar service, CAF, Charities Trust and Charitable Giving.  If you’re reading this whether it’s as an employer or employee, I sincerely ask that you at least consider either signing on to this or a similar scheme, or emailing your colleagues and managers and asking that they do so.

This is a small change that makes a big difference, we’re talking about 1% less for you and me meaning 30% more for those in need.  As a Liberal, forcing people to give isn’t charity, it’s theft; but not including the option to give seems like indifference to the point of cruelty.

To be honest we’ll sack you

23 05 2011

I hesitate before writing this.  I don’t wish to convey, in the least, that I imagine a utopian society where lying is acceptable, encouraged or seen as inevitable.  It isn’t.  I also think we live in a society that is distinctly not a utopia.  To improve the world, you have to work with systems that are in place.  Societal norms must be used even as they are not accepted and work is done to change them.

It aggravates me to hear people complain about politicians lying to them, or if not lying, then being less than 100% honest about their views, when the merest slip of the tongue, no matter how valid, honest or accurate the opinion, will get them fired (or much flak to that effect).

I think people need to perhaps consider that it is their attitudes that, in effect force politicians to be less than wholesome with the truth.  I challenge anyone reading this to imagine a politician being totally honest and keeping their job.  To not evade a question, to give complete answers, to share both the negative and positive sides of their policies and political positions, and retain even a hope of re-election.

Would you trust a politician who lacked the sense to conceal elements of the truth given the current state of our society, the bias of the media and the unwillingness of people to do read behind the headlines?  I wouldn’t vote for someone who was so naive.  Would you?

Is it then the politicians who can’t be trusted, or we who in effect, with our vote, are asking them “please lie to us”?


Difficulties with evidence based policy

20 04 2011

I have been considering lately a significant barrier to those of us who strive for non-partisan, evidence-based decision making.  To wit: who do you believe?  Increasingly there is a survey, think-tank, nth study, countless headlines, magazines and blogs on either (or every) side of a given position.  As such, is it the case that all decisions must be ideologically motivated?  Not in the sense that they are made without reviewing the evidence, but more in the sense that the evidence reviewed is already biased.

As I have mentioned before, I think that independent bodies need to exist to provide neutral information to both the government and the public.  The leaders of these bodies need to have full bios providing insight in to their affiliations.  Perhaps also with these positions only being approved by cross-party committee approval.

I would very much like to see a source for information that has undergone serious efforts to vet it for neutrality, as well as providing (by law) all sources to be provided, in full.  Can you imagine a news site that was forced to quote officials in full?  Or a rating system for polls and surveys that includes (as part of its rating system): the breadth of the survey in terms of numbers, demographics, etc and also the historical bias of the originator of that survey.

I think people could have more faith in the information they receive if the different sources of information were striving for this “substantial” rating- where an A grade would mean they had policies in place and safeguards to ensure neutrality, that all their sources were provided, and that those sources were themselves A grade in quality & neutrality.

Technological interrelatedness

28 01 2011

I recently came across an extract from David Landes on the self perpetuating economic cycle that drove the (first) industrial revolution, which I found so insightful that I felt it was too good to keep to myself:

“In all this diversity of technological improvement, the unity of movement is apparent: change begat change. For one thing, many technical improvements were feasible only after advances in associated fields. The steam engine is a classic example of this technological interrelatedness: it was impossible to produce an effective condensing engine until better methods of metal working could turn out accurate cylinders. For another, the gains in productivity and output of a given innovation inevitably exerted pressure on related industrial operations. The demand for coal pushed mines deeper until water seepage became a serious hazard; the answer was the creation of a more efficient pump, the atmospheric steam engine. A cheap supply of coal proved a godsend for the iron industry, which was stifling for lack of fuel. In the meantime, the invention and diffusion of machinery in the textile manufacture and other industries created a new demand for energy, hence for coal and steam engines; and these engines, and the machines themselves, had a voracious appetite for iron, which called for further coal and power. Steam also made possible the factory city, which used unheard-of quantities of iron (hence coal) in its manystoried mills and its water and sewage systems. At the same time, the processing of the flow of manufactured commodities required great amounts of chemical substances: alkalis, acids, and dyes, many of them consuming mountains of fuel in the making. And all of these products – iron, textiles, chemicals – depended on large-scale movements of goods on land and on sea, from the sources of the raw materials into the factories and out again to near and distant markets. The opportunity thus created and the possibilities of the new technology combined to produce the railroad and steamship, which of course added to the demand for iron and fuel while expanding the market for factory products. And so on, in ever-widening circles. ”

(Landes, 1972, pp.2–3)

I think this account is a fantastic example demonstrating the necessity of considering the dependencies of the economy.

#FPTP has no place in a representative democracy

19 01 2011

Assuming that the wrangling in the House of Lords doesn’t derail the legislation, this year may see one of the most significant reforms to our electoral system since universal suffrage was granted (fully) in 1928.  Ultimately the long history of political reform in this country (and elsewhere) has been driven by two fundamental urges- towards greater accountability of the executive (and thus a balance of power in government) and towards greater representation.

In 1928 the franchise was finally extended to all adults over 21 regardless of property ownership, qualification, gender, religion etc.  In 1969 the voting age was changed to 18, further extending the franchise.  I make the case that the drive for this was the urge for more representative government.  If more people are entitled to vote, parties seeking election must appeal to a wider audience to get their vote, the resulting government is then more representative.

One cannot fault governments of the past for not predicting the flaws of first past the post (FPTP).  Whilst it’s true that other voting systems were proposed throughout the 19th Century (if not earlier), the weaknesses of FPTP were not then apparent.  Equally, other voting methods were “untested” and thus unreliable.

Maurice Duverger (a French poltician & sociologist) observed in several papers in the 1950s and 60s that a system such as FPTP (known as a “plurality voting system”) tends to favour a two-party system.  That is to say, FPTP encourages a polarisation of the body politic, both in the minds of the people and the institutions of government.  This principle is referred to as “Duverger’s Law.”  In short:

i) smaller parties are unlikely to win, so voters desert them for larger parties
ii) parties with similar agendas split the vote, meaning neither get elected, this encourages parties to merge into larger parties

These two elements tend, over time, to a firmly entrenched two party system.  I contend that two party systems are, by nature, neither representative nor beneficial for their country.  The reason for this is simple- if there are only two options, neither has to be truly good to be chosen, only better than the alternative.  In effect, a two party system is a duopoly of government, and just as bad as any duopoly would be for consumers in the open market.  As for being representative, on the contrary a two party system means that you’re either “in” or you’re “out.”  As such:

i) supporters of the losing party are highly unlikely to have their views represented in government
ii) people whose views are not represented by either party are not represented in government (discouraging voter turnout)

Duverger himself argued that this was not a certainty (we here in the UK have bucked the trend), but merely that FPTP would both “act to delay the emergence of a new political force, and … accelerate the elimination of a weakening force.”  It has certainly done so, with coalitions, inherently representing a greater diversity of views, coming in to existence less than a handful of times in our history.

What’s worse is that this tendency towards polarisation is not the only downside to FPTP: the methodology of FPTP means that any votes for losing parties are discounted, resulting in millions of votes making no difference to the results of elections in “safe seats.”  As it is, the elections are decided by the minority of voters living in marginal constituencies.  This means that the potential governments are fighting to represent the views of these “marginal” voters and not of the electorate as a whole.  This map, based on 2005 electoral data, shows seats that haven’t changed hands for 40 years.

What’s more, the “winner takes all” methodology of FPTP, combined with ever-decreasing turnout means that MPs can be elected with only a fraction of the electorate supporting them.  Only three MPs elected in 2005 secured the votes of more than 40% of their constituents.  George Galloway polled the votes of only 18.4% of his constituents, yet ended up in the House of Commons!

Safe seats such as this reduce accountability of MPs to their constituents- as with monopolistic businesses, these MPs do not have to offer anything resembling a high quality service to continue in post- they are the only option.

So, in summary, first past the post is not fit for purpose as the electoral system of a representative democracy.  It discourages pluralism, restricting voter choice, it discounts the votes of millions of eligible citizens because they live in safe seats and weights unfairly votes from marginal constituencies.

As I said in my introduction, I strongly believe that electoral reform has always been driven towards greater representation of the people by their government.  It’s clear that first past the post only discourages representation.  For the same reasons we needed universal suffrage, we can’t have FPTP.  Democracy means power comes from the people- their views have to be taken into account.  Ours is a representative democracy, so let’s make it representative.

Licenses, Teas & Red Herrings

19 10 2010

In response to the recent Argus article “Opponents fight plan for city centre Brighton cafe“, I think it’s important to clarify the approach towards licensing in Brighton & Hove, particularly in the Cumulative Impact Area (CIA).

Let me open by saying that dealing with anti-social behaviour is one of the Council’s major roles in the City, and in my view, one that will only grow, not only because it is clearly the desire of the residents of the area, but for the culture of the City at large.  However, I think it is important to recognise with licensing issues that it is the implementation and the effects of it; the type of business and the intended customers that need to be considered, not the license or lack thereof.

As the commenters on the article quite rightly point out- this is a café, seeking to expand its offering and provide alcohol amongst its other beverages and food.  The objection raised is by a neighbouring bar owner (read: competitor).  I am writing this because I hope that what is clearly uncompetitive behaviour is not sanctioned in an attempt at political point scoring with respect to licensing restrictions.

Too big to fail: is there a dangerous precedent in decreeing that a given company cannot grow beyond a certain point?

18 08 2010

I am a believer in liberalism: people should be free to act as they wish (as long as they aren’t harming anyone without informed consent).  Consequentially, I believe in capitalism- people should be free to spend their money as they wish, buy what they want and so on.

Thus banking must be allowed- if someone has money and wishes to lend it they should be allowed to do so.  They should be allowed to lend it at whatever rates they wish to whomever they wish- it’s their money.  Interestingly though, the problem of banking could be described in terms of just how “informed” the “consent” of the people at risk of being hurt is.

 The problem is not the banks, who are merely acting to achieve maximum profit, but the regulation of them- the government.  Whilst some might argue that being too stringent on them will drive them away, personally I believe that the net cost to our country will be higher if we let them stay unregulated.

 In theory- banks should be allowed to fail and people who chose to bank with e.g. an investment-cum-retail bank are taking a risk which probably rewarded them with e.g. cheaper loans/mortgages or higher interest on their savings.  I.e. people are rewarded for banking with a riskier bank, which is economically sensible.  People who aren’t willing to take the risk can earn less “reward.”

 If a large bank failed, and the government allowed this, that government would lose support from all those customers.  Thus at least one party will always support bail outs as this will get them strong support in such circumstances.  Therefore no party can support allowing large banks to fail.  Thus the only solutions are:

i)                    prevent banks from failing or
ii)                  make banks small enough to fail.

 If banks believe they will not be allowed to fail this creates moral hazard- they will act in a less risk-averse fashion than they would otherwise.  So one must try to enact a framework that makes banks highly unlikely to fail without the implication that failing banks will be supported.

 Separation of investment and retail banks would reduce the exposure of retail banks, falling into category (i).  It would also make retail banking more competitive, as “combination” banks would not have more money to play with vs their retail-only competitors and vice-versa with investment banking.  Even in this scenario however, a bank that is too-big-to-fail (TBTF) could make risky business loans or loan at unsustainable rates in the knowledge it would be bailed out.

 I think this means that- as long as the electorate will punish any government that does not save their choice of unsafe bank, banks cannot be allowed to grow so large and must be broken up.  In theory there should be no upper limit on the size of a company, however we live in a democracy not in a theoretical society and must act accordingly.  Perhaps the issue is not with democracy per se, but rather with our particular implementation of it.  I think the trick would be to explore ways of implementing democracy that do not e.g. imply by their nature that companies of a certain type must not grow beyond a certain size.