Them and Us… and me

“All good people agree,

And all good people say,

All nice people, like Us, are We

And every one else is They”

/Rudyard Kipling/

We live in an era of extremes. The middle ground has disappeared. Actually, it did not disappear but it became invisible to all but the very few who still choose the middle ground. For everyone else it is perceived as being part of the opposite ground. The other tribe. The enemy.

Today, humanity, in all its complexity has been reduced to two pronouns: ‘Them and Us’. ‘If you’re not us, you’re them’, an antagonist. If you do not fully reject everything Jeremy Corbyn says, you’re a commie. If you entertain an idea heralded by the Tories, you’re a fascist. It became impossible to point out the futility of leaving the EU without being called a luvvie remoaner. Similarly, one cannot now criticise the EU without being branded a boneheaded brexiter. Not happy with the way things are run in Hungary? Only unconditional rejection can join the opposition. Agree, with something the opposition said? Say no more, you’re a Soros-financed agitator.

The most important skill I gained as an academic is the ability to look for the value in all opinions. It’s a precious skill to possess. It allows me to synergise two starkly contrasting viewpoints. It’s the ability to rise to synthesis from a thesis and antithesis. Today the social value of this skill is virtually zero. Probably, even negative. If i join the blind and unconditional extremes of one side, then at least I get the support of ‘my kind’. If I’m in the middle ground, I’m showered with hatred from both sides. And it has to be hatred. Unconditional and unqualified. This is not a time or place for empathy or compassion, only for fundamentalism.

What does a social scientist do in these times? I really struggle to see. Walk away? Shut up? Research something that nobody cares about anyway? Is there any hope for the middle to regain some of its lost ground? What can I do to help? Help?

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Brexit uncertainty: fewer mergers, big business winners

While it is widely recognised that last year’s EU referendum caused significant uncertainty for markets, some early indications were that it had not reduced the level of business confidence. Our results show that the uncertainty surrounding the referendum triggered a fall in the number of mergers and acquisitions, and M&A activity has not recovered. The mergers that have suffered the largest drop have been the ones that were large in comparison to the size of the acquiring firms. Finally, as a result of the post-referendum uncertainty, the businesses that have remained more M&A active have been typically the largest ones. Our results – that are based on a careful study design of a treatment and control group – contradict some of the earlier, more optimistic discussions, which were based on simple before-after comparisons. Read more of this post

Corbyn’s maximum wage idea? My unlikely defence

The talk of the day has been Jeremy Corbyn’s proposal for the introduction of a maximum wage. Much has already been said about it, so I’ll only give my quick, knee-jerk verdict, in favour of Corbyn’s proposal. When facing a choice between redistribution and the maximum wage, the latter might be a better solution. The intuition is simple: redistribution converts potential investment into consumption, whereas the maximum wage leaves it in the hand of businesses how the money is spent, meaning that more money is invested (rather than consumed), making everyone better off. Read more of this post

Sugar tax – good intentions, with unintended consequences

It looks like nothing’s going to stop the introduction of sugar tax on soft drinks in the UK. Draft legislation has been published and the new tax is set to start in 2018. There have been numerous studies demonstrating the need for this indirect tax, or predicting its likely impact (see the most recent one here). The problem is, that none of the previous studies (at least not the ones I’m aware of) consider the dynamics of what will unfold after the introduction of this new tax. Effects on the prices of other products are elegantly ignored. Because a hike in the price of sugary drinks is likely to be accompanied by an increase in the price of healthier alternatives, my bet is that the tax will not significantly reduce sugar consumption. On the other hand it will lead to a more general price increase, hitting the poorest more than the rich. Read more of this post

Rising xenophobia – a tragedy of the commons?

There have been a number of reports documenting the recent rise of xenophobia in our liberal democracies. In this short thought experiment I look at whether a tragedy of the commons type argument could be applied to this phenomenon, and if so, how its solutions could be adopted. The issue is massively complex, and this short piece isn’t going to do justice to it. This post is nothing more than a simple analogy that I thought up whilst ‘enjoying’ my early morning run in refreshing 7 degrees below zero. Read more of this post

The effect of Brexit on inequality – a stocktaking

Many interpretations claim that inequality was one of the key driving forces behind the Brexit referendum outcome. In the event that this is true it appears to make a lot of sense to look at how Brexit will affect inequality. In this post I look at some of the most widely anticipated effects of Brexit and discuss their likely impact on economic inequality. This short stocktaking suggests that Brexit will make Britain a more unequal place and much of this will be driven by unproductive (such as rent seeking) rather than productive sources of inequality.

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The liberating effect of killing off a state-owned rival

When the final flight of the Hungarian national flag carrier, Malev landed in Budapest there were widespread concerns about the European Commission’s decision to declare Government payments to the company as illegal state aid, leading inevitably to the company’s shut down. Four and a half years on, evidence appears to show that shutting down the incumbent state-owned fat cat was probably the best thing that could happen to Hungarian passenger air transport.  Read more of this post

Attitudes towards low and high-skilled immigration: the myth of rationality

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A beginner’s misfortune of going viral

I have to admit, none of my research had gone viral before. I work on things that can potentially save billions of pounds to consumers by identifying how unscrupulous business behaviour or misaligned government intervention can harm people. Despite its relevance, the general public has never been particularly interested in my work.

On Wednesday evening I posted something on my blog that changed all of this. I stumbled upon an interesting correlation between the proportion of obese people and the proportion of Leave voters in the same geographical area. What made this really interesting was the finding that the correlation remained even after accounting for regional differences in income, qualification, or employment. I did not jump to conclusions, I reported the data, provided sources so that anyone could check my findings, and concluded that more work would be needed to identify what is behind this correlation. Read more of this post

The weight of Brexit: Areas with high obesity rates more likely to vote Leave

I saw a presentation today that had an obesity map of the UK on one of its slides. Someone made a flippant remark about how much the map resembled to map of EU referendum results. And indeed, looking at the data confirmed that areas with high obesity levels were much more likely to vote Leave even when controlling for income, health, education, economic activity, and age. It would be naive to think that body-weight itself is a driver of voting preferences. However, it is a measurable characteristic that could help us understand the determinants of voting behaviour.

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