Uber is hyper-capitalist? Welcome to capitalism, where have you been?

According to Salon, Uber is hyper-capitalist and must be stopped. Frankly I’m a bit annoyed with anything aggressive being labeled hyper-capitalist. Garment factory collapses in Bangladesh, that’s capitalist. The Triangle Shirtwaist Factory fire, that’s capitalist. Blowing up your fertiliser plant, that’s capitalist. Someone headhunting your employees? That’s hyper all of a sudden.

So SLOG, Uber’s recruitment drive, employs private contractors, disposable burner mobiles and fake identities to pick up lifts from Lyft, chat up their drivers. This results in some cancelled rides, but the purpose of the service is to pick up rides rapidly. A quick cancel ends in a quick new fare, the direct costs to Lyft are probably lower than other more common recruitment methods.

This isn’t hyper-capitalist, this is headhunting. If this was happening on LinkedIn to consultants nobody would bat an eyelid. The time taken out to interview and flirt with new potential employers isn’t seen as hyper-capitalist, just normal capitalist. I think there’s classism here too, that taxi drivers would be tricked into moving to Uber, but that consultants headhunted know what’s what.

Uber is also seen as hyper-capitalist because it’s subverting regulations. In Germany it’s just ignoring court rulings and running on venture capital. You mean….a capitalist firm…is ignoring regulations?! Colour me shocked. There are serious concerns about driver licensing and public safety, but none of this makes it hyper-capitalist. Just…normal.

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Ailuropoda economicus

The Jury’s still out on whether humans respond to incentives, but it’s clear that some species do.

The world’s first live broadcast of a panda birth has been called off after experts said the “mother” involved may have been faking the pregnancy to receive better treatment.

Wu Kongju, an expert at the Chengdu Giant Panda Breeding Research Centre where Ai Hin is kept, explained that not all “fake” pregnancies among the animals are just down to hormonal changes.

“After showing prenatal signs, the ‘mothers-to-be’ are moved into single rooms with air conditioning and around-the-clock care,” Wu told Xinhua. “They also receive more buns, fruits and bamboo, so some clever pandas have used this to their advantage to improve their quality of life.”

Photo taken by Kevin Dooley, used under Creative Commons license.

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I see dead people (but not racists)

Many voters are reality invariant, they say things about who they are rather than the world they live in.

In the US, more whites believe they have touched a ghost than believe blacks are discriminated against a lot. I would consider this a good example of people being reality invariant. Needless to say there’s ample evidence of racism, and little of ghosts, but note that these beliefs are treated differently.

Reality invariant voters are sometimes paid attention to, and sometimes not. It’s not enough to blame policy errors on politicians pandering to the reality invariant. When and where they’re tolerated or ignored tells us a lot too.

One reason there are racist policing policies is that white voters in America don’t realise they exist or pretend they don’t. But there are no ghost friendly policies to the same degree despite comparable levels of reality invariance.

Some of this is because the fish is the last to know the water. Many Americans have swam in racism so long they don’t see it. Another is that there is no institutional outlet for supporting ghost based policies unlike those for racism.

I think the idea of a reality invariant electorate is important, but it’s not nearly a complete theory, as the above example shows. History, path dependence and institutional capability and development all play a role in whether these reality invariant voters are catered to or not.

 

 

 

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Poor people are not reality invariant, give them your money

On Monday I wrote about the reality invariant. Often these people are reality invariant because they can afford to be wrong. Nothing too bad will happen. They won’t be brutalised by the police if they crack down on non-existent crime. They won’t be detained at the border. They won’t discover themselves poor.

Some people can’t afford that level of detachment, people who are poor. In fact often they have few views on policy, they’re too busy. That’s poor people and they’re very practical. That is why I support Give Directly, a charity that gives money directly to poor people, no strings attached.

I’ve written about them on a number of occasions. Just search this blog for more. They find poor households in Kenya and Uganda in areas which have a mobile payments network and give them money. This seems personally the least patronising way of helping people and ideologically the most appealing to me.

But am I being reality invariant? Am I giving poor people money because I want to feel empowering and it reflects my anti-bureaucracy instincts? Well, as it turns out no. I was right all along. Which is a relief. As well as doing regular audits of measured outcomes the Give Directly people also speak to recipients and ask what they want.

It turns out they do want cash. If an NGO offers you a free cow shed you’ll say yes, but if you have the money yourself you might find it makes more sense to buy a water purifier. But if the purifier people are in the village next door and the cow shed people are in town, fuck it, have a cow shed. Why not?

That’s the story Give Directly tell (without the swearing, I added that, for colour) about why they’re efficient. And Give Directly are efficient, but efficiency isn’t all there is to life. Turns out its not just efficiency that the poor need. Giving them money may sound infantalising or like it would breed dependency but that is not the case. Recipients tell a totally different story.

Being given money means that goods which are bought are more valued. If you end up with a cow shed or a water purifier it is because you really wanted one. Rather than infantalising you, being given money is empowering. These aren’t lazy people, they’re often working constantly so the money gives them the power to respond to shocks and gives them the dignity to set their own standards. Rather than buying one big off the shelf NGO supplied thing recipients can shop around for the items they really want.

These people are empowered by money. Commerce and money are great liberators. Luckily a lot of evidence is building up that proves this and that also proves it is an easy gift for you, dear reader, to give. So if you are thinking about supporting a charity, and I believe lots of people are at the moment, then consider donating to Give Directly.

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Photo above taken from Give Directly’s 2013 report.

Making policy for the reality invariant

I like to call a lot of voters reality invariant. I’m definitely not saying they’re stupid, just that their opinions are reflections of their internal world, and are invariant to reality. Policy makers are treating these signals as true statements of their view of the world and want to change the world to satisfy them. Because some people are reality invariant this is doomed to fail. This is my suggestion for the converse of the Lucas critique.

The Lucas critique says that policy made using past observations won’t be effective. If you change policy from that which produced the predictions you’re using to change policy, the policy change won’t work as expected. Imagine FIFA is corrupt (!) and a team bribed it to make headers worth double, because in past competitions it would have advantaged them. Because rules change in a predictable way any previous advantage might vanish as other teams adjust their playing style.

In contrast, voters being reality invariant mean policy changes won’t work because people don’t care about policy. If you make policy to change a real outcome people say they care about but don’t, then a effective policy won’t be successful. You’ll change the targeted outcome, but not please voters. This can be misinterpreted as failing and so policy must double down on reality, even as the reality invariant remain oblivious.

One of the most obvious is immigration. For many people around the  world national immigration controls are not an issue. Around 10% of people think it is an issue at any one time. In the UK, that figure is around 45%.

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This is despite British people agreeing with the rest of the world about their local area. Britons think that immigration is a huge problem nationally, but if everyone went and visited each other they would find out it isn’t.

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For over a decade tighter and tighter immigration acts have been passed to the point where the immigration question has been solved. Short of Ukraine or Turkey joining the EU, or the UK leaving, immigration controls cannot get any tighter. And yet the British public are still not satisfied. [1]

It’s that second graph you should worry about if you’re a policy maker. The British don’t care about immigration. They care about the perception of immigration. British politicians have been very effective at reducing immigration. Only 1% of those who want to enter do so. The public don’t care.

They’re reality invariant. You can change reality but it will have no effect on their voting habits or opinions. You can lament the rise of spin, and I do!, but there’s a reason it’s so important. We’ve reached the effective limit of immigration restrictions and the public are still not satisfied.

Inequality is another area where people are reality invariant. Various policy changes have turned the US into a more unequal country, even as European states have held of the worst excesses of liberalisation. The FT have results of a survey that shows nobody understands how unequal their country is. Americans believe their country is more equal than it really is, and Europeans think their countries are more unequal than they really are.

“The results of the study suggest that, in the political debate on income distribution, it is often not the facts that count but [perceptions],” says Professor Michael Hüther, director of the Cologne-based IW economic institute, which carried out the research.

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In Hungary belief in widespread poverty is supporting the growth of Jobbik and Hungary’s slide into fascist politics. In America belief in egalitarianism prevents help going to the poor. The voters are reality invariant, they are discussing how they feel about reality, not reality.

Crime is the most famous example. Fear Of Crime™ is a major issue. Crime just isn’t.

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The reality invariant voter looks at this and sees fiddled numbers. By 2007 crime was the number one concern for British voters, briefly displacing “immigration” before being engulfed by “the economy.” Despite violent crime falling in half, fear of crime continued to increase.

War is the last area I want to briefly touch on. War, what is it good for? Absolutely nothing, until it’s useful for absolutely anything. Intervening somewhere is a very bad idea, until it isn’t:

It doesn’t matter, how many times your Yazidis get off the mountain without significant UK aid or an entirely theoretical artillery seige of Bengazhi with rapacious house-to-house murders turns into an actual, person-killing, NATO-supported, civilians-running-everywhere seige of Sirte.  There’s always some compelling reason why this war, this intervention, this bombardment, is radically different to all the other invasions and occupations and airstrike campaigns, and why the horrible news always means that there’s no time for rational thought this time before we start blowing that shit up.

I’ve come to you with a problem, and a snappy term to describe it. Traditionally this is where a writer would offer a solution. But not me. Lucas didn’t have a solution, he had a critique. I am also merely pointing out that policy is today being made foolishly. The assumption of policy makers that changing reality will have the desired effect is based on a faulty model. It is a very rational model, but the model is wrong nonetheless. Lots of the public are reality invariant, and you can’t make policy presuming they’re not.

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[1] As Chris points out, the reality is that these policies kill and kill intentionally and purposefully. But this is also a reality most people ignore.

Sex and coal

Reading the below and Lori Adorable I was reminded of an old Chris Dillow post, coal not dole. What would happen if Sweden were successful and ended demand for paid sex?

Some say sex workers will find other work, Lori says this is ridiculous. Lots of sex workers say we need to end violence, not demand. I say, because I’m a bit weird, what’s the evidence from Britain’s coalfields?

Since the beginning of the 1980s the British coal industry has lost around a quarter of a million jobs, largely because demand for coal from deep mines vanished. The analogy isn’t great, but it crossed my mind and I haven’t had a decent idea for a blog post in five months. Sue me. So, it turns out, of the 213,000 mining jobs lost since 1985, 90,000 have not been replaced. The miners were promised that Thatcher’s glorious entrepreneurial Britain would find them new jobs. It did not.

The market failed Britain’s old labour aristocracy and the state did little better. When Thatcher’s job machine stalled at Watford Gap Blair’s public sector investment helped. Of the 90,000 jobs created, many came only because  of intensive investment by local authorities, development agencies, central government and the European Union. More than half of these 90,000 jobs were created since 2001.

If demand for something disappears it should reappear somewhere else. But that doesn’t mean those left without work will benefit. It might be easy to assume the market will allocate labour effectively if a job disappears, but much of the evidence we have suggests otherwise.

Miners were economically organised, politically powerful, physically healthy and ultimately received significant investment in jobs. Despite all this communities remain scarred to this day. What would be the result of a end to demand for sex workers who are more politically and economically isolated, more absent from the media, and often physically and mentally unable to do other work? I’ve had five months off, so I’m a little rusty. I will leave the rest of this nasty little thought experiment as an exercise for the reader.

What if the immigration debate ended but nobody noticed?

There is no difference between the parties now. I know that sounds like the hyperbole of a political try-hard, but I think it’s true. In the early 2000s Labour solved the problem of asylum seekers and it took everyone a long time to realise. At some point in the last few years the problem of European migration was solved and people still haven’t noticed. The rhetoric will vary but the UK’s immigration policies for the next generation are set. Unless the UK leaves Europe we know what immigration policy is going to look like. 

Refugees

In the early late 1990s, southeastern Europe tore itself apart and refugees started to appear in the UK. Labour passed lots of laws that stripped refugees of their rights. It worked, but Labour get little praise for their achievement.The numbers of asylum seekers in the UK sank from 84,130 in 2003 to under 20,000 from 2009 onwards. The asylum seeker question is settled. They should be prevented from arriving, but if they make it here we don’t let them work, give them the worst housing and £5.23 a day each for food, sanitation and clothing.

Asyum UK

Despite the number of refugees staying high globally, Labour successfully helped the UK dodge its internationally responsibilities towards the world’s refugees. Labour don’t get any thanks from the Tories or Lib Dems but everyone is a Blairite now when it comes to asylum policy. There are no suggestions we weaken sanctions or accept more refugees, the matter is dead. All eyes are on the politics of European migration.

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In 2004 the UK, Ireland and Sweden opened their borders to the A8 ex-communist states, the rest of Europe waited to see what happened. We received not 10,000s of migrants as predicted, but 100,000s. Just as the asylum problem was “solved” a new front opened. Europe, specifically poor Eastern Europe, is the political problem and as John Rentoul points out, there’s very little between the main parties on migration. At Question Time on Thursday Rachel Reeves and Michael Heseltine both banally agreed it had been a mistake to let in the Poles.

Just as the asylum problem was solved and nobody noticed so has the problem of European migration. If in 2017 we vote to leave the European Union then we will see a drop in migration. Much more likely though is us staying in Europe and accession states having their free movement restricted. How this policy will manifest is difficult to predict but each party will follow a similar line. Migration will stay in the low 100,000s because the UK, for all its faults, is much better than most other places and we won’t leave the EU. Asylum Refugees will remain betrayed and politically unimportant and non-EU migrants will remain able to move here for family reasons or if they’re rich, well educated and have a corporate sponsor.

People will keep moaning about immigration, but “Europe and immigration” now means “what do we do with Ukraine and Turkey.” Geopolitically Europe wants them in their sphere of influence but don’t want to deal with over 100 million new European citizens. On immigration the parties are agreed. On geopolitics too they want Turkey and Ukraine to be in the European sphere of influence. Managing this will be a huge challenge but its a very different immigration debate to the one we’ve been having for a decade and a half. That debate is over but I’m not sure anybody has noticed.