My recent writings

Hello, not dead, just tweeting.

I’ve done a couple of pieces on Medium, which is a lovely site to write on. Not going to close this blog, but will try and use this more for scrappier stuff that’s not meant to look polished and for stuff too long for twitter.

Last week I took issue with Dan Hannan’s terrible history. It really was dreadful and I recommend you read this post. It shows the danger of reading your ideology back into history rather than letting the sources tell you what really happened.

Tonight I wrote about the Tory’s doomed planned to weaponise Ed Miliband and invented the phrase “Begging the Miliband” for the tendency to presume Miliband’s unpopularity is innate, not state dependent. It’s here. Weirdly Phil had the same idea, must mean we’re right.

I wrote it be fore the bizarre revelations that Ed Miliband was dating Stephanie Flanders for ages…I believe this is meant to make him look bad, but it just makes him look cool… Even after all this time I still don’t think the Tories really get sleaze.

Do addicts need help…

…or do narcissists need mocking?

IN my last year on Wall Street my bonus was $3.6 million — and I was angry because it wasn’t big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.

Our Galtian Overlords ladies and gentlemen… And oh it gets better…

The first year was really hard. I went through what I can only describe as withdrawal — waking up at nights panicked about running out of money, scouring the headlines to see which of my old co-workers had gotten promoted. Over time it got easier — I started to realize that I had enough money, and if I needed to make more, I could. But my wealth addiction still hasn’t gone completely away. Sometimes I still buy lottery tickets.

What bizarre behaviour, worrying about money and occasionally gambling, I’m sure none of my readers could possibly sympathise.

Will Half The UK Be Obese Before 2050? Are The Press Credulous Nincompoops?

No. Yes. For fucks sake, what is wrong with the media? Lots, I suppose, but I’ll concentrate on their innumeracy and credulousness for now. I will also cover their prejudice and scientific illiteracy. Which is a lot to do in under 1000 words, but when you’ve such densely packed stupidity as our Obesity Crisis Bleughly etc. you can really go to town.

First, a little history lesson: in 2007 a report commissioned by the government stupidly predicted that if people continued getting obeser at the same rate by 2015 36% of males and 28% of females would be obese. By 2050, 60% of males and 50% of females would be obese. By the end of the century everyone would be obese and robots would need adamantium reinforcements to maneuver the nation’s vast bulk. A nightmare scenario, I’m sure you’ll agree. Here’s the chart:

British fat

Yesterday, the National Obesity Forum stupidly updated that stupid extrapolation. Rather than half of Britain becoming obese by 2050 they believe this will happen much sooner and that we need to something about this. Especially for the children. It’s always for the children (or the women). Their report helpfully recommends negging on fat people, bullying children who don’t like PE and the creation of government sinecures for ex-Forum busybodies. 

To come up with their dread warning, they’ve used an extra five years of data from the UK to update the projection above. It’s a projection not a prediction because of the data they leave out. If they included data from the US their scaremongering would fail and these busybodies might have to get real jobs: America’s stopped fattening. We don’t need to hypothesise about how fat we could get, we know. None, none more fat.

America fat

Something that can’t go on forever, won’t. That’s a simple thought, but scaremongers know when you’re scared you don’t think. Waistlines can’t expand forever. Eventually a population has to stop getting fatter and now we now know when this happens. America, the land where everything’s big, is no longer the land where everything’s getting bigger. When a third of a society get obese obesity levels off.

Predicting that half of Britain will become obese, when we’ve recently discovered the obesity event horizon should earn you derision. Instead it gets you wall to wall coverage. Incapable of crunching the numbers, the press report as fact a ludicrous projection using incomplete data and biased methods. I don’t want you to confuse my anger with surprise, this is par for the course. Innumeracy and credulousness covered, let’s talk about the press’s prejudice and scientific illiteracy.

Being fat is unhealthy right? Wrong. Okay, not fat, but being obese is bad, right? Wrong. Dead wrong, in fact. And I have a meta-study to prove it.

final_cochrane_logoThe words “I have a meta-study” should inspire joy or dread, depending on your position. A meta-study is a study of studies and they’re incredibly useful. You can read more halfway down this old post on how they save lives and reveal truths that might otherwise be hidden.

We’ve been looking at obesity for a very long time, and lots of individual studies have been done, but each has its own problems and each has its own margin of error. Collating several studies allowed researchers to look at 3 million subjects, from 12 countries, and use only the best data to assess the effects of weight gain on health.

The results might surprise you. They found that people with a Body Mass Index of 18.5-25, the “healthy” people, have higher mortality risk than every group of people up to BMIs of 35. The obese were less likely to die than the “healthy” people and the overweight people were significantly less likely to die than the “healthy” people.

Pick a random 5’4″ woman weighing 8 stone (remember to say hello). She has a higher mortality risk than a 14 stone woman of the same height (say hello to her too). You might be incredulous, you might even be angry: but I have a meta-study.

The below table isn’t very layman friendly, but click through to the paper, or read this op-ed, if you don’t believe me. I’m not saying you should gain weight, or lose weight, I’m saying that weight is a particularly poor indicator of health and that you should care about your weight a lot less. Especially care less about other people’s weight.


Not only are predictions of a looming obesity crisis based on nonsense maths, they’re based on nonsense science and reported by a nonsense press. The press are incapable of holding people with a shiny pdf and a slick press release to account. Because of this its all too easy for people to be bullied and for public health (physical and mental) to suffer.

Merry Christmas everyone!

A propos this, I thought I’d also say Merry Christmas.

Thank you for sticking around as this blog’s changed and my output has declined and become more erratic. I still love writing but I’m more cynical than ever before, and it can be easier to get that out of my system on twitter. I was going to post a spirited defence of Love, Actually but I can’t be actually be bothered now, too much food to eat, drinks to sink and friends and family to see. So until 2014 (or until I get bored of my family) have a Merry Christmas and a Happy New Year.

In which the @ONS sends me to the pub

The Office for National Statistics is working to improve its website which is great. One of the big advantages the American blogosphere has is the St Louis Federal Reserve’s data website FRED. It is much easier for them to find useful data. For example, I just spent 30 seconds making this graph. It’s the rate at which people quit their job:


This ease of data access makes it easy to tell stories. You can see the recession marked in grey and the recovery. But you can also see that for all the talk of success in the United States people are still more scared to quit their jobs than even the most pessimistic point of the mid-2000s expansion.

Easy access to data makes it easier to tell stories and to stop politicians and the media misleading you. If anyone says “optimism has returned to the US” I can point to this graph and say “eh, I don’t think so.” The ONS’s website is not easy to use but they’re working on making it easier. I wasn’t sure if I could make the above graph from the ONS data so I tried. Come on a journey with me in which I fail and end up in the pub.

I searched for “Quits” on the ONS which sent me to a 2003 pdf of Job Separations. The term “Voluntary job separation” is the ONS term for quits so I searched for that which sent me to this 2009 pdf on “Economic and Labour Market Review” from which I got this graph:


That’s not quite what I want. So I kept digging. About 10 minutes in now. But I’ve got a source Labour Force Survey, great! I google “Labour Market Survey” and go to this page:


Which isn’t particularly useful. If you search Labour Force Survey on the ONS website you get to a long list of search results but eventually get to this page titled “Labour Market Statistics, November 2013” and this page of 66 different data tables across (for no particular reason) three pages.]

I find the labour force flows tables under supplementary tables. It must have been 30 minutes now. I can’t find quits but I do have separations. Well I say that. What I really have is a combination of people moving from employment to unemployment and inactivity from one quarter to another and a bodge to turn that into this roughly analogous graph. It’s not quits, it’s a separations proxy, but it’s all I’ve produced.

UK Separations

Chris has a good post using the same data set here, showing that it’s completely doable to use the ONS website. It’s just not very much fun. What can I tell you from my graph? Not a lot, I can’t be bothered after all that work. I’m going to the pub.


It is worth pouring an hour of your life into this Adam Curtis piece

While the old institutions that grew up over the past hundred years to protect us now find themselves unable to comprehend or cope with the new systems of power. Politicians, regulatory institutions, intelligence agencies, the mainstream press, the police, the BBC, the colleges of academia- all of them, as McClure said in 1903:

They do not understand

And cut off from the real power struggles – these old institutions are starting to prey on each other. Leaving us both confused and undefended.

One newspaper editor writing about the loss of the independence of the farmers a hundred years ago summed up the new system: 

“The farmers farm the land, and the businessmen farm the farmers.”

Maybe today we are being farmed by the new system of power. But we can’t see quite how it is happening – and we need a new journalism to explain what is really going on.


People who have died a violent death in UK immigration detention centres

Posted without comment.

People who have died a violent death in UK immigration detention centres (*suicide) Siho Iyugiven (27), 5/10/89*, Kurdish, Harmondsworth Kimpua Nsimba (24), 15/6/90*, Zairean, Harmondsworth Robertas Grabys (49), 24/1/00* Lithuanian, Harmondsworth Mikhail Bognarchuk (42), 31/1/03*, Ukrainian, Haslar Olga Blaskevica (29) 7/5/03, Latvian, Harmondsworth Elmas Ozmico (40) 12/7/03, Kurdish, in hospital from Dover Kabeya Dimuka-Bijoux, 1/5/04, DRC, Haslar Sergey Baranyuk (31) 19/7/04*, Ukrainian, Harmondsworth Tran Quang Tung (35), 23/7/04*, Vietnamese, Dungavel Kenny Peter (24) 7/11/04*, Nigerian, in hosptial from Colnbrook Ramazan Kumluca (18), 27/6/05*, Kurdish, Campsfield Manuel Bravo (35), 15/9/05*, Angolan, Yarl’s Wood Bereket Yohannes (26), 19/1/06*, Eritrean, Harmondsworth Eliud Nguli Nyenze (40), 15/4/10, Kenyan, Oakington Muhammed Shuket (45), 2/7/11, Pakistani, on way to hospital from Colnbrook Brian Dalrymple (35), 31/7/11. Colnbrook Ianos Dragutan, (31), 2/8/11*, Moldovan, Campsfield Khalid Shahzad, (52), 30/3/12, Pakistani, on train from Colnbrook Alois Dvorzac, (84), 10/4/12. Canadian, in hospital from Harmondsworth Prince Kwabena Fosu, (31), 30/10/12, Ghanaian, Harmondsworth Tahir Mehmood, (43), 26/7/13, Pakistani, Pennine STHF Remembering also Joy Gardner (40), 28/7/93, Jamaican, killed by police while being deported Jimmy Mubenga (46), 12/10/11, Angolan, killed by G4S guards on BA flight (via Close Campsfield)

People who have died a violent death in UK immigration detention centres (*suicide)

Siho Iyugiven (27), 5/10/89*, Kurdish, Harmondsworth

Kimpua Nsimba (24), 15/6/90*, Zairean, Harmondsworth

Robertas Grabys (49), 24/1/00* Lithuanian, Harmondsworth

Mikhail Bognarchuk (42), 31/1/03*, Ukrainian, Haslar

Olga Blaskevica (29) 7/5/03, Latvian, Harmondsworth

Elmas Ozmico (40) 12/7/03, Kurdish, in hospital from Dover

Kabeya Dimuka-Bijoux, 1/5/04, DRC, Haslar

Sergey Baranyuk (31) 19/7/04*, Ukrainian, Harmondsworth

Tran Quang Tung (35), 23/7/04*, Vietnamese, Dungavel

Kenny Peter (24) 7/11/04*, Nigerian, in hosptial from Colnbrook

Ramazan Kumluca (18), 27/6/05*, Kurdish, Campsfield

Manuel Bravo (35), 15/9/05*, Angolan, Yarl’s Wood

Bereket Yohannes (26), 19/1/06*, Eritrean, Harmondsworth

Eliud Nguli Nyenze (40), 15/4/10, Kenyan, Oakington

Muhammed Shuket (45), 2/7/11, Pakistani, on way to hospital from Colnbrook

Brian Dalrymple (35), 31/7/11. Colnbrook

Ianos Dragutan, (31), 2/8/11*, Moldovan, Campsfield

Khalid Shahzad, (52), 30/3/12, Pakistani, on train from Colnbrook

Alois Dvorzac, (84), 10/4/12. Canadian, in hospital from Harmondsworth

Prince Kwabena Fosu, (31), 30/10/12, Ghanaian, Harmondsworth

Tahir Mehmood, (43), 26/7/13, Pakistani, Pennine STHF

Remembering also

Joy Gardner (40), 28/7/93, Jamaican, killed by police while being deported

Jimmy Mubenga (46), 12/10/11, Angolan, killed by G4S guards on BA flight

(via Close Campsfield and Alex Marsh)

Everything you never knew you wanted to know about Islamic Central Banking


This is cool! [1] Hassan Rouhani talking about monetary policy? Could I be any more excited? No.

Despite inventing zero, arabs have no use for it, [2] at least not when it comes to central banking. Lending money at interest is haram in Islamic finance so the use of interest rates to control demand as is normal in the west doesn’t apply. So does this also means that unlike in the UK and the US there is no danger of interest rates going to zero and the economy entering the liquidity trap?

Most reporting on Iran focuses at its very high inflation but nobody is paying much attention to the tools used by the central bank. This is understandable, inflation has skyrocketed and the central bank has no independence and is controlled by the Iranian state. My rhetorical question is largely irrelevant at the moment, but if we look at the tools Iran’s central banks uses the question is likely “yes”. I think we should look a little at the tools of Islamic central banking anyway as they give us a window into a world of central banking with interest rates or a zero rate problem.

To begin, a little history. The first Islamic savings bank was established in Mit Ghamr in 1963 by Ahmad El Najjar, an economist. In the 1960s Nasser was trying to modernise egypt and so the bank kept secret its overtly Islamic nature. Riba – charging interest – is haram so the saving bank operated on a profit share basis. Today, the much larger Islamic finance industry – in 2011 $1.357 trillion of shariah-compliant assets existed globally – has a variety of alternatives to charging interest.

Islamic finance seeks to avoid unearned income, which is seen as exploitative. Instead of lending money and charging interest, which is seen as just transferring risk, risk is shared through a variety of mechanisms; as profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijar). This can be illustrated with an example: Unlike in western finance a mortgage transaction does not involve interest payments. Instead the bank would arrange to buy the house from the seller and sell it on to the buyer at a profit with payments arranged as installments.This arrangement is called Murabahah and is the most relevant for our discussion of central banking.

Sukuk is also an important concept too. This is similar to a bond in which interest is regularly paid on a principal. However, because riba is haram in Islam it cannot be structured like this. Instead sukuk imply a transfer of ownership and can look like a form of repurchase agreement. You agree to repurchase something at a certain price over a certain period of time. This echoes previous posts of mine of what saving really is. Interest rates are just symbolic, what is really happening is people buying durable things today with an expectation they will be able to sell them on for more in the future. Interest rates are our way of expressing that, Murabahah or Sukuk are another. The latter seems clearer and more honest on the mechanism actually.

(At this point, I do want to point out to all the snooty economists, engineers, mathematicians who mock post-modernism…who’s laughing now?)

So what does all this mean for Islamic central banking? The most prominent method of controlling monetary policy is the control of the profit rates allowed by banks when they lend, the Mudharabah discussed above. Anything from an 18% to 20% on non profit-and-loss sharing arrangements, and slightly lower on profit-and-loss sharing arrangements. In a country shrinking around 5% a year finding a 20% return implies a high rate of nominal GDP growth which is split between negative growth and even higher inflation.

We can see that the implied maximum profit rates require very high growth in nominal incomes and we also see very fast growth in the monetary base. Entering into a profit-and-loss agreement will guarantee you a high nominal return in a low growth environment and monetary growth is high to accommodate these contracts. There is no reason however that the profit share cannot be set to a lower number. This would amount, via the Kalecki equation, [3] to a monetary tightening and NGDP and inflation would both have to decrease to accommodate this lower allowable rate of profit. Weirdly a shrinking of the nominal profit rate could increase it in real terms. Money is weird.

This piece from Cato, caveat lector, says that Iran stopped publishing information on its money supply in March 2011, at the time they showed continued very rapid growth in the money supply. If Rouhani has changed this that’s great. The country’s monetary policy at the moment is chaotic but once the chaos fades it will be useful to bear in mind how Islamic monetary policy works. The details in this post are broad sketches only. I took lots from these documents [12345] and I’m not sure of their quality. This is an area where I don’t even know anyone who might know an expert, so any input in the comments or on twitter is welcome. Likewise please share this as this might get picked up by someone better informed than me.


[1] Yes. Cool. You’re here aren’t you?

[2] Yes. Persian or Iranian is more appropriate but I’ve been looking for a chance to use that line since I drafted this post months ago. UPDATE: As Lorenzo tells me, actually the Indians invented zero as a concept, the Arabs were miles behind. More here.

[3] I’m making the Kalecki equation  [1, 2, 3] do some heavy lifting here, but I think that’s right…

I’m a bit late to this party: my experience of post-crash economics

I was going through a backlog of old Crooked Timber posts and saw this by Ingrid on Post-Crash Economics. Their tagline summarizes their mission thus:

 The world has changed, the syllabus hasn’t – is it time to do something about it?

My Masters at LSE finished over a year ago today, but I’ll never forget the final lecture I had covering financial crises. We had a little on Bagehot, but focused mostly on the Asian Financial Crisis. The savings glut which followed the late-90s crisis was pretty instrumental in pushing up American house prices.

We discussed the dot-com boom and crash and then we reached the mid-2000s and I thought “we’re getting awfully close to 11 o’clock” and then the lecture ended. My flaber was well and truly ghasted. This was 2011! They’d had three years to add it in but hadn’t bothered. The lecturer wandered out and there we sat there. All doing Masters because we couldn’t get jobs and hoping to find out why. We were a little disappointed.

At the time I was pretty annoyed, but I was reading a lot of blogs on the crisis, whether Brad DeLong, Scott Sumner, Nick Rowe, Paul Krugman who were linking to Woodford and Gordon. I had a pretty good idea what had happened but I was angry. A ten grand course, I presumed, would educate me more than hobbyist bloggers. Hah! I know better now.

I don’t think I was being indoctrinated though. I certainly don’t think that there was any ideological barriers to preventing the lecture series being rewritten. But an economic history course will have only so many people involved and only so much effort is available.

When your priorities are agricultural productivity in 18th century India or the role of coal prices in the industrialisation of Lancashire rewriting a syllabus might slip down the priorities list. The inclusion of more heterodox economics would be useful, but it also takes a lot of extra work and I understand why I didn’t get a Minskian, Hayekian, Sumnerian and Old, New and Post Keynesian explanations of the crisis. Who has time for that apart from lonely bloggers alone in their rooms tap, tap, tapping away on their keyboards?

“Excuses, excuses!” you cry. But less cynical people call them “reasons” and I have more sympathy now than I had then.  Post-Crash Economics is a great initiative and I wish I’d started something similar when I was a student. Of course, if you don’t ask you don’t get and if you need something from an organisation you better get organised. Best of luck to them.

One way I think about development, for @bickerrecord

I’ve always cared a lot about “development”. Even before I knew the word I was always concerned about really poor people over there, even when I was really young and thought the world was divided into Britain, Europe, Centre Parcs, America and Ethiopia.

I linked to this Scott Sumner piece on China which picked up something I find really intuitive but which maybe other people don’t get. You can be a really, really poorly run country and still see tremendous economic growth. The majority of modern world history is the history of this fact actually. [1]

Factories are really, really productive. I think a lot of people now don’t interact with them, but modern factories are really something. Manufacturing itself is rather unique in that even poorly run countries will see their manufacturing sector’s productivity catch up with the developed world. This unconditional convergence has been one of the major drivers of economic growth and convergence for countries like Germany, China, Korea etc.

This doesn’t happen in most sectors though. There really is something unique about the industrial working class and a manufacturing base. However, most of your economy is not manufacturing. Most of any economy will be services and a bit of construction and a little agriculture. This is the problem.

So there is an ideal type out there at any moment: a technological frontier of efficient production and rational organisation. This will oscillate wildly but predictably outwards as we work out new ways to do good things. This is, hypothetically speaking, the toolkit the world has to become wealthier and drag itself out of poverty.

Even with minimally functional institutions and rampant corruption, so long as things are kept broadly predictable manufacturers can upgrade their equipment, staff will refine processes and they can easily ship and trade their product. Manufacturing catches up to the technological productivity frontier, possibly because it happens in one place and you can trade globally.

This doesn’t happen in other sectors and I’m not, and I don’t think most people are, entirely sure why. The main concern of development is to get manufacturing clusters as well established in the developing world as possible and to try to work out how to get the other sectors to pull their weight. [2]

Beyond a certain level of stability, manufacturing is uniquely able to chase down this moving target. But this isn’t generally true and this is where I see institutions coming in. Institutions set how closely your non-manufacturing sectors can approach this technological frontier. They also set how large your manufacturing base will become relative to other sectors. 

Many developing countries have subsidised their manufacturing bases. In days gone by this was because manufacturing was ideologically fashionable and its capitalists relatively strong. Coincidentally they hit upon unconditional convergence and this rent seeking and ideological patchwork worked out.

These days manufacturing’s days of dominance are over. Manufacturing employment is shrinking everywhere because it is just so damn productive. The technological frontier will carry on working its way out as we work out more and more productive ways to put resources to work but the days of catch up might be largely over. It is just a lot harder to get non-manufacturing to catch up with global best practice.

[1] This is why I’m not so concerned as Tim about the developed world’s regulations stifling growth. I agree they may make it a bit of a bugger but largely the rules of the game are predictable and the returns are possible. Growth won’t stop but it might proceed from a slightly lower base and this may be worth it or it may be not.
[2]Incidentally, this is why I’m a particularly poor leftist when it comes to the West’s declining manufacturing base and attendant job losses. I wave happily goodbye as they sail across the ocean because I’m buggered if I can think of a better way to export prosperity abroad. Taking good institutions to the developing world is really hard, and the developing world’s population are against moving the poor here where we already have good institutions.

Why people should just admit they want some foreigners to die

Ben Cobley makes a good point that far too much of the immigration debate focuses on facts when what really matters is how people feel. Earlier this week we had a report published that showed that European migrants paid more in tax than they claimed in benefits. As I said, perhaps uncharitably, on twitter:

Excuse my French, but as Ben says this is about feelings not facts. Precisely no people will change their mind due to this report and precisely no useful arguments were had on twitter as a result. The whole debate could be better framed. It would save Jonathan Portes his health at least if he could just admit that people don’t care about the facts. After all, there’s grist to everyone’s mill here.

Ben points out that between “1995 and 2011, immigrants from non-EEA countries claimed more in benefits than they paid in taxes.” Now this doesn’t surprise me after all a large number of these people will be asylum seekers who were banned from working or are children. We’re straying towards facts here. Which I concede isn’t that useful. But I’ll just conclude that children and those banned from working are likely to be a drain on  the public purse, but not terminally so.

Anyway, Ben is sympathetic to migration but still thinks that with Britain’s population possibly rising by 9.6 million to 73.3 million by 2037 we should be enforcing strict limits on further migrants to give time for existing migrants to integrate. I’m not going to discuss the merits of this plan, I want to talk about how I feel and how I think other people feel.

The status quo is that a small number of migrants are allowed to enter the UK but that most people in the world are kept poor or persecuted. “Most of us do not merely let people starve, but also participate in starving them” as Thomas Pogge says. Undoubtedly, more immigration would help solve this problem. And that’s where my emotional response begins. But most people are unmoved by this argument, in fact they pretend it doesn’t exist.

This apparent callousness is okay. People support policies that cause pain and suffering on a huge scale. That’s normal. All I want is for people to admit it openly. Yes, I think the immigration debate in this country is boring but not because my side call too many people racists (although that’s unhelpful). It is because restrictionists refuse to make the honest argument “this many million people must suffer on my behalf.” 

So I guess that’s how I feel. People support policies that will kill people. Lots of people. I don’t think they’re bad people for wanting that. They’re normal people. I don’t want to go through life thinking 99% of people are evil: why would I bother with politics if humanity was so unredeemably awful? But I’d like to see some admission that there’s a trade off. Some people must die or live in drudgery and cholera so that I can feel a certain way. 

You shouldn’t set policy so that people are expected to behave like superheroes. We can expect someone to pull a drowning girl out of a lake, but not to give up their day job to become a free range lifeguard. The same is true of immigration. Leaving people alone is a heroic act and people feel justifiably odd admitting that. That’s the real reason our debate around immigration involves people shooting facts back at one another. It’s a smoke screen because some things are too horrible to say.

An ethical investment with a 28% annual rate of return that reduces domestic violence

So, charity update. As you’ll know I signed up with GiveDirectly to transfer my beer money to slightly more useful purposes. They’re the charity that Less sclerosis for me, more money for poor people. It’s so pareto optimal.

They’ve done a trial, and it was good news! Of course, they publish plans for all their trials in advance so that even if it wasn’t good news we would still know about it. Take note everyone who’s written a blog post and quietly binned it when the ONS didn’t back you up.

Most of you know I’m a simple kinda guy, so giving poor people money seems like a good idea to me. I see a problem: people lack money. I pretty quickly hone in on a solution. Of course, there are lots of solutions, that are neat, plausible and wrong so I’m happy to see my priors confirmed empirically. 

The full report into their trial recent in Western Kenya took place over 2011-2012 and had some remarkably positive effects. 

  • Business and agricultural income increased 28% of the average grant size, implying a 28% annual rate of return. 
  • Expenditures increased in nearly every category so poor people had more stuff.
  • But not nicotine, alcohol, or gambling. My beer money did not become theirs.
  • Food security improved substantially and children were 42% less likely to go entire days without eating.
  • Mental health improved substantially and it is likely recipients were less stressed. [1] 
  • Transfers did not affect the incidence of crime and conflict or lead to changes in local prices.
  • They found suggestive evidence that cash transfers reduce domestic violence and increase female empowerment.

So that is more investment, more consumption, better mental health, less domestic violence and no increase in other crimes. Seriously, once one starts to think about what giving poor people money can do, it is hard to think about anything else. So, what can I put your down for?


[1] I’m currently giving £10 a month to Mind, the mental health charity, but I’ll have to work out whether I might be able to help with mental health problems more by just consolidating all my charity into giving money to poor people. The advantage of having an analytical, utilitarian streak is that you can be awesome at charitably giving, but only if you want to.

Canary Wharf and Cantillon

Only a few blogs have comment sections worth bothering with. On Frances’s Alex makes an important point about stupid Austrian stories about recessions. It’s difficult to excerpt, but it’s a lovely meandering argument and it reminded me of something I wanted to write up about Canary Wharf.

Containerisation killed London’s docks. Canary Wharf, a financial centre back office, was what we decided to replace it with. All very allegorical. In the early 1980s plans were laid to redevelop the area, improve transport links with a DLR upgrade and the Jubilee Line and generally spruce the place up according to the fashions of the day.

For over half a decade the east end hosted the largest development in the world. By the time the development opened in 1992 we were plodding along through recession as interest rates were hiked to protect the pound. Canary Wharf’s developers’ Olympia and York promptly folded as their enormous investment proved totally unprofitable.

Today Canary Wharf is a financial centre to rival the square mile. You might not like it, but it was a damn good investment. But tight money pushed a wise investor into bankruptcy. What you make of this depends on which end of the telescope you look through.

If you’re of an Austrian persuasion you see easy money in the 1980s and government boondoggles like the Jubilee Line tricking multi billion dollar investment funds into building a new financial centre. And you’d be an idiot.

If you’re a normal person you see a sensible investment which would increase London’s real estate, regenerate an deprived area and upgrade public transport temporarily ruined by a recession. It’s during those times that bad investment decisions are made. Austrians have it all backwards.

I can only commend Alex’s conclusion that the Austrian glee at recessions and the failures they bring spring from deflation being a fundamentally conservative force in society. It echoes Karl Smith‘s point that inflation is ultimately about optimism.

Recessions are aberrations. They are the times when we decide that we want people to be unproductive, that we want to be poorer. It’s not the failure that’s confusing, it’s the coordinated failure. In the early 1990s lots of investments that were good turned bad at the same time. That’s the problem. But I suppose a little indiscriminate failure is useful pour encourager les autres.


Don’t let me get too deep into defending banks, I’m not Angela Knight, but when did this meme of equating “contributing to the economy” with paying tax start?

Quite sensibly the New Statesman points out that Financial Services aren’t all that, because, you know, they kinda helped crash the UK’s economy. That’s a good point, fat tails cause big problems, preaching to the choir man. But then there’s this:

Yet whilst the financial sector likes to think of itself as the powerhouse of the UK economy, in terms of the tax it pays, it’s more of a Wendy house. HMRC figures show a drastic reduction in Corporation Tax contributions since the financial crash – on average just £3.3billion a year, even when the paltry Bank Levy is included. To put this in context, the finance sector shelled out £14 billion in bonuses to top staff last year alone.

I’m under the impression that taxes are something you pay out of the contribution you make. The contribution you make being, if you’re a company, the profits you make and the wages you pay. That’s your value add. For finance the waters are muddied, because of TBTF etc., but the vast majority of the people involved in finance are doing work as boring and worthy as the rest. Employing over one million people counts as a contribution to me, so why is the New Statesman being so odd?

When did this meme start? I swear I’ve seen it developing for a little while and I’m just curious about whether this is going to be a “thing” now that’s going to annoy me.

The Immigration Bill: privatising the police state

As John says, there was never any chance of the Tories being the doyens of civil liberties. Carrying an ID card or being locked up for 42 days is bad enough, but at least Labour weren’t asking Serco or your landlord to do it.

Today’s immigration bill (the eight in 18 years incidentally, it takes a lot of legislative effort to be a soft touch), will make it harder for immigrants to set up home in the UK. Of course, since you can’t actually recognise an immigrant instantly it will make it harder for everyone to set up home in the UK (if you can afford a home, that is).

The Bill empowers jobsworths to check driving licence applicants for immigration status. That means more wasted times for all motorists. The Tories also want to clamp down on “sham” marriages or civil partnership (gays too!). That’s means more forms to fill out for everyone getting married. They’ll also require banks to check against a database of known immigration offenders before opening bank accounts. Want to know the false positive rate? Well think about how often your bank fucks up….Yep.

The Bill will push us ever so slightly further towards a police state. Combined with the new police powers to detain strange looking men potential sex offenders we are heading towards a system where private citizens and companies will be asking you for your papers and the police can control your life for a lot longer than 42 days.

The onslaught against immigration is not only a backdoor to a more generalised oppression. It also forms a vital pillar of the Tories economic policy to fuck up all the countries industries which are not housing and high finance, The suppression of migrants has had an awful impact on universities. Foreign students generate export income, help subsidise UK ones and support our university’s status as international centres of research excellence. Way to go guys!

You all know I care about immigrants, I haven’t even come to how these measures will impact them yet. Surprise! It’s going to affect them badly. I’ll come to them later. At the moment just enjoy the prospect of being asked for your papers so more people can die at our borders.

Update: This is good. The hate is pure:

And this immigration bill really is contemptible. Politics is often a question of signalling and what this bill signals, alas, is that the government prefers the presumption of guilt to the presumption of innocence. It is a bill that turns ordinary Britons into snitches for central government. A bill that will make life more inconvenient for millions of residents while, almost certainly, achieving few, if any of its aims. A bill, most of all, that sends a message that the United Kingdom is a bitter, paranoid, timorous, small-minded kind of country. The kind of country ruled by the kinds of people who spend their days leaving comments on newspaper websites.

The Mail Monsters

I’m familiar with the “but we need bastards” argument. But sometimes its not dead white guys who get picked on. And sometimes the results are worse than hurt fee fees.

Lucy Meadows was monstered.

A coroner told the press “shame on all of you” as he ruled that a primary school teacher had killed herself after her gender reassignment became national news.

Michael Singleton, coroner for Blackburn, Hyndburn and Rossendale, singled out the Daily Mail as he accused the paper of “ridicule and humiliation” and a “character assassination” of Lucy Meadows, 32, who took her own life in March.

Stephen Gately was monstered.

The Press Complaints Commission has received a record 22,000 complaints about Jan Moir‘s article about Stephen Gately since Friday – more complaints in a single weekend than the regulator has received in total in the past five years.

Moir’s article, which was published the day before Gately’s funeral in Dublin, provoked widespread outrage on the web. The original headline on the Mail Online website, “Why there was nothing ‘natural’ about Stephen Gately’s death”, was later amended to the print edition headline “A strange, lonely and troubling death”. The article has also prompted a complaint to the Metropolitan police.

The poor have been monstered.

The Daily Mail has sparked outrage today with its front page, which appears to blame the killing of six children on the welfare state.

The right-of-centre newspaper, which has frequently campaigned against what it sees as the generosity of the UK’s welfare system, today (April 3) splashed with the conviction of Mick Philpott – who killed six of his own children in a house fire – using the headline ‘Vile product of Welfare UK’.

Brooke Magnanti had to out herself, to gazump the Daily Mail.

She had kept her identity secret for six years, defying millions of readers – and a host of literary experts – who had speculated about the author responsible for one of the internet’s most widely read blogs.

But today the mystery was solved when a scientist from Bristol outed herself as Belle de Jour, the former escort behind the anonymous Diary of a London Call Girl.

Foreigners are lied about.

For, according to a flurry of alarming reports, Eastern Europeans are stalking the creatures of the River Nene and, to the horror of local residents, are reputedly now targeting the city’s swans.

Rather than simply enjoying the spectacle of these majestic birds, it was claimed that immigrants see the swans as a rich source of food, and are trapping the birds, then roasting them on open fires along the river bank.

This isn’t a post criticising the Daily Mail. I don’t really do them anymore. This is a post criticising you. Everyone, in fact, including me.

The disabled get attacked:

As readers of this blog are well aware, there is a serious lack of accessible parking spaces available throughout the majority of the UK. Quite why the Daily Mail feel the need to promote an agenda to remove these spaces and replace them with parent and child parking is beyond me.

Every time you write or say that The Daily Mail “crossed a line” you’re wrong. This is the Mail’s modus operandi. If this time is different it’s because someone white and male was attacked who had a white, male and above all powerful son to do something about it.

Helping the weak and vulnerable is what matters. That’s why I’m left wing.  Defending dead Jewish intellectuals is sure fun, but you should all spend more time helping trans* people, gays, sex workers, women, the disabled, immigrants, and the poor.

Mental Health is even more ridiculously important than you thought, explained in one sentence.

Even unemployment, poverty or the death of your spouse have smaller effects on life-satisfaction than mental health, despite this, even in rich countries under a third of people with diagnosable mental illness are in treatment. That comes from this paper, linked to by Chris on twitter.

This paper is a contribution to the second World Happiness Report. It makes five main points:

1. Mental health is the biggest single predictor of life-satisfaction. This is so in the UK, Germany and Australia even if mental health is included with a six-year lag. It explains more of the variance of life-satisfaction in the population of a country than physical health does, and much more than unemployment and income do. Income explains 1% of the variance of life-satisfaction or less.

2. Much the most common forms of mental illness are depression and anxiety disorders. Rigorously defined, these affect about 10% of all the world’s population – and prevalence is similar in rich and poor countries.

3. Depression and anxiety are more common during working age than in later life. They account for a high proportion of disability and impose major economic costs and financial losses to governments worldwide.

4. Yet even in rich countries, under a third of people with diagnosable mental illness are in treatment.

5. Cost-effective treatments exist, with recovery rates of 50% or more. In rich countries treatment is likely to have no net cost to the Exchequer due to savings on welfare benefits and lost taxes. But even in poor countries a reasonable level of coverage could be obtained at a cost of under $2 per head of population per year.

I’ve had to revise my priors because of this. I already thought mental health was big deal, having suffered with anxiety when I was younger, and various family members and friends and partners suffering, but I had no idea of the scale of it. Which sounds sadly naive written down like that.

There should be a lot more investment in mental health as it would be self financing. Instead people are finding it ever harder to pass the assessment process for the usual ATOS, DWP and Treasury related reasons. I’m going to have to look into this in more detail before I can write anything that’s interesting, useful and not derivative. (Yes, I do actually at least try to do all those things here).

So in addition to supporting Give Directly with a £30 monthly donation, I’ll be donating £10 to Mind, who are generally well regarded. You should support both these charities too.

I’m going to #GiveDirectly to poor people, you should too

Give Directly

Every month I’ll be donating $50 to some of the poorest people in the world. I won’t be visiting them in sandals to build them a school or supporting some egocentric project I think they need. I’ll just be sending money directly to poor people. This sounds great to me.

GiveDirectly find poor households in Kenya and give them money to spend on whatever they think appropriate. A great audit of their work hase been done by Just Giving, who have rated Give Directly their number two charity worldwide. Some bitesize information for you:

  • The average recipient lives on only $0.65 a day and 18% of eligible households report having enough food for tomorrow.
  • 90% of donations donations go into the pockets of the recipients. I say pockets, I mean mobile banking account.
  • 10% of donations is spent on a phenomenally efficient search and payments infrastructure.
  • They use census data to select regions of Kenya with high poverty rates and villages within those regions with low-quality housing and access to an M-Pesa agent. M-Pesa is a mobile payments network operating in Kenya.
  • To identify poor people they find people who live in mud huts. Crude, but both cheap and effective.
  • They take the poor households’ phone numbers of give mobile phones to those who don’t have one.
  • They audit every single recipient to protect against fraud and mistakes.

There are complaints to be made against this form of charitable giving.

By only operating where M-Pesa operate it ignores the very, very poorest. This is fair comment, but I don’t see a way round it. And by operating in this way GiveDirectly are encouraging M-Pesa to expand their network so that eventually these people will be reached.

More fundamentally, Give Directly do nothing to deal with the systematic way poverty is recreated in the developing world. They don’t deal with unfair terms of trade, weak property institutions or immigration controls. That is true, but nobody really knows how to fix those problems. the people who might are currently too poor to do anything about it. A less poor populace is a more politically and economically active populace. Which will go some way towards fixing those problems.

Of course, if you think the main problem poor people have is they are workshy, or fecund, or criminal then this charity isn’t for you. You’re also an arsehole, why are you on my blog? I happen to think the main problem poor people face is a chronic lack of options. Money gives these people options. In surveys undertaken the vast majority spent some money on housing (iron sheeting), nearly half spent money on food, and not insignificant amounts were invested in farm and non-farm businesses.

Finally, the most common criticism is that poor people are irrational. I think the list of spending options above refute that pretty effectively. In fact savings rates for this free money is far higher than saving rates in the developed world. I happen to not mind if a non-zero part of the money donated goes on a big meal, or a party, or on some whisky. This is what I spend my money on. Poor people deserve to have fun too, even if it isn’t a “rational” use of money, they should be the judges.

This charity appeals to my priors. I think people without money need money. I also don’t like bureaucracies. I also don’t like the charitable trend to helping people who are doing alright. These people really are the poorest and they’re helped efficiently. Its scalable too, there are hundred of millions of people they could help in this way, so every pound, dollar or yen you donate will help.

So why don’t you give directly? Link here. There’s an FAQ here and a Just Giving write up and audit.