Recent decisions may have increased the chance of a ‘no deal’ outcome in the Article 50 negotiations. It’s time to restore trust and moderation.

May 10, 2017

Formal negotiations on the UK’s exit from the EU are fast approaching. While it is theoretically possible that the UK Parliament could vote to reverse Brexit (by revoking Article 50) at any time before 1st April 2019, this appears highly unlikely. Almost certainly, it would not happen without a second referendum, which both the Conservative and Labour parties have ruled out. (The Liberal Democrats, on the other hand, promise a second referendum on the terms of Brexit when they become clear; but every poll since the General Election was called on 18th April has the Liberal Democrats on between 7% and 13%, so their chance of winning a Parliamentary majority is very remote.)

There is one possible outcome to the Article 50 negotiations which both parties should be trying hard to avoid – namely, a ‘no-deal’ scenario, where one or more issues derail the talks, and the UK ‘crashes out’ of the EU without an agreement at the end of March 2019 – which would presumably happen amid mutual recriminations and acrimony.

A ‘no-deal’ outcome could leave 4.5 million EU and UK citizens at risk of losing basic rights – the right of residence, the right to work, and the right to access social security and healthcare. (Except of course in the event of ’emergency’ unilateral guarantees from both sides, which one hopes but cannot assume would be forthcoming, and which anyhow would lack a mechanism for dispute resolution.) It would probably lead to the UK refusing to pay a ‘divorce’ bill of any significant size. It would risk the creation of a ‘hard’ customs border between Northern Ireland and the Republic of Ireland, thereby endangering the gains of the peace process. It would almost certainly preclude a mutually beneficial trade agreement from being signed in the near future. It might even endanger security and foreign-policy cooperation between the UK and the EU27, at least in the short term.

Both sides can and should aim for a better outcome. An agreement that will safeguard the rights of the EU27 citizens in the UK and of the UK citizens in the EU27. An agreement that will lead to the UK’s payment of an exit bill that could be considered ‘fair’ by an impartial observer, and is at least palatable to many reasonable people on both sides of the Channel. An agreement that will allow the maintenance of a close trading relationship in the future. An agreement that will safeguard cooperation on domestic security and foreign-policy issues, between the UK and the rest of Europe, for the foreseeable future.

I believe, however, that some recent decisions may have (perhaps inadvertently) increased the chance of a ‘no-deal’ outcome to the Article 50 negotiations. I should add that I still believe the chance of reaching some kind of an agreement to be significantly more than 50%. Being a mathematician by profession, I might hesitate to introduce probabilities into the discussion, had this not already been done by Lord Kerr and others. (Last week, Lord Kerr, one of the authors of Article 50, estimated the chance of a ‘no-deal’ outcome at 45%.)

The first decision I refer to is the decision to leak to the Frankfurter Allgemeine Zeitung a blow-by-blow account of the private dinner on 26th April at 10 Downing Street, those present being Theresa May, Jean-Claude Juncker and some of their colleagues. Juncker’s (alleged) words ‘Brexit cannot be a success’ have been widely reported on, but the account also appears to cast scorn on May and Davis’ lack of preparedness, and even suggests a rift between them:

‘Over the course of the evening, Davis praised himself three times for an heroic deed: namely having successfully brought British Data Retention before the European Court of Justice. At the time, he was still a Conservative backbencher; Theresa May, as Home Secretary, was responsible for drafting the law. Maybe Davis thought the multiple references would be a good icebreaker.

But his boss seemed not exactly amused by what, for her, was not a praiseworthy episode. The visitors asked themselves whether Davis would still be in charge of the negotiations after the parliamentary election.’

Several different motives for the leak have been suggested. One possible motive seems to be claimed at the end of the article:

‘In his [Juncker’s] entourage, the probability that the negotiations will fail is now estimated at “over fifty per cent”. One hopes that the British will come to their senses and face the uncomfortable reality while there is still time. And that at least business will put more pressure on the Government, since a chaotic Brexit could drag the country into an existential crisis. To communicate these concerns so bluntly is part of the strategy. Sometimes the alarm clock has to ring very loud to wake up even the most sleepy.’

Another possible motive, which I find somewhat plausible, is suggested here, but I do not wish at this stage to get into a detailed discussion about possible motives. At best, the person responsible showed a reckless disregard of the danger of damaging trust ahead of the negotiations. Indeed, the leak immediately undermined the trust of many in the UK government in some of their counterparts at the European Commission, and led to a hardening of rhetoric and positions, both by Theresa May and by some senior EU figures. It is a basic rule of international negotiations that trust is a crucial ingredient, and it is clear that the further apart the two sides are at the beginning, the lower is the chance of an agreement. I believe it is fairly clear that an undermining of trust and hardening of rhetoric and positions, such as took place after the leak, will make it harder (at least at the outset) for the negotiators to converge on an agreement.

The second decision I refer to is the suspension of the informal talks on the UK’s exit. Two weeks ago, the UK government requested a delay in the mid-term review of the EU budget, citing ‘purdah’ rules in the run-up to the UK’s general election. Even within the EU27, views seem to differ on the reasonableness of this request: President Juncker said on Saturday 29th April ‘The UK is currently blocking the decision and … it would facilitate the beginning of negotiations if the UK were to be able to withdraw the reservation that it has entered in respect to the mid-term review.’ On the other hand, according to a Bloomberg News article (4th May), ‘Three European government officials in Brussels told Bloomberg News that the short pause in budget talks for the U.K. elections wasn’t a problem for the bloc.’ Be that as it may, in response to the UK’s request, Martin Selmayr announced the following on Twitter (29th April): ‘Now, we’ll have to apply FULL PURDAH RECIPROCITY. Talks with UK, formal or informal, will start only after 8 June.’

I believe that the decision to suspend informal talks was a bad one. According to most experts in the study of negotiation (such as Deepak Malhotra), the absence or reduction of informal talks makes a final agreement much harder to reach – partly because it reduces the time available for reaching an agreement – and in this case, the deadline (mid-2019) is already very tight.

Predictably, the leak elicited a strong reaction from 10 Downing Street. Theresa May claimed on 3rd May that ‘the events of the last few days have shown that whatever our wishes, and however reasonable the positions of the Europe’s other leaders, there are some in Brussels who do not want these talks to succeed, who do not want Britain to prosper.’ The Guardian even reported the following on 7th May: ‘Key Downing Street advisers are said to be convinced that opponents in the European Commission are actively plotting to engineer a car-crash Brexit.’

I have not myself seen enough evidence to justify the conclusion that there is (among some in the Commission) a deliberate intention to engineer a ‘no-deal’ outcome. Such an intent would surely be Machiavellian in the extreme, given the European Council’s core negotiating principle no. 2 (‘nothing is agreed until everything is agreed’), which effectively links the residency rights of 4.5 million EU citizens to the final outcome of the Article 50 negotiations. However, it is undeniable that some in the UK now suspect such an intent, at least on the part of some who may have influence on the negotiations. These suspicions may have been fuelled by a number of ardently pro-federalist commentators advocating an extremely punitive course of action towards the UK, even at the cost of economic harm to the EU27, on the grounds that anti-EU movements in other member-states must be deterred at all costs. (See e.g. this article.) One may hope that the resounding election victory of Emmanuel Macron (who chose for his victory march the EU’s official anthem, ‘Ode to Joy’), together with the March 2017 Parliamentary elections in the Netherlands (in which anti-EU parties gained a total of only 15% of the popular vote), might reassure such commentators that the EU can afford to deal fairly with the UK.

It is now time for both parties to endeavour to restore trust and moderation to the debate, so as to maximize the chance of an agreement at the end of the Article 50 negotiations. (Donald Tusk’s calls for calm last week, and President Juncker’s statement yesterday that the leak was ‘a serious mistake’, and that it was not his doing, were most welcome.) Looking ahead, another piece of Malhotra’s advice is relevant: both the UK and the EU27 should think about the constraints facing the other party, and endeavour not to box themselves in with ‘red lines’ (a.k.a. ‘non-negotiable demands’) that the other party cannot realistically accept.

‘Nothing is agreed until everything is agreed’ – a mantra jeopardizing the rights of 4.5 million European citizens

May 2, 2017

Perhaps the most urgent issues in the upcoming Brexit negotiations are the future residency rights of the approximately 3.3 million EU citizens in the UK, and of the 1.2 million UK citizens elsewhere in the EU. Both Theresa May, and many of the EU27 leaders, have advocated an early reciprocal agreement on this issue; the security of millions of ordinary citizens is at stake, and they have already suffered a year of uncertainty. The ideal solution would perhaps have been for the UK government to unilaterally guarantee the rights of EU27 citizens already in the UK, soon after the referendum, on the understanding that the EU27 would reciprocate – and then for the EU27 to reciprocate, securing a cast-iron agreement on this issue before negotiations on tougher issues got underway. Sadly, neither side has yet given such a guarantee, either due to lack of confidence that the other side would reciprocate, or (at worst) because they wish to use the issue of citizens rights’ as a bargaining chip later on to exact concessions on other issues.

The European Council’s negotiating guidelines, published on Saturday, appear to place the future of these 4.5 million citizens in greater jeopardy.

http://www.consilium.europa.eu/en/press/press-releases/2017/04/29-euco-brexit-guidelines/

Core Principle 2 of these negotiating guidelines states “In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.” As stated, this means that any initial agreement on future residency rights for citizens would be rendered invalid if other, more contentious issues (such as the ‘divorce bill’) prevent a final agreement from being reached by mid-2019, leaving 4.5 million citizens at risk of losing their residency rights.

If it truly cares about ordinary citizens, the European Council should answer the pleas of EU citizens’ campaign groups such as ‘The 3 Million’ to amend Core Principle 2, and agree to strike an early, cast-iron agreement on citizens’ residency rights, ring-fenced from the rest of the negotiations. Legal experts have assured The 3 Million that such a ring-fencing is legally possible. Short of immediate unilateral guarantees from both sides (which, sadly, do not appear to be forthcoming), an early, ring-fenced agreement on this is the only moral course of action, for both the UK government and the EU27.

The ‘all or nothing’ approach is reckless in the extreme, given the uncertainty over whether a final agreement will be reached. It is also deeply wrong. While this may not have been the intention, it perpetuates the treatment of 4.5 million human beings as pawns in the negotiations.

Reflections on ∈

June 5, 2016

The following was prompted by Tim Gowers’ thought-provoking blog post, “\in“, on the EU referendum. While I think Gowers makes some very nice theoretical points, there are several important issues that undermine the conclusion, in my opinion. (I speak as a former advocate of Remain who has somewhat reluctantly changed his mind.)

I think the biggest problems with the EU are democratic / consitutional ones, and depending on how much weight one places on issues of democracy versus other issues (e.g. economic ones), it is perfectly possible for a thoroughgoing utilitarian to favour Brexit, as Gowers’ last paragraph tacitly acknowledges.

1. The democratic problems

A major problem with the EU is its so-called ‘democratic deficit’. This has two sources: firstly, the EU Commission, which functions as the EU’s executive and proposes legislation on which the European Parliament votes, is unelected. (Instead, Commissioners are nominated by the governments of member states.) By contrast, in the UK, the legislation on which Parliament votes is proposed by the government, which is made up of elected MPs. For many years there has been widespread concern throughout the EU (not just in the UK) that the EU Commission is insufficiently accountable to the EU’s citizens; yet this state of affairs has continued ever since the EU Commission’s creation in the 1950s. How likely is it to be reformed any time soon?

The second problem is with the European Parliament: though it is elected, voters throughout the EU are very much disengaged with the process. In 2014, voter turnout for the European Parliament elections was only 43% across the whole of the EU, and only 36% in the UK, compared with 66% in the UK’s 2015 general election. A related problem is the lack of scrutiny of and engagement with the activities of the European Parliament: in a recent survey, only 11% of UK citizens were confident of being able to name at least one of their MEPs, compared to the 52% who could name their Westminster MP. Partly because of this lack of scrutiny and engagement, national governments are sometimes able to use the EU Parliament to bypass national democracy and push through unpopular, illiberal measures at the European level, as was revealed recently in the Independent:

http://www.independent.co.uk/news/uk/politics/the-eu-is-used-to-bypass-national-democracy-home-office-minister-admits-a6680341.html

While I agree with Gowers that it would be disastrous if Boris Johnson were granted unfettered power, Westminster politicians are (with all their faults) subject to a high degree of public and media scrutiny, and must win general elections, which typically have a rather high voter turnout. The same cannot be said for Jean Claude Juncker or even for many MEPs. (I would point to Michael Gove as a more principled Leave campaigner, one who moreover genuinely believes in the cause; Boris Johnson on the other hand was rumoured to have written two speeches, one in favour of ‘Remain’.)

But perhaps the most serious constitutional problem with the EU is the ‘tyranny of the majority’, and this would remain a problem even if the ‘democratic deficit’ problem was solved.

The general problem of the ‘tyranny of the majority’ is ancient and well-known: it is possible even in a smoothly-functioning democracy, for a majority to consistently oppress a minority. This is a particular risk when there is a lack of empathy and shared identity between voters in the same polity, and this is unfortunately the case in the EU, and is likely to remain so for the foreseeable future.

A particularly egregious example of ‘tyranny of the majority’ within the EU is the incredibly harsh austerity package imposed last year on Greece (in defiance of the result of the June 2015 referendum there, of course). According to many (perhaps most) academic economists, this degree of austerity is likely to cripple Greece’s economic recovery in the long-term. Paul Krugman even speculated that the deal imposed on the Greek government by the Troika (the IMF, the EU Commission and the European Central Bank) was designed to topple the Syriza government – see e.g.

http://www.huffingtonpost.com/2015/07/02/greece-austerity-economists_n_7714148.html

Austerity was imposed on Greece largely at the behest of the German government, in an effort to recoup as much of their taxpayers’ money as possible, in the short term. (Though it remains to be seen whether they will actually be able to recoup less in the long term as a result of the austerity!) The imposition of austerity was strongly supported by German voters. And bear in mind Germany has hitherto been one of the more altruistic EU member states.

How is the UK at risk from the ‘tyranny of the majority’ within the EU? Well, since the Treaty of Lisbon, decisions in the EU in over 30 important policy areas are now taken by QMV (qualified majority voting) within the European Council, and this allows groups of nations in a minority to be consistently outvoted. This is a particular problem for the UK in the long run, because the UK (a majority of both its voters and its politicians) has a fundamentally different vision for the future of the EU, than many mainland Europeans, who want a much greater degree of political integration. Some even envisage (eventually) a federation of states along the lines of the US. This raises the possibility that the UK government will be gradually pressured (by a majority of other member states) to accept more and more political integration, against the wishes of a majority of its citizens. And many UK citizens are wary of this, not just paranoid UKIP types, but e.g. Cambridge-educated lawyers of my acquaintance! If it seems implausible, bear in mind that the Treaty of Lisbon was drawn up partly in order to adopt measures in the proposed European Constitution, which had been rejected by referenda in France and Holland. (The French and Dutch constitutions did not mandate referenda on treaties, only on a constitution!) See for example

http://news.bbc.co.uk/1/hi/world/europe/6901353.stm.

To give an example of one prominent ‘federalist’, Matteo Renzi, who is regarded as a pretty mainstream politician in Italy, repeated in 2014 the call for a ‘United States of Europe’ –

http://www.euractiv.com/section/future-eu/news/italian-pm-vows-to-push-for-united-states-of-europe-during-presidency/.

I cannot imagine many UK citizens being supportive of such a vision. Some of my German and Italian colleagues declare themselves quite willing to see the end of the nation-state in Europe. This ‘hard-core federalist’ agenda may or may not have noble motivations, but there is an undeniable danger in going too far with it: a world with many nation-states may well be safer on average (averaging over both time and ‘space’, i.e. people) than a world with very few. If a government ‘goes wrong’ in one county, one can move to another; this is less easy if there are too few independent nation-states.

I admit that the creation of a federal European state along the lines of the US is very unlikely to happen in the short-term or the medium-term, if only because of the current impasse between Germany and France on how to achieve further fiscal and political integration (with Germany demanding joint fiscal rules to guarantee restraint before the issuing of joint Eurozone debt, and France demanding the latter before the former, in the name of ‘solidarity’). But further political integration in the short term is very much on the agenda, as illustrated by the following quotes from leading EU politicians:

Jean Claude Juncker (President of the EU Commission): ‘The Five Presidents’ Report includes a full agenda of work for the years to come, and I want us to move swiftly on all fronts – economic, financial, fiscal and political Union.’ (September 2015)

Jose Manuel Barroso (President of the EU Commission, 2004-14): ‘A political union needs to be our political horizon.’ (September 2013)

Guy Verhofstadt MEP (leader of the ALDE Group): ‘We must dare to take an even more radical leap: a leap towards a fully-fledged European nationality.’ (October 2012)

Angela Merkel: ‘We need more Europe, we need not only a monetary union, but we also need a so-called fiscal union, in other words more joint budget policy, And we need most of all a political union – that means we need to gradually give competencies to Europe and give Europe control.’ (June 2012)

Hitherto, the UK has often acted as a break on political integration within the EU, to the frustration of many EU politicians (and voters). This was eloquently articulated by the French politician Dominique Riquet, who argued on this basis that the UK should leave:

http://www.euractiv.com/section/uk-europe/news/irritated-french-politicians-back-brexit/.

In this respect, both the UK and the rest of the EU might be better off in the long run, after a Brexit; it would leave the other EU states free and unshackled to pursue their more federalist vision, and it would leave the UK free from the risk of being pressured into further political integration.

Needless to say, democratic issues are an extremely important utilitarian consideration: citizens who feel their views are being ignored or overridden, are typically not very happy about this!

2. The principle of subsidiarity – its limited applicability

The democratic / constitutional problems outlined above would be less serious, if the ‘principle of subsidiarity’ Gowers describes, was widely applicable. But the EU’s principle of free movement of people, goods, services and capital (between member states), means that the ‘principle of subsidiarity’ does not apply, or is not applied, in many of the most important areas of civil life, both technically and in practice. For example, employment law (there is a huge amount of important EU legislation on this), immigration and asylum, human rights, justice, crime prevention, privacy, consumer rights, and of course external trade and foreign and security policy. It should be noted that the UK has an opt-out/opt-in agreement in some of these areas (e.g. immigration, asylum, justice and crime prevention), under which it can withdraw from the decision-making process, but if it does participate, it has to abide by the outcome of a ‘qualified majority vote’. See

https://commonslibraryblog.com/2014/09/08/extending-qualified-majority-voting-in-the-european-union-does-this-mean-the-end-of-british-sovereignty/

for more details.

The ‘principle of subsidiarity’ did not protect Greece from crippling austerity (the issue was indeed a supranational one, though the main country affected was Greece, from a utilitarian perspective.) Also, some recent high-profile EU legislation highlights the very limited definition of ‘subsidiarity’ the EU works with. The cap on bankers’ bonuses, which mainly just affects the City of London, seems at first sight to be a particularly flagrant violation of subsidiarity: in simple terms, it interferes directly with the amount of money employers/shareholders are permitted to pay their employees as a reward for their performance. It was of course defended by the European Court of Justice, on the grounds that banks pose a particular risk to the financial stability of the EU, but on these kinds of legal grounds, almost anything could be said to fall outside the scope of ‘subsidiarity’, in today’s highly interconnected world. Though I don’t necessarily want to go into the rights and wrongs of the bonus cap, the Bank of England argued that the bonus cap actually drove up bankers’ basic salaries, and this may undermine the post-crisis efforts of financial institutions to tie renumeration to long-term performance.

3. The ‘prisoner’s dilemma’, the ‘iterated prisoner’s dilemma’, and international treaties

One is left with the question of how to achieve the desired degree of international cooperation, in the aftermath of a Brexit. The ‘prisoner’s dilemma’ situations Gowers describes, do indeed demonstrate the desirability of international agreements/treaties, but these can and have been made (and adhered to), without the participants belonging to EU-style organisations. Further, if they are to be of much use, they must often involve nations from outside the EU, such as the US and China, especially in the given cases of climate change, corporation tax and overfishing in the North Sea.

Of course, for these to work, there needs to be a ‘penalty for reneging’ on the treaty. Such a penalty, however, is not contingent on belonging to an EU-style organisation. It can involve agreed sanctions (financial and otherwise) from other participants in the treaty, but even this is unnecessary. Because in fact, there is an extremely potent ‘natural’ penalty for reneging: namely, the unwillingness of other nation states to trust you in the future if you renege! And indeed, experiments simulating the ‘iterated prisoner’s dilemma’ in human populations have consistently found that ‘cooperative’ strategies are adopted by a majority of participants, and that these consistently outperform ‘greedy’ ones. (Axelrod famously tested a range of strategies against one another in computer simulations, and found the same thing.) This has been used to explain the evolution of cooperative behavior in both animal and human populations, see e.g. Axelrod’s ‘The Evolution of Cooperation’. Mathematically, in the ‘infinitely repeated prisoner’s dilemma’ where future payoffs are not discounted too much, cooperative strategies are ‘stable’. Of course, the ‘iterated prisoner’s dilemma’ is much closer to the situation in international relations, than the one-round version.

International cooperation is surely not contingent on ‘pooling sovereignty’ to the extent of having shared governmental structures with the powers of the European Parliament or the European Commission, with all the attendant democratic and constitutional problems this has (and which I discussed above). It can be achieved via other supranational organizations structures such as the UN or the OAS. Do we think the nation-states of South America or North America should have a common parliament and executive with similar powers to the EU’s, in order to achieve the desired level of cooperation? Should the US and Canada have such shared structures, for example? I humbly submit that this would be deeply unpopular on both sides of the border!

4. Utilitarian problems with EU policies

It should be mentioned that some EU policies have caused a major reduction in (worldwide) ‘utility’. In the Balkan crisis, perhaps the most serious foreign policy test the EU has faced, it failed miserably to prevent war and genocide, and in fact was instrumental in arguing for a UN arms embargo which prevented Bosnians from properly defending themselves against Karadzic’s marauding Bosnian Serb forces. Ultimately, the US and NATO were required to bring about an end to the conflict. Having said that, the EU’s post-conflict intervention has been a (mixed) success. See for example

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224469/evidence-stefan-wolff-rodt-bosnia-and-herzegovina-and-macedonia.pdf.

Another example is the Common Agricultural Policy, which accounts for about 40% of the EU’s annual budget. Major effects of the CAP have been to subsidize farming in areas of the EU where it would otherwise be unprofitable, to keep food prices in the EU artificially high, to subsidize exports to outside the EU, and to impose high tariffs on imports from outside the EU. This has led to a net loss for EU citizens (for an indication of this, the OECD estimated in 2004 that state support for farming in OECD countries costs the average family of four $1000 per year), and the CAP has long been criticized for harming producers in the developing world (through tariffs and ‘export dumping’), and hence stalling development there.

EU incentives for farmers to protect the environment have been welcome. But surely it is also in the UK’s (‘selfish’) national interest to protect our environment? I fail to see George Eustice’s problem with the protection of birds and wildlife habitats! Our agriculture cannot be ‘genuinely’ competitive (without subsidies) anyway. Were we to exit the EU, a sensible UK government would continue to subsidize farmers but to a lesser extent, prioritizing environmental protection over production to a much greater extent that the EU currently does.

5. The economy, and freedom of movement

I began by saying I thought it was perfectly possible for a thoroughgoing utilitarian to come down on either side of the debate, depending mainly on how heavily they weight the democratic problems of staying, versus the costs of leaving. To my mind, two of the most important costs of a Brexit would be the economic cost (both to the UK and to the rest of the EU), and the restriction on freedom of movement (again, for both parties).

Almost certainly, in the event of a Brexit, there would be a short-term economic cost to the UK (and probably a smaller cost per capita to the rest of the EU), though I would hope and expect that a trade and immigration deal fairly advantageous to both sides, could be worked out before too long, and that a desire to ‘punish’ the UK for leaving, and to disincentivize other exits, would not trump the common interests of both sides. There would also be a cost to those who (like myself) support freedom of movement for EU and UK citizens throughout the EU and the UK; in the short term, this freedom would certainly be reduced, though I don’t completely despair of winning the democratic argument within the UK for a high degree of openness to skilled workers from the EU. On the other hand, after a Brexit, the UK government would find it far politically easier to lift our extremely harsh restrictions on skilled workers from outside the EU. While I am personally in favour of a very high degree of openness to immigration from the rest of the EU, it does raise problems for our democracy (and cause widespread disenchantment therewith) when 77% of UK citizens view immigration as ‘too high’ (according to Oxford’s Migration Observatory) and yet the UK government cannot legally do anything to limit immigration from the EU.

To conclude, I plan to vote for Brexit, mainly due to the EU’s democratic and constitutional problems, but with a heavy heart, mainly due to the likely impact on the economy and freedom of movement.

A letter to Foreign Secretary Philip Hammond on the refugee crisis

August 29, 2015

The text below is a first draft of a letter I plan to address to Philip Hammond (as foreign secretary), on the migration crisis. Comments are very welcome.

Dear Mr Hammond,

I am writing to express my deep concern at the UK’s response to the current migrant crisis in Europe, the Middle East and North Africa, and particularly regarding refugees from Syria.

The civil war in Syria has caused over 3 million Syrian civilians to flee the country, and 6.5 million more are internally displaced inside Syria. Many have attempted to reach Western Europe by crossing the Mediterranean from Libya or Egypt, or by travelling overland through Turkey and the Balkans. Either journey is fraught with peril; yesterday the UN estimated that so far this year, 2,500 migrants have drowned while attempting to cross the Mediterranean. On Thursday morning this week, the bodies of 71 refugees, including three children (together with a Syrian document), were found inside an abandoned lorry in Austria.

Most refugees from Syria cannot safely return to Syria, and not all of them can remain in countries bordering Syria. Turkey, Lebanon and Jordan already have (respectively) about 1.8 million, 1.2 million and 600,000 Syrian refugees living there, most in temporary refugee camps, and they do not have the resources to accommodate such large numbers in the long term. These are refugees from a brutal, bloody and sectarian armed conflict (sometimes refugees from the guns and knives of IS), rather than economic migrants purely seeking a higher standard of living. Western European countries such as the UK have a moral duty to offer asylum to more of these refugees.

The UK has so far agreed to resettle only about 500 Syrian refugees. By contrast, Germany has agreed to resettle 35,000, and Sweden, with its population of only 9.6 million, has already taken around 40,000. With its population of 64 million, the UK certainly has the capability to offer asylum to at least tens of thousands of Syrian refugees, without significant changes to UK life or society. Most of them would be an asset to UK national life, as forcefully argued in a recent article in The Economist:

http://www.economist.com/news/leaders/21662547-bigger-welcome-mat-would-be-europes-own-interest-let-them-and-let-them-earn

The UK’s ‘vulnerable persons relocation scheme’, while better than nothing, is clearly helping too small a number of the vulnerable. We can, and should, do more.

It is true that some in the UK are concerned about the possibility of militants posing as asylum seekers and thus being able to infiltrate the UK and launch attacks inside the UK. However, a careful evaluation of asylum claims will reduce this risk, and priority can be given to low-risk groups (who are also typically the most vulnerable: families with young children, and those from religious groups under attack from IS, for example). Moreover, the risk is small, and must be balanced against the large number of lives we could save by admitting more refugees, and the benefits this would bring, both economically, and also in terms of international diplomacy and goodwill. The UK’s own Muslim community might well be less vulnerable to radicalization, as a result of a policy that would alleviate the plight of many of their co-religionists.

It is therefore my firm opinion that the UK government should, firstly, increase the number of Syrian refugees it is willing to resettle, and secondly, devote more resources to receiving, evaluating and processing applications for asylum. As of 20th September 2011, the UK does not consider asylum applications made from outside the UK: this means that in order to have a chance of gaining asylum in the UK, Syrian refugees must attempt a hazardous and illegal voyage across the Mediterranean, or overland through the Balkans. To avoid further and unnecessary loss of life, I believe that the UK should consider asylum applications made from abroad, in particular from countries neighboring Syria.

In conjunction with other EU countries (or alone if necessary), the UK should establish secure ‘processing camps’ in countries near Syria from which refugees most commonly embark (principally Turkey, Libya, Lebanon and Egypt), to enable refugees to apply for asylum legally, without first having to risk their lives in the boats and trucks of people-smugglers. (In June, Matteo Renzi called for the EU to set up such processing camps, in Libya.) We should then provide a safe and legal passage to the UK, for those applicants who have been granted asylum but who cannot finance their own voyage.

If the UK pledges to re-settle at least tens of thousands of Syrian refugees, leading by example along with Sweden and Germany, other countries may well follow suit; even if they do not, it is the right thing to do.

Yours sincerely,

Dr David Ellis

The UK and overseas students – time for a U-turn, before we drive off a cliff

December 9, 2012

The US mathematician Joel Spencer describes overseas students coming to the US as ‘the reverse of foreign aid.’ The US gives billions of dollars in aid to the developing world; on the other hand, countries such as China and India send many of their brightest and best to US universities, both for undergraduate and doctoral studies. As well as bringing in large fees for the universities, these students bring diverse skills and perspectives which enhance the learning of others, and spur the progress of research at the postgraduate and postdoctoral level. The most talented are often recruited by US firms, whose productivity they greatly enhance, contributing to the US economy and creating more jobs for others.

Strange as it may seem to some in the UK, Australia has recently made it easier for highly qualified overseas students to seek work in Australia after their graduation, believing that this make Australian universities more attractive in the highly competitive global market for overseas students.

The contrast with UK government policy could not be more striking.

‘Our tough new rules are now making a real difference, with a record 62% drop in student visas in the first quarter of 2012, and overall falls in work visas, family numbers and people settling,’

Damien Green declared triumphantly in late May. Between March and April, the government had also comprehensively tightened visa restrictions for overseas students graduating in the UK. Most importantly, it abolished the post-study work visa, which allowed highly qualified international students to seek work in the UK for 2 years after graduating from a UK university. In August, the Home Office revoked the license of London Metropolitan University, after more than a quarter of the students it sampled were found not to have been granted leave to be in the UK. This left more than 2000 students (most of them legitimate) facing deportation.

The effect will be to significantly reduce the attractiveness of the UK to overseas students, unless something is done quickly. Why should we be worried about a drop in the number of high-calibre overseas students? First of all, up until now, overseas students have massively subsidized the education of UK students, often paying as much as £25,000 in tuition fees at Russell Group universities, and contributing an estimated £5 billion to the UK economy. Almost all of our universities rely on the income from overseas students to sustain their internationally high level of teaching and research, in the face of reduced government funding, and fewer private donations than in the US, for example. Moreover, overseas students greatly enrich the learning of students at UK universities, bringing a greater diversity of knowledge, skills and perspectives to the lecture room and laboratory. At the doctoral level and higher, the most talented are often at the forefront of breakthroughs in research, in health, sciences and other areas, providing long term technological benefits for the UK. Finally, a significant few return to their home countries to become key figures in politics and business, and their continued links with their counterparts in the UK continue to provide political and economic benefits, both for the UK and their home country.

It seems that, belatedly, the UK government has realized that it needs to convince the high-achieving overseas students that they are, after all, welcome. In the latest cabinet reshuffle, Damien Green was replaced by Mark Harper as Immigration Minister. The universities minister, David Willetts, is set to launch a global drive to ‘protect Britain’s reputation’ and spread the message that it remains open to students from overseas. He has also joined Nick Clegg in urging the government to remove overseas students from the total immigration figures they have promised to cut (‘to the tens of thousands’). However, the new Minister for Immigration, Mark Harper, advocates the continued inclusion of overseas students in the immigration total. This is a crucial issue: overseas students currently number more than 400,000, and if this is included in the government’s target of reducing net immigration to the tens of thousands, a drastic reduction in overseas student recruitment must occur. The effect on our universities would be crippling, and the longer-term effect on business and innovation in the UK would be grave. The UK university sector represents one of the last truly competitive aspects of the UK economy; it is worth more than £40 billion per year. More, it provides UK businesses with the steady stream of high-calibre graduates which is truly vital for the UK’s economic recovery and success. The government must do all it can to maintain the UK’s ability to attract the brightest foreign students, necessary as they are to the success of our universities, and to the success of the economy as a whole.

The great tax debate

November 8, 2012

When I first saw the news yesterday that Barack Obama had been elected for a second term, I reflected somewhat sadly at how much less enthusiastic I am about him than I was four years ago. (Then, I stayed up all night to watch the results come in. This time, I had a good eight hours’ sleep.) My initial enthusiasm has been dented by the huge increase in drone-strikes, the failure to close Guantanamo Bay, the Dodd-Frank act, and Obama’s part in the failure to bring the deficit under control. But on balance, I think it is a good thing that Obama has another four years to try to implement his solutions to America’s problems. With all the deadlock of his first term, coming partly from the determination of many Republicans to deny him a second term by automatically opposing his every move, I feel as though he ought to be given a proper chance. It is to be hoped that the upcoming ‘fiscal cliff’ at the end of 2012 will force both sides to make the necessary compromises to narrow the gap between revenue and spending. (Perhaps this is too much to hope for; we’ll see!)

As with all election campaigns since the days of JFK, this one was marred by all kinds of personal attacks with no foundation (see and for two particularly blatant examples). But there was also a frank discussion of some fundamental differences. One was taxation. Both the US and the UK are sharply divided on the issue of tax, and both sides claim the moral high ground. In this article, I want to think about why.

‘We have made very clear that the wealthy must be made to pay their fair share’, wrote Simon Hughes in the Independent, earlier this year. The top rate of tax is certainly a bone of contention between Conservatives and Liberal Democrats in the Coalition government. At the Conservative Party Conference, George Osborne, who recently has become something of a hate figure for the Left, said the following in a speech.

‘Just as we should never balance the budget on the backs of the poor, so it’s an economic delusion to think that we can balance the budget on the wallets of the rich.’

In France, the debate is more extreme. President Hollande is ploughing on with his plan to introduce a 75% top rate of tax, in the teeth of some bitter opposition.

Let’s look at some figures. In the UK, a citizen with an annual salary of £500,000 per year pays about £240,000 in tax and national insurance, or about 48% of their income, whereas a citizen with an annual salary of £33,000 (about the national average) pays about £8,000 in tax and national insurance, or about 24% of their income. Progressive taxation, the system by which higher incomes are taxed at higher rates, is widely accepted throughout the western world. However, it is not universal. In 2001, Russia introduced a ‘flat rate’ of tax: everyone paid 13%, regardless of income. Other countries followed suit, including Serbia, Ukraine, Slovakia, Georgia, Romania, Latvia and Lithuania. Granted, in most cases this was to tackle the problem of tax avoidance, which is a lot harder when there is a flat rate of tax. But an article in the Economist (‘The case for flat taxes’, 14th April 2012) extolled the benefits of a flat tax rate for all countries, and conservatives in the United States looked on, enviously. For just as many on the Left regard progressive taxation as the only ‘fair’ system, many conservatives regard it as unfair, and even immoral. They say that people should be treated equally under the law; and what is more unequal than a tax rate which is twice as high for the rich, as it is for the average man?

To some extent, what we are seeing here is the clash of two rival philosophies of justice: utilitarianism, and classical liberalism.

Utilitarianism can be summed up by the words of its 18th century founder, Jeremy Bentham:

‘The greatest happiness of the greatest number is the foundation of morals and of legislation.’

Put differently, the right thing to do for a government (and a society) is to try to achieve the greatest possible amount of happiness, or well-being, in the society.

Classical liberalism, on the other hand, holds that all people have fundamental rights, which should not be violated, even in order to increase the total amount of happiness in a society. The most important rights include the right to life, the right to liberty, and the right to own property. Closely linked with the right to own property is the right ‘to enjoy the fruits of one’s labours’. Classical liberalism can be traced back to antiquity, but modern liberalism owes much to the 17th century thinker John Locke, who wrote in his ‘Second Treatise on Government’:

‘All mankind… being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions.’

In modern times, classical liberalism has been championed by the political philosopher Robert Nozick, among others. To avoid confusion with the American meaning of liberal (i.e. ‘big government’) and with the US Libertarian party (i.e. ‘small government’!), I will sometimes use the term ‘liberalist’ for an adherent of classical liberalism.

Utilitarianism and classical liberalism can differ sharply on what is the right thing to do in some situations. To see why, imagine that there is terrible disaster that leaves only fifty people alive in the world, one of them a doctor. The doctor and four of the other survivors are healthy, but 45 urgently need organ transplants, without which they will die. Between them, the four healthy survivors have enough organs to save the lives of the other 45, but any organ transplant would mean the death of the donor. None of the four healthy survivors are willing to sacrifice their lives.

The doctor is faced with a dilemma. Does he put the healthy survivors to sleep, and perform the transplants, saving the lives of the other 45, but sacrificing the four healthy survivors? A strict utilitarian would say yes: it is morally justified to kill 4 people in order to save 45. A strict ‘liberalist’ would say no: it should be up to the healthy survivors whether they want to sacrifice their lives to save the others; if they do not want to, they should not be made to.

This is obviously an unlikely situation. But now let’s imagine another situation. Suppose there is an isolated village of farmers. There are two major crops: potatoes and wheat. Potatoes can be sold to a another village at a higher price, but they are also more prone to disease. One year, two-thirds of the farmers decide to grow potatoes, and one third decide to grow wheat. The wheat crop does very well, but the potato crop is hit by a disease, and most of it is lost. The farmers who grew potatoes have just enough of their crop to live on, but none extra to sell. The farmers who grew wheat, on the other hand, have a big surplus, which they sell to a neighbouring village. There is a village meeting, and one of the farmers proposes a motion. He says that the wheat-growing farmers have lots of spare money, and should give some of it to the potato-growing farmers, so that the latter can afford just a few ‘luxuries’ such as decent clothes. The wheat-growing farmers argue that it is their choice whether or not they give their money away. But some think that the wheat-growing farmers should be made to give away some of their money. It comes to a vote. What should be done?

The strict utilitarian would probably argue that money should be taken from the wheat-growing farmers and given to the potato-growing farmers. He would say that the wheat-growing farmers have lots of spare money, and even if each of them loses 10%, their material well-being will not be affected much. On the other hand, if all this money were given to the potato-growing farmers, their material comfort would be greatly improved. In other words, the total amount of happiness would be increased by taking money from one group and giving it to the other. A ‘liberalist’, on the other hand, might well oppose this: the wheat-growing farmers have the right to choose what to do with the fruits of their labours, and no-one should force them to part with their money.

A similar debate is now being played out over tax. What are the common arguments in favour of progressive taxation, and how do they fit in with the utilitarian and liberalist standpoints?

In a modern society, the state provides certain goods and services to all its citizens, paying for them by taxation. Economists call these ‘public goods’. Examples are healthcare, in the UK, and toll-free roads. A supporter of progressive taxation might be tempted to argue that the rich use these public goods and services more than the poor do (they probably do drive more often), and so should pay more in tax. But a ‘rich’ UK citizen on a £500,000 salary currently pays about 30 times more tax than an ‘average’ citizen on a £33,000 salary, and there is no way that the rich citizen uses public goods 30 times more. Indeed, the rich citizen may well use them less: they are less likely to use the NHS (more likely to have private healthcare), and less likely to send their children to state schools. Certainly, progressive taxation cannot be justified on the grounds that the rich use up a greater share of public resources. If we just view taxation as a way of paying for the public services we use, we are likely to end up charging everyone the same amount of tax (e.g. £100 per month) – the very opposite of progressive taxation.

A more commonly used argument in favour of progressive taxation is that the rich owe their wealth partly to their use of public resources. If they have made their money in business, they relied upon roads and communications provided by the government, and funded by taxation; most of their employees were probably educated at state schools. This is certainly true. But everyone owes a certain amount of their income to their use of public resources: a self-employed shopkeeper could not work without literacy and numeracy, and there is a good chance that these were taught at a state school. It cannot be argued that 48% of a rich person’s success came from taxpayer-funded resources, whereas only 24% of an ‘average’ person’s success came from taxpayer-funded resources: while it is hard to calculate exactly, the numbers are probably similar. So if we view taxation as a way of ‘giving back’ the part of our earnings that we owe to society, we are more likely to end up charging everyone a flat rate of tax (e.g. 25%).

Progressive taxation is obviously a form of redistribution of wealth: the state is taking money from the salaries of its richer citizens, and giving it to its poorer citizens. A ‘liberalist’ sees this as violating the ‘right’ of the richer citizens to maintain possession of what they have earned, or to choose how to spend ‘their’ money, and so is likely to oppose progressive taxation.

A utilitarian, on the other hand, may well approve of a certain amount of progressive taxation, as transferring money from rich to poor increases the well-being of the poor far more than it reduces the well-being of the rich. In the language of economics, the ‘marginal utility’ (or benefit) of £50 per month is much greater, if you are on a low income, than if you are on a high income. Even most rich people agree that a certain amount of progressive taxation is necessary for a good society – to ensure that the government has enough revenue to provide a high standard of shared goods and services, to ensure that there is some kind of social safety-net for the poor, and to ensure that there is a high degree of social mobility.

Some advance a further argument for progressive taxation, which does not fall within either the utilitarian or the liberalist ideology. A rich citizen may be able to earn more money than a poor citizen, though both work equally hard, partly due to circumstances beyond their control. For example, the rich citizen may have a greater natural talent in mathematics, music or sport, perhaps due to genetics or due to their early upbringing or education. For some, this would justify taking money from the salary of the rich citizen, and giving it to the poor citizen: it is correcting the ‘unfairness’ of genetics or of early upbringing. A liberalist, however, might well respond that it is no business of the state to try to correct inequalities of genetics or upbringing by redistributing people’s earnings. He might say, ‘My genetic characteristics are inherently ‘mine’; so are the characteristics my upbringing has given to me, and so is the money I am able to earn using these characteristics.’ Most utilitarians would also oppose this idea of ‘correcting inequalities’, on the basis that it prevents everyone, even the most talented, from becoming truly successful and enjoying the fruits of their success; and the hope of this success is an important ingredient in the happiness of a great many people. Also, when a state tries to do this, it leads to huge amount of interference and intrusion in people’s lives, and a great deal of unhappiness. (The Soviet Union is a case in point.)

In the UK, very few people (and no politicians) argue for a flat rate of tax. The debate usually hinges not on ‘whether’, but on ‘how much’ progressive taxation is justified. As well as the liberal argument, there are also utilitarian arguments against very high taxes on the rich. Too much redistribution may trap poorer people into what conservatives call ‘a culture of dependence’, by reducing their incentive to work hard to improve their situation. More importantly, the prospect of higher earnings is a powerful incentive for people to achieve greater success in business, creating more jobs for others: when this incentive is removed by too much redistribution, the economy does not grow, and everyone suffers.

Since freedom is an important ingredient in happiness and well-being, utilitarians must also consider the negative effects of high taxation on the well-being of the rich, which comes from removing much of their financial freedom. More pragmatically, very high tax rates may actually reduce the government’s tax revenue, as it may drive the rich to move abroad, taking jobs (and tax revenue) with them.

Another objection, both utilitarian and liberal: very high tax rates reduce charitable giving, for the simple reason that the rich have less money left over which they can give freely. Many private charities that work with the poor (and also some individuals such as Bill Gates) spend their money in a way which benefits the world a great deal more than most governments. Also, voluntary giving is a good thing in itself: it strengthens bonds between rich and poor, and is more likely to motivate the recipients to improve their situation, than state welfare. (There is often a feeling that voluntary help should be repaid in some way, by making good use of it, and this may not exist with welfare payments, which are somewhat more impersonal.)

My own outlook is, in a sense, utilitarian, but with such a strong emphasis on freedom as an ingredient of well-being, that I agree with the ‘liberalists’ on many issues. Most people’s idea of justice is based on some sort of combination of liberal and utilitarian ideas. I find myself asking: can President Hollande’s proposed 75% top tax rate be justified, by any combination of these ideas? And I find myself answering, ‘no’: it is too great an attack on freedom, on economic incentives, and charitable giving, and risks driving the rich abroad. In my opinion, a 50% top rate of tax is quite enough; if President Hollande and his ministers feel that the rich should pay more, there is nothing to stop them introducing a ‘voluntary component’ of tax, much like charitable giving, except that the money is spent by the government. Doubtless, very few would pay the top ‘voluntary’ rate, but a significant few would (both Bill Gates and Warren Buffett have expressed their willingness to pay more in tax than they currently do), and some would follow their example.

Time alone will tell the effect of the 75% rate upon France, but if it is introduced in the teeth of opposition (and there already is a great deal of opposition: France is not Sweden!), I would predict lower levels of happiness and well-being, as well as lower levels of freedom.

I was saddened when some in the UK, including some close friends and colleagues, expressed support for a 75% top tax rate in the UK, for in my opinion, all the same arguments apply in the UK, as in France. My ultimate hope would be that both the UK and France will eventually turn into societies like Sweden, where the rich are (on the whole) willing to give more than 50% of their earnings (either in tax or as charitable donations), and where there is a strong, well-funded social safety-net, and a strong sense of social responsibility at all levels of society. Then, of course, many of the negative effects of redistribution would disappear. But this society won’t be achieved by introducing a 75% top rate of tax. In my opinion, it can only be achieved by people acting voluntarily, in accordance with their beliefs. A good dose of ‘love your neighbour as yourself’ wouldn’t be amiss!

In defence of philanthropy

February 15, 2012

Three weeks ago, an article by Robert Newman appeared on the Guardian website, entitled ‘Philanthropy is the enemy of justice’. In this post, I want to explain what I think is wrong with his view. As the article is short-ish, I take the liberty of reproducing most of it below.

‘It’s strange that at this week’s World Economic Forum, the designated voice of the world’s poor has been Bill Gates, who has pledged £478m to the Global Fund to fight aids, tuberculosis and malaria, telling Davos that the world economic crisis was no excuse for cutting aid.

Gates does not speak with the voice of the world’s poor, of course, but with the voice of its rich. It’s a loud voice, but the model of development it proclaims is the wrong one because philanthropy is the enemy of justice.

Am I saying that philanthropy has never done good? No, it has achieved many wonderful things. Would I rather people didn’t have polio vaccines than get them from a plutocrat? No, give them the vaccines. But beware the havoc that power without oversight and democratic control can wreak.

[The] Bill and Melinda Gates Foundation [is] keen to get deeper into agriculture, especially in Africa. But top-down nostrums for the rural poor don’t end well. The list of autocratic hubris in pseudo-scientific farming is long and spectacularly calamitous. It runs from Tsar Alexander I’s model village colonies in 1820s Novgorod to 1920s Hollywood film producer Hickman Price, who, as Simon Schama brilliantly describes in The American Future, “bought 54 square miles of land to show the little people how it was really done, [and] used 25 combines all painted glittery silver”. His fleet of tractors were kept working day and night, and the upshot of such sod-busting was the Great Plains dustbowl. But there’s no stopping a plutocratic philanthropist in a hurry.

And then there is the vexed question of whether these billions are really the billionaires’ to give away in the first place. When Microsoft was on its board, the American Electronics Association, the AeA, challenged European Union proposals for a ban on toxic components and for the use of a minimum 5% recycled plastic in the manufacture of electronic goods.

AeA took the EU to the World Trade Organisation on a charge of erecting artificial trade barriers. (And according to the American NGO Public Citizen, “made the astounding claim that there is no evidence that heavy metals, like lead, pose a threat to human health or the environment”.)

Now, the EU is big enough and ugly enough to have fought and won the case. But many an African country lacks the war chest for such a fight, and so will end up paying for the healthcare of those exposed to leaky old PCs’ cadmium, chromium or mercury, instead of embarking on, let’s say, a nationwide anti-malaria strategy. Bill Gates himself may not indeed have known about what the AeA was doing on Microsoft’s behalf, but the fact remains that if a philanthropist’s money comes from externalising corporate costs to taxpayers, and that if Microsoft is listed for its own tax purposes as a partly Puerto Rican and Singaporean company, then the real philanthropists behind these glittering foundations might be a sight more ragged-trousered than Bill and Melinda.

Free marketeers will spring to the defence of billionaire philanthropists with a remark like: “Oh, so you’d rather they spent all their money selfishly on golf courses and mansions, would you?” To which I reply: “Oh, you mean that trickle-down doesn’t work, after all?” But the point is that the poor are not begging us for charity, they are demanding justice. And when, on the occasion of his birthday, a sultan or emperor reprieved one thousand prisoners sentenced to death, no one ever called those pardons justice. Nor is it justice when a plutocrat decides to reprieve untold thousands from malaria. Human beings should not have to depend upon a rich man’s whim for the right to life.’

*       *       *

First of all, the ‘facts’ quoted in the article are hugely misleading. It is ludicrous to suggest that most, or even much, of Bill Gates’ fortune came from ‘externalizing costs to taxpayers’. At most 5% of Microsoft’s profits ever came from hardware sales; the rest is software, which carries no such pollution risk as Newman refers to. Does he think that Microsoft manufactured the ‘leaky old PCs’? In the words of another blogger, ‘Microsoft didn’t run over your dog!’

Of course, claims that other companies and individuals made their money by ‘externalizing costs to taxpayers’ have to be assessed on a case-by-case basis, but many of America’s richest made most of their money entirely legitimately. Warren Buffett of Berkshire Hathaway and Larry Ellison of Oracle (the second and third richest Americans in 2011) are two good examples; likewise the founders of Google and Facebook. The nature of their businesses must mean that only a small proportion of their fortunes could come from ‘unethical’ business practices. Some ideas just inevitably generate a lot of money!

Should they pay more tax? Perhaps – and Bill Gates admitted as much, in a TV interview with the BBC:

“And I certainly agree that [taxes] should go up more on the rich than everyone else. That’s just justice.”

But the rich should certainly not be taxed so heavily as to discourage philanthropy. Voluntary giving is a great thing: within a country, it produces a social cohesion which is hard to achieve through state welfare. The recipient has more of a sense of obligation to make good use of their opportunity than they would have after receiving, say, a state benefit, because someone has chosen freely to help them. The giver in turn sees the positive impact of their philanthropy, and is inspired to give more. It is much better that the rich give voluntarily, than that they be forced to surrender a large part of their income by others. Compulsory income redistribution via taxation should be viewed as necessary, only because voluntary giving on its own is not sufficient to alleviate poverty. But it is an unfortunate necessity. (Indeed, one could argue that in an ideal world, taxation would not be necessary, because there would be enough voluntary giving.)

What about the ‘havoc that power without oversight and democratic control can wreak?’ Newman seems to be claiming that governments know better how to spend money abroad than the ‘billionaire philanthropists’. There is certainly a risk that a philanthropist will spend their money unwisely, but there is also a risk that governments will spend their tax revenue unwisely – giving billions of dollars of military aid to countries guilty of war crimes, and waging wars which the voter may not support. The latter is, in a sense, forcing a citizen to fund positively unethical action.

At the moment, I trust the Bill and Melinda Gates foundation much more than either the US or the UK governments, to spend money abroad in the most effective possible way. A philanthropist such as Bill Gates, nearing the end of their career, and deciding how best to spend money on philanthropy, has generally only one objective: to do the maximum amount of good. (A cynic might raise the Kantian possibility that they are really doing it to gain accolades, but this is irrelevant to the actual impact of their giving.) A politician, on the other hand, may wish to achieve other things: to bolster or curry favour with a foreign ruler, to win support from a (partly selfish) electorate, or to advance their political career. Even if they have good intentions, these might be frustrated by an act of Congress. The Bill and Melinda Gates Foundation has access to the foremost health experts in the world, and can make a decision based on the best available evidence. The UK government, on the other hand, repeatedly ignores the advice of its own experts (for example, those who resigned from the Advisory Council on the Misuse of Drugs) out of fear of a populist backlash. It is a running joke in the Department for Education that Michael Gove and his team want ‘policy-based evidence’, rather than evidence-based-policy, to justify their rash decisions retrospectively and save face. Of course, in an ideal world, governments would not have such problems, but we have to be realistic. Who is more likely at the moment to make a good decision on how to spend money abroad: a billionaire philanthropist or the US Congress? At the moment, my money is on the philanthropist.

(Of course, we should still try to make government aid more effective, and Gates himself is calling for that very thing!)

When it comes to domestic spending, the government may be in a better position: it has a clear incentive to spend money well, or it will not be re-elected, and the electorate, while sometimes prone to supporting an unethical foreign policy, often know what will make them happy in terms of domestic policy. But voluntary giving is still to be valued, because of its additional positive impact on both the receiver and the giver, and the consequent strengthening of social cohesion. (An aside: perhaps people could be encouraged to pay voluntarily into a national ‘Poverty Alleviation Fund’, which would then be spent with ‘oversight and democratic control’?) And there is no substitute for personal acts of charity: as a member of a community, a philanthropist will often know far better than a bureaucrat, who needs help most, and who will make best use of it.

Finally, a word about justice. I could scarcely believe the article’s closing paragraph. Aside from the fact that condemning someone to death and then reprieving them is clearly different to organizing a global effort to save people from malaria, the statement ‘human beings should not have to depend upon a rich man’s whim for the right to life’, is particularly insidious. In reality, the proper working of international aid is just philanthropy on a more spread-out scale. If the UK government decides to spend some of its revenue on eradicating malaria, it does so with at least some support from the electorate, and hopefully after some public discussion on why it’s a good thing to do.  Effectively, millions of taxpayers are giving about £10 each, as opposed to a few people, each giving millions each. Why is the first one ‘justice’, and the second ‘a rich man’s whim?’ The first can be viewed as lots of moderately rich people’s ‘whims’ – or ‘decisions’, as they are more usually called. There is only a real difference between the two when many of the taxpayers are unwilling to help, but are forced to do so against their will. Effectively, this is one group of people being ‘philanthropic’ with the money of another group! It is actually a less sustainable and less desirable state of affairs than genuine philanthropy: it will create resentment, and the resentful rich will move elsewhere, to a country where they have more say in how their money is spent.

How can anyone in their right mind prefer enforced ‘giving’ to voluntary giving? For as long as there is inequality in health and wealth, there will be a need for those with more to help those with less. How much better that this help be largely voluntary, rather than forced?

Philanthropy literally means ‘love of humanity’; love means nothing unless it is translated into voluntary action. Philanthropy is the enemy of justice? One might as well say that love is the enemy of justice.

In praise of U-turns

December 26, 2010

There are some rather odd news headlines today… ‘Government accused of free book funding partial U-turn’… Surely the U-turn shows UK democracy working as it should?

Last week: the Department for Education sends a letter to the charity Booktrust, informing it peremptorily that all its public funding (£13 million per year) is to be cut. There is an outcry from authors such as Phillip Pulman (‘unforgivable disgrace’) , ex poet laureate Andrew Motion (‘act of gross cultural vandalism’), and children’s laureate Michael Rosen (‘absolutely appalled and utterly enraged’). And it wasn’t just authors: teachers, health visitors and librarians also expressed their dismay. The opposition, rightly, switches into attack mode: Ed Milliband states: 

‘This Conservative-led government knows the price of everything and the value of nothing. The abolition of Bookstart will deprive children of an early opportunity to discover the joy of reading. It is one of the programmes introduced by Labour of which I am most proud.

It was a gift from the government to the next generation. This week we learnt that many of the Lib Dem ministers privately admit what they are doing is wrong and unfair. They may have convictions but they do not have the courage of them.’

And now, the DfE has put out a joint statement with Booktrust, stating that public funding will continue, although the level has yet to be determined. We should applaud the DfE for being willing to make a (partial) U-turn in the light of input from people who best know the impact the cuts would make. Hopefully, the final decision will be a wise one.

Booktrust says that, through support by publishing companies, it has been able to generate another £4 for every £1 of government money. The DfE seems to have taken this to mean that it does not need government funding. But the important thing about government funding is that (ideally) it provides a basic level of security for a certain number of staff, whereas private sources can be more subject to short-term economic conditions. If there is a short space of time when private sources dry up, the government funding is there to tide things over. £13 million per year is not a great saving in the grand scheme of things, and judging from those ‘on the ground’, it sounds like it’s in the public interest to maintain the funding.

In general, I think it would be a good thing if politicians were more willing to make U-turns if new evidence changes the picture against their original decision. If a policy isn’t working, or new evidence comes to light showing that a planned policy is a bad idea, the worst possible thing to do is to continue it in order to save face. The public (and the media) should respect the politician who, in response to criticism by those who know the situation, changes their policy. Open debate and willingness to change policy for the public good are great assets for a democracy.

In my opinion, the electorate (and the media) shouldn’t be too hard on the U-turn itself. The original mistake can be criticized, if it betrays poor judgement, but sometimes it can be due to a lack of information and a breakdown in communications which isn’t wholly the fault of the government. The practitioners and the experts also have a responsibility to bring important information to the attention of the government. And no actual harm is done if the government realise their mistake and act to correct it. No government can always get everything right with the first policy draft. The question we, as the electorate, should ask is: are the eventual actions of the government conducive to the public good?

It is perhaps more important in ‘confidential’ decisions, such as in foreign policy or domestic security, that the government be right first time, most of the time. The safety-valves of public discussion and debate just aren’t there. U-turns in foreign policy are often more serious, but the unwillingness of US presidents such as George W. Bush to ever admit to them is worrying. U-turns, or ‘flip-flops’ as the Americans call them, are sometimes necessary for the national and international good. Suppose a US administration is 75% sure that making a U-turn on policy towards Iran will substantially improve the situation for both the US and Iran. They may doggedly continue with their policy, thinking that the damage to their reputation from making a U-turn justifies the smaller chance of success if it is not made. This is what a democracy should wish to avoid; such hypocrisy should be ruthlessly exposed and punished at the ballot box. Again, open, informed public discussion seems to be the way forward.

Of course, foreign policy opens up a whole new hornets’ nest, as the actions of one country may be in the national interest, but not in the ‘international interest’ – i.e. bad for the world as a whole. However, in today’s closely interconnected world, international goodwill, trust and co-operation are important assets which any country discards at its peril. More of this anon…

Free votes and referendums

May 31, 2010

This is inspired by Gowers’ blog entry ‘If politicians were mathematicians’, although it gets away from mathematics almost immediately!… Gowers raises the following problem in democratic politics. Say a party wins a general election, with 55% of the popular vote, and proposes a controversial policy, which only 70% of its MPs support. If party discipline is sufficiently strong, all the MP’s from that party may end up voting for the measure, and it may be passed, when in fact under 40% of MPs support it. Gowers puts forward the following idea, which might help overcome this problem; I take the liberty of quoting verbatim…

`Votes are made electronically and then counted. After they are counted, the way people voted is made public. However, before that happens, each vote is changed, independently, with a certain probability such as 10% (but the precise value could be argued about, and might even vary from vote to vote, being lower for especially important votes). If you feel strongly that your party is wrong on a certain issue, then you can vote against it, and if that annoys the party whips, you can tell them that you voted for it but your vote was flipped. However, you cannot play this game too much, or the number of times your vote appears to be against the party line will be so far above 10% that it will be clear that you are not a loyal party member.’

What I have been thinking is, maybe there are other solutions to this problem as well. First of all, a government will not want to propose too many policies which are unpopular with a majority of voters, if only because this would endanger its chances of re-election. (Naturally, one would hope that they also wish to represent the best interests of the voters!) Neither will it want to alienate a majority of MPs, as if it does this repeatedly it may even risk been brought down by a no-confidence vote. Governments will often allow MPs a free vote on contentious issues: in the UK, this tends to be popular with constituents, as it (hopefully) gives MPs more freedom to vote as a majority of their constituents would wish. But the problem is: what happens when an MP finds themselves at variance with their party in a whipped vote? Ideally they should be able to vote against the party line without severe consequences. One would hope that a party that issues a two or three line whip on every vote would alienate its MP’s and also become gradually less popular with the electorate due to perceived authoritarianism, but in reality this may not happen. Gowers’ solution does indeed provide a way of occasionally escaping the penalties for breaking party lines. But if an MP chooses this way of escape, they are unable to participate openly in the debate on this issue, which is a sad loss.

An alternative solution would be to lobby governments to relax party discipline in more instances. Before a general election, parties could be asked to publicize their policy on whipped votes. (Certain rules could even be enforced by an independent parliamentary commission.) For example, parties could promise (or be forced!) to allow a free vote if enough MPs signed a petition to allow one. This blog advocates a free vote on every single issue. This would not necessarily make government impossible – the government would just have to spend more time building consensus within its own party (and maybe even across parties).

All this begs a much larger question: what about direct democracy? Why should we delegate so much decision-making power to MPs? Wouldn’t it be possible to have a nationwide referendum instead of a parliamentary vote, on many issues? A friend of mine has proposed a system where everyone has the option to vote on every new measure, but can choose to delegate their vote to an elected representative if they wish (for example if they were apathetic, or felt they were uninformed about the issue).

I’m not sure that the majority of British voters would support a direct voting system. I’ll try to outline some (reasonably well-known) potential problems with it below.

For one thing, there are theoretical problems with allowing a referendum on everything separately. Suppose there are 3 people, A, B and C, voting on 3 economic decisions, decisions 1, 2 and 3. A ‘yes’ to decision 1 will cost A £1000 pounds, but it will earn B and C £100 each; a ‘no’ means that nobody loses or gains. Similarly, a ‘yes’ to decision 2 will cost B £1000 and earn the other two £100, and a ‘yes’ to decision 3 will cost C £1000 and earn the other two £100; a `no’ means that nobody loses or gains. If each person votes on each decision separately to maximize their earnings, two out of three of them will vote ‘yes’ on every decision, so each will end up making a net loss of £800. Presumably, if none of them communicate with the others before or after their vote, each will vote ‘yes’ to every decision, if they are guided only by self-interest. What happens if beforehand, there is a general election? There are two parties, one which promises to decide `no’ every time, and one which promises to hold a referendum on each decision separately. All three of A, B and C should be in favour of the first party, as it would reduce their losses to zero. So it looks like it could be in the best interests of everyone to appoint a ‘government’ which will carry through a unified policy.

The same kind of thing happens in the well-known ‘prisoner’s dilemma’. Here, the situation is even simpler. There are two prisoners locked in different cells, accused of being partners in crime. The police know that they can convict both on a minor crime, for which the maximum prison sentence is 2 years, but to get one of them on the big crime, they need the co-operation of the other. A policeman visits each of them separately and makes them an offer. ‘If you refuse to co-operate, we’ll give you 2 years for the minor crime. But if you implicate the other guy, we’ll just give you 1 year, and he’ll get 10 years.’ The prisoner, who isn’t a fool, asks the policeman what happens if they both implicate each other. ‘In that case’, the policeman replies, ‘you both get 5 years.’ Whatever his partner does, it’s better for each prisoner to rat: if his partner does too, his sentence has gone down from 10 years to 5; if his partner doesn’t, his sentence has gone down from 2 years to 1. Without the possibility of influencing the other prisoner’s decision, in the absence of the proverbial ‘honour among thieves’, both prisoners are likely to implicate each other and get 5 years, whereas if they both refused to co-operate, they would both get only 2 years. But what happens if the two prisoners had another option, to appoint a lawyer who would prevent the police from making either prisoner any kind of offer? They’d be better off going for the lawyer.

Even allowing each person a certain amount of ‘credit’ which they can use at each vote, as discussed in Gowers’ blog entry above, won’t prevent the above situation from happening, where a pre-agreed, fixed strategy is better for every single person involved than when everyone votes independently for selfish reasons. It is true that many people will not vote for a policy which they know will cause overall harm, even if it benefits them slightly, but there are probably enough people motivated mainly by self-interest to make it dangerous to rely on altruism.

What happens, though, if the ‘prisoner’s dilemma’ above is repeated again and again, this time with financial penalties rather than jail-time? This would be more similar to what happens when different measures are voted on. One would expect two prisoners to learn rather quickly that the best thing for them to do is to consistently refuse to co-operate, establishing trust and a stable pattern, and indeed, this tends to happen in sociological experiments.

One could argue that over time, people would learn that voting for the bests interests of the country as a whole will build trust and lead to reciprocal benefits, but again, there is a certain amount of risk in relying on this. Delegating some decision-making power to MPs, provided it is accompanied by genuine debate involving the whole cross-section of society, seems to be a way of getting around this risk.

But what if a majority of the electorate becomes convinced that a particular policy proposed by the government is detrimental to the country as a whole? A compromise solution might be to oblige a government to hold a referendum on an issue provided enough people signed a petition for it. The government would then have the opportunity to put its case to the electorate before the referendum. It’s interesting to speculate on what would have happened if there had been referendums on capital punishment in the UK. (Only in 2006 did popular support for capital punishment as a penalty for adult murder drop below 50%, for the first time.) Would the majority of those who backed capital punishment in opinion polls feel strongly enough about it, and be sufficiently convinced of their position, to press for a referendum on it? Maybe if there had been several referendums on this issue, there would have been a real chance for an informed debate, and opinion would have shifted much more quickly?…

Do we have the right balance between delegating authority (and consequently losing some influence over the decision-making process) and being able to intervene in the process? Maybe we’ve delegated too much… I’ll return to this at some point!