Chris Dillow's Blog, page 176

Is equal opportunity feasible?

Neal Hockley has criticised me for eliding the distinction between social mobility, equality of opportunity and meritocracy.

He's right. They are different things. For example, if social positions were allocated at random we'd have social mobility and equality of opportunity but not meritocracy. If there were different chances of success, we'd have social mobility but not equality of opportunity and maybe meritocracy or not depending upon how jobs were allocated. And if jobs were allocated by merit, and merit were 100% heritable, we'd have meritocracy but not social mobility.

This last possibility is no mere thought experiment. Some research has found a significant correlation between parental income and hippocampal gray matter density, which in turn suggests that children from poorer backgrounds are, on average, less able to form memories and to learn than their richer counterparts. Poor kids, then, are at a biological disadvantage.

This has important implications for equality of opportunity. If you think that equal opportunity should mean that everyone has an equal chance to become qualified (as distinct from the non-discrimination conception of equal opportunity), then it implies that kids from poor backgrounds should have better education to offset their biological disadvantage.

This is the argument for a pupil premium - extra funding for schools in poor areas.

But this doesn't go far enough. For one thing, it's not obvious that it's sufficient to offset the tendency for better schools to be located in more expensive (pdf) areas, or for increases in the quanity of education to give people from rich families an increasing advantage - two ways in which state-provided education has increased inequalities of opportunity.

And for another thing, the disadvantages associated with a poor background begin before children get to school and - given the weak link (pdf) between school funding and quality - are thus only weakly remediable by education funding.For this reason Julian Betts and John Roemer have estimated that to create substantive equality of opportunity in the US would require massive inequalities in educational funding. 

All of this suggests that substantive equality of opportunity is not "equality-lite". it requires very radical changes - and perhaps technically and politically infeasible ones.It might be that policies to achieve greater equality of incomes are more achievable than equality of opportunity.

Punk is dead, alas

Watching Punk Brittania reminded me of a now-lost world - one in which young people's anger shocked their elders.

Punk was more rebellious and more disquieting to the establishment than anything we see today. Nobody of my generation is as appalled by dubstep as 40-somethings were by punk. It's unlikely that a single today would be banned for political reasons and get to number one, as God Save the Queen did. And try as I might, I can't imagine Rizzle Kicks doing to Alex Jones what the Sex Pistols did to Bill Grundy.

In this, music reflects a wider social fact - that today's young people are much less gobby than we were. Last summer's riots, for example, contained less political motive than their 1981 equivalents. And much as I love them, today's "voices of their generation" are pretty tame: Owen Jones is no more radical than some Bank of England economists and Laurie Penny is a milk and water Julie Birchill.

The plea of one of the greatest songwriters of my generation - teenagers, kick our butts - has fallen on deaf ears.

This is not because of a lack of cause. Today's youngsters have the same grievances as my generation - youth unemployment and police harrassment - and then some.

So why are young folk so passive? Here are some possibilities:

1. My generation has learned the trick of repressive tolerance. Our more liberal attitudes towards young people gives them nothing to kick against.

2.Our neoliberal/celebrity culture encourages youngsters to pursue individual wealth and fortune by playing the game by capitalist rules. The paradox here is that punks got more fame by offending their elders than today's young pop stars do by acquiescing to them.

3.Rebellion is often sublimated sexual frustration, and today's more healthy relations between the sexes have reduced such frustration.

4.The notion of youth subculture as something rebelling against older people was only ever a brief historical phenomenon. We're now seeing a return to the pre-50s normality, in which young people were merely younger versions of their parents.

5.Young people, like their elders, are ironic post-modernists. They are too detached from narratives to get really angry. 

6. Affluence and technological opportunities have bought off rebellion. Playstations and the availability of free (if meaningless) music mean that boredom and relatively low incomes have less combustible effects than they did in my day.

I dunno which, if any, of these theories explain young people's quiescence. But whatever the explanation, I for one, regret it.

The journalist's fallacy

Tim objects to this:

A generation of youngsters may be developing a skewed view of sex from pornography, a court has heard, after a 12-year-old schoolboy raped and sexually assaulted a younger girl after copying a hardcore film he watched on the internet.

He's right to object. This is an example of what we might call the "journalist's fallacy" - though in this case it's perpetrated by someone from a profession even more ignorant of statistics than journalists. I mean by this the tendency to draw strong inferences from one or two observations, without asking: are these observations a representative sample? In this example, we have a good reason to suspect not; 12-year-old rapists are rare, whilst internet porn is ubiquitous.

I call this the journalist's fallacy (though it's related to the availability heuristic) because journalists are especially prone to it - perhaps because they know that a human interest story or lively image makes for "better writing" than statistical evidence, and they mistake good writing for good thinking*.

Take just three examples.

In the Times, Anushka Asthana writes of "women friends who say they felt they had to slip their engagement rings into their pockets before job interviews". But she doesn't say that, among people of fianceable age (22-29), women actually earn more than men, suggesting either than such behaviour is unnecessary or that employers are easily fooled.

Zoe Williams writes: "My son and his friends are constantly worrying about sugar, how it makes you fat, how you can find it even in places you don't expect." But she doesn't tell us whether her children are representative or not.

Joan Smith writes:

The problem is how many adults ignore health advice altogether. Alcoholism is a huge social problem and so is obesity. A couple of days ago, I walked past a shop where a hugely overweight assistant had slipped outside for a quick cigarette, and I couldn't believe that someone who already had a life-shortening condition was blithely risking lung cancer as well.

She fails to see that one lardy doesn't provide evidence of "many".

I mention these not because they are especially bad examples - I'm sure you could find much worse - but simply because they are recent ones, taken from three different papers today and yesterday. That they are so easy to find might be a sign of how common the error is.

Not only is the error (I suspect) common, it might also be costly, in three related ways:

- In relying so much upon personal experience and anecdote, other information gets downgraded. That information is the hard-found evidence provided by serious statistical research. The journalist's fallacy can easily lead to an anti-intellectualism in which personal, biased and limited experience is prioritized over proper social science. One example of this could be Mary Ann Sieghart's assertion that grammar schools would increase social mobility, oblivious to the fact that the hard research on this issue is, ahem, more ambiguous.

- The ignorance of serious social science breeds overconfidence. The message of lots of research is that facts are hard to come by, exceptions are common, and evidence ambiguous or missing. Such warnings rarely surround anecdotal evidence.

- The combination of overconfidence and generalization from what are often vivid and extreme cases (our 12-year-old alleged rapist) can lead to demands that "something must be done". It might be no accident that the increased influence of columnists upon politicians (if not the public!) under the last government coincided by legislative hyper-activism.

* It does not, of course, follow that bad writing is a mark of good thinking; this is the sociologist's fallacy.

Benefits ideology

That notorious Newsnight interview is just one of many examples of the widespread tendency to stigmatize benefit recipients. Why does this happen?

It's not because of the numbers involved. DWP data show that in 2010-11, working age people received £50.7bn in benefits; most of the welfare bill goes to pensioners. That's 3.4% of GDP and 9.6% of total taxes. Almost one-third of this (£15.5bn) was housing benefit, which - given that it tends to raise rents - might be more properly called landlords' benefit.This £50.7bn was spread across 5.7 million people, implying an average benefit of less than £170 per week.

Stories of households raking in thousands of pounds in benefit are, therefore, the exception. The government has estimated that its £26,000 benefit cap will affect 67,000 households.Assuming two adults per household, this implies that only around one in 42 individuals on benefit get what the government deems to be a high income.

To callibrate this, the chances of winning a lottery prize are one in 54.The belief that benefit claimants are living it large is, therefore, only slightly more rational than the belief that the lottery is a good investment.

Given the paucity of the numbers, the question arises: why are people so quick to attack benefit recipients?

Part of the answer, I suspect is that humans have evolved a powerful norm of reciprocity. We therefore instinctively hate those who get something for nothing, and wish to see them punished.

This, though, can't be the whole story. There's another group that also gets public support - bankers. The Bank of England estimates that the subsidy to banks could be over £100bn - twice the benefit bill.However, whilst there is public anger at bankers, this is not as well reflected in the media or mainstream politics as anger and benefit recipients.

Something else, then, is going on. I'd suggest three things.

One is the salience heuristic. The tiny minority of benefit recipients who do well get attention - either from the media or from being in the pub. The recipient who lies in hospital and has their benefit cut is less salient. In this way, the image of benefit recipients is systematically distorted.

Secondly, there's a managerialist belief in the fiction of a perfectible organization. The fact is that any feasible welfare system which supports the unlucky will also give handouts to a few scroungers, as the latter cannot be fully screened out. Attackers of benefit recipients forget Adam Smith's words, that "there is a great deal of ruin in a nation" - that some imperfections are inevitable.

Thirdly, there's a "blaming the victim" effect. The wishful thinking that causes us to believe (pdf) in a just world leads us to want to blame the victims of disability or recession for their plight. Such an instinct is as old as history. Job's friends think he is to blame for his sufferings; rape victims are sometimes blamed or even killed for misfortune; and Jon Elster says that in ancient Greece:

The irrational admiration of the beautiful or of those born rich was matched by an equally irrational contempt for the ugly or for those born poor (Alchemies of the Mind, p163)

Attacks on benefit recipients are, in this sense, an ancient and atavistic impulse - which just happens to serve a useful political function.

But let's not kid ourselves that a psychiatric disorder is part of legitimate political discourse. 

Social mobility: cui bono?

Alan Milburn's latest report on social mobility says (pdf):

The senior ranks of the professions are a closed shop. If social mobility is to become anything other than a pipedream they will have to open up. Unfortunately, the evidence collected for this report suggests that there is only, at best, limited progress being made in prising open the professions. That is not about to change any time soon.

This raises a question: why is he so keen to increase social mobility?

I ask because it's not obvious that social mobility is wholly desirable. Certainly, it's not sufficient for an acceptable social structure: Imperial China and, I suspect, the Soviet Union had some social mobility, but few applaud such societies.

And at least three political perspectives are sceptical of it. To libertarians, employers (in the private sector) have a right to employ whomever they wish regardless of talent - and the public sector and BBC seem to have embraced this principle. To Marxists, an opportunity to become an exploiter does not legitimize exploitation. And to liberal egalitarians, talent is morally arbitrary so it cannot easily entitle one to a "top job". Yes, Rawls wanted fair equality of opportunity, but he yoked this principle to the idea that inequalities be permissible only to the extent that they improve the lot of the worst-off.

Nor is it obvious that social mobility is desirable in utilitarian terms. Greater social mobility would create isolation amongst people from poor backgrounds who "made it" (trust me, I know), and self-recrimination among those who didn't.

Several thinkers, from Michael Young to Matt Cavanagh, have for these reasons opposed equality of opportunity.

Nor even is it obvious that social mobility is necessary for economic efficiency. If there's a correlation between the poshness of doctors and iatrogenetic effects, Mr Milburn does not provide evidence for it. And I'd suggest that, in banking, social mobility has had catastrophic effects; banks prospered for years when they were run by the old boy network, and collapsed soon after meritocratic physics PhDs and sons of electricians took over.

So, what use is greater social mobility? The answer, I fear, is that it can act to legitimate inequality. As Brian Barry said, a belief in equality of opportunity "cloaks the status quo with legitimacy through a process of mystification."

This works in two ways. One is that the perception that there are opprtunities to get rich reduces people's desire for redistributive taxation.

The other was pointed out by Michael Young:

If meritocrats believe, as more and more of them are encouraged to, that their advancement comes from their own merits, they can feel they deserve whatever they can get.
They can be insufferably smug, much more so than the people who knew they had achieved advancement not on their own merit but because they were, as somebody's son or daughter, the beneficiaries of nepotism. The newcomers can actually believe they have morality on their side.
So assured have the elite become that there is almost no block on the rewards they arrogate to themselves.

In these senses, the desire for more social mobility serves not egalitarian ends, but their exact opposite.

A benefit of performance pay

In recent years, there's been a justified backlash against performance-related pay. Paying workers for performance doesn't always elicit better results and might even backfire (pdf) if it crowds out intrinsic motivation or causes people to choke under pressure. However, a couple of things I've seen recently suggest there is a case for such pay.

One is a laboratory experiment at the University of Lyon. Researchers split subjects randomly into managers and workers, with workers answering general knowledge questions and managers assigning rewards to them. They found that managers were more likely to give high rewards to workers if they knew that the workers shared their opinions on subjects such as art, climate change or immigration. This confirms what we all know - that it's not just ability that gets rewarded at work, but conformity, being a "good chap."

However, when managers were paid for their team's performance, they became less inclined to reward conformity declined and more inclined to reward performance.

This is consistent with the finding of a new paper,  that, in the UK, "performance pay is associated with a smaller ethnic wage differential" - albeit mainly for Asians rather than blacks and for managerial and supervisory workers.

All this suggests that - under certain conditions - performance pay can reduce favouritism, insofar as it increases the reward for merit rather  than for conformity or skin colour. Performance pay, therefore, not only reduces racism, but also increases efficiency by deterring office politicking.

There is, though, a big caveat here. Performance pay only has these benefits if it is clearly tied to objective performance. Work by John Heywood and Emilio Castilla has shown that when such pay contains  subjective evaluations, it can actually increase ethnic wage inequalities. And, on might imagine, increase the rewards for conformity too.

So, maybe it is only particular types of very well-defined performance pay that we should applaud, and then only lightly.

Freedom vs happiness

Does freedom make us happy? Two things I've seen today suggest not. First, a cross-country study of the link between economic freedom and well-being concludes:

Economic freedom is significantly negatively related to life satisfaction if controlled for the influence of income per capita, unemployment, social trust, life expectancy and aging.

Of course, controlling for income is a big control. The raw correlation between freedom and happiness is positive. The message is that economic freedom make us happy insofar as it makes us rich, but it has no intrinsic value for well-being.

Yah boo sucks to neoliberalism, you might think. If you do, my second reading might discomfort you. This paper says:

Women’s happiness seems to fall – at least in the short-term - when there are changes/improvements in gender rights.

This corroborates work by Sabrina Vieira-Lima.

All this is consistent with Sheena Iyengar's theory of choice overload - the idea that freedom can reduce our happiness because it increases our regret at options not taken. She's written(pdf):

Choosers in extensive-choice contexts enjoy the choice-making process more—presumably because of the opportunities it affords—but also feel more responsible for the choices they make, resulting in frustration with the choice-making process and dissatisfaction with their choices.

I don't write this to deprecate the value of freedom. None of this research undermines the possibility that freedom is an intrinsic good, worth having regardless of its impact upon happiness. Instead, the point is simply Isaiah Berlin's - that there are unavoidable conflicts between basic human values.

The strong demand for charlatans

In the improbable event of ever being invited to give a commencement address, my advice to graduates wanting a lucrative career would be: become a charlatan. There has always been a strong demand for witchdoctors, seers, quacks, pundits, mediums, tipsters and forecasters. A nice new paper by Nattavudh Powdthavee and Yohanes Riyanto shows how quickly such demand arises.

They got students in Thailand and Singapore to bet upon a series of five tosses of a fair coin. They were given five numbered envelopes, each of which contained a prediction for the numbered toss. Before the relevant toss, they could pay to see the prediction. After the toss, they could freely see the prediction.

The predictions were organized in such a way that after the first toss half the subjects saw an incorrect prediction and half a correct one, after the second toss a quarter saw two correct predictions, and so on. The set-up is similar to Derren Brown's The System, which gave people randomly-generated tips on horses, with a few people receiving a series of correct tips.

And here's the thing. Subjects who saw just two correct predictions were 15 percentage points more likely to buy a prediction for the third toss than subjects who got a right and wrong prediction in the earlier rounds. Subjects who saw four successive correct tips were 28 percentage points more likely to buy the prediction for the fifth round.

This tells us that even intelligent and numerate people are quick to misperceive randomness and to pay for an expertise that doesn't exist; the subjects included students of sciences, engineering and accounting. The authors say:   

Observations of a short streak of successful predictions of a truly random event are sufficient to generate a significant belief in the hot hand.

It's easy to believe that this happens in real life. For example, the people who are thought to have predicted the financial crisis of 2008 are invested with an expertise which they might not really have.

Of course, there are other reasons why people might want to pay for forecasts; maybe they want a false sense of security of a predictable world, or they want someone to blame if things go wrong. This paper, however, suggests that these are not the only motives. Instead, people are too quick to perceive skill and thus to pay for something that doesn't exist. The demand for forecasters and tipsters substantially exceeds the real ability such pundits actually have.

Leveson's unlearnt lesson

The Leveson inquiry has drawn our attention to a fundamental political problem which hasn't had the attention it deserves.

I'm referring to the fact that Jeremy Hunt supported News Corp's bid for BSkyB, before Cameron asked him to decide whether that bid should be referred to the Competition Commission. Harriet Harman says such an opinion meant that he did not act in a proper "quasi-judicial" manner in assessing the bid, and so should resign.

But if you want someone to act in a quasi-judicial manner, you should employ a (quasi-)judge, not a politician.

Expecting a politician to act as a quasi-judge is to expect that he will slough off his preconceptions, lobbyists and interests and become a different person.

There seems to be bipartisan agreement that this mental conjuring trick is possible. I'm not sure it is, and still less sure that it should be.

And this is what gets my goat. Everyone in this sorry episode - Labour, Tories and commentators - seems to assume that good decisions can be made, if only the minister has sufficient honour or judgment.This is silly. If you want good decisions to be made, you must put the right structures in place. So, if you want someone to act quasi-judicially, you ensure that he is legally - and culturally - independent. This requires much more than asking some guy to act a part, as Hunt was asked to.

My point here is not about the minutiae of Hunt's involvement in the News Corp bid, or even about the way in which takeovers are policed.

It's bigger than that. Tittle-tattle about whether Hunt should resign or not symbolises an ideology that disfigures our politics - the idea that what's needed for proper decision-making is men of the right character. But this is not enough. You also need the right systems. And these have not been in place.If Hunt does have to resign - and I can think of nothing I care less about - he will pay the price for a political system which over-rates the role of personality and under-rates the role of structure.

Alfred North Whitehead famously said that "civilization advances by extending the number of important operations which we can perform without thinking of them." By this standard, government hasn't advanced very much.

The weak demand for equal opportunity

It's commonly thought that people are more likely to accept income inequalities if they believe these arise from equality of opportunity.For example, some attribute the relative weakness of the US welfare state to the fact that Americans believe (wrongly) that the poor have plenty of chances (pdf) to get ahead.

But what exactly is the link between perceptions of fair opportunity and demand for fair outcomes? Some experiments by Eugenio Proto and colleagues at Warwick University shed some worrying light.

They got people to play an ultimatum game, where one person proposes to split £10 between themselves and a partner. If the partner accepts the offer, both get the money agreed. If the partner rejects the offer, nobody gets anything.

The wrinkle was that the role of proposer - the advantaged position - was allocated by lottery which was either fair (giving people a 50-50 chance) or biased.

They found that when the lottery was fair, responders on average rejected offers of £2.15 or less. But when the lottery gave people zero chance of being a proposer, responders rejected offers of £2.96 or less.

This corroborates common sense. If people feel they have unequal chances, they'll demand more equal outcomes.

But what about intermediate levels of unfairness? When the chances of being a proposer were 20%, responders rejected offers of £2.39 or worse. And when the chances were 1%, they rejected offers of £2.53 or worse.

We can put this another way. The difference between a zero and one per cent chance is worth 43p - the difference between £2.96 and £2.53. But the difference between a 1% chance and 50% chance is only worth 38p - the difference between £2.53 and £2.15.

In other words, what people value most is having some chance - 1% versus nothing. Having greater opportunity - moving from a 20% to 50% chance isn't so valuable, in the sense that it doesn't so much affect bargaining behaviour.

This has (at least) two implications.

One is that it shows that people value procedural utility; having some chance to affect the outcome is what matters to them, rather than having a big chance.

The other is that, once some small chance exists, people don't greatly care about equalizing chances. They care more about having a small chance than about increasing their chances. These laboratory experiments confirm what we see in public opinion - that, like it or not, there is little demand for policies that would greatly equalize opportunity, such as abolishing private education or steep inheritance taxes.

I don't know why this is; I suspect it's related to the certainty effect. But surely lefties should be disquieted by the fact that egalitarian impulses can be bought off so cheaply even in laboratory conditions.