Week 2 of attempting to be a functional member of the workforce on no sleep and while covered with baby vomit is in the bag, and once again, it has been a learning experience. It is truly remarkable how quickly my standards in fashion have plummeted. I’ve never exactly been one of the League Fits guys but the speed from which my minimum standard for a t-shirt went from ‘clean, fits me and is comfortable’ to ‘nearby and less than 70% covered by baby bodily fluids’ has been shocking. I’m all for cool Zoom backgrounds, but what I really need is a fake foreground – a digital equivalent to one of those t-shirts that have a suit printed on the front. The upside (apart from, you know, the baby) is that for once I’m awake for those sporting events I’d previously had to record and go internet-dark to catch up on. If only the Ashes were on in Australia right now. It would be a new experience to stay up and watch England embarrass themselves in real time, rather than waking up to the completed humiliation. At least we have the Finals – though perhaps not for long, as the LeBron might wrap it all up tonight… and push himself even further out into the otherwise empty space in the top right of this graph), which should be made into a piece of abstract art entitled ‘Dominance’.
- Why do people make mistakes? Over the last five or so years, this has become the question I find most interesting. It’s not enough to say we’re human, or even to accept that mistakes are inevitable, because responding to and catching mistakes means knowing why they arise. The reasons are many. “Inattention, distraction, lack of interest, poor preparation, genuine stupidity, timidity, braggadocio, emotional imbalance, ideological, racial, social or chauvinistic prejudices, and aggressive or prevaricatory instincts” is a good starting point, the one this piece takes off from, and builds on. Many of these ring true, and close to home. Knowing the various sources of mistakes aren’t enough to protect you from them. You need to build systems that help, the problem being that most of those systems are deeply uncomfortable. No-one enjoys peer review when they’re the ones going through it.
- One way to be less wrong, less often is to mix your methods. If you spend your whole life looking at problems the same way, you’re going to develop some pretty deep blind spots (even if you can see with great clarity where you do see). One of the many good things about the Gender Innovation Lab at the World Bank is that they draw on a range of disciplines for their research and policy work. Markus Goldstein has a great two part conversation with his colleague Rachael Pierotti discussing the when, how, why and strengths and weaknesses of qualitative research. Part one here, part two here.
- Another way to be less wrong (over time) is to argue and engage with critical thinkers who disagree with you. Project Syndicate put out two good pieces this week, arguing opposite sides of the same coin: Dani Rodrik arguing that stakeholder capitalism may not go far enough and needs to be more democratic. He argues that Friedman’s law that a business has only one responsibility, to maximise the returns of its shareholders, is damagingly wrong because they themselves set rules of the game they play, and tilt them in their own favour. Meanwhile, Raghu Rajan takes the opposite stand, arguing that stakeholder capitalism can please nobody, and that Friedman’s diktat masks a deeper truth: since shareholders claim the residual after all other claims have been paid, their benefits can only be maximised after other stakeholders have been satisfied. I think they’re both wrong – I cannot for the life of me see a version of stakeholder capitalism that doesn’t wind up with insiders and outsiders, vested interests that lead to some being excluded and some social costs being ignored. Meanwhile, to pretend that the residual claimants of a firms returns are not incentivised to distort the actions of the firm, its relations with its clients, workers and supply chains, and the laws in which they operate isn’t so much one-eyed as blind. If the answer isn’t more democracy, or leaving firms to find their own virtue, what is? Filling the holes in taxation policy and compliance would go a long way, to start.
- I really liked this piece by Sarah O’Connor on how the pandemic has exposed massive deficits in the childcare infrastructure in our economy. Much like Harvey Dent, she argues that the night is darkest just before the dawn, and things may get better from here. On Twitter Abi Adams makes the reasonable counterpoint that history is filled with putative rock bottoms that we’ve managed to keep digging below, ignoring the obvious and failing to improve policy in the face of overwhelming evidence that it is wrong.
- Low-skilled migrants are important not just because they do jobs that others won’t, but because through the magic that is the labour market, they set off a chain reaction that changes the size, distribution and character of the jobs everyone else in the economy is doing, and their time use. This is underappreciated because it’s so hard to model or measure, but this VoxEU article suggests it leads to a large underestimate of the fiscal contribution low-skilled workers make to the state.
- And while we’re on fiscal matters, I haven’t dug into this yet, but it looks amazing: Morten Jerven, Thilo Albers and Marvin Suesse have put together a huge new database of taxation and domestic revenue generation in Africa, stretching back to 1890. Morten says that taking the long view of the data upturns many of the standard takes on African state capacity.
- Lastly, have you felt stuck in a rut recently? Worried about your future in the post-Covid economy? Never fear, the Department for Education have put together this scarily brilliant quiz that will pin down your optimal occupation in ten minutes flat. Even more brilliantly, they do it without asking your age, educational qualifications, work experience or skills. It takes this kind of genius to suggest to every economist I know who has completed the survey that they should retrain as a professional boxer. What was I saying about making mistakes earlier? We should ask Mr. Williamson about it – he seems to be the expert.
Have a great weekend, everyone!