The really real reason why banks have so many scandals

“Since we have not more power of knowing the future than any other men, we have made many mistakes (who has not during the past five years?), but our mistakes have been errors of judgment and not of principle.” J.P. Morgan Jnr, 1933
A couple of months ago I was toying with the idea of writing a post about how the commercial finance sector in the UK and the US seems to be incorrigably broken as a result of the dominant sentiment that it’s only a crime if you get found out. I saw this as evidence of an over-reliance on the Individualist cultural worldview.
But it seemed too extreme. I didn’t want to promote a sweeping  “indictment of banking as an inherently evil industry filled with shysters that are intent on fleecing anyone they can.” Surely they weren’t all corrupt. All generalizations are wrong, (especially this one, as the saying goes). Surely I was over reacting. So the post never got written.
Then the Barclays Libor scandal broke in London…

Samuel Bowles on economic inequality as a policy option

Prof Sam Bowles has a couple of books that compliment the work of Richard Sennett on cooperation – one published in 2011, the other due later in 2012. Whereas Sennett takes a sociological approach, Bowles focuses on economics. In particular he has done some interesting work on computer modelling of property rights.

Why do People play the Lottery?

Question mark
Image via Wikipedia

Well, why do they? It’s the kind of question only those who don’t do it would bother asking. I admit I’m one of them. The lottery is a mystery to me – self-evidently daft,  like a slow-motion version of taking a pile of cash and setting fire to it. Why would anyone do it?

One way of answering this kind of question is presented by science journalist Jonah Lehrer: let’s ask some behavioural economists!

The chief conclusion is as follows:

In two experiments conducted with low-income participants, we examine how implicit comparisons with other income classes increase low-income individuals’ desire to play the lottery. In Experiment 1, participants were more likely to purchase lottery tickets when they were primed to perceive that their own income was low relative to an implicit standard. In Experiment 2, participants purchased more tickets when they considered situations in which rich people or poor people receive advantages, implicitly highlighting the fact that everyone has an equal chance of winning the lottery.

An Unsafe Bet

Jim Orford has a book out entitled An Unsafe Bet? The Dangerous Expansion of Gambling and the Debate we should be having. In it he identifies eleven commonly used discourses of gambling. Of these six discourses broadly support the liberalisation of gambling and five support the increase of restrictions on gambling. Orford is fairly relaxed about this typology and even says: ‘Other people would no doubt produce a different list’ (123).

This to Fourcultures is as a red rag to a bull, so here goes.

Source: Orford 2011:124

False Signal?

Two people on the shore of the Pacific Ocean
Image via Wikipedia

“My father told me the oceans were limitless, but that was a false signal.”

NYT on collapsing fish stocks in the South Pacific.

In Mackerel’s Plunder, Hints of Epic Fish Collapse


Experts and Cultural Cognition

Dan Kahan‘s blog at the Cultural Cognition Project makes some conjectures about whether experts think in similar ways to non-experts. Specifically he wonders whether experts exhibit the kinds of cultural biases already demonstrated by non-experts. Do experts use cultural cognition?

My observation is that there would need to be care taken to avoid something like the fundamental attribution error. That is to say, being an ‘expert’ in a given field is strongly conditioned by situation. So the very choice of who the experts are may be conditioned by unacknowledged cultural bias. My conjecture is that experts therefore say what their audiences and sponsors expect them to, otherwise they would be unrecognizable as experts. In situations where the message is critiqued, so is the messenger’s status as an expert. In situations where the message is positively received, the messenger’s status as expert is regarded as obvious.

Three possible examples:

Who is an expert in local economic development? Rob Hopkins, the founder of the Transition Towns movement, tends to have a strongly Egalitarian outlook on the world. He recently complained that the ‘growth as usual’ mindset of local council officers called into question their competence as expert in their own field. His position is that true economic development experts would take into account peak oil, economic crises and climate change and allow for the possibility that economic growth, as it has been understood, may be a thing of the past.

Second example: Climate science has its experts and it is an open question as to whether the geologist Ian Plimer is one of them. At one level he is not an expert in climate science since that is not his area of professional competence. However, he has written a book on the subject and since he is a ‘climate sceptic’, there are some people who wish to present him as an expert in climate change. His new book for students was launched by a former prime minister of Australia.

The third example is that of US judges, experts in legal deliberation, many of whom are appointed on specifically political grounds. Voters have a sense of the liberal and conservative candidates for office and they vote accordingly. To those of us living in places where the judiciary is appointed on merit rather than elected, this appears strange indeed. After all, what could be less political than judgements concerning the facts?

In these examples the kinds of statements made by ‘experts’ are received not on the basis of whether the person in question actually has qualifications or professional standing, but on whether their words fit with a particular cultural bias. That is to say, each cultural bias already has its own experts, who are brought into the argument in order to cast doubt on the competence of the other side’s supposed expertise.

So before we can identify how experts behave it’s necessary to create a definition of expert that is broadly acceptable across the conflicting cultural solidarities described by Cultural Theory. The three examples given above show that this may be quite difficult.


Biosemiotics and slime mould

many headed slime - physarum polycephalum
Image by randomtruth via Flickr

New Scientist has an interesting article on the ways in which it may make sense to talk about non-conscious entities creating meaning. Biosemiotics.

Hat tip to Meika.

I had been thinking abut this when I came across a report on the slime mould’s ‘irrational’ decision-making process.It seems that like humans, Physarum polycephalum makes quick foraging decisions based on comparisons of what’s available. These decisions aren’t strictly rational.

Canadian researcher Dr Tanya Latty of Sydney University said:

“If you are in a risky environment… it’s better to be able to make a quick decision that’s right most of the time rather than a perfect decision that takes too long and means you get eaten by something,”

There’s a radio interview on CBS.

…and another paper.

Detroit: a city fit for superheroes?


Chatting with my young son this evening it occured to us that superheroes require certain types of cities, certain kinds of urban form, in order to thrive. Spiderman needs tall buildings closely packed in order to leap between them. The Hulk needs impressive edifices to knock down. Only certain types of urban form are fit for superheroes.

There’s a new documentary about the rise and fall and return of Detroit. The director of Requiem for Detroit? , Julien Temple, was fascinated by the idea that Detroit was at the leading edge of American urban for many years, leading the rest of America into the future. Now Detroit is doing it again, showing us what the first post-American city looks like.

Will it be a city fit for humans?

Image Credits: Daquella manera/Flickr; laughlin/Flickr; walid.hassanein/Flickr

Detroit statue

downtown detroit

Fresh Thinking on Systemic Risk

Tyrol danger signFresh thinking on systemic risk:

Levin and Sugihara on the ecology of finance

George Sugihara at the Resilience Alliance

complex systems: ecology for bankers

New dimensions for understanding systemic risk

extending non-linear analysis to short ecological time series

Image credit: Flickr/Katz2110

Mutualism: Flavour of the month

As predicted this time last year, mutualism is the new favourite political idea.  It has been so ignored by policy makers over many decades that it has temporarily lost its left/right label and the Tories are also talking about it.

But it shouldn’t be thought that mutualism is a way of making money grow on trees. You can run money-generating operations on this model, but money-spending operations (eg most public services) require external funding. As Chris Bertram at Crooked Timber puts it:

‘There seem to be two possibilities: either the mutuals have independent sources of funding or they don’t.’

It will be interesting to see how much of the utopian mutualist talk survives the forthcoming UK general election, and how far the resulting government ends up supporting what Rudolf Bahro might have called ‘actually existing mutualism’.

Read: A mutual alternative to markets and hierarchies