Bumper profits, for who?

Today Goldman Sachs announces first quarter profits of $13.8 billion dollars. This comes after it re-payed the $10 billion dollars it owed to the US Government, along with $426 million in dividends last month.

Brilliant! You might say. The banks are booming again!

However, there is another side to this story, which demands our attention. Namely; the return of massive bonuses for employees at Goldman Sachs and a return to the greed that played a large part in producing the mess the banks found themselves in last year.

In the first half of the year employees at Goldman Sachs recieved $11.4 billion ($386k each) in overall renumberation.

As a libertarian I believe in rewarding success and punishing failure, and that risk (when it pays off) should lead to reward. However it wasn't the bank whose money was at risk here! It was the money of the US taxpayer: and therefore it was the government who should have been rewarded.

This is not how Capitalism works! If banks are too big to fail they can take whatever risks they want, now and in the future, knowing that the government will have to provide a guarantee.

In short: The message that banks could well take from this is a simple formula:

HIGH RISK = BIG REWARD

...and this can only lead to another crisis.

Entropy

I've just tidied my flat. A tiring and arduous task, and one which will prove, ultimately, to be a fruitless endevour.

The reason is one word: Entropy!


Entropy

Entropy is the second law of thermodynamics. And it is a bitch!

It states that all systems will become more disordered over time. In fact: Although my flat is "tidier" by my estimation. The physical exertion that I put into the task: the buzzing of the hoover and the heat of my body will all have served to send particles whizzing around in a much more disorganised way: thus proving the law! My flat may look tidier. But, on a particle level, my exertions have actually caused chaos on a massive scale!

The same principle applies to complex molecules like DNA, with its characteristic double helix structure. This is because, just like in the example above, the energy required to construct the molecule will create disorder in the particles surrounding the reaction.

So, any quest for order amidst this chaos is fruitless. But that shouldn't stop you tidying your kitchen! Becuase entropy will ensure that you will have a mountain to climb the longer you leave it!

The Return Of History and The End Of Dreams

I've just finished reading a fantastic book by Robert Kegan (above). It is a very interesting discussion of some of the potential flash points which could lead to international tensions in the future, with the major international dividing lines being between a coalition of Autocratic governments on the one hand (Russia, China, Iran) and the Democratic governments of the West.

The idea of a world of shared, converging values is blown out of the water: and rightly so!

The tensions in question are already evident in Asia, over the status of an independent Taiwan, in Eastern Europe over the "colour revolutions" in Georgia and the Ukraine and over the sovereignty of states like Kosovo, Iraq and Afghanistan.

I share the view of the author that the next century will present many fresh challenges and that "the liberal world need to choose whether they want to shape it - or let others shape it for them."

How likely is World War 3?

I've just got back from teaching in The Gambia, where one inquisitive student asked me what my thoughts were on the possibility of World War 3.


I told him that in my opinion world peace relies on one crucial ingredient: Namely, the supreme military power of one state over all competitors.

The Cold War

We saw during the Cold War, that a fragile situation existed between the United States and the Soviet Union because two economic powerhouses were fighting for supremacy in a bi-polar world. Fortunately, the result was not the kind of "hot war" situation seen in 1914 and 1945, but a Cold War which gradually wore down the USSR.

Since the collapse of the USSR and the fall of the Berlin Wall, the US has been the supreme military power by a wide margin. They spend just 4% of their GDP on their military, but this expenditure ($651 trillion) is double what is spent by the entirety of the EU ($312 trillion) and almost ten times what is spent by their nearest rival, China ($70 trillion).

Should we be complacent?

I believe that the biggest threat to world peace is the rise of China. Their economy is growing much faster than the US and although this growth has slowed during the economic downturn, they have avoided recession and look set to grow by 6-7% in 2009, compared to a predicted contraction of 3.1% in the United States.

Even so. China are still a long way behind, and if we factor in the military budget of other NATO members, who would presumably ally themselves with the US in any new Cold War situation. I remain optimistic that we can look forward to peace for the foreseeable future.

Is happiness desirable?

Hedonism

Many people believe that striving for happiness is a laudable aim. 

When people are in dire straights they are advised to "put on a brave face" and try thier best to be happy.

This philosophy of hedonism has its roots, like many things, in Greek Philosophy, with it's earliest proponent being Democritus, who argued that joy was the ultimate aim in life, and that sorrow was to be avoided.

Acording to this theory we should at any particular moment just do whatever makes us happy, and avoid things which make us sad or sorrowful.

Utilitarianism

This idea was revived by Jeremy Bentham in the 18th Century, who argued that life could be divided into the basic emotions of pleasure and pain, and that whilst pain was to be avoided, pleasure was the sole good in life. He therefore argued for the "greatest good to the greatest number." 

This philosophy, which became known as Utilitarianism, was expounded upon by John Stuart Mill who qualified the original philosophy by arguing that not all forms of happiness are morally neutral and that there are in fact "higher pleasures" and "lower pleasures." In the language of Mill:

"It is better to be a human dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied"

In other words: It is not good enough to just be happy. Your happiness needs to be of a certain quality, or directed towards a higher end. According to Mill: It is not good enough to simply follow our inclinations from one moment to the next. Because whlst we may think that we know our own good. We can only possibly know in hindsight whether it was better for us to induce positive  emotion with drugs (a lower pleasure) or with opera (ahigher pleasure), for instance.

Epicurius

Which brings us back to the many Greek responses to the idea of hedonism. Many Greeks belived that there were higher ends, which superceded our our immediate need for gratification and happiness.

This idea finds its most fruitful expression in the work of Epicurus, who argued that what matters is whether your life as a whole is a good one. He belived that what matters is eudomonia (a Greek word which can be loosely translated as "good spirit"), which refers to some inexplicable factor which reaches beyond transitory feelings and towards a more complete conception of what it means to live a good life, and can only be assessed over the entire course of a human life.

Many Greek theories preferred to look at life like this. These theories, rather than focussing on the consequences of our actions at any moment (in their production of pleasure and pain for instance), look at what it means to be human and what the end (telos) of our lives is, when taken as a whole.

According to these teleological theories, our lives should be measued according to whether, taken as a whole, they are good or virtuous.

Conclusion

And so... In answer to the question I proposed above: Is happiness desirable?

My answer is yes! It is! But what I mean by happiness is what Epicuriucs meant:

He lived a life in a commune, living with close friends and surviving on what nature provided, and he wanted his life to be judged by people in its totality - and whilst I'm not about to become a hippy. I can appreciate his philosophy much better than our modern conceptions of happiness: which lead to consumerism, casual sex and drunken debauchery.

When people look back at my life they will look at my life as a whole, because that is what human beings do. Whether I am happy or sad from one moment to the next is immatterial, as long as I continue with my goals in life, despite what fortune throws at me.

From my favourite poem:

"It matters not how strait the gate,

How charged with punishments the scroll,

I am the Captain of my fate,

I am the master of my soul."

- William Ernest Henley

Big Brother society... 42 days too many?

Imagine a world in which 4.2 million cameras watch our every move. In which the DNA of 4.5 million citizens is held in the world's largest database. In which we can not express our opinions in case it causes offense to those around us. In which we are forced to carry around ID cards to prove our rights; And, in which a suspicion of guilt can lead to our arbitrary arrest and detention for 42 days, without trial.

This sounds like a scene from Orwell, and yet it is in fact a portrait of modern Britain under New Labour... and yet it is not this per se which causes me to be angry. Rather, it is the attitude of the British public: who have allowed themselves to be slowly brought to a point where our liberties are in serious peril!

The latest in a string of illiberal decisions by this government was pushed through the Commons on Wednesday last, in a vote which was so tight it relied of the votes of a small band of Irish MPs to win the day. The new bill will allow British citizens to be locked up without trial for 6 weeks (42 days) and it represents, in my view an appalling attack on our fundamental liberty to go about our lives without fear of arbitrary arrest and detention. It is a suspension of heabus corpus, and reverses the rights that we have enjoyed since the signing of Magna Carta almost 800 years ago.

It's supporters claim that it is a necessary measure to ensure our security in an age of terrorism, and 69% of the British public are convinced that “in exceptional circumstances” we do need powers like these.

We are asked by supporters of the bill to think back to the terrorist attacks of 9/11 in New York and 7/7 in London and imagine that these attacks could have been stopped if only we had been more proactive. But are we really deluded enough to believe that there is anything that could have stopped so determined an enemy; and what exactly are we defending if we are so willing to throw away our fundamental liberties?

A further reason given in favour of this law is that it is that it is only “terrorists” that have anything to fear, and not law-abiding citizens. But they would think that wouldn't they? Because it's not their brothers, sisters, sons and daughters who will be targeted by this legislation! The reality is that this kind of law does not affect the vast majority of the population because in modern Britain potential terrorist attacks now come almost exclusively from a small indigenous Muslim population: A fact which should make this legislation even more disturbing!

As a general rule any law which overtly or covertly singles out a minority group for special treatment under the law, goes against everything our legal system has been based on for centuries and everything it should be based on. In fact, it is exactly the kind of legislation which leads us down a path towards totalitarianism, which is something Winston Churchill understood better than anyone:

“The power of the Executive to cast a man into prison without formulating any charge known to the law, and particularly to deny him the judgement of his peers, is in the highest degree odious and is the foundation of all totalitarian government whether Nazi or Communist.”

- Winston Churchill

The entire debate in this country has focused on how many days are “enough” to ensure our safety and yet surely, the real question we should be asking is should we be doing this at all? The answer can be found by completing the Churchill quotation above:

"...Nothing is more abhorrent than to imprison a person or keep him in prison because he is unpopular. This is really the test of civilization."

Death

I've been reading lots of books recently, but this one is certainly special, and deserves a mention. It starts with the brutal rape and murder of a 14 year old girl from her perspective, and tells the story of her journey in heaven to come to terms with her own death...

I'm only on Chapter 6 at the moment, but I'm hooked!

God and complexity

I'm perplexed.

I find the argument made by Dawkins in his book "The Selfish Gene" compelling. He argues that there are two possible states of play for the start of the universe:

EITHER

1.) An intelligent god came into existence and then created unthinking matter and intelligent life

OR

2.) A universe of unthinking matter came into existence and intelligent live evolved naturally

The argument is simple:

Argument (2), let's call it: the "big bang hypothesis" is much less complex and therefore far more probable than Argument 1 (1), which we will call: "the god hypothesis." This is because "the god hypothesis" posits god's intelligence at the start and thus increases the complexity of the problem, by adding a perfectly designed and intelligent designer to an already complex situation.

But is God necessarily more complex than the material universe?

The counter-argument posited by those who have faith is that god does not need to be complex because God exists outside of the material realm. This means that he is not materially complex in the same way that the universe is.

At this point my head begins to hurt, because personally I don't find the argument compelling for the following reasons:

1.) We live in the material world. It is all we know! Therefore, calling god "immaterial" is extricating him from our understanding of complexity and abstracting him from any comparison with the material complexity of the universe.

2.) Intelligence is an extra layer of complexity. Although it is possible to argue that the "knowledge" inbuilt in the "design" of the universe is akin to intelligence. But surely a designer would have to be more complex than his design? Wouldn't he?

The remaining solution, is, I feel, to water down the complexity of god:

To counter the problem of "material complexity" our God would have to be immaterial (if we can accept such notions).

Additionally, to sidestep the problem of intelligence, our god would, at the very least, be of an intelligence akin to the "inbuilt" knowledge of the universe. For instance: Our god's function would be limited to starting the big bang and adjusting the parameters of the universe. This would make him a far cry from the Old Testament God of omniscience, omnipotence and omnipresence.

So in order to allow God, according to this argument, we have to accept that our version of god is limited... But the problem we then face is that perhaps our new conception of "god" is so watered down as to be a mere philosophical shadow. A semantic explanatory presence replacing the hole where an explanation of our beginnings would fit.

Is there room for spirituality in this conception? Is there more room for a god than I allow?

I would like to think that there is.

As I'm sure most atheists would admit: I hope I'm very wrong.

The Stock Market Collapse

This crisis in the Stock Market should be a serious worry to us all. There was a good peice in the Telegraph this morning, about the possibility of a major US bank defaulting, and another in the Guardian suggesting that we might be about to see a base rate cut by the Fed.

What should worry us about this is not the possibility of a bank defaulting, but the possibility that by pumping more liquidity into the market we will be supporting the reckless economic behaviour which has led to this crisis and make a future economic collapse worse.

"But what if the Fed cut rates because it knows something the markets don't? What if a major US bank really is in trouble? Even if America now implements the "nuclear option" of a sudden cut in the "Fed funds" rate - the equivalent of our base rate - that may not help very much. Hundreds of US mortgage lenders, thousands of house-builders, and millions of Americans have already gone bust."

Alone

Alone... The word is life endured and known.
It is the stillness where our spirits walk
And all but inmost faith is overthrown.

Siegfried Sassoon

Chavs: The new underclass?

I've just been reading a few articles about the delightfully middle class slang word used to describe the "white trash" of England and I find it all quite amusing. In an article in The Guardian for instance; John Harris quotes Simon Heffer to caricature the attitude of Middle England:

"Our underclass has been allowed to get out of control ... They and their children regard school as optional. Drug dealing and theft are the main careers, nicely supplementing the old staple of benefit fraud."

...and goes on to argue that such talk is elitist nonsense which unfairly writes people off without giving them a chance. (Well, if you do insist on throwing up a straw man John!)
A similar line is taken by Julie Burchill of The Times, who goes on to suggest, with much middle class, guilt-ridden hand-wringing that calling people "chavs" is akin to racism:

"Whenever I stand up for chavs — on the basis that the white indigenous English working-class is now the one group you can insult without feeling the breath of the Commission for Racial Equality on your neck, which makes it pretty damn cowardly apart from being what I call “social racism"— there will always be some joker who will bend over backwards to reassure me that not ALL the working class are wasters..."

It is at this point that my blood (quite understandably I think) starts to boil.

Frankly, I don't think either of these columnists really have the faintest idea about what they are describing. The "chav" may be something approaching a caricature, but it has come to be synonymous with the underclass of Britain; many of whom who seem to wear it like a badge of honour. These people are not "working class," and to describe them as such is an insult to hard-working people.

No, these people populate the dole queues, benefit offices, STD clinics and street corners of our fair nation, and though we may laugh at the caricature. It is actually a symptom of a class who totally lack aspiration because they were born, not just into poverty, but moral despair.

The poverty of old had a cure. Namely, a rigid morality, which gave a pang of guilt when you did something wrong and which spurred you on to try harder. A morality embedded in a society where mutual concern was predominant and where "keeping up with the Jonses" was somewhat less to do with the size of the Satelite dish on your council house and somewhat more to do with decency and getting on in life.

I'm a libertarian, and I think that that liberty has a price, and that this is one of them. It is a sympton without cure, and the consequences of this are grim. Feel free to disagree.

Alcoholism

My name is James, and I am not an alcoholic.

My mother had been sober for two years. She went into hospital with a slipped disk and she never came out. The doctor's didn't say so, but we knew it was the drink that had done it.

My brother was 24. He was found a year later on the floor of his bedroom. He never did deal with my mother's death.

A Spot of Bother

I'm reading A Spot of Bother by Mark Haddon at the moment, and it is brilliant. Extremely funny and strikes so many chords. The following passage really made me miss my boyfriend though:

"He wanted to strangle Tony sometimes. The poor house-training mostly. Then he'd catch sight of him across a room and see those long legs and that brawny, farmboy amble and feel exactly what he felt the first time . Something in the pit of his stomach, almost painful, the need to be held by this man. And no one else could make him feel like that."

Civil Partnership: Is it enough?

"The homophobia of the ban on same-sex marriage is now compounded by the heterophobia of the ban on opposite-sex civil partnerships. It's official: one law for heterosexuals and another for lesbians and gays. Since when have two wrongs made a right? Imagine the outcry if the government prohibited black people from getting married, and established a separate partnership register for non-whites. It would be condemned as racism and apartheid." - Peter Tatchel, 19th Decemer, 2005

I understand what Tatchel is saying. It is a strong point and it is important. But it is hardly something for me to get excited about. After all, the civil partnership legislation brought into force in 2005 is legally equivalent to marriage and it is even called marriage by large sections of the press and population.

Indeed, just about the only distinction (other than semantics) I could find is that whilst marriage has to be a public ceremony, civil partnerships can be conducted in private like any other legal arrangement.

A lot of gay people, it seems, do not accept my assessment. They feel that despite legal equality civil partnerships have a second-class status in the eyes of the public. Two such people are Susan Wilkinson and Celia Kitzinger, a lesbian couple who fought in the High Court to have their Canadian marriage recognised in the UK:

"I do not wish my relationship with Celia to be recognised in this way because we are legally married and it is simply not acceptable to be asked to pretend that this marriage is a civil partnership. While marriage remains open to heterosexual couples only, offering the "consolation prize" of a civil partnership to lesbians and gay men is offensive and demeaning. Marriage is our society's fundamental social institution for recognising the couple relationship and access to this institution is an equal rights issue. To deny some people access to marriage on the basis of their sexual orientation is fundamentally unjust, just as it would be to do so on the basis of their race, ethnicity, and nationality, religion, or political beliefs."

Whilst I do genuinely see the point of this "symbolic" difference, I think that they are taking the argument a bit far and I certainly won't be getting off my backside to protest about the symbolism of the "semantics" of equality.

In this matter, the semantics are already changing. People are using the language of marriage despite what legislation says. Even the BBC, with its strict editorial policy, is using the language of marriage, although it seems they have been told to put these heterosexual references in "scare quotes" for the time being.

It is my view that it is in the hearts and minds of the British people that this debate will be won, and not in a high court ruling, and gay activists should have a little patience and trust in this before making us all seem to be throwing the baby out with the bathwater.

Reagonomics and the Laffer Curve: Can you cut taxes and increase revenue?

According to legend the Laffer Curve originated in a dinner meeting and was originally drawn on the back of a napkin.

The Laffer Curve explained
The Laffer curve operates on two central premises:

• At a 0% tax rate there is no tax revenue.

• At a 100% tax rate nobody will be willing to give the government any money, because they will have nothing for themselves. Instead they will hide it, send it overseas or hire expensive accountants to make it disappear, or, alternatively, Nobody will bother working for money anymore and the entire economic system will collapse.
  

The important point to note it that somewhere in the middle there must be an optimum tax rate which is not 100%, and so in some circumstances lowering taxes will actually (counter-intuitively) raise revenues. This is "Reagonomics."

Reagonomics: Does it work?
According to Stephen Moore in the Wall Street Journal it does:

"In the 1980s, President Ronald Reagan chopped the highest personal income tax rate from the confiscatory 70% rate that he inherited when he entered office to 28% when he left office and the resulting economic burst caused federal tax receipts to almost precisely double: from $517 billion to $1,032 billion."

The alternative proposition, is that moments like this only occur when marginal tax rates are very high and that a "Laffer effect" will not be seen in present conditions, because current Marginal tax rates are low, and are thus likely lie on the upward sloping part of the Laffer curve. Indeed, this is exactly what is oserved in a study by Autan Goolsbee (1999):

"The notion that governments could raise more money by cutting rates is, indeed, a glorious idea. .. Unfortunately for all of us, the data from the historical record suggest that it is unlikely to be true at anything like today’s marginal tax rates. It seems that, for now at least, we will have to keep paying for our tax cuts the old fashioned way."

Do we still have a reason to cut tax?
We do not have to rely on Reagonomics to support cutting taxes. Taxes are a burden on individual citizens and they prevent people using thier own money as they see fit. Additionally, taxation and government spending is wasteful and can creates distortions in the econommy.

It is for this reason, and not because of a graph drawn on a napkin that I support lower taxes...

Can science solve Global Warming?

According to a nobel prize winning scientist, the answer is possibly yes!

Paul Crutzen, a Dutch atmospheric chemist, proposes that the answer to the solution is to pump Sulphur Dioxide into the stratosphere in order to increase the reflection of sunlight away from the earth.

This solution, would cost an estimated 25 to 50 billion dollars per year and has the advantage of being easily adjustable, since Sulpher particles will only remain in the atmosphere for 2 years. It would however increase the problem of Acid rain.

Crutzen maintains that this potential solution should only be used as an emergency measure, but even so, an article in the Independent suggested that his solution:

"...is so controversial that some scientists opposed its publication in the peer-reviewed scientific press, fearing that it may encourage the view that it is easier to treat the symptoms rather than the causes of climate change." - Independent, July 31st 2006

...and on a related note. It has come to my attention that Junkscience.com have launched a competition that will award $100,000 to anyone who can prove that human action is causing "catastrophic global warming."

Any takers?

Giuliani: anti Palestinian state

If you thought Bush was right-wing on foreign policy, you should take a look at what leading Republican candidate, Rudy Giuliani had to say in this week's Foreign Affairs magazine.

The most notable departure from US policy came with the following remark about Palestinian statehood:

"It is not in the interest of the United States, at a time when it is being threatened by Islamist terrorists, to assist the creation of another state that will support terrorism. Palestinian statehood will have to be earned through sustained good governance, a clear commitment to fighting terrorism, and a willingness to live in peace with Israel. America's commitment to Israel's security is a permanent feature of our foreign policy."

He is also believes a withdrawal from Iraq would be "worse" than pulling out of Vietnam, he supports "Star Wars" (SDI) and he is in favour of extending the powers of the Patriot Act.

US elections '08: The Gay issue

Gay rights in the US are shambolic.

There is no federal recognition of legal equality in the workplace for homosexuals, the Defence of Marriage Act attempts to prohibit gay love and the religious right persist in a bigoted campaign to keep the US in the Middle Ages in the arena of equality legislation for gay people.

...and yet, it remains an issue on which the leading Democratic candidates must play politics, after all 77% of the gay community already vote Democrat, and their vote only accounts for 4% of the US population.

For instance, leading Democrat candidate, Hilary Clinton, who tops all of the latest polls has said that the morality of homosexuality is for "others to conclude," whilst Barack Obama gave the following response when asked about gays in the military for a third time:

“I don’t think that homosexuals are immoral any more than I think heterosexuals are immoral … I think that people are people and to categorize one group of folks based on their sexual orientation that way I think is wrong.”

Having said this, every Democratic candidate has come out in support of civil partnership (which is marriage in everything but name) and the leading Republican candidate, Rudy Giuiliani, has a strong record of supporting gay rights in New York, he is in favour of gay civil partnerships and he lived with a gay couple when he divorced his wife in 2000. Facts, which he would probably like to be less well known, considering the political inclinations of his Republican base.

So, the initial indications are good for gay rights, but gay people in America may want to listen very carefully before blindly falling in with the Democrats on this issue.

A-level grade inflation

The leader in today's Telegraph confirms what many already suspected to be the case. Namely, that A-levels are getting easier. The pass rate has risen for the 25th year in a row, and according to a study conducted by the University Of Durham:

"...students of the same ability are scoring a grade higher now than they were 10 years ago, two grades higher than they were 20 years ago."

The government's solution (as of 2010) is to introduce a new A* grade to the A-level system so the Universities and employers can single out the best and brightest.

To me, this seems absurd.

Surely the real solution is to make A-levels tougher and to ensure that only a pre-determined proportion of pupils can achieve the specified grades.

Hottest year on record... 1934?

It seems that an ameteur meteorologist has managed to convince NASA that it was wrong about which year is the hottest on record in the US. Basically, they made an error, and whilst the fundamental climate science remains unaffected, it does mean that the hottest year on record in the US is now 1934 and not 1998 as previously stated:

Telegraph: Nasa climate change error spotted by blogger

In the climate debate, polemic and spin matter, and this is a significant shift. I don't think that we are about to see an end to the "end of the world" type stories that permeate the media, but it is interesting that this readjustment has recieved little media attention.