Notes from the Panopticon

Yet more moral hazards

In any country there must be people who have to die. They are the sacrifices any nation has to make to achieve law and order.~ Idi Amin Dada (mid-1920-2003)

A reply to the latest comments by threeportdrift and Peter Horne (see previous post).

Economic and moral hazard

There is indeed an economic hazard: if the authorities allow a failing bank to go under, confidence in the banking system might collapse, leading to the kind of financial crisis that the world suffered after 1929. And this is the moral hazard: by seeking to avoid the economic hazard, the authorities create a different one; banks will not be so careful in the future, so there is a risk of further failures. They will not be constrained by the need to look after their future well-being because they will expect the authorities to do so. So there is a trade-off. The authorities, in the case of Northern Rock, chose to avoid the economic hazard and no doubt they will bring in a raft of regulations to try to minimise the moral hazard they have created. "Moral hazard" is, perhaps, a misnomer in this case because the real effect is a shift in the nature of self-interest which must be the core of any business motivation. The important thing is that the trade-off is recognised for what it is, and that the authorities make a clearly thought-out decision based on the balance of dangers.

Help the poor

You are quite right to point out that this is similar to an argument that can be – and often is – made against providing financial support to the poor. If you give money to the poor, they will be discouraged from seeking gainful employment, others will lose their incentive to work and more people will choose to live on welfare. This is indeed a "moral hazard".

You also point out that the motive for supporting the poor is an ethical one (we don't like to see others suffer), while the motive for supporting a failing bank is an economic one (a failing bank could precipitate the collapse of the financial system, leaving the economy and all its participants devastated and unable to recover).

You don't say whether you think that the ethical motive is worth risking the moral hazard – a scrounger's charter as right-wingers would say. I suspect that you do and, if you do, I agree with you. But I would be cautious about how the poor are defined and how they should be helped. Without going into detail, people who are poor because they are unable to work should be first in the queue and the method by which their incapacity is assessed should be simple and clear, and should not be humiliating. (I have long thought that complaints about means tests are misplaced since everyone who works has to fill in a tax form, which itself is a means test. But listening to the debate about incapacity payments, I realised that the complexity of the rules and the humiliation associated with the tests are the real problem)

Falling on hard times

I also believe that people who have fallen on hard times should be supported financially and helped to recover. And the nature of the support should be such that they are given a strong incentive to go back to work (the poverty trap is an iniquitous moral hazard that has to be removed). And so on...

Taking advantage

To summarise, I believe that, when acting to solve a particular economic or ethical problem, the benefits should be weighed against the dangers of moral hazard. There is an unintended, but often predictable, danger that people adapt their behaviour to take advantage of the open hand of the state. And in framing its benevolence, there is always a risk that the state can find itself with a large and never-ending obligation.

Respect for the law

Now to your second point about loss of respect for the law. This goes to the heart of my point about moral hazard. The reason this issue is so important is that the law must earn respect, it should not be taken for granted. It is wrong that governments, like those of Robert Mugabe get away with grave misdeeds just because they are in charge of making the laws. It is iniquitous that a monster like Idi Amin was allowed to live out his life in comfortable exile just because he was a former leader of state. And in a different league, it is wrong that the British government should hide behind the doctrine of Crown immunity.

When I drafted my reply to your first comments, I tried to set out a list of necessary conditions for any law to be based on a firm foundation. It was too tough a task for a short note so I gave up. (It did, however, bear some relation to the list of criteria which Peter Horne cited.)Perhaps I should have persisted.

Bringing law into disrepute

My first criterion is that laws should not discriminate against any significant minority of the population. And I think all the examples that you cite are cases where efforts were made, not only to discriminate against minorities, but also against majorities. So the laws that so troubled Ghandi and the other notable civil rights protestors you mention would have fallen at the first hurdle. Your examples illustrate my point; they do not undermine it. If a government tries to do something by passing laws which brings the law into disrepute, it runs the risk of undermining respect for the law and opens the door to legitimate protest. This, as we saw in Northern Ireland, can lead to serious and fatal civil unrest.

Euthanasia

Other areas where there is "civil disobedience" on a lesser scale include the laws against euthanasia. The objection to these laws is widespread. Institutions which practice it are tolerated but any individual who participates in the act risks prosecution and incarceration. But this depends on the whim of the authorities, not a happy situation in an open society.

Sailing close to the wind

I do not agree with your last point about the effects on moral standards of moral turpitude of some of those in the public eye and those who feel they can circumvent the law. People will question their moral compass. It is human nature to sail close to the wind, but a complex and poorly-enforced legal structure has the paradoxical effect of creating a race between law-makers and the rest of us to find or to plug the loopholes in the law. A simple legal structure which reflects a morality which most of the population accepts will result in a decent and law-abiding society.

Law and religion

As for the escape to religion and fundamentalism, I believe that the horrors of Sharia law, the burning of heretics, the unofficial imprisonment of young women in the Magdalen Laundries of Ireland, and the social mayhem created by missionaries in the nineteenth century all speak for themselves. Legal structures based on religious conviction have repeatedly shown themselves to be fatally flawed. The fact that there is now an upsurge in evangelical movements is itself a demonstration of the way in which society is losing moral cohesion. And this, I believe, stems from governments legislating without giving full consideration to the moral hazards which their laws will generate.

Peter Horne and Leslie Stephen

In reply to Peter Horne's comment, I would agree that all human action has an impact on others, but the degree to which it affects others can vary considerably.

I agree that moral issues should be considered when deciding whether to curtail the liberty of individuals. It is the complexity of deciding what is worth doing, and whether the law is an appropriate mechanism for achieving any given aim, which makes me think we should err on the side of caution. My object has been to draw attention to the way the flood of laws introduced by the present government has made us all a little bit nastier. And that includes government ministers, political parties, civil servants and other administrators who, instead of focusing on serving society, duck and dive to gain advantage. One human quality that has vanished because of this over-administration is compassion. Automatic penalties without the intervention of a human being are becoming the norm.

Authority and autonomy

Swinging the emphasis in defining what laws are acceptable, from preventing harm to others towards which restraints are injurious, makes – to my mind – little difference. The point is that, in both cases, there is an authority which claims to know best what is good for others. And I deny that this is ever true (except for children or persons who are seriously lacking in mental or moral capacity). The key to good law lies in the three tests you mention, in research to discover what measures will be effective, and in open discussion and debate. With the vast number of laws that have recently been passed, it has obviously been impossible to carry out this process. And we are all paying the price.

More moral hazards: a reply to threeportdrift’s comment

The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant. ~ John Stuart Mill (1806 –1873)

From the start I hoped that this blog would provide a forum for discussion. It is hard thinking in a vacuum and I am grateful to threeportdrift for making a number of very interesting points. (see original article and threeportdrift's comment)

What I mean by moral hazard

It seems I failed to make clear exactly what I
meant by moral hazard so I'll have another go. The moral hazard faced when failing banks are bailed out is that the fear of failure is dented and therefore other banks will behave irresponsibly in the future because they believe that they too will be rescued if they gamble and lose.

The parallel in law-making is that, if laws are made and widely ignored, or if they are poorly or unevenly enforced, then respect for the law is eroded. A society without respect for the law is in danger of losing moral cohesion. This is the hazard it faces. It is parallel to the financial moral hazard: if people see others getting away with irresponsible behaviour, they will tend to abandon their own moral compass and behave less responsibly too. It also happens when there are too many laws which citizens find silly, unfair or unacceptable, or which they do not understand. In all these cases, there is a danger that society will lose faith in the institutions which uphold justice.

That is the simple part of the argument. The harder part is deciding when it is reasonable and realistic for society to enact laws to persuade people to pull in the same moral direction, and when it is justified for parts of the population to stand up against laws that are unfair or unjust. And it is here that threeportdrift seeks to take issue with the examples I used to make my point.

Loss of moral faith

My fear is this. The huge number of laws introduced by the Labour government, and its inconsistency in enforcing its policies, are indeed giving rise to a loss of moral faith.

Threeportdrift's last point ("ordinary oiks get off time and time again with warnings even whilst their behaviour gets more and more destructive"), far from undermining my point, actually supports it. I see it like this. The "oiks" see the Kate Mosses, the Elton Johns and the Jackie Smiths of this world getting away with breaking the law and think to themselves "why should I bother?" The reason they should bother is that they don't have the financial and social resources to slip through the legal net. So they get caught – in numbers that the legal system finds difficult to cope with. And so the justice system has a problem which it handles by reducing prosecutions for minor offences. This, in turn, reinforces the idea that the law is there to be ignored. And small crimes turn to bigger ones. (more here)

But let us not forget that being let off with a warning leaves an indelible stain. It makes it hard to reintegrate into society and, in particular, to make a legal living. So an underclass is generated that does not fully integrate into society. Organised crime is the main beneficiary, with society providing them with a work force made up of young men and women with no hope and with nothing to lose. (more here)

We must also remember that the Jackie Smiths and Kate Mosses and Elton Johns provide(d) these gangs with a market for their products, just as the celebrities of the day provided the Mafia with a market for illegal booze when the US government introduced prohibition.

Picking and choosing

Drug laws, I believe, generate the largest and most easily identifiable moral hazard. But respect for the law and the government is also eroded in other ways. If people feel able to pick and choose which laws to obey (speed limits outside schools good; roadworks on the M4 in the early morning bad) is exactly the kind of moral hazard that I am concerned about. It would be much better for the government to bring in fewer laws, to think harder about their implications, and to do its best to ensure that all parts of society are have an incentive to pull together and respect the law.

Epidemic hazard

A final point. Society's contempt for the government and its institutions also shows itself outside the area of the law. When a rogue scientist (completely spuriously) claimed that the MMR vaccine (more here) was the cause of autism and some types of bowel disease in young children, the government was unable to convince the public – in particular the parents of young children – that there was no danger. The government was paying the price for failing to maintain the trust of society, the effect of perceived lies and double-talk, as well as frustration at government efforts to micro-manage people's lives. So when an opportunity arose to make a protest, the population voted with its feet. The result was a catastrophic collapse in the number of children protected against measles, mumps and rubella, and a population vulnerable to an epidemic. Lies and obfuscation also carry a moral hazard.

I believe the government should treat us as citizens, not as subjects. The task is not easy because it must reconcile different needs and expectations in its policies and law-making. But its watchword should be "less is more" (see JS Mill quotation at the top of the page). Fewer laws mean fewer risks of moral hazard. And above all, everyone – and that includes the government and its ministers – should be treated equally.

Thank you, threeportdrift , for giving me the opportunity to clarify my thinking. I hope that I have made my point better now. I am always keen to hear from readers.

Picture credits:

www.badscience.net/?p=457

http://sobnation.wordpress.com/

The political animal – right or wrong

"I have never in my life learned anything from any man who agreed with me." ~ Dudley Field Malone (1882 – 1950)

At last! Controversy! Thank you Common Sense for replying to my post, and especially for disagreeing with me. It forces me to think some more and take stock of my ideas. One day, no doubt, I shall be presented with an argument that makes me change my mind and I look forward to that. But not today. Here is the comment in full:

I seem to think that you bristle when you feel that bloggers are dismissed out of hand as a breed. Yet you lump all politicians together and throw them into the fiery furnace. Did you never hear of a politician you had any time for? Nelson Mandela? Franklin Roosevelt? Willi Brandt? Nye Bevan? Itzhak Rabin? By and large, we get the politicians we deserve, the ones who, like the poor immigrants who service the public sector, are prepared to do the dirty jobs that we are too delicate to face – such as taking responsibility for the dull business of keeping the national show on the road and, sometimes, making the tough decisions that people who don't have to think much about it resent in a knee-jerk way. If you don't like it, put yourself up for public office. Do better. Otherwise you are merely an anarchist or (worse) a blogger whistling in the wind. Oh and by the way, I didn't sign your petition because I thought there was some merit in the argument about health and safety. If the flowerbed tender had been hit by a driver who hadn't seen her, that driver would have been entitled to feel aggrieved and that it was her own fault. The authorities have to make decisions that affect everyone. Just because a local busybody feels her freedom has been curtailed doesn't mean that the authorities are fascists or indeed that they are wrong to cleave to their decision. If you think that's officialdom gone mad, you must have spent most of your life avoiding organisations of every kind.

 

Smaller discussion first.

The wearing of a peaked cap, real or metaphorical, does not stop an individual from being a busybody. Some of the

restrictions imposed by health and safety officers are silly and need to be scrutinised. So do many of the restrictions placed on everyday life by officials making their own interpretations of enabling legislation.

There is a growing body of academic evidence which supports the view that a person stops behaving normally when placed in a position of authority. This explains atrocities like Abu Graib; ordinary decent people feel that their official position allows them to treat others without considering their humanity. On a less vicious scale, the phenomenon happens everywhere and every day in the enforcement of petty regulations by the bureaucratic process.

Iraqi translators who worked for the British army are being refused asylum when their lives are under threat and many have already been killed. This is a nasty but bang up-to-date example of how the moral compass can be lost by those who work in an official capacity. Power goes to their heads.

I shall be writing more about Philip Zimbardo and his Stamford Prison Experiment, as well as his own review – 36 years on – of this groundbreaking work (in his book The Lucifer Effect). This provides incontrovertible proof that the phenomenon exists and is universal. What Zimbardo has to say about how the experiment, and his part in it as designer and controller, affected his life should make us all sit up and take notice. His insights offer hope and understanding. There is a real chance that – if we wanted to – we could devise strategies for controlling the more beastly aspects of human social behaviour.

If you read my text carefully, you will see that I rarely say that bureaucratic actions should be stopped, simply that they should be thought through better, that decision processes should be transparent, and that there should be simple procedures to achieve redress.

And that brings me to the bigger issue: my attitude to politicians. I get a lot of flack (you are not the first to complain), so I revisit my thinking regularly and I agree that at one level I must be wrong. There must indeed be people who go into politics for good reasons.

I also have to admit that the fire which fuels my distrust has subsided with the departure of Tony Blair and his familiar, Alistair Campbell. I see Tony Blair as a political version of Jordan. He bemused people with his charisma just as she bemused people with her chest. Whatever one thinks of Gordon Brown and his policies, he cannot be accused of being vacuous or of not being a serious thinker. Whether or not he is a conviction politician does not matter. He is competent, he has a track record, and when he sets himself a task, he usually gets it done with limited negative fall-out. The fact that he believes the constitution should change in a direction that I would like is an added extra (although not far enough, I hasten to add.)

One of the aims of my blog is to examine ways in which democracy, a fragile system, can be strengthened so that incompetents like Blair and his sidekick can be stopped before they do too much harm. And one of my themes is that the separation of powers, which is at the heart of all serious democratic models of government, should be preserved and extended. No-one has a monopoly on wisdom and the spreading about of ultimate authority is an indispensible safeguard.

An aspect of this, covered in "Cheerleaders", is that MPs should have a separate role from the government executive. They should represent their constituents (i.e. act on their behalf) more seriously, keeping a watchful eye on what the government is doing, instead of blindly cheering them on or constantly attempting to put a spoke in the wheel depending on their party affiliations.

Now back to my problem with politicians. Common Sense provided a helpful parallel between politicians and immigrant workers. I should like to offer another. But I must put up a big warning sign here. It is a powerful simile to illustrate what I mean, no more and no less, and you must not take it any further than that.

If you want to find a concentration of paedophiles, you might look for them at work in children's homes or in other places where children are gathered together away from the supervision of their parents. This does not – of course – mean that everyone who works in these places is a paedophile, or even that a high proportion of them are. But these places are magnets for people with paedophile tendencies.

Now, if you want to find a concentration of control freaks – people who enjoy interfering in other people's lives and telling them what to do – you might well look at the political classes and the places where they gather. As with paedophiles, this does not mean that everyone there is a control freak, but the political process is a magnet for people with controlling ("I know best") tendencies.

I would further argue that, unlike working in a children's home where an ordinary person stays ordinary, working in politics engenders an intoxication with power in all but the strongest.

So my parallel is between uninvited and inappropriate fiddling with private parts, and uninvited and inappropriate fiddling with private lives (if you see what I mean).

Personally, I find power distasteful. I enjoy my life and I believe it is up to others to enjoy theirs with minimal interference if they harm no one but themselves. So the option of seeking office is anathema to me. To go back to Common Sense's parallel, I would prefer to clean lavatories with the immigrants.

Late in life, I became interested in thinking through my ideas about the political world. And I now realize how much my thinking has been influenced by Karl Popper, whom I have not read for at least 35 years. But his ideas have stayed with me. Openness and opportunity for all is what I would like to see and, for much of my life, I have watched it grow in fits and starts. I grieved when I saw it crushed underfoot by unthinking men such as George W. Bush and Tony Blair.

You can link to Common Sense here.

Philip Zimbardo has a website here.

Jeremy Paxman has written a fascinating analysis of the inner working of the politician, body and soul.

More information about the Iraqi translator asylum issue here.

The link to my article Cheerleaders is here.