Sunday, January 29, 2012

Why America executes innocent people

I wasn't sure whether to go with the US legal system or paranoia about those evil dirty foreigners*. In the end, I have decided to talk about both.

This story came to my attention a few weeks ago. A 15 year old American girl was mistakenly identified as an illegal immigrant in the US and deported to Colombia. She went through the whole court process maintaining a completely different identity to her own. No one seemed to notice. And it didn't matter anyway. Once a mistake has been made in court, you have to follow the procedure as if it were true. So you blindly carry on as if nothing has happened and, in this case, you deport a girl (who, it seems, happily lived in Bogatà for a few months).

First for the paranoia over foreigners. And where better to start than Alabama's would-be-amusing-if-it-were-not-so-serious anti-immigration law. This wonderful article in the Economist talks about a visiting German Mercedes-Benz director who ended up in prison because of it (maybe they should close down the factory employing all those nice legal Alabamans). And the crops rotting in the field because there is no one to harvest them. And the rising costs companies are facing due to lack of workers. And the lower tax collections due to the consequent falls in productivity and output. And the declines in consumer spending. And the loss of legal citizens who fear their lives being made more difficult. After all, if executive directors who employ so many Alabamans are treated like that, what hope for everyone else?

Now for the executions part. We all love a good execution, don't we? And one day, it might be you or your friend! What a great party we can all have! I learnt a lot from one of my favourite books, Executed on a Technicality by David Dow, a death penalty lawer in Texas. One of my favourite parts are when I learnt that proof of innocent is not actually sufficient to prevent an execution. Because once a lower court has accepted some often emotional, racist, uninformed, corrupt 'fact' a higher court cannot overturn it unless there were either procedural errors or else it was completely impossible for a jury (ahem) to believe it, and that 'completely impossible' bar is set rather high. Of course, executing innocent people is not a problem - being human, we can't get it right all of the time. It is to be expected and we do accept the possibility of error in all punishments. But what I love is that we can know something for sure but in order to be more fair and systematic we have set up a system with rules that cannot be broken. We are unable to introduce common sense. And that is why the deportation of this girl reminded me so much of numerous executions I have read about. It is a lottery at the start combined with strictly following the rules in place. Beautiful stuff.

*I am in Vienna just now and yesterday struggled to communicate in German - the dirty, filthy foreigner that I am. I managed in the end though my incredibly bad German.

Who is more trustworthy: atheists or religious?

Trust is increasingly being researched in economics as an important oil for transactions and other social behaviour (see also this paper from the OECD). In finance, a lack of trust between banks mean that they don't lend to each other overnight, creating the risk that a perfectly solvent bank can go bankrupt overnight as it fails to meets very short term obligations. The Turkish Central Bank took an excellent step during the crisis in which it acted as a 'blind broker' guaranteeing all overnight lending amongst banks to mitigate this risk. 

Recent research discussed in Scientific American suggest that people trust the religious more than they trust atheists and would systematically chose religious people for jobs requiring high degrees of trust. Even the non-religious suffered from this bias. The reason may be that people behave better when they believe that someone is watching over them. Simply believing this to be true will favour believers either from an evolutionary perspective (if there is a reason to believe believers will be more likely to pro-create, and, it seems that there is) or from a social perspective (believers rise to the top and favour other believers for this reason). In either case, we fall into a self-reinforcing pattern resulting in a social equilibrium in which everyone believes (or pretends to).

This week's economist has a great article entitled 'Affinity fraud: the big business of swindling people who trust you'. The word 'religion' does not appear one single time but the article repeatedly gives examples of swindles by the religious. The blind faith religion requires is a great business opportunity.

I, by the way am an atheist. And extremely honest about it.

Saturday, January 28, 2012

Who is more colonial?

Country 1: human populated then about 500 years ago foreigners came lured by nice things like silver, farmland, natural human spreading, curiosity, as well as wanting to impose their religion on the natives. The foreigners dominated the natives and most died (disease, hunger) or were killed. All were treated badly. About 250 years later the colonisers decided they were the victims (partly true but rather exagerated) of their mother country and fought for and won their independence. Today about 85% of the country has its ethnic origins from the 'settlers' and under 2% from the original population.

Country 2: Uninhabited islands. Then about 500 years ago a few kerfuffles started over them. Eventually about 200 years ago a bunch of farmers settled there and stayed there to this day. There are now about 3500 people, most of which have origins with the original settlers. They have a small town and basically run themselves although they are nominally controlled by the government of the country they came from. They are strongly supportive of and happy with this set up. The only problem is that there is a big country next door (well, about 300km across the water) with about 40 million people. They feel that because it is 'close' to them, they should own it. They did invade it once but thankfully the 'home country' of the islanders came to the rescue. Now the big country is making threatening noises again - saying they want to take them over. They are trying to make life difficult for the islanders, taking away their livelihoods by blocking ports for their boats and encouraging other countries to do the same. That country is country 1.

Let's give these two countries names: Country 1, we will call the the Silver Country, or perhaps, Argentina. Country 2, we will call the Falkland Islands. Just for fun.

HERE is what a letter might look like to the Falkland Islanders if the UK Government decides to sell them out.

Good business in religion

This is a photo of a wonderful machine in St Stephen's Cathedral, Vienna. If you put 2 euro into it and listen at the telephone it will give you the history of the cathedral. 

I suppose the funds help to maintain the cathedral - and there is definitely maintenance happening - continually since 1147. Might as well maintain it, I suppose, since people some how got tricked into building this instead of better living spaces, sewerage systems... A good thing to maintain their legacy.

The building is certainly beautiful and impressive and definitely increased my utility today, so here is a little thanks - in the middle of everyone grumbling how bad life is these day - to the people who lived really shitty lives building this about 900 years ago.

But if you don't want to pay 2 euro to the church, I recommend skimming the wikipedia page before going there. Donate it to them instead.

Sunday, January 8, 2012

I nearly accidentally bought a homeless man hot food

or: Confessions of an atheist economist.

There I was earlier walking to the supermarket after a day largely spent working when I noticed that the homeless man who lives near me was settling down in his usual evening spot. I sometimes chat with him and give him some money. Apparently one of his ancestors - I think Andrew Jackson - came from Australia and is on a US banknote. I couldn't verify although wikipedia doesn't mention any Australian links to Jackson. 

In any case, I decided that I would bring him back some hot food from the shop. What an idiot! How did I even have this reflex after so many years? What makes me to qualified to decide on his behalf that what would be best for him was some hot food? Maybe he had already eaten. Maybe not. But what does it matter? If he judges he wants a beer* then who am I to say that his happiness is best served by something else I judge to be best for him?  That and I have changed his consumption bundle given by his budget constraint and brought him onto a lower indifference curve with less utility than if I had given him cash. If you see what I mean.

This being, I decided to give him cash on the way back. And then I made my second mistake. Not of an economist but of an out and proud atheist. He was asleep (or at least curled up) so I left him money inside the only heavy book that he keeps near his bed: his bible. Foooooool! He is going to wake up in the morning and see money in his bible. A miracle for which he will no doubt thank some non-existent entity playing with his mind. God does indeed work in mysterious ways. 

*On the way back, I had some nice Leffe that I would have happily shared with him.

Sunday, January 1, 2012

More on Christmas (and other) gifts

I have already ranted once about how gifts, done in the sloppy way we do them, reduce the happiness in the world, and encourage over-consumption - often on credit - as people feel socially, emotionally or morally obliged to purchase presents devoid of real meaning. It is nicely captured in the News Thump article "sale of 'any old shit' expected to treble as men start Christmas shopping". I think this goes for other occasions too and, in general, economists hate gifts (HT: MCO) because of their happiness-reducing quality.

There is always the argument that it is the 'thought that counts'. I would argue that the thought is worth considerably less when it is a habit (like at Christmas or birthday) and, in any case, I have probably received at least as many presents that show that someone hasn't listened or doesn't know me as well as they should, as nicer ones. 

So how did presents I received fair? Well, I probably received some presents that not only reduced happiness for humanity (as I value them less that the cost) but that actually reduced my own happiness all told. I received, for example, some tea. Which is nice. Only, I had to bring it back to America with me. It's all very civilised on this side of the pond these days; I can even get Twinings here. So my total package was tea plus extra stuff to carry with me. I dislike carrying lots of stuff whilst travelling, and I'd say there was a net loss to my happiness there. That is pretty impressive as, on an emotional basis, you have to wonder who was giving whom the gift in that case. I received a shirt. Also nice. A Marks and Spencer shirt at that. And as we all know, you don't get better than M&S in the shirt domain. Only, I noticed at some point, it was not the kind of M&S shirt I wear. I wear the amazing 2" longer M&S shirts ('for the gentleman of length' - my slogan, not theirs, but if anyone from M&S is reading, you can have it in exchange for a lifetime supply of them :)  )

In the end, my favourite presents were from people who didn't give me any presents, resulting in a net gain in happiness for the world. I reckon the only time you will increase happiness from giving is if you give occasionally, unexpectedly and being pretty sure the receiver will be happy with both the gift and the emotions behind the gift. 

As a post-script, I might rant about what effect xmas is having on kids with all these presents. I saw a lot of children over these holidays and I can't help wondering if we are storing up an even bigger credit-driven consumption boom in the future. Need to read up on that one but some of the signs seem worrying to me...