John Stuart Mill assisted in the triumph of the idea of progress in the 19th Century but he also had concerns about the future that still seem relevant today. Richard Reeves comments: ‘Mill was not a knee-jerk critic of what Ruskin dismissed as the “steam whistle society”, but nor was he a blind advocate of industrialization for its own sake. As an avid botanist and walker, he was acutely sensitive to what would today be called environmental concerns’ (‘John Stuart Mill, Victorian Firebrand’: 233).
I will focus here on the views on progress and, in particular, concerns about public opinion that Mill put forward in ‘Civilisation’, published in 1836, when he was about 30 years old.
Mill identified three characteristics of civilisation:
• the development of commerce, manufactures and agriculture;
• people acting together for common purposes in large organisations; and
• peace being maintained within society through arrangements for protecting the person and property of members.
He suggests: ‘Wherever there has arisen sufficient knowledge of the arts of life, and sufficient security of property and person, to render the progressive increase of wealth and population possible, the community becomes and continues progressive in all the elements which we have just enumerated’.
Mill goes on to argue that the most remarkable consequence of advancing civilization is ‘that power passes more and more from individuals, and small knots of individuals, to masses: that the importance of the masses becomes constantly greater, that of individuals less’. He gives several reasons: economic growth results in the growth of a middle class and the dispersion of knowledge; the development of habits of cooperation and discipline in large organizations enable development of associations of different kinds, including benefit societies and trades unions; and improved communications through newspapers that enable people to learn that others feel as they feel.
Mill argued that political reform would follow inevitably: ‘The triumph of democracy, or, in other words, of the government of public opinion, does not depend upon the opinion of any individual or set of individuals that it ought to triumph, but upon the natural laws of the progress of wealth, upon the diffusion of reading, and the increase of the facilities of human intercourse’.
Mill’s concern about the growth in power of public opinion was that the individual would become lost in the crowd; although the individual depends more and more on opinion (reputation) he is apt to depend less and less upon the well-grounded opinions of those who know him. Mill suggested that with the growth in power of public opinion ‘arts for attracting public attention formed a necessary part of the qualifications even of the deserving’. His main concern was that ‘growing insignificance of the individual in the mass’ ... ‘corrupts the very foundation on the improvement of public opinion itself; it corrupts public teaching; it weakens the influence of the more cultivated few over the many’.
One for the remedies that Mill proposed was ‘national institutions of education, and forms of polity, calculated to invigorate the individual character. Mill then proceeded to castigate the English universities for acting as though the object of education was to inculcate the teacher’s own opinions in order to produce disciples rather than thinkers or inquirers. Mill wrote: ‘The very corner-stone of an education intended to form great minds, must be the recognition of the principle, that the object is to call forth the greatest possible quantity of intellectual power, and to inspire the intensest love of truth: and this without a particle of regard to the results to which the exercise of that power may lead, even though it should conduct the pupil to opinions diametrically opposite to those of his teachers’.
Massive changes have occurred in university education over the last 174 years, some of which correspond to Mill’s suggestions. Does this mean that Mill’s views on university education are now of only historical relevance? Do our universities now inspire the intensest love of truth? Are these standards of truth-seeking now reflected in the mass media and politics?
Unfortunately, there seem to be many people in universities these days who would regard Mill’s aim of inspiring the intensest love of truth as a philosophically suspect idea that is inconsistent with the modern purpose of universities in training technicians and inculcating them with politically correct views.
Friday, January 29, 2010
Tuesday, January 19, 2010
Does brain plasticity have implications for the idea of progress?
I have not long finished reading Norman Doidge’s book, ‘The Brain that Changes Itself’ (2007). Doidge is a research psychiatrist and has written a highly readable and informative book based on interviews of scientific pioneers and people who have benefited personally from the new science of neuroplasticity.
The main message that I get from the book is that the computer analogy of brain function – the contribution of nature corresponds to hardware and the contribution of nurture corresponds to software – is somewhat misleading. The machine metaphor of the brain as an organ with specialised parts cannot fully account for the capacity of the brain to perfect its circuits to make itself better suited to the task at hand. More information about the book is available here.
Norman Doidge has relegated his discussion of plasticity and the idea of progress to an appendix. This may be because he does not want his comments on this controversial subject to detract from the main themes of his book. Nevertheless, Doidge’s conclusions about the implications of neuroplasticity for progress are cautious. He writes: ‘while it is true that the history of Western political thought turns in large part upon the attitudes that various ages and thinkers have held toward the question of human plasticity broadly understood, the elucidation of human neuroplasticity in our time, if carefully thought through, shows that plasticity is far too subtle a phenomenon to unambiguously support a more constrained or unconstrained view of human nature, because in fact it contributes to both human rigidity and flexibility, depending upon how it is cultivated’ (p 318).
Doidge suggests that while neuroplasticity teaches that the brain is more malleable than some have thought, ‘calling it perfectible raises expectations to a dangerous level’. The history of Western political thought referred to by Doidge includes the contribution of Condorcet, the French philosopher and mathematician, who was a major participant in the French revolution. Condorcet argued that human history was the story of progress and that human nature was continually improvable in intellectual and moral terms. The idea that the imperfections of human nature are a consequence of social arrangements leads to the belief that revolutionary changes in social arrangements will lead to a transformation in human nature. When this doesn’t happen revolutionaries tend to resort to additional coercion to change human behaviour to fit in with the new social arrangements that they have created.
Steven Pinker has questioned whether the idea of a malleable human nature deserves ‘its reputation for optimism and uplift’. He suggests that if it did, B F Skinner would have been lauded as a great humanitarian when he argued that society should apply conditioning to humans in the pursuit of utopian ideals. Skinner’s critics pointed out that no-one doubts that behaviour can be controlled; putting a gun to someone’s head or threatening him with torture are time-honoured techniques. Pinker comments: “The issue is not whether we can change human behavior, but at what cost” (‘The Blank Slate’: 169).
It seems to me that the idea of a malleable human nature may have become associated with socialistic utopianism merely because of an accident of history. The views of John Locke, who originated the concept of the human mind as a ‘blank slate’ written on by experience, certainly cannot be described in those terms. Locke viewed liberty as freedom from the violation of natural rights (including rights to possessions as well as to life and health) and indispensable to the proper pursuit of happiness.
Norman Doidge suggests that Rousseau, one of the originators of the view that humans are perfectible, used the term perfectibility in an ironic sense. According to Doidge, Rousseau understood that if the human mental and emotional life are malleable there can be many different kinds of development and we cannot be certain what a normal or perfect mental development would look like. To my mind this view highlights the arrogance of Rousseau’s revolutionary followers in attempting to impose their peculiar views of utopia on other people.
What kind of society is most likely to promote the development of human brains in ways that will relax the constraints of human nature that limit our virtue and our wisdom? Is it a welfare state that aims to minimize the economic challenges that we have to face? Is it a rent-seeking society in which the extent to which individuals and groups prosper depend on their skills in playing a political game of obtaining preferment at the expense of others? Or is it a free society in which people prosper by engaging in mutually beneficial exchanges?
At one point in his book, Norman Doidge writes: ‘To keep the mind alive requires learning something truly new with intense focus’ (p 88). When I read that I was reminded of what Israel Kirzner has written about the benefits of freedom to society. Kirzner points out that losses from denial of freedom extend beyond those associated with preventing people from attaining known goals. He writes: ‘A free society is fertile and creative in the sense that its freedom generates alertness to possibilities that may be of use to society’ (“Perception, Opportunity and Profit”, 1979: 239). Perhaps we should be open to the possibility that the exercise of entrepreneurial alertness improves human nature.
The main message that I get from the book is that the computer analogy of brain function – the contribution of nature corresponds to hardware and the contribution of nurture corresponds to software – is somewhat misleading. The machine metaphor of the brain as an organ with specialised parts cannot fully account for the capacity of the brain to perfect its circuits to make itself better suited to the task at hand. More information about the book is available here.
Norman Doidge has relegated his discussion of plasticity and the idea of progress to an appendix. This may be because he does not want his comments on this controversial subject to detract from the main themes of his book. Nevertheless, Doidge’s conclusions about the implications of neuroplasticity for progress are cautious. He writes: ‘while it is true that the history of Western political thought turns in large part upon the attitudes that various ages and thinkers have held toward the question of human plasticity broadly understood, the elucidation of human neuroplasticity in our time, if carefully thought through, shows that plasticity is far too subtle a phenomenon to unambiguously support a more constrained or unconstrained view of human nature, because in fact it contributes to both human rigidity and flexibility, depending upon how it is cultivated’ (p 318).
Doidge suggests that while neuroplasticity teaches that the brain is more malleable than some have thought, ‘calling it perfectible raises expectations to a dangerous level’. The history of Western political thought referred to by Doidge includes the contribution of Condorcet, the French philosopher and mathematician, who was a major participant in the French revolution. Condorcet argued that human history was the story of progress and that human nature was continually improvable in intellectual and moral terms. The idea that the imperfections of human nature are a consequence of social arrangements leads to the belief that revolutionary changes in social arrangements will lead to a transformation in human nature. When this doesn’t happen revolutionaries tend to resort to additional coercion to change human behaviour to fit in with the new social arrangements that they have created.
Steven Pinker has questioned whether the idea of a malleable human nature deserves ‘its reputation for optimism and uplift’. He suggests that if it did, B F Skinner would have been lauded as a great humanitarian when he argued that society should apply conditioning to humans in the pursuit of utopian ideals. Skinner’s critics pointed out that no-one doubts that behaviour can be controlled; putting a gun to someone’s head or threatening him with torture are time-honoured techniques. Pinker comments: “The issue is not whether we can change human behavior, but at what cost” (‘The Blank Slate’: 169).
It seems to me that the idea of a malleable human nature may have become associated with socialistic utopianism merely because of an accident of history. The views of John Locke, who originated the concept of the human mind as a ‘blank slate’ written on by experience, certainly cannot be described in those terms. Locke viewed liberty as freedom from the violation of natural rights (including rights to possessions as well as to life and health) and indispensable to the proper pursuit of happiness.
Norman Doidge suggests that Rousseau, one of the originators of the view that humans are perfectible, used the term perfectibility in an ironic sense. According to Doidge, Rousseau understood that if the human mental and emotional life are malleable there can be many different kinds of development and we cannot be certain what a normal or perfect mental development would look like. To my mind this view highlights the arrogance of Rousseau’s revolutionary followers in attempting to impose their peculiar views of utopia on other people.
What kind of society is most likely to promote the development of human brains in ways that will relax the constraints of human nature that limit our virtue and our wisdom? Is it a welfare state that aims to minimize the economic challenges that we have to face? Is it a rent-seeking society in which the extent to which individuals and groups prosper depend on their skills in playing a political game of obtaining preferment at the expense of others? Or is it a free society in which people prosper by engaging in mutually beneficial exchanges?
At one point in his book, Norman Doidge writes: ‘To keep the mind alive requires learning something truly new with intense focus’ (p 88). When I read that I was reminded of what Israel Kirzner has written about the benefits of freedom to society. Kirzner points out that losses from denial of freedom extend beyond those associated with preventing people from attaining known goals. He writes: ‘A free society is fertile and creative in the sense that its freedom generates alertness to possibilities that may be of use to society’ (“Perception, Opportunity and Profit”, 1979: 239). Perhaps we should be open to the possibility that the exercise of entrepreneurial alertness improves human nature.
Sunday, January 17, 2010
Is the rule of law under challenge in Australia?
I expect that some readers will think that this is an absurd question. Australia has a well-deserved reputation for the quality of its legal institutions. Our ranking on the World Bank’s rule of law index is higher than that of the U.S. and U.K. So why ask the question?
First, I don’t think we can derive much comfort about rule of law from the World Bank’s rule of law index. It measures perceptions of the extent to which people have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. As I have noted in an earlier post it is a broad measure of the quality of legal institutions rather than a measure relating specifically to rule of law.
Second, there is evidence that Australia has problems with rule of law. An example has recently come to notice close to home. In order to avoid violence in public parks, as occurred in Huskisson on Australia day last year, the Shoalhaven council has introduced bans on alcohol in certain specified parks on certain specified public holidays. I don’t have a view on whether these bans are the best way to prevent anti-social behaviour. The problem regarding rule of law arises because the police have been reported as saying that people wanting to drink responsibly as part of family gatherings can ignore the bans without risk of prosecution. It is comforting to know that the police do not like interfering with family gatherings, but it is difficult to feel comfortable with a situation where laws are to be enforced selectively. What has happened to the idea that the law should be enforced without fear or favour?
Robin Speed has referred to the similar example of an agreement by two doctors who operated independent practices in a country town and who agreed that one would work on Saturday and the other on Sunday. A Senate committee recognised that this was caught by the definition of a criminal cartel, but swept aside that concern on the grounds that the ACCC and DPP would not be expected to prosecute in such a case. As Speed says, “that is the antithesis of the rule of law”.
In his article in “The Australian” yesterday, ‘The rise and rise of the regulators’, Robin Speed argues that there has been a fundamental shift in the relationship between the individual and the law: “Increasingly, the relationship is not of the individual knowing and complying with what the law states, but of knowing and complying with what the regulators state the law states, and then knowing the extent to which the regulators will apply the law as stated by them”.
Even when parliament passes laws with the intention of restraining regulators, this does not necessarily prevent them from seeking to avoid those laws. For example, I have been reliably informed that in the 1970s the government’s most senior legal advisor provided a legal opinion that legislation that had recently been passed with the support of both of the major parties in parliament did not restrain regulators in the way that those framing and supporting the legislation had intended. The circumstances of this example are quite distinct from those where a court finds that the wording of legislation does not have the meaning that parliament intended. In the circumstances to which I am referring the opinion of the government’s legal advisor had the effect of denying the intention of parliament to restrict the regulatory activities of a particular arm of government. It elevated the intentions of regulators above those of the parliament.
How can the regulators be constrained? The obvious answer is legislation that gives regulators less discretion. In my view one area of high priority should be reform of the tax system to introduce greater certainty and reduce role of the tax office in deciding what tax law means. It will be interesting to see whether the Henry tax review has anything useful to say on this question.
Postscript:
Greg Cutbush, a farmer near Yass, has told me that he thinks the rule of law problem Mr Speed identifies is very common. For example, he’s noticed the ACCC applies one rule to farm products and another to household appliances. Any farmer who is found to have conspired with his neighbours to insist that the local grain merchant pay them the same price for their canola will be prosecuted under the Trade Practices Act because collective bargaining is prohibited. And yet when his brother and three of his neighbours get together and all buy new lawnmowers from an agent they have bullied in Bathurst one Saturday morning, nobody gives a stuff. It seems like the ACCC’s watchdog role is all window-dressing.
First, I don’t think we can derive much comfort about rule of law from the World Bank’s rule of law index. It measures perceptions of the extent to which people have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police and the courts, as well as the likelihood of crime and violence. As I have noted in an earlier post it is a broad measure of the quality of legal institutions rather than a measure relating specifically to rule of law.
Second, there is evidence that Australia has problems with rule of law. An example has recently come to notice close to home. In order to avoid violence in public parks, as occurred in Huskisson on Australia day last year, the Shoalhaven council has introduced bans on alcohol in certain specified parks on certain specified public holidays. I don’t have a view on whether these bans are the best way to prevent anti-social behaviour. The problem regarding rule of law arises because the police have been reported as saying that people wanting to drink responsibly as part of family gatherings can ignore the bans without risk of prosecution. It is comforting to know that the police do not like interfering with family gatherings, but it is difficult to feel comfortable with a situation where laws are to be enforced selectively. What has happened to the idea that the law should be enforced without fear or favour?
Robin Speed has referred to the similar example of an agreement by two doctors who operated independent practices in a country town and who agreed that one would work on Saturday and the other on Sunday. A Senate committee recognised that this was caught by the definition of a criminal cartel, but swept aside that concern on the grounds that the ACCC and DPP would not be expected to prosecute in such a case. As Speed says, “that is the antithesis of the rule of law”.
In his article in “The Australian” yesterday, ‘The rise and rise of the regulators’, Robin Speed argues that there has been a fundamental shift in the relationship between the individual and the law: “Increasingly, the relationship is not of the individual knowing and complying with what the law states, but of knowing and complying with what the regulators state the law states, and then knowing the extent to which the regulators will apply the law as stated by them”.
Even when parliament passes laws with the intention of restraining regulators, this does not necessarily prevent them from seeking to avoid those laws. For example, I have been reliably informed that in the 1970s the government’s most senior legal advisor provided a legal opinion that legislation that had recently been passed with the support of both of the major parties in parliament did not restrain regulators in the way that those framing and supporting the legislation had intended. The circumstances of this example are quite distinct from those where a court finds that the wording of legislation does not have the meaning that parliament intended. In the circumstances to which I am referring the opinion of the government’s legal advisor had the effect of denying the intention of parliament to restrict the regulatory activities of a particular arm of government. It elevated the intentions of regulators above those of the parliament.
How can the regulators be constrained? The obvious answer is legislation that gives regulators less discretion. In my view one area of high priority should be reform of the tax system to introduce greater certainty and reduce role of the tax office in deciding what tax law means. It will be interesting to see whether the Henry tax review has anything useful to say on this question.
Postscript:
Greg Cutbush, a farmer near Yass, has told me that he thinks the rule of law problem Mr Speed identifies is very common. For example, he’s noticed the ACCC applies one rule to farm products and another to household appliances. Any farmer who is found to have conspired with his neighbours to insist that the local grain merchant pay them the same price for their canola will be prosecuted under the Trade Practices Act because collective bargaining is prohibited. And yet when his brother and three of his neighbours get together and all buy new lawnmowers from an agent they have bullied in Bathurst one Saturday morning, nobody gives a stuff. It seems like the ACCC’s watchdog role is all window-dressing.
Wednesday, January 13, 2010
How painful is economic reform?
In my last post I presented evidence that people in countries with relatively high growth rates tend to perceive that their lives are improving. This is one of the reasons why I reject the view that economic growth makes people unhappy and that so called ‘unhappy growth’ can explain the reluctance of some governments to undertake economic reforms.
This raises questions about the effects of economic reforms on perceived changes in the quality of life. Do people in countries undergoing economic reforms tend to perceive that their lives were better prior to the reforms? My initial thought was that this would depend on the success of the reforms in raising economic growth rates.
I have now attempted to test this view empirically. In the analysis the perceived improvement in quality of life over the last five years is calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. Regression analysis has been used to explain variation in perceived improvement in life for 104 countries in terms of economic growth rate over the five years to 2007, improvement in governance over the same period (the average change in the 6 World Bank governance indicators), change in regulatory quality (the World Bank governance indicator most closely related to reforms that increase economic freedom) and a variable reflecting the extent to which assessments that people in different countries make of their lives tend to differ from the ratings that would be expected on the basis of income levels.
The regression explains about 40 per cent of the variation in perceived improvement in life among the 104 countries. The results show:
• Economic growth has a positive effect on perceived change in quality of life.
• Improvements in governance have a positive effect
• Improvement in regulatory quality have a negative effect on perceived change in quality of life.
(These results pass the standard statistical test relating to standard errors of estimates. Anyone who wants to see the results is welcome to contact me by email.)
It is important for the negative impact of change in regulatory quality to be seen in context. Economic reforms are generally undertaken in the hope that they will result in improvements in quality of life through higher economic growth. The chart below shows that countries which undertook regulatory reforms generally had relatively high economic growth rates. There was only one country undertaking regulatory reforms which had a negative economic growth rate.
The green diamonds in the chart denote the 10 countries in which people had the greatest perceived improvement in their quality of life. The red diamonds denote the countries with the greatest perceived decline in quality of life. The green diamonds are generally associated with higher economic growth rates than the red diamonds.
The evidence seems to support my intuitions – which are probably similar to the intuitions of most other economists interested in public policy - about the painfulness of economic reforms. Reforms often involve removal of regulatory barriers that protect the incomes of some groups at the expense of the broader community. The people who experience these income losses tend to resist reforms and to perceive that their lives were better before they were undertaken. When reforms are successful in promoting economic growth, however, these perceived losses tend to be outweighed by the benefits to those who gain from the reforms. Ad hoc attempts to promote reform of particular regulations are likely to be less successful than reform programs that are sufficiently broad and persistent to enable a high proportion of the population to perceive that their lives have improved.
This raises questions about the effects of economic reforms on perceived changes in the quality of life. Do people in countries undergoing economic reforms tend to perceive that their lives were better prior to the reforms? My initial thought was that this would depend on the success of the reforms in raising economic growth rates.
I have now attempted to test this view empirically. In the analysis the perceived improvement in quality of life over the last five years is calculated as the difference between the rating of life today and life 5 years ago using data from the Gallup World Poll. Regression analysis has been used to explain variation in perceived improvement in life for 104 countries in terms of economic growth rate over the five years to 2007, improvement in governance over the same period (the average change in the 6 World Bank governance indicators), change in regulatory quality (the World Bank governance indicator most closely related to reforms that increase economic freedom) and a variable reflecting the extent to which assessments that people in different countries make of their lives tend to differ from the ratings that would be expected on the basis of income levels.
The regression explains about 40 per cent of the variation in perceived improvement in life among the 104 countries. The results show:
• Economic growth has a positive effect on perceived change in quality of life.
• Improvements in governance have a positive effect
• Improvement in regulatory quality have a negative effect on perceived change in quality of life.
(These results pass the standard statistical test relating to standard errors of estimates. Anyone who wants to see the results is welcome to contact me by email.)
It is important for the negative impact of change in regulatory quality to be seen in context. Economic reforms are generally undertaken in the hope that they will result in improvements in quality of life through higher economic growth. The chart below shows that countries which undertook regulatory reforms generally had relatively high economic growth rates. There was only one country undertaking regulatory reforms which had a negative economic growth rate.
The green diamonds in the chart denote the 10 countries in which people had the greatest perceived improvement in their quality of life. The red diamonds denote the countries with the greatest perceived decline in quality of life. The green diamonds are generally associated with higher economic growth rates than the red diamonds.
The evidence seems to support my intuitions – which are probably similar to the intuitions of most other economists interested in public policy - about the painfulness of economic reforms. Reforms often involve removal of regulatory barriers that protect the incomes of some groups at the expense of the broader community. The people who experience these income losses tend to resist reforms and to perceive that their lives were better before they were undertaken. When reforms are successful in promoting economic growth, however, these perceived losses tend to be outweighed by the benefits to those who gain from the reforms. Ad hoc attempts to promote reform of particular regulations are likely to be less successful than reform programs that are sufficiently broad and persistent to enable a high proportion of the population to perceive that their lives have improved.
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