The wisdom of economics

Economics rarely gets a good press. This is probably because of the regrettable tendency among economists to pose as modern soothsayers: predicting (usually wrongly) the long-term direction of the stock markets, which countries will go bankrupt, and which economies will prosper. But there is great wisdom in economics, which should be known more widely. Here are three concepts from economics, which, if applied, would make British universities far more effective.

The first concept is marginal cost. This means the additional cost incurred in producing one extra item on a product line. A related concept is marginal income, or the additional income received from selling this one extra item. As a general rule, therefore, firms should expand production as long as the marginal income they receive for doing so exceeds the marginal cost. This seems obvious, but it is not how many organisations (let alone universities) operate. I have had very frustrating discussions in which decisions on whether to expand student numbers on a course have been based on average cost/student rather than the (usually very low) marginal cost of adding one extra student to a course that is already in operation. To make matters worse, the government penalises financially those universities which do expand student numbers beyond the ‘planned’ targets that have been set centrally.

The second concept is comparative advantage. This was originally developed to explain how trade can produce additional wealth if each trading partner specialises in producing those goods which it can produce at the lowest cost compared with the cost of producing the same type of goods elsewhere. Comparative advantage can be adapted to analyse the kind of ‘trading’ of activities within an organisation. Suppose an academic department has two members of staff: Cain is an excellent researcher and a mediocre teacher; Abel is a mediocre researcher and a mediocre teacher. What usually happens is that both are required to do their share of research and teaching. As a result, all the teaching in the department is mediocre, while half the research is excellent. If, however, the university applies the wisdom of economics, then they will specialise their staff. In that case, all the teaching will remain mediocre, but all the research will now be excellent. Of course, it would be even better if Abel had been an excellent teacher. But who knows - the more he specialises, the better he might get.

The third economic concept is satisficing. This involves seeking a solution to a problem that is adequate and costs the least. Satisficing is therefore an alternative to seeking a ‘rational’ solution (which would involve comparing all possible alternatives whatever the cost), and to plumping for the ‘excellent’ solution (which involves selecting the best possible  outcome irrespective of cost). Satisficing is what most people probably do most of the time when they come to make decisions about where to live, who to marry, which university to attend and so on. But universities are temples to rationality and excellence: the greatest contributions to knowledge have often come about because academics have taken infinite pains to collect data and have considered radically new ways in which the world and the cosmos can be explained. Such commitment, essential as it may be in scholarship, can have a damaging effect on how academic committees function. Every committee-member thinks up ways in which the outcome of a decision could be even more excellent, and deliberates whether there might be options no-one has yet thought of. It is hardly surprising that university leadership becomes exasperated and takes decisions without discussion or just hands things over to the administrators.

The strangest ethnic group

The strangest ethnic group in Britain is the upper class. Most of us in this country spend our lives without meeting an aristocrat, let alone attending an expensive private boarding school, the royal enclosure at Ascot, or any of the various other places that the upper class gather. But every so often our paths cross at a distance, and we have a chance to observe them, and note their outlandish forms of behaviour, dress and speech.

One example from my own life shows how this can happen. In the late 1960s, I was a very poor student in London. Without money, my only entertainment at weekends was to walk. I walked hundreds of miles across London, and at the end of the summer term on a Saturday afternoon one year (I forget which one), I arrived in Knightsbridge. In those days, posh shops closed on Saturday afternoon, and the streets were quiet. I entered a narrow street with a church at one end. Suddenly, the doors of the church opened and a wedding party emerged. The groom and most of the male guests were in the military uniform of officers in the Guards, and they walked, almost marched, arm-in-arm with their wives along the street to a hall at the other end where, I assume, the reception was to take place. Far from the noisy family weddings I was used to, this march took place in complete silence. The only discrepant sight among the military and Georgian buildings was a single scruffy student - myself. This experience, with its discipline, conformism and utter lack of spontaneity, reminds me of the scene at Royal Ascot in the film My Fair Lady.

I was raised in a left-wing working-class family, and so I inherited a suspicion of the upper class, and even a hostility to them. But, looking back, I think these ideas were wrong. There was no reason to believe that the people in the wedding party lacked kindness, consideration or charity towards others. Judging by the performance of the British Army, the men I saw did not lack courage. We should instead regard the upper class as one of many different cultures that may be incomprehensible to each other, but can live together in harmony. Rather than judging people by accent or appearance, we should assess their personal virtue as shown by their deeds to others, their skills, and their opportunity to occasionally bewilder the rest of us. 

The status wars in universities

Henry Kissinger (quoting several earlier writers) once remarked that disputes in universities are bitter because the stakes are so small. This is true if, perhaps like Kissinger, you regard money and power as the only stakes worth playing for. But academics are not usually greedy or power-hungry - what they seek is status. More specifically, they seek to have status attributed to them by those who already have status in their area of study. There are three signals of academic status: research publications, research grants,  and membership of esteemed academic societies. Status in all three is graduated in an extended hierarchy of infinitely small steps. In each academic field, there is an array of learned journals, ranked mathematically according to how many times the papers they publish are cited by other papers in similar learned journals. This makes it possible to rank the status of individual academics (and the academic departments they work in) according to which journals they publish in, and the ‘citation score’ for their papers. Research grants are of course ranked by size, but also by source. One million pounds from a prestigious peer-reviewed research fund (such as the Medical Research Council or the Wellcome Trust) counts for more in terms of academic status than the same sum from central government or the Lottery. Academic societies are also deliverers of status, in a hierarchy of esteem all the way up to the Royal Society, each with their own rankings of fellows, prizes and other awards.

At the very bottom of this academic hierarchy is teaching. This confers no status in any of these three measures, and, because it involves committing time and energy to meet the needs of other people, also fails to satisfy the essential egoism of many academics. In the past, when universities operated on a more collegiate basis, teaching was seen as a burden to be shared among academic staff in each department. This may still be the case in universities which have maintained a sense of collegiate self-government. But most universities have adopted a corporate model, in which individual academics are set targets for research grants and publications, thereby driving ambitious academics to avoid teaching at all costs. This is not, however, possible for all staff. Competition for research funds is severe (with some only funding 10% of grant applications) and many academics reach a point in their career when the money no longer arrives. In this case, they sink down the hierarchy of academic status and take on more and more teaching and managerial tasks. Some rationalise their diminished status by saying they have so much teaching that they have no time for research.

The funding system for higher education in the UK exactly matches and thus confirms this hierarchy. Research grants are allocated to designated ‘principal investigators’, who can take their grants with them if they transfer to another university. Since their grants usually fund a team of researchers and research students, these too usually transfer, like medieval peasants following their liege lord. This places the most successful principal investigators in a strong position with their university. If they object to policy changes or resent being asked to accept part of the ‘burden’ of teaching, they can move to another institution and take staff, money and prestige with them.

A major source of research grants are the various research councils, which are publicly-funded. But a second stream of public funding is allocated to universities rather than individuals, in accordance with the type and quality of research they undertake. ‘Quality’ is assessed in an infrequent series of assessments previously called the ‘RAE’ but now renamed the ‘REF’. This process involves a series of panels of senior researchers from each academic discipline, who allocate a score on a five-point rating scale for the research carried out in their discipline by each university over the period since the preceding assessment. The scores are awarded, needless to say, on a combination of citation scores for research papers, research grants awarded, and measures of esteem received by staff from their learned societies. The whole process requires a great many panels (67 in the last RAE), and is a massive diversion of funds and precious staff time from research itself. But it is eagerly supported by most research academics because, in a society obsessed by status, the results of the research assessments play the same role that Burke’s peerage or the Almanach de Gotha occupied in aristocratic societies. 

Funding for teaching, by contrast, is awarded neither to named individuals or even for specific courses. Instead, each university is given a block grant for a designated number of students, with this sum topped up by student fees. The block grant is higher if the student attends a clinical or a laboratory-based course (because these are more expensive to deliver), but the same sum arrives if the course is excellent or poor, or whether it is taught intensively or neglectfully. As a result, no status or corporate power attaches to staff who specialise in teaching, and few academics could name the leading teachers in their field of study.

There is, however, one real problem with this hierarchy. Just as status-obsessed aristocrats could bankrupt their countries, so research can undermine the finances of their universities. This is because much research does not cover its costs. Funding from research councils meets only 80% of the its full cost, while many charitable bodies cover little more than the direct costs of the research projects they support. Income from the RAE covers some of this deficit, but many universities subsidise research from funds allocated for teaching. This size of this subsidy is likely to increase because funding from charities and payments for research from central government is likely to decline in response to the economic recession and the consequent poor state of public finances in the UK. Faced by this problem, universities have proposed that student fees be raised while the cost of teaching be reduced. This latter can be achieved by accelerating the existing trends of reducing the number of staff specialising in education, transferring teaching tasks to research students, and cutting back teaching hours.

If this strategy is successful, it will have catastrophic effects for this country. Virtually all professional training now takes place at universities. A poorer quality of higher education would therefore mean less skilled lawyers, doctors, engineers, economists, librarians and so on. Whether or not students are in professional training, they would be less likely to have their ideas challenged, to learn to assess and analyse evidence, or develop skills in the laboratory. The strategy of subsidising research at the expense of teaching would thus have the paradoxical outcome of depriving us of the researchers of the future.

See also: http://stuartcumella.blogspot.com/2009/10/great-crackpot-ideas-of-past.html

The New Era of Good Feelings

Britain has now entered a new era of good feelings. Two of our political parties are in coalition, and outwardly agree on the fundamentals of policy. The third party is in opposition and electing a leader from a range of candidates with a shared lack of any policies at all. There may be disagreements for the sake of form, but all party leaders agree that there should be budgetary cuts (a bit more or a bit less), that Britain needs to ameliorate climate change by ‘green’ policies, that schools should have greater autonomy (usually involving the private sector), and that the UK should remain engaged in the endless war in Afghanistan.

The first ‘Era of Good Feelings’ was a period of about eight years in the USA after the end of the War of 1812. One of the two main political parties had collapsed, and the other soon ceased to function. Many of the outstanding issues of the day (particularly the geographical expansion of slavery and the creation of a national bank) which had previously divided politicians were, for a time, resolved. Most leading politicians were either slave owners or tolerated slavery, and shared a commitment to territorial expansion and aggressive dominance of the USA in the Americas. Lack of party competition resulted in falling turnout at elections, and in 1820 President Monroe was re-elected (by the electoral college) with only one dissenting vote.

This lack of organised political conflict did not of course mean that no issues divided Americans, merely that their leading politicians chose not to express them. Once the presidency became vacant in 1824, none of the four main candidates won a majority in the electoral college. The election was then decided in the House of Representatives, and  John Quincy Adams was elected as a result of a backstairs deal. Andrew Jackson, who had won the largest number of votes, bitterly attacked this decision as corrupt, and began organising a political party to promote his candidature for the next presidential election. His rivals formed another party, and politics returned to an era of ill feelings as each party sought areas of discontent to exploit for votes.

The new era of good feelings in Britain does not follow a war or the collapse of one of the political parties, but it does correspond with the intellectual collapse of the traditional political parties. There is simply no intellectual content remaining in socialism, liberalism or conservatism. All parties proclaim they are ‘green’, and portray themselves as the more effective managers of the national consumer society. The party leaders (and the would-be party leaders in the Labour Party) are also remarkably similar. It is true that one of these candidates, Diane Abbott, is distinguished from the others on physiological grounds, but shares with them (and the leaders of the Conservative and Liberal Democrat parties) an education at either Oxford or Cambridge Universities, and a lifetime career in the media, public relations, and the junior ranks of politics. It is hard to think what any of these potential leaders would do differently in office from the two party leaders that currently control the Government.

It is difficult to predict how long this new era of good feelings will last. It is possible that one of the party leaders will spot an opportunity to speak on behalf of rising discontent. However, insurgent politics is probably more likely. This would arise if a politician from outside the three main parties was able to effectively articulate hostility to all of them. This has happened in the USA with the ‘tea party’ movement and Sarah Palin, whose apparent lack of sophistication combined with her startling ignorance of the wider world are taken as signs of authenticity by her followers. We await with terpidation her British equivalent.

Murder in the village.

The worst-informed people in any society are those who watch the most television. It is of course possible to learn a certain amount about the world by watching the news. But most news programmes only skim the outward appearances, usually without any explanation for why there are riots in one place or starvation in another. In any case, people who watch the most television do not sit gazing at 24 hour news channels - they watch daytime television. Their knowledge of the doings of humankind is thereby based on personal confessions of dysfunctional families, celebrity gossip, house redecorating and repeats of murder mysteries.

The murder mysteries, at least those shown on British television, are the most misleading of all. These show that the most dangerous places in this Kingdom are Oxford University, country houses, and villages in beautiful countryside. Fortunately, the victims and perpetrators of all these murders are restricted to a small number of members of the local elite, living in splendour, speaking upper class English, and surrounded by horses, land rovers and mixed herbaceous borders. The ordinary rural population of England do appear in murder mysteries from time to time, distinguished by their comic ways and all-purpose rural accents.

I have lived in a small country village for over a quarter of a century, arriving almost by accident because there were few houses on the market and one my wife and I could afford became available. There have been no murders and hardly any crime at all. But there has been a great deal of friendship, shared community activity, and effective local leadership. There is also the immense beauty of the West Worcestershire countryside, of hills, fields, and footpaths.

One late summer evening just after we moved into our bungalow, I lay on the small front lawn, looking through the woods opposite to the ancient country church, listening as the village bell-ringers rang the oldest complete set of bells in England. Later I watched the pipistrelles circle above me at dusk. I decided to stay. My wife and I raised two children in our small bungalow. They walked each day to the village playschool, then the primary school and finally to the local high school (also, fortunately, located in the village). They could play in fields and the quiet local streets.

Living in a village had its costs for me: each job was further away, and meant a longer commute. Traffic got heavier and the trains more crowded. But now I work from home, and look from my office window on the same trees and the same ancient village church, and see the seasons come and go.

Bad news at breakfast

When you travel across the world, you seem to spend a lot of time lounging around in-between places - airport lounges, hotels, railway stations. When you are there, you watch people, read, and look at a lot of television. It doesn’t matter that you don’t always speak the language - most of the programmes are remarkably understandable, following formats that vary little from country to country. One of these is breakfast television. This almost always includes a middle-aged man and a somewhat younger woman. The man has the reassuring but bland look of the chair of the members’ committee in the local golf club. The woman is always attractive and wears different clothes each day (no-one notices whether the man wears a different suit from day to day). Much of the programme consists of a friendly chit-chat between these two, interspersed with reading the news from the Teleprompter. When they report some disaster, war, or human interest story with associated suffering, they both assume serious or even troubled expressions. They often read alternate sentences. When the man reads, the woman will either look at him or make a range of appropriate expressions for the camera. Generally, however, the mood is jolly. Any troubling news is rapidly followed by celebrity gossip, entertainment chit-chat, or some amusing story. What you don’t get much of is news.

When you do get the news, there is almost never any explanation. Why are people in Bangkok wearing red shirts and rioting? Why do the people in Gaza seem so angry? How come so many Southern European countries are in financial difficulties. Do not look at breakfast television for any understanding. What news exists is dominated by pictures. A disaster which kills two people in the USA (with film) is far more ‘newsworthy’ than one which kills a thousand (without film) in Bangladesh. Terminology is slack. Alabama is apparently in ‘Southern America’, while Japan is one of the ‘Western’ nations. The vast diverse continent of Africa is spoken of as an undifferentiated entity. Breakfast television exists in a kind of collective Korsakoff’s Syndrome, with no memory, no awareness of context, and complete lack of insight. The ambition of its presenters is not to overcome these deficiencies by becoming real journalists, but to star in one of the many televised talent shows (Dancing with the Stars, Dancing on Ice etc).

Every so often, real journalists do break into breakfast television, in cases where the talents of the presenters prove insufficient. Then we hear the political correspondents, the economic experts, and so on. These do know what they are talking about, seek out stories, and write interesting books in their spare time. However, they do lack the good looks of the breakfast television presenters - expertise, it seems, does not always coincide with a pretty face.

The Dark Heart of Suburbia

There are places we are supposed to find menacing: neglected churchyards down a lonely country lane in a cold night with the wind howling round a ruined church tower; or derelict urban streets covered in gang slogans inhabited by diverse menacing locals. But these are all clichés. My view is that true horror is found in the mundane, particularly in the English suburban streets of detached, semi-detached and terraced houses. Horror in Fred West’s terrace house, with bodies stuffed in the cellar, the garden and in the wall cavities. Or horror in Dennis Nilson’s house in London, where the dismembered remains of his many victims were found by DynoRod, called in to unblock the drains.

I confess that I was born and raised in a standard English suburban location (‘community’ seems an inappropriate word). When I was a child, Shirley was a string of shops along the main road from Birmingham to Stratford, plus several streets of semi-detached and detached houses. It had once been an attractive village, and there was still an old blacksmith’s forge and some timber-framed buildings. I was able to walk to the countryside from my home, and the streets were full of children playing. But the old buildings were demolished, and Shirley stretched ever further over what had been the beautiful green fields, woods and hedgerows of Warwickshire. The stream where I used fish for sticklebacks became a ditch in the middle of a housing estate. I used to walk through a wood and come out the other side in a cornfield. Now the wood remains, but is surrounded by houses. Shirley stretches for miles along the main road, lined with the dreary shed cities of supermarkets, DIY stories, household furnishers, and electrical goods stores. The roads are full of cars (parked or moving), and children sit indoors watching television and computer games.

Shirley has not had its mass murderer, but it did have the only political party in England to collapse because its leader set fire to his wife. The Shirley Ratepayers’ Association in July 1997 had three councillors on Solihull Borough Council: Trevor Eames, his wife Ursula, and Brenda Otton. Ursula had been having an affair with a council official, David Parfitt, and photographic evidence of this had been collected for Trevor by Brenda. According to the press, David and his wife met Trevor and Ursula to discuss things over dinner. This does not seem to have resulted in reconciliation, because Trevor subsequently attacked David with a hammer. Ursula eventually decided to leave Trevor, and he responded by throwing a glass of petrol over her and setting it alight. He was sentenced for seven years in prison afer causing what the papers uniformly describe as ‘horrific injuries’ to his wife. This seems to have been the end of the Shirley Ratepayers’ Association as a political force, but not of Trevor.

He emerged from prison after four and a half years, and resumed his interest in local politics. He soon after stood (unsuccessfully) for the council, and is now a very active secretary of the Solihull and Meriden Residents Association (SAMRA). In the picture below he is standing next to Nikki Sinclaire who at that time was a representative of the UK Independence Party (UKIP) in the European Parliament. Ms Sinclaire has now been expelled from UKIP, after refusing to join meetings of the group to which it is affiliated in the European Parliament. Apparently, she discovered that UKIP and its affiliates are ultra right-wing and intolerant of her lesbian sexuality. The latest development is that SAMRA candidates (including Trevor) are contesting every seat in the Solihull Borough elections, while Nikki is standing for the UK Parliament as a SAMRA candidate. The horror continues.