Els paranys de la política democràtica

El mito del votante racional. Por qué la democracia lleva a tomar malas decisiones políticas

Res de nou. Bon diagnòstic i absència de teràpia en el llibre. Tal com votem ens allunya d'un suposat comportament racional. Això és el que va defensar Bryan Caplan el 2007 i que resumeix les troballes d'altres autors anteriors i al que posteriorment l'han seguit d'altres. Si voleu més material, el trobareu en aquest blog sota el títol de les emocions en la formació de les preferències polítiques. En relació a les propostes hi ha una col·lecció que podeu consultar sota el títol podem reimaginar-nos un nou capitalisme? i can capitalism be reimagined?

Llibre resumit amb IA

A "El Mito del Votante Racional", Bryan Caplan argumenta de manera provocadora contra la suposició tradicional en economia política que els votants prenen decisions racionals i ben informades. Caplan sosté que, en canvi, les creences del públic sobre economia estan plagades d'errors sistemàtics severs, i que aquesta irracionalitat no és aleatòria sinó fins i tot "racional" en cert sentit.

En el Prefaci, Caplan expressa la seva sorpresa per la recepció relativament sensata del llibre, tenint en compte que qüestiona un dogma central de la democràcia. Reconeix la crítica que és millor diagnosticant que receptant, però argumenta que la manca de voluntat del pacient per prendre la medicina no invalida el tractament. Malgrat això, no advoca pel fatalisme, suggerint que hi ha marges de maniobra per promoure polítiques més sensates. També anima els economistes a escriure llibres per desenvolupar completament les seves posicions i arribar a un públic més ampli.

El llibre es basa en la idea que, igual que els experts mereixen el benefici del dubte, també ho mereixen les conclusions consensuades dels economistes, inclosa la hipòtesi de la irracionalitat del votant. 

El Capítol 1, "Més enllà del miracle de l'agregació", introdueix la idea que el coneixement dels votants sobre política és limitat. Critica la visió optimista del "Miracle de l'Agregació", que sosté que, malgrat la ignorància individual, la decisió col·lectiva dels votants pot ser tan encertada com la d'un electorat plenament informat. Caplan refuta aquesta idea amb l'argument que els errors del públic en qüestions econòmiques no són aleatoris, sinó sistemàtics i esbiaixats. Identifica quatre "biaixos" principals en la comprensió pública de l'economia:

• Biaix antimercat: La societat no comprèn la "mà invisible" del mercat i la seva capacitat d'harmonitzar l'afany de lucre privat amb l'interès general.
• Biaix antiestranger: La societat minusvalora els beneficis de les relacions comercials amb l'estranger.
• Biaix de la creació d'ocupació: La societat equipara la prosperitat amb el nivell d'ocupació en lloc de la producció de béns i serveis.
• Biaix pessimista: La societat tendeix a creure que les condicions econòmiques sempre són dolentes i que empitjoren.

Caplan argumenta que aquests biaixos sistemàtics fan que el resultat polític estigui lluny de ser socialment òptim, ja que la "saviesa" de la multitud es veu distorsionada per errors compartits.

El Capítol 2 se centra en l'evidència empírica d'aquests biaixos a través de la "Enquesta a Americans i Economistes sobre l'Economia" (SAEE). Aquesta enquesta revela divergències sistemàtiques i de gran magnitud entre les conviccions del públic general i les dels economistes professionals sobre una àmplia gamma de qüestions econòmiques. Caplan aborda l'objecció que els experts també poden tenir biaixos, com el "biaix interessat" degut als seus salaris elevats i seguretat laboral. Tanmateix, defensa la idea que les diferències sistemàtiques entre experts i profans suggereixen biaixos en aquest últim grup. Explica que les preguntes de la SAEE es van seleccionar per la seva rellevància pública i mediàtica, no per maximitzar el desacord entre experts i legos. La SAEE confirma la realitat d'aquestes divergències, demostrant que el "Miracle de l'Agregació" no es produeix amb freqüència en matèria econòmica.

El Capítol 3 explora les possibles fonts de la irracionalitat pública. Caplan argumenta que la "ignorància racional", la idea que els votants no tenen incentius per informar-se a causa de la insignificància del seu vot individual, no és l'explicació principal. En canvi, proposa el concepte d'"irracionalitat racional": la idea que la gent tria tenir creences irracionals perquè els beneficis psicològics (com ara sentir-se bé amb el propi grup o ideologia) superen els baixos costos materials de mantenir aquestes creences en el context polític.

El Capítol 4, "La escola de la elección pública clásica y qué falla en la ignorancia racional", critica la visió de l'Escola de l'Elecció Pública clàssica, que atribueix el mal funcionament del govern a la ignorància racional dels votants. Caplan sosté que la irracionalitat va més enllà de la simple manca d'informació; implica una resistència activa a la veritat quan aquesta contradiu les creences preferides. Argumenta que la gent pot preferir aferrar-se a idees esbiaixadess si aquestes reforcen la seva identitat o visió del món.

El Capítol 5, "Irracionalidad racional", desenvolupa en detall aquest concepte. Compara la irracionalitat amb un bé que es consumeix, amb una "corba de demanda d'irracionalitat": com més baix és el "preu" (els costos materials de mantenir una creença irracional), més "quantitat" d'irracionalitat es consumeix. En política, el cost individual de tenir una creença econòmica equivocada és molt baix, ja que un sol vot té una probabilitat gairebé nul·la de canviar el resultat. Això permet que els votants expressin les seves emocions i prejudicis ideològics sense patir-ne les conseqüències materials directes. Caplan discuteix la "versemblança psicològica" de la irracionalitat racional, argumentant que la racionalitat roman "a l'espera", disposada a intervenir només quan l'error esdevé perillós a nivell personal.

El Capítol 6, "De la irracionalidad a la política", examina com la irracionalitat del votant es tradueix en polítiques públiques insensates. Amb votants unànimes en els seus biaixos, les conseqüències per a les polítiques són clares (controls de preus, proteccionisme, regulació laboral per "crear" ocupació). Tot i que la realitat és més complexa amb votants heterogenis, Caplan argumenta que els biaixos sistemàtics influeixen significativament en la demanda política. També discuteix la idea del "vot expressiu", on la gent vota per manifestar la seva identitat i creences més que per influir en el resultat de les polítiques. Cita exemples com els sudistes abans de la Guerra Civil americana, que sobreestimaven el seu poder militar per motius ideològics.

El Capítol 7, "La irracionalidad y la oferta política", analitza com els actors de l'oferta política (polítics, funcionaris, mitjans de comunicació) responen a la irracionalitat dels votants. En comptes de corregir les creences errònies, sovint els resulta més rendible exacerbar-les per guanyar suport. Els polítics sincers que defensarien polítiques econòmicament sòlides poden tenir dificultats per ser elegits si el públic manté opinions contràries i esbiaixades. Això porta a un cicle on la demanda irracional genera una oferta política que la satisfà, perpetuant polítiques subòptimes.

El Capítol 8, "El «fundamentalismo del mercado» contra la religión de la democracia", contraposa la lògica del mercat amb la del sistema democràtic. Mentre que els mercats proporcionen mecanismes per corregir errors i recompensar la informació (com els mercats de futurs), la democràcia es veu afectada per la irracionalitat sense costos per a l'individu. Caplan critica el rebuig públic al "Mercado para el Análisis Político" (PAM), un intent de crear un mercat de prediccions sobre esdeveniments polítics, com a exemple de la prevalença del "dogma antimercado" fins i tot davant de proves de l'eficàcia dels mercats per agregar informació.

La Conclusió, "Elogio del estudio de la locura", reitera la importància de comprendre i estudiar la irracionalitat en la política. Caplan argumenta que les teories basades en la suposició de la racionalitat perfecta tenen un valor científic marginal limitat. Emfatitza que la irracionalitat no només afecta la demanda política sinó també l'oferta, i que sovint és més rendible per als actors polítics explotar la irracionalitat que intentar-la corregir. Conclou que les ciències socials han obstaculitzat el seu propi progrés al no reconèixer el paper central de la neciesa en afers polítics.

Al Apèndix Tècnic, es detallen els factors que correlacionen amb una manera de pensar més propera a la dels economistes, com ara un major nivell d'educació, ser home, i expectatives d'ingressos futurs més elevades.

En resum, "El Mito del Votante Racional" presenta un argument desafiant i ben fonamentat que la irracionalitat sistemàtica dels votants és un factor clau per comprendre els defectes de les democràcies modernes. Caplan distingeix entre ignorància racional i irracionalitat racional, argumentant que la segona és una elecció influïda per incentius psicològics i que té profundes implicacions per a la qualitat de les polítiques públiques. El llibre convida a reconsiderar les suposicions bàsiques de l'economia política i a prestar més atenció al paper de les creences esbiaixades en el procés democràtic.

PS. Una víctima més dels paranys de la política ha estat Amanda Pritchard, que ha perdut la feina després que tanquessin el NHS England com agència pública. Una executiva Kleenex més. Tretze anys després desapareix l'experiment d'allunyar la politització de la gestió sanitària a Anglaterra, per aquí aprop ni tant sols ho hem intentat. RIP. Les claus per entendre la política i la gestió sanitària del moment les trobareu dins l'entrevista d'avui a FT. Malauradament no hi haurà resposta i cal recordar als que no se n'han adonat, que la degradació de la cosa pública ha agafat una forta empenta, tant forta com la pressió fiscal.

Podem reimaginar-nos un nou capitalisme? (6)

The crisis of democratic capitalism 

En aquest blog he escrit anteriorment sobre reimaginar el capitalisme i realment fa molts anys que se'n parla però qui dia passa any empeny. Ara en Martin Wolf, cap d'opinió de FT acaba de publicar un llibre il·lustrador. Ho és perquè explica amb tot detall com hem arribat fins aquí, i què caldria fer per avançar en les institucions democràtiques i econòmiques, i evitar així més d'un ensurt.

Aquest llibre argumenta que quan la gent no veu cap esperança i perd la confiança en les institucions democràtiques, tant la democràcia com els mercats poden fallar i fallaran. En resum, cal una reforma radical i valenta de l'economia capitalista i hem d'enfortir els vincles econòmics de la ciutadania alhora que s'aprofundeix la cooperació internacional.

El llibre es llegeix magníficament, està molt ben escrit. Destaco alguns paràgrafs clau:

A market economy that operates under trustworthy rules, rather than the whims of the powerful, underpins prosperity and lowers the stakes of politics. In turn, a competitive democracy induces politicians to offer policies that will improve the performance of the economy and so the welfare of the people. Beyond these practical reasons for the marriage of liberal democracy and market economy, there is also a moral one: both are founded on a belief in the value of human agency—people have a right to do the best they can for themselves; people have a similar right to exercise a voice in public decisions. At bottom, both are complementary aspects of human freedom and dignity.

Els objectius de reforma del capitalisme democràtic haurien de ser:

• Un nivell de vida creixent, àmpliament compartit i sostenible
• Bona feina per a aquells que poden treballar i estan preparats per fer-ho
• Igualtat d'oportunitats
• Seguretat per a qui ho necessiti
• Acabar amb privilegis especials per a uns pocs

Removing harms, not universal happiness, is the objective. The approach to reform is that of “piecemeal social engineering,” as recommended by Karl Popper, not the revolutionary overreach that has so often brought calamity.

Behind these specific proposals is a wider perspective. A universal suffrage democracy will insist on a citizenship that is both economic and political. This means that business cannot be free to do whatever it wishes. It means that taxes must be paid, including by the economically powerful. It means that the state must be competent and active, yet also law-governed and accountable. All of this was the clear lesson of the twentieth century.

I sobre el concepte de ciutadania, el que no és i el que és:

Here are things this does not mean.

It does not mean that democratic states should have no concern for the welfare of noncitizens. Nor does it mean that it sees the success of its own citizens as a mirror image of the failures of others. On the contrary, it must seek mutually beneficial relations with other states.

It does not mean that states should cut themselves off from free and fruitful exchange with outsiders. Trade, movement of ideas, movement of people, and movement of capital, properly regulated, can be highly beneficial.

It does not mean that states should avoid cooperating closely with one another to achieve shared goals. This applies above all to actions designed to protect the global environment.

Yet there are things it clearly does mean.

It means that the first concern of democratic states is the welfare of their citizens. If this is to be real, certain things must follow.

Every citizen should have the reasonable possibility of acquiring an education that would allow them to participate as fully as possible in the life of a high-skilled modern economy.

Every citizen should also have the security needed to thrive, even if burdened by the ill luck of illness, disability, and other misfortunes.

Every citizen should have the protections needed to be free from abuse, physical and mental.

Every citizen should be able to cooperate with other workers in order to protect their collective rights.

Every citizen, and especially successful ones, should expect to pay taxes sufficient to sustain such a society.

Those who manage corporations should understand that they have obligations to the societies that make their existence possible.

Citizens are entitled to decide who is allowed to come and work in their countries and who is entitled to share the obligations and rights of citizenship with them.

Politics must be susceptible to the influence of all citizens, not just the wealthiest.

Policy should seek to create and sustain a vigorous middle class, while ensuring a safety net for everybody.

All citizens, whatever their race, ethnicity, religion, or gender are entitled to equality of treatment by the state and the law.

The West cannot go back to the 1960s. It cannot go back to a world of mass industrialization, where most educated women did not work, where there were clear ethnic and racial hierarchies, and where the Western countries still dominated the globe.

Missatge contundent pels qui el vulguin sentir, no podem tornar als 60s, i de vegades penso que hi anem de camí.

I per aquells que no els agrada el capitalisme i el voldrien fer desaparèixer, unes paraules de recordança: 

There are, it is true, alternative ways to seek power under democratic capitalism. All will fail. One extreme is to offer a fully socialized economy. But the economy will founder, and the rulers will be forced out of power or seize it undemocratically, as happened most recently in Venezuela. An opposite extreme is to marry laissez-faire economics to a populism founded on anti-intellectualism, racism, and cultural conservatism. Such pluto-populism is also likely to end in an autocracy in which even plutocrats are insecure. A still faster route to autocracy is via a blending of the two extremes in nationalist socialism (or national socialism). This combines a welfare state with arbitrary rule by demagogues. This, too, will ultimately ruin both the economy and democracy, as the unaccountable gangster in charge rewards cronies and punishes opponents.

 Human beings must act collectively as well as individually. Acting together, within a democracy, means acting and thinking as citizens.

If we do not do so, democracy will fail, and our freedoms will evaporate.

It is our generation’s duty to ensure it does not. It took too long to see the danger. Now it is a moment of great fear and faint hope. We must recognize the danger and fight now if we are to turn the hope into reality. If we fail, the light of political and personal freedom might once again disappear from the world.

L'alerta és clara per qui la vulgui sentir, és el deure de la nostra generació, ens hi juguem la llibertat. Ho diu ben clar. Actuar depèn de cadascú de nosaltres i de tots nosaltres col·lectivament. 

Per tant, si que és possible reimaginar el capitalisme i en Martin Wolf dona algunes pistes. Molt recomanable la lectura i relectura pausada. Malauradament em temo que a molts dirigents els passarà per alt i ni se'n adonaran que s'ha publicat.

 

Can capitalism be reimagined? (6)

Capitalism: The Story behind the Word 

Can capitalism be reimagined ?(5)

 Woke Capitalism. How Corporate Morality is Sabotaging Democracy

The Oxford dictionary’s definition woke refers to being ‘well informed’ or ‘alert to racial or social discrimination and injustice’.

Essentially, we have two opposing positions. One, from a liberal left position such as Elizabeth Warren’s, agrees that corporations should genuinely and authentically support the broad interests of society rather than just focusing on shareholders. Another, from a traditional right-wing perspective, believes that corporations should be purely economic entities and not interfere directly in social or political matters. This book has taken a third position. That is, despite how it looks on the surface, corporate engagement with progressive politics is harming democracy and preventing actual progress. What this means is that being critical of woke capitalism does have to necessitate a dismissal of  progressive politics. Waking up to the realities of woke capitalism means not being fooled into thinking that it represents any genuine underlying change to the primary interests that capitalist corporations are willing or able to pursue.

The real effects of woke capitalism are not about the success of left activism in gaining support from big business. They are about ensuring that there is no fundamental reform of the dominant neoliberal world order that has exacerbated inequality, fuelled fascist populism, and stood by as the climate crisis escalates. Dismissing woke capitalism as just another example of virtue signalling is counterproductive in that it fails to take seriously the real damage that woke capitalism can do. Laughing at corporate progressiveness as a superficial and inauthentic business practice entirely underestimates its real power. This is not simply about the short-term profitability assumed by the ‘go woke, or go broke’ credo. Going woke is about ensuring that market capitalism can continue on the trajectory that it has been on for the past 40 years. Woke capitalism is a strategy for maintaining the economic and political status quo and for quelling criticism.

Planetary health

 Safeguarding human health in the Anthropocene epoch: report of The Rockefeller Foundation–Lancet Commission on planetary health

The Anthropocene is functionally and stratigraphically distinct from the Holocene

The Conservation Revolution. Radical Ideas for Saving Nature beyond the Anthropocene

Two key articles and a book on the topic of planetary health.

Our more grounded goal was to distil the main issues at stake in these complex debates, which we argue revolve around two main axes: the human–nature dichotomy and the ecological merits or perils of contemporary capitalism. Both issues are not straightforward, and there can be no straightforward, black-and-white arguments for or against them. Indeed, there is a distinct danger in presenting them this way, as it does not correspond to empirical reality and the nuances of the debate. We therefore need to do justice to the potentially radical natures of these alternative proposals by discussing them in more depth to show in greater detail how and why they are radical and important, yet contain several untenable contradictions.

 

Mazzucato as a supplier of a flattering narrative for politicians (2)

Mission Economy. A Moonshot Guide to Changing Capitalism

My former post on a recent book by Mazzucato was based on a comment by McCloskey. Now, she has published a new one, and the best comment has been made by John Kay, clear message, I don't have anything to add.

Ever since 1969, people have asked themselves why if humans can land on the moon, can’t they solve pressing problems here on Earth, such as poverty, dementia and climate change. Mariana Mazzucato offers an answer: if only governments would apply the mission-driven methods of the Apollo project, they could.

Mission Economy, the new book from the high-profile economist noted for her advocacy of a more active state, contains many screenshots of the whiteboards beloved of brainstorming meetings, each with an ambitious goal at the top: secure the future of mobility, clean oceans, defeat cancer; below is a jumble of boxes and circles linked by multidirectional arrows.

We need a “solutions based economy”, driven and co-ordinated by more powerful governments engaged in every stage of the process of innovation.

But Apollo was a success because the objective was specific and limited; the basic science was well understood, even if many subsidiary technological developments were needed to make the mission feasible; and the political commitment to the project was sufficiently strong to make budget overruns almost irrelevant. Centrally directed missions have sometimes succeeded when these conditions are in place; Apollo was a response to the Soviet Union’s pioneering launch of a human into space, and the greatest achievement of the USSR was the mobilisation of resources to defeat Nazi Germany.

Nixon’s war on cancer, explicitly modelled on the Apollo programme, was a failure because cancer is not a single illness and too little was then — or now — understood about the science of cell mutation. Mao’s Great Leap Forward, a vain bid to create an industrial society within five years, proved to be one of the greatest economic and humanitarian disasters in human history. At least 30m people died.

Democratic societies have more checks and balances to protect them from visionary leaders driven by missions and enthused by moonshots, but the characteristics which made the Great Leap Forward a catastrophe are nevertheless still evident in attenuated version.

With political direction of innovation we regularly encounter grandiosity of ambition and scale; the belief that strength of commitment overcomes practical problems; an absence of honest feedback; the suppression of sceptical comment and marginalisation of sceptical commentators. All these were seen in Britain’s experience with Concorde, the Channel Tunnel and the AGR nuclear reactor programme, some of the worst commercial projects in history. More recently, there is the £12bn wasted on the NHS computerisation programme — a project that Mazzucato mentions, though only to blame private contractors for their failure to deliver on the political imperative.

On a smaller scale, Britain has suffered in the last year from the delays resulting from Public Health England’s insistence on central control of the coronavirus testing programme and the predictable fiasco of the attempt to sideline the expertise of Apple and Google in order to develop a uniquely advanced NHS test and trace app. And in September there was prime minister Boris Johnson’s “operation moonshot”, designed to control the coronavirus by testing 10m people daily in early 2021.

In contrast to these failures, the rapid development of vaccines is, at least provisionally, a success story. That development is not the product of visionary central direction but is the result of a competitive process with many different teams around the world attempting to be among the first across the finishing line.

Their work has drawn on a combination of existing academic science with the expertise in development and testing and the manufacturing and logistics capabilities of the global pharmaceutical industry. The role of government, appropriately, has primarily been in funding basic research and assuring that there will be a rewarding market for successful products.

Mazzucato lists “twenty things we wouldn’t have without space travel”. Athletic shoes, CAT scanners, home insulation, baby formula, artificial limbs. Yes, really. But beyond the ridiculous headline, we see the reality of productive innovation: a decentralised process in which developers draw on and help create the collective intelligence that leads to constant incremental improvement in so many fields — including better running shoes.

When historians of technology review the past 50 years, they may conclude that Neil Armstrong exaggerated when he announced “one giant leap for mankind”. The “new frontier” of the late 1960s turned out to be, not space, but information technology. And the development of IT was characterised by a striking absence of centralised vision and direction.

No moonshots; but piecemeal innovation through disciplined pluralism in which temporary winners were almost always displaced as they failed to anticipate the next step of the journey. Do you remember Digital Equipment, Word Perfect, Wang Laboratories, CompuServe, Netscape, AOL, BlackBerry? Each once a leader, now forgotten. Even Apple suffered more than one near-death experience, Microsoft failed to anticipate mobile computing or the cloud, IBM was swept out of the industry it had created.

Mazzucato has correctly emphasised the contribution of state funded basic research to Silicon Valley, but thank goodness the development was in the hands of Steve Jobs, Travis Kalanick and Elon Musk rather than a committee in the department of commerce.

No one has, or could have, the knowledge of present or future required to create or implement successfully the strategies that Mazzucato recommends. Take her modern signature example — Germany’s Energiewende, or energy transition to renewables. You will not learn from Mission Economy that this highly political, much publicised and wildly expensive project has brought about significantly smaller reductions in carbon emissions than Britain’s quiet, economically and socially beneficial substitution of gas for coal.

The failure of the Energiewende illustrates the dangers of moonshots and the mission economy. As talk of a “Green New Deal” becomes more frequent on both sides of the Atlantic, the prospect of more large, costly and ineffectual visionary projects grows.

Politicians readily fall in love with such proposals, and Mazzucato is not shy in reminding us how anxious they are to engage with her in discussing them. But the vision that propelled China’s economic development was not Mao’s Great Leap Forward or Cultural Revolution, but Deng’s “it doesn’t matter whether a cat is black or white if it catches mice”. It is more rewarding and effective to build better mousetraps than to shoot for a mice-free world.

John Kay is an economist, author and fellow of St John’s College, Oxford

 

Prophets and self-fulfilling prophecies

 The Corona Crash. How the Pandemic Will Change Capitalism

Always you may find a prophet around the corner. Fukuyama predicted the end of history, the triumph of liberal democracy and the arrival of post-ideological world. Recently Y. N. Harari predicted the end of liberalism and the arrival of a post-humanism and nothing happened. The history goes on and some of them only may expect that their predictions transform into self-fulfilling prophecies. This is the case of today's book. It distorts reality to adjust to the ideology and desires of the author. I must say that some parts may be true, but on the whole, reading it is a waste of time in my opinion. Just some pieces, and you may judge:

In this context, the suggestion that governments must refrain from ‘interfering’ in the forces of free market competition to create jobs, reduce inequality and increase environmental sustainability is laughable. We do not live in a competitive economy – we live in a planned economy. But the planning is not democratic – it is being undertaken by central bankers, senior politicians and their advisors in big business and finance.

For the rich world, the lesson of the coronavirus crisis is that states can spend to meet the needs of their populations without limit. For the vast majority of the world’s population, this crisis will simply reinforce what they already knew: that the poorer, less powerful members of the international ‘community’ most certainly can’t. Socialists in the Global North must learn the right lesson: that the limits of fiscal policy are determined by political power. International solidarity requires us to return to the issue of debt forgiveness and push for relief for Global South states when this crisis is over.

The free market ideology which serves to legitimise forms of government intervention that support the interests of capital and prohibit state interventions that might increase the power of workers has been placed under significant strain in the period since the financial crisis. As we have seen, the foundation of this ideology is the separation between politics and economics.

You may remember that with the great recession there were voices saying that capitalism was in crisis and there was a need to rebuild it. And?. Any system lives in continous unstability. This is not the end, it needs an urgent fine tuning right now but absolutely different from the book proposal.

 

Opioid crisis

Deaths of Despair and the Future of Capitalism

Beyond covid crisis there is still another one in US: the opioid crisis. The most relevant book on the topic is the Case-Deaton one.

We are telling the story in the way that we uncovered it, starting with midlife deaths of all kinds. We then focused on the immediate causes, which turned out to be deaths of despair among whites plus a slowdown and reversal in deaths from heart disease, which, until then, had been a main engine of mortality decline. Unfortunately, deaths of despair are not only afflicting middle-aged whites. While the elderly have been largely exempt, there have also been rapid increases in deaths of despair—particularly from overdoses and suicides—among younger whites. For whites between the ages of forty-five and fifty-four, deaths of despair tripled from 1990 to 2017. In 2017, this midlife age-group
had the highest rate of mortality from deaths of despair. But whites in younger age-groups were also doing badly and their deaths rose even more rapidly, accelerating in the last few years.

 Drug overdoses are the single largest category of deaths of despair. They are part of a broader epidemic that includes death from alcoholism and suicide, a reflection of the social failures that we have described in this book. Yet the behavior of the pharmaceutical companies caused more deaths than would otherwise have happened, showering gasoline on smoldering despair. Stopping the drug epidemic will not eliminate the root causes of deaths of despair, but it will save many lives and should be an immediate priority. Addiction is extremely hard to treat, even with the cooperation of the addict. There appears to be wide agreement that medication-assisted treatment can be effective, but it is not available to everyone, often because of cost.

Ps. Medicaments i risc de pneumònia

 Els analgèsics opiacis causen depressió respiratòria amb la hipoventilació pulmonar resultant;
alguns d’ells (codeïna, morfina, fentanil i metadona) també tenen efectes immunosupressors.
Incrementen el risc de pneumònia i la mortalitat respiratòria en un 40 a 75%.26,27,28
L’any 2018, uns 50 milions de persones als EUA (15% de la població adulta, 25% entre els més
grans de 65 anys) reberen una mitjana de 3,4 prescripcions d’analgèsics opiacis, i 10 milions de
persones reconeixien consum exagerat d’analgèsics de prescripció mèdica.29 A Europa en els
últims anys el consum d’opiacis suaus y forts ha augmentat, sobretot entre la gent gran.30,31
Fentanil i morfina son els opiacis forts més consumits, i més recentment oxicodona. El
tramadol, que és també inhibidor de la recaptació de serotonina, és l’opiaci suau més consumit.
En dos estudis observacionals de publicació recent, el consum de tramadol, comparat amb el
d’AINE, es va associar a una mortalitat 1,6 a 2,6 vegades més alta,32,33 sobretot en pacients
amb infecció i en pacients amb malaltia respiratòria.

Can capitalism be reimagined? (4)

Rethinking Capitalism lectures

From UCL Institute for Innovation and Public Purpose;

Western Capitalism is in crisis, with falling productivity, investment and living standards, widening inequality, financial instability and the growing threat of climate change. This undergraduate module provides students with a critical perspective on these ‘grand-challenges’ and introduces them to new approaches to economics and policy which challenge standard thinking.
The module draws on the book “Rethinking Capitalism”, edited by Mariana Mazzucato (Director of IIPP) and Michael Jacobs (Visiting fellow in the UCL School of Public Policy). It features guest academic lectures from some of the chapter authors which can be viewed below. These academic lectures are combined with presentations by policy makers working at the frontline of the issues under discussion

Can capitalism be reimagined? (3)

The future of capitalism

Martin Wolf said that this book was one of his main references. And I agree, it contains many well structured messages. Specially, it links economics with politics, quite a difficult issue:

 Our political systems are democratic, but the details of their architecture have increasingly inclined them to polarization. Most of our voting systems favour the two largest parties. So, the menu of choice facing voters depends upon what these two parties offer. The key dangerous step has been that, in the name of greater democracy, in many countries the major political parties have empowered their members to elect their leaders. This has replaced a system in which the leader of a party was drawn from among its most experienced people, and often chosen by its elected representatives.

Leaders can promote new narratives, but the decline of trust in political leaders has inverted authority; people pay more attention to those at the hub of their social networks than to the talking heads on the television. The networks, however, have become self-contained echo-chambers and so we even lack the common space in which to communicate. This is enormously damaging because participation in a common network constitutes the common knowledge that we all hear the same narratives.

 Reduced to a sentence, shared identity becomes the foundation for far-sighted reciprocity. Societies that succeed in building such belief systems work better than those based on either individualism or any of the revivalist ideologies. Individualist societies forfeit the vast potential of public goods. The revivalist ideologies are each based on hatred of some other part of society and are culs-de-sac to conflict. In a healthy society, those who become successful have been reared into acceptance of that web of reciprocal obligations.

 In contrast to the Utilitarian vision of autonomous individuals, each generating utility from their own consumption, and counting equally in the great moral arithmetic of total utility, the atoms of a real society are relationships. In contrast to the psychopathic selfishness of economic man restrained by the Platonic guardians of social paternalism, normal people recognize that relationships bring obligations, and that meeting them is central to our sense of purpose in life. The toxic combination of Platonic Guardians and economic man that has dominated public policy has inexorably stripped people of moral responsibility, shifting obligations to the paternalist state. In a bizarre parody of medieval religion, ordinary people are cast as sinners who need to be ruled by exceptional people – the moral meritocracy.

He is in favour of inclusive politics. Me too. Definitely, capitalism can be reimagined.

Can capitalism be reimagined? (2)

Capitalism at Risk: Rethinking the Role of Business

Ten years after its first release, a new and updated edition of this book is available. Let me say that the book by Rebecca Henderson is better than this one. Anyway, this is an additional reference to take into account.

WHAT, THEN, should be done about the challenges facing market capitalism? And what, specifically, is the role of business in this effort? In our conversations, we heard answers reflecting a spectrum of views. Although executives in our forums did not use our terminology, their positions clustered into four broad categories that we term business as bystander, business as activist, business as innovator, and business as usual.

Ten years after, the same views...(?)

Can capitalism be reimagined?

Reimagining Capitalism in a World on Fire

A new book says that reimagining is possible. Rebecca Henderson is a well known reference for her studies on pharmaceutical innovation for decades. Beyond pharma, she is recognised by her works on innovation in general. Now, she has released a book on Reimagining Capitalism and this may sound a huge goal. Rebecca provides clear hints about what can be done, and says:

I spend a good chunk of my time now working with business people who are thinking of doing things differently. They can see the need for change. They can even see a way forward. But they hesitate. They are busy. They don’t feel like doing it today. It sometimes seems as if I’m still at the bottom of that ladder, looking up, waiting for others to take the risk of acting in new and sometimes uncomfortable ways. But I am hopeful. I know three things.
First, I know that this is what change feels like. Challenging the status quo is difficult—and often cold and lonely. We shouldn’t be surprised that the interests that pushed climate denialism for many years are now pushing the idea that there’s nothing we can do. That’s how powerful incumbents always react to the prospect of change.
Second, I am sure it can be done. We have the technology and the resources to fix the problems we face. Humans are infinitely resourceful. If we decide to rebuild our institutions, build a completely circular economy, and halt the damage we are causing to the natural world, we can. In the course of World War II, the Russians moved their entire economy more than a thousand miles to the east—in less than a year. A hundred years ago, the idea that women or people with black or brown skin were just as valuable as white men would have seemed absurd. We’re still fighting that battle, but you can see that we’re going to win.
Last, I am convinced that we have a secret weapon. I spent twenty years of my life working with firms that were trying to transform themselves. I learned that having the right strategy was important, and that redesigning the organization was also critical. But mostly I learned that these were necessary but not sufficient conditions. The firms that mastered change were those that had a reason to do so: the ones that had a purpose greater than simply maximizing profits. People who believe that their work has a meaning beyond themselves can accomplish amazing things, and we have the opportunity to mobilize shared purpose at a global scale.

 The titles of the chapters speak by themselves. You'll get the flavour of a great book, and a personal message (in chapter 8). And don't miss chapter 4 on Aetna CEO and the purpose of the firm.

1 “WHEN THE FACTS CHANGE, I CHANGE MY MIND. WHAT DO YOU DO, SIR?”
Shareholder Value as Yesterday’s Idea
2 REIMAGINING CAPITALISM IN PRACTICE
Welcome to the World’s Most Important Conversation
3 THE BUSINESS CASE FOR REIMAGINING CAPITALISM
Reducing Risk, Increasing Demand, Cutting Costs
4 DEEPLY ROOTED COMMON VALUES
Revolutionizing the Purpose of the Firm
5 REWIRING FINANCE
Learning to Love the Long Term
6 BETWEEN A ROCK AND A HARD PLACE
 Learning to Cooperate
7 PROTECTING WHAT HAS MADE US RICH AND FREE
 Markets, Politics, and the Future of the Capitalist System
8 PEBBLES IN AN AVALANCHE OF CHANGE
 Finding Your Own Path Toward Changing the World

Vaccines for all

How to Develop a COVID-19 Vaccine for All

Messages from Mazzucato and Torreele:

The first, critical step is to adopt a mission-oriented approach that focuses both public and private investments on achieving a clearly defined common goal: developing an effective COVID-19 vaccine(s) that can be produced at global scale rapidly and made universally available for free. Realizing this aim will require firm rules regarding intellectual property (IP), pricing, and manufacturing, designed and enforced in ways that value international collaboration and solidarity, rather than competition between countries.

Second, to maximize the impact on public health, the innovation ecosystem must be steered to use collective intelligence to accelerate advances. Science and medical innovation thrives and progresses when researchers exchange and share knowledge openly, enabling them to build upon one another’s successes and failures in real time.

Third, countries must take the lead in building and buttressing manufacturingcapabilities, particularly in the developing world. While an effective COVID-19 vaccine probably will not be available for another 12-18 months, a concerted effort is needed now to put in place the public and private capacity and infrastructure needed to produce rapidly the billions of doses that will be required.

Because we don’t know yet which vaccine will prove most effective, we may need to invest in a range of assets and technologies. This poses a technological and financial risk that can be overcome only with the help of entrepreneurial states backed by collective, public-interest-driven financing, such as from national and regional development banks, the World Bank, and philanthropic foundations.

Finally, conditions for ensuring global, equitable, and affordable access must be built into any vaccine-development program from the start. This would allow public investments to be structured less like a handout or simple market-fixer, and more like a proactive market-shaper, driven by public objectives.

PS. Masks, tests, treatments, vaccines – why we need a global approach to fighting Covid-19 now
Bill Gates dixit:

 I’m a big believer in capitalism – but some markets simply don’t function properly in a pandemic, and the market for lifesaving supplies is an obvious example. The private sector has an important role to play, but if our strategy for fighting Covid-19 devolves into a bidding war among countries, this disease will kill many more people than it has to.

Edward Hopper. Cape Cod Morning, 1950. Smithsonian American Art Museum

Value creators and extractors

The Value of Everything: Making and Taking in the Global Economy

The rethorics of value is usually plagued with deliberate misunderstandings. Specially, those that quote themselves as value creators may appear on a close look as a value extractors. This is precisely what the book of Marianna Mazucatto does. It identifies the patterns to assess value creation and extraction and the private of public and private roles.Chapter 7 on Extracting Value through the Innovation Economy is specially helpful. You'll find there the patents as a value extraction process or the pharmaceutical pricing discussed in detail. Therefore, a must read.

In modern capitalism, value-extraction is rewarded more highly than value-creation: the productive process that drives a healthy economy and society. From companies driven solely to maximize shareholder value to astronomically high prices of medicines justified through big pharma's 'value pricing', we misidentify taking with making, and have lost sight of what value really means. Once a central plank of economic thought, this concept of value - what it is, why it matters to us - is simply no longer discussed.

 The logical outcome of a combination of monopoly and rigid demand is sky-high prices, and this is precisely what is happening with specialty drugs. It explains why pharmaceutical companies enjoy absurdly high profit margins: in addition to the normal profit rate, they earn huge monopoly rents.59 A value-based assessment of the kind NICE carries out can be helpful because it reduces demand for the monopolists’ drugs and prevents them from charging whatever price they choose. The downside, however, is that increased elasticity of demand for drugs comes at the cost of leaving some patients without the medicines they need, because pharmaceutical companies may not cut their prices enough to treat everyone who needs the drug if doing so would reduce profit margins by more than the companies want.

In search of the balance between government and market

THE LIMITS OF THE MARKET: The Pendulum between Government and Market

Thirty years ago I bought a book that was a key reference MARKETS OR GOVERNMENTS : CHOOSING BETWEEN IMPERFECT ALTERNATIVES. The focus was clear, the government should enter when there is a market failure and try to curb it. This was the message and has been the message for many years. Now we know that the approach was too simplistic. If you want to understand an updated approach to the same issue, check the new book by Paul de Grawe, THE LIMITS OF THE MARKET: The Pendulum between Government and Market. A well written and accessible book that helps to remake the arguments with the evidence of the past years. The chapters:

The Great Economic Pendulum
The Limits of Capitalism
External Limits of Capitalism
Internal Limits of Capitalism
The Utopia of Self-Regulation in the Market System
Who can Save the Market System from Destruction?
External Limits of Governments
Internal Limits of Governments
Who is in Charge? Market or Government?
Rise and Fall of Capitalism: Linear or Cyclical?
The Euro is a Threat to the Market System
The World of Piketty
Pendulum Swings between Markets and Governments

At the end of the book there are two issues that concern the author: inequality and the degradation of environment. The need for internation cooperation on taxation is critical for the first issue, and the functioning of democratic institutions for both. His final comment is a call for action:

The Myth of Sisyphus

Sisyphus was a Greek king who felt stronger and wiser than Zeus, and was punished for his hubris. He was sentenced to push a rock up a mountain every day, after which the rock would roll back down each evening. The following day Sisyphus had to start all over again, continuing for eternity. In his essay The Myth of Sisyphus Albert Camus gave an existentialist interpretation of this well-known Greek myth. Camus sees Sisyphus’s punishment as a metaphor for the absurdity of life. How should we deal with this absurdity, he wonders? One option is to commit suicide. Camus rejects this option. Instead he suggests that we should rebel against the absurdity of life by throwing ourselves into it, living intensely, and being creative. The revolutionary hero is the one who despite the absurdity and knowing that his rebellion will eventually achieve nothing, still sets the rock in motion and remains happy. ‘Il faut s’imaginer Sisyphe heureux’ (‘One must imagine Sisyphus happy’), Camus decided.
That is the position I would like to offer as a guiding principle for the end of this book. It will be extraordinarily difficult to prevent future catastrophes. It may even already be too late. (I am at least a little more optimistic than Albert Camus with his Sisyphus interpretation, which is very bleak indeed.) We have a small chance of preventing decline with the reforms I outlined above. But even if that does not work, we are left with the option of doing as Sisyphus did, of starting again each day. It is the only way of giving meaning to our existence. If we do not take action, our grand children will not forgive us for failing to try to save them. That in itself is sufficient motivation to persist.

Populist health politics, the ultimate nightmare in the post-truth society

What is populism?

Nowadays populism is on the rise, unfortunately. Politicians embrace such option because we are in the post-truth society. As far as truth or facts are not relevant, populists may create false frames without any scruples. A worrying trend, and this is the reason why some people disconnect from public affairs, since it is so difficult to accept such exposure to ficticious reality. In my country, the health minister created a false frame (and he succeded on that, at least up to now). He said that he would "deprivatise" hospitals while hospital privatisation had not occurred formerly, only exceptional contracting out was necessary in certain situations with unattended demand. You can't undo what you have not done before.
Anyway, if you want to know the basis of populist strategists you should read this book :

Populism's core is a rejection of pluralism. Populists will always claim that they and they alone represent the people and their true interests. Müller also shows that, contrary to conventional wisdom, populists can govern on the basis of their claim to exclusive moral representation of the people: if populists have enough power, they will end up creating an authoritarian state that excludes all those not considered part of the proper "people." The book proposes a number of concrete strategies for how liberal democrats should best deal with populists and, in particular, how to counter their claims to speak exclusively for "the silent majority" or "the real people."

Two comments:

"Populism is not just antiliberal, it is antidemocratic—the permanent shadow of representative politics. That's Jan-Werner Müller's argument in this brilliant book. There is no better guide to the populist passions of the present."—Ivan Krastev, International New York Times
"No one has written more insightfully and knowledgeably about Europe's recent democratic decay than Jan-Werner Müller. Here Müller confronts head on the key questions raised by the resurgence of populism globally. How is it different from other kinds of politics, why is it so dangerous, and how can it be overcome? Müller's depiction of populism as democracy's antipluralist, moralistic shadow is masterful."—Dani Rodrik, Harvard University

Sadly, populism is on the right and on the left, they adopt the same strategies and they finally will undermine democracy. Now is the moment to keep away from populism, to fight against populism.

PS. In the last chapter you'll find the right strategy to fight populism, 10 actions:

6. Populists should be criticized for what they are—a real danger to democracy (and not just to “liberalism”). But that does not mean that one should not engage them in political debate. Talking with populists is not the same as talking like populists. One can take the problems they raise seriously without accepting the ways in which they frame these problems.

PS. In London Review of Books, Jan-Werner Müller says:

Populists aren’t just fantasy politicians; what they say and do can be in response to real grievances, and can have very real consequences. But it is important to appreciate that they aren’t just like other politicians, with a bit more rabble-rousing rhetoric thrown in. They define an alternative political reality in which their monopoly on the representation of the ‘real people’ is all that matters: in Trump’s case, an alt-reality under the auspices of the alt-right. At best, populists will waste years for their countries, as Berlusconi did in Italy. In the US, this will probably mean a free hand for K Street lobbyists and all-out crony capitalism (or, in the case of Trump, maybe capitalism in one family); continual attempts to undermine checks and balances (including assaults on judges as enemies of the people when they rule against what real citizens want; and life being made extremely difficult for the media); and government as a kind of reality TV show with plenty of bread and circuses. And the worst case? Regime change in the United States of America.

Inequality in the winner-take-all society

A recent op-ed by Joseph Stiglitz on "Innovation enigma" brought me to retrieve a book of 1995 by Robert H. Frank, "The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us". Nowadays, the issue of raising inequality is on headlines, and often it is considered as a consequence of economic crisis. 
Frank argued two decades years ago that more and more the current economy and other institutions are moving toward a state where very few winners take very much, while the rest are left with little. He attributes this, in part, to the modern structure of markets and technology. It was written before the impact of internet on business and it was a clear alert about what has happened.
Now Thomas Piketty in his book "Capital in the 21st century" argues additionally that when the rate of capital accumulation grows faster than the economy, then inequality increases. And inequality is not an accident but rather a feature of capitalism that can be reversed only through state intervention. The book thus argues that unless capitalism is reformed, the very democratic order will be threatened.
If you combine both perspectives, you must be convinced that it is not only an issue of state intervention, I can't imagine certain parts of global markets ("winner-take-all" ) being abolished or reformed without a global government. That's why I'm not sure about the size of the current threat and when it will explode.
Stiglitz adds an uncertain landscape for innovation, and therefore for future dynamic efficiency of markets (Shumpeter style).
Taking all these pieces together, there is no clear recommendation. Today I just want to state again that correlation is not causation. Inequality and crisis are a contemporary fact, though the trend goes back a long way and it is very much deeper. Avoiding reductionist perspectives is my first suggestion.

PS. Since the implications of wealth inequality and health are huge as I explained in this post, my today comment maybe adds more shades instead of light.

PS. "Health inequalities result from social inequalities. Action on health inequalities requires action across all the social determinants of health." The Marmot Review: Fair Society Healthy Lives

PS. If you want to know why Messi's salary has increased this week, have a look at Frank's book, the answer is there.

Capitalism and morality

Market Reasoning as Moral Reasoning: Why Economists Should Re-engage with Political Philosophy

I found this article. Have a look at the abstract:

In my book What Money Can't Buy: The Moral Limits of Markets (2012), I try to show that market values and market reasoning increasingly reach into spheres of life previously governed by nonmarket norms. I argue that this tendency is troubling; putting a price on every human activity erodes certain moral and civic goods worth caring about. We therefore need a public debate about where markets serve the public good and where they don't belong. In this article, I would like to develop a related theme: When it comes to deciding whether these or those goods should be allocated by the market or by nonmarket principles, economics is a poor guide. Deciding which social practices should be governed by market mechanisms requires a form of economic reasoning that is bound up with moral reasoning. But mainstream economic thinking currently asserts its independence from the contested terrain of moral and political philosophy. If economics is to help us decide where markets serve the public good and where they don't belong, it should relinquish the claim to be a value-neutral science and reconnect with its origins in moral and political philosophy.

There are health economics implications, with a little effort you can find them.