Abortion is a great example of a topic where the two sides argue from completely different perspectives. One side—pro-choice—argues that abortion is a private matter, and hence it is up to the woman to decide. The other—pro-file—claims that a fetus is a human life, and hence abortion is akin to murder. Is it possible to have a discussion about abortion that overcomes these positions? I would argue that there is. But, also, I would argue that this issue combines two moral biases, or bugs, that we face: our need for categorical answers and the role of purity.

The issue at hand is to identify when a human life starts. And here we run into the first problem: this question makes no sense. A human life gradually appears from the moment the egg is fertilised. We seek a discrete function, but it is continuous. Therefore, we have to define an arbitrary threshold—and that is OK. Notice that the two extremes of this debate have defined a threshold as well: one at conception (week 0) and the other one at delivery (week 40 or when the baby is born). In fairness, the pro-choice stance is generally against late-stage abortions absent medical reasons; yet slogans such as my body my choice are not so nuanced.

We need to define a threshold so that it can be written into law. But the difficulty on defining this threshold comes from our flawed moral intuitions. A key insight from The Moral Landscape is to view morality as one views health. Our moral intuitions, as our health intuitions, can be, and often are, wrong. These moral intuitions are an evolutionary trait. As is our desire for sweet food. Yet this desire can be bad for our health. In this case, a usual reaction for any given abortion threshold X would be to argue that someone whose pregnancy is at X + 1 is basically the same as someone at X. Sure, but we still need the X.

An arbitrary threshold needs to be defined, and we need to be comfortable even if X + 1 is almost the same as X. But some people would not accept this, as they see abortion as a sin. The concept of purity—sin can be seen as the destruction of this purity—is ingrained in the psychology of an important part of the population. The figure below, from Haidt and Graham (2007), shows that liberals and conservatives differ substantially in this point.


This, again, appears to be a failure of our moral intuition. Some people might argue that purity appeared as a way to enforce social norms. For instance, stealing is probably bad for the survival of a tribe. Hence, as years pass, and as the tribe punishes these actions, those with strong moral intuitions against stealing are more likely to succeed. This could be an explanation, but as mentioned earlier it is no different than our desire for sweet food. Put it differently, one could also use an evolutionary rationale for racism. Yet we (well, most of us at least) understand that it is morally wrong.

I find the topic of abortion to be a showcase of many of the failures of our moral intuitions, and a clear example of how much more we need to think about morality from an objective perspective. Or, at least, how much more we need to reduce the presence of religious concepts—purity, sin, commandments—when discussing about it.

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Justice, by Michael J. Sandel

Michael J. Sandel is a professor at Harvard University who has been teaching a course called Justice for many years. In it, Professor Sandel talks about the different approaches to morality and justice, from Aristotle to Rawls, Kant and Mills. And some years ago he condensed the course in a book called “Justice: What’s the Right Thing to Do?“.

The book is a great read to understand the views of different moral philosophers on how justice should be organised. This is not an in-depth review of the different schools of thought, but more of an overview of them. I would maybe describe it as an in-depth introduction to moral philosophy applied to justice. It left me wanting to know more about certain philosophers, and I found that he puts more effort in challenging some ideas than others, but I learned a whole lot and it has made me rethink some of my convictions.

I am not going to write a long review because I would feel I am leaving too much out. Suffice to say that he talks about utilitarism, libertarism, Kant, Rawls, and Aristotle, and how their approaches informed morality and U.S. Supreme Court decisions. He talks about affirmative action, patriotism, abortion… The natural blend between philosophy and legal matters is what makes this book outstanding.

Take, for instance, the idea of Aristotle that one needs to define the telos, or the purpose, before understanding whether something is right or wrong. And take the case of Casey Martin, a professional golfer that had serious problems to walk. As a result, he asked for permission to use a golf cart during the tournaments, a request that was denied on the basis that the rules do not allow it. He took the case to court and referred to the Disability Act of 1990, which required reasonable accommodations for people with disabilities, provided the change did not fundamentally alter the nature of the activity.

So the case was about the telos, or nature, of golf. Does the nature of golf include walking from hole to hole, as some golfers testifying against Casey argued? The Court finally ruled in favour of Casey arguing that the nature of golf is shot-making, and adding that the effort of walking during the 18 holes is “nutritionally less than a Big Mac”.

But Justice Scalia disagreed. His point was not that the telos of golf included walking—it was that there is no such thing as an objective telos of games (other than amusement) and hence there is no basis to critically assess their arbitrary rules. In other words, if the PGA claimed that cars cannot be used, then this is it since any rule governing games is arbitrary and not part of their telos.

It’s this applied way of discussing philosophical ideas that sets this book apart. A highly recommended read.

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Economics of voluntary information sharing

Almost a month ago now I attended the wonderful 3rd Bristol Workshop in Banking and Financial Intermediation at the University of Bristol. I was there to act as discussant of a paper titled Economics of voluntary information sharing, presented by Jason Sturgess from Queen Mary. Other names in the workshop included Marie Hoerova, Jean-Charles Rochet, o Javier Suarez.

The goal of the paper is to understand why banks might want to share information about their borrowers with other banks. In some countries, the sharing is mandatory—in Spain, for instance, banks send the information of their borrowers, such as loan amounts, identify, and repayments, to the credit register. This has allowed wonderful empirical banking papers in the recent years (AER, Econometrica, JPE).

But in other countries, such sharing is voluntary. And why would a bank share information with other banks about its own borrowers? Because it would get more information in return. In particular, the moment you join the credit bureau, you have access to the information of all the members. This might be very useful especially if you are a small bank.

Let’s say you are a small bank. New borrowers knock on your door to ask for credit. What do you know about them? Very little, since they are new to you. You have no prior relationship, and hence you cannot see how much they’ve been earning, whether they have paid the previous credit on time, etc. For all you know, they can be someone rejected from their previous bank for not paying. You are faced, hence, with adverse selection. If you could identify which borrowers have previously been rejected from those borrowers that are simply looking for new credit, life would be easier. And that’s what the credit bureau provides.

This is, in theory, less of an issue for a big bank that has a high market share. The reason is that this bank already knows many borrowers, and hence whenever a new borrowers shows up they are less likely to be a rejected one. And, by sharing information, the big dominating bank would be losing substantial information advantages.

All these stories can be empirically assessed with the data that Jose Liberti, Jason Sturgess, and Andrew Sutherland employ in the paper. They have the information contained in the credit bureau. As such, their information is restricted to current members—not all banks have joined it—but these members provided all the past credit history, not only from the moment they joined. Hence, they can study why banks decide to join earlier or later, what happens to credit supply after a lender joins, etc.

The paper confirms many of the previous intuitions—which are formalised in several models in the 90s and early 2000s. Given the granularity of the data, they are able to control for many potentially confounding factors. In the jargon of the sector, they can use plenty of fixed effects. This has been the trend in the last decade or so in empirical banking, as we saw the explosion of papers using national credit registers (I got some as well). What this paper brings to the table is the notion of voluntary information sharing, which I found very novel and extremely interesting.

As I final note, you can see below a picture of the place where we had dinner the day before the workshop.


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Glenn Loury

Glenn C. Loury is the Merton P. Stoltz Professor of Social Sciences at Brown University. He got his PhD in Economics from MIT in 1976. By 1983, he had two QJEs, one REStud, one AER, and one Econometrica. Yep. These are four of the so-called “Top 5” journals in economics (the other being JPE), and the vast majority of the profession never gets to publish there even once. He was the first African-American to get a tenured position at the Economics Department at Harvard University.

To say that I admire Professor Loury is an understatement. Not only is his academic career something to look up to, his thinking around issues of race stands out enormously among the usual commentators. For the last years he has been hosting the Glenn Show at Bloggingheads.tv. His conversations with John McWhorter are fantastic. He also has the habit of steelmanning “adversary” positions; this is a huge novelty, as we are used to the complete opposite: to debate against a strawman. He, instead, takes the strongest version of the rival argument and tries to debunk that.

If you want to know more about his thinking, the Glenn Show is a great place to start. He has also delivered multiple lectures that are available in his website. This one with McWhorter, for instance, is brilliant. There is a recent interview in The Chronicle Review. He also appeared in the Making Sense (then Waking Up) podcast by Sam Harris. And he is preparing his memoirs titled “Changing my Mind” which I am eager to read.

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Deep Work, by Cal Newport

I came across Deep Work around a year ago. It was a great time to find out about the book: I was the course director for two undergraduate degrees at Cass and it was becoming difficult to deal with all the work. More than that, it was difficult to combine the nature of the different types of work: research, on one hand, requiring patience, motivation, and trial and error. And a job such as course director on the other hand, which meant dealing with the latest problems that appeared. Not that we had a lot of problems, just the regular amount. In any case, I realised how much my job—the research part—needs deep work. And, more importantly, how little of it I was doing.

Since then, I have been trying—and succeeding more often than not—to schedule blocks of at least two hours to work without interruptions daily. No checking email, no checking web browser, nothing. This means that there is no dopamine release during that period—that is, there is no short-term compensation—but it is the way to make actual progress. The pace at which I am able to work has improved; while still far from my target, the difference between 2017-18 and 2018-19 is significant.

The author of Deep Work is Cal Newport, a Millennial computer scientist that does not have a Facebook account. Deep Work is a book about work that requires deep concentration. In the hyper-connected environment of today, which extends to the work places—hot desks, instant messaging—it turns out that deep work is becoming more and more valuable. This might not always be clear. I have been told, for instance, that I take too long to answer emails sometimes. I have also been asked to put my name in my Twitter account. All these from my colleagues. But it turns out that what institutions end up valuing is what is produced through deep work.

This realisation seems trivial. But what is less trivial is to realise how much of our day-to-day job departs from this principle. Dopamine is again partially to blame: the satisfaction of completing tasks makes us feel better. But it accomplishes very little and, importantly, does not increase our long-term satisfaction. Not at all.

The tension, however, is clear. Some time ago, in a different institution, I remember attending a training about time management and the difference between urgent and important work. Cal Newport talks about deep vs shallow work, but the tension arises from the fact that shallow seems to correlate with (perceived) urgency, while deep and important go usually together.

The book provides evidence from research about the productivity problems from switching tasks constantly and working in a state of semi-distraction. It also provides tricks to overcome these issues. Maybe the most important is “the batching of hard but important intellectual work into long, uninterrupted stretches”. This is what many high performance intellectuals, such as Adam Grant, from Wharton, do.

I could talk a lot more about this. I think it is a topic that links to the lack of meaning that many people of my generation are facing. It links to recent advances in neuroscience which allows us to understand ourselves better. It links to the concept of flow, and how fulfilling it is. But this is not the place and there are thoughts that are still under development. The book is great, I highly recommend it especially if your job involved a significant amount of intellectual work.

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After Life, by Ricky Gervais

Ricky Gervais has produced an amazing piece of art in the form of (for now) six 25-minutes episodes. The show is called After Life, and follows the life of Tony (Ricky), a middle-aged man that has recently lost his partner. The show documents his sorrow and the lack of meaning that he faces. What is the point of life if you cannot share it with the person you love?

After Life explores the issues of meaning, morals, and death from the point of view of humanism. In this sense, the character appears to be Ricky Gervais himself. Why should you live? Why should you be good? These topics are explored with the usual delicious sense of humour that is so particular of the British comedian.

A special mention is reserved for the supporting characters. This is what truly surprised me. They start as caricatures, as comical counterparts to Tony. But little by little, and mirroring Tony’s changes, they gain depth, they become human. It is so natural, so subtle, that is easy to miss. But this is one of the main messages: everyone has their circumstances, everyone has their problems, and as such, one can be compassionate with everybody.

I am more a fan of Ricky’s stand ups than I am of his shows (I have watched—and laughed with—the Golden Globes intros several times), but After Life is superb from beginning to end.

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Saying things in El Pais

Today there is an article in El Pais—in Spanish—where I say some things about the governor of the Bank of England. Mostly I say that he has done great, in particular in terms of managing the increased powers of the institution and his political neutrality. I also mention two of the possible problems that the Bank of England (and central banks in general) might face in the near future: pressures from democratic institutions (with potentially losing some independence) and issues in managing economies in secular stagnation.

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