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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So you’ve been publicly shamed, by Jon Ronson

My first intention was to start this post by mentioning the Danny Baker affair, and linking it to the book I wanted to talk about: So you’ve been publicly shamed, by Jon Ronson. While the situation is not exactly the same as some of the cases commented in the book, the public outrage element is there. Therefore, I wanted to say something along the lines of: it is a good moment to talk about this book, since just two days ago we had an episode of public shaming… Yet the reason why I think this book is great and reveals some issues brought up by social media especially is the fact that I could start the post this way almost any day of the year. There is nothing special this week—there is always another case of online shaming.

Jon Ronson follows the cases of some people that have been publicly shamed, usually through social media, and wonders what happened to them. Jon Ronson is well known for some of his previous books, such as The men who stared at goats and The psychopath test. He has a very particular style—which I would not know how to describe, but I like it. And this book has improved my understanding of something I have become more and more interested in the past months: human nature.

I will just mention a couple of episodes that the book explores. One of them is the case of Justine Sacco, who, while in Heathrow airport on her way to South Africa, she tweeted the following: “Going to Africa. Hope I don’t get AIDS. Just kidding. I’m white!“. When she landed, she was trending topic in Twitter, someone took a picture of her in the airport, was denied the stay in some of the hotels she had booked, and lost her job. Thousands of people tweeted against her.

I have had arguments about this tweet, although the counterparty will remain anonymous. There seems to be honest outrage at it. One could take it as she making fun of the fact that AIDS affects African people relatively more. But one can also take it as making fun of how some white people live in a bubble and think this type of things cannot happen to them. I tend to believe the latter.

But the question is: should that matter? I think so, but I am not sure it does for many people. Some seemed to mildly defend her, such as Andrew Wallenstein: “repugnant as her joke was, there is a difference between outright hate speech and even the most ill-advised attempt at humour…” The charge of hate speech seem to come logically from the charge that the joke was racist.

Sam Biddle, a journalist and one of the first to retweet the joke (to shame her), explains it: “Her destruction was justified, because Justine was a racist, and because attacking her was punching up.” This element is key: I am doing good by destroying this person, because this person is evil. The assumption that Justine was racist did not need to be challenged. The tweet was racist, and hence she must be.

Another of the cases that I found most interesting, especially because I remember it, is the case of Alex and Hank (not their real names). They were in a tech developers conference. It seems they made a joke that could be seen as sexual while a female developer was presenting. The crowd was big so the joke stayed among the two of them… almost. A third one, Adria Richards, heard it. She was so taken back by it—she explains that she felt “in danger“—that she turned around, took a picture of the guys, and tweeted about it. The next day Hank was fired.

How she views her actions is crucial. “There is something about crushing a little kid’s dream that gets me really angry… Yesterday the future of programming was on the line and I made myself heard.” There is a sense of epic, a sense of good versus evil, that is difficult to overstate. When asked how she felt about the fact that he was fired, she says “Not too bad… he’s a white male“.

Hank lost his job. When this happened, he issued a public statement, apologising for the joke and for how he made Adria felt. He also said that “as a result of the picture she took I was let go from my job today. Which sucks because I have 3 kids...” What happened then is that the mob took it with Adria. Not the same people, of course. It came from places like 4chan. And the website of Adria’s employer was attacked by hackers. And Adria was fired.

A parenthesis here. There is something to be studied about the type of shaming, comments and threads that people get depending on their gender. Rape threads were immediate to Justine and Adria. Mercedes Haefer, a 4chan denizen, explains it as follows: “4chan aim to degrade the target, right? And one of the highest degradations for women in our culture is rape… In our society men are supposed to be employed. If they are fired they lose masculinity points… (Adria) robbed that man of his employment, She degraded his masculinity. And so the community responded by degrading her femininity.”

When Adria saw the statement that Hank had posted, she asked to remove any reference to her. As she puts it: “no one would have known he got fired until he complained… maybe he secretly seeded the hate groups. Right?” This does not seem to be the case. But the need to link what happened to her to the evil person that she denounced is understandable.

At the time of writing the book, she did not have a job, while he did. This fact would validate many “Adria supporters” beliefs: at the end, he—a white man—is fine, while she—a jewish woman—is not. Yet if one overcomes the group classifications and think about them as individuals—a father of three who lost the job for a stupid private joke, and a woman who seems to acquire part of her identity by policing private comments—it is not difficult to see why that is the case.

I used to be quite neutral on public shaming. I would not participate in them, but I did not think much of it. Since reading this book, which I highly recommend, I am convinced they are almost always morally wrong, and they come straight from tribal feelings that we should all try to mitigate. They are there, there is no question about it—I barely could sleep last Tuesday—but we should try to keep them in check.

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