Fairness & Nature: Transaction Costs

Transaction costs are the cost of monitoring and enforcing social norms and regulation/legislation. Within institutional economics, institutions determine the costs of economic transactions and hence also determine the well-being of society as a whole by providing incentive structures. Regulations can make the costs of certain activities change according to certain criteria. For example, a requirement for all waste water from industrial premises to be purified before being released into the environment would increase costs for these companies and another example could also be payments made to those who choose not to own cars or extraordinarily high charges for limited car parking spaces (as happens in the German neighbourhood of Vauban).

However, the success of institutional arrangements is dependent upon the transaction cost associated with that particular arrangement in relation to the resources that are actually available. Take the example of a requirement for purification of waste water from industrial premises, costs would be low if no enforcement occurred but it would require a great deal of trust that the industrial premises would keep to their end of the deal. Alternatively, premises could be checked with strict fines in place for premises found to be disobeying the regulation but this would come at great cost due to the labour, time and paperwork involved in the monitoring process. Hence, transaction costs are increased by a lack of trust within a community.

Transaction costs are also increased as legislation becomes more complex. Loopholes may appear (think the UK tax system) which prevent thinks from being black and white and more checks need to be carried out increasing the cost of monitoring and enforcing the regulation. Complexity can also arise out of the manipulation of laws by pirates. These are individuals or groups with powerful interests that manipulate laws in order to put resources under their own control. Linking this in to the principles of justice mentioned in the first part of this course, this means that institutions may not act in the interests of all and justice may not be achieved as the regulations are not made from behind a veil of ignorance and are therefore made not in the interests of equality but rather in the interests of a minority.

Fairness & Nature: The Justice Principle

The first idea explored within the Fairness and Nature: When Worlds Collide course from the University of Leeds on Future Learn is that of Rawls’ principles of justice. I wasn’t sure what to expect of this course when I signed up to it but this was definitely an appropriate and thought provoking start to the course.

What would we want society’s ideas of justice to be like if we did not know our place within that society? Would we bias the principles of justice towards one sector of society and hope we were in the portion that benefited disproportionately or would we instead opt for principles that allowed for equality? Rawls looked to answer this.

Rawls believed that principles of justice could only be determined if we were hidden behind a veil of ignorance to prevent bias towards themselves when devising the principles:

no one knows his place in society, his class position or social status, nor does anyone know his fortune in the distribution of natural assets and abilities, his intelligence, strength, and the like. I shall even assume that the parties do not know their conceptions of the good or their special psychological propensities. The principles of justice are chosen behind a veil of ignorance.

From this, two principles of justice would be adopted by those behind this veil. These are:

  1. Equality before the law and equal opportunities for all.
  2. If inequality is present, the benefits enjoyed by those who are better off should also run to the least advantaged.

It’s easy to see how these principles have influenced certain aspects of UK society and politics within the 20th century (even if they are very close to failing to exist in the UK today) but it is slightly harder to see how they fit in to how we manage the environment. The example given in the course was that of the Kyoto Protocol which contains a requirement for countries historically responsible for the majority of the emissions to reduce these while allowing polluting countries who do not have the same historical record to increase their emissions.

Similarly, the principles could be applied to the problem of diminishing resources and the need for a transition to a steady-state economy – why should over-consuming countries be allowed to retain their unsustainable patterns of consumption when resources are required in less developed countries to provide basics such as education, health care and food? Why should others be denied these opportunities? Did colonialism and ownership of resources by companies from other economies deny some countries the same opportunities to develop through lack of resources? Did some countries only develop to the level that they are because they took resources from outside of their borders at the expense of others and the environment?

The 3 main things I’ve learnt from being a moderator

1) People automatically believe it is their god-given right to be as much of a arsehole to other people and expect no punishment on the internet. Would you think it so much of a violation of personal freedoms if someone was given a detention for telling a fellow pupil at their school that they’re stupid/a bitch/should jump under a bus and generally making their experiences within that environment miserable? No, probably not.

Also, on a more severe front, why should we tolerate homophobia, racism and rape jokes? If someone wants to say that they’re a Christian transsexual with adopted kids, so what? Good on em and lets eliminate the twerps who have a problem with that instead.

2) There are an infinite number of ways to disguise penises in pictures, rule #34 of the internet is unfortunately far too true and 14 year old girls have no qualms with offering to get their tits out for the lads online – even if the guy is more than double their own age. Deleting pornographic content on online communities is a no brainer unless it’s an “adult” community. No one wants to log on to a craft forum to find a knitting pattern to be greeted with a RedTube vid (apart from the obvious offence it may cause, it causes great inconvenience in trying to find the information you want) and likewise no company that markets itself as family friendly is going to want an online community that parents don’t feel that it is safe to let their children on.

3) The education of children on the “dos and don’ts” of the internet has a long way to come even though you’d think it would just be a case of basic common sense. Why on Earth would you post your home address or state you’re the leader of the marching band of a specific school on the internet I don’t know – it just makes it too easy to be found by weirdos for a lack of any other way of putting it really. Maybe it’s a weird form of attention seeking. It’s not uncommon to see content whereby people say a family member has died only then to say later after a significant number of sympathetic comments that there was no death and that it was all a joke or that they just wanted a lot of notifications (some people are twisted…) but anyway that’s a different topic.  Everyone’s aware of these cases where homes have been destroyed because a house party got a bit too advertised on the internet so obviously there’s a need for this type of education – or is it being given but it’s just being ignored? It’s hard to tell but maybe that’s why moderation is an useful industry in ensuring child safety.

 

 

I should probably add that I still work as a moderator occasionally although from a market research discussion/probing perspective. This was written a while ago when I worked as a moderator for a community that had a lot of children participating. I don’t want censorship but I would like the internet to become more mature, with greater thought given regarding who you might be talking to/who is likely to see what you’re saying and what is/isn’t appropriate.

Homemade Hobnobs

Homemade Hobnobs

This wasnt even all of them – this was after I’d scoffed 5 or so! Good recipe makes a lot of biscuits and these were big ‘uns too. Pretty standard baking ingredients most people have in their cupboard and really easy to make. Could probably have baked them for longer/made them smaller so that they were more golden and crisp like the shop version but they’re really nice chewy too!

Click on the photo or here to be taken to the recipe.

Coming up for Air – George Orwell

A story telling the story of the life of George Bowling from Lower Binfield, this piece of fiction from George Orwell takes the reader through the first few decades of the 20th century up until the onset of the Second World War.

The son of a shopkeeper, George Bowling had a love of fishing and saw a future in one day opening up a shop of his own especially after being taken out of school to work with Old Grimmett in his grocery – that was until the onset of the First World War. George’s life changed substantially. Fighting in the trenches in France, a bullet wound to the buttock combined with broken ribs from falling in a ditch provided George with the opportunity to go back to England. Consequently, he landed a pointless role at Twelve Mile Dump where he escaped the fighting and spent the war reading. Upon the end of the war, George wanted to be a travelling salesman and whilst at work, a chance encounter with a past acquaintance from the war led him to a position with the insurance firm, the Flying Salamander, and there George stayed. In summary, George Bowling is a fat, middle aged man with false teeth and a wife whom he wishes he’d never married.

The story is one that plods along nicely. Not a thrilling page turner but one that you want to carry on at a continuous steady pace – a bit like life itself. Thoroughly believable due to the inclusion of real references to historical events and figures and pieces of literature (such as H.G.Wells’ History of Mr Polly), it makes you feel as though the character is speaking to the reader as though its the true life story of a past individual. Published in shortly before the outbreak of the Second World War in 1939, it appears to be Orwell’s response to the events and social changes going on around him at the time. Events referring to a talk  by a “well-known anti-fascist”  show how the world within which Mr Bowling lives is increasingly becoming dominated by a hate and slogan filled society and his increasing fear not of war but of the type of society that will follow. The book acts as a means of setting the scene for the onset of a 1984 style society and communicating Orwell’s prediction for the future.

However, one of the best passages for me had to be:

The frankfurter had a rubber skin, of course, and my temporary
teeth weren’t much of a fit. I had to do a kind of sawing movement
before I could get my teeth through the skin. And then suddenly–
pop! The thing burst in my mouth like a rotten pear. A sort of
horrible soft stuff was oozing all over my tongue. But the taste!
For a moment I just couldn’t believe it. Then I rolled my tongue
round it again and had another try. It was FISH! A sausage, a
thing calling itself a frankfurter, filled with fish! I got up and
walked straight out without touching my coffee. God knows what
that might have tasted of.

…delicious!

You can read Coming Up For Air online for free here.

Buddhist Economics

I remember coming across the term “Buddhist economics” while I was reading Schumacher’s Small is Beautiful for the dissertation component of my MA. I didn’t really think too much about the concept at the time as I was scouring for more specific information relating to my research but always meant to come back to the idea and try to learn more. I’ve always been dissatisfied with standard economics (and by that I mean the neoclassical kind of which many profess that “there is no alternative”) and I’ve been interested in Buddhism as a religion/philosophy for many years – so why has it taken me so long to find out what Buddhist economics actually is? Buddhism and economics are not two areas of study you may traditionally think of going together. Buddhism is traditionally known for being about minimalism and well-being whereas Western economies are extremely centred around the need for consumption and profit maximisation which is rather, well, un-Buddhist. However, the word economics has in some cases lost its true meaning and become synonymous with one type of economics, the neoclassical model, and needless to say there are many many other forms of economic organisation out there to choose from. To clear things up, the word “economics” refers to:

The branch of knowledge concerned with the production, consumption, and transfer of wealth.

This allows for an extremely broad range of interpretations of what the aims of economics are and how these aims are achieved. Buddhists believe that the idea of the individual is one that is false and that instead there is only an ever-changing bundle of impersonal processes and perceptions – the separation of the individual from everything else is thought to be the main cause of discontent and unhappiness. A failure to recognise that all are interlinked rather than independent of each other leads to selfish desires that cannot be satisfied as the perceived individual forms attachments to fundamentally impersonal and unstable material objects. They do not state that all consumption is wrong for a life without any kind of consumption would be a very short one – we all need basics such as food, shelter and clothing – but they distinguish between right and wrong consumption. Right consumption is that which satisfies well-being whereas wrong consumption is all that which is consumed for obtaining pleasing sensations and for the purpose of ego-gratification. The basis of Buddhist ideas on production and consumption is one based upon moderation. Buddhist economics differs from neoclassical economics in that the ultimate goals of consumption and production are to maximise well-being and fulfil social and environmental goals rather than maximise profit and individual returns.

The difference in goals between these two schools of economic thought is what makes Buddhist economics an alternative to be considered in today’s economy. Concepts regarding social and environmental targets are important to any society – very few people (if any) would want the field out the back of their house turned into an opencast coal mine or for their neighbourhood to be overrun with arsonists and muggers but how does this fit into a social structure which has different priorities – surely a model that prioritises these would be more beneficial? Perhaps Buddhist economics will develop as an ideal among some communities and the idea would most likely be welcome to many Community Interest Companies (CICs), charities and community groups. Will it catch on at the top with governments and “big business”? Probably not but there’s always hope so long as the idea thrives at the community level within which most of the population inhabits.

Free podcasts: Buddhist Economics by The Open University

Failed

Ok so as I pretty much predicted when I got the book out the library, I failed at working through it. I still intend to write a book but on what and when I’m not so sure. I found out about a great site called Coursera who offer free virtual university courses from leading universities around the world – I’m starting 6 at the end of this month. I also intend to listen to the huge mass of philosophy podcasts I’ve downloaded over the last few months. I miss learning and I greatly regret not being more committed when I was studying for my bachelors and masters degrees at university. Maybe its the lack of pressure that makes it easier as I’ve also read more in the last year since finishing my MA than I ever have in my entire life. University made me lazy. I work full time (albeit from home) and do voluntary work yet I feel like I have more free time than I did back then. Lets see if I can utilise my brain even better this year aye?

6.

Go to a book you love. Open it at random and copy out a paragraph…Repeat the process two or three times with different books. it will give you a physical sense of how that writing was built up…this way can be quite helpful in bringing you close to the rhythm and pulse of your favourite writers. It’s a way of giving you a physical sense of how they go about building effective passages of writing.

‘Quick!’ said John. ‘Your camera!’ He was pointing at the two nuns among the passengers. These were different nuns (so far as one can ever tell) from the nun who had hitched a short ride, and left us earlier in the day. They were sitting together at a cool table in the shade, by the wall. Their backs were to the wall and they were facing us. Penned to the wall directly above them was an enormous centre-page colour foldout of a naked woman with breasts the size of melons. The nuns stared impassively forward from this exotic backdrop, unaware (it seemed) of the reason for our smiles. We did locate the camera.

Inca-Kola: A Traveller’s Tale of Peru – Matthew Parris

Here I am, at 24, waiting to come down the aisle in my red velvet dress, with ivy in my hair. I look like Lady Bacchus, except for my feet. My lifelong curse of not being able to find shoes I can walk in extends even here, on my most glamorous day – under the satin-edged velvet, I’m wearing a manky pair of Doc Marten sandals.

How to be a Woman – Caitlin Moran

Well, in the end I persuaded her, and then we borrowed a cushion and I got her ready and took her to the maternity hospital. They received her with open arms. They gave her cabbage soup, a ragout of beef, a purée of potatoes, bread and cheese and beer, and all kinds of advice about her baby. Yvonne gorged until she almost burst her skin, and managed to slip some of the bread and cheese into her pocket for me. I took her there every day until I had money again. My intelligence had saved us.

Down and Out in Paris and London – George Orwell

2.

Using the library, the internet, or the local press, find out if there are any writing groups nearby. Get the contact numbers and call them to see how they work and whether they would be suitable for you to join.

I think I’ll skip this one because, to be honest, I can’t be bothered but, hey, at least I’ve got a bit more typing practice right?

Edit: 3-5 are also irrelevant for here. They’re based around thinking of who you find to be the most inspiring authors and reading their work. It’s an useful exercise but it’s not really something you can write down. I’m still only on the first chapter of the book so I’m guessing there’ll be quite a few more exercises of these investigative and pensive natures.

1.

Write down in one sentence (no more than 30 words) why it is that you want to write.

I want to write because I want to develop ideas and have a record of these – this is in addition to having a way to simply pass the time!