Friday, September 28, 2012

Excellence versus equality

G and I were discussing a book a few days ago which surveyed debates in the 1950s and 1960s about the purpose and role of universities. One prominent view was that the university should be a center of excellence. But this sat uneasily with the egalitarian drift of society. So others argued that the university should somehow uplift surrounding communities, even if it meant open admissions and less attention to academic standards.

I was immediately interested in this, because excellence is largely a translation of the Greek word arĂȘte. So this links directly to the idea of virtue ethics which I've talked so much about.

It is a profound problem. How do you reconcile equality and excellence? I think there have been two main problems with this debate.

The corruption of excellence

First, excellence has often been corrupted, and that has made us deeply suspicious of the concept. Nobility frequently been anything but noble. In the wake of the First World War, the legitimacy of many of the traditional virtues (and the social classes which justified themselves in relation to them) collapsed. The senseless carnage of the trenches in the end undermined a whole way of life, of deference and tradition and hierarchy.

The original definition of aristocracy was "rule by the best". Instead, the European aristocracy, which centuries before grew from its claim to military excellence and skill, had turned into a entitled, overprivileged and often stupid bastion of unearned wealth. In the trenches, lions turned out to be led by donkeys.

We saw last week that the same applied elsewhere. The Chinese scholar-officials turned inward and rigid.

The Bloomsbury Generation saw "eminent Victorians" as hidebound and stuffy and hypocritical. Western society turned more egalitarian. The Second World War and Cold War were fought for democracy, versus forms of totalitarianism. There was another leap in egailtarian consciousness in the sixties, which ramified into the new social movements like feminism and gay rights.

Curiously, a new university-educated meritocratic elite gradually rose over the same period. A brand-name degree still had legitimacy as a marker of excellence, at least in the job market. So did achievements like winning an Olympic gold medal.

But on the whole, there is now no consensus on what excellence is any more. Indeed, it isn't part of the conversation in the liberal tradition, which, as we've often discussed, focuses on autonomy and impartial rules.

The life cycle of organizations

Much of the problem arises because Excellence does not last. G and I often discussed how workplaces have a tendency to turn rancid over time. Organizations have a life cycle. They start off creative and fresh, and a little crazy. They then stabilize, get a bit of adult supervision, and if they are lucky, they succeed and grow. But over time bureaucracy and rigidity also grow, strangling the culture. Good people get frustrated and leave. Time servers and assholes remain. The vitality ebbs away. The organization cannot adapt or change. And eventually it dies.

The number of organizations that survive even fifty years is remarkably small.

The average lifespan of a company listed in the S&P 500 index of leading US companies has decreased by more than 50 years in the last century, from 67 years in the 1920s to just 15 years today, according to Professor Richard Foster from Yale University.

In fact, the mystery is how some organizations survive for much longer. Institutions like the Catholic Church have often faced crises and reform movements and internal rot.

So what does this mean? Excellence is always in trouble. It is not self-sustaining. It is always beset by hypocrisy and corruption and rigidity. It is more like evolutionary fitness - literally so on the original Aristotelian definiton, which sees it as fitness for a particular purpose. Few species last any length of time either.

It can also be very hard to discern excellence in many fields. Who has a brilliant business idea or leadership skills? Hundreds of startups fail for every Google or Apple that succeeds. Initial excellence has a tendency to turn into monopoly (such as Microsoft's efforts in the 1990s). Initial political change has a tendency to turn into predation and an exclusionary parasitic elite.

But that does not mean some conception of excellence is valueless. It just means it has to be open to challenge and discussion. It needs checks and balances and renewal. It needs some way to get rid of the rot and the timeservers.

By happy accident, insofar as our economy works, it is because it has found ways to do this, at least for a conception of excellence as a combination of profitability and political preferment. It does not do so for the original Greek ideal of eudaimonia, or flourishing. And that is the basic problem with the economic system.

Maybe it is like a different version of Newton's First Law. That states, of course, that an object continues in its current state of motion unless acted on by a resultant exterior force. Instead, excellence tends to steadily decline unless acted upon by a positive external force.

Actually, that sounds more like the second law of thermodynamics. Entropy is always increasing. Life is the process which resists entropy, by increasing order and harmony in some localized spots. Excellence is much the same, a process that resists the deterioration of everything into a featureless soup of atoms in empty space.

Equality and dignity

That brings us to the second problem, equality. The debates here are old and familiar, especially the distinction between equality of opportunity and equality of outcome. The right prefers the first, the left inclines to the second.

Instead, I think our basic problem with equality is a tendency for the idea of equality of dignity - a highly important idea - to seep out of bounds into much larger demands for equality of respect. And that is incompatible with any idea of excellence. It isn't primarily a difference of economic outcomes that matters now, so much as status outcomes.

People deserve a certain basic dignity and respect simply as a human being - an idea which took the world a long time to arrive at. But should that extend to equal dignity and respect, regardless of what they do?

Take the phrase "second class citizen". It is used as a debate-killer, an automatic wrong. So people argue released felons should not be treated as second-class citizens. Amnestied illegal aliens should not be treated as second-class citizens.

The problem is this strips away any other possibiliies for society apart from power and money and celebrity. Yes, it is a noble idea to give everybody an aura of abstract equality and dignity, regardless of actual reality. The serial killer does have in a sense the same abstracty humanity as the cancer researcher or the startup pioneer. But it is also a sort of religious belief that has sucked the life out of dignity and excellence as well. Should we not say that in some senses the cancer researcher at her workbench is better than the serial killer in his prison cell? That will make many people uneasy. But it may be a necessary unease.

The problem is we have become so distrustful of any claim to merit which would justify claims to excellence. That is, perhaps, a legacy of the Cold War arguments for democracy, the fanfare for the common man. Democracy tends to erode the legitimacy of any other claims. We saw that "democracy" was ironically seen as the worst political system for most of recorded history, until the French Revolution. As Mitt Romney may discover, few people wil fight for economic liberty. But they will fight for equal dignity.

The great value of democracy, at least when it is embedded in the culture of a society, is that it has a tendency to resist the corruption of elites. Status distinctions tend to entrench a parastic layer above society. But equal dignity is often so patently unrealistic in practice it is also a difficult basis for legitimacy. Democracy can suffer from the corruption of the electorate.

So here is the difficulty. Claims for automatic equality undermine virtue. Some form of excellence - virtue - is necessary for societies to flourish. Too much equality at the expense of excellence produces, ultimately, the poltiical gridlock, overloaded fiscal burdens, bloated pension exposures and the financial crises we see around us.

This leads to the older discussion about the cultural contradictions of capitalism, as Daniel Bell put it, or the related ideas that the Protestant or bourgeois Ethic, for example, was necessary to the growth of capitalism. That's a topic for another post.

In essence, though, without some kind of active debate about virtue or excellence, society will have much less of it.



Happiness and Security

Richard Easterlin writes about happiness in China in the NYT. Massive growth in the last twenty years has not produced any increase in happiness.

It is startling to find that Chinese people’s feelings of well-being have declined in a period of such momentous improvement in their economic lives. After all, most policy makers would confidently predict that a fourfold increase in a people’s material living standard would make them considerably happier.

And yet, piecing the surveys together, we found a U-shaped pattern of happiness over time, with life satisfaction declining from 1990 to the first part of this decade, and then recovering by 2010 to a level somewhat below the 1990 value. What explains the “U” at a time of unprecedented economic growth?

Before free-market reforms kicked in, most urban Chinese workers enjoyed what was called an “iron rice bowl”: permanent jobs and an extensive employer-provided safety net, which included subsidized food, housing, health care, child care, pensions and jobs for grown children. Life satisfaction during this period among urban Chinese, despite their much lower levels of income, was almost as high as in the developed world.

Reform meant loss of security, in a country with no welfare safety net. Aso, people naturally do not like risk and change, which means disruption to their lives and expectations. We've talked extensively before about Maslow's hierarchy of needs, in which a need for security is the first thing people want after basic survival needs. The psychology of risk and security is far more complex an most policymakers understand.

The feeling of insecurity also meant the average Chinese person saved an enormous proportion of their wages, which in turn led to the huge savings imbalances in the world, which in turn was a major underlying cause of the great 2008 crash.

All the same, I would imagine Chinese happiness was far higher in 1990 than it was at the depths of the cultural revolution or amidst the famines of the Great Leap Forward. Mediocre happiness is much better than mass starvation and misery.

The fact is happiness does not increase much with wealth - the "Easterlin paradox" he first wrote about thirty years ago. But security can also turn into rigidity. We also see in the West that too much of a welfare state is destroying government finances and sapping vitality. Too much security is as damaging as too little.

As in so many things, the essential requirement is to strike a balance. The trouble is this is obscured so often in our policy discussions because we are primed to look for impersonal, universal rules, rather than judging situations.


Thursday, September 27, 2012

The coming Japanese crash?

Here's a very gloomy take on the economic outlook. Simon Johnson, former chief economist at the IMF, and a colleague predict Japan is heading for a vast crash.

The euro zone is well down the path to severe crisis, but other industrialized democracies are hot on its heels. Do not let the euro zone’s troubles distract you from the bigger picture: we are all in a mess. Who could be next in line for a gut-wrenching loss of confidence in its growth prospects, its sovereign debt, and its banking system? Think about Japan.
Traders have lost their shirts for a decade shorting JGBs, ie predicting a crisis in Japan. It hasn't happened. But long delays do not mean the problem could come with a major bang.

The problem is systemic. Easy debt facilitates bad behavior.

Bankers and politicians seem to enable the worst characteristics and behaviors of the other. The past few years have led us to focus on half of that phenomenon: the degree to which government guarantees have facilitated irresponsible risk-taking on Wall Street. And this is, of course, an issue that demands continued attention.

But Japan illustrates the other half of the phenomenon—the extent to which finance has allowed and encouraged politicians to make attractive short-term decisions that are eventually damaging. This may ultimately yield worse crises than the one we faced in 2008 or the one now unfolding in Europe. Greece, Ireland, Portugal, Spain, and Italy found their own ways to economic devastation, but each road was paved with easy credit. Those whom the gods would destroy, they first encourage to borrow cheaply.

China is looking wobbly too. It is always hard to tell the next step in a crisis, however. Often the loudest voices of panic come at the trough.

What is clear and a sure thing, however, is we are not finished with turbulence yet.

(H/t Via Meadia)



Wednesday, September 26, 2012

Spring frost in the Middle East

There have been signs of frustration with the Islamists in the Middle East, including attacks on them in Benghazi. That is encouraging. But is it durable? Tom Friedman writes in the NYT:

It is not clear whether this trend can spread or be sustained. But having decried the voices of intolerance that so often intimidate everyone in that region, I find it heartening to see Libyans carrying signs like “We want justice for Chris” and “No more Al Qaeda” — and demanding that armed militias disband. This coincides with some brutally honest articles in the Arab/Muslim press — in response to rioting triggered by the idiotic YouTube video insulting the Prophet Muhammad — that are not the usual “What is wrong with America?” but, rather, “What is wrong with us, and how do we fix it?”
It isn't as if there are not some more sensible voices in the Middle East or writing in Arabic. The trouble is some Westerners persist in seeing them as the "vast majority". So we got lots of stories about the twitter revolution in Tahrir Square, but we ended up with the Muslim Brotherhood in power in Egypt and assaults on US embassies.

Yes, there are occasional voices of internal self-criticism in the Middle East. The Arab Human Development report pointing out the stagnation in Arab societies created a huge stir, too, but it was ten years ago. Nothing has fundamentally changed since, despite the Arab Spring. Indeed, the feverish hatred surrounding "blasphemy" shows if anything intellectual life is shutting down.

The fact is that in most Arab countries the extremists are the vast majority, despite the equally extreme efforts by Western liberals to avoid noticing the fact. Democracy entails Islamism, which has been the heart of the problem for decades.

Indeed, the whole rhetoric of "extremist" and "moderate" is suspect, as "moderates" are often repugnant as well. We get manipulated into supporting one faction against another local faction. Mubarak argued he would hold back the Islamists. So we put American money behind kleptocratic narcissism. The "moderates" are often just nasserites with different Swiss bank accounts.

Our patience with the Middle East needs to run out. Change will come. But we cannot bring it, and it could take centuries.

We need to contain Islam in the meantime. Engagement has led nowhere. So treat it like we treated communism. And treat those who scream "islamophobia" with contempt. It's like screaming "stalinophobia" in the 1950s. It's brainless and bigoted and stupid. The screamers need to be excluded.

For Arab Spring, read Prague Spring in 1968.

For the "islamophobia" screamers, read the communist stooges and Red Brigades and Maoists and fellow travelers of the 1950s and 1960s. And remember the fashionable leftist intellectuals who have never been held accountable for their collaboration with genocide and prison camps and sympathy for "struggle".

For the doomed Soviet economy in the 1960s, read the lazy Salafist regimes of the Gulf, living on borrowed time on oil reserves.

There are differences, of course. The Soviets had some technological ability. The Islamic states don't.

Sometimes the only way to deal with bad ideas is to let them fail. And let them know the only way they will get respect is if they earn it.


Monday, September 24, 2012

Professional virtue

This is a nice piece on virtue and the professions by a Professor at Harvard's Education school.

It would be hyperbolic to maintain that “the ethics of roles” disappeared for almost two millennia. Yet this wider sense of responsibility was much less evident after classical times, when almost everyone was a peasant, guilds kept their practices secret and emerging states were hierarchical and authoritarian. Only as these trends were gradually overturned in the West in the last few centuries, did the role of the responsible professional re-emerge. The rise of the Fabians in England, of the progressives in the United States or of the elite professional classes in Bismarckian and Weimar Germany, to take some familiar examples, established a cohort of individuals who were given status and a comfortable livelihood in return for the license to render complex judgments and decisions in a disinterested manner. According to the historian Kenneth Lynn, writing in the early 1960s, “Everywhere in American life, the professions are triumphant.”

But even as Lynn wrote, the hegemony of the professions was breaking down. It was not only the witty George Bernard Shaw who believed that “professions are a conspiracy against the laity.” Many saw the professions as the province of the privileged — chiefly white, primarily Anglo- Saxon in lineage, largely male. Most of us today deem the democratization — or demoticization — of the professions as a healthy development. Yet, I maintain that this trend had its costs. Specifically, the very notion of professions serving the wider community has broken down, to be replaced by a growing consensus that professions are by their nature destined to serve parochial interests.


He calls for "virtual agoras" for different professions.

Virtual common spaces can allow all who have interest and knowledge in the area to weigh in — whether the topic is the protection of sources by journalists, the determination of which intellectual property can legitimately be downloaded and which not, whether studies of the creation of a deadly new strain of virus should be published....

Still, by themselves “virtual agoras” are limited; they can be hijacked, trivialized, or ignored. And so I recommend the reinvigoration of the role of “trustees” — individuals afforded the privilege of maintaining the standards of an institution or profession. Traditionally, trustees were drawn from the rank of wise seniors, and such persons can offer both time and experience. But particularly in a fast changing world, trustees should reflect the range of ages and experiences

Rules, he says, can't deal with today's complexity. So we need a return to professional judgment.

The problem with this, as I was discussing the other day, is a tendency for elites to become corrupted. Virtue is not self-sustaining.