Category: Research

Categories
economics Procreate Research Visualising ESL

Visualising interactions using Procreate on the iPad: an update

I’ve recently started using ProCreate on the iPad to explore visual representations of econo-socio-legal interactions. My portfolio has always relied on the good, old-fashioned pen and paper approach, so it’s been really exciting trying out different technologies. I’ve been updating my portfolio and recreating the pieces digitally, which I’ll discuss in this post – with pictures!

I’ve found the app to be really responsive and a fun and easy way to get creative. The Apple Pencil can be a bit frustrating to use as it has that “drawing on glass” feel, and runs out of battery at crucial moments. But the feedback and pressure sensitivity works really well and makes drawing on the iPad a really enjoyable experience.

But on to the content! Here is a first attempt using Procreate at recreating the social fabric of interactions, weaving together three layers. Here, they are legal, economic, and “other” aspects of social interactions. This recalls the goals of Economic Sociology of Law-based approaches that want to recombine legal, economic and social phenomena, as well as recognising the importance of others aspects of interactions. In this, we can refer back to Max Weber’s four interaction ideal-types (instrumental, affective, belief-based, and a traditional); all of which fit into the “other” layer here.

In case there’s any doubt about the three layers, we can add some colour. For me, law is best represented in red, economics in yellow, and social otherness in green.

Then, adding in economic aspects of interactions…

And then, the social “other”, completing the woven fabric of interactions as seen through an econo-socio-legal lens…

The really cool thing about Procreate is that is can record everything you do on a particular canvas, and can reply the progress of the piece as a time lapse video. If you want to see the steps involved in creating this piece, it’s on my YouTube channel here.

I’ve also started redrawing representations of orthodox economics, economic sociology, and economic sociology of law. The idea is that the main stream, orthodox economic theory relies on assumptions and models that provide a straight jacket and that sociological and econo-socio-legal framers can moderate this and make the approach more flexible and more reflective of real life.

So, in the first image, neoclassical economics is drawn as straight lines, with little flexibility outside of the predetermined categories built into the models. In this sense, it fails to capture the complexity and unpredictability of real world interactions.

By incorporating more insights from sociology and from focusing on interactions rather than actors, we can capture the full extent of how complex, dynamic, and unpredictable real world interactions can be, and what this might look like…

All that’s needed now is a roadmap from the orthodox to the heterodox… a visualisation of which I’ll post as an update!

Categories
economics Free market Gig economy Infrastructure Research Uncategorized

Complexity and Community are crucial for rethinking economics

What could society look like if we do economics better?

Do mine eyes deceive me? I came across this post by Evan Davies on the BBC website, where he blogs about the changes taking place in economics. For those fond of the TL;DR, he says that economics has been, and still is, in need of a radical overhaul, given that most economists did not foresee the 2008 financial crisis, and that economics has not addressed its flaws in the decade since. Davies sets out the “two Cs” that make “neoliberal” or orthodox economics models risky (to put it mildly), and these are Complexity and Community. The short version is that people are Complex souls who live in Communities. Well, duh! Some of us have a been banging on about this for a while now.

Davies is clear not to make a straw man of mainstream economics though. And this is an important point. Microeconomics – the small-scale interactions between actors – has been remarkably successful in boiling down our collective lives into theories, formulae, and models that guide economists towards understanding how we act (and then nudging us in the right direction to make better decisions). But macroeconomics – the larger scale stuff that includes GDP, interest rates, international trade and investment and so on – tends to draw on the microeconomic theories and scale them up. But as we all know from experience, the more people you include, the more complicated it becomes to plan anything. And that’s before you start on complex interaction patterns across communities and societies.

Why have things started to change now? As I wrote in a previous post, change occurs gradually. Many successful careers have been built on the status quo of neoliberal or neoclassical, orthodox economics. The core of the academic economics community has developed, advocates, practices and teaches this approach. So revolutions, as in most areas of life, tend to be the exception. When we start to question the entire shape and direction of a discipline, there are myriad interests at play that all need to be reoriented. The mainstream journals, senior economists, and general momentum is geared towards neoclassical theory, and its implementation as neoliberal economic policy. In short, we are steering an oil tanker rather than a Mini Cooper.

Secondly, neoliberal economics is plugged into and reflected in the political mores of the day, and neoliberalism in politics remains in the ascendancy. A theory of economics that retreats from and questions this is bound to raise eyebrows. Perhaps then, eleven years might be a relatively short timespan for the reorientation, or evolution, of a discipline.

So what changes are actually happening now? The past decade has seen a wave of literature questioning the type of society we want to live in, both locally and globally, and the type of economics that might realise this.

But there are more recent projects turning explicitly to the way we do economics and its role in society that are much more exciting. The NIESR has a project underway Rethinking Macroeconomics, which is ESRC funded. The IFS is launching a project looking at inequality in the UK and targeting questions like the kind of society we want (a particularly timely question in the light of the most recent UN Report citing poverty as endemic in the UK). And then there are the centres rethinking traits of orthodox economic theory like the Paul Woolley Centre at LSE, the full title of which is “The Paul Woolley Centre for the Study of Capital Market Dysfunctionality”. The Centre essentially asks what happens if the frictionless markets featured in economic models suffer from, well, friction.

But what alternatives are there? If you’re familiar with some of my previous posts, you’ll know I’m a fan of socio-economic and econo-socio-legal approaches that take economics back into the social sciences. There are myriad alternatives though within these disciplines, including relational work, actor-network theory, community lens, network analysis, systems analysis, and many more. Zooming out somewhat, historical, geographical, psychological and anthropological approaches can also contribute to an understanding of economics as it really is performed in the real world.

But, why should we care? To make a bold, and controversial statement, economics is usually one cause of most social issues facing us today. What do I mean? The rise of populist politics caters to the anger and frustration of the “have nots” in society (economics). Austerity as a response to the financial crisis enacts neoliberal economic theories (economics). The lack of living wages and the rise of insecurity, the precariat, and the gig economy has resulted from technology and a reluctance of government to intervene based on neoliberal economic theories about the free market (economics). Climate change and global warming continue unabated because of the economic consequences of actions to tackle environmental issues head on (once again, economics).

In short, if we want to get society right, we need to get economics right. And that means a retreat from the belief that there is one “right” way of “doing economics”. It means recognising (or re-recognising) that economics is about how people act and interact. And that we do not always act rationally, or even in our best interests. Until economics models and formulae reflect this, we are left with a hollowed-out version of economics that cannot reflect the full complexity of real life. And this is something we all pay the price for. A broader, richer understanding might help us spot the next financial crisis looming on the horizon.

Categories
economics Research

The Science of Economics? What Works, and How Much…

We do seem to be talking more about economics – what it should do and look like. But there is still a whiff of revolution about calls for the discipline to be more evidence-based and, well, scientific. This article, by Philip Aldrick in the Times yesterday, argues for more careful scientific approaches, and this is worth noting. Of course, in the natural sciences, this would be taken as read. Drugs need to be extensively trialled before they are sold and used to treat disease in humans. But for some reason, in the social sciences, theory and ideology have the ability to shape policy just as much as evidence.

Aldrick’s piece cites two studies launched by Nesta, a UK Innovation think tank, roughly seven years ago. The first was a retrospective review of the effectiveness of business clusters; do small businesses do better when they are closely located and can share location and labour advantages? The second was a randomised controlled trial on whether tax relief for small creative companies worked. The results of the studies were not their most important findings however.

For the sake of finishing a story, the first study proved relatively inconclusive, and could not find any clear correlation between clusters and growth. The second study found that tax and financial incentives were helpful in the short term for small creative businesses, but after 12 months any advantage had faded.

So, what was the main impact? The reason these two studies are remarkable are for their illustration of research methods. While retrospective reviews – generally the majority of most empirical work in the social sciences – can only look for correlation, randomised controlled trials (RCTs) can go deeper, further, and can identify causative factors. In other words, we can target specific factors and identify why things happen. This is important because it means we can be more scientific about what works, how it works, and why. And this means we can begin to base policy on evidence rather than theory. RCTs also offer a way of measuring the extent of policy impacts. By having a test group and a control group, we can gauge the extent to which a policy really makes a difference. And that means we can evaluate whether a policy is financially and economically viable. So, RCTs offer a way of seeing not only what works, but how much.

Why is this news? Similar to other recent posts on here, there is increasing discussion of economics and how the discipline can be improved in the mainstream media. Aldrick’s argument is that economics – both the research and the formulation of policy – can and should be more scientific in its approach. And to this end he calls for more RCTs and longer term studies testing causation before policy is enacted. The government has launched the Business Basics Fund with Nesta to carry out trials investigating, among other things, productivity. UK productivity lags behind that of other countries, attributed generally to poor management practices. But how can management practices be altered to improve productivity?

Questions like this lend themselves readily to RCTs where different techniques can be trialled in comparison with a control group. Nevertheless, there are questions of macroeconomics that are not suitable for trials. We cannot test interest rates or tariffs, for example, against control groups. And this remains a problem for the larger questions tackled in macroeconomics, where theory remains a significant influencer of policy.

Calls for greater use of careful empirical data in shaping economic, legal and social science policy is not new though. Economic sociology, economic sociology of law, and sociolegal approaches have long stressed the need for analysis and understanding to be based firmly in the real world, on real data, and about real people. Increasing access to big data and AI could enhance this. As Aldrick states, “Economics is a social science. Why not make it more scientific?”

Categories
economics Free market Infrastructure Research

Waiting on the market?

The UK government has finally declared a climate emergency. This is great news of course, but what does it really mean in practice? And what is this doing on a blog about law and economics?

The government in the UK has subsidised the purchase of new electric and low emission vehicles in a a bid to support and stimulate the market. But at the end of 2018, the government reduced the available subsidy rates, the makes and models of cars that were eligible, and capped the number of vehicles that could be purchased under the scheme. It’s really no surprise then that the rate at which electric and plug-in hybrid vehicles have been sweeping the market has fallen since the subsidy reduction. Indeed, sales of plug-in hybrid cars fell by one third in the period to April 2019. This is, of course, against the backdrop of a clean air crisis, a backlash against Diesel engines and emissions scandals, and the Extinction Rebellion protests calling for every tighter emissions limits.

So, it would make sense for the government to support the clean(er) transport industry, including electric and low emission vehicles. More to the point, the industry seems to be crying out for a level of oversight, investment, and general co-ordination. While some companies have started to set up charging networks across the UK, these are often not cross-compatible, resulting in up to 15 different types of charging points that drivers of electric cars have to navigate. What’s more, charging points tend to congregate in wealthier areas of the country, while residents in poorer areas struggle to find a single charging point. On top of this, most experts agree that if the electric car revolution is to take off, fast charging – or the ability to charge a car to 80% in 30 minutes – is essential for the success and sustainability of the network. The problem is that the national grid in the UK is simply unable to support the required wattage, or provide the increased levels of electricity required. We would, literally, face a melt down. The answer is a massive investment and overhaul of the underlying infrastructure.

So here we turn to economics. Once again, the problem is not technology. We have the knowledge, the tech, and the skills to make the green revolution happen. It comes down to economics.

The UK government has repeated its mantra that it is waiting for “the market” to step in and develop the charging networks for electric vehicles. Meanwhile, “the market” currently complains that there is insufficient basic infrastructure available for them to build on. This is not a new dilemma, and as Mariana Mazzucato has documented, a great deal of the tech that has driven progress over the last half century has developed out of state-funded R&D. Steve Jobs did not “invent” GPS or the touch screen; he took the technology and packaged it up in a shiny box.

It feels too obvious to state that a network of charging points for electric vehicles across the UK needs to be integrated and cross-compatible. It also feels obvious to state that this network needs to be connected to a grid that has the capacity to charge the nation’s cars, if we actually want people to move to cleaner, greener, options. It also feels like common sense to point out that this level of integration, planning, and investment needs to come from the state, as the only entity with sufficient oversight, patience, and funding. Or, at very least, it needs to come from “the market” working closely with the state to achieve clearly set targets that can establish a nationwide network that avoids duplication and achieves integration for the greatest value and usability.

The markets for broadband and mobile phone coverage are instructive here. There are still areas in rural Somerset in 2019 that have no mobile phone coverage. Understandably, where the market is left to decide where to invest, it will do so where the returns are greatest, and this is in towns and more densely populated areas. Given the basic underlying premises of business and shareholder value maximisation, this is to be expected.

The problem arises when ideology and a die hard belief in neoliberalism takes hold and denies the valuable role that state involvement can play. Writing in 1944, Karl Polanyi emphasised the utopian nature of the ideological divide between state and market, and criticised the belief that the free market was entirely self-regulating. He pointed out that both market and state relied on the other, and that some degree of state oversight and involvement was necessary if society was to avoid the worst effects of the free market. To use the example of the telecommunications failures, the government can step in at this point and regulate the operation of the market to ensure that everyone has access to broadband, whether they live in London or rural Somerset, and regardless of the cost to the company bidding for the contract.

At the same time, the market benefits from state involvement, and the examples of infrastructure such as an enhanced national grid, green power and a network of clean vehicle charging points on which the green transport industry can flourish is an archetypal example of where the close collaboration between the two spheres has never been needed more.

Categories
economics Research Visualising ESL

Visualising interactions with Procreate

I’ve been experimenting with Procreate on the iPad, which is an amazing app for drawing digitally. Seriously – check it out.

I’m using an iPad Air 3 with first generation Apple Pencil, which is great for digital calligraphy as well as designing and drawing complex interactions, networks, and social phenomena in general. The app also exports GIFs and MP4s as well as the standard visual media. I’m really excited to share my progress here with digital visualisations of economic and legal phenomena, and tackling questions like “how can we think about economics differently”?

Here’s an example: In the following diagram, each red dot is an actor – you or me. We interact with lots of different people every day, and these interactions are the black lines between each red dot. Over time, these interactions build up in complex patterns. This diagram is one way of visualising the way that patterns of interactions can develop in complexity, so that when we zoom out, we begin to see larger patterns.

What happens if we imagine that these black lines represent the economic aspects of interactions? What can we say about macroeconomics? And can this be scaled up further?

Visualising interaction patterns
Visualising complex interaction patterns

Categories
Research Uncategorized

Is “economics” society’s operating system?

Is economics society’s operating system?

Is economics now society’s default, or de facto, operating system? And what does this mean? I heard this mentioned in passing on the radio the other day in another context. But it struck me as a really useful and interesting analogy to the role of economics in society, and the values and goals that we subconsciously prioritise.

An operating system is system-wide software that manages computer hardware and software resources, and which provides common services for computer programmes. It operates as a base on which all other functions rely for resources and access – it sets the rules of the game. Similarly, we can see economics, in particular neoclassical economics, as performing a similar function within society, although widely unrecognised and largely subconsciously. It does this, as I suggest below, through setting the rules of the game as well as providing the vocabulary and grammar that we use to talk about the game.

Kathleen Fitzpatrick’s piece in the Times Higher Ed this morning, on the impact of competition and marketization in higher education, perfectly summed up some of the issues of economics-as-operating-system, but in the specific context of higher education.

Fitzpatrick writes that while friendly competition can be helpful, “when the competitiveness that fuels excellence and prestige becomes based in the logic of the market, universities lose sight of their true purpose”. In a detailed and thoughtful piece, she argues that excellence in academia and higher education has embodied the norms of the market, and competition between academics, between faculties, between institutions and between fields of research has become the main means of determining achievement, excellence, and promotion. The metrics that are used to determine success – publication in the right place, impact, and so on – are based on orthodox, or neoclassical economics and the assumptions, biases and norms contained therein.

Fitzpatrick asks what we could achieve instead if we moved from competition to collaboration within faculties and within higher education more generally. What could we achieve by articulating our goals and values and determining excellence in relation to the achievement of those goals and values rather than against one another?

Fitzpatrick’s argument relates to higher education, which is in a state of flux at the moment given the questions surrounding its funding and the role of higher education in society more broadly. The answer is, of course, not quite so simple, as to challenge or step outside of the mainstream competitive framework inherently makes oneself “uncompetitive”. Funding and prestige are therefore potentially sacrificed – a leap into the unknown that so far, only the University of Ghent has been prepared to take.

In other words, the system perpetuates and reproduces itself, while being almost impossible to step outside of. However, within the sphere of higher education, there is some level of awareness of the metrics, competition, and implications of this on career progression, wellbeing and industry more broadly, even if there is no clear or simple solution.

But the article raises broader issues that relate to my research, and the comment about economics – particularly neoclassical economics – functioning as a de facto operating system throughout society. The difference here is the general lack of awareness about the way that neoclassical economics shapes the way that society functions. Even within economics as a field of study and research, there is a generalised monoculture.

We can point to economics notions like competition and a belief in the free market, ways of measuring (GDP, for example), profit maximization, and so on, as having pervaded social consciousness and public discourse to such an extent that they guide and influence policy making even tacitly. By effectively fixing the rules of the game, and even the way we talk about the game before playing it by supplying the vocabulary and grammar, economics functions as a social operating system. And the sooner we are more aware of the impact of this, the sooner we can begin to challenge its effects.

Categories
Development Research World Bank

World Development Reports (and another blog post)

(Originally posted 5th October 2016 on my previous site):

These are annual Reports published by the World Bank into development triumphs and lessons. Each World Development Report (WDR) usually has a focus, and the 2017 WDR’s title is “Law and Governance”. Being just a little excited about this, I wrote a blog post that was published on the SLSA website, exploring the extent to which the World Bank was likely to open itself up to different approaches. You can read it here.

Overall, I’m not holding my breath for a radical realignment of World Bank policy, and even though the rewards could be immeasurable, I’m certainly not holding out for Economic Sociology of Law-based approaches to feature. But even just considering the role of law and governance in enabling (or hindering) development is a step forward. The World Bank is beginning to recognize that there is more to life than just economic equations.

There has also been a move towards experimentalism in development, which builds on behavioural economics and other slight expansions in policy over the past few years. While this is to be welcomed, there is a long way to go.

Categories
PhD Research Thesis

My original research plan (oh, how things have changed)!

I’m in the process of moving everything over from my old site to this shiny new one, and wanted to bring some of the content with me. This (included below in this post) is one of the original pages I wrote for the old site, back in 2012 or so, when I was just starting out with the PhD. Reading back on it now is a little bit like looking back over a long journey and realizing just how far you’ve come. The final draft that I’m about to submit is so different to what I originally wrote!

Of course, this is all completely normal and just part of the process of doing a PhD. But there are a couple of other things that have leaped out at me too, rereading over the abstract. There’s so much “jargon”! There are entire sentences below that make me wince. It’s not that I don’t understand the terms – I’m completely comfortable relating to and with the ideas. But really, my supervisor and I are the only two people in the building who understand what I’m talking about, then what is the point?

This has become quite a significant part of the drafting process as time has gone on, and I have another blog post lined up about this. But in the meantime, the only way research is going to have impact in the real world is if people in the real world can understand what you’re saying. And for this to happen, the research has to be accessible and in plain English (as well as interesting, engaging, and relevant, of course).

In the meantime, here is what I was embarking on some seven years ago…

Recent World Bank policy documents are notable for hinting at a retreat from doctrinaire reliance on “investment climate” discourse frameworks. Although the concept of an “ideal paradigm” still informs much of the World Bank’s lending and consulting praxis, there has been a reappraisal of the empirical certainties underlying many assumptions. While a quantitative, leximetric approach to law and governance continues to define World Bank ideology, assertions of causation between these and economic development are increasingly being questioned.

By taking a socio-legal approach to an investigation of the interaction between law and the economy, this research offers a new approach. Taking law as a socially constructed phenomenon existing as perceived by the actors in their interactions both with each other (economically-oriented actions and interactions) (see the work of Roger Cotterrell) and with the local laws (operating on a range of scales from the micro, macro, meta and meso levels (see the work of Sabine Frerichs and Amanda Perry-Kessaris), this approach questions both current terminology as being overly laced with economic theory, and the frameworks that deny the normative bias of much of the current discourse. The research responds to calls for careful empirical socio-legal studies by Cotterrell and Swedberg, amongst others, by conducting grounded-theory informed ethnography in Sri Lanka, interviewing foreign investors about their interactions with the legal system prior to, and during the investment process. The framing of law in a socio-legal paradigm thus facilitates the use of the results not only to engage with questions of correlation between the legal environment in Sri Lanka and the actions of foreign investors, but also with causation; understanding clearly the motivations and perceptions of the investors themselves.

The results will enable clarification of the interaction between law and the economy in Sri Lanka, as well as the use, abuse and avoidance characteristic of the interaction between foreign investors and local laws. It is then possible to ask whether legal and governmental reform lending conditionalities recommended by the World Bank and other International Financial Organizations (IFOs) were a factor in the attraction of foreign investment to the country, and to what extent this might have been the case. The results will allow for an appraisal of current IFO policies, as well as the extent to which Sri Lanka should tailor its legal system to the requirements of foreign investors, potentially at the expense of other actors in the domestic legal and economic systems. Moreover, a careful selection of interviewees should allow a comparison between attitudes and approaches towards the importance of formal law and legal systems in an investment situation, both along nationality and institutional sectoral axes. This should thereby facilitate closer appraisal of the legal reform process with respect to more accurate tailoring of the reforms depending on the desired outcome. This should also work to minimise unintended, and undesirable, side effects of reforms on local businesses and entrepreneurs, while facilitating investment according to policy objectives.