Elite Anxiety: Paul Collier’s “Future of Capitalism”

Paul Collier, the controversial Oxford professor famous for his development work and his acclaimed books Exodus and The Bottom Billion, is back. But the author of Exodus and The Bottom Billion is long gone. The compelling writing and carefully reasoned world that made Bottom Billion impossible to put down has somehow disappeared. In The Future of Capitalism, Collier is tired. He is bitter. And he is sometimes quite mad – so mad that his disdain for this or that group of thinkers or actors in society consumes his otherwise brilliant analytical mind.

Instead of having his editors moderate those of his worst impulses, he doubles down on his polemic conviction. Indeed, he takes pride in offending people in all political camps, believing that it supports the book’s main intellectual point: ideologues of every persuasion are dangerous, one-size-fits-all too constricted for a modern society and we should rather turn to a communitarian social democratic version of pragmatism – by which he means some confused mixture of ideas that seem to advocate “what works” on a case-by-case basis.

Yes, it’s about as nutty as it sounds. And he is all over the place, dabbling in all kinds of topics for which he is uniquely unqualified to offer advice: ethics, finance, education, family, social policy and on and on and on.

One reason The Future of Capitalism went awry might have been the remarkable scope: capturing all the West’s so-called ‘Anxieties’ – and their solutions – in little over 200 pages of non-academic prose. Given the topic, a very unfitting sort of hubris.

Apart from the feeble attempt at portraying a modern society that has “come apart at the seams,” there’s no visible story, no connection between the contents of one paragraph and the next and hardly any connection between one chapter and another. Rather, it’s a bedlam of foregone conclusions, appeals to pragmatism, dire stings to ideological ‘extremists’ on either side and a hubris unfitting for someone like Collier. I guess this is a risk that established academics run at the end of their careers, desperately trying to assemble all their work into One Grand Theory.

The most charitable thing I can say about Collier’s attempt is that it offers a lot of policy prescriptions – tax unearned land rents, tax-and-redistribute productivity increases, expand housing supply through local governments, have governments direct the Silicon Valley-clusters of tomorrow, cap mortgage finance, benefits for families, expand ethical responsibilities of firms, encourage marriage, create a new G6 (EU, US, Russia, India, Japan, China) that could overcome the global collective action problem (good luck with that!), expand Germanic vocational training and workers’ representation on company boards, embrace patriotism but never nationalism, detach ownership from control and place control with stakeholders (workers, suppliers, local homeowners).

The common denominator seems to be an imperative to do all these things that seem to have worked well in some time or place or utopia, conveniently ignore institutional or cultural reasons, while espousing all ideological positioning and political capture.

Just voicing the suggestions ought to spark at least some fruitful conversations.

Chapter 8, ostensibly concerned with the Class Divide, is an illuminating case study. It takes Collier about 36 pages (out of 37) to mention ‘class’ (not that I blame him: the concept is way too nebulous and politically infected to be meaningfully dealt with in such short space). Instead, Collier discusses all kinds of topics whose relevance to class is quite unclear: public policy for single mothers, German vocational training, lawyers and the rule of law, a Yorkshire project to encourage reading in school kids – not to mention a ten-page digression into the institution of marriage for stable families.

When his polemics, dry writing, unsupported analysis or incomprehensive treatment of a topic hasn’t put me off (I gave up on the book at least four times during the last couple of months), some of the picture Collier paints does resonate with me. There is a social and geographical divide in Britain: the economically flourishing South-East, dominated by the well-educated English and the cosmopolitan accents of almost every language on the planet, is posited against the collapsing towns of the backward Midlands or the North. If this divide is real – in support of which Collier offers next-to-no evidence – it is not clear to me that it wasn’t already captured in, say, David Goodhart’s The Road to Somewhere or Branko Milanovic’s Global Inequality, or for that matter the countless of magazine articles trying to outline the fractures that Brexit unearthed about British society. Considering the effort those authors put into mapping their divides, Collier’s attempt seems frivolous.

He can do better. Much better.
My fellow Notewriter Rick is organising a summer reading group around Feyerabend’s Against Method. The equivalent Collier reading group could be aptly named Against Ideology.

The Factual Basis of Political Opinions

“Ideology is a menace” Paul Collier says in his forthcoming book The Future of Capitalism and I couldn’t agree more: ideology (and by extension morality) “binds and blinds”, as psychology professor Jonathan Haidt describes i. And ideology, especially utopian dreams by dedicated rulers, is what allows – indeed accounts for – the darkest episodes of humanity. There is a strange dissonance among people for whom political positions, ideology and politics are supremely important:

  • They portray their position as if supported by facts and empirical claims about the world (or at least spit out such claims as if they did believe that)
  • At the same time, believing that their “core values” and “ideological convictions” are immune to factual objections (“these are my values; this is my opinion”)

My purpose here is to illustrate that all political positions, at least in part, have their basis in empirically verifiable claims about the world. What political pundits fail to understand is not only that facts rule the world, but that facts also limits the range of positions one can plausible take. You may read the following as an extension of “everyone is entitled to his or her own opinions, but not to his or her own facts”. Let me show you:

  • “I like ice-cream” is an innocent and unobjectionable opinion to have. Innocent because hey, who doesn’t like ice-cream, and unobjectionable because there is no way we can verify whether you actually like ice-cream. We can’t effortlessly observe the reactions in your brain from eating ice-cream or even criticize such a position.
  • “Ice-cream is the best thing in the world”, again unobjectionable, but perhaps not so innocent. Intelligent people may very well disagree over value scales, and it’s possible that for this particular person, ice-cream ranks higher than other potential candidates (pleasure, food, world peace, social harmony, resurrection of dinosaurs etc).
  • “I like ice-cream because it cures cancer”. This statement, however, is neither unobjectionable nor innocent. First, you’re making a causal claim about curing cancer, for which we have facts and a fair amount of evidence weighing on the matter. Secondly, you’re making a value judgment on the kinds of things you like (namely those that cure cancer). Consequently, that would imply that you like other things that cure cancer.

Without being skilled in medicine, I’m pretty sure the evidence is overwhelmingly against this wonderful cancer-treating property of ice-cream, meaning that your causal claim is simply wrong. That also means that you have to update your position through a) finding a new reason to like ice-cream, thus either invoking some other empirical or causal statement we can verify or revert back to the subjective statements of preferences above, b) renege on your ice-cream position. There are no other alternatives.

Now, replace “ice-cream” above with *minimum wages* and “cancer” with “poverty” or any other politically contested issue of your choice, and the fundamental point here should be obvious: your “opinions” are not simply innocent statements of your unverifiable subjective preferences, but rely on some factual basis. If political opinions, then, consists of subjective value preferences and statements about the world and/or causal connections between things, you are no longer “entitled to your own opinions”. You may form your preferences any way you like – subject to them being internally consistent – but you cannot hold opinions that are based on incorrect observations or causal derivations about the world.

Let me invoke my national heritage, illustrating the point more clearly from a recent discussion on Swedish television.  The “inflammatory” Jordan Peterson, as part of his world tour, visited Norway and Sweden over the past weekend. On Friday he was a guest at Skavlan, one of the most-viewed shows in either country (boasting occasionally of more viewers than the largest sport events) and – naturally– discussed feminism and gender differences. After explaining the scientific evidence for biological gender differences*, and the observed tendency for maximally (gender) egalitarian societies to have the largest rather than smallest gender-related outcomes, Peterson concludes:

“there are only two reasons men and women differ. One is cultural, and the other is biological. And if you minimize the cultural differences, you maximize the biological differences… I know – everyone’s shocked when they hear this – this isn’t shocking news, people have known this in the scientific community for at least 25 years.”

After giving the example of diverging gender rates among engineers and nurses he elaborates on equality of opportunity, to which one of the other talk show guests, Annie Lööf (MP and leader of the fourth largest party with 9% of the parliamentary seats) responds with feelings and personal anecdotes. Here’s the relevant segment transcribed (for context and clarity, I slightly amended their statements):

Peterson: “One of the answers is that you maximize people’s free choice. […] If you maximize free choice, then you also maximize differences in choice between people – and so you can’t have both of those [maximal equality of opportunity and minimal differences along gender lines]”

Lööf: “because we are human beings [there will always be differences in choice]; I can’t see why it differs between me and Skavlan for instance; of course it differs in biological things, but not in choices. I think more about how we raise them [children], how we live and that education, culture and attitudes form a human being whether or not they are a girl or a boy.”

Peterson: “Yes, yes. That is what people who think that the differences between people are primarily culturally constructed believe, but it is not what the evidence suggests.”

Lööf: “Ok, we don’t agree on that”.

So here’s the point: this is not a dispute over preferences. Whether or not biology influences (even constitute, to follow Pinker) the choices we make is not an “I like ice-cream” kind of dispute, where you can unobjectionably pick whatever flavor you like and the rest of us simply have to agree or disagree. This is a dispute of facts. Lööf’s position on gender differences and her desire to politically alter outcomes of people’s choices is explicitly based on her belief that the behaviour of human beings is culturally predicated and thus malleable. If that causal and empirical proposition is incorrect (which Peterson suggests it is), she can no longer readily hold that position. Instead, what does she do? She says: “Ok, we don’t agree”, as if the dispute was over ice-cream!

Political strategizing or virtue signalling aside, this perfectly illustrates the problem of political “opinions”: they espouse ideological positions as the outcome of enlightened or informed fact-based positions, but when those empirical statements are disproved, they revert to being expressions of subjective preference without a consequent diminution of their worth! Conservatives still gladly hum along to Trump’s protectionism, despite overwhelmingly being contradicted in the factual part of their opinion; progressives heedlessly champion rent control, believing that it helps the poor when it overwhelmingly hurts the poor. And both camps act as if the rest of us should pay attention or go out of our way to support them over what, at best, amounts to “I like ice-cream” proposals.

Ideology is a menace, and political “opinions” are the forefront of that ideological menace.


*(For a comprehensive overview of the scientific knowledge of psychological differences between men and women, see Steven Pinker’s The Blank Slate – or Pinker’s much-viewed TED-talk outline.)