How do markets optimise the delivery of social services and social welfare? This question surfaces many of the challenges for the Austrian School, the philosophy that free markets and the price mechanism can do a remarkable job in managing people and their behaviour. While initially Friedrich Hayek’s theorising argued that the role of the State should be minimal, he ultimately conceded that some State regulation was required in order to maintain markets, and some other functions. For example, ‘[t]o prohibit the use of certain poisonous substances, or to require special precautions in their use, to limit working hours or to require certain sanitary arrangements, is fully compatible with the preservation of competition. The only question here is whether in the particular instance the advantages gained are greater than the social costs they impose.’ (The Road to Serfdom, p.38/9) The ultimate question of Hayekian liberalism is how much does the government have to interfere? What is the minimum possible function of government? Continue reading “Hayek, The Busted Flush: Economic Value, Marketisation, and Social Justice”
On the day when Apple are supposed to be launching a new iPhone with facial scanning capability, the Guardian has delightfully timed a piece warning of the dangers of the technology. Its functions potentially extend to predicting sexual orientation, political disposition, or nefarious intent. What secrets can remain in the face of this extraordinary power! Indeed, it’s two years ago since I heard Martin Geddes talking about people continuing to wear face masks in Hong Kong not because of the smog, but to avoid facial scanning technologies deployed by an overbearing security apparatus. There’s no hiding from the data, no forgetting.
The international system is a complex and convoluted thing, and sets the framework against which States are measured for their effectiveness, righteousness, or other measures that could serve as proxies for legitimacy: transparency, robustness, even happiness, or goodness. According to these indices, Ireland performs reasonably well – very well actually. It is the seventh most ‘unfragile’ country in the world; the eleventh most ‘good’; the 18th most transparent; and the 19th happiest. Most of these indices combine different metrics such as GDP, social metrics like unemployment, education rates, and so on, which tend to mean that Ireland – and other countries – won’t deviate too much from one ranking to the next. So Ireland performs well as a country. However, the combination of the EU Crisis, Brexit, and Trump’s America seem to represent a trifecta of bad things over which Ireland has little or no control, and could send the country hurtling down those indices. So if Ireland has so little control over these shaping factors, is Ireland in fact a legitimate country, a genuinely sovereign power?
There has been much written in recent times about post-truth politics, and much associated naval gazing as commentators, analysts and politicians themselves have tried to understand how to deal with all this. Leave campaigners in the UK promised £350m a week for the NHS; Donald Trump still thinks he opposed the war in Iraq; and Vladimir Putin claimed no involvement with the war in Ukraine. Populism, reactionism, anti-intellectualism – call it what you will, it’s certainly got currency.
Speaking of currency, the pound has taken a pounding since the Brexit vote, and overnight trading on the 6th-7th October witnessed a flash crash that traders have struggled to explain. David Bloom at HSBC put it that the pound had become the de facto opposition in Britain. ‘Sterling,’ he said, ‘has become a structural and political currency.’ I’d go further than that. It’s the algorithms providing the opposition. The algorithms governing the trading desks even scrape news feeds to see potentially influential stories (one commentator suggested that comments from Francois Hollande on the Brexit negotiations may have triggered the ‘flash crash’). They sense and learn, and respond, constantly scoring and valuing political decisions and the smallest market moves.
The algorithms then form their own truth. This isn’t post-truth politics, it’s absolute truth. And that is potentially a whole lot worse.