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Blog  2ou42oij

Blurring the lines

Sexism is a pernicious undercurrent in our society that is exacerbated by the fact that significant amounts of such sexist behaviour are either not observed as such or are somehow deemed acceptable (or at least more acceptable than an equivalent racial slur).

One only has to look at 'Everday Sexism' on Twitter to see the countless examples of such flagrant sexism. The most recent high-profile case of the latter is John Inverdale's ill-thought out remark on this year's Wimbledon champion, Bartoli.  The BBC issued a short written apology for a sexist remark that arguably warranted further disciplinary action.

As abhorrent as sexism is, however, there is a tendency in some circles to use the term too loosely.  The Guardian claimed that Holly Willoughby's question to Andy Murray, about whether he would now propose to Kim Sears given that he had now won Wimbledon, was a sexist question.  They claimed that since one has nothing to do with the other, asking such a question was evidently sexist.

This is wrong on two levels.  Firstly, winning Wimbledon could easily have implications for whether the winner then goes on to get married.  Achieving a career goal, or reaching a milestone in one's career, is often seen as heralding an appropriate time to tie the knot.  Holly Willoughby's question is thus nothing to do with sexism - her question is founded on an entirely legitimate basis and would equally have been asked to a female winner.  Secondly, even if 'one has nothing to do with the other', it is a misguided logical leap to then claim that this means the question is sexist.  It is a baseless claim to suggest that a question about Murray's private life has sexist motivations.  Given the adulation and adoration that surrounds Britain's hero, Andy Murray, it would be more sensible to conclude that the question was asked because the British are naturally interested in his private life.

Parallels between school rules, financial crisis and the cocaine market

There is a strong tendency for authorities, when confronted with a problem, to opt for a quick-fix: banning whatever it is in question.  Banning is an artificial, cosmetic solution which does not tackle the root cause.  Hence, it tends to yield ineffective and often counter-productive outcomes.

In response to unhealthy eating habits in the playground, my school banished the ice-cream van (which sold lots of unhealthy snacks) from the school grounds.  The school correctly identified the problem: teenagers forming bad habits.  However, their response was wrong: it created a shadow market of schoolboys who sold the snacks at exorbitant mark-ups.  Thus, banning the ice-cream van did not solve the issue and furthermore, meant that students were paying 80p for a doughnut that would normally cost 20p.

Parallels can be seen with the cocaine market.  The consumption of cocaine is prohibited.  Yet that has not solved the core problem: drug misuse.  A black market has emerged where consumption of Class A drugs are still plentiful and drug users are susceptible to exploitation.

The parallel extends to the causes of the financial crisis: the bubble in the US sub-prime housing market.  In an attempt to deal with the growing inequality, the Clinton and Bush administration decided to expand homeownership.  By giving access to cheap credit to those who hitherto could not, they were fulfilling the American Dream.  However, when interest raises rose and sub-prime homeowners defaulted, a financial crisis was triggered as inter-bank lending froze up because no one knew who held the toxic assets.

These examples illustrate that when authorities respond to a problem with an artificial, cosmetic solution, it is not effective.  Its appeal is because it yields immediate benefits.  In practice, it does not tackle the root cause (and hence, the problem persists) and it often creates undesirable, unintended consequences.

Tackling "too big to fail" banks

Banks that are too important to fail can bring a global economy to its knees.  If financial institutions are too big to fail, then disastrous incentives are created: banks are encouraged to take excessive risks.  Why?  Well, if the risk pays off, the benefits are privatised (the bank profits) but if they fail, the costs are socialised (through bailouts from the taxpayer).  Hence, banks are not subject to market discipline - moral hazard is created.

There are several ways to tackle this "too big to fail" problem.  First, banks that have too large a market share can be forced to sell off some of its branches.  Second, the retail and investment arms can be ringfenced.  Third, (as is currently deficient in the USA) a strong safety net for individuals can be created.  This will enable governments to allow organisations to fail without allowing individuals to.  Firms should be allowed to fail, but not individuals.

However, these solutions bring its own problems.  The first solution assumes that market share is the problem with banks that are too big to fail - often this is not the case.  Market share may be a unwise barometer for breaking up banks since the problem may take other forms - for example, the level of exposure other firms and individuals have to that bank.  The second solution, suggested by the Vickers Report, may not tackle the too important to fail problem: for example, if Barclays Capital was about to fail, no sensible government would allow it to do so in light of the level of employment and pension funds it holds.  The third solution assumes that creating a strong safety net equates to not allowing an individual to fail.  However, perhaps it is precisely that that means an individual is failed - they are unemployed.

ECB intervention is necessary

Eurozone leaders need to take bold, decisive action to quell market fears.  Their lack of effective action is fuelling a run from the assets of weaker economies.  The longer Angela Merkel et al are indecisive, the scale of action that will be eventually required will keep on rising.  Even the election in Spain that delivered a thumping mandate for the People's Party who are firmly committed to austerity and reform did not slow the country's rise in borrowing costs.  Their yields on ten-year bonds are above 6.5%.  A similar story can be painted in Italy: the appointment of technocrat, Mario Monti has not seen much success with bond yields either.  Borrowing costs also rose notably in Belgium and France.  Germany, the country of "safe assets", only managed to sell 60% of ten-year Bunds at auction.

The problem is that Eurozone leaders are pursuing the wrong strategy.  They are talking about long-term strategies to reform the Euro: greater fiscal integregation and increased fiscal governance.  However, these policies do not have enough immediate effect.  The ECB is their best bet for quelling fears.  It needs to step in as the lender of last resort and offer unlimited liquidity to banks and pursue large-scale bond buying.  This will calm the markets and investors will be more confident buying sovereign debt from the peripheral economies.  This increased demand for bonds will reduce the bond yields.  Germany needs to overcome its inflation memories of the 1930s and overcome domestic political opposition regarding constitutional issues - because the consequences of not doing so are far too great: the break up of the Euro.

Is redistributive taxation just?

Redistributive taxation can be used to reduce the economic inequality in society.  To understand if this is a just policy, we need to consider why inequality exists in the first place.  If those that are successful in society are successful due to their hard work and effort, then redistribution may be unjust.  The well-off deserve what they have.  If, on the other hand, they are rich because they were favoured by the natural lottery (perhaps being born talented or into a wealthy family), then perhaps redistribution is just - because fair equal opportunities do not exist.  The status quo can be seen as arbitrary and therefore, can be legitimately altered.

On the other hand, there is a morality argument to be made against redistribution.  According to Kant, individuals should not treat others as a means to their own end - but as an end in itself.  Thus, redistribution at the expense of the well-off for others may not be morally sound.

However, perhaps this question - whether redistribution is just - can only be answered if we know inequality is just.  Inequality may well be justified for several reasons.  According to Rawls and his Difference Principle, inequality is justified if it maximises the position of the wost-off (principle of maximin).  What matters is their absolute position - the size of the pie they have, not their relative shares.  Furthermore, Nozick would claim that claiming justice is about the distribution of resources is nor here or there.  What matters, according to Nozick, is whether people's property rights have been respected.  If these two justifications for inequality hold, then it follows that redistribution is unjust. 

Do we have duty to do what is morally good?

We do not necessarily have a duty to do what is morally good.  A morally good action may require an individual to make a sacrifice on his part - for example, give some of his income to charity.  It is morally good precisely because it is not a duty - an individual goes beyond his duty.  If it were his duty, then the action would not be morally good.  It would simply be a requirement of him.

To understand this, we can use a simple example - should I give £10 to a homeless man on the street?  If I were not to give it, my inaction would not be morally bad.  It is morally neutral.  For the action to be morally bad, I would have to cause the homeless individual a direct, first-order harm.  If, on the other hand, I stole £10 from the man, then it would be morally bad since I have caused direct harm.