Data sharing-the guiding principle should be informed consent

27 11 2009

There are many good reasons why both governments and businesses may want to capture, analyse and share data. Good in the sense that the intention is to create mutual benefit for all concerned. In some ways we would like digital marketing, for example,  to be more targeted than it is, if only to avoid the torrent of spam email inflicted on us. The gathering of statistical information by governments can also be used to plan service provision and state investments in a more rational way. So I do not take  the view that governments and big business are out to get us and that any data gathering is inevitably an unwarrantable intrusion into privacy.

However, while the interests of data  gatherers and those whose data is gathered (datees perhaps?) may be congruent, they also may not. This is a particularly crucial point now that we leave such a long electronic data trial behind us through phones, email and internet browsing. We should understand as well that governments have a secular tendency to gather information for its own sake. This tendency is particularly exacerbated today when politicians and others in the state apparatus are more isolated from their constituents than before. In wishing to reconnect they are very keen on gathering as much information about us in as many ways as they can. Their insecurity also inclines them to want to police society more closely , hence current attempts to have access to all the electronic  data held by phone companies.

The discussion around data sharing and privacy is very complex. However I think there is one principle that, if it were adopted, would enable a way to benchmark what should and should not be allowable. That is the principle of informed consent. In other words, those whose data is being collected should have agreed in advance that this should be so. The principle of informed consent is implicit in any democratic society. If we need a legal definition of informed consent which we could apply to data gathering we can go to the Nuremberg trials of 1947.

The voluntary consent of the human subject is absolutely essential. This means that the person involved should have legal capacity to give consent; should be so situated as to be able to exercise free power of choice, without the intervention of any element of force, fraud, deceit, duress, overreaching, or other ulterior form of constraint or coercion; and should have sufficient knowledge and comprehension of the elements of the subject matter involved as to enable him to make an understanding and enlightened decision.

It should be informed because effective democracy requires people to understand what is being done to them and in their name. It should involve active consent because that is the essence of democratic government. In practice this should mean that any information in data form should only be stored or shared with the prior active consent of the individual concerned. There should always be an opt-in rather than an opt-out button. The onus is on the data gatherers and sharers to persuade and convince that this is the right thing to do.

This approach to data sharing is consistent with the view that we are autonomous citizens whose cooperation and consent with the state or with business is an active conscious decision taken with all the facts discuss and debated out in the open. In that sense it is an approach which would contribute towards a broader democratic renewal.


How much is enough?

25 11 2009

Robert Skidelsky, with whom I debated on this issue a few weeks ago, has returned to the fray in the Guardian. In his new article he looks at Keynes’s prediction that by 2030 the world (or at least the developed part of it) will have raised living standards sufficiently to call a halt to growth and to reduce the working week to 15 hours. Skidelsky points out that we have already reached Keynes’s income target in the west, but instead of this leading to a shorter working week it has led to the tendency for people to work longer for higher pay. He explains this as due to  insatiable desires induced by the consumer society.

 Keynes …recognised that there are two kinds of needs, absolute and relative, and that the latter may be insatiable. But he underestimated the weight of relative needs, especially as societies got richer, and, of course, the power of advertising to create new wants, and thus induce people to work in order to earn the money to satisfy them. As long as consumption is conspicuous and competitive, there will continue to be fresh reasons to work.

As I pointed out in my debate with Skidelsky, the developing world is far from reaching even the basic levels of income required to combat poverty. This alone would demand that we continue to grow the world’s economy for many years to come. I also argued that even in the west there are many areas of life and many sections of society which are underfunded and  suffering deprivations of different types.

However let us accept for the time being that we stay in the developed countries and we equalise incomes to produce a tolerable subsistence level for all of society. Would this then justify an end to growth? It is a good question to ask. After all, it is true that often consumption for consumption’s sake can induce a feeling akin to nausea. It is something I experience every Xmas when confronted with the huge pile of presents which arrive for my children, most of which are consigned to the rubbish tip within days (sorry grandparents!). It is also true that we ‘need’ many of the things we buy only in the sense of satisfying a desire, rather than in order to keep alive and healthy.

So should we cut back on growth and train ourselves to not want things which we do not absolutely need? I think this is a dangerous path to pursue. Human beings have developed modern sophisticated societies on the back of scientific, medical, technological and engineering progress. Taking the long view, in the space of a few thousand years we have transformed ourselves from primitive beings at the mercy of the elements to masters of our own destiny. We have turned our planet from a hostile environment to one of relative safety for most. Accepting an end to growth in all of these areas would mean that we have effectively called a halt to our upward progress.

This would have profound effects on who we are. Humans have become something special through our conflict with the natural forces which threaten us. We have transformed ourselves into civilised people through this process. If we gave up on this struggle, stopped being inquisitive and experimental, we would be in danger of becoming the human equivalent of cows, well fed, safe and chewing the cud to pass the time.

Where Skidelsky has a point is in his recognition that we have paid a price for the way in which we organise production,

The accumulation of wealth, which should be a means to the “good life,” becomes an end in itself because it destroys many of the things that make life worth living. Beyond a certain point – which most of the world is still far from having reached – the accumulation of wealth offers only substitute pleasures for the real losses to human relations that it exacts.

Here Skidelsky touches on the alienating and destructive effect of modern capitalism on human relations,something Marx described brilliantly in his description of commodity fetishism. It is true that the capitalist mode of production isolates and alienates us from each other through the endless process of competition. But to use this as a reason to abandon economic growth is to confuse the current way we organise production (capitalism) with the purpose of production (raising living standards). We can find an alternative to the first eventually perhaps, but we should never give up on the struggle to develop ourselves through further control over the world around us.

Austerity or growth-Cameron flips and flops

23 11 2009

David Cameron appears to have realised, as I predicted, that his party’s call for austerity is not terribly appealing. He is now talking af the need to promote economic growth. At this stage there is no substance behind the talk and it seems to be as rhetorical as his earlier call for austerity.

There are really only two main ways in which government can influence what happens in a market economy. The first is at the level of political leadership. This means that government sets an agenda for the nation, and creates a legislative framework to enable the agenda to operate. In that sense focussing on the need for growth is a step in the right direction. However, even at this level it is important to identify what the barriers to growth are that need to be overcome.

In the UK, some of these are historical and structural and to do with the shape of the UK economy, particularly its over-reliance on financial services. Some are to do with social and cultural factors, particularly the culture of risk aversion which has enveloped our society in the recent past. One of the main dangers as we creep out of the recession is that the lessons we learn may make us even more risk averse at a time when boldness is at a premium.

A new report from the Confederation of British Industry (CBI) for example predicts that businesses will adopt ‘a more balanced, less risky pathway to growth’. This may seem sensible in the aftermath of a recession, except that it contains the wrong assumption that it was risky behaviour which created the recession in the first place. This has now become the default position of those who have tried to explain the recession, that it was the product of risky behaviour in the financial sector.

It is vital that we do not allow this interpretation to remain unchallenged. The bubbles in the financial and housing sector which preceded the recession were the product of a stagnant economy, not caused by risky behaviour. Real productive investment in the UK and other western economies was seen as too long term and risky and has declined in favour of speculation. The bankers were responding to a demand for risk free investment with high returns hence the boosting of both the housing sector, seen as a one way bet, and the slicing and dicing of investments to spread the risk.

The second area in which governments can affect what happens in the economy is in the areas they have direct control over such as education, civil administration, health and infrastructural projects. The main danger here is that without an overall plan of how to revive the economy, decisions will be short term  and based on trying to placate public opinion. Here we can see the dangers of the weakness of the political class at its most exposed. Without the confidence to make long term decisions, which may be unpopular, the decline of the UK threatens to become a self fulfilling event.

What all these factors mean when put together is that collectively there is little belief that we can become a dynamic economic nation once again. One can sense that behind the flip-flopping of Cameron on the economy lies a genuine lack of belief that major change can be effected. In the absence of  clarity on this issue it is very unlikely that real political leadership in the form of agenda setting will emerge.

Can the UK economy become dynamic again and does it matter if it doesn’t?

10 11 2009

nukesThe Government has finally announced a nuclear power station building programme. Typical of Labour’s record on infrastructural projects it is far too late, too little, underfunded and came in the form of a statement in the House of Commons with no opportunity for a debate or a vote to give it democratic legitimacy, no doubt opening the way for endless legal challenges from the anti-nuclear and nimby lobbies.

It appears to be the very least that the government could do in the face of the expected power supply shortages in the future and the commitments it has made to cut carbon emissions. What it is not is part of any concerted plan to reinject dynamism into the UK economy. We are still lacking any overall vision for how the UK is going to become economically vibrant again. Of course there are  people, some of whom I debated at the Battle of Ideas Conference recently(see here for audio record), who argue that economic growth is a dangerous or futile objective.

In my previous blog I argued that economic growth is a good thing for social, cultural and philosophical reasons as well as the more obvious economic ones. I was struck at the Conference last weekend by two reactions against this point of view from people who did not fall easily into the categories of anti-growth viewpoints I was attacking.

First there were people who agreed in general that global economic growth was necessary, but that this should be mainly in the developing countries. Their argument is that we in the west have pretty much got what we need and we do not require faster growth rates. Secondly there were those, including Martin Wolf, who argued that even if we wanted to it is not possible to reverse the relative or perhaps even absolute economic decline of the UK and countries like it.

The two viewpoints are complimentary in arguing that faster growth, more economic dynamism, is either unnecessary or even if it is then it is not possible. If these views are not challenged and an alternative economic route mapped out, then the UK is condemned to stagnate with no prospect of changing itself in any fundamental way.

The recession has shocked many people in the west and shaken their confidence in the market system and added to a sense that economic growth is problematic. There is an increasing sense that we have reached a ‘new normal’, a position where slow or flat economic growth is likely and perhaps even desirable. There is a danger that this lack of confidence becomes a self-fulfilling prophecy. 

With a General Election in the next six months it is time to put on the table what we think should be on the economic agenda. If you have any views about what the economic policies of the next government should be then please feel free to respond. In future blogs I will examine why a fatalistic approach to growth and dynamism in the west is wrong and how we can begin to tackle it.

Economic growth and its discontents

2 11 2009

Speech given by me at Battle of Ideas Conference 31 October 2009 in debate with Lord Skidelsky and others

Continued economic growth is important because it means that the productivity of labour increases, we get more for less, we get more control over our lives and we become less vulnerable to the vagaries of nature and of fortune.

The whole idea of economic growth is under attack from many quarters. Sociologists such as Richard Layard represent an anti-consumerist trend. Layard argues that economic growth and its consequent material benefits do not make us happy. I would like Layard to do a survey of the millions made unemployed through this recession to see how much happier they are now that they have lost the benefits of a wage. Do we really think that poverty will make us happier?

Environmentalists argue that economic growth is inducing climate change and irrevocably damaging the world around us. These people are in reality scientific progress deniers. They do not believe that we can grow our way out of problems. Yet it is China, the fastest growing economy in the world, which is adopting and developing alternative forms of energy at a faster rate than anywhere else. It is economic growth that is driving this and making it possible.

There are also those who argue that scientific and material progress are too prone to risks and dangers to pursue safely. They question whether such things as GM foods, nuclear power or the pharmaceutical industry are not doing more harm than good. Their campaigns against scientific progress slow down and discourage investment and development delaying the benefits that progress can bring.

All of these trends have one thing in common. They represent a loss of belief in humanity and its  ability to change, adapt and grow economically and materially. Why is continued economic growth so essential? I would argue that there is a necessity argument but also  philosophical and social reasons why we need to push for further and faster economic growth.

When is enough enough? Not yet! The average global wage according to the World Bank was around £5000 before the recession began. This means that were growth to stop now and everybody to receive the average wage we would all have the standard of living of a UK pensioner without any savings. Just to get to the reasonable but not luxurious average wage in the UK of £25,000 would mean a fivefold increase globally. This means that we need of necessity further economic growth to raise the average standard of living.

Of course, many millions of people in the developing countries are way below even the average wage and require a bigger leg up. But even in the developed western economies there is still a need for the creation of extra resources. Poverty, deprivation and lack of sufficient services exist in many areas of life. My father-in -law for example was recently refused a life saving operation from the NHS essentially because it was too expensive.

From a philosophical point of view it is important that we understand how inimical anti-growth sentiments are to the whole tradition of western civilisation. The Book of Genesis says that man shall have dominion over nature and urges us to ‘go forth and multiply’. We are turning our back on what has enabled us to crawl from the swamps and into the relative comfort of the modern world, our ability to tame the hostile environment we found ourselves in. David Attenborough made this about turn explicit when he blamed the Bible for climate change earlier this year.

Many of the discontents that people have with economic growth are connected to failures of the market economy rather than growth itself. The market is often an inefficent producer and distributor. It is a system based on production for profit rather than to meet the needs of society. The market can create environmental problems and pollution. It is unstable and contains within it continued recessionary tendencies as we are experiencing now. It is often wasteful and irrational and it produces and reproduces inequality because of the division between those who own wealth and those who do not.

But the problems of how the market economy works should not blind us to the benefits of continued economic growth. We could end up throwing away the growth baby with the market bathwater.

Anti-growth sentiments turn reality on its head. Far from creating problems all human civilisation, culture and progress have been built on economic development. The most economically dynamic and successful countries have always been the most innovative, the most culturally dynamic and the most progressive in every way. The alternative is also true, that economically stagnant or backward countries have less going for them across the board. Turning our back on growth means turning our back on what makes us most human, our ability to exercise dominion over the world we live in.