ageing and prejudice

July 24th, 2015

I have long been aware that older persons, like children, tend to be less inhibited in expressing opinions, even though their opinions, and choice of language, might offend. But, do people actually become more prejudiced as they age? University of Queensland psychologist William von Hippel (born 1963) thinks that this is not unusual.

My research suggests that, although many people remain unprejudiced throughout their lives, older adults have a tendency to be more prejudiced than their younger counterparts.

Psychologists used to believe that greater prejudice among older adults was due to the fact that older people grew up in less egalitarian times. In contrast to this view, we have gathered evidence that normal changes to the brain in late adulthood can lead to greater prejudice among older adults.

The frontal lobes are the last part of the brain to develop as we progress through childhood and adolescence, and the first part of the brain to atrophy as we age. Atrophy of the frontal lobes does not diminish intelligence, but it degrades brain areas responsible for inhibiting irrelevant or inappropriate thoughts. Research suggests that this is why older adults have greater difficulty finding the word they’re looking for – and why there is a greater likelihood of them voicing ideas they would have previously suppressed.

…. When I was teaching at Williams College in Massachusetts, an African-American student told me how her white grandfather had recently started referring to her as his “little nigger grandchild”. She was shocked and hurt by this, and couldn’t understand why her grandfather would say such a thing when she knew he loved her and was still mentally alert. The consequences of his disinhibited words were substantial ….. ….

[P]eople who find themselves becoming less tolerant or more prejudiced can be quite unsettled by the shift in their own attitudes – a change that can affect friendships and their position in society.

William von Hippel , “Do people become more prejudiced as they grow older?, BBC News Magazine, 17 July 2015.

Sadly, Professor von Hippel has no remedy for those of us who become less tolerant and more prejudiced as we grow older. It is something to keep in mind, however.

public transportation vs private cars

July 24th, 2015

Availability of public transportation and population density are important factors to take into account when choosing a place of residence. In a recent move from Europe to North America, this influenced very much our decision to live in the downtown core of Victoria (British Columbia) rather than the suburbs.

Living without a car is liberating, but only when convenient, reliable public transportation is available. In most of the world, there is little or no public transportation in suburban or rural areas. Sadly, some cities (Houston, Texas comes to mind) have no urban core, with the result that public transportation is very limited, and not a serious option.

In most cities, driving is horrible. It is stop-start, boring and bad-tempered.

Many people say they drive because they do not like being crushed against other sweaty, disagreeable commuters. I have driven and I have commuted. Fellow passengers are a great deal more civilised than other drivers — and their odours are less offensive than the emissions you inhale in a car.

In many cities today, there really is no need for a car. Public transport and walking can get you almost everywhere you need to go. It is healthier and it is greener. In London, I don’t drive for weeks, or sometimes months, at a time. (Others have taken to bicycles. I do not regard them as healthier — certainly not in London.)

Michael Skapinker, “Why buying a car makes no sense“, Financial Times, 23 July 2015 (metered paywall).

the success of Donald Trump

July 23rd, 2015

Donald Trump is polling surprisingly well in the Republican presidential primaries, with support from 24% of potential voters, about the same as the next two candidates (Jeb Bush and Scott Walker) combined.

FT columnist Edward Luce writes that Trump’s popularity reflects the mood of angry voters who “feel left behind, belittled and insulted” by traditional politicians.

The latest poll shows that only 8 per cent of Republican graduates support Mr Trump against 32 per cent of those without a degree.

These are the angry swaths of America that feel left behind, belittled and insulted. They want to take their country back but cannot put their finger on what exactly they mean. For them it is evening in America. Nobody argues their case.

Then along comes Mr Trump. Foreigners may be tempted to see him as uniquely American. But he has his equivalents everywhere. Think of Silvio Berlusconi in Italy or even the UK’s Nigel Farage.

The worse they sound, the better they do. That is the power of anti-politics.

Edward Luce, “Donald Trump leaves indelible mark on Republicans“, Financial Times, 23 July 2015 (metered paywall).

I assume that the term “graduates” refers to college (secondary school) graduates, but this is not clear in the article.

Mr Luce’s column has provoked negative responses from angry readers. Here is a comment posted by “Consider This…” just an hour ago:

I resent the liberal biased title of this article. Donald Trump is a certified jackass but that is a reflection on himself and nobody else. In FTs’ attempt to smear conservatives they have found a cheap angle. These types liberal-twisting articles make me want to cancel my FT subscription.

rewarding innovation

July 23rd, 2015

Tim Harford, Financial Times “undercover economist”, wrote a superb column on innovation for last weekend’s newspaper. He ends it by asking: should rewards for innovation be higher or lower? Here is Mr Harford’s conclusion:

There is a balance to be struck. When innovators keep too much money, the benefit of using or recombining new ideas spreads too slowly. But if innovators make no money at all, then they will end up creating for the love of creation rather than for any financial reward. That may be fine for pop songs and poetry but less so for nuclear fusion or an HIV vaccine. Costly research programmes will not be funded.

The right balance depends on the innovation in question, and how expensive it is to develop. We probably need better incentives to create some new medicines. Yet our intellectual property system gives too much protection to ideas that would have been created anyway, such as simple software, business methods and Mickey Mouse. It is no surprise that the Venetian doges tried to keep the glassmakers in Murano. We should be grateful that they failed.

Tim Harford, “It’s tough turning ideas into gold“, Financial Times, 18 July 2018 (posted 21 July to this ungated link).

Read the full column. You won’t regret it. And, you will learn about the fascinating history of glassmaking, an early innovation. Mr Harford’s past articles, including this one, are archived at his home page,

entrepreneurship in east Africa

July 23rd, 2015

This weekend President Barack Obama will be attending the Global Entrepreneurship Summit in Nairobi, Kenya. On the eve of Obama’s visit, Stephan Chambers explains that many East Africans are entrepreneurs by necessity, not choice.

[In a recent visit to Uganda] I asked person after person if they were an entrepreneur.

Overwhelmingly, the answer was “no”. Yet they told me about the companies they’d started and those they ran alongside their “formal economy” jobs.

The formal economy is deemed so profoundly risky that virtually everyone has a start-up alongside, to offset the risk of their jobs disappearing. Almost everyone also has some kind of smallholding or agricultural venture.

In other words, entrepreneurship is a type of risk avoidance. Unlike in Europe or the US where it is celebrated as the embracing of risk, in east Africa it is a way to reduce risk. And it is not considered elective, or brave. ….

[It] is about getting done what you can get done until things change.

It is hedging against losing your job, diversifying the risk of political change or lost contracts.

Stephan Chambers, “The Africans who go it alone to cut risk, not increase it“, Financial Times, 22 July 2015.

Professor Chambers is associated with the Saïd Business School, University of Oxford, and former Director of its MBA degree.

the pain in Greece

July 20th, 2015

FT columnist Wolfgang Münchau thinks that Grexit -a Greek exit from the eurozone- will eventually happen. The cost, however, will be extremely high because Prime Minister Alexis Tsipras dismissed his finance minister at the worst possible moment.

[Alexis Tsipras] should never have hired Yanis Varoufakis as his finance minister. Or he should have listened to him, and kept him on. But instead the Greek prime minister chose the worst of all options. He followed Mr Varoufakis’ advice of rejecting the offer of the creditors — until last week. But having done this, Mr Tsipras committed a critical error by rejecting Mr Varoufakis’ plan B for the moment when the country’s banks closed down: the immediate introduction of a parallel currency — IOUs issues by the Greek state but denominated in euros. A parallel currency would have allowed the Greeks to pay for their daily transactions when cash withdrawals were limited to €60 a day. A total economic collapse would have been avoided.

But Mr Tsipras did not go for this, or indeed any other plan B. Instead he capitulated … [by accepting] another very lousy bailout deal. ….

Can Mr Tsipras still avert disaster? If there is a snap election in the autumn, he might well win it and then revive Mr Varoufakis’ parallel currency idea at some point. But I think the parallel currency moment has gone with the man. My hunch is that Mr Tsipras will run a rabble-rousing political campaign, with a lot of rhetoric against the creditors but then agree to whatever the creditors are demanding, and follow the programme to its dramatic climax.

Wolfgang Münchau, “Grexit remains the likely outcome of this sorry process“, Financial Times, 20 July 2015 (metered paywall).

the Iran agreement on nuclear weapons

July 19th, 2015

John Kerry explains why, for him, reaching an agreement with Iran to end a 12-year nuclear stand-off was important.

Just hours after engineering the biggest gamble in US foreign policy since Richard Nixon went to China, John Kerry, the Vietnam veteran turned chief US diplomat, explained what drove him to a deal with an Iranian regime that routinely shouts “Death to America”.

“When I left college, I went to war. And I learnt in war the price that is paid when diplomacy fails,” said the former five-term senator who narrowly lost the 2004 presidential race to George W Bush. “I made a decision that if I ever was lucky enough to be in a position to make a difference, I would try to do so.” ….

People close to the 71-year-old Mr Kerry say his personal style — a frenetic pace of work and sheer perseverance married to incredible patience honed in the Senate — helped secure what supporters say is the best way to prevent Iran from getting a nuclear bomb.

Demetri Sevastopulo, “John Kerry, a tireless diplomat with zeal for a deal“, Financial Times, 18 July 2015 (metered paywall).

The negotiations with Iran were not bilateral. They involved the US and five other world powers: Russia, France, China, the UK and Germany.

GW Bush served in the Air National Guard during the Vietnam conflict – defending Houston from an improbable enemy attack. As President, he was eager to authorize the still ongoing wars in Iraq and Afghanistan. I suspect that Mr Bush’s lack of combat experience had something to do with his decision to go to war, but I might be wrong.

the third Greek bailout: two views

July 13th, 2015

Two FT columnists offer very different views on the deal agreed upon by government leaders on Monday, at 6am, following 17 hours of heated discussions. Who capitulated, Greece or Germany? Martin Sandbu supports the prevailing wisdom (capitulation of Greece). Gideon Rachman argues that it was Germany who capitulated.

At least Alexis Tsipras avoided having to send Greece’s fairest one hundred maidens in tribute to Berlin. Apart from that, the Greek prime minister has had to concede on pretty much everything the other members of the euro demanded. ….

Greece capitulated because the European Central Bank forced it to do so. In flagrant defiance of its treaty obligation to support the general economic policy of the eurozone — which includes since June 2012 a requirement to separate the health of the banking system from the solvency of sovereigns — the ECB forced a shutdown of the Greek banking system and made clear it would only let it function again once a deal on sovereign finances had been struck.

This has established beyond any doubt that the independence of the eurozone’s central bank from politicians is nothing of the sort. Far from being independent, the ECB does governments’ bidding. But its dependence is selective — and that is something that should worry the citizens of eurozone nations beyond Greece.

Martin Sandbu, “Three unedifying lessons of the Greek deal“, Financial Times online, 13 July 2014 (metered paywall).

Europe woke up on Monday to a lot of headlines about the humiliation of Greece, the triumph of an all-powerful Germany and the subversion of democracy in Europe.

What nonsense. If anybody has capitulated, it is Germany. The German government has just agreed, in principle, to another multibillion-euro bailout of Greece — the third so far. In return, it has received promises of economic reform from a Greek government that makes it clear that it profoundly disagrees with everything that it has just agreed to. The Syriza government will clearly do all it can to thwart the deal it has just signed. If that is a German victory, I would hate to see a defeat. ….

[O]rdinary Germans, Dutch, Finns and others … have every right to feel aggrieved. When they joined the euro, they were told that there was a “no bailout” clause in the treaty setting up the single currency. That was meant to reassure taxpayers that they would never have to pay the bills of other eurozone countries.

Gideon Rachman, “Germany’s conditional surrender“, Financial Times online, 13 July 2015 (metered paywall).

My own feeling is that the entire eurozone will suffer from the fallout of this crisis. The dream of a single European currency – the euro – is in danger. The euro from the beginning was a political project that made no economic sense. Without political will, the project is doomed to fail.

China’s stock market crash

July 12th, 2015

After reaching a peak of 5,166.35 on June 12, the Shanghai index fell 30 per cent in just three weeks. ….

Since then, the ruling Chinese Communist party has launched an unprecedented series of measures — each seemingly more desperate than the last — to halt a crisis in the stock markets that could derail its 25-year experiment with capital markets reform. ….

By Friday [10 July], the losses began to reverse …. But the rebound came only after heavy state intervention — including using the central bank to buy shares — that may have done long-term damage to the credibility of markets that the Chinese leadership is so eager to promote. ….

One 25 year-old investor from Suzhou [said] “… I still believe that 6,000 or even 8,000 points is not a fantasy. The market will bounce back before the end of the year.”

At the older end of the investor spectrum are the retirees gathered in the hall at Dongzhimen China Securities in Beijing, which could easily be mistaken for a hostel for the elderly. One woman, who declined to give her name but said she is almost 80, invested Rmb20,000 ($3,200) when the market was at 5,000 points. “I’ve lost two-thirds of my money,” she said, her voice cracking. “I really want it back and when I get it, I will never invest in the stock market again.”

“There were a lot of media reports about the index topping 5,000, 6,000,” she added. “The newspapers were lying.” These elderly investors were entering the back half of their lives at the moment when China began to embrace reform. “Old people often don’t understand economics,” says Nie Riming, a pensions expert at the Shanghai Institute of Finance and Law. “They are easily duped.”

Tom Mitchell, Gabriel Wildau and Josh Noble, “Equities: A bull market with Chinese characteristics“, Financial Times, 11 July 2015 (metered paywall).

Inexperienced investors tend to buy when prices are high, then sell when prices fall: a recipe for disaster when prices fluctuate wildly. The woman who purchased stock when prices were near their peak is an example of this type of investment strategy.

There is more at the link above. The article is recommended reading.



Greece’s creditors are divided

July 10th, 2015

It is not at all clear whether Greece’s latest offer will be accepted, or rejected. FT columnist Wolfgang Münchau explains.

Alexis Tsipras has achieved something that has eluded him in the past five months: he has managed to split the creditors. The International Monetary Fund insists on debt relief. The French helped the Greek prime minister draft the proposal and were the first to support it openly. ….

What he [Alexis Tsipras] is now proposing is, economically, not fundamentally different from what he, and the Greek electorate, rejected in Sunday’s referendum — but it works politically for him. ….

The Dutch, like the Germans, are extremely hostile. Would the Finnish accept a third programme? The Baltics? The Slovaks? ….

Both her [Angela Merkel’s] own Christian Democratic Union and the Social Democratic party, part of the governing grand coalition, would prefer Grexit. A deal would be very hard to sell for both of them.

Wolfgang Münchau, “Do not take this deal for granted — if Greece’s creditors want it to fail, they will find a way“, Financial Times, 10 July 2015 (metered paywall).

An additional problem, Mr Münchau notes, is that the Greek economy is in worse shape now than it was two weeks ago. Banks are insolvent. Capital controls and withdrawal limits have caused most economic activity to grind to a halt.