The grinch who stole talent

Chris Dillow (of Stumbling and Mumbling), responding to Gordon Brown’s recent speech to the Labour Party, says that “economic success requires that talent not be unlocked, and remain unused”. So Brown’s call for the development of “all the talents of all the people” is “purest wibble” because “all profits come from power, and this means disempowering talented workers”.

Now Chris may be shooting for some sort of curmudgeon of the year award here, but what’s worse is that his argument is misleading. The first problem is that he politicises something which can’t be changed, which is the fact that life involves choice. Chris says:

… specialisation stifles many of our talents. The musician who becomes a lawyer never fully unlocks his musical talent. The cricketer who becomes a doctor lets his cricketing talent wither.

But these examples are chosen so to contrast the ‘world of work’ with ‘fun’ things. You could just as well say ‘the gymnast who becomes a lacrosse player never fully develops his vaulting skills’ or ‘the muralist who becomes a photographer never fully develops her drafting skills’. Even an imaginary society of extended lifespans and perfect leisure will produce these sorts of choices. I’d hope we can agree that Gordon Brown can’t be blamed for not having an answer to that.

When you do turn to ‘work’, of course, you have to agree that it does constrain people. This is because work is transactional: you have to keep your side of the bargain. But you get things in return, including things that help you to develop your ‘talent’, not the least of which may be a context through which to define your talent. The transactional framework of skill development is, in fact, wider than what is often understood as ‘work’. The trainee gymnast, for example, has to agree to stick to a certain diet and a certain training schedule. If he doesn’t, he won’t receive further coaching. So becoming a gymnast resembles work (even if no money changes hands). Many gymnasts might say it is work. Conversely, work can be fun and rewarding: you get to get better at something.

Of course, Chris would argue that while this might be an ideal formulation of ‘work’, most jobs just aren’t like that. Part of his argument is that the transaction is unequal: the ‘skills’ you get to acquire are in fact demeaning and – crucially – you’re often expected to work at less than your full capacity. True, plenty of jobs are dull and demeaning. But use any economic model you like – and Chris is using a Marxist model – the trends have been going the other way. There is more automation. There are more high skill jobs than there used to be; people live longer, and have longer retirements in which to develop other skills. There is more leisure time. Politically – and this is one of the EU’s finest achievements – there is greater labour mobility and therefore more choice of occupation. And there are more educational opportunities. Many of these things could be reversed – and our political culture will be one determinant of this – but drudgery for all is not yet a requirement.

Another problem with Chris’s argument is that he takes ‘talent’ as essentially personal. In Chris’s view, talent is a thing that lies within which can either be released or kept imprisoned. The latent premier league footballer inside the call centre operative; fully formed but denied opportunity for expression. I would suggest that a better way to think of ‘talent’ is as a predisposition to respond quickly to development in the context of a willing audience. Skills and admirers: for ‘talent’, you need both. On this understanding, latent premier league footballers don’t exist: there are only those who actually do play in the premier league. The rest (including you and me, possibly) are ‘other’ footballers. We might in some sense be ‘better’ than the premier leaguers, but we don’t have their audience. Or look at it from the other end. Imagine that the number of premier league clubs were halved tomorrow (the TV audience has declined). None of the premier leaguers are changed, physically. Their passing and dribbling skills are undiminished. But now, suddenly, half of them are no longer premier league players. So was that talent ever fully theirs?

This is significant in the context of increasing diversity, which has been the trend. There are more kinds of sports than there used to be (new sports get invented). Handball is popular in Germany but not – so far – in Britain: after the 2012 London Olympics this could change. And it’s not just sports: there are more kinds of job than there used to be. Necessarily, the ‘audience’ for each is smaller. What does this mean for talent? Less opportunity, or more? We seem to have to give a mixed verdict.

Finally, there’s personal experience. My experience of work is that there’s no limit to how challenging you can make it. You can aim to make it easy, of course, and that’s a sensible aim. But despite occasional idiocies, there are regular opportunities to do things in a new way. I think this is true at least of every profession. By contrast, here is Chris’s view of the way things work in medicine:

If you had to go to hospital for a minor operation, who would you rather perform it: the brilliant surgeon for whom the operation is a dull routine one, or the young and mediocre one for whom it’s a challenge requiring full use of their talent?

I suspect this situation never arises, and not just because surgeons, like most people, tend to work in teams so as to combine experience. The young surgeon will be committed to doing her job well – on the basis of her training – and the older one is likely to want to innovate. Both are good.

Serbia: That Incredible Shrinking Country

This weekend’s election results in Serbia, and in particular the gridlock state of the political process and the resilience of the vote for the nationalist Serbian Radical Party (as ably explained by Doug in the previous post), pose new, and arguably reasonably urgent questions for all those who are concerned about the future of those European countries who currently find themselves locked outside the frontiers of the European Union. What follows below the fold is a cross-post of an entry I put up earlier this afternoon on the new global economy blog: Global Economy Matters. I don’t normally like cross-posting, since I would prefer to put up original Afoe content, but my time is a bit pressed at the moment, and I feel the issues raised are important enough to merit a separate airing on this site.
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Italy’s Supply Constraint

The OECD estimates the current potential capacity growth rate of the Italian economy at 1.25% a year. Actually I suspect even this very low number is over-optimistic. Growth since 2002 has been as follows: 2003 – 0.1%: 2004 – 0.9%: 2005 – 0.1%. To be sure forecast growth for this year is somewhat higher, at 1.4%, and optimists are expecting this to be more or less repeated next year. But I suspect this outcome is unlikely simply because the global economy now seems to be slowing (and in particular the ever important US economy),so the strongly advantageous situation of 2006 is unlikely to be repeated, while next year the Italian government has promised to introduce an important package of spending reductions which are bound to negatively affect growth, at least in the short term..

But why is potential growth capacity in Italy so low?
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Why France MUST Reform – MUST, I Tell You!

Since the withdrawal of the CPE and the resulting collateral damage to Dominique de Villepin, not to mention Nicolas Sarkozy’s unexpected appearance as a unity figure at the height of the crisis, it’s rapidly being promulgated as conventional wisdom that France “is ungovernable”/refuses to “reform”/cannot be “reformed”. There is only one problem with this discourse, very popular in anglophone leader columns and the like, which is that it’s nonsense.

It’s quite often been raised here on AFOE that the French economy isn’t actually in trouble. Growth, although not great, is ticking along, inflation is controlled, unemployment is higher than the UK but lower than Italy or Germany, and the demographics (as Edward Hugh will no doubt point out) look a lot better than many other countries. Certainly, there’s more youth unemployment than one might like, but almost all the figures for this are wildly misleading. The percentage rate of unemployment in the 15-24 years age group looks scary high, but is actually a very small percentage of that group–because most of them are in education or vocational training of some form and hence not part of the labour force. Unemployment as a percentage of the age group is rather lower than the national rate and not much different from that elsewhere in Europe. (Le Monde ran a useful little chart of this in a supplement yesterday that doesn’t seem to be on the web.) Much – indeed most – of the difference in employment growth between France and the UK in recent years has been accounted for by the UK government going on a hiring binge.

So why the crisis atmosphere? More, as ever, below the fold..
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Open borders and bottleneck jobs

I have learned via the unlinkable newsfeed site NOS Teletekst that The Netherlands will be opening its borders to East European workers coming from the new EU member states, starting January 1st 2007. Dutch Parliament pushed back the original entry date, May 1st 2006, that was proposed by employers. The big fear is abuse of social security.

In Great Britain, Ireland and Sweden the borders are already open. Portugal, Spain and Finland will follow suit on May 1st while Germany and Austria keep their borders closed for the time being.

In Belgium there was some debate about allowing workers for so-called bottleneck jobs, jobs for which there are hardly any qualified candidates in Belgium.
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EURES: one million job offers within the EU

The EU launched a new website today, EURES where one million jobs within the EU will be on offer. From the EURES-site:

EURES (EURopean Employment Services) brings together the European Commission and the public employment services of the countries belonging to the European Economic Area and Switzerland. Other regional and national bodies concerned with employment issues are also included, such as trade unions, employers’ organisations, as well as local and regional authorities. (…) EURES is playing an increasing role in identifying the surpluses and deficits of manpower in different sectors, and in overcoming qualification bottlenecks. The network also helps improve employability, particularly that of young people, through the acquisition of professional experience abroad. EURES also contributes to the creation of a common European labour market, as well as, in certain border regions, to the establishment of an integrated regional labour market.

Currently, only 2 percent of 450 million Europeans work legally in another member state. (source: De Telegraaf)

A modest proposal for CAP reform

I’ve been in Canada for the last month, getting in my last family visit before settling in to the serious business of either going back to school or collecting unemployment checks. My family is large – Great-Grandpa had 25 children, and Grandpa had 9 – so it takes a while if you go to see my family. Ours is a large, disorganised, occasionally frightening clan who, depending on pure whim, identifies itself as either German-Canadian, Dutch-Canadian, Russian-Canadian or Ukrainian-Canadian. Our tribal language is an obscure dialect of Low Saxon (Platt for the actual Germans out there) spoken primarily in Paraguay, Mexico, Central America and Saskatchewan, and whose most famous speaker is, arguably, Homer Simpson. It’s a long story, don’t ask. It not being much of a literary language, we all just say our ancestors spoke German – the liturgical language of my clan’s particular sect.

In contrast to Europe and the US, Canadians are a lot less disturbed about asking people about their ethnic identities or expressing some loyalty to them. I guess the main reason is that Canada has never really pretended to be a nation built atop an identity, but rather a place where an identity of sorts has slowly built up from the existence of a nation. There is no Canadian myth of the melting pot, and as our soon-to-be new Governor General has demonstrated, no serious demand for nativism in public office. Michaëlle Jean, who is slated to be the powerless and unelected Canadian head-of-state when the Queen is out of the country – e.g., practically always – when she is sworn in on the 27th, is no doubt the most attractive candidate we’ve ever had for the office. And, like her predecessor, she is a former CBC/SRC reporter and talking head.

Ms Jean and I share an endemically Canadian charateristic: We both can and do identify ourselves shamelessly as several different kinds of hyphenated Canadians. She is French Canadian, but that’s hardly strange. She is also Franco-Canadian – Ms Jean has dual citizenship with France, making her the first EU citizen to be Governor General of Canada and the first French citizen to be acting head of state of Canada since 1763. But more unprecedentedly, she is Haitian-Canadian and – as logically follows – African-Canadian.

Yes, Ms Jean is black, and furthermore in an interracial marriage. Well, that’s Canada for you. America puts black folk in squalid emergency shelters, we put ours in Rideau Hall.
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No Answers Only Questions

One person who could rightly claim to know more about global ageing and its possible consequences than anyone else in the business is the German Director of the Manheim Research Institute for the Economics of Ageing Axel B?rsch-Supan. If there’s a conference being organised, he seems to be there. Actually his comments at both these meet-ups are well worth reading in and of themselves (here, and here).

In a sense B?rsch-Supan is almost uniquely qualified to express opinions on the topic since he has both devoted a large part of his professional career to studying the question, and he lives and works in a society which is already reeling under the impact. As he says:

“Today?s Germany has essentially the demographic structure that the United States will reach in a quarter of a century. The dependency ratio (the ratio of persons aged 65 and over to those aged from 20 to 59) is at 28 percent, and it will reach 75 percent in 2075, if we dare project that far. Almost one-fifth of the German population today are aged 65 and over. One quarter are aged 60 and over, which is relevant because the average retirement age in Germany is 59.5 years. Thus, in this sense the United States is not ?entering largely uncharted territory,? …. Rather, they can look to Europe?in particular to Germany and Italy?to see what will happen in the United States.”

I mention B?rsch-Supan because he serves as a good pretext for going over where we are to date with the issue. As he says himself. watching demography change is rather like watching a glacier melt, on a day-to-day basis it’s hard to see that anything is happening, but over time the impact is important.

One of his recent papers has the intriguing title: “Global Ageing: Issues, Answers, More Questions“. It is a good up-to-date review of the ‘state of the art’, and a quick examination of the points he makes probably serves as a good starting point, since I can’t help thinking, in the case of global ageing, it isn’t so much what we know that matters, it’s what we don’t know.

So here we go, a review of what we “know”, what we think we know, and what we don’t know:
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Arrivederci Lisbon?

The Financial Times reports today that the team lead by Wim Kok, set up after the March economics summit, and charged with carrying out a review of the Lisbon process, is likely to find that we are badly behind schedule. This is hardly surprising since the Lisbon agenda was rather stronger on rhetorical nicety (including the now famous objective of turning Europe into the ?most competitive and dynamic knowledge-based economy in the world? by 2010) and rather weaker on concrete policies and objectives.

The intention is now to change this balance:
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Book Review: “European Integration 1950-2003: Superstate or New Market Economy?”

Once upon a time, there was a large, intellectually hegemonic, somewhat totalising ideology rooted in a heterodox school of economics. Its advocates proposed to make massive changes to the structure of society and claimed that only such a revolutionary realignment could alleviate the contradictions and failures of the existing order and save the world from stagnation and misery. They claimed that their programme would produce immediate results, and that the only reason it wasn’t immediately implemented was because entrenched interests were manipulating the public against them.

Ultimately, advocates of these principles did gain power in many places and were able to implement elements of their programme. Some came to power through revolutions of various kinds that granted them the near-dictatorial powers they needed to make the changes they believed necessary. Others were able to convince electorates and even elites that theirs was the way of the future. They turned public dissatisfaction to their advantage, especially during economic downturns when people were willing to turn to new solutions and elites feared that the masses would turn against them.

And, they had some arguable successes, but no unambiguous ones. In some places, particularly those where effectively unlimited power had shifted to them, they often maintained highly inequitable regimes which grew harder and harder to justify, faced ever growing public disaffection, and turned to more oppressive and manipulative means to sustain control. This undermined their movement, but despite the best efforts of their enemies was not quite able to kill it off.

In states where more democratic methods had been used, the need to compromise with established interests and to sustain public consent forced them to accept measures often contrary to their initial programme. Their ideological identity tended to shift over time as winning elections grew more important than ideological purity and as the drawbacks of real power became apparent. Actually being held responsible for results forced many members of this tradition to accept their enemies’ interests as at least partially legitimate, and compelled them to less radical legislative programmes.

In some of those nations, these radical parties became increasingly manipulative and difficult to distinguish from their former enemies. But, in a few places, the necessary dilution of their programme brought about an ideological synthesis that appeared successful, and this success in turn showed that the radical programmes they had once advocated were perhaps unnecessary. In the end, ideology had no real hold on them, and the models and methods that seemed to work became the political and economic programme that they were identified with. Their former allies who operated more dictatorial regimes were easily repudiated.

But others were unable to accept that option. They included dissidents who had been burned by the growing authoritarianism of their own failed revolutions, or who were simply unable to accept that their early ideological purity had become superfluous. They were isolated and powerless, only able to function in the states where their former allies had become moderates, leaving them without meaningful public support. They fumed at the world’s unwillingness to go the way they wanted, and increasingly recast the history of the world in terms of their own ideological predispositions. The past became, in their minds, an unending conflict between an ideologically pure vanguard and scheming established interests, a story of their courageous champions betrayed by back-sliding traitors. Ultimately, the world moved on and these radicals virtually disappeared outside of intellectually protected milieux like privately-funded think tanks and universities.

Of course, by the now the astute reader will have recognised that I am talking about the history of neoliberalism.
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