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Reshaping the financial system after the storm

Reshaping the financial system after the storm

The question of the social utility of the financial services and of the appropriate modes of remuneration of its actors has occupied a central place at the G20 meeting held in Pittsburgh. Indeed, the G20 leaders expressed a shared willingness to back new global regulatory standards for the banking industry. Yet, their reasons for doing so need some unpacking.

The recent interview by Prospect magazine of the FSA Chairman Adair offers a case in point, as does his recent speech at Mansion House. Turner suggests that the financial services sector should slim down to a more ‘socially useful’ size and reduce bankers’ pay accordingly. He also estimates that market deregulation has led to an oversized financial sector. Finally, he proposes that regulators should step in to reconnect the size, profit and pay level of the sector to what is ‘socially optimal’.

Though it may sound intuitive, the idea of a ‘social optimum’ that could be used as a guideline for regulating finance is ambiguous and deserves a close look.


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Living Wills and Assisted Suicide

Kerrie Wooltorton is believed to have been the first person to use a living will as part of a successful attempt to commit suicide: http://www.guardian.co.uk/society/2009/oct/01/living-will-suicide-legal . The 26-year-old wrote her will, and then three days later took poison and called an ambulance. The will said that no steps were to be taken to prolong her life, and that she desired only to be made as comfortable as possible and not to die alone.

If doctors had kept her alive, they may have been open to legal action. Indeed any interference with Wooltorton against her wishes could have been interpreted as an assault. But might there nevertheless be a moral case for ignoring a living will in such circumstances?

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Should we be afraid of virtual reality?

Prominent
authors like Susan Greenfield and Roger Scruton have raised worries about the rise of virtual worlds such as Second Life, which
they fear might have a negative impact on human relationships, as people
increasingly spend their lives hidden behind an “avatar”. The movie Surrogates, recently released, precisely pictures a future humanity that lives
as it were by proxy: the story takes place in a world where people stay at home
and send remote-controlled “surrogates” – androids that are typically younger
and better-looking versions of themselves – out in the world to do things for
them. In the same vein, American futurologist Ray Kurzweil predicts that within a quarter of a century, virtual reality (VR) will rival the real
world: “If we want to go into virtual-reality mode”, he says, “nanobots will
shut down brain signals and take us wherever we want to go. Virtual sex will
become commonplace”. However, far from sharing the worries of people like
Greenfield and Scruton, Kurzweil believes this is a prospect we should look
forward to.*

 

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T-illegal actions and the case for legal ambiguity

Question: When is a crime not a crime? Answer: when it will never be prosecuted.

The release this week by the Director of Public Prosecutions of his interim policy on prosecution of assisted suicide raises a number of questions – as discussed yesterday in this blog by Simon Rippon. The new policy formalises what has been informal for some time, that family members of patients with terminal illnesses (or other serious conditions) who help the patients to travel overseas to access assisted suicide are unlikely to be prosecuted for their actions. But their actions will still be technically criminal. Should there be a class of ambiguous actions that are neither legal, nor illegal?

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Supercoach and the MRI machine

Are there neuroethical issues in sports? Dr Judy Illes thinks so, in a talk given in Canada on September 17. People are using neuroimaging to assess ability (which may also pick up unsuspected pathologies in the brain), intervening against depression in athletes, and perhaps using deep brain stimulation for enhancing motor performance. Does enhanced training methods pose a new problem for sport?

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Assisted Suicide and Accusations

As a result of a court ruling requiring clarification of the law, the UK's Director of Public Prosecutions (DPP), Keir Starmer, yesterday issued some guidelines concerning the legal grey area of assisted suicide. The DPP published a list of factors that will weigh in favour of and against prosecutions for assisted suicide.

Care Not Killing (CNK), a UK umbrella group for organisations and individuals that oppose legalising assisted suicide and euthanasia, says that under the new guidelines:

it is envisaged that prosecutions for assisted suicide will be less likely where the deceased was terminally ill or suffering from a severe and incurable physical disability or a severe degenerative physical condition from which there is no possibility of recovery. [T]his classification … implies that the lives of a whole group of people … are less deserving of the law's protection than are others.

This kind of objection crops up frequently to laws that make special provision for some groups of people and not others. But does it hold up to scrutiny here? The guidelines do not state that the terminally ill, severely and incurably disabled, and those suffering a severe degenerative physical condition (hereafter, for brevity: The Unfortunate) are less deserving of anything than others, so if they do indeed imply that The Unfortunate are less deserving of the law's protection than others, it must be because the DPP's justification for the guidelines presupposes this judgment.

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Why pander to the pandas?

Chris Packham has recently (and not for the first time) suggested that we should stop trying to save the panda — an expensive exercise — and instead put our efforts and resources to ‘better use.’ This suggestion is worth some unpacking.

His argument is a familiar one about cost-effectiveness and resource allocation: we should use our resources so as to maximise their beneficial effects. This kind of argument relies, of course, on an estimation of the value of pandas (and so the disvalue of their extinction) with the cost-effectiveness of saving them being this value divided by the cost of doing so. This is then compared to the value and cost-effectiveness of other environmental concerns like protecting “biodiversity hotspots”.

Importantly there is a range of ways of valuing pandas and biodiversity that each may give different answers to the question of what we should do. It is instructive to consider a number of combinations of these to see how they might pan out and affect Packham’s claims.

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Wealth versus Happiness

Economists have long used Gross Domestic Product (GDP) per capita as a proxy measure for the average level of wellbeing within a country. GDP is a measure of the goods and services produced in a country and is a fairly good proxy for material wealth. However, it fails to capture many other factors that are clearly important for wellbeing: for example, amount of leisure time, health, quality of one's environment, wealth distribution, employment rates, and changes in wealth over a lifetime. Some negative influences on wellbeing – such as crime – may even contribute positively to GDP since the costly government responses to them are included in a country's GDP. The gap between GDP and wellbeing obviously has important practical implications since policies correlated with higher (lower) GDP are likely to be adopted (rejected) for that reason.

On 14 September an expert group commissioned by French president Nicolas Sarkozy and and including no less than five Nobel prize laureates released a report recommending that official statisticians should move to a wider measure of wellbeing that takes into account some of the factors that GDP leaves out. This move away from 'GDP fetishism' has long been championed by the commission's chair, Joseph Stiglitz.

Everyone seems to acknowledge the problems with GDP, but the commission's report gets a cool response from some of the business press, with the adjective 'Orwellian' cropping up here and there. The Economist admits that 'broadening official statistics is a good idea in its own right', but emphasises that 'these are early days' and remains sceptical about the practicalities of moving away from GDP. The primary concern is about potential abuse of a less well defined measure by governments or interest groups and a resulting lack of public trust. The message seems to be that it's fine to research broader measures and to start collecting figures, but until something robust is found, GDP per capita should remain the gold standard. Policymakers shouldn't put any credence in the broader measures yet.

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Anaesthe-steak™: pain-free meat and the welfare paradox

A recent article in the New Scientist raises the prospect that alongside ‘gluten-free’, ‘GM free’, ‘sugar free’, and ‘dairy free’ our supermarket shelves may soon contain ‘pain-free’ meat. American philosopher Adam Shriver, writing in Neuroethics, argues that everyone concerned with animal welfare should support the replacement of animals used in factory farming with livestock genetically modified to have reduced sensitivity to pain. (See here and here for blogs discussing Shriver's suggestion). However, many find the idea of developing ‘pain knockout’ animals disquieting or frankly disturbing. In a survey of attitudes towards the development of pain-free animals (for laboratory experimentation) vegetarians and members of the animal protection community were strongly opposed to such an idea. The strongest opposition to the development of pain-free animals may, paradoxically, come from those who have traditionally been most concerned about animal suffering.

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Academic freedom isn’t free

Should scientists be allowed to publish anything, even when it is wrong? And should there be journals willing to accept everything, as long as it seems interesting enough? That is the core of a debate that has blossomed since the journal Medical Hypotheses published two aids-denialist papers. Medical Hypotheses is a deliberately non-peer reviewed journal: the editor decides whether to publish not based on whether papers are true but whether they are bold, potentially interesting, or able to provoke useful discussion. HIV researchers strongly objected to the two papers, making the publisher Elsevier withdraw them. Now there are arguments for removing Medical Hypotheses from PubMed, the index of medical literature. Ben Goldacre of Bad Science and Bruce G Charlton, editor of Medical Hypotheses, debate the affair on Goldacre's blog. Are there scientific papers that are so bad that there should not be any journal outlet for them?

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