Marginal Revolution University

As deadlines are approaching and exam season is coming closer the content for my first few exams is all that has been on my mind. Given that I doubt that there is any way I can turn the topic of sets and limits or functions and their maxima and minima into any kind of interesting blog post, but at the same time I can't think of anything else, this week's blog post will just point towards some other interesting resources (if you just can not live without your weekly economics fix).

Of course, there are other interesting blogs such as Diane Coyle's Enlightened Economist or Noah Smith's blog (in his most recent post he talks about MMT the "new" hot topic in macroeconomics). But one resource I particularly like is Marginal Revolution University. This is a platform started by the same guys who also write the Marginal Revolution blog and provides students and anyone else interested in economics with a wide range of topics. When I first discovered the site sometime last year, most videos were on basic economics topics such as the tragedy of the commons, how taxes and subsidies work and other microeconomic concepts. But they've expanded their resource base tremendously and now even have a few videos on econometrics (I will probably check these out before my next exam) and my absolute favorite new addition: Women in Economics. The first episode was about the one woman in economics most people actually know, the only woman to ever win a Nobel Prize in economics, Elinor Ostrom. There are more videos to come and I am already excited. This type of resource reignites my interest in economics in times when my spirits are as low as the global minimum of a function (is there any better note to end on than a very bad math joke?).

The Politics of Polarisation

The recent focus of a politics essay I am writing concerns the relationship between ecological crisis and global structures such as capitalism. In my research, (which inevitably entertains a number of less relevant tangents), I was shocked to discover that whilst in 2007, 71% of Americans believed that burning fossil fuels would ultimately result in climate change, by 2011 this statistic had decreased to just 44%. This shift was described as "among the largest shifts over a short period of time seen in recent public opinion history," a change that occurred almost entirely along party lines, solidifying the general tendencies for the democrats to believe in and seek to avert/ redirect the climate disaster and republicans to minimise the significance of the issue or even its existence. Not only does this statistic paint a scary picture of a lack of recognition of the need for environmental sensitivity in policy and business, the importance of the party line on each side of the argument dividing opinion is indicative of a polarisation within politics. As a Brit, living through the coverage and political turmoil of Brexit, this polarisation is very evident to me in the handling of conversation between 'Brexiteers' and 'Remainers'. At times the debate on social media and other forum platforms feels like there is no middle ground, and certainly little room for nuance for fear of appearing lenient or receptive of the other perspective.
A Pew Research Centre graphic, illustrated below, illuminates this move towards polarising politics particularly vividly, underlining the increasingly definitive nature of partisanship, particularly in American politics. Accompanying this trend is analysis confirming that those who express ideologically consistent views have disproportionate influence on the political process as they are more likely to participate in both public and private ways. It pays to be unwaveringly partisan.
The image below this graphic represents the polarisation persisting on the policy issue of Brexit, highlighting the consistently polarised and even split between the two.






















Why does this phenomenon matter?
The existence of a politics increasingly defined by polarisation may seem irrelevant and detached from significant ramification however a number of structural and secondary implications can arise in a political environment plagued by persistent conflict. Below I will list just three examples of why we should be talking more about polarisation.

Extremism
The Overton Window is a concept first described by Joseph Overton, highlighting that the political viability of a suggested policy was dependent upon whether it fell within the boundaries of a range of political options and ideas deemed acceptable. This window of toleration can expand and shift in accordance with a particular society's evolution of political perspective. Those outside of the domain of acceptability seek to shift public perception of their idea, encouraging a shift in this window whilst those within seek to portray external perspectives as unrealistic and unattractive. Polarisation tends to push people further left or right, squeezing the centre perspective into something more trivial and comparatively quiet. This can open up susceptibility to extremity, playing upon existing ideological debates with the introduction of more radical elements. Examples of this phenomenon include shifts in several European countries to the support of 'right wing' parties based on the popularity of fears on immigration and the European Union. The ground gained by such parties can lead to the inclusion of members in legislative and executive bodies, entrenching polarisation further and introducing extreme perspectives onto the policy agenda.


Crowding out voices
A more structural point of interest with a politics defined by polarisation relates back to the entrenchment of gendered norms within political institutions. Within parliamentary two party systems such as the UK, feminist institutionalist scholars have pointed to the exclusionary nature of adversarial politics. Appealing to traditionally (whether socialised or otherwise) masculine traits of strength, confidence and aggression in depictions of successful politicians is reiterated in the nature of parliamentary debate which can often feel like more of an attack than a conversation and critique. This adversarial nature is further deepened with the rise of polarisation, with less room for the collaborative spaces that encourage diverse perspectives and make historically marginalised groups feel welcome to contribute to parliamentary political debate.

Loss of Collaborative Politics
A final point of concern with the rise of polarisation is the reduced capacity to cooperate politically in the pursuit of a broader goal. This is typified well in the first statistic given in this article. Global issues such as ecological crisis and poverty lose out on the cross party cohesion needed to produce a plan of action for change inaccessible to an individual party in an individual state in a single electoral term. To have a hope at addressing these deeper issues collaboration is a necessity not an embellishment. Polarisation puts this at risk, holding ramifications beyond state politics and domestic disagreement.

How to pay for your education

This week economist Tyler Cowen wrote a Bloomberg piece on a new idea in education. Lambda school is a new startup that tries to somewhat level the playing field when it comes to education. Instead of paying tuition upfront students can opt for an income share agreement. Basically, they don't pay anything while they attend university but agree to pay a share of their income once they get a job. For example, Lambda school offers a scheme where you pay $0 upfront, and then 17% of your income for the first two years of your job (but only if you make $50k+). If you earn exactly 50k in your job after graduation, you pay $708 a month for 24 months, which makes a total of $17,000. One the one side, this is far less in total than students at private universities in the US pay in a year.  However, it's more in monthly payments than students pay on their student loans. 

Lambda's main objective is to make education about students finding well-paying jobs. They offer courses mainly for the tech-industry for which the required skills can be difficult to attain without proper education and coding classes can be too expensive for many people to afford. In this sense Lambda offers a great deal to students: they only have to pay if Lambda is successful in their mission. They even have a career development team focussed on advising students for the career market. 

Cowen talks about the idea of income-sharing agreements more generally. They offer a greater incentive for investments into students future. If the institution that is teaching you owns a share in your future income they have a greater incentive to properly educate you and make sure you actually do get a high paying job. With this type of equitization (in Cowen's words) students that earn more pay more in tuition than those who earn less. More importantly, this type of agreements opens the doors for talented and driven people from low-income background that might not otherwise be able to afford this type of education. Cowen also talks about the adverse selection problem he sees with this. Adverse selection is a situation in economics when one party has more information about their abilities than others. In this case, prospective students know more about their work-ethic and skills than does the university. If the majority of students are less hard working and might not find a high paying job this model could fail. Furthermore, what about careers in lower income fields, or where success is less likely?

For now, Lambda school offers only courses in tech-related industries and seems to work out quite well, for the school and its students. To see if this idea is truly successful and worth pursuing by more institutions will depend on the long term effects, but it's an innovative and new way to think about education, which is highly valuable in a time when total student loan debt runs as high as $1.56 trillion in the United States. Students shouldn't have to take on this enormous amount of debt and this new idea might change the system so that they don't have to. 


Economics and the Problem of Exclusion

This week, hidden amongst headlines of Brexit analysis and suggested recipes for weekly culinary inspiration, my news app notifications presented me with a headline from the economist. 'A dispiriting survey of women’s lot in university economics'. When searching for the article again for the purpose of this blog post, the economist website provided at least 7 articles directly challenging a persistent bias within academic economics. The survey referenced in the initial article listed a number of common experiences reported by female economists trying to succeed in academia. Conducted by the American Economic Association, the findings are disheartening. Women and non-white economists reported the smallest rate of satisfaction, pointing to a lack of the feeling of being valued. This group was also more likely to report facing discriminatory treatment in seeking work, with half of women identifying with this experience and 29% of non-white economists. Heavily noted were instances of sexual assault, harassment and inappropriate interactions within their professional environment, with a sizeable minority sharing that they had been asked to perform sexual favours in order for career progression. Academia in general is notorious for sexual harassment, ranking second only to the military. Further evidence carried out by Professor Heather Sarsons found that female publications have less of an impact on receiving tenure at universities than their male counterparts.




Clicking on to the next article revealed more research pointing to an endemic problem within economics towards women. Professor Donna Ginther describes how women face a thicker glass ceiling in economics, with reduced chances of reaching tenure, becoming professors, and embarking upon PhDs compared to men. The differences in policy preferences between men and women add another layer to this problem, a 2013 study suggested that men were more likely to favour deregulation and lower minimum wages than women. If women continue to be pushed out, a skewed orthodoxy is created with ingrained bias that has already proven a point of criticism for this profession in the wake of the financial crash.
These reports can feel disheartening. The next two held more hopeful conclusions, seeking to suggest ways in which economics can face this problem head on. The first suggestion encourages the use of economic tools themselves, collecting and analysing data to identify the areas where economics discriminates against women. A second challenge may sit more uncomfortably within the profession, encouraging innovation of teaching styles and content, rearranging tutorials to encourage an inclusive space without ridicule or overbearing voices, shifting from the traditional norms of the subject.' How economics is trying to fix its gender problem' talks of mentoring between senior and junior economists, providing forums and groups where advice is readily available and support is provided. Instituting a more explicit code of conduct is another idea circulated within the AEA to create a "professional environment with equal opportunity and fair treatment for all economists" although the lack of sanctions takes away its punch somewhat. A female push to resolve the problem is only part of the solution however. As asserted by Rohini Pande from Harvard University“this cannot just be the work of women.” Male economists must also take ownership of this flaw, uniting with female colleagues to show them their experiences are being heard and will be met with action.