Showing posts with label gini. Show all posts
Showing posts with label gini. Show all posts

Tuesday, 27 December 2011

Electron Drift and Murder Rates

     I have met with a lot of criticism for my posts on income inequality and muder rates (e.g. here). The primary criticism is that people are far more complex than my posts might suggest and that it is not abstract notions such as 'income inequality' that determine a person's actions but rather their personal history. As a result I am compelled to respond.
     To do so I begin with an (classical) analogy from physics; the notion of drift velocity. Electrons in a conducting wire tend to'wander' about in random directions at approximately 1570 km/s. This random movement is akin to the complex lives of individuals. Impossible to describe and predict, it accounts for most of the movement of the electrons. Likewise, individual events in our lives account for our characters and habits.
     Now, what occurs when we apply an electric field to our copper wire. The electrons dash off! Well........at a speed of the order of roughly one metre per hour (in the wiki example of 1mm diameter copper wire with a current of 3 amps). Clearly this 'drift velocity' is swamped by the random motion of the electron (illustrated well here). In this case the applied field acts as the 'environment' or 'backdrop' for the charges.
       In a similar vein, income inequality forms the backdrop and environment for members of a society. The slow drift of the electrons is comparable to the increase in murder rates. While it is the individual's life and circumstances that determine whether or not they will murder, certain conditions (be they economic or otherwise) tend to make certain experiences, certain viewpoints, certain actions more likely. So to claim that high levels of income inequality affect the homicide rate is not to make a deterministic statement and the remarks "Oh I grew up in such a neighbourhood and yet I'm not a murderer!' miss the point entirely. It is simply the case that certain conditions make certain results more likely. In any case, I strongly recommend reading some papers about income inequality and homicide rates. (A very nice example can be found here).

Thursday, 11 August 2011

A Predictable Mess

Anyone who is in anyway familiar with my posts will know I tend to concentrate a lot on income inequalities in the First World and how they affect society.

In particular I have often highlighted the fact that homicide rates (a proxy for measuring total crime) are most affected by income inequality:
People would also know that the U.K. has some of the worst income inequality and social mobility levels in the developed world. I have often pointed out that social mobility in the U.K. has collapsed. In the wake of the riots I can't help but feel vindicated.

Now, a disclaimer. I am not making any comment on whether or not the rioters should or should not have rioted. I am not questioning whether or not this was the 'right' response to income inequalities or anything else. It remains criminal behaviour.

What I am saying however is that certain economic conditions result in predictable effects. In this case, income inequality and low social mobility result in an underclass which is waiting to explode. The spark in this instance was the shooting of Mark Duggan but that was by no means the gunpowder that has steadily accumulated over the past few decades.

   In this case there are two solutions to the problem. The first is increasing authoritarianism and the second is economic and social reform. Given that neoliberal policies that have dominated since the 80s and given the watchword 'austerity' it seems we will find ourselves moving towards authoritarian policies rather than reform. We have seen the same in the U.S. where incarceration rates have increased dramatically since Reagan.
  More police and tougher sentences is the easy and comfortable response, it appeases the masses and it fits nicely with Conservative thought. Already the recent cuts to the police are being reconsidered.
    In direct contrast, the cuts to the social services in these areas are being flatly ignored. There has been no talk of acutally solving these issues (Cameron's 'big society' apart). It seems the vested interests and prevailing dogma won't allow for this problem to actually be solved. Sigh.....

Tuesday, 9 August 2011

How Wealth Accumulation Can Promote Cooperation

So I can't be accused of being completely biased in all my posts, I offer this paper for consumption:

How Wealth Cooperation Can Promote Cooperation

Abstract:

"Explaining the emergence and stability of cooperation has been a central challenge in biology, economics and sociology. Unfortunately, the mechanisms known to promote it either require elaborate strategies or hold only under restrictive conditions. Here, we report the emergence, survival, and frequent domination of cooperation in a world characterized by selfishness and a strong temptation to defect, when individuals can accumulate wealth. In particular, we study games with local adaptation such as the prisoner's dilemma, to which we add heterogeneity in payoffs. In our model, agents accumulate wealth and invest some of it in their interactions. The larger the investment, the more can potentially be gained or lost, so that present gains affect future payoffs. We find that cooperation survives for a far wider range of parameters than without wealth accumulation and, even more strikingly, that it often dominates defection. This is in stark contrast to the traditional evolutionary prisoner's dilemma in particular, in which cooperation rarely survives and almost never thrives. With the inequality we introduce, on the contrary, cooperators do better than defectors, even without any strategic behavior or exogenously imposed strategies. These results have important consequences for our understanding of the type of social and economic arrangements that are optimal and efficient."

There are however some caveats I would add (in addition to those examined by the authors). The main one is the desire for relative wealth over absolute wealth. In the stock market (in particular) it is how much money one has relative to one's peers that is often the guiding force, this may increase temporary defections. It also fails to examine more complex strategies (such as Tit-For-Tat as they mention) and particularly strategies that would arise if an 'eliminating' element was added. If it were the case that competitors can be eliminated if they face a large loss. Obviously the elimination of competitors is an element in the economy and even cooperative oligopolistic arrangements don't stray away from this.


    There may also be problems relating to kabals, where cooperating groups operate at the expense of other elements of society (again oligopolies). One should also note that the gini coefficient tends to rise drastically in this set up (approaching 1) and this leads to ill-effects as examined in previous threads, including the undermining of trust that is essential to cooperative strategies.

Thoughts Blogosphere?