Deaton’s economics: fair criticism?

It is remarkable that the International Monetary Fund, one of the bastions of our modern economic construct, should be so willing to test and challenge current economic thinking. But that is what it does in publishing a striking short blog by respected economist Angus Deaton. Deaton is best known for his remarkable work on the US epidemic of what he has dubbed deaths of despair and he also led a recently-completed eponymous review of inequality for the Institute of Fiscal Studies. Deaton offers what amounts to an apologia for modern economics, and suggests some routes that may be more productive for the future. Not only might they be more productive, I would suggest that they are also likely to be fairer.

In the blog, Deaton questions mainstream economics. He does so from a remarkably mainstream position. He won the Nobel Prize in 2015, and is a professor at Princeton. His criticism of the failings of current economics, and not least of current economic education, should therefore hit home.

The core of Deaton’s points are made in crisp discussions under a handful of bullet-point headings. These are: power, philosophy and ethics, efficiency, empirical methods and humility (doesn’t our entire world need a whole lot more of that last?). He comes most crisply to his point in the first of these: “Without an analysis of power, it is hard to understand inequality or much else in modern capitalism.” But the bullet points reflect a continuity of thought, not separate ideas. He complains at the loss of ethical thought from economics and its replacement by an emphasis on efficiency and a simplifying focus on the financial: “We often equate well-being with money or consumption, missing much of what matters to people.”

Under efficiency, he states:

“Many subscribe to Lionel Robbins’ definition of economics as the allocation of scarce resources among competing ends or to the stronger version that says that economists should focus on efficiency and leave equity to others, to politicians or administrators. But the others regularly fail to materialize, so that when efficiency comes with upward redistribution—frequently though not inevitably—our recommendations become little more than a license for plunder.”

I think that quote bears rereading.

Applying these five approaches as a new lens for approaching questions, Deaton reaches a range of fresh conclusions – or rather a reduced level of certainty – about a number of different issues. These include: unions, free trade, global poverty and immigration.

But though it is not among these bullet-points, or the issues about which Deaton now has less certainty, to my mind one of the most notable single words in the piece is ‘efficacy’. Deaton says: “today we [economists] are in some disarray. We did not collectively predict the financial crisis and, worse still, we may have contributed to it through an overenthusiastic belief in the efficacy of markets, especially financial markets whose structure and implications we understood less well than we thought.” Normally economists and investors talk about market efficiency, and certainly the financial crisis was in part due to overconfidence that markets are efficient, that they will find the right prices for things. The efficient market hypothesis – which many investors take as a certainty, even though it is merely an hypothesis, and even though there would be no ability of active investors to outperform if it were true (admittedly many are more lucky than genuinely generate outperformance, but nonetheless it is still possible to outperform a market). The crisis showed that market pricing can often be very wrong and the use of market prices as a foundation for valuations can be risky.

Deaton is clearly referencing the Efficient Market Hypothesis (and the use of ‘efficiency’ as one of his bullet-point headings makes more notable his decision not to use the term in his comment about the disarray of modern economics), but he is actually making a very different point. He is asking whether markets are always efficacious, whether they work and always add value to human society. And his clear view is that they are not always, and do not always. We should listen, particularly those of us who work in financial markets.

Deaton has never minced his words, but here he is remarkably cruel about his profession. He says he does not want to get into the question of corruption among his peers, though he notes that allegations “have become common in some debates”. But he does state, bluntly: “economists, who have prospered mightily over the past half century, might fairly be accused of having a vested interest in capitalism as it currently operates”. In a blog that clearly has real concerns about the operation of modern capitalism, that fair comment is one that should hang over the profession, challenging all to rethink with the confidence and honesty that Deaton has.

Is enough enough? Addressing the problem of the super-rich

“To make the poor richer, you have to make the rich poorer.”

It’s one of the bolder early assertions made in a new book, Enough: Why it’s time to Abolish the Super-Rich, from my friend Luke Hildyard, who leads the High Pay Centre, the think tank dedicated to considerations of pay and employment rights. Given the hours he put into it, he’ll hate that I note it’s a short book, but that means it is a quick read – which its brisk and energetic style greatly assists. It includes extensive references to the evidence of academic and other studies, but Hildyard doesn’t let them weigh down his central messages and arguments.

Much of the book is dedicated to demonstrating the truth of this early assertion. Beyond that, Enough also aims to show that there would be benefits from a more equal income and wealth distribution and that much current income and wealth is unearned and undeserved. It argues that it is possible to address the issue of the super-rich, both politically and practically – but that at present the political will isn’t there and the social pressure for change isn’t yet great enough. “The super-rich are tragically unloathed,” says Hildyard in one of his typically crisp and blunt phrases.

As is perhaps obvious, this is a polemic, using vigorous and direct language to make its points – and it is none the worse for it. It’s also funny. I didn’t expect to laugh out loud at the book, but its dogged pursuit of a thought experiment of carpeting the nation in £5 notes is only one among its amusing moments.

Hildyard also charts a path for addressing the issue of the super-rich, one part of which would be wealth taxes. That particular path became potentially much easier just yesterday when a UN committee of tax experts agreed to develop a clear map for it: the Committee of Experts on International Cooperation in Tax Matters approved guidance for the creation of wealth taxes. This will not be called a ‘model law’ but rather an ‘example law’, but the intent is clear, and the idea of international cooperation in this area is aimed to reduce incentives for individuals to move to avoid such tax burdens. We’ll see how far these proposals progress in practice.

There is clearly some political will, and indeed some general willingness to engage in these issues. If the interest shown by those seeing me reading Enough on public transport are anything to go by, this is a book whose time has come. I would certainly heartily commend it. It was formally published this last week.

In many ways, vigorous and blunt as it is, Hildyard’s language is less hardline than others’. For example, the authors of the wonderful Spirit Level, Kate Pickett and Richard Wilkinson, both professors of epidemiology at York University, recently wrote a comment piece published in venerable journal Nature entitled Why the world cannot afford the rich.

As well as noting the disproportionate greenhouse gas emission impacts of the lifestyles of the wealthy (as previously noted in this blog), Wilkinson and Pickett state: “large differences in income are a powerful social stressor that is increasingly rendering societies dysfunctional”.

They continue:

“bigger gaps between rich and poor are accompanied by higher rates of homicide and imprisonment. They also correspond to more infant mortality, obesity, drug abuse and COVID-19 deaths, as well as higher rates of teenage pregnancy and lower levels of child well-being, social mobility and public trust.”

Most strikingly, the epidemiologists argue that “Even affluent people would enjoy a better quality of life if they lived in a country with a more equal distribution of wealth”. They complain about the wastefulness of unfair distributions: “Inequality also increases consumerism…Studies show that people who live in more-unequal societies spend more on status goods.” It’s certainly clear that this is happening. For example, ultra-luxury carmaker Bentley recently revealed its financial results, making revenues of €2.9 billion on sales of just 13,560 cars (or over €200,000 per vehicle), with margins improved by a record of nearly 10,000 of those vehicles including personalised features costing upwards of €40,000. For these buyers, it appears, it’s not enough to be able to buy a car that costs more than many houses. They also want the additional status of a still more expensive and truly unique vehicle.

The wealthy also buy other trappings of status – like the arts building branding that was part of the focus of the Sackler family in deploying their immoral earnings from Purdue Pharma’s role in the opioid crisis, or political donations. Evidence shows that rarely are such gifts really generosity – something is expected in return (as the reliably brilliant Tom Burgis amply shows in his excoriating new book Cuckooland). Sadly, rarely do the super-rich now feel the need to be genuinely generous in sharing their wealth in the ways their predecessors in earlier generations did. Alms houses are among our most beautiful old buildings, mostly built by our wealthy Tudor or Victorian forbears, but there seems to be no modern equivalent being created now.

This urge towards status skews our whole business sector. When you now look at the market capitalisations of major businesses, it is notable how much more valuable are the luxury goods companies that cater to the demands of a tiny minority than those that provide much larger markets with less luxurious versions of the same products. Germany’s Porsche is valued at more than $90 billion and Italy’s Ferrari (actually listed in the Netherlands to benefit from rules allowing unequal voting rights) is touching a valuation of nearly $80 billion; Ford and General Motors hover around the $50 billion mark, while producing orders of magnitude more vehicles. In a similar way, the valuation of Hermes (around $270 billion) is nearly double that of Inditex, whose major brand is Zara (valued at some $150 billion). The mass market isn’t where the money is made any more: even collectively, the centre doesn’t hold as much spending power.

Pickett and Wilkinson capture their findings in a striking chart that sets the Gini coefficient measure of inequality against an index the authors created of environmental, health and social issues (including measures such as air pollution and recycling; infant mortality, life expectancy, and obesity; and educational attainment, teenage births, social mobility and trust). As they say, “There’s a clear trend, with more-unequal societies having worse scores”:

As an earlier editorial in Nature raged, Reducing inequality benefits everyone — so why isn’t it happening? Essentially, that’s the challenge that Hildyard is attempting to rise to, and he provides some useful answers, and relevant solutions, as well as amusing challenge to the status quo. Do we need to make the rich poorer in order to make the poor richer? Probably, yes. The greatest political challenge on this issue though is likely to be defining what amounts to ‘rich’ or ‘super-rich’ for these purposes. One hindrance to action may be that definitions of what is too much are hard to draw. It’s hard to build a coalition of the willing among those who fear they may be next to face reductions (even if intellectually they might accept the idea that they would benefit from less inequality), and that – for the present at least – seems to limit the political pressure for change.

Hildyard himself blurs these lines, at times railing only and specifically at the truly (absurdly) super-rich, the billionaires, and at other times focusing on broader wealthy groups, including all public company bosses, top lawyers and bankers, and anyone earning in the top 1%, or having wealth among the top 1%. He quotes income of £183,000 and wealth of £3.7 million for the UK, and $400,000 and $11 million respectively for the US, as placing people into the respective 1% groups. These are huge numbers, clearly, but not close to being in the same league as the billionaires. A focus on a loosely defined super-rich elides this challenge – and while Hildyard demonstrates just how much might be available from the individuals at the very top of the income and wealth distributions, were they taxed more effectively (a simple function of their extreme wealth), he leaves open the question of seeing changes lower down the income levels too. This doesn’t undermine his arguments, but clarity is likely to be helpful in garnering political support and leveraging real change.

Hildyard ends the book saying:

“Indeed, it will be impossible to achieve our full potential to build a fairer, happier, more prosperous society without a major rebalancing of incomes and wealth. This ought not to be a question of partisan ideology – the logic, feasibility and urgent importance of the issue are clear. It is time to abolish the super-rich.”

I’d argue that all of this but the final sentence is unarguably true – that last sentence probably remains open to some debate, not least as to where the threshold for super-richness lies.

As the phrase goes, the poor are always with us. It is less clear that the super-rich need to be.

The centre cannot hold

As ever, I am pleased to confirm that the Sense of Fairness blog is a purely personal endeavour.

Enough: Why it’s time to Abolish the Super-Rich, Luke Hildyard, Pluto Press, 2024

Subcommittee on Wealth and Solidarity Taxes Guidance as of 1 March 2024, UN Committee of Experts on International Cooperation in Tax Matters

Why the world cannot afford the rich, Richard Wilkinson, Kate Pickett, Nature 627, 268-270, 12 March 2024

The Spirit Level: Why Equality is Better for Everyone, Kate Pickett, Richard Wilkinson, Penguin, 2010

Highest Levels of Personalisation Drive Second Best Financial Performance on Record for Bentley Motors, Bentley, 19 March 2024

Cuckooland: Where the Rich own the Truth, Tom Burgis, HarperCollins, 2024

Reducing inequality benefits everyone — so why isn’t it happening?, Nature 620, 468, 16 August 2023

Unfairness fuels conflict: fraying threads

Perceived unfair treatment is a driver not just of resentment but of outright conflict. Unfairness destabilises our world.

That’s the clear conclusion of some recent research by an IMF economist and a professor at Rice University in Houston in the US. Their focus is sub-Saharan Africa, a region with disproportionate levels of conflict and human suffering, whose violence fuels emigration and so more instability elsewhere. But it seems sure that while there unfairness fuels outright military conflict, the logic must be that in other parts of the world unfairness will drive unrest and discontent in different forms. The researchers refer to “conflict-inducing alienation”. That alienation can be seen in many countries of the world, not just sub-Saharan Africa.

But sticking first with their area of focus, the blog that accompanies the launch of the paper summarises the researchers’ findings:

“While various factors can fuel conflict, our research shows that discontent with state institutions among marginalized groups is a key driver of unrest in the region. Such distrust reflects perceptions that governments fail to address equity issues and inclusive growth—including the fair allocation of natural resources and human capital development… Poverty and underdevelopment alone may not fuel conflict. But those underlying factors are exacerbated by the experience or perception of social and economic exclusion, thus providing a fertile breeding ground for armed groups, necessitating urgent intervention.”

These countries in sub-Saharan Africa are of course among the first to experience the most brutal impacts of climate change, and this exacerbates the experiences of those at the edges of society. “Climatic fluctuations and food insecurity have been particularly acute in this subregion,” the paper reads. “Forecasts for 2023 indicate that nearly 142 million individuals in the region will confront acute food insecurity.” It should not be a surprise that “Food insecurity contributes negatively to trust in government.” Also unsurprisingly, the desperation that arises from this hunger drives individual actions, especially among those who have lost trust in governments. It must of course be noted that much of the poverty in the region is a legacy of colonialism.

The consequences of this are stark. Essentially, there is a close correlation between the sense of exclusion and unfairness and the fragility of nation states and their susceptibility to conflicts of various forms. This chart from the paper illustrates the finding well:

The researchers conclude:

“Our findings show that the crisis of confidence experienced by marginalized groups towards state institutions is the primary driver of conflict. This crisis of confidence originates from the perceived failure of state institutions to safeguard interests, ensure justice, promote human capital development equitably, oversee fair allocation of natural resources, and encourage inclusive economic growth. Such institutional failures, contributing to perceptions of social and economic exclusion, invite conflict as they undermine the principles of fairness and inclusivity vital for sustainable development.”

These findings emphasise the importance of the Rule of Law in fostering trust in government and so in building the foundations for economic growth and investment. And there is a clear need to foster the basic expectations of a cohesive society in order to lean against these perceived unfairnesses: “These results suggest strongly that governments in the Sahel G5 as well as sub-Saharan Africa more broadly should focus their efforts on improving the quality of their institutions (reduce corruption and improve law and order) and provision of public goods (healthcare, education, air and water quality, food and shelter sufficiency) rather than focus primarily on macroeconomic variables such as the levels of economic growth and unemployment.”

The sense of being forgotten and left behind by government and wider society is greater for those at the geographic edges: “conflict is often concentrated near national borders where there tend to be more limited or insufficient public services, fostering feelings of exclusion”. Many of those national borders were drawn with the arbitrary straight lines of empire.

That sense of living at the periphery, having been forgotten by government and wider society, is of course not unique to people in the countries of sub-Saharan Africa. Many in all the countries of the world now feel left behind and peripheral. In sub-Saharan Africa these frustrations appear to be reflected in outright conflict but in other parts of the world the same sense of abandonment has inevitable, if different, consequences. The consequential violence can fuel crime, it can drive social division and anger in and with politics, but these are just other forms of the violence and dislocation that comes from people feeling that society no longer operates fairly to protect their interests.

Perceptions of fairness seem to be vital to hold states and their people together in peaceful coexistence.

Operating on purpose – hampered by inequality

Inequality is getting in the way of delivering value through corporate purpose statements. It’s an unusual form of inequality – inequality of inspiration, perhaps due to cynicism that arises from unfair treatment of the workforce.

The debate on the value of company purpose statements goes on. Fans of the approach believe it offers companies a route to providing a clear message to their investors and to their workforce about what the company stands for and is seeking to deliver, serving as a rallying point to shape their interactions. For those unpersuaded, corporate purpose looks like more of a fad, a set of at-best fine words that make no difference to how the company has always operated.

Such cynicism is perhaps encouraged by the poor quality of so many corporate purposes. One thing I am repeatedly struck by when reading the shortlisted annual reports of companies considered for the IR Society awards is that even at these companies with apparently exemplary reporting, several have weak or meaningless purposes. Many are so abstract as to be empty fluff while others are strikingly mundane or focus on financials. Few actually strike the right balance of providing a rallying point for shareholders and employees and assisting their decision-making, including notably assisting decisions about what the company, and individual employees, should not do. These are central elements of what an effective purpose should be.

Recent analysis suggests that this failure to inspire employees may mean corporate purpose fails to deliver on its potential.

The debates on purpose were opened up again at a conference late last year entitled Modern Capitalism and Corporate Purpose, hosted by Copenhagen Business School and organised alongside the ever-excellent European Corporate Governance Institute (ECGI). ECGI recently published a user-friendly summary ably written by my friend George Dallas. One of the key speakers at the conference was Claudine Gartenberg, assistant professor of management at the University of Pennsylvania’s much admired Wharton School. Dallas reports her being still more dismissive than I am about many existing corporate purpose statements, calling them both “twaddle” and “word salads of nothing”.

Gartenberg discussed the key results of a recent study into purpose at both public and private companies. This found that employees of public companies have a lower sense of purpose than those of private companies, and the difference is driven by more junior employees (ie middle managers, professional salaried staff and hourly workers rather than those at the executive level). And, as the chart shows, this situation of what she calls ‘purpose inequality’ is reflected in a rapid deterioration in the sense of purpose as you go down the seniority grades in these organisations:

In an earlier paper, Corporate Purpose and Financial Performance, Gartenberg showed that it is clarity of purpose in the middle ranks of an organisation that can lead to company outperformance. That has to make sense: clarity of purpose can assist with board decision-making (perhaps particularly about activities that the company as a whole should not be doing), but really the value of purpose lies in its providing inspirational rallying power for employees, and helping them in their day-to-day decision-making. Where corporate purpose statements fail to inspire employees they will not convince others and will be only so much ‘twaddle’.

The fact that the evidence on purpose inequality indicates that there is not just a step-change in faith in corporate purpose below the executive level, but a steady deterioration as the study considered more junior members of the workforce, is suggestive that in part staff consider their own treatment when thinking about the corporate purpose. A company that isn’t fair to its own workers isn’t likely to inspire them to believe that it is animated in all its actions by a higher purpose – meaning that it is much less likely to achieve its purposeful aims.

A similar finding in a different industry with different ownership structures strongly suggests that this finding of detrimental effects from limited faith among the broader workforce in purported purposes can be seen as potentially broadly generalisable. This evidence is from the legal profession, and comes from work by LexSolutions and the Law Firm Maturity Index. This shows a sharp disconnect between the faith in a law firm’s stated purpose as seen through the eyes of its leadership (partners, directors or board members) and of its broader staff base (professional lawyers below partner level, generally referred to as associates) – and an apparent correlation between this and these individuals’ sense of wellbeing.

As their article on these findings indicates:

“This suggests a causal connection between the reality of a firm’s purpose and the health of its people…Low levels of wellbeing that arise from primarily pursuing a financial purpose may eventually lead to burnout or staff turnover.” [my emphasis]

Gartenberg’s evidence regarding the differences in employee attitudes in private companies in comparison with public ones (and ones with high levels of private equity ownership) is also telling. It suggests that generally employees are less persuaded that purpose is meaningful in the latter organisations, perhaps as they suspect that the profit motive will always be allowed to override all other considerations. Thomas Thune Andersen, chair of Denmark’s energy business Orsted, which has transitioned into renewables, who also spoke at the conference, tended to agree with this. He clearly felt that the support of the government as a majority shareholder had enabled Orsted to deliver on its purpose. Andersen was cynical about the short-termism of mainstream institutional investors.

If owners tend to be driven by things other than corporate purpose, and are not keen to encourage companies to establish purposes and be driven by them, then it is not surprising that the workforce will doubt the sincerity with which the company operates. Of course there are many investors that do have some confidence in the power of purpose and its value for long-term shareholders as well as stakeholders. But it seems that their voices are overwhelmed by a broader market of institutions that are less convinced – at least in the US, where Gartenberg’s work was carried out.

Purpose won’t deliver on its potential positive effects unless it is believed in by those within the company. But purpose inequality won’t be overcome by fiat, but persuasion, and demonstration in practice. In order to deliver, corporate purposes need not only to be better written and more meaningful statements of intent, but that intent needs to be followed through by boards and management in their treatment of staff, and also supported by investors in the business. Failures to deliver on either or both of these elements may serve to explain why there isn’t stronger evidence of the value of corporate purpose.

That redoubles the challenge for boards: live the purpose, demonstrably to your workforce, and reinforce it to your investors too. As I’ve suggested in previous blogs on this topic, there is an opportunity for companies through their actions to influence their shareholder base, discourage those shorter-term voices and encourage the longer-term institutions that will provide more reliable and consistent support. Boards should rise to that challenge, minimise purpose inequality and awaken the opportunities offered by meaningful corporate purposes.

Summary Report: Modern Capitalism & Corporate Purpose, ECGI, December 2023

Corporate Purpose in Public and Private Firms, Claudine Gartenberg, George Serafeim, Management Science Vol 69 No 9, September 2023

Corporate Purpose and Financial Performance, Claudine Gartenberg, Andrea Prat, George Serafeim, Organization Science Vol 30 No 1, January 2019

LexSolutions

Lessons from the Law Firm Maturity Index, Manu Kanwar, Stuart Woollard, Legal Business World, No 1, 2024

Fair, free and equal?

How can we move to a fairer society? First, we must imagine it, argues a new book. And the best starting point for such imagination, it suggests, is the philosophy of John Rawls. The new book is Free and Equal by Daniel Chandler, an economist and philosopher at the London School of Economics.

The book is well worth reading. Its subtitle is the ambitious What would a fair society look like? The ambition is clear, and bracing – though it’s less clear that its relatively conservative prescriptions live up to it.

Chandler sets out a great and concentrated version of his arguments in the first 25 minutes of a discussion hosted by the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA for short). Fundamentally, his aim is to bring back into active discussion the Rawlsian version of fairness. This vision was based in Rawls’s thought experiment of designing a society when one’s position in it was hidden behind a veil of ignorance. Rawls argued that such a society would be shaped by two basic principles of justice, the first protecting basic liberties and the second coming in two parts, fair equality of opportunity and the difference principle, which allows inequality to the extent it operates to benefit even the least well off in society. Chandler also points to a relatively neglected (frankly, by Rawls as well as others) third principle, the sustainability principle, which focuses on the need for intergenerational fairness.

Needless to say, a Rawlsian fair society would look very different from the one in which we live now. A fair society would require all of us to participate in it equally – with the participation as important as the equality.

Chandler puzzles why Rawls’s thinking has not previously shaped much political thinking, and suggests this is largely down to the shyness and lack of political engagement of the man himself. Maybe, but to me some of Rawls’s work seems to read as a slightly self-satisfied justification of the societal success of the US liberal property-owning democracy of the 1950s and 1960s, in which his thinking was developed – and it seems ignorant of the possibility that some parts of society (notably black people and women) might not have been well-served over that time. Certainly, Rawlsian thinking seemed to be swept aside as Chandler notes by the Reaganite and Thatcherite revolution of the 1980s.

That Thatcherite revolution and its ongoing echoes certainly leave scope for a more radical reading of Rawls, and for its use as a basis for the foundations of a reshaped political approach – and a reshaped society. Whether Free and Equal fully delivers on that is debatable. Many of its prescriptions are ones with much common currency; as Ryan Shorthouse, executive chair of conservative thinktank Bright Blue, indicated in an excellent recent webinar hosted by the Fairness Foundation and KCL’s Policy Institute:

“I thought that at times maybe the policy recommendations, some of them, were a little conventional…sometimes I felt that the policies didn’t necessarily match the radical, lofty vision that Daniel set out to change society”

Chandler is at his most radical in considering political matters. He argues for proportional representation and the replacement of the House of Lords – fairly unsurprising prescriptions for those seeking equal treatment of people in politics. But he also argues for the removal of the excess influence of wealth on politics, by barring larger donations and substituting a voucher system (he likes vouchers!) whereby every individual has a limited sum per year or per electoral cycle to award to the party of their choice. He’s right that the desire of parties to earn people’s vouchers might have the desirable knock-on consequence of reinvigorating political discourse and engagement at the grass-roots.

He makes less radical suggestions on promoting equality of opportunity. These largely revolve around better educational provision throughout the educational lifecycle, and a removal of the advantages enjoyed by fee-paying schools, as well as barriers that arise through the cost of further education. Chandler also argues in favour of positive discrimination to lean against the persistence of racial and gender inequalities.

His radicalism is moderate in his discussion of shared prosperity. He presses for a universal basic income, a concept so much talked about it is sometimes easy to forget how dramatic are the differences that it might bring. He calls for in effect a universal basic inheritance – though at levels that seem a distance away from ‘basic’. He argues that higher taxation, especially on wealth, is likely to be less damaging than sometimes claimed. And he presses for greater workforce democracy, largely in terms of promoting a worker cooperative model and by a general adoption of the German co-determination model (which for no readily apparent reason he insists on calling co-management). According to Shorthouse, such democratising of business structures may be a way to appeal to politicians of both the right and the left.

In a sense though, this focus on democratising business ignores the extent to which public companies are already owned by the workforce, in the form of pension schemes. That ownership is mediated through investment institutions, but as pension schemes and other institutions feel obliged to communicate to individual beneficiaries more effectively, and in particular are more transparent about their actions as stewards of the companies in which they invest, the barriers to individuals’ understanding of their influence as owners are being eroded. Where that may take the societal understanding of capitalism – and the areas of stewardship on which investors focus – remains to be seen.

It is this area of grass-roots and genuinely broad-based engagement in society that is at its core the most radical opportunity which a Rawlsian world offers to us all. Chandler hints at it in various ways, but more work is needed to understand what it might mean and how it might best be awakened.

Colin Bradley, philosopher and legal scholar with links to both Princeton and New York University School of Law, considers the social and collaborative aspects of Rawls’s thinking in an interesting recent essay: “For Rawls, liberalism revolves around two ideals: society as a fair system of cooperation, and people as free, equal, capable of acts of joy, kindness and creativity; and disposed – if not always without reluctance – to cooperate with one another to flourish.”

Sometimes, writes Bradley:

“‘society’ simply feels like something we are ‘caught in’ rather than something we are making and sustaining together, Rawls wrote in Political Liberalism (1993)”

To adapt a phrase Andy Haldane quoted about democracy at the RSA event, we need to act like producers of society, not consumers of it. Certainly, we need not to feel caught by it, but part-creators of it. If we are to make it fair – and also free and equal – we need to work to produce that end, not simply expect it to be presented to us. Rawls, as Chandler points out, provides us with an intellectual framework for considering policy prescriptions to help us in these positive directions. We may need to move beyond conventional solutions to deliver that fairness.

LIVe debates on fairness

Two rival bodies battle each other, both using the language of fairness, each complaining that the other is failing to deliver fair opportunities for participants.

This is the world of golf, now it has been turned on its head by the arrival of Saudi Arabian money in the form of the LIV Golf tour. To an outsider, it seems the least likely sport to be discussing level playing fields, but that is what is happening – at least in a metaphorical sense.

The verdant greens of golf courses are amongst the oddest sights in dry and sandy Middle Eastern nations, but that hasn’t hindered Saudi willingness to spend millions in petrodollars on the elite end of the sport. The nation’s LIV Golf has offered huge sums to a small handful of professional golfers to create a new tour with a team competition built in. Just 48 men – who also received millions in joining fees – compete over a $4 million prize pot at each tournament. A number have been very happy to take the money; others have declined, citing both concerns about the human rights record of Saudi Arabia and the importance of existing competitions.

Money has always played a significant role in elite golf. The mythology of the Open championship is all the greater for the fact that it offers a rare opportunity for a few amateurs (chosen through qualifying competitions) to compete with the pros; successful amateurs – such as Justin Rose, 4^th in the 1998 competition – typically instantly become professionals. The Ryder Cup, the biannual rivalry between the US and Europe, is frequently riven by complaints that the teams are not paid for the privilege of playing – complaints we were reminded of at this year’s contest by the apparent hat-free protest by Patrick Cantlay. Europe’s thrashing of the US team this year did not appear to be hampered by the absence of three senior European players who had accepted LIV Tour places, Sergio Garcia, Lee Westwood and Ian Poulter.

But the creation of the LIV Tour, and the advent of its millions of Saudi petrodollars, has supercharged the money available and the distortions that it brings. This is of course just another way in which Saudi Arabia and the Gulf States have parlayed their oil wealth into sporting activity, which ranges from the purchase of various European football clubs, Qatar’s hosting of the men’s football World Cup in 2022 and Saudi’s bid for the 2034 tournament, adoption of athletes from other countries and hosting of tournaments in cricket and tennis among many others. There seems some irony that the European golf tour, which is battling the impact of the LIV Tour, is now named after its major sponsor, UAE logistics company DP World.

Many talk about Middle East money flooding into sport as sportswashing – enhancing cloudy reputations through association. Certainly, a number of the countries do have cloudy reputations, arising from issues such as poor treatment of women and LBGTQ people, the wide use of the death penalty, and specific incidents such as the assassination of journalist Jamal Khashoggi. Looked at through another lens, it can be seen as part of wider moves to rapidly diversify economies away from their reliance on fossil fuel revenues, using the current economic power that oil wealth provides to occupy significant areas of the future economy that will exist in a less carbon-intensive world.

Whatever the drivers for its creation, the row about whether participants in the LIV Tour can still be considered for Official World Golf Rankings, as published by the eponymous organisation (abbreviated as OWGR), is all about fairness, apparently.

In October, OWGR rejected LIV Golf’s application to be an eligible tour. Its formal response (letterhead pictured above) started with the positives: “While the Board Committee’s decision is based on the cumulative weight of the deficiencies, after a thorough review and consultation with the Technical Committee, the Board Committee has determined that certain of the concerns regarding the format of how each LIV event is played can likely be fairly managed through an appropriate mathematical formula.” These elements that could be managed through an adjustment mechanism included the size of field, number of holes played, and absence of a cut. But the core of the conclusion was that two elements could not be adjusted away. These are that player turnover will be constrained, and that there will be a team competition alongside the individual one, which may cloud views of individual performance.

The first appears to be the greater concern. It is certainly covered in more depth in the letter. The simple point is that there is limited relegation from the LIV tour and so limited fresh access for others. As most recently disclosed, 14 players would be retained regardless of performance (there’s a niggle about the slowness to reveal this, and earlier indications that the number would be much smaller, but this isn’t the heart of the issue), and “as few as 4 new players” would be allowed to join, with LIV management potentially choosing others (presumably not wholly on performance merit). The OWGR view on this is clear: “the Board Committee has determined that the current structure is not consistent with the underlying principles of fairness and meritocracy on which the OWGR system is based”.

It goes further: “Simply put, the Board Committee does not believe it is equitable to thousands of players who strive every day to get starts in OWGR Eligible Tournaments to have a tour operate in this mostly-closed fashion where it is not possible to fairly assess what it means to win a LIV event relative to other tournaments around the world.”

The conclusion is very simple: “under our current Handbook, the Board Committee has not found what it believes is a fair and equitable way to assess the performance of players at LIV events relative to players playing on OWGR Eligible Tours”. As an aside, it’s not clear that this Handbook is a document available to the public.

LIV Golf’s response also uses the language of fairness: “A ranking which fails to fairly represent all participants, irrespective of where in the world they play golf, robs fans, players and all of golf’s stakeholders of the objective basis underpinning any accurate recognition of the world’s best player performances.”

For them, the fight isn’t over: “LIV will continue to strive to level set the market so fans, broadcasters, and sponsors have the assurance of an independent and objective ranking system and the pure enjoyment of watching the best golf in the world.”

Among the individual players quoted in a follow-up press release from LIV a couple of days later, American Dustin Johnson said: “I feel like you can’t really use the world ranking system anymore…Hard to use the world ranking system if you’re excluding 48 guys that are good players. The rankings are skewed.”

Frankly, it feels odd to be lectured on unfairness and skewed incentives by a man whose career earnings are believed to top $140 million. Especially as this doesn’t seem to include the reported $125 million he was paid to sign up for the LIV Golf tour in 2022. The main desire of the LIV Golfers appears to be that they should still be eligible to play at golf’s four ‘major’ tournaments, the sport’s most prestigious – and lucrative – events.

The typical justification for the extraordinary amounts that sports stars can earn is that this is a genuine meritocracy where only the best rise to the top, and they must remain at the peak of their skills in order to stay there. This meritocratic system relies on players’ performances being visible to the viewing public from week to week and month to month, so that players can be regularly compared with one another and the underperformers will be winnowed out. Those who remain and succeed must be worthy of the money they are paid (at least, that’s how the justification goes – it doesn’t always work that way). The core of OWGR’s argument is that the LIV model has undermined this: by selecting a small group of players and strictly limiting the access of others to join them, while the performance is visible, it cannot readily be compared externally – and underperformance doesn’t lead to a winnowing out (the weakest performer in each LIV tournament apparently is paid $120,000 a go, and as the OWGR decision makes clear many individuals will be retained in the LIV Tour regardless of performance).

Not only is the LIV Tour distorting the marketplace with its extraordinary payments, it is distorting what purports to be a meritocratic system. It feels very wrong that those who have made or taken huge payments that distort meritocracy now purport to lecture the world on fairness. Of course, it may be that LIV will yet triumph – negotiations continue between the rival golf tours and it seems likely that more money will be deployed to enable some deal to be done – but at present OWGR’s arguments about fairness seem much the stronger.

Thanks to my friend Ben for nudging me to write about this.

OWGR denies LIV Golf’s Application for Eligible Tour Status, OWGR, October 10 2023

Statement from LIV Golf on today’s Official World Golf Ranking Decision, LIV Golf, 10 October 2023

LIV Golf players react to OWGR Decision, LIV Golf, 12 October 2023

Golf career earnings

What do LIV Golfers get paid?, Golf Monthly, February 10 2023

Fairness in research: the San Code

I rather expected to find at least one fairness blogpost inspired by a recent trip to South Africa, famously the most unequal country in the world, with a Gini index of 63 according to the World Bank. It is such a beautiful nation with such stunning natural resources that it isn’t surprising it was here that humankind first flourished to the extent that it was able to create art and culture for the first time. Despite its challenges, it is impossible not to be filled with hope when one experiences the beauty of the country and the energy of its people.

As it happened, the inspiration came from a visit to award-winning heritage centre !Khwa ttu, which talks about itself as the ‘embassy’ of the San of Southern Africa (a visit is strongly recommended for the wonderful spirit of the place, for the museum, and also for the restaurant – and indeed for the courtyard delightfully filled with the nests, noise and display performances of weaver birds). The San are one of the indigenous peoples of Southern Africa, and have long been subject to scientific study because their hunter-gatherer traditions are seen by many as a window on humankind’s ancient past.

It turns out that I have written about at least some of the San people previously. The Ju|’hoansi, the Namibian tribe where successful hunters are teased so as to maintain social cohesion, are one of the larger remaining San communities, some 16,000 among the 111,000 total*. All the San were horribly mistreated in the colonial era and continue to face the ongoing consequences of mistreatment.

*San rock paintings, whose beauty and delicacy are particularly remarkable given their estimated 2000-year age*

A portion of !Khwa ttu is given over to the San Code of Research Ethics, a notable 2017 document written in response to historic and regular exploitation of the San by some of the scientific researchers that they encountered. It has a number of key segments, notably Justice and Fairness – but the Code overall provides strong evidence of much unfair treatment in the past. It had a lengthy 25-year gestation period as the San built the institutional capacity to hold researchers more effectively to account. There is an aspiration that the Code can be a model for other communities to enable them to short-circuit the 25-year process and thereby gain fairer treatment from any researchers they face.

The Code includes some expectations that seem deceptively limited but reveal the extent of the mistreatment of the San people in the past. Most stark amongst them are the following disheartening examples in the Respect portion of the Code:

“Respect requires that promises made by researchers need to be met.”
“Respectful researchers engage with us in advance of carrying out research.”
“Failure by researchers to meet their promises to provide feedback is an example of disrespect which is encountered frequently.”

And the opening of the Honesty portion is especially striking:

“We require honesty from all those who come to us with research proposals.”

A core section of the Code is Justice and Fairness, which also begins with a fundamentally simple expectation: “We require justice and fairness in research.” The last portion of this section is among the most powerful:

“We have encountered lack of justice and fairness in many instances in the past. These include theft of San traditional knowledge by researchers. At the same time, many companies in South Africa and globally are benefitting from our traditional knowledge in sales of indigenous plant varieties without benefit sharing agreements, proving the need for further compliance measures to ensure fairness.”t’s sad that such basic aspects of fairness need to be expressed, particularly in a document that’s seen as an innovative model for others to follow

It’s sad that such basic aspects of fairness need to be articulated, particularly in a document that’s seen as an innovative model for others to follow.

The San make a reciprocal promise: “The San commit to engaging fairly with researchers and manage effectively all stages of the research process, as their resources allow.”

Fairness, and reciprocal fairness, seems very little to ask, but it has transparently not been delivered in the past. It is but one of the unfairnesses that the San have suffered over the years. They deserve more, and our understanding of humankind’s past will be all the better for respecting the Code that expects it. The Ju|’hoansi, and all the San, still have much to teach us.

* Note: having the benefit of my visit to !Khwa ttu I now know that I previously mis-spelled the Ju|’hoansi’s name – for which apologies. When I gave the talk on which that prior blogpost was based I also apologised for the quality of my clicks. I now know that the | represents a dental click, created by placing the tip of the tongue on the back of the front teeth and pulling the tongue back sharply. The ‘ indicates that the speaker should pause briefly. I’m learning.

World Bank Gini index data

!Khwa ttu

The San Code of Research Ethics, South African San Institute, 2017

The San Code of Research Ethics: Its Origins and History, South African San Institute, 2019

Unfair finance and a pyramid of lies

Lex Greensill’s promise with his eponymous supply chain finance business was to readdress the balance between suppliers and their customers – customers which are often much larger and set terms that are markedly favourable to themselves. As set out in chapter 20 of the excellent and highly recommended book Pyramid of Lies on Greensill and how his business collapsed into scandal under the weight of undelivered promises, that’s not how it turned out.

Instead, author Duncan Mavin argues, Greensill made finance less fair.

In the chapter, Mavin’s main evidence for arguing the unfairness of supply chain finance is the excellent work by the Australian Small Business and Family Enterprise Ombudsman (painfully abbreviated as ASBFEO). Its 2017 Payment Times and Practices Inquiry Final Report noted the country’s poor treatment of small suppliers – as the chart below suggests, Australia was a particular outlier but far from alone in seeing larger businesses taking advantage of their supply chains. Most of ASBFEO’s recommendations in that final report were addressed to the Australian government – urging among other things that the government offer 15-day payment terms as standard, and require its own head contractors to offer the same terms also (which seems sound, and fair, advice to other governments). Its recommendations to industry more generally led to the creation of the voluntary Australian Supplier Payment Code. This was launched in 2017 and has been reviewed since, the latest version dating to 2021.

The core requirement of the voluntary Code is that Australian suppliers should be paid within 30 days. But the ASBFEO in its March 2020 Supply Chain Finance Review Final Report highlights that supply chain finance schemes, including those provided by Greensill, enabled this basic standard to be evaded and suppliers in effect to be obliged to accept different terms even while signatories could claim adherence to the Code. The Ombudsman called for greater transparency, in particular for any requirement to use supply chain finance, and for greater regulatory attention on supply chain finance, both its potential to exploit data on suppliers and the possible regulation of the form of finance overall.

The report specifically references promises that Greensill made as a response to the ASBFEO’s work on supply chain finance. It states: “Greensill Capital have announced that they will not allow their product to be used by large businesses that push out payment terms to SME suppliers beyond 30 days,” as well as quoting Lex Greensill himself referring to this sort of activity by large companies to be “bullying” of their smaller suppliers.

Bullying of the supply chain is clearly not admirable or fair behaviour. It isn’t likely to be sustainable in the long-term as suppliers are likely to seek customers that offer less on-sided relationships – or may risk themselves not being sustainable in the long-run. But sadly it appears to be prevalent, not only in Australia.

In addition, among the evidence to the ASBFEO in its review is further confirmation of what I have previously called the economic madness of the whole supply chain finance offering. Local provider TIM Finance in its letter in response to the review, states:

“[Supply chain finance], when implemented and used properly, provides huge benefits to Suppliers as they are sourcing funding (by being paid early) by taking advantage of the cost of funds based on the Buyers [sic] credit rating. The annualised discounts that a Supplier ‘endures’ by accepting early payment needs to be equal to or less than the cost of funds of that Suppliers [sic] sourcing a funding facility (business loan) themselves from a bank or non-bank lender.”

This confirms the simple point that supply chain finance relies on the lower pricing of finance on offer to the large company that is the customer – the ‘cost of funds based on the buyers’ credit rating’ – in comparison to that available to the supplier. The supply chain finance provider takes its profit margin out of that differential. As well as being fairer, the cheaper route for the system overall would be for the financing of the supply chain to come predominantly from the customer, taking advantage of its lower cost of finance, without a further intermediary taking a margin from it. If customers didn’t stretch the payment terms required of their suppliers, then there would be less cost in the system overall.

The removal of Greensill Capital from the market – and the disgrace in which it has exited – may have brought this sort of offering into some further disrepute, which the Australian Small Business and Family Enterprise Ombudsman would suggest is wholly deserved. The new accounting standard requiring further disclosures may also reduce some of the perceived advantages for this sort of financing. The evidence is that this would be less economically wasteful, as well as representing fairer finance.

Fairness barriers to global climate deals

The Amazon is a remarkable space, both for its beauty and biodiversity and for the global service it performs as the lungs of the world. If it were not subject to mass deforestation it would be a substantial carbon sink in a world desperately in need of places to swallow our rising levels of carbon dioxide.

We’ve seen two pieces of news about the Amazon in recent weeks, neither of them told with complete accuracy. First was the news about a decrease in deforestation in Brazil, which was celebrated by many. Of course, it is a positive sign that the new political regime under President Luiz Inacio Lula da Silva can reduce the most negative impacts of his predecessor’s free rein populism, but deforestation continues; it is just that its speed has reduced. We are some way away from the true reversal of the damage done to the Amazon under President Bolsonaro. Fears persist that the Amazon may be reaching a point of no return and this news leaves the rainforest heading in the wrong direction.

The second piece of news was the Belem Declaration, an agreement between the 8 countries that contain the Amazon region within their territories, signed on August 9th. We were told that this was a failure because it did not contain what President Lula apparently hoped for: an international deal to end Amazon deforestation by 2030. The Declaration is nonetheless a notable achievement (any agreement between 8 different countries with very different politics is notable), containing no fewer than 113 objectives and principles. It is also a document that teaches us a great deal about where we are in terms of the geopolitics of climate.

A lack of fairness is central to what hinders us in reaching international deals to constrain future carbon emissions and boost the health of carbon sinks. The Belem Declaration makes clear that any global climate deal needs to think deeply about how to embed fairness. We’re heading towards COP-28 in Dubai. I don’t personally have great hopes that a good deal will be struck there, because the world’s leaders don’t yet seem to have learned this lesson about fairness. I do hope to be proved wrong.

Fairness is explicitly central to the Belem Declaration. The document starts:

“Aware of the urgency of the challenge of the full protection of the Amazon, the fight against poverty and inequalities in the Amazon and the promotion of sustainable, harmonious, integral and inclusive development in the region”*

The language of fairness recurs throughout the preamble, including for example in a section about the importance of women’s rights and perspectives: “Recognising that women and girls are disproportionately affected by the adverse impacts of climate change and environmental degradation, and that their participation in decision-making is critical to sustainable development, the promotion of peaceful, fair and inclusive societies and the eradication of poverty, in all its forms and dimensions.”

President Lula’s reported 2030 ambition for ending deforestation is in fact visible in the Declaration, stated as an ‘ideal’ of zero deforestation by that date. The Declaration also mentions the aim of eradicating and stopping the advance of illegal logging. However, it isn’t hard to read between the lines to see why that simple ambition wasn’t formally agreed at the summit: throughout the document it talks about the need to balance the interests of local populations, particularly indigenous people, and the need for sustainable economic development for the people of these developing economies. The Declaration seems to talk less about the need to protect the rainforest for the benefit of indigenous peoples, and more about how those indigenous peoples can fairly enjoy some economic development, acknowledging that this needs be sustainable development. The fact that 2030 is also the timeline for delivering the UN Sustainable Development Goals seems implicit in the thinking about Lula’s deforestation ambition.

The call for fairness in sharing of resources, and the scope for less developed economies to enjoy development notwithstanding the climate challenge, is especially clear in the Climate Change section of the Declaration. This includes a number of very specific asks of wealthy nations, including paragraph 35 which urges developed economies to bring forward their financing, especially the promised $100 billion a year for developing economies to support their delivery of climate actions. Similarly, paragraph 36 calls for innovative financing for climate actions, including potentially the exchange of debts in return for climate actions.

For many of us, it remains a frustration that politicians continue to emphasise the costs of the climate transition without any apparent attention to its economic opportunities (let alone the costs of inaction), but that is clearly where the political thinking remains for the time-being. And in large part, the reason for this is the unfairness of how climate impacts are shared, particularly when compared to historic and current emissions, and indeed capacity to pay, as this chart from this year’s Climate Inequality Report starkly shows:

A clearer visualisation of why the political process on climate is stuck would be hard to find.

The polluters need to pay, but at present they feel limited incentive to do so. Of course, as well as the inter-country unfairnesses in carbon emissions, there is remarkable unfairness in emissions within country too (see Unfairness in carbon emissions) – and as of the last two decades this is now the greatest driver of carbon inequality, according to the Climate Inequality Report’s chart below:

But it is the still very substantial unfairness between countries that makes political progress so difficult.

It cannot be by chance that the Belem Declaration contains a statement of support for Brazil’s bid to host the COP-30 climate summit in 2025 – accompanied by a note that the progress from this year’s COP-28 to COP-30 “will be critical to the future of the global response to climate change” [isn’t every one of the next months and years?]. The bid is to host the COP in Belem itself; one hopes that the symbolism of holding the event in the Amazon has an appropriate effect.

This is the South’s agenda: you cannot ask us to act alone. We need help and assistance. Until the North responds, not just with words but with real cash, systematically and at scale, the politics will remain blocked. Whether the requirement will be at the scale of the annual $300 billion global wealth tax floated in the Climate Inequality Report will have to be seen.

But it is clear that unless we address inequalities we will not reach the political agreements needed for a global approach to the climate challenge. We need fairness to find a global solution that takes the world forward. Without fairness – or at least without less unfairness – we will not progress.

* Note that, here and elsewhere in this blog, this is an informal translation; the declaration is only officially published in Portuguese and Spanish.

Just transitions and gilets jaunes

Sea level rise: the most unjust transition

Press notice on the Belem Declaration, Amazon Cooperation Treaty Organization, 9 August 2023

Belem Declaration, August 2023

Climate Inequality Report 2023: Fair taxes for a sustainable future in the Global South, Lucas Chancel, Philipp Bothe, Tancrède Voituriez, World Inequality Lab, January 2023

Just Nature: How finance can support a just transition at the interface of action on climate and biodiversity, Sabrina Muller, Nick Robins, Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, August 2022

The scandalous Post Office

I am furious afresh about the unfairness of the Horizon Post Office scandal. Two things have reawakened my fury: a powerful new play on the scandal, and the Tax Policy Associates analysis of the appalling ‘compensation’ scheme. The quote marks are meant to indicate that the scheme is not worthy of the term compensation.

I’ve written about the substance of the scandal before, in Unfair trials: justice in the dock. In brief, the UK Post Office launched a new IT system, Horizon, created by Fujitsu, which was not fit for purpose and riddled with bugs. Once problems occurred, the organisations preferred to take Post Office workers to court for theft and fraud rather than admit there was any possibility of failings by Horizon. Once it became undeniable that there were such problems, they preferred to lie and continue to put people in prison and ruin lives in other ways, than do the fair thing and reverse out of the situation. The Tax Policy Associates work indicates that they still don’t want to be driven by fairness and do the right things by the victims, but instead continue to act first to protect the Post Office itself.

But to start with the play, False Accounts from the Outcasts Creative was both a satirically funny and powerfully emotional event. I personally found the humour a little uneven but it was probably a necessary leavening to the intensity of the emotion generated by a strong and impassioned cast.

The performance I enjoyed was made all the more powerful by having individuals in the audience directly affected by the scandal. The scale of their personal anger was clear – on occasions they were unable to stay silent. And their tears at the suicide scene were much more copious than mine, affecting as it was.

There’s a moment in the script where the cast invites the audience to think how ordinary the victims of the scandal were, that they might be the people sitting alongside us. For me that moment was among the most powerful as it was literally true. I’m pleased that I managed to encourage my neighbour to join the cast on stage after the show for due applause and recognition.

False Accounts has a further short run at the Upstairs at the Gatehouse Theatre in North London from June 20th and is highly recommended. It provides a great first insight into the scandal as well as bringing to life its emotional realities for those who already know the story. I can’t guarantee that you too will be joined by those directly affected but it’s certainly true that it’s possible your neighbour in the theatre may also have been a victim.

Meanwhile, in his latest Tax Policy Associates work, Dan Neidle outlines Eight reasons what the Post Office compensation scheme is a scandal. I’ve previously referenced Neidle’s consistently excellent work in the tax space (see Tax shouldn’t be a choice). This latest is slightly tangential to his core skillset but maintains his usual quality of analysis.

His conclusion is blunt and focused on fairness, both of process and outcome:

“the Post Office has adopted a strategy to minimise compensation… It does that by minimising the initial claim postmasters are making. The Post Office can then point to all the procedures in place to ensure claims are handled fairly – but the unfairness happened right at the start.”

In his typically detailed and forensic way, Neidle sets out how the so-called Historic Shortfall Scheme – ironically – falls short of fairness. Essentially, this is through an over-complex application process that diverts attention from some forms of compensation that victims are due, and on which legal advice is discouraged. In effect, the Post Office seems to be exploiting the lack of skill and knowledge of its victims and Neidle is reporting the authors of this process to the Solicitors Regulation Authority. As in the original scandal, the Post Office lawyers appear to be riding roughshod over the rule of law – fairness, in other words – in what amounts to a further scandal.

It represents something further to be put right, and something that infuriates in the meantime.

Tax shouldn’t be a choice

False Accounts by Lance S A Nielsen

To be performed at: Upstairs at the Gatehouse, June 20^th-25^th

Eight reasons why the Post Office compensation scheme is a scandal, Dan Neidle, Tax Policy Associates

Solicitors Regulation Authority