Shortsighted failings lead to health unfairness

As a wearer of glasses since childhood, it comes as no surprise to me that human beings generally are shortsighted. I mean that not in the sense that we all need to wear glasses (though statistics on the way that our phone-obsessed indoor lives appear to be driving an epidemic of myopia mean that we may be headed that way), but in the sense that we avoid overloading our brains by only paying attention to what is near at hand.

We tend to ignore the distant, geographically, in terms of time, culturally, socially or emotionally, and we have to work hard if we want to lean against that natural tendency. We pay more attention to the near-at-hand, to people who look and sound like us and people who coincide with us geographically and timeously. This is a natural response: it is one of our common heuristics, methods of avoiding informational and other overloads. “human kind/Cannot bear very much reality,” as TS Eliot has it in his extraordinary Burnt Norton, one of his Four Quartets.

But that shortsighted, narrow-minded view means we miss much that matters. When we are facing global risks, parochialism is a dangerous mindset. Among other things, it seems increasingly that this human tendency continues to hamper our response to very real global health challenges.

Take mpox (the rebrand from monkey pox was perhaps an attempt to make it seem like less of a distant issue). There has been dramatically greater UK media coverage of a household of 4 mpox patients suffering from the more infectious and more potent Clade Ib version (a clade is an individual branch on the genetic family tree) of the virus, first revealed at the end of October, than there has of the almost 50,000 cases, and over 1000 deaths, in an outbreak in Africa, particularly in the Democratic Republic of Congo, over the last several months. A more still recent single case in Leeds alone has also gained greater coverage. The same is true in the US: a single case in California revealed in the late November has received notably more attention than the global situation.

The World Health Organisation declared mpox a public health emergency of international concern back in August, and reconfirmed that view at the end of November. Despite that, only a couple of days ago did WHO authorise the first vaccine for children against it – young children are particularly susceptible given it passes through close contact. Happily, in its farsighted wisdom Japan is funding 3 million doses of this new vaccine, developed by KM Biologics. As an aside, it’s worth recognising suggestions that the upsurge of mpox may be related to a health success: the eradication of smallpox has led to the vaccination programme against that disease ending, removing its suppressive effect on other poxes.

It’s as if we’ve learned nothing from the Covid pandemic: that in a global world there is no such thing as a localised virus outbreak, no such thing as a disease that will not travel. Even a virus that needs close contact like mpox will travel, though clearly much more slowly than airborne Covid and the like. And viruses adapt – just as bird flu has seemed to, leading to an infection of a Canadian teen who had no known contact with wild birds. It took that revelation for the Canadian government to invest significantly in bird flu research, something that it announced just the day after the teen’s infection was revealed. Outbreaks that may seem containable can rapidly become something more. Our response always seems to be a belated one, only when the danger is very near at hand.

Fairness argues that we should care about outbreaks of viruses that affect other communities in our shared world, but so does selfish good sense. We need not be so shortsighted.

I am happy to confirm as ever that the Sense of Fairness blog is a wholly personal endeavour.

I am once again grateful to the investment world’s Jiminy Cricket, Raj Thamotheram, for continuing to nudge me on matters of health and fairness.

Association between digital smart device use and myopia: a systematic review and meta-analysis, Joshua Foreman et al, Lancet Digital Health, Vol 3, Issue 12, December 2021

Burnt Norton, The Four Quartets, TS Eliot

UKHSA detects first case of Clade Ib mpox – now renamed Latest update on cases of Clade Ib mpox, UK health Security Agency, 30 October 2024 and subsequent updates

California confirms first Clade I mpox case, US Centers for Disease Control and Prevention, 16 November 2024

WHO Director-General declares mpox outbreak a public health emergency of international concern, World Health Organisation, 14 August 2024

Second meeting of the International Health Regulations (2005) Emergency Committee regarding the upsurge of mpox 2024, World Health Organisation, 28 November 2024

The eradication of small pox may have the set stage for the mpox outbreak, All things considered, NPR, 25 November 2024

Statement from the Public Health Agency of Canada: Update on Avian Influenza and Risk to Canadians, Public Health Agency of Canada, 13 November 2024

Government of Canada invests in research on avian influenza A(H5N1), Canadian Institutes of Health Research, 14 November 2024

Debilitating poverty

Being poor brings many disadvantages. A lack of money squeezes options and reduces opportunity. It hampers health and makes ambition harder. But the effects aren’t just direct and physical. They are psychological too. Researchers are beginning to uncover just how debilitating being poor is for effective thinking.

The answer to the question posed in the title Do Financial Concerns Make Workers Less Productive? was a resounding yes. Not only did poor workers whose money troubles were temporarily alleviated produce more, they also made fewer mistakes in production, despite operating more quickly. There is a clear business productivity benefit from this poverty alleviation; and in work that pays piece rates – where workers are paid for their useful output in numbers of products – this alleviation of worry also enabled them to earn more.

In a world of unfairness in which many are kept poor, these are significant findings. In a world seeking greater growth, where growth has been held back by stagnant productivity, they are still more important.

The increase in productivity shown was much greater than that brought about by an increase in the piece rate paid (which in a control experiment was done alongside a cut in base pay so that overall earnings were steady). There was a small increase in output following the piece rate increase, but it was less than a tenth of the change brought about by removing money worries – and there was no discernable increase in the quality of production, meaning this piece rate change delivered much less than a twentieth of the improvement in productivity that alleviating poverty did.

It’s worth noting that the researchers were able to discard alternative explanations of why these workers become more productive. In particular, they specifically discounted the possibility that improved nutrition of the poverty-relieved workers was the cause, because of the speed of the effect of the early payments and the lack of difference in nutritional intake in that short period. The effect is a psychological one: workers who don’t need to worry constantly about money are more productive.

This means that our economies are being held back by workers who are less productive than they could be, simply because they do worry about money on an ongoing basis. GDP growth is being artificially depressed and poverty alleviation could help it recover. This represents a business, investment and economic opportunity.

These findings are depressing. But it’s worse to find that growing up in poverty also has debilitating effects on children.

A recent study finds that poor students underperform their usual standard on maths tests that use real-world scenarios involving money, food or social interactions. It’s not a small effect, either: their performance is on average 18% lower than it is on questions overall – and, the researchers note, it would look even worse if they compared performance against just those questions that are more neutral.

These results were surprising to the researchers, who were expecting to see outperformance in these more practical questions, revealing hidden talent among poor students (they use the jargon low SES, socioeconomic status) that may be untapped by traditional education. That’s the reason why such questions have increasingly been used in modern testing: they are thought to be more accessible to all students. But the result of this study indicates that accessibility comes at the price of triggering distracting thoughts for poorer young people. As the chart shows, performance is worst with regard to questions that refer to money specifically.

Another recent study also found evidence of underperformance on money-linked questions by poor students. It puts this down to ‘attention capture’ as the researcher identified an effect not only on the specifically money-linked questions but also underperformance on more neutral questions asked subsequent to them. It seems as though the question reminds the students to worry about money, and they then can’t shake off the concerns.

These results amount to another example of apparent meritocracy in fact acting to limit the opportunity of those who start with less. As the Fictional Money, Real Costs paper states:

“Examinations are an efficient mechanism to benchmark and rank a population based on a specific set of skills. The notion that they are fair, however, has increasingly been questioned. A significant concern is that performance differences reflect inequities in the testing process itself, rather than differences in underlying skills, and thus may contribute to the intergenerational transmission of existing inequality.”

I am happy to confirm as ever that the Sense of Fairness blog is a purely personal endeavour

Do Financial Concerns Make Workers Less Productive?, Supreet Kaur, Sendhil Mullainathan, Suanna Oh, Frank Schilbach, National Bureau Of Economic Research Working Paper 28338, January 2021

Math items about real-world content lower test-scores of students from families with low socioeconomic status, Marjolein Muskens, Willem Frankenhuis, Lex Borghans, npj Science of Learning, vol 9, art 19 (2024)

Fictional Money, Real Costs: Impacts of Financial Salience on Disadvantaged Students, Claire Duquennois, American Economic Review 2022, 112(3): 798–826

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.