Of car alarms, ugly facades & first aid courses – the wonderful world of ‘compound externalities’

Jargon is a nerd’s best friend

Economists love to talk about ‘externalities’. ‘Externality’ is a wonderfully complex-sounding word that makes you feel more intelligent just by saying it. It is especially useful when trying to pull the wool over the eyes of a non-economist, as in:

Community activist: “We’re outraged that our organisation has had its budget cut so the government can bail out irresponsible banks!”

Economist: “I understand completely your feelings, but your analysis of the cost of financial sector repair fails to take into account the growth-enhancing effects of the associated positive externalities resulting from the smooth operation of financial markets.”

Community activist: “I… well… uh… what?”

Economist: *smiles imperceptibly and adjusts knot on his silk tie*

Keep your market transaction to yourself, buddy

Yet the actual meaning of the word ‘externality’ is in fact quite simple. Here it is in a nutshell: For any transaction, there is a buyer and a seller. An ‘externality’ can be thought of as the effect of the transaction on someone who is not the buyer and not the seller.

exhaust
Pollution is a classic externality – a cost on someone outside the market which occurs through the operation of the market

So for example, if John buys a car from Volkswagen, this transaction has effects on both John and Volkswagen (John gets a new Golf in exchange for €30,000; Volkswagen gets €30,000 in exchange for a Golf). Because the transaction was voluntary, we can assume both John and Volkswagen are both strictly better off from having made the trade (otherwise, they probably wouldn’t do it).

But what happens when John tools down the road in his new Golf, kicking carbon emissions and particulates into the air, taking up public space and potentially running over grannies and cats? In that case, there is a cost born by someone who was not party to that transaction, arising from the transaction (pollution, traffic congestion, increased risk of an accident). This cost is a ‘negative externality’. There are many examples of negative externalities, but pollution is perhaps the most common one. In general, economists accept that the government should sometimes intervene in markets in order to correct for these negative externalities (through regulation or taxation, for instance).

There’s no such thing as a free ride…or is there?

We can also think of ‘positive externalities’, i.e. when the operation of a market has a positive effect on someone outside it. The pleasant smell of freshly baked bread on a street outside a bakery can bring joy to passers-by, even if they do not actually enter and pay for the bread. And if a person with a contagious disease pays to have himself treated privately, this is a benefit to all the people he has protected from potential infection, even if he was only acting selfishly.

But don’t let the name deceive you: positive externalities are not always a good thing. Sometimes they can stop markets from operating effectively. For example, if I invent a brilliant new machine and try to sell it, the ‘idea’ can simply be copied by someone who does not actually pay for my machine, leaving me with only a small reward for all the midnight oil I burned while getting to my eureka moment. Without some kind of protection, this risk might prevent me from bothering to invent the machine in the first place. This is why, just as in the case of negative externalities, the risk which positive externalities pose to production is a justification for the government to intervene, by granting patents and other forms of intellectual property rights.

Compound externalities – where markets depend on failure in order to succeed

There is a certain class of externality which I find quite interesting and which, to my knowledge, has not been written about by economists yet. It is the ‘compound externality’, which can be defined as the effect on someone outside a market arising from the operation of a market which only has value to the buyer and seller because of this negative effect. This sounds confusing, but it’s quite simple when we break it down: As before, we have a transaction, so we have a buyer and a seller. In addition, there is an effect from the transaction on a third party AND – here’s the catch – the only reason the transaction is valuable to the buyer / seller is because of this effect on the third party.

The most obvious example of a compound externality is noisy alarms. In this case there is a negative cost imposed on you when your neighbour’s house alarm goes off at 3 in the morning, even though you didn’t sell him the alarm and you sure didn’t buy it. But here’s the catch: the only reason he wanted the alarm is so that it would annoy and wake you, his neighbour, up, so that you would then look out the window at his house and – in this way – spot the burglar breaking in through the window (hence deterring the burglar!). If it didn’t create the noise pollution, the alarm would have no value.

Another example is the ‘ugliest façade’ project. Imagine you live on a historic square full of old houses with lovely façades. Your obnoxious neighbour from the above example – not content with his cacophonous alarm – has torn down his house and is building anew. He has an incentive to build the façade as ugly as he possibly can. Why? Because by doing so, he destroys the perfect appearance of the square as viewed from your house and from every other building… every building that is, except his own. All of the sudden he possesses the only piece of real estate with an unsullied view of the historic old square!

Quick, is there a positive compound externality in the house?

What about positive ‘compound externalities’? Are there any examples of markets which, in order to operate, depend on a positive effect occurring on someone outside the market in order for the market to exist? The only one I can think of is the market for first-aid training. Here, the only value to you in paying for a first-aid training course is that, should the occasion arise, you will be able to apply the Heimlich Manoeuvre to dislodge a chicken dumpling from the oesophagus of a third party (while attending a party…).

I’ll stop now because I can’t think of any other examples. Perhaps someone else can?

 

Things aren’t so bad … so let’s not make them worse

The People think they want change

Ok, there is a lot of anger out there. Some are angry because they fear the ‘other’ taking away what they have; others are angry because they want more redistribution and fairness. Some blame benefit-scrounging immigrants, others blame the global elites. But while the grumbles might be diverse, there is a common sense that the system is somehow ‘broken’ in a way it wasn’t before. Whether it means Trump, Brexit or someone like Bernie Sanders, a large number of people who previously would have been moderates now want – or at very least expect – to see fundamental change to the societies and political systems they consider have failed. Alarmingly, they seem prepared to topple long-established systems and political traditions in order to see this change happen.

And maybe they’re right. Who knows? The consequences of disruptive change are hard to predict in the short run, and ultimately may take a very long time to play out fully. When Nixon visited Beijing in 1972, he asked the witty and influential Chinese mandarin Zhou Enlai his opinion on what impact the 1789 French Revolution had had on history, to which Enlai is said to have replied that it was “too early to say”.

Nature red in tooth and claw

But it seems to me the risks are very much on the downside. To paraphrase John Lennon, if disruptive change means destruction, you can count me out . Our system may not be perfect, but it is a hell of a lot better than nothing. To see how, consider what things would be like in the complete absence of society. Imagine an invisible hand picked any one of us up from his current desk, couch, bed, airplane seat … and carried him out of his man-made environment and place him, naked, in a

Without us around, Nature would reclaim cities within a few hundred years. Romantic? Or just plain brutal?
Without civilisation, Nature would reclaim cities within a few hundred years. Romantic? Or brutal and hostile?

theoretical primeval forest where other humans simply did not exist. This is the total absence of society. How well would he fare? He might last a week before getting eaten. A summer, perhaps, if he is particularly crafty and in good health. But come winter, he would freeze, starve or get eaten by wolves. The first major injury or illness would likely finish him off. And even if, by some miracle, he managed to carve out a niche (most likely literally) for himself, would his quality of life be even a fraction of what it is now? I remember an excellent article written by Alan Weisman in Discover Magazine back in 2005 which explored the world without humans. It was a romantic vision, full of evocative prose of species flourishing and cities crumbling. The descriptions made it clear a little bit of the author’s heart longed for such a thing to take place. Yet where is Mr Weisman now? Living in one of the few remaining wildernesses in Alaska or Russia which closely approximate his vision? I’m guessing not. Especially as he was sending pre-apocalyptic tweets as recently as 2014.

Creature comforts are better than creatures

This thought exercise is designed to remind us of just what a good job society does at shielding us from what is, in reality, a hostile physical environment. Such a good job, in fact, that we forget we are being shielded. Unlike the current political system, Nature isn’t just guilty of neglecting our interests and selling us a bit of Fake News. Nature actively wants us to die. It wants to dispatch predators to eat us, it wants to release diseases to sicken us, or else simply deny us food and watch us starve. The system, far from being broken, does an absolutely remarkable job of taming Nature and providing us with far more than what we could have on our own. What’s more, it is better at doing this now, than at any point in human history.

If we allow this system to be torn down, perhaps a better one will rise from the ashes and we will achieve some kind of Utopia. But that seems like a bad bet, given what we know from history and observing the physical world around us. Disruptive change is more likely to give Nature the opening she has been seeking for centuries. She might rub her hands in glee while we starve in our billions. Animals or bacteria could so easily overwhelm us, and in the ensuring mayhem we would likely turn on each other. Then, somewhere in the mud and mess, those among the living who were old enough to remember would regret that they so cheaply threw away a system they thought was broken, but in reality was only a little bit flawed.

 

Soooo many people died in 2016, right? Wrong.

Should old acquaintance be forgot…

New Year’s for most of us has been more a question of ringing out the Old Year, rather than ringing in the New. It’s more or less universally accepted that 2016 has been a crummy one, at least within my circle of acquaintances. One particular feature has been the remarkable number of deaths, with George Michael and Carrie Fischer being but the last in a long list of casualties claimed by that angry teenager, Not-so-sweet ’16.

However, in actual fact, as a proportion of the total population, fewer people died in 2016 than in 2015. What’s more: as a percentage of the population, fewer people died in 2016 than in any year in the history of humankind. That’s right: In 2016, 0.76% of humans on earth kicked the bucket. By contrast, back in the ‘good ol’ days’ of say, 1960, that number was a whopping 1.77%. If you went back a Century, when the Great War was raging, it might have been closer to 3 or 4%. So in fact 2016 was the safest year ever to be a living human being.
cohen-and-african-kidsjpg

This was thanks to lower infant mortality rates, better access to medicine, improved diets and – despite what has happened in Syria and a few other places – overall a reduction in violent death.

Adieu to the former artist formerly known as the Artist Formerly Known as Prince.

But the good news doesn’t seem to apply if you were a celebrity. The BBC has a good article which tracks obituaries for 2016 compared to previous years and yes, we’re not all just imagining it: The hard data backs up the commonly held opinion that 2016 has been a grim year for the rich and famous.

According to the BBC's count of obituaries, 2016 has indeed killed lots of famous types.
…and this chart isn’t even counting the most significant death of all: That of Brad and Angelina’s marriage!

Which got me thinking about why we care so much. Why does it matter to us that someone – a singer or an actor – has passed away? Sure, they produced art which gave joy to our lives. But in almost all of these cases, the people in question were well past their artistic primes. And the art they gave us can still be enjoyed, even if they have now moved on to the Great Dressing Room in the Sky. Yet we seem to care, not just about their art, but about them, as people.

Which on the face of it is very weird. It hardly needs saying, but these people are strangers to us. We don’t know them personally, they certainly don’t know us or even want to know us, and even if by some freak chance we found ourselves snowed in to an alpine cabin in the company of a selection of Hollywood A-listers, we would quickly discover that they have nothing in common with us. So instead of cursing 2016 for the handful of complete strangers it has taken away, why don’t we choose to raise a glass of New Year’s bubbly and thank 2016 for sparing our friends and family?

Thou shall have no other gods before me, except perhaps the Kardashians

Of course we are grateful for our loved ones. But the fact is, celebs do matter to us. They fulfil a need which appears to be very human, that is, the role of the idol. This is nothing new to our age. The desire of the masses to look up to quasi-real demi-gods and follow their every movements is as old as mankind itself. Is our fascination with Angelina Jolie’s shocking decision to divorce Brad Pitt not the same kind as what the ancient Greeks must have felt about the decision by the mythological Jason, leader of the Argonauts, to divorce the powerful Witch-Princess Medea of Colchis, in order to tie the knot with the Corinthian princess Glauce? Did the plebs of Ancient Rome look upon Cleopatra any differently to the way the plebs of New York saw Marilyn Monroe? And the Hollywood Walk of Fame, can it not be seen upon the walls of any Catholic church, in the form of a star-studded line-up of Academy Award-winning saints?

In a sense, it is the decline in religion which has left a void in us; a void we seek to fill through celebrity culture. The image of callipygous Freya, the most beautiful female form imaginable, riding in a chariot pulled by two great cats through the Norse woods, together with her omnipotent husband Odin, is lost to us. But in its place we have bootylicious Kim and her theomaniac husband Kanye, riding in a sleek SUV along the highways of Los Angeles.

There’s one degree of separation between me and you: Kevin Bacon

And yet, while celebrity idolatry may always have served the purpose of setting a distant horizon to our plebeian ambitions, it seems that in recent years, the phenomenon has grown even more pervasive . I speculate that this is because, as cities become more vast and anonymous, and society more fragmented, we feel an ever larger yearning within ourselves to have something that connects us. With greater labour mobility and smaller families, more and more of us are moving about, lonely and disconnected. Shared references and common history are scarce, lost in the back of a rented U-Haul truck. Yet celebrities can restore that bond. We all know these beautiful super-humans from our one common altar – the TV screen. Taking an interest in their fate, becoming intimately acquainted with their ridiculously-named offspring and keeping track of their drug addictions and failed marriages becomes a vital source of shared reference. In the cold urban jungle, it is a comfort to me to think that while I may not know my neighbours, at least I know that they are watching the Oscars too. These saintly figures who float down the red carpets, in a mythological universe that seems planets away; they are the one true bond between us plebs.

 

Overpopulation and Climate Catastrophe: An economist view

If you know me or have visited this blog before, you’ll know that my book, The Hydra, is about overpopulation. In it, a scientist decides the world is so full of humans, that he must save the planet by engineering and releasing an infertility virus. I won’t give away too much of the plot, but suffice it to say as a novel it doesn’t really do much hard number crunching. It begs -but perhaps never really comprehensively answers- the crucial question: Is the world so overpopulated that we’ll destroy the planet unless we change our policy direction?

Indeed, when you discuss the issue with most people, you get lots of uninformed opinions, which range from “I think we’re all doomed, unless there’s some major war or something” to “There are definitely not too many people in the world. It’s just a question of sharing out the world’s resources fairly and investing in technology instead of war” I always find it astounding just how convinced both sides can be of their opinions, without the faintest notion of what the hard numbers are saying.

So let’s see if we can do any better. First stop, the databank of the World Bank where, after some data cleaning, we can come up with a list of useful data for the world’s countries, grouped into categories depending on how rich they are. Basically we’re looking at four things: population, Greenhouse Gas (GHG) emissions, GDP and birth/death rates, from 1960 to 2015.

What can we see from the numbers?

The first thing to look at is Greenhouse Gas (GHG) emissions. By 2012 we humans had pumped about 567 gigatonnes of CO2 equivalent (GtCO2) into the atmosphere since the dawn of industrialisation (1870). In 2012 alone we added 52 GtCO2 to this stock, up from an annual total of 27 in 1970. While the data are jumpy, on average, the amount of carbon we release in the atmosphere annually is growing by about 1.3% a year. Even if this pace of annual emissions growth were to fall from 1.3% to 0% a year, that would still mean we would be adding the 2012 payload of 52 GtCO2 into the atmosphere every year. If that level of emissions were to continue until 2050, that would result in an atmosphere laden with 2,572 GtCO2 released by humans. That number is so big, it is literally off the charts, as far as the climate scientists are concerned. To illustrate, I’ve made a simplified version of “the chart”, i.e. the UN’s reckoning of how cumulative emissions will raise temperatures. You can find the full chart on page 54 of this document.

The UN shows what sort of temperature changes we'll get in 2100 for given levels of emissions up to 2050
The UN shows what sort of temperature changes we’ll get in 2100 for given levels of emissions

As you can see, they don’t even consider a scenario in which we keep emitting the level of GHG which we emitted in 2012. What this is telling us is pretty clear: if we continue with business as usual, we’re going to miss the current climate targets by more than a factor of 2, resulting in massive, truly massive, changes to our climate which may well spell disaster for the planet and for us all. Now of course, nobody believes business as usual is an option, which is why we had Kyoto and then Paris and soon Marrakesh.

Linking emissions to income

Money makes the world go round. And it also determines how much GHG we put into the atmosphere. Or more precisely, the things people like to spend money on: heat, bigger houses, clothes, high-protein food, transport. The precise link between income and emissions depends on where a person is on the income scale: For very rich countries, there is already evidence of ‘decoupling’, i.e. as rich people get richer, emissions don’t increase, they actually go down. But because rich countries only account for 15% of the world’s population, that doesn’t really matter. What matters are the middle income countries, places like China and Brazil, who make up 35% of the world’s population. The 2.6 billion people living in these countries have been getting richer since 1990, and whenever they’ve got their extra cash, they’ve burned it and pumped it into the atmosphere. Here’s the chart that shows it:

upper-middle-income
This chart shows growth in GHG emissions and growth in per capita income for “Upper Middle income” countries like China and Brazil

As these countries get to the sort of income levels the rich world has already achieved (and they are well on their way) there is every reason to assume that they too will ‘decouple’ emissions from growth, but for now, they are still hungering for more of the things that make the atmosphere hot: steak, cars, swimming pools and city breaks. And this is set to go on into the foreseeable future.

The real problem, though, is the next wave of countries, the so-called “Lower Middle Income” countries like India, which as a group are home to even more homo sapiens (2.8 billion or 40% of the world’s population). If these countries grow in the same way as China and Brazil have done, it will mean even more pressure to emit.

The power of econometrics can help us to estimate this relationship, which turns out to be very well approximated by the equation [kilograms of emissions / per person] = 1090 + (0.7093)*[GDP/person] – (0.0000047025)*[GDP/person]^2 – (0.00000000010531380)*[GDP/person]^3. If you want the nerdy details of where I got this, click here, but for everyone else I’ll just summarise what this means: If you have zero income, you will still emit about 1,000 kg of CO2 equivalent into the atmosphere every year. Emissions go up at about a rate of 700 grams a year for every dollar of extra income you get, but this slows down as your income approaches $35,000 a year. After that, extra income leads to lower carbon emissions per year. Here’s what the graph looks like:

The graph shows that when incomes grow beyond about $35,000, the link to emissions is broken, i.e. 'decoupling'
The graph shows that when incomes grow beyond about $35,000, the link to emissions is broken, i.e. ‘decoupling’

So what about population?

In 2015, there were 7.3 billion humans on Earth, more than ever before. This population increases about 1.2% a year, and while the rate of increase has been slowing since the late 1960s, it hasn’t been slowing by very much. If the pace of population increase we have observed since 1969 were to continue (i.e. let’s assume it continues slowing a bit every year, like it has been doing) there would be 9.75 billion of us by 2050. This, by the way, is the EXACT baseline estimate for the UN’s own population projects, but more about the UN’s numbers in a bit.

The main driver in the growth of populations is the crude birth rate, which measures how many children are born per 1,000 people. It turns out there’s a pretty stable relationship between birth rates and per capita GDP. Crude birth rates have been going down pretty much everywhere in the world, and it’s because of money. Basically, the richer a country, the fewer babies they make. In very poor countries, crude birth rates are around 35-40; as a country gets richer, the birth rate falls to just under 10. Figure X illustrates the relationship, which mathematically can be approximated by this formula: b = (45 * minY^a)/Y^a, where b = birth rate, Y is per capita GDP, and a is a “shape parameter” which is somewhere in the range of 0.2622 to 0.36487 Again, for the nerds out there, all the details are here.

The other thing that affects population is the death rate (deaths per 1,000 population). This too is ultimately a function of cash, but the relationship’s a little trickier because of demographic effects. (For example, Germany’s death rate is higher than Zimbabwe’s, not because Mugabe has better health policies than Merkel, but because, when you break it down, old age is the single worst thing for your health, no matter how rich you are. And Germany simply has a lot more old people than Zimbabwe.)

But here again, statistics can come to our aid. We can isolate the effect of the demographics and when we do, we get a pretty similar relationship as with per capita income. This is the equation that tells the story: d = (minY^a)/Y^a * (1/AGE^g), where d = the death rate, minY is a constant equal to 1,011, Y is per capita GDP, AGE is the percentage of the population aged over 65 and a and g are shape parameters equal to 1.0144 and -2.0097 respectively. In other words, the richer a country’s people are, the lower its death rate. The more oldies are in a country’s population, the higher the death rate.

So to recap, as people get richer, they have fewer babies, but they also tend to live longer, and we can use statistics to estimate by how much this is so for every extra dollar of income they get.

Putting it all together

Equipped with the three sets of estimations we have done above, we are ready to put the whole picture together. The first step is to make an assumption about how per capita GDP might evolve in the future. Of course we don’t know, but let’s imagine it continues to grow at the same annual rate it has been growing from 1990 to 2015, for the four classes of countries the World Bank identifies: high income (e.g. the US and Europe), upper middle income (e.g. Russia, China and Brazil), lower middle income (e.g. India and Indonesia) and low income (i.e. mostly sub-saharan Africa). This is what we would get:

projected-gdp-capita

The dashed green line illustrates the ‘decoupling’ threshold, i.e. the point beyond which getting richer no longer causes more per capita emissions. As you can see, while the ‘Upper Middle Income’ countries pass this threshold, the ‘Lower Middle Income’ countries – and remember in population terms these are the big guys – won’t even have got there.

Using our equations which we estimated above, let’s now link this assumed GDP/capita path to what we know about birth rates and death rates and see what that gives us for total population:

gdp-driven-population-estimates

Now, there’s an awful lot to say about these “GDP driven” estimates of total population on earth. The first thing is that it gives us an estimate of 11.4 billion for the 2050 population, which is a good 1.7 billion more than the UN’s estimates. When you compare the two sets of projections line by line, you see that the differences are in the two “Middle Income” categories. The UN’s estimates seem to assume that these countries population’s will grow more slowly, driven by a faster decrease in birth rates.

The next major difference is that unlike the UN’s demographic projections, these GDP driven projections show no sign of population levelling off any time soon. Indeed, it seems to imply that for the bulk of countries, there’s a good ways to go until death rates overtake birth rates. (I’m willing to put my hands up and say I’m not a demographer, so maybe there’s things I have missed. For one thing, my modelling takes no account of migration trends. I guess I’m kind of assuming that for the world as a whole, net migration is zero. But as people move from poor to rich countries, their birth rates also change, so it’s possible to argue with my numbers).

Now you might be tempted to say: hang on, you just assumed GDP would grow like that. What if growth levels off? Wouldn’t that solve the problem?

Not really. If we change the model so that there is zero growth in per capita GDP from now until 2050 for all four classes of countries, here’s what we get:

If you believe my model, zero growth means even more humans on the planet
If you believe my model, zero growth means even more humans on the planet

Now the 2050 population is projected at a whopping 13 billion! This is because the lower per capita GDP among the ‘middle income’ countries is driving higher crude birth rates.

Finally, let’s bring this all back to total GHG emissions. If we plug these population numbers into our estimate for per capita GHG emissions by income level, we should be in a good position to tally up the total GHG emissions that this implies, under the two scenarios (no growth and growth at the average).ghg-in-atmosphere-to-2050

As you can see, with zero economic growth, the level of emissions is lower, but still really high. (The reason why it stays so high is because, at zero growth, although lower middle income countries like India are not pumping more GHG into the atmosphere, the rich and upper middle income countries still are. Furthermore, while the per capita emissions of the poor stays low, their numbers are increasing at a faster rate.)

For both graphs, the red line indicates the UN’s uppermost threshold (2,310 Gt CO2) for their most extreme emissions scenario. Therefore, the current projections put us on a path of GHG emissions that would mean temperature increases to 2100 of more than 4 degrees Celsius. Once again, well off the charts!

Can technology save our bacon?

It’s entirely possible that sometime next year, “they” will discover cold fusion, a carbon-less, virtually free and infinitely renewable energy source that will allow us to rapidly decarbonise and merrily turn the planet into some kind of Coruscant. I have no clue whether this is a realistic prospect.

But sadly, neither do the people who seem to be depending on it as a solution. And my instincts tell me it is very bad policy to rely on a solution not yet invented in order to solve a problem so grave that it threatens our species’ very existence.

Maybe the way to save our bacon is simply to stop eating it? Lowering our consumption of meat and other carbon intensive goods will surely help. Yet when we look at the scale of the challenge as outlined above, it is clear to me this can only be a part of the solution.

Given that the underlying problem is that there are a lot of people in the world, birth rates are higher than death rates, and most of the world’s poor are getting richer, it seems to me that – absent Cold Fusion – there are really only two other choices:

1) Keep the poor as they are: poor. Stop them from developing economically, so they can’t burn the CO2 which we, the rich folks, have been torching for decades now. Don’t let them have decent houses, clean water or high protein diets, because these things cost carbon, and we haven’t got it to spare. This solution would likely work but it seems to me to be highly immoral. I would hate to live in squalor, be hungry, or to not have healthcare. So I don’t want to espouse policies that depend on others having to live in a way I would not.

2) Move to a Global Single-child policy: The one-woman, one-child policy is the best way there is of controlling these effects. Policies which shift the birth rate equation down at all income levels are the ones most likely to achieve our environmental aims without having to inflict misery and suffering on our own species, or on others. It would take a policy step-shift in thinking to address these problems, but as far as I am concerned, when I look at the numbers, I am certain that this is the only reasonable policy solution there is. We can start by asking religious leaders like Pope Francis to change their messaging around birth control.

And, of course, we can stop thinking of demographic change in the West as a ‘problem’. It isn’t a problem, it’s the start of the only real solution.

NOTE: I am including the full set of data which I used to do all calculations. I welcome any corrections or suggestions for improving the model.

Social Class in Dublin: the final taboo

Dirty old classism
As I prepare to leave Dublin, I find myself reflecting on the things that make life in this city special. Many are splendid: the quick Dublin wit, the pleasant gift of the gab, the unique blend of international culture and local identity. But some are less worthy of celebration, and in this category I would place social class. I have travelled much in my life, and made it my business to understand a place as well as I could, but nowhere have I observed a social class structure quite like Dublin’s. For an issue that barely gets mentioned, class is everywhere on the streets of the Fair City. The fault lines are so visible that you can determine a Dubliner’s social class by their dress style, by their manner of walking, by the very first syllable of the first word that comes out of their mouths; even by the complexion of their skin. Not to mention the neighbourhood they live in: Even the city’s postcodes are euphemisms for the class of its residents.

By way of example: If you’re 25 and you grew up in Clontarf or Clonskeagh (postcodes 3 and 14, respectively), you went to college – probably either UCD or Trinity. If you grew up in Clonsilla or Clondalkin (15 and 22), you did not. The former ‘Clons’ are non-smokers, they support Leinster rugby, go on holidays to the South of France, shop in Dundrum or Powerscourt and work as accountants or barristers; while the latter Clons smoke, support Celtic or Manchester United soccer teams, go on holidays to Spain, shop in Blanchardstown or Liffey Valley and work as builders, shop assistants or else simply draw the dole.

Inequality of opportunity
That wouldn’t be so bad, if it were simply a case of hard work and merit allowing those who earned it to rise a little higher than others. But the truth is, your postcode has little to do with hard work and merit, and much more to do with who your parents were. You need only look at a Dublin child of 10 for a few short seconds and you will be able to project the course of their future prosperity, to a shocking degree. The ones with poor skin, screaming at the top of their lungs in public, and with their feet up on the opposing seat of the Luas Red Line train which they ride late at night without either a ticket or parental supervision, will not command decent salaries in 20 years’ time. The truth is, they have zero chance of advancing up the social hierarchy. Conversely the 10 year olds you meet in the Luas Green Line train, en route from their fee-paying private school in Milltown to their violin lessons in Ranelagh are almost certain to succeed, economically and socially. No matter how lazy they are in school or how badly the bow screeches across the strings, come 2036 they will probably be doing just fine.

Of course, I am deliberately picking extreme cases, in order to make my point. In reality there is a spectrum of privilege and disadvantage. Class is a fluid concept. But the observation is more than just anecdotal. A recent study shows that Ireland stands out among its European peers as having the highest intergenerational persistence of low educational attainment and the highest wage penalty for having a father with low educational attainment. In other words: if your dad didn’t finish secondary school, you won’t either. And you probably won’t earn very much money. This is a bit true everywhere, but it’s especially true in Ireland, and – though I haven’t got data – I’d be willing to bet it’s even more true in Dublin.

Does social class really matter?
I’ve sometimes been accused by those who know me well of over-focusing on this issue. After all, can’t we just let class be class? Some people read The Sun, others read The Guardian. Some people spend their leisure time in betting shops, others in art galleries. If that’s what makes people happy, why is it a big deal?

Unfortunately, class is more than just a preference in culture and clothing. It determines the quality and length of life, not only for yourself, but for your children and their children. The OECD indicator below shows this Class Mortality Gap in brutally stark terms:
class-mortality-gap
While there is a wide variation across countries, what the chart reveals is that being middle class (i.e. you went to college) adds about 4 – 8 years to your life, depending on whether you are a man or a woman. This makes the Class Mortality Gap almost as bad as the Gender Mortality Gap. Having the misfortune to be born to socially disadvantaged parents is almost as bad for your health as being born with a penis.

De bleedin’ elephant in de roo-um
What makes the social class phenomenon in Dublin all the more eerie is the absence of meaningful discussion of it as an issue. The liberal commentariat are hardly silent on women’s rights, traveller’s rights, abortion rights, gay rights and just about any other social issue you can think of. Rightly so, you may well say. But on social class, their silence is deafening. It’s the last taboo subject in polite Irish politics. Worse: There’s a myth of classlessness in Irish society that seems to be perpetuated whenever you bring the subject up. Class, so the narrative often goes, is something that happens in England. And even then, the Irish of rank and privilege are most comfortable with it when it appears in BBC period dramas. Best to keep the Irish Sea and a hundred years of history between ourselves and the whole messy business!

Riot at the Fringefest in Merrion Square: The excellent rapper Emmet Kirwan sells working class culture to middle class punters at prices only their accents can afford.
Riot at the Fringefest in Merrion Square: The excellent rapper Emmet Kirwan sells working class culture to middle class punters at prices people with his accent could never afford.

Myself and my equally middle class partner recently went to see a show at a pop-up theatre in one of Dublin’s more middle class gated parks: Merrion Square. In the queue for pre-show food (wraps, don’t you know – one had one’s choice between halloumi and falafel) we conversed politely with our fellow show-goers, using rounded vowels and fully enunciated consonants. Then it was time to filter in to our seats. The show was called “Riot”, an eclectic mix of acrobatics, music and political commentary, featuring Ireland’s most famous drag queen, Panti, who since the Marriage Equality Referendum last year has become something of a national treasure. The politics played very much to the crowd. In between slapstick gymnastic routines and sing-songs, there were frequent called to “Abolish the 8th”, a reference to Ireland’s constitutional prohibition on abortion-on-demand.

But the showstopper was a young artist named Emmet Kirwan. He hails from a working class Dublin area known as Tallaght – a suburb built in the 1970s and 1980s to cope with the overflow from crowded inner city neighbourhoods. Kirwan’s unique blend of the Dublin working class vernacular and hip hop was as electrifying as anything I had seen on stage. With such an overtly political tone to the production, his indisputable talent and the obvious power of the medium to convey just such a message, this was surely the perfect opportunity for Kirwan to cast some home truths into the sea of class privilege upon which he gazed. I was waiting for the lyric: “A boy of three / undernourished and weak / Can’t afford to eat / Cause his ma’ don’t take home in a week / what youz are after spendin’ to sit in dah’ fuckin’ seat”

That lyric never came. Kirwan was happy to bang on about poverty, but he kept the teeth of social disadvantage well away from the manicured hands that were feeding him. The audience took it all in politely, letting out a dutiful cheer whenever the politics of the left-leaning middle class were voiced (pro-choice, anti-Catholic church) But nowhere was there an honest recognition of the dissonance between the culture on the stage which they were happy to expropriate, and the social reality of that culture’s roots, which they and their parents not only avoided at all costs, but in fact were the ultimate authors of.

Choose your parents carefully
If class is so present, such a problem, and yet Dubliners are so unwilling to talk about it, can anything be done? Is there anything more concrete we can offer to young people who’ve already made the mistake of not selecting rich parents before they were born? Or is it just too late? I, for one, think there’s quite a lot that could be done. We could start by looking at how (and in which neighbourhoods) social housing quotas are being filled; taking a hard and honest look at how the State is subsidising fee-paying private schools; looking at thresholds for inheritance and gift tax.

But before we get to concrete policies, the discussion has to start by acknowledging de bleedin’ elephant in de roo-um. Here’s my lyrical contribution:

Dublin is a class-riven city,
And the cost of that is shitty.
We bury are heads in de sand
Makin’ like it was all grand.
Wha’ a bleedin’ pity!