Wednesday 31 January 2007

Government + Gestalt = Gambling is Good For You

In the light of yesterday's decision to ruin Manchester, it is worth looking at one of the processes that occur when big business and the government desire a particular outcome.
Whenever the New Labour government faces awkward public opposition to it's corporate capitalism projects, they utilise experts from the field of academia to produce "independent" reports that are supportive of the government position. Generally, it's economists that produce these consultative documents.
There are several levels that the public should develop a healthy scepticism towards the independence and quality of these reports. The government is merely using Gestalt theory to manipulate the population to accept the government's reality. In Gestalt, the Persuasion Effect indicates that we are more persuaded by a credible source than by a credible argument - it must be true because he is a professor at a university...
Firstly, if individuals are top-notch economists, they do not choose to languish in the decaying world of the universities. Altruistic dismal scientists are thin on the ground and if an individual is skilled, they choose to work in business, in cutting edge think tanks or on the markets. Hence there is a certain level of lowest common denominator to the quality of their research.
Secondly, these reports are rarely produced by the blue chip universities (Oxbridge, MIT, Harvard etc) as much of the research in these establishments is principled and meticulous which are the last inputs that the government requires.
Thirdly, in the privatised world of university education, the same people are often funding the courses as are benefiting from the "independent" reports produced by the academics.
Fourthly, in the words of James Markusen of the University of Colorado "I am confident that I can concoct a model to generate any result desired by a reader with a deep pocketbook". Much of economics is pseudo-science and the rigours that are applied to true scientific research are simply not replicated. Econometrics is particularly prone to producing fallacious nonsense as cause and effect are frequently totally opaque in much econometric modelling.
An anecdote to illustrate this latter point. When I was researching my PhD at the Centre for the Study of Gambling and Commercial Gaming (CSGCG) at Salford University, my tutor was Professor Neville Topham. The government of the time had employed him to produce an "independent" report to prove that house prices inflate by more than average if the houses in question were under the flight paths at Heathrow Airport. Reasonably, I questioned the logic of this assumption - "surely that is not the case" I opined. "No, of course not, but one can prove anything with economics!".