Better Plays for Better Lives: The Tempest

Parting is such sweet sorrow
Parting is such sweet sorrow

Today we publish the last article of a summer series in which Kimberley Botwright of the OECD Public Affairs and Communications Directorate looks at OECD work through a Shakespearean lens.

Twelve years before the start of The Tempest, Prospero the Duke of Milan, was usurped by his brother Antonio, with the help of Alonso, King of Naples. Prospero was exiled to an island, with his three-year old daughter Miranda, where he reigns over the spirit Ariel and native resident Caliban, using his magic powers and books. The play opens with a storm conjured by Prospero; designed to shipwreck Antonio and Alonso on his island. After conjuring the storm, Prospero reminds his daughter; “I have done nothing but in care of thee, / Of thee, my dear one, thee, my daughter.” Over the years, the play has taken on post-colonial readings; but it’s also a story about a father trying to secure a better future for his daughter.

Securing a better life for our children, family, society and friends is something some of us might also worry about. The OECD certainly does, judging by its slogan – Better policies for better lives. But what do we mean by better? It’s probably got a lot to do with wellbeing, but how do we measure that? Surely that touches on something too difficult to define, or as Miranda says; “’Tis far off / And rather like a dream than an assurance.”

Fortunately, as part of the OECD Better Life Initiative, (you’ve probably heard about this one), the OECD How’s Life? Measuring Well-Being report presents the first international set of comparable well-being indicators. Better still, the OECD offers an interactive tool called Your Better Life Index where you can rank the 11 different dimensions of wellbeing discussed in the report according  your own personal priorities, allowing you to contribute your voice to the wellbeing debate, not only in English, but also in Spanish, French and Russian.

What would Prospero’s index be? Well, he’d probably give housing a 3/5; exiled on his island he is merely “Prospero, master of a full poor cell,” and laments the loss of his dukedom. But the reason Antonio was able to usurp him was because of his keen interest in studying, “Me, poor man, my library / Was dukedom large enough,” and indeed much of the play revolves around Prospero’s magical “art.” He also stresses his efforts to tutor his daughter, so education would probably rank pretty high, around 5/5.

Given that Prospero almost lost his life before being exiled, uncovers a drunken plot by his slave Caliban, prevents the murder of the faithful servant Gonzalo, and is wary of Miranda being assaulted by either Caliban or Ferdinand, safety would also receive 5/5. Income would be important, around a 4/5, because the spirits of his imagination seek to bless his daughter’s marriage with “honours and riches.”

His control over the spirit Ariel, as well as the elements around the island, “I have bedimm’d / The noontide sun, call’d forth the mutinous winds,” suggests that the environment serves a useful short-term purpose, but he probably doesn’t value it as much in the long-run, so it would be given a 3/5. Jobs would get also get a 3/5, seeing as he’s keen on making all those in his power work (Caliban, Ariel and Ferdinand), but he’s not so much in tune with job security or earnings distribution.

Lower down on his list of priorities would be life-satisfaction, 2/5; he cannot express the same joy as the young lovers, “so glad of this as they I cannot be.” As he spends most of his time orchestrating the plot of the play in order to seek justice for his exile, his work-life balance would be 0/5. Being a recluse megalomaniac, civic engagement would also receive a zero ratings, whilst community would be low – although he seems to get some enjoyment from his small island subjects, so it would receive 1/5. He never really mentions health and is eager for peace in death by the end of the play, “Every third thought shall be my grave”, and so it would also get 0/5.

An interesting part of the BLI Index allows you to compare your priorities with individuals like you in age, gender and nationality. Compared to his fellow Italian males aged 55-64, Prospero’s priorities are close to the average in housing, jobs, education, environment and income, but way off in health, civic engagement and work-life balance. Given his arrangement of priorities, he’d be best off moving to the United States or Switzerland.

Overall, the OECD Better Life Initiative joins an international trend to look “Beyond GDP” as an indicator of wellbeing, into all those dimensions that put life behind the figures. Just as Miranda says to her newfound friend Ferdinand, “Be of comfort: / My father’s of a better nature, sir, / Than he appears by speech,” so we also have much to learn when we use new indicators to examine wellbeing from fresh perspectives.

Towards the end of the play the spirit Ariel reminds Prospero of what it means to be human. Having witnessed the punishment inflicted on Antonio and Alonso, Ariel assures Prospero his heart would be moved if he saw their suffering, “Mine would, sir, were I human.” Prospero, stunned that a spirit has more feeling than him, also sees life from a new perspective. With his daughter happily married to Prince Ferdinand, he turns from revenge to reconciliation, offering his hand in friendship to Alonso, “First noble friend / Let me embrace thine age, whose honour cannot be measured or confined.”

Today, we’re having a good go at measuring the un-measurable; “O brave new world!” So for now, we’ll leave Prospero and Shakespeare, as they bid us farewell –

But release me from my bands
With the help of your good hands.
Gentle breath of yours my sails
Must fill, or else my project fails,
Which was to please.

Useful links

Here’s Prospero’s BLI. Create your own at this link

Prospero BLI

Intuition and ingenuity: Alan Turing’s work and impact

Don't blame Alan Turing
Don’t blame Alan Turing

Legend has it that Apple’s rainbow-coloured logo showing the apple with a bite out of it is in homage to Alan Turing “the father of modern computing”. Turing died of cyanide poisoning on 7 June 1954, two years after being convicted of homosexuality and accepting chemical castration instead of prison. A half-eaten apple was found next to him, and one theory is that he’d laced it with cyanide, his own homage to the wicked queen in Snow White, his favourite Disney cartoon. Another theory is that he died accidentally after inhaling cyanide fumes from apparatus he had in his bedroom for electroplating spoons. A third explanation is that he really did commit suicide, but set up the apparatus so his mother would think it was an accident. The coroner didn’t test the apple for cyanide, so we’ll never know for sure.

If there are doubts about Turing’s death, his life is fairly well-known, or at least some aspects of it. His most noteworthy exploit for the general public was helping to break the code of the Enigma machines the Germans used to communicate with their submarines during the Second World War. If you’d like to get some idea of how he did it, take a look at the excerpts from the “Enigma Paper” in Alan Turing, His Work and Impact, just published by Elsevier. Cryptography is the second of four parts of this thousand-page overview presenting Turing’s most significant works from the four-volume Collected Works along with comment, analysis and anecdote from leading scholars. The other three parts are on Turing’s contributions to computability, artificial intelligence, and biology.

That simple naming of the parts already gives you some idea of the breadth of Turing’s influence, and we could also add economics. I actually got the Elsevier book thanks to Professor K. Vela Velupillai who wrote for us about Turing’s economics here.  That article described the foundations of computable economics, while here at the OECD the project on new approaches to economic challenges was being launched. “New Approaches” revisits some of the fundamental assumptions about the functioning of the economy, and the implications for policy. It also addresses how to extend the capabilities of existing tools for structural analysis and analysing trends over the long term to factor in key linkages and feedback – for example between growth, inequality, and the environment.

Vela cites Turing’s Precept, an idea that should be kept in mind by economic theorists, analysts and policy makers everywhere: “the inadequacy of reason unsupported by common sense”. There’s a corollary to that in how you present the reasoning, best summed up by the German mathematician David Hilbert at the 1900 conference of the International Congress of Mathematicians in Paris. Presenting a paper on 23 unsolved problems that would help set the research agenda for mathematics in the new century, Hilbert quoted an old French mathematician as saying: “A mathematical theory is not to be considered complete until you have made it so clear that you can explain it to the first man whom you meet on the street”. And Turing himself claimed that “No mathematical method can be useful for any problem if it involves much calculation.”

Gregory Chaitin recalls Hilbert’s remark when he presents Turing’s “Solvable and unsolvable problems”, that ends with Turing’s Precept. In this “lovely paper” Turing explains the notion of computability and proves the unsolvability of a decision problem without using any mathematical formalism. His “models” are two puzzles that were popular at the time: a picture made up of a number of movable squares set in a frame, with one square missing so you can move the squares around to form the image; and two pieces of intertwined wire you can separate without bending or breaking them.

That said, much of what’s presented is for specialists and you’d need a good grounding in mathematics to follow it. But there’s still plenty even for a non-mathematician like me, some of it surprisingly moving, for example when Bernard Richards describes how he presented his and Turing’s work on morphogenesis to Turing’s mother shortly after his death. Some of it is intriguing – why does the UK government still refuse to declassify the two 1946 papers “Report on the applications of probability to cryptography” and “Paper on statistics of repetitions”? But no matter how well you know the life and work of Turing, you’ll learn something from this book.

By the way, that Apple story at the beginning is only a legend. Rob Janoff who designed the logo explained that he was asked to come up with something simpler than the (hideous) picture of Newton sitting under an apple tree that was the company’s first logo, and the bite was just to show that it was an apple, not a cherry or a tomato. The gay-friendly rainbow was to advertise the colour graphics capabilities of Apple’s computers. On British TV show QI XL, Stephen Fry recalled asking  his friend Steve Jobs about the Turing story “It isn’t true, but God we wish it were!” was Jobs reply.

Useful links

Models used in the OECD Economics Department

Better Plays for Better Lives: Hamlet

I've seen corruption boil and bubble
I’ve seen corruption boil and bubble

Today we publish the next article of a summer series in which Kimberley Botwright of the OECD Public Affairs and Communications Directorate looks at OECD work through a Shakespearean lens.

When the ghost of the old King of Denmark appears at the beginning of Hamlet, Horatio, once doubtful of ghosts, decides, “This bodes some strange eruption to our state.” In a second (private) appearance to young Prince Hamlet, the ghost King reveals an unvoiced injustice; he was murdered by his brother, (Hamlet’s uncle), who has now married the Queen and claimed the royal title.

As the play unfolds we realise that adultery, fratricide, fathers spying on sons, friends spying on friends, bribery, trickery, and murder are the hallmarks of this society. The only major character that does not display some corrupt tendency is Ophelia, Hamlet’s one-time beloved girlfriend. A pure soul in an impure world, society necessarily destroys her; she goes mad and commits suicide. The church is still prepared to bury her though, (despite suicide traditionally preventing burial on hallowed ground), because she’s from a rich family.

Fortunately, today we don’t need to the appearance of ghosts to make us aware of “some foul play.” The OECD’s CleanGovBiz initiative, launched in 2011, is designed to help governments, business and civil society build integrity and combat corruption. This is done through knowledge sharing events as well as a multi-pronged Toolkit, which brings together relevant work on 18 policy areas from across different OECD departments. Users are provided with priority checklists, implementation guidance, good practice examples, as well as access to tools elaborated by international and civil society organisations.

The tricky part about corruption is that it is not always obvious or easy to detect. Hamlet is all too aware of the difference between outward appearance and inward reality; “That one may smile and smile and be a villain.” Polonius, Ophelia’s father, notes, “’Tis too much proved – that with devotion’s visage / And pious action we do sugar o’er / The devil himself.” Sharp detection is needed to identify all sorts of double-dealing. The OECD offers tools such as a Money Laundering Awareness Handbook.

It is inferred early on in the play that upon Hamlet’s decisions “depends the safety and health of this whole state.” Tools to set healthy governance standards as well as secure effective prevention are critical. Examples include OECD Guidelines for Multinational Enterprises, lobbying principles or Public Sector Integrity Reviews, the latter helping to identify and review areas in government vulnerable to misconduct fraud and corruption.

Follow-up tools are needed to ensure robust prosecution and recovery; when Hamlet’s uncle meditates on his devious actions he wonders whether he can repent but keep his stolen assets (the Queen and the title); “May one be pardoned and retain th’offence? / In the corrupt currents of this world / Offence’s gilded hand may shove by justice, / And oft ’tis seen the wicked prize itself / Buys out the law.” Asset recovery is an important part of the corruption limitation, as is criminalising bribery.

Hamlet’s uncle eventually bribes the Prince’s friends to assist in an assassination plot; but Hamlet suspects their treachery long-before, describing Rosencrantz as a sponge, “that soaks up the king’s countenance, his rewards, his authorities.” Current estimates show that over $1 trillion in bribes are paid annually. The OECD’s Anti-Bribery Convention has established legally binding standards to criminalise the bribery of foreign public officials in business transactions.

Hamlet didn’t have a CleanGovBiz Toolkit and as the play progresses he becomes increasingly pessimistic about society’s integrity, telling Polonius, “Ay, sir: to be honest, as this world goes, is to be one man picked out of two thousand.” When Rosencrantz jokes that “the world’s grown honest”, Hamlet replies, “Then doomsday is near.” Despairing of the rot in human nature he asks Ophelia, “Are you honest?” and then cries, “Get thee to a nunnery. Why wouldst thou be a breeder of sinners?” Never mind that he had formerly promised her, “Doubt truth to be a liar / But never doubt I love.” Even Hamlet is inconsistent in the morally corrupt world that encircles him: he murders four people.

Just before the final disastrous scene where the remaining characters all kill each other, Hamlet converses with a gravedigger and asks him how long it takes a body to rot. The reply sums up society, “I’faith, if he be not rotten before he die – as we have many pocky corpses now-a-days…” Corruption corrodes society; leading to suspicion, deception, violence, and death, or “carnal, bloody and unnatural acts.”

If Hamlet’s end doesn’t convince you, modern estimates suggest that corruption causes a 5% to 10% waste of US Medicare and Medicaid annual budgets; a 10% average increase in the cost of doing business; and 20% to 40% of official development assistance to be stolen. Child mortality rates in countries with high levels of corruption are about one third higher than in countries with low corruption, whilst student dropout rates are five times as high.

Corruption also leads to the breakdown of that flighty yet vital thing we call trust in society. As the OECD tells us, we fight corruption because it “corrodes public trust, undermines the rule of law and ultimately delegitimises the state.” The cost of mistrust is high. The OECD Secretary General has stated in his 2013 Strategic Orientations, “Without strong, smart and trusted institutions our efforts to implement and deliver better policies for better lives will be undermined.” No wonder OECD Forum 2013 was all about Jobs Equality and Trust, where a different Prince reminded us; “If you think about it, 100 does not always equal 100. There is a considerable difference between a group of 100 people full of self-confidence, with trust in each other and good basic skills, and a group of 100 people with low self-esteem, a lack of trust and poor basic skills.” Can we (re)build trust?

When integrity crumbles, trust disappears, society spirals downward and “The rest is silence.”

Useful links

OECD work on bribery and corruption

OECD Forum: Rebuilding Trust

Mass Flourishing: How It Was Won, Then Largely Lost. Part 2

Phelps Mass FlourishingToday we publish the second of two articles by Edmund Phelps, 2006 Nobel Laureate in Economics, Director of the Center on Capitalism and Society at Columbia University, and Dean of the New Huadu Business School at Minjiang University. Professor Phelps’ new book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change, is published this month by Princeton University Press.

The once-dynamic nations lost half or more of their dynamism in the 20th century: Britain and Germany in the ‘40s, France in the early ‘60s and America around 1970. (Any such calculation from productivity data must take into account that nations that had fallen far behind saw their productivity grow faster than their dynamism could provide in the years when they were “transferring” at a great rate the overseas innovations not already copied.) A great loss of jobs and job satisfaction ensued. Innovation was largely narrowed to the impressive “tech” industries.

The resulting dearth of indigenous innovation – unremitting save for the internet build-out – is widely blamed on pathologies in policymaking and institutions. Historians have laid Britain’s decline to rationalization, cartelization and the closed shop – policies sustaining old products and impeding new ones. In France and Italy, entrepreneurs lay the decline to fiscal and regulatory practices – policies discouraging small firms from innovating by imposing tougher employment rules and heavier tax rates if they become medium-size. In America, the success of firms and whole industries hinges on intensive lobbying rather than intensive innovation. In America and Europe, much of a legislature’s focus is on sparing politically favored corporations and cities from the impact of its own legislation and singling them out for pork barrel projects, assistance and loans.

But much of those declines of dynamism are an effect of other forces, not the rise of rent seeking and patronage. My book Mass Flourishing recognizes the many institutions and policies that block innovation – short-termism in big business and finance, for example, under-taxation that has given working-age people inflated perceptions of their wealth and, of course, the minefield of patents and regulatory risks. These are important.

A change in values may be no less important, however. Possibly modern values have waned, reducing the desire to innovate. Or other values have arisen that inhibit or block modern desires. Even rent seeking and patronage is not simply an effect of self-interest in government and the economy: what is in people’s self-interest depends on what people are interested in doing with their lives – on their various values. Neoclassical economics hews to a purely materialist view of what self interests are. So the neoclassical model of endemic rent seeking and patronage developed by Mancur Olson supposes that the only value in which people have an interest is material wealth. Entrepreneurs, owners and labor organizers are “in it for the money,” not for creating, exploring and personal growth.

The heavy loss of dynamism in the West can be laid to two destructive tendencies that have crept into value systems. The first of these is the attitudes hostile to the methods of the modern economy. In continental Europe, of course, there was opposition to capitalism long before modern times. And since the economies of dynamism were built on capitalist institutions created in the course of mercantile capitalism, the attacks on capitalist institutions had the unintended and perhaps unanticipated effect of weakening dynamism. The Continent’s once-dynamic nations, then, had only a tenuous hold on dynamism from the start.

Socialists’ attitudes were influential on the Continent by the 1910s. They had a horror of company profits and sought to nationalize some companies or curb their profits or redistribute them from shareowners to stakeholders. In the interwar years the belief arose that it was wrong for a company to downsize its workforce if it was making a profit. Schoolbooks in postwar France and Germany disparaged capitalists and reviled bosses as stooges. Such hostility scared off innovators and tarnished the idea of innovating.

Corporatist attitudes against capitalism came to the fore in the 1920s. Corporatists, with their conservative values, hated the invasion of towns and regions by new businesses, upsetting traditional ways, wealth and status. They hated new money with a particular vehemence. Their objective in Italy, Germany and eventually France was control of private enterprise – not private ownership. An axiom of capitalism – that capital should go where entrepreneurs and financiers expect it to be profitable – was replaced by the corporatist tenet that the state would know better.

Corporatists also hated the individualism present in modern values. For them, the good was the good of the nation. People who would have tried to be innovators for the thrill, fame, fortune or fun of it did not fit in. That dynamism would suffer from these conservative values did not occur to the corporatists, who thought their system would increase dynamism.

Europe in the 1960s and America soon after became devoted to a kindred set of traditional values: solidarity, social protection and security. These values gave rise to a vast canvas of entitlements. No disincentive to work would have resulted had they been fully funded, but they were generally under-funded. The reductions in labor force and output at home and abroad shrank the available market for innovations. These values also gave rise to thickets of regulation impeding or barring innovation.

Is there any hard evidence that these values harm dynamism, making jobs less satisfying? The book’s chapter on statistical research finds that a prevalence of modern values is conducive to job satisfaction. What of a prevalence of the conservative and traditional values? A basic level of these values may be a safety net, encouraging some innovation. However, nations scoring high in traditional values tended to score low on job satisfaction. (How then can Israel be dynamic despite deep traditions? Perhaps most Israelis are not tightly confined by them. The issue was debated on “Goldstein on Geld,” Israel Radio, July 30, 2013.)

The second destructive tendency is a movement away from the modern notion of the good life – the notion glimpsed by Aristotle and given shape in the Modern Era – and toward a reversion to materialism, however well-intended. Increasingly American attitudes exhibit the same drift away from the creation and discovery of the new, which Lincoln exclaimed over in the 1860s. Students go into banking, not business. A fixation on making money was widely noted in the 1920s. Now it has become a widespread sickness. Under-saving has become self-destructive. Materialism has turned into greed. A survey of the financial community by a New York law firm found that 38 percent of respondents said they would commit insider trading for 10 million dollars if it could not be detected.

It is thought by many Americans and Europeans that the modernist conception of the good life is specific to America. After I spoke of people’s need for that sort of life at a 2003 conference, Ralph Gomory said “that view is very American.” I replied that my understanding of the good life came from Europeans: Cellini, Cervantes and Bergson.

Serious thinkers in both Europe and America, though not exactly materialist, have drawn away from the modern conception of the good life, hence the good economy. In the 1920s John Dewey saw a good job as a mental workout offering problem-solving – not a springboard for exercising creativity and voyaging into the unknown. In 1943 Abraham Maslow wrote of self-actualization by which he meant the realization of a person’s predetermined potential – not Bergsonian “becoming.” Amartya Sen’s capabilities is in this spirit.

Now we find a full embrace of materialist thinking even at a high level. The 2009 Report of the Commission on the Measurement of Economic Performance and Social Progress, while devaluing one materialist measure, namely production, upholds other measures of material well-being – household wealth and income, time away from work, and longevity. They include nothing on non-material experience.

These formulations overlook the world of creation, exploration and personal growth. Gone is the conception of the good life as a wild ride through an economy with an open future, an economy offering challenges with unimagined rewards. In this climate, young people are not likely to grow up conceiving the good life as a life of Kierkegaardian mystery, Nietzschean challenge and Bergsonian becoming.

My research in the past 10 years leads me to believe that regaining mass flourishing will require a new and major public effort. While the government will have to be smaller in some respects, it will have to be bigger in others. The effort will necessitate large subsidies aimed at employing low wage labor. But mechanical corrections and repairs will not be remotely sufficient. The effort will succeed only with a broad restoration of grassroots dynamism. That will require clearing away the barriers to innovation that have grown up in recent decades. Above all, it will require Europe and America to reconquer the medieval demons that regained influence over the past century and to reaffirm the individualist and vitalist values that were fundamental to the dynamism of the West’s brilliant past.

Useful links

Edmund Phelps interviewed by CNBC

OECD work on innovation

OECD Better Life Index

Mass Flourishing: How It Was Won, Then Largely Lost

Phelps Mass FlourishingToday we publish the first of two articles by Edmund Phelps, 2006 Nobel Laureate in Economics, Director of the Center on Capitalism and Society at Columbia University, and Dean of the New Huadu Business School at Minjiang University. Professor Phelps’ new book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change, is published this month by Princeton University Press.

The epic story of the West is the development in the 19th century of a mass prosperity the world had never seen and its near-disappearance in one nation after another in the 20th. Mass Flourishing is a history linking this story to the rise and fall of homegrown innovation. It is also a text on the nature and sources of prosperity. It has two components. The material part is growth of productivity and wages. The non-material part is flourishing – successful exercise of creativity and talents. To flourish people have to engage a world of challenges and opportunities. The economy’s dynamism and the resulting experience of business life are central to our wellbeing.

Mass prosperity came with the mass innovation that sprung up in 1815 in Britain, soon after in America and later in Germany and France. It brought sustained growth to these nations – also to nations with entrepreneurs willing and able to copy the innovations. It also brought flourishing to large and increasing numbers of people – mass flourishing. There were experiential benefits: routine work, dull and lonely, gave way to careers that took twists and turns and jobs that were rewarding. There were also developmental benefits: As people used their imagination to create new things and their ingenuity to meet challenges, they found self-expression, self-realization and personal growth in the process.

What brought mass innovation to a nation was not scientific advances, its own or others’, but economic dynamism: the desire and the space to innovate. The nation had to cultivate the right drives, build the needed institutions and not throw up barriers. High dynamism brought a high rate of innovation under decent market conditions, and, barring a string of bad luck, the ideas it conceived and tried out. America enjoyed the richest flow of innovations in part because working people in all kinds of jobs were conceiving and pursuing new ideas – grassroots dynamism. From the 1830s to the early 1960s Americans were in a frenzy of creating, tinkering, exploring and testing – gripped by a “rage for the new” in Lincoln’s phrase.

The impetus for high dynamism, my book argues, was the modern values arising in Jacques Barzun’s Modern Era – roughly from 1490 to 1940 – particularly the values we associate with individualism and vitalism. They include thinking for oneself, working for oneself, competing with others, overcoming obstacles, experimenting and making a mark. The courage to express one’s self by creating or exploring the unknown and the gumption to stand apart from community, family and friends are also modern values. Many of them have known authors: Pico, Luther, Montaigne, Voltaire, Hegel, Kierkegaard, Nietzsche and Bergson. Hegel speaks of “acting on the world” and Bergson of “becoming.”

The thesis is that these values stirred a desire to flourish; they shaped a modern conception of the life to aim for – the good life. A prevalence of these values in a nation tends to generate an economy that offers work gratifying those desires – an economy that delivers flourishing.

The thesis can be tested. A measure of a nation’s flourishing is the reported job satisfaction in household surveys. Interviewee responses to questions about what they look for in a job suggest a measure of the prevalence of modern values. If the thesis is right, we should expect that a people embracing modern values will forge careers and seek jobs that are interesting, involve initiative, offer change and present challenges such as competition. The book reports the finding that nations scoring high in these modern attitudes do tend to score high in job satisfaction. They build economies with the dynamism to deliver the jobs that satisfy them.

This finding suggests that people get the institutions that enable the careers and jobs they want, to a degree, at any rate, and getting them may take a long time. Institutions and government have a role, even if they explain little when attitudes are taken into account. Modern values, if strong, ensure there will be a popular demand for the individual rights that make it possible to innovate and to earn a living in innovative ventures. It might be thought that modern values are not a necessary condition for high dynamism. It is true that some of Britain’s freedoms pre-date the Modern Era, for example, the rights proclaimed in the Magna Carta of 1215. But that document was more a symbol than a binding constraint on the ruler until the late 1600s, when it came into play as a foundational document on rights.

In the high noon of the Modern Era, some nations where values were prevailingly modern went from mercantile economies to modern economies – the first economies of dynamism. They helped large and growing numbers pursue the good life.

Useful links

Edmund Phelps interviewed by CNBC

OECD work on innovation

Better Plays for Better Lives: Love’s Labour’s Lost

O this learning, what a thing it is!
O this learning, what a thing it is!

Today we publish the next article of a summer series in which Kimberley Botwright of the OECD Public Affairs and Communications Directorate looks at OECD work through a Shakespearean lens.

Last week, we spoke about the importance of skills and education for tackling youth unemployment. Love’s Labour’s Lost offers some useful pointers in this area too. The play begins with Ferdinand, the King of Navarre, encouraging his three companions to join his “little academe:”

“You three, Berowne, Dumaine and Longaville,
Have sworn for three years’ term to live with me,
My fellow-scholars, and to keep those statutes
That are recorded in this schedule here.”

Naturally, one of the companions, Berowne, protests. He wants to know what the point of all this fastidious studying is: “What is the end of study, let me know?” Doubtless, you may have felt the same way at some point in your educational career. So you’ll be pleased to know that the OECD Skills Strategy emphasises that all that effort wasn’t wasted and skills are the “global currency” of the 21st century.

But it is important to develop the right skills, least we cry out like the tiresome schoolmaster of the play, Holofernes, “O thou monster ignorance, how deformed does thou look!” He is speaking about a character named Dull, who “hath never fed of the dainties that are bred in a book. He hath not eat paper, as it were. He hath not drunk ink.”

The OECD’s Programme for International Student Assessment (PISA) can help us test the standard of reading, mathematical and scientific skills taught in schools around world by measuring the competencies of 15-year-olds. And when some 25% of firms in OECD countries are concerned about the availability of adequately trained workers, it is also important to establish an education system that gathers intelligence on the demand for future skills, so that what is taught is relevant.

Holofernes actually turns out to be the dullest person in the play, with his outdated expressions rendering him incomprehensible (and amusing). As Berowne says “So study ever more is overshot. / While it doth study to have what it would, / It doth forget to do the thing it should.”

Berowne also complains that the King is too old to pursue further learning, “So you, to study now is too late.” The double-irony of this line is that there is much the companions still need to learn, and not all of it is to be found in books – “learning that occurs outside the formal learning system” as the OECD’s Education Directorate says.

Understanding the level and distribution of skills in adult populations is the key to our modern economies, because as well as economic growth, skills affect social trust, political engagement, and health. The OECD’s Programme for the International Assessment of Adult Competencies (PIAAC) will publish data and analysis on adult learning in October 2013. The study will also highlight international patterns on adult learning, which can then be used to remove barriers to investing in further skills-development.

This is important when, depending on the country, between a third and two-thirds of the adult population lack the minimum core skills necessary to engage in further learning and function in modern economies. With rising long-term unemployment among migrants, particularly in the EU, policy measures such as language and professional training, as well as a focus on youth migrants, can make a real difference.

Once skills are developed, ensuring skills supply to the labour market is the next step. By Act II of the play, the Princess of France and her three ladies arrive in Navarre on a diplomatic mission. Instead of offering the appropriate welcome to his court, the King bids the Princess to camp in a field. We warned you that there was a lot he still needed to learn, although he may simply have forgotten courtly manners he learned as a boy but never practised. Unused skills atrophy over time, making it more difficult for people who have been out of the workforce to get back in.

Participation rates can be improved by providing affordable childcare services, as well as reforming tax systems that make work economically unattractive. Employers, trade unions, and government should work together to design more flexible working conditions, in order to make the most of a talent pool that includes people with care obligations or individuals with disabilities. A recent OECD paper notes that women’s average earnings from self-employment are up to 60% lower than men’s, citing obstacles such as cultural norms, stereotypes, time shortages and the composition of their professional network.

Finally, ensuring good skills use is also necessary, by supporting employers to make better use of employees’ skills, helping the young gain a foothold in the labour market and fostering entrepreneurship. As the Princess notes, “We are wise girls.” but the King and his companions, for all their love-sonnets and wit, fail to impress her and her ladies. Berowne comments, “Here stand I lady, dart thy skill at me” and concedes, “O, never will I trust to speeches penned, / Nor to the motion of a school boy’s tongue.”

This is ultimately a play that interrogates definitions of learning. The men eventually learn the importance of soft-skills. The Princess initially flatters the King; “I am too sudden-bold: / To teach a teacher ill beseemeth me,” but by the end, it is the King who begs the Princess, “Teach us, sweet madam, for our rude transgression some fair excuse.”

Interrogating what skills we want for today, for tomorrow, and how we are going to go about teaching and harnessing those skills also requires definition and redefinition, particularly in a fast-moving world; “Education is increasingly expected to develop new ways of thinking, involving creativity, critical thinking, problem-solving and decision-making; new ways of working, including communication and collaboration; new tools for working, including the capacity to recognise and exploit the potential of new technologies; and, the capacity to live in a complex world as active and responsible citizens.”

Alternatively, we could eat paper and drink ink.

Useful links

OECD work on skills

OECD educationtoday blog

OECD Insights Human Capital by Brian Keeley


Good jobs, bad jobs

There's bad jobs everywhere these days
There’s bad jobs everywhere these days

If you’re relaxing on the beach – and we hope you are – work may be the last thing on your mind. But once you shake the sand off your feet and head back to the “real” world, you may be struck by the flurry of depressing stories about jobs.

Take, for instance, “zero-hours” contracts, which are causing controversy in the United Kingdom. Workers on these contracts receive no guarantee of regular work or pay; instead, says the BBC, they “only work as and when they are needed by employers, often at short notice”. According to some estimates, as many as a million workers may be on zero-hours contracts in the UK, employed by everyone from Buckingham Palace  to McDonald’s.

Some workers undoubtedly like the flexibility of these contracts; others feel exploited, especially when their contract bars them from working for anyone else, a point acknowledged by British business minister Vince Cable: “Where it is a problem is … where there is an exclusive relationship with a particular employer who actually cannot provide stable employment, or indeed any employment, that stops the worker going to another company.”

Concerns about job quality aren’t restricted to the UK. Late last month, thousands of U.S. fast-food workers went on strike to protest against low wages and there have been similar actions in New Zealand. Nobody ever flipped burgers to become a millionaire, but in the past that didn’t matter so much: Fast-food jobs were mostly for teenagers or part-timers, most of whom didn’t hang around for long. That’s no longer the case, as James Surowiecki recently pointed out: These days, “more [low-wage workers] are relying on their paychecks not for pin money or to pay for Friday-night dates but, rather, to support families.”

These stories can be seen as symptomatic of what some argue is a hollowing-out of the workforce between high and low-skilled jobs. Many of the secure and reasonably paid jobs that used to sit in the middle are vanishing, victims, in part, of technological change. According to consultants McKinsey, about half of the face-to-face service jobs that people once took for granted  – bank tellers, travel agents, typists and so on – no longer exist. That, in turn, is helping to fuel the income gap in our societies (although it should be noted that other factors – such as the decline of unions and changes in taxation –also play a role).

Of course, this isn’t the first time that technology has destroyed jobs – remember the Luddites. But, historically, each wave of technology also created new types of jobs – think of app developers, social media strategists and (if you can bear the thought) “chief listening officers”. On balance, the gains have outweighed the losses, which is part of the reason why our societies have tended to become wealthier over time.

But will this pattern continue? Not everyone is convinced. At the Massachusetts Institute of Technology, Erik Brynjolfsson and Andrew McAfee argue that the balance has begun to tilt: “They believe that rapid technological change has been destroying jobs faster than it is creating them,” reports David Rotman. They also believe that the rewards from work are increasingly divided between winners and – for want of a better word – losers: “Someone who creates a computer program to automate tax preparation might earn millions or billions of dollars while eliminating the need for countless accountants,” writes Rotman.

To be sure, the idea of making this link is not new, and it features strongly in research by the OECD, the IMF (pdf) and many others. Indeed, it was identified as far back as the 1970s by the economist Jan Tinbergen, who argued that the way incomes were distributed across society reflected in part a “race between technology and education”. When technology was winning, more rewards went to fewer people; when education was winning, more people were able to make use of technology in their work, and the rewards were spread much further.

At the moment, technology seems to be winning, which is one reason why you hear so many calls for more investment in education. But the MIT researchers seem to go further, arguing that today’s technologies and “digital versions of human intelligence” may prove to be permanent game changers: “I would like to be wrong,” Andrew McAfee says, “but when all these science-fiction technologies are deployed, what will we need all the people for?”

Useful links

OECD work on income inequality and skills