Some truths about arms dealing

The Eurofighter Typhoon is the second most exp...

Eurofighter Typhoon (Photo credit: Wikipedia)

The Economist has published an extensive article about “offsets”, the side deals that are made to grease the wheels of the international arms trade.  We all know that outright bribery has been, and perhaps still is, commonplace in the world of arms dealing, but no one would argue that is a legitimate practice.  By contrast, offsets are legal: in order to win a contract to supply weapons to a nation state, an arms company may be required to make a sizeable investment in some unrelated, civilian project in that country.  For example, Raytheon had to set up a shrimp farm in Saudia Arabia, while cash from various arms companies has funded a gas pipeline and residential beachfront property development in the UAE.  Such offsets can be worth billions of dollars.

One truth then (the one the parties involved like to publicize) is positive: arms companies are helping to build the civilian infrastructure of developing countries; indeed, the procurement officials and ministers making the deal can truthfully claim to have attracted substantial foreign direct investment to their country.

On the other hand, it would be naive to think that arms companies are simply giving this money away.  It is a cost of doing business with certain countries, and it is undoubtedly factored into the pricing for those countries.  The bill is passed on to the customer.  According to the Economist, “Politicians and officials in procuring countries know that they are paying the bill through padded prices, but they accept this because offsets give them some grand projects to trumpet and sometimes provide palm-greasing opportunities”.

So the alternative truth is this: the procuring nation (sometimes quite a poor nation) is in fact stumping up the cash for investment into its own development projects, while the arms seller gets the credit (and the arms deal).

This might not be all that terrible, so long as the projects receiving investment are worthy of taxpayers’ money.  But who chooses them?  Might they be pet projects of the procuring minister/official?  Might they benefit some business interest of the procurer?  Might some financial incentive be offered to choose one project over another?  The opportunities for corruption are rife in such a system.  Various cases of not-quite-outright-bribery being dressed up as offset deals are currently being reviewed by prosecutors, including one involving EADS selling Eurofighter planes to Austria.  And the outcomes are, it seems, frequently poor.  That Saudi shrimp farm went bust.


Rebellious MPs

Philip Cowley, Professor of Parliamentary Government at the University of Nottingham, has been studying what the public want from their MPs.  One important attribute is independence from the party line, as demonstrated by their tendency to rebel in parliamentary votes.  Through survey experiments, he has found that:

  1. the public like MPs who have “rebelled in 10% of votes”, and
  2. the public do not like MPs who are “loyal in 90% of votes”.

Two solid truths, derived from sound survey data, that are mutually contradictory: those who rebel 10% of the time are of course loyal 90% of the time.  These occasionally rebellious MPs are simultaneously liked and hated by the same people for the same behaviour.  The consequences, in terms of their re-election prospects, could be profound.

MPs need to choose their truths carefully on the doorstep.

The Doors of Perception

Ray Manzarek is dead.  The band he co-founded was named, via an Aldous Huxley title, after a line from William Blake:

If the doors of perception were cleansed every thing would appear to man as it is, infinite. For man has closed himself up, till he sees all things through narrow chinks of his cavern.

With shades (or shadows?) of Plato’s cave, this quote has a lot to say about how we shape our reality.

Honest Google

Today on the BBC’s World at One, Margaret Hodge, the chair of the Public Accounts Committee, was asked repeatedly whether Google had misled Parliament about its UK corporation tax liability.  Although Hodge had spent part of the morning interrogating Google’s north Europe chief, Matt Brittin, and had even gone so far as to say “I think that you do do evil”, she was not able to give a straight answer.

This is interesting because Hodge and the PAC are on a mission to prove that the corporation tax Google pays in the UK (just £3.4m last year) is far less than it should be, something Brittin denied at a previous appearance before the committee.  So why couldn’t she call him a liar?

Presumably because she knew that, in strict legal terms, he was telling the truth.

We shouldn’t be surprised if Google, a company well endowed with big brains and clever lawyers, is ultimately found to have obeyed the letter of the law and the UK tax code as it currently stands.  In fact it would be astonishing if it were otherwise.  The trick seems to be that they do all the hard work of “marketing” advertising services in the UK, then at the last moment hand the phone, as it were, to a bloke in Ireland who books the business.  The sale takes place in low-tax Ireland, therefore Google is not liable for UK corporation tax on the transaction.  In all likelihood it is true that Google is paying the right amount of UK corporation tax.

And yet there are competing truths, are there not?  The kinds of truths that rile the British Public and fire Ms Hodge with the kind of missionary zeal that leads her to label the behaviour of a major corporation as “devious, calculated and, in my view, unethical”.  We all know that Google makes a great deal of money in the UK (£3.2bn last year), that it employs 300 UK staff (many of them earning hefty sales commissions, according to whistleblowers) to persuade UK advertisers to place adverts on Google UK to sell things to UK consumers.  And it may not be a legal truth, but it is certainly a moral truth and a common sense truth that says that all that UK economic activity should be taxed in the UK.

Google is telling the truth, I’m almost certain.  One of them, anyway.

More from the Guardian

Postscript: this legal truth is just a small part of a much larger set of truths Google has constructed to minimise tax worldwide, involving the Netherlands, Bermuda and some clever intellectual property ownership games.  More from the Independent and Bloomberg.  The truth is, Google is playing by the rules, such as they are, and in minimising its tax burden is meeting its fiduciary responsibilities to its shareholders.  Another truth is, they — and many MNCs like them — are getting away with scandalously low tax remittances to the countries on whose infrastructure they depend.

How advertising shapes reality

Advertisements are powerful truths. They tell us what is desirable, what is acceptable… what is normal. The stories and characters they depict are of course usually fictional, but they would not have the commercial impact they do if we did not accept their cultural messages as truths of a sort.

This creative video considers how reality might be different if the ads were different. A neat thought experiment in multiple truths and their far-reaching consequences.

What is a paedophile?

Last week a highly experienced barrister and expert in reproductive rights suggested that the age of consent be lowered to 13.  Barbara Hewson makes various arguments which, not being a lawyer, I won’t attempt to summarise, and with which I don’t necessarily agree.  However I respect any expert’s considered opinion, and given the current moral climate this is a brave one.  So it was a little depressing to witness the inevitable backlash, with so many less informed commentators declaring that Ms Hewson was, in effect, an apologist or even an enabler for paedophiles.

The word “paedophile” carries so much baggage now, it’s worth taking a cold, objective look at it and sorting through some of the competing truths that surround it.  What does it actually mean?

Its origins are Greek: pais (child) and phileō (I love) — “lover of children” perhaps.  Most parents are that, so we’ve clearly strayed a long way from the etymological roots.

How about the dictionary definition?  Collins has it as “a person who is sexually attracted to children”.  Not very useful — this could include other children of the same age.  What 15 year old is not sexually attracted to some other 15 year old?  Chambers is better: “an adult who is sexually attracted to or engages in sexual activity with children”.  But this definition could make many an adult nervous — some remarkably beautiful teenagers are paraded daily on TV, whom plenty of adults might find sexually attractive even though they would never dream of acting on that attraction.  And after all, what are “children”?  The NSPCC, the UN Convention on the Rights of the Child and the Department for Children, Schools and Families all seem to define children as “anyone who has not yet reached their 18th birthday”.  Were all the many men who were sexually attracted to the 17-year-old Britney Spears in that memorable …Baby One More Time video in fact paedophiles?

This matters in the world of multiple truths because dictionary definitions are among the most solid of our truths.  Is the Collins definition an untruth just because it differs from the Chambers definition?  Can we pick and choose our dictionary definitions to suit our politics and proclivities?

Lets try a different definition: most medical and psychiatric texts define paedophilia as an abnormal, usually sexual, interest in prepubescent children.  A bit more specific, but what does “prepubescent” mean?  According to the NHS, the average age for a girl to commence puberty is 11; for a boy it’s 12.  But it can be anywhere between 8 and 14.  Puberty lasts up to four years for girls and up to six years for boys.

All these numbers present plenty of opportunities for competing truths to proliferate.  If you take “prepubescent” to mean “before puberty starts”, and you’re concerned with the average case, then only those adults targeting children under 12 are paedophiles.  Hence, Ms Hewson’s recommendation would be of no comfort to them.  If, on the other hand, you define “prepubescent” as “before puberty is complete”, and you’re concerned to protect every last “child”, then you might view someone taking a sexual interest in a not-quite-mature 19-year-old man as a paedophile — even if that person is younger than their “victim”.

Clearly, law-makers have to strike a balance, and the UK’s Sex Offenders Act 1997 defines paedophilia as a sexual relationship between an adult over 18 and a child below 16.  That’s a legal truth it behoves us all to respect whilst subject to UK law.  But we should at the same time recognise it for what it is: an arbitrary line in the sand.  After all, the age of consent in Germany and Austria is 14.  In Spain it’s 13.  Who’s to say we have it right?  For some US states it’s 18.

To complicate matters, a man reviled in Britain as a paedophile today might have stood as a respectable bridegroom in Victorian times. The age of consent was set at 13 in 1875, even though the average age of puberty for girls was then 15.

So whether or not a person is a paedophile depends on both the country and the time in which they live.  There is little objective truth in paedophilia, however horrendous the crimes of predators like Jimmy Savile.

It’s also worth remembering that attitudes towards paedophilia have changed radically in our lifetimes.  In Latin! or Tobacco and Boys (1979), national treasure Stephen Fry was able to write warmly and wittily about a school teacher whisking his 13-year-old pupil/lover off to Morocco, and similar man-boy relationships appear in his later novels.  No one seemed to worry about the child brides of James I (14 years old), Charles I (13 years old), Henry IV (12 years old) or Richard II (6 years old).  And no, I’m not condoning any of this… I’m just noting how moral truths change over the years.

Given how complicated it is to define even its terms, it’s not surprising that the paedophilia debate has grown so ugly and confused.  Pick your truth carefully: it could put someone in prison for a very long time.

This Guardian article explores the subject further

When is a recession not a recession?

The Office for National Statistics has suggested that the UK may not, after all, have suffered a double-dip recession last year.  Revised construction industry data, showing a slightly smaller contraction in Q1 2012 than previously estimated, boost overall “growth” for that quarter to 0%, rather than the 0.1% contraction originally recorded.

This tiny shift in the data has monumental importance.  The UK has now not technically been in recession since mid-2009 (a recession is defined as two successive quarters of negative growth).  There hasn’t been any growth to speak of, but a flat economy is a very different psychological deal to one that seems to keep contracting.  It’s not hard to imagine your prototypical business manager choosing to continue business as usual (including hiring and investing) in a flat economy, where repeated recessions might scare him into undue caution.  Multiply that effect across the whole country, and you can see how the double-dip story we’ve been living for the last year might have markedly damaged real economic growth.

On one level, we can see this as a problem of truth v. untruth, rather than competing truths: the data was wrong, therefore the double-dip story was an untruth.  However, the real issue is one of scale.  Macroeconomic statistics are far too imprecise to be dealing in such small fluctuations.  As Stephanie Flanders, the BBC Economics Editor, reminded us today, economists use decimal points to prove they have a sense of humour.  A shift in an estimate of 0.1% should not be this meaningful!

So we have one truth, which is the honest, considered decimal-pointed estimate our best macroeconomists can give us, quarter-by-quarter.  This shows tiny increments of growth and contraction, and may justifiably lead us to declare double- or even triple- dip recessions.  And we have another truth, taking perhaps a more realistic degree of approximation, that declares the UK economy has been basically flat for four years.

Both truths are valid, but their effects on business confidence could be poles apart.  Perhaps it’s time for our politicians and media to start ignoring the decimal-pointed estimates in favour of a different truth that may serve our economy rather better.