Social Comparison

Rastignac vit Paris et lança sur cette ruche bourdonnante un regard qui semblait par avance en pomper de miel, et dit ces mots grandioses: “A nous deux maintenant”.

Honore de Balzac, le père Goriot, 1835

More than 150 years after his death, Balzac remains the most widely read author in French Literature. The life and passion of some of the two thousand odd characters created in his ‘comedie humaine’ have permeated into popular French culture. His work bears a common thread, that of a Parisian society in which almost everything is governed by comparison, in life and in death. Balzac started to write some twenty-five years after the French Revolution. This revolution brought about a critical change to French society: the possibility for sons of peasants to rise to the highest level of government and society. The expectations that ensued and the changes it brought to the life of ordinary citizens is what Balzac captures so magically. His work is of striking resonance in a place that couldn’t be so distant both in space and time, contemporary Mauritius, some thirty-eight years after its accession to Independence.

An Incredible Force For Good

Nobel economist, Gérard Debreu once said that value is nothing but an element of the set of real numbers. Illustration: the ’suite princière’ at the ‘Prince Maurice’, an exclusive resort on the East coast of Mauritius costs around $10 000 a night, enough to run a small hospital in Afghanistan for a month, to keep 3000 Kenyan children an extra year in school by freeing them from intestinal worm or to feed and shelter one of the two billion least-fortunate inhabitants of this planet for 27 years. Depressing perhaps? Well, yes. But economists have never been so close, as they now are, to answering the fundamental question posed by Adam Smith in 1776. What makes the wealth of nations? And the consequences for humanity are simply staggering.

On Time-Inconsistency and Procrastination

Only Robinson Crusoe had everything done by Friday

 

As a child, I perfected the art of procrastination. Who has never left homework to the last minute, never rushed to the shops on Christmas eve, never tucked the alarm clock under the pillow only to miss the bus to school or to work? Throughout our life, we are torn between the desire the succumb to instant pleasures and our future interests. For long, economists have been at pains to reconcile their assumption of human as rational decision-makers (homoeconomicus) with phenonemon such as procrastination, addiction to drugs and cigarettes, excessive consumption or avarice, to name but a few. Indeed, in mainstream economics, a representative individual is said to decide optimally and do neither of these things. Then came, in 1977, Nobel-prize winners Finn Kydland and Edward Prescott with the notion of time-inconsistency, which raises the possibility of perfectly rational individuals being inconsistent over time in their choices.

The Happiness of a Nation

As nations grow richer, they can afford to question the need for further riches…our instinct is that it would be a mistake in the twenty-first century to focus excessively on ways to raise the level or growth rate of GDP (Blanchflower and Oswald, 2005)

In an attempt to break away from traditional measures of economic development such as GDP levels and growth, the UNDP has been providing since 1990 an annual league table of nations in the form of the Human Development Index (HDI). Nations are ranked according to their capacity to provide an “environment for people to enjoy long, healthy and creative lives”. Hence, high life expectancy, literacy, school enrollment and per capita income are key to achieving a high score.

In a study of 35 countries, Blanchflower and Oswald (2005) challenge this much respected measure of economic happiness of nations. Australia, which came third in 2005 on the HDI count, first among the English-speaking nations, fares badly on many other counts. It has the lowest levels of job satisfaction in the developed world, highest suicide rate among the English-speakers and low level of family satisfaction. Norway, the top dog, reports a 50% divorce rate, and a re-marriage rate of less than 25%. It is time, they say, to find a measure that incorporates the psychological well-being of individuals comprising society.

Janteloven for Elitist Society

“Thou shalt not presume that thou art more than us,” says the Scandinavian author Axel Sandemose in Janteloven, a set of ten laws that rule the imaginary town of Jante. In Scandinavia, grading 10-year old children is the exception rather than the norm. The proposed reform to create star schools to accommodate the first thousand or so of sixth-graders in a national examination in Mauritius would be unimaginable there. Yet, by any standard, their achievements in terms of human capital, technological adoption and innovation, civic, political and social engagement far exceed those of elitist Mauritius. Why then, if we are so keen to nurture the highly-able, do we stop at high-school? Surely, the elite should also be nurtured to produce world-class research in our universities, world-class innovation in our enterprises. And if this is attainable without the early streaming of our children as seems to be the case there, then why not divert our limited resources and energy to this end instead?