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Chris Grey decries the stupidity of Brexiters:
So insular has the discussion in the UK been before and since the referendum that one might think that Brexit is simply a matter of the UK formulating its demands.
What's going on here is a specific example of a more general error. It's what David Navon has called egocentric framing – a tendency to see problems only from our own point of view rather than to put ourselves into others' shoes.
We've all been stuck in traffic on a motorway and changed lanes only to see a few minutes later than the lane we left is moving faster. The mistake we make in those cases is to forget that other drivers are trying to solve the same problem as us with the same evidence and so make the same choices – thereby adding to congestion.
Investors make the same mistake. One of the best-attested stock market anomalies is the tendency for newly-floated shares to fall (pdf) in the months after being issued. A big reason for this is that buyers don't put themselves into the seller's position. They see what looks like an attractive business but fail to ask: if this company is so good, why is the man who knows most about it willing to sell? Simply asking that question would save people money.
The same thing is true in games. When I play chess, I find that I do better if I put myself into my opponent's position, and ask: what moves is she planning? What weaknesses trouble her?
It's common for intelligent people to regard Brexit negotiations as an exercise in game theory. And they're right. But the essence of game theory is to think yourself into the position of the other party. That means doing the precise opposite of egocentric framing.
Doing so is doubly beneficial.
For one thing, it gives us insights into what the other party wants and what they are willing to trade. It leads to some of the principles set out by Fisher and Ury in Getting to Yes (pdf): separate the people from the problem; focus on interests not positions; and invent options for mutual gain.
For another, putting yourself into the other person's shoes will lead you to act like him, or at least give off cues that you're like him. This will lead to better results simply because people tend to be more generous to those who are like us in some way. Some researchers have found that waitresses who repeat customers' words earn bigger tips (pdf) than others. And other experiments have found that mimicking (pdf) the body language of your interlocutor can improve the outcome of negotiations. As the authors of that latter study say:
Mimicking can be a highly effective tool in negotiations. Negotiators often leave considerable value on the table, mainly because they feel reluctant to share information with their opponent due to their fears of exploitation. Yet building trust and sharing information greatly increases the probability that a win–win outcome will be reached…Our research suggests that mimicking is one way to facilitate building trust and consequently, information sharing in a negotiation. By creating trust in and soliciting information from their opponents, mimickers bake bigger pies at the bargaining table, and consequently take a larger share of that pie for themselves.
But Brexiters are doing the exact opposite of this. Little Englanderism, the assertion of our specialness and the imbecilic antics of Johnson all serve to create a distance between us and the EU, when we should be seeking to minimize that distance. As Chris says, "every screaming headline and every bellicose punch-drunk interview from a Brexiter politician damages us more."
And here, my patience runs out. Yes, government is a tricky business in which mistakes are inevitable. But we've a vast body of research which warns us of those mistakes, and which should equip us to at least avoid the obvious errors. The Tories, however, don't seem able to do even this. The idea that they are best able to negotiate Brexit is not obviously founded in evidence. There's more to negotiating than making strident demands.
A sweeping measure that would establish government-run universal healthcare in California cleared its first legislative hurdle Wednesday as scores of supporters crammed into the Capitol to advocate for a single-payer system.
The Senate Health Committee approved the measure on a 5-2 vote after a nearly three-hour hearing, but Democrats and Republicans alike signaled unease with the major question still unanswered in the legislation: how the program would be paid for.
The bill, SB 562, would establish a publicly run healthcare plan that would cover everyone living in California, including those without legal immigration status. The proposal would drastically reduce the role of insurance companies [1]: The state would pay for all medical expenses, including inpatient, outpatient, emergency services, dental, vision, mental health and nursing home care.
The measure says the program would be funded by "broad-based revenue," but does not specify where that money would come from.
"How can we go forward with this bill without a fiscal analysis, a detailed financing plan?" asked Sen. Janet Nguyen (R-Garden Grove).
Sen. Ricardo Lara (D-Bell Gardens), a coauthor of the bill, said a detailed financial study would be completed in May, before the bill is heard in the Appropriations Committee, a key fiscal panel.
"Sen. [Toni] Atkins and I are not just going to do this on a whim," Lara said, referring to his coauthor, a Democrat from San Diego. "We want to make sure it's sustainable."
With the significant unanswered question of funding still looming, lawmakers turned their focus to the implementation of such a system, with ideas including the use of electronic health records and securing waivers from the federal government to administer Medicare and Medi-Cal funds.
"Because I ask questions about how we operationalize the bill, it should not call into question my commitment to healthcare for all," Sen. Holly J. Mitchell (D-Los Angeles) said, emphasizing that her inquiries were on "the issue of how we get it done."
[2]
Supporters of the bill turned out in force at the Capitol, many wearing red shirts identifying them as members of the California Nurses Assn., a powerful labor group sponsoring the bill. Other labor groups, including the California Labor Federation, and consumer groups also backed the effort, as well as members of the grass-roots Our Revolution group inspired by the 2016 presidential campaign of U.S. Sen. Bernie Sanders (I-Vt.).
A wide array of business groups opposed the measure, including health insurers, manufacturers and the California Chamber of Commerce, which called the bill a "job killer."
The hearing came on the heels of a fact-finding trip to Canada by Lara, who, who along with two other Democratic senators met with health officials in the provinces of Ontario and Quebec to learn about their single-payer healthcare systems.
In an interview, Lara described how his spring break trip to Canada helped inform his views on public healthcare. He said his Canadian hosts acknowledged their healthcare system was not perfect, pointing to long wait times to see specialists as a legitimate concern.
But other fears, such as whether public healthcare would dampen research and innovation, were assuaged by a visit to a high-tech cardiac center in Toronto, he said.
"It was refreshing for me to see that … under a public system that research and state-of-the-art facilities and care can also exist," Lara said.
None of the Canadian experts warned the senators away from pursuing a single-payer plan, but they recommended a cautious approach, Lara said, particularly when it comes to deciding at the outset what type of care would be covered under the public plan.
The advice was to "be very diligent and thoughtful in terms of what you're going to offer — because once you offer it, you can't take it away," Lara said. They also advised looking to other models — not just Canada's — in crafting a plan for California. Lara said he intends to examine Taiwan's healthcare system, as well as Maryland's "all-payer" system, in which all private insurers pay the same rate for hospital procedures.
Melanie Mason covers state government and politics in Sacramento. She first began working for the Los Angeles Times in 2011 in Washington, D.C., where she covered money and politics during the 2012 presidential campaign. She is originally from Los Angeles and is a graduate of Georgetown University and the UC Berkeley Graduate School of Journalism. @melmason
GENEVA – While the world watches anxiously for signs of US President Donald Trump's next move vis-à-vis China, Chinese leaders remain focused on the next stage of their country's ongoing economic transformation. What they do should interest everyone – especially US policymakers.
China's industrialization process, like that of other successful East Asian economies, has combined profit-led investment, active industrial policy, and export discipline. But that approach has its limits, exemplified in the numerous developing countries that have attempted to climb the same development ladder, only to become stuck on the middle rungs or even to fall back, owing to what Harvard University economist Dani Rodrik has called "premature deindustrialization."
As part of CM2025, policy and financial support will be provided to spur technological breakthroughs in ten key areas, including next-generation information technology; high-end computer-controlled machine tools and robotics; space and aviation equipment; alternative-energy vehicles; and bio-medicine and high-performance medical devices.China hopes to avoid this fate, with the help of "China Manufacturing 2025" (CM2025), a roadmap released by Premier Li Keqiang in 2015 to guide the country's industrial modernization. The strategy focuses on developing advanced manufacturing sectors, but also considers how producer services, services-oriented manufacturing, and green technologies can complement that process.
CM2025 has sometimes been portrayed as a return to old-school top-down mercantilist practices and import-substitution policies. But that reading overlooks China's active experimentation with industrial and financial policies. In fact, that experimentation may hold valuable lessons for policy evaluation and innovation elsewhere. Not only are many developing countries now devising their own strategies for industrial upgrading and diversification; some developed economies, including the United States, are currently seeking to revive their manufacturing bases.
Start with industrial policy. According to China's strategy, by 2025, the country should have a set of internationally competitive multinational firms that have made progress in upgrading their positions in global value chains. Moreover, by that date, key Chinese industries should adopt international efficiency standards related to energy and material consumption and pollution. By 2035, China expects its economy to be fully industrialized.
These broad objectives are underpinned by an array of specific domestic (and international) targets for market share in key areas. For example, production of integrated circuits should rise to 75% of domestic demand in 2030, compared to 41% in 2015.
One of CM2025's less-noticed components, financial-policy guidance, is also one of its more innovative. In order to reduce the cost of capital for manufacturing firms, the strategy calls for the creation of new financing channels, while instructing China's development-finance institutions to increase their support for particular ends. Specifically, the Export-Import Bank of China should strengthen services for manufacturing firms to invest overseas, while the China Development Bank (CDB) should increase loans to manufacturing firms, with a view to "guiding" financing from other institutions, such as venture-capital and private-equity funds.
This approach, China hopes, can drive progress toward its objectives for upgrading and reform, by creating a set of purpose-built financing vehicles – so-called government guidance funds (GGFs) – that are responsible for allocating public investment funds. As a report by McKinsey & Company puts it, this "more market-based investment approach" is a "bold experiment designed to improve the likelihood of success."
Exemplifying this approach, China's state-backed Tsinghua Unigroup recently secured CN¥150 billion ($21.8 billion) in new financing to support upgrading in the country's semiconductor industry. Of that financing, CN¥100 billion came from the CDB and CN¥50 billion came from the National Integrated Circuit Industry Investment Fund. a national-level GGF created in 2014.
The role of GGFs will only grow. In 2015, 297 GGFs were created with slightly more than CN¥1.5 trillion of available capital – a fivefold increase from 2014. Municipal-level GGFs were the most numerous; but provincial-level GGFs led the way in terms of funding.
Last year, two more national-level GGFs were created: a $30 billion state venture capital investment fund and a $50 billion state structural adjustment fund. In both cases, the main shareholder is a holding company owned by the State-owned Assets Supervision and Administration Commission. In January, China's Silk Road Fund – along with other Chinese investors, as well as investors from Singapore and Japan – founded the $800 million Hou'an Innovation Fund, to invest in technology start-ups in areas like the Internet of Things, autonomous vehicles, cloud computing, Big Data, and artificial intelligence.
China's experiments with industrial and financial policies may end up providing emerging economies with valuable insight into how to avoid the middle-income trap. But, for a US concerned with its eroding manufacturing base, the lesson is already apparent. As Brad DeLong and Stephen S. Cohen have outlined, the US should act now to revive its pragmatic industrial-policy tradition, put finance back to work for the real economy, and invest in new activities that can reinvigorate a struggling middle class.Much remains to be seen about CM2025 and the use of these various new investment vehicles. But China appears poised to boost investment significantly in a range of new and advanced technologies in strategic sectors, while retaining equity stakes as they are developed and commercialized. If it succeeds, it will have laid the institutional foundations for new sources of growth. And, as the benefits of innovation are diffused throughout the economy, China will move closer to its goal: becoming a high-income country.
