Yields from income tax

This post is a tour of income tax and personal national insurance yields, it’s motivated by an interest in seeing how one might pay for a part of the reduction in the deficit through taxation. The reason for focusing particularly on income tax is that it yields a fairly large fraction of the total tax income (28.7% in income tax and 46.6% income tax and national insurance combined), as discussed in a previous post; this means that relatively large amounts of money are raised by relatively small changes when compared to other taxes. Furthermore it’s relatively easy to calculate: I can work out how much income tax I pay in a year but would struggle to tell you how much VAT I pay per year, the impact of a tax on insurance premiums the effect of a change on duty and so forth. Thirdly, it is the tax that is most transparently progressive, in the technical sense that the more you earn the greater the fraction of your income you pay in tax.
This calculation is based on a calculation of personal tax rates from wikipedia, this figure generates the tax rates programmatically and I simply translated the code to my computer language of choice – I thought about doing it in a spreadsheet but that turned out to be a bit brainbending. The second component of the calculation is the number of people in each income bracket: this information along with further information on incomes can also be found on wikipedia. Ultimately the data come from the HMRC. I’ve put these two bits of data together into a program which enables me to fiddle with tax rates, tax thresholds and so forth. It appears to be approximately correct since it matches roughly HMRC’s own figures on the effects of small perturbations to the tax system (pdf). This also tells you it’s possible to look this stuff up – but I find it more fun to calculate it myself! It’s also a good illustration of the general process of how to go about repeating someones calculations from literature sources: try to reproduce their graphs; try to match the summary numbers they produce.
This first figure shows the income and national insurance payable as a fraction of gross (total) pay as a function of pay. The thing I hadn’t appreciated intuitively is that the tax banding system gives quite a smooth increase in percentage tax take, this is because you only pay raised rates on the fraction of your income that lies above the threshold:

Extending the horizontal scale out towards incomes of £1,000,000 and the rate tends to 50%. The next figure shows the distribution of incomes, in the UK:

You can see the same information in text form here. The area under this curve between points on the horizontal axis tells you the number of people in an income band. The median income in the UK is £26k per annum – half the population earn more than this, half less. About 1% of the population earns more than about £100k per annum. This final figure shows the amount that each income band pays according to the latest tax rates.

To summarise this final figure in tax bands, the 20% band accounts for about 57% of tax paid, the 40% band for 26% and the 50% band for 17%. These bands contain respectively 90%, 9% and 1% of the income tax paying population.
In case you’re curious my salary puts me close to the top of the basic rate tax band.
To apply the knowledge embedded in these graphs to some recent problems:
As a rule of thumb: 1p on basic gives about £4bn, 1p on upper rate gives £0.75bn, 1p on the new 50% band gives £0.31bn. The reason for this sharpish dropoff is that relatively few people are effected by the upper rate tax changes so to yield a large tax income the rates have to be changed by a relatively large amount.
Reducing the threshold of the 40% tax band to £40k from £43k yields about £3bn.
The £20billion cut in welfare benefits is equivalent to approximately 5p on the basic rate of income tax, taking it to 24.5% from 20%. This would cost me about £1700 per year.
Tuition fees cost about £7.5billion (based on 1.5 million students each requiring an average £5k tuition fees per year), this is about 2p on basic rate. This would cost me about £800 per year.
The £2.5billion income gained from cutting child benefit from those in the upper tax band could be paid for with an increase in the upper rate to ~43% from 40%. Although it seems the £2.5billion figure is dubious. I can’t help thinking simply increasing the upper rate by this amount, rather than a convoluted attempt at clawback would be simpler. This isn’t to say I support the idea of paying child benefit to all regardless of income, just that implementing withdrawal in this way is technically complicated. This tax rise wouldn’t cost me anything!
I’ve not seen anybody volunteering for these tax increases to support their favoured causes, rather they prefer a range of schemes of dubious value impacting other people to avoid the problem falling upon themselves – a subject for my next post.
Note
This modelling was done using Visual C# running under Windows 7, if you’re interested either in the code or in just the application then let me know in the comments below (or on twitter). There are a couple of minor bits of tidying I’d like to do before release. Please note that the application is “good enough for blogging work” and should not be considered an accurate tool for tax calculations – it’s a toy to help me understand things!

Questions for undergraduates… cabinet edition

Thinking back many years to my first fraught days as an undergraduate, the three questions that came up most frequently as icebreakers between students were:

1. Where are you from?
2. What were your A-level results?
3. What degree are you doing?

In this post I thought I would answer the third question, for members of the cabinet. The data is all culled from wikipedia:

Prime Minister	David Cameron	Politics, Philosophy and Economics (Oxford)
Deputy Prime Minister	Nick Clegg	Social Anthropology (Cambridge), Political Philosophy (Minnesota), MA European affairs(College of Europe)
Foreign and commonwealth affairs	William Hague	Politics, Philosophy and Economics (Oxford), Master of Business Administration (INSEAD)
Chancellor of the Exchequer	George Osborne	History (Oxford)
Justice	Kenneth Clarke	Law (Cambridge)
Home department	Teresa May	Geography (Oxford)
Defence	Liam Fox	Medicine (Glasgow)
Business, Innovation and Skills	Vince Cable	Economics and Natural Sciences (Cambridge), PhD Economics (Glasgow)
Work and Pensions	Iain Duncan Smith	Sandhurst
Energy and Climate Change	Chris Huhne	Certificate in French language and civilisation (Sorbonne); Politics, Philosophy and Economics (Oxford)
Health	Andrew Lansley	Politics (Exeter)
Education	Michael Gove	English (Oxford)
Communities and local government	Eric Pickles	Law (Leeds Polytechnic)
Transport	Philip Hammond	Politics, Philosophy and Economics (Oxford)
Environment, food, rural affairs	Caroline Spelman	European Studies (Queen Mary College)
International Development	Andrew Mitchell	History (Cambridge)
Northern Ireland	Owen Paterson	History (Cambridge)
Scotland	Michael Moore	Politics and Modern History (Cambridge)
Wales	Cheryl Gillian	Law
Culture Olympics Media and sport	Jeremy Hunt	Politics, Philosophy and Economics (Oxford)
First secretary to the treasury	Danny Alexander	Politics, Philosophy and Economics (Oxford)
Leader of the House of Lords	The Lord Strathclyde	Bachelor of Arts (UEA)
Minister without portfolio	The Baroness Warsi	Law (Leeds)

As a scientist this is both depressing and comforting, depressing because of 23 members only 2 has any sort of scientific training: Liam Fox and Vince Cable (the latter of whom only did science in his first year). Comforting because at least we don’t get the blame!

It also highlights once again the dominance of the Politics, philosophy and economics degree at Oxford in providing Cabinet ministers – I haven’t checked but I believe this applies to previous cabinets.

Fun with fluids!

Back to some science stuff again, I’ve been meaning to do a blog post on smoke rings for a while, thinking that a simple description of what’s going on would be rather nice. The image to the right is of a “steam” ring blown by Mount Etna.

The explanation of smoke rings goes into the field of “fluid dynamics”; to a physicist a fluid is a liquid or a gas – some of the examples linked to here are of gas-in-gas rings (like the smoke ring), some are liquid-in-liquid rings and some are gas-in-liquid rings (bubble rings), the underlying physics is always the same.

A smoke ring is an example of a more general phenomena called a “vortex ring”. Scientists aren’t the only ones interested in fluid dynamics: this is a video of a dolphin playing with bubble ring. My fluid dynamics textbook helpfully points out that the velocity field around a vortex ring is equivalent mathematically to the magnetic field lines around a loop of current carrying wire. For a physicist this is a useful statement because it means you can carry across your understanding in one area to another – for non-physicists less so.

A vortex ring is made by pushing a pulse of fluid through a hole, friction slows down the fluid close to the edges of the hole whilst the fluid in the centre of the hole continues to move more quickly. On leaving the hole, fluid at the edges is rotating around the perimeter of the ring. Push the air to fast and the vortex ring won’t form, it’ll be destroyed by turbulence. You can see how this works in the image below (or, perhaps better, this video). The smoke in a smoke ring is only there to highlight what the air is up to – in liquids dyes can be used to reveal the patterns of liquid flow, or small particles. In the laboratory, small particles suspended in liquid can be illuminated by sheets of laser light to provide cross-sections through the flow patterns.

The first surprising thing about smoke rings is their persistence – for a gassy disturbance they maintain their shape for a remarkably long time. The smoke is actually trapped inside the vortex, and can only diffuse away slowly. By their very nature vortex rings are obliged to travel along in the direction of their axis, as the core of the vortex ring gets larger the forward motion of the ring slows.

Beyond simple vortex rings: we can also see vortex rings colliding and breaking up into rings of rings, and vortex rings overtaking – a faster vortex ring forces a slower one to expand whilst it passes through. These behaviours are all understandable using fluid dynamics, and can be simulated in a computer.

Vortices can also be found in lines, a vortex ring is simply a vortex line with the two loose ends tied together. Tornados and the whirlpool of water going down the plughole in the bath are examples of vortex lines.

Vortex rings are simply one facet of fluid behaviour arising from “vorticity”, that’s to say the behaviour of spinning packets of fluid. The “packets” being a handy conceptual device of breaking up a body of fluid into little pieces for further consideration. From a historical point of view, vortex lines were first understood by Helmholtz (1858), with some details added later by Kelvin (1867). What’s interesting about the Kelvin paper is that it was written at a time when the existence and understanding of atoms was in it’s infancy and there was some thought that atoms may be made from vortex rings (this turns out not to be true).

More generally fluids are understood using the Navier-Stokes equations which are a combination of Newton’s laws for fluids (forces make things move), viscosity (friction for liquids) and pressure. Beyond this the effects of surface tension, chemical reactions and magnet and electric fields to introduce ever more complexity. Even with the equations in hand, there is a large difficulty in solving them to produce useful results – just how fast can I pump liquid through this complicated shape?

Research into fluid dynamics is important for practical reasons (like making aeroplanes fly, simulating the weather and understanding how liquids move through all manner of mechanical devices from aerosol sprays to hydroelectric power plants) but it’s also just plain fun.

These videos of vortex rings are well worth a look:

1. Dolphins playing with vortex rings
2. Vortex ring collision
3. Vortex ring, overtaking manoeuvre
4. Computer simulation of a vortex ring

There’s many more like this, try searching You Tube for “vortex rings”.

Book review: God’s Philosophers

I seem to be on a run of book reviewing at the moment, as I’ve indicated before these are as much for me as they are for you! This weeks contribution is on “God’s Philosophers: How the Medieval World laid the foundations of Modern Science“ by James Hannam. This book looks at the development of science, or at least a precursor to modern science, during the Middle Ages (5th-15th century). This fits in with my previous book reviewing which has gone back to the founding of the Royal Society (1662), and a little earlier with Gerard Mercator (1512-1594).

To my mind the book makes a poor start in the introduction by telling me how everything I believe about the Middle (or Dark) Ages is wrong, and so is everyone else. I’m prepared to accept that my visualisation of the Dark Ages, as being quite literally Dark with peasants fumbling around in a permanent twilight may be wrong, however this type of introduction generally leaves me believing that the writer is a conspiracy theorist!

A recurring theme of the book is how those studying natural philosophy (a convenient term for the proto-science) continually ran the risk of being accused of heresy. Hannam seems to portray the treatment of heresy as not really so bad: only 1 in 20 trials resulted in burning at the stake, there wasn’t much torture, the victim was asking for it, the church handed over the heretics to the secular authorities who carried out the most terrible punishment. This seems to treat lightly the death, by burning at the stake, of people who simply believed something different. Perhaps more insidiously anyone studying natural philosophy had to have an eye to what the church believed in case what they studied was considered to be heretical. Later Hannam’s defence turns out to be more narrowly defined: he sees himself as defending the Catholic Church against Protestants. He reserves a special ire for humanists, those in the Renaissance who had a particular fondness for studying the ancient classics.

This said, the book is a nice overview of the development of the academic life after the fall of the Roman Empire, with the early universities in Italy and France growing up as offshoots from the great cathedrals. The very earliest of these institutions taught law, and sometime later medicine although the core of early teaching was in theology. A great deal of effort was expended in recovering the work of the Ancients (Greek philosophers) this was made difficult by the absence of much knowledge of Greek in Western Europe. The Arabs had picked up much of this material in an earlier period but translated it into Arabic rather than Greek whilst Western Europe had Latin as a common scholarly language. Interest was primarily in Aristotle, although later the works of Plato were re-discovered. In some ways it’s this aspect of the Middle Age and Renaissance enterprise which is so confusing to a modern scientist. It just looks like it would be far easier, and quicker, to make a fresh start and discover things for yourself rather than dredge through ancient, partial manuscripts in ill-known languages for clues.

There are various places in the book where I can feel myself trying to shout back through the ages “Yes, yes, you’re on the right track, keep going!”. Only to see the protagonist draw back at the last minute or for their work to be subsequently ignored. Examples include Nicole Oresme (1323-1382) and his use of graphs in understanding physical ideas. Or the theory of impetus developed by Jean Buridan (~1300-1358), which is a very direct precursor of modern theories of mechanical motion. Similarly isolated sparks spoke of doing controlled experiments to test theories, and the idea that mathematics could be used to describe physical processes. However these ideas did not seem to start drawing together until the period in which Galileo lived (1564-1642).

The part that astrology played in the development of astronomy is rather illuminating, as part of their programme the astrologers wanted to known exactly where heavenly bodies would be at some point in time in the past or future therefore they expended considerable, skilled effort in measuring the locations of these bodies and building models from these measurements. This was the work that lead Copernicus to propose a heliocentric solar system, and would have fed into Newton’s work on gravity, and all done for completely ridiculous reasons. This also highlights some of the oddities in the thinking of the early pioneers of the modern period, for example William Gilbert, who did excellent work on magnetism did it in a distinctly odd framework – he believed the magnet was the soul of a planet, similarly William Harvey’s work on the circulation of blood and Isaac Newton’s obsessive alchemy and bible study.

During the Middle Ages there were various technological developments: the mechanical clock (Norwich, 1273), spectacles (Venice, 1300), modern printing (by Gutenberg around 1439). Paper making had been brought to Europe at some time before 1276 when the first paper mill is recorded in central Italy. Gunpowder was first mentioned in Europe by Roger Bacon (1267), having been invented in China in around the 9th century. These inventions largely arose outside of the university system.

The book ends with the death of Galileo in 1642, who had been subjected to a trial for heresy following which he was held under house arrest for the remainder of his life. The book makes clear, that in common with Newton, Galileo was “standing on the shoulders of giants” drawing heavily on work in the Middle Ages – although synthesising into a coherent whole, making his own additions and also covering a large range of topics over his lifetime.

Finally there is a timeline, a cast of characters and a nice, manageable set of further readings.

I feel ambivalent about this book, the historical aspects of it I found very interesting, the proselytising less so. It seems evident that there was progress in proto-science during the Middle Ages, and also in technology. Hannam claims that the Catholic Church facilitated this progress; the evidence he presents is mixed – they supported scholarship and the founding of universities but simultaneously ran a system of Inquisition to detect heresy which made free academic enquiry difficult.

Image: Frontspiece of Bible Moralisee, God the Geometer.

Early reports of the Royal Society

In an earlier post I wrote about Thomas Sprat’s “History of the Royal Society of London, for the improving of Natural Knowledge“. Published in 1667, under the direction of the Royal Society which had first met in 1660, receiving their royal charter in 1662. In that post I deferred discussion of a selection of the early reports of the Society that were embedded in the History, for reasons of space.

The reports by title are these:

• Answers returned by Sir Philberto Vernatti (Resident of Batavia in Java Major)
• A Method for making a History of the Weather by Mr Hook
• Directions for the Observations of the Eclipses of the Moon by Mr Rooke
• A Proposal for Making Wine by Dr. Goddard
• A Relation of the Pico Teneriffe
• Experiments of the Weight of Bodies increased in the Fire by Lord Brouncker
• Experiments of a Stone called Oculus Mundi by Dr Goddard
• An account of a Dog dissected by Mr Hook
• Experiments of the Recoiling of Guns by Lord Brouncker
• The History of the Making of Salt-Peter and The History of Making Gunpowder by Mr Henshaw
• An Apparatus to the History of the Common Practices of Dy[e]ing by Sir William Petty
• The History of the Generation and ordering of Green Oysters Commonly called Colchester-Oysters

Interspersed amongst them Sprat adds in various brief comments on other work of the Society along with what amounts to a personal eulogy to Christopher Wren, who seems to have been involved in pretty much everything although Sprat seems to have been generous in attributing to Wren work which was largely done by other people.

Looking first at the authors: of Sir Philberto Vernatti I can find little, he appears to have been Governor of Batavia (now Jakarta) for the Dutch East India Company whilst most references I’ve found to him arise from this report to the Royal Society; Mr Hook was the first curator of experiments for the Royal Society and paid an important role in keeping the Society with interesting things to see, he was an outstanding scientist in his own right; Lord Brouncker was the first President of the Royal Society; Mr Rooke appears to have been Lawrence Rooke, who died in 1662; Dr Goddard is Dr Jonathan Goddard the early Society met in his lodgings at Gresham College, physician to Charles I and present at the death of Cromwell; Mr Henshaw is Thomas Henshaw an early Biological Sciences Secretary to the Royal Society; Sir William Petty was amongst other things an economist and a Parliamentarian in the Civil War. On the whole these reports look like they have been selected on political grounds, they are from the movers and shakers of the Society.

The contributions vary considerably in length and content, Dr Goddard’s proposal on making wine amounts to: “Do it in the West Indies using sugar cane”, similarly Mr Hooks account of dissecting a dog is very brief (it’s also pretty horrifying).

The reports on dyeing, oysters and the making of Salt-peter and gunpowder are quite detailed reviews of the current “state-of-the-art” in important trades, involving both references to previous literature and reports of current practice which read very much as if the authors had gone and observed the processes described. The answers returned by men in distant places: Sir Philoberto Vernatti in Batavia, Java and the report on the scaling of Pico Teneriffe are also very much directed to trade: does this wood grow well there? These are quite lengthy and range over quite a range of topics. From this it’s clear that the Royal Society wanted to be seen as contributing to the national wealth.

The reports by Hooke (on recording the weather), Rooke, Brouncker and Goddard (on Oculus mundi) are those which most closely resemble modern scientific papers. They report methods for conducting measurements, or the results of those measurements, unlike modern papers they do not draw strong conclusions from those measurements. In a sense they are following the scheme laid out by Sprat in which empirical measurement is important and theorising comes later. Oculus Mundi is a form of opal now known as hydrophane which goes transparent when it absorbs water, the OED reports that Sir Kenelme Digby had brought some of this material to the Society in 1661.

In sum it looks like the early Society was very busy. Much of what they wrote was very practical and aside from a comment on making insects from cheese and sack it largely looks quite sensible. In these reports I can see the origins of the primary scientific literature that I access as part of my work.

Children and numbers

One of this mornings news items is on government plans to limit benefit to a family to the average wage, apparently regardless of the size of the family. This seems to be built around the idea that there are families out there with vast numbers of children who are milking the system to the cost of the rest of us. We can check this idea with numbers. The graph below shows the number of claimants broken down by number of children in the household, the final category is for families containing 8 or more children.

The heights of the columns are a lower bound on the fraction of benefit going to each group, an upper bound would be to multiply each column by the number of children but this would be an over-estimate since benefits don’t increase linearly with number of children. There are a little under 1000 families with 8 children or more. 90% of claimant families have less than four children.
These data tell us nothing about the circumstances of each of the families represented which will include the loss of parents, illness, job loss and all the other small disasters which can befall a family.
The data shown here are from Department of Work and Pensions via The Spectator (here).

Book review: The History of the Royal Society of London by Thomas Sprat

In which I venture into original material, in the form of Thomas Sprat’s “History of the Royal Society of London, for the improving of Natural Knowledge“. Published in 1667, under the direction of the Royal Society which had first met in 1660, receiving their royal charter in 1662. I must admit to having attempted to read this book a couple of times before and failed; the copy I have is a facsimile of the original therefore written in early modern English with heavy use of the “long s” inevitably leading to an internal voice with a pronounced lisp! It’s probably useful to replace “History” with “Prospectus” in the title, to satisfy modern tastes. Despite it’s age the writing style is surprisingly readable to my modern eyes.

Unlike any other book I have read the book starts with a dedication to the King, followed by a poem praising Francis Bacon (1561-1626). Bacon’s presence recurs throughout the book, Sprat clearly sees him as the intellectual godfather of the organisation. The book is divided into three sections; the first is a prehistory describing the state of natural knowledge before the Royal Society, the second section details the founding of the Society and the final section discusses the value of the knowledge the Society seeks.

The tour of prehistory is rapid; starting with the ancient priests who held knowledge to themselves, followed by the Greek philosophers (described as the Ancients) who Sprat feels were too fond of rhetoric in determining questions of knowledge and who he accuses of “hastiness”. The Romans receive relatively short shrift. Following the Roman Empire, Sprat sees the rise of the Church of Rome and a relatively barren period dominated by war, he cites here William of Malmsbury (1080-1143), an early English historian in support of this. He then bemoans the time spent by the Scholastics in what he considers pointless theology in the later period, presumably 1000-1500, William of Ockham falls into this group. Finally he comes to the recent era where he lists five groups involved in natural philosophising. Francis Bacon is cited reverentially once again, those taking on the philosophy of the ancients – tidying it up after it’s release from the abbeys in the Reformation, are less venerated. “Chymists” receive a mixed review with the more pedestrian welcomed but the alchemists, often seeking eternal life or some other fancy, are scorned. Isaac Newton, a later president of the Royal Society was a keen alchemist but by this time it was seen as not quite proper. He also comments on the coming of specialisation to different areas of science.

The founding fathers of the Royal Society started meeting in Doctor Wilkins lodgings in Wadham College, Oxford – it’s not stated explicitly when this started but it ended in around 1638 when the meetings moved to Gresham College in London. Sprat skims over the Civil War (1642-1651), although this period was clearly much on his mind in writing the book, then happily reports: “For the Royal Society had its beginning in the wonderful pacifick year of 1660”, the year of the Restoration when Charles II returned to the English throne. Sprat goes on to describe in some detail the guiding principles of the society, explicitly ruling out a teaching organisation citing the time required to do this and the potentially unhealthy Master-pupil relationship as damaging to the purposes of the Society. It is a principle of the new organisation that men of all religions and nations are welcome. This internationalism is a hallmark of modern science. Also highlighted is the idea that the Royal Society becomes a central repository for written information, the first of its kind. The Royal Society was funded from the subscriptions of it’s fellows, although they were open to public funding.

Sprat then provides a rather detailed description of how the Royal Society is constituted including how they go about their business in terms of doing and reporting experiments, I must admit to finding this a bit dull. It has the air of an organisational fanatic describing his perfect organisation, it’s questionable how closely the Royal Society managed to keep to this ideal. However, in his description of the processes of the Society we can see the genesis of the still used scientific literature, with the primary literature comprised of relatively short papers containing experimental results and theoretical developments based on those results. Charles II makes several appearances here, unsurprising given the recent granting of the Royal charter, but he also seems to have been moderately involved in the Society and had his own chemistry laboratory.

A substantial portion of the middle of the book is taken by a compilation of reports by the early Royal Society, these include:

• Answers returned by Sir Philberto Vernatti (Resident of Batavia in Java Major)
  
• A Method for making a History of the Weather by Mr Hook
  
• Directions for the Observations of the Eclipses of the Moon by Mr Rooke
  
• A Proposal for Making Wine by Dr. Goddard
  
• A Relation of the Pico Teneriffe
  
• Experiments of the Weight of Bodies increased in the Fire by Lord Brouncker
  
• Experiments of a Stone called Oculus Mundi by Dr Goddard
  
• An account of a Dog dissected by Mr Hook
  
• Experiments of the Recoiling of Guns by Lord Brouncker
  
• The History of the Making of Salt-Peter by Mr Henshaw
  
• The History of Making Gunpowder
  
• An Apparatus to the History of the Common Practices of Dy[e]ing by Sir William Petty
  
• The History of the Generation and ordering of Green Oysters Commonly called Colchester-Oysters

I shall write on these reports in a separate post.
The book ends with a lengthy rebuttal of various criticisms of the Royal Society, including how “experimenting” is entirely compatible with the Christian religion and specifically the Church of England; this is perhaps unsurprising given Sprat’s occupation as a churchman. In addition to this there is the appeal that experimental philosophy as demonstrated by the Royal Society can benefit the nation by improving its industry and trade, including such things as importing plants across the emire. It also defends the interest of the nobility in this area, claiming that their country estates are the ideal places to conduct such studies, whilst the lower orders go off to fight wars!

Reading this book was an unusual experience for me. In contrast to the modern histories I more usually read I felt much more obliged to ask questions like: Why is this person writing this book? Why was Bacon so important? Is this some reverence to a politically important forbearer? Why the need for the book at all? A book length defence of such an organisation only 5 years after its formation seems a bit odd.

Reading this has given me a taste for contemporary material, I think I might have to look into Pepys and some original scientific publications.

Further Reading

1. Google Books version of the History of the Royal Society of London, for the improving of Natural Knowledge.
   
2. My earlier blog posts on the Royal Society
   
3. Image from the National Portrait Gallery

Regulation and reward

This post is stimulated by an exchange on twitter as to why we are bothered about bankers being paid stacks, whilst seemingly less worried about football players and entertainers being paid similar amounts. This post fails to address that specific question.

Banks are rich because they handle money and take a little charge at each transaction, also they rent out money which attracts few overheads. Footballers and entertainers are rich because wealthy organisations realise that to sell a football team or a film requires a star. Doctors and lawyers are rich because they have rare skills that people are willing to pay well for, the costs of poor legal advice or poor medical advice are loss of wealth or life, respectively, and their lack becomes rapidly obvious.

Pay does not measure a person’s value. Pay measures how much money an employer believes an employee is worth to them, if the employer is also the employee this judgement may be flawed. In some cases this is easy to determine, in other cases it is not. If I look at the company I work in, higher salary goes with greater responsibility for people and greater budgets. In the case of patent attorneys, who are relatively well paid, then it goes with a marketable skill. Scientists doing science are paid acceptably, the company is clear that they are not paid more because there are not local jobs for scientists which pay better.

We’ve recently gone through repeated rounds of “How much are  you paid compared to the Prime Minister”, exclusively directed at other public sector workers. This is ridiculous. It’s usually inaccurate as well: the typical figure quoted for the Prime Ministers salary is £142,500; however he will also receive an MP’s salary of £65,738. In addition to this he has use of an apartment in central London at Number 10 and a country house, Chequers. As Tony Blair has demonstrated, the Prime Minister can also expect substantial financial rewards on leaving the position, through speaking fees, directorships and so forth that are based largely on their position of former prime minister (see here and here). The Prime Minister is also entitled to receive half of his salary as pension after he has left office, although Gordon Brown waived this payment.

People make the money they can under the situations they find themselves. I’m sure we’ll all argue that that’s not we’d do personally but let’s assume that we’re all special. Do you own up if you’re under-charged or you receive more change than you deserve or if the electrician offers you a lower price for cash? Viewed in this light the MP’s expenses scandal is nothing unexceptional. Looking at what they were up to I can easily imagine that we’d find exactly the same distribution of abuses if the expenses scheme where I work were regulated in the same way. A whole bunch of people would claim to the limit in an entirely “legal” way; a few would claim less through incompetence in milking the system and a few would act in ways that were basically fraudulent.

What’s the message of this post?

In terms of regulation: don’t rely on the goodwill of man to obtain a favourable societal outcome. Although that might work for some chunk of the population it won’t for a substantial fraction and so the scheme will fail.