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Immoral earnings
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Immoral earnings Probe public perceptions, and it’s soon clear why the salaries of corporate chief executives are a toxic issue, says Michael Norton AMONG the issues fuelling political upheaval at the moment is the gap between bosses’ and workers’ pay. Leaders, including the UK’s prime minister Theresa May, are busy grappling with this. The past five years have seen concern in many parts of the world over the divide between rich and poor. Examples include the Spanish Indignados movement and Occupy Wall Street in 2011, a 2013 Swiss referendum on capping CEO pay at 12 times that of the lowest paid (it was voted down), and ongoing protests in various countries that the system is “rigged” in favour of the wealthy. So how big should the gap be? There are many ways to explore this, from how wage gaps affect productivity and economic growth to how larger gaps affect general trust in government and financial institutions.
My colleague Sorapop Kiatpongsan and I took a different approach, one rooted in psychology: we wanted to find out what people felt the ideal pay gap should be. This would give us a sense of how they weigh up what is morally acceptable, and perhaps explain public anger. We used data from the International Social Survey Programme, which involves more than 55,000 respondents from 40 countries, including Australia, China, Russia, Turkey, the US and the UK. Key questions included: How much do you think a chief executive of a large national company makes in your country? How much do you think an unskilled factory worker makes? Averaged across all 40 countries, those two questions produced an estimated pay ratio of 10:1, meaning that people believed that bosses made 10 times more
Mission possible? Will more state-funded R&D lift the UK’s postBrexit economy, asks Mariana Mazzucato SIGNALS matter. When UK chancellor Philip Hammond pledged an extra £2 billion of public money a year for research and development by 2020, he was indicating a shift beyond ramping up spending amid fears of a £59 billion Brexit hit. The R&D pledge was part of a £23 billion package to improve the 18 | NewScientist | 10 December 2016
extra R&D money will be used is significant. A share will go to a new Industrial Strategy Challenge Fund. Instead of developing technologies as an end in themselves, the fund encourages purposeful, collaborative innovation by setting “challenges for UK researchers to tackle”. This is promising. The US defence agency DARPA has specialised in such problem solving since 1958, often with big civilian spin-off applications.
UK’s productivity. It was also the down payment on prime minister Theresa May’s intent to shape growth via industrial strategy. After years of, at best, being “protected” in the budget and thus experiencing a real (inflation “We need to overcome the idea government enables adjusted) cut of about 15 per cent, UK science could be on a new path. progress, while business dictates its direction” The choice of how part of that
Done well, and linked with procurement policy that allows initiatives to scale up, this can spur private investment and generate higher productivity and innovation-led growth. As I detail in my book, The Entrepreneurial State: Debunking public vs. private sector myths, public agencies like DARPA play a role in developing breakthrough technologies, and indeed entire new sectors, as they strive to meet public missions such as putting people on the moon. And mission-oriented policies can have a catalytic effect across many sectors. Growth has a rate, but also a direction. Missions – guided by
For more opinion articles, visit newscientist.com/opinion
Michael Norton is the Harold Brierley professor at Harvard Business School and the co-author of Happy Money: The Science of Happier Spending (Simon & Schuster/Oneworld)
today’s big challenges such as climate change, inequality or ageing – can help set direction and in so doing get business to invest more in R&D. At present, the level in the UK is below the average for OECD countries. Meeting such missions means overcoming the idea that government enables, while business dictates direction. To make this work, Hammond must ensure the entire innovation chain is lined up, and provide a clear sense of direction of where the opportunities lie. n Mariana Mazzucato is a professor in the economics of innovation at the University of Sussex, UK
INSIGHT Web filtering
MARTIN-DM/GETTY
than unskilled workers. In the UK, it was 13.5:1. Now consider two more questions: How much do you think a CEO should make in your country? How much do you think an unskilled factory worker should make? Averaged again across all the countries, the answers produced an ideal ratio of 4.6:1 (in the UK, it was 5.3:1). Around the world, people would prefer the distribution of pay to be more equitable than their estimate of reality. Now compare these ratios with the actual UK pay gap. It is 84:1. What’s more, wage gaps have been rising dramatically in recent decades. In the US, for example, the boss-to-worker pay ratio was roughly 20:1 in the 1960s and 30:1 in the 1970s – before ballooning to roughly 300:1 in recent years. While both 20:1 and 30:1 are larger than the ideal of roughly 5:1 that people describe, it is not difficult to understand why this is now a critical issue: today’s gaps are a huge deviation from our universal sense of what is right. n
–Teen sexting: tech can’t fix it–
Under 18s sexting ban? No thanks, Mr Hunt Frank Swain
protecting the comments sections of a website, rely on feedback from thousands of viewers who can flag objectionable content, which isn’t much use in a two-way chat dialogue. And similar content filters on Facebook have resulted in women having their accounts suspended for sharing photos of breastfeeding. How can we hope to build AI that recognises porn, when even US Supreme Court judges have failed to pin down what counts as obscene, only concluding, “I know it when I see it”? Even if we could, we shouldn’t. In the light of the pervasive powers
UK HEALTH secretary Jeremy Hunt has called on social media giants to do more to tackle sexting among the nation’s teens, which he blames for rising cases of mental illness. Yet his proposals for smart locks that stop teenagers sharing sexually explicit images are just the latest example of government demanding magical fixes for complex societal problems. Giving evidence as part of a House of Commons inquiry into suicide prevention, Hunt singled out social media as a key platform for abuse, telling the panel, “I ask myself the “Demands to block explicit simple question as to why you can’t images refuse to engage prevent the texting of sexually explicit with how teens – and the images by people under the age of 18.” rest of us – use the net” He also asked why “word pattern recognition” couldn’t be used to granted by the UK Investigatory identify and stop cyberbullying. Powers Act and porn blockers Hunt’s tech proposals are easy to suggest, but much harder to proposed by the Digital Economy implement. Artificial intelligences can Bill, we should be wary of yet more flag abusive keywords and recognise infrastructure to filter the internet. explicit images, but these are crude “What Hunt is proposing is real-time tools that often fail to understand processing of every image shared context and are easy to circumvent. digitally,” says Tom Crick at Cardiff Most practical filters, like those Metropolitan University, UK.
Hunt’s plea will play well with concerned parents, but Crick, who has been working to reform UK computer education, views tighter controls as not just technically unfeasible, but strategically wrong. “We’re trying to create competent and capable young people who can confidently navigate the internet,” he says, not just trying to protect them by shutting them out. Excluding them could backfire, shifting teen activity onto less regulated services. While protecting children online is clearly desirable, it’s less obvious why tech firms, not parents, should be responsible. “If your child is aged under 12, should they have unsupervised access to the internet?” says Crick. The health secretary’s comments betray our uneasiness about sexual awareness in young teens. There’s no doubt that we’re seeing a dramatic change in norms around sex and sharing sexual content, which comes hand in hand with the potential for abuse through revenge porn and extortion. But sexting isn’t going away, and demands to block explicit images refuse to engage with how teens – and the rest of us – use the internet. If the minister really wants to tackle problems around sexual activity and mental health in young people, he ought to spend less time demanding magical fixes and more time ensuring Britain’s youth can access high-quality sex education and well-funded mental health services. n 10 December 2016 | NewScientist | 19
Immoral earnings Probe public perceptions, and it’s soon clear why the salaries of corporate chief executives are a toxic issue, says Michael Norton AMONG the issues fuelling political upheaval at the moment is the gap between bosses’ and workers’ pay. Leaders, including the UK’s prime minister Theresa May, are busy grappling with this. The past five years have seen concern in many parts of the world over the divide between rich and poor. Examples include the Spanish Indignados movement and Occupy Wall Street in 2011, a 2013 Swiss referendum on capping CEO pay at 12 times that of the lowest paid (it was voted down), and ongoing protests in various countries that the system is “rigged” in favour of the wealthy. So how big should the gap be? There are many ways to explore this, from how wage gaps affect productivity and economic growth to how larger gaps affect general trust in government and financial institutions.
My colleague Sorapop Kiatpongsan and I took a different approach, one rooted in psychology: we wanted to find out what people felt the ideal pay gap should be. This would give us a sense of how they weigh up what is morally acceptable, and perhaps explain public anger. We used data from the International Social Survey Programme, which involves more than 55,000 respondents from 40 countries, including Australia, China, Russia, Turkey, the US and the UK. Key questions included: How much do you think a chief executive of a large national company makes in your country? How much do you think an unskilled factory worker makes? Averaged across all 40 countries, those two questions produced an estimated pay ratio of 10:1, meaning that people believed that bosses made 10 times more
Mission possible? Will more state-funded R&D lift the UK’s postBrexit economy, asks Mariana Mazzucato SIGNALS matter. When UK chancellor Philip Hammond pledged an extra £2 billion of public money a year for research and development by 2020, he was indicating a shift beyond ramping up spending amid fears of a £59 billion Brexit hit. The R&D pledge was part of a £23 billion package to improve the 18 | NewScientist | 10 December 2016
extra R&D money will be used is significant. A share will go to a new Industrial Strategy Challenge Fund. Instead of developing technologies as an end in themselves, the fund encourages purposeful, collaborative innovation by setting “challenges for UK researchers to tackle”. This is promising. The US defence agency DARPA has specialised in such problem solving since 1958, often with big civilian spin-off applications.
UK’s productivity. It was also the down payment on prime minister Theresa May’s intent to shape growth via industrial strategy. After years of, at best, being “protected” in the budget and thus experiencing a real (inflation “We need to overcome the idea government enables adjusted) cut of about 15 per cent, UK science could be on a new path. progress, while business dictates its direction” The choice of how part of that
Done well, and linked with procurement policy that allows initiatives to scale up, this can spur private investment and generate higher productivity and innovation-led growth. As I detail in my book, The Entrepreneurial State: Debunking public vs. private sector myths, public agencies like DARPA play a role in developing breakthrough technologies, and indeed entire new sectors, as they strive to meet public missions such as putting people on the moon. And mission-oriented policies can have a catalytic effect across many sectors. Growth has a rate, but also a direction. Missions – guided by
For more opinion articles, visit newscientist.com/opinion
Michael Norton is the Harold Brierley professor at Harvard Business School and the co-author of Happy Money: The Science of Happier Spending (Simon & Schuster/Oneworld)
today’s big challenges such as climate change, inequality or ageing – can help set direction and in so doing get business to invest more in R&D. At present, the level in the UK is below the average for OECD countries. Meeting such missions means overcoming the idea that government enables, while business dictates direction. To make this work, Hammond must ensure the entire innovation chain is lined up, and provide a clear sense of direction of where the opportunities lie. n Mariana Mazzucato is a professor in the economics of innovation at the University of Sussex, UK
INSIGHT Web filtering
MARTIN-DM/GETTY
than unskilled workers. In the UK, it was 13.5:1. Now consider two more questions: How much do you think a CEO should make in your country? How much do you think an unskilled factory worker should make? Averaged again across all the countries, the answers produced an ideal ratio of 4.6:1 (in the UK, it was 5.3:1). Around the world, people would prefer the distribution of pay to be more equitable than their estimate of reality. Now compare these ratios with the actual UK pay gap. It is 84:1. What’s more, wage gaps have been rising dramatically in recent decades. In the US, for example, the boss-to-worker pay ratio was roughly 20:1 in the 1960s and 30:1 in the 1970s – before ballooning to roughly 300:1 in recent years. While both 20:1 and 30:1 are larger than the ideal of roughly 5:1 that people describe, it is not difficult to understand why this is now a critical issue: today’s gaps are a huge deviation from our universal sense of what is right. n
–Teen sexting: tech can’t fix it–
Under 18s sexting ban? No thanks, Mr Hunt Frank Swain
protecting the comments sections of a website, rely on feedback from thousands of viewers who can flag objectionable content, which isn’t much use in a two-way chat dialogue. And similar content filters on Facebook have resulted in women having their accounts suspended for sharing photos of breastfeeding. How can we hope to build AI that recognises porn, when even US Supreme Court judges have failed to pin down what counts as obscene, only concluding, “I know it when I see it”? Even if we could, we shouldn’t. In the light of the pervasive powers
UK HEALTH secretary Jeremy Hunt has called on social media giants to do more to tackle sexting among the nation’s teens, which he blames for rising cases of mental illness. Yet his proposals for smart locks that stop teenagers sharing sexually explicit images are just the latest example of government demanding magical fixes for complex societal problems. Giving evidence as part of a House of Commons inquiry into suicide prevention, Hunt singled out social media as a key platform for abuse, telling the panel, “I ask myself the “Demands to block explicit simple question as to why you can’t images refuse to engage prevent the texting of sexually explicit with how teens – and the images by people under the age of 18.” rest of us – use the net” He also asked why “word pattern recognition” couldn’t be used to granted by the UK Investigatory identify and stop cyberbullying. Powers Act and porn blockers Hunt’s tech proposals are easy to suggest, but much harder to proposed by the Digital Economy implement. Artificial intelligences can Bill, we should be wary of yet more flag abusive keywords and recognise infrastructure to filter the internet. explicit images, but these are crude “What Hunt is proposing is real-time tools that often fail to understand processing of every image shared context and are easy to circumvent. digitally,” says Tom Crick at Cardiff Most practical filters, like those Metropolitan University, UK.
Hunt’s plea will play well with concerned parents, but Crick, who has been working to reform UK computer education, views tighter controls as not just technically unfeasible, but strategically wrong. “We’re trying to create competent and capable young people who can confidently navigate the internet,” he says, not just trying to protect them by shutting them out. Excluding them could backfire, shifting teen activity onto less regulated services. While protecting children online is clearly desirable, it’s less obvious why tech firms, not parents, should be responsible. “If your child is aged under 12, should they have unsupervised access to the internet?” says Crick. The health secretary’s comments betray our uneasiness about sexual awareness in young teens. There’s no doubt that we’re seeing a dramatic change in norms around sex and sharing sexual content, which comes hand in hand with the potential for abuse through revenge porn and extortion. But sexting isn’t going away, and demands to block explicit images refuse to engage with how teens – and the rest of us – use the internet. If the minister really wants to tackle problems around sexual activity and mental health in young people, he ought to spend less time demanding magical fixes and more time ensuring Britain’s youth can access high-quality sex education and well-funded mental health services. n 10 December 2016 | NewScientist | 19