Wednesday, 29 January 2014

Unstable equilibria: Conan Doyle edition

Gordon Tullock saw the equilibrium in Competing for Aid: the most pitiable beggar will be the one drawing the rent, and so all will compete to be the most pitiful.

Conan Doyle didn't. From The Man with the Twisted Lip's dramatic climax (spoiler alert for those who haven't read it):
“You are the first who have ever heard my story. My father was a schoolmaster in Chesterfield, where I received an excellent education. I travelled in my youth, took to the stage, and finally became a reporter on an evening paper in London. One day my editor wished to have a series of articles upon begging in the metropolis, and I volunteered to supply them. There was the point from which all my adventures started. It was only by trying begging as an amateur that I could get the facts upon which to base my articles. When an actor I had, of course, learned all the secrets of making up, and had been famous in the green-room for my skill. I took advantage now of my attainments. I painted my face, and to make myself as pitiable as possible I made a good scar and fixed one side of my lip in a twist by the aid of a small slip of flesh-coloured plaster. Then with a red head of hair, and an appropriate dress, I took my station in the business part of the city, ostensibly as a match-seller but really as a beggar. For seven hours I plied my trade, and when I returned home in the evening I found to my surprise that I had received no less than 26s. 4d.
“I wrote my articles and thought little more of the matter until, some time later, I backed a bill for a friend and had a writ served upon me for £25. I was at my wit’s end where to get the money, but a sudden idea came to me. I begged a fortnight’s grace from the creditor, asked for a holiday from my employers, and spent the time in begging in the City under my disguise. In ten days I had the money and had paid the debt.
“Well, you can imagine how hard it was to settle down to arduous work at £2 a week when I knew that I could earn as much in a day by smearing my face with a little paint, laying my cap on the ground, and sitting still. It was a long fight between my pride and the money, but the dollars won at last, and I threw up reporting and sat day after day in the corner which I had first chosen, inspiring pity by my ghastly face and filling my pockets with coppers. Only one man knew my secret. He was the keeper of a low den in which I used to lodge in Swandam Lane, where I could every morning emerge as a squalid beggar and in the evenings transform myself into a well-dressed man about town. This fellow, a Lascar, was well paid by me for his rooms, so that I knew that my secret was safe in his possession.
“Well, very soon I found that I was saving considerable sums of money. I do not mean that any beggar in the streets of London could earn £700 a year—which is less than my average takings—but I had exceptional advantages in my power of making up, and also in a facility of repartee, which improved by practice and made me quite a recognised character in the City. All day a stream of pennies, varied by silver, poured in upon me, and it was a very bad day in which I failed to take £2.
“As I grew richer I grew more ambitious, took a house in the country, and eventually married, without anyone having a suspicion as to my real occupation. My dear wife knew that I had business in the City. She little knew what.
If one could have earned a great living in London by being an excellent object of pity, other beggars would have used self-mutilation as substitute for our Mr. St. Clair's make-up skills; it must then have been St. Clair's particular rhetorical skills that drew the rent. Perhaps St. Clair is better considered a busking performance artist in a winner-take-all market. But it still seems a pretty unstable equilibrium.


  1. Conan Doyle is an excellent writer of fiction. The story of the rich beggar with a "house in the country" is simply an urban myth, often used in self justification by those who are too mean to give to the homeless. I have never been a beggar, but I was once a busker. It takes a greater degree of courage than most people could muster.

  2. I think you need to be cautious about using the Quebec study as a comparator. From what you say, it was clearly instituted in the context of a public discourse of encouragement for having more children as part of a 'nationalistic' push.

    This matters, arguably far more than the marginal effects of a financial incentive. People are highly susceptible to social discourses around desirable behaviour, especially when it taps into issues of identity and 'in-group/ out-group' attributions. Further, the size of the Quebec incentive and the fact that it comes as a lump sum (or series of lump sums) also differs from Labour's proposal.

    New Zealand's total fertility rate - as is the case in many developed economies - underwent a marked decline after the 1960s (more than halving). It has barely changed over the past couple of decades and hovers around the replacement rate (see the Stats New Zealand site).

    That decline occurred despite the introduction of the Domestic Purposes Benefit in 1973. You might want also to look to see if there was any minor downward blip when the Family Benefit was axed and Family Support was instituted (Family Benefit could be capitalised and was universal; family support was 'targeted').

    I would be very surprised if this policy - were it to be enacted - had any long term effect on total fertility rate (the main concern of your post appeared to be about total fertility rate, not some sub-set). That is determined by far more fundamental factors than financial incentives - e.g., the general state of the economy, women's educational levels and opportunities for financial independence, cohort demographics, etc..

    There is also the alternative argument in any case: That such a policy would merely, and only partly, counter the very probable (unintended?) negative effects on the fertility rate of increases in job insecurity, increases in income inequality, housing unaffordability, near-stagnant wage growth for many, etc..
    Given the above, I also think it's unwise to provide even minimal encouragement for Hooton's speculations.

    To be honest, I'm unsure why you want to focus on this minor point - but it's your blog I guess. (And why 'Moar'?)

  3. That's possible, but the "Quebecois should have more kids" discourse was pretty prevalent both before and after the policy, if I recall correctly. Further, and again if I recall correctly, that the policy seemed to be doing a lot to encourage non-french permanent residents to have more kids was one of the reasons it was axed. Both of those would lean towards "it was the money that did it", but it's not easy for me to check whether my recollections of newsmedia at the time are right.

    The big payments in Quebec came quarterly rather than weekly; I can't see why that would make a difference.

    I think Milligan's figures lean against Hooton's kiddie-mill hypothesis, but that it's sure worth keeping an eye on because even if low risk ex ante, it would be a very bad outcome.

    I hit on this point because a whole pile of folks very loudly denied the possibility that it could happen and thought it needed correction.

    As for moar...