Democratic Innovation and Impact Investment are Similar–Why This Matters

My master’s degree (UCL, 2023) was in Democracy and Comparative Politics, and my dissertation focused on democratic innovation.  In writing it, I noticed an explosion in academic literature regarding innovations in democracy, in particular since 2010[1]. For a relative newcomer to the field, the passion and volume of academic work offered hope that the continuous global decline in support for democracy[2] might be halted or even reversed.  At its core, simplifying considerably, were the concepts of citizen engagement and deliberation. The first would reinvigorate democracy and bring greater legitimacy to political decision-making. The second involved initially providing participants with information and objective expertise, who could then openly discuss and debate issues in the facilitated pursuit of a consensus, which would formulate policies that possessed greater legitimacy AND were objectively better than those which result from current legislative processes.

Immersing myself in this hopeful world was exhilarating.  Not only was there a growing abundance of academic literature, but thousands of real-life cases were taking place all over the world[3] and important political leaders seemed committed to the ideals of innovation in our democracies[4].  My excitement waned however as I returned to the real world (from the “groves of academe”).  Hardly anyone I knew was aware of any of these democratic innovations and in our day-to-day lives whatever innovations had been implemented seemed to have had very little impact.

This reminded me of my experience in the impact investment world which began roughly 25 years ago. Pioneers (less so academics in that case) were publishing reports about this emerging world of social enterprise and investment (it was called that before Americans insisted on the shift in nomenclature to “impact investing” in 2007) and the arguments in support.  Also, a host of new mission-oriented companies (think Body Shop or Ben and Jerry’s) emerged which added “doing good” to doing well.  I can remember vividly this sense of frustration that an obviously good idea which was destined to improve the way in which our financial markets and commercial enterprises operated was pretty much ignored. Again, the average “man in the street” had absolutely no awareness of the shift and in terms of genuine impact, it was microscopic.  Despite the noble efforts of these committed pioneers, and the seemingly obvious benefits that such a shift would engender, the commercial and investment world were not changing.

What I do recall vividly is the frustration of these pioneers as they presented compelling, passionate and extremely well-intentioned arguments in favour of incorporating impact into the world of investing, to no avail.  They were met with comments like, “lovely idea, we will get back to you”.  Investing institutions feared that bringing impact into the equation would diminish returns.  Large corporations worried that taking non-financial factors into account would threaten profitability. 

I was reminded of this when reading the equivalently passionate academic pieces extolling the virtues of citizen engagement and deliberative democracy, and the mounting frustration at how little was actually changing in the political realm.  What I saw then and now was that wagging your finger at the people who benefit from the status quo and telling them what they “should” do and demanding change because “it’s obviously the right thing to do” very rarely result in any notable progress.  At best, you will get “lovely idea, we will get back to you”.

Since that time the impact investment world has grown by leaps and bounds.  From non-existence in the early 2000s, the sector has mushroomed to $1.164 trillion in 2022[5] according to the Global Impact Investment Network’s latest published report.  This sum is growing at 10-20% per annum, much faster than the overall investment sector.  In the UK, Better Society (was “Big Society” until recently) Capital estimates that the value of UK social investments in 2022 was worth £9.4 billion, roughly 11 times (!) the level in 2011.  Large companies who sneered at the idea of impact in the early part of this century has restructured to take impact into account, which has been well-received by customers and employees alike—some (8,653 at last count) have even become “B Corporations”[6].

I contend that critical to this was a shift in the language of the pioneers, as they attempted to persuade large institutions and corporations.  Instead of finger-wagging or preaching, the emphasis was placed on how it was in the selfish interest of these large organisations to undertake the shift. For example, large investment firms became convinced that impact assets under management would grow rapidly (this has clearly proven to be the case), and that in addition the fees for managing these assets would be higher, the money would be “stickier” (less likely to leave the institution once it arrived then mainstream investments) and that investment returns would not suffer.  Corporations saw the benefit in customer and staff engagement. 

I believe a similar shift is needed in the area of democratic innovation.  My dissertation therefore focused on trying to identify the factors that might convince politicians and civil servants to undertake exercises in democratic innovation because it was in their interest to do so.  As part of my work, I surveyed dozens of democracy technology companies across Western Europe and asked what they perceived to be the factors that do entice politicians to undertake democratic innovation. To be fair, these companies noted that some politicians were willing to do things simply because it was “the right thing to do”.  But this was a small minority.  The bulk of the politicians and civil servants were more effectively persuaded when the arguments focused upon factors of tangible interest. I grouped these factors into “7 Cs”—for example, cost savings or compliance (to national or international requirements).   

The dissertation was obviously written for academic purposes, so is tediously dull, but if readers of this blog wish to have a copy please just e-mail me at rod@schwartzuk.com and I would be happy to send it.  I do so not to bore more readers with my academic prose, but in order to try to persuade those who care about the adoption of democratic innovations, focused on citizen engagement and deliberation, to concentrate on factors which are in the selfish interests of politicians and the civil servants who serve them. This may feel like a compromise to purists, but I would argue that getting politicians to do things which improve the functioning of our democracies is more important than the elegance of academic logic deployed in the course of this persuasion.

 Rodney Schwartz, London, 11 May 2024

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021.  This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades.  For those interested in why I started this blog click here, and to read my declaration of known biases, click here.  I welcome any comments.


[1] Elstub, S. & Escobar, O. (2019) “Handbook of Democratic Innovation and Governance”, Elstub S. & Escobar, O. (eds.). Northampton: Edward Elgar Publishing.

[2] V-Dem (2023) “Democracy Report 2023: Defiance in the face of autocratization”, Gothenburg: University of Gothenburg, V-Dem Institute.

[3] Participedia identified 2,228 cases as of 4 May 2024 (https://participedia.net/)

[4] https://www.theguardian.com/cities/2014/oct/08/parisians-have-say-city-first-20m-participatory-budget  downloaded 4/5/24 at 16:14

[5] https://thegiin.org/assets/2022-Market%20Sizing%20Report-Final.pdf   downloaded 4/5/24 at 16:47

[6] https://www.bcorporation.net/en-us/  downloaded 11/05/24 at 16:02

The Case Against Representative Democracy

There is a strengthening case against our form of representative democracy. Recent events seem to highlight the fact that citizens do not feel especially well-served.  Also, being an MP seems an increasingly unattractive one for the representatives themselves.

Let’s start with the second point.  One of the issues emerging from the fiasco of the recent parliamentary debate on Gaza is that MPs feel genuinely concerned for their own welfare and that of their families. Protesters have targeted the homes of those they do not agree with and hate speech and death threats pour forth on social media platforms.

Jo Cox MP was murdered in 2016 by a white supremacist Sir David Amess MP was killed in 2021 by an Islamic extremist.  Apart from those MPs murdered due to the Irish situation, one would have to go back to 1812, when the previous MP was assassinated—Spencer Perceval, who was also Prime Minister.  We cannot draw a trend from two events, but one is left feeling that something has changed.    

UK politicians face exhausting schedules, often work late into the evening, suffer constant scrutiny into details of their private lives and job insecurity.  Some further indignities of being an MP are well-described by Rory Stewart in his book Politics on the Edge.  Given the above, it is hard to argue that MPs are lavishly paid.  A backbench MP earns £86,584 per annum, slightly below the starting salary of a London Business School MBA, and a fraction of what the median FTSE 250 CEO[1] earns (£1.8m).  Taken all together, this does not look like such a great job.

Conversely, citizens seem increasingly disillusioned with the work politicians conduct on their behalf.  Ipsos reported[2] that trust in politicians has reached its lowest level since the survey began in 1983.  According to the report, “Just nine per cent of the British public say they trust politicians to tell the truth, down from twelve per cent in 2022. This makes them the least trusted profession in Britain.”  Based upon interviews of voters in recent byelections, pundits and anecdotes there is little enthusiasm for politicians of any stripe (with perhaps those of the far right providing a worrying exception).

Isabel Hardman’s recent book, Why We Get the Wrong Politicians, and many others, help us to understand some of the reasons that the “wrong” people often pop up as politicians.  Some of these also offer reforms to increase accountability, diversity, effectiveness or anything else we care about, but it seems worth asking, “why do we bother to have representatives in our democracies at all?”

We muse, misty-eyed, on historical examples of “real” democracy in action—Athenian democracy, where citizens (of a select type) would legislate, or the Icelandic “Althing”, where the entire nation would meet every few years to decide how to govern themselves.  Such idealised notions of highly participatory democracy can be sustained even to the time of Rousseau, who imagined this working in his hometown of Geneva, but for the large modern nation state this is unworkable.  Representatives of the people were needed to legislate on their behalf and in their interest.  In practical terms we could no longer all fit in the same assembly hall (or in one open field, as in Thingvellir, Iceland).

Such assemblies brought many advantages.  Aside from the practical benefits, for people such as James Madison, one of the “founding fathers” of US democracy, it would avoid mob rule.  The “great and the good” would assemble, debate, and govern wisely.  Certainly, during my childhood, it seemed as if only the “best and the brightest” emerged to become our national leaders.  I was very naïve!

Recent events make this position harder to uphold.  Perhaps it is the relative wage differential, or a host of other factors putting the “best” people off becoming elected officials?  Whatever the explanation, if we as a nation are so unsatisfied by how our “public servants” perform on our behalf, then we should feel motivated to change things—leaving aside whether we actually have the power or authority to effect such a change.

Jamie Susskind, in his insightful book, Future Politics, argues that there are many different ways we might choose to govern ourselves, and lists many tools we might deploy in doing so.  Dramatic advances in technology mean many of us can be in the same virtual room at the same time, and sophisticated technologies exist for managing deliberation with sizable groups.  Even if we cannot have all 60+ million Brits debating online, we do now have the ability to ask all citizens, regularly, about important policy questions.  Of course this could become tedious, but a shift towards recurring citizen interrogations (a la Switzerland), even if only consultative, would be a huge step forward.  The idea that democracy is realised by a vote every five years for a candidate of one of a half dozen parties that hardly enthuse is clearly undershooting our democratic potential.

Polly Curtis argues persuasively in the Financial Times[3], earlier this week, for more Citizens’ Assemblies (CAs).  These have been playing an increasingly important role in helping to solve thorny questions which politicians seem incapable of addressing or unwilling to address—like abortion legislation in Ireland.  These could play an even bigger role.  Anyone who has sat on a jury (I have) can see that a random selection of citizens frequently behave with far more dignity, and no less knowledge or intelligence, than our MPs.  Random groupings such as CAs and juries are also more reflective of the societies in which we live and partly for this reason may seem to have greater legitimacy.

As we consider the relative merits/demerits of representative democracy, we must also reflect on the risks in concentrating power in few hands.  The disadvantages seem to be increasing and raise questions about the ability of liberal democracies to sit alongside free-market capitalism.  In the US, the influence of money on politics is diabolical, a phenomenon which reached UK and European shores many years ago.  For powerful corporations, buying influence or favourable legislation, or killing unfavourable legislation, is a far more attractive use of capital than investing in plant and equipment, with a higher/more certain return.  This has led to the conviction that governments legislate for the rich and not in society’s best interest, supported by the growing concentrations of wealth.

Curtis articulates many of the important advantages of CAs, and how they help politicians and the public to work together in solving tricky problems.  CAs also enhance the legitimacy of decisions by making them more inclusive—they are carefully formed to reflect the relevant population—unlike Parliament.  However, Curtis adds that “CAs do not replace parliaments”.  But perhaps they should?  She also notes that they “should not allow politicians to swerve accountability”, which is a wholly fair point, and the need for accountability is one of the strongest arguments in favour of representative democracy.  However, an election every five years feels like accountability in the thinnest sense. 

I have no doubt that we are unlikely to see the end of representative democracy, or the abolition of parliaments in my lifetime or in the lifetimes of my children.  However, if we start from the premise that we can only tinker, we will fail to undertake the radical reforms which are necessary and now technologically possible.  Doing so is very much in the interest of citizens, but also may make the lives of politicians more enjoyable and ultimately safer.


[1] https://highpaycentre.org/wp-content/uploads/2023/08/Copy-of-CEO-pay-report-2023-1-1.pdf downloaded 27/2/24 at 17:23

[2] https://www.ipsos.com/en-uk/ipsos-trust-in-professions-veracity-index-2023 downloaded 27/2/24 at 17:29

[3] Financial Times, Monday 26 February 2024

The Joy (?) Of Finishing a Dissertation

“You must be thrilled to get that off your plate!”, was the refrain I heard from nearly everyone I spoke with after completing and submitting the dissertation for my masters degree at UCL.  Well, errr, ummmm, actually the truth is that I wasn’t.  Having dedicated most of the past 24 months to my learning in the area of democracy and innovation, I was actually sad that this part of my journey from business was actually at its end. In fact, as my finger hovered above the ”send” button, it was nothing like joy or relief which I felt.

This was not the case the last time I handed in academic work, over four decades ago, at the Simon Business School of the University of Rochester.  Back then I was as thrilled as any normal student to be finished with education and to start “real life”.  Something is really different in approaching a degree as a mature student–especially if, like me, the degree was not designed primarily to fulfil some new career aspiration.  This was perhaps a component of the exercise, but the prime motivation was the learning in and of itself.

For anyone considering going back to school and studying a subject at any level of depth, I cannot recommend it highly enough.  Learning new things is nearly always interesting, but for myself, the process of achieving some level of “mastery” of any new subject is its own reward (the masters degree is therefore well-named). I had been interested in democratic innovation (the subject of my dissertation) for some time and had even begun reading on this subject before the formal course began.  Two-thirds of the way through that work, my spirits lifted as I began to make connections, become familiar with certain authors and their work, and see the big picture of a particular subject in some context and within a particular framework. For me this fostered a sense of pure joy.

Beyond joy, I derived a real sense of purpose from this academic exercise.  At my age (I am now 65) this becomes increasingly important.  As I look around me at friends my age or consider those of my parents when they were in their twilight years, there seemed a discernible difference in mental and physical health between those individuals who had and did not have a sense of purpose and positive engagement with the world.  Frankly speaking, the prospect of a quiet retirement fills me with anxiety and some measure of dread.  My father worked until his late 80s, and not only did this keep him sharp, but I suspect it kept him alive (he is now 95).  In a more mundane sense, studying kept me engaged during some of the Covid lockdowns—for which I am extremely grateful.

What I have not secured as a result of my learning is a clear sense of what I will do with it or how I will devote my talents professionally in the years to come—many have asked, which I take as a compliment and that they believe there is something useful I might be able to do.  My studies have however resolved for me my “direction of travel”.  I know now that I would like to spend most of my remaining useful years in the pursuit of learning about democratic innovation and how it can be deployed to improve the functioning of our faltering democracies.  I was not wholly confident that my degree course would lead to this degree of certainty, but I am immensely glad that it has.  What else I will do around democratic innovation (I am currently a senior adviser to the Innovation in Politics Institute in Vienna) remains to be seen, of course. It depends on whether or not I can be of any use to practitioners in the sector and if I can persuade them of that.  Let’s see.  But I am hopeful that the combination of lifetime experience with private firms and charities at all stages of development combined with the beginnings of some knowledge regarding the subject of democratic innovation will be of use.  And ultimately I believe we all want to be of use, somehow, in some way, to someone.  This is now my quest.

My masters degree, and in particular my dissertation, fully absorbed my capacity to do any other learning or writing.  I had been playing at learning French again, which had been going extremely badly, and my efforts to sustain this blog fell by the wayside. I am obviously hopeful that this piece I have just penned (the first in six months) will be the first of many and of course, I hope that they are of some use to those of you who are struggling with some of the same questions. 

As I have mentioned before this blog is designed for those with an interest in politics as well as those with an interest in learning after a career.  I genuinely hope that my reflections, which I have tried to capture as honestly as possible, will be of some value to some of you.

Rodney Schwartz

London, UK—20 September 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021.  This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades.  For those interested in why I started this blog click here, and to read my declaration of known biases, click here.  I welcome any comments.

The Departures of Ardern and Sturgeon Reveal a Sad Political Truth

Within the space of a month the western world has lost two of its most powerful and respected political leaders following the resignations of Jacinda Ardern on 19 January and Nicola Sturgeon on 15 February.  As they are both women, still sadly a rarity at the top of government, commentators have been drawn to view these two resignations in a similar light and draw similar conclusions.  The common themes are “burnout”, the pressures on women, the toll on them both, and the immense personal sacrifices politicians must regularly make.

In in reading Ardern’s resignation letter, and in viewing the actual speech, one gets a clear sense of the exhaustion she seemed to feel.  She herself confessed that she “no longer had enough in the tank to do it (the role of PM) justice”.  Fair enough. 

However, this is not a fair reading of Sturgeon’s letter, neither as it is written or in its delivery.   Whilst Sturgeon does admit that she is “a human being, as well as a politician”, this hardly seems a revelation.  She also refers to her niece and nephew, who have grown from infants to 17 years of age during her tenure in high-level politics.  Nevertheless, this does not strike me as a story of exhaustion, pressure, or sacrifice.  Sturgeon notes that she absolutely possesses the “resilience to get through this latest period of pressure”, and that she has resolved “seemingly intractable issues”, on many previous occasions.  However, she makes a strong and convincing case that: 1) Politics has become personalised in Scotland, and judgements are too often about her rather than the underlying issues, 2) That this is undermining the causes she cares about and has dedicated her life to addressing—most importantly Scottish independence, 3) That the SNP, like all parties, needs to move on beyond a single individual, and, 4) That someone else might be better suited to reach across the divide and bring along those who are required to yield a solid majority in favour of independence,  Essentially, she has convinced everyone she is capable of convincing, and that another leader might be more effective in broadening support and reaching across the divide.

So frankly, I find it a bit irritating and patronising that this “ahh, the poor things were exhausted” theme has emerged. Women in politics are often subjected to the most simplistic stereotypes, and this seemed once again to be the case.  It is lazy journalism and not an accurate portrayal of Sturgeon and what she asserts is behind her decision.  I pray for a time when women politicians are judged according to similar standards to their male counterparts, rather than made to fit into simplistic tropes.  But this is not the main point of this post. 

Whilst it is true that both Ardern and Sturgeon lead nations (each of which has between 5.0 and 5.5 million), and that both are women, I believe there is noble common ground which is the most interesting thing about these characters and their 1Q23 decisions.  These two leaders see themselves as true public servants, who owe it to themselves and their respective countries, to give it their best—and if they cannot, to move on.  Although they possess very different styles and personalities, both seem to me to have a sense of responsibility, of duty, of respect for the parties they led and the offices they held, as well as the citizens who elected them.

The contrast with the two selfish megalomaniacs who led the US and UK until recently could not be greater—I am of course referring to Boris Johnson and Donald Trump.  Whatever one thought of their politics or their policies, it would be challenging in the extreme to see either of these two men as anything but self-serving.  The idea that either cared deeply about their citizens, their parties, their offices or their governmental responsibilities is laughable.  There was almost nothing or no one they would hesitate to throw under a bus in pursuit of their own self-aggrandizement.  I am not sure even they knew what goals or objectives they were pursuing, beyond the need to stay in power.  Putin, Netanyahu, Erdogan and others are more extreme examples of this type of politician—what will they not do to remain in office?   It is here that the contrast with Ardern and Sturgeon is so great—not in their gender, or their tenacity, or their resilience, but in their values, in their sense of decency and in their respect for their roles as public servants.

It is true that Sturgeon and Ardern are women—but not all female politicians possess these commendable character traits.   I confess, I do struggle to come up with male politicians who have resigned whilst at or near the top of their game, and before they were thrown out of office, either by their party or their electorate.  Perhaps Paddy Ashdown was an example.  He led the Liberal Democrats (the UK’s third largest party) to more than double their seats in the 1997 general election (from 20 to 46, in comparison with 11 after the last election in 2019) and then resigned of his own accord, eventually to become UN High Representative for Bosnia Herzegovina from 2002 to 2006.  However, Ashdown was never elected leader of the UK, and thus his stepping down from the LD leadership was a vastly different class of decision.  If there are men you can think of, I would be delighted to hear from you.

So I think a more careful reading of these two departures is about a more profound and depressing political truth.  The people prepared to put up with the bullshit, and survive and thrive as leaders, are far too often the LAST people we should want to have in office—and those we might most want to keep are those who might be most inclined to depart sooner than we may wish.  The nearly simultaneous departures of Sturgeon and Ardern bring this depressing fact into sharp relief.  How on earth can we fix this?

Rodney Schwartz

London, UK—17 February 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments.

Is Artificial Intelligence Going to Destroy Education?

There has been much public comment recently regarding the artificial intelligence chatbot ChatGPT and its potential impact on education. In the Financial Times on 23 January, an article by Andrew Jack {1] cited a Wharton (University of Pennsylvania) Business School professor who noted that essays “written” by ChatGPT would probably secure a B or B- grade and thus outperform a number of his students. The professor noted that, “this has important implications for Business School education”. “Our whole enterprise in education is being challenged by this”, stated another professor from the (University of Michigan) Ross Business School, who described himself as “…… one of the alarmists”.


As a master’s student at UCL, issues such as these around “the point of education” have been sparking my interest, so I asked a professor I know what she thought about this development. She said that her colleagues largely echoed the University of Michigan professor’s fears. Others I spoke with also concurred. It seems a state of panic bordering on hysteria is settling in among academics, who see AI as having the potential to seriously undermine education—and this is not only in business schools or at the masters level.


To me this raises two important questions, the first is of a more philosophical nature. What actually is the point of education? What is education really for or about? If education is solely about getting good grades so that one can advance to the next level of education or receive a brilliant job offer, then these professors may very well be right. If grades are what matters in education, and any idiot who has access to the internet can get a B or B-, then things seem hopeless indeed.


But I have a rather different view concerning education, one that seems rather old-fashioned in this day and age, which is that education is about what we learn, how we interact with others in the process, how our understanding of the world and our place in it expands, how we challenge our biases and predispositions in pursuit of “truth”, a destination which is never reached, but to which we feel we are getting ever closer. The testing regimes in place at so many universities, in my opinion, act to the detriment of education and if ChatGPT is making a mockery of this regime, then it is doing society a public service.


I was on a call earlier this week with UCL student representatives and apart from the strikes the main subject was the grading regime, how that interacted with the holiday schedule, and how assignments need to be used to “encourage” students to attend lectures. The point was made that if grading exercises failed to cover some classes then students would simply not attend those classes, and therefore we needed to shift the examination schedules, to punish students who would skip some classes. To me this felt like the examination tail wagging the dog of learning. If students only attend classes in order to accumulate material on which they might be examined, we have really reached a very sorry state in British academia. If students want to skip classes that are not to be included in grading exercises, let them. It will be their loss, and their fees they will have wasted. And the knowledge they take into their future lives will be reduced.


The other, more practical, question is even more interesting. While it seems to be the case that ChatGPT enables students to submit essays without doing any work, it has long been true that students have had others (real people as opposed to chatbots) write their essays for them. A Forbes 2019 article noted that 7% of students admit to having others do their assignments for them [2] . I am sure the actual numbers are higher. Googling this on the internet turned up a large number of firms (it seems there is quite a sizable industry dedicated to assisting students in cheating) keen to undertake this work. The universities, of course, have known about this for some time, but somehow nobody has become an “alarmist” until now—one wonders why. I sit in class with students who cannot speak any English, yet my university allegedly has tested each of them to ensure they have sufficient language skills to participate, but it seems obvious that they have had substantial “help” in preparing their applications. I feel for these classmates as they struggle to cope in class, but at the same time, I also resent their inability to participate in group discussions. This is a real shame, because their co-nationals who can speak English greatly enrich our conversations and our collective experiences, offering insights about unfamiliar countries, and by sharing some very different world views.


This is not only a university phenomenon—such cheating is rampant at school as youngsters compete for places at prestigious universities (in the USA there is a famous case [3] where chicanery was involved in securing a place at a prestigious nursery school, but alas, the US is a bit extreme in this regard ). I know many parents who do much more than simply proof read the work of their children as part of A level exercises. Some write entire essays which get submitted as the student’s work. Others draft what are ironically called “personal statements” for their offspring, which comprise an important part of the applications for universities. “Everyone does it, you know, and it would be wrong for my child to be placed at a disadvantage,” they might well say. The British middle classes are uniquely adept at transforming what is essentially fraud into a justified and even noble act of balancing the scales. There is not a thought for the millions of young people who lack the means, or sophisticated/well-educated parents and are forced to do their own work.


I think part of the panic is reflected in the fact that it is not only the privileged who can cheat, (which I guess was deemed OK, as there was no sense of hysteria previously), but now everyone—even, GOD FORBID!!, the poor. My fear is that instead of jettisoning this wasteful, harmful (for the pressure it creates) and pointless examination regime, universities will ramp up checks, force students to sign even more statements, return to written supervised exams, and undertake a range of investigative exercises to clamp down on the possibility. I wish they wouldn’t bother. These cheaters will eventually be found out, either in universities in which they cannot keep up, or in jobs where there are found to be woefully inadequate. I do not think mummy or daddy are really doing them any favours—although I am sure they think they are.

My hope, which I do not imagine will be realised, is that we look for other ways to advance learning. The British education system is far too test-oriented—maybe the ChatGPT “affair” can crash this bankrupt regime? We live in hope.

Rodney Schwartz
London, UK—7 February 2023


I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments.

[1] https://www.ft.com/content/7229ba86-142a-49f6-9821-f55c07536b7c    downloaded 7/2/23 at 16:05

[2] https://www.forbes.com/sites/nataliewexler/2019/09/14/paying-others-to-write-college-essays-involves-more-cheating-than-meets-the-eye/?sh=728f67067662 downloaded 7/2/23 at 15:33

[3] https://www.nytimes.com/2002/11/14/business/wall-st-and-the-nursery-school-a-new-york-story.html  downloaded 7/2/23 16:14

Issue Entrepreneurship and the ‘Sleeping Giant’ of Income Redistribution

I was listening to BBC Radio 4 News in March (22/3/23) and was particularly interested in an interview of Sushil Wadhwani, who runs his own asset management firm, and for three years was a member of the Monetary Policy Committee of the Bank of England.  His CV is that of a mainstream fund manager.  In the interview he mentioned his surprise that corporate profit margins had remained so high despite the cost of living crisis.  Serendipitously the Financial Times published a chart on its front page that day on corporate profit margins in the United States which I have copied below. What is very clear is that in these hard times not everyone is suffering.

It seems to me, and to many of those I speak with, absolutely astonishing that this disparity is allowed to continue. With inflation pushing so many households into poverty, it feels bizarre that there has been no major party clamouring for an adjustment which eases the burden on those who are struggling and increases the demands on those who appeared to be doing well through increased taxation. 

I often wonder why few of the opposition parties appear willing to tackle this head on. There is obviously a strong moral case for shifting the burden away from those who have been forced into food banks and making difficult “eating versus heating” decisions over the past six months, and onto those “with the broadest shoulders”. Furthermore, there is also a strong economic case. In a country like the UK, which is suffering severely from anaemic economic growth, it is obvious that tilting the tax system in a way which put more disposable income in the hands of the bottom third of earners, at the expense of the top third of earners would increase economic growth. This stems from the fact that the marginal propensity to consume for those at the bottom must be nearly 100% (they will spend all marginal income on essentials and perhaps repaying debt) whereas extra income for the wealthiest in our society is not spent on consumption but rather in pouring more capital into financial assets.

The only reason a cynic like me can think of is that opposition parties, like the government, receive their campaign funding from the wealthy who are typically antagonistic towards the redistribution of income.  Also, talk of redistributing income has the feel of a “third rail” issue for politicians—touch it and you go up in smoke.  I am no longer certain this is the case.

I have been studying “orphan issues” like this for my master’s degree at UCL. These are just sitting there waiting for “issue entrepreneurs” to pick them up and run with them, as they seek the support of the electorate.  This concept of “issue entrepreneurship” seems to have been developed by theorists Sara Hobolt and Catherine de Vries in a 2015 article (“Issue Entrepreneurship and Multiparty Competition”).  In it they introduced the concept but also identify the circumstances under which political parties may or may not grab hold of such issues.  There are two primary points they make, the first is that “political parties are more likely to become issue entrepreneurs when they are losers on the dominant dimension of contestation”, and that these “parties will choose which issue to promote on the basis of their internal cohesion and proximity to the mean voter on that same issue”.  It remains to be seen if these propositions are correct and if the current opposition parties are willing to take the risk.

In prior research, written in 2007 by Cees Van der Eijk and Mark Franklin, (“Potential for Contestation on European Matters at National Elections in Europe”) the authors identified the issue of EU integration as a potential “sleeping giant”, ready to dramatically shift political behaviour in Europe.  This issue had lain dormant for some time but was seized upon by Eurosceptic and far-right parties, with notable success.

I wonder if the UK Labour party has an entrepreneurial bone in their political body………….   

(PS—this post was written weeks ago, but I forgot to hit “send”.)

Rodney Schwartz

London, UK—23 April 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments

“Peak-End Rule”: Voter Perceptions are Skewed by Recency

I try very hard not to bore readers with too many of the dozens of articles that I, as a master’s student, should read each week. Nevertheless, I feel obliged to share some insights from a 2014 article by Andrew Healy and Gabriel Lenz (“Substituting the End for the Whole: Why Voters Respond Primarily to the Election- Year Economy”) because it is highly relevant, especially as we approach key election in 2024 in the UK and USA.  In this impressive analysis, informed in part by the work of Nobel Prize winning economist/psychologist Daniel Kahneman, the authors demonstrate convincingly that US voters consistently overweight economic performance in the fourth year of a presidential term when deciding on how to vote for an incumbent President.

What is especially interesting is that when voters are asked how they wish to assess a President they consistently claim that they would like to do so based upon the cumulative results of the full four year Presidential term. However, when it comes to voting, they historically and significantly overweight economic performance of the fourth year.  In part, this reflects faulty memories and the fact that going back and assessing the full term’s results requires intellectual work, which many voters seem unwilling to do. Instead, voters appear to unintentionally deploy a heuristic; how the economy feels as they are voting at the end of the term. The unfortunate result of this is that Presidents who may be competent economic managers over their full terms are less favoured than are clever politicians who figure out how to successfully manipulate the economy to suit the electoral calendar. This can mean that longer term national economic prospects are damaged in pursuit of a false economic uplift to suit an incumbent president (or Prime Minister, for that matter).

A good example is how voters perceived Presidents Carter and Clinton.  US GDP growth was stronger over Carter’s full term, but weak in year 4, and he was booted out of office (although there were other factors).  Cumulative GDP growth under Clinton was weaker, but his strong performance in the fourth year helped to give him a second term, the research suggests.

Apparently such a phenomena is observable in many other aspects of life. The article refers to examples of experiments undertaken in the area of gambling, vacations, TV advertisements, and colonoscopies, among other areas.  The authors specifically cited an example where individuals are asked to stick their hands in 14 degrees centigrade water for 15 seconds, and then do the same for 90 seconds.  Without letting them know they gradually raised the temperature in the final 15 seconds from 14 to 15 degrees. When they were asked afterwards which ordeal they would like to repeat, a disproportionate number wished to have the second experiment, even though they will have to endured 30 seconds of 14 degree water as opposed to 15 in the first example, and three times as much cold water overall. However, the milder temperature right at the end biases their decision-making process. Theorists like Kahneman and others call this the “Peak-End Rule”, where the feeling at the end of an experience dominates the individual’s overall impression.

This is all great stuff and highly amusing but is really a serious issue for our democracy. The results are so significant that it means that there is an extraordinary incentive for politicians to jeopardise the long term interests of the country in order to get the right economic result as an election approaches. I suspect this will be true for Joe Biden in 2024 and my hunch is that Rishi Sunak, the Prime Minister of  the United Kingdom, will have a hard time resisting the temptation to announce a raft of vote winning measures (my bet is for tax cuts) at the end of his term in 2024. Healy and Lenz suggest that the best way to address this is for governments to make sure that people are fully informed about the cumulative impact of their regimes and that this will ensure voters take the full term of their governments into account. This is an extraordinarily naive suggestion and I place the probability of this UK Government doing that at precisely 0%–same for the Democrats in the USA.

If the UK Labour opposition has any sense, and sometimes I doubt that they do, they will start to bang the drums now about the unaffordable electoral bribes which are surely coming down the pipe.  We have seen the first instalment of these in the budget just announced which lavished upon the top 1% of earners significant and generous pension benefits—this at a time when the bottom 80% are struggling to make ends meet.  I doubt the Tories will adhere to the “fiscal discipline” they normally shout about, and which is one of the justifications for paltry public sector wage growth.   

If oppositions do not point out this is an issue to voters, and do so early enough to prepare them for the bribery that will undoubtedly follow, they only have themselves to blame.  But it is not only they who lose, but all of us who suffer from the damaging long term consequences of the Peak-End Rule and the perverse incentives it creates for politicians.

London, UK—17 March 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments

On the Need for Consistency and the Avoidance of “U-Turns” in British Politics

In recent weeks I have devoted several blog posts to my disappointments in studying for a master’s degree at UCL in London. I now fear that I am presenting a misleadingly negative picture of an experience which has been relatively positive, whether if it is despite or because of the university. There are some real joys in my learning experience—allow me to share just one.

We had been learning about what causes European citizens to vote for far-right parties—obviously, a matter of topical interest.  One aspect of the analysis engaged in by theorists is to discern whether cultural views or perceived economic predicament were a better explanatory factor in judging the likelihood of individuals to vote this way. I had read a piece by Thomas Kurer and Briitta van Staalduinen (“Disappointed Expectations: Downward Mobility and Electoral Change.” American Political Science Review, 2022).  The authors described a concept called “status discordance”, which took into account a person’s reasonable life expectations based upon their original family situation and compared it to the reality of their economic achievement. For many decades in the West it had been taken for granted that each new generation will be better off than that of their parents.  This presumption has been severely undermined by economic realities.  Kurer and van Staalduinen contend that the greater the extent of this status discordance, the more aggrieved people will feel due to the economic gap in the realities of their lives and the more likely they are to vote for right wing parties (or, one might think, any extreme or non-mainstream party).  The statistical analysis they undertook seemed a bit complex to me, but in the end I became utterly convinced by their argument.

This certainty lasted about 20 minutes, when I followed it up by reading a piece by Yotam Margalit, who made precisely the opposite claim (“Economic Insecurity and Causes of Populism, Reconsidered.” Journal of European Perspectives, 2019). He critiqued (not Kurer and van Staalduinen individually), but their point of view that economic factors were dominant in the decision to support right wing parties.  For Margalit, this concentration on economic factors missed the importance of cultural ones, which he believed were ultimately the true causal factors, which are sometimes hidden due to the research methods used.

His piece was too long to describe at length, but he cited several studies which showed relatively weak relationships to economic factors once cultural factors were isolated.  Margalit argued that, “People may also view economics-based arguments against immigration as more socially acceptable than ones couched in cultural terms and thus may overreport the former as the justification for their stance.”  He gave an example from a 2010 study by Alexander Janus which tried to separate these factors by dividing a sample randomly into two groups.  He asked one group to read three pretty neutral statements and then asked if they agreed with the total number of statements (but without having to agree/disagree with each).  He then added a fourth statement (“Cutting off immigration to the United States”) and asked the second randomly chosen group if they agreed with all four.  The percentage agreeing dropped from 61% to 42%.  By hiding a statement which might be socially undesirable to object to amidst three others, Janus was able to identify the percentage likely to be opposed to immigration in a way that would pose no “social risks” to the respondent.  This is just one example of many used to by Margalit to make his point.  Although I began the article feeling very sceptical, by the end I was convinced, and my opinion had changed by 180 degrees!

Which position is factually correct is irrelevant to the point I wish to make. Instead, what I have learned is the utter joy of changing ones view on a dime when presented with countervailing evidence one finds compelling. At its best, academia provides pathways and methods to seek “the truth” and the freedom to shift about in pursuit of it.

I used to believe that philosophical consistency was of great value. What I have learned during the course of my study and in the example I have shared above is that there is something special about an environment that ought to and does permit this ideological wandering. At a much earlier point in my life I argued passionately concerning the intrinsic value of intellectual consistency. I was chided by a woman who quoted Emerson to me.  She said, “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.”  She was right and I laughed out loud—and never forgot that line!  I have thoroughly enjoyed the intellectual knockabout and the constant shifting of views that my educational experience affords.  Long may it continue.

However, I was listening to the radio over the weekend, hearing about the sad saga of Tory ex-Health Secretary Matt Hancock, whose private WhatsApp messages have now been publicly disclosed. So much of this story is pathetic, humorous, disturbing, engrossing, or worrying, depending upon your point of view.  For readers who are not from the UK and have not been watching this story, I am pretty sure it’s not worth going into the gory details. Suffice it to say that a minister acted badly and got caught out—nothing new, really—a bit of sex, arrogance and wide-ranging incompetence.  The radio commentator had made one important point that UK government ministers seem to find it incredibly difficult to reverse a policy once it has been decided upon, even in the face of new information which suggests the policy may have been wrong. This is especially troubling during a pandemic when lives can be saved or lost based on policy responses to accurate evidence. 

But something in the UK make U-Turns particularly challenging manoeuvres.  Maybe it’s the influence of the press, or the enormous egos of some of our appalling leaders who have been “Peter Principled” right into the Cabinet.  I suggest Matt Hancock would have been far better off getting a masters degree than jetting off to participate in “I’m a Celebrity….Get me out of Here!”  But that would make for poor TV.

Rodney Schwartz

London, UK—5 March 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments

“Hierarchism” at University and in Politics–and How we Really Learn

When I started my master’s degree in Democracy and Comparative Politics at UCL I wasn’t quite sure what to expect.  Would I be leaning about Plato and Aristotle, or Hobbes and Marx?  In fact, it’s Weber and Rawls where our studies seem to begin.  However, I find that many of my political lessons do not come from books written by any of the great theorists, but rather in observing how universities operate and how that mirrors government treatment of citizens.  Let me explain.

As I sit here today on 28 February, I am awaiting the results of an exam handed in on 11 January. I have had a steady stream of apologetic emails assuring me that the grades are to be available imminently–hmmmmm.  I recollect this also occurred with the mid-terms for the same class.  In fact, we did not receive the results until after the end of term!  Thus, one had no chance to learn from the exam, or to gain an understanding of concepts one failed to absorb in preparation for the mid-term exam.

It is also infuriating that the final exam was handed out in the middle of the Christmas break on 3 January (classes resumed on the 9th), and we were expected to hand in our exam papers by 14:00 on the 11th. Hopes that exams be handed out at the end of term were thwarted as it would have meant that professors would be marking over their Christmas break, which was understandably unacceptable. However, the idea that students should be expected to do an exam during their Christmas break seemed perfectly reasonable.

Another example, in another class, were the repeated promises that an important lecture would be made available through the online portal by a specific time. Of course this did not appear much later. I fully understand that shit happens, and that university professors are massively overworked (and underpaid), but what I find galling is the hard-assed insistence on students meeting firm deadlines at the same time as the university persistently fails to meet nearly every deadline it establishes for itself.  We are told that if we hand in exams even just one minute late there will be penalties. 

It is not only professors that continually miss deadlines, but the university itself.  Lectures, course outlines and necessary material are often not available until after the first classes of term begin, which is patently ridiculous.  I suspect this attitude of strict deadlines for those further down in the hierarchical system, and disregard for them at the top permeates downwards—as they say, “a fish rots from the head”.  I could go on and provide more examples, but I am sure you get the picture.

I have been reflecting on the question of “where else have I seen this behaviour in the world we inhabit?” I wonder……………   As many will recall, the Conservative government under Boris Johnson was strict with regard to COVID restrictions. Citizens who had the audacity to sit on a park bench as they took their daily walk at the height of the restrictions were quickly moved along by police and those found to have had group gatherings were punished. It is a matter of public record that while we were adhering to these restrictions those who governed over us were flaunting them with abandon. I presume that they believed it was important that restrictions were put in place in order to keep us healthy and to prevent hospitals overflowing with patients, but clearly they did not seem to worry about this for themselves.  Were they not worried?  Did not care?  In any event, the rules were only applicable to us but not to them!  I have decided to call this behaviour “hierarchism”, whereby those in power strictly enforce rules and regulations on those over which they have power without feeling any obligation to abide by these rules themselves.

This feels an important political lesson, but one I suspect the university has taught unintentionally. It’s about people in power using this power to procure benefits for themselves or make their lives easier  without any regard to those over whom they have power, further down the hierarchy. The irony in both cases is that it is actually students and citizens who are theoretically in charge. As students we are the customers of universities and are paying them to provide us with a service.  They work for us—it rarely feels that way. As citizens, politicians are nominally meant to be public servants, acting in our interest under authority delegated to them. Yet this theoretical model does not seem to work in practise.  Even if it did operate in Athens many centuries ago it certainly fails in the modern era.

Students exert pretty much zero power over the universities, despite being the customer.  Frankly even the professors seem relatively powerless and are often forced to undertake inane tasks for wages that are far too low.  But this is the nature of hierarchism—each tier dumps on the tier below.

My time as a student is limited, and this is true for most of us.  However, we are (unless you are Shamima Begum) forever citizens of our countries.  Democracy cannot operate effectively in an environment where citizens feel—and arguably are—powerless.  Yes, we have elections, but……….. Until we seriously address this, a vibrant healthy democracy cannot exist.  Perhaps in future blog posts I can explore this issue and analyse those governments which are at least taking a few steps in that direction.  In the meantime, I will just keep on learning, grateful to the university for the many lessons it is teaching me 😊

Rodney Schwartz

London, UK—28 February 2023

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here. I welcome any comments.

University Lecturer Strikes–and Perverse Incentives

As a master’s student at UCL, I recently learned that there will be 18 days of strikes by professors over a variety of issues between now and 22 March.  For me personally, this means that out of the 12 classes I have remaining this term, 50% will probably be cancelled due to strikes. This does not take into account classes which will be cancelled as a result of rail strikes and professors’ inabilities to get to the classroom.  Before continuing, I should make clear that although I am saddened by the impact on my learning, I fully support the teachers in their strike.

Recently a petition has been circulating among the students which seeks reimbursement to students for classes that they will be missing (500+ signatures!). Although I support this effort as well, for someone like me who is at the tail end of my career and academic life, it has fewer consequences than those with many decades still ahead of them. I also feel a particular sense of rage on behalf of foreign students who have forked out something like £28,000 for their education and have seen its value in actual terms decline sharply as a result of the strikes. This also damages the image of UK universities abroad—but alas this is the sort of medium to long term consequence that often gets ignored. 

It is possible that a few universities may pay compensation to students, and some have done so previously, but the amounts will be trivial—I heard of one university which paid roughly £4 per hour missed.  On that basis, I will get £24 for the classes I miss–ridiculous.  You will guess that the £16k I am paying for my master’s degree, as a UK resident and citizen, is costing far more than £4 per hour!

However, this situation has led me to reflect on comparisons with the private sector, where I have spent most of my life. Most firms suffer as a consequence of strikes because during work stoppages they are unable to manufacture the products or services which generate revenues.  Thus the strikes adversely impact their profitability.  As students, we pay up front for education, and in the event of strike we suffer, as do lecturers, but there is no concomitant reduction in the university’s revenues, apart from minor compensation a few pay out. In fact—and this is the key perversity—universities benefit financially when teachers go on strike—their wage bill falls. Therefore unlike in the private sector the impact of strikes not only fails to punish the employer but actually benefits them. The biggest losers are the students and their professors.  Furthermore, the entire academic experience is diminished, something I have felt deeply.

This is not dissimilar to the health sector where striking nurses, ambulance workers and others suffer directly from their decision to withhold their labour. Sadly patients endure serious hardships and tragically some may die as a result. Whereas students like me might be disheartened or inconvenienced by the negative impact on our education, this is nothing in comparison to the loss of a loved one as a result of industrial action. Anger and fear are inevitable consequences and unfortunately, these are sometimes targeted at those who strike.  Students rarely get angry with teachers, but they are certainly cross with the university—but are they at fault?  I feel the real culprit in both the educational and health field are the Government, who seem to get away with this and hide behind the university or the health entities who bear the brunt of the ill will.  This Government also offers absurd excuses such as “preventing inflation” (see this previous post for a discussion of this issue). I do wish there was some way that they could suffer directly as a result of their policies, but the existing incentive system does not accommodate this.  Instead they benefit, in having a reduced payroll burden, when health and education professionals strike in desperation over how their real pay has declined. 

I study democratic innovation.  I too wish that we could come up with an innovative way to restructure the incentive system so that this perversity did not exist.  Any ideas?

I hope and pray that come the next election this government pay the heavy price for its behaviour. Sadly, it will be nothing like the price that many others are being forced to pay.

I started my career in mainstream finance and shifted into impact investing before returning to my lifelong passion of politics in early 2021. This blog reflects that return and is my way of sharing the impressions of someone journeying from “proper jobs” in the investment world back into education to study politics after four decades. For those interested in why I started this blog click here, and to read my declaration of known biases, click here.

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