The Black Swan Strike

23 02 2018


That’s what I am now calling the current industrial dispute that has paralysed Britain’s research intensive universities. Readers here in the UK will be aware that academics at the country’s leading universities (Oxford, Cambridge, Manchester, etc. including my own employers, University of Liverpool) have been on strike since yesterday in a dispute over our pensions. The issue is this: the bargaining agent that represents our employers, an organization called Universities UK, claims that the pension fund has a massive deficit that needs to be addressed by some mixture of higher contributions and lower benefits for future retirees. Our union, the UCU, disagrees with this claim and thus opposes the proposed cuts in the pensions.

The employers’ belief that the pension fund has a large deficit is, in large part, a function of the curious, indeed rather extreme, methodology they have used to forecast future revenues and liabilities. The approach they have taken is designed to ensure that the pension fund could remain solvent in the event of a worse-case scenario which involves the closure of all of the UK’s universities. This radically pessimistic approach is justified on the grounds that some industries with occupational pensions have, within living memory, been disrupted out of existence. There are, after all, lots of retired coalminers and steelworkers who still collect pensions by virtue of their having worked in industries that have essentially ceased to exist in the UK. The union argues that in adopting this worse-case scenario approach, the employers’ federation is being recklessly prudent.

I’ve long been fascinated by how ideas that emerge from the ivory tower and which are disseminated in highbrow books filter down to decision-makers and then result in concrete changes in how people behave in the real world. That’s why one of the books I was most interested in as a second-year undergraduate was called The Ideological Origins of the American Revolution—the book argued that a series of influential books published in England ultimately led to tea being poured into Boston harbour, British troops firing on minutemen, etc.


Of course, any good historian will eschew monocausal explanations and will recognize that a host of other, non-ideological variables explain why revolution and other phenomena occur. There are variety of reasons that the academics’ union and the employer are now at an impasse. These include the effects of Quantitative Easing on bond yields, Brexit, and, of course, the medical technologies that are extending the lives of retired lecturers and other upper-middle class people.


For the time being, however, let’s focus on the ideological variables, the ideas that have brought us to where we are today, with an employer that wishes to use a recklessly prudent methodology. If I have to identify a single author who has helped to produce the intellectual climate that resulted in the employers’ bargaining agent adopting and then sticking to its very pessimistic, belt-and-braces, approach, I would say that it is Nassim Nicholas Taleb, who, in the wake of the 2008 financial crisis, promoted fairly radical ideas about the need to create “anti-fragile” systems capable of withstanding Black Swan events, such as the Once-in-a-Century storms that occasioned sweep over financial markets. He popularized this idea to the management of risk in his bestselling book, The Black Swan and I would bet good money that the well-intentioned individuals who are behind the pessimistic methodology have read, and have been influenced by this book. That’s why I call this the Black Swan Strike.

Whilst I certainly agree with prudence in the management of pension funds, I would call on all concerned to reflect on whether we really need to design a pension fund that is capable of surviving the effective end of universities as we know it in the UK.  After all, the some of the universities that support the pension scheme have been around since the Middle Ages. Universities serve many functions, so even if MOOCs (remember them) disrupted away their teaching income, they would still likely survive. (Disruption by MOOC is most unlikely, as universities serve an important signalling function to employers). I would therefore suggest that the recklessly prudent approach that has been adopted is totally unnecessary.


P.S. I am sharing a screenshot of an excellent Tweet about the strike that will be enjoyed by anyone who has read George Lakoff on framing.






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