Category: Politics/Economy

Can too much information be bad?

I wrote a draft for a post last Mental Health Awareness Week about an issue I have with ‘listicle’ style articles on mental health; “12 things not to say to someone with depression“, “Feeling sad, read these 5 foolproof methods to brighten your day” – that sort of thing. The overall point was that I’m a little wary of those because, while it’s obviously and measurably a good thing that more people have more access to more information about mental health, giving people only half the story can sometimes cause more harm than good. A little knowledge is a dangerous thing, and all that.

I never published that article in the end, because I wasn’t happy with the overall message (and also because, in over 500 words, I didn’t really say a whole lot that wasn’t in that paragraph). But I read it again and it struck me that a lot of the issues I have with those articles also translate to other things. Specifically, I was thinking about the EU referendum and the way people used information (and what information they used) to justify whichever side of the fence they were on.

Don’t worry, this isn’t a post about Brexit, per-say – nor is it a post about mental health. I’m merely using both of these as a vehicle to make my points.

We live a lot of our lives in soundbites – chunks of information that we can call upon at short notice to furnish us with some understanding of a given situation. In the blog-post-that-never-was, I make the point that we love listicle articles because they make the idea of – say, mental health – more accessible. We don’t all have degrees psychology, or doctorates in mental health; we can’t know everything about a situation. Yet more and more we have to understand lots of individual things to navigate our way through an increasingly connected and informed world.

Too much to understand?

By now you’ll have seen the news pieces on ‘leavers remorse’, those people who regret the way they voted, some because they didn’t think their vote would count. There are also claims that, on the day after the voting, one of the top Google searches was ‘What is the EU?’.

Obviously, I’m beyond incensed by both of these things. But taking a dispassionate view on it, I don’t know if I’m really all that surprised. Is it really a shock that the EU – an body most from both sides of the debate agree is horrifically opaque – is a source of confusion? And given that, every time an election comes up, we’re always hearing how the voting system is unfair, should we be shocked that many just assumed their vote would get lost in the noise? If there was any ‘official’ explanation that every single vote mattered because we were going to be treated as individuals rather than as constituents, then I missed it.

Often there is simply too much to understand about politics in general. It’s why issue politics is becoming more prevalent than party politics – why many (myself included) are frustrated that we are trying to tackle global problems with the same two-party-favouring political system that we’ve had since the dawn of Parliament. We struggle to engage with politics in its entirety, not because we are too stupid, but because it is too nuanced and the system isn’t equipped to deal with that.

I’m digressing (shock…), but this was sort of my issue with mental health articles. I do worry that reading a short article is something of a tick box exercise. By reading one interpretation of one aspect of mental health, is there a danger that one internalises that view point and uses it as their primary lens for all people? Again, not because people are stupid, but through a combination of simply not knowing what they don’t know, and not having the time or capacity to get more information.

I guess what I’m trying to get my head around is the concept of “things are too big”.

Are short attention spans the problem?

We’re always hearing that we have such short attention spans. I don’t know if that’s true. I watched the entire election coverage on Thursday night, and then spent the whole of Friday watching the news after the results broke. I know I’m not the only one. Once-in-a-generation news stories aside, I spend hours at a time reading blog posts on mental health, on politics, on startups. I watch countless documentaries and TED talks on everything from clean energy to the education system. I do this because these are things I care about.

But there are plenty of important things I don’t pay attention to. In my city, we’ve got a new bus system being put in that’s part of a multi-billion pound investment strategy to connect different areas and revitalise the community. It’s supposed to bring together sectors, including the tech and startup scenes, and mean more jobs, less traffic, and greater prosperity for the city.

And I don’t care.
I’ve tried – I really have. But the information is so sparse and difficult to come by, and the outcomes seem so arbitrary and intangible, that after a while it wasn’t worth my time to pursue it. I’ll learn about it when it’s done, and in the meantime, I have other things to worry about.

If that’s how I feel about a major redevelopment happening outside my front door, what realistically do I expect from people when we’re asked to consider the nigh-on impregnable enigma that is international economic and political systems?

We don’t have short attention spans, we just have limited capacity to engage deeply with things.

That’s why listicles, soundbites, and the like work – because we know we should care about things we don’t engage with. We feel guilty that we don’t understand the intricacies of the labour (small L) economy or the effects of fracking, and so we try and keep up by scratching the surface of many things, and only indulging in understanding a few.

Sometimes we can only scratch the surface.

The problem, and for me the worry that instigated the blog-post-that-never-was, is that sometimes we forget that we’re just scratching the surface. We take the ‘knowledge’ at face-value without probing deeper. We think we have all the information we need to understand a subject, not necessarily out of arrogance, but because we don’t know what we don’t know. We take that, and we move on. It’s not that we don’t care (at least, not always). Rather there are simply other things in life that we prioritise;  family, friends, jobs, the latest season of Orange Is The New Black, our health, other news stories that touch us more personally.

Of course there are things that deserve our attention more than others, and I’m not defending those people who are wilfully ignorant of issues. I’m not saying that people shouldn’t have tried harder to understand. I also definitely think that both sides of the debate were unforgivably ineffectual at actually providing us with education on the issues, and rather than debasing us all with their mud-slinging, should have raised the level of public debate such that we could all have more informed discussions. But I said I wasn’t going to write a political piece…

I guess all I’m trying to do here is remind myself that sometimes decisions are much bigger than we can understand. And maybe, on some level, that’s OK.

That and recycle old blog drafts. Obviously.

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On the elections (after the vote)

It’s been an interesting weekend for politics. I’ll save the rant about Gove for another time, I think, but it was that which caught and held my attention for a lot of it. This was, as I somewhat humourlessly alluded to in a tweet on Sunday, mostly because I didn’t really want to acknowledge what was going on with the elections. I haven’t really formed a coherent set of thoughts about it yet, but as an exercise I tried to get what I did think down onto (metaphorical) paper.

Of course, really, we all saw it coming. UKIP seemed destined to do phenomenally well almost right out of the gate. It has been commented before by many that with this election being so much about attitudes to immigration and membership to the EU, continuing frustrations by many on both fronts made for ideal conditions for Farage’s party.

All this, despite the fact that no one has yet been able to explain to me any of UKIP’s policies that don’t relate to our borders or our involvement in the European Union. There is speculation from some that this doesn’t really matter as a point – the local and European elections don’t really ‘count’ because they don’t decide our Prime Minister. As such, this is just a way for the voting population to vent their frustration with the political system without a huge amount of fall out.

I can’t work out what scares me more – that this statement might be true or that it might be false. If true, it shows a disastrously weak grasp of what local representatives and MEPs actually do (and indeed exactly what our relationship with Europe does for us). If false, then it means we might actually be dangerously close to having UKIP MPs come 2015.

But so what? If its the will of the people, then so be it? Surely this is the point of democracy, right? The ‘big three’ (I’m charitably, if laughably, include the Liberal Democrats in this…) aren’t cutting it for the electorate, and they want to choose UKIP as their representative, then isn’t that their right to do so?

Well of course it is. My concern isn’t that the political system is failing, my concern is that so many people see a party like UKIP as the only sensible option.

And on the face of it, it isn’t hard to see why. Farage, for all his many flaws, is an exceptional public speaker – there’s no use in us lefties trying to deny it because we hate the guy, it doesn’t change the fact that its true. Also, he has the enviable position of being ‘the other voice’. One of the reasons the Liberal Democrats curried so much favour in the last General Election is because they had the liberty of being able to speak out against the status quo. Its one of the reasons Cameron wanted to align himself with Clegg – it scooped up the greatest majority of people. Labour had – in the eyes of a great many – screwed up massively. Anyone who could slate that and even have an ounce of credibility was laughing. The Conservative-LibDem coalition could do so from both sides of the political spectrum.

Farage & Co get to do the same thing again – only this time they can berate all three of the big parties; Labour for screwing up in the first place, and the Conservatives for not fixing it (the Lib Dems needed no help digging their own grave). If you accept that the big three are useless as political entities – as many have – then you really are limited in terms of choice.

(There is the related argument that the Green Party also posed a viable alternative to ‘traditional voting’, but that they were not given the luxury of such a great platform for public exposure as UKIP. I won’t explore that in much depth here, but it is worth bearing in mind. Was the media unfairly biased towards UKIP intentionally, or did UKIP simply engage in behaviour that was more ‘interesting’?)

It remains to be seen whether this general election will be as personality driven as the last, but assuming it is that’s even more good news for UKIP. Assuming all three main parties keep their leaders who have we got to choose from? Miliband has practically zero charisma, Cameron’s rhetoric has long since worn thin, and Clegg – please, give me a break.

‘But politics shouldn’t be decided on the party leader – it should be on policy and the manifestos!’ – I completely agree with you, hypothetical but well reasoned reader. And yet that isn’t the situation in which we appear to find ourselves. People, really, only care about one or two issues when it comes to ticking the box on election day. We don’t have the time or capacity to think about more than that so we pick 3 or 4 markers and see who aligns with us on that (in this case, it was largely Europe and immigration – though of course this was a ‘European Election’, so this was to be expected).

What is interesting is that, just looking at the turnout for General Elections, people do seem to be gradually more engaged. Since and all time low in 2001, turnout across England and Wales is slowly on the increase. Given that media coverage and public interest at the moment seem to be so heavily fixed on the goings on at and beyond our borders, we could have a very different political landscape post-2015.

That could just be the nature of these recent elections though. Perhaps we will settle back down in the run up to the General Elections and the public mood will switch to thinking a little more about what happens to domestic policy. Its hard to say.

Or maybe 2005 and 2010 were anomalies. While official figures for the European elections probably exist by the time you read this, I haven’t seen them yet and so I can’t comment on these elections. But historically local and other elections have fluctuated massively, but it will be interesting to see what the turnout was. I’m betting it won’t be high though. Does this reflect the inherent volatility of local turnouts, or a wider trend?

Who knows. Whatever happens, it seems that the days of traditional party politics really did die with the 2010 elections.

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On the subject of free University education: a (poorly written) Economics essay.

FOREWORD: I had to write a piece of non-assessed coursework for one of my Economics modules last semester. In lieu of me actually writing anything original for this blog, I’m just going to post it. (I’d promise to try harder with this blog, but we all know that however well intentioned the statement would be, I’d almost certain fail to actually do it.) I started late and didn’t properly plan it. Consequently, it isn’t in what I would consider my usual writing style. Also the conclusion (if that’s what it could be called) reads horribly. Lastly, there was a limit of 1,000 words (which I think I overran anyway), so I haven’t developed any of the points as I’d have liked. I have tweaked it for here, purely in the sense that it reads a little more ‘bloggy’ now, and also some of the economics terms have a little explanation – something that took all of 10 minutes. I was going to expand it and make it a more substantial piece of writing, but I’ve been sitting on it for nearly a month now and haven’t. I guess I just as well post it as is. In any case, this foreword is rapidly becoming longer than the piece itself. Enjoy.

The question: “Critically evalutate the statement ‘University fees should not be abolished’”

The subject of university tuition fees – and who should pay them – is one of the most contentious issues in contemporary politics, and as such is a very important economic problem. While the question is usually presented as ‘should fees be abolished’, it could perhaps be more accurately posed as ‘who should pay for them’. Of course there is no such thing as a free lunch, so while abolishing tuition fees will mean the students will not have to pay, the cost of running the universities will have to be passed on to someone else.

Those on the political right tend to advocate putting that cost firmly in the laps of the students. There are various different arguments for subsidies and bursaries, and different ideas on when the payments should be made, but the bulk of the right-wing voices agree that the cost should, ultimately, be paid by the student. By contrast, those politically left-wing tend to be of the opinion that university education should be equally available to all and, as such, should therefore be free for students. As with any worthwhile debate, both sides have merit.

Perhaps one of the most common arguments for providing free access to university is that, in the economic long-term, it will create a more educated – and thus more efficient – workforce. A higher graduate population is referred to as an increase in ‘human capital’, which is cited as the “most fundamental source of economic growth”. Therefore the more people we have going to university (something that could be achieved by lowering, or indeed abolishing tuition fees), the greater our economic success. Similarly, if students do not have the personal expenditure attached to a degree – be it at point of entry or further down the line – then they will be in a much more financially secure position. This greater spending power could also benefit the level of GDP.

However, much of the debate centres on who will pay for this ‘free’ education. The counter argument is that, for university education to be free, the government must pay for it. No private firm would fund ‘free’ universities for the simple reason that there would be no profit. You don’t need a degree in Accounting and Finance to realise that a business that makes no profit is a poor one. [that’s what I meant when I said I’d added things to make it more ‘bloggy’ – worth it, wouldn’t you say?] In other words, to provide free university, taxes must rise. As tax levels rise, consumers’ Marginal Propensity to Consume is lowered, due to a fall in their disposable income. This, if not coupled by a proportionate rise in Government Spending, will cause GDP to fall. While one could argue that the whole point of raising taxes would be to fund the universities, and this in turn would be reflected in the government spending, the increase is not always a proportionate one.

Another argument against making the government (and thus, by proxy, the taxpayer) fund universities, is that certain sectors of society would pay for a service that they would not use. Conversely, those who pay lower levels of tax (or none, depending on how the system was set up) could benefit from the abolition of fees and give their children university education by free-riding.

Education is used as a signal to employers. So-called ‘high-ability’ individuals (i.e. those who went to higher education) are selected by employers because they have shown the ability to pick up new skills and are thus more desirable. This distinguishes them from ‘low-ability’ individuals, who have no higher qualifications. From an employer’s point of view, having a more skilled workforce can improve productivity and thus increase marginal revenue.

It should be noted however, that this increase productivity will be countered, at least in part, by the ‘high-ability’ workers demanding higher pay. These workers will only take the job if the pay they receive as a result of having the degree (i.e. the difference between their pay and that of a low-ability worker) is higher than the initial cost of the degree itself.

With this in mind, University will only become a sensible option if the average salary of a post-degree job is higher than that of a non-degree job plus the expenses involved in applying to university. In addition to this, the employer will only pay the higher salary as long as such ‘high-ability’ workers are in comparatively low supply. Imagining a scenario where university becomes free, there will be a high incentive for workers to go through higher education and in so doing get a higher paying job. In the long run however, if a large enough portion of the workforce obtains a degree, then firms will no longer have to pay ‘high-ability’ workers considerably more than ‘low-ability’ workers, as the supply of the former will increase in comparison to the later. Assuming ceteris paribus [A Latin phrase sometimes used to mean ‘all other factors held constant’. Its something I manage to work into all my economics essays, mostly because it makes me feel clever], the price of a graduate worker will drop.

Employers have two choices. Either they can pay the ‘low-ability’ workers less than the ‘high-ability’ ones, or they can pay them both the same (i.e. an average). ‘High-ability’ workers will, by their nature, expect a higher wage and, while their numbers are comparatively low, the company is fine with doing this.

Imagine, for example, a firm where non-graduates earn £20k a year and graduates earn £40k. If the firm hires 10 people, 2 of whom are graduates, then the firm’s labour costs are:

(£20k x 8 low ability workers) + (£40k x 2 high ability workers) = £240k

The firms other choice, as mentioned above, is to pay both sets of workers the same – in this case £30k. If they choose to do this their labour costs are:

£30k x 10 workers = £300k

Given that £300k is more than £240k [it definitely is – I triple checked], it is within the firm’s interest to pay the two sets of workers differently.

However, this changes once the proportion of graduates in the firm increases. Imagine the 10-man firm now has 8 graduates, and 2 non-graduates. With the two-tier wage system, the labour costs are:

(£20k x 2 low ability workers) + (£40k x 8 high ability workers) = £360k

Whereas if the firm adopted the ‘average wage’ approach, their labour costs would only be £300k. Clearly, the firm will want to keep the labour costs down, so graduates and non-graduates will receive the same wage. If this is the case, going to university is of no benefit (we are of course assuming here that getting a job is the only benefit that university gives).

With this in mind, allowing all individuals access to university may not be the best thing for the economy. In the long run it could, somewhat paradoxically, lead to fewer individuals going – particularly if there are no auxiliary benefits to going – even if it is free. The economy would then suffer due to a lack of ‘high-ability’ workers. Furthermore, while the money used to fund the schools could be generated via tax, the economy could suffer through the decrease in consumers’ disposable income.

In summary, while the prospect of free university education for all seems both noble and sensible from a moral standpoint, from an economic one it seems less so. While an educated workforce is no-doubt beneficial to the economy, having too many skilled workers can in fact be a detriment. At best, higher taxes could cause a slowing-down of consumer spending. At worst, the over-population of skilled workers could lead to the eventual realisation that a university degree is of no benefit, followed subsequently by the loss of all skilled workers – either in the short to medium term through emigration, or in the long term through the lack of new university students.

 

Until next time

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On the subject of ‘gate’ as a suffix

RANDOM RANT WARNING

There is a news story doing the rounds about how Gordon Brown called someone a bigot today after an interview, not realising he was still wearing his microphone. The press subsequently got hold of this, and went to town on it. I’m not going to write about that specifically, because frankly I can’t be bothered. What I will write about is how this has quickly come to be called the ‘Bigotgate’ scandal.

Really, all I wanted to say on the matter could be summed up in a Facebook status I posted a little while ago, but I’m on a role with Politically-minded status updates and Tweets, so I thought I’d chuck it here as well – making it unnecessarily long in the process.

It bugs me slightly when anything slightly resembling a political scandal of some description gets awarded the ‘-gate’ suffix, in reference to the Watergate scandal of the 70s. I can’t really place my finger on why it irks me; I think it probably has something to do with how it winds up in the most pointless of places.

When the University of East Anglia was allegedly found to have falsified data on climate change, the whole fiasco was dubbed ‘The Climategate Scandal’ by the media. For some reason, this didn’t bug me so much – perhaps because, in the short term at any rate, the findings had some sort of impact.
With this whole Brown/Duffy thing, I don’t really care. That’s not to say I don’t have an opinion on the subject, it just that by the end of the week the press will most likely have dropped the story, and nothing more will be said about it.

That might well be my issue. I feel political scandals need to earn the ‘-gate’ suffix, rather than just be awarded it on the basis that it involves politics in some way. Watergate was a massive event, and eventually led to the end of Nixon’s presidency. This whole ‘Bigotgate’, in my opinion, won’t last until next week.

If that’s the case, you could ague that it doesn’t matter that what it was called, because nobody would remember it.

And you’d probably be right.

End of rant.

Until next time.



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On the Election, and Hung Parliaments

FOREWORD: As with all of my entries, this one could have gone several ways. There are many other aspects of this subject that I haven’t even touched on. I’d say that I may well come back to them, but I’ve said that so many times and not followed through that it would be pretty pointless.

Anyway, aside from my usual weak conclusion, I am fairly happy with how this reads. It doesn’t explain anything that isn’t explained in at least two dozen other ways elsewhere, but I make no apologies for that.

Enjoy.

— Will

So the general election is nearly upon us, and for the first time in years there is a strong possibility that we cannot predict the outcome 4 million years in advance. Not only that, but there is a strong possibility that on 7th May, the UK will have what’s called a ‘hung parliament’.

The term has been banded about quite a bit during this election campaign, and as such it has been explain in various ways by different sources. That however, is not going to stop me from throwing in my two cents.

Because of the way our election process works, it is possible for a party to lose a general election, and yet remain in power. This arises because the UK uses the ‘first past the post’ system to decide elections. I won’t go into how and why this is a stupid way of deciding, or even why it is a good way. Suffice to say that one of the benefits is that it provides a decisive winner of the election, particularly in a two-party state, and has thus stuck around long after some have called for its removal.

But as I have mentioned, even though the election winner can clearly be decided, they do not necessarily win the keys to Number 10. The only comparison I find myself drawing is a Harry Potter analogy. I have literally no idea why this is the only thing I can think of – its not even that good an analogy – so I apologise profusely in advance. Feel free to skip to the next paragraph if you see fit. Anyway, in the game of Quidditch (I still can’t believe I’m writing this…), catching the Snitch awards that team 150 points. Because the reward is so large, that team nearly always wins the game – however, if the other team is more than 150 points ahead, then the team that catches the Snitch would still lose. (In government, things are a little more complex than that, as more votes for a party do not automatically equate to more seats in government. Another delightful quirk of the first past the post system.)

This is a similar scenario (its not, really, when you think about it, but bear with me). The House of Commons has 650 seats, and in order to take power, a political party needs to hold an absolute majority of those seats. In other words, they need to hold 326 seats or more.

When an election is called, the voting process ‘redistributes’ the seats based on the results. The issue is that Labour currently has a 24 seat majority, so they can afford to lose 23 of those seats and still retain an absolute majority, thus remaining in power (it makes no difference who those 23 seats go to). The Conservatives need to gain 116 seats to gain the required majority, and take power. So conceivably, the Tories can win the election, but if Labour only loses 23 seats in the process, Gordon Brown will still wake up on May the 7th behind the door of Number 10. (Incidentally, the Lib Dems need an extra 264 seats to grab the coveted keys.)

Perhaps more interestingly, if Labour loses 24 or more seats, but the Conservatives don’t win their required 116, there arises a situation whereby no party has an absolute majority. This is what is known as a ‘hung parliament’.

Several things are interesting about a hung parliament. The thing that perhaps I find the most intriguing is that no one really knows what will happen. There is nothing written in our constitution giving direction on exactly what to do should such an event occur. There are only a small number of ways a hung parliament can work however, so I’ll briefly go through those.

In the event of a hung parliament, the current Prime Minister (in this case, Gordon Brown) will remain in power until such time as he resigns (an idea I imagine he is not partial to). (Obviously, if Labour lose the election this will go down an absolute storm – particularly with anyone choosing to vote Conservative.) The current government can stay in power even if losing the majority in the House of Commons in one of two ways.

The first is that they can forge an alliance with smaller parties, thus bringing the combined number of seats to the magic 326 (or, preferably, higher). The smaller party will obviously want some part of this deal, so certain policy concessions would need to be agreed on (i.e. where the two parties differ, they would need to arrive at some sort of compromise), and no doubt some of the smaller party’s MPs would want to be admitted into the Cabinet.

Alternatively, Labour could stay in power with less than the 326 majority (assuming the Tories don’t gain more seats than them without themselves securing an absolute majority) and form a ‘minority government’. In this case, majority votes would need to be formed for each individual bill – potentially making it much hard to pass them through the Commons.

In any case, the idea that a hung parliament is a possibility has worried quite a few people. While no one can say for definite what will happen, general consensus is that it will be bad.

One eventuality that springs to mind is that the pound will most probably plummet in value. The value of currency on in the global market is decided in the same way that the price of any good is decided: supply and demand (in this case, demand is probably the greater factor). The pound will increase in value if more people want it. In other words, if countries want to buy British goods (and that includes using our services, such as our banking) then they need to have pounds with which to trade. The greater the demand for said goods, the greater the demand for the pound, and thus the higher its value (if I was writing this for an economics essay, I would chuck in the Latin phrase ceteris paribus, meaning ‘all else being held equal’ – in other words, there are other factors that influence this, but for simplicity’s sake I am ignoring them). Foreign direct investment, the involvement of foreign companies in the UK’s economy, it is predicted, will fall due to a lack in confidence with this somewhat ad-hoc government.

This lack of confidence, some would say, would be well founded. Let us for the moment assume that hung parliaments are not an issue, and Labour retains power for another term. But, let us assume that their absolute majority is greatly diminished. Let’s say that there are only a handful of seats separating Labours majority from the Opposition. If the government want to pass new legislature, they will have to put it through the House of Commons. If the Opposition disagrees with the proposed legislature, then it is going to be very hard for the government to push it through. It may have to rely on the smaller parties for support – a position that will severely weaken the stance of the party in power.

To return back to our hung parliament scenario, imagine the above situation but instead of having a government with only a slight absolute majority, imagine one with no absolute majority and only a marginal ‘actual’ majority. In the event of a hung parliament, any new piece of legislation may well have to be agreed on by a mess of differing parties.

Not all is doom and gloom however. There are other countries who have hung parliaments and/or combined governments, and who don’t seem to suffer for it. In many ways, a combined government could be a good thing. Individual issues would be debated and voted on, not based on whoever has the highest majority, but on which party can garner the most support (incidentally, an argument for proportional representation as a means of deciding an election). There are many reasons why this could also just turn out as a disgraceful mess, but it could also turn out well.

Also, there is a chance that a hung parliament may not even happen. Labour may well retain enough seats to stay in power – albeit with a potentially drastic loss of majority. Whatever happens, it’s impossible to deny that this years election has been (and will continue to be right up until May the 6th, at least) the most interesting one for a very, very long time.

Until next time.

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