Conflict of Interest: Case Study #3

My third and final case study in conflict of interest will be brief, since it is a relatively straightforward case of good old-fashioned nepotism. Quaint stuff, really…

Now, not every instance of what we commonly call “nepotism” is bad. For instance, if I need my driveway shoveled, and I “hire” my son to do it, there is no harm done — unless of course my son is shiftless, lazy, or not physically up to the task. But even then, the harm is to myself only. Similarly, if I am the proprietor of a family business, say a restaurant, I commit no breach of ethics in giving my daughter a job in the company. Indeed, there may be very good reasons for doing so; she may be part of my “succession plan” and will need to learn the ropes if she is to follow in my footsteps. If it turns out that she doesn’t have what it takes, lacks the “right stuff” or the “royal jelly”, again, that’s a risk I take, and one I’m entitled to take.

Perhaps it could be argued that I am “denying” a better qualified person a job. But that presumes I have a duty to provide jobs for people, which seems implausible. I almost want to say that my hiring my son is a decision about consumption rather than production: I may be perfectly aware that my son is a waste of oxygen, and that looked at from the perspective of production, my decision may seem inefficient. But in our consumption decisions, an inefficient choice is not the same thing as an unethical one. As with many other purchases that seem wasteful to observers, I derive some personal gratification from this “purchase” of a job for my son, and so I do it, efficiency be damned. And a case could be made that, at the end of the day, for all his uselessness, my son is at least a known quantity. In hiring outside the family I would of necessity be turning to strangers, with all the risks that entails. I may have to hire and fire a few duds before I find the right person for the job, and some of those duds may be far worse than my son. 

The matter is different where I am a representative of a public institution, corporation, or publicly-traded company. In that context, my decision is one concerning production. My choice is open to the judgment of others. Where I am spending money that belongs to others, money that has been entrusted to me as their agent, money that is to be spent on furthering their objectives, then to spend it on my own objectives — in effect, on consumption — may or may not be inefficient, but it is certainly unethical.

Put that way, it is akin to embezzlement. If I give my useless son a job in a public institution, corporation, or publicly-traded company, I bear none of the risk for the harm his uselessness may cause. Taxpayers or shareholders foot the bill, while I receive the direct or indirect benefits of the hire. I may as well be stealing from the till.

Therefore, we are concerned with nepotism only insofar as it is practiced within organizations not owned by the practicing “nepotist”. Furthermore, though its similarity to theft would in itself make nepotism morally wrong, we are mainly concerned with nepotism as it relates to conflict of interest. Wherein does the conflict of interest in nepotism lie? Well, from the foregoing, and from the previous two case studies, it should be fairly obvious: The nepotist’s (self)interest in furthering the interests of his relations conflicts — or is likely to conflict, or at the very least is likely to be perceived to conflict — with the interest of the organization. The organization’s interest herein consists of having the right person for the job, whether that person be an employee, a contractor, or a consultant.

(To these latter we might even conceivably add volunteer, at least insofar as the importance of the volunteer’s role is sufficiently greater than the mere value of her free labour. "Importance" here should be understood in terms of the potential value added by the volunteer's labour or the potential harm caused by a volunteer's incompetence. And as the use of free labour — interns, for example — in highly skilled positions becomes ever more common, having good volunteers in an organization approaches in importance the interest of having good employees, contractors, and consultants.)

With these fairly obvious remarks out of the way, here’s the case study. 

Case Study #3: 

A researcher at my university was the recipient of a multi-million dollar research grant. It was for a large-scale project, the type that necessarily requires a certain amount of administration. Receiving and spending millions of dollars of public funds requires that there be financial accounting and reporting.  A meeting of various interested parties was held before the project started, amongst whom was a certain accounting manager — let’s call her Angelica.

A few hours after the meeting, Angelica sent an e-mail message to the researcher. After the usual pleasantries, the message quickly came to the point: Angelica’s daughter — let’s call her Laura — needed a job for the summer, and wouldn’t it be nice if the researcher hired her on the project? There was, of course, no indication of what special skills Laura might bring to the project or in what capacity she might serve. Just an expectation that she be provided with a job for the summer.

The researcher immediately forwarded the correspondence to me, seeking my advice. I advised her to be evasive for the time being, while I pursued the matter with the powers that be. I was frankly incensed that Angelica was shaking down my researchers for jobs for her kids. What made it all the more galling to me was that Angelica was precisely in a position to know better. As the person in charge of research accounting at my institution, she would be intimately familiar with our policies around hiring research personnel, and with our policy on conflict of interest. Indeed, she was partly responsible for making sure researchers were compliant with them.

I made some inquiries and found out that this was not the first time Angelica had pulled this stunt. Indeed, Laura had been making the rounds all over the university as an employee in one capacity or another, thanks to her mother’s influence. I brought the matter to the attention of various higher-ups, but nothing was done about it. So I brought it to the attention of the office of the Vice President, and again nothing was done. All agreed that what Angelica was doing was wrong, but Angelica had been around for a long time, and nobody seemed inclined to rock the boat. Indeed, my impression was that there was some annoyance directed towards me for bringing up a problem that they would rather pretend didn’t exist.

In any case, I had pursued the matter as far as I was able to without doing harm to my own interests. The particular researcher in question did not hire Laura. That is because a few weeks later she was employed by a different researcher of mine, after having been likewise shaken down by Angelica.

(Incidentally, it was then that I had a first-hand opportunity to observe Laura at work. As I suspected from what I knew of her mother, Laura had little that I could discern in the way of skill or intelligence.)

I cannot resist noting that Angelica is of Italian heritage, a culture for which nepotism is the rule rather than the exception. (What we call “corruption” might in Italy be rather accurately referred to as “the economy”). If this sounds bigoted, I can only say in my defense that I am half Italian myself. I have had enough opportunity to observe the culture’s workings to feel justified in pointing out this predilection. It is also why I never have and never will vote for an Italian candidate for public office. They simply can’t help themselves. Indeed, if you try to explain the wrongness of nepotism to an Italian, he will only stare at you uncomprehendingly. For him, to not hire a relative is to be in grave dereliction of duty.

Gambling with 23andMe

Up until recently, I was interested in signing up for 23andMe and getting a genetic analysis done. My main reason for wanting to do so is that I was interested in finding out about my heritage, information about how much of me is Celtic or Scandinavian, Italian/Spanish or Arabic or Jewish or Neanderthal or God-knows-what — the more surprising the better. However, I have begun to rethink things. 23andMe would not just provide information on ethnicity. It would also give me quite detailed information on my personal genetic profile of a quite specific and medical nature. This is information I am not so keen on getting.

I am even less keen after reading an insightful and personal newspaper opinion piece. The author narrated her experience with 23andMe. Like me, she was curious. She admitted she knew there were risks (more on that later), but her curiosity got the better of her and she sent away for the kit. She found out various interesting things about herself, such as the fact that she is 2.7% Neanderthal. However, she also found out that she carried two copies of a gene that gave her a 51 to 68% chance of developing Alzheimer’s before age 85. The latter is the kind of knowledge I’d rather do without, for a few reasons.

First, in the absence of a cure for diseases such as Alzheimer’s, knowledge is less likely to be power and more likely to be a source of worry and neurosis. I have to ask myself seriously whether I am prepared for the personal consequences of such knowledge. I suspect not.

Second, those consequences extend beyond myself and may not be entirely personal. As the author of the piece notes, the Alzheimer’s knowledge put her in the dilemma of having to decide whether or not to tell her parents; after all, each of them must possess at least one copy each of the gene.

Obviously, there are many people who do not share my misgivings (or have not reflected on them enough) and are signing up for 23andMe’s service. Judging from the copy on their website, 23andMe’s testing is touted as being able to tell me about:

•    Inherited Conditions
•    Drug Response
•    Genetic Risk Factors
•    Traits (“Explore your genetic traits for everything from lactose intolerance to male pattern baldness”).

Notably absent from this list is precisely the sort of information I was mainly interested in: ethnicity and genetic heritage. It presumably offers some of that too (e.g. Neanderthal genes), but their website and television commercials make clear that they are aiming primarily at end-users concerned with their health and medical profiles.

Despite the troubling information she received about her Alzheimer’s susceptibility, the above-mentioned author says that she is still glad she signed up for 23andMe. With respect, I’m not sure she should be glad. To its credit, 23andMe’s Canadian website is quite forthcoming about a risk of their service that for me is a deal breaker: Under current Canadian law, there are no legal grounds for believing that the privacy of your test results is safe from life insurers. As the website states: “Currently there are no protections for Canadians against discrimination based on their genetics - life insurance companies and employers may request an individual's genetic information or may ask whether an individual has had a genetic test. Currently, there is Canadian legislation under review (Bill S-201) to protect genetic information. 23andMe fully supports Bill S-201 and will continue to advocate for legislation and other actions that can protect Canadians from discrimination in insurance and employment decisions on the basis of genetic information.” Until such protections are in place, the author had better hope that her life insurer has not read her column.

Insurance: Bargain or Bet?

23andMe says it is actively involved in getting the laws here changed so that their customers are not at the mercy of nosy insurers. This brings up a question: Should insurers have the right to see such information? My gut reaction is to say “no”, mainly on the basis of the private nature of the information. But that just sidesteps the issue, by bringing up another question: “Should such information be considered private in this case?”

There is a sense in which the insurers have a point. Consider any other kind of bargain or sale. There is a popular view out there that the old common law’s position on sales was caveat emptor. However, the caveat emptor rule has always been more myth than reality. For instance, vendors are liable for defects in their goods for which they are aware and for which the buyer does not have the opportunity to inspect for herself (if she has had the opportunity to inspect and has simply overlooked the defect, that’s another thing). And with certain important purchases such as a house, I have a positive duty to disclose important known defects even if the purchaser has had the opportunity of inspecting the house.

 By that principle, it seems that in the case of a purchase of life insurance, if I am holding information acquired from 23andMe that says in effect that I am “damaged goods”, and I do not disclose that information to the insurer, the insurance policy ought to be void. If the information is too “private” to disclose, then perhaps I ought not to have purchased insurance in the first place. Ultimately, I am not forced to purchase life insurance. Insofar as I choose to, should I not be subject to the same legal and ethical requirements as any other voluntary bargain?

So far, it’s not looking good for 23andMe and their customers. However, I’m tempted to approach this from another angle. Since the “appeal to privacy” seems to be shaky, perhaps we could instead question whether or not it’s appropriate to characterize the purchase of life insurance as a straightforward bargain or sale. There are elements of the “product” being “sold” here that make it more akin to a bet or gambling contract.

When I take out a life insurance policy, both the insurer and I are placing bets on the timing of a certain event, namely my death. I am betting that this event will occur before a certain time t. What I am staking on the bet are the premiums I pay for the insurance. My prospective payoff would be what the insurers must pay out if I die before t. At first glance, it seems strange that I would place a bet in hopes of an early death, but in reality the bet is a hedge — it offsets any losses suffered by my estate in the event of that unwanted event happening.

On the insurer’s side, the bet is that I will die after t. His stake is the agreed amount he will have to pay out if I die before t. His payoff is the accumulated (and invested) fund of premiums I have paid up until t. Ideally, t will be defined such that the accumulated premium payments are greater than the ultimate payout the insurer would have to make at that point, the difference representing profit. (Alternatively, it could be an all-or-nothing bet: if after t passes I am still alive, the insurer pays nothing.)

Put this way, insurance sounds very much like a wager. The impression is strengthened by looking at the payoff structure of the transaction. An ideal voluntary bargain displays what is called Pareto improvement, which is a fancy way of saying that the deal makes at least one party better off without making anyone worse off. I pay you $5 and you pour me a beer; I value the beer more than $5 at that moment, and you value the $5 more than the beer. The trade makes each of us better off, since we each acquire something of greater value to us.

Is the insurance wager – or indeed, any wager – Pareto improving? Arguably, no. Most wagers are zero-sum. There must be someone who wins and someone who loses, and if it is a pure zero-sum transaction, one party’s winnings will exactly correspond to the other party’s losses. If I bet you $10 that it will rain tomorrow, and tomorrow it rains, I gain $10 and you lose the same amount. In the case of life insurance, if I die before t, I “win” and the insurer loses. If I die after t, the insurer wins and I lose. Regardless of which outcome happens, we will not both be better off, at least not financially. One of us wins and the other loses.

In reality, insurance contracts seem to be hybrid in nature, having characteristics of both bargains and bets, but more of the latter. They are like bargains in the sense that both parties – at least subjectively – get some value out of the contract: the insurer makes a profit, at least statistically. The insured person, meanwhile, gets peace of mind. So it seems that once one expands the notion of payoffs beyond mere dollars and cents, this is not a purely zero-sum transaction. Of course, this is rather trivial, since it is much the same with any kind of wager: financially, there will be a winner and a loser, but both parties get to experience the pleasant titillation that comes from betting. People who gamble enjoy gambling (for the most part). That must be factored into the payoff structure of the bet. However, depending on the bet, it is questionable whether the pleasure comes at too high a price. In short, the bettor might still be acting quite irrationally. Problem gamblers get a momentary thrill from gambling, but the thrill seems outweighed by the loss of home, family and credit. Except for very small bets, or perhaps in rare examples of Kipling-esque “great-souled” gamblers, I would argue that most wagering is irrational.

Returning to life insurance, it is worth noting that the insured person’s peace of mind is only gained because (i) he lacks information about a future event, and (ii) he is risk-averse, perhaps to an irrational extent. If he had information, and the information was that he was not at risk of premature death, he would not agree to the insurance bargain, because he would stand to gain nothing and his money could be spent elsewhere with more utility. On the other hand, if the information was that his death was going to be premature, he would purchase much more insurance than he otherwise would. As things stand, he is likely either over- or under-purchasing insurance.

As for risk-aversion, if the insured had a realistic attitude towards risk, he would only sign a contract on terms that the insurer would refuse, because insurers base their contract terms on the proposition that, taken in aggregate, they will receive more money than they will eventually have to pay out. In other words, they profit by the fact that people are willing to pay more for insurance than the actual risk says they rationally should. Their main source of profit is essentially the irrationality of those they insure. In a sense, an insurance company constructs a Dutch book. They know what the odds are of a certain kind of event’s happening. They know that people tend to overestimate those odds, and they take advantage of this weakness by offering terms that ensure that they win in the long run, even if they lose in the odd individual case.

(When I refer to “irrationality” here, I don’t mean that it’s outright irrational to purchase life insurance. After all, odds are just odds, and the improbable in this case happens just often enough that one may find it worthwhile to hedge against it, at least in terms of the concomitant peace of mind one gets from it. My risk-aversion may be irrational, but it is also a basic psychological fact that I must take into account. It’s a fact that makes the wager worthwhile to me. But from a strictly financial point of view, my money would be better spent or invested elsewhere.)

If I have succeeded in characterizing life insurance as a gambling wager rather than a straightforward bargain of sale, then the conversation around the duty of disclosure can be seen in a different light.

First, it’s worthwhile noting that, with a few exceptions, the common law will not enforce gambling contracts (though it so happens that insurance is one of those exceptions).

Second, as we saw, in a bargain the seller has a legal and moral duty to disclose any defects in his goods that he is aware of and that the purchaser has not the opportunity of inspecting for herself. This duty does not typically apply to gambling wagers. I may take advantage of knowledge I exclusively hold and place a bet without disclosing that I have such knowledge. This is considered fair dealing in wagering, but not in contracts. Gambling is ipso facto taking a risk; a contract is not. In gambling we are supposed to hold our cards close; in contracts, we are expected to lay them out on the table if they affect the other party.

If life insurance is essentially a wager, then I should be entitled to keep whatever I find out from 23andMe to myself, not just on grounds of a supposed right to privacy, but because the insurer simply has no claim on it.  An insurer constructs a wager based on the statistical probability of an event’s happening, and precisely because it’s based on statistical probability, they can offer that bet to all comers. In each wager they accept a degree of risk, but taking all their policies together, their venture is relatively low-risk, assuming they’ve constructed their wagers properly. In demanding full disclosure of information, it seems insurers want to make their particular brand of gambling risk-free. The law might say they have a right to full disclosure of what they deem pertinent information, but morally they are being rather poor sports.

Conflict of Interest: Case Study #2

How real estate markets inflate

In February, I promised three case studies in professional conflict of interest, derived from personal experience. Here is the second one. Although I suspect you may find these examples rather mundane, it is their very mundaneness that I find interesting. I keep coming across issues of conflict of interest in my everyday professional life, so in that sense, they are literally mundane. And they arise from the actions of people who should know better. This I find interesting. People that are intelligent and not otherwise immoral seem unable to identify conflicts of interest in their own conduct. This may be because examples presented to them in various resources on the subject tend to be more dramatic than the situations in which they are most likely experience it. So, mundane examples might be more helpful than very dramatic ones that people are less likely to encounter in their daily lives.

Here is the situation. There was a certain research funding competition, with the following two characteristics:

1.    Applications were institutional, meaning that the university was technically the applicant, rather than an individual researcher, though the latter would still be the project leader.

2.    There was a certain “envelope” of funds allotted to each institution by the funding agency, meaning roughly that there was a limited amount of funding a given institution could apply for.

Under these circumstances, it was in the university’s interest to make sure that they put forward the best quality projects so that they could capture as much of their allotted funding envelope as possible. It was also in the university’s interest to not put forward too many projects, since doing so would mean that the university’s own projects were essentially competing against each other, while wasting the resources that go into putting together unsuccessful applications (the application process for this competition is remarkably onerous and difficult).

With all this in mind, the university devised a process whereby interested applicants were required to submit an internal notice of intent (NOI) — through their faculty’s Dean — to the university’s Vice-President Research. The Vice-President would then make decisions about which projects would go forward to the application stage.

If a faculty was forwarding more than one NOI, the Vice-President required that faculty’s Dean to rank them. In our faculty’s case, we had a problem: we had two NOIs being submitted, one of which belonged to our Dean (the other belonged to a high-performing researcher who also was a prima donna — but that’s another story). To his credit, our Dean immediately recognized the conflict of interest this put him in with respect to ranking. Clearly it would have violated the fundamental principle of justice that nemo iudex in causa sua (“No one ought to be a judge in his own case”).  I phoned the Vice-President’s office to explain the situation and find out if this requirement still applied to us. I was told that it did. Furthermore, I was told that it was the prerogative of the Dean, by virtue of his office, to rank his own application higher if he wished.

Not even the Crown’s prerogative extends to violating the principles of fundamental justice. A large and burgeoning branch of law — administrative law — is predicated on the idea that there are limits to such prerogative. But apparently, high-ranking university administrators do not have such a limited prerogative.

It is not difficult to see that it would be wrong for the Dean to take part in his own ranking. If he had ranked his own project higher, his competitor would naturally believe that the fix was in, even if the Dean ranked honestly. And if he had ranked himself lower, his competitor might still conclude that he had done so only to avoid controversy, even if the Dean had ranked honestly. The issue is not about the Dean’s honesty, but about justice being done and, as importantly, being seen to be done. In this case there would have been no way for justice to be seen to be done, even if it had been done.

Beyond the principle that justice must be done and seen to be done, conflict of interest also has the corrosive effect of lessening respect and trust in legitimate authority. (Illegitimate authority, however, deserves no respect or trust; but legitimate authority may become illegitimate precisely because it is prey to systemic conflicts of interest, also known as corruption.)

Another way to look at the wrongness of conflict of interest is by looking to the objective supposedly being served by a process or system: if the objective is good, and if the conflict of interest thwarts the process and/or undermines the objective it serves, then the conflict of interest is bad. In this case, a process was put in place to serve the objective of efficient use of resources, by a) not duplicating effort, and b) making maximal use of the available envelope — i.e. not “leaving money on the table”. This required that those projects be identified which are of the highest quality, and hence, most likely to succeed. The Dean’s participation in his own ranking would have muddied the waters in this last regard. The Vice-President would not be able to rely on the rankings he received. This makes the Vice-President’s attitude all the more puzzling. He was essentially asking our Dean to undermine his (i.e. the VP’s) own process.

The Vice-President’s insistence on the Dean’s prerogatives at first troubled me most because it caused problems for us that are best described as “political”. A prominent and accomplished researcher with an ego to match would have been rightly angered at being cheated, with predictable internal repercussions down the road for our faculty. But aside from politics, there was the greater ethical problem conflict of interest represents. Laudably, our Dean simply forwarded both NOIs without providing the required ranking. But if he had provided it, and especially if he had ranked himself higher, his action would have the effect of:

1. Undermining reasonable goals.
2. Undermining institutional trust.
3. Advancing personal interests at the expense of the common good.

Therein lies the wrongness of conflict of interest in this case.

Bird-Batting and Bat-Fowling

In a post back in November on English editions of Lord Shaftesbury’s Characteristicks of Men, Manners, Opinions, Times, I had a few things to say about the emblematic engravings that Shaftesbury designed to illustrate his work. In 1974 Felix Paknadel wrote what still remains the most detailed account of the symbolism encapsulated in these engravings. Although anyone interested in the subject must ever be grateful for Paknadel’s effort, a new attempt at interpretation is long overdue. I would like to give an idea of what I mean.

Paknadel was particularly puzzled by the decorative headpiece in Volume III of Characteristicks, illustrating Shaftesbury’s “Miscellaneous Reflections” (pictured above). Paknadel wrote that “The emblems on each side have little to do with the texts of reference. Nor have we found in the treatise any metaphor of which they would be the graphic representation.”

The texts of reference inscribed on the plate are to pages 1, 3, 5, 95, and 132. Of these, pages 1, 95, and 132 refer simply to the first pages of three of the five "Miscellaneous Reflections", which contain little more than titles and descriptive lists of contents. So in a sense Paknadel was correct, in that there are no specific reference texts for the page references. The page references seem not to lead the reader to anything specific. However, I submit that Paknadel was being too literal in looking for specific passages corresponding to the headpiece design. Although Shaftesbury often did refer to specific passages, here I believe he simply intended the headpiece to illustrate general themes treated of in the “Miscellaneous Reflections”. After all, the latter were consciously meant not to be systematically organized, so why should we expect the headpiece illustrating them to be so? Indeed, I will attempt to show that just one small panel of this headpiece has multiple allusions and significations. Examine, if you will, the left panel of the triptych comprising the headpiece:

There is a net strung across some trees, full of ensnared birds, as well as various other traps. This seems to bear some relation to the following passage in Butler’s Hudibras, II.iii.1-10:

    "DOUBTLESS, The pleasure is as great,
     Of being cheated, as to cheat.
     As lookers-on feel most delight,
     That least perceive a Juglers slight;
     And still the less they understand,
     The more th’ admire his slight of hand.

     Some with a noyse, and greasy light,
     Are snapt, as men catch Larks by night;
     Ensnar’d and hamper’d by the Soul,
     As noozes by the Legs catch Foul."

A similar reference occurs in John Webster’s The Dutchesse of Malfy (1623), III.v.98-101:

    "Is that terrible? I would have you tell me
     Whether is that note worse, that frights the silly birds
     Out of the corne or that which doth allure them
         To the nets? You have hearkned to the last too much."

The Butler passage seems the more important, in that a major theme Shaftesbury is illustrating here is superstition and its duperies, a major theme in the “Miscellaneous Reflections”.

Further light is shed (pardon the pun) on the practice depicted in this image in Henry Fielding’s Joseph Andrews (1742), Bk. II, ch. 10, p. 230: “These People who now approached were no other, Reader, than a Set of young Fellows, who came to these Bushes in pursuit of a Diversion which they call Bird-batting. This, if thou art ignorant of it (as perhaps if thou hast never travelled beyond Kensington, Islington, Hackney, or the Borough, thou mayst be) I will inform thee, is performed by holding an large Clap-Net before a Lanthorn, and at the same time, beating the Bushes: for the Birds, when they are disturbed from their Places of Rest, or Roost, immediately make to the Light, and so are enticed within the Net.”

The first French edition of Joseph Andrews (London, 1743) calls it éclairer l’oiseau. Interestingly, some modern editions, including the most recent Oxford World Classics edition, replace “Bird-batting” with “Bird-baiting”. This is a mistake. First of all, it is not a typographical error. The separate first Dublin edition also has “bird-batting”, as does the “revised and corrected” second London edition. Second, more detailed accounts of the practice describe it as consisting of beating the bushes, and then using a lantern to see where to hold the net. In other words, the person who beat the bushes could be characterized as the “pitcher”, and the person or persons holding the lantern and net would be the “batters”. In fact, the sense was even more literal: instead of a net, a bat was commonly used to stun or kill the startled birds. Furthermore, an alternative name for the practice is “bat-fowling”, an obvious play on words for that other winged creature that flies at night. Reverse the order of the words in “bird-batting” and you get “bat-birding” or “bat-fowling”.

Bat-fowling appears in Shakespeare, The Tempest, II.i.188: “We would so, and then go a-bat-fowling.” Indeed, the very passage in which it occurs is likely what Shaftesbury had in mind for his illustration (supplemented by the interpretation inspired by the passage from Hudibras, above):

    "GONZALO. I do well believe your highness; and
          did it to minister occasion to these gentlemen,
          who are of such sensible and nimble lungs that
          they always use to laugh at nothing.
     ANTONIO. ‘Twas you we laughed at.
     GONZALO. Who in this kind of merry fooling am nothing
          to you: so you may continue and laugh at
          nothing still.
     ANTONIO. What a blow was there given!
     SEBASTIAN. An it had not fallen flat-long.
     GONZALO. You are gentlemen of brave metal; you would lift
          the moon out of her sphere, if she would continue
          in it five weeks without changing.

     [Enter ARIEL, invisible, playing solemn music]

     SEBASTIAN. We would so, and then go a bat-fowling.
     ANTONIO. Nay, good my lord, be not angry.
     GONZALO. No, I warrant you; I will not adventure
          my discretion so weakly. Will you laugh
          me asleep, for I am very heavy?"

Antonio and Sebastian are having a go at the serious Gonzalo. He is soothed by Ariel’s music, and no more takes offense at the ridicule he is receiving. The allusion is to Shaftesbury’s doctrine that there is nothing wrong with injecting a little humour into a serious debate. Such levity, if well-placed and tasteful, will contribute to civility of discourse where gravity might lead parties to come to blows. On a more general level, the advice is to not take ourselves too seriously. Which brings us to the next allusion in the piece…

As if allusions to Hudibras and The Tempest were not already enough to pack into this little section of a headpiece, I submit that the panel would also have summoned in readers’ minds La Rochefoucauld’s Reflexions ou sentences et maximes morales (1st ed. 1665), a work whose 17th-century editions contained a frontispiece that would have been familiar to Shaftesbury’s audience:

In Rochefoucauld’s frontispiece, a laughing cherub (rather than Shaftesbury’s satyr) points to a bust of Seneca, the pedestal of which contains the Latin inscription “QUID VETAT”. This is a reference to Horace, Satires, 1.1.24-25: “ridentem dicere verum / quid vetat?” (“what is to prevent one from telling the truth as he laughs?”). The same quotation became the motto on the title page of Shaftesbury’s “Letter concerning Enthusiasm” upon its re-publication in Characteristicks. Why was Seneca the target of ridicule for Rochefoucauld? For one thing, as a Stoic, Seneca had what the cynical Frenchman would consider to be an over-inflated opinion of the nobility of human nature. For another, Seneca took himself very seriously (and unlike Horace, wrote tragedies rather than satires). Also, Seneca, the high-ranking courtier and politician under the emperor Nero, would have been anathema to the politically embittered and cynical Rochefoucauld, living under the absolutist regime of Louis XIV. There is no indication of whom, if anyone, the busts in Shaftesbury’s design are intended to represent. In his instructions to Gribelin, he merely refers to them as “a Set of Vizzard-Masks of several Kinds”. However, they bear severe — even angry — expressions, as did the bust of Seneca. In the Rochefoucauld frontispiece, beneath the feet of the cherub, is inscribed “L’ amour de la verite” (“Love of truth”). The general idea being offered by both Rochefoucauld and Shaftesbury in these designs is that humour may be used to speak truth to power, whether those powers happen to be self-important politicians, or the Church.

It is also worth noting that English editions of Rochefoucauld’s work tended to be titled Moral Maxims and Reflections, more than a little reminiscent of Shaftesbury’s title for the contents of Volume III of Characteristicks, “Miscellaneous Reflections”.

The Janus-faced nature of the bust being pointed to and laughed at by the satyr may also allude to the following passage of Characteristicks, Vol. I, p. 66: “But at present there is nothing so ridiculous as this JANUS-Face of Writers, who with one Countenance force a smile, and with another show nothing but Rage and Fury.” The quote is from Shaftesbury's treatise in Vol. I, "Sensus Communis", where raillery is recommended for such hypocrites, symbolized by the satyr.

All this rich texture of allusions, packed into one little section of this symbolically overstuffed headpiece, went largely unnoticed by Paknadel. Hence I think it is time for a new study.