Economics

How the economics of cow-milking can help explain Brexit | 1 August 2017

Writing about judicial appointments, I incautiously compared a silly interview question asking a judge to cite an example of when he had acted with integrity, to asking a farmer, ‘How many times a day do you milk your cows?’ Jamie Blackett, a farmer, writes to say that, in the 21st century, it is a question to which the answer reveals much. He explains. Farmer One milks his 50 cows only once a day. He follows the Norwegian system and makes a marketable green virtue of leaving the calf on the cow. He lives near rich people and sells them his artisan cheese and yoghurt. He voted Remain. Farmer Two milks

What stopped Stoppard?

Two programmes this week presented two radically different world views, or rather ways of life. Aditya Chakrabortty’s series for Radio 4, Decoding the News, looked at five words or phrases which have come to characterise how politics, finance and business operate in the UK. We entered a world of policy wonks and pundits, of words used not to enlighten or explain but to calculate and confuse. A world in which those who tell stories get all the attention, while those who insist on sticking to the facts are ignored or on occasion ridiculed. It made for chilling listening as, for instance, Chakrabortty deconstructed the meaning of that slippery term, ‘shareholder

Down with declinism

On the anniversary of Britain voting to leave the European Union, the Principal of Hertford College, Oxford, found some words to sum it up. ‘An entire society crucified by the delusional ambitions of Brexiteers chasing moonshine,’ wrote Will Hutton. ‘An anniversary to mourn.’ One might agree or disagree with his position on the European Union, but has British society really committed suicide? It’s a theme we have heard rather a lot recently: that Britain is a mess, an international laughing stock, leader-less and futureless. The case is normally made by Brits. Rapid shocks — terrorism, the surprising election result, the Grenfell Tower disaster — have inspired forebodings just as the

Even the BBC’s Business Editor struggles to explain the deficit

With austerity so last election, voters no longer seem too fussed by the deficit. It may be that they no longer think it’s a problem, with polls showing that the average voter thinks that debt is going down. Why? Because they keep being given that impression by broadcasters who talk about ‘deficit reduction’ while wrongly thinking that people know what this means. ‘Deficit’ is a Westminster wonk word, used nowhere outside of politics. Reducing the deficit means cutting down the annual government overspend, but you won’t hear the state-funded BBC using phrases like that. The BBC might be state-financed but this is not a conspiracy. The greater scandal is how few of BBC

Boats, goats and landslides

J.L. Carr’s classic novel How Steeple Sinderby Wanderers Won the FA Cup (1975) contains a character named Arthur Fangfoss. Mr Fangfoss is a rural tyrant who, when standing for the local council, limits his election address to a pithy eight words: ‘If elected, I will keep down the rates.’ No such brevity, alas, attends the 2017 manifestos of the UK’s three main political parties. The shortest of them — the Lib Dems’ Your Chance to Change Britain’s Future — weighs in at over 80 pages, while Labour’s For the Many, Not the Few extends to a well-nigh novella-length 23,000 words. The Conservatives’ Forward, Together is not that much shorter and

Keynes’s grandchild

‘Did you really deserve the Nobel prize?’ I ask Amartya Sen. ‘Why do you think you won?’ When you’re sitting opposite the world’s most respected living economist, at a time when the dismal science is under intense scrutiny, an opening question should be punchy. Thankfully, Sen, an 83-year-old Harvard professor, has a sense of humour. ‘You can’t ask me that,’ he says with a grin. ‘I have absolutely no idea why I won.’ He then composes himself. ‘Like any researcher, I’m happy if my work interests others,’ he says carefully. ‘But it would be a pretty bad way to conduct one’s life, thinking about how to win prizes, rather than

Don’t ask the experts

Michael Gove never intended to make his most famous remark. In an interview during the EU referen-dum campaign, the then justice secretary was told that the leaders of the IFS, CBI, NHS and TUC all disagreed with him about Brexit. He had tried to reply that people have ‘had enough of experts from organisations with acronyms saying that they know what is best and getting it consistently wrong’. But he was picked up mid-sentence by his appalled interviewer. ‘Had enough of experts? Had enough of experts?’ Gove’s partial quote was held up to ridicule, as if it embodied Trump-style populist rage; the battle of emotion against reason. As it turned

Food on the home front

From ‘The food shortage and how to meet it’, The Spectator, 2 December 1916: A rise in prices, if properly understood and properly used, will be our salvation, not our injury. High prices help conservation, and, what is still more important, they help supply… If we artificially cut down prices here, we sterilise instead of stimulating the impulse to feed us from abroad. We are in effect saying to the world: ‘If you are such fools as to send us food, we warn you that you are not going to obtain inflated prices. You will get nothing more here than what we choose to tell you is a fair price. Our

When reasoning goes wrong

It’s the intellectual bromance of the last century. Two psychologists — Danny, a Holocaust kid and adviser to the Israel Defence Forces, and Amos, a former child prodigy and paratrooper — meet at the end of the 1960s, and sparks immediately begin to fly. They spend countless hours locked in rooms together at Hebrew University and elsewhere, and eventually co-write a series of papers that will revolutionise the field, and lead to the surviving partner being awarded the Nobel prize in economics. Not, however, before this extraordinary partnership has itself fallen apart, like a love affair, in regret and mutual recrimination. Our heroes are Daniel Kahneman and Amos Tversky, celebrated

Breaking the Bank

The exchange of letters this week between Mark Carney and Philip Hammond made it very clear who the supplicant was. The Governor of the Bank of England informed the Chancellor of the Exchequer that he was prepared to extend his term by one year. Carney pointed out that while the personal circumstances that had made him want to limit his term to five years had not changed, this country’s circumstances had. So he would be here a little longer. Things had seemed very different a few weeks ago, when Theresa May bemoaned the consequences of the Bank’s monetary policy in her party conference speech. ‘A change has got to come,’

Letters | 27 October 2016

Bear baiting Sir: I couldn’t agree more with Rod Liddle’s exposé of western politico-militaristic hypocrisy (‘Stop the sabre-rattling’, 22 October). We’ve already poked the Russian bear way too hard — unnecessarily so. What Rod could have also highlighted was that Nato has spread so far eastwards that it’s a blessed surprise the next world war hasn’t already started. It almost did in 1962 when Khrushchev tried to move nuclear missiles into Cuba. The same principle applies to what ‘we’ are doing now — frontline, aggressive technologies, nuclear-implied, established in the old Soviet states of Latvia, Estonia, Lithuania and even Poland. In Moscow, the memory of 20 million dead Russians and their

Brexit’s philosopher king

‘There was never a consensus among economists that Britain should stay in the European Union,’ insists Professor Patrick Minford. ‘That was always rubbish.’ During the heat of the referendum campaign, Chancellor George Osborne asserted it was ‘economically illiterate’ to back Leave. ‘It’s Osborne himself who is economically illiterate,’ Minford shot back. Three months on from the UK’s EU vote, Minford has reason to feel pleased with himself. Economists for Brexit — the campaign group he hurriedly founded on a shoestring — is credited with helping to swing the result. Yet Minford is anxious, in part about the dismal behaviour of his fellow scientists. ‘I was deeply shocked by the economics

The internet of stupid things

Back in the 1980s a colleague of mine was paranoid about being burgled. Before he went away on a two-week holiday, he bought the most expensive telephone answering-machine he could find and installed it in plain view on his hall table. Each morning he phoned it from Spain and hung up once he heard the outgoing message. He’d then enjoy the rest of the day content in the knowledge that his flat was safe; if no one had stolen his absurdly flashy answering machine, he reasoned, they wouldn’t have stolen anything else. Today he could buy a Canary. These cost about £139 (the website’s canary.is) and let you view your

We need to invent something better than Machu Picchu

Don’t know if you’ve noticed, but middle-class rules now require that every dinner party cheeseboard must contain at least two cheeses which aren’t very nice. Typically one will be a veiny French cheese which is not as good as Stilton; another may be that foreign thing with rind on it which isn’t nearly as good as Cheddar. I was baffled by this for a long time, until I realised that these cheeses are not bought to be eaten, but to signal the sophistication of the occasion. Economists might call them Veblen cheeses. (One day someone should make an inedible cheese called Veblenne. They’d make a fortune.) There are many forms

How your brain buys a sofa

Almost every popular commercial product owes its success to two different qualities. First, it does the job it is ostensibly designed to do pretty well. Secondly, it has some quality that you might call ‘limbic appeal’. It delights or soothes our unconscious mind in ways which defy objective measurement. Much as it delusionally believes that it runs the show, the power granted to conscious reasoning within the brain is that given to a slightly colour-blind, utilitarian man when he buys a sofa with his wife. The man may have his own preferences, but he has a minimal role in the selection, involving as it does many complex factors that defy

Who needs governments?

On 26 October last year, the Spanish government shut up shop in preparation for a general election. This duly took place in December but then a strange thing happened: after all the build-up, the arguments, the posters and the television coverage, the result was… nothing. The various parties were so balanced, so mutually distrustful and ill-assorted that no government could be formed. Since last October, therefore, there has been no government in Spain. One can imagine that the average political correspondent would think this a terrible problem, maybe even a crisis. The Financial Times has referred to Spain ‘enduring’ months of ‘political uncertainty’. This is assumed to be a matter

If you’re riding the FTSE rebound you might still want to sell in May

When the FTSE100 fell close to 5,500 in February, we all said ‘Mr Bear is back’. On Tuesday the index hit a high for this year of 6,400, and we all wondered whether Mr Bear had done what I said he wouldn’t, and shuffled back to hibernation. But the truth is that shares have lately moved in parallel with the oil price, which has perked up partly for technical reasons including temporary curtailment of supply from Kuwait; and a major element of the FTSE recovery is in commodity stocks that had been wildly oversold. So we shouldn’t read any great swing of confidence into a market still 600 points down

My tip for the next cool shop: Argos

When I was at school in the 1970s, some of the richer kids would come back from their summer holidays with jaw-dropping tales about the wondrous places they had visited. Chief among them, as I remember, was Schiphol airport. ‘It was amazing,’ they would say. ‘There were shops and restaurants and stuff,’ and you could buy a Walkman for some insanely low price. A few others vainly tried to trump the Schiphol crowd by fancifully claiming to have been to Frankfurt airport and seen an actual sex shop there — an assertion widely disbelieved, certainly by me, until I used the airport 15 years later and discovered it was perfectly

Who killed murder?

Pity the poor crime writers. Our earnings, like those of all authors, are diminishing for reasons far beyond our control. Our fictional criminals and detectives are being outsmarted by genetic fingerprinting, omnipresent security cameras and telltale mobile phones. Who needs Sherlock Holmes to solve a tricky crime when you have computers, with their unsporting ability to transmit and analyse enormous quantities of data and identify culprits? But the bigger problem for us novelists (if not for everyone else) is that murder itself is dying. The official homicide rate peaked in 2002, thanks to Dr Harold Shipman, and has since fallen by half — from 944 then to 517 last year.

Matthew Parris

It’s the Labour moderates who need to get real

It has become commonplace to remark that there exists in Britain a mainstream political grouping that seems to be dwelling on another planet. Lost in fantasy, harking back to days long-gone, it lives on illusion. Time and the modern world have passed it by. Fleet Street and fashionable opinion rage against these mulish daydreamers for turning their backs on the voters and depriving Britain of an effective opposition. And all this is true. In only one detail are Fleet Street and fashionable opinion mistaken. They’ve got the wrong grouping in their sights. It is not Jeremy Corbyn, John McDonnell and their crew who fit this picture: it is the Labour