Master the art of brinkmanship to run Brexit rings around Barnier
Michel Barnier invokes a wide range of emotions this side of the Channel. To his credit, the EU’s chief Brexit negotiator appears to have a stronger grasp of the insights of game theory than his UK counterparts. Thomas Schelling, the polymath winner of the Nobel Prize in economics, advanced the science of game theory in […]
How European commissioners really allocate EU funding
“Pork barrel” has been a theme in American politics for almost as long as the United States has existed. Many members of Congress work hard to secure public works projects, agricultural subsidies and the like for their own districts, almost regardless of the economic arguments for and against. Surely the European commissioners would rise above […]
There are economic lessons to learn from TfL’s hated bus announcement experiment
The Transport for London (TfL) bus experiment has proved to be overwhelmingly unpopular. Supposedly at every bus stop (but more usually once the bus has pulled away) a disembodied voice informs the passengers that the bus is about to move. The hated announcement is being run as a trial for four weeks. TfL will then […]
Carillion shouldn’t be brought under state control, but maybe central banks should be
A strong thread in the acres of print about the Carillion debacle is that the private sector should not really be involved in infrastructure projects. The public sector would, apparently, do it better. Readers who experienced life under the nationalised rail and telephone systems might be forgiven their scepticism. One idea which is taking hold […]
Act now, think later: Card surcharge ban is typical of myopic soundbite politics
Companies and service providers are no longer allowed to charge customers for using a credit or debit card. The new law came into effect last Saturday. The economic secretary to the Treasury, Stephen Barclay, trumpeted: “rip-off charges have no place in a modern Britain and that’s why card charging in Britain is about to come […]
‘Expertise’ has become a tool of the liberal establishment to drown out opposing views
The row over the Conservative-supporting journalist Toby Young’s appointment to the universities watchdog has been intense. Despite the relative obscurity of this public position, the left wing Twitterati have been besides themselves with rage. The affair has culminated in his resignation, over some tweets he posted. They are certainly a bit near the knuckle, to […]
The balance between wages and capital is shifting – rent seekers had better beware
The first column of a new year is the time for a prediction. By far the hardest part of forecasting is to identify tipping points. The success rate of calling a break in an established trend is very low. Accompanied by suitable health warnings, 2018 looks like the year in which the longstanding relationship between […]
Old-fashioned educational values offer the UK’s most deprived children a future
Economics is the gloomy science, but we can end the year on a cheery note. Newham Collegiate Sixth Form College is in one of the most deprived and ethnically mixed areas of the country, with high numbers of immigrants. Yet the example set by Mouhssin Ismail, the headteacher, is inspirational. At the start of every […]
Companies that bow to the social media mob are operating in the wrong century
Pizza Hut is the latest addition to the list of companies grovelling to criticism on social media. The restaurant chain tweeted an apology for running a promotion in the Sun newspaper. A few weeks ago, Paperchase said that it would not place any more marketing campaigns with the Daily Mail after receiving “hundreds” of complaints. […]
It is the private sector, not the state, that has enabled America’s economic recovery
The American economy continues to power ahead. The widely respected and independent Congressional Budget Office (CBO) reckons that the actual level of GDP in the US in 2017 is finally back at the level of potential output. The potential level of GDP is the amount of output which would be produced if there were no […]
The OBR’s forecasts should be taken not just with a pinch of salt, but with the contents of an entire mine
There has been a great deal of crowing in metropolitan liberal circles over the report of the Office for Budget Responsibility (OBR), published with the Budget last week. The OBR revised downwards its projections for GDP growth for each of the next five years. Annual average growth to 2022 is predicted to be just 1.4 […]
Doublethinking or dim? Why the Labour party can’t be trusted with the economy
Are members of the Labour Party frontbench experts in doublethink? The concept was invented by George Orwell for his novel 1984, written in the 1940s as a critique of the Soviet Union. Masters of doublethink can hold, for purposes of political expediency, two opposing opinions at the same time, one of which might be complete […]
Mind the gap: Economics is catching up to the fact that we’re not always rational
Do Tube strikes make Londoners better off? At first sight, the question is simply absurd. The answer is surely “no”. But a paper in the Quarterly Journal of Economics comes to the opposite conclusion. Cambridge economist Shaun Larcom and his colleagues analysed the two-day strike of February 2014. They obtained detailed travel information on nearly […]
There’s a difference between priceless and worthless, but economics can’t measure it
The so-called “productivity puzzle” just does not go away. The October, employment figures released by the Office for National Statistics (ONS) brings it into focus. The number of people in work rose to a new record high of 32.1m, with an increase of around one per cent compared to a year ago. Total output, measured […]
Catalonia tries to avoid repeating history, but Spain has economic reality on its side
Karl Marx famously wrote: “History repeats itself, first as tragedy, second as farce”. The phrase might well have been coined with Catalonia in mind. Generalissimo Franco began a military coup against the elected Spanish government in the Canary Islands in 1936. The battle spread across Spain, and Catalonia was the last redoubt of the Republic […]
