A tip for Dominic Cummings: Don’t hire anyone who fails to grasp the power of incentives
The job advert issued by Dominic Cummings for people to work in government has attracted a wide range of comments. One particular focus has been on the sorts of skills he is looking for. Computer science, forecasting, artificial intelligence, causality theory — all these topics excite his interest. Cummings advocates a small selection of scientific […]
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 […]
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 […]
Full employment in Britain has lowered productivity instead of increasing wages
The UK jobs market is booming, as the latest ONS figures show. Unemployment is at its lowest for over 40 years. A record 32.1 million people are in employment, a rise of over 3 million since the financial crisis. Apart from in a few scattered pockets, Britain is at full employment. Usually in such circumstances, […]
Beware the dysfunctional consequences of imposing misguided incentive systems
Following the disclosure of salaries at the BBC, it has hardly seemed possible to open a newspaper or switch on the television without being bombarded by stories about pay. By pure coincidence, an academic paper entitled “Pay for Performance and Beyond” has just appeared. So what, you might ask? Except that it is one of […]
Believe it or not, Britain is getting happier
The dominant economic narrative in the UK is a pretty gloomy one just now. True, employment is at a record high. But, counter the whingers and whiners, zero hours contracts and low pay proliferate. The political discourse is full of the struggles of the JAMs – the Just About Managing The public sector moans about […]
Less austerity will always mean more tax
There is a great deal of discussion, following the election, of relaxing or even abandoning austerity. There is an equal amount of confusion about this, because the same word is being used to describe two quite separate concepts. The consequences of the government changing its policy on austerity are dramatically different, depending on which one […]
Don’t fear robots taking your job – worry about them cutting your wages
Robots and artificial intelligence (AI) seem to be in the news all the time, and breakthroughs are announced regularly. Last year, it was an AI programme which beat the world champion at Go, a game immensely more complex than chess. Now, in the austere American journal the Proceedings of the National Academy of Sciences, comes […]
Claims that a low tax, low regulation UK would be a disaster are rubbish
Dame Minouche Shafik, Deputy Governor of the Bank of England, is leaving to become Director of the London School of Economics. Last weekend, she gave her final interview wearing her Bank hat. Shafik issued what was described in the media as a “thinly veiled warning” to the Chancellor, Phillip Hammond. She stated that it was […]
The people of Burnley and Bradford have a point about the impact of immigration
The scenes as the migrant camp was cleared in Calais once again provoked bitter divisions in British society. Metropolitan luvvies and liberals tweeted their virtue and called for no restrictions on immigration. In more traditional areas, there is active resentment at the possibility of even further inflows of foreigners. When New Labour decided in the […]
