Economics

I spent the last few days in Deal and Folkestone with Professor Richard Thaler at Nudgestock, Ogilvy’s seaside festival of Behavioural Science. On my way home I decided to stop off at M&S to buy some runny scotch eggs and a pie, accompanied by some unwanted green things to make my basket look middle-class. Finding a long queue at the main checkout, I grudgingly took my goods to the self-checkout machines. (For the uninitiated, Richard Thaler is the co-author of Nudge, and more recently the author of Misbehaving. He is perhaps the godfather of behavioural economics, a dissident strand of economics which holds the outlandish view that the discipline might

It used to be that the most annoying thing in academic life was political correctness. But a new irritant now threatens to supplant it: the scourge of correct politicalness. The essence of correct politicalness is to seek to undermine an irrefutable argument by claiming loudly and repetitively to have found an error in it. As with political correctness, which seeks to undermine arguments by declaring the person making them a bigot, correct politicalness originated in the US. But it now has its exponents here, too. Foremost among them is Jonathan Portes. Portes’s career recalls that of the character Kenneth Widmerpool in Anthony Powell’s Dance to the Music of Time. Widmerpool

Numerous commentators have noted how the Irish marriage referendum was influenced by big business, especially Californian-based companies like Google. It’s one of the curious trends of recent years that big business, once considered the enemy of ‘the Left’, is now its greatest proponent; or at least the dominant strain of Leftism, social justice liberalism. Silicon Valley is the most extreme example of this, an industry that is young, dynamic and universally socially liberal; but elsewhere most politically interested billionaires in the West tend to be more liberal than the population, whether it’s George Soros funding various social justice causes or other Democrat-supporting moguls. In contrast, with the exception of the Bangladeshi

‘How do you feel when you go back to Gary?’ I ask Joe Stiglitz. ‘Well, frankly, I get depressed,’ he replies. ‘The American middle class was created in places like my home town and is now struggling badly — which makes me sad.’ Stiglitz, a Nobel prize-winning economist and the closest thing the left has to an intellectual superstar, grew up in Gary, Indiana, during the 1950s, when it was the heart of the booming US steel industry. His father sold insurance and his mother was a teacher. ‘We had a modest detached brick house, with a lawn all around — it was safe and secure,’ he recalls. ‘Back then,

‘Two million jobs have been created since 2010 — but there will not be a moment of rest until we have reached our goal,’ said David Cameron in a Telegraph article a fortnight before the election: ‘Two million more jobs; or full employment in Britain.’ It was a bold statement. Indeed you might think, given unemployment at 1.84 million in the winter quarter, that the target for new jobs was actually an error on the part of who-ever drafts the Prime Minister’s prose. Either way, it drew little attention amid the smoke of battle. But now the air has cleared it merits revisiting, because it connects all the key themes

I don’t like to make business predictions, but — barring some apocalypse — I suspect there will be plenty of estate agents around in 2065, and occupying prominent high-street shopfronts just as they do now. This may seem an absurd prediction: after all, almost no one now uses an estate agent to find a house: we go to property websites instead. And, since we all assume the purpose of an estate agent is to find buyers for a house, a role usurped by Rightmove and Primelocation, we think the remaining days of the estate agency are few. However, perhaps the principal role of an estate agent is not to find

Now and again, intelligent people, politicians and columnists attack ‘trickle-down economics’ in the mistaken belief that it exists. Or that it ever existed. In his classic book, Basic Economics, Thomas Sowell gives a brief history. Here’s the excerpt: There have been many economic theories over the centuries, accompanied by controversies among different schools of economists. But one of the most politically prominent economic theories today is one that has never existed among economists – the ‘trickle down’ theory. Yet this non-existent theory has been attacked from the New York Times to a writer in India. Franklin D. Roosevelt’s speechwriter Samuel Rosenman referred to ‘the philosophy that had prevailed in Washington

I’m disappointed that Ed Balls’s suggestion that the Office of Budget Responsibility should audit the parties’ manifestos was never taken up, not least because we will never know what Robert Chote thinks of the Green party’s claim that all its proposals are ‘fully costed’. Believe it or not, this includes the commitment to spend £45 billion on loft insulation in the next parliament. It’s quite something, the Greens’ manifesto. No doubt you’ll have already read about some of their more reasonable measures — such as the ‘complete ban on cages for hens and rabbits’ and the insistence that ‘UK taxpayers’ money is not used for bullfighting’. But the sheer scale

Campaigning in Putney in 1978, Mrs Thatcher famously took out a pair of scissors and cut a pound note down the middle, telling her audience that the remaining stump represented what was left of the pound in your pocket after four years of Labour and high inflation. David Cameron may soon be able to repeat the stunt — except rather than cutting a note in half he will be able to stick a bit on the end to represent the extra buying power being granted to consumers courtesy of deflation. Inflation on the government’s preferred measure, the Consumer Prices Index (CPI), has fallen to 0.5 per cent. With the price

‘What is a Minsky moment, anyway?’ asks Gerry Stembridge, an Irish satirist. ‘I’ve been reading about them in the papers and have often wondered’. Stembridge is putting the question to Paul McCulley, chief economist at Pimco, the world’s largest bond fund with over $200 billion under management, one of the ten most influential economists on earth. McCulley is sporting a T-shirt and jeans. The two men, Celtic comic and American financial whiz, are on stage in a theatre in Kilkenny, a bijou provincial city in south-east Ireland. It’s Saturday night and they’re facing a sell-out crowd — all of whom have paid to watch a debate on global economics and

Spectator Money is out, with ideas on how to make it, spend it and even how to be seen spending it. Freddy Gray looks at the ‘social economy’ – think tax loopholes for financiers of politically favoured endeavours; while Camilla Swift peruses credit cards such as Kanye West’s ‘African American Express’ and the Dubai First Royale, ‘studded with diamonds. Bring it on, Sheikh Sugardaddy.’ Spare a thought, though, for the inconspicuous consumers – or at least, the wannabes. This segment took a hit last week in a joint operation dubbed ‘Onymous’, in which the FBI, Europol and friends arrested 17 alleged web-administrators and vendors and shuttered dozens of sites peddling child pornography, weapons, fake Danish passports, hacking services and so on. ‘Cash, drugs, gold and silver

There was much glee about yesterday’s publication of a report into the economic impact of immigration, which concluded eastern Europeans had provided a net benefit of £4.4 billion to the UK economy. There was far less mention of the fact that immigrants from outside Europe in the same period cost the taxpayers £118 billion. But as Christopher Caldwell observed in Reflections on the Revolution in Europe, the immigration debate is not about economics, for ‘the social, spiritual, and political effects of immigration are huge and enduring, while the economic effects are puny and transitory. If, like certain Europeans, you are infuriated by polyglot markets and street signs written in Polish,