Knowing and Making

Any of these links could have made a blog posting of its own, but instead why not help yourself to a high-density nutritious snack selection of random commentary? During the first lecture of Paul Krugman's London visit last month he commented that the economy might be "stabilising". The stockmarket leapt a hundred points (giving rise to much hilarity on the second and third evenings). This perceptive writer points out a similar occasion in 1929 when someone "of no great note" called Roger Babson made a comment that the market was due to crash. At which point it duly crashed - for the next twenty-five years. Now a little later in the Robbins lectures Paul Krugman reviewed a history of not the 1929 but the 1873 depression - and how the economy recovered from that, in the absence of the modern era's gifts of Keynesian stimulus and World War II. Nothing to do with the earlier comments...except for one little thing... An interesting behavioural marketing tactic ...

The Royal Mail is caught in the middle of a collision between its past and its future. Decisions made in the past have led to a £10 billion pension fund deficit. Other decisions - whether by the board or by the Post Office's regulators - have held its business model back from evolving in a world where communications technology is changing faster than any other. I don't know about you, but I send barely any letters nowadays; the occasional Mother's Day card and VAT return is about it. I pay bills online, send invoices by email and even our direct marketing is mostly by email. On the other hand, I probably receive more than I used to: Amazon and other online stores have enabled a combination of online ordering and delivery service to compete very powerfully with retailers. And the margins on these deliveries must, I suspect, be better than on ordinary letters - though there is much more competition. So the Royal Mail has two problems. Its past has created huge obligations, i...

Looks like the UK is just as bad as the US at protectionism. Energy workers are on strike demanding that Total not be allowed to hire Italian workers at one of its plants. Never mind that Total is a French company investing in the UK; never mind that free movement of labour is guaranteed in the EU; never mind that twice as many British people work in the rest of Europe than vice versa. Apparently we are supposed to kick out a supplier with whom Total has freely contracted. Unfortunately this seems to be an example of rational ignorance in the political market. It requires a certain effort to educate oneself about an issue and make sufficient political fuss about it to influence anyone. The typical protectionist policy creates worthwhile benefits for a small consituency (let's say steelworkers) while the costs are spread among a far larger population. It's worth it for the steelworkers to run a campaign (or pay their unions to do so) to grab their $20,000 each; but too much tr...