Economics

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

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,’

‘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

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

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

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

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

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

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.

Amid all the turmoil in global energy markets, we should not lose sight of the UK power programme that we’re praying will keep our lights on a decade hence: it is, as you know, a hobbyhorse of mine. So how’s it going down at Hinkley Point in Somerset? My man with big binoculars in the Bridgwater Bay nature reserve tells me he’s seeing plenty of lorry movements on the nuclear site, but signals from EDF of France — which has a two-thirds interest in this £18 billion project, alongside Chinese investors — are very worrying. Having already spent £2 billion, the French state utility has deferred until at least the

Some things are universally accepted as true. Water finds its own level; crumpets are best eaten in winter; and the England football team will not win the World Cup again, ever. On a par with these things, the most accepted part of economics is Keynesianism. Of course, John Maynard Keynes said lots of things about economics in between his many and varied sexual encounters. But, as is the way of the world, one of the things he said turned out to be particularly influential. It is so influential that it has gone around the world. It is repeated and relied upon by Japanese finance ministers, New York Times columnists, Nobel

Great progress has been made in open data over the last few years, with most important facts and figures now available online. The quality of the UK economic debate has been enhanced by the creation of the Office for Budget Responsibility, which publishes forecasts in a non-tricksy way. The journalist is spoiled for choice. But, still, you don’t tend to see such forecasts republished: the BBC doesn’t share them and even the FT‘s ‘economy at a glance‘ restricts itself to historic data – and static graphs, which you can’t interrogate. At The Spectator, we’ve been using dynamic graphs for a while. Now, we’re moving up to the next level using HighCharts, a more versatile Norwegian

Like the Christmas pudding sampled by Hercule Poirot at Kings Lacey — but six weeks early — our Spectator Money supplement contains a little treasure in every portion, and perhaps even a priceless gem. I particularly commend the essays by Warwick Lightfoot and Subitha Subramaniam on interest rates, and why central banks have become so hesitant to raise them. In recent days we’ve had an indication from Mark Carney of the Bank of England that UK rates will stay at their current low well into next year, maybe until 2017; in the US, strong job numbers have pumped expectations that the first rate rise for nine years will be delivered