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Lessons from the wreck of the Torrey Canyon

On Saturday March 18 1967, around half past six in the morning, the first officer of the Torrey Canyon realised that his vessel was in the wrong place. The 300-metre ship was hurrying north past the Scilly Isles, 22 miles off the tip of Cornwall in the south west of England, with more than 119,000 tonnes of crude oil. The aim was to pass west of the islands, but the ship was further east than expected.

The officer changed course, but when the sleep-deprived captain Pastrengo Rugiati, was awoken, he countermanded the order. A two-hour detour might mean days of waiting for the right tides, so Capt Rugiati decided instead to carry on through the treacherous channel between the Scilly Isles and the mainland.

Most serious accidents have multiple causes. A series of mistakes or pieces of bad luck line up to allow disaster. The Torrey Canyon was hampered by an unforgiving schedule, barely adequate charts, unhelpful winds and currents, confusion over the autopilot, and the unexpected appearance of fishing boats in the intended course. But reading Richard Petrow’s contemporary account of the Torrey Canyon disaster, a clear lesson is that Capt Rugiati was too slow to adjust. He had a plan, and saw far too late that the plan was doomed to failure — and with it, his ship.

Some accident investigators call this “plan continuation bias”. Airline pilots sometimes call it “get-there-itis”. The goal appears within touching distance; it’s now or never. Tunnel vision sets in. The idea of a pause or a change of approach becomes not just aggravating, expensive or embarrassing — it becomes literally unthinkable.

In such circumstances aeroplanes have crashed after trying to land in bad weather because the destination airport was so temptingly close. Patients have died of oxygen starvation because doctors and nurses fixated on clearing blocked airways rather than checking whether an oxygen pump was working. And the Torrey Canyon ran aground, producing the world’s first major oil tanker disaster.

We’ve all experienced “get-there-itis”. For me, it tends to emerge when dealing with family logistics. One child needs to go somewhere, another must be picked up from school. Then it turns out that someone needs to be at home to receive a delivery; the car is in for a service; the babysitter calls to cancel.

The plan seems feasible at first, but as complications mount, it starts to resemble an increasingly precarious assembly of stages and steps, lift-swaps and rendezvous, a Rube Goldberg fever-dream of an itinerary. If I’m lucky, someone finds the mental space to see clearly the fragility of it all. Someone suggests a cancellation or two, replacing the entire time-and-motion nightmare with something radically simpler.

It’s that moment of clarity that is so often missing. Haste makes things worse, as when La La Land was mistakenly announced as the winner of the Oscar for best picture two years ago. When Warren Beatty opened the envelope he’d been given at the Academy Awards ceremony, live on stage in front of Hollywood’s most powerful stars and a TV audience of tens of millions, what he saw in front of him didn’t make a lot of sense. That was because he’d been given the wrong envelope.

With hindsight he should have walked off stage and asked for clarification — but of course, he felt under pressure to continue with the plan, which was to read whatever was in the envelope. In the end it was his co-host Faye Dunaway who blurted out the wrong film name; she had even less time than Mr Beatty to stop and think.

Is there a solution? In their book Meltdown (US) (UK), Chris Clearfield and András Tilcsik argue that even in fast-moving situations, successful teams will find a way to check on each other and reassess the situation. The simpler solution, although it is not always possible, is to slow down.

For those of you wondering whether this column is really about Brexit, you may draw your own conclusions. But Theresa May— who at the final hurdle has managed to get her signature policy crushingly rejected by the UK parliament — is not the only one who has been suffering from get-there-itis.

Her opposite number Jeremy Corbyn, the leader of the Labour party, is obsessed with winning the snap general election that he has no power to call. The hard Brexiters are so fixated on an immediate and extreme Brexit that they seem happy to risk disgrace if they succeed, and no Brexit at all if they fail. The EU’s negotiating triumph may yet be a pyrrhic victory. Even the pro-European parliamentarians, with whom I have considerable sympathy, are now fumbling as they scramble for the contradictory goals of a soft Brexit or another referendum. For each faction, the goal seems so close, the blinkers go on, and the ship hits the rocks.

In an attempt at damage control, the Torrey Canyon was bombed by the Royal Navy. The thickest oil slicks ended up on the beaches of France. Make of that what you will.

Capt Rugiati was haunted by his failure — a broken man, cowering from press attention. If only he’d taken the time to slow down and think again.

 
Written for and first published in the Financial Times on 18 January 2019.

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How behavioural economics helped me kick my smartphone addiction

The year 2011 was a big one for me. My son was born. We moved to a new city. I published a book. But something else happened that was in some ways more significant: on February 9 2011, I bought my first smartphone.

It didn’t feel like a milestone in my life at the time. I didn’t note it down in a diary or commit the date to memory. Only finding a copy of the receipt helped pin down the day. Yet I have come to realise that the phone was a very big deal indeed.

Daniel Kahneman, Nobel laureate and author of Thinking, Fast and Slow (UK) (US), distinguishes between the “experiencing self” and the “remembering self”. My remembering self dwells upon the landmark moments such as the new baby. But my experiencing self is all about the phone.

I spend more time interacting with it than I do interacting with my children. I am in the presence of the device more than I am in the presence of my wife, although at least I have my priorities straight as to which I go to bed with.

As Cal Newport puts it in a new book, Digital Minimalism (UK) (US), we didn’t sign up for this. My first email account (1994) received a handful of messages a day, most of them newsletters I subscribed to in order to prevent cobwebs forming in my inbox. Facebook (2004) was a curiosity, less interesting than the latest computer game.

The first iPhone (2007) had no app store and was originally conceived as an iPod that made phone calls — although since “crackberry” had just been named the word of the year by Webster’s New World Dictionary, perhaps we should have seen what was coming.

But we didn’t. The hardware and software of the mobile age have gradually and profoundly entangled themselves in most parts of most people’s lives. If you are anything like me, you pick up your phone much more often than you pick up a knife and fork, and spend far longer reading email than reading books.

Not that I wish to grumble. These tools are enormously powerful. Without them I’d need to hire a secretary, spend hours playing phone tag and give up on working during long journeys by train and plane. Yes, they may occasionally distract me during the school nativity play, but the alternative would have been to miss the play entirely, because the office and the school are 50 miles apart.

I am not entirely happy with the role these technologies play in my life, but neither do I want to relinquish them. I know I’m not alone. For several years now, I’ve been dispensing sporadic advice about email overload both to readers and — if I am honest — to myself.

But late last year, I decided to do something more radical: to deploy everything I knew about economic theory and behavioural science, along with a few hard-won practical discoveries, to rebuild my relationship with the digital world from scratch. This is the story of what I learnt.

The power of the status quo
Inertia is always the first obstacle. Richard Thaler, who won a Nobel Memorial Prize for his contributions to behavioural economics, coined the term “endowment effect” to label the behaviour of an oenophile economist.

The economist had snapped up some Bordeaux wines for $10 a bottle, only to see them appreciate in value to $200 each. The economist wouldn’t have dreamt of paying $200 for a bottle of wine, but didn’t want to sell the wine for $200 either. He was happy to drink it on special occasions instead.

This behaviour is illogical: either the economist should prefer $200 or he should prefer the wine, and which he actually possesses should make no difference. Yet his actions seem perfectly natural, and Thaler and colleagues were able to demonstrate similar behaviour in laboratory experiments.

We like what we have, and these experiments suggest that we have no better reason for liking what we have other than that we have it: the disadvantages of choosing something else often loom larger than the advantages. As a result, we are reluctant to relinquish what we have — including the digital tools we’ve grown accustomed to using.

For this reason, digital sceptics such as Cal Newport and Jaron Lanier suggest that the first step in a reassessment of your digital habits should be a sharp temporary break.

If you are anything like me, you pick up your phone much more often than you pick up a knife and fork

Lanier, a pioneer of virtual reality and the author of Ten Arguments for Deleting Your Social Media Accounts Right Now (UK) (US), advises at least a six-month break from all social media. Newport suggests a briefer but broader ban: not only no social media, but no Netflix, no Google Maps, no smartphones — no digital tools at all for 30 days, apart from whatever is professionally essential.

The point here is not a “detox”. There is no intrinsic benefit to taking a month off from computers any more than one might recommend a brief, invigorating break from smoking or opiates.

The aim is to change the status quo to allow a reassessment. It’s only after you put down the electronic rucksack overflowing with digital possibility and stroll off unencumbered that you’re in a position to make a sensible decision about whether you really want to carry it around all day long.

So, I stripped various apps off my smartphone. The first time I dragged an icon to the “uninstall” bin felt like a big step, but it soon became a giddy pleasure. Off went the news apps, and a blog reader called Feedly that absorbed a huge amount of my time and attention. I already eschew games on my phone, but would have removed them too with gusto.

I spared the Financial Times app (which surely passes Newport’s test of professional necessity), and also retained Google Maps, a podcast player, The Economist’s “Espresso” app, the camera and the weather. Newport would have been more radical but I felt satisfied with my choices.

The big question was: what to do with my social media accounts? Facebook was simply too troublesome to delete, especially since my personal account is connected in opaque ways to a “Tim Harford” page maintained by my publishers. But I never had Facebook on my phone and after briefly unfollowing or muting all my contacts, I had no problem staying logged out.

My Twitter habit is more of a problem. I have 145,000 followers, gently persuaded over 10 years and 40,000 tweets to follow me — that’s about 10 books’ worth, or 20 years of weekly columns. This alone was a reminder of just what an effort Twitter could be; but deleting the account felt like the nuclear option.

So what could I do? Two years ago, I hid the “mentions” column so that I don’t see what other people say about me on Twitter. (Much is friendly, some hurtful and almost all superfluous.) Yet I was still wasting a lot of time noodling around there for no obvious gain. So I deleted the smartphone app and on November 23 2018, I tweeted that I was planning to “get off Twitter for a bit”. By a pleasing coincidence, the last person I interacted with before logging out was the man who named the endowment effect, Richard Thaler.

Time for what?
One of the most important — and misunderstood — ideas in economics is that of opportunity cost. Everything we do is an implicit decision not to do something else. If you decide to go to an evening lecture, you’re also deciding not to be at home reading a bedtime story. If you spend half an hour browsing news websites, that’s half an hour you can’t spend watching football. Those 40,000 tweets cost me something, but I am not sure what and I certainly didn’t ponder the cost while tweeting them.

This neglect of opportunity cost is a very human trait; we often fail to bring to mind the opportunity costs of our choices. One fun if slightly dated illustration of this is the choice between a £1,000 high-end CD player or a slightly less excellent £700 unit.

A difficult choice — until it is phrased as a choice between a top-notch £1,000 CD player or a £700 player plus £300 worth of CDs. At that point, most people clearly prefer the second option. The opportunity cost of the more expensive player could hardly be more obvious, and yet bringing the obvious to our attention changes our decisions.

Trying to get work done with an internet-enabled device is like trying to diet when there’s a mini-fridge full of beer and ice cream on your desk

For this reason I was determined not simply to cut back on my digital activities, but to fill the freed-up time and energy with something else. I focused on three activities. First, more exercise: I replaced Twitter with an exercise app that could run me through some brief, vigorous training sessions.

Second, more fun: I looked up some old friends and invited them to play role-playing games with me every other Sunday evening, rolling dice and pretending to be wizards. (I realise that Dungeons & Dragons isn’t cool. But neither am I, so I don’t care.)

And third, since social media is supposed to be about connecting with far-flung people, and since Christmas was looming, I decided to start writing letters to include with Christmas cards. I couldn’t write properly to everyone but I did manage to write serious letters to nearly 30 old friends, most of whom I’d not seen for a while. I reflected on our long friendships, brought to mind good times long past and, in particular, recalled important moments shared just by the two of us, nobody else. The letters were the antithesis of clicking “Like” on Facebook.

The experiment was beginning to get interesting.

Swiping, fast and slow
As Daniel Kahneman explained in Thinking, Fast and Slow: “When faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.” Rather than asking whether we should buy shares in Amazon, we ask, “Do I like to shop with Amazon?” Instead of pondering the leadership and managerial qualities of a presidential candidate, we ask ourselves whether we’d enjoy having a beer with them.

Tristan Harris, executive director of the Center for Humane Technology, argues that the digital services we use often perform this substitution for us. Imagine, says Harris, a group of friends on a night out, trying to figure out where they can go to keep the conversation flowing. They turn to their phones for a recommendation and find themselves gawping at images of cocktails on Instagram.

The phones, says Harris, replace the question, “Where can we go to keep talking?” with, “What’s a bar with good photos of cocktails?” Phones simply do not suggest options such as going back to someone’s apartment or strolling along the waterfront.

This happens all the time, and we often don’t notice the substitution. Looking for love, we swipe through faces on Tinder rather than searching for local clubs or volunteering activities. Picking up a phone to check the time in the morning, the question “What’s the time?” is quickly substituted with, “What did I miss while sleeping”?

While writing the last paragraph, I was confronted with the perfect example. It started to rain. Wanting to know whether the shower would last, I typed “weather” into Google. I was given an instant answer to my question, but I was also shown a list of weather presenters. Human faces! They are always eye-catching.

An old university acquaintance became a TV weather presenter; I wondered how she was doing. Who wouldn’t? Of course Google substituted an easier question: What does she look like these days? Other photos of weather presenters were also offered and, 30 seconds later, I was looking at pictures of a completely different weather personality, Tomasz Schafernaker, stripped to the waist.

Fifteen years ago, I would have struggled to explain this sequence of events to my wife. But nowadays, no explanation is really needed. We all know how swiftly and easily “When will it stop raining?” can lead to “What do Tomasz Schafernaker’s nipples look like?”

Trying to get some work done with an internet-enabled device is like trying to diet when there’s a mini-fridge full of beer and ice cream sitting on your desk, always within arm’s reach. You can crack open a can and take a swig before you’ve even realised what you’re doing.

Perhaps even worse, the tempting rewards are unpredictable. The psychologist BF Skinner once found himself trying to eke out a supply of food pellets he’d been using to reward rats. To his surprise, he found that “intermittent reinforcement” — sometimes the rats would get a pellet, sometimes not — was more motivating than reliable rewards. Unpredictable treats are highly addictive, just like email, social media or clickbait headlines.

So what to do about this problem? It’s not easy: by definition an intuitive response occurs before we have time to stop and think. The obvious solution is to create some friction. I installed a software plug-in called Strict Workflow on my desktop browser. With one click, it blocks time sinks such as Twitter, YouTube and various clickbait news websites for a period of 25 minutes.

It’s astonishing how many times during those 25 minutes I reflexively check, see the blocking message instead and go back to work. I’m hopeful that a few weeks or months with this blocker may break this fast-twitch habit, but in any case the software works.

Meanwhile, by uninstalling news apps, Twitter and Feedly, I’d made my phone less like a sweet shop. As a testimony to the power of unconscious habit, after uninstalling Feedly, I deleted a few incoming emails, then unthinkingly tried to find it. It took a moment for me to realise I was searching for an app that I’d deleted less than a minute earlier.

It was a reminder that there’s more going on here than poor or short-sighted decision-making: often when we use our phones, we’re not really making any conscious decision at all.

Spillover benefits
Paul Romer won a Nobel Memorial Prize recently for analysing the way different innovations would spill over, enabling other innovations and the process of economic growth itself. Four weeks into my experiment, I was noticing some unexpected spillover benefits myself. The phone was still tempting, but decreasingly so. I took my children to see a Christmas film and, for the first time in years, didn’t feel the urge to check it.

I was getting a real sense of the mutually reinforcing nature of the distraction ecosystem — and how I’d failed to see it clearly when inside it. In November, for example, I would have been scrolling through Feedly looking for interesting material. I told myself I was looking for things to read, but really I was looking for things to tweet about. If pushed for time, I’d sometimes tweet things instead of reading them. This foolishness was evidence of a seriously bad habit.

But having uninstalled Twitter, I found myself less tempted to go and look at my Twitter stats (nothing to see) and also less tempted to flick through the blogs. After all, if I wasn’t going to tweet about them, why not read a book instead? Each new app that I removed from my phone weakened my tendency to pick up the device; often, it made other apps less useful or less appealing. I hadn’t seen this effect coming, but I wasn’t complaining.

Adapting to events
The first of January is usually the date for turning over a new leaf but, with hindsight, beginning my experiment in late November instead was an accidental masterstroke. The run-up to Christmas is a different kind of busy: the volume of email declines, replaced by Christmas cards and shopping lists. It’s a time when we often see people face-to-face instead of on Facebook.

By unplugging various digital services, I was moving with the wind at my back; doing firmly and deliberately what I might anyway have drifted towards.

The experiment was working well. I wasn’t missing Twitter at all. I was spending much less time with the phone. Some old friends were emerging from the woodwork to tell me how much they enjoyed receiving my letter. A few fretted that I was going through some kind of crisis, but overall the letters felt like a vastly better way to contact people than through Facebook.

When I did see friends and family, I found it easier to give them my full attention. Sherry Turkle, author of Reclaiming Conversation (UK) (US), has found that people initially used texts as an add-on to face-to-face conversation, but the texts soon became a substitute: more convenient, more controllable.

The problem with real conversation, one high-school senior told her, was that “it takes place in real time and you can’t control what you’re going to say”.

I sympathise, and we probably all had face-to-face conversations over Christmas that we wish could have been conducted from a thousand miles away. But while real conversation can be tiring, it is also vastly more rich and meaningful than a few dozen bytes of text. The less distracting I found my phone, the more I enjoyed talking to the people in front of me.

At the end of December came a strange and unexpected test: I was awarded an OBE in the New Year honours list. Suddenly the digital hush of the year’s twilight was interrupted by a steady stream of congratulatory messages.

I was out walking with some old friends, catching up on the news of the past few months and chatting about the year ahead. In my pocket, my phone was pinging, and I felt increasingly anxious about letting the messages go unanswered. I snatched moments here and there to type responses, offering slightly embarrassed excuses to my companions.

It’s not an experience I’m likely to repeat, but it taught me a few lessons. First, even friendly digital messages can provoke anxiety. I was fearful of appearing ungrateful by not replying promptly. This was silly. A delay would not have bothered anyone. But I couldn’t help myself. I should have left the phone at home.

Second, it’s easy to reactivate bad habits. After a couple of weeks in which I checked my phone a few times a day instead of several times an hour, the influx of messages pushed me back into the habit of checking my phone like a rat hoping for a food pellet. It took several days more to regain some calm.

Third, and more positively, the investment in spurning social media was paying dividends. I did buckle and log into Facebook for the first time in weeks, not wanting to ignore messages of congratulation. It was completely silent. People had worked out, it seems, that Facebook wasn’t a good way to reach me. I managed to resist logging into Twitter completely.

Still, I did start to wonder whether the new regime would survive contact with the normal working routines of January. I called Jocelyn Glei, author of Unsubscribe (UK) (US) and host of the Hurry Slowly podcast. “The notion that you’re going to change all your habits and be done is absurd,” she cheerfully warned me. Fair enough — but then how to sustain the new pattern?

Glei’s advice was to remain vigilant. It’s one thing to check out at Christmas, another to do so in September. It makes sense to stay off Twitter while writing a book; less sense, perhaps, while marketing it. Each new project, she advised, required a quick re-evaluation of where to draw the digital boundaries. The digital reset was going to be a work in progress.

Lessons learnt
The point of the break was to allow a thoughtful assessment of which digital services were worth letting back into my life. So as the new year starts up and emails start to flow freely again, what did I learn?

First, I didn’t miss being plugged into Twitter at all. I’ve been ignoring notifications for years — thus missing some of the benefit and much of the aggravation of the platform — but have still been tweeting away out of some strange combination of duty and inertia.

My new plan is to log in for a few hours on Friday, set up some links to my columns and other projects that may interest some people, and log out again. If I ever see a good reason to use the platform more intensively, I’ll be back.

Second, I enjoyed having a more boring phone. With very little on it now but an easily emptied email inbox and the FT app, I pick it up less often and for less time, and am more likely to do something useful with it when I do check it.

I did reinstall Feedly — which I find essential for my job — but will keep an eye on my usage. With no tweets to send, the app has become more useful. I read for the sake of learning rather than for the sake of tweeting.

Third, the “strict workflow” blocker worked so well in saving me from my fast-twitch impulses that I added my email inbox to the blocked list. I’d had limited success with an email blocker before, but this time was much more successful, perhaps because the blocker was part of a larger plan.

Finally, it was good to focus on the upside of the digital decluttering. Although it was partly an exercise in habit-breaking or self-denial, it was much more useful to think of it as spending time and attention on things that mattered.

Some old friends seemed genuinely touched to receive a real letter; nobody has ever been touched by a Facebook “Like”. I felt in better shape at the beginning of January than at the beginning of December, which is hardly the usual Christmas experience. I walked, talked, ate and drank with old friends. I even battled a few imaginary wizards.

I’ve no desire to give all this up to spend more time with my phone.

 

Written for and first published in the Financial Times on 17 January 2019.

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Trump, May and the necessary art of brinkmanship

Brinkmanship is an old idea, but not such an old word. It was first used in 1956, after US Secretary of State John Foster Dulles opined that “the ability to get to the verge without getting into the war is the necessary art . . . if you are scared to go to the brink, you are lost.”

Adlai Stevenson, the Democratic presidential nominee, began to use the term “brinkmanship” in response. He did not intend it as compliment.

Yet we find ourselves surrounded on all sides by leaders who think they have mastered this “necessary art”. The stakes are blessedly lower, but still high enough to deserve examination. In the US, Donald Trump has failed to deliver on his promise to get Mexico to pay for his border wall, and has partly shut down the federal government until Congress agrees that the US taxpayer will fund it instead. Voters will reach their own conclusions as to who is to blame.

In the UK, Theresa May wants parliament to vote for the unappetising Brexit deal she has negotiated with the EU. She offers two simultaneous and mutually exclusive threats, confronting hardliners with the prospect of no Brexit at all, while warning the EU and British moderates that there will be a chaotic “no deal” outcome instead.

Whether we are talking about Brexit, a border wall, or the early stages of the Vietnam war, each situation is different. Yet it is worth pondering similarities in the structure of the problem.

These threats may seem empty. Dulles did not want nuclear war. Mrs May does not want six-day-long traffic jams on the way into Dover. Nevertheless the threat may be made credible enough to achieve results. How?

One option is to use a doomsday machine, made famous by Stanley Kubrick’s dark comedy Dr Strangelove. The doomsday machine is credible because it is automatic. It cannot be switched off, only obeyed. The risks are obvious; in the movie, the doomsday machine destroys civilisation.

Mrs May’s doomsday machine was the Article 50 divorce process, which we were told could not be halted once begun. Without parliamentary approval of a deal, this legal doomsday machine would deliver a disruptive no-deal by default. Triggering Article 50 weakened the prime minister’s negotiating hand with the EU but strengthened it when dealing with those MPs who seem open to reason.

Yet it now transpires that the machine has an off-switch after all. The UK government can simply revoke its notification to leave. Mrs May therefore managed to hobble her bargaining position with the EU while leaving herself hostage to her own party.

The second tactic for gaining credibility is the “madman” strategy: if you are insane, or can fake insanity, then insane threats seem plausible. The strategy was flawlessly executed by Sheriff Bart in the film Blazing Saddles, who managed to escape being lynched by racists by threatening to shoot himself. That achievement is hard to replicate, though. As Bart tells himself, “you are so talented. And they are so dumb!”

Mr Trump is erratic enough to make the madman tactic seem plausible, although he has also frequently backed down. Mrs May does a good line in stubbornness, and is trying hard to make a chaotic no-deal seem as if it is an inescapable force of nature, like an earthquake or a flood. Yet it seems unlikely that she would embrace the chaos when, with a stroke of her pen, she could call it all off. Some leading Brexiters, however, have perfected the madman pose; they’ve convinced me that they simply do not care. Perhaps I’ve been fooled by a brilliant bluff. Perhaps.

There is a third way to make threats credible: create the risk of an accident. Thomas Schelling, cold war strategist and Nobel laureate economist, described handcuffing yourself to your opponent then cavorting on the edge of a cliff. You’re not suicidal, but you are willing to create the risk that things will go terribly wrong. If your counterpart fears that risk more than you, you may extract concessions.

As Schelling and his fellow strategists knew, in situations such as the Cuban missile crisis there was always a risk that something would get out of hand, and all of us would slip off the cliff together. It was this that made world-ending threats plausible.

If you are finding all this discomfiting, you are not alone. Somehow we have managed to produce a situation where democratically elected politicians are threatening substantial harm to their own countries as a bargaining tactic. The tactic is credible because accidents happen. At least we can comfort ourselves that long-range bombers are not involved.

How did we get here? Recall the final scene of Dr Strangelove. With Armageddon inevitable, Strangelove reassures the all-male leadership of the US that they could survive in underground cities. The survival of the human race would be ensured by a ratio of 10 “highly stimulating” women to each man. Everyone seems rather cheered by this thought.

Brinkmanship does not work if it does not create a risk of harm. Yet the people practising the strategy may not be the ones who will experience it.

 

Written for and first published in the Financial Times on 11 January 2019.

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Undercover Economist

Why there is no need to panic about fake news

A new year’s resolution for all: stop talking about fake news. Perhaps we should have stopped talking about it at the same time as we started. That, according to Google Trends, was the week after Donald Trump won the US presidential election in 2016, which suggests the interest was driven by astonished people looking for an explanation. Fake news was not the only scapegoat but it was, and still is, a popular one. It was even named the Word of the Year in 2017 by Collins Dictionary. Yet the phrase has long since ceased to be useful, and here are five reasons why.

First, fake news doesn’t mean anything — or rather, it means so many different things to different people as to be bewildering. Focus group studies conducted by the Reuters Institute for the Study of Journalism found that people placed various things under the “fake news” umbrella, including annoying pop-up advertisements, politicians making misleading claims, and newspapers with a political slant.

None of these match the original definition of fake news — at least, as I understand it — which referred to stories that were invented to win advertising clicks and impersonated or parodied genuine journalism. The most famous example was when the Pope was “reported” to have endorsed Mr Trump’s presidential candidacy.

Such stories were widely shared, and while some claimed to be humour or satire, the basic motive was monetary. It is cheap to invent lies, and eye-catching lies are a reliable source of clicks and thus advertising dollars. No wonder journalists became irate: for so many outlets, real news had become unprofitable yet fake news is a money-spinner.

But for all the people determined to believe that the Pope’s fictional endorsement had swung the election for Mr Trump, there is little evidence that it — or similar clickbait fabrications — did any such thing. While the most popular fake stories were shared at least as widely as the most popular true articles, that is partly because the fakes were unique while each true article had dozens of imitators or parallels.

A study conducted by economists Hunt Allcott and Matthew Gentzkow found that fake news simply wasn’t as widely shared, seen or remembered as many people think. Close as the 2016 election was, it is unlikely that these stories swung it.

That is the second reason to steer clear of the fake news phrase: in its original form it is aggravating and, occasionally, has constituted incitement to serious violence. But despite a certain degree of moral panic, fake news itself does not pose an existential threat either to democracy or the free press.

What does pose such a threat is a draconian response from governments. Is that likely? The fact-checking organisation FullFact has described the response of some governments, internet and media companies as “frightening over-reactions” — although it adds that the UK government has so far avoided rushed or illiberal measures.

It is all too easy to turn legitimate concerns about false information into a situation where the government decides what can be said and who can say it. We need to be careful that the cure is not worse than the disease — a third reason to avoid panicking about fake news.

The fourth reason is that Mr Trump, with his twisted genius for turning a complex issue into a political cudgel, has deployed the term to demonise regular journalists. Given the number of journalists murdered around the world, including in the US, one might hope for some restraint from the president, but in vain.

Other politicians have also embraced the phrase, including UK Prime Minister Theresa May and Labour party leader Jeremy Corbyn. I worry about a world in which many people believe lies, but I worry far more about one in which many people instinctively refuse to believe the truth.

Here is the final reason to calm down about fake news: it feeds into the tempting but smug assumption that the world is full of idiots. People are sometimes taken in by lies, and some spectacular falsehoods have gained more traction on social media than one might hope.

But if we persuade ourselves that Mr Trump was elected by people who wanted to be on the same side as the Pope, we’re not giving voters enough credit. It is true that most people are disengaged from serious news, and vote with their guts rather than their heads, or being guided by friends rather than a close reading of policy analysis. That does not make them fools.

There is much to concern me in the current political information environment. I worry (partly selfishly) that it is harder than ever to sustain a business that provides serious journalism. I worry that politicians around the world are doing their best to politicise what should be apolitical, to smear independent analysis and demean expertise.

I worry that there is far too little transparency over political advertising in the digital age: we don’t know who is paying for what message to be shown to whom.

The free press — and healthy democratic discourse — faces some existential problems. Fake news ain’t one.

 

Written for and first published in the Financial Times on 4 January 2019.

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Undercover Economist

Cash-rich, time-poor: Why the wealthy are always in a hurry

Will making more money save you time? Or will it make you feel more rushed than ever? I’ve been pondering this question because a friend challenged me to figure out whether income poverty and time poverty go hand in hand.

There are cash-poor, time-poor people, who juggle multiple shifts with childcare and spend precious hours on long commutes. There are cash-poor, time-rich people — pensioners or job seekers wondering how to fill the day. But, on average, are richer people more or less busy than those with less money?

On one point, the evidence is clear: whether or not people on high incomes are busy, they think they are. In a forthcoming book, Spending Time (UK) (US), economist Daniel Hamermesh looks at “time stress”, which is measured not by looking at a time-use diary but instead by surveying people to ask if they often feel “rushed” or “pressed for time”.

New parents, especially new mothers, are more likely to complain of time-stress. So are people who work longer hours — no surprise there. But what about income? Prof Hamermesh finds that “people who were always or often stressed had the highest earnings . . . earnings were lowest among the never-stressed”. Money goes hand-in-hand with the sense that there aren’t enough hours in the day.

This isn’t just for the obvious reason that high-income people spend more time doing paid work, although on average they do. (They also sleep less and watch less television.) Of people who work the same hours, having a higher income per hour is correlated with feeling pushed for time. Even people who don’t do any paid work at all feel more rushed if they have more money.

On the face of it, this makes little sense: surely, for any given workload, money is a timesaver rather than a time-sink? Logically, yes. Psychologically, no. It seems that people with more money find more things to do with their time, and so feel more time pressure.

For example, someone with money to spare may book nights at the theatre, reserve tables at fancy restaurants and sign up for bespoke courses. With less cash, cheaper options such as watching TV or reading a book seem more practical. A time-use diary would record all of these activities as “leisure”, but curling up at home with a book is not only cheaper than going to the theatre, but induces less of a sense of time stress.

I’m not saying we should shed a tear for the millionaire who feels she doesn’t have enough hours in the day to spend all her money. But perhaps we shouldn’t be surprised that such feelings are common among richer people.

Another perspective comes from comparing education levels to how people spend their time across a week, as the economists Orazio Attanasio, Erik Hurst and Luigi Pistaferri have done.

People with more education — say, more than 12 years — tend to be richer. But do they also tend to be busier? It seems so. We have US surveys from around 1985 and 2005, and they show that less-educated people have more leisure time than those who are highly educated. (They also had more leisure time in 2005 than in the 1980s.) In contrast, the more highly educated group — who already had less free time in the 1980s — have been getting busier since.

There’s a gender dimension here too. Both in the 1980s and the 2000s, the people with the least leisure time were highly educated women, while those with most time to kill were less-educated men.

The gap between these two groups has widened. While less-educated men have gained 2.5 hours of leisure time a week (to a total of 39 hours), the more-educated women have lost two hours a week (bringing them down to a total of 30 hours). Women also feel more time-stressed than men, even after adjusting for other factors.

All these averages, of course, conceal a great deal of variation. The extra 2.5 hours of leisure a week that less-educated men have gained sound rather pleasant. But behind that average is a growing minority with 60, 80 or 100 hours a week of “leisure time” — better described as unemployment. Although research suggests that some young men seem not to mind unemployment, given that computer games are now so awesome, most people hate it.

So while there are many struggling people who are holding down several different gigs, juggling childcare and burning time on long commutes, overall the evidence shows that the rich are time-poor and the poor are time-rich.

Is this any compensation for the other inequities of life? Probably not — although it depends how much you enjoy your leisure and whether you enjoy your job. Recent studies of people doing gig work or shift-work on irregular hours find that a lot of them love the flexibility but many others hate the uncertainty or want more work.

Research on happiness shows that people — on average — tend to prefer leisure to work. On the other hand, it also shows that being unemployed is utterly miserable. Prof Hamermesh writes, “I would be very happy to wager that most people would choose to feel time-poor rather than income-poor.” It’s hard to disagree.

 

Written for and first published in the Financial Times on 30 Nov 2018.

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Undercover Economist

Technology can be the friend of creativity

By the time you read this, I shall be sitting in a cinema watching a screening of The Box of Delights (US), nearly three hours of vintage television that captivated me as a boy when broadcast on the BBC in the six weeks running up to Christmas 1984. I’ll be charmed by Patrick Troughton, terrified by Robert Stephens, and mildly amused by the special effects, which were record-breakingly lavish at the time but look amateurish now.

Christmas isn’t Christmas without The Box of Delights. Still, the cinema visit is an indulgence, because a presumably illicit copy of the series has been on YouTube for three years. And there lies an interesting question: what has digitisation done to the richness of our popular culture, from TV and film to music and books?

The obvious response is that digitisation is ruining everything: a children’s series that was once the most expensive ever made by the BBC has been pirated. Why would the BBC — or anyone — invest in the next masterpiece if it will inevitably be ripped off?

This problem is starkest for the music industry, since pirated music is not only free but convenient. For the US music industry, annual retail revenues for physical products have fallen in real terms by more than 90 per cent, from about $20bn in the late 1990s to less than $1.5bn last year. Revenue from downloads and particularly streaming has been growing strongly, but the total takings are less than half what they once were.

Such a collapse in revenues does not seem to be a recipe for a creative flowering. The same threat of piracy — or simply competition from videos of cats riding on Roombas — hangs over film, TV and books. (It also hangs over journalism, but that is a topic for another day.)

On the other hand, digitisation makes it easy to find obscure works. The Box of Delights was merely a memory for many years; finding a copy on VHS video would have been its own epic quest. Now I can watch it on a whim, without leaving my desk.

In the early years of ecommerce, economists Erik Brynjolfsson, Yu Hu and Michael Smith estimated that the availability of obscure book titles alone through websites had increased consumer welfare in the US by about $1bn in the year 2000 — a modest $3 per person, but not nothing. That figure may be much more today.

There is a balance here to be struck, and it is one familiar from debates about copyright. Copyright creates an artificial monopoly, rewarding creators to encourage them to create more. The same artificial monopoly raises prices to consumers and restricts remixes, adaptations and derivative work that is valuable in its own right. Copyright can harm the spread of creative ideas by being too weak, or too strong.

At least copyright rules can be optimised in principle — even if they are in practice much longer than is required.

Technology cannot be so easily tamed by a stroke of the legislator’s pen. So what has new technology done to creative work? Has it been gutted by piracy, or is it flourishing thanks to ever-cheaper means of producing and distributing new ideas?

Joel Waldfogel, an economist and author of a new book, Digital Renaissance (UK) (US), has been trying to figure out the answer to that question. On the question of quantity, there is no doubt: we now have access to vastly more creative works. As well as all the amusing Roomba videos, there is a huge international output, from “Gangnam Style” to the Korean historical dramas that my daughter enjoys so much. Obscure music and out-of-print books can be obtained in digital form within seconds, and YouTube allows me to bore my children with old comedy clips any time I choose.

Isn’t this just strip-mining old assets? No. New releases abound. In the US, 3,000 new movies were released in 2010, up from 500 in 1990. New song publication increased sevenfold between 1988 and 2007, despite plunging revenues. Four hundred thousand books were published in 2012, up from 85,000 in 2008. Much of this new stuff is dreadful, but that doesn’t much matter, since nobody has to watch, hear or read it. What matters is not the average quality, but the quality of the best stuff.

This is hard to assess, but Prof Waldfogel looks at indicators such as reviews — both of professional critics and on online databases — for measures of quality. Among the dross there is an increasing number of both highly rated TV shows and highly rated movies.

Music, too, is doing just fine. Synthesising the ratings of critics suggests that the late 1960s and early 1970s were the golden age for music; any other conclusion would have been a shock. But while more recent music is less highly rated, there is little sign that it is inferior to the highly profitable albums of the 1990s.

This shouldn’t be entirely surprising. Most ideas used to be shut down at an early stage; now many see the light of day. As the late novelist William Goldman reminded us, “nobody knows anything”, so it is no surprise that among these new releases, the occasional gem sparkles. The internet, like the box of delights itself, is full of wonders.

 

 
Written for and first published in the Financial Times on 7 December 2018.

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Undercover Economist

Stop sniping at central banks and set clear targets

What is the most important job in the world? President? Teacher? Parent? I suggest a post that would not feature on most people’s lists: central banker.

James Carville, who advised US president Bill Clinton, once quipped that he wanted to be reincarnated as the bond market, able to intimidate anybody. But as Ben Bernanke, Mervyn King and more recently Mario Draghi (crisis-era central bank heads in the US, UK and EU respectively) demonstrated, even the bond markets must bow to the desires of a central banker with trillions to spend.

Thank goodness for such financial superpowers. These central bankers have a strong claim to having prevented a rerun of the Great Depression. But the crisis is over, Mr Draghi is the last of that cohort still standing. Now in the final year of his term as European Central Bank president, he announced this week that eurozone quantitative easing would end this month.

So can central bankers now step out of the spotlight and toast their own intelligence, decisiveness and humility with a decent claret? It seems not. Politicians are spoiling for a fight.

President Donald Trump recently accused the US Federal Reserve of having “gone crazy” (the alleged sign of insanity: nudging interest rates up during a boom). Turkey’s Recep Tayyip Erdogan has been leaning on his central bank. And when the Reserve Bank of India’s governor abruptly resigned this week after weeks of political pressure, nobody was buying his claim that it is “for personal reasons”.

In the UK, Mark Carney, the governor of the Bank of England, has drawn fire both from prime minister Theresa May and Brexiter Jacob Rees-Mogg. Central bankers claim to be uninterested in politics, but politics is interested in them.

To understand how we got here, it is worth remembering why the idea of independent central banking, fashionable in the 1920s, became the received wisdom again in the 1990s.

The aim was simple: credibility. Politicians are always tempted to lower interest rates to keep the economy hot, unemployment low and voters happy. This might achieve short-term benefits but it undermines an economy’s health and stokes inflation. Even a principled politician’s promises to curb inflation would not be believed; bond markets would demand an inflation premium, unions big pay rises.

A flint-hearted technocrat can at times deliver better results for everyone. In the early 1980s, Fed chair Paul Volcker demonstrated the basic idea that inflation could be crushed by a sufficiently badass central banker. New Zealand formalised the arrangement a few years later by giving the Reserve Bank of New Zealand an explicit inflation target, regardless of consequences.

That target was hit. “Inflation will be defeated” seems to be partly a self-fulfilling belief, so credibility is a strong argument for central bank independence.

Yet central bankers have experienced some serious mission creep over the past decade. Paul Tucker, a former deputy BoE governor and author of Unelected Power (UK) (US), notes that we have handed ever more power to them. There were reasons for this. Central banks operate through the banking system and have the ability to create new money without limit. Instead of watching the crisis of 2008 from the sidelines, they rolled up their sleeves and got involved in almost every part of the bond and loan markets. Yet these efforts — from buying up debt to regulating mortgage availability — created winners and losers. That is the natural domain of politics.

And so we have three options. The status quo is to leave powerful unelected officials free to act with wide discretion, while serving as a scapegoat for politicians who have nothing else to offer. That will not do.

Or we could double down on autonomy. The central banks got plenty right during the crisis and, given the sorry state of politics at the moment, technocracy has a certain appeal. If the UK appointed Mr Carney supreme dictator for life and bought him a nice dress uniform, he surely couldn’t do a worse job of running the country than the elected politicians currently attempting to interpret the “will of the people”.

But the long-run health of our democracies demands that our politicians start taking responsibility again. The Brexit referendum demonstrated that it is unwise to turn over direct policymaking power to us voters; we lack the time, expertise and interest. Yet it is undemocratic to place the levers of power two or three steps away from the people.

There is no easy or complete solution, but Mr Tucker is right to demand a return to clear mandates for independent agencies, set and monitored by elected politicians. That is partly to keep the technocrats in check, but also to force politicians to step up.

If we see clearly that responsibility lies with elected officials, then we may start to value expertise for the sake of expertise again. We are only likely to trust technocrats to deal with the technical details if we see that politicians are dealing with the politics. We cannot allow unelected people unlimited discretion. But just as importantly, we cannot tolerate our politicians acting like children and hoping that the grown-ups will tidy up the mess.

Written for and first published in the Financial Times on 14 Dec 2018.

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Why good forecasters become better people

So, what’s going to happen next, eh? Hard to say: the future has a lotta ins, a lotta outs, a lotta what-have-yous.

Perhaps I should be more willing to make bold forecasts. I see my peers forecasting all kinds of things with a confidence that only seems to add to their credibility. Bad forecasts are usually forgotten and you can milk a spectacular success for years.

Yet forecasts are the junk food of political and economic analysis: tasty to consume but neither satisfying nor healthy in the long run. So why should they be any more wholesome to produce?

The answer, it seems, is that those who habitually make forecasts may turn into better people. That is the conclusion suggested by a research paper from three psychologists, Barbara Mellers, Philip Tetlock and Hal Arkes.

Prof Tetlock won attention for his 2005 book Expert Political Judgment (UK) (US), which used the simple method of asking a few hundred experts to make specific, time-limited forecasts such as “Will Italy’s government debt/GDP ratio be between 70 and 90 per cent in December 1998?” or “Will Saddam Hussein be the president of Iraq on Dec 31 2002?”

It is only a modest oversimplification to summarise Prof Tetlock’s results using the late William Goldman’s aphorism: nobody knows anything.

Yet Profs Mellers, Tetlock and Don Moore then ran a larger forecasting tournament and discovered that a small number of people seem to be able to forecast better than the rest of us. These so-called superforecasters are not necessarily subject-matter experts, but they tend to be proactively open-minded, always looking for contrary evidence or opinions.

There are certain mental virtues, then, that make people better forecasters. The new research turns the question around: might trying to become a better forecaster strengthen such mental virtues? In particular, might it make us less polarised in our political views?

Of course there is nothing particularly virtuous about many of the forecasts we make, which are often pure bluff, attention-seeking or cheerleading. “We are going to make America so great again” (Donald Trump, February 2016); “There will be no downside to Brexit, only a considerable upside” ( David Davis, October 2016); “If this exit poll is right . . . I will publicly eat my hat” (Paddy Ashdown, May 2015). These may all be statements about the future, but it seems reasonable to say that they were never really intended as forecasts.

A forecasting tournament, on the other hand, rewards a good-faith effort at getting the answer right. A serious forecaster will soon be confronted by the gaps in his or her knowledge. In 2002, psychologists Leonid Rozenblit and Frank Keil coined the phrase “the illusion of explanatory depth”. If you ask people to explain how a flush lavatory actually works (or a helicopter, or a sewing machine) they will quickly find it is hard to explain beyond hand-waving. Most parents discover this when faced by questions from curious children.

Yet subsequent work has shown that asking people to explain how the US Affordable Care Act or the European Single Market work prompts some humility and, with it, political moderation. It seems plausible that thoughtful forecasting has a similar effect.

Good forecasters are obliged to consider different scenarios. Few prospects in a forecasting tournament are certainties. A forecaster may believe that parliament is likely to reject the deal the UK has negotiated with the EU, but he or she must seriously evaluate the alternative. Under which circumstances might parliament accept the deal instead? Again, pondering alternative scenarios and viewpoints has been shown to reduce our natural overconfidence.

My own experience with scenario planning — a very different type of futurology than a forecasting tournament — suggests another benefit of exploring the future. If the issue at hand is contentious, it can feel safer and less confrontational to talk about future possibilities than to argue about the present.

It may not be so surprising, then, that Profs Mellers, Tetlock and Arkes found that forecasting reduces political polarisation. They recruited people to participate in a multi-month forecasting tournament, then randomly assigned some to the tournament and some to a non-forecasting control group. (A sample question: “Will President Trump announce that the US will pull out of the Trans-Pacific Partnership during the first 100 days of his administration?”)

At the end of the experiment, the forecasters had moderated their views on a variety of policy domains. They also tempered their inclination to presume the opposite side was packed with extremists. Forecasting, it seems, is an antidote to political tribalism.

Of course, centrism is not always a virtue and, if forecasting tournaments are a cure for tribalism, then they are a course of treatment that lasts months. Yet the research is a reminder that not all forecasters are blowhards and bluffers.

Thinking seriously about the future requires keeping an open mind, understanding what you don’t know, and seeing things as others see them. If the end result is a good forecast, perhaps we should see that as the icing on the cake.

 

Written for and first published in the Financial Times on 23 Nov 2018.

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The economist’s guide to the perfect Christmas

It was snowing even in London this week. Surely now it’s time to get serious about Christmas — and who better to give the perfect yuletide advice than an economist? (I also plan to include the best ideas from psychology, and call them “behavioural economics”; this is a proven formula.)

Economists are much needed at this time of year since Christmas is, more than anything, a consumerist blowout. It has been for well over a century. Joel Waldfogel, economist and author of Scroogenomics (UK) (US), comments that “just as every generation imagines that it invented sex, every generation imagines that it invented the vulgar commercialisation of Christmas”. Prof Waldfogel has tracked the size of the spending boom in the US in December, compared with November and January. It has been sizeable at least since the 1930s and probably much longer than that. If anything, Christmas stands out less in the spending data than it did three generations ago.

As an economist, I have nothing against this rampant consumerism — but I do wonder whether there is a way to enjoy a better Christmas.

Here is my three-point plan.

Step one: beware the efficient presents hypothesis. This is a variant on the efficient markets hypothesis, which says (roughly) that there are no bargains to be had on the stock market because they’ve already been noticed and snapped up. Similarly, the efficient presents hypothesis says that all the most suitable gifts have already been purchased — typically by recipients who have decided to treat themselves.

I have already fallen foul of the efficient presents hypothesis this year; carefully selecting a pair of extra-warm socks in precisely the style and size my wife prefers, I was dismayed when a parcel containing a duplicate pair arrived at our house a few days later. She was one step ahead of me in picking her own presents. The efficient presents hypothesis is not always true, any more than the regular efficient markets hypothesis. It is nevertheless true often enough to take seriously.

Step two: adopt a passive gift-buyer strategy. Again, the parallel with investment should be clear. You can achieve excellent investment results simply by making regular payments into passive index tracker funds. This strategy is dull and unimaginative, leaving no room for flair or good judgment. Nevertheless it works — partly because good judgment is scarce and flair often counterproductive. Active managers are often unable to outperform the stock market by enough to justify their fees. Individual investors tend to trade too often, buy high and sell low. Regular passive investment may be boring but it avoids these traps.

The ultimate passive gift is cash. Just like tracker funds it is utterly unimaginative yet a surprisingly difficult benchmark to beat. Many active gift-buyers swear they can get more than £50-worth of joy out of a £50 present, but Prof Waldfogel has good evidence that most of them fall well short. Gift-givers, like stock pickers, tend to overrate their abilities. (At least gift-givers have an excuse: they receive no feedback. Nobody is going to tell you that they hate the present you bought for them, but if your stock portfolio crashes it is hard not to notice.)

Since giving cash is often socially unacceptable, there is another passive approach that works well: find a wishlist, or just ask the recipient what they would like. Just as passive investment in index funds robs the stockpicking game of its daring and mystique, simply consulting a list seems robotic and joyless. But — as Francis Flynn of Stanford and Francesca Gino of Harvard have found — it is rarely perceived that way by recipients. While gift-givers hesitate to fall back on a wish list, recipients prefer items they have indicated that they actually want. They still think of the present purchaser as perfectly thoughtful: after all, someone took the trouble to find out what you wanted.

Step three: give the gift of time and attention. With all the effort you’ve saved ordering gifts from wish lists or simply writing cheques, see friends and enjoy the rituals of Christmas. Fresh from her wishlist research, Prof Gino has been part of a team studying the way family rituals influence our experience of seasonal festivities. Whether the rituals are secular or sacred, they are correlated with liking your family, feeling more satisfied with life and paying closer attention to your experiences. Exactly what causes what is not clear, but the idea that a good Christmas tradition brings people together is a sensible one. Too often, we lack the time because we are spending countless hours running around shops buying things that nobody will ever tell you they hated, already owned or both.

One could do worse than the reformed Ebenezer Scrooge, who, Dickens tells us, “knew how to keep Christmas well, if any man alive possessed the knowledge”. On Christmas morning the only physical gift he gives is a prize turkey, having been assured on good ghostly authority that it is much needed. Other than that, he gives time and money, notably a pay rise for Bob Cratchit.

Money! That’s the Christmas spirit. God bless us, every one!

Written for and first published in the Financial Times on 15 December 2017.

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