Leaders do not need to milk price of pint
A few years ago, José Zapatero, then prime minister of Spain, was asked the price of a cup of coffee in a television interview. His answer, a woeful underestimate, became a minor embarrassment. I know all this because shortly afterwards, he appeared at a session of Congress with my book El Economista Camuflado [The Undercover Economist] under his arm – a book that discusses extensively (some say ad nauseam) the price of a cup of coffee. I was suddenly a prop in a surreal political debate.
Thanks to Nadine Dorries the same argument has popped up closer to home: George Osborne and David Cameron are posh boys, she says, who do not know the price of a pint of milk. To accuse them of knowing nothing of lacto-economics seems odd to me. I do not know whether Mr Cameron knows the price of a pint of milk. I do know that he is posh.
I am doubtful about the idea that there is, somewhere, the Platonic ideal of a pint of milk, whose just price is known by all virtuous people but an eternal mystery to the out-of-touch. The reality, of course, is that a pint of organic Jersey milk from a Hampstead deli is likely to cost more than a quarter of a two-quart bottle from Aldi. You will pay more for a pint delivered to your doorstep than if you take the trouble to drive to the supermarket.
Beyond that, you do not need to be a Tory millionaire not to care about the price of milk. I conducted a little survey. Steering clear of soya, rice and goat’s milk, I checked the price of a single pint of ordinary semi-skimmed. It’s 49p a pint in the Marks and Spencer at the local railway station. It is also 49p a pint at the downtown Sainsbury’s. It is 49p a pint in the Tesco next door.
The financial returns to learning about milk prices seem to be limited. There are people who are so strapped for cash – or perhaps, simply curious – that they will keep track. Many others will not, but that should not disqualify them for high office.
The converse also fails to hold: knowing the price of a pint of milk is no mark of a great leader. Before carrying out my survey, I guessed that the price of a pint of milk was 50p. Perhaps Nadine Dorries thinks that I would make a cracking prime minister. I can assure her I would be a profound disappointment.
Also published at ft.com.
8 Comments
Eddie says:
Does anyone need to know the price of a pint of milk? Milk is a pretty essential item in your shopping basket, so even a cash strapped shopper is probably not going to change their buying decision based on the price of a pint. You need to know the price of a basket of essentials, and you need to know the price of the optional extras so that you can decide whether or not to buy them, but the milk will be in the basket regardless of the price (within reason).
12th of May, 2012Ken Taylor says:
It’s very important to us all that a reasonable number of people know the price and don’t buy it when it’s too high. Otherwise the milk seller will increase it willy nilly. Those of us, including me, that don’t know the price rely on the efforts of the conscientious to keep the price low.
Supermarkets in my neck of the woods are introducing differential pricing. Many customers carry a loyalty card and get a substantial discount from the advertised price depending on various factors which seem too complicated to me to even try and understand. Once everyone pays a different price lazy people can’t free ride on the efforts of the astute.
Loyalty cards are a disaster for customers yet many love them. Why is that?
13th of May, 2012JHughes says:
Hmm, yes. I read the phrase ‘[they] don’t know the price of milk’ as metaphorical: it doesn’t mean what it says, but something like ‘they aren’t in touch with the normal (domestic) budgetary concerns of everyday folk, and so we can’t trust their instincts, and therefore their political judgement’. Or something.
I suppose its rhetorical strength depends a bit on it not being easily defined, so DC and GO find it difficult to defend against it.
14th of May, 2012David Waddell says:
@Ken Taylor: Yes indeed, loyalty cards are not good for the customer class as a whole, but they benefit each customer who uses them against those who do not. Arguably they enable those customers who use them to attain a better price than if there was no loyalty card scheme at all, due to the higher differential price paid by those without loyalty cards.
17th of May, 2012David Waddell says:
Good point Tim. But the reason the price of milk is important is because of the trap set by Nadine Dorries. If I remember rightly though, when the question was put to DC, he knew the price and even threw in the fact he often did the weekly shop, for good measure.
17th of May, 2012The price of milk has because one of the ‘need to know’ facts of politics. We should be suspicious of any politician who has not taken the trouble to know the answer.
Natalie says:
Does anyone know the price of a pint of milk? When I worked, milk went in my trolley without any thought. Now as a PhD student, it’s price has become something I take a lot more interest in, as in can I afford one pint or two? It’s easy for any of us to “get out of touch”.
17th of May, 2012Ken Taylor says:
Yes David and Natalie. Everyone pays a different price for airlines and hotels making price comparison a chore. How horrible for the same thing to happen come to milk. I don’t want to have to research the best price for a pint of milk. I want to grab it off the shelf without a thought.
22nd of May, 2012tim says:
What’s not to like with differential pricing? If we all pay the same price, those of us who are better off profit at the expense of the poor. That can be serious (for example, if the goods are essential drugs). The poorest should pay only the marginal cost of production – others can contribute to overheads and profits. The idea of a ‘just price’, where the price of everything is fixed according to what is fair (to whom?) needs to be turned on its head. The ‘just price’ is where everyone pays for goods exactly what they are worth to them (Ramsey pricing). This would maximise marginal utility (maybe? – or maybe I’m demonstrating that I haven’t the faintest idea what I’m talking about). It’s totally impractical in most cases, but attempts to do it (off-peak fares, loyalty cards, discounts for pensioners, etc) shouldn’t be discouraged.
22nd of May, 2012