Tim Harford The Undercover Economist

Articles published in January, 2018

The world in 2118 – my forecasts for the century ahead

It is the season for journalists to make their predictions for the year ahead. These forecasts are the mince pies of the intellectual world: tempting, enjoyable, but manifestly unhealthy. So let me attempt a loftier task — and one that is consequence free. I’d like to describe the economy not in the year 2018, but in the year 2118.

I’m not the first to attempt a hundred-year forecast. John Maynard Keynes did so in his 1930 essay, “Economic Possibilities for Our Grandchildren”, noting that on average we might expect to be eight times richer in 2030 than a century earlier. We will fall somewhat short of that, but not by much.

I’ll make a more conservative forecast: that we’ll be five times richer in 2118 than we are today. That would put global income at around $80,000 per person — roughly twice the current average salary in the UK today — and income in the leading economies will be more than $250,000 per person per year in today’s money.

This forecast omits and probably understates how much fun one might have with $250,000 in a century’s time. The economist Timothy Taylor sometimes asks his students to reflect on whether they would rather have a comfortable $70,000 today or a stupendous $70,000 in 1900. On paper this is a no-brainer: $70,000 in 1900 was a much larger sum. Yet the question boils down to whether one would rather have servants, status and a mansion — or smartphones, computer games, air conditioning, penicillin, air travel and takeaway pizza. On balance most students decide they’d rather have modern technology than obsolescent opulence.

Similarly, $250,000 a year in 2118 should buy wonders that could not be had today for any money. A new book, Soonish (UK) (US), by Kelly and Zach Weinersmith, is a mischievous guide to the possibilities: ultra-cheap construction, courtesy of smart materials and swarms of robots; and ultra-cheap fuel and bulk chemicals, produced by genetically engineered micro-organisms. We’ll be able to print replacement organs, swallow pills that correct genetic typos and fix cancers with ease.

Is this prediction Panglossian? Perhaps, but it does not presume a century of peace and harmony. It is more cautious than Keynes’s forecast, since which the world has witnessed appalling losses of human life in the Holocaust, Mao’s Great Leap Forward, the second world war and other disasters. We should fervently hope that the atrocities of the 20th century are never repeated, but the forecast merely assumes instead that future enormities do not threaten the human race as a whole. Any nuclear or biological war would have to be a local affair.

The other big question mark over this forecast is whether the planet itself can sustain continued economic growth. Much depends on what this growth looks like. If it means burning more fossil fuels, consuming ever greater raw materials and intensively cultivating more land, we are in trouble. Thankfully, economic growth is decoupling from resource use — not everywhere and not in every respect, but broadly enough to give reason for hope. In the UK, for example, energy consumption per person peaked in 1973.

We need smarter environmental regulations, but even without them, pure profit-seeking pushes producers to achieve more by using less. This is highlighted in Jesse Ausubel’s 2015 report, “Nature Rebounds”, which documents the increasing efficiency with which the US uses farmland, water and energy. In some cases — not all — the efficiency gains are so great that absolute use of these resources is in decline even while economic growth continues.

None of this would be enough if the world’s population was still booming at the rates that caused alarm in the 1960s. But it is not; population growth has been in steady decline for half a century. If the number of people on the planet stabilises, and the efficiency with which we use resources increases, there is nothing implausible about a continued rise in the standard of living.

A final big question is how this bounty will be distributed. In an insightful essay from 1996, Paul Krugman predicted that there would be “no robot plumbers” in 2096. I agreed with him then. I am no longer so confident. It seems quite plausible that in 100 years’ time — and perhaps much sooner — plumbers, taxi drivers and many journalists, too, will simply have nothing serious to contribute to the labour market. If so, we’ll have to abandon the current model of the welfare state in favour of one where unemployment is neither stigmatised nor penurious, but a perfectly respectable lifestyle choice. That will require some kind of universal income for all.

No doubt my forecast will be wrong, although I hope it will take a few decades before its foolishness becomes undeniable. Perhaps by 2118, humanity will have been superseded by hyper-intelligent software. Perhaps cockroaches or smallpox will have taken centre stage. But it seems to me that if we can keep the show on the road, our great grandchildren might have reason to thank us.

 
Written for and first published in the Financial Times on 29 December 2017.

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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Busy, Rest, Confessions… what I’ve been reading

Two interesting books about our overly-busy lifestyles: Busy (UK) (US) by Tony Crabbe and Rest (UK) (US) by Alex Soojung-Kim Pang. Crabbe’s book is pushy, airport business-booky, by no means a masterpiece of writing. But it did make me stop and think about overloading myself with nonsense – and to question bad habits such as boasting about how busy I am. I found it a very useful book to read. Rest is a better structured read, setting out the science about why we need to take more breaks, have more sleep, take longer holidays, etc. etc. – well-argued, although I think Crabbe’s bullet points made more of an impact on me.

I also re-read Scott Berkun’s Confessions of a Public Speaker (UK) (US), which is flawed but will be very useful to some. Berkun is a witty, energetic writer and the book jumps from a description of life as a professional motivational speaker to the lessons he learned from taking part in a TV series, to a set of tips on how to be a better public speaker. The confessions will interest some – not me – but the tips are good and the book is lots of fun to read. (I have a list of books that I recommend about giving a great speech.)

And I’m now 100 pages into Walter Isaacson’s Da Vinci biography (UK) (US). Long and careful, but well-written and full of interesting ideas – and gorgeous reproductions of his art.

 

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22nd of January, 2018MarginaliaComments off

Why you should check email less often, and how to do it

More than a decade ago, Dan Russell, a researcher at IBM, won fleeting attention for his email signature: “Join the slow email movement! Read your mail just twice each day. Recapture your life’s time and relearn to dream.” That was quixotic even then. While some people are slow to respond to email, most of us are quick to check it.

A 2003 study found that the typical email is attended to in some manner within six seconds of arrival. Another study, from 2006, by computer scientist Karen Renaud and colleagues, found that people at their desktop computers would check their email 18 times an hour.

When I think about my own behaviour, 18 times an hour sounds about right. It’s like a nervous twitch, with the bonus that I can tell myself and others that I’m the consummate professional. It is also insane: for all the talk of email overload, most of us do not actually receive 18 emails an hour. I don’t — not after filtering unsolicited press releases into spam. One estimate of the typical load is 80-90 emails a day, which suggests that half the time Professor Renaud’s subjects checked email, they would have found nothing there.

The ubiquity of smartphones, packed with an arsenal of e-messaging alternatives, can only have worsened the compulsion to check for new messages. Mr Russell’s plea now seems as counter-cultural as urging people to post sonnets on Tinder. Nevertheless, he was on to something. There are ways in which email might be a lot more useful if we slowed it down.

One reason is that email would probably be less habit-forming when taken in bigger, rarer doses. The psychologist BF Skinner once found himself running out of food pellets for one of his projects, which like many of his experiments involved rats pushing levers to receive rewards. To eke out his supply of pellets, Skinner restricted their release: rats would get no more than one pellet a minute, no matter how often they tapped the lever. Rather than discouraging the rats, this intermittent reinforcement soon had them hooked. These days, we’re the rats, the computer is our Skinner Box, and email is our intermittently released food pellet.

Mr Russell’s call to inaction breaks the cycle of intermittent reinforcement. If you check email no more than twice a day, your unconscious is not wondering whether you’ve got mail or not. Inevitably, you have, and your dopamine system can stop quivering in nervous anticipation.

Slow email also allows problems to solve themselves in your absence. When a colleague emails the entire company asking whether anyone has seen his sentimentally valuable coffee mug, the treasure will be found before anything hits your inbox. Meetings will be announced, withdrawn because of a typo in the date, then re-announced. It’s so much easier to wait.

And slow email should mean more time concentrating on a single task at a time. Gone is the spin-cycle in which we set aside important work to flip open the email browser tab, and then on to Facebook, or Twitter, or Wikipedia or wherever. It takes time to reorient ourselves after these self-interruptions; estimates vary from a few seconds to almost half an hour.

Bearing all this in mind, one might ask what happens when our email is turned off? Researchers Gloria Mark and Stephen Voida conducted just this experiment, observing what happened to 13 workplace guinea pigs when the researchers disconnected their email. The subjects were being watched, electronically tracked and even wearing heart monitors. They became less stressed, stayed on task for longer and spoke to their colleagues more. They sometimes felt a little out of the loop, but they survived the experience.

Unplugging for a full working week might be too much for most of us. It’s certainly too much for me. So twice a day it shall be, just like Victorian letter writers. Or nearly so: in fact late 19th-century London enjoyed hourly deliveries, and a correspondence could bounce back and forth within a day. Letter-writers would often request a reply “By Return Of Post”, exhibiting the same nervous urgency as some of my email correspondents today. Still, there is a qualitative difference between mail once an hour, and mail whenever you happen to press the level for another pellet. We might all benefit by slowing the pace.

But how to do it? One possibility is sheer willpower. Good luck with that. Or you can use some electronic help. For 2018, my resolution is to use Inbox When Ready, a free plug-in for people who access Gmail through Google’s Chrome browser. It blocks excessive access to the inbox, and works alarmingly well at dissuading me from checking my email. I cannot say it has helped with my stress levels just yet. Perhaps I need to give it time.

I wondered what Dan Russell might make of this, so I tracked down what I thought was his current email address and, apologetically, emailed with a couple of questions.

Back came the response: “The email account that you tried to reach is disabled.” Perfect.

 

Written for and first published in the Financial Times on 22 December 2017.

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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How To Think, in eight easy steps

I enjoyed reading Alan Jacobs’s How To Think (US) (UK). Jacobs could have worked through a list of logical fallacies, or even of cognitive biases (well-covered in David McRaney’s engaging You Are Not So Smart (US) (UK)). Instead, he’s particularly concerned with civility, open-mindedness, and the ability to let oneself be persuaded by others. The weakness of this approach is that Jacobs is rather thin on some important topics such as evaluating evidence or spotting statistical bullshit. (On this topic Bad Science (US) (UK), by Ben Goldacre MBE, cannot be bettered.)

Still, we could all use some nudges to be civil and open minded. Jacobs offers a checklist of 12 items at the end and I summarise a few here:

  1. Take five minutes before responding. Walk around the block.
  2. Don’t argue to win, argue to learn.
  3. Avoid people who fan flames.
  4. Don’t feel you have to weigh in on every topic.
  5. If your peers demand you weigh in, ponder your choice of peers.
  6. Seek out thoughtful people who disagree with you. Listen.
  7. Examine your own emotional responses.
  8. Summarise your opponents’ arguments fairly and thoughtfully.

Good advice; I hope Jacobs would feel my summary of his checklist was fair.

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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8th of January, 2018MarginaliaComments off

William Golding explains Brexit

For educational reading, the British political establishment might pick up something by William Golding, winner of the Nobel Prize for literature in 1983. Lord of the Flies (UK) (US) is his most famous work, with its grim suggestion that the line between innocent children and murderers is thin. For an insight into Brexit Britain’s current predicament after a week of chaos, however, I recommend The Spire (UK) (US).

The book is a study of monomania. Dean Jocelin has visions of adding to his cathedral a 400-foot steeple, an expression of human prayers reaching into the heavens. But the intensity of his ambition blinds him to his other duties and threatens both the cathedral and the community around it. As Jocelin himself admits, “at the moment of vision, the eyes see nothing”.

It is impossible to miss the analogy. The UK is being driven by visionary enthusiasts for Brexit just as surely as Jocelin’s attendants had to bend to his will. Whether their visions are realistic is quite another question. In the summer of 2016 David Davis, the man charged with delivering Brexit, predicted that the UK would be able to negotiate a free trade area “massively larger than the EU” within two years. That was 17 months ago. Whatever Mr Davis was gazing at back then, it wasn’t reality.

Then there are those wretched experts, who tell Jocelin that his spire is impossible. The master builder, Roger Mason, confronts him with an inescapable dilemma: if the spire’s structure is too lightweight, the next storm will blow it down; a sturdier structure will warp the cathedral beneath it, or sink into the swamp. Jocelin berates him for lack of faith; the dean wants to have his cake and eat it.

Nor can evidence dissuade him. When Mason digs into the cathedral’s non-existent foundations, showing Jocelin the soft earth writhing under the weight of the building, the zealot’s faith is strengthened. If the current cathedral stands on foundations of mud, isn’t that proof that miracles are possible?

Brexit, of course, is not only possible but almost inevitable. But the promises that have been made cannot be fulfilled any more than Jocelin’s spire could safely be built. We cannot “have access” to the single market (that is, remain in it) while also ending freedom of movement; we cannot leave the customs union without introducing a customs border. The discovery of the week — surprising to nobody who has been paying attention — is that this customs border can be located on neither land nor sea.

Jocelin ignores the experts. “I thought it would be simple,” he says. “I had to build in faith, against advice. That’s the only way.” And it proves all too easy to ignore those who might restrain him. One faithful priest, “Father Anonymous”, is too boring to notice. In another life, perhaps he would have been an economist. Others, Jocelin remarks sharply, would profit if the project was thwarted. It is true that sometimes the experts have an eye on their own finances. They may nonetheless be right.

Admittedly, pure determination sometimes finds a way. Monomaniacs change the world, sometimes for the better. One recalls the description of Steve Jobs in his early years at Apple, generating a “reality distortion field” that could redefine what was possible by “sheer mental force”.

Even The Spire was inspired not by folly, but by a triumph. For more than 15 years Golding was a teacher in the shadow of Salisbury Cathedral, whose 404-foot spire has been the tallest in the country for nearly five centuries. Perhaps long-forgotten experts once warned that it could never be built.

Whether Brexit eventually turns into something worth admiring will be for future historians to judge. For now, Golding invites us to ponder the cost. Jocelin’s ambition requires an army of builders to deliver it; that army murders an innocent person.

“Let it be so,” says Jocelin to the heavens. “Cost what you like.”

The project takes a toll in ways that blinkered Jocelin did not consider and takes too long to notice. Letters from allies go unanswered. Urgent business is postponed. The cathedral starts to die; the congregation leaves. Observers of British politics will not find the parallel hard to discern: the centre ground has been hollowed out, the economy is faltering, respect for basic norms of truth-telling are in tatters, and the union itself is under strain.

Jocelin slowly realises the toll his project is taking on those around him, but since he is doing the work of God, any price must be worth paying. British politicians obey the will not of God, but of the British people as expressed in a referendum. It seems to amount to the same thing.

In the end, Jocelin is stripped of his job and his dignity. The long-predicted storm comes. Reality asserts itself. The vision, the visionary and the spire itself crack under the strain. “I thought I was doing a great work,” Jocelin confesses. “And all I was doing was bringing ruin and breeding hate.”

And yet the spire does not fall. That is where Golding leaves us: the project cannot go on, but it cannot be undone. Disaster hangs in the air. “Has it fallen yet?” asks the stricken Jocelin. Not yet.

 

Written for and first published in the Financial Times on 8 December 2017.

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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