Tim Harford The Undercover Economist

# Articles published in 2020

## Book of the week 14: The Weather Machine by Andrew Blum

I was intrigued by news reports that the Met Office was planning to drop more than a billion pounds on a new supercomputer, and wondered what it was that these clever weather forecasters did with all that silicon. So I picked up Andrew Blum’s recent book, The Weather Machine.
Blum starts with the weather map – and John Ruskin’s metaphor of the “weather machine”, transcending the local observations of an individual forecaster and linking together what James Gleick calls “local surprises” into a larger map. After all, one part of the weather forecasting game is straightforward: if it’s raining to the west of you and the wind is blowing from the west, you can expect rain soon. Weather forecasts begin with weather observations: the more observations, the better.
In the 1850s, the Smithsonian Institution in Washington DC used reports from telegraph operators to patch together those “local surprises” into a national weather map. This map was based purely on observations, but it was still a useful starting point before we had either the scientific understanding or the computational power necessary to make a reliable forecast.
The scientific understanding began to dawn in 1904, when Norwegian mathematician Vilhelm Bjerknes published “The problem of weather prediction”, an academic paper describing the circulation of masses of air. If you knew the density, pressure, temperature, humidity and the velocity of the air in three dimensions, and plugged the results into Bjerknes’s formulas, you would be on the way to a respectable weather forecast – if only you could solve those computationally-demanding equations.
The British mathematician Lewis Fry Richardson attempted just that, attempting to predict the weather of 20th May 1910 given the starting conditions. Alas, it was 1922 before he finished the sums – despite continuing to calculate in the evenings after long days as an ambulance driver during the war. Nor did the equations accurately describe the weather that day, 12 years earlier. Still: one must start somewhere.
Fry Richardson dreamed of a forecasting factory, a stadium filled with 64,000 human computers, conducted by lights and other signals as they furiously calculated the weather equations faster than the weather itself could evolve. It was a remarkable vision: modern weather forecasting works much as Fry anticipated, except that there is no need to perform the calculations by hand – or 128,000 hands. The Met Office’s billion-and-a-half dollars of silicon will do the job nicely.
Blum’s narrative ranges widely and finishes at the European Mid-Range Weather Forecast HQ in Reading. (My understanding is that this arrangement will survive Brexit, partly because the EMRWF is a separate organisation from the EU. But don’t quote me on that.) The EMRWF, says Blum, are the elite among meteorologists, and he spends some time exploring why they are so admired. Part of the secret is a way of working that can be split into modules and relentlessly tested, experimented with, and improved.
I strongly recommend the book, which is a fascinating glimpse of a mysterious world.

US: Powell’sAmazon

My book “Fifty Things That Made the Modern Economy” (UK) / “Fifty Inventions That Shaped The Modern Economy” (US) is out now in paperback – feel free to order online or through your local bookshop.

## Receive these posts by email

(You can unsubscribe at any time)

## Why it’s too tempting to believe good news about the coronavirus

Wishful thinking is a powerful thing. When I read about a new disease-modelling study from the University of Oxford, I desperately wanted to believe. It is the most prominent exploration of the “tip-of-the-iceberg hypothesis”, which suggests that the majority of coronavirus infections are so mild as to have passed unrecorded by the authorities and perhaps even un­noticed by the people infected.

If true, many of us — perhaps most of us in Europe — have already had the virus and probably developed some degree of immunity. If true, the lockdowns have served a valuable purpose in easing an overwhelming strain on intensive care units, but they will soon become unnecessary. If true.

But is it true? If it is, it stands in stark contrast to the far grimmer modelling from a group at Imperial College London, which concluded that if the epidemic was not aggressively contained, half a million people would die in the UK — and more than 2m in the US. Models such as this one helped to persuade the British government to follow much of continental Europe in putting the economy into a coma.

The differing perspectives are made possible by the fact that the data we have so far are not very good. Testing has been sporadic — in some places, shambolic — and everyone agrees that large numbers of cases never reach official notice. We do have solid statistics about deaths, and as the epidemiologist Adam Kucharski, author of The Rules of Contagion, observes, a wide variety of scenarios are consistent with the deaths we’ve seen so far. Perhaps Covid-19 is uncommon and deadly; perhaps it is ubiquitous and kills only a tiny proportion of those it affects. Deaths alone cannot tell us.

This uncertainty is unnerving. John Ioannidis, an iconoclastic epidemiologist, wrote on March 17 that Covid-19 “might be a one-in-a-century evidence fiasco”. Prof Ioannidis’s argument is that some infections are being missed, and we have little idea how many. Therefore we have little idea how deadly Covid-19 really is.

He speculates that the fatality rate could plausibly lie between one in 100 and one in 2,000 cases. Either way, it is dangerous; but the difference is vast. And if the scale of our ignorance about coronavirus may seem hard to swallow, bear in mind that the fatality rate for the H1N1 swine flu pandemic in 2009 was still being debated years later.

Prof Ioannidis has form: 15 years ago he published a study with the title “Why Most Published Research Findings Are False”. That claim seemed outrageous at the time, but subsequent efforts to reproduce famous experiments in psychology have revealed that he was on to something important. We know less than we think.

But we are not completely ignorant. Alongside the death total, there are other clues to the truth. For example, thousands of people were evacuated from Wuhan city in late January and February and most of them were tested. A few tested positive and several were indeed symptom-free, but not the large majority that the Oxford version of the tip-of-the-iceberg hypothesis would imply.

The entire population of the town of Vò in Italy was repeatedly tested and, while half of the positive cases were asymptomatic, that is still much less than the Oxford model might lead us to expect.

So while it is possible that most of us could have been infected without ever knowing — and that herd immunity is within easy reach — it is not likely. That may explain why neutral experts have responded to the Oxford study with caution, and some concern that it might provoke a reckless response from individuals or policymakers.

So, what now? First: stay indoors if you want to save many lives and prevent health systems from being overwhelmed. The bitter experience of Italy and Spain demonstrates the importance of flattening the peak of the epidemic. That remains true even if, as we might hope, the epidemic is much milder and more widespread than we currently believe. It might have been tempting to wait and gather more evidence — but faced with an exponentially rising pile of corpses, “wait and see” is not an option.

Second: health systems should expand capacity, buying more ventilators and more protective equipment for doctors and nurses. In all but the most optimistic scenarios we will need them now, we will need them later in the year and we will need them from time to time in the future. This crisis is teaching us that we should have had more spare capacity all along, despite the cost.

Third: test, test, test — and not only using the current tests to detect infection, but new ones for antibodies that should show whether people have already had the virus and have developed some degree of immunity. Sunetra Gupta, a professor on the Oxford team, says that such tests may start to produce results in a matter of days.

The epidemiologists are doing their best, but they are not omniscient. They need facts with which to work. Gathering those facts systematically is one of many urgent tasks ahead of us.

Written for and first published in the Financial Times on 27 March 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

## Receive these posts by email

(You can unsubscribe at any time)

## Remembering Peter Sinclair

Peter Sinclair died yesterday, after many days in hospital with covid-19. It’s a heavy blow. Peter was an inspirational economics teacher and a wonderfully kind man. Peter inspired a generation of great economists and economics journalists, including Dave Ramdsen (long time head of the Government Economic Service), Camilla Cavendish, Tim Leunig, Evan Davis, and Diane Coyle, who posts her own memories. He also taught David Cameron. I’m envious of all of them because Peter left for the University of Birmingham before I had the chance to have the full benefit of his teaching. My loss, Birmingham students’ gain.

But even in a few short months he had a profound influence on me. When I was floundering in my Oxford entrance interviews – I hadn’t got a clue what was going on as I was being grilled by the formidable philosophy tutor – Peter was the one beaming and nodding and encouraging, as though everything was going brilliantly. And when I decided to drop economics and specialise in philosophy, Peter took the trouble to send a long, handwritten letter, full of encouragement, gently suggesting that I reconsider. I remember it vividly. I took his advice. It changed my life.

Peter had many friends, and went to great lengths to keep in touch with and support his former students. They will all be grieving today. My thoughts are very much with his wife Jayne, his family, and his close friends.

I bumped into him on the street a couple of years ago. He was smiling, bobbing around, waving enthusiastically, behaving as though there was nobody in the world he’d rather see. That extravagant friendliness was so very like him. It is how I’ll remember him.

1st of April, 2020Other WritingComments off

## How not to lose your mind in the Covid-19 age

here are as many responses to the Covid-19 pandemic as there are people to respond. Some have of us have children to home-school. Some of us have elderly relatives to worry about; some of us are the elderly relatives in question. Some of us have never been busier; others have already lost their jobs.

One experience is common, however: wherever the virus has started to spread, life is changing radically for almost everyone. It’s a strange and anxious time, and some of the anxiety is inevitable. For many people, however, much of the stress can be soothed with – if you will pardon the phrase – one weird trick.

First, a diagnosis. Most of us, consciously or not, have a long list of things to do. At the virus and the lockdowns have spread, many of the items on the to-do list have simply evaporated. At the same time, a swarm of new tasks have appeared, multiplying by the day: everything from the small-yet-unfamiliar (“get toilet paper” and “claim refund on cancelled holiday”) to the huge-and-intimidating (“organise an inspiring home-school curriculum” or “find a new job”).

The change is so fast and comprehensive that for most of us it is unprecedented. Even a divorce or an international relocation is more gradual. The death of a spouse might be the only experience that comes close. No wonder that even those of us who are safe and well and feel loved and financially secure find ourselves reeling at the scale of it all.

To the extent that the problem is that the to-do list is unrecognisable, the solution is oddly simple: get the to-list back in order. Here’s how.

Get a piece of paper. Make a list of all the projects that are on your mind. David Allen, author of the cult productivity manual Getting Things Done, defines a project as “any multistep outcome that can be completed within a year”. So, yes: anything from trying to source your weekly groceries to publishing a book.

That list should have three kinds of projects on it.

First, there are the old projects that make no sense in the new world. For those that can be mothballed until next year, write them down and file them away. Others will disappear forever. Say your goodbyes. Some part of your subconscious may have been clinging on, and I’m going to guess that ten seconds of acknowledging that the project has been obliterated will save on a vague sense of unease in the long run.

Second, there are the existing projects, some of which have become more complicated in the mid-pandemic world. Things that you might previously have done on automatic may now require a little thought. Again, a few moments with a pen and paper will often tell you all you need to know: what’s changed? What do I now need to do? What, specifically, is my next action? Write it down.

Third, there are brand new projects. For me, for example, I need to rewrite the introduction to my forthcoming book (‘How To Make The World Add Up, since you were wondering). It’s going to seem mighty strange without coronavirus references in it. Many of us need to devote more than a little attention to the sudden appearance of our children at home. Some of us need to hunt for new work; others, for a better home-office set-up. Many of us are now volunteering to look after vulnerable neighbours.  In each case, the drill is the same: sketch out the project, ask yourself what the very next step is, and write it down.

Occasionally, you may encounter something that’s on your mind – the fate of western civilisation, for example, or the fact that the health service desperately needs more ventilators and more protective equipment. For my family, it’s an elderly relative, suffering from dementia, in a locked-down nursing home. We can’t visit him. He can’t communicate on the phone or comprehend a video chat. There is, for now, literally nothing we can do but wait and hope. Acknowledging that fact – that there is no action to be taken – is itself a useful step.

I won’t pretend that in this frightening time, working through your to do list in a systematic way will resolve all anxieties. It won’t. But you may be surprised at how much mental energy it saves – and at the feeling of relief as all these confusing and barely-acknowledged new responsibilities take shape and feel more under your control.

Or so it seems to me. Good luck, and keep safe.

Oh – and in case it wasn’t obvious, this week’s Book of the Week is David Allen’s superb Getting Things Done.

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

## Receive these posts by email

(You can unsubscribe at any time)

29th of March, 2020MarginaliaOther WritingResourcesComments off

## Why the crisis is a test of our capacity to adapt

“It’s really quiet,” said the proprietor of Oxford’s best falafel stall when I popped over to buy lunch on Monday. It is even quieter now. Meanwhile, my wife emailed friends to ask if we could help: both of them are doctors and they have three children and a parent undergoing treatment for cancer. “Thanks We will be in touch,” came the reply. No time for more. It may be quiet for the falafel man, but not for them.

There, in miniature, is the economic problem that the coronavirus pandemic has caused, even in its early stages. For everyone who is overworked, someone else has little to do but wait. The supermarkets have struggled to meet a rush of demand for some goods, but that should pass. “We are not going to run out of food, so chill,” Yossi Sheffi tells me. He’s an MIT professor and an authority on supply chains.

While the pressure on the supermarkets may ease, the strain on the healthcare system will not. It is already intense and will get much worse. Yet while clinicians are overstretched, others wonder when the next job is coming from. From the falafel seller to the celebrity chef, the hotel porter to the millionaire motivational speaker, many tens of millions of people around the world are fit and eager to work, yet unable to.

This is a test of flexibility and imagination. Gourmet restaurants are shifting to takeaway service; conference speakers are building portable studios. Best of all is when we find ways to turn idle resources into weapons in the fight against the virus. It is hard not to cheer when reading tales of distillers turning their stills to the task of producing hand sanitiser, or hoteliers offering their empty rooms to doctors and nurses.

But it is a much tougher task, for example, to make more urgently needed ventilators. In the mid-20th century, William Morris, a man who made his fortune manufacturing British cars, turned his workshops to the task of producing “iron lungs” for people paralysed by polio. It’s an inspiring precedent for his successors at Meggitt, McLaren and Nissan scrambling to emulate him by building ventilators to use in the current crisis, but it took time.

Prof Sheffi reckons that it would be straightforward for, say, an automobile parts supplier to retool in a matter of months, and having many thousands of extra ventilators by the autumn would certainly be better than nothing. But to produce complex equipment from scratch in weeks, perhaps using 3D printing, would be a miraculous achievement even if regulations are loosened, as they should be.

Yet harder is to find more nurses and doctors; intensive care units do not operate themselves. And even for less specialist staff, the task is larger than it might seem because of what the late Thomas Schelling, a Nobel laureate economist, called “the acceleration principle”. Let’s say that Europe has 10m hospital orderlies, with an annual turnover of 30 per cent. That means 3m need to be trained each year, 1m at a time on a four-month training course.

Now let us aim to expand gently to 11m over the next four months. It doesn’t sound much — just a 10 per cent increase. Yet the training programme must double in scale to accommodate it, because now 2m rather than 1m orderlies are enrolled in the same four-month window. The same logic applies to anything we need more of, from the personal protective equipment that is in desperately short supply in our hospitals, to the internet bandwidth that we will all be using more of, while working from home.

The task, then, is immense. But we must try. Under any conceivable scenario, we would not regret trying to expand emergency medical care several times over. If it is impossible, so be it. But if it is merely expensive and difficult, such costs are trivial compared to the costs of suspending everyday life for weeks or months.

And there is some hope: efforts are already under way to persuade doctors and nurses who have retired or switched careers to return, and to put medical students to work at once. We could quickly train new medical support staff to perform focused and limited roles. I can only imagine the breadth of the skills needed to be an intensive care nurse, but if we cannot have more experienced nurses with complex skills, let us at least support them with people who can quickly be trained to change an oxygen tank or turn a patient in bed.

Even those apparently ill-suited to intensive care duty — the 75-year-old retired doctor, the community volunteer with first aid training, or even furloughed airline crews — could indirectly support health systems. While medical professionals staff the wards, I would gladly pay taxes to fund online advice from a retired doctor, a virus test administered by an air steward, or stitches and bandages from a St John Ambulance volunteer.

Killing two birds with one stone never sounded easy to me. But there is no excuse now not to be radical. This crisis is a test of many things. Not least among them is our capacity to adapt.

Written for and first published in the Financial Times on 20 March 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

## Receive these posts by email

(You can unsubscribe at any time)

## Book of the Week 12: The Misinformation Age by Cailin O’Connor and James Owen Weatherall

The Misinformation Age is a good read, although not quite what I expected. Not much on the psychology of misinformation – the backfire effect and confirmation bias, for example, are mentioned only briefly. But that’s fine: such topics are covered very well elsewhere. Instead, the book has two stylistically quite different components: some strong storytelling (and often the stories were unfamiliar to me); and a network-based analysis of the spread of information or misinformation through a nodes-and-edges graph.

O’Connor and Weatherall are interested, then, in the structure of networks that propagate information and misinformation, and spend at least as much time on expert networks (for example, networks of research scientists) as they do on muppets like you and me. The graph-analysis is used to study how pseudo-scientific propaganda (such as tobacco-cancer denial and climate denial) can influence experts. I learned a lot, and was delighted to see that an idea I proposed way back in “Adapt” actually exists in the scientific literature: it’s called the Zollman Effect. (The Zollman Effect describes a situation in which scientists can improve their beliefs by failing to communicate. Too much communication, too early, leads to a convergence of beliefs that might be premature. Pockets of heterodox thought gather data on alternative approaches, which will sometimes prove to be correct.)

The stories are good, too. Some come from the excellent Merchants of Doubt, but no harm in that. There was some very interesting detail on the initial research into the ozone hole, and I loved the opening tale about the Vegetable Lamb of Tartary, a piece of fake news that emerged around 1350 CE and persisted for centuries. Bravo.

US: Powell’sAmazon

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

## Receive these posts by email

(You can unsubscribe at any time)

## Will economists ever be as good at forecasting as meteorologists?

The UK’s national weather service, the Met Office, is to get a £1.2bn computer to help with its forecasting activities. That is a lot of silicon. My instinctive response was: when do we economists get one?

People may grumble about the weather forecast, but in many places we take its accuracy for granted. When we ask our phones about tomorrow’s weather, we act as though we are gazing through a window into the future. Nobody treats the latest forecasts from the Bank of England or the IMF as a window into anything.

That is partly because politics gets in the way. On the issue of Brexit, for example, extreme forecasts from partisans attracted attention, while independent mainstream forecasters have proved to be pretty much on the money. Few people stopped to praise the economic bean-counters.

Economists might also protest that nobody asks them to forecast economic activity tomorrow or even next week; they are asked to describe the prospects for the next year or so. True, some almanacs offer long-range weather forecasts based on methods that are secret, arcane, or both — but the professionals regard such attempts as laughable.

Enough excuses; economists deserve few prizes for prediction. Prakash Loungani of the IMF has conducted several reviews of mainstream forecasts, finding them dismally likely to miss recessions. Economists are not very good at seeing into the future — to the extent that most argue forecasting is simply none of their business. The weather forecasters are good, and getting better all the time. Could we economists do as well with a couple of billion dollars’ worth of kit, or is something else lacking?

The question seemed worth exploring to me, so I picked up Andrew Blum’s recent book, The Weather Machine, to understand what meteorologists actually do and how they do it. I realised quickly that a weather forecast is intimately connected to a map in a way that an economic forecast is not.

Without wishing to oversimplify the remarkable science of meteorology, one part of the game is straightforward: if it’s raining to the west of you and the wind is blowing from the west, you can expect rain soon. Weather forecasts begin with weather observations: the more observations, the better.

In the 1850s, the Smithsonian Institution in Washington DC used reports from telegraph operators to patch together local downpours into a national weather map. More than a century and a half later, economists still lack high-definition, high-frequency maps of the economic weather, although we are starting to see how they might be possible, tapping into data from satellites and digital payments. An example is an attempt — published in 2012 — by a large team of economists to build a simulation of the Washington DC housing market as a complex system. It seems a long way from a full understanding of the economy, but then the Smithsonian’s paper map was a long way from a proper weather forecast, too.

Weather forecasters could argue that they have a better theory of atmospheric conditions than economists have of the economy. It was all sketched out in 1904 by the Norwegian mathematician Vilhelm Bjerknes, who published “The problem of weather prediction”, an academic paper describing the circulation of masses of air. If you knew the density, pressure, temperature, humidity and the velocity of the air in three dimensions, and plugged the results into Bjerknes’s formulas, you would be on the way to a respectable weather forecast — if only you could solve those computationally-demanding equations. The processing power to do so was to arrive many decades later.

The missing pieces, then: much better, more detailed and more frequent data. Better theory too, perhaps — although it is striking that many critiques of the economic mainstream seem to have little interest in high-resolution, high frequency data. Instead, they propose replacing one broad theory with another broad theory: the latest one I have seen emphasises “the energy cost of energy”. I am not sure that is the path to progress.

The weather forecasters have another advantage: a habit of relentless improvement in the face of frequent feedback. Every morning’s forecast is a hypothesis to be tested. Every evening that hypothesis has been confirmed or refuted. If the economy offered similar daily lessons, economists might be quicker to learn. All these elements are linked. If we had more detailed data we might formulate more detailed theories, building an economic map from the bottom up rather than from the top down. And if we had more frequent feedback, we could test theories more often, making economics more empirical and less ideological.

And yet — does anyone really want to spend a billion pounds on an economic simulation that will accurately predict the economic weather next week? Perhaps the limitations of economic forecasting reflect the limitations of the economics profession. Or perhaps the problem really is intractable.

Written for and first published in the Financial Times on 21 February 2020.

Catch up on the first season of my podcast “Cautionary Tales” [Apple] [Spotify] [Stitcher]

My book “Fifty Things That Made the Modern Economy” (UK) / “Fifty Inventions That Shaped The Modern Economy” (US) is out now in paperback – feel free to order online or through your local bookshop.

## Receive these posts by email

(You can unsubscribe at any time)

## Book of the week 11: Uncharted by Margaret Heffernan

“The sagacious businessman is constantly forecasting,” said the great economist Irving Fisher, a man thoroughly convinced of the power of data to make the future legible. Fisher transformed economics and made millions as an entrepreneur, but died in penury. He is now best remembered as the tragic figure who, shortly before the cataclysmic Wall Street crash of 1929, informed the nation: “Stocks have reached what looks like a permanently high plateau.”

Poor Professor Fisher appears early on in Uncharted. Margaret Heffernan’s book is less a smackdown of failed forecasts than an engaging ramble across our attempts to predict, control, explore or embrace an uncertain future. Heffernan is admired for books that question the received wisdom of how management works; she is a business guru who brings the stern discipline of good sense to the business book genre. In this book, she turns her attention to a topic that absorbs most business leaders — and the rest of us too: how to think about what the future holds. Gazing into the future is not fruitless, she argues, but it is unnerving and hard work. Lazy and fearful, we are far too quick to reach for overblown gurus, or misleading data or other useless guides. Even a good tool, such as GPS, can dull our senses.

“What matters most isn’t the predictions themselves but how we respond to them, and whether we respond to them at all,” she writes. “The forecast that stupefies isn’t helpful, but the one that provides fresh thinking can be.”

And fresh thinking is what Heffernan wishes to provoke, mostly through storytelling, occasionally through rhetoric. Are we trapped by history? Only if we let our own narratives confine us. Can parents use an app to “predict life outcomes and . . . maximise the life-long potential of your child”? No. She finds the idea appalling.

Better, she suggests, to explore, empower, experiment. Whether you’re running a multinational, pondering a career change or being a parent, the same wisdom applies: sometimes things go wrong, or go right, and we don’t know why. Keep your eyes open. Stay engaged. Listen to others. Don’t be afraid to change course. Contribute to your community, and make connections before trouble strikes: “Don’t exchange business cards in a crisis.”

At times, Uncharted resembles a collection of secular sermons illustrated with a story. Heffernan stands in the pulpit quietly admonishing us to be a little wiser, reflect a little more, to do the things that deep down we already know we should be doing.

Moments of counterintuitive astonishment are scarce, but the book is probably better for that. And it largely avoids the usual suspects: Apple, Google, 3M, the US military. Instead, we find ourselves in the shoes of a disillusioned Catholic priest, realising he has fallen in love and getting no help from the Church. Or in a room with a diverse group of Mexicans, from mobsters to senators, as they try to explore the future with a scenario-planning exercise. Or with the management of Nokia, wondering if there is life after cell phones. These are subtle tales of struggle and compromise.

The storytelling is not without its flaws. Physicist Marzio Nessi morphs into a Mr Messi, who is surely a different kind of genius. A discussion of fresh ideas in healthcare required multiple re-readings to sort out who was doing what, where, and whether these were diverse experiments across the nation. More than once I checked the index because I assumed I’d missed something. These are small things, but in a book that tries to flow so freely across so many stories, they are barnacles that produce a drag.

That said, Heffernan is generally a deft storyteller and the book’s reliance on such stories is a strength. Bad “smart thinking” books offer 2×2 matrices and jargon; good ones offer theory and evidence. Heffernan steps outside the category entirely. She wants us to engage with the particularities of people, places and the problems they faced — to empathise with them, reflect on our own lives and our own careers, and to draw our own conclusions.

Uncharted is not a book to skim in the business class lounge. Heffernan’s approach is more like a music lover trying to broaden the appreciation of a patient friend. “Here’s an example; listen to this; here’s another. Compare, contrast. Now do you see what I’m getting at?” It is messy, and occasionally frustrating, but wise and appealingly human.

US: Amazon – Powell’s (Publishes Sep 2020)
Written for and first published in the Financial Times on 19 February 2020.

Catch up on the first season of my podcast “Cautionary Tales” [Apple] [Spotify] [Stitcher]

My book “Fifty Things That Made the Modern Economy” (UK) / “Fifty Inventions That Shaped The Modern Economy” (US) is out now in paperback – feel free to order online or through your local bookshop.

## Receive these posts by email

(You can unsubscribe at any time)

16th of March, 2020MarginaliaOther WritingComments off

## Why moonshots matter

Tim Bradshaw, head of the Russell Group of leading UK universities, has a curious tale to tell about failure. A few years ago he visited the Cambridge office of an admired Japanese company to find them fretting about the success rate of their research and development. At 70 per cent, it was far too high: the research teams had been risk-averse, pursuing easy wins at the expense of more radical and risky long-shots.

The late Marty Sklar, a Disney veteran, once told me a similar tale — if his colleagues weren’t failing at half of their endeavours, they weren’t being brave or creative enough. My boss at the World Bank 15 years ago had the same worry that too many projects were succeeding.

When the same concern arises in such wildly different contexts, we may be worrying about a common problem: a systematic preference for marginal gains over long shots. It’s not hard to see why. It is much more pleasant to experience a steady trickle of small successes than a long drought while waiting for a flood that may never come.

While marginal gains add up, they need to be refreshed by the occasional long-shot breakthrough. Major innovations such as the electric motor, the photo­voltaic cell or the mobile phone open up new territories that the marginal-gains innovators can then explore.

With this in mind, it’s hard not to sympathise with the UK Conservative party’s promise to establish “a new agency for high-risk, high-pay-off research, at arm’s length from government” — a British version of the much-admired US Defense Advanced Projects Research Agency.

Originally known as Arpa, now Darpa, it is most famous for creating Arpanet, the precursor to the internet. It also supported early research into satellite navigation and the windows-and-mouse system for operating a computer. And it helped to catalyse interest in self-driving cars. With successes like that, nobody seems to mind that Arpa’s failure rate is often said to be around 85 per cent. High-risk, high-pay-off indeed.

A collection of essays published recently by the think-tank Policy Exchange concurs that we need an Arpa for the UK. I’ve long argued for the importance of long-shots — the subtitle of one of my books is “why success always starts with failure” — so I can’t help but agree. Yet if this was easy, the UK would have an Arpa already.

At the casino it is easy to double the rewards by doubling the risk, but in the world of research, the trade-off is not so straightforward. While a low failure rate may indeed signal a lack of originality and ambition, we cannot simply decide to fail more often in the hope that originality will follow.

Arpa itself has approached this problem by hiring high-quality scientists for short stints — often two or three years — and giving them control over a programme budget to commission research from any source they wish.

Meanwhile, the Howard Hughes Medical Institute, a foundation, deliberately looks for projects with an unusual or untried approach, but a large potential pay-off. One study suggested that HHMI gets what it pays for — more failures, but larger successes, compared with other grant-makers funding researchers of a similar calibre.

Another large obstacle looms: how long will politicians find failure to be a sign of boldness and originality? Eventually, they will simply call it failure. Now that Arpa has a 62-year record, it is easy to forget that the agency was initially written off by some critics.

A new UK agency will face pressure to deliver. That sits uneasily with the desire to support risk-taking. Consider Arpa’s younger sibling, Arpa-E, created in 2009 to fund new energy projects. As of this week, the section of the Wikipedia entry on Arpa-E entitled “Accomplishments” is empty. Ouch.

The problem is more acute for a UK Arpa, because it is likely to have less funding — perhaps £200m a year. Is that enough? When Arpa’s head Charles Herzfeld heard the initial pitch for the proto-internet, in 1965, he responded, “Great idea . . . Get it going. You’ve got a million dollars more in your budget right now. Go.”

That is \$10m-\$30m in today’s money — depending on how one adjusts for spending power. It is hard to imagine a modern-day Herzfeld blowing a tenth of the UK-Arpa’s budget after a 20-minute meeting. We are on the Triceratops-horns of a trilemma. Be cautious, or fund lots of risky but tiny projects, or fund a few big, risky projects from a modest budget and accept that every single one may flop.

Keeping this new agency “at arm’s-length from government” is essential. Indeed, Safi Bahcall — the author of Loonshots — persuasively argues that such agencies need to be at arm’s length not just from government but from everybody. Yet somehow they must focus on real, practical, front-line problems. Not too close, not too distant. Not too many successes, but not too many failures, either. It’s quite a balancing act. Still, I’d pay for a ticket to this circus. Let’s give it a try.

Written for and first published in the Financial Times on 14 February 2020.

Catch up on the first season of my podcast “Cautionary Tales” [Apple] [Spotify] [Stitcher]

## Receive these posts by email

(You can unsubscribe at any time)

## Book of the Week 10: The Rules of Contagion by Adam Kucharski

All authors need a little bit of luck, and Kucharski has it with his suddenly-topical book, The Rules of Contagion.

I enjoyed this one a lot (or, strictly, am enjoying it a lot, since I’ve not finished but I wanted my review to be as timely as the book). Kucharski is a young epidemiologist with first-hand experience of the Zika outbreak, as well as a summer working in finance in the middle of the financial crisis, so is well-placed to write a lively book about contagion both of biological illnesses and of other things such as ideas.

The book is well written, plenty of nerdy ideas (Erdos-Renyi networks, for example) leavened both with practical examples and with nice pen-portraits of the scientists involved, such as Robert May, Hilda Hudson, Paul Erdos and Ronald Ross.

I’m learning fast and having a good time. A welcome distraction from the excitable news.

US: Amazon

My NEW book The Next Fifty Things That Made the Modern Economy is out in the UK in May and available to pre-order; please consider doing so online or at your local bookshop – pre-orders help other people find the book and are a huge help.

## Receive these posts by email

(You can unsubscribe at any time)