Economics for Everyman

I’ve always had an interest in getting to know the fundamentals of economics. I’ve even bought a number of introductory books over the years to educate myself. Unfortunately I found them all a bit dull and gave up. However I’ve always been on the outlook for something accessible as it’s clearly an important subject.

All this was heightened by Brexit. I followed articles and opinions in a variety of media (hoping to develop an informed and balanced viewpoint) but ended up confused especially as many of the competing arguments were quite direly presented (here).

I often think this is clumsily deliberate with a blatant diversion to emotional triggers and kneejerk responses (which doesn’t say much for the politicians estimates of the voting public). If more people were better informed, it must be a good thing.

The above video by Ha-Joon Chang is a welcome relief (‘95% of economics is common sense’). Well made and very instructive and gives just enough info to tempt a longer investigation.

‘Economics is for everyone’, argues legendary economist Ha-Joon Chang in our latest mind-blowing RSA Animate. This is the video economists don’t want you to see! Chang explains why every single person can and SHOULD get their head around basic economics. He pulls back the curtain on the often mystifying language of derivatives and quantitative easing, and explains how easily economic myths and assumptions become gospel. Arm yourself with some facts, and get involved in discussions about the fundamentals that underpin our day-to-day lives.

A recent book of his is: Economics: The User’s Guide. It gets excellent reviews but is still a daunting 528 pages! I’ll order it from my local library (partly to help keep it going and partly because I’m trying to buy less books, the house is full of them).

Background on Ha-Joon Chang:

“I was born in Seoul, South Korea, on 7 October, 1963 (there are stories about what life was like in South Korea in my youth in the Prologue of my book, Bad Samaritans). I came to the UK as a graduate student at the Faculty of Economics and Politics, University of Cambridge in 1986. I earned my PhD in 1992. I have been teaching economics at the Faculty of Economics (as it is called now) and the Development Studies programme at the University of Cambridge since 1990.”

Serendipity and Portobello Road

A few weeks ago I published an article on photowalks, giving some examples from a trip to Portobello Market in London. Fairly soon after this, I was in the local library looking for books to read and came across the title Portobello by Ruth Rendell (crime fiction).

I thought it unlikely that there would be much mention of the area, except for passing references and general backdrop. Also, not being sure if it was the sort of book I was in the mood for reading, I used the ‘first page rule’ – just read it and see if it has an immediate impact!

Consequently I was quite surprised to find this on page one (see here):

“It is called the Portobello Road because a long time ago a sea captain called Robert Jenkins stood in front of a committee of the House of Commons and held up his amputated ear. Spanish coast guards, he said, had boarded his ship in the Caribbean, cut off his ear, pillaged the vessel, then set it adrift. Public opinion had already been aroused by other Spanish outrages, and the Jenkins episode was the last straw to those elements in Parliament which opposed Walpole’s government. They demanded British vengeance and so began the War of Jenkins’s Ear.

In the following year, 1739, Admiral Vernon captured the city of Puerto Bello in the Caribbean. It was one of those successes that are popular with patriotic Englishmen, though many hardly knew what the point of it was. In the words of a poet writing about another battle and another war: “That I cannot tell, said he, but ’twas a famous victory.” Vernon’s triumph put Puerto Bello on the map and gave rise to a number of commemorative names. Notting Hill and Kensal were open country then where sheep and cattle grazed, and one landowner called his fields Portobello Farm. In time the lane that led to it became the Portobello Road. But for Jenkins’s ear it would have been called something else…

Street markets abounded in the area, in Kenley Street, Sirdar Road, Norland Road, Crescent Street, and Golborne Road. The one to survive was the Portobello, and from 1927 onwards a daily market was held there from eight in the morning to eight in the evening and 8 a.m. till 9 p.m. on Saturdays. It still is, and in a much reduced state on Sundays too.”

I was not expecting to be educated! It made me realise how superficial my knowledge of London really was and how intricate and surprising some of the historical stories are.

Moral – it’s worth dabbling, you never know what you might find!

Unconventional Time Management

Spotted on the internet whilst browsing/procrastinating:

How to stop time – kiss
How to travel in time – read
How to escape in time – music
How to feel time – write
How to release time – breathe

Seven Ingredients of Creativity

There are many books published on creativity and innovation each year. Most are written by consultants or journalists who survey large areas and try to distil some general characteristics. A complementary approach is offered when when a hugely creative individual gives his own personal views, based on results within a specific specialised area.

Using the latter approach, the mathematician Cedric Villani offers seven ingredients conducive to the birth of an idea (see short video above):

1. Documentation, for building on what is known
2. Motivation incl. early education
3. Environment eg life in a big bustling city
4. Communication eg massive collaboration in the future
5. Constraints, to imaginatively find ways around obstacles
6. Illumination coupled with meticulous systematic work
7. Luck and tenacity

Villani (born 5 October 1973) is an outstanding French mathematician and was awarded the Fields Medal in 2010 (the highest accolade you can get for contributions to mathematics).

Cedric Villani (picture from WikiMedia)

From The New Yorker:

Villani has been called the Lady Gaga of French mathematicians. After winning the Fields Medal, math’s highest honor, in 2010, for what his award citation called “proofs of nonlinear Landau damping and convergence to equilibrium for the Boltzmann equation,” he embraced a role that many other medalists have dreaded—that of mathematical ambassador, hopscotching from event to event and continent to continent, evangelizing for the discipline. “We are the most hidden of all fields,” he told me. “We are the ones who typically interact the least with the outer world. We are also the field which is most emblematic of revulsion in school.”

The Benefits of Being Disorderly

“One of the advantages of being disorderly is that one is constantly making exciting discoveries.” – AA Milne

Pitching By Conversation

Pitching is a common way of trying to garner interest and hopefully, eventually, funding and support. However, in casual situations, it can come over as quite mechnical and forced. I’ve done this myself and also had it done to me! Could there be, on occasion, a better way?

There’s a nice story by Kevin Starr, who is a Foundation Director, in the Stanford Social Innovation Review that gives a very honest example which lead him to consider this problem further. The points made are quite general.

Some extracts from the article:

It’s because a pitch is a really weird way to communicate. Its basic premise is that time is scarce and power is unequal. Even if concise and well-organized, the information comes in a one-way rush that forces the listener into an uncomfortable, passive role. The listener starts to fidget and look around, and the talker slides into the role of the supplicant who knows her time is slipping away. Anxiety and/or annoyance ensue, and it takes great social skills on the part of somebody for it to end well…

These days, when I work with social entrepreneurs, I suggest that they dump the whole “elevator pitch” thing in favor of a “hallway conversation” approach that more closely approximates how human beings communicate. I’m not saying you should wing it: You can and should prepare. There are some common patterns in funder-doer interactions that, if anticipated, will lead to productive, comfortable, and authentic conversations…

Here’s the thing: If you want funders to go down the road with you, you need to make them feel: 1) smart, and 2) comfortable. Make that your mantra. Make it easy for them to grasp what you’re up to, and master your own anxiety so you don’t trigger it in them. We are talking about an encounter between good people who want the same things. A pitch turns it into an ordeal; a conversation makes it real. Choose the conversation.

He also gives some concrete suggestions about how to carry this out, it’s a helpful and illuminating read.

Mental Models and the Cobra Effect

I came across an interesting listing of some of the different tools and approaches we all use to sort out issues in life and work: Mental Models I Find Repeatedly Useful.

The list is categorised (from use by the author) via Frequently Used (62 models), Occasionally Used (40 models) and Rarely (though still repeatedly) Used (84 models).

Browsing through the list I noticed one I’d not come across before, The Cobra Effect, which is an example of an Unintended Consequence.

From Wikiwand you get these interesting stories:

The term cobra effect stems from an anecdote set at the time of British rule of colonial India. The British government was concerned about the number of venomous cobra snakes in Delhi. The government therefore offered a bounty for every dead cobra. Initially this was a successful strategy as large numbers of snakes were killed for the reward. Eventually, however, enterprising people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the wild cobra population further increased. The apparent solution for the problem made the situation even worse.

A similar incident occurred in Hanoi, Vietnam, under French colonial rule. The colonial regime created a bounty program that paid a reward for each rat killed. To obtain the bounty, people would provide the severed rat tail. Colonial officials, however, began noticing rats in Hanoi with no tails. The Vietnamese rat catchers would capture rats, lop off their tails, and then release them back into the sewers so that they could procreate and produce more rats, thereby increasing the rat catchers’ revenue. Historian Michael Vann argues that the cobra example from British India cannot be proven, but that the rats in Vietnam case can be proven, so the term could be changed to the “rat effect”.