Tim Harford's Blog, page 23

Cautionary Conversations – When the Parakeets Plundered New York

This week I speak to Ben Nadaff-Hafrey about his podcast The Last Archive, the time the US started panicking about parakeets, population control, Ursula Le Guin, and more. Enjoy!

If you want to read my essay about the wonderful Elinor Ostrom and her intellectual opposite, Garrett Hardin, it’s here (also archived here).

What the price of an ancient Roman nail teaches us about value

Fifty miles north of what is now Edinburgh and nearly 2,000 years ago, the Roman empire’s Twentieth Legion began to build a fort near the River Tay. By Roman standards, it was unremarkable, despite its 20-hectare size and earthworks several metres thick. It boasted a forge, hospital and granaries, but lacked baths and aqueducts — perhaps because it was abandoned just a few years after construction started, as the Romans began to pull out of Scotland. They left behind a curious treasure: 10 tons of nails, nearly a million of the things.

The nail hoard was discovered in 1960 in a four-metre-deep pit covered by two metres of gravel. The outer nails had rusted into a protective shell, leaving the inner nails in good condition. There were so many that archaeologists were somewhat at a loss as to what to do with them all. Many of the nails were sold off as souvenirs to help fund the excavation, some as sets of five in commemorative boxes. It seems a little disrespectful today, but as the head of the dig, Sir Ian Richmond, commented, “Even if a set were sent to every museum on earth there would still be many tons left over.”

Why had the Romans buried a million nails? The likely explanation is that the withdrawal was rushed, and they didn’t want the local Caledonians getting their hands on 10 tons of weapon-grade iron. The Romans buried the nails so deep that they would not be discovered for almost two millennia.

Later civilisations would value the skilled blacksmith’s labour in a nail even more than the raw material. As Roma Agrawal explains in her new delightful book Nuts and Bolts, early 17th-century Virginians would sometimes burn down their homes if they were planning to relocate. This was an attempt to recover the valuable nails, which could be reused after sifting the ashes. The idea that one might burn down an entire house just to reclaim the nails underlines how scarce, costly and valuable the simple-seeming technology was.

The high price of nails at the time was partly because Britain had banned the export of precious nails to its colonies. The arguments about industrial policy and national security that now rage over silicon-chip-fabrication technology were relevant to the nail-making trade four centuries ago.

That all seems strange today, when nails are so cheap that few people even think to wonder how they got that way. The economist Daniel Sichel asks that question in a research paper published a couple of years ago, drawing on data ranging from the 18th-century accounts of Greenwich Hospital to wholesale nail prices in 19th-century Philadelphia.

His headline finding is that the real price of nails was broadly unchanged through the 18th century, fell by 90 per cent between the late 1700s and mid-1900s, and has been rising ever since, partly because of the cost of raw materials, and perhaps because modern nails are more complex and customised than they used to be. And as Sichel points out, the price of “installed nails” remains incredibly cheap, thanks to the invention of the nail gun.

Why did prices fall so much after the late 1700s? One explanation comes from a foundational text of economics, Adam Smith’s The Wealth of Nations, which described the huge productivity of a then-modern pin factory, thanks to the specialisation of the manufacturing process. “One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head”. This production process was hundreds of times more efficient than one person working alone.

Whether Smith himself had really seen such a factory is now a controversial question, but the underlying point is not. The division of labour and the growing automation of the process delivered cheaper pins and, no doubt, cheaper nails too. Sichel agrees: although the falling price of nails was driven partly by cheaper iron and cheaper energy, most of the credit goes to nail manufacturers who simply found more efficient ways to turn steel into nails.

Nails themselves have changed over the years, but Sichel studied them because they haven’t changed much. Roman lamps and Roman chariots are very different from LED strips and sports cars, but Roman nails are still clearly nails. It would be absurd to try to track the changing price of sports cars since 1695, but to ask the same question of nails makes perfect sense.

As Agrawal’s book explains, there is an endless fascination in everyday objects such as springs, wheels and nails, from the physics behind them to simple practical tips. (I did not know, until I read the book, that nails often bend not because I whack them too hard but because I don’t whack them hard enough.)

I make no apology for being obsessed by a particular feature of these objects: their price. I am an economist, after all. After writing two books about the history of inventions, one thing I’ve learnt is that while it is the enchantingly sophisticated technologies that get all the hype, it’s the cheap technologies that change the world. The Gutenberg printing press transformed civilisation not by changing the nature of writing but by changing its cost — and it would have achieved little without a parallel collapse in the price of surfaces to write on, thanks to an often-overlooked technology called paper. Solar panels had a few niche uses until they became cheap; now they are transforming the global energy system.

A Roman nail and a modern nail have a similar form, but a radically different price. That alone is why one was a closely guarded treasure and the other is a disposable puncture hazard.

Written for and first published in the Financial Times on 16 June 2023.

The paperback of “The Next 50 Things That Made The Modern Economy” is now out in the UK.

“Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”- Bill Bryson

“Witty, informative and endlessly entertaining, this is popular economics at its most engaging.”- The Daily Mail

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Cautionary Tales – The Coup, the Poet and the Secret to Winning Wimbledon

“If you can make one heap of all your winnings and risk it on one turn of pitch-and-toss…“

Those words — from Rudyard Kipling’s poem “If” — were based on charismatic nineteenth century doctor Leander Starr Jameson. In Britain, Jameson was worshipped as a plucky hero: a bastion of courage and mental fortitude. Ironically, he was also responsible for the Jameson Raid, a South African coup that was an unmitigated disaster.

Jameson might have led an unparalleled fiasco — but could Kipling’s poem hold clues for triumph in another arena?

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Further reading

The author Chris Ash tells the story of Dr Jameson and his ill-fated raid in his entertaining biography The If Man. Our script also drew on the 1922 treatment The Life of Jameson in Two Volumes by Ian Colvin, Sir Graham Bower’s Secret History of the Jameson Raid and the South African Crisis, 1895-1902, and archives of contemporary newspaper reports.

Malcolm Gladwell discussed Jana Novotna’s Wimbledon final with Steffi Graf in his 2000 New Yorker article The Art of Failure. For another interpretation see Choking: The Case of Jana Novotna by sports psychologist Helen Davies. The match highlights can be viewed on The Daily Motion.

What an amusement park can teach us about central banks

To Tivoli Gardens in the heart of Copenhagen, one of the world’s oldest amusement parks. It was founded 180 years ago, and its creator George Carstensen secured the land by petitioning King Christian VIII, arguing, “When the people are amusing themselves, they do not think about politics.”

In Tivoli, I don’t think about politics either. But during the wait to ride the Demon and the Star Flyer, I can’t help but think about economics. Specifically, I think about Robert Lucas’s charming speech, “What Economists Do”. It was delivered as a commencement address in 1988, seven years before the hugely influential macroeconomist was awarded the Nobel memorial prize.

I revisited the speech when news reached me of Robert Lucas’s recent death at the age of 85.

“We are basically storytellers,” wrote Lucas, “creators of make-believe economic systems.”

To illustrate his point, he told a story about a depression in an amusement park. In Lucas’s imaginary park, people buy a wad of tickets at the entry kiosk and spend them on anything from rollercoaster rides to hotdogs. Each attraction is run as an independent business, while the ticket desk serves as a central bank.

On a slow day, the ride owners will send their workers home. Both employment (hours worked) and the number of tickets bought (call that GDP if you wish) will vary depending on school holidays, the weather and chance.

Should we call a slow Monday in March a depression? No, said Lucas. “By an economic depression, we mean something that ought not to happen, something pathological.”

So then imagine that the central bank — sorry, the ticket kiosk — decides to crack down on fun by squeezing the money supply. Instead of issuing 100 tickets for DKr100, the kiosk charges DKr100 for 80 tickets. Importantly, it doesn’t tell the businesses in the park that it has decided to make this change. Without their consent or knowledge, it has effectively raised all their prices.

What happens? Some customers grit their teeth and spend a bit more to ensure they get all the tickets they would have expected anyway. Others buy fewer tickets. Some walk away without buying any.

Inside the park, tumbleweed. There are fewer customers, and they bring sandwiches rather than buying hotdogs. They spend less on the rides and take more time to enjoy freebies such as walking around the lake. Operators who had been planning to expand in the face of long queues will now not be so sure. Other operators who had worried that their ride was going out of style see gloomy confirmation and may close permanently to cut their losses. The amusement park as a whole will lose its mojo, with physical capacity, output and employment shrinking to match a misunderstood fall in demand.

As Lucas explained, this slump “is indeed a kind of pathology. Customers are arriving, eager to spend . . . Concessionaires are ready and waiting to service them.” All the pieces are in place, but they don’t fit together because of a monetary policy mistake.

Eventually, the park should recover its equilibrium. The ride owners can ask for fewer tickets per ride; the customers will come to realise that 80 tickets will buy as much as 100 tickets did before the price change. The amusement park will be lively again. But all this will take time, and permanent harm may have been done.

Flip the story around: what if the central bank — sorry, the ticket kiosk — gets excited and hands out too many tickets instead? In effect, the kiosk has slashed all the prices without telling the concession-holders. Expecting bargains, people cram into the park. The hotdog stand runs out of hotdogs; the mustard and ketchup run dry. Park-goers spend most of their time queueing rather than rollercoasting. The businesses inside may call up extra staff, even borrow money to expand. Yet eventually they will realise the double-handfuls of tickets they’ve taken in aren’t worth as much as they expected.

These stories tell us how a central bank might engineer a recession — or cause shortages and inflation. I find them a delightful window into how economies work.

True, there are other types of recession. In my book The Undercover Economist Strikes Back, I told a true story about a recession in a prisoner-of-war camp in the 1940s, as described by one of the POWs, the economist R­­­­­­­­­­­­­­­A Radford. The camp, like the amusement park, had a simple economy. It was fuelled by the supply of packages from the Red Cross, the contents of which were then traded: the Sikh prisoners didn’t want razor blades or beef, the French were desperate for coffee, the English craved tea.

The prison-camp recession occurred, not because the money supply was constricted, but because the Red Cross parcels stopped arriving — what an economist might call an “exogenous shock”. (For a real-world example, imagine a war interrupting the supply of oil, natural gas and food. It shouldn’t be too much of a stretch to do that.)

These little stories teach us that sometimes an economy can be dragged down by a simple mistake in monetary policy, while sometimes a recession occurs because the economy has hit an implacable obstacle. One job of a good central bank is to make sure that it perceives the difference, something central bankers are puzzling over right now.

The disadvantage with such stories, admitted Lucas, “is that we are not really interested in understanding and preventing depressions in hypothetical amusement parks . . . the analogy that one person finds persuasive, his neighbour may well find ridiculous.”

So then what to do? “Keep trying to tell better and better stories . . . it is fun and interesting and, really, there is no practical alternative.”

Written for and first published in the Financial Times on 9 June 2023.

My first children’s book, The Truth Detective is now available (not US or Canada yet – sorry).

I’ve set up a storefront on Bookshop in the United States and the United Kingdom. Links to Bookshop and Amazon may generate referral fees.

Will ChatGPT be Homer Simpson’s salvation?

Imagine a person whose desire for the easy life is stronger than their sense of ethics. And imagine that this person gets hold of a cutting-edge computer app that can produce fast answers to hard questions. Then imagine that person is given a hard question. Instead of answering it himself, he taps it into the computer, then relaxes for a while. Finally he hands over the computer’s answer and takes credit for many hours of hard work, none of which he did.

This is a pretty good description of a 12-year-old schoolboy I know, who typed a homework question into ChatGPT, played on his Xbox all evening and then handed in the computer’s work to the teacher, who gave it rave reviews. “Exceptional effort,” was the teacher’s comment — which, when you think about it, is true.

It is also a good description of how at least one accountant behaved in response to one of the first digital spreadsheet programs, around 1980. As Steven Levy reported in his 1984 Wired article “A Spreadsheet Way of Knowledge”, this accountant, when he received “a rush task, sat down with his micro and his spreadsheet, finished it in an hour or two, and left it on his desk for two days. Then he Fed Ex-ed it to the client and got all sorts of accolades for working overtime.”

In its ability to generate plausible answers to a huge variety of questions, ChatGPT is unprecedented. But it has very clear precedents in other ways, from the shearing frame to the spreadsheet to the satnav. Those precedents give us some clues about what might happen next.

The first insight is that, if the technology works well enough out of the box, it can be adopted quickly. I’ve often written about how it took more than three decades for the electric motor to catch on. Before factory owners could unleash its advantages, a huge amount of rethinking, retraining and restructuring needed to take place. But not every technology requires such epic transformations. The digital spreadsheet ripped through the business world in about five years. It was simply too good and too easy to use relative to handwritten alternatives.

Second, new technologies don’t necessarily destroy jobs, even in the industries most directly affected. The Planet Money podcast reckoned that between 1980 (roughly when digital spreadsheets first started to be used commercially) and 2015, the US accounting profession lost 400,000 jobs and gained 600,000. The lost jobs were often accounting clerks, whose role was to grind arithmetic through calculators. The jobs that were gained were for more — dare we say? — creative accountants.

But it’s the third insight that most intrigues me: different technologies tilt the playing field in different directions. The spreadsheet multiplies the skills of an expert user, but the satnav is different; it is an alternative to expertise. The shearing frame turned the lives of skilled textile workers upside down because it put a difficult, highly skilled task within the reach of almost anyone. Its use was despised by Luddite rebels because, like the satnav, it made their expertise unnecessary.

The digital spreadsheet is an example of “skill-biased technological change” that helps productive people to be even more productive. For about half a century, skill-biased technological change has been the norm and an important reason why income inequality has increased over the decades. But as the satnav and the shearing frame show, some new technologies enhance the productivity of less expert workers. This will not automatically reduce inequality — the shearing frames might have helped unskilled workers a little, but mostly they profited capitalists.

So what of generative AI systems such as ChatGPT and Bard? Do they multiply the output of elite workers, or do they provide most help to those who need it? It’s far too soon to be certain, but the early evidence is intriguing. One study, by the economists Erik Brynjolfsson, Danielle Li and Lindsey Raymond, examined what happened when an AI-based conversational assistant was rolled out across a workforce of more than 5,000 customer service agents who were working for a software company. These workers would typically have long text chats with frustrated customers, trying to solve technical problems. Meanwhile, the chatbot would scan the chat and suggest possible responses for the customer service worker to make, which they could use, ignore or adapt.

Brynjolfsson and his colleagues found that the chatbots helped — workers solved very slightly more of their customers’ problems, and they did so 14 per cent more quickly. And the chatbots were not skill-biased: the best, most experienced agents experienced no benefit from the chatbot, while the least experienced and skilled workers resolved 35 per cent more queries per hour. Those inexperienced workers also learnt and improved more quickly than those without access to the chatbot.

Another study, by economists Shakked Noy and Whitney Zhang, gave people writing tasks. Half of them had access to ChatGPT, half did not. Again, it was the least skilled people who enjoyed the biggest benefits. The Homer Simpsons of the world, long sidelined by technology, might finally find an invention on their side.

I’m still unnerved by the damage the new generative AI systems might do to our already-bruised information ecosystem and the upheaval they might cause in the world of knowledge work. But I’m also encouraged by the glimmer of hope that they might — might — make the working lives of some long-marginalised people better.

Homer Simpson famously proposed a toast: “To alcohol! The cause of, and solution to, all of life’s problems.” Homers everywhere may soon feel similarly about ChatGPT.

Written for and first published in the Financial Times on 2 June 2023.

The paperback of “The Next 50 Things That Made The Modern Economy” is now out in the UK.

“Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”- Bill Bryson

“Witty, informative and endlessly entertaining, this is popular economics at its most engaging.”- The Daily Mail

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Cautionary Tales – The man who played with hurricanes

Today, the idea of controlling the weather is controversial. Scientists who research geoengineering have even received death threats. But once upon a time, people were optimistic about remaking the climate in entire regions of the world. They approached this science with a touching faith in the power of human creativity.

Absent-minded genius Irving Langmuir was one such scientist. He dreamt of making deserts bloom and conjuring rain from an arid sky. He even believed that his experiments with a hurricane had succeeded in redirecting its path.

Why did we stop trying to control the weather? And might geoengineering help us solve climate change — or have we missed our chance?

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Further reading

We were inspired to research a script on geoengineering by Elizabeth Kolbert’s book Under a White Sky, which contains her original reporting on subjects including negative emissions and solar radiation management – and which also inspired us to track down a copy of the remarkable 1960 publication Man Versus Climate. Soviet geoengineering ideas, and US openness to them, are further detailed in an article by Derek Mead in Vice.

Irving Langmuir is portrayed, in the fictionalised form of Felix Hoenikker, in Kurt Vonnegut’s classic novel Cat’s Cradle. In an interview on skcool.org, Vonnegut tells how Langmuir inspired the character.

Ginger Strand’s book The Brothers Vonnegut includes a rich account of Kurt’s and Bernard Vonnegut’s time at General Electric with Irving Langmuir. General Electric’s website also details their work together, with an image of Langmuir, Vonnegut and Vincent Schaefer inspecting their freezer. Our account of Langmuir’s work draws further on Sam Kean’s feature articles in Smithsonian magazine and The Atlantic; David Philip Miller’s article in Annals of Science; and reporting in outlets such as Time and Cosmos.

For background on how attitudes towards geoengineering are currently evolving, see Clare Roth’s piece for Deutsche Welle, Is geoengineering set to become mainstream climate policy?

What neo-Luddites get right – and wrong – about Big Tech

Say what you like about Lord Byron, he knew how to turn a phrase. Here he is, speaking in the House of Lords in 1812. His topic is the foolishness of the factory-storming, machine-breaking Luddites: “The rejected workmen, in the blindness of their ignorance, instead of rejoicing at these improvements in arts so beneficial to mankind, conceived themselves to be sacrificed to improvements in mechanism.”

The term “Luddite” is an insult today, a label you’d slap on a boomer who hasn’t figured out how podcasts work. But it would have been obvious to Byron’s contemporaries that his words dripped with sarcasm. Byron supported the Luddites. They had indeed been sacrificed on the altar of productivity improvements. There was nothing ignorant about their violent resistance.

Alongside the “Luddite” label is “the Luddite fallacy”, which refers to the belief that technological progress causes mass unemployment. We call it a fallacy because two centuries of experience have contradicted it; there have always been new jobs, and over time and on average those new jobs have been more productive and better paid than the old ones.

But Luddism, it seems, is back. A forthcoming book, Blood in the Machine, argues that “the origins of the rebellion against Big Tech” are in the Luddite uprising. And for at least a decade, pundits have been fretting about the prospect of mass unemployment.

First there was the notorious “The Future of Employment” study from Oxford academics Carl Frey and Michael Osborne in 2013, with the headline finding that 47 per cent of jobs were susceptible to automation. Then it was all the taxi and truck drivers whose jobs would be gobbled up by self-driving vehicles.

Now it’s “generative” artificial intelligence, which has struck fear into the hearts of creatives everywhere: Dall-E and Midjourney will destroy the jobs of illustrators, ChatGPT and Bard will come for the journalists and technical writers. Will our jobs really be destroyed this time? Or should we relax and look forward to another couple of centuries of productivity-driven prosperity?

I think neither view is satisfactory. Instead, what about the view that technology does not create mass unemployment, but is nevertheless quite capable of destroying livelihoods, creating unintended consequences and concentrating power in the hands of a few? (I once suggested “neo-Luddite” as a label for this view, but alas, true technophobes made that label their own long ago.)

Consider the ATM: it did not make bank tellers redundant. Instead, it freed them to cross-sell subprime mortgages. Or the digital spreadsheet, which unshackled humble accounting clerks from the need to do rows and columns of arithmetic, and allowed accountancy to become (ahem) a more creative profession. Such technologies did not destroy jobs, but remade them. Some became more fulfilling and enjoyable, others more grim and grinding.

In their new book Power and Progress, economists Daron Acemoglu and Simon Johnson argue that while technological progress can produce broad-based prosperity, there is no guarantee that this will happen quickly — and in some cases, no guarantee that it will happen at all.

“Textile factories of the early British industrial revolution generated great wealth for a few but did not raise worker incomes for almost a hundred years,” they write. Too late for the textile workers who lost good jobs.

There are starker examples, such as the ocean-going ships that enabled the transatlantic slave trade. There are subtler ones too. The barcode gave us shorter checkout queues and lower prices, but it also changed the balance of power between retailers and suppliers, between corner shops and major retailers, and eventually between bricks-and-mortar retailers and their online competitors.

Neo-Luddites can take inspiration from John Booth, a 19-year-old apprentice who joined a Luddite attack on a textile mill in April 1812. He was injured, detained and died after being allegedly tortured to give up the identity of his fellow Luddites.

Booth’s last words became a legend: “Can you keep a secret?” he whispered to the local priest, who attested that he could.

The dying Booth replied, “So can I.”

But it was Booth’s earlier words which deserve our attention. The new machinery, he argued, “might be man’s chief blessing instead of his curse if society were differently constituted”. In other words, whether new technology helps ordinary citizens depends not just on the nature of the technology but on the nature of the society in which that technology is developed and deployed.

Acemoglu and Johnson argue that broad-based flourishing is currently eluding us, just as it eluded the workers of the early industrial revolution. What’s needed? Better policies, of course: taxes and subsidies to favour the right kind of technology; smart regulations to protect the rights of workers; antitrust action to break up monopolies; all this, of course, done deftly and with a minimum of red tape and distortion. To state the task plainly is to see how hard it is likely to be.

And as Acemoglu and Johnson explain, such policies will fall on stony ground without countervailing sources of political power capable of standing up to monopolists and billionaires. Absent such conditions, Luddism resorted to what one historian called “collective bargaining by riot”, to arson and even to murder. The state fought back, and in the words of another historian, “Luddism ended on the scaffold”.

It was a shameful business, and a squandered opportunity to reform society and deliver “man’s chief blessing”, as Booth had hoped. If the latest technologies truly are transformative, we’ll have such an opportunity again. Will we do better this time?

Written for and first published in the Financial Times on 26 May 2023.

The paperback of “The Next 50 Things That Made The Modern Economy” is now out in the UK.

“Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”- Bill Bryson

“Witty, informative and endlessly entertaining, this is popular economics at its most engaging.”- The Daily Mail

I’ve set up a storefront on Bookshop in the United States and the United Kingdom – have a look and see all my recommendations; Bookshop is set up to support local independent retailers. Links to Bookshop and Amazon may generate referral fees.

When Wizz Air wrecked the immigration stats

You’d think it would be hard to miss half a million people, but the Office for National Statistics (ONS) managed it nevertheless. Realisation of this problem dawned just over a decade ago, when the results of the 2011 census were published. The census revealed that there were nearly five million foreign nationals in the country — 464,000 more than the ONS thought.

Why had nobody noticed? One school of thought blames a Hungarian entrepreneur called József Váradi. Váradi did nothing wrong, to be clear, but he did participate in a chain of events that wrongfooted the ONS. In 2003, Váradi co-founded Wizz Air, a budget airline that followed the well-established model of flying people inexpensively to smaller regional airports. Not long afterwards, Hungary, the Czech Republic, Poland and seven other countries joined the EU, giving their citizens the right to live and work anywhere in the union. Many of them decided to settle in the UK, and thanks to Wizz Air, they would often arrive at an airport such as Leeds or Luton.

This was good news for anyone looking to hire workers in the UK, but proved the undoing of the International Passenger Survey (IPS), the mainstay of immigration and emigration estimates in the UK for many years. The IPS is a bit like an opinion poll: IPS surveyors politely stop a sample of people in ports and airports and ask them if they’d be willing to answer a few questions. (Remarkably, almost everyone agrees.) These questions vary from “How much did your plane ticket cost?” to “How long are you planning to stay?” Many of the IPS questions are really about tourism, but the survey generated enough data to estimate migration into and out of the country . . . barely.

The problem, explains Georgina Sturge in her excellent book Bad Data, is that while hundreds of thousands of people are interviewed for the IPS, most of them are tourists and only a few thousand are migrants. The number from any particular country will often be tiny. It is perilous enough to extrapolate from this small sample, but what really confounds any survey is an unnoticed change that flips the sample from being fairly representative of the background population to not representative at all.

Wizz Air delivered that unnoticed change. To oversimplify a little, the IPS enumerators were standing at Heathrow, Gatwick and Manchester, while the people looking forward to making a new life in Britain were arriving at Luton.

Pro-Brexit campaigners were quick to highlight the problem, as Sturge explains. Not only could we not control immigration, they said, but we couldn’t even count it. But that’s not quite right. We could have counted it. But we decided not to.

“The choice to use a survey rather than other data is increasingly just that — a choice,” says Anna Powell-Smith, director of the Centre for Public Data, a non-profit campaigning for better data and statistics.

There are now other ways to produce migration data, or indeed most of the statistics we see around us in the news or in policy discussions. One alternative would be to require new arrivals to register, as they do in Germany, before they had access to basics such as a bank account or a doctor. There are pros and cons to this idea, but as Sturge observes, “Germany has a better grasp of its immigration statistics despite having no border control with 25 other European countries.”

The ONS has no power to introduce such a requirement, but in the wake of the pandemic it has moved from estimating migration with the smattered sampling of the IPS to using administrative data that aims to track every immigrant. This includes now-commonplace visas and information from the tax and benefit systems. (Thankfully, there are privacy protections built into the way the ONS uses this information.) The first such estimates were produced in May 2022, and the IPS is now only used to estimate the coming and going of British citizens.

There will be no more Wizz Air-induced statistical errors, says Jen Woolford, ONS’s director of population statistics, adding: “If the exact situation happened today, it would have no impact at all on the accuracy of our figures.” This is good to hear.

The point is not that we should introduce ID cards. It is that both the lawmakers in Westminster and the wonderful nerds in the Government Statistical Service are making choices about what to count, and how to count it. Those choices matter, and they could be different if our priorities were different.

As so often, we ordinary civilians notice statistical and administrative infrastructure in the same situations that we notice the sewers or the electricity supply: when something has gone wrong, or some new challenge is testing the system to destruction. The Wizz Air affair was one prominent example. The scramble to create Covid-19 testing capacity was another. The decision to destroy the arrival records of the “Windrush generation” — on the untested assumption that those records were superfluous or redundant — was a third. (It was a reminder that archivists are as taken for granted as statisticians, perhaps even more so.)

Can we do better? Undoubtedly. Nerdland contains all sorts of ideas, from better estimates of the harms from gambling, to trusted health data research environments that can prevent a privacy apocalypse while saving more lives. But to unleash those ideas we need to take data seriously. Much of the discourse about data focuses on misleading presentation rather than where the data itself comes from. It is true, of course, that dodgy labels on a graph, or a slogan on a bus, can mislead. But so can statistical work that is underpowered, underfunded and undervalued.

Written for and first published in the Financial Times on 19 May 2023.

My first children’s book, The Truth Detective is now available (not US or Canada yet – sorry).

I’ve set up a storefront on Bookshop in the United States and the United Kingdom. Links to Bookshop and Amazon may generate referral fees.

Cautionary Tales – Sonic Poison? The genesis of Havana syndrome

CIA agents in Havana complaining of mental fog, dizziness, ear pain in 2016. Children in Miami in 1974, hyperventilating and wracked with abdominal pain. A medieval outbreak of the “dancing plague”. A chorus of meowing nuns.

These mysterious events may have a single, simple explanation — one that’s often overlooked when it comes to understanding strange new syndromes.

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Further reading

Robert W. Baloh and Robert E. Bartholomew explore events in Cuba in their 2020 book Havana Syndrome: Mass Psychogenic Illness and the Real Story Behind the Embassy Mystery and Hysteria, in the context of a useful historical overview of psychogenic illness. The authors discuss events subsequent to the publication of their book in a 2022 interview in the New Humanist. We also drew on reports about Havana Syndrome in the New York Times and ProPublica.

Joel Nitzkin recounts the story of how he diagnosed children at a Florida elementary school with mass hysteria in Sandy, an article in the New Yorker by Berton Roueché published on August 14, 1978.

The Coca-Cola incident in Belgium, June 1999 is an analysis published in the journal of Food and Chemical Toxicology. Crisis management in Belgium: the case of Coca-Cola is published in Corporate Communications: An International Journal.

An outbreak of illness among schoolchildren in London: toxic poisoning not mass hysteria is an article in the Journal of Epidemiology and Community Health.

The cheese, the rats – and why some of us are poorer than others

In a laboratory in College Station, Texas, in 1990, six lab rats pressed levers and lapped at tubes as root beer and tonic water were released. They were participating in the quest for an elusive quarry: the Giffen good.

Robert Giffen was born in Lanarkshire in 1837, the year of Queen Victoria’s accession. He would become by turns assistant editor at The Economist, chief statistician at the Board of Trade, President of the Royal Statistical Society and co‑founder of the Royal Economic Society. An eminent Victorian indeed, even if one biographer sniffed, “He was one of those figures . . . whose not inconsiderable power and prestige appears to be disproportionate to their actual contribution to economic science.” Ouch.

Yet Giffen’s name is known to every economics student. This is not because of the research he published, but because of a thought experiment which reached his contemporary Alfred Marshall, who put it in his inescapable textbook Principles of Economics. The idea is that certain goods might be consumed more when their prices rise, because the increased cost backs consumers into a corner.

Here’s how I imagined it, as an impoverished student. My staple diet was jacket potatoes with cheese or tuna mayo, bought from a nearby kebab van. Imagine that the price of potatoes rose. Ordinarily, I’d be expected to buy fewer potatoes and more of something else. The problem is everything else was still more expensive than potatoes. With my budget squeezed, I couldn’t afford the luxury of the cheese and tuna topping. The missing calories would come from . . . more potatoes.

In this example, potatoes are a “Giffen good”. Potatoes were a major part of my diet; when their price rose, I effectively became poorer and switched towards the cheapest foodstuff. The cheapest foodstuff was potatoes. Of course, this did not actually happen. I was never that destitute and never such a potatophage.

For about a century, economists looked for real examples of Giffen goods and did not find them until 1990, when economists Raymond Battalio, John Kagel and Carl Kogut demonstrated Giffen behaviour in lab rats. (The lab rats, I am assured, were well looked after by Battalio’s neighbour, a vet.) The researchers offered the rats quinine-flavoured water, which the rats disliked, and root beer, which they loved. The effective prices of these drinks were changed by adjusting the volume of drink released each time the rat pressed a lever. Root beer was “expensive” because it was dispensed in smaller portions.

And sure enough, it proved possible to provoke Giffen behaviour: when the cheaper quinine water became less cheap, rats still needed a drink and they cut back on the luxury of root beer, drinking more quinine water.

So are Giffen goods little more than a theoretical curiosity? Not quite. Eventually, the economists Robert Jensen, Nolan Miller and Sangui Wang used both public health data and a field experiment to demonstrate that in the poorest parts of Hunan, China, rice was a Giffen good. As Jensen wrote in 2008, “It’s funny that people have looked in crazy places for Giffen behaviour . . . and it turns out that it could be found in the most widely consumed food in the most populous nation in the history of humanity.”

Giffen goods also teach us something important about the impact of price rises on the poorest people. One of the most basic lessons of economics is that people respond to price hikes by finding cheaper options. If apples are expensive this week, buy oranges; when the price of oranges rises and the price of apples falls, switch back to apples again. Or just look for the bargain-basement option. If a West End show is too expensive, go to the cinema. If the cinema costs too much, watch television. You don’t have to pay higher prices; you can make do with a cheaper alternative.

Inflation is always a little lower than it seems once you allow for such substitutions. But one group of people can’t play that game: those who are already relying on the cheapest staples have nowhere to run from price rises.

So it wasn’t quinine water in a Texas laboratory, or rice in Hunan, that made me think recently of Giffen goods. It was the alarming rise in the price of a cheese salad sandwich. The latest data from the UK show that sliced white bread has risen in price by 29 per cent over the past 12 months, with tomatoes up 16 per cent, butter up 30 per cent, cheddar cheese up 42 per cent and cucumber 55 per cent more expensive. (Headline inflation, meanwhile, is just over 10 per cent.)

I am not claiming that cheddar cheese is essential to life; it just seems that way. Nor is it a Giffen good. But basic foodstuffs are Giffen-adjacent. They are the last resort of people who cannot afford fancier stuff. Food poverty campaigners — most prominently Jack Monroe — have argued that the price of these basics has risen much faster than the general rate of inflation.

As I’ve written before, it’s hard to be sure if that’s true. The Office for National Statistics tends to focus on the most popular products, not the cheapest bargains, and so the relevant data is patchy and experimental.

Whether or not inflation really is higher for the poorest households, what is not in doubt is that inflation hits them hardest. That is both because they are more vulnerable, and because they have less room for manoeuvre as they ponder their options in the supermarket aisle. The Bank of England’s chief economist, Huw Pill, recently said that, “We’re all worse off.” Maybe so. But some of us are worse off than others.

Written for and first published in the Financial Times on 12 May 2023.

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