Tim Harford's Blog, page 32

A Warhol, a wild back story, and the price of authenticity

Andy Warhol once gave a silkscreen portrait of Marilyn Monroe to a sceptical friend. Keep it safe in a closet, said Warhol: “One day it will be worth a million dollars.” Perhaps he undersold himself, given the price recently reached by another of Warhol’s Marilyn silkscreens. “Shot Sage Blue Marilyn” is now the most expensive work of 20th-century art, having reached $195mn at an auction in New York.

The back-story of “Shot Sage Blue Marilyn” is as striking as its price. In 1964, Dorothy Podber, an artist and provocateur, came to Warhol’s studio, The Factory, pulled out a gun and fired through several of the portraits. Four years later, Warhol himself was shot and nearly killed in The Factory, which can only have added to the mystique of bullet-scarred pictures.

The portrait deserves the cliché “iconic”, but there is a much more obscure portrait that has a claim to being Warhol’s most interesting and definitive work. May I offer for your consideration “Che”, which was based on a 1967 newspaper photograph of Che Guevara’s corpse. It is in most ways a classic Warhol portrait, made using his instantly recognisable silkscreen method and exploring his usual themes of fame, death and mass production. What makes “Che” so interesting? For some time after it was created, Warhol had no idea that the picture existed.

Warhol loved to play with ideas of originality and authorship. His images of Marilyn Monroe were based on a publicity photograph taken by Eugene Kornman, converted by technicians into acetates and screens. Warhol’s assistant, Gerard Malanga, would typically place the screen and apply the Liquitex paints. Some of Warhol’s works are even “signed” using a rubber stamp of his signature. In principle, the entire process, from photograph to signature, could take place without Warhol ever touching the work. Evidently that was part of Warhol’s point.

“Why don’t you ask my assistant Gerry Malanga some questions?” he would tease journalists during interviews. “He did a lot of my paintings.”

It took a young man in love to bring this view of authorship to its logical conclusion. In the summer of 1967, Malanga left Warhol’s studio in New York with a one-way ticket to Rome. (The tale is delightfully told in Alice Sherwood’s new book Authenticity.)

Malanga was infatuated with an Italian muse, but Warhol had offered to send money if Malanga needed a ticket home. Yet when Malanga asked for the promised funds, Warhol did not reply. Malanga then decided he might as well make a Warhol-style silkscreen print of the Che photograph — a large one on canvas, and some smaller prints on paper, too.

Malanga wrote again to Warhol noting that, unless he heard otherwise, he would assume Andy was fine with this. In a follow-up, he noted that Warhol surely wouldn’t object to the pictures being sold as “Andy Warhols”.

Warhol did not reply, and before long the Che portraits were being exhibited at a commercial gallery in Rome, people were starting to suspect the truth, and Malanga was being threatened with a long prison sentence for forgery.

Malanga’s next communication was by telegram. He pleaded with Warhol to intervene: “I WILL BE IN AN ITALIAN MUNICIPAL PRISON WITHOUT BAIL . . . PLEASE HELP ME! PLEASE HELP ME!”

Finally, Warhol responded. “CHE GUEVARAS ARE ORIGINALS,” he wrote. “HOWEVER MALANGA NOT AUTHORISED TO SELL CONTACT ME BY LETTER FOR ADJUSTMENTS ANDY WARHOL.”

Alice Sherwood claims this is “a significant moment in the history of art and authenticity”. I agree. Malanga’s paintings were made in the same way as many of Warhol’s most famous works, and by the same person: Gerard Malanga. The circumstances of their production suggest that they are not really Warhol paintings, yet Warhol declared they were — with a single telegram, not only turning counterfeits into the real thing, but taking ownership of them, too.

Has Sherwood described here an act of forgery? False advertising? Theft by Malanga of Warhol’s brand? Theft by Warhol of Malanga’s pictures? Conceptual art of the highest order? I shall leave that one to the philosophers — and as the Che canvas was later destroyed, the art market will not be able to express an opinion.

From an economist’s perspective, it might seem strange that Warhol’s pictures are so highly prized, given that he made so many of them. But he seems to have anticipated a very 21st-century approach to products, such as digital goods, which are cheap or free to copy: use the ubiquity of the copies as a way to build demand for a premium version.

There are the limited-edition running shoes, the signed first editions of Harry Potter and, of course, there’s the digital artist Beeple’s work “Everydays: The First 5000 Days”, which is free to anyone with an internet connection but fetched $69.3mn for an identical image accompanied by a cryptographic token asserting uniqueness. Beeple, like Malanga, seems to have out-Warholed Warhol. But since Warhol himself once said “Good business is the best art”, he would surely have approved.

Written for and first published in the Financial Times on 20 May 2022.

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The oil slick effect, or why we systematically overgeneralise

If you have colleagues, what do you think of them? Are they smart? Competent? Motivated? Open to new ideas? Good communicators? Do they work well as a team? The answer may not depend on what you think. And that fact suggests a reason why the modern world now seems so poisonously polarised.

In the 1970s, the psychologist Barry Staw gave a collaborative task to groups of strangers, inviting them to analyse some corporate data and make predictions about the company’s future earnings and sales. When the task was complete, he told each participant how well their group’s forecasts had worked out. Then he asked these individuals to evaluate the group they’d been working with.

But Staw was telling a white lie: he gave each group’s forecast a good or bad rating purely at random. There was no connection between how well the group did and how well Staw told them they’d done. Nevertheless, Staw found that when people believed their group had made an accurate forecast, they told him that they’d been working with open-minded, motivated, clear, intelligent and collegiate people.

But when they were falsely told that their group had made poor predictions, they explained to Staw that this was no surprise, as the group was narrow-minded, lazy, abstruse, foolish and mutually antagonistic.

Subsequent researchers found the same pattern, even when they repeated the experiment with well-established teams. As Phil Rosenzweig explains in his book The Halo Effect, this behaviour is not confined to colleagues. We have a systematic tendency to overgeneralise both praise and blame. Profitable companies are presumed to have superior policies and procedures across the board. This halo effect operates in reverse, too: scandal-struck politicians see their opinion poll ratings fall on every issue, from economic competence to foreign policy. Apparently we struggle to acknowledge that something can be good in some ways and bad in others, whether that thing is a president, a corporation or our own teammates.

The reverse halo effect is sometimes called the “devil effect” or the “horn effect”. Neither term has quite caught on. So let me offer another: the oil slick effect. Disagreements, like oil slicks, seem to spread much further and more ruinously than we would think. It’s not possible for somebody simply to be wrong about something; they must be wrong about everything, and wicked, too. The oil slick covers everything and ruins everything.

I can’t help but wonder if this oil slick effect is worse than it used to be. Consider the following data, reported in Ezra Klein’s book Why We’re Polarized: in 1960, when Americans who supported the Republicans or the Democrats were asked whether they would object to their son or daughter marrying across party political lines, very few were perturbed: 5 per cent of Republicans and 4 per cent of Democrats.

When the same question was asked 50 years later, opposition to inter-party marriage had risen almost tenfold, to 49 per cent of Republicans and 33 per cent of Democrats. Politics moved from the kind of thing sensible people could agree to ignore, to an all-consuming Sharks and Jets-style vendetta in which to cross the political divide is an unforgivable betrayal. The oil slick spread from the political to the personal.

This might be understandable if the policy stakes had risen, but the evidence suggests that policy itself is almost irrelevant. Republicans in the US used to be free-traders; in the UK, the Conservatives used to be pro-business. Most of their voters do not seem to object to large shifts in their policy platforms – their loyalty is to something else.

The halo effect is not new. It was first named and identified by the psychologist Edward Thorndike over a century ago. Why might it have become more acute? One clue comes from a study conducted a decade ago by three social psychologists, Angela Bahns, Kate Pickett and Christian Crandall. They studied friendship groups on small and large university campuses. Large campuses seemed more diverse on the surface but, with a wider choice of possible friends, students clustered in like-minded cliques. On smaller campuses, with less choice, they were forced to forge friendships across potentially awkward differences in attitudes to politics, religion, sex and lifestyle choices such as exercise and smoking.

Perhaps the modern world is more and more like the big campus – full of a huge diversity of views, and yet offering us every option to associate with people just like us. This is most obvious in social media, where by design we self-silo, but we can also select our own podcasts and politically sympathetic TV channels.

As Bill Bishop argued in his book The Big Sort, we are even clustering into socially homogeneous neighbourhoods. The world is a wider, more diverse place, and that means our choices of who we deign to read, watch or even have a drink with may be narrowing. The halo effect has long been a feature of our psychology, and there has always been a temptation to let the oil slick poison our thinking. That toxic temptation used to leave a person isolated, with nobody available to live up to their standards of purity. Today, the oil slick can spread freely.

Written for and first published in the Financial Times on 13 May 2022.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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Cautionary Tales – Frankenstein Versus the Volcano

When Mount Tambora erupted it spewed ash across the globe; blotting out the sun; poisoning crops; and bringing starvation, illness and death to millions. It may also have helped inspire great scientific and cultural advances – including the horror masterpiece Frankenstein. How well do we adapt to catastrophe and what are the limits of our ability to weather even the worst circumstances?

Cautionary Tales is written by me, Tim Harford, with Andrew Wright. It is produced by Ryan Dilley, with support from Courtney Guarino and Emily Vaughn.

The sound design and original music is the work of Pascal Wyse. Julia Barton edited the scripts.

Thanks to the team at Pushkin Industries, including Mia Lobel, Jacob Weisberg, Heather Fain, Jon Schnaars, Carly Migliori, Eric Sandler, Emily Rostek, Royston Beserve, Maggie Taylor, Nicole Morana, Daniella Lakhan and Maya Koenig.

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Further reading and listening

Wolfgang Behringer “Tambora and the Year without a Summer“

Gillian D’Arcy Wood “Tambora: The Eruption That Shook The World“

William and Nicholas Klingaman “The Year without Summer“

Robert Evans “Blast from the Past” Smithsonian Magazine July 2002

Jill Lepore “The Strange and Twisted Life of ‘Frankenstein’” The New Yorker 5 Feb 2018

Mary Shelley, Frankenstein and the Villa Diodati

In our Time: The Year Without A Summer

Mick Hamer “Brimstone and bicycles” New Scientist 26 January 2005

Michele Acuto, Shaun Larcom, Ferdinand Rauch and Tim Willems “Calamity Is an excellent teacher”

Bruce Sacerdote “When the Saints Go Marching Out“

Deryugina, Kawano and Levitt “The Economic Impact of Hurricane Katrina on its Victims“

Emi Nakamura et al “The Gift of Moving“

Has “Nudge” tempted us away from systemic solutions?

The bestselling 2008 book Nudge, by Richard Thaler and Cass Sunstein, helped inspire experimentally tested, psychologically informed policy work around the world, often developed by “behavioural insight teams” in or adjacent to government. Now two leading behavioural scientists, Nick Chater and George Loewenstein, have published an academic working paper suggesting that the movement has lost its way. Professors Chater and Loewenstein are academic advisers to the UK’s behavioural insight group, and blame themselves as much as anyone else for what they now see as mistakes. It’s worth paying attention to what they say.

But first, ponder an advertising campaign from 1971 titled “Crying Indian”. This powerful TV commercial depicts a Native American man paddling down a river that is increasingly laden with trash.

“Some people have a deep, abiding respect for the natural beauty that was once this country,” says a voiceover. “And some people don’t. People start pollution. People can stop it.”

The Native American man turns to the camera, a single tear rolling down his cheek. But the message was not what it seemed (and not just because the actor’s parents were in fact Italian): it was funded by some of the leading companies in food and drink packaging. The advert placed responsibility squarely on the shoulders of individuals making selfish choices. It wasn’t governments who didn’t provide bins, or manufacturers who made unrecyclable products. No, the problem was you.

Chater and Loewenstein argue that behavioural scientists naturally fall into the habit of seeing problems in the same way. Why don’t people have enough retirement savings? Because they are impatient and find it hard to save rather than spend. Why are so many greenhouse gases being emitted? Because it’s complex and tedious to switch to a green electricity tariff. If your problem is basically that fallible individuals are making bad choices, behavioural science is an excellent solution. If, however, the real problem is not individual but systemic, then nudges are at best limited, and at worst, a harmful diversion.

Historians such as Finis Dunaway now argue that the Crying Indian campaign was a deliberate attempt by corporate interests to change the subject. Is behavioural public policy, accidentally or deliberately, a similar distraction?

A look at climate change policy suggests it might be. Behavioural scientists themselves are clear enough that nudging is no real substitute for a carbon price — Thaler and Sunstein say as much in Nudge. Politicians, by contrast, have preferred to bypass the carbon price and move straight to the pain-free nudging. Nudge enthusiast David Cameron, in a speech given shortly before he became prime minister, declared that “the best way to get someone to cut their electricity bill” was to cleverly reformat the bill itself.

This is politics as the art of avoiding difficult decisions. No behavioural scientist would suggest that it was close to sufficient. Yet they must be careful not to become enablers of the One Weird Trick approach to making policy.

Behavioural science has a laudable focus on rigorous evidence, yet even this can backfire. It is much easier to produce a quick randomised trial of bill reformatting than it is to evaluate anything systemic. These small quick wins are only worth having if they lead us towards, rather than away from, more difficult victories.

Another problem is that empirically tested, behaviourally rigorous bad policy can be bad policy nonetheless. For example, it has become fashionable to argue that people should be placed on an organ donor registry by default, because this dramatically expands the number of people registered as donors. But, as Thaler and Sunstein themselves keep having to explain, this is a bad idea. Most organ donation happens only after consultation with a grieving family — and default-bloated donor registries do not help families work out what their loved one might have wanted.

Behavioural science is a great way of finding small tweaks that can make a substantial difference to behaviour. Such tweaks help if the behaviour change itself solves a problem, but that cannot be taken for granted. It is easy to take a perfectly sound behavioural insight and turn it into a botched piece of policy.

The most successful behavioural public policy has been auto-enrolment into retirement savings plans, which in the UK has dramatically boosted participation in workplace pensions. In the hotel and restaurant business, participation is up from 5 per cent in 2012 to over 50 per cent last year. This is a triumph. Yet huge problems remain in the pension system as a whole. Pension participation among the self-employed has collapsed over the past quarter century. Pensions are a clear demonstration of the strengths of behavioural policy — and also of its weaknesses.

“We have been unwitting accomplices,” write Chater and Loewenstein, “to forces opposed to helping create a better society.” That is too harsh on themselves and other behavioural scientists. Would we really have excellent universal pensions, a fit and healthy population, and a low-carbon economy, if only we hadn’t been distracted by Nudge? Of course not. But behavioural science is all too good at producing perfect icing for the policy cake; practitioners must never forget the cake itself.

Written for and first published in the Financial Times on 6 May 2022.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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The billable hour is a trap into which more and more of us are falling

It will take about three minutes to read this column. Whether it’s worth three minutes depends on me, of course. I will do my best. But it also depends on you, on your attitude to time and, perhaps, on your profession.

Twenty years ago, M Cathleen Kaveny, a professor of law and theology, began an article with the observation that “Many lawyers are very unhappy, particularly lawyers who work in big firms. They may be rich, and getting even richer, but they are also miserable, or so they say.” Was this sad state of affairs caused by long hours or stressful work? Perhaps.

But Kaveny identified a more specific culprit: the “billable hour” — or even more precisely, the billable six-minute increment. By accounting for every moment of their working lives, and defining each moment as either “billable” or, regrettably, “non-billable”, lawyers were being tugged inexorably towards an unhappy, unhealthy attitude to the way they spent their time. Not all lawyers, of course. And not only lawyers, either.

Kaveny had several concerns. She noted that lawyers would focus on narrow short-term goals rather than broader or deeper values such as maintaining skills, mentoring young colleagues, or living up to the highest ideals of the law. She worried about the explicit commodification of time.

But perhaps more relevant today than ever is that the billable hour encourages us to view all time as fungible. If time is money, that’s as true for 6am on Christmas morning as it is for 2pm on Friday the 29th of April.

“No time is inherently sacred or even special,” writes Kaveny. If you bill £1,000 an hour, as some senior lawyers do, then any particular six-minute increment of time is available to be turned into £100. Can you really afford an hour in the gym? Can you really afford to call your mother or read a bedtime story to your child? The point is not that lawyers never call their mothers. It’s that the whole framework of the billable hour makes it feel naggingly expensive to do anything non-billable.

As Oliver Burkeman laments in his excellent book Four Thousand Weeks, the logical conclusion is that “an hour not sold is automatically an hour wasted”. If lawyers are trained to think of time in billable six-minute increments, what about other professions?

Compare the lawyer with, say, a dairy farmer. The dairy farmer works long and gruelling hours, and, typically, for far less money than the lawyer. But a large difference between the two jobs is that time isn’t fungible in the same way. The cows need to be milked when they need to be milked. And having milked them before breakfast, there is no temptation to milk them again after breakfast.

These long, non-negotiable hours can’t be easy and, just as a lawyer may be disturbed by a late-night call from a client, a dairy farmer may have to rise after midnight to help a cow in labour. But I don’t think I’m over-romanticising to suggest that just as there is something psychologically corrosive about the fact that the lawyer can always bill another six minutes, there is something psychologically healthy about the fact that the farmer can sometimes rest assured that there is nothing useful to be done until the morning.

I don’t mean to moralise, merely to observe that there is a distinction here that goes beyond earnings or hours. These different vocations have a different attitude to time baked into them. So do others. We journalists, for example, tend to think in terms of deadlines. When I was starting out, a friend advised that the secret to journalism was “usable copy, on time”. That gets to the heart of things: journalists want to deliver agenda-setting interviews, earth-shaking scoops and tear-jerking prose, but the deadline is absolute. Everything else must strain to fit.

Deadline stress is acute rather than chronic, and so many people (myself included) find it stimulating, satisfying and healthy. Whether you’ve played a blinder or muddled through, you can file your copy and start with a clean slate in the morning. This is not such a bad attitude to work, but it runs against the grain of some careers, and with the grain of journalism.

While a journalist might watch a deadline approaching with a burst of adrenaline-fuelled productivity, for someone working fixed hours, the ticking of the clock towards 5pm might mark slow and tedious minutes that must be endured.

It is tempting to offer some typology of different professions and their attitudes to time. Yet I suspect the types are beginning to blur. In 1992, the economist Peter Sassone coined the phrase “the law of diminishing specialisation”. Thirty years later, it is astonishing how much knowledge work is handled using the same tools and workflow — a workflow that increasingly involves no fixed hours and no fixed location. We are all, like the lawyers, able to do a little bit of extra work before bedtime, even if not all of us can charge £1,000 an hour for it.

And while the “billable hour” can be a psychological trap, it does teach us one valuable lesson: there is a distinction between working and not working. It’s a distinction worth sustaining.

Written for and first published in the Financial Times on 29 April 2022.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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Cautionary Tales – Bless the Coal-black Hearts of the Broadway Critics

When Billy Joel agreed to let dance legend Twyla Tharp turn his songs into a Broadway musical it seemed like a surefire hit. But in previews, Movin’ Out was panned by the critics. It was soon headed for Broadway and was set to be an expensive and embarrassing failure.So how could Twyla turn things around and avert disaster before opening night?

Cautionary Tales is written by me, Tim Harford, with Andrew Wright. It is produced by Ryan Dilley, with support from Courtney Guarino and Emily Vaughn.

The sound design and original music is the work of Pascal Wyse. Julia Barton edited the scripts.

Thanks to the team at Pushkin Industries, including Mia Lobel, Jacob Weisberg, Heather Fain, Jon Schnaars, Carly Migliori, Eric Sandler, Emily Rostek, Royston Beserve, Maggie Taylor, Nicole Morana, Daniella Lakhan and Maya Koenig.

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Further reading and listening

I first heard about this story from Twyla Tharp herself, in her brilliant book The Creative Habit. Other sources include reporting from the Patriot-News, Newsweek, Newsday, the Chicago Sun-Times, the Chicago Tribune, the New York Pulse and the New York Times.

A particularly useful account is Robin Pogrebin’s “Movin’ Out Beyond Missteps“ New York Times, 12 December 2002.

A documentary film, Flight of the Gossamer Condor, is an essential source on that topic.

The fun way to predict the unpredictable

As the virus spread across the world and authorities started imposing lockdowns, problems became obvious. There was resistance to the closure of religious services, few people were keen to postpone weddings and funerals could not wait. Young singles wanted to party. Many people disliked wearing masks. And parents were tearing their hair out as schools closed.

None of this is news. But it was news in 2008, when all these events occurred inside a simulation game, Superstruct, which 10,000 people played online, imagining how they’d respond to a respiratory pandemic. The game was created by Jane McGonigal and her colleagues at the Institute for the Future in Palo Alto. A follow-up simulation, Evoke, threw in wildfires and a QAnon-style conspiracy group called “Citizen X”. That was in 2010.

In a new book titled Imaginable, McGonigal argues that games can teach us something about the future. She wouldn’t be the first person to believe that games offer important lessons about the world, as Jon Peterson attests in his meticulous history of war-games and role-playing games, Playing at the World.

Whether these lessons really are important depends on the game. Consider chess. Although superficially a war game, it is far too stylised to teach anything but the broadest ideas about military tactics. Johann Hellwig, a mathematician and entomologist, bolstered the game of chess by adding complexity. His 1780 chess variant was played on a board of up to 2,000 squares and included pieces such as the elephant, the jumping bishop, the jumping queen, 30 knights and 40 pawns.

Kriegsspiel, developed in 1824 by Georg von Reisswitz the Younger, added realistic maps and unpredictable damage to units. Then came “free Kriegsspiel”, an 1870s version that did away with much of the rule-based complexity and relied on a referee to use his judgment. These games were influential in the Prussian military as a way of teaching strategic ideas to young officers.

After the first world war, the US Naval War College went further, with full-scale simulation exercises. As Steven Johnson describes in his book Farsighted, one such exercise, 1932’s Fleet Problem XIII, clearly highlighted the vulnerability of US Pacific bases to attack from the west, nine years before the surprise assault on Pearl Harbor. “If the US military had successfully applied the lesson of Fleet Problem XIII, it is entirely possible that the Japanese attack on Pearl Harbor would have failed,” writes Johnson, “or would have never been attempted.”

The next stage of war gaming, pioneered at the Rand Corporation in the 1950s, was to move into the theatre of the mind. Rather than moving counters, players tried to see the world from the viewpoint of the antagonist. Anything could be attempted, writes Jon Peterson. “Governments might mobilise armies, spread disinformation, issue threats to peers, raise money with bonds, anything that a real government might do.” Referees would adjudicate the outcome of such “moves”, but rules were minimal because rules made assumptions about what was and was not possible, and the point was to discover new probabilities.

As the cold war strategist and Nobel laureate economist Thomas Schelling put it, open-ended games were valuable because “one thing a person cannot do, no matter how rigorous his analysis or heroic his imagination, is to draw up a list of things that would never occur to him”. Such cold war simulation games prompted important realisations — for example, that there was no simple, direct, quick, tamper-proof way for Washington and Moscow to communicate. Schelling and others agitated for such a system, but the “hotline” was introduced only in 1963, after the Cuban missile crisis showed that the need for it was acute.

There are other benefits to gaming, wrote Schelling. Games are captivating and stimulating; they help people grasp ideas more quickly and memorise them; they give permission to propose crazy-seeming plans and to see things from the enemy’s viewpoint. By their very design, such games tend to puncture groupthink. Somebody has the job of pretending to be the enemy, and will inevitably find something sneaky to attempt. The fundamental advantage seems to be in populating Schelling’s list of things that would never occur. You cannot draw up such a list, but you might play your way into it.

No game will perfectly predict the future. But, as a way of vividly exploring possible futures, they are hard to beat. Life throws stuff at us that we might not have considered. Lots of people warned us about the risk of a pandemic, but few pondered the need to conduct religious services over Zoom, the plight of working parents or that conspiracy theorists would find fertile ground for lies and delusions. People playing pandemic games saw all these possibilities quite clearly.

As a life-long gamer, I am easily persuaded of the benefits of games, but they are no panacea, even when they do predict the future. Superstruct and Evoke did not prevent pandemic policy missteps; games at Rand did not deliver a Moscow-Washington hotline until after the terrifying near-miss of the Cuban crisis. Fleet Problem XIII foretold the assault on Pearl Harbor but did not prevent it.

Still, even a little foreknowledge is worth having. And whether a game helps you imagine the future or not, it’s a lot more fun than extrapolating a curve on a graph.

Written for and first published in the Financial Times on 22 April 2022.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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 Short – A Screw Loose At 17,000ft

Cautionary Tales will be back next Friday (and every other Friday thereafter). For  Pushkin+ subscribers, I proudly present another Cautionary Tales “Short”.

Shownotes

The ideal source on Maintenance Guy and his travail’s is Matt Parker’s wonderful book Humble Pi; the official accident report (pdf) is also worth reading.

The terrifying aftermath was described in contemporary reports from the Sunday Mercury, The Daily Telegraph, The Times, The New York Times and the Financial Times.

The intangible economy is more important than you think

After two decades of digital titans hogging the limelight, the physical economy has spent the past two years reasserting itself. From the supply of toilet paper to the price of wheat, shortages of personal protective equipment in early 2020 and columns of Russian tanks in early 2022, it’s become obvious that the economy doesn’t depend on tweets and dogecoin but on the kind of honest everyday stuff you can drop on your foot. That, at least, is the new conventional wisdom. Alongside that conventional wisdom go lamentations of decline: why don’t we in the UK make anything any more? Didn’t the Chinese show us all how it was done that time they built a Covid hospital in a week?

There is some truth in this cry of despair, but also a great deal of confusion. Look more closely at the events of the past two years and the intangible economy seems more important than ever. Consider Covid. The successes and failures of the Chinese response had little to do with their ability to manufacture PPE or build a hospital in a few days. They were all about the capacity — or sometimes incapacity — to identify the virus, trace contacts and lock down population centres.

The same was true elsewhere. Shortages of oxygen or equipment were sometimes a problem but not as great a problem as the shortage of effective contact-tracing systems, testing capacity or expert medical staff. High-quality statistics were another essential asset, acting as the pandemic equivalent of radar. Without reliable statistics, we were taking hugely consequential decisions by groping in the dark. As this data improved — from the infection survey conducted by the UK’s Office for National Statistics to the RECOVERY trial that has ruled out poor treatments and identified effective ones — our responses have been far better targeted.

The most obvious success was the rapid development and production of vaccines. A vaccine programme is not purely intangible. Vaccines require vials, needles, deep freezers and complex supply chains. But the importance of intangible assets is central and absolute: no knowhow, no vaccine.

There is more to these intangible assets than the information contained in an mRNA molecule. Developing vaccines required years of earlier research. Proving they worked required rapid, large-scale clinical trials. Ensuring doses were produced quickly required risk-sharing — in particular, government commitments to buy lots of doses before it was clear they would work.

Perhaps the most underrated intangible asset in this rollout was trust. Hong Kong has suffered a catastrophic wave of Covid not because it lacks vaccines — it has plenty — but because the elderly residents who most needed the vaccine were the least likely to trust it. Two-thirds of the over-80s were unvaccinated when Hong Kong’s Omicron wave began in February.

Taken as a whole, the experience of Covid is a reminder of how essential intangible factors can be, whether it’s the expertise in the heads of medical professionals, data in spreadsheets and databases, life-saving clinical trials, the policy environment surrounding the development of vaccines, or simply trust (or mistrust) of what is being offered.

So let’s look at the war in Ukraine. Tangible physical factors are inescapable here, from boots on the ground to bullets in the bodies of unarmed civilians. Europe nervously contemplates its gas supply, while north Africa braces itself for the consequence of interruption to Ukraine’s wheat harvest: unaffordable bread. But if tangible assets were all that mattered, Vladimir Putin would already be consolidating a quick victory.

“Quantity has a quality of its own,” as Stalin never actually said. But quality has a quality of its own, too. The early success of Ukrainian resistance has been built on intangible or partially tangible advantages: better tactics, vastly more motivated troops and anti-tank weapons that incorporate some of the latest western technology. President Zelensky’s rhetorical gifts have delivered him the sympathy of western public opinion and thus of western governments. That sympathy has manifested itself most obviously in vice-like financial sanctions. Ripping the Russian central bank out of the world economy is perhaps the ultimate example of intangible warfare.

Clearly, there is much more to a flourishing society than mere stuff. In a new book, Restarting the Future: How to Fix the Intangible Economy, Jonathan Haskel and Stian Westlake argue that not only is the intangible economy more important than ever, but we have failed to reckon with that fact, and thus failed to develop the right institutions and policies. That failure goes a long way to explaining some of the disappointments of the modern world — low growth, inequality, corporate power, fragility in the face of shocks and growing concerns about inauthentic “bullshit jobs”.

“Intangibles” is a word with an expansive meaning, covering everything from the software in a Javelin missile to the soft power of a charismatic president. But that does not make the idea vacuous; it explains why fixing the intangible economy is such a subtle challenge. So the pendulum has not swung back to the physical economy as much as the conventional wisdom might have you believe. The 21st century has been the century of the intangible economy, and little has happened in the last two years to suggest otherwise.

Written for and first published in the Financial Times on 15 April 2022.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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.

Authenticity, by Alice Sherwood

I loved this book. Fast, funny start, and absolutely fizzing with interesting ideas from art, science, history, commerce, fashion and beyond. Sherwood tells a great story, but one of the things that delighted me was the sheer range of stories that I’d not encountered before.

There is, for example, a great discussion of the arms race between cuckoo-type birds and the birds who risk becoming their victims. The “host” birds produce ever more elaborately pattern eggs, while the cuckoos attempt to copy them.

Another staggering story is of the Andy Warhol paintings of Che Guavara which not only weren’t made by Warhol, but made and sold without his knowledge. Warhol’s former assistant Gerard Malanga was arrested for making them and charged with forgery. He sent a telegram to Warhol begging for help. CHE GUEVARAS ARE ORIGINALS, Warhol replied. HOWEVER MALANGA NOT AUTHORISED TO SELL. In other words, Warhol was happy to get Malanga off the hook, as long as Warhol himself received the proceeds of hte sale. “Andy’s mere word could turn a not-Warhol into a Warhol,” writes Sherwood.

There are old-school cons, discussions of “authentic” apple juice that contains no trace of apples (pear tastes more apple-y, apparently), Shakespeare as plagiarist, Ralph Lauren vs Yves St Laurent – and don’t get me started on the medieval turkeys of Lubeck.

I’ve been thinking and writing about truth and fakery for a long time, but most of the stories here were quite new to me, and all of them were fun and thought-provoking. The book is out this week, in the UK at least. Strongly recommended.

The paperback of The Data Detective was published on 1 February in the US and Canada. Title elsewhere: How To Make The World Add Up.

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.