Tim Harford's Blog, page 4

The many tragedies of ending US aid

One death is a tragedy. A million deaths is just a statistic. If Stalin ever said such a thing, he wasn’t the first — but the ghoulish claim has stuck to him because he is one of very few politicians with more than a million deaths on his conscience.

The list of government actions that deliberately or negligently led to the deaths of more than a million people is short and ugly. There are civil wars, famines and a cluster of atrocities surrounding the second world war, but not many governments have been so evil or so reckless as to pass that horrendous target.

Incredibly, there is now a case for adding the Trump administration to the list. Elon Musk boasted in early February that, “We spent the weekend feeding USAID into the wood chipper.” Musk is gone but the White House budget request for next year pencils in a cut of two-thirds to global health and humanitarian funding. Foreign aid has a mixed reputation, it is true, but that cut would plausibly cause a million deaths in the next 12 months alone.

Clearly there is a difference between murdering someone and refusing to save their life. It is one thing to kill a child by pushing them into deep water and another to let a child drown because you don’t want to get your suit wet. Where exactly the difference lies, we can leave to the philosophers. Either way, the child is dead.

The figure of a million deaths is both an estimate and a forecast. The estimate may be wrong for all the usual reasons, and it may also be wrong either because the US changes course, or because philanthropists or other official aid agencies find ways to rescue what is being lost.

Despite the caveats, a million deaths is a staggering number. It comes from Charles Kenny and Justin Sandefur, two respected researchers at the think-tank the Center for Global Development. They reckon that if the cuts to humanitarian assistance happen — from $8.8bn to $2.5bn — then 675,000 people are likely to die from HIV within a year, and 285,000 from malaria or tuberculosis.

“This estimate is based on models, and models have their weaknesses,” Kenny told me. “But we think these numbers are at the conservative end of estimates.”

The biggest contributor to this figure is the number of people projected to die from HIV, and it is not an outlandish estimate. A study published in The Lancet in March reached a similar conclusion, projecting that foreign aid cuts by the US and other donors would lead to 10.8 million extra HIV infections and 2.9 million extra deaths over the next five years. Other researchers have produced even more dramatic projections of the death toll.

Nor is there much mystery as to how these deaths might happen. Pepfar (the President’s Emergency Plan for Aids Relief, established by George W Bush) supplies antiretroviral drugs that keep 20 million people alive. The effectiveness of these drugs is well understood. They suppress the virus and prevent transmission, including from mother to baby.

The main uncertainty is whether the drugs will continue to be supplied, despite the enormous disruption that has already occurred. The US secretary of state Marco Rubio has maintained that life-saving aid is continuing, but clinics have closed, and people are finding it impossible to get the medication they need to keep them alive.

Some Americans believe that one-quarter of government spending goes on foreign aid. This is a misperception on a staggering scale. The total US foreign aid budget has been closer to 1 per cent of government spending — and the humanitarian aid budget of $8.8bn was not much more than one dollar in a thousand of everything the US government spends.

Few people in the foreign aid industry would argue every cent saves lives. Many projects do not try to save lives directly. Projects aimed at providing access to clean water, or to schooling, or to contraceptives, might indirectly save lives but they are not included in Kenny and Sandefur’s calculations. Projects often operate in challenging places. Corruption or waste are always risks. There are endless conversations in the foreign aid community about how the whole business might be reformed and made more cost-effective.

In some cases it might be desirable for national governments to find their own funding. For example, the Center for Global Development researchers estimate that nearly 200,000 South African lives are being saved each year from HIV alone, thanks to US foreign aid. That is impressive, but South Africa is not a subsistence economy. It is an upper-middle-income country. The South African government should have the capacity and the funds to supply its own antiretrovirals, and in the long term it might be better if they did.

Yet this is no way to reform anything. The cuts are so abrupt that life-saving services are falling apart before our eyes.

A few former USAID staffers have been working to salvage something from the wreckage. In response to requests from private philanthropists, the team — known as PRO (Project Resource Optimization) — has compiled a list of what they euphemistically call “critical funding opportunities”. These are high-impact projects that might need only a few hundred thousand dollars to complete, or to keep on life-support in the hope that stable funding can be found.

“We originally called ourselves the Lifeboat Project,” says Robert Rosenbaum of PRO. “And I think that metaphor holds better than any other.” A philanthropist told them to find a name that wasn’t quite so dark.

The darkness is justified. When a huge ship sinks, lifeboats can save lives, but you need enough lifeboats, and you need enough time. We have neither. Above all, the lifeboats only work if help is on the way. With the average US voter unaware just how many lives they were saving, and at just how small a cost, it is unclear whether that help will arrive.

A million deaths may be a statistic, but it is also a million tragedies. Most of these tragedies could still be prevented.

Written for and first published in the Financial Times on 26 June 2025.

Loyal readers might enjoy the book that started it all, The Undercover Economist.

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Cautionary Tales – “Captain Kirk forgot to put the machine on stun”

Lying on the cold metal table, Voyne Ray Cox knew the drill. This was his ninth round of cancer treatment – which is why he was certain that what happened next couldn’t be right. He heard a sizzling sound and saw a blue flash. And then – agony. It was like someone had thrust a hot skewer through his shoulder. He cried out in pain, but the operator was down the corridor and she couldn’t hear him. She blasted him again and again with the red-hot radiation beam.

Ray wasn’t the first patient to be burned by the Therac-25 therapy machine, and he wouldn’t be the last. Its dual-purpose design, controlled by a software programme, was supposed to offer hospitals more bang for their buck. But as patient after scorched patient suffered ulcerated skin and yawning lesions, it should have been clear that something was horribly wrong. Why did it take so long for anyone to put this awful puzzle together?

This episode was originally released on Pushkin+. New exclusive Pushkin+ episodes are released each month.

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Further reading

Nancy G. Leveson and Clark S Turner “An Investigation of the Therac-25 Accidents” Computer 1993

Nancy Leveson “Medical Devices: The Therac-25” in Nancy Leveson Software: System Safety and Computers 1995.

Steven M. Casey Set Phasers On Stun

Supplementary sources include

Charles Huff “Therac-25 Case Narrative” Online Ethics Center 2003 and Adam Fabio “Killed By a Machine” Hackaday 26 October 2015

Helen Nissenbaum. 1994. Computing and accountability. Commun. ACM 37, 1 (Jan. 1994), 72–80.

“Lethal Doses Radiation That Kills” The Plain Dealer, Cleveland 16 December 1992

James Reason Human Error

And

Tom Standage 1843 Magazine “What we can learn from the world’s first computer bug” 1843 Magazine 4th Sep 2019

Notes on the resistant reader

Smoking kills. A few people had suspected as much before the second world war, but it was not until 1950 that the scientific evidence began to accumulate that smokers were at dramatically higher risk of lung cancer than non-smokers. Other health risks of smoking would be identified over the years that followed.

Pity the poor smoker. Addicted to a popular product that had seemed harmless, he was now being told that his habit was killing him. (It often was a he, although cigarette companies had also marketed cigarettes to women with the feminist slogan, “torches of freedom”.)

What to do? An editorial in the British Medical Journal captured one solution. “It is said that the reader of an American magazine was so disturbed by an article on the subject of smoking and cancer that he decided to give up reading.”

It’s hard to think of a pithier example of what psychologists call the biased assimilation of information. Biased assimilation refers to the various ways in which we avoid unwelcome facts and seek out information that bolsters our own views. The most obvious example — obvious because it is a fairly novel development and because the mechanics of selecting information are so transparent — is the way we follow like-minded people on social media. But people have long sought out news sources that bolster their particular views of the world, as anyone who has ever had a newspaper round and surveyed the contrasting front pages can attest.

There are plenty of more insidious ways in which we absorb some information sources and miss others. Some of them are hidden and algorithmic. Even if you take care to follow commentators or news sources across the political spectrum, social media companies will show you more of what seems to hold your attention. If you are on the centre-right and share a lot of centre-right articles with your friends, soon enough you will stop seeing much stuff from leftwing columnists, no matter how many of them you think you are following.

Less obvious still are our own mental algorithms, which have been subtly skewing our view of the world for far longer than the internet has existed. Two people with contrasting preconceptions about the world can look at the same information but perceive it very differently. Imagine that you happen to encounter a newspaper article discussing what we know about the effects of the death penalty, including a study by researchers Palmer and Crandall. You are told that these scholars found pairs of neighbouring states with different capital punishment laws, and compared the murder rates in each pair. In eight of the 10 pairs, murder rates were higher in the state with capital punishment. This research suggests that the death penalty does not act as a deterrent.

What to think of Palmer and Crandall’s research? Does it seem plausible? If you’re opposed to the death penalty, then it probably does. But if you’re in favour of capital punishment, then you might quickly notice the potential for sloppy errors. Was this research peer reviewed and professionally conducted? Did Palmer and Crandall consider alternative explanations for the pattern they spotted? Should we really buy the idea of paired comparisons between adjacent states? In short, do Palmer and Crandall really know what they’re doing, or are they hacks?

Do not fear that you might offend Palmer and Crandall. They are fictional. They were dreamt up in the late 1970s by three psychologists, Charles Lord, Lee Ross and Mark Lepper. Lord and his colleagues recruited experimental subjects with strong views about the death penalty and showed them summaries of two imaginary studies.

One of these made-up studies demonstrated that the death penalty deterred serious crime. The other, by the fictitious researchers Palmer and Crandall, showed the opposite. As one might expect, the experimental subjects were inclined to dismiss studies that contradicted their firmly held beliefs. This is biased assimilation in action, not at the level of picking which researcher to follow or which newspaper to read, but at the level of picking which information to accept or to reject.

Lord and his collaborators also discovered something more surprising. In some cases, their opinionated experimental participants were shown brief research summaries. In other cases, they were given more detail about research methods, supplemented with graphs and commentary by other fictional academics. The more detail people saw, the easier they found it to reject the unwelcome evidence. Each new detail was an opportunity to dismiss the whole thing.

We are well used to worrying about people consuming a skewed information diet, shorn of context, detail and balance. We imagine that a balanced, detailed news diet would be better. The study by Lord and his colleagues suggests it would not be as helpful as we might hope — not in the face of a committed believer.

That believer is likely to systematically reject contradictory evidence, meaning that as the balanced evidence pours in, the evidence they actually read, accept and remember piles up only on one side. Loading up both sides of the cognitive weighing scale with equal weights is not going to produce balance if the weights keep accumulating on one side and bouncing out of the other.

We shouldn’t overgeneralise from one study, particularly as Lord, Ross and Lepper deliberately recruited experimental participants who were passionately committed to a point of view. For most people, on most issues, a balanced diet of information is likely to be a healthy one.

Yet that underscores the original point: what we believe about the world depends on which ideas we are open-minded enough to entertain. Providing all the detail and balance in the world is useless when you are faced with a reader or viewer who greets all of it with a selective memory and a lopsided scepticism. A curious and open-minded media ecosystem is undoubtedly important, but so too are curious and open-minded citizens.

Written for and first published in the Financial Times on 20 June 2025.

Loyal readers might enjoy How To Make The World Add Up.

“Nobody makes the statistics of everyday life more fascinating and enjoyable than Tim Harford.”- Bill Bryson

“This entertaining, engrossing book about the power of numbers, logic and genuine curiosity”- Maria Konnikova

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Cautionary Tales – “I get in trouble when I say things like this”… Michael Lewis on Sam Bankman-Fried

Acclaimed author Michael Lewis discusses his time with Sam Bankman-Fried and why he thinks both high finance and Effective Altruism shaped the ‘Crypto King’s’ worldview, ultimately landing him in jail. Plus, we hear about the people fighting terrorism, cave-ins and brain-eating amoeba from Michael’s new book Who Is Government?.

Michael Lewis’s book about Sam Bankman-Fried is Going Infinite: The Rise and Fall of a New Tycoon.

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Taco, the trade that ate itself

Does he always chicken out, or doesn’t he? Like all loyal listeners to the FT’s Unhedged podcast, I’ve been telling my friends about Rob Armstrong’s perfect new acronym: Taco — Trump Always Chickens Out. From this observation, the Taco trade logically follows: whenever President Trump announces something that causes markets to swoon, buy during the fainting spell and wait for the clucking sound to emerge from the White House. Deservedly, the Taco trade has gone viral.

It all makes sense until you start to pull on the loose end of the logical thread. Why did Trump chicken out? Because the markets panicked when he announced a dramatic act of self-harm. But the fact that the markets were so alarmed in early April suggests that they weren’t really swallowing the Taco hypothesis.

Then came May; US equity markets had a great month despite the prospect of Trump’s 90-day “pause” expiring soon, the random imposition of further tariffs and the unsettling new prospect that Congress planned to give the administration powers to levy taxes on selected foreign investors at will. Perhaps the markets had finally digested the truth about Taco?

Which raises the possibility that the Taco trade will eat itself. (We are indebted to the FT’s markets guru Katie Martin for that phrase.) The markets could become overconfident, taking Trump neither literally nor seriously. The next time he announces that he is invading Switzerland, imposing tariffs on all exports from New York State or deporting to Peru every pygmy hippo he can find, traders and analysts will shrug, send each other Taco memes and ignore him.

Then the next step: the horrifying realisation that since the market has not blinked, Trump is not actually planning to chicken out. The step after that? The market will belatedly plunge, Trump will belatedly chicken out and the pygmy hippos will be saved — until the next time.

If that isn’t enough to send you into a spin, consider this: perhaps Trump’s pride will be so wounded by all the Taco talk that he will stop chickening out altogether.

This spiralling chain reaction may all seem like an Escher fever-dream, but the underlying point is simple and could come from a Greek tragedy: when you try to predict the future, you risk changing it. Some prophecies are self-fulfilling. Some prophecies are self-defeating. Any prophecy worthy of the name is going to interact with itself, one way or another.

This effect is at work in any financial market, in which the more efficient the market is at spotting overpriced assets to sell and underpriced assets to buy, the fewer mispriced assets there will be. Everyone who successfully spots a bargain contributes to that bargain vanishing. The same dynamic is at play any time you try to decide which line to join at a supermarket or at passport control: once everyone has rushed to join the shortest line, it is no longer the shortest.

But there are many other ways in which people change the future by trying to predict it. One notorious example from the history of computing is the “Osborne Effect”, named, perhaps unfairly, after the shortlived Osborne Computer Corporation. In the early 1980s, Osborne made an early and enormously covetable portable computer, but went bankrupt after prematurely announcing that new and better models were on the horizon. Demand for Osborne’s inventory is said to have collapsed because customers were waiting for the improved product to arrive.

Whether or not that was really Osborne Computer’s problem is something we can leave to the business historians. The point is that credible pre-announcements can make or break the current offering, depending on whether the prospect on the horizon is a substitute for what is now on sale (as with Osborne) or a complement for the current product, such as games for a console.

An even more infamous example is the Y2K affair. As the year 2000 approached, people started to worry about the risk of computers malfunctioning because old software used only two digits to record dates, and would confuse the year 2000 with the year 1900.

There were indeed some system failures. Some were minor but eye-catching, such as the failure of radiation monitoring systems at two Japanese nuclear power stations. Others were tragic, such as women in Sheffield terminating pregnancies after wrongly being told their babies were at high risk of Down’s syndrome. True to the theme of this column, other problems were caused not by the Y2K date change itself, but by botched software updates aimed at preventing trouble.

It is fair to say that there were no catastrophes as a result of the Y2K issue, which led some commentators to declare that the whole thing had been a foolish scare story designed to sell newspapers and expensive IT consulting contracts. Others argued that the absence of major disruption should be viewed as a triumph of preventive prophecy.

This is the preparedness paradox: the better you prepare for a problem, the more it seems that you were being silly because there was never a serious problem in the first place. From pandemic surveillance to nuclear deterrence, it can be hard to distinguish a far-sighted policy from a foolish waste.

Consider vaccination. Successful vaccination campaigns make common illnesses seem rare — giving credence to those who suggest vaccination is a needless risk. Global agreements to restrict CFC gases have helped the ozone hole to heal — and now, of course, there are people on social media asking why everyone lost their minds about an environmental problem that was so fleeting. While we’re on the subject, why do they waste all that money having guards at Fort Knox anyway? Everyone knows that place has never been robbed.

Even setting aside bad logic and bad faith, it is not easy to think clearly about the future. Serious forecasts, the ones that aim to be more than snack food for the mind, aim to change our understanding and therefore our actions. If they change our actions, they are changing the very future they hope to describe.

Written for and first published in the Financial Times on 13 June 2025.

Loyal readers might enjoy How To Make The World Add Up.

“Nobody makes the statistics of everyday life more fascinating and enjoyable than Tim Harford.”- Bill Bryson

“This entertaining, engrossing book about the power of numbers, logic and genuine curiosity”- Maria Konnikova

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 – The Angels, The Stones, and The Dead

This episode is released exclusively on Pushkin+. Episodes are released on the main feed each Friday.

In the final days of the Sixties, The Rolling Stones join forces with other rock legends to plan a free concert at Altamont that will rival Woodstock.The “bad boys of rock” don’t have the best relationship with the police, so they think of another option for security: The Hells Angels. They’re both anti-establishment, they’re both counterculture: what could possibly go wrong? 

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Further reading

Altamont: The Rolling Stones, the Hells Angels, and the Inside Story of Rock’s Darkest Day by Joel Selvin

LIFE Rides With Hells Angels, 1965

A Long Strange Trip, Dennis McNally

Hell’s Angels, Hunter s Thompson

Keith Richards on Keith Richards, ed Sean Egan

Keith Richards, Victor Bockris 

Life, Keith Richards 

Mick Jagger, Philip Norman

Stone Alone, Bill Wyman

Old Gods Almost Dead, Stephen Davis

Don’t look back: The story of Altamont, the rock festival that the ’60s wants to forget. Geoff Edgers, Washington Post 21 Nov, 2019

The Rolling Stones Disaster at Altamont: Let It Bleed. Rolling Stone January 21, 1970

The long strange saga of the Grateful Dead and the Hells Angels. SF Gate, June 2022. 

Tappin, B., Van Der Leer, L., & McKay, R. (2017). The heart trumps the head: Desirability bias in political belief revision. Journal of Experimental Psychology: General, 146(8), 1143-1149. https://doi.org/10.1037/xge0000298

Cautionary Tales – Grand Theft Automated: How To Save A Trillion Lives

A radical thought experiment transforms the lives of a new breed of philanthropists, as they follow the logic of altruism to extraordinary lengths. The most famous convert to the Effective Altruism movement, Sam Bankman-Fried, is either a humanitarian hero, or a con artist at an astonishing scale, or most bafflingly, both.   

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Further reading

The definitive account of Sam Bankman-Fried’s astonishing career arc is Michael Lewis’s book Going Infinite: The Rise and Fall of a New Tycoon. This episode also relied on sources including Gideon Lewis-Kraus’s profile of Will MacAskill in The New Yorker, The Reluctant Prophet of Effective Altruism, and contemporary reporting in outlets including Rolling Stone, Vox, the BBC and CNBC. Will MacAskill’s book is called What We Owe The Future, and Peter Singer’s essay is Famine, Affluence and Morality. 

Why is modern commerce corrosive?

You’re not imagining it. There is something shallow about modern life — a sense that traditional virtues, from craftsmanship to professionalism to loyalty, have somehow been hollowed out. Don’t get me wrong: I love living in the 21st century and believe that the world is a far better place in 2025 than it was in, say, 1975.

Still, there is something amiss. You can see it in long-term trends such as the demise of communities built around fishing, mining or manufacture, and in more recent calamities such as the internet’s descent into a hellscape of fraud, manufactured anxiety and AI slop. You can see it in serious matters such as the sewage flowing into the Thames, the decay of high streets or the precarity of many modern jobs. You can see it in more trivial worries such as the way each new casual dining concept so quickly goes downhill. You can see it in the fact that every single one of these social ills is intimately connected to commerce.

There is no shortage of books to consult on the matter. This hollowing out has been explored in works as varied as Sherry Turkle’s Alone Together, Barbara Ehrenreich’s Nickel and Dimed, JD Vance’s Hillbilly Elegy, Robert Putnam’s Bowling Alone and Cory Doctorow’s forthcoming Enshittification.

But for the deep analysis, turn to the philosopher Alasdair MacIntyre’s After Virtue, published in 1981. MacIntyre articulated an utter disenchantment with three centuries of moral philosophy all the way back to the Enlightenment, and argued that it was hardly a surprise that modern society itself lost its way. He argued that clear thinking and virtuous action couldn’t be unmoored from a social context — it had to be embedded in a community with shared values, goals and practices. His fellow philosophers found the book impossible to ignore.

MacIntyre died in May at the age of 96, which prompted me to turn back to a piece of his writing (in the 1994 essay “A Partial Response To My Critics”) that has stuck with me for decades: the tale of two fishing crews.

One crew is “organised and understood as a purely technical and economic means to a productive end, whose aim is only or overridingly to satisfy as profitably as possible some market’s demand for fish”. The crew members are motivated to work hard, innovate and hone their skills, because that way lies profit. The other crew has developed “an understanding of and devotion to excellence in fishing and to excellence in playing one’s part as a member of such a crew”. This excellence is about skill, to be sure — but also about character, social bonds and courage. These fishermen are risking their lives and are dependent on each other. And, adds MacIntyre, “when someone dies at sea, fellow crew members, their families and the rest of the fishing community will share a common affliction and common responsibilities”.

The values of this second crew are what we seem to be losing when a private equity group “rolls up” hundreds of small independent vets; or when an old-fashioned private partnership such as Lehman Brothers becomes a publicly traded company; or when a business embraces a mission statement that could equally describe the aim of any other business.

Try this: “Our objective is to maximise value for our shareholders by focusing on businesses where we have market leadership, a technological edge and a world competitive cost base”. Any guess as to the industry? It could be anything, so it means nothing.

I was introduced to MacIntyre’s ideas not by my philosophy tutors, but by the economist John Kay. In The Truth About Markets (2003), Kay quotes MacIntyre’s description of the fishing crews, and then asks a question: which crew would make more money?

MacIntyre assumed the answer was depressingly self-evident: the profit-maximising crew will be an unstoppable force, which is why modern commerce is so corrosive. Organisations that offer the riches of friendship, community, loyalty, craft and professionalism are sure to be driven out of business by the relentless economic logic of the profit-maximiser. They make money, and destroy what really matters.

But do they really make money? Kay argues that narrow profit-maximising is often a failure, even by its own denuded standards.

A 1972 Harvard Business School case study examines a real-world example of MacIntyre’s profit-maximising fishing crew. The Prelude Corporation, the largest lobster producer in North America, aimed to become the General Motors of the fishing industry. It went bankrupt shortly after the case study was written.

Lehman Brothers is another example — was it really more successful after jettisoning the traditional structure in which the capital at risk was provided by partners who best understood the business?

A third example is the chemical giant ICI, which in 1994 published that vacuous mission statement about “market leadership”. A titan of 20th-century British manufacturing, it faded and, in 2008, was absorbed and broken up by a Dutch paint company. Perhaps ICI would have done better had they paid less attention to making money, and more attention to making chemicals.

This should not really surprise us, as Kay explains in The Corporation in the 21st Century (2024). To be solidly profitable, companies need some kind of competitive advantage. That might rest on network effects, intellectual property or even political connections. But it might equally rest on a trusted brand and well-worn habits of making the right kind of decision, quickly. In other words, profitability can rest on shared values, goals and practices too. An organisation that MacIntyre himself might admire, one that has developed the right kind of culture, may well be more attractive to customers, more appealing to potential employees and simply more effective at doing all the things a particular business in a particular industry must do.

Consider the Financial Times itself. I dare say everyone involved in the business prefers to be paid, and the FT aims to be profitable. Yet we didn’t come here with the hope of printing money; we came with the aim of printing newspapers. If the FT’s entire operation, day to day and top to bottom, was predicated on maximising profit, this would be a different newspaper. It is not obvious that it would be a more profitable one.

Written for and first published in the Financial Times on 6 June 2025.

Loyal readers might enjoy How To Make The World Add Up.

“Nobody makes the statistics of everyday life more fascinating and enjoyable than Tim Harford.”- Bill Bryson

“This entertaining, engrossing book about the power of numbers, logic and genuine curiosity”- Maria Konnikova

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 – The Man Who Solved Kindness

George Price is on a mission to prove that human kindness is real. He’s seen the latest research suggesting any altruism is ultimately selfish and finds it deeply depressing. George decides to learn the mathematics he needs to prove that research wrong, and throws his career, and life, into the quest for complete kindness.  

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Further reading

This script relied on Oren Harman’s biography of George Price, The Price of Altruism, and Ullica Segerstrale’s biography of Bill Hamilton, Nature’s Oracle, along with Hamilton’s own autobiographical recollections introducing a collection of his scientific papers, Narrow Roads of Gene Land; Steve Frank’s article in the Journal of Theoretical Biology, George Price’s Contributions to Evolutionary Genetics; and James Schwartz’s obituary of George Price, Death of an Altruist.

Can we ‘nudge’ our way to higher growth?

Can we “nudge” our way to a higher rate of economic growth? In a recent speech, David Halpern argued that we should at least try. Halpern was the founder of the Behavioural Insight Team (BIT) that was so enthusiastically championed by then UK prime minister David Cameron, so it is no surprise to find him suggesting that policymaking informed by behavioural science might raise the UK’s growth rate. But is he right?

Behavioural public policy has come to mean two distinct things. The first is a recognition that people do not necessarily conform to the simple model of human behaviour in an economic textbook. For example, workplace pensions could be set up for anyone who decides to opt in, or for everyone who decides not to opt out. The distinction seems trivial, yet in a real-world setting full of fallible real-world people, the change in the default option makes a huge difference to what people actually choose.

The second is that new policy ideas are worth testing rigorously, ideally through randomised controlled trials. There is nothing particularly “behavioural” about this idea, but such trials have tended to provide strong evidence that behavioural economics is worth taking seriously, and so the advocates of randomised trials often tend to be the same people as the advocates of using ideas from behavioural economics.

So, could more psychologically realistic, rigorously evaluated policy lead to higher economic growth? It might. The trouble is that the kind of policies in question tend to be rather small in scope. For example, a decade ago BIT ran an experiment that revealed people tended to miss fewer appointments with the NHS if they were sent timely text message reminders explaining that each missed appointment typically cost the NHS about £160.

Taking the BIT numbers at face value, such well-aimed texts could prevent more than a million missed appointments and save about £220mn a year. Nobody could object to that, but saving £220mn — about £3.25 per UK resident — is not a growth strategy.

One approach, then, is to focus on scaling up that sort of experimentation so that schools, hospitals, police and prisons endlessly keep finding improved ways to do things, delivering better results for less. Discovering a new hack like those text messages would be nice. Discovering one a month would be nicer. Discover one a week, and the growth numbers might actually start to improve.

Cabinet minister Pat McFadden may have had this in mind last December when he announced a small fund to support a “test and learn culture” in government. A good idea, but not a new one. Ubiquitous, evidence-based learning and improvement is essential, but it would have been good to hear McFadden explain how his proposal would advance the “test, learn, adapt” approach advocated by the Cabinet Office back in 2012.

So far, behavioural insights and rapid experiments have been solution-producers looking for problems. If one growth strategy is to find and solve thousands of small problems, an alternative is to start with the biggest problems and ask if behavioural science can help.

In the UK, those problems include: poor skills education, especially for people not bound for university; bad infrastructure; low business investment; a long tail of unproductive firms; and burdensome planning restrictions.

A behavioural approach might offer some hope here. For example, Halpern praises the apprenticeship levy, which effectively levies a tax on businesses to fund apprenticeships, but offers a tax rebate to those that spend the money on their own training schemes.

This seems — and is — more fussy than a simple tax break for training, but is structured to take advantage of our tendency to compartmentalise money into arbitrary categories depending on how we plan to use it. The technical term for this is “mental accounting”. The quintessential example is the person who keeps one jar for rent money, a different one for food, another for savings, and a fourth for having fun. The apprenticeship levy harnessed mental accounting by suggesting to firms that they had a chunk of training money sitting in a jar, and if it wasn’t spent the government would take it. (The Treasury, says Halpern, was caught by surprise at how effective the scheme was.)

A similar approach might be used to encourage firms to invest in capital. Or, to take advantage of an old idea from Nobel laureate Paul Romer, the government could write a law allowing industries to vote for a sector-wide compulsory levy that would fund relevant R&D. The widget industry could collectively vote for a 1 per cent levy on all widget firms, which would fund research projects chosen by each firm, with fruits available to every firm in the sector.

Romer’s idea is a clever piece of economic engineering, but it also makes psychological sense: it funds the public good of innovation, while giving each firm the sense of ownership of a pot of money, and real control over where it goes.

More broadly, Halpern wants to use this idea of mental jam jars to build support for investment. Perhaps a new tax, or a cut in day-to-day spending, would seem less painful if the benefits were explicitly earmarked as investments for the future of the nation.

As for infrastructure and planning, I do not know. Maybe what is called for here is not behavioural science, but leadership.

Yet on the subject of leadership, Halpern does hint at another interesting approach: perhaps the government should be a little more upbeat? There is much more to an economy’s performance than Keynes’s “animal spirits”, but there is ample evidence to suggest that animal spirits do matter.

Businesses are more likely to invest when they feel confident, and while some of that confidence will depend on hard facts about policy and the economy, some of it is really just vibes. It would probably be good politics for Keir Starmer and his team to start sounding a bit more cheerful about the UK’s prospects. It might be good economics too.

Written for and first published in the Financial Times on 30 May 2025.

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