Diane Coyle

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pages: 159 words: 45,073

GDP: A Brief but Affectionate History by Diane Coyle

"Robert Solow", Asian financial crisis, Berlin Wall, big-box store, Bretton Woods, BRICs, business cycle, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, en.wikipedia.org, endogenous growth, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, hedonic treadmill, income inequality, income per capita, informal economy, Johannes Kepler, John von Neumann, Kevin Kelly, Long Term Capital Management, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, purchasing power parity, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population

GDP GDP A BRIEF BUT AFFECTIONATE HISTORY DIANE COYLE PRINCETON UNIVERSITY PRESS PRINCETON AND OXFORD Copyright © 2014 by Diane Coyle Requests for permission to reproduce material from this work should be sent to Permissions, Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TW press.princeton.edu Jacket typography by Jerome Corgier/Marlena Agency. Jacket design by Kathleen Lynch/Black Kat Design. All Rights Reserved Library of Congress Cataloging-in-Publication Data Coyle, Diane. GDP : a brief but affectionate history / Diane Coyle. pages cm. Includes bibliographical references and index. ISBN 978-0-691-15679-8 (hardcover : alk. paper) 1.

Hausman, “Valuation of New Goods under Perfect and Imperfect Competition,” NBER Working Paper no. 4970, December 1994. 12. William D. Nordhaus, “The Progress of Computing,” Department of Economics, Yale University, August 2001. 13. William J. Baumol, The Free-Market Innovation Machine (Princeton, NJ: Princeton University Press, 2002). 14. Mark Bils and Peter J. Klenow, “The Acceleration in Variety Growth,” American Economic Review 91, no. 2 (2001): 274–280. 15. Diane Coyle, The Weightless World (Oxford: Capstone, 1996). CHAPTER 5: OUR TIMES: THE GREAT CRASH 1. James Glassman and Kevin Hassett, Dow 36,000 (New York: Three Rivers Press, 1999). 2. Robert Shiller, Irrational Exuberance (Princeton, NJ: Princeton University Press, 2000). 3. See John Kay, Obliquity (London: Profile Books, 2010). 4. Kenneth Pomeranz, The Great Divergence: China, Europe, and the Making of the Modern World Economy (Princeton, NJ: Princeton University Press, 2000). 5.

Jonathan Gershuny, “Time-Use Surveys and the Measurement of National Well-Being,” Centre for Time-Use Research, Department of Sociology, University of Oxford, September 2011, http://www.ons.gov.uk/ons/rel/environmental/time-use-surveys-and-the-measurement-of-national-well-being/article-by-jonathan-gershuny/index.html. 28. Quoted in The Observer, 24 March 2013, http://www.guardian.co.uk/money/2013/mar/24/poorer-familes-deserve-childcare. Accessed 27 March 2013. 29. Michael Sandel, “What Money Can’t Buy: The Moral Limits of Markets,” Tanner Lectures on Human Values, delivered at Brasenose College, Oxford, 1998. 30. See Diane Coyle, The Economics of Enough (Princeton, NJ: Princeton University Press, 2011). 31. For details, see http://www.ons.gov.uk/ons/guide-method/user-guidance/well-being/index.html. 32. David G. Blanchflower and Andrew G. Oswald, “Is Well-being U-Shaped over the Life Cycle?” Social Science and Medicine 66, no. 8 (2008): 1733–1749. 33. William D. Nordhaus and James Tobin, “Is Growth Obsolete?” in Economic Research: Retrospect and Prospect, vol. 5, Economic Growth, ed.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, low skilled workers, means of production, megacity, meta analysis, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, telemarketer, The Future of Employment, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

“A wave of euphoria swept over Italians,” reported The New York Times, “after economists recalibrated their statistics taking into account for the first time the country’s formidable underground economy of tax evaders and illegal workers.”4 And that’s to say nothing of all the unpaid labor that doesn’t even qualify as part of the black market, from volunteering to child care to cooking, which together represents more than half of all our work. Of course, we can hire cleaners or nannies to do some of these chores, in which case they count toward the GDP, but we still do most ourselves. Adding all this unpaid work would expand the economy by anywhere from 37% (in Hungary) to 74% (in the UK).5 However, as the economist Diane Coyle notes, “generally official statistical agencies have never bothered – perhaps because it has been carried out mainly by women.”6 While we’re on the subject, only Denmark has ever attempted to quantify the value of breastfeeding in its GDP. And it’s no paltry sum: In the U.S., the potential contribution of breast milk has been estimated at an incredible $110 billion a year7 – about the size of China’s military budget.8 The GDP also does a poor job of calculating advances in knowledge.

Yale Brozen, “Automation: The Retreating Catastrophe,” Left & Right (September 1966). https://mises.org/library/automation-retreating-catastrophe 21. David Rotman, “How Technology Is Destroying Jobs,” MIT Technology Review (June 12, 2013). http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs 22. Quoted in: Brynjolfsson and McAfee, The Second Machine Age, p. 27. 23. Ian Morris, Why The West Rules – For Now (2010), p. 495. 24. Morris, Why The West Rules, p. 497. 25. Diane Coyle, GDP. A Brief but Affectionate History (2014), p. 79. 26. Frank Levy and Richard Murnane, The New Division of Labor (2004). 27. There are indications that even jobs for the highly-skilled have come under pressure since 2000, leading them to snap up the less-skilled jobs. Increasingly, employees are overqualified for their jobs. See: Paul Beaudry, David A. Green and Ben Sand, “The Great Reversal in the Demand for Skill and Cognitive Tasks,” National Bureau of Economic Research (January 2013). http://www.economics.ubc.ca/files/2013/05/pdf_paper_paul-beaudry-great-reversal.pdf 28.

Tim Webb, “Japan’s economy heads into freefall after earthquake and tsunami,” The Guardian (March 13, 2011). http://www.theguardian.com/world/2o11/mar/13/japan-economy-recession-earthquake-tsunami 2. Merijn Knibbe, “De bestedingsgevolgen van de watersnoodramp: een succesvolle ‘Keynesiaanse’ schok,” Lux et Veritas (April 1, 2013). http://www.luxetveritas.nl/blog/?p=3006 3. Frédéric Bastiat, “Ce qu’on voit et ce qu’on ne voit pas” (1850). http://bastiat.org/en/twisatwins.html 4. Quoted in: Diane Coyle, GDP. A Brief but Affectionate History (2014) p. 106. 5. OECD (2011), “Cooking and Caring, Building and Repairing: Unpaid Work around the World,” Society at a Glance 2011, p. 25. http://www.oecd-ilibrary.org/social-issues-migration-health/society-at-a-glance-2011/cooking-and-caring-building-and-repairing_soc_glance-2011-3-en Also see: Coyle, GDP, p. 109. 6. Coyle, p. 108. 7. J.P. Smith, “‘Lost milk?’


pages: 287 words: 80,050

The Wisdom of Frugality: Why Less Is More - More or Less by Emrys Westacott

Airbnb, back-to-the-land, Bertrand Russell: In Praise of Idleness, Bonfire of the Vanities, carbon footprint, clean water, Community Supported Agriculture, corporate raider, Daniel Kahneman / Amos Tversky, dark matter, Diane Coyle, discovery of DNA, Downton Abbey, dumpster diving, financial independence, full employment, greed is good, happiness index / gross national happiness, haute cuisine, hedonic treadmill, income inequality, invisible hand, Isaac Newton, loss aversion, McMansion, means of production, move fast and break things, move fast and break things, negative equity, New Urbanism, paradox of thrift, Ralph Waldo Emerson, Thales and the olive presses, Thales of Miletus, the market place, The Spirit Level, Thorstein Veblen, Upton Sinclair, Veblen good, Zipcar

But it was with the emergence of dynamic market economies (growing rapidly on the basis of an increased population), global trade, modern banking, and industrialization that the tension between the professed moral values of Christianity and the economic needs of society became seriously stretched. Today, the belief that economic growth is a good thing is a basic assumption shared by the great majority of economists, political theorists, and politicians. As economist Diane Coyle remarks, “virtually every society in the modern world has come to be focused on the achievement of economic growth.”10 This is what most people everywhere seem to want, and no mainstream politician, whether democratically elected or not, would dream of opposing this goal. Since the end of the Second World War, the single most important statistic used for measuring economic growth has been a country’s gross domestic product (GDP), which is the monetary value of all the finished goods and services produced within the country over a specified period of time.

Yet in spite of all these criticisms, reservations, and alternative indexes, GDP remains important for economists and policy makers because it is a single number that, even if it oversimplifies matters, provides some sort of basic unit with which to make comparisons between countries and over time. And the assumption that there is some correlation between GDP and general well-being isn’t fanciful; countries with the highest GDP per capita typically rank high on other positive indexes, while those with relatively low GDP per capita typically don’t. This is Diane Coyle’s view: Economic growth contributes to happiness, and GDP growth should remain a policy target. . . . There’s no doubt that in a number of ways GDP is a flawed statistic as a measure of welfare. But any replacement would be flawed too, not to mention much harder for many countries to collect and measure; at least with the familiar GDP statistics we know what we’re getting.15 The argument about the usefulness of GDP, or per capita GDP, as an indicator of individual or social well-being is really a technical debate within a larger philosophical discussion about values and goals.

People in wealthy countries (those with a relatively high per capita income) are not on the whole happier than people in less wealthy (but not impoverished) countries. And although per capita income in the United States rose steadily over three decades following World War II, individuals in the 1970s did not report being any happier than individuals in the 1940s.16 Naturally, these claims have been disputed. Diane Coyle, for instance, writes: “The new conventional wisdom about happiness and growth is mistaken. Growth does make us happier, easily seen perhaps as the mirror of the unhappiness caused by economic recession.”17 But Easterlin and others reject this argument. They agree that in the short term, economic upturns or downturns produce corresponding swings in the levels of reported happiness. But in the long term the paradox still holds, and data drawn from the last forty years continues to support the main idea.


pages: 290 words: 82,871

The Hidden Half: How the World Conceals Its Secrets by Michael Blastland

air freight, Alfred Russel Wallace, banking crisis, Bayesian statistics, Berlin Wall, central bank independence, cognitive bias, complexity theory, Deng Xiaoping, Diane Coyle, Donald Trump, epigenetics, experimental subject, full employment, George Santayana, hindsight bias, income inequality, manufacturing employment, mass incarceration, meta analysis, meta-analysis, minimum wage unemployment, nudge unit, oil shock, p-value, personalized medicine, phenotype, Ralph Waldo Emerson, random walk, randomized controlled trial, replication crisis, Richard Thaler, selection bias, the map is not the territory, the scientific method, The Wisdom of Crowds, twin studies

Praise for The Hidden Half ‘Brilliant. Blastland provides an explanation of the need for humility in the face of the inevitable limits to knowledge.’ Diane Coyle – Bennett Professor of Public Policy, Cambridge University ‘Fascinating... As John Wooden said, it’s what you learn after you know it all that counts.’ Andrew Gelman – author of Red State, Blue State, Rich State, Poor State ‘Beautifully written and often very funny.’ Dame Frances Cairncross – Chair, Executive Committee of the Institute for Fiscal Studies ‘Packed with fascinating examples of our shaky understanding of ourselves and the world.’ Bobby Duffy – Director, the Policy Institute at King’s College London ‘A terrific book! I read it quite literally in one sitting.’ Nick Chater – Professor of Behavioural Science, Warwick Business School, and author of The Mind is Flat About the Author Michael Blastland is a writer and broadcaster.

If the detailed, small pictures of people’s personal lives aren’t consistent with the big picture drawn by the state, will they trust what the state tells them? Or will they reject the institutions that proclaim it and say instead: ‘I’m not like that; my family is not like that.’ The big picture falls into disrepute: ‘That’s your bloody GDP. . .’ Is Brexit another consequence of what happens when we overlook irregularity? The economist Diane Coyle says the variation between places was ‘hidden from public debate because regional and social inequalities tend to be obscured by the headline growth in GDP. In the UK, there were not even any up-to-date regional GDP figures available ahead of the Brexit referendum; they are only now starting to be published.’15 The Bank of England and the Office for National Statistics have begun to worry about what some call ‘granularity’ – how the right-here-right-now is missed by aggregated data – and to explore ways of showing that the economic story is not one story but many.

They are: George Davey Smith, a genetic epidemiologist; John Kay and Esther Duflo, both economists; Duncan Watts, a social scientist; David Spiegelhalter, a statistician; Nancy Cartwright, a philosopher of science. Their words, ideas and influence permeate the book. I hope I’ve done them justice and caused no embarrassment. There are many more whose work I’ve drawn on with interest, respect and pleasure: Nick Chater, Glenn Begley, Wendy Johnson, Mervyn King, John Laub and Robert Sampson, Tom Gash, Dorothy Bishop, Diane Coyle, Tim Harford, Stephen Senn, Andrew Gelman, Angus Deaton, Paul Johnson, Orazio Attanasio, Chris Dillow, Raymond Hubbard, Andy Haldane, Marcus Munafò, Nessa Carey, Helen Pearson, Philip Ball, Onora O’Neill, Judith Rich Harris, Ray Pawson, Noah Smith, to name a few. Thanks to still more who have educated me – up to my limited point – in subjects such as chaos theory, causality, research design, as well as specific ideas in economics, policy-making, education, international development, and so on; to various groups to whom I’ve presented at conferences and elsewhere who answered back.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

"Robert Solow", accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, business cycle, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, different worldview, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, hedonic treadmill, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

The Economics of Enough THE ECONOMICS OF ENOUGH HOW TO RUN THE ECONOMY AS IF THE FUTURE MATTERS DIANE COYLE PRINCETON UNIVERSITY PRESS PRINCETON AND OXFORD Copyright © 2011 by Diane Coyle Requests for permission to reproduce material from this work should be sent to Permissions, Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TW press.princeton.edu Jacket art: Julee Holcombe, Babel Revisited, copyright © 2004. All Rights Reserved Library of Congress Cataloging-in-Publication Data Coyle, Diane. The economics of enough : how to run the economy as if the future matters / Diane Coyle. p. cm. Includes bibliographical references and index. ISBN 978-0-691-14518-1 (hardcover : alk. paper) 1.

“Inequality and Growth in a Panel of Countries.” Journal of Economic Growth 5, pp. 87–120. Baumol, William. 1993. “Social Wants and Dismal Science: The Curious Case of the Climbing Costs of Health and Teaching.” Proceedings of the American Philosophical Society 137:4, pp. 419–40. Baumol, William, with William Bowen. 1966. Performing Arts: The Economic Dilemma. Cambridge, MA: MIT Press and the Twentieth Century Fund. Beck, Thorsten, Diane Coyle, Mathias Dewatripont, Xavier Freizas, and Paul Seabright. 2010. “Bailing out the Banks: Reconciling Stability and Competition.” London: Centre for Economic Policy Research. Becker, Sasha, Karolina Ekholm, and Marc-Andreas Muendler. 2009. “Offshoring and the Onshore Composition of Tasks and Skills.” Discussion Paper No. 7391. London: CEPR. Bell, Daniel. 1976. The Cultural Contradictions of Capitalism.

Journal of Public Economics 88, pp. 1359–86. Blinder, Alan S. 2006. “Offshoring: The Next Industrial Revolution?” Foreign Affairs 85:2, pp. 113–25. ———. 2009. “How Many U.S. Jobs Might Be Offshorable.” World Economics 10:2, pp. 41–78. Blond, Philip. 2010. Red Tory. London: Faber. Bobbitt, Philip. 2002. The Shield of Achilles: War, Peace, and the Course of History. New York: Knopf. Bourguignon, Francois, and Diane Coyle. 2003. “Inequality, Public Perception, and the Institutional Responses to Globalization.” Mondea y Cridito 216, pp. 211–50. Bowles, Samuel, and Herbert Gintis. 2002. “Social Capital and Community Governance.” Economic Journal 112, pp. 419–36. Boyle, James. 2008. The Public Domain: Enclosing the Commons of the Mind. New Haven, CT: Yale University Press. Brafman, Ori, and Rod Beckstrom. 2006.


pages: 79 words: 24,875

Are Trams Socialist?: Why Britain Has No Transport Policy by Christian Wolmar

active transport: walking or cycling, Beeching cuts, Berlin Wall, Boris Johnson, BRICs, congestion charging, Diane Coyle, financial independence, full employment, joint-stock company, Kickstarter, low cost airline, Network effects, railway mania, trade route, urban sprawl, wikimedia commons, Zipcar

Are Trams Socialist? Series editor: Diane Coyle The BRIC Road to Growth — Jim O’Neill Reinventing London — Bridget Rosewell Rediscovering Growth: After the Crisis — Andrew Sentance Why Fight Poverty? — Julia Unwin Identity Is The New Money — David Birch Housing: Where’s the Plan? — Kate Barker Bad Habits, Hard Choices: Using the Tax System to Make Us Healthier — David Fell A Better Politics: How Government Can Make Us Happier — Danny Dorling Are Trams Socialist? Why Britain Has No Transport Policy — Christian Wolmar Are Trams Socialist? Why Britain Has No Transport Policy Christian Wolmar Copyright © 2016 Christian Wolmar Published by London Publishing Partnership www.londonpublishingpartnership.co.uk Published in association with Enlightenment Economics www.enlightenmenteconomics.com All Rights Reserved ISBN: 978-1-907994-57-9 (epub) A catalogue record for this book is available from the British Library This book has been composed in Candara Copy-edited and typeset by T&T Productions Ltd, London www.tandtproductions.com Preface Gothenburg tram.

Why Britain Has No Transport Policy Christian Wolmar Copyright © 2016 Christian Wolmar Published by London Publishing Partnership www.londonpublishingpartnership.co.uk Published in association with Enlightenment Economics www.enlightenmenteconomics.com All Rights Reserved ISBN: 978-1-907994-57-9 (epub) A catalogue record for this book is available from the British Library This book has been composed in Candara Copy-edited and typeset by T&T Productions Ltd, London www.tandtproductions.com Preface Gothenburg tram. Photo by Diane Coyle. Transport was a bit of an afterthought in the creation of the UK’s system of governance. There was no government department responsible for all aspects of transport until the creation of the Ministry of Transport in the aftermath of World War I, and in its various successive incarnations the transport ministry has never been granted the kind of importance that such weighty matters as finance, defence or home ­affairs have been accorded.


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

"Robert Solow", barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, full employment, George Santayana, global village, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Marshall McLuhan, mass immigration, McJob, microcredit, moral panic, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pensions crisis, Ronald Reagan, Silicon Valley, spinning jenny, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the relevant copyright, designs and patents acts, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers. The Weightless World Strategies for Managing the Digital Economy Diane Coyle Copyright © Diane Coyle 1997 The right of Diane Coyle to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 First Published 1997 Capstone Publishing Limited Oxford Centre for Innovation Mill Street Oxford OX2 0JX United Kingdom All rights reserved. Except for the quotation of short passages for the purposes of criticism and review, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

Anthony Bevins, Yvette Cooper, Matt Hoffman, Andrew Marshall, Hamish McRae, Suzanne Moore, John Price, Polly Toynbee, Roger Trapp and David Walker all — whether they knew it or not — made an important contribution to The Weightless World. Finally, I’d like to express heartfelt gratitude to those people at the Organisation for Economic Co-operation and Development who went out of their way to look up all sorts of figures and publications for me, in a true spirit of wanting to further our understanding of the world. Responsibility for the finished product, with all its infelicities, warts and omissions, is mine. Diane Coyle June 1997 Chapter One. The Weightless World A single imported greetings card with a microchip that plays Happy Birthday when the card is opened contains more computer power than existed on the planet 50 years ago. It weighs a gram or so. This might seem an odd choice of example to illustrate economic progress, but weightlessness is the key to understanding the new industrial revolution we are living through.


Driverless Cars: On a Road to Nowhere by Christian Wolmar

Airbnb, autonomous vehicles, Beeching cuts, bitcoin, Boris Johnson, BRICs, carbon footprint, Chris Urmson, cognitive dissonance, congestion charging, connected car, deskilling, Diane Coyle, don't be evil, Elon Musk, high net worth, RAND corporation, ride hailing / ride sharing, self-driving car, Silicon Valley, smart cities, Tesla Model S, Travis Kalanick, wikimedia commons, Zipcar

PERSPECTIVES DRIVERLESS CARS: ON A ROAD TO NOWHERE C H RIS TIA N WO L M A R Driverless Cars: On a Road to Nowhere PERSPECTIVES Series editor: Diane Coyle The BRIC Road to Growth — Jim O’Neill Reinventing London — Bridget Rosewell Rediscovering Growth: After the Crisis — Andrew Sentance Why Fight Poverty? — Julia Unwin Identity Is The New Money — David Birch Housing: Where’s the Plan? — Kate Barker Bad Habits, Hard Choices: Using the Tax System to Make Us Healthier — David Fell A Better Politics: How Government Can Make Us Happier — Danny Dorling Are Trams Socialist? Why Britain Has No Transport Policy — Christian Wolmar Travel Fast or Smart? A Manifesto for an Intelligent Transport Policy — David Metz Britain’s Cities, Britain’s Future — Mike Emmerich Before Babylon, Beyond Bitcoin: From Money That We Understand To Money That Understands Us — David Birch The Weaponization of Trade: The Great Unbalancing of Politics and Economics — Rebecca Harding and Jack Harding Driverless Cars: On a Road to Nowhere — Christian Wolmar Driverless Cars: On a Road to Nowhere Christian Wolmar London Publishing Partnership Copyright © 2018 Christian Wolmar Published by London Publishing Partnership www.londonpublishingpartnership.co.uk Published in association with Enlightenment Economics www.enlightenmenteconomics.com All Rights Reserved ISBN: 978-1-907994-76-0 (interactive PDF) A catalogue record for this book is available from the British Library This book has been composed in Candara Copy-edited and typeset by T&T Productions Ltd, London www.tandtproductions.com Contents Prefacevii Chapter 1 The myth of motoring freedom 1 Chapter 2 The hard sell 13 Chapter 3 The triple revolution 31 Chapter 4 What can cars do now?

By Editor5807 (own work) [GNU Free Documentation License, Version 1.2 (https://commons.wikimedia. org/​w iki/​C ommons:GNU_Free_Documentation_License,_version​ _1.2)] via Wikimedia Commons. 120 PERSPECTIVES Centennial Scholar are at essays the Brookings Institution, and co-author of The Perspectives on big ideas by leading writers, each given Revolution free rein and a modest word limit to reframe an issue of Metropolitan great contemporary interest. Diane Coyle, Series Editor ‘This is just what the robot evangelists don’t want you to read: a rational, levelheaded, compelling yet cheerful analysis of why the driverless car‘s route to success is so uncertain. Wolmar has simmered the hype to reveal real-world motorindustry paranoia and tech-sector hubris, and he explains why autonomous cars probably aren’t coming to a street near you anything like as soon as you’ve been led to believe.’


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

agricultural Revolution, Airbnb, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, large denomination, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, technoutopianism, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

When these estimates were added Italy’s GDP surpassed the United Kingdom’s and Italy was asked to make a greater contribution to the European Union. Oops! Anyway, to restore fair contributions, some years later EU statisticians revised their methodologies to treat the black economy equally in all EU countries and things like software and drug dealing and prostitution were added to the figures in 1991, which in turn boosted the UK economy significantly. Diane Coyle explores this statistical revision in her book GDP: A Brief but Affectionate History, saying that ‘the largely cash-based informal economy of moonlighting, avoiding taxes and regulations, but creating work and output, has been placed inside the production boundary’ (Coyle 2014). So it is measured, but the people in that economy are not contributing their fair share to the national piggy bank.

In this category, e-cash is really a symptom of fundamental change: as the developed economies have become information economies, the problem of trying to measure, assess and control those economies has sharpened. Economists already wonder about existing measures. Figures that may have understated actual growth and productivity gains over the past few years could have sent the wrong signals to both policy makers and financial markets. In what economist Diane Coyle called the ‘weightless economy’ (Coyle 1997a) the task of measuring and managing economic activity may well move beyond the bounds of what is possible through traditional structures, and electronic money could contribute to (but not create) a real problem for governments: the lack of intermediaries for reporting on monetary flows. The idea of a weightless economy, with no physical means of exchange, is now taken for granted but I’m not sure that the implications are.

How are these transactions to be accounted (absent a win–win–win shared ledger)? And if they cannot be accounted, how are they to be managed? Since the government cannot simply measure all the money flows in the economy and use that actual data instead of ancient statistical estimates that often need to be revised, it has, in essence, no idea what is going on. This was observed most famously, as Diane Coyle has noted, when Denis Healey went cap in hand to the IMF because Britain was in recession – only to discover, when the figures were later updated, that it hadn’t been. This led me to reflect on the old Robert Heinlein science fiction novel Beyond This Horizon, in which cash is extinct and all payments run through computers and all the computers are connected to the government computer so the government can twiddle the knobs and dials to keep the economy on course.


pages: 346 words: 89,180

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

"Robert Solow", 23andMe, activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, cognitive bias, computer age, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial innovation, full employment, fundamental attribution error, future of work, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, job automation, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

Our authorial partnership began with our collaboration on Nesta’s Innovation Index, a project that would not have happened without the support of Richard Halkett and Jonathan Kestenbaum of Nesta, John Kingman of HM Treasury, and David Currie, who chaired the advisory board. A commission from Ryan Avent of the Economist gave us the idea of writing something for a wider audience. We are also grateful to the people who challenged us to think about the broader implications of intangibles for the economy and for society and who patiently commented on drafts. Particular thanks go to Diane Coyle, for her insightful advice and comments throughout the project, and to Alex Edmans, Fernando Galindo Rueda, Neil Lee, Mike Lynch, David Pitt Watson, and Giles Wilkes, who commented on particular chapters, and Simon Haskel, who read the text in its entirety. Other readers and discussants to whom we are very grateful include Hasan Bakhshi, Daniel Finkelstein, Tom Forth, John Kay, Juan Mateos Garcia, Ramana Nanda, Paul Nightingale, Robert Peston, and Bart van Ark.

As the power of computers and the Internet became more apparent in the 1990s, the idea that immaterial things were economically important became increasingly widely accepted. Sociologists talked of a “network society” and a “post-Fordist” economy. Business gurus urged managers to think about how to thrive in a knowledge economy. Economists began to think about how research and development and the ideas that resulted from it might be incorporated into their models of economic growth, an economy parsimoniously encapsulated by the title of Diane Coyle’s book The Weightless World. Authors like Charles Leadbeater suggested we might soon be “living on thin air.” The bursting of the dot-com bubble in 2000 dampened some of the wilder claims about a new economy, but research continued among economists to understand what exactly was changing. It was in this context that a group of economists assembled in Washington in 2002 at a meeting of the Conference on Research in Income and Wealth to think about how exactly to measure the types of investment that people were making in what they were calling “the new economy.”

In the next chapter, we will look in more depth at how to measure intangible investment in the economy. 3 How to Measure Intangible Investment This chapter explains how intangible investment can be measured, and how economists worked it out. How Is Investment Measured and Why? The story of how economists and statisticians came to measure intangible investment is a late episode in a much bigger story: the invention of GDP and systems of national accounts.1 This story is engagingly told in Diane Coyle’s GDP: A Brief but Affectionate History and Ehsan Masood’s The Great Invention: The Story of GDP. One of the biggest conceptual challenges involved in the creation of GDP was deciding what to count. This was an old problem. Adam Smith, in The Wealth of Nations, puzzled over whether England was producing more than it did at the fall of the Roman Empire. With no data to support this he simply asserted it was so, since there was more productive labor and less unproductive labor, the latter being occupations such as “servants . . . the sovereign . . . players, buffoons, musicians and opera-singers.”2 By the time of the Great Depression, when economists were being pressed into service to understand what was going wrong with the economy, this problem had become urgent.


pages: 264 words: 76,643

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, centre right, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, falling living standards, financial deregulation, financial intermediation, financial repression, Gini coefficient, Goldman Sachs: Vampire Squid, Google Hangouts, Hans Rosling, happiness index / gross national happiness, income inequality, income per capita, informal economy, invisible hand, job satisfaction, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

It is merely one way of imagining our world. Gross domestic product is not real either. It is just a clever way of measuring some of the stuff that we humans get up to. Growth was a great invention. Now get over it. NOTES THE CULT OF GROWTH 1. See Pankaj Mishra, Age of Anger, Farrar, Straus and Giroux, 2017; Ed Luce, The Retreat of Western Liberalism, Little, Brown, 2017. 2. Borrowed from Diane Coyle, GDP: A Brief but Affectionate History, Princeton University Press, 2014, p. 124. 3. I’ve always attributed this phrase to Bill Emmott, former editor of The Economist. Whether or not he invented it, he uses it frequently. 4. “Chinese Factory Worker Can’t Believe the Shit He Makes for Americans,” Onion, June 15, 2005: www.theonion.com. 5. “The 30 Most Insane Things for Sale in Skymall,” Buzzfeed, July 10, 2013: www.buzzfeed.com. 6.

They are the money the bank has lent out to other people. They are assets because theoretically the banks can get them back one day. Liabilities, on the other hand, are the monies deposited with a bank, which one day it will have to give back. 15. Andrew Haldane, “The $100 Billion Question,” 2010: www.bankofengland.co.uk. 16. Haldane, Brennan, and Madouros, “What is the contribution of the financial sector,” p. 92. 17. Diane Coyle, GDP: A Brief but Affectionate History, Princeton University Press, p. 99. 18. Haldane, Brennan, and Madouros, “What is the contribution of the financial sector,” p. 88. 19. Coyle, GDP, p. 102. CHAPTER 5: THE INTERNET STOLE MY GDP 1. Sir Charles Bean, “Independent Review of UK Economic Statistics,” Cabinet Office, HM Treasury, March 2016. 2. This does not appear in GDP.


pages: 188 words: 40,950

The Case for Universal Basic Income by Louise Haagh

back-to-the-land, basic income, battle of ideas, Bertrand Russell: In Praise of Idleness, bitcoin, blockchain, cryptocurrency, delayed gratification, Diane Coyle, full employment, future of work, housing crisis, income inequality, job-hopping, land reform, low skilled workers, Mark Zuckerberg, mini-job, moral hazard, new economy, offshore financial centre, precariat, race to the bottom, rent control, road to serfdom, Silicon Valley, Skype, smart contracts, trickle-down economics, universal basic income

As mentioned, the austerity paradigm has generated a climate in which remedial policies must compete against each other in such a way that an alternative structure of coherence around human development is difficult to conceive. To illustrate, a range of counter-proposals to basic income have emerged in the UK since 2016, in the form of Universal Basic (UB) Services (UBS)65 and (UB) Infrastructure (UBIIn).66 Diane Coyle ‘call[s] for a guarantee of a Universal Basic Infrastructure – not income, nor cash, but access to the transport, communications, and those aspects of health, education, and training that can build “human capital”’ (emphasis added).67 However, the case can be made that basic income is also a basic economic infrastructure, as argued. The concern is that pitting opportunity through infrastructure against security in existence fails to address the way current, punitive income security governance undermines human capital investment by excluding and demotivating people just as they face the greatest hardship.


pages: 492 words: 118,882

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

accounting loophole / creative accounting, Ada Lovelace, Airbnb, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, Ben Bernanke: helicopter money, bitcoin, blockchain, Bretton Woods, business cycle, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, David Graeber, deskilling, Diane Coyle, discrete time, disruptive innovation, distributed ledger, diversification, double entry bookkeeping, Ethereum, ethereum blockchain, fiat currency, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, large denomination, liquidity trap, London Whale, low skilled workers, M-Pesa, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, MITM: man-in-the-middle, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, Satoshi Nakamoto, Satyajit Das, savings glut, seigniorage, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Von Neumann architecture, Washington Consensus

Brain Arthur, Doyne Farmer, Andreas Antonopoulos, Satyajit Das, Joyce Appleby, Yanis Varoufakis, Patrick O’Sullivan, Nigel Allington, Mark Esposito, Sitabhra Sinha, Thomas Sowell, Niall Ferguson, Andy Stern, Alan Kirman, Neel Kashkari, Danny Dorling, David Graeber, Amir Sufi, Atif Mian, Vitalik Buterin, Andy Haldane, Gillian Tett, Martin Sandbu, Robert Reich, Kenneth Rogoff, Paul Beaudry, Michael Kumhof, Diane Coyle, Ben Dyson, Dirk Helbing, Guy Michaels, David Autor, Richard Gendal Brown, Tim Swanson, David Andolfatto, Paul Pfleiderer, Zoltan Pozsar, Frank Levy, Richard Murnane, César Hidalgo, and Robin Hanson, among others. An equal measure of thanks also needs to be given to all the academics and researchers whom I had the chance to meet via the Institute of New Economic Thinking. Without the conversations I had with them, the final chapter of this book would have had a very different look.

The most advanced Chatbot today is Xiaoice (pronounced Shao-ice) developed by Microsoft, and GDP appears constantly in the news, business, and politics. Yet in recent times, its ability to appropriately represent the true productivity of a country is increasingly criticized. While writing a critique on this topic is beyond the scope of this book, readers are invited to look at other indicators such as the Social Progress Index and the OECD Better Life Index. Another excellent resource is Diane Coyle’s, GDP: A Brief but Affectionate History, which shows why this statistic was invented, how it has changed, what are its pros and cons and why it is inappropriate for a 21st century economy driven by innovation, services, and intangible goods. 21 140 Chapter 3 ■ Innovating Capitalism which can respond with human-like answers, questions, and “thoughts.” If a user sends a picture of a broken ankle, Xiaoice will reply with a question asking about how much pain the injury caused, for example (Slater-Robins, 2016).


pages: 164 words: 57,068

The Second Curve: Thoughts on Reinventing Society by Charles Handy

"Robert Solow", Airbnb, basic income, Bernie Madoff, bitcoin, bonus culture, British Empire, call centre, Clayton Christensen, corporate governance, delayed gratification, Diane Coyle, disruptive innovation, Edward Snowden, falling living standards, future of work, G4S, greed is good, informal economy, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, Kodak vs Instagram, late capitalism, mass immigration, megacity, mittelstand, Occupy movement, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, Ronald Coase, shareholder value, sharing economy, Skype, Social Responsibility of Business Is to Increase Its Profits, Stanford marshmallow experiment, Steve Jobs, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Veblen good, Walter Mischel

Given these and numerous other flaws in the measure it is a fool’s errand to try to compare growth rates across different countries and currencies. In truth we do not know how well our economy or our society is really growing at any given time, even in economic terms, let alone human well-being. A Second Curve badly needs a more satisfactory measure of a society’s growth. In her illuminating book GDP: A Brief but Affectionate History, the economist Diane Coyle suggests that policymakers should adopt a dashboard of different measures. Sadly, politicians and the public yearn for the simplicity of a single number and, says Coyle, GDP is the best we have. Unfortunately it is used in public debate as the only measure in common use to assess our progress as a society. This is something it was never intended to do. We need Coyle’s dashboard, complex though it will inevitably be.


Digital Transformation at Scale: Why the Strategy Is Delivery by Andrew Greenway,Ben Terrett,Mike Bracken,Tom Loosemore

Airbnb, bitcoin, blockchain, butterfly effect, call centre, chief data officer, choice architecture, cognitive dissonance, cryptocurrency, Diane Coyle, en.wikipedia.org, G4S, Internet of things, Kevin Kelly, Kickstarter, loose coupling, M-Pesa, minimum viable product, nudge unit, performance metric, ransomware, Silicon Valley, social web, the market place, The Wisdom of Crowds

For governments, the first nations to embrace the idea of a state organised on digital principles are likely to win the same profound rewards as those who had the foresight to reframe their institutions around the technological revolutions of the past. The rest of the world will then have to catch up. Acknowledgements A multidisciplinary team was needed to make this book happen. Emer Coleman, Russell Davies and Giles Turnbull provided us with wise advice on the words, and made sure that we annoyed fewer people unnecessarily. Diane Coyle was an excellent and patient editor (as well as being kind enough to ask us to write this book in the first place). Richard Baggaley, Jon Wainwright and Sam Clark helped us navigate the unfamiliar world of publishing without too many missteps. Francis Maude was generous enough to find the time to write us a foreword. There are many, many people who deserve more credit for their hard work that contributed to the stories and advice collected in this book.


pages: 275 words: 77,017

The End of Money: Counterfeiters, Preachers, Techies, Dreamers--And the Coming Cashless Society by David Wolman

addicted to oil, Bay Area Rapid Transit, Berlin Wall, Bernie Madoff, bitcoin, Bretton Woods, carbon footprint, cashless society, central bank independence, collateralized debt obligation, corporate social responsibility, credit crunch, cross-subsidies, Diane Coyle, fiat currency, financial innovation, floating exchange rates, German hyperinflation, greed is good, Isaac Newton, Kickstarter, M-Pesa, Mahatma Gandhi, mental accounting, mobile money, money: store of value / unit of account / medium of exchange, offshore financial centre, P = NP, Peter Thiel, place-making, placebo effect, Ponzi scheme, Ronald Reagan, seigniorage, Silicon Valley, special drawing rights, Steven Levy, the payments system, transaction costs, WikiLeaks

I would also like to thank the following people for providing assistance with resources, added explanation, logistical support, research guidance, editing, encouragement, and invaluable criticism: Aaron Ernst, Adam Rogers, Aiichiro Kurata, Aimee Geissler, Allen Kupetz, Andrew Steckl, Andy Jordan, Anil Kakani, Anne Marie DiStefano, Anthony Effinger, Astrid Mitchell, Carlson Chambliss, Carol B., Charlotte Webb, Coert Voorhees, Daniel Lowther, David Abrams, David Tidmarsh, Diane Coyle, Einar Baldvin Stefánsson, Erik Jensen, Erik Steiner, Frederick Reimers, Glenn Wood, Greg Lastowka, Hannes van Rensburg, Heather Wax, Heidar Gudjonsson, James Grant, Jan S., Jason Jarrell, Jim Bruene, Jim Rosenberg, Jonathan Carver, Jonathan Lipow, Joshua Davis, Julian Smith, Kabir Kumar, Kakha Bendukidze, Kathleen Vohs, Kiera Butler, Lee Voo van der, Lewis Iadarola, Liana McCabe, Lisa Rutherford, Mark Pickens, Mark Robinson, Marta Peiret, Matt Dill, Matteo Chiampo, Michael Linton, Michael Salmony, Mugdha Bhargava, Neha Mehra, Nick Hughes, Nick McKenzie, Oakley Brooks, Ólafur Ísleifsson, Pallab Mitra, Paul Collins, Paul Makin, Peter Fishman, R.


pages: 772 words: 203,182

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, bank run, banking crisis, Basel III, Black Swan, blood diamonds, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Gordon Gekko, hiring and firing, income inequality, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, pension reform, performance metric, pirate software, plutocrats, Plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, Sand Hill Road, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

Great wealth is the imprimatur of mankind’s most evolutionary fit, and the means for such evolutionary superiority to be perpetuated. This pseudoscientific logic helped assuage any guilt and deflected brickbats from critics such as Mark Twain. During the Reagan era, similar pseudoscientific rationale was provided by the themes of shareholder capitalism, and especially by Ayn Rand. The outcome is that business leaders are constantly driving one another to garner more income. As Diane Coyle, visiting professor at the University of Manchester, wrote: “[The] banking bonus culture validated making a lot of money as a life and career goal…. Remuneration consultants … helped ratchet up the pay and bonus levels throughout the economy.”13 “Too much” became “never enough.” In hindsight, it’s clear that CEOs pursuing their own magnified self-interest within this new environment enabled business leaders to engage in de facto class warfare as they strove to seize a larger share of the gains from growth.

Nabil Al-Najjar, Sandeep Baliga, and David Besanko, “Market Forces Meet Behavioral Biases: Cost Misallocation and Irrational Pricing,” Rand Journal of Economics 39, 214–237, 2008. 9 Richard Roll, “The Hubris Hypothesis of Corporate Takeovers,” Journal of Business 59, 197–216, 1986. 10 Mark Armstrong and Steffen Huck, “Behavioral Economics As Applied to Firms: A Primer,” January 2010. 11 Robert Reich, Supercapitalism (New York: Vintage Books/Random House, 2008), 108. 12 David Cay Johnston, Perfectly Legal (New York: Portfolio/Penguin Group, 2003), 240. 13 Diane Coyle, The Economics of Enough: How to Run the Economy As If the Future Matters (Princeton, NJ: Princeton University Press, 2011). 14 Paul K. Piff, Daniel M. Stancata, Stephane Cote, Rodolfo Mendoza-Denton, and Dacher Keltner, “Higher Social Class Predicts Increased Unethical Behavior,” Proceeds of the National Academy of Sciences, February 27, 2012. 15 For example, see: Randall Morck, Andrie Shleifer, and Robert Vishny, “Alternative Mechanisms for Corporate Control,” American Economic Review, 1989, 79:842–852. 16 Ian Austen, “Shake-Up at Canadian Pacific Railway As Activist Investor Takes Control,” New York Times, May 18, 2012. 17 Peter Whoriskey, “The Lake Wobegon Effect Lifts CEO’s Pay,” Washington Post, Oct. 4, 2011, and Ryan Chittum, “Cronyism and Executive Compensation,” The Audit, Columbia Journalism Review, Oct. 4, 2011. 18 Whoriskey, Ibid. 19 Heather Landy, “Executives Took, But the Directors Gave,” New York Times, April 5, 2009. 20 David Cay Johnston, Perfectly Legal, 2003, 250. 21 David Carr, “Why Not Occupy Newsrooms?


pages: 309 words: 86,909

The Spirit Level: Why Greater Equality Makes Societies Stronger by Richard Wilkinson, Kate Pickett

basic income, Berlin Wall, clean water, Diane Coyle, epigenetics, experimental economics, experimental subject, Fall of the Berlin Wall, full employment, germ theory of disease, Gini coefficient, God and Mammon, impulse control, income inequality, Intergovernmental Panel on Climate Change (IPCC), knowledge economy, labor-force participation, land reform, longitudinal study, Louis Pasteur, meta analysis, meta-analysis, Milgram experiment, moral panic, offshore financial centre, phenotype, plutocrats, Plutocrats, profit maximization, profit motive, Ralph Waldo Emerson, statistical model, The Chicago School, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, ultimatum game, upwardly mobile, World Values Survey, zero-sum game

The complementarity of liberty and equality has been proclaimed in the writings of many democratic thinkers, including the social philosopher L. T. Hobhouse, who believed that liberty depended, in all its domains, on equality – equality before the law, equality of opportunity, equality of parties to a contract.395 Employee-ownership provides a way of increasing liberty and equality together. RUNNING WITH THE TECHNOLOGICAL TIDE In her book, The Weightless World, Diane Coyle points out that although people in most industrialized countries experienced something like a twentyfold increase in their real incomes during the twentieth century, the weight of all that was produced at the end of the century was roughly the same as it had been at the beginning.396 She also says that the average weight of one dollar’s worth of US exports (adjusted for inflation) fell by a half between 1990 and 1996.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

My economic horizons have been expanded as a result of regular attendance at events where I have had the chance to converse with fellow economists. Of particular value have been regular meetings at the Bank for International Settlements in Basel, the Oesterreichische Kontrollbank AG (OeKB) in Vienna and the Accumulation Society in London. I have also benefited from my occasional involvement with the Business Council for Britain. Those who offered encouragement when the book was merely a vague concept include Diane Coyle, Hamish McRae and Martin Wolf. All three know a lot more than I do about writing books and all were kind enough to steer me in the right direction. I am enormously grateful to the people at Yale University Press. Special thanks go to Phoebe Clapham, my editor, who was dogged in her determination to turn my scribblings into a coherent final manuscript. I also offer my gratitude to Sarah Harrison and Liz Pelton, who have provided so much support on publicity.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Among the many people who have over the years given me ideas, information, inspiration, knowledge, feedback, or encouragement are Dimitra Alexopoulou, David Autor, Richard Baldwin, Torsten Bell, Jared Bernstein, Michael Goldfarb, Heather Grabbe, Jason Furman, Arancha Gonzalez, Sandra Kanthal, Joris Luyendijk, Philippe Martin, Branko Milanovic, Karl Ove Moene, Yascha Mounk, Christian Odendahl, Jan Piotrowski, Dani Rodrik, John Springford, Simon Tilford, Kevin O’Rourke, Betsey Stevenson, Arvind Subramanian, Adam Tooze, Karen Helene Ulltveit-Moe, Anne Case, Diane Coyle, Angus Deaton, Swati Dhingra, Ben Friedman, Marcel Fratzscher, David McWilliams, Halvor Mehlum, Adrian Wood, and many, many more. I thank them all and apologise for the many names I have surely left out. First and last comes family. My wife, Ana, has shown admirable tolerance when my attention has been monopolised by the writing. (The cats less so, but they are encouraging in their own way.) And I dedicate this book to my son, Theo, in the hope that it contributes a little to ensuring that my contemporaries do not rob him and his generation of their birthright to an open and liberal society.


When the Money Runs Out: The End of Western Affluence by Stephen D. King

Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

Chapter 1 Taking Progress for Granted Chapter 2 The Pain of Stagnation Chapter 3 Fixing a Broken Economy Chapter 4 Stimulus Junkies Chapter 5 The Limits to Stimulus: Lessons from History Chapter 6 Loss of Trust, Loss of Growth Chapter 7 Three Schisms Chapter 8 From Economic Disappointment to Political Instability Chapter 9 Dystopia Chapter 10 Avoiding Dystopia Notes Bibliography Index 4099.indd 5 vii 1 9 37 55 69 97 121 151 179 207 231 263 273 279 29/03/13 2:23 PM To Yvonne, Helena, Olivia and Sophie 4099.indd 6 29/03/13 2:23 PM ACKNOWLEDGEMENTS Thanks must go first and foremost to those who provided detailed comments on the manuscript. I am particularly grateful to John Llewellyn, Peter Hennessy (or, to give him his full title, Baron Hennessy of Nympsfield), Chris Brown-­Humes and Karen Ward for their extraordinary generosity in reading drafts of the entire book, in the process saving me from otherwise inevitable logical or factual embarrassment. Diane Coyle was a source of inspiration when the book was in its planning stages. Later, as she launched her own quest into the usefulness of economics, she encouraged me to think more deeply about the relationship between economics and history (her edited book What’s the Use of Economics? is essential reading for anyone wondering how to rebuild the reputation of our profession). Colleagues and friends have been important sources of support throughout.


pages: 348 words: 102,438

Green and Prosperous Land: A Blueprint for Rescuing the British Countryside by Dieter Helm

3D printing, Airbnb, barriers to entry, British Empire, clean water, conceptual framework, corporate social responsibility, decarbonisation, deindustrialization, demographic transition, Diane Coyle, digital map, facts on the ground, food miles, Haber-Bosch Process, illegal immigration, Internet of things, Kickstarter, land reform, mass immigration, New Urbanism, North Sea oil, precision agriculture, quantitative easing, smart meter, sovereign wealth fund, the built environment, urban planning, urban sprawl

O. xiv, 97 wind farms 57, 124 wolves 1, 107, 108 woodland 8, 45, 57, 63, 79, 107, 109, 110, 124, 160, 169, 180, 185, 186, 226, 247 woodpigeon 80, 115 World War II (1939–45) xii, 80, 99, 100, 166, 182 Yellowstone National Park 116 Yorkshire Moors 120 ACKNOWLEDGEMENTS This is my own take on the prize of a green and prosperous land and how to get there, and not that of the NCC or of its individual members. In writing this book, I have been greatly influenced by my fellow NCC colleagues: Melanie Austen, Ian Bateman, Christopher Collins, Diane Coyle, Paul Leinster, Georgina Mace, Colin Mayer and Kathy Willis. Henry Dieudonné-Demaria leads the secretariat to great effect, ably supported by Maja Kent and Vladimir Novatchev. Nick Barter and Julian Harlow drafted the 25 Year Environment Plan, and both have helped me enormously. Between them they have made a major impact on Britain’s environmental policies, in the best traditions of the civil service.


pages: 339 words: 105,938

The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, endogenous growth, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, hedonic treadmill, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, longitudinal study, new economy, Pareto efficiency, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, Thomas Bayes, trade liberalization, ultimatum game

We just have to accept on trust the ‘inescapable economic logic’, or similar threatening phrase, which leads to a particular conclusion, however unpalatable. Black box economics is not just the creation of policy entrepreneurs. Serious economists who make a virtue of their political neutrality can also unintentionally reinforce the black box image, because of their astonishing arrogance. For instance, Diane Coyle, formerly of The Independent, concludes her book with ‘ten rules of economic thinking’, one of which is ‘where common sense and economics conflict, common sense is wrong’.3 This imperious tone does not encourage people to embrace the wisdom of economists. People feel they are being told what to think, rather than encouraged to understand. Besides, common sense is sometimes wiser than economics.


pages: 421 words: 125,417

Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, global pandemic, Haber-Bosch Process, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, low skilled workers, mass immigration, microcredit, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population

The result is a truly inspirational book’ Robert Matthews, BBC Focus ‘Never has the challenge of saving the world felt as simple’ Edmund Conway, Daily Telegraph ‘Lively, provocative and readable … will make the world a better place’ Tim Congdon, Spectator ‘Genuinely impressive … Sachs stands in the great tradition of campaigning intellectuals and has been an effective advocate of urgent policy action’ Diane Coyle, Independent ‘A manifesto for securing a bright future for Earth’ Michael Sargent, Nature ‘Packed with statistics and carefully worded arguments’ Economist ‘A vital read … Common Wealth is full of big ideas and is written by a star in the constellation of gurus … a serious book that deserves to be widely read and debated’ Management Today ‘One of America’s most prominent economists’ Noel Malcolm, Sunday Telegraph ‘Common Wealth explains the most basic economic reckoning that the world faces … Despite the rearguard opposition of some vested interests, policies to help the world’s poor and the global environment are in fact the very best economic bargains on the planet’ Al Gore ABOUT THE AUTHOR Jeffrey D.


pages: 480 words: 119,407

Invisible Women by Caroline Criado Perez

Affordable Care Act / Obamacare, augmented reality, Bernie Sanders, collective bargaining, crowdsourcing, Diane Coyle, Donald Trump, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, Grace Hopper, Hacker Ethic, Indoor air pollution, informal economy, lifelogging, low skilled workers, mental accounting, meta analysis, meta-analysis, Nate Silver, new economy, obamacare, Oculus Rift, offshore financial centre, pattern recognition, phenotype, post-industrial society, randomized controlled trial, remote working, Silicon Valley, Simon Kuznets, speech recognition, stem cell, Stephen Hawking, Steven Levy, the built environment, urban planning, women in the workforce, zero-sum game

It is compiled from data collected in a range of surveys and represents the total value of goods (how many shoes were manufactured) and services (how many meals were served at restaurants) a country produces. It also includes how much we all got paid and how much we (including governments and businesses) have all spent. It all sounds very scientific, but the truth is that GDP has a woman problem. The formulation of a country’s official GDP figure is an inherently subjective process, explains Diane Coyle, professor of economics at Manchester University. ‘A lot of people think that [GDP] is a real thing. But actually, it’s a confection, with lots of judgments that have gone into its definition. And a lot of uncertainty.’ Measuring GDP is, she says, ‘not like measuring how high the mountain is’. When you see headlines proclaiming that ‘GDP went up 0.3% this quarter’, she cautions, you should remember that that 0.3% ‘is dwarfed by the amount of uncertainty in the figures’.


The New Enclosure: The Appropriation of Public Land in Neoliberal Britain by Brett Christophers

Boris Johnson, Capital in the Twenty-First Century by Thomas Piketty, Corn Laws, credit crunch, cross-subsidies, Diane Coyle, estate planning, ghettoisation, Hernando de Soto, housing crisis, income inequality, invisible hand, land reform, land tenure, land value tax, late capitalism, market clearing, Martin Wolf, New Journalism, New Urbanism, off grid, offshore financial centre, performance metric, Philip Mirowski, price mechanism, price stability, profit motive, Right to Buy, Skype, sovereign wealth fund, special economic zone, the built environment, The Wealth of Nations by Adam Smith, Thorstein Veblen, urban sprawl, wealth creators

More than thirty years ago, in the early 1980s, the political scientist Andrew Cox came to much the same conclusion, albeit in his case without close consideration of the trailblazing Thatcher government’s stated rationale for the land disposal that was already underway. He judged that such disposal appeared to be ‘based on ideological prejudice’.2 Much more recently, looking back specifically to Thatcher’s (and Cox’s) 1980s, Michael Rosen concurred: ‘Behind these sell-offs was an ideology. The Tories then as now thought public property, funded publicly, used by the public, bred Labour voters’.3 Also recently, the economist Diane Coyle remarked that in Britain ‘the belief the public sector should own as little as possible’ – of land, but also, one imagines, of everything else – is essentially ‘an article of faith’.4 She is right; and so too, surely, was Cox. CHAPTER 4 Carrots and Sticks: Privatizing the Land In a liberal democracy such as the United Kingdom, making a series of arguments in support of a major policy initiative – which the privatization of public land, for nearly forty years now, has undoubtedly been – is typically necessary to the achievement of that initiative; but it is by no means sufficient.


pages: 497 words: 150,205

European Spring: Why Our Economies and Politics Are in a Mess - and How to Put Them Right by Philippe Legrain

3D printing, Airbnb, Asian financial crisis, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, Boris Johnson, Bretton Woods, BRICs, British Empire, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Celtic Tiger, central bank independence, centre right, cleantech, collaborative consumption, collapse of Lehman Brothers, collective bargaining, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, currency peg, debt deflation, Diane Coyle, disruptive innovation, Downton Abbey, Edward Glaeser, Elon Musk, en.wikipedia.org, energy transition, eurozone crisis, fear of failure, financial deregulation, first-past-the-post, forward guidance, full employment, Gini coefficient, global supply chain, Growth in a Time of Debt, hiring and firing, hydraulic fracturing, Hyman Minsky, Hyperloop, immigration reform, income inequality, interest rate derivative, Intergovernmental Panel on Climate Change (IPCC), Irish property bubble, James Dyson, Jane Jacobs, job satisfaction, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, liquidity trap, margin call, Martin Wolf, mittelstand, moral hazard, mortgage debt, mortgage tax deduction, North Sea oil, Northern Rock, offshore financial centre, oil shale / tar sands, oil shock, open economy, peer-to-peer rental, price stability, private sector deleveraging, pushing on a string, quantitative easing, Richard Florida, rising living standards, risk-adjusted returns, Robert Gordon, savings glut, school vouchers, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart grid, smart meter, software patent, sovereign wealth fund, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, working-age population, Zipcar

Thank you to Frédéric Michel for his kindness and support over the years and for introducing me to so many interesting people. Thank you to Peter Mandelson, Ben Wegg Prosser (a very old friend), Stephen Adams and everyone at Global Counsel. David Bowers and Dominic White at Absolute Strategy Research are always insightful and David has been particularly kind; thank you to Beth McCann for introducing us. Diane Coyle at Enlightenment Economics is lovely. Varun Chandra has been very kind. I have had many stimulating conversations with Gene Frieda at Moore Capital Management. Among bank economists, Stephen King at HSBC, Willem Buiter at Citi, Erik Nielsen at Unicredit and George Magnus, formerly of UBS, stand out. Julian Callow at Barclays is consistently positive about Europe. Thanks too to Paul Adamson and Hendrik Bourgeois.


pages: 614 words: 174,226

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

"Robert Solow", airline deregulation, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, ending welfare as we know it, financial deregulation, financial innovation, fixed income, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Growth in a Time of Debt, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Long Term Capital Management, low cost airline, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, oil shock, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, price stability, profit motive, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Peltzman, Silicon Valley, Simon Kuznets, starchitect, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus

It found a wide audience after the New York newspaper editor Horace Greeley bankrolled a second edition, in part to rebut an 1858 speech by the South Carolina politician James Henry Hammond, titled “Cotton Is King,” in which he presented data purporting to show the superior productivity of the southern economy. By the time of the Civil War, more than 200,000 copies of Helper’s book had been sold. De Bow’s contribution was ironic; he was an ardent proponent of both slavery and secession. See Cook, The Pricing of Progress. 25. Diane Coyle, GDP: A Brief but Affectionate History (Princeton, N.J.: Princeton University Press, 2014), 13. 26. Arnold Harberger, “Sense and Economics: An Oral History with Arnold Harberger,” conducted by Paul Burnett in 2015 and 2016, Oral History Center, Bancroft Library, University of California, Berkeley. 27. H. R. Haldeman Diaries, National Archives, August 16, 1971; available at nixonlibrary.gov/sites/default/files/virtuallibrary/documents/haldeman-diaries/37-hrhd-audiotape-ac12b-19710816-pa.pdf. 28.


pages: 733 words: 179,391

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

"Robert Solow", Albert Einstein, Alfred Russel Wallace, algorithmic trading, Andrei Shleifer, Arthur Eddington, Asian financial crisis, asset allocation, asset-backed security, backtesting, bank run, barriers to entry, Berlin Wall, Bernie Madoff, bitcoin, Bonfire of the Vanities, bonus culture, break the buck, Brownian motion, business cycle, business process, butterfly effect, buy and hold, capital asset pricing model, Captain Sullenberger Hudson, Carmen Reinhart, collapse of Lehman Brothers, collateralized debt obligation, commoditize, computerized trading, corporate governance, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, Daniel Kahneman / Amos Tversky, delayed gratification, Diane Coyle, diversification, diversified portfolio, double helix, easy for humans, difficult for computers, Ernest Rutherford, Eugene Fama: efficient market hypothesis, experimental economics, experimental subject, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, fixed income, Flash crash, Fractional reserve banking, framing effect, Gordon Gekko, greed is good, Hans Rosling, Henri Poincaré, high net worth, housing crisis, incomplete markets, index fund, interest rate derivative, invention of the telegraph, Isaac Newton, James Watt: steam engine, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, London Interbank Offered Rate, Long Term Capital Management, longitudinal study, loss aversion, Louis Pasteur, mandelbrot fractal, margin call, Mark Zuckerberg, market fundamentalism, martingale, merger arbitrage, meta analysis, meta-analysis, Milgram experiment, money market fund, moral hazard, Myron Scholes, Nick Leeson, old-boy network, out of africa, p-value, paper trading, passive investing, Paul Lévy, Paul Samuelson, Ponzi scheme, predatory finance, prediction markets, price discovery process, profit maximization, profit motive, quantitative hedge fund, quantitative trading / quantitative finance, RAND corporation, random walk, randomized controlled trial, Renaissance Technologies, Richard Feynman, Richard Feynman: Challenger O-ring, risk tolerance, Robert Shiller, Robert Shiller, Sam Peltzman, Shai Danziger, short selling, sovereign wealth fund, Stanford marshmallow experiment, Stanford prison experiment, statistical arbitrage, Steven Pinker, stochastic process, stocks for the long run, survivorship bias, Thales and the olive presses, The Great Moderation, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Thomas Malthus, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, Triangle Shirtwaist Factory, ultimatum game, Upton Sinclair, US Airways Flight 1549, Walter Mischel, Watson beat the top human players on Jeopardy!, WikiLeaks, Yogi Berra, zero-sum game

My first exposure to continuous-time econometrics was as his research assistant, and I have very fond memories of sitting side by side with Jerry in the basement of the Harvard Science Center debugging Fortran code for estimating the parameters of a Brownian motion with an absorbing barrier. And I benefited greatly from the advice, guidance, and inspiration of many other faculty and students during this period, including Dick Caves, Diane Coyle, Ben Friedman, Dale Jorgenson, Nobu Kiyotaki, Whitney Newey, Pat Newport, the late David Pickard, Tom Sargent, Mike Spence, Phil Vasan, and Mark Watson— it’s only through the passage of time that I’ve come to realize just how much impact they had on me. But my biggest single intellectual debt during this time was to Bob Merton, to whom I owe my career in academic finance. Bob’s 15.415 Finance Theory class was a turning point in my graduate education.