Andrew Ferrier

Early this year I wrote about how the French were standing up to anti-smoking legislation. The Dutch are now doing the same. I wish the British didn’t roll over so easily.

Forcing pub owners (or anyone else) to enforce your preferences is wrong and a thoroughly illiberal idea. It makes the world more homogenous and less interesting. Don’t stand for it.

I’m kinda undecided on the BAA break-up. The FT thinks it should definitely go ahead. But as a fairly strict libertarian, and therefore keen on economic freedom, I’ve always had a problem with monopoly break-up except in the most extreme of cases (and I’m not sure this qualifies).

Nevertheless, as my job now takes me onto an aeroplane more than I before, I’m curious and so I read the summary from the Competition Commission’s provisional report. I’m not sure I’m any the wiser, but there were some interesting facts and statistics embedded within:

• Gatwick’s proportion of business travellers is a mere 18%, far lower than I would imagine (I know it’s not strong on the transfer front, but normally appears to have many terminating flights to useful places, from what I’ve seen). By comparison, Heathrow’s is 40%.
• From the set of BAA-owned airports, only Heathrow and Aberdeen have above 20% of transferring passengers, with 34% and 21% respectively. Heathrow’s reputation as a hub is clearly deserved.
• BAA’s airports account for 60% of UK air passengers, but 90% in south-east England, and 84% in Scotland. Maybe there could be a local monopoly at work here, at least?

It’s interesting that the Competition Commission makes lots of slights about poor service, lack of responsiveness to the market, high prices, and so on. This seems a bit unfair. I’ve often wondered how one can gauge the degree of monopoly exploitation fairly, partly there’s rarely an accurate enough free-market alternative implementation to compare it to. The theory does dictate that a monopoly might happen, given some of the stats above, but saying that there is one is a much bigger stretch. This does make me think that perhaps a bit more laissez-faire might go a long way in keeping things market fair – although, as I think they hint at, a bit less regulation would help even things out too.

Why don’t we see this kind of defiance of illiberal legislation more often? It’s something the French do well. In a time when vices are being outlawed left, right, and centre, I’d like to see a bit more bolshyness from the British public.

Good to see Hampshire County Council are spending my taxes wisely. In the propaganda brochure accompanying their latest letter demanding 800 pounds for rubbish collection and clogged roads, I find this item:

These pages have been checked for clarity by Plain Language Commission [sic].

Sometimes I’m ashamed to live in a socialist country.

Every time I get sad about the illiberal attitudes of the public sector in the UK, at least I can reassure myself that I don’t live in France.

The political arguments around government and business are well understood. At one extreme are people who despise profit-making businesses, considering them a necessary evil at best, and who’d prefer to see governments take more action to protect their and society’s interests. At the other are those who’d prefer to see governments scaled down significantly and businesses given more freedom.

People with my political opinions often make arguments for the latter based on either practical or moral arguments. Richard and I had a online discussion about this recently. But maybe there’s another, more silly, question that’s missing: which is sexier: business or government? A quick look at the primary US government portal compared to Wal-Mart’s homepage leaves me in no doubt who hired the better web designer, at any rate (and Wal-Mart is hardly an example of glamour). Which corporate body makes you want to interact with them? Anybody who’s spent any time at a UK local council, with their cuppa-and-rich-tea-biscuit image, will know what I mean (that’s an example of non-sexiness, if it’s not clear: not that I have anything against rich tea).

I’m semi-serious, actually – this does matter – it’s an issue of marketing. Clearly a company cannot actually be sexy – only people can be that. But the Virgin family of companies gets pretty close – and not just because of the suggestive naming. It’s an image that has been carefully cultivated by the folk at Virgin. Virgin is a company that you want to like (well, I do, anyway), irrespective of the fact that their trains don’t run on time.

I think the reasoning behind this is simple. Companies have to be sexy – or at least, they have to project an image which is aligned with values their customers want them to have. Sometimes this is sexiness – and Virgin is a prime example of a brand that’s attacked several markets with that technique and won some new custom. Sometimes, to be fair, there’s another image to be conveyed (UPS brown vans and brown uniforms are not alluring; but they do project an image of reliability). Conversely, government has no such motivation to project an image of anything – or at least the vast majority of unelected officials don’t. There’s no requirement to improve, no motivation to act like a marketer, because there’s no competition. Thus, government will always continue to project an image of dull and incompetent, whether that be the case or not. As Seth says, ‘[people] lose their jobs because of boring marketing’ – except in government they don’t, because they rarely lose them at all.

It’s probably not the most pressing problem the world faces right now, but wouldn’t it be nice to stop worrying about global warming for five minutes and think about how to make the institutions we deal with on a daily basis more appealing?

Today is Milton Friedman day. Friedman is a personal hero of mine, an economist who worked hard to publicise the concepts of freedom and liberty, and who sadly passed away last November. His clarity and forthrightness in explaining his beliefs to the layman won him praise, and deservedly so:

The most important single central fact about a free market is that no exchange takes place unless both parties benefit.

Milton’s son David is also an economist, and continues to promote his ideas on this blog. The Economist has also drawn up an interesting selection of quotes discussing Friedman.

Note: Milton Friedman is unrelated to Thomas Friedman, author of The World is Flat, a book which Roo Reynolds wrote a partial review of recently.

Faffing with the contents of my wallet today in the supermarket, I began wondering about reward cards – are they still worth the plastic they’re printed on? They’ve been around in the UK for over a decade, and two major supermarkets – Tesco and Sainsbury’s – still use them. I have one of each. However, I sometimes wonder why I don’t throw them away – cash rewards of approximately 1% (presumably all that the supermarkets can afford) hardly seem worth the bother of carrying them.

Safeway (now Morrisons) scrapped their loyalty scheme in 2000, citing that it wasn’t worth the money to run it. They may have been right. Nevertheless, Tesco, now the UK’s biggest grocery retailer, still retains their scheme, and as the Economist states, the information goldmine (the only reason the supermarkets run loyalty schemes) is lucrative – although they don’t say exactly how lucrative. Safeway’s decision indicates the margins can be thin. Despite the low return on hassle I mentioned above, though, there are still plenty of takers – empirical evidence would suggest that more shoppers have loyalty cards than don’t.

There have been other issues; for example, loyalty cards came under fire from David Blunkett in 2004 in a fairly obvious attempt to draw away attention away from the problems surrounding the ID card debate:

Mr Blunkett said the cards produced key details about people’s shopping habits but were accepted because they were run by private firms. People should not distrust ID cards because they are a state idea, he said.

…

Holding up a Nectar card, he said people voluntarily signed up to allow such details to be collected through such loyalty cards by private firms. “There is a real issue about how that should be overseen and supervised,” said Mr Blunkett.

Mr. Blunkett presumably ignored the fact that voluntarily signing up to handing over data about tomato-buying preferences was a more respectable practice than being forced to hand over more medical information to travel. Fortunately, his illiberal idea didn’t seem to gain much traction. In all fairness, though, it’s quite likely than many folks don’t know that their data is used in this way; for that, The Guardian deserves some praise for educating the public.

Maybe reward cards will die out eventually. It’s hard to back that up with public data, although I’m sure Tesco have a hard time quantifying the exact benefit they get from theirs (how do you measure repeat custom accurately – with and without the card?). If I’m right, though, I hope they die because they don’t make business sense – not because the government regulates a harmless practice out of existence. Interestingly, Wikipedia alleges that this has already happened in California.

It’ll be interesting to see where the reward industry is in five years time.

Richard and I went to see Steve Forbes (of Forbes magazine fame) speaking last night at an event organised by The London Junto (a libertarianish organisation). The topic was flat taxes, and Forbes made a compelling argument for one – albeit probably preaching to the converted. Forbes has to be one of the most knowledgeable people I’ve ever seen speak – he dealt with economics, business, and geopolitical questions with equal capability, forthrightness, and clarity. He’s a former Republican presidential candidate, and it’s obvious from his winning politician’s smile. The Lansdowne Club is a traditional old-boys London Club (you can tell this partly because they pointedly use the word criterion on their website), and it made a suitable venue, although it didn’t exactly appeal to my taste. All in all, a worthy experiment.

It seems to be a commonly held contemporary belief that transport and travel are a guilty pleasure at best, and reprehensible at worst, mainly due to the unpleasant environmental side-effects, and should be minimised. Environmentalists have already invented carbon offsetting to assuage collective and individual guilt about the trendy problem of carbon emissions (Tim Harford has explained why this makes no sense; and I think it’s nothing short of miraculous how carbon offsetting services can put a price on emissions so easily).

However, the upside is often overlooked. Travel is pleasurable. Some of the best experiences in my life have involved travelling, and I’m far from the only one. Quality of life does have value. Perhaps even more importantly, transport enables you to get stuff more cheaply. Trade is mostly beneficial, and the wider the scope of a market, the more beneficial it is (because of the greater likelihood that you’ll find large extremes of want and produce a large profit). Fast, cheap, reliable transport increases the efficiency of markets and is good for humankind.

Don’t feel bad next time you hop on a jet, and please don’t waste your money on offsetting carbon. Recycling is a whole ‘nother story.