Rory Sutherland

Rory Sutherland

Gifts and guilt

From our UK edition

In a now famous 1993 paper the economist Joel Waldfogel attempted to calculate the economic deadweight-loss caused by giving Christmas presents. His argument was that money spent by a gift-giver on a present would usually have been better spent by the recipient, since the recipient would have a better idea of his own needs and preferences than the person choosing the present. Waldfogel’s most generous estimate rated the ‘efficiency’ of a Christmas present no higher than 90 per cent — so the typical gift was about 90 per cent as valuable as if you had given someone an equivalent amount in cash and allowed him to spend it on himself. He calculated that every year in the United States alone billions of dollars of value were squandered through the exchange of presents.

The leftist case for joining a Pall Mall club

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I recently met a friend at the RAC Club in Pall Mall. Leafing through their brochures, I noticed there was an entrance fee of £2,900 and an annual renewal fee of £1,265. Gosh, I thought, that’s expensive. Except it is and it isn’t. It is expensive when you compare it with other clubs. On the other hand, if you compare it to the cost of owning a second property, it’s a bargain. The council tax on a London weekend flat will be far more than £1,265 a year. And, however nice your flat, it is unlikely to have five full-sized -billiard tables, several squash courts, a swimming pool, a Turkish bath, three dining rooms, a library and a staff of twenty. If you stay overnight at the RAC club, you pay perhaps 25 per cent of the cost of an equivalent hotel.

Change your browser, change your life

From our UK edition

It is safe to say that readers of Condé Nast Traveller and the Sunday Times Travel Supplement will never be troubled by a review of the Holiday Inn Reading M4 Junction 10. Its name will never appear beside Le Sirenuse or the Gritti Palace in lists of the world’s most opulent hotels. The aroma of the bougainvillea does not waft across the underground car-park, not can you sit on your balcony sipping a glass of Frangelico as you watch straw-hatted gondolieri ply their centuries-old trade along the Grand Canal. Instead you get a view of a business park outside Reading. And yet the HIM4J10 (as we aficionados call it) is really a very good hotel. A few of the staff are Indian, which means you can get a really good Chicken Jalfrezi until 11 p.m.

Fryers vs phones

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At her school interview, my daughter was asked to name the most important technology of the modern age. I’m proud to say she answered ‘sewerage’. Some historians now claim the washing machine was, in economic terms, a far more revolutionary innovation than the internet or the mobile phone: it was this which enabled women to enter the workforce. Yet in the past 30 years, aside from the microwave, progress in home appliances seems slow. Dyson’s washing machine went nowhere. In some ways this kind of innovation is difficult: few people replace their washing machine every two years as they do their mobile phones.

Learning to say ‘I don’t know’

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An evil wizard has captured 15 dwarves of rare mathematical genius. He informs them that, the following day, he will make them stand in a circle and then from behind will place a hat, randomly either black or white, on each of their heads. He will then go to the dwarves in turn and ask each to state the colour of his hat. While each dwarf can see the colour of the others’ hats, he can see nothing of his own. If a dwarf answers correctly he can go free, otherwise he will be incarcerated for life. No signalling is allowed between the dwarves — they cannot meaningfully pause before answering, for instance — but they do have a night in a communal cell in which to agree the optimum strategy. How many dwarves can be certain of going free if the best strategy is -adopted?

The myth of self-denial

From our UK edition

It’s a cheap joke, but it cheers me up. When Starbucks started that habit of asking your name and writing it on your cup, I began giving my name as ‘Chantelle’, ‘Monique’, ‘Desirée’ or ‘Pixie’. Then, when I’d collected four or five of these empty cups, I would leave them all lying around in the car to stop my wife getting too complacent. In the same way, I always use a false name when I book an executive car. It amuses me to see a black Mercedes S-Class parked somewhere prominent with a big white card in the passenger window with ‘Monbiot’ written on it.

New kinds of housing

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If the all-party Parliamentary Housing Sub-Committee were to embark on a week-long fact-finding tour of Barbados, it would create a tabloid scandal. Yet it might be a good idea all the same. For among the palm trees they will find remnants of a fascinating housing experiment which began almost 200 years ago, yet which affords a useful lesson for housing policy today. In 1838, when slavery was abolished on the island, plantation owners suddenly found themselves obliged to pay wages to their workers. In an effort to recoup this cost, they churlishly began charging those workers rent for houses they had previously occupied for free. Rents in some cases were so high that emancipated slaves were scarcely better off than before.

Complexity is too simple

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Pojoaque, near Santa Fe, New Mexico This is a magical part of the world — and it’s easy to see why D.H. Lawrence, Aldous Huxley and Douglas Adams were tempted to hang around for a while. When James Delingpole finally gets his act together and leads 10,000 Spectator subscribers into the desert to form a libertarian commune, northern New Mexico should be the first place he tries. He’ll have the blessing of a former two-term governor here, triathlete and Everest mountaineer Gary Johnson, now the Libertarian party’s presidential candidate. As Republican governor, Johnson spent part of his second term campaigning for the decriminalisation of marijuana: when asked of his past drug use, ‘Did you inhale?’, Johnson replied, ‘I barely exhaled.

Old habits make sense

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‘Develop your eccentricities while you are young,’ said David Ogilvy. ‘That way, when you get old, people won’t think you’re going gaga.’ I am 46. And I am happily beginning to discover that a lot of habits I once thought ‘geriatric’ are in fact common sense. I haven’t yet started wearing beige or buying shoes that close with Velcro, but I’m tempted. And last week I gave in to one urge and went around the house compulsively labelling things. I haven’t reached the point where my remote controls and radios have little torn shreds of sticky paper attached to them with hand-drawn arrows labelling buttons ‘video’, ‘Radio 4’ and ‘off’. But I have started labelling all our bloody chargers.

The price of a good reputation

From our UK edition

I have never practised tax avoidance myself. It’s not that I’m particularly virtuous: it’s just I’d rather pay a few thousand pounds to HMRC than spend an hour talking to an accountant. But I was fascinated by the Jimmy Carr affair for one reason. Why was Mr Carr, alone of the thousand or so participants, hounded to withdraw from the Jersey K2 scheme? Innate decency aside, Carr had to withdraw because he is famous and a comedian. A comedian’s career is ‘reputationally fragile’. People need to like you before they’ll laugh at you. (Fatty Arbuckle and Woody Allen are two people who, once tainted by scandal, found themselves ‘just not so funny any more’). The other thousand people using the K2 scheme are neither famous nor amusing.

The tangled truth

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There is a kind of mercantile speculation which ascribes every action to interest and considers interest as only another name for pecuniary advantage. But the boundless variety of human affections is not to be thus easily circumscribed. This is from a sermon by Samuel Johnson. I can’t find the date, but suspect he is having an early pop at Adam Smith, whom he met only once (they didn’t hit it off). Around a hundred years later, here’s Friedrich Hayek, accepting the Nobel prize for economics.

Slaves to the network

From our UK edition

It is a common lament that the British are bad at languages. At first glance, this is inarguably true. Few educated Brits can chat unselfconsciously in French. Yet ordinary Swedes or Dutchmen can tell jokes and explain complicated ideas in perfectly idiomatic English. It’s our fault, isn’t it? Well, not quite. Let’s leave the matter of individual competence behind and zoom outwards to look at the wider ‘network effects’ of learning a foreign language. Let’s assume you are Dutch. It is immediately obvious which foreign language to learn first — English. But for a native English speaker there’s a quandary. Mandarin, Spanish, Arabic, Portuguese or Malay could all make a competing case.

Pushing the envelope

From our UK edition

What’s so good about email? Well, it’s quick and easy for you to write an email, you can copy in lots of people, it’s immediate and it’s free. And the worst thing about email? Well, it’s very quick and easy for other people to send you an email, or to copy you in on an email, and their bloody senseless email arrives immediately. And for bloody free. This is one problem. Almost all the advantages of email accrue to the sender. The effort, obligation and responsibility all fall to the recipient. In that sense email creates what economists call ‘negative externalities’, rather like industrial pollution or aircraft noise. In several respects email is worse than conventional paper mail. Letters come in a batch, once a day.

Divided we stand

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Many Native American tribes would consult a shaman before embarking on a hunting expedition. In one tribe, a shaman would take a caribou bone, carve on it images of the kind of prey the tribe were keen to find (buffalo, deer, trailer-park video-poker addicts) and then place it on a fire. At some point the heat of the fire would cause the bone to split. The hunting party would then set out unquestioningly in the direction of the line of the crack. This is of course a completely insane practice; the kind of irrational, superstitious nonsense that would have Richard Dawkins foaming at the mouth. Except it isn’t. In fact, it’s rather brilliant. One hundred years ago there was no surefire way of predicting where to find a buffalo herd.

The cover-up instinct

From our UK edition

I believe that Lee Harvey Oswald shot JFK. I think the moon landings took place as billed. And Diana’s car crashed into a pillar in the Pont de l’Alma without the assistance of the Duke of Edinburgh. In the last case, I am particularly disinclined to believe in conspiracy theories since, prior to the accident, I had ridden through the tunnel in a taxi several times, the first when I was 11 years old. Each time I had the same thought: ‘God, this is a stupid design for a tunnel.’ It contains a long series of square concrete pillars along the central reservation, separated from the road only by a couple of feet and a feeble kerb. It is now 15 years since it saw the most famous car crash in history, yet no guard-rails have been installed.

More Canada!

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The more elderly among The Spectator’s readership, who still secretly mourn the loss of Nyasaland and the Aden protectorate, may be pleased to hear that a small step was taken last month towards reversing the Empire’s inexorable decline. More surprising still, the idea behind this expansion comes from an American economist and the flag raised will be not the red ensign but the maple leaf. But it’s a start. The original proposal (mentioned here three years ago) is to create ‘charter cities’ in the developing world where the institutions, infrastructure and government are not those of the surrounding nation but are imported wholesale from somewhere else.

The Wiki Man: Not-so-basic instinct

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As someone who has a panic attack when the Sky box fails to work, I am fascinated by people who stay calm in a major crisis. Hence I love listening to cockpit voice recordings on YouTube. Among the best are Apollo XIII and ‘US Airways Flight 1549’ — the ‘Miracle on the Hudson’. With both engines of an Airbus A320 knocked out by a birdstrike, captain Chesley B. Sullenberger III is offered an emergency landing at Teterboro. He pauses for a second. Then: ‘We can’t do it…. We’re going to be in the Hudson.’ At this point, it is worth noting a few facts about the pilot. He was 57 at the time, an age which would disqualify him from many airlines.

The Wiki Man: Double crossed

From our UK edition

There is no shortage of competitors for the strangest site on the internet. ‘The Britney Spears Guide to Semiconductor Physics’, for instance. Or gooseduds.com — an essential website (essential, that is, if you have ornamental garden geese and feel the urge to dress them in seasonal clothes). Or hatsofmeat.com, a website that shows exactly what its name suggests. But, after 18 years of surfing the web, last week I stumbled on a page more ridiculous than any of these. I live in Kent. Getting to Heathrow is a nuisance. The south-western stretch of the M25 is often congested, and the journey is made slower by Surrey’s habit of imposing random and gratuitous temporary speed limits on its section of the M25 to boost speed-camera revenues. Never mind, I thought.

The Wiki Man: Tailor-made television

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I could paint a Mona Lisa, I could be another Caesar; Compose an oratorio that is sublime. The door’s not shut on my genius – but I just don’t have the time. Like Flanders & Swann’s sloth, many people are secretly convinced that they could write a masterpiece. Almost everyone also believes that they could start an internet business — if they only had the time. I once considered starting a micro-swearing network called Touretter — an angrier version of Twitter. And a group of us recently debated starting Farmville: The European Union Edition. This was to be an online farming game where you own a tract of virtual land and then receive huge sums of imaginary money for doing absolutely nothing.

The Wiki Man: Tips from Kant on taxes and phone bills

From our UK edition

On tax policy I find I am now a Liberal Democrat. This is a bit of an identity crisis for me. A bit like coming out. Or waking up as a giant insect. But I just really like Gloria Gaynor — sorry, I meant not taxing earnings under £10,000 a year. And the musical theatre — sorry, mansion tax. It just feels instinctively right. It’s this fairness thing that works for me. The same for the tycoon tax. I like the principle. After all, it is not the only function of a tax system to increase revenue — you must also preserve the consensus that the system treats everyone equally. Sweetheart deals with multinational corporations or loopholes for billionaires violate this principle.