Mavericks, mistakes and mum

I caught up earlier this week on the drama Castles in the Sky about Robert Watson Watt and his invention of radar. My mum had been a young (18) radio location operator on the outskirts of London during the Second World War and liked to talk about it, so I was very interested, and thoroughly enjoyed the programme. It turns out there is an active Robert Watson Watt society which is raising a statue to him in his birthplace, Brechin. I knew nothing about him before this.

Kathleen Coyle is in this group of early radar operators

The story very much brought to mind two excellent books. One is Tim Harford’s Adapt, about the structures that enable significant innovation – the ability to accommodate mavericks and mistakes, the importance of skunkworks and so on. The other is Most Secret War by R.V.Jones, about scientific intelligence during the second world war, including the decryption and encryption work at Bletchley Park. It’s also concerned with this question of how ideas work and fruitful failure can mesh with bureaucracy and order, and with the deep problem of information, the signal and the noise.

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Where’s the plan?

Exciting news – the next ‘Perspectives’ title will be launched very soon and it’s Kate Barker on how to tackle the housing market’s problems. Housing: Where’s The Plan? is officially out in a couple of weeks but can be ordered now. Kate, as well as being a former member of the Monetary Policy Committee, wrote two major reports on planning and on housing supply a decade ago, so we are delighted to be publishing her follow-up recommendations.

To quote the blurb from present MPC member David Miles: “No one can speak to the housing supply issues facing the UK with the same authority as Kate Barker. This clear, concise analysis of UK housing issues makes a series of policy recommendations that are both feasible and desirable. An excellent account of the state of UK housing – admirable in its coherence, clarity and precision.”

As the book points out, housing policy has multiple aims and there are unavoidable trade-offs. That means no silver bullets. But she does have a list of meaningful policy reforms to suggest.

A dose of David Hume

David Hume, A Treatise of Human Nature, Book 1, Introduction:

“’Tis evident, that all the sciences have a relation, greater or less, to human nature; and that however wide any of them may seem to run from it, they still return back by one passage or another. Even Mathematics, Natural Philosophy, and Natural Religion, are in some measure dependent on the science of Man; since they lie under the cognizance of men, and are judged of by their powers and faculties. ’Tis impossible to tell what changes and improvements we might make in these sciences were we thoroughly acquainted with the extent and force of human understanding, and could explain the nature of the ideas we employ, and of the operations we perform in our reasonings …… If therefore the sciences of Mathematics, Natural Philosophy, and Natural Religion, have such a dependence on the knowledge of man, what may be expected in the other sciences, whose connexion with human nature is more close and intimate?”

In other words, understanding human nature is the foundation of all knowledge. And science needs social science.

All the way from the Stone Age and back again?

There’s a growing genre of books, the long sweep of human history from a social science perspective. The ur-text must be Jacob Bronowski’s The Ascent of Man (the DVD of the series is still available and, I think, still fascinating despite being so old-fashioned.) I suppose the recent wave started with Jared Diamond’s Guns, Germs and Steel (1997), and more conventional economic histories such as David Landes in the Wealth and Poverty of Nations (1998). More recent contributions have come from Ian Morris, with Why the West Rules – For Now (2011) and The Measure of Civilization (2013), and Diamond again with Collapse (2005).

The latest is Yuval Noah Harari’s Sapiens: A Brief History of Humankind, just published in the UK with a lot of publicity razzmatazz. I’ve not read it, just this extract in The Guardian. It touches on how we measure progress, and is happiness a better aim than GDP. It isn’t entirely clear to me what the conclusion is – that we were happier in the Stone Age? To which the answer is surely the economist’s sceptical revealed preference argument: see how many voters want to revert to a hunter-gatherer society. Or is Harari instead arguing for giving evolution a bit of a boost?

“Humans are not adapted by evolution to experience constant pleasure, so ice‑cream and smartphone games will not do. If that is what humankind nevertheless wants, it will be necessary to re-engineer our bodies and minds. We are working on it.”

The state and the energy market

Dieter Helm knows more than most people about the UK energy market. His website is packed with useful papers, and I really enjoyed his recent book The Carbon Crunch. He has another one due out next year, Natural Capital: Why It Matters – Prof Helm chairs the Natural Capital Committee.

This week I read through one of his older books, Energy, the State and the Market: British Energy Policy Since 1979, published in 2003, having only dipped into it previously. It’s an excellent, detailed account which intertwines economics, history and political analysis – as any rounded understanding of energy markets would require. Energy is so fundamental to the economy that it will always be a political issue, and private ownership simply changes the role of the state from producer to regulator.

Although obviously written long before the recent concern about prices and market structure, now being scrutinised by the Competition and Markets Authority, the book makes plain the inevitable trilemma: efficiency, affordability and sustainability. The political debate has got no closer to acknowledging the unavoidable trade-offs in the 10 years or so since the book was written.

There is, by the way, a good comment here on the University of Manchester Policy blog on the market reference by Martin Stanley, former Chief Exec of the Competition Commission.

The other thought prompted by reading the book it is how terrifically complicated the markets for gas and electricity are – and how constrained the future choices are by past investments and institutional structures. I thought I knew this already, as I’m a member of a stakeholder advisory panel for EDF Energy in the UK, but seeing all the detail set out in one place has really underlined it. It is striking in Helm’s account how frequently major, disruptive structural decisions have been taken on the basis of assumptions about oil prices and growth that have proven massively wrong. Not a very cheering read after news this week that the National Grid is seeking emergency supplies because it expects electricity shortages this winter.