Truck Off

To all those who support the fuel protests.

The UK government has a "windfall" of perhaps a billion pounds because of the rapid price in the price of oil, partly through increased sale price of North Sea crude and partly through increased tax revenues on processed petrol and diesel.

We have two ways to distribute the money:

1a. Use the extra tax revenue to appease a bunch of loud-mouthed fat bullies who use their tankers to block up the roads and cause disruption to millions
1b. The majority of the benefits go to those who use the most fuel. Hummer owners benefit more than hybrid owners.

2a. Use the extra tax revenue to raise the minimum tax threshold
2b. The majority of the benefits go to the poorest members of society, those who can least afford extra fuel costs.

There are a lot of selfish bastards in this country.

Fuely Truckers

Sorry for the spoonerism. But clearly I don't go with the flow here.

As the tanker strike wound on yesterday, the enterprising owner of a fuel station changed forecourt price to align demand with the change in supply. It was exactly the same procedure that he had been doing for the other 364 days of the year. Exactly the same procedure that every other fuel station manager also does all the time. Exactly what every businessman needs to do to survive.

But fuel price watchdog petrolprices.com put out the nonsensical statement: "Putting the price up so much at a time when drivers in the South West are being hit worst by strikes is inexcusable."

The tabloids deliberately stoked up the hysteria, then did everything possible to prevent sensible mitigation of its consequences.

The undercover economist got it right. The nation got it wrong.

Fuelling national hysteria

As I've just written on speed cameras, I may as well get this out of the way before the tabloids start encouraging the selfish bastards to start blockading roads again. So time to spell out the same basic economics.

Yes, taxes make up a large proportion of fuel price. But if we are to reduce tax, then we have a choice between lowering tax most for those who earn the least, or lowering tax most for those who generally drive the most expensive vehicles.

Taxing fuel rather than other things has other secondary effects such as discouraging urban sprawl and encouraging high street rather than mall shops, reducing traffic congestion while encouraging walking and cycling. Sorry about that.

There are winners and losers in every choice. But we should choose wisely.

Third World Economics

in 200 words.

Five things that are not significantly cheaper in the developing world, for example in the city of my birth compared to the city of my work:

1. Computers. Despite the image of India as a cheap IT supplier, the hardware is expensive.
2. Appliances and gadgets. The things that litter your home.
3. Fuel. Most of it is imported, and OPEC controls the price.
4. Clothes and food. This might surprise, but especially true of branded products.
5. Land. Obviously.

Five things that are much cheaper in the developing world, for example in the city of my birth compared to the city of my work:

1. A haircut. Fifteen pence is standard in a salon, obviously it's much less on the streets.
2. Public transport. Still less than ten pence a ride.
3. Nursing care. A couple of pounds per day.
4. Plumbers. A pound, for a job taking many hours.
5. Taxi fares. An hour's journey can cost a pound, who knows how the driver covers fuel out of that.

It's obvious really, the cheap things are services, the expensive things are products.

Equally obvious then, the people who provide the services cannot afford the products.

Economics Semiotics Idiotics

Tim Harford in the FT today pondered an eternal enigma: why do prices so rarely rise in the face of a shortage. For example, if there are more UK fuel disruptions, then it would be logical for petrol stations to increase prices instead of allowing huge queues to build up for tiny rations of fuel.

He does not give a complete answer, hence the use of the word "enigma" in his title. But he offers: The intuitive explanation, of course, is that we irrationally object to high prices even when the alternative is rationing, long queues, and uncertainty over whether we can buy what we really want.

I agree, but the "irrational objection" is just the part of human nature that would prefer to see "everyone" suffer equally instead of distributing critical products by financial capability. It appears that the son of the noted monetarist Milton Friedman also suggests evolutionary psychology could explain this sub-optimal behaviour.

But the whole article talked only of price rises. Remember that a previous price is only a signal, I still think consumer reaction to price cuts is equally idiotic.

Flying Windows

This is certainly not about Bill Gates' damn screensaver, in fact it is not about computers at all.

Recording the highest pre-order numbers ever, Boeing have just released their new "Dreamliner". It does not look like a revolution in design, but it is expected to be lighter, faster, safer and more economical than current planes.

The first modern jet airliner was the De Havilland Comet, and every structural engineer today knows that they crashed "because they had square windows". Probably not the full reason, but the tiny cracks of metal fatigue were initiated and exaggerated around the window corners where the sheet metal had been cut. Basic science. That is why modern planes tend to have rounded windows.

But even circular windows are not ideal. Obviously the pilot should have good all-round visibility, but the many windows down the side of an airliner are a major inconvenience for the aircraft designer. An aircraft wall with windows is much heavier than an equivalent one without. It would be cheaper to build and cheaper to fly. An airliner without side windows would also, remember the Comet, be less prone to structural failure and therefore safer too.

On the ground where we spend most of our time, natural conditions are a good thing. Broadly, we should be more in tune with our local environments. Maximising natural light and minimising energy consumption are fine goals for your home. However when flying through the air at hundreds of miles per hour in a giant metal tube burning gallons of fuel every second, then a little extra power to light inside the plane is insignificant. And we have already said the plane would be less heavy thus more efficient anyway.

When we travel long haul, our body clocks are invariably disrupted. Jet lag is not pleasant. During a long east-west flight, day and night lose their meaning, or at least become severely distorted.

It would be good if the lighting in the plane could help us to compensate for that. Imagine, the whole ceiling of the plane could be a uniform grey as it leaves the UK and gradually become a bright blue as we near the tropics.

With fewer windows, we wouldn't have people with blinds open with searing sunlight spoiling our inflight movies.

And we would have cheaper, safer air travel.

Stimulating the MPG-spot

The opening line of a recent high profile article, you'll probably have seen these results elsewhere too:

A study commissioned by a phallically named insurance company proves beyond all doubt that the unbridled roar of an Italian supercar turns women on but the soft purr of a fuel-efficient econobox doesn't stimulate anyone's MPG-spot.

It's from a respected source, Wired. It specifically says "proves beyond all doubt".

David Moxon subjected 40 men and women to the sounds of a Maserati, Lamborghini and Ferrari, then measured the amount of testosterone in their saliva. He found everyone had higher levels of the stuff -- a measure of their arousal -- after hearing the revving exotics, but the amount the women had was off the charts.

According to a woman who actually read the study: "Testosterone increases in a number of situations besides arousal. For example, when a person is feeling aggressive, their testosterone goes up. I don't know about anyone else, but loud engine noises annoy the crap out of me. So were the people with higher testosterone levels fantasizing about sex in the greedmobiles or were they fantasizing about taking a sledgehammer and beating them into little, tiny, noiseless pieces?"

The study was commissioned by the ultra-exclusive British insurer Hiscox (we swear we're not making this up), which was curious to know how people respond to high-end luxury cars.

The research was funded by a company that specialises in high performance vehicles. If the results encourage more people to buy small volkswagens then less revenue for the insurer. If it appears to encourage high performance sales, even slightly, then potential win for the study sponsor. It's about the most prejudiced sponsor you could imagine. It's like a study funded by a vitamin pill salesman suggesting that people who take vitamin pills are more healthy.

"We knew owners of luxury cars felt a connection with the sound of their vehicles," says Steve Langan, managing director of the insurance company. "We have now scientifically proven the physical attraction people feel when it comes to cars."

Scientifically proven? Bullshit.

Wacky Taxes

Where I completely agreed with the economic adviser to George W Bush. Five quotes from Greg Mankiw:

1. voters are worse than ignorant about basic economic principles of good policy. Ignorance, at least, would have the virtue of being random and so perhaps would average out to zero in a large population. Instead of being merely ignorant, voters hold onto systematically mistaken beliefs.

2. To many economists [and to me], the basic argument for increased use of Pigovian taxes is so straightforward as to be obvious. But as George Orwell once put it, "We have now sunk to a depth where the restatement of the obvious is the first duty of intelligent men."

3. A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving.

4. even if God came down today and told us that global warming was a complete hoax, the case for a much higher Pigovian tax on gasoline would survive, for the simple reason that every time you get in your car and drive, you inconvenience other drivers with increased road congestion and you put them at increased risk of being in a traffic accident.

5. dispel a common fear about higher Pigovian taxes, such as taxes on carbon or gasoline--that they will fall disproportionately on the poor.

Exactly what I said.

I should point out that although "I completely agreed with the economic adviser to George W Bush" in this particular case, George W Bush did not agree at all. Obviously. Because although I too get criticism for the same views, the economic advice was perfectly sensible.

Honk if you support us

Obviously I touched a nerve with the last note. It was intended. In survey after survey, the vast majority of people always respond positively when asked "would you prefer lower fuel taxes?". But it's a really stupid question if phrased that way, without presenting an alternative, like compensating higher taxes elsewhere.

And I've said before that the notes here consciously try not to reflect popular opinion anyway. They should make you think different, if only for a moment.

The reason that truckers block roads is because they find it easy to block roads. A different economic change could cause disproportionate hurt to equal numbers of office cleaners, care assistants, supply teachers, airline pilots, organic farmers, whatever, but they can't all disrupt the whole country so easily. And they don't find it so easy to hoodwink the public with nonsensical survey questions.

And even when a road is not completely blocked, the go-slow or lane restriction always causes jams. Drivers slow down to avoid or gawk. No you prat, I'm not honking because I support your selfish bullying tactics, I'm honking because I want you to get out of the bloody way.

I'm reminded of a joke, this one.

The Big Title

Why did I name all this Common Sense in the first place? Because I maintain that even the most complicated developments usually follow very basic statistical rules, and it is only ignorance, delusion, cowardice or psychotic denial that fuel nonsensical models of reality. But although the phrase may have been original and accurate in 1776, today it has been over-used to the point where it is losing impact. So what else could I have called this?

Rana's Gently Holistic Detection Agency - accurate, and it reflects the "fundamental interconnectedness" of everything here, but it's possibly too derivative and too personal

I Don't Believe in Ghosts - well that would have been the unusual title for my newspaper column or book if I had been a famous footballer

Uncommon Sense - nice, but it seems that many others already think they own the phrase.

Simple Answers to Complicated Questions - I like that, it is what we strive for, and it also echoes Darwin's Dangerous Idea

Hmm, I'm ok for now, but it's never too late to change ...

Big Car Small Car

There are still a lot of big cars in America. A colleague in charge of certain North American automotive metrics today pointed me to a recent study from Duke University's Fuqua School of Business that proved the regularly quoted mpg figures are often misleading.

Simple numerical facts. As usual here, considering my own example instead of copying that from the study:

First car is a typical one, one that does 30 mpg. Could increase by 10 mpg to give 40 mpg.
Second vehicle is a large SUV. It does 15 mpg. Could increase by 10 mpg to give 25 mpg.

Where is the bigger benefit? Both increase by 10 mpg so benefit is the same, right? Wrong.

First increases mpg by 33%, second increases by 67%, so the second gives twice as much benefit, right? Wrong.

Say the SUV increases only by 33% like the first case, 15 up to 20 (corresponding to 30 up to 40). The benefit is the same, right? Wrong.

If the SUV increases only from 15 to 18 mpg, it still saves more fuel than increasing the car's mpg from 30 to 40. I've said it before: However far the journey.

The Europeans have been using litres per 100 km for years. It just makes more sense.

Price Fixing

British Airways got hit with a very hefty fine last week. It was for colluding with another airline to add on exactly the same fuel surcharges . Virgin Atlantic was equally guilty but so far as I can tell they got away with paying nothing because they reported the offence. Things don't work that way here, if you are equally culpable of a crime then admitting it provides mitigation and can reduce the sentence, it does not eliminate it. If individual criminal justice worked like that, imagine what you could get get away with …

Yesterday I went to PC World and bought a printer for the business. £29.99. Perfectly reasonable. Looking around any shop or site these days, that's a fairly normal price for a mass-produced shoebox-sized block of shaped plastic and metal with a few electric motors, transistors, integrated circuits, some consumables and a small book of documentation. The costs of production, transport and marketing must be fairly close to that. So I don't bother hunting around online to save a few percent.

At the checkout, the cashier told me that I also needed to buy a cable to connect it to the PC. The cable probably has less than a thousandth of the materials and complexity of the printer. They said the only cable available was £14.99. Eventually, when I had finally stopped laughing, I walked next door to Currys Electrical. You can guess the price there.