politics

Four ways economists helped usher in the “post-fact” era

We are entering, it is said, a post-fact era. Populist politicians dismiss data and expertise out of hand, and the UK and US publics seem to nod along. Michael Gove, a UK MP campaigning for Brexit, summed this up simply: “people in this country have had enough of experts.”

This comes at a time when good-quality expertise and data have never been easier to access. Fact-checkers, explainer websites, data journalism and gigabytes of open data are all a click away.

And yet despite all this, in 2016 so far, numbers themselves seem to be under assault by a populist insurrection. We could blame populist anti-elitism, innumeracy, racism and xenophobia – and indeed we should. But economists (including economic journalists) must also consider our role.

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Taking Supermarket Sociology (a bit) Seriously

The British take their class system seriously: seriously enough to extend it to the humble grocer’s. This seriousness explains why a recent off-hand (but ill-considered) comment from David Cameron on the verbosity of Waitrose customers provoked a storm of controversy – albeit a storm in a tasteful white Portmeirion teacup. He said:

I shop at various different supermarkets. I’m going to be honest with you. When I’m at home in the constituency I go to Sainsbury’s in Chipping Norton, because there isn’t a Waitrose. When I’m having a day in the central town in my constituency I go to Waitrose in Witney. In London, as I’ve said, it’s Ocado delivered, after it’s got through all the security.

I have got an interesting piece of supermarket sociology for you, which is that there’s something about Waitrose customers – they are the most talkative. I find if I shop in Waitrose in Witney it takes me about twice as long, because everyone wants to stop you and have a chat, whereas in other supermarkets I find I can dart round very quickly. That’s something about your customers. They’re very talkative, engaged people.

I observe the socio-economic segmentation of supermarkets daily. My nearest tube station, Shepherd’s Bush, is equidistant from a Waitrose and a Morrisons.

Morrisons is like a supermarket of the 1990s: crowded, badly lit, slightly odiferous, but nonetheless my go-to for junk food. It is located in the West 12 shopping centre, which was no doubt the last word on retail in the Bush until 2008, when Westfield bulldozed swathes of White City to build a megamall, in what is best seen as high-concept performance art celebrating the centenary of Australia’s 32-3 victory over Great Britain in the 1908 Olympic Rugby Union gold medal match (also at White City). But I digress.

Westfield brought with it a new grocer-champion. Clean, modern, spacious and olfactorily unimposing, Waitrose is stocked with products like “carmargue rice” and “essential broccoli florets”. Because sometimes whole broccoli just won’t do.

These are the retail neighbours of Waitrose:

Waitrose White City retail neighbours

And these are Morrisons’ co-tenants:

Morrisons Shepherd's Bush retail neighbours

The bottom line: whether your turn left or right out of Shepherd’s Bush tube for your shopping is as good a reflection of your socioeconomic status as any of the official measures. David Cameron inadvertantly struck this nerve, the just-below-the-surface class consciousness that pervades British society. “Elitism!” cried Labour politicians and Guardian columnists, licking the carmargue rice and fleur de sel from their lips as they gleefully dissected his gaffe.

Politics aside, Cameron’s inference was badly flawed. Customers of Waitrose are almost certainly not more ‘talkative, engaged people’: they’re just more Conservative. Ignoring that you’re, say, the Conservative Prime Minister, in this situation, is a rather egregious example of experimenter bias, an oversight not at all worthy of the kind of ‘supermarket sociology’ to which Cameron aspires.

No, if you want to do supermarket sociology, I thought, you should do it properly. If England is, as Napoleon would have it, a land of shopkeepers, then what can we learn from her shops – through careful compilation of data, rigorous analysis, and just a touch of design kitsch?

The Warring States of the British AislesQuite a bit it turns out, so in honour of the new season of Game of Thrones, I now present the Warring States of the British Aisles. This map colours Great Britain (the Westminster Constituencies, in fact) by local variations in major supermarkets’ market shares.

It does not show market share itself – that map would be virtually all Tesco, as you can see to the below right.

Market Share of Supermarkets in UK (red = the spilt blood of Tesco’s vanquished rivals. Er, metaphorically speaking.)

Instead I coloured it to reflect local variations in market share: for each constituency, the chain whose market share most exceeds its national market share wins, and the area is coloured accordingly.

There are two main assumptions behind this: the first is a bit of educated guesswork on the retail areas of various supermarket formats (local, superstore, extra, etc.); the second is that turnover scales with retail area. Both assumptions introduce error, but I doubt it’s too serious.

Finally, for everything you ever wanted to know about supermarkets in the UK, much you didn’t, and a few things you’ll desperately wish you could forget, I enthusiastically recommend the Competition Commission’s 2008 report into the groceries market.

(As a postscript, it’s worth noting that Australia doesn’t really have this supermarket segregation, that I’m aware of, but it’s not so much because of our much-vaunted ‘classless society’ as it is that the top two chains have around 80% market share together, leaving little room for differentiation.)

In defence of the ‘Killer Phone’

"Killer Phones" - ABC 7.30, 5 March 2014

The ABC’s 7.30 has a report tonight on ‘uncrackable phones’ allegedly being used by bikies to commission murder. The segment was calmly and rationally titled ‘Killer Phone’, a reminder that Aunty’s flagship is not above tabloid sensationalism. It featured a parade of interviews casting doubt on these ‘uncrackable phones’, made by Phantom Secure, but not a single voice in defence of them.

‘Are these phones, for example, being used to kill?’ asks Dylan Welch, the reporter, bringing to mind James Bond’s proto-smartphone from Tomorrow Never Dies, which included a stun-gun amongst its many tricks.

Instead of a stun-gun, however, the ‘killer’ feature these phones offer is ‘military grade’ encryption, that is, the ability to encode communications so that only the intended recipient can decode them.

Let’s, right now, demystify the ‘powerful’ and ‘military grade’ encryption these phones use. Encryption per se is commonplace. Your internet banking connection is encrypted; your ATM transactions are encrypted in transit; your wifi network is encrypted. There is nothing sinister about this.

‘Military grade’ encryption is harder to tie down: the manufacturer’s website doesn’t specify what encryption they use, except that it uses ‘the same technology that government agencies and large corporations use to protect their communications’. That probably refers to AES encryption, which, incidentally, is also used by Skype when you call your parents on Mother’s Day.

The reporter goes on: ‘Phantom Secure phones are marketed as a legitimate business tool, but they are also increasingly popular among the criminal underworld.’

Now read that sentence back but replace ‘Phantom Secure phones’ with ‘Phones’, ‘Cars’, ‘Computers’ or ‘Reading and writing’.

Cars are marketed as a legitimate business tool, but they are also increasingly popular among the criminal underworld.

We’ve been here before, in the 1990s, when public availability of cryptography was a high-profile public policy issue in the United States. President Clinton, on the advice of the NSA, actively campaigned for the adoption of the ‘Clipper chip‘, a voice-encryption chip that included a ‘backdoor’ allowing the US government to decrypt any call. The proposal was ultimately defeated, for good reason: a backdoor for the authorities is a backdoor for anybody who has the right key. Similarly defeated were strict controls on the export of strong cryptography, as it became clear that the benefits of such encryption, available globally, outweighed the costs. The ubiquity of online commerce today probably owes much to that decision.

And yet the Australian Crime Commission (ACC) seems to want to revisit this question in Australia.

Every new technology must be evaluated in a critical light: it is trite, and naive, to note that technology is value-neutral, neither good nor evil. There are technologies we collectively choose to regulate, trading a little of our liberty for a lot of security: guns and other lethal weapons; nuclear fission; even ammonium nitrate fertilisers (from which bombs can be made).

But communications technologies should never be in that category (except perhaps in times of war, in the face of an existential threat). Yes, encrypted messaging makes it harder for law enforcement agencies to eavesdrop on conversations. But so does passing notes by hand. Or invisible ink. Or meeting in a crowded theatre. If Edward Snowden’s revelations taught us anything, it is that the state and its enforcers have a vast arsenal of techniques for collecting intelligence and evidence. Losing this one reduces security, a little. It strengthens liberty immeasurably. Snowden himself relied on the now-defunct encrypted email service Lavabit to communicate with journalists. Wikileaks uses encryption to protect vulnerable whistleblowers.

Liberty is built on a bedrock of free – and private – speech. Any attack on encrypted communication is an attack on communication itself. Indeed, acting head of the ACC, Paul Jevtovic, pretty much acknowledges this in response to that first, so very leading, question from the interviewer (a reminder: ‘Are these phones, for example, being used to kill?’). He replies

‘Encrypted communications, and communications more generally, are used across a range of criminal acts in this country…’ [emphasis added]

Perhaps the piece should have been titled “Killer Speech”.

(Note: I’m defending the concept of unregulated encryption, not the Phantom Secure product in particular. The hype-filled website and security-though-obscurity makes me pretty sceptical of their claims.)