Stumbling and Mumbling

The left & freedom

Tyler Cowen says leftists:

don’t have nearly enough Mill in their thought, and not nearly enough emphasis on individual liberty...This is one reason why the commitment of the current Left to free speech just isn’t very strong.

This poses the question: what might be the links between leftism and a Millian assertion of the virtues of free speech?

One upon a time, the answer would have been obvious. Liberals believed that free speech and intellectual progress went together. In a fair contest, it was thought, science would beat religion and liberal equality would beat obscurantism, sexism and privilege. This seems no longer plausible. A proliferation of voices allows people to choose to hear whichever ones support their own prejudices. And even when they are confronted with conflicting evidence, people are asymmetric Bayesians: they question opposing arguments more than supporting ones, and so end up reinforcing (pdf) their own prejudices.

One old “progressive” argument for free speech thus seems weak. There are, however, two other reasons why leftists should embrace the principle.

One is simply that laws will be used by the powerful against the powerless. As Nick Cowen says (pdf), laws against extreme pornography can be used to repress sexual minorities. And similarly, restrictions of free speech will be imposed upon people with low-level mental illnesses whilst leaving hate-mongering newspapers free.

But there’s something else. One of the enemies of the left should be people’s sense of certainty. Bosses’ sense that they are certain how to run a business leads to coercion and alienation - and to inequality as he demands mega-millions for his “talents”. Neoliberals’ certainty that recessions can be avoided with the right policies leads to the erosion of social safety nets. And the denial of complexity leads to a misplaced confidence in “experts” and hence deference to the rich and powerful.

One case for worker democracy is that bosses are very fallible, and so their control of the firm should be tempered by the dispersed and fragmentary knowledge possessed by others. And one argument for redistributive policies is that we are too fallible to predict recession and so we need risk-pooling institutions such as a generous welfare state instead.

It’s this same (misplaced) certainty, though, that leads to the repression of speech. One of Mill’s objections to such repression that the man who advocates it “assumes infallibility”. Those who want to silence an opinion, he wrote…

of course deny its truth; but they are not infallible. They have no authority to decide the question for all mankind, and exclude every other person from the means of judging. To refuse a hearing to an opinion, because they are sure that it is false, is to assume that their certainty is the same thing as absolute certainty. All silencing of discussion is an assumption of infallibility

In this sense, illiberal tendencies spring from the same source as some inegalitarian ones – from the assumption of infallibility by those in power. To this extent, the assertion of freedom and of substantive equality go hand-in-hand.

Don't blame the media

Progress says that Labour should stop blaming the media. I agree. People don’t vote Tory simply because newspapers tell them to do so - if they did, Labour would be even more unpopular than it is – although it’s possible that the media shapes voters’ perceptions in other ways (pdf), such as by promoting mediamacro and bubblethink*.

However, there’s something that Progress doesn’t say. It’s that voters can have mistaken ideas for reasons other than media influence. We know, thanks to the work inspired by Daniel Kahneman, that we are prone to many cognitive biases**. Isn’t it possible that these systematically distort voters’ thinking? For example:

1. “People are remarkably poor at combining causal links into a system” say David Leiser and Zeev Kril. This causes them to fail to see the connection between austerity and low wage growth and to fall for daft metaphors about the nation’s credit card***.

2. The fundamental attribution error causes people to over-estimate the role of character in causing personal success or failure, and under-rate the role of luck or environmental factors. This leads them to blame the poor for poverty.

3. The salience effect means causes people to over-estimate the number of benefit cheats: the dole fiddler who’s down the pub is more visible that the housebound disabled person. This leads to unfounded hostility to claimants.

4. Overconfidence and the optimism bias cause us to under-estimate our chances of falling on hard times, and thus reduce demand for a social safety net.

5. Adaptive preferences can cause people to resign themselves to poverty and inequality.

6. The illusion of control causes people to over-estimate the chances of them escaping the working class through their own efforts, and so under-estimate the importance of collective class action .

7. The anchoring effect means that perceptions of the desirable level of inequality are shaped (pdf) by actual inequality – which implies that as inequality increases so too does acceptance of inequality.

8. The status quo bias and just world illusion help to sustain support for otherwise dubious social structures. As John Jost writes (pdf):

Just as individuals are motivated to hold favourable attitudes about themselves and the social groups to which they belong, they are also motivated to hold favourable attitudes towards the social, economic and political systems in which they live and work.

9. Experiments by James Andreoni and Justin Rao have found that (pdf) communication “greatly influences feelings of empathy and pro-social behaviour.” To the extent that we hear much more from the well-off than we do from the very poor, this leads to disproportionate sympathy for the rich.

You might think all this is a Marxist talk of ideology. It is. But I’m also echoing Adam Smith:

We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. (Theory of Moral Sentiments, I.III.29)

I fear, however, that both wings of the Labour party are loath to see all this. On the right, it’s because they regard politics as a marketing exercise which takes preferences as given. On the left, it’s because it’s easier to blame a few billionaires than to see that the public would be biased against them even without media influence. Until this changes, however, and Labour asks itself how to address the problem of cognitive biases, the party might remain in trouble.

* I suspect the BBC should be scrutinized more closely than it is in this regard.

** Since I began to read about these biases, I’ve seen them everywhere – which is of course an example of the confirmation bias.

*** Bone-headed libertarians please note that this also helps explain why free markets are unpopular with the public.

Scarred by history

Sarah O Connor, echoing a point recently made by Minouche Shafik, fears that millennials have been frightened by the crisis into being too timid to push for better wages. I sympathize..

One of my favourite theories about the long post-war boom is that wage inflation was low in the 1950s despite full employment because workers remembered the Great Depression of the 1930s and so were too scared to exploit their bargaining power to demand higher wages. However, as those who remembered the 30s retired to be replaced by those who had only known full employment, wage militancy increased in the 60s and 70s.

It is, however, not just workers who can be cowed by memories of hard times. So too can be stock market investors. Ulrike Malmendier and Stefan Nagel have shown (pdf) that Americans who experienced recessions in their formative years hold fewer stocks and more cash than those who experienced better times even decades later. Other research (pdf) has found that much the same is true of Europeans. What’s more, those scarred by recessions tend to hold more value stocks and fewer growth ones.

In fact, it’s not just bad economic experiences that have a scarring effect on risk attitudes. Alessandro Bucciol and Luca Zarri have found that people who suffered the death of a child or natural disaster are also more risk averse years later.

All this is consistent with Hyman Minsky’s financial instability hypothesis (pdf) – the idea that economic stability is inherently destabilizing. Traders who have only known good times are likely to take on more risk, thus increasing financial fragility. And when the bust comes, it increases risk aversion thus giving us a period of financial stability which eventually increases appetite for risk. And so on.

Other research by Professor Malmendier corroborates this. She’s found that banks (pdf) that were under-capitalized and fragile many years ago operate today with higher capital buffers. Organizations can have memories as well as individuals.  

It’s not just financial investments that are affected by such scarring. So too are non-financial ones. Still more research by Professor Malmendier has found (pdf) that “CEOs who experience the Great Depression early in life display a heightened reluctance to access external capital markets.” I find it plausible that the 2008 crisis has increased firms’ desire to hold cash and dampened their willingness to invest.

The point here is a simple, if sometimes overlooked, one. “Animal spirits” matter. And they are determined not just by current events but also by quite distant ones. We are all creatures of history.

In praise of the centre ground

Robert Peston interprets Deborah Mattinson’s report on Labour’s election defeat as saying that “Labour needs to move back to the centre ground of politics, whereas Jeremy Corbyn has shifted it leftwards.” This poses the question: what’s so good about the centre ground?

It’s not that it is a guaranteed vote-winner, as any Lib Dem will tell you. Nor is it because centrist policies are necessarily better: as I’ve said, centrists can be as airy-fairy utopian as extremists.

Instead, I suspect, the answer lies in something discovered (pdf) by Itamar Simonson in 1989. This is that people prefer to choose middling options. Given a range of TVs, for example, they choose neither the best not the cheapest but a mid-range one.  

Good salesmen know this, and manipulate choice sets accordingly; they know that people don’t follow one of the axioms of rational choice, the independence of irrelevant alternatives. In Influence, Robert Cialdini describes how an estate agent would show clients some run-down properties to make other properties for sale look good. And Dan Ariely has written:

High-priced entrees on the menu boost revenue for the restaurant – even if no one buys them. Why? Because even though people generally won’t buy the most expensive dish on the menu, they will order the second most expensive dish. Thus, by creating an expensive dish, a restaurateur can lure customers into ordering the second most expensive choice (which can be cleverly engineered to deliver a higher profit margin) (Predictably Irrational, p 4)

Some new research corroborates this. Economists studied over 88,000 orders at a German restaurant, and found that mid-priced options were chosen disproportionately often.

When centrism succeeds, it does so by exploiting this compromise effect. Tony Blair and Bill Clinton did this brilliantly in the 90s by triangulation – rejecting both “left” and “right” and offering a middle way.

For me, this suggests there are two different types of centrism – we might call them active and passive. Wishy-washy pro-establishmentism might not work, given that so many people are cheesed off with the status quo. But more active triangulation might. And Labour can use it. To take two examples:

 - “We reject the mindless austerity of Osborne but also the spending-for-spending sake of the old left. Instead, we should borrow in invest where there are payoffs to doing so – for example in flood defences, broadband and transport.”

 - “The old right thinks companies should be owned by ruthless tax-dodging billionaires. The old left wanted state ownership. Both have their failings. We reject both, and want more worker ownership.”

 I suspect that this is not what Peston had in mind: he was thinking of centrism as the same old illiterate pro-rich policies. There is, though, a different type of centrism – one which both exploits the compromise effect and has sensible economic content.  

Complexity, & BBC bias

We heard yesterday a neat example of BBC’s ideology. On Broadcasting House, Paddy O’Connell asked people about the “personality of the market”:

It’s an angry toddler, a fickle teenager, an ex-lover you can’t shake off, your master, your slave…an attention-seeking drama queen (21'03" in)

The horrible mixedness of this metaphor should draw attention to a big problem. The stock market is NOT like a person. Share price moves are the product of complex emergent processes which cannot simply be reduced to individual behaviour. Sometimes, stupid investors can generate a rational market, and sometimes rational investors can generate a stupid market: this is the message of Schleifer and Mendel’s paper, Chasing Noise.

What’s true of the stock market might be true of goods markets too. Alan Kirman’s study of the Ancona fish market has shown that there’s a negative relationship between price and quantity bought only in aggregate data, and not for individual buyers. The downward-sloping demand curve is, then, an emergent phenomenon.

The thing about complex emergent processes is that they are hard to understand – there’s a complexity brake – and even harder to forecast. This might explain why economists have generally failed to predict recessions in a timely manner.

This is why I say the BBC is guilty of an ideological bias. In not even considering the question of emergence, and instead pretending that markets are like people, it is assuming that complex social phenomena – not just markets but perhaps political behaviour too - are understandable and predictable.

This is no mere innocent error. If markets are like toddlers or teenagers, it’s possible to understand and predict their behaviour and so Very Serious People can claim to possess expertise and hence a legitimate right to power and influence in politics and business. If, however, they are instead complex processes they might not be predictable – except in the sense that we might know the probability distribution of possible outcomes – then those VSPs are in fact mere empty suits.

As Alasdair MacIntyre wrote:

Do we now possess that set of law-like generalizations governing social behaviour of the possession of which Diderot and Condorcet dreamed? Are our bureaucratic rulers thereby justified or not? It has been insufficiently remarked that how we ought to answer the question of the moral and political legitimacy of the characteristically dominant institutions of modernity turn on how we decide an issue in the philosophy of the social sciences. (After Virtue, p 87)

In unthinkingly denying the very possibility of complexity, the BBC is therefore helping to shore up the power and prestige of the ruling class. That’s a profoundly politically biased position.

You might object that I’m reading too much into what was just a jokey little piece. I’m not sure. Ideology reveals itself not just in our deliberate statements, but also in what we do unthinkingly. And it seems that the BBC’s unthinking position is one of excessive deference to false experts.

Against laws & "facts"

In a comment here, Unlearning Economics says that there are some people “who consistently beat the market, which contradicts the efficient markets hypothesis.” I agree. But this is not a problem for the EMH so much as for all economics.

I say this because there are, as far as I know, no 100% true laws in economics*. Economics is instead an inexact science in which any “law” has exceptions: as Jon Elster has stressed, the social sciences are about discovering mechanisms, not law-like generalizations. Even the “law” that demand curves slope down has some exceptions.

Rather than ask, “is this theory 100% true?” – a question to which the answer is usually “no” – we must ask: in what contexts is this true? And: how true is it?

As I say, the EMH is false in the context that there are some strategies, such as momentum and defensives, which do beat the market. But it is true – or at least true enough to be useful – in the context of choosing between actively and passively managed funds. 

This question is a purely empirical matter, to be settled by a careful consideration of the evidence. For example, the question of whether minimum wage laws represent an exception to whether demand curves slope down is a question of fact.

I don’t say this to get mainstream economics off the hook by lowering the burden of proof. What I say applies equally to heterodox theories. For example, there are flaws with the labour theory of value. Whether these flaws are great enough to offset its strengths in other contexts is, however, a much trickier question. To claim that the flaws “refute the LTV is the same sort of simple-minded dogmatism as claiming that the defensive and momentum anomalies “refute” the EMH. It misses the point that all theories can be “refuted” by some counter-examples.

The converse is also true. One of my beefs with right-wingers is their tendency to exaggerate the scope of their theories and to turn small truths into big ones. They fail to ask: how true is this?  For example, Tim Worstall might be right that some regulations are bad for the poor. But whether this means a smaller state would increase equality is a trickier matter. Similarly, the claim that immigration has reduced the wages of the low-paid is true, but only slightly so. And, I suspect, trying to defend the 1% by invoking marginal product theory is silly: it’s an attempt to apply a theory in a context where it doesn’t fit.

In fact, it’s a form of laziness. If you think a few simple ideas – Marxism, Econ 101, whatever – can explain everything, you are saving yourself the much tougher job of discovering and questioning the evidence.

But here’s a twist. Not only is the mindless application of general theoretical laws lazy, so too can be an appeal to “facts.” For example, Oxfam’s claim that “62 people own as much as the poorest half of the world's population” looks like a slamdunk case against equality. But it’s not. There must be something odd about a statistic which says that an Indian beggar with one rupee is richer than someone who’s just started working at Goldman Sachs but has lots of student debt**.

Appealing to “facts” in this case is a way of ducking tougher questions: is inequality a problem? Can we do anything useful about it?

I think the answers to these questions is “yes”. But they are hard ones, to which a definitive answer might never be available.

My point here is that many people - critics of mainstream economics, Econ 101ers and some lefties – are guilty of a form of autistic category error. They’re looking to economics for irrefutable big facts and theories which the discipline, by the very nature of our complex social world, cannot provide. Instead, we are in a domain of partially applicable theories and ambiguous or missing evidence. The question is how we deal with this.

 * “There are no lawlike generalizations” is itself a lawlike generalization. Any idiot can play pointless logic games.

 ** The point is that human capital must be wealth as well as financial assets.

Workplace surveillance

Last week I took my car in for a service, and the following day I was emailed the video of the job being done – something I found so spooky I’ve not watched it. This seems to corroborate Sarah O’Connor’s claim that workplace surveillance is on the rise.

This, I suspect has been going on for years. For “middle class” workers (or erstwhile middle class ones) it has taken the form of the assertion of management power - such as the REF in universities – and to a demise of office pranks and liquid lunches. For other workers, technical change such as CCTV and containerization has reduced the ability to take a bunce, whilst many others face more intrusive oversight. At Amazon “you're monitored by an Orwellian handset every second of every shift” and in other jobs you’re searched as you leave the building.

Rick might be right to say that the trend isn’t all one way:  the very fact that I work from home tells us this much*. Since the 70s, technical change and deindustrialization has destroyed many jobs that were subject to direct oversight – think of the old assembly lines – and replaced them with more complex jobs that are less easily monitored. In fact, the banking crisis was the result of a lack of effective workplace monitoring by shareholders or regulators.

There are four important points here.

First, differential changes in the degree of oversight might well have contributed to wage inequality. Oversight is a way of reducing wages: if you can monitor workers directly, you don’t need to pay them over the odds to incentivize them to put in a shift or behave honestly. On the other hand, where oversight isn’t possible you do need to pay over the odds. I suspect that a big reason for the high pay of bosses and bankers is that they must be bribed not to plunder the firm’s assets – and the bigger the assets are, the greater the bribe must be.

Secondly, some people have double standards here. Whereas there has been opposition to increases in state surveillance - rightly so, I think - there's been less of a backlash against workplace surveillance, especially among some so-called libertarians.  

Thirdly, we know that productivity growth has slumped in recent years. This tells us that, whatever changes there have been to worker surveillance, they have not (yet?) led to observable improvements in efficiency gains at the macroeconomic level. 

Fourthly, in the long-run, technology shapes culture: as Jeremy Greenwood’s work shows, you don’t need to be a Marxist to believe this. Which poses the question: what cultural changes might increased surveillance bring?

Sarah says that if you treat people as untrustworthy, they’ll behave untrustworthily. I, though, have another concern. It’s that if people are closely monitored they might lose initiative and energy.

 One of the strange paradoxes of our time is that although people want a say in matters of which they are mostly ignorant – just look at all those speak your branes  phone-ins and TV chat shows – there seems to be little demand for workplace democracy, despite its obvious merits. This could be because workplace surveillance has created learned helplessness.

Although I wholly applaud John McDonnell’s call for greater worker ownership, I fear that this won’t be as popular as it should be.

 * I’m in a minority though. Less than 6% of employees work from home, in the sense of being at home for more than half of their working time.

Against anti-economics

Simon Wren-Lewis and commenters on Tim’s blog are complaining about ideologically-motivated attacks on conventional economics – one from the left and one from the right. I want to agree with both these complaints.

First, the question of the merits or demerits of economics should be independent of one’s political ideology.  You can be well to the left politically whilst cleaving to orthodox economics: open borders and anti-managerialism, for example, don’t require heterodox economics. Or you can be well to the right without indulging in the quackery of which Simon complains: small-state Keynesianism is a tenable position – it was good enough for Keynes himself.

Secondly, the ideological attacks upon mainstream economics misunderstand how economics progresses.

Let’s take an example from financial economics. The dominant position used to be the efficient market hypothesis – the idea that share prices embody all available information and so you cannot beat the market unless you take extra risk*. However, we now know that this isn’t right. Both momentum stocks and defensive (pdf) ones (pdf) do better than they should. Granted, this might be a pay-off for taking on benchmark risk, but it’s strong evidence that some investors can indeed beat the market without taking a risk that troubles them.

There are, though, two key points about this successful challenge to the once-orthodox position.

First, it is based not in theory or hand-waving, but in the discovery of hard facts. By facts, I mean not anecdotes or even single (pdf) academic papers, but rather findings that are consistent across many different data sets. Thomas Gradgrind’s educational philosophy might have left a little to be desired, but critics of economics should heed his words**:

Now, what I want is, Facts.  Teach these boys and girls nothing but Facts.  Facts alone are wanted in life.  Plant nothing else, and root out everything else.  You can only form the minds of reasoning animals upon Facts: nothing else will ever be of any service to them.

Secondly, context matters. Although the EMH is wrong in the sense that we can beat the market without taking on extra risk, it is correct in other contexts. If you are asking the question “should I buy an actively managed fund?” you should behave as if the EMH were correct.

This point generalizes (to a degree!). As Simon says, channelling  Dani Rodrik, “there are many valid models, and the goal is to know when they are applicable to the problem in hand.” For example, I’ll concede that there have been times – and there might well be in future – when expansionary fiscal austerity works. It’s just that those times and places are not here and not now.

Which brings me to my third gripe with the anti-economics brigade. Economics is – or at least should be – a practical discipline, aimed at helping individual people to make better decisions in specific contexts**. A (futile) hunt for big-T truth or grand theories can distract us from this job.

 * I’m talking about the pricing of individual stocks here, not of the whole market. Paul Samuelson, for example used to believe markets were “ micro efficient but macro inefficient.” Even this isn’t wholly true though.  

 ** In fact, economics is becoming more (pdf) Gradgrindian – and rightly so.   

 ** Most of my day job consists in doing just this.

Unions vs Trident

Some trades unions want the UK to keep Trident to save jobs. For example, the GMB’s Paul Kenny says:

Everybody keeps talking about the wonderful principles of Trident. But there are tens of thousands of British jobs involved here…There are about 50 sites around the UK whose livelihoods depend on defence contracts and we are going to ask those people what they think about the Labour party effectively shutting down their jobs

I don’t know which is more depressing – the possibility that the unions are wrong, or that they are right.

Econ 101 says they’re wrong. If we don’t spend billions on Trident, we could spend the money on other things that will create maybe more or better jobs. Sam Brittan used to argue for a clampdown on arms dealing in part because the jobs lost in that industry would be replaced by other, less immoral, ones.

This, however, overlooks two things. One is that workers aren’t fully fungible. Trident employees can’t swiftly retrain or move to where there are jobs. And there are already skill shortages in the construction trade, which suggests that switching money from Trident to housebuilding might not be as easy as it seems.

Secondly, people are loss averse: shipyard workers who lose their jobs will feel genuinely unhappy whilst those who get jobs – even if they are just as good – won’t get an equivalent increase in happiness. Wolfgang Maennig and Markus Wilhelm have estimated that losing one’s job reduces well-being by five to ten times as much as does finding a job.

On balance, though, I’m inclined against the union position:

 - If the only way to preserve or create good jobs is to spend billions on arguably-pointless weapons of mass destruction, then the UK economy is even sicker than any of us thought. Are things really that bad?

 - Workers must shift jobs sometimes. If they didn’t, we still be making stovepipe hats and using quill pens to keep ledgers. The task for the left is to make such shifts as easy as possible, not to prevent them.

 - Jobs aren’t the only thing that matter. Morality does too. I suspect ISIS has an equivalent of Paul Kenny who is defending burning people to death and pushing them off high buildings because these create work for his members.  

Of course, Sir Paul is only doing his job and defending his members’ interests. This, though, draws our attention to an embarrassment for the left – that, despite their many virtues, unions can be sometimes be very conservative.

Old blaggers & secular stagnation

There’s a link between the Hatton Garden blag and one of the big issues of our time – secular stagnation.

The blaggers were all old men. Having learned the trade of robbing in the 70s, they stuck with it even though technical change has made their trade more difficult:

a decade or two ago, there was not the ANPR [automatic number plate recognition] or CCTV coverage there is now, and they would have had a better chance of getting away with it.

Most of us, though, are like the Hatton Garden gang. We’re one-trick ponies. Footballers and soldiers struggle to adapt when their careers are over just as cons find it difficult to go straight. Even those of us who do change careers – such as me when I moved from banking to journalism - do usually do so by redirecting our skills rather than learning new ones from scratch. You can’t teach an old dog new tricks.  

Human capital is a putty-clay technology: it might be malleable in our youth, but it’s more fixed when we’re older. Our skills, like many things, are path-dependent.

It’s not just people of whom this is true. It’s also true for companies. They too are stuck with the “core competences” they inherited from the past. As Jovanovic and Rousseau say, they have specific vintages of organizational capital. In fact, this might be even more true of firms than individuals: some key workers or managers have vested interests in doing things the old familiar and easy ways, and corporate groupthink breeds the “not invented here” syndrome.  

This traps them into particular technologies, which means that they find it hard to adopt new ones.  IBM, for example, was the dominant computer company in the 1970s, but it didn’t succeed in developing successful operating systems: that took a new company – Microsoft. Microsoft then didn’t develop a great search engine – but a new company, Google, did. And Google didn’t develop social media, but new companies Twitter and Facebook did.

The more “disruptive” new technologies are, the more likely it is to be that they’ll be implemented by new companies rather than incumbents: as David Audretsch has shown, this has been the case in recent years.  

It’s this that gives us creative destruction: if incumbents could easily adopt new technologies they’d survive and thrive during technical change. Sometimes, though, they don’t – and in fact, as Ormerod and Rosewell have shown, firms are often unable to foresee their demise.

All this helps explain three of the big questions of our time, which are tied up with secular stagnation:

 - Why are firms not investing much despite talk about the potential of robots and AI? One reason could be that they lack core competences in the new technologies. Worse still, they fear that future new firms, using even cheaper technology and greater skill, will undercut them.

 - Why are firms holding so much cash? One reason (of many) is that they know that they don’t know much about future technologies, but hope to acquire new small firms that do.

 - Why are share prices so low despite techno-optimism? One reason is that future technologies will be embodied by firms that don’t yet exist, whilst today’s incumbents might be the victims of disruptive change. Jovanovic and Greenwood have argued that one reason for low share prices in the 70s was that investors anticipated the stock market revolution. Even if you’d had perfect foresight of technical change in the 70s, you couldn’t have bought shares in Microsoft, Google, Apple or Amazon but you would have shied away from existing firms then for fear that they'd give way.  

Perhaps, therefore, today’s big firms have much in common with the Hatton Garden blaggers. They are sad old men used to ripping people off who find themselves trapped on the wrong side of technical change.