The Wiki Man

The six things that'll change when I rule the world

Markets can do almost everything. Here's where they seem to me to fail

21 June 2014

8:00 AM

21 June 2014

8:00 AM

But why did the food [in England] stay so bad after refrigerated ships, frozen foods and eventually air-freight deliveries of fresh fish and vegetables had become available? … The answer is surely that by the time it became possible for urban Britons to eat decently, they no longer knew the difference. [Since] your typical Englishman, circa, say, 1975, had never had a really good meal, he didn’t demand one. And because consumers didn’t demand good food, they didn’t get it. Even then there were surely some people who would have liked better, just not enough to provide a critical mass.

The history of English food suggests that… a free-market economy can get trapped for an extended period in a bad equilibrium in which good things are not demanded because they have never been supplied, and are not supplied because not enough people demand them.

This is the economist Paul Krugman in an article from the late 1990s called ‘Supply, Demand and English Food’. I don’t agree with the whole article (elsewhere he disparages fish and chips) but his premise is worth exploring. Are there other areas where we accept appalling products or services simply because we have become inured to them? Here, I think, are a few.

Dry cleaners. Over the last 50 years, you’d think someone in the dry-cleaning industry would have come up with a comfortable handle to carry your clean clothes back to your car. As things stand, you can transport dry-cleaning painlessly only if you are a) Abu Hamza or b) a pirate.

London black cab drivers. Yes, I am sympathetic with your plight versus Uber (for reasons I will explain elsewhere), but before you can complain too loudly, you might like to start accepting credit cards. Actually accepting them, not just installing a card reader and then pretending it’s not working.

Salad manufacturers. Everyone who makes prepared salads for M&S, Sainsbury’s etc is convinced that the bottom 50 per cent of a salad bowl should consist of a slithery layer of cold, soggy pasta. Would anyone do this at home? Why do we put up with it?

Call centres. After two minutes on hold, callers should be offered the option of requesting a call back.

Tea shops. Try staying open later than 4 p.m., you lazy bastards. That way you might be open when most people want a cup of tea. Under a future Sutherland regime, all immigrants will be required to undertake two years’ training in scone-making and teapot-warming to shake up the indigenous tea-shop industry. Anyone using the phrase ‘We stop serving X at Y o’clock’ will be either shot or deported to France, where they still find that kind of thing acceptable.

Finally, the season ticket. This is a Dickensian idea, conceived for an age when everyone took the same train every day, five days a week. It is bitterly unfair to part-time workers or to people who commute in off-peak hours to make them pay the full price — or buy tickets singly. Research by an organisation called the Campaign for Better Transport suggests that those commuting to part-time jobs in London from the south-east would be an average of £1,500 a year better off if part-time or off-peak season tickets were available. Part-time commuters to Manchester and Bristol would save £460 and £765.

As a proportion of a part-time salary, this is immense. But the season ticket is also Luddite. The idea that the internet would cause millions of people to work from home permanently was mostly a pipe dream. But millions do now work from home for a morning, or for one or two days each week. What is the point of technology if people must still pay for the journeys it has made unnecessary?

Got something to add? Join the discussion and comment below.

Rory Sutherland is vice-chairman of Ogilvy Group UK.

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  • maharbbal

    Regarding Krugman’s conundrum a possible cause for the “market failure” is labour cost.
    Food prices in Spain or Italy were presumingly much higher than in England, but hiring a well-trained cook or even cooks was within reach for a large-ish section of the population. In England, you had to rely on an under-skilled and over-worked but very well paid bloke who could do little else than deep-frying food.
    And forget about mama’s cooking anything, high wages had convinced her long ago to drop home-making for the factory floor.
    Bob Allen’s book on the subject (of wages) is very enlightening in this regard.

    • ClausewitzTheMunificent

      Why would food prices in Spain and Italy have been higher than in England when the climate there is much better for growing food?

      • maharbbal

        Italians and Spaniards gained access relatively late to the goodies sent by the US, South Africa, Argentina or Australia.
        No steamships, no railways, no banks… no meat or wheat from the other hemisphere.

        • ClausewitzTheMunificent

          Almost certainly meat prices would be higher. But not vegetable prices. Food as a whole would most likely be about the same price if adjusted for purchasing power. And what you say about not having a merchant navy, railways or financial institutions is bizarre in the extreme given that Italy developed its railways no later than anybody else, had a significant merchant marine, and was the first to develop banking. In any case I don’t think the availability of a wider variety of food can be the cause of a bad cuisine!

          • maharbbal

            OK, we’re getting carried away. The main point here is that the Brits being paid more than, say, the Italians, one couldn’t afford a cook in Manchester. Unlike a Milanese family who until late had a small army attending to its every needs. Remember that Julia Child in the 1960s wrote for the “serviceless” American woman…
            Food represented a much much larger part of the Mediterranean budget than that of the English worker. Check the engraving of James Gillary called French Liberty and English Slavery to get an idea.
            Besides, what I say is not bizarre, by the 19th century Italy had no merchant navy to speak of, a dwarf of a banking system and if memory serves the South of the country is still not particularly famous for the quality of its transports. All of which made food more expensive. Check what Curzio Malaparte says of the Neapolitan diet in The Skin. Or just ask yourself why so few Yanks emigrated to Italy.

  • global city

    This is a very middle class issue. In the mid 70s’ my family and that of most of our neighbours ate good food, prepared from real stuff, as Vesta ready meals and oodles and oodles of cresta were not really affordable.

  • tjamesjones

    yes I agree on cabbies and credit cards. I’ve always assumed it’s a tax thing. It’s a symptom of their relative monopoly that they can get away with not accepting them/installing a ‘broken’ machine/and then even if they do accept them, whacking on a 10% fee. Not sure the last time that happened to me in a restaurant. Oh, I remember – never.

  • Could Krugman’s English-food example reflect cultural ignorance? I think so. After the war, England (as I understand it) was not a restaurant-going nation, on the whole. It wasn’t, still, an especially urban nation. The best food was cooked at home — and very nice, too (my grandma always said to me, as I raved about her food, ‘you can come again’). Before the war, I imagine that dining out was more a matter of eating at one’s club and other ‘establishments’, rather than the come-all-as-will restaurant culture of today, all over the West. I don’t doubt that England had dreadful restaurants — I was amazed at the sub-cafeteria quality of one atrocious place in the heart of Bath as recently as 1994 — but English cooking tended to please the English, always, and English restaurants are often lovely, now (Thorins in Tunbridge Wells I remember fondly, both for the sea bass dish and the treetop garden in which I had it).

  • carr30

    Quite right about the season tickets, they should work on the number of journeys like the Oyster card. Unfortunately the savings mentioned in this article would be lost revenue to the rail companies so you may be sure that nothing will change.

  • HenryWood

    Those pasta “salads” – who on earth ever makes a repeat buy? I tried one once. “Handy,” I thought, “very handy, seeing as I just cannot be bothered preparing even a sandwich after this afternoon’s session.”

    Revolting! Worse than revolting! I have been known to eat almost anything when in my cups and the dreaded low sugar hunger pangs strike but the pasta salad truly had me beat.

    When I woke the next morning and went through to make a desperately needed mug of Ringtons I saw this “dish” on the bench and hadn’t a clue as to what it was. I took a sniff of it and still had no clue. I did not dare take a taste. I did read the label and have never bought a pasta “salad” again.

  • Tom

    You missed out the internet, the current internet is a terrible experience working for nobody, Media owners make no money, advertisers make no impact, and people hate it. Journalists get dumbed down, media is there to rape our eyeballs.

    It’s just happened so slowly and we never have known better.

    If we accepted a paid for internet it would be better. Trying to extract money to pay for it from advertising is serving nobody.

    Sod net neutrality, let’s try net bifurcation. A paid premium internet for those that value their attention and sanity.