Economics Essay 97: Irrational Consumer Behaviour

 Explain how rules of thumb and irrationality can affect consumers’ demand for goods and services.

Rules of thumb and irrationality can have a significant impact on consumers' demand for goods and services. Here are some examples:

1. Anchoring Bias: Consumers often rely on initial pieces of information as reference points when making decisions. For example, a consumer may see a product with a higher original price marked down to a lower sale price. The consumer's perception of value may be influenced by the initial higher price, leading them to believe they are getting a better deal than they actually are. This can affect their demand for the product.

2. Loss Aversion: Consumers tend to experience the pain of losses more intensely than the pleasure of gains. For instance, a consumer may be reluctant to purchase a product even at a discounted price if they feel it would entail a loss of money or regret in the future. This bias can impact their demand for goods and services, as they may avoid certain purchases due to a fear of potential losses.

3. Availability Heuristic: Consumers often rely on immediate examples or information that is readily available to make judgments or decisions. For instance, a consumer may base their perception of the quality of a product on the ease with which they can recall positive reviews or personal experiences with similar products. This heuristic can influence their demand for goods and services, as they may prefer products with readily available positive associations.

4. Social Proof: Consumers are often influenced by the actions and behaviors of others. For example, if a product or service is highly popular or endorsed by influential individuals, consumers may be more inclined to demand it based on the perception that it is desirable or of higher quality. This can create demand trends and drive consumer behavior even if the actual value of the product may not justify the demand.

5. Status and Conspicuous Consumption: Consumers may make purchasing decisions based on the desire to display social status or to signal their wealth and success. For example, consumers may choose luxury brands or high-end goods to project a certain image or to align with societal norms. This can affect their demand for specific products and services that are associated with prestige or exclusivity.

These examples illustrate how rules of thumb and irrationality can influence consumers' demand for goods and services. Consumers' decision-making processes are not always rational or based solely on objective evaluations of value. Instead, psychological biases and heuristics play a role in shaping their preferences and behaviors, leading to deviations from traditional economic models of rational decision-making.

Nudge theory is a poor substitute for hard science in matters of life or death

Behavioural economics is being abused by politicians as a justification for flawed policies over the coronavirus outbreak writes Sonia Sodha in The Guardian 

Illustration: Dom McKenzie/The Observer


I first came across “nudge” – the concept many consider to be the pinnacle of behavioural economics – at a thinktank seminar a little over 10 years ago. We were all handed a mock wine menu and asked what we’d order.

This was supposed to illustrate that most price-aware diners order the second-cheapest bottle to avoid looking tight and that restaurateurs use this to nudge us towards the bottle with the highest markup. I remember thinking it an interesting insight, but that these sorts of nudges were nowhere near as likely to transform the world as their enthusiastic proponent claimed.

Lots of far more eminent people disagreed with me. Behavioural economics looks at how people make decisions in the real world – warts, irrational biases and all – and applies this to public policy. Its signature policy is set out in the 2008 book Nudge , by Cass Sunstein and Richard Thaler. The central insight is that changing the way choices are presented to people can have a huge impact. Make saving for retirement or donating your organs an opt-out rather than opt-in and watch as people suddenly adopt more socially responsible behaviour. Coming just as the financial crisis hit, Nudge was perfectly timed to achieve maximum traction by offering politicians the chance to reap savings through low-cost policy. Sunstein was quickly appointed to a senior job in the Obama administration, while David Cameron set up the behavioural insights team, dubbed the “nudge unit”, led by psychologist turned policy wonk David Halpern.

The nudge unit has since had a mixed track record: there have been some real successes on pensions and tax payments but in other areas it’s been a bit of a damp squib. So I was surprised when Halpern popped up to talk about the government’s pandemic strategy in the press in early March. It was he who first publicly mentioned the idea of “herd immunity” as part of an effective response to Covid-19 (the government has since denied this was ever the strategy). And it’s clear from the briefing he gave journalists that he favoured delaying a lockdown because of the risk of “behavioural fatigue”, the idea that people will stick with restrictions for only so long, making it better to save social distancing for when more people are infected. “If you go too early and tell people to take a week off work when they are very unlikely to have coronavirus, and then a couple of weeks later they have another cough, it’s likely they’ll say ‘come on already’,” he told one reporter.

Halpern is reportedly on Sage, the government’s scientific advisory committee for emergencies, and he is also the government’s What Works national adviser, responsible for helping it apply evidence to public policy. So one might expect there to be something substantial behind the idea of behavioural fatigue. 

But evidence presented to government by the Sage behavioural subcommittee on 4 March, representing the views of a wider group of experts, was non-committal on the behavioural impact of a lockdown, noting that the empirical evidence on behavioural interventions in a pandemic is limited. Shortly after Halpern’s interviews, more than 600 behavioural economists wrote a letter questioning the evidence base for behavioural fatigue.

Rightly so: a rapid evidence review of behavioural science as it relates to pandemics only fleetingly refers to evidence that extending a lockdown might increase non-compliance, but this turns out to be a study about extending deployment in the armed forces. “Behavioural fatigue is a nebulous concept,” the review’s authors later concluded in the Irish Times.

This is a common critique of behavioural economics: some (not all) members of the discipline have a tendency to overclaim and overgeneralise, based on small studies carried out in a very different context, often on university students in academic settings. It’s extraordinary that Halpern was briefing on what essentially looks like his opinion as if it were science. We won’t know how influential it was in the government’s decision to delay lockdown until a post-hoc inquiry, but there’s no reason to suppose Boris Johnson wasn’t listening to his “what works” adviser. “The behavioural psychologists say that if you don’t shake somebody’s hand, that sends an important message… [about] washing your hands,” he said on 9 March.

It’s less extraordinary, though, when you understand that the Behavioural Insights Team is a multimillion-pound profitable company, which pays Halpern, who owns 7.5% of its shares, a bigger salary than the prime minister. Here lies the potential conflict of interest: someone who contributes to Sage also has a significant financial incentive to sell his wares. It perhaps explains BIT’s bombastic claims – “it’s no longer a matter of supposition… we can now say with a high degree of confidence these models give you best policy,” Halpern claimed in 2018. And: “We make much of the simplicity of our interventions… but if properly implemented, they can have a powerful impact on even our biggest societal challenges.” (It is worth noting that Sir Patrick Vallance, the government’s chief scientific adviser, says that one reason the composition of Sage has been kept private is to protect scientists from “lobbying and other forms of unwanted influence which may hinder their ability to give impartial advice”.)

This hubris has led some behavioural scientists to push their approach way beyond those realms such as consumer policy, where it has the potential to be most effective. My jaw dropped on reading a recent 70-page BIT report on applying behavioural insights to domestic abuse that included not one survivor’s voice and in which the word “trauma” appeared only once. It describes domestic abuse as a “phenomenon made up of multiple behaviours undertaken by different actors at different points in time”. Its recommendations are that strange mix of common sense dressed up as behavioural revelation and jarring suggestions that tend to characterise behavioural science when it overreaches itself.

Little wonder that a House of Lords committee was highly critical of government tendencies to emphasise nudges at the expense of other effective policy solutions in 2011. Nudges undoubtedly have their place, but they’re not going to eradicate domestic violence or end catastrophic climate change.

The problem with all forms of expertise in public policy is that it is often the most formidable salespeople who claim greater certainty than the evidence allows who are invited to jet around the world advising governments. But the irony for behavioural scientists is that this is a product of them trading off, and falling prey to, the very biases they have made their names calling out.

I can only imagine how easy it might have been for Johnson to succumb to confirmation bias in looking for reasons to delay a lockdown: what prime minister wants to shut down the economy? And it is the optimism bias of the behavioural tsars that has led them to place too much stock in their own judgement in a world of limited evidence. But this isn’t some experiment in a university psychology department - it is a pandemic and lives are at stake.

Cricket: The problem with the Australian Line of Control

Sharda Ugra in Cricinfo


Don't mean to be intemperate or rude or politically incorrect, but why is it that whenever there is an epic-proportion bust-up in international cricket, Australians are almost always involved?

Let's not think Dennis Lillee-Javed Miandad 1981. A rough 21st century brawl-recall will do.

Going backwards from the 2018 Warner-De Kock stairwell skirmish, you meet Josh Hazlewood giving umpire Ranmore Martinesz and New Zealand batsman Corey Anderson a mouthful in Christchurch, 2016.

In 2015, there's Warner and Rohit Sharma having a verbal stoush over an overthrow in a tri-series.

In 2014, Mitchell Starc and Kieron Pollard are involved in a ghastly altercation during the IPL.

In 2013, Warner and South African keeper Thami Tsolekile are ticked off over an incident in an A Test in Pretoria.

Only a few months later, Australian captain Michael Clarke is heard telling James Anderson on air, "Get ready for a broken f**** arm."

In 2010, Mitchell Johnson gets stuck into Scott Styris during an ODI in Napier.

The 2017 Ashes was marked by umpire Aleem Dar standing between James Anderson and Steven Smith in Adelaide, if only to stop the first punch from landing. There were debates over whether stump mikes should be turned down to prevent exchanges between adult men reaching the ears of children. We are not referring to the haw-haw "not even the best cricketer in your family, mate" banter, which has many genuine moments of mirth and forms part of the game's folklore. These are cricket's dramas on the other side of ugly, imprinted into the brains of kids as "normal" on-field behaviour, and last for weeks, full of whisper campaigns, leakages, ICC hearings and sentences.

Bored yet? Annoyed even? Then don't bother going back to Lehmann v Sri Lanka 2002, or McGrath v Sarwan 2003. Yes, let's set aside the Warner v Root walkabout, Harbhajan v Symonds, and even Virat Kohli's last two episodes: the 2014-15 send-offs, and the dramatics over Smith's 2017 "brain fade".


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Smith and Lehmann culpable in Warner incident - Ian Chappell

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Stand back from the institutional defence that "David Warner has not been pulled up for any ICC code violation for the last three years and the demerits points scorecard reads South Africa six, Australia two." No need to go into a stats breakdown of how many times out of ten Australian cricketers get involved in cricketing boilovers or reducing to the "the other guys started it" argument. What cricket must deal with is the fact that the Australian cricket team may have turned what used to be spontaneous sporting combustion into their version of Tactic 2.0. Pre-meditated toxic confrontation, a drama scripted between balls.

Other countries manage to play tense, competitive cricket without lapsing into uber-nastiness. Those contests have their heated moments (James Anderson and Ravindra Jadeja, go stand in the corner), but they are not the template for every series between the sides. The cricket still dominates public memory, not the arguments and the controversy. Put Australia on one side of the contest and it's not quite the same.

Throughout its colourful and rich history, Australian cricket has offered us some of the game's most magnificent qualities: competitiveness, daring, energy, positivity. For the better part of the last two decades, they were the gold standard for the game. Yet, slowly, during the same period, so many major series featuring the Aussies has begun to produce an overheated, eventually absurd subplot. In which they usually claim to be the victims, while often being deliberate, and even skillful agent provocateurs.

Unseemly and juvenile conduct is then gift-wrapped into convenient catchphrases: "playing hard but fair" and "not crossing the Line". And what a shapeshifter of a Line it is: imaginary, planted into quicksand, travelling where and when it suits those who claim to own it. To be fair, every cricket team claims ownership of the Line too - usually when they have committed a transgression. On Wednesday, Ottis Gibson described the situation quite poetically: "They are saying they didn't cross the line, but where is the line, who sets the line, where did the line come from? When you are saying you didn't cross the line but we didn't cross the line, you went very close to the line whose line is it?" Now that Sledging is trademarked Australian, no surprise that the team considers themselves rightful rulers of the Line and chooses to dictate what lies on either side.Green and gold are the hottest colours: if verbals are flying, Aussies might be in the vicinity Getty Images

Not so long ago, race and culture were safely on this side of the Line and could be tapped into to mentally "disintegrate" opposition. The players, it is hoped, have moved on from calling each other "curry-munchers", "terrorist", "monkeys". But the Warner-de Kock incident now informs us that "personal" is out of the question and that "family" aka wives or significant others, are on the far side of the Line, off limits. It is not certain if that means only Australian families, or does it apply to the other cricketers' families too? What happens to "your wife, my kids"? And what is the exact definition of personal? Surely, private parts are personal? But male or female? Or both? Or do only Australian cricketers know? Such righteousness from the prime offender can only invite ridicule. England captain Nasser Hussain once called this Australian cricket's habit of "preaching". Except no one is interested in following this gospel.

In other sports around the world, Australian athletes are admired for their titanium-strength fighting qualities. Barring a few, recent tennis brats, generations between Rod Laver and Pat Rafter showed us skill with grace. Whatever their personal issues, Australian swimmers don't expend energy dissing their rivals. There are more than a few Aussie rugby players who demonstrate what playing hard and fair really means. Then how and why does its cricket team unfailingly produce such habitual, perpetual, collective bad conduct? Of the kind they wouldn't want anyone's children indulging in on a playground?

Cricket "verbals" are said to form a part of the Australian game, even at club level. Gideon Haigh called it "just sound effects almost like the sound of bat on ball."

During a 2013 research study around multiculturalism in Australian cricket, some newly arrived Asian immigrants told me they were staggered by the level of sledging in grade cricket. "Even umpires get sledged," one said. The use of fruity language in local cricket is common, but sledging umpires is not. Why, even Australia's own Usman Khawaja told the Player's Voice website in October 2017 that as a junior, "Getting sledged by opposition players and their parents was the norm when I watched the Aussie team, I saw men who were hard-nosed, confident, almost brutish. The same type of men who would sledge me about my heritage growing up." He then went on to say that the situation had improved on the ground and that Australian cricket was changing, becoming more inclusive.

Who knows how long meaningful change in player behaviour will take to get to the top in Australia? Never mind fixing what is an endemic problem, even accepting that it exists is going to be tough - because Australian cricket has turned the profane into their sacred creed. 

Decoding The Bhagwad Gita

Roopa Pai

People who buy expensive cars enjoy killing pedestrians

Bridget Christie in The Guardian

Illustration: Nishant Choksi for the Guardian

 

As a standup comedian, I have a heightened sense of other people’s behaviour. In a room of 500 people, I can sniff out the one checking their watch, yawning and stretching their arms above their head. There are a myriad ways an audience member can display their apathy towards you. One standup friend, Joe Wilkinson, saw a piece of chewing gum fall out of a man’s open, dribbling mouth while he was doing his best stuff. I’ve had a man in the front row order himself a takeaway.

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I think society is ruder than it used to be, and I’m not alone in thinking this. Paul Piff is an assistant professor in the department of psychology and social behaviour at the University of California. Last year, he wrote a paper titled Higher Social Class Predicts Increased Unethical Behaviour. In layman’s terms, what Prof Piff is saying is, rich people are more likely to behave like twats than poor people are.

Piff proved his suspicions in a number of ways, many of them involving the use of hidden cameras. One of his experiments, which he shared during an unintentionally hilarious TEDx talk, meant getting some of his mates to stand at pedestrian crossings and monitor which cars stopped and which didn’t. Normal cars (ie ones that look like their sole purpose is to transport people safely from A to B without exploding) stopped – which, incidentally, they were legally obliged to do. “Status cars”, such as 4x4s, convertibles, sports cars, chariots and the Diamond Jubilee State Coach, did not. Piff had proved, beyond any shadow of a doubt, that people who buy expensive cars enjoy killing pedestrians, which definitely qualifies as unethical behaviour.

Another of Piff’s films showed two young men playing a rigged game of Monopoly. One player was given an unfair advantage: more money, two dice, a crash course in Received Pronunciation, a massive throne to sit on, an ermine cloak and the Sovereign’s Orb. The behaviour of this player changed rapidly. He started playing in an incredibly annoying, obnoxious way.

The most fascinating part, for me, was that, even though he knew he was at an unfair advantage, the player still believed he had won the game through personal skill. I thought immediately of George Osborne cutting the maintenance grant for Monopoly players from low-income families, and how this meant that working-class kids would now always lose at Monopoly, so won’t even bother trying to play any more.

Piff believes that being wealthy can make people less ethical, more selfish and less compassionate. “The rich are way more likely to prioritise their own self-interests above the interests of other people,” he says. “It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.” Yes, that’s right. There is a professor, called Piff, who used the word asshole in an academic study.

I’ve encountered a lot of assholes recently. And I have noticed, with alarmingly regularity, that when I call people out for, say, walking into the road in front of my car without looking because they were on their phone, I am verbally abused in return. The man who ordered his takeaway during my show seemed genuinely baffled as to why I even brought it up. He was hungry and needed to eat. What the hell was my problem?

We are living in an age of narcissistic entitlement, and I don’t think this is purely down to wealth or privilege. Technological advances, easy credit, bad parenting and pizza restaurants’ willingness to stock every conceivable topping has created a world in which everything is possible and available, where there is immediate and unlimited choice – except in the case of the Labour leadership, where our options have been severely limited.

In a recent documentary about the police, a female officer said she’d noticed a big change in young people’s behaviour, which she put down to bad parenting, a lack of discipline and contempt for authority figures. She said that because we don’t say “no” to our children, and instead use tantrum-averting language (“Well, I’d rather you didn’t punch me in the face repeatedly, darling, because it makes mummy upset”), young people don’t know how to respond to being reprimanded: they go into meltdown.

We interact with each other less and less. We shop online, communicate online, we watch bands and sunsets through our iPads and don’t care about the people standing behind us. We’re forgetting how to behave in the physical world. I don’t know how we address this. But a good place to start might be to call our children assholes when they’re being assholes. I’d also suggest arresting anyone who orders a takeaway during the punchline of a show.

Teaching the poor to behave

G Sampath in The Hindu

By shifting the burden of poverty alleviation from the state onto the poor themselves, behavioural economists are ignoring the structural causes of poverty. They are also erasing the behaviour of the owners of capital from the poverty debate

The World Bank’s World Development Report (WDR) 2014 was about ‘Risk and Opportunity’. The 2013 WDR is simply named ‘Jobs’. The 2012 WDR is titled ‘Gender Equality and Development’.

Other WDR themes in the recent past include ‘Agriculture for Development’ (2008), ‘Equity and Development’ (2006), and ‘Building Institutions for Markets’ (2002). They all have an overt economic dimension. Naturally — for it’s a bank, after all. But the World Bank’s 2015 WDR is titled ‘Mind, Society and Behaviour’. That’s right. Now, what would a bank — or, if you prefer, a multilateral development finance institution — want with mind, society and behaviour?

There is a two-word answer to this question: behavioural economics. In its 2015 WDR, the World Bank makes a strong pitch to governments for applying behavioural economics to development policy.

As the report notes in its opening chapter, “The analytical foundations of public policy have traditionally come from standard economic theory.” Standard economic theory assumes that individuals are rational economic agents acting in their best self-interest.

But in the real world, people often behave irrationally, and not always in their own best economic interest. For instance, they might splurge when they could save, or give excessive weight to the immediate present as opposed to the distant future.

Is poverty a mindset?

Behavioural economics uses insights from psychology, anthropology, sociology and the cognitive sciences to come up with more realistic models of how people think and make decisions. Where these decisions tend to be flawed from an economic point of view, governments can intervene with policies aimed at ‘nudging’ the targeted citizens towards the right decision.

All this seems fairly unobjectionable. However, things change when behavioural economists focus their attention exclusively on the behaviour of the poor. Till date, there is no evidence that monitoring and ‘nudging’ the behaviour of the world’s poor is a better route to alleviate poverty than, say, monitoring and ‘nudging’ the behaviour of the financial elite. Surely the latter cannot be deemed as altogether rational economic agents — not after the 2008 crisis?

The second assumption of behavioural economics — presented as a new ‘finding’ based on research, and regurgitated wholesale by the 2015 WDR — is that the poor are less intelligent than the rich. It is an obnoxious idea, and also politically incorrect. Of course, this is not stated in as many words.

The correct way to say it, then, is to state that “the context of poverty” depletes a person’s “bandwidth” — the mental resources necessary to think properly — as a result of which he or she is, well, a poor decision-maker, especially compared to those who are not in “the context of poverty”, such as the rich and the middle classes.

Lest anyone misunderstand, the authors of the report hasten to add that it’s not just the poor but anyone — even the wealthy — who, when placed in a “context” of poverty, would make wrong decisions. (For the record, it must be noted that the poor are — all else being equal — more likely to be in “the context of poverty” than the rich.)

To support these assumptions, a number of research studies are trotted out. One such study, mentioned in the report, was conducted on Indian sugarcane farmers, who typically receive their income once a year, at the time of harvest.

It was found that the farmers’ IQ was ten points lower before they received their harvest income than afterward (when they were flush with cash and were comparatively richer). So ideally, they should not take major financial decisions before harvest time. Such an insight into how poverty affects behaviour could have policy implications for, say, cash transfers — which can be timed, or made conditional, on displaying certain behaviours pre-determined by the state as ‘rational’.

The report states in all earnestness that poverty “shapes mindsets”. From here, it is a hop, skip, and jump to holding, as the leading behavioural economists of the day do, that the poor are poor because their poverty prevents them from thinking and acting in ways that can take them out of poverty.

Thus the focus as well as the burden/responsibility of poverty-alleviation would shift from the state — from macroeconomic policy, from having to provide employment, health and education — to changing the behaviour of the poor. The structural causes of poverty — rising inequality and unemployment — as well as the behaviour of the owners of capital are evicted from the poverty debate, and no longer need be the focus of public policy.

Behavioural economics

In this context, it might be pertinent to note that the rise of behavioural economics as a discipline parallels the rise of neoliberalism, starting from the 1980s and rapidly gaining respectability and funding from the 1990s. All the leading lights of the field such as Daniel Kahneman, Amos Tversky, Robert Shiller, Senthil Mullainathan, Richard Thaler and Cass Sunstein made their mark in this period, and are heavily referenced in this report.

A fundamental principle of neoliberal thought is to find market-led solutions to socio-economic problems. No matter that poverty is often a symptom of market failure. Free market ideologues attribute poverty and all socio-economic ills to market distortions caused by state interference. The economists who get to shape the World Bank’s WDRs are chosen for their ability to toe this line.

On the odd occasion that the lead author of a WDR made a bid for intellectual independence, he had to make an untimely exit. For the 2000-01 WDR, titled ‘Attacking Poverty’, the original draft prepared by the distinguished development economist Ravi Kanbur — incidentally brought in by Joseph Stiglitz — spoke of the need to build effective safety nets for the poor before the introduction of free market reforms.

Both Mr. Kanbur and Mr. Stiglitz were out of the World Bank before the report was. As the economist Robert Wade points out in an essay on this episode, titled ‘Showdown at the World Bank’, the version eventually published no longer spoke of creating prior safety nets for the poor. It instead called for putting them in place “simultaneously with labour-shedding reforms”.

The point of this detour into WDR history is that — to borrow the jargon of behavioural economics — the overarching necessity to conform to free market ideology may be said to impose a ‘cognitive tax’ on World Bank economists, as a result of which their ‘mental models’ do not permit the ‘framing’ of poverty in ways that may contradict this ideology.

The Keynesian formula of safety nets from the free market may well be permanently banished from the policy agenda. But that still leaves unresolved the problem of how to manage the social and political consequences of the widening income gap between the 1 per cent and the 99 per cent. This is critical because growing discontent could lead to political instability. After all, in order for markets to function, and commodities to flow freely and predictably, the excluded masses must be taught to behave. This is where behavioural economics comes in.

Action and behaviour

In order to change the behaviour of the poor, one must first understand it. It is this understanding that behavioural economics promises to codify into knowledge. To be sure, the WDR readily acknowledges that even the rich, the economists, and the World Bank staff themselves, might be subject to cognitive biases.

But nowhere in its 230-odd pages does the report present an instance, or even a hypothetical example, of a behavioural economics-inspired policy intervention whose target is, say, a class of billionaire investors, despite the fact that today, compared to the poor, this is a group that wields far more influence, per capita, on a nation’s economic destiny. Changing their behaviour — for instance, manipulating them into deploying their billions on productive rather than speculative investments — could generate more beneficial, and more effective, outcomes than micro-manipulating the financial decisions of a poor peasant.

A major confusion that dogs this report is the conflation of ‘action’ and ‘behaviour’. The term ‘behaviour’ comes with the baggage of the empirical sciences. It is typically used with reference to animals and objects under scientific observation. Behaviours can be studied for patterns. To the extent that human beings are also animals, they can also be said to exhibit behaviours. But what makes them human is precisely their capacity to transcend behaviour patterns — in other words, to act.

The political theorist Hannah Arendt, in The Human Condition, speaks of three kinds of human activity: labour, work and action. Of the three, what distinguishes action is its political nature. When behaviourist economics speaks of poverty as a “cognitive tax”, it writes ‘action’ — the political agency of the poor — out of the equation.

As democratic nation states reorient themselves to being accountable to global financial markets, non-democratic bodies such as the World Trade Organization, and trade agreements such as General Agreement on Tariffs and Trade and Trade in Services Agreement , they will necessarily become less responsive to the aspirations of their own citizens. With overt repression not always the most felicitous or cost-effective policy option, it has become imperative to find ways and means to ideologically tame the economically excluded. Hence the new focus on the minds and behaviour of the poor.

Behavioural economics, insofar as it is concerned with the behaviour of people in poverty — and it is this stream which dominates this year’s WDR — is simply the latest addition to the neo-liberal toolkit of political management.

How algorithms secretly shape the way we behave

Algorithms, the key ingredients of all significant computer programs, have probably influenced your Christmas shopping and may one day determine how you vote

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• • John Naughton
  • The Observer, Sunday 16 December 2012

Program or be programmed? Schoolchildren learn to code. Photograph: Alamy

 

Keynes's observation (in his General Theory) that "practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist" needs updating. Replace "economist" with "algorithm". And delete "defunct", because the algorithms that now shape much of our behaviour are anything but defunct. They have probably already influenced your Christmas shopping, for example. They have certainly determined how your pension fund is doing, and whether your application for a mortgage has been successful. And one day they may effectively determine how you vote.

On the face of it, algorithms – "step-by-step procedures for calculations" – seem unlikely candidates for the role of tyrant. Their power comes from the fact that they are the key ingredients of all significant computer programs and the logic embedded in them determines what those programs do. In that sense algorithms are the secret sauce of a computerised world.

And they are secret. Every so often, the veil is lifted when there's a scandal. Last August, for example, a "rogue algorithm" in the computers of a New York stockbroking firm, Knight Capital, embarked on 45 minutes of automated trading that eventually lost its owners $440m before it was stopped.

But, mostly, algorithms do their work quietly in the background. I've just logged on to Amazon to check out a new book on the subject – Automate This: How Algorithms Came to Rule Our World by Christopher Steiner. At the foot of the page Amazon tells me that two other books are "frequently bought together" with Steiner's volume: Nate Silver's The Signal and the Noise and Nassim Nicholas Taleb's Antifragile. This conjunction of interests is the product of an algorithm: no human effort was involved in deciding that someone who is interested in Steiner's book might also be interested in the writings of Silver and Taleb.

But book recommendations are relatively small beer – though I suspect they will have influenced a lot of online shopping at this time of year, as people desperately seek ideas for presents. The most powerful algorithm in the world is PageRank – the one that Google uses to determine the rankings of results from web searches – for the simple reason that, if your site doesn't appear in the first page of results, then effectively it doesn't exist. Not surprisingly, there is a perpetual arms race (euphemistically called search engine optimisation) between Google and people attempting to game PageRank. Periodically, Google tweaks the algorithm and unleashes a wave of nasty surprises across the web as people find that their hitherto modestly successful online niche businesses have suddenly – and unaccountably – disappeared.

PageRank thus gives Google awesome power. And, ever since Lord Acton's time, we know what power does to people – and institutions. So the power of PageRank poses serious regulatory issues for governments. On the one hand, the algorithm is a closely guarded commercial secret – for obvious reasons: if it weren't, then the search engine optimisers would have a field day and all search results would be suspect. On the other hand, because it's secret, we can't be sure that Google isn't skewing results to favour its own commercial interests, as some people allege.

Besides, there's more to power than commercial clout. Many years ago, the sociologist Steven Lukes pointed out that power comes in three varieties: the ability to stop people doing what they want to do; the ability to compel them to do things that they don't want to do: and the ability to shape the way they think. This last is the power that mass media have, which is why the Leveson inquiry was so important.

But, in a way, algorithms also have that power. Take, for example, the one that drives Google News. This was recently subjected to an illuminating analysis by Nick Diakopoulos from the Nieman Journalism Lab. Google claims that its selection of noteworthy news stories is "generated entirely by computer algorithms without human editors. No humans were harmed or even used in the creation of this page."

The implication is that the selection process is somehow more "objective" than a human-mediated one. Diakopoulos takes this cosy assumption apart by examining the way the algorithm works. There's nothing sinister about it, but it highlights the importance of understanding how software works. The choice that faces citizens in a networked world is thus: program or be programmed.

Why do we take economists so seriously?

They have no foresight, no hindsight, and little humanity. Are they really the best people to lead us out of this crisis?

• 
• guardian.co.uk, Wednesday 6 June 2012 20.02 BST

The unemployed people bussed in to work as stewards at the jubilee – a sign of the scale of inequality in the west? Photograph: Shiv Malik for the Guardian

It's the economists, stupid! While we were not waving but drowning in soggy flags, economic stuff was happening. Big stuff, though it could not break through the gooey queen-fest. In the news blackout that was the jubilee, other countries were reporting the meltdown of the Spanish banks, and thus, eventually, the euro. Obama was on the phone to Cameron telling him to do something about Merkel. It's all pretty dire. It must be for me to understand it, for though I am not an economist, I know what I like. Some sort of stimulus, please. Fiscal will do nicely.

Actually, that may happen. Another £50bn could be pumped into the economy soon. Money does not grow on trees, you know. Except when it is called quantitative easing.

Why all this panic, though? Aren't economists in charge of it all? Yes. And this is the problem. These highly skilled people carry on, though they exhibit not only a lack of foresight but an astonishing lack of hindsight. Why on earth are they taken seriously when they keep getting things wrong? We are silenced by some jargon and bogus maths (sorry, probabilities) because we are mostly innumerate and because economic orthodoxy presents itself as a higher faith. I am not the only person uncertain as to what a trillion means, surely? It was explained to me in terms of time. A million is a few seconds, a trillion is 30 years – it's a lot of wonga.

The sudden ability to produce money out of thin air is exactly why economists such as Paul Krugman tell us that the Thatcher-lite hausfrau-speak of Osborne is senseless. The deficit is not like household debt, because if it was, I could go mad in Morrisons, go to the till promising to pay later and they would still give me cashback.

But we are indeed in reduced circumstances when debate is reduced to bankers arguing with economists. This clash of ideologies is not really left versus right. It is more akin to fundamentalists talking to agnostics. To be an austerity groupie, one has to ignore the actual behaviour of people; to believe fervently in Keynes, one has to ignore the behaviour of politicians.

Economics is not a science; it's not even a social science. It is an antisocial theory. It assumes behaviour is rational. It cannot calculate for contradiction, culture, altruism, fear, greed, love or humanity at all.

Sure, there are some new radicals on the block who daringly suggest that we should not adhere to the old models. We end up then with these money wizards shouting at each other on Newsnight while novelists such as John Lanchester translate for us. Only non-economists properly explain that money is not real and what was traded during the boom years were not real things, not even real futures, but guesstimates of futures bundled into some bizarre equation where no one at the top could lose. Gamblers always made money, but it became possible to make money without risking your own. It was risk, not wealth, that trickled down, so those without jobs could buy houses soon to be repossessed.

Risk-free capitalism was what the anti-globalisers always warned us about, but they had dreadlocks and dogs on string and were pepper-sprayed away. What they misjudged was how quickly developed countries would come to look like underdeveloped ones: the scale of inequality in "the west". In the US there are the incredibly wealthy and then those who sleep in the woods on the edge of broken cities; here, the unemployed are bussed in to "steward" the celebration of the billionaire monarch.

This is economic sense as it is practised by the deliberately dumb, those who bow down before the calculation that we can have even Spanish levels of youth unemployment (40%-50%) if it reduces the deficit by the next election. Meanwhile, if you have a job, do save up for your pension, because they have gone down the pan.

Some of the free-market economists are right, but politicians can't go there. The free movement of capital really requires the free movement of labour. Go where the jobs are, but do not complain when immigration undercuts your wage.

Do not complain either when economists and government ministers tell you that what you thought had a social purpose must now be profit-driven. Money must be made from schools, hospitals and looking after the elderly. The privatisation of care is one of the only growth industries. This is what you get from this dictatorship of economists, and it should be overthrown. It is wrong and keeps being wrong. The choices to be made now are moral, not economic ones. Only an idiot or an economist would think otherwise.

Are beautiful people 'selfish by nature'?

People with symmetrical faces are more self-sufficient and less likely to co-operate, new research suggests

• Jamie Doward and Bradley Wilkinson
• The Observer, Sunday 14 August 2011
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A study suggests that people with symmetrical faces, such as Natalie Portman, are naturally more self-sufficient. Photograph: Steve Granitz/WireImage
Kate Moss, George Clooney, Natalie Portman or Cristiano Ronaldo may be many people's ideas of dream dates, but pioneering research that combines economics with biology suggests they may not be perfect life partners. According to a study to be discussed this month at a gathering of Nobel prizewinners, people blessed with more symmetrical facial features, which are considered more attractive, are less likely to co-operate and more likely to selfishly focus on their own interests. Santiago Sanchez-Pages, who works at the universities of Barcelona and Edinburgh, and Enrique Turiegano, of the Universidad Autónoma de Madrid, base their claims on the "prisoner's dilemma" model of behaviour, played out under laboratory conditions. Two players were each given the option of being a "dove" and co-operating for the greater good; or a "hawk", taking the selfish option, with a chance of gaining more if the other player chose "dove" and co-operated. The subjects' faces were then analysed. The study found that people with more symmetrical faces were less likely to co-operate and less likely to expect others to co-operate. The findings will be presented at the annual Nobel Laureate Meetings in Lindau, Germany, from 23 to 27 August. The explanation may be found in evolution. The two academics speculate that, on a subconscious level, people tend to view symmetrical physical attributes as a sign of good health and find people with them more attractive as a result. Earlier studies have suggested that individuals with symmetrical faces tend to suffer fewer congenital diseases and therefore make better potential mating partners. As a result, the studies suggest, they are more self-sufficient and have less need for seeking the help of others. The pair write: "As people with symmetrical faces tend to be healthier and more attractive, they are also more self-sufficient and have less of an incentive to co-operate and seek help from others. Through natural selection over thousands of years, these characteristics continue to the present day." The authors also examine the relationship between co-operation levels and exposure to testosterone during development. Testosterone is usually associated with aggressive behaviour, suggesting "alpha males" do not make great team players. But the authors suggest this is only a partial truth and that testosterone can promote co-operative behaviour. They write: "Subjects exposed to higher levels of testosterone during foetal development did not co-operate less than the rest and even co-operated more than subjects with average levels. It seems that leading co-operation and not necessarily obtaining a higher individual profit are seen by some as a source of status." The pair warn against jumping to the "simplistic conclusion" that facial asymmetry or testosterone can be used to predict a person's behaviour, but they suggest their research could help to design public policies and act as a corrective to purely economic-based decision making. They note: "If certain behaviours such as smoking, drinking or high-speed driving are perceived by those who engage in them as part of their quest for status, it is very unlikely that providing economic disincentives like higher taxes, prices or fines will have a strong deterrent effect."

• © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved.

India's reinstatement of Ian Bell was a testament to their sportsmanship, not to cricket's supposed moral superiority

The oldest cricket cliche of them all

Ian Bell acknowedges the crowd after his second stint at the crease following his reinstatement against India. Illustration: Laurence Griffiths/Getty Images

A question: what connects the increase in 1923 of the cost of brewing licences, the British Army's use of dum dum bullets in the Boer War, modern Toryism, Arthur Balfour's opinions on Tariff reform, the lack of bilingual librettos in modern opera, the refusal of Lancashire mill owners to limit the working hours of their employees, and the theft, in 1921, of 1,000 cigars and a consignment of Trilby hats by the theatrical agent Marmaduke Miller?

The answer is that they were all, according to the Guardian "not cricket".

Unsurprisingly enough given its overuse, the cliche eventually lost its currency. But the myth persists that cricket adheres to a stricter set of ideals than other sports. There are a set of stumps pitched permanently on the moral high ground. And so, when MS Dhoni recalled Ian Bell to the crease last Sunday, the phrase "not cricket" was dragged out and dusted down by a couple of the commentators on Test Match Special.

My friend and colleague Rob Smyth wrote a good little book trying to fathom exactly what the spirit of cricket is. But one of the most telling definitions I've seen recently came from Steve James. "I was captain of Glamorgan for two full seasons and in both we won the MCC's Spirit of Cricket award," he wrote last Sunday. "But I've no idea what we did or what it was for." The spirit, Steve rightly points out, is a morass of contradictions. It is permissible for a batsman to stand his ground if he knows he has touched the ball, but it is a sin for a fielder to claim a catch that has touched the ground. It is against the spirit to "dispute an umpire's decision by word, action or gesture," but the DRS now encourages players to do exactly that.

As the Guardian has proven, it is often easier to point out what the spirit of cricket is not than what it is.
And what it is not has, over the years, encompassed just about everything. One of the earliest appearances of "not cricket" was in the Guardian, back in 1888, in a report of the opening match of the county season between Nottinghamshire and Sussex. "The Notts Committee agreed with the Marylebone Club in their endeavour to put down leg play," we are told. "It was not cricket, said Mr Oates, and people would not come to see play of that kind." Leg play! Perish the thought.

In England cricket first flourished as a game played by blackguards, rogues and gamblers, matches were played outside village inns for vast wagers, and results were bought and sold. It was the Victorians who recast it as an altogether more upright activity. "Not cricket" next crops up in the Guardian in a report of a sermon given by the Venerable Archdeacon Wilson at Rochdale Parish Church on 4 February 1894. "Cricket encourages a love of fair play," he told what we can only assume was an enthralled audience. "It is a moral training that operates far outside the cricket field." As for football, well, "the dishonourableness and ill-temper of its controversies is best described as 'not cricket'."

And yet anyone with even the most cursory knowledge of the way the Grace brothers played the game will know that they committed sins against "the spirit" that went way beyond playing the ball to the leg side.
Back in 1864, for instance, "not cricket" makes its very first appearance in these pages in a report of an incident in a game between Surrey and '18 gentlemen', one of whom was WG's elder brother, Edward. "Finding Jupp holding his ground at the wicket in defiance of the most insidious and trying balls," Grace "resorted to the expedient" of bowling a series of three "full pitch deliveries which culminated at 30 foot high and descended on the wicket at an angle unprovided for in the practice of the game."

Jupp, assuming it was an errant delivery, hit the first of them to leg (gasp!) for two. But then "turned sulkily" away from the next two deliveries and allowed them to take their course. The third of them landed flush on the undefended wicket. "There were bursts of hisses from the spectators, who did not conceal their disapprobation for Mr Grace's bowling. They stigmatised him as an 'old woman' and his bowling as 'no cricket'. "The Sporting Papers took up the question, and numerous correspondents angrily support either side," the report continues. "The main accusation against Mr Grace's new trick is that it is "not cricket". That it is quite legal we may assume, as the umpire did not decide against it."

And there's the rub. To this day there is a tension between the letter and the spirit of the laws. What a team is allowed to do and what we think it ought to do can be two quite different things, and when it comes to winning matches players often prefer to give the first precedence over the second, while the press do the reverse.

When Rob's publisher designed the cover for his book, they chose to use one of the most iconic photographs in the history of cricket: Andrew Flintoff with his arm around Brett Lee in the moments after England's victory at Edgbaston in 2005. And understandably so – for many people it seemed to capture the essence of the spirit of the game.

And yet there are people who worked alongside Flintoff in the England team – who insist on staying off the record – who argue that this was the moment that spoiled him as a cricketer. From that point on, they have told me, he became too obsessed with the public perception of him as 'good old Freddy', the guy who always plays the game in the right spirit. When he was appointed captain for the 2006-07 Ashes, he was too friendly with the opposition, too keen to have a laugh during the game and a beer after it. England even brought in a sports psychologist before the third Test at Perth to try and toughen him up. Flintoff himself hinted at this when he wrote, in the forward to Matthew Hayden's autobiography, that the friendships he developed with the Australians changed the dynamic, bringing "a respectful edge to the proceedings" in the middle.

And so to Trent Bridge last Sunday. Some will always argue that MS Dhoni's decision – prompted, reportedly, by the insistence of Sachin Tendulkar – to recall Bell showed weakness in his team's will to win. Others, myself among them, would say that it was simply an impressive piece of sportsmanship, albeit no more so than Paolo Di Canio's refusal to score in an open net when the former Everton keeper Paul Gerrard was down injured, or Andy Roddick arguing that the line judge was wrong to call Fernando Vedasco on a double fault when he was down match point in the 2005 Rome Masters.

The credit is India's alone. The decision was a testament to their character and sportsmanship, not to the moral superiority of the sport they play. The prattle about other sports learning from India's example seems insufferably pompous coming from a game whose history has been as riddled with controversy as cricket's has.

Transcendental Meditation: Were the hippies right all along?

For years, it has been ridiculed as a 1960s embarrassment. Now Transcendental Meditation is back in a big way. So were those hippies on to something all along?

By Laura Tennant
Sunday, 10 July 2011 The Independent

Remember M-People's 1995 Top 10 hit instructing you to "search for the hero inside yourself"? A decade-and-a-half on, it seems that things have changed – these days, it's not so much a hero as a guru that many of us are hoping to internalise. For strange as it may sound, among those of us who seek to surf the zeitgeist, the most fashionable thinker of 2011 may turn out to be Maharishi Mahesh Yogi, the founder of the Transcendental Meditation movement – and the fact that he passed to a better place in 2008 doesn't appear to have discouraged us one bit.
TM, as its followers call it, is rapidly moving from kooky margin to respectable mainstream thanks largely to a burgeoning body of scientific research which indicates that regular meditators can expect to enjoy striking reductions in heart attack, stroke and early mortality (as much as 47 per cent, according to one study). And the apparent benefits don't stop there: according k to a pilot study just published in the US journal Military Medicine, veterans of the Iraq and Afghanistan wars showed a 50 per cent reduction in their symptoms of post-traumatic stress disorder after eight weeks of TM.
Meanwhile, educational establishments which introduce a "quiet time programme" – as did Visitacion Valley Middle School in San Francisco – report drops in fights and suspensions, increased attendance and improvements in exam results. In this country, the Maharishi School in Ormskirk, Lancashire, gets glowing reports from Ofsted and achieves exceptional academic results.
An estimated four million people now practise TM globally – 20 minutes twice daily, as per the Maharishi's prescription – many of them over the course of many decades, and there are some famous, and rather surprising, names on the list. Clint Eastwood, for example, has been doing it for 40 years, a fact he vouchsafed via video link at a fund-raising dinner for the David Lynch Foundation, an organisation set up by the film-maker to teach TM to school children, soldiers suffering post-traumatic stress, the homeless and convicted prisoners. Other celebrity adherents include Paul McCartney, Russell Brand, Martin Scorsese, Ringo Starr, Mary Tyler Moore, Laura Dern and Moby.
TM reaches far into the rational and sceptical world, too; the American philosopher Daniel Dennett does it, as does Dr Jonathan Rowson, head of the Social Brain project at the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) and a chess grandmaster (more from them later). Now a psychiatrist with 30 years' clinical experience, Dr Norman Rosenthal has written a book, Transcendence: Healing and Transformation through Transcendental Meditation, which gathers all the available evidence for TM and urges healthcare professionals to offer it to patients suffering from mental illnesses ranging from mild depression to bipolar disorder.
While the research on the health benefits of TM is fascinating, there's another, more compelling, reason why meditation is in the air just now. Done consistently, it seems to offer some sort of corrective to modernity, a respite from anxiety and the ability to really, truly relax, without chemical assistance; a break from our constant, restless and often doomed aspirations to be thinner, richer and more popular on Facebook; the welcome discovery that happiness is to be found not in retail therapy, but within.
Those spiritual cravings explain why Rosenthal's book is now riding high at number 14 on America's Publishers Weekly non-fiction list. And according to TM UK's official representative, David Hughes, there's a similar surge of interest on this side of the Atlantic; figures are vague, but he reports that "there's definitely an ongoing increase month by month" to the estimated 200,000 people who have learnt TM in the UK since 1960.
I first began to ponder the notion of meditation while writing a piece on solitude. While aloneness might not be a state that comes naturally to most humans, without it, mental-health experts believe, it is impossible to be creative or even really to know oneself. It was the sheerest coincidence that on the day I contacted TM's UK website they were preparing for Dr Rosenthal's press conference.
My own adventures in TM began soon after – but first, a little history for readers too young to remember TM's 1960s "first wave". Many of those who do recall the arrival of the Maharishi Mahesh Yogi in Britain in 1967 understandably feel that TM has been discredited beyond hope of rehabilitation by years of embarrassing rumours and implausible claims. Long before his death, the Maharishi's leadership of the movement had been associated with an unseemly desire to cash in on his celebrity followers – including, most famously, The Beatles (as well as McCartney, George Harrison continued to meditate every day until he died) – and the accumulation of a substantial personal fortune (in 1998, the movement's property assets were valued at $3.5bn). Sexual impropriety was also alleged; The Beatles were said to have fallen out with the Maharishi at least partly because of his attempted seduction of Mia Farrow, or possibly her sister Prudence, at his ashram in India.
Generations of Oxford undergraduates have joked about nearby Mentmore Towers, the Buckinghamshire mansion where the Maharishi installed 100 young men in 1979 to practise continuous, advanced-level TM (they've since been retired). The inherently comical idea of yogic flying (actually yogic hopping) has always strained credibility, as has the Maharishi's claim that if 1 per cent of the globe's population practised TM, the flow of "good vibrations" would bring about a universal state of "bliss consciousness".
Then there was the Natural Law Party, the "political arm" of the TM movement, extant from 1993 to 1999 and set up, according to David Hughes, to "get the message across" about TM and also, bizarrely, the dangers of GM food. The party was a resounding flop – testament, perhaps, to the British mistrust of mysticism and religiosity in politics.
TM also infuriates many militant atheists in a way that "mindfulness meditation", which draws on the Buddhist tradition, does not. Sam Harris is a neuroscientist and the author of books including The End of Faith and The Moral Landscape and a blog, On Spiritual Truths. In a recent piece for The Huffington Post entitled "How to Meditate", he remarks that: "Even an organisation like Transcendental Meditation, which has spent decades self-consciously adapting itself for use by non-Hindus, can't overcome the fact that its students must be given a Sanskrit mantra as the foundation of the practice. Ancient incantations present an impediment to many a discerning mind (as does the fact that TM displays several, odious signs of being a cult)."
Against these objections should be set the fact that people who start meditating tend to keep at it, often for the rest of their lives – a phenomenon suggesting that its benefits, while slow and cumulative, are palpable. The aforementioned Dr Rowson, who was British chess champion from 2004 to 2006, has been practising TM for 14 years. "I'd say that TM is physiologically very powerful, and spiritually a bit shallow," he says. "There are few things better for giving you a feeling of serenity, energy and balance. But I don't think it gives you any particular insight into your own mind."
It seems that scientific research backs his experience. The bestselling Dr Rosenthal came to public prominence through his work on seasonal affective disorder at the National Institute of Mental Health in Maryland, where he also pioneered the use of light therapy to treat it. His interest in TM was piqued when one of his bipolar patients described how practising TM alongside his regular medication had helped him move from "keeping his head above water" to feeling "really happy 90 per cent of the time".
Dr Rosenthal began to examine the large body of scientific research into the effects of TM on long-term users, and also to collect anecdotal evidence from meditators. His book Transcendence is the result, though as he acknowledges in his introduction, "Some of you may find this preview of the benefits of TM – this seemingly simple technique – exaggerated and hard to believe. I don't blame you." He draws on 340 peer-reviewed research articles to back his argument that TM can not only reduce the incidence of cardiovascular disease, but also assist in treating addiction, post-traumatic stress disorder, ADHD and depression, not to mention helping high-functioning individuals achieve greater "self-actualisation".
Listening to Rosenthal talk, I was impressed by his medical experience and academic credentials. Yet TM's ability to reduce one's risk of heart disease interested me less than its effects on mental wellbeing and creativity. Maslow's famous hierarchy of needs described "self-actualisation" as the thing humans seek when their six basic needs for food, safety, physical shelter, love, sex and a sense of belonging have been met. Like many other evolved and somewhat spoilt beneficiaries of the affluent West, I too wanted to self-actualise, and I hoped TM could help me do it.
Acquiring the skill isn't difficult, but it does require time and money. Fees are charged on a sliding scale according to income – courses start at £190 for children and rise to £590. Initiates attend four sessions, and are given a Sanskrit mantra, which is repeated soundlessly in one's head while meditating. The objective, according to TM's website, is that "the mind effortlessly transcends mental activity and experiences pure consciousness at the source of thought, while the body experiences a unique state of restfulness".
The first thing I noticed was that repeating the "sound vibration" of my mantra took me to a place which was neither wakefulness, sleeping nor dreaming. Over the course of subsequent sessions I've regularly become detached from my physical self and dipped in and out of this "fourth state" of consciousness. Allowing sometimes painful thoughts and feelings to come to the surface has bought tears to my eyes, but I've also reached important decisions.
A month into my practice, I have not so far experienced "bliss", a condition beyond time and space in which one is not "ebulliently happy", as Rosenthal puts it, but "calm and alert"; a state, he explains, in which one realises that "just to be is a blessing". But I'm prepared to believe the effects are gradual and I'm struck by the fact that I no longer resent the necessary investment of time.
The effectiveness of this daily "yoga for the mind", as the meditator and fashion designer Amy Molyneux calls it, is the reason, I think, that thousands of people can ignore the Maharishi's theory in favour of his practice. But depending on your point of view, TM's spiritual aspects remain problematic. When the Maharishi School was granted "free school" status, for example, allowing it to scrap its annual £7,600 fees and receive Government funding, hackles were raised in more determinedly sceptical quarters.
Should we be concerned that a school infused with the TM philosophy is getting Government funding? To find out whether the organisation merited the accusations of "cultishness" levelled at it, I spoke to Suzanne Newcombe, a research officer for Inform, the charity run by the London School of Economics to provide information about new religious movements or "cults". "We've had a certain number of complaints from members of the public about the fee structure," she told me. "And occasionally relatives may be anxious about people who commit their lives to the movement. But we're not overly concerned about adults making decisions for themselves which don't hurt anyone else."
According to David Hughes, TM is a not-for-profit, charitable and educational foundation which, once it has paid its teachers and covered its costs, ploughs its revenue back into outreach programmes in the developing world. It is certainly not shy about proselytising; but if its impact on public health is as great as Dr Rosenthal believes, one could argue it has a moral responsibility to spread its message. As for me, I'm seriously considering introducing my children to a stress- and anxiety-busting daily ritual that seems to do no harm and may well do a great deal of good.

Europe's top industrial firms have a cache of 240m pollution permits

European Commission estimates energy-intensive sector will have accumulated allowances worth €7-12bn by the end of 2012

Damian Carrington
guardian.co.uk, Sunday 19 June 2011 15.38 BST
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ArcelorMittal steel worker
Steel producer ArcelorMittal tops the list of firms with surplus of emissions trading permits, according to thinktank Sandbag. Photograph AP

Some of Europe's largest industrial companies gained billions of euros from the carbon emission rules they lobbied fiercely against, new analysis reveals today.

Ten steel and cement companies have amassed 240m carbon pollution permits from generous allocations, according to a report by Sandbag, the carbon trading thinktank, seen by the Guardian.

The free permits, granted to companies with a market value of €4bn (£3.5bn), can be sold or kept for future use. The European commission estimates that the entire energy-intensive sector will have accumulated allowances worth €7bn-€12bn by the end of 2012.

"More and more businesses see that Europe's future lies in a highly efficient economy with low pollution," Baroness Worthington, Sandbag's founding director, said. "But a small group of carbon fat-cat companies are trying to stop this, in spite of making billions from a windfall of free pollution permits."

The steelmaker ArcelorMittal leads the list of companies in the report, with a current surplus valued at €1.7bn, followed by Lafarge, the cement group.

Tata Steel, in third place with a surplus valued at €393m, last month announced 1,500 job losses at its plants in Lincolnshire and Teesside, blaming emissions regulations as well as the economic downturn. Karl-Ulrich Köhler, chief executive of Tata Steel Europe, said at the time: "EU carbon legislation threatens to impose huge additional costs on the steel industry." Tata Steel declined to comment on the report.

The European Union emissions trading scheme (ETS) puts a cap on the carbon pollution emitted by energy and industrial companies. Those reducing their emissions can sell their spare permits to those who do not. But a combination of initial over-allocation by national governments and the economic decline has left the steel, cement, chemical, ceramic and paper sectors with many more permits than they need. The industries have lobbied hard against calls from governments including the UK for the tightening of the ETS and other emissions targets.

Eurofer, the lobby group representing all of Europe's steelmakers, said last month: "To remain competitive in the free, global steel markets, European steel needs … legislation that does not harm its competitiveness. But we are gravely concerned that EU climate change policy will do precisely that."

Cembureau, which lobbies for the cement industry, takes a similar line, stating: "It would be irresponsible to shift the [emissions] goalposts."

In the UK, the government has proposed incentivising low-carbon innovation by setting a British floor price for carbon from 2013. But this is opposed by the CBI. John Cridland, the director general of the employers' group, said: "It risks tipping energy-intensive industries over the edge."

The government has made some concessions, promising to produce plans later in 2011 to compensate businesses for any competitive disadvantage.

However, independent analysis by Bloomberg New Energy Finance found that the carbon permits held by the steel industry would cover its emissions for the next 12 years. "If the steel sector [on aggregate] did not sell any of its surplus, it would not have a need to purchase emissions until 2023," said Guy Turner at Bloomberg NEF.

The Sandbag report, based on public data, also found that nine of the 10 "carbon fat cats" bought between them 24.4m permits from the cheaper international market, mainly from companies in China and India. These can be used within the EU's trading scheme, enabling companies to retain the more valuable European ETS permits. Furthermore, despite the European companies claiming that tougher emissions rules would drive business overseas, some were paying overseas steel and cement companies for their international carbon permits.

"Purchasing carbon offsets from foreign competitors would not seem to be the actions of businesses genuinely concerned that the ETS will drive business abroad," said Worthington.

Not all companies are resisting the tightening of the European ETS. Five major energy groups, including Britain's Scottish and Southern Energy, last week called for spare permits to be withdrawn, a proposal supported by Sandbag.

"Failure to do so could severely hamper business incentives to invest in low-carbon technologies, as the price signal will be skewed in favour of fossil-based solutions," their statement said.

The Guardian contacted all the companies named by Sandbag. Those who responded argued that the surplus permits arose from decreased production and might be needed when the economy recovered. They said that without protection, steel and cement making would be driven to countries with less CO2-efficient manufacturing practices. Many called for global regulation of emissions

A spokesperson for ArcelorMittal said: "As part of our corporate responsibility strategy, we have decided that any sale of such surplus allowances will be reinvested into projects aimed at the improvement of our energy efficiency footprint, as this will help to reduce our overall CO2 emissions."

Erwin Schneider, at the steelmaker ThyssenKrupp, said: "Companies make decisions based on expected future developments. Any earnings from the past will either have been reinvested already or paid out to shareholders. Therefore it seems to be very misleading to use historic numbers to address our future position."