Edward Hadas

The knots of development

By Edward Hadas
February 6, 2013

Why are so many poor countries stuck with huge economic problems? Why, for example, are there so many unemployed young people in Egypt – 41 percent of 19-24 year-olds? The poor state of British housing can help answer these questions. 

Taxes and human nature

By Edward Hadas
January 30, 2013

The tax system could well be the most idiotic, hypocritical and unnecessarily complicated part of modern industrial economies. The system needs to be rebuilt.

The demographic effect

By Edward Hadas
January 23, 2013

The populations of many countries are declining in a time of peace and prosperity. That unprecedented and basic change in society must indicate something, but what? The experience of Japan, where the trend is most advanced, provides some hints.

The then and now of pensions

By Edward Hadas
January 16, 2013

What is the right size for pensions? That question can be approached in two ways: “then” and “now”. Pensions, and other economic arrangements to support elderly people, may be considered repayments for what they did back then, when they were young. Alternatively, these payments may be considered as a share of output right now. In rich countries, the two approaches are in conflict. The “then” logic, which is based on promises made long ago, supports higher pension payments than the “now” logic, which is mindful of rapidly ageing populations. Politicians struggle to find acceptable compromises between the two approaches.

What Islamic finance can offer

By Edward Hadas
January 9, 2013

The Islamic approach to finance was once the most advanced in the world. The period of pre-eminence ended six or seven centuries ago, but the religion’s fundamental insights into the field could help form a financial system suitable for the 21st century.

The world at work

By Edward Hadas
January 2, 2013

When I was a boy I was fascinated by my parent’s copy of “The Family of Man”. The book, taken from a 1955 photography exhibition at the Museum of Modern Art in New York, was like a window into the big world. The beautiful images of people from many countries showed that the human condition was essentially the same everywhere: we all went through the same noble story of birth, love, struggle, religion and death. Much later I learned that the photographer Edward Steichen, who designed the show, wished to inspire exactly such sentiments. In the words of Carl Sandburg, taken from the book’s prologue, the human race was “one big family hugging close to the ball of Earth for its life and being”.

Greed, justice and deception

By Edward Hadas
December 19, 2012

Greed contributes to all the economic and financial woes of prosperous societies. The United States and other rich countries produce much more than is needed to support all of their people in comfort, so if desires were all truly modest, there would be few problems. Greed encourages people to decide that their own share is too small. Greed influences the popular desire for GDP growth (more, faster), financial gains (higher house prices as a human right) and total economic security (guaranteed pension, come what may). Voters’ greed encourages governments to spend more and tax less.

A tale of two half-centuries

By Edward Hadas
December 12, 2012

The future rarely turns out as expected. Imagine, for example, two sets of economic predictions for the half-century that began in 1962. The first, the Blind Guide, is written with only the knowledge available then. The second, the Retrospective Guide, is based on what actually happened.

Economics for Christmas

By Edward Hadas
December 5, 2012

The Christmas season is a particularly good time to think about the fundamental weaknesses of conventional economic theory. Frenzied shopping for gifts cannot easily be reconciled with the standard model’s dour “economic man”, a creature who “who inevitably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial”, in the classic definition of John Stuart Mill. The joyful Christmas season is also a good period to offer praise for a line of economic thinking which draws on a much more flattering view of human nature.

Candidates as consumer products

By Edward Hadas
November 21, 2012

Barack Obama did not win the election because more Americans thought he would be a better president than Mitt Romney. More Americans voted for the incumbent than for the challenger, but it is Obama’s superior campaign organisation, and not his personal appeal, that deserves most of the credit. In particular, his product managers were better than Romney’s at using the technique of “data mining”.