Still they are fighting for dead men’s shoes

By Samuel Brittan
Published: February 3 2011 19:57 | Last updated: February 3 2011 19:57
“One of the great growth industries of the English-speaking world is the exegesis of the writings of John Maynard Keynes. What exactly did Keynes say? When did he say it? Who were his precursors? What did he really mean? What should he have meant? What would he be saying if he were alive today?” I wrote these words many more years ago than I like to think. Since then this industry has grown still further, spurred by the financial crisis. Vince Cable, the Liberal Democrat business secretary in Britain’s coalition government, wrote an article in the January 17 issue of the New Statesman entitled “Keynes would be on our side”. The following week, the economists David Blanchflower and Robert Skidelsky published a riposte, talking of “the foolhardy project of enlisting Keynes on behalf of the coalition’s policy”.

I always try to be fair. Both articles contained interesting reflections on the world and British economies and were on a much higher level than most of what passes for economic debate. But these could have stood on their own without enlisting a dead man in support. Nor is it only Keynes. Francis Wheen, in his Financial Times review of the historian Eric Hobsbawm’s How to Change the World: Tales of Marx and Marxism, does much the same when he argues that Marx would have rejoiced at the fall of the Soviet model.

This is getting ridiculous. As some FT readers pointed out during earlier outbreaks of the Keynesian controversy, what a reflection all this is on the would-be scientific standing of political economy – and Marx was a political economist as well as an unsuccessful revolutionary. Can one imagine physicists trying to advance their views by showing that they were implicit in some obscure passage in Einstein or Isaac Newton?

Nor does one have to stick to physics, which economists try too hard to copy. Evolutionary biologists read Darwin and rightly. He was a very attractive writer; most of what he wrote can be understood by the non-specialist; and I hope it will not lower the tone if I refer to the delightful animal drawings that enliven his work. But not even the most fervent Darwinian would use a quotation from him to clinch an argument or would dispute that, in ignorance of the still-to-be revealed principles of genetics, he mistakenly believed that acquired characteristics were normally inherited.

The logical point is this. If Marx were alive today he would be 193 years old. Keynes would be 128. Discussions of what they would think today implicitly assume that they would have retained the intellect of their prime and adjusted their thinking to later events. How can anyone know how they would have done this? I first realised the absurdity involved when, as a student at Cambridge, I came across a lecture by the veteran economist A.C. Pigou entitled “What would Alfred Marshall have thought of current developments in economics?” Marshall was a quintessentially Victorian figure who founded the Cambridge school of economics, and who died in 1924. Milton Friedman remarked to me that Pigou had simply not understood modern developments. Would it not have been simpler if Pigou had simply made his own observations and argued them out with Friedman?

One can imagine thinkers so unflinching that they might utter the same thoughts indefinitely, although they are not that easy to find. Take Adam Smith. Arguments about whether he would have been a Thatcherite or a social democrat are absurd. His insights can be developed in either direction. On the other hand one can easily imagine his remark about “that insidious and crafty animal vulgarly called statesman or politician” being repeated today, reflecting the same Scottish shrewdness. Even the Ten Commandments do not reflect a single unchanging view. The sixth commandment “Thou shalt not kill” is followed in Exodus by an enumeration of various offences deserving of the death penalty.

As anything that can be misunderstood will be misunderstood, I must emphasise that there is no harm in proclaiming the insights of past thinkers for their contemporary application. I myself have tried to use some of the ideas of Keynes’s General Theory to criticise the priority being given to fiscal retrenchment by so many European governments and have preferred the US stimulus route. But is that what Keynes himself would say? I have no idea. Nor has anyone else in the case of a thinker so well known for changing his mind. Indeed, if I could have got away with it I would have spelt Keynes with a small “k”.

Some academic figures will say that the whole argument about what great men would have thought reflects political and journalistic preoccupations far removed from the hard grind of modern mathematical economics. The editor of the Economic Journal, looking at the submissions he has received, remarks that the much-discussed crisis of economics “either has not happened or not been recognised by the profession”. Take what comfort you like from these words.

www.samuelbrittan.co.uk

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From bad economies spring new media channels

From bad economies spring new media channels
By Mike DiFranza, founder and president of Captivate Network and chairman of OVAB

Published: January 25 2010 13:31 | Last updated: January 25 2010 13:31

“Progress” isn’t usually the first word that comes to mind when a recession hits, yet that’s often what recessions create.

Historical patterns suggest that recessions have given rise to transformational media, from radio to cable television. If that historical pattern holds up – and there’s no reason to believe it won’t – the current recession’s progeny will be mass acceptance of highly targeted and digital media channels.

For almost 80 years, every major economic crisis to hit the US has vaulted nascent communication mediums into prominence. The Great Depression was the catalyst for radio to evolve as a major communications medium in the 1930s.

Television took its place as the dominant national medium during the recession of the mid-1950s. Cable television moved from hotel rooms to homes during the energy crisis and subsequent recessions of the late 1970s and early 1980s.

The internet emerged from the military and academic realms into the mainstream during the 1988 recession. After the 2000 recession, online advertising growth exploded.

What is it about a struggling economy that nurtures new media?

The answer has more to do with human nature than economics, though there is some of that at work too.

People are naturally averse to change, but if they have to change to avoid risk, they will. When consumers are buying and profits are rolling in, corporate marketing organisations have no motive to risk a failed campaign by investing in an emerging medium.

But when a serious recession like the one we’re facing now hits, organisations have to reassess what is and isn’t working in their advertising programmes. John Wannamaker, founder of the US’s department-store industry, once lamented: “Half my advertising dollars work, I just don’t know which half!”

That ambiguity is not an option in today’s new economic reality. Every chief marketing officer understands that effectively engaging consumers who are capable of buying their company’s product is the top priority.

Consumer media consumption trends and technological changes accompanying the current recession portend a much larger shift in the media landscape this time around. Mobile advertising and digital place-based networks, which display content and advertising on screens in public places, are to this era what cable and radio were to years past.

Digital place-based networks turn venues such as elevators, lobbies, airport terminals and taxis, into communication channels for today’s marketers. They enable advertisers to target very specific audience segments with engaging content that draws attention to their advertising message. They are aimed at targeting consumers during the 44 per cent of the day that the consumers are actually awake and out of their homes (source: PQ Media) actively making purchase decisions.

Until recently, the public mainly consumed media in the home during predictable hours, such as evening prime time. Today, market dynamics demonstrate that a big percentage of the public gets its news, information and advertising on the go.

According to a recent BIA/Kelsey forecast, digital out-of-home advertising will grow 13.5 per cent over the next four years, outpacing the 1.4 per cent growth for home-consumed advertising. BIA/Kelsey expects advertisers to spend $2.2bn on digital out-of-home advertising this year and $3.7bn by 2013.

A poor economy, however, is only one factor setting the stage for the emergence of transformational media. The other critical element accompanying the post-recession adoption of new media channels is third-party audience measurement data.

Organisations such as the newspaper industry’s Audit Bureau of Circulation (ABC) and broadcast’s Nielson and Arbitron ratings provide objective credibility for circulation and viewership claims.

The Out of Home Video Advertising Bureau, the North American industry organisation, has created guidelines for calculating audience sizes of “place based” digital networks, such as lobby and elevator screens.

Digital out-of-home networks are expected to release independent third-party research over the next few quarters and will provide advertisers with the equivalent of the broadcast industry commercial ratings.

Together, those new research sources will provide advertisers with the objective measurement – and the confidence – to consider and evaluate campaigns better on digital out-of-home networks.

Neither digital place-based media nor the recession started the mass media’s market share erosion; audiences have been splintering for years into finer and more elusive pieces.

In the 1940s, viewers would watch televisions through appliance store windows. When the masses could afford televisions, advertisers followed them into their homes.

Today, consumers are on the go and advertisers must engage them out of their homes, on the road, in the air or at the office if they are to prosper in the new economic reality.

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