Love My Books

Some books are so dear, so essential, that if a potential partner finds it risible, any meeting of the minds (or body) is impossible, writes Molly Flatt ...

Special to MORE INTELLIGENT LIFE

For bibliophiles, books are relationship brokers. Whether discovering a mutual passion for Potter on a first date, bonding over the sensuality of 18th-century Japanese yomihon, or placing a suitably literary lonely hearts ad in the London Review of Books, our romantic encounters are often dominated by the books we love. And hate.

Opposite reading tastes certainly do attract. My boyfriend may think that Dostoyevsky plays baseball for the Mets, but as an eclectic reader, equally interested in Dick Francis as DeLillo, I relish challenges to my reading preferences and predilections. Rifts over books give partners a chance to redefine (and refine) what we like, and to explore personal differences. A little game of intellectual and aesthetic one-upmanship can be a very sexy thing.

However, I do believe in the dealbreaker book. This book so deeply resonates with your soul that if a potential partner finds it risible, any meeting of minds (or body) is all but impossible. Most of us have one or two books that encapsulate all we believe to be skilful and admirable in art and in life. And while we don't necessarily expect everyone to enjoy them, we do expect our soulmate to. Or at least respect them. Rachel Donadio at the New York Times explored this very issue in a lively essay in March. She further proposed that: "Brainy women are probably more sensitive to literary deal breakers than are brainy men. (Rare is the guy who'd throw a pretty girl out of bed for revealing her imperfect taste in books.)"

After all, women read more, especially when it comes to fiction. 'It's really great if you find a guy that reads, period,' said Beverly West, an author of "Bibliotherapy: The Girl's Guide to Books for Every Phase of Our Lives." Jessa Crispin, a blogger at the literary site Bookslut.com, agrees. 'Most of my friends and men in my life are nonreaders,' she said, but 'now that you mention it, if I went over to a man's house and there were those books about life's lessons learned from dogs, I would probably keep my clothes on.'

The NYT books blog Paper Cuts then asked readers "What are your literary dealbreakers--or literary deal-sealers?" There are 404 comments so far.

Our dealbreaker book represents what we want to be--it is an exercise in literary self-actualisation. It is different from the unread tomes found on our Facebook profiles--the 'If You Don't Know Mulla Sadra's "Diwan Shi'r", You're Not Worth Knowing' status game we play. We have actually read and been moved by these books. And our fondness for them might well be embarrassing. But it doesn't matter whether it's Marian Keyes or Milan Kundera--there are books we fall in love with. At times they seem to evoke the best versions of ourselves (indeed, the version we perhaps hope appeals most to others). Our relationship with our favourite books is intimate, and something worth defending.

With a dealbreaker book, someone's breezy dismissal can feel worse than an active dislike. If the books we hold close so utterly chime with our own hopes and fears, so strongly capture an ideal of self and life and beauty, a failure to share these basic visions can suggest a profound mismatch. To remain unstirred by what a lover adores seemingly promises a bland future of belittled dreams and quiet dinners in Pizza Express.

My dealbreaker is Dorothy Dunnett's "House of Niccolo" series. Yes, these novels have horses, medieval men and desert landscapes on their covers. Admittedly, being seen reading them sometimes makes me wish I could plaster my degree on the dust-jacket. But I would defend their scholarly curiosity, technical brilliance and humanity to the point of divorce. Perhaps this is narrow-minded and even a bit sad. Should fictional relationships ever really trump real flesh and blood?

It was definitely unfair for me to expect my boyfriend to wholeheartedly embrace my beloved copy of Elizabeth Knox's "The Vintner's Luck", in which a pissed, gay, leather-trouser-wearing angel is sodomised by a French peasant (an acquired taste, perhaps). But I'm sure he'll love Dorothy, when he reads her. At least, I'm sure he'll say he does. "Love me, love my book" goes the deliciously childish refrain.

OBAMA

Barack Obama -- smiling, reassuring and firm -- was the face of change. Four years after this little-known Illinois state senator delivered the keynote address at the Democratic convention, Obama accepted the Democratic nomination in a stunning testament to the pace of change. Mile High Stadium filled to the rafters with 80,000 walking-on-air Democrats was the place of change.

The Democratic Party, hungry for power after being in the wilderness for 20 of the last 28 years, could have played it safe, could have searched until it found a politically acceptable white male politician. But instead, after a spirited and historic battle against Hillary Clinton, the Democrats selected the first African-American presidential nominee in history, decades before the poets, preachers and certainly the political pragmatists dreamed that such a transformation of America was possible.

Watching Barack Obama give the most important -- though not the most eloquent or boldest speech of his career -- was a reminder that near miracles can happen even in this jaded decade. And, win or lose in November, America has been reshaped forever by this alliance of what Obama described as "young people who voted for the first time and the young at heart." On a night for defying the taboos of intolerance, the Democratic nominee went out of his way to affirm that "our gay and lesbian brothers and sisters deserve ... to live lives free of discrimination," even if Obama glided by gay marriage.

Yet the subtext of the Obama speech was an acknowledgment of how arduous the political climb to November victory remains. Repeatedly, Obama had to deflect the expected Republican attacks on his love of country and the sneers over his unorthodox family background. "Let us agree," Obama declared, adroitly masking his defensiveness, "that patriotism has no party. I love this country, and so do you and so does John McCain." He also responded to the Republican refrain that his campaign has been a rock star's ego trip when he said, "I stand before you tonight because all across America something is stirring. What the naysayers don't understand is that this election has never been about me, it's about you."

The Obama campaign is under no illusions that a single speech will allow Obama to surge ahead of McCain in the national polls. At a breakfast with reporters Thursday morning, Obama's top strategist David Axelrod conceded, "I think this is a close election. It is a close election now, it will be a close election after the conventions and it will probably be a close election until the end." Axelrod also pointed out that deciphering the instant polls after Denver will be difficult "because this is an unprecedented situation with two conventions coming one right on top of the other." The late August political calendar is so crowded that Democrats worried that the McCain campaign would leak its vice-presidential pick in the midst of Obama's speech instead of waiting to announce it at a Friday noontime rally in Dayton, Ohio.

News reports suggest that McCain is struggling to fill a 10,000-seat arena in Dayton, while Obama, of course, could probably hold a standing-room-only rally in Yellowstone National Park. The question is how to quantify the "enthusiasm gap" (this week's buzz phrase) between the two campaigns. The Obama campaign ballyhooed the Mile High outdoor acceptance speech (the first time a nominee ventured away from the convention hall since John Kennedy in 1960) as an invaluable Rocky Mountain organizing tool. "John McCain, in my view, cannot win the presidency without carrying Colorado," said Obama campaign manager David Plouffe, at the breakfast organized by the Christian Science Monitor. Aside from 1992 when third-party candidate Ross Perot was on the ballot, Colorado has gone Republican in every presidential election since 1964.

In his convention speech, Obama tried to portray his Republican rival, who turns 72 on Friday, as out of touch on economic issues. "Now I don't believe that Senator McCain doesn't care what's going on in the lives of Americans," Obama said. "I just think he doesn't know." Moments later, after ridiculing the Arizona senator for believing in trickle-down economics, Obama repeated the refrain: "It's not because John McCain doesn't care. It's because John McCain doesn't get it." The none too subtle message: McCain is a fuddy-duddy not because of his age but because of his Republican values.

This was the speech in which Obama defined his vision and fleshed out his inspirational rhetoric with tangible proposals. But the careful way that Obama laid out his agenda made it clear that the Democratic nominee is cleaving toward the center. What was the very first policy idea that Obama pointed to when he promised "to spell out exactly what change would mean if I am president"? Reforming the tax code -- and a drum roll, if you will, maestro. Within seconds, Obama was pledging to "eliminate capital gains taxes for the small businesses and start-ups that will create the high-wage, high-tech jobs of tomorrow."

Along with middle-class tax cuts (that siren song of Bill Clinton's presidency), Obama did unequivocally set a 10-year goal to "finally end our dependence on oil from the Middle East." But compared to Al Gore's chilling warning about global warming in his Thursday night speech before network coverage began, Obama's proposals seem pallid in comparison. Even healthcare reform -- the signature domestic issue of the Democratic primaries -- merited just 100 words. The holy Democratic grail of universal coverage was boiled down to: "If you have healthcare, my plan will lower your premiums. If you don't, you'll be able to get the same kind of coverage that members of Congress give themselves."

The Supreme Court was never mentioned by Obama, a former professor of constitutional law. Nor was Guantánamo, torture or civil liberties. These issues clearly do not poll well among swing voters in Michigan, Ohio and Indiana, industrial states that Obama highlighted with anecdotes in his speech. What all this suggests is not some ideological mushiness or inherent character flaw in Obama, but rather the reality that he finds himself in a tight campaign in which he must constantly acknowledge the conservative impulses of persuadable voters. It was no surprise that Obama, sounding a bit like Bill Clinton in 1996 praising school uniforms, said "fathers must take more responsibility to provide love and guidance for their children."

Americans never elect policy proposals; they choose the men behind them. What Barack Obama achieved Thursday night was something unimaginable in Martin Luther King's day or even in the 1990s. In a football stadium at the foot of the Rockies, this product of a marriage between Kenya and Kansas rewrote the history of a nation that has been struggling for three centuries with the legacy of slavery and segregation. Obama's gift is that he makes it all seem natural -- that his rise to the heights of a presidential nomination was an inevitable consequence of 21st century America. The fireworks that were going off over Mile High Stadium were, in truth, more than equaled by the glow in the hearts of Democrats who leave Denver alight with hope.

FUTURE

Zogby’s Crystal Ball

In the opening pages of “The Way We’ll Be: The Zogby Report on the Transformation of the American Dream,” the pollster John Zogby describes people between ages 18 and 29 as “the first colorblind Americans.” Presumably this means that young African-Americans attending Nas­car rallies won’t notice all those Confederate flag headbands the colorblind good old boys are sporting and that Yalies whose BMWs break down at 3 a.m. outside a hip-hop club in East New York won’t notice that there don’t seem to be a lot of Whiffenpoof aficionados in the immediate vicinity. What Zogby probably means to say is that the demographic group he refers to as “the First Globals” is the first generation of Americans who would have the nerve to describe themselves as being colorblind and not expect to be laughed at. Whenever I see glowing reports about color­blind white people, I wonder how many black people were included in the polling sample.

“The Way We’ll Be,” a book that addresses “the current state of America, the likelihoods of the close-in future and the movement of our underlying social geology,” is nothing if not upbeat. A rigorously pseudo­scientific examination of “the new plate tectonics of American society,” it asserts that a “new consensus . . . is emerging,” and that the political and cultural divisiveness of the past few decades will soon go the way of the Edsel, the Hula Hoop and young people who notice other people’s races.

“My surveying shows that we are in the middle of a fundamental reorientation of the American character away from wanton consumption and toward a new global citizenry in an age of limited resources,” Zogby declares. And if his numbers are to be trusted, things are going to be absolutely peachy. Racism is headed for the ashcan of history, as is greed. Blogs are going to clean the mainstream media’s clocks, thereby rescuing some of the world’s most admired forests. Alternative sources of energy are in; rape of the environment, out. YouTube and Stephen Colbert will make it impossible for politicians to lie about their record — and we all know how much politicians fear that. Corporations that maximize shareholder value at the expense of employees or the environment will be shunned, and if you’re exploiting child labor, you’re quickly going to find yourself on the fighting side of most American female consumers.

That’s not all. Big cars have had their day in the sun; from now on, energy-­efficient vehicles will rule the roost. Micro­breweries will undermine the stodgy old Budweiser/Miller Lite paradigm. And China, Americans of all ages agree, will pose the biggest economic threat to America, while North Korea will pose the most formidable military threat. (In these cases, Zogby is engaging in what is known as “reverse prognostication,” a process whereby a pollster stakes his reputation on correctly prophesying events that have already occurred.)

Oh, but there is more. Americans of the near future will be deeply concerned about places like Darfur, even if they cannot find Darfur on a map. Many of them will get their degrees from online universities, where the odds of being able to pinpoint Darfur’s location will be even less good. The best news of all is that in the years to come, smear campaigns, bogus “truth squads” and cynicism in general will no longer be effective weapons in politics — i.e., you can fool some of the First Globals some of the time, and most of the First Globals all of the time, but you can’t fool all of the First Globals all of the time, because First Globals have more sophisticated plate tectonics than their parents.

One cause of this cultural about-face from decades of churlishness, avarice, environmental rapine and racism is the Internet. Zogby believes that by making information available that was previously difficult to retrieve, the Internet will turn us all into better citizens. (He does shy away from reports that a gigantic portion of Internet activity is related to pornography. But this is perhaps because watching a lot of pornography and becoming a better citizen are not mutually exclusive activities.) These myriad forces are coalescing to bring about a glorious new era in American life, where honesty, transparency and old-fashioned straight talk will dominate. As the pollster says about today’s consumers, “they are sick right up to their eyeballs of false promises and phony claims.” Indeed, “the generation now rising to power is fundamentally different in its aspirations and expectations from the ‘Greatest Generation’ now rapidly fading into the sunset.”

And not a moment too soon.

A small portion of “The Way We’ll Be” is devoted to dazzling tidbits of information one probably couldn’t find elsewhere. Red Skelton, making a surprise return from the mortuary, narrowly edges out Bill Cosby as “the funniest comedic performer of all time.” Eighty-six percent of Atlanta-based Asians have never heard of Ho­mer’s “Iliad” or “Odyssey,” but 72 percent can tell you the name of Homer Simpson’s son. Men now identify the heart, followed closely by the brain, as the body part they value most in a woman; breasts, losing most of their old star power, finish a dismal second-from-last, trailed only by the feet. Settling an argument that has been raging for years, Zogby cites a Census Bureau study proving that “to be poor in America is not the same as being poor in Haiti or Bangladesh or much of Africa.” More astonishing still, 35 percent of First Globals support the idea of allowing scientists to recreate woolly mammoths. The book does not say to what uses the woolly mammoths would then be put — wiping out poverty in Darfur, providing entertainment at colorblind frat parties, replacing Red Skelton as the funniest comic of all time — but it is precisely these sorts of out-of-the-box inquiries that separate John Zogby from run-of-the-mill pollsters. There’s simply no telling what marketers and demographers can reap from this treasure-trove of data.

Though Zogby attempts to be nonpartisan, the underlying message of his book is that authenticity is entering a golden age, cupidity is kaput and cynicism will soon be a thing of the past. That and the fact that he seems to have a soft spot in his heart for Al Gore and Anna Quindlen suggest that he hates Republicans. A dominant theme of his book is that mean old white men who drive big cars are a spent force. I only wish this were so; for quite some time I’ve been thinking of cleaning out my desk and heading for the exits now that society no longer needs me. But as my wise old mentor, the Barron’s editor and columnist Alan Abelson, used to remind me, the con man’s favorite pitch line is: “This time it’s different.” Before World War I, there was a common European belief that progress was inevitable. The First Battle of the Somme ended that. Zogby, a Pollyanna if there ever was one, seems to have infinite faith in mankind’s ability to perfect itself. We’ll see.

Part of the problem in the pop clairvoyance racket is that not all oracles are equally Delphic. Zogby, who loves to coin cloying terms like “Secular Spiritualists” and “the Dreamless Dead,” describes pollsters as “priests and philosophers . . . peering through the veil of time.” He adds, “Unlike priests and philosophers, though, . . . we at least have the data to back us up.”

Priests and philosophers may disagree. Did the pollsters who predicted a Kerry-Edwards victory in 2004 have the data to back themselves up? Were the pollsters who said, “Watch out for that Fred Thompson surge!” and “Keep your eyes peeled for that Wesley Clark tsunami!” supported by any solid numbers? Did the pollsters who had Hillary Clinton facing off against Rudy Giuliani in November have much success peering through the veil of time? Sorry, Mr. Zogby, but when the public is in the market for prognostications, a lot of us are sticking with Aristotle, Descartes, Fulton J. Sheen, St. Jude and Nostradamus. Prophecy-wise, they’ve got a better track record.

British & Chinese Spectacle

Here, Brendan O’Neill challenges the idea that only totalitarian regimes can pull off big, bright, spectacular sporting ceremonies. Further below, Patrick Hayes reports from the ‘handover celebrations’ in east London.

Does being free and democratic also mean being naff? Reading the coverage of the London 2012 handover ceremony, you could be forgiven for thinking so.

Everyone recognises that the British ceremony at the end of the Beijing Games was mortifyingly awful. I mean, Leona Lewis in a 12-foot metallic dress? Jimmy Page sweating buckets on guitar? David Beckham kicking a ball in the wrong direction and almost knocking over a Chinese acrobat? As for the big red bus - perhaps that was included as the one recognisable symbol of modern Britain, since, in the words of one catty Chinese journalist, the British performers certainly ‘weren’t famous enough’ to be known in China.

And yet there has been an outbreak of bizarre backslapping over how wonderfully rubbish the British ceremony was - because apparently it is in the nature of democracy to be rubbish. The Sun gushed over our ‘eight barmy, brilliant minutes’ in which we showed that, in 2012, we won’t try to ‘emulate China’s ruthlessly organised, flawlessly delivered, bank-breaking exhibitionism’; instead we’ll have a ‘touch of British eccentricity, a pinch of irony, and a little self-deprecating humour’.

One columnist said the handover ceremony may have been a mess but it showed that we are ‘world class’ in our own little way. Unlike the Chinese we don’t do ‘interminable patriotic songs’ and ‘goose-stepping martial processions’ (yeah, you Nazis!), but instead prefer the ‘creative quirkiness and good humour that are perhaps our greatest national assets of all’.

And you know what? Being quirky, being naff, being incapable of agreeing on an Olympian representation of what it means to be British… all of this is glorious evidence of our free and open way of life. Allegedly. A British columnist in America says of course the London Olympics will not resemble the Beijing Games, ‘not in choreography, not in pyrotechnics, not in quantities of identically dressed, super-coordinated dancers, and not in suppression of political dissidents either’. And that is because we, unlike China, are free, which means our Games will be ‘a lot less sinister, a lot less damaging and a lot more fun’.

The transformation of an amateurish eight-minute handover ceremony into a symbol of British fair play – what we might call snatching victory from the jaws of televised international shame – shows that Britain is certainly world class at one thing: demented self-flattery. If there were an event in Making A Virtue of Moral Decay, Britain would win gold, silver and bronze.

Since the Beijing Games began, with that awesome opening ceremony directed by Zhang Yimou, British officials and commentators have affected a snooty, aloof attitude towards China’s Olympian displays. You might expect a has-been world power like Britain to feel a little red-faced about the fact that China has pulled off a pretty spectacular Games while the rest of the world is asking: ‘How will London, where the buses don’t even run on time, follow that?’ But instead, British observers have presented China’s mind-blowing ceremonies as symbols of its moral turpitude, and our own widely anticipated organisational ineptitude as evidence of our moral superiority. Such a topsy-turvy interpretation of events really is an Olympian achievement.

No sooner had the fireworks fizzled from the sky (and yes, yes, no sooner had those evil computers that faked some of the fireworks been switched off) than British observers were telling us that something like Beijing’s opening ceremony can only really be pulled off under a wicked dictatorship. Only a totalitarian regime can get so many people together, train them hard, and make them perform as one in a gobsmacking global event.

The Daily Telegraph described the ceremony as ‘the kind of operation that is so much easier in a totalitarian regime’. Sebastian Coe, chairman of the London 2012 Olympic Committee, said such ceremonies are really only doable in ‘countries with little democracy’. He also recalled the look of shock on the Beijing mayor’s face when he told him that the 2012 Committee is still waiting to hear from a planning inquiry in Stratford, London before it can build certain things. (I’m sorry, but I am also shocked by that. You’ve only got four years left Coe, for Christ’s sake.)

This idea that only dictatorships can dazzle, while democracies must inevitably consult, be cautious and think about people’s feelings, is widespread today. Beyond the Olympics, some argue that the reason why Britain isn’t constructing many epoch-defining skyscrapers or new airports these days – while in Beijing new buildings appear as if from nowhere and the largest airport terminal on Earth was built in 1,371 days – is because We are civilised and thus cautious, while They, so totalitarian and barbaric, can force through anything they want, from a fancy new skyscraper to a ceremony executed with military precision. Indeed, one commentator says Britain is ‘paralysed by democracy’ while the Chinese authorities are ‘free’ (ironic?) to do whatever they please.

This, of course, is nonsense on stilts. Modern Britain is not paralysed by democracy, but by indecision. The reason British officialdom interminably consults on everything, from building Olympic venues to constructing a third runway at Heathrow, is because it is shot through with the politics of precaution, risk-aversion, and a crippling concern about the impact of all things manmade on the environment.

Often, indeed, our decade-long consultation procedures make a mockery of democracy, disingenuously presenting special-interest complaints – from green groups and other NIMBYists – as a ‘people’s opposition’ to new developments, when in fact they essentially embody the elite’s own doubt about moving in a certain direction. Now, these deathly consultations are held up as paragons of democracy in contrast to the Chinese.

Likewise, what many refer to as our wonderful Olympics-related ‘free speech’ – unlike in censorious China – is really a public outpouring of indecision about the 2012 Games and whether it is worth hosting such a silly, exorbitantly expensive sporting event. Reading the half-embarrassed, half-proud coverage of our handover ceremony, and media doubt more broadly about the 2012 Games, Anne Applebaum enthuses: ‘Thank you, Britain, for giving the world the gift of nasty, negative, snarky journalism, along with the culture of free speech that sustains it.’ So where Britain’s cautiousness about modernity is dolled up as ‘democracy’, its official bickering over the 2012 Games is hailed as a global gift of ‘free speech’.

This amounts to making a global virtue of Britain’s political crisis. In claiming that only totalitarian regimes can be inspiring, while democratic states must be sensible and small-scale, British observers actually denigrate democracy and freedom. They present these ideals, not as liberating things that might push society forward, but as hampering and even paralysing institutions, which necessarily force us to rein in our ambitions and hold society back.

It may be true that the lack of democratic representation in China means its officials can put more pressure on workers and performers. But the myth that democracy, rather than the essentially undemocratic instincts of our alienated elite, is currently ‘paralysing’ Britain shows that many British observers know and understand the democratic ideal as little as their Stalinist counterparts in Beijing. History shows us that democratic societies – confident and properly democratic societies, in touch with the people and possessed of political vision – are capable of enthusing the masses and organising spectacular events, if they put their mind to it.

The difference between Beijing’s opening and closing ceremonies and Britain’s handover ceremony revealed little about the differing levels of democracy between China and Britain, but a lot about contrasting cultural attitudes. Beijing’s ceremonies, big, bright and in tune with Chinese history (well, some of it), revealed a nation that feels relatively comfortable with modernity and confident about the future. Britain’s ceremony – which was really only a snapshot of an ordinary day in wet, multicultural London – spoke to a society that cannot see beyond the here and now, and which possibly feels alienated from its past and incapable of etching out a future. For British officials to pose as superior to China precisely because they’re less well-organised and more self-deprecating is a kind of imperialism-in-reverse, where our very uselessness gives us the moral authority to look down our noses at suspiciously impressive China.

Katrina + 3

Katrina, Three Years Later

Surrounded by both progress and despair, New Orleanians soldier on.


In the three years since Hurricane Katrina smashed New Orleans’s levees and flooded it, the historic city has made poignant progress. The gains are obvious: stores in still-half-empty neighborhoods have reopened or are reopening; more cars are parked in driveways; more lights are on. But just as progress creates hope, it also creates dread that all the hard work could be lost. Paramedics have a term—“the golden hour”—for the critical period after a patient’s injury, which makes the most difference in whether he lives or dies. New Orleans remains in its golden hour.

Since Katrina flooded out pretty much everyone on August 29, 2005, 72 percent of households have returned, according to the most recent data. True, more than one-quarter of New Orleans’s neighborhoods are home to fewer than half their pre-storm families. About 40 percent of residents have returned to middle-class Lakeview, for example, still a remarkable achievement in an area where Katrina’s floodwaters had ruined nearly every house. New Orleans’s Vietnamese-American neighborhoods, also heavily flooded, are pretty much rebuilt; Father Nguyen The Vien, a Catholic priest and the de facto leader of the Vietnamese-American community, is through with acute recovery and concentrating on overseeing, through a community group, a new charter school that aims to teach both English and Vietnamese to nearly 300 students, divided about evenly between black and Vietnamese-American kids. Some moderately flooded neighborhoods, like Broadmoor and Bywater, have recovered well. Others that didn’t flood much have barely lost any population. The trendy Marigny; the French Quarter, the engine of the city’s tourist economy; and Uptown, home to Tulane and Loyola Universities, are nearly unscathed, if a bit more worn than they were a few years ago. And a few areas—like the Irish Channel, a historic working-class neighborhood—have higher populations than before the storm.

But the city’s recovery, while impressive, has slowed. New Orleans has had just a 4 percent increase in households over the past year, bringing it dangerously close to the stagnation it had experienced long before Katrina. With every month that passes, it becomes more unlikely that the city will win back the middle-class evacuees who have put down roots elsewhere. So the city has to attract new residents. The tens of thousands of young post-Katrina volunteers who have made New Orleans their home for part of the past three years represent an opportunity to do so. But New Orleans has always attracted young people for a few years; it has never been good at keeping them. It’s too early to tell whether this time will be different.

The most immediate risk to the city’s fragile recovery is Gustav, the new storm brewing in the Gulf. Gustav could become the first major test of the Army Corps of Engineers’ repairs and ongoing improvements to New Orleans’s flood-protection infrastructure. The storm could also test the post-Katrina state government. Governor Bobby Jindal, nearly a year into his term, has ordered 700 buses to stand ready in case they’re needed to evacuate the estimated 30,000 New Orleanians who lack other means of transportation. And Gustav might show the world that New Orleans’s local governance hasn’t improved markedly post-Katrina. Mayor Ray Nagin, on his way home from the Democratic National Convention, might surprise observers with better crisis-management skills, but it would truly be a surprise. Six years into his administration, Nagin seems to know little about governing a city in either ordinary or extraordinary times. Strangely, the one thing New Orleans is good at is garbage collection; citizens rave about that, but about little else.

The sharpest example of how New Orleanians’ government continues to fail them is the city’s violent crime rate. The Big Easy has had 132 murders this year, a rate of nearly 70 per 100,000 residents annually—off the charts for a First World city. The Times-Picayune has a depressing roster of those killed so far, including one 24-year-old who was previously a suspect in three murders and in one attempted murder but was never charged. Armed robbery is also pervasive, even in the once-safe French Quarter, imperiling the city’s unsteady but all-important tourism industry. Just last week, a local blog reported, a French Quarter hotelier was so alarmed about the situation that he wrote to the district’s city councilman: “I believe it is at a point where it will be affecting commerce and I have told the hotels I am involved with to warn guests to be careful. . . . I am not sure that there is a safe place in the Quarter. . . . We need to do something before someone (a tourist) gets killed.”

Controlling crime doesn’t take a miracle, only leadership. City after city has proven exactly what works in making streets safe, as my colleague Heather Mac Donald has written: rational police work, competent prosecution, and strong sentencing of criminals. Even Newark, with virtually the same demographics as New Orleans and without the resources of a powerful tourist industry, has made huge gains. But New Orleans’s public- and private-sector leaders appear uninterested in what works, preferring to believe that the politically easier tasks of investing in education and jobs can do the trick. Middle- and upper-class citizens are responsible, too, since they tend to dismiss crime as “thugs killing thugs,” assuming that any young black man dead on the street did something to deserve that ultimate sanction.

Some hope flickers on the political front. Last year, the city got rid of its incompetent district attorney, Eddie Jordan, after shaming him into resigning—an almost unheard-of feat in the Big Easy. The city council is superior to its pre-Katrina predecessor. And next month, Congressman William Jefferson, facing federal corruption charges, could finally lose his seat to a rival during the Democratic primary. Still, what New Orleans needs above all is a mayor who will help citizens understand that violent crime shouldn’t be as uncontrollable as the city’s oppressive weather. If a real leader emerges in time for the next mayoral election in 2010, New Orleanians just might give him or her a chance. For now, the city is stuck with Nagin, apparently more interested in accepting awards from his friends for his post-Katrina performance than in governing his suffering city. Last week, federal recovery coordinator General Douglas O’Dell complained publicly that Nagin’s own recovery coordinator, Ed Blakely, wouldn’t even return his phone calls.

One stark scene illustrates the tenuousness of New Orleans’s painstaking recovery: the Lower Ninth Ward. Nearly two years ago, I made my first post-Katrina visit to the decimated neighborhood, taking the drawbridge across the man-made Industrial Canal, which separates the area from much of the rest of New Orleans (and carried some of Katrina’s floodwaters into the city). As my cab got closer to the newly repaired, gleaming white floodwalls built to protect the land from the canal, the structural soundness of the remaining houses deteriorated until houses were no longer houses but debris. Human activity had ceased on the potholed, grass-sprouting streets and on the land to each side. For blocks and blocks, the remnants of homes by the floodwalls were dark, broken, and empty, tufted by uneven grass and weeds. A tall white bird perched in the open wreckage that had once been someone’s home.

I visited again two weeks ago to find that nature, with the help of debris-removal contractors, had consolidated its victory. The houses in dozens of blocks near the floodwalls were gone almost entirely, with weeds taller than people growing in what were once separate lots. Only the odd driveway and staircase remained to show that someone had once lived there. The roads and their hand-lettered street signs, along with a couple of half-built, fenced-off houses sponsored by nonprofit groups, seemed out of place.

A few members of the nearly all-black Lower Ninth Ward have returned, though: 601 out of 5,363 pre-Katrina residents, according to the latest reports. Away from the floodwalls and closer to the rest of the city, but still within the ward, lots and homes in various states of repair are taking shape again. Once or twice each block, someone has carved out a win for civilization: cut grass, new windows, or shining electricity. Amid the desolation, an occasional person sat on his front stoop or rode a bicycle, trying to beat back a three-year-old wilderness still freighted with urban danger. So far, two people have been murdered in the ward this year. With two years to go until the next mayoral election, hardworking New Orleanians seem a bit like the few brave souls in the Lower Ninth Ward. They’re staking out a precarious claim against the gloom, and hoping for the best in an environment that sometimes looks like progress but can easily look like despair.

R.I.P. Mr. Jobs

The story, marked “Hold for release – Do not use”, was sent in error to the news service’s thousands of corporate clients.

Extracts from Bloomberg's premature Steve Jobs obituary

Apple secrecy attacked as Steve Jobs health rumours hit shares

The stock obituary was published "momentarily" after a routine update by a reporter, and was "immediately deleted", Bloomberg said.

Jobs was diagnosed with pancreatic cancer in 2003, but there is no suggestion that the news wire has recent news on his health. Most media organisations regularly update their pre-prepared obituaries of newsworthy figures.

The obituary contained blank spaces for Jobs’s age and cause of death to be inserted.

The opening sentence described Jobs as the man who “helped make personal computers as easy to use as telephones, changed the way animated films are made, persuaded consumers to tune into digital music and refashioned the mobile phone.”

The 2,500-word piece also included praise for Jobs from his rival Microsoft boss Bill Gates, details of his rise from college drop-out to technology billionaire, and a list of his family “survivors”.

Details of friends and colleagues of the Apple founder to be contacted by Bloomberg in the event of his death were also published with the obituary.

Bloomberg, which was founded by New York mayor Michael Bloomberg and prides itself on its accuracy and transparency, later published a note acknowledging the story's retraction on its wire.

“An incomplete story referencing Apple Inc. was inadvertently published by Bloomberg News at 4:27 p.m.New York time today,” the message read.

“The item was never meant for publication and has been retracted.”

A Bloomberg spokeswoman said: "This was a routine update of a biography by the obits department, meant for the internal system and not meant for publication.

"It was momentarily posted on the external wire, in error, and immediately deleted."

Jobs has been reluctant to publicly discuss his health, but recently denied claims that his cancer had returned

Science, God and PJ O'Rourke

Is faith compatible with science? Does science take faith into account? Should scientists keep religious faith in mind while they do their scientific theorizing, their scientific experimenting, their scientific … But here I begin to lose faith in my ability to ask the question. I have some idea what God does. I have no idea what scientists do. My entire store of information about scientific activity comes from what I’ve seen in the movies. There, scientists used to be represented as men in white coats busy with incomprehensible jumbles of glass tubing connected to foaming beakers and bubbling test tubes. Now, scientists are represented as men (and women) in white coats busy with incomprehensible jumbles of numbers on computer screens. All I can really tell you about science is that its set designers aren’t as good as they used to be.

I look up science in Webster’s—“possession of knowledge as distinguished from ignorance or misunderstanding”—and find myself possessed of no greater knowledge as distinguished from ignorance or misunderstanding.

Let me resort to the usual practice of the ignoramus and give up on philosophical inquiry and just proclaim an opinion: Science requires more faith than God.

I came to that conclusion in my high school physics class (a course that was required, by the way). The physics teacher had just explained how electricity makes a refrigerator work. I raised my hand.

Me: “Electricity is energy.”

Physics teacher: “Yes.”

Me: “Energy is heat.”

Physics teacher: “Yes, heat is one way to measure energy.”

Me: “A refrigerator is cold.”

I graduated only because the physics teacher suddenly remembered that he was also the summer school physics teacher and that if I flunked I’d be back in his class in July.

Faith depends upon belief in things that cannot be proved, and I can prove that more people flunk physics than flunk Sunday School.

“But science can be proved,” a scientist would say. “The whole point of science is experimental proof.” Yet we non-scientists have to take that experimental proof on faith because we don’t know what the scientists are talking about. This makes science a matter of faith in men while religion, of course, is a matter of faith in God, and if you’ve got to choose …

Personally, I don’t think you do. Science and religion both assert the same thing: that the universe operates according to rules and that those rules can be discerned. Albeit this does make it easier to believe in God than, for instance, organic chemistry. Just the fact of rules implies a rule maker while just the fact of mixing nitro with glycerin and causing an explosion does not imply a Ph.D.

I’m also given to understand that the rules of science begin to bend and even break at the extremes of the universe’s scale. Down where everything is subatomic-sized, things tend to be a bit random with mesons, leptons, quarks, brilligs, slithy toves, etc., subjected to Strong Force, Weak Force, Force of Habit, and so on. Meanwhile, in the farthest reaches of outer space, matter, antimatter, dark matter, and whatsamatter are tripping over string theory and falling into black holes. God is not like that. He’s famously there in the details, and He is the big picture.

In one way, however, faith in science does come easier than faith in God—if fear is any gauge of how real we believe a thing is. To judge by human behavior, people are not trembling before the Almighty much. But many of those same people are scared silly by science. They are frightened by a climate stuck in the microwave of technological advances, frightened by genetic modifications that may—who knows?—cross cabbages with kings and produce a Prince Charles, and naturally they are frightened by the clouds of mushrooms being grown in the science cellars of Iran and North Korea.

One sympathizes with science’s faithful. The apocalyptic power of God has existed forever, and He’s been restrained about using it, despite provocation. The apocalyptic power of science has existed only since 1945, and the A-bomb has been tried twice already.

“Fear of God” is most often manifested today in the public’s alarm that religious zealots will try to destroy the world. Providentially, God has made the zealots as incapable of using reason, logic, and the other tools of science as I am. Religious zealots can’t blow up the world the way scientists can. The zealots must secure the faith of the scientists. But the scientists don’t know what the zealots are talking about. Is faith compatible with science? Not completely—and that’s a blessing.

O’Rourke is a leading political satirist and the author of thirteen books, including Parliament of Whores, Give War a Chance, Eat the Rich, The CEO of the Sofa, Peace Kills, and his latest best-seller, On the Wealth of Nations. He has written for such diverse publications as Car & Driver, Parade, The Weekly Standard, House & Garden, Automobile, The American Spectator, Forbes FYI, The Atlantic Monthly, and Rolling Stone, where he was the foreign-affairs desk chief for fifteen years. He is the H.L. Mencken Research Fellow at the Cato Institute in Washington, D.C., and a frequent panelist on National Public Radio’s game show, “Wait, Wait … Don’t Tell Me!”

How We Got It Wrong

Getting It Wrong

A Review by Robert M. Solow



Turmoil in the financial market and insecurity in the labor market -- we have plenty of both -- bring out good and bad books, like good and bad mushrooms after a rain. In the instance before us it is the financial market that is in turmoil, and this is definitely not a good book. The only nice thing I can say about Bad Money is that taking critical aim at our complex, overblown, and now evidently dangerous financial system is a fine idea. The trouble is that Kevin Phillips stays throughout at the superficial level of Chicken Little. Terrible things are happening, and will continue to happen; but despite a certain pretentious hinting at deeper understanding and a few loose references to historical parallels, there is nothing very enlightening to be found in these pages.

I will begin with a trivial but symbolic example: the title of the book. It comes from a common description of Gresham's Law, quoted opposite the title page: "Bad money drives out good money." Gresham's Law had a precise meaning in context. When money consisted of the circulation of metal coins, their intrinsic value was tied to the market value of the gold or silver or copper that they actually contained. (If a one-shekel coin contained less than a shekel's worth of silver, no one would bring silver to the mint; if the coin contained more, anyone with a fire and a pot could profit by melting it down.) Kings would occasionally cheat by minting underweight coins, and other crooks might shave a little metal off the coins that passed through their hands.

A knowledgeable person who had both full-weight, or good, coins and underweight, or bad, coins in his pocket would naturally use the bad coins in any transaction, if he could get away with it, and hang on to the good coins. Thus bad money would be found in circulation and good money in hoards. That is what Gresham meant by bad money driving out good money (that is, out of circulation). But none of this has anything to do with the contents of Phillips's book, not even metaphorically. He is entitled to call his book by any name he likes, of course; but the unexplained reference to Gresham's Law functions only as an unearned claim to arcane knowledge.

Later in his book Phillips says something different. Money is "bad," he maintains, when "a leading world economic power passing its zenith...lets itself luxuriate in finance at the expense of harvesting, manufacturing, or transporting things." This tends to lead to "runaway public and private debt, gross speculative biases, tenfold and twentyfold leveraged gambling, unchecked and barely regulated 'product' innovation, and a tendency toward periodic panics and instability" -- not to mention "bring[ing] the weakness of human nature to the fore." I also believe that the financial system has become too big and too opaque for the good of the economy that it is supposed to finance, and that it is by now at the margin more trouble than it is worth. But that characteristically overwritten passage, apart from having nothing to do with Gresham's Law, is merely an attempt to make adjectives sound like analysis.

Phillips points out, several times, that the financial services industry in the United States now originates a little more than 20 percent of GDP, as compared with about 12 percent for manufacturing. He thinks that this is way too large a share to be healthy, and that it suggests an economy excessively devoted to peddling complicated pieces of paper instead of producing real stuff. (Finance accounts for only 10 percent of GDP in Britain, by contrast, despite London's status as a financial center.) How would one know what the right size of the financial sector might be? A country might legitimately specialize in finance and sell its services to others, just as it might specialize in computer hardware or software. So big is not necessarily bad. But there is no discussion in Phillips's book of any constructive function that a right-sized financial sector would perform, so that the reader might be able to understand just how much is too much.

Every elementary economics textbook explains to the beginning student that a financial system is intended to perform two important functions in a modern economy. Somehow a nation's savings has to finance its investments in housing, industrial and commercial buildings and machinery, computers, inventories, and so on. The saving is done by a very large number of households and institutions, ranging from very small to very big. The investment is done by a smaller -- but still huge -- number of mostly medium-to-large business firms. The first function of the financial system is to "intermediate" in this process: to collect the savings in many forms -- bank accounts, mutual funds, insurance-company reserves, direct purchases of stocks -- and to allocate it to the firms and other entities that seem to have the most profitable ways to use it to build real capital. The financial sector, needless to say, collects a fee for this service: it pays savers less than it charges investors. (I omit international flows of saving and investment, as well as the financing of local, state, and national governments. The financial sector intermediates here, too.)

The investment decisions of businesses have uncertain outcomes. The businesses themselves cannot know how their long-lived investments will eventually turn out; and the ultimate savers know even less. And investment decisions generate real risks, as we are all now painfully aware. So do most other transactions intermediated by the financial system, though the risks may be tied only tenuously to the production and the distribution of goods and services. And so the second function of the financial sector is to arrange transactions that shift the bearing of commercial risks from those who are prepared to pay a fee to get rid of them to those who are less averse to risk and are willing to take them on in exchange for a fee. This is a complicated business, more or less by definition. It is full of surprises. Even the basic underlying risks are complicated, and reasonable people -- let alone the unreasonable ones -- may evaluate them very differently. The risks generated within the financial sector are even more complicated, more psychological, more open to manipulation, and harder to understand and value than those that arise from "real" events.

In addition to deploring the excesses of the financial system, it is worth noticing also that it often performs useful functions. Businesses finance a substantial fraction of their fixed investment from their own saved profits; but the capital markets do allocate the rest, maybe about half, just as the textbooks say. To take another example, the securitization of home mortgages, despite its obvious potential for toxicity, undoubtedly expanded the supply of capital to the mortgage market and reduced the cost of home ownership. The same financial innovation also permitted or encouraged the selling of some mortgages to predictably unqualified borrowers.

Could we redesign the mechanism to achieve most of the benefits of a broader supply of mortgage capital while sharply limiting the scope for predation and instability? This question calls for serious thought; but serious thought is not on Phillips's agenda. Still, it is worth noting -- and this is his sort of thing -- that when the Federal Reserve recently proposed some fairly anodyne improvements in the regulation of mortgage lending, the industry instantly opposed them as incipient socialism, and claimed implausibly that even the smallest regulatory safeguards would dry up the supply of loans.

Phillips's focus on the size of the financial sector is not wholly misplaced. Everyone must have noticed that the total sums at risk in the markets for complex derivatives are enormous compared even with the $14 trillion size of the national economy itself. In addition to financing and allocating the uncertainties that arise inevitably out of production and consumption decisions, modern financial engineering creates unlimited opportunities for bets that are only remotely related to productive activity, if at all. A can bet B that C will be unable to meet its obligation to pay D. (A may then try to manipulate the odds by spreading rumors about C's financial condition.)

Should the rest of us care if A and B want to gamble their fool heads off, whether on credit-default swaps or basketball games? If these were private arrangements between consenting (and rich) adults, one might say that it's their business and nobody else's. But in the world as it is, A and B seek leverage -- that is, they borrow from banks and others so that they can bet larger amounts than their own private capital would permit. Even a small return on the leveraged bet amounts to a large return on equity. And once the banking system is involved in a big way -- owning, and holding as collateral, assets whose likely value is hard to understand and impossible to calculate -- then we are all at risk.

For this reason, if things start to unravel, as in the case of securitized sub-prime mortgages, the whole credit mechanism can freeze up. Banks that do not understand their own balance sheets can hardly expect to understand the balance sheets of potential borrowers. The system can be so paralyzed as it unwinds those leveraged losses that it is unable to perform the financing of "real" economic activity that constitutes its redeeming social value.

The size and the complexity of the financial sector has other consequences, too. It is worth repeating that the most important consequence is the one just mentioned: the danger to the viability of the whole credit mechanism, including the plain-vanilla part that merely finances real capital formation. And since the total volume of bets, and bets on bets, can vastly exceed the amount of underlying "real" activity, and since the fees of those who manage and direct this activity are (roughly) proportional to the gross volume of assets they manage or direct, the hedge-fund operators and others may earn perfectly enormous incomes. (Margaret Blair of the Brookings Institution was one of the first to point this out.) If they are clever enough, and they are, they can arrange their compensation packages so that they batten on profits and are shielded from losses.

Moreover -- and this is definitely on Phillips's radar -- the fact that big-time financial operators make so much money, and spread enough of it around, gives them a lot of political clout with both parties. That is one reason why it will be so difficult to reform the system of financial regulation so as to provide adequate protection for the capital market as it goes about its useful functions. The same fact may also be part of the answer to the churchmouse's question: why does anyone who already has a billion dollars need a second billion? A bigger private jet attracts bigger birds.

Even the better parts of Phillips's book fail to give a serious account of what has happened in the capital market and the channels through which it affects the modern economy. And those parts are interspersed with passages of surpassing ignorance. One chapter is largely given over to an attack on the integrity -- not the accuracy but the integrity -- of the consumer price index. This would be scurrilous if it were not so silly. Phillips does not seem to understand what a consumer price index is. There is a graph showing that between 2000 and 2006 house prices (which are not included in the CPI) rose much faster than "owners equivalent rent" (which is). This is supposed to demonstrate that the Bureau of Labor Statistics was deliberately suppressing the bad news that ongoing inflation was really much faster than reported.

But asset prices do not belong in a consumer price index. Neither do house prices or land prices or stock prices. If I buy a house today, it would be senseless to count its whole cost as part of my consumption expenditure this year. In fact, at about the same time there was much talk, inside and outside the government, of "asset-price inflation" as something distinct from "goods-price inflation" and what should and might be done about it. The fact that house prices were rising faster than rents was quite analogous to a rise in the familiar price-earnings ratio for common stocks.

This is not the only such category mistake in the book. Phillips criticizes National Income and Product Accounts because they do not prominently display figures on the sharply rising volume of private debt. But this lapse is owed to the fact that the National Income and Product Accounts are about, well, national income and product. They are more like an income statement, and certainly not like a balance sheet. There is no reason, of course, why the Department of Commerce should not inform interested citizens about the standing volume of debt, but there is also no reason why the absence of those figures from the accounts should be treated as a dark conspiracy against the public. The debt figures are readily available in other government documents.

Phillips's discussion of "peak oil" is a little better, partly because there are fewer complications to juggle, and partly because he has a point. But it, too, is a little long on foreboding and a little short on clear thinking. "Peak oil" is the catchphrase for the belief that the world's annual production of crude oil has recently reached, or soon will reach, its practical maximum, to be followed by a gradual decline as the best underground reservoirs are depleted. (Production in the "lower forty-eight" U.S. states appears to have peaked in the 1970s.) There are experts on both sides of this technical issue, whose outcome has to depend on what will eventually be found in as-yet-unexplored or poorly explored regions of the world. But it is a convenient hook on which to hang geopolitical drama, and Phillips uses it as such.

Peak oil or no peak oil, the supply-demand balance in the world oil market is clearly shifting: world demand is increasing faster than world supply or availability. That is what really matters. The current run-up in price may contain a little speculative froth and some monopolistic maneuvers, but hardly anyone doubts that it reflects a long-term trend in relative scarcity, which is driven primarily by the fast-growing oil-importing economies of Asia (and by the inelasticity of supply). The limit to this trend probably depends more on the timing and the extent of the ultimate availability of alternative (non-oil) sources of energy than on either new discoveries of oil or on induced reductions of demand.

We know how a textbook market economy would allocate scarce supplies of oil. The price would rise to squeeze out the less productive uses of oil until the still-viable demands more or less matched the available supply at that price. The oil would go to those buyers, wherever they were, who could pay the high price and still turn a profit in their own business. Phillips points out that the oil market is not like that now and probably never was. He says that 75 to 80 percent of known reserves are controlled by state-owned national oil companies, in the Middle East, Africa, and elsewhere. These state enterprises are interested in making money. (It would be nice if they all wanted the money to further the economic development of their own countries.) But they exist to serve geopolitical interests as well, and this changes the game. In this world, access to oil is not simply a question of willingness to pay the world price; there is also the small matter of which side you are on.

Phillips has no trouble making the case that American foreign policy -- especially, but not only, regarding the Iraq war -- has been a costly mistake that will come home to roost in the coming struggle for access to oil. (He also insists that the main purpose of the Iraq war was control of Iraq's oil, but that this will backfire. He could have adapted the cliche: when they say it's not about the oil, it's about the oil.) And he makes much of scattered press reports that China systematically sews up oil deals in Africa, Iran, and elsewhere by linking them to sales of up-to-date military equipment. In the oil-scarce future, in other words, competition for access will be as much geopolitical as economic, and the odds are against the United States, with or without adventurism.

Then -- this is a book about bad money, after all -- Phillips turns to the dollar, and a certain amount of confusion descends. Some of it rests on the almost universal bad habit of treating the high exchange value of the dollar -- a "strong" dollar -- as a matter of national pride. "Defending" the dollar sounds a lot like defending Old Glory. Too many secretaries of the treasury, some of whom must have known better, have adopted that mantra, though they have usually refrained from acting on it. Phillips seems to share this error. At one point he describes China's accumulation of foreign-currency reserves, mostly dollars, as giving it "the wherewithal to defend [its] own currency." In a way, exactly the opposite is true: China acquired the dollars in order to "anti-defend" its currency, that is, to prevent its exchange value from rising; and those same treasury secretaries have been urging the Chinese to allow the renminbi (RMB) to strengthen, which is to say, to allow the dollar to weaken against the RMB. The weaker dollar of recent years has promoted the exports that have lately been keeping the American economy afloat. This is all about exports and imports, not about the rockets' red glare.

The foreign-exchange value of the dollar and the world oil market are indeed connected; there is no doubt about that. First and foremost, large American imports of very high-priced oil are a major factor in the large negative trade balance of the United States, currently about 5 percent of GDP. The rest of the world, especially oil exporters, must continue to acquire dollar assets in order to keep selling more than they buy. (This is the origin of those enormous sovereign wealth funds, almost all of which belong to oil-producing countries.) Phillips is right that, if any economic or geopolitical turn of events were to induce foreign government agencies suddenly to dump their dollar assets in favor of something else, the resulting capital-market and currency disorder would spell trouble for the United States. But it would also spell trouble for them. Foreign governments, including China, own all those dollar assets because doing so is seen to be in their self-interest, not ours. The nagging fear, as Phillips recognizes, is that sovereign motivations extend beyond the narrowly economic: the possibility of geopolitical blackmail, implicit as well as explicit, is not far-fetched. The trouble is, that seems to be all he sees. He misses the complexity.

The other oil-dollar connection comes from the fact that, by informal agreement of long ago, the price of oil is quoted by OPEC in dollars. This has consequences: if the dollar depreciates, as it has done, and nothing else happens, oil exporters find that they are inadvertently selling their oil for less purchasing power. A barrel is worth x dollars, and a dollar buys less goods in general, particularly goods produced outside the United States. In fact, buyers who have euros or yen find that the euro price or yen price of oil has fallen, because a euro or a yen buys more dollars. Naturally, then, the dollar price of oil will rise, as everyone has noticed. (So will the dollar price of many less conspicuous goods, for exactly the same reason.) This is not as big a deal as it may seem. If the price of oil were fixed in euros, as could come to be the case, then a depreciation of the dollar would bring no change in the euro price of oil. But the dollar price would still rise, because it now takes more dollars to buy one euro.

Phillips, however, goes on and on about this matter, because he identifies the role of the dollar as being some sort of index of American masculinity. The United States certainly does gain something from this convention, and it gains even more from the large holdings of dollars in the currency reserves of most countries. The gain may not be negligible, but it is not a major factor. U.S.-based banks probably do more business, and make more profit, than they otherwise would. And the net increase in the world's need to hold dollars functions something like a low-interest loan to the American economy. But if OPEC were to price its oil in terms of some basket of major currencies, which would make sense, nearly all of us would sleep just as well at night.

Phillips's last chapter, grandiosely titled "The Global Crisis of American Capitalism," begins with a burst of overblown prose:


Looking back a decade, we can now understand that a perverse incarnation of millennial utopianism crested in a form that critics have since labeled "market triumphalism" -- the belief that history was "ending" because near perfection had been achieved through the enthronement of English-speaking democratic capitalism. Smugness paraded across a bipartisan spectrum....To believers, the all-knowing, allcomprehending market hailed by initiates had always been incipient, always evolving toward some ultimate moment when the Dow Jones Industrial Average would cross 10,000 and breathless quantitative strategists at Morgan Stanley (or wherever) would imagine the first synthetic collateralized debt obligation. Millennial utopianism was happy to oblige.
There is, alas, more of such writing. Phillips thinks that this hubristic madness is handing the world economy over from America (and Europe?) to Asia, with incalculable consequences. A more sober view would recognize that the United States could not hope forever to grow faster than the large Asian economies (or eventually others). There is no evidence that God ever intended the United States of America to have a higher per capita income than the rest of the world for eternity. It is true that our failure properly to regulate modern financial engineering, together with the pursuit of a thoughtless and reckless foreign policy, has damaged our economy and weakened our position in the world. Phillips deserves some credit for banging away at this point. It is too bad that he has no taste for genuine analysis.

Behavioral Economics

YES
Pete Lunn

NO
Tim Harford


Dear Tim
12th August 2008

These are exciting times to be an economist. The whirligig of international finance has come crunching to a halt. The British housing market inflated until we could hardly bear to watch, then popped in a destructive, sticky instant. The prices of food and oil are yo-yoing on speculative strings. And the textbooks still tell us that markets populated by rational, selfish, independent agents allocate resources efficiently.

Meanwhile, a revolution is under way in economic thought. Behavioural economics is no bell or whistle on the contraption of traditional economics; it is a big departure which will deliver a revolutionary new way of understanding the world. The founding assumptions of orthodox, neoclassical economics—that people can be thought of as rational, selfish and independent—are collapsing under the weight of empirical refutations.

Here is one example: the “ultimatum game,” which typifies the story of behavioural economics with a curious yet simple experiment. As you know, in this two-player game, the “proposer” is given a sum (say £10) on condition that he or she offers a proportion to the “responder.” If the responder accepts the offer, each player gets the amounts agreed. If he or she rejects it, both get nothing. Orthodox economics says players are selfish, and so predicts that the proposer will offer just a penny and the responder, preferring a penny to nothing, will accept. But this is not what happens. The most common offer is half the total sum, and offers of less than 30 per cent are almost always rejected. If the proposer’s offer is seen as unfair, the responder will decline free money.

What do you make of this violation of orthodox theory? In my experience, most economists argue that the proposer is currying favour, or that the responder will turn down a few quid for the sake of revenge. But the results described above hold when players are anonymous and when the sum involved is up to three months’ income. When offered unfair shares, we have a strong economic instinct to say: “you can keep it.”

This experiment reveals an instinct that might apply to any transaction where one side proposes the price or wage. So we might expect to see large deviations of prices and wages from their supposed equilibrium between supply and demand. And in fact such deviations do occur. When consumers quote the maximum they will pay for something, their answer changes not only with how much they want it, but also with their perception of what it costs to provide. When bargain-hunting clothes shoppers discover the wages of those who do the stitching, it changes what they are willing to pay. When unions decide wages are too unfair, they are prepared to jeopardise the future of the whole enterprise. When people work in more profitable sectors or companies, they are paid more than the market wage. Our instinct for fair shares flouts the “law” of supply and demand.

Other classic experiments of behavioural economics are challenging the traditional assumptions too. We often overcome selfishness to reach beneficial common solutions, as good managers and motivators understand. As for rationality, behavioural economists have recorded hundreds of instances where our economic instincts run counter to the traditional definition, especially when risk or uncertainty are present. And the assumption that economic agents are independent ignores our strong instincts to seek economic alliances and to be influenced by the opinions of others about what things are worth—those bubbles again.

Orthodox economic models are not wrong as such, but rather sloppy, biased approximations of how our economy works. They present a cartoon characterisation of economic life, greatly exaggerating one side of our nature at the expense of others. Behavioural economics has started to paint a more realistic picture. Its progress is following the pattern of a scientific revolution. At first the findings seem to be anomalies and oddities, but on closer inspection they yield new principles and regularities. Economists trained in the conventional approach were initially resistant—many still are—but over time the more open-minded and, interestingly, younger economists are being enticed towards the new field; testing explanations, deriving implications.

Yours in anticipation

Pete


Dear Pete
13th August 2008

I’m disappointed. I had assumed, given your opening paragraph, that you were going to explain how behavioural economics might have predicted the credit crunch and the commodity boom, or offered a new way to regulate banks. That really would have been revolutionary. Instead, you offer the dear old ultimatum game. I was not surprised to read your lop-sided and unconvincing caricature of orthodox economics (“textbooks” are such a convenient straw man), but I was astonished to see you present a caricature of the subject you claim to be championing.

I am not sure that a “simple experiment” like the ultimatum game does typify behavioural economics. Such experiments have their place, but they also have serious weaknesses. Take this love of fairness, and its application to wages, which you emphasise. No doubt you are familiar with the laboratory work on how workers respond to wage offers. In one celebrated experiment, behavioural economists divided their subjects into “employers” and “workers.” They discovered that when the “employers” paid unexpectedly generous “wages,” the “workers” reciprocated by working unexpectedly hard.

It’s a classic of the field. But the real world remains intractable. The economists John List and Uri Gneezy recently repeated the lab study in the field, advertising real jobs, hiring real workers and paying real hourly rates. They used a controlled trial to see what happened when workers were paid unexpectedly generous rates. And they discovered that the lab results were evanescent: after a couple of hours the gratitude evaporated and the workers slacked off, reverting to the rational self-interested behaviour described in those pesky textbooks. I would not advise personnel departments to rewrite salary scales on the basis of an effect that does not survive past lunch on day one.

Perhaps I am being unfair. Economics is a work in progress, and some of that progress is coming from behavioural research. Yet the idea that the very foundations of economics are being undermined is absurd. One reason for that is that our inner Mr Spock is closer to the surface than we tend to think. In the last few years, economists have found plenty of examples of rational behaviour in the unlikeliest territory. Consider sex, dating and marriage.

For example, American teenagers respond rationally to more restrictive abortion laws by having less, or safer sex. Whenever a particular US state adopts such a law that affects only teenagers, the prevalence of sexually transmitted diseases in the teenage population falls relative to the adult population.

An analysis of speed-dating shows that our tendency to propose dates is responsive to—there’s no nice way to put this— “market conditions.” Our romantic standards adjust to whether we think we’re in a buyers’ market or sellers’ market.

The introduction of easier divorces in the US in the 1970s altered the bargaining power of women, even though it had little permanent impact on the divorce rate. Again, whenever a US state changed the law, behaviour changed: domestic violence fell by up to a third; spousal murders and suicides also fell.

In short, for every laboratory result showing that we are irrational, economists are discovering rational behaviour from the most unexpected people in the most unexpected situations. Despite all this, I agree that behavioural economics promises to offer more realistic descriptions of the way we act, even if the research is still at an early stage. But that would not demolish the achievements of orthodox economics, because the aim of economics is to understand complex systems, not to predict how a few students behave in a lab.

More realistic models of human behaviour may give us more insight into how economies work, but they also may not. If I was having this debate with Prospect’s science columnist Philip Ball, he would be arguing that economists do not have a good understanding of complex systems or the dynamics of networks. He would trumpet the potential of techniques developed by physicists and mathematical sociologists. And these techniques depend on even simpler, less realistic models of human behaviour than economists typically use. It is naive to think that psychological realism is the acid test of economic analysis.

Economists must strike a balance between more sophisticated modelling of individual behaviour and more sophisticated modelling of economic systems. While both psychology and physics have much to offer, in many cases the mainstream compromise continues to work.

I don’t deny that behavioural economics is an exciting branch of economics, but it is just one among many.

Rationally yours

Tim


Dear Tim
14th August 2008

You were disappointed, I’m astonished. Textbooks are a straw man? To me they are like a vice on the mind of economists, who get tetchy when you present results that reveal the behaviour of real people to be not as those textbooks assume.

When the “dear old ultimatum game”—which most economists I meet have never heard of—is finally given its place in those texts, the revolution I assert is under way will have planted its flag. We will, at last, train economists to understand that when people trade, selfishness is countered by other motives, meaning that prices and wages often fail to match supply and demand—a point which, interestingly, you chose not to dispute.

You raise the issue of drawing conclusions from laboratory experiments. Now, we could trade interpretations of academic papers like List and Gneezy’s on workplace motivation until our readers head for other sections. Instead, let’s trade evidence on workplace motivation as a whole, from both field and lab.

Here’s my take. For decades, orthodox economists have published studies addressing whether workers are primarily motivated by personal gain, and have managed to tie themselves into amusingly contorted knots trying to explain their findings. Most studies show that linking productivity to pay doesn’t increase it, that even if it did managers are unwilling to enforce the schemes, and that the managers are probably right because such schemes undermine teamwork.

In passing, these economists have noted that there is one kind of pay scheme that tends to increase individual productivity: profit-sharing. But why would one worker increase their effort when the extra revenue they generate will be split with everyone else in the company?

This is like a public good game that behavioural economists get groups of people to play in the lab. Everyone can choose to contribute some amount to the “pot,” which is then doubled and split between all the players. If everyone contributes, they all end up better off. But from a selfish point of view, it is better not to contribute and to free-ride on the generosity of others. What happens? Most people contribute. Events in the lab match events in the workplace, neither of which turns out as textbook economics predicts.

We should of course be careful extrapolating from lab experiments. But where strong and consistent economic instincts are found in the lab, their influence is usually found outside in the real economy too.

Speaking of which, it is curious that some economists appear to have abandoned trying to explain how that economy works and taken up trying to explain anything from teenage sex to cheating schoolteachers. Of course people respond rationally to incentives to some degree in all walks of life. This hardly constitutes evidence that rational choice theory—the idea that people take rational decisions in their own self-interest—is the best way to understand how the economy works.

Lastly, I agree that it would be naive to think that psychological realism is the acid test of economic analysis. Economic models have to simplify human nature in order to shed light on what happens when people come together to do business. The question is: what simplification best describes us? What are our most fundamental economic instincts?

In my view, the answer is unlikely to come from mathematically convenient assumptions cooked up from the comfort of a senior common room armchair. It will come instead from observing and understanding people’s real economic behaviour, which is why behavioural economics has begun to revolutionise our subject.

Instinctively yours

Pete


Dear Pete
14th August 2008

I’m sorry to hear that you’re surrounded by a tribe of economic neanderthals. Keep up the good work in bringing them enlightenment. But I don’t need to judge economic orthodoxy by your descriptions of your acquaintances; I can simply look at what is published in the top mainstream journals. Behavioural economics is popular there, and its main findings widely known. But surely that is not a “revolution.” A revolution would sweep away much of the existing consensus; that has not happened and I doubt that it will.

There are three reasons for this. The first is that your question, “What simplification best describes us?” is the wrong one. You have confused economics with psychology. As I wrote in my first letter, one of the most fertile areas in economics is the modelling of complexity. Three examples: the evolution of firms; the development of national economic clusters such as South Korea’s memory chip industry; and the spread of social norms like honesty, obesity or smoking. These new complexity models are producing brilliant new results despite riding roughshod over psychological insight.

Second, even when we want to incorporate behavioural insights, it’s not always clear how to do so, because they remain disparate. I accept your claim that people have a sense of fairness and reciprocity. But what then? You breezily claim that “most studies” (in the lab? of real companies?) show that workers are motivated not by individual incentives but by a share in a group’s profit. Tell me more: which studies? Under which circumstances? You are too vague: arguing with you feels like trying to arm-wrestle a hologram.

I could reel off citations showing the reverse: that individual performance pay schemes do boost performance. I am thinking of Ed Lazear’s investigation of a US car repair company, studies of farm workers by Oriana Bandiera and her colleagues, and Robert Drago and Gerald Garvey’s analysis of Australian firms. I realise that it is tedious to be so specific, but your hand-waving is getting us nowhere.

The conclusion I draw is that behavioural economists have found evidence—sometimes dubious, sometimes compelling—of a patchwork of exceptions to a general rule. They may one day be able to develop these exceptions into a better theory, one that is simple enough to incorporate into economic dynamics yet realistic enough to beat the rational choice model. But so far, it’s case-by-case stuff.

The third reason there has been no behavioural revolution is that the orthodox, rational-choice approach continues to work. Take a step back and look at the big picture. According to the laboratory experiments on public goods you describe, there is no such thing as the free-rider problem. If only that were true. It would mean that there was no climate change problem, because people would voluntarily restrict their carbon emissions to preserve the planet for strangers and the children of strangers. It would mean that fish stocks were healthy because fishing crews realised they were dealing with a common resource. London’s congestion charge would be counterproductive, because people do not respond to individual incentives: drivers would have willingly left their cars at home in order to leave the roads congestion-free for others.

No matter how many experiments you allude to, the discomfiting rational self-interested model explains our environmental predicament perfectly. It is also the inspiration for solutions such as a carbon tax or a cap-and-trade scheme. Don’t take my word for it; such policies have been recommended by Richard Thaler, the world’s most respected behavioural economist.

Instead of focusing on the flimsiest areas of behavioural economics, backed up by airy generalisations, why don’t we discuss areas where it has made important contributions, such as understanding how people choose and use financial products like pensions and credit cards? It would be a shame if readers concluded that behavioural economics has nothing to offer.

Your logical friend

Tim


Dear Tim
15th August 2008

Arguing with me is like arm-wrestling a hologram because you are struggling to grasp the unorthodox. For instance, you refer to “what is published in top journals,” but those journals are not always the best guide: three of them rejected George Akerlof’s seminal 1970 paper “The Market for Lemons,” which launched information economics and changed the discipline forever.

You make three substantive points. First, you refer to the success of complex systems models. But this does not undermine the behavioural approach. The two often reinforce each other. (Part of my book explains why your first example, firm evolution, is more behaviourally realistic than standard theory.)

Second, I was avoiding “paper tennis,” but you insist. The academic Canice Prendergast reviewed over 100 studies, including those you cite, and found evidence of effective performance pay schemes only in “simple” jobs where performance is easily measured, not in most jobs. Then, expressing puzzlement, he concludes that profit-sharing schemes work. Or consider a recent paper by Sebastian Kube and colleagues, which found that fairness does affect productivity—suggesting that your interpretation of Gneezy and List is askew.

Third, I didn’t claim there is no free-rider problem—of course there is. Behavioural economics has revealed our instincts when faced with it, and the importance of communication, group identity, punishment mechanisms and reducing uncertainty. Your description of environmental problems, which wrongly assumes instinctive selfishness, precludes solutions based on this evidence of how to promote instinctive co-operation.

Lastly, this recurring “economics can explain everything” claim is an ideological fiction used to sell books. It also exemplifies “confirmation bias”—looking only for evidence that fits the thesis. Statistically significant changes in behaviour across large samples show that some people respond to changed incentives rationally, to some degree. It does not imply that rational choice theory is the best way to understand human behaviour, any more than statistically significant evidence for wind resistance tells you how vehicles are propelled. The logic is flawed.

Great leaps in scientific understanding are mostly driven by refutation, not confirmation. The irony is that while we economists jump on the Freakonomics bandwagon, trumpeting theories and exaggerating their power, our core theoretical propositions are being refuted by expanding bodies of empirical evidence.

Yours
Pete


Dear Pete
15th August 2008

My frustration was not at your unorthodox conclusions but at your tendency to generalise without visible means of support. Thanks for correcting the omission; I’m looking forward to reading the Prendergast survey. It sounds as though he finds that when pay can be linked to performance, it motivates, but when it can’t, it doesn’t. Is that really so unorthodox?

As for the journals, I am puzzled. I pointed to them as a sign of how behavioural economics is being embraced; you respond by suggesting that they might be shutting out behavioural economics. Well, they might. But they aren’t. You are trying to characterise behavioural economists as intellectual outcasts, unknown by the profession, denied access to the journals, waiting for the revolution. You know that’s misleading. Look at the three top figures in behavioural economics. One, Daniel Kahneman, has a Nobel prize. One, Matthew Rabin, has the even rarer John Bates Clark medal. The third, Richard Thaler, has had a regular column in the Journal of Economic Perspectives, one of the most widely read academic journals, since the mid-1980s. This is hardly a conspiracy to suppress behavioural economics.

You began by saying that it is an exciting time to be an economist. I agree—not because economics is about to be replaced by psychology, but because of the big questions we are now struggling to answer. What are the fundamental causes of poverty? Are there solutions? How do ideas, habits and information spread across social networks? What makes innovation happen? Can governments help? Can anything improve the awful record of economic forecasting? How do economic clusters develop? What kills them off? How does competition work in the face of fallible consumers?

Behavioural economics is already making the running on the subject of consumer decision-making, but in other areas it has little to offer. That is no surprise, because there is so much more to economics than a theory of individual decisions.

Economics is stronger thanks to the behavioural economists, that much is clear. Yet the picture you paint—of a great intellectual tide, pent up and ready to wash away most of what economists hold true—is not one I recognise.

Yours
Tim

Darling -- It's Over

What could be more family-friendly than a Nintendo Wii, a games console replete with motion-sensing technology and gleaming white purity? Just look at the marketing; the families bounding around the living room, gurning with unbridled joy as they compete with each other at video tennis and baseball.


The message is clear; a Wii is the new social hub, it coaxes gloomy teenagers out of their bedrooms and weans them off Grand Theft Auto. Wii players don't buy trench coats and shoot up the local burger bar. A Wii does not warp fragile young minds. In the Wii family, if little Johnny gets tetchy he can always give Daddy a working over on electronic boxing, no harm done. Wii stands for wholesome, healthy family values. It's even got brain training and fitness applications.

So the recent stories about the man in the United States who reportedly filed for divorce, citing his Wii as a catalyst for his wife's infidelity, would have had Nintendo's marketing Svengalis frothing at the mouth.

Returning from a blood-and-guts deployment in Iraq, the unnamed soldier is said to have plugged in his console, no doubt for some light relief, and uncovered evidence that while he was fighting the insurgency, his wife had been conducting her own secret manoeuvres. You see, a Wii has a gizmo that allows a player to store his or her personal profile, called a Mii. The soldier discovered that his wife's Mii had spent long evenings virtual bowling with another Mii. When he confronted her, she admitted that the mystery Mii was actually a lover. It probably never entered her mind that the games console could be anything but inert.

However, as more and more philanderers are discovering, modern technology has an increasingly unpleasant ability to trip us up, even the whiter-than-white Wii.

In today's world, to function as an effective member of 21st-century society, we have to engage with a bewildering array of electronic gadgets, few of which we fully understand. We stomp digital footprints all over the place, and the unforeseen result of engaging in the information age is that it is becoming harder to have secrets – and, as a result, it is harder to cheat on each other.

Day-to-day actions, such as taking the bus to work and buying a magazine on the way, used to be ephemeral. But today, every journey, every communication, every penny spent, is logged and stored. As we move through life, we leave millions of specks of electronic evidence. Stored on hard drives and mainframes, this data acts like specks of DNA sprayed across the bedsheet of cyberspace. It's all there waiting to incriminate us.

In the face of our know-it-all culture, extramarital affairs do not stand a chance. They are becoming impossible to maintain. Those classic long-running infidelities of the Seventies and Eighties are dying, gradually killed off by the rise of the machines that sit quietly in the corners of our rooms, their beady LED indicators flickering malevolently, storing information about our thoughts and habits, ready to use it as a weapon against us.

As science drags us forward, it's a safe prediction that within the next decade, traditional affairs – the ones with longevity, the ones that take planning, scheming and logistics – will have vanished altogether.

The evidence is already mounting. The number of divorces where adultery is cited as the reason for the marriage break-up is dropping. From 2005 to 2006, the number of divorces granted in the UK fell by 4.5 per cent to 148,141, from 155,052, the second consecutive drop and the lowest number since 1977. Last year, just 29 per cent of divorces happened as a consequence of an affair, down 3 per cent on the previous year.

Affairs are getting shorter, too. Currently, the most common duration of an affair is less than six months (68 per cent of them). Twenty years ago, it was three years.

Affairs are fizzling out, and the change is recent. If the final years of this decade are sounding the death-knell for the affair, the late Nineties and early Noughties were its zenith – and ever-cheaper technology was the fuel philanderers used to stoke the flames of desire. Increasingly available technology – mobile phones, SMS messages, internet connections, BlackBerrys and Bluetooth – made it easier than ever to make contact and stay in touch. "Technosexuals" used phones, email and the internet to hook up with partners for easy encounters. Bluetooth allowed the unfaithful to pick out potential partners on trains and in bars. Research by the London School of Economics found that a quarter of mobile-phone users sent sexually explicit text messages, and one in six people flirted with someone who was not their partner via their phones.

As home PCs became affordable, huge numbers of the populace went online. Through websites such as Friends Reunited, we started to seek out long-forgotten friends, often for romantic reasons. The same story was played out in homes across the globe. Bored husbands and housewives, hypnotised by Windows 95 and the wonders of a 24-bit per second dial-up internet connection, would wobble along the information superhighway from the comfort of the spare bedroom, track down high-school sweethearts and start affairs. Six month later, the marriage would be over. Luddites didn't stand a chance.

Even the England goalkeeper David James succumbed to the lure of Friends Reunited and walked out on his 13-year marriage after rekindling an affair with an old flame through the nostalgia-driven website.

Friends Reunited, launched in 1999, was arguably the first mainstream social networking site. More than 15 million people subscribed. It was suddenly easy for any Tom, Dick or Harriet stuck in a loveless marriage to try to revive the carefree romances of their youth. Friendships that had lapsed decades ago were dusted off, and affairs were inevitably started.

It became easier than ever to find people to cheat with. At the same time, the logistics of an affair also became easier, thanks to burgeoning communications technology. The very structure of the way we communicate with each other changed. Personal mobile phones outsold home phones; text messaging abbreviations crept into standard language; kisses at the end of communications became common; emails replaced "snail mail" and then replaced telephone calls; and finally, face-to-face conversations diminished as office workers began emailing colleagues sitting next to them rather than speaking to them.

On the internet, social networking spurred a new dotcom bonanza, with sites such as Facebook, Bebo and MySpace. The number of sites dedicated to facilitating relationships rocketed. Sites such as marriedsecrets.com, illicitencounters.com and meet2cheat.co.uk, not to mention the personals sections on sites such as Craigslist and Gumtree, all served to help people conduct affairs. Casual postings on these sites rose by a nationwide average of 230 per cent between January and May last year. Groups sprang up on Facebook with names like "Casual sex is the new first base" and "Be my fuck buddy". Webcams built into Wi-Fi-equipped laptops made real-time mobile video communication a reality.

And it won't stop there. The BT futurologist Ian Pearson predicts that in the next 10 to 15 years urban positioning technology will mean that you can text an attractive person in a bar just by pointing your phone at them. He also predicts the rise of technology such as "ego-badges"; jewellery-like devices on which you will be able to upload personal information for transmission to passers-by.

It would seem to follow from this that it should be bonanza time for the affair as far as the young, digital generation is concerned. But the figures suggest not. Rates of younger marriages failing are actually dropping, and the reason is simple – while technology has made it easier to meet and communicate with people, it makes the secrecy needed to conduct an affair almost impossible. There are just too many ways to get caught, and the technology-savvy realise this. Back when maintaining a double life involved simply a call from a phone box and a secret rendezvous point, there were very few tracks to cover. Today, it's almost impossible to do anything in secret.

Say you work in London and use public transport. Like five million Londoners, you have a pre-paid Oyster card to travel; the blue "smart card" introduced by the former mayor Ken Livingstone in 2003. Oyster cards record the dates and times of all journeys taken by the holder, and a record of the previous 10 weeks' travel can easily be seen by entering the card's serial number on a website. So, if you lie to your spouse and tell her you were working late last Thursday, she can easily check if you're telling the truth.

As one private investigator remarked: "An Oyster card won't tell you if someone has been cheating on his wife, but it will show if he's been in one part of town when he's supposed to be somewhere else. It's an easy thing to confront your partner with. It doesn't look like you've been snooping around too much."

Oyster cards are just the tip of the iceberg. Anyone with a rudimentary knowledge of computers can find out what websites have been accessed by sniffing out web history, temporary files and cache records. It's easy to check a mobile phone to see what text messages have been sent and received and what numbers have been called. A quick look at someone's Facebook profile tells you what company they've been keeping, what they've been up to, even how they are feeling.

Snooping has never been easier – and this is just for the beginners. Surveillance technology is now so widely available that anyone can spy on a partner with gadgets and software that James Bond would be proud of.

There is now a whole industry feeding off the insecurities of suspicious people desperate to know if their partners are cheating. Computer software can secretly record all the actions and keystrokes on a PC so that snoops can monitor emails, websites visited and documents created. For a few pounds, you can buy several gadgets that read mobile-phone SIM cards and recover deleted messages.

You can even buy kits online that detect semen; the makers recommend checking not just underwear, but socks and bedsheets as well. A gizmo called the Love Detector uses voice analysis technology to evaluate how your partner feels about you. For the hardcore spy, a £500 Miniature Covert GPS Tracker can be hidden in a car, recording its location via mobile phone signals and storing that data on a memory chip. And for the really paranoid, there's the mobile phone service that uses tiny wireless cameras concealed around the home to record video footage and send it live to your mobile.

So, once you start an affair, at the first whiff of suspicion your partner has a frightening arsenal of state-of-the-art technology with which to catch you. And once you've been caught, modern technology makes it much easier to punish you publicly, too.

Because we can all connect with and contribute to the internet, it now offers jilted lovers the ideal platform on which to air dirty laundry – quite literally, earlier this month, for the wife of a cheating husband who put a photo of his lover's lacy underwear on eBay. The listing, by annastella007 in Canberra, Australia, said the lingerie was "so huge it may make a nice shawl". It was offered for sale with an empty condom wrapper – "size small" – the wife found in their bed. Naming and shaming has gone global.

Wronged partners have spurred a cottage industry in cyber-revenge. Love rats have been humiliated on websites such as myexwifesabitch.com and www.cheated-on.com, which was set up four years ago by Susan Hughes from Devon after she discovered her RAF pilot boyfriend was married.

The latest revenge site, www.liarscheatsandbastards.co.uk, has a section titled Lying Cheating Bastard of the Month. The reality of the global information age is such that, even in a country such as China, where internet access is controlled, web browsers can log on to Liars Cheats and Bastards and discover that John Humphreys from Margate, aka Johnny Boy, has a mark on his chest that resembles a third nipple, and that he allegedly cheated on his now ex-wife with one of her friends. According to the site, he is now in Melbourne, Australia, working on computer games. He probably fled there to escape the humiliation.

Relationship experts and marriage counsellors are now seeing indications of a sea change in the way people cheat, driven by the relentless advance of technology. Andrew G Marshall, a psychologist, wrote: "While starting to cheat might be simple, keeping an affair going has become almost impossible. I would regularly counsel couples where an affair had lasted more than three years. Today, he or she will first get proof and confront. The result is that the length of affairs has dropped dramatically. Looking at all the evidence, it seems that the end of the secret affair is in sight."

There is, however, one anomaly in the data, one area where the affair is holding out and even striking back, and that is in the baby-boomer generation. It seems that it was the post-war generation that got to cheat with impunity, and recent research suggests they are still at it.

A study conducted by researchers at the University of New Hampshire found that the likelihood of a man having an affair now peaks at the age of 55. Older generations, less engaged with modern technology, leave fewer traces when they cheat and are less likely to get caught. For them, cheating is still a viable option.

Divorce figures bear this out. Growing numbers of break-ups in long-established marriages are having a marked effect on divorce rates, which were traditionally dominated by younger couples. While rates of young couples divorcing are decreasing, couples married for more than 30 years are now twice as likely to divorce as they were 10 years ago. In 1996, there were 16,700 divorces involving men in their fifties. In 2006, that figure had risen to 24,700.

Of course, affairs are not always the reason for a divorce, but they feature increasingly in broken long-term marriages as, in a population staying active and healthier for longer, marriages are lasting perhaps decades longer too. So there is an increasing chance that couples will get bored with each other in later life.

Older generations are also more financially secure, thanks to the property boom of the past 30 years, so divorce is less of a financial issue. Add to this mix Viagra and other drugs that help men to stay sexually active, and Botox and cosmetic procedures that help women look younger, and you have a generation not yet ready to give up on extramarital activity.

In contrast, younger people are now leaving it later in life to get married, which means it is more likely that when they do get hitched, they will have found the right partner and will be less likely to stray. Marital relationships and communication between the sexes have also changed in the past 30 years; there is more equality between partners, more empathy, and men and women communicate more than they did 30 or 40 years ago when marriage was often simply a route out of your parents' house. Women's independence and empowerment has meant that marriage is now a choice rather than a necessity for most brides, so most partnerships begin from a healthier starting point.

All this bodes well for the ever-decreasing numbers of people who do marry, but it leaves the prognosis for the affair looking decidedly shaky. In fact, whereas in the later part of the last century, having an affair was seen as a misdemeanour and treated with nudge-nudge-wink-wink sniggers in films and sitcoms (how many of us have sat transfixed in front of shows like Trisha, astonished at the convoluted mess some people manage to make of their private lives?), there is now evidence of a moral backlash against philanderers and a puritanical zeal that does not tolerate cheats.

Earlier this year, the author Mira Kirshenbaum, clinical director of the Chestnut Hill Institute in Boston, a centre for relationship therapy and research, caused moral indignation with her book When Good People Have Affairs, her 11th self-help volume. In it, she dared to suggest that decent people have affairs and that, in some instances, infidelity can help marriages. She was roundly criticised by her peers for suggesting that adulterers deserve sympathy; one said: "Adulterers are neither kind nor good people, so what sort of sympathy are we supposed to give them? A good person doesn't betray their loved ones."

Especially not, it seems, if that good person has a high chance of being found out.