In amongst the confusion around pensions, tips for budgeting, and complaining about debt-collectors is a persistent drumbeat encouraging people to save money. Good! More people should save more money. But the advice is always undercut with the message "sticking money in a savings account will see it eaten away by inflation".

Is that true?

Firstly, what is inflation? Simply put - prices rise and fall. The price of bread goes up by 50% and a loaf now costs £1.50. The price of a 42 inch flat screen TV drop by 50% and now costs £150. The average person buys 50 loaves of bread per year and a new TV every 5 years - add up the average of what people buy and you have a rough idea of what inflation is⁰.

Secondly, what is interest? Simply put - a bank or building society will pay you money to save with them. If you put £100 in a savings account paying 5% interest then leave it a year, you'll be given a fiver¹.

If the rate of inflation is higher than the rate of interest, your savings will be eroded; your money will be worth less.

The Bank of England's current interest rate and inflation rate shows this:

On average, if something cost £100 a year ago, today it will cost £103.20. If you had saved £100, it would be worth £103.75

So, based on this, savings exceed inflation right?

Well, as ever, it is a little more complicated than that!

For starters, the inflation rate is for the last year and the interest rate is the current rate.

The UK publishes a number of different inflation statistics. Depending on which one you prefer, the inflation rate over the last 12 months is between 3.2% and 4.4%.

Different savings accounts will attract different interest rates. Some will offer tasty bonuses to new savers and will drop to nothing once that promotion expires.

This stuff is hard to accurately model.

But let's ignore all that and YOLO it!

Here's two resources:

• The Bank of England inflation calculator tells you want a historic price is in today's money (up to 2025).
• The website HistoricalSavingsCalculator.com provides the annual average historical interest rate from the Bank of England (up to 2023).

As a quick check. £1,000 in 1975 is equivalent to about £7,300 in 2023.

The same amount saved in 1975 with average interest compounded, would be worth about £18,000 in 2023.

Amazing! Compound interest beats inflation!

But let's take another perspective. £1000 in 2008 is equivalent to £1,540 in 2023

£1,000 saved in 2008 would be worth about £1,180 in 2023.

A loss of over £300.

Let's stick annual UK inflation and interest rates into a graph:

Ah! Over the last 17 years, inflation has been higher than interest - a position which is slowly reverting. Fucking 2008, eh?

It looks like we might be entering a period where interest will be higher than inflation. Does the average person optimally pick their savings accounts? Probably not. Is inflation a 100% reliable way of tracking the worth of money? Also probably not.

While cash savings are unlikely to exceed the rate of return from "Dollar Cost Averaging", it is possible that savings accounts will once again offer some protection against inflation.

But that's not the only way dynamic pricing works. Some shows don't sell out. Even the biggest names can sometimes fail to fill a massive venue on a wet Tuesday. When an event doesn't have the numbers expected, negative dynamic pricing kicks in.

I'm subscribed a number of "Seat Filler" mailing lists. They offer cut-price tickets to events which haven't sold enough tickets.

Having more bums on seats is good for the show (a bigger crowd is a happier crowd), good for the act (a boost to the ego), and good for the venue (more people buying overpriced drinks and snacks).

Last year, I got tickets to The Who at the O2. For a fiver.

Now. these were nosebleed seats, which were only on sale the day before the event, with limited availability, and the drinks were extortionate. But, also, the tickets were cheap!

This happens all the time! OK, it's unlikely to happen with Oasis - but you would be surprised at the number of big name acts that need to use dynamic pricing like this. I've been to gigs, comedy shows, operas, ballets, concerts, and plays for a fraction of the published ticket price.

Perhaps the future for oversubscribed events is a pure lottery. Perhaps tHe BLocKChaIn will solve the problem of touting. Perhaps people need to accept that no-one is forced to engage with the market.

But, also, perhaps dynamic pricing sometimes lets some people experience culture that they'd otherwise be excluded from?

But then I got to this question:

Putting aside whether I feel like something is good value for money - what's my incentive for being honest? I am homo economicus. As a rational self-interested agent, I want things to be better value for money than they currently are. I either want to pay less, or to get more for my money.

It simply doesn't make sense for me to tell the truth on this question. If enough people say they want a better deal, the market should take that as a signal, right?

My previous employer used to send round employee satisfaction surveys. You know the sort of thing "how well does leadership communicate?" and "have you experienced bullying in the workplace?" that sort of thing.

One of the questions was along the lines of "Do you think you are being paid fairly?"

Again, even if I thought I was overpaid why would I answer with anything other than "no"? If people answer yes, we are unlikely to get a pay rise. If we answer no, there is a chance the business will increase its wages.

Perhaps I am overly cynical? Maybe I'm missing something fundamental about how the results of the survey are used? It could be that most of the world is honest by default?

But I can't help wondering whether I'm the only person who deliberately tries to subvert these questionnaires?

Here's how the authors frame it:

Since a “square deal” amounts to assuming that all possible hands are dealt with the same probability, we must interpret the drawing of the above number s as a chance move, each one of the possible values s = 1, • • • , S having the same probability 1/S. Thus the game begins with two chance moves: The drawing of the number s for player 1 and for player 2, which we denote by s₁ and s₂. 19.1.2

Essentially, in two player poker, you could distribute cards labelled 1 - 100 and have people bet / bluff on whether their number is higher or lower than their opponents. That might not be a fun game - but it is a useful toy example for thinking about formal rules for a game.

It is sometimes helpful for us to reduce the complexities of the real world into simple examples. It allows us to examine our base assumptions about reality without getting bogged down in messy practicalities.

Let's take Spotify as an example. I often hear that artists complain that they get paid micro-cents per listen and that streaming is destroying their livelihood. I've no idea how much a recording artist gets every time their song is played on the radio, and I've no idea if Spotify is better or worse than the record deals generated by corrupt studio bosses.

So let's reduce Spotify to a toy example. Imagine a streaming service where people pay a fixed monthly subscription to get unlimited access to media.

This streaming service has only two users. They each pay £10 for the service. The service has no operating expenses and takes no profit. That money needs to be fairly split between the artists. We do not care about record companies, publishers, contracts, fees, taxes etc. We'll ignore copyright lengths as well. Some media is more expensive to produce than others, again ignored. We're assuming all things are equal.

So, what should happen in this scenario:

User 1 listens once to a 3 minute song by Ariana Grande. User 2 listens once to a 3 minute song by Billie Eilish.

That's all they do for that month.

I think most reasonable people would say that artists A & B would split the money evenly. All things being equal, they each get £10.

Now let's take a different scenario.

User 1 listens to 90 songs by Ariana Grande. User 2 listens to 10 songs by Billie Eilish.

How should the money be fairly split? 50:50? 90:10? Something else?

I asked this question on Mastodon:

What I find interesting is that there isn't an obviously fair split. Some people think the service should pay out proportional to total consumption across all users. But a significant minority think that the money should be split per individual customer. Both positions are reasonable and I can see the arguments for each.

Is it fair for some users to subsidise others? Is it fair if artist A gets paid less per stream than artist B? Should there be a maximum or minimum amount an artist can earn? Would people accept a logarithmic formula which decreases the profitability of an artist the more times they are streamed?

Mammals like us have an innate need for fairness. Our primitive monkey-brains can't exactly quantify what makes something unfair - but we know it when we see it.

When artists complain about fairness in streaming, they're probably right; it is unfair.

But when pundits start saying there is an obviously fairer solution, they're probably wrong.

And that's the purpose of this exercise. Even at the most reduced example, there isn't an obvious way to pay artists fairly.

Once you scale up to millions of users, in different countries, interacting with complex licencing regimes, exclusive deals, songs of varying lengths and of varying copyright, etc then it becomes unsolvable without radically reconfiguring how we approach consumerism.

I've written before about the Feynman Algorithm which is a universal method for solving any problem. It goes:

1. Write down the problem.
2. Think real hard.
3. Write down the solution.

I think step 0 needs to be a von Neumann reduction:

0. Reduce the problem to its very simplest use case.
1. Write down the problem.
2. Think real hard.
3. Write down the solution.
4. Return to step (0) and increase the complexity.

I suppose what I'm trying to say is if you can't handle me at my worst, you don't deserve me at my best if you can't solve a problem at its simplest level, you can't solve it at its most complex.

So British Gas announced profits of £969 million for the first 6 months of the year. Is that a big number?

Yes and no. It's more money than I'll ever have, and it's too big for me to easily understand. So let's try and break it down.

British Gas have approximately 12 million customers. £969,000,000 / 12,000,000 = £80 per customer. About £160 for the full year.

Oh. That suddenly doesn't sound like a big number. Don't get me wrong, I'd like my energy bill to drop by £13 per month. But it feels like a modest sort of profit.

But, of course, that isn't the whole story. That 12 million number is made up of domestic users and business users. I couldn't easily find out the proportions, but I did find this from Ofgem:

The price cap, as set out in law in 2018, reflects what it costs to supply energy to our homes by setting a maximum suppliers can charge per unit of energy, and caps the level of profits an energy supplier can make to 1.9%, protecting millions of households.

The price cap in the previous year was about £2,500 for the average customer. I don't know exactly how the profit cap was calculated, but let's say it is on top of the price cap. £2,500 * .019 = £47.50.

If British Gas did not make a profit out of domestic users, the average household would have saved £3.96 per month.

Again, it feels wrong that companies should profit of necessities during a time of crisis. I'd happily see the whole lot of energy companies nationalised and made to work for all of us. But I find it hard to argue that a profit of £1 per customer per week is a big number.

I couldn't find a breakdown of how British Gas's customers contribute to its profits. It's almost certain that poorer households are unlikely to be able to afford more efficient appliances. But, conversely, richer and larger households tend to spend more on heating. Averages hide the lived truth - they are an impersonal and imperfect measure.

Big numbers are hard for us to get our heads around. I remember being told that the reason Civil Service offices didn't have free tea and coffee (a standard perk in most British offices) is that the total cost was just too big. A tuppence per tea-bag is small, but multiplied by half-a-million employees drinking 3 cups per day over a working year - and suddenly there are headlines about how tax-payers are being fleeced for millions of pounds.

Big numbers cause big emotional reactions. But, as ever, context is everything.

Then, without warning, my body decided that producing the human lactase enzyme was for losers. Stupid body! No more cheese for me 😭

The UK has come on leaps and bounds in the last 20 years. When I first became a salad-aficionado, the vegetarian options in most restaurants was either a mushroom risotto or to go hungry. Nowadays, even the most ardently pro-carnivore establishment has a range of veggie- and vegan-friendly dishes.

I am a dietary vegan. Due to my health condition, I abstain from milk. I saw a Tweet the other day which made me wonder how many people in the UK will become economic vegans?

Andy Barr

@10Yetis

Lots about milk prices in the media. I looked at @MyAlertr* to see the price increase from June21 to now.
2pint, blue top.
@Morrisons 🔼 58% (79p - £1.25)
@Tesco 🔼 43% (80p - £1.15)
@waitrose 🔼 34% (89p - £1.20)
@sainsburys 🔼 43% 80p - £1.15)
BTW. We track hundreds of prices pic.x.com/vqcvlkdfet

---

The price of dairy milk is now at parity with oat-milk and soya-milk. Yes, I'm sure there are some things for which plant milk is unsuitable. But if you're a "splash of white stuff in my coffee" kinda person, or "drench my cornflakes with something wet and tasty" milk user, then a swap to plant-milk may make economic sense.

(Yes, most plant milks are fortified with the vitamins and minerals you'd get from bio-lactations.)

Even if you ignore all the environmental benefits of switching from cow-milk to plant-milk, it's hard to ignore the benefit to your bank balance.

The meat-substitute "Quorn" was originally part of a programme to prevent mass-starvation. Researchers foresaw a population explosion and a meat-protein shortage. Without a cheap and nutritious source of protein, people would suffer.

At retail, Quorn is about £6/Kg for 13% protein. Beef mince is about £4.50/Kg for 18% protein. Textured vegetable protein (TVP) is about £5/kg for 47% protein. Chicken breast is about £6/Kg for 30% protein.

So, depending on your needs and preferences, it may save you money to switch to a vegetarian/vegan source of protein. Of course, their prices also fluctuate.

But, yeah, change is scary. If you know that you like one specific brand, you'll be reluctant to change.

If you have sensory issues, it might be difficult or impossible to try something else.

And, sure, learning how to cook something new is complicated. But a veggie burger is cooked in exactly the same way as a beef burger. And sandwich filler is just thin slices of pink "stuff".

To be clear, I don't really care if you go veggie or not. I do it for my own reasons - mostly health and ethical. And I'm sure your reasons for staying omnivorous make perfect sense to you.

Anyway, next time you're browsing the aisles of your supermarket, take a look at some of the vegan alternatives. Chances are you'll find some things are cheaper than the non-vegan equivalent.

Some have dubbed this The End of the Servant Economy.

Perhaps it is. But what do we mean by a "servant"?

If I lived in Downton Abbey or Bridgerton (I wish!) then the distinction between servant and not would be fairly clear. A servant is someone who lives in your home, who works exclusively for you, performing menial tasks.

On-demand grocery delivery riders don't tend to live with their customers. Nor are they exclusive either to supplier or customer. So they're not servants in that sense.

Are they menial? Is that what we mean by servants?

It takes a lot of skill to properly clean a house. A cook needs command of a kitchen and the skill to know what to order. A butler must be trained in etiquette and household management.

Some of these tasks are things that any competent adult could learn to do. But it is sometimes necessary to pay a skilled labourer for their expertise. And it is sometimes necessary to pay an unskilled labourer for their time.

Would you describe an emergency plumber or electrician as a servant? Probably not. But you press a button in an app and a plumber runs along and cleans up your mess. How is that different from ordering a delivery driver?

Perhaps the title "servant" is now only reserved for someone who has a low level of skill? This is a confusing situation!

I briefly chatted to the author of the "Servant Economy" article to try and bash-out the edges of the argument.

Terence Eden is on Mastodon

@edent

Replying to @katebevan@katebevan @sarahoconnor_ It's an interesting argument. But I get stuck with the framing of the word "servant".
Is my accountant a servant? What about a chef at a restaurant?
Or is it only for low-skill roles?
Or, is it about something I could do myself - like washing windows, mowing a lawn, etc?

---

Sarah O'Connor

@sarahoconnor_

Replying to @edent@edent @katebevan I think it's about having people at your disposal who can respond to your wants (give you a ride, bring you something) almost instantly. A household private chef can make you a sandwich. Going to a restaurant, waiting with other customers to order, etc, is different.

---

I think that's a reasonable starting point.

In a literal sense, anyone who serves you is a servant. A waiter in a restaurant is a servant. You could just as easily walk to the kitchen to give your order, pick it up when ready, and clear your plates away at the end.

So there is sort-of a psychological aspect to this. We don't make a demand of the waiter's labour. They walk up to our table and offer their services to us.

There's a "beck and call" aspect. The ability to demand that someone serves you. A taxi driver cruising the streets is offering their services - which you accept when you hail them. You calling the taxi company via phone and requesting them is just that - a request. But the algorithm and incentives behind most popular apps creates a demand. If they don't fulfil your demand (and don't receive a good ranking) they are at risk of penalisation.

So the nature of servitude becomes one of power dynamics. Plumbers are in short supply - so they can deny your demand without penalty. A delivery driver knows they can be quickly replaced - and are therefore at high risk of being penalised if they refuse your demand.

If you have have power over someone, they become your servant. Is that right?

The French psychologist Pascale Molinier wrote a wonderful paper which I found in The Commoner called "Of Feminists and Their Cleaning Ladies". In it she describes the tension of being a feminist and outsourcing traditional female domestic roles to other women:

... [T]he relationship with the cleaner displays a psychological tension between the desire to be served without needing to think about it – in which we find what Joan Tronto refers to as the "irresponsibility of privileged people" – and the desire to create a reciprocal link which "domesticates" this relationship.

This tension is not specific to the relationship between female employers and their domestic employees, it interrogates our relationship with care more widely, in that we all benefit from it.

P. Molinier, Of Feminists and their Cleaning Ladies: caught between the reciprocity of care and the desire for depersonalisation, Multitudes 2009/3-4, no. 37-38, p. 113-121

For lots of us, we know that we could walk down to the shops to pick up biscuits. But we value our time above that of someone else's labour. So we exercise our spending power to temporarily demand someone fulfils our whims.

Ultimately then, I think this comes down to guilt. We flatter ourselves that we live in an egalitarian society. Interacting with people when there is a significant disparity in our relative power causes us cognitive dissonance. So we - perhaps somewhat dismissively - define certain people as servants.

Despite the fact that they are doing a valuable job (both socially useful and evidently worth paying for) it gets designated as a mere frippery.

I'm going to miss the era of Venture-Capital subsidised services. I think the people doing the hard work to actually get goods into customers' hands shouldn't be thought of as servants; they should be thought of as co-founders.

(The situation is slightly different if you borrow a book from a library. In the UK, authors earn money every time a book is borrowed.)

Is it fair that authors' works can be sold like this without any recompense?

It isn't just about the money. Publishers don't receive any data on second-hand sales. That means they can't even tell if an author is popular. An author could be a best-seller without even knowing it.

Apologists for second-hand book shops point to some nebulous "benefits". A reader might pick up the first book in a series and then go on to buy legitimate copies of the rest. But there's no way to stop readers from buying sequels second-hand.

Not everyone can afford new books. I don't think that gives people a right to just take copyrighted works without fair compensation.

Charities make the bulk of their money from these sales. I'm sympathetic to that - but surely authors should be able to opt-out of any charity which doesn't match the author's values?

It is more environmental to share books. Again, true, but the paper from the book can easily be recycled without copyright theft.

What should we do about this?

Dame Antonia Byatt has called for new rules to protect novelists using a system known as droit de suite, which guarantees artists a payment for each subsequent sale of their work.
“Droit de suite is a very good way to protect us,” she said. “I hope they do something because earnings for an author can be absolutely pitiful.”

Authors want cut of second hand sales - The Times

The UK has a concept of Artists Resale Right which ensures that artists get compensated when their art is resold. Authors are artists.

We have the technology to do this. Every modern book has a barcode on the back. Every modern book sold online has an ISBN. Collect up the ISBNs and the price paid, then give the copyright holder a percentage of that sale.

Can't be done, you say? Back in 2014, Bookbarn announced it was to pay author royalties for used book sales.

It is time for us to take a stand and recognise that selling second-hand books are theft.

No. Wait. Sorry. Not books. Video Games. That's right - reselling Video Games is killing the industry.

Dammit. What was I thinking. I meant Blu Rays. Every time someone sells a used movie disc, the patent holders are being stolen from.

This madness must stop!

We're still unable to re-sell digital goods. This is because most people recognise that it is impossible to know if a digital file has been copied and retained by the seller. It is time-consuming and impractical to photo-copy an entire book. So we assume that when someone sells the physical item, they are depriving themselves of an asset.

It is impossible to prove you have deprived yourself of a digital asset.

We also know that digital files can be reproduced infinitely with close to zero cost.

Any digital good is worthless on the resale market.

This has been a rather long-winded way of saying that we shouldn't treat digital art as though it were a stock to be traded.

The Age of Surveillance Capitalism is a deeply-reasoned examination of the threat of unprecedented power free from democratic oversight. As it explores this new capitalism's impact on society, politics, business, and technology, it exposes the struggles that will decide both the next chapter of capitalism and the meaning of information civilization. It shows how we can protect ourselves and our communities and ensure we are the masters of the digital rather than its slaves.

Possibly the worst book I've read all year. It would be twice as good if it were half as long. It would be a hundred times better if the author hadn't confused polysyllabic words with an effective argument.

The worst thing is - I think I probably agree with most of this book. But it is so turgid and (I hate to use this word) hysterical that I don't think it will produce meaningful change.

The author clearly sets out how surveillance has become the lifeblood for modern internet companies. I fully agree with her analysis. Although it is written in such a convoluted fashion that I doubt most people will make it through the first few chapters.

Next, it moves on to advertising. Again, I agree that targetting advertising is a nuisance. I don't think it is particularly evil - but I block it all anyway. There's no argument presented - we just have to take it on faith that targetting is bad.

I found myself skimming large chunks of chapters in an attempt to find a sentence which made sense. Here's a typical bit of academic-babble:

We may yet see the founding of a new synthesis for a third modernity in which a genuine inversion and its social compact are institutionalized as principles of a new rational digital capitalism aligned with a society of individuals and supported by democratic institutions.

I've read that several times and I'm still no closer to deciphering it. The whole book is like that. Purple-prose utterly lacking in simplicity.

Another section deals with population control. We're told that in the future, our cars will be tied into surveillance systems. If we drive dangerously, or miss a payment, they'll be disabled.

At which point, I found myself thinking "...good?" I mean... if you're a bad driver, what's wrong with putting up your insurance premiums? If you're lumped in to a high-premium demographic, why should you have to subsidise the prices of your riskier cohort? Perhaps you can explain the problem to me - because the author didn't.

The book mentions the story of the repossession agent who helped crowdfund car repayments for a delinquent couple. This was presented as a heart-warming tale - but I found it chilling. Rather than the impartial laws of mathematics, people have to be telegenic and sympathetic in order get out of debt. Somehow, that's presented as the preferable option.

Finally... Well, there is no finally. There's no list of tips for how users can protect themselves (download Firefox and use an adblocker would be my advice). It's just a pure emotional howl of rage. Perhaps that's cathartic for some, but it doesn't change the world.

This book is important. Far too important to be this badly written.

This book debunks the myth of the State as a large bureaucratic organization that can at best facilitate the creative innovation which happens in the dynamic private sector. It argues that in the history of modern capitalism the State has not only fixed market failures but also shaped and created markets, actively investing in new technologies and sectors that private investors only later find the courage to move into.

A profoundly important book. Your iPhone - and most other high tech stuff - is based off state-sponsored research. For every Venture Capitalist saying "the free market made this possible" there is an army of publicly funded developers. Sometimes, in the case of GPS, a literal army!

It makes a compelling case for the funding of basic and experimental research and development. We need long-term planning, rather than short-term profit chasing.

My only criticisms of this book are based on me not reading many academic books. I don't understand how a reference that just says "Smith (1904)" is helpful to anyone. It is also repetitive - I suspect because it is a collection of related essays, rather than a unified book. I also wonder whether it is normal for an author to continually cite their own work.

Either way, it clearly presents a well-researched argument and exhaustively demonstrates its veracity.

"I, Pencil" by Leonard E. Read is an influential essay on the nature of free-market capitalism. It correctly points out that the modern world is so complex and interdependent that no one man can know his true place in it. The world is impossible to control, so we should let the market work without interference.

I'm not going to argue about the nature of capitalism - but I am going to show that many of the arguments it uses as justification are factually incorrect.

The essay is short, and is freely available to read online - I will concentrate on the conclusion.

If I, Pencil, were the only item that could offer testimony on what men and women can accomplish when free to try, then those with little faith would have a fair case. However, there is testimony galore; it’s all about us and on every hand.

Let us see what testimony there is!

Mail delivery is exceedingly simple when compared, for instance, to the making of an automobile or a calculating machine or a grain combine or a milling machine or to tens of thousands of other things.

Mail delivery has been chosen as an example because - when the essay was written - the US Mail service was a government monopoly. And government monopolies are bad. Is mail delivery simple? Anyone who has studied graph theory would say not! The act of routing a physical packet around a network is hideously complicated - especially when done at scale.

Private mail companies are in existence now. FedEx, for example, employs nearly half-a-million people around the world. That's more than Ford and BMW combined.

But given it's hard to compare complexity of different activities - let's give this one a pass.

Delivery? Why, in this area where men have been left free to try, they deliver the human voice around the world in less than one second;

In the UK - and most of the world - the telecommunications network was delivered by governments. In the USA, the telecoms infrastructure was nationalised in 1918. This was partly on national security grounds - but also partly because private companies wouldn't provide service to unprofitable areas.

The US Government - like governments around the planet - forced a subsidy situation. Rich city customers paid slightly higher bills to ensure poor rural customers had access to the network. This increased the value of the networks thanks to Metcalfe's Law.

(Of course, anyone studying the "simple" mail delivery network would have understood the complex nature of network value.)

The US phone network was swiftly privatised - whereupon it became an abusive monopoly which needed to be broken up because it wasn't providing competitive services.

Undersea cables - necessary for delivering the human voice around the world - were initially funded by both private companies and governments. But the huge capital outlays and (again) national security implications meant that governments around the world were deeply involved in their creation.

The phone network is not an example of a market free of government interference.

they deliver an event visually and in motion to any person’s home when it is happening;

The Telstar Satellite - the first modern communications satellite was a mixture of private and public investment. Carried on the back of the US Government's rocket ships. Now, that was in the early 1960s - the original essay was published in 1958.

The radio and TV networks in the USA were mostly privately financed. But they were tightly regulated.

Herbert Hoover - the then Secretary of Commerce - declared that radio was "probably the only industry in the nation that was unanimously in favor of having itself regulated."

What is regulation if not a subsidy? Rather than privately prosecute people and companies interfering with radio-wave transmission, the public took on that responsibility.

they deliver 150 passengers from Seattle to Baltimore in less than four hours;

I assume this is talking about railroads. I'll happily grant this one! The USA's railroad network was almost entirely privately financed and managed.

It is worth noting that Amtrak started in the 1970s with $40 million in direct aid. The subsidy is now measured in the billions.

they deliver gas from Texas to one’s range or furnace in New York at unbelievably low rates and without subsidy;

This is simply untrue. The petroleum industry has been subsidised for over one hundred years. In particular, the depletion allowance was sponsored by a Texan senator.

they deliver each four pounds of oil from the Persian Gulf to our Eastern Seaboard—halfway around the world—for less money than the government charges for delivering a one-ounce letter across the street!

This is such a bizarrely worded claim, it's hard to unpick its contrived nature. It is supposed to tell us that the government provided postage network is inefficient compared to the privatised oil companies - it actually tells the opposite story.

In 1958 - when this essay was published - it cost 4 cents per ounce to mail a letter in the USA. That cost is the same whether you're posting "across the street" or across the country. That distance could be as high as 2,900 miles. Not bad for 4 cents!

The distance from the Gulf to the USA is around 3700 miles - appreciably higher, but not dramatically so. I couldn't find the cost of shipping oil in the 1950s - so I'll take the author's word on the prices.

In 1945, FDR engaged in financial support for Saudi Arabia because securing oil was vital for national security.

There is a long, complicated, and bloody history of the Iranian oilfieds - and state support for the general oil industry is documented above.

At the moment, the US Postal Service receives zero direct subsidy - although it is losing money.

Closing thoughts

There's a beautifully simple story behind "I, Pencil" - the world is so complex that only the free-market can delivery reasonably priced goods and service. Government spending is wasteful.

I have spent many years working for private companies - large and small - the level of waste there would shame any government department.

I'll leave you with the words of the US President:

Florida got $12.6 billion in federal money last year—from Nebraskans, and Virginians, and New Yorkers, and Alaskans, with their Eskimo poetry. 12.6 out of a state budget of $50 billion, and I’m supposed to be using this time for a question, so here it is: Can we have it back, please?

BA wanted a minimum of £709.31, while Virgin's cheapest was £689.31. Norwegian offered us a flight at £579.20 without hold luggage or meals, or £649.20 with. So while the new challenger is still cheaper, the difference becomes more marginal, narrowing to as little as 6%. Can Norwegian really offer bargain transatlantic no-frills flights?

(Emphasis added)

This is an entirely incorrect way to think about finances. Let me explain by analogy.

Suppose you want to buy the DVD box set of Buffy The Vampire Slayer. There's a shop a 5 minute walk away which has it for £80. If you walk for half an hour to another store, you can buy it for £40. A massive 50% saving! Which store do you buy it from?

Before you answer that, consider this question.

Suppose you want to buy a brand new Ultra-HD 3D TV. There's a shop a 5 minute walk away which has it for £4,000. If you walk for half an hour to another store, you can buy it for £3,960. A pathetic 1% saving. Which store do you buy it from?

The more financially astute among you will realise that the percentage doesn't matter - the absolute price does. In both cases, your bank account is healthier to the tune of £40.

It is the same with the flights above. Sure, you may "only" be saving 6%, but that is an extra £40 to spend on designer cocktails in trendy Manhattan bars.

Remember - always look at the absolute price. Sure, weigh that £40 against the cost of your time walking to a different shop, or the risk of choosing a new airline, or the returns policy of the store - but don't be fooled into thinking percentages matter when it comes to what you spend.

Your bank balance doesn't care about what percentage you've saved - just the absolute cost you've paid.