Black Friday, Squabbles, Prices, Who Pays What, & Why

Lots of people are aghast at Black Friday - they see news bulletins showing people fighting, squabbling and climbing over each other to get discounted goods in a 24 hour period. If they knew what was really going on they'd be less surprised - they'd see it as simply a more extreme version of what they get involved in every day - it's a phenomenon called price sensitivity, and here's how it works.

Let me tell you about two products from Starbucks.

There is a regular Cappuccino, for which you'll pay about £2:

There is what's called an Iced White Chocolate Mocha, for which you'll pay around £3.50:

What's the difference between the two products in terms of ingredients and production cost? Almost nothing at all. Why, then, is the second priced at £1.50 more than the first? The answer is to do with 'price discrimination' - a tool for seeing who is price sensitive to more expensive goods and who is not. Imagine you've just set up a new coffee shop - how should you price your items on the menu? Ideally you'd want to charge every customer the most they'd willingly pay - but you can't do that because you don't know how much each individual would be willing to pay. Plus if rich Rick pays more for his coffee than poor Pete there'll be an outcry.

By pricing similar products at different prices, what you're basically saying is: if you're the sort of customer who is price sensitive you'll probably buy the Cappuccino for £2, and if you're not you'll probably buy something more expensive, like the Mocha at £3.50. Let me expand this to other examples. Suppose Sainsbury's added 20% to the price of 30% of its wine, vegetables, linseed and sunglasses - those who are price sensitive would seek out the cheapest products on the other shelves - and those who are not would hardly notice they are paying more.

Have you wondered why in supermarkets the 'own brand' cheaper varieties look so unappealing in package design? They are mostly plain and un-alluring, but for good reason. The 'own brand' product appeals to very price-sensitive people, but it is also there to make more expensive alternative products more appealing. Someone who wants the cheapest corn flakes possible won't worry about the awful Tesco own brand packaging - she'll be glad of the savings. Others will consider the extra money well worth it to have Kellogg’s - and Tesco does not mind either way.

Here are other examples. When attending music festivals, price sensitive people will bring as much of their own food and alcohol as they can - those who aren't bothered and would rather have less to carry from the car to the tent area will just pay the marked-up festival prices. Hotels offer discounted prices on the Internet because they know that Internet shoppers are more price-sensitive bargain hunters. That's also why mini-bars have such expensive drinks - they know many guests won't pay for anything, choosing instead to get their water, fruit juice and beer from a near-by supermarket, but they know that guests who are not price sensitive won't worry too much about paying extortionate prices if it saves them having to go to the shop. Similarly in terms of prices paid for London transport, Oyster cards are there for price sensitive travellers, and full fares are like mini bars - they are there for those who are so insensitive to price that they can't even take the time, or have no need to take the time, to get an Oyster card (many tourists, for example).

 

As well as price discrimination, there are other factors that dictate prices - factors that go beyond customer price sensitivity. An example of a hiked up price with a rationale behind it is restaurant desserts. Have you noticed how desserts are disproportionately expensive in restaurants compared to the main meal? You can pay £10 for a big meal with meat and all the trimmings, and yet you can pay £5 to £6 for a couple of scoops of ice cream thereafter. But there is a good reason why: the value of the ice cream is not what you are being charged for primarily, it is the value of the table time*. While you're extending your stay to order and then eat dessert, you are taking up a table that otherwise could be sold to waiting customers who want to order a main meal. Naturally sometimes there'll be no waiting customers, other times there'll be several - but the restaurant can't know in advance, so it can't fluctuate its prices every half an hour according to demand, it must set fixed prices to allow for it.

Pricing is all about getting the balance right. Take pubs and tap water. Most pubs don't charge for a glass of water, but some do. Why should they charge for tap water that's so readily available and at such a small cost? It's for a similar reason to the price of desserts - water is a substitute for other liquid - while you're in the pub drinking water you're not drinking coke or lemonade or beer. Giving you a glass of water means giving you a substitute for the thing they are trying to sell - pub drinks. Now in most cases water drinkers are sparse; sometimes they appear alongside friends who are drinking other drinks bought at the bar, or they have water with a meal - and it is because of their sparseness that most pubs do not make a charge for water. Those that did probably would find the gains would be outweighed by the losses - water drinkers and their friends may well choose a different pub - one that makes no charge for water.

So why, then, are there so many Black Friday squabbles?

After reading all that about price discrimination and price sensitivity, it should be easy to see what's really going on in that 24 hour Black Friday period. If we need toilet paper, petrol or a new washing machine to replace the one that broke yesterday, we can't be too sensitive to whether those items are on sale or not - we have to make the purchases. In other words, they are not discretionary purchases. Now a lot of the things people buy on Black Friday are discretionary purchases - people buy them because they are on sale, but they wouldn't otherwise buy them. So on ordinary days shops set their prices to attract price insensitive shoppers, with sale items being for price sensitive customers. On a day like Black Friday stores know that price sensitive shoppers will be out in their droves, with price insensitive customers likely to stay away to avoid the crowds and squabbles. The less well off you are, the more price sensitive you are likely to be, so the more keen you'll be to struggle at close quarters among the crowds to grab that bargain you couldn't otherwise afford.

It's easy to see a couple of instances of civil unrest on the news and look upon Black Friday with utter regret (and yes, there are plenty of things about the concept to regret) - but to only have a downer on it would be to overlook the obvious gains. The millions spent yesterday will be a huge boost to businesses and their employees, as well as being a huge benefit to the tens of thousands of consumers who are currently struggling and couldn't afford to pay the non-discounted prices, but now have something they wanted.

* And to some extent the same applies to starters

Why Doesn't Ed Miliband Offer The Kind Of Help That Will Actually Be Helpful?

Ed Miliband is drumming up support for his party in the pre-election campaign by promising financial help to small businesses to enable them to hire more staff. He is, not for the first time, confused. Post-tax incomes of businesses are not the primary determiner of employment levels. Employment wisdom is simple: if the output for additional staff has a value that covers their salaries then an employer should employ them. If not, then they shouldn't. This rule applies irrespective of whether you're a high street kebab shop or a multi-national corporation. Ed Miliband's financial incentives won't help raise employment levels.

To see why; suppose you've just eaten a nice big two-course meal in a restaurant, and the proprietor comes and offers you a free dessert. If you're stuffed, and you care more about your health and comfort than capitalising on a freebie, you will politely decline the proprietor's kind offer. Your optimum level of food consumption does not depend on whether you've paid for your food or not - it depends on your body's metabolism. Just as you will not take on more food unless your body needs it, similarly you will not take on more staff unless they bring a value that covers their salaries. If they will, then you don't need Ed Miliband's supplements - they would be better spent elsewhere; and if they won’t then Ed Miliband's supplements will not go towards raising employment levels.

This is why, rather than governments getting involved, it is much better if banks loan to small businesses of their own volition. A bank will lend if the borrower's ultimate gain from spending the money enables him or her to pay back the loan with interest. A government won't have anything like the same kind of risk signals, nor the incentive for prudence, as it is spending other people's money, not its own. Miliband’s claim that tax cuts for small businesses will help increase employment is a sure-fire vote winner. But like many sure-fire vote winners, it is fallacious.

What would work better would be large tax cuts for middle and low earners. You see, unlike rich people who delay spending and consume higher end products (Ferraris, yachts, swimming pools, £500 handbags, etc), middle and low earners are likely to increase their spending, which will increase employment. The exact same wisdom applies to minimum wage laws too. Instead of a minimum wage law that creates unemployment, hikes up prices and places an unfair burden on employers of low-skilled workers, the government could simply reduce the tax burden of low earners.

The answer to the question - Why Doesn't Ed Miliband Offer the Kind Of Help That Will Actually Be Helpful? - is that the helpful way is less of a headline grabbing vote-winner, so it's one he's unlikely to pursue with the same enthusiasm.

* Picture courtesy of bbc.co.uk

A Mansion Tax Has Got To Be One Of Ed's Most Idiotic Proposals Yet!!!

Myleene Klass is largely right when she barks at Ed Miliband, telling him that the mansion tax will be a tax on far too many people (predominantly in London) that have lived in those houses for years and years, and are not all that rich in terms of disposable income.

Labour's proposal for a mansion tax is an incredibly stupid idea for a tax, particularly given that home owners already incur tax through council tax, stamp duty when a house is purchased, and inheritance tax when the owner dies and tries to pass it on.

The other negative consequence that Klass didn't mention, though, is that due to inflation and planning restrictions, politicians continue to cause the huge rise in property prices, as they ensure that supply cannot meet demand. The perpetuation of this will only continue to give them even more tax, thus reducing even further the chances of trying to sort the housing problem.

It really does beggar belief that such an obviously stupid proposal is being considered by any politician. It is so blindingly obvious that a blanket tax on properties of £2 million is not going to hit people fairly. Yes the Russian oligarch with his big £5 million mansion in London may be one of the success stories of this tax, but for every one person like him, there will be countless London-based elderly couples (doubtless many widows and widowers too) who have paid off their mortgage, lived in that house for decades and seen the value of their home rise over that time.

Tax proposals that have this adverse effect on unsuspecting people are ridiculously ill-conceived, short-sighted ideas, in particular due to the fact that unlike, say, income tax and consumptions taxes, there is no transaction exchange or cash stream with home ownership. This means that all Ed Miliband will do is hit people indiscriminately and at the same time eliminate some of the value of their homes. Given this fact, a system that differentiates between Russian oligarch in Mayfair and widow in Battersea or Pimlico will be so complex, bureaucratic and costly that the net returns will be negligible (and that's if they're even planning on having any kind of rigorous system in place).

Alas, every day becomes more and more obvious that, if there's one thing this country needs in next year's general election, it is that everything must be done to ensure this current bunch of Labour no-hopers gets nowhere near to forming a Government. This realisation - a realisation that I think is starting to be realised more and more - may well be prove to be enough to ensure that Labour gets fewer votes than the current forecasters predict. Gosh I really hope so.

 

On Africa & Trade

So, Alex Salmond publicly announces he is going to donate his annual pension to charity after stepping down as Scottish first minister. That's good of him, sure, but I can't help being suspicious that it's very much based on courting publicity and reputation mongering. If he wants to give to charity, why not do so quietly, as though the cause is what's important, not the attention? As a wise man once said, "When you give to the needy, do not let your left hand know what your right hand is doing" (Matthew 6:3).

Things aren't that way, of course, for Bob Geldof - he relies on a public persona to get the British public donating money. Reports say he may have got the hump with Adele and other performers for not joining him on his latest version of Band Aid’s patronising charity single. Not to worry, she probably couldn't give two hoots what Bob Geldof thinks - and as Bryony Gordon reminds us in her Telegraph article – “Later, we learnt that Adele had quietly made a private donation to Oxfam. But in the shallow, self-promoting world of celebrity, the simple and silent act of handing over money to charity is not the done thing.” I say Geldof ' may have got the hump' - it seems uncertain whether he did, although he denies it publicly - but he's certainly calling for us all to give more to charity, and in the process he's dividing opinions regarding how he goes about it.

Of course, despite Geldof's apparent arrogance, and the crassly condescending song lyrics and over-inflated egos of so many of the slebs involved, any money raised is most welcome (perhaps they could give it to the DEC or Oxfam to ensure maximal good is done in fighting Ebola). But whatever good is done to fight Ebola, and whatever help is given to those beset by its plight, the big questions about Africa continue to be raised - with the reality of the bigger picture being that what Africa needs more than aid is trade - and we prosperous nations don't help as much as we could. As well as the many internal problems that hold back Africa’s progress, the CAP denies Africa many vital trading opportunities with their barriers to Europe’s market for (in particular) agriculture and their EU subsidies, which deny Africa the ability to compete in a global economy. As I said a while back in this Blog post:

“Government subsidies and high tariffs on imports are two examples of how richer countries are distorting the free market by preventing poorer countries from competing to sell their resources. The European Union subsidises European farmers and the American government subsidies American farmers, placing African, Asian and South American farmers at a huge disadvantage, because they cannot easily sell their own produce as they are unable to compete with richer countries in the price market. When George Bush affords American farmers 180 billion dollars in subsidy deals to buy American votes (which he did when he was President), he depresses prices across the globe, which robs unsubsidised (and much poorer) Africans Asians and South Americans of their ability to be able to sell their crops competitively in the global market. This costs poorer countries tens of billions of dollars in lost revenue.

In subsidising farmers, the governments in question don't just disadvantage those struggling in developing countries, they retard innovation locally too. Stopping the subsidies helps farmers explore new market potential; it incentivises them to innovate, to diversify their output, and to generally be more economically prudent without government funds to fall back on. When a government subsidises farmers it removes some of the need to run a business in accordance with market demands and price fluctuations. Non-subsidised business owners are much more alert to profit and loss signals, just as any business that makes decisions with other people's money tends to make those decisions less prudently than with their own money. Furthermore, business owners who receive subsidies try to curry favour with the politicians handing out the cash, when they should be trying to win the customers by providing a good business practice and competitive prices. Farm subsidies in the shape of the very rich giving to the relatively rich at the expense of the relatively poor are a disgrace - and no nation can claim any kind of moral accomplishment in the global scene while they continue to engage in this egregious policy of subsidising their own at the expense of those desperate to get a stronger foot in the free market.”

It's good to hear the trade policy adviser for Oxfam agreeing with this, and being fully seized of what needs to change:

"Not only does the Common Agricultural Policy hit European shoppers in their pockets but strikes a blow against the heart of development in places like Africa. The CAP lavishes subsidies on the UK's wealthiest farmers and biggest landowners at the expense of millions of poorest farmers in the developing world. The UK Government must lobby hard within the EU to agree an overhaul of the CAP by 2008 to put an end to the vicious cycle of overproduction and dumping. The £30bn-a-year EU agricultural subsidy regime is one of the biggest iniquities facing farmers in Africa and other developing counties. They cannot export their products because they compete with the lower prices made possible by payments."

  
It should be remembered - and this is so often forgotten - that poverty and material hardship is not an unusual thing for humans to experience. In the middle ages we in the UK were about as poor as the poorest countries are now. We gradually crept out of our plight to become prosperous, and we did so by finding out that prosperity comes from a combination of material resources and human resources (including education). During the time of long working days, low life expectancy and severe hardship we also found out that the fundamental key to increasing prosperity is conflating those material resources and human resources to create value through innovation.

Once we reached the inceptive stages of our scientific and industrial enlightenment, it took us about 250 years to go from severe hardship to wealth and prosperity - and being one of the first nations it naturally took longer than it would in the modern day when if you are a country plighted by severe hardship you are in a world in which many countries are prosperous and able to help with aid and investment. Don't forget that even as late as the 1970s China's GDP still resembled the GDP of England pre-Industrial Revolution. Just 40 years later China is one of the world's biggest economies and looks set to be the biggest in a few decades (although prior to this happening I predict that China's recent rapid growth will slow down in the short term future while it sorts out its internal contradiction of having a communist state whilst relying primarily on its exporting of consumer goods). The upshot is that when lots of countries become wealthy, poorer countries increase the speed at which they join them. Don't get me wrong, there is still lots more that needs to happen, but as well as China one can see this expedition with the likes of South Korea, Taiwan, Hong Kong and Singapore, all of which were mired in poverty a few decades ago but are now rising in prosperity and stability.

All this prosperity, though, won't happen for the current poorest countries without at least one other vital change - the end of political corruption and oppression. It doesn't take a genius to work out that when a dictator or political party wins a huge majority in a country in which they are vastly unpopular there is corruption at the heart of it. And, of course, if you are a political oppressor running a nation it's no use pillaging a country to its total demise. That is to say, if these dictators are to exploit their citizens and take a proportion of their earnings, they need to keep them at a level that doesn't destroy the economy but keeps everyone poor enough and regulated enough so that they lack the powers to engender revolutionary changes.

It's easy to see why such an effect keeps people poor. Under such a tyrannical regime, there is little incentive to innovate or progress when the State takes much of your earnings and fails to protect your basic human rights. It is the kleptocratic people in charge that keep their citizens in their plight and deny them the ability to trade properly. Prosperous countries begin to be prosperous when the conditions facilitate it - and those conditions rely on people taking actions that benefit others, not just themselves – namely through the vehicle of free trade. Citizens that are forced by their corrupt State to practice the kind of self-interest that only has negative effects on other citizens (directly or indirectly) are going to find it difficult to climb out of their poverty trap.

Given the foregoing analysis, it's not hard to believe the contentions that much of the aid money that went to Ethiopia in the mid-1980s was used to entrap starving citizens into state camps, from where over half a million were said to have been deported and where tens (probably hundreds) of thousands are thought to have died. How much of Somalia's, Uganda's and Zimbabwe's aid finds its way into the hands of corrupt officials and warlords? It wouldn't be surprising to find out that the answer is the vast majority. Thus the onus is on us to research well and ensure that the charities to whom we choose to give are ones that are going to do the most good. 

It was primarily trade that made the Western world prosperous, and it will be, and is, primarily trade that lifts Africa out of poverty. The forecast for Africa looks brighter with every passing decade – and what will expedite this process is a reversal of the things that have retarded the continent for so long, namely the engendering of more stable governments, the lifting of trade restrictions, and the improved ability for Africa to compete more propitiously in the global market economy.

On The Myth That You Can't See Evolution Happening

 

A strange assertion from evolution-deniers is that the theory of evolution is questionable because "It has never been seen to be occurring". It's a strange assertion because it isn't in the least bit true. Imagine teaching a child to tell the time by showing him how long a second is, how seconds convert to minutes, how minutes convert to hours, how hours convert to days, how days convert to weeks, and so on.  As long as he had enough multiplication data he wouldn’t be unapprised of what a year is like, nor a decade, nor a century, nor millennia.

Evolution is a bit like that - once we have the data that explains how it works, we don't need to live for thousands of years to see evolution happening in individual species. Evolution in the simplest observation would be changes in allele frequencies in a population over time. An allele is one of two or more alternative forms of a gene that may occur on a chromosome, affecting the expression of a particular trait. If we are looking for the simplest evidence that evolution occurs, then our observing bacteria is enough to piece together parts of a jigsaw - it gives us evidence of changes in the genes and gene frequencies in populations.  Bacteria are an effective model because they have both huge populations and incredibly fast life cycles, and as such one can observe quite easily the changes in the frequency of any one allele in a set of genes.

Imagine a huge colony of bacteria with a compound in the substrate; those that can tolerate the compound probably will survive and those that cannot probably will die.  The ones that survive will do so because of a natural variation within the population, and this allele will yield dominance in the colony due to the negative selection against other alleles on that loci.  That is evolution at work - the demonstrable observation of a colony of bacteria and change in the allele frequencies of a specific gene coding for a product through changing generations. This manifests itself with clear observations of mutation and natural selection, from which we can see evolution at work in organisms.

Here's a good real life example. In Japan we have something called "the nylon bug" which arose from a strain of bacterium. These bacteria have evolved a completely new gene for the digestion of nylon. This gene, called nylonase, allows these bacteria to live where there is otherwise no food. This capacity occurred due to a single-step mutation that survived because it improved the fitness of the bacteria possessing the mutation. The acquisition of that function trait was so successful that it has given rise to an entire species of bacteria.  

Evolution is full of examples of similar kinds of mutation and natural selection that have played out in populations. There are types of radiotrophic fungi that have evolved to withstand the highly radioactive interior of the Chernobyl reactor. We have a similar example in the UK, where there are piles of ore outside old lead mines. Lead is toxic to snails, but within the last one hundred years or so, local snails have evolved a mechanism to live in lead-rich areas by incorporating the lead into their shells. 

From this information alone we can see evolution at work, just as a young boy can see linear time at work by looking at the clock on his mantelpiece. We can piece together an epistemological jigsaw and use componential analysis to work out that evolution is occurring in every living organism and has been for billions of years.

Why Robots Won't Make Most Of Us Unemployed

Two articles came to my attention today; one in The Daily Mail Fail forewarning of robots bringing an end to half of today's jobs by 2025, and one in The Guardian lamenting an apparent decrease in social mobility. I’ve put them both together in a blog post because the error of reasoning that underlies their contentions is more or less the same in both cases – failure to understand the elasticity of future changes.

Let’s start with the Mail’s fear of enhanced technology bringing an end to half of today's jobs by 2025. It’s certainly true that augmentations in technology will mean an end to many roles currently undertaken by humans (one need only think of all the jobs we used to do that are now being done by machines). But that doesn’t necessarily mean what the doomsayers believe it will mean – you see, as history shows quite clearly, humans have the capacity, imagination and skill to do other things.

Imagine if you were having this conversation with a journalist at the beginning of the Industrial Revolution, and he told you how fearful he was that these new farming, printing and transportation machines would bring a gradual end to humans’ ability to work. You'd simply have to tell him that a lot changed after the Industrial Revolution, and that those changes saw more people on the planet than ever before, and more jobs than ever before. The key reason why there probably is nothing to worry about is that what constitutes ‘work’ (where work means earning a living) changes with growing societies and increasing technological advancements.

In the early 19th century you wouldn’t have been able to imagine how people could earn a living, say, making films or television programs, doing stand up comedy, providing complex domestic litigation, designing cars, driving taxis, flying planes, building speedboats, producing Kindles, playing football, working at a bowling alley, advertising on websites, fixing telephone lines or analysing DNA or quantum mechanics.

The same is true of this generation – the future ‘work’ that lies ahead is currently bound by technological limitations and unawareness of the activities that are currently not jobs but will be one day. As technology increases and those robots do things we used to do, we go on to do things we never used to do. In other words, we lose jobs thanks to technology (and make our lives a little easier in the process) and we create jobs thanks to ingenuity. That the Mail (and it turns out, The Guardian and The Telegraph) have been so short-sighted in their panic is poor on their part.

I now turn to The Guardian's take on the apparent decrease in social mobility. Dr John Goldthorpe, collaborator in the analysis, said:

“For the first time in a long time, we have got a generation coming through education and into the jobs market whose chances of social advancement are not better than their parents, they are worse.”

In illustrative terms, a similar thing is happening to the above, except the effects are being seen here in the labour market. That is to say, as job-types differ, we see different flows in social mobility too. Once upon a time, owning lots of land was the key to having the most social mobility. Now, it is not so important. There is a decrease in social mobility in some quarters of society, but they are offset by increases in social mobility in other areas of the labour market.

Moreover, let us not forget another important fact that was omitted in the article - that general prosperity and well-being are about more than just earnings and career prospects. A proper analysis must factor in all sorts of other pertinent things like improvements in technology, services, scientific capabilities, access to knowledge, health and medicine, worldwide communication, and so forth, that give this generation so many huge advantages that their parents and grandparents never had.

All this does, though, lead me on to what I think is the most important issue related to the above – that we have a generation of young people for whom upward social mobility may be like a passing cloud they can never catch up with. The spectres highlighted in the articles above are not so much a worry for the reasons the writers claimed – they are a worry because there are a large number of young people who lack the basic literacy, numeracy, social awareness, family support, mental health, hope and aspiration to be a force in the job market, or in many cases, get a foot on the ladder at all.

Social mobility, like natural selection in biological evolution, is a strong genetic factor in human progression. People at a young age look to climb the social ladder, increasing their skills and earnings along the way - which means that people with better abilities are generally (not always, but often) in higher positions.

Thanks to what were at the time up and coming advancements, like stream powered cotton mills, coal mining, increased agricultural machinery and major increases in the production of metals, textiles, and many other manufactured goods, there were thousands of job opportunities emerging for people at the incipient stages of the Industrial Revolution - creating a new middle class and transferring lots of wealth from the richer faction of society down to those now taking part in industry. As this continued, 19th century social mobility rose fairly consistently throughout all the UK population, as opportunity to work begat further opportunities to work. While it was far from all rosy, there were the embryonic foundations for what is now a very prosperous modern Britain. Similar developments are occurring throughout the world in countries that are currently as poor as Britain was a century or so ago.

There is currently a generation of young disenfranchised people that may not have the kind of leg-up that their 19th century counterparts had. Yes, it's true that in terms of quality of life and access to things, the current crop have it astronomically better than those before them - but a labour market that continually manages to replace more menial human tasks with machine capability may well struggle to find jobs for many of today and tomorrow's youth who lack the basic literacy, numeracy, social awareness, family support, mental health, hope and aspiration to climb the ladder. And if that is the case - it is there that the State will have to show its mettle and give them much more of a helping hand than is currently the case.

 

Current Politics Briefly Explained With Poker Analogy



There's trouble at t'mill in Ed Miliband's Labour camp, with pressure from some of his party members for him to stand down. Of course, most of us know he's not Prime Minister material, but I find these disgruntled Labour party members' behaviour quite peculiar, given that Ed Miliband is perhaps the best magician in politics right now: he's managed to make his party favourite for the next election while simultaneously having the worst policies in modern Labour Party history (I'll leave it up to you whether you want to include Clement Atlee's socialist party as modern history).

In terms of policies and political credibility, the current political landscape is roughly along the lines of this poker hand analogy. UKIP has about the equivalent of Jack high; The Liberal Democrats have a pair, as do The Green Party; Labour has two pair; The Conservatives have an eight-high straight, and The Libertarian Party has a full house.

Unfortunately, with the current backdrop we live in a nation in which many don't understand the rules of poker. There are an emerging number of hardcore Brits who think high cards trump all other hands; many neo-socialists and Gaia demagogues who think poker is about acquiring pairs; many who over-inflate straights, and a great many who haven't got to grips with the true value of a full house.

Alas, there isn’t a Royal Flush party (I doubt any bunch of humans could create one) – but if there were ever to be a party that would be roughly equivalent to having a four of a kind hand, it would be a party that understands all of the following. That….

Capitalism and science are the primary vehicles for improving people's prosperity, well-being and living standards all over the world.

Heavy regulation is bad for the economy, as it usually hurts the people the policies intend to protect.

Price controls create scarcity; they do not help those struggling to pay their bills.

Small business subsidies are a crass interference in the market of supply and demand.

The minimum wage creates unemployment, hikes up prices and places an unfair burden on employers of low-skilled workers.

Market forces shield workers from discrimination far more than governments do.

The banking industry suffered because it was too heavily regulated, not because it was left 'unfettered'.

Chancellors don't really ever balance the budget or induce growth.

Tax cuts are not what cause deficits.

In the arms race between green governmental policies and greener scientific and technological capabilities, the latter is almost sure to win out.

Inefficiency, waste and poor management are predictable features of public sector, nationalised and government-owned services.

Having a 'trade deficit' does not mean that the country is poorer because of it.

Protecting British businesses over foreign ones hurts other British businesses as well as foreigners.

Buying cheaper products from abroad is better for our country's people, not worse.

Protectionism, import tariffs and farm subsidies help a privileged few, but they make everyone else poorer.

Without interest income there'd be virtually no investment at all.

Big governments create too many hidden costs and only relatively few superficial benefits in the free market.