A Macroeconomic Tour of London

This tour can be conducted on foot, but links to virtual resources are also provided. 

55 Broadway, SW1H 0BD

This is a grade 1 art deco building near St James’ park, originally home to the London Underground. It’s not particularly tall (it’s only slightly bigger than Big Ben, and half the height of St Paul’s Cathedral) but given that it has a steel frame it is not only a skyscraper, but London’s first! (It doesn’t look like a skyscraper, but the stone encasing provides no structural integrity. Sadly, it closed in January 2020.

If you visit, try to spot the naked sculptures, Night and Day, on the outside of the building. (For controversy on this, see here).

HM Treasury, SW1A 2HQ

The Treasury is responsible for public finance and economic policy of the UK. It is located within the Government Offices in Great George Street, near Parliament Square. It has a large internal courtyard and the basement is home to the Churchill War Rooms (part of the Imperial War Museum).

Fun fact: It served as the headquarters for MI6 in the Bond movie, Spectre, and was the starting point of the street race in Fast And Furious 6.

11 Downing Street, SW1A 2AB

Next door to the most famous address in the UK (10 Downing Street is the government headquarters and traditionally the private residence of the Prime Minister), 11 Downing Street is the official residence of the Chancellor of the Exchequer. This is the equivalent of a “Minister of Finance”, which is the person responsible for fiscal policy.

Fun fact: Because the private living space is larger at no. 11 than no. 10, when Tony Blair became prime minister in 1997 he decided to live there instead. Every subsequent prime minster has done the same thing.

Take a virtual tour here: https://artsandculture.google.com/u/0/partner/10-downing-street

Bank of England, EC2R 8AH

Established in 1694 this is one of the oldest banks in the world and a model for central banks. It was nationalised in 1946. It has a monopoly on producing banknotes in England and Wales, and is responsible for the conduct of UK monetary policy.

There is an excellent museum in the basement, and several online exhibits, including this one on banknotes. The basement also houses the Bank of England vaults, which contain over 400,000 bars of gold.

A Tour of London’s Markets

This tour can be conducted on foot, but links to virtual resources are also provided. 

Portobello Market, W11 1AN

The world’s largest antique market, in the famous Notting Hill. It’s main trading day is Saturday but the area also contains numerous permanent shops. Follow on Instagram to see details of virtual fashion markets on Fridays.

Brick Lane Market, E1 6QR

Containing bric-a-brac as well as fruit and vegetables, Brick Lane market is part of London’s East End and close to the world famous cluster of curry houses. The market is is open on Sundays and can get very busy! For more information see here or here.

Smithfield Market, EC1A 9PS

Smithfield Market is technically called “London Central Markets” and is located in Farringdon. It is one of the largest wholesale meat markets in the world and the site has hosted livestock for over 800 years.

There is a 90-minute tour that costs £12.50. You can book a tour here: https://www.cityoflondonguides.com/tours/smithfield-market-tours-monthly

Fun fact: Scottish revolutionary William Wallace, otherwise known as “Braveheart”, was killed at Smithfield in 1305.

Borough Market, SE1 1TL

Borough Market is one of the oldest and largest food markets in London, dating back to the 12th century. The present buildings were built in the 1850s and house an eclectic mix of speciality foods. Open Monday – Saturday.

For a virtual tour click here.

London Metal Exchange (LME), EC2A 1AJ

The London Metal Exchange (LME) originates from 1571, but was formed in 1877 and moved to its current location in 2016. It remains one of the few physical trading floors for a major commodity market – activity is conducted within an open outcry “ring”, which gets its name from when traders would mark out a ring using chalk on a coffeehouse floor. For more on its history see here.

Inequality

Lecture handout: Inequality*

The lecture tried to show the link between economic growth and rising living standards for the general public. This is something that Dracula noticed when he encountered a “normal” modern house:

I’ve been a nobleman for 400 years. I’ve lived in castles and palaces among the richest people of any age. Never….never! Have I stood in greater luxury than surrounds me now. This is a chamber of marvels. There isn’t a king, or queen or emperor that I have ever known or eaten who would step into this room and ever agree to leave it again. I knew the future would bring wonders. I did not know it would make them ordinary.

Here is an overview and discussion of a wealth tax:

Here is a KPMG report on how Switzerland treats Cryptocurrencies as part of its wealth tax.

You can see the trailer to Parasite here:


This page ties into Chapter 12 of Economics: A Complete Guide for Business

Learning Objectives: Survey the latest empirical work on inequality and relate this to wider social issues.

Cutting edge theory: Assessment of a wealth tax

Focus on diversity: Thomas Sowell has written extensively on topics such as race and inequality. In this interview he discusses the myths or economic inequality.

Stagnation

Lecture handout: Stagnation*

I provided some pessimistic views on transformative breakthroughs. But every now and then I notice the power of steady, incremental progress. For example:

Noah Smith has a nice Twitter thread on progress since 1970.

In December 2020 Tyler Cowen provided a list of new technologies that may mark the end of the great stagnation. He included:

Here is a podcast with Eli Dourado:

Extra reading: Dourado, Eli, “Notes on technology in the 2020s“, December 31st 2020

For more on Permissionless Innovation

A good, uplifting account of how creativity can result from not asking permission:

The importance of ideas:


This page ties into Chapter 12 of Economics: A Complete Guide for Business

Learning Objectives: Understand the debate around secular stagnation.

Cutting edge theory: A survey of potentially transformative breakthrough technologies.

Focus on diversity: Virginia Postrel’s book, The Future and it’s Enemies, encapsulates the distinctions made at the end of the lecture. 

Value creation

Lecture handout: Value creation*

The purpose of this session is to realise that value comes from satisfying people’s needs, and that this leads to a broad and insightful realisation that:

  • Competition is when anyone else tries to satisfy the same customer needs that you do.
  • Innovation is trying to find better ways to satisfy your customers needs.
  • Entrepreneurship is successful when you understand your customers needs better than they do.

You can read more about David Reynold’s model here and here. In 2013 Barry King tried to beat Reynold’s record by constructing a model of Salisbury Cathedral (which is a popular tourist destination for KGB agents). You can read more here. Since 2012 Steve Waller has spent around 12 hours a day to create a scale model of the St Hilda district in Middlesbrough.

Here’s a list of items that have caused controversy over their value:

  • Among Us shaped chicken nugget sold for almost $100,000 (link)

For more on the value of saffron see here. Since it is worth more than £5,000 per kilo (in 2021), counterfeit saffron is a highly profitable criminal enterprise.

Steve Job’s famous advice was to not listen to your customers. This is similar to Tyler Cowen’s “law of interesting content” – which is that interviewers should have the conversation that they want, not what they think their listeners want.

Here’s an example of how Starbucks creates value for me:

This concept is closely related to “Jobs to be done”, but here’s my review of ‘Competing Against Luck‘. Here’s my bleaker application of value to Apple’s iPhone innovation:

For a more traditional, textbook treatment for demand curves, see here:

A great application of consumer surplus is here:

Can you think of something that delivers a lot of consumer surplus for you? What’s the most consumer surplus you’ve ever received?

Finally, here’s a quick quiz on understanding value.


This page ties into Chapter 1 of Economics: A Complete Guide for Business

Learning Objectives: Link a thorough concept of value with implications for competition and innovation. Derive demand curves.

Cutting edge theory: Jobs to be done

Focus on diversity: Economists typically take preferences as given, but we can provide a theory of demand reflecting “the individual’s commitment to an intelligible universe” (p.52), where goods are considered to be a visible reflection of culture. Mary Douglas (1921-2007) was one of the world’s most admired social anthropologists, and her 1979 book, ‘The World of Goods’, provided a rich and compelling illumination of consumption patterns. 

Spotlight on sustainability: Plastic packaging

New York

The city as the engine for social change and increasing well-being is one of the truly great triumphs of our amazing ability to form social groups and collectively take advantage of economies of scale (West, 2017, p.186).

New York is the classic metropolis.

Most great cities have a similar aspect – the river upon which it originates provides a bearing and context. I love Liverpool in part because the two Mersey tunnels preserve the unique skyline. New York – and when I say New York I obviously mean Manhattan – is special because there is no dominant waterfront. The fact that it’s an island makes it inward looking, and instead of being in a city to judge by itself, you feel that you are at the centre of all cities, and therefore all modern civilization.

My first trip to New York was via bus from Washington DC. We were offloaded in Chinatown and it was freezing cold, so we went straight into the nearest diner for coffee and doughnuts. After dumping our bags in the hostel we raced to the Empire State Building and caught the last elevator ride up. What was damp rain at street level was snowfall at the top. Romantic, and majestic.

My last trip was to present a paper at the Eastern Economic Association annual conference. The keynote was delivered by Ed Glaeser, the world’s leading economist on cities. He is a sharp, dazzling speaker, and watching him perform with a New York City backdrop was a thrill. Satisfying, and triumphant.

What I love most about cities is the juxtaposition of energy and possibility and the amount of personal space they provide. An atomised city provides a certain sanctity. Here’s how to spend time alone in NYC.

Cities are the crucible of civilization, the hubs of innovation, the engines of wealth creation and centres of power, the magnets that attract creative individuals, and the stimulant for ideas, growth, and innovation. (West 2017, p.215).

The downside of this, of course, is the potential to slip out of life, unnoticed. Cities come with costs.

They are the prime loci of crime, pollution, poverty, disease, and the consumption of energy and resources. Rapid urbanization and accelerating economic development have generated multiple global challenges ranging from climate change and its environmental impacts to incipient crises in food, energy, and water availability, public health, financial markets, and the global economy (West 2017, p.215).

But surely we can agree that the solutions to these modern problems must include (i) energy efficiency; and (ii) wealth. Thus cities are crucial.

Each trip to New York is a combination of revisiting favourite eateries and seeking new ones.

I recommend:

  • Ivan Ramen – (New York Times, one of my favourite episodes of Chef’s Table). I’ve only been the spin off, Slurp Shop, but enjoyed it immensely.
  • Sombrero – ok, this isn’t particularly impressive cuisine but when you come from the UK, and the alternative is a chain such as Tortilla or Chiquitos, it’s nice to sit in a Mexican restaurant, with a wide range of tequilas, and full plates of decent fare. My main motivation for my first visit was the proximity to my hotel, but I went back a second time for familiarity. Not a strong recommend, but a place close to my heart.
  • Xi’an famous noodles – I vouch for the Spicy Cumin Lamb burger, but there’s a lovely depth of heat and lip tingling joy across the menu.

To try:

  • Pisillo Italian Panini – the first sub that I had in NYC blew me away. Multiple meats, and it required a dislocated jaw to bite into! Contrast that with a single slice of wafer thin him, and perhaps a slice of cheese that you’d get in the UK. For a wide choice of Italian style subs, this is the place
  • Faicco’s Italian specialties (and apparently it has to be an Italian special)
  • Katz – the classic deli
  • Los Tacos, in Chelsea Market
  • Bleaker’s Pizza, Greenwich
  • Joe’s Pizza
  • Taim, West Village

Recommended bars:

  • The Turnmill – this is the official bar of the Everton FC NYC supporters club. What’s better than a packed pub in a foreign city, on a matchday, covered in TVs, full of fellow fans? Savour the crisp walk of anticipation from the subway ready to sink a cold pint at 10am. Bizarre, but worth doing.
  • The Garret
  • Employees Only

I’m not sure when I’ll next go back to NYC. But I miss it.

Poker

I don’t play poker but I have a couple of friends that do. I recently asked them what resources they’d recommend for people wanting to get into it, and thought I’d share their advice.

Transition economics

Learning Objectives: Understand the socialist calculation debate. Consider the empirical record of different transition economies.
Lecture handout: Transition Calculation*

The training scene from Rocky IV demonstrates the difference between the USSR (technologically sophisticated but lacking in heart) and the US (backward but free).

https://youtu.be/1oDTNEEu3Rw

  • Audio: Planet Money, “Peanuts and Cracker Jack
    • What are the main factors that determine the earnings of a vendor?
    • Why is it better to have the vendors decide on who does what, rather than senior management?
    • How much entrepreneurial profit comes from working harder than others?

One of my favourite ruminations on the differences in economic systems.

  • Further reading: “Havana or Prague” in Hitchens, Christopher, (2010) Hitch-22: A Memoir, New York: Twelve
Lecture handout: Transition Shock*

There’s a big difference between queuing for basic necessities, and queuing in excitement about the first McDonalds in Moscow:


These resources form part of my Managerial Economics course map. You can watch the full YouTube playlist here. This page ties into Chapter 12 of ‘Economics: A Complete Guide for Business‘.