The impulse to tell (false) stories (by Pedja dell’Arno)

In several books on behavioral economics (such as “Animal Spirits”, by Akerloff and Shiller, and “Thinking, Fast and Slow” by Daniel Kahneman, or the books by Nassim Taleb), scholars explain the tendency of human beings, especially essayists and commentators, to construct stories that “explain” realities that are mostly random by nature. I have seen one example in a very successful book that was published a few years ago: “How Soccer Explains the World. An Unlikely Theory of Globalization”, by Franklin Foer. It is an interesting book, precisely because it tells plausible and suggestive “stories”. In one of them, he praises his favourite team (also mine), FC Barcelona, because it is an example of a “civilized” club that integrates foreigners and it expresses nationalism in a civilized way. It praises that the club never resorted to publicity in the T-shirt. Well, a few years after the book being published, the club has publicity from a Foundation dependent on a non-democratic government. Its maximum officials have been involved in corruption cases and some players accused of racist abuse, like any other team in the world. Before the book being published, FC Barcelona fans routinely threw eggs and potatoes to RCD Espanyol fans, the rivals in the city. The supposed pundit, as an example of the integration of foreign players, says that Johan Cruyff gave the Catalan name Jordi to his son, and that it probably was the first person after the Franco dictatorship that gave a Catalan name to his son. Too nice to be true.  Is the rest of the book (on topics I know much less about) as rigorous as this one?

Two Days in a BRIC (by Francesc Trillas)

I just spent two days in Sao Paulo (Brazil). Of course this is not enough time to know a city well, much less a country. I would have liked to spend more time there, and hopefully in the future I will be able to do so. It doesn’t help that we don’t know many people there, so we didn’t have a local guide in our visit, although I had a productive meeting with professors in the Getulio Vargas Foundation. In the short time that we spent there, my impression was that it is a relatively rich and lively city. Apparently, it is a safe city, at least in the daylight and in the commercial center. The Avenida Paulista, the main business street, does not look different from other big avenues in capitals of developed nations. We spent a few hours in a big park (Ibirapuera) that contains several museums, and that reminds one of Central Park. We also spent time in a shopping street called Oscar Freire, which reminds one of Rodeo Drive in Beverly Hills. One thing I didn’t like: if you go to Sao Paulo, avoid the Linson Suites Hotel. One thing that didn’t surprise me: when we woke up to catch our flight in the last day, at 6 am there were still many groups of young people partying in the streets, not differently from many Spanish cities. And yes, the Brazilians are crazy with football, and they fed the illusion that they were on a par with FC Barcelona the days prior to the Clubs World Cup final. The taxi driver that drove us to the airport in our departure was a Santos fan, and (hypocritically) I wished him luck when he dropped us. The rest is history.

Bad news for European anglophiles (by Pedja dell'Arno)

The decision by Prime Minister David Cameron to veto the new European fiscal arrangements and the subsequent marginalization of the UK from the new agreement is bad news for many European anglophiles. Although Britain is still a member of the European Union, and we still benefit from easy access to the British labour market and easy communication with London, if this marks a new era in which London and Europe will be gradually more separated, it is hard to see how this could be good news. Most probably, it is good news for fiscal policy and in the short run it may be good to stop the euro crisis. But from a cultural point of view, if this is a first step to a gradual de-integration, this may mean in the future less links between continental and British universities, less contacts between executives and workers, less relationships between artists and cultural elites. London is an intrinsic part of Europe and Europe without London is less Europe. The continent needs the reminder that there is a big multi-cultural city accross the channel that is one of the cultural capitals of the world. It is hard to see how this would have happenned under a Labour government.

Denmark eliminates the independent regulator (by Francesc Trillas)

Denmark has decided to eliminate its telecommunications national regulatory authority. The few existing official details are in http://en.itst.dk.  Telecommunications expert William H. Melody, Guest Professor at Aalborg University in Copenhagen tells me that his best guess is that the top staff in the Ministries were jealous of the success of the regulatory agency, which has been regarded as one of the leaders in the EU since its inception in 1994, and the Director who has been there the entire time, and they took advantage of the ignorance and naivete of the new government about these matters.  This would also have been supported by the private equity owners of TDC, the incumbent, who are bleeding the company financially and seeking weaker regulation. I would like to know more about this issue, but it seems interesting and intriguing to me that a country that has been for long at the top of telecommunications rankings in Europe, has decided to eliminate its independent national regulatory authority (a requirement of EU rules) after a political change. Something similar has been happening for many years in Chile, a country that is often mentioned as a paragon of virtue in terms of liberalization and performance: Chile's regulatory agency is part of a ministry. Independent regulators may under some conditions contribute expertise and alleviate time inconsistency problems. But they have advantages and inconvenients, and they are vunerable, despite being a typical recommendation of international institutions. They seem to be no panacea, and they are neither a necessary nor a sufficient condition for good performance.