Five million nights have been booked on Airbnb in the past six months alone. 30 million rides have been shared on Carpooling.com. This year, two billion dollars worth of loans will go through peer-to-peer lending platforms. Mind blowing numbers, don’t you think? A couple of years ago, renting an apartment or a bedroom is a stranger’s house seemed like a crazy idea. Now, what’s happening these days, is humans begin to understand the power of technology which helps to unlock the idling capacity and value of all kinds of assets, from skills to spaces in ways never possible before. It is a new economic culture of collaborative consumption, through which people are becoming micro-entrepreneurs. The collaborative economy is partially something that is called a shared economy. Sharing consumption is the economy of supply. You have something “extra” that you do not use, and you offer it to others. Sharing economy is an economy of abundance instead of an economy of scarcity. Think about it, all commercials are built on one principle: it makes us want something that is «missing» from our life (health, beauty, rest, luxury, freedom), by offering goods to compensate for this scarcity. The sharing economy is completely different: you understand that you have something «additional», and you share it. This makes you feel freer, happier, feel like you are creating value. However, the magic behind collaborative consumption does not lie only in making money for living, but in creating trust between strangers by using the power of technology. Some studies say that an active Facebook user is three times as likely as a non-Internet user to believe that most people are trustworthy. Using technology as an instrument to build meaningful connections, in a way rediscovers humanity that we all lost somewhere on the way in the last decade. As Rachel Botsman explains in her TED Talk back in 2012: “The currency of the new collaborative economy is trust”. You need to have trust in order to buy a product that is not new or lend your house keys to a complete stranger. In such terms, e-reputation becomes extremely important. Rachel says that reputation is a currency that will become more powerful than our credit history in the 21st century. Reputation will be the currency that says «you can trust me». Sharing economy companies started to understand the importance of trust in early 2013. Airbnb, for example,  introduced identity verification to its platform, this way creating transparency and the fear that users might experience when renting out from or to a complete stranger. Identification of the owner of a flat, along with reviews from the people who stayed there previously helps in creating their online reputation. However, the uncertainty does not only come from the side of a person who is renting a place but also from the owner of the flat towards the lodgers. Here’s where an issue of customer identification arises. As more and more of us around the world start to interact in the collaborative marketplace, there is a real need for quality and trust metrics for both the provider and the user of the service. Trust is an elusive concept, and yet we depend on it for our lives to function. A trust leap happens when we take the risk to do something new or different to the way that we’ve always done it. Do you remember when you first bought your airplane ticket online, or the first time when you traveled by BlaBla Car or renting a room through Airbnb. Those are all examples of trust leaps. In the 21st century, there’s a clear tendency of shifting from institutional trust to unknown trust. People are coming to a realization that reputation that they build online has value beyond the environment where it was generated. And that is what makes it so beneficial. In the 21st century, new trust networks, and the reputation capital they generate will probably reinvent the way we think about markets, power, and personal identity, in a way that we can’t even imagine.

Summary Many countries have trouble getting their citizens to vote during elections. Compulsory voting is a method able to increase voter turnout, however, it is only enforced in 10 countries around the globe. The reason for this is that many view it as a violation of freedom of speech and religion. Recently, while chatting with some friends, we stumbled upon the topic of elections. As we were talking, I noticed that out of all the seven countries represented at that table, mine was the only one where voting is compulsory. Now, I always knew before this event that there are some places in the world where voting is optional. I mean, it is hard not to notice when, during every single US presidential election, Instagram and Twitter feeds are filled up with celebrities posting #IVoted to incentivize people to cast their ballots. Nevertheless, I thought that this was the exception rather than the norm; and as it turns out, I was very much wrong. Out of all the countries in the world, there are only ten in which compulsory voting is enforced. I was very shocked discovering this, because in my country, Ecuador, there are very strict penalizations for those who fail to show up to vote on election day. In fact, the fine for not voting is $45 USD, a high figure when taking into account that the average salary is around 426 USD. Those who refuse to pay are unable to leave the country or get access to multiple public and private procedures. After this discovery I became very interested in the differences between the two approaches, after doing some research here is what I found. Countries that enforce compulsory voting generally view the election of representatives as a duty or a responsibility rather than a right. The arguments in favor of this perspective are pretty simple. For starters, many claim that mandatory elections increase the general acceptance of the results given that they usually produce a higher voter turnout. For instance, while the United States had an average voter turnout of 55.5% in the last presidential elections, Australia, a country that has implemented mandatory voting since 1923, generally had a turnout of 93%. This means that almost everyone’s or at least the majority of people’s perspective is taken into account on political matters. However, many also argue that compulsory voting fails to increase politically informed citizens and instead boost “Donkey votes”, in which people vote randomly because they are obliged to do so rather than because they are backing someone who they believe in. Moreover, many see mandatory voting as a method of avoiding “class bias”, given that the elder and wealthier groups in society are more likely to vote than their counterparts. As a result, they tend to be the most addressed on campaigns during the election period. Besides this, It has also been noted that once mandatory voting is implemented, the outcome of elections tend to swing towards the liberal and leftist side. In fact, former president Obama; who considered mandatory voting for the US back in 2015 (after a voter turnout reached a historic low of 36.4%), stated that “There’s a reason why some folks try to keep them away from the polls”. Some academics even claimed that voluntary voting creates a prisoners dilemma situation, in which many refrain from voting thinking that there are enough individuals with their same views and perspectives that will vote in their name, causing groups to become underrepresented. In addition, it has also been argued that forcing someone to vote violates freedom of religion and speech given that this last right inherently incorporates a person’s choice not to do so and that there are some doctrines such as Jehovah Witnesses or Christadelphians who prefer not to participate or remain neutral on political matters. However, this issue can be easily solved by allowing people to cast a blank vote. It is safe to say that both approaches have arguments in favor of their views. Sure, compulsory voting innately attracts higher voter turnout rates, which means that at least the majority of citizens had a say on the outcome of the elections. However, the benefits that this system brings to society are also limited by the fact that they do not conceive informed voters. So it all comes down to whether a country prefers to take most citizens into account, risking that a high percentage of them may not have all the information about the decision they’re making. Or a low amount of votes, yet more likely cast by politically engaged individuals.

We do not think often of economists as detectives, as we tend to leave exciting puzzles to those with the more exciting professions. The truth is that economists love mysteries, and that these mysteries pose many unanswered questions. In this realm of mysterious phenomena there is one puzzle that continues to confuse economists in recent years: the wage growth mystery. This is a popular name for something that has been happening in the US and in other (mostly European) economies since the Great Recession of 2007-2009: although wage growth is supposedly negatively associated with the unemployment rate, recent data fails to correspond with such prediction. In other words, while the unemployment rate has ‘recovered’ to a pre-recession low, the growth in wages remains stagnated, much to the discomfort of politicians and policymakers. For example, a labor market report made by the US Bureau of Labor Statistics showed that the American economy created 156,000 net new jobs in August 2017 and 2 million new jobs over the year beforehand. This has pushed the unemployment rate in the US below 4.5%, close to what is known as the natural level of unemployment (NAIRU), or full employment. Wage growth, given this unemployment rate, would be expected around 3.5%, but instead was around 2.5%. A recent report indicated that this mystery continues to baffle economists in the US, months after this report was published. Although these numbers do not seem like a big deal, in fact, the divergence between unemployment and wage growth contradicts one of the most fundamental macroeconomic models known to economists. The Phillips curve graphs a negative relationship between unemployment and inflation, wages included; if unemployment is back to its ‘normal’ level, why aren’t wages growing faster? A variety of explanations was given by economists in recent years in order to solve this problem: a poor inflation environment, the ageing of the baby-boomer employees, irregularities in the business cycle – all of which do not offer a definitive solution. However, a possible solution for this mystery may lie in the variables of the mystery itself, that is the changing definitions of unemployment. The definition of unemployment, according to the Bureau of Labor Statistics, is pretty simple. An unemployed person is someone who does not have a job and has been actively looking for one in the past four weeks. A simple definition, but also quite a restrictive one. It turns out that by defining unemployment so narrowly, various groups in the labor market are excluded and left undefined. Most notably, people who are long-term unemployed and people who are involuntary part-time employed. The former describes those who have given up looking for work and are, consequently, not officially considered unemployed; the latter describes those who are constrained in their number of working hours and would prefer to work full-time. Even though we would probably consider these individuals unemployed, they are simply excluded from the statistics of unemployment. What is even more interesting is the fact that both types of phenomena, long-term unemployment and involuntary part-time employment, continue to claim a large share of general unemployment more than ten years after the Great Recession. Economists have recently shown that the share of the long-term unemployed and involuntary part-time workers increased during the recession and remained high during its aftermath, even though general unemployment decreased. What does this mean? It means that we inadequately measure unemployment to construct the model relating unemployment to wage growth. It means that while general unemployment seems to have gone down in the US since the recession, various groups in the labor market have remained unemployed over time. People who are long-term unemployed, for example, find it harder and harder to return to the labor market as time goes by – they may become discouraged, or stigmatized by employers, or lose important skills. The Bureau of Labor Statistics estimates the percentage of total unemployed, including all marginally attached workers and involuntary part-timers as a percent of all labor force, to be approximately 8% as of November 2017. Some economists, like in this paper, concluded that with an updated statistic of unemployment, there is in fact a negative association between unemployment and wage growth. Or, in other words, a reconstructed measure of unemployment can in fact explain the weak growth in wages. Although statistics may vary, it is evident that both long-term unemployment and involuntary part-time unemployment maintain a strong influence on labor market dynamics and suggest a hidden slack unaccounted for by the unemployment rate. A possible conclusion is that alternative measures of unemployment should be considered when attempting to solve the wage growth mystery, even though the traditional measure of unemployment serves the politicians who claim that the economy has recovered since the recession well. Macroeconomists will benefit from a closer cooperation with labor economists if they wish to reflect the current situation in the labor market more accurately. A change in definition implies a further change in welfare schemes and in monetary policies; this is because the recovery from long-term unemployment and involuntary part-time employment is considered slower than from commonly defined unemployment. We must also consider the societal implications of excluding many de-facto unemployed workers from the official definition of unemployment. As underemployment increases, discouraged workers become even further discouraged and detached from the labor force, while part-timers find themselves in a poverty trap enabled by the lack of definition for their situation. Whatever discussion we are having, it is important that we continue to have it: the Great Recession influenced almost every economy in the world with devastating consequences for many. It is crucial that we continue to study the causes of such recessions and explore future adequate strategies for recovery.

According to the Dutch Central Bureau of Statistics, prices rose by average with 2.7 per cent in 2017, this is the second highest increase in prices of food over the last decennium. More strikingly is the increase in prices of healthy foods over the last decade, fresh fruit increased with 28 per cent, eggs with 37 per cent and semi-skimmed milk with 60 per cent. These are products that are considered healthy  by the Dutch Nutrition Centre, the average increase of healthy food was 22 per cent. In comparison, unhealthy products like beer, wine, canned goods and junk food only increased with 13 per cent. Where does this increase come from and what to do about it? A huge cause for the increase in prices of food is the climate change, due to the changing weather conditions many harvests fail. Think of the empty shelves of spinach last year, this will be something that will occur more often in the future. Furthermore, in long term different crops are probably grown on different locations due to the shift in temperatures. Another effect of the climate change is that governments and scientists are looking for other fuels than oil, namely bio fuel. One of the things they are trying out is the use of grains, corn and seeds. This increases the demand for this products even more and therefore heighten their price. Another unexpected effect is the effect of speculators on the market. They are not the primarily cause of the increase in prices, but they can heighten the effect of price fluctuations. These speculators buy long term contracts on the food market, in these contracts a specific amount of food needs to be delivered on a specific date in the future. Which is odd, because most of these contracts are made up before the harvest is done. Here lies the value of these contracts, these speculators hope that these contracts increase  in value so they can sell them with a profit. But these things mostly explain the overall increase in the prices of food, not specifically the major increase in unhealthy food. But we should look at it the other way, not as if healthy food increased more, but that unhealthy food increased less. The biggest cause for this is the decrease in price of sugar. In comparison with 2007, sugar became 10 per cent cheaper. Because sugar is the main ingredient of most unhealthy products, this partly explains why these products did not increase as much the healthy products. Another explanation is that unhealthy food is mostly produced in factories. Think of sauces, canned food, bags of crisps, an increase in production is not that costly. These reasons explain why prices of unhealthy food do not rise as fast as the prices of healthy food. The effects of these price differences are not surprising. Because unhealthy food is cheaper than healthy food, families with low incomes buy more often unhealthy food instead of fresh fruit or vegetables. When more people buy unhealthy food due to the huge price difference evne more problems arise. Healthcare costs increase due to the many health problems caused by obesity, think of diabetes and vascular diseases. Other negative effects of obesity on society are the costs of employees being absent due to sickness and the costs of permanent incapacity to work. Because the difference in price increases between unhealthy food and healthy food causes so many problems something needs to change. A possible solution is a tax on unhealthy and junk food. This increases the price of unhealthy food to the same level of healthy food. Therefore the price will not affect the decision about what to eat. For example, in Denmark there was a tax on food that contained more than 2.3 per cent fat. This tax on fat was only enforced between 2011 and 2013, but the effects were good. According to a research observing 2500 households, done by the University of Copenhagen and Oxford University, the consumption of foods containing this amount of fat decreased with 4 per cent. Whereas this does not seem much, their calculations show that due the reduction in fat intake the number of people dying from vascular diseases shrunk with 123 persons. Side notes of the researchers were that this tax was solely on fat, so people still ate too much salt and too less fresh fruit. Also people living near the German border would probably buy their groceries in Germany. Personally, I think a tax on unhealthy food is a good idea. When prices of unhealthy food  and healthy food are the same, more people will decide to buy the healthy option. Which is not only good for their own health, but also for society in the long run. Furthermore, the money obtained by these taxes should be put in subsidies for healthy food. So healthy food becomes cheaper in comparison to unhealthy food. This is of course very difficult to achieve, many companies will fight this or stop producing because of too little profit. But I do hope that in the future an arrangement like this will happen. The health of people should not be caused by huge prices differences forcing them to make unhealthy choices, this has to change.

As my Bachelor approaches to its end, I found myself reflecting back on the last years. Moving abroad for your studies is an amazing experience. Usually, it means having a lot of “new things” in your life – new country, new culture, new people and new challenges. I was only 16 when I first landed in the UK to start my IB programme at the boarding school in St. Andrews, Scotland. Rather a young age to begin an independent life. However, it wasn’t until 2 years later, when I moved to Edinburgh to join the university when I truly started living by myself. It wasn’t all easy-peasy lemon squeezy, in fact, there were times when it was difficult difficult lemon difficult, and those are usually things that you don’t talk much about. I want this article to be a revelation of what is it like being an expat (first in the UK and then in the Netherlands). I want to talk about the challenges that I as an international student faced when transitioning to what is considered to be “leaving a dream life.” I hope that many of you can relate and will share my feelings. So here’s my story. 1)    Homesickness Moving to a different country and culture altogether is tough. Probably one of the most common problems that any person who has moved abroad faces is feeling homesick. One of the most common and one of the most difficult to deal with, I suppose. Throughout these 6 years of being away from home, there were two times when I seriously considered moving back to my homeland. And it is very understandable. You get to go home only for a short period during the holidays. All you do is eat, spend time with your family and chill with friends. All of your troubles and responsibilities are miles away and you do not want to return back to an “adult life.” Suddenly your life back home seems perfect and you begin to question why have you decide to leave in the first place. Being entirely honest with you, I could have already been back in Ukraine if it wasn’t for my dad (who, I must say, is always supportive of my decisions). He told me one thing: “You can move back if you promise me one thing. You will not regret it after 5 years.” I couldn’t hold such a promise. In that moment I realized that, first of all, there were obvious reasons for me to move away, and secondly, the routine of everyday life will make me even more miserable in Ukraine. You need to remember. It’s justifiable: the academic workload and extra-curricular activities have their effect, and at times you cannot help wishing you were back home. Feeling homesick is okay. You are separated from people who you care about and missing them is normal.  Call your parents or your close friend when you miss home, but don’t let yourself down. Staying busy also helps. You just don’t have time for self-pitying. Moving back to your home country might seem like an easy way out of it, but would it really make you happier? 2)    Language barrier and cultural shock (not literally a shock, but still) Yes, yes, yes, I know. I cannot complain. I’ve been leaving in a country where English is not a national language, and still, I am privileged not to have a need to learn Dutch. You all know that you can easily make your life in Amsterdam, without speaking the language. Yet, there are circumstances when not speaking Dutch makes you feel very isolated and have troubles integrating. The Dutch are indeed very nice, however, I still feel like a fish out of water when I am surrounded by more than three Dutch students. What I have learned though, is that it comes from both sides. They also struggle to socialize with the internationals, which makes things even more awkward. A small funny detail, Dutch people have this eager need of getting in everyone else’s business (unlike Brits), which can get you rather annoyed at times.  Moreover, they have a certain code of unwritten rules and social etiquette that must be closely observed at all times (just like Brits, to be honest). I must say, I do have respect for this system but having not grown-up in such an environment, I still have a hard time getting used to finger-wagging and seemingly tattle-tale like behavior. Nevertheless, I love it here. You get used to never-ending ‘borrels’. Borrels are quintessentially gezellig, and gezelligheid is, of course, quintessentially Dutch. You get used to regular theft of your bike (at least that’s what happens to me). And eventually, you start to execute #proudtobeDutch behavior. 3)    Family issues I was lucky to find my second family here in Amsterdam. I appreciate it a lot because I can rely on them no matter what. Moving miles away from my real family, however, had both good and bad sides. Not having my parents next to me at all times, taught me to value them even more, value every extra hour spent with them. What I struggled with, though, is adapting back to their habits when travelling back home. When you live on your own, you obviously start to have your own routine and your own way of dealing with things. And it is difficult to switch to your parents’ habitude straight away. It is important to learn how to do it, though. After all, you are the one who moved away, their life stayed the same. Furthermore, I found it hard to get used to a fact that I am missing out on a lot of family events. Of course, Skype, Facebook, and other social media cannot replace your actual presence there, but at least they can help you to be a little bit closer. Do not forget – they also miss some important parts of your life. Trust me, your family thinks about you more often than you think about them. Your life here is full of events, people, interesting elements – it is full of colour. The lives of your parents are mostly about disturbance about you. To sum up, I have learned to deal with all of the challenges listed above, in my own way. And I concluded that challenges will always be there, no matter how far or how close you are to your home. One of the many things my mum warned me about, is that it is not going to get any easy after you turn 20. And yes, mum, you were so damn right!

I want to start this article off by getting something off of my chest: I am a bit obsessed with sales. I think the source of this goes back to my childhood days. My father has always been a genius at finding the best sales all around Istanbul, and I think it rubbed off on me a little bit too. Using the internet and store catalogs, we would find TV’s, couches, phones and anything else a family could need for ridiculous prices, and it was more so a bonding activity between us rather than just shopping for goods. I wouldn’t say I am a shopping addict, really. I am successful at knowing my limits and staying on course with my budget, and it is something that I have to be careful with since I am a university student with no real income. However, a nice looking pair of shoes for half the price always leaves me in a dilemma which usually gets me frustrated, but in the last few years I’ve seen clearly that this is exactly what companies are aiming for. Not just products that are on sale, but for any product that caters to my likes and interests. The main objective of a sales promotion is to increase consumer demand, which is crucial for the well being of a business. Products are being pumped out of factories and are filling the shelves for millions of stores all around the world, and in the era of marketing, stimulating market demand has become more of a science than a business plan for companies. So why exactly does a sale improve consumer demand? The easy answer would be to say that it is because the discounts make it easier for consumers to buy a product that they were not willing to pay the initial price for. However, it is a bit more complicated than that. When you buy a product at a discount, or when you receive a coupon for the discount, you are likely to experience a higher increase in your oxytocin (which is one of the hormones that are responsible for your mood) levels than you would by buying the product for the regular price. Buying a new product is supposed to make the consumer happy, and in the age of instant gratification, consumers are likely to resort to stress relieving activities, which makes them a primary target for companies to take advantage of. Production capabilities have never been higher, and this situation combined with the state of the modern consumer have created segments in which companies can specialize. While some companies focus on creating a brand that offered decent quality goods for very favorable prices, some companies specialize in creating differentiated products that are sold for premium prices, which create an opportunity for every buyer from every demographic to be intrigued by the idea of purchasing something new and satisfying that is in their price range. However, the satisfaction from buying a new product is likely to last for a rather short amount of time, and it must be the consumer’s priority to manage their finances in a balanced manner. While most readers of this article might be more informed and educated about the burden of debt and overspending, many individuals from even the most powerful countries are facing problems with poverty caused by being uninformed regarding credit card debts, bank credits, taxes or covering the basic costs of living for a whole month. Another factor that fuels the spending craze is the dazzling appeal of luxury being advertised very heavily through many mediums. Companies now have a broader reach to their customers thanks to mediums like the internet and specifically social media platforms. This situation causes problems for uninformed consumers, as they resort to activities such as taking loans from banks or filling up their credit card limits to degrees there they will not be able to eventually afford to get a taste of the “rich life”. The situation at hand creates a big problem for the “little people”. While universities and private schools may provide fundamental information to students regarding money management, the service they provide is not accessible enough for an important portion of the population, especially in underdeveloped and developing countries. Therefore, finding ways to educate the average buyer is becoming more and more important by the day, which is a problem that must be tackled by governments and organizations. In conclusion, because of the current shape of the society we live in, being an informed customer is becoming more and more important by the day. Therefore, the next time we find ourselves peeking through a shoe store that has a sale, we should ask ourselves: Do I really need that?

Some things in life are accepted without any questions, and most  of these relate to social norms. We never wonder why exactly we shake hands when we greet someone. Or for that matter, child marriage was common and accepted, until recently. The point is, society is malleable, and every now and then, there are disruptive events which change how society perceives certain norms or objects. Diamonds are a great example of how society can be manipulated into a certain kind of behavior. Spoiler alert: They aren’t as valuable as you would like to believe. The word “diamond” conjures up images of romance and luxury. An engagement is practically incomplete without the exchange of diamond rings. It has invaded pop culture, with the iconic James Bond film “Diamonds Are Forever ” in the early 1970s to Rihanna’s song “Diamonds” where she croons “…shine bright like a diamond…” It can be argued that it is a necessary luxury. And there is no question that they are expensive. Some might think because they are very rare and extremely difficult to mine. However, the story of why diamonds are so valuable, is a story of romance and engagement; romance with money and engagement with devious business practices. It is believed that diamonds were first discovered in Northern India, in around 3000 BCE. They were used as a medium of exchange, just like metal. However, it is only in the late 19th century that the value of diamonds rocketed to astronomical prices. De Beers is one of the most reputed and powerful companies in the diamond industry. Till the late 1980s, it controlled more than 90% of the world’s diamond production. This company was founded by Cecil Rhodes, a very controversial British magnate who was also an imperialist. He infamously remarked, “I contend that we are the first race in the world, and that the more of the world we inhabit the better it is for the human race” The history of the De Beers company, beginning from the late 19th century is one which merits attention, and proves the power of economic manipulation. Cecil Rhodes started his business by renting out water pumps to mining companies. After gaining considerable capital, he bought mines from two Dutch brothers who were called De Beers, thus the namesake company. In the late 1880s the prices of diamonds were going down in modern day South Africa because of the discovery of new mines. Mining companies were concerned about this, and decided to form a single company which resulted in the De Beers conglomerate, headed by Rhodes. Following that, the company strictly regulated the supply of diamonds. They had a single channel of supply, that is, all the diamonds they produced (including the production of its subsidiaries) were sold through one channel. Also, when Namibia and Botswana discovered diamond mines, De Beers entered into an equal equity partnership with the governments to ensure that they had control over the diamond production from these countries as well. De Beers started an aggressive marketing campaign, with the help of N.W. Ayer’s agency, in the late 1930s. Thus came the birth of probably the most iconic advertisement tagline of the previous century: “Diamonds are forever.” These polished stones were equated with love and romance, and the ad agency went as far as to give lectures at school to young girls, to reinforce the idea they were selling to the American population. Movie stars adorned the stone and they were marketed as “rings of eternity.” As society started to accept the concept that diamonds are indeed a symbol of love, and engrave love into eternity, De Beers strictly regulated the supply of diamonds, to maintain lucrative prices and make astronomical profits. The company had “sightholders”: Companies that were selected by De Beers and were offered fixed quantities of rough diamonds to be sold. Given the monopolistic hold over diamond production, this ensured that prices increased and the industry never collapsed. However, just as diamonds can be shattered, the company lost its control over the production of this gemstone in the last few decades. Companies in Australia and Canada refused to join De Beers’ single supply channel, thus presenting themselves as threats to the company’s power. This effectively reduced De Beers’ production control from 80% to 33% in 2013. Furthermore, the Anglo American Company bought over the majority of the company and is now led by the Oppenheimers. The next time when you want to buy a diamond as a gift, keep in mind that you are victim to a brilliant marketing gimmick. Diamonds are valuable, because we think they are. The inherent value of a diamond can only be attributed to its hardness as a stone, which is why it is used in industrial glass-cutting equipment. Jewelry retailers usually have a 200% markup on the stone, when they sell it to their customers, and are generally unwilling to buy it back from them. This would mean that they have to buy it at wholesale prices, which would mean that the gig of “Oh, the diamond I bought is so valuable” is up. It is time to realize that diamonds are not all they are hyped up to be. Get your significant other something which has true value, maybe a copy of their favorite album. Totally unrelated, I am a big fan of Eminem’s Marshall Mathers LP.

Growing up, I always thought that the United States was the most obese country in the world. Whenever someone discussed obesity, not only would the US be mentioned, but it would always spark a comical figure of a very fat guy in a t-shirt with an American flag print. Well, maybe a bit too hypocritical of me, Turkey is one of the most obese countries in the world at 32.1% of the population having a BMI larger than 30. Compared to the US at 36.2%, the gap is really not that significant after all. The interesting case here, of course, is how a developing nation such as Turkey with rather high income inequality and low GDP per capita has obesity rates comparable to the US, which is significantly wealthier. Several years ago, when I first started studying economics in high school, I looked into how exactly wealth was related to prevalence of obesity. First shock, of course, was seeing that the most obese nation on Earth was Nauru. It’s a very small island in Micronesia, Central Pacific, with about 10,000 inhabitants. Okay, maybe the United States is the second most obese country then..? Apparently not! Up until number 11, Kuwait, the list consists entirely of developing nations, with rates that are nearly triple the one of the Netherlands (20.4%). Nauru’s population is 61.0% obese, followed by Cook Islands and Palau at 55.9% and 55.3% respectively. Why is this the case though; how are these people from tiny island nations able to afford being overweight? The main reason behind this phenomena is the fact that even though poor countries are still poor, they are not as poor as they were before. Increased income across the world has it such that even the poorest right now are much better off than the poorest in the 20th century. Combine the increased income with technological advancements in food manufacturing and processing, and you have yourself the recipe for disaster: Processed food that is easy to consume and packed full of energy is cheaper to get, and people are richer than ever! Other than that, the modern trend of sedentary lifestyles due to most back-breaking labour becoming obsolete does not help Nauru either. For them specifically, the sudden discovery of minerals lead to a boost in people’s incomes. Dis-incentivised from working anymore, the people of Nauru started spending more on processed food, and lost less calories. Kuwait (37.9%, at 11th place, right ahead of the US) is similar to Nauru in the sense that they also prospered based on exploitation of natural resources, namely petroleum, and such faced similar changes in diet and lifestyle. Even though there are exceptions, the list’s top 50 is essentially dominated by developing African and South American countries, and several other island nations such as Nauru. This only shows the significance of the issue—developing countries are in need of a labour force capable of active manual labour. As we all know, tobacco products are very heavily taxed in order to reduce consumption and to reduce costs associated with tobacco consumption. Such taxes that attempt to lower the scale of negative externalities are called Pigouvian taxes. By taxing tobacco products, people demand less tobacco, and in turn reduce the direct negative consequences of tobacco consumption on both themselves and the healthcare system. Sugar taxes have come under the spotlight given the rapid increase in obesity rates not just in developing, but also developed nations. It’s not a new idea either, Samoa (47.3%) introduced it in 1984. Most forms of the implementation focus solely on sugary drinks rather than all forms of processed sugar, but even that seems to have a very strong effect: In 2013, the Mexican government introduced a tax on both sugary drinks and junk foods, and several recent papers in medical and nutrition journals have shown that these taxes did indeed reduce the sales of the taxed products. In turn, they can prevent hundreds of thousands of new cases of Type 2 diabetes, and many more heart attacks or deaths. One of these studies even goes to the extent to predict the amount of savings from this specific tax over the next decade: 983 million international dollars, nearly 10% of Mexico’s GDP. It seems that, similar to how developed nations have lower birth rates, education plays a very significant role here as well. Attempting to cut down obesity rates through one-size-fits-all attempts such as sugar taxes will likely not help in the long term: as soon as welfare and wealth increases, people will revert their diets back to accommodate more processed foods rich in fats and carbohydrates. A study by Abdulai found that, “…those who attained secondary and tertiary education had lower body mass indices and were much less likely to be overweight or obese…,” indicating that a combination of supplementary policies is necessary to combat obesity in developing nations. Contributing heavily to healthcare costs through direct or indirect complications, obesity can impact developing nations even worse than developed nations. If no action is taken against it, lower life expectancies and a labour force unfit for the type of labour needed to bootstrap these countries’ economies can hinder their development even further.

In political parlance and mainstream media alike, the economy is often presented as an entity in its own right. It ‘can speed up, slow down, improve, decline, crash or recover, but no matter what it does, it must remain at the center of political attention’ (Earle, Moran & Ward-Perkins 2016: 7). Like the demigods of Greek mythology it is whimsical and moody, but since it is all powerful, we have to bow to its every whim at all times. If we treat it with respect it will award us with plenty, but if we anger it by regulating businesses, implementing ‘excessive’ taxation, raising minimum wages or nationalizing banks, we will suffer its wrath in the form of loss of production and competitiveness as well as rising unemployment. We are so used to this narrative, that we hardly ever stop to reflect on how highly disconcerting the existence of such an entity actually is, as it implies nothing less than the creation of a monster. You would expect rational people in a democratic society to organize it in such a way that it best serves their needs and desires. And although capitalism may have served this goal once, it now is often experienced as standing over and above the society that gave rise to it while demanding obedience from its citizenry. If we serve it with great devotion and utter abandon, it may reward us with the revenue that enables us to pursue other goals such as equality, happiness, health, beauty or harmony with nature. Such goals thus become subservient ideals that always take second place on the list of priorities as we always have to make the money to buy these luxuries first. But as our demigod has an insatiable appetite, we will never feel we made enough money yet and thus will never take the giant leaps that climatologists, environmental specialists, political scientists, historians and sociologists alike are telling us are needed in order to save the planet and prevent social and political chaos. Societal goals have thus been completely disconnected from the goals of its citizenry. If you ask people what they value most in life, you get a variety of answers, ranging from health, security, respect, personality (loosely the freedom to be and develop oneself), harmony with nature, family and friendship, to leisure (all called basic goods by Skidelsky and Skidelsky 2013; cf. world value survey (WVS)). All these answers have one thing in common: they are literally invaluable, priceless and cannot be traded in markets. A society whose success is measured in terms of the value of products and services traded in markets can therefore never really take people’s deepest desires and values to heart. I, for one, have never heard anyone say: ‘My goal in life is to consume as much as possible no matter what’. Yet, we are to believe that the pursuit of the latter goal is central to a viable society and it is often added that if you feel ill at ease with this narrative, it is because you do not understand enough economics. Because if you did, you would see that ‘there is no alternative’ (known as the ‘TINA doctrine’). A society whose citizenry and politicians have largely fallen for the latter argument, can no longer be considered a democracy. After all, a democracy should try to serve the needs of its people, rather than bow to the wishes of an invisible idol that has goals that are different from and largely incompatible with those of the people it is supposed to serve. We have then entered an econocracy: ‘a society in which political goals are defined in terms of their effect on the economy, which is believed to be a distinct system with its own logic that requires experts to manage it’ (Earle, Moran & Ward-Perkins 2016: 7). The message is clear: how the economy affects society and the planet at large should not be of any concern to anyone but economists and if you do not speak economics, you should stay out of the debate. No wonder then that so many people feel powerless and complacent in the face of the many social, political and environmental crises that are happening  (cf. Schouten in Tegenlicht). But it doesn’t have to be like this. We can hold politicians and the economic experts advising them accountable by constantly asking them why the economy needs to grow, who benefits from that growth and how it will affect the environment, income distribution, job security or whatever other goal you hold dear and let your votes and public actions reflect your own values, rather than buying into the narrative that we have to make even more money and produce and trade even more goods and services, before we can even begin to contemplate the pursuit of higher and ethically more defendable ideals. The economy is a monster of our own making. We created the institutions supporting and nourishing it, we monitor it, we manage it and we have the power to put it to work to achieve our rather than its ideals. An economic expert telling you otherwise, is like a car mechanic telling you that your car does not need breaks or a steering wheel for it is perfectly capable to determine where it needs to take us if we would just leave it alone. That would be a very scary mechanic and s/he would not be in business for long. Why then do so many people accept this narrative from economists? It is fine for economists to offer their expertise to help keep the economy going, but the direction it is going in and the speed at which it is doing so, should be determined by the people rather than economic experts. Throughout the history of capitalism, we have dethroned kings and the clergy and ended fiefdom and slavery only to replace their reign with that of a new demigod that now presides over our minds and our lives and demands total obedience enslaving us all over again. But as it is a demigod of our own making, we can tame it, change it or kill it just as we have done with the other idols and institutions that prevented us from achieving our full potential. We can take the power back, but we have to be brave, critical of the status quo and stand up for what we believe in. The fact that most economists and politicians are not creative enough (or too corrupt) to envision an economy serving the people rather than enslaving them, does not justify complacency on the part of the rest of us.

When checking my bank account, I was surprised by the interest I had received over the year of 2017. It was not much – as the interest rate has been set close to zero by the ECB to stimulate the economy – but it was at least something. If I do not withdraw any money from my savings account, the amount will only grow over time. It is common sense that money grows. However, not everyone knows or understands how it happens, (does it have to do with interest, inflation, real income, risk, uncertainty?), but putting our money on a savings account yields us more than withdrawing money to treasure it under our mattresses. We have become familiar with the concept of growth. Not only the growth of our money, but also the growth of our economies. Newspapers report the expansion or slowdowns of gross domestic product (GDP), and companies try to expand their reach and production across the globe. Lately, a lot has been said about the value and sufficiency of our current economic system. We believe in growth: economic growth, capital growth, and technological growth. We use models of growth in economics, and we compare the growth of countries with each other. Probably most importantly: we strive for it.  Growth is an equivalent for success, whereas a decrease in production leads to recessions. These kind of crises withhold us from consuming, let us fear for our jobs and the security that our jobs provided us with before the crisis arrived. Economic growth has become the religion of the 21st century, but why do we believe so strongly in economic growth and why should we not? The belief in capitalism and infinite growth The belief in the current economic system dates from centuries ago, when the concept of ‘credit’ was first introduced. As Yuval Noah Harari describes in his book ‘Homo Deus’, credit enables humans to create an added value for everything that was traded or produced. Harari defines credit as the economic manifestation of trust. Thanks to trust, this capitalistic system in which investment is the central vehicle of growth, has led to the enormous growth of production and the development of new technologies. All this progress has led us to where we are today. There are a lot of wealthy states, and humanity as a whole has become able to overcome the three biggest problems of the past: hunger, disease and war. Of course, humanity has not solved these problems entirely, but compared to centuries ago, mankind is getting there. However, the system that brought us here has its drawbacks as well. The first big drawback is of course the fact that these problems are only locally solved. The wealthy nations have proven to be able to solve the problems of hunger, disease, and war, but there is still a big part of the world suffering from all three causes. The three problems are solved in the places where the money is. For example, investors put their money in pharmaceutical companies not so much because of their intrinsic motivation to do so, but because of the lucrative rate of return once a product is sold on the market. Also, a lot of economic incentives withhold certain parties from starting a war (a physical one, different from a trade war), as almost all economies around the world are dependent on each other. Furthermore, hunger is solved in places where the money is, as wealthy states often overproduce or import a lot. All these local solutions increase inequality. And although many economists argue that the invisible hand is there to eventually solve this problem of the gap between the poor and the rich, there might be other ways to tackle it. But then, if all three problems are to be solved all around the world: How are we going to manage this? BBC News reported in 2015 that if everyone would live like the average U.S. citizen, we would need a planet 4.1 times as big as the one we have. This is due to the huge amount of resources needed for the consumption of an ordinary American citizen. If that is the standard we are looking for, then we would indeed have a problem if all countries are striving for that same infinite growth. There are not only enough resources, but also not enough places to dump the waste that huge amounts of consumptions lead to. Kate Raworth, a British economist and professor at Oxford University, has developed an economic model that includes the social and planetary boundaries that we are facing called The Doughnut Model. The premise of the model is the balance between the social foundation and ecological ceiling. In order to find this balance, one needs to move towards a circular economy rather than a linear one. What Raworth also states, is that it is a misconception to strive for infinite growth, as nothing on our planet grows forever. On earth, everything grows until it flourishes, and that is exactly what economists and policy makers in her eyes should strive for. In our current economic system, we are overshooting and therefore damaging the environment. Climate change can be considered a good example of the damaging that our consumerism has caused. It is due to our own behaviour that it only takes time before climate change will lead to serious troubles, and it will mostly be the poor that suffer. Why are we not acknowledging and solving the problems then? A possible cause of the resistance as to why people and institutions are not changing their behaviour in order to create a more sustainable economy might be time-inconsistency. As people value the present higher than the future, it is important to realize that this leads to denial and a delay in actions. Just as is the case with climate change: a lot of people have known for quite a long time that emissions are boosting global warming, but it is only by now that solutions are provided by governmental institutions. Why? Probably because the consequences of global warming were not really noticeable before, and policies in which a lot of money has to be invested in something that people are not benefitting from immediately are not going to win the elections. As macro-economist Gregory Mankiw argues in Leonardo DiCaprio’s documentary ‘Before the flood’: people have so many things on their minds for the short term already that they simply cannot manage to worry about the longer term. It is thus easy to explain why people tend to behave time-inconsistently, and do not solve the problems caused by the deeply rooted economic system that is called capitalism. Maybe here lies the job of any government: looking forward. If governments could be able to nudge people into the behaviour that is sustainable, then circular economies would become reality rather than ideology. As Raworth argues: it is time for a change. The economic system that focuses on infinite growth is not going to be sustainable in the long term, as we need more resources than the planet can provide us with. Maybe it is time to create an economy in which people should be aware and be concerned towards the betterment of others rather than only their self-satisfaction. Maybe it is time to be guided in the right direction, and admit that some problems are near. If not, the growth will come to an end for sure. Click here to watch Kate Raworth’s TEDx talk about the Doughnut Economy. #DoughnutEconomy #Capitalism #KateRaworth #Behaviour #climatechange

Last week, NS announced a significant change with regards to their policy with the newly-rebranded NS Group Ticket (Groepsretour in Dutch). It is going to affect all frequent domestic travellers: the ticket will be applicable to only one way trips and thus will be relatively more expensive if you take a round trip. Although this tightening of rules can be anticipated from months ago, this still came as a surprise to many because NS had been extremely lenient with their previous policy adjustments. This could very well be the death sentence of the Group Ticket. As of the date of publication, the Group Ticket still allows you to form a group up to 10 different individuals as each will pay a minimum of €7 for each ticket. This will allow you to travel from and to two fixed destinations on the ticket, presumably for an indefinite number of times. The ideal scenario is that this group would help you to travel on a discount with 9 of your friends in a way that encourages people to use the train service during the weekend. However, since it is so difficult to form a group of 10 by solely getting your company together, there have been many Facebook initiatives that were created to bridge the gap and connect these people. As per the latest adjustment to the policy last year, all individuals of the group are required to board on identical departure and arrival stations. The current scheme allows a lot of freedom since members of the group could board the train at any time. However, the distinctive feature (which characterizes it as a Group Ticket) is that the administrator of the group has to collect every piece of information from other travellers willingly without getting any compensation. Growing frustrated with other unhelpful people of the group, many users are not keen on being the group administrator anymore and (along with everyone else) starting to become the free riders. This is where the situation gets really tricky. Acknowledging the inconvenience that people have to endure when forming a group, some took advantage of the situation and thus created a service when they would be willing to do the tedious work of filling out the details for everyone, but they take a surplus fee of 1 on each ticket. Making money is never as simple as that, isn’t it? While the extra cost of €1 seems minimal to the traveller (and why not since they might have otherwise paid €20 or €25 euro for a one-way trip!), this service has illegally received a huge sum of money because of the Group Ticket as they are not recognized as a legitimate service. A report indicates that there are approximately 15,000 to 20,000 domestic travellers each month that use this fraudulent service. NS, of course, acknowledged the situation and decided not to overlook the severity of it anymore. From January 15, 2018, the maximum number of people in a group will be reduced to 7, and all members of the group will have to board the same train. This policy will do its job in tackling the fraudulent practices of the Group Ticket, but at the same time disincentivizes the creation of travel groups which will directly interfere with the company’s revenue streams. What are the other options? I am not entirely convinced that such policy change would hurt the income of the company, if not they would be far better off financially with this new policy. The ideal situation for NS, from the financial point of view, is that the revenue lost from the number of NS group ticket travellers can be totally compromised by the increase in the use of OV-chipkaart and other NS subscription packages, which is of course possible. These alternative packages are much more expensive if you compare it to the Group Ticket, but if you are a frequent traveller, then some of the following options could be possible substitutes for the group service. The most costly subscription, Dagkaart, can be purchased for 50 euros at every electronic ticket counter at the train station (which costs around 6 to 7 times more than the Group Ticket). To put it in perspective, that is almost equivalent to a round trip travelling on the north-south axis of the Netherlands (e.g. from Groningen to Maastricht) on the original fare. This seems to be the least feasible option, considering that if you do not consider travelling to, well, at least 4 or 5 cities on a single day. The second option that you could choose is the Dagretour, as you have to buy the ticket online and not at the ticket counter. At first sight, this does look similar to some of the features of the current Group Ticket, as you could use that ticket to travel and come back to your original station within a day. You have to choose your predetermined departure and arrival when you complete the online form, and your ticket needs to be either printed out or imported into the NS mobile application. What separates these two subscriptions are that the Dagretour is only reserved for only one person and the fare will depend on the distance between your selected destinations. Apart from online purchases, there are also frequent discount periods for Dagretour throughout the year, as you could get the Dagretour on nationwide convenience stores such as Hema, Blokker or Albert Heijn for as low as a third of the original fare. The third one, and probably the most economical one out of the three, is the Dal Voordeel package. The most prominent feature of this ticket is the discount of 40% that applies to travels to all off-peak hours during weekdays, on weekends, and even more beneficial if you are travelling with three other friends. To subscribe to this plan, you only have to pay a yearly fixed subscription fee of €50. If you’re registering it in September, then you might get a discount of only €29 (only applicable for the subscription of the first year). This is a very good option if you do not consider to travel or commute too frequently from two distant stations. As a matter of fact, you can even save some money with this plan compared to Group Ticket in some, albeit really limited, cases. How is this going to affect the sales of the NS group ticket moving forward? Despite all of the seemingly positive financial benefits, NS should be watchful of some of their competitors. Their direct railway competitors, such as Arriva, Connexxion or Veolia, cannot exercise business practices where it can compete on equal terms with NS, however, since NS wins the right to operate exclusively in many regions of the Netherlands. Other transportation carriers such as other international shuttle bus services can be extremely provocative. For example, Flixbus has established their bus stops in major cities around the Netherlands, such as Amsterdam, Rotterdam, Eindhoven and Utrecht. The company offer their service at extremely affordable prices (to students), as long as you book your trip early enough. For example, a trip from Amsterdam to Rotterdam might only cost you as low as €5. Although the price can be slightly more expensive than the new 7-person group ticket if you’re travelling across two distant destinations, you will not have to endure the hassle of getting 6 other companions for your trip. So what now? The consumers certainly do not like the new policy, but I think a response from NS is what needs to be done right now. From the standpoint of NS, it does suggest that the changes are not merely tentative but will be here for the long haul.

Since the dawn of time companies have been utilizing influencer marketing as a means to promote their products or services. This type of marketing is a reaction to the need of individuals to identify with their idols. One of the most famous examples of influencer marketing is the campaign of Nespresso together with George Clooney which skyrocketed the sales of the brand and has made the ‘What Else?’ slogan known worldwide. However, with the rise of the internet and social media, influencers do not have to be celebrities anymore. This new generation of ‘social influencers’ consists of content creators who are active on multiple channels, such as Instagram, Youtube, blogs, etc. These creators put out daily content which is available to all their followers. Due to the accessibility and type of created content, consumers are able to relate to these creators on a more personal level. It is because of this personal connection that influencers can affect emotions, opinions, and the behavior of their followers, which creates a perfect opportunity for commercial exploitation. When looking at “The State of Influencer Marketing 2018”, a survey in which 181 marketers and agencies from a variety of industries participated, it becomes clear that influencer marketing allows companies to reach their target markets more effectively. In the survey, 39% of the participants said that influencer content “somewhat outperforms” brand-created content and even 12% answered that influencer content “greatly outperforms” brand-created content. The key in this performance of influencer content over brand-created content lies in the high engagement (likes, shares, comments, reposts, etc.) with the customer, which stems from the aforementioned personal connections with content creators. Still, it is worth to note that a high engagement does not automatically increase sales for a company. Thus, one of the challenges that the companies still face is how to accurately calculate the return on investment from utilizing these influencers. Nevertheless, companies are willing to pay a significant amount of money to utilize influencers on social media. With around 30% of the survey participants planning on spending about $25.000 – $50.000, 25% planning on spending $50.000 – $100.000, and even 19% planning on spending more than $100.000 per influencer marketing program, it seems that companies have fully embraced the potential of social influencers. Adding on to this, 46% of the participants run 2-5 programs per year per brand and 31% runs more than 5 programs per year per brand. Social influencers allow companies to penetrate a niche market through familiar faces instead of their corporate image. A good example of how influencer marketing is used on social media is the campaign of Samsung’s The Frame. The Frame is a TV for people who do not like the looks of normal TVs. When it’s turned off, it turns into a painting and blends naturally with the rest of your house. The product is very focused on interior design and because of its niche, the price of the product is at a premium compared to normal TVs. Due to the focus on this niche, Samsung decided to run the marketing campaign of the product through creators which are primarily active on Instagram and blogs. One quick look through the Instagram posts using the hashtag “#theframe” and one can see the type of influencers that are active in the markets of interior design and lifestyle. However, the rise of influencer marketing on online platforms has not come without its controversies. Due to the market of online influencer marketing still being young, it used to lack regulation. Surreptitious advertisement used to be, and still is to an extent, rampant on online platforms. This might not be that noticeable with smaller ‘micro-influencers’, but high profile influencers have received a backlash in the past. One of the influencers who received such a backlash is celebrity Kendall Jenner, who was found to have over a 100 posts on instagram promoting products without mentioning she had been paid to do so. As a reaction, regulatory boards, such as the Federal Trade Commission, have now decided that paid advertisements through influencers should be mentioned. This has to be either be mentioned in a full sentence or can be shown through the use of hashtags such as #ad, #paid, or #sponsored. Of course, whether something can be seen as surreptitious advertisement is kind of a grey area. Especially on a platform like Instagram, where users boast about the products that they use and their supposedly perfect lifestyle. With all the plans of growing investments in influencers on social media, one might mistake this exploration of online marketing channels as a replacement for the traditional channels, such as TV, radio, and printed ads. However, as these channels will remain great for reaching a big and broad audience, there should not be too many worries about shifts in advertising platforms. It is only natural for companies to find multiple ways of reaching their target market and the utilisation of social influencers is an exciting way to do so. P.S. Through a lousy Google search I calculated how much I would be able to earn through an Instagram post. However, with a mere $21 – $35 of estimated earnings per post, I don’t think I can make a living of being an influencer on Instagram (yet).