Monday, July 11, 2016

How Reg Varney ruined the British economy



The comedian Reg Varney was born 100 years ago today.

Normally one would celebrate such an anniversary, but I cannot forget an old post on Stumbling and Mumbling.

This demonstrated conclusively that Varney (who died in 2008) was single-handedly responsible for Britain's woes.

If you doubt me, read this:
His portrayal of Stan Butler did much to perpetuate the image of the 1970s worker as a bone-idle work-dodger; we forget today just how enormously popular On the Buses was. And this in turn might subconsciously have contributed to the popularity of Thatcherism. How many of those who, when asked by Tories in 1979 whether the working class had become too big for its boots, conjured up a picture of Stan Butler and so voted for Thatcher?
And this:
Reg Varney was the first man in the world to use a cash point machine. In doing so, he might have kicked off two effects. One is a tolerance of inflation. One of the drawbacks of inflation is that it forces us to economize on holding cash, as inflation erodes its value. We therefore make more trips to the bank, incurring what economists call shoe-leather costs - costs which are more significant than you might think ... However, the invention of the ATM helped make it much easier to get cash out of the bank. This fall in shoe leather costs for technological reasons offset part of the normal cost of inflation, which helped make people less intolerant of it. 
Is it really a coincidence that inflation began to rise as the cash point machine, as popularized by Mr Varney, became more widely used? I think not.
And this:
Before Mr Varney used the cash point, impulse buying of good or sessions down the pub were constrained by the fact that cash was hard to obtain. After that fateful day, however, the constraint came down. 
If you think of consumers as rational far-sighted maximizers the effect on spending should have been minimal. But if people lack self-control, the spread of the ATM would have raised spending. 
Maybe, then, Mr Varney is partly to blame for the low savings ratio.
Is it any wonder that some people did not care for him?

2 comments:

Stephen Barker said...

One thought is at the time the ATM was introduced a lot of adults would not have had a bank account and would have been paid in cash, Perhaps the introduction of ATMs made bank accounts more acceptable to employees and thus enabled employers to move from paying wages/salaries in cash, a major saving in time and money.

John R G Bland said...

My Father had one of those early cash cards supplied by Nationalistic West and it certainly was not straightforward. The card had holes punched in which probably made it unique to that account.

You put the card in and out popped a £5 note in a plastic container. That was all Nat West deemed you could have. The card was retained by the bank and it was sent back in the post.

It was however a good magic trick to my enquiring childhood mind . Was there someone sat the other side of the wall, placing £5 notes in those white hard plastic containers?