The first point that I would raise is that the conventional economic view is that every economic agent is entitled, absolutely, to act with his (her) economic (self) interest as the basis of that action. Politics and economics are deeply entwined, and if the leaders of Saudi Arabia, Russia and Venezuela decide to act in a certain way, classic economics denies criticism from other quarters. The "mistake", with hindsight, may be identified, but at the actual time when the decision is made, criticism is not allowed within the "rules of self-interest".
The second point is that oil is the lifeblood of the OECD economies and is vital to "life as we know it" and particularly so in the more developed (G7) economies (especially for the military that we now depend upon). For 50 years now, the G7 (led by the US) has made a real hash of managing and securing this present-day vital resource. We did not give two hoots about "democracy" in the Middle East oil producing countries as long as the oil flowed east to west (and east to Japan). I suppose, in one sense, (although not the sense I understood him to convey) Stelzer is right when he says that "high prices are the least of America’s energy problems". The energy problems of the US and G7 will not be solved as long as we continue to rely on oil. The removal of the environmentalist’s objections to the energy infrastructure expansion and the construction of ports to increase the importing of liquefied natural gas will not remove the basic dependence on petroleum.
I suppose, if we could turn the clock back a hundred years or so (gunboat diplomacy and all that), events would be so much easier to manage for us "civilised folk".
Peter Barnard
Chester, Cheshire
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DAVID SMITH tells us that soaring energy costs will slow down the world economy, assuming this to be highly undesirable (Business News, last week).
For many years successive chancellors have taken the view that a fuel price escalator imposed on motor vehicles would be good for the economy. As with much else, it is the perception that matters, not the facts.
Anthony G Phillips
Salisbury, Wiltshire
KNOWLEDGE IS POWER: Is it not astonishing how mature businesses are failing to use customer information to manage their investor relations? You remark that some long-term investors are selling up on their Morrison shareholdings ("Morrison starts by converting staff", Business, last week). Surely if Morrison had in-depth information on its customers, their spending patterns and (most importantly) their potential, then it would be able to convince them to remain on board? Equally, demonstrating a good match between the customer profiles of potential M&A partners will also boost investor confidence.
But if you don’t have customer information in the first place, then you can’t play these tunes at all. It seems that the retail trade has polarised into the data-friendly and the data-averse. One former supermarket "superboss" famously remarked that loyalty schemes were a waste of time. Yet a rival organisation has now become the icon of bottom-line advantage through the intelligent use of customer data - mainly gathered through loyalty schemes.
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Not that just gathering the information is enough. You also have to invest in keeping it accurate and up-to-date. One organisation that we worked with told us that over 1m of its customer records were unmailable due to errors. That meant that they were missing out on a million cross-selling opportunities, and that their customer analysis would be skewed through their non-inclusion.
Myopic business managers are doing their firms a disservice by not recognising the many benefits of accurate customer information. Moreover, shareholders are being robbed of important insights into their investments. This issue is a priority for shareholder agitation.
Glyn Davies
managing director of computing services
Lloyd James Group
Welling, Kent