As the UK’s Chancellor of the Exchequer prepares his first budget, I thought it was worth reflecting on his nickname “Spreadsheet Phil”. Of course, as a financial modeller, I assumed that this was a compliment. However, a quick Google search showed that The Times reported that “Philip Hammond has a reputation for dull competence which has earned him the nickname Spreadsheet Phil”.
This led me to think about the UK’s relationship with science and mathematics. Here, it is not unusual for perfectly intelligent people to take pride in the fact that they “don’t do maths”.
Indeed, the other day I heard Ken Clarke on the radio stating “I’ve never had a mathematical thought cross my mind” and “I got through additional maths at O level learning by rote and …. I wiped it all from my mind a week later”. Of course, Ken Clarke has a well-developed sense of humour and self-deprecating style. However, bearing in mind that he was the UK’s Chancellor of the Exchequer from 1993-1997, it does seem somewhat alarming that he takes a perverse pride in being innumerate.
In his book, Innumeracy, mathematics professor John Allen Paulos explores widespread mathematical illiteracy and its consequences. The book covers proportion, probability, logic, irrational obsessions, pseudoscience and mathematics teaching. Paulos cites poor education, psychological blocks and misconceptions about mathematics as causes of widespread innumeracy. He also notes that “a discussion of informal logic is as common in elementary mathematics courses as a discussion of Icelandic sagas”.
Spreadsheets, models and mathematics are all about logic, creativity, organisation and the search for patterns. These are all essential life skills: since ancient times people have tackled problems such as how to transport a wolf, a goat and a cabbage safely across a river in a boat which can take one passenger at a time. Financial modellers should be able to solve this puzzle easily: such logic should underpin all spreadsheets. And indeed, if rigorous logic was applied to all financial models, then they would not be plagued by circular references and iterative macros.
I look forward to the day when it is a compliment to be called Spreadsheet Phil.