Italy’s economy shrank by almost 5% last year.

However, one Italian-based international business defied the trend and posted, unofficially of course, an 8% increase in profit.

That business is the Mafia.

For many years, Cosa Nostra has been suffering from declining market share as their traditional approach to organised crime has been superseded by the more direct methods of aggressive new competitors.

However, the underworld sector as a whole has flourished recently, partly as a result of official policies. While most sensible folk would rather live without the increased probability of premature death in this world and eternal punishment in the next, it cannot be denied that the hood does have some competitive advantages over the legitimate entrepreneur.

1   High taxes and tight regulation always benefit criminals – because they ignore them. This enables them to undercut the law-abiding, and the ability to provide cheaper goods and services is particularly attractive to consumers in recession.

2   Credit where it is due, many – but by no means all – criminals have an impressive “work ethic”. The irony is that this might have made them very successful in mainstream business. Yet it is the very fact that there is no safety net in the underworld that forces them to be enterprising and to work hard if they are to survive. 

3   Demand for many of the products and services in which organised crime specialises remains constant, even in recession. Indeed, demand for loan-sharking and some types of narcotic may increase as people become more desperate.

4   The public sector is obsessed with management by target. Since it is easier for law enforcement to prosecute ten co-operative law-abiding businesses for minor offences than to chase one slippery gangster, the authorities tend to go after the easy option – us – to improve their statistics.

The British supermarket chain Tesco has banned the wearing of pyjamas in their store in St Mellons, near Cardiff.

To those with a little local knowledge, this may seem like bad business. The St Mellons Tesco serves an estate in which unemployment was high even in the supposed boom – and where the inhabitants did not seem unduly upset by the fact. It is not a place where the wearing of nightwear in the day is unusual.

So Tesco’s ban might exclude a considerable segment of the local market from their shop.

Yet a little deeper local knowledge reveals an intelligent exercise in market positioning.

Although the name St Mellons is now associated mainly with the estate, St Mellons proper is a pleasant village immediately to the north. Properties in the estate use the name for marketing purposes. The affluent villagers do not like being associated with the estate: in a market positioning of their own, they have renamed the village Old St Mellons.

The St Mellons Tesco serves not only the estate but Old St Mellons and several other nearby communities as well. Although the residents of the estate are numerous, they are not the highest spenders.

So Tesco’s St Mellons strategy is to exclude lower spenders in order to make their shop more attractive to higher spenders.

This fits in with their national strategy. Britain’s famous obsession with class is largely a thing of the past, but a strange class system still prevails in where you go to the supermarket: the well-heeled can afford Marks and Spencer while the poorest go to Lidl. In between, Waitrose is seen as more prestigious than Sainsbury’s and Sainsbury’s ranks above Asda.

Tesco sees itself as ranking above Sainsbury’s, so the media coverage of its St Mellons decree is free advertising of its image as an upmarket retailer.

The irony is that there have been television adverts in recent years in which shopping in pyjamas has been portrayed as “cool”. This dates from the Coen brothers film the Big Lebowski, in which the slacker hero practically lives in his nightwear. It is another lesson of marketing that what looks cool in LA simply looks squalid in places like the St Mellons estate.   

Further to the previous post, it cannot be denied that President Obama’s State of the Union speech was disappointing. The markets agree.

Like so many things in life, it was not as advertised. Promises to do something serious about federal spending were drowned in a sea of new spending ideas.

It is not so much what he said as what he did not say. A year into his Presidency, we still have no idea what his economic strategy is. One day he talks populism, the next prudence. Meanwhile, he leaves the details of his main economic measures, the stimulus and healthcare bills, to Congress – with predictably chaotic results.

A leader – whether the owner of a small business or President of the United States – can persuade his people to put up with a great deal over the short term if he convinces them he has a good idea of how things can be much better in the longer term.

President Obama has the natural gifts of a born persuader. People want to believe him. He is a great salesman – but, at a certain point, even the best salesman has to tell the customer what he is selling.

It is not only America but the world which is crying out for firm, decisive leadership, and the American President is the man in the best position to provide that leadership – but, like any leader, he must show that he is “The Man With The Plan”.

On Wednesday, he was given the opportunity to outline any overall economic Plan he might have. He did not take it.

In a few hours, President Obama may make the defining speech of his Presidency. His State of the Union needs to contain more than the grand oratory of which he is the acknowledged master; he also needs to outline a substantial economic strategy for the next three-to-seven years of his Administration.

Last year’s “stimulus package” showed no such strategy. It was simply a huge spending bill made up of Congressmen’s pet projects. The American people are now sceptical about its benefits.

It is true that there have been benefits. It is practically impossible to spend money without having an economic effect. There are certainly individual businesses and jobs that owe their existences to government contracts.

However, it is notoriously unwise to base general assumptions on particular cases.

Maverick Congressman Ron Paul is one of those free thinkers, like John Redwood in the UK and Daniel Hannan in the European Parliament, who, without necessarily having all the answers, deserve credit for asking the right questions. He asks if the stimulus money would have been better spent on self-sustaining businesses, allocated by the markets rather than by politicians.

Every entrepreneur in the world knows the answer to that one!

Even the advocates of the last stimulus are effectively admitting that it has not lived up to their highest hopes, because they are proposing a new measure – another stimulus, of course.

The hints from the White House are that the President’s thinking is moving closer to Congressman Paul’s than to his old friends’ in the pro-stimulus camp. It seems the President might propose effective measures to curb government spending, reducing the deficit rather than increasing the stimulus.

If so, it may be an important sign that he is willing to tolerate greater economic discomfort in the short term in order to secure stronger growth in the longer term. That would be politically risky, but it would be the right strategy for America – and the world – and it would deserve our support.

The general contempt in which bankers are held is justified.

Their greed and stupidity were the primary and operative causes of the credit crunch. Greed, however reprehensible, is at least part of a banker’s job description, but the stupidity, coming from some of the cleverest people on the planet, is inexcusable.

Having been saved by a humiliating bail-out with tax-payers’ money, they returned to their old ways almost immediately. However, our objection is not to the “bonus culture” – payment by results is right in principle, if not always in practice.

History teaches us that we should always beware of politicians taking advantage of strong public emotions to boost their own popularity. The British government has imposed an unworkable “bonus tax” on bankers. President Obama triggered a slump on Wall Street by suggesting that America’s banks should be broken up.

When “celebrities” – including some of the dimmest people on the planet – start climbing on the bandwagon, calling for a “Robin Hood tax” on banks, it is time for more thoughtful people to set aside their own antipathy toward bankers and apply some calm logic to the situation.

Much as we may hate saying it, we need banks. The Industrial Revolution and the astonishing growth in the prosperity of the West over the last 300 years would have been impossible without the development of the modern banking system. If the West does not want big banks anymore, they will go elsewhere, taking their power and their money with them. Since countries like the UK have made themselves effectively uncompetitive in manufacturing, financial services are a large, increasing, and essential part of their GDPs.

This is why the Western governments held their noses and bailed the banks out in 2008 – and why they would be foolish to reverse that by driving them out now.

In recent years the polar explorer Sir Ernest Shackleton has often been cited as a good role model for business leaders.

His friend, fellow polar explorer, sometime chief, and sometime competitor, Captain Robert Falcon Scott has, by contrast, been unfairly neglected by management theorists. Scott is not perceived as ending up a “winner”: he died, with all four of his companions, on his way home after coming second, albeit a close second, to Roald Amundsen in the race to be the first men to reach the South Pole.

Yet to focus on this tragic end ignores the significance of a career of immense achievement, best described in an excellent biography by Sir Ranulph Fiennes – himself possibly our greatest living adventurer and, as another polar explorer, a man with a full understanding of the challenges Scott faced.

It also misses the point that it is precisely the serious risk of failure, and the consequences of failure, that make any great endeavour – be it a polar expedition or a business venture – worthy of reward.

As much as any entrepreneur, Scott found success on the very edge of what was previously thought possible. His first Antarctic expedition, a decade before his death, was a leap into the unknown. The later achievements of Shackleton and Amundsen were able to build on what that first expedition discovered, but Scott was the pioneer, the man who basically invented modern polar exploration by trial and error.

Indeed, possibly the most interesting thing about Scott’s career is that when he was selected to lead his pioneering first Antarctic expedition he had absolutely no experience of polar exploration.

He was notable only as one of the Royal Navy’s brightest young torpedo officers.

No selection board today would have made such a choice. Obsessed with covering their own behinds, and in thrall to the Cult of the Specialist, they would have insisted on paper “qualifications”, references, and a curriculum vitae of “relevant experience”.

Yet expertise in established thinking is a positive disadvantage when faced with the unknown. Scott succeeded precisely because he was forced to improvise and to rely on his open mind, his willingness to learn from mistakes, his determination to succeed, his ability to organise from scratch, and his energy, which galvanised those around him – the same gifts that have often enabled entrepreneurs to succeed where the products of selection panels have failed.  

An invitation from the Federation of Small Businesses, “the UK’s leading business organisation”, to a meeting to discuss regulation leaves us with mixed feelings.

On the one hand, the opportunity to hurl vitriolic abuse, to anyone who will listen, about the idiots in government who have landed us with such a damfool regulatory environment may well prove cathartic.

One the other hand, nothing will change. It will simply be a box ticking exercise for some government official who can then claim the business community has been consulted, only promptly to ignore all the concerns we have expressed.

Anyway, the Federation has asked us what five regulations we would most like to change.

Only five? Here are the first five that spring immediately to mind – if we think about it for more than a few minutes, we could probably list twenty or thirty.

But, if anyone else has anything they really want said, please tell us by commenting below and we will happily pass it on the FSB – the Federation of Small Businesses, that is, not Russian state security, even if the latter would probably be more ruthless at sorting things out.

1   To start with the Big One, paying tax may be a regrettable necessity, but the paperwork that goes with it is usually unnecessary. For most businesses, VAT forms are relatively simple: other taxes could easily be simplified in the same way, given the will to do it, and tax yield would actually increase.

2   “Data protection” might be a modern day necessity but there is no reason why compliance should be so complicated and burdensome. What’s the point of having a costly and complicated registration system when every business has to register? Better to have a simple set of rules by which everyone can comply easily and affordably.

3   “Generous” parental leave imposes a considerable burden on a small business: it makes it responsible for situations over which it has no control.

4   Disability access is a socially desirable objective – but, that being so, should it not be the elusive “society in general” rather than individual businesses that bear the cost?

5   Most of us accept the need for some health and safety controls, but the credibility of the whole system is being undermined by taking it to absurd extremes.

From all the loud complaints about the snow and freezing weather in Britain and parts of the United States over the last couple of weeks, you would imagine we were experiencing the sort of conditions that were familiar to Scott of the Antarctic or the Grand Army on the Retreat from Moscow.

The fact is that conditions were not that bad in absolute terms, but they were still severe enough to have caused havoc among people who were not used to them, and who had not made the elementary preparations that would have enabled them to cope easily. This is not necessarily to their discredit: only a fool or an extremely rich man – or an extremely rich fool – would invest in a snowmobile if he lived in an area which rarely saw snow.

Once again, we were reminded that our civilisation is a very thin crust. The slightest disruption in transport, telecommunications, or sanitation systems, or in the supply of power, food, or water, is enough to bring the complex machinery of our daily lives to a complete halt, and prolonged disruption over a large area can knock out a modern economy in its entirety.

Yet it was interesting to note that it is public services which were most likely to be suspended and public facilities that were most likely to be closed.

Private shops were more likely to be open and, if not always functioning normally, still performing a valuable role in providing the essential goods their local communities needed.

Of course, that is absurd generalisation and, as with all generalisations, there are many honourable, even heroic, exceptions, especially those public servants who went above and beyond the call of duty to help others.

Yet, as with all generalisations, it is still more true than not that those most likely to struggle through the snow to open their businesses were the owners of those businesses. They were also more likely to encourage their employees to do the same.

This is one more demonstration of the practically unstoppable power of human enterprise.

It also shows that, although our civilisation is indeed very fragile, we can take comfort from the fact that, if it ever collapses completely, within hours entrepreneurs will be building it again from the bottom up.     

It is but a small step from the sublime to the ridiculous – from Elvis’s 75^th Birthday last week to the Simpsons’ 20^th Birthday today.

Purists will point out that America’s First Cartoon Family actually originated on the Tracey Ullman Show two years before their own full season premiere in 1990, and, even then, the first episode was in fact shown in the run up to Christmas the previous year, but today is the official anniversary and who are we to argue with Fox?

Although mini-anarchist Bart was originally the focus of a couple of years of “Bartmania”, it is his father, Homer, who has proved the real “break out” character.

Homer Simpson is an “everyman” character with whom most middle-aged men, and their families, can identify. The dark side of the American dream, he is a lazy, overweight, self-centred – but not entirely selfish – salary drone who is unencumbered by much in the way of intelligence or drive.

Yet even he is not immune to the distinctively American belief that if you take your chances and work hard, you can achieve a better life. In fact, he has rather an impressive track record as an entrepreneur. He has founded at least three businesses of his own: Spring Shield, a security firm; Mr Plow, a snow clearance operation; and Compu-Global-Hyper-Mega-Net, an internet business.

No one, including Homer, ever knew what Compu-Global-Hyper-Mega-Net actually did, but then the same is true of a great many internet businesses, especially those established in the 90s, and their founders.

Homer has also enjoyed short-term success as a bootleg “Beer Baron”, as a film producer, as a travelling aphrodisiac salesman, as an experimental farmer, as an unlicensed chiropractor, and twice as a talent agent.

None of these enterprises lasted long, or left him with any significant profits in the end, but there is something heroic in the way he keeps trying despite his constant failures.

After all, he can take comfort – as can we all – from the fact that bigger idiots than Homer Simpson have succeeded in business simply by being in the right place at the right time with a very simple idea and the courage to act on it.  

The internet is changing.

Conspiracy theorists have not picked up on the fact that much of the initial technology would not have been developed without the US military, but since then the web has evolved into a wonderfully anarchic free market of ideas.

However, the nature of anarchy ensures that it can never last – and it usually ends in dictatorship.

It was the issue of technical compatibility that led to the first internet dictatorship: customers wanted convenience more than they wanted choice. So the call went up for a “Strong Man” to take charge – and the unlikely figure of Bill Gates of Microsoft was only too happy to take on the role.

The next problem was sorting the vast amount of information that was being generated by the fast-developing technology. Bill was eager to take on this job too, but people were already tiring of his grip on the technology. So the way was open for a new internet dictator, Google.

Now it seems that Google is in turn giving way to another internet dictator, the Chinese government. Google made a Devil’s deal when it set up shop in China, accepting the condition that it would co-operate with the massive state censorship there.

Now it has discovered that “someone” – no prizes for guessing – has launched a sophisticated cyber-attack, accessing the g-mail accounts of Chinese dissidents. Google is now considering whether it can remain in China.

While Red China is an extreme case, most governments are trying to exert control over the internet. It is relatively easy for a modern state to block access to politically inconvenient websites and to hack e-mail accounts. Even in the United Kingdom, the birthplace of liberal democracy, the government wants providers to keep records of private e-mails, so that officials can peek at them if they want.

Throughout history, technologies that have been developed by free enterprise have come under ever greater state control. That may be happening to the internet.

If so, this will not be the end of the internet, but it may mark the end of the pioneering phase that has given many of us opportunities we have come to take for granted.