The Dardanelles, a Liberal endeavour?

I described recently discovering Violet Bonham-Carter's lost classic of Edwardian political memoirs, Winston Churchill As I Knew Him.  I sat on the edge of my seat (figuratively speaking - I was reading in the bath), as she described the rising crisis in Ireland, with the Conservative leader inciting troops to mutiny, and finally the run-up to war.

Until then I hadn't understood, before I read the book, how much Violet and the Asquith family were involved in the Dardanelles campaign, with her brothers and friends on the frontline, utterly committed to it.

History has condemned the Dardanelles escapade as an insane, wasteful and disastrous sideshow, and so it was by the end. But when Churchill and Kitchener first put the plan to the British War Council on 5 January 1915, it had a freshness and boldness about it which seemed then to have the potential to change history – if it could be done quickly.

It was already becoming clear to the more enlightened members of what was still a Liberal government what trench warfare and stalemate would mean on the Western Front in terms of lives lost and ruined. Churchill gathered a group of forward-thinking allies who believed they could see a way to avoid the nightmare, forcing the narrows with old battleships followed, if necessary, by a landing by troops – seizing Constantinople and opening a way to re-supply the struggling Russians.

It was a strategy designed, at one stroke, to unite Italy, Greece and the Balkans on the allied side, to knock Turkey out of the war – and avoid the catastrophic loss of life on the Western Front that seemed all too possible.  It was, in this sense, the failed Liberal alternative to the mass slaughter of the trenches.

But everything depended on speed, and – despite backing from Asquith – the services dragged their feet. The Russians vetoed the involvement of Greek forces. The First Sea Lord, the energetic, ancient and difficult Lord Fisher, vacillated back and forth in his support. Slowly – far too slowly – an Anglo-French naval force began to gather on the Greek island of Lemnos, in the windswept natural harbour of Mudros.

Next year will see the centenary commemoration of what came next, and I hope to be there.  Because my own family was involved in one of the stranger sideshows.  My cousin, Courtney Boyle, won the VC in command of the submarine E14, the first allied submarine to make it up the Dardanelles and into the Sea of Marmora, and to return intact.

The adventures of E14 have been neglected by historians, partly because Courtney was exceedingly shy and retiring and partly because he was over-shadowed by the exploits of E11, which followed him in.  He managed three tours of duty, under the most intense pressure, in submarines which lacked all but the most basic equipment.

His successor in command, Geoffrey Saxton White, also won the VC postumously, also in the Dardanelles, in 1918, when E14 was lost.  The wreck was discovered last year by a team of Turkish divers who have devoted themselves to the history of the naval campaign.  That makes E14 probably the only submarine in the world where both its commanders won the highest national award for bravery while in command.

In fact, it deserves a book - and I've now written one.  It is published as an ebook by Endeavour Press and is now available, either for Kindles or PCs, for £2.99, and it is called Unheard, Unseen (a quotation from Kipling, incidentally).

When I write history, I try to paint in the context - the broader background and the very specific lives.  And I am enormously grateful to the Submarine Museum for pointing me in the direction of a very rare magazine, the Maidstone Muckrag, published by the officers of the Eighth Submarine Flotilla in Harwich, form 1914-16 - which allowed me, I hope, to bring the peculiar lives of these First World War submariners to life.

I am called after Courtney Boyle.  I have some of his papers.  I inherited his dinner suit, which fell to bits eventually and was used to cover my credit card wallet.  Ninety-nine years after he set off into the straits, his will written and expecting never to return, I felt he needed some recognition.

Why monoculture means more debt

I spend two wintry months in Great Barrington, Massachusetts, in 2010, based at what is now the Schumacher Center for New Economics, and playing John the Baptist for the institution that eventually emerged as the New Economics Institute.

One of the people I met there, and who came to my lecture on the future of money in the white-painted church in Stockbridge, Mass. one snowy night, was a really radical and fascinating journalist called Judith Schwartz, who has specialised in writing about new ideas in economics in the American press.

I have been reading her new book, published in the USA, which describes her journeys across America meeting people in the forefront of "unmaking the deserts, rethinking climate change, bringing back biodiversity, and restoring nutrients to our food".  It is called Cows Save the Planet and other improbable ways of restoring soil to heal the earth.

I can't recommend it highly enough, partly because it is so hopeful and partly because this is the kind of journalism I find most exciting: interviewing people who have not only seen the future, but are putting it into practice.

This is a book that is partly about the Original Sin of American agriculture - the habit of exhausting the soil and then going west to exhaust some more.  It afflicted farmers right back to Thomas Jefferson.  It depleted the forests, brought settlers into conflict with native Americans and, worst of all, it led to the Great Dust Storm and similar disasters.

Some of the latest thinking about the nutrients that are naturally present in healthy soil (but not depleted soil) are highly controversial.  They are instantly recognisable to some of the practitioners of organic farming or permaculture, but they are still a million miles from the mainstream - which is trying to boost world output using chemicals and GM foods, and the soil is still depleting.  The point of contention is whether soil is a far more complex organism than is currently understood.

I learned two things from this book that are still making me think.  One is the problem with monoculture, which is the approved model for developing countries.  This is Jay Fuhrer from the Natural Resources Conservation Service in North Dakota:

"It's been our observation that, as you tend toward a monoculture, your input costs go up and soil problems go up too.  As you move toward biodiversity, the input costs go down and symptoms go down.  A monoculture grown every year with high soil disturbance reduces the role of the soil to just holding the plant upright."

That explains a little why soil requires more and more inputs, and food production gets increasingly expensive and more difficult to carry out on the small scale that is most productive (see previous blog on this).

Judy has tried to link the crisis in economics with the crisis in the soil and she chose a quotation from 1936 to illustrate the point (G. T. Wrench, from Reconstruction by way of the Soil):

"The stark fact that appears now, and which wrote itself across the Roman empire, is that debt and taxation increase as the soil declines."

Why radicals should welcome a royal baby

"Those who pour scorn on the royal baby frenzy are being clever elitists who despise the feelings of the less clever …. and reductionists."

So says Bryan Appleyard, as ever hitting the nail on the head. Though in this case the nail he was aiming at was the head of the Archbishop of Reductionists, Richard Dawkins, who tweeted: "I’m patriotically proud of British achievements like Shakespeare, Darwin & DNA fingerprinting. But royal baby nothing to celebrate."

I agree with Appleyard.  Dawkins is being snobbish, but then the purpose of the Positivist wing in UK debate is to boil everything down  to its constituent chemicals and discover that there is nothing of significance about them.  Religion, royals, saints days, osteopathy.  Let's cling to our birthdays - they are next on the list!

Why are royal babies different from other babies, asks Appleyard rhetorically?  This is his answer:

"Because, I am afraid, of the use, derived from history, pragmatism, sentiment and sensibility, we make of the royal family as embodiments of the metaphysical – as opposed to the merely political – properties of the state. This is just the way we do things and it works..."

I am a monarchist for two other, rather pragmatic, reasons.  The first is that, not only do we need the metaphysical - it adds a vital spice to life - but we particularly need the trappings of monarchy in the UK, because it can be a bastion against extremism and intolerance.

You can't help noticing, over the last century, that former empires which lose their monarchy very rapidly became prey to fascist forces - the Germans, French, Spanish in particular.  Monarchies are safe conduits for intolerant nationalism.  They allow us to be patriotic without finding that the place has been taken over by proto-UKIP types dreaming of empires long gone and locking up those who look a bit different.  They are forces for inclusion and tolerance.

The second reason follows on from that, because monarchies are different.  When they work (and ours works), they are not symbols of privilege - they are symbols of equality.  They render everyone from bank CEO to prime minister equals under the crown.  They are a potential antidote to the widening inequalities, and against the rising power of the financial elite.

They are that because they represent an institution with its roots back to Alfred and Cerdic and possibly before.

In the European tradition, right back to the feudal system, they stand above the government as the guardians of the poor and powerless.  When the peasants rose in revolt in 1381, they were doing so in order to appeal to the king (a fat lot of good it did them, it is true).

That is why former Liberals like Hilaire Belloc became monarchists, because he felt that France (in this case) needed that supra-national authority.

In our own time, what this means is that we desperately need some supra-national institution that is not sponsored by corporations, or governed by political spin - and the monarchy is almost the last institution to have remained un-nobbled by Google or McDonalds or Barclays.  If you think a presidency would be immune from Goldman Sachs, I think you are dreaming.  The vampire squid has no depth.

All this world-weary snobbery about a royal baby seems to me to be upside down.  Or are these people really worrying about a symbolic deference, when the real source of inequality - the financial power of the new elite - goes untackled?

So there we are.  Call me old-fashioned if you like.  But a royal baby spreads a little magic, and by doing so, it inoculates us just a little against fascism and corporate control.  

When virtual means 'not terribly good'

I sometimes feel I am the little boy in the Emperor's New Clothes.  I am  probably flattering myself outrageously in this, but a wave of Emperor's-New-Clothes overwhelmed me as I listened to the report on internet pornography yesterday.

The Prime Minister, who is clearly keen to have some kind of bust-up with the internet search engines - and I have no problem with that - has agreed with them that there should be a moment of decision in every household whether internet filter controls should be set on or off.

I agree with him.  My children are encouraged to search the internet for their school projects, and it is all too easy for them to stumble on, or dare each other to find, stuff I would prefer them not to see.  But why the assumption?  Whoever said that the internet filters work?

When this first bothered me, I spent a great deal of time trying to turn on the internet filters provided by my provider (AOL).

AOL is admittedly the most useless organisation it has been by misfortune to get myself involved with, so this may not be typical.  But I did finally work out how to turn on the filters.

I did a few experiments with it just to make sure they worked, and found they allowed me to view pretty much anything - but for some reason they drew the line at Google and blocked it.  I gave up but then found I couldn't change the settings back.  It was a frustrating business, but that is AOL for you.

But I wondered afterwards whether this was the basic problem about so much political debate: all the assumptions are that the measures, the institutions and the solutions they are arguing about actually work - whereas anyone who spends much time on the frontline knows perfectly well that they don't.

The internet filters are a case in point.  I don't know if they work or not, but my own experience suggests it is a complete fantasy - a version of the other meaning of the word 'virtual', which is not quite.

Mainstream public services work because of the commitment of the frontline staff, in schools and health centres, demonstrated every day - and often they have to resist or occasionally flout the procedures to make things work at all.  But the institutions designed to help people are often entirely dysfunctional: the job centres which can't help because of the screeds of procedures, the housing repairs services based on the approved disconnect between back and front offices - so many of them rendered virtual by targets and payment-by-results contracts.

What really makes things work is human beings, committed, brilliant and able to make transformative relationships.  Yet the political argument is so often about institutions or regulations that, to anyone outside Westminster, quite obviously serve themselves.  More on this, and some solutions, in my book The Human Element.

So much of modern life is taken up by this disconnect, the rhetorical gap between appearance and reality.  Both internet providers quoted on the BBC used the same vacuous phrase to describe their attitude to child pornography - 'zero tolerance'.  Yet despite this zero tolerance, the internet is clearly awash with it.

By coincidence, the next item on the news was the criticism by the government of ATOS, their disability evaluators, because as many as a third of their assessments have been overturned on appeal.  ATOS said that they were sorry "when we do not meet our own high standards".

Why do we put up with this kind of demolition of the language by cliche?   High standards and zero tolerance?  I'm tempted to exclaim - do we look like idiots?  But I fear we probably do - years of listening to this corrosion of language has undermined our ability to see clearly.  At the same time, years of reducing services and institutions to numbers have rendered them virtual, in other words: not terribly good.

Next time we argue about the cost of public services, can we discuss what works and what doesn't?  Because that discussion comes before the argument about costs, or it should do.

When politicians deliberately blind themselves

I structured my book Broke: Who Killed the Middle Classes? like a whodunnit, and I've been fascinated that reviewers, including those amateur reviewers on Amazon, have begun to apologetically give the game away.  Who did the deed?  The middle classes themselves apparently.

The reason I'm fascinated is that, while there is more than an element of truth about it - the middle classes cheer-led the disastrous processes which destroyed them - that wasn't quite the solution to the conundrum I had in mind while I was writing it.

In fact, if anything did for the middle classes, it was the decision by Geoffrey Howe and Nigel Lawson to do away with exchange controls in 1979, without putting in place any mechanism to ration the amount of money pouring into mortgages - which is why this generation of middle class home owners will be the last.  More about this (and more people who wielded the hatchet) in Broke.  But it puts Lawson firmly in the frame.

I listened to him on Any Questions this last weekend from Bridport, and felt I could discern an important clue about why things have gone the way they have for the middle classes.

Answering a question about the decision to grade primary school pupils, he came out with a slightly portentous but overwhelmingly true political maxim: it is never a good idea to suppress the truth.

This is absolutely right, though the objection to testing in primary schools - though I'm not sure this applies to the present plans - is that it obscures a more fundamental truth.  But let's leave that on one side.

The reason I remembered this maxim is that it came immediately after Lawson's exchange with Paddy Ashdown about shale gas, where Lawson laid down the law: it is quite impossible, apparently, for fracking to affect the water supplies.

When Paddy queried this, Lawson said: "It hasn't happened anywhere in the USA.  Name me a site, name it."

Paddy, of course, couldn't name one because he had quite reasonably not prepared for such a boneheaded approach, but he might have looked at the so-called 'List of the Harmed' for a list of sites and individuals claiming that they have suffered from the shale gas industry.

The problem was not that Lawson was wrong.  I don't know the results of the class actions against fracking. The trouble was that he had adopted the politician's response to inconvenient truth: he denied it was possible.  The logic was pretty clear: fracking is harmless, therefore there can be no examples of harm.

This is the way that governments tend to think, and especially centralised ones like the UK where the administration is to some extent protected from local evidence to the contrary.  Beef is safe, therefore BSE is impossible.  And the dangers of this approach, as Paddy Ashdown said, is that no precautions are taken either.  No action at all to tackle problems, of course, because they are impossible.

The worst example has been the way the GM industry has pursued small or organic farmers who complained that their seeds had been contaminated by GM genes.  They were taken to court for patent infringement.  Because contamination was impossible, therefore any evidence must be fraudulent.  It is still going on now.

This is what the philosopher Karl Popper was talking about when he coined the phrase 'the open society', where people were free to point out inconvenient evidence to the central state.  Open societies are more effective because they see things clearly.  As Popper put it, they "set free the critical powers of man".  That is the huge advantage of localism over centralism: they see the inconvenient truths and accept them - without having to go through a generation of blind government resistance to what ought to have been obvious from the start.

The real task perhaps is to set free the critical powers of Nigel Lawson.

Why Moshi Monsters are moshing us all up

I have lost count of the number of times Mind Candy, the company behind Moshi Monsters, gets mentioned in the business press as the great hope of UK business.

Apparently 75 million children have signed up worldwide, and there was its founder filling the 'business person' slot to comment on the final round of The Apprentice.

Well, I'm not a fan.  In fact, this is the kind of blog post you can only really write over the age of 55 (which I now am) so please be understanding as you read it - but my feeling is that, if something quite so vacuous and ephemeral is the great hope of UK business, then the situation is worse than I thought.

Let me give a bit of background.  I rigorously control the amount of time my children spend online, and will continue to do so until I lose the ability (my oldest is nine).  I'm not the only parent to worry about what constant screentime does to their creativity and imagination, but I also resent the waste of time spent fiddling with computer games.

Yes, I am puritanical about that, but I'm not puritanical about everything.

I also resent the complexity imposed on them by companies like Mind Candy.  The alphabets of different passwords and screennames, the screeds of personal data they require, the irritating way in which they stop working unexpectedly.  The way they leave my children in tears of frustration every time they are allowed to waste a bit of time on them.

Do I fit the profile of somebody the geeks really love to hate?

But then, can you find anything exciting about Moshi Monsters? They are one-dimensional characters, with no development, no imagination, no scope for offline play.  The whole caboodle is set up to encourage passive consumption of the most mindless kind.  Strip away the first layer and there is nothing there at all.  It is a glitzy, shiny vacuum.

It is fake fake fake, designed to keep my children passively indoors, dreaming of spending money.  The great hope of UK business, at the expense of my children's lives?  What does that say about us?

I also resent the way the schools force my children online, to do their homework or read books.  I understand that this may be a way of getting boys to read, but has it occurred to the educationalists that boys are not reading because they are already spending too much time addicted to online games?

I don't want to sound self-congratulatory about this.  It isn't easy.  I'm not even sure I'm right about it.  But I did have a peculiar experience last week which made me think about it.

I was visited by two very nice ladies from the BBC to interview me in the middle of the huge Spa Hill allotment site.  "So this is where you live your Swallows and Amazons life," said the producer, as she came in.

An hour later and a great deal of verbiage from me had gone on their recording machine, and we were making our way through the gate.  There was a little scream from the producer, and a flurry of sticks, and there were my children, leaping out of the long grass, their faces painted, wielding bows and arrows.

I was cross with them for shooting at guests, but I thought about it afterwards.  I'm glad at least that they weren't indoors, wired into Playstation 3 or struggling to remember their tenth password for Moshi Monsters.

Why fracking will turbo-charge the green movement

Scientists suspected a link between asbestos and lung cancer as early as 1918.

The news that exposure to asbestos fibres might cause cancer were confirmed in a series of medical studies in the 1920s. But it was a test case in the US Supreme Court in 1969 - half a century later - that impacted on the money men and the politicians.  The result was the cause of the near collapse of the Lloyds of London reinsurance market in the early 1990s, and the scandal which I wrote about in my book Broke: Who Killed the Middle Classes?

The case concerned a former asbestos worker called Clarence Borel, and was brought by his widow, Thelma. He had been told so little about the little white asbestos fibres that were to kill him that he used to bring them back to decorate the Christmas tree at home.

The Supreme Court found in favour of Thelma Borel, and as a result, the asbestosis claims began to mount and the ultimate insurers – those with the unlimited liability – turned out to be some of the Lloyds syndicates which specialized in reinsurance. In 1979, the US courts ruled that the insurers were liable for all the years between when the workers were exposed and when they fell ill.

I tell this story because it illustrates how long it takes for the dangers of any profitable process filtering through to the policy-makers and financiers.  In the case of asbestos, they were able to finesse it for half a century. Thanks to global communication, it won't take so long this time - but it seems to me highly unlikely that the damage by fracking won't beat the damage from asbestosis by a long way.

The costs in compensation will eventually be huge, but it is the political shift that concerns me here.

That makes yesterday a surprisingly important day.  So you might as well remember the date, 19 July 2013 (also, by the way, my father's 80th birthday). It was the day that the coalition announced tax breaks for companies to bring their shale gas mining or fracking techniques to the UK.

As a result, it will turn out to be the day that marks a major radicalisation and popularisation of the green movement. It is the day that will change everything - when every politician will be asked in a decade or so: where were you? What did you say?

Of course I may be wrong, but the series of class actions in the USA against the shale gas industry suggests that I'm not. In any case, for months, or maybe years, nothing much will change.  But the first health scares, the first scandal of poisoned children or unborn children, will change everything.

Because the UK is small and densely populated. You can't pump millions of gallons of chemicals for each shale site, especially an inflammable and poisonous chemical like alpha-methylstyrene, under ground in the UK - and certainly not London, Boris - without it turning up in the water supply, then the food we eat, and then our bones.  You can't do it without it affecting children's health.

The people who fondly believe you can are likely to be fantasists, dreamers - and politicians.

Not to mention the earthquakes.

Then we will ask who did the long-term studies on the effects on the water table, and find it was barely carried out at all. We will also ask why the polluting companies were given special tax advantages, and will find it was to delay for a few more years the investment that was required in renewable energy.

We will draw parallels with the rise of asbestosis, where the basic effects were known by 1918, and nod our heads wisely and miserably.

The green movement is currently stuck. It lacks the language to break out of its small coterie of middle class supporters. It is politically negligible. But when the health of people's children is at stake, everything changes.

Then people will say that everything in this country comes from the soil, the groundwater and the rocks below, and will ask the politicians responsible why there was so little debate, and why they have such a miserably narrow time horizon that they trash the land for a few more years of gas.

And the politicians will start looking back at their diaries and wonder a little who was right.  And finally, exasperated, they will say: but nobody said anything at the time.

It won't actually be true.  The truth is that they said nothing themselves.  No questions, no debate, no challenge.  So remember where you were yesterday - it could turn out to be important.

The downside of the pupil premium

Nick Clegg has announced that the pupil premium is rising to £1,300 per pupil per year in primary schools,  which is a major investment in disadvantaged pupils and a powerful attempt to shift the huge privileges that flow the other way.

It is a definite achievement for the Lib Dems in government.  I'm not quibbling about it.  But there is a worry about the pupil premium and it is this.

It has twin objectives.  The first and simplest is that it makes money follow the disadvantaged pupils rather than the other way around.  As long as the schools spend the money effectively - not on huge video screens by the main door as my children's school has - then this has to be an overwhelmingly good thing.

But there is another more subtle objective: to provide some motivation for the good schools to accept pupil premium pupils.

This is important because the basic pattern remains that the better-off tend to congregate in the best performing schools, giving wealthier people a better range of school choices. 

Those more disadvantaged pupils are often excluded from the best schools simply by high house prices in the catchment areas of the better schools, but also because the league tables provide incentives to schools not to take them - they regard them as a risk to their position.  Most pupil premium pupils are in the less successful schools.

The official response is that policy-makers must shift where the capacity exists by getting the best schools to expand, and by replacing the worst. But there is resistance to expanding among the best schools, partly because they don't have the space and don't want to sacrifice their playgrounds or green spaces - quite reasonably.   Nor is it unreasonable if they believe that their human scale is part of the secret of their success.

Because school league tables are so all-important, and pupil premium pupils are a potential challenge to their league place, not even £900 a pupil - the current premium - seems to be a temptation.  The worry is that this money is now pouring overwhelmingly into the less good schools.

So here is the problem.  The pupil premium may provide some of that extra power to disadvantaged applicants, but equally it may encourage the poorer performing schools to expand faster, given that they have far more free school meal pupils. There is a therefore the danger of a gulf opening up between successful, smaller schools and the increasingly large-scale institutions that cater for the rest of the population, which can give that much less individual attention. 

Small, human-scale personalised schools for the wealthy, huge factory schools for the poor.  That is the danger even without the pupil premium, but it also potentially provides the resources to turbo-charge it.

There are already divisions in the state school system.  The danger  is that the resources of the pupil premium may be misused to widen them - just as intense population pressures in some of the poorest areas seriously reduces the choice of schools they have, especially in East London.

When I was carrying out the Barriers to Choice Review for the Cabinet Office, I met one chief education officer (not in London) who has to build a new school every year for ten years just to keep up with a rising population - and with virtually no resources to do so.

Is there an answer?

Not really, but it would be sensible to focus on the core of the problem: the existing league tables discourage schools from taking pupil premium pupils.

One of my proposals was to publish a new league table which shows the performance of all schools with their free school meal pupils, and excluding those schools which accept well below the national average of them. The impact of the 'transformation league table' would depend on it being celebrated, and on providing strategic advantages for those schools which score well.

The Lib Dem education minister David Laws has been focusing attention on the gap between pupil premium pupils and the rest, even in the apparently successful schools, partly as a result of the Review.  So something is happening and the schools are rushing around trying to fix the problem.

But the underlying trend needs to be tackled too.  We don't want to end up with a wider gap between the classes of state schools - small and human for the rich, big and alienating for the poor.

Bankers, nurses and the way targets narrow language

"No nation has ever produced a military history of such verbal nobility as the British. Retreat or advance, win or lose, blunder or bravery, murderous folly or unyielding resolution, all emerge clothed in dignity and touched with glory. Every engagement is gallant, every battle a decisive action, every campaign produces generalship hailed as the most brilliant of the war. Other nations attempt but never quite achieve the same self-esteem. It was not by might but by the power of her self-image that Britain in her century dominated the world."

So said the American historian Barbara Tuchman about the British retreat into India in 1942.  That was the way we regarded things a generation ago - the military, our police, the NHS.  What changed?  How did we go from verbal nobility about the NHS to the corrosive vigilance that has led to the current panic about eleven dysfunctional hospitals.

Before, our ability to congratulate ourselves would over-shadow almost any local abuse.  Not now.  What changed?

The answer is the transparency, faulty as it is, that comes from measuring everything.  We pore nervously over the data, the averages, the bizarre conceptions of normality, and we appoint inquiries.  Then we sum it all up, pathetically, into Ofsted-style ratings (that is the future of hospital inspection apparently).

You can't un-invent this kind of measurement, and it does shine a light into the dark corners of the NHS which - let's face it - have always existed: the geriatric wards, the nightmares of psychiatry, the abusive cruelties of the system - as well as the brilliance of the vision in practice (sorry, verbal nobility again).

But there is a major downside if we turn these measures into a means of control, and the Financial Times journalist Gillian Tett hinted at it yesterday in a brilliant programme in the Radio 4 series Pop Up Ideas.

As a trained anthropologist, she talked about her journeys into the world of bonds and derivatives as the system overheated in the mid-2000s.  The obscure language reinforced the otherworldliness of the financial sector.  They believed that only they could understand it.  And what blinded them about the way the world really was, she says, was their narrow measures.

There is a vital truth here.  

I remember early in 2007, before a whiff of financial calamity had leaked out, I gave a talk in a bankers forum about new ways of imagining the future, and announced a new consultancy to do just that (which we never actually set up).  At the end of the talk, there was a rush for my desk by members of the audience.  But to my disappointment, they were not rushing up to offer to employ us - they were rushing up to ask for a job.

If I had understood the significance of it then, I could have predicted 2008.  But I didn't.  The point was not that the language of banking was so narrow that it took the financial world by surprise.  It didn't.  They all knew what was about to happen, but the language of 'verbal mobility' and groupthink prevented them from saying so publicly.

So here is the irony for the NHS.  Measuring everything drives out the verbal nobility that Barbara Tuchman revealed about the British military.  But measuring things too narrowly, and calling them targets, and trying to control people with them, blinds insiders just as effectively.  

It means they follow the target numbers for waiting times, or make the financial targets, even if it means cruelties and abuse on the wards.  It isn't that they don't know what goes on, when it goes wrong, but - like the bankers in 2007 - they lack the language somehow to describe it.

That is the problem of targets, which we still have in our services in abundance.  They narrow the language.  Those who are subject to targets come to think that they describe reality.  They are able to see outside the numbers, but somehow lose the ability to describe it. 

It is groupthink of a kind, but what it is really an example of the way that targets numb the brain, narrow the language to a comfortable two-dimensions and lobotomise us all. 

Fairies: the British religion?

The historian Ronald Hutton described fairies as ‘the British religion’, and – although I spent the daylight hours agonising about public services – I am very interested in this British religion and what it means. Even so, it is hard to over-estimate just how unfashionable fairies have become in the UK during the 20th century.

They had a good start thanks to the combined Edwardian talents of Arthur Rackham and J. M. Barrie. Peter Pan was first shown to rapturous applause in 1904. In fact, there is some evidence that fairies tend to enjoy their revivals at the turns of centuries (Midsummer Night’s Dream 1595/6, Coleridge’s Song of the Pixies 1793). But something about the whole Tinkerbell thing – the delicate femininity, the questionable childish sexuality – did not mix well with the century to come.

When Arthur Conan Doyle published the Cottingly fairy photographs in 1921 – the very obvious fakes made by two little girls in Yorkshire – they had the very opposite effect on later generations that he intended. One look at the dancing gnome, or the obvious brassieres, was enough to turn fairies into a laughing stock. Though one of the girls maintained until she died that they had faked the photographs because nobody believed them when they had seen fairies.

Six years later, Sir Quentin Craufurd founded the Fairy Investigation Society, designed to promote serious study. Over the years, it managed to attract a number of prominent supporters, including Walt Disney and the Battle of Britain supremo Air Chief Marshal Lord Dowding, whose career was not helped by his public expressions of belief.

But by the 1970s, the Society could stand the cynical public climate no longer and it went underground. I wrote to their last known address outside Dublin some years ago, when I was first interested in these things, and had a strange letter back. It was from a man claiming that he knew the society’s secretary, but he said he didn’t want to talk to anybody.

I know one folklorist who spent years trying to write a thesis on belief in the Banshee – a rather noisy aspect of the fairy legend – in contemporary Ireland, but couldn’t find anyone who did believe in it (luckily, the university cleaner happened to mention that she had heard one the night before).

Even so, there is evidence all around us. The recent West End play Jerusalem ends with a tremendous scene as the lead character conjures up the spirits of the woods with the aid of a drum to help him avoid eviction by the planning department.

I wrote a novel for adults about fairies a few years ago, based on the same theory that there are fairy revivals when centuries turn. There was some interest from the big publishers in publishing it, but only on condition that I took out the fairies. Since that was really the whole point, I declined.

Luckily my own story is now published as an ebook by Endeavour Press and starting from this morning – and for a short period – Leaves the World to Darkness (for that is its name) can be downloaded free.

I thoroughly recommend it if you want to learn about the old British religion.

How to broaden and deepen what public services can do

They finally let Norman Lamb into the Today programme yesterday morning at the last possible minute before 9am, to talk about the potential role of neighbourhood watch groups in looking after older people.

I’ve done that Today slot myself and it doesn’t give you much chance to say much, still less to answer whatever bizarre take on the subject that John Humphries has in his head that morning.

And this is a pity because, far from a peculiar thought by the social care minister (Lamb) - after the disastrous coverage of NHS hospitals over the weekend – Norman’s proposals are absolutely central to the new public services that are struggling to emerge.  By which I mean better and more effective than the old.

It reminded of what Julia Neuberger said about the last days of her uncle. In her book about older people, Not Dead Yet, she described with horror how her uncle was neglected in three of the four hospitals in which he lived his final weeks. She explained that the one exception was also the hospital which was most cash-strapped:

“When my uncle eventually died, in the hospital which really understood and respected his needs and treated him like a human being, there were volunteers everywhere. In contrast, there was barely a volunteer to be seen in the hospital which treated him like an object, although it was very well staffed. At a time when public services are becoming more technocratic, where the crucial relationships at the heart of their objective are increasingly discounted, volunteers can and do make all the difference.”

She was writing shortly after the first Mid-Staffs revelations. What she suggests is that volunteers are the antidote to this. In wards where older patients might otherwise be mistreated or ignored, she says, “the mere presence of older volunteers are the eyes and ears that we need.” Human beings provide that kind of alchemy, however target-driven the institution is around them.

Now, Julia Neuberger was talking about hospitals, not about social care and companionship, but the move towards getting volunteers into public services to work alongside professionals is not just about using resources better – it is also humanising. It is the antidote to de-humanising targets, and to hidden brutalities in the system that we find out more about every time the Sunday papers drop through the letterbox.

I wanted to say three things about this.

1. There is huge demand from the potential volunteers. Patients working alongside professionals is not just a nice add-on, it is the future of public services – and on a scale way beyond anything we have contemplated so far. Working on the Barriers to Choice Review convinced me, not only that there are huge potential benefits to this kind of approach, but also that there is a huge appetite among people to do it – over 17,000 trained volunteer health champions in Yorkshire alone. They welcome it is a way to feel useful and to get training and experience and this needs to shape the future of services on a much bigger scale.  Sceptics say that people won't be prepared to volunteer for public services; on the contrary, a lot of people will.

2. It can broaden and deepen what public services are able to do. It can provide services with an ability to reach out into neighbourhoods and visit people when they’ve just come out of hospital, help children with reading, befriend lonely people, and do all those things that services really ought to do now but actually can’t (this isn’t about cutting services, it is about extending them). We need to use public services as a backbone for what would otherwise be an amorphous and vague Big Society, to knit communities back together around services on a massive scale. As the main thing they do, they will be asking their beneficiaries to give something back.

3. It can blur the boundaries between services. Because, when you work with what people really need, face to face, they don’t fit neatly into departmental boundaries. So when you start this co-production approach, you automatically start making all public services multi-departmental and multi-disciplinary. So I’m not at all surprised that Norman Lamb extended the idea of a policing initiative to tackle loneliness. That is what co-production does. It makes services more all-embracing, more human, more informal and less rigid.

That is the direction we need to go in. It means an enormous extension in volunteering, not through the voluntary sector – this is not about middle class semi-professionals ministering to the needy – but through the public sector, where the beneficiaries support each other.  As a major element of their new design.

Let's name the Lib Dem approach to recovery

As I may have mentioned before, Liberals the world over have one blind spot - one prevailing weakness which can blunt their effectiveness and their wisdom if they leave it unattended.  If socialists are not terribly interested in the abuses of power, Liberals are not terribly interested in the abuses of money.  They don't think about economics very much.

That leads them into the greatest of all political errors which the English trip over in every generation: they don't think about it very much but, when they do, they assume that the way money works and flows and accumulates is by some kind of eternal law, set down by God at the creation of the world.

No nation on earth is so conservative about the way money works as the English.  They still believe Captain Mainwaring is at his desk, dispensing sherry, and weighing up the pros and cons of specific loans, when he has long since been pensioned off by software at regional office.  They think that money is created by the Bank of England in the form of notes and coins, when actually 97 per cent is created by banks and it surges through the wires in the form of speculation at the rate of $4 trillion a day.

Last week, I used the phrase 'an ecstacy of positioning' about Lib Dem economic policy over the past fifteen years.  It keeps being quoted back at me and, I must admit, I'm quite pleased with it.  The basic problem is that they haven't believed that economics was important enough to shape a distinctive approach to it.

I don't believe the modern Lib Dems can ever thrive unless they do, unless they wield a slogan like Lloyd George's 'We Can Conquer Unemployment'.

So I was very glad to see Nick Clegg's letter to party members, announcing his intention to do just that.  But there remains a problem: it is still just a list of measures, which any sensible government might do, and no To-Do list is itself a memorable and distinctive approach, which people might hear, think about and whisper to themselves: 'We ought to give it a try - it might work'.

Luckily, I am in a blogging mood this morning, so I can supply what is missing.  Three things, and they can all be done by the party immediately:

1.  Name it. There were announcements in Nick Clegg's statement about a new way of extending local borrowing to build council houses and extending apprenticeships, but all the rest is about the same thing: creating the institutions capable of lending to a new entrepreneurial sector - the very institutions which Britain currently lacks so badly.  That is the core of the approach: it means naming it, and making it distinctively Lib Dem.

2.  Commit to letting the new Business Bank operate on lower profit margins, as similar institutions are allowed to in other countries.  There is no point in creating another bank exactly like the other dysfunctional institutions, and that means they have to be explicitly committed to lending at below market rates to get the UK economy moving again - setting up sustainable, independent businesses which can't quite leap through the hoops that the big commercial banks set.  The Treasury won't like it - but the Lib Dems should have two more years in government and these decisions will make a huge difference, if they are absolutely committed to making it happen.

3.  Regionalise the management structure of RBS.  The government has ruled out splitting up RBS into mini-banks, but then that wasn't exactly what was being proposed.  What is needed is not a set of tiny local banks, but a network of self-governing parts of RBS county by county - like the networks of local business banks in Germany and Switzerland, with local business people on county or regional boards.  RBS will still exist, but its governance will be regional, and it will keep its national network to send the capital and liquidity where it is needed.  It can then provide an answer to the big question about the Business Bank: where is its network and lending staff?  How will it get its intelligence?  Because if it is just relying on the branch network of the commercial banks, then it will be about as effective as Funding For Lending (that is to say, not very much).

As always I'm indebted to my increasingly influential colleague Tony Greenham for the guidance on regionalising RBS, and he is absolutely right.

So there we are, let's not confuse people with long lists of diverse intentions.  Let's call the Lib Dem approach to recovery what it is - a commitment to reviving local economies by providing the effective lending institutions which the UK so badly needs.

The real story of the discovery of the shape of the globe

What was it about the 1490s that meant that, simultaneously, Europe got to grips with the shape of the globe?

That one generation - from the Bristol expeditions to the American coast from 1480 to the circumnavigation of the globe by Magellan's crew in 1522 - took the world maps from a handful of vague blobs with Jerusalem in the centre to an understanding of the whole globe.

What is extraordinary is that those people who made the breakthroughs, notably Columbus, Cabot and Vespucci, all knew each other.  Once you abandon the rival nationalist myths about 'discovery', and weave the story together as it originally was - including Perkin Warbeck and the Borgias - it is as much about the European renaissance as anything else.  That and the development of Intellectual Property.

That is certainly what emerged in my book Toward the Setting Sun (now an ebook at £2.99) and that is what I said yesterday in the Huffington Post.

It makes it possible to imagine a bit more clearly just what humanity could achieve in ten years if they really set their mind to it.

The end of privatisation is coming

It is getting on for a decade or so before I first heard the fatal phrase, uttered in this case by a voluntary sector worker at the door of a community meeting:

"If you get any couples, mark them both down as women.  We haven't got enough of those."

In that simple sentence, you discover just what a trap the whole edifice of targets, standards and audited processes was that New Labour erected at such expense around the public and voluntary sectors.  The point is that target systems encourage frontline staff to finesse the way things are counted, to their own benefit.  When that involves money, it begins to look like fraud.

It is known as Goodhart's Law: any numbers that are used to control people are bound to be inaccurate.

Unfortunately for the coalition, the same is true of Payment By Results.  The whole system encourages gaming, and worse than that it encourages organisations getting public money to interpret figures to maximise their income.

I don't know, of course, what has been going on with Serco and G4S.  It may involve no fraud, just the unconscious failure to look too closely at the way numbers are transformed into invoices.  I expect this will be the ultimate revelation from any of the current inquiries that the Justice Department announced yesterday, but the question of how unconscious it was is precisely why the word 'fraud' has emerged.

The targets/results system encourages mild reinterpretation.  Once again, when money is involved, it becomes expensive.

Encouraged by the management consultants, outsourced or privatised services pay increasing attention to the business of counting so as to maximise income.  Hospitals are employing highly experienced accountants, at £1,000 a day, to re-code the work they do, so they can bill a bit higher.  There is also studious inattention to anything that might question the seamless process of numbers turning into invoices.  In this border between the accounting  departments of the oursourcing giants and those of the Whitehall departments, the costs are mounting.

In fact, it is just too expensive.  The influential NHS blogger Roy Lilley estimates today that CCGs may be spending about £95m a year dealing with disputed service contracts.

That is why, despite the parallel announcement about the privatisation of the Royal Mail, I'm pretty sure that this marks the beginning of the end of privatisation as we know it.  For that reason and these:

1.  The money isn't there any more.  The depth of the crisis in public service funding is now so intense, and the available funding has been sliced so thin, that the scope for making a profit on most outsourcing - and certainly most privatised utilities - is no longer there.  The demand is not going to be there from businesses, especially if they are going to come under the kind of forensic scrutiny that now awaits Serco and G4S (and we haven't even begun examining the Payment-By-Results contracts yet).

2.  The economies-of-scale doesn't work any more.  The only circumstances in the near future when there might be some opportunity for profit is if the deliverable outputs are so narrow, and the means so virtual, that some kind of economies of scale are possible.  That is precisely why the public is increasingly sceptical - and so are the professionals, because it is increasingly clear that these economies of scale are purchased at the cost of diseconomies of scale in  other parts of the system, which have to be paid for in increased demand by someone else.

3.  The issue is no longer public versus private, it is flexible versus inflexible.  The worst service, the most inflexible and inhuman systems are now to be found - not in the public sector - but in the privatised utilities: all the sins of the nationalised industries have simply been continued by their private owners, as I explained in my book The Human Element.  The issue isn't ownership, it is scale and flexibility - so as to avoid the mounting diseconomies of scale, when you have to do the work over and over again because it is so ineffective (why is quality cheaper, said W. Edwards Deming rhetorically? The answer: No rework).

So there we are.  RIP Privatisation (1984-2013).  It is on the way out, not for ideological reasons, but simply because it no longer suits the immediate needs of policy-making.  The Serco/G4S scandal is just the beginning: by the end of this process, there will still be outsourcing - micro-enterprises will meet a whole range of needs - but I don't see how the giants of outsourcing can survive.

Time to unbalance the economy

It is a relief sometimes to find the government has done something that is, not just unexpected, but overwhelmingly and unexpectedly right.

There I was staggered that Vince Cable is prepared to countenance plans to privatise the Royal Mail, a step which not even its most enthusiastic proponents would claim will improve the service - and will therefore introduce a whole range of externalities and costs for other people - with not a shred of mutualism to be seen.

And suddenly, the government wins a high court action against the big fishing companies, which had tried to prevent them re-allocating fishing quotas to small fishing boats.

This is such an imaginative move that I have been wondering if it could be extended to cover other parts of the economy.

It is true that progress 're-balancing the economy' has been extremely small.  It is difficult to shift economic power from the banks and finance companies, because the rewards to the Treasury of letting them carry on hollowing out real economy are so high.  So we still, after three years of the coalition, have an economy miserably dependent on a non-existent local lending infrastructure, and we still have 70 per cent of bank lending desperately attempting to create a new property bubble.

So why don't we give up the effort of re-balancing and set out a new policy of unbalancing the economy - a deliberate effort to shift power from the big to the small.

The rewards are difficult to estimate but they should be huge: small companies employ more people, expand faster, pay more tax relative to their size, provide challenging innovations and support their local neighbourhood in a way that the big corporate giants fail to.

Is there really any doubt that having a Big Ten supermarkets rather than a Big Four would improve service, employment and competition.  Having a Big Thirty banks rather than the handful of useless behemoths that we do have would expand the local economy far more effectively, rather than corroding it.

Shifting subsidies for farmers from the big to the small would improve yields, diversity and competition and help the balance of payments.  It would also improve employment.

Because only radical action like that would be able to shift the astonishing privileges the big companies have at the expense of the smaller.  Tesco is able to demand that suppliers wait three months for payment, providing them with an interest-free loan equal to two months of stock, when competitors have to pay in one month. Thames Water took in more in government subsidies than it paid out in tax.

What's the downside?  We could potentially lose some economies of scale, but since most economies of scale are matched by diseconomies of scale which very rapidly overtake them, that may be no great loss.

It would require guts and, more than guts, lawyers - and it would need to be justified by a manifesto promise.    But if anyone lets me back on the policy committee of the Lib Dems - which is far from certain - that is what I'll be trying to insert into their manifesto: something that is, at long last, pro-business and overwhemingly pro-enterprise and innovation.

Why Richard Grayson got it wrong

I've just read through Richard Grayson's apologia for leaving the Lib Dems on the Compass website, and feel sad about it.  It hardly needs saying that I don't think he is right, but I've known Richard and enjoyed sharing a committee table with him for so long now that I can't remember when I first met him - but I think it was 1997.

I remember having a cup of tea with him for the first time when he was running the Centre for Reform, as it was then, in the wonderful Tevere cafe, since unfortunately gone the way of all cafes.  Richard was always a thinker and the party needs thinkers, and we should not be losing people like him - but there may be reasons why we inevitably will.

I've enjoyed his company during the years of Richard Grayson Mk I (It's all about Freedom) and the years of Richard Grayson Mk II (It's all about equality).

He made some points in his Compass article that made me think, but I've always known that he was a different kind of Liberal to me.  I remember running into him at the Friends Meeting House in Euston during one of the debates between Clegg and Huhne during the leadership campaign.  I was a convinced Clegg supporter, not through any disagreement with Huhne, but because he seemed to me to be searching for a new political language - which I felt we desperately needed.  I asked Richard then what he thought of Clegg and was taken aback by how much we had drifted apart politically.

I don't recognise the party disputes that he writes about from his descriptions of them, but these are just playing with words.  If I had him in front of me, I would say three things...

1  Slow progress in government, yes, but...
I recognise with what he says about the tiny progress the party has made in terms of policy implementation in government.  It has been far, far tougher than anyone might reasonably have imagined - there may be questions about whether the coalition was, in fact, the right thing to do for the party, though it clearly was for the nation (and some important things have been achieved, like taking the low-paid out of tax).

My small involvement in government since 2010 has convinced me that we are also not alone in that.  The frustration of the Conservatives is, if anything, more intense - not because they have been frustrated by the Lib Dems (though they are sometimes), but because of the sheer complexity of the system they are dealing with.  Government is intractable and almost nothing seems to be possible.

That is fascinating for me as a policy wonk, but it isn't a reason to leave the party.

2  The terrible failure of New Labour on public services.
I have felt much less sympathy for Richard's point of view because of the failure of some on his wing of the party to recognise the basic problem.

They are so wedded to the system as it was, that they never grasped the scale of the damage done by New Labour in their centralisation, control and emasculation of public services.  At huge expense, and with the aid of a battery of targets and standards and an enthusiasm for process, they rendered public services dangerously ineffective, as I described in my book The Human Element.

To say this does not make me an old-fashioned Conservative who wants to demolish services, but I do at least recognise that there is a problem in the status quo.  Austerity isn't the solution, and it isn't clear to me that the coalition has grasped the problem either to any great extent.  But I don't share the view - which Richard seems to imply - that the problem is all about defending the old settlement, and funding it adequately, because if we did that - all wouldn't be well at all.

3  The terrible failure of Lib Dem policy-making
Richard hints at this in his article, when he describes the failure of Lib Dem economic policy to provide any conviction once the party was in government.

The real problem was that, once in government, the Lib Dems found they had no distinctive economic policy and nothing much to say on public services, and without either of those they were bound to be blown around by events and by convictions stronger than their own.

That is the reason for the failure to construct a Lib Dem alternative to austerity.  It is the reason for the muddles and confusion about the various different versions of health legislation.  It all had to be made up in the heat of battle and of course it had no depth.

I was on the federal policy committee of the party during the run-up to 2010 and I must take my share of the blame for that failure, but so must Richard.

Policies with depth don't just emerge around a committee table.  They need to be based on a flurry of thinking, ideas and debate around a party leadership, and this never happened during the Kennedy leadership years.

There lies the heart of the difficulty: in practice, the Lib Dem economic policy has been an ecstasy of positioning and compromise, not because Liberals have no convictions - but because they are not terribly interested in economics.

So what really separates me from Richard here is not so much my Liberalism, but his conservatism.

He didn't want to find a new political language.  I don't want to defend the design of the 1945 welfare state.  I want an effective system that genuinely supports people to escape Beveridge's Giants, which I don't think the Spirit of '45 provided, for reasons I've discussed elsewhere.

I don't believe these issues can somehow be assumed.  They need to be debated from a radical Liberal point of view so that effective public services can survive the assault, not because we need to defend the past, but because they work for people.

But that debate never happened.  Again, I have to take my share of the blame but, then again, so does Richard.

How to shift economic power, without help from governments

One of the best of the Ealing Comedies, The Titfield Thunderbolt¸ has rather a wonderful scene at the  public inquiry where the trade union leader is flummoxed by the disparate group of volunteers who want to take over their local railway line to save it from closure.

They are non-union labour who are about to be exploited by the bosses, he says.

“But we are the bosses,” says the vicar/train-driver.

These were the days before amateurs taking over railways, at Tallylyn and then the Bluebell Line and many others. Mutualism has always been pretty incomprehensible to state socialists, and has been ever since Beatrice Webb torpedoed British mutualism on behalf of the Fabian Society.

The fate of the Co-op Bank was a bit of a blip for the politics of mutuals, but things do seem to be moving again – almost, but not quite, fast enough to make this issue absolutely centre stage for the future of the UK.

The evidence suggests now that, not only are mutuals generally speaking more successful than companies that have very hierarchical structures, but they give employees an economic stake which the rest of the economy increasingly denies them.

They are, in effect, a key part of the jigsaw that might bring about an economy that spreads the rewards equally enough to succeed – it is pretty clear now that economies which fail to do this tend to grind to a halt, because nobody but bankers can afford to operate in them.

In fact, mutual ownership of land as well as employee ownership of businesses seems to be one of the few potential solutions to the terrible mess our economic policy has landed us in, for all but the very rich.

But what is fascinating about this is that you could imagine change happening without government support, and with most governments hopelessly wedded to the old model, this might have to be the way forward.

So I was fascinated to read an op-ed article in the New York Times by the great campaigner Gar Alperovitz about how this might happen, appealing to baby-boomers who own businesses to sell them to their own employees.

If they do, it would create another 2-4m employee-owners over the next generation as the baby-boomers retire

The most interesting development in the USA is the way the steel union has now adopted mutualism, and in fact now has a partnership running with the Mondragon network of co-ops in the Basque area of Spain, which provides one model of how networks of co-ops can provide everyone with a proper economic stake.

Gar Alperovitz is something of the phenomenon, combining experience working in Congress with campaigning and academia. He is also part of the Democracy Collaborative which was behind the inspirational new co-ops built around public services in Cleveland, Ohio.

He is also a compelling speaker. I have watched him hold an audience in the palm of his hand, on a snowy Saturday evening in the town hall of Great Barrington, Massachusetts, speaking for over an hour without notes.

His basic message is that we are entering the most important period of peaceful revolution and economic reform since the American Revolution itself. I think he may be right.

The last few years of literary festivals?

Thank you to all those who made it to my session this afternoon at Ways With Words in Dartington Hall, which was magical in a whole range of ways.  The dreamy sunshine on the lawn, the otherworldly atmosphere of Dartington – heavens, I even slept in a medieval bed.  It was almost News from Nowhere in reverse.

My session on the middle classes was great fun and lively and I’m ever so grateful to everyone for coming.  I will be doing a rather different version of the middle class performance at the Edinburgh Book Festival in August.

But it was poignant as well.  I realised, sitting in the sun, that the vast majority of people who had come to the festival to listen to me, Ann Widdecombe and Roy Hattersley (a strange combination), were retired people on full final salary pensions. 

The perfect storm that is about to sweep away the middle class lifestyle for the next generation will also sweep away these final salary pensions – in fact, they have already been swept away.

The average pension pot in the UK is now £25,000, enough to pay out about £1,250 a year.  If the whole literary and cultural economy depends on pensioners having disposal income – and I believe much of it does – then it will not exist.

Those of us born between 1920 and 1950 have created that leisured, cultured world, because of generous pensions, paid for by employers, that no longer exist.  It is more than sad to see it go: it will be a disaster for the UK, dependent than much more on the largesse of Chinese and Qatari investors and the books and culture that they happen to like, and are written for them as an audience.

But then, we shouldn’t write off the middle classes quite so soon.  They have an amazing ability to adapt and survive – and it is precisely how they are going to do that which my book Broke sets out.

There is a way out.  Now we have to actually take it.

Come and get cross with me in Dartington

I'm heading off for Devon today, to Dartington and the Ways With Words Festival - and with some trepidation.

This is the first time I have dared to articulate my thesis about the middle classes in public since the publication of my book Broke: Who Killed the Middle Classes? at the beginning of May.  Since then, there has been huge publicity - not all of it very polite.

My favourite among the emails I received culminated in this peroration:

"Instead you defer to your sad obsession with class, and in fact your boo-hoo story about the nouveau-pauvre middle class will leave many of your compatriots happy to see you suffer in your plight. And, in my opinion, not unjustly so.”

Quite right.  So, as you can see, I'm a little nervous of putting my head above the barricade.  And don't think for a moment that I'll be safe among the middle classes of Dartington: the middle classes are the angriest.

So come along and join the debate.  I'm speaking at 1pm tomorrow (Monday).  See you there!

Beyond the powerlessness of politicians

Steve Richards is a fascinating political columnist and he even has a one-man show, showing off his political wisdom - and particularly about the sheer powerlessness of politicians.

One of the many things I learned carrying out an independent review from the government was just how difficult it is to make anything happen.  The sheer complexity, political and administrative, of the current arrangements get in the way - the vested interests, the unpredictable side-effects of any change, and the sheer inertia of the delicate balance we have at the moment, all conspire to prevent it.

Sir Keith Joseph used to complain that he had spent his whole life trying to get his hands on the levers of government, only to find they weren't connected to anything.  And that was four decades ago or more.

I've been thinking about this for some time, especially in the light of the frustrations that Liberal Democrats have found in government, which are legion.  But I've just run across an article that has made me think differently.

Because this idea that government is some kind of machine goes very deep.  The sins of Whitehall are mainly mechanistic, and reductionist, and born of the Age of Newton.  Politics seems not even to have caught up with the Age of Einstein, let alone the Age of Chaos.  Perhaps we have become so wedded to Keith Joseph's levers that we can't see there are other ways of making things happen.

I just read an article by the highly controversial scientist Rupert Sheldrake (pictured above) about his new book The Science Delusion.

Bit of background here.  Sheldrake is the man who designed a whole series of populist experiments to test out peculiarities - is it true, for example, that dogs really know when their owners are coming home, as they so often seem to?

He sends many, but not all, scientists completely bonkers, which is why his TED talk last year was censored - though you can still watch it online.  His main sin is that he has questioned whether science is pretty much done and dusted, and whether there are actually major changes coming in the way we understand the universe.  As if that wasn't enough, he has questioned the following broad, and as he says, unproven, assumptions:

"1. Everything is essentially mechanical. Dogs, for example, are complex mechanisms, rather than living organisms with goals of their own. Even people are machines, “lumbering robots”, in Richard Dawkins’ vivid phrase, with brains that are like genetically programmed computers.

2. All matter is unconscious. It has no inner life or subjectivity or point of view. Even human consciousness is an illusion produced by the material activities of brains.

3. The total amount of matter and energy is always the same (with the exception of the Big Bang, when all the matter and energy of the universe suddenly appeared).

4. The laws of Nature are fixed. They are the same today as they were at the beginning, and they will stay the same forever more.

5. Nature is purposeless, and evolution has no goal or direction.

6. All biological inheritance is material, carried in the genetic material, DNA, and in other material structures.

7. Minds are inside heads and are nothing but the activities of brains. When you look at a tree, the image of the tree you are seeing is not ‘out there’, where it seems to be, but inside your brain.

8. Memories are stored as material traces in brains and are wiped out at death.

9. Unexplained phenomena like telepathy are illusory.

10. Mechanistic medicine is the only kind that really works.

Together, these beliefs make up the philosophy or ideology of materialism, whose central assumption is that everything is essentially material or physical, even minds. This belief system became dominant within science in the late 19th century, and is now taken for granted. Many scientists are unaware that materialism is an assumption; they simply think of it as science, or the scientific view of reality, or the scientific worldview. They are not actually taught about it, or given a chance to discuss it. They absorb it by a kind of intellectual osmosis."

That is what he says.  I don't want to argue here whether Sheldrake is right in his scepticism or not.  I'm not a scientist, though I recognise the besetting sin of the English in this debate - a miserable and unthoughtful positivism, that still has our debate in its grip 70 years after it was worn out as a philosophy.  But, as a political blogger, well, I'm interested.

Because if there are radical changes in the way we understand reality, and how it is connected, then that has implications for the way we change the world - and it opens up other possibilities.  And right now, anyone who believes in the possibility of political change needs other possibilities very badly.

Why you might hug a lamp-post

The New Economics Foundation (nef) had their summer open day this week, and I had a long cool drink before speaking on the future of public services, only to discover I had swallowed something ferocious called 'Moscow Kick'.  Goodness knows what I said afterwards.

One of the old friends and colleagues I ran into there was the great Mayer Hillman, sometime scourge of the Department of Transport - the man who forced Whitehall to start counting journeys on foot as well as by car - who manages to combine being very good company with being very cross.

These days, he is mainly cross about global warming and believes catastrophic climate changes have already begun, and that all we can do for our children and grandchildren is slow it down.

This put something of a dampener on my evening.  Green think-tanks like nef are necessarily optimistic kind of places, and a dose of what may well be reality makes it tough to maintain quite the optimism one is supposed to.

As Mayer says, it is supremely ironic that mankind has been visited by an affliction that may prove to be fatal, and which can only be cured by putting aside differences and working together.

Meeting him again has made me particularly sensitive to the Re-arranging The Deckchairs phenomenon, so I was fascinated to see the news of the stand-off with police and Skanska contractors in Crystal Palace over the removal of Victorian iron lamp-posts.

It so happens that I've blogged before about this £79m PFI contract to put up lamp-posts in Croydon and Lewisham, which will mean council tax payers will be paying for this pointless exercise for the next quarter of a century.  My own lamp-posts were removed, from my street, a few weeks back.

The main justification for this huge operation, while libraries are being closed, is that the new lamps will be more energy efficient.  This is the kind of nonsense that would send Mayer Hillman almost insane with rage: the ice cap is already melting and Croydon and Lewisham are burning the carbon to achieve a sliver of a difference in energy efficiency, using the safest old technology they could find.

There might be a case for replacing the lamp-posts with new ones with solar cells, that generated their own energy - or at least pumped an equivalent amount onto the grid during the daytime that they would use at night.  But to go to this huge effort, and pay these huge sums so pointlessly to achieve so little really demonstrates to me how little local authorities have really risen to the challenge of austerity.

Or if the technology doesn't exist yet for this (it does), we should wait until it does before handing over £79m to Skanska.

It is high time we had a look at the contract.  Oh, no, I forgot.  It is commercially confidential.

The new world of artists in economics

It wasn’t actually Stout Cortes at all, was it.  It was Nunez de Balboa who stood, full of wild surmise, and stared at the Pacific.

I had one or my own moments silent upon a peak in Darien this week, at a fascinating dinner at the Whitechapel Gallery, to celebrate the launch of their exhibition The Spirit of Utopia, which opened today.

I had just been talking at a seminar in the City on the future of money, so it was absolutely obvious to everyone there – as people said – that I was not a member of the arts world.  My suit and tie, which marked me out in the City as slightly think-tanky, was obviously out of place here.  But I had been invited for exactly the same reasons that I had been in the City, because I knew about new kinds of money.

The series of mini-exhibitions under the Utopia title are thrilling in themselves, all of them in their different ways looking at aspects of economics – with the aid of pot plants, psychology consultation rooms, earthworms, and clay (people are making pots during the whole period of the exhibition).

Yes, this owes something to Ruskin – and Ruskin is, as we used to say, the grandfather of the new economics.

You could be cynical about some of this, as people are about the state of fine arts in the UK, but actually there is an energy and imagination about it that is infectious.  What I’m not completely sure about is the depth.

Because now that fine arts has discovered economics, and I gather that at one arts school, a majority of Ph.D students are starting their research by reading Hobbes and Mill, it isn’t necessarily connected either to the word of mainstream economics or my own world of alternative economics.

The exception here is Time/Bank, a very successful duo of artists called Julieta Aranda and Anton Vidokle,   based in New York and Berlin, whose own contribution at Whitechapel includes a brilliant film and a filing cabinet full of information and pictures about the connections between time and money.

What really fascinated me is that it isn’t that different from my own filing cabinet.  It has some files with the same titles.  Some even include the same contents.  But for this filing cabinet, you have to put on special white gloves to look at it – because it is an exhibit.

My contribution, such as it is, will be a talk I’m giving on time and money at the gallery at lunchtime on 26 July.  Do come...

But this arts/economics world is completely new to me, and it seems to me that there is an exciting opportunity.   If we could bring the two planets together – the arts/economics world and my own world of new thinking in economics – would that not create more than they are separately?

If we can provide the arts/economics world with more content and the new economics world with more imagination, maybe we can launch a Ruskin Prize to take on the Turner Prize.

Why the design of money is going to change

I promised to go on a bit about the future of money, and I've just spent a fascinating lunchtime speaking at a seminar in London organised by the Centre for the Study of Financial Innovation. So now I can't stop myself.

I was talking alongside my colleague Leander Bindewald, of Community Currencies in Action, digital money guru Dave Birch and the great Australian new economics pioneer Shann Turnbull, who ought really to get a whole blog to himself. I can't say what everyone said because of the rules, but I can say what I said.  It was a prediction for money innovation.

They used to say, in financial circles, that - if governments had controlled transport - we would still have subsidised stage-coach routes.  It isn't true, of course.  But the really odd thing is about financial innovation, where we have the equivalent of stage-coaches.

The problem was that we put bankers in charge of it.  As a result, we have had a head-spinning number of innovations in financial instruments, derivatives, eurodollars and all the rest.  But the basic design of money has stayed the same since the 18th century, exactly when stage-coaches used to ply their trade.

Yes, we have had tweaks in 1945, in 1971 and in 1979, but that was all about the financial architecture of the world, not about the basic design of money.

As a result, we have deeply conservative people overseeing what is otherwise a wild and innovative system, but presiding over an antique design, ignoring the possibilities of new technology - mainly in this case mobile phones.

As a result, as well, we have had the history of the design of money airbrushed out, as if money descended from above fully formed around 1689.

We have forgotten the currencies that emerged in the Great Depression, and still exist in Switzerland.  We have deleted all memory of the 'black money' for ordinary people in the medieval period, which lost value (negative interest) to encourage spending - and seems to have financed the great gothic cathedrals.

We have censored any historical memories that might provide clues to a solution to our new dilemma - how to raise interest rates in London and Berlin without impoverishing Toxteth or Gorbals or Athens.  And how to finance small business at reasonable interest rates when the banks have lost the ability.

But I think that technology will finally corrode that conservatism - there is not an internet millionaire in California who isn't dedicated to doing so, and some will succeed.  We also have the new currencies for small-scale entrepreneurs, issued through Brazil's community banks and backed by their central bank.  We have the new currency for small business in the city of Nantes, organised by the man who is now the French prime minister.

Things are shifting.out there, and we will soon have a diversity of different currencies to choose from for different aspects of our lives - local currencies backed by local authorities, Scottish currencies and euros for use abroad, pounds to pay taxes with, and a range of rival internet currencies too.  Some will be designed for poorer people and will have disadvantages for the rich (they lose value if you try and save them); some will be designed the other way round.

Nothing can stop this innovative hurricane - but it is scary to conservative types.  That is why even Franklin Roosevelt vetoed Senator Bankhead (Tallulah's dad) when he introduced his bill for a trillion dollars worth of negative interest money issued through Congress in 1933.  That is why the Nazis and their conservative predecessors clamped down on money innovation in Europe in the mid-1930s.

It is also why the prize for bone-headed conservatism has to go to the officials of the Kenyan central bank, who have not just judged the innovative project Bangla-Pesa illegal - though it is an attempt to design a pro-poor currency along the lines of those promoted by the Brazilian central bank - but they are also prosecuting the organisers for forgery.

When 97 per cent of the money in circulation is already created by commercial banks in the form of mortgages and loans, that accusation is completely bizarre, and does no credit to Kenya.  It also gets in the way of the innovation in money design that we so badly need.

You can support them in their fight to escape jail here.