Sunday 31 March 2013

Carey is blind to the real 'aggressive secularism'

As a member of the Church of England, I am occasionally irritated by our erstwhile archbishop George Carey.  Occasionally more than irritated, but - since it is Easter - I am choosing words carefully.

There may indeed be problems in our society about what he calls 'aggressive secularism', but it has little to do with David Cameron's plans for gay marriage.

In fact, statements like that - timed for Easter by the Daily Mail - simply plays into the hands of those in the media and the church who seem to think the central Christian message is some kind of warning against homosexuality.

How many times, incidentally, do you think Jesus mentions homosexuality in the gospel accounts?  The answer is not at all.

Some kinds of secularism are important.  We should not be ramming specific religions down the throats of people for whom they are unwelcome (as if we were).  Equally, we should not be insisting on secular culture for everyone in every situation, especially when 'secular culture' is interpreted as a narrow, puritanical positivism.

So my irritation with Carey is that he seems to be blind to the real problem, which includes:

  • The way political parties encourage a miserably empty consumerism, and assume this sums up people's highest aspirations.  See my blog on the 2011 riots.  One result of this kind of perverse morality is the way we allow big banks to do almost whatever they like because they pay so much in tax.
  • The way every high ideal, at work and in social policy and every hope beyond, is assumed to be measurable, and reducable to some kind of digital delivery system.  See my blog about measurement.
  • The way a small group of extreme positivists pour public scorn on anything that cannot be seen under a microscope, whether it is complementary health or God.
All these reduce our common life, narrow our aspirations, fetter our imaginations and provide what for me are the real symptoms of aggressive secularism.  So why does Carey obsess about the way some people express their love for each other?  That reductionism is a symptom of the very secularism he warns against.

We have managed to shake off the most miserably utilitarian government in history (I refer to New Labour).  We haven't really struggled out the other side yet.  I don't suppose we ever will if people continue to imagine that the profundities of religion - whatever you might think of them - can be reduced to your attitude to same-sex relationships.

Saturday 30 March 2013

Lots of data, nobody listening

A few years ago, the Environment Agency asked me to write about the year 2020, which I did - and with my tongue slightly in my cheek.  This is the future as I painted it, and the Daily Mail even drew a picture of it (but I can't find the link).

I had been fascinated, and slightly horrified, by the development of Matsushita's digital toilet and could just imagine what it would mean in practice, so I began the article like this:

It is 30 October 2020. The alarm clock bleeps at 7am in the Dumill household, as the light seeps into the sky above the new village of Hamstreet in Kent. The cock crows a few streets away in one of the small-holdings of one of the part-time farmers.  He washes his face and the water whirls down the plug-hole. In the distance, he can hear the hum of the household water purification plant starting its work for the day.  He flushes the toilet, which automatically analyses his sample. Richard's cholesterol level is slightly high, after a heavy dinner of chips and farmed cod, and the toilet sends the information digitally to his doctor's surgery computer, which ignores it completely...

Dumill and Hamstreet, incidentally, were an echo of the characters and places invented by the geographer Peter Hall in his planning classic London 2000.

I thought of all this when I heard a discussion on Friday about the Leeds General Infirmary's heart unit, when one of the interviewees came up with this extremely important statement:

"Although data was being collected, nobody was looking at it..."

And there is the Achilles Heel of the digital measurement revolution.  Yes, there is measurement.  Yes, there is data.  But there isn't anyone looking at the data and - if there is - there isn't anyone available to do anything about the problems that emerged.

Yes, we can track lonely old people around their flats, and check their blood pressure remotely.  What we don't seem to be able to do is to work out how we can get people round to make sure they are OK - or, heavens, even maybe talk to them.

So we are deluged by more and more data, but less and less information.  Still less, as T. S. Eliot put it, knowledge or wisdom.

This is a subject - too much measurement - that I began writing about in The Tyranny of Numbers, and there is a lot more to say about it.  

And the centre of this whole problem is the Care Quality Commission, awash with data - much of it still coming over the fax machine, which is some explanation of their dysfunctionality - yet so few actual insights, because they require human intervention, imagination, insight.  Because our resources going into social innovation are so small compared to what goes into technological innovation.

You can't measure your way to that.

The idea that government or public services can somehow just run themselves just on data, without human intervention, is a terrifying utilitarian fantasy which infected the Blair government and explains the breadth of their failure.

Friday 29 March 2013

Lamp-posts and the terrible costs of centralisation

During the hottest week of May (remember those?) a few years back the month, my mother-in-law arrived at the council-run college in Croydon where she taught part-time, to find that the central heating was on.

It was particularly sticky and sweltering. During every spare moment, she set about the long business of tracking down somebody who had sufficient authority to turn off the radiators. My mother-in-law is one of those people who can make things happen, very gently but determinedly, but – even for her – getting the radiators turned off in the sweltering heat was no easy project. 

The principal of the college wasn’t responsible. Nor were those responsible for the college at the local authority. Most of them not only had no power over their own heating; they also had no idea who had – a familiar experience in centralised public services.

Towards the end of the day, she discovered the right person. It was a man with a laptop, somewhere in the council building which also housed the education officers. He was persuaded to act, and – at the click of a mouse – the radiators went off.

In those heady first few years after the Berlin Wall came down, I used to write a regular newsletter on renewable energy, and often included anecdotes about the energy use in the great Soviet-style apartment buildings on the outskirts of Moscow or Budapest – pumping heat into the surrounding atmosphere whether it was hot or cold. 

We used to laugh at this, amazed that nobody could turn off their ancient totalitarian radiators. Yet we seem to be in a similar situation in the UK – my wife was teaching in a local school where the radiators were also blazing out during the hottest days, so I don’t believe this is actually very unusual. The reason is the same; the institutions are too big for the human dimension to work.

Centralisation is expensive because it provides for no initiative, no responsibility, no intelligent feedback.  Find out more in my book The Human Element.

Which brings me to the reason for the photo, which is of the street outside my house.  A few weeks ago I blogged about the bizarre picture of Croydon Council planting a whole series of new lamp-posts during a recession when they are busily closing libraries - and the new lamp-posts do not even generate their own solar energy, so they will have to be replaced pretty soon.

Now we have the new lamp-posts, under a massive contract with Skanska which also covers next-door Lewisham and lasts for five years.  But we also have the old ones.  The picture above is the only spot in our street where the two lamp-posts, old and new, are not blazing forth next to each other.  All the other new lamp-posts are blazing right next to the old ones, which are also blazing.

Does this kind of inefficiency matter?  The answer is, across two whole London boroughs, it does.  Because, as I may have mentioned before, small plus small plus small equals big.

Thursday 28 March 2013

The British Disease and the Airblade Effect



The British engineer James Dyson is best known for his successful and rather expensive vacuum cleaner. It is successful because, unlike so many other vacuum cleaners on the market, it works rather well. The same goes for his Airblade dryer, an alternative to hand dryers which began appearing in public lavatories in 2007.

The old hand dryers used to take up to 44 seconds to work – or so Dyson claims. Actually, I have encountered many, especially on trains, that would happily maintain the dampness on your hands at great expense for hours under a pathetic breath of tepid air. The Airblade works differently: it scrapes the water off your hands with a powerful jet of cold air, and claims to dry them in ten seconds.

But here is the point: it uses 80 per cent less energy to do it. It uses more air but in an effective way. It works, so it costs less to run.

In the weeks since the end of the Barriers to Choice Review, I have been spending my time writing a very short book bout the submarine passage of the Dardanelles in 1915. I've also been spending my baths - a lazy but enjoyable habit - re-reading Robert Graves First World War classic Goodbye to all That.

Most of these are events a century ago, but the message always seems to be the same.  All the equipment by the opposing sides, from the grenades to the periscopes, were better quality on the German side than they were on the British side, at least for the first few years of the war.

I have been wondering why this seems to be inevitable in British history, at the same time as listening to the constant phrases on the radio news - "the Treasury has rejected" or warned or vetoed...  There seems to be a UK tradition of blind and pointless cost-cutting at the Treasury's behest - with devastating results, from our failure to invest in industry right through to our failure to invest in people.

Now, I've recently been working in the Treasury - admittedly as an independent reviewer.  They are highly intelligent, civilised and imaginative people.  And it is no criticism of any Treasury that they warn.  That's their job.  What is a problem is when that warning becomes a constant and powerful voice in favour of short-termism - and even worse when that voice has the power that the UK Treasury does.

So when I heard the announcement yesterday that all government departments have to bring forward plans to cut another ten per cent of their budgets, I thought - here we go again.  It's the British Disease.

I write this as rather an old-fashioned kind of Liberal.  I think the deficit is too high.  I believed the Labour government's management of public services has made them far too expensive.  I don't want the UK to fall into the pathetic powerlessness at the hands of international bankers that has been reserved for Cyprus and Greece.

But you can't just carry on cutting percentages.  As the systems thinker John Seddon says: when you try to manage services by managing the costs, paradoxically the costs go up.  I think I should re-christen this insight 'Seddon's Law'.

Unless there is a big idea behind the spending cuts - an idea of how it might be possible to bring costs down - then we will be right back into the British Disease, which means backwardness and ineffectiveness and probably bluster for another generation.

What we need is a revolution in effectiveness.  Do that successfully and we will be able to reduce ten per cent or more from public spending.  I've explained a little about how it might be done in my book The Human Element, and John Seddon's work is definitely a vital part of what needs to happen.

That is the reality of the situation.  Another ten per cent cuts without organised purpose means more costs in the long-term - and as the benefits and welfare changes come into effect, we will begin to see what an over-stretched services really look like.  It is the perfect time to commit the nation's services to effectiveness

Which brings us back to Dyson's Airblade.  It is a metaphor for the approach to spending we need.  If we have services that work like the old dryers, and need to be turned on over and over again before they have any effect, then it is hardly surprising they cost so much.

If we can have a revolution in effectiveness, which is bound to mean investment - possibly even revolution - then we can cut costs.  But we can't just play around with it.

Think about it next time you're drying your hands in a public place...

Wednesday 27 March 2013

The real reason things don't work


Back in 2003, a Roman Catholic priest told the story of one of his constituents who had given her papers over to Lunar House - the central hub of the Border Agency - and they had lost them, and left her in miserable limbo without apparently any qualms.  It led to an amazing church inquiry into the way that the bureaucracy dealt with people there, and thence to the Independent Asylum Commission.

I have a nervous shiver down my spine when I drive past Lunar House in Croydon (which I do far too often) even now.  It gives me the heebie-jeebies.  It was like some kind of monster that only knows two emotions: rage and fear.

There is no doubt that the Border Agency is an extreme case of hollowed out institutions.  They neither managed to treat people with humanity, nor managed to provide effective and fair controls over immigration. If they had managed one or other, it might have been possible to forgive them - as it was, I can't think of an organisation that more thoroughly deserved being broken up.

And lo and behold, that is exactly what the Home Office is going to do

I find myself linking it in my mind with the Francis proposal that doctors and nurses should be prosecuted for failing to blow the whistle on abuse - a staggeringly ineffective idea.  I know an NHS whistleblower and have heard directly from her what the system puts her through.  A far better idea would be to make it a criminal offence to suppress whistleblowers, but that is another story.

What this combination of stories suggests to me (and I know this is a continuing theme of this blog) is that the failures of the Border Agency is really the tip of a huge iceberg.

When it came into office, the new coalition realised that there was a serious problem in the way the last government centralised control over public services.  They got rid of many of the most corrosive targets, but unfortunately their understanding of quite how dysfunctional our institutions had become has never quite caught up with the reality.

Consequently, they still embrace major IT investment when there should be an emphasis on building relationships.  They embrace centralised procurement when anyone who has tried to extract an invoice from the Whitehall machine will know where that will lead.  They embrace shared back office services despite mounting evidence that it makes services more expensive.

Each of these approaches make our public services less effective - less able to deal with diversity, as the systems thinker John Seddon explains.  And if our institutions don't work, the demand on them mounts and they get more and more expensive - especially when contractors are paid just according to their manipulation of the demand.

I find it enormously frustrating that a government, where the Lib Dems are playing an important role - and which I therefore have a great deal of sympathy for - is continuing half-in, half-out of the disastrous old New Labour model.

But there was a glimmer of light today.

Home Secretary Theresa May said during her announcement that hiving the Border Force off from the Border Agency last year had been a great success.  It showed what she called the benefits of having smaller structures.

Quite so.

So if she reads this blog (which of course she won't) I hope she will see the implications of this.  We know, for example, that:

  • Small police forces catch more criminals than big police forces.
  • Big hospitals are more expensive to run per patient than small hospitals.
  • Patients recover quicker when they know the doctor. 
  • Small schools have more choice, more after-school activities, more tolerance and better results than big schools.
If you want the evidence, you will have to read by book The Human Element, but it is overwhelmingly in favour of the effectiveness of human-scale institutions.  So why is so much effort still being expended in government in pursuit of non-existent economies of scale?

Tuesday 26 March 2013

Antidote to Double Dip Winter

Now that we appear to be getting a Double Dip Winter (I blame George Osborne), I thought this picture of the lane behind my house - with my son Robin coming home from school in midsummer - might cheer everyone up a little.

It has certainly made me feel a little warmer just looking at it.

Monday 25 March 2013

Going down the wormholes through time

I realise this blog is becoming, in some ways, a kind of conversation with Jonathan Calder - which I hope will allow me to steal a little of his glory.

But I am fascinated by his blog yesterday: his story about the two children of soldiers from the American Civil War still being paid pensions by the US government is one of those strange tales which reveal that human history is not quite as long as it seems.

Apparently, the last Civil War widow only died in 2003.

I was thinking about this, having just come across a letter to the Morning Post on 12 April 1919 from a cousin of mine called Dulcie Boyle, where she says this:

"My father told me that his father had been told by his uncle that the latter's grandfather had danced with the old Countess of Desmond, who had told him that Richard III, instead of being hump-backed, was a very handsome man."

Now, as we know, Richard III has since come to light and apparently had some curvature of the spine, but was not exactly the hunchback of popular mythology.  The Boyle grandfather was born in 1784.  His uncle was born in 1733.  I met Dulcie Boyle's brother before he died in 1967.  That gives us eight links from me back to Richard III I think.

There is some confirmation of the story from other places.  Other historians report that the old Countess of Desmond dined and danced with Richard III and said he was the handsomest man in the room except his brother Edward and "very well made".

I also came across this from the Morning Post shortly afterwards (still 1919):

"Mr Paynton, the magistrate, related to my son, the Rev. Sydney Turner, the following particulars: when a boy, about the year 1810, he heard the old Lord Glastonbury, then at least 90 years of age, declare that when he was a lad, he saw and was often with the Countess of Desmond, then living, ab aged woman.  She told him that she she was a girl, she had known and frequently seen an old lady who had been brought up by the former Countess of Desmond, who was noted for her remarkable longevity...  This lady mentioned that this aged Countess of Desmond had declared that she had been at a court banquet when Richard was present, and that he was in no way deformed or crooked."

So, would Richard III's spinal problems have been at all apparent?  I think we should be told.  In fact Lord Glastonbury was only 68 in 1810, but still...

But there are a lot of these strange wormholes through time.  I know one leading Lib Dem, who is younger than me, and whose father lost a leg at the Battle of the Somme.  We forget that human life is long enough to straddle very different ages - someone who watched the Armada in the Channel as a child might well have lived into the English Civil War.  Someone who could remember the guns at Waterloo might have been driven in a car with a man with a red flag in front.

Lord Brougham, the famous pre-Victorian statesman, died in 1868.  When he was a boy, he met an old lady who had actually seen Charles I being beheaded in Whitehall in 1649.

I must say, I enjoy these stories.  During my lifetime, I have met many people who remember the nineteenth century.  I hope by the end of my life to have known many people who will know the twenty-second century.

If the human lifespan stays stuck within a century usually, the experience of one lifetime can - via the people you meet - extend very much further.  The nineteenth to the twenty-second century is four different centuries after all, and human history gets a bit blurry beyond ten centuries.  It is amazing that human memory can almost extend that long, if it is extended via meeting people.

I am 54.  Only four of my lifetimes would take us back to Jane Austen's heyday.  It isn't really terribly long.

The Countess of Desmond, incidentally, is supposed to have died in 1604 aged somewhere north of 120 years old.  She had just sailed from Cork to Bristol to complain about her castle being appropriated by Richard Boyle, Earl of Cork (no relation of mine), and walked from there to London to petition James I.  It is said that she travelled with her invalid daughter aged 90, who was pulled along behind in a cart.

This was not what killed her.  That was apparently falling out of a tree, though contemporary historians argue whether it was an apple tree she fell out of or a nut tree.

Sunday 24 March 2013

What 'the hoods' taught me

I was on Start the Week a couple of weeks ago together with Ken Loach, but one of the other panellists - I think the one intended to balance Loach's socialism, with her mildly Thatcherite hair-style  - was a fascinating researcher from the thinktank the Centre for Policy Studies, called Harriet Sergeant.

Harriet is not your average revolutionary.  She is from a deeply Conservative think-tank.  But I've just finished her book about south London gangs, Among the Hoods, and it is explosive and extremely challenging.

It has taken me so long to read partly because it was so fascinating, and so honest.  Loach questioned on air whether the quotes from the gang members were recorded, but they have the ring of truth about them - especially the moment when they meet Harriet in Victoria and are amazed by the buildings.  I've worked in Brixton myself and was astonished how little some people there travel around London - they go by taxi to Heathrow, and to Ghana and back, but often no further than Stockwell in their own city.

Harriet never seems to have quite meant to befriend a gang leader, and he ends up in prison at the end of the book.  But his irrepressible personality, and her own determination to get him a job, drives their relationship on.

It is the kind of book that everyone who has thought a bit about our future as a nation needs to read, partly because of the picture it paints of just how tough it is to be a young black man growing up in inner city Britain - the danger, the temptations, and the sheer intractability of the system that is supposed to be there to help them.

But partly also because of the picture it paints of the target-driven charities, and the hopeless state institutions, that are supposed to help but which manifestly don't.

This is the real challenge of the book, and it fascinated me because of what I wrote in The Human Element about how our institutions have been hollowed out, especially under the previous government with their targets - but the damage has continued since.

Job Centres, youth charities and the welfare system alike get Harriet's lashing, as we see how they trap young people in debt and do almost nothing to lift them out of it - especially when the education system has already failed to teach them to read and write.

For me, these are central issues - way beyond the comparative advantage of state versus private sector.  It is that our institutions exist primarily to meet targets, or to get their grants renewed, and their most desperate clients are - at best - fuel to help them achieve this.

Harriet Sergeant didn't say this, but her book has convinced me that it is so: the real social crisis in the UK is that our welfare systems don't work.  They never did work that well, but now they have been hollowed out - by IT and targets.

That is why they are so expensive.  Because they fail, their workload rises, and so does the demand and the desperation, and they fail over and over again.  It convinces me again that they only way to increase the efficiency of the public sector is not to cut it indiscriminately, but to make it effective.

I agree that has been the objective of the public sector reforms since 1997, but no objective has so backfired.  Being effective means finding professionals capable of making relationships, and giving them the power to act - precisely the opposite of the direction of travel over the past generation.


Saturday 23 March 2013

Darwin, Lubbock, Liberalism and the meaning of progress

"It is surely unreasonable to suppose that a process that has been going on for so many thousand years should have now suddenly ceased... The future happiness of our race, which poets hardly ventured to hope for, science boldly predicts.  Utopia, which we have long looked upon as synonymous with an evidence impossibility, which we have ungratefully regarded as 'too good to be true', turns out on the contrary to be the necessary consequence of natural laws, and once more we find that the simple truth exceeds the most brilliant flights of the imagination."

The 'process' means evolution.  'Our race' is the human race.  This was how John Lubbock ended his 1865 book Prehistoric Times, and I heard it yesterday in a fascinating lecture by Janet Owen today (her book is out shortly), at a special day of lectures on Lubbock at the Royal Society

I was particularly excited to hear this for two reasons. 

First, because it was what Janet called an ‘overtly political’ extension of Darwin’s evolutionary message – human progress was heading towards happiness. And Lubbock was in a position to understand evolution: he was Darwin’s neighbour, his pupil, his great popular interpreter, and a pallbearer at his funeral. 

Lubbock died a century ago (hence the Royal Society’s celebration), the originator of bank holidays, the doughty fighter for the first Ancient Monuments Bill, the saviour of Avebury circle – and of course the grandfather of our own brilliant and pioneering Eric Avebury

It is no coincidence that The Origin of Species and the Liberal Party both emerged in 1859. The party was and is bound up with the idea of enlightened human progress – human evolution in its broadest sense. 

The second reason I was fascinated by all this is that Lubbock was my great-great-grandfather. His daughter Ursula was his secretary in the later years of his life, and was my great-grandmother. She held me at my christening and always had a copy of Liberal News in her handbag, along with some knitting (perhaps this is what really made me editor of Liberal Democrat News, as I was for six wonderful years). 

She continued the family tradition as the liberal wing of the eugenics movement (yes there was one), as a leading feminist and by campaigning against the misuse of nuclear technology. It was a Liberal tradition too, of the central belief in the perfectability of humanity – based on what Darwin called the "mutation of species".

I’ve been thinking about the belief in evolution in the broadest sense at the heart of the Liberal soul because of a note on Facebook by a friend of mine, boasting that she had voted Labour for the first time – and wondering why I could never do that. 

It is because, however cross or exasperated by the party I am occasionally – specifically about the government’s support for nuclear energy and its failure to build a new local banking infrastructure – I am and will remain a Liberal. 

But what I have always found most exasperating – most of the time – is the party’s failure to see beyond the immediate and to articulate their purpose and central beliefs. 

Luckily, I had reckoned without the multi-talented Mark Pack, who has created one of his brilliant visual representations of what the party is for. It is an important breakthrough and, although it doesn't mention Darwin, I very much recommend it.  Here it is.

Friday 22 March 2013

Why I have donated 82p to Barclays this year


The Great Fire of London in 1666 turned the matchwood, half-timbered houses of London’s Lombard Street into ashes, where the medieval goldsmiths from Lombardy had first set up their tables. A new street of brick and stone sprung up over the decade or so, and the bankers were back. Among them in the 1680s, under the sign of the Bolt and Tun, was a prosperous banker called Job Bolton.

Bolton, like so many of his profession, was an outsider from the establishment: he was a Quaker. He could hold no public office. He was barred from the army, navy and universities. His fellow Quakers were a persecuted minority, especially in Gloucestershire, where a number of them were languishing in prison and where Bolton, as a senior Quaker, was particularly concerned about them. 

He therefore made has way out of London to the west to Rickmansworth, now a London suburb, then a wealthy village within reach of the metropolis, and also the country seat of the bishop of Gloucester, to plead for some of those who had been imprisoned for their beliefs.

This is why the upright, moral Quakers so irritated the establishment with their rigid Puritanism, and also why that rigidity gave them such an advantage as bankers. Because Quakers remove their hats for no man, Bolton immediately torpedoed his cause by refusing to take off his broad-brimmed Quaker hat. The bishop was so furious at this slight that he stormed across, grabbed it from Bolton’s head and flung it across the room. You did not have to be a Quaker to want a man so principled and so rigid to manage your financial affairs.  If you had financial affairs in the 1680s, you did need somebody with a cool head, even if it was covered with a wide-brimmed hat.  

It was Bolton’s apprentice, a 21-year-old son of a textile merchant from Cirencester, another Quaker called John Freame, who set up shop himself as a goldsmith in Lombard Street in 1690 - and founded the bank that became Barclays.

You can find out more about the bizarre history of Barclays in my book Eminent Corporations.  But the question is how a bank begun in such high morality should have ended up quite where it has.

I still have my business account with Barclays, but after the last round of bonuses - £39.5 million to senior staff - I think it is time to go.

They have 48 million customers worldwide.  We have all donated approximately 82p to the bonus pot this year.  It doesn't sound much compared to their bank charges but we have to do it every year, and I am fed up with it.

There seems no understanding among those who run the bank that these kind of bonuses corrode our lives as well.  We pay it out, and we pay all over again as the price of houses goes up and the price of many other things too.  We pay out a third time because they are being paid for activities that are corroding the real economy of the UK, economically and morally.

Added to which, I had a call from my Barclays business account manager yesterday afternoon who asked me if I had time to talk and then asked me to confirm my date of birth.  I said I don't reveal personal data over the phone - they had phoned me after all - and they sounded surprised.

It may have been a scam, of course, but I suspect it was a version of the same corporate bone-headedness that shells out £39.5 million to the richest and least useful people in the nation.

Thursday 21 March 2013

Not another housing bubble, please...



Ah well, the Budget.  I am of course delighted that the Lib Dems have managed to keep their promise to  make the first £10,000 we earn free of tax - which really is the kind of tax cut that can help the lowest paid.


Equally I am pretty horrified at the planning permission for another nuclear energy white elephant, but relieved that it will probably never be built - it is just too expensive.

But what bothers me most in the budget is the likely side-effect of the help for people to buy homes.  Help like this can only increase the cost of homes another notch, and make them that much less affordable for the next generation.  It is a frightening thought that, if the average UK home was to rise in value in the next 30 years like it has in the last, our children will face homes costing £1.2 million on average by 2043 - and I am quite sure wages won't rise that fast.

This is very important, and not just because the Westminster elite seems to be unable to grasp policy levers that don't simply replicate the conditions of the last bubble - just as the banks want.  And each bubble ratchets up the damage to our lives and social fabric.  They also seem unable to grasp why house prices rise.

In the 1930s, the heyday of middle-class house buying, a new semi-detached cost just over £500, available with a down payment of £50 (that is why I've got that poster at the top).  This was when mortgages cost about 10 per cent of a middle-class incomes and were paid off within sixteen years. 

The most important moment when we lost that opportunity was in 1980 when, as a result of the abolition of exchange controls, Sir Geoffrey Howe abolished the so-called Corset, which regulated the amount of money pouring into the mortgage market - and did nothing to replace it.  

There is always an argument about why house prices rise, and why those prices accelerate. Politicians like to say that it is a shortage of homes, and there certainly is a shortage and it doesn’t help. But if it was only about housing shortage, you would expect massive price rises in the late 1940s, whereas – after a burst after the war – house prices stayed completely steady from 1949 to 1954. 

In our own day, planning permission has already been given for 400,000 unbuilt homes in the UK, yet prices still rise, as they do in places like Spain, where there is little or no planning restraint.

Politicians get muddled about this because building houses sounds like a tangible thing they feel confident to tackle (though they usually don’t), whereas they don’t feel confident about mortgage supply at all. Yet that is the other side of the process: inflation is about too much money chasing too few goods, and the main reason for the extraordinary rise is that there has been too much money in property, both from speculation and from far too much mortgage lending.

Sometimes this came from people’s rising incomes, which translated into rising home loans. Sometimes, more recently, it was bonuses and buy-to-let investors. But most of the time, it has been a catastrophic failure to control the amount of money available to lend, and which has fed into all the other trends to create a tumbling cascade of money, with its own upward pressure on incomes and debt until the vicious circle now seems quite unbreakable.

This is why only half of London’s homes are now owner-occupied.  This is why London is rapidly shifting from property-owning democracy to a city of supplicants to the whims of landlords and rental agents.

Yet here we are - another budget and another politician has a go at boosting house prices to kick-start recovery, unaware of the rack it has become - not just to home-owners but to renters too.  Help home-buyers, definitely - but only in a way that begins to bring down house prices.

Find out more about this in my book Broke: Who killed the middle classes, out next month!

Wednesday 20 March 2013

The real trouble with Cyprus

During the 1998 Asian currency crisis, a desperate finance minister whose currency had come under sudden attack in the world markets called the IMF for advice. But it was after 5pm Washington time and the IMF officials had gone home.  The security guard told him he would have to make up his own mind.

The IMF may not have been there when they were needed them - at least outside Washington office hours - - but they were always able to help some of the most unpleasant third world dictators, including Mobutu, Moi, Samuel Doe, the Argentine junta, Marcos and Pinochet - all regarded as useful to the USA in the Cold War. Of the $26 billion of foreign aid flowing to the Philippine government under his regime, Ferdinand Marcos managed to salt away $10 billion into secret foreign accounts.  Worse, the whole of the $4.4 billion bailout to Russia in 1998 disappeared within days, siphoned out of the economy through secret offshore bank accounts in Cyprus.

Here is part of the problem of tax havens.  The drug lords, black marketeers and mafiosi use the offshore centres to launder their ill-gotten gains. Cyprus alone handles about $2.5 billion a year from the Russian black economy. 

The trouble with the Cyprus bail-out is that the authorities know that Cyprus is a tax haven.  Tax havens are an invention of the British government incidentally – though Cyprus is one of the less reputable ones that takes the hot money and sends it to the more reputable ones like the Bahamas, which then send it to Jersey and thence to the City of London, and so on .... 

That is an explanation for the unprecedented demand for all those with bank accounts to pay ten per cent: they know some of the money is hot.

But two aspects of this whole business rather stick in the throat.

First, if finance ministers are finally concerned about tax havens, why on earth do they not tackle these problems more directly – close the loopholes for the tax avoiders and evaders rather than hitting everyone with the bill (as if we don’t all pay for tax havens in one way or another)?

Second, the great tragedy of tax havens is that they ruin the people who live there.  Jersey has more than 600 banks but nobody can afford property there.  Their agriculture is in a state of collapse because nobody can afford to work there if they are not in financial services. 

This is because of the version of a Casino Effect (I coined the term).  Gambling money tends to drive out everything else, because it is so profitable.  In this same way, the City of London is slowly impoverishing the UK – but so slowly that we don’t notice.  In tax havens, the same process happens much faster.

And so it is that the people of Cyprus have to suffer not once but over and over again.

Tax haven status is tolerated because of lobbying by the tiny elite that benefit, but also because governments – and the UK government particularly – believe that small island states are not economically viable.

The idea of bottom-up economics, where small economies and neighbourhoods can drag themselves up using their own resources, is only just emerging.  Because it is a slower but more effective means of economic development, it is a key idea in the battle against tax havens and money-laundering.

Find out more in my book Money Matters.

Tuesday 19 March 2013

The nearest thing to an intellectual guru?

I'm very grateful to Jonathan Calder for calling me "the nearest thing the Liberal Democrats have to an intellectual guru".  If true, this may be a measure of the Lib Dems intellectual difficulties, but let's look at the hopeful side - it makes me feel I have something to live up to...

So let me, for a moment, act like the nearest thing to an intellectual guru.  I promise it won't be for long, but these somewhat philosophical issues are important.

"I suspect I have more time for postmodernism than he does (nor do I believe the concept needs a hyphen)," says Jonathan.  Which is good: we can have one of those rare things: a Lib Dem debate about ideas (or hyphens).

He recommends that we read Richard Rorty's Contingency, Irony and Solidarity, which I also recommend.  He also defends postmodernism in his essay 'Philosophy as a transitional genre' and says this:

‘Once again, I am telling the old Nietzschean story about how ‘‘Truth’' took the place of ‘‘God’’ in a secular culture, and why we should get rid of this God-surrogate in order to become more self-reliant."

This is important because it is the intellectual foundations of the modern world, that truth is relative.  I have my truths; you have yours.  It is the basis of tolerance, but it is also the result of a corrosive kind of liberalism - which destroyed all those things that kept mankind in tyranny, yet keeps on corroding - family, community and all the rest.

It may indeed be impossible to find the objective truth in this world, but that doesn't mean that nothing is true.  What's more that fact should be absolutely vital to Liberals everywhere, because it is the antidote to tyranny.  If we are caught in the Matrix, or are subjects of Big Brother, and they weave their own ersatz truth around us, the only way out is to assert an absolute truth.  

We escaped from Stalin because there was an objective reality beyond.  Without that, any corporate monster can control our whims and thoughts and, after all, what is our truth against theirs.  

So postmodernism isn't enough, it seems to me.  That is why the debate about what comes next, which I am struggling to launch, is important.  So read my new ebook The Age to Come: Authenticity, Postmodernism and how to survive what comes next and see what you think.

Richard Rorty's book costs £25.99.  Mine only costs £1.99!

Monday 18 March 2013

What the end of post-modernism really means

What comes after post-modernism? I asked a couple of posts ago - and did so partly to encourage people to buy my book which (I modestly suggests) contains the answer.

I've had a number of completely contradictory responses - congratulatory messages on Facebook, a cascade of articles about the impossibility of objective truth, and defending the prevailing post-modern culture.  For Liberals, these are difficult issues - because I am suggesting there is a lazy, corrosive kind of liberalism, and we need to move beyond it to find a high, more demanding Liberalism, a Liberalism with depth, which has some chance of surviving another century.

I also had a number of comments from people who said that they hadn't the faintest idea what I am talking about.  This seems to be to be rather a fair criticism.  So I thought I would develop the following table, which tries to explain how we have moved from a tyrannical modernism to a lazy and corrosive post-modernism - and will inevitably move to what I suggest is a new kind of humanism:

The ages at a glance

Modernist
Post-modernist
New Humanist
Emerging nation
Germany
France
UK
Presiding ethic
Truth
Tolerance
Wholeness
Besetting sin
Tidiness
Relativism
Obscurity
Inspiring technology
Assembly line
Internet
Solar cell
Primary language
Architecture
Literature
Narrative
Presiding genius
Walter Gropius
Jacques Derrida
David Bohm
Cheerleader
Roger Fry
Charles Jencks
Position vacant


Since publishing the book, I have wondered whether the besetting sin of the new humanism is really obscurity, after all.  I'm not sure it isn't actually going to be pomposity - this is after all the sin of people who believe they are in communication with objective truth.  So I am going to be very careful from now on not to be either obscure or pompous if I can possibly help it.

But do feel free to join in the real debate about the future: read The Age to Come: Authenticity, Post-modernism and how to survive what comes next (Endeavour Press).  And let me know what you think!

Sunday 17 March 2013

Tough on press abuse, tough on the causes of press abuse

Am I missing something here?  We have the main political parties arguing over press regulation like St Anselm arguing over how many angels were on the head of a pin.  But the causes of media abuse - the outrageous hold that the Murdoch press had over politicians - goes unremarked.

What badly needs debate is precisely how to regulate cross-media ownership better, and how to prevent semi-monopolies of influence from building up that subverts proper media balance - and prevents prime ministers paying court to one press baron and his acolytes in particular.

As always, the most important Liberal issue - monopoly power - gets ignored in the flurry of irrelevant parliamentary excitement.

It isn't that Leveson ignored concentrated ownership, or that there has been no mention of it - Ed Miliband proposed a limit of 30 per cent of any one media type (Murdoch has 34 per cent of national newspapers) which seems to be puny.

There is also an argument that too much anti-trust will undermine the survival of our national newspapers.  Maybe - it needs to be argued out.  So why isn't it?

Is it because politicians are hopelessly obsessed with the particular?  If they can prevent Milly Dowler's phone being hacked again, they feel they can somehow clap themselves on the back and say 'job done'?

Is it because those who want to prevent the ownership debate from happening have deliberately shifted onto this theological issue which so fundamentally misses the point?

Is it because monopoly power is always the dog that doesn't bark - because Labour and Conservatives alike are blind to the Liberal issue of concentrations of power?

Or is it that they want to get back to normality: riding in the countryside with Rebekah Brooks?

There is a kneejerk political temptation to debate regulation rather than tackling fundamental causes - but it doesn't explain this terrible blindness.

So I am going to sleep through the utterly pointless debate tomorrow.  Who is going to join me?






Saturday 16 March 2013

What is coming after post-modernism


We live in simultaneous ages, and sometimes they are only given names when we are dead and gone.  It is peculiar that we should live in a country and never be told its name.

The Renaissance historians named the ‘dark ages’ and ‘middle ages’ that had gone before.  Modern historians have their ‘Victorian Age’ or ‘Age of the Enlightenment’.  Most of us think more in terms of decades.  But there are other ages and in some ways they are more meaningful, because they sum up the prevailing philosophies of life that dominate the moment in time that is ours.

The great cultural movements start with a flicker of interest in the avant garde, reacting against the prevailing abominations.  Then they grow to dominate thinking in politics, the arts, literature, design, marketing and even economics and politics.  Then they are in turn swept away by the next prevailing philosophy, and which answer people’s need for direction, frameworks, attitude and much more.

For those of us with a short attention span, these great philosophical ages might come and go unnoticed every half a century or so, perhaps less.  They are heralded and die, unremarked by the mass of humanity.  But they are potent – and much more potent than you would think for the earnest and obscure debate about them among earnest and obscure academics.

I was born in 1958.  It was the year of Sputnik and CND but it was also the time that modernism had finally emerged from the hothouse of German architecture salons, arts cafés, and intellectual magazines. 

Throughout my childhood, the transformation of modernism from avant garde obscurity into a prevailing philosophy for urban living was emerging, and the sounds of battle were everywhere.  There was Jane Jacobs and her fellow New York mothers challenging city planner Robert Moses and his plan for urban motorways.  There was the poet John Betjeman, defending the doomed Euston Arch, and whose Collected Poems became a bestseller that year. The very word ‘progress’ seemed to have been co-opted by the modernist forces, in unstoppable alliance with the developers and highway planners.

But there came a point when the challenge became overwhelming, and the architectural critic Charles Jencks dated that moment very specifically: “Modern architecture died in St Louis, Missouri on July 15 1972 at 3.32 pm (or thereabouts),” he wrote. 

Jencks was the prophet of what he called ‘post-modernism’, but it was architecture he was particularly interested in.  The date he chose for the end of one philosophical age and the start of another was the moment of the planned explosion that demolished the Pruitt-Igoe Flats in Chicago, one of the most egregious examples of modernism as prisons for the poor.  But that was back in 1972.  It was much clearer a decade after the destruction of Pruitt-Igue that some new approach was emerging. 

I first grasped what post-modernism might be when I saw the strange pastiche of ancient Egyptian art that was the new Homebase store in Kensington around 1985.  You could see the same underlying objectives in the pastiche buildings, like Robert Venturi’s Chippendale-style skyscraper.  The modernists regarded this as an outrageous betrayal of their values. 

But here is the question.  If post-modernism is the defining frame for our own age, then what is coming next?  Can we see something emerging already?  My answer is that we can, and exactly what it is – and how it will affect our lives – is in my new ebook The Age to Come: Authenticity, Post-Modernism and How To Survive What Comes Next, published by Endeavour Press, and it follows up the arguments I made ten years ago in Authenticity.

We are deep inside the post-modern age now.  It is hard to imagine a style that is somehow different from the Art Deco pastiches, the Tudor pastiches, the classical pastiches going up in concrete everywhere we look.  Or the novels about sad middle-aged men that take place simultaneously now and in 1848.  Or the bizarre inability of the fine arts world to go beyond Ã©pater les bourgeois, when the bourgeois they wanted to shock have long since packed up and left the stage.

The fine arts world gives the game away.  Modernism reached its zenith when the money began to follow it.  It became no longer a brave critique of the status quo, but the status quo itself.  The same thing has happened to post-modernism, now that the Brit Art revolution – with its irony and jokes – has become the establishment.  

It is no longer a brave critique of modernism, an ironic understanding of the social construction of reality, a response to the linguistic philosophies of Jacques Derrida and Michel Foucault.  It is where the money is, riding the virtual wave, virtual reality and all the rest.  It sits on the throne and dominates our lives.  So the time cannot be too far away when it becomes a caricature of itself, and – with another great intellectual clash – dissolves into history, leaving behind the seeds of the next age.

What comes next will dominate our children’s lives, and maybe our grandchildren’s lives as well, before it eventually compromises with the prevailing economic orthodoxy as well, and is swept away in its turn.

The next age, the coming age, will try to challenge our contemporary conviction that nothing is true and everything is relative.  It will not reach back hopelessly to previous ages of certainty, though people may accuse it of that: we have lost our innocence about social reality. 

It will not pretend it is somehow possible to work out unambiguously what is true in this world.  It will not turn its back on the understanding and tolerance we have generated with the social construction of knowledge.  But it will not be limited by that any more.

We are moving into an age that will try to satisfy our need for what we have lost, looking around for something we can be sure of – something we can use to measure everything else against – and it is beginning to find it in ourselves and our humanity, and will use that to seek a way out of the paralysis of post-modernism.

How do I know?  Because although the new age is not yet upon us, the critique of post-modernism is beginning to emerge that will bring a new project – and these great ages are, each of them, a project to find directions out of the dead ends thrown up by the project before. 

We can’t know for sure the parameters of the coming age – the new age of humanism – but we can begin to glimpse a few features.  And, as they say, forewarned is forearmed...

The Age to Come is a book of recent essays, and it suggests that the first shoots are emerging of a new age which looks set to sweep post-modernism away, based on depth, authenticity and human relationships, which will change the lives of our children completely.  See what you think and let me know...


Friday 15 March 2013

How Miliband stole a march on local banks

I would be staggered if Ed Miliband ever read any of these blogs.  I would be even more astonished if Ed Balls or any of those other monsters of deficit had done so.  So it must be largely coincidence that, 48 hours after I wrote my blog on doomed lending measures that were still trying to use the defunct lending infrastructure of the big banks - the Labour leader should call for a new regional banking infrastructure.

This is the central economic issue of the moment - the most important thing a UK government could do to boost the economy (I say 'UK' government because most other European countries already have a regional lending infrastructure).

So although I'm glad Miliband has come out and said it, I am frustrated that the coalition has allowed him to do so.

It wasn't as if this is a new idea.  The coalition agreement says:

"We agree to bring forward detailed proposals to foster diversity, promote mutuals and create a more competitive banking industry."

It was in the Lib Dem manifesto.  But bizarrely, most politicians - Lib Dem and Labour - are clinging to the idea that they can force the banks to lend to small businesses, quite oblivious to the truth that they are no longer geared up to do so.  They have no local infrastructure - that's why we need a new one.

There is a new clause in the Financial Services Bill which lays a duty on the regulator to make sure the banking industry is diverse, thanks largely to Susan Kramer and colleagues, but that is all.  We are three years into the coalition, and still there are no bold proposals to create an effective lending infrastructure.  Yes, it is frustrating.

So if he didn't read it here, what explains Miliband's sudden conversion to local banking?  Especially as Ed Balls used to describe these ideas as 'jurassic' - by which I believe he meant they were a little out of date.

The answer that Maurice Glassman is more influential that he seems and Labour's small business task force has recommended it, and he seems to have used the opportunity of his Newcastle speech to run with the idea.  There is a lesson here about how policy gets made: something about opportunities and having the right conversation at the right time.

I hope the coalition will now bring forward their own plans, preferably using a broken up RBS as the basis for a new regional banking network.  

I hope Ed Balls is also onside now.  Nobody wants to find they are the jurassic one after all.

Thursday 14 March 2013

Why press monopoly is much more dangerous

I remember reading a letter to the Evening Standard in 2007 which highlighted the problem of monopoly.  

The man who wrote it was describing his girlfriend’s flight from Romania to Heathrow by British Airways.  BA (a privatised utility) had changed planes at Romania and had failed to put anyone’s bags on board.  The crew knew this, but still the passengers were allowed to wait hopelessly at the carousel for two hours for their non-existent baggage, which BA staff knew perfectly well was not going to arrive.  It actually took three days to get them.

What do you do about that kind of thing?  Well, you can regulate - and that makes some sense - but what really needs to happen is to look at the structural reasons.  BA is too big.  Heathrow is a nightmare.  The flights from Romania are operated by only one airline.  And so on.

I thought of this listening  to the argument this evening about press regulation.  It isn't that press regulation is unimportant.  It certainly needs to happen.  But it is far less important than tackling the central issue, which is the concentration of media power into only a few hands, which means that regulators get muzzled by frightened politicians.

Because monopoly power is a Liberal issue - neither Conservatives nor Labour politicians really understand its importance - the whole debate tends to surround the relatively irrelevant issue of regulation.

Leveson made recommendations about breaking up media ownership.  Lib Dems have made speeches about it.  But still the core of the debate is elsewhere, which is after all just what Murdoch and Rothermere and all the rest want.

So let's take part in the debate about regulation, but don't let this overshadow the far more important aspect: a good press is a diverse press, owned as widely as possible - which does not allow press barons to collect the media into their hands alone.  Tackle that one and regulation becomes a good deal less fraught.

Wednesday 13 March 2013

More doomed schemes for bank lending

I stood in the gallery at the Brighton Metropole during the Lib Dem conference last weekend, while my eight-year-old read a Beastquest book at my feet, and listened to Nick Clegg doing his Q&A on the economy.

I missed the kerfuffle about secret courts which came later, and I wrote yesterday how impressive I thought he was.  He has enough problems without me offering him advice, but his support for the Funding for Lending scheme was profoundly wrong, and I need to say why.

Politicians in power tend to think their efforts are somehow in proportion to the amount of money they are spending.  It must feel like that to them.  Because £68 billion has been made available to lower the costs of lending for banks, it must be hugely significant.  It isn't - it is a major irrelevance.

It is irrelevant because the big banks are no longer set up to lend to small, productive business.  

How can I put it more clearly?  They don't have the infrastructure, the managers on the ground who know the local economy.  They can only judge applications by national criteria which tell them not to lend.  The banks are set up to re-create the conditions for the last asset boom and ride the wave.  They are not useful infrastructure any more for rebuilding the economy.

Then, about 36 hours after I was in Brighton, the figures confirmed what I say.  The banks have drawn on only a fifth of the money and net lending has actually contracted by £2.4 billion.

I know serving politicians find it difficult to see outside the existing institutions.  But there is now no more important issue for the Lib Dems, politically and economically, than providing an effective lending infrastructure for small business.  What the political parties have to grasp - and I don't know why they have been so slow on the uptake - is that the big banks are not dragging their feet.  They are not somehow persuadable to lend more.  They are no longer geared up to do so.

Ever since they came into office, the coalition has invented more labyrinthine schemes to encourage them to lend, from Project Merlin onwards.  They don't work, but still the penny hasn't dropped and it is now almost too late for them to make anything happen in time for the election.

Even the Treasury is showing signs of understanding the basic problem, but the political will to tackle it seems to be lacking - because the politicians prefer to be cross with bankers than to understand the problem and do something about it.

This is what they have to do.  RBS has to be split up into effective regional lenders before it is privatised.  But most important, the banks have to be cajolled into creating the community banking infrastructure that can lend where they can't - as they do under the Community Reinvestment Act in the USA.  The community development finance institutions in the USA are able to get money to where it is most effective within weeks.

Here is the real point.  There is no more important economic issue than the need for local and regional institutions capable of lending.  Other European countries have it, but we don't.  Some of the basic work has been done as Susan Kramer explained recently. But ministers - and Lib Dem ministers in particular - need to understand the basic problem, and then it can be solved.

It would be a tragedy if our party had spent five years in power, endlessly reinventing doomed schemes to help the big banks lend more - then the real problem is they can't.