Wednesday, 30 July 2014

British business can be so contemptuous of customers

I had a brief lesson yesterday evening about what is wrong with administration, public and private, in the UK after unfortunately entangling myself with the Direct Line call centre.

This is no bureaucracy, after all.  It isn't the public sector.  But unfortunately, in a weak moment some years ago, I seemed to have taken out car insurance with them.

My call was to facilitate what should have been a simple business of extending my car insurance to cover a brief drive in France later this month.  It was the culmination of a private sector bureaucracy encounters while undergoing the trauma of trying to buy and sell a house recently, and it really isn't at all impressive.

What strikes me most of all is how unresponsive and inflexible they are.  But let's stay with Direct Line.

It took me just over 40 minutes and four different phone calls to talk to anyone human at all - and I don't think, judging by their website, that this transaction can be carried out online.

Still, I happened to have the phone to my ear when the human being answered and the transaction was pretty quick.  It was then that I noticed that my card details they keep for me are out of date.  Could I change those at the same time?  I had after all just paid using the new card for this French trip.

No, because that was a different department.  I could be transferred but would have to go to the back of the queue.

I said the life was too short and gave them my phone number, and asked them to call me.  No, they couldn't guarantee it.

I tell you what, said the man.  I've just checked and the accounts department has no calls waiting.  Shall I put you through now?

Clever move this one.  Of course I said yes, and went through the usual hideous recorded messages, only to discover - as he must have known - that there was a very good reason why the accounts department had no calls waiting.  It was closed.

Now, let's unpack this a little. There is no good reason these days why any consolidated insurance company should not be able to deal with all my transactions in one call.  The US insurance giant MetLife has a new app that allows them to see into all their 70 different and incompatible databases and see what each customer needs. Guess how long it took to build? Ninety days.

Once again, UK business clings to outdated technology - big IT systems - which make them inflexible and lock in all the inefficiencies.

But there was one other infuriating element of the experience.  Like most call centres, we started the ordeal with the obligatory recorded message explaining that they are dealing with unprecedented demand and there is therefore a wait (they were right about the wait, and I paid for it via an 0845 number).

I am an admirer of the system thinker John Seddon, and find myself approaching these issues as I believe he would.  Are these periods of high demand not predictable?  Why don't they organise their rosters around the patterns of demand, rather than squeeze their customers to fit in with their inflexible rosters? 

As it was, the man I spoke to met his target for the time taken to get me off the line, and they were happy.  More about these issues in my book The Human Element.

All of which makes me think three things:

1.  Once again, why is UK business so timid, so inward looking and so contemptuous of their customers - presumably because they are so often consolidated beyond usefulness?

2.  This isn't an issue of public versus private, but even so...

3.  How do we prevent Whitehall from believing that this is an efficient model for public services?

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Tuesday, 29 July 2014

Let's celebrate Englishness in school

My cousin Sally is over from New Zealand, which involves a great deal of robust exchanges, mainly about child-rearing.  Sally is scary but absolutely right.

One of the things she asked me is whether the children have to sing patriotic, morale-boosting songs in school, like they do over there.  In other words: is there an English equivalent of 'It's Cool to be a Kiwi'?

I asked my ten-year-old and he couldn't think of an equivalent, and I must say I can't either.  After all, we English do have an aversion to That Kind of Thing, and I'm not altogether sure we are right to have.

Certainly, the American hand on heart at school assembly, while they are saluting the flag, rather sticks in the throat - and is wholly unEnglish.  But still.

I wondered about this when I was an an overwhelmingly Canadian wedding at a pub in Peckham.  At a late stage in the proceedings, everyone started singing 'O Canada!'

I wondered afterwards whether, if I had been at an English wedding in Toronto - or New Zealand for that matter - whether we would have sung 'God Save the Queen'.  I came to the conclusion that we might have, but with more irony.

I am a Liberal, after all.  I am wedged into a political tradition that scorns patriotic fervour, in a nation that finds this kind of thing embarrassing.  I had an article in the Guardian yesterday about Richard III and got what I deserved among the comments below the line for writing with any pride at all about even this rather distant member of the royal family.

But I have a feeling that, taken to its current extreme, this is not really liberalism - it is just world-weary cynicism.  It is post-modernism.  It believes in nothing and ends in a kind of nihilistic surrender to the forces of intolerant people who do believe something.

Let's imagine for a moment that the Scots vote after all for independence, and somehow navigate the nightmares and frightening side-effects of breaking up a union that used to be an empire.  Perhaps then the English will start celebrating what is great about themselves.

Because as long as we have things to be proud about - and we don't have to revel in those aspects of our history that nobody could be proud about - then it seems to me to give us confidence to celebrate it, and to give our children confidence by doing so.

But, and here's the rub, we have to stand for something as a nation - and it has to be more than getting richer or excluding foreigners.

Monday, 28 July 2014

On the psychology of public service incompetence

A fascinating editorial in the Guardian last week suggested a parallel between styles of military command and the sclerosis of public service management under Blair and Brown – improved under the coalition but not nearly enough.

I have been wondering about this and have been reading a psychological classic to find out more.

Norman Dixon was in the Royal Engineers before he was a psychology professor, and so he was well qualified to write On the Psychology of Military Incompetence. I have been scouring the book for evidence of what I have suspected for some time – that there is a parallel between military incompetence and public service incompetence.

One sends soldiers over the top to disaster, or leads them to freeze to death as in the Crimea. The other allows elderly patients to die of thirst.

Dixon’s thesis was that the old idea that military incompetence as something to do with stupidity had to be set aside. Not only were the features of incompetence extraordinarily common from military disaster to military disaster, but the military itself tended to choose people with these same repeated psychological flaws.

Dixon was a little too Freudian for modern taste – the book was first published in 1976 (the long hot summer when I did my A Levels and England changed forever). But I believe the basic thesis goes way beyond the military.

So here we are; here are his common features of military incompetence:

1. Arrogant underestimation of the enemy: for public services, this is about an arrogant underestimation of the problem.

2. An equating of war with sport. Not sure about that one, except for the strange way that the chairmen of NHS trusts tend to be part-timers, and therefore amateurs.

3. Inability to learn from past experience. The problem with public service incompetence is that it usually involves an inability to learn at all.

4. Resistance to using new technologies or new tactics. Public service incompetence often seems to be stuck in the technological era before last – massive IT systems in an age of apps, management systems which make it next to impossible to try anything new anyway.

5. Aversion to reconnaissance and intelligence: this is common also in public service incompetence – a refusal to listen to information from the frontline.

6. Great physical bravery but little moral courage. The lack of moral courage is almost a definition of public service incompetence, and often involves hiding from the truth about what is happening.

7. Imperviousness to loss of life or human suffering. Is there any other explanation for Mid Staffs and the other scandals in social care?

8. Passivity and indecisiveness.

9. A tendency to lay the blame on others.

10. Love of the frontal assault, which I take to mean – at least in public services – that no cleverness, no human solutions, no unconventional approaches are allowed to interfere with the business of generating outcome figures for the commissioners.  No solution which fails to achieve this is acceptable.

11. Love of smartness, precision and the military pecking order, which in public services means that at all costs the outward signs must be preserved – meet the targets, polish the corporate logo, and so on, rather than seeing the reality for what it is.

12. High regard for tradition – not so sure about that one.

13. Lack of creativity, ingenuity, open-mindedness. Precisely the problem in public services too.

14. Tendency to eschew moderate risks for tasks so difficult that failure might seem excusable. Public service managers also deluded by their own gung-ho facade, taking on tasks which they know to be impossible, perhaps knowing that heroic failure will raise their status.

15. Procrastination. Enough said.

Does this matter? Well, I think it does. Dixon felt that the military had traditionally been recruiting authoritarians with a fatal leaning towards these pitfalls.

He showed how what he called the 'authoritarian' mindset found it difficult to focus on the right information when it was coming from multiple places.  This is the heart of the problem: managers who are unable to grasp the truth - they think they are keeping an eye on the data, but they are actually relying on a few, flawed pieces of information and assumptions.

There is no parallel about perfect parade ground drill and military readiness. But our public services recruited managers in the not too distant past – and particularly I believe during the New Labour years – who were fatally wedded to unthinking target and outcome figures in the same way.

Neither could tell the difference. Most of us can see that parade ground perfection does not make for fighting ability (and sometimes means the reverse). Most of us can see that target output perfection does not make for a good service (and sometimes means the reverse).

But in both cases, the incompetents can’t see it. They are not stupid, but they really can’t see the gap – in our case between data and reality.

Thursday, 24 July 2014

The real reason we are all so heavily in debt

I see the coalition is once again struggling to keep down the size of the deficit and is missing their targets for this year.  It is down, of course, from the worrying levels of 2010.

But my colleague James Meadway has written a very interesting blog for the New Economics Foundation which suggests that, although the government borrowing total is down, the rest of the economy is still absolutely constipated with debt.

The latest debt statistics show that the average household debt including mortgages is £54,700.  Outstanding consumer credit debt is up another £5 billion on last year.

James Meadway says that the total liabilities of the UK financial sector is now over 1,300 per cent of GDP.

Why have we created the kind of economy that seems to require money to be lent as much as it requires oil to be extracted form the ground?

Debt is a problem in the private sector because of the activities of the corporate raiders - if your balance sheet is free of debt, then you are a takeover target.  The struggling consumer sector, especially when it comes to electronic equipment - rather like the airline industry - can't survive without pumping vast amounts of debt, either into the consumers or into the airlines.

Was there a moment when everything went wrong?  A moment when we plucked the apple marked debt from the tree of economic knowledge?

Well, not really.  But I've always wondered at the possibly mythical moment when a young Nigel Lawson persuaded the debt-phobic Margaret Thatcher that a society of homeowners could only be created by encouraging people into debt.

It was true - for a time.  But that fatal conversation, which seems to have happened at the Conservative Party conference in October 1979, led to everything else.  See the full story in my book Broke.

But there is another reason.  Creating debt is the way that banks create most of our money in circulation.  It is controversial, archaic and definitely not fit for purpose.  In fact, 60 per cent of the money in circulation started life as mortgages.

It is a sobering thought that, without the house price boom, we would have so little money that life would grind slowly to a halt.

It is, in short, a ridiculous way for a modern economy to organise itself.  High time somebody put forward proposals for reform.  The next question is why we don't get any of these proposals...

Wednesday, 23 July 2014

The secret of conjuring local enterprise

I must admit that McKinsey is my least favourite management consultancy. I’ve got nothing against their very clever staff and consultants, but they seem to me to be let down by the culture and tradition of the place, which gets in the way of seeing the world as it really is.

On one hand they are always chasing after the latest fads and buzzwords (a failing of all management consultants). On the other hand they remain locked into an archaic framework for understanding the way organisations work, including the so-called McKinsey Fallacy (Everything can be measured and what can be measured can be managed: false, see my book The Human Element).

But I read their latest offering with great interest – because it is relevant to the question at the heart of the project I am now running through the New Weather Institute. It is about how cities can create an entrepreneurial culture of start-ups and small business.

There is a basic contradiction in their coverage. They say that Berlin is an example of a city which is doing it right without government intervention, but then devote the next article to an interview with the mayor to hear how he did it.

They then articulate a very interesting idea – the start-up delivery unit – run from a mayor's office and designed to work closely with entrepreneurs and to bust barriers for them. It is flexible, imaginative and fast-moving, everything that an organisation re-designed using the McKinsey Fallacy tends not to be. And it is one of the ideas behind Berlin's entrepreneurial success.

These units are usually linked to venture capital. We suggested something along similar lines in the last Lib Dem policy on sustainable jobs – a new kind of institution, linking local finance with local entrepreneurial support, mentoring and coaching. 

But that obscures the perennial problem with the McKinsey approach. It doesn't see any further than the trendy world of tech start-ups, important as they are.

In fact, this is an approach that needs to be tested out much more widely, certainly in regional cities rather than just capital cities – wherever there is entrepreneurial potential (everywhere) and wherever there are problems to be solved (everywhere).

The late, great Anita Roddick used to define entrepreneurs as people who could see the world differently. She was overwhelmingly right.  The difficulty is that these kind of people are not always very adept at starting businesses or social enterprises - and they need more personal support than the ubiquitous tick-box approach of Business Link favoured by the last Labour government.

As the McKinsey article suggests, these units need to be extremely small and very flexible.  Like the BizFizz enterprise coaching scheme, they need to be active in the poor areas as well as the tech hubs. 

Like Community Catalysts achieved in Nottinghamshire, it needs to be the right person in the right place to encourage new micro-enterprises to carry out social care contracts in a more humane way.

This is the new localism question: what kind of institutions do we need locally to encourage entrepreneurs at local level?

It isn't about the latest silicon roundabout, for goodness sake.  It is about how to inject new life into moribund economies and moribund outsourcing.

Tuesday, 22 July 2014

The lost art of making things happen

Leoopld Kohr was an economist who was an immigrant to this country (he died in Gloucester). He once shared offices with Ernest Hemingway, Andre Malreux and George Orwell. But it is for his influence on Fritz Schumacher that he is best known today, and for his little book The Breakdown of Nations.

He believed nations should be smaller and I agree with him. I have no doubt that, as Freddie Heineken used to say, Europe would be more civilised, more effective, more imaginative and more humane, if it was made up of 50 separate states than with its present handful of shoulder-pad jostling mega-nations.

That doesn’t make me a Scottish nationalist, or a nationalist of any kind – quite the reverse, in fact. It makes me a Liberal who is at least interested in the contradictory idea of Scottish independence, as if ‘independence’ was at all possible in this day and age.

It also meant that I read the proposal by the billionaire Tim Draper that California should be broken down into six different states with a great deal of sympathy..

I am one of those who cheered when the Liberals took control of Tower Hamlets in 1986, and after a wild meeting of the full council that lasted into the early hours of the morning – probably a mistake when it came to building alliances for the future – the council was split into seven self-governing neighbourhoods,

As a principle of administration, it makes sense. Smaller units are more able to tackle the issues that face them – you have to be General Montgomery to co-ordinate government the size it is these days, and most people are not (therefore nothing happens).. Smaller units are more humane, more difficult to defraud, easier to make a difference, more flexible for frontline staff, and less expensive to administer.

For all these reasons, smaller administrative units are more effective.  There may be exceptions - social services was the legal exception in Tower Hamlets - but small is generally speaking beautiful.

But none of this is really about national boundaries. If there are supranational bodies like the European Union, which allow borders to be porous - as they will always be for Liberals - then these painful divisions are easier to negotiate.

I'm not clear what difference Scottish independence would make now - it isn't as if the Scots play any role in managing the currency even now.  Either way, the objective has to be porous borders, communication, two-way travel and good business - and the fact that it is one nation, or one state, or one local authority, rather than another, is neither hear nor there.

There are issues of co-ordination when you devolve power, but they are easier to manage than the issues of fractured demarcation lines when you don't.

These issues are critical to the future, and they at the heart of the very modern debate about the most effective size institutions ought to be. The UK establishment, public and private, is still wedded to the idea of economies of scale.  For all sorts of reasons, mostly self-interested, they believe everything should be big – schools, hospitals, banks.

Most academic opinion suggests these days that this is wrong-headed.  It isn't that there are no economies of scale, but that they are very rapidly overtaken by the diseconomies of scale in most areas.

This is the stuff of the future. The development of IT changes these calculations enormously, but it hasn't yet filtered into mainstream political debate - so we still debate inspection rather than human-scale, or privatisation rather than human-scale, or competition rather than human-scale.  But we never talk about the real issue.

That's why, if I was governor of California - which, heaven forfend - then I'd be n Tim Draper's side.  To make things happen, we need smaller units - and these days, we badly need to rediscover the lost art of making things happen.

Monday, 21 July 2014

Big data and the emperor's new clothes

“London is too full of fogs and … serious people …Whether the fogs produce the serious people, or whether the serious people produce the fogs, I don’t know.”

That was one of Oscar Wilde's bon mots in Lady Windermere's Fan.  It could have been used, and perhaps should have been, in the Observer yesterday in a tremendously important article about big data and its threat to democracy.

Because the real question, as it was for Wilde, is what causes what?

The article was by Evgeny Morozov and I hope everyone reads it.  It isn't so much about the threat from surveillance, important as that is (we should all own our own data, it seems to me), but about the great utilitarian dream that goes along with big data - that somehow all the issues of government can simply be measured, without debate or awkward democracy.  This is what Morozov calls 'alogarithmic regulation'.

The trouble is that he doesn't really go far enough.  He assumes this is somehow a new phenomenon, whereas it actually dates a long way back.

As I wrote in my book The Tyranny of Numbers in 2001, and as Morozov says, all these screeds of data never take you back to causes.  They will never actually allow you to debate them, or to tackle them, just an obsession with symptoms.

It is a New Labour fantasy of handing government over to machines that measure data - but with no understanding of how inaccurate data will always be if it is chained to definitions, or if it leads to controls.

Why does data have such an appeal to modern governments? Partly because of the technocratic thrill of measuring the ebb and flow of symptoms as if government was a gigantic, though not particularly well-oiled machine. Yet cause and effect is the one thing it is quite impossible to measure - interpreting the burgeoning wealth of data to work out what causes what is always a matter of judgement, common sense and intuition.

That's the problem with data.  It won't interpret. It won't inspire and it won't tell you what causes what. Statistics have nothing to do with causation, the pioneering number-cruncher William Farr told Florence Nightingale in 1861: "You complain that your report would be dry. The dryer the better. Statistics should be the dryest of all reading." 

 But over-reliance on numbers sweeps away your intuition along with ideology. It leaves policy-makers staring at screeds of figures, completely flummoxed by them, unable to use their common sense to interpret the babble of competing causes and effects – unable to tell one from the other.

If men with long ring fingers are subject to depression - as they are for some reason - that might alert you to looking for a causal link. The same is true of other peculiar numerical links: high stress makes you much more likely to catch colds, accident rates among children double when their mothers are miserable. 

 These odd connections might surprise and inspire you to think about problems in new ways, but it won't tell you what causes what. You will have to use your intuition to work out where to look in a massively complex world of complex systems. "Scientists try to avoid emotions and intuition," says the biologist Stephan Harding, "but it is exactly those that give them ideas."

Too many numbers also drives out history – it gives us no sense of the different ways in which people measured in the past. It drives out creativity, locking away Keynes’ dark woolly monster of ideas. And it drives out morality too – leaving our poor beleaguered ethics committees desperately trying to measure themselves a coherent attitude to the frightening future of genetically-modified human beings, or whatever takes their place.  Where's your data, we will demand of them?  Where's your evidence?

And to get through the next few perilous decades, to look after each other, and solve the looming problems ahead, we're going to need all the judgement, intuition, history, creativity and morality we can possibly muster. So we have to make absolutely sure our tidal wave of data doesn't drive those things out.

My antidote to the tyranny of data is to ask the question the little boy asks in the Emperor's New Clothes.

Simple questions because they can devastate most political statistics. Yes, the carbon monoxide rate has reduced, but is the air cleaner? Yes, our local university professors have produced a record number of learned published papers, but is their teaching any good? Yes, the exam passes top the league tables, but what about the education? Are the children happy? Can they deal with life?

Data based on definitions is as vulnerable as the Emperor's New Clothes to the incisive, intuitive human question.  So is the utilitarian philosophy behind it.  Go ask...

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Thursday, 17 July 2014

In praise of Michael Gove

I know it is de rigeur in some circles to curse the name of Gove. Two of the teachers at my children’s school danced a little jig together when they had heard he had been given the push in the reshuffle from the Department of Education. But I don’t share their delight.

This was, of course, Michael Gove’s problem. Not since John Patten’s tenure at the department has a Secretary of State for Education found himself quite so disliked by the profession – and I tell the strange story of Patten and the start of league tables in my book Broke.

I didn’t think that Gove got the emphasis right on everything, by any means, and it is bizarre the way that the paradoxes of education policy have been pushed to the same kind of extreme as the West Lothian Question.

Why are the only schools to have their curriculum prescribed the local authority ones? Especially if the main objection to local authority schools is their inflexibility. Why have local authorities been given so little leaway to find new school places, especially in areas where population is rising fastest?

But let’s leave all that on one side. Because Gove has been one of those rare things: a thinking, thoughtful, radical politician, and – as radicals ought to be – in constant conflict with the establishment. He needed to have cultivated more allies, in retrospect, but I still wish there were more like him.

The irony is that the elements of Goveism that most irritated the teachers – the emphasis on testing, the puritanism, the punitive approach to parents, the dour utilitarianism – may have had his approval, but were no more than extensions of the prevailing policy of his department for many governments past.

It was a dour, utilitarian place under Labour and it remained a dour, utilitarian place, with half the staff, under the coalition, but despite Gove. It was his misfortune that the department managed to shift the blame for this onto their Secretary of State.

But Gove was absolutely right on three issues, and these were not utilitarian at all.

He was right to emphasise the importance of diversity in education, right to champion the involvement of parents in starting schools and right to turbo-charge free schools. He was wrong to centralise their control and quite wrong to take them out of the local authority co-ordinating umbrella, but the basics of the free schools was overwhelmingly correct and overwhelmingly Liberal in the best sense – it can still be about diversity, self-help and non-conformity.

He was absolutely right in his emphasis on chronology in history teaching, and right to rescue history from the boulderised backwater where pupils have to study Hitler over and over again. You might choose different dates, but chronology is important to get across a sense of history and Gove was the scourge of the utilitarians here too.

He stood up against the alliance between the educational establishment and the online billionaires who believe that somehow you can have education without content. You don’t want the dull recitation of facts, but equally you can’t make education work without something to teach – relying on children to look things up on the iPads which the Pupil Premium has delivered them in such unnecessary numbers.

There are educationalists who think that education is just about process.  They are wrong, and without radicals and thinkers like Gove, the fear is we will also have government without content, the besetting sin of the British establishment in all ages. 

It wasn’t just that Gove was colourful and more interesting than the bland ranks of Conservatives (though he is). It was that he believed something and believed that, by sheer willpower, he could make it happen.

But there is a third reason too. He was rightly enraged by the failure of the secondary system a generation ago to lift children out of poverty.

Say what you like about league tables, and I do, they did reveal for the first time how schools were failing children. What the tables showed when they appeared for the first time in 1992 was that the national average of five passes at GCSE stood at only 38 per cent. Southwark Borough Council was bottom of the league, with 15 per cent (before the Lib Dems took over).

The most revealing comment of all at the time came from the head teacher of a school in Leeds where only two pupils had managed to scrape together five GCSEs: ‘We have a dreadful problem with truancy and discipline,” he said. “We have intrusions like motorbikes being ridden into school during the day while lessons are being taught.’

The very honesty seemed to demonstrate the scale of the problem, especially as he added that they were the best rugby league school on the country. So that’s alright then. Find out more about this in Broke.

I wouldn’t be surprised if pupils of that period didn’t bring a class action against their local education authorities. They certainly ought to.

Those days have gone in most parts of the country, though the league tables have become a kind of tyranny of their own. Even so, Gove has been fierce in his determination to drive standards for the poorest. That is why he’s such a loss to the Conservatives.

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Wednesday, 16 July 2014

The real scandal behind the sausage cartel

It is strange that Adam Smith is quoted so widely, not to say obsessively in the American economics departments, but his great warning about monopoly seems to have been forgotten:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

This is, of course, a way of talking about the German sausage cartel, revealed today.  There was a discussion on the Today programme, full of the inevitable puns, which suggested that this was a blot on the reputation of German business (there have been cartels in other things recently).

I think rather the opposite.  The fact that these conspiracies against the public have been unmasked in Germany is a major positive.  If only we had competition authorities like that - but we don't: my only brush with the Competition Commission appeared to reveal an organisation staffed mainly by secondees from the European Commission, and with quite a different agenda.

Their interpretation of competition seemed to have little to do with breaking up cartels, and a great deal to do with building up European champions to take on the American semi-monopolies.

It was this confused body which conducted the recent flawed reviews of the UK groceries market.

I am coming to the conclusion that the blindness of the UK establishment about monopolies has a great deal to do with the failure of the Liberal Party to play a greater role in the second half of the twentieth century - and, when they did come to play a role, they seem to have forgotten their original economics.

Competition, competition, competition, plus diversity.  How could we forget?

So here's my take on the sausages.  It is bizarre, isn't it, that companies are not allowed to collude with each other about prices - yet they seem to be allowed to buy their competitors almost at will.

The UK's abject competition authorities allowed Waterstones's to buy Ottakars, almost their last high street competitor.  Fair enough, maybe that was the only way of preventing collapse - though I doubt it.  But then to let Amazon buy their only UK online competitor in the books market, the Book Depository.

So we are subject, over and over again, by conspiracies against the public by the back door.  And all because Liberals and liberals forgot the central economic lesson of Liberalism.

This is how Adam Smith continued the paragraph:

"It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty or justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary."


Tuesday, 15 July 2014

Time to double London's congestion charge

The American mapmaker Rand McNally launched their groundbreaking Places Rated Almanac in 1981 and it changed the whole argument about cities.

It coincided with research that showed the most attractive cities for investment were not, actually, the places with no regulations and tax breaks.  They were the places where the CEOs of companies wanted to live - and they wanted clean air, green space, theatres, good schools for their children and so on.

It marked the beginning of the Civics movement in the USA and it rescued cities like Pittsburgh, where - in the 1970s - the streetlights had to be kept on in daytime because of the polluted air.

The bottom line was this.  Cities which allowed themselves to get polluted because it was somehow a side-effect of thrusting economic success were completely deluded.  To succeed in the long-term, cities had to be good places to live.

So I find it pretty extraordinary that, three decades or more later, the neanderthals appear still to be in charge of London.

I'm not sure I believe the hype that the London air is the most polluted in the world - it would take a lot to beat some of the Far Eastern cities - but it is still pretty bad.

Especially in the last few weeks, when all my friends appear to have earned themselves sore throats and chest complaints for working in London.  As I wander around the centre of town, I am staggered that we have allowed almost permanent traffic jams to take up residence at key roads and junctions.

Why have London's bosses failed to learn the lessons?  It is partly a deeper malaise: the Department of Transport has shifted pro-rail, but they have failed to learn a more important lesson - that the key to cutting traffic is paradoxically to reduce, not increase, the space for cars.

Unlike many cities in the UK, London's transport users do have choices - most of them - and they will use them if that traffic becomes intolerable for them.  But that is a decision about time, not a decision about pollution.

But those choices mean that, unusually, there is a policy option that would help solve the problem and raise considerable sums of money.  It is time to double the Congestion Charge.

What are the arguments against?  That poorer people will be unable to drive in London.  They already can't - have you seen Westminster's parking charges?

That some people really need to drive across London.  Definitely, but give them discounts - and give them the road space to let them do it.

The future of London depends on it being green, clean, pleasant place to breathe.  Nobody will bring their children to live in a polluted hothouse.  Nor will the city thrive if its leaders suffer from British-Establishment-Disease (definition: the inability to make a difference; the habit of making occasional empty gestures towards problems).

But personally, I'm not waiting for a solution any longer.  I'm off.

Monday, 14 July 2014

The World Cup and the Curse of Oil

I share a house with two small boys so I have been watching and listening to more football these last few weeks than I have done since I was 12, and Chelsea was playing and replaying Leeds or the FA Cup (1970, if you must know).

It has made me wonder a little why the most lucrative, expensive and money-laden nation on earth - when it comes to football - should produce such a less than successful team.

There has been rather too much involvement by very old-fashioned economists in the football debate.  Goldman Sachs calculated that Brazil would win, so - for that reason at least - I enjoyed their 7-1 defeat, as a blow against the idea that everything can be reliably measured.

So why are England not better?  I think it has something to do with the phenomenon known as the Curse of Oil.

The Curse of Oil is the peculiar paradox which means that the nations rich in raw materials, and oil in particular, find that it does them no good. “What makes her poor is her wealth,” said a 16th-century Spanish economist about Spain, awash with gold and struggling with the effects of crippling inflation as a result. A similar disaster overtook Peru during the guano boom (to 1870) and Brazil during the rubber boom (to 1920).

Nothing excites governments more than suddenly discovering, as the British did in the 1960s, that they have oil on their back doorsteps. The rush of black gold from the seabed or deep in the earth is enough to make the owners of the rights believe that their troubles are over once and for all. Actually the opposite is true, which is why Juan Pablo Perez Alfonzo, the former Venezuelan oil minister and OPEC co-founder called oil ‘the devil’s excrement’.

There are exceptions to the rule, like Norway and Malaysia which have used their oil revenues to diversify their economies, but generally speaking the countries that are most dependent on oil wealth do worse over time, and the countries least dependent on it do best. Strange isn’t it.

Oil lulls nations into a false sense of security. They believe the wealth will cushion them against the need for tough decisions and investment. They believe energy will always be cheap, so never have to innovate to save energy. Meanwhile the inventions and efficiency that result from a shortage of energy go to their oil-poor competitors.

The UK’s own version of the Curse of Oil was a ruinously high pound. It means the world can no longer afford your products, and your factories start closing one by one, as they did in the UK during the peak oil production periods in the 1980s.

The Curse of Oil is the proof that you can't just measure the money and assume that is a measure of quality, success or well-being.  Quite the reverse: too much money can be disastrous, as it was for Spain in its Golden Age.

And look what it does in football.  Because the money sloshes around English football, they buy the best players in the world and forget to develop their own talent.  Soon they forget they have talent at all.

Result: we don't make it out of the groups in the World Cup.

Friday, 11 July 2014

The great seed-sharing tug-of-war

I have to confess, I find the new campaign websites pretty im-possible.  I was involved in the early discussions to launch 38 Degrees, but I've ending up chewing the carpet in frustration about their infuriating naivety and ignorance about what is actually happening at Westminster, which wastes huge amounts of energy, mainly theirs and that of their supporters.

Avaaz is, in some ways, even more irritating.  They pick the right causes, but they don't seem to have thought through the basics of transparency.

Take their latest campaign to crowdfund a global non-GM seed exchange.  Basic politeness suggests that it might make sense to say how much money is needed in total, and how much has been raised.  Nothing - and no replies to my requests for an answer.

There may be a good reason for the silence, in which case it might make sense to say so.  Otherwise it is arrogant and unimaginative and probably counter-productive.

So why did I carry on regardless and donate?

Because the issue of who owns the world's seeds, and the genetic heritage that lies behind it, is so important.  And the idea of a seed bank which allows small farmers all over the world to exchange seeds, including the whole diversity of the planet's genetic heritage - and without having to shell out a cut to the monopolists - is potentially a game-changer.  If the monopolists allow it to happen (they don't like competition).

In fact, here is an opportunity for the two models of the free market to go head to head.

Model 1 (actually Model 1B, but let's leave that aside) suggests that food production will be supported most effectively by large companies which have efficiencies of scale and which can develop and own new varieties of seeds which they can control.

Model 2 suggests that food production will be supported most effectively by supporting the small farmers who do it most efficiently, and by a system of sharing that allows them to keep more of their own profits.

Model 1 means concentration; Model 2 involves sharing and diversity.  Which works best?

In 1845, there was a famous tug of war between the screw-propelled HMS Rattler and the paddle-powered HMS Alecto.  The Rattler won convincingly, towing its opponent backwards at a rate of two knots and the paddle went out of fashion.

If we can get this right, then we will have Monsanto versus Seed Bank Sharing tug-of-war, and we will now one way or another, which is the most effective.  When the Seed Bank tows Monsanto backwards at two knots, we will know something important has happened.

But Avaaz has to come clean about some of the details - how much money is needed, who will be responsible, who will own it, when will it begin?  They just need to take their supporters seriously.  Because if they can't take the punters seriously, how are they going to take the formidable and well-resourced opposition (Model 1) seriously?

Thursday, 10 July 2014

Why don't we ever commission entrepreneurs?

It has been a brilliant summer so far, hasn’t it? It reminds me of the 1990s, when I remember – day after day – getting up, putting on my shorts and sandals and heading off to Cowley Street to edit Liberal Democrat News (no, sandals weren’t compulsory).

But I do have one local difficulty. The lane at the end of my road, which gives me access to my local area and my childrens’ school, has become flooded and boggy.

In the rain, the water pours down and into the street. Now, in the summer, it is at least passable, but I can still see the trickle washing through into the bog.

The water is still running despite weeks of sunny days. A development next door has disturbed one of the many springs in the area, and it doesn’t stop (these are, after all, the hills that gave us the Beulah Spa in the 1840s).

I have seen water board investigators there. I’ve seen local authority investigators there. I’ve had the same conversations with them many times. I was finally assured in early December by Croydon Council that I would get an answer within three weeks. I’m still waiting.

But here’s the point. I'm told the reason why I’m still waiting is that the company the council wants to tackle the problem has been asked to tender for the work, and is dragging their feet. Still no tender. And so we wait.

Now this is very peculiar, and yet somehow familiar. The whole justification for giving up on direct labour organisations and commissioning private companies to do the work instead is that it was supposed to be more flexible.

If one company couldn’t or wouldn’t do the work, and at a reasonable pace, quality and price, there would be others that could be employed instead.

That's the theory. The practice is quite different. We wait, six months now, for a company that clearly doesn't want the work to tender for it.

For me, it is yet another example, not of the perils of private contractors (that's another question) - but of the failure of government at every level to reap the benefits they should from the flexibility of an open market.

Instead of privatisation, what we actually have is a muddle of interlocking and contradictory regulations – from preferred supplier lists to minimum size limits – which actually get it her way of open markets, and do so in the name of open markets.

I have written before about how open market regulations at the European level get in the way of so much activity happening at a local level. The same thing happens at local level too.

This is bizarre, and is so far from what passes for a debate between state and private – which takes place on a different plane, about a different planet. We consequently get the worst of both worlds – no security, little quality control, ridiculous delays and extra costs, and all in the name of enterprise and open markets. And no competition.

At a European level, we know that at least some of the regulation around the single market is there thanks to lobbyists from the biggest companies, and is designed partly to squeeze out competition from the smallest.

We are also assured that the new EU/US trade negotiations (TTIP) will result in growth of 0.5 per cent in each EU country, with 545 euros per household pouring through the economy.

Is there really any evidence for this? Is it really going to do more than shift existing spending into the pockets of the biggest and least effective companies and do more to crowd out the genuine entrepreneurs?

It is true that the whole purpose of TTIP is to extend the ability to export services to smaller companies. But there is the problem. At local and international level, open markets appears to mean more definitions, processes, limits and restrictions. It is the precise opposite of what it is supposed to be - in fact single market regulations, inspired by the UK, are the source of the most spectacular EU mythological regulation stories.

What can be done about it? I don't know. But I'd start with a bonfire of regulations and procurement processes at local level.

Heavens, you might say! How are small companies and social enterprises ever going to get commissioning contracts? But they are not getting contracts under the current system.

Something must change - but for that to happen, we need a dose of ideology that can see open markets clearly. That means rediscovering the idea of free trade from a Liberal perspective.

Wednesday, 9 July 2014

Hysteria leads to more secrets

I've been listening to the Today programme this morning, which is once again dominated by the child abuse issue and the search for Geoffrey Dickens' lost dossier of child abusers in high places.  And one man's name kept popping into my mind: Noel Pemberton Billing.

Billing was a pioneer aviator who became the independent MP for Hertford during the First World War.  He was an arch-conspiracist, an anti-semite and the publisher of a magazine called Imperialist.  In 1918, he published an article by Harold Sherwood Spencer claiming that 47,000 members of the establishment were involved in a homosexual ring, and being blackmailed by German agents to "propagate evils which all decent men thought had perished in Sodom and Lesbia".

Needless to say, the press talked of nothing else.  It was powerful innuendo, and there was much discussion about those young people and children who had been abused who never recovered.  It was widely believed - well, there was some evidence at least: many members of the establishment were gay, after all.

Billing's main targets were Margot Asquith, and beyond her the wider Liberal Party, and anyone with any Jewish affiliations.

The whole affair ended up in court, where Billing represented himself in an action for libel brought by the actress Maud Allen, bringing the infamous Lord Alfred Douglas into the witness box on his side.  He won.

At the heart of his allegations was a similar missing dossier, called the Black Book of Berlin.  The whole affair was designed to undermine the Liberal establishment in Westminster.

I have been reminded of this listening to the BBC in the last few days. This is not because I’m somehow equating homosexuality with paedophilia. But there are still parallels between the two affairs, and one of them is the way that public hysteria gets in the way of the truth.

What worries me is not that the truth must somehow be hidden about these things, but because the main cheerleaders for hysteria and innuendo are now the Church and the BBC – the main offenders in abuse cover-up.

When the guilty start trying to spread blame, then the innocent start getting hurt.  You know there is a hint of this when people who have absolutely nothing to be ashamed of – who took decisions for what seemed like good reasons some decades ago – start getting the full spotlight of investigation raking over their actions.  And when there is just a hint of the House Un-childfriendly Activities Committee which will “leave no stone unturned” (are you now, or have you ever been, a file destroyer?).

The terrible irony about these moments is that those who pull the strings don't suffer, any more than the guilty do. It is the people who get caught in the middle.

Jonathan Calder’s excellent blog last week linked to a story about the satanic abuse panic of 1990.  Satanic abuse, as we discovered later, was not actually happening. It was a fantasy imagined by a combination of fundamentalist Christians and child abuse campaigners, and was a direct result of a joint conference they held immediately before the allegations began to surface.

It now appears that children who were seized by the police – at dead of night, I seem to remember – and taken from loving parents, were placed in care in the Knowl children's home, where real abuse was taking place.  That is what happens when panic takes charge.

In short, I agree with Simon Jenkins this morning:

"We deal with sex crimes by licensing anonymous accusers and staging celebrity show trials, with lawyers in gladiatorial legal combat before juries. From the attendant publicity, no reputation survives. It is judicial barbarism.  The drift of the May inquiries will divert attention from child abusers and their victims to the institutions among which they lived and worked. This can only diffuse guilt to a wider constituency, ultimately reducing it to that old cliche, 'society as a whole'."

We certainly need the truth.  There does need to be an end to the automatic establishment cover-up of these things.  But we have to be calm and measured about it.  Hysteria leads to more secrets.  When the innocent start feeling afraid, things get hidden all over again.

Tuesday, 8 July 2014

One of the pioneers of a new kind of economics

I can’t remember when I first met Richard Rockefeller. I know I had heard about him for years before and his pioneering work developing the idea of time banks in a health setting.

 I remember also that it was a slightly daunting prospect, as it always is, to meet a Rockefeller. You’re never quite sure what to expect. But the truth is that both Richard and his sister Neva have played a critical role in the development of a new kind of economics in theory and in practice.

They have both been good friends of the New Economics Foundation and, I like to think, of mine. So it was devastating news recently that Richard Rockefeller had been killed in a plane crash, on his way home from his father’s 99th birthday party.

I knew that Richard was a doctor, and that he has played a huge role as chair of the US operation of Medicins Sans Frontieres. I knew also that a long illness, which he survived, made him fascinated with the possibilities of social support in medicine – the need for networks of friends and neighbours to help people to recover and make them well.

That why, when I met him originally, he was chair and former funder of the Maine Time Dollar Network (now the Hour Exchange Portland), one of the oldest and most successful examples of time banking in practice in the USA. Portland, Maine, took Edgar Cahn’s ideas and, through the leadership partly of Richard and Auta Main, turned it into a real example of how this kind of support structure will be an absolutely vital aspects of public services in the future.

It was Richard who hosted an international gathering of time bank people, just a few years after the first time bank had opened its doors in the UK. That was in 2002, and the small UK contingent took an equally small boat to the Rockefeller's island off the Maine coast. I remember coming indoors sharpish when I heard about the bears which wander the island, and I remember Richard, in full 1960s mode, leading the singing on his guitar way into the night.

But I encountered him again at a critical moment in the development of a new economics, when I was involved in the first incarnation of what eventually became the New Economy Coalition.

Richard was a past master at the art of launching movements, which can be a surprisingly difficult task for a Rockefeller. Move too early and everyone assumes you will pay for everything; move too late and everyone assumes the project is dead.. His crucial interventions in the early months of what was then the New Economics Institute were crucial to the great success that the Coalition now, under the inspirational leadership of Bob Massie.

Witness the fact that more than 600 people turned up to their recent Commonbound conference in Boston, when they had been only expecting 300.

When the history of the new economics comes to be written – and I hope to write it some day – Richard Rockefeller will have an honourable place in its development. As a one of the expert midwives and visionaries who saw the need, he was fascinated by the practicalities, but like a good doctor he intervened and stood back alternately to ease the successful birth of what is emerging as one of the great movements of the new century.