How to pay if it doesn't stop raining

John Maynard Keynes was not well at the outbreak of war in 1939 but desperate to help with the war effort.

He gathered around him a group of friends who had been involved in Whitehall during the First World War – including Sir William Beveridge, who had been in the Ministries of Munitions and Food – and they met once a week at his home in Gordon Square to discuss financial aspects of the war. Keynes called them the ‘Old Dogs’.

He set out his ideas on paying for the war to the Marshall Society in Cambridge, and he turned his lecture notes into two articles called ‘Paying for the War’.  A peculiar leak meant that they actually appeared for the first time in a German newspaper, the Frankfurter Allgemeine Zeitung of 7 November – an extraordinary mistake given how important it would be for the war effort. 

The Times didn’t get round to publishing them until 14 and 15 November. The result was a blueprint for keeping inflation down during wartime.

The key problem which Keynes was addressing was not just how the war could be paid for, in the conventional sense – but how all that money cascading through the economy could be persuaded not to raise prices.

Every other war in history had caused rampant inflation. The fact that the UK did not inflate during the Second World War was down to Keynes.  More on this in my book The Tyranny of Numbers.

I mention this now, not because we can copy him exactly, but because we are confronted with a similar economic problem. And every time I look at the sad, sunken villages of the Somerset Levels, I wonder about it.

It is this.  How do we pay for civilised life in an era of climate change?

Assuming the climate scientists are right, then the kind of incessant storms and torrential rain we have had now since before Christmas may be semi-permanent, at least at this time of year.

If that is the case, it has to turn our economic assumptions on their heads. The most cost-effective infrastructure we have now, built to withstand the minimum of storm damage or high winds, means that energy and transport infrastructure will not withstand it.

Those cracked sea walls and dangling main lines will be familiar – not to mention the swamped villages and towns. London is in the firing line in a couple of days time, when an unprecedented tide meets an unprecedented river flow. The city may survive unscathed, the tube still dry, this time – but every time?

The UK establishment is quite oblivious of this kind of shift.  They are well able to carry on fiddling away with minor tweaks when Rome is well alight – that has always been the official English way.  Goering is opening the village fete, but at least the PSBR is on track, or - as Keynes put it in 1933 - "we are capable of shutting off the sun and the stars because they pay no dividend".

So what kind of shifts will be needed to deal with the new weather if it carries on? I can think of three things:

1. A much more efficient way of creating money. This was Keynes' problem: how can you spend money right up to the point when it would cause inflation, but not beyond? We need to re-visit this thinking. It may be changes in the way it is spent, or the places it is spent, but we will need to create a great deal more money to insulate our infrastructure and homes against the wild climate. Do we do it in a different parallel currency? Do we create the money free of interest, via the Bank of England, and then pay it back and delete it? I don’t know. What I do know is that the current system – creating our money in the form of mortgages whenever it is profitable to do so – is medieval in comparison with what we need.

2. A much more energetic, interlinked system of mutual support. Again the Second World War is a potential model – and those local institutions survived to play a major role rescuing people from the disastrous floods of 1953, as an article I wrote about Ken Worpole showed last year.

3. Much more resilient energy distribution systems, which do not rely on leakages from the national grid. I don’r mean that we need to abandon the grid – but we do need to know that we every community, every building, can produce its own power and manage its own water if the worst happens.

Three shifts, but they borrow from wartime in the energy required to achieve them.  Yet every time I look at pictures of the ruins of the sea wall and main line in Dawlish, I realise that we need to work out how to make them now.

Subscribe to this blog on email; send me a message with the word subscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

Help us ask the big What If? questions

"You see things; and you say 'Why?' But I dream things that never were; and I say 'Why not?' "

So said George Bernard Shaw, at least in the mouths of one of his characters in Back to Methusalah.  It was universalised later by Bobby Kennedy.

The issue goes to the narrowness of economics at the beginning of the 21st century. Once a subject area stops studying history, it can appear to them that no other system is possible – it is the way it is, because it is the way it is.

To unravel this, we have to inject a little of St Augustine into the economics conversation again – the bit when he abjures us to be as wise as serpents and as harmless as doves.

It is a harmless hobby to imagine the world differently (though it offends the conventional), but you have to take your wits with you. When you ask a question about like 'What if?' you have to be able to be completely honest - not just about the benefits of the shift you are imagining – but the peculiar and often counter-productive side-effects that are likely to come along as well.

It isn't always comfortable for campaigners any more than it is for conventional economists.

This is the skill that mainstream economists have lost. Worse, they tend to be as harmless as serpents and as wise as doves, neither of which is terribly effective.

I recently edited a book of 'What if?' speculations by economists called What If Money Grows on Trees?, with an excellent introduction by the economist Neva Goodwin from Tufts University.

I’m going to be talking about it with one of the contributors, my friend and collaborator Andrew Simms, at the Brighton Science Festival on Sunday evening. But we need to be able to debate and argue with people, so do please come along and tell us what you think....

We will be as harmless and wise as you want us to be.

Subscribe to this blog on email; send me a message with the word subscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

How to tackle the disaster of too much measurement

It is now thirteen years since I confronted a prominent member of Tony Blair's cabinet at a reception about time banks.  When he asked me what I was writing next, I told him I was writing about our over-reliance on numbers.

He looked at me with incomprehension.  "But what else can we do?" he said.

At the time, I thought this just meant that - after 10,000 new central government targets promulgated in the previous four years - I had hit on something important.  I still think I had.  But the question keeps coming back to me.

We know that our increasing reduction of almost everything to numbers, often in the guise of 'evidence' (which it usually isn't), is undermining our ability to control the world around us.  It is hollowing out our knowledge just as it is hollowing out our institutions.  It makes us believe that these human structures are giant, humming machines which can be programmed and left to run our lives, when this is the great utilitarian fantasy that still grips us.

Worst of all, it is beginning to hollow out our language.  When once we knew that a concept like wealth or health were multi-dimensional, whereas the numbers are busily reducing them to pale shadows - meaningless, one-dimensional ghosts of their former selves.

I did write the book.  It was called The Tyranny of Numbers (or The Sum of Our Discontent in the USA), but I have puzzled over the question ever since - what do you do instead?

If you abandon the numbers, then the media will impose them on you.  It is difficult.

But I'm glad to reveal that I now have a very effective ally in this struggle.  The Italian/South African political scientist Lorenzo Fioramonti launched his book How Numbers Rule the World in London yesterday evening.  It is a highly readable challenge to the hegemony of numbers - and it takes the argument further.

Because, as Lorenzo says, that humming machine has now meshed itself into the economic system, with devastating and still uncounted consequences.

So I asked him what we can do about it. He said it is all about reclaiming the idea of governance - realising we can't let these giant number-driven machines take over.  We have to put in the time, very locally, to run them ourselves.

"This is why the public sphere is so important.  All those soft elements of social life, from mutual respect to solidarity, which systematically escape our obsession with measurement, are ultimately much more important than what is integrated into the numerical models driving contemporary governance... Numbers will not save us.  We will need to do it ourselves."

Lorenzo comes at this from a different direction to me.  We do need numbers to check our impressions, to take us by surprise.  But we also need to retain our intuition to check the numbers, if we don't want to sink into a mechanical half-life.

When we believe the league tables and never meet the headteacher - or believe the graphs without asking the people who are being measured - we chip away at the foundations of what makes us human.

But it's difficult.  I remember the chief executive of a well-known charity told me he had repeated the Scottish proverb that I ended my book with ("You don't make sheep any fatter by weighing them") during his annual grant negotiations with the Home Office.

He told me he watched the look of rage and incomprehension spreading over the face of the civil servant in front of him.

That was a decade ago.  I'm not sure that things are any better yet.

Subscribe to this blog on email; send me a message with the word subscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

The squeezed middle is now everywhere

I am happy for my old publishers Constable and Robinson that they have agreed to sell themselves to Little, Brown, part of the vast Hachette empire.

Yes, I'm happy.  But put on my other glasses and I can't help seeing another example of the notorious Squeezed Middle emerging.

The news that Quercus is also looking for a buyer, and dark rumours of other difficulties, just go to prove the point.  We don't really need the emergence of Penguin Random House to realise something scary is going on.

These publishing houses retain their old identities.  Constable is even keeping its old offices.  But do we really believe it will be good for publishing, free speech, literature and culture to peer into the not too distant future and see - well, how can I put it...

HarperRandomPenguin Hachette PLC?

Of course, this isn't the fault of the individual publishers, who are responding to over-concentration in the distribution market.

When the competition authorities so forgot themselves as to allow Waterstone's to snap up Ottakar's, and when we shortly afterwards lost their other competitors, they ushered in a period when there were only four ways of buying books.

There is the struggling Waterstone's and the increasingly healthy cadre of local bookshops, but between them they hardly dent the other two ways - the discounted shelves of the supermarkets, which remove the profitable titles which used to support a diverse publishing industry, and the fiercely monopolistic Amazon.

The lesson here is that competition is important, but it has to be defended everywhere.  We need competition authorities which can tell the difference between an innovative new distribution system and an emerging monopoly.

If they don't then the emerging monopolies will be too entrenched to challenge, and we won't be able to read anything challenging to spur us to liberate ourselves.

There is one other important point.  The Squeezed Middle is a phenomenon everywhere.  To be independent, in any industry, you increasingly have to operate on the margins.  In every sector, and in every sector of the population, the middle is disappearing - to be replaced by a tiny and unassailable elite and a vast sprawling, struggling proletariat.

It isn't just publishing, it is all of us.  To find out more, see my book Broke: How to Survive the Middle Class Crisis.

Subscribe to this blog on email; send me a message with the word subscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsuscribe.

Getting the middle classes to read about themselves - £3 off

My friend and colleague Mark Pack should have been chosen as Lib Dem blogger of the year last year. His posts are always intelligent, always thoughtful and always informed and his Lib Dem Newswire service is a major breakthrough.

And I speak as a Luddite who was editor of Liberal Democrat News in the days when it was produced with copious use of the fax machine.

I even turned on the PM programme yesterday to hear him interviewed about the niceties of blogging about potholes. The world is clearly changing.

I say this partly because it is true, and partly because Mark has written a very kind review of my new book Broke: How to Survive the Middle Class Crisis in the latest edition of Lib Dem Newswire. He says this:

"He effortlessly throws numerous provocative points at the reader, so silkily that it is easy to miss how controversial they are.”
I hope he meant this as a compliment. I certainly take it as such. But best of all, he has organised a special £3-off offer on the book.

You need to call 08445 768 122 before the end of the month, quote the code BrokeBoyle (an unfortunate new word, but let’s leave that on one side) – and you can buy the book for £5.99.

I hope the book’s thesis – the possible demise of the middle classes and what can be done about it – will indeed prove controversial. So much so, that I hope readers of this blog write in and remonstrate with me about it...

Don't wait around for the hidden hand - it's you...

I heard a fascinating radio debate on the BBC just before Christmas in the programme The History of Britain in Numbers.  It was between two writers – the green campaigner Andrew Simms and the science journalist Matt Ridley.

Before I go further, I should reveal that Andrew is a friend and his book Cancel the Apocalypse is published in a cheap paperback format this week. He is also right.

But the title of the book gives away why this debate was interesting. Neither Simms nor Ridley could be described as a conventional catastrophist. On the face of it, both believe that human ingenuity will respond and find solutions.

Matt Ridley is the author of The Rational Optimist who was also chair of the ill-fated Northern Rock.  This is what he said about the catastrophists:

"But, surely, after many centuries of the pessimists being proved wrong, again and again, we would learn to take their prognostications with a grain of salt. True, we have encountered disasters and tragedies. But the promised Armageddons, the thresholds that cannot be uncrossed, the tipping points that cannot be untipped, the existential threats to life as we know it have consistently failed to materialise. Even the climate threats are now fading."

Ridley is also well-known as the scourge of disaster theories. He lists the disasters predicted which never happened, the unnecessary fear conjured by horrific predictions which never come to pass. But he doesn’t spell out the conclusions to be drawn from that.

So let's spell them out now.  Why don’t most disasters happen? The answer as Matt Ridley implies, or seems to imply, is that the market sorts it all out – provides the necessary technology and behaviour change.  Either that, or there are never any real threats.

Either way, his solution appears to be to do nothing.

But the implication that nobody ever does anything is wrong. The reason that most disasters don’t happen is not because no disaster can happen. It is that people take evasive action – they take precautions. They do something about it before zero-hour. They use their imagination and intelligence.  They steer out of danger.  They defend the nation against dictators.  They salt the roads.

There is a whole set of similar explanations provided by those on the market fundamentalism end of the argument. Why don’t disasters strike? Because people take evasive action.

Why does the environment improve when people’s living standards improve? It doesn’t just happen magically. It improves because people have the economic power to fight for it.

So Ridley needs to look at the underlying causality. The hidden hand of the market is not some alchemical force – it is driven by people, enabled or inspired to act. It is about what they do.  Because, when all is said and done, all is not for the best in the best of all possible worlds.

Rational optimists are like an oblivious aristocrat waking up after a storm.  “I told you the tower wouldn’t blow down,” he says, apparently oblivious that his servants have been taking precautions to shore it up.

So don’t believe this stuff about disasters never happening. It isn’t automatic. People get off their bottoms and do something to prevent them; they don’t wait around for the hidden hand.  Everything else is Panglossian.

The real gagging is political self-censorship

I don't often get abused online, but I've been thinking about something hurled at me on Facebook last week about my defence of the Lobbying Bill.  It has made me wonder why I find myself on the opposite side to people who I've got a great deal of time for - and whose judgement I trust (yes, I know, don't tell me - because I got it wrong?).

It is always disturbing when both sides think the other position is dishonest, but don't let's go there again.

Not just that, but I've also been wondering also why some issues get covered by the BBC and mainstream politicians and others don't.

The Lobbying Bill is the exception which proves the rule.  The Labour Party have been dragged into the controversy, and dragged rather reluctantly by 38 Degrees.  Perhaps it isn't surprising that this was reluctant since the Bill builds on the regulations set out by the original law passed by Labour in 2000, and keeps the basic pattern intact.

But otherwise, the political news management by Labour and the Conservatives is pretty powerful.  They keep the set of issues narrow and unimportant, and what is debated on the BBC seems to follow the same pattern.

Then the pollsters come and ask people what issues they believe are the most important, and they dutifully reflect what they have heard.

This is the great weakness of the UK parliamentary system.  It means the really important issues are often ignored, because there is no party advantage, because both parties are equally to blame, or because the opposition finds some aspect of it embarrassing.

Or because something far less important happens to obsess backbenchers.  The fox-hunting bill was debated for hundreds of hours in the run-up to the Iraq War, which meant that the war was never properly debated as it should have been.

I wondered in the last few days why something like the radioactivity leak scare at the Sellafield plant got so little coverage this weekend.  Labour hasn't got anything to say on nuclear energy so the leak is downplayed in the news, though the political implications if it was a leak would have been huge.

In other words, UK politics exists with herds of elephants in the room which nobody wants to discuss.

Which brings me to the US-EU trade negotiations.  They are happening in secret, and the potential consequences are enormous, yet they are barely reported at all.  Here is why they should be:

1.  The Investor State Disputes Settlement aspects of the treaty will allow investors to take legal action, through secret panels outside national judicial systems, which will potentially remove democratic control over environment regulations - for phasing out nuclear power or passing anti-smoking legislation, for example.  It will allow corporates to become the new Luddites, clinging to old patterns and technologies when they are no longer wanted, and give them absolute power over democracies to do so.

2.  If national health services are not explicitly excluded, it would allow foreign corporations to break into services where voters have decided against outsourcing.  I have no problem with private operators running some services, as long as they are held to account by voters - but I don't want our services chopped up and sold off to the lowest bidders by some external regulation.  Yet that seems to be what is on the agenda.

3.  It will extend the very same competition regulations which have rendered the EU single market so unpopular and bureaucratic, so beneficial for the biggest corporates and so expensive for the smallest.

And yet despite this continuing negotiation to hand over democratic sovereignty, there is virtually no discussion, except an occasional dutiful and very dull mention on the BBC.  Meanwhile, strangely for an issue around national sovereignty, UKIP sits on the fence.

If campaigners are really worrying about 'gagging;', perhaps they should think about how we gag ourselves so effectively in UK political debate.  And even without a Gagging Bill...