Keep the dinosaurs shut - if you want real competition

As always, when an issue looms large in the House of Commons, the divisions are about the respective claims of capital and labour - though both now seem to be against the government's proposals to relax the Sunday trading laws.

The news that the SNP is going to oppose this opens the possibility that the proposals may be defeated. I'm a localist so there is something to be said for the idea of setting the opening hours locally. But there is still a major reason why large stores should not in fact open for more than six hours on a Sunday.

It comes back to the big, primarily Liberal, question of how we might stitch together a set of policies that are, above all else, pro-enterprise.

Then we have to ask whether letting the big stores open on Sunday, and undermining the slim advantage that small stores have for one day only, would support entrepreneurs or not?

Would it promote competition or not?

Would it promote choice or not, over the medium-term?

The answer to all three questions is: no. In fact, it would actively frustrate competition by embedding the privileges of the big retailers (and don't forget that Tesco, for example, insists that it should pay its suppliers after three months, providing itself with an interest-free loan equal to two months's stock).

No, if we want to encourage challenge from below, and on the high street, then we need to keep the dinosaurs shut.

It is a paradox, but we have designated Sundays as a day when challengers and entrepreneurs can compete on equal terms, and it should stay that way.

There is the usual fatuous research, that is so often commissioned by government departments, showing how much extra revenue would be generated by ending Sunday's differences. But they never seem to evaluate how much is simply moved from elsewhere, or how much is lost by driving the challenging minnows out of business.

Nor can we really believe all this rhetoric about saving the high street. This proposal is about saving the out-of-town shopping centres, and - if the USA is anything to go by - they are the next white elephants to go. So goodbye Bluewater. I'm sorry I never visited...

AND! My ebook Jerusalem: England's National Anthem  is on special offer for 99p this week. There is also a conventional print version here. 

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What's air pollution and depression got to do with it? A lot.

I have mentioned before, perhaps too much, my conversation in 2000 with a prominent minister in Tony Blair's cabinet about my book The Tyranny of Numbers. I told him I was writing a book that was sceptical about numbers and counting.

But what else can we do, he asked? I remember his look of confusion. It was as if he would have liked to approve but just couldn't.

Since then the controversy about targets has almost left me on the winning side, yet somehow without anyone taking on the basic argument about measuring the unmeasurable with numbers.

It's a paradox, and that is a difficult idea for data-crunchers. How can the data say two opposite things at once? Impossible!

So was delighted to read a prominent and thoughtful article which took the argument further in the Guardian on Saturday, by the writer Andrew Smith, who applied the same argument to the way in which IT systems have so persuaded us that the numbers they generate are real that we have begin to lose the possibility of scepticism about it.

It is worse than that. This is what he said:

"So, converting the world into numbers in order to process and make decisions about it: what does this remind us of? That’s right. We are becoming our computers. An idea that might sound shocking, but will come as no surprise to anyone familiar with the work of the media philosopher Marshall McLuhan..."

That is the frightening side of what is happening to us. We are losing the ability to understand that there is anything beyond the data, any grey areas of ambiguity. We still have a vague sense - especially those of us who don't work in Whitehall or big corporates - that there other realities. But will we understand that still in a decade's time?

Or will we read Dickens' Hard Times with mounting incomprehension - what has he got against Thomas Gradgrind, for goodness sake? He is just measuring success in education...

It is that impoverishment of our intellectual wealth that is the real problem. And in the meantime there is a more immediate problem: those who run the world are more in thrall to the data than anybody else - and consequently have lost the ability to make things happen. They suffer more than they should from unintended consequences, because they don't understand ambiguity. They don't understand human beings.

Unless of course, as Andrew suggests, human beings are also changing.

It's a problem. So stick with me on this: lets keep open to the little boy's question in The Emperor's New Clothes. yes the data says the school is good, but are the children being educated? Yes, the data says the hospital is working, but are the patients getting healthier? Yes, the data says we're getting richer, but are we getting happier?

Richer but not happier? Sorry - brain doesn't compute. You're talking gobbledegook - or so they will say.

This was the crux of the article: those who can no longer distinguish data from reality already are yesterday's economists. They are clever people, but unfortunately pursuing one single bottom line number renders you stupid and ineffective.

And by 2025, if anyone runs across this maverick blog post, let's hope they don't have it evaluated - because 623.6 and I'm afraid I am by definition insane and must be carted off for failing to understand the data. Surely everyone is getting richer aren't they? What's air pollution and depression got to do with it?

AND! My ebook Jerusalem: England's National Anthem  is on special offer for 99p this week. There is also a conventional print version here. 

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This changes everything. No government can trash entrepreneurs and survive for long

Just occasionally, there is a small event in politics – it seems hardly important in the great scheme of things – but you realise it means that everything has changed. It is one of those clouds no bigger than a man’s hand in the sea stories which turns your expectations upside down.

Then you have to work out why nobody else realises the significance. Are you wrong? Maybe the changes slipped into the Finance Bill withdrawing eligibility for Enterprise Investment Tax Relief from community energy schemes are just what everyone assumes they are – the latest twist in the premature withdrawal of tapering subsidies for green energy.

If that was the case it would be a mistake, part of the government’s overzealous and short-sighted removal of support for renewables. Infuriating and blinkered, yes, but it would hardly compromise their legitimacy as a government.

Part of the problem may be that opposition MPs are seeing this move as if it was familiar. As if they would do that, wouldn’t they...

But I think it is something else. Why would any government, however little interest they might have in renewable energy, deliberately set out to trash a small but growing sector of the economy? Why would they deliberately undermine all the energy and imagination that goes into building a business – which, in the days of Margaret Thatcher, they used to pride themselves in backing. British ingenuity. Private enterprise.

Removing feed-in tariffs, the guaranteed income that renewables get – though less than the vast sums promised to Hinckley Point – could possibly be justified in the need to reduce fuel bills. You can see the point also, if they are still getting feed-in tariffs, that the enterprise already has its guarantee and maybe shouldn't get tax relief too (though community energy has been risky enough until now to still get it).

But you can’t remove both, and Enterprise Investment Tax Relief on community energy schemes is to disappear from 30 November, according to a clause slipped into the Finance Bill only at the end of October at third reading, after it could be debated.

It has meant a ridiculous scramble to get community energy schemes through the hurdle in just a few weeks.

Why, uniquely, should enterprise tax relief to be given to every other new start-up but not to renewable energy?

So this is what I mean about it changing everything. When a government deliberately tries to destroy the efforts of entrepreneurs, for ideological reasons – so that people and investors earn less, and the nation earns less as a result, then you know the writing is on the wall for them. Just as it was on the wall for Labour in the days of Michael Foot.

It is a fundamental principle that governments should not trash the efforts of their entrepreneurs – withdraw subsidies perhaps; they’re not under any obligation to support them, but you can’t unbalance the playing field against them, by denying the tax relief that most investment in new enterprises get. All except the innovative ones devoted to new energy schemes.

And you especially can’t do that – and survive scrutiny by the electorate – if you catapult them, as a result, that much more into the suffocating embrace of the big energy companies, an oligopoly if ever there was one. Or is it – just to raise a scary prospect – part of a secret agreement with the Chinese to make us dependent on their nuclear investments instead?

When a Conservative government torpedoes its own commitment to free and open markets, by setting out to undermine competition and enterprise, you know they are on the way out, intellectually and politically. And when they go, you can remind yourself that you read it here first...

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The economic destiny of the Lib Dems

A few weeks ago, I was in Lancashire, interviewing a Labour councillor about the fascinating and pioneering work they have been doing there reshaping their local economy so that it works effectively for the people who live there.

The measures were all in the local Labour manifesto last May and now they are being put slowly into effect.  I think I agreed with every word of it.

As it turned out, the councillor I spoke to was a big supporter of Jeremy Corbyn's. What was interesting about this emerging consensus on a new entrepreneurial future is that, actually, it is difficult to pin it unambiguously to any political tradition.

Most of what was in the manifesto could have been in a Conservative one praising enterprise.  As a Liberal policy wonk, I could certainly embrace it.

But you know when an idea has emerged because suddenly those who are about five seconds ahead of the zeitgeist - any more than that, as C. P. Snow used to say, and you're considered insane - start talking about it.  So that is the future: it is a new entrepreneurial spirit, based on support and facilitation for small business and the training of enterprising people from an early age to make things happen - and certainly at school.

Tim Farron hinted at an approach along these lines at the party conference - and it is certainly a Liberal economic approach, possibly even the Liberal approach - and now Liam Byrne has said much the same.

When the Policy Network organises a speech by a senior moderate Labour type, you can be sure of a couple of things. It will damn Jeremy Corbyn with faint praise. It will hark back to the Blair-Brown years as the era of economic success - rather than the technocratic nightmare that I remember - and it will gargle with a few things they maybe should have done differently.

So we all pounced on Liam Byrne's talk yesterday morning, perhaps not exactly with excitement, but at least the sense of weary predictability.

Byrne was one of the conduits by which Accenture forged such a disastrous alliance between the Blair government and the management consultants. He was also the author of the note on David Laws' computer screen in 2010 saying that the money was all gone.

But he was completeley correct in his diagnosis of the economic challenges we face - institutional short-termism, a new elite which does not see its task to share the rewards, and the growing power of monopoly.

It is interesting, though, that I have been sent details of the speech by so many people - even before it had been made (thank you, Miranda and Joe). I think this was because of his volte face on some of the New Labour embrace of 'neo-liberalism'.

But he remains a social democrat, in the most irritating sense of the term. He condemned 'free trade', as if that was somehow what we have now, and talks up the idea of the common good.  And just as an aside, I'm all in favour of the common good myself - just suspicious when politicians start talking about it. In the mouth of the Pope, for example, it is a wholly worthwhile endeavour.  In the vocabulary of a former New Labour apparachik, I fear it is likely to involve clamping down on individuals (sorry David, your welfare isn't consistent with the common good, they might say - and probably will).

But the real reason the speech is interesting is the brief but important section on entrepreneurialism:

"As someone who started a successful tech firm before I came into Parliament, I passionately believe that encouraging people to start their own business or social enterprise is quite simply one of the most effective ways of democratising wealth creation – and if we want a fairer, more equal society we should be doing everything in our power. I think that means, introducing enterprise education in every school for every child; expanding the Start-Up Loan programme, and using government procurement to help new businesses scale up..."

This represents the future. The real question is whether Labour can possibly embrace it without unravelling.  Even if both sides use it, they will so misunderstand each other when they do. New Labour really believed in big business and never really liked small.

Personally, I believe it is the historic destiny of the Lib Dems to revive small enterprise - not just as a jolly nice idea - but as the solution to monopoly and economic stagnation.

Byrne mentioned four favoured entrepreneurs at the end - William Lever, Anita Roddick, George Cadbury and Spedan Lewis. In fact, though they didn't devote themselves to politics, all four were Liberals. Nor are they entrepreneurs in the flashy loadsamoney Thatcherite style.  To quote Anita Roddick - they were people who could imagine the world differently.

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How we all learned we had to spread information

In Nelson's day, it was relatively simple. Once a fleet was at sea, it was effectively under local command. The Admiralty could judge the qualities of the admiral when they appointed him, give him a framework to work in and that was that. They had to leave him to it, for better or for worse.

The problem was similar before the First World War. Once the flagship had cast off the telephone line to London and put out to sea, the decisions would be his.

Wireless changed everything. In fact, it was just one of a number of innovations which allowed 20th century organisations to grow to prodigious sizes - but then rendered them powerless to evolve or act when the information changed. Chrysler''s invention of a hierarchical organisation, split into divisions in the 1920s and 1930s allowed the information to flow downwards rapidly, but what about intelligence from the front line? What happens when you have changing info hour by hour?

This was, arguably, the great 20th century problem. What made it such an issue in the First World War, perhaps for the first time, was only partly he enormous organisations involved - armies with a million men or more, global navies with many hundreds of ships and shore establishments.

It was fine to just send information and orders rippling down the hierarchy, but if it doesn't also go the other way - informing the centre about the grassroots, the centre gets stuck in its own delusions and everything grinds to a halt.

No, what first made this an issue was the lunchtime conversation at the Pall Mall club in London, between Admiral Henry Oliver (the Director of Naval Intelligence) and Alfred Ewing (the Director of Naval Education), about Ewing's fascination with codes.  Out of that conversation, which is supposed to have taken place on the first day of the war in 1914, emerged the attempt to listen in and decrypt the German naval signals.

And, perhaps rather to the surprise of everyone involved, when they found they could do it, it led to the development of the extraordinary Room 40 operation - decoding signals on a systematic basis for the first time in naval history.

It also created a series of problems too. How could the information be integrated with all the other knowledge that was pouring in - and used without giving away its source?

The fact that the initial failures to do this effectively, contributing to the disasters at the battle of Jutland in 1916, were eventually overcome, so that the basic lessons had been learned by 1939, were largely down to one man: Oliver's extraordinary successor as naval intelligence director, Captain Reginald 'Blinker' Hall?

One reason why I want to write Before Enigma is to tell this story, about Hall and Room 40, and the fundamental mistakes he was trying to put right - about the basic information problem - and perhaps what we can learn from it today...

There are 20 days left to contribute to the crowdfunding of the book, if you feel so inspired, or to pass it on to anyone you know who might be interested. I would be ever so grateful if you could.

Escaping the curse of iTyranny

It is fourteen years now since my book on the phenomenon of too many numbers was published. The Tyranny of Numbers was an attempt to flag up the corrosive gap between official or corporate numbers and reality. Or anything important, which by definition can’t be expressed directly as a number.

The problem is that numbers look hard-headed and objective, but they are chained to definitions, and these are endlessly malleable. The result has been the slow undermining of most official numbers – whether they are the relative value of currencies or the emissions from Volkswagens.

I wish I could say that my book did the undermining, but I’m not yet so self-obsessed. The truth is that the targets culture has been steadily undermining itself – but without putting anything in its place that can set frontline staff free and yet provide some kid of accountability.

The Tyranny of Numbers was one of my most successful books, both in terms of sales and impact – but it badly needs revisiting (if any publishers are out there!). Because the story has moved on.

It has moved on partly in the way that money has turbo-charged the bad effects of targets, especially in payment-by-results contracts in pulic services – which, despite the rhetoric, when they were first introduced, are just targets on speed.

You can read more in my article on PBR measurement in 2011.

But it also moved on partly in the way that the digital world has further obscured the great gulf between numbers and reality. We believe what it says on the screen because it looks scientific. But often it is just standing in for reality, just as the old targets numbers did.

This is not to criticise some of the great innovations that have made modern life less stressful – knowing how long the bus will take to arrive is a major benefit for civilisation.

The danger comes when we start extrapolating the other way. As if exam results were really a measure of intelligence. As if genes were really measures of courage or ability with numbers or footballs.

This is a kind of impoverishment of public discourse and it undermines our understanding of the world around us – especially as, the more important you are, the more in thrall to this kind of measurement and graphs fantasy you seem to be.

It is a tyrannical removal of shades of grey in any argument. And it goes with the obscene profits of Apple this year, helped along by the forcefeeding of our children with Apple products by the education system.

In fact, I have coined a word for it – and would very much like to write about it, if anyone feels like joining me. It is called iTyranny.

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The curse of the empty corporation

In desperation, around lunchtime yesterday, I turned to Twitter to get through to Barclay's Bank, where - to my great shame - I still have a business account.  This is what I wrote:

@BarclaysUKHelp twice now hung on for 10 mins and then phone put down by your useless call centre. And all I want is a statement for sept.

It took them a couple of hours to respond, by which time - on my third attempt - I had finally managed to sort the problem. I was quite surprised to get a reply at all because Barclay's seems to me to have been well down the path to being that great modern phenomenon: the empty corporation.

You can tell this process is well under way when announcements were made that the bank was turning its back on its attempt to concentrate on domestic business - and sure enough, the signs of ersatz efficiency were becoming all too clear clear.

In fact, the higher Barclay's share price goes, the longer they take to answer their phones.

If this is overly cynical, it isn't much.  The classic empty corporation is TalkTalk, one of the least useful companies on earth.

Now I have sorted out all my multiple differences with TalkTalk. They have now stopped sending me 'final invoices' which I came to believe were being sent out automatically to all their recent former customers. I managed to get these stopped, though they carried on for three months, only by contacting the managing director personally.

I use TalkTalk as an example, partly because they seem to have allowed their customer's personal data to be stolen by a 15-year-old hacker, and partly because they are also victims of ersatz efficiency. If something goes wrong with their modem, or some other aspect of their service, as it it invariably does - nobody is home.

Yes, these empty corporations have call centres - usually in India - but if you ask anything complicated, they are likely to put the phone down on you.

I believe the phenomenon is an important one. It is also for a relatively simple reason: the idea that IT systems can automate everything.  What this means, in practice, is that anyone with a non-standard query - which is quite a lot of us - can't be helped. There is no space in their software. The different departments are unable to communicate.  

In public services, this adds to the costs as people bounce around different departments and helplines or A&E. See, for example, John Seddon's excellent book. In private companies, it just means people get ignored and frustrated.  And particularly incandescent that the company to whom they are paying money is congratulating themselves on their own dysfunctional efficiency.

AND! My ebook Operation Primrose is on special offer for 99p this week. There is also a conventional print version here. 

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