The difference between catching criminals and preventing crime? About 30 seconds

What is the difference between catching criminals and preventing crime, the distinction set out by the chief inspector of constabulary, Tom Winsor, today?

The reason I ask is that he didn't seem that sure himself. Prevention seemed to be about catching criminals with new technology and getting the public on board to help you. Yes, but...

The truth is that, when you look at it like this - apparently a mission to change everything just a little bit - the distinction between preventing crime and catching criminals is the 30 seconds or so between thinking about it and doing the deed.

I'm always a little sceptical when I hear that effectiveness is going to be enhanced by new technology. It isn't impossible. It is just that, in practice, it rarely is. Often it gets worse. In fact, the famous story of the beginnings of the concept of co-production in public services was about precisely this.

The great sociologist Elinor Ostrom was asked by the Chicago police in 1975 to help them find out why crime was rising.  Why was it that, when they took their police off the beat and into patrol cars – and gave them a whole range of hi-tech equipment that can help them cover a larger area more effectively – why then did the crime rate go up?

This isn’t just a question confined to the police.  It lies at the heart of why public services become less effective on the ground as they become less personal and more centralised.

Elinor Ostrom’s team decided that the reason was because that all-important link with the public was being broken.  When the police were in their cars, the public seemed to feel that their intelligence, support, and help were no longer needed.  She called this joint endeavour that lies at the heart of all professional work 'co-production' and technology can sometimes get in its way - because it makes frontline professionals forget the public altogether.

Winsor was absolutely right about that much.  He was also right about three other aspects of all this.

First, the target culture has been staggeringly wasteful of police resources.  If you don't believe me, read the extraordinary revelations of the police blogger Inspector Guilfoyle, who has blogged about precisely this, explaining absolutely correctly that:

"as you go down the levels of hierarchical organisations, the obsession with hard numerical targets intensifies. By the time you get to the front line, believe me, people DO pay A LOT of attention to the actual targets. The targets then become a focus for activity, driving behaviour and creating a culture of unhealthy internalised competition and individual blame." 

Incidentally, a brilliant blog called Systems Thinking for Girls has set out quite clearly why targets lock in failure and it is seriously worth a read.

Second, part of the prevention issue for the police is what the systems thinker John Seddon calls 'failure demand'.  It is the failures of other public services, notably in mental health, that really waste police money.

Third, Winsor's rhetoric is absolutely right.  The future of policing is indeed prevention - it is the future of all public services - but it requires a completely different institution to make that possible, more outward-facing, dedicated to very local alliances in neighbourhoods, and street-by-street attention to detail, and to reaching out beyond the boundaries of police work.  

And, above all, it means working with people - not just getting information from them via technological gizmos - but setting up the local institutions capable of knitting society back together around the police.

If we want to save our public service tradition - and we do - then prevention is the only way forward, the only way of generating the savings we need at the same time as turbo-charging the effectiveness of services.  But to make it work, our institutions will be completely different. 

Why we need a pupil premium league table

Bated breath isn't quite the right description, but I am patiently waiting for the government's official response to the so-called Boyle Review, the independent review I led into barriers to choice in public services.

More on that later (I hope).

But one of the areas I looked at in the review, and returned to in my new book Broke, is the difficulties parents have getting the information they want from school league tables.

The problem with league tables and targets is that they tell you a great deal about how institutions conform to what the government wants, and not much about the things that might interest you - in this case, bullying, atmosphere, creativity, friendliness.

There is also scepticism about the official data in education, both among parents and professionals.  People can see, from their own experience, that league tables can be manipulated by schools – to the extent that schools higher in the league tables may be there partly because they have taught too closely to the tests, perhaps at the expense of a more rounded education.

There is also a difficulty about pupil premium pupils, because the efforts each school makes to help them improve gets lost in their overall league table position.  And it was this that I focused on, and news a few days ago shows that Lib Dem education minister David Laws is also thinking along these lines.  I don't know if this is because of my report, and don't really mind: I'm glad he is.

The pupil premium is a Lib Dem idea and it is supposed to work in two ways - by providing extra money which schools can spend on the pupils who need it most, and by encouraging good schools to take on more pupil premium (free school meal) pupils.

The practical problem with the second of these is that league tables get in the way.  Schools are now able to change their admissions policies to include more free school meal pupils, but have no real incentive apart from the value of the pupil premium to compensate them for the extra cost - and the danger to their league table positions. 

The pupil premium may provide some of that extra power to disadvantaged applicants; equally it may encourage the poorer performing schools to expand faster, given that they have more free school meal pupils.  They get the bulk of the resources.

So there is a danger of a gulf opening up between successful, smaller schools and the increasingly large-scale institutions that cater for the rest of the population, which can give that much less individual attention.  The true believers in competition believe that the good schools must expand, but the truth is that there are so many constrains on this that it would be silly to rely on it happening.

My answer is that there needs to be a league table specifically to show the performance of pupil premium pupils.  To make this visible, you have to challenge the false 'bottom line' given by the existing league tables.  Otherwise the position on the old league tables is an extremely powerful counter-pressure on schools not to risk varying the social balance of their intake. 

Now, I've no idea whether this is what led David Laws to the rather shocking discovery that he made, but it is fascinating nonetheless.

There is a 25 percentage point gap between the achievements of pupil premium pupils and the rest.  There may be socio-economic reasons for this, though I doubt it.  But what is absolutely indefensible is that the gap is often wider in the wealthier areas than it is in the poorer areas.  Buckinghamshire, Wiltshire, Surrey, Hampshire all have much wider gaps.

So I'm glad that Laws will be writing to specific schools to ask where they are spending their pupil premium money, and has promised that a big gap between rich and poor will threaten 'outstanding' status.  I hope he will also do what I suggested, and launch a parallel league table just for pupil premium pupils.

Because the best way to challenge over-powerful and rather unhelpful bottom lines is to challenge them with other perspectives.

Vigilant against the post-human future

Artificial moons, 'geriatiric robots' designed to listen to old people, vats for growing chicken wings - all of these have been predicted in recent decades.  None have happened quite like that.  They rarely do.

This is partly because many elements of the technological futures the big corporations want are actually highly unpleasant or ineffective for everyone else.  And partly because, compared to a century ago - when motor cars, cinematography, submarines, planes were developing so fast - our own technology has actually slowed to a snail's pace.  I've been travelling on jumbo jets now for 40 years.

I know that isn't the conventional view, but I can only apologise for seeing things differently.

But there is one insidious corporate myth which is instantly recognisable.  And there it was again in the Sunday Times this morning, quoted in a review of the new book The New Digital Age, co-authored by Eric Schmidt, chairman of the famous tax-avoiding corporation Google.

"The online experience [will be] as real as real life, and perhaps even better."

The review was by the one person who has most effectively punctured this kind of corporate yearning, Bryan  Appleyard, whose own book The Brain is Wider than the Sky, explains how the digital world is conspiring to reduce human capabilities in order to show how digital versions are somehow equal or superior.  I can't say I've actually read Schmidt's book ("to read it would be to condone it"; F. R. Leavis), so perhaps I shouldn't comment until I have - but this phrase 'better than real' is so interesting, I can't help it.

It was a phrase pinpointed as belonging particularly to California by Umberto Eco in an essay in 1996 called Travels in Hyper-reality.  When I was writing my book Authenticity, there it was again - the idea pedalled by Ray Kurzweil and other virtual reality cheerleaders that virtual sex will be, you guessed it, 'better than the real thing'.

The idea that there is something imperfect about the human spirit that makes it so successful is beyond them. So is the idea that it is the very imperfections in a human body that makes sex exciting.  The diversity of human thought makes progress possible.

This is how I put it in my book The Age to Come:

"The post-modern advocate of artificial intelligence Ray Kurzweil suggests that the first artificial brain will be developed by 2029. The simplest computer has long since exceeded the memory and calculating skills of the cleverest human being. The computer Deep Blue beat the chess champion Gary Kasparov in 1995, it was a formative moment for the age that is to come. Because the challenge is now to set out what it is that human beings can do which no machine ever can – they can create, they can love and they can care."

They can do this in a way that works and fulfils, unlike the geriatric robot.  They can also teach and heal better than the virtual teachers and doctors the corporate world wants, because they can make relationships.

Bryan Appleyard points out that the endorsements of Schmidt's book by Branson, Blair and Clinton demonstrate that his book is the direction the establishment wants to go.  Our problem, it seems to me, is that it is such a narrow future, such an ineffective one, as well as such an isolated and tyrannical one.  The post-human future is shiny, perfect and owned by the tax avoiders.  We should be extremely suspicious of it.

Why everyone needs the middle classes

I have now read through all the responses on Mumsnet to my blog about my book (Broke: Who Killed the Middle Classes?).

I did so with some trepidation because there were 92 of them, and also because - well, how shall we put it - Mumsnet has developed something of a reputation for flame-throwing.  In fact, the worst response I got to my plea to save the middle classes was "aw, diddums".  Others were very supportive.

Though I have found a second stream of  comments on the same website about my Sunday Times article, which includes this rather wonderful condemnation:

"The article is a whinge from those picking lowish paid middle class careers and then not being happy with their choices and the low income that results."

Of course!  That's why I'm so impoverished!  We should have sold insurance.

Three issues have tended to come up:

1.  That I mention London too much.  This is probably true.  But London is simply where the trends are most extreme.  It is also the direction the rest of the country is rapidly going in.

2.  That I am somehow accusing the poor of being 'uncivilised'.  That is absolutely not the case.  I am defending the opportunity to have some space in our lives for education, culture or leisure, or to lead a civilised life.  Not just for the middle classes, but for everybody - and if the middle classes are losing this because they have to hold down three jobs (I know people in this situation) and are measured every second by their 'efficient' employers - then so will everyone else.

3.  That I am somehow claiming that there must still be poor people, because otherwise there can't be middle classes.  This is also nonsense.  It may be etymologically true that a middle requires a bottom (if you see what I mean), but it is not economically true.  There is no reason, except the way economics is currently organised, why everyone should not lead a more relaxed life.

What I am saying is that the middle classes are the front line against a tiny global elite.  If they are deemed 'inefficient' or 'overpaid', and are corroded into a new proletariat - dependent on the whims of landlords and employers - then what chance is there for anybody else?

There is also the usual accusation that I am pandering to people who look down their noses at the hoi polloi (as one critic told me on Radio 3) and who want to send their children to private schools.  In fact, only 7 per cent of UK pupils are being educated privately.  That is not the middle classes, the vast majority of which are fully committed to public education - not necessarily because they want to be but because they can't afford anything else.

So it is worth saying exactly why I believe the middle classes need to survive:

• Because they provide political and economic stability.

• Because their fierce determination to retain some independence, from landlords and bosses, is a vital underpinning for the liberties of everyone else.

• Because the alternative is a kind of 'efficient' tyranny where a tiny elite dominates a vast proletariat, without assets or power.

And if you think that is impossible, have a look at these figures which show that a majority of UK children will soon be growing up below the breadline.

We can't afford a three-day-week NHS

Rather over two years ago, I encountered for the first time the out-of-hours GP service in Croydon.  I rang NHS Direct about my youngest child, who was worryingly feverish.  They eventually put me through to the duty doctor, who advised me to bring him in.

It was the early hours of Saturday morning, and I could not believe what I saw when I got to the our-of-hours service.  A waiting room completely full of ill-looking people, some of them moaning.  It had the atmosphere of a slave ship about it - the dull acceptance on people's faces, the look of exhaustion about the place, as if they had been waiting a very long time.

There was no sign of a doctor, and the people waiting were being processed very slowly by three nurses.  While I was there, one woman collapsed in pain.  The nurses looked sheepish, and I am not surprised.  It was a third world service, for people who had been advised by NHS Direct to go in and had taken the trouble not to just turn up at A&E - which was actually downstairs.

Two doors next to each other, and I couldn't help feeling they would have been far better going to A&E.

Now I don't remember whether this was a service run by Croydoc (which eventually turned out to be run from someone's home in Norfolk) or by the social enterprise Patient Care 24, which were told in January they had lost their contract - covering three vast boroughs - as well.  That isn't the point.  The real point is that Jeremy Hunt was absolutely right yesterday to blame inadequate out-of-hours care for the 400,000 or more people who show up at A&E every week.

But there is another problem behind all this, which is the way that the NHS shuts down at weekends.  Accident and emergency services are among the few which just carry on going, though there are now weekend walk-in services.

This doesn't mean that the NHS works at full stretch for five days a week either.  In most hospitals, Fridays are dominated by preparing for the weekends, and Mondays are dominated by dealing with the weekend problems.  In effect, they are working three days a week with a buffer either side.  My local GP closes at weekends except for an hour on Saturday.

Again, it is hardly surprising that so many people do the rational thing and just show up at the service which remains in place, where there are doctors and equipment and somebody to triage them.

Of course it would be difficult moving to seven-day working right now, when resources are so tight, though it would certainly provide a more efficient service.  But GPs are paid a very great deal to provide this effectively part-time service, thanks to the disastrous 2004 contracts - one of the Labour government's greatest mistakes - and this ought perhaps be the starting point for moving towards seven-day-a-week primary care.

It is too simple to blame GPs for the current situation.  Some of them work extremely hard providing out of hours care.  But the standard of that care, certainly where I live, is so much lower than it was and GPs really need to shoulder some of the burden for putting it right.

How the City ruined the middle classes

‘The riches which should have brought wealth have brought poverty.’

That is what the Spanish economist González de Cellerigo wrote around 1600, and it is worryingly relevant to our own time. Cellerigo was a lawyer in the chancery who worked in Valladolid, the landlocked city where Christopher Columbus died. We don’t know much about him apart from that, except through his writings – mainly the Memorials he published that year, and especially the one with the least snappy title, About the policy restoration necessary and useful to the republic of Spain.

Cellerigo’s thinking was relevant to the middle classes then. But it is also relevant to our own, because he was one of a handful of economists over the previous four decades who grasped what happens when huge amounts of money flood into a nation, as unimaginable sums had flooded into Spain – gold and, above all silver, in treasure ships from the New World.

The Spanish monarchs had agonized about why money was losing its value, prosecuting, occasionally executing, people for causing inflation, and now they knew: too much money chasing too few goods causes the value of money to fall.

The staggering influx of wealth into Spain during the previous century had operated rather as the cascade of wealth into the City of London has operated in our own time. Instead of financing production, it was frittered away on interest payments for debt, buying luxury goods from abroad, raising prices and, in the case of sixteenth-century Spain, on the purchase of Eastern luxuries from the Portuguese empire.

By 1660, the amount of silver in Europe had tripled. Spanish money was worth a third of its value in 1505, and most of the massive injection of wealth which had been siphoned off by the Spanish kings had been wasted servicing debts incurred for their incessant European wars.

Bankers profited. The Spanish crown did not. Financial services grew ever more complex. Worse, Spain soon forgot how to make things on its own behalf, believing that the import of money itself was sufficient for its economy. As much as 80 per cent of the goods shipped from Spain to its new colonies had been imported from elsewhere in Europe.

The business of money for its own sake, the sophistication of financial services, tends to price other productive businesses out of existence, and that was the ruinous effect it had on the Spanish economy. Gold – and therefore money – became more important than the wealth it represented. Of course it drove out productive wealth: it seemed more important than that. Also, the more precious metal there was, the more bankers could extend their credit. The more interest-bearing debt there was in circulation, the more power went to bankers and the more prices rose.

This was the Spanish tragedy in a nutshell. A tiny elite emerged to manage this extraordinary influx of wealth into Spain, which paradoxically destroyed the nation’s productive capacity.

What González de Cellerigo realized, and his predecessors did not, was that this was no accident. The discovery of the wealth of the New World had destroyed the power of the Spanish empire, not through some kind of mistake, but by virtue of economic laws.

Cellerigo didn’t beat around the bush. He articulated what few had really understood before. Spain would have been better off without the Americas. The influx of gold had not been mishandled; it was a disaster in itself. And here is why:

"Our commonwealth has come to be an extreme contrast of rich and poor, and there is no means of adjusting them one to another. Our condition is one where there are rich who loll at ease or poor who beg, and we lack people of the middle sort, whom neither wealth nor poverty prevents from pursuing the rightful kind of business enjoined by natural law.” 

Cellerigo’s diagnosis was that the huge influx of bullion had driven out the middle classes, leaving instead a desperate upper middle class of hidalgos who were snobbish about work (in fact were forbidden to do anything wealth-creating) and looked desperately to well-paid sinecures in the burgeoning bureaucracies, and a desperate lower middle class who had lapsed into poverty and dependence.

The Renaissance Spanish economy was constructed to encourage people to buy government bonds, or juros, rather than investing in business. As in our own time, the economy provided a far better return for people investing in money itself rather than productivity.

The fate of the Spanish at their zenith offers us a terrible glimpse of our own future, and still we have not developed the kind of understanding that Cellerigo did from his office in Valladolid, watching the extraordinary decline of Spain, not despite the influx of wealth but because of it.

Our politicians have not yet seen that the measures taken to make speculation the central purpose of the UK economy – the miscalculations of Big Bang and all that followed – are creating the same small elite and pushing the middle classes slowly into poverty and dependence.

That is what will happen, first for our own generation retiring with our miserable apologies for pensions, and then in the next generation – unable to buy homes and condemned to eking out an existence, in jobs we do not want, just to pay the rent. Unless we learn Cellerigo’s lessons ourselves, in our own time, the decline of Spain is likely to herald our future.

And that, plus a rather more detailed argument about the peculiar way our politics developed over the past three decades, is the key message of my new book Broke: Who Killed the Middle Classes? (published today).

 Let me know what you think!

When I became the squeezed middle myself

Well, now I really know what it's like to be the squeezed middle.  There I was last night on Night Waves on Radio 3, squeezed between Mark Littlewood of the Institute of Economic Affairs and the historian of the working class Selina Todd, being battered about the middle classes

But it was worth it because they were both very kind about the book (Broke: Who Killed the Middle Classes? is out tomorrow).  They just didn't agree with me.

Mark thinks things will get better and better for the middle classes, if only it wasn't for taxes and planning regulations (I caricature his position slightly).

Selina took that classic middle class position - that really I shouldn't be writing about them at all, I should be writing about the plight of the poor (again, I caricature).

I have said the following throughout:

1.  I'm not saying the middle classes are suffering more than anybody else - quite the reverse - but there is still something to write about.  Other people have written about the working classes (Owen Jones for example).  I'm writing about the middle classes.

2.  This isn't just about the current downturn: the trends were there before, collapsing pensions, rampaging house prices, and the moral corrosion that followed Big Bang.

3.  This is not an issue about independent schooling - only seven per cent of UK pupils are educated privately, but well over 60 per cent are still home owners.

But Selina caught me out in one area that I've been thinking about since.  I say that there needs to be a healthy middle class.  It provides political and economic stability.  She said that implies that there has to be bottom; there have to be poor people if there are middle people.  Etymologically, she is quite right - but I don't think she is right economically.

All I am saying is this.  It matters that there should continue to be the possibility of space in people's lives, that they should not need to be dependent on the whims of landlords or bosses, or measured every time they go to the loo, call centre-style.  I am not saying the poor should stay poor.  I am saying that there needs to be the chance of a civilised life.

I am saying that the future looks like a great division between the proletarian, controlled, monitored masses, and the tiny elite.  I am also saying that would be a disaster - but nothing I say implies that people should stay poor.

"All the world over I will back the masses against the classes," said Gladstone.  I've never been absolutely sure what he meant, but I think he meant this.

Be very afraid of a judicial system with a point to make

Reading yesterday that Chris Huhne was back in court fighting an award of punitive costs of £110,000, on the grounds that he took a long time to plead guilty, I was suddenly overtaken by a wave of sympathy for him.

It is true that I am not unbiassed.  I know Chris and admire him a great deal.  As far as I know, there is no law against self-incrimination - quite the reverse - so I don't see why he should be punished twice in this way.  But then, I am not a lawyer either.

The really extraordinary thing is that Chris Huhne and Vicky Pryce were given eight months in prison for a non-violent single offence, and - let's face it - a rather common offence too, committed before he was even elected.

I know there ought to be another standard for cabinet ministers who lie to the authorities, but this does explain a little why our prisons are being so pointlessly overcrowded - 83,000 in England and Wales according to the most recent statistics which came out on Friday (down on last year, but still 3,500 over maximum capacity).

This in itself is some explanation why crime remains such a problem: prisons are so ineffective that the rate of prisoners reoffending within a year after release has just risen to 26.8 per cent.  Some prisons are such breeding grounds for crime that the rate is over 70 per cent.

Worst of all, perhaps, imagine having to listen to the hypocrisy and cant, piled high from the prosecution lawyers and others over the Huhne case.  Ugh.

But then, they have a point to make.  Chris Huhne was a thorn in the side of the establishment.  Too many people pretend that partners were driving when they get flashed by robot speeding cameras.  He must not just be jailed, he apparently has to be talked to death, humiliated - and then fined.

I agree, I am not an objective observer - but I am unsure whether anyone ought to be imprisoned when they are no danger to the public.  There may be exceptions in the case of multiple offenders, but they will be very rare.  But like the Myth of the Great White Defendant in Tom Wolfe's Bonfire of the Vanities, Huhne was so unusual, so privileged in comparison to the hopeless cases who queue through the criminal justice system, that he had to draw the full enthusiasm of the system down on him.

By so doing, he revealed just how ineffective it is.

Which brings me round to Rolf Harris.  Now, I've no idea what he is accused of, or when.  But, again, you have to beware the judicial system when it is trying to make a point - this time, a mea culpa response to their failure to restrain Jimmy Saville.

I don't know Rolf, though it is true I'm not objective here either - I could forgive him almost anything because of the role he played in my childhood.  But I can't see how anyone can defend themselves effectively against an accusation about something that happened three decades or more ago.

You know there is a whiff of a witch hunt when you have to think twice about criticising a prosecution in case people think you have something to hide yourself.

All this provides some clue why low level and violent crime remains such a problem in so many places.  Because the system is off trying to make points, investigating elderly TV presenters after the horse has bolted, and filling up the prisons so counter-productively.  What they ought to be doing - as they have been so effectively in New York - is building very local partnerships with communities to fight crime street by street.

In the end, as I may have mentioned before, what is important is what works.

Violet, Winston and the meaning of Free Trade

The controversy in recent weeks about whether Violet Asquith flung herself off the cliff for love of Winston Churchill has been preying on my mind - in a mild way, of course.  I suddenly remembered that, unread at the back of my bookshelf, I had a copy of a book called Winston Churchill As I Knew Him by the lady herself.

I got it down, blew the dust off and started to read.  There wasn't anything salacious in it about their relationship (it was published in 1965, and does actually mention the cliff - though not the fall).  But it is also by far the best work of political history I have ever read, atmospheric, pacy, and beautifully written.

I'm still only half way through - I obviously don't have enough baths to get through all 520 pages that fast - but it is a really extraordinary evocation of the background and drama of the great period of the Campbell-Bannerman and Asquith reforming government, seen through her eyes  but also through Churchill's. The author's purpose is partly, it seems, to remind people after Churchill's death that some of his greatest achievements had been as a Liberal minister.

But what has really set me thinking is her description of how Joseph Chamberlain's intervention on imperial preference - keeping out foreign imports using taxes - split the Conservative Party so thoroughly after 1903 that it led to the Liberal landslide of 1906.

This is Churchill hitting back immediately from Hoxton:

"It will need his most weighty arguments ... all his courage and all his oratory to persuade the English people to abandon the system of Free Trade and cheap food upon which they have thrived for so long and under which they have advanced from the depths of poverty and distress to the first position among the nations of the world."

Now, bear with me on this, if you can face it.  I've been asking myself why Free Trade could so destroy the Conservatives and so unite the Liberals, when the same cry today might equally work the other way around - and I have wondered whether this might be a clue to why the Liberal Party is not quite the rampaging beast it once was (in the nicest possible way).

I believe the answer is this.  Liberals and Liberal Democrats have allowed the Conservatives to re-define Free Trade along their own aristocratic lines.

Let's imagine for a moment clawing back the idea for Liberalism, realising that - far from enjoying Free Trade - we are actually now battered by semi-monopolies and are paying more money for our basic foodstuffs because of it.  When Monsanto owns 96 per cent of the GM seeds planted in the USA, when Tesco dominates a third of all the grocery sales here, and where their dominance keeps out the kind of challenge from below that the great Liberal Karl Popper said was the basis of progress - that is not Free Trade in the old Liberal sense.

Free Trade has become the right of the powerful to dictate to the powerless.  It is not what its Liberal creators intended - an extension of the anti-slavery campaign to allow people to escape this kind of tyranny by buying where they want.  Free Trade has become a perversion of itself - a privilege to monopolists and speculators to do what they like.  It is the precise opposite of the idea which once united the Liberals and gave them the power to reform.

The Conservatives are just as split on imperial preference as they were back in 1905, when a leading backbencher described himself as "nailing his colours to the fence" - assuming that imperial preference has become the European single market (that is what Oswald Mosley said, certainly).  But the Liberals have abandoned the Free Trade battleground.

They have certainly abandoned the old Liberal idea that Free Trade was the basis for world peace.  You don't hear that any more (though Margaret Thatcher said something along those lines).  It certainly isn't peaceful if it becomes a licence for clashing corporate titans or laying waste developing countries with economic muscle.

We might have to call it something different these days - 'open trade' maybe.  But it needs redefining, just as Liberalism needs to commit itself again to small business, small-scale entrepreneurship and major anti-trust.  But it is now time for this, it seems to me, and belated thanks to Violet Bonham Carter (nee Asquith) for making me think about it.

On getting onto the front of the Sunday Times review section

I don't know what I think about paywalls for online news papers, but - despite what I might have said in the past about making the universe free-to-view - paywalls can be pretty damn irritating.  Like today.

Today, I want to link to the lengthy extract from my new book about the death of the middle classes on the front of the Review section of the Sunday Times but, although I can link to it, I know that people will have to pay a subscription or come up with some kind of password to read it.

The same goes for yesterday's book review in The Times, a thoughtful piece by Anne Ashworth.  It's like buses: you wait all your life for this kind of coverage for a book you've written and then, suddenly, two of them come along and you can't link to them to spread the word.

Still I can't really complain.  The Sunday Times has also borrowed the last section from the end of the book to make it sound a bit more upbeat, which is fine by me.  The book itself, Broke: Who Killed the Middle Classes?, is published on Thursday.  Not everyone will agree with me - especially if they don't actually read it - but I hope it will get some of these issues talked about.  This is the key paragraph from the extract they used:

"Given that extraordinary shift in fortunes – that cascade of money through property and financial services known as Big Bang – why is it that the middle classes feel so threatened? Why have they been sidelined by a new and aggressive international class of mega-rich? Why have their homes and way of life and retirements become virtually unaffordable, with home ownership falling steadily, and now lower than in Romania and Bulgaria? Why are they in such a panic about their children’s education? Why has their professional judgement been shunned? And why have they allowed their hard-working duty to career, family and salary to be so futile – given that, however successful they become, there is a banker half their age whose bonus makes them look ridiculous? In short, why are we wondering again whether the distinctive lifestyles of the English middle classes can survive?"

It is, in fact, a kind of non-fiction whodunnit, taking us back through the Thatcher, Major, Blair and Brown years - a sort of contemporary history as we all lived it - to find out what went wrong.  I hope it will spark a debate.  Probably what I need is for someone to review it with a sledgehammer and cause a stir.

Who should I ask?  Nigel Lawson?  Peter Mandelson?  Fred Goodwin?  Bob Diamond?

Why iron control leads to hospital mistakes

When the management theorist Naresh Khatri went to live in the USA, having been brought up in India and Singapore, one thing particularly intrigued him about the American health system: why did everyone talk about how much it was changing when, as far as he could see, it wasn’t changing at all?

Khatri had been in the USA before as a student, and – to him at least, and despite all the rhetoric and cacophony of change – nothing actually seemed to be any different. Certainly there were changes of regime. There were the new health maintenance organisations and the rationalisation of diagnoses and symptoms. But the basic feel of surgeries and doctors was much as it always had been. 

There were still hugely expensive law suits, and the same vast insurance bills, the same huge hospital corporations and the same mistakes. Nearly 100,000 patients died in the USA every year because of mistakes, more than car accidents and breast cancer (in England and Wales, the equivalent figure is contested, but is variously put at 800 or 34,000 a year).

Khatri had no inside experience of healthcare at that stage. He had worked at the Federal Bank of India for five years. But like any good academic researcher, he set out to find out why there was this mismatch between his perception and everyone else’s. 

He began to organise seminars on healthcare among his fellow management academics at the University of Missouri. He tested his ideas against similar research in other countries, and the conclusion he came to was that hierarchical management style, the blame culture, and the obsession with top-down IT systems, had just carried on regardless. If the new systems, which caused so much argument, were really more efficient, you might expect that mistakes would be going down too. Actually they stayed much the same. 

 Health reformers were even using the burgeoning cost of hospital mistakes as a reason for standardising and controlling even more, but there was little evidence that they were right.  More targets, more numbers, more control, less change.

Khatri began to suspect that the highly-controlled culture of compliance and blame was actually why the mistakes were happening in the first place. So he and his team designed an experiment to categorise 16 hospitals in Missouri by management style to see if it had any effect on hospital mistakes. They also put in a whole series of tests to see if they were thinking along the right lines, including surveys of over a thousand health providers across the USA. 

The results were peculiar: the expected link between medical mistakes and a culture of blame wasn’t there in the sample. But what was clear was that there were fewer mistakes when the medical staff trusted and felt good about each other, and more drug-related errors in hospital cultures which were exerting the most detailed control.

“The current bias towards innovative technological solutions over those that require the transformation of current dysfunctional culture, management systems, and work processes in healthcare must be corrected if medical errors and quality of patient care are to be taken seriously,” he wrote.  More about Khatri and his research in my book The Human Element.

This confirmed that control is less effective than letting staff use their human skills, but it doesn’t explain why this might be. But other research that was going on at the same time suggested a reason. Another study found that up to 80 per cent of hospital mistakes in American hospitals had less to do with technical problems than with the personal interactions inside the healthcare teams. 

 Working in a blame culture forces staff to protect themselves, even if it is just against reams of paperwork. They put more effort into shifting blame than genuinely discussing mistakes, or what are called in the jargon ‘adverse events’. In other words, it is their relationships with each other – and with their managers of course – that make the difference. This isn’t about face-to-face relationships with patients, it is about face-to-face working relationships.

“We tend to think that, without regulation, people will do stupid things,” says Khatri. “But actually, they don’t. And when you exercise that kind of control, then you are not using people’s ideas fully.”

I thought of Khatri's research when I read the government's response to the Mid-Staffs crisis, and in particular John Seddon's system thinking response yesterday.  More control is not a solution.  More targets means more effort going into meeting the targets and regulations and less on patient care.  It is precisely the opposite of what needs to happen.

Increasing the penalties for people who massage the target figures is the logical next step for iron control, but as Seddon says, it is impossible.  To make things work, frontline staff always massage the figures.  They have to.

Whitehall has still not learned from the failure of control during the New Labour years.  It is staggeringly expensive, largely because it shifts resources and imagination into meeting the regulations rather than doing the work effectively.  In fact this gap in learning is, for me, the central misjudgement by the coalition - and I don't really understand it.

Why do people who are so determined to set the economy free - so that people's entrepreneurial skills can be used - not realise that the same applies to public services?

BSE, MMR and official trust

This may be my advancing age, but I sat through Tuesday's rather patronising phone in programme on measles and MMR with mounting irritation, and the news that the inoculation programme in Swansea is not going very well has confirmed me in my discomfort.

I have thought hard before writing this particular blog.  But I can't be the only person to feel uneasy about the way this story is being communicated.

Before I upset everybody, let me say that I did, after some thought, have both my children inoculated using the combined vaccine some years ago.  I left it later than I was advised to because I didn't want to overload their immune system, but I did it before they went to nursery.  I don't have any regrets either.  There were no major side-effects.  It was fine.

Looking back on that period, the whole argument seemed a lot more confused than it is currently being painted - and I speak as a non-scientist.  Because I didn't really trust everything I was being told.

It was confused because autism and aspergers rates were rising spectacularly (61,000 per cent over ten years in Illinois), and I've written elsewhere why this was.  As far as I know, it had nothing to do with MMR, but you can see why people felt it might have done.

It was confused also because the previous health scare had been about BSE.  And in that case, the establishment had closed ranks to explain aggressively that there was NO risk in eating beef.  They execrated the reputations of any lonely scientists who said otherwise and bugged their phones.  They battered us with 'evidenced-based' policy, aware that - actually - nobody would be given funding to research BSE.  They took to the TV cameras to feed their children beefburgers.

As we all know, BSE was all too real, though - as it turned out - rare in humans.

So when the same thing happens again, what are people supposed to think?  The establishment execrates the reputation of Andrew Wakefield.  They talk about the 'evidence', when they know that funding is impossible to study the links between MMR and autism - try applying and see what happens to your career.  They put on phone-in programmes with experts who explain ad nauseam that there is no evidence for any link.

So what did people do a decade ago?  People remembered the controversy about Gulf War veterans whose health had collapsed after a cocktail of vaccinations.  Most people know somebody whose child has had quite serious side-effects from the MMR jab, even if it isn't autism (I certainly do).  Do you believe a government when you know that, even if there was a risk, they would probably begin by denying it?

Expediency is Whitehall's middle name.  Would they tell the full truth if there was a health problem linked to one of their pet projects - fracking, nuclear energy, GM food?  I doubt it.

Andrew Wakefield has recently claimed that US courts have paid out compensation to parents whose children developed autism after having the MMR.  I don't know if that is true or not.  All I know is that the Independent was in turn execrated for publishing his article.

The real problem here is only partly to do with Wakefield's research and the controversy that followed.  It is about the breakdown in people's trust in 'official' advice.  Personally, I find the claim that there is NO risk from MMR very difficult to swallow.

I allowed my children to have the jab because it seemed to me that the risks from complications from measles were much greater (also I very much don't want to get mumps, for obvious reasons perhaps).  But I got no help from the government weighing up these risks, just a rather cross phone call from a local health official who believed I was delaying too long.

All this explains why I winced though the BBC phone-in, and found it so unconvincing.  It was too heavy-handed.  It gave me more sympathy for the parents of Swansea who did not respond to official reassurances, because those assurances had been compromised years before.

That doesn't mean that I believe the Swansea measles outbreak is anything other than a disaster.

So is there a solution?  People will only trust official advice if they sense they are being told the whole truth.   If there is a balance of risks - and there clearly is - then that is what needs to be explained.  People are not going to be brow-beaten by experts wheeled out to explain there is NO risk, because there is never NO risk.

I know it would be in the public interest if there was NO risk.  I know that single jabs, if their import had not been banned, would confuse the public further.  But expediency isn't the same as the truth.

What we need is an Office of Health Responsibility, dedicated to the truth beyond expediency and with their own research budget.  Some people will panic faced with a complex message, but they will panic whatever happens.  In the end, trusting people with the full inconvenient truth is the only way to regain a bit of trust.

Why Tesco is sinking

I wrote a book a decade or so ago called Authenticity which made me pretty sceptical about the whole idea of 'brands'.  Despite the rhetoric from marketing gurus, most people hate the brands they use and are endlessly frustrated and disappointed by them - yes, I know, there are exceptions.  The aggressive apotheosis of branding as the key to success really is a lot of old twaddle.

So when a friend of mine alerted me to their new local Tesco, which is doing all it can to hide the fact that it is a Tesco at all, I suddenly got interested.  The news today that Tesco's performance was its worst ever, and that they are pulling out of the USA, rather confirms it - and if they are trying to keep the brand secret, Tesco executives themselves must be slightly aware of its toxic elements.

This appears to be the case with the Tesco chain of One Stop convenience stores.  My friend asked why it didn't say 'Tesco' on the outside of their new One Stop in Solihull and was told by the sales assistant that it was now policy because they didn't want to put customers off.

It is worth asking for a second why this might be.  Is it that people are reacting against the overwhelming technocratic feel of Tesco, the sense of the security guard eyeing you up as you struggle with the robots at check-out?  Or is it that people have now grasped the truth - that chain stores tend to suck spending power out of local economies, and tend to make people poorer as a result?

Is it even that people sense the huge privileges that Tesco's size give it - the right not to pay bills for 90 days when smaller competitors have to pay in 30 (providing them with the interest-free loan equal to two months stock)?

I know it is also that Tesco prefers not to allow comparisons between its Tesco Express stores and its One Stop stores, which are in poorer areas and charge up to 14 per cent more than in some other places (as always, the poor pay more).

A bit of all of them perhaps.  Somehow this is even more significant than the news that their American chain Fresh & Easy is up for sale.  When a shopping chain feels it necessary to pretend they are somebody else, then the writing is on the wall.

The real issue is this.  What kind of entrepreneurial activity is most likely to bring local recovery and local resilience?  The answer is probably not a chain store that competes in every market - the very opposite of an anchor store.  It is going to be the revival of a genuinely local entrepreneurial culture.

What holds this up?  The failure of political debate to distinguish properly between being pro-big business and pro-small-business.  What we really need is to be able to articulate a political approach that allows the small to fight back effectively against the big, and stop pretending that pro-big business policy is somehow automatically supportive of small business, when the reverse is the case.

When the biggest of the big starts pretending it is a different brand altogether, then maybe something is shifting.  Or am I being hopelessly optimistic?

Whose side is Toby Young on?

Well, I enjoyed being on the receiving end of a Toby Young review on Sunday.  Kind of.

Of course, I realise he is busy - probably too busy to take in everything he reads in all the books he reviews.  But I'm absolutely sure he has taken in the back cover, perhaps some of the first chapter.  And he definitely took in part of the last chapter, too, of my new book Broke: Who Killed the Middle Classes?  What more can you ask of a busy man?

You can see for yourself in last Sunday's Mail on Sunday, but it isn't online or I would link to it.  It was called 'Time up for Mr and Mrs Average'.

What is more, I absolutely agree with him.  The middle classes ought to survive because of their thrift, public-spiritedness and reverence for education.

What was a bit peculiar is that he hadn't taken in enough of what he read to discover that we are of one mind on the subject.  He seemed to think otherwise.

It is true that I'm not absolutely sure about thrift - I'm not convinced it survived the invention of the credit card.  But, as he should have discovered, I have a whole chapter on the reverence the middle classes have for education.  As for public-spiritedness, it is precisely the ability and willingness of the middle classes to make things happen that makes them so important, as I say many times.  This is what the book says:

"Despite their reputation, the middle classes have actually presided over a period of unprecedented tolerance in British life, embracing a society that – despite the difficulties – is more and more diverse and multiracial, more and more tolerant of the peculiar way that people live, if they are not harming anyone else. And if this was not led by the middle classes, who was it led by?"

I have always rather admired Toby Young, so I was glad to have him onside (even if he wasn't sure if he was).  I am a lonely supporter of free schools in the Lib Dems.  I endlessly applaud his efforts to kick-start a movement of experimental school plantations.

Where I take issue with him is that, instead of ploughing on through the book - and, hey, he's a got a school to run - he decided that, because I had some kind of link to the party, my argument must be typically Lib Dem.  I only wish it was - but tackling monopolies, starting an entrepreneurial revolution, rolling out free schools and creating debt-free money have yet to come within a whiff of the last Lib Dem manifesto, despite my best efforts.

So it is a pity Toby read without inhaling because we need to have this debate, and the future of the middle class seems to me to depend on it.

And there are a whole range of other reasons - political and economic stability, cultural underpinning and much else besides - why it would matter very much if the middle classes began to disappear into a proletarian struggle for survival.

So, here's the question, Toby.  Do you agree with me that the middle classes are vital to save?  Do you agree they are under intense pressure, maybe not uniquely, but still having an increasingly difficult time?  Do you agree that the next middle class generation will struggle to afford a roof over their heads?  Or is everything fine?

The great Tory welfare contradiction

I must admit I had a small moment of relief, even pride in the Lib Dems, when I heard that Vince Cable had resisted calls to prevent him from raising the minimum wage for apprentices - as well as for everyone else.

The adult minimum wage is now raised to £6.31.  It is still below the level it needs to be to make it a 'living wage', and until it is, the government will still be subsidising employers, which is a ridiculous position to be in.  Old-fashioned Liberals like me still cling to the dream, not just of a minimum wage, but a basic income paid by right of citizenship, allowing us to dismantle the bureaucracy of welfare, partly at least.

But that, as Rudyard Kipling would say, is another story.  Certainly another argument.

What is significant is that Vince Cable raised the minimum wage on the very day that the benefits cap was introduced in a few experimental areas in London (in Mrs Thatcher's day, they used to experiment on Scotland; now it is London).

Is this deliberate on his part?  If not, it should have been, because it reveals a deep contradiction in the traditional Conservative position on unemployment.  They have two propositions, both of which are true:

• It must pay people to come off benefits and get a job, otherwise the welfare system continues to trap people in dependency.
• People in jobs must not price themselves so highly that they can't get a job.

Both of these are quite correct, but - in practice, taken together - they contradict each other once they are put into effective policy.  It means either that we should lower the level of benefits so that it pays to take a job (the justification for the benefits cap) or we should lower wages to make people more employable (the Conservative backbench position on the minimum wage).

In practice, one policy renders the other one impossible.  Doing both together would instigate a miserable, self-defeating race to the bottom, where welfare payments keep being cut to undercut falling wages.

The truth is that wages are already far too low to sustain a prosperous economy.  It is self-defeating to reduce them to Far Eastern levels because the demand would then disappear from our own economy, and - when boardroom pay went up 49 per cent in 2010 alone - this seems unlikely to have much leadership and example behind it.

In practice, you can't cut welfare benefits and wages and expect to achieve both outcomes.  There is the Great Contradiction.

The problem of low wages is at least part of the problem about the benefits trap.  When around a fifth of people working in the UK are not earning a 'living wage', then we have a problem - and the problem is that tax-payers is expected to subsidise employers, and I don't see why we should.

Nor is this a problem that is confined to the low paid, given that inflation is now rising at a rate twice that of wages.  The effect it is having on the middle classes, and whether they can survive at all, is the subject of my book (out next week) Broke: Who killed the middle classes?

Naval strategy lessons for the NHS

It is the evening of 1 August 1798, in a sticky Mediterranean dusk, and Horatio Nelson’s Mediterranean Fleet has finally tracked down their French opponents at anchor in Aboukir Bay on the Egyptian coast. He is determined to bring them to action, even in the gathering gloom.

The British gun crews are crouching by their cannon while their French counterparts heave their heavy armaments onto the seaward side where the British will come.  The Battle of the Nile is about to begin.

Nelson had prepared for this battle by setting out clear rules of engagement, discussed with his captains evening after evening around his table on the Vanguard. That was the broad plan; the details would have to take care of themselves as circumstances arose, and he trusted his captains to interpret the plan effectively.

Nelson was no disciplinarian, and he had already gained a reputation for disobeying orders during the Battle of St Vincent. He steered out of line because he saw the chance to cut off a group of Spanish ships from the rest, and managed to capture them. Even if this wasn’t explicit, his captains knew this was his style and it was what he expected of them – not slavish obedience to detail, but enthusiastic commitment to the objective.

These regular dinners were the beginning of the trusting collegiate atmosphere he managed to instil among his commanders, which gave rise to the idea of a ‘band of brothers’. 

Captain Thomas Foley in the Goliath happened to be leading the line when the French came into sight, he ordered his men to get the battle sails ready, so that he could stay in front when the order came to get into line of battle. 

So it was Foley, standing next to his helmsman, the battle ensigns flying behind him, who saw the emerging opportunity as the disposition of the French ships became clear. There they were anchored along the shore, and he realised there might just be enough space to squeeze along their undefended side, between the French line and the shore itself.

It was a risky decision. Thinking fast as the battle got ever nearer, Foley realised that Bruey’s ships must have anchored with enough space to swing round at anchor as the tide changed, so there would almost certainly be enough sea to avoid running aground. But there was no time to consult anyone else. Foley steered between the French ships and the shore leading the British line after him. Foley was rightly hailed as the hero of the victory at Aboukir Bay of which Nelson had been the architect.

So although Nelson laid down the framework for the battle, with regular dinners for his captains, making sure his intentions became second nature to them, Foley knew he was allowed to do something entirely different if he saw an opportunity. He was able to break with conventional thinking, and the apparent drift of his orders, and use his intuition. Would he have managed to win the battle if he had been governed by the management culture from British public services two centuries later? Hard to know, but probably not.

The point was that he knew he had to take the decision, knew he was expected to, felt confident to do so, and did so in style.

Fast forward nearly a century to 22 June 1893, but again to the British Mediterranean Fleet, by then the decisive force in global military affairs. By that time, the Royal Navy revered the name of Nelson and paid lip service to his cult of structured disobedience – the telescope to the blind eye and everything that went with it – but had rather forgotten what it meant.

Nelson’s successor as commander was Admiral Sir George Tryon, charming on the dinner party circuit but known as a dictatorial martinet when he was at sea. He tried to keep his intentions hidden from his subordinates to help them practice in unpredictable situations but, the day before this fatal incident, he had actually told his captains what he wanted to do. 

He was going to turn his two columns of ironclads towards each other before they anchored for the night. It was a risky manoeuvre. Some brave captains suggested that, given the turning circles of the ships, the columns ought to be at least 1,600 yards apart when they started to turn. It wasn’t quite clear whether Tryon had agreed.

When the time came, off the coast of what is now Lebanon, Tryon unexpectedly ordered the two columns to start turning when they were only 1,000 yards apart. Two officers queried the order, but he snapped at them to get on with it. Admiral Hastings Markham, leading the other column, was confused by the dangerous signal and delayed his acknowledgement. “What are you waiting for?” signalled Tryon.

What was going to happen seemed horribly apparent to everyone except Tryon, but nobody acted to prevent it. Three times, the flag captain of his flagship Victoria asked for permission to go astern as the two leading ships hurtled towards each other, but did nothing. Only at the last minute, as Markham’s flagship Camperdown hurtled towards the Victoria with its ram below the waterline, Tryon shouted ‘Go astern, go astern!”

It was too late. There was a grinding crash as the Camperdown’s ram buried itself in the flagship. Victoria capsized and sank thirteen minutes later. As many as 358 sailors lost their lives. One of them was Tryon, who was said to have appeared mysteriously to his wife and guests at a dinner party in Eaton Square at his moment of departure.

These two stories, both about the commanders of the British Mediterranean Fleet, provide a blueprint for different organisational styles. Hospitals are not quite the same as fleets but, even so, organisations run by Nelsons tend to work, and those run by Tryons tend not to. Tryon organisations can get by, but never quite in the brilliant ways that the Nelson organisations do. 

Ironically, the ill-fated Tryon was always known as a brilliant and innovative strategist. His fatal flaw was his authoritarian style of leadership, which left those who would have been in his band of brothers – if he had been Nelson – fatally in the dark. They could see the details of what they were supposed to do, but not the big picture. There they were, flailing around, not daring to act to avoid disaster even though they could see it coming.

The situation was extreme, one ironclad with a ram bearing down on another, but it is also familiar. We have all worked for organisations where a similar culture prevails, where disaster looms and most people decide it is probably best to say nothing. 

We could say things that would improve services or performance or avoid accidents or disasters, but it is less risky to keep quiet. Maybe this doesn’t matter so much running fast food franchises or corner shops, but in hospitals it matters very much indeed.  And in the NHS as a whole.

I've set out these things in response to Roy Lilley's excellent blog on Letting-Go Management in the NHS.  He is absolutely right:

"Our-NHS is going to go through a tough time, instinctively some managers will think they have to become tough. They think tricky times and hard decisions call for tough management. Not true."

That is an urgent message for the NHS.  What it so badly needs, to find the creativity and innovation - and I may say, also the savings - is the maximum dose of flexibility, to set people free to solve problems in the best way that suits local people.  More about this naval parallel in my book The Human Element.

Why M&S can't claw their way back

Between 1880 and 1910, a third of all the Jewish people on the world were moving continents, squeezed  into dirty, lice-infested, black-funnelled steamships, arriving in London Docks or Ellis Island in New York Harbour, hoping for a new world, often owning nothing more than they were wearing.

One of them was Michael Marks, who seems to have decided on England because his older brother Barnet had gone there first. But as Michael arrived in London in 1882, with enough money for the train to Stockton-on-Tees, he found that his brother had gone – or was going – to the Yukon to join in the gold rush. Barnet also went into retailing and opened a successful shop in Dawson City. Something about the Marks family seems to have put retailing in their genes.

So there was Michael, without language, money or prospects, but with something else. There was clearly something about the family that drove them to sell, and here he had arrived in the right place at the right time.

There was a retailing revolution under way, to serve the growing middle classes in their new urban terraced homes, like Mrs and Mrs Pooter in Upper Holloway, with a little yard at the back and maybe a housekeeper and maid. There was a wealth of cheap manufactured goods now on the market, filtering through to the upwardly mobile working classes, whose incomes were steadily improving throughout the 1880s.

It was 1884 before he acted, the year of the siege of Khartoum, of Huckleberry Finn and the Fabian Society. He decided to move to Leeds, a burgeoning Yorkshire city, with a population of 300,000 clustered round the railway line to London. He particularly chose the district of the Leylands, with its strong Jewish population steeped in the clothing trade. Here he was going to stake his claim to the new world, and here – lo and behold – he encountered the help he needed.

The local wholesaler Isaac Dewhirst was wandering along Kirkgate one morning when he was approached by a man who said just ‘barons’. Realising this apparition spoke no English, he turned to his manager who spoke Yiddish and discovered the he was looking for Barran Clothiers, which was known to give work to refugees. 

It was a lucky coincidence. Dewhirst was fascinated by Marks and offered him to lend him £5. Marks asked instead if he could take the money in the form of goods and pay off the cost in instalments. Dewhirst agreed, and Marks became an itinerant salesman in the Yorkshire Dales, selling buttons, wool, tablecloths, sacks and socks. It is a measure of the slightly unworldly company that Marks was about to found that the firm of I. J. Dewhirst and its successors are still supplying them to this day.

Marks was a damn good pedlar, but it was an exhausting business.  Market halls were to the working classes what department stores were to the middle classes. They were all-weather affairs. You could buy nearly everything under one roof, and they were cheap. 

But Marks had a language problem. He solved it by laying out all his goods on the table, rather than keeping the bulk of them under it, so that people could handle what they were about to buy, rather than ask questions about it. He also began what became the credo of his company. 

He avoided long haggling conversations with the customers, by classifying everything according to price. Above the section for penny goods, he coined what became one of the most successful advertising slogans ever invented: ‘Don’t ask the price, it’s a penny’.  A strategy being adopted even now by the poundshops.

So began the company which became Marks & Spencer, which - under Michael's driven son Simon - eventually sold a quarter of all the men’s pyjamas and underwear and children’s socks in the nation, and a third of the bras, boy’s underwear and children’s dressing gowns.

I describe all this in the light of the latest figures which shows M&S's clothes offering still sinking.  You can find out more of the bizarre history of the company in my book Eminent Corporations.

The big question is, where did they go wrong?  The answer, it seems to me, is they kept on listening to the siren voices of those telling them to appeal to everyone, and especially the trend-setting young.  Hence the terrible mix of children's clothes you find there now, covered in logos and desperately trying to be trendy - while John Lewis has usurped their place as clothing providers to the middle classes.

That and their terrible fall from grace in the 1990s, betraying the UK textiles industry - and all the links with trusting suppliers that had made the company so innovative - not to mention the vacuous pursuit of share price at the same time, the last resort of those without strategy.

It is a sad story and I wonder whether they can recover their position.  My feeling is that John Lewis is a mutual, and is therefore bound to be more successful.  In the end, the mutual going head to head with a hierarchy is bound to win - and M&S was always the most hierarchical company.

This is an important experiment to make.  Because being dependent on the financial markets now looks like the kiss of death for UK companies - the precise opposite of what we have been told for the past generation.

Who authorised the Thatcher military funeral?

The British political processes are a stupendous thing.  You should never under-estimate their ability to seize on some symbolic element of what might be something quite important, and worry it to death - and then, when they have solved it, think that somehow the whole issue has been resolved.

Something similar seems to be happening over the completely pointless row over the Ding, Dong song.  It is pretty tasteless to celebrate a death, and perhaps the BBC is in a difficult position - I don't know.  But really, on the storm in a teacup scale, this is about Force 8.

But there is an underlying issue which has barely had a look in.

Even if Margaret Thatcher was the giant figure that she is being painted, and I am not at all sure that is the way history will see it.  Yes, there were major changes that took place during her time, but I am unsure whether they are really down to her.  There are some important and terrifying side-effects as well, as I have argued here before.

Even if she was, I feel increasingly uncomfortable that the whole celebratory mechanisms of the state are being rolled out to mark her death - the Queen, the military, gun carriages.  These things very occasionally happen with politicians: the Duke of Wellington (see picture) defeated Napoleon, Winston Churchill united Europe against the Nazis.  Whatever else you might accuse Margaret Thatcher of - uniting people isn't one of them.

I believe in the monarchy.  Call me old-fashioned, but I believe it is a vital buttress against fascism and extremism.  When you organise the state institutions as if we were a presidential republic, it undermines those institutions that ought to stay above the fray.  The sheer bathos of it is quite undermining enough; the monarchy and the military are compromised.

So here's the key question.  Who authorised this embarrassing and inappropriate military funeral and when?

I think we should be told.

Why class really isn't about money

We may not think about class much these days, but the Today programme obviously does - returning to the theme yet again this morning (0855), and enjoying the thought that George Orwell identified himself as "lower upper middle class".

It is conventional to say, as Juliet Gardiner did this morning, that we are confused about class.  I'm not sure we are, but the BBC is: it seems to think that class is all to do with income.

That is why the Great Class Calculator identifies me as 'traditional working class' - because it is old-fashioned enough to equate my miniscule earnings as a writer with my class.  This is what I wrote about doing the survey last week.

Earnings just confuse the issue. One recent study in 2008 found that 48 per cent of those calling themselves ‘working-class’ earned more than the average salary and a quarter of them earned more than £50,000 a year. In some cities (Leeds for example) people calling themselves working-class are better off than those who see themselves as middle-class.  A third of bank managers in one recent survey identified themselves as working-class.

This isn't about income, it is about background and culture - and maybe values.  The fact that the BBC is pedalling a calculator that emphasises income is a measure of how much traditional middle class values, of thrift, deferred gratification and independence, are under assault from the new class of Masters of the Universe in financial services.

None of this implies that working class values are any the less important, but they emphasise different things - community, mutual support and dignity.  Or they did.  These are under an even more powerful assault from above.

These things are important. Middle class values, often caricatured, sometimes a caricature of themselves, were shaped quite deliberately by writers like William Cobbett in the 1820s who saw the new class emerge, and were determined that it should strike out in a new moral direction, away from the dissipated aristocracy who gambled, drank, bullied and horsewhipped their way through life.

The middle classes were designed, in that respect at least, as an antidote to ruling class, ubermensch culture.  That is why it is so important that they are defended now, when the possibility of our independence is being corroded.

It is also why I, for one, am determined to argue that there is a fundamental difference beyond income between the old classes and our new overlords - it isn't just that we are the same but poorer.

More about this, and why it is so important, in my forthcoming book Broke: Who Killed the Middle Classes.

How to save public services

I have a feeling that history will see these years in the UK rather differently to the way we see them now.

We imagine that austerity will dominate the history books.  In fact, I have a feeling that the real issue will turn out to be something different - it is whether or not we grasp the urgency of the need to save our public services, the NHS and the rest of the caboodle.

In that sense, the present round of cuts are barely relevant compared to what is coming - not just here but in most western countries.  What with Barnet's Graph of Doom and the various Wanless Reports warning about the future of the NHS, the clues have been there for some time.  Demand is rising so fast, costs are rising so fast, and the last decade or so have equipped our services with a series of reforms so expensive and sclerotic that they may kill the patient.

And at the same time, the economy is going to carry on struggling, as the focus of the world shifts eastwards.

It is extraordinary, given this scenario, just how tame the debate is.  The right just wants to privatise, when profits are going to be pretty scarce, and anyway rather begs the key question.  The left just wants to go back to 1945, to what is arguably the original flawed design that has led us here - the disempowering idea that grateful passive consumers have their needs attended to by busy professionals.

Where is the real debate we need if we are going to protect the kind of society that looks after itself?

I found myself wondering this on Tuesday when I spent much of the day at the very impressive NESTA seminar on People-Powered Health, the not-quite-final hurrah of their ambitious project to apply the ideas behind 'co-production' to long-term conditions - the most expensive, least successful aspect of NHS work.

The central message is that we have missed the critical untapped resource - the users of the system, their families and neighbours.

Conventional thinking suggests that this approach - from peer support to co-delivery - is fraught with dangers and compromise.  Actual experience, as described in a series of films which the People-Powered Health team made, is that it can be transformative, changing the power balance between people and professionals.

Part of the problem is that politicians and policy-makers regard the public as pretty apathetic.  When it comes to sitting on committees - which politicians regard as the highest form of existence - they may be right.  But there is a huge untapped demand from patients and service users to use their time and human skills to help other people, as long as it is in some way mutual.

It would be glib to say this is the only way out of the coming crisis, but it is an absolutely vital part of the jigsaw.  The trouble is that there is what one speaker called a "huge coalition of inertia" when it comes to rolling out change.

But I did find out one absolutely vital piece of information at NESTA.  Their calculations, based on a range of studies, is that People-Powered Health along these lines will cut NHS costs by at least 7 per cent and maybe up to a fifth.  Even 7 per cent comes to £4.4 billion.

Was Margaret Thatcher really English?

“The Saxon is not like us Normans. His manners are not so polite.
But he never means anything serious till he talks about justice and right.
When he stands like an ox in the furrow – with his sullen set eyes on your own,
And grumbles, ‘This isn't fair dealing’, my son, leave the Saxon alone.”

That is the start of the Kipling poem which Margaret Thatcher took with her to her first European summit, where she had resolved to batter the other European nations into giving Britain a rebate.

It shows just how much she was aware of herself as an Anglo-Saxon, and I must admit I rather admire her for it in retrospect. In retrospect, as Jonathan Calder said, I feel a little sad at the end of an era.  Though a few years ago, I cured myself of this sneaking feeling by opening a copy if her memoirs in a bookshop, and suddenly the full irritation with her aggressive ability to batter a handful of half-truths rushed back to me.

Yesterday, I blogged about one peculiar irony about her rule – how it had begun with the idea of a property-owning democracy yet sowed the seeds of a situation where nobody can afford to buy a home except the mega-rich.

But there is an even more fundamental paradox about the premiership of Margaret Thatcher, and it was about how truly representative she was of those Anglo-Saxon values she claimed.

Because the actual direction of travel wasn't Anglo-Saxon self-determination and the apotheosis of small platoons at all.  It was a disastrous centralised rule from Whitehall, sometimes of the most corrosive and aggressive kind.

This was justified partly by contempt for local government, and perhaps an understandable rage at what the big cities had done to their own inner areas; also perhaps a determination to force the pace. The result was certainly a speedy pace, but also a legacy of learned helplessness by the cities, a damaging inability to make things happen, a horror of innovation and an abiding sclerosis where it really matters – at local level.

There is the great irony. She went into battle in defence of Anglo-Saxon values but ended up creating a Napoleonic state, in the image of the great centralised states of the continent – which, one by one, have seen the error of their ways and reformed. The UK has only just begun to fight its way out.

So two points here.  One is the Liberal approach: a revival of those very local institutions that she had so little time for, local organisations that can make things happen.

You can’t devolve power to individuals alone, because it doesn't work – they are too far form decision-making to use it, as the free schools are liable to find out. You need intermediary institutions, as numerous and as local as possible.  You also need powerful, ambitious and democratic local government.  The Conservative Party has still not learned that lesson and the vital importance of local institutions whether they are local banks or local hospitals.

The other point is that Mrs Thatcher never learned about the grammar of change. When you make things happen, you can often create an equal force in the other direction.  This is how William Morris put it:

"Men fight and lose the battle, and what they the thing that they thought for comes about in spite of their defeat, and then turns out to be not what they wanted and has to be fought for again under another name.”
That is how things actually work and Margaret Thatcher never grasped it.  That is why Scottish devolution, for example, is part of her unexpected legacy.

So was she really an Anglo-Saxon?  Or was she actually a Bonaparte figure, a giant of Bismarckian dimensions, with an iron grip, dressed in the garb of King Alfred?

The peculiar irony of Thatcherism

The death of Margaret Thatcher makes me feel rather elderly. Her spirit seems to have presided over British politics, in one way or another, since I joined a political party (May 1979 as it happens). She was 54 when she became Prime Minister, which is what I am now.  Scary thought.

Her death will I expect be a signal for a huge amount of rubbish talked on both sides of the conventional political divide.

The main issue which they agree on is that the moment when she mounted the steps of 10 Downing Street, with St Francis’ poem scribbled on a bit of paper, changed the UK for good. 

I don’t think so.

Yes, she provided an image of resolution despite the turmoil around her – the damage caused to British industry by our very own petro-currency, the bombs and strikes. But she could afford to: unlike the prime ministers before her and after her, she had a working majority to bolster her rhetoric – an inoculation against compromise.

That is the fantasy of the right. The fantasy of the left is that she ushered in a period of unprecedented selfishness and individualism. Nobody who remembers life under the Callaghan government before hers could possibly believe this.

It is true that her government presided over Big Bang, but that was more about the entry of American investment banks into London, seeking whom they would devour.  Yes, it is true, it was also facilitated.

There was a change, but it didn’t come in May 1979 when she took over. It took place in October 1979 when a small group of radicals around Geoffrey Howe and Nigel :Lawson ended currency exchange controls.

After that everything changed: government room for manoeuvre and creative innovation was hobbled, and now $4 trillion changes hands every day, most of it speculative. It was a huge shift; it was not debated by the cabinet (they were informed as the shift happened). Thatcherism followed – but, before they consulted her a few weeks before, the conspirators had been unsure whether she would agree or not.

The truth was that Margaret Thatcher was not originally a Thatcherite. She was a firm supporter of home owners and the middle classes, and she had Thatcherism thrust upon her by the very surprising success of the end of exchange controls.  Yes she grew into the role, but it didn't end as she originally intended.

And here is the ultimate irony, and I have told the full story in my new book Broke. The end of exchange controls led to the end of the so-called Corset, which limited the amount of money that went into mortgages.  An explosion of finance followed.  Nothing replaced it.

The housing market was allowed to let rip, leading to unsustainable house price rises. Thatcherism, which was based on the idea of a property-owning democracy, has led directly to the situation where home ownership in the UK is lower than Bulgaria or Romania – and rents have rocketed as a result.

In short, we now live in a city (those of us who live in London) where only the ultra-rich, ushered in by a mismanaged Big Bang, can afford to get on the housing ladder.  The rest of us, certainly in London and the south east, have to choose between indentured semi-servitude to our mortgage provider or to our landlord.

Ironic or what.