The Office of Fair Trading has nodded through the takeover by Amazon of the Book Depository, the only UK competitor capable of taking them on. We are in danger of becoming miserable supplicants to the new monopolies. Do we want to be cooked Tesco-style, Amazon-style or Virgin-style? And what can we do about it before it is too late?
http://www.libdemvoice.org/opinion-why-competition-is-the-key-issue-26522.html
Wednesday, 11 January 2012
Wednesday, 4 January 2012
The future of the high street - its another squeezed middle
Yes, the high street is in trouble. But something else is going on there which is important for the future - a new division between would-be monopolies trying to sell us everything, and local enterprises with a personality behind them. If you're not one of those, you;re in trouble:
http://www.guardian.co.uk/commentisfree/2012/jan/04/retail-squeezed-middle-high-street?newsfeed=true
http://www.guardian.co.uk/commentisfree/2012/jan/04/retail-squeezed-middle-high-street?newsfeed=true
Tuesday, 3 January 2012
Why we need new kinds of money
“On the morning after the Depression a man came to work building a house, and the foreman said to him "Sorry chum you can't work today. There ain't no inches." He said "What do you mean there ain't no inches? We got lumber, we got metal, we even got tape measures." The foreman said "The trouble with you is you don't understand business. There are no inches. We have been using too many of them and there are not enough to go around.” Alan Watts, From Time to Eternity, 1960
Alan Watts’ famous story about the inches inspired the inventor of LETS, Michael Linton, to launch his new mutual credit currency in Canada. It is also highly relevant to the situation of many local economies in the eye of the storm.
They have things that need doing, raw materials necessary to do them, people who want to do them and people who want them done – but no money to bring those sides together. What we need is the information system necessary to bring those sides together.
Compared to the time when Linton launched LETS, nearly a generation ago, we understand much better how it is possible to create new means of exchange. It has happening, on a relatively small scale, all over the world.
That is why my colleagues and I have worked with NESTA to publish a typology of the different kinds of exchange mechanisms that are emerging.
There are now a great variety of exchange systems that exist alongside the traditional cash economy, ranging from baby-sitting clubs to nectar points. Some of them revolve around complementary currencies, like time dollars or the new Transition currencies like the Brixton pound.
Others are built on systems of mutuality that may be supplemented by the use of cash or complementary currencies, like baby-sitting clubs, peer lending schemes or the Southwark Circle. In each system, the information and the value functions of money are balanced differently.
The main distinction we draw in the typology is between two different kinds of reciprocal exchange:
1. Social exchange: designed primarily to motivate people’s behaviour, to meet social objectives (information function dominant).
2. Economic exchange: designed primarily to circulate and to meet economic objectives (store of value function dominant).
Of course, there are those in each category which occasionally behave like the others – time credits which circulate among the users, or local currencies which are actually just paid out by the local council to motivate people to behave. But their central purpose is what counts here, and – with many exceptions - the central purpose tends to determine the basic design.
That is the key message of the publication: there is no one perfect kind of currency that can solve all the problems of money. You need to tailor your money to solve specific problems.
But the real question is why these have emerged over the past three decades so powerfully? I believe it is for the following reasons:
• Conventional markets are not available for some exchanges which are very important.
• Currencies have become international, and their value is control elsewhere, which means that ordinary money sometimes carries too complex messages for these exchanges (Curitiba might not have been able to clean up the streets with spare capacity on its buses by using money).
• Some vital things are not valued by conventional currencies and market exchanges – human skills, local skills, local food, waste, last year’s fashions etc.
• There isn’t enough money to pay for co-production in the conventional way, and – even if you did – it risks confusing people’s motivations.
All these reasons seem likely to continue, so the basic motivation for innovative new exchanges are probably going to continue as well. What makes the difference compared to the position a decade ago is that there are now successful and mainstream models running, mainly in Latin America – though it is too early to say what will happen with them.
It seems likely that the private sector will catch up within the next decade: there are already plans for new kinds of exchange using Facebook and Google.
Boots’ loyalty card has carried space for multiple currencies for more than ten years now. Mobile phone banking is now mainstream in Africa (thanks to DFID and Vodafone, ironically).
It is hard to avoid the conclusion that most of us will be used to the idea of multiple counting systems, probably on our phones, within a decade or so.
Alan Watts’ famous story about the inches inspired the inventor of LETS, Michael Linton, to launch his new mutual credit currency in Canada. It is also highly relevant to the situation of many local economies in the eye of the storm.
They have things that need doing, raw materials necessary to do them, people who want to do them and people who want them done – but no money to bring those sides together. What we need is the information system necessary to bring those sides together.
Compared to the time when Linton launched LETS, nearly a generation ago, we understand much better how it is possible to create new means of exchange. It has happening, on a relatively small scale, all over the world.
That is why my colleagues and I have worked with NESTA to publish a typology of the different kinds of exchange mechanisms that are emerging.
There are now a great variety of exchange systems that exist alongside the traditional cash economy, ranging from baby-sitting clubs to nectar points. Some of them revolve around complementary currencies, like time dollars or the new Transition currencies like the Brixton pound.
Others are built on systems of mutuality that may be supplemented by the use of cash or complementary currencies, like baby-sitting clubs, peer lending schemes or the Southwark Circle. In each system, the information and the value functions of money are balanced differently.
The main distinction we draw in the typology is between two different kinds of reciprocal exchange:
1. Social exchange: designed primarily to motivate people’s behaviour, to meet social objectives (information function dominant).
2. Economic exchange: designed primarily to circulate and to meet economic objectives (store of value function dominant).
Of course, there are those in each category which occasionally behave like the others – time credits which circulate among the users, or local currencies which are actually just paid out by the local council to motivate people to behave. But their central purpose is what counts here, and – with many exceptions - the central purpose tends to determine the basic design.
That is the key message of the publication: there is no one perfect kind of currency that can solve all the problems of money. You need to tailor your money to solve specific problems.
But the real question is why these have emerged over the past three decades so powerfully? I believe it is for the following reasons:
• Conventional markets are not available for some exchanges which are very important.
• Currencies have become international, and their value is control elsewhere, which means that ordinary money sometimes carries too complex messages for these exchanges (Curitiba might not have been able to clean up the streets with spare capacity on its buses by using money).
• Some vital things are not valued by conventional currencies and market exchanges – human skills, local skills, local food, waste, last year’s fashions etc.
• There isn’t enough money to pay for co-production in the conventional way, and – even if you did – it risks confusing people’s motivations.
All these reasons seem likely to continue, so the basic motivation for innovative new exchanges are probably going to continue as well. What makes the difference compared to the position a decade ago is that there are now successful and mainstream models running, mainly in Latin America – though it is too early to say what will happen with them.
It seems likely that the private sector will catch up within the next decade: there are already plans for new kinds of exchange using Facebook and Google.
Boots’ loyalty card has carried space for multiple currencies for more than ten years now. Mobile phone banking is now mainstream in Africa (thanks to DFID and Vodafone, ironically).
It is hard to avoid the conclusion that most of us will be used to the idea of multiple counting systems, probably on our phones, within a decade or so.
Thursday, 22 December 2011
The perigrination in the catacombs
John Maynard Keynes talked about life without the means of exchange as "a perigrination in the catacombs with a guttering candle". Now that the European banks are stuffing their money into their reserves and governments are committed to spending as little as possible, that perigrination seems worryingly closer.
This is what we can do:
http://neweconomics.org/blog/2011/12/21/how-to-avoid-the-peregrination-in-the-catacombs
This is what we can do:
http://neweconomics.org/blog/2011/12/21/how-to-avoid-the-peregrination-in-the-catacombs
Wednesday, 21 December 2011
The extra costs of the big IT systems
My book The Human Element came out last month and it has been fascinating how people have responded – I got a Facebook message last week from a doctor in New Hampshire explaining how the fake efficiency being peddled by managers at her local hospital was adding to costs.
Then sometimes I run slap bang against new evidence myself. Because I hadn’t until last week used the new NHS Choose and Book appointment system.
The first I knew that I was using it was a letter asking me why I hadn’t called them up to book my appointment with a consultant. I hadn’t in fact received the original letter from my doctors, but didn’t know that at the time.
I called their appointments line. They couldn’t talk to me because I didn’t have a password.
Now I’ve recently been refusing to accept passwords. I have vast numbers of them already for every public and private agency I deal with. It means I have to keep them in a notebook.
Far from making my identity more secure, it is actually making it less so – like the phenomenon of people putting their daily password on a post-it note on their office computers.
So I said I wasn’t accepting any more passwords. Long conversation with the manager who eventually put the phone down on me. Stand off. They said I had to get back to my GP. My GP’s receptionist said I had to go back to the appointments line.
I felt excitingly embattled, but my resolve crumbled when I got my GP on the phone. I don’t want to make her life any more difficult, after all, so I meekly accepted my password.
It is (surely you’re not going to publish your password? I am, really, it’s no use to me) ‘estate tomato’.
The magic words finally got me through the appointment system phone line. They gave me another number to call, which got me through to King’s College Hospital. There a very nice lady said they would send me an appointment date in the old way.
I asked why that required a password like estate tomato and four phone calls. She said that, in practice, the new Choose and Book appointment system – imposed at vast expense by one of the ubiquitous IT consultancies – was so useless that they had opted out.
Why was it so useless? Because as students of the systems thinker John Seddon will know, these centralised IT solutions can’t deal with diversity. They are inflexible and therefore lock in costs.
Was there really a problem of people not being able to prove their identity under the old system? People stealing each other’s hospital appointments? I don’t believe so, yet the IT consultants have clearly made out that there was.
Maybe you need extra safeguards if you have a huge national system. It is another way that big scale solutions lock in costs.
So here we are, another way in which the legacy of New Labour still infects Whitehall. A more expensive system which works less well than it did before because it rules out informal solutions – very urgent appointments, anything which requires face to face judgement.
Inflexible solutions means higher costs. No wonder the deficit is rising.
What can we do? Well, we can refuse to accept any more passwords, but – I have to admit – I failed on this score at the first hurdle. I’ll do better next time.
Then sometimes I run slap bang against new evidence myself. Because I hadn’t until last week used the new NHS Choose and Book appointment system.
The first I knew that I was using it was a letter asking me why I hadn’t called them up to book my appointment with a consultant. I hadn’t in fact received the original letter from my doctors, but didn’t know that at the time.
I called their appointments line. They couldn’t talk to me because I didn’t have a password.
Now I’ve recently been refusing to accept passwords. I have vast numbers of them already for every public and private agency I deal with. It means I have to keep them in a notebook.
Far from making my identity more secure, it is actually making it less so – like the phenomenon of people putting their daily password on a post-it note on their office computers.
So I said I wasn’t accepting any more passwords. Long conversation with the manager who eventually put the phone down on me. Stand off. They said I had to get back to my GP. My GP’s receptionist said I had to go back to the appointments line.
I felt excitingly embattled, but my resolve crumbled when I got my GP on the phone. I don’t want to make her life any more difficult, after all, so I meekly accepted my password.
It is (surely you’re not going to publish your password? I am, really, it’s no use to me) ‘estate tomato’.
The magic words finally got me through the appointment system phone line. They gave me another number to call, which got me through to King’s College Hospital. There a very nice lady said they would send me an appointment date in the old way.
I asked why that required a password like estate tomato and four phone calls. She said that, in practice, the new Choose and Book appointment system – imposed at vast expense by one of the ubiquitous IT consultancies – was so useless that they had opted out.
Why was it so useless? Because as students of the systems thinker John Seddon will know, these centralised IT solutions can’t deal with diversity. They are inflexible and therefore lock in costs.
Was there really a problem of people not being able to prove their identity under the old system? People stealing each other’s hospital appointments? I don’t believe so, yet the IT consultants have clearly made out that there was.
Maybe you need extra safeguards if you have a huge national system. It is another way that big scale solutions lock in costs.
So here we are, another way in which the legacy of New Labour still infects Whitehall. A more expensive system which works less well than it did before because it rules out informal solutions – very urgent appointments, anything which requires face to face judgement.
Inflexible solutions means higher costs. No wonder the deficit is rising.
What can we do? Well, we can refuse to accept any more passwords, but – I have to admit – I failed on this score at the first hurdle. I’ll do better next time.
Tuesday, 20 December 2011
The perils of payment by results
Payment by results, much beloved of the coalition - good idea in principle. The trouble is that Whitehall has not really grasped what went wrong with their targets regime and therefore don't understand the perils of their new payment by results regime, as I discovered during a seminar in a Whitehall department last year.
The real problem is that payment by results will inevitably end up with targets again, as I explained in the new edition of Local Economy journal:
http://lec.sagepub.com/content/26/8/627.full.pdf+html
The real problem is that payment by results will inevitably end up with targets again, as I explained in the new edition of Local Economy journal:
http://lec.sagepub.com/content/26/8/627.full.pdf+html
Monday, 19 December 2011
Why Clegg was right to choose Popper
Imagine yourself in the coffee houses of 18th century Edinburgh, in the elegance of the New Town when it really was new, the civilization of those paved streets, and the intellectual excitement of the Scottish Enlightenment.
It was there that the philosopher David Hume first cast doubt on scientific method, peering at ideas about what causes what and finding there was nothing there. All you can do, he said, is say that events tend to happen together.
Yet, if we can see nothing causing things under the philosophical microscope, that hands the scientists a big logical problem. It doesn’t matter how many times they do an experiment, or watch the sun rising bang on time, it doesn’t mean these events are any more likely to happen tomorrow.
Two centuries after Hume was writing in Edinburgh, the Viennese philosopher Karl Popper, a refugee from the Nazis, came up with an interim answer. But, more importantly, he also applied it to politics and organizations. You may not be able to prove what you believe about the world, no matter how often an observation or experiment takes place, but you can disprove it.
Popper used the example of swans. It doesn’t matter how many white swans you see, it still doesn’t prove that all swans are white. But if you see a black swan, then you know they are not.
Popper was writing during the Second World War, his home city was in the hands of totalitarians, and he quickly found himself applying this insight to politics too. In doing so, he produced one of the classic 20th century statements of philosophical liberalism, The Open Society and its Enemies (published in 1945).
He said societies, governments, bureaucracies and companies work best when the beliefs and maxims of those at the top can be challenged and disproved by those below. This has huge implications, not just for effective societies, but for effective organizations too.
Popper was flying in the face of the accepted opinions of the chattering classes at the time. They may not have liked the totalitarian regimes of Hitler or Stalin, but people widely believed the rhetoric that they were somehow more efficient than the corrupt and timid democracies.
Popper explained why they were not and why Hitler would lose. Anybody who has read Antony Beevor’s classic account of the Battle of Stalingrad, and the hideous slaughter and inefficiencies brought about by two centralized dictators who had to take every decision personally, can see immediately that Popper was right. Real progress required ‘setting free the critical powers of man’, he said.
The possibility of this challenge – in what he called ‘open societies’ – is the one guarantee of good and effective government or management. Those human beings at the front line, those most affected by policy, will always know better about their own lives or their own work than those at the top.
Open societies can change and develop; closed societies can’t. Hierarchical, centralized systems, by their very nature, prevent that critical challenge from below.
Why this rant about Popper? Because he is the critical Liberal philosopher of the twentieth century. I kept saying so during the process that produced the Liberal Democrat philosophy document It's about freedom, but still failed even to get him a name check.
But also because he is the central figure of Nick Clegg's important speech today on the open society to Demos (though again Popper only gets one name check). The speech is vague about Popper, vague about precisely why Popper said open societies work and closed ones grind to a halt, but it chooses exactly the correct philosopher - exactly the right underpinning to make Liberalism distinct now.
It is also, as it happens, the philosophical justification for Liberal-style localism - it is about "setting free the critical powers of man".
It was there that the philosopher David Hume first cast doubt on scientific method, peering at ideas about what causes what and finding there was nothing there. All you can do, he said, is say that events tend to happen together.
Yet, if we can see nothing causing things under the philosophical microscope, that hands the scientists a big logical problem. It doesn’t matter how many times they do an experiment, or watch the sun rising bang on time, it doesn’t mean these events are any more likely to happen tomorrow.
Two centuries after Hume was writing in Edinburgh, the Viennese philosopher Karl Popper, a refugee from the Nazis, came up with an interim answer. But, more importantly, he also applied it to politics and organizations. You may not be able to prove what you believe about the world, no matter how often an observation or experiment takes place, but you can disprove it.
Popper used the example of swans. It doesn’t matter how many white swans you see, it still doesn’t prove that all swans are white. But if you see a black swan, then you know they are not.
Popper was writing during the Second World War, his home city was in the hands of totalitarians, and he quickly found himself applying this insight to politics too. In doing so, he produced one of the classic 20th century statements of philosophical liberalism, The Open Society and its Enemies (published in 1945).
He said societies, governments, bureaucracies and companies work best when the beliefs and maxims of those at the top can be challenged and disproved by those below. This has huge implications, not just for effective societies, but for effective organizations too.
Popper was flying in the face of the accepted opinions of the chattering classes at the time. They may not have liked the totalitarian regimes of Hitler or Stalin, but people widely believed the rhetoric that they were somehow more efficient than the corrupt and timid democracies.
Popper explained why they were not and why Hitler would lose. Anybody who has read Antony Beevor’s classic account of the Battle of Stalingrad, and the hideous slaughter and inefficiencies brought about by two centralized dictators who had to take every decision personally, can see immediately that Popper was right. Real progress required ‘setting free the critical powers of man’, he said.
The possibility of this challenge – in what he called ‘open societies’ – is the one guarantee of good and effective government or management. Those human beings at the front line, those most affected by policy, will always know better about their own lives or their own work than those at the top.
Open societies can change and develop; closed societies can’t. Hierarchical, centralized systems, by their very nature, prevent that critical challenge from below.
Why this rant about Popper? Because he is the critical Liberal philosopher of the twentieth century. I kept saying so during the process that produced the Liberal Democrat philosophy document It's about freedom, but still failed even to get him a name check.
But also because he is the central figure of Nick Clegg's important speech today on the open society to Demos (though again Popper only gets one name check). The speech is vague about Popper, vague about precisely why Popper said open societies work and closed ones grind to a halt, but it chooses exactly the correct philosopher - exactly the right underpinning to make Liberalism distinct now.
It is also, as it happens, the philosophical justification for Liberal-style localism - it is about "setting free the critical powers of man".
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