The terrifying new metaphysics of data

I watched the film Lincoln recently, only a year after everybody else.  Apart from wondering why we can't make such intelligent films about political history in the UK, I was fascinated by the portrayal of Lincoln himself - his endless supply of homely tales which infuriated his colleagues but played such a role in defusing tension.

By coincidence, I've just been reading the absolutely compelling autobiography of Peter Drucker, Adventures of a Bystander.  Drucker really invented the art of management writing, and died recently (well, in 2005) just short of his 96th birthday - carrying on writing and consulting almost until the last moment.

Drucker describes Charlie Kellstadt, retired chairman of the retailers Sears Roebuck, enraging his fellow committee members in a Defense Department advisory group, doing exactly the same - long tales about selling bras which took apart the arguments of the young guns, absolutely but without rancour.

But Drucker drew some conclusions about this, writing in 1978, that have absolutely taken a grip on my mind today - because they are directly concerned with a major theme of this blog.  Namely, the gap between figures and reality.

Robert Macnamara, Kennedy's cerebral Defense Secretary - and a forerunner of government targets - went ahead with this particular plan anyway, ignoring Kellstadt, because the figures were right.  But the figures didn't express the wisdom that Kellstadt had gained selling bras.  The result was the disastrous decision on the Lockheed Jumbo air transport contract.

It is three and a half decades since Drucker was writing, and five decades since Kellstadt was irritating Macnamara's committee.  That gap between figures and reality is much more tenuous now.  Whole swathes of those who run the world no longer believe there is a gap - vast institutions are run without regard to any gap at all.

You might well say that this was why our organisations, public and private, are generally speaking so ineffective.  I couldn't possibly comment.

But Drucker put his finger on the issue, which is as much theological as it is economic.  He described the shift in the world since he was working at a London merchant bank in the 1930s called Freeberg & Co - then there just a few people, maybe in banking, who saw the word like that:

"Our whole society has moved to the perception and metaphysics Freedberg & Co represented.  It has shifted to seeing symbols as real: money, 'trades' and 'deals', interest rates and Gross National Product.  Our whole society assumes, in the words of the medieval logician, that Nomina sunt realia: that the symbols have substance while the objects they represent are mere shadows."

Drucker describes this metaphysical approach to life as 'ultra-nominalism', a version of the medieval philosophy, that "treats symbols and images as the ultimate reality, and people and things as shadows".

And of course, he is absolutely right.  That ultra-nominalism has grown in strength, increasingly blind to the shadow world that we used to know as human reality.  There is even a debate about whether this human reality is different at all from the figures that purport to describe it.

It explains the slow hollowing out of our institutions, and maybe also our bizarre failure to act on the world.  But for anyone who still believes there is a gap between data and reality, can I recommend my own book on the subject, The Tyranny of Numbers.  

It is more than a decade old but there is life in the old dog yet.  And over that period the new metaphysics has growth rapidly in strength.  It may now be changing reality by ruling it non-existent.

Those of us who know otherwise may have to fight to keep the old language alive, which is the only way we will be able to assert a separate existence for awkward reality beyond the data.

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Why the home ownership dream ended

Here is a picture of the flat where I was born.  Randolph Avenue in Maida Vale, a former red light district fallen on good times.

It was a slum in 1958 when I first emerged there, in a rented ground floor flat. Now the same flat is occupied by the head of Benetton Europe (not actually this front door, in case you are casing the joint).  I can’t even afford to sleep rough there. There’s the problem.

Now, there are some predictions I make where I don't really want, for my children's sake, to be proved right. But unfortunately what I said in my book Broke: How to Survive the Middle Class Crisis is all too true.

As it said in the Daily Telegraph this morning, home ownership in the UK is at a 25-year-low - not back to the levels before Margaret Thatcher came to power, determined to shape a property-owning democracy, but almost.

Home ownership is down to 65 per cent, its lowest level since the 1987 stock market crash, when Nigel Lawson was Chancellor.  No coincidence this, as I will explain.

Also a third of all homeowners are now over 65.  The young are being priced out, and flung into the not very tender embrace of the private landlords.

Does this matter?  Well, I think it does.  It means a loss of independence, a dependence on the whims of landlords, and continuing rental costs carrying on for the rest of your life.  

There is a peculiar resistance to home ownership on the left, is if renting was somehow ideologically purer.  I don't see it - and there certainly is no insulation from the rocketing costs that way.

The 30-year housing bubble has also led to huge additional costs for taxpayers, as the Telegraph report explains:

"The figures also disclose that there has been a significant increase in the number of people who rent their homes claiming housing benefit.  Over the past five years, the proportion of people claiming benefits who rent privately has risen from 19 per cent to 25 per cent, while in the social housing sector the figure has risen from 59 per cent to 66 per cent."

But I take issue with some of the coverage of the bubble.  It is always written as if this was some kind of betrayal of the objectives of the Thatcher government.

It isn't.  It is a direct result of the poor decisions they made then.  Three in particular:

1.  Debt.  The idea that rising home ownership could be built sustainably on unrestrained debt, an idea that is popularly supposed to have been embraced by Margaret Thatcher after persuasion by Nigel Lawson, was always wrong.  If there is no limit to the money available for mortgages, then it will always tend towards inflation - and the shrinking homes and the lengthening mortgages are an inevitable result.  We have seen 40-year terms and are well on schedule to end up with the enslaving Japanese-style grandparent mortgages, paid off by the generation after next.

2.  The Corset.  The Corset was an instrument in the 1970s and before which regulated the amount of money going into the mortgage market, keeping house prices as level as possible while still allowing housebuilders to make a profit.  It was abolished by Sir Geoffrey Howe in 1980, as a direct result of the end of exchange controls - but nothing was put in to replace it.  As far as I know, nothing was even considered.

3.  Big Bang.  Yes, the City needed reform, but the free-for-all ushered in by the flawed reforms presided over again partly by Lawson, with help from Cecil Parkinson, inevitably unbalanced the economy.  The avalanche of money going through the City inevitably got recycled into bankers bonuses - which in turn got recycled into rising house prices.

No, I don't include the failure to build homes as one of the main causes - though clearly it hasn't helped.  When more than 60 per cent of new homes in London have been snapped up by foreign investors, then you have to look elsewhere for the cause - which is, as I say, the unconstrained growth of the mortgage market.

It was based on a peculiar, fundamentalist view of market economics.  In the context of the 1970s, it looked creative.  But from the benefit of three decades later, you can see that - however much you believe in free and open markets (as I do) - the fundamentalist idea that markets produced real prices when they are left to themselves is as damaging as religious fundamentalism in its own way.

And just as destructive.  Unless we do something about it, it will destroy the dreams of the next generation, constrain them in jobs they hate because it is all that will satisfy the demands of Mega Landlord PLC.

More about how we got into this mess, a series of blow by blow accounts, in Broke.

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Where is 38 Degrees now there's work to be done?

I got so cross with the internet campaigners 38 Degrees over the Lobbying Bill, for their half-truths and infuriating ability to concentrate useful political energy on a chimera.

But they were right that the Lobbying Bill was much less than perfect, and particularly in its failure to tackle the funding of political parties.

In fact, it is hard to see how restricting money that goes into electoral campaigning will make any difference when there is the loophole, shouting at the top of its voice.  Any passing billionaire who wants to impose his views on UK elections only has to fund a political party - either his own or someone else's.

This is usually the cue for anyone involved in politics to shake their heads in despair.  Only the Lib Dems, chronically under-funded, have any obvious benefits from restricting donations to political parties.  The others just need the money and tend to keep their heads down.

So, it's hopeless, right?

Well, no, it isn't.  Just for a moment, we have a political opportunity to act.  Labour have thrown all the cards up in the air by changing their relationship with their trade union funders, and in a creative way that has huge possibilities for energising their support base.

It also just so happens that the Conservatives are horrified by the way huge donations are now bypassing them altogether and going to UKIP.

There is an openness in Westminster to tackling the basic problem, the Old Corruption as William Cobbett put it, on a cross-party basis.

Can it be done in the year before the next general election?  What we really need is an enlightened internet campaigning organisation to take up the cause, when they could make a major difference?  They have the support base, invigorated by the Lobbying Bill campaign, who just need pointing in a more creative direction.

Where is 38 Degrees when you actually need them?  Don't tell me they are still out chasing chimeras?

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Does the UK government want Scots to vote yes?

It really is rather peculiar.  So peculiar that historians may comment on it in years to come if the vote is unexpected, but the campaign by the UK government to keep Scotland in the union is really so badly judged, so unimaginative and ill-considered, that I begin to suspect some kind of conspiracy.

I don't really.  I don't believe in conspiracies.  Regular readers of this blog (if there are any) will also know that I am not as determinedly against Scottish independence as I should be.

I believe nations should be smaller, and that we would all be better and more peacefully governed if they were.  Despite the fear of the electoral consequences, and despite the horror of nationalism - even Scottish nationalism - I believe smaller nations is a Liberal idea, and one that would have been recognised by William Ewart Gladstone himself.

But I understand the case against independence too.  What I don't understand is why is it being put across is such a bizarrely corrosive way.

Exhibit #1.  The UK government spokespeople have been using their habitual tone of voice for squelching regional aspirations and plans - you know the kind of thing; patronising, negative, superior and miserably depressing about everything.  Sorry, your dreams are just uneconomic - that's all there is to it.  Go off and bother some other government department.  It might have been calculated to encourage the case for independence.

Exhibit #2.  They put up George Osborne, of all people, to explain to the Scots that they will not be allowed to share the pound if they vote 'incorrectly'.  Of all the people designed to cause irritation north of the border, could they possibly have found anybody better?

Exhibit #3.  This is the topical one.  Of all the issues to fight on, the management of Britain's North Sea Oil seems the least likely to imply a persuasive case for union.

The very fact that David Cameron has decided to raise this issue at all is some measure of the denial in the UK establishment about how badly North Sea Oil has been handled over the past generation.

While Norway saved the profits from the oil windfall, for investment in their own people, successive UK governments organised things with their usual dull short-termism, just adding the revenues to the bottom line until it was all used up.  Consequently we never used the proceeds to re-equip UK manufacturing.  We never used the proceeds to provide us with modern, renewable energy.

North Sea Oil pushed up the value of the pound, throttling what remained of the old UK manufacturing base - and we never used the proceeds to invest for the future.  It allowed us to cling too long to fossil fuels - and we never used the proceeds to gear up for the future.

When I tried to come up with a list of the ten most disastrous political decisions since 1945, for some reason which I can't now remember, I put the failure to invest the proceeds of North Sea Oil at the top of the list.

Fortune magazine wrote about the Norwegian oil fund - now the biggest sovereign wealth fund in the world - a few weeks back and revealed political divisions about exactly how it should be used.  But let's face it, that would be a good problem to have.

Thanks to the miserable short-term thinking of our governments, we will not be agonising about how to spend the equivalent of Norway's $830 billion.

So ask yourself: why does David Cameron bring it up?  Is it because he doesn't know any better?

We need to be nervous of Google's investment in robots

It's a funny thing, but just 48 hours after I posted the question about what makes Alan Turing the ubiquitous English hero for the 2010s, then the Observer reports the next twist in the tale about the famous Turing Test.

Let me quickly explain for the uninitiated.  The test was set by Alan Turing in 1950 as a way of deciding mathematically whether or not a computer could think.  Turing suggested that the test would be passed when you couldn't tell whether you were taking to a human being or a computer in written conversation.  He believed that moment would have arrived by 2000.

So when the world's leading apologist for Artificial Intelligence, Ray Kurtweil, the author of The Age of Spiritual Machines, talks about that moment happening by 2029 - then it is already nearly 30 years late.

I'm not a big fan of the fringe enthusiasts of AI.  This is not to say that I believe somehow humans can never be outwitted by a computer.  We constantly are.  But the Turing Test has been bundled up with a whole range of extra peculiarities it was never intended to serve, and in particular about human nature.

Turing certainly believed, as Kurzweil does, that computers will be able to tell jokes and flirt - it was these issues which dominated the debate back in 1950, as you can find out in my new Kindle Single about Turing, Alan Turing: Unlocking the Enigma.

The first problem is that, actually, the bar is pretty high.  The American philosopher Daniel Dennett suggested this question to tell the difference between a human and a computer;

“An Irishman found a genie in a bottle who offered him two wishes. ‘First, I’ll have a pint of Guinness,’ said the Irishman, and when it appeared he took several long drinks from it and was delighted to see that the glass filled itself magically as he drank. ‘What about your second wish?’ asked the genie. ‘Oh well,’ said the Irishman, ‘that’s easy. I’ll have another one of these!’ Please explain this story to me, and tell me if there is anything funny or sad about it.”

Dennett said that, if a computer could genuinely answer this question to the satisfaction of a human interrogator - with all its complicated social peculiarities - then yes, then you could certainly say it could think. It is still unclear whether that will ever happen.

The second problem is that these are questions about the nature of humanity. The roots of the Turing Test in logical positivism and English philosophy is part of the problem. Turing was trying to find a way – not to decide about the human soul but whether machines could think. He saw no real distinction between whether the computer could fool an interrogator that it was human and whether it was actually thinking.

That raises other questions too.  Is the computer doing the same as a human being when it flirts and tells jokes?  Or does that beg the question?  Is its motivation the same?  Does it matter?

But what really unnerves me about all this, and Google's link up with Kurzweil, is that it plays into a corporate agenda which asks us to believe that a virtual doctor or teacher is indistinguishable from a real one - or, as Kurszeil says, that virtual sex will be better than the real thing.

This not only misunderstands human nature but risks fobbing all but the ultra-rich off with a machine in the classroom and surgery, unaware that it isn't the basic functions of teaching that are important, but the relationship with another flawed human being that makes it work.

I may say that this may also be the problem with virtual sex, that perfection misses the point - it is the less than perfect human being that makes it worthwhile, and makes the teaching and medicine effective.

Find out more, not just in my Alan Turing ebook, but in my take on the future of authenticity, The Age to Come.

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Why are we so fascinated by Alan Turing?

It is now 102 years since he was born, or nearly, but this really appears to be Alan Turing's moment.

Not only was the government moved to give him a pardon, rather belatedly, for his conviction for homosexual acts back in 1952, but the stills have been released to great excitement for Benedict Cumberbatch's portrayal of the man in the film The Imitation Game.

It is even being talked about as an Oscar contender for 2015.

Now even the hotels of Manchester, where he lived and died, are joining in.  Jurys Inn Manchester has just published their own guide to his life.

What is it about Turing that speaks so much to our own age?  On the face of it, this is quite simple.  He was brave enough to be himself about his sexuality - in fact, he managed to flout respectability, to the frustration of his mother, for most of his life.  He famously wore a gas mask on his bike to avoid the pollen, and held his trousers up with a piece of string.

As the father of the computer age, and the great prophet of computability, he is a good nominee for the creator of our world.  He was a problem-solver, the breaker of the unbreakable Enigma code, when our age is so full of uncrackable problems.

I've had the chance to think about this myself, because the short biography I wrote about Turing has just been published as a Kindle Single (Alan Turing: Unlocking the Enigma).

My own feeling is that nothing about Turing is quite straightforward.  Confident in his own abilities, amusing and witty with friends, yet shy and uncertain in company, except with the few people he trusted. Relying on relentless logic, yet also managing an almost mystical ability to intuit mathematical proofs.

He combined a rigid clarity and scepticism about human specialness, but he was also fascinated by fairy tales and was famously obsessed with the Disney film Snow White and the Seven Dwarfs.   One of his closest friends was Alan Garner, later the author of The Weirdstone of Brisingamen.

The overwhelming feeling about Turing, reading the details of his life – and his mother wrote a detailed tribute after his death – is just how English he was.

Many of his fellow countrymen failed to understand him at all, and he worked part of his career with American and German mathematicians at Princeton University, but he was deeply English in his sheer practicality, for the literalism with which he turned intellectual ideas into practical projects, and for his empiricism.

He was a true successor to the great British empiricists, John Locke and David Hume, and the exclusion of every consideration except sense data. It is a theme that keeps returning in his life and work.

But I think our fascination may be more subtle than that.  We are beginning to regard Turing is the very apotheosis of a man of genius crushed by the petty mores of his own day, and perhaps that is a little how we all regard ourselves.  No wonder we admire him: he was the real thing.

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Why Lean is so inefficient

It's no good. I simply can't resist it. The old monsters at management consultants McKinsey & Co are just too tempting a target, and not just because they are so responsible for the shape of the modern world and its organisations - but because they are so slow to grasp why those organisations are stuck.

I subscribe to their online newsletter and it is always well-written and informative, and sometimes so wonderfully old-fashioned that I find it irresistable.

The elite consultancy, named after its founder James Oscar McKinsey, the first management consultant, still lives and dies by the highly misleading maxim “everything can be measured and what can be measured can managed”.   And therein lies the problem.

What actually inspired me to write this post was their new hymn to the idea of Lean, which as anyone who works in big organisations knows was attributed to Taichi Ohno at Toyota, and is now being rolled out everywhere from the NHS to the way car insurance works.

This is what they predict:

"An unprecedented amount of product-performance data is now available through machine telematics. These small data sensors monitor installed equipment in the field and give companies insights into how and where products are used, how they perform, the conditions they experience, and how and why they break down. A number of aerospace and industrial-equipment companies are starting to tap into this information. They are learning—directly from customer experience with their products—about issues such as the reliability of giant marine engines and mining equipment or the fuel efficiency of highway trucks in different types of weather."

Now, bear with me a minute.  Although Lean emerged from assembly lines, Ohno was not actually very impressed when he visited Ford immediately after the Second World War, as I describe in my book The Human Element.

There was too much extra work from bad workmanship, and there was far too much extra stock lying around taking up space. On the same visit, he and his team happened to shop in a supermarket called Piggly-Wiggly and then they got excited. The supermarket had a system that only ordered enough stock as it was bought by customers. 

It was the beginnings of the Just-In-Time delivery systems that so many companies use today, and the basis of Toyota’s success.

Toyota’s ‘lean’ systems are all the rage in the UK now, and it makes a lot of sense.  It tries to bring jobs back together again rather than splitting them all up into little bits. 

The problem with Lean outside a factory is that it keeps the Toyota version of the assembly line at its heart. It requires standardised systems and processes. It means measuring the speed that everyone does their jobs and holding them to the new system. 

 It is therefore a prime candidate for putting the processes into inflexible concrete, and Lean IT is the latest twist in what is on offer from IT consultants. 

The trouble is that Lean assumes everywhere is a factory, a little like Toyota. The central purpose may be to improve the flow by bundling jobs back together again, but it isn’t necessarily about getting people back face-to face – and it certainly doesn’t mean letting staff get on with their jobs in the way they know best. Quite the reverse.

It is the obsession with data that is the clue. Of course these tweaks are important, and they do improve services. I know government functions that have been transformed just by moving the photocopier a bit nearer the front desk.

But here is the problem.  Lean assumes that the basic system will always stay the same.  It wires in data sensors and processes, and software systems, that make sure it does.  It allows no leaps of imagination - no sudden realisations that, actually, what you need is a different kind of institution altogether.

This is McKinsey's basic weakness, and it is a big one - as one of their biggest critics, the systems thinker John Seddon has explained.  This kind of Lean approach tends to lock organisations into their own administrative and control systems, even when they are doing the wrong thing, desperately improving the efficiency of it - and wondering why no major leaps forward are possible.

This is the problem with targets too and with the New Labour approach to services, which still clings on to public services in so many ways.

It allows you to improve the throughput of the NHS, as if it was an assembly line.  It allows to to improve the efficiency of the existing system until it can improve no more.

What it can't do is tell you, given that you want to improve the broad health of the population, whether you might need a different kind of organisation altogether.

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