Wednesday, 25 May 2011

Piracy on the high streets

The economic history of Britain is a story of the many ingenious ways in which our respected financial institutions have defrauded the public. After the South Sea Bubble, numerous nineteenth century bank crashes, the bankrupting of Lloyds names, the collapse of BCCI, and the mis-selling of insurance policies and investment bonds, we now have payment protection insurance (PPI). This has involved selling spurious insurance policies (with or without the consent of the purchaser) to people taking out loans and mortgages. The ostensible purpose of the insurance was to meet the cost of loan repayments should the purchaser fall ill or become unemployed. PPI proved a big earner for financial institutions: only 15% of income from PPI was paid out in claims. This was because insurance payouts were often refused. As with unregulated health insurance everywhere, liability for illness could be denied because of ‘pre-existing conditions’. Once this fraud was exposed, the banks fought a long campaign to block repayment. However, this seems to be coming to an end, as some are now making provision for repayment - £3.2 billion in the case of Lloyds and £1 billion for Barclays.

This raises the question of what are banks for? A conventional answer is that they are safe depositories for our cash which banks use to advance loans to individuals and businesses. These should be low-risk investments which are repaid with interest. Income from interest is in turn used to pay a smaller rate of interest on depositors’ accounts, a reasonable dividend for the banks’ shareholders, and to meet the staffing and other costs of the banks themselves.

If banks have tried to defraud their depositors, they have hardly been favourable to their other main stakeholders. Banks have lent £2 billion less to small and medium enterprises than the government target, and many small businesses have been forced into receivership or have been unable to borrow money to meet the costs of orders. Shareholders have hardly benefited either. RBS and Lloyds TSB have been partially nationalised, while Barclays’ shares are 35% of their peak value in January 2007. So who has benefited from the frauds perpetrated by our banks? The answer of course is their senior managers, who, despite the exposure of fraud, bankruptcy, and nationalisation, have continued to award themselves huge salaries and bonuses (£2 BILLION for Barclays alone this year). A British bank therefore resembles a galleon full of treasure that has been captured by pirates, who sail around the high seas robbing all they encounter.

There is a general lesson here. People who rise to the top, whether in business or politics, tend to be more egoistic, more ruthless, and less moral than the rest of us. This egoism can generate the energy to achieve great things, but it is essential that we regulate their actions and watch them carefully for our own protection. Of course, the senior managers of the banks argue that restricting their bonuses and regulating their activities would only encourage them to move their operations overseas. But this is an unconvincing threat - rather like the Mafia threatening to leave Italy.

               

Saturday, 7 May 2011

What we ate and what we called it

In Jack Vance’s wonderful science fiction story The Killing Machine, his hero Kerth Gerson visits an area of a city inhabited by a people called the ‘Sandusk’, notorious for their cuisine:

The air of Ard Court smelled richly indeed, with a heavy sweet-sour organic reek that distended the nostrils. Gersen grimaced and went to the shop from which the odours seemed to emanate. Taking a deep breath and bowing his head, he entered. To right and left were wooden tubs, containing pastes, liquids, and submerged solids; overhead hung rows of withered blue-green objects the size of a man's fist. At the rear, behind a counter stacked with limp pink sausages stood a clown-faced youth of twenty, wearing a patterned black and brown smock, a black velvet headkerchief. He leaned upon the counter without spirit or vitality, and without expression watched Gersen sidle past the tubs.

"You're a Sandusker?" asked Gersen.

"What else?" This was spoken in a tone Gersen could not identify, a complex mood of many discords: sad pride, whimsical malice, insolent humility. The youth asked, "You wish to eat?"

Gersen shook his head. "I am not of your religion."

"Ha ho!" said the youth. "You know Sandusk then?"

"Only at second-hand."

The youth smiled. "You must not believe that old foolish story, that we Sanduskers are religious fanatics who eat vile food rather than flagellate ourselves. It is quite incorrect. Come now. Are you a fair man?"

Gersen considered. "Not unusually so."

The youth went to one of the tubs, dipped up a wad of glistening black-crusted maroon paste. "Taste! Judge for yourself! Use your mouth rather than your nose!"

Gersen gave a fatalistic shrug, tasted. The inside of his mouth seemed first to tingle, then expand. His tongue coiled back in his throat.

"Well?" asked the youth.

"If anything," said Gersen at last, "it tastes worse than it smells."

The youth sighed. "Such is the general consensus."

The general consensus is that English food was in the past not far removed from that of the Sanduskers, although things are thought to have improved in recent decades with food introduced by South Asians, Europeans and others. My memories of food from the 1950s are different - there was certainly a lack of variety, but the food (at least that cooked by my mother) was tasty and nourishing. When I was at primary school, each day began with porridge and milk. At lunchtime, I would walk home and have dinner, which usually comprised meat and two veg, followed by a pudding such as apple pie and custard. I would then walk back to school. After school, I would have tea, which might be poached eggs on toast. A bit later, my father would cycle home from work, and would sit in the kitchen having his dinner (the main course of which he flavoured heavily with brown sauce). We would all eat supper together. This was a snack just before bedtime, and always comprised toast and a cup of tea.

Sundays were different. We would start the day with a vast fried breakfast. This would be followed in mid-morning with coffee (the only coffee we had all week). This was made from instant coffee with milk. At about 1pm, we would have our dinner, which was usually roast meat with roast potatoes and sundry boiled vegetables in season. My father would have sausages instead because he disliked the appearance of meat. Pudding might be a sponge or apple pie with custard. In the evening, tea would be a salad. This was never chopped or dressed, although there might be a sweet salad cream available. Supper was as usual.

Despite considerable amounts of food, we did not become obese or otherwise unhealthy. This was probably because we walked everywhere, played in the street until it got dark, and watched very little television. The state rations of orange juice and cod liver oil probably also helped.

Since those days, I have led a less healthy lifestyle. I do, however, eat food from many different cuisines, much of it frozen, processed, or transported long distances. I have, like many English people, also become utterly confused about what to call the meals I eat. Words like ‘dinner’, ‘supper’, ‘tea’ (including its ‘high’ or ‘afternoon’ variants), ‘lunch’ and ‘luncheon’ seem to mean different things to different people.‘Dinner’ now seems to be any sizeable meal whenever it is eaten, although this rule does not apply to Sundays, when local pubs advertise a ‘Sunday lunch’ of roast beef and Yorkshire pudding. In despair, I now use the phrases ‘midday meal’ and ‘evening meal’ in conversations to enhance mutual understanding. Everybody seems to understand what a breakfast is, although what we eat at that meal varies greatly. Still, on Sundays I still eat a big fried breakfast with a roast dinner later. Some traditions never die.   

Vance J (1967) The Killing Machine. Glasgow: Grafton Books.

See also Dining in Yuppieland

Thursday, 5 May 2011

Osama Bin Laden’s prison

Osama bin Laden is dead, but he spent the last five years of his life in a home-made prison. The ‘compound’ in Abbotabad was surrounded by 12 foot high walls topped by barbed wire. There was no garden, just a dusty exercise yard. Bin Laden never left the compound, but spent all his time in one room of a crumbling ill-equipped house, without air conditioning, phone or internet. He could see little from his room of the pleasant town or the lovely hills that surround it.

The death of Osama bin Laden has generated the usual plethora of ingenious conspiracy theories. But the key issue is not who has died, but what has died. A man so isolated could only communicate by couriers, perhaps carrying computer discs. It is difficult to see how he could have actively led his organisation in such circumstances, beyond the rare message intended to inspire its members. His location also made him and Al Qa’ida vulnerable. Couriers are relatively easy to track, and, if detected, would have made the whole al Qa’ida network more open to surveillance. If Pakistani intelligence services did know of bin Laden’s whereabouts, they may have preferred him alive than dead, particularly since they would well understand the power of martyrdom.

The urge for martyrdom combined with mass murder has of course been the chief weapon of al Qa’ida. The urge to destroy others, whether family members, workmates or random members of the public often culminates with the suicide of the murderer. This phenomenon occurs in all countries and religions, and participants have usually led unexceptional and conformist lives until that point. The skill of Al Qa’ida, like the Tamil Tigers (who invented this form of warfare), is to provide a reason for and to reinforce the desire for martyrdom that occurs in many people who are depressed, or idealistic, or disoriented.

The great personal tragedies that have resulted from this barbarism have not advanced the purported cause of Al Qa’ida whatsoever. But they have had a profound effect on the countries it opposes: security services in North America and Europe have been massively empowered to override human rights; some politicians in the USA enthusiatically support torture (and some of those in Europe collude with them); travellers are now everywhere regarded as potential terrorists, screened, X-rayed, and frisked; armies, human and financial resources have become committed to multiple forever wars; and cheering crowds have gathered outside the White House to celebrate the execution of an unarmed man by a state death squad.

Friday, 22 April 2011

The curse of the hero scientist

I have recently read David Edgerton’s book Britain’s War Machine (with thanks to Worcester Public Library). This looks at weapons production in the UK during the Second World War, and along the way shoots down several common myths. For instance, Edgerton notes that Britain was well-prepared for war in 1939, had an army that was more mechanised than Germany, was supported by a vast empire and did not therefore ‘stand alone’ after the fall of France. The most intriguing part of the book for me, however, is the discussion of innovation in weaponry. The British Government, from Churchill downwards, was fascinated by innovative weapons, and sought to make the best possible use of scientists. Yet although the most effective scientific and technological developments were achieved by teams working in industry, the military and the civil service, governments had a concept of the hero scientist, inspired and working alone. The figure of the hero scientist was encouraged after the War in films and books which incorrectly portrayed people like Frank Whittle and Barnes Wallace as lone visionaries struggling without official support against bureaucratic obstruction. Documentaries have subsequently given undue emphasis to innovations such as the Mulberry Harbour and the ‘bouncing bomb’, which had only a marginal impact on the outcome of the War.

Edgerton argues that this idea of hero scientist not only diverted resources from more effective forms of weapon production, but also led to an emphasis on equipment rather than effective strategy and tactics as the means of winning battles. The results could be seen in 1941, when British forces were defeated in Singapore by a smaller and poorly-equipped Japanese Army.

The idea of the hero scientist has been something of a curse in Britain ever since. Grand innovation imposed from above has often been prized above step-by-step technical improvements or enhancing the creativity and skill of the workforce. This can be seen in the British motor industry, which in the generation following the Second World War, produced many innovative designs, from the sports car, the Mini, front-wheel drive cars, cars with tailgates, to the luxury 4x4. Yet the industry paid much less attention to improving the reliability of its products by improving the organisation and skills of the men and women who built the cars. As a result, British cars lost market share, and British-owned companies became bankrupt. Most of the British motor vehicle industry in now owned by the Japanese, who focussed on redesigning the technology by which cars are produced, in co-operation with a skilled and motivated workforce.

Although British industry has now generally adopted Japanese production methods, the concept of the hero scientist is still dominant in many areas of British life, and particularly in the funding of higher education. This has two main streams of public funding for research: the research excellence framework (‘REF’ and formerly ‘RAE’), which allocates cash to departments on the basis of past performance; and the research councils, which allocate most of their funds as research grants to named individuals (called ‘principal investigators’) on the basis of future performance. Both methods are phenomenally expensive and capricious. I have looked at some of the problems with the RAE and the REF in previous postings. What about the allocation of research grants to named individuals by the research councils?

The cost incurred here is not just in the transaction costs involved in adjudicating applications for research grants (large panels of academic experts plus the research council overheads they incur), but in the time spent by university staff throughout the country in preparing the 80 or 90% of applications which are not approved for funding. Most of these failed applications are of high scientific quality, which means that the allocation process becomes determined in the end by politics, horse-trading and reputation rather than by quality. Those who get the money are not necessarily the best scientists, but the scientists who are best at getting the money.

Research council funding also destabilises University research. Grants go to named individuals (or groups of individuals), which means that they take the grant with them if they move to another university. Since grants are mainly used to pay the salaries of the researchers and postgraduate studentships associated with the project, these staff are usually required to move with their principal investigator, rather like a clutch of medieval peasants following their lord and master. This all creates a transfer market, in which hero scientists are bribed to move from one university to another. The effect on the department that loses in this bribery race can be dramatic: in a short time, it can lose not just its senior academic staff, but also a large chunk of its funding, several researchers and even some postgraduate research students.

This whole business is often justified in the same way as the free market in senior executive salaries is justified - that the best prizes go to the best people. But good research is not the product just of few hero scientists, but of teams with different skills that can work effectively together on a sustained basis. These skills should include, for instance, the abilities to conduct thorough field and laboratory work, to critically analyse data, to present results effectively, to apply results for clinical or commercial benefits, and so on. These skills will not all be present in one person, yet many of the members of a research team, however capable they are, will never be able to get major research grants in their own name. Universities have little commitment to developing long-term multi-disciplinary teams because funding is unstable, and because it is much cheaper to bribe a grant-holder to move in with their entire team from another university, rather than to spend years developing the skills of their own staff.

Indeed, the whole research enterprise in the UK is staggeringly wasteful of human talent. Scientists proceed through their three years of doctoral research (usually funded by research grants and other public money). This involves some training in research, in return for which the university gains a very cheap source of labour. After doctoral training, only a minority of the new graduates succeed in gaining university employment, usually as a postdoctoral research fellow funded from a time-limited research grant. This may be followed by other time-limited research fellowships, until the great majority drop out of academic life altogether. Years of research training and experience are thus lost - not because the staff who leave are substandard, but because they have the drive to find a job with an employer who, unlike the university sector, rewards talent and hard work with good pay and decent contracts of employment.

There is an alternative funding model. The research councils do grant some funds on a long-term basis to designated centres, and this model is also used with great success by charities such as Cancer Research UK. By providing stable funding, such centres can maintain multi-skill research teams and sustain the social capital needed for effective research.

We should therefore expand this model into by concentrating public funding for research on developing a limited number of specialised research centres which would be responsible not just for research, but also for training scientists to a high level of skills, retaining them in science, and applying scientific knowledge to the wider world. This long-term funding should replace grants to named individuals and the whole wasteful farce of the REF. Academics working within and outside these research centres would of course be able to continue to seek funding for research from charities and other bodies. Some, however, might realise that there is more to scholarship than the rather narrow concept of ‘research’, and may even come to understand that the main function of universities is to pass on knowledge, values and skills to the next generation. This task is not as heroic as being a lone scientist, but plays a greater part in maintaining our civilisation.



See also:http://stuartcumella.blogspot.com/2009/10/great-crackpot-ideas-of-past.html
http://stuartcumella.blogspot.com/2010/06/status-wars-in-universities.html

Sunday, 10 April 2011

The Rise of Monarchy

Every year, the Economist magazine compiles a ranking of cities according to their ‘livability’. This is based on data relating to personal safety, availability of goods and services and infrastructure. Eight of the ten most liveable cities in the world are in countries with monarchies - actually with a single monarch - Queen Elizabeth II. It is notable that although Vancouver is top of this rating (with two other Canadian cities in the top ten), the highest ranked city in the USA (Pittsburgh) came only 29th. This surely is evidence that Americans were wrong to adopt a republican form of government, and should have stuck with a monarchy like their better-governed neighbours to the North.

Why should constitutional monarchy of the kind found in Commonwealth, Japan and Western Europe be associated with good government? One reason is that the monarch is an agreed national arbiter who, by inheriting their post, avoids all the enmities and political debts incurred by people who compete for power to get to the top. The very lack of power of the monarch also means that he or she does not get blamed for the disappointments and disasters inevitably associated with government. As a result, the monarch can provide a symbol of national unity and continuity in political life.

But monarchy also has a sort of magic, however humdrum the people who occupy these positions. This is partly a product of the wealth and status of the head of state, but also of the very continuity of the post. In the past, kings were seen as being divinely blessed, possessing some special virtue or charisma that set them apart from the rest of us. In England and France, it was even believed that being touched by the king would cure a person of the skin disease Scrofula. This magic continues even with the relatively powerless constitutional monarchs of today, making them (with their families) a focus for imagination, fantasy and envy.

There are several other hereditary regimes in countries that are nominally republics. In India, the Ghandi family possess the magic of royalty (at least in the eyes of several million supporters of the Congress Party). Being the senior member of this family is deemed sufficient qualification for both Party leadership and the post of Prime Minister, despite inconvenient facts like being a foreigner and having no experience of political office. In this respect, the Ghandi family also resemble monarchies, where a person can succeed to the most senior post in the land based on the sole qualification of being the eldest son or daughter of the deceased ruler.

There are other hereditary regimes which have the money and the power but not the magic. North Korea will soon be ruled by the third generation of Kims. Syria is ruled by the son of the preceding dictator, and other Arab states like Egypt and Tunisia would have followed in the same manner if their people had not overthrown their absolutist rulers. In these countries, hereditary succession exists because gangster leaders can only trust their closest relatives. But that of course is how virtually all our European monarchies began several centuries ago.

Friday, 4 March 2011

Dubai: the new Melbourne



I recently spent three nights with my wife in Dubai - two nights out and one night back on a trip to visit my daughter in Melbourne. We stayed on both occasions in the XVA Art Hotel - a wonderful small guesthouse built around an art gallery and a vegetarian cafĂ©. This is in Al Bastakiya, the oldest part of Dubai, located between to the Creek, the Linen Souk, the al Fahidi Fort, and the Royal Palace. Al Bastakiya is a network of narrow alleys between courtyard houses, each of which has a wind tower - a sort of air conditioning system in reverse, designed to channel cooler winds from the sea down into the rooms of the house. The Creek is lined with dhows and crossed by small open ferries called ‘abras’, which take you across to Deira, which has the gold and spice souks.

This is of course very different from the other Dubai, of gleaming towers and shopping centres, all marble, gold, glass and flash. The most common reaction of visitors to this Dubai is that it is ‘artificial’. This is a strange comment because all cities are the result of human decisions, either by planners, property developers, or the inhabitants themselves. Dubai has been set out in the desert, but many of the world’s great cities were laid out in this way. Melbourne was laid out as a grid in the Australian bush by a surveyor one morning. This must have seemed an unpromising location for a great city, but, as in Dubai, its governors built imposing town halls, government buildings, museums and art galleries, and post offices that befitted the great city they intended Melbourne to become. Over the 150 years since it was planned, the central grid has been adapted. Narrow passages between buildings have become ‘laneways’ - pedestrian streets packed with restaurants and small shops. Trees line each of the broad main streets of the grid, which are wide enough to allow tramlines (and tram stations) down their centre.

Dubai too will change over the next century: people will become familiar with and fond of its iconic buildings; different areas of the City will develop distinct characters; its inhabitants will adapt and humanise its houses and streets; people will become proud of their city and pity those unfortunate enough to live elsewhere. Perhaps they will remember with gratitude the vision and drive of those who founded the city.

Wednesday, 2 March 2011

No sympathy for the devils

Future generations will look back on the 20th Century as the time of genocide and rock and roll. The extent of this genocide is almost beyond belief: not just the 20 or so million killed systematically by Nazi Germany and a similar number by the Japanese Empire, but also the 45 million killed in China’s ‘Great Leap Forward’, the 10 million in the contrived famines associated with the ‘collectivisation’ of agriculture in the Soviet Union, and millions in Cambodia, Armenia, Nigeria, Rwanda, and many other places. Industrial scale warfare resulted in tens of millions more deaths, with new ‘weapons of mass destruction’, starting with poison gas devised by the German Empire in the First World War, and nuclear and biological weapons introduced to the world by the USA. Agent Orange, which was used by the USA in Vietnam, resulted in half a million deaths and millions of disabilities, increased risk of diseases such as cancer, and birth defects among the civilian population.

How can we explain this utter horror, this evil? The source of evil has been attributed through the ages to the devil or to devils. In Hollywood, the devil is portrayed as a deformed and deranged monster. This is a comforting depiction because it suggests that the source of evil lies outside ourselves, and that normal people are incapable of evil unless seduced into it by an alien being. This depiction of the devil as alien easily slides into xenophobia, leading people to believe that their society can be cured of evil if only they are able to eliminate foreigners, blacks, jews, communists, or some other defined minority.

But there is another quite different vision of the devil - the devil as a gentleman, suave, charismatic and persuasive, and very much one of us. This is  the version that appears in one of the 20th Century’s greatest rock and roll songs ‘Sympathy for the Devil’, written by Mick Jagger and Keith Richards in 1968 and recorded by the Rolling Stones. In this song, Lucifer proclaims his wealth and taste. Like sophists everywhere, he argues for moral relativity: “Just as every cop is a criminal, and all the sinners saints”, and for universal self-blame: “I shouted out ‘Who killed the Kennedys?’, when after all it was you and me.” Yet at the root is a love of death and despair: “I watched with glee as your kings and queens fought for ten decades for the gods they made”.

This is a lot of work for one devil, and it is not surprising that many sources (such as Milton’s Paradise Lost) identify a pandemonium of devils, each of which characterises a particular kind of evil. These include Mammon, who exalts wealth, persuading us to feast while others starve. Beelzebub represents the arrogance of power, tempting those in high office to crush their rivals to maintain personal supremacy. Astaroth is the devil of accusers and inquisitors - those who enforce conformity with torture and death, while  Moloch is the demon of religious cruelty, persuading those with religious faith to stone miscreants to death, burn unbelievers at the stake and crash aeroplanes into skyscrapers. Finally, there is Belial, who works to stir up lies and hatred, and “loves vice for itself”.

Belial, like all the other devils, walk among us, or rather pass by us in their chauffer-driven cars and their private jets. They run giant chains of ‘news media’ which promote pornography and inculcate hatred of their political rivals, they manage wealthy corporations which employ workers in the Third World on starvation wages and pollute the landscape, they go to war in the name of security and ensure those they capture are tortured and murdered. They glory in personal power and crush and destroy others as an act of pleasure. They succeed because we are weak and easily impressed by ‘wealth and taste’.