September 2008
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30 September 2008
Things will never be the same again
Things will never be the same again. The turmoil in the banking sector will ensure that the housing slump turns into a full scale recession. There will be massive knock on effects, not just for housing associated business in areas like carpets and furniture, but also all those hundreds of thousands of businesses selling things that none of us really need.
For example: In their new sketch show Harry Enfield and Paul Whitehouse feature a shop in Notting Hill that sells overpriced tat to gullible women. A topical satire may soon feel like a piece of history. Almost every parade of shops in well off areas includes pretty little boutiques selling posh bric-a-brac. How many will survive in a world where every penny counts? And as existing business close who will be able to raise the money to start new ones? As for any hope that the public sector will pick up the flack; the public deficit was already huge and now we can add all the money being pumped in to save lame duck banks. I said to my fifteen year old son this morning that if he is lucky things will be starting to pick up again when he leaves University.
All this may be too pessimistic but it reflects the distilled views I have collected from people who know more than me. In terms of the decline of the economy from its peak what we are beginning to experience may be on a par with the depression of the thirties, although fortunately for us absolute levels of personal and social affluence will remain several times higher than those experienced by our great grandparents.
Accounts of the origins of the welfare state emphasise the determination of economists and policy makers to avoid a repeat of the depression – it was this that inspired Keynes and Beveridge. So almost two decades after the beginning of the depression – albeit with the interruption of the war – its impact was determining future policy. What is now happening will cast a shadow over decision makers who are, as I write, on their way to primary school.
Over the coming years we can expect radically new thinking (which always involves rediscovering old thinking). To be sure we will have new economic theories and policy frameworks. But the recession will also reframe thinking about social norms and values and about the relationship between human capacity and complexity (this crisis shows what can happen when we create systems so complex no one knows how to repair them when they go wrong). I popular saying in the eighties was that ‘the right have won the economic argument, the left the social argument and the centre the electoral argument’. As financial capitalism collapses the Tories talk of a broken society and a third of Austrians vote for neo fascists little of this world remains. We can expect ideology to return to politics but the new dividing lines are unpredictable, and possibly dangerous.
Only time will tell what this will all mean but I hope that we here at the RSA can be at the forefront of debating what kind of economy and society will and should emerge now the neo-liberal experiment has collapsed under the weight of its own contradictions.
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29 September 2008
So conference season is over
So conference season is over, at least for the RSA. We had another good turnout with the Conservatives yesterday evening, which means each event has attracted over 150 people. After years and years of party conferences I can’t help feeling that doing one big event is infinitely preferable to putting on the kinds of programmes other think tanks host. A game to play when browsing through the fringe guide is to identify the most boring fringe meeting and the one which the think tank has most obviously just done just for the sponsorship: ‘Plastic recycling; time for a new paradigm’, ‘light transit rail systems; thinking out of the box’. When they retire the people who plan fringe meetings could get jobs choosing the name of hairdressers or fish and chip shops prone as they are to clunking puns: ‘Let’s go Higher baby; the case for university expansion’ or ‘Who cares wins; why nursing homes need a new deal’. Finally, there are the titles that imply the fringe meeting will change the world but betray their inevitably blandness: ‘Children; they are our future’, ‘Climate catastrophe – isn’t it time to act?’.
The Conservative delegates were a very normal and mixed bunch, which is very different from the people I met at my first Tory conference in 1994. There was the inevitable contribution from a breathless, young, free market enthusiastic asking why the Conservatives wouldn’t nationalise the NHS. But this, and Peter Hitchens’ attack on Cameron, the BBC and the liberal elite, were greeted with minimal enthusiasm. Instead it was an earnest debate in which most of the questions would have come just as easily from the delegates at either of the other conferences. The attack on Labour seemed rather muted, mainly focussing on Government bureaucracy and the Michael Gove line that while Tony Blair was trying to do the right thing, Gordon Brown has abandoned reform.
Until a few days ago it might have seemed that the Conservatives didn’t need to articulate much of a critique of Labour so deep was the evidence already of disenchantment. But just as happened last year conference season is seeing a change in the political weather. Labour is looking decisive over the banking crisis and, whatever their disagreements about the detail, the Conservatives aren’t articulating a coherent alternative. Given all the other things going on in the world it may be difficult for David Cameron’s team to get much traction with the several new policy documents they are planning to unveil this week.
The other Tory attack line is the assertion that Britain is broken. Conservatives say that this is not an alarmist argument but perhaps they should tell the Sun. The tabloid has a broken Britain fringe and has festooned Birmingham with lurid posters featuring a hooded teenager thrusting a knife towards the camera.
Evidence that the Conservatives have to deal with a new context is underlined by the same newspaper choosing today as its front page story an attack on Barclays bankers for taking an all-expenses break in Monte Carlo in the midst of the credit crunch. It is too early to say whether the current crisis will translate into a more general backlash against the values of financial capitalism but the fact that our most popular newspaper is now reviling bankers in a way previously reserved for loony left councils, benefit ‘scroungers’ or asylum seekers must be a sign of the times.
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26 September 2008
In advance of the Conservative Party Conference
Off to Birmingham on Sunday for the third of our Party conference fringe meetings held in partnership with the World at One and IPSOS MORI. I’m hoping Conservative conference will prove to be less stressful for me than was Labour’s.If I was a Conservative (cue malicious laughter among my remaining Labour friends) I would see next week as offering a big opportunity and a growing threat.
Given the polls and the general morale of the Party, Labour’s conference was a success. But it was a success secured against a modest objective – keeping the Party together and giving Gordon Brown more time to turn things round.
Achieving this was a necessity. If at a time like this the Party had looked like it was eating itself, the voters would have been unforgiving. As it is Labour has had a small poll bounce.
But what Labour really needed to have any hope of making the next election competitive was a conference that connected with the public at large.
They missed this target because they were never really aiming for it. Indeed, the expressions of satisfaction among Labour politicians and activists that they got through the week may grate with the growing number of people - worried about their homes, bills and jobs - who aren’t sure how they are going to get through the next few months.
This is the Tories’ opportunity. Their message can be simple: ‘Labour spent the week talking to itself, we will spend our week talking to the nation’.
Someone who saw David Cameron speak in recent days told me the absence of references to Labour was noticeable in a speech which was pitched directly to popular concerns about the state of both economy and society.
If the Conservatives can make this contrast with Labour, it will go a long way to cementing their lead.
The threat to David Cameron is a growing impatience with the lack of policy clarity. The time for speculative working papers and commissions is over; people want to know what the Conservatives’ first Queen’s Speech will contain.
Yet, the signs are that the Conservatives still see little purpose being served by policy elaboration. One bright special advisor to a Tory front bencher reports his frustration at rarely getting any response to the many policy ideas he puts forward. Lobby groups from business and NGOs find the Conservatives’ enthusiasm to share platforms and brands unmatched by the desire to discuss or resolve policy questions.
I have, for example, spoken to several business interests trying fruitlessly to get a handle on the Conservatives’ approach to public sector commissioning and contracting out.
Press commentators are now picking up on this. Mixing his metaphors one said to me ’next week we will be on waffle watch, warm words may go down well in the hall, but the refrain from the press corps will be ‘where’s the beef?’.
So the public want connection while the press and policy community want substance. A difficult balance but the kind of thing a party needs to achieve if it wants to move from effective opposition to Government-in-waiting.
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25 September 2008
The relationship between progress and social contentment
We hosted a Joseph Rowntree Foundation debate here last night as part of their project on the new social evils. Perhaps surprisingly given the economic gloom the overall message of speeches from Julia Neuberger, AC Grayling and Anthony Browne was that we have nothing to fear but fear itself.
Grayling and Browne were particularly keen to argue that we have never had things so good (Anthony now works for Boris Johnson, so an echo here of the Mayor’s dismissal of Conservative talk of a ‘broken Britain’ as piffle). Julia Neuberger highlighted how fear of being accused of abuse can discourage people from showing kindness and concern to children and old people alike. She called for a renewal of trust and altruism, the opening up of institutions so the public feel confident about getting involved as volunteers or advocates and an end to a culture of blame.
Responding, Naomi Eistenstadt from the Cabinet Office made a spirited defence of the role of the central state in providing a social guarantee, a framework of values and protection for children.
As all this suggests, there was much to chew over but it still felt that we hadn’t got to the heart of the question. If things are getting better and there is no real evidence of a decline of social values, why are we so pessimistic and why do four out of five of us agree with the assertion that we are suffering from a decline in moral standards? Indeed if we think things are getting worse doesn’t that mean they are? After all, how we feel about society is surely an important measure of its health? Also, social pessimism can be a self fulfilling prophesy - if we think it’s cold and hostile out there we’ll go home and lock the door.
I have been commissioned to write an overview chapter for the final JRF report on this project. Given the slipperiness of the central concept and the quality and range of other contributors it’s a tough assignment. But after last night I think I have a clearer idea about what I am looking for. I want to try to overcome the dichotomy between how society is (getting better) and how it feels (getting worse). ‘How it feels’ is part of ‘what it is’ and how it feels feeds back into what it is. Instead of the starting point being ‘society is getting better but people don’t think it is’ – the theme for last night – it should be ‘society is generally getting better but one of the things that is not is how we feel about it’.
This opens up difficult questions about the relationship between progress and social contentment. Is it in the nature of some of the things that seem to be getting better – for example, growing affluence or tolerance - that they contribute to making (some of us) feel worse? Should we give greater weight in social policy to the subjective than the objective? Interestingly this has been the general shift in how the Government measures public service performance, moving from outcome based indicators to user satisfaction.
One interesting example of this is social mobility. Everyone says they are in favour of having more of it. This is fine when we are talking about absolute social mobility – increasing the numbers getting into the middle class, as happened in the fifties and sixties. But the only way to increase relative social mobility (or to increase absolute social mobility when the middle class has stopped expanding) is to make it easier for people to come down as well as go up. But it is far from clear that a society in which it is easier for middle class people to be downwardly socially mobile would be a more content society. Behavioural economics teaches us that the pleasure of upward social mobility (getting something we didn’t have before) is less than the pain of downward social mobility (losing something we have now). So the net social contentment impact of increasing relative social mobility (disregarding other knock-on effects) is negative. In other words the one thing all leading politicians say they want more of is something that will make us less happy as a society!
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24 September 2008
After Brown's big speech
I am writing this blog immediately after watching Gordon Brown’s speech (but posting it the next day) because I want to give a first impression before I let the views of everyone else influence me.
There were certainly some really good parts. The recognition of mistakes and more personal tone showed a man trying to connect. The fairness theme was sustained throughout. The attack on the Conservatives, while over-long, was powerful and made clear to the Party how it should go about campaigning. But overall?
As I said in yesterday’s blog I hoped the speech would be brave enough to speak for society as a whole rather than simply defending the PM and his record. I also hoped for passages when the tempo and tone would change and more of an argument would be developed. This would show confidence. The speech started promisingly in this regard but as long speeches tend to do it somewhat lost its way in the middle. Too many engineered applause lines gave a feel that was both disjointed and monotonous.
There were the usual assertions that no one in their right mind could possible disagree with:
“For too long we've developed only some of the talents of some people - but the modern route to social mobility is developing all the talents of all the people....”
And straw men erected:
“So when people say in these tough times there's nothing we can do, there's nothing higher to aim for, no great causes left worth fighting for… “
The attempts to pull the emotional heart strings – the ‘not just a number but a human story’ section – felt a bit laboured. And there seemed to be an attempt to borrow some of Barack Obama’s stardust with the assertion:
‘this job is not about me, it's about you’
recalling the Democratic nominee’s assertion about the US election
'this is not about me, it's about you'
Also there seemed to be a plan to follow the American model of constant mini standing ovations – but apart from those who had clearly been primed to keep jumping up this didn’t really take off.
But I am being unfair. You see I have an admission to make. Even when I worked for him, I was alone among his fans in never really liking Tony Blair’s speeches.
It wasn’t just that I hardly ever got any lines in to them (OK, it was mainly that). For me an important aim of a speech is to close the distance between political leaders and the rest of us.
I yearned for argument and connection instead of simply declaiming. Sometimes TB did this, particularly when he was trying to persuade his Party of something with which it felt uncomfortable but generally his speeches were cleverly stitched together lists of quotable assertions.
Then again, I guess Gordon was trying to convince members of the Party and the public of something that many of them doubt – that he is the right man to be PM. In this the case was sustained throughout the speech. Only time will tell if it is an argument he can win.
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23 September 2008
The gathering storm
I found myself this morning at the ICA for a breakfast seminar on behaviour change held by the Institute for Insight in the Public Services. It was a good breakfast and we all enjoyed the splendid Danish pastries both before and after our discussions of the obesity epidemic.
Hearing the various presentations on the theory and practice of behaviour change and campaigns to reduce obesity, smoking, binge drinking I felt a rising irritation. One question kept hitting me. Why hadn’t I been invited to be on the panel? Haven’t these people read my Guardian article or the edition of Ethos dedicated to behaviour change that I have recently guest edited?
I decided that the best way to show displeasure while being dignified would be pointedly to resist participating in the Q and A. However when it began there was a lengthy pause (at least three seconds) before the first hand went up and at that moment I understood that the duty to share my insight was so much more important than my ego. I leapt in.
In fact, not only did I ask several questions but to help the panel I starting answering other people’s points from the floor. Judging from the murmuring every time I intervened I was making a real impact.
Indeed I could tell the organisers recognised their mistake in not inviting me to be a keynote speaker when on the way out I overheard one say to a colleague ‘why on earth did we invite that Matthew Taylor to be in the audience’.
Last week I suggested we should see the credit crunch as much as a failure of political culture and leadership as of economic management and corporate greed. This view seems now to be spreading (my three readers must have been talking to loads of other people).As I said, any serious economist knew that borrowing, debt and housing bubble would burst and in doing so hurt many of those taking risks to improve themselves (read the excellent Jonathan Guthrie in yesterday’s FT to see the impact the slow down is already having on small businesses).
But to take action in the face of people’s desire to spend and the bank’s desire to lend would have taken political courage well beyond that customarily shown by our leaders. Arguably Vince Cable was the only person who warned us what was coming. It is often the case that the LibDems – knowing they have no realistic chance of being in power - feel liberated to tell us the truth (which is why last week promising to cut taxes seemed so perverse).
I have no idea what Gordon Brown will say this afternoon but let’s hope there is some recognition that we are reaping the whirlwind of a combination of consumerist individualism, mass media irresponsibility, and political timidity. This was completely missing from Alistair Darling’s computer generated speech yesterday.
Business, politicians, journalists and citizens; we walked hand in hand into the storm. Instead of casting around for culprits or suggesting simple solutions we need to reflect on the lessons for society in general.
Every once in while a political leader has the courage to reframe an issue from ‘who should we blame’ or ‘what should leaders do’ to ‘what does this mean’ and ‘what should we as citizens do’. Kennedy did it on the arms race, when he said it was up to Americans to choose peace. Earlier this year in response to the row over preacher Jeremiah Wright, Barack Obama had a brave attempt of reframing the issue of race.
Labour looks doomed at the next election but I for one would believe anything was possible if this afternoon Gordon Brown showed the confidence and leadership in explore the social origins of the present crisis and the real choices he and we now face.
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22 September 2008
Running hot and cold in Manchester
Yesterday was just one of those days. I was booked to chair a fringe meeting for the New Statesman at lunchtime and so I got to Euston in good time for the Manchester train. That's when it all started to go wrong.
The train 'wasn't ready', which, given that Virgin had presumably had since Saturday night to prepare it, was hard to understand. When we finally did board, the train was chronically overcrowded.
Then there were three announcements from the buffet (or 'shop' as it is now called) one to say it was opening late, another to say it couldn't take change or credit cards, and a third to say it had closed down due to 'unforeseen' problems.
The train then stopped and we were told it would arrive over an hour late. But at least something was working; the air conditioning in our carriage was set so high that people were scrabbling around in their luggage for woollies.
I arrived in Manchester far too late for my meeting, but in time to run to the Piccadilly Sports Bar and watch the last five minutes of my beloved West Brom losing to Aston Villa.
Thoroughly grumpy and miserable I walked the streets of Manchester. Eventually I found a pub with the Chelsea / Man United game, but distracted by the match I accidentally picked up someone else's drink at the bar. As the rather large person in question was remonstrating me Chelsea equalized, an event in which I could immediately tell he somehow felt that I, as a Londoner, was implicated. I beat a hasty retreat.
Of course, I could have gone to the conference, but ever since the Observer printed a tendentious piece two weeks ago suggesting I had been appointed to advise David Cameron I have been getting funny looks from my old comrades.
Eventually it was time for the RSA World at One fringe meeting at the Radisson Hotel. The room was packed and hot and the audience having to be patient as we had pushed back the start time by half an hour to accommodate David Miliband.
Our first speaker was supposed to be Ben Page from IPSOS MORI but for reasons best known to them, the Social Market Foundation had taken his pass and despite my pleadings were utterly indifferent to the fact that he was stuck outside the security cordon with minutes until our meeting.
As the minutes ticked away Ben kept phoning to say the police were getting increasingly suspicious of his story and he was starting to worry about the prospects of a full body search. At this point I snapped, losing my temper with various SMF staff and bellowing (mild) obscenities in front of several rather startled members of the Cabinet.
Eventually I tracked down the pass, and Ben and I ran up five flights of stairs to a meeting room so hot that it could only have felt tolerable to anyone who had just stepped off the super-cooled 08:35 Euston to Manchester.
Ben was a star and entertained everyone with his slides showing the contradictory nature of public opinions. I started my short commments, but RSA and WATO staff were frantically waving at me to inidcate that the Foreign Secretary was ten... no fifteen... no five, no ten minutes away so I slowed down and extemporised.
After 25 minutes, which ranged over my life at the RSA, Number Ten, the Labour Party, and Bootham Street Junior School I dried up, so we had to move to questions. At last after very enlightening exchanges about how to canvass in Mitchum, the design of leaflets and engaging with your local park, Mr Miliband showed up looking relaxed and commanding.
After he had made a few comments Martha Kearney started to quiz him, presumably aware that we were by now running well over time and that several people were showing signs of heat exhaustion. But the conference delegates had been well briefed, so the moment Martha mentioned the leadership issues she got drowned out by a combination of booing and the soft clump of expiring bodies falling to the carpet.
So that WATO could get something to tape for today's programme there was no choice but to overrun, anyway, we couldn't get out of the doors until all the people on stretchers had been carried to safety.
Suddenly I realised I had fifteen minutes to get the last train back to London. There was no choice but to run. As I sprinted past a Cabinet minister, I can't be sure, but I think she murmured 'that's right Taylor, you can run, but you can't hide'.
I made it to the station with two minutes to spare. As I sat down in the carriage my body was steaming, my shirt was soaked, and there was sweat running in rivulets off my forehead. 'Ding Dong' went the announcer 'Welcome to the 20:10 to Euston. Unfortunately, due to unforeseen circumstances, the air conditioning will not be working on this journey.'
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19 September 2008
The crisis: a modest proposal
Writing in today’s FT David Blake makes a devastating attack on Former Federal Reserve Chairman Alan Greenspan. Blake argues that Greenspan knew about the growing risks of the dot com bubble and the factors that led to the credit crunch but in both cases refused to act and has since sought to wash his hands of responsibility. Blake is surely right that Greenspan’s formerly sky high reputation deserves to come down to earth. But let’s also understand how hard it is to act when contagious greed sweeps the markets.
In particular, imagine the outcry had Governments in either the US or the UK sought to stop sub prime lending or 100% plus mortgages. ‘We want to borrow’, ‘the banks want to lend’ and ‘why shouldn’t we be allowed to get our share of the housing boom’ would have been the loud and angry public response. Government could have been portrayed as both interfering and a block on aspiration. To have done this when City experts were dismissive of any warning voices would have made it even harder.
Two characteristics of bubbles are that the later you get involved the more you lose and that the late comers are usually those with the least to fall back on once things go wrong. This will happen again.
Greater regulation will stop a bubble just like this one reoccurring but bubbles are endemic to the City’s casino economy. New regulation will simply provide the contours for the excesses of the future. So as well as regulation to stop problems we need to boost the legitimacy of those who cry ‘danger’.
I propose the establishment - maybe by the OECD or IMF - of an international panel of wise people. This group would be asked to comment every six months on major trends in world markets using a traffic lights system. If the panel flags up an amber danger in the global market or in one major country it can demand the Government of that country responds to its concerns. If the light turns red the Government in question can be required to attend a special public hearing to answer the concerns being raised by the panel.
One of the most difficult to bear facts about the current crisis is that people saw it coming. Warren Buffet and George Soros were only the most prominent Cassandras. Had such a panel existed and had it included people like Buffet and Soros these is no question that it would have been flashing red lights about both irresponsible lending and complex derivatives years ago. Maybe we would all still have plunged headline into disaster. At least we couldn’t have said we weren’t warned.
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18 September 2008
Greed is good, but only in its place
As the newspaper headlines grow ever more doom laden the search is on for the ultimate cause of the current crisis. For many commentators, Seumas Milne in today’s Guardian is an example, this is the inevitable comeuppance for greedy bankers who have gambled with our mortgages and pensions. On the other hand, The Times’ Alice Thomson argues that the City has been responsible for the wealth creation of the past decade or so, and it’s both perverse and self-indulgent to be jubilant in the face of their banker’s woes.
So should we pin the blame on the avarice of the bankers? It is to be expected that City folk might be more prone to greediness than the rest of us. They are willing to work extremely long hours under great stress in a job whose only real recompense is money. We would therefore expect them to be more single minded about money than say teachers, doctors, or landscape gardeners.
But, the issues isn’t so much individual greed, but the legitimisation of greed by the City’s working culture. As regular readers will know, I tend to approach organisations and cultures through the prism of four fundamental ways of framing social relations; the egalitarian, the hierarchical, the individualistic and the fatalistic.
A key point about this approach is that in all structured social contexts these different frames co-exist. Indeed that any attempt to drive change should seek to engage with how change will appear and occur through these frames. Any strategy or culture which systematically ignores one or more of these ways of conducting social relations will ultimately be undermined.
Arguably the problem with the City culture was that personal predisposition, incentives and prevailing norms were all highly individualistic. Weak supervision and sheer complexity meant limited hierarchical control, while there appears to have a complete absence of value based or solidaristic (egalitarian) impulses. Even fatalism, which plays its part in curbing the excesses of the other frames was absent; no one in the City would ever shrug their shoulders and accept modest returns or small bonuses.
So a lesson that I take from the financial crisis is to beware organisational monocultures. They are inherently prone to dysfunction and vulnerability. By the way this would be equally true of a culture that was overly egalitarian; lacking hierarchy to offer direction and individualism to motivate such an organisation would be prone to introspection and sclerosis.
Finally, still on the financial crisis, on the one of my favourite commentators Anatole Kaletsky has today delivered a damning assessment of the US response. If he is right (and he usually is) Treasury Secretary Henry Paulson could go down in history as the man who turned a drama into a crisis.
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17 September 2008
Navigating the financial crisis, and the moral maze
An even-briefer –than–usual update today as I am rather distracted (not to say terrified) about being a Moral Maze panellist tonight. The programme is live, the other panellists have done it loads of times before and the subject is really difficult – whether NHS patients who top up their cancer treatments with drugs not available on the NHS should be denied NHS care. If you want to listen in it’s on at 8.00, or you could 'listen again' on the podcast tomorrow.
Really good seminar yesterday on Tomorrow’s Investor. Rowland Manthorpe and David Pitt Watson made a good case to a very knowledgeable group that there is a gap in the market for a simple, low fee, high accountability, ethically robust pension fund. The next stage is to look more thoroughly at the viability for such a fund and explore what possible regulatory barriers there might be. The first stage was funded by INVESCO and PWC – whose representatives also made invaluable contributions to yesterday’s seminar - so thanks to them.
I have a piece about behaviour change policies in today’s Guardian. It’s the lead article for a magazine called Ethos which I guest edited on the subject of behaviour change for the company Serco. The magazine includes an interesting article by neuroscientist Susan Greenfield and an interview (by me) with Oliver Letwin.
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16 September 2008
Lessons from Lehman
Apart from hard line anti-capitalists (who must be having a great laugh) all anyone wants now is for the bad news about finance and markets to stop. That the RSA will probably have to write off a few thousands pounds in unpaid room booking fees owed to us by Lehman Brothers is a small symbol of how this bad news will travel a great deal further than the city bankers having to return their Porches to the showroom.There is no question now that the future will see a radical overhaul of regulation in the banking and financial services sector. The best name of any new legislation might be the Stable Door Act. The problem with regulation is that to a large degree its effectiveness relies on things that are much harder to create than new rules; culture, norms and ethics.
What drove the excesses of sub prime, 125% mortgages, and impossibly complex derivatives was not just lax rules but also a lack of realism, restraint and responsibility. Without these virtues new rules will simply be an invitation to find ever more complex, perverse and risky forms of circumvention.
I am far from an expert but it seems to me that certain key principles stand out if we really want to learn the lessons of the last fifteen years. We need to restore the link between accessing and making money and generating value.
Whether at the national level where countries like the US and UK were spending much more than they were producing, at the corporate level where company finances could be the outcome not of goods and services produced but of abstruse forms of gambling, or at the individual level where almost everyone seemed to be able to borrow at will, the link between producing value and getting hold of money became more and more attenuated.
It may be true – as Government ministers say – that the real economy is much healthier than the collapsing world of finance. But, the hunger for spending and borrowing among nations, companies, the super rich and millions of ordinary people long since became detached from the real economy.
We also need much greater transparency, which is a function both of openness and comprehensibility. Whether it is executive pay and bonus systems, the distribution of risks, the real performance of companies and investments, not only do we need to know the facts, we as citizens need to see the importance of holding people and systems to account.
This afternoon we are holding a seminar to discuss our Tomorrow’s Investor project. At the heart of this is the thesis that there is market failure in the pensions sector. Our work with small and indirect investors suggests they want a product that is low fee, high accountability and ethically robust. Very few of us are willing to be active in making our current investments fit this pattern but if the right product was available to us we would grab it.
A good (albeit hypothetical) measure of such a fund would be that if there were future possibilities to invest in products like sold on sub prime mortgages the fund managers would have to explain clearly to investors the risks involved.
As for investors we too have to take responsibility. I wouldn’t put a bet on a horserace if I didn’t understand the odds or the possible losses I might incur. In the future we need to be similarly circumspect about how we foundations of our future livelihood.
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15 September 2008
The confusing nature of public opinion
It may be a somewhat arbitrary measure, and we couldn’t have done it without the BBC, but yesterday’s RSA fringe meeting at LibDem conference was a mark of great progress. This time last year we held only one fringe meeting and attracted an audience of about 30. This year we are having a meeting at each conference and we started last night with an audience of over 150.
The event discussed the question ‘what do voters want’. An excellent presentation from Bobby Duffy of Mori underlined the confused and confusing nature of public opinion. The facts are surprising, and they got some rueful laughs from a good humoured and feisty audience.
So satisfaction with the NHS is at its highest recorded level, but 56 per cent believe it is in crisis. Or try this one - voters are very worried about climate change with 74 per cent saying we are heading for environmental disaster if we don't change our ways. But then 59 per cent say they themselves are doing nothing about it. People think it's up to government to solve our environmental challenges, but green policies won't actually be the deciding factor when it comes to the ballot box. In fact it won't even be close.
This goes to the heart of a key problem in modern politics. The voters, or more accurately the general unwillingness of politicians to have an honest conversation with voters. As citizens we have insight into the problems are that our society faces but we seem to want to have our cake and eat it. We don't want government to meddle in our affairs, but we want it to protect us from all ills. We want American tax levels but Scandinavian welfare provision.
As we approach an election politicians will be increasingly tempted to pander to rather than confront the public’s contradictory desires, which is why these fringe meetings are timely as well as entertaining.
We are looking forward to the next debates - over the next two Sundays David Miliband and then Oliver Letwin will be giving us their take on what the voters want and what their parties can and should do. -
12 September 2008
A range of explanations for pessimism
I have just been reading a draft article about public attitudes soon to appear in a current affairs magazine. The article uses a battery of statistics to highlight the paradoxical nature of our attitudes. To put it in a nutshell:- Generally, we are happy and optimistic about own lives and families
- Important objective aspects of our lives ranging from health to affluence (notwithstanding the current crisis) to life expectancy are improving
- Many 'social fabric' indicators including crime levels, teen pregnancy, divorce and even drink and drug consumption, are either static or going in the right direction, and are anyway not that much different from ‘happier’ countries like Denmark
Yet despite all this we - like the other big four Western European countries - are ever more pessimistic about the direction in which we think the country is going. There is a range of explanations for this phenomenon.
Inequality. Many social researchers and progressive commentators argue that the more equal a country is the happier it is. We may be better off than we were but we are also more unequal, hence more unhappy about society.
Migration and diversity. Robert Putnam and others have shown how people who live in diverse and fast changing communities are – regardless of their own background - less content.
Politics. Our pessimism about society is really just pessimism about this Government. Would a new Government restore the heady optimism of the summer of 1997?
Decline in values. From Melanie Phillips to Richard Reeves to David Cameron there are those who highlight a decline in morality and public spiritedness. Is this why we are so open to the Conservative’s Broken Society mantra?
Private hubris, public despair. This is the thesis I outlined a few months ago. The rise and rise of individualism coupled with the decline of collective institutions means we have an exaggerated account of our own efficacy (which appears to be a hard wired trait) and a diminished account of society’s scope for collective progress
The media. Bad news sells. Most of us get our information about the world out there from a media ever more desperate to get our attention by peddling rage and fear. This view is underlined by the gap between the positive story we offer about our own communities and public services and the negative view we have of communities and services at large.
Each of these accounts is worth exploring but none of them are wholly convincing. But social pessimism is a bad thing - it undermines trust and the myth of decline contributes to bad politics and policy making.
'The only thing we have to fear is fear itself' said Franklin D. Roosevelt in his inaugural address. The modern version is 'we have nothing to be pessimistic about but pessimism itself'.
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11 September 2008
A pleasurable new task for me
A pleasurable new task for me is to read the always stimulating weekly FT column penned by RSA Chair designate Luke Johnson. This week Luke was writing about the value of strong leadership in companies and contrasting this with tendency towards timidity and vacillation in the public sector.
Luke knows much more than me about business so it’s not just because he’s soon to be my boss that I defer to his judgement in this area. But two thoughts occur to me about the public sector and leadership more generally. First, decision making in the public sector is bound to be more problematic due both to the content of the decision and the public expectation of a higher level of accountability. We might regret it when the local pub closes down but we don’t feel we have the right to protest as we do when the post office is threatened. Similarly, we shrug at the shoddy content of most commercial TV channels but get agitated if we think public service broadcasters are being irresponsible or unresponsive. This is a matter of degree. The private sector is having to adjust to a world of greater transparency, scrutiny and expectations of accountability but I suspect public authorities will always face more a complex and compromising decision making context.
My other thought relates to an explanatory framework I have quoted before in this blog. Developed by a group of political and social scientists and largely based on the insight of the anthropologist Mary Douglas, this theory argues for the existence of four elemental ways of viewing social relations. These are the hierarchical (change from leaders and experts at the top), the individualist (change driven by the pursuit of individual self interest), the egalitarian (change driven bottom up by shared values) and the fatalistic (scepticism about the very idea of change). The key point of this analysis is that strategies must take into account the existence of all these ways of viewing, and acting in, the world. This means - in the researchers’ words - that we need ‘clumsy solutions for a complex world’.
Strong leadership is vital in the face of major challenges. But achieving buy-in also means aligning individual interests to those of the group or organisation. For new ways of doing things to endure and evolve requires deepening the commitment of those implicated in the change, which in turn means they must feel they are the authors and not just the victims of the process. And, finally, in any organisation there will be many who view change with world weary indifference. Strategies need to work with the strong seam of fatalism in every organisation (arguably, in every person).
Leaders need to be bold and clear but they also need to recognise the inherent limitations of top down change.
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09 September 2008
The Maze
As anyone associated with the RSA knows the organisation is held together by ‘my’ PA Barbara Corbett. It may be to cope with being the lynchpin of the organisation or more likely the strain of working for me but Barbara finds an outlet in an understated but razor sharp sense of humour.
Her unofficial blogs are treasured samizdat documents passed from one giggling colleague to another. Their theme is what might kindly be called my idiosyncratic style of management. I don’t know why but she seems to find my ranting and raving, lack of manners, tendency to change into or out of my running gear during high level meetings and general unreliability disconcerting.
So Barbara couldn’t resist the opportunity offered by me being asked to appear as a panellist on a Radio Four series. “You’ve been invited to appear on ‘Moral Maze’, or as it will henceforward be named, simply ‘Maze’” was her text message to me on holiday.
Barbara won’t be surprised that I am approaching this daunting broadcasting challenge (the programme is live and I will be appearing alongside veterans of the show) by refreshing my philosophical pragmatism.
For me the guides to judgement in moral dilemmas are clarity, consistency and utility. By this I mean that I tend to turn these dilemmas into the prosaic question; given the objectives we have agreed what way of arranging things from those realistically available is most likely to meet those objectives?
A second predisposition I hope to bring is a reversal of the way we often think about philosophical judgements and personal decisions.
The tendency is to think of moral judgements based on philosophical categories as being of a higher order than the messier more pragmatic ways in which most of us tend to deal with dilemmas in our own lives.
But in relation to many issues, especially those which invite us to pass judgement on others, I find it more useful to start by thinking about how we might cope if these issues affected our own lives directly.
How we deal with issues practically and concretely might tell us more about what way of doing things is most likely to align with human capacity and aspiration than the attempt to impose categorical imperatives derived from moral philosophising.
Already I can imagine readers trained in philosophy dismayed by my muddled thinking and those who hold strong universal beliefs horrified by my tepid relativism. Feel free to tell me the error of my ways.
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05 September 2008
The value of virtue
At last evening’s packed event to discuss Unjust rewards: exposing greed and inequality in Britain today by Polly Toynbee and David Walker it was clear that most of the audience agreed there are problems with the super rich.
These problems range from the minimal tax many of them pay, to the impact on social norms of highly ostentatious but unmerited wealth, to the disastrous consequences for business and society (ie the credit crunch) of a ‘heads you always win tails you never lose’ bonus culture.
Polly and David propose solutions in their book including closing tax loopholes, increasing taxes on the super rich and putting individual tax returns in the public domain. But despite the various policy options on offer there was also last night dismay that the super rich (especially those who avoid paying tax) don’t themselves feel embarrassed or ashamed by the scale and injustice of their privilege.
Will Hutton argued that we needed a kind of moral awakening among those he described has the ‘have lots of yachts’ (as in ‘the have’s’, ‘the have nots’, ‘the have yachts’, and ‘the have lots of yachts’)
It is interesting how often questions of values and norms are surfacing in debates on social and public policy. Richard Reeves, the new Director of DEMOS, has been talking and writing about character. In this month’s Prospect Edward Skidelsky asks ‘what happened to goodness?’, and earlier this week Independent columnist Deborah Orr, writing about the problems of prosecuting date rapists, argues ‘the truth is human beings really do have to take some responsibility for the moral policing of themselves’.
The underlying sense here is that there has been a decline in people ‘doing the right thing’, whether that is taking moral responsibility or displaying civic virtue.
In this sense, berating the rich for their unjust rewards and ostentatious shows of wealth goes along side David Cameron’s Glasgow speech telling the overweight and unemployed that they must take responsibility for their condition.
This I think begs three question to which I will return in future blogs and on which it would be interesting to have thoughts from my reader (see you at the weekend Mum):
- Is it really true that there has been an aggregate decline in moral responsibility and civic virtue. The counterfactuals here might include the decline in crime over the last twenty years or the healthy level of volunteering?
- Why is it that issues of morality, virtue and character have moved from the domain of philosophers and preachers to political and policy debate?
- What are the main schools of thought about how we might increase the stock of responsibility and virtue in society?
All this goes back to core RSA concerns about pro-social behaviour and who we need to be to thrive in the future. The link with an earlier blog this week is that as we seek to align the RSA behind this focus we need also continually to deepen our understanding of the issues and challenges involved.
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05 September 2008
A couple of announcements
I’m really delighted to announce Luke Johnson as the new Deputy Chair and Chair designate of our board of Trustees.Also, as any of you who’ve been involved in a major IT project will know, things are never as smooth as you’d initially hoped.
We’ve been having issues with the comments section on our new (and lovely) website, resulting in my not receiving some of the comments to my blog that you have been so kind as to send in
This problem has now been rectified and I invite everyone to comment on my most recent posts, safe in the knowledge that I will read and respond and the dialogue will get going again. Apologies to those of you who posted comments before that did not get to me!
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03 September 2008
The fickle finger of fate?
Slightly random blogging I’m afraid. My butterfly mind needs to land on some new themes before I get going. But some nuggets to keep my reader (hi Mum!) happy
I spoke this morning at the London Skills for Care conference. Not a huge gig and no fee for the RSA but it was returning a favour. I decided to start by telling the delegates about my last speech to the final conference of Commission for Social Care Inspection. It’s a long, very amusing (really) story, but the crux is that I successfully dissembled in order to get away with being badly prepared.
The story is about my good fortune and it led me to ask this question; why is it that whenever people say ‘life’s unfair’ they always mean they’ve have had bad luck?
Why does it sound wrong to say ‘life’s unfair, I’ve just won the lottery’ or ‘it’s unfair, I haven’t put on any weight despite eating lots of chocolate’.
It is, I think, a confirmation of the argument developed by Dan Gilbert in Stumbling into Happiness which is that we systematically exaggerate both the control we have over our own life course, and our own talents in comparison with other people. So, we have an inbuilt tendency to believe that good things in our life are the consequence of our own talents and actions while bad things are the result of misfortune.
Last but not least, we have some exciting news about our Chair of Trustees designate. It will be in the public domain by tomorrow, but suffice to say that after the fantastic work done by our existing Chair, Gerry Acher, the new man will bring invaluable new skills, experience and networks to the RSA as we move on to our next stage of development.
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02 September 2008
August showers bring ...
Back at work after a very soggy August in Devon. It was my idea for our holiday group to stay in the UK and every cloudy, rainy, windswept morning I would come down to a kitchen full of wet clothes and recriminatory looks.
On a holiday dominated by talk of the weather one thing I learnt was that the quality of the UK’s summer – particularly on the western side of the country – is all dictated by the location of something called the Azores High.
If only I’d listened in school geography I could have know in July that we were doomed to being damp for a month. I could have packed more waterproofs, left my shorts in the attic, or just bought a cheap flight to Greece.
Anyway there’s nothing like a disappointing holiday to make you glad to be back at work. It’s great to see our lecture season kicking off again with two strong events. On Thursday lunchtime we have the brilliant and brave Egyptian writer Alaa Al-Aswany and in the evening Polly Toynbee will be discussing with David Willets among others her new book which seeks to expose the attitudes of the new super rich and the damaging impact they have (according to Polly) on the rest of society.
For me the big challenge for the RSA over the next period is about alignment. Regular critics of my blog will shake their head at my use of management jargon so let me explain.
Over the last two years I hope we have established a reasonably clear account of the RSA’s purpose. Whether we talk about ‘pro-social behaviour’, or ‘closing the social aspiration gap’ what we mean essentially is that the RSA seeks to help people be the people they need to be to create the future they want. We do this through providing a platform for ideas, undertaking research and development and through supporting the activities of our Fellowship.
This is the theory but the practice is harder. If we are to develop a really strong intellectual and organisational brand we need every encounter with the RSA to speak to this account.
So, we should show how our lectures, web contents and journal articles relate to the theme. Our research projects should focus on how we enable people individually and collectively to be the people they need to be to create a better future. And every contact with the RSA Fellowship, nationally, regionally and locally should reinforce the idea of the RSA as an organisation of ambition, ideas and action.
Almost daily people used to say to me ‘The RSA; sounds interesting but what does it actually do?’ I hear this less often now but we have still got a long way to go before everything we do can be said to reinforce our image and our vision.
Finally, have a look at my Guardian Comment is Free piece.
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