On Power

I recently read “The feast of the goat” by Maria Vargas Llosa. Although it is quite dark, I recommend it. It is a novel, set in the chaotic last days of the Trujillo regime in the Dominican Republic. I had never heard of him, but he ruled for thirty years ending in 1961.
The book provides a graphic description of how and why these regimes evolve and survive. Trujillo becomes popular using populist causes such as fear of immigrants. People of talent are attracted to him as a means of getting things done. He is a genuine success for a time. He gets the constitution changed to consolidate power. He courts outside stakeholders, the US, and the Church, with flattery and a promise of stability. Then he uses emergency powers to dominate all media, restrict movement, and immaculate opposition. The secret police spy and kill with impunity. He believes these are necessary steps to make progress for the country.
Only his own hubris brings him down. His family come to own much of the economy. He starts to believe his own narrative, surrounded by fawning acolytes day and night. His family become high maintenance. People become his plaything, men killed and girls raped at his whim. Mistakes are made and enemies created. In the end, the outsiders can take no more and exert a squeeze, but he is only brought down by a hapless bunch of conspirators whose plan is solely to kill him. Afterwards a chaos ensues which is even more bloody than the regime itself, at least to start with.
I was lucky to read this as the crisis in Egypt unfolded, as it helped me to understand what it must have felt like in Mubarak’s bunker. The parallels in the story are almost complete. Let us hope a character or coalition emerges in Egypt now to lead the nation on a good path. That is far from certain.
It is tempting to look at Egypt or Dom Rep and scoff that this is a feature of the less developed world only. Think again. True, the developing world has the most obvious cases, with much of Africa, some of Latin America and Russia presided over by despots. In China it is a cabal not an individual, but the features are otherwise similar. But it was only seventy five years ago that European nations surrendered what amounted to absolute power to Hitler and Mussolini. Since then, many of the most enduring leaders have been anything but consensual. Think of Thatcher, De Gaulle, Berlusconi.
The phenomenon is more widespread than that. It took a Mandela, a Ghandi or a Walesa to create a revolution. In sport, Alex Ferguson is seen as the quintessential manager. Even religions create dangerous power structures, none more so than Christianity. Come to think of it, that might be the root cause for the prevalence of the power model around the world. And if you think the US is immune, just look at the gerrymandered shape of congressional districts.
By the way, I’m not accusing all the names mentioned here of all of the excesses of Trujillo. But even the generally benign ones share some features.
As usual, companies mirror countries more closely than we might want to believe. Jack Welsh epitomised the dominant CEO. Money often follows such characters. The City seems happy with highly loose corporate governance, no separation of Chairman and CEO roles and cavalier personalities.
I saw and felt this in my own career. Much bureaucratic life revolves around seeking power. Those who gather power attract followers as a way of getting things done. And, inexorably, the powerful become cavalier with due process and somewhat hubristic. Further, many managers simply could not operate effectively in a situation where authority was ambiguous.
Hence the famous quote attributed to one baron Aston. Power corrupts, absolute power corrupts absolutely. But here is a more recent quote, from an interview published last Sunday, in fact.
“I need to say this – you shouldn’t trust any government, actually including this one. You should not trust government – full stop. The natural inclination of government is to hoard power and information; to accrue power to itself in the name of the public good.”
Who said that? It was Nick Clegg, deputy prime minister of the UK and leader of the liberal democrats. Well said, Nick. This should remind many of us why we might have voted for his party last year and supported the forming of a coalition. Maybe we have forgotten that in our annoyance over tuition fees?
The problem is, in practice, an opposite quote can be equally true. “A power vacuum inhibits progress. An absolute power vacuum causes complete sclerosis”.
Who said that? Me. Just now. I’ve seen that too. Shell has been notorious in its insistence on checks and balances. It comes from its dual country origin, and from the Dutch Polder model, which loosely means a consensual culture. Over time, I’ve seen the advantages. And our darkest days have come when we briefly abandoned many of the principles in the era of Phil Watts and untruthful reserve reporting. But Watts was a product of the failure of the alternative. Shell was lamentably slow in driving through necessary changes, retaining powerful little country empires and a leadership by a committee long past their sell by date. And, at times, it did feel like the whole edifice conspired against decisions and actions.
The downside of a power vacuum applies in countries too. Belgium now appears ungovernable. India’s democracy dissolves into local autocracy. And, in the US, wonderful checks and balances appear to endlessly defer facing up to existential threats such as structural deficits or climate change.
Herein lies the problem. We have yet to develop a more effective management method than a power based one, and managers still learn, and people respond to, power based techniques. So far, the global track record of organisations eschewing power is pretty poor.
Perhaps that would be a good global project to support, promoting a model based on things other than power. Maybe the growing influence of women in the world can lead the way, though it certainly hasn’t happened yet, at least not outside Scandinavia. Open media must be helping, especially things like Wikileaks, with its ruthless exposures of abuse of power.
This concept could revolutionise schooling or management training, and spawn new political models (don’t try to tell me that Democracy, as currently practiced, does the job).
Now that would be something special for people to develop. Trouble is, we’d get nowhere. We lack the power.

On Debt, Gambling and Parasites

I was brought up by a very thrifty mother, a woman who epitomises protestant values. I never heard her say “never a borrower nor a lender be” but I suspect that is only because she didn’t know the phrase. Quite a few people from that generation are like that, a product of austerity and rationing.

Mum never had a mortgage, and was nervous when I took one on, only slowly accepting the argument that in London in the 1980’s there was no other way to get onto the property ladder. As she believes in owning rather than renting, I got my way in the end. But some of her values have stuck with me. I squirrel assets and don’t take financial risks lightly. And I have mistrust of those trying to make money from money, and even more of those making a parasitic living from providing the outlets for people to do so.

Experiences over the years have led to this musing. Through friends I have witnessed first hand how debt can lead to a sort of paralysis. And, more recently, I’ve observed the nature of advertisements now on English language TV.

It is easy to take a smug view of those in debt when one has never really been in debt oneself. My parents were moderately well off, classic Thatcher conservatives really. Thanks partly to their investment in my education and support, I’ve earned well and found it easy to avoid reckless risks.

But I now realise it is so easy to slide the other way, indeed I would say it is hard not to. There are many reasons why.

Owning property remains a laudable goal, and the need for high multiple mortgages has only worsened, and, albeit with a pause over the last couple of years, providers make it all to easy to take on the risks. Job security is a thing of the past, so the main risk factor in taking out a loan, disruption to steady wages, has intensified. The same is true of divorce.

Then there are the parasites. We were all mis-sold endowment mortgages. The way credit cards are marketed is disgraceful. Every store or item has its alluring credit scheme attached. Loan sharks abound. And, once someone is enmeshed, there are gambling and lotteries everywhere.

Meanwhile, societal expectations only intensify, as our networked world tempts us to reveal an outward affluence widely.

I fear that in some emerging countries, this could develop along an even worse trajectory than in Europe or the USA. There may be little legacy of inherited assets as a parachute. In many cultures, appearances and giving gifts matter a lot. And superstition can be part of society too, as well as gambling, legal or not.

Last Chinese New Year I attended a Feng Shui workshop interpreting the year. There are some good principles in Feng Shui, but the way everyone started making notes when the section about luck and money came around was for me disturbing.

How do people react to being in debt? It is both shaming and confusing. The pressures to appear in control are strong. Understanding the maths and budgeting is beyond most people, now there are so many variables involved. So people put their head in the sand and wish the problem away. They don’t open their mail. They accept solutions to defer a day of reckoning. Then they desperately try to reduce costs, but find they are in a vice-like grip because of the added cost of servicing the debt. Often there is no way out.

Before you smugly condemn these people, ask yourself what you would do? If we have a difficult relationship, our natural tendency is to hope it improves rather than address the problem head on. It is the same with a medical condition, or a big decision at work. We all do it, probably you as well. Consider that it may be that the only reasons you never got caught in a debt spiral might have been luck – the year you joined the workforce or bought a house for example, or the wealth of your parents. I am not so quick to condemn these days.

Back to the parasites. At least the lotteries and the gambling companies are honest. I find it so scary that every second advert on Sky these days seems to be either for online gambling, or its likely consequence, loan sharks and dodgy debt restructuring. What a testament to a society filled with pain! It is overwhelmingly the poor who gamble, often still men with money siphoned from the family. The government won’t stop it, as they get rich on the tax levied. But surely the explosion in easy gambling is stacking up social problems for the future?

My experience of the finance sector places them behind bookmakers in their probity. I recall one story from the USA from my Shell days which opened my eyes. We did a deal with a credit card company, whereby if customers took out the card of a particular company they could get discount on fuel. It was a good deal, and many applied. The problem for Shell came because most applicants were refused the card. The reason was not that they were not credit worthy, in fact precisely the opposite – credit checks suggested they would pay of their monthly balance in full, and hence be poor margin prospects for the credit card company. Since many of these people were previously loyal Shell customers who were insulted, even shamed, by the rejection, we lost a lot of customers as a result. More fool us, we should have done our due diligence on the deal.

But what does it say about the credit card company? Their margins were high, since they could afford the large discount available on fuel. Yet they obtained those margins by exploiting a vulnerable group in society, those tempted by some credit to be rolled over at exorbitant interest rates. For that same group can be captured, lured into a trap from which there is no easy escape. It is worth noting that credit card interest APR is current about 20%, while bank base rates are less than 1%. Deposits earn maybe 3%. The APR of some companies offering fast loans on Sky are over 2000%. All are hidden in small print, and in practice turn out even higher, as missed repayments lead to penalty fees, exorbitant charges are imposed for sending letters, and so on.

Think about it. Their goal is to entrap you, and then milk you hard. If in the end a debt goes bad, for the most part interest and fees from that same customer have created more than enough margin to compensate. How different is this business model from the loan shark lurking around the council estate?

This condemns retail banking, in my view. By the way, my experience with people trying to sell me investments is even worse, as a careful look at the small print usually reveals their obscene margins – for essentially nothing - and their attempts to obscure them. What about investment banking? These people are little more than overpaid bookmakers, making margins through smart hedging and laying off, certain to profit from sheer volume of trade, so long as the whole edifice doesn’t crumble around them as in 2009 – in which case the bail out will come.

And the biggest scandal of all? Such transactions are tax free! At least bookmakers have to pay a large government levy. Not so financiers. The most brilliant, constructive proposal of the last generation has been the Tobin tax, in which all financial transactions are subject to a small levy. It would have the effect of bolstering reserves, at the same time as stabilising markets, since it would be the low margin, high volume trades that would be affected.

The financial lobby (including my saintly Economist, by the way) make two arguments against Tobin. They say it is uncollectable, which is utter bullshit. Look at gambling, it works there. Compared with VAT, collection would be trivial. They also say it would reduce the competitiveness of countries who introduce it. Just like all taxes do, but it doesn’t stop us deploying them. In theory, that argument would have driven all gambling offshore, but it hasn’t. And what is something like the G20 for if not for such reforms?

Financial services have a role. Look at micro finance in India and Africa, it is wonderful. Companies need banks to finance their investments. But I become quite a socialist, and also something of a Lutheran, when I survey the horrible landscape in these areas today.

I try not to complain without offering practical remedies. A Tobin tax is one. Public awareness campaigns about gambling, like for drink driving, is another. Introduction of real international competition in banking sectors is a third.

This is soluble. Personal misery from debt is set to soar, especially in the developing world. And Diamond as his ilk trouser millions in the meantime. 2009 offered an opportunity, and the world has squandered it, and such horrible outcomes will only intensify before another such opportunity arises. How tragic.

The Curse of Size and Countries

Some months ago I wrote about the curse of size for companies. I’m convinced I saw more diseconomy of scale than economy of scale during my career. Plusses from scale come in the form of lower cost in things like manufacturing and greater brand heft. Minuses come from slow moving processes and loss of spirit. I believe that now the age of mass production is past the minuses usually outweigh the plusses.

Yet companies strive to get bigger and bigger, swallowing each other up and expanding ruthlessly. Most of this is because growth is usually good. Ideally, companies should grow and then sub-divide, like some sort of cell. But they don’t, mainly because bosses like the power and kudos that scale gives them and won’t voluntarily relinquish it. I am surprised that markets don’t more frequently force the issue.

Anyway, thinking about optimum size for a company got me pondering the same question for a country. What is the ideal population size for a country? Or are GDP or geographical size better measures?

There may be an optimum density of population, which is bigger than Russia’s and smaller than Singapore’s. In the former case, logistic and time zone costs are horrific and in the latter, growth is eventually constrained by land availability. Then again more land means more scope for natural resources, and less creates scarcity which can drive up rents. This is not simple.

The number of countries in the world is increasing. In the last 25 years, we have added all the states from former Yugoslavia and the USSR, and Slovakia too. Germany went in the other direction. East Timor split from Indonesia, and now it looks like Sudan will split too. Rumours persist that Belgium may be next, with what sometimes appear insurmountable problems in forming a sustainable government. Quebec might separate one day, perhaps even Scotland and Wales might as well.

The fissuring of states is driven by people, not governments. People of one ethnicity or religion want to divorce from those of another, usually when one side builds a grievance after decades of perceived discrimination. Driven to its conclusion, this trend could lead to a world with very many countries indeed. Working against the trend is the age of mass migration, where many countries become a hotchpotch of ethnicities learning to appreciate each other. Yet the trend may play out over more generations before stalling, as people exert more power. For example, if what we see in Egypt today spreads further in Africa, it could have longer lasting consequences than the break up of Sudan.

Over the centuries, size has implied military might, and countries have used this might to grow by acquisition of empires. There seems to be a point where diminishing returns set in, just as with companies. Remote provinces become costly and ungovernable, while people get spoiled from their years of superiority. It happened to Egypt, Greece, Rome, France, and England. Will the USA be next? They certainly show warning signs. The military ventures to ever less hospitable places. Obesity must be a symptom of being spoiled, as is a persistent trade deficit. Obama calling on the sputnik moment last week is unlikely to turn the tide on its own.

But there seems to be another way to win. Look at Hong Kong, Luxembourg, Monaco, even Switzerland. These are small countries which get away with parasite type behaviour, often in financial matters. Smallness is essential, as you have to be insignificant enough to not draw a reaction from others. But it is inherently risky, especially if they try to get too clever. Iceland and Ireland spring to mind. Much though the parasite model is a bit distasteful, you have to admire Switzerland especially for getting away with it for so long. You don’t meet many poor Swiss.

The very biggest can get away with bad financial behaviour too, of a different kind. Only because the dollar is the reserve currency of the world can the USA run the deficit it does. If China were smaller and less important, their currency policy would have come under more pressure as well.

What about at an individual level? Do we feel happier if we belong to a giant or a mouse? Here again the evidence is mixed. How the USA, with its scale and diversity, can maintain and exploit its national pride is a minor miracle. Then again, a country like Ireland can maintain an identity through its smallness. I know from experience that you are more warmly welcomed in almost every country in Europe when carrying an Irish passport compared with an English (British) one.

So, there seem to be a lot of pros and cons whichever dimension you choose. As with companies, the winning strategy must be to choose a positioning to fit your strengths and then stick with it. Perhaps someone could define a model. How about China as operational excellence, Finland as product innovation and Switzerland as customer intimacy? Instead of developing that, I’ll settle for making some predictions.

First, the number of countries will continue to grow, maybe at an accelerating rate. In one way, this is sad, as it will only be when we learn to live with each other that we can spend less global GDP on guns and more on innovation and facing global challenges like climate change. But more countries doesn’t have to mean more wars, so long as we become more educated and wealthy too, and learn the benefits of cooperation.

Second, the USA will struggle. Its politics become ever more dysfunctional, while its people fall behind in education, fitness and attitude. However, problems will emerge in China and India too, with sheer size becoming even more of a challenge as inequalities deepen.

Finally, if you were to be born today and have the luxury of choosing your country, you could do worse than choose Switzerland. Plus ca change.

Andy Gray and Prejudice

This week saw the firing of Andy Gray from Sky Sports, for two filmed incidents of sexism. If he or Richard Keys claimed that women didn’t know the offside law that was totally crass. It is so plainly daft that I wonder if they were just sending themselves up, but seemingly the incident was not isolated so Gray was fired. Well done Sky Sports for taking a stand, even if the result is that they, and we, lose a superb football analyst. People in positions of responsibility have to be held to account.

I guess this is a sign of progress. I believe that acceptance of difference is one of the hallmarks of civilisation, and in many fields progress has been spectacular. Take gender as an example. 200 years ago women were not allowed to sing. 100 years ago they were not allowed to vote. 50 years ago they were excluded from all golf clubs.

There is still a way to go, even if Gray represents a diminishing minority. Women still have to defer to younger male siblings to become monarchs. In my opinion shamefully we still cannot have female Roman Catholic priests – a job unusually suitable for a woman if ever there was one. In India or China a female is quite likely to be aborted or killed at birth. And many other societies still institutionalise gender discrimination. Religion can be wonderful, but it can also block progress.

Although women often still get less for the same job as men, bringing women into the workforce has arguably been one of the great drivers of growth and progress since 1950, both through adding quantity and quality. Yet throughout my career I witnessed discrimination. Some jobs were considered too physical, or too requiring of odd hours, to be suitable for women, an opinion acted on without actually consulting any women. I often heard that customers in some parts of the world would not accept women. Later, the excuse that fewer females graduated in relevant areas was made. All these arguments had a self fulfilling and reinforcing effect, and needed to be challenged, just like Gray and his ilk.

That is where quotas and laws came in. Because of inbuilt prejudice, I support these. Some examples are just good, such as not being allowed to ask a 30 year-old woman about her family plans since men are not routinely asked the same. But, necessary as they are, there is a downside to quotas. Inevitably, quotas work against free competition and therefore sacrifice merit. I believe I have seen many more over-promoted women than men over the years. The result is bad for the business, bad for the women themselves, and bad for embedding prejudice. But often there is no alternative. That is what makes Gray’s remark so shameful, since the few female officials in professional soccer in the UK have come through a transparent merit-based system, at least in recent times.

While gender inequality persists, we can still celebrate progress. One clear outcome is stronger, more creative businesses and departments, more closely understanding their customer’s needs. As usual, the Nordics lead the way. Here, a key enabler has been the provision of truly excellent child care. That is one of those government investments which clearly pay back over time. In 30 years time, maybe Western countries will have achieved full equality. I hope so.

Back to sports, should women’s sport not generally command equal airtime and wages? Tennis leads the way, but in most sports women are very much the poor relations. On this one fair play to Sky, who do give airtime to women’s sports. The answer lies in what the customers want, and in my opinion fair enough, so long as it is given a fair chance to build a following. If men are so much more skilled or fast or exciting to watch in a particular sport, and audience figures support that, then they should command a premium. In that respect, female tennis has got away with a spectacularly good deal for a long time now.

But, just as we need quotas to overcome established prejudice in business, so we should have them in sports. Otherwise female sports face a vicious circle of underfunding, lack of improvement and low audiences. So, like golf seems to, give women a good run, a chance to develop a following. Staging a women’s match just before a men’s one, or a women’s tournament in parallel, is a good way forward. But, once the sport is established, the audience and the market should rule.

Gender is only one form of prejudice. We have prejudice based on age, religion, disability, race, schooling or background, sexual preference, you name it. Together, they represent perhaps the biggest block to human progress, as every bias counts against meritocratic outcomes.

Slowly, Western societies manage to go forward. When I was at school, we routinely bullied mixed race kids, and laughed at “Love thy neighbour”. Anyone doing something a bit dumb was labelled Spastic. My mum still has something against Catholics, even though she wouldn’t recognise one if she saw one and couldn’t describe any meaningful difference between Catholics and others. One of the worst parental fears remains that their child will announce themselves as gay. Yet combating homophobia has probably seen the greatest advance of all over the last ten years. It was only that long ago that I shrunk back when a gay man tried to hug me.

What more can we do? I believe this is one of those many areas where liberals should speak up more, celebrating progress and pointing to the benefits. “Politically correct” has become an easy insult, yet usually the people arguing against it are in fact defending some prejudice or other. Sometimes things are taken too far – for example, I found it weird that I wasn’t allowed to ask someone’s age at an interview. If politically correct means providing ladies toilets, or disabled access, or combating racism then I’m all in favour of it. If you are too, then join me in defending this progress.

Sorry Andy, your analysis is brilliant but you are way out of order, your time is up.

Solving the pensions crisis

Pensions are a big issue. The basic reason is that we are now living so long. Whereas fifty years ago the typical person only drew a pension for five to ten years, that has increased now to twenty or thirty years. That is probably a four fold increase within a generation. And who knows how long we will all be living in thirty years from now?

Neither countries nor companies have done enough to catch up. One of the biggest factors in all the debts of rich world countries are pension liabilities. Part of it is paying state funded old aged pensions to all older folk, but a bigger chunk is typically the full pensions of people who worked in the public sector.

As an example, the British post office is a solid little business operationally, even though we don’t post as many letters as we used to. What cripples it is all the pensions of retired and retiring postal workers. The government have tried to privatise it a few times, but no one will touch the pension liability.

Companies are the same. The crisis in Detroit with the big three American car manufacturers was almost exclusively a pensions crisis. Just like with the post office, these companies had an ever growing mountain of retired workers, and a declining core business which couldn’t meet the liabilities. Nowadays, whenever one company takes over another company, the biggest deal breaker is often the state of the pension liability. If you join a company or want to invest in a company, be sure to read up about its pensions.

For a time, both countries and companies were fooled by a financial trick, namely that investments always rise by more than inflation. A lot of people used to fall for the same trick when agreeing to buy endowment mortgages. It was thought that pension funds, where employees effectively invest during their careers in order to reclaim when retired, would just grow and grow, and that investment growth would pay for the extra longevity. What rubbish! We know better now after repeated busts in investment markets.

Companies have mainly taken the most important step to at least stop the problem getting worse, by removing so called final salary schemes, thus balancing out the expected receipts and liabilities, at least for new employees. It is the baby boomers who are getting a free lunch, having paid less and now likely to receive more.

Wary of unions and voters, state firms are way behind in this game. Expect this to be one of the biggest changes in the new age of deficit reduction, But it is too little too late in many cases, as the liabilities have already ballooned out of control, and everyone is loathe to renege on existing commitments.

So, apart from just blithely drifting towards unsustainable debt (the primary apparent policy in the US and elsewhere), other remedies slowly come into play. One is raising the retirement age. But baby boom voters seem to be so precious, that the acceptable rate of change is very slow. We had recent riots in France when an increase from 60 to 62 was proposed, and even in the UK, the increase from 65 to 66 only kicks in around 2020. Nonetheless, expect a lot more of this, not just of general pension ages but also of the expected retirement ages for state workers.

Defence and police forces do especially well, often picking up pensions from their early fifties. Seemingly that is an unwritten trade off against the type of work they do, though for me it would be more transparent if that came through wages.

The other game in town is persuading people to work longer voluntarily. Indeed, legislation coming through means anyone who wants to continue working can do so in many countries. This is sneakily marketed as offering opportunity to older people, and in part it is, though the primary purpose is to save pension money.

For companies, though, this leads to a problem, especially companies with many bands of seniority grades. That is because there is a strong correlation between age and seniority, indeed it is almost unheard of to demote anyone. So as people stay on longer, the company has a higher wage bill they can’t afford.

But does older always been better? You would think so if you look at company wage structures, and also the lack of retirement expectations on politicians themselves, not to mention kings or popes. Of course, age brings experience and wisdom and knowledge, and indeed older people are especially suitable for some job types, for example coaching or documentation. But are these older folk as savvy with computers? Or as familiar with new processes? Or as sprightly, or as prepared to invest more energy and effort to feed their ambition? Sometimes yes, but usually no.

So I advocate a breaking of the automatic link between seniority and age. A typical career might then follow the same pattern as now until someone reaches their mid fifties, but then suffer a gradual drop off as their ambition fades. Of course, some people would continue to improve and justify further promotion, but opening the path to demotion would have many benefits.

The company could then join in the campaign to get people to stay longer with enthusiasm rather than trepidation. People would be more ready to look at lower intensity jobs or even part time jobs, as a useful bridge towards retirement. There would be fewer burnouts or crashes as people reached their level of incompetence. Specific jobs could be designed for experienced workers, without these having disproportionate rewards. Companies would be better run, and more closely resemble societies they operate in.

Oh, and we could go a long way to solving the global pensions crisis.

Six Months Retired

It is over six months now since I last made may daily trudge to Rijswijk to spend seven or eight hours in an office. It feels a good time to review the experience, in case anyone is contemplating a similar move. What surprises have there been?

The surprise is the lack of surprises. I had thought a long time about quitting work, and thought I was ready. I’d had the good luck to have had quite a quiet last year or two while in work, to smooth the transition. Nonetheless I expected surprises.

It is always a good idea to expect surprises. “An expectation is a premeditated disappointment”, after all. And this was a big change, into a way of life I could not rehearse. There were also the words of many people ringing in my ears. There was the crowd who found the whole idea a bit distasteful, led by my mother with many adherents, who thought that a man my age needed work to prevent a total collapse of the grey cells.

I also overheard someone reciting a tale from their Shell retirement course. I didn’t get to go on that myself, perhaps due to my lacking the age requirement. Seemingly at the start of the course, the facilitator asks everyone what they will do once they retire. The first one to reply dreams of a week of seven weekend days, filled with idle repose. Hah, scorns the facilitator, that will last you a week before you get bored! The next reply talks of round the world cruises and long-deferred family visits. Fair enough, says the sceptical facilitator, and then what?

At the time of hearing this, I was a few weeks from retirement. I dreamed of seven day weekends. I had vague thoughts of holidays but no real plans. I didn’t have many other plans either, to be honest. Would I be bored stupid within a month?

Well, no. Not for a second. I can’t recall a moment of boredom. I actually feel busier than before I retired. And the pipeline of vague plans is still exactly that – a pleasing, vague set of thoughts for future enjoyment.

Feeling busy is real, Yet many days I would struggle to say what I had achieved. The day is shorter, as I tend to get up later and wallow in the start of the day, taking time to feel awake and enjoying breakfast. I think that is one key to feeling happy and fulfilled, taking time to enjoy things, especially simple things like a meal or reading. With a 07.36AM bus to catch, that was harder to achieve in work.

Perhaps I am an exception, and have somehow tricked inevitable boredom and decline (so far). After all, I did manage a good wind down process. I’ve had a few one-off distractions in these months, notably moving house and acquiring a family. Some nice projects have come up to keep me busy. There is always blogging.

However, my sense is that most people could make a similar list. The difference may be in the mind. Many people struggle to make a transition like retirement with a positive mindset. It is not surprising. First, there is the hit to the ego of coming to recognise that you are not indispensible at work. That may be very sudden in the situation where the timing of quitting work is imposed rather than chosen. Second, there may be unresolved tensions at home, made worse by the sudden addition of time to spend together. Finally, there is the mum factor, voices ringing in ears about loss of purpose or value.

I saw “Another Year” at the weekend. I like Mike Leigh very much, with his dark but intimate portraits of real people. Even though Tom and Gerri work, you sensed that retirement would not challenge them, indeed would be a gift to them. There is little tension between them, they have balanced lives, and can laugh at themselves. There is a nice passage in the film where the character called Ken has a moan about his work. He has an age and seniority which would enable him to retire tomorrow, yet the very prospect fills him with dread.

I suppose the conclusion is about being happy with yourself. The one person you inevitably spend more time with on retirement is yourself. If being with yourself is something you enjoy, then you will have more opportunity to enjoy it. If you have inner tensions, retirement will only succeed in exposing them.

What is sad and unnecessary is that the very transition creates inner tensions in people. So make sure you start preparing early enough. Keep telling yourself that your firm could survive without you. Get out before you are pushed. Force yourself to wind down. Don’t believe your mother and other doubters. And, for the benefit of your partner and friends, don’t become your mother yourself!

Subsidizing Arts

I went to a ballet this week, and enjoyed it very much. The whole show was refreshing and performed with passion and joy.

At the end of the show, the production leader came forward from his curtain call and made a little speech about lobbying politicians to defend cultural subsidies. In most of Europe, especially the UK and the Netherlands, there are serious threats to these budgets as part of the general drive to get deficits under control.

I must admit I felt a bit insulted. I know the man who made the speech a little bit, and greatly admire him and the work he does. He is talented, very hard working, and also generous and inclusive. Yet on Tuesday I had paid my entrance ticket to see a show, not hear a political lecture. And I also missed any valid argumentation – he seemed to want money because he wanted it, or needed it, or had always had it.

Most of the audience seemed to sympathise with the appeal, though I believe I was not alone in questioning the choice of occasion. But it set me thinking. Why should we invest tax money into culture? Since then I’ve sought out some artists, and read a couple of articles. Typical is this one from twelve months ago. http://www.guardian.co.uk/commentisfree/2010/feb/27/arts-funding-reasons-subsidise-creativity

My exercise so far has not convinced me at all. The starting point of course has to be that any euro for art is displacing a euro for something else. Even this simple concept seems to be beyond most artists, who appear to share the same convenient belief that money grows on trees with research scientists at Shell. We can argue about how severe budget cuts should be overall, whether starving budgets actually will spin our economies into further recessions, but that is nothing to do with arts.

By the way, that is the same with student fees in the UK. It is easy to be against putting up these fees, but most don’t really think of viable alternatives. Europe needs to save money, both short term because of recent shocks, and long term because of demographics. True, none of us like bankers and many of us don’t like military spending either, but the bald fact is that most discretionary budgets must be cut. Our mental model has to be that by choosing a lower student fee or a higher arts subsidy, we are depriving a school somewhere.

Read the arguments in the article I hyperlinked in the context of choosing between art and schools, and they fall a bit flat. The argument that everyone else gets subsidised so why shouldn’t we is the weakest of all. Some artists I have spoken too have gone further. Art should be subsidised because it always has been. And art should be subsidised because I worked hard to get my qualifications. Hmm. By that token we should still be pouring money into blacksmiths or steamboats. Sorry guys, get real.

True, investment in arts may give a return. The only artist I spoke to with any figures to bolster his case quoted a study from Italy quantifying the economic return from investing in arts, and also higher growth in towns with museums and orchestras. By the way, this artist was the only one I spoke to who actually made his own living without subsidy. No coincidence – someone with some commercial acumen thinks about his own value as well as the value of the wider sphere. True, value comes in many dimensions, but finance has to be one of them. Nonetheless, impressive though these studies may be, it is still a luxury argument in times of cutbacks. If the funds aren’t there, investments can only be made at the expense of alternative investments.

Then the article gets more emotive. Art builds the national brand, and everyone benefits. Someone else I spoke to went further and claimed that art is how we understand each other’s cultures. Maybe true, but schools do all these things too, with the benefits far more clear and universal. And if these benefits are so clear, why do they need subsidies? Why can’t art attract private investment if it is such a good thing?

The final arguments are the most daring yet also the woolliest. Art challenges power. Perhaps we should subsidise journalists too then? The only countries which stifle art also stifle democracy. So if we deprive you of your little grant for your niche early music the whole democratic edifice will crumble? Sorry, I don’t buy it.

The longer I spent researching this, the harder my heart became. I heard whining that only secure long-term funding can work, that turning taps on and off was crippling. Welcome to the real world my friend. In Shell, I can barely recall a single year when my budget wasn’t arbitrarily cut. It is not ideal. But I coped. So must we all.

I heard entitlement mentality, snobbery and laziness. Some artists seem to think that attracting an audience is a sign of lack of quality, a sort of dumbing down. They are only happy doing their obscure but authentic thing in empty halls with their few like- minded friends. And, by the way, with our money! Shell scientists, come back, all is forgiven! And then they argue that if such activities stopped, they would be lost forever. What? In this age of technology? If something is lost, perhaps it is because in some cases it is not worth keeping.

All artists agree on one thing, that the disbursement of the subsidies is flawed. In the UK, a massive share of subsidy goes to the Royal Opera House, preserving something lacking international uniqueness or deep roots mainly for the benefit of a pampered elite. Not much urban regeneration there, I feel.

Sadly, that is the nature of subsidy, it corrupts. Look at the Common Agricultural Policy, or Russia for that matter. Take away open competition, and you are usually left with cronyism. Multiply that over generations, and it gets sicker and sicker. Consider also that large, subsidised, art, may be stifling new talent rather than promoting it. How can an up and coming artist sell tickets in unequal competition with grander performances of established names?

So what are the alternatives? I cannot advocate wholesale loss of museums or orchestras, nor a retreat to musicals and X Factor as commercialism dominates completely. There are, as usual, no magic bullets. Cut the budget and some things will go that maybe ought not to. Ask for philanthropy to step in, as seems to be the American way, and this will distributed almost as inefficiently as state subsidy. We can use some regulation, and also things like bursaries or differential ticket prices, though I recognise these are very partial solutions.

I love art. I hate to think of a society devoid of culture. Of course I do not advocate less art. Yet I can only conclude from my research that a period of subsidy starvation is wholly justified, not only to protect schools, but to shake up, brutally if necessary, a sick culture.

Perhaps you can persuade me otherwise.

Happy 2011, everyone. Count and cherish your blessings. Live for today.