Housing Policy

My mum never hesitated from offering financial advice. She lived through rationing and had a background in small business retail, and this context made her famously frugal. Look after the pennies and the pounds will look after themselves, she would utter frequently. Never a borrower or a lender be was another favourite. Most of all, she loved the idea of owning property, epitomized by the phrase safe as houses.

A lot of our values come from our parents, sometimes consciously and sometimes unconsciously, and this homespun wisdom has surely influenced me. The idea of unmanageable debt fills me with fear; I notice a physical reaction whenever I go near a casino. And, sure enough, I bought a house at twenty-two, with a deposit from mum and a loan from some building society. She hated mortgages but accepted that for a London flat an exception had to be made.

Recently my daughter and her husband asked me for general investment advice, and I found myself sounding like my mum, an unpleasant realisation that comes to most of us eventually. They should surely invest in a house, said I, but then my curious brain kicked in and I challenged my own instinct. A couple of weeks later The Economist included one of its excellent special reports, about housing. True to form, it was ready to challenge conventional wisdom. It did not argue that my daughter should avoid property, but it did argue that governments had made a mistake since 1945 in encouraging home ownership as a goal.

I just looked up what flats in that first block have recently been selling for – the internet is a wonderful thing! My 28,000 pounds would now be about 400,000. After inflation, that is price growth of 3.6% per annum, while investing in the UK stock market for the same period would have given a real annual return of 2.4%.

Of course, it is not so simple. There is tax to consider, and moving costs, mortgage fees and interest, and the cost of maintaining the flat, all compared with rental equivalents. Over thirty-eight years, my housing needs have evolved as well, not least because I have only lived in London for ten of them. But I am sure I am not alone in wondering why I didn’t just hold on to the London flat and rent it out – until I remind myself that cash and credit limitations at the time made that quite impossible.

So, must I admit that mum was right, once again? Well, in my narrow case, yes, but for a particular reason. Shell moved me around the UK in my early career years, and had a scheme whereby they compensated for that inconvenience by paying large chunks of mortgage interest, which enabled me to climb the property ladder quickly, as long as I had been on the rungs of that ladder before all the moves started. I was, so I did, and I benefitted. 

There are other such special reasons why becoming a homeowner (well, in practice, owner of a small part of a home) as early as possible can be a good strategy. Many are linked to government policy. School quality follows the money, and money is often in districts with barely any rental market. Many countries, including the US, still subsidise mortgage interest. Zoning laws can protect areas with high owner-occupancy, thereby creating scarcity and nudging up prices. There are big tax advantages to having wealth tied up in property, notably estate tax exemptions.

But if we start from economic fundamentals, home ownership is a pretty reckless strategy. Who would want such a large share of an economic portfolio – all the wealth and significant debt - tied up in a single asset within a single class, one where liquidity is low and where values are volatile? It is like taking out a large loan and investing all of it, plus all your other cash, into one stock, one that is hard to trade. Good luck with that one. You might have chosen Apple. But then again you might have chosen GM, or Enron.

Apart from all the special reasons noted above, there are other emotional reasons to buy. The real estate and finance industries peddle nonsense about how homeowners are happier and somehow classier people, and there is something comforting about owning somewhere. There is also one good practical reason – you are hedging your largest long-term liability: if you know at thirty that you will want to live in a part of outer London as a pensioner, you can buy there and avoid the risk of being priced out in your dotage. But nowadays, who wants to tie down their future so specifically?

In the same way that home ownership is rather reckless for an individual, encouraging mass home ownership is reckless for a government. This was a strong argument made in The Economist. You create a massive voting bloc whose prime economic driver is house prices. No wonder all those subsidies emerge and are hard to remove! Zoning becomes a political hot potato, as the NIMBY class grows larger and more vocal. Then there are those who become excluded. I don’t think my mum would have been able to help me climb onto that first rung if the price had been 400,000 pounds. Even more dangerous becomes the asset class that is mortgages, then subprime mortgages and derivatives of subprime mortgages. When that (inevitably) collapses, it affects not just greedy bankers but ill-advised first time buyers as well; families become trapped and blighted.

Mass home ownership is also a constraint to economic and social mobility, because it is expensive to move, and maybe impossible in times of negative equity. The rooted become more rooted, and not for good reasons. Selling off the council estates was Margaret Thatcher’s most brilliant political move, but the long-term consequence is that families have become stuck and indebted: after all those estates were not generally in areas with desirable schools or growth industries or housing supply constraints, so prices have not leapt up like they have in Clapham South.

Because of our international moves, I have lived in rented accommodation for twenty-five years, and I’ve come to prefer it for its mobility and simplicity. It is important to have a large enough rental market in the area; New York’s is a dream, with lots of transparency and churn, and the city council are taking steps to reduce the power of parasitic middlemen even further.

According to The Economist, there is evidence that states that have maintained a lower share of home ownership have benefitted over the long term, for example Singapore over Hong Kong or Germany over France. It makes sense, because reducing friction in a major asset class must help mobility and make economic policy less of a hostage to a large voting bloc and to missteps.

One other interesting discussion in the Economist was over long-term trends. The modern trend towards agility and holding fewer assets and possessions indicates more renting, and even communal renting (sharing spaces like kitchens with neighbours). Mass car ownership led people to spacious suburbs where home ownership became the norm, but that trend is reversing, and autonomous vehicles may accelerate that further.

So there is a growing consensus around a set of policies that would reverse the drive towards greater home ownership, and those same policies would make home ownership a less good bet except in areas of long-term demand growth and supply constraint, such as Manhattan. It makes sense to remove subsidies, to invest to ensure quality schools, mass transit and community facilities everywhere, and to facilitate supply of new homes, including affordable ones, without creating new distortions like rent controls. Taxing property is more equitable than many other targets, while large landlords, developers and realtors need to be regulated carefully. Gently managing the supply side also applies on the way down, so for example the policy of reducing the footprint of Detroit is imaginative and smart.

The first flat in Clapham South worked well for me, so I admit it, Mum was right as usual. But advising my own offspring now indicates a different priority. Buying a house can be smart in an area of constrained supply, especially one where they can see themselves living far into the future. But there is also a strong case for renting and putting any spare cash into other assets, perhaps including a fund that tracks city property prices.  

Incompetence

The internet is full of conspiracy theories. When something goes wrong, I tend to reach the opposite conclusion – there has been a cock up.

The conclusion comes from years of experience. I have witnessed stunning incompetence and its consequences, time and again. I have also witnessed a few conspiracies, but these are few and far between. Unless certain conditions are in place, cock-ups are much more likely.

We are woefully qualified for many of the things we need to achieve in life. Most of us have little clue how to manage our personal finances. Even more basically, we try to achieve dating, sex, marriage and parenthood despite overwhelming incompetence for all these key skills. I look back at my lifetime performance in all of these areas and cringe in shame, and I have no reason to believe that I am much worse than the average in most of them.

It is worth trying to understand why we are so bad at these life skills, our primary purpose really if we want to perpetuate our species. We start we a big advantage, namely that evolution has honed our abilities over time. Wow, we would be even worse if it wasn’t for that large tailwind.

I am not sure if they form a good hierarchy, or are complete or not independent, but I have come up with five basic explanations for incompetence. The first is exclusion: the pool of people who get a chance to try stuff is too small and poorly selected. This one applies much less to all the relationship and procreation stuff, but looms large in business and politics. Until very recently, the only people deemed worthy to manage a country were the eldest sons of the ones who already did it. That is not a great selection process.

The second great impediment to competence is the absence of information and training. It is amazing that we receive a hundred pages about operating a dishwasher, yet we are made a boss or a husband and just have to do our best. Much of our education is largely irrelevant to real life. I studied for three years for a degree from which I don’t believe I have ever subsequently used anything learned.

The third impediment is dogma. Life is too complex not to make simplifying assumptions, but many of these become outdated and dangerous. A lot of dogma comes from religion. Now just how valuable was your religious upbringing when it came to dating, sex or marriage? There are some good principles in there somewhere, but shrouded in a lot of stuff that only harms us.

The fourth impediment is more technical; it is the whole morass of roles and motivations. In any endeavor involving multiple humans, there are likely to be unclear goals and roles, and a whole series of individual motivations. Even in a partnership between two, such as a marriage, this is a minefield. In a corporation of 100,000 employees, with shareholders, suppliers, regulators, customers and other stakeholders, what is achieved is a complex web that usually resembles incompetence.

The fifth impediment is what Harold MacMillan termed events. Beautifully aligned teams with clear roles usually collapse under the pressure of time or some crisis. Pressure can bring out the best in us, but usually it just demonstrates our crass incompetence. This can be comical – I have recently enjoyed binge watching the various series of Armando Iannucci, notably The Thick of It. I love this sort of British humour. The characters generally also support another of my experiences, that most of us are well meaning and doing our best, but that pressure leads us into unedifying places, and, once we have been there once, it is hard to escape. Most people who we are tempted to think of as evil are usually just normal people who have been caught out by incompetence and then get stuck.

This supports the wonderful Peter Principle, that people tend to rise to their level of incompetence. In many ways we should really celebrate this, because back in the days of impediment one, most people did not rise at all. But nowadays promotions are available (sometimes even to women, foreigners, Catholics and commoners), and we can climb until we fail, and then stop and make everybody else miserable. In business, I certainly did, across multiple dimensions, though a breakdown then offered me a route down the other side of the mountain that is closed to most.

Looking through the five impediments helps us understand how humanity has made so much progress in recent times. Exclusion is still strong (how many Papua New Guinea people run Fortune 500 companies?), but diminishing every year. Education and information have improved markedly, even if we have a long way to go. One of the strongest features of young people today is their willingness to ask and explore and to display their own vulnerability; Youtube is a wonderful thing. Dogma is still a major problem, in business, families, politics and everywhere, but much less so than fifty years ago.

We still struggle mightily with the fourth and fifth impediments. In many ways they have become worse. The penchant for flat organisations and the emphasis on agility, together with the decline of career loyalty, all beneficial in some ways, have made the daily life of many business managers almost unmanageable, with no downtime, endless e-mails and meetings, and a constant web of stakeholders and politics.

We reach our Peter Principle point more reliably now as a result. For me, my Achilles heels included lack of stamina and a tongue lacking control. I became tired and undisciplined. Unlike many, I loved the complexity and the line management, but they defeated me all the same.

I witnessed extreme examples of this modern type of incompetence in Shell. The worst was a mid career external hire, a lovely man but utterly unequipped to handle his role. All five curses were evident. He was selected quickly and narrowly, with a dogma that he had to come from a consumer company and to utter the word customer in every sentence, quite a feat I can tell you. This guy reminded me of Peter Sellers in Being There, another wonderful example of British comedy of the absurd. Once on seat, he lacked information he needed while being surrounded by information he could not process, was immediately a hostage to the motivations of others, whether benign or malicious, and destroyed by the mildest of crises. Still, he lasted six months because the senior manager who recruited him could not face the public ignominy of admitting his own failure.

Imagine being in the senior leadership team of a company like JC Penney, one of many on a doomed road marked by potholes. You were probably a good store manager, or more likely a buyer or designer. Because of that you were promoted to lead a huge dispersed team of such experts, something you hate and for which nobody trained you. You have to deal with an agenda of constant meetings with people in financial and other disciplines you do not understand, many recruited in panic or actively subverting whatever strategy exists, one that changes each time a new leader or banker appears with their hopeless dogma. This situation is not as uncommon as you might think, and slightly less exaggerated versions inhibit almost everybody once they progress beyond managing a simple business unit.

We should recall all this whenever we are tempted to assign conspiracies. Another example is the movie Vice, about Dick Cheney and the George W Bush administration. True, the piece has some villains, though mainly they are misled by dogma and some political greed. However, the overwhelming sense is of incompetence, with all five pitfalls in evidence. My guess is that when the dust settles on the Trump presidency and the intelligent histories are penned, it will likewise be the breath-taking incompetence that shines through.

What can we do? Well, in most situations we now have some sort of merit-based selection and plenty of information, when we care to find it. Over time society will become better at sorting the information to be more useful. Dogma is always dangerous, so individually we must challenge our assumptions and collectively listen to outliers such as whistle-blowers.

The challenges of roles, motivations and time pressure will not reduce any time soon. Individually, we are smart if we work out our limits and try to stick to them. Most of my most fulfilling experiences and ones where I was able to best use my strengths have been in challenges where these dimensions were rather controlled. I think I can administer a choir rather well. I can manage a team so long as the day to day pressure is limited and the role includes idea generation. I managed a post-merger integration rather well, because the politics and roles and goals were clear and shared.

Collectively, let us challenge these fads towards complexity in business and excessive control spans, and champion good line managers. Scale is good when there are machines, but usually a hindrance with people. Bet on companies that understand this.

But probably I have missed the point hopelessly. If I have, don’t suspect any conspiracy because you won’t find one. It will be just another of my many cock ups. 

Mortality in the USA

One of the most startling and under-reported trends over recent decades has been in US life expectancy. There has been remarkably little attempt to discover the root causes for the trend. If we knew the causes we might be able to reverse it, and other countries might be able to avoid the same declines – after all what happens in the US today often spreads around the world tomorrow.

The data are clear, albeit frustratingly limited. The only reliable comparisons I could find were with other OECD countries. In 1950, the USA was in the leading group for men and women, and whether measuring life expectancy at birth or at a later juncture. By 1990, the USA had slipped to the bottom of the pack. By 2010, a gap had opened up to make the US an outlier. And since then others have continued to move forward while the US has actually gone backwards – for three years in a row, for the first time in a hundred years. The trend is large and sustained, and robs a typical American of maybe five years of life compared with what might have been expected in 1950 (compared with others; in absolute terms life expectancy in the US has increased).

When I try to read up about causes, I find proximate answers and a few theories, but not enough analysis. The three proximate answers for the period since 2010 are obesity, opioid overdoses and suicide. All of these can and should be worked on, but there are also deeper root causes behind all of those symptoms.

Such analysis is not simple, which might start to explain why I can find so little of it; scientists don’t like such uncertainty in their papers. Such analysis that I do read is often hopelessly biased – for example starting with an all-encompassing hypothesis about a healthcare system, guns, race, and so on. So I am tempted to bring in my own experience, which does include living in the US and many of the stronger performers. But I have to recognise that my personal dataset is tiny and hopelessly biased as well, across many dimensions. Still, the question is so important that even biased hypotheses must be better than nothing; at least these can inform more research over time.

Obesity might be the most important factor, because it started to become a problem in the US around the time the trends turned negative, and remains much more prevalent there than anywhere else studied. But what are the root causes of US obesity?

The obvious place to start is diet, and the most obvious culprits are fizzy drinks, fast food and processed food. This leads us immediately to large corporations looking for high margins and locked- in customers. They have success lobbying lawmakers to permit unhealthy recipes, follow misleading marketing practices, and take advantage of poorer people in under-served neighbourhoods, including their schools.

Then we can expand into exercise. Here, we have a bifurcated society. In the US, a lot of people exercise furiously and work hard to maintain a body shape that is so healthy that it is actually unhealthy. They are always at the gym or on their Peloton or in their jogging shoes. Then there is everybody else, whose exercise consists of tiny walks between air-conditioned homes, cars, workplaces and malls. Some cannot afford a gym, others cannot offset their awful diet even if they try hard, and once somebody starts to fail the path to recovery becomes harder – exercise is really hard for fat people. It is telling that New York City is the least obese in the US. It is because we all exercise a bit in our daily lives, walking to the subway for example.

From diet and exercise we can expand into healthcare. Good healthcare can turn people around from a lifestyle prone to obesity. In the US, many have little access to affordable healthcare, while the rest of us are peddled a whole set of dodgy solutions designed mainly to offer profits to healthcare providers.

Are there root causes behind these root causes? People in the US moved from being under- to over-nourished within just a couple of generations, which predisposes obesity; this may be especially true of African-Americans. Then there is urban design; I tried to walk in Houston, but failed, owing to an absence of navigable sidewalks. People are now living in places with climates that don’t suit an outdoor life. We can also posit that long working hours and terrible childcare squeeze out time for cooking or mild exercise for all but the wealthy.

Drug overdoes, and specifically opioids, have overlapping and distinct causes. The most obvious culprits are the under-regulated pharmaceutical companies, egged on by lawmakers eyeing their lobbying dollars. The Sacklers deserve their comeuppance - it would be good if it were extended to all the lawmakers tainted by their money.

But why are people seeking so many painkillers in the first place? One cause might be obesity, and all of the root causes of it. But there might be other explanations, including stress from tough lives and unfulfilled expectations. It is striking how regional the opioid epidemic is, and most of the afflicted areas seem to be communities that have lost major employers and have a feeling of decline. With such a wide geography, the US is especially susceptible to creating such places, especially with local and state tax bases playing a bigger role than federal ones.

Suicide is even more prone to an analysis that stops at the proximate level. It is fair to look at the availability of guns and pills and the lack of societal support for those under extreme pressure. Addressing suicide success rates can surely help, because studies show that the urge to take one’s own life is often fleeting and may never return if once thwarted.

But how are there so many desperate people in the first place? And surely for everyone one person that attempts a suicide there must be a hundred who are depressed or otherwise seriously unfulfilled. A society with increasing rates of suicide must be hiding a lot of unhappiness.

Here we can circle back to inequality of opportunity, racial and other disparities, and also lifestyles with terrible childcare and few opportunities to recharge. We can add in social media, but the US is hardly unique in that one. But perhaps we have to cast the net even more widely?

There are many possible culprits; sadly the US is an OECD outlier in many areas, at the wrong end of the spectrum. Maternity deaths, road deaths, violent deaths, chemicals in the air or food, and incarceration all spring to mind. There is also the non-compliant spirit that came with the pioneers, which hampers vaccination programs and other civic benefits. But I have two personal favourite theories.

The first is the so-called American dream. The US is one of the most socially immobile rich countries, but the idea persists in the culture that you can achieve anything if you try hard and trust to God or some other benefactor. People watch LeBron on the TV and hear about his money, and somehow feel that such stories are widespread and can apply to them. Ambition can be a great thing, but this notion causes people to be reckless in their abandonment of common sense or studying and in their investments of time and money. When disappointment usually follows, lives can be easily ruined.

The second is serious debt. It is so easy to fall into debt here. The average family has eight credit cards – all opportunities to fall prey to debt. Commercials mislead and hide mountains of small print, and deferred payment is a universal marketing tactic. Peer pressure abounds. The financial sector holds many people captive, and such lives can easily spiral downwards.

The American mortality trend is important; it reverses a previous pattern and could be replicated elsewhere if the root causes are misidentified. It deserves more serious attention, not just a load of partisan theories (like some of mine), or bland scientific studies that essentially claim that people die because they stop breathing. It must be more complex than something like race, because that was just as much of a problem back in 1950 when the US was doing well. No doubt the science will catch up soon; I hope so, and will follow it with interest.

Earth's Shifting Centre

Over the New Year, I was lucky enough to spend an extended break in Dubai with my daughter and her husband. It was lovely to have all our kids together in one place for a week, a rare treat nowadays. It was a joyful time in every way, as well as a great opportunity to read, observe and reflect.

Dubai has truly become a global village. What I love the most about living in Queens is its stunning diversity – within fifteen miles I can find almost any culture or cuisine on the planet, and we are all tightly packed and creating new fusions all the time.

But I think Dubai has Queens beaten on the diversity front. Walking around the packed fountain outside the Burj Khalifa, I heard more languages and observed more skin tones and dress styles than I typically do in Queens, and somehow the blending seemed even stronger there than here. And I think the diversity is more complete and more representative. In Queens, we have everything, but with whiter and western cultures rather over-represented. In Dubai, the mix more accurately reflects the global population, with a lot more Chinese, Indians, other Asians and Africans than the pale skinned. Of the continents, only South America seemed less present, and, as any Riskplayer will tell you, South America has a smaller population than most other continents.

In Dubai, they have worked out what a Global Village they have, and, true to form, exploited it in the form of a recently opened huge leisure area that is actually called Global Village. Think of Disney’s “it’s a small world after all”, multiply it by a hundred, take away the US-centricity, add in shows and displays, and include stall after small of naked commercialism and you can picture the Global Village. The commercialism was jarring, but I had to admire the ambition and execution – it was a fine day out for young and old, rich and poor, and it was the commercial aspect that made it affordable.

I had been a bit taken aback by some attitudes of Americans when I said I was going to Dubai. There was a bit of “why would you want to go there” in some reactions, which I found a bit surprising. I could only assume that there had been some subtle putting down of the place in some shows or TV or just popular chat.

It was only after spending time in Dubai and thinking about it that I reached a hypothesis to explain the negative attitudes. Perhaps more than anywhere else, Dubai exposes the great US delusion that it is the centre of the world. Dubai does everything the US does, only better.

How tired I get when some lazy sports commentator in the US claims that the world is watching some minor game in a sport that nobody else even plays. How angry I get with Time magazine when they publish a list of the world’s 100 most influential people, claiming over half to be from the US. This same delusional arrogance extends to claims about Times Square neon and fireworks, or Las Vegas glamour.

Forget about it! All of those claims are humiliated by Dubai. It is larger, grander, smarter and cleaner in all dimensions. Everything is sparkling, functional and exciting. Our son is training as a civil engineer and I could see his eyes light up and his brain start to whirr: why should I spend the next forty years patching up tired infrastructure in the US when I could work in Dubai? It is a fair question.

I think that is why there is some denial about Dubai. It is OK to accept that London, Paris or Rome has the edge for culture, history or romance, but the American psyche still needs to own bigger and grander and gaudier. And such a claim is no longer tenable.

Of course, everything that Dubai is today is likely to be China tomorrow. China is developing fifty Dubai’s. While in Dubai, I read and Fareed Zakaria’s The Post American World, which only supported what I was observing with my own eyes in Dubai. The book felt a little dated even though it is only eight years old, and of course since then the US has taken all the responses suggested in the book and done precisely the opposite.

Dubai is still growing at an incredible speed. Everywhere you look in all directions you see cranes and construction. There is a cycle of supply over-responding to demand that leads to rebalancing every so often, and just now rents and occupancy are down because too much has been built too quickly, but there is no denying that the mid-term trend is for more growth.

It is the finest embodiment I have seen of the strategy of “build it and they will come”. At first blush, who would want to come to the boiling desert where nothing grows? Well, create infrastructure and attract commerce, and come they will, and keep coming. My daughter and son-in-law have a fine life there, and countless others can improve their prospects there too.

Dubai is an interesting case study in a human-envisioned paradise, having developed with few constraints or legacy. I am impressed by the urban planning and focus on leisure and communications. I am a little depressed by all the shopping malls, but then perhaps it is like Global Village; build it and they will come, but add in lots of advertising and commerce to make it affordable.

It would be good if Dubai could showcase the way forward in some new areas. I would love to see more care for the environment, and more in the way of education and culture (the Louvre in Abu Dhabi I a fine building with a reasonable collection, but hard to appreciate amidst the crowds of selfie-takers). 

An example of innovation could be in how the world uses unmanned vehicles. For me, they are a great opportunity to re-envision mass transit. Dubai has a fine metro system, but it has only two lines, so people choose to drive unless they live and work very near the stations. So why not have unmanned pods, on the ground or floating, doing milk rounds from the stations to nearby apartment blocks? It is feasible already, and Dubai has everything needed (space, technology etc.) to make it work.

Another way to look at Dubai is as a place only for the agile, in my agile-rooted model of humanity. Everybody goes to Dubai to make something more of their life and to provide for their families. It is hierarchical - Filippinos provide human services and Indians heavy construction work – and while conditions for those groups can be seen as exploitative, the net result is usually a better life than they came from with more opportunity.

A place with only agile tends to optimistic and forward-looking, and that is an important part of the economic model. There is little need for welfare, or elderly healthcare, because the old simply don’t live there. In Long Island it seems almost every business is about keeping old people alive. That is hardly an engine for development.

Finally, the Zakaria book and some time in Dubai pose questions about political models. It hardly warms a liberal heart to see giant posters of an unaccountable sheikh everywhere and to understand that criminality is low only because anybody can be deported, anytime. But we also must recognise that our liberal hearts are challenged in the west too, with politics for sale and rigged, failing markets. I am not sure we can claim anymore that our way is always best for development and innovation: the story of Dubai and the emerging story of China rather give the lie to those claims.

The centre of humanity is shifting, and it is exciting, and plain for all to see in places like Dubai. A China with twenty Dubai’s (and, one day, an India too) might seem a frightening prospect, but we might also see it as a wonderful one, if we learn to embrace it and help to shape it as benevolent supporters of humanity rather than sit bitterly on the sidelines with our denial, arrogance, military belligerence and pointless protection. I for one say – bring it on.   

Perspectives on the Military

One of the things that differs most in the various countries that I’ve lived in is the armed forces – their size, purpose, reputation and impact. I think these differences are rather revealing and carry lessons for humanity.

I was brought up in the UK, a large traditional military power, indeed one with an empire, albeit rapidly declining. The top brass are very much part of the establishment and retain sizeable influence, for example in the continuing MI5 inspired gibberish that makes its way into The Economist every so often. The military is considered a worthy career, and remains segregated, with most officers recruited from military families and the posh schools: I endured a series of military recruitment lectures at school and we were all forced into playing toy soldiers. As a matured, sadly the reality of the UK military became dominated by a hopeless endeavour in Northern Ireland. That latest humiliation has had the beneficial side effect of inducing some humility into military strategy.

In Sweden, the military was rather an oddity in this deeply pacifist non-NATO nation, and were almost an extension of the police as a civil defence corps, despite the proximity of Russia and the aggressive behaviour of its submarines. As a result, the police and the military became genuinely polite and service minded, never abusing power and with high female penetration before anybody else.

The Norwegians were more proud of their military history, so a military career was more popular there, with a strong bent towards guerrilla defence and external peace keeping. There remains a confidence that not even the Russians would find it easy to invade Norway.

With their scale, geography and history, the Dutch have no such confidence, merely a goal to be strong professional allies to its partners and in its global peace keeping role, where, like Norwegians, they more than pull their weight. It is an unusual career, and one more likely chosen by someone also considering an NGO than someone looking for combat.

No doubt my perception would be different if I had lived in a state where the military often runs the country, or where surveillance is common, or where there is a history of coups. Pakistan, Thailand and Russia come to mind, as does much of Africa. Sadly, China, which achieved much of its growth without resorting to excessive domestic intolerance, is rapidly sliding, as witnessed by the disgrace in XinJiang.

Then there is the US. Here the military is revered. Since 9/11, that reverence extends to what are called first responders, mainly meaning the service and police. It is taboo to criticise these institutions, or their members or veterans, whose image is one of courageous service to a free nation. It is a wonderful marketing coup, and I believe it is very damaging.

The military are major investors in TV advertising. Occasionally in the UK, there would be recruitment commercials, which are fair enough, but in the US it goes much further, a very questionable use of taxpayer money. The military are very smart in sponsoring a lot of sport, consumers of which are a good target audience for them. Sponsorship enables commercials and other brand benefits, and, whether spontaneous or ordered, that extends to endorsements by players and commentators. There may be a segment in an NFL game where a player thanks the military for defending our country and our freedom that makes our great game possible. Commentators spout the same stuff, just more frequently.

What rubbish! It is ridiculous to suggest that the NFL would not exist without the military. Ireland has no real military, but hurling and Gaelic football thrive. Soccer is strong even in Russia. Venezuelans are quite good at baseball.

I have no problem with the use of commercials to encourage recruitment. I have little problem with the branding of military people as driven by service, even though that is only marginally true; most join primarily for the superior pay, training and pensions. But I have a big problem with the relentless branding of the military as defenders of liberty and the American way of life, without whom everything would collapse. That is dangerous nonsense.

I believe a society with military attitudes and approaches is usually a worse society. There are several reasons and manifestations for this.

Most obviously, military spending crowds out other spending. The US invests 3.5% of GDP on its military, despite have almost no obvious threat to its shores (yet it still labels the spending defence and somehow we swallow it). True, some of the money goes on wages to people needing jobs, some on equipment that keeps other honest souls gainfully employed, and some on innovative research. But what an inefficient way to spend so much money! Imagine if the jobs were carers, the equipment on education and the research into health. Instead, much gets blown up on battlefields or spent treating unnecessary veteran illnesses.

Next, military decisions are usually bad ones. The track record of the uber-resourced US military since 1945 is truly lamentable, from Korea, Cuba, Vietnam, Iraq and Afghanistan. Shockingly awful policies have been executed terribly with disastrous consequences. They are always fighting the previous war with out-dated methods. If you include the CIA, the track record becomes even worse and immoral. We are led to believe that building ever more nuclear bombs has been the reason that we haven’t all been destroyed by nuclear bombs.

More subtly, military attitudes usually lead to bad places. The first step usually identifies enemies and the home team, to give a purpose for all the resources. Enemy threats are simplified and exaggerated, to the extent that we were led to believe that all Russians were evil. Military thinking always simplifies, and that is toxic when it comes to the home team. They overlook that borders are not fixed, that alliances can be subtle and change, and that personal loyalties are complex, as in the case of immigrants or a diaspora, not to mention white nationalists or homosexuals. Even a nation can be a fluid idea, but a military attitude hates ambiguity and encourages simplified boxes – almost always in a counter-productive way. Having defined friends and foes, a military mind set will set a goal of control, subservience or elimination rather than tolerance or inclusion or learning.

Next, military methods are usually suboptimal. Hierarchy and compliance are emphasised, priorities that encourage abuse of power, constrain innovation and are slow to recognise and embrace trends. It is a masculine way of thinking that might be good at putting out a fire but certainly doesn’t promote diversity or humanity or challenging shibboleths.

The military approach pervades the rest of society. Nations with a military attitude elect generals as political leaders, usually disastrously. An over-strong military can lead to an over-equipped and intolerant police force. Criminal justice policy can become austere. Trade can be viewed suspiciously. There is a habit of declaring war on all sorts of threats like drugs and doing much harm as a direct result. And majoritarian nationalism can flourish in such environments. All these weaknesses are evident in the USA.

I believe history supports my thesis that military is usually bad, notwithstanding what we are all taught about World War II. Just one example - Hilary Mantel displays the genius of Cromwell as somebody putting trade above war. If you look at nations that have punched above or below their weight over the last 50 years, the degree of military attitude feels like a correlating factor – just consider Singapore or Pakistan, Canada or Saudi Arabia.

So when Trump and NATO bang on about increasing defence spending I am a serious sceptic. Since 1960, global military spending has roughly halved as a share of GDP, and that has contributed to an age of rapid development. It would be a disaster if that trend reversed, but sadly that outcome is all too likely.

Still, at least we’ll be safe if we keep building lots more nuclear weapons. Perhaps.

I wish a joyful Christmas and peaceful 2020 to everybody.

Three Strikes and you are out

The polarisation is so deep in US society that I rarely meet anybody who might consider voting for Trump in 2020. True, one doesn’t brooch the subject of politics in polite society, so I might miss a few lurking MAGA’s hiding in plain sight. But I don’t think there are all that many. This is one of many factors that entrench that same polarisation, because we are not exposed to the other view even if we try to find it. Liberal periodicals are full of articles of brave journalists venturing to middle America earnestly trying to find out what (beyond lazy assumptions about racism) might fuel the other team: few resulting pieces read convincingly to me. I fear the other side don’t even look very hard, because they see liberal bias in everything they despise about establishment culture, and use that as fuel to become yet more stubborn.

I fully acknowledge that I am guilty of my own prejudice in the way I framed that last paragraph. My team are right, yet earnest and accommodating, while the other team just have their heads buried in the sand. They no doubt think the same of me. Such is our predicament.

Still, I tried an experiment of working out how I might use precious moments with someone who might actually be a possible Trump voter but might listen to me. These people might exist; actually I think I know one of them. My theory is that if meet Trumpers we tend to waste our opportunity, because we immediately display disrespect for them and lose our ability to articulate, such is our overwhelming disgust at the litany of the man’s sins. So out spews an incoherent mess that could be summarised as “it’s obvious, you cretin”. Strangely enough, that probably does not help to swing this poor waverer into my column.

So here is the elevator speech. I think there are three strikes. Take them together and the man should be voted out without any balancing consideration.

The first strike is the climate emergency. Isn’t it obvious by now that this is a slow moving wreck for humanity? OK, so the science is confusing and has a wide range of error, and environmental activists can be a bit of a pain in the butt with their cries for us to return to caves and subsistence living (all the time enjoying their comfortably central heated first world lives made possible by fossil fuels). True, if my Michigan factory has just been taken over by some Chinese who have laid most folk off and removed benefits from everybody else, I might have more pressing concerns. True, every politician equivocates and accepts messy compromises and lies and poses and generally fails when it comes to climate leadership.

But Trump is in a category of his own. He is actively stoking the crisis, and doing it brazenly just to spite his elitist enemies. Withdrawing from Paris may have been largely symbolic, but, wow, what a symbol. It might have been just about tenable as a negotiating ploy, if followed up by any sort of negotiation to amend the deal. Instead, we have climate erased from the website, non-participation in any discussion of the subject, and subsidies for coal, condemning his own supporters to early deaths and everybody else’s kids to a constrained life and possibly worse.

We are all a little bit guilty here. Intelligent people still refer to the climate crisis as an afterthought or as one item halfway down a list, rather than the emergency it is becoming. If I had a vote this week in the UK, I would vote green, unless I could be persuaded that my vote might tactically swing a marginal race. Isn’t it time that more of us took this line? But even if we don’t go that far yet, we can’t in all consciousness accept a leader who actively feeds that crisis. Surely that is the big picture in 2020, and any stuff about stock markets and China and abortion shouldn’t obscure that big picture? Strike one.

Strike two is the mess that is US foreign policy. All of the risks to Americans (and everybody else) have become graver as a direct result of Trump, with absolutely nothing on the positive side of the ledger. Start with the underreported story of nuclear proliferation, especially with Russia. Treaties have been left to rot, with the obvious consequences of loss of trust and proliferation. Of course Russia cheats and must be stood up to, but it is a dereliction of duty to just complain, then shrug, then walk away and spend. That only leads to accidents and eventual crisis.

Then look at everywhere else there are nuclear weapons. The Iran policy has only strengthened Iran (and Lockheed Martin’s sales to the paragon that is Saudi Arabia), the North Korea so-called policy has just encouraged the boy, and strengthened China, and the India policy has rekindled Kashmir and made war with Pakistan more likely. These are not mere human rights disasters; these are direct threats to world peace. Bullying Europeans into buying more weapons will only make matters worse.

Then there is China itself. I hear people say that it is good to stand up to China. Well, that is true, China is rising and leaders need to find a way to accommodate that safely and justly. China’s actions in Xinjiang are despicable, and its trade behaviour required moderation. But what has Trump achieved, in three whole years? The answer is nothing but destroying trust, reducing prosperity for everyone, enabling human rights abuse and reducing the long-term competitiveness of the US. For three years we have had posturing and threat but no proposal and no progress. My guess is that there will be much-trumpeted deal during 2020, timed for electoral effect, but that it will not address any of the structural issues, simply requiring China to buy more US stuff. Meanwhile, China builds influence through belt and road and an independent lead in next generation technology. Strike two.

Strike three is probity. This is about the standing of the presidency and key institutions, their ability to earn respect in the world and to maintain democracy and justice against periodic threats. It also relates to wider society, in establishing norms of decent behaviour.

It is fun and even fair to elect somebody who challenges the establishment, is blunt and occasionally disrespectful and who upends conventional wisdom. Elites can be smug. But Trump is a wrecking ball, one that ultimately damages everything he touches. Even among ardent supporters, few would deny that he bullied Ukraine towards a partisan goal, that he has openly demeaned women, that he pays scant regard to truth, that he blows his dog whistle cynically, that he undermines congress by blocking subpoenas, that he has multiple financial irregularities, that he uses key meetings as photo opportunities, and much else.

Institutions can withstand such an assault, with good luck, for four years, and might even emerge reinvigorated. But to risk four more years would be reckless in the extreme. We can all see it. Strike three.

So those are my arguments. I will try to avoid getting into the weeds of other areas, despite all the evidence and temptations. Healthcare, gun control, inequality, and all the departments with no competence and less policy are open targets. But perhaps then the discussion would get ambushed into risks relating to Elizabeth Warren or abortion or something about the stock market.

It is better to stick to the big picture. What are presidents for? Where do they have lasting influence? They must lead in the face of generational issues, they must conduct a sound foreign policy and they must defend the very institution they have been elected to lead. Nobody can realistically defend Trump in any of these three areas, and these are the areas that ultimately matter.

Would any of this speech work, even were I to get a chance to engage in a serious conversation with somebody leaning towards re-electing the man? I doubt it. Nobody wants to listen to someone so obviously representing the smug elite, and foreign to boot. But I have tried. I am ready.      

Home Field Advantage and other Lazy Assumptions

An amazing thing happened in the baseball World Series finals this year. The amazing thing was not that the Americans finally worked out that World Series is a ridiculous title for a tournament with just one token Canadian team playing in a sport that nobody out of the US, northern Latin America and Japan and Korea have any knowledge of. No, that lazy assumption persists. The amazing thing was that the away team won all seven matches. In over 1000 play off series, that had never happened before.

I would like to claim that the amazing thing is that most pundits thought this was amazing. Because home field advantage in most sports has been vanishing before our eyes, while we still make the lazy assumption that it is a large factor.

Here is a bit more evidence. In the NBA finals, the away team won five of the six games. In the NHL finals, five of the seven games went to the visitors. This year in the NFL, the home team has won just 53% of games, with 100 home wins and 90 away wins.

Soccer has a similar tale to tell. Here, I managed to find some historical comparisons. In the last thirty years, home wins in the premier league have declined on average from about 52% to about 42%. Thirty years ago, a home win was about 25% more likely than an away win, but now it is less than 10% more likely. A hundred years ago, home teams won over 65% of games.

It is not too difficult to identify several possible causes for the collapse of home field advantage. Many of the reasons that home advantage used to be significant have been offset in one way or another.

Playing at home was traditionally an advantage for a number of reasons. One was a home crowd that could gee up the home team while intimidating the away team. This can be intensely practical: in the NFL, a home team will enjoy a silent stadium when on offence, allowing for voice signals, but the crowd makes a din while the away team is on offence to make such signals impossible.

Then there are peculiarities of the venue. Even in soccer, where the pitch dimensions are rather uniform, Lee Dixon claimed it helped to know exactly where he was on the pitch by such things as advertising hoardings. In baseball, the field itself has strange dimensions and odd corners that must favour those familiar with it. It is more extreme in cricket, in which the home team actually prepares the pitch to suit their own team. I remember a game in the 1970’s when England prepared a pitch for Derek Underwood that was so biased that the opposition declared on 130-9. That is another lazy assumption – that the English are fair players.

Then there is preparation. In the NFL, it is always claimed to be a disadvantage to west coast teams to play one o’clock games on the east coast, effectively ten in the morning for their bodies, after a long flight. The travel itself takes up a chunk of possible training time. It is noticeable that home teams tend to win NFL games played on Thursdays, when the ratio of preparation time between the two teams would be most extreme.

Travel carries other risks. Players might not be so disciplined. Sleeping in a strange bed is always tougher for the first night. And then there is skulduggery. It wasn’t long ago that most of an England rugby team mysteriously acquired food poisoning just before playing South Africa away in a world cup game, and hotel fire alarms have a weird tendency of waking up visitors in the middle of the night.

Examining all of these partial causes of home advantage in turn, it is possible to see how that advantage has eroded over time. Most important is money and conditioning. Nowadays, teams have the resources to travel in style and stay in luxury facilities. Training and conditioning routines have matured so that teams can be made ready to produce peak performance at the time of the match. Regulations are better, skulduggery is harder, and pitch conditions are better and more uniform. Home advantage may have flipped, because trainers and medical staff can keep closer tabs on their players when on the road.

The crowd is still partisan, but not as it once was. At English soccer games, the away fans are often the most vocal, while many of the home supporters are either silent, or absent in the hospitality areas, or actively barracking their own team. How anybody can play well in Chicago, New York or Philadelphia escapes me, and indeed those cities often get the teams they deserve.

There is a tactical element as well. In soccer, attacking used to be more productive a strategy, and the home team is still expected to commit more players forwards. But for many teams now playing without the ball has become the most effective way to win. Leicester were brilliant trail blazers for this strategy when they won the league despite having the least possession in the whole division. They just soaked up pressure with men behind the ball and counter-attacked at pace when the opportunity arose. Most teams play a variety of this strategy now, but at home their fans expect more aggression.

As a result, playing at home can be a positive disadvantage, especially when teams are struggling. My own team, West ham, have been in a terrible slump, and it did not surprise me that the rare good result recently came in an away game against a good team, when they did not try to dominate possession. Being away also took pressure of players who had been sensing the intolerance of fans at home.

This all explains why home field advantage has been eroded. It also explains the situations where it is still strongest, for example midweek NFL games, or games very long distance travel to places with poor facilities like Russia (and also that teams often struggle in the games in short weeks immediately after such ventures). Home advantage still also persists when there is less money sloshing about and in less mature sports and events – it did not surprise me that Spain won the recent tennis Davis Cup at home, helped by a new tournament format with lots of quirks.

I find the persistence among pundits in failing to recognise a changing world instructive, because the same tendency exists elsewhere. We are often slow to recognise changing circumstances and too slow to challenge our assumptions. In soccer, the mantra of possession took the glaring counter example of Leicester to influence coaches. The power of statistics in baseball only became accepted once Oakland and others had demonstrated its effectiveness – this trend still has further to run.

What about outside of sports? Nobody expected the right wing of politics to move from the rich to the poor until Donald Trump and others came along, and in the current UK election old assumptions still colour commentary and even party tactics. An impeachment trial of public opinion was expected to move in decisive bands and based on facts, but nowadays everybody gets their news from their own bubble so new tactics are required.

In business, I believe that the advantages of scale have shifted. Scale used to be about production and distribution efficiency, but that has no value in most service industries, while network effects of communication and customer habit have become important. In most management situations, I believe scale is a positive disadvantage, since it works against agility.

What about warfare? The US always seems to be one war late when it comes to tactics. Last week’s Economist essentially torpedoed the value proposition of Aircraft Carriers, but still most powers want to build them, rather than spend somewhere more effective.

Assumptions die slowly, and we can all benefit from challenging the assumptions in our lives, whether we are a sports coach or a politician or just somebody trying to be a better parent. A good way to start a challenge is identify what factors cause an assumption to be true or false, and then examine trends that might influence those factors.