The six percent curse

I’ve been looking for root causes of the economic challenges facing the world. My answer is the assumed real return on capital, a risk adjusted 6%.

One of the main changes in global economics over the last forty years or so is how most capital now acts as one large pool. Beforehand, capital was a bit sticky, and it also flowed within many small pools. Moving capital between the pools was costly and often prohibited by capital controls. Only the very well connected could achieve it, people such as dictators, who became very rich indeed.

But now all that has changed. Capital controls have largely vanished, except in places like Venezuela, and to an extent in China. Technology has spawned a plethora of financial products to speed things along. And most investors have mingled together into a single mass, facilitated by banks, all looking to fish in the same pond. And more and more, investors include us: our pension, whether a company scheme or a 401K, forms part of the capital being invested.

To a large extent, the freeing up of global capital has been a good thing. Great projects can always find funding, including in the developing world. Innovative companies can improve everyone’s lives. Those dictators have a tougher time these days. Corporate bosses cannot get away with being lazy. Local bank managers can’t give loans to their cousins or golf buddies and ignore more deserving causes. Competition and scrutiny are everywhere, including on governments.

But a single pool of liquid, free to flow, must find a level, and that level has been 6% real for twenty years now, a level that has become a self-fulfilling prophecy. It is the big pension funds that set the level, for they need an assumption to balance their books. Now everything in the pool has to assume the same level, and most capital in the world is in the pool.

6% is a heroic rate by historic standards. Although the global population is growing at close to that rate, many richer nations now have declining and ageing populations that hold back growth. But 6% was set at a time of optimism. More cynically, banks and the US government were trying to promote 401K’s at the time (to benefit corporations and banks), and 6% made those seem more attractive.

The consequences of 6% have been huge. Most obviously, the rate builds in ever growing inequality. As Piketty claimed, usually r>g, and g, the natural real growth rate of production, now seems to be 2-3%. 6%, r, is the rate that capital, or existing wealth, grows. Summers’ theory of secular stagnation suggests that long term growth potential could be even less. So the rich get relatively richer compared with those without wealth. Without large compensating wealth, inheritance or property taxes, this cycle is set to continue, at least as long as r stays at 6%.

The next consequence is delusion, recklessness, bubbles and periodic crises. Anyone needing funds, so basically all of us, but especially companies, banks and governments, have to put forward a plan to achieve 6%. Meanwhile, the pension fund investors need to find plans that generate 6% to stay afloat. So everyone has a need to keep the plates spinning. So claims inflate, so does debt, and risks are overlooked as everyone crowds in. Then the bubble bursts; in the case of 2007-09 the asset class that collapsed was US housing debt. But such is the global dependence on the fiction of eternal 6% that governments chose to bail out banks, allow homeowners and jobholders to suffer, and even to make suffering worse by reducing their spending that was social rather than financial. After a while, the plates can spin again. We blame bankers, and the politicians in their pockets, but actually they had little choice, so long as the core assumption stayed unchanged.

The next consequence is starvation of investment. With a high discount rate, benefits in projects realised after more than 15 or 20 years count for little in financial evaluations. These tend to be the projects involving high up front capital or new technologies, and include things like roads and hospitals. It is no coincidence that infrastructure in developed nations has been hard to fund over the last fifty years. Projects such as social housing fit this category as well. The only people who can make such investments are in golden sectors like IT, where valuations can be sky-high, and in companies or places not reliant on debt financing. The most obvious example is China, and the Belt and Road initiative is the result.

While there are many factors behind the rise of populists, one root cause might be 6%. Mainstream social democratic parties have been sucked into the assumption, and been forced into policies to feed it and the class that benefits. Inequality rises, while poor citizens are lured into schemes built on inescapable debt. The rich spend less than the rest of us on average, so consumption overall is reduced over the mid term, a further argument towards secular stagnation. In this situation, someone promising escape while blaming foreigners has much appeal.

One other consequence of the flattening of global capital is the growing power of economic bullying. Trump does not need his mighty military as much as previous bullies, he can apply economic sanctions very easily, and with greater potency than before. In the long term the world will respond by stripping the US of its unique position as owner of the only reserve currency. At that point the US debt will leave the US itself at the mercy of China and other possible bullies.

If I am right, or even (more likely) somewhat right, and 6% is a root cause of so much damage, what can be done to reverse it? At first, this question seems simple, since it is just an assumption. Why not just change it to 4%?

This could be done, but it would instantly create another financial crisis. All invested wealth would suddenly be worth less. In particular, any pension fund or other fund that pays out in the future would immediately have an unmanageable deficit. That ropes in the largest investments, nearly all national governments, and cities, starting with those like Chicago and Detroit, where the most financially stressed regular people live.

Still, recognising the problem remains the first step to solving it, even if admitting it creates a crisis. That is the nature of such problems. The key is to have a solution to the crisis ready at the same time.

Short of solving the problem, some steps can help to reduce its effect. It is probably not of benefit to go back to a world of capital controls, but the water can be made stickier. Start with a Tobin tax, designed for exactly the purpose of slowing down the most speculative flows. Then reverse incentives for debt. As part of the plate spinning, many advanced economies have favoured debt, through measures like mortgage tax relief and other tax advantages.

Then take a deep breath and change the assumption, led by governments and mandating banks. But have the safety net ready, not for corporations but citizens caught up in the mess. That implies printing money for debt relief and pension shortfalls. It would be like the last bailout, but this time targeted to change the assumption rather than prop it up. Its effect would be like a short burst of high inflation – writing down almost all wealth. And, having reduced inequality at a stroke, the new assumption would mean it would only build up again more slowly.

Lastly, take the opportunities that the reduced assumption provides. States can categorise investments with social or longer-term payback, without falling into the traps of nationalisation or picking winners. It is simply using the extra leeway to steer capital to the benefit of society rather than bubbles.

Most likely, only another crisis will enable this shift to happen. Perhaps that is fair enough. But this time, if I am a little bit right, economists can be preparing for the crisis in advance, and use it for lasting benefit.  

Solving Economics

One of my few regrets is that I did not study economics at college. I was a bit of a maths prodigy so slid into that discipline, but I loved economics at school, and once I got to college I could still succeed at the maths but found little passion for it. So I flirted with changing, but ultimately stuck with the safe option. Who knows how things would have turned out, but a part of me still thinks I made a mistake.

I loved economics because it was live, empirical, unsolved, complex, but showed signs of being solvable, with a mixture of theory and experimentation. Since my school course in the 1970’s, text books have had to be re-written at least twice, and the discipline has learned a lot but arguably remains as far from lasting solutions as it ever was.

My guess is that this will change over the next twenty years. My belief is that there have been two big inhibitors to progress in the discipline.

The first has been in the nature of the subject: because so many variables are interacting all the time, and because most of these cannot be controlled (and others cannot be ethically controlled because they have too much influence on human well-being), the mass of available data has always had too much noise to be able to reach definitive conclusions. But this limitation might be vanishing, thanks to big data and machine learning. Economics is precisely the sort of field where this can help, and I believe the science will march forward as a result.

But economists will have to overcome the second limitation, that of lazy bias. Too many theories are set up to serve vested interests, usually the corporations and sponsors wishing to maintain their wealth. This had held up progress in many disciplines, for example healthcare and environmental knowledge, but in economics it has been everywhere, and politicisation of the subject has held back progress.

As an optimist, I am hopeful that once big data starts to make a difference, the political side will find it harder to resist more robust ideas. If The Economist is any guide (and I think it probably is) there are already promising signs. Over the last couple of years, the magazine has been more open to casting off tired shibboleths. Until recently, they thought that every problem in education could be solved by firing teachers, that trade was always good and that trade unions were always bad. Nowadays things are more nuanced, and the magazine also has a good new habit of posing open questions.

I would love to know more about the subject, to be able to understand more of the debates in the Economist and elsewhere and also to challenge and hone my own opinions. The complexity has increased with globalisation but so has the potential to create really robust models that can drive policy and progress.

Within the most recent edition, many articles were thought provoking and not dogmatic. The lead article looked at finance ten years after Lehman; the Britain section mused intelligently about low wage growth; there was a fascinating debate out why Turkey and Argentina seemed to be getting the same results from diametrically opposite policy stances, one of which the Economist would typically have lauded; and Larry Summers’ thoughts about secular stagnation were reopened. My hope and my guess is that in twenty years time all of these challenges will appear much more simple and open to attainable remedies.

One potentially useful tool in all of this is something that programmers, doctors and project managers use all the time; root cause analysis. A good example may be in understanding the causes of the Great Recession. It is too easy to blame the greed of bankers. I tend to agree that most bankers are greedy frauds; this week I enjoyed the movie The Big Short, which confirmed my bias but also set me thinking about possible deeper causes. Perhaps I will read Crashed, but yesterday in Barnes and Noble I flipped through its 600 pages and I am not sure my love for Economics goes that deep.

My pet root cause for much that goes on in the world of commerce and finance is 6% real. That has become the target rate of return for capital.

Fifty years ago, capital was managed in small pools. There were barriers to capital crossing borders. Individual firms could pursue their own strategies and goals. Governments could also mix policy objectives. Investors acted somewhat independently. Now all that has changed, and most of the world’s capital acts as one large pool. And like water it flowing downhill, capital seeks out its best risk-adjusted return. Any investment offering less than the average is starved.

This has happened because most barriers between states have been dismantled. Further, investors have merged towards a single block and have become tied up with governments. The largest investments are now pension funds, linked to regular citizens and of great interest to governments. Remaining investors have become like lemmings too, often using index-tracking funds, and, if not, getting data so frequently as to expose any portfolio offering below average returns.

In this environment, the financial world has become flat, and its level is at 6% real. Pension funds must assume a rate of return to balance actuarial inflows (today) with outflows (in many years time). At a time of boom, they chose 6%, and to change that now would require unaffordable write-downs. Governments would be on the hook for public sector funds and under pressure for private ones too. In a way, it is not that banks have become too big to fail; it is that almost the whole system has become too big to change its base assumption.

There are a few exceptions. Sovereign wealth funds could choose a lower target, though citizens might ask why. Privately held companies can also opt out, so long as they don't need to finance much debt. And governments can opt out too, choosing to impose capital controls and print money. Venezuela shows where that policy ends up. Argentina does too, as well as what happens when a country opts back in. Increasingly, there is no escape. One victim has been social democratic political parties, finding that in power, fiscal discipline constrains their actions, and then damages their brand and reduces trust among their possible voters.

Compared to historical averages, 6% real is a huge return to achieve sustainably. In one way, it has been good that the target is set so high, because it fosters innovation and hence human progress. Silicon Valley might have been less exciting if the 6% target had been lower. But the downside has been disastrous.

Companies have had to become reckless to continually produce plans to investors that flag 6% real returns. They diversify into risky financial products and pursue ambitious acquisitions. They rely on dodgy consultants and internal gurus and pay them far too much. They offshore and outsource. They sacrifice any thought for secondary goals such as fairness to customers, environment, legacy and workers – it is not callousness that has destroyed real wage growth, it is employer necessity. They buy back shares rather than investing, and especially avoid long-term, less certain investments. They pump up debt. Each quarter they announce earnings and a new plan to keep the plates in the air a little longer. If the plan is not deemed credible, they fire the CEO and find a better snake charmer. They also might collude, and certainly they lobby - even blackmail - governments fiercely to reduce regulation and corporate tax rates.

As a result, we have an economy permanently on steroids but filled with risk. Banks are just companies with even stronger steroids. Governments cannot escape either.

2007-8 is one obvious consequence. So is relentless growing inequality. There are other consequences as well, that I’ll look at next time I blog. Then I’ll also consider if there may be any paths out of the mess. 

Too little, too late

Consider this job description. The headline is a community counsellor. The responsibility is to be available to anyone within a defined boundary to offer comfort, advice, hope and suggestions. You are offered legitimacy in the role by the support of an international hierarchy of such counsellors, and by undertaking fixed rituals, including regular speeches. Those you are counselling come to believe that this backdrop gives you power to support and heal, to forgive and even to offer life after death. Your legitimacy is further boosted by some darker powers over anyone who does not follow some rules or your guidance. Pay and lodging is provided, and you will be well looked after even if you are unlikely to grow rich.

This is quite an interesting job description, is it not? Imagine it appearing in a local paper. Who might be interested? Who might turn out to be good at the role?

About who might be interested, on the plus side, they would likely be kind and have a benevolent wish to do good for others. The global hierarchy and the consequent possibilities for career advancement, despite that rather poor pay, might attract some of ambition, which might be good or bad. More risky is all that stuff about power – this might attract those with a need for control and who feared they might lack the skills to acquire it without the uniform or rituals.

As for who might be good, well the job would require massive patience, empathy, optimism and resilience. They must be good listeners. Some sort of psychology training would help. The empathy would be aided by a wide experience of life, suggesting people old enough to have such experience but not so old as to be out of touch. Ambition and control would need to be tempered – these people must lead through service. Like many caring and supporting jobs, on balance women might typically be better suited than men.

If might be tough, but if society decided to create such a role, maybe it could be filled by qualified candidates and do some good. But, sadly, there is more, none of it positive.

First, only men are accepted. Next, the training is long and theoretical and arduous and applicants must consider that the role is for life. The hierarchy is absolute, the doctrine restrictive, but there is almost no scrutiny from outside the hierarchy. Finally, no sex is permitted – no flirting, no masturbation, no sex at all.

Who will be interested now? Rather fewer people. And while they will still have a benevolent streak, they are far more likely to be motivated, at least in part, by the stuff about power, probably ladled with a strong fear of intimacy and the opposite sex. If recruited at thirty or below, they seem very likely to be under strong influence from a mother figure and to have some slow-developing and confused ideas abut sex and sexuality. As for whether this profile would turn out at good at the job, well, there will be some happy successes, but few would be able to overcome the handicap of lacking worldly experience, and for a minority the combination of power, absence of scrutiny and mixed up thoughts about sex could be highly dangerous.

Of course I have been trying to describe the job of Catholic priest, admittedly using corporate type language that those of a spiritual nature might dispute. But looking at it in this stripped-down, corporate way seems to me to go a long way to explain the mess the Church has got itself into, even its inevitability.

What surprises me about the most recent revelations is that anyone should be surprised. The lid was taken off this scandal years ago, and exposed further by wonderful movies such as Spotlight and Philomena. The Church responded as defensively as you would expect from an institution of such arrogance, wealth, vulnerability and freedom from external scrutiny. To its credit, it has put procedures in place to make a new generation of priests far less likely to fail.

But it was inevitable that more abuses from the past would come to light. Previous revelations required brave whistle-blowers to defeat entrenched positions so were sure to be only a tiny part of the story. Even now, there must be a lot more to follow. Why should Pennsylvania be unique? And think about a place like the Philippines, where all the temptations will have magnified and the scrutiny even less.

Only now have priests in the USA been allowed to publicly express their anger and shame, and it is to their credit that my local ones have been clear, and even cautiously proposed some controversial reforms. While I was impressed and moved by this statements, my overwhelming feeling was one of “too little, too late”. Where was the focus on victims ten years ago? Where was the urging for reform? Where was the condemnation of cover-up? It was all missing, following the lead of a callous and divided Vatican. Sadly, asking us to believe in these people to reform now is not really credible.

It is sad because the Catholic Church remains a force for good, perhaps the most effective global NGO and sometimes a stalwart for human values. Even on the values, the track record is blemished, both past and present; the Church can seem like a single-issue lobby group at times, following its prime source of money rather than its conscience. How can a Trump administration be tolerated by anyone grounded in the gospels?

So an institution providing hope and practical charity is perhaps holed below the waterline and beyond self-repair. The previous time a pope visited Ireland, 2.5 million souls turned out to greet him; last weekend the tally was 130,000. The current pope is clearly hemmed in by entrenched interests. Beyond prayer and personal advocacy, can anything be done?

I believe it is time for states to stand up to the unacceptable face of religion. Most religions have a dark side. Jews are taught to believe that they are God’s chosen people. Evangelical Christians are divisive and tribal. Radical Islam harms its own adherents, especially women, while preaching hate. Hindus perpetuate the caste system. Buddhists cheer on persecution of Rohingya. Nearly all religions hold back women’s rights, and gay rights.

The solution is obvious; end all legal carve-outs for religions. Already universal human rights declarations mandate religious tolerance. But most states actively or passively tolerate practices that would be illegal were they not based on religion. Most of the root causes of the Catholic mess would be eliminated, as would many dark effects of other religions. Yet charity, promoting respectful values, and non-abusive private rituals of hope and comfort would be supported and can continue.

The effect would be transformative. Obviously, the abuses would largely stop. But I suspect the main beneficiaries would be religions themselves. The Catholics cannot reform alone, but if forced to reform they could provide an attractive haven for recruits, both adherents and celebrants (of all genders, living healthy lives) . The same would be true of many other religions. And as individuals we would have less reason to hate others, while ignoring our own hypocrisies.

Will this happen? Not in my lifetime. But a quiet movement might create some valuable osmosis. If they are smart, reform-minded Catholics should be in the forefront. And because Christianity is the religion in most trouble and is the established religion of the rich world, perhaps that world might be able to lead.

In the meantime I will continue to attend mass and support my local churches and their leaders. I will continue to try to hold my own religion to the same human standards that I try to judge other religions by. And no doubt I will be saddened, but not remotely surprised, by the next torrent of human failing in the name of religion that hits the news.   

Has experience lost its value?

I have always thought experience was rather overvalued. I spent some time working in a German business environment, where it seemed that qualification and experience were everything, performance track record almost nothing. I saw the results – an intensely hierarchical workplace filled with snobbery, dead wood and underpaid youngsters.

It was not so different in the Netherlands, especially in technical fields.  I used to sit on a contracts board for a business that hired contract engineers. Often the specification would require a ridiculous period of experience in the field, such as twenty-five years. I used to wonder, aloud, what possible extra value that twenty-fifth year might have brought to make one candidate qualified and another not. I learned that it was often a ruse, akin to a closed shop, to make sure the same individuals were hired again and again. Some people didn’t like seeing me on that contracts board!

But then I could support an argument that, say, ten years of experience in a field might be a reasonable requirement. After all, a professional will not experience all the possible situations very often, and certainly not in a classroom. It takes someone of experience to recognize a rare situation and to react in an appropriate and measured way.

But even ten years of experience in a narrow field can raise red flags. How have methods changed since the person was trained, and has he or she kept up to date? Have they become stale or jaundiced, or make lazy assumptions? How well will they respond to authority, and to unusual team environments?

As so often, we can find some good examples from the world of sport. Among players, experience is noticeable in someone who is calm, who intuitively reacts to a situation before it matures, and who avoids rash mistakes. Sadly for professional athletes, that advantage is all too quickly outweighed by physical limitations. Notice how the most influential player in the recent soccer world cup was Mbappe, a raw nineteen-year-old with electrifying pace.

Soccer managers have a longer life cycle, but even here experience is not everything. Look at poor old Arsene Wenger, twenty-two years in the same job and plainly overmatched for the last third of his reign. Ferguson did not suffer the same fate – perhaps he was more prepared to update his skills and methods, and perhaps, for all his cussedness, he was a better delegator.

Jose Mourinho is another example. Arguably his methods have become less outdated than Wenger’s, but there is a problem with his attitude. He was always arrogant, but experience has made him intolerably so, at a time when relations between coach and player have changed. And he has become stale. Manchester United should cut their losses as soon as possible.

Then again, it is rare that a first time manager is immediately successful. They need experience. Without it they make mistakes, fail to see trends and struggle to build up respect.

So, experience has value, up to a point, and a degree of experience is a requirement for success. What I am wondering is whether the value of experience compared with other attributes is less than it was before, and whether the required degree of experience has reduced.

I came to this thought by considering choir conductors. I have had the benefit of working with several in recent years, and have been involved in some conductor searches as well. I believe I have noticed some trends.

Firstly, the overall standard has massively improved. When I think of the conductors I worked with ten years ago, their flaws are obvious. Nowadays, nearly everyone is technically strong. There is a range, but the low, median and high points of the range have all gone up.

But the other trend might be more surprising. Most of the best conductors I work with nowadays seem also to be the least experienced, so long as they have had a full training and at least a year or so working on the human side. This contrasts with just five years ago. I remember a particular conductor search. There were some tired candidates who had not kept up with modern methods. But there were also many held back by lack of experience, rather raw, just as rookie soccer players can be – locked into one or two dominant methods, afraid to improvise, prone to errors and immature with leading elders. This seems to have changed with the next cohort, many of whom exhibit none of those weaknesses.

So why might that be? I can think of several reasons, many of which feel compelling to me. College teachers have improved. This may be because they can use smarter tools, explore what works and learn from peers around the world, all supported by video and audio technology. Their pupils can learn more quickly, mainly because their opportunity to practice and get feedback has exploded because of the same media. Perhaps both groups have also improved their relationship skills – there may be less hierarchy and fewer dogmatic approaches, as well as greater curiosity and respect and ability to assimilate feedback. All of this will apply after college as well. The developing conductor can travel to observe more, can use youtube to observe themselves and others, and practice in more diverse situations. It is possible that we elders have improved as well, more ready to offer respect to a new generation.

Meanwhile, some conductors with experience can be shown up in comparison. Choristers needs have progressed, in repertoire and in rehearsal methods, and we have shorter attention spans and value technology aids. In this new environment, tried and trusted methods can suddenly appear rigid and less effective.

So the faster pace of change, improved teaching, and technology-assisted practical learning may have partially inverted the experience curve, or at least moved its tipping point. The emerging conductors can now develop more quickly, so that they can aim to be as effective in a year or two as their predecessors could be only after ten or more years of experience. And the value of those ten years may also be diminishing, as good practices change more quickly. I observe this every week; now I can start to understand what lies behind it.

But of course these trends are not restricted to the field of choir conducting, but affect almost any professional field. Whether it is surgeons requiring keyhole expertise, or engineers using internet-enabled instruments, or accountants challenged by globalization, most fields are changing quickly, while new cohorts have the opportunity to develop more rapidly. Such universal skills as research and line management have changed beyond recognition, and the kids are showing the way forward.

The consequences are exciting but unsettling too. Overall, progress will be quicker. But we can see how my generation is protecting its positions and how that slows progress down and creates conflict. Many countries still have labour laws and practices that leave people in charge who are no longer the optimal choices. Whole industries are losing out as a result – whose management team do you trust to win the war over self-driving cars, Ford’s or Google’s? Go even wider, and you can extend this to countries – Italy or China?

And when the next recession comes, as it will, and automation drives more holes into the model of regular employment, there will be social tensions. Still, overall we should celebrate; the inversion of the experience model only accelerates progress further. And I’ll continue my policy of looking out for younger conductors to work with.

Sickness Benefits

I’ve been operating at less than 100% for a whole month now. It is very frustrating, but I sense it is nearly over, and I have enough energy to learn a few lessons.

It started in Toronto. Perhaps because I got myself a bit sunburned, I picked up a cold-like bug somewhere with excessive air conditioning. It might have become worse on the plane home, but in any case it lingered, as summer bugs can with all that stale and recycled air. The Princeton choir festival became hard work, even though my vocal chords were more or less OK. The long drives, strange beds and required focus all took their toll. Perhaps because of all that, I ran awkwardly to get out of a rainstorm and tweaked a knee, and I am still favouring one side today as a result. That surely contributed to falling down the stairs a week later, bruising a rib and my tailbone and causing more lingering pain. All these things have healed slowly. The relentless humidity and consequent disturbed sleep will not have helped.

It could have been worse. I could sing at Princeton. I had poor control of some bodily functions there, but was rescued by a spare pair of pants. I managed to leave my credit card at a restaurant and my phone somewhere else, but found both without consequences. The stairs were hard, but only a short block. I had a near mess driving home from Princeton, but hit nothing worse than a grass verge. Everything is healing.

Some of the lessons are rather obvious. Don’t sit too long in the sun. Recognise that everything takes longer to heal when you are a bit older, so don’t behave like a kid. Hold the handrail on staircases. Look after credit cards. Drive carefully. Get out of the city in summer. Make sure you have spare pants handy.

But there are somewhat deeper lessons too. First, it is not a coincidence that all these things followed from each other. One failure created vulnerability in other systems. It seems odd, but when you are sick, everything seems to go wrong more often. It becomes impossible to take something out of the fridge without a spillage, which then creates more work and more chance for things to go wrong. I found myself using extra care with everything, counting to ten often and going deliberately slowly. It is hard to break out of such a cycle.

All this gets into our heads. We get angry more easily. We become morose, and sometimes behave like victims or assign blame unreasonably. It feels like the cycle will only get worse and worse, which requires a conscious effort to respond with optimism and hope.

This positive attitude is one of things we need to work through times of sickness or vulnerability. Another one is help from others. Acts of kindness and love are such a relief. People not judging or complaining at least avoids making things worse.

That is where we can all learn the most from when we are sick. If we can remember how we feel when we are below par, it can help us deal with others when they are. This month has often reminded me of the two or three occasions when I have been really struggling to put one foot in front of the other, and of the critical help received during those times. I am lucky to be rarely sick. So that help can be me, whether at the local care home or supporting friends or simply being kind to people who need it. “Be kind”, said Henry James and others. Good advice indeed, and advice with the bonus that we always feel better when we are kind.

Such times also help me recall the role carers play in our society, and how carers are consistently undervalued, underpaid and under-rewarded. Give me a carer over a soldier any day.

Being sick also helped me reflect in a different way about the nature of human progress. For all of us, just getting through the day is hard, every single day. Whether it is dealing with pain, or managing relationships, or struggling through chores, or belittling ourselves to earn enough money, or handling mishaps, life is a road with many bumps.

When we are sick, we notice all those bumps rather more. It can stop us from devoting any of our energy onto things that might benefit others or society or lead to progress. If we are already vulnerable, being sick can lead us towards addiction, depression or even abuse or crime.

Now consider those for whom our sick day is like their regular day. That may be someone hungry, or in debt, or already addicted, or suffering abuse, or chronically disabled. If you think about it, that covers most of humanity. It is no wonder really that progress is so patchy, and driven only be a privileged minority, and that depression and abuse are so prevalent. If you can’t get through the day, and can’t see how things might improve, that becomes a likely outcome.

Perhaps 50 years ago, only 5% of us could devote maybe 5% of our energy, 5% of the time; to anything we might call progress. For the rest, there was no chance, and even for the lucky ones we needed a following wind. Conversely, for 20% of us had to devote at least 20% of energy 20% of the time fighting to avoid slipping into depression or another failing outcome.

Considering the whole of humanity, maybe those percentages were even less favourable. In the first batch, we could pretty well rule out India and Africa, as well as most women and most people over sixty.

Now, thanks to global progress on medicine, affluence, education and opportunity, both sets of percentages might have become 10%. If true, the impact on progress would have been to multiply its potential by 8, and the likelihood of the bad outcomes would have diminished by a factor of 8 as well. That is another way to explain the acceleration of progress described by Steven Pinker.

It also points a path forward. If the first group could become 20%, and the second one reduced to 5%, it would create two more eight-fold multipliers. Doesn’t that seem eminently achievable? Consider how China and other countries are taking millions out of poverty. Marvel at improvements in healthcare, not only saving lives but also offering a better quality of life. See how the next generation has a more useful education than the last, across more of the cohort. Understand that the recent drops in crime will only lead to further drops, as troubled districts pull themselves out of misery.

And what about more everyday advances? We all spend so much less of our lives shopping for groceries, or cooking, or waiting for home visits from utilities, or getting about, thanks to smartphones and google and all the other advances in technology. That percentage of our energy devoted to simply getting through our day has gone down, even though it seems we have replaced most of it with wasting time on facebook or games.

Luckily, I am rarely sick. I hate it, and I’m not a good patient, but I am blessed with kind people around me. I’m also blessed that sickness might take me out of the minority with energy to make progress, but there is plenty of margin before it risks pushing me to addiction or depression. It also has the benefit of letting me count my blessings, and also to count the blessings of a rapidly advancing world. Now, I just have to remember how it feels like to be sick for long enough that I can train myself to be more kind to others, more often. Oh, and never to forget those pants.          

Beware the Binary

I have come to be very wary of anything trying to sort items into definitive piles, especially human beings. Life is usually more nuanced than that, and binary sorting is at the root of many failures. As an individual though, it can be a promising strategy to try to work the cracks between binary-sorted groups.

The law often needs to set exact limits. It would make no sense to have a speed limit of “something near” 30mph, or to set an age of consent of “round about” 18, or to allow a “few” chemicals into food. We need baselines for many things, and binary sorting provides those baselines.

Even these cases are interesting though, and in an ideal world would allow for some nuance. Speed limits ought to take full account of prevailing road conditions, grooming of someone just above consent age by someone forty years older with power is plainly abuse, and as science progresses safe levels of chemicals can be adjusted. A good judge will take account of such nuances, and good law will enable that. “Three strikes and you are out” is not good law – and we can see the ramifications around the US penal system.

It is usually much more helpful to think of things as on a spectrum, especially when dealing with people. A classic example is sexuality. Two generations ago, people were considered either heterosexual or homosexual. Such a binary sorting had many implications, all of them bad. A binary sorting made it tempting for the law, and churches, to equate one sexuality with normality and the other with perversion. That led to persecution, and it also prevented any rational discourse. Kids and their parents grew up in fear and ignorance. Millions of people led unfulfilled lives in the closet, and coming out become a ritual of fear.

Let us not overlook how recently this all changed. I admitted to a group a couple of weeks ago that the first time a guy I knew as gay tried to hug me was less than twenty years ago, and my reaction was to recoil and attempt a nervous handshake. That is a legacy of binary sorting.

The key to moving forward was not changing the law, but of acknowledging sexuality as a spectrum, or even a series of spectra. We can be a- or bi- or many exotic combinations, and most of us have the potential to reside on different places on the spectrum depending on many factors. At a personal level, this helped everyone get away from the fear and shame and ignorance, and at a societal level it enabled us to move forwards. Young people nowadays don’t simply respect differences, but they are able to experiment in a bid to understand their own bodies. Well done David Beckham and the early metrosexuals, you did us all a great service.

Only recently did I start to understand that similar logic applies to gender itself. I had thought this to be a true a binary sorting, barring rare genetic special cases. But the whole flowering of modern gender types has shown this to be an ill-informed position, and slowly society learns to accept this and even to welcome it. Perhaps over time marriage can cease to be a binary sorting mechanism as well.

Another terrible example is the historic treatment of mental health. Based on sparse tests and arbitrary cut offs, people used to be condemned to a hopeless life, taken out of regular schools and often housed in prison-like conditions. This still happens in some countries, and was prevalent in the UK less than 50 years ago. And because it was a binary system, it made terrible mistakes and took too long to challenge.

Questions of race, nationality and citizenship are still fraught today; indeed they drive the ugly politics that we see in many countries. Living in New York, it all seems so out-dated. Most people nowadays are some combination of races, and in another generation it will be even more. An immigrant is a technical definition, binary yet confusing and arbitrary. Those who rail against immigrants should reflect that the Native Americans are probably the only ones with any sort of claim; yet are treated as harshly as ever. The Windrush debacle is a good example of where binary sorting leads. On citizenship, residence and tax residence, I struggle with forms every year and even lawyers and accountants are probably guessing. It all starts with binary sorting, admittedly some small part of it necessary, but all of it divisive and inhibiting of progress.

Binary thinking is not as directly harmful as binary sorting, but maybe just as dangerous. Just because I am a liberal (in the US sense) does not mean I blindly agree with all Democratic platforms. The attitude to trade, the obstruction of progress of some unions, the rejection of nuclear energy and the promotion of litigious behaviour are examples of bad policy. But in a polarised world, especially in countries with two main parties (i.e. a binary system), such thinking is not facilitated. Indeed, people appear almost blind to the failings of their own side these days, which partly explains how Trump can seem to ride lie after lie, calumny after calumny, without consequence. In a binary system, the winning strategy is to link the opponent with something your supporters can demonise – then they become blind to everything else.

Another example may be taxation policy. We have reached a point where we have sorted into a binary world of those who always seek to reduce tax, all the time, and those who always seek to solve societal problems with extra spending. The reality must be that each side is right some of the time, on some issues, and that the evidence may change over time.  

It is worse in foreign policy, with its weasel talk of allies and coalitions and enemies and “sponsors of state terrorism”. Time magazine last week had a disgraceful article on Iran, wholly lacking in nuance or evidence. This all starts with binary positions. It should be noted that in the same week Saudi Arabia slaughtered many innocent Yemenis and Israel passed what looks suspiciously like an apartheid law. In a binary world, such indiscretions are too easily overlooked. Of course, religion may have the most original sin when it comes to binary follies. Think heaven and hell, absolution and mortal sin, or infallible popes – no healthy starting points there.

Binary sorting exists throughout education and professions. Again, some is necessary: I would not like to be operated on by someone who thought they might be a doctor; and an education system should allow for specialisation and selection. But the tests of these systems are their flexibility and their practical limitations.

In Germany and the Netherlands, kids are sorted at 11 into streams that are mainly academic or mainly vocational. This has much merit. The world needs nurses and welders, and many of them don’t need to know the full academic background for their jobs, only to be good practitioners. But eleven is a very young age to make such a drastic sorting. It might be messy, but more blended classes, and more opportunities to move from one group to another would be more equitable and lead to stronger outcomes.

In England, we persist with something less obvious but equally limiting. Medicine at Cambridge and Oxford has almost no practical component at all. This originated because “gentlemen” were never supposed to get their hands dirty. But the result is longer qualification times, wasted talent and doctors who may be brainy but who should never be allowed near a patient. It also leads to false hierarchies, arrogance and resistance to change.

In business, I frequently found opportunity in mining the seams between specialisms. The most obvious example was finance. In most companies, finance is an island. People inside have their own qualifications, language, career paths and practices. People outside are given little opportunity to develop financial acumen, and are viewed with suspicion by finance insiders. The result is obvious. In reality, almost every business decision is better informed by financial acumen, and the rare person who is not a finance specialist but is finance-literate has huge value, which only increases with seniority. Think of a CEO who knows nothing of finance; and then one who knows nothing but finance. Sadly, both examples are all too common.

This is only the most obvious of many such chasms. Technical people with commercial acumen and operational people who can run a team well are two other rare gems. I found that it was often swimming against the tide to become such a person, but that the reward usually made it worthwhile. I often lacked a home base in my career, yet I also often found that I had unique perspectives of value.

Rejecting a binary world can be lonely and challenging. Simplicity and certainty are always nice to have. But nuance and innovation are not served well by binary systems, and nor is equity. We will be better individuals and create a better society if we make a habit of challenging the binary.        

Omnes Generationes

The rather pretentious title is Latin for “all generations”. It is a quote from the prayer of Mary in Luke’s gospel known as the Magnificat, a prayer that inspired much music over the years. And Omnes Generationes is the title and the entire text of my favourite movement of perhaps my favourite piece of music of all, Bach’s Magnificat.

And last week I was blessed with the chance of singing that movement again and again, in a fantastic choir with a great director, and then to perform it in Princeton along with another wonderful piece, the Requiem of Herbert Howells. Each time I am part of the Westminster Choir College summer choral festival I come away in awe and refreshed, somehow feeling like I have gate-crashed a really cool party.

Bach’s writing is always brilliant but also always meaningful in a religious sense. In this movement he is, as usual, glorifying the wonder of God and His endurance across all human generations. The movement is an exciting cacophony of choir and instrument parts running up and down in harmony, anchored by a phrase of four repeated notes that call out from within the texture.

Bach makes two separate points about God’s endurance. First, the repeated notes appear in different voice parts, but always on the keynote or important note of the scale, like a fanfare. Here he is announcing God’s endurance across the generations. After having established this, he then writes the repeating notes progressing up a scale, so each voice part is part of a mounting story. His message here is one of progress. Under God’s guidance, each subsequent generation can rise to greater heights than the one before. Musically, it is as exhilarating a piece as any I know.

So JS Bach is making precisely the same point as Steven Pinker. In Bach’s case it is inspired by God, and in his thoughts overseen by God. In Pinker’s case God only gets in the way. But both see the progression of humanity and glory in it.

Where better for me to better understand this optimism that at Princeton at the Choral Festival? For me the enduring memory of the week is the wonder of the emerging generations. In a choir of 60, there are usually only about four of us over 40 and the median age might be 28. And these folk are simply impressive.

I try to compare them to my peers at the same age and I see progress before my eyes. They are generally at ease in their own skin, they relate very easily with each other, but are respectful and curious. Increasingly they are proud individuals, pursuing their own tastes and passions without being overly concerned with what others may be thinking. And they are usually happy. This cohort is not representative; it is a rather privileged elite observed at an ideal time. But I can see similar features in all the groups of young people I find, and my comparator group is a privileged elite from an earlier generation.

One little exercise this year was to see if I could spot differences even within the short period of four years since I first visited the festival. I had to be careful, because often I was just noticing things that were always there but obscure to me before I had more familiarity of the group.

I think I see an improvement in musicianship even within four years. More of them are more natural musicians and conductors. Concepts that took a while to embed before now seem to be accepted immediately.

For sure, I see more originality. Each festival, we are asked to introduce ourselves via a short anecdote. I often fail to pick these up owing to my less than perfect hearing. But this year the stories I did hear well were remarkable for the variety of passions within the group, and the willingness of everyone to follow their own passion without heed of any societal expectation. This generation is specialising like none before it. You can even see it in how they dress – remember it was just 20 years ago that anyone not wearing identikit jeans was considered weird.

Linked to the originality, I see even more sexual freedom. There was always plenty of variety within the group; what is new is its growing openness and acceptance. On a less positive note, I observed an increase in obesity.

While it is hard and may be unreliable to look for change over four years, a longer timescale shows undeniable progress. Take the field of choral music.

Perhaps fifty years ago, there was little quality choral singing outside English cathedrals and Oxbridge colleges. The people leading the sound in these places had either inherited positions, or were posh kids who could sing. Usually they could not really conduct or teach. Kings Cambridge became a bit of an exception. But recordings were few and far between, and few took the trouble to develop practices or learn. It was a posh boys club.

In the USA and elsewhere, slowly people started travelling and realising there were different ways of doing things. In the USA, one man, Robert Shaw, brought discipline and practice to choir singing. He gathered a few disciples, but many of these lacked his talent or were poor conductors or coaches, so things developed, but slowly. Still, a qualification to conduct a choir was usually an ability to sing or conduct an orchestra or research music, none of which are particularly relevant.

At the same time, there was the explosion in communication and in research. We learned how Bach’s choirs and instruments might have sounded. It was instructive in Princeton; we were played a recording of Bach from the 1980’s that would be unimaginably staid today, even from a community choir. It was by Leonard Bernstein, so the problem was not raw talent but knowledge and choral practice.

Only in the last twenty years has the exploration of musical styles flourished, together with the development of professionally run courses, all spread by extensive communication. Students can record themselves now, on audio and video, and learn from thousands of examples from many countries. As a result, quality has exploded. I would go so far as to say that generally the most inspiring choir directors I work with nowadays are the younger ones; immediate training has overtaken experience in value.

This must be typical of many specialist fields, and it shows progress in action and accelerating. I can only be excited by how brilliant the students of the people I was at Princeton will become.

Yet progress can accelerate still further. Looking around me at Princeton, it was obvious how. As an arts specialism and one requiring some training at high school, white kids with rich parents dominated the Princeton choir, plus a few Asians. The faculty were all white and taught rather rigid methods in a similar style. Imagine if accessibility to education would develop so that in 20 years time the class would reflect society more evenly? Imagine the opportunity to create new styles by fusion with existing methods. We have moved beyond the posh kids of Oxbridge, but we haven’t reached full potential yet, far from it.

I will make one prediction though. No matter how fast progress accelerates, no matter what wonderful new compositions become available to us, Omnes Generationes will remain peerless. There will only ever be one Johann Sebastian Bach.