The 10,001 customer problem is one of my favourite models of reality. There are two reasons I like it. One is that it seems to work and be instructive. The second is that, to the best of my knowledge, I invented it. A bit of vanity can’t be helped occasionally.
The idea is that most people or organisations are trying to manage a very large number of small relationships, and a very small number of big relationships. Imagine you are a petrol station manager. You have thousands of customers buying fuel, and you have to try to satisfy each of them, to make them buy a bit more or come back more often. And you have one fuel supplier, say Shell. Now where should you focus your energies? If you can persuade Shell to give you a bit of extra credit, or some support with discounting, or some improvement to the station, it can be worth thousands. The 10,000 can be worth thousands too, collectively. But to maximise bang for buck, the smart owner focuses on Shell.
There are examples everywhere. If you are a salesman, you can either try to sell to 10,000 customers, or alternatively you can try to convince your boss to reduce your target or give you a reward anyway because he likes you or thinks you are trying hard. As British Gas, you can either offer superior customer service, or secure some monopoly concession from the regulator. If you are Shell, you can either try to squeeze a bit more value out of 30,000 petrol stations, or alternatively secure one juicy exploration deal. As a Tesco store manager, you can display your milk beautifully, promote and advertise milk skilfully, price milk cleverly – or just squeeze another penny off milk from the buying department.
In each case, the smart people choose the few important relationships over the many smaller ones. But look more carefully. In most cases, the enterprise would be better served if the focus was on the many small relationships. The few, big relationships are often internal, are often a zero-sum game, and rarely create value for the system. We want people to innovate and create customer value outwards, but their incentives usually drive them inwards instead.
There it is, the 10,001 customer problem. As with many problems, recognising it is the first step towards solving it. To solve it, make sure rewards for the 10,000 are as big as possible, and for the one as small as possible. In the first example above, Shell can make its supply contracts fair, transparent and demonstrably non-negotiable. The sales manager can make KPI’s for his sales force as objective as possible, and the review system as unbiased as possible. The Gas regulator can be truly independent and pro-competition. Shell can create a retail division with a role only to grow sales in stations. And Tesco can remove buying price from the KPI’s of the store managers.
In the latter two cases, Shell will still make sure its best people are doing deals in Qatar, and Tesco will have their best people as buyers, but the organisational division will at least ensure that the 10,000 are not ignored completely. For what good is oil from Qatar without any outlets to sell it? And what is the only true basis for Tesco to get better supply prices than the power from scale emanating from its selling excellence? This demonstrates the second weakness with focusing on large relationships – even when it is productive at first, it tends to be unsustainable.
In this week’s Economist, I read of a study with one of the best demonstrations of the 10,001 customer problem I have ever seen, in the finance and economics section, entitled Money and Politics, link http://www.economist.com/node/21531014. Someone has found a link between the amount of lobbying a firm does, relative to its size, and its share price performance. Believe it or not, the big lobbyers do better.
Isn’t this priceless? Firms indeed do better (in the short term) focusing on the one big relationship, in this case a regulator, than getting on with the boring business of caring for real customers. British Gas, keep up the crap service, you know the regulator is the real game in town. And, true to form, lobbying is internal and non-productive to the wider economy.
This study was from the US. It is no surprise the growth and innovation have slowed – companies are rewarded not for that, but instead for buying lunch for a congressman. I wonder if the correlation is as strong in Europe? My guess would be that is very high in Greece or Italy but lower in Holland or Sweden or Germany. Nellie Kroes as competition commissioner probably did more to foster European growth than any other individual – more power to her.
Russia and communist countries are built on the power of lobbying and patronage. This is arguably what ultimately makes the system uncompetitive and ultimately unsustainable. What about China? Once the demographic dividend has worked its way through, will the propensity for patronage kill their growth too?
Just like in a firm, a country can address the 10,001 customer problem too. Transparent, independent regulation. Keeping politicians out of the way. Tough anti-monopoly laws. Support for small businesses and plurality. Training in customer facing skills over political ones. Banning or heavily restricting lobbying, or pricing it out of the market? Taking the money out of politics.
This could be a winning business and industry policy. And, sorry Ed Miliband, it is the diametric opposite of what you were proposing last week, which would be a dream world for lobbyists. Wrong, wrong, wrong.
Thursday, October 6, 2011
Wednesday, October 5, 2011
Kohr Blimey
The Guardian weekly had some excellent articles this week about the global crisis. My favourite one was by Paul Kingsnorth, extolling the philosophy of Leopold Kohr, who he called the most important economist we had never heard of. Well said Paul, I had indeed never heard of him.
Kohr was an Austrian Jew who formed most of his theories during the Spanish civil war and then the second world war, and then published “The Breakdown of Nations”. He later one a sort of secondary Nobel Prize and became the inspiration for “Small is Beautiful” and other seminal works. Not a bad CV.
His simple theory is that size destroys. As soon as things grow beyond human scale, they have a tendency to become inefficient and dangerous. In the end, the concentration of power creates destruction. Simple. And easy to see how a Jew living through the Hitler era might reach such a conclusion.
I find the theory attractive as well. I have long argued that in my work life I have seen far more examples of diseconomy of scale than of economy of scale. The bigger the enterprise, the less well motivated the employees, the more vanilla the direction, and the slower the response. There is also the problem of layers of bureaucracy in place to manage internal things rather than do anything of value to customers.
I saw one result of this when I visited Shell in Manila this summer (just as a tourist really) and read all the internal communications I could find. Nowadays, companies like Shell run most of their operations continent-wide or even globally. I was a victim of the early stages of this process in Europe, and always found it destructive of value. Well, now I saw the end game. For this business segment, there were clearly no leaders in a place as small as the Philippines (a mere 90 million people), merely supervisors relaying instructions from some remote centre. And since those instructions had to apply to every conceivable market circumstance, they were utterly devoid of content. If you have ever played Bullshit Bingo this was the ultimate example. The business was exhorted to be world-leading, customer-focused, best-in-class, innovative, to delight its customers, and much else besides, without any real description of what the people were actually supposed to do.
Another example was in a study in the Economist last week, with an American survey about how staff viewed their companies. Whereas most bosses thought their firms were inclusive and modern, staff overwhelmingly described them as command and control. Part of this must be a result of the distance created by scale. Dilbert is still a pretty fair reflection of business life.
The most compelling theoretical argument in favour of Kohr is the classical curve of the evolution of the firm. A firm starts bubbling along the bottom of the graph, as it creates its products and infrastructure. Then there is a growth spurt, with clear focus and strong management, and market impact of the firm’s distinctiveness. Then follows maturity, with little unit growth, as the internal processes of the larger firm clog up the works, and also when a single manager can no longer run the place effectively. In the end comes decline, as competitors overtake the slumbering giant.
There it is, in all the economics text books. And if it true for the firm, it is likely to be true for a country, an army, or even a Church, for the same basic factors are in play. When the bullshit bingo starts, you know the decline is on the way.
What the theory does not prescribe is how long each phase is or how big the firm is before it hits its plateau, as this will be decided by factors like context, skills and product of the firm. Some can fly very high before declining. Very occasionally, a new management team can engineer a rebirth, for example at IBM.
The pattern is obvious with empires through the ages, from the Greeks and Romans through the British. Another article in the same Guardian Weekly argued that when we look back on the current crisis we will see it as the decline of the age of American hegemony. Of course, most writers on the Guardian disparage the US, so this might be more wishful thinking then prescient analysis, but the may be some truth in the claim. Certainly, the poor education, dysfunctional politics, and even the rampant obesity do not auger well for a strong US future.
Then it will be China’s turn, and one lesson from Kohr is to recognise that even that era will have an end. We read about these wonderful Chinese companies – be careful not to invest too late, as what goes up must come down, in the end.
I suspect most of us would find that our personal experiences back up Kohr. When have you been most productive? In a corporate army, or within a small team with shared belief and autonomy?
There are social policy implications too. If the police is seen as a distant controlling body, we might try to outsmart it. If it is the guy in the village who drinks with Dad, we’ll find it a bit easier to understand and comply. If we feel part of a community, family or otherwise, we are more likely to have a mentality of service and support. An argument for the big society?
And while we are on British politics, Kohr would certainly find plenty of fault with Ed Miliband’s nascent industrial policy. What guff that was, somehow thinking the state could pick winners and punish those with the wrong motivation. Create conditions for innovation, then get out of the way, is surely a better plan.
We can take Kohr a bit further, and takes a global perspective. Is bigness not just destroying the US, but humanity? The EU responds to its crisis with more integration, creating more bigness and sowing the seeds of accelerated destruction? In the next era, might the successor to the UN even go the same way? Is climate change a classical Kohr symptom of diseconomy of scale? A fan of the EU, this certainly challenges some of my core assumptions. Then there is global finance. Is it possible that the real problem is that it has become too big, too integrated?
The theory is good, but perhaps we need a bit more to explain the world. Communications must help learning, yet communications needs scale to work. I for one am happy I have the internet. Is it possible to make good infrastructure advances while promoting smallness? I am not sure.
Of course, the big problem with Kohr is what to do about it. He was a sort of early hippie, advocating city sized states and autonomous communities within them. He was realistic enough to understand that there was no likelihood of this actually happening. Human nature looks for consolidation of power, for single repeatable solutions, for joining a winning team. Most firms in the decline phase respond my making acquisitions and managing ever more globally. You don’t see the Catholic Church devolving power from the Vatican. Not many US politicians or citizens advocate breaking the country up.
But what we can do is challenge our own assumptions, and consider giving more support to those who argue in a different way. The current UK coalition government started with an admirable intent to devolve decision making to local and regional bodies. It has lost its way, as so often is the case, swayed by the lazy “postcode lottery” brigade. In companies, some people do advocate genuine empowerment and even some internal competition, and I always tried to support them. I love the management concept of getting out of the way. The motive of the UK Eurosceptics may be unpalatable, but perhaps different logic could support some of their conclusions.
Thank you, Paul Kingsnorth, for bringing a valid alternative view to my attention.
Kohr was an Austrian Jew who formed most of his theories during the Spanish civil war and then the second world war, and then published “The Breakdown of Nations”. He later one a sort of secondary Nobel Prize and became the inspiration for “Small is Beautiful” and other seminal works. Not a bad CV.
His simple theory is that size destroys. As soon as things grow beyond human scale, they have a tendency to become inefficient and dangerous. In the end, the concentration of power creates destruction. Simple. And easy to see how a Jew living through the Hitler era might reach such a conclusion.
I find the theory attractive as well. I have long argued that in my work life I have seen far more examples of diseconomy of scale than of economy of scale. The bigger the enterprise, the less well motivated the employees, the more vanilla the direction, and the slower the response. There is also the problem of layers of bureaucracy in place to manage internal things rather than do anything of value to customers.
I saw one result of this when I visited Shell in Manila this summer (just as a tourist really) and read all the internal communications I could find. Nowadays, companies like Shell run most of their operations continent-wide or even globally. I was a victim of the early stages of this process in Europe, and always found it destructive of value. Well, now I saw the end game. For this business segment, there were clearly no leaders in a place as small as the Philippines (a mere 90 million people), merely supervisors relaying instructions from some remote centre. And since those instructions had to apply to every conceivable market circumstance, they were utterly devoid of content. If you have ever played Bullshit Bingo this was the ultimate example. The business was exhorted to be world-leading, customer-focused, best-in-class, innovative, to delight its customers, and much else besides, without any real description of what the people were actually supposed to do.
Another example was in a study in the Economist last week, with an American survey about how staff viewed their companies. Whereas most bosses thought their firms were inclusive and modern, staff overwhelmingly described them as command and control. Part of this must be a result of the distance created by scale. Dilbert is still a pretty fair reflection of business life.
The most compelling theoretical argument in favour of Kohr is the classical curve of the evolution of the firm. A firm starts bubbling along the bottom of the graph, as it creates its products and infrastructure. Then there is a growth spurt, with clear focus and strong management, and market impact of the firm’s distinctiveness. Then follows maturity, with little unit growth, as the internal processes of the larger firm clog up the works, and also when a single manager can no longer run the place effectively. In the end comes decline, as competitors overtake the slumbering giant.
There it is, in all the economics text books. And if it true for the firm, it is likely to be true for a country, an army, or even a Church, for the same basic factors are in play. When the bullshit bingo starts, you know the decline is on the way.
What the theory does not prescribe is how long each phase is or how big the firm is before it hits its plateau, as this will be decided by factors like context, skills and product of the firm. Some can fly very high before declining. Very occasionally, a new management team can engineer a rebirth, for example at IBM.
The pattern is obvious with empires through the ages, from the Greeks and Romans through the British. Another article in the same Guardian Weekly argued that when we look back on the current crisis we will see it as the decline of the age of American hegemony. Of course, most writers on the Guardian disparage the US, so this might be more wishful thinking then prescient analysis, but the may be some truth in the claim. Certainly, the poor education, dysfunctional politics, and even the rampant obesity do not auger well for a strong US future.
Then it will be China’s turn, and one lesson from Kohr is to recognise that even that era will have an end. We read about these wonderful Chinese companies – be careful not to invest too late, as what goes up must come down, in the end.
I suspect most of us would find that our personal experiences back up Kohr. When have you been most productive? In a corporate army, or within a small team with shared belief and autonomy?
There are social policy implications too. If the police is seen as a distant controlling body, we might try to outsmart it. If it is the guy in the village who drinks with Dad, we’ll find it a bit easier to understand and comply. If we feel part of a community, family or otherwise, we are more likely to have a mentality of service and support. An argument for the big society?
And while we are on British politics, Kohr would certainly find plenty of fault with Ed Miliband’s nascent industrial policy. What guff that was, somehow thinking the state could pick winners and punish those with the wrong motivation. Create conditions for innovation, then get out of the way, is surely a better plan.
We can take Kohr a bit further, and takes a global perspective. Is bigness not just destroying the US, but humanity? The EU responds to its crisis with more integration, creating more bigness and sowing the seeds of accelerated destruction? In the next era, might the successor to the UN even go the same way? Is climate change a classical Kohr symptom of diseconomy of scale? A fan of the EU, this certainly challenges some of my core assumptions. Then there is global finance. Is it possible that the real problem is that it has become too big, too integrated?
The theory is good, but perhaps we need a bit more to explain the world. Communications must help learning, yet communications needs scale to work. I for one am happy I have the internet. Is it possible to make good infrastructure advances while promoting smallness? I am not sure.
Of course, the big problem with Kohr is what to do about it. He was a sort of early hippie, advocating city sized states and autonomous communities within them. He was realistic enough to understand that there was no likelihood of this actually happening. Human nature looks for consolidation of power, for single repeatable solutions, for joining a winning team. Most firms in the decline phase respond my making acquisitions and managing ever more globally. You don’t see the Catholic Church devolving power from the Vatican. Not many US politicians or citizens advocate breaking the country up.
But what we can do is challenge our own assumptions, and consider giving more support to those who argue in a different way. The current UK coalition government started with an admirable intent to devolve decision making to local and regional bodies. It has lost its way, as so often is the case, swayed by the lazy “postcode lottery” brigade. In companies, some people do advocate genuine empowerment and even some internal competition, and I always tried to support them. I love the management concept of getting out of the way. The motive of the UK Eurosceptics may be unpalatable, but perhaps different logic could support some of their conclusions.
Thank you, Paul Kingsnorth, for bringing a valid alternative view to my attention.
Thursday, September 22, 2011
Who needs God?
When do you feel good?
Studies are pretty consistent on this one, and my own feelings are in line with the studies. I feel good when somehow I can avoid worrying about things that are out of my control. I feel good when I make someone else feel good, maybe by forgiving them or complimenting them. I feel good when I am in the company of good friends that I respect. I feel good when I am achieving something for my fellow human being, albeit small. I feel good when I can find some peace and some love.
Now think about techniques to achieve these things.
To worry less, reminding oneself about how small we are is a good start. We control little. We understand little. Shit happens. Wonderful things happen too. If we can be nonchalant about the shit and really notice and celebrate the wonderful things then life is rosier. We could spend our lives hiding from possible shit, but we have been given the gift of a single life, and life is surely for living not for hiding. What we do with our lives is up to us. Counting our blessings is in our self-interest.
Making other people feel good is surprisingly easy, it just takes some courage and practice. Whenever we can put ourselves in the shoes of others, give them the benefit of the doubt, or start from a premise of wanting to understand them and help them, then we have more chance. Does this harm ourselves? Not usually. Of course, if we don’t defend our own interests at all, we might find ourselves without a job or a home or any money. But it surprising how rarely defending our own interests requires blocking someone else. And if we are good to others, amazingly, they start being good to us. The people who receive smiles and compliments and gifts are usually the ones who give them.
It also helps if we can learn to work against our prejudices. Everyone is different, but does that mean we can’t respect others unless they are like us? If we see life as some sort of zero sum game, where our tribe has to protect itself against the others or lose out, then we grow suspicious. But how often is that necessary?
Finding good friends can be hard. We have to develop our social skills. I read one study lately which claimed that 90% of education is about knowledge, getting a job, earning money and so on, while only 10% is about getting on with others. They argued it should be the other way around. Imagine that. The first class on Monday would be about lifetime partners and how to hold on to them. Then something about listening. Maths and history only on Friday afternoons. Not that silly a thought really. Of course, some of us are lucky enough to get our 90% social education from our parents. But not so many of us really.
One way to develop social skills and find friends is to throw ourselves into a club or community. It is even better if the others in the club or community are trying to follow the same ideas as us about being happy. Maybe the community can also be the vehicle for doing some good for fellow humans. Perhaps they can offer ways to serve, whether it is the disadvantaged or the lonely. We can use whatever energy we can find for this, recognising that sometimes we have to place our own friends and family and ourselves first.
Lastly there is peace. Become fatalistic about the ups and downs of life can help us get less stressed. There are also techniques available to us, like relaxation or meditation. We all know that when we can find time out of our busy lives to slow down our brains, then that helps us feel happier. So why don’t most of us do it?
Now look at the world’s religions. The basic core of most religions is very similar. If you examine what the holy books actually say rather than what the religious leaders actually preach, then it is even more so.
Most religions encourage us to be fatalistic. They express it a bit differently, by using a construct called God. God understands, so we shouldn’t worry ourselves. Usually there is more, stuff about us being more likely to get good results if we are good ourselves or believe this and that. But we don’t really need to believe any of that. Just recognising that we are small and usually ignorant and not in control is healthy and enough.
All religions encourage us to be good to our neighbours. Sometimes they limit this to other believers of the same religion, but again, they don’t usually stop us being good to others as well. And if we study the original teaching, we can usually find support for loving those of other faiths.
A religious community can be many things. But a good one will usually emphasise the techniques to make us happy, and also give us the forum to meet friends and to serve.
And all religions recommend meditation, usually called prayer. All religions emphasise time devoted to reflection, often supported by comforting rituals.
So, does religion make you happy? It seems like it has the potential too. And perhaps it is no coincidence that doctrines that have stood the test of time should help humanity.
But what about the other features of organised religion?
First, there is the credo, or belief system. That can be tricky if you don’t believe in afterlife, or reincarnation, or miraculous acts of prophets. But maybe you can treat these as symbols or metaphors. After all, over the years some former absolute beliefs have become rather watered down, the literal interpretation of Adam and Eve for one. It may seem wrong stating you believe something you don’t, but, if you join in but are private about what you really believe, you would not be alone in your Church. More, as you recite the prayers and creeds and take part in the rituals, you might ask yourself if you are really certain they are wrong. How can you be so sure?
Next, there is the politics of the Church itself. Sadly, the senior figures in most Churches appear to have been on the wrong side of history more often than not. Church leaders even encourage their members to go to war against other Churches. They are usually pretty cowardly in choosing what to condemn or ignore. And their attitudes, for example to women or contraception, may not be easy to swallow. But are you joining a community or a political party here? And even if it were a political party, maybe you would not agree with every policy. Perhaps you also work for a company whose ethical stances you find questionable? It is possible to be part of a group without agreeing with everything the group does.
Then, some religious communities place less emphasis on the values that make us happy than on other values. Conservative homilies about the good old days or the youth of today. Reference to sin and punishment rather than forgiveness and redemption. And many Church communities seem full of some of the least good role models for their own beliefs, with a lot of bitterness and rivalry. I would not want to join a community like that. But the good news is that local Church communities exist full of the joyful energy of happiness values. If you look, you might find one. I will go further – probably the organised community closest to you that best epitomises the values that can make you happy is a Church one.
So, this is a bit of a strange advert for joining a religious community. The content of this advert is unlikely to be the declared content of what your local Churches offer. But why not look a bit deeper below the surface? You might be surprised. And as a result you might end up happier.
Without any need for God.
Unless, of course, this is all what God intends for us after all. Who knows?
Studies are pretty consistent on this one, and my own feelings are in line with the studies. I feel good when somehow I can avoid worrying about things that are out of my control. I feel good when I make someone else feel good, maybe by forgiving them or complimenting them. I feel good when I am in the company of good friends that I respect. I feel good when I am achieving something for my fellow human being, albeit small. I feel good when I can find some peace and some love.
Now think about techniques to achieve these things.
To worry less, reminding oneself about how small we are is a good start. We control little. We understand little. Shit happens. Wonderful things happen too. If we can be nonchalant about the shit and really notice and celebrate the wonderful things then life is rosier. We could spend our lives hiding from possible shit, but we have been given the gift of a single life, and life is surely for living not for hiding. What we do with our lives is up to us. Counting our blessings is in our self-interest.
Making other people feel good is surprisingly easy, it just takes some courage and practice. Whenever we can put ourselves in the shoes of others, give them the benefit of the doubt, or start from a premise of wanting to understand them and help them, then we have more chance. Does this harm ourselves? Not usually. Of course, if we don’t defend our own interests at all, we might find ourselves without a job or a home or any money. But it surprising how rarely defending our own interests requires blocking someone else. And if we are good to others, amazingly, they start being good to us. The people who receive smiles and compliments and gifts are usually the ones who give them.
It also helps if we can learn to work against our prejudices. Everyone is different, but does that mean we can’t respect others unless they are like us? If we see life as some sort of zero sum game, where our tribe has to protect itself against the others or lose out, then we grow suspicious. But how often is that necessary?
Finding good friends can be hard. We have to develop our social skills. I read one study lately which claimed that 90% of education is about knowledge, getting a job, earning money and so on, while only 10% is about getting on with others. They argued it should be the other way around. Imagine that. The first class on Monday would be about lifetime partners and how to hold on to them. Then something about listening. Maths and history only on Friday afternoons. Not that silly a thought really. Of course, some of us are lucky enough to get our 90% social education from our parents. But not so many of us really.
One way to develop social skills and find friends is to throw ourselves into a club or community. It is even better if the others in the club or community are trying to follow the same ideas as us about being happy. Maybe the community can also be the vehicle for doing some good for fellow humans. Perhaps they can offer ways to serve, whether it is the disadvantaged or the lonely. We can use whatever energy we can find for this, recognising that sometimes we have to place our own friends and family and ourselves first.
Lastly there is peace. Become fatalistic about the ups and downs of life can help us get less stressed. There are also techniques available to us, like relaxation or meditation. We all know that when we can find time out of our busy lives to slow down our brains, then that helps us feel happier. So why don’t most of us do it?
Now look at the world’s religions. The basic core of most religions is very similar. If you examine what the holy books actually say rather than what the religious leaders actually preach, then it is even more so.
Most religions encourage us to be fatalistic. They express it a bit differently, by using a construct called God. God understands, so we shouldn’t worry ourselves. Usually there is more, stuff about us being more likely to get good results if we are good ourselves or believe this and that. But we don’t really need to believe any of that. Just recognising that we are small and usually ignorant and not in control is healthy and enough.
All religions encourage us to be good to our neighbours. Sometimes they limit this to other believers of the same religion, but again, they don’t usually stop us being good to others as well. And if we study the original teaching, we can usually find support for loving those of other faiths.
A religious community can be many things. But a good one will usually emphasise the techniques to make us happy, and also give us the forum to meet friends and to serve.
And all religions recommend meditation, usually called prayer. All religions emphasise time devoted to reflection, often supported by comforting rituals.
So, does religion make you happy? It seems like it has the potential too. And perhaps it is no coincidence that doctrines that have stood the test of time should help humanity.
But what about the other features of organised religion?
First, there is the credo, or belief system. That can be tricky if you don’t believe in afterlife, or reincarnation, or miraculous acts of prophets. But maybe you can treat these as symbols or metaphors. After all, over the years some former absolute beliefs have become rather watered down, the literal interpretation of Adam and Eve for one. It may seem wrong stating you believe something you don’t, but, if you join in but are private about what you really believe, you would not be alone in your Church. More, as you recite the prayers and creeds and take part in the rituals, you might ask yourself if you are really certain they are wrong. How can you be so sure?
Next, there is the politics of the Church itself. Sadly, the senior figures in most Churches appear to have been on the wrong side of history more often than not. Church leaders even encourage their members to go to war against other Churches. They are usually pretty cowardly in choosing what to condemn or ignore. And their attitudes, for example to women or contraception, may not be easy to swallow. But are you joining a community or a political party here? And even if it were a political party, maybe you would not agree with every policy. Perhaps you also work for a company whose ethical stances you find questionable? It is possible to be part of a group without agreeing with everything the group does.
Then, some religious communities place less emphasis on the values that make us happy than on other values. Conservative homilies about the good old days or the youth of today. Reference to sin and punishment rather than forgiveness and redemption. And many Church communities seem full of some of the least good role models for their own beliefs, with a lot of bitterness and rivalry. I would not want to join a community like that. But the good news is that local Church communities exist full of the joyful energy of happiness values. If you look, you might find one. I will go further – probably the organised community closest to you that best epitomises the values that can make you happy is a Church one.
So, this is a bit of a strange advert for joining a religious community. The content of this advert is unlikely to be the declared content of what your local Churches offer. But why not look a bit deeper below the surface? You might be surprised. And as a result you might end up happier.
Without any need for God.
Unless, of course, this is all what God intends for us after all. Who knows?
Monday, September 12, 2011
Riots and Housing
I was away from Europe during the English riots this summer, and didn’t really have much chance to follow their progress while they were going on.
One small advantage this affords is to be able to look at the media coverage after the event almost as a historian rather than as current affairs.
The main conclusion from this is that the media seemed to overreact. Even the blessed Economist included a number of articles claiming cathartic status for the riots. They were smart enough not to rush into trite analysis of causes, but they did seem to get swept away by the tide of excessive significance.
For, three weeks later, apart from the poor people directly affected who will have to painstakingly rebuild their lives, these riots don’t seem such a big story after all. Many places have frequent riots. A death tool of six would be a good week in Mexico City, or Rio, or Jo’burg, or Washington DC, and probably in Shanghai too if we knew the full truth. There have been riots in England before. It will do us English good next time there are riots in the Paris banlieux, perhaps we won’t be so smug about it.
Some things I have read have stuck in the memory. Private Eye dragged out some quotations from the 1981 riots. They were almost word for word what politicians and commentators are saying now. Lots of guff about loss of parental discipline, breakdown of family values, disadvantaged underclasses, and predictions of imminent doomsday.
There was a letter, also in Private Eye, from Northern Ireland, bemoaning that they suffer this stuff all the time yet the British press don’t care. It is a good point, but I guess that is what devolved government is for, to find local solutions for what are clearly local problems. A Scot also wrote in pointing out that descriptions of British riots were not accurate, since in truth they were all in England.
Then there are the politicians. Here, the Labour ones are on very thin ice bemoaning the way cutbacks have created an angry underclass. Surely these things take much more than a single year to simmer? And who has been in power for the thirteen years that these kids have been growing up?
But Tory are little better. As usual they mourn the loss of supposedly better times past, conveniently glossing over every statistic proving that beforehand there was even more poverty and family abuse. And the solution of punishment and more punishment is pretty thick. Bagehot wrote nicely to redeem the Economist a little when he/she argued that this was an English perennial solution dating back to colonial times – wish the troublemakers away. Where to, exactly? Penal colonies in Australia? Sorry, guys, these are our people, we can’t just make them vanish. I hope Ken Clarke sticks to his laudable justice principles during the coming weeks. Hooray for LibDems in government.
Myself, I think it is far more banal. Young men always have some urge to rebel, to make their mark in the world and show off to their peers. How they rebel is controlled by simple risk and reward. In the old days, eternal damnation was a deterrent from the Church, and tighter families also created deterrence, in good ways and bad ones. On the reward side, social media have made things easier – if you learn that a shop is ready to loot and all you have to do is join the crowd, then it is more tempting. Risk of sanction by the state is always limited, especially for kids with limited assets and prospects.
If we accept the banal explanation, responses can be more piecemeal.
The police can try to get smarter in developing intelligence from social media, and finding ways to amass more force more quickly in a locality.
Deterrents can be stepped up a little, though recognising that many perpetrators have little to lose.
Patient efforts at community building should continue. The same for vocational work and apprenticeship initiatives. Building tolerance between races and those of difference generally is always a good thing.
But one potential priority is not often mentioned in the UK, and that is the link to the quality of housing. I suspect that the quality of accommodation is a big driver towards law-abiding participation in society. If you live decently, you feel better and less excluded, and you are less likely to partake excessive rebellion.
I am always impressed by the housing development activity in the Netherlands. The root cause may be the lack of free land and the challenges of abundant water, but the outcome is fantastic. Everywhere is zoned, and each year, I see many projects of new housing developments and many more upgrading the worst existing housing. Unlike in the UK, you rarely see top-end housing going up, the mass of development is aimed at first-time buyers and at less affluent households. In the space of ten years, more than half of the low quality housing around the Hague seems to have been upgraded into very respectable dwellings. Holland has its social problems, but my guess is that the drive to decent housing for all is one policy which keeps them in check.
By contrast, most activity (and headlines) in the UK seem to be focused on the top-end and the green belt discussion. The result may be greater division, greater resentment, and greater squalor for many.
I applaud the coalition for its housing policies generally, and find it one of the biggest indictments of recent left-wing governments that they largely ignored housing. It was Maggie Thatcher who came up with the brilliant idea of selling council houses, and idea for shorter contracts rather than lifetime tenancies makes a lot of sense. It also has to be possible to evict trouble-makers and send them somewhere less desirable. But all of this requires a decent stock of housing to begin with.
Public-private partnership has worked (arguably) for schools and hospitals. Why not for house-building as well? Such a policy would not require much government investment, and it would create growth and jobs just when and where they are needed. But it might also be the most effective way to reduce the chance of future riots.
One small advantage this affords is to be able to look at the media coverage after the event almost as a historian rather than as current affairs.
The main conclusion from this is that the media seemed to overreact. Even the blessed Economist included a number of articles claiming cathartic status for the riots. They were smart enough not to rush into trite analysis of causes, but they did seem to get swept away by the tide of excessive significance.
For, three weeks later, apart from the poor people directly affected who will have to painstakingly rebuild their lives, these riots don’t seem such a big story after all. Many places have frequent riots. A death tool of six would be a good week in Mexico City, or Rio, or Jo’burg, or Washington DC, and probably in Shanghai too if we knew the full truth. There have been riots in England before. It will do us English good next time there are riots in the Paris banlieux, perhaps we won’t be so smug about it.
Some things I have read have stuck in the memory. Private Eye dragged out some quotations from the 1981 riots. They were almost word for word what politicians and commentators are saying now. Lots of guff about loss of parental discipline, breakdown of family values, disadvantaged underclasses, and predictions of imminent doomsday.
There was a letter, also in Private Eye, from Northern Ireland, bemoaning that they suffer this stuff all the time yet the British press don’t care. It is a good point, but I guess that is what devolved government is for, to find local solutions for what are clearly local problems. A Scot also wrote in pointing out that descriptions of British riots were not accurate, since in truth they were all in England.
Then there are the politicians. Here, the Labour ones are on very thin ice bemoaning the way cutbacks have created an angry underclass. Surely these things take much more than a single year to simmer? And who has been in power for the thirteen years that these kids have been growing up?
But Tory are little better. As usual they mourn the loss of supposedly better times past, conveniently glossing over every statistic proving that beforehand there was even more poverty and family abuse. And the solution of punishment and more punishment is pretty thick. Bagehot wrote nicely to redeem the Economist a little when he/she argued that this was an English perennial solution dating back to colonial times – wish the troublemakers away. Where to, exactly? Penal colonies in Australia? Sorry, guys, these are our people, we can’t just make them vanish. I hope Ken Clarke sticks to his laudable justice principles during the coming weeks. Hooray for LibDems in government.
Myself, I think it is far more banal. Young men always have some urge to rebel, to make their mark in the world and show off to their peers. How they rebel is controlled by simple risk and reward. In the old days, eternal damnation was a deterrent from the Church, and tighter families also created deterrence, in good ways and bad ones. On the reward side, social media have made things easier – if you learn that a shop is ready to loot and all you have to do is join the crowd, then it is more tempting. Risk of sanction by the state is always limited, especially for kids with limited assets and prospects.
If we accept the banal explanation, responses can be more piecemeal.
The police can try to get smarter in developing intelligence from social media, and finding ways to amass more force more quickly in a locality.
Deterrents can be stepped up a little, though recognising that many perpetrators have little to lose.
Patient efforts at community building should continue. The same for vocational work and apprenticeship initiatives. Building tolerance between races and those of difference generally is always a good thing.
But one potential priority is not often mentioned in the UK, and that is the link to the quality of housing. I suspect that the quality of accommodation is a big driver towards law-abiding participation in society. If you live decently, you feel better and less excluded, and you are less likely to partake excessive rebellion.
I am always impressed by the housing development activity in the Netherlands. The root cause may be the lack of free land and the challenges of abundant water, but the outcome is fantastic. Everywhere is zoned, and each year, I see many projects of new housing developments and many more upgrading the worst existing housing. Unlike in the UK, you rarely see top-end housing going up, the mass of development is aimed at first-time buyers and at less affluent households. In the space of ten years, more than half of the low quality housing around the Hague seems to have been upgraded into very respectable dwellings. Holland has its social problems, but my guess is that the drive to decent housing for all is one policy which keeps them in check.
By contrast, most activity (and headlines) in the UK seem to be focused on the top-end and the green belt discussion. The result may be greater division, greater resentment, and greater squalor for many.
I applaud the coalition for its housing policies generally, and find it one of the biggest indictments of recent left-wing governments that they largely ignored housing. It was Maggie Thatcher who came up with the brilliant idea of selling council houses, and idea for shorter contracts rather than lifetime tenancies makes a lot of sense. It also has to be possible to evict trouble-makers and send them somewhere less desirable. But all of this requires a decent stock of housing to begin with.
Public-private partnership has worked (arguably) for schools and hospitals. Why not for house-building as well? Such a policy would not require much government investment, and it would create growth and jobs just when and where they are needed. But it might also be the most effective way to reduce the chance of future riots.
Monday, August 29, 2011
Time for Tobin
The Tobin tax is an idea named after a Nobel prize winner for economics. It was first mooted around the time that exchange rates moved from predominantly fixed to generally variable, around 1970. Its purpose then was to discourage wild flows of speculative money between currencies, and so generate stability.
Since then, the tax idea has received an airing every few years, but never come to pass. Most recently, Sarkozy and Merkel speculated about a Tobin tax as part of a solution for the current financial woes in Europe. Gordon Brown was also once a cautious advocate.
I love the idea. One reason is that increasingly financial services have become just like any other services, and a big part of the world economy, yet somehow free from transaction taxes. If I go to the barber, I receive a service and pay VAT. If I go to the bank, I pay VAT on the banker fees, but no tax on the transactions involved, which are the main outcome of the service. Firms whose business is buying and selling oil or cars pay tax on every transaction. Why shouldn’t firms whose business is buying and selling money? This is one massive global tax loophole – should we be surprised that so much global wealth ends up in this sector (which, incidentally, actually produces nothing)?
But the main reason I like it is very similar to the original proposal. One culprit for financial instability is the velocity of markets, driven mainly by technology and communications advances. It is simply too easy these days to transact. As a result, the whole herd moves at the slightest market signal, often via computer generated actions. I would extend the tax to all financial transactions, including buying and selling of equities and all derivatives. At a small rate of say 0,2%, this would not deter transactions, except for the most damaging, short-term kind, yet the tax would still generate massive revenue.
Of course, the tax has to be global, and this is one reason often quoted against it – by the way the same reason that we don’t pay tax on airplane fuel, another gross distortion. This is so manageable. Each of the G20 has a good reason to support the tax and a forum to instigate it. That covers 99% of all transactions, and rogue states outside would have to play ball or be limited to dealing among themselves. Tax havens still need financial trading partners.
On what to do with the revenue, there are some clear global goods such as the millennium goals or climate change research, but nowadays the financial world itself could do with some of it. Much as Norway has invested much of its oil wealth into a rainy day fund, the Euro could currently do with such a fund, and every other economy would benefit from the creation of that fund.
What really annoys me about Tobin is how the wealthy establishment and the financial community collude to make the subject undiscussable. Merkel and Sarkozy were duly ridiculed, though admittedly Tobin on its own would not solve the problems they should be solving and their ideas don’t do enough. As soon as the subject is raised, the finance lobby brings out its old arguments, including, sadly, my beloved Economist. And such is the power of finance over politics, and the overwhelming resources they control, that the tax never makes it to the policy table.
The two main arguments against strike me as tosh. One is that it would be hard to collect. Well, so is VAT, yet that works. There are far fewer institutions involved in financial transactions, monetary value is always clear, and most transactions go through regulated bodies, so the tax would be among most collectable of all. True, the scope of the tax would have to keep up with the ingenuity of traders to create new vehicles, but that should be achievable with goodwill.
The second argument is the one about tax havens, and that is just as much tosh. Sweden apparently imposed Tobin on its own in the 1960’s and, unsurprisingly, it backfired. The G20 is not Sweden.
Lots of other spurious stuff comes up, much of it thinly disguised populist gunk (the real goal of Merkel and Sarkozy is claimed by the Sun as getting Britain to pay to bail out the Euro). Read this executive summary: http://www.adamsmith.org/blog/tax-and-economy/executive-summary:-the-tobin-tax-%E2%80%93-reason-or-treason%3F/ , and especially the part where it claims to be a summary of arguments both for and against Tobin.
All in all, global politicians are as cowed on the topic of Tobin as British ones were on the subject of Rupert Murdoch. Well, last month that changed. What might tip the balance for Tobin?
Since then, the tax idea has received an airing every few years, but never come to pass. Most recently, Sarkozy and Merkel speculated about a Tobin tax as part of a solution for the current financial woes in Europe. Gordon Brown was also once a cautious advocate.
I love the idea. One reason is that increasingly financial services have become just like any other services, and a big part of the world economy, yet somehow free from transaction taxes. If I go to the barber, I receive a service and pay VAT. If I go to the bank, I pay VAT on the banker fees, but no tax on the transactions involved, which are the main outcome of the service. Firms whose business is buying and selling oil or cars pay tax on every transaction. Why shouldn’t firms whose business is buying and selling money? This is one massive global tax loophole – should we be surprised that so much global wealth ends up in this sector (which, incidentally, actually produces nothing)?
But the main reason I like it is very similar to the original proposal. One culprit for financial instability is the velocity of markets, driven mainly by technology and communications advances. It is simply too easy these days to transact. As a result, the whole herd moves at the slightest market signal, often via computer generated actions. I would extend the tax to all financial transactions, including buying and selling of equities and all derivatives. At a small rate of say 0,2%, this would not deter transactions, except for the most damaging, short-term kind, yet the tax would still generate massive revenue.
Of course, the tax has to be global, and this is one reason often quoted against it – by the way the same reason that we don’t pay tax on airplane fuel, another gross distortion. This is so manageable. Each of the G20 has a good reason to support the tax and a forum to instigate it. That covers 99% of all transactions, and rogue states outside would have to play ball or be limited to dealing among themselves. Tax havens still need financial trading partners.
On what to do with the revenue, there are some clear global goods such as the millennium goals or climate change research, but nowadays the financial world itself could do with some of it. Much as Norway has invested much of its oil wealth into a rainy day fund, the Euro could currently do with such a fund, and every other economy would benefit from the creation of that fund.
What really annoys me about Tobin is how the wealthy establishment and the financial community collude to make the subject undiscussable. Merkel and Sarkozy were duly ridiculed, though admittedly Tobin on its own would not solve the problems they should be solving and their ideas don’t do enough. As soon as the subject is raised, the finance lobby brings out its old arguments, including, sadly, my beloved Economist. And such is the power of finance over politics, and the overwhelming resources they control, that the tax never makes it to the policy table.
The two main arguments against strike me as tosh. One is that it would be hard to collect. Well, so is VAT, yet that works. There are far fewer institutions involved in financial transactions, monetary value is always clear, and most transactions go through regulated bodies, so the tax would be among most collectable of all. True, the scope of the tax would have to keep up with the ingenuity of traders to create new vehicles, but that should be achievable with goodwill.
The second argument is the one about tax havens, and that is just as much tosh. Sweden apparently imposed Tobin on its own in the 1960’s and, unsurprisingly, it backfired. The G20 is not Sweden.
Lots of other spurious stuff comes up, much of it thinly disguised populist gunk (the real goal of Merkel and Sarkozy is claimed by the Sun as getting Britain to pay to bail out the Euro). Read this executive summary: http://www.adamsmith.org/blog/tax-and-economy/executive-summary:-the-tobin-tax-%E2%80%93-reason-or-treason%3F/ , and especially the part where it claims to be a summary of arguments both for and against Tobin.
All in all, global politicians are as cowed on the topic of Tobin as British ones were on the subject of Rupert Murdoch. Well, last month that changed. What might tip the balance for Tobin?
Thursday, August 18, 2011
Manifesto for Manila
Safely home from a wonderful trip East, I’ve had time to think a bit about what my priorities would be to try to develop the place further. It is a wholly theoretical exercise, since winning power anywhere is a messy compromise between promoting a vision and getting elected, and then retaining a mandate. In Manila, that is truer than in most places with its crony politics. I’m also well aware that Europeans have spent much of history forcing their visions onto other cultures, with pretty dreadful results. Furthermore our European model looks pretty broken just now. Still, it passes the time.
Philippine politics is currently consumed by the reproductive health bill, bravely promoted by the president against strident opposition by the catholic church and other conservatives. While divorce and abortion are important, it does seem perverse to me that so much energy goes on a single issue, while the problems of poverty, overcrowding, economic weakness and corruption are so evident. Still, at least those issues matter more than the news story dominating the radio stations on Monday – that Paris Hilton had lost her mobile phone. The poor thing.
My campaign would focus on three issues – education, infrastructure and security.
Education is the biggest opportunity facing many developing countries. While health and other things clearly matter, education seems to me to give the best future return on investment. Currently, many of the best schools are run by the Church. They provide a decent education, but to a pitifully small share of the country’s young. The rest have to settle for woeful state-run schools, or for nothing at all. Of course, the Church schools charge fees, and apply other entry criteria to favour families who have existing status in society. These then feed similar universities.
This is similar to the problem of public schools in Britain, only on a much larger scale. There too, an infeasible share of Oxbridge undergraduates come from few, fee paying schools. Labour for years campaigned to close these schools down, on the grounds of fairness, and also with a belief that the elite would care more about state sponsored education if their own kids were not exempt from it. This has great merit, but it would be such a destructive waste.
The Philippines could afford this waste even less, so let us build on it. The Church could be encouraged to triple the number of such schools, while only marginally reducing resources allocated to existing ones. Then also greatly increase the number of available bursaries for poor kids, while also making life a bit tougher for the richer ones by raising entry standards – based on raw ability only. Finally, force universities to look to the state sector for most undergraduates, with a quota system for a time.
Even more important is to improve the quality of state schools. For sure, that would mean investment in infrastructure and teachers, but perhaps the private sector could help. The last link is to encourage parents to make their kids’ education a priority, and here, the existing government is laudably following the brilliant example of Brazil, where welfare hand outs for the poor have greatly increased, but with a string attached that children must attend school.
On infrastructure, I would be a bit of a communist planner. Plainly, what is missing is any long-term or joined-up thinking. Here is an example. We visited a friend in a recently opened condo unit. The unit was less 500 metres from a metro station, and the same from shops. We actually did walk from the metro, and what a walk! In the heat, we had to climb many staircases, cross busy roads, and finally walk right around the condo unit to reach its only entrance – placed round the back for reasons of security and parking. It is no surprise then that our friends have three cars, and use them to travel around the corner, thereby clogging the roads even more.
While money and personal convenience dictate everything, this will only get worse. Hence the only answer is some sort of grand Manila 2025 type scheme, with the future zoning and use of every square metre defined now and implemented gradually. Investment in public transport is critical, as are things like covered and air-conditioned walkways and proper bus stops. The scheme would have to address flood control, sewerage upgrades and of course road improvements too.
Massive investment in public-type housing would also be needed, as currently almost nothing exists between the luxury condo and the slum. Again, the private sector, Church, and imaginative finance can help. In Kuala Lumpur, I was always impressed by the lower-middle class housing being developed, in Manila I saw none. Then, many slums would need to be cleared up. Where to put these displaced people? Well, the new housing can help and so can an expansion of the city boundaries, as well as incentives to stop families moving from the countryside to Manila. But this would not be enough. Perhaps the Mexico solution would be required. There, a dense ring of shanty towns has developed around the city perimeter. They are hardly ideal, but at least it frees up the city itself, and the state has succeeded in making shanty living conditions almost bearable, and even created some property rights.
This will all take time and be expensive. One source of funds has to be taxing cars more, like in Singapore. It would not win me votes, but I would tax cars heavily for registration and use (fuel and tolls) and hit the SUV’s hardest. My friends and the next condo developers may otherwise need more than a covered walkway to change their habits.
The security policy would be all about professionalising the police and giving them legitimacy, and trying to get private security and guns off the streets. Mexico has tried this as well, which has involved taking on the drug barons. It would be ugly in Manila too. But a well-staffed, non-corrupt, police and judiciary is the only way to restore any control and get rid of guns, fences, and impunity for criminals. This will start with some investment, linked with some zero tolerance policies, including for police bribe-seeking. To his credit, the president has focused here, with some early successes, but it will require great backbone to stay the course. Part of this policy would be paid for by reducing spending on the armed forces. Sorry, the country has more important things to deal with than invading/defending the Spratleys.
So then, education, infrastructure and security. Dose this with promoting competition in business and honesty in tax paying, and you have a manifesto that might make a difference. Of course, there is no chance at all of this coming to pass. So, if you live in Manila, prepare for more guns and gridlock while the debate on birth controls continues. But you can console yourself that you have some of the best food and the best hospitality in the world, so you’ll probably still be smiling.
Philippine politics is currently consumed by the reproductive health bill, bravely promoted by the president against strident opposition by the catholic church and other conservatives. While divorce and abortion are important, it does seem perverse to me that so much energy goes on a single issue, while the problems of poverty, overcrowding, economic weakness and corruption are so evident. Still, at least those issues matter more than the news story dominating the radio stations on Monday – that Paris Hilton had lost her mobile phone. The poor thing.
My campaign would focus on three issues – education, infrastructure and security.
Education is the biggest opportunity facing many developing countries. While health and other things clearly matter, education seems to me to give the best future return on investment. Currently, many of the best schools are run by the Church. They provide a decent education, but to a pitifully small share of the country’s young. The rest have to settle for woeful state-run schools, or for nothing at all. Of course, the Church schools charge fees, and apply other entry criteria to favour families who have existing status in society. These then feed similar universities.
This is similar to the problem of public schools in Britain, only on a much larger scale. There too, an infeasible share of Oxbridge undergraduates come from few, fee paying schools. Labour for years campaigned to close these schools down, on the grounds of fairness, and also with a belief that the elite would care more about state sponsored education if their own kids were not exempt from it. This has great merit, but it would be such a destructive waste.
The Philippines could afford this waste even less, so let us build on it. The Church could be encouraged to triple the number of such schools, while only marginally reducing resources allocated to existing ones. Then also greatly increase the number of available bursaries for poor kids, while also making life a bit tougher for the richer ones by raising entry standards – based on raw ability only. Finally, force universities to look to the state sector for most undergraduates, with a quota system for a time.
Even more important is to improve the quality of state schools. For sure, that would mean investment in infrastructure and teachers, but perhaps the private sector could help. The last link is to encourage parents to make their kids’ education a priority, and here, the existing government is laudably following the brilliant example of Brazil, where welfare hand outs for the poor have greatly increased, but with a string attached that children must attend school.
On infrastructure, I would be a bit of a communist planner. Plainly, what is missing is any long-term or joined-up thinking. Here is an example. We visited a friend in a recently opened condo unit. The unit was less 500 metres from a metro station, and the same from shops. We actually did walk from the metro, and what a walk! In the heat, we had to climb many staircases, cross busy roads, and finally walk right around the condo unit to reach its only entrance – placed round the back for reasons of security and parking. It is no surprise then that our friends have three cars, and use them to travel around the corner, thereby clogging the roads even more.
While money and personal convenience dictate everything, this will only get worse. Hence the only answer is some sort of grand Manila 2025 type scheme, with the future zoning and use of every square metre defined now and implemented gradually. Investment in public transport is critical, as are things like covered and air-conditioned walkways and proper bus stops. The scheme would have to address flood control, sewerage upgrades and of course road improvements too.
Massive investment in public-type housing would also be needed, as currently almost nothing exists between the luxury condo and the slum. Again, the private sector, Church, and imaginative finance can help. In Kuala Lumpur, I was always impressed by the lower-middle class housing being developed, in Manila I saw none. Then, many slums would need to be cleared up. Where to put these displaced people? Well, the new housing can help and so can an expansion of the city boundaries, as well as incentives to stop families moving from the countryside to Manila. But this would not be enough. Perhaps the Mexico solution would be required. There, a dense ring of shanty towns has developed around the city perimeter. They are hardly ideal, but at least it frees up the city itself, and the state has succeeded in making shanty living conditions almost bearable, and even created some property rights.
This will all take time and be expensive. One source of funds has to be taxing cars more, like in Singapore. It would not win me votes, but I would tax cars heavily for registration and use (fuel and tolls) and hit the SUV’s hardest. My friends and the next condo developers may otherwise need more than a covered walkway to change their habits.
The security policy would be all about professionalising the police and giving them legitimacy, and trying to get private security and guns off the streets. Mexico has tried this as well, which has involved taking on the drug barons. It would be ugly in Manila too. But a well-staffed, non-corrupt, police and judiciary is the only way to restore any control and get rid of guns, fences, and impunity for criminals. This will start with some investment, linked with some zero tolerance policies, including for police bribe-seeking. To his credit, the president has focused here, with some early successes, but it will require great backbone to stay the course. Part of this policy would be paid for by reducing spending on the armed forces. Sorry, the country has more important things to deal with than invading/defending the Spratleys.
So then, education, infrastructure and security. Dose this with promoting competition in business and honesty in tax paying, and you have a manifesto that might make a difference. Of course, there is no chance at all of this coming to pass. So, if you live in Manila, prepare for more guns and gridlock while the debate on birth controls continues. But you can console yourself that you have some of the best food and the best hospitality in the world, so you’ll probably still be smiling.
Monday, August 8, 2011
Colonial Legacies
My two trips outside Europe this year have been to Mexico, in March, and to the Philippines, where I am now. Despite being on opposite sides of the world, the two countries have a similar feel about them. This has set me wondering whether the similar colonial legacies have had an enduring effect on this lands, since I have not felt the same impression from other South East Asian visits.
I should declare here that, even more than usual in this blog, I don’t really have much idea what I am blabbing on about. Though much travelled in Europe, I am pretty naïve outside of Europe. Most of my trips have been as a Shell visitor, pampered and shielded from reality. Even then, I have never been to Africa, except South Africa, and only once to Latin America, this year.
So what do I find here, and in Mexico, that might be from a colonial legacy? There are many factors, some of which might be symptoms, some deeper root causes.
First is the security. In Mexico, the police and army were everywhere, in the Philippines less so, yet in both places guns have been prevalent, and public places and private addresses are routinely guarded and fortified. Armed security guard must be one of the most readily available jobs in both places. It is intrusive, and a sad reflection on a society with great inequality and lack of trust in the official institution.
Next is the consumerism and its nature. Here, malls are everywhere, and local shops everywhere else. You are also bombarded with advertising. Top categories are food, health and beauty, mobile phones and car related. In Mexico it is the same. I find the emphasis on body enhancement rather sad. Most people have very little money, and that feels a rather wasteful way to spend it. Yet spend it they do, judging by the number of outlets and people buying. Sadly, I also see many pawnshops and debt management adverts.
The cars and transport is truly amazing. Here is a city of 12-24 million people, depending on how you count, with one highway quality road, just one or two over ground metro lines, and no trams or trains. No one seems to walk, maybe due to the heat and pollution as well as the dangerous walkways. There are a plethora of public buses, and cheap local transport in the form of little vans converted as a form of bus and tricycles. Yet many people still drive, and what cars they have! SUV’s abound, and the average age of cars seems low. The result is almost total gridlock. A few years ago, the government tried to ease congestion by banning each car one day per week based on its number plate. Most of the people I have met here got around that restriction by buying an extra car! Manila is worse than Mexico City, where at least the metro system appeared good, but the nightmare of transport is the same.
Inequality is staggering in both cities. Both have shanty areas and street life at the bottom, and every strata on the way up towards condo or hacienda life with multiple cars and servants. The plentiful malls in Manila seem designed to serve the separate classes, some full of exclusive brands and others feeling like bustling street markets.
Then we come to the politics. Both places boast democracy, but ones driven primarily by money. We look with distaste at Berlusconi’s Italy, but here the hostess of a popular chat show just happens to be the president’s niece. Money buys patronage and votes, and retention of privileges. True, individuals in both countries are incredibly generous, especially to their extended families and via Church charity, but the reality is that a car or a city flat are totally unaffordable from the salary from a decent starter job. Worse, education is the most stratified thing of all. Many kids get no schooling, free schools are woeful, and getting to college from anything but a fee paying school is next to impossible. Then jobs are advertised for graduates from the better colleges only (unless someone in the family can get you in).
I ask many people here the question why the Philippines has fallen so far behind its neighbours. I usually receive incomplete answers. Too many people, corrupt politicians, lack of infrastructure. Yet Thailand, Malaysia and Indonesia have or had all these things too. It is not enough.
Which brings me to my theory about colonial legacy. Colonialism is always bad, but if you had it, perhaps some is worse than others. What priorities did British colonists have? Raping the raw materials of their colonies was one, hardly a laudable goal. But the result may have been a few well-run companies, and some institutions and infrastructure to back them up, including some public schooling. Over generations, that may have equipped the societies to thrive once the Brits had gone.
I expect the Dutch, and even the French, colonies received similar legacies. Apart from a greater focus on a more authentic religion, I’m not even sure the Spanish were that different. My theory is that the bigger driver in Latin America and the Philippines has been the de facto US colonisation since 1900.
Much of what I find distasteful in Mexico City and Manila is reminiscent of the least functional aspects of the US. No public transport. Intrusive security. Inequality. Money based politics. Broken institutions. Poor public education. For many generations, the US has got away with it, perhaps because the prescription suited their nation in their state of development. But exporting that system to developing pseudo colonies appears to have been an unmitigated disaster.
If you are a bit jaded with the European model and what used to be called social democracy I advise you to spend some time in Manila. As the many priests here advise, it will help you to count your blessings.
Next week, if I find a bit more free time on holiday, I’ll think about what a one-term manifesto for improving the Philippines might look like. As with many problems, this one is much easier to diagnose than to solve.
I should declare here that, even more than usual in this blog, I don’t really have much idea what I am blabbing on about. Though much travelled in Europe, I am pretty naïve outside of Europe. Most of my trips have been as a Shell visitor, pampered and shielded from reality. Even then, I have never been to Africa, except South Africa, and only once to Latin America, this year.
So what do I find here, and in Mexico, that might be from a colonial legacy? There are many factors, some of which might be symptoms, some deeper root causes.
First is the security. In Mexico, the police and army were everywhere, in the Philippines less so, yet in both places guns have been prevalent, and public places and private addresses are routinely guarded and fortified. Armed security guard must be one of the most readily available jobs in both places. It is intrusive, and a sad reflection on a society with great inequality and lack of trust in the official institution.
Next is the consumerism and its nature. Here, malls are everywhere, and local shops everywhere else. You are also bombarded with advertising. Top categories are food, health and beauty, mobile phones and car related. In Mexico it is the same. I find the emphasis on body enhancement rather sad. Most people have very little money, and that feels a rather wasteful way to spend it. Yet spend it they do, judging by the number of outlets and people buying. Sadly, I also see many pawnshops and debt management adverts.
The cars and transport is truly amazing. Here is a city of 12-24 million people, depending on how you count, with one highway quality road, just one or two over ground metro lines, and no trams or trains. No one seems to walk, maybe due to the heat and pollution as well as the dangerous walkways. There are a plethora of public buses, and cheap local transport in the form of little vans converted as a form of bus and tricycles. Yet many people still drive, and what cars they have! SUV’s abound, and the average age of cars seems low. The result is almost total gridlock. A few years ago, the government tried to ease congestion by banning each car one day per week based on its number plate. Most of the people I have met here got around that restriction by buying an extra car! Manila is worse than Mexico City, where at least the metro system appeared good, but the nightmare of transport is the same.
Inequality is staggering in both cities. Both have shanty areas and street life at the bottom, and every strata on the way up towards condo or hacienda life with multiple cars and servants. The plentiful malls in Manila seem designed to serve the separate classes, some full of exclusive brands and others feeling like bustling street markets.
Then we come to the politics. Both places boast democracy, but ones driven primarily by money. We look with distaste at Berlusconi’s Italy, but here the hostess of a popular chat show just happens to be the president’s niece. Money buys patronage and votes, and retention of privileges. True, individuals in both countries are incredibly generous, especially to their extended families and via Church charity, but the reality is that a car or a city flat are totally unaffordable from the salary from a decent starter job. Worse, education is the most stratified thing of all. Many kids get no schooling, free schools are woeful, and getting to college from anything but a fee paying school is next to impossible. Then jobs are advertised for graduates from the better colleges only (unless someone in the family can get you in).
I ask many people here the question why the Philippines has fallen so far behind its neighbours. I usually receive incomplete answers. Too many people, corrupt politicians, lack of infrastructure. Yet Thailand, Malaysia and Indonesia have or had all these things too. It is not enough.
Which brings me to my theory about colonial legacy. Colonialism is always bad, but if you had it, perhaps some is worse than others. What priorities did British colonists have? Raping the raw materials of their colonies was one, hardly a laudable goal. But the result may have been a few well-run companies, and some institutions and infrastructure to back them up, including some public schooling. Over generations, that may have equipped the societies to thrive once the Brits had gone.
I expect the Dutch, and even the French, colonies received similar legacies. Apart from a greater focus on a more authentic religion, I’m not even sure the Spanish were that different. My theory is that the bigger driver in Latin America and the Philippines has been the de facto US colonisation since 1900.
Much of what I find distasteful in Mexico City and Manila is reminiscent of the least functional aspects of the US. No public transport. Intrusive security. Inequality. Money based politics. Broken institutions. Poor public education. For many generations, the US has got away with it, perhaps because the prescription suited their nation in their state of development. But exporting that system to developing pseudo colonies appears to have been an unmitigated disaster.
If you are a bit jaded with the European model and what used to be called social democracy I advise you to spend some time in Manila. As the many priests here advise, it will help you to count your blessings.
Next week, if I find a bit more free time on holiday, I’ll think about what a one-term manifesto for improving the Philippines might look like. As with many problems, this one is much easier to diagnose than to solve.
Subscribe to:
Posts (Atom)