What goes around

There is a welcome new discussion in the USA about drones and their legality. Until this year, most Americans did not really know what drones were doing in their name, and were certainly not encouraged to question it. Now, Obama has made some speeches and indicated his wish to form a stronger framework for drone attacks by appointing John Brennan to head the CIA. This has led to some relatively thoughtful articles on the subject, including one in Time a couple of weeks ago.

 

There is no doubt that this discussion is overdue. The USA has quietly been using them as the weapon of choice for some years now. They are quite cheap and don’t place servicemen at risk. They can target enemies with only limited damage to non-combatants. As a result Obama now has a regular Tuesday meeting at which he signs off who can be killed and where. Time also made clear that the CIA has its own drones, its own list, and does its killings without regular sign off by the president.

 

Now, isn’t that frightening? If the USA wants to invade a country, nowadays it faces massive public pressure, costs and international consequences (even though war has not been declared since 1945). Obama is wont to do so, as his stance in Syria shows only too clearly. Yet why bother, when you have drones? They seem to offer all the intended consequences with none of the problems.

 

A Republican congressman, Rand Paul, made himself famous by forcing Obama to answer a question saying he would not use drones to kill Americans abroad or at home. The response he received was slow and underwhelming. Like all quick fixes, drones have now become part of the establishment, and will be hard to regulate. At least with Obama and Brennan, we have a better opportunity to reach a reasonable solution than with Bush and Cheney at the helm.

 

Time focused on the risk to Americans, and on narrow US legal questions. Apparently, the drone programme is justified at home using sweeping legislation passed in 2001 after 9/11. People now find it increasingly tenuous to justify a killing in, say, Yemen, with the need to round up 9/11 perpetrators or to stop a re-occurrence. But it is messy, as congress is grid-locked and getting anything through is tough just now.

 

But what about the bigger picture? How can it possibly be justified that people, any people, are summarily executed without any trial or meaningful judicial process? Basically, Obama and his generals are asking everyone else to trust their own judgement about who should live or die, not just in exceptional circumstances but on an industrial scale. Surely this is an outrage, and it only goes to show how toothless global institutions are nowadays that there has been so little outcry outside the targeted Muslim states.

 

It is sad that Time felt it could not make this simple point. Americans are so brainwashed by the concepts of good and evil liberty and terrorism, still so traumatised by 9/11, that they are no ready to accept any argument about the human rights of any foreigner. Obama no doubt sees the problem himself, but is hemmed in by the political need to appear strong. The brave move to address the narrow legal question is the best he can do to insure against another cowboy in the White House four years from now.

 

But there is another argument which could be used and which might even work. What happens when everyone has drones?

 

Drones are not all that difficult to copy, and the USA has been deploying them for some years already. Surely the Chinese will have a drone programme? And the Russians. What about Pakistan? Iran? 9/11 required breath-taking audacity and execution, combined with a lot of complacency on the American side. It doesn’t sound so tough to send a few drones to take out some targets across the USA. But it would be as devastating politically, and of course tragic for the victims and their families.

 

So the argument could be based on imagining what would happen when the tables are turned. There has been plenty of practice to learn this lesson. Short-term considerations led the USA to dropping the nuclear bomb, to adopting client states, accepting torture, weakening the UN, and even some economic bullying.

 

The most recent example has been cyber-warfare. Stuxnet is software which went a long way to disabling the Iranian nuclear programme. Americans have not been asked to think about the ethics or the legality of such action, nor even of the killing of Iranian scientists. But China is already just as good at this sort of hacking. Only last month we read a report about how Chinese are infiltrating companies and agencies worldwide. But what right has the USA got to complain, when they do the same themselves?

 

This is all a sad consequence of the emergence of a single. Dominant, global power. When communism collapsed, many of us hoped for an era of peace and human development. The need for client states disappeared, and indeed, slowly, true development has come to Africa as a result. Of course the eventual impact for those in Russia and its orbit has been mainly beneficial. But sadly many other opportunities have been lost.

 

One possible root cause is the CIA itself. A massive organisation with few checks on its behaviour suddenly found itself with not much to do. We should not be surprised to learn that they invented new threats to keep themselves in business. Clinton has an excellent legacy overall, but it would have been so much stronger if he could have found the will to take a giant axe to the secret services. For me, it remains the scariest part of the Time story on drones that there seem to be two weekly kill lists, largely independent of each other, one signed off by an elected politician but the other one not. How we all so meekly accept our own nations’ covert activities is a mystery to me.

 

While we have nation states as the dominant political structures, the temptation will remain for those seeking power to play up to a storyline of superiority. What are our best hopes, to achieve some balance in the world without having to suffer another world war on the way? A bi-polar world did not work, and a unipolar one doesn’t seem to work well either. When China has overtaken the US, I don’t hold out many hopes that they will behave better, indeed it may be worse, given the politics there and the history of China.

 

But that is why this argument about what goes around comes around could be so powerful. The only deterrent to any bully is the fear of a bigger bully. Everyone can see that the US power is a transient thing. This creates an opportunity to use fear as a weapon to turn public opinion around against abuse of power. Rand Paul did a good job, but how wonderful if he could have incorporated this argument into his speech? For, as I see it, only this argument has a chance of making the world’s leading power behave more responsibly, from the bottom up.

 

Of course, bringing a fear factor in can backfire. 9/11 itself proves that, as the USA public immediately succumbed to the urge to fight back. The Norwegian response to Brevik is so laudable, and remarkable for how it went against modern norms. Somehow, we have to learn to be more like Norwegians, so we can enable our leaders to refrain from a power response to fear. Come on, Obama, time to sort out your legacy. Come on, US journalists, time to start helping rather than hindering. Come on, so called allies, time to be heard. Drones is a great place to start.

The Balance of Power and the Power of Balance

I get frustrated with the lack of balance in what I watch and read. A good example is the death of Hugo Chavez, which led to a number of obituaries. Time gave very few statistics, but talked about his effective populism and belittled his background. The Economist acknowledged his populism, but tried to play down is regional influence, while using selective graphs to try to demonstrate the negative effect of his policies. The Guardian weekly gave the piece to Tariq Ali, who lauded his regional influence and beneficial effects on the poor of Venezuela, paying almost no heed to the legacy of currency crisis and democratic deficit. Meanwhile US so-called TV news said hardly anything, and what it did say could have been written by the CIA or some rich Cuban-American lobby group.

 

What should I believe? The best I can do is critically analyse the various sources and create as balanced a view as I can. Usually the Economist does a reasonable job of at least providing some figures and some depth of argument, but even the Economist has its blind spots. One example is the Tobin tax, which it consistently rubbishes with very lazy arguments (hard to collect –rubbish; a good idea but only if everyone does it – so champion then!).

 

What would really help are better common indicators. GDP, inflation and currency value strike me as poor indicators, since they don’t effect ordinary people all that much, yet for many years these have been the standard metrics most often quoted. Unemployment rate is better but even that can be manipulated by make-work schemes: nonetheless it was good to see jobs used as the main target for both parties in the recent US election, over something only financiers care about.

 

I am sure there must be better metrics out there. The Economist has done well this year with its campaign for equality of opportunity, and its constant reference to ease of doing business. It also frequently quotes education levels and health indicators such as child deaths. The regular survey on child wellbeing is excellent, but seems to need a lot of research.  Happiness levels so far are hard to pin down, since they require surveys and will be so affected by culture.

 

But surely we can come up with a balanced set of metrics? Last week I visited the UN with a visitor and went on their tour. At the end I felt an odd mixture of hope and despair. One good sign was the millennium goals, which appear to have targeted good universal benefits and to have had an impact, even if it did require Bill Gates. But these goals feel a bit dated by now – a good organisation renews long-term goals regularly. Where is the next set, with exciting targets for 2025? Surely that is an opportunity to use the latest thinking on good progress metrics.

 

This sort of thinking would also help to understand whether Chavez and his ilk really have a positive side. This matters, for the conventional capitalist view is really creaking. We have to learn from everywhere and challenge our assumptions. Which is why it is so sad that most mainstream publications almost seem defined by their assumptions.

 

In the US, it is very hard to get any balance at all. I watched BBC World News for half an hour last night, and saw more interesting global perspective in that half hour than anything on TV for six months. I also saw Fox news. This is set up as a sort of chat format, rather like breakfast TV, with the newscasters offering inane comments. The content of the first twenty minutes was:

-          A non-story about a parent of the Sandy Hill massacre talking to the perpetrator’s father

-          The weather (on probably the most boring weather day for a month)

-          Obama in Israel, reasonably balanced but short and dominated by sound bites provided by the administration

-          A suspicious little story about a rocket attack in Israel with no injuries (“thank goodness”). Why placed here, I asked myself?

-          An abused pet in New Jersey is getting better (I promise I am not kidding)

-          A minor star may or not enter rehab in New York

-          The Kardashians haven’t decided on a baby name yet, but might choose something starting with K

-          Local travel, more weather and some sport

 

At least this wasn’t a party political broadcast, but as news it was woeful. It is no wonder that most Americans have no perception of the world around them. Last week on Fox, some executive interrupted his own newscast to offer a broadside against Bloomberg’s proposed ban on super-sized drinks. It is amazing how much bile so harmless a proposal has generated. His arguments were:

-          New Yorkers don’t like being told what to do

-          The proposal is not a complete solution (two cups were shown, one of which would remain legal but appeared more harmful than the other)

-          It would be hard to enforce

-          Large-size soda is only a small part of the obesity problem

 

Notice the overlap with the Economist arguments against Tobin? And notice the speciousness of the arguments – even if all are true, the ban is still a small step in a good direction. Then think why a head of Fox would bother to interrupt his main news programme with such guff, unless there is some sponsor or lobby money behind it.

 

And here is the rub. Money. It is hard to escape the conclusion that the agenda is set by money. Fox fills its news with celebrity gossip because that improves ratings. Its stance on issues is set by those that pay to keep the station going. There is a blurring between content and advertising that suits the money men.

 

Fox may be the bad, but everyone is at it. The Guardian is not immune, nor the Economist. Meanwhile, statistics are consistently debased. An ad by the association of US realtors (estate agents) quoted a survey stating that people owning their own home were on average happier, as an argument to get more people to buy a home. What tosh! Of course richer people in stable family environments are the ones in owned homes, and of course they are on average happier. But someone renting does not become happier by buying, indeed probably the opposite. Somehow they get away with this, since watchdogs here seem to be non-existent.

 

Sorry for the rant. Back to the theme of the blog. Is this lack of balance getting worse or better? And is power more concentrated now or less?

 

Schumepeter as usual set me thinking. In our frustration at blatant unfairness and vested interests dominating we rush to bemoan the one per cent. But actually power is becoming more ephemeral. Even major corporations can collapse overnight now, such is the speed of news and extent of media. Just ask Mubarak. Power may have more scope for abuse now, but it is fragile. Indeed, the fragility of power may lead to its abuse, as those in power attempt ever-more-wildly to shore up their positions. This trend carries risk, but is ultimately very good for humanity.

 

I could say the same about balance. True, money talks, and people sometimes become populist or fail to notice the con. But at least now we generally have a choice of media, including blogs, to read. Balance is certainly elusive, but at least theoretically possible nowadays. It is frustrating to have to go shopping for balance, but at least there are some shops out there.

 

I also hope that the next generation will be better equipped to shop and discern wheat from chaff. Youngsters know how to use computers and to research nowadays, and to use all the media they have available. There is even progress in education. In English, my kids (grade 8) are doing a module about debate, forming arguments and researching alternatives. This is so much more useful than the English I was taught, based just on grammar and literature. The next generation might be able to watch the Fox executive and be able to see straight through his arguments.

 

As individuals, all we can do is shop as widely as we can for balance and accept the cacophony out there. We can challenge our own assumptions and always be suspicious of the money bias. We can campaign for better metrics, and less lazy journalism, cheer wikileaks, and abhor anything covert, including the secret services from our own countries.

 

And we can stay cheerful. When we are frustrated, we can cheer the fact that things are probably better than they were, and will probably soon become better still, for more and more people. If the cost is some chaos to live through (a Beppe Grillo led government?), and some personal frustration in the search for balance, we can still celebrate that the steps forward outnumber the ones backward.

Sheryl Sandberg's Sisters

The COO of Facebook, Sheryl Sandberg, has just published a book called Lean In. In the last couple of weeks, this has led to a feature in Time and a review in The Economist.

 

Promoting gender diversity in the workplace has been a live issue ever since I joined the workforce, and I have witnessed a series of progress steps and frustrations at first hand.

 

It is obvious that the battle is not yet won. Women now outperform men at all levels of education and qualification, and are represented in the workforce quite fully, at least in the developed countries. Yet women are still hopelessly under-represented at senior levels. This is a human disgrace, and an economic waste, since plainly the many of the most talented are not being used in positions where they fulfil their potential.

 

Most studies on this tend to focus on the highest levels, such as CEO or member of parliament. But in my experience, the imbalance starts at lower levels. As soon as there is a management team of people with their own teams or areas of responsibilities, women tend to be in the minority.

 

Sandberg encourages women to take more control over their careers, and to push a little bit harder. She notices that women are more modest in how they present themselves and seek opportunity.

 

She has some sensible, practical advice. Plainly, one of the obstacles to career progression is the need to balance child bearing. She accepts that women have to find their own balance, but claims that often women make a problem of this before they need to. So instead of making one big decision to leave the workforce for a while, in practice they make a series of smaller decisions, like not applying for positions, which cumulatively do more damage than is necessary.

 

Sandberg also advises early, honest and frequent conversations with life partners about priorities. I agree with this completely, and have seen couple after couple struggling with these dilemmas. There is often little help available, and it is so frightening in a young relationship to initiate difficult conversations about whose career may take precedence, possibilities of changing location or even of living apart for a while, and the timing for kids.

 

This is so tough. I never had to face up to this really. And even if I had, the cultural expectations at the time would have been hanging over us – as the man, my career would probably have been the lead one. This expectation is unfair, but at least it would have offered a guideline. Nowadays, there are only uncertainties in this sort of thing.

 

But that change in expectation is also the best news. In the past, my belief is that it was such cultural expectations that were the biggest inhibitors to female careers. Women of my generation had the benefit of education, a fairer legal system and some sort of diversity awareness in their firms. Yet they still had their parents and their partners’ parents to deal with. It does not surprise me that it takes several generations to bring about real change.

 

So things will sort out in time. Women will demand it. Shareholders will demand it. Younger men will support it. And former cultural constraints will no longer block it.

 

But that is no comfort for my generation of women who fought on the margins, or even for the current generation getting so close but still being stymied. So the challenge is, what can and should be done to accelerate matters?

 

I approve of legal nudges and awareness nudges. So quotas can do good. D&I training should be essential. Bosses should be called to account for their behaviour.

 

There are also structural steps that remain to be taken. Even now, only Scandinavia has acceptable standards of childcare support and paternity leave. And more could be done within companies to facilitate careers that have breaks: there was an excellent Harvard article about this some years back referring to such transitions as onramps and off ramps.

 

The hardest part is what women should do themselves. This is territory that Sandberg is not the first to address, and it has its pitfalls. The risk is always in pushing women to act against their instincts. Sandberg does not quite advocate it, but In the worst examples, I have been on courses where women were advised to be more like men.

 

While it is tempting to accelerate things with such tactics, I believe they should be avoided for several reasons. First, a consequence is that the “wrong” women would then tend to break through, perpetuating negative stereotypes and prejudices. The women who will do the best job of behaving like men are not generally the women with the most to offer as women.

 

Next, the diversity that the business is trying to benefit from is actually diminished. Surely, we are trying to benefit from our differences, not try to mask them?

 

But most important, I think this sort of advice has actually held back more women than it has helped. The best coaching I ever received was to “be yourself”. Anything which works against instinct has a tendency to backfire.

 

As an example to demonstrate this, I had a dancing lesson last week. I am not a good dancer, though I want to improve. One piece of feedback was very revealing. I was informed that if I repeat the same step several times, my frame collapses. So my focusing on one thing, something even more basic fails. The instructors instinct was that this was due to my breathing becoming unnatural.

 

This diagnosis struck a chord (unfortunately, like many good diagnoses, it did not create a solution apart from to be patient and work hard). I have seen the same withy singing. It is only by internalising step one that step two becomes possible, and only when step two is entirely natural can step three be attempted. Breathing is the most basic of all actions, and how we breathe gives away how relaxed we are and the extent to which we have conquered the steps.

 

There is a nice model for this. The progression for any skill should move from unconscious incompetence through conscious incompetence and conscious competence before reaching the stable goal of unconscious competence. In singing, I am finally starting to master the last step. In dancing, I am still on the first one. Breathing gives this away.

 

What has this got to do with work? Well, many of the things recommended for women are tough and go against instinct. As such, they need constant effort and reinforcement, and can become a programme to achieve conscious competence. And conscious competence is not enough. Only a state of peaceful relaxation, epitomised by good breathing and many other things, leads to success.

 

I believe I have seen this in practice. Throughout my career, women always seemed to be the ones trying harder. They went on courses, sought lots of feedback, tried to do the right thing. Sometimes they saw obstacles when they were not there, or became abrasive or suspicious, or lost their natural spirit and obscured their talents. They were more often tired and on edge. In short, the effort to follow the advice offered to women became a constant search for conscious competence, but rarely progressed further.

 

A good example is in networking. True, it is important to chat up the boss, or be seen by the bosses boss, to be visible in a good way. I did it, not very well but I did it. But I did it using my natural strengths, and in a way that allowed some balance. I don’t accept that it is structurally harder for women to network (actually, I think it is a bit easier, as they tend to be physically more noticeable). But many women try to network almost as an obsession, because someone has told them to. A consequence can be a loss of balance, and actually making a less good impression than a natural approach could have done.

 

So, what is my recommendation? First, do follow the steps of Sandberg that come naturally, and do initiate the tough discussions with life partners (who by now should be ready to listen and compromise). Do campaign for structural improvements such as on ramps and off ramps. Other structural improvements can come in company HR policies – as an example placing more emphasis on people’s attributes as a line manager (it does not surprise me to hear Sandberg described as an excellent line manager). The one part of firms that women have fully conquered is the HR department, so surely it is time to use this to improve recruitment and performance management, helping women at the same time?

 

But then don’t listen to all the advice you receive, especially if it seems unnatural. It is better to focus on natural strengths than to become consciously competent at unnatural things. For many women, I believe Sandberg’s advice would do some good and some harm, and the trick will be to choose the recipe that works for you. Lean in, but not into places where you lose balance and the leaning becomes all you can achieve.

 

I hope and believe the current generation of women entering the workforce can be first to achieve its potential. Enough generations have passed now for the unfair blockers to have been removed, at least in most sectors developed countries. So this generation of women can enjoy the luxury of being themselves, and breathe naturally all the way up.

Time on health

I have started reading Time magazine, and I rather like it. Famous for its front pages, it is a slim and readable weekly digest with some very interesting stories.

 

Of course the perspective is American, but I can learn from that too. There are subtle messages about American society in here.

 

First is a comparison with TV news in the US. Maybe I am watching the wrong broadcasts, but I am stunned at how parochial and dumb-down TV news is here. A typical thirty minute broadcast has seven or eight minutes in the middle about local weather. I don’t think I have heard Syria mentioned so far. The fact that Rubio needed a glass of water when delivering a long speech made big news, yet the content of his speech did not.

 

Next is something about lazy journalism, or censorship, or a very fixed view of what is acceptable to Americans. Whichever of the above applies, there is always a sub-text of the US being the greatest nation on earth, and with every right to behave how it wishes. Even Time, at the intelligent end of the spectrum, shows this up. One nice article about a veteran from Iraq and Afghanistan mentioned that he had made about five hundred enemy kills, without even noticing the shocking juxtaposition that this feat by just one man is nearly 20% of the death toll from 9/11, the event cited as justifying the war on terror. Another article looked at possible war with Iran, and mentioned the risk of US casualties without seeming to consider any other casualties. Whether a cock-up or a conspiracy, this sort of thing goes a long way to explain the shallowness of US public opinion.

 

Finally is a message about Washington politics. Time usually has an article about this, and I wade through it even though it is usually quite tedious to me. What shines through is a lack of any apparent desire for good outcomes for the country. Politicians seem to have fallen into an insular game of tit of tat and small party or personal advantage.

 

Perhaps all these messages apply equally to other nations. I have seen censorship in action at the BBC, and the weather and celebrity gossip does not always escape the news there either. Perhaps it is only as an outsider looking in that enables one to see the shortcomings.

 

Time devoted virtually its entire 4^th March magazine to one article, by Steven Brill, about failings in US healthcare. It was excellent, and I recommend it, wherever you live, as an example of great journalism and what happens when markets fail.

 

I blogged about medicine here a few months ago, and the article helps to put my experience into a wider perspective. It is a staggering story of greed and failure, with politicians, hospitals, drug companies and equipment manufacturers all cast as villains. It did not surprise me to learn that half of the biggest companies in New York are healthcare companies – I see the evidence with my eyes every day, when I notice how many practices there are locally and what share of media advertising the sector generates. The outcome is a disaster for the economy, and will get a lot worse as demographics change, while Obamacare will also add pressure on premiums and costs. Healthcare costs about twice as much per head here than in Europe, yet life expectancy is generally lower.

 

At heart the story is one of market failure. Patients are ignorant, not in a mood to bargain and often weak or even unconscious. Doctors and hospitals have a financial incentive to perform as many treatments as they can. There is little consideration anywhere in the chain about trading off benefit for cost, especially given the fear of lawsuits (another heavily advertised segment). So more gets done than should, and at a higher price.

 

In theory, various actors should counter-balance these forces. Medicare, the government-paid service for the elderly, does the best job of trying, by negotiating fixed prices for treatments. Insurance companies are supposed to do the same for most of the rest of us, on behalf of us and our employers, but somehow they seem to get bamboozled. Or do they have an interest in higher revenue as well? Then, government sets the rules. But the medical industry (and lawyers) are great lobbyists, and the industry has become the largest employer, so somehow it does not happen. It is an ugly story, researched and told in a compelling way by Brill.

 

One surprise to me was the behaviour of non-profit enterprises. Many hospitals have non-profit status, and show off about it to build reputation and beg for support. Yet non-profit does not mean non-commercial. The leaders of these non-profits, usually not medically trained, pay themselves enormous salaries, and of course will drive for growth. The only limit seems to be that surplus income has to be invested. This is what drives hospitals and clinics and labs buying each other up to reduce competition further, and also a cycle of investment in new facilities and (over-priced) devices. I will look very sceptically at non-profits from now on.

 

One aspect Brill overlooks is the appalling customer service in the sector, a sure indicator of a failing market. My wife and I are both becoming used to sitting for hours in dingy waiting rooms and waiting on help-lines. Don’t you love a company with a marketing department that provides a beautiful answerphone message about how important I am, but then makes me listen to it for twenty minutes!

 

Brill suggests a range of remedies, most of which seem eminently sensible, and the necessity of which utterly condemn lawmakers for doing a horrible job with Obamacare (see point above about petty point scoring trumping national interest). Medicare currently cannot negotiate drug prices, and there is also law stopping what are known as comparative effectiveness drugs (using something just as good for less money). Both these seem utterly disgraceful.

 

But his other remedies somehow seek to regulate the excesses of the market, and might not work. Special taxes for hospitals and device makers seem odd. And reducing lab fees and over-ordering of tests are good goals without clear implementation ideas.

 

What I don’t understand is why the market is not working where it easily could. Hospitals can buy each other up, but why are not new ones being built to compete and drive down prices? And what on earth are the insurance companies doing? Surely the medicare price should be everyone’s price, give or take a few percent? If the current ones can’t achieve that, there must be space in the market for new ones who can. Getting a better performance out of the insurance companies feels a stronger remedy to me than extending medicare.

 

The whole story reminded me of my time at Shell Global Solutions. We were set up as an internal service provider for technical service and technology, with the opportunity to sell outside. But this so-called market had many of the same failings as the US medical industry.

 

First, (internal) customers had little knowledge, no propensity to negotiate, and were weak at the point of purchase. Their prices were often negotiated by internal middle-men with mixed motives. As providers, our goal was to increase revenue, so we over-provided gold-plated services and regularly increased prices. We claimed that our external success justified these, but those customers often had mixed motivation as well. The senior managers who were supposed to set the rules had their own personal agendas. We worked hard to limit competition, by pressuring Shell buyers to use us and by the use of standards and vertical integration.

 

Sound familiar? The similarities are eerie when you come to think of it. In the end we were closed down, and perhaps it was just as well. The story was not all negative, indeed we could reasonably claim a better outcome for Shell than what came before, but in the end we pushed things too far.

 

I wonder how long until the greedy healthcare industry in the US pushes too far, and where the backlash will come. The supine media have a lot to answer for. Well done Brill for going against the complacent grain.

 

The wider story is about the use of market forces. Markets are wonderful things, and generally work better than planned economies. But the market has to be pure enough to work, or it is the worst of all solutions. We should bear this in mind whenever people advocate privatisation. Is the market pure enough to work effectively? The disaster of US healthcare can be a wonderful case study of what happens when the answer is no.  

Dealing with Debt

This past long weekend we visited Pennsylvania and spent a couple of hours around the Amish communities there. I wasn’t all that sure about going beforehand, having qualms about voyeurism, but it turned out OK. We found a house laid out in Amish style with a non-Amish guide, and learned a lot without feeling we were prying.

 

Amish live according to specific traditions originating from parts of the bible. One key is self-reliance, and one result is that connections into the home are not permitted, hence no central heating. That seemed a major sacrifice without a lot of positive compensation, but for many of the aspects I could really see the point.

 

Simple living, family and community, no ostentation or seeking advantage or difference (hence almost a uniform), staying close to the land and nature. These things may seem a bit old-fashioned, but there is some attraction to a life without some stresses we impose on ourselves nowadays.

 

So this week I’ve been noticing all the things where the Amish are smarter. And top of my list is attitude to money.

 

The Economist had a couple of relevant articles to help. Seemingly, up to a quarter of Americans have no bank account. That doesn’t generally make them Amish, that would be OK, it usually makes them miserable. Dealing in cash, pre-paid cards, and all too often pay day loans and bottom feeding sharks. The next article also bemoaned the awful maths ineptitude in most people, completely ill-fitting to the complex financial affairs we all have to face these days.

 

And, as soon as we embrace what is out there, it is complicated. And, sadly, it is filled with temptation and potential for disaster. And the dice are loaded against the weak.

 

During lent, we listen about temptation. I always find the reading where Christ is tempted by the devil interesting, as it reveals where most temptation lies. Christ is offered the chance to pull a trick, to abuse power, and to show off to others. He is tempted by hubris and short cuts, not deadly sins (though one may lead to the other). I am tempted the same way. I think most of us are.

 

And what temptation! Take my regular trip to Costco, the warehouse type supermarket near us. The first thing I notice is that everything is massively cheaper than in the local supermarkets. Not 10% cheaper, as I usually saw in Europe, but 30-50%. But I have to buy in huge quantities – there is no such thing as a tub of butter, just a gallon container of the stuff.

 

So immediately we see unfairness and temptation. The unfairness comes that to get into Costco at all you need some sort of reputable standing and to pay a fee. Then, unless you have a car, a large fridge, and a whole family to feed, the place is not for you, so most poor people have to pay 30-50% more. Then the large sizes make it too easy to spend a lot, and then later consume (and throw away) a lot.

 

Finally, every single day there are people at the checkout lines trying to sell me a credit card. Now, thirty years ago in some countries you could not even pay for groceries with a credit card, the logic being that everyday expenses should come from ready money not credit. But now the credit card is pushed down my throat. We also, by the way, receive several items of mail each week flogging us store cards or credit cards.

 

Now, why do credit cards want me as a customer? It is not for the merchant fees, they just pay for my standard credit and their costs. Their goal is to get me into debt, so I start to rack up their exorbitant interest charges. Temptation lurks.

 

Now look at Chase, my bank. There are five large branches along our one mile stretch of Queens Boulevard, each with a staff of 8-10 inside. What are they doing? One or two are sitting behind a counter for regular transactions, while the rest are waiting with business cards to lead you to a booth for some consulting. So that is 30 people, paid well and on commission, within one mile, working for one bank. My little deposit account is not paying for them. What is? Debt, and its consequences.

 

Then, watch the TV and the movies. Every family is perfect to look at. Most movies have some sort of fantasy element and a happy ending. A lot of TV is celebrity based or reality shows encouraging us to think we are all-powerful. Every advert encourages us to keep up with our neighbours, be good to our families or ourselves, feed our egos and our hubris. I have yet to see a car ad in the US which actually tells me how much the car will cost. There is one that will get me a girlfriend, many that I can drive away for nothing and pay nothing for a month or two, but all I have to pay for in the end, month after month, not to mention the insurance, repairs, gasoline.

 

The UK is better, but not much. There, every second advert is for online betting. Check out how many premiership teams advertise online betting on their shirts. That is a lot of money from a lot of punters, many of whom have got into debt and are increasingly irrational and desperate in trying to get out again.

 

We used to have things to reduce our temptation. We lived our lives in small communities and close to our families. The bank manager was a local pillar, acting as a brake on unjustified spending. Now he is the worst tempter, and many of us live alone away from our families, among others facing the same social pressure to spend to keep up.

 

Even politicians have a role. Maggie Thatcher gave her famous speech about treating the economy like her grocery shop back in 1979, but now when Cameron plans a speech encouraging people to pay down their credit cards, he is forced to rewrite it because the treasury needed to maintain demand levels. The government also needs the gambling revenue. How disgraceful, compared for example with Brazil, where welfare hand outs are tied to education.

 

One trend that will help in a small way is gender equality, since ego and denial tend to be worse in men while nurturing family seems to appeal more to women. The micro-financing in Asia is a wonderful thing.

 

Once you are in debt, it seems to me almost impossible to escape. Just like with nations, the spending habit is hard to slow, and simply dealing with mounting interest becomes a challenge.

 

Worst of all, debt is one of those invisible burdens, that no one talks about. Sufferers feel they are alone, the only one, and become ashamed. The lack of maths skills makes it even harder to respond, and denial sets in, followed by desperation. Banks do not help at all. Lottery or gambling nearly always makes things much worse quickly. The only way out I know really is an interest free loan and good advice from family or a close friend. Which again discriminates against those starting near the bottom. The Economist has another campaign going about equality of opportunity: here is another modern curse making inequality worse.

 

So, what do I recommend. If you are in debt, first of all, face it, don’t deny it. Write down your outgoings and do something about them before it is too late. Stop giving gifts and treats, even if people will notice and you will feel bad. Talk to good friends, you will find fellow sufferers and hope. Be honest with your parents and in-laws, maybe they will help. Cut up those store cards and only spend on credit when you absolutely know you can pay it at the end of the month.

 

Conversely, look about your friends. My guess is that a surprising percentage could have debt problems. Try to ask them. Try carefully to coach them. If you have some spare cash, offer to help. Do it before it is too late, as this spirals out of control so quickly.

 

At a wider level, the Economist applauds the UK for putting personal finance into the national curriculum, and so do I, but also notices a weak correlation with success where that initiative has been tried elsewhere. My view is that this menace has to be faced across many dimensions. Education is important, but, just like smoking, obesity, discrimination, marital abuse, and the other areas where progress has been tough, we need a social response as well to change norms and expectations. This has to come out into the open, lose its stigma, and be faced head on. It takes years, but can work in the end.

 

What about banning the temptations? Well, that is tough. I do think in the US it should be clear what you are paying for things, even including the tax on everyday items. And the sooner we realise most bankers are crooks doing the simplest job in the world and rewarding only themselves, the better. But we cannot regulate away technology completely.

 

Otherwise we would all become Amish, and, much though I see their point, I would not recommend that. However, I do wish Christian Churches would invest more effort into areas like this, which after all Amish show us is part of biblical teaching, and focused less narrowly on issues like contraception and abortion.

Wonderful Golden Rice

The front page story of the Guardian Weekly this week about GM food was remarkable in many ways.




Firstly, the content of the story brought a warm glow to my heart. After years of battles with regulators and agencies, and false starts with the science, it appears that GM food now has the immediate potential to improve world health.



A small infusion into rice seeds used in the Philippines this year will create a rice crop with marginal different properties to the regular crop. But those properties will give young kids nutrients they otherwise lack and give protection against some killer diseases. Indonesia and Bangladesh are set to follow suit next year.



It is like all those years ago when we started getting Flouride in our drinking water. Simple. Barely noticed. Low cost. And revolutionary in its effect.



I can also hope that medically enhanced food might suddenly explode in impact, as producers have positive examples to quote and countries are shamed into copying their neighbours’ good sense. Although global health has been one of the major success stories of my generation, there is so much further this can be taken. A happy story indeed.



But perhaps even more remarkable than the content was its location, on the front page of GW. For GW has been tireless in its scaremongering about GM food over the years. I must have read fifty articles on the subject, and all the previous forty nine have pained Monsanto as some sort of pantomime villain and raised the spectre of poor countries and their farmers in hoc to globalised big business. Oh, and the risk that these modified foods would somehow affect food chains and kill us all.



(That last risk always seemed a bit farfetched. After all, our food chains are so well regulated. For example, imagine how remote a possibility it would be for horsemeat to get confused with beef. What? Oh? Whoops.)



Even more remarkable still is the tone of the article. Far from simply describing the happy news and its potential impact on kids around the world, the article focuses on how long it has taken to reach this point, and apportions quite a lot of blame to over-cautious regulators and scare-mongering lobbyists.



To his credit, someone called Mark Lynas, a founder of an anti-GM movement, has publicly apologised for his prior opposition. He admits that the effect of his and other groups has been to slow the implementation of beneficial science. Countries have blocked research. Talented individuals have avoided the field. Regulators have been over-cautious. Focus has been on risks alone rather than a balance of risks and benefits. Monsanto and others have been forced into a defensive stance rather than a promoting one.



It is to its credit that GW includes this article so prominently. Yet it cannot bring itself to take the final steps. Unless you believe that its regular readers will all know full well the history and therefore see some self-criticism, there is not the slightest tone of direct apology in the article, and still less any attempt to improve in the future.



And it is almost as if GW can’t bring itself to believe its own story. An inside page has John Vidal commenting under the headline “Hard to trust GM in grip of global giants.” Yes, hard indeed. GW proves that.



I can only imagine the debates that went on in the editorial team deciding how to feature this story. Well done to the editor, who I assume insisted on front page treatment for the potential more embarrassing but more honest and more uplifting angle.



I look forward to more such articles. The Guardian has excellent journalists, and a good approach at times of getting underneath a story. It remains a good read. It and its ilk also do provide a valuable brake on some genuine threats. For one, Rupert Murdoch and his cronies were goliaths brought low by the David of the Guardian. And GW refused to shut up about climate change, no matter how few copies that sells these days.



But the GM debate does offer lessons to GW, and it would do well to try to heed them.



One lesson is about the profit motive. It is true that capitalism has its ugly side. But, as Churchill said of democracies, it is the least bad system we have got. Without the profit motive, Golden Rice would never be produced, and we still would not have Flouride in toothpaste and I would probably have dentures by now. The profit motive attracts resources and provides capital to invest. With sensible regulation, it usually works. Alternatives such as Government intervention and Communism usually don’t.



Yet in GW profit is an evil word. Especially short-term profit or large profit or global profit, as if somehow we should restrict capitalists to local playing fields with small benefits that they have to wait a long time for.



And this lazy categorisation creates lazy, unbalanced journalism, time and again. GM food is not the only own goal: just within the energy sector, look at nuclear power, gas fracking, and biofuels. In each case lobby groups given oxygen by people like GW have placed Europe on the wrong side of progress, to all our detriment.



Another lesson is to look at benefits as well as risks. A bias for optimism makes for sunnier stories and happier readers, and in my experience is often justified. Humans are wonderful creatures who can achieve things that often feel like miracles. Too much of the time, GW is looking for villains not heroes, exploitation rather than breakthrough. This point is well made by Lynas, who quotes a regulatory system dominated by avoiding small risks, rather than ready to offset small risks against quantified large benefits. The journalists and lobby groups have fallen into the same trap.



Finally, always propose practical alternatives. There is a lot of “why oh why” in journalism, and not enough active advocacy of real alternatives. Instead of starting with evil Monsanto, start with the issue of stunted growth and childhood disease. How can we improve child health? That way things like GM can appear as a potential solution, albeit with caveats to address, rather than a hazard to be avoided.



This last lesson can apply in climate change articles too, as well as economic ones. In climate change, we are often fed a diet of doom, with the proposed solutions wildly unattainable or impractical. Start with the issue instead of the doom, and maybe solutions exist that are palatable. The people trying to manipulate climate are somehow distasteful due to links with climate denial and big business, but if they have solutions we should embrace them anyhow.



Perhaps such an approach would rob GW of its passion and its appeal. Personally I don’t think so. More balance, more solutions, more honest apologies and more rethinking of positions might just lead instead to better journalism, and the ability to offer readers more sunny stories. And, much more important, better nourished kids in the Philippines and elsewhere.

Leaders and Legacies

The Economist, as usual, has produced some thoughtful stuff to coincide with the annual junket to Davos – shall we call it the 1% club? Schumpeter talked cynically about two massively overused words, global and leadership, debunking conventional wisdom on both.




My favourite part of the Schumpeter article was a quote from Abraham Lincoln that I had not heard before. “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”



Isn’t that a lovely quote? It brought it to mind while watching the movie Lincoln this week, and, with the reasonable assumption that the movie bore some relation to the truth, it is clear that he passed his own test. He was able to stay humble, continue to see a big picture, yet drive messy, practical change.



A key word is legacy. People with power usually become driven by legacy, sooner or later. It is not always a bad thing. A sense of history can inspire great achievement. But it is dangerous, because it also encourages the negative things associated with power: dogma, lack of listening, corrupted motives.



Look at Tony Blair. Arguably, he was driven by legacy from the start, as he reformed the labour party and drove towards peace in Northern Ireland. But history will partly remember him for a less positive legacy, that of the Iraq war. True, we do not know how much discretion he really had when he supported Bush (another man tainted by legacy, that of completing Dad’s work), what trade-offs really were available to him. But you only have to listen to interviews from the time to understand that legacy was driving him, at the expense of a rational consideration of pros and cons and advice.



Sometimes the greatest legacy is left by those who never give the word a thought. An example is Fred Turner, subject of an obituary in the same edition of the Economist. By the way, I love Economist obituaries. But I suppose you had already guessed that.



Turner was a sort of COO of McDonalds, before the term became popular. He had a simple passion and belief that never altered. He was the one who designed the operating standards for McDonalds, and then imposed them through a system of training and monitoring worldwide. He was never far from a restaurant, and would inspect and cajole and improve from the beginning of his career to the end, always ready to get his hands dirty and truly placing his whole empire at the service of the customer.



Is that leadership? In my view, sure as hell it is. This guy made things happen. He would have refused any invitation to star in business case studies, or to attend Davos (unless it was to inspect the local McDonalds). I have met a few other leaders like that in Shell. They tend to be rather myopic, not always broadly educated, but intensely commercial and driven. The whole Shell leadership system spits these people out, but sometimes they thrive there anyway, and thank goodness they do, for the place would collapse without them.



The downside of the Fred Turner type of leader is that they will seldom ride a wave of change, or be able to respond to new trends. As an example, he would have been completely the wrong guy to deal with the health revolution and its backlash towards McDonalds.



I have just finished a book about a Tudor Fred Turner. Wolf Hall was Hilary Mantel’s first Booker prize winner, and I will shortly embark on the second one. The novel sees Tudor history through the eyes of an extraordinary hero called Thomas Cromwell. He came from the bottom rung of a hierarchical society to rise to the second most powerful man in the land, and did it through hard work, toughness, bloody mindedness, and a ruthless commerciality. I recommend this, it makes great reading.



Many of the characters at Davos have impressive back stories. Yet how many are suited for their leadership roles, right now? How many have prospered in adversity and been promoted to a power their character is not suited for? At a guess, most. And certainly most who seek headlines, seek acquisitions and game-changing departures from core strengths. A failed legacy beckons. Steve Jobs has been the dangerous exception to prove the rule: there is not space in business for many of those miracles.



One test of a humble leader who can cope with power is who he surrounds himself (or herself) with. It becomes lonely at the top, and harder to listen to the necessary dissenting voices to keep wilder ambition in check. Leaders who cannot work with inherited teams raise a red flag, as do those who promote acolytes. This is usually easy to spot, even at a distance.



In this respect, I like Barack Obama’s recent appointments. He recognised early that he could not do everything himself, and appears to have recruited wisely. He uses Biden as a short-term fixer and deal-maker, ugly work but sometimes necessary. Then at the state department he chooses an internationalist, at defence someone ready to challenge Pentagon dogma and even face up to Israel, at the CIA someone wishing to put drones on a more sustainable footing, and at treasury a wonk who will work all night on budgets and deficit reduction plans. Not a bad team for a workable legacy.



Contrast with David Cameron. His Europe gambit has a history feel about it as well, but for all the wrong reasons. For me it misses the big picture, and is a play for power, content and timing dictated only by internal factors. Well done Miliband for not being bounced into a copycat promise.



Angela Merkel, on the other hand, has a keen sense of history but is more of a Cromwell or Turner, always working for small advantage. So far, she has received few plaudits for her handling of the Euro crisis, but for me she has put in an exemplary performance, calm, incremental, but effective. No Davos style speeches, just a tough job well done.



My economics classes at school came at a time of German and Japanese dominance in business. Without getting prejudiced about it, my teacher cautiously cited World War two. The losers had to start from scratch, and so had little unproductive legacy and newer infrastructure as advantages.



Looking back, I wonder if the real advantage at the time was a mental one, or humility? Big power plays and thoughts of personal legacy were, for good reason, out of fashion at the time, while leaders were careful to avoid a cult of personality and to surround themselves with balancing voices. Japan has faltered since, but the Mittelstand has enjoyed a second renaissance. Not many Mittelstand CEO’s bother with Davos, or have household names, or change their business model on a whim.



In the next years, we will learn about Chinese leaders. Hopefully they will give a better example than the Davos crowd from the developed countries. I don’t know enough about the Chinese character or history to be able to predict, but I do sense it will be a question to define how the world can move forward in the next decades. Another trend will be emergence of female leaders, and more mainstream characters than the few who have made it to the top so far. With that trend I have some optimism, for the macho legacy non-listening stuff does feel rather male.



So, how can we judge a leader worth following? A lot will depend on the situation – you don’t necessarily need a Fred Turner in an innovative part of a cycle. But look out for that sort of ugly winner behind a visionary front person. Otherwise, check for humility, a vision untainted by personal legacy considerations, and a willingness to listen. Oh, and a lack of any desire to visit Davos.