Correcting Inequality

 It is eleven years now since I implemented my decision to retire at fifty. At the time there were two major potential doubts, neither of which I fully thought through.

 

The first was that I would be bored out of my mind, miss the smart company and intellectual challenge of work, and somehow suffer pain from a bruised ego. Well, as it transpired, I need not have worried about that. I have found plenty to do and enjoyed exploring new pathways without the constraints of an employment contract and salary as primary considerations. I have discovered that people without fancy degrees can be invigorating company as well. And my ego feels just fine, thank you very much.

 

The second doubt concerned money. Would I run out? Would I have to constrain the lifestyle of my family beyond comfortable limits or even face the indignity of having to seek out paid work again when my peers are starting to enjoy retirement? Well, that one worked out well enough too, at least so far. Contrary to my expectation, I have not become poorer but richer, without putting much effort into it. Just by putting my capital assets to work a little bit I have created an income to more or less cover expenditure.

 

Thinking about this, it is really a scandal. I suppose I did subject myself to much arduous travel and some corporate indignities in building up my capital, so a bit of income as it gently winds down might be considered a fair return. But it is not winding down. I am living a stress free life, without much attempt to economise and even less effort at hustling, and my capital is not winding down at all. Perhaps this has been an especially lucky decade for my experiment, with no inflation and a long stock market boom, but I sense the exercise would not have led to much hardship in earlier decades either.

 

My capital grew primarily as a result of pay from my many years at Shell. I have shared before how I benefited from the revolution following the Great Wrong Turning around 1980. In the late 1980’s I regularly found 20% pay rises and stock option grants thrust into my arms, just as Thatcher’s government was reducing the tax burden for higher earners. Then I went abroad, and that continuing effect was multiplied by wildly generous expatriate benefits.

 

I suppose I worked hard and made a few sacrifices and even learned to be an effective corporate politician and sound manager despite my geeky (marginally autistic?) personality. But I should not polish that ego too much. I got a good job at Shell because I went to Cambridge. My path to Cambridge was eased by my parents splashing out on expensive private schooling. My mum helped further by paying for the deposit on the apartment I bought as soon as I started out in London. I had more than enough of a following wind.

 

Much is written about inequality of income, and rightly so. I remember a lovely quote from the Thatcher days that it seemed amazing that the prevailing thinking was that the best way to incentivise those on high pay was to give them more, but the best way to incentivise everybody else was to pay them less. That more or less sums up what happened, starting in the USA and spreading everywhere else.

 

The Economist and others like to point out the inequality of income is not actually getting worse. They show charts that include the effect of government transfers and taxes, and indeed the trend has flattened, especially if you start your time series after 2000 rather than in 1980. It feels a weak argument that something unjust has not become more unjust. As humanity develops, the trend line should be to reduce inequality of income.

 

But focus on inequality of income, laudable as it is, misses the wider point. Imagine two people with the same income, one with significant capital and the other none or even some debt. The first will buy a house and see its value expand, the second will always rent. The first will live in an area with enough supermarkets, little crime and good schools. The first will have no trouble finding side hustles, taking loans from banks and taking modest risks. The second has no ability to make such long-term choices; making rent is always the primary focus, and a mishap such as a car accident or medical event can be a catastrophe, while our first person can use savings or call in favours from friends to get past such moments.

 

The income disparity figures are unjust, but the bigger issue is disparity in wealth. And wealth begets wealth. Even if incomes were equalised, the wealthy would get richer and the poor poorer, only not as quickly. The key equation of Thomas Piketty claims that the return on capital will over time exceed the economic growth rate.

 

This has been my lucky surprise since retirement. I have lived the life of Riley and got richer, while many have struggled mightily and still accumulated no wealth at all. Yet some of my political peers and many of the public cannot see beyond the extensive current job openings and conclude that the poor must be lazy and undeserving.

 

I find this leads to a clear conclusion in public policy. To really address inequality, the focus must be on taxation of wealth and income from capital. It is true that slavery and Jim Crow and Redlining have locked out much of the population from any chance to accumulate wealth. Reparation in cash or subsidies or quotas will not fix this. The real issue is that the beneficiaries of those injustices acquired wealth, and that wealth continues to grow across generations. It applies to individuals, to communities and to whole nations, and it is unjust.

 

I am not a communist. I love markets and wealth creation and recognise that these good things have catalysed wonderful human development. Eliminating income inequality entirely would be disastrous, and building capital is a laudable aim. It just should not be so easy.

 

When I was growing up, taxes on income were too high. But I also recall that taxes on capital were higher still, and this good thing has reversed since the Great Wrong Turning. Even without resorting to trusts and offshore funds and obscure vehicles, capital is now taxed at the same or lower levels than income in many countries.

 

There are simple fixes available. Land and property should incur a larger share of the total tax burden than today. Capital should incur a tax a few percentage points higher than income, with lower thresholds. Capital should be periodically revalued to enable gains to be taxed more speedily. I can check the value of my shares every day, but do not need to pay tax on gains until I sell them. I would also favour a 3% wealth tax above a threshold. Politically tougher and harder to implement, there should be a global crackdown on avoidance vehicles.

 

But for me the most important change of all relates to inheritance. My parents gave me plenty of advantages during their lifetimes, starting with a stable home, an expensive education and valuable seed money. Surely that is enough advantage to be gained merely from the biological accident of birth? But one reason my capital has continued to grow has been via an estate legacy from my mother. Now what did I do to deserve that exactly? Perhaps the most invidious campaign by Republicans since 1980 has been to label inheritance tax as a tax on death. It is time for a serious campaign to reverse this.

 

I love The Economist to death, but they are curiously silent on these matters. Any mention of capital taxes comes with whining about how little they would raise and how hard they are to enforce, along with the trope about disincentives for creative enterprise. Until they and others change their tone on this, I won’t accept that they have really got the message about inequality.

 

Similarly, it is noteworthy that the biggest roadblocks to Biden’s laudable plan to develop human infrastructure in the US come on the funding side, especially when capital or wealth are involved. Should we be surprised when we observe the average wealth of a congressperson, or of the corporate lobbyists swirling around them? This is a tough pill to swallow, but any talk of true equality of opportunity is empty without it.        

Less Boss

 When I starting writing blogs, thirteen years ago now, I was a manager in a large corporation, and my most common topic was trying to help other employees to understand how their leaders were thinking and to give practical advice to succeed in a corporate environment.

 

Time and again I was drawn to the subject of The Boss. In my own experience, the effectiveness of my boss was the prime determinant of my own contentment at work. I took to giving presentations that demonstrated this point, and then advised people how to handle good and bad bosses, and to be better bosses themselves. If I were ever to write a business book, the title would be The Boss.

 

So it came as a pleasant surprise last week to read the Bartleby column in The Economist. I always enjoy Bartleby. In a clever innovation a couple of years ago, the magazine started it as a new column within its business section. Whereas all the other articles in the section wrote of strategy, acquisitions, profits and marketing, Bartleby wrote about people. The initial Bartleby was a grizzled corporate warrior called Philip Coggan who I imagined to be a bit like myself, curious but cynical: I enjoyed one of his books recently as well. He has now moved on, and I believe a series of guest Bartleby’s are currently writing. The material is still very strong.

 

The spin in this particular Bartleby article was about corporate delayering, a major trend of the last twenty years or so and one that I experienced myself at Shell. Many corporations started with a mindset that was rather military, with very firm fixed hierarchies and little delegation. Spans of control were small and clarity and expectation treasured. A modern buzzword, accountability, was assured in this type of organisation.

 

But the weaknesses of a hierarchical organization became apparent. It is slow, because any decision has to travel up and down a line. It is also, by its very nature, full of silos, so cross-functional teamwork is difficult to achieve.

 

As an aside, I always found it funny when I used to carry out staff surveys. Often the two most plaintive cries were that the organisation required stronger accountability but fewer silos. Nobody seemed to fathom that these two goals are more or less directly in contradiction. If you improve one, you invariably damage the other.

 

Anyway, businesses around the millennium swallowed the new logic of delayering, and, as tends to happen, took a good thing to a ridiculous extreme. In common with others, I often found myself with multiple bosses and an unmanageable number of direct reports, often spread across many countries. I developed a new metric to define how impossible a job was; multiply the number of bosses by the number of subordinates. My own personal best was in the thirties, but I know someone who achieved three figures.

 

Bartleby went down a similar logical path and indeed reached a very neat mathematical conclusion. A direct consequence of delayering for all employees is Less Boss.

 

Probably our first reaction to a world with Less Boss is to cheer. After all, what do bosses generally do beyond getting in our way and micromanaging us? Less Boss must imply more freedom, and freedom must be good, surely?

 

Predictably enough, things turned out very differently. Bartleby pointed out another corollary: having fewer bosses means that most bosses have less experience of the function when asked to manage senior staff. That is one reason why typically they were not very good at it.

 

Oh Bartleby, I can think of many more. Indeed I could even write a book about it! Start with the fact that leading a team is often a result of seniority and of success in technical fields. Many of these people appreciate the recognition, and the extra money, but have little appetite for being a line manager – indeed they resent the time lost from doing the technical things they love.

 

The wrong people are recruited for the wrong reasons and then they are given no help. Training in line management is non-existent, and good role models are few and far between. Line management is a subtle art, requiring patience and a variety of approaches to different situations and with different subordinates. Few can progress beyond a standard approach that enables survival but achieves little else.

 

Then delayering comes along and makes all of these problems a lot worse. The required time even for minimal line management was never fully appreciated. I learned this in reverse when my final job at Shell had no subordinates at all. I could not believe how much time this liberated, so much so that I became bored and even lost confidence because I could not accept that I was doing an adequate job without daily pressure.

 

Processes designed for an era of hierarchy were not modified when the structure changed, so line managers became swamped with requirements to remain involved in things subordinates could easily handle. The whole legal and compliance side only becomes tougher and takes a lot of time. A significant fraction of employees seem to be high maintenance types these days, and everybody needs more help and support navigating careers in a less structured environment. Then there is much more turnover than before, especially external turnover, and that places further strains on managers.

 

So we all end up receiving Less Boss and Bad or Unqualified or Uninterested Boss just at the time we need More and Better Boss. At Shell, I was first unlucky, suffering a breakdown largely because I imploded under the strain, but then became lucky as I rebuilt my career on a less ambitious trajectory. I decided to be a good boss first and foremost, and fortuitously ended up in a role with little pressure to do anything else but lots of potential to develop others. In the sea of line management blind mediocrity, being the one-eyed man was within my capability and my reputation flourished and good people flocked to me.

 

Bartleby’s simple mathematical proof of Less Boss allows me to see some of things we got right in that era, and also point to a more general way forward. Perhaps most important, I delegated, or at least shared, a lot of team building. The team helped to set standards and even led recruitment, so we always had momentum and peer pressure. Everybody knew I would be supportive when opportunities came to move on. I actively encouraged people to deal directly with the boss of my boss and with my peers.

 

I am not claiming miraculous foresight here. These moves started as survival strategies and experiments and I was lucky. But I can see now how they are good examples of how to escape Bartleby’s trap of Less Boss. Increasing company-wide delegated authorities would also help. So would a more analytical approach to where delayering can work and where it is doomed, but in terms of jobs and of people.

 

Thank you Bartleby, that business book I will probably never write has acquired another neat analytical lens, and perhaps even a catchy title.    

Supply Chains before our very Eyes

 When I first came to New York, a period coinciding with being time rich for the first time in my life, I drifted into a pleasant morning routine. On days when I needed to shop for groceries I would arrive soon after the store opened, to marvel at how short the lines were and how quickly I could complete my chore. Even now I pity the poor souls obliged to shop at these establishments at weekends, when the line can snake half way around the store.

 

There was a bit of a contradiction in having completed the chore quickly and efficiently, because in my new life I had no particular need to have done that, since the rest of a lazy day loomed ahead. So I would reward myself by visiting Panera bread for a relaxed café latte and a bagel. Over time, I continued my habit of rapid early shopping, but usually dispensed with Panera, mainly because I linked my consumption there with my expanding waistline. First the bagel had to go, and then I resolved to drink but one coffee per day, and, once our home espresso machine became as good as Panera’s, I reverted to drinking it at home.

 

There are two Paneras near me, one situated above Costco and the other close to Trader Joe’s. I became used to observing my surroundings. I concluded that both branches were well managed, with happy and efficient staff. From my years of experience working with petrol stations, I knew the signs to look for, and both Paneras scored high marks. They each had their distinctive morning clientele, and they were well set up to serve them, knowing the products to have in stock and the number of staff to have on hand to avoid long wait times.

 

This changed suddenly with the onset of the pandemic. I recall visiting a different Panera on Long Island early on, and wondering if nuclear Armageddon had arrived such was the atmosphere in the deserted café. Panera is exactly the sort of establishment that people cut completely from their routine, never being necessary and being rather heavy in human contact. The cafés stayed open, to their credit, but must have lost a lot of money for franchisees and the host brand.

 

Last week I found myself in Panera once again. My new habit has been to shop during the special senior early opening hours that both Costco and Trader Joe’s started, now with the added benefit that avoiding crowds might save me from a deadly disease. But, reasonably enough, as things are returning to normal, both chains are gradually eliminating this perk for seniors. I can only imagine that in 2020 the local budgets were so completely shot to pieces that some extra costs seemed to make little difference, but now as 2021 progresses budgetary pressures make sense once again.

 

So I was caught out, arriving at Costco soon after nine to find the place closed and finding I had an hour to fill. I did not have my newspaper with me, but, even so, a nostalgic visit to Panera beckoned invitingly.

 

But what a sad experience was awaiting me! The tables, closed off during most of the pandemic, lay open and inviting, but in the end I no need to regret leaving my newspaper at home because I never made it into the sanctuary of the table area. Instead, life became clogged up in the service area.

 

Queuing to order in Panera has become progressively more annoying over the years as the chain has sought to enter the digital age. Before there was a single line of people placing orders, so a good manager ensured enough staff and the wait was predictable. Then they introduced computer screens for some to place orders, which seemed to increase waiting times for traditional folk like me. But then they introduced an app so people could order remotely and, worse, those orders seemed to take priority over we luddites. So now we wait longer to order and have to wait even longer for our order to be prepared.

 

I could accept that before the pandemic, but not last week. I reached the front of the ordering line quickly enough, but could already see computer screen listing six or eight orders as under preparation. I ordered my latte and found a quiet part of the collection area, expecting a long wait. But clearly the servers were unable to process orders as quickly as they were arriving, no doubt many from the dreaded app, and the list of orders under preparation grew longer and longer. I did finally reach the top of the list, but by then I counted sixteen items beneath mine.

 

Through the pandemic I have found that most people find it relatively easy to remember to keep apart from each other. However, I have noticed two exceptions. When people are drunk or angry all concepts of social distancing are forgotten. I am not pointing fingers here – I am as guilty as anybody else.

 

The waiting area in Panera proved an instructive example. As the number of people waiting for their order increased, it became harder to stay apart. But we would have managed, except for the fact that many of the people were getting angry at the long wait. They pushed to the front, regardless of who else might be there, and started remonstrating with the poor servers, serving only to confuse and delay things further. Once I finally had my latte in hand, I departed the store as quickly as possible and drunk it after joining the growing line downstairs waiting for Costco to open.

 

Those minutes in line allowed me to think about what I had just experienced, and I found it a microcosm of the difficulties facing the world economy just now. We hear on the news about supply chain issues bedevilling many sectors, but sometimes it is not easy to bring these down to an understandable level.

 

The key concept is predictability. Twenty years ago I was presented a computer system that was to be linked to all the larger Shell shops in the world and could be used to manage inventory and staffing. By using the past as a guide for strong confidence intervals for the future, the system would drive out costs. I am delighted we did not buy it at the time because the technology was not mature enough, but now this is how most retail businesses function, including Panera.

 

By the pandemic threw it all into chaos. The algorithm kept guessing how many people like me would show up at which hours on Wednesday mornings and what sort of products they would buy, but suddenly the guesses became so poor as to be useless. Inventory piled up before recovering too slowly once customers started returning. Staffing models led to surpluses then shortages.

 

I expect my two franchisees will have lost a lot of money, unless Panera bailed them out. Probably they surrendered their agreements and Panera found it hard to recruit replacements, perhaps falling back on existing franchisees taking on extra outlets and appointing managers. These people did not have the skills, training or motivation, just at the moment when smart overriding of the algorithms became vital. Everything fell apart. I witnessed the result during my sad visit.

 

Even when the need for extra staff will have been correctly analysed, fewer people wanted to work in a customer-facing environment doing hours that conflicted with childcare needs. Maybe some no longer needed extra hustles while federal money was swelling their bank accounts, and others had left New York completely to save rent by staying upstate with their parents.

 

So the result was plain to witness, even in a relatively simple business like a branch of Panera. Now multiply that by hundreds or thousands or even millions, add in complexities like shipping and international duties (not to mention Brexit, you poor Brits), and, rather than being bemused at how things are collapsing, instead we should marvel that anything is functioning at all.

 

Old-fashioned sorts will hark back to days before predictive algorithms. I find it more comforting to be impressed by what those algorithms can achieve nowadays in normal times, and continuing to hope that those normal times might resume. Heck, then I might even reinstate my luxurious morning routines. 

Craving Competence

After Covid exposed many leaders around the world, and after the global chaos created in the Trump White House, it is interesting to note a trend in 2021 towards a desire for competence. 

Competence in a political leader has an innate problem, which is that the competence to get elected often proves a hindrance to governing and vice versa. Getting elected involves plotting, charisma, vision and exaggeration. Governing involves delegation, teamwork, plans and patience. Few have both, and we usually only learn this once we have elected somebody wholly unsuitable. But it is our own fault because we make the same mistakes again and again.

 

Two elections this month exemplify the trend, admittedly in two rather competent, nay boring, countries, Canada and Germany.

 

Yesterday, Justin Trudeau appears to have been re-elected as prime minister of Canada, but when he called the election his purpose was to secure a majority mandate. In reality he failed to even secure a plurality of votes and only won the most seats thanks to a favourable election system, but only enough to continue with an unstable minority administration similar to that he enjoyed before calling the election.

 

How did this happen? Well, Trudeau looked at his primary opposition and saw a Conservative party with a dull new leader struggling to find his feet, and thought he could turn that to his advantage. He was wrong, because Erin O’Toole actually fought a superior campaign, cleverly tuned in to what the centre of the electorate sought, competence. I loved his slogan that Canada needs a handyman not a poster child. Well, they still have their poster child, but the handyman certainly threw a spanner into the works.

 

The German example is even stronger. The Germans have benefited from a plainly competent and competently plain leader for many years in the form of Angela Merkel. Since she announced that she would be retiring three years ago, her party has tried out at least three possible successors. After some humiliating failures, they landed on Armin Laschet, a clubbable sort of bloke with some of the charm they hoped would be effective in an election. Wrong again. Laschet has never been known for his competence, and managed to mess up handling the August floods during the campaign, among other blunders. Meanwhile Olaf Scholz successfully portrayed himself as a Merkel clone, experienced and dull, and competent. His slogan was something like “Olaf will sort it out”. He is another handyman, and this one looks set to become Chancellor, reversing a generational decline in the fortunes of his party.

 

There are other examples of the trend. Mario Draghi in Italy fits the bill, although he owes his position more to politics than votes. Sir Keir Starmer is trying to use exactly the same positioning in the UK, so far without noticeable success. It goes beyond politics too. In business, we seem happier listening to a Tim Cook than a modern day Jack Welch, though Elon Musk is defying gravity, even earthly gravity, for the time being. Bill Gates secures plenty of airtime with his dull but accurate analysis. 

 

Maybe the best example of all is President Xi. We might not care for some cynical policies, or the centralisation of elite power, or even some economic actions, but one thing they all have in common is competence in execution. Economically, his team has navigated many growing pains with remarkable success, and I am backing them to continue their good run. And politically China is out-manoeuvring the US at every turn.

 

So that brings us to the US. The same trend is in evidence. It was noticeable in the New York mayoral primary that the poster children flamed out while competence became a magic sauce. Kathryn Garcia, as dull a performer as is imaginable, nearly won based on how competently she had managed New York's  garbage collection agency. Fiery Democrats in other cities are toning down the rhetoric and focusing on building a track record of results. Hooray for that.

Biden campaigned as the antithesis of Trump, and competence was clearly a part of that story. Domestically his team have appeared competent so far, steering through a Covid relief bill, forming a feasible strategy for his larger economic package, and handling everyday matters neatly, including the vaccine minefield. But foreign policy has told a different story.

 

Antony Blinken and Jake Sullivan were sold to us as experienced and reliable operators, but I have seen little evidence so far. The first meeting with China was reportedly a shambles, disintegrating into a shouting match within minutes. There is much talk of inflection points and new doctrines, but so far I see no substance and a consistent misreading and misanalysis of the main competitor.

 

Then we can add in the execution of the withdrawal from Afghanistan. How could the intelligence have been so far out? I guess we can blame the same complacent military spokespeople who blithely made false initial claims about their shocking drone strike. The whole operation was mis-sold and poorly executed.

 

A rare ray of hope comes from the climate progress, and, despite a lacklustre G7 meeting, I am optimistic for Glasgow. But that can be attributed to the smart appointment of (competent) John Kerry rather than anything achieved by Blinken’s team. But that same G7 also failed to provide the required and eminently achievable bazooka of global vaccine billions.

 

Of course Biden and Blinken have a fair excuse that Trump actively destroyed the State department during his tenure. Building back confidence and competence will be a job for multiple presidencies, and it also must be tough to get allies to work together with the US after the betrayals of trust under Trump, and the nagging fear that he may return.

 

But now we have another awful own goal with the questionable policy of equipping Australia with nuclear power submarines (aren't there treaties about this sort of thing?). This has the feel of something rushed through to create positive domestic headlines after Afghanistan. But to have annoyed the French to the extent that a nominally close ally and vital player on the UN Security Council should actually withdraw ambassadors shows just how incompetently the whole incident was handled. This never happened under De Gaulle, and not in the “freedom fries” era of the Iraq war, so we can guess how angry the French are.

 

There are a few more encouraging signs. Biden talked to Xi for ninety minutes last week and took a collaborative tone at the UN today. But this feels pro forma; I will start to believe in competence when I see the team consider how they might look to China and consider some steps that make cold war less likely rather than more. Some respect for international institutions would be a good start.

 

It is hard to know how long the sober mood among electorates may last. In many places a handyman is not on the ballot even if the public would vote for one – think Brazil, Argentina, India or even Russia. Perhaps Boris Johnson’s long honeymoon will end eventually. And perhaps competence will be important in 2022 and 2024 in the USA. There is no space for anybody competent on the Republican side just now, so we need the Democrats to step up. Admittedly foreign policy does not weigh a lot on voters’ minds, but it is foreign policy that ultimately has the most impact. Blinken is running out of time to demonstrate that he and his team are up to the task.    

9/11: The Question rarely asked

I have recently become a grandfather. Even though Kiara lives in Dubai, we have been lucky enough to spend her with her twice already. Life and its development is such a miracle, so wonderful to behold. Having said all that, how parents can find the energy required to get through those months is an extraordinary part of that miracle and a part I’m grateful not to have to endure again.

 

Everything in the makeup of small children is designed to grow and to learn. It is remarkable to see those tiny limbs learning to achieve small breakthroughs and to observe those young eyes absorbing everything around them in order to feed the developing brain with the information it needs to learn. Observing Kiara it became easy to understand how important a supportive environment is to a new baby, right from the very start and probably also in the womb. So much of our destiny is determined in the first phases of our lives.

 

I spent a lot of the time with Kiara recalling the first months and years of her mother. At the time I was blessed to have a job where I could spend half of my working week at home, so I could participate and observe more than most fathers of my generation. A particular tendency that came to mind was the way children go through a phase when it seems virtually their entire vocabulary consists of the word “why”.

 

It was so tiresome, constantly trying to find new explanations for everything around us using language that a young child might comprehend and learn from. Luckily the phase only lasts a year or so: perhaps the child starts to realize that the parent doesn’t have so much to offer, or is becoming too frustrated to give of their best and might start punishing them in other ways for their curiosity.

 

But of course there is a reason for the choice of question. Asking why is the most efficient way to learn the most, and as part of the miracle children are somehow programmed to understand this. There also realize that asking why repeatedly can help to deepen that learning, because answers can move beyond the superficial towards deeper insights. The parent becomes tired (again), but crucial wisdom is being imparted through the process.

 

It is strange how later on we tend to forget the value of asking why. There are one or two situations where I have retained the good habit. Whenever I was involved in any sort of root cause analysis, I developed a good habit called “five levels of why”, in other words asking why something may have occurred at least five times to establish deeper truths.

 

Last weekend a car driving on the wrong side of a small street in Brooklyn crashed into another car, causing the death of a child pedestrian. Why? Well the car was on the wrong side of the road. Why? Maybe the weather was bad or lighting or signalisation was not good. Why else? The car and driver had been flagged for over 150 violations over the last five years yet were still on the road. Why? Now it is starting to get interesting.

 

I also found the why question very useful when interviewing people for jobs. Candidates tend to prepare a series of pat answers to questions they expect, and interviewers often feed those questions, with long enough preambles for the candidate to be able to navigate the course. Hearing what a suspected might be a superficial answer, I would just simply ask: “why?” The question was always unexpected and always revealing. Good candidates might need to pause but could then articulate something to develop their previous answer. Unqualified candidates could not.

 

This past week has seen a lot of introspection in the US brought on by the twentieth anniversary of 9/11. I have been impressed by a lot of the commentary. The PBS news hour, as usual, has led the way. One of their leading journalists, Amna Nawas, is always piercing in her interviews. During the pandemic we have become used to her home, and the two spaces she uses to broadcast there, one with a sober green background in a corner of what may be a living room and the other probably an office. The office has a prominent poster on the wall, with all the common interrogatives listed in last print, no doubt a treasured aide memoire from her early days as a journalist. Of course the why question sits proudly towards the bottom of the list.

 

Yet for all their excellence, even the PBS news hour often neglects to ask that why question, or at least fails to employ it enough times. There were strong panel discussions with military and diplomatic officials, but mainly they focussed on how the USA reacted to 9/11, the justifiable moves and the mistakes made. As usual on Friday David Brooks made intelligent observations while Jonathan Capehart bored with inanities – how did he get that job?

 

But for all the strong journalism, I don’t think I ever heard anybody asking what for me is the most revealing and valuable question: why? Why did Al Qaeda attack the USA? The USA security had become complacent and because various regimes were permitted to harbour extremists. Why? Bin Laden exploited those weaknesses with an admittedly brilliant plan, which in the end achieved its goal of destabilising the west. Why? Bin Laden and his coterie were evil. Why? Now it might start to get interesting.

 

Intelligent and ambitious Sunni Muslims have not had a legitimate political outlet for many generations. Too much misogynistic and proselytising dogma has taken root in mosques and governments, and not enough poverty reduction or education. Muslims have grown up angry from listening to true stories of an insulting lack of respect against their kin. Western policy moved from harbouring despots during the cold war, through disinterest and triumphalism, towards the hypocrisy of defending a so-called rules-based global order that was empty and optional for its own people.

 

Ah, now we are getting somewhere. The harbouring of despots contributed to the lack of political outlet. The harmful dogma was tolerated because parallel dogmas of other religions bankrolled politics in the west. The rules-based order is unchallenged propaganda, while any remaining high ground has been surrendered in Guantanamo and Abu Ghraib. There is little attempt to understand the cultures and wishes of foreign nationals.

 

The saddest outcome of the last twenty years of folly has been that all of these root causes remain true today; indeed they have all become more entrenched. Creating policies to address them is tough: nation building is usually mishandled and is inherently arrogant. But such policies can only emerge if the lessons from the past are actually teased out. And that only happens when the adults learn from their own children and grandchildren and are humble enough to ask the why question, again and again and again. Let us pray that it does not take another twenty years before such a process can start to occur.    

The next Cold War

 It is widely claimed that the USA and its NATO allies won last cold war. In 1989 the Soviet Union collapsed, and for a decade NATO and the US banks reigned supreme, even trying to impose their economic model on the rump of their former adversary, with predictably disastrous consequences.

 

Few would claim that the Soviets won, but many had cause to regret that the war took place at all. The development of Africa was compromised when its newly independent political structures were undermined by strongmen tied to one side or the other. South America fared little better. Korea and Vietnam were among many countries to endure tragic loss of human life in the name of nebulous goals. Even though the fragile peace gave us i-phones and second cars, it is reasonable to argue that we were all losers in the cold war. At least they somehow avoided nuclear war.

 

This week sees the twentieth anniversary of the 9/11 attacks, and a chance to reflect on the wars, cold or hot, of the last twenty years. Many commentators have linked the shock of that attack to the suspicion, nationalism and introspection now prevalent in the USA, epitomized by Donald Trump. Perhaps that era reached an end last month with the ignominious withdrawal from Afghanistan. The USA is surely ripe for a new philosophy. We have reached a tipping point.

 

While the USA was wasting its resources and focus in the Middle East, a new kid has emerged on the block. The world’s most populous nation started focusing on development over ideology under Deng and has used its own playbook to create spectacular success, taking more than half its huge population out of poverty.

 

China’s leaders have been very clever. Until recently they have not tried to challenge things that the USA and its allies hold dear, complying more or less with the so-called rules based order that is essentially a recipe for the moneyed nations to do whatever they like. Instead they worked out what those moneyed nations craved and set out to provide it. First China became the cheap manufacturing and logistics hub for the developed world. Once this created some wealth, it propped up the western financial system by offering tempting investments and depositing its own money. Lastly it offered its own growing market as customers for western firms to grow. The west loved it and those of us who own stocks became richer as a result.

 

Nowadays we like to moan about how China cheated, but it is not really a substantial claim. Western firms were all too happy to allow local partners into their Chinese ventures and for intellectual property to leak, because the benefits outweighed the costs.

 

China became richer, and many of its citizens reaped the benefits. Gradually, this allowed the leaders to become bolder. The massive trade surplus did not all have to sit in western securities: some could be invested in other countries, shoring up the Chinese supply chains and building leverage. Some limited military leverage could be created too – not to attack anybody beyond its own backyard, but to deter others from interfering. The citizens were so happy becoming richer that they became more trusting in the leaders even when some liberties were removed. It is a fair bargain when some national pride is warranted and there is more pork on the table.

 

Through all this, the goals of the Chinese leaders have been clear and consistent. They want to grow the prosperity of their people, while avoiding internal strife, minimising external threats and dealing with what they see as historical anomalies such as Tibet, Hong Kong or Taiwan. The leaders have showed strategic patience and executional brilliance.

 

Perhaps it won’t last, but perhaps it is time to revisit the patronising orthodoxy favouring democracy and capitalism. Picking winners does not work if the goals are corrupt or short-term political, but the Chinese certainly seem to be developing a strong track record.

 

We are led to believe that China has changed over the last ten years, but in reality it is not China but America. Problems were bubbling under, but then came Trump. He tried to humiliate China, an experience the leaders will not forget. China has taken away many lessons. It must make its economy independent of America. It must build leverage to counteract future building. America is not to be trusted. America will lose a staring contest. And America will bluster but not act.

 

I do not have the expertise to explain how, but I see the recent Chinese moves to rebalance its economy as primarily to build defence and leverage against America. It does not wish to use these tools, but is creating them just in case. It is a wise move. Trump is gone, for now, but one of the few things Congress can agree on just now is a desire to bully China. One sad example concerns the berating of Anthony Fauci for allegedly collaborating with China on research about infectious diseases. Surely that should be lauded? But nobody is truing to defend it, only to claim it did not happen.

 

The drift towards a new cold war seems rather inevitable. Who will win? Well, America has military power, but seems to lose most conflicts and has little appetite to confront China regarding its “historical anomalies”. America has money, but look closely and a lot of it is actually Chinese. America has cultural strengths, but smart young Chinese are happy in China – something that smart young Russians never thought. America has the best universities, but I would not expect that lead to survive one more generation.

 

If we think about the USA and China as two giant companies, which one should we invest in? One has unified leadership, clear and consistent long-term goals, a committed workforce, credible plans, key points of leverage and a strong culture of execution. The other is the USA.

 

The Economist’s excellent Chaguan column tried to explain Chinese economic policy a couple of weeks ago. There were valid criticisms about some nanny state tendencies, such as curtailing private tutoring and limiting screen gaming time for kids. But the broad thrust was impressive. It featured development (taking the other half out of poverty), controlling inequality, avoiding corruption, growing strategic sectors, and using the untrammelled power of the state for rapid execution. If a party credibly offered that in its manifesto in the west, it would have my vote.

 

Of course China has challenges. The four goals usually work well in parallel but may also lead to potential conflicts. Much is also made of the unfavourable demographic outlook. Some welfare structures must be developed. There are economic imbalances to handle. Six per cent growth will not be achievable indefinitely, but they seem in a strong position to handle most of the challenges.

 

I wonder if Anthony Blinken and his team, chastened in Afghanistan in the process of rebuilding competence after the carnage of Trump, might be coming to realise how futile this new cold war actually is for the USA. I am encouraged to read that Biden and Xi talked for ninety minutes yesterday. There is an alternative path available. China can meet its goals quite well with authentic American collaboration, if US credibility can be re-established over time.

 

Most wars do not have winners, only losers. We will all lose if the USA continues down the wrong path. Perhaps the UN, or people like the Pope or an Angela Merkel with more time on her hands, can help. The opportunities at this tipping point will surely be fleeting.      

The Follies of the Left

 Growing up, I remember coming across an old saying. Anybody supporting the left in their twenties has no heart, but anyone supporting them in their forties has no head.

 

I am obviously headless. I have always tilted leftwards, but over the last fifteen years or so my tendency has moved further and further to the left. Give me Elisabeth Warren over Joe Biden any day.

 

I suppose part of my leftward drift has come from living in the USA, where I daily witness the greed and emptiness of the right and the negative consequences of their dominance since the Great Wrong Turning in 1980. But I am also far from sure that the old saying works anymore. There has been a gradual swapping over of support between right and left, so that a patriotic, working class, rooted person without a college degree can now be a reliable supporter of the right, while people like me have moved in the opposite direction.

 

This confusing change is partially explained in a new book about the USA I read this week,Last Best Hope by George Packer. I was initially attracted to the book after an author interview on PBS, in which he started to describe four models of archetypical voters. For all their flaws, I love models, and it seems Mr. Packer does too.

 

Packer describes his first model as Free America, epitomized by Reagan (and Thatcher to we Brits). Societal responsibility means little beyond creating wealth, and markets with minimal regulation are the engine for that. Freedom comes to embody a desire for everybody else to get out of the way of greedy desires.

 

The Smart America of Clinton or Obama accepts part of Free America’s diagnosis, while disguising the greed of its adherents behind a cloak of meritocracy. Education and connections yield rewards, and the Smart use their advantages to hoard more and more of the benefits, turning a blind eye with theatrical hand-wringing to those locked out from some opportunities.

 

Free America flatters to deceive, and Smart America adds condescension to the mix, and the outcome is Trump’s Real America, a land of delusion, nostalgia and revenge. Basic competence and truth are casualties as only the Messiah is deemed credible. The creed speaks of freedom, but the entry fee includes subservience to the demagogue.

 

The author, plainly a Smart American suffused by guilt, is suitably disdainful about Free and Real peers, but reserves his greatest ire for his fourth model, Just America. The creed here is of original sin, a pit from which nobody born white or wealthy or male or cisgender can escape. Practical solutions are jettisoned on the altar of unending blame.

 

The models feel just about coherent and explanatory, and tell a story of spiralling dysfunction without an easy way out. The right lost its heart when it became Free, and its soul when it embraced the Real. The left lost its belief when it became Smart and then its head when it moved to Just. But the intelligent of today cannot but try to repel the Real, finding homes where the left has arrived.

 

As so often, the diagnosis and models are more compelling than the solutions, which read uncomfortably like the Biden agenda. The exit from the spiral lies with rediscovering Equal America, where everybody can feel respected. Journalism, education and activism are positioned as possible weapons, but I will not hold my breath, though the author does suggest that similar crises have been endured before. If his logic about respect is valid, then he and I must agree about the Great Wrong Turning, for that was surely the original sin of the current spiral.

 

Sadly, the left does not make itself easy to support. I can actually live with the fanatical wokeness of cancel culture: naïve youth has to have its dogma. For me the bigger problem is its shambolic analytical discipline.

 

Each week I read The Guardian Weekly of the left and The Economist of what remains of the intelligent right. One exudes pessimism, bemoans everything with lazy generalisations about companies that put profits before people and rarely offers any practical solutions. The other has tight and balanced analysis supported by outstanding graphics and does not shirk from brave advocacy. The left may have become Smart, but is often not very smart.

 

A great example is climate change. To its credit, The Guardian has been banging on about environmental concerns for far longer than most publications and devotes many column inches to the subject. But the analysis is never properly quantified and the solutions seem to involve going back to the dark ages. The Economist was slower to the subject but far more compelling once it found its feet, brimming with data and practical priorities, most recently highlighting methane as a low-hanging opportunity.

 

Probably the greatest book on Climate Change policy was issued this year, written by Bill Gates. It contains his characteristic wide and dispassionate analysis, and offers a workable blueprint to deal with the crisis. I have hopes that many attendees of the upcoming Glasgow summit will have read the book and arrive ready to drive to implement its ideas.

 

How did The Guardian review Gates’ book? His content received little attention, in favour of something of an attempt to undermine the author. Somehow it was not acceptable for such prescriptions to come from somebody so rich whose own environmental footprint is so large, what with his yachts and his travel schedule. The review had Just America’s flaws all over it.

 

Another example is the Amazon project for New York City. The behemoth was planning to invest in Queens, creating maybe hundreds of thousands of permanent jobs if all of the associated activity is considered. As soon as the investment was announced, Just America cast it aside, citing the subsidy the City was offering and the general labour practices of Amazon. Within a week, Amazon had decided to go elsewhere.

 

Amazon are not the flashiest employer, but they follow the law, pay on time and provide consistent working conditions and more security than many. The people deprived of their new jobs were not Brooklyn hipsters or the sons of the Smart, they were people eking out a living in multiple sweat shops, probably paid below minimum wage in cash and with the women touched up by the boss on a regular basis. Just America and Smart America conspired to make their compatriots poorer, all over defending a questionable principle.

 

We can do better than that. The left can do better than that, but we languish in lazy out-dated rhetoric rather than trying to address the needs of those we purport to support. We could start by learning from The Economist, starting with metrics. GDP is a wonderful metric for bankers, but a hopeless one for real people. Yet we persist in letting the bankers’ metric be the accepted determinant for human development. Why can the Guardian print a detailed analysis of trends in healthy life expectancy, using country and state comparisons to nail the blame on our Free and Real adversaries? Indeed, how did I observe the 2020 election without hearing a single reference to healthy life expectancy?

 

I represent the Smart. I can be smug. I make sure my own family have all the unearned advantages on offer. But I don’t accept that I have lost my heart, and I urge my Smart colleagues to promote an agenda to equalise those advantages. Elisabeth Warren I a good role model, but even she could go further.