Barcelona’s Human Towers

I visited Barcelona for the first time this summer. The city has everything: fantastic food, great museums, Gaudi’s astonishing architecture, vibrant night life and, best of all, miles of sandy beaches. But this sybaritic urban magnet has a dark past. Situated at the fault line between France and Spain, the city has been fought over and occupied by many different armies over the centuries. Founded by the Carthaginian general Hamilcar Barca (father of Hannibal ‘of the elephants’), it was conquered by the Romans in the 1st Century BC, followed by the Visigoths (5th C), the Moors (7th C), the Carolingians (9th C) until finally coming under the unified Spanish crown in 1469. Barcelona backed the wrong side in the the War of Spanish Succession and the city was sacked in 1714 when the Bourbons defeated the Habsburgs and then ended up on the losing side yet again in the Spanish Civil War (1936-39). It suffered greatly in the subsequent period of General Franco’s rule and it was not until 1977 that Barcelona finally regained a degree of freedom when Catalan autonomy was restored.

This history of suffering at the hands of more powerful neighbours has bred a strong sense of local identity. Catalan culture, with Barcelona at its centre, has been forged through centuries of resistance to external oppressors and, as a result, is community oriented, suffused with a self -reliant creativity and an independence of spirit. This is evident in the very fabric of the city, composed of 10 different districts each with its own distinct character. Different neighbourhoods compete with each other in a rolling series of cultural festivals, in which local idiosyncrasies are expressed almost on a block by block basis. When I visited, the Grazia barrio was having its local festival. Turning a corner, I came across a sight that is such a perfect physical encapsulation of Catalan culture that it received UNESCO protection in 2010. It was a tall tower, built not of brick or stone but of people.

Barcelona’s “Castellers” compete in teams marked by different coloured shirts to see who can build the tallest ‘human tower’. At first, there is nothing to see. A crowd packed together and milling around in a urban square. Then a few hands go up, wrists wrapped in cloths of the appropriate team colour. More hands go up and then clasp together to form a rigid unit, and soon there are a hundred or so people locked together making a solid circular platform of humanity. Then, magically, a tower begins to arise spontaneously from the crowd. Men in groups of 3 or 4 standing on each others’ shoulders form the bottom stories. Crawling up their backs come the women and children adding new layers to the tower in turn and supported at the base by the pushing of the crowd. Then, at the end, an infant with elven grace scrambles to the very top to make a final flourish to the attendant judges.

  Castellers in Barcelona

The photos I took don’t do it justice. Seeing this human tower arise majestically from the massed populace, you are struck with a deep and resonant communal emotion. The same feeling in your gut as at a football match or rock concert but with a greater sense of purpose and a more satisfying consummation. This human edifice is a tangible expression of the will of the many as one; a spontaneous stalagmite of flesh; a priapic obelisk of collective zest.

Culture is a bottom-up phenomenon. It arises from below and can not be imposed from above. This is the truth to which Barcelona’s human towers bear testament. It is also a truth that many corporate organisations struggle with. Senior managers who want to change a corporate culture from above, often find the task close to impossible. New policies can be written, new procedures and guidelines can be published but they are more often than not ignored. These sort of prescriptive rules are only scratching the surface. One layer beneath this are the ‘core values’ to which an organisation subscribes, expressed in a corporate vision or mission statement. They often express banal sentiments such as ‘customers first’ , which ring hollow when you observe what is actually happening at the coal face. If you were to spend a morning sitting on a typical sales desk you might soon learn that doing a profitable deal is more important than customer satisfaction and that meeting this quarter’s sales target is more important than long term performance. These are the tacit assumptions, learnt from the peers and colleagues sitting next to you, that truly define corporate culture; it’s all about what is happening at the bottommost rung of the corporate hierarchy.

Part of the problem with the whole concept of corporate “culture management” is the assumption that it can actually be managed. In this paradigm, the company is viewed as a machine, with the manager as an engineer. Culture is seen as a mechanical part of an organisation that that can be reengineered and manipulated at a manager’s whim. Workers who resist are clearly either too ‘stupid’ to follow simple instructions or suffering from some sort of psychological maladjustment.

This mechanical model, the corporation as a perfectible Swiss watch, is deeply flawed. Culture is not something that a company has, it is something that the company is. So the appropriate paradigm is not a mechanical one but a biological one. Viewed from this perspective, workers who resist prescriptive policies are not psychologically ill, but creative problem solvers who have found an optimal pathway through a series of conflicting environmental pressures. Much as cells evolve in a Darwinian way in response to their surroundings, workers synthesise the conflicting messages from different parts of the organisation (HR, compliance, immediate boss, top management, customer support, etc) to come to a unique resolution that optimises all those inputs.

This is true both at the organisation wide ‘macro’ level and also in the microcosm of information security. Professor Angela Sasse, who runs the Information Security Group at UCL, has been exploring these ideas in a number of influential papers* which examine the conflict between the “top down” policies imposed by Information Security departments and “bottom up” user activity. She advocates a new approach to cyber protection which she terms “Shadow Security”.

A good example of this issue is corporate password policy. A common complaint from a company’s information security department concerns ‘stupid’ users who can’t remember their passwords and so write them down on post-it notes and stick them to the bottom of the screen. Corporate policy mandates long passwords made from a combination of numbers, symbols and capital letters which should be changed on a regular basis. The problem is that human memory does not work that way. The more frequently we do something the better we remember it, and we remember things with meaning better than a random string of symbols and numbers. A typical response from a user is “I was forced to change my password every month, so I had to write it down to remember it”. The user has found a workaround that resolves the conflict between an unrealistic corporate directive and the fundamental job requirement to do work on PCs. Some company’s are requiring bid bonds to protect them and the buyers.

The unintended consequence of the password change policy is to actually reduce computer security. Far better, in Professor Sasse’s view, to observe what users are actually doing and then build information security policy around that. One definition of stupidity is continuing to do the same old thing while expecting different results. This password problem has been the bane of information security for the last 30 years. So maybe it’s not the users but the information security department that is being stupid. Surely it’s time to try something new…

The hour between dog and wolf

There is an old French aphorism that calls sundown ‘the hour between dog and wolf’.  At dusk,  the familiar domestic pet turns into a rabid hunter.  Dusk is the hour of metamorphosis. This is how Jean Genet puts it in his 1986 memoir “The Prisoner of Love” (Un Captif  Amoureux):

[The hour] between dog and wolf, that is, dusk, when the two cannot be distinguished from each other, suggests a lot of other things besides the time of day … the hour in which … every being becomes his own shadow, and thus something other than himself. The hour of metamorphoses, when the people half hope, half fear that a dog will become a wolf. The hour that comes to us from at least as far back as the Middle Ages, when country people believed that the transformation might happen at any moment.

I spent last weekend at the Hop Farm festival, a three day mini-Glastonbury in Kent. Since it is British Sumer Time, the sun does not go down until 9.30pm so the headline acts are hitting the stage at dusk. We had two grand old men of rock: Peter Gabriel on Friday and Bob Dylan on Saturday. Both of them underwent a metamorphosis at dusk, since neither were presenting their seminal rock tunes in their original form. In both cases, their back catalogue had been radically transformed to such an extent that it was almost unrecognisable.

Dylan first. Listening to his incomprehensible growling and barking interspersed with the occasional yelp,  it was definitely a lupine transformation but I could not tell if it was a dog or a wolf. It was more like a metamorphosis frozen between the two, like a ghastly science experiment gone wrong or the dog monster from John Carpenters The Thing. The creature was clearly in excruciating pain judging from its piteous yowling, as was the audience that had to listen to it. More puzzling was the fact that the big video screens to the side of the stage were stuck on a single long shot showing a tiny figure in a white hat – exactly like the view from where I was standing – which made the whole thing utterly pointless. Technology negated by a man so vain that he had banned all close ups of his 71 year old face.

When he came on he was greeted with a huge cheer befitting his iconic status, but by the fourth song half the audience had drifted away to the other stages (Primal Scream, Gary Numan, New Order). This left a hard core knot of Dylan Fans in the gathering gloom exchanging quizzical glances as they tried to work out what song His Bobness was actually singing – sometimes it took until the second chorus to work it out.

Was I disappointed ? No. I last saw Dylan live 25 years ago when things were pretty much the same but just with a faster tempo. He has been on a never ending tour ever since. There is a PE ratio for live shows. Not the Price/Earnings ration beloved of financial analysts, but a Performance to Expectations ratio. Seasoned concert goers know that that Dylan is always the lowest ranked on this basis (followed by Van Morrison in a close second). The greatness of his artistic halo is repeatedly shattered by the awfulness of his live show.  The concert promoters had crowed in the advance publicity that this was to be Dylan’s “only UK Show in 2012”. Now we know why…

Peter Gabriel, in contrast, was terrific. His metamorphosis was triggered by setting himself an artistic constraint: no drums or guitars. So his rock oeuvre had to be completely reinterpreted for an orchestra to play…with spectacular results. The audience was still playing a game of  “guess the song” but in a good way.  The orchestral versions of his songs brought new resonance and meaning to his work. It is good example of how an artist can take a risk and and reach new heights.

The interesting point is how self-imposed restraint promotes artistic excellence.  Rhyming poetry has more artistic merit than blank verse, and blank verse more so than prose.  Art house movies often use black and white rather than colour. Peter Gabriel’s ‘no drums or guitars’ restriction was in a similar vein. But the best example of “high art through restraint” is calligraphy. Picture the master calligrapher standing in front of a blank sheet of paper with his inked up brush in his hand. The ink is black – no colour is allowed. The character he must paint is pre-defined. Even the very order in which he makes the strokes is set by centuries of historical convention. Yet despite, or maybe because, of all these constraints he produces something of such transcendent beauty that it is seen as the ultimate art form by more than half the world: the true mark of a civilised man.  Artistic endeavour must be honest; a truthful expression of inner conviction. This is pithily summed up in this maxim:  Lies cripple the artist. To this we can add another: a strait jacket sets him free.

Excellence through restraint was also very much on show in the movie I saw as I was recovering from the festival weekend. This was X Men – First Class. The restraint in this case being that there are pre-formed familiar characters – a lot of them – all of which have to be woven into the story.  This summer’s blockbuster Avengers Assemble, which I also enjoyed, carries a similar burden with four strong hero characters (Hulk, Captain America, Thor and Iron Man) all having to be fitted into a single movie. With X-Men – First Class we also know where we have to end up because this is a prequel. So unlike a typical story, we already know the ending and the character ‘development’ is similarly constrained. The fun and skill comes in delivering us (the audience) to that pre-agreed destination through the most enjoyable route. This is the storytelling equivalent to a third option on your satnav that lets you chose not the fastest, nor the shortest route but the most scenic.

The dilemma at the heart of the X Men movies is this: is being a mutant a disease from which you should be cured ? Or is it a beauteous and natural thing that should be celebrated. Should Wolverine be transmuted back into a domestic pet? In the movie the answer is no. So the series can be read as a thinly veiled critique of right wingers who believe that being ‘gay’ or ‘different’ is something that can be cured.

This month also sees the publication of a new book entitled “The Hour Between Dog and Wolf: Risk-taking, Gut Feelings and the Biology of Boom and Bust” by John Coates, a successful Wall Street Trader turned Cambridge neuroscientist. Coates took saliva swabs from 250 traders on the dealing room floor over a two week period. He then plotted testosterone levels against risk taking and trading performance. Those with higher testosterone levels took bigger bets, greater risks and subsequently made the most money.

In the book,  John Coates seeks to explain “irrational exuberance” of the markets through blood biochemistry – testosterone and other hormones coursing through the veins of amped up traders in the dealing room causes them to be overconfident, take unnecessary, irrational risks and so cause financial bubbles. Having found a ‘reductionist’ explanation for financial excess, maybe it can now be ‘cured’ ?

In my view, the error underlying this blood chemistry approach is the idea that financial bubbles are a mistake – something that needs to be eliminated or cured. The X men movies make the same point. Bubbles are not a mistake, they are a naturally occurring phenomenon, part of the fabric of nature. Their existence is not a sign that something has “gone wrong” but that everything is working fine. They may be inconvenient and cause financial damage but this is to misapply a human concern to an entity on a higher level. It’s the same type of error as calling the law of gravity “immoral”

King Canute ordered his throne to be carried in to the shallows of a rising tide. The reason normally ascribed is that he believed he could command the waves. In fact, his intention was to mock his courtiers and to demonstrate he was not all powerful: he could not control the waves. The tides follow their own cycles, dictated by celestial bodies in a higher dimension beyond the control of man. Likewise financial cycles, belong at a higher level.

Set up three levels: blood chemistry, trader, market. We can join the dots with two causal arrows pointing upwards crossing the catataxic boundaries like this: blood chemistry controls the trader, the trader controls the market. Our we could reverse them and have the causal arrows pointing downwards. If we want to control the market (eliminate financial bubbles and crashes) we must control the trader and to control the trader we must control the hormones. This leads to some rather farcical conclusions. This reductionist argument is really a reductio ad absurdum. Maybe the FSA should prescribe testosterone suppressant drugs in order to eliminate boom and bust? Or maybe firms should only employ women on the dealing floor?

Just as it is wrong to view the trader as purely a product of raging hormones  (drunk driving excuse- the booze made me do it). So it is wrong to see the market as purely an amalgam of traders. To do so is to make a catataxic error. Each entity belongs on its own level with its own rules. The point is that you can not control the market. King Canute knew that a thousand years ago. Some of us are still struggling to understand that now.

Eurovision’s catataxic voting bias

Eurovision voting has catataxic conflicts I spent last night watching the Eurovision Song Contest. What a hoot! So much better than X Factor or any of the other dreary  karaoke contests that clog our screens these days. The highlights for me were:

  •     1.The moonwalking bagpipe player in a white “body condom” outfit
  •     2.Russian grannies chanting while baking cookies, cunningly arranged in height like a set of dolls.  So cute that you just want to stack them inside  each other and put them on your mantelpiece.
  •     3.A howlingly dissonant Albanian with a choux puff on her head
  •     4.A “high concept” crooner in spangled blind fold because, as his song says, “Love is Blind” (see what he did there?)
  •     5.Turks in capes channeling a “sailor bat rapist” vibe
  •     6.The perky Edward Norton clone from Moldova with some re-clocked mutant Cheeky Girls twitching frenetically in puffball skirts.

And then there was the UK entry: poor old Englebert Humperdink who came second last. How embarrassing for him. He has a star on the Hollywood Walk of Fame, you know. And he was wearing a pendant that Elvis gave him for luck! Cue much handwringing and navel gazing about why UK always does so badly in the competition these days.

There is an almost petulant resentment among UK viewers which can be paraphrased like this: “They are singing songs in our language, Britain is the home of the Pop song, our music industry is the best in the world and our taste makers define what is cool globally. What is more, we pay the vast proportion of the sponsorship money for the contest. So why does no one vote for the UK? Those ungrateful wretches….”

It not too hard to spot the reason why the UK does not win much anymore. It is down to the two key rules in the voting system

  1. you can’t vote for the country you currently live in
  2. Each country’s voting weight is equal – regardless of population size.

Both these rules have a catataxic angle: a conflict between individual (level one) and country (level 2).The first rule introduces an expatriate bias. If you assume that everyone wants their own country to win, then expat votes are counted and local votes are not. If everyone is a partisan voter then it just becomes an expat census poll. How many British expatriates are there in Serbia? How many Serbian expats in Britain? Multicultural countries have a disadvantage. The second rule gives a big bias to small countries. Each citizen in San Marino (population 30k) has a vote that is worth 2,000 times more than the vote of a UK citizen(population 60m). If you combine the effect of both rules then the winning strategy is clear. Imagine you are in a recently fragmented country – say a place that has recently been divided into four smaller countries.  You will have lots of ‘expats’ on either side of the border and your overall country voting power has increased by a factor of four.

So how can the UK win – simple! Enter as four separate countries – England, Wales, Scotland and Northern Ireland – the cross border effect will mean we all end up voting for each other. Here is an unexpected upside if Scotland wins its independence.  Better still let’s add in Guernsey, Jersey and the Isle of Man as separate entities – the UN recognises them as such. Hell, let’s go all the way and do it on a county by county basis. After all Hampshire has a bigger population than Estonia, Montenegro, Cyprus and four other Eurovision entrants….

Death’s upside: the diamond skull

This morning is the first day back at work after the Easter break. Having overindulged on chocolate eggs on the weekend, I decide to get some exercise and walk to my Mayfair office from London Bridge station. As a result, I happen to be passing the Tate Modern as they open and pop in to see the Damian Hirst show on impulse. There is a huge queue for tickets but no queue or tickets required to see the ‘diamond skull’. The whole of the huge turbine hall is given over for the display of this one tiny piece.

But what an astonishing piece. Inside a small completely dark room the platinum skull, studded with diamonds, is the only thing visible. It is brilliantly lit and walking around it you see the scintillating, inner fire of all those diamonds shimmering at you. The effect is quite breathtaking. It is much smaller than I imagined and I was surprised by the strength of my emotional response. In the darkness, you feel torn between a push-back of revulsion and the tug of desire. The middle aged matrons next to me are completely hypnotised by it: rabbits in front of a snake. The only time I have felt a similar feeling is when my aunt took me to see Tutankamun’s golden death mask in the exhibition at the British Museum in 1972.

Both objects seem to be saying the same thing. Exquisitely crafted from priceless materials, they are simultaneously a celebration of death and a bid for immortality. In Hirst’s case there is another angle: the obsession of the art world with money.  The value of the diamonds is reputedly £14m and the asking price when it was displayed at the White Cube gallery was £50m. There is still some confusion about whether it was actually “sold” and it is apparently owned today by an anonymous consortium which includes Hirst himself. So there is catataxic debate about whether the whole is worth more than the sum of its parts. How much value has the artist added? If you were to sell it today in the open market would it be worth more than the value of the diamonds that make it up?

I don’t want to go too far down that path because there is a different catataxic angle that I want to explore. In the train this morning, I read two articles in the newspaper, both of which are obliquely connected to the diamond skull. The first was a warning by the Financial Services Authority (FSA) that thousands of Britons face a “mortgage time bomb”. The second was about Shandong Helon, a Chinese chemical company teetering on the edge of bankruptcy.

Let’s look at the mortgage time bomb first. Banks in the UK have been transferring customers over to “interest only” mortgages and these now make up 35% of the market. Many homeowners have been struggling to meet payments on traditional mortgages. Rather than calling in the loans, the banks have rescheduled them and switched their customers over to “interest only” products where the monthly payments are much less. A £200,000 mortgage would typically cost £1,000 a month if it was a traditional product but only £600 a month if it was “interest only”. They are cheaper because, as the name suggests, you are only repaying the interest and not the capital sum. The problem is that your debt is not reducing, so at the end of the mortgage period you are faced with a huge bill: the whole value of the amount you originally borrowed.

Why are the banks being so helpful? It may be that they have such a poor profile in the media right now that they want to avoid headlines about evicting impoverished homeowners, especially since half of them are now government owned. But the other reason is that if they repossessed the houses of the defaulting customers and sold them off they would drive house prices down thereby damaging their own balance sheets. It’s much better for all concerned for the loans to be classified as “in forbearance” rather than “in default”. Homeowners keep their house, the banks’ assets look better than they really are and house prices are kept artificially high.

There is a downside though. All this ‘benevolent’ activity is just storing up problems for the future. When interest rates finally rise, all hell will break loose. If people are struggling when base rates are 0.5%, what will it be like when they go up fourfold and return to a long term norm of 2%? In America, banks have been much more ruthless about mortgage foreclosures. House prices have halved, causing painful adjustments in the economy. But that is all history now, and the banks, having written off all their bad loans, are lending again driving growth in the economy. In contrast, the UK seems to be following the same path as Japan in the 1990s. Japanese banks hid their bad loans and the resulting drag on the economy meant no growth for more than a decade.

The second article about Shandong Helon has a similar theme. This Chinese chemical company has to repay 400m renmenbi  on April 15th. The market has been assuming that it will default; the first ever default in China’s fledgeling domestic corporate bond market. But a brief statement today confirmed that the bond will be repaid in full. No Default. Strangely, this is not good news at all. The problem with China’s bond market is that it has developed under the assumption that companies will always be bailed out by the state in the end (just like the EU Greek crisis). That means that risk has been badly mispriced.  So plenty of people were secretly hoping that Shandong Helon would default, thereby resetting the market’s sense of risk and allowing the market to function properly for the first time.

One of the five maxims of catataxis is  “virtue reverses at a catataxic boundary”. In other words, what is good for the individual is bad for the collective (and vice versa). Death (or default) is a good example of this. Death, from the individual perspective, is pretty much the worst thing that can happen. But from the collective perspective it is vitally important: a positive thing in that it allows the chemical elements of the life form to be broken down (through bacterial decay) and redistributed more profitably to other parts of the ecosystem. Ashes to ashes, dust to dust; it’s all part of the great circle of life. Similarly, in the economy,  the parallel to death is default, which, after the bad debts have been written off, allows capital to be redistributed to those who deserve it more.

So that’s the message that I take from Damian Hirst’s diamond skull. Death should be celebrated and not feared. It’s an important part of the process. Death has an upside.

Rage on, Ken Russell

Ken Russell Rage on I was saddened to hear of Ken Russell’s death last week. He was a particular hero of mine. I saw my first Ken Russell film at boarding school. It was introduced by a wimpy teacher, wringing his hands and describing the intense, moralistic debate the school board had just had about whether it was appropriate to screen this movie. After 10 minutes of this gentle, concerned bleating, he finally left the stage. The projector cranked up and a hall full of schoolboys got their first exposure to a work by The Master: it was The Devils.

Wow ! What a movie. Like a fusion between The Exorcist and The Crucible. Based on The Devils of Loudun by Aldous Huxley it is set in Cardinal Richelieu’s France and tells the true story of the nuns in Loudun Convent being ‘possessed’ by devils. Starring Oliver Reid and Vanessa Redgrave, the film is visually stunning and delivers a knockout blow around themes of hypocrisy, religion, kinky sex, torture, authority and the abuse of power. Nothing here that public school boys don’t already know about, so the concerns of the teachers were clearly groundless.

The film caused a huge furore on its release in 1971. It had to be heavily cut even to get an X rating. It was banned by 17 local authorities in the UK and in many countries, and could only get released in the USA after further substantial cuts. Astonishingly, it is still unavailable on DVD and rumours of the release of a Directors Cut version have been repeatedly postponed.

It’s a wonderful movie. The combination of its gorgeous visuals and its powerful message had a big impact on me as a teenager. I felt that my eyes had been opened and I had witnessed “The Truth” for the first time. More importantly, it was a non-verbal truth. I was not really able to properly articulate my thoughts about it later because I had absorbed it at a level beneath the verbal.

All good movies are like that. When people try to describe them to you they normally tail off with a rather weak “….well, you really ought to see it yourself”. Stories are a verbal medium but movies are a visual one; you have to experience them.

The Italian proverb traduttore, traditore meaning “translator, traitor” meaning the act of translation is an act of distortion or betrayal. In a similar vein, to tell someone the story of a movie verbally is a gross distortion. It is a catataxic error. Sound and visuals are the language of emotions that belong on level one. Prose and the spoken word belong on level two language: precise, grammatical and rule bound. Rock journalists sometimes explain the conundrum like this: Writing about music is as impossible as explaining architecture through the medium of expressive dance.

Cinematic filmmakers like Ken Russell, Nic Roeg and Terrence Malick are the masters of a form of inarticulate veracity in which words are lies and images are the truth. Appropriately, the best example of inarticulate veracity is in a scene from a movie: Taxi Driver. It’s the speech by The Wizard (Peter Boyle) where he attempts to explain the meaning of life to De Niro and fails utterly, tailing off with “I’m a cabbie. What do I know?” . But in his very inarticulateness, he is in fact expressing a great truth. See the clip below. There is no better exposition of one of my favourite catataxic maxims: The truth is that which can not be put in words

See a transcript here

BYOT and the jobs revolution

Do you know the latest trend in the office IT world? It’s called BYOT, short for Bring Your Own Technology. New young recruits into large multinationals are shocked by how awful the corporate IT systems are. This is a generation brought up on facebook, twitter, tablets  and smart phones; personal devices on which you can do a lot of cool stuff. Their first encounter with a corporate IT system makes them recoil in horror. It’s so slow, so clunky and so user unfriendly.

In most other industries, there is professional grade equipment for serious business use and then a cut down, ‘less good’ version for the home hobbyist. But in the IT world this has been inverted. All the cool stuff is at the consumer end of the market. This is catataxis. The level 1 ‘home’ gear runs faster and is more powerful than the level 2 ‘corporate’ gear.  Hence BYOT. You bring in your own laptop or iPad to use at work. You are responsible for maintaining it. You are happy because you get to use the cool gadgets that you like. The company is happy because the cost of equipment and maintenance goes down. Productivity is up and costs are down (by 22% in some pilot schemes). Everybody wins.

Well, not quite everybody. No-one in the IT department likes this trend at all, because having so many different devices gives them a big headache. BYOT is cynically known by IT staff as “the CEO bought an iPad” syndrome. Nirvana for IT staff is an organisation that uses exactly the same equipment everywhere, all under the centralised control of the IT Dept. Under their watchful eye, individualism is stamped out “for security and efficiency purposes”.

This drama is not new. Take a look at the Apple Mac advert from the dawn of the PC era. A female athlete runs through the hall of a political rally and hurls a hammer at a huge screen with the face of Big Brother on it. The final tagline says:

On January 24th, Apple Computer will introduce the Macintosh. And you’ll see why 1984 will not be like “1984”. 

Shot by Ridley Scott, this advert is almost 30 years old but it is still as powerful as ever and encapsulates the whole spirit of BYOT: the catataxic challenge of the individual against the corporate system one level higher. Steve Jobs’ revolution really is a revolution in jobs. And how satisfying that he finally got to see it happen before he died.

People power

Power of the peopleA Greek friend was explaining to me the mood amongst the Athenian citizens these days. Their frustration and anger is best expressed like this “The Government borrowed all that money and now they want the people to pay”. Notice that there is no identification between the people and the government. Despite Athens being the birthplace of democracy there is no sense of this being a government “by the people, of the people, for the people”. The government is some other entity, separate from the people, licensed to play their political games somewhere else. This is a catataxic split . The government is on level two, arising from the citizens on level one but separate from them. The slogan of the anarchists puts it best : no matter who you vote for, it’s always The Government who gets into power.

The second strand of frustration is with the Germans, because somehow it’s all their fault. The popular belief amongst the Athenians is that the Germans are trying to destroy them, just like World War 2 all over again. But the Germans have their own problems. In Germany, there is another illustration of the catataxic spilt between the will of the people and the government. Chancellor Merkel won the backing for a Greek bailout by a huge majority in Bundestag this week. But at the same time, a German opinion poll shows 75% of the people oppose it. The elected representatives of the people (in all parties) do not seem to be reflecting the people’s will. That is Catataxis.

Rogue Trader? Rogue Numbers!

SPSS for psychology studentsMy niece is about to go to University to read Psychology. I was surprised to find out that on her required reading list is a book called “Discovering statistics using SPSS”. It’s a monster tome of over 800 pages filled with maths. There are chapters on multivariate analysis of statistical variance, the chi-square test with standardised residuals and a section on factor extraction with eigenvalues….. No? Me neither!

SPSS stands for Statistical Package for Social Sciences. It first appeared in 1968 and has been much updated since. The SPSS manual has been described as one of sociology’s most influential books. Why? Because it turns sociology into a science. Most of the statistical methods used in the program, such as the least squared method, were invented by physicists in the 1800s. SPSS allows sociologists to plunder the wardrobe of physics. By dressing up in their clothes, it makes their discipline look more like a hard science and less of a touchy feely one: it now has numbers and maths.

One of my metaphors for catataxis is a shrink consulting a physics textbook when you are lying on his couch telling him about your father issues. He is analyzing your emotions, which are seated in the brain. And the brain, at the most fundamental level, is made up of subatomic particles. But you can’t analyse emotions by looking at subatomic particles; to do so is a catataxic error. You need to use therapeutic techniques not quantum physics – the right tool for the right level. Hence my surprise on finding out that psychology students have to study statistics.

Don’t get me wrong. Of course, statistics are useful things. They enable you to see a pattern that you might miss if you were too bogged down in the details. Statistics transmute a problem up one level, from messy reality on level one to pristine, summarising numbers on level two. Statistics let you see the wood for the trees. To run a regression on a set of data is to perform a catataxic transformation; one that can save lives with medical trials and the like. The problem is that having reduced the world to a numerical one, the judgements made on those numbers can be flawed. There is a nice warm feeling of security that you feel after you have ‘crunched the numbers’ and shown that they support your case. But your confidence in that numerical data mining may well be misplaced.

Which leads us to the UBS rogue trader who just lost that bank £2.3bn dollars. I must confess to some degree of schadenfreude. UBS took over Phillips and Drew in the 1980s, the partnership that I started work with in the City. They then proceeded to destroy it. So to see this global bank that boasts of its risk management skills humbled by a rogue trader brings a wry smile to my face.

“When will banks learn to control risks properly?“ many commentators ask. Surely the lesson is that it is not possible to control risks, not with a spreadsheet anyway. Most statistical methods rely on the bell curve; they assume a normal distribution of risk in order to make the maths work. The problem is that risk is not normally distributed, so traders keep dropping huge sums unexpectedly. Apples fall to earth, tides go in and out, riots happen in the summer and traders bankrupt banks. It’s the natural order of things. Nothing that really needs explaining.

I imagine that the senior managers at UBS looking at the trading accounts felt comforted by the numbers showing how profitable they were. But just as with psychology students, converting things up one level to the numerical domain does not necessarily make things safe, or even true. Just looking at numbers gives a false sense of confidence. Better to look one level down at the real world, the human world, messy and unstructured as it is. I bet the guy sitting on the desk next to the rogue trader all day for the last three years knew something funny was going on…

Riots: hysteria and hysteresis

police and community frustrationI am on holiday in France this week. Every cafe and hotel has a TV screen with a French presenter gleefully covering the riots in the UK. Shocking footage of looting and burning buildings, so far from the traditional image of the English on the continent. Whatever happened to the tradition of repressed feelings and the stiff upper lip?Clearly something is terribly wrong with British society. If only they had the sense of community that we French have here in France. Britain clearly can learn a lot about how to organise society from us.

If you cast your mind back a few years you will probably remember British commentators making exactly the same points at the time of the French riots but in reverse. How the French have a lot to learn from the Brits about multiculturalism and how to make minority groups feel included. Maybe that is not too much of a surprise because all coverage of riots in all countries is always the same. The story runs like this a) riots are sign that something is terribly wrong b) the government’s policies are clearly to blame c) something must be done to fix them.

Do riots really mean that something is wrong? The alternative view is that they are a naturally occurring phenomenon like stock market crashes or tsunamis. They happen from time to time regardless of government policies. If you look back in history in any country one conclusion must be this: communities riot. That’s how a level 3 entity loses it’s temper. Its not unnatural for an individual to feel angry from time to time. Quite the opposite, any human who lived their whole life without ever losing their temper would not be human. Likewise with communities and riots. Sudden summer storms clear the air, a build up of static electricity clears with a shock and riots vent community frustrations. Everyone feels much better afterwards. They are not a sign that something is wrong. It’s just part of the natural behaviour of complex systems. It’s a sign that everything is working normally.

Firefighters in California and Australia are coming to the worrying conclusion that the recent spate of costly and highly destructive forest fires are a direct result of their tampering with nature. By being so efficient at eliminating small forest fires for the last century, they have left the woodlands surrounding their towns with an unnaturally large load of dry wood. This sets the stage for an inevitable monster conflagration which, when it comes, is beyond their power to control. Firefighters are coming to the conclusion that they should maybe just let a few forest fires burn every few years along with a few houses too. That way they avoid the big one: a few high tides but no tsunami. So firefighters have learnt the counterintuitive trick of standing by and doing nothing when a fire rages. What chance is there of a politician doing that when a riot happens?

Not much.The reaction to the riots has been hysterical. There is no shortage of ‘reasons’ given for causing the riots: moral decline, absence of authority, lack of religion, poor schooling, government budget cuts, the breakdown in family values, soft policing and consumer advertising. Yes, the last one argues that if you bombard the underprivileged  with too many adverts for high end aspirational consumer goods  in the end they will crack under the pressure and just help themselves by looting. Each of these ‘reasons’ then has it’s own ‘solution’ which you can pick according to your bias and your political agenda. Only a very few commentators, like my friend Harriet Sargent in the Sunday Times, are able to keep a cool head. Looking at the extraordinary diversity of the rioters passing through the courts, it’s clear that there is no one reason. Looters included a postman, a social worker, an heiress and several university graduates along with the usual youth suspects from underprivileged minorities. What links this disparate group together other than a thrill seeking urge to counter the long, hot boredom of the summer?

The hysterical reaction and the rush to find ‘reasons’  is only to be expected. Its the natural  counter reaction of the body politic. Its an involuntary response, like white blood cells rushing to the site of infection. But beyond the hysteria there is another deeper mechanism at work. Engineers call it hysteresis, which crudely speaking means ” you can’t get back to where you started “. Hysteresis is a type of memory or lagging effect that is a common phenomenon in nonlinear complex systems. It is often seen in magnetic devices, thermostats, electric circuits, neurons in the brain, cells when they divide,economic systems and, of course, communities that riot.

A hysteresis loop is characterised on a graph as a rectangle or lozenge rather than a single line. It is ‘nonlinear’ because a particular input can have two different outputs. Think of a thermostat controlling the heating in your house. You want the temperature to be 20 C. You could just set up a switch which turns on or off at precisely 20 degrees but this could get very irritating because the system would be constantly switching on and off every minute. So instead you set up a thermostat with a hysteresis loop that does this : turn on at 18 degrees and turn off at 22 degrees.  Now you have a system that only switches on once or twice an evening and keeps the temperature nicely hovering around 20 degrees. Now consider this: when the temperature is 20 degrees is the system on or off? The answer is it could be both ( it’s a nonlinear system). It could be in heating phase moving from 18 to 22 or it could be in cooling phase moving back the other way. It depends which path the system is on.

In economics,  exports often show a hysteresis effect. It can take a big effort to start up an export program but once it is set up it takes little effort to maintain that momentum. However, once exports begin to tail off it can take another big effort to reverse the negative momentum. So the answer to the question “how much effort is required to get exports to a certain level” is that it depends which part of the path you are on. Just like with the thermostat, there is more than one possible answer when you have a hysteresis loop.

Back to riots. Let’s take one of the ‘reasons’ for the riots: soft policing. We can ask the question “How much policing is required to prevent rioting”. The answer is it depends which part of the path you are on: before the riots not much, after the riots a lot. A community is a complex nonlinear system that exhibits hysteresis effects. It has a collective memory. You can’t put things back to how they were before, at least, not quickly. We need fewer hysterical reactions and more recognition that riots are a natural phenomenon. Communities have hysteresis loops; memory effects and lagging results that will sort themselves out in the end. Like the firefighters, maybe the politicians should have the courage to do nothing.