After Scotland …Federal Europe?

So…Scotland remains in the UK but just under half the population want to leave.  This could be seen as the worst result. Like telling your spouse you hate them, but will stay together for the sake of the kids. That is not a basis for a very happy relationship. The worst thing about the last two weeks has been the uncertainty about the future, and that uncertainty is still there overshadowing any decisions businesses make in the future. The upside, from Scotland’s point of view, is that there will be a massive devolution of powers in their favour. All other separatist movements around Europe take note: the louder the wheel squeaks, the more grease it gets.

The independence debate has been cast a battle between emotion and reason: heart vs. head. The ‘yes’ campaign has made emotional appeals about Scottish tribalism while the ‘no’ campaign has marshalled economic arguments about currencies, bank debt and trade and political arguments about constitutions and EU membership. The two sides could be crudely categorised as an enfranchised local community swayed by populism and a distant metropolitan elite who believe that “nanny knows best”.

The situation has some parallels to what has been happening in Thailand in the battle between the red shirts and the yellow shirts. The red shirts are the numerically superior rural poor whose votes are strongly influenced by populist measures and pork barrel politics. The yellow shirts represent the well-educated urban elite who believe they know what is best for the country. They call themselves Democrats, but still struggle to accept the verdict of the majority because they believe it has been tainted by vote buying and corruption. Street protests by the two sides and government gridlock led to a military coup in May this year.

In 5th century Athens, the birthplace of democracy, there was no such conflict because there was no universal suffrage; only ten percent of the populace had the vote. Your views only counted if you were a land-owning male citizen over the age of 35. Slaves, foreigners, women and youths were all excluded. In fact, if you look for the modern state that most closely matches this ideal of Athenian Democracy today, the surprising answer is China. Some ten percent of the population are members of the Communist Party who conduct a vigorous internal debate before deciding on the future path for the country. What is more, when it comes to economic growth, the system seems to work.

Be that as may be, it is a mistake to view the aspirations of the Scottish nationalists as irrational emotionalism. In fact, there is a quite rational argument for Scottish independence and for all the other separatist movements throughout Europe, which can be summed up as ‘eliminate the middleman’, the middleman in this case being the traditional Nation State.

The essence of the conflict is right there in the name, conjoining the two different concepts into a single descriptive term. The word ‘nation’, from the Latin natio (to be born), implies an interrelated community; a tribe of interwoven families. The word ‘state’ derives from the word estate implying ownership, controlled assets, and power. The nation state faces the threat of being pulled apart into its catataxic components. There is a pull downwards into smaller regional units that better reflect communal identities. This gives a stronger voice to local cultures who feel disengaged from national level politics as evidenced by falling voter turnout across Europe. There is also a pull upwards towards a supranational entity, namely, the EU. Many of the world’s current problems are global in nature and cannot be solved on a national basis. Consider the following list: global warming, corporate tax dodging, banking regulation, global free trade agreements, the Ebola plague outbreak and the threat from Islamic terrorists such as ISIS. All these issues are best solved at a supranational level. A strong argument can be made that defence and security issues sit better at an EU level than a national one. The current crisis in the Ukraine is best countered by a robust response from the whole of the EU (or NATO) rather than by individual countries.

In this three level structure, the bottom level gives a greater degree of democratic representation while the top level gives better economies of scale and ‘safely in numbers’. What need therefore for the middle layer – the nation state – which fulfils neither function very effectively?

This vision of the nations of Europe being dismembered into smaller regional entities under the overarching umbrella of the EU has been regarded with horror by the UK with its tradition of strong control from Westminster. Since it is similar to the current German model of federated states or lander, it is often summed up by the phrase “Federal Europe“ .

What would such a Federal Europe look like? It may come as some surprise to find out that it already exists, at least in the minds of the bureaucrats in the EU’s office of statistics. If you go online to examine the Eurostat database you will find the EU has been gathering economic data on a federal basis since the year 2000. The UK has been divided into 12 federal regions (three of which are Scotland, Wales and Northern Ireland) under an EU devised scheme known as “Nomenclature d’Unités Territoriales Statistiques” which is normally shortened to the acronym NUTS (yes, really!).

Take a look at the map below. It shows the federal regions of Europe (NUTS 1) scaled by GDP. In other words, the size of each region corresponds to the size of its economy while the colour shows the average annual growth rate from 2000 to 2011. There are some interesting points to note:

1. The UK’s growth rate looks poor relative to the rest of Europe. These figures are denominated in Euros and Sterling’s 20% devaluation in 2008 made a big negative impact.
2. Things which are small tend to be green. In other words, smaller regions tend to grow faster. This may be because a common market tends to drag up laggards and is further exaggerated by the fact that EU development funds tend to be channelled to impoverished regions.
3. It’s not just Scotland. There are a lot of other regions that would like to be independent in Europe. All regions with an established separatist movement have been outlined with a purple border.
4. Many of these proposed breakaway states are larger economic units than existing EU countries (eg Latvia, Slovakia, Luxembourg with bold black borders) which offers some support for their viability.
5. The names of the regions have in some cases been changed from a dry bureaucratic definition to something more culturally resonant. For example, South West England becomes Wessex, Romania Region 1 becomes Transylvania and North Region Poland becomes Pomerania.

Map of Federal Europe

It is easy to dismiss such a map as a bureaucratic fantasy dreamt up by statisticians who wish the untidiness of the real world could be neatly filed in appropriate pigeon holes. The dividing lines are arbitrary and in many cases merely drawn to create administrative units of similar size. The resistance to any such devolution from existing nation states would be so great as to be almost insurmountable. Many powerful entities invested in the current status quo would have much to lose. But at the same time, countries who decry the encroachment of the ‘unelected’ EU as an offense against democracy may find the same argument turned against them. After Scotland’s surprising vote, how many other European countries will allow an independence referendum? And if they do not, will their democratic credentials be tarnished?

There is another way of viewing the data that avoids the artificial segmentation of bureaucratic regions. This is to go one level deeper and look at cities rather than regions. Cities, particularly in a service economy, are the true engines of economic growth. A few decades ago, it was the common view that manufacturing industries caused clustering because of the requirement to have parts suppliers in close proximity. In contrast, it was thought that service industries, freed from the drudgery of the daily commute by teleconferencing, the internet and mobile communications, would spurn the cities in favour of a better quality of life in the countryside. In fact, the opposite has happened. The service sector, particularly in high tech, clusters together in cities to a greater extent than manufacturing does. This is mainly due to a happy blend of convenience and hedonism. For the service sector, the people are the product so meetings with clients and suppliers are even more important. In cities, meetings are easier to organise (convenience), there are great restaurants (hedonism), and internet connections are much faster (both!).

If you look at the second map, you will see a map of Europe by city, this time based on population. The size of each circle is proportional to the number of people living in the greater urban zone (both the city and its suburbs). Any urban centres with less than a million people have been omitted. In this view, London and Paris are in a dominant position while Brussels and Amsterdam are showing the fastest growth. Turkey is not currently part of the EU, although if it is admitted at some time in the future it would make a major impact.

CityState

These two maps, then, show two possible futures for Europe. One where increasing devolution favours smaller regional communities and one in which a post-industrial Europe echoes its pre-industrial, medieval past with powerful city states playing the dominant role. Or maybe it might be both. Either way the outlook for the traditional nation state does not look too rosy.

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…

Feudal lessons in tax avoidance

At the top of David Cameron’s agenda when Britain hosts the G8 this year is tax avoidance. In a presentation in Davos in January he called for an internationally co-ordinated clampdown on companies that pay too little tax. In his view companies that don’t pay their fair share needed to “wake up and smell the coffee, because the public who buy from them have had enough.” But he was then quick to point out that the UK had a “great offer” to companies because it was cutting its rates of corporation tax. The speech was strangely schizophrenic, castigating those who did not pay enough tax while trying to seduce at the same time by offering a lower tax rate. A bit like being nagged by a prostitute in fishnets.

The big problem facing the Western world at the moment is that governments are essentially bankrupt. They can’t afford the promises and commitments that they have to the general populace. They need more money which means more taxes and so the corporate sector is an obvious target. But this is not a new problem. It fact, it is so old that it goes all the way back to a time before companies, and even nation states, existed; all the way back to feudal times.

The feudal relationship between a king and his nobles was one of personal obligations: the use of land owned by the king in return for loyalty and military service. Over time wars, intermarriage and complicated inheritance customs resulted in a patchwork of decentralised authority with many overlapping jurisdictions. Nobles could own land in several different kingdoms therefore owing fealty to several different kings. This caused friction and feudal history is, essentially, a history of the struggle for power between kings and nobles with each looking to bribe, cajole or conquer the other.

As the economies in Western Europe developed, trade and wealth began to be concentrated in cities which disrupted the old feudal arrangements. In essence, the cities became a third player in the struggle between the nobles and the kings. This ‘three way’ game had different outcomes in different countries. In Germany, weak kings meant the cities banded together to form leagues (such as the Hanseatic League) to protect their interests against the nobles. In Italy, the cities became large and strong enough to defend their own economic interests and so formed independent city states that resisted the authority of the Emperor or Pope. In France, the cities and the king banded together against the nobles creating a strong central bureaucratic state. The cities and the king had many interests in common, both benefiting from a uniform legal system, a standardised  tax system, good transport infrastructure and a standing military force to keep the peace. In the end, the French model proved to be the most successful and in the Treaty of Westphalia in 1648 most of Europe followed suit and the modern notion of the nation state was born.

What lessons can we learn from this history? We can cast the struggle in catataxic terms like this. In feudal times, the king had legislative authority, the nobles had power (particularly military power) and the cities had wealth. The alignment of the wealth creating cities with the highest legal authority (in the form of the king) against the political power of the nobles was the winning combination.

Now let us replace the feudal chess pieces with their modern equivalents. In this case, the EU is the highest legal authority and the wealth creators are the multinational companies. The nobles with the political power are the national governments. In other words, David Cameron is the equivalent of a feudal baron. If history repeats itself, you can expect the multinationals to club together and pay corporate taxes directly to the EU rather than to national governments. Both parties would benefit from a truly single borderless market in legal and taxation terms. It is the nobles, in this case the national governments who could have the most to lose…

 

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.

Microsoft’s management kills innovation

Vanity Fair this month has a great article titled “Microsoft’s lost decade”. It describes how the corporate giant lost its way and changed from being an indomitable technology Titan to a has-been. Just as IBM did a decade earlier. The reason? A management technique known as “stack ranking”. Every business unit had to rank a certain percentage of its employees as “top performers”, “average” or “poor” and this effectively crippled the company’s ability to innovate. In contrast, Apple (for decades underdog to Microsoft) generates more revenue with a single product  – the iPhone – than the whole of Microsoft Corp.

“Every current and former Microsoft employee I interviewed—every one—cited stack ranking as the most destructive process inside of Microsoft, something that drove out untold numbers of employees,” Kurt Eichenwald writes in Vanity Fair. “If you were on a team of 10 people, you walked in the first day knowing that, no matter how good everyone was, 2 people were going to get a great review, 7 were going to get mediocre reviews, and 1 was going to get a terrible review,” says a former software developer. “It leads to employees focusing on competing with each other rather than competing with other companies.”

This internal competition vs external competition is a catataxic debate and it lies at the heart of the resurgent interest in group selection theories of evolution. The question is whether the natural selection that drives evolution acts at the level of the group or at a genetic level. If evolution is the “survival of the fittest”, then the question becomes the fittest what? Is it the fittest group? The fittest species ? The fittest individual? The fittest set of genes ? This question about “which level rules” is the essence of catataxis.

In social animals such as ants and termites you can clearly see a form of individual altruism: insects that sacrifice themselves for the good of the colony as a whole. This seems to imply that natural selection is operating at the level of the group. However, Richard Dawkins in his book “The Selfish Gene” pins natural selection definitively to the genetic level. He explains the “self sacrificing ants” in a bottom-up genetic way. The ants in the colony are all related to each other; they share the same genetic material. So in sacrificing yourself for the sake of the group you are still indirectly propagating your genes. This genetic cause of altruism is summed up in Hamilton’s Rule which states that the degree of altruism depends on the degree of genetic relatedness. It can be summed up in this grim biologists joke :

I will lay down my life for two brothers, four nephews or eight cousins

Other biologists such as David Sloane Wilson see a group selection argument for altrusim which goes like this: If you mix a group of selfish people and altruistic people together, then the selfish people will always win. They act in their own self interest and exploit the generous altruists. But if you move up a level and observe the competition between groups then you see a different effect. Groups that are full of altruists working cooperatively together outcompete groups full of selfish people fighting each other. So at a group level teams of altruists win, but at an individual level selfish people win. So, turning this around, you can say that wherever you see altrusitic behaviour then it is a sign that competition between groups is a stronger force than competition inside groups. Or, as Microsoft has found out, when management emphasises internal competition the group as a whole will fail.

This “level of selection” controversy is still a hot topic of debate amongst biologists. In this June’s issue of Prospect Magazine,  Richard Dawkins wrote an excoriating review of a book by fellow biologist Edward Wilson titled “The Social Conquest of Earth”. Wilson was arguing for the theory of group selection outlined above. Dawkins violently disagreed. His review concludes “…this is not a book to be tossed lightly aside. It should be thrown with great force…”. This vigorous denunciation provoked a huge backlash. The Dawkins article received more responses than any other in Prospect Magazine’s history. In effect, it was the atheist equivalent of watching the Pope beat up the Archbishop of Canterbury on the steps of St Paul’s Cathedral.

The debate also provides a controversial conclusion for management consultants. If you want your company (group) to win then you should embrace the cult of mediocrity. Suppress internal competition and focus on external competition.

In fox hunting circles, when the Master of the Hounds is training a new pack, he takes the dogs for their first outing in spring to see how they perform. He then shoots both the first few pack leaders and the last few stragglers, keeping the mediocre middle performers because he knows they will form the most effective team.

Could this translate across to corporate management. Is the secret to commercial success to sack not just your worst salesmen but also your best? Let me know what you think….

Lynn Margulis and the Eukaryotic Cell

When you think of evolution what image first springs to mind? It’s probably a hall in the Natural History Museum filled with fossils. All the dinosaurs, trilobites, coelacanths and ammonites together make an awesome menagerie of extinct creatures. The stepping stones of evolution are laid out before you in rock and bone. But there is something wrong with this picture – it’s just depicting animal evolution which means it is only telling part of the story. There are five other kingdoms of life (plants, fungi, protozoa, bacteria and archaea) and animals showed up relatively recently. Life on Earth started 4 billion years ago but the first animals evolved 0.5 billion years ago, half-way through the last quarter of the game. So that fossil hall in the museum is like a history of the world that only covers one continent in recent time. A history of the world that starts with American Independence and never strays beyond its borders. (Yes. I know. For many Americans that really is the history of the world but bear with me)

Most famous evolutionary biologists (Dawkins, Gould, Haldane, Maynard Smith, etc) come from a background in zoology. Their expertise is in the comparative study of animals. Lynn Margulis, who died aged 73 in November last year, was different. She was a microbiologist who focused on the evolution of eukaryotic cells (cells with a nucleus) and became convinced that the scientific consensus was wrong. The mainstream thinking was that the engine driving the evolution of species was random genetic mutation in which only the fittest survived. Margulis agreed that natural selection picked winners but disagreed about how the competing variants were created. She believed that evolution was driven by the symbiotic cooperation of organisms: the competitors in the race worked together rather than competed with each other. The mainstream saw the creation of new species as a divergent process; just as twigs and branches diverge from the trunk of a tree. Margulis believed that new species were created by a process of fusion and merger. She wrote a paper about it in 1966 called “ Symbiogenesis: the origin of eukaryotic cells”.

And then nothing happened. In fact, worse than nothing. Fifteen academic journals rejected her paper. One actually said “Your research is crap. Don’t ever bother to apply again”. Maybe it was because she was a woman. Maybe it was her abrasive personality and appalling temper. After extensive reworking, she finally managed to get her paper published in the Journal of Theoretical Biology. It was a groundbreaking piece of work. For the first time, the evolution of cells had been properly examined: a history of a continent that was not America had been published. The response from the mainstream was…..complete silence. No one bothered to respond because no one really cared.

And then, very gradually, the years passed and data began to trickle in to support her theory. A single cell is more complex than you might imagine; it’s more than a nucleus in a little sack of protoplasm. The diagram below shows that there are 13 different entities inside it. The crucial evidence to support her theory came when scientists discovered that some of these entities had DNA that was different from the nucleus. The DNA of mitochondria, chloroplasts, basal granules and plastids is not the same as the DNA in the nucleus. This implies that a cell, the fundamental building block of all animals, is a fusion of different bacteria-like creatures. At some time in the past, a group of different bacteria clumped together to form a eukaryotic cell. This cell was dramatically more successful that the individuals composing it and became the basis of all higher lifeforms. The living creatures that we see around us all stem from that initial cooperative merger. Nature is not wholly “red in tooth and claw”.

1. Nucleolus
2. Nucleus
3. Ribosome
4. Vesicle
5. Rough endoplasmic reticulum
6. Golgi apparatus (or “Golgi body”)
7. Cytoskeleton
8. Smooth endoplasmic reticulum
9. Mitochondrion
10. Vacuole
11. Cytosol
12. Lysosome
13. Centriole

 

 

 

Lynn Margulis’s theory has now become scientific orthodoxy and her book “Symbiosis in Cell Evolution” is seen as a classic of 20th century biology. Her concept of symbiogenesis is at the core of the fifth catataxic maxim “Today’s groups are tomorrow’s individuals”. Time acts to drive individuals up the catataxic ladder. In a social history of the world, families become tribes, tribes become nations, nations become empires and all long before the founding of America. So too in biology. Bacteria merge to become eukaryotic cells, single cell creatures merge to become multicellular plants and animals, and the resulting flora and fauna knit together to form complex ecosystems.

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.

Are ye going to Tewkesbury Fayre?

dog face bascinetI spent last weekend at Tewkesbury Medieval Festival helping my brother promote his new book, Kings Man, the third in his series The Outlaw Chronicles about Robin Hood. The festival is held to commemorate the Battle of Tewkesbury in 1471. This was the final battle of the Wars of the Roses in which Prince Edward, the heir to the House of Lancaster, was killed.

During the festival, the whole town is decked out in medieval flags and the streets throng with knights in armour and medieval re-enactors. It all culminates with a big battle down by the river on the historic battleground. A riot of cannons, men at arms and pikes as the Lancastrian and Yorkist armies clash. It is a big festival which has been going for 25 years but there are plenty of others which are popping up all over the place; not just in Britain but in France, Belgium and Eastern Europe too.

Historical re-enactment is a booming market these days. At the Tewksbury festival there are countless traders stalls selling medieval gear; hauberks, hose, vambraces, gauntlets, broadswords, smocks and jerkins. Fancy something special for the weekend ? How about a dog faced bascinet? There are so many different stalls it finally dawns on you that this is a big business. You have stumbled upon an underground fetish scene; not sexual but cultural. And it’s coming out of the closet to a town near you!

Tewkesbury Medieval Festival
Re-enactors at the Tewkesbury Medieval Festival

The big question is this: why is it suddenly so popular? The answer, although an oblique one, is in the title of a new exhibition that has just been announced at the V&A Museum: Postmodernism – Style and Subversion 1970 – 1990. Yes – notice that last date! This is a retrospective exhibition. That means postmodernism is officially over.

Post modernism was always a difficult concept since it sounds like something “after the future” and how can some thing be after a future that has not happened yet? The best way to explain it is like this. Modernism, as an artistic movement, had a tremendous sense of earnest optimism about the future. It believed that art could morally improve people; that a modernist skyscraper could improve your life. Postmodernism went in the opposite direction, not optimistic but ironic, not earnest but mocking. So where can you go next ? What is post postmodernism? After the earnest futurism and then the ironic futurism what is the next stage in the cycle? Logic dictates it must be the earnest past.

And lo, the pop charts are filled with folk music again. Mumford & Sons and The Arcade Fire are the hot new groups. And the streets of Tewkesbury overflow with people dressed in medieval tunics seeking community in the past: a secular commonality from a shared history to soothe the fits and agues of the modern world. Anywhere else, you would be arrested for wandering the streets after dark with a four foot blade in your hands. At the Tewkesbury festival, the pubs are welcoming you in for another drink.

You may be wondering where the catataxis comes in. Well, there I am in a pub dressed in a monk’s habit with a Spanish guy dressed as an elegant nobleman to my left and a French bloke in a man at arms outfit to my right. I am pointing at my costume and trying to explain a joke about ‘dirty habits’ but it does not come out so well in the translation…and suddenly it hits me. I am in a pre-national Europe. In 1471, there were no nation states. There were powerful barons, principalities, duchies and territories in a complex patchwork throughout Europe. Henry VI, King of England was also, for 30 years, the King of France too. Countries, as we know them today, did not exist. The Nation State, level four in the hierarchy that goes up from individual to family to community, does not yet exist.

And right there, in the beery good cheer of a friendly pub, surrounded by Europeans in fancy dress it strikes me that there is nothing to fear about a federated Europe. Maybe the time has come for the post Nation State, a return to a complex patchwork of entities under an EU umbrella. The resolution of the Greek Debt Crisis will be to push us all in that direction. Maybe the V&A museum will soon hold a retrospective exhibition called The European Nation State – Power at the 4th degree 1648 – 2018. After all, we do share the same values, the same history, and since I got the phone number from the elegant Spaniard, the same medieval outfitter too…

The Hop Exchange

The Hop Exchange, Southwark, London
Exterior of the Hop Exchange, Southwark, London 2011

I was working on a local history project in Kent (where I live) when a friend gave me some old photos. They showed men in frock coats handling hops on long trestle tables. These are city workers handling an agricultural product. It took me some time to track down where the photos were taken.  It turns out they were hop factors in the 1920s, working in 15 Southwark Street opposite the Hop Exchange in London.

The hop trade was once a major industry in Southwark. Back when there was only one bridge over the Thames (London Bridge) everyone passed through  Southwark . Its coaching inns and breweries have been famous since Chaucer’s time; this is where the pilgrims gathered before setting off for Canterbury. There was plenty of traffic up the other way too. Kentish hops, grown in the Garden of England, came up the A2 and the Old Kent Road to the market traders in Southwark Street, around the corner from Borough Market.

Hop factors at the exchange
Factors working near the Southwark Hop exchange in 1920s

The hops were dried in oast houses and then tightly compressed into 6 foot sacks called ‘pockets’ and sent up to the middlemen, known as hop factors, in Southwark Street.  Each load was sampled by cutting a foot square brick of pressed hops out of one of the pockets. This cube was wrapped in brown paper and secured with brass chair nails. Samples from a particular grower were all strung together with waxed hemp.

Another set of middlemen, the hop merchants who acted for the brewers, came to inspect the samples. These photos show the merchants (e.g. man in top hat on left) examining the hop samples displayed by the hop factors.  The room is starkly functional. A big glazed roof lets in plenty of natural light to help the inspection and a big clock to measure opening and closing times. Nothing else. No decorations at all.  After all, this is a serious place of business.

Hop production peaked in Kent in 1878 and has been declining ever since.  Kentish hop varieties, such as Fuggles and Goldings,  add bitterness to beer and ales, whereas German hops have low bitterness and strong aroma and are used for lager. So a number of trends conspired in the decline of the Kentish Hop industry. First was the trend towards lager over bitter. Second was the decline in exports as Australia and South Africa began growing their own  hops. The third blow came in 1973 when Britain joined the Common Market and cheaper continental hops wiped out most of the growers in Kent.

Bomb damage in WW2 meant that many warehouses were rebuilt in Paddock Wood in Kent and the hop merchants moved what was left of the industry down there in the 1970s.The last hop merchant, Wolton Biddell  in Borough High Street, closed its doors in 1991.  All the buildings have been redeveloped. The area around London Bridge and Borough has become one of the hottest development areas in London as evidenced by the Shard, Europe’s tallest building to be completed next year.  The old Hop Exchange has become a general purpose office building.

Interior of the Hop exchange
Inside the Hop Exchange, Southwark London, 2011

But what a beautiful building. Opened in 1867 and designed by R.H.Moore it is now Grade II listed. When you step inside you can see the vast open atrium and the three tiers of balconies overlooking it. It is designed to allow ‘open outcry’ ; traders on the floor, merchants on the balconies shouting their orders back and forth to each other.  Its just like the old stock exchange before it became computerised, or the Royal Exchange where futures were once traded but which is now an upmarket shopping mall.  The Lloyds Insurance building has the same “atrium and balcony” design,  letting all the brokers hear the stroke of the Lutine bell to inform them of bad news. In the hop exchange, all the balconies bear the  crest of Kent – a white horse on a red shield – to remind occupants that this is the trading place for Kentish hops.

I live opposite a oast house and travel to London Bridge every day. The oast house across the road from me has been converted to a spectacular county home. My daily journey encompasses the agricultural history of Kent both at the beginning and end; from an oast with no hops to a hop exchange with no brokers. A palace for a product that no longer exists. There are plenty of brokers getting off the train at London Bridge these days, but they are not broking hops any more but financial products instead.

You may be wondering where the catataxis comes in all of this. This tale is not just a personal trip of nostalgia,  because there is one more twist to the story: the hop exchange was never full of brokers.  The Victorian developers built it in a burst of progressive optimism hoping to capture and consolidate the hop trade inside its walls. But the hop factors and merchants already had their own various premises and saw no reason why they should move. So the hop exchange has only ever been a general office building and not a commodity exchange at all. It was an attempt to anchor the level 2 activity of the hop trade inside the level 1 physical shell of a building which failed.

Oast houses in Kent
Oast Houses in Chiddingstone Kent

The Victorians were keen on making the abstract concrete. Think of the statues of “Trade” or “Progress” that adorn Victorian metropolitan buildings. These are industrial versions of the ancient Greek muses; abstract concepts  in female form. The Hop Exchange was an attempt to cast economic activity in architectural form. Sadly, it did not work. This building designed to house speculators was itself a speculative failure. This was a catataxic blunder. Just because a building exists at level 1 does not mean that the trade at level 2 will be captured by it. In this case, the motto is: if you build it, they will not come.

See more photos of the building here:

Apocalypse (not right) now

Harold Camping, an 89 year old televangelist, has spent the last 8 years preaching that the end of the world will occur on 21st May 2011. He spread his message through the Family Radio network in the USA. His followers sold all their positions to raise more than $100m in assets to fund a media campaign. On that day of judgement, true believers would ascend to heaven in “The Rapture” with everyone else dying in a cataclysmic wave of earthquakes. Of course, on the day nothing happened. Shamefaced proselytisers returned to their place work the next day. The world carried on as normal, beset by the evils of globalisation and the rising threat of terrorism which can be taken as a sign of God’s displeasure.

Globalisation and the rising threat of terrorism? We have all been here before. Cast your mind back to 1900. The world’s economy is truly global with little hindrance to the flow of goods and people. Western investors are pouring money into emerging markets: Brazilian rubber plantations, Chinese railways and African mines. Passports do not exist and emigrating just means catching the next ship to anywhere in the world to seek your fortune, whether you are an Irish farmer, an Indian shopkeeper or a Chinese labourer. This globalisation exists because most of the world is under the control of European empires.

At the same time, many heads of State are being killed by anarchists or, as we call them today, terrorists. In a few short years around the turn of the century the Austro-Hungarian Empress Elizabeth, King Umberto I of Italy, the King of Serbia and the US President McKinley are all assassinated. A decade later, the assassination of Archduke Franz Ferdinand of Austria triggers World War 1, a nationalistic war between empires.

Recognising the dangers of nationalism, the first supranational organisation, the League of Nations is set up in 1919. Sadly, this is too weak to prevent the even more destructive nationalistic conflict of World War 2. The second attempt in the form of the United Nations has a longer shelf life. It still exists today, as do other supranational organisations such as the EU, the IMF and the International Court of Justice. But consider this. If it took the horrendous, destructive conflict of World War 2 to create these dysfunctional, toothless, supranational paper tigers, just how bad must things get before sovereignty is passed up to an entity that can really fix today’s problems.

Take global warming or the depletion of the world’s fish resources. Although international organisations exist that theoretically address these issues they have no power. Sovereign states rarely wish to pass up their sovereignty to a higher entity. It is possible to coerce them. The last time this was attempted was the US Civil War. The northern states forced the southern states to join the club and submit to a higher federal government. Higher level entities are forged in the furnace of conflict. The carnage of the US Civil war was hot enough to fuse the United States together. Unfortunately, World War 2 was not ferocious enough to make a powerful United Nations, despite the death of 60 million people. It created something, but it was something too weak to properly address global issues.

In the late 1940s, most of the world was impoverished and happy to follow orders after years of war. Today we have TV, the internet, sexual liberation and the consumer society. There is far less chance of citizens doing what they are told voluntarily. Just think how hot the fire would have to be to sinter those disparate citizens together into a common purpose.

So there might be one good thing that could arise from a forthcoming apocalypse. It could give birth to a global institution capable of solving our environmental problems. As the Vietnam general said “ It may become necessary to destroy the village in order to save it”