Warring twins on Wall Strasse

Warring TwinsTwo key concepts of the modern world were born at a similar time. The joint stock company appeared in the early 1600s with the English and the Dutch East India Companies as early examples. Then, in 1648, comes the Treaty of Westphalia which establishes the principles of the nation state . Both are abstract concepts: one economic, one political. Both are catataxic in that they are second level entities . They exist one level above the world of flesh and blood. Despite that, they are destined to fight each other with all the competitiveness of warring twins.

For a long time, country dominates company. Corporations are seen as national entities. In the most extreme cases like the East India Companies they become effectively an arm of their respective governments. As the industrial revolution comes, industrial prowess is seen as a form of nationalism. Steel production is used as measure of national potency for communists and capitalists alike. Breakthroughs in the chemical industries are seen as national secrets to be kept from foreign spies; secret formulas that are the macguffin at the heart of many adventure stories.

Then, starting in the 1950s, things begin to change. The company ceases to be national and becomes multinational. It is no longer contained by national boundaries. The key underlying economic inputs cease to be national too. Raw materials, labour and capital were originally national possessions but this is also in flux.

Raw materials become freely available to the highest bidder as colonialism breaks down and international commodity trading expands dramatically. Remember that the Japanese bombing of Pearl Harbour was all about access to raw materials. Labour frees up next. The shortage of workers in Europe prompts a big influx of immigrants. Multinational companies create openings for executives worldwide. Well educated people can get a job anywhere around the world. Then capital is set free when currencies move off the gold standard and exchange controls are abolished in the 1970s.

As a result, countries no longer control the levers of economic power. The second twin becomes ascendant, company becomes dominant over country. The economy is no longer national but global. The general populace still seems to find this fact hard to grasp. Companies are not national assets. They don’t belong to a country but to shareholders. The takeover of ‘national’ companies by foreigners is still anathema. This confused sentiment is catataxis: an attempt to apply out-of-date national rules to an international creature.

France is notoriously touchy about its ‘national champions’ . When Danone, a dairy products group, is threatened by takeover in 2005 the French Government drafts a special law to protect it. It seems yoghurt is a strategically important product for the French. But feelings in the UK still run on similar lines, hence the public moaning about Kraft’s recent takeover of Cadbury.

A better example of misplaced corporate nationalism is the confused sentiment about the ‘British’ film industry. Star Wars and the Indiana Jones movies were shot in Elstree , lovingly made by British craftsmen. Are they British movies? What about a Wallace and Gromit movie financed by a Hollywood studio? Or Scorsese’s “Gangs of New York” which was financed by a British producer ? Films may have a language but do not really have a nationality. Neither do companies.

The USA, which has gained most from globalisation, seems strangely intolerant when it comes to foreign takeovers. In the 1990s, Congressmen smashed Sony Hi Fis on the steps of the Capitol to protest a wave of Japanese takeovers. These fears have now been shifted to China. A string of proposed takeovers of US assets by Chinese companies have been refused in sectors including steel, mining, media, shipping and telecoms. Don’t feel too sorry for them because the Chinese are equally protectionist back.

The most recent twist in this tale is the proposed takeover of the New York Stock Exchange (NYSE) by the German exchange Deutsche Borse . This is stirring up nationalistic sentiment in the States again. It comes as a surprise to some that stock exchanges are not public institutions but companies that can be bought and sold like any others. So the takeover of the icon of American capitalism by the Germans rankles. But, of course, stock exchanges don’t have any real national identity either. The London stock exchange is merging with the Canadian exchange, and Singapore likewise with Australia. In the end, there is one big pool of capital trading on global exchanges free of national identities.

In Rome’s foundation myth, Romulus slays Remus and then names the city after himself. In a newly merged Wall Strasse we will see the triumph of another twin. The joint stock company slays the nation state to found a catataxic city at the heart of a new financial empire.

A murmuration of starlings

Catataxis means “more of the same is different”. Warhol’s silkscreen prints of 32 Campbell’s soup cans seems to say “more difference is the same”. In his wall of near identical soup cans, each is different “variety” but they are all essentially the same. In other words you may have ‘choice’ but no real variety.  Choosing one of them is no real choice at all. That static image, made in 1962, was a portentous warning of the future.  You probably feel it most today when you are surfing through the 999 channels on your satellite TV. You have far more ‘choice’ than twenty years ago but there is nothing you want to watch.

Warhol’s soup cans miss one  key feature: things are not static but dynamic. Computer generated imagery ( CGI) on those TV programs fills in the background crowds in a battle scene, or adds the herds of dinosaurs in a science documentary.  They can make realistic crowd behaviour by using a ‘flocking’ algorithm. This has three simple rules: go in the same direction as everyone else, try to be in the middle and don’t bump into other people. By instructing each computer generated agent in the crowd to follow those rules they create  realistic  flocking behaviour; the herd of dinosaurs looks real.

Those three rules of flocking behaviour are also the rules for the supermarket buyer or TV executive. We can take them one by one. First, you have to follow the current trend. You have to respond to what is popular or you will have no customers. Second, you have to be in the middle. Your job is to get as many customers as possible and, by definition, they are clustered around the middle. Third, don’t bump into other people. Your product needs to be slightly different or you will get sued for copyright infringement.

The reason why everything on TV looks a bit the same is that the people who commission the shows are  flocking. So a better metaphor for consumerism than Warhol’s soup cans is a flock of starlings on a winter evening. As the birds group together in the darkening sky, the patterns they make coalesce and fragment unexpectedly. Three simple rules make something complex and startlingly beautiful. It is jittery, unstable, individually free but bounded by the group and impossible to predict. It is a group effect , a catataxic effect. This is the modern consumer economy: an evening murmuration of the starlings

The instability comes from the balance of two opposing forces. There is the push of trying to be different and the pull of trying to belong. This is classic teenage angst. It’s no coincidence that advertising gurus peg the aspirational age at 17. This is the age that everyone in the modern consumer economy would like to be. It is the nexus of cool. Those younger than 17 want to be just like those older kids. They aspire to the maturity and freedom of a 17 year old. Those older look to recapture their youth. So if you pitch your product at 17 year olds you will hit a much broader market. That’s where trends are born. It’s the centre of gravity of the starling flock.

How to be immortal

The first human became immortal in 1951 in a laboratory in Johns Hopkins Hospital in Baltimore. A cell line was created from a tissue sample from a cancer patient called Henrietta Lacks. These “HeLa” cells have since been used for medical research throughout the whole world. They were used to develop the first polio vaccine in the 1950s and for research into cancer, AIDS, radiation, cloning and genetic mapping. Some 300 scientific papers a month are published about research using HeLa cells. This story is told in the book “The Immortal Life of Henrietta Lacks” by Rebecca Skloot.

Human cells can grow outside the body so long as they are kept in the right conditions. They need a cell culture plate, the right temperature and a mix of nutrients and gasses. Most cells can only divide around 50 times before they die. This is known as the Hayflick limit. It is caused by an accumulation of small errors when replicating the DNA. The key factor is the length of the telomeres at the end of the DNA strand. The more the DNA is copied, the shorter the telomeres get.  Cancer cells have an enzyme called telomerase which protects the telomeres. That is what makes cancer cells infinitely replicative. Cancer cells kill you because they are immortal and you are not. One goal of cancer research is to find something to inhibit the telomerase and make them like normal cells which age and die.

Cells get more complicated the closer you look at them. A body has organs like the brain, liver or heart to do specific tasks. Cells have similar subsystems called organelles. The typical parts of an animal cell include a nucleus, mitochondria, a Golgi body, vacuoles, ribosomes and lysosomes. In fact, a cell looks like a complete organism in its own right. A cell respires, digests, excretes and reproduces – all you could wish for in a good husband. There is even a form of cellular memory exhibited in the immune system.

The ‘cell as organism’ proposition should not come as a surprise. Single cell creatures were the only form of life on earth for the first 2 billion years, so they are quite capable of looking after themselves. Multicellular creatures like us evolved from loose colonies of single cell creatures. So a human being can be viewed as the emergent result of a community of 50 trillion cells.

The family of Henrietta Lacks started a law suit to claim financial compensation for the use of the HeLa cells. This is where the catataxis comes in. Is the HeLa cell line still in some way Henrietta Lacks? Did she die in 1951 or is she still alive?  If someone is selling vials of your mother’s cells, do they belong to you?  The Supreme Court of California says no. Their ruling is that a person’s discarded tissue or cells are not their property and can be commercialised. Tell me what you think…

Kyrgyzstan and Winston’s Hiccup

The recent unrest in Kyrgyzstan looks like a Balkan crisis.  Gangs of masked thugs have started a campaign of ethnic cleansing of the Uzbek minority in the south. Almost half a million Uzbeks have been displaced from their homes in an orgy of rape and murder. Their homes have been looted and torched to stop them coming back. Its a strategically important country for Russia and China since it is on both their borders. It is also important for the USA who have an airbase outside the capital Bishkek, which supports their efforts in nearby Afghanistan. Just like the Balkans, it is a geopolitical hotspot with a mismatch between the patchwork quilt of ethnicities and the national borders.

This is catataxis. It is a conflict between two levels: a nation and a State. I mean nation in the old sense of the word. It is s a group of people sharing a language, culture or ethnicity. So we can still talk about the Cherokee nation, or the Roma who are a nation without a country. A State is a sovereign territorial unit. It is a political and geographical entity. So there is a hierarchy of levels like this:

1) Person
2) Family – a group of related people
3) Community – a group of families
4) Nation – a group of communities with the same ethnicity and language
5) State – a sovereign territorial unit composed of one or more nations. A Geopolitical entity.

So the unrest in Kyrgyzstan is a catatactic friction between levels 4 and 5. So was the war in the Balkans in the 1990s and many of the post colonial African conflicts. The ethnic borders don’t match territorial borders.

The drawing of territorial borders is often arbitrary. The most famous example is Winston’s Hiccup. Its a huge zig zag on the border between Jordan and Saudia Arabia. Legend has it that Winston Churchill had a long liquid lunch on a Sunday afternoon in Cairo. When he came back to his desk, he hiccuped while drawing the new border for Transjordan. Hence the dramatic twist in the line.Since it was mostly desert no one really cared.

In fact it is an apocryphal story. The border takes account of ancient incense trading routes and Britain’s need at that time for an air corridor to India. But the notion that State borders are an arbitrary higher level intrusion into a complex ethnic landscape is valid.  It is catataxis: a confusion between levels. It has always been a source of conflict and remains so today.