Thursday, December 18, 2014

Retail Liturgy

Retail therapy has become retail liturgy: an exercise in public worship shared and practiced by believers in the transformative power of shopping. Dundrum Shopping Centre is the Pro-Cathedral of retail liturgy, and the Blanchardstown Centre is Christ Church Cathedral (though I might have my denominational allusions confused).

The idea that shopping has become a form of collective worship is one developed by James K A Smith.  His Theos talk - The Secular is Haunted - introduces Jamie's thoughts on Canadian philosopher Charles Taylor's ideas about secularism, including our need for liturgy - sacred or secular.  I'm also reading Jamie's introduction to Taylor - How (Not) to Be Secular - and it is a delightful read.  Anyone who can weave Radiohead, David Foster Wallace and Augustine into a narrative knows how to engage his reader.

Christmas, of course, has a special liturgy all of its own.  Indeed, just as many feel compelled to go to church at Christmas time but not other times of the year, many (albeit mostly men) feel compelled to go shopping at Christmas time but not other times of the year.  Funny enough, you get carol singers participating in both liturgies...

Maybe it's me, but this Christmas seems a bit more 'manic' than previous Christmases, though that might simply be the end of the recession (for some) and people enjoying a bit of a 'blow out' after all the lean years.  Or it might be that the continued substitution of the secular for the sacred in our post-Christian society makes us even hungrier for shared experiences of belonging and transcendence - even if it is in a shopping centre.

But don't get me wrong - I'm glad for the retailers that they are having a 'good' Christmas after all they (and we) have been through.  Still, we should beware the dangers of our new secular liturgies.  As Arthur C. Brooks suggests, we should celebrate abundance but avoid attachment.

Easier said than done, of course.  I personally don't see the need for a new range of Louise Vuitton handbags, but a new iPhone 7 would undoubtedly be an historic step forward for all mankind. Though womankind might beg to differ...

Tuesday, December 16, 2014

Escaping Velocity

The year is ending with a bang rather than the usual seasonal whimper. The cold war on Russia has warmed up via the foreign exchange markets. And mass murder came to a school in Pakistan this week. Meanwhile back in Ireland the 10 year sovereign bond rate has fallen to its lowest level ever:

We're in good company: half of all the government bonds in the world yield less than 1%.  Apparently investors are spooked by what's happening to everything else (stocks, commodities, you name it). Could it change? Sure, the Russians increased their interest rate to 17% from 10.5% overnight. Though that's the kind of interest rate increase nobody wants right now.

On the other hand, Andrew Haldane thinks low interest rates could be with us for the next 40 years or so. Which is fine if you are a borrower - but not so good if you are a bank: Europe's commercial banks will be crushed if that continues.  It doesn't look like we're about to escape the gravitational pull of the zero interest black hole any time soon. 

Still, at least we'll have a few referenda to distract us from our predicament next year, though events abroad might prove even more distracting in the meantime. 

Monday, December 8, 2014

None of The Above

The rise in support for 'Independents' in recent opinion polls (now at 32% in the latest Irish Times poll), is another Irish solution to an Irish problem. So what is the problem? In short, we don't have the equivalent of UKIP. There isn't a political party/leader articulating the frustrations, fears and preferences of a large section of the Irish electorate: so instead we get a siren chorus of Trotskyists with backing vocals by a few celebrity Independents - lots of noise, but little leadership.

Of course, the key word is 'equivalent' when it comes to UKIP. Ireland doesn't have the same issues (or should that be 'obsessions') with membership of the EU and with immigration (especially from outside the EU) that vexes so many in the UK and has undoubtedly helped the rise of UKIP. So there's no future for a party in Ireland that simply lifts the UKIP agenda and tries it here. But we do have something of the same experience of alienation from the democratic process that many have felt across the water. That alienation, however, has little to do with the Left-Right political spectrum beloved of so many Irish political correspondents who hope that - finally - we might be a General Election away from a 'real' choice between left-wing and right-wing parties. I don't see it myself.

Instead I am thinking of the alienation David Goodhart describes between Metropolitan Liberalism - dominant in the media, academia and mainstream political parties - and Popular Liberalism - dominant among those who prefer 'None of the Above' when it comes to the very same mainstream political parties. Goodhart has written a fascinating paper for Demos on the subject, and his recent talk at Theos expands further on the themes in his paper. In his Theos talk, he presents a check list on what differentiates Metropolitan Liberals from Popular Liberals along seven key political dimensions, which I've captured it in the chart below (note, it's my derivation of his check list from the audio track, so any errors are mine):

Goodhart quite explicitly sees the rise of UKIP as a result of the failure of mainstream UK parties to articulate and champion the values of those who are Popular Liberals. On a wide range of broad political and economic issues, there are fundamental differences in the values that drive the elite and drive much of the electorate on issues such as welfare, mobility, freedom and belonging. It isn't all, or even mostly, about immigration and the EU.

I believe something similar is happening in Ireland. A great many people in Ireland (away from the self-reverential bubble that is the Dublin media landscape) are deeply disaffected by what is happening to the country - economically, socially and culturally. And it isn't all about 'blaming the government' or water charges. They have no voice, or so it seems, and in the absence of mainstream leaders articulating their worries and wants they grab hold of whomever else feels like they might do the job. The rise of the Independents is our UKIP moment. Whichever party (existing or new) grasps the Popular Liberal agenda will enjoy something of the same success as Nigel and the 'Ukippers'.

Next year's General Election in the UK will probably inspire some to try it...

Sunday, November 16, 2014


Excarnation - a word I'd never heard of before two weeks ago, and have heard several times since. Here's Richard Kearney explaining it, during a superb broadcast on the nature of evil in the 21st century:

It's true that our contemporary postmodern communications-digitalised age is one where we are in a sense immunised from others in this space, which is very safe. It's very vicarious, sometimes it's voyeuristic. We're living at a distance, a bit like Plato's figure of Gyges, you know, his ring. He can see everything but nobody can see him. And in a way the culture of internet and Facebook and so on in extraordinarily rich and creative in terms of putting us into contact with so many people... 
But the other side of that is that you're in your little bubble, where you are presenting a face, and seeing faces, and at a safe distance. So what seems like universal interconnectedness, or interdependency to use a Buddhist term, is in fact in many respects an extraordinary form of isolationism, where all these little autonomous sovereign egos in front of our screen. 
I think Charles Taylor makes a very good point in his book A Secular Age when he says that our contemporary society is very often guilty of what he calls "excarnation," that we have become more and more and more disembodied. We've kind of entered into an immaterialism. Materialism is denounced as the great evil of the age, and that's a certain kind of consumerist commodity materialism and I agree. But actually it's an immaterialism of living in a spectral, vicarious simulated world - which is how indeed the whole advertising commercial industry lives.
Excarnation explains a lot about the strangely dissociated world many find themselves in nowadays. On the one hand we have 'Faceboast' turning us into narcissists, defined by Simon Blackburn (in a zeitgeist-ful essay called Know They Selfie in Aeon magazine - whence the image above):
The narcissist is not so much conceited – where there is a relationship of arrogance or contempt towards other people – as solipsistic, or in a world where he is the only person. Thus in the original myth, the only voice that Narcissus hears is that of the nymph Echo: in other words, his own voice thrown back at him. Others are invisible and inaudible. And we are told that eventually the erasure of other people kills Narcissus. In his self-absorption and self-obsession, he is as good as dead.
Not everyone loves themselves, like Narcissus. Instead, we have epidemic levels of loneliness, depression and suicide. All of them, in one way or another, a result of excarnation and the loss of real community and shared purpose that goes with 'an immaterialism of living'.

What to do about it? In E F Schumacher's last book - A Guide for the Perplexed - written long before the invention of the selfie, he quotes Theophan the Recluse (1815-94) on how to deal with the distractions of 'excarnation' thus:
For so long as the mind remains in the head, where thoughts jostle one another, it has no time to concentrate on one thing. But when attention descends into the heart, it attracts all the powers of the soul and body into one point there.
Or, to paraphrase Timothy Leary: log out, turn off, join in...

Sunday, November 9, 2014

Citizens Not Subjects

The fall of the Berlin Wall twenty five years ago has been rightly celebrated these past few days. It marked the end of an experiment in centralised economic control that had clearly run its course.

The debate about how much further we can or should go with decentralising the economy - and politics - is, if anything, gathering momentum. Chris Dillow asks the question, if 'command and control' economies were such a bad idea, then why shouldn't the same process of 'decentralisation' be applied to 'command-and-control' corporations?

I think he has a point - though not necessarily from the Marxist perspective Chris brings to bear. Clifford Longley argues in Just Money: How Catholic Social Teaching can Redeem Capitalism that we need to strike a new balance between the State, the Market and Civil Society. Funny enough, I think the emerging ethos of transparency (sort of) in relations between citizens and government, consumers and businesses might nudge us in that direction.

I love the UK Government's initiative to make the tax system more transparent by sending every citizen a statement showing how their income tax and national insurance contributions have been spent. Something that would have been unheard off on either side of the Berlin Wall 25 years ago. Perhaps the Irish Government will follow suit - some time in the next 25 years.

We are citizens not subjects nor comrades, and we must remember that not all walls between the holders of power and the rest of us are made of bricks and barbwire.

Friday, November 7, 2014

Losing Control

Once again, Japan points the way (and we don't want to go there):

In short, everything the central planners have tried has failed to bring widespread prosperity and has instead concentrated it dangerously at the top. Whether by coincidence or conspiracy, every possible escape hatch for 99.5% of the people has been welded shut. We are all captives in a dysfunctional system of money, run by a few for the few, and it is headed for complete disaster. 
To understand why, in all its terrible and fascinating glory, we need look no further than Japan.
via Hang The Bankers

Do read the rest, perhaps with Joy Division's Control playing in the background:

And she showed up all the errors and mistakes,
And said I've lost control again.
But she expressed herself in many different ways,
Until she lost control again.
And walked upon the edge of no escape,
And laughed I've lost control.
She's lost control again.
She's lost control.
She's lost control again.
She's lost control.

Tuesday, November 4, 2014

Beyond Banality

"Really, Doctor Cors, the evil to which even you should have referred was not suffering, but the unreasoning fear of suffering. Metus doloris. Take it together with its opposite equivalent, the craving for worldly security, for Eden, and you might have your 'root of evil', Doctor Cors. To minimize suffering and to maximize security were natural and proper ends of society and Caesar. But then they became the only ends, somehow, and the only basis of law - a perversion. Inevitably, then, in seeking only them, we found only their opposites: maximum suffering and minimum security."
From A Canticle for Leibowitz by Walter M. Miller Jr.
A recent break in Krakow, Poland took me on a day trip to Auschwitz. It left a lasting impression. As I walked around the huge complex of Auschwitz-Birkenau, which at its 'peak' employed some 7,000 people, I kept thinking of Hannah Arendt's comment on the 'banality of evil'. She was not suggesting - as her detractors unfairly inferred - that the industrial scale mass murder that took place in the extermination camps was somehow trivial. Far from it. She was simply trying to grasp how evil on such a scale could happen and the answer was obvious:
The sad truth is that most evil is done by people who never make up their minds to be good or evil.
There are plenty of psychopaths and sociopaths in the world, but not enough to run a death camp. Indeed, as Kevin Hart observes in a magnificent, two part series on the implications of evil for the 21st century on ABC's RN (easily the smartest religious programme in the English language):
The Holocaust, Auschwitz was the great passion of the Jews, as Emmanuel Levinas says, and in completely agreeing with that I would add that it is a passion also, or should be, for Christianity. The most horrifying thing for Christians, it seems to me, the twentieth century, is the thought that the people who murdered Jews in a mechanical way at Auschwitz all knew their Catechism. 
The two part series also features Ireland's greatest living philosopher-in-exile Richard Kearney. Well worth the listen for that alone (although there's much, much more besides).

Another philosopher, John Gray, has recently analysed the problem that modern, liberal societies have with evil:
In its official forms, secular liberalism rejects the idea of evil. Many liberals would like to see the idea of evil replaced by a discourse of harm: we should talk instead about how people do damage to each other and themselves. But this view poses a problem of evil remarkably similar to that which has troubled Christian believers. If every human being is born a liberal – as these latter-day disciples of Pelagius appear to believe – why have so many, seemingly of their own free will, given their lives to regimes and movements that are essentially repressive, cruel and violent? Why do human beings knowingly harm others and themselves? Unable to account for these facts, liberals have resorted to a language of dark and evil forces much like that of dualistic religions.
Gray goes on to argue that - just as war is 'politics by other means' - so politics has become 'religion by other means':
In Europe religion was a primary force in politics for many centuries. When religion seemed to be in retreat, it renewed itself in political creeds – Jacobinism, nationalism and varieties of totalitarianism – that were partly religious in nature. Something similar is happening in the Middle East. Fuelled by movements that combine radical fundamentalism with elements borrowed from secular ideologies such as Leninism and fascism, conflict between Shia and Sunni communities looks set to continue for generations to come. 
Bad news for the Middle East, but surely irrelevant to us in the secure and comfortable West? Surely we are immune to the virus of politics-inspired evil? Surely not, for as the infamous Milgram Experiment back in the 1960s illustrated, ordinary people can be persuaded by others in positions of authority - the experts in white coats - to do harm to others, even up to the point of, apparently, killing them. Nor was it just about authority. Recent analyses of feedback given by participants in the experiment (those 'duped' into thinking they had electrocuted others, even to death) showed not remorse, let alone horror at what they had done, but rather an exhilarating sense of belonging to something bigger and more important than their own, mundane lives: in doing their bit for science and for mankind. What would you be willing to do for the great project of Science and for Mankind?

The question I have asked myself since visiting Auschwitz is: could it happen again? Nowadays we don't even know our Catechism. Our contemporary culture of relativism might make it harder for a 'Hitler' to get going, but might make it even harder to stop him if he did. Which is why Angus Kennedy thinks we need a renewed focus on morality:
What has emerged from the wreckage of traditional, ‘bourgeois’ morality is not – despite appearances to the contrary – liberation from stultifying moral orthodoxy and routine like some butterfly from a wheel. Rather, the waning of the force and authority of traditional morality was itself a precondition for the emergence of non-judgementalism. That is to say, the seeming strength of today’s non-moral code is an illusion caused by the weakness of any alternative. Traditional morality has no more bite than the teeth of the Cheshire Cat. What is left is at best a morality of repudiation, verging on moral nihilism, espoused by moral nothings in a discourse in which nothing means very much at all. This is a moral mirror world in which it appears as if the virtuous ones are those who have liberated themselves from the moral strictures of society, but in which the real truth is that society is deeply troubled by the idea of genuinely individual judgement, of being moral. What passes for virtue today is really the pretence that one has escaped at last from oneself.
Morality, of course, implies an understanding of the Good as opposed to Evil. Therein lies the real challenge for the 21st century if we are to avoid re-visiting the horrors of the 20th.  In the absence a compelling vision of the Good - and all that implies for how we must live and how we must treat one another - then a vacuum is created, in our society and in our hearts. We need a vision of the Good that is about more than avoiding suffering and craving security. Otherwise the fences we build will soon become our prisons.

Friday, October 31, 2014


Judas Iscariot on the meaning of the word politics:
"Poli from the Greek word meaning 'many'; ticks meaning 'blood sucking organisms'."
A line from Simon Callow's magnificent performance of The Man Jesus last night in the Pavilion Theatre in Dun Laoghaire. Catch it if you can.

Friday, October 24, 2014

The Physics of Debt

I recently came across Keith Weiner's theory on interest and prices. He likens zero interest rates to a black hole:

First, zero interest is like a singularity. I have repeatedly emphasized the fact that debt cannot be paid off; it cannot go out of existence. It is only shifted around. Therefore, regardless of whatever nominal duration is attributed to any bond or loan, it is in effect perpetual. At zero interest, a perpetual debt has an infinite net present value.

The next part of the analogy is the strong gravitational pull from a very far distance. The rate of interest has indeed been falling since the high of 16% in 1981, and it was pulled in to a perigee of 1.6% before making an apogee (so far) of 2.9%. The analogy still holds, objects spiral around and into black holes; they do not fall in directly.
With a growing part of the global economy struggling to pull away from both deflation and zero interest rates, it's obvious that something unprecedented is happening right now. It's happening in Ireland too:

Source: Trading Economics

What is the source of 'gravity' that is pulling our economy towards the event horizon? The answer, obviously, is debt. Ireland is in the premier league (along with Japan) when it comes to total national indebtedness (households+government+businesses): which by analogy means we're trying to escape the gravitational pull of a super massive black hole. Ultimately the developed world is learning the hard way that - in Andy McNally's phrase - 'debt is a sociopath', one that starts by killing equity and then moves on to the rest of the economy.

So how do you escape from a black hole? The first thing you do is stay away from them. Which in Ireland's case meant not joining the euro. Unfortunately, as Megan McArdle points out, it's too late for that - path dependence has its own gravitational influence:
As I noted the other day, the fact that you can avoid some sort of terrible fate by stopping something before it starts does not mean that you can later achieve the same salutary effects by ceasing whatever stupid thing you have done. It would have been painless just to not have the euro. But it will be painful indeed to get rid of it.
So now we're close to the event horizon what are our options? In Weiner's model, the actual event horizon is when debt passes the point where it can no longer be amortized - the interest on total accumulated debt becomes can no longer be funded via tax revenues and additional borrowing. We're not there yet, so maybe there is still time to escape.

As a small open economy we can still do things that a larger economy - or eurozone - cannot do. For example, creating new, parallel currencies is one option. A balanced budget is another (Budget 2015 forecasts a net increase in borrowing of €5.2bn), which would at least slow our trajectory down. And the biggest option of all is debt forgiveness - though alas that'll only be tried when it's probably too late.

Where's the warp drive when you need it?

Wednesday, October 22, 2014

Political Chernobyl

"The simplest way to explain the behavior of any bureaucratic organization is to assume that it is controlled by a cabal of its enemies." Robert Conquest's Third Law of Politics
Irish Water looks like one of those issues that's going to run and run - or leak and leak, depending on your preferred metaphor.

But here's a thought that should exercise the minds of our political masters and betters: just think what will happen when the first Irish Water bills arrive in January 2015, along with a severe winter the like of which we haven't seen since, oh, 2010?

Add large, unaffordable bills to thousands of burst pipes and you get... Political Chernobyl.

Best pray for global warming so.

Tuesday, October 21, 2014

Passionate Intensities

Work has prevented me from blogging lately, but sometimes I do get the chance to explore ideas at gatherings and conferences etc.

Below is the text of a talk I gave recently - more of the scaffolding than the final building, but you should be able to get the gist of it. The theme was ‘changing lifestyles, values and behaviours – what’s happening below the radar’.

Passionate Intensities

I thought a handy title for my talk would be ‘Passionate Intensities’, a play on that well known passage from Yeat’s ‘Second Coming’, written in 1919:

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

I want to talk about some of the passionate – and sometimes dispassionate – intensities shaping the moods and lives of Irish people today as I observe them through my work, and to speculate about what they might mean for the future, both near and far.

But I don’t want to be all gloomy, even if I do subscribe to the old Russian adage that ‘a pessimist is a well-informed optimist’! So I will talk about change below the radar in terms of the good, the bad and the ugly, with a view to stirring your own passionate intensity for further discussion!

The Good

Resilient Recovery
Yes, there is a recovery, especially in Dublin. Economic sentiment is a little ahead of economic reality, but it helps in terms of most people seeing a better future ahead, and it’s all quite recent.
Young people in particular are positive about their prospects and choices, even if they’re not quite sure how they’re going to get to the future they want.

Still, we’re in a better place than a year ago, let alone five years ago.

Digital Empowerment
Digital technology – broadband, smartphones, online services etc – has transformed people’s lives, mostly for the better. People feel more in control, that they have more choice and that the quality of their lives is better because of technology and despite the recession.

Technology hasn’t just got cheaper these past few years, it has made lots of other things seem cheaper was well – even as incomes stagnated.

People aren’t waiting for the government to solve their problems: they’re giving up on the HSE & VHI and getting on with running, going to the gym, better diets and other ways of investing in their own health and wellbeing.

It’s about taking control – or taking it back – and replacing fatalism with a renewed sense of resilience, purpose and ambition that doesn’t rely on politicians or the return of the Celtic Tiger.

The Bad

Discounting the Future
People may believe things are getting better, but they don’t expect them to get good any time soon. Most are hanging on from month-to-month, not thinking about pensions, pay rises or more kids. We’ve become a ‘high time preference’ society, focused on now and the immediate future, not giving much thought to the future. It’s partly cultural (living in the now), and partly psychological (why think about something you have no control over or certainty about?)

Money is still very tight for an awful lot of people, who have little or no capacity for savings, pensions or rainy day problems.

Selfie Destruction
There’s a shadow side to our digital rapture: we’re losing connections with reality and each other. From low attention spans to cognitive problems in children raised by screens, we’re only beginning to figure out the mental and emotional toll of living in the digital simulacrum. Perhaps the highest price is an epidemic of loneliness, even among young people with 300 ‘friends’ on Facebook.

A lot of people think it’s a problem, nobody know what to do about it, and we haven’t been here before.

Losers & Winners
The future is a zero-sum game in the minds of many people nowadays. They don’t expect the cake to get bigger any time soon, so they know that gains for some will mean losses for others. Most are prepared to make the trade-offs, and to do the political triage as necessary. They know they can’t have their cake and eat it too in the current climate: whether it’s helping families at the expense of the elderly… or vice versa.

Voters are ahead of politicians in this regard: if more tough decisions have to be made… then they’ll be in favour of making them…

The Ugly

The traditional life path for most young people – job, spouse, kids, house – appears increasingly unattainable for many, and undesirable for many more. They are ‘route-less’ in the sense of not having a defining route forward in their lives.  That might not matter at the level of individual choices, but it has profound implications at a societal level in terms of economic output, productivity, population growth and the sustainability of welfare provisions. Think of it as the social equivalent of the 'paradox of thrift': more like the 'paradox of choice'.

A lot of young people aren’t ‘growing up’ because they can’t – or they won’t.

Deeply Indebted
The Irish love affair with home ownership has now given way to divorce proceedings. Many remain trapped in negative equity, either for their PDH or their business. And with little or no prospect of a healthy period of inflation to rapidly erode the real value of their debts (quite the reverse in fact), then the ‘squeezed middle’ (mostly 40 & 50 somethings) will continue to be squeezed.

Hence the allergic attitude to further borrowing, which means less investment and weaker balance sheets for our banks (who might best be described as ‘sleeping pygmies’ since they’ll have very few customers when they are ‘really’ open for business…)

Politics without Purpose
People aren’t cynical about politics and politicians – they’re way beyond that. Everyone knows ‘it’s a game’, they’re trying to buy our votes with other people’s money. We no longer have leaders, only managers – and the political opposition campaign on the basis that they are more competent managers than the incumbents.

The rise of the independents and high share of ‘don’t knows’ in political polls all point to an electorate that feels increasingly disconnected from the governing class, and increasingly open to alternatives to the status quo.

The Second Birth
Yeats originally called his poem ‘The Second Birth’, to reflect the other, famous stanza from his poem:

That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

Yeats was writing at the end of the First World War, in the midst of the Irish War of Independence, as Europe was convulsed by the Spanish Flu, Russian Revolution and the collapse of empires. He had good reason to feel a sense of foreboding about the future.

But 2014 isn’t 1919 – Ebola isn’t the Spanish Flu nor is ISIS the Bolshevik Red Army. Nor, for that matter, is Paul Murphy TD the equivalent of Michael Collins!

Yet, in a sense people today are ‘trapped in the present’, waiting for the future to resume, and not sure if it will. A the same time, people are optimistic right now – for Ireland, for Europe and, to a lesser extent, for themselves. The question is: despite all that is ‘bad’ and ‘ugly’ in the landscape will the ‘good’ prevail? Or will the hour come round at last for the rough beast to slouch its way and birth a different future to one we would wish for and prefer?

Wednesday, September 17, 2014

Nations Once Again

Ahead of tomorrow's referendum in Scotland, Stratfor's George Friedman explores the wider implications for Europe (and they're not good):
More important, perhaps, is that although Yugoslavia and the Soviet collapse were not seen as precedents for the rest of Europe, Scotland would be seen that way. No one can deny that Britain is an entity of singular importance. If that can melt away, what is certain? At a time when the European Union's economic crisis is intense, challenging European institutions and principles, the dissolution of the British union would legitimize national claims that have been buried for decades.
The vote will come down to the emotional appeal of national self-determination vs the rational self-interest of continued union. History is made by emotions.

Monday, September 8, 2014

Scottish Dependence

A friend asked me the other day if I favoured Scottish independence. I have to admit I was stumped by the question. My heart says yes, but my head says... 'seriously?!'

I can understand the passion that fuels those who favour independence - I'm a big fan of Irish independence after all. I'm just not sure why the Scottish want independence in 2014. The Scottish enjoy considerably more freedom to manage their own affairs (political, economic, social and cultural) than the Irish did one hundred years ago.

From various conversations with Scots over the years, I think some of it is a visceral hatred of the English that is as bad, if not worse, than the kneejerk Brit-bashing that was a familiar refrain in Ireland until recent times. Though not any more. And if it isn't as crass as that for many pro-independence advocates, then there is undoubtedly a big streak of anti-Tory sentiment. Let's face it, this wouldn't be happening if there was a majority Labour government in London.

Still, hatred only gets you so far: in the end you have to be for something, not just against everything. Nor will a 'rational' case for independence do: there are as many (if not considerably more) reasons to rationally favour retaining the status quo as there are for changing it. All that talk of tax revenues from North Sea oil might have worked back in the 1970s: but output peaked in the 1990s and has plunged since. Scotland won't be the next Norway, on the economic front anyway. Though it might be the next Norway on the social policy front, given the recent announcement of a state guardian for every child in Scotland.

Independence will likely mean economic turmoil - if not deep economic depression - for many Scots for the first decade or two after independence (unless the English taxpayer comes to the rescue, but frankly, why should they?) We had the best part of five decades worth of depression in Ireland, but hopefully they can learn from our mistakes in that regard.

But... even that might be a price worth paying if independence unleashed creative forces of construction that would make Scotland not only a better place to live than it could ever be as part of the United Kingdom but also an inspiration to small nations everywhere who wish to set out on their own path to the future, away, for example, from the lowest common denominator of globalisation and consumerisation.

The thing is, I suspect that following a new path is the last thing the SNP wants to do. Theirs is very much an ideology of Big Government, Big Spending and Big Taxes. Politics is their religion and Government is their God: they just want more direct control and the political power that goes with. Which is all very well if you're into that sort of thing - politics, after all, is just the negotiation of power between interested parties. But most people aren't that interested (though at times like this they probably should be). A Scotsman I know describes the SNP as a cult. He's obviously not a member, but then again 95% of people aren't members of political parties in most democracies.

I'd back a 'Pearse' any day in the cause of national independence, but I'd back away from a 'Machiavelli'. I'm still conflicted.


Tuesday, September 2, 2014

The Wrong Side of Geography

It's a common refrain:

Against same sex marriage? You're on the wrong side of history.
Against globalisation? You're on the wrong side of history.
Against the singularity? You're on the wrong side of history.

Even poor old Vladimir Putin gets 'the wrong side' treatment from Lilia Shevtsova in her analysis of the new world disorder:
By attempting to shift Russia backward to an older civilizational model, Putin has already inflicted a deep strategic defeat on his country. His efforts to turn Russia back to the “Besieged Fortress” model will only rob Russia of its chance to become a modern society. Moreover, Putin has also unleashed forces he can’t hope to contain, thus accelerating the agonizing decay of his own regime. Nevertheless, though he has lost the battle with history, Putin has been moving from one tactical victory to the next by forcing the West to constantly react and try to accommodate his reckless behavior.
But Shevtsova's analysis suffers from the same problem as others who claim history's telos as their own: she's on the wrong side of geography. Mark Lila provides a masterful critique of the new world delusions that have gripped Western elites since history 'ended' 25 years ago:
Never since the end of World War II, and perhaps since the Russian Revolution, has political thinking in the West been so shallow and clueless. We all sense that ominous changes are taking place in our societies, and in other societies whose destinies will very much shape our own. Yet we lack adequate concepts or even a vocabulary for describing the world we find ourselves in. The connection between words and things has snapped. The end of ideology has not meant the lifting of clouds. It has brought a fog so thick that we can no longer read what is right before us. We find ourselves in an illegible age.
Not only did history end, ideology ended - to be replaced by a kind of dogmatic libertarianism:
It tells us that this is a libertarian age. That is not because democracy is on the march (it is regressing in many places), or because the bounty of the free market has reached everyone (we have a new class of paupers), or because we are now all free to do as we wish (since wishes inevitably conflict). No, ours is a libertarian age by default: whatever ideas or beliefs or feelings muted the demand for individual autonomy in the past have atrophied. There were no public debates on this and no votes were taken. Since the cold war ended we have simply found ourselves in a world in which every advance of the principle of freedom in one sphere advances it in the others, whether we wish it to or not. The only freedom we are losing is the freedom to choose our freedoms.
Geo-politically this has given rise to aimless (and often self-destructive) goals such as 'The European Project' in the case of the EU, and bringing democracy to the Middle East in the case of the United States. The former has undermined democracy, the latter is built on sand. For a time liberal democracy appeared to be on the right side of history, but not any more. As Lila notes:
Clearly, the big surprise in world politics since the cold war’s end is not the advance of liberal democracy but the reappearance of classic forms of non-democratic political rule in modern guises. The break-up of the Soviet empire and the “shock therapy” that followed it produced new oligarchies and kleptocracies that have at their disposal innovative tools of finance and communication; the advance of political Islam has placed millions of Muslims, who make up a quarter of the world’s population, under more restrictive theocratic rule; tribes, clans, and sectarian groups have become the most important actors in the post-colonial states of Africa and the Middle East; China has brought back despotic mercantilism. Each of these political formations has a distinctive nature that needs to be understood in its own terms, not as a lesser or greater form of democracy in potentia. The world of nations remains what it has always been: an aviary. 
The West's dogmatic libertarianism - where we are no longer free to choose our freedoms - means that our political elite is simply not prepared - perhaps not even capable - of defending our culture and our values. When our highest virtues nowadays are 'be nice, don't judge, offend no one' then the West, including Ireland, is clearly on the wrong side of geography. History is about to get interesting again.

Friday, August 29, 2014

It's Criminal

You know Europe's economy is in a bad way when even the mafia is a shadow of its former self.

The timing is terrible, of course, as some had hoped GDP would get a handy fillip from the inclusion of illegal activities.

Proof, if proof was necessary, that poor old Europe can't get a break these days...

Thursday, August 28, 2014

Every Assistance Short of Help

Is the ECB about to go QE? We await with breathless anticipation.

Today's appointment of BlackRock to help the ECB design a programme to buy asset-backed securities (ABS to give it its full acronym) has been interpreted by many as a sign the eurozone will soon witness full blown quantitative easing. And needless to say, it's all being sold as really really good for Europe's small businesses still desperate for bank finance to help expand and create jobs. Why, I'm sure it'll even reduce our carbon footprint as well, come to think of it.

Of course, it's all BS (another acronym). Apparently, in order to get the banks to lend enough money to businesses (with a modest margin added for profit), the ECB has to (sharp intake of breath) get the banks to bundle existing loans into securities that are sold to fixed-income investors (in this case, the ECB) so that the banks will then have better balance sheets which in turn will enable them to raise low interest rate funds in order to be able to lend money to SMEs. Or at least I think that's the plan. The fact that the whole 'mortgage-backed securities'/QE thing has been tried and failed in Japan, the United States and the UK (from a lending to SMEs/sustainable growth point of view) should not in any way be considered a reason not to try it in Europe too.

Needless to say there are many people in favour of QE. Like the executives in charge of large corporations who have used QE to indulge a binge of share buybacks to boost the value of their own share options, which has in turn exacerbated the wealth inequalities many people seem vexed about. Apparently this is a much safer bet for the banks than taking their QE gains and, you know, actually lending money to businesses who need to it to grow.

A case, once again, of 'every assistance short of help' for Europe's small businesses.

Still, it's not too late to consider the alternative. Like giving the money directly to the people. Even Foreign Affairs thinks this might be worth trying. A sort of 'QE for the people'. As Mark Blyth and Eric Lonergan explain it:
Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
But the problem in Ireland is that most of the money will simply go to paying off debt, with only a limited impact on spending and growth (which would help most SMEs dependent on the domestic market). Which means that QE for the people requires another, even more radical policy if the nation's debts are to be reduced. And there's only one way to do that: DF.

DF is an acronym that stands for the thing that will have to happen anyway in Ireland, the eurozone, the UK and the United States. And the sooner the better. DF stands for:

Debt Forgiveness

Though probably not before Europe's executives have enjoyed their own share buyback binge. Europe's small businesses will just have to wait their turn.

Wednesday, August 27, 2014

Stringing Up the Recovery

Like a lot of people I'm scratching my head at the conflicting statistics about Ireland's economic performance. On the one hand, the latest QNHS from the CSO tells us that the numbers in jobs were 1.7% higher in Q2 2014 than a year ago. On the other, the CSO also reports that average weekly wages were down 1.1% in Q2 2014 from last year. It's a wage-less recovery apparently.

There may be several explanations for what we are seeing - or there may be none. Such low percentage figures, based on survey data, are in turn vulnerable to margins of error that could leave one or both in reality close to zero. I used to think we witnessing a 'macro-recovery, micro-recession' - i.e.: improving headline numbers like GDP and exports, but weaker indicators at the level of firms and households. Now it seems the other way round, with the macro numbers remaining flat and the micro numbers (job creation/confidence) showing improvement.

I think these anomalies are further signs of our continuing balance sheet recession. In other words, despite a degree of pump priming by the authorities, and even some old fashioned boosterism by the media (and who can blame them), we're still coming to grips with what happens when you try to push on the monetary string. The number one financial priority for the majority of Irish adults is to reduce their exposure to debt. It's less of a priority for the very young and the very old, but then they tend to have both low debts and low incomes. Those with higher incomes - the 35-55 age cohort - are also more indebted, so any extra spending power/disposable income they get will only go one way.

But to add to the head scratching, the latest money supply statistics are enough to make your nearest and dearest wonder if you've picked up something contagious. The chart shows what is happening to the M1 and M2 measures of money supply in Ireland (data here). They tend to move together, but since the start of the year, M1 (currency in circulation and overnight deposits) has moved away significantly from M2 (M1 plus longer term deposits):

The source of the jump is the amount of currency in circulation (not overnight deposits, which are flat). In June 2014 there was €14.5bn in 'cash' circulating in the Irish economy, up 10% from a year ago to  reach the highest level on record. Sure looks like a lot of pump priming to me. The only question is: whose pump(s)?

It certainly isn't showing up in residential bank deposits, nor in wage packets for that matter. It may simply be more proof of the degree to which our financial system remains fractured and broken after the collapse six years ago. Or it may indicate that the wider economy is still very vulnerable and that recovery is still some way off for most of those seeking jobs, or waiting for pay rises for that matter. Despite an awful lot of pushing on string.

Saturday, August 16, 2014

Humans Need Not Apply

Worried about the impact of technology on your job security? You should be. This is worth the 15 minutes:

I love the background music, by the way, which is bad news for composers (as explained in the video). Like I've said before, a recession is when technology replaces your neighbour's job; a depression is when technology replaces your job. But maybe you don't do any of the 47% of jobs that will be affected?

Scott Alexander has been writing a lot about the impact of technology (and many other things). His latest post on Robin Williams (yes, there is a connection) states the following about the future impact of technology on our working lives:
This is also the basis of my support for a basic income guarantee. Imagine an employment waterline, gradually rising through higher and higher levels of competence. In the distant past, maybe you could be pretty dumb, have no emotional continence at all, and still live a pretty happy life. As the waterline rises, the skills necessary to support yourself comfortably become higher and higher. Right now most people in the US who can’t get college degrees – which are really hard to get! – are just barely hanging on, and that is absolutely a new development. Soon enough even some of the college-educated won’t be very useful to the system. And so on, until everyone is a burden. 
...By the time I am a burden – it’s possible that I am already, just because I can convince the system to give me money doesn’t mean the system is right to do so, but I expect I certainly will be one before I die – I would like there to be in place a crystal-clear understanding that we were here first and society doesn’t get to make us obsolete without owing us something in return.
By the way, that video was launched on YouTube just three days ago - it has been viewed 1.3 million times already. Looks like it struck a nerve with some folk.

Wednesday, July 30, 2014

An Asymmetry of Possibilities

The folks in Stratfor have given us the best strategic analysis of the Israel/Gaza conflict that I've read in a while:

There is accordingly an asymmetry of possibilities. It is difficult to imagine any evolution, technical, political or economic, that would materially improve Israel's already dominant position, but there are many things that could weaken Israel -- some substantially. Each may appear far-fetched at the moment, but everything in the future seems far-fetched. None is inconceivable. 
It is a rule of politics and business to bargain from strength. Israel is now as strong as it is going to be. ...Israel's major problem is that circumstances always change. Predicting the military capabilities of the Arab and Islamic worlds in 50 years is difficult. Most likely, they will not be weaker than they are today, and a strong argument can be made that at least several of their constituents will be stronger. If in 50 years some or all assume a hostile posture against Israel, Israel will be in trouble.  
Time is not on Israel's side. At some point, something will likely happen to weaken its position, while it is unlikely that anything will happen to strengthen its position. 
The other thing that might happen is that the fragmentation of the sovereign nation-state as the nexus for politics, economics and war will continue and possibly accelerate - even with or without a new Caliphate as envisaged by ISIS in their map pictured above. Henry Dampier worries about the ailing ability of the nation state to wage war:
The critical competitive advantage of the state was in the field of war. Because the state was capable of fielding a large, mass army of capable fighters on short notice, it was able to overwhelm small kingdoms, republics, and city-states that were not capable of doing such a thing reliably. This competitive atmosphere was generated in Europe in part by the continual weakening of the nobility and the papacy, combined with over a century of religious warfare between Christian factions. Consolidating war-making power within fewer hands was adaptive.
But in an age of asymmetric warfare:
Owing to its decline, the nation-state now asks for more in terms of material resources while providing less. Its statistics are becoming unreliable (or perhaps just less reliable than they have been in the past). Its standards provided for trade and finance are becoming antiquated, and too expensive to reform. Its critical advantage in warfare has eroded, and many states have become reliant on private security firms to provide physical security, intelligence, and logistics whereas before they were able to rely on nationalist zeal to provide all of those services at an unusually low price.
Israel isn't the only nation-state for whom circumstances will change in the coming years and decades. Ireland's moment of maximum strength may have passed, but it isn't too late to take our future security more seriously than we do at present.

Monday, July 28, 2014

After Westphalia

With the centenary of the start of World War One upon us, many are noting the similarities and differences between then and now - especially in the context of increasingly violent conflicts in the Middle East and beyond. But to understand the present we might need to look further back - to the Treaty of Westphalia in 1648 - credited by many with the creation of the modern, sovereign state. Why so far back? Because in the age of ISIS, the modern, sovereign state might just be coming to an end. Here's Adrian Pabst on the subject:
The secular settlement of Westphalia is predicated on subsuming all institutions and practices under the absolute sovereignty of state coercion and market commodification. This relentless expansion of bureaucratic control and capitalist accumulation has produced an unprecedented centralisation of power and concentration of wealth, which has in turn created a twin crisis of identity and inequality. So instead of a utopia of infinite progress in the direction of democracy, what is already underway is a resurgence of populism, atavistic nationalism and fascism across large parts of Europe and elsewhere - notably, in Ukraine and in Russia. 
... Among the alternatives to the sovereign power of both national states and global markets are hybrid institutions, overlapping jurisdictions, polycentric authority and forms of multi-level government or governance, which are all marked by disperse and diffuse power structures and degrees of suzerainty that are not captured by modern paradigms of national sovereignty and balance of equal powers. This applies as much to the EU as it does to great powers and their neighbours such as Russia in relation to Ukraine, Belarus or Georgia.
Indeed, it is clear that the historically recent triumph of Liberal Democracy itself was the beneficiary of American idealism writ large as imperial ambition. But as America adjusts to the new realities of a post-Westphalian era, we can anticipate a far more fluid, less fixed world of shifting borders, alliances and power politics. ISIS is only the beginning.

As for Ireland, we might just need to get back in touch with the more atavistic, less politically correct views and ambitions of our own founding fathers if we are to find the ideas and values that will help us navigate the new global realities ahead.

Tuesday, July 22, 2014

All's Well

"Not only will politics certainly disappoint us, but even were it not to, the outcome would be a relatively pitiful one. Political transformation is ‘at best’ a re-ordering of primate dominance hierarchies, which everyone knows won’t actually be for the best — or anything close to it."            Outside In
There's nothing like a holiday abroad to give you a bit of perspective on things. Like, what a lucky place Ireland is compared to the rest of the world. The news abroad was all about Gaza, The Ukraine and Iraq; back home the headlines featured culchie rock stars and skobie seagulls. Oh yes, and a Cabinet re-shuffle. Yep, we're lucky.

Still, I can't help feeling that we won't remain immune from the global tide of events indefinitely - the fact that we are one of the most open economies in the world more or less guarantees that. But even if the headlines are just that - news for a day, of little import for the future - other forces will inevitably shape Ireland's destiny.

There's one I've been reading about a lot: the growing failure of 'post-recession' economies in the developed world to create jobs and provide adequate wages for those who want them - a big problem in Spain, where I was staying. A recent episode of the BBC's Analysis discussed whether we are witnessing 'the end of the pay rise'. The conclusion is fairly optimistic - technological innovation will eventually increase productivity per worker like it did before, with some of the benefits accruing to workers in the form of higher wages (and more jobs), like it did before.

Others are less optimistic: Thomas Wells thinks the rise of the Robot Economy means we need to institute a basic minimum income. Scott Alexander has even figured out a way to pay for it: take all the money wasted on educating people who graduate to unemployment by cutting to the chase and scrapping education, using the money instead to make us all 'trustifarians'. It's a tongue-in-cheek suggestion of course (I think), though his image of folks living in mountain cabins reading Aristotle is sort of appealing, if hopelessly utopian. Of course, the problem with the 'money for not working' solution is that we are currently running that experiment in the form of long-term unemployment and it isn't working all that well for either the unemployed or wider society. There might be a future in which something like Alexander's solution works, but it won't be a democratic future.

Anyway, my conservative leanings make me more inclined to look to the past for solutions rather than to the future. Perhaps we need to 'go medieval' if we want the work-life balance to be one that works for society as a whole, and not just for individuals? The average peasant in 14th century England worked just 150 days a year on account of all the holidays, feast days and week-long celebrations of births, weddings and funerals. I've suggested before that we should have a goal in Ireland of establishing the four day week as a norm, adding bank holidays - and holy days - to the calendar over, say, a 10 year period.

I'd suggest it for consideration to our local politicians only, well, they're on holiday - again. Maybe they've worked out a solution to jobless/wageless recovery and haven't got around to sharing it with us yet?

Image cred: ZH

Monday, June 23, 2014

The Disrupted Recovery

To paraphrase Ronald Reagan:

'A recession is when your neighbour loses his job to disruptive technology; a depression is when you lose your job to disruptive technology'.

The thought came to mind reading Jill Lepore's eloquent (and maybe a little unfair) put down of Clay Christensen's ideas on disruptive innovation. She essentially compares the advocates of disruptive innovation to the disruption caused by ISIS in Iraq. Like I said, a little over the top.

Still, she has a way with words:

Beginning in the eighteenth century, as the intellectual historian Dorothy Ross once pointed out, theories of history became secular; then they started something new—historicism, the idea “that all events in historical time can be explained by prior events in historical time.” Things began looking up. First, there was that, then there was this, and this is better than that. The eighteenth century embraced the idea of progress; the nineteenth century had evolution; the twentieth century had growth and then innovation. Our era has disruption, which, despite its futurism, is atavistic. It’s a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation, and shaky evidence. ...The idea of innovation is the idea of progress stripped of the aspirations of the Enlightenment, scrubbed clean of the horrors of the twentieth century, and relieved of its critics. Disruptive innovation goes further, holding out the hope of salvation against the very damnation it describes: disrupt, and you will be saved.
As far as Lepore is concerned, our uncritical embrace of disruptive innovation is somewhat lacking in evidence or proof that it is, on balance, a good thing. Michael Hennigan (who linked to Lepore) has just finished a five part critique of Ireland's innovation strategy. Or lack thereof. It's a familiar refrain from Michael - our stated ambitions for innovation policy far exceed any real world outcomes (either in terms of indigenous, innovative firms or job creation).

In fairness to Christensen, he's well aware of the risks associated with disruption, and he sees the potential for technological malinvestment as much as for technological investment - especially in a world awash with capital. Nor do I think he would recommend Irish policy makers to put all their eggs in the innovation basket.

The real danger it seems to me is that digital disruption - as opposed to the old-fashioned process of replacing coal with oil, steam with electricity - happens much, much faster so that the 'gains' from disruption are dissipated by the next disruption before they have been embedded by the wider society. The theoretical process of disruption is illustrated below (source):

But what if the area under the curve described as 'Height of New Productivity Gain' is much flatter, quickly turning back below the line as losses return sooner than in the past?

The latest EY report on Ireland's economic prospects sets out some interesting forecasts for job creation to the end of the decade across different sectors. What surprised me was the number of new jobs they are forecasting for retailing. I don't think so. If somewhere like Blackrock is turning into a retail Potemkin Village - thanks mainly to the recession but also to disruptive technology - then the time to 'bank the gains' from innovation just might not be long enough any more.

Maybe we can take consolation from Lepore's conclusion that often it is the incumbents who gain most from technological innovation and not the disrupters:
Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It’s not a law of nature. It’s an artifact of history, an idea, forged in time; it’s the manufacture of a moment of upsetting and edgy uncertainty. Transfixed by change, it’s blind to continuity. It makes a very poor prophet.
We are all incumbents now.

Tuesday, June 17, 2014

Faster History

Twenty five years after Francis Fukuyama proclaimed the end of history, history appears to be speeding up. An interesting perspective from John McGinnis:

There are inherent tensions in liberal democracy that ensure that history continues. By protecting liberties, liberalism prioritizes individuals, while democracy necessarily prioritizes a collective right—the right of a people to govern themselves and impose obligations and indeed trench on the liberties of others. 
In a constitutional republic such as ours, we try to resolve that tension by permitting democracy for ordinary politics while enshrining rights that are beyond majority control. But even here with a constitution that has lasted for two hundred years the mixture is unstable. Just consider current conflict between campaign finance regulation and the First Amendment. Around the world the conflict is truly combustible.
And that's just in the liberal democracies. As for Ukraine, Iraq, Syria, Venezuela, Thailand...

Friday, June 13, 2014

Borrowing Constraints

The ECB is now determined to do everything to assist Europe's small businesses, short of actually helping them, of course. If I could borrow from the ECB at 0.5% I might well be tempted. After all, my chances of developing a product or service that would generate returns higher than 0.5% would be pretty good, even in this economy.

But of course, I can't borrow from the ECB - no SME can. We have to borrow from the banks the ECB is lending to, which introduces a bit of a 'middle man' problem. Indeed, Chris Dillow has debated recently whether we're past the point of needing banks any more in an age of deflation, negative interest  rates and bitcoin. I've speculated about the same thing myself recently.

There may though be a bigger problem than the ECB interbank rate or the role of banks full stop. That problem is the impact lowflation/deflation is having on the real cost of borrowing for businesses. I worked it out yesterday using Central Bank data for new business loan rates (covering the two biggest categories that make up about 90% of all business loans). If we subtract the Harmonised Index of Consumer Prices (HICP) provided by the CSO from the business loan rates we get the chart below:

What's worrying is that real interests have been rising for nearly eighteen months, after a three year period of decline. The bottom line: if the real costs of borrowing for businesses is running at more than twice the rate of growth of the economy, then you would want to be very optimistic - or very foolish - to borrow at those rates, especially if your business is focused on the domestic market (as most invariably are).

I wonder would the ECB consider a loan application?

Tuesday, June 10, 2014

Unimproved Ends

Meet Eugene Goostman.

He isn't real, but he has convinced 33% of people who interacted with him that he's really a 13 year old Ukrainian. The Turing Test has been past apparently. Try it for yourself here.

Does it matter? I'm not so sure. After all, a computer that convinces you it is human is still just a computer. Indeed, the 'news' that computers are better than humans at some things isn't all that surprising. A hammer is better for putting nails in the wall than my fist. That's why we make tools: to help us do more than we could without them.

Sure, IBM's Watson can beat any human at the TV game Jeopardy, but really, so what? I am reminded of Henry David Thoreau's observation that:
"Our inventions are wont to be pretty toys, which distract our attention from serious things. They are but improved means to an unimproved end, an end which it was already but too easy to arrive at."
With socialbots convincing thousands of twitter users to follow them, I can't help feeling that Thoreau would be even less enamored with our own age than he was with his own. We are desperately in need of improved ends, and Eugene doesn't have the answer.

Friday, May 30, 2014

Can You Hear Us?

Via Barry Ritholtz:

Mind you, should we be worried that there aren't any broadcasts coming the other way?

Beware the Great Filter.

Thursday, May 22, 2014

(Solar) Wind of Change

I've commented on John Hampson's 'economics of sunshine' before. He thinks things are about to get perfectly interesting:
The wider indices are an elastic band at snapping point. Some traders will be nimble enough to catch it, others will stand like rabbits in the headlights. Those still playing the long side at this point are the dumb money: not just my opinion but as evidenced in indicators.
Of course, John doesn't do financial advice, and nor do I...

Sunday, May 11, 2014

Sleeping Pygmies

The only way to not just survive but thrive as an entrepreneurial enterprise is to destroy fixed costs and labor overhead... The way to destroy fixed costs and labor overhead is to pay no business rent, own no vehicles, have no employees, owe no debt, own your own tools/means of production and nurture human and social capital. Charles Hugh Smith
A friend mentioned in passing recently that it seems impossible for anyone in business to make money any more. He was talking about a favourite coffee shop that now has several new competitors. We see it all the time, a business enjoys a temporary period of success, which in turn attracts new competitors who sometimes force the previously successful enterprise out of business. It's a classic example of Porter's fiver forces of competition (illustrated above - from an interesting post on the advertising agency death spiral).

Such is the normal cut-and-thrust of free market capitalism (not that it's ever really free, market-driven or capitalist these days in an age of bailouts and cronyism).  But of course there's more at play than your standard, textbook competition. First of all there is deflation: price levels are stagnant or still falling in many retail, service and export sectors (and so therefore is the turnover of entire sectors of the economy). Deflation + debt = death for many businesses (and ultimately, a few governments as well).

Beyond deflation there is the problem of our banks. Not only is lending continuing to fall as households and businesses scramble to pay off old loans rather than take on new ones, but even the money supply is stagnant or declining - in particular the M2 measure (historically highly correlated with the value of GNP and hence the size of the economic cake to be competed over).

The banks, of course, have their own problems (bad debts, upcoming stress tests and then Basel III). In reality, it would suit them to get their house in order and then get back to business as normal. But we won't be getting back to normal any time soon - or ever, for that matter. As the quote above from Charles Hugh Smith reminds us, the combined forces of competition, deflation and broken banks (and not just in Ireland) mean that the level of demand for bank loans from businesses and entrepreneurs will remain subdued and will likely shrink further as rising loan rates create even higher hurdles for businesses and investors facing falling rather than rising prices.

Throw in alternative currenciesartificial intelligence and new business models that don't require capital, equipment or even staff and our banks look less and less like sleeping giants... and more like sleeping pygmies by the time they're 'back to normal'. But not before loan rates go a whole lot higher, whatever the ECB does.

Tuesday, May 6, 2014


Over 19 million views so far. Not bad for a video posted just eleven days ago...

Clearly it has tapped into something in the zeitgeist about the unforeseen consequences of our growing addiction to screens.

Saturday, April 26, 2014

The Pluck of the Irish

One of most interesting findings from five years of tracking the mood of the nation is just how moody we're not. My company has asked one thousand different people every month about their feelings since April 2009 and - apart from a brief wobble around October 2010 when the IMF came calling - we've been remarkably calm and consistent throughout the entire period.

In fact, the emotions experienced most often are happiness and enjoyment, followed - often at lag - by stress and worry:

You can download the entire data series from April 2009 to April 2014 here.

Thursday, April 17, 2014

Much Else Besides

We think more than we can say, we feel more than we can think, we live more than we can feel. And there's much else besides. Eugene Gendlin
As quoted by Iain McGilchrist in his most recent talk on the soul at the RSA. Iain's a panentheist, by the way.

On the other hand, David Cameron, moved no doubt by the week that's in it, has written about his Christianity, in a way that no Irish politician could - or would - I suspect.

Mind you, despite his sincere profession of faith, Cameron managed in his 1,100 word article not to mention... God.

Can't go alienating all those atheist UKIP voters in the shires this close to the European elections I guess.

Wednesday, April 16, 2014

Therapeutic Nationalism

President Higgin's state visit to the UK last week was an important milestone politically and diplomatically. Though I think Queen Elizabeth's visit to Ireland in May 2011 was more important in terms of normalising relations between the British and Irish peoples. The President was simply returning the courtesy.

Of course, it depends on what you mean by normalisation. Truth be told, I don't think most people care about 'British and Irish relations' or much else besides when it comes to what happens on these islands that we share. Nationalism has become a somewhat embarrassing notion, a bit like religious belief, i.e.: something to be tolerated as rather harmless (a bit of rivalry when Ireland and England clash in the Six Nations sort-of-thing), but not worth going on about.

National identify, patriotism, even Irishness have all been reduced to a therapeutic nationalism that sees the Irish as sort of the right brain, creative wing of the British family (though I think the English have been plenty creative without us). They do the cricket, we do the craic...

In the North some are fretting about a new age of post-nationalism, in which pretty well everything that defined Irish nationalism (from a Northern perspective) - Sinn Fein, the GAA, the Catholic Church - is seen to either be in terminal decline or to have sold out.  Down South, people are a little less stressed about our post-normalisation/post-nationalism new normality - though all that might be about to change. When even Diarmuid Ferriter is moved to question the appropriateness of inviting members of the Royal Family to the 1916 centenary commemorations then maybe the therapy isn't working.

Indeed, we might be in for a rude awakening if the growing secessionist mood unfolding across Europe gathers pace. An Independent Scotland after September's referendum would certainly knock everyone out of their therapeutic slumber (though in the absence of a Scottish Pearse, Griffith or even Connolly - James, not Billy - I don't see them cutting the chord myself).

I'm a big fan of subsidiarity, and our increasingly distributed and networked patterns of work, creativity, wealth creation and innovation, thanks to technology, will make secession - the political wing of subsidiarity - all the more feasible.

Nationalism; it hasn't gone away you know.

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