Archive for the ‘Book reviews’ Category

Book review: Yanis Varoufakis, Another Now

I did not start reading this book (below left) as a piece of science fiction, I actually thought it was a straight political and economic manifesto by a radical thinker. Bless him (not in a God sense), he has tried another route into our consciousness.

Another Now cover

His construct is the following – three different people, all disaffected by the present, meet or are introduced to one another with the express – and contrived – purpose of “trialogueing” the ideas that are obviously keeping Varoufakis awake at night. One of his characters, Costa, is an IT expert liberated from daily work by having anticipated 2008 and bet against it (or for it, whichever way one thinks). Costa was working on an alternate reality that one could choose to enter but only in the Hotel California sense (“you can check out any time you like, but you can never leave”). Having created his new reality in a game called Freedom, he finds that holed up in it is another being, Kosti (also from Crete), who shares Costa’s DNA and past. Kosti inhabits a world know as the Other Now, in contrast to that which Costa inhabits; namely, Our Now.

Kosti engages with Costa until he becomes bored, at which point Costa visits once again his two other protagonists, an ageing Marxist academic who gave up on politics to create tapestries (Iris) and a libertarian banker (Eva) who became disillusioned about finance after the collapse of Lehman Brothers bank in 2008. This is the date, conveniently, that the fork in the realities occurred. So, these three characters interrogate the alternate future and its mechanisms.

So what is the alternate system that so successfully functions in Other Now that Our Now should aspire to? And how? I am loath to be a spoiler, but the object of the book is to achieve a mobilisation and create a coalition for change. Unless blogs like this share the ideas, then it really is just a limited work of science fiction. So here goes.

  1. elimination of retail and investment banks
  2. universal basic income (UBI)
  3. employee ownership of firms and the elimination of hierarchies
  4. socialisation of land

1 and 2: The elimination of retail banks is linked to the form and function of the UBI. The UBI in this alternate world has three components in a Personal Capital (PerCap) account. First, Accumulation made up of basic pay and democratically-allocated work bonuses; Second, Legacy – which is paid on birth, but not redeemable until adulthood and a plan for using it! Third, Dividend, which is the UBI element funded by a tax on corporations at 5 per cent of gross revenues. The payments are stored in an electronic wallet and transfers are made independent of retail banks. Borrowing is replaced by a peer-to-peer lending scheme rather than by banks as we currently know them. That does not quite amount to the elimination of the need for retail banks, but comes close. Investment banks disappeared because they no longer trade their complex derivatives and create fictitious money. They are reduced merely to lenders and have no advantage over peer lending.

3: Each employee is given one share of equal value to all other shares in the company on Day 1, or when they join. The stock market has been dispensed with by the radical activists who brought about the change (see below). Firms become democratic with no senior bosses telling others what to do. And the surpluses created by firms are allocated by peer assessment on a points system. Those who are particularly creative and/or productive are recognised by their peers and given credit points that equate with a portion of the excess. These points can also be used by future employers to assess the suitability of a candidate.

4: Landlords received inflated unearned income. The socialisation of land in Other Now resulted in a new commons being created through Ground Trusts/Commons (gComms). By law all freehold land passed to the gComms. Leases were awarded to landlords and democratic businesses were also privileged. Two zones – one for commercial housing, the other for commercial businesses, enable communities to extract maximum rents in these areas to pay for social housing.

Getting there

The mechanisms for getting there are radical. In the Other Now, movements such as Occupy Wall Street were not defeated as they were in Our Now. They were transformed into a guerrilla groups that organised successful payments strikes (delaying instalment payments on bank loans and utilities such as water and electricity) that brought down the banks and caused the nationalisation of the utilities. Guerrilla groups targeted firms with poor employee relations and environmental records sufficient to get pension funds to divest. Another guerrilla group set about big tech – succeeding in bringing down Facebook and gaining property rights over data for users of social networks. Those companies that avoided attack by these guerrilla groups did so only by investing in green technologies, leaving stock markets and transferring full voting shares to their employees.

International organisations such as the IMF were completely reformed. Instead of being an organisation that gave loans to defaulting nations in exchange for the privatisation of public assets, the International Monetary Project (IMP) has a remit to stabilise the world economy and invest in countries or regions without indebting them. The resources for this come from levies on exports and capital transfers.

Yanis Varoufakis

Core to the success of the system and the security against exploitation and a return to some oligarchical system is transparency. The very systems that were turned on citizens to monitor and punish were instead directed at the powerful. An appropriately-named piece of software, the Panopticon Code, developed by a guerrilla group of coders, infected every computing device on the planet. Suddenly everyone could see everything about one another and particularly those “clinging to power”. As a reader, one can see that Varoufakis is perhaps not so keen on this as an absolute (everyone’s secrets are exposed with the negative impacts that would entail), but the longer-term impact on the Other Now was a democratisation of society on a global scale. Corporations were held in check by their internal democracy and Citizens’ Juries (with the power to dissolve bad companies). These, of course, required a high-level of engagement by the population to enact and maintain. A socialworthiness index (as a replacement for credit ratings and the agencies that generate them) helped to divert resources towards the good things in life that were not captured by GDP (a real bugbear of mine).

On immigration, states in the Other Now recognised the contribution of immigrants to host economies and also supported the communities in which they lived including providing sufficient school places, healthcare services and housing (the latter helped by the socialisation of land and management by gComms).

Other Now is a modern app-based world. There’s an app for PerCap and its funds. There’s an app for social media data trading – after all users of social media services were given property rights over their data. They now trade data with social media firms and receive payment for them. This had tragic implications – which are for readers of the book to discover (p169). Using an app and receiving the payment in the PerCap app! The proliferation of apps is an indicator of a vibrant digital sector, freed from the constraints of the former Techno-feudalism endured by Our Now citizens.

Why Other Now is not better than Our Now

Other Now is no Utopia. Varoufakis uses Iris to detail its residual failures that the elimination of capitalism did not banish. And in 2022, Other Now does have its own financial crisis caused by imperfections in the regulatory framework around gComms and PerCap. Again, I will not spoil it because this is the part where Varoufakis loses himself in his story telling. There is nothing original in what happens next – I am pretty sure that any seasoned SciFi fan would work this out before Varoufakis had written it, after all, he’s an academic economist. But we are asked, through his characters, whether we would elect to transfer to Other Now or stay in Our Now. This is an existential question. The identity of the characters prepared to transfer and which not, and their reasons for the choice, again, are not a surprise.

I bought the book without reading the cover. Fortunately. Readers know that fiction – and particularly science fiction -are not my thing. Varoufakis demonstrates that they are not his either, but he has a fair shot at it – and certainly his main points about the nature of change – and critically the process of change – are well made. Probably better in this format than a straight monograph, of which there are many. I come away with some ideas of my own. But also with a dilemma. Not only should I go to Another Now if I had the chance; but seeing as though I don’t have that option, should I try to create Another Now? Now. The answer…I am not into tapestry.

Picture: Twitter

Book Review: Banking on it by Anne Boden

Banking on it book cover

Anne Boden, a 50-something female banker with a long career at RBS decides to leave. She gets headhunted to work at the failed Allied Irish Bank (one of the major casualties of the financial crisis in 2008). Whilst she is terribly excited about the innovations in technology deployment at the bank, as chief operating officer, actually, her day job was making people redundant. She left after 18 months.

Boden comes across as someone who doesn’t sit still for long. She mused over her future and decided to set up her own retail bank. Only this one would not have any legacy systems, branches, and crucially, it would not have an IT department. It would be an IT department. The bank would be, as the book cover suggests, an industry disruptor – a business that would strip down products to the basics. No frills. And what it did do, it would do better than any other retail bank. It would interface with customers through a mobile phone app. The core product would be the notoriously unprofitable current account; rendered profitable by a low cost base and intelligent rates for borrowing and saving.

There is much to recommend in this book. We know the ending – Starling Bank was launched and is on the cusp of profitability. It is award winning – though I am never really sure what that means. And as we might expect, the journey to this point has been fraught, involved near bankrupting herself, two unexplained burglaries and a big fall out with the core team about strategy. As a 50-something bloke, the idea of a 50-something becoming a successful entrepreneur is inspiring. I am myself embarking on ventures that perhaps should have been done a number of years ago. But there you go. What this story tells us that there is never a wrong time, but don’t expect to have a life if you try. And if one is going to set up a bank, expect to have to do a deal with the Devil (more of this later).

Here are a few things of note for budding entrepreneurs:

  • Silicon Valley’s investors may not be receptive to non-Silicon Valley start-ups;
  • contingency fees from consultancies and lawyers may not be honoured by investors;
  • even if one thinks that the idea is original, it is not. Someone else is working on it simultaneously and they may be competing for finance with you;
  • scalability will be important – can the business be expanded/grow without adding costs? (p33);
  • build a network full of goodwill (being 50-something can help, providing one has not hacked people down on the way up in a previous life) – (p63)
  • if the business is a disruptor, the incumbents will not sit back and watch (p66); but in mature industries – like banking – they might not know how to respond (p251-2);
  • watch out for a coup attempt – those brought in to develop the business may see themselves as better able to build the business and launch. The leader of the coup will require the rest of the team to choose between you and them (pp125-6);
  • the media will pounce on stories about a coup/disagreements. PR needs management;
  • failure is normal for entrepreneurs. Investors value experience. In Silicon Valley, recording failure is part of the culture. The place where this is done is (p138);
  • it is possible to lose a whole team, be close to ruin, but start again and learn from the mistakes – primarily, getting the right people. The signs are there if one cares to look;
  • it is staggering how much can be done just using email;
  • so-called Real Options are revealed sooner than expected, but must be embraced. Setting up the businesses is only the start;
  • the team that launched the product is not necessarily the team to see it in to the future;
  • potential stakeholders/investors are watching – keep an eye on the email. Unfamiliar names may not be all bad.

Talking of bad. The bank got approval from the UK banking regulator to trade. I’m not quite sure how this works, but it does involve a lot of meetings, paperwork, disappointment and finance. It may not matter where the finance comes from. In Starling Bank’s case, Boden got an email from a mysterious investor, Harald McPike. Austrian, apparently. The eventual deal was done in the Bahamas on board a 92 metre yacht. £48m was pledged in exchange for 2/3 of the equity. So, essentially, Starling Bank is owned by a secretive financier based in the Bahamas.

That led me to a wider question about motives. Boden sees her core customers as younger types who live largely from their mobile phones. I get that. But why did the bank need to ape existing ownership models; namely venture capital based in the Bahamas? In these post-financial-crisis days, surely more of the same, albeit on a mobile, is falling short of truly disrupting? Why not a co-operative or other mutual model? Democratise banking and roll back the bank-as-an-end-in-itself principle.

There is absolutely no sense that Boden (left) might have had any reservations about the source of her capital, and that the profits would be offshored. It is not only McPike, she also sounded out Jared Kushner’s brother, Josh, in New York and John Thain famous seemingly for spending $141k on rugs for his office whilst he was at Merrill Lynch.

And what about ethical standards? The only mention of ethics was in a discussion as to whether it was ok to buy a competitor’s domain name (p197)! The website does have an ethics statement which explicitly excludes certain business customers such as arms traders. There is a commitment to planting trees, some reference to energy and supply chains. Nothing, though, that says, “this is the bank for me”.

Pic: Anne Boden, Charlottelorimer 

Book Review – Jason Hickel, Less is More: How Degrowth will Save the World

Book cover

“Degrowth the economy” has a ring of “defund the police” about it. It sounds bad, counter-intuitive and a threat to security. Surely, if we degrow, we become poorer and less able to provide services that society needs?

These are obvious questions, the answer probably starts with the issue of notions of rich and poor. As much of my most recent reading has highlighted, for as long as wealth is measured in terms of money and its exchange value; i.e. the amount of stuff we can buy with it, the poorer we become as a species. But that is largely what GDP is, a measure of value in terms of the quantified and expressed in units, usually a currency, that are convertible and comparable with other currencies.

Hickel’s final chapter is thought provoking. He’s an anthropologist, not an economist; it is that multi-disciplinarity that is so helpful in debates about economies and climate change. Hickel takes us into the disappearing world of indigenous peoples living in the forests of South America and Asia. These people live in very close proximity to nature, are reliant on it and are deeply conscious that over-exploitation will lead to shortages. Take too many fish and they will not reproduce in sustainable numbers. Sustainable here means the same for the fish as those who rely on them for food.

These indigenous people do this by viewing the natural world not as “other”; in our “developed-world terms, as objects to be exploited. Rather, the natural world is full of subjects that, for some indigenous peoples, have souls. Having a soul (note that is not humans granting other living things a soul, rather other things having immanent souls). Hickel (below right) is not just talking about higher mammals; this stretches to plants (way more sophisticated than we give them credit for) and (even the) micro-organisms that digest our food and manufacture the nutrients that make us work.

Of course, if we have a view of the world where other living things have souls – though that does not make them the same as us – then it necessitates a less exploitative relationship with “other”. As we have seen so often in the developed human world, if we ascribe other living things object status rather than subject status, they become eminently exploitable. And in any way that the exploiter sees fit. We do this to the indigenous people (Jair Bolsonaro in Brazil seeks to exterminate indigenous Amazonian people to exploit their lands); but our favourite economic system – capitalism – was based on subject-object distinctions. Colonialisation is a case in point. Indigenous people find themselves objects even if they themselves had seen the colonialists as subjects (albeit with weapons). 

If anyone thinks that it is not possible to ascribe subject status to things that are not human, one does not have to go much further than the US Supreme Court that interpreted the Constitution to include corporations as having the same liberties as individuals – at the time, of course, white males with property. That said, that decision was much to the chagrin of the founding fathers, Thomas Jefferson and Abraham Lincoln, who could see the dangers (Mintzberg, 2015).

And so to capitalism. Capitalism is a system dependent on unsustainable exploitation of resources. Our measure of GDP does this for us. It is the measure that tells us that we are in growth, recession or depression; but perversely, we can increase it by wrecking a ship full of oil because GDP measures the “clean-up” operation but not the damage done by the oil on the landscape, the wildlife and the eco-system more generally. 

Governments revel at levels of 3 per cent growth and we are amazed and envious when countries achieve 8 per cent and more. We must process what that means. At a rate of 3 per cent per year, an economy will effectively double in 30 years. That is double the resource extraction, too. As we now know, this is unsustainable. We need, argues, Hickel, to degrow.

Capitalism extracts from us more and more work. We once thought that technology would enable us to spend less time working. But it has not proved to be the case. The machines, like the one I am using now, makes it possible for me to do things that my predecessors would have given to others to do. In my work at a university, I am an imperfect IT technician as well as a lecturer. I do administration, too, all facilitated by technology and all displacing work from – and for – others who are not rewarded with more leisure time, but rather with unemployment and poverty. The excess goes to owners and executives.

Hickel reports that if we have more time, we use it not to consume more, but to spend time with family and friends. We also volunteer more. We are healthier. And we emit less greenhouse gas. Actually, we take more short flights when we work long hours as we seek, through the logic of capitalism, to “make the most” of the free time that we have. That has become synonymous with consumption. And what’s more “…nearly a third of all labour we’ve rendered, all the resources we’ve extracted, all the CO2 we’ve emitted over the past half century has been done to make rich people richer.” (p29) That stays with me as a thought.

This is what degrowth means that:

  • we work less but are more productive in the process; remove the scarcity of jobs that leads to people working longer and for lower wages. There is actually no scarcity of work in modern economies; 
  • we should advertise less and reduce the creation of wants over needs;
  • built-in obsolescence in products is ended – everything is repairable;
  • we share more (shift from ownership to usership). Equally, expand the commons – land, in particular. 
  • ecologically damaging industries are scaled back (e.g. red meat production);
  • we invest in meaningful jobs and guarantee them (in line with Stephanie Kelton’s thinking
  • we reduce inequality – more equal societies consume less and are less wasteful. The people are happier;
  • debt is cancelled for poor countries (so-called Jubilee). In order to pay the debt, countries exploit natural resources unsustainably;
  • we end debt-based currency – banks create currency from every loan they make. Compound interest is also ended;
  • we broaden democracy and participation, end lobbying/political advertising. Elite control of news media is ended. Industrial democracy becomes the norm in firms. Monopolies are broken up;
  • the power structures in key global institutions such as the World Bank and the International Monetary Fund are flattened.

Degrowth book coverLike all of the books I review, there is much more to them than the contents of this blog post. Hickel has a style that is satisfying. As an academic, he eschews too much anecdote and comprehensively gives citations and endnotes. This contrasts with Rutger Bergmann who is equally erudite, but less academically rigorous. However, it is annoying that Hickel’s book does not have an index, but that is labour-intensive, I know. My next task is to backtrack a little on degrowth with D’Alisa et al (left). 

Hickel photo – Goldsmiths College

Mintzberg, H (2015), Rebalancing Society.

Book review: Stephanie Kelton, the Deficit Myth

Without my reliable book seller, I would probably not have read this book. It arrived one day through my Covid-barrier letterbox. Once I had started reading, it completely changed my way of thinking and boosted my mood amidst the gloom that is modern politics and economics. Kelton demonstrates that, contrary to the British Prime Minister’s assertion, there actually is a magic money tree. I am going to resort to bullet points here. Here’s what Kelton tells us:

  • we do not pay tax to pay for services, we pay tax to “provision” the economy
  • governments do not tax and spend, they spend and tax
  • governments’ budgets do not work like household budgets
  • countries that have currency sovereignty (i.e. “issue” their own currency), cannot run out of money
  • the role of fiscal policy is to manage inflation, not the deficit.
  • austerity is both unnecessary and damaging economically and socially
  • deficits are a sign of a healthy economy – economies that are balanced are not innovative
  • a negative balance of payments does not mean that foreign powers have power over countries whose currencies they keep
  • currency “holders” convert their cash into interest-bearing bonds
  • countries with currency sovereignty can, and should, have full employment
  • the resources are there for countries with currency sovereignty to transform to carbon-zero economies.

That is almost enough for one book. There are plenty of reviews of this book for my readers can draw on, for example, Despan, 2020. As ever, there is no substitute for reading the book oneself. But let me take just a few of these bullet points and metabolise them.

Take Covid-19, the British Government has found £30bn to fund the furlough/job retention scheme to enable employers to retain staff when revenues are hard to generate. The Government found money to build emergency hospitals; purchase PPE (albeit inefficiently); and even pay us to eat out. The government has not disclosed how these initiatives will be paid for. The Conservative Government has spent millions of pounds on Brexit, most notoriously a £13.8m contract to a ferry firm without ferries. Oh, and those expensive nuclear weapons. Essentially, the Treasury is paying by creating money. Though by contrast, it would seem that Government spending on welfare payments to poorer people, on education, social care, etc., have to be justified and balanced by tax revenue.

Tax, more generally, is not as it seems. Kelton makes the argument that the reason that we pay tax is not to fund spending, but rather for provisioning. Governments need people to be economically active, to make things, to provide services, for progress. Tax, therefore, is the incentive for people to be economically active by ensuring that people have to give their labour and time in exchange for currency (money). There is a secondary purpose to tax, that of wealth redistribution. The obscene wealth concentration in the hands of a few known-individuals – Jeff Bezos, Bill Gates, Warren Buffet, Elon Musk, Peter Thiel – does not serve society at all. The rich who get more money tend to save it rather than spend it. Give poor people money and they will spend it in the real economy. Take a $1bn off Jeff Bezos in tax and he is left with $109bn. Would he really notice? Plus, how much has Bezos increased his wealth during the pandemic which has necessitated large-scale public spending commitments? What can civil society do with $1bn? Rather a lot, I think.

People will argue – particularly in the USA – that rich people are serious philanthropists. Bill Gates’ foundation gives billions to the fight against malaria. Warren Buffet has endorsed Gates and will donate his fortune to Gates’ foundation upon his death. There are two problems – at least – with that argument. Many billionaires have become so rich by exploiting workers, communities and natural resources. Suddenly to give excess money “away” to causes that they decide are worthy seems wrong. They distribute excess money (they do not become St Francis of Asissi). They live well and maintain their political influence. And who is to say the causes selected by philanthropists are worthy and the most efficacious? Where is the transparency, the democracy, the accountability?

Back to Kelton’s main arguments, government deficits are, by definition,  surpluses or credits to others. I buy something (debit) and give money to someone else (credit) in return for something that I actually want. But unlike governments, my debit does have to be covered either by savings or borrowing. Governments only get into trouble when they borrow in currencies that are not their own. Cases such as Argentina are often floated as examples of how deficits are bad. Notwithstanding the fact that Argentina’s 2001 inflation-led crisis caused a default on foreign debt, it did reconfigure its economy to one that focused on domestic growth and full employment. Its government moved away from US dollars both in cash terms and also uncoupling interest rates to a foreign currency.

Inflation, unemployment and climate change

Inflation is a problem for economies. In my lifetime I have seen high inflation; though nothing compared to the hyper-inflation suffered by Germany in the 1930s which still scars the landscape and leads to economic conservativism within the country and forces austerity on countries such as Greece that share the currency (the Euro). Inflation is usually controlled by notionally-independent central banks. They increase interest rates to dampen down demand. 2 per cent inflation seems to be a common target in modern economies. Overshoot and the central bank will raise interest rates. That will also impact on the unemployment rate – but modern economy managers trade off inflation and employment. Higher unemployment is a price worth paying for keeping down inflation, unless you are, of course, someone being made unemployed. This trade-off can be seen at work in a recent article by Gordon Brown, UK PM during the financial crisis of 2008. In response to the Covid-19 crisis, he writes: “Now I am the first to say that the Bank needs a more demanding constitution, one that imposes a dual mandate: to take unemployment as seriously as inflation. This should be matched by an operational target stating that interest rates will not rise or stimulus end until unemployment falls to pre-crisis levels.” (Guardian, 15 September 2020).

Kelton argues convincingly that countries with sovereign currencies can run their economies with a “good jobs guarantee”. Monetary policy has it that there is a natural level of unemployment – NAIRU. The Economist Martin Goodfried puts a figure on it: 7 per cent! In the USA, that might be as many as 12 million Americans “naturally” without work and a whole lot more who are under-employed. To keep that number of people unemployed is not some law of economics (there are no laws of real economics), it is purely a political decision predicated on a non-existent law of rising wages caused by too much employment and hence bargaining power of labour leading to inflation. When wages rise, interest rates should increase to prevent inflation from occurring.

Mainstream economics has it that unemployment benefit is sufficient to provide for the needs of people without work. Critically for the neo-liberal economists, the rate needs to be set sufficiently low so as to provide the incentive for the unemployed to take any paid work rather than be idle. The gig economy is, arguably, the result of this mentality; that is insecure and sporadic work. However, this argument is pretty phoney – most people are motivated by a sense of purpose, much of which comes from engaging in meaningful work. But the rich – for example, those who earn six-figure sums – do not work harder the more they receive in salary and bonuses. They merely accumulate believing themselves to be worth the money they are paid. Moreover, they bias the policy of their firms in order to maximise the benefits they receive. For example, if remuneration is linked to share price, CEOs may engage in share buy-backs rather than invest in innovation and new products.

Kelton identifies seven deficits that do matter. These are: employment, infrastructure, education, climate, democracy, health and savings. Let me take a couple of those deficits, starting with employment. Kelton argues that progressive governments would use the state apparatus to employ all unemployed labour on a wage that sustains individuals and families until full employment returns in the natural economic and business cycles. A good job guarantee (the good is important here) can maintain aggregate demand even in a downturn because everyone who wants to work can do so. This potentially makes the downturn of shorter duration. All citizens would be covered (not everyone is eligible for unemployment benefits either because they have not paid-in to the insurance system, or they have exhausted their “entitlement”) and purposeful work is at the heart of such a programme. Moreover, skills are retained and/or enhanced. Kelton argues further that these public works should be based in communities and the work itself should focus on developing communities – whether it be public service, caring (for elderly and children alike) or business development/entrepreneurship. It is also clear that such a job-guarantee programme could be beneficial as societies pursue environmental sustainability. It is also feasible for people to change their own direction from accumulation to sharing and “de-growth”.

That leads to the second deficit that matters, climate change. Kelton rehearses many of the arguments made by key writers in this field such as Mike Berners-Lee, David Wallace-Wells, Tim Lang, Bruno Latour, etc. If governments persist with a neo-liberal, deficit-avoidance economic mindset, then climate change will impact human society at the upper, catastrophic-end of the climate-modelled scenarios. There is no financial block on investment in green technologies. It is political. Sovereign currency issuers such as the USA and the UK can generate the financial resources needed to eliminate carbon as the source of all energy and limit warming to below 2 degrees Celsius.

In conclusion, Kelton is a credible critic of existing monetary policy. She demonstrates how we can as a society have the things we need. Society has never been provided for by taxation. It has always been spend and tax, not tax and spend. Tax does not provide the resources for public spending, it is primarily a tool of redistribution. Some rich people are not keen on that, for some reason.

Updated, 15 September 2020 to incorporate quote by Gordon Brown

My last Samsung

A few years’ ago, I watched a documentary about corruption at Olympus (the Japanese camera/optics firm). I was rather disturbed by it. To the western viewer, there was unacceptable fraud being perpetrated by Japanese executives. The British-company president at the time, Michael Woodford, found that dealing with it was not straightforward and could be dangerous. What he could not understand with his capitalist mindset was that losses were not only about honour in Japanese society, but also about social welfare – the interests of generations of employees (Olympus people) were intertwined with the fortunes of the company. The Japanese executives did what they could to avoid the collapse of the company for that reason – something that is difficult for a western mindset to embrace.

So in reading Geoffrey Cain’s book (left) about South Korea’s Samsung corporation, packed full of examples of fraudulent business activities, should I try to understand the cultural imperatives and conclude the book was a good read? Which it is, though the style as a thriller is annoying, but that is just me again. Samsung is a family business traded on foreign stock markets. It is the cornerstone of the South Korean economy, run as a business empire with a patriarch who can be convicted numerous times for services to the ruling family and somehow evade the full force of the criminal justice system. The book concludes just at the point where the current patriarch, Lee Jae-yong (Jay Lee), was facing a re-trial on bribery charges after a successful appeal by prosecutors to the Supreme Court.

The charges are intimately linked to Lee Jae-yong’s attempts to retain control over the company and not pay much inheritance tax in the process. Although Samsung is traded on stock markets,


1999 Samsung SQ5, later called SM5

investors do not buy a stake in the parent; there is a lot of cross-shareholding that does two things. It blurs the precise nature of who owns what whilst ensuring a controlling role for family members. It is a conglomerate, but at the same time not. Family members control the affiliate businesses including a theme park, a hospital, shipbuilding, fashion and chipsets. It made motor cars in my lifetime (right) The cross-shareholding allows the family to retain control with relatively small shareholding. The structure is frequently adjusted in the interests of the Lee family.

In 2015 one of these adjustments involved two affiliates merging to the considerable detriment of the financial interests of the existing shareholders of one of those affiliates, C&T such that it was being valued at less-than zero. As Cain notes: “Samsung argued that this was an attempt to consolidate business units…Jay Lee owned a 23 percent stake in Cheil Industries, the company acquiring Samsung C&T [Construction and Trading], which in turn owned a 4 percent stake in Samsung Electronics, the crown jewel. The merger would simplify and solidify Jay Lee’s control of Samsung Electronics through this shareholding web, starting with Cheil at the top” (p245). To make matters worse, the family managed to convince one of the largest institutional investors, The National Pension Service (NPS), to support the merger despite it not being in the interests of its own stakeholders; namely, South Korean pensioners and those hoping to retire on a pension. In the end, a combination of the devaluing of the NPS’s shareholding and the stock market’s response, it lost $500m – a straight transfer from the people to an industrial elite!

Even a US hedge fund, Elliott Management, led by Paul Elliott Singer, failed to stop it. Singer himself was described by Bloomberg as “The World’s Most Feared Investor”. Samsung engaged in some pretty unsavoury propaganda to discredit him. Singer is Jewish and Samsung went full-on antisemitism even going to the point of setting up a website called “Vulture Man” with a slide show depicting a vulture, thought to be a caricature of Singer, “whose sadistic practices consisted of plotting and preying on the poor and disenfranchised around the world” (p250).

Samsung’s origins are uncomfortable from a 21st Century context. Its founder, BC Lee, was educated in Japan and was enamoured to say the least by Japanese Zaibatsu, powerful family-dominated industrial and financial business empires, which fell victim to post-war reconstruction. Lee’s first business operation was in supplying vegetables to Japanese soldiers in Manchuria. That story itself has unsavoury implications, though from a business perspective, perfectly reasonable. A man familiar with Japanese cuisine supplies vegetables to customers in Manchuria. The fact that they were an occupying force is neither here nor there.

After WWII, the South was invaded by the North; 3 years’ of war saw most of Lee’s assets taken or looted. Lee then entered sugar refining and wool spinning, banking, insurance and chemicals. Samsung was intimately involved in the economic transformation of the country arising from the military coup in 1961 led by General Park Chung-hee after some horsetrading over the scope of Samsung business interests. Actually, the state wanted the banks.

selfieThe transformation into an electronics firm started to take shape with the acquisition of a semi-conductor firm in 1974. Always a supplier, Samsung powered the first iPhone. In fact without very close collaboration between the two firms the iPhone would not have made it to the market and that infamous 2007 presentation by Steve Jobs at the Macworld convention would not have happened. That event is itself a tale of trade-off and compromise.

Samsung seems to have been obsessed with beating competitors. First, Sony in terms of design and LCD screens/televisions. More famously, beating Apple, particularly in the American market for which Samsung employed a crack team of marketers led by Todd Pendleton. Their White Glove project culminated in one of the most famous non-selfies when Ellen deGeneres tried to make a selfie  with Meryl Streep using a Galaxy mobile at the Oscars ceremony in 2014. It ended up being the most-retweeted Tweet (right) featuring other stars such as Julia Roberts, Channing Tatum, Jennifer Lawrence, Bradley Cooper, Brad Pitt, Lupita Nyong’o, Jared Leto. And Kevin Spacey.

It is at this point in the book that I realise how meaningless life is.

The politics are much more interesting than the marketing; and much more unsavoury. Further words are expended on the PR disaster of the Galaxy Note 7 and the company’s insufficient recall policy and unwillingness to come clean about the cause, or indeed the danger. Readers will not be surprised to learn that there turns out to be considerable institutional causes over-and-above the design flaws. And then there is the premature release of the folding-screen phone that was so delicate that it broke by looking at it. Cain concludes, however, that we, the consumers, are just seduced by good products in nice cases. We will overlook the behaviour of the manufacturer in pursuit of consumption. My Samsung  S8+ is now into its fourth year. That is a testament to the product (and a bit to my care and attention to it). My next mobile will not be a Samsung.

25 October 2020 – death of Lee Kun-hee announced:

Pics: Samsung SQ5: raul • CC BY-SA 3.0

Why solar power is the answer


Demonstrations against nuclear power, Hull, 1983

Again, showing my age, there was a time before chiller vending machines. I had just started at college and one arrived on campus. There seemed to me to be two things instantly wrong with them. First, the drinks – sticky water really – were packaged in aluminium cans. Giving back aluminium cans to supermarkets had been one of my earliest experience of environmental activism. I’ve never liked them because of the energy required to make single-use containers. Second, chillers used energy to chill something that really did not need chilling. It was purely an aesthetic, especially in the middle of winter. Chillers just multiplied from that point onward. It seemed to me throughout my formative years that we used energy for things that did not need energy. Shop windows at night. What was that all about?

It kind of didn’t matter in those days. Aluminium smelters were located near to hydro-electricity stations and there was plenty of coal and generating capacity to burn it. Plus, chillers and lit shop windows made life better. Apparently. It is true, it was a piffling amount of energy relative to the big users: iron and steel producers, paper mills, bitumen manufacturers, water-treatment works, industrial-scale refrigeration. What I did not know before reading Chris Goodall’s book, The Switch, was that some smart people run businesses that sign up some of these large energy users and gain permission to turn off their equipment when the grid is under pressure at peak times. One Belgian company, REstore (now part of Centrica), operates a platform that monitors the real-time use of electricity of its clients and gauges whether they can be taken off-grid for a certain amount of time to level out demand. The platform is clever – or at least the people behind it are – in that it works out just how much energy can be taken from a big customer without affecting production. For example, molten steel stays that way for some time. Even 5 minutes off-grid can provide enough capacity to keep everyone else secure in supply. The company receives money from the grid in exchange for its clients coming off grid when requested to do so.


Hastings Railway Station: why no solar panels?

Why is this important? it is important because despite the startling fact supported by a logic that I am not going to argue with, photovoltaics (PVs) can supply humanity with all of the electrical energy that it needs more cheaply than by any other renewable mode. Contrary to what I had thought about chillers and well-lit shop windows, actually energy consumption is declining in developed countries. In the UK, apparently, we are back down to levels of consumption as of 1970 driven by two things. First, it is actually difficult for those in the rich west to consume much more. There is unlikely to be more chillers because – probably – there is nowhere to put them and we cannot realistically drink more sugared water. Second, many of the things we still consume are getting more efficient, in particular lighting (see below). Semi-conductors, too, are becoming energy efficient, exponentially so.

How much electrical energy does humanity need? Goodall thinks that a decent standard of living can be achieved by a total running energy demand of 3kw per person (one-third more than the running demand in 2015). Scale that up, that is about 30 terawatts of power (twice the level in 2015). Goodall notes, too, that the amount of available solar energy is: ten times that of the nearest renewable alternative, wind; one-hundred times that of biomass; wave and hydro are some 13 times less than biomass. All we have to do is collect the solar energy and covert it. Well, not quite.


Roofs in Hastings. Spot the solar panels

PV cells are getting cheaper. Goodall uses the concept of the learning curve to explain this. Essentially, the more units manufactured, the more learning about how to manufacture them quicker and more efficiently. The decline in the costs of manufacture has a name, Swanson’s law (Like Moore’s law in semi-conductors, but bigger).

And maybe my chiller and shop window lighting gripes are actually valid? In a solar-dominated world – and especially in the temperate North – energy use peaks between 1600 and 2000 daily. There is an overlap between businesses shutting down and people arriving home, turning on lights and cooking dinner. Goodall reminds us how crazy it is that we do not have demand pricing for energy at these peak times. In the zero carbon world, we are going to have to turn off our lights and appliances at peak times. Ensuring that all light fittings are LEDs, seemingly would make a huge difference – demand can be reduced by one-third by this very simple change. Goodall goes further and advocates we all sign-up for smart meters on the basis that, in the washingend, suppliers will be able to shut off energy-hungry appliances at times of stress for the grid. He’s thinking particularly of our washing machines, tumble driers and dishwashers. My supplier invites me weekly to install a smart meter; I have been reluctant to let them into my house, but maybe there is a utilitarian case for it?

So, controlling demand at peak times is one element of the solution. Another element is alternative sources. As noted above, wind is the second-best option here; conveniently there is an inverse relationship between solar and wind – when it is not sunny, it is often windy. Wind turbines, however, cannot compete on price with solar. At the time of Goodall’s writing, the best solar conversions were coming in at US$0.06 per Kwh. Swanson’s law suggests that this conversion can go down further. However, such prices are half that of the best performing fossil fuel sources (p47). Wind can do about US$0.07 in its best places (Texas, for example), so it is a good complementer, and works at night and when the sun does not shine so brightly. Wind’s experience curve, however, is much less steep and sustained. It is also more expensive to site turbines (rental charges can be quite high; offshore has quite high maintenance costs).

SpongThere is also room for public policy – a south-facing roof in a city should have solar cells mounted on it. Equally, dwellings need to be made energy-efficient. A bit of insulation is insufficient. Rendering UK housing stock energy-efficient, in particular, is a major task. It is going to take central government support to transform regular houses, but companies like Energie Sprong (right) in the Netherlands (operating in the UK) show the way; though at £30k, it is quite a commitment. One house in a block seems a little pointless. We may need to do a bit of getting together to make this happen. Though disappointingly, there was no sign of money for these kinds of developments in UK budget statement of 8 July 2020.

Then there is the battery solution which has been driven by a rapid diffusion of electric cars. Elon Musk’s Tesla vehicles’ high performance depends on high capacity battery storage – in his case based on lithium ion technology (fast discharge). Seemingly there is enough lithium on the planet to build the necessary batteries. The United States Geological Service estimates that there is 13.5m tonnes available, which is more than enough and is recyclable. What Goodall doesn’t tell us, however, is whether this lithium is accessible, subject to geopolitics and/or would have environmental implications if it was exploited. There are other battery technologies – flow batteries are slow discharge, so not much use for cars, but work for other less dynamic applications such as mobile phone masts.

illustrativeThen there is pumped hydro – excess daytime electricity is used to pump water up for hydro-release when the sun does not shine. There is one in the UK at Dinorwig in Snowdonia (left). It can react quite quickly at peak times. But scaling up is not easy; there would be more damning needed and lots of power lines. Effectively, we are still short.

Fuels are stores of energy. Fossil fuels are particularly good because they are concentrated stores which means you get a lot of energy per bundle rendering it possible to have meaningful fuel tanks in cars and aeroplanes. Goodall doesn’t hold out too much hope in the hydrogen economy – it is way too dangerous and difficult to store and is not particularly dense in its energy. Time to turn to microbes. Carbon neutral fuels are possible. Here’s the logic: take hydrogen and carbon dioxide, literally feed it to known microbes in return for energy-rich molecules containing hydrogen, carbon and oxygen. These can be stored in existing oil storage infrastructure – a bonus for what will need to be a rapid switch.

Goodall advises us to keep an eye on a couple of pioneering companies – Electrochaea and LanzaTech. Both use microbes to convert various elements and compounds – carbon dioxide, carbon monoxide oxygen and hydrogen – often taken from the environment, sewage installations or from industrial plants such as cement factories before emission, and converted into a liquid fuel – methane and ethanol – that can be stored and used when needed. Just like with hydro, excess summer electricity is used in the conversion process. The excess, argues Goodall, is actually worthless. PV generates more electricity than is needed in the summer, so putting it to good use is no bad thing.

Finally, there is air capture of carbon dioxide. This is inherently a good thing as it would actually remove carbon dioxide from the atmosphere. It does not require the burning of fossil fuels to capture it to then use it to make liquid fuels. A company called Climeworks in Switzerland leads the way here. Carbon dioxide is captured, combined with other elements to produce liquid fuels. It is expensive at the moment and would benefit immensely from the world adopting realistic carbon taxes as Climeworks’ carbon dioxide would be tradeable. Investment costs are equally important. Low interest rates help in the development of technology and installation, particularly of PVs for consumers.

I am still convinced that saving energy is still important and might contribute to reducing the deficit between what renewables can achieve in the winter and dark months. It does not seem to me just to be a case of our appliances becoming more energy efficient. Those drinks chillers and shop windows can still be turned off.


Energie Sprong –

Dinorwig –


Book Review – Rutger Bregman, Humankind

illustrationI was going to start with what I dislike about this book, but that would be contrary to its whole ethos. I had in my head that there was something opportunist in Bregman’s prose, and hence the man himself. I have to say that this book could be life-changing, or in the case of oldies like me, a bit of a booster, like one gets to top up a vaccine every now and again. In life I can see myself slipping into pure cynicism. Bregman is a check on that. So I am going to change the criticism to give readers some idea of how I should be thinking rather than the way that I have come to think.

So, here is the re-writing of my original first paragraph (I’ve moved what was the original first paragraph to the end of the review for anyone who is remotely interested).

Regular readers know that I do not watch much television, though I did when I was a child. As I got older and was allowed to stay upillustration later and watch adult television, my father insisted that we watch documentaries rather than sit-coms and soaps (we’re talking the 1970s). The format was always the same: an expert or knowledgeable person (or both, James Burke, right), would present in a quite succinct way some science or current affairs. There was never any music and the expert or knowledgeable person had no dress sense, even then. With hindsight, one of the reasons for the no frills was limited bandwidth. Broadcasting hours were fewer back then, and there were no specialist stations. It was broadcasting in the true sense. There was insufficient airtime to waste on unnecessary graphics, or choreography. In recent times, I have been reading much more than I used to – the pandemic has helped. I have noticed a style of writing in popular non-fiction (a genre that I have traditionally avoided out of snobbery). It is akin to current TV documentary style. There’s a soundtrack, an extended narrative with cliffhangers and expansive prose. I realise that this book in this style is not produced for me. Though if it gets people engaged with science, current affairs, art, philosophy, then all well and good.


I started reading this book, not because I want to be convinced at how kind humans can be – which is the point of the book – but because I know Bregman is an important commentator. I finished it, incidentally, because I wanted to be convinced of how kind humans can be. Bregman made a big splash at Davos in 2020 in telling rich people that they should pay their taxes, and in the US when he took on Fox News’ Tucker Carlson. He is not going away in a hurry. I commend him for that because ultimately he is on the right side of history, albeit a white history. But the style of writing is not entirely to my liking but I know this view is not shared!

The first part of the book seeks to debunk the hypothesis that there is a human predilection to violence and being beastly to one another. I have not checked the veracity of many of the claims made in the book, but here are a few that I really want to be true:

  • blanket bombing of populations in war does not result in the surrender of those subject to it
  • soldiers do not like shooting at other soldiers, even if they are deemed to be the enemy
  • Lord of the Flies is a work of fiction; left to their own devices, boys will create order and manage their way through
  • the people of Easter Island did not engage in tribal warfare that decimated the population (colonialists did that)
  • The Stanford Prison Experiment was a contrived hoax to enhance the reputation of social psychology and academics

illustrationThe philosophers at the heart of Bregman’s analysis are Hobbes and Rousseau. The Hobbesian world is that of the Leviathan – the human need for strong leaders, discipline and order to prevent a state of chaos, barbarism and cruelty. The Rousseau-ian world is one of the social contract, cooperation and common interests regulating behaviour. Bregman makes the argument that it all started going wrong when private property was conceived, when people – who became powerful and rich – were able to enclose common land and exploit it for private gain. These people built a civilisation on slavery, private property and the exploitation of natural resources. This has been a theme of other books that I have recently read; namely, Adreas Malm’s Fossil Capital and Tim Lang’s Feeding Britain.

There’s a chapter on Stanley Milgram and the “shock machine” – an experiment in 1961 where volunteers administered electric shocks of up-to 450 volts to so-called “learners” in an adjacent room. Milgram was Jewish and, claims Bregman, devised the study to to offer an explanation for the Holocaust. People follow orders, hypothesised Milgram, irrespective of the implications, genocide being one of them. All is not, however, as it seems. Bregman argues that the experiment did not test obedience, as stated, rather it tested goodness! The subjects, although paid, participated because they believed that the research would result in a contribution to knowledge. An explanation for the Holocaust was a worthy study. There was trust in the research and people in white coats who kept insisting that they needed to continue to administer the electric shocks for the research to be valid.

It was also the time of Adolf Eichmann’s trial in Jerusalem. Bregman’s case for human kindness could not exclude a discussion on the Holocaust. I do not have the authority or knowledge to engage with the terms of Eichmann’s guilt. What is recorded is that Eichmann presented himself as someone who just followed orders. Hannah Arendt who witnessed the trial first hand coined the term, banality of evil, to capture the essence of the Eichmann phenomenon as she saw it from the courtroom. There is much debate about exactly what she meant, though it was largely interpreted as her accepting Eichmann’s defence. Bregman concludes that Eichmann’s motive for his actions was actually a commitment to a cause that he believed would lead to a better society, however perverted.

What about the German citizenry who fought to the very end of the war, despite the inevitability of both the eastern and western fronts being breached? The evidence points to camaraderie, argues Bregman, rather than ideology as the cause of seemingly pointless resistance.

More optimism

Bregman takes us with him to visit some interesting people. For example  trained nurse and economics degree dropout, Jos de Blok (right), not someone I’d previously been aware of. He runs a large healthcare company in the Netherlands called Buurtzorg. He does this not by dillustrationesign, but as a consequence of working in the sector and realising that it the care service was not fit-for-purpose. Care is not delivered optimally as a product (i.e. commoditised) and by people who get their orders hierarchically, rather by people who work in small autonomous teams. De Blok is not unknown; he is in receipt of the the Royal Society of Arts’ Albert Medal. Previous recipients of this medal have been Stephen Hawking (physicist), Tim Berners-Lee (the www) and Francis Crick (DNA). So, he’s in good company.

Then there is the story of the transition of South Africa from Apartheid state to inclusive democracy under Nelson Mandela. The period between Mandela’s release in 1990 and the presidential election in 1994 was precarious. I was aware of the ugliness of Eugène Terre ‘Blanche and his Afrikaner Volksfront. I was not aware of the Viljoen twins. The family resource meant that only one of them could go to university. Constand said that brother Abraham should go. Constand (left) joined the army and became a senior officer in the South African Defence Force in Apartheid South Africa. Abraham studied abroad and found himself irreconcilably parted from his brother and aligned with the ANC and Mandela. Constand joined Terre ‘Blanche. I’ll leave it there – it is worth reading the book just for this section and only goes to raise my emotions. Mandela is the leader that we all need.

If any reader thinks that I have covered everything in this book, I have not. It is packed with ideas about positive reforms: education, democratic, penal, protest and warfare! The protest issue is so pertinent as I write at a time when the USA is convulsed by the racist Murder of George Floyd. Drawing on a study by American sociologist, Erica Chenoweth: “In the real world, she thought, power is exercised through the barrel of a gun. To prove it, she created a huge  database of resistance movement going back to 1990. ‘Then I ran the numbers,’ she wrote in 2014. ‘I was shocked.’ More than 50 per cent of the nonviolent campaigns were successful, as opposed to 26 per cent of the militant ones. The primary reason, Chenoweth established, is that more people join nonviolent campaigns. On average over eleven times more. And not just guys with too much testosterone, but also women and children, the elderly and people with disabilities. Regimes just aren’t equipped to withstand such multitudes. That’s how good overpowers evil – by outnumbering it.” (p359). At a time of Covid-19, however, maybe not.

Bregman keeps caveating his narrative with admissions of imperfection in the characters and methods he presents. Deliberative democracy works sometimes, not others. There are some truly bad people around – power corrupts, absolute power corrupts absolutely in Lord Acton’s famous phrase. But Bregman is right, too, that if we treat one another badly in our places of work, jails, schools, communities, we cannot be surprised if it is reciprocated. We have seen during the pandemic real goodness in people, communities coming together to help one another and even the act of self-isolating and observing the lockdown are unexpected demonstrations of togetherness. Let us try to retain some of that as we move on, starting with the rewriting of my first paragraph.

Here is the original first paragraph:

The more I have been reading recently, the more I have seen this style of writing. Now, I do not watch much television these days. But when I was growing up – I know I keep going on about this – television documentaries used to have an expert or knowledgeable person (or both), would present in a quite succinct way some science or current affairs. There was never any music and the expert or knowledgeable person had no dress sense. One of the reasons for this succinctness, I imagine, was limited bandwidth. TV programmes did not start showing until late afternoon and TV stations shut down by midnight, apart from at the weekend. And then it was half-past midnight. There was such a shortage of airtime, so every minute mattered. Hence the quality of the output. Bregman’s book is a documentary with music, and is excrutiating for it. Moreover, it is extremely patronising: “This may get a little technical, but we need to understand where he went wrong” (p88). It then proceeds to be not very technical.


Bregman: Victor van Werkhooven

James Burke:

Jos de Blok:

Constand Viljoen:




I work in a Business School: Shut down the Business School

Martin Parker (left) tells us in his new book, Shut Down the Business School (below right),  what we already know. We know that Business Schools are – to use that always unhelpful metaphor – cash cows – for universities the world over. They are a volume business in themselves. They also sell a product – the dream or aspiration of riches with the right formula learned at the Business School.

That definition of riches – or personal wealth – is a capitalist-managerialist one. It is one in which (let me turn this into a powerpoint presentation):

  • bosses boss and everyone else does as they are told;
  • bosses – managers – are worth more than the people who work for them (defined in salary and benefits/perks)
  • managers’ decisions are right (until they are not);
  • meeting or exceeding shareholder expectations is the purpose of firms;

Business Schools are multi-disciplinary – that is definitely a plus – and the aggregate business discipline is a social science. The disciplines, for Parker, are (pp 26-34):

  • Finance (always assuming that earning rent on capital is a legitimate and perhaps even praiseworthy activity, with skillful investors being lionized for their technical skills and success);
  • HRM (not particularly interested in what is like to be a human being);
  • Management information systems (premised on the sensible assumption that high-quality, relevant and timely information is necessary to make high-quality relevant and timely decisions, but agnostic about direction or context of the made decisions);
  • Operations management (aimed at shrinking time and space, and when successful destroys the local);
  • Accountancy (the production of different versions of the truth for different purposes);
  • Marketing (predicated on maximising the number and value of transactions within a given organisation, market or economy, promoting hyper-consumption);
  • Strategy (an attempt to predict the future and shape an organization in such a way that it profits most from what that future looks like).

Economists are spared character assassination, MBAs (the award and the award holders) are not, and there is not much that is good to be said about professional organisations such as Business School accreditation and Accountancy bodies. Government and regulators are also chastised and the universities obliquely for currying favour with them.

Of course, practitioners in these disciplines are likely to be unhappy with these characterisations. But Parker is trying to make a point and breaking a few eggs in the process. For whilst in each Business School there are scholars happily teaching to formula, many are not. He puts himself in the not category as a critical management theorist. These iconoclasts are generally tolerated in Business Schools. And successfully ignored, though their books and papers are, usually, counted in the compilations of league tables of excellence in publishing.

Where is this going?

This book follows the formula for the books that I currently read and review: tell a ghastly story of how it is, and then lead the reader to a new and enlightened future. For the Business School, Parker has a number of ideas. The marketisation of education has turned education into a product. The Business School then provides the customer – students, their parents – with what it thinks they want; namely, the formula for being a manager, creating wealth (for self and others) and “success” (judged against spurious measures).

Parker’s solution is a School for Organising; one that does not view organising and management as synonymous. There is no reason – as demonstrated in countries such as Germany – for workers and their representatives to be excluded from Executive Boards. There is no reason for firms to prioritise shareholders over employees, workers and community. There can be no justification for the raison d’etre of firms to be to externalise pollution and bring about the collapse of civilisation (which is the likely outcome of uncontrolled climate change). The “hollowed-out” state, as we witness currently (writing in the middle of the Covid-19 pandemic lockdown in the UK), has left citizens vulnerable to a virus for want of Personal Protective Equipment, the provision of which in the UK was outsourced and subject to minimal inventory control, something that the managers of the supply companies and the politicians, learned in Business Schools.

The new Business School asks “How can people come together to do stuff”? (p113). What are the alternative modes of organising, both political (for example, anarchy) and business (for example, co-operatives such as wholefood wholesaler, SUMA, pp116-119)? It is truly interdisciplinary – not just within the School’s disciplines, but external, too. Other faculties such the natural sciences and humanities (art and business are very good companions). For myself and my own writing (I am writing a strategy textbook, please get in touch if you want to read it), the natural sciences are the starting point of our business courses. The planetary boundaries are the starting point for organising, not an afterthought. It is the job of the new Business School to alert students to the possibility of alternative ways of organising, evaluation and making decisions.

The disciplines ridiculed earlier are repositioned. “Accountancy is no longer about finding and hiding profits” (p169), marketing works for the people who buy things, not those who sell; operations management correctly prices carbon and other pollutants against speed and price. Economists teach de-growth or reformulate GDP in human terms.

Parker is also aware of the dangers of setting up a School for Organising. Over time, it becomes its own Business School, packed with salaried professionals with pensions detached from the people who are subject to the School’s teachings. There is a need, he argues, for de-schooling (drawn from the work of Ivan Illich), a much more co-operative approach to learning – learning being the operative word. That said, there has to be room for study – a discipline, a task – without which more bad decisions get made. De-schooling to its natural conclusion of no School at all is no panacea. The Business School is politics and politics is about power and the control of resources. There is nothing, however, to say that what the Business School teaches has to be capitalist-managerialist.

Picture: University of Leicester




Food security in the UK – time to worry

Tim Lang (right), professor of Food Policy at City University’s Centre for Food Policy, is the go-to person by the media when food policy and security make the headlines. He was a frequent contributor to BBC Radio 4’s Today programme when it became clear that the UK faced food shortages in the event of a hard Brexit. Reading his latest book, Feeding Britain: our food problems and how to fix them, one can see the extent that he should host the show, not just contribute to it when the headlines demand. Food security in the UK is a big problem, and its fragility has much to do with British exceptionalism, a situation that, in the context of Brexit, is fast receding. This is the first book that I have read that actually makes a credible case for Brexit; it is not intended to do so and it is something that Lang stumbled upon rather than explicitly endorsed. More on that in a moment.

Feeding Britain is published by Pelican Books (below left), an imprint of Penguin/Random House, The imprint publishes work on hugely topical issues in accessible styles. In reading Lang, one senses the haste with which it was written. It is in no way sloppy, far from it, but Lang knows every reference whether it be a long-published academic article, government report or personal interaction. It has inspired me to get moving on my own work. It demonstrates what is possible from a life of accrued knowledge. There are 470 pages of text. Each one is a gem.  Each one leaves the reader out of breath.

Where to start? Actually, it is quite simple – some history basics. Britain’s imperial past is, to put it generously, chequered. It is, seemingly, the origin of the British thought, paraphrased here, that someone else will feed us, so we do not need to bother growing stuff ourselves. The growing is usually done by people in far-away lands, the rural poor, who receive a small fraction of the value of the product ascribed to it by end users, usually in the rich West. And even when fresh produce comes from near neighbours such as Spain, the back-breaking work is done by migrant labour often paid below minimum levels in the country, and affording them a lifestyle far short of that enjoyed by the beneficiaries of their labour. It also comes with a huge carbon footprint, a consequence of mono-culture and extensive transportation.

Coupled with the imperialism argument, the concentration of land ownership in the UK which started with the Enclosures of common land in the 17th and 18th Centuries; annexation of Church land under Henry VIII and more recently, enclosures arising from the privatisation of much of the public sector since 1980. Lang puts a figure on it – 189,000 families own 2/3 of UK land or one-half of England is owned by 25,000 people (p368). This is all made worse by the commodification of land – it is an investment, not a source of sustenance or habitat. 3,660 per cent is the figure by which land values have increased in the last 50 years. This means that, at the very least, it is difficult for small farmers to produce appropriately and sustainably. It forces tenants – and they usually are tenants – to use intensive methods to increase yield and further inflate the value. And on top of that, owners attract production subsidies from the EU – and post Brexit, presumably from UK taxpayers! (That mechanism is described in pages 370-7.)

Allied to the land ownership debate, Lang charts the changing percentage of income people spend on food vis-à-vis other things; notably, housing costs. The land owners, by this argument, not only enclose land and extract a high Gross Value Added from it (relative to the growers), they also own the properties in which the majority live. In extracting more from tenants, the margin has to be squeezed out of food prices (and by definition costs). Cheap food, argues Lang, is then equated with good food (not because it is nutritious, but because it seems to be good for someone else’s wealth). Moreover, the price of food rarely incorporates the externalised costs of production – environmental damage, health and society more generally such as life expectancy (which bad food shortens).

More positively, shortening supply chains would be a positive example of taking back control! And this is the Brexit argument. Though we know only too well, that Brexiters see the extension of food chains as being a Brexit benefit, and with it a reduction in quality, safety and increased insecurity, the UK no longer has the capability to defend those supply chains against hostile state actors or have the global influence to guarantee supply in time of scarcity, unlike in the imperial past. Security is also threatened by cyber attack on those supply chains, something that Lang believes is under appreciated within Government (and society more generally).

Lang argues that the National Minimum Wage or the National Living Wage needs to be re-calibrated to pay for, what he calls, sustainable diets. The factors above have been made worse – and particularly in the UK – by the population moving on to super-processed foods that are high in fat, salt and sugar (HFSS). Again, the costs of this are externalised (the National Health Service costs obesity alone as £6.5bn and a wider societal cost of £27bn – p207). Lang is adamant that an escalator tax on HFSS foods needs to be introduced. Pension funds, too, should divest from firms that manufacture HFSSs. Ad-spend (marketing is also disproportionate relative to health promotion, and it is targeted at children through social media. Lang also argues that the large supermarkets – singling out Tesco with its 30 per cent share of UK grocery market should be broken up.

Lang is not making an argument for growing out-of-seasonal foods in the UK in the middle of winter under lights and heat (even if


Source: Billy Hathorn

they had taste, which he clearly thinks such produce does not); that does not help the carbon footprint much. Rather, he is saying, that we have to grow more food in he UK (the country produces only 53 per cent of its own food) that is consumable directly and not, as seems to be true of much of arable farm produce in the UK, fed to animals, some of which like ruminants are hugely inefficient converters of plants into meat as well as huge greenhouse gas manufacturers. They fart. A lot. Land use is dominated by rearing and feeding animals. That very process, too, has an external cost that could be fatal in the future, antibiotic resistance as such valuable medicines are routinely fed to animals to retain “yields”.

There are also things about imported foods that I had not thought about. For example, we should not take water for granted, even though the UK is temperate and generally wet. If we import food from countries that are short of water, but whose products are full of it (fruit, vegetables, etc.), there is a net imbalance and a cost to the growing country and its people, nothwithstanding their foreign earning from the produce (often imported by air). Huge volumes of water are in foodstuffs that we do not anticipate, such as rice. Lang’s section on water imperialism is a must-read, pp225-44.


Cornish Aromatic apples (source: Brogdale)

Lang highlights that the UK produces so little of its own fruit. Whilst many exotic soft fruits are not viable in the UK, apples, pears and berries are eminently feasible and desirable. The population does not get anywhere near 5-a-day fruit and vegetable consumption (which seems truly bizarre and frightening at the same time). On horticulture, in 1950, there were 3000 apple growers in the UK, by the mid-1990s there were 800. Government grubbing regulations facilitated the destruction of orchards through subsidy! (p91). Lang contrasts the UK case with France where small growers and cooperatives are significant suppliers (the cooperatives provide the scale). Scale in the UK is provided by very large and concentrated growers and importers.

Finally, there is an important role for education, not only in terms of teaching children about food, its origins, how to grow it (sustainably), and how to cook primary ingredients, but also in what children are fed at school. Diet regulations for school meals, argues Lang, need to be universal, not just in the poorest, most regulated schools.

OK, I’ve done some hard work on the reading; it is time for us all to do some hard work in changing the way food is understood, used as a political tool, traded and prepared.



How capital took on labour and gave us climate change in 400 pages


Back in 1989 when I was a student, I took a “course”, as they were called then, entitled Political Sociology. I took it because the other options were over-subscribed. I don’t know whether it was because I was not favoured that particular year and simply did not make the cut for other courses, or whether someone unbeknownst to me, concluded that Political Sociology was just what I needed. If the latter is correct, whoever it was, thank you. Without it I would not/never have read Stuart Clegg’s phenomenal book, Framworks of Power (left). There were 10 weeks of seminars (no lectures) and, each week, I or one of my peers would lead a chapter. Under normal circumstances, this would have been quite straightforward, but this book is tough going. Really tough going. Each chapter, I recall, took about 7 or 8 hours to get anywhere near understanding. Clegg was mischievous, he knew how difficult he had written it. He knew that students like myself would be required to read it. It is that requirement that meant that one had to persevere. The seminar leader was uncompromising on that, thankfully. The rewards for completion and assimilation were immense.

And so it is with Andreas Malm’s, Fossil Capital (right). This book takes no hostages. Its 400 pages are some of the most uncompromising prose. Malm is not in a hurry; and the reader is not invited to be in a hurry either. To be so would result in a less-than satisfactory outcome. It lends itself to being the subject of a “course” with 10 weeks of study. I am not sure that happens anymore. Malm’s book is basically in three parts. The first section is a history of the machinery that delivered the industrial revolution in Britain. The machinery was powered by coal (steam generation) – the reasons for that “prime mover” makes up 250 of the 400 pages. The second section is philosophical – Malm applies an essentially Marxist analysis (about 80 pages) to get to the nub of the cause. The third section is Malm conceding a certain pessimism about the future; about humanity’s ability to get out of this mess. Verso, the publisher, was, apparently, committed to the project. They must have because had they not been, an editor would have cut by a third, if not more. That would have been a shame because the detail, often repeated, assists with the final analysis.

Prime Movers in the industrial revolution – water or steam

The detail is awesome. Malm’s account of the work of Robert Thom’s water projects, the pinnacle of which was

Greenock Cut sluice building

the Greenock Reservoir and its 6-mile long acqueduct (the Cut). Much space is given over to Thom and his projects in order to demonstrate how water as a “prime mover” – with imaginative and skilled civil engineers at the helm – could have provided all of the power needed by the textile industry. That was not the purpose of the Greenock reservoir, but the engineering that delivered water to the town could also deliver water to mills, turning wheels to power spinners inside factories. In fact, the Greenock project offered 1666hp as a basis for a “vibrant” – probably sustainable – cotton industry around the town. (It was calculated that mills could share this power, each with 50hp – the average from steam at that time was 29hp.) The potential was never realised and the reasons clear.

First, flowing water was a shared resource. It was a commons – it could not be owned, only managed. The mill owners simply could not co-operate to provide the necessary investment and also self-regulate. Some sites were better than others; the less-well served sites would require other users to regulate their own consumption to maximise the utility of the resource on a daily, monthly and yearly basis. Plans for developing the River Irwell in Lancashire ultimately foundered here. Other schemes were unable to get parliamentary approval not least because cotton industrialists were well represented in the House of Commons.

Quarry Bank Mill, Styal, Cheshire

Second, labour militancy and mobility. On the latter, water mills were located along river courses outside of main towns and cities, such as Manchester. In order fully to attract and maintain a workforce, mill owners had to provide additional resources such as housing, education, leisure and places of worship. There are exemplars – Richard Arkwright’s so-called colony in Cromford, Derbyshire and Finlay’s in Catrine, Ayrshire, for example. Colonies had their issues, but they provided sanitary conditions for employees and their families. The benevolence was not always appreciated and workers often “absented” themselves which resulted in owners taking on “unfree” workers – nothing short of slave labour, that was dispensed with after 10 years’ of indentured service. The apprentices were recruited from the age of 12 and often came from workhouses. The colonies also bred labour militancy – wages were going down and work rates increasing. In March 1830 there was a definitive and violent strike in Arkwright’s New Eagely Mill.

The Apprentice House, Quarry Bank Mill

Where capital is not mobile, it is not optimised. Whilst coal needed for the steam engines that drove the spinning machines was expensive relative to water, it was mobile. It could be deployed in major towns and cities relinquishing the need for additional “colony” investment. It could be controlled and managed by individuals – the owners themselves. Labour was also eminently more controllable. With no colony commitments, costs were managed. Coal was expensive to transport so mills and mines were often co-located (e.g. Wigan, Oldham, Ashton).

Steam engine,_Nortonthorpe Mills, Scissett

Come the legal curtailment of the the working day in the Factory Acts of 1833 and 1844, whilst consistently violated by mill owners, eventually capital substituted machines for labour and intensified the work of those remaining (easier to do with steam than water). Though this new intensity often led to steam engines exploding! Resistance was inevitable and the targets were the steam engines (whose plugs were pulled releasing the water) and the coal mines. The resistance movement is usually remembered as that of the Chartists seeking representation (of men) in the Parliament. From 7 August 1842 increasing numbers marched through the mill towns pulling the plugs on steam engines (seemingly more damage than that was done to mills). There was little resistance.

The ability of strikers to maintain their action was, however, tempered by two factors: hunger and the intervention of the state. The army was deployed on 14 August in the mill towns enabling the mill owners to re-insert the plugs and restart their engines. Malm notes that some 15000 “[S]trike leaders and Chartist agitators were nabbed in batches” (p235). Perpetrators were imprisoned, some were transported (to foreign colonies); meanwhile, damaging or sabotaging coal mines was made a capital offence leading to the execution of textile workers.

Explaining why steam

Andreas Malm

Malm’s logic circuits are never opaque. When one finally reaches (p255) his analysis chapters, there are no great surprises. What is a surprise – though I have no idea why I am surprised – is the lengths that he goes to to eliminate independent variables as causes of steam/fossil over water as industry’s prime mover. It is clear already that Malm points the finger at capital’s control over labour. Malm, however, has to deal with the arguments from others such that coal was a means for humans to realise the natural inclination towards growth and overcoming a dependence on nature for life. He refers to this as the Rickardian-Malthusian explanation. Growth using fossil fuels was always latent, it just needed the right moment to flourish, goes the argument. He concludes that this is rather circular: “The shift to fossil fuels is explained by the impossibility of self-sustaining growth without them, the onset of self-sustaining growth by the shift to fossil fuels.” (p259) Step-by-step Malm takes away competing theories leaving one only: capital. At the heart of capital is ownership – property rights, rentierism. The crown privatised land and minerals below it in the 1570s – the so-called Elizabethen leap – leading to further enclosure of the commons. Granting of mineral rights lead to the commodification of coal.

Comparative advantage – globalisation of capital

Environmental Kuznets Curve

The Kuznets Curve (right) posits that as populations get richer, pollution – and greenhouse gas emissions – declines. Whilst the initial growth is dirty when incomes are low, the environment is cleaned up as incomes grow. Malm points out, however, that the Kuznets curve is only “true” if capital is static. The rising incomes are geographically specific. However, capital moves usually as Foreign Direct Investment. Generally it moves to where incomes are low (drawing on comparative advantage). An element of the comparative advantage, argues Malm, is carbon emissions. Firms relocate their dirtiest activities to countries with low incomes in order to externalise their emissions. Those emissions are then not counted against emissions for the firm’s host country or the consumer’s. Significantly, Malm writes: “In 2001, China entered the WTO, dismantled the remaining barriers to investment, abolished restrictions on foreign ownership, relaxed requirements on local cooperation and, in general, flung the gates wide open: then the real explosion began.” (p331). The western world externalised CO2 emissions to China in exchange for unimaginable growth in GDP. The Kuznets Curve is reversed. Rising incomes lead to fresh waves of capital mobility and more environmental degradation geographically dispersed.

Fossil fuels always win out against renewables

In 2006 Shell sold its solar subsidiary. By 2013 BP had exited the solar business, too. The margins were insignificant and the electrical energy generated were too cheap to make the necessary profits. For as long as oil had a market price, company boards look to focus on maximising earnings, not contributing to climate change mitigation – which is perhaps what the solar industry had become. Oil and coal still have healthy market prices for a number of reasons: when countries like China are looking to industrialise fast, they turn to coal to produce the electricity for the factories. Not to renewables. Coal and oil are commodities. They are tradable and they themselves have an exchange value in the chain or flow of production. They are commodity inputs that add value and require considerable capital deployed on which numerous other stakeholders benefit – from banks, pension funds and other industrialists. Moreover, the assets are long-lived. Coal-fired power stations coming on line now will produce electricity for 50 years or so; and for some of that time, they will produce electricity at high margins once the debt has been serviced.

Those with vested interests in fossil fuels do not necessarily deny human-induced climate change, rather they advocate a technical solution rather than a social and structural one. Bill Gates (right), notes Malm, is one of the biggest global investors in geoengineering research. He owns shares in a venture that seeks to put sulphates into the higher atmosphere to reflect away the sun and cool the planet. This technology has dramatic side-effects and has to be administered yearly. Sulphates “deplete the ozone layer, upset precipitation patterns, possibly shut down the Asian monsoon, disrupt photosynthetic productivity, whiten the sky, tinker with the balance between day and night as well as winter and summer, contribute to thousands of air pollution deaths per year…lower the efficiency of solar panels by diluting the sunlight”. (p387) Other geoengineering options include carbon capture and something to do with mirrors!

That leads to a further challenge – and it is the same problem that besets attempts at carbon mitigation; namely, global coordination. Humanity simply cannot do it. The current incumbent of the Whitehouse sees the world in zero-sum terms: winner takes all. No politician is willing or able to countenance the structural changes necessary to bring about the scale of change needed. I write this whilst in the middle of the Covid-19 pandemic shutdown in the UK. The UK Government was not even willing to join with EU member states to procure PPE for health service workers, let alone coordinate global climate mitigation. Indeed, the pandemic has shown us only too well how incapable the international community is to work for some kind of global good that does not confer advantage, and that facilitates a transfer of wealth from the rich to poorer, even if such a transfer is it own interests (rich countries, that is). Consumers, too, are complicit, especially those of us in those rich countries. Are we prepared to consume less, or are we, too, looking for the technological fix that enables business-as-usual? We seem to be prepared to wait and see what Bill Gates comes up with. There’s a 10-week course in there somewhere.


Greenock Cut: Dave souza

Quarry Bank Mill:  Mike Peel (

Apprentice House: Peter Fuller

Steam Engine: Chris Allen / Steam engine, Nortonthorpe Mills, Scissett

Andreas Malm:

Environmental Kuznets Curve: Kjeffreytaylor

Bill Gates: DFID – UK Department for International Development