All posts for the month June, 2012

This i-Squared event is also a Google+ debate on the Balotelli quote “Football has been too tolerant of racism“.

I’m going to disagree. It’s not racism, it’s culturally engrained “otherism”. The lack of respect engendered by seeing the rest of your world as other. Rival football fans are simply an ideal place to see the underlying issue at work – after all being on opposing sides is the point of it.

As a football fan (or a “supporter” on any side of any debate or argument – more to the point) it is apparently expected that as well as supporting your own case you will rubbish the opposing case by rubbishing the opposition. I regularly get laughed at when, as a supporter of my team, that unless it’s actually witty or relevant I cannot ever condone insulting and abusing the opposing fans, players and staff, or labelled a tone-troll if I point out such behaviour in a more academic debate. In something as trivial as a sport (ie more important than life and death remember), particularly a “man in the street” sport like football, it is pretty well accepted that it’s normal behaviour to rubbish the opposition based on what’s different about them – norf vs sarf London, yid vs gentile, east or west end of the M4, city vs sheep-shagger, south vs north, east or west of the Pennines, Manc vs Scouse, catholic vs protestant, one side or the other of the the tracks or Stanley Park or the Manchester ship canal, whatever.

Good natured banter is one thing, even “offensive” humour if it’s witty and accompanied by self-evident underlying love and respect, but direct personal abuse and attacks on the “others” based on their otherness should be a no no. The colour or race of an opposing player is just another “handle” for the accepted attack, and of course when the teams are from different countries so many more historical, cultural, ethnic, geographical differences to pick-on. Don’t get me started on “gyppos” … and for chrissakes don’t mention the war, any war, you choose.

If this was just a problem with the uncouth, uneducated “man in the street” and just with “race” that would be one thing. But even educated would-be intellectuals seem to have fallen hook, line and sinker for the “attack” side of any argument. It’s critical thinking, it’s scientific, after all – scientistic anyway. Us vs the bankers, the government, the capitalist, the tax man, … the tax avoider. So many current debates – the Lords Spiritual, you name it. Me vs whatever makes you different from my moral high ground. Objective otherness stinks anywhere and everywhere – (except inside empirical science). Who let the dogs out?

Huh ? Isn’t that what banks do ? Surely the Libor is an “offered” rate – surely the point is to negotiate around your strengths and weaknesses. I can see why people might be jealous of their success, and shocked by their risk-taking with hindsight, but what have they actually done wrong ? Broken some regulation no doubt. (Adds interest to Niall Ferguson’s “Rule of Law and its Enemies” – one of the enemies is dumb regulations. Comment below.)

[Post Notes :

OK – so where are the real issues.

(1) The problem was with Barclays Capital (as was) which was only ever loosely affiliated with Barclays as an operation. Had it’s own investment banking culture separate from retail. Diamond had already taken steps to get a grip – get one culture under one brand. (NB the “problem” is old 2008/9? and not news. The only news is Barclays being the first of the banks to have their fine announced, they are not the only investment bank involved.)

(2) The setting of Libor itself depends on returns of capital costs from banks to the central regulator – which I have to say sounds mad in the first place – a circular chicken and egg. Anyway, so even being conscientious, this is presumably a calculation for the bank – many transactions, many rates, many things to take into account. Even being prudent some judgement about which things to take into account, to err on which side is prudent and good business, incentives, etc? So to “lie” is a tough call when “reporting” – all reporting is a negotiation in my experience. In terms of who benefits / suffers my understanding is that the process of under-reporting costs generally kept rates lower and maintained confidence in stability ? (Not to be undervalued given the state of banking at the time.)

(3) Collusion between competing banks in establishing the numbers to report. Much more serious competitive anti-trust issue, though again it seems the incentives were the other way as far as costs to customers are concerned – opposite of monopolistic / cartel issues behind such rules – tricky one. The key thing here is who, how long, who knew, who sanctioned it. Culture. (The same “Murdoch” scenario.)

(4) The unprofessional tone of communications as rates were “successfully” negotiated. (Not actually seen emails, just a couple of apparent quotes so far – I’m researching that.) Black humour in coded language between workers at the work face, at the expense of the “clients” is perfectly normal, even in “caring”  industries like teaching and health-care or any “support” services, so in a cut-throat financial risk-taking environment, it must be deadly I would imagine.

The real issue is 3 above, and whether the culture and incentives were right for the operation. Major problem is the regulators being so slow to act. Clearly with the banking system in crisis, poachers and gamekeepers both had incentives to be cautious in public. But this “news” is long after the events and long after changes are in motion to fix things, and long after recognition for further overhaul of regulation. Diamond seems like the last person you’d want to lose from the process right now (3 excepted).

PS The “Light Touch” meme is so misleading. The touch should be firm sure, the action decisive, but it should not be intrusive into the whole process. Simple but firm. We need good regulation, not more regulation. And what is good … continues …]

Financial markets, their regulation and the politics around them are so complex, that changes of regulatory input produce practically indeterminate, unpredictable outcomes. The most complex system of systems that humans have ever engineered. More misguided regulation can make the system more fragile, not less. Less is in fact more. More local failures – bonfires – should be allowed to take their natural course, than fixes that increase the risk of a wider system failure – a conflagration or forest fire. Remember Darwin got his original “survival of the better suited” model from economics – Malthus.

Experience and prudence at the (local) operational management level are more valuable than (wider) externally imposed rules. And experience means history – knowing, understanding and learning from history. History understood on both conservative and revolutionary “occupy wallstreet” /”anti-capitalist” sides of any debate.

Enforcement of law (regulation) remains key, but with simpler clearer (moral principal) rules rather than many fine detailed regulations, it is much easier to punish transgressors “pour encourager les autres”. The rule of law rather than the “rule of lawyers”.

Niall Ferguson’s 2nd BBC R4 Reith Lecture “The Rule of Law and its Enemies – #2 The Darwinian Economy” from the New York Historical Society.

[And Post Note : George Monbiot tweets his complaint at the “idiots” responding to his latest post-Rio piece. No time for detailed review and comment this time – but it’s the same argument. It’s a predictably failed attempt at too much big governance of the most complex system – humans and the ecosphere. Local application of “values” much more likely to work – but that’s real values based on historical knowledge, not just individual interpretation of scientific claims and myths. Better to understand why Rio failed, than simply blame and criticise “everyone” for its failure George.

I’m guessing these are the 516 (at the last count) idiots George is referring to ?

“The world has grown weary of the environmentalists, their sick destructive political agenda and their frankly ridiculous hysteria.”

Though you’d have to agree George’s own tone is so melodramatic and OTT. If ever a debate needed some reasonable wisdom injected into it. A pox on both their houses.]

Edmund Burke’s words quoted by Niall Ferguson in the first of his 2012 Reith LecturesThe Rule of Law and its Enemies – #1 The Human Hive“.

Glorious vs inglorious revolutions in the light of the Arab Spring. Revolution against “extractive” rule, but for what ? Representative democracies that allow the current generation to vote for its own needs, at the expense of the needs of multi-generational institutions, are doomed to degenerate. Long-lived institutions, and the laws that enforce them, have credibility in terms of liability for debt, unlike easy-come, easy-go elected governments – which represent a positively reinforced death spiral.

The eminent economic historian Professor Niall Ferguson argues that institutions determine the success or failure of nations. In a lecture delivered at the London School of Economics and Political Science, he says that a society governed by abstract, impersonal rules will become richer than one ruled by personal relationships. The rule of law is crucial to the creation of a modern economy and its early adoption is the reason why Western nations grew so powerful in the modern age.

But are the institutions of the West now degenerating? Professor Ferguson asks whether the democratic system has a fatal flaw at its heart. In the West young people are confronting the fact that they must live with the huge financial debt generated by their parents, something they had no control over despite the fact that they were born into a democracy. Is there a way of restoring the compact between different generations?

The problem is with the complexity, dysfunctionality, opacity and even fraudulence of economic governance and regulation – not the existence of such institutions. Historically these are the source of sustainable growth and the evolution of wealth – ie it’s not individual entrepreneurism per se, but the institutions that support their functioning. Sustainability involves true valuation of sovereign assets as well as true liability beyond accounting debts, including environmental and natural resources. Populations confuse real grievances with symptoms for underlying problems and causes, and consequently left / liberal groups are exploited to misguided ends. It’s just not cool to be conservative. Who knew the Tea Party was right ? (Funny, I made this comment before, about the superiority of conservative values. And here, Daniel Kahneman pointing out that individual freedom of choice needs the guidance of conservative governance.)

Need to listen to the remaining 3 of 4.

Good to hear James Purefoy in the role of Bob / Phaedrus in Peter Flannery’s dramatisation of Robert Pirsig‘s Zen and the Art of Motorcycle Maintenance on BBC Radio4’s Saturday Drama. It’s there to listen again in BBC Radio4 iPlayer’s “Most Popular” . [Only available until next Saturday 30th June 2012.]

The characterizations, tone and atmosphere were dead right, and despite the need for selective editing to fit the 90 minute format, all the main aspects of the narrative, the back-stories and the underlying chautauqua on quality and mental illness came through. Many original scenes re-ordered and combined, and some dialogue recalled in the mouths of others, to get all the ideas and the marquee quotes in, without losing the context or intent, and still maintaining the overall sequence of the journey. An excellent production.

Not a fan of Louise Mensch, and I doubt her microblogging venture will rival Twitter, but she’s right.

No useful discussion ever made progress without on-topic content moderation (or more than 40 words). And good moderation is a time consuming skill. What was it Einstein said about editors?

Oh, and the new site name “” is not a pun on her name -yeah, right.