The Planet of the Landlords

"Forty years ago, wealthy Americans financed the U.S. government mainly through their tax payments. Today wealthy Americans finance the government mainly by lending it money." -- Robert Reich

The wealthy have engineered a very cosy arrangement for themselves. Instead of giving their money away, they lend it to their governments - by buying bonds and securities - and so get paid interest instead of being taxed. Sociologists call it the Matthew Effect: the rich get richer and the poor get poorer. It comes from 'The parable of the talents" - an exhortation not to waste valuable capital. It seems that Jesus was an closet entrepreneur, as well as a social revolutionary.

But isn't it weird that the radical generation that grew up in the 60's wanting the change the world, now presides over a world where power and privilege is just as concentrated as it's ever been?

This week I watched Adam Curtis' excellent new documentary: All Watched Over by Machines of Loving Grace, which sets out to explore how the elite use their power in the information age. The task of explaining Why Things Are The Way Things Are is far too complicated and subjective to be explained in an hour long documentary, but Curtis' documentaries are like core samples, taking an issue - in this case the rise of individualism - and exploring its origins and ramifications.

This introduced the curious character of Ayn Rand, her Big Idea was the triumph of individualism, she believed that Man was stifled by government, and that altruism was a weakness that limited Man's ambitions. Her vision of society was a big Darwinian competition where the creatives, the innovators and the entrepreneurs would perform mighty deeds, reshaping the world through the sheer force of their Nietzschean will, unencumbered by the petty restrictions of bureaucrats and the sneering of critics. After all, who's ever built a statue to a critic?

This sounds a bit like the philosophy of Just Fucking Do It, which is especially popular amongst entrepreneurs, but Rand's message is more insidious - that the success of the elite is due to their own inner brilliance. We are just better than the masses, they say. We are Supermen. The Masters of the Universe.

When you start thinking like that, you have no social debt to repay. No one helped you get to the top. Altruism is just shackles. Why should you pay taxes to the lazy and the feckless?
You forget wealth comes from millions of pairs of hands. Not just your genius. But you jealously guard your riches. You stash them offshore. Government is just another mendicant, looking to shake you down. If they want your money, you'll expect a return. So you lend it to them.

In the late 90s, many Americans thought their Randian Übermensch-ness was responsible for the long boom of the New Economy. But the dirty little secret was that US productivity was flat. The wealth they thought they were creating was actually debt. Countries like China were doing the work, the Americans were borrowing to pay for it, and the Chinese and wealthy individuals were lending the money to them.

Not that this was China's fault, they were just trying to get a fair deal for their vast population's hard work. Chrystia Freeland recounts a CEO talking about the transformation of the world economy: "If it lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade”.

So whilst China created wealth, financiers created an elaborate Ponzi scheme of investment, and everybody got to feel good about the new economic miracle.

Of course, the values of investments can go down, as well as up. Fortunately for the wealthy, they wrote the rules of the game, and the selfishness of the rules would make Ayn Rand proud. The game is played like this:
  • The wealthy obtain access to cheap money
  • They use it to fuel a boom (property, shares)
  • They rake in the profits of the boom
  • The bubble eventually bursts
  • The wealthy evacuate their money
  • The bondholders are bailed out (in the name of preserving economic stability)
  • The debt gets loaded onto the citizens of the unfortunate countries, who are made poorer for years to come
  • The wealthy move on and find another mark(et)
It seems a financial crisis is only a crisis if you get stuck with the bill. Like the citizens of Ireland and Greece are currently discovering, the wealthy have already left the restaurant.

Yesterday, Gil Scott-Heron died. His classic poem "The Revolution Will Not Be Televised" was written 40 years ago, and captured the era's spirit of discontent. The children of that era are grown up now, and the world they fashioned is more tolerant, but also more selfish.

40 years ago, men were walking on the moon, put there by the combined effort of 400,000 people. Apollo's collective grand adventure is history, replaced by internet-empowered individuals steered by their own rational self-interest. Powered by technology, what each of us can achieve alone, with just one pair of hands, has never been greater. I hope we use that power constructively, to build - not exploit.

I'd rather live on a planet of artisans than a planet of landlords.

One Night in Dortmund

"And gentlemen in England now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
[of that night in Dortmund when we won the treble]"
-- Shakespeare, Henry V, Act 4

Hard to believe it was 10 years ago today.
Let me take you back to a humid spring night in Germany...

The 2001 UEFA Cup Final was the sort of game that defines the phrase "you had to be there". A sensational game of footy, in a magnificent stadium, in wonderfully friendly environment, with a glorious, historic result.

We arrived in Dortmund at 2pm, and took the train into town to find the Altemarkt, the old square where the fans' party was taking place. Unfortunately this coincided with a downpour of biblical proportions, the sort of storm that Rodgers and Hammerstein wrote songs about.

But perhaps this was a blessing in disguise. Dashing for cover we found a café, giving us the opportunity to sample the regional food and drink and mingle with some of the travelling Basque supporters: a very pleasant bunch who responded to Liverpool songs in good humour with chants of their own. In fact the atmosphere was so friendly that the two sets of supporters were soon swapping scarves, flags and shirts.

A few mobile phone calls later and some fellow fans we knew had been summoned to the venue. By then the downpour had stopped and the sun was shining. So we began walking south towards the stadium, stopping halfway at a local pub to soak up some more atmosphere (and liquid refreshment). Here the canon of Reds' songs was recited for the benefit of the locals present, I'm not sure how much they understood, but they cheered along with us all the same.

Then off the stadium itself, and the crowd swelled to the size that could sustain a rendition of 'Scouser Tommy'. One underpass was used to good effect, with a standing chant of 'Gérard, Gérard Houllier' continued by those entering it. Meanwhile the police kept a discreet presence, treating the fans as guests rather than cattle and contributing to the good-natured atmosphere. We laid to rest the ghost of Heysel in Dortmund.

Getting into the ground was the only point where our hosts' legendary efficiency broke down. There weren't enough stewards at the gates so the crowd built up faster than it could be admitted. But once inside we could appreciate the Westfalenstadion in all its glory.

The Westfalenstadion is a marvel. Four huge cantilever stands giving all 65000 seats unobstructed views. Superb acoustics and no running track meant songs from one stand easily reached the opposite end of the stadium, generating a superb enveloping atmosphere. As the teams ran out you could tell the stage was set for something memorable.

The pre-match huddle that epitomises the new Liverpool spirit was greeted with a deafening roar that set the tone for the night. The team responded, and from kickoff we went for the throat. 3 minutes later we're already in dreamland as Babbel nods Macca's perfect free kick home. Yes!

Playing as if we had a point to prove to the Cruyff family we continued to attack their nervous 3 man defence. The second goal was a beauty of quick passing, Hamann to Owen, perfect pass, Gerrard scores. Get in! Needless to say we're now going bananas, this start is beyond our wildest dreams.

Before the game Kev Howson predicted we Reds would give the Alavés supporters the respect they deserved, and he was right, instead of the jibes like "2-0 in your cup final", so beloved by the Mancs, we celebrated by singing the manager's praises. "Who let the Reds out?", "Are you Shankly in disguise?", "Gérard, Gérard Houllier..."

With the party atmosphere in full swing we began to start thinking of achieving the treble with a 4 or 5-nil scoreline. As did a few of our players it seemed, tackles were missed, men weren't closed down, and out of nothing a cross is headed into the goal below us. Bugger.

Come on you Reds! The inspirational mood returns and the team dominates the rest of the half. Hamann (again) plays in Owen who's tripped by the keeper as he rounds him. As clear a penalty as night follows day, 40000 voices chant "Off Off Off!", but ref only books him. Macca takes the kick, never ever doubt, 3-1. And the party atmosphere is back!

At half-time there was a guest appearance from Anfield announcer George encouraging us to keep the noise up. We did our best, but Alavés were even more fired up, back on the pitch 5 minutes before kickoff. And they started the half on fire, catching us completely cold. 1 minute in and Carra is torn to bits by the impressive Contra, deep cross - Moreno scores.
Oh bollocks.

We're still licking our mental wounds when the ref awards a series of debatable free-kicks. Moreno shoots low and we see the net at the far end bulging. We can't believe it, and the Alavés fans at that end go absolutely mental. 3-3. Oh shit.

For the next few minutes we Reds sat stunned and subdued. For all I know the Alavés supporters could have been singing "Shall we sing a song for you?" in Basque. Whatever, they were making all the noise now.

Probably feeling that the best form of defence is attack, Ged hauls off Henchoz and puts Vlad on. Given our defence is having a collective 'mare it's a huge gamble, but SuperSteve moves to right-back and the ship is steadied. And we Reds find our voices again.

The game is really open now, Heskey has had a few chances but hasn't taken them, so there's a huge cheer when we see God about to come on. His appearance whips the Reds support back into a fervour, and we begin to start playing like we did in the first half.

Then the best move of the night, a patient build up releases God into the box, he feints, runs on and places a shot inside the far post. And the ground explodes into a deafening din. No words, just cheering, hugs, yells at the clouds and fists in the air. Already a classic match, it's now become a footballing fairytale. Unbelievable.

Now the Alavés fans are stunned to near-silence, but we still don't look comfortable, so Ged replaces Owen with Berger. But Alavés keep on coming, their fans roar them on, and we're now hanging on. A striker breaks into our box and falls over, luckily the ref sees through that one and he's booked.

We breathe again. Come on Reds, let's not do an Arsenal.

A few minutes left, we're trying to sing YNWA but the Alavés pressure throttles it. Sander saves us twice but the price is a last minute corner. This time Sander is beaten to the ball and it's in. Since we've been standing urging the lads on to one last effort, it's almost a reflex reaction when we slump to our seats with our heads in our hands.

4-4. And it's Jordi bloody Cruyff. Oh fuck.

The elation that followed Robbie's masterstroke now wears off and notice I'm hoarse from shouting and my hands are aching from clapping. In fact I hurt all over, talk about your dreams being tossed and blown. I half expect Alavés to score a winner in injury time but it never comes.

Then an announcement comes over the tannoy: Golden Goal rule.

Sighs of agony, the realisation extra time will be torture to watch. But we channel our energies into motivating the team, and as extra time starts we've found our voices again. "Oh when the Reds..."

The chant almost chokes in our throats as Alavés run through us almost from the kickoff. We clear, then Berger almost does the same. By now the tension and noise are incredible, when we attack the Alavés support whistle for all they're worth, it's like hearing a jumbo jet take off. In return we respond to their attacks with roars.

But with Alavés a striker down we begin to dominate. Our back line is now just Sami and Jamie whilst Markus and Steve push forward. Death or glory!

It's end to end stuff, but too often we only had God up front. Time ticks away, but we're still urging our heroes on, with speech now painful our encouragement is more often in form of claps and roars.

Then a clever Vlad spin fools his marker, who's booked again and sent off. It's Karmona their captain and defensive rock, Alavés now have 9 men and there's 4 minutes left. There's a buzz of expectation as Sami jogs into the box, we're on our feet again, expecting a Macca free kick special onto SuperSami's forehead.

In it comes, and from 100 metres away we see the net bulging.

A split-second of disbelief and then absolute delirium breaks out. Joy magnified by relief multiplied by the glory of what we've achieved. Even that doesn't do the experience justice.

Soon after we saw on the replay it was an own goal, but we couldn't have cheered it any louder if it had been a bullet header from Robbie himself.

The celebrations involved pretty much every song we know, spine-tingling renditions of YNWA, praise for Houllier, the team, the club. It only stopped when our opponents went to collect their medals, when we joined their fans in singing "Alavés, Alavés, Alavés" as loud as we could. We wanted to make sure they knew how much we respected their achievement, it was a wonderful moment.

Then our turn, Robbie and Sami lift the cup, and we're in ecstasy. The team assembles in front of the North stand, YNWA starts on the tannoy and everybody, players, management and fans sing it together. You treasure memories like that forever.

We've just won the treble, 5-4, in a match they'll talk about for decades.

4th place for the Champions League?
In Dortmund I witnessed what glory really is.

Time to End Rotten Boroughs

William Hogarth's satire The Polling (1758), shows the few electors being 'encouraged'
In the classic Blackadder the Third episode "Dish and Dishonesty" foppish Prince George faces ruin if parliament votes to cut his income. But the government's majority is 1, so if he can just win a crucial vacant seat, his income will be safe. Fortunately, the crucial seat of Dunny-on-the-Wold is a rotten borough - it has a single voter. Win over that voter, and the government will be foiled.

It sounds farcical, but until rotten boroughs were abolished in 1832, that was how the system worked. A few people, wielding a disproportionally huge amount of influence. It made no sense, but up until the 1830s, it suited the establishment of the time.

Then in 1832, rotten boroughs were replaced, and in their place came Safe Seats.

Safe seats give an illusion of democracy, an election occurs, leaflets are published, hustings are organised - but just like the rotten boroughs of yore, the result is never in doubt. In the 2010 general election, the predictability of safe seats meant that of the 650 seats contested, only votes cast in about 100 key seats really mattered. According to the Institute for Public Policy Research, the decisive seats were determined by just over 460,000 voters, 1.6% of the electorate.

OK, we've moved on a bit from the era of the rotten borough. Now instead of a handful of rich landowners holding the balance of power, it's the selection committees in 100 seats, who choose the candidates to go before the 1.6% of our fellow citizens, who by accidents of social geography happen to cast the decisive votes.

Why? Because just like in the 1830s, the system works this way because it suits those in power.

But on May 5th, you have a once in a lifetime opportunity to change this system.
By voting in the electoral reform referendum. And saying YES.

The referendum offers us a choice, to change to a more proportional system called Alternative Vote (AV), or keep the current system, First Past The Post (FPTP).

Choosing AV would mean that instead of targeting the 100 'battleground' seats, the political parties will be forced to come up with better thought-out, more inclusive policies - ones that will appeal not just to their traditional supporters, but also to supporters of other parties, whose 2nd and 3rd preferences may prove crucial. AV means no more wasted votes - everyone's vote will count.

Or we could stick with the idealogical headcount encouraged by FPTP, which forces everyone to decide which tribe they want to belong to every 5 years. In many parts of the country, only one party has EVER been elected. But is that really democracy? No wonder so many of us are disenchanted with politics. Disagree, and depending on where you live, your voice just won't be heard.

In FPTP, the minority can govern the majority (look back over the last 30 years).
But in AV, because of the 50% rule, it will be the majority that governs the minority.

It's time to finally get rid of rotten boroughs, and replace them with something fairer.
Vote YES to AV.

10 reasons why I didn't create Facebook

The Social Network movie tells a striking story: how a 19-year old student wrote some software, founded a company, and changed the world. But why was it that Mark Zuckerberg was the one to create it, and not you or me?

It's an interesting question. You might dismissively answer that Zuck just "got lucky" - but in doing so you'd be missing the opportunity to understand what makes a successful entrepreneur. In fact, a psychologist might say that those choosing to believe "he got lucky" are actually just trying to protect their own egos, to avoid acknowledging their own limitations. Namely that a 19-year old with few formal qualifications was not just more technically-savvy than the millions of us who call ourselves technologists, but also more business-savvy than the millions who consider themselves businessmen.

So why didn't you, or I, with all our educational advantages and years of professional experience create Facebook? Here's 10 reasons to ponder:

1 We weren't hungry enough

By the time Zuck sat down to write Facebook in 2004, I was already a start-up veteran. I'd been the fifth employee in a pioneering London dotcom, helping to build and run the company's services platform. But I became worn out, and by 2003 I'd left to go travelling for 5 months, which proved to be an awesome adventure - so much so that when I returned to work, my plan was simply to earn enough go travelling again. At this point in my life, I didn't want to change the world, I wanted to see the world.

2 We weren't itchy enough

Most successful ventures start because their founders have an itch they need to scratch, before realising that other folks also have the same problem, and there might be a business in providing a solution. For Zuck, the itch was how to connect with fellow students better (and a Napsteresque desire to share news and music throughout a dorm). Once he realised there was a demand for an online version of the paper 'face books' his college printed, he went ahead and built one. What's bothering you today?

3 We weren't visionary enough 

Almost everyone's first online experience is having a conversation. Networks are inherently social, that's obvious, we use them to talk to others. Nevertheless, it wasn't until Facebook arrived in the UK that I started to understand Social Networking, and its distinguishing feature: on the internet you can talk to anybody, but on a social network it's just your friends. As a consequence, the services you build upon a social network are specialised: to share the stuff that binds you together. If I'd asked you in 2004 to draw the internet in 2010, would it have looked anything like this?

4 We weren't courageous enough

There are two ways to work in a startup: found one yourself, or join the team at an existing venture. For the past decade, I've done the latter; eschewing the harder, riskier and more stressful path of the founder, for the slightly less stressful role of senior techie. You have to be very driven to consider swapping the security and rewards of a job you've worked so hard to achieve for the uncertainty of founding something new, which might not even work.

5 We weren't connected enough

In our hubris, it's easy to over-estimate what we can achieve on our own. But eventually life teaches us that who you know is indeed just as important as what you know. What's a better investment? Spending 1000 hours reading everything about this year's hottest new technologies, or spending 1000 hours attracting an awesomely-connected mentor like Sean Parker? These days being connected doesn't mean you have WiFi, it means you have access to the kind of influential people who can help you change your world.

6 We weren't located well enough

What have Apple, HP, Oracle, Sun, Yahoo, Google, Facebook and Twitter all have in common? They all grew up in the same small corner of California. (And here's the reasons why). Such is the area's cachet, even the 6 month old Facebook moved from Boston (no high-tech wilderness) to Palo Alto, to be better connected. I suppose I could have moved there too, but chose to stay near my friends in London, where the startup and VC community is smaller and much less vibrant.

7 We weren't skilled enough

Or perhaps more accurately: we lack the right balance of skills. You might be an expert at designing and implementing software, but how much do you know about incorporating a company, or contract law, or tax allowances, or sales and marketing? I came away from university knowing all about how computer systems work - from low-level memory registers right up to complex artificial intelligence applications, but next to nothing about how to build up businesses. Then in the years subsequently, I kept on deepening my technical knowledge. Perhaps the moral here is avoid specialising too deeply, and instead look to broaden your horizons, and become a creative generalist instead.

8 We weren't adventurous enough

Being an entrepreneur is more difficult than being an explorer, because there is no map to guide you, and the blank spaces aren't visible until you stumble across them. Say, in 2005, you were inspired to follow in the footsteps of Facebook - would you attempt to compete for the same niche or try to pioneer something new? Would you have spotted the possibilities of a brand new niche for a real-time web-scale bridging network? Twitter found that one. As Steve Blank says: companies execute business models, startups search for new ones. There's always another blank space to find, if you're adventurous enough.

9 We weren't determined enough

There is a passion in creative artists that makes them strive to create new works, because creating things is their calling. As Paul Graham says "the most important predictor of success is determination". But I have been content to earn rather than yearn, deploying my skills to further others' projects, and being well paid for doing so. This is just how the world works, the determined few hire the talented many to make their visions happen. Are you sitting comfortably?

10 We weren't motivated enough

A quick straw poll of friends reveals virtually everyone has their own pet idea or hobby project, but few are actively considering turning it into a business. So those ideas will be left to marinate inside their heads, until someone more driven comes up with the same idea, and goes that bit further: filling in the company paperwork and putting in the late nights. Ever noticed there's a lot more late night hacking in 'The Social Network' movie than soliloquies? The real pioneers just do it.

So the reason why I didn't create Facebook has little to do with personal characteristics, otherwise I might as well have written an article called "10 reasons why Usain Bolt runs faster than me". Instead, the reason neither of us created Facebook is a result of where we've come from, our attitudes, and - crucially - the life decisions we've made along the way. Most people, me included, tend to choose the comfortable path. Perhaps that's why our culture respects entrepreneurs highly, because in our comfy, cosseted modern life, they're amongst the rare few willing to leave their comfort zones to actively seek out new struggles.

So whilst the opportunity to build Facebook is past, new opportunities still lurk undiscovered in the blank spaces, awaiting the determined and the adventurous. Perhaps you already have all the skills you need, perhaps you don't need any.

And that's why I didn't create Facebook. What about you?
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