Real Time Club, 23 November 2010
This event garnered a significantly higher than average attendance, just squeezing into the National Liberal Club room we had. Higher attendance meant more demanding acoustics and our guest of honour did her very best to speak without a proper sound system for such a number. That said, she rose above the obstacles to set out some excellent arguments and lead a vibrant debate with the audience. Continue reading
I was intrigued with a thought about “when did CO2 atmospheric concentrations actually become directly harmful”, i.e. we’d really really have to do something about it as human beings.
From here – http://www.uigi.com/MSDS_liquid_CO2.html:
“Carbon Dioxide is a powerful cerebral dilator. At concentrations between 2 and 10%, Carbon Dioxide can cause nausea, dizziness, headache, mental confusion, increased blood pressure and respiratory rate. Above 8% nausea and vomiting appear. Above 10%, suffocation and death can occur within minutes.”
Let’s assume then that 2% is unacceptable. Our current concentration on 1 April 2010 is 391 ppm. From the Mauna Loa record – http://www.esrl.noaa.gov/gmd/ccgg/trends/ – we can see that over 50 years the average growth rate is 1.43ppm/year. One notices that recent rates are higher, i.e. the average of the past 10 years is 1.98ppm/year. I’ll just take 2ppm/year.
Thus we need to estimate when we hit 20,000ppm. That’s 10,000 years hence, i.e. 12,010 AD.
We could halve that probably, i.e. 6,005, as I’d reckon we’d definitely notice 1%. So CO2 is a long way off killing us, except it’s likely to destroy us in fifty years if we do nothing. That’s the long and the short of it.
[I can’t afford to pay, but you can afford to look at the black humour side of this here – https://www.cartoonstock.com/directory/c/carbon_monoxide_poisoning.asp]
On 15 June 2010, the Real Time Club evening’s proposition for discussion was that new technology will move beyond a facsimile of current exchange to new means of exchange that are better for society as a whole. Future e-money synthetic currencies for speculative fiction writers shouldn’t be, “that will be ten galactic credits, thank you”, but rather, “you owe me a return trip to Uranus and a kilogram of platinum for delivery in 12 months”. Well, that’s what our payments autodroid bots (i.e., mobile phones) will agree amongst themselves. Dave sets out his stall: “When you digitise something, you have the opportunity to re-engineer it. So it is with money. As money has changed from barter to bullion, from paper to PayPal, it has changed the markets and societies that depend on it. Where next?
The Eternal Coin
Dave Birch opened in front of about 40 members with a reminder that Hayek always believed that money was too important to be left to governments. Dave argued that we ideally needed many units of account for many things but that multiple currencies increased the cost of transactions markedly – how could the cash register be large enough. He pointed out though that in border areas people seemed able to handle concepts of multiple currencies easily. This led to a quick reminder of the many new currencies emerging online, e.g. QQ in China, but Dave emphasised the crucial role of the mobile phone, e.g. M-Pesa in Africa. Finally, Dave touched on new currencies related more closely to real value, e.g. based on commodities, such as people in Norway using future kwHs of electricity as currency.
The core of the argument was that:
1 – we have reached a time of great change in the nature or money
2 – the mobile phone is the most important technological part of the change
3 – some of the nascent currencies will transform our view of money
Dave concluded by musing on what these changes might mean for definitions of communities and community values across space rather than being confined by geography.
Malcolm Cooper opened his reply by asserting that the mobile phone is a transient technology, witness the iPad. He believed that Dave confused the communications device with the technology. Malcolm, drawing from some of the themes in his book, “In Search of the Eternal Coin: A Long Finance View of History”, felt the aberration over history was currency. The norm is trading and storing value in a multiplicity of ways. As an example Malcolm pointed to the extent of the Carthaginian trading empire and its relatively low use of coinage.
The discussion was, as ever with the Real Time Club, quite vibrant and funny. Some comments and ripostes included:
The evening closed with a poem, “Liquidity”, composed on the night and read by long-standing member Andy Low:
The lake of commerce gives life its pace,
For on its smooth and shiny face,
Ripples form, surge forth and race.
(What do I want, what can I get)
They cross, connect and intersect.
The lives of people who’ve never met.
About the speakers
Dave Birch is a Director of Consult Hyperion, the IT management consultancy that specialises in electronic transactions. Here he provides specialist consultancy support to clients around the world, including all of the leading payment brands, major telecommunications providers, governments bodies and international organisations including the OECD. Before helping to found Consult Hyperion in 1986, he spent several years working as a consultant in Europe, the Far East and North America. He graduated from the University of Southampton with a BSc (Hons) in Physics.
Described by The Telegraph as “one of the world’s leading experts on digital money”, by The Independent as a “grade-A geek”, by the Centre for the Study of Financial Innovation as “one of the most user-friendly of the UK’s uber-techies” and by Financial World as “mad”, Dave is a member of the editorial board of the E-Finance & Payments Law and Policy Journal, a columnist for SPEED and well-known for his blogs on Digital Money and Digital Identity. He has lectured to MBA level on the impact of new information and communications technologies, contributed to publications ranging from the Parliamentary IT Review to Prospect and wrote a Guardian column for many years. He is a media commentator on electronic business issues and has appeared on BBC television and radio, Sky and other channels around the world. For much more, see www.dgwbirch.com
Dr Malcolm Cooper holds a First Class Bachelor of Arts in History from Dalhousie University, a Master of Arts in History from the University of Western Ontario, and a Doctorate of Philosophy in Modern History from Oxford University. His thesis on the formation of the Royal Air Force was subsequently developed into a book, The Birth of Independent Air Power, and published in 1986. His career has included a Research Fellowship at Downing College, Cambridge, management of the research programme of the Institute of Chartered Accountants in England and Wales, equity research management with three different investment banks (none of which, alas, exist today under their original name), and a five year spell as Head of Research for the City of London Corporation. His most recent post was as Head of research for the independent public policy think tank Centre for Cities.
Malcolm was the first foreigner to take up coverage of the Istanbul and Athens stock markets and spent most of his investment banking career in European emerging markets, his last post being as Head of EMEA Equity Research for ABN-AMRO (a job he gave up in 2000 – not because he could see the dot.com crash coming, but because he decided he really didn’t want to be on the Central Line at 6.30 in the morning any more). Most of his recent work has been in the UK public policy field but be retains an active interest in the more challenging parts of the world, and is still inordinately proud of having a letter published in The Times pointing out some of the more obvious problems with the UK’s current military commitments in Afghanistan. He has also published several pieces on Turkey, including an article in International Affairs, a written submission to the Commons Select Committee and a contribution to a Chatham House forecast of likely regional scenarios following the second Iraq war.
Real TIme Club at the National Liberal Club, Wednesday, 12 May 2010
Some 60 guests assembled to hear Professor John Stein of Oxford, the eminent physiologist, help members of the Real Time Club better understand the weaknesses of the brain/mind to hardware/software analogy. Continue reading
SIR – I read your leader on financial companies that are “too big to fail”, and your statement that “on the left, some want banks cut down to size” (“In praise of Doddery”, March 20th). Many on the left would be surprised, then, to find themselves thinking along the same lines as Adam Smith. In “The Wealth of Nations”, he called for free competition: “By dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things, must sometimes happen, becomes of less consequence to the public. This competition, too, obliges all bankers to be more liberal in their dealings with their customers, lest their rivals should carry them away.”
Controlling size in any industry is neither left nor right, but appropriate. Too big to fail is too big to manage as well as too big to regulate, as recent events have demonstrated all too clearly.
Professor Michael Mainelli
Executive Chairman
Z/Yen Group
London
3 April 2010 – https://www.economist.com/letters/2010/03/31/on-banks-thailand-pornographic-imagery-jerusalem-manchester-health-care
On 19 January 2010, the Real Time Club met at its normal venue, The National Liberal Club, with me as the Chairman. The theme of the evening was “Dude – Where is my Identity”. Some 55 Members and Guests were in attendance. Continue reading
Gresham College – A Short, Personal, Alternative History
Professor Michael Mainelli, Gresham Fellow & Trustee
[October 2009 – originally written for the Mercers’ Company]
Sir Thomas Gresham (1519-1579) traded cloth and linens between England and the Low Countries at a time when Cambridge and Oxford had a duopolistic hold on higher education in England. A Cambridge man himself (Caius College), if Gresham’s skippers had visited an Oxbridge College they would have, at best, had the door of a college opened to them and then been laughed at in Latin for their ignorance before being closed in their face.
If you’re going to backstab some one properly, do it from the front. Gresham did so with money. Sir Thomas died of apoplexy in 1579 bequeathing one moiety to the Corporation of London and the other moiety to the Mercers’ Company, charging them with the nomination of seven Professors to lecture in Astronomy, Divinity, Geometry, Law, Music, Physic and Rhetoric. He required the lectures to be in Latin and, horror horribilis, English. In effect, Sir Thomas, who pursued monopolies himself, used his will of 1575 anti-monopolistically to crack the Oxbridge oligopoly by bribing seven professors to give lectures to the public, in English.
Gresham College is about ‘new learning’. Sir Thomas felt strongly that the ‘new learning’ should be available to those who worked – merchants, tradesmen and ships’ navigators – rather than solely gentlemen scholars. In the 17th century, the Royal Society was founded to explore “natural philosophy”, new learning through experimentation. So, it is no surprise that the Royal Society was founded and housed at Gresham College for half a century (1660 to 1710) and numbered among its associates Gresham Professors Petty, Boyle, and Evelyn.
For over 400 years the Gresham Professors have given free public lectures in the City of London. I had the privilege of four years (2005-2009) in the modern, eighth chair as Mercers’ School Memorial Professor of Commerce from 2005 to 2009. There are some deep footsteps in which we tread. Early professors at Gresham College included Christopher Wren and Robert Hooke, also integral to the Royal Society. Recent professors include the mathematical physicist Sir Roger Penrose of Penrose/Hawkings fame and the theoretical physicist John Barrow, who won the Templeton Prize and the Royal Society’s Michael Faraday Prize.
Professorships are awarded for three years with a stipend for six lectures a year, though professors often give more. Each professor develops his or her own programme. Academic professors complain that what seems like a sinecure is actually a very demanding post requiring novel, innovative, researched lectures of six to eight thousand words suitable for a global audience. Business professors, such as I, definitely find it is work. My estimate is that each lecture takes approximately 100 hours of preparation, thus 600 hours at about £10/hour – you’re not doing it for the money. In fact, at that rate you should question whether you’re competent to be a professor of commerce.
As my tenure was extended for a year and I had ‘been volunteered’ each year for an additional lecture in the Docklands, I gave 28 lectures. As a glutton for work, I gave a final synthesis lecture as part of the City of London Festival’s celebration of the 2,000 anniversary of the publication of Ovid’s Metamorphoses with saxophonist John Harle and friend Bill Joseph, “Metamorphoses: The Terrible Beauty of Change“, for 29 formal lectures in four years. The core 28 lectures, around 8,000 words per lecture, 56,000 words per year, some 224,000 words, found their way into the obligatory book – The Price of Fish: A New Approach To Wicked Economics And Better Decisions. Fortunately for readers, only 100,000 found their way out to the printer.
Given 48 professorial lectures a year, along with honorary professors, former professors, fellows and numerous guest lecturers, Gresham College provides around 140 intellectual events a year for business people, retired people, mature students, university students, schools and the general public. Each year over 20,000 people physically attend Gresham College’s 140 lectures. In an age concerned with making money from intellectual property, Gresham College encourages the free exchange of ideas and is one of the most potent intellectual houses on the net and podcasts. To quote Jefferson, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me”. The Gresham community worldwide downloads lectures over a million times each year from a library of now thousands of recorded lectures, many of which find their way into syllabi from the USA to China. My strapline for Gresham College today is, “Gresham College: The Modern Tudor Open University”, a “Tudor TED” even.
At Gresham College, we seek to reinterpret the ‘new learning’ of Sir Thomas’s time in contemporary terms. Our emphasis is on sharing knowledge, exchanging ideas, fusing old views and generating new insights. Gresham College is increasingly important for those living and working in London as the traditional universities and colleges focus on qualifications and are less able to offer the extra-mural activities they once did. We have no conscripts: we have a community of people who come because they want to, because they find the lectures and seminars topical, informative and enjoyable. Gresham College is about personal, higher education from dipping into one lecture to completing a series. I often lord over my academic friends that our current Registrar continues a long tradition of Registrary excellence – in over 400 years no registrar has admitted a single student.
Yes, I am a Gresham Groupie. I found the four years at Gresham College extremely rewarding and remain a Trustee and Fellow, and my firm continues to work on Long Finance and the London Accord with Gresham College. Sir Thomas Gresham is synonymous with Gresham’s Law, best expressed as “good money drives out bad”. I often think that the best people in the world come to work in one of the best cities in the world because Gresham College has a part in helping good discussion drive out bad. Our 16th century Open University is going strong in the 21st.
[I continued to give talks and run symposia to the point that I ultimately became involved in over 120 events.]
To view all Michael’s Gresham lectures.
Securities & Investment Institute
Annual Debate
Mansion House, London
Wednesday, 14 January 2009
“In this current financial environment, more financial regulation is a major part of the solution”
For the motion:
Dr Vince Cable MP
Mr Alan Yarrow FSI
Against the motion:
Professor Michael Mainelli FSI
Mr David Bennett FSI
Chairman – My Lord Mayor, Ladies and Gentlemen.
Chairman:
Mr Christopher Jones-Warner FSI
[An edited version of this article first appeared as “How To Learn…Chinese…In An Afternoon”, Professor Michael Mainelli ( 麦(mài)迈(mài)克(kè)), The Linguist, Volume 47, Number 3, page 20, Chartered Institute Of Linguists (June/July 2008)]
Continue readingMy Lord, Ladies and Gentlemen. It is a real honour for me to have this opportunity to address a group of people who share my passion that standards markets can improve the world, this Association of British Certification Bodies. This is a personal address, not speaking as a non-executive director of UKAS, though I realise that probably had a bearing on inviting me here. My remarks to follow are not meant in any way as UKAS policy.
Yet non-executive directorships are not filled for money – the risks are high, the time commitments always exceed the estimates and the thanks are low – nor are directorships filled with love. If seeking a non-executive directorship is the first sign of madness; the second sign is probably taking one. In return, we non-executive directors can be your worst nightmare. In my case it’s because I have a passion for world trade and sustainable economies that I would like share with you.
To start with, I’d like to explore standards themselves. Standards are funny things. Because of my accent, I’m going to start with pronunciation standards. Because the name of the International Organization for Standardization (ISO) would have different abbreviations in different languages (IOS in English, OIN in French), back in the 1940’s it was decided to use a language-independent word derived from the Greek, isos, meaning “equal”. Therefore, the short form of the Organization’s name is always ISO – “I-S-O” – and ISO follows the “z” spelling as in “organization” and “standardization”. Is that clear? ISO’s recommendation on their website is to pronounce their name whichever way comes most naturally. “So, you can pronounce it “EZO”, “EYE-ZOH” or “EYE-ESS-OH”, we don’t have any problem with that.” What a great credential for flexible standards!
And then we have date standards – oh no, I’m not talking about the US month first versus the UK day first, or even the Chinese year first. For 38 years ISO has designated World Standards Day to recognize the thousands of experts worldwide who collaboratively develop voluntary international standards that facilitate trade, spread knowledge and share technological advances. ISO officially began to function on 23 February 1947, but 14 October was chosen as World Standards Day because on 14 October 1946 delegates from 25 countries met in London and decided to found ISO. Of course, in the spirit of standards, in 2006 India, Ghana and others celebrated World Standards Day on 13 October while Nigeria celebrated from 12 to 14 October. In 2007 the European Commission held its World Standards Day conference on 17 October, while the United States celebrated World Standards Day on 18 October. Need I say more?
The truth is that the world is a messy place. Moreover, it’s human nature to resist standards, or at least male nature. A friend of mine, Paul, is raising three boys on his own. When I asked him how he kept the house clean he explained, “Michael, men don’t have standards, women do. Men have thresholds.”
The objective of standards is to help the evolution from complete mess to complete order by putting things in boxes at the right time. Managing evolution isn’t easy. Sometimes we try to box things in too early. Other times we’re so late we just add cost and unnecessary complexity to existing commodities. But done right – ahh, there we add a lot of value to consumers, to business and to society. I recently conducted a large study with PricewaterhouseCoopers and the World Economic Forum looking at solving global risks, “Collaborate or Collapse”. We concluded that society solved global risks using four collaborative approaches – sharing knowledge, implementing policies, markets and, yes, standards.
Sometimes I wish we could have a better sense of humour about it all. I’d like us to avoid going down the path of political correctness and keep our largely scientific and engineering outlook on life and its problems. Sadly, certification and standard jokes are rarer than one might like. Perhaps we should have a comedy kite-mark. Fortunately, the only after-dinner/lunch joke on standards I know doesn’t concern an ABCB member. It is about certification taken to extremes over wine.
Two oenologists are trying to outdo each other on their exacting standards. They both grab a tasting glass of red wine from the examination table in front of them. Inhaling deeply, the first wine expert remarks that “this wine is an outstanding Bordeaux”. The second interjects, “particularly when you recognise the difficulties inherent in raising vines of character in Côtes de Bordeaux-Saint-Macaire”. “Indeed”, says the first, “and as this wine is from Saint-Macaire, the terroir in that area most suited to this interpretation of the Malbec grape is, I’d suspect, Château Malromé”. “Ahhh”, counters the second, “self-evidently Château Malromé, but clearly the south-facing side, near the old well.” “Elementary really”, replies the first oenologist, “and probably the fifth row, slightly higher up the hill”. “Mais bien-sur”, adds the second oenologist gaining the upper hand by saying, “though I’d say a late summer picking from the eighth vine in the row and, dare I add, probably by picked by Pierre.” “Well”, says the first, now delivering what he believes to be the fatal blow, “of course I detected Pierre’s hand on the grapes, after a cool morning and a late dejeuner. Though his post-prandial micturation infuses this wine with a somewhat disagreeable undertone.” “Naturally it does” says the second oenologist rather coolly, “as one must certainly ask why-oh-why did Pierre drink such an inferior claret for lunch?!”.
But standards are not just about quality and one-up-manship. Adam Smith advanced the metaphor of “the invisible hand”, that an individual pursuing trade tends to promote the good of his community. Yet the Doha round is stymied. Valid social and ethical concerns transmogrify into trade restrictions. Property rights are a battleground, from carbon emissions to intellectual capital. Already, emerging carbon standards are being sharpened as weapons in future carbon dumping wars. Our state sectors swell out of recognition, crowding out the private sector that delivers value. Standards and certification markets exist to improve the functioning of global markets and trade, and even to inject market approaches into monopolistic service delivery.
Adam Smith knew that markets alone are not enough. Smith’s argument is too rich to take after an excellent meal, but what I admire about certification bodies is that you exemplify Smith’s Moral Sentiments of Propriety, Prudence, and Benevolence, combined with Reason. As ABCB members you do set high standards, think to the long-term, explore new ways to help society advance and make business and government think about risk. You realize that there is more to economic life than money – as comedian Steve Wright says – “You can’t have everything, where would you put it?”
Things change fast with trade. Looking back to post-war Japan and thinking of Japan today reminds me of the apocryphal quality control tale about relevant standards. A western company had some components manufactured in Japan in a trial project. In the specification to the Japanese, the company said that it would accept three defective parts per 10,000. When the shipment arrived from Japan, the accompanying letter stated something like: “as you requested, the three defective parts per 10,000 have been separately manufactured and have been included in the consignment. We hope this pleases you.”
Today China is the sobering reminder of the importance of trade. I heard a great sound-bite at the IOD China Interest Group two years ago, “we’ve had a commercial break these past 200 years, but now we’re back, on air”. In the 18th century China was the world’s biggest economy, with a GDP seven times that of Britain’s. But China closed its doors to trade missing the industrial revolution, the capital revolution and the information revolution. There is a children’s joke that “you should never meddle in the affairs of dragons, because you are crunchy and taste good with brown sauce.” But we must mix-it-up with the Dragon. Money is odourless and poverty stinks. We must reach out to all the returnees to world trade. And we must ensure that our own standards markets are open and competitive, in turn helping world trade be open and competitive.
So, is today’s luncheon talk supposed to be slick & humorous, a call to arms or an academic lecture? Actually I want to end by emphasising the importance of conflict. Regulatory capture is a phenomenon in which a regulatory agency which is supposed to be acting in the public interest becomes dominated by the vested interests of the existing incumbents in the industry that it oversees. In public choice theory, regulatory capture arises from the fact that vested interests have a concentrated stake in the outcomes of political decisions, thus ensuring that they will find means – direct or indirect – to capture decision makers. Conflict and competition, not calm quiescence or silence, are key signs that things are working well in standards markets.
Accreditation and certification only work when the entire system is a market system, not a bureaucratic one. We are good, but we can do better. For example,
I could go further and talk about the widest view of standards from financial audit through to social, ethical and environmental standards with which I also work. I’d even mention that to me, ideally, certifiers should bear some indemnity that can, with the price paid by the buyer, be made publicly available. Developing countries rightfully worry that “the things that come to those that wait may be the things left by those who got there first”. Sustainable commerce means doing things differently. We must clasp the hands of the developing countries, support the invisible hand of commerce, restrain the visible hand of government and slap the grabbing hands of special interests. We must prove that a global Commerce Manifesto deserves to replace a soiled Communist Manifesto. We must keep our standard and certification markets open, transparent and competitive.
Standards markets are the great alternative to over-regulation or naked greed. We professionals committed to standards prevent both the abuse of capitalism, red in tooth and claw, and the abuse of government regulation, 1984 but without Orwell’s sense of humour. We open up trade. Let’s sell standards markets as the new third way to the sustainable economics everyone wants.
On behalf of all the guests I salute the ABCB’s hospitality and its great work on behalf of standards markets. Thank you!