Could Facebook be a factor in the next election?

This morning’s Observer column:

There are two things about 2015 of which one can be reasonably certain: there will be a general election in May and it’s unlikely to produce an overall majority for either of the two big parties. In those circumstances, small, localised events might have big implications: a Ukip candidate shoots his mouth off about, er, non-white people; a Labour candidate turns out to have an embarrassing past; a Tory garagiste cannot differentiate between sexual harassment and bum pinching. The kind of stuff, in other words, that could affect the outcome in a finely balanced constituency.

Which brings us to social media and the question of whether the 2015 general election could be the first one in which the outcome is affected by what goes on there. Could Facebook, for example, be a factor in determining the outcome of some local constituency battles?

Far-fetched? Maybe. But the question is worth asking because in the 2010 US congressional elections, Facebook conducted an interesting experiment in social engineering, which made some of us sit up…

Read on

What’s really wrong with the economy

Great blog post by Mariana Mazzucato. Excerpt:

To reduce inequality, its not enough to consider the power of redistributive taxation or handounts, like Renzi’s ’80 euro monthly bonus’. It is essential to tackle the more intrinsic problems of corporate governance which have allowed profit wage levels to sore to record levels, leaving wages falling behind. It is indeed this point that brings us to the second problem. The notion that big bad finance must be somehow tamed in order to rebalance the economy to good old industry, ignores how sick the real economy has become. Industry itself has become financialised, focussing too much on ‘hoarding cash’ (at record levels) and/or spending on areas that boost short term stock prices (thus stock options and executive pay), than on long run areas like R&D and human capital formation. Indeed, Since 2003 Fortune 500 companies have spent 3 trillion dollars on share buybacks, often justifying these with the excuse that there are ‘no investment opportunities’. Yet a look at the largest buy-backers (pharma and oil) reveals that these are in two sectors yearning for investment in new opportunities: health and renewables. And as I show in my work, it has been a select group of public sector institutions in the world, that have been spending the most on these opportunities rather than the sick and financialised private sector.

Thus it is urgent for industrial policy, which is finally becoming fashionable again, to not simply throw support to certain firms and sectors, such as IT or ‘life sciences’, but ask companies within these and other sectors to be part of the reform that is needed. Instead we are witnessing the opposite: sycophant governments bending backwards to unquestioningly please the ‘growth’ requests of big business, and a widespread attack on workers rights.

And, later, she nails the foolishness of the ‘patent box’ trap that George Osborne has recently walked into:

This policy, which greatly reduces tax on income generated from patented goods, increases business profits even more while doing little or nothing to increase private sector investment in innovation (the goal of the policy). Patents are already monopolies: policies must target not the income they generate (protected for 20 years!) but the research that leads to them–especially in a country like Italy that has one of the lowest business sector spends on R&D. Instead, this policy will only reduce government revenue, forcing cuts elsewhere in order to remain ‘on target’ with the deficit.

Another example of business getting its way in a period in which governments are starving for growth, is the other side of the Jobs Act which reduces taxes for private equity, crowdfinancing, and venture capital funds, as though these are the secret to innovation financing. The reality is that what is required by both small high growth innovative companies is patient long term committed finance, not the increasingly speculative VC model that focuses only on the ‘exit’ phase. Yet the wrong model of what drives growth–an obsession with SMEs and VC– has seen the time that private equity has to be invested from 10 to 2 years to receive capital gains tax reductions–causing many of these companies to focus on short term returns.

Wouldn’t it be nice to have a Labour party which understood some of this stuff?

How the unthinkable becomes thinkable

From the Christmas Edition of the New Yorker:

It’s hard to describe it as a positive development when a branch of the federal government releases a four-hundred-and-ninety-nine-page report that explains, in meticulous detail, how unthinkable cruelty became official U.S. policy. But last Tuesday, in releasing the long-awaited Senate Select Intelligence Committee report on the C.I.A.’s interrogation-and-detention program, Senator Dianne Feinstein, the committee chairman, proved that Congress can still perform its most basic Madisonian function of providing a check on executive-branch abuse, and that is reason for gratitude.

And…

The report also demonstrates that the agency misrepresented nearly every aspect of its program to the Bush Administration, which authorized it, to the members of Congress charged with overseeing it, and to the public, which was led to believe that whatever the C.I.A. was doing was vital for national security and did not involve torture. Instead, the report shows, in all twenty cases most widely cited by the C.I.A. as evidence that abusive interrogation methods were necessary, the same information could have been obtained, and frequently was obtained, through non-coercive methods. Further, the interrogations often produced false information, ensnaring innocent people, sometimes with tragic results.

Other documents illustrate how the agency misled. In June of 2003, the Vice-President’s counsel asked the C.I.A’.s general counsel if the agency was videotaping its waterboarding sessions. His answer was no. That was technically true, since it was not videotaping them at the time. But it had done so previously, and it had the tapes. The C.I.A. used the same evasion on Senate overseers. A day after a senator proposed a commission to look into detainee matters, the tapes were destroyed. Similar deceptions on many levels are so rife in the report that a reader can’t help but wonder if agency officials didn’t simply regard their cloak of state secrecy as a license to circumvent accountability.

So, will anything change?

It remains to be seen, though, whether the report will spur lasting reform. Darius Rejali, a professor of political science at Reed College and an expert on torture regimes, doubts that it will. For one thing, despite McCain’s testimony, torture is becoming just another partisan issue. This wasn’t always the case—it was Ronald Reagan who signed the U.N. Convention Against Torture, in 1988. But polls show both a growing acceptance of the practice and a widening divide along party lines. “It’s becoming a lot like the death penalty,” Rejali said.

All of which brings me to our current ‘debate’ (such as it is) about online surveillance. It’s interesting to see how affronted contemporary officials and government ministers become at any suggestion that the agencies are not behaving ethically or even legally. The response is to assert indignantly that such behaviour is unthinkable and that it is outrageous even to hint that some officials might behave badly.

Which makes me wonder if all these righteous protesters are either in denial or suffering from a bad case of collective amnesia. It’s not so long ago, for example, that the senior ranks of MI6 harboured a nest of Soviet spies. And I can’t think of a public or semi-public agency in recent years — the BBC, the Metropolitan Police, the Press Complaints Commission, the South Yorkshire police force, the Care Quality Commission), the Catholic church and MPs to name just seven — that has not done things or condoned behaviour that, when exposed, has been deemed unthinkable, unethical or incompetent.

Given what we now know about the recent history of our institutions, it seems statistically improbable that analogous malefaction is not going on in their contemporary equivalents. At any rate, it seems to me to be the most rational default assumption. Why should we believe any assurances from public or corporate spokespersons any more?

The Afghan shambles, and what it means

One of the astonishing things about democracies is the way in which those in government are allowed to get away with talking nonsense, especially if that nonsense involves ‘national security’, ‘defence’ or war. It was obvious to the meanest intelligence that the British adventure in Afghanistan made no sense, and all that ministerial guff about having British boots on the ground in that benighted land making the streets of Britain safer was pure baloney. And yet ministers from the PM down continued solemnly to intone it, and journalists reported it without much in the way of critical comment.

And now we’re ‘out’ of Afghanistan with nothing to show for it except humiliation, death, injury and humiliation.

Will Hutton has a good column about this in Sunday’s Observer. Excerpt:

None of the multiple and varying objectives set by three prime ministers and six defence secretaries through our engagement in Helmand province over eight years has been met, yet cumulatively it has cost at least £40bn. The bravery of British soldiers cannot be doubted: 453 have died; 247 have had limbs amputated; 2,600 have been wounded. Tragically, many uncounted thousands of Afghans have been killed; too few of them were fighters enlisted by the Taliban.

There is no improved government in Helmand. There has been no hoped-for economic reconstruction: heroin production is higher than it was. The violence between tribes, families and warlords is more entrenched. Helmand is more of a recruiting sergeant for terrorism and jihadism than it was; there have been no security gains. The central government in Kabul is more rather than less threatened. If one aim was to make the British homeland safer by victory in southern Afghanistan – a fantastical claim of last resort – Britain is now less safe.

More widely, our failure in Helmand, following on from the disaster in Basra where our forces were beaten back to the airbase outside the city and only the intervention of the US army allowed an orderly exit, has led to America’s profound re-evaluation of our usefulness as an ally. Tony Blair’s key aims for first invading Iraq to quest for nonexistent weapons of mass destruction and then pivoting into Afghanistan was to prove to the US that we were stalwart allies, consolidate the “special relationship” and so maintain Britain’s standing as a co-upholder, if junior partner, of the world order. In this, he was solidly supported by the “strategists” in the Ministry of Defence and leading generals anxious to defend their budgets.

All that has been completely dashed. Frank Ledwidge in his passionate and revelatory book ‘Investment in Blood’ (the source of the figures above) quotes former vice chief of staff of the US army General Jack Keane speaking at a conference at Sandhurst in late 2013 about the twin debacles of Basra and Helmand: “Gentleman, you let us down; you let us down badly.” Ledwidge continues, having spoken to many senior American military leaders: “This is a common view among senior American soldiers.” The US commander in Afghanistan, General Dan K McNeill, is uncompromising, cited by Jack Fairweather in his no less astounding ‘The Good War’: the British “made a mess of things in Helmand”. Afghanistan has left the special relationship in tatters.

Interesting also to hear soldiers who have served in Afghanistan talk about it. It’s clear that they yearn for a convincing story that would justify the death and mutilation of their comrades. But no such story is forthcoming, for the simple reason that none exists.

The concierge economy

My Observer essay on the implications of Uber:

In a way, the name of the company – Uber – gives the game away. It has connotations of elevation, superiority, authority – as in Nietzsche’s coinage, Übermensch, to describe the higher state to which men might aspire. Although it’s only been around since 2009, Uber, the smartphone-enabled minicab company, is probably the only startup of recent times to have achieved the same level of name recognition as the established internet giants.

This is partly because Uber is arguably the most aggressive tech startup in recent history and partly because it has attracted a lot of bad press. But mainly it’s because a colossal pile of American venture capital is riding on it. Its most recent investment round valued the company at about $40bn, which is why every MBA graduate in California is currently clutching a PowerPoint presentation arguing that his/her daft idea is “Uber for X” – where X is any industry you care to mention.

What lies behind the frenzy is a conviction that Uber is the Next Big Thing, fuelled by the belief that it is the embodiment of what Silicon Valley values most, namely “disruptive innovation” – as in disruption of established, old-economy ways of doing things…

Read on

LATER

Om Malik has a very thoughtful essay which starts with a meditation on a conversation he had with an Uber driver, and then moves into a meditation on the apps economy.

Keith [Malik’s Uber driver], who aspires to be in the fashion business was pretty ruthless in his assessment of the company and brought up many questions that have coursed through my mind. He appreciates the financial flexibility Uber has provided him — his luxury car rental business wasn’t enough and he has benefitted from this augmented income. He isn’t the first one who felt that Uber look some pressure off their back — the other day I met a $12-an-hour bouncer at a Tenderloin music venue who is happy dealing with traffic rather than drunks and strung out addicts. “It was worth $19 billion three months ago and now it is worth $41 billion,” says Keith, “isn’t that something. And yet they don’t care about their contractors.”

Still, like many others Keith is befuddled by Uber’s treatment of its contractors. Many of the rule changes seem arbitrary and he too is confused by the tone-deafness of the company. He laments the recent directive (later modified) by Uber to classify all cars before 2010 as a UberX and thus relegated them to lower money making tier. When I point out that as a customer if I am paying premium prices, why shouldn’t I get a premium experience. Today, you end up riding in “black cars” who are a pale imitation of their real self. Shouldn’t the car upgrades result in better cars and through process of elimination bring fewer, but better drivers on the road? Like most drivers, Keith agrees, but points out that logic and reality of being a contract driver are two different things.

It is very hard for people to understand that it isn’t easy to upgrade your car, especially when you are trying to make a living driving an Uber in an intensely competitive marketplace where there are more cars on the road and the pie is getting sliced into thinner and thinner slices. Still, Keith said that he was planning to upgrade, though he didn’t care much for Uber’s financial plans or deals with car companies — he is going to get a Mercedes as part of the upgrade. During our conversation, Keith points out that Uber is good for helping him and others make money in the near term, but the current model doesn’t allow much optimism for the future, thanks to too many cars, too many rules and demand which isn’t rising as fast as the cars.

LATER STILL: this:

Dan Sperling, Founding Director of the Institute of Transportation Studies at UC Davis, says that while Uber “will continue to do battle with local and state authorities, it’s pretty clear that they’ve got a very good business model, they’ve got a lot of momentum, and they’ve got a very good product that people love. They’ll figure out a way around the challenges because it’s clear they provide a valuable service. And that’ll force regulators to reassess their rules, some of which were written up years ago and make absolutely no sense today.’’

As Sperling sees it, “while it’s true that taxis are way over-regulated, the answer is not to smother all the babies competing with them; the answer is to regulate the Ubers of the world better while you deregulate the taxi industry.’’

And what about that $40 billion price tag? Uber and its rivals “are entering a marketplace that has seen almost no innovation in many decades,’’ according to Sperling, who says adding courier and food-delivery services could make Uber even more of a behemoth. “There’s a lot of pent-up demand for real-time, on-demand-type services, so there’s huge upside potential here.’’

Coming to grips with where we are now

This morning’s *Observer column:

Could we live without the net? Answer: on an individual level possibly, but on a societal level no – simply because so many of the services on which industrialised societies depend now rely on internet connectivity. In that sense, the network has become the nervous system of the planet. This is why it now makes no more sense to argue about whether the internet is good or bad than to debate whether oxygen or water are desirable. We’ve got it and we’re stuck with it.

Which means that we’re also stuck with its downsides…

Read on

Quote of the Day

A journalist once remarked that Harold Wilson’s sons had become a head teacher and a professor of education (in fact, a distinguished mathematician). ‘Well, I certainly hope my children do better than that,’ Blair retorted.

Source

Tells you everything you need to know about New Labour, really.

Justice by PowerPoint

Did you know that lawyers in US courts are allowed to use PowerPoint in making their arguments? Neither did I, until I read this:

Perhaps the most common misuse of what some legal scholars call “visual advocacy” is the emblazoning of the word “Guilty” across a defendant’s photo. Almost always the letters are red—the “color of blood and the color used to denote losses,” as one court wrote. Two months ago the Court of Appeals of Missouri ruled in a case where the prosecution, in closing argument, presented the following slide:

Gulity

The defendant, Chadwick Leland Walter, had been convicted of attempting to manufacture methamphetamine and of maintaining a public nuisance. The photo used for the slide was Walter’s booking photo—hence, the orange jail clothing. As the appeals court noted, the state could not force Walter to appear before a jury in jail garb, because that could undermine the presumption of innocence. But the prosecution’s use of the booking photo had the same effect.

Piketty on the Middle East

From an interesting interview with Owen Jones:

The other influence is perhaps more surprising: the first Gulf war that followed Ba’athist Iraq’s invasion of Kuwait in 1990, which shocked him and his colleagues at the école. “It was a very strong event, because sometimes we say that governments cannot do much against tax havens, they’re too powerful. And suddenly we’re able to send 1 million troops 1,000km away from home to give back the oil to the emir of Kuwait. I was not sure this was the right redistribution of wealth.”

The west’s general relationship with the Middle East – “the most unequal region in the world”, he says – is one that troubles him, not least because it exposes grotesque inequalities. “Take Egypt: the total budget for education for 100 million people is 100 times less than the oil revenue for a few dozen people in Qatar. And then in London and in Paris we are happy to have these people buying football clubs and buying apartments, and then we are surprised that the youths in the Middle East don’t take very seriously our democracy and social justice.”