Monday, 25 June 2007

Are We Ready For Open Sourcing?

None of us likes to be held to account. I recall from my accounting days in organisations that the annual audit was seen as, at best, a major inconvenience, and, at worst, a holy terror that blighted and destroyed careers. When we are the provider of a service, we do not like to have our actions scrutinised. However, when we are the consumer of a service, we want our voice to count.

In recent years, politicians have scrambled to become closer to the people, whilst also taking steps to keep the people as far away as possible. For example, Tony Blair has tried to interact with ‘the people’ through the Downing Street web site, whilst his spin doctors try to ensure that media contact does not give rise to any negative footage. Occasionally, the policy scores an own goal as the on-line petition over road pricing demonstrates.

In an interesting article in the RSA Journal (see article) George Osborne and Will Davies considered what some might see as a trend towards open source government. Both authors are questioning how politics may be changed in the age of the Internet. The internet enables mass participation in government, but only if there is not too great an asymmetry of information. And therein lies the rub.

Traditionally, the government will have most of the information, which denies people the ability to make an informed choice about issues. This monopoly on information is starting to be eroded. For example, patients can now rate their hospitals (see web site) and my children can now rate their teachers (see web site). However, it is still the case that most information is still in the hands of government – the provider of public services – who are naturally suspicious in matters of accountability. The Rate My Teacher web site lists those schools that have blocked access to the site because the teachers object to it.

The issue of accountability and transparency has spilled into the world of commerce. There is always a complicated relationship between the Directors, Shareholders, and Auditors of listed companies. In a recent survey, the Institute of Chartered Secretaries suggested that the Company Secretaries of three out of four listed companies thought that the AGM was a waste of time and money. And yet, the AGM is the only place in the corporate calendar where the Directors of a company, through the Auditors, are held accountable to the owners of the company (the Shareholders).

Eventually, we will either realise that accountability is an essential part of the democratic process, or we will give up on the democratic process as a means of arranging our affairs. Later this week, the UK will be governed by a Prime Minister who has been elected to that position by nobody – not even his own party. Does that provide us with a glimpse of the future?

Monday, 18 June 2007

The Globalisation Of Crime

An article in The Economist caught my attention this week. It was about how cocaine from Latin America is now being routed through Africa prior to arriving in Europe (see article). It speculates over whether or not Guinea-Bissau is the first narcocracy in Africa. The article resonated with a talk given at the RSA by Misha Glenny in March (see lecture details and access podcast of lecture), where it was argued that global organised crime is an inevitable corollary to the process of globalisation. If we were to have a theory of globalisation, then it would also have to explain the development of global organised crime.

Strangely enough, our path to this conclusion originated in a different direction. We were giving some thought to the ‘War on Terror’, and were contemplating the differences between the European approach (‘terror’ is an extended form of violent criminality that requires a policing solution) and the Atlanticist approach (‘terror’ is an act of war waged by a group upon a national entity that requires a military solution). Although these differences appear profound, in practice the policing solution requires the police to adopt a para-military stance and the military solution requires rules of engagement similar to armed policing operations.

An interesting feature of the current manifestation ‘War on Terror’ is how it operates internationally, using a network of groups. Previous manifestations have been essentially national and hierarchical. All of the benefits of globalisation that have assisted the development of the global economy (the internet, global communications, cheap air travel) have also assisted global terrorism (or, if you like, global organised crime). This is exactly the conclusion of Misha Glenny.

If this hypothesis is correct, then it helps to explain where we should look for the situation to develop. Although the violent organised criminality may manifest itself in the developed (interconnected and globalised) societies, much of it originates and develops in the fractured and failed states – the pre-moderns, if you wish. These ‘failed’ states are located in an arc that sweeps from Central Asia, the Middle East, through Africa, and into parts of Latin America – those areas that have been bypassed by the process of globalisation.

The analysis also gives a clue to the answer to the problem. If the absence of globalisation has assisted the development of global organised crime, then the inclusion of these states in the process of globalisation will also help to reduce the development of global organised crime. To date, the assistance given by the globalised world to Africa has been miserable. A vacuum has been created that is being filled by the drugs gangs of Latin America, the people smugglers of the Near East, and the Jihadists of South Asia.

This is why Africa matters to us. This is why poverty relief and debt reduction are such pressing priorities. It is vital to our own interests that Africa is absorbed into the global economy if we are ever to win the ‘War on Terror’. Beefing up policing operations will help to relieve the effects of the problem, but an effective solution to the cause of the problem requires much more effort on our part.

Saturday, 16 June 2007

The little guy strikes back- Futurist Club

After reading The little guy strikes back I just I just had to show it to my futurist friends at last weeks meeting of the Time Bandits. Here were are overall views on it.

The whole thing with us idolising famous people is never really going to change as people are not selfless, so some feel the need to be the centre of attention and some just want money. When I say things are not going to change I mean in future generations as none of the Time Bandits thought Paris Hilton getting special treatment was not that bad. Also as many Time Bandits pointed out things won't change as long as the media keeps going on about how wonderful famous people are.

The Time Bandits thought that the next people to revolt will be high school teachers as many of them get a lot of abuse and have very little power to stop it. Also caretakers may revolt soon as many are being paid badly.

When it comes to prisons I asked the Time Bandits "Should mothers with babies in prison have their own prison, when famous people have one? The Time Bandits thought mothers should have longer with their babies but not a special prison. What most Time Bandits thought was that mothers in jail are not fit to look after a baby full time. Also what if a mother threatened to kill the baby? But when I asked about famous people having their own prisons the Time Bandits couldn't understand it because it is obvious that they will get special treatment, so why can't the famous people go in a main prison. As long as there is no bullying from other prisoners then why should they get special prisons.

When I asked the Time Bandits who they thought is the most overpaid famous types of people, the majority thought that footballers as getting paid over a million pound for kicking a ball around for ninety minutes is ridiculous. If footballers really love football they should do it for enjoyment instead of money.

Saturday, 9 June 2007

The Little Guy Strikes Back.

The tale of Paris Hilton has captivated us this week. First she was going to jail (see story). However, she was not going to an ordinary jail. She was incarcerated in a special VIP and Celebrity Unit that has little connection with a more general prison population. After a couple of days inside, it seems that a ‘medical condition’ developed, and she was let out under house arrest to serve the remainder of her sentence (see story). The LA Sheriff’s Department has not released details of the medical condition, which does nothing to contradict the allegation made on the BBC that the medical condition was caused by the bed being too hard and room service not quite being up to scratch. The saga continues in uproar, with a re-incarceration (see story).

This story interests me, as it contradicts Harts Law of Jurisprudence – if there is one law that could be seen as a principle of natural justice, it is that all should be treated equally before the law. Such a blatant contradiction of natural law has given rise to quite a great deal of comment. However, we need to stand back and look at what is happening. The implication of events in LA is that we now live in a world where celebrity and wealth are above the law. We live in a naturally unjust society.

This has some important implications for the future. It means that we are comfortable with the paradox that, whilst needing the services of public servants (teachers, police, nurses, firefighters, and so on), we are prepared to deny them the ability to live comfortably – in what we might see as ‘the good life’. A story caught our attention, where public servants in the UK cannot afford housing in 70% of the UK (see story). It seems to me that this is not sustainable.

If the rich and celebrated can act is a selfish and self-absorbed way, without even obeying the law, then why can’t the little guy? A couple of stories caught our attention along this theme. First, parking wardens in Edinburgh are set to go on strike because, they claim, their salaries do not allow them to live ‘the good life’ (see story). Whilst admitting that parking wardens are not the most appreciated of public servants, if traffic chaos and gridlock ensues in Edinburgh, then they will have made their point. Second, postal workers in the UK have voted to strike (see story). Once again, the key issue is pay. A national postal strike will have a significant impact on the economy, if it goes ahead.

Does this represent the start of a much longer trend? Has the pendulum moved away from fame and celebrity and towards contribution and service?

Thursday, 7 June 2007

Wind Energy: Power from the Prairie

This week at the Northgate High School Futurist Club we looked at Wind Energy: Power from the Prairie. The overall view was that it is a very good idea; but no one really has done enough acting, just a lot of talking on the subject. Wind turbines are a very good way of collecting energy because as long as we have wind we have an infinite supply of energy. The Time Bandits thought that we should also raise taxes on certain doodads like boats to help fund buying new turbines. But the Time Bandits didn’t think that prioritising on this was very smart as there are so many other things that we should be concered about.

On the other hand there have been some very bad stories about the effects of wind turbines like pigeons get stuck in it, whales signals get messed up and they start doing very abnormal things, they are loud and are ugly. But compared to oil stations some Time Bandits thought wind turbines were very pretty.

When the Time Bandits got on to thinking about where the turbines could actually be placed some Time Bandits were a little stuck so I asked them to think of a place where there is lots of space, at first many thought of Australia and Ireland but when I asked them about Great Britain the Time Bandits thought Wales is a good option.

Once the problems have been sorted out with wind turbines then I think that wind turbines will be a very smart way to go forward. So maybe in the future when you go on holiday to Wales you will see lots of wind turbines out and about.

Friday, 1 June 2007

Has the Long Slow Fuse Been Lit?

How long can China maintain its recent growth rate?

I was sitting on a passenger train next to a freight train that was full of containers going to and from China musing on just that question. A quick calculation revealed that, if current growth in port and shipping capacities continue, and if Chinese exports of manufactured goods continue to grow at their present rates, then by 2012 to 2014, every ship in the world will be involved in the China trade and, sadly, there will be insufficient port capacity to land the goods.

If this ridiculous scenario is to be avoided, then more carrying capacity needs to be developed (a possibility), or the Law Of Large Numbers will apply to the Chinese economy (far more likely). The Law Of Large Numbers is easy to comprehend. If we want to increase our income by 10% each year, then it is easier to move from £10 to £11 than it is to move from £100,000 to £110,000. As China weighs heavier in world trade, we would expect the rate of growth in China’s trade to diminish. This is the Long Slow Fuse.

We have seen something similar in the recent past in relation to Japan. In the 1960s, the growth rate of Japanese exports was quite considerable when compared to European and US growth rates. However, the Long Slow Fuse had been lit. It detonated in the 1980s, and consigned the Japanese economy to an unwinding that has taken the best part of a generation to work out. We are of the view that a similar process will occur to the Chinese economy.

Three recent stories support our view. First, there was a story in the Wall Street Journal about the triangulation of Chinese exports to avoid quota restrictions (see article). Second, there was an article in The Business about how the Chinese sovereign wealth fund ($300 billion this year) is being steered away from US T-Bonds, where the weight of Chinese money (currently $1.2 trillion and rising) is forcing down rates for investors, and into Private Equity in a search for higher returns (see article). Finally, there was a report on the BBC about how the Nanjing Automobile Corporation had re-opened a car plant in the UK (see story). This is part of a trend where Chinese companies assemble within the EU as a means of avoiding export quotas to the EU.

What all three of these stories have in common is that they represent actions taken by Chinese companies to avoid the Law Of Large Numbers, and represent, to our view, evidence that the Long Slow Fuse has been lit. If so, we might ask, will it end with a bang or with a whimper? That is, possibly, a more important question.