There is something rum going on in the financial economy. Those markets that are supposed to allocate capital to the people and places that can use it best are coming up with some rather peculiar results. Is this a transitory fever, or something more chronic?
Last month the UK government sprang a surprise by announcing a ban on the sale of all internal combustion engine cars and vans from 2035 – five years earlier than previously planned. No petrol, no diesels, and (depending on consultations) most likely no hybrids either. It sounds like a progressive, even daring, pro-environment policy. There is just one flaw: electric vehicles alone will do little to meet carbon emissions targets and restrain global warming. In a worst-case scenario, they could even increase emissions …
In the world of financial markets and global economies the really big things rarely change rapidly. The last few weeks have proved to be an exception to the rule. In the space of days large economies have all but closed down, and financial markets have bounced up, down and side-to-side like a pinball. When change is this rapid there is a natural tendency to think that a return to the status quo ante will be just as rapid. That may prove a rash assumption …
I’ve spent much of the last year in my day job investigating the applicability of artificial intelligence. The question I’m always being asked is, ‘but does it work? The answer is…‘sort of’. It really depends on who you are …
The ‘gig economy’ may be a horrible phrase but it manages to capture a lot of what is good and bad about the way the economy works now. Whether the world of ‘portfolio’ careers, ‘contingent’ employment and mobile working is a blissful liberation from the toils of nine-to-five or a trap designed to make the rich richer and the poor poorer is certainly a question many like to ask, but it may be yesterday’s question. The gig economy might not be where we are headed after all.
It’s not such a crazy question. For the last hundred years or so – as long as aircraft have been an important part of economies – governments have claimed ownership of the airspace above our heads. Individuals or corporations may own land and use it as they see fit, but the sky belongs to the state. You may travel the airways but you do so at the government’s pleasure, on terms the government decides, and at a price the government sets.
That has been the way of things ever since aviation began. But it may not be the way of the future. Coming changes in demand and new technologies that already exist are picking away at the old order.
It is May. The North Sea temperature has just crept over 10 degrees centigrade. The sand on the beach is almost warm. In short the lobster season is here. Time for me to push that boat out and catch some of these ineffably strange and ancient crustaceans (they’ve been around for 360 million years), these creatures of mysterious and fugitive habit (the lobster may have limitations in the brains department but will never be domesticated – she’s a wild one). Although when I say ‘catch’ I am being optimistic. Your life as a lobster hunter is likely to be marked by expense, frustration, disappointment and blind chance. They are in their element, you are not. At some point – assuming you have not drowned – you will certainly think of giving up the trade.
But no, you won’t give up. The magic is too powerful. And because one day, perhaps today, you will haul up that lobster pot and there it will be, that speckled flash of deep blue-black rising from the sea …
The only reason I was at Clarke & Simpson’s country auction in Suffolk was to buy a desk for my office. The Art Deco and Design auction in Campsea Ash is a good place to find handsome furniture that is not Victorian and not brown, and last Monday there was just such a desk in the auction catalogue. True, I also had an eye for one or two other lots that looked like they might go cheap, like the cast iron Christmas tree stand and perhaps the green enamel angle-poise lamp – open an auction catalogue and you are already sliding down a slippery slope with an invoice at the bottom. But the desk was top of my list. I certainly had no intention of buying a print by one of the acknowledged masters of twentieth century American photography.
Artificial intelligence was the business story of 2018. But here is why I think 2019 is the year the story will unravel. Companies will start to question the cost and effectiveness of their expensive AI programmes. Financial analysts will stop awarding investment ratings based on ‘digital strategy’, and go back to looking at good old-fashioned cash flow. Journalists will start to lose interest in the machine-driven future. The AI bubble is about to burst.
There is no standard definition of what makes a country viable as a country. What are the materials, the history, the culture, the institutions that allow a territory to grow into a something more than just a geography of resources? What are the building blocks of an accountable and democratic state?
Whatever these ingredients are, we know what happens when they are not present. And nowhere is this lesson clearer than in the case of South Sudan.
Only five years ago, South Sudan was the newest and most optimistic member of the community of nations, a state-building project backed by the goodwill and expertise and cash of well-intentioned supporters around the world.
Today, the country has imploded into a fireball of violence and suffering, an off-the-radar disaster comparable in its scale to Syria (the number of refugees recently passed the one million mark). In other words, the outcome of the project has been as disastrous as its ambition was great. But why?
In the islands of Cape Verde off the coast of West Africa there is an institution called the aluguer. Perhaps ‘institution’ is too weak a word. The aluguer – from the Portuguese verb ‘to rent’ – may at first sight seem nothing more than a shared taxi in the form of a Toyota van or a flatbed pickup truck. In reality the aluguer is the backbone of society and economy: not just a bus but also an informal courier and messaging service, a small-scale cash-banking network, an ambulance, a limousine, and a theatre on wheels. Take an aluguer through the cobbled streets of Mindelo or the mountain roads of Santo Antao and you will see more than the view.
In January this year an Italian graduate student from Cambridge University disappeared in Cairo. Giulio Regeni had been researching independent trade unions in Egypt; on the evening of January 25 he was on his way to meet an academic colleague from the British University in Cairo. According to the Associated Press news agency Regeni got as far as a security check in a metro station close to his apartment. Then he disappeared.
Wang Jianlin is China’s richest man. With a personal fortune of over $30 billion, he owns businesses that range from department stores to commercial property, from e-commerce to media to tourism. But that is not enough for Wang Jianlin: in the past he has made no secret of the fact he also wants to be a Hollywood film mogul. And this year his dream has been fulfilled.
The Conservative government recently published proposals for new legislation to regulate spying in the UK. The draft Investigatory Powers Bill seeks to do many things, particularly gathering up powers already contained in a lot of different existing laws and subjecting them all to a coherent oversight procedure. Most of the discussion generated by these proposals has been about the implications for liberty. But there is another and related dimension that should be considered, and that is the potential for the Bill to harm the economy.
Sometimes it seems as if Britain is surrounded by existential threat. Armed extremism, financial upheaval, cultural confusion – all can feel like they could break a brittle, uncertain society. But these are only the headline concerns of the day. Deep beneath the headlines there is another country where real change happens, sometimes slowly, and sometimes not. At this level Britain really is in a state of transformation. It is nothing to do with terrorism, or politics, or religion. It is a lot to do with new machines, new materials, new algorithms, and new patterns of behaviour. These are things that are changing the shape of minds as well as environment, and what is really striking is just how relaxed Britain is about it. To find a historical parallel for this era of peaceful redrafting of the fundamentals one has to go back at least two and a half centuries. It is Georgian Britain that offers the best guide to what is happening today, and some clues to what might happen next.