Monthly Archives: February 2012

“Why It’s Kicking Off Everywhere”: Paul Mason on the social media, revolt and the connected self… #RSAmason

Paul Mason, talking at the RSA on his new book “Why It’s Kicking Off Everywhere, supplied the bits that I had felt missing from the recent RSA Job’s Summit: he explained why the great and good – the economists and politicians with whom we entrust management of our economic and social government – don’t (and won’t – can’t) get it. (You can here a recording of his talk here.)

He was trying to explain why around the world – most notably in the “Arab spring”, but also China, Russia, and the west too (with the Occupy movement) – there had been public uprisings of one sort or another. He painted it as a Shakespearean tragedy in which the common people – the “fools” – sounded philosophical and the powerful and elite sound like idiots.

His argument had three strands:

  1. economics
    The “global financial crisis” is not a crisis but the collapse of the neo-liberalism model: the expansion of free markets, deregulation and globalisation since the 1980s lead only to their collapse: the old idea of “get a job, get a house and save for your pension” won’t work any more. The young today will be poorer than their parents, because the nation-states themselves are bankrupt. The never-ending growth of the world economy cannot be sustained, and this is causing a massive rethink in the young. The trouble is that there is no alternative to neo-liberal economic model: religion hasn’t worked, communism hasn’t worked – where else are people going to turn?

    Society’s promises to the young have been broken. The neo-liberal model helped the rich elites to grab more power, but with rampant inflation people are grabbing some back – and it is a growing, disenfranchised middle class who have nothing to lose. Mason quoted Taine from 1879 – “don’t worry about the poor, worry about poor lawyers” – except now in a garrett there is a laptop…

  2. technology
    With easy access through mobile and broadband communications to social media, the elite no longer have control of information. Commodified technology makes anyone a publisher, and governments can’t control it. (Though I couldn’t help but recall Evgeny Morozov’s talk in which he discussed how governments can use these technological tools to manage and control information.)

    To Mason, these new technologies and tools reconfigure the dynamics of power. In Kenya, for instance, the spread of mobile communications is seen as the “same as democratic transition”. Social media allow collaboration and co-operation between tribes who would previously have fought each other – they can foster trust from a distance and highlight similarities.

    Knowledge is now distributed and instantly available, rather than being restricted and controlled.

    These new tools are non-hierarchical – but the power-structures in society, like political parties, unions and global institutions are rigidly hierarchic, and this is why Mason thinks they “don’t get it”: they cannot understand how decentralised, self-organising groups such as the demonstrators in Tahrir Square or Occupy Wall Street can function. They cannot conceive it – no beliefs but a will for massive change, no leaders and no command structure. The demonstrators can move more quickly and fluidly than the police – mediated by social media.

  3. lack of leadership
    Mason quoted Karl Rove describing the world’s leaders as those who create reality – ”when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities”. Now it is out of their hands: it is the those without formal power who create reality, and this is causing a parallel change in behaviour and thinking. Mason drew parallels with the changing perceptions early in the 20th century: a sea-change in society. (He attributed this view to Virginia Woolf – which someone else has verified – but I can’t find anything about Woolf expressing this.) Mason sees a new conception of the self – connected, networked and “leaky”. (Not sure if I really get this, but it is an interesting idea!)

Where does that leave us? In an increasingly uncertain world. Mason drew uncomfortable parallels with late 1920s and 1930s Europe, and we know how ell that ended. Nationalism is on the rise in southern Europe – and in Greece and Italy, elected governments have been replaced by unelected technocrats. Unemployment, particularly among the youth, is reaching scary heights. (This was the starting point for the RSA jobs summit, of course.)

There may be different outcomes in different parts of the world. And it is unknowable, perhaps. Mason questioned whether the nation state may be challenged by technology – but where would this leave the welfare state (the safety net for those unemployed, in the UK and parts of Europe at least)? Twin – and opposing – forces of localisation and globalisation may lead us to new models.

Perhaps we do indeed live in interesting times.

[Mason also gave a talk at the LSE – you can read a transcript here (pdf).]

BarCampBank: Reinventing Finance?

Ten years ago or so, I did a university course on finance and banking; as a final flourish to my presentation, I held up my mobile phone and predicted that in the future we’d be using our phones as electronic wallets. The other day, Barclay’s launched a smart phone app that can be used to transfer money from one person’s account to another. It has taken a decade, but that future seems to be moving closer…

A couple of weeks ago, I went to BarCampBank London (#5, I think), which was full of such talk: how could banks and banking be re-engineered? What is the future of banking? Most of all, what IS a bank?

That question was debated a lot – I think it cropped up in every session – and there wasn’t really a satisfactory answer. Maybe a bank is simply an organisation with a banking licence – or one that the banking regulators deem to be worthy of regulation. (It sounds like the regulators are somewhat more active now than they were six or seven years ago…)

An unconference – albeit one that had a bit more structure than most I have attended – BarCampBank had multiple sessions running concurrently. Some concentrated on technical issues; I attended those that dealt with behavioural and human side of the industry.

The first session I attended was provocatively titled “Is Banking A Human Right?” Whilst possibly quickly consigned to the category of “QTWTAIN”, the discussion was engaging, focussing on customers and their needs rather than the institutions that serve them. “Banking” provides access to many more services than just banking: the unbanked of the world can suffer injustice that those more privileged – that’ll be me – find it hard to conceive. (There are between 600,000 and 1.2 million households without access to the banking system in the UK alone [pdf] figures for 2009.)

The basic bank account promoted by the last Labour government in the UK has done little to plug the gap. (The government likes people to use bank accounts because it may help reduce fraud.) In India, the inability of people to identify themselves has denied them access to banking – one of the drivers for the Indian ID scheme. (An anathema to many BarCampers who can be fierce privacy advocates…)

The next session had a similarly provocative title, “Do social media change anything or everything in finance?” – this time answered with a resounding YES. And, erm, NO.

Banking is clearly social – we use banks to make payments to each other, in all sorts of combinations. (I would maintain that actually any business is social, but that is a different post…) Social networks can be thriving economies – Second Life apparently has a huge economy mediated by “Linden dollars”; eBay a larger one using real dollars exchanged by PayPal; and Facebook credits are the social network’s currency. Dutch law recognises virtual assets within World of Warcraft as real as far as property rights are concerned.

But do social media change anything or are they just a new channel or platform for existing services or organisations providing them? The ease with which some people who have grown up with the service place their trust in Facebook – probably greater than their trust is stolid institutions like banks which they have just seen come crashing to the ground – suggest there might be an opening. But why would Facebook – or Twitter, or Google, or … – want to become a bank? Maybe to use a multi-billion dollar cash pile, though a similar argument was used in the 1990s to predict that Microsoft might become the first virtual bank, which it failed to do. (Observers still discuss the possibility.) Regulators may well determine this – Microsoft had enough problems with regulators without involving more of them, and Google and Facebook look like they may be facing similar regulatory issues in the future.

The need to transfer money cheaply around the world – meeting the needs of the increasing, and increasingly connected, diaspora – may be one driver: a social media bank that could build on existing trust and reputation relationships to leverage scale might succeed.

Similarly, banks are becoming more aware of online trust and reputation. MovenBank is specifically using applicants’ social graph as one of their criteria in lending decisions. Existing online services such as Zopa (who I believe were represented at BarCampBank), Kiva, PayPal and Wonga perform near-banking functions, and some at least have a social aspect to them. Crowd-sourcing and crowd-funding platforms like Kickstarter and Indiegogo (which were also covered by sessions I didn’t attend – next time, I must remember to take my clone…) could morph into banks.

The session “How Could the Finance Sector Work Differently?” was perhaps the least satisfactory – if only because we were instructed to think positively! Bankers of course come in many different types; those manning the local branches of retail banks probably don’t need an injunction to “be humble” and “engage with your community” – because they are deep within it already; those who still believe they are the masters of the universe and wish the rest of us would go away and let them celebrate their riches may however benefit from considering their role in society.

The idea of personalisation of products cropped up, but I am not sure this is necessarily positive – at least from the customers’ point of view. One of the reasons banks were created was the pooling of risk – I could lend money directly to an enterprise, but if I lend it to an intermediary – a bank – who lends to many enterprises, the risk of any one failing to repay my loan is greatly reduced. Excessive personalisation may reduce this – particularly with insurance products: if insurance companies personalise their products to a great degree, those who need insurance may become uninsurable, and those who don’t – well, they don’t need insurance!

This lead onto debate about mutuality. In the wake of the credit crunch and the “global financial crisis” (or GFC as it is known to its friends), mutuality seems to be making a comeback. Apparently, credit unions are more popular, and people feel safer with building societies than banks. This may just be anecdotal, but these institutions feel more local – more community-centric. Surprising since the community – all of in the UK – now own two banks and have a significant interest in others.

There was also a discussion about increased portability – being able to switch providers more easily. But should banks be concentrating on this rather than providing sufficiently good service that we don’t feel the need to move? It is said (though I can’t find any stats to support the assetion!) that we are more likely to get divorced than change our bank: maybe we just want banks to be more committed…

The final session I sat in on was perhaps the most creative: the group was asked to create a narrative for the future of finance – to pitch the movie “Banking 2.0”, if you like. At least, that was how we interpreted the task. The blind leading the visually impaired, we probably came up with as many narratives as there were contributors, despite some sterling facilitation. We tried to come up with a scenario in which banking was re-invented after a future financial crash: what would it look like?

Some envisaged mobile phone companies stepping into the breach left by the collapse of banking – they’d facilitate the transfers of cash between consenting handsets. Others saw bartering as an option. My take was much more apocalyptic, I’m afraid: in the wake of a catastrophic banking collapse – not just Lehman going, but the whole lot – I’m afraid I just saw a disaster movie. Phone companies wouldn’t provide credit, since they’d have no trust in us to pay (and vice versa) – indeed, they’d cancel our accounts when we couldn’t pay. With all our money tied up in failing banks, we couldn’t even buy energy to keep our phones charged. And with the financial system in meltdown, the oil-rich nations wouldn’t sell us the fossil fuel we need to keep the power stations running, so they’d be no electricity anyway.

What interests me is that it wasn’t a phone company which has innovated a banking app, but a bank. There may yet be life in these seemingly moribund institutions… (Though perhaps we should have conceived the movie as a zombie epic, the banks refusing to die…! And Umair Haque has written about the zombie economy.)

[Aden Davies has posted about his views of BarCampBank London 5, including information on some of the more technical aspects discussed.]

Richard Sennett on “Together”

Once more at the RSA, to hear Richard Sennett talk about his new book “Together: The Rituals, Pleasures and Politics of Co-operation”. (Audio here.) He had some very interesting things to say – it was thought provoking – but I was not necessarily convinced.

Sennett reckons that cooperation and collaboration is natural to people – indeed, he said he believed that it might be genetic in nature (though I’d have thought it would be easily explained through culture, especially as Sennett said it develops as we learn – a lot of play is about developing cooperation).

But he then said it is difficult and requires practice – if it is innate, there is clearly a learnt element. Still, it is clearly a complex skill: Sennett focused on three attributes which he contrasted with their modern antithesis, to show where we might be going wrong.

  1. dialogics v dialectics: education and legal systems (and much else) lead us to dialectic debate, often confrontational (anyone listen to the “Today” programme or watch “Question Time”: they may then understand that confrontational debate does little to promote understanding and collaboration…); in contrast, dialogic requires the exercise of listening skills – more listening than talking, and what talking there is is questioning and probing. Co-operation requires understanding built on dialogue
  2. subjunctive v declarative: Sennett lambasted the “fetish of assertion” – aggressively asserting “I think…” or “I believe…” demanding for a (usually confrontational) response. Instead of confronting others with our convictions, Sennett advised using subjunctive propositions – “It seems to me…” to open discussion and invite participation – building collaboration and teamwork rather than confrontation
  3. empathy v sympathy: identifying with others – sympathetically feeling their pain – closes down discussion: understanding another’s position without being able to identify with it, but accepting their need to attend to it, sends messages and builds understanding, It requires curiosity rather than compassion – an interest in other people

[I’m not sure that I am in total agreement with Sennett about these, particular his second and third assertions, though he maintained there is research to support his position.]

Sennett proceeded to discuss co-operation in urban society and workplaces; once more, he was interesting if not (to my mind), wholly convincing. He asserted that the way that we organise work and (his word!) community in modern [western?] society reduces and disables learning to co-operate with those who differ from us.

With regard to work, the focus on project work with short term timeframes plays lip-service to teamwork, but doesn’t let us develop the understanding required of each other to actually pull it off. We don’t have the time to spend with others building that understanding, instead focussing on our short term objectives – after which we move off to work on the next project. We do not have enough invested in the success of our enterprise, instead seeking the next fix.

I disagree about this: those working in a project environment rely on others in the team to deliver the result. We have to co-operate – and having the skills to do so is crucial to our success: those informal “people” skills which might not appear in the job description are necessary to help us build our reputation.

Sennett believed that despite cities being full of difference, we are living in more and more homogenised societies, and rarely mix with those from different races, religions or classes. We are segregating ourselves.

Whilst I can see some aspects of this, I do not believe it is new: surely society was much more homogenous one hundred or two hundred years ago? There are many more opportunities to mix in today’s multicultural society: it might be easier not, but the opportunities are still there.

Sennett had some interesting things to say about the Occupy movement – he has taken an active interest in the movement in the USA, and it seems to fit his model of dialogic, subjunctive, empathetic behaviour. Politicians of all flavours – the dialectics supreme – literally don’t get it: non-hierachical, self-organising, learning, the Occupy movement is about experiences rather than demands, and growing from the shared experience.

Much of what Sennett had to say resonated – particularly stemming from conversations at Tuttle and the C4CC, as well as institutions like the RSA itself creating space for discussion – but the very existence of these fora actually weakens Sennett’s thesis.

Thoughts on the RSA’s “Jobs Summit”

A couple of weeks ago I went to the RSA’s “jobs summit” (audio of all sessions available). It was a fascinating day: over three sessions, a variety of the great and the good – a couple of politicians (one Labour – David Miliband – and one Tory – David Willetts), a variety of economists (Diana Coyle, John Kay, Paul Johnson and several others; Vicky Price was co-chair), a handful of business people (Luke Johnson was another chair) and so on gathered to expound their views on the current crisis in the jobs market and what should be done about it.

Most of the speakers focussed on how to get the increasing number of unemployed back to work – through increasing or decreasing public spending, improving education, promoting entrepreneurship, innovation and collaboration, and so on.

DSCN3051 v2

David Miliband at the RSA

But I left the event thinking that they’d really been addressing the wrong issues.

The most interesting discussions came from Dave Coplin, who works in “envisioning” at Microsoft, David Smith, and Paul Gregg.

Coplin – perhaps surprisingly – argued that technology is (or should be) irrelevant: it is just a tool, pervasive as it may be, that will allow us to do the jobs we do. The point here is that we need to be technologically literate: technology might be invisible, but it stills needs to be designed, built and understood. Clearly increasing use of technology may help improve productivity and enable new, dynamic ways of working, and ensuring people are technologically literate will may people better fitted to the workplace (whatever form that might be).

Paul Gregg, who has been working on youth unemployment with the elder Miliband [pdf], was remarkably sanguine: he reckoned that the UK had been very successful at creating jobs over the last few years and that there were no structural problems in UK employment patterns. Employment had been quite resilient in the face of the extended recession. What was worrying was the graininess of unemployment: localised concentration of unemployment, and more importantly, long-term unemployment, specifically among the young. His solution was – erm – the urgent need to create new jobs.

David Smith was perhaps the most optimistic. He reckoned that demographic factors – the growth of the middle class in China and India, for instance – meant that there were lots of opportunities. Technology would mean that there were new jobs – he imagined body-part engineers, vertical farmers, waste-data handlers, and virtual lawyers – and of course things we can’t even imagine yet. The future of jobs, he felt, relied on creativity, innovation, and being flexible: when can’t teach people to do jobs that we can’t even conceive yet, be we can teach people to be adaptable, resilient and open to change.

(I’m not so sure that these are actually new jobs: if you think about the growth of jobs in the last thirty years, the new jobs – like software engineer or call centre worker – are actually doing things that were done before, but using new technology – thirty years ago, companies had people interacting with customers in shops and offices on the High Street, now they do it over the phone, in a call centre; but what they do is intrinsically the same.)

So why did I think they were asking the wrong questions?

Well, aside from Coplin and Smith, there was little examination of what work itself might be like – changing work patterns (increase possibilities from freelancing, portfolio careers, multiple jobs, home-working and so on). The world of work could be very different, whatever jobs we are doing, and this could have huge implications.

Whilst many speakers said that there may be an increased polarisation between highly skilled and unskilled workers, with many jobs deskilled – a process which has been going on for decades if not centuries – there was no discussion about what this might mean for society. Again, the changes on society and how we live our lives could be considerable.

But fundamentally I was uneasy because speaker after speaker seemed to think that, once out of recession, it would be back to business as usual. There seemed to be no consideration that maybe the game had changed – that the “global financial crisis” might actually come to prove that the 20th century model of capitalism changed.

Aside from increasing productivity from technological advance, at some point economic growth will stop: there is only one world to go around. Concentrating on doing more of the same – which got us into this mess – really didn’t seem to make sense to me: so consideration of alternatives – a bit of economic imagination required, perhaps – would have made for an interesting – creative! innovative! discussion…