Who built that? ctd.

The Aeschylean Romney

I commented recently on the Republican obsession with the autogenesis of business founders. It is both insulting and un-American, they say, to suggest that the founder of a business did not actually build that business entirely by himself. And just recently it occurred to me that there is a significant analogy between this belief and the ancient theory of paternity that held sway in Europe for many centuries.

In Aeschylus’s Furies (last part of the Oresteia), Orestes stands accused of murdering his mother, something that he factually did, in revenge for her murdering his father (her husband). He defends himself by arguing that he has shed no “kindred blood”, that only his father is related by blood. The Furies turn to Apollo, outraged. He agrees with Orestes:

Not the true parent is the woman’s womb
That bears the child; she doth but nurse the seed
New-sown: the male is parent; she for him,
As stranger for a stranger, hoards the germ
Of life;

As in the Republican model you have a superficial, directly observable truth (women build babies; workers build buildings and enterprises) — if it’s a company that makes automobiles, every piece was connected to every other piece in every automobile by a worker, not by a “founder”, that’s just something you can see with your eyes — confronted by a determination to submerge this tangible truth in a theoretical framework that makes the father or the executive not just a “half-worker” (to quote Posthumus Leonatus in Cymbelline), but the only worker. In Apollo’s framing, the female is a passive vessel, flowerpot in which the male plants his seed. And in the Republican economy, the worker is simply a raw material, shaped by the vision of a job-creator.

The Aeschylean vision was formalised in the “one-seed theory” of Aristotle, and dominated medical thinking in Europe through the Middle Ages. This opens up a whole new realm of philosophical inquiry, updating classical theological and philosophical conundra for modern business. Do entrepreneurs have navels? Could Bill Gates write a cheque so large that a computer running Microsoft Windows can’t process it? If a stock market collapses in off-hours trading, does it make a crash? How many angels can dance on the margin of a call option?

On a side-note, I was impressed in 2008 with Obama’s application of Bob the Builder’s anthem:

Bob the Builder
Can we fix it?
Bob the Builder
Yes we can!

Perhaps the Republicans are subtly responding in kind: Maybe Bob the Builder can fix it, but only Mitt the MBA can build something new.

Who built that?

Obama vs. Romney vs. Brecht smackdown


I’ve avoided writing comments on US politics, mostly, but here’s something that really needs another perspective. Mitt Romney has seized upon a comment of Barack Obama in a campaign speech:

If you are successful somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet, so then all the companies could make money off the Internet. The point is, is that, when we succeed, we succeed because of our individual initiative, but also because we do things together.

Romney mocks this statement as anti-capitalist, anti-entrepreneur, which to a certain extent it is; at least, it is opposed to the maximalist Führerprinzip of heroic capitalism. This is how Romney puts it:

To say that Steve Jobs didn’t build Apple, that Henry Ford didn’t build Ford Motor, that Papa John didn’t build Papa John pizza, that Ray Kroc didn’t build McDonald’s, that Bill Gates didn’t build Microsoft … to say something like that is not just foolishness, it’s insulting to every entrepreneur, every innovator in America, and it’s wrong.

Well, sorry if they’re insulted, but they seem to have a pretty thin skin. The left has been defending Obama by saying this is twisting his words out of context (which it is), and that Obama LOVES entrepreneurs, which is also probably true. But the fact that they are fighting on these terms just shows how low the left has sunk, both intellectually and spiritually. There was a time when the left could have said, the entrepreneurs and business leaders certainly have their roles to play, but they are not the only ones making a contribution to the country, or to building a business. (Well, there were also those on the left saying that the entrepreneurs and business leaders are thieves and scoundrels, who will be the first with their backs up against the wall when the revolution comes.)
As so often, the quintessential formulation of this apparently difficult political concept comes from Bertolt Brecht: “Who built the seven-gated Thebes/ In the books I find only the names of kings./Did the kings lug the massive stones?/…Caesar smashed the Gauls./ Didn’t he at least have a cook?” So the proper response to Romney would be, “Steve Jobs built Apple. By himself? Didn’t he at least have a cook?” Continue reading “Who built that?”

Evasion and avoidance

Following up on my recent comments on piracy, recent news reports have forced me to learn the subtle difference between “tax evasion” and “tax avoidance”. Apparently “evasion” is when you don’t pay the taxes you’re required by law. “Avoidance” is when you don’t pay the taxes you’re required by law, but structure your property or income in such a way that you don’t pay (much) tax. It sounds like a pretty clear distinction, but the application can be dubious.

The Times recently reported on a widely used scheme that is so banal, so transparent, that one can hardly see it as representing anything other than a fig leaf to cover the authorities’ wish not to to tax the wealthy and powerful. The way it works is, extremely wealthy individual X doesn’t like his salary from company Y being taxed by government G, as though he were just an ordinary citizen. So he comes to an agreement with Y that they will stop paying him a salary, and instead pay an offshore shell company K2 for his services. So far so good. Y now pays no tax, because he has no income, but for obvious reasons this is not entirely satisfactory. Poor Y, who is now starving in a garret with no visible means of support, appeals to the good will of K2 (which has made such a great profit from Y’s tax aversion) for a loan. They’re a soft touch, and they loan him essentially all the money they’ve earned on his case, telling him, “Pay us back when you can.” He never pays it back, but they never lose hope. Loans are not taxable, of course, unless they are written off. Continue reading “Evasion and avoidance”


500px-Flag_of_Edward_England.svg Piratenlogo

Outside of Germany, no one seems to have noticed the extraordinary efflorescence of a new party, Die Piraten, the Pirate Party. (Also, no one seems to have noticed that the German word PARTEI — political party — is an anagram of PIRATE.) It’s an international movement, of course, and I suppose it started in Sweden, with links to the Pirate Bay file-sharing site. As with many such political movements — fascism and the Green movement are just two examples — Germany has proved a particularly fertile ground, and the most recent state elections in Nordrhein-Westfalen found the Pirates winning 7.8% of the votes, nearly as many as the liberal FDP. Interestingly, that vote has drawn quite a bit of attention in the foreign press for its undermining the ruling coalition, but no one outside of Germany is talking about the Pirates.

There is a long tradition, going back to Cicero — and continuing through Gilbert and Sullivan — of invoking pirates as an ironic commentary on rapacious rulers, extended to rapacious capitalists by Bertolt Brecht and others. The association of piracy with illegal copying of artistic works goes back to the 17th century in England, as I learned from Adrian Johns’s magisterial book Piracy rights, where I also learned that the earliest designation of copying as piracy did not describe neglect of an author’s right to earn a living from his work (which right was nonexistent), but rather neglect of the king’s right to censor. A pirate was not someone who stole a poor scribbler’s hard-fought text, but rather one who arrogated to himself permission to publish without royal license. More recently, pirate radio expressed the opposition between piracy and censorship.

I find myself enormously encouraged by this movement. Their stated goals are ones I generally support: reform of intellectual property laws, data protection, civil rights and government transparency. But there’s not enough there to really make up a political program. I see it in generational terms. It may not be true that all property is theft, but it certainly seems that those who got into the world before us have gone out of their way to make sure that everything that exists has been carved up and allocated to owners, up to and including the land, the sea, their ideas, their music, and their genetic code.

German election poster
Greens: Every power needs something to drive it
Pirates: Strengthen education. Understand Physics.

Here’s an election campaign poster of the Piraten in NRW. The Greens on top with one of their solemn eco posters: Windmills and the slogan “Every source of power needs a driving force” (approximately), and then “Green makes the difference.” What does it mean? Damned if I know, but it sounds green!
Below it the Piraten put a graphically much cruder retort to this vaguely pious blather:
“Strengthen education. Understand physics.
You’d rather vote for the Pirates.”

Boosting high finance

Some political commentators have suggested that the recent near-meltdown of JP Morgan Chase because of inability to cover its gambling debts might prove uncomfortable for Mitt Romney, who seeks the repeal of the Dodd-Frank law, that would likely have forbidden the gambles that the bank lost all the money with. How unimaginative! Surely, this is just one more example of how the Democrats, by attempting to rein in dangerous practices in the finance industry, are simply rewarding their Wall Street paymasters, while Romney is the lonely voice of equity (private), allowing the fat cats to suffer the consequences of their malfeasance.

I’ve been increasingly interested in the outsized role played by finance in the running of the modern world, and the role of mathematicians in intellectually laundering the financiers’ money. The most interesting (and chilling) book I’ve read in quite a while is Nicholas Shaxson’s Treasure Islands, a thorough investigation of the scope and method, nearly incomprehensible to outsiders, of tax havens and the global network of secrecy jurisdictions. Much of the otherwise impenetrable nature of British politics makes vastly more sense when one understands that the British Empire did not disappear, but was transformed into a network of shell countries centred on the City of London, whose vast financial power makes the paltry debates at Westminster nearly irrelevant (when the interests of the bankers and their clients are affected). Among the more minor but astonishing revelations is that the City of London — effectively, the representative of British finance on Earth — has its own representative in the House of Commons, the “City remembrancer”, a lobbyist for finance who is officially seated behind the Speaker’s chair (and has been since 1571). The City itself is exempt from many acts of Parliament and is outside the purview of the elected mayor of London, and its own self-government, the Corporation of the City of London, is selected almost entirely by the representatives of large banks.

And now the US seems on the verge of electing as president, not a Manchurian candidate, but a Caymans candidate, someone who is heart and soul part of of the international plutocracy, with his own funds stashed in the Cayman Islands and Switzerland. I am genuinely disturbed by this prospect.

My own comments on mathematical finance may be found here.

Universities and charity


Here’s a weird, but hardly novel, controversy: Charity tax row: Oxbridge joins revolt.

The Oxford and Cambridge vice-chancellors wrote privately to Chancellor George Osborne saying his plans risked undermining the culture of university philanthropy. UK universities, which raised some £560m from charitable gifts last year, want him to rethink. Ministers want to stop tax avoidance. Mr Osborne says he is shocked by thescale of legal tax avoidance by multi-millionaires. Under current rules, higher-rate taxpayers can donate unlimited amounts of money to charity and offset it against their tax bill to effectively bring the amount of tax they pay down, sometimes to zero. But from 2013, uncapped tax reliefs – including those on charitable donations – are to be capped at £50,000 or 25% of a person’s income, whichever is higher… An Oxford University spokeswoman said that the government’s own policy emphasised the role of private and philanthropic investment, rather than the public purse. “A step that penalises the government’s own approach seems ill-considered.”

Hmmm. How about this alternative statement:

The university’s own justification depends on its promoting self-consistent argument, rather than specious self-serving sophistry. “An argument that contradicts the university’s own raison d’etre seems ill-considered.”

Continue reading “Universities and charity”

Maximum utility

Back when I first arrived in Oxford I remarked on the peculiar repurposing of utility bills as the indispensable proof of address. That is, the banks were enjoined by law from opening an account without proof of address (except Lloyds, which didn’t care for some reason, and so won our custom and our loyalty — until they lost the latter by refusing to consider us for a mortgage on account of my irresponsible decision to be a foreigner), and they seemed to consider proof of address to be equivalent to providing a utility bill. This seems strange for many reasons. First, utility companies are private entities that have designed their bills for, well, billing purposes, not as secure identity cards. The security measures on my water bill are pretty negligible. They have made no effort to check whether the person residing at this address is the same person who is paying the bill, or that either of them has the name on their records. Second, not every legitimate resident has utility bills. In particular, people who have just moved house don’t have utility bills for quite some time.

This requirement is usually attributed to a money-laundering statute. Is there a money-laundering scam that depends on faking a residential address? By criminals who are incapable of faking the address on a water bill? But who would be able to fake a lease, letter from an employer, or any other means of proving identity?
Continue reading “Maximum utility”

The revolution will not be televised devouring its own children


A perennial topic of public discussion ever since my childhood has been the sellout our not of the formerly revolutionary former youth of the Baby Boom. The false premise here is that they were the sellers rather than the buyers. While there are great acts of civil courage and genius (political, scientific, and artistic) revealed individually in that generation, as in every generation, when seen as a collective these people’s actions are indistinguishable from the script one would have expected if they had been forged into a steel-sinewed generational army equipped to plunder the past and the future. First, they sucked resources out of their parents while devising a cult of youth that absolved them of any need to respond with ordinary human gratitude. Then they determined to ensure that their own children would never do the same to them, by stitching up the tax system and the pensions to ensure that public resources would be bled dry by the time their successors tried to make a claim on them. Continue reading “The revolution will not be televised devouring its own children”

Greek contagion

Since yesterday, news reports are full of comments like this:
Many economists fear that if Greece exits the euro, it could lead to financial contagion, as investors and ordinary bank depositors in other eurozone countries may fear that their own government will follow suit.

What does this mean? Are the Spanish looking to the Greeks as a model? That would be really weird. Esos griegos tenían un gran éxito con su incumplimiento de las deudasHagámos lo mismo. Or is it a matter of queueing up? Greece has first dibs on default, and Spain just has to wait its turn. Or is this setting up a resonance in a Sheldrakian morphic field of default patterns? Perhaps we are witnessing the final consummation of the marriage of 21st century mathematics and 20th century pseudoscience that finance has been tending toward for the past three decades (at least).

Surely the impact on investors will depend in part on the effects seen from a Greek euro withdrawal. At the very least If we think back to recent history, presumably any reasonable person would have thought, after the Lehman Brothers shit-storm, that the US financial authorities would be less likely to allow another similar bankruptcy to proceed. So, if Greece leaves the euro in a ball of flames, Spain will be unlikely to see it as a model. And if Greece’s exit from the euro isn’t so terrible then… maybe it’s just not so terrible.

Consent of the governed

Speaking at the recent Conservative party conference, a government minister has said that the mass arrests and prison sentences for decent citizens who chose to rob shops and set buildings ablaze in London and other cities during a recent wave of looting, had brought the law into disrepute.

Our laws against arson were introduced centuries ago, when a typical London building was built of wood. There have been huge advances in fire-fighting technology since then. Our blanket ban on arson has been discredited, because it failed to keep up with these changes. And what about “vandalism”? Should the law really be fixated on the practices of wandering bands of hairy Germanic tribesmen? Can anyone genuinely say he thinks our laws against burglary are fit for a 21st century economy? By allowing a portion of the shops’ overpriced merchandise go up in flames, and another portion to the informal vending sector, where it is substantially marked down, we bring thousands of decent firebugs and thrifty shoppers back within the law, restoring the legitimacy of the penal system, improving productivity and delivering hundreds of millions of pounds of stimulus that the economy sorely needs.

No, sorry, I got that wrong. The correct quote is:

The 70mph motorway speed limit has become “discredited” and resulted in millions of motorists breaking the law, Transport Secretary Philip Hammond said today as he confirmed plans to consult on allowing it to rise to 80mph.

Mr Hammond told the Conservative Party conference the move would “restore the legitimacy” of the system and benefit the economy by “hundreds of millions of pounds”.

He said: “The limit that was introduced way back in 1965 – when the typical family car was a Ford Anglia.”

Mr Hammond said he owned an Anglia, as did Baroness Thatcher when she became an MP, but added: “Things have changed quite a bit since then. There have been huge advances in car technology, road deaths have been reduced by three-quarters.

“Meanwhile, the 70mph limit has been discredited because it failed to keep up with these changes – with almost half of all motorists exceeding it, bringing the law into disrepute.

“So I will consult on increasing the limit on motorways to 80 mph, bringing millions of decent motorists back within the law, restoring the legitimacy of the speed limit system, speeding up journey times, improving productivity and delivering hundreds of millions ofpounds of net economic benefits.”

We should start making a list. Laws that need to be ruthlessly enforced when they are disobeyed en masse: Arson, burglary, “theft by finding”, receiving stolen goods. Laws that need to be abolished when they are disobeyed en masse: Tax laws, speed limits. Hmmm. What’s the pattern? Prosperum ac felix scelus virtus vocatur. [Seneca. A successful and happy crime gets to be called virtue.]

Of course, Monty Python nailed it while I was still a toddler. In this case, the Mouse Sketch:

Make a thing illegal and it acquires a mystique. Look at arson – I mean, how many of us can honestly say that at one time or another he hasn’t set fire to some great public building? I know I have. The only way to bring the crime figures down is to reduce the number of offences.