Where the money is…

Mathematical finance as an accessory to crime

Not long after I finished my PhD in probability theory, a significant fraction of the field was devoured by the financial mathematics moloch. Particularly in Europe, probability theory positions disappeared, to be replaced by openings in financial mathematics, which either went unfilled or cycled among a very few senior researchers and a few quick-change opportunists (and, gradually, their fledgeling academic progeny).

Everyone felt they had to get in on the action, and of course there was a certain amount of positive feedback. When many jobs chase few graduates, it generates huge demand among students for training in such a demonstrably burgeoning field. Obviously, the academic feedback was limited by the fact that most of the eager young ‘uns were seeking employment in banks, not in academia — but the banks were hiring as well. Anyway, just about 10 years ago, a Dutch colleague asked me if I might be interested in joining his own institute’s planned financial mathematics group, for which they were proposing to create TEN new positions. My reply was that finance did not interest me as a topic of research, but I added that there was something unseemly — bordering on unethical — in mathematicians’ headlong chase after banking lucre. The current generation of mathematicians is the trustee of a vast and powerful system of analysis, whose creators were supported, honoured, and financed by public institutions. What is it but a crime, when we abscond with the fruits of this scholarship, and sell it off (cheaply) to banks, who will use it to extract billions of dollars from financial markets? Continue reading “Where the money is…”

An Omnibus named Perdition

christian_bus Atheist-Bus

The famous atheist buses have come to Oxford. What do they mean — other than that the redoubtable Richard Dawkins has found a new venue for self-promotion? I have already commented on the peculiar place — or, at least, what seems peculiar to someone who has generally lived in basically secular, non-theocratic countries — of religion in the public sphere of the UK, which appears to outweigh by far its importance in the private sphere (but maybe that’s just Oxford). It’s hardly a surprise, then, that the Anglican atheists would crave public acknowledgement of their private obsessions. The public forum par excellence is the public bus. The Christians are already there, and the atheists now have their gospel plastered on the side, saying “There’s probably no god. Now stop worrying and enjoy your life.” (Or is it “no God”? Hard to say, given the typography…) For those craving more detail, there is a url for Dawkins’s website. (Which, interestingly, when I checked it just now, featured a large photograph of the man himself, next to the slogan “The Enemies of Reason”. He seems to be selling DVDs, which perhaps reveal whether he is numbered among the enemies, or the enemies of the enemies. I’ve heard he once had ambitions to be a scientist, which explains a lot, when you think about it.) Continue reading “An Omnibus named Perdition”

In praise of the National Health Scapegoat

All over the world babies are babies, and birth is birth, but having a baby in Oxford is certainly quite a different experience than having a baby in California. The comparison is mostly favourable to Oxford, in our experience. The prime directive of the NHS (which recently celebrated its 60th anniversary) is borrowed from Douglas Adams: Don’t Panic.

The NHS is a great success by any definition. When you factor in the constitutional niggardliness of the British taxpayers and Her Majesty’s government — leading the UK to spend per capita on healthcare substantially less than half what the US spends, and much less than any major industrialised country except Japan — it seems a veritable miracle of efficient socialism. Whereas health research in the US is dominated by the profit motive, producing marginally improved drugs at breathtakingly higher prices*, the NHS has a brilliant record of pioneering cost-effective healthcare solutions, which may be individually trivial, even slightly absurd, but which together add up to systematic and measurable improvements in public health. (For example, this scheme to prevent complications due to chronic lung disease by providing patients with automated telephone warnings of impending cold snaps. Or something as simple as reducing infections by requiring doctors and nurses to wear short sleeves.) Continue reading “In praise of the National Health Scapegoat”

National identity theft

“Now a new king arose over Egypt… He said to his people, “Look, the Israelite people are more numerous and more powerful than we. Come, let us deal shrewdly with them, or they will increase… Therefore they set taskmasters over them to oppress them with forced labour. They built cities… for Pharaoh. But the more they were oppressed, the more they multiplied and spread, so that the Egyptians came to dread the Israelites.” (Exodus 1:8-12)

These words, central to our recent Passover celebration, came to mind while I was thinking about the British immigration policies. I can’t figure out whether the UK is the most xenophobic country I’ve ever lived in, or whether it just acts like it. On the one hand, the UK has a well-deserved reputation as a sanctuary for the persecuted and would-be persecutors temporarily out of office. On the other hand, UK politicians, who (one presumes) know better, seem to cheer themselves up when they’re feeling blue by attacking immigrants, either directly or (more commonly) by insinuation. The same is true for pillars of society like the BBC. Immigrants are corroding the fabric of society, hence the need for ever-mounting restrictions. They are unleashing a crime wave on peace-loving Britons (at about the same rate per capita as the native hoodlums, but at least you understand what a British thug is screaming while he kicks your head in, or at least, you could if he weren’t so drunk). (Who trusts pointy-headed statistics anyway?) And, worst of all, after they’ve sneaked in here with their legal chicanery, following their perverse urges to clean our toilets and mop up bodily fluids in NHS hospitals, they’re breeding. That’s right, the same Polish nurses who are keeping the NHS maternity wards from dissolving into a mass of MAR, are now bringing those wards to the point of collapse by having babies themselves.* And there’s nothing we can do about it! Or so one would have thought…
Continue reading “National identity theft”

The agony and the equity

There was a time when the British, like their American and Canadian counterparts, believed in promoting equality. Now, all anyone cares about is equity. Housing equity. The UK, like the US, is entirely in the grip of the house-price inflationists. One of the most extreme examples is a recent BBC report, which reads like an investigation of satanic cults and their strange and twisted morality, but is actually about young workers who have not been able to afford to buy their own homes, and who, deep in their poverty-depraved hearts, wish secretly for… a decline in housing prices. Horreur! One “frustrated young professional” is quoted saying “I can’t wait for the crash. Bring it on… People talk about the crisis in the property market. But the real crisis is that so many people can’t afford a home of their own.” Terribly immature, the article suggests, as it goes on to quote a more mature voice, a 29-year-old teacher who “is old enough to remember the repossessions and negative equity that followed the crash in the early 1990s.” Even this otherwise reasonable person is being driven to vile wishes for a housing Armegeddon. “‘Morally, I feel bad about wanting it because I know people will end up on the street,’ she says. But unable to find anywhere affordable on her £30,000-a-year wage packet, she admits that doom-and-gloom headlines are giving her hope.”

Continue reading “The agony and the equity”

The established church

One of the most seemingly archaic features of modern Britain — and the one that outsiders may be least prepared for — is the “established church”.  Formal secularism takes many forms, in the US, Canada, France, Turkey; but one does get used to thinking of religion as no proper business of the state. Not in the UK, where the Queen is Defender of the Faith, and the Prime Minister had to wait until he had left office before he could comfortably change his religious affiliation. The highest position in society that anyone can aspire to who does not happen to be the first-born of the House of Saxe-Coburg and Gotha — I mean, the House of Windsor — is to marry the first-born of this famous princely family, and a Catholic maiden, however virginal, may not aspire to this august status. (My impression is that current law currently restricts the spousal position to members of one sex as well, and the constitutional status of a same-sex civil partner of the heir to the throne is, so far as I can tell, still unresolved.) Apparently Jews, Muslims, and Wiccans are not formally excluded, though the tabloid press might raise a fuss if the next queen hosted witches’ sabbaths on a regular basis at Buckingham Palace. Balmoral might be another matter…

Punch cartoon: Shows the struggle between Anglicans and Dissenters for control over education, while the needs of the children are ignored.

The most practical consequence of this establishment is that a large fraction of the state-funded schools (called “maintained schools”) are actually subsidiaries of the Church of England. The state provides most of the money, and the church gets impressionable children to proselytise at will. In some parts of the country these schools are selective and people get themselves and/or their children baptised to get them in; in Oxford, the C of E snapped up most of the good school sites long ago, and we’d have to travel far from home to find a non-church primary school. Not that that would do any good, given that daily Christian worship is required by law in all state schools. (To be precise, the communal worship must be “mainly of a broadly Christian character”, “which accord a special status to Jesus Christ”) There are literally no secular state-funded schools in the UK. You can worship whatever you want, as long as you do it in school, rather than in, say, a church or other such inappropriate institution.

Data and security

Security in the UK

Crime statistics in the UK are a mixed lot. On the one hand, the overall levels of crime victimisation are fairly similar to those in the US, Canada, and Western Europe, a bit on the high end overall. Homicide rates, on the other hand, despite recent well-publicised drops in the US, are still drastically lower (by a factor of about 3) in the UK and most of Western Europe (and Canada). Presumably this is attributable, at least in part, to the smaller number of guns. Gun murders in the UK are the lowest in the world, as a proportion of population, about a factor of 20 lower than in the US. (This does not directly contradict the “only outlaws will have guns” NRA rhetoric, if we generalise from a recent report in the NY Times, explaining that the classic random-mugging-murder is now extremely rare in New York, leaving mainly revenge killings and turf wars between drug gangs, and kinds of intimate crimes that are the meat of crime fiction. Gun bans, presumbly, have relatively little impact on the former — and the RMMs — but quite a lot on the jealous spouse and Double Indemnity types of crimes.)

While getting tough on lawbreakers, the hapless government of Gordon Brown is now having to answer for its own role in aiding and abetting identity theft. Supposedly a “junior official” of Customs and Revenue copied the entire database of families receiving the state Child Benefit (7.5 million families, comprising about 25 million individuals), including names, addresses onto compact disks, and sent them by unrecorded internal post to the National Audit Office. They did not turn up at the other end. As they say, it’s an ill will indeed that blows no good. Until this blunder sprawled over all the newspaper headlines, I had no idea that there was a Child Benefit, a monthly payment to parents (or anyone else raising a child) worth about £80 a month for families with one child. (It’s funny that we got caught out on this, because we were irked to discover, shortly before we left Canada, that we’d missed out on applying for a similar benefit there. For some reason governments don’t go out of their way to inform new immigrants of these things.) Anyone moving to the UK should be aware of this: official information is available here. My understanding, though, is that it’s generally only available for Europeans (which I’m not, but the rest of the family are).

If you wanted to contrive a damaging political scandal, without anyone really getting hurt, it would be hard to better this one. All the ingredients are there: Incompetence, money, long-term uncertainty, vast number of potential victims, new technology (making everyone particularly uneasy), and, most important, children. Furthermore, there are reports that

  1. The Audit Office requested an anonymised version of the database, but C&R refused, claiming it would be too costly. (Oops.)
  2. C&R suggested the auditors come visit them to peek at the database. Too much trouble, they said. (Oops again.)

Why are they e-mailing CDs anyway? Anyone with even a tiny bit of technological literacy could have used SSH to transfer the files over the Internet, and saved them the price of a stamp.

The Chancellor of the Exchequer, Alastair Darling (I can’t escape the feeling that there are names you meet at the top levels in politics here that would simply provoke too many giggles in the US or Canada) whose head might be expected to roll, explained that it really wasn’t his fault. In an inversion of the Eichmann defense, he explained that he just makes the rules. “There are rules that mean you can’t download this info and stick it in the post… In asking ourselves what has gone wrong here the rules appear to have been breached with catastrophic results.” Sounds reasonable. It’s not his fault if someone doesn’t follow the rules. This reminds me a bit of the reaction of the day-care teacher in Berkeley who instructed me, after my then two-year-old daughter ran out of the school unnoticed (fortunately I was still right outside the building when she came out), “You need to tell her that she’s not allowed to do that.” She did not return to that daycare centre. Yes, the “junior official” ought not to have flouted the rules; but it should not be a matter of rules. The junior official should not have access to an extremely sensitive database, that he can download onto two CDs and send throught the mail. Once he can do that, he might just as well copy the database onto two other CDs and sell them to criminals. Who is to say that another junior official did not do that?

Of course, Mr Darling could reasonably protest that he only just took over the ministry a few months ago. The blame must really fall to his predecessor in the office, who put the database system into place over the past year. It’s a hard argument to make, though, since his predecessor is now the prime minister.