Not So Foolish April

April turned out to be a whirlwind month rather than a showery one.  The month opened with a not-April-fool article in Banking Technology, co-written with my friend Bob McDowall and published promptly courtesy of my friend, editor David Bannister.  This article set the tone for a whole series of meetings and initiatives around blockchain technologies.

Building Bit – What’s A Poor Government To Do About AltCoins? Michael Mainelli and Bob McDowall 2014
Banking Technology, Informa plc (April 2014), pages 30-33.

Equally interesting though have been the numerous reactions to Z/Yen’s publication of Global FInancial Centres Index 15 showing London pipped for the top spot by New York City.

The Global Financial Centres Index 15 Mark Yeandle and others 2014
Long Finance & Qatar Financial Centre Authority (March 2014), 58 pages.

Nobody volunteered to write the foreword, so sadly I had to pen the following:

“London’s powerful wholesale financial markets, which leverage its strong brand, generate disproportionate benefits in jobs and exports.  London suffers when global financial news tarnishes that brand – London-IBOR, the London Whale, the foreign exchange scandal only now starting to bite, with rumours circulating about other index, benchmark, and commodities scandals. In fact, it seems increasingly apparent that authorities were aware of, yet tolerated, the LIBOR scandal well into 2012. If the regulators are unimpressive, they are certainly not inexpensive. Some claim that the majority of jobs created have been in compliance departments or compliance providers, accountants or actuaries or lawyers. A Middle Eastern businessman states the problem plainly, “though deals have become vastly more expensive, I don’t feel any safer.” “

It probably doesn’t get more encouraging to read a related snippet from IFC Economic Report which made it into our Gresham Symposium, “Saving Havens: Off Shore, Onshore, Midshore: International Financial Centres“:

“From January to June 2013, the UK media had headlines such as “Google, Amazon, Starbucks: The rise of ‘tax shaming’” (BBC), and “David Cameron: Tax avoiding foreign firms like Starbucks and Amazon lack ‘moral scruples’” (The Telegraph).  In late June 2013, Starbucks agreed to pay £10 million to the UK Treasury.  Given that Starbucks reportedly paid no tax in the previous four years, £8.6m in corporation tax in the UK over the previous 14 years, yet had sales in the UK of £400m per annum, this might sound like a victory over tax evasion.

At no point has any authority accused Starbucks of not complying with tax law.  Having followed the tax code correctly, Starbucks reached annual agreements with HM Revenue & Customs that little or no corporation tax was payable.  The majority of people seem to have no problem with Starbucks’ payment or feel an urgent need to reform tax laws.  However, as an accountant I wonder how the payment should be booked.  Certainly not to marketing or advertising expenses?  Possibly to tax?  Tax liabilities have always been a complicated area, but in this case is the payment:

  • a mistake, an adjustment to historic tax liabilities, or a retroactive tax?
  • a bonus payment or donation to HM Revenue & Customs?
  • a donation or bribe paid to the UK coalition government, or perhaps David Cameron’s Conservative Party?
  • a shakedown or protection racket payment to a corrupt government?

Perhaps I might mischievously suggest that Starbucks be reported to the US authorities under The Foreign Corrupt Practices Act of 1977 which “was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.” [US Department of Justice website]  The rules on international corporate taxation are close to unworkable, though I wonder why more people do not question the theoretical basis for taxing corporations, which is at best dubious.” 

Socially, April was much more upbeat.  There was the whirlwind contrast of greeting the President of Ireland, Michael Higgins, and the Taoiseach, Enda Kenny, at Mansion House and Guildhall, with the celebrations of St George’s Day.  It was quite emotional hearing the Irish National Anthem, “Amhrán na bhFiann”, being played in the Guildhall in honour on the evening of 9 April.  Something I never expected to hear three decades ago, yet also a sound that still discomfits those who lost loved ones during the Troubles.  The Lord Mayor’s excellent speech on the night says it all.  

Increasingly emotional too were this year’s celebrations in honour of St George’s Day, 23 April.  Three decades ago it was not a day one heard much about.  Today, there isn’t a patriotic pub not festooned with flags.  I attended two notable events.  Courtesy of Dudley Edmunds, I was able to hear a wonderful talk from the last of the dambusters, Johnny Johnson.  Bright as a button and with a deft touch to his talk, Johnny made you realise what a group of determined young men could achieve, and still retain their humanity, as he related the story of 617 Squadron’s May 1943 raid.

 HAC

The second event was the St George’s Dinner at the Honorable Artillery Company which I attended for the first time in an ex officio Aldermanic capacity in Old Bailey velvets.  The female officer toasting the guests reminded the guest of honour, the US ambassador, that the Company and the USA had had some low and high points in their relationship, such as burning the White House in 1814, though she left us a bit misdirected about high and low.  We concluded the dinner with three rounds singing Rule Brittania, Land of Hope and Glory, and Jerusalem along with the band and accompanied by the American ambassador, which wound up with us standing on the tables in formal wear and waving our napkins.  The photo above was taken as I left about midnight, outsung and outdrunk by men and women who’d entered military service in the 1940’s and 1950’s.

Safer Cities – open data, cyber insurance, new currencies

Safer Cities – People, Security, Technology
Alderman Professor Michael Mainelli
CityForum – http://www.cityforum.co.uk/events.asp?eventID=10037
Monday, 10 March 2014
One Whitehall Place, London SW1

As a student of international economics, I’ve been asked to provide some comments today on Safer Cities. In 1800, only three percent of the global population lived in cities and only one city, London, had more than a million people. In 2008 more than 50% of the world lived in cities and there were well over 300 cities with a population over one million people. Despite working with many cities on things such as the Global Financial Centres Index or futures work on drone delivery strategies or new currencies, I’ve never claimed to be a City guru. However, you don’t need a guru – the question “what makes a great economic city” has a simple one word answer – Trade.

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Cities reduce the degrees of separation. People come to cities to trade. What makes cities strong is the free flow of goods, capital, services, labour, and intellectual property. Gross World Product is about $50 trillion, and trade is over $25 trillion. In fact, 25% to 40% of trade is non-monetary, so global trade is not far off Global World Product, though this is a bit of an apples and oranges comparison. Now, can you name my economic hero of the 20th century? He transformed the UK road network, destroyed the northern ports, and devastated east London. He was of Scottish descent. Several cities such as Oakland, California or Tanjung Pelepas in Malaysia sprang from nowhere due to him. His innovation created London’s Tilbury port. He is of course Malcom McLean, father of the shipping container.

The biggest gains for peoples of the world have been through free trade. When major eastern economies embraced free trade, almost two billion people were lifted out of poverty. The biggest innovation of the 20th century that contributed to reducing poverty was probably also the sea container.

So let’s look at security. One of my favourite Benjamin Franklin quotes is: “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety”. Franklin meant, of course, that even seemingly minor or transient curbs on freedom should not be tolerated. American representative democracy required a compact with markets that did give up some essential liberties to regulators in order to purchase a little temporary safety. Madison notes in The Federalist Papers, “The regulation of commerce, it is true, is a new power; but that seems to be an addition which few oppose, and from which no apprehensions are entertained.” I think Madison underestimated the apprehensions.

We have to get the relationship between commerce and our security services right. So what are my thoughts on safer cities? One of my big cyber security fears is hacking those same sea container stacking systems on the docks and randomly shuffling them. We might slowly starve and riot, unable to get at the scrambled stacks with food inside. I want to talk about non-physical trade, so I’ll point out that the biggest shift in trade today also involves containerisation – the data packets transmitted and swapped over the internet. I shall provide three points for discussion on weightless, online trading – open data, cyber insurance, and the changing nature of money.

First, I wonder, with the Lord Mayor Alderman Fiona Woolf CBE, if how we gather and exchange data might define a city. Perhaps, our new city wall is a data wall. Our new reservoir is our data store. Perhaps on entry to a city we contract to provide movement information from our smart phones to help transport planning – a mobile app passport. If I get planning permission to build a block of flats, must I provide ways of sharing energy, occupancy, or waste information with the city, which it anonymises, stores, and then shares more widely. I can link up with neighbours to consider new power or water treatment plants because I have the data on local consumers, their needs, their usage patterns. There are liberty and security issues, certainly, but more open data could transform London and other cities. We’ve seen this locally in minor ways with transport apps. We’ve seen this globally in major ways with GPS or weather data. Perhaps we should be freer with Land Registry data. Perhaps utilities should have sharing obligations in exchange for their quasi-monopolies. Perhaps cities should have open source blockchains of recorded trades within their walls. A safer, wealth producing City has to reset a number of boundaries, to build new city walls around reservoirs of data, keeping out the highwaymen of the internet. I might go further and muse on how fundamental reform of patents and copyright might help trade in data by lowering trade conflict, but due to time shall move on.

Second, we have to make data trade and cyber issues commercially ‘normal’. The state of commercial normalcy for most risks, think fire, theft, flood, for a business is that – after a business has done all the right things – it can then buy insurance. Why don’t we have a Cyber Re (or extend the existing Pool Re for terrorism insurance) where government becomes a partner to the insurance industry funding the extreme losses of cyber-crime, learning how to talk to industry in commercial terms? With reinsurance, normal insurers write cyber policies which help spread information and best practice. A Cyber Re helps promote a stronger ICT security industry and a more promising national location for ICT business. Cyber Re would provide proof that ICT security technology works, in financial terms. Normalcy is more than just cyber. I’d include working visas & immigration, regulation, and taxation in commercial normalcy. Given the number of financial scandals over the internet, such as FX, the regulators are unintelligent but they are not inexpensive. Retroactive or ‘shakedown’ taxation is equally reprehensible. Perhaps I might mischievously suggest that Starbucks be reported to the US authorities for paying £20 million to HMRC recently. The Foreign Corrupt Practices Act of 1977 “was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business.” [US Department of Justice website] Reducing trade frictions generated by immigration, regulation, and taxation, which are security-related, e.g. Anti-Money Laundering, will help cities flourish economically. Security has a cost, but efficient security pays. But I’ll move on.

Third, money is traded online via data packets. And the nature of money is changing. Bitcoin has the headlines. Bitcoin’s essential innovation was a public blockchain, which eliminates the need for a central bank by making the entire network the record of transactions. From several possible choices of currency architecture, Bitcoin chose to set a maximum fixed supply of 21 million coins. This fixed supply means that Bitcoin is possibly best compared with gold. Gold is also an element with a fixed earthly supply. Imagine Bitcoin as a virtual element. We know what the supply is. We know where most of it is, and can mine a bit more. However, it is not money. It is a virtual element, weightless. Only a community can decide whether to use it to trade. So far, many of the allegations for or against Bitcoin focus on what type of community is perceived to be using it to trade debts – a Silk Road of illegal transactions, quixotic libertarians damning profligate governments, new age gold bugs, or hard-pressed traders in a tight credit environment.

Many people dismiss cryptocurrencies out of hand, forgetting that in times of economic turmoil and tight credit alternative currencies flourish. Well over 400 currencies sprang up in the USA in the 1930’s to fill credit gaps. The eighty year old Swiss WIR is a government-sanctioned trade currency still providing useful credit to a quarter of Swiss businesses counter-cyclically to the Swiss Franc. Bitcoin may fail, but it is already economically important. A quick insanity check – the five year old Bitcoin has a market capitalisation today of several billion dollars, albeit fluctuating wildly, with about the same market capitalisation as the two century old London Stock Exchange Group.

In summary, successful, safe cities are safer places to trade. We need to understand that data containerisation, the internet packet, is transforming them. We need to provide more smoothly swapped open data, normalise cyber risk, and embrace the innovation cryptocurrencies provide. Thank you.

Season’s Meetings – 2013

It would be difficult to cram in any more events between the parties.  Not only have we had the Z/Yen Christmas Party, my 27th annual boozy breakfast on Lady Daphne (beer courtesy of Fuller’s!), the annual Broad Street Ward Club luncheon, carol services at St Margaret Lothbury, and numerous other events, but work has been frenzied too.  Try some of these fascinating links for some variety, not even the half of it:

Then some amazing Financial Times coverage of a project we cooked up with Bob McDowall of Alderney over the summer:

but perhaps most noteworthy for me was the honour of presenting at this University of Sussex workshop for Onora O’Neill – http://www.sussex.ac.uk/philosophy/newsandevents/actingonprinciple – terrifying to be a business person presenting to philosophers, but Onora made it rewarding.  And that’s just bits of December, though a nice, closing for the year before heading away to Germany for Wolpertinger habitat preservation work – http://en.wikipedia.org/wiki/Wolpertinger.  So I’ll leave a stressful 2013 behind with the following picture of peace and The Shard in fog after a few beers on a cold morning at St Katharine’s Dock.  Prost Neujahr 2014.

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Key To The City

Watched Stephen Fry blend entertainment and reporting – “Key To The City” (of London) on ITVPlayer. Worked for me – https://www.itv.com/itvplayer/stephen-fry-s-key-to-the-city/series-1/episode-1-stephen-fry-s-key-to-the-city.  Nice to see a lot of people I know doing their part and proud of the City and their work.  While attitudes have come a long way from the depths of November 2011 (see Occupy’s Tent City University outside St Paul’s Cathedral photo below – and note The Price of Fish seminar), the City still needs more reforms.  We need to earn respect, not demand it.  This past week we’ve seen lows and highs, from probable scandals in the aluminium markets to Mansion House continuing to develop the City Values Forum.  Long Finance respects the intentions of Occupy but believes that gradual, evolutionary reform from within is better than revolutionary reform from without.  If you believe that too, get involved.

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Battle of the Quants

Working with Bartt Kellermann and Selvie Shaqiri to help bring their very successful US format here to the UK.  Very interesting session today discussing this brief title – “ From the Ephemeral Quant to the Eternal Coin: Short Term vs. Long Term Considerations when Allocating to Quantitative Based Strategies”.  Thankfully, some of our thoughts on Long Finance really rang a bell, and folks seemed to be interested in Asymmettric Gain-Loss Recognition, Performance Policy Bonds, Confidence Accounting, Irreversible Time, Unburnable Carbon, Internal Growth Rate as a key regulatory pension metric, and Volatility = Sustainability.  Wow.  Great crowd.

Eternal Coin Treadmill

Battle of the Quants

Working hard to get elected and already finding that the number of speaking engagements is climbing sharply.  I’m speaking next week at Battle of the Quants.  This is a very popular New York event format which is coming to London a second time.  I’ve been given a succinct title – ” From the Ephemeral Quant to the Eternal Coin: Short Term vs. Long Term Considerations when Allocating to Quantitative Based Strategies”.  We’ll see how well this audience takes to Long Finance‘s thoughts on the long term.

Coin

What’s In A Name?

This week’s ESMA & EBA report, “Principles for Benchmark-Setting Processes in the EU”, garnered headlines such as “EU plots to grab control of Libor from London”. Such sensationalism simultaneously leads to over-reaction and under-reaction. Libor is a known problem, but there are questions over other market indices for oil, steel, gold and other commodities. Surely five years into financial crises why shouldn’t the EU set out guidelines for robust indices upon which most markets depend? Yet I worry about state control and auditing of benchmarks. Some bankers claim they connived with regulators on Libor to look stronger than they were. Instead I would suggest a more ‘British’ approach – a published ISO or BSI standard on index governance and management, independently audited on quality, accuracy, timeliness and distribution in a competitive market. And the under-reaction? These financial reform proposals should be coming from London. If we’re losing our intellectual leadership perhaps we do deserve to lose the ‘L’ in Libor.

In CityAM 7 June 2013 – http://www.cityam.com/debate/should-london-be-concerned-about-eu-s-proposal-move-libor-oversight-paris

Why CO2 Will/Won’t Kill Us

I was intrigued with a thought about “when did CO2 atmospheric concentrations actually become directly harmful”, i.e. we’d really really have to do something about it as human beings.

From here – http://www.uigi.com/MSDS_liquid_CO2.html:

“Carbon Dioxide is a powerful cerebral dilator. At concentrations between 2 and 10%, Carbon Dioxide can cause nausea, dizziness, headache, mental confusion, increased blood pressure and respiratory rate. Above 8% nausea and vomiting appear.  Above 10%, suffocation and death can occur within minutes.”

Let’s assume then that 2% is unacceptable.  Our current concentration on 1 April 2010 is 391 ppm. From the Mauna Loa record – http://www.esrl.noaa.gov/gmd/ccgg/trends/ – we can see that over 50 years the average growth rate is 1.43ppm/year.  One notices that recent rates are higher, i.e. the average of the past 10 years is 1.98ppm/year.  I’ll just take 2ppm/year.

Thus we need to estimate when we hit 20,000ppm.  That’s 10,000 years hence, i.e. 12,010 AD.

We could halve that probably, i.e. 6,005, as I’d reckon we’d definitely notice 1%. So CO2 is a long way off killing us, except it’s likely to destroy us in fifty years if we do nothing. That’s the long and the short of it.

[I can’t afford to pay, but you can afford to look at the black humour side of this here – https://www.cartoonstock.com/directory/c/carbon_monoxide_poisoning.asp]

The Eternal Coin: Physical Endurance or Digital Failure

On 15 June 2010, the Real Time Club evening’s proposition for discussion was that new technology will move beyond a facsimile of current exchange to new means of exchange that are better for society as a whole.  Future e-money synthetic currencies for speculative fiction writers shouldn’t be, “that will be ten galactic credits, thank you”, but rather, “you owe me a return trip to Uranus and a kilogram of platinum for delivery in 12 months”.  Well, that’s what our payments autodroid bots (i.e., mobile phones) will agree amongst themselves.  Dave sets out his stall: “When you digitise something, you have the opportunity to re-engineer it.  So it is with money.  As money has changed from barter to bullion, from paper to PayPal, it has changed the markets and societies that depend on it.  Where next?

The Eternal Coin

The Eternal Coin

Dave Birch opened in front of about 40 members with a reminder that Hayek always believed that money was too important to be left to governments.   Dave argued that we ideally needed many units of account for many things but that multiple currencies increased the cost of transactions markedly – how could the cash register be large enough.  He pointed out though that in border areas people seemed able to handle concepts of multiple currencies easily.  This led to a quick reminder of the many new currencies emerging online, e.g. QQ in China, but Dave emphasised the crucial role of the mobile phone, e.g. M-Pesa in Africa.  Finally, Dave touched on new currencies related more closely to real value, e.g. based on commodities, such as people in Norway using future kwHs of electricity as currency.

The core of the argument was that:

1 – we have reached a time of great change in the nature or money

2 – the mobile phone is the most important technological part of the change

3 – some of the nascent currencies will transform our view of money

Dave concluded by musing on what these changes might mean for definitions of communities and community values across space rather than being confined by geography.

Malcolm Cooper opened his reply by asserting that the mobile phone is a transient technology, witness the iPad.  He believed that Dave confused the communications device with the technology.  Malcolm, drawing from some of the themes in his book, “In Search of the Eternal Coin: A Long Finance View of History”, felt the aberration over history was currency.  The norm is trading and storing value in a multiplicity of ways.  As an example Malcolm pointed to the extent of the Carthaginian trading empire and its relatively low use of coinage.

The discussion was, as ever with the Real Time Club, quite vibrant and funny.  Some comments and ripostes included:

  • shouldn’t we conclude from Dave’s arguments that Nokia ought to be a bank? This led to a further reminder of the 1994 paper by Edward de Bono  published by the Centre for the Study of Financial Innovation, “The IBM Dollar”;
  • would Carthage have been better off or stronger with currency?
  • Michael King of WDX (commercial interest) spoke of his firm’s Wocu (World Currency Unit), a basket of top 20 nations by GDP, weighted by GDP;
  • Michael Mainelli raised a point about trading currencies versus stores of value (reserve currencies) and pointed out other initiatives directed at that, e.g. the UTU;
  • wasn’t the deeper problem removing swings in markets, or was it perhaps that swings in markets were exacerbated by our reliance on currency?
  • the use of the quote from Dostoevsky, “money is coined liberty” (House of the Dead, part 1, chapter 2) led to a ponder as to whether we are at our most vulnerable when everything is cash;
  • people were reminded that fiat currency is fiat because the government only accepts the currency for tax purposes, giving government other opportunities to tax through debasement and devaluation and inflation;
  • was the importance of the mobile phone the global connective power and little else, followed by a comment that these days a mobile phone was hardly that, rather a computer with a phone attached;
  • a discussion kicked off on the importance of anonymity to money, including the withdrawal of cheques in the UK, and of course the Real Time Club’s interest in many things cryptographic.

The evening closed with a poem, “Liquidity”, composed on the night and read by long-standing member Andy Low:

The lake of commerce gives life its pace,

For on its smooth and shiny face,

Ripples form, surge forth and race.

(What do I want, what can I get)

They cross, connect and intersect.

The lives of people who’ve never met.

About the speakers

Dave Birch is a Director of Consult Hyperion, the IT management consultancy that specialises in electronic transactions.  Here he provides specialist consultancy support to clients around the world, including all of the leading payment brands, major telecommunications providers, governments bodies and international organisations including the OECD.  Before helping to found Consult Hyperion in 1986, he spent several years working as a consultant in Europe, the Far East and North America.  He graduated from the University of Southampton with a BSc (Hons) in Physics.

Described by The Telegraph as “one of the world’s leading experts on digital money”, by The Independent as a “grade-A geek”, by the Centre for the Study of Financial Innovation as “one of the most user-friendly of the UK’s uber-techies” and by Financial World as “mad”, Dave is a member of the editorial board of the E-Finance & Payments Law and Policy Journal, a columnist for SPEED and well-known for his blogs on Digital Money and Digital Identity.  He has lectured to MBA level on the impact of new information and communications technologies, contributed to publications ranging from the Parliamentary IT Review to Prospect and wrote a Guardian column for many years.  He is a media commentator on electronic business issues and has appeared on BBC television and radio, Sky and other channels around the world.  For much more, see www.dgwbirch.com

Dr Malcolm Cooper holds a First Class Bachelor of Arts in History from Dalhousie University, a Master of Arts in History from the University of Western Ontario, and a Doctorate of Philosophy in Modern History from Oxford University.  His thesis on the formation of the Royal Air Force was subsequently developed into a book, The Birth of Independent Air Power, and published in 1986.  His career has included a Research Fellowship at Downing College, Cambridge, management of the research programme of the Institute of Chartered Accountants in England and Wales, equity research management with three different investment banks (none of which, alas, exist today under their original name), and a five year spell as Head of Research for the City of London Corporation.  His most recent post was as Head of research for the independent public policy think tank Centre for Cities.

Malcolm was the first foreigner to take up coverage of the Istanbul and Athens stock markets and spent most of his investment banking career in European emerging markets, his last post being as Head of EMEA Equity Research for ABN-AMRO (a job he gave up in 2000 – not because he could see the dot.com crash coming, but because he decided he really didn’t want to be on the Central Line at 6.30 in the morning any more).  Most of his recent work has been in the UK public policy field but be retains an active interest in the more challenging parts of the world, and is still inordinately proud of having a letter published in The Times pointing out some of the more obvious problems with the UK’s current military commitments in Afghanistan.  He has also published several pieces on Turkey, including an article in International Affairs, a written submission to the Commons Select Committee and a contribution to a Chatham House forecast of likely regional scenarios following the second Iraq war.

Gresham College – A Short, Personal, Alternative History

Gresham College – A Short, Personal, Alternative History

 Professor Michael Mainelli, Gresham Fellow & Trustee

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[October 2009 – originally written for the Mercers’ Company]

Sir Thomas Gresham (1519-1579) traded cloth and linens between England and the Low Countries at a time when Cambridge and Oxford had a duopolistic hold on higher education in England.  A Cambridge man himself (Caius College), if Gresham’s skippers had visited an Oxbridge College they would have, at best, had the door of a college opened to them and then been laughed at in Latin for their ignorance before being closed in their face.

If you’re going to backstab some one properly, do it from the front. Gresham did so with money. Sir Thomas died of apoplexy in 1579 bequeathing one moiety to the Corporation of London and the other moiety to the Mercers’ Company, charging them with the nomination of seven Professors to lecture in Astronomy, Divinity, Geometry, Law, Music, Physic and Rhetoric.  He required the lectures to be in Latin and, horror horribilis, English.  In effect, Sir Thomas, who pursued monopolies himself, used his will of 1575 anti-monopolistically to crack the Oxbridge oligopoly by bribing seven professors to give lectures to the public, in English.

Gresham College is about ‘new learning’.  Sir Thomas felt strongly that the ‘new learning’ should be available to those who worked – merchants, tradesmen and ships’ navigators – rather than solely gentlemen scholars.  In the 17th century, the Royal Society was founded to explore “natural philosophy”, new learning through experimentation.  So, it is no surprise that the Royal Society was founded and housed at Gresham College for half a century (1660 to 1710) and numbered among its associates Gresham Professors Petty, Boyle, and Evelyn.

For over 400 years the Gresham Professors have given free public lectures in the City of London.  I had the privilege of four years (2005-2009) in the modern, eighth chair as Mercers’ School Memorial Professor of Commerce from 2005 to 2009.  There are some deep footsteps in which we tread.  Early professors at Gresham College included Christopher Wren and Robert Hooke, also integral to the Royal Society.  Recent professors include the mathematical physicist Sir Roger Penrose of Penrose/Hawkings fame and the theoretical physicist John Barrow, who won the Templeton Prize and the Royal Society’s Michael Faraday Prize.

Professorships are awarded for three years with a stipend for six lectures a year, though professors often give more.  Each professor develops his or her own programme.  Academic professors complain that what seems like a sinecure is actually a very demanding post requiring novel, innovative, researched lectures of six to eight thousand words suitable for a global audience.  Business professors, such as I, definitely find it is work.  My estimate is that each lecture takes approximately 100 hours of preparation, thus 600 hours at about £10/hour – you’re not doing it for the money.  In fact, at that rate you should question whether you’re competent to be a professor of commerce.

As my tenure was extended for a year and I had ‘been volunteered’ each year for an additional lecture in the Docklands, I gave 28 lectures.  As a glutton for work, I gave a final synthesis lecture as part of the City of London Festival’s celebration of the 2,000 anniversary of the publication of Ovid’s Metamorphoses with saxophonist John Harle and friend Bill Joseph, “Metamorphoses: The Terrible Beauty of Change“, for 29 formal lectures in four years. The core 28 lectures, around 8,000 words per lecture, 56,000 words per year, some 224,000 words, found their way into the obligatory book – The Price of Fish: A New Approach To Wicked Economics And Better Decisions.  Fortunately for readers, only 100,000 found their way out to the printer.

Given 48 professorial lectures a year, along with honorary professors, former professors, fellows and numerous guest lecturers, Gresham College provides around 140 intellectual events a year for business people, retired people, mature students, university students, schools and the general public.  Each year over 20,000 people physically attend Gresham College’s 140 lectures.  In an age concerned with making money from intellectual property, Gresham College encourages the free exchange of ideas and is one of the most potent intellectual houses on the net and podcasts.  To quote Jefferson, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me”. The Gresham community worldwide downloads lectures over a million times each year from a library of now thousands of recorded lectures, many of which find their way into syllabi from the USA to China.  My strapline for Gresham College today is, “Gresham College: The Modern Tudor Open University”, a “Tudor TED” even.

At Gresham College, we seek to reinterpret the ‘new learning’ of Sir Thomas’s time in contemporary terms.  Our emphasis is on sharing knowledge, exchanging ideas, fusing old views and generating new insights.  Gresham College is increasingly important for those living and working in London as the traditional universities and colleges focus on qualifications and are less able to offer the extra-mural activities they once did.  We have no conscripts: we have a community of people who come because they want to, because they find the lectures and seminars topical, informative and enjoyable. Gresham College is about personal, higher education from dipping into one lecture to completing a series.  I often lord over my academic friends that our current Registrar continues a long tradition of Registrary excellence – in over 400 years no registrar has admitted a single student.

Yes, I am a Gresham Groupie. I found the four years at Gresham College extremely rewarding and remain a Trustee and Fellow, and my firm continues to work on Long Finance and the London Accord with Gresham College.  Sir Thomas Gresham is synonymous with Gresham’s Law, best expressed as “good money drives out bad”.  I often think that the best people in the world come to work in one of the best cities in the world because Gresham College has a part in helping good discussion drive out bad.  Our 16th century Open University is going strong in the 21st.

[I continued to give talks and run symposia to the point that I ultimately became involved in over 120 events.]

To view all Michael’s Gresham lectures.