Posted on The City of London & Broad Street Ward

City Shuffles

The City of London is a fascinating study of two millennia of urban development.  I finished my first year on the Planning & Transportation Committee this month.  Inthe 1970’s I spent quite a bit of time working at the Harvard Graduate School of Design at Gund Hall, Harvard’s school of architecture.  My research job was providing architects with some of their first CAD-CAM 3D walk-throughs; today we’d call it computer generated imagery (CGI).  The architects used these very expensive, match-stick walk-throughs in competitions ‘selling’ architectural dreams.  So I should be an excellent ‘poacher turned gamekeeper’, no?  Also, like many, I’ve complained about much of the post-war architectural blight, the brutal brutalism, the feckless facades.  And of course, as a central London resident I’d like to improve the night view from my balconies:

London 032

Well, it’s harder than one thinks.  The planning applications are lengthy and complicated – these days there is a lot of CGI to look at.  Committee Members only get sent the small percentage of very tough applications, i.e. the political ones.  We rely on an excellent and committed Chairman who treats this unpaid post as a full-time job.

We’re cutting down on skyscrapers and hotels, but people’s complaints about them won’t cease for a few years till the planned ones are built.  Neighbours and financiers row with each other.  People complain, but then don’t bother to attend Committee meetings (meetings are open to the general public and can be fascinating to observe).  Central government plays politics with us over Smithfield Market, itself a very difficult decision.  St Bart’s Hospital and Maggie’s Centre for cancer lead to huge divisions of opinion.  Yes, very interesting times in a single year.

And my favourite, though tough, decision in my first year?  Probably 40 Leadenhall, which I have privately nicknamed “The Shuffle” because it looks to me like a deck of cards.  I do hope when built it looks as good as the CGI and does provide a unique blend of traditional architecture and modern, with innovative internal open spaces.  I really do.  That’s the tough bit of planning, the need for hope – we’ll get it right this time…

40Leadenhall

Posted on Life As We Live It, Sailing Through Life

Never Never Land

For over two decades my great sailing buddy Axel has gone on and on about Helgoland, sometimes rendered in English as Heligoland.  The wonderful sail, the interesting tides, the fantastic island, the duty free.  But for those two decades and more, the weather isn’t quite right, the tides don’t favour us, or Kieler Woche calls.  I long ago started calling it “Never Never Land”.  But J M Barrie might be proud of this shot finally approaching the island – “Second star to the right and straight on ’til morning. ”

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Helgoland is a small German archipelago in the North Sea. Formerly Danish and British possessions, the islands are located in the Heligoland Bight in the south-eastern corner of the North Sea. They are the only German islands not in the immediate vicinity of the mainland and are approximately three hours’ sailing time from Cuxhaven at the mouth of the River Elbe. In addition to German, the local population, who are ethnic Frisians, speak the Helgolandic dialect of the North Frisian language called Halunder. Helgoland was formerly called Heyligeland, or “holy land”, possibly due to the island’s long association with the god Forseti.

The long accretion of fortifications is well worth the visit alone – tunnels, submarine bases.  There is also extensive wildlife with seals so calm around humans that they just sit and stare at you.

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At the end of the 18th century, the English supported Helgoland smuggling when such activities harrassed Napoleon.  After England took proper possession in 1807, much of the population perished of starvation as the English stamped on smugglers.  In 1890, Helgoland was swapped with Germany for Zanzibar.  Then in 1945, the English took possession again, deporting all the islanders.  From 1945 to 1952 the uninhabited Heligoland islands were used as a bombing range. On 18 April 1947, the Royal Navy detonated 6,700 tonnes of explosives (“Big Bang” or “British Bang”), creating one of the biggest single non-nuclear detonations in history.  The blow shook the main island several miles down to its base, changing its shape (the Mittelland was created).  Possibly due to this history, during my visit,I seem to have forgotten to mention I was visiting from London.  It was a magical island and the people were most hospitable, though not worth the wait.  We should have also gone twenty years ago.

220px-Flag_of_Helgoland.svg

This rhyme about their flag is well-known in Germany:

German Low German North Frisian English
Grün ist das Land,
rot ist die Kant,
weiß ist der Sand,
das sind die Farben von Helgoland.		 Gröön is dat Land,
rood is de Kant,
witt is de Sand,
dat sünd de Farven van’t Helgoland.		 Grön es det Lunn,
road es de Kant,
witt es de Sunn,
det sen de Farven van’t Hillige Lunn.		 Green is the land,
Red is the cliff,1 
White is the sand,
These are the colours of Heligoland.1 lit. “edge” or “coast” 
Posted on Life As We Live It, Sailing Through Life, Long Finance

Banking About In Boats

Kathleen Tyson-Quah is a generous friend letting us bounce around the Regents Canal with her several times on her assortment of river craft.  Literally bouncing off the banks on a few occasions.  We had just had some fun at the 2014 Canalway Cavalcade London in Paddington Basin when Kathleen let David Shirreff take the wheel of her new possession, Diona. 

2014-05-05 18.09.46 edit

David knows a lot about banks as a former Economist writer.  His new book “Don’t Start from Here: We Need a Banking Revolution” comes out in September.  BTW – he means financial banks not river banks.  And no, despite the drink on view, not a single scratch!

Posted on Life As We Live It, Long Finance

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.

Posted on Life As We Live It, Long Finance, Technology

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.

Posted on Life As We Live It, Technology

‘Open Commerce’ Talk To Worshipful Company Of Information Technologists

Worshipful Company of Information Technologists, 83rd Business Luncheon

“Open Commerce Drives Out Closed Commerce”

Alderman Professor Michael Mainelli FCCA FCSI FBCS

Tallow Chandlers’ Hall, 4 Dowgate Hill, London EC4R 2SH, 12 February 2014

WCIT logo

Master, Deputy Master, Wardens, Alderman, Liverymen, distinguished Guests.  I’ve had the delight of knowing this Wonderful Company for three decades.  I worked at British Leyland in the early 1980’s with John Leighfield; I fondly remember scheming for reform with Alan Benjamin; like all of us, I constantly admire Dame ‘Steve’ Shirley.  Back in the mid-1990’s, with the Ministry of Defence, the London Stock Exchange, and others, this Company and my firm, Z/Yen, created the Financial Laboratory Club to visualise risk.

I’ve also been coming to your business luncheons for two decades.  While it’s a great honour to be given this chance to discuss whether “open commerce drives out closed commerce”, it was also a bit of a terror when your Master Michael Webster asked me to follow the magnificent Vint Cerf from three months ago.  How inspiring to hear Vint’s plans for interstellar travel – truly per ardua ad astra – striving to bring mankind to the stars.  My plans are more mundane.  I shall swiftly star trek through community, code, and currency to ask you to promote open commerce.

Community

The writer Orson Scott Card said, “Every person is defined by the communities she belongs to.” [Speaker for the Dead, 1986].  Now the IT industry is a young community, yet there is already an old joke about three engineers, a mechanical engineer, a production engineer, and a software engineer, think Past Master Charles Hughes.  The three engineers drive to the top of a steep mountain to see the view.  On the way back down the car veers out of control and they barely bring it to a halt on the edge of a cliff.  The mechanical engineer gets out, looks under the engine, and says, “it’s a leaking brake line.  Let’s patch the hole, refill with fluid, drive home”.  The production engineer says, “no, let’s try to remove the flaw from our factory floor.”  The software engineer says, “hey, let’s go back to the top of the hill and see if it happens again.”

Anthropologists define a community as a group of people who are indebted to one another.  At first this sounds like an accountancy definition, but in joining any community, this livery company for example, we assume debits and credits.

Code

Code is language and language is code.  As a Harvard student on the internet in 1976, perhaps I should have dropped out like Bill Gates, rather than remain a penniless nerd.  And I am a nerd.  Though my wife may cook a blackberry tart or a mulberry cheesecake, we have two Raspberry PIs at home.  I’m still the unpaid IT director for some Ubuntu Linux machines.  You’ll date me easily when I say FORTRAN, COBOL, PL/I, PASCAL, or Cnot++.  I love the geek cartoon XKCD where a programmer dreams of a universe coded in Lisp but God explains, “Honestly, we hacked most of it [the universe] together with PERL.” [https://xkcd.com/224/]

At Harvard at the start of the 20th century, the faculty presented President Lowell with compelling arguments for a new department of political science. President Lowell agreed but remarked, “Gentlemen, there is no such thing as political science, we shall call it Government”.  And it is the Government department to this day.  Computer science is at that stage – it’s really just computing.  We hack it all together.  Yet some theory matters.

After mathematics, the biggest theoretical effect on code was linguistics.  It’s an unusual fact that in the 4th century BC the scholar Panini described Sanskrit using transformational syntax.  In the 1960’s we computer folk adopted Noam Chomsky’s syntactical theory to build language compilers.   FORTRAN 1 took thirty man-years in the late 50’s.  Today we expect an undergraduate to build a compiler as a semester’s exercise.

When we code, we squeeze a community’s language into a machine.  Over the years I’ve had to cram a parabolic missile guidance system into 4k of memory, or jam a world of Mundocart and Geodat maps into 4MB of DEC PDP storage.  I once coded biorhythms, though there I won’t claim they make sense.  Today my firm encodes statistical learning theory.  Coding teaches us about ourselves, in a little class ditty from the 1970s [archive text provided by William Joseph]:

I really hate this damned machine,
I surely wish they’d sell it.
It never does the things I want,
Just only what I tell it.

When talking about commerce we must talk about encoding money.

Currency

Money is a technology larger communities use to trade debts.  The technology is becoming ever more open.  Bitcoin’s essential innovation was a public blockchain, no need for a central bank.  When I explain Bitcoin, I ask people to imagine it as a new virtual element.  We know what the supply is.  We know where most of it is. However, it is not money.  It is a virtual element, but only a community can decide whether to use it to trade.  A quick insanity check – the five year old Bitcoin has a market capitalisation of $8.5 billion today, about the same market cap as the two century old London Stock Exchange.  There are now over 40 alternative cryptocurrencies, AltCoins.  While Vint Cerf was talking intergalactic last year, Travelex announced Quids, Quasi Universal Intergalactic Denominations, a space currency.  Bitcoin may fail, but some altcoins are likely to succeed and the technology has other applications, for example voting.

Wealth

Talking about money leads to dreams of wealth.  Your Senior Warden Nic Birtles reminded me that the Master’s theme this year is Ubiquity, so I’ll remind you of the Silicon Valley definition of URL – “Ubiquity first, worry about Revenue Later”.  In his essay “How To Get Rich”, the biogeographer Jared Diamond set out two principles for communities – connectivity and competition:

“First, the principle that really isolated groups are at a disadvantage, because most groups get most of their ideas and innovations from the outside.  Second, [I also derive] the principle of intermediate fragmentation: you don’t want excessive unity and you don’t want excessive fragmentation; instead, you want your human society or business to be broken up into a number of groups which compete with each other but which also maintain relatively free communication with each other.  [And those I see as the overall principles of how to organize a business and get rich.]’

So what is ‘open commerce’?  Sharing data, especially public data, and keeping our communities sensibly competitive.  Frankly, pretty much what Adam Smith wrote in The Wealth of Nations in 1776.

Gresham’s Law Of Commerce?

Sir Thomas Gresham’s family grasshopper graces his 16th century works, Gresham College, the Royal Exchange and St Martin’s goldsmiths.  Gresham’s Royal Exchange was a market and shopping mall where you could trade the virtual, such as a share of a voyage.  St Martin’s issued gold certificates you could trade if you believed in them.  Gresham College is a Tudor Open University, online today also as a Tudor TED, and with a Creative Commons policy.  But Gresham’s Law, “bad money drives out good”, was not his; it dates back to Aristophanes.  More importantly, the law is expressed backwards.  If you offer me a debased coin or a real coin, I’ll take the real coin unless some monarch insists we use his or her debased currency.  The Nobel economist Robert Mundell rephrased Gresham’s Law properly as “cheap money drives out dear money only if they must be exchanged for the same price”.  Open drives out closed.

So do open data and competition drive out closed commerce?  Start with open data.  In the 1960s and 1970s the UK founded computer-based mapping.  From 1979 to 1987, a number of us in the mapping industry tried to influence three Chorley reports to release publicly-owned ordnance survey and hydrographic data at cost.  We failed.  The industry moved to nations, principally the USA, Germany, and Sweden, where firms and researchers could get data at cost.  Contrariwise, just a few years ago Transport for London decided on free release of train and bus data.  A number of innovative London firms turned it into information on the smart phones you have in your pockets – hopefully switched off – today.   Freeing data made London a global centre for software development of public transport apps.

In January the Rt Hon Lord Mayor Fiona Woolf CBE pointed out in her Tomorrow’s Cities Gresham lecture that our new city walls might be shared data walls – “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 build a block of flats, I must 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.”

Competition

Master Michael Webster remarked via email last year on the benefits of Airbus and Boeing competition.  In the 1970’s, just as it looked as if Boeing would have a monopoly on large passenger aircraft, the European community, at great expense, created Airbus.  Though Europe has only come out even, thanks to the British and the French governments Boeing has no monopoly and benefits have spilled across the world through more diversity and lower prices.

How often does the average Briton meet a market?  After government takes 40% of the average Briton’s income, the remaining 60%’s big ticket items are housing, fuel, and food.  Six banks control mortgage markets; six energy providers dominate fuel: two in your area; four supermarkets dominate food: two in your area.  We have a lot of monopolies and oligopolies.  Few outside Brussels compare five dominant UK banks with the two thousand banks in Germany, or question four global auditing firms and three credit rating agencies.  In IT for twenty years we quite rightly we worried about platform providers such as IBM, Intel, or Microsoft; now we worry about Google or Amazon.  Competition is the most basic form of regulation.  It keeps us on our toes asking questions, and it’s ruthless.  When I asked my then 13 year old daughter why she hacked her school Microsoft computer to install Chrome, she heartlessly said, “Daddy, the only good use for Bing is finding Google”.  At the Ministry of Defence I constantly asked my research teams “if you learned so much last year, why are you spending your budget the same way?”, and “I don’t care if it’s the best British technology, is it the world’s best?”.

We should worry about change.  But we might equally worry about lack of change.  What might e-retailing do to our high streets?  We had more profound changes to our high streets over the past century due to the motor car.  Yes, we should worry about privacy, liberty, security, and fair recompense.  We certainly need to worry about earning our global crust as a competitive nation, but that’s brainpower as much as ownership.  Pierre-Marc-Gaston in 1808 observed that « Il est encore plus facile de juger de l’esprit d’un homme par ses questions que par ses réponses. »   “It is easier to judge the mind of a man by his questions rather than his answers”.  Today Kevin Kelly of Wired observes that in “The world that Google is constructing – a world of cheap and free answers – having answers is not going to be very significant or important.  Having a really great question will be where all the value is.”

Open The Competition

So what might you do?  As good professionals you should be annoying about open data and competition.  Open data is not just for governments.  Have you thought about freeing data from your firm?  Anonymise your vehicle movements and share with a traffic laboratory.  Release some energy data in a challenge for students to help you become more renewable.  Eliminate your legalese.  The IT industry has a tortured relationship with copyright, patents, and contracts.  I have a little numbers game I call ‘contract word count’ where I cut and paste those little online licenses that accompany every new app into a word processor.  Then I do a word count.  100,000 words is a typical length for a novel.  A typical Apple contract has over 40,000 words.  My record find was an app with 90,000 words.  For any lawyers here today, I wouldn’t lie.  Yes, I sit in front of my screen reading for two hours before I click ‘accept’.  Don’t you?  My next target is to beat War & Peace’s 587,000 words.  But have you thought about shareware, creative commons, and other methods of releasing information and sharing knowledge without such legal lunacies?  And will you push for open competition, even when you’re in a position of strength?

Commonwealth is a 15th century term meaning “public welfare; general good or advantage”.  “The common-wealth” or “the common weal” comes from an old meaning of wealth as “well-being” thus “common well-being.”  The Lord Mayor believes our common weal is moving into our data.  Our commons need to be places of competition not monopoly or oligopoly.  A village green of fair sport, not village bullies.  As liverymen, we start with community & comradeship, which leads to commerce, and after we’ve generated some wealth we turn to charity, building a just society.  Perhaps we should call out volunteer Deputy Master Michael Grant in all his polished Pikemen and Musketeers finery to defend our commons?  Our wealth is founded on what we share, which starts with data, then information, then knowledge, and then, perhaps, even wisdom.  So, paraphrasing Vint Cerf, per aperta data et commercia ad astra – through open data and commerce to the stars.

Thank you.

May I ask all of you to be upstanding and drink a toast with me to the health of the Company.  To the Company, may I.T. flourish root & branch!

Alderman Professor Michael Mainelli FCCA FCSI FBCS

Michael co-founded Z/Yen, the City of London’s leading commercial think-tank, in 1994 to promote societal advance through better finance and technology.  Educated at Harvard, Trinity College Dublin and the London School of Economics, where after his PhD he was also a visiting professor, Michael started his career in the USA as a research scientist in aerospace and computing, later becoming a partner and board member in a leading accountancy firm directing consulting worldwide, before a spell as Corporate Development Director of Europe’s largest R&D organisation in the UK Ministry of Defence, the Defence Evaluation and Research Agency.  At Z/Yen, Michael is responsible for leading innovative projects and research, particularly for financial, technology, and government clients.  In 2005 Michael founded the Long Finance movement asking “when would we know our financial system is working?”.  One event had 350 finance professionals singing for monetary reform with Brian Eno at the Willis building.  Michael is a Freeman of the City of London and the Watermen & Lighterman, and a Liveryman of the World Traders.

Posted on Life As We Live It

Burnsing Down The House

One of my favourite definitions of a gentleman is someone who knows how to play the bagpipes but doesn’t.  I hope that explains why few people are aware of my fondness for piping and speaking at Burns Nights, otherwise I’ll have to believe that a strange blast of music has deafened them.  By way of background, I was fortunate to start learning young from three magnificent teachers, Duncan McCaskill, John MacFadyen, and Sandy Jones.  I also had the delight of meeting long-lasting friends such as Tom Netsel and Ray Jarrod.  When I was piping competitively I had the fortune of travelling to events such as Grandfather Mountain or even playing pipes that were a few hundred years old.  At one point in Orlando, Florida I was practising by Lake Fairview when the owner of Barrett’s Marine asked if I’d move.  While I was used to people asking me to “move away, far away”, oddly he was asking me to move in front of his yacht business to attract customers.  Barrett’s and I struck a deal that if I practised in front of his shop I could sail for free – thus cementing a lifelong love of boats.

Web - 1973 bagpipes via Tom Netsel

Tom Netsel on the left, Bill McKay on the right, Ray Jarrett in the middle back, Will Marshall front right, Jim Moody – but find Modest Mike (oh, front and centre next to the beautiful girl)

In 1972 an older enthusiast, William “Bill” MacKay, founded the Orlando Pipes & Drums.  As early as 1973 we appeared on national television in Charles Kuralt’s “On The Road” CBS series. Charles filmed us on 10 January 1973 (I have the autograph) and we were on tenterhooks all week until it was shown.  National television was a big thing in the early 70’s.  I became a pipe major far too early when Bill sadly died in an automobile accident,  The Orlando Pipes & Drums went on to play at many events, having wonderful times at Disneyworld or Church Street Station.  We even had commercial success, so much so that the band bought a boat.  Odd that.

This year was special in a few ways.  First, rather than just piping or toasting at a Burns Night, this time at the home of my dear friend George Littlejohn, who once wrote a “Burns Night Address To Z/Yen“, I also put in a (mercifully gentlemanly) appearance at the wedding of my best man, Rupert Stubbs, to the delightful Joey Mason – so two January outings rather than one.  Second, not being Scottish has always been a problem. Yes, I used to have a kilt, MacAlpine if you must know (here in colour rather than black & white),

Macalpine tartan

but was always being teased – about not being Scottish I mean.  This year I realised that perhaps a better set of gear for a non-Scottish piper might be an Alderman’s Court Velvet.

MRM edit

For yet more you gluttons, Piping At The Post – Twas A Dark And Stormy Afternoon.

Posted on Life As We Live It, Long Finance, Technology, The City of London & Broad Street Ward

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.

20131211_112223

Posted on The City of London & Broad Street Ward

George Leybourne Mark II

One of the more unusual things I’ve had to do lately was acquire a top hat for Remembrance Sunday services at St Paul’s and the Royal Exchange.  For those who know of our family’s associations with Wilton’s Music Hall, including organising a wonderful Gilbert & Sullivan sing-along led by Professor Robin Wilson for the Gresham Society – http://www.gresham.ac.uk/lectures-and-events/a-%E2%80%9Csing-in%E2%80%9D-with-gilbert-and-sullivan, as well as our associations with the not-quite-‘toff’, George Leybourne, then the contrast with my aversion to formal wear – http://www.mainelli.org/?p=308 – makes exquisite irony.  For those who would like to explore the background to Wilton’s, Champagne Charlie, and some of the first commercial sponsorships:

For those who would like to be entertained by some visuals at Wilton’s today, I can only provide the following:

Top Hat

 

Posted on The City of London & Broad Street Ward

A Collective Of Chairmen

Broad Street Ward Club - past Chairmen - 26.09.13

[Photo courtesy of Martin Payne – click to view larger image]

Our Broad Street Ward Club Chairman, Chris Hayward, and our Secretary, Judith Rich, managed to get virtually all of the Past Chairmen of the Club to a luncheon at Guildhall on 26 September!  A great time was had by all, as you can see far too clearly on some rather jolly faces.  In order to propose a toast though, my problem was to establish the collective noun for a ‘bored of Chairmen’ who were clearly not bored at all!  Herewith my feeble attempt:

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