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Things we learn at school

Published by Matthew Davidson on Sun, 27/12/2020 - 2:24pm in

For the last few years I have been working at a local supermarket. Because there are three of them within walking distance, and provided I don't specify which one it is, I believe I can talk about what it's like without violating any confidentiality agreements I may have made during the "yeah, whatever" signing-on-dotted-lines stage of the hiring process.

I was happy enough to do the job for a year or two, but then 2020 happened, so let's make that three or four.

As one of those people who push a trolley round the shop picking online orders, I'm basically paid to get in peoples' way. The maddening thing about it is that when I am in somebody's way, it's they who apologise. Stop saying sorry, people! You haven't done anything wrong!

There's the occasional exception to this rule, memorable for it's rarity. Recently an old fellow grunted "Can you move?", not even prefaced with "excuse me". (Witty response that came to me five minutes too late: "Can I move? You should see me on the dance floor, grandad!")

However by and large, the job is utterly uninteresting, if physically taxing, which comes as a relief to this middle-aged burnout case. If one has to choose, it's far better to punish your body than your psyche.

A while ago my GP asked how work was going, and I replied that over time, the range of things I've been asked to do has expanded. "Oh good," he said, "Intellectual stimulation. You need that."

He's a queer fish, my GP. He makes so much money from treating sneezes and sniffles, and the various diseases of suburban despair, that he's on holiday most of the time for tax reasons, drifting around the world in a little bubble of affluence. I don't think he's quite grasped how much intellectual stimulation is involved in any aspect of running a supermarket — or indeed in most jobs. Which is to say, none whatsoever.

There are points of interest to the experience, mainly derived from observing what various people bring to it. I've seen a lot of people come and go in a few years, which is not unusual down here near minimum wage.

On my trolley is a little computer which, when it's not malfuctioning, leads me about the supermarket by the nose like a pack animal, telling me what to get and where to get it. When you are new to the job, in the process of being broken in, it is emphasised that if you can't find something quickly you should "out of stock it" and move on. Of course the little computer is surveilling you and extracting performance metrics at all times, so speed is of the essence.

Eventually, you realise that the system's little database of stock is chronically incomplete and inaccurate, so you develop workarounds. You also work out that the people who stock the shelves are likewise evaluated by crude metrics, and that it's not in their interest to take care in their work if they will be punished for it, so (for example) a tin of tomatoes is a tin of tomatoes. Whether it's whole, diced, or crushed tomatoes is not a distinction they'll be rewarded for honouring; just get it all on the shelves as quickly as possible.

Once you've amassed a catalogue of all the managerially-imposed perverse incentives relevant to your task, you can start to reverse engineer from these a mental map of the ways that things will inevitably go wrong, and graduate from following a precisely wrong model of how the place works to a fuzzily right model.

The practical upshot of this is that, for example, you don't "out of stock" so often, yet you still get round the shop relatively quickly. Can't find something where your computer says it will be, though there's supposed to be plenty of in stock? Is the amount claimed to be in stock plausible, or likely an artifact of the periodic farcical charade known as "stocktake" (where every item gets counted, but as the item that is supposed to be in that position rather than the item it actually is)? Is it on special this week (in which case it is likely to be on prominent display somewhere else not know to the system, as it's not worth being too fussy about updating the location database week-by-week; that degree of accuracy is not easily measured, and is therefore not incentivised)? Have a look a couple of inches or feet away where there's another product with quite similar packaging. Peer right to the back of the shelf. Insert your arm, James-Herriot-style, up to the shoulder and have a good rummage. When your fingertips make contact with something, grab it, and give it a good yank, bloodying knuckles in the process. Aha! Beep it, bag it, move on…

Now none of that is intrinsically interesting. What is interesting is how long it takes for people to surmount the blind faith in the flawless way that things are supposed to work. Now after a few years, I believe I've identified a statistically significant age-related difference in the attitude that one brings to a new job, which generalises beyond this particular example. It can be summarised like so:

  • Teens/twenties: How does it work?
  • Thirties: How should it work?
  • Forties and older: In what ways is it f**ed up?

You'll be slower and less effective for longer the younger you are, and more likely to be leaned on (which in a deregulated workplace includes being given fewer and fewer hours) till you quit. There are exceptions of course. Personally, I was wandering about in a comically innocent daze until I was in my forties. But in general I've found that the strength of this childlike belief in a world which is pretty well ordered, by grownups who know what they're doing, is proportional to one's degree of, and temporal proximity to, formal education.

So it's not strictly age related. If you're on the sort of career track where you're enjoying "lifelong learning", then clearly reality is not for you. You've taken the blue pill. You're paid to push an arbitrary sort of accountability down the hierarchy by measuring the easily quantifiable, and your only worry is the smaller degree of whimsical discipline imposed from above by those even deeper in cloud cuckoo land.

There's an interesting body of academic work on this, which I'll write about when I get round to reading it. It basically all boils down to Goodhart's Law.

The general cause of the problem is a neoliberal shift from academic education, concerned primarily with how the world actually is, to vocational education which, whether the practitioners know it or not, is about how this or that group of people believe the world should be. In extreme cases, such as mainstream economics, there's no recognition of a possible distinction between the two, since we live in a Panglossian best of all possible worlds, and one can not only derive ought from is, but also go in the other direction. Fault therefore lies not in our systems, but in ourselves. Therefore, it makes sense to measure our virtues using the simple numerical targets of our broken systems: in a word, meritocracy.

My whole working life I've heard conversations among exasperated colleages that run something like "Why do they still not get it? What can we do with them?", often in rooms I've just entered which suddenly fall silent when I'm noticed. To be functional in a fantasy world is to be able to practice the doublethink necessary to insist that the system is fundamentally sound, while intuitively implementing baroque workarounds for the fact that it is fundamentally broken. This phenomenon is fractal, and scales up to the global level, which might give one pause as we "return to normal" in 2021.

I've no conclusion to this…

Now there’s a concept. Make the holidays permanent....

Published by Anonymous (not verified) on Sat, 26/12/2020 - 8:22am in

Now there’s a concept. Make the holidays permanent. Petersham.

Unsanitized: Being Thankful in a Pandemic

Published by Anonymous (not verified) on Thu, 26/11/2020 - 4:47am in

The pandemic has made us a more social people. That sounds paradoxical, given the fact that so many of us have locked away in our homes for the past eight months. Continue reading

The post Unsanitized: Being Thankful in a Pandemic appeared first on

A Financial View of Labour Markets

Published by Anonymous (not verified) on Sat, 03/10/2020 - 7:19am in

We are used to thinking of workers as free agents who sell their labour in a market place. They bid a price, companies offer a lower price and the market clearing rate is somewhere between the two. Free market economics, pure and simple. 

But actually that's not quite right. The financial motivations of workers and companies are entirely different. To a worker, the financial benefit from getting a job is an income stream, which can be ended by either side at any time. But to a company, a worker is a capital asset. 

This is not entirely obvious in a free labour market. But in another sort of labour market it is much more obvious. I'm talking about slavery. 

Yes, I know slavery raises all sorts of emotional and political hackles. But bear with me. I am only going to look at this financially. From a financial point of view, there are more similarities than differences between the slave/slaver relationship and the worker/company relationship - and the differences are not necessarily in the free worker's favour. 

So, let's look at our slave labour economy. The purchase of a slave is a capital purchase in exactly the same way as the purchase of plant. The carry cost of that asset is the upfront purchase amount depreciated on some reasonable basis, plus the present value of the expected cost of maintaining that asset over its lifetime (food, shelter, medical costs), plus the present value of exit costs (funeral expenses). The exit cost can be avoided by selling the slave before death if there is a secondary market in nearly-dead slaves. The slave can "go wrong" (become ill and therefore unproductive) and need fixing, which may be a greater cost than the value of the slave - an eventuality for which the company might wish to take out insurance. But unlike a free worker, the slave can't voluntarily leave and can't be sacked without incurring a capital loss. Once purchased, the only way of eliminating the carry cost of the asset is to sell the slave, and that may be for considerably less than the purchase price.

Therefore the company will only buy the slave if the present value of the anticipated future income stream from the slave's productive labour exceeds the cost of carry. As with all capital purchases, estimating future income streams is informed guesswork, and much depends on the company's confidence about the future. If the company is confident that the slave can be productively used far into the future, they are likely to buy. But if the economic outlook is bleak, and perhaps the future of slavery is uncertain, they are not likely to buy slaves. They will use free workers instead.

You see, the main difference between buying a slave and employing a free worker is the up-front capital expenditure. A free worker is still a capital asset but it is, if you like, leased rather than owned. The carry cost is recruitment costs (if any), plus the present value of remuneration over the anticipated period of employment including benefits and taxes and the present value of anticipated exit costs (redundancy, pension payments). We would expect that the remuneration package for a free worker would be more than the cost of maintenance for a slave, and exit costs may also be quite a bit more - but in a difficult labour market this isn't necessarily the case, as I shall explain.

The important point, from a company’s perspective, is that up-front capital expenditure is far less. So when companies wish to hoard capital, and are worried about the future, free workers are a much better option than slaves. Free workers can be recruited at little cost and, often, dismissed at little cost - particularly if they were recruited on a casual, temporary or self-employed basis. And their remuneration stream can be limited to payment for the work they actually do, because the responsibility for ensuring that they have food and shelter doesn't rest with the company (since it doesn't own them).

In a difficult economy where there is considerable competition for jobs, free workers can end up being paid less than the maintenance cost of a slave. This has actually happened at various times in history - Steinbeck's depiction of the plight of migrants from the American mid-West in the Great Depression immediately springs to mind, but there are numerous other examples of worker remuneration falling well below the cost of living, resulting in starvation. When jobs are scarce, companies are likely to be less benign to free workers than they would be to slaves - after all, buying a slave is an investment, whereas a free worker on a temporary contract is only as useful as his current production and is not a long-term commitment. We would do well to remember this. 

Of course, there might be a very deep and liquid market in slaves, in which case companies could buy and sell slaves as required to meet operational needs. There would still be up-front capital cost, but for short-term use this might be netted out with forward sale contracts, and there would then be little difference between free workers and slaves - in fact slaves would be preferable because they can't resign and the company has complete control over their deployment. Or there might be agencies that provide slaves for particular purposes on a just-in-time basis - perhaps to cover peaks and troughs in production demand, or to cover skills shortages. There might be slaves with specialist skills that earn fees for their owners through being sent out to provide expertise to client companies. And companies could outsource some functions to slave farms, perhaps in a different country. Please tell me how any of this differs materially from the free labour market? 

Now, of course, we don't have a slave economy. We have a free labour market. Or - do we? Read all of the above again, substituting "robot" for "slave". And then tell me why it is that the wages of free workers are falling and there is huge growth in temporary, casual, self-employed and zero-hours contracts. 

When companies are hoarding capital and worried about the future, it is not in their interests to invest in plant , which is what robots are. Companies' outlook is essentially reactive and short-term, so they want a reactive, short-term workforce. They don't want to undertake the capital expenditure required to automate. They don't want to invest in workers long-term either, because training and development is also a capital expense. And they don't want to wait for full productivity: they want to buy in workers who can "hit the ground running", hence the impossible requirement for young people entering the workforce to have "experience". However you look at this, there are structural problems in the labour market caused by companies' short-term outlook and lack of confidence about the future. And the UK's highly flexible labour market encourages this, at the expense of economic stability and people's well-being.  

For at least the last decade, and probably for much longer, the major problem with the UK economy has been failure of corporate investment. The reasons for this are unclear: there may be a lack of profitable investment opportunities, and since the financial crisis there has undoubtedly been a lack of business confidence and a shortage of demand for goods and services. But if we erode employment protection and encourage growth of unstable, short-term and poorly-paid jobs, we actually make matters worse.

Despite the fears of modern-day Luddites, investment in robots doesn't seem to have significantly displaced investment in people. The truth is that companies have been investing in neither people nor robots. Instead, they have churned an increasingly insecure and impoverished - though nominally "free" - workforce. And we are the poorer for it.

This piece was originally published on Pieria in May 2013 under the title "The Financialisation of Labour". We have not moved on signifcantly since. There is still a dearth of corporate investment in either robots or people. The unstable, short-term and poorly-paid service jobs created by the thousand after the financial crisis are now disappearing by the thousand as the pandemic destroys the "gig economy". But as unemployment heads for the moon, governments are reaching once again for the ideology of highly flexible labour markets. Secure, well-paid jobs are not what they want to create, and they don't seem too keen on investing in training and skills development, either. When will policymakers realise that tight labour markets drive corporate investment?

Image: Slave Labour Mural, Banksy

Related reading:

The Grapes of Wrath - Steinbeck

Risk pricing in labour markets - Coppola Comment

Bifurcation in the labour market - Coppola Comment

Perverse incentives and productivity - Coppola Comment

The Future of Work

Published by Anonymous (not verified) on Mon, 21/09/2020 - 7:53am in

“I can’t remember — do I work at home or do I live at work?“ See below insightful books on various aspects of the phenomenon reflected in the cartoon. The point is, although they were written in the pre-COVID-19 world, … Continue reading →

Hitting the wall

Published by Anonymous (not verified) on Mon, 18/11/2019 - 5:55pm in


money, Politics, work

It is 2.30 am, and I can't sleep. Today I must file my final piece for American Express's FXIP blog, which is being mothballed. Writing for that blog has been my main source of income for the last four years. Once it is gone, my income will once again become precarious and inadequate, as it has been all too often in the past. Hence my sleeplessness.

To be perfectly honest, I'm not sorry that the blog is closing. I've done some interesting work for it, and learned a lot. And it has been a reliable source of income during the difficult times of the last three years. For that, I am grateful. But I don't enjoy writing for it. The house style is dry to the point of desiccation, devoid of all opinion, emotion and metaphor. It is also SEO-driven, so I am constantly trying to find ways of including key words assigned by someone else. True, the key words are set from the brief, but it means there is no flexibility. I can't simply go where my mind leads, as I do when writing here. Writing in such a way is like hacking through rocks, exhausting and unfulfilling. And the worst of it is that I know the eventual piece will be published on a site which is hard to navigate, has little in the way of search facilities and has zero presence on social media. I tried many times to persuade American Express to upgrade it, to no avail. I suspect that the unfriendly nature of the site is the reason why it is being mothballed. It can't possibly be generating the traffic they need to justify the expense of maintaining it.

The site itself will stay up, though there will be no new posts on it once the batch I am just finishing now are published. It is free to read, so do have a look around. Maybe at some time in the future it will be revived. But I must move on. I have to find something else that will earn me a living. Right now, I am facing short commons for the foreseeable future.

The self-pitying part of me is hurt and angry that after nearly a decade of writing I am still living hand to mouth. I thought I was a good writer, but it seems I am not good enough for anyone to offer me a regular job on a decent salary - and yes, I have asked.  Freelance writing is all I have, and it is a mug's game. I can pitch to a variety of publications, but there is no guarantee that my pitches will be accepted. I didn't even get a response to the last pitch I made to the Financial Times. And even if pitches are accepted, the pay is pitiful: the most recent offer (from Byline Times) was £100 for a piece which required significant research. I do have a regular writing slot at Forbes, but the pay there is even worse. They downgraded my contract last year, and now five pieces in a month pays me the princely sum of $250. No, that is not per piece. It is for all five. If I am lucky, one of the pieces will generate a lot of traffic, in which case I will be paid per click. When I say "a lot" of traffic, I mean tens of thousands of page hits. My normal hit rate for a Forbes piece is 2000-3000. That isn't enough to earn me anything more than the basic. And if I don't write five pieces in a month, I am paid nothing, even for the pieces I have written. I can't live like this.

There are also far too many publications and event organisers that expect me to write for nothing, speak for nothing, moderate panels for nothing. Some offer "publicity" in return for my contribution. But I don't need publicity, I need income. Others tell me they "value my expertise". But if you expect me to work for nothing, you value me as nothing. And some publications, and many events, don't pay anyone and largely rely on pro bono contributions from people who have regular jobs. This is unfair to people who earn their living from writing and speaking.

I've hit this wall before. I've always been good at my job, but for some reason stability and a decent income evades me. In my banking career I was a project manager, which by its nature is unstable: your job only lasts as long as the project, and if the project is suddenly cancelled, you are suddenly redundant. That happened to me rather a lot. And when I gave up my unstable banking career and returned to singing, I could only achieve stability by doing an awful lot of peripatetic teaching in schools. This was soul-destroying and rendered me too tired to sing. I was eventually forced to cut teaching back drastically at considerable financial cost. Interestingly, writing for American Express seems to have had a similar effect on my writing ability. I have become too tired to write my own blog.

I suppose it is possible that my time is over. I was a creature of the chaotic period after the financial crisis when there was room for new voices with something to say, and new platforms on which those voices could sound off to a large audience. The rise of social media and blogging coincided with the financial crisis and was even more disruptive. It created an opportunity for a singing teacher from Kent who knew quite a bit about banking and finance and was angry that so much nonsense was being written about it. People are still writing nonsense, and I am still angry, but the world has moved on. No-one wants to learn about banking and finance now. They want polemics, not informed arguments. When I started writing, I was severely critical of banks: but now, I am frequently accused of being a friend to banks, because I won't join in the chorus of ill-informed voices shouting about "evil bankers" and demanding that the financial system be smashed to smithereens, at who knows what cost to ordinary people. 

There's another problem too. The chaos of the post-crisis period has given way to naked tribalism. To be successful as a writer and speaker in the new landscape, you have to join a political tribe. Political neutrality is for the birds. But today's political tribes look like cults to me, dangerously inward-looking and deeply divisive, promoting ideologies that have little basis in reality and are potentially extremely damaging - and yes, this applies to the left as much as the right. I don't want to join any of them.

I am by nature a pragmatist, and my natural home is the radical centre, the source of ideas such as universal basic income, land value taxation and helicopter money, all of which have adherents from across the left-right political divide. But in the minds of many, the "centre" is associated with the failed policies that led to the financial crisis. It has no place in the new politics. And so, neither do I.

For those of us who belong to the centre, the current polarisation of politics is frightening. Politics has become a tussle between extreme nationalists and extreme socialists. Those who reject extremes are damned by both sides. The nationalists call moderates "traitors" who would give political power to foreign states and let foreigners swamp "indigenous" residents. And the socialists accuse moderates of being "neoliberals", the pejorative label they attach to those who they believe shredded the welfare state and trashed the country's industrial base. Both sides silence and purge those who won't subscribe to their extreme views. Thus, even to exercise my democratic right to vote in the forthcoming election, I must choose from a menu of equally unappetising dishes. I am not only unemployed, I am disenfranchised.

I do not know what the future holds. But the need for someone to talk sense about banking, finance, economics and the like has surely not gone away. So maybe, as this door closes, another one will open. Maybe, somewhere out there, there is a stable job for me, one that will not only pay me a decent income, but give me the time and energy to say what I have to say.

In the meantime, due to my precarious financial situation, if anyone asks me to write or speak for nothing or next to nothing, the answer will be a resounding "NO". I am not doing any more pro bono work. If I want to write for nothing, I can do so on this blog. I have a few unpaid commissions at the moment, which I will complete. But after that, the party is over. If you think I am good enough to write for your publication, or speak at your event, you need to show me your appreciation in financial terms. If you aren't prepared to do so, then you don't really want my contribution.

The world may appear turbulent, but beneath the surface, nothing has really changed. Editors of publications, and event organisers, are driven by a rational desire to get something for nothing, just like concert promoters and parents of children who want singing lessons. And I am equally driven by a rational desire to earn a decent and stable income. The struggle between those who want to be paid and those who don't want to pay is eternal.

Related reading:

The end of the road
I am a bank

Image: Statue of the "Tired Man", by József Somogyi. Via Wikimedia Commons.

The Future of the Professions

Published by Anonymous (not verified) on Tue, 16/02/2016 - 10:58pm in

In an era when machines can out-perform human beings at most tasks what are the prospects for employment? In an era when machines can out-perform human beings at most tasks, what are the prospects for employment, who should own and control online expertise, and what tasks should be reserved exclusively for people? The Future of the Professions predicts the decline of today's professions and describes the people and systems that will replace them. In an Internet society, according to Richard Susskind and Daniel Susskind, we will neither need nor want doctors, teachers, accountants, architects, the clergy, consultants, lawyers, and many others, to work as they did in the 20th century.

The authors Richard Susskind OBE (Author, speaker, and independent adviser) and Daniel Susskind (Lecturer in Economics, Balliol College, University of Oxford) explore these questions with Joshua Hordern (Associate Professor of Christian Ethics, Oxford Healthcare Values Partnership), Vili Lehdonvirta (Research Fellow, Oxford Internet Institute) and Judy Wajcman (Anthony Giddens Professor of Sociology, London School of Economics). Chaired by Kathryn Eccles (Research Fellow, Oxford Internet Institute and Digital Humanities Champion, Humanities Division, University of Oxford).

Today's winner of the "I Feel Good About Myself and What I Do for a Living" award is …

Published by Matthew Davidson on Mon, 02/09/2013 - 10:04pm in