Tell Sid and get on yer bike: the panoptic world of the private investor

My article ‘Elephants can’t gallop’: performativity, knowledge and power in the market for lay-investing was published in Journal of Marketing Management earlier this year. The JMM team have been kind enough to remind everyone with a tweet – thank you! – so in return, here is an extract from my book A Richer Life. It is a discussion of private investors taken from chapter 4  Making Economic Man and it sums up the key themes of my JMM paper. If you want the Foucault-inspired analysis in full, you can find the article here.


‘Margaret Thatcher did not only sell off housing stock. She also turned thousands of individuals into shareholders through a series of massive privatizations. The wave of deregulation that she brought in to break up the sleepy monopolies of the City, known at the time as the ‘Big Bang’ of October 1986, opened London up to the brashness of Wall Street. It also made it possible for the ‘man in the street’ to buy and sell shares. In a few short years, Thatcher created the private investor.

In the United Kingdom, privatization was fronted by the iconic ‘Tell Sid’ advertising campaign, a pre-social-media take on a viral advertising message: a postman is knocked off his bicycle by an Everyman character, fresh from the pub, who says, ‘I’m glad you’re here, this will interest you . . . these British Gas shares, they come out in November . . . If you see Sid, tell him.’ The postman relays the message to an elderly lady, with the additional flourish, ‘They’re really easy to do . . . if you see Sid, tell him.’ The name Sid was well chosen, with its connotations of lower-middle-class solidity, the same staunch Thatcher supporter who had bought his own home not so long before, and at the weekend polished his beloved Ford Sierra to a perfect shine.

Private investors have always puzzled people who know about finance. They don’t seem to do very well in the market, systematically underperforming the various benchmarks. In all fairness, most professional investors underperform the benchmarks as well, but that is an aside: private investors get dismissed as dumb, or reckless, or worse. Habits such as overconfidence drive returns down (men are much worse offenders than women here, and it costs them an additional 1.4 per cent a year in lost revenues).14 But they persist in investing. Why?

As a doctoral student I set out to explore this riddle, one of which I had some personal experience. I had worked briefly as a stocks and shares journalist during the Internet boom years and ensuing bust; I had ended up on the board of a small quoted company that specialized in providing information on other small companies. It also specialized in spending shareholders’ money more quickly than it made profits, and I walked the plank after just a few months at the helm. Nonetheless, that period gave me an insight into the world of the private investor: not dumb, not stupid, possessed of a solid pot of capital that had usually been acquired through a successful career somewhere else. Yet they were still investing in small companies like the one I worked for and the others I knew; two-bit outfits where good ideas and dreams could rapidly sour to losses and disappointment in the cold reality of commerce.

So I spent time with a clipboard, I conducted interviews and hung round investor shows. I discovered – and I’m pleased to say that others doing similar research in the United States and Australia at the same time drew similar conclusions – that private investors live their investing lives in a panopticon-like, self-contained world that directs and manages their investing habits. The same techniques, artefacts and devices that make it possible for individuals to participate in stock markets configure them in a particular manner, for better, or for worse; what it is to be a ‘private investor’ is inseparable from the world that they inhabit.

Their story was nearly always the same. People became investors because they were fed up with the poor performance and fat fees of the ‘so-called professionals’. They sought to take responsibility for their own financial destiny, pulling their savings and investments, sometimes even their pension pots, out of mutual funds and embarking on a journey of financial self-education. Their projects are a manifestation of Thatcher’s enterprise culture, which, in the words of the eminent sociologist Nikolas Rose, ‘links up a seductive ethics of the self, a powerful critique of contemporary institutional and political reality, and an apparently coherent design for the radical transformation of contemporary social arrangements’.1 And so they venture to go it alone. Once the step has been taken, they are sustained by a pervasive narrative of ‘us against them’, of outsmarting the financiers with their ‘hundreds and hundreds of highly paid investment analysts . . .’1

Learning to invest is no easy matter. Before embarking on a career in finance one is expected to go to business school and learn the basics of asset pricing and portfolio management, but no such arrangements exist for private investors. Instead, you must educate yourself by attending investment shows, reading magazines or books, browsing online and chatting to others in the same position. Investment websites are thriving communities of chatter where individuals can share ideas, discuss strategies, celebrate success or commiserate over failure; the relationships formed with electronic others often do more to sustain investment practice than the real-world attachments they build up in shows and seminars. In this way investors learn how the market works and how they should understand it, and at the same time they purchase mechanisms for making the market visible and tractable. They may be ‘chartists’ who chase Fibonacci numbers through the financial market, or ‘fundamental’ investors hunting down hidden value in the smaller company markets; in either case they pay fees, subscriptions and commissions, and in return have the burden of market calculation lifted from them, enabling them to participate in the market.

As one might expect, there is nothing extraordinary about the technologies of governance that surround private investors. Some of them purchase computer programs that will analyse investment opportunities or draw elaborate graphs of share price movements, while others subscribe to tip sheets and magazines. Still others visit shows and speak to the management of firms seeking investment. Nevertheless, these mundane technologies, programs and artefacts enforce very particular ways of behaving in the market. Calculation is embedded in each of these devices, and serves to configure the investor who uses them in a specific way. Subject to this technology of self-entrepreneurship, they become not just economic men and women, but specialized economic men and women, positioned to offer maximum advantage to their curators – not the investors themselves but the owners of the technology that they use.

For example, one investor, whom I shall call Terry, told me about the magic numbers that he believed shaped the seemingly random movements of prices:

Fibonacci ratios exist everywhere, they exist in art, they exist in the human body. If you measure the distance from your shoulder to your ankles, and then you measure the distance of your arm you’ll see that that is a Fibonacci ratio, I think it’s about 1.618, or .618, or your arm is a ratio of your body.

How does one discover such a complex code among the noise of stock market prices? It is, of course, invisible to the naked eye and the investor who wishes to find Fibonacci ratios must spend plenty of real money in the course of his pursuit. When I spoke to him, Terry had already spent thousands of pounds on training CDs, charting software and attending courses, and had invested most of his spare time for nine months on testing out new methods, with the hope of becoming a full-time investor in the near future. When one method disappointed he simply moved on to another, claiming that his system was not yet quite perfect and ignoring the other equally plausible explanation: that there are no magic numbers in the stock market, or at least, none magic enough.

The institution that surrounds private investors is so total that they are unable to see beyond it. The promise of the self-reliant, entrepreneurial future hangs in front of them, and combines with the sense that it really is their responsibility to improve their lot, to provide for themselves in old age, to take charge of their destiny and shape it accordingly.

Another told me in all seriousness that while he invested successfully in dividend-paying multinational corporations on behalf of his mother and his sister, his own investment activities in smaller, high-risk companies had ‘always been a disaster’. When I pushed him as to why he kept on with this investing he replied that if he could just erase emotion, if he could act rationally, then it should be a good way of making money.

Private investors are outgunned on all sides by sheer calculative power: trapped between the professional investors with huge reserves of capital and ‘all those PhDs’ on the one side, and the investment service firms who will charge fees whether they win or lose on the other. Why do they continue in the market? Mental accounting, such as separating gains and losses, for example, and simple self-deceit carry a fair share of blame. I often heard statements such as ‘excluding the bad ones, I did quite well’, or ‘the professionals had manipulated the market’, or ‘the very day I was intending to take profits, it collapsed’. More pernicious, though, was an underlying sense that the golden egg lay just round the corner, that success was only a few tweaks to the system or minor adjustments to strategy away, that it was the investor’s fault for getting emotional, or attached to a share. The possibility of riches and success, or the idea of working on a laptop from a poolside at your tropical retreat, are strong enough to blind investors to the grinding reality of financial loss. The more exotic the product, the higher the risk, the stronger this motif of eventual breakthrough and escape became. Only in one instance did I hear an investor express any doubt in the possibility of making money from one particular branch of investment activity. And so, he told me as he sipped thoughtfully on his beer, he was becoming a chartist instead.

Interviewing people can be difficult. The dispassionate social scientist is not allowed to interfere, even when the pleasant man you are talking to tells you he is moving his pension fund into a spread-betting portfolio. And if I had rebuked him, he would probably have replied that professional fund managers had eaten up so much of his money already, he would rather lose the rest himself. I would have struggled to answer that. Private investors find themselves in a panopticon much more insidious than that of the fishermen; their aspirations, energies and personal savings tied into a system in which it seems they lose whichever way they try. There are some decent firms in the investment service sector, and I’ve worked for one of them, but no amount of decency can diminish the fact that there is a huge structural problem: individuals, failed by mainstream finance, are forced to fend for themselves in an unfriendly market where they become the prey of those very same financial institutions. Moreover, this arrangement is offered to us as part of a social settlement where we are expected to consider ourselves liberated and empowered in making arrangements for our own old age.’

‘Reorganizing growth’ – lecture in Cologne

Organization, growth, faith, prosperity – what a fascinating and tangled nest of concepts they are. So when I was invited to speak on just these topics, in Cologne, of course I accepted. The conference ‘Ihr aber glaubet’ was held on 12-14 June, and funded by the German Federal Cultural Foundation. My thanks to everyone involved, to those others in my session – Marcia Pally, Christian Felber, and Wolfram Eilenberger (editor-in-chief, Philosophy Magazine), who moderated the debate so effectively. I’m publishing my lecture below; its a ‘long read’. If you’re interested, here’s a running commentary on the session, ‘Making sense of Pally, Roscoe and Felber’.

“Good morning. First of all, let me say what a pleasure it is to be here and to have the opportunity to speak to you at the beginning of what promises to be a fascinating two days. And also, to admit that, to my shame, I speak no German. Perhaps the reason is my own idleness at school, or that my many German friends have always indulged me in my own language; the fact of the matter is I’m going to have to speak to you in English, and for that I can only apologise.

Many years ago, while I was a master’s student among the dreaming spires of Oxford, I had the good fortune to edit and translate two chapters of an ancient Arabic manuscript. It had been written by an Alexandrian physician called Abd al Latif al Baghdadi, and was a gloss on the work of an earlier Greek commentator, himself paraphrasing Aristotle. It had been stored in the library of a Turkish monastery for hundreds of years, copied many times by hand, and was enough to make a young student’s eyes water. This manuscript (right) was all about ‘tadbir’ or Providence. Manuscript

Since mankind’s earliest intellectual adventures we have sought reassurance that the world is ordered by something other than ourselves. The ancients thought that the world was at the centre of the universe, and imagined a set of celestial spheres sliding one upon the other, ever less changeable and more perfect, moving away from the chaos and disorder of the world until eventually one reaches the untouchable heavens, the fixed stars, the realm of the divine soul. According to Abd al Latif, Providence, a divine power emanating from the perfect heavens, seeped inwards to organize the earth; things live and breathe, think and talk, on account of differing measures of the divine soul. It is the fundamental animating, organizing force of nature.

I would like to say that things have moved on a bit since then. But when I read Hayek, for example, who suggests that the natural order of crystalline structures is somehow a model for the organisational structures of a free-market economy, I wonder if we have just swapped one set of beliefs for another. We still seem to need the reassurance of divine order, and to be able to place our faith in something beyond our own everyday experience. For the last few decades, that faith seems to have centred on markets and economics.

It is the consequences of that faith – in terms of our humanity – that I would like to talk about today. I want especially to talk about growth, an idea that is so closely linked to economic prosperity. Growth is expansion, proliferation, there being more of something today than there was yesterday. I won’t get clever and say that growth can be spiritual too. But I will suggest that growth can be pointed in different directions, and have different consequences; in this talk, perhaps I can sketch out a vision of growth that offers more possibilities for humanity.

Adam_Smith_The_Muir_portraitAnd faith: well let’s get to faith now, and back once again to providence. The notion of providence is more closely entwined with modern economic ideas than you might think. You will know that Adam Smith (left), philosopher, man of letters, economist, and pillar of the eighteenth-century Enlightenment, breathed life into the idea of self-interest as a motivating force in society. In The Wealth of Nations, published in 1776, he told us it was the self-interest of the baker, brewer and butcher that would provide our supper, not their innate kindness or charity. (Although, as feminist author Katrine Marcal has pointed out, Smith lived at home and was fed and watered by his mother). Smith argued that mankind had a ‘propensity to truck, barter, and exchange’ and that he was distinguished from the beasts, not by the gift of stewardship over the earth, nor through being made in God’s image, but by our ability to exchange. Smith’s understanding of the division of labour as the source of wealth has proved so influential that it adorns the Bank of England’s £20 sterling note. But his understanding of people is even more persuasive. Trade makes us what we are, he says, and if you need something from someone, you had better rely upon their base self-interest, because that’s the only thing you can trust.

The enlightenment, of course, sought to do away with the dead hand of religion, looking forward to a better society, one driven by progress and illuminated by science. In the enlightenment, nature took on the mantle of providential organiser, and acted as the mirror of the divine in a more secular worldview; Smith believed that nature, if left to its own devices, would channel economic activity in the most beneficial manner: ‘By directing that industry’ he wrote ‘in such a manner as its produce may be of the greatest value, [the businessman] intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.’

Smith’s name regained prominence in the 1980s as the champion of free markets, the classical economist who first pointed out the ‘invisible hand’ of the market, which became the best, if not the only, justification for notions like the trickle-down effect: the idea that a healthy market will, left to its own devices, self-regulate and turn competing self-interests into wealth for all. Those free market evangelists of the twentieth century took Smith’s name in vain: he is less advocating untrammelled self-interest, than making a theological point about the immanence of divine intention in nature, and therefore in the world. He isn’t really saying that you can only trust the baker’s most base instincts. He’s saying: what a wonderful world we inhabit where even the lowest instincts can produce such virtuous outcomes as our supper. For the Enlightenment thinkers it was nature, not scripture, that offered mankind comprehension of the Divine; the laws of heaven were written into the laws of nature, and thus into the wonderful, ineffable operations of the market.

So Smith, and those little Smithians who follow after him, believe that a particular kind of human relationship is central to human well-being and progress. Not one of kindness or generosity, altruism or imagination, but one based upon self-interest and competition. Private vice, they say, leads to public virtue. Self-interest provides the motivation for any action and competition the disciplinary mechanism. By this way of thinking, the more interactions are colonised by economic exchange and given over to self-interest, the better society will be. In 1956 the British economist Dennis Robertson argued that job of the economist is to economise on love, to make sure we rely on self-interest to organise society; we mustn’t carelessly use love up, or there won’t be any left when it is needed. I’ll leave that point for now. I’ll just say that growth doesn’t just involve the growth of wealth, but also the proliferation of ways of doing things. Growth in wealth seems to mean growth in markets and therefore growth in market-based relationships. And so growth becomes intimately linked with another question: how best should we organise society?


In parallel with the history of faith in markets and economy, it is possible to tell another history – of the growth and proliferation of commodities: a history of wealth and accumulation. That history would chart the move from the village-based craft production of goods, through the growth of trade in the Middle Ages, to the coming of industrialisation and the birth of the manufactured commodity. In the present day, it would deal with the new frontier of production and accumulation that is the digital world.

Of course, wealth has always been associated with status and accumulation. Rereading Homer’s Iliad, I was struck by the importance that the circulation of artefacts plays in the story and the obsessive, fetishistic detail with which the poet describes these goods: swords, shields, helmets, tripods and cooking vessels, armour, chariots and plates. Our concerns haven’t changed much since then. There doesn’t seem much difference between ancient Odysseus and modern day James Bond: both black-hearted, cunning, lucky with goddesses, and decked out in the best and most expensive ornamentation. If Omega had made watches back in the days of heroes, I’m sure Odysseus would have worn one.

In mediaeval times, most wealth was in the shape of weaponry and land, which conferred advantages of power on whoever happened to hold them. Then, as trade bloomed, a growing merchant class used precious goods – buildings, cloth, art, spices, even sugar – to demonstrate their status and equality with the landowners. Later still, during the Industrial Revolution, commodities became mass-market, and the growth of wealth began to accelerate. Material status symbols were no longer the preserve of the wealthy elite. The 20th century, particularly after the Second World War, saw the rise of consumer culture, a boom in production and consumption driven by technical advances and petrochemical exploitation; the great democratisation of wealth, the proliferation of stuff, a social contract that dreamed of equal economic participation, and after the fall of the Berlin Wall, the final triumph of free-market capitalism and claims of the ‘end of history’.

But it wasn’t the end of history at all, not for growth and accumulation. Digital technology, the Internet, and social media have opened up incredible new possibilities for the production of commodities and the accumulation of wealth. The early Internet evangelists argued that digital technology would cut out the middleman, and put producers directly in touch with consumers; instead, we seem worse off than before. We have giant, monopolistic gatekeepers, taxi firms that don’t run taxies and bed-and-breakfast brokers who don’t hold a single room, each worth millions of dollars.

There are new forms of labour, unpaid and invisible. In class I ask students how many hours they spend on Facebook or YouTube. It’s a lot. Then I ask them who is getting rich? It’s certainly not the students, though they seem to be doing all the work, creating, organising and consuming content. The digital frontier has become a wild west of wealth ready to be grabbed; instead of gold there is personal data and the unpaid labour of children, students and the unemployed, in fact anyone with time available to spend labouring online.

It is ironic that such new forms of work are tagged as liberating, aspirational and entrepreneurial. Despite hopes that the Internet would lead to community, sharing and even new kinds of civic virtue, it has turned into yet another competitive arena where participants fight to capture the benefits of communal activity to their own advantage. YouTube, once upon a time a service for collective video sharing, has become a space where would-be celebrities, many of them children, work hard to develop content and find subscribers. Once again, layers of middlemen have appeared to shackle these youngsters in contracts and take a cut of their already pitiful earnings.

Or consider the business of ‘modding’ or hacking new games, which takes place in communities of amateur software programmers, deploying their skills for the love of the task and the reward of community acclaim. Software firms have been quick enough to recognise the process as one long, free job interview, and periodically hire the most successful programmers. Now that success is defined in terms of getting a job – that is, in tangible monetary terms – the borrowing that goes on from other programmers in order to make a successful ‘mod’ is less an act of communal sharing and more one of snatch and grab. And to be honest, I’m doing something like that just now, because the example I’ve given you isn’t mine, but comes from the sociologist Detlev Zwick, now based in Canada but originally trained in this fine city.

So growth doesn’t just mean the accumulation of wealth. It also means an expansion of doing and valuing according to the rules of the markets. Growth, thus understood, may leave us financially rich but impoverished in so many other, less tangible, ways. All of this, of course, is the Enlightenment dream being put into practice: an ever increasing proliferation of commodities, even more expansive frontiers for growth and accumulation, and ever more human relationships being turned over to instrumental, trading exchanges driven by self-interest and policed by the providential mechanism of competition.


The final commodity is, of course, our own selves. Let me give you another example, one that exemplifies everything I have talked about: the entrepreneurial capture of yet another area of our social life, the commoditisation of persons as a tradable product, and the subsequent replacement of a pre-existing pattern of social relationships with ways of doing and valuing demanded by the market. I’m talking, of course, about online dating.

Since the birth of the Internet, online dating has emerged as a serious commercial force and social phenomenon. Global online dating firms turn over hundreds of millions of euros every year. They promise, well, that’s the point, what exactly do they promise? Some promise scientific methods which can help you find your partner for life. Others promise to help you find someone who is right for you, who shares interests, someone with whom you can enjoy your hobbies and activities. Still others promise to find you a woman or man in uniform, or somebody who went to the same university as you, or reads the same newspaper. Whatever you fancy, that’s up to you – and that’s the point: reengineering love as a consumer choice makes it something that can be parcelled up and sold. Love, which is so central to happiness, self-knowledge and even faith, is reduced to the status of a tradable, exchangeable commodity.

But how exactly does this happen? As is often the case, human relationships can be turned on their head by a little bit of machinery, a few measures and incentives. So, for example, many online dating sites allow people to search for potential partners using a mechanism that will be familiar to anyone who has ever used the Internet to search for a second-hand car or a house. These interfaces offer a detailed menu of choices, allowing users to select partner attributes such as age, height, type of figure, hair length, hair colour, interests, marital status, ethnic origin, religion, education, children, and where you stand on drinking and smoking. I am not, by the way, betraying any prejudices when I list hair length and colour before education – that’s how they appear on the screen, and, I suspect, a suggestion of their perceived importance. At the top of the screen, a counter lists the availability of matches. It tumbles downwards as you design your perfect partner online, until eventually, you must trade off desired characteristics and scarcity.Search screen

How does a user behave when presented with such an interface? There is no alternative but to try to maximize one’s preferences in searching for a potential partner. We seek the best that we can get from the available supply, making decisions as to the relative merits of available attributes and their value against our own. A kind of market-economic behaviour has been brought into being through the use of a technical interface. The user, in combination with the dating website, has become the individual economic agent, the instrumentally rational, maximizing actor of economic theory: a cyborg dater. Hang on, you say, isn’t economic man selfish, instrumental and even strategically dishonest? If we want evidence that online dating changes the way people go looking for love plenty has been provided by researchers in psychology: individuals go armed with a shopping list of perfect partner characteristics to be ticked off; people are prone to petty dishonesties in their self-descriptions, getting slightly taller and a little bit thinner; and skimming through endless profiles fosters the illusion of choice and lowers commitment. We hear plenty of stories about selfish men (I’m afraid it usually seems to be guys) online; but the evidence is that the online systems bring out the worst in people. Online dating isn’t even fair, at least not in the sense of equal opportunity for all. We’re not terribly good at finding people who are attractive to us in person by looking at photographs and profiles. Instead we tend to pick on people who are ‘generically’ attractive and they become immediately popular online at the expense of everyone else.

Online dating demands that we treat falling in love as a moment of active and rational choice, where personal attributes and compatibility form the basis of attraction. But people are not like a fine wine or a holiday; they are not things to be selected and ‘experienced’, as dating services would have us believe. Experiencing is a self-centred occupation, and a glass of wine serves no purpose beyond the temporary gratification of the drinker’s senses. Flourishing human relationships, on the other hand, are mutually rewarding, ongoing endeavours.

I do understand why people look for love online and I’m genuinely happy for anyone who builds a long and loving relationship from the flimsy start that an online match offers. The point I’m trying to make is a more general one – that human relationships organized by market exchange are instrumental, self-interested and solipsistic, and therefore inferior to those organized by service to others, sharing and empathy. You could put that even more simply. Does the good life involve getting more and more of what you want, or is it achieved in relationship with others? Or even, as the Christian tradition might put it, in service and devotion to God?


So back to faith. Faith offers a means of placing oneself in the world. In contemporary politics we can see more than just the pursuit of growth and accumulation. There is a quasi-religious belief in the ordering power of markets, in the justice of economic action, and in the ability of the system to distribute wealth where it is most deserved. You can follow, as I have done and in this talk, the parallel development of ideas about the spontaneous organisation of markets and the accumulation of commodities and wealth. Markets are the mirror of nature, and therefore of God; from the delicate balance of the world we can deduce the moral righteousness of economic growth. But it does not look as if the current arrangements are sustainable, either in terms of the planet’s capacity to support unlimited growth and production, or in terms of generational and geographic equity, when those who find themselves comfortably off do so at the expense of younger, future, or foreign others. It seems that blind faith in the providential ordering of growth is as fanciful as Abdullatif’s long dissertation on the heavenly spheres.

A little while ago I mentioned the economist Dennis Robertson, who claimed that we must economize love, in case we run out of it when it is really needed. Michael Sandel, the Harvard philosopher, has an answer for that: love, or altruism, is a habit that flourishes with practice. A little altruism, carefully applied, should lead to a little more, a virtuous circle of benign, non-instrumental social relations. But how to kick-start such a virtuous circle? I would like to encourage everyone to think nice thoughts and suddenly become altruistic, but I suspect we might need a little help, and, as someone who researches organisation my thoughts naturally turn in that direction. We can certainly organize for misery, so surely we can organize for happiness and fulfilment too. Markets are not in and of themselves bad things, so the challenge is this: can we build markets, or other such economic structures, that deliver riches to the soul, or to the community, rather than to the pockets of a few? Can we occupy economics and repurpose growth?

Juan Pablo Pardo-Guerra is a sociologist at the London School of Economics and a fellow student of markets. He has been struck by the radical programme of synthetic biology, which aims to produce toolkits and building blocks that will allow anyone to build novel biological structures, and wonders if the same rules could be applied to markets. Imagining markets based on, and coupled to, biological systems could result in markets that are, in his words, ‘pragmatic, even civic’ – Pardo-Guerra envisages a hacker-paradise of self-contained, made-to-measure markets able to tackle specific problems and bring about certain ends: the conservation of the rhino, for example. Would it be possible, he wonders, to construct a market that wraps up and destroys the trade, one that changes social norms so that it strangles itself on its own success?

Let me offer an example of an economic form that does, I believe, just what Pardo-Guerra intends. It doesn’t solve the problem of the rhino horn, but it does confront another problem, one closer to home: the contemporary town. A place where no one knows anyone else, where some leave for work early and return late, where others remain isolated at home, perhaps old or infirm, or unemployed and marginalised. A town whose residents are disenchanted and alienated, and where relationships have been permeated by instrumental, selfish behaviour and casual competition. Would it be possible to imagine a market capable of rejuvenating a social space? Since the 1970s, some radicals have thought that it is. Their proposal comes in the shape of the local exchange trading scheme.

The principle of the scheme is simple enough. Members advertise services, skills or produce that they can offer, and others that they would like to receive. Usually there is some kind of directory and members contact each other to request whatever it is that they want. They agree a ‘price’ in the scheme’s notional currency, and the transaction is recorded by means of a cheque or an online system. All of which sounds very economic, with its talk of bargains and cheques –and that is doubtless the point, as these schemes are an attempt to subvert and re-purpose existing market arrangements. The big difference comes in the agreement of the price. This is based around the amount of time it takes to provide a good or service: three hours of one service costs the same as three hours of another, irrespective of the nature of the service or who provides it.

The equivalence of value and time is a foundational principle of any such scheme. Organizers understand that there is something fundamentally liberating about pricing everybody’s time at the same level; the unemployed, economically excluded individual is valued the same as the wealthy professional, no matter what service or product is offered. By participating in a LETS transaction, each individual actively recognizes the value of the other in a communal exchange.

Sceptical observers will point out that the success of trading schemes is mixed. It’s true. Even successful ones tend to collapse under the weight of the bureaucracy required to manage them. The experience of those participants I have spoken to is that schemes eventually peter out. Does this mean that they are worthless? I don’t think so. Local exchange trading schemes offer a window onto a new way of organizing markets, one that highlights the role of trust and empathy in economic exchange, and makes it possible to imagine that economics could be different: that it could be an economics for us, locally organized and productive, and one which we control in a very local, specific way.

It may even be that a local trading scheme is exactly the kind of hacker-paradise-market that Pardo Guerra envisages, self-contained and for purpose. That any trading scheme is a necessarily short-lived thing, with the seeds of its own demise sown in its success. For once the scheme has succeeded in establishing trading relationships among people who were previously strangers, the bureaucracy is no longer needed, and the scheme wastes away. It leaves in its place a community.


I have argued that the growth of market-like ways of doing and thinking, which has accompanied the economic growth of the last 30 years, corrodes our interactions and somehow robs us of capacities as humans. But markets are here to stay. So perhaps what we need is not less markets, but better markets; not less growth but better growth.

Now, I don’t imagine for a moment that a few well-meaning people swapping homemade jam for lawn-mowing, or cat-sitting for elementary Mandarin lessons, constitutes a prescription for the overflow of global capitalism. But, in an age when the possibilities of growth seem to have been captured by so very few, I do think that such novel forms of organization may offer us a way forward. Wouldn’t it be wonderful to imagine specialized markets that could build communities, work for fairness and inclusivity, and, most of all, become spaces where altruism could be developed and worked on. Where, turning Adam Smith on his head, public vice leads to private virtue. In structures such as the local trading scheme, each exchange reanimated with social content, perhaps we can begin to glimpse a language and vocabulary robust enough to sustain us into the future: aneconomics filled by dignity, compassion and humanity. A kind of growth that is decent, meaningful, and ultimately human.

Thank you very much.”

Mr Miliband not ‘leadership material’? That suits me fine

I’m not well qualified to write about politics, but I do have a professional interest in chief executives, and one thing is clear to me: you wouldn’t want a CEO running your country. Not a heroic corporate leader of the sort that business schools have been churning out for the last two decades. Nor, I think, a chief executive of the careful, bean-counting variety, very good at balancing the books; someone who talks shareholder value and tough choices as factories close and food banks fill up.

When someone says Ed Miliband isn’t leadership material, they really mean he isn’t CEO material. It’s true, he isn’t. He lost his footing as he walked off the stage at BBC Question Time. He eats a bacon sandwich in a funny way, and his face moves around when he’s thinking. In short, he seems a pretty ordinary chap.

You can’t imagine Richard Fuld, formerly of Lehman Brothers, tripping on some stairs. But then, Fuld went out of his way never to be seen on stairs at all. He lived a life of chauffeured limousines, personal jets and private elevators; you’d expect Fuld to catch a magic carpet rather than use his own legs.

When most people make mistakes, they slip, stumble, or struggle with a sandwich; a missed deadline or bureaucratic error, something that can be put right easily enough. Chief executives, however, make mistakes of Olympian proportions. The chief executive slips up, and everyone pays, sometimes for decades. When Fuld’s testosterone-charged, corrupt Lehman Brothers imploded it very nearly took the global financial system with it.

Why should this be? How can a chief executive’s capacity for disaster be so exponentially greater than our own? Why doesn’t someone, somewhere in these globe-circling corporations waggle a finger and say, look, Sir Fred, if you do this much more you’ll be the most hated man in Britain for a decade?

Part of the problem, I think, lies in the ‘charismatic’ management style often seen in big corporations. By this account, chief executives really are something special. They’re godlike individuals, possessed of unique moral and intellectual skills, and personally responsible for every success of their corporation (though, remarkably, almost none of its failures). Management gurus peddle this kind of nonsense all the time; I’m not joking about the God stuff either – if you’re interested and have an hour and some to spare, here’s guru Ken Blanchard explaining how to ‘lead like Jesus’.

Or take the late Steve Jobs. No need to say more.

No one is allowed to question, or to puncture the chief executive’s bubble. The smallest misdemeanour can lead to tantrums and dismissals: remember no-longer-Sir Fred Goodwin and his pink wafer biscuit apoplexy? Jobs, by all accounts, couldn’t get in a lift without firing someone, and used to lob prototype iPods into his fish tank to show his cowering engineers they could be made still smaller (bubbles = space = room for improvement).

The very worst chief executives remind me of Roman politicians, who squirmed their way up the greasy pole of provincial administration until they reached the top and could squeeze whole countries for all they were worth. Here’s Jimmy Cayne, who worked his way up from traveling salesman to chief executive of giant investment bank Bear Stearns, and who was playing bridge in another state when his bank went under. There’s Verres, a corrupt governor so uninterested in the world outside his own pleasure palace that he knew it was spring only when the first bouquets of flowers arrived. Whether reported by the Wall Street Journal or Cicero, there’s not much difference.

But here’s the rub. We hold our national leaders to account on the very terms we should level at chief executives. While chief executives stuff themselves with gold until they burst, we harangue would be prime-ministers about balancing the books, or what they can offer GB plc. As the sociologist William Davies has pointed out, we have achieved an ‘ontological parity’ between chief executive and PM, puffing up business leaders as charismatic visionaries, and grinding down politicians through relentless business-style audit.

Pity Natalie Bennett, not knowing how she would fund the building of her half million starter homes. Who cares, she should have said. When the banks were in trouble, the Chancellor found a trillion pounds down the back of the sofa – I’m sure a few little houses won’t even be noticed. Doesn’t the fact that five hundred thousand families suddenly have somewhere to live, that they are no longer socially and economically excluded, seem in anyway important to you, Mr Ferrari?

Chief executives, ever ready to weigh into political debate, might be loath to admit it, but states and corporations are not the same thing. Corporations, in the end, exist to make and sell us things: lawnmowers, burgers, mobile phones and face cream. They pay taxes in Luxemburg or the Bahamas and hire the cheapest labour they can find on the worst possible contracts. And, as Lehman Brothers showed us, their capacity for inflicting misery is immense.

Nations, on the other hand, should serve and support their people. Their job is to guarantee law, arbitrate fairness, and permit free and flourishing lives for their citizens. Their leaders needn’t be charismatic, but should be decent, upstanding, and empathetic. A bit of humanity, vulnerability – even the occasional trip – goes a long way in showing they have the capacity to know what matters. Sure, Miliband isn’t CEO material. That suits me just fine.

St Andrews’ graduation, 1 December 2014

On 1 December 2014, I was privileged to give the graduation address for our departing students – Master’s graduates and several PhDs. The ceremony took place in the Younger Hall of the University of St Andrews and was streamed live to to watching parents, families, and friends all over the world.


Here’s the text of my address, which, I’m glad to say, was very well received:

‘Chancellor, ladies and gentlemen, and most of all new graduates.

It is a universal human failing to want to have the last word, and I am as culpable as anyone. So what a pleasure and a privilege it is to stand at this lectern and offer you the last words you will hear in your university career, or at least, in this part of it.

And as with so much that you will have heard over the last year, or years, I imagine that you are only half listening; the chairs are becoming uncomfortable, the hall stuffy, and your robes hot. You are looking forward to stepping into the December cold, to processing down North Street and into the Quad, to this final rite of passage and of parting.

Many of you, parents and students alike, have travelled from all over the globe to attend this ceremony. Parents and families, I thank you. Thank you for travelling here today to see your children, siblings and friends graduate. I hope that you have a splendid, happy day and that you are not disappointed by the gaudy, mediaeval spectacle of graduation at this historic university.

More than that, I thank you for the support and encouragement that you have given to those who are graduating today. I’m sure that much of what is being celebrated here could not have been achieved without you.

New graduates, you too have travelled a long way to be here. But it cannot have escaped your notice that you have been on a much more important journey, one of growing, learning, and developing. You are no longer those nervous souls who arrived in St Andrews not so long ago. You have learned so much, and not just from books and lectures.

You now know, for example, how it feels to charge into the North Sea at dawn on May Day – a sensation of which I, and I suspect many others on the stage behind me, remain blissfully ignorant. You have come to know the ancient stones of this unique city, famous for having not one, not two, but three streets. And you understand the quiet satisfaction of living in a town where the last exciting thing to happen was the castle siege in 1546.

You have made friends, building relationships with others that will sustain you through your adult lives. Some of you will have met partners who will keep you company for the rest of your days. These are not the fragile friendships of casual acquaintance, but deep bonds of reciprocity, strong enough to ride out whatever bumps life may throw at you, generous enough to celebrate successes and triumphs joyfully and without envy. Today might be the last time you see a friend for many years, but you can be sure that the friendships you have formed here will transcend time and place.

Metaphors of journey come naturally to graduation and to St Andrews. According to legends of the town’s founding, St Rule was instructed to carry the bones of St Andrew to the end of the earth. I like to imagine the saint arriving, one cold, foggy night, staking his claim and giving thanks that he had finished his wearisome travels. History does not record what he said when the sun rose over Dundee the following morning.

As St Rule would have been painfully aware, journeys are hard work. Travel is much more fun after the fact. Beneath your still-fresh recollections of bonfires on the beach and endless blue summer evenings there are shadows of December exams and nine o’clock lectures in February. A collective shudder runs round the hall as you remember those teachers who challenged your intellects, discomfited your comforts, and unsettled your assumptions. It wasn’t always easy, but you coped, grew, progressed, and now you are passing on, setting out into the next stage of life.

Do not forget what you have learned here. We have taught you to think critically and responsibly. Reflect for a moment, and recognise that you have been blessed with talent, opportunity, and education; gifts of nature, of chance, and indeed, of the generosity of those who have helped you along the way, many of whom have come to see you graduate. It’s good to be fortunate, and today you celebrate just that.

I ask one only thing: that you, who have so much opportunity and possibility ahead, make the best of what you have been given. Do not forget those who are less fortunate. You have studied Management and International Relations. I ask that you, when the time comes, manage thoughtfully and with empathy, organise for flourishing and fulfilment, and work to build a polity worthy of future generations.

Students have been graduating in this University for six centuries. Such history bestows great responsibilities, and you cannot wear it lightly. I’m sure you are up to the task.

But enough talk! The future can wait until tomorrow. Today is your day. Enjoy it to the full, and beyond. My very last word is this: Congratulations!’

Freakonomics, re-redux, and some summer reads…

So, having spent plenty of time putting the boot into Stephen Dubner and Steven Levitt’s Freakonomics series, and its silly oversimplification of rational actor theory, it would have been churlish to refuse to review the latest and hopefully last in the franchise – Think Like A Freak. And do you know what? I actually enjoyed it, even with its well worn van Halen anecdote. So here’s the review, published in the THE. THE Think Like a Freak 072014, or, find it online here.

I also turned up in THE’s summer reads, looking forward to Michael Lewis’ Flashboys – which I have read – and contemplating a return to Latour’s Pasturiazation of France. Here’s the PDF THE Summer Reads 2014 and the link.



…on the radio…

While I was in Canada, I was lucky enough to find my way onto CBC Radio. Anna Maria Tremonti invited me onto her programme The Current – one of Canada’s most popular talk shows – for a half hour chat about economics and society. Find all about it here – it seemed to go down well, and Facebook was clocking up likes in the hundreds.

Later I had a chance to argue with conservative Canadian shock jock Jerry Agar, a free market fan of the best kind. But we parted friends:

PR with Jerry Agar

The show podcast (25 February) is available here. I’m the final segment, the closing AGARment, boom boom.

THE book of the week and podcast

On Wednesday 12 February, I stopped into the offices of Times Higher Education to meet Karen Shook, the paper’s book editor, and to record a books podcast. Karen has a very disarming way about her, and soon had me holding forth on all sorts of things: the limits of social science and the menace of Freakanomics, most of all. The podcast, available here, accompanies a very generous review and placed I Spend Therefore I Am as book of the week. Thank you Karen and all at THE!