Lonely Lord Browne

“There is a prejudice against homosexuals in business”, so says Lord Browne, former head of BP and himself a homosexual, on today’s BBC website. He thinks that the business world is more intolerant of homosexuality than “the legal profession, the media and the visual arts”. He might well have added politics, religious ministry, armed services, many other professions and even the sciences.

Lord Browne is correct. It would be more accurate, however, to say that, in the course of the last century, the large brand-new additional English wave of homosexuality never grew in business as it did in all the other occupations which dominated the establishment. It all started in the early 19th century when the newly arising industrial wealthy sent their boys to the rapidly expanding tranche of relatively expensive private boarding schools where they could acquire the airs and graces of the upper classes. If industrialists themselves weren’t welcome in the highest circles of 19th century England (which they certainly weren’t) then at least their boys would have a chance when they grew up and were “naturally” able to talk and dress appropriately and to be able to understand the menus in top-class restaurants.

What precisely went on in detail in the bedrooms and dormitories of the older schoolboys needn’t be described here. Suffice it to say that, from the boarding schools, the brighter (and often the not so bright) would proceed to university, preferably to the “top” universities of Cambridge and Oxford. By the turn of the 20th century, Cambridge and Oxford Universities were hotbeds of homosexuality among young men. When, finally, these lusty young men left for London (usually) and took up a career, then homosexuality became widely and surreptitiously practised among the highest in the land.

The peak of the additional wave of homosexuality among the upper classes in England was around the 1920/30s. (It was also the case in Germany at that time, mainly among the officer class, and for a similar reason. Bismark had established the first boarding schools in Germany for the sons of army officers during the 19th century.) From then onwards, like all fashions, homosexuality diffused downwards. Pretty well all the 20-class (as I define it for quite different purposes) became more tolerant and thus, inevitably, the practice became legally acceptable.

But not entirely socially acceptable. A homosexual couple walking in the streets daren’t exhibit anywhere near the signs of mutual affection as normal couples do for fear of being spat on or verbally abused. The reason is that, by the time that homosexuality was legalized, the peak of the additional wave had already petered out as it began to lap the upper shores of the 80-class. The normal culture was beginning to reassert itself.

Coming back to Lord Browne (unsurprisingly, ex-Cambridge University!), he is clearly worried that homosexuality among businessmen has never taken on so much as in other sectors. For such an intelligent man he ought to have been more objective and worked out the reason for himself. This is that by far the most businesses are established by entrepreneurs of the 80-class. True, only a very small proportion of these businesses actually grow large enough for their founders to graduate into the 20-class, but there’s sufficient heterosexual ventilation from below to blow away the protective cobwebs that are spun around most other top professions.

More recently, English homosexuals are now making a final heave — that same-sex marriages should be legalized (as is already the case in a dozen other countries). It’s already meeting a big, and probably growing, resistance. Whether the campaign will be successful is a moot point. The declining number of same-sex clubs in our major cities suggests that homosexuality is now on the decline. The BBC is not making it acceptable in comedy shows anywhere near as often as it used to. Although there is still a number of homosexual journalists, newspaper scarcely give the topic any space at all. Most boarding schools — particularly the most expensive — go out of their way to ensure that boys are not deprived of girl company, either in the classroom or in organized social events. Of course, there will always be an irreducible and very low number of homosexuals who have been a constant throughout history but the phenomenal Oxbridge-London fashion of a century ago is now losing its impetus. Homosexual business leaders of tomorrow are likely to be lonelier than Lord Browne is today.

Say’s Law on education

Every country acquires the education its economy calls for, no more and no less. It isn’t the overall standard of education that raises one country’s standard of living above another. If that were the case then China, with its hundreds of thousands of engineering, scientific, maths and economics graduates every year, would already be leading the world in every possible advanced technology and business sector. Instead, it remains in the mass-produced consumer goods department and still has to plagiarize, or to import, its high technology from (mainly) America and Germany.

Innovation is a different matter entirely and depends on a much more subtle blend of features already present in a culture. By my calculations, about 70% of all the Nobel prizes in the sciences have been won by researchers in only three countries — America, Germany and the UK (mostly, but not necessarily, by those who were born there). Yet, in America and the UK (and maybe Germany, too — I don’t know the figures), about half the adult population (and a quarter of newly graduated state school teachers) can’t do maths beyond simple addition and subtraction. Calculations involving percentages or square roots or more than single digit fractions are beyond them.

In the UK, about half of our tenured research scientists were born into the 20-class (those educated in private schools), the remainder from the 80-class (those educated in state schools). Well . . . all one can say is that, compared with the rest of the world, we’re still not doing too badly on the innovation front, whether of new ideas or products. We could do better and, of course, in this increasingly specialized scientific age, we’ll need to do better in order to hang onto some income from trading with others. Our politicians (as in the US) are constantly calling for higher educational standards and, indeed, in recent years, they are even allowing some experiments — Academies and Free Schools — outside the state system run from the Department of Education in London. It will only need a modest proportion of these experiments to do as well as the existing private schools (only 7% of the whole) before we’ll be swimming in bright creative minds.

A preponderance of Academies and Free Schools (particularly the latter) — both in existence and being proposed — lie in and around London because that’s where most of the parents who are deeply concerned about poor quality state education live and work. They’ve been attracted there in the last 50 years or so because they were already among the more talented of the 80-class of the economically declining provinces who migrated to London find better jobs. For vote-catching reasons the government will hope to scatter a reasonable number of Academies around the country in the coming years, but in the case of Free Schools, which are entirely dependent on the initiative and organizing abilities of concerned parents, a large majority are, and will be, in and around London.

My money is on the Free Schools rather than Academies but the evidence as to whether they will succeed or not is beyond my allotted span. My point in writing today’s piece is simply to record for my own benefit that I’ve turned my previous life-long ideas about education on their head. Considering that education is a byproduct of an existing inherited culture rather than its primary cause, now seems to me to be a better way of looking at things than that which still mostly occupies the minds of governments today. It’s a change from Keynesian precepts (shovelling more money into state education to try and reverse declining quality) to Say’s Law (if the supply of high quality education is legally allowed to expand out of taxation [education vouchers], then it will create an increased demand by discriminating parents who are more aware that their children will be entering a more complex world).

An interesting day today

In eight hours’ time, the Initial Public Offering (IPO) of Facebook shares takes place. They will be initially pitched at around $38 dollars each. In my view — as mentioned yesterday — they will ultimately prove to be worthless. “Ultimately” could be the end of today on the New York Stock Exchange, or it could be next week, or it could be in a few months’ time. On the other hand, according to some investment analysts, Facebook shares could be a good long term bet.

What makes today’s IPO so fascinating, however, is that it is being held at a time when the three main economies of the world — America, China and the Eurozone — are in a fragile condition. On the one hand, some commentators are saying that the slightest untoward event in any of those economies could trip off a stock market slide that would, without doubt, bring Facebook down with it. Facebook would then be the least of anybody’s worries.

On the other hand, if Facebook shares were to crash of their own accord today or during the following week or so, then it could trace an ionic pathway up which a bolt of lightning could travel from any of the three basic economies. America’s feeble GDP figure would be revealed as governmental statistical fiction. China’s car showrooms, already bursting at the seams, would stop the Chinese consumer goods chain in its tracks. Greece would be hurled out of the Eurozone whether it wanted to or not.

Dramatic? Over-dramatic? Perhaps. But let’s remember that it was a similar dotcom crash in the year 2000 and Alan Greenspan’s response to it that went a very long way to causing the even greater crash of 2008. Instead of dropping the Fed’s basic rate to the absurd rate of zero, had Chairman Greenspan maintained a sensible one, then the American economy would have had a chance of purging itself of banks and businesses which were already so indebted that they didn’t deserve to survive.

For once, I’m not forecasting as I’m wont to do. But we have to remember that the stock market, the bond market and the whole financial superstructure that is supposed to take us safely into the future depends on daily rumour and sentiment. The emotionality of by far the greatest number of professionals in the financial world who supposedly know what they are doing vastly exceed the small, quiet voices of rational minds thinly scattered here and there. Suffice it to say that I’ll be watching the sales (and the prices!) of Facebook sales today in New York before I go to bed with four ginger biscuits and BBC’s Newsnight to send me to sleep.

Zuckerberg’s frontal lobes

I have never seen interviews that have been so vacuous as those with Mark Zuckerberg in recent days when promoting Facebook shares (on sale tomorrow apparently). Zuckerberg is a smart and highly articulate young man. There’s no doubt about that. His Facebook project has been the most widely publicised launch of anything during the whole of the industrial revolution. There’s also no doubt about that. But whether Facebook will ever amount to being a profit-making business remains to be seen.

Quite beside the fact that usage of Facebook in America, its place of origin, is already falling away, its hoped-for customer base is upside down. It has been a fashion that started among the economically poorest segment of all in an advanced country, namely teenagers. This is quite unlike any other successful product or service that has motivated economic growth during the last 300 years. These have always started by being sold only to the very rich initially, their possession signifying the highest levels of status. They only made their way downwards if they were capable of longer production runs and higher profits (available for subsequent wider investment) among the lower social markets . This applied whether we are talking of Rolls Royce motor cars, porcelain vases, colourful cotton or silk clothing or artificial hips. Even sports and the arts as we know them today started only among the rich who had the money and the leisure to indulge in them initially.

Apart from banner advertisements (those that are consolidating brand images of major firms rather than selling individual products), Facebook has no income. (Facebook’s banner advertisement are probably close to their maximum already.) But herein lies Zuckerberg’s cleverest ploy in selling the loss-making Facebook. In its early years, Google didn’t have an income either! Until Google happened upon classified advertisements linked to search topics, it would still be a plain vanilla search engine (albeit exceptionally versatile when it started). But the search engine was only an intellectual byproduct of the world wide web and then of the personal computer which was, in turn, the mass produced version of quite the most expensive individual product ever invented, the main frame computer. Even the first true personal computers, the IBM PC and the Apple II, were much too expensive for the mass of the consumer market and had to be rapidly mass produced and down-priced before they were widely bought.

And, of course, the latest and cheapest version of the personal computer, is the mobile phone. This, at present, is affordable by most teenagers in the advanced world — hence the Facebook craze. Unfortunately, however, teenagers are not only the economically poorest segment in the advanced countries already but they are going to be even poorer in the years to come as adults increasingly shut them out of the world of work by working for many more years themselves. The older age groups are having to do this in order to afford some sort of income for when they are infirm. Almost all private pension funds, except a few exceptional ones, are already bankrupt (occasionally admitted as having “black holes”). Almost all advanced countries, except a few exceptional ones, will never be able to afford more than a token welfare benefit because they have no income-producing investments at all and can only rely on — in theory — a vastly growing personal taxation base..

(Of course, let us remind ourselves, those working adults who are situated between the adolescents and the old have intuited this for the last two or three decades. They have noticed the growing automation of jobs around them and the reduction in their own real incomes as opposed to nominal incomes as expressed with governmentally manipulated money. They have been reducing their number of children because the replacement number of two per woman can’t be afforded any longer.).

If we assume that the mobile phone will become so cheap that even the growing millions of jobless teenagers and young people will continue to afford them by one means or another, then what use will 100, 200, 300 or 1,000 “friends” on Facebook be to them? What they will need is what teenagers have always needed. They will need just two or three friends, or two or three friends of relatives, or two or three relatives of friends who know of a job opportunity. This has always been by far the largest job selection agency and will continue to be. Unfortunately these real friends are going to be in increasingly short supply.

No, Facebook hasn’t a chance of success. Even if Facebook tries out an Amazon Books strategy and has a vast catalogue of goods that are suitable for teenagers, the growing joblessness and lack of money will bang that idea on the head. Instead of being a future consumer market, the jobless young are more likely to use their mobile phones to gather 100, 200, 300 or 1,000 rioters instead when provoked by one incident or another.

Mark Zuckerburg has committed the sin which most Harvard-educated personnel (and those from similar elite universities) are wont to do. This is to project their own ideas — and confidence about future jobs — into the minds of everybody else of their age group.

But herein also lies possibilities that conventional politicians ought to realize (if only they had time to read more widely or have neuroscientists to dinner). Ninety-five per cent of all seminal ideas take place in the brains of young people up to the age of about 30. Up until then, their frontal lobes are still growing and developing. That’s when the original work of almost all Nobel science prizewinners was actually done (and the greatest books, works of art and music created). After the age of about 30, creativity dies off quite steeply. Among the millions (billions?) of jobless teenagers around the world it is almost inevitable that small groups of them are going to tutor themselves on the Internet to the highest levels of future skills and break their way into the protective 20-class of specializations. It is almost inevitable also that small groups are going to start different sort of self-governmental schemes that will gradually develope and (in a century or two) replace the increasingly inept top-down nation-states of today. But for both purposes, they’ll be using Google, not Facebook.

The ONLY solution

Never before — in the 200,000 year history of mankind — have populations decided to go extinct. But that is exactly what might happen in more than a score of advanced countries in Europe. By deciding to spend their incomes on the full standard kit of consumer goods, services and leisure experiences rather than two (increasingly expensive) children per woman, populations will go into steep decline once the present crop of excessively old people dies off.

Whether European countries will completely re-stock their numbers in the years to come by continuing to encourage the poor of Asia, Africa and the Middle East to immigrate remains to be seen. For the last 30 or 40 years, this has been the surreptitious policy of senior politicians and civil servants in order to maintain a sufficiently large taxation base. But whether they’ll continue to get away with it remains to be seen. Even while indigenous populations are declining, they may also decide to elect extreme right-wing governments or even old-fashioned dictatorships which will finally erect efficient barriers. If this happens, then, at some future stage, European adults might decide to have more children and thus stabilize their populations (albeit at much smaller numbers than today).

Stabilization of populations would only occur, however, when the twin trends of ever-increasing automation and ever-increasing growth of specialized skills balance up. That is, when the size of the consumer market matches up with the necessary jobs which provide the market with desirable goods and services, and maintain the basic infrastructure. This is the natural equilibrium of what has occurred during, say, 190,000 years of our existence. During the most recent 10,000 years of our agricultural and industrial eras, this self-balancing act has only been interrupted for brief periods by mass warfare.

Sooner or later, the poor of mankind — such as they might exist — will begin to reach a European standard of living and go through the same balancing process as we are now starting. Of course, the whole of mankind might be wiped out by an unforeseen asteroid or a killer virus that will have such a long gestation period that it will be undetectable even as it spreads around. But, unlike Martin Rees, Astronomer Royal, Master of Trinity College Cambridge and past President of the Royal Society, who doesn’t give us more than a century’s future existence, I remain optimistic. I believe we have at least a few centuries yet until we reach the only possible solution.

Why the Dalai Lama will win

The only reason so far for the success of China is that it has copied all the consumer products that have been invented in the West and as much of the latest technology as it can lay its hands on. However, since 1901, when Nobel prizes were instituted (and also when all the technologies and scientific ideas of the West were almost fully available to China), the country has won only 9 scientific prizes whereas America, Germany and the UK have won over 320 between them. Unless China were to radicalize its highly authoritarian education system, which squeezes out the creativity of its children from their earliest years, then it’s unlikely to win more than a dozen more scientific prizes in the next century (except, of course, for the rapidly increasing number of Chinese scientists who will have been taught in Western schools and who dare to think laterally because they have absorbed the non-Confucian culture).

In balance of payments terms, China is going to be successful for a long time yet. It will need another 20 years or so to bring its coastline population of 600 million up to the average standard of living of the West (or as we ‘enjoyed’ it prior to 2008). It will take another 30 or so years for China to bring the rest of its 700 million rural population up to scratch even if all goes well with sufficient available world resources (in competition against the resource requirements of at least 2 billion in India, Brazil and Indonesia).

I cannot see the second phase occurring in China because the major cities of the coastline will probably wrench their way out of centralized control and become largely independent city-states as, indeed, Hong Kong has largely remained since the British released their (non-democratic) control in 1997. The new provinces will not only monopolize the production of profitable exports but also the resources that are imported. Like the 80-class (that is, inadequately educated majority) of the Western countries, which is now increasingly dependent on state welfare benefits, the poor of the rural interior of China will, quite simply, not replenish themselves in sufficient numbers and will largely die out.

What will be the future of the 20-class (that is, the adequately educated and connected class) of the West? More specifically, what will be the future of the 20-class in America, Germany and the UK? Together with a small number of exceptionally creative cultures such as Finland, Israel, Singapore or Switzerland, this is where the leading edge of research in neuroscience and genetics is to be found and likely to be maintained in the coming decades. The reason for this that both of these research areas are so complex that they increasingly require high connectivities between specialists researchers and large teams of researchers. Thus nascent ideas and commercial development in these two growth sectors will not be anywhere near as copiable as they have been hitherto in, say, engineering, nor can key personnel be recruited as individuals.

But the 20-class of the West is also not replenishing its numbers itself at present. Will it, too, decide to fade away voluntarily as the increasingly impoverished 80-class has been doing for the past 30 years? Hardly. As the population falls away, and as immigration resistance of the West intensifies in order not to share their increasingly meagre welfare benefits, then the beauties and attractiveness of the natural world will be all the more available. And, as any parent knows, such enjoyment is greatly reinforced when there are children to share them with. The 20-class is likely to start having family sizes above two children in the coming years as they survive the present recession in good heart. But even if the 20-class doesn’t breed enough children, neuroscience and genetics can help them specifically (in addition to their broader commercial development).

Neuroscience tells us that large-scale rear-brain culling takes place before puberty. Too much culling (because of a poor informational and attention-ful family environment) is capable of blunting a child’s mind greatly by the age of 5 years-old and almost completely so by the age of puberty. An inadequate brain is then largely irremediable. Skills that haven’t developed by then are never teachable from then onwards to any high level. Also, genetics tells us that high intelligence is not so much the product of a few special genes but several hundred of them. High talent is more the product of DNA which does not have too many sub-optimal genes, whether dominant or recessive, rather than having anything unusual about it. Any ‘ordinary’ child, given a secure, affectionate upbringing with good socializing and educational opportunities at a very young age, and with good skill training to follow and a daily existence with sufficient spare time to think can produce what we call ‘genius’ or at least a ‘brilliant’ mind.

And how will the 20-class recruit the talented numbers they require for continuation? It will do so in exactly the same way that the Dalai Lama used to be recruited by the Buddhist monks of Tibet or the Living Sun Goddess was (and continues to be) in Hindu Nepal. And if you want to know how they were recruited without the modern benefits of neuroscience and genetics, but fully consonant with them, please write to me. I have gone on long enough this morning and breakfast calls.