Chartered Actuary: a message to students

13. November 2024 · Write a comment · Categories: Actuarial, Professions, Regulation

I last talked about Chartered Actuary status here two years ago when the Institute and Faculty of Actuaries (IFoA) set out how they had decided to introduce it. I focused then on what we needed to do to make this a change worth making: like offering roles for actuaries on completion of core practice modules; not necessarily insisting on further actuarial specialisation as a requirement for senior roles within firms; getting comfortable with a much wider range of specialisms amongst those we consider to be actuaries. Some were already doing this then, but most of us have still not travelled very far in this direction. And I note that the Route to Becoming An Actuary still features a diagram where an IFoA Associate is shown as a milestone on the way to the final destination of becoming a Fellow.

But the fact is that Chartered Actuary status has finally been launched this week. I am a retired actuary now but I have claimed chartered status nevertheless because it is a designation I very much think needs to be supported. However ultimately the success of it will not depend on employers or even the profession itself, and certainly not on retired old duffers like me. It will depend on students now and in the future. Therefore, in the unlikely event that any actuarial students are reading my blog, I am addressing this piece directly to you.

Whether you are a student who, like most actuarial students, started work with no or perhaps just one or two exam exemptions, or a graduate from an actuarial science undergraduate programme with most or all of the core practice exemptions, this means that the barriers to you starting to take your actuarial career off in the direction you want it to go in and think the world needs just got a bit easier to jump. If you are a graduate from some actuarial MSc programmes or even possibly a single qualification like the MMath in Mathematics and Actuarial Science at the University of Leicester (last plug for my former employer, I promise), you may be able to claim Chartered Actuary Associate status already.

Using it may not necessarily be so easy, particularly in the early years. Some employers may be resistant to the new designation. But if you are planning to join the profession to make a positive difference in the world, and that is in my view the best reason to do so, then you are going to have to shake a few things up along the way.

Perhaps there is a type of actuarial business you think the world is crying out for but it doesn’t know it yet because it doesn’t exist. Start one.

Perhaps there is an obvious skill set to run alongside your actuarial one which most actuaries haven’t realised would turbo-charge the effectiveness of both. Acquire it.

Perhaps your company has a client who noone has taken the time to put themselves in their shoes and communicate in a way they will properly understand and value. Be that person.

Or perhaps there are existing businesses who are struggling to manage their way in changing markets and need someone who can make sense of the data which is telling them this. Be that person.

Whatever you decide to do, do it with a chartered actuary designation, whether associate or fellow, as a badge that you are prepared to look beyond traditional ways of doing things and, where the historical way of doing things is obviously no longer working or could clearly be massively improved, do the hard work of rethinking things from first principles if necessary. If you do it right, this can be seen as a badge for actuaries who are both rigorous and flexible in their thinking. If that happens, the chartered actuary designation will flourish and it will also be of maximum benefit to you too.

So now it is up to you what becomes of Chartered Actuary status. I am really looking forward to watching what you do with it!

The Day After The Night Before

06. November 2024 · Write a comment · Categories: Uncategorized

I have been reading many accounts of what happened last night. Richard Murphy was clear what he thought:

I reserve the right to change my mind on this and to revisit the issue, but my immediate feeling is that there is one point of common ground between those who have voted for Trump and those who read this blog, and that is that they have rejected neoliberalism.

Biden’s economic boost after Covid was not felt by most Americans. The growth went to the already rich.

Most Americans do not want to preserve an economic system that very clearly does not reward them and has no intention of doing so.

Many Americans already feel alienated within their own country.

The Biden support for Netanyahu’s tyranny in Gaza made many feel that the Democrats had already embraced fascism, so what would the difference be if they did so with Trump?

And, I have no doubt many Americans have good reason to fear the consequences of neoliberalism that it pretends do not exist, but which are readily apparent, from massively divided societies to fears of climate change, to constant reminders of inequality, to the loss of hope and the denial of opportunity as a consequence of ever-growing divides in a society when neoliberal politicians long ago ceased to tell the truth. In that situation, Trump might look mad and a terrible choice, except for the fact that neoliberalism and its perpetuation look to be even worse because there is a guarantee of failure to come in it, whereas Trump only offered the possibility of something that might be terrible.

David Allen Green, on his Empty City blog, recalled the essay written by Neil Postman’s son, Marc, at the time of Trump’s first election victory, about his father’s prophetic book Amusing Ourselves to Death. This postulated that we have been too worried that our future might resemble 1984 while a future strongly resembling Brave New World took shape instead. In it he quoted his father:

What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared the truth would be drowned in a sea of irrelevance. Orwell feared we would become a captive culture. Huxley feared we would become a trivial culture.

Meanwhile Jason Hickel’s analysis on X ended with a call for action:

The deeper reality is that liberalism has failed, liberalism is dead, and people urgently need to wake up to this fact and respond accordingly. It is a defunct ideology that cannot offer any meaningful solutions to our social and ecological crises and it must be abandoned.

Democrats have proven over and over again that they cannot accept even basic steps like public healthcare, affordable housing, and a public job guarantee – things that would dramatically improve the material, social and political conditions of the working classes. And they cannot accept a public finance strategy that would steer production away from fossil fuels and toward green transition to give us a shot at a liveable future.

Why? Because these things run against the objectives of capital accumulation. And for liberals capital is sacrosanct. They will do whatever it takes to ensure elite accumulation, it is their only consistent commitment. At home, they suppress and demonize progressive and socialist tendencies. Abroad, they engage in endless wars and violence to suppress input prices in the global South and prevent any possibility of sovereign economic development.

The Democrats have done all this purposefully and knowingly, for my whole life, not as some kind of “mistake” but in full consciousness that it is in the interests of capital.

And because liberalism cannot address our crises, and because it crushes socialist alternatives, it inevitably paves the way for right-wing populism. They know this pattern, and yet they risk it every time – this election being only the most recent example. They did it in 2016, when they actively crushed the Sanders campaign and sent Trump to the White House. They do it because ultimately they (and I mean the liberal ruling class here) don’t really mind if fascists take power, so long as the latter too ensure the conditions for capital accumulation. They 100% prefer this to the possibility of a socialist alternative.

So, progressives have to face reality. The dream of “converting” the Democratic party is dead. This is now a fact and it must be accepted. The only option is to build a mass-based movement that can reclaim the working classes and mobilize a political vehicle that can integrate disparate progressive struggles into a unified and formidable political force and achieve substantive transformation. This will take real work, actual organizing, but it must be done and that process must begin now.

This was taken up in turn by Roger Hallam (who co-founded Extinction Rebellion, Just Stop Oil, Insulate Britain, the cooperative federation organisation Radical Routes and the political party Burning Pink, and who is currently, ridiculously, imprisoned for 5 years) with a suggested plan. As he says:

Progressives and the Left fail repeatedly because they are wedded to an Enlightenment secular religion that assumes people respond to ideas over emotions and ideology over connection. They’re embarrassingly mistaken. Fascist men, for instance, often abandon their views after forming personal relationships—such as getting a girlfriend. There are countless stories of individuals entering far-right spaces, listening, building personal connections, and subsequently helping others to leave those spaces. During the recent English riots a group of Muslims, faced with an angry crowd outside their mosque, offered food and listened to people’s concerns. Conversations ensued, tensions eased, and constructive dialogue began.

You can sign up to join this social movement here.

This in turn chimes with what George Monbiot and Peter Hutchison (and Lucas Sabean in the film) are saying in their new book The Invisible Doctrine, where they talk about a politics of belonging as what is needed to replace neoliberalism.

And just to cap it all off, the book I have been reading for the last 2 weeks (the excellent The History of Ideas by David Runciman, also available as a podcast here) arrived at the final chapter on Judith Shklar this morning and was suddenly discussing Trump:

Trump is a cruel politician. Cruelty is one of his calling cards. He can be cruel in how he treats the people around him and he’s often cruel in how he goes after his critics, mocking them and seeking out their vulnerabilities. He goes for the weak spots of his opponents and he takes no prisoners. To be in Trump’s orbit is to be vulnerable to degradation and humiliation. But Trump is not a hypocrite. Indeed, that is one of his great sources of appeal as a democratic politician – he is as he seems. He appears to be willing to be as unpleasant in public as he is in private. All the accounts I’ve read of how he treats the people who have worked for him – in the West Wing, in his businesses, even the members of his family – are reminiscent of how he treats his political opponents: bullying, mockery, rule by fear. Trump is himself all the way through – cruel all the way through – which makes him consistent. The opposite of hypocrisy, on some measures anyway, is sincerity. There is a case for saying that Trump, though he is an inveterate liar, is also a sincere politician. He is sincere about being a liar, he doesn’t try to hide it or to dissemble his true character. There is a brazenness to it.

Our pervasive intolerance of hypocrisy is one of the things that allowed Donald Trump to wind up as President of the United States.

This came out earlier this year, so is referring to the 2016 election, but it still rings true for me. We spend a lot of our social media activity and journalism on trying to expose and then punish public figures for hypocrisy. We don’t expend nearly as much effort worrying about cruelty. Judith Shklar thought this was a mistake and I agree with her. Of course we need to set up our institutions to be honest and not hypocritical but people will always have things about themselves that they do not want the rest of us to know about. And, hard-wired as we are to obsess about finding out such secrets, we often lose focus on what is more damaging to our society. I will finish with one last Trumpian extract from The History of Ideas:

The emergence of an unauthorised recording of a talk she [Hillary Clinton] gave to a Wall Street bank dogged her campaign – it apparently gave the lie to her public protestations of being tough on financial fat cats. Worse, she seemed to know it was damaging – why else go to such lengths to cover it up? It did her far more damage than the emergence of a tape in which Trump talked in demeaning, sexualised terms about women (“Grab ’em by the pussy”), because in Trump’s case it was what you’d expect him to say.

Our relationships with each other and how we behave within them are, I believe, the most important things in most of our lives, not the finer details of the political ideologies we favour. I fear that Trumpism is growing in the UK too and we need to keep our current closeness (what Roger Hallam refers to as our “proximity”) to each other and indeed build on it if we are going to repel it and build something better in its place.

Carolian Radicals

20. October 2024 · Write a comment · Categories: Birmingham, Economics, Regulation
The Stonebreaker is an 1857 oil-on-canvas painting by Henry Wallis. It depicts a manual labourer who appears to be asleep, worn out by his work, but may have been worked to death as his body is so still that a stoat has climbed onto his right foot
The Stone Breaker, 1857 Artist: Henry Wallis. Creative Commons 0 – Public Domain. Photo by Birmingham Museums Trust, licensed under CC0

The Europe of the 1830s and 1840s was a place of extreme political ferment which led to long-term changes to the way in which all Europeans, including the ones across the English Channel, saw themselves. According to Christopher Clark’s excellent Revolutionary Spring – Fighting for a New World 1848-1849: “parallel political tumults broke out across the entire continent, from Switzerland and Portugal to Wallachia and Moldavia, from Norway, Denmark and Sweden to Palermo and the Ionian Islands. This was the only truly European revolution that there had ever been.”

However you wouldn’t know it from the current Radical Victorians exhibition at the Birmingham Museum and Art Gallery. This explores three generations of progressive British artists working between 1840 and 1910: the Pre-Raphaelite Brotherhood and their circle; the second wave of Pre-Raphaelite artists who gathered around Rossetti from the late 1850s, including William Morris and Birmingham-born Edward Burne-Jones; and a third generation of designers and makers associated with the Arts and Crafts movement, working from the turn of the century to just before the First World War.

It’s a very good exhibition, but the only painting I could find in it which referred to the economic crises of the 1840s and 50s at all was the one above, of a stone breaker worked to death. There was also the famous one of a couple emigrating to Australia (shown below) which may be a response to domestic economic circumstances although, based on a self portrait of Madox Brown as it is, it may just as well be a response to the lack of art appreciation in the UK:

The Last of England, 1852-1855 Artist: Ford Madox Brown Creative Commons 0 – Public Domain. Optional attribution: Photo by Birmingham Museums Trust, licensed under CC0

But that is it! Despite the Victorian Radicals’ believing that art and creativity could change the world and be a real force for good in society, their gaze rarely moved from “realistic” depictions of their friends posing in rustic or suburban landscapes at a time of massive social upheaval.

At the time Britain was rather smug about having avoided revolution, but the evidence suggests that it could have easily been very different were it not for the measures taken by Robert Peel’s Government: the reintroduction of income tax on upper middle class incomes in 1842; the Bank Charter Act of 1844 which suppressed financial speculation by restricting the right to issue bank notes to the Bank of England only and creating a maximum ratio between notes issued and the Bank’s gold reserves; and the repeal of the Corn Laws in 1846 which considerably weakened the landlords’ grain monopoly and allowed for grain imports which did reduce prices but fundamentally changed the structure of the UK economy. This was explosive stuff which brought down Peel’s government and split the Conservative Party.

Policing in the UK was also very muscular. 15,000 Chartist activists were arrested in 1843 and a meeting of 150,000 Chartists at Kennington Common in 1848 was met by 4,000 police, 12,000 troops and 85,000 special constables (volunteers with clubs, including the future Emperor Napoleon III who was in exile from France at the time). There were so many transportations to the colonies that there were mass protests in Australia and the Cape. There were riots in Jamaica and British Guyana when sugar tariffs were dropped to reduce prices back in the UK and when, rather than burdening British taxpayers further, taxes were applied in Ceylon (now Sri Lanka), a protest movement numbering 60,000 was created.

In June 2024, Michael Marmot and Jessica Allen published A programme for greater health equity for the next UK government. In it they say the following:

Much of what went wrong with respect to the social determinants of health equity in the period after 2010 comes under the rubric of austerity, imposed by a Conservative Party led coalition Government. In the 2020 Marmot Review, we reported that in 2010 public sector expenditure had been 42% of GDP. Over the next decade, public sector expenditure went down year on year. By the end of the decade, public sector expenditure had become 35% of GDP. An annual reduction of 7% is enormous. In 2023, total UK GDP was £2·687 trillion. 7 7% of that is £188 billion. At today’s prices, annual public sector expenditure in 2019 was £188 billion less than it was in 2010. It is then not a surprise that relative child poverty went up— the steepest rise among 39 OECD countries; 8 absolute measures of destitution increased; welfare payments apart from pensions did not keep pace with inflation; spending on education per pupil went down; the housing shortage became more marked and homelessness and rough sleeping increased; and increases in health-care expenditure fell sharply compared with historic trends. Alongside these major changes, came the slowest improvement in life expectancy in the UK during the decade after 2010, of any rich country except Iceland and the USA.

We have a new Government, 100 days in, in our new Carolian era. What will future generations say about who this government answered to? Will it turn out to have been our modern stone breakers, working themselves into sickness and early death below the radar of a modern media at least as divorced from the concerns of ordinary people as the Victorian Radicals were? Or will their hard decisions turn out to necessitate other priorities? Time will tell.

Joe Sacco – The War on Gaza

20. September 2024 · Write a comment · Categories: Cartoons

Joe Sacco has been chronicling the moral issue of our age in a series of very powerful cartoons. If you have not come across these already there is a link to them here.

The Cartoon Gallery is now live!

19. August 2024 · Write a comment · Categories: Cartoons

I thought it was about time I collected together some of my cartoons from the last 11 years in one place, so have created a page for them which you can see here. Not sure if I am getting any better as the years go by, but rest assured that I have no intention of stopping any time soon!

Tina and Tiaras

01. August 2024 · Write a comment · Categories: Climate Change, Economics
Reconstructed image of Nebelivka (Forensic Architecture 2023)

One of the most idiotic things that Margaret Thatcher ever said is that “there is no alternative” or TINA, as it became known. More aimed at the “wets” in her own party than anyone else, it has become for some a statement of policy.

As David Wengrow pointed out at last year’s Hay Festival, talking about the excellent Dawn of Everything co-written with the late great David Graeber, of the 200,000 years of human history, the furthest back we can currently get back to and have some idea of how we might have lived is only around 30,000 years. Most of the other 170,000 years is a mystery to us. Have we always lived the way we do now? No, obviously not, even in the bit we do know about.

However the point the TINA people are making is that, once your society gets to a certain level of development and complexity, there is no alternative to the system of nation states operating within economies driven by globalised capital and all of the constraints that puts on any particular government’s policy options. So is that true?

Again apparently not. The Nebelivka Hypothesis exhibition at the Venice Biennale, which Forensic Architecture produced in partnership with David Wengrow, shows one example of a complex society which seemed to be constructed very differently:

Between the southern Bug and Dnieper rivers of central Ukraine, less than a metre below agricultural fields, geophysical surveys reveal the unsuspected legacy of 6,000-year-old settlements, similar in scale to the early cities of Mesopotamia. But these early Ukrainian cities are centre-less. Or rather, they are organised as concentric rings of domestic buildings, around a mysterious open space. No trace is found of temples, palaces, administration, rich burials, nor any other signs of centralised control or social stratification.

Even within the 30,000 years for which we have evidence, Graeber and Wengrow have shown how the archaeological evidence indicates that bureaucracy and hierarchy are not necessary in complex societies. Another prominent example of this, in addition to Nebelivka, is Poverty Point, in modern Louisiana. Constructed between 1700 and 1100 BCE by hunter gatherers, it had huge amphitheatres on a scale to match Athens but no temples or palaces.

There were other societies who flipped their social structure according to the seasons – for example, in the Great Plains in the main hunting seasons, when strict discipline was needed, a police force and hierarchy emerged, which then dissolved again when the need for it had passed.

Then there was Teotihuacan, a massive Aztec city of around 100,000 people where, until about 300, the colossal feats of engineering created pyramids and temples which had characterised the city up to that point stopped. Temples were desecrated and there was no new pyramid construction. Instead they started to build very high quality stone apartments for family units, with internal drainage, finely plastered floors and walls, providing comfortable accommodation for most of the city’s residents. Were they likely to be operating the same TINA system of the pyramid builders? It seems highly unlikely.

I had been struggling to imagine a society which flipped from one form of social organisation to another until I read The Gallows Pole by Benjamin Myers, about a Yorkshire valley in the 1760s. What both the TV adaptation (really a prequel of the book) by Shane Meadows and the book do in different but complementary ways is show how a society which had been working in one way might, under considerable pressure to survive, suddenly start operating in a completely different way with a totally different social hierarchy, switching from a rather ambivalent allegiance to King George III to a real devotion to the King David Hartley who had, at least temporarily, saved them from the starvation caused by the collapse of the wool market following the end of the Seven Years War in 1763.

The Cragg Vale Coiners’ attempts to evade detection led to a couple of murders before they were eventually hunted down by the authorities and that particular flipping of social organisation was snuffed out. How important it was that it was snuffed out is underlined by Christine Desan in the 18th century architecture of modern money, which describes this experimental time for money operating in the economy:

At the end of 17th century, the English resolved the debate over money they had conducted since the Restoration. For the first time, bank currency written against public debt circulated. It could be redeemed for silver or gold coin. That traditional medium—coin—would be reformed according to the notably non-traditional theory that it was a static amount of metal. An auxiliary kind of currency expressly based on the government’s own issue and promise of revenues, Exchequer bills, also began to circulate. The new order was a work in progress. In ways its authors only vaguely anticipated, the design was powerfully productive of modern capitalism.

So it seems that there are always alternatives.

Meanwhile one of the most pernicious examples of TINA is in response to the challenge of climate change. Chris Shaw’s appearance at the Dark Times Academy launch yesterday reminded me of this. Chris was talking about his book, Liberalism and the Challenge of Climate Change. In a wide ranging talk, he discussed the problem with the cult of the individual that liberalism has created getting in the way of collectivist approaches to shared problems like climate change. The book looks at how the philosophical and ideological challenge climate change poses to the legitimacy of free-market liberalism has been marginalised, closing off the possibility of imagining a different kind of future for humanity. Text book TINA.

And this is a particularly ridiculous use of TINA, when it is so obvious that there are alternatives to the relentless increase in habitat (including our own) and biodiversity destruction in lock-step with the ever-increasing and intoxicating levels of carbon we are filling the global atmosphere with. I discussed some of the arguments raging amongst those grappling with these challenges in my previous blog. But, rather than joining the discussion about the huge societal changes needed, we are instead told that fiscal rules are the priority for the current government and that any green new deal spending will need to wait until “later in the parliament”.

As Chancellor, Rachel Reeves has gone further, with a phrase which I really hope does not come to define this government:

If we cannot afford it, we cannot do it.

This appears to be a deliberate, almost Animal-Farm-level, reversal of the famous quote from Keynes (from a 1942 talk for the BBC – transcript sourced from here):

Let us not submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income … Why should we not add in every substantial city the dignity of an ancient university or a European capital … an ample theater, a concert hall, a dance hall, a gallery, cafes, and so forth. Assuredly we can afford this and so much more. Anything we can actually do, we can afford. … We are immeasurably richer than our predecessors. Is it not evident that some sophistry, some fallacy, governs our collective action if we are forced to be so much meaner than they in the embellishments of life? …

Yet these must be only the trimmings on the more solid, urgent and necessary outgoings on housing the people, on reconstructing industry and transport and on replanning the environment of our daily life. Not only shall we come to possess these excellent things. With a big programme carried out at a regulated pace we can hope to keep employment good for many years to come. We shall, in fact, have built our New Jerusalem out of the labour which in our former vain folly we were keeping unused and unhappy in enforced idleness.

If we really are the complex sophisticated developed society that we think we are, then it’s time to put a tiara on Tina and start seriously discussing alternative approaches to all our problems.

The Many Shades of Hope and Despair

31. July 2024 · Write a comment · Categories: Actuarial, Climate Change, Risk

The biggest battle in the climate sphere used to be between climate deniers and climate scientists, perhaps the battle we are most used to. Some, like Michael Mann for instance, are still earnestly fighting this one, but at the recent UK election, only 14% of voters opted for the one climate denial party (Reform). In fact the climate deniers are now more frequently climate denier deniers, ie denying they are or ever have been denying.

Then last year the biggest battle seemed to have become between climate campaigners and climate doomers. Rebecca Solnit wrote an exasperated piece in The Guardian in July last year called We can’t afford to be climate doomers, which drew an equally exasperated response from Jem Bendell called Let’s tell the moodsplainers they’re wrong and then get back to work.

I think Solnit clarifies most starkly what her argument is all about when she talks about hope:

Hope is not happiness or confidence or inner peace; it’s a commitment to search for possibilities.

However Bendell is also focused on searching for possible solutions. He quotes the Kenyan climate activist, Dr Nyambura Mbau, who argues that “The millions of people being uprooted by climate change do not benefit from the ‘stubborn optimism’ of environmental elites. Instead, they will be better served by the stubborn realism of the experts and activists now brave enough to call for urgent degrowth in rich countries and fair adaptation everywhere.”

Then there is that increasingly less marginal idea of degrowth. Only this week, James Meadway, Aashis Joshi and Jason Hickel had a fairly heated exchange on X about the recent paper by Hickel and Sullivan called How much growth is required to achieve good lives for all? Insights from needs-based analysis. Joshi felt that the degradation already caused by climate change made the outcomes possible via better distribution of wealth suggested by Hickel and Sullivan unachievable. One of Hickel’s tweeted responses went like this:

To say you’re happy to live in a world where you get to use a phone and laptop, but these should be actively denied to people who don’t have them because… ecological collapse might happen? Not acceptable.

I saw another take on this by Chris Shaw earlier today at the Dark Times Academy launch event. He seemed to share many of the views set out by Bendell above, and his book, Liberalism and the Challenge of Climate Change, goes further in suggesting that liberalism cannot provide us with acceptable climate solutions as long as it continues to present net zero as solving all our problems rather than as the least worst option that will still leave us with a much depleted global environment. His dismissal of degrowth revolved around the lack of narrative of how we get from here to there, specifically the dramatic movement of political power that would be required. However amongst the academics presenting their new courses for the Academy, Piers Locke’s Future Thriving looked like it would present some challenges to Shaw’s critique.

It seems to me that there is room for different takes on the optimism/realism axis here. For instance Simon Sharpe’s excellent Five Times Faster, while not shying away from the size of the task ahead on decarbonising, definitely has a feel-good quality to it. It is designed to wake us up to the possibilities offered to us by exponential technological change and social tipping points. By contrast, the Institute and Faculty of Actuaries’ Sustainability Group’s publication earlier this year, Climate Scorpion – the sting is in the tail, is all about waking people up to a higher level of climate risk than they may previously have been aware of. Meanwhile Sir David King, former UK Government Chief Scientific Adviser, is currently Chair of the Climate Crisis Advisory Group and founded the Centre for Climate Repair at the University of Cambridge. He set out his thoughts about where we are here.

So there are many shades of hope and despair on show here (I could obviously have mentioned many more that the few picked out here). What really matters is how fast and how radically we can act as a global species to the climate emergency. And the UK would make a good start if it stopped pretending that £22 billion is a lot of money for a developed country to find.

2029 – A fantasy

25. June 2024 · Write a comment · Categories: Regulation, Science Fiction
Alisdare Hickson from Woolwich, United Kingdom, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

Election day is approaching. It has been a bruising 5 years and the Labour Party’s landslide-super-majority seems like a distant memory. The Conservative Party was not quite wiped out in the end: less than 100 seats but still His Majesty’s Opposition. The Labour Government had well over 400 seats. Once all the levels of government jobs had been allocated: 95 ministers and whips, 41 parliamentary private secretaries, various party roles such as chairman, deputies, etc and perhaps a few trade envoys, and other roles had been occupied like select committee positions, there were considerably in excess of 200 MPs over who the Government had rather less leverage. In the case of the 60 or so MPs seen as left wing, the leverage was close to non-existent after 5 years of vilification of the Corbyn era and all who sailed with her. There had therefore been a great deal of scope for mischief to be made, and mischief duly followed.

This did not concern the new Government too much. It made it clear to all that they were very different to the Corbyn-led party, a point that they had been almost obsessive about (even likening the Conservatives to Corbyn in terms of uncosted commitments) in the 2024 election campaign. The left wingers were not particularly well coordinated in any case, and still felt considerably more loyalty to the Labour Government, however much they disagreed on policy, than the Government felt towards them. In the absence of an issue which unified MPs more widely, the potential damage was limited.

But then a party which had always been a party of protest suddenly found itself with a seat. In fact the Reform Party had 6 seats and very loud seats they turned out to be. However most of their manifesto or “contract” with the electorate was not shared with any of the other parties. The one exception to this – a manifesto position shared to some extent by the Liberal Democrats, the SNP, the Green Party and Plaid Cymru – was a more proportional voting system to replace first past the post (FPTP). This only amounted to 100 votes in total of course, but it was a start.

The Taking Back Our Seats campaign launched in September 2024. Its main argument was that a large number of the seats in parliament had not been granted by the votes cast. Labour had won 40% of the votes, which should entitle them to 252 seats but had instead landed them 435. The SNP had also done well out of FPTP. However the Conservatives, with half the Labour vote, should have expected 126 seats but got less than 100. The Liberal Democrats could also claim they were due 12 more seats. And the Green Party and Reform were the most hard done by: the Greens should have won 57 seats but gained only 4 and Reform’s 6 noisy seats should have been a cacophonous 101.

But even with all of the opposition parties on board, and a steadily increasing majority in the country in favour of changing the voting system as the campaign developed, they still had less than half of the Labour vote in parliament. Before the 2024 election, around half of Labour MPs were in support of Proportional Representation (PR), but their now dominant parliamentary position had caused many of those to reconsider, as well as bringing in a lot of new faces who owed their seats to the unfairness of the current system. About two thirds of Labour supporters were thought to be in favour of PR, which might become more relevant should the super-majority itself suddenly come under threat.

Which it duly did. The early signs were there: talks with the junior doctors, which many had expected Labour to be able to settle quickly and for less than 35%, collapsed and a new wave of strikes were announced. Any lingering thoughts of a honeymoon period ended abruptly in 2025. The summer was a shocker, a late heatwave in August led to hundreds of excess deaths and widespread riots in the most overcrowded prisons in the system in Durham, Leeds, Preston, Wandsworth, Bedford and Lincoln. And then, towards the end of September, just as the nation’s children were setting off to campus, the first universities declared themselves bankrupt.

Coventry and Sheffield Hallam had been in very public difficulties for some time, but it soon became clear how much they had been relying on a very different funding deal from the incoming Labour Government. Different from the Conservatives of course but also from the statements made by the shadow cabinet in the 2024 election campaign. It had taken 12 months for the reality that the Labour Government meant what they had said in the election campaign to come into contact with the universities’ financial plans, but now there was nowhere else to go. Courses were closed and put on teach out mode, almost entirely online. Students expecting to take up places were suddenly back on a hastily organised late emergency clearing programme, with all those who could defer by a year advised to do so.

Bristol, Bournemouth, Southampton, Somerset, Dover, Havering, North Northamptonshire, Cheshire East and Bradford councils all issued section 114 notices in quick succession. There was talk of a large number of other councils not far behind them.

The election polling towards the end of 2025 indicated the fastest and biggest swing in polling history. 40% was now a distant memory as the level of support sank below 30%. The very real danger that the super-majority might be a one term phenomenon was being actively discussed in all the bars and tea rooms of Westminster. The question on everyone’s lips in government was whether something big and popular could be done quickly which might also put some kind of safety net under the Labour seat count. And Taking Back Our Seats suddenly started to make sense to more and more Labour MPs. It might not save all their seats, but the threat that the leverage which had worked on their increasing popular vote so powerfully in 2024 could be turned just as effectively against them in 2029 was being taken increasingly seriously.

A referendum was proposed for the following year. Taking Back Our Seats avoided the trap the 2011 referendum had fallen into when they advocated the Alternative Vote (AV) system as the alternative to FPTP. This had kept the single MP per constituency of FPTP which sitting MPs always claimed was so important to voters, but had been susceptible to charges that it was not really PR at all. AV, or instant-run off voting as it is sometimes called, involves voters ranking the candidates rather than just voting for one. The candidate with the fewest “1” rankings is eliminated and all its “1” rankings are then reallocated to the “2” rankings of those who ranked the eliminated candidate 1st. And so on until one candidate is left.

Taking Back Our Seats instead backed the single transferable vote (STP), which also lets voters rank candidates. However instead of organising constituencies around single candidates, they are clustered (into clusters of 3 to 6 seats). First choices are reallocated if those choices are eliminated as for the AV system, but also if candidates have more votes than they need to get elected. This means that each vote has broadly the same value and results in much more proportionality in outcomes. This compares with the current system at the 2019 election where, according to the Electoral Reform Society, 865,697 votes were required to elect each Green MP, while only 38,264 were needed for each Conservative MP. STV is the preferred voting system of the Electoral Reform Society and is used in the Australian Senate, Ireland and Malta.

The result was an almost exact reversal of the 2011 vote – 70% voted in favour of STV for the next general election and the enabling legislation was passed the following year.

The impact on the party system in Westminster even before the new voting system was used was interesting. Many of the disaffected Labour left group announced that they would not be standing as Labour candidates at the next election, and subsequently a new Socialist Labour Party emerged which attracted many of them, as well as Jeremy Corbyn, who had stood successfully in 2024 as an Independent. Others gravitated towards the Greens. The Conservatives, whose vote was still struggling to overtake Labour despite the many reverses of the last 5 years, were less prone to splits amongst their 100 remaining MPs, but a handful joined Reform and there was a smaller number of transfers between the Labour, Conservative and Liberal Democrat Parties as their positions had moved further apart at the prospect of a STV election.

And now here we are. On the brink of what feels like a big change. Everyone is a little nervous about where we are going with this, but there is also a certain amount of exhilaration in the air. We are all half expecting the politicians to find a way to turn this experiment against us, but also the thought that we will finally have a Parliament which properly represents us is a little bit intoxicating. Still lots of work to do on all the problems we have of course, but perhaps we now have the right tool to start that work.

We shall see…

For more information on the different voting systems mentioned in this little fable, I recommend Lessons Not Learnt, published by the Electoral Reform Society in January 2024.

Changing my social infrastructure

04. June 2024 · Write a comment · Categories: Actuarial, Cartoons, Professions

Posted on LinkedIn on 4 June 2024

This is just a quick personal note to explain the imminent end of my LinkedIn account.

LinkedIn became an important tool for me in 2014 when I became a Lecturer at the University of Leicester and Programme Director for the BSc Mathematics and Actuarial Science there: to connect with potential students and guests to the university, to link up with former students, to publicise the activities of the Leicester Actuarial Science Society and to facilitate a professional network which would be useful to our current and former students. I also posted a few articles here along the way. However I will be leaving the University of Leicester on 30 June and moving to retired status with the Institute and Faculty of Actuaries soon afterwards. Therefore the description I have given myself here (Actuary, Lecturer and Writer at the University of Leicester) will at that point become almost entirely untrue! It therefore seems like an appropriate time to wind up my account here.

According to the latest analytics, I have around 1,400 connections on LinkedIn. Thank you to everyone who has connected with me over the years, particularly if we worked together in some capacity. I have managed to work with some wonderful people over the last 10 years. A particularly big thank you to all of the students who have made the job so enjoyable during that time.

Of those 1,400 connections, over 400 of you list the University of Leicester in your profiles. If you are a current or former student, or indeed anyone who needs to be in contact with a member of the Leicester actuarial team and are currently only connected to me, you should ensure that you are connected to at least one of the following excellent colleagues of mine: Leena Sodha, Paul King or Nigel Sell. You should, in addition, as a current Leicester student, join the LinkedIn group Leicester Actuarial Science Society. If you are a former Leicester student, the group you want is Leicester Actuarial Science Society – Alumni.

I will continue to be in various actuarial WhatsApp groups for the time being and on X (@weknow0). And, if you like any part of what I write, you can always subscribe (for free!) at weknow0.co.uk. For those of you who still want to keep in touch with me by email once I have left here and my Leicester email address has been discontinued, and we have not already shared alternative contact details, please send me a message on LinkedIn (or weknow0.co.uk) and I will be in touch.

With my best wishes for the future to you all.

Water water everywhere

11. April 2024 · Write a comment · Categories: Actuarial, Cartoons, Economics, Regulation

The Telegraph thinks the shareholders are to blame. The Guardian has the Australian investment bank Macquarie in its sights. Martin Bradley’s (the European Head of Infrastructure at Macquarie Asset Management) attempts in Infrastructure Investor at justifying their actions only seem to be making things worse. The FT is using it as an excuse to have a go at the Capital Asset Pricing Model. Count Binface has included in his manifesto for the London Mayoral election a requirement for the company’s management to “take a dip in the Thames, to see how they like it”.

I am talking of course about Thames Water, which really does appear to be everywhere at the moment. But how did we get here?

The management of water works by private companies was originally a legacy of the Victorians – most of the water supply and all waste water services moved into local government control from the late 19th and early 20th centuries. Control then passed from 165 different water supply bodies to 10 regional water authorities in 1974 before these were sold back to private companies in 1989.

Water is obviously a resource vital to all of us, as well as being what economists call a natural monopoly. There have been debates for quite some time now about renationalising the water industry – some arguing that it is too expensive and that a Welsh Water not-for-profit model is the answer, others saying that water, electricity and Royal Mail together would cost less than £50 billion to nationalise and would pay for themselves within 7 years if investors were just repaid what they had invested in the businesses, others saying that water is a failed business and could be acquired without compensation for shareholders as happened with Northern Rock.

What none of these appear to be arguing is that private monopolies should not exist as a reason for renationalising water. We have become so used to monopoly or oligopoly profits in everything from utilities to transport to mobile phones to supermarkets, that we sometimes forget that it has not always been like this.

This point was made to me powerfully in Cory Doctorow’s excellent The Internet Con – How to Seize the Means of Computation. The 19th century debate in the US Senate about monopolies was impassioned. Senator John Sherman of the 1890 Sherman Act effectively put the war against monopolies on an equivalent footing with the War of Independence from the British Crown:

If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.

It’s stirring stuff. The “harmful dominance” theory of antitrust (ie the idea that companies which dominate an industry are potentially harmful just because they are dominant, before they even start to abuse their dominant positions) led to the dismantling of several “empires”, including that of Rockefeller’s Standard Oil Company in the early 20th century.

But then enter Robert Bork. Famous amongst other things for having an extremely dull taste in video rentals, Bork was Solicitor General of the US between 1973 and 1977, under Presidents Nixon and Ford, and Acting US Attorney General from 1982 to 1988 under President Reagan. Bork developed what he called a “consumer welfare” theory of antitrust. This allowed mergers and monopolies to proceed provided prices were lowered and/or quality improved, or even if they weren’t as long as some “exogenous factors” could be blamed for the price hikes or reduction in quality.

Sound familiar? It should, as we all still live in Bork’s world. For example, the microeconomics part of the Institute and Faculty of Actuaries’ Business Economics syllabus relating to imperfect markets reads as follows:

Note the focus on the different ways firms supposedly maximise profits (this approach is fairly thoroughly debunked by Steve Keen here) rather than on the market power they wield. The part which should include the regulation of monopolies reads as follows:

Note the lowering of expectations in 3.1.6: “Why government intervention might not improve market outcomes in practice even if the existence of ‘market failures’ suggest they can in theory”. However the real limitations are laid bare in 3.2. The main targets of “competition policy” in the text book (Economics by Sloman et al) you are pointed to by the core reading turn out to be what are referred to as “exclusionary abuses”, ie where businesses actively prevent effective competition from actual or potential competitors. As the preamble on competition policy in Sloman says:

Competition policy could ban various structures. For example, there could be restrictions on mergers leading to market share of more than a certain amount. (This is the harmful dominant approach, about which no more is said) Most countries, however, focus on whether the practices of particular monopolists or oligopolists are anti-competitive. Some practices may be made illegal, such as price fixing by oligopolists; others may be assessed on a case-by-case basis. Such an approach does not presume that the existence of power is against the public interest, but rather that certain uses of that power may be.

So, in other words, we will leave monopolistic businesses with the power and attempt to detect abuses of that power on a case-by case basis via overworked and under-resourced regulators. Sherman could have never cut Standard Oil down to size with this approach.

Yanis Varoufakis’ contention, in Technofeudalism, is that capitalism now only operates within the framework provided by the most extreme monopolists of Big Tech, with most of us either “cloud proles” (ie wage slaves working for Big Tech under feudal conditions) or “cloud serfs” (ie the rest of us working for Big Tech for free by creating content and sharing our data on their platforms). Big Tech’s size massively increased as a result of the bank bail out of 2008 and additional money pumped through them and the corporations working for them coupled with austerity for everyone else, which was therefore almost totally financialised – leading to the “everything rally” for asset owners.

As Varoufakis says:

When an activist state makes fabulously wealthier the same bankers whose quasi-criminal activities brought misery to the majority, while they are punished with self-defeating austerity, two new calamities beckon: poisoned politics and permanent stagnation.

Again, sound familiar?

It is not too late to push back against the monopolies which control our lives. Doctorow’s big idea in The Internet Con is interoperability, the ability of new technologies to plug into Big Tech’s services, systems and platforms, which Big Tech tends to resist with all of the power at its disposal. He makes a convincing case for how this simple change could reduce the size of Big Tech companies quickly and bring them within the scope of democratic control once more.

And for those businesses which need to be at monopoly scale to work at all? Water, for instance. That sounds like an unanswerable case for nationalisation to me. Perhaps assuming that dominant private companies are bound to be harmful needs to come back into fashion.

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