Imperial turns on the EPF – #defenduss news

A bit more #defenduss blogging. Imperial College, that most monopoly-minded of schools, has come out against the USS valuation and the EPF proposals. And it’s come out swinging, too – check out the statement here.

We are disappointed that you appear to be focused on trying to fit your current proposed benefit solution to the perceived problem without first sufficiently challenging all the assumptions.

We are concerned that without this challenge you risk recommending a major downgrading of one of our employees’ most important benefits based on numbers which are as likely to be modelling artefacts as a reflection of the underlying economic reality.


As you will see in the attached paper, our simplified model includes additional cases to those presented in the USS paper, and those that have used the
actual salary increments and investment performance of the last decade show the model fund in surplus

OUCH. And the hits keep coming. Go read, and push it on anyone you can in UCU, university management, etc. They might meet us half way, after all.

How transparency met total corruption and they beat Napoleon

Reader Simon Hinrichsen’s MSc thesis on the Bank of England in the Revolutionary and Napoleonic Wars is here. He argues that the UK paid for the war by borrowing as much as France, but on better terms, and by printing much more money, but it also succeeded in keeping inflation lower and more stable. Inflation in France was both very high, and also incredibly volatile.

I think what we’re getting at here is the evolution of a financial system, comprising a monetary authority and a finance ministry, that was able to manage the currency, collect taxes, and issue government debt of a quality that made it an attractive financial product (the 3% Consol) to what seems to have been a pretty big market for fixed-income securities, and one that grew substantially over time.

All this printing and issue had to go somewhere. One explanation is that the UK was running a trade surplus. Money issued for the use of the army deployed in Flanders, Portugal, and Spain, King George commands and we obey, was spent there. Somebody eventually held it because they could buy goods coming from or through Britain. This is a bit like the US in the high postwar.

Another is that there was a transition from a gold standard, before the suspension of convertibility, to a chartalist tax standard. The announcement of suspension made it very clear that paper money would be accepted in payment of taxes. With the huge expansion of public spending, you can see why this would work as a sink for the money supply.

A third, perhaps more interesting, is financial deepening and economic growth. Erik Lund has an interesting post up about Anson’s circumnavigation and the financial history of the UK just before the period covered by Simon Hinrichsen’s paper. This was a bit wild, but you can see the evolution towards the institutions that worked so well in the late 18th century, especially the standardised government bond and the central bank rediscount window. Erik also points out that economic growth picks up, which you can also see in Simon Hinrichsen’s paper – the biggest reason why the debt-to-GDP and M0-to-GDP ratios don’t go crazier than they do is that the real economy grew.

So what’s going on? I reckon that there are a lot of transactions that were nonmonetary, that now become monetised. That would explain part of the demand for all those notes. I also think that constraints on investment have been loosened by the emergence of a managed currency, a standard financial product for both wealthy savers and also local banks (which started to emerge a bit later), and a government that was determined to spend or die.

The first two are, in a really grandiose geosynchronous orbit view, either products of increased social trust, or else substitutes for it. Either people are willing to buy into the nation-state polity, or else they’re willing to delegate trust to it – perhaps it’s the same thing. And a big deal here is that the economy is getting more legible, taxable, knowable. Even if the government can inflate the money, it’s worth about the same nationally and borrowing it costs the same. Simon points out that the British government budget is a public document, it’s thrashed out in parliament, and the Bank of England’s accounts are public too. In fact, the Bank Return was published weekly, making it a much higher resolution indicator than, say, GDP.

But here’s the interesting bit. Erik points out that one of the very biggest spending line items, procurement of timber for navy shipbuilding, is restricted by absolutely ridiculous levels of corruption, even though the very survival of the state depends on it. It’s really silly – only oak from the Home Counties will do. Also, the same people who benefited from the timber cartel are also some of the biggest savers into 3% consols.

So there’s an apparent contradiction here between the nicely liberal, Whiggish notion that we beat the French with open data and financial transparency, and the ugly mess of interests on the Weald starving Jack of quality spars if they don’t get enough pork.

Perhaps, though, the crookedness was what convinced them to back the new system, to hold the notes, to put their surplus capital in consols, not to howl for gold. After all they knew the system would look after them, in a sort of Schmittian founding crime behind the launch of modern British public finance. Well, everyone thinks there’s some sort of weird bargain between southern squires, the City, and the defence industries behind everything in Britain anyway! Go read the both of ‘em.

104 great minutes

If you’ve got 104 spare minutes, I can’t recommend this highly enough. Eric “Winkle” Brown, legendary test pilot, gives a lecture to the Yeovilton branch of the RAeS.

There are encounters with Winston Churchill, Frank Whittle, Wernher von Braun, Hermann Göring, Hanna Reitsch, and Heinrich Himmler. There are aircraft as wonderful as the Spitfire IX, as awful as the General Aircraft design he flew 19 times, because there were 19 flight-test engineers available at RAE Farnborough and none of them were willing to fly in it a second time, not even Anne Burns, and as weird as the DH.110. There is stage craft – at one point something, obviously a pint glass, is heard to drop to the hangar floor and he asks if someone dropped their “keys” – although sadly the video misses most of his slides.

There are fascinating Anglo-American conflicts, stick-rudder-and-arsehole heroism, and some interesting historical discoveries (why was he trying to land a Mosquito on a carrier in the first place? there was a “Dambusters-like” mission planned for somewhere in Japan). He also mentions some career advice, offered by Ernst Udet: become a fighter pilot and speak German. Well, it worked for him.

He doesn’t, sadly, talk much about his years in post-war West Germany, although he played a major role in refounding the German navy’s air arm and the German aircraft industry. Somebody should get him to speak to school kids who might learn German, before it’s too late. Anyway, the video is here.

#defenduss document alert: action this day

Via Mike Otsuka on Facebook, here is a very important document for the future of USS and for UK pensions more broadly. A group of eminent statisticians, mathematicians, and economists have prepared a detailed critique of the USS valuation methodology, highlighting the points made here, as a letter to the USS Trustee.

They argue that the assumptions used are so tendentious that without them, the fund would actually show a surplus on defensible assumptions. If this seems implausible, it is important to remember that the compounding calculations that underlie this stuff are typically very, very sensitive to the initial values.

This week, the UCU, Universities UK, and the EPF will be holding consultations on the valuation. It is therefore absolutely vital that their attention should be directed at this document. You can get it here. Action is required this day, like the man said. We need a little togetherness…

and we might get what I want.

In which data visualisation solves a practical problem

Remember this post? I never got around to making any more maps, but Duncan Stott’s map of English identity is suddenly relevant.

I had been planning to mock Daniel Davies for being an expert on public opinion and national identity in the Medway Towns because he’d flashed through on the Eurostar quite a lot, and maybe even link this with his long-running sarcasm about Thomas Friedman, but as you can see, he’s got a point. Look at that great big red blob.

So you see the value of Big Data. It can spare you a pointless twitter row.

Progressive as in “progressively reducing benefits for the poorest”

This piece about Catalan #indyref crystallises everything I hate about what I call Euro-nationalism. It’s wonderful that they’re all so engaged:

Kilted men wearing saltire capes and foam fingers on both hands danced in the aisles as “The Red Hot Chilli Pipers” played a bagpipe version of Don’t Stop Believing.

Sorry. That was the other lot. Let’s try that again.

Clara, 20, a university student, is one of nearly fifty thousand volunteers who made Sunday’s vote on Catalan independence possible. I meet her sitting behind a ballot box in a school-turned-polling station in Barcelona, a big smile on her face…

But what is it they actually want to do with independence? Well, stop paying into the Spanish government’s finances. What this means is nicely demonstrated by the following map from here. Blue regions’ per capita GDP is at 90% or more of the EU average. Yellow ones are between 90% and 75%. Red ones are 75% or lower.


So what we’re really saying here is “Stop paying social insurance for people in places like Extremadura, some of the poorest people in Europe. Punkt, ende.” That fundamentally selfish and meanspirited impulse is what unites Clara, the SNP, and UKIP; the Euronationalists have spoken and they said “Want! Me! Me! Me!”

#lazyweb: my notes are trapped in a Kindle.

A technology thing. I am getting increasingly annoyed with the process of getting notes I take on a Kindle back out of the device and into posts on this blog. The problems are numerous, but:

  1. Notes aren’t returned with any context
  2. Notes aren’t available in a sensible format
  3. The web page they show up on is very, very slow to load
  4. There are DRM restrictions about how much you can quote, trampling all over fair use
  5. Notes on documents I upload myself aren’t identified to the document in any way

At the moment, I find it actually more effective to take notes on paper. This is why the Symbian/Android/David Wood post and the one on William Langewiesche’s AF447 piece are dragging. It’s especially annoying that although the way you get ad-hoc documents in is via e-mail, you can’t use the subject line or the message body to give the document a title.

Can anyone recommend apps that address this?

Books: Exploding the Phone

So, I’ve been remiss with the book blogging. Here goes.

Exploding the Phone by Phil Lapsley is a group biography of the phone phreaks, possibly the original geek culture, exploiting the in-band signalling that phone companies relied on up to the late 70s for fun and if not profit, at least free calls.

I liked this because Lapsley talked to a lot of the people, not just the ones who got famous like John “Cap’n Crunch” Draper and Steve Wozniak, and also to the ones from the other side at the big expensive phone company and the FBI. There’s a lot of interesting stuff in here.

For example, AT&T Bell Labs’ effort to deal with the problem was Project Green Star, an instrument that plugged into a switch and correlated the signalling tones it generated internally with what it heard on the wire, logging anything anomalous and taping the first 90 seconds of suspected fraudulent calls. Installed in major network nodes, it did this on a random sampling basis in an effort to quantify the scale of the problem that rapidly broadened into an effort to cue in other forms of investigation. This was important because Green Star was very illegal, representing as it did an industrial-scale invasion of random phone users’ privacy. In many ways, the powers AT&T arrogated to itself in order to stop people making free calls paralleled those the NSA would grab under STELLAR WIND in 2001-2002, as did much of the litigation.

The phreaks understood themselves, under the radicalising influence of the Bell System and the cops’ effort to squash them, as part of the counterculture. I didn’t know, for example, just how much effort Abbie Hoffmann went to in order to spread information about fiddling with the phone system. On the contrary, I was well aware of just how ferociously conventional telco people can be, and some of the photos in here are absolute gold. Everyone on the AT&T side looks like they’re playing a CIA agent and distant father in a New Hollywood movie. I didn’t know, however, that the company was an early target and early triumph for feminist and black campaigners (and Richard Nixon in his flirting-with-basic-income quasi-radical mode). Also, for much of the time under discussion, a huge percentage of the active phreak community were blind.

You can take this too far, though. The Bellheads did have a point when they protested that they were protecting a great public service from irresponsible hackers who would do pretty much anything for the approval of their mates, like tinkering with USAF command-and-control networks in the middle of the Cold War. Also, as time went on, the scene began to attract the wrong crowd, the dangerously risk-loving, the trolls, informants and people who got their kicks pretending to know who the informants were, and the creepy. The guy responsible for getting into the military AUTOVON voice network was also in the habit of using the power to make unbilled phone calls to torment Pacific Bell’s operators, exclusively women. This was actually what triggered the final police crackdown, although the creep himself turned state’s evidence and shipped out in the military.

So there’s a sort of pre-history of the geek here, the scratchings on the cave walls, if it wasn’t for the fact that the medium is completely evanescent. You’ve got all the key tensions – between the defining insistence on the right of users to control technology, and the responsibility of engineers for things like public infrastructure, between the total inclusion that the technology made possible and the attraction it holds for predators, and in the end, between the attraction of community and the temptation of exclusion.

And then there’s the surveillance stuff and the Mafia bookies and the international element. There was a major trial in the UK at the beginning of the 1970s where a group of phreaks was convicted of stealing government electricity, namely the line current used to signal the call, because that was the only law available.

I am also quite pleased that I vaguely know one of the sources listed in the index, Brough Turner. I remember, when Skype brought out their WiFi sign-in product and the S60 client, phoning him up from the Skype stand at MWC on the WiFi. Even in the usual trade show hubbub (and hellish 2.4GHz environment) the SILK-V3 audio quality was superb and Brough was audibly enthusiastic.

That was when Skype was cool, though.

A bad sign

There’s a lot that could be said about this weekend’s political entertainment, but the bit that stays with me is that I fear we’re losing the best thing about Ed Miliband, which was calm, sitzfleisch, and the ability to wait out stupid media bullshit. This really is something you want in a leader, and we had an example of it not so long ago in applying the Gina Ford strategy to his critics.

Rafael Behr described the position as being like the chess concept of zugzwang, where you don’t have any good moves but you’ve got to make one. But one of the ways politics isn’t like chess is that there is no timer. (Knowing him, he probably got the ten-buck word out of something by Martin Amis.) Doing nothing is usually an option, and it’s quite often a good one.

Similarly, filtering out the noise and focusing on the essential is a skill you want in a leader. It’s as good as nailed on that the whole period from here to election day will be nothing but stupid media bullshit pseudo-events; we can’t afford more pilot-induced oscillation.

Pilot-induced oscillations, as defined by MIL-HDBK-1797A,[1] are sustained or uncontrollable oscillations resulting from efforts of the pilot to control the aircraft and occurs when the pilot of an aircraft inadvertently commands an often increasing series of corrections in opposite directions, each an attempt to cover the aircraft’s reaction to the previous input with an overcorrection in the opposite direction. An aircraft in such a condition can appear to be “porpoising” switching between upward and downward directions. As such it is a coupling of the frequency of the pilot’s inputs and the aircraft’s own frequency

Thinking about that, I reckon what the Labour Party could do with is a nice big phase damper to ballast it. Like so.

(Also, did anyone else notice that the Sun literally put Dan Ware on its front page as a cover-mount freebie? They placed his face and the trail for the story in a box over the strapline that also contained a giveaway offer. Perhaps, if you renew your Sky Sports subscription before the end of the month, they’ll send you a free dickhead. Which reminds me that someone on twitter said, very wisely, that the best argument that Emily Thornberry did anything wrong is that she exposed an ordinary civilian to the newspapers, a horrible and exploitative process that ought to be reserved for the professionals.)

Waiting for #defenduss…

So we’re waiting to know if the UCU’s higher education committee has decided to call off the action or not. It’s been a tense couple of weeks – the “EPF” came out with its super-extreme and deeply dodgy plans, the UCU rolled out, the universities threatened a variety of draconian punishments, and then they began to row back. Last Thursday, as the marking boycott went into force, negotiations were formally opened.

The problem is that a lot of people hate the boycott – this isn’t a season when it matters much, and as a result, only a few postgraduate students, often foreigners, are affected. Similarly, only a few academics are affected and have to take the burden of the action.

The UCU Left tendency sounds like it doesn’t want to negotiate in any case, but it’s worth pointing out that there are plenty of grassroots members who are both in favour of negotiations, and who think that a strike would be more effective in supporting the UCU delegation. Quite a few are concerned that they would get docked for some considerable time under the boycott, sapping their ability to support a strike that would come around anyway.

Also, the UCU leadership has been a bit hard to find, right down to the local level. It’s only since last Thursday that a modeller has been available to tell you how much you stand to lose. Legal advice as to the threats from the so-called Taff Vale club of college vice-chancellors was absent until somebody cracked on with their blog.

But that said, the action so far has boycotted them back to the negotiating table, which has got to be good (here’s a good reason.) Song for tonight, though:

If you don’t know which foot to dance on, you might try signing the petition against Bradford University’s boss, Brian Cantor, who has emerged as the most aggressive union-buster among’em. You could also sign the Surrey open letter and maybe even give.