We Know Zero

The Magnificent 7 and the AI Bubble

19. August 2025 · Write a comment · Categories: Risk

*The 1960s version of The Magnificent Seven (itself a remake of Kurosawa’s Seven Samurai) before most of them were shot dead*

In my last post, I suggested that there appeared to be a campaign to impugn the character of the younger generation as cover for reducing graduate recruitment, partly because of the desire to make AI systems of various sorts handle a wider and wider range of tasks. However there are other reasons why the value of AI needs to be promoted to the point where if your toaster or fridge is not using a chip they absolutely should be. It is all about the dependence of the US stock market on the so-called Magnificent 7 companies: Alphabet (Google), Apple, Meta (Facebook), Tesla, Amazon, Microsoft and Nvidia whose combined market capitalisation as at 22 July was 31% of the S&P500.

Nvidia? Who are they? They produce silicon chips. As Laura Bratton wrote in May:

As of Nvidia’s 2025 fiscal fourth quarter (the three months ending on Jan. 26 of this year), Bloomberg estimates that Microsoft spends roughly 47% of its capital expenditures directly on Nvidia’s chips and accounts for nearly 19% of Nvidia’s revenue on an annualized basis.

Meanwhile, 25% of Meta’s capital expenditures go to Nvidia and the company accounts for just over 9% of Nvidia’s annual revenue.

Amazon, Alphabet and Tesla are also big customers.

Nvidia is a growth stock, which means that it needs continued growth to support its share price. Once it ceases to be a growth stock then the kind of price earnings ratio it currently enjoys (nudging up to 60, by comparison the price earnings ratio of, say, HSBC is around 17.5) will no longer be acceptable to investors and a large correction in the share price will happen. So a growth slowdown in the Magnificent 7 is big news.

What would prevent a growth slowdown? Well a lot of processing-heavy sales for Facebook, Amazon, Apple and Google primarily. That is why there is now an AI overview of your Google search, why Rufus sits at the bottom of your Amazon search and everything appears to have a voice activated capability which can be accessed via Alexa or Siri these days.

Of course I am not arguing that there are not uses for large language models (LLMs) and other technologies currently wrapped up in the term AI. Seth Godin, usually a first mover in this space, has produced a set of cards with prompts for your LLM that you can tailor for various uses. Many people are seeing how AI applications can cut down the time they spend on everything from diary management to constructing PowerPoint presentations. There is no doubt that use of AI will have changed the way we do some things in a few years’ time. It will not, however, have replaced all of the jobs in Microsoft’s list, from mathematician to geographer to historian to writer. If you want a (much) fuller critique of what is misguided about the AI bubble, I refer you to The Hater’s Guide To The AI Bubble.

There is a lot of rough surrounding a few diamonds and the conditions for a bubble are all there. We know this because we have been here before. On 10 March 2000, the dotcom bubble burst. As Goldman Sachs puts it:

The Nasdaq index rose 86% in 1999 alone, and peaked on March 10, 2000, at 5,048 units. The mega-merger of AOL with TimeWarner seemed to validate investors’ expectations about the “new economy”. Then the bubble imploded. As the value of tech stocks plummeted, cash-strapped internet startups became worthless in months and collapsed. The market for new IPOs froze. On October 4, 2002, the Nasdaq index fell to 1,139.90 units, a fall of 77% from its peak.

Fortune are now claiming that the current AI boom is bigger than the dotcom bubble. And even leading figures in the AI industry admit that it is already a bubble.

This is where it gets interesting. The FT, in its reflection on these parallels, appears to be comforted by the big names involved this time:

To be sure, the parallels are not exact. They never are. While most of the dotcom companies were ephemeral newcomers, the Mag 7 include some of the world’s most profitable and impressive groups including Apple, Amazon and Microsoft, as well as the main supplier to the AI economy, Nvidia.

But of course this is the reason why it’s worse this time. We were able to manage without the “ephemeral newcomers”, although Amazon‘s share price fell by 90% over 2 years and Microsoft lost 60%, so the comparison is not quite true. However these companies were not the foundations of the economy then that they are now.

If Nvidia is the essential supply chain for all the other 6 of the Magnificent 7, then its own supply chain is equally precarious. As Ed Conway’s excellent Material World points out, Nvidia is “fabless” (ie without its own fabrication plant) and relies on Taiwan Semiconductor Manufacturing Company (TSMC) for the manufacture of its processors. They in turn are completely dependent on the company which makes the machines essential to their manufacturing units, ASML. As Conway says:

As of this moment, ASML is the only company in the world capable of making these machines, and TSMC is, alongside Samsung, the only company capable of putting such technology into mass production.

And then there are the raw materials required in these industries. Much has been made, by Diane Coyle and others, of the “weightless” nature of our global economy. Conway demolishes this fairly comprehensively:

In 2019, the latest year of data at the time of writing, we mined, dug and blasted more materials from the earth’s surface than the sum total of everything we extracted from the dawn of humanity all the way through to 1950.

There is a place in North Carolina called Spruce Pines where they mine the purest quartz in the world. As one person Conway interviewed said:

“If you flew over the two mines in Spruce Pine with a crop duster loaded with a very particular powder, you could end the world’s production of semiconductors and solar panels within six months.”

Whereas China controls the solar panel market it is reliant on imports for its semiconductors. In 2017 this cost China more than Saudi Arabia exported in oil or the entire global trade in aircraft.

Conway muses on whether China would invade Taiwan because of this and concludes probably not.

“Even if China invaded Taiwan and even if TSMC’s fabs survived the assault…that would not resolve its issue. Fab 18 [TSMC’s plant] might be where the world’s most advanced chips are made, but they are mostly designed elsewhere”.

However it would certainly be hugely disruptive if that were your goal. So even if the share prices of the Magnificent 7 don’t plummet of their own accord, they might be eviscerated by a crop duster or an assault on Taiwan.

There are so many needles poised to prick this particular bubble it would seem prudent to be cautious as a company in how dependent you should make yourselves to AI technology over the next few years.

Generational victim blaming

13. August 2025 · Write a comment · Categories: Media & Politics, Pensions, Professions

Last time I suggested that the changes to graduate recruitment patterns, due at least in part to technological change, appeared to be to the disadvantage of current graduates, both in terms of number of vacancies and in what they were being asked to do.

This immediately reminds me of the old Woody Allen joke from the opening monologue to Annie Hall:

Two elderly women are at a Catskills mountain resort, and one of ’em says: “Boy, the food at this place is really terrible.” The other one says, “Yeah, I know, and such … small portions.”

This would clearly be an uncomfortable position for Corporate Britain if it were accepted. So a push back is to be expected. The drop in graduate vacancies is hard to challenge so the next candidate is obviously the candidates themselves.

So hot on the heels of “Kids today need more discipline”, “Nobody wants to work”, “Students today aren’t prepared for college”, “Kids today are lazy”, “We are raising a generation of wimps” and “Kids today have too much freedom” (I refer you to Paul Fairie’s excellent collections of newspaper reports through history detailing these findings at regular intervals), we now have the FT, newspaper of choice for Corporate Britain, weighing in on “The Troubling Decline in Conscientiousness“, this time backed up by a whole series of graphs:

John Burn-Murdoch does a lot of great data work on a huge array of subjects which I have referred to often, but I find the quoted studies problematic for a number of reasons. First of all, there is the suspicion that young people have already been found guilty before looking for evidence to back this up. For instance, which came first here the “factors at work” or the “shifts”?

While a full explanation of these shifts requires thorough investigation, and there will be many factors at work, smartphones and streaming services seem likely culprits.

At one point John feels compelled to say:

While the terminology of personality can feel vague, the science is solid.

At which point he links to this study, defending the five-factor model of personality as a “biologically based human universal” which terrifies me a little. Now of course there are always studies pointing in lots of different directions for any piece of social science research and this is no exception. In this critique of the five-factor model (FFM), for instance, we find that:

While the two largest factors (Anxiety/Neuroticism and Extraversion) appear to have been universally accepted (e.g., in the pioneering factor-analytic work of R. B. Cattell, H. J. Eysenck, J. P. Guilford, and A. L. Comrey), the present critique suggests, nevertheless, that the FFM provides a less than optimal account of human personality structure.

I first saw the FT article via a post on LinkedIn, where there was one mild push back sitting alone amongst crowds of pile ons from people of my generation. After all it feels right, doesn’t it? But Chris Wagstaff, Senior Visiting Fellow at Bayes Business School, was spot on I feel, when he pointed out four potential behavioural biases at play here within the organisations where these young people are working:

The decline in conscientiousness and some of the other traits identified could be a consequence of more senior colleagues not inviting or taking on board constructive challenge from younger colleagues, the calamity of conformity, i.e. groupthink, so demotivating the latter.
Related to this is the tendency for many organisations to get their employees to live and breathe an often meaningless set of values and adhere to a blinkered way of doing things. Again, hugely frustrating and demotivating.
Or perhaps we’re seeing way too many meetings being populated by way too many participants, meaning social loafing (ie when individual performance isn’t visible they simply hide behind others) is on the increase.
Finally, remuneration structures might discourage entrepreneurial thinking and an element of risk taking (younger folk are less risk averse than older folk). Again, very demotivating.

These sound much more convincing “factors at play” to me than smart phones or streaming services, neither of which of course are the preserve of the young. But demonising the young is an essential prelude to feeling better about denying them work or forcing them into some kind of reverse centaur position.

Corporate Britain needs to do better than pseudo-scientific victim blaming. There are real issues here around the next generation’s relationship with work and much else which need to be met head on. Your future pension income may depend upon it.

The Early Career Professional and the Reverse Centaur

07. August 2025 · Write a comment · Categories: Actuarial, Cartoons, Professions, Science Fiction

In a previous post, I mentioned the “diamond model” that accountancy firms are reportedly starting to talk about. The impact so far looks pretty devastating for graduates seeking work:

And then by industry:

Meanwhile, Microsoft have recently produced a report into the occupational implications of generative AI and their top 40 vulnerable roles looks like this (look at where data scientist, mathematician and management analyst sit – all noticeably more replaceable by AI than model which caused all the headlines when Vogue did it last week):

So this looks like a process well underway rather than a theoretical one for the future. But I want to imagine a few years ahead. Imagine that this process has continued to gut what we now regard as entry level jobs and that the warning of Dario Amodei, CEO of AI company Anthropic, that half of “administrative, managerial and tech jobs for people under 30” could be gone in 5 years, has come to pass. What then?

Well this is where it gets interesting (for some excellent speculative fiction about this, the short story Human Resources and novel Service Model by Adrian Tchaikovsky will certainly give you something to think about), because there will still be a much smaller number of jobs in these roles. They will be very competitive. Perhaps we will see FBI kind of recruitment processes becoming more common for the rarified few, probably administered by the increasingly capable systems I discuss below. They will be paid a lot more. However, as Cory Doctorow describes here, the misery of being the human in the loop for an AI system designed to produce output where errors are hard to spot and therefore to stop (Doctorow calls them, “reverse centaurs”, ie humans have become the horse part) includes being the ready made scapegoat (or “moral crumple zone” or “accountability sink“) for when they are inevitably used to overreach what they are programmed for and produce something terrible. The AI system is no longer working for you as some “second brain”. You are working for it, but no company is going to blame the very expensive AI system that they have invested in when there is a convenient and easily-replaceable (remember how hard these jobs will be to get) human candidate to take the fall. And it will be assumed that people will still do these jobs, reasoning that it is the only route to highly paid and more secure jobs later, or that they will be able to retire at 40, as the aspiring Masters of the Universe (the phrase coined by Tom Wolfe in The Bonfire of the Vanities) in the City of London have been telling themselves since the 1980s, only this time surrounded by robot valets no doubt.

But a model where all the gains go to people from one, older, generation at the expense of another, younger, generation depends on there being reasonable future prospects for that younger generation or some other means of coercing them.

In their book, The Future of the Professions, Daniel and Richard Susskind talk about the grand bargain. It is a form of contract, but, as they admit:

The grand bargain has never formally been reduced to writing and signed, its terms have never been unambiguously and exhaustively articulated, and noone has actually consented expressly to the full set of rights and obligations that it seems to lay down.

Atul Gawande memorably expressed the grand bargain for the medical profession (in Better) as follows:

The public has granted us extraordinary and exclusive dispensation to administer drugs to people, even to the point of unconsciousness, to cut them open, to do what would otherwise be considered assault, because we do so on their behalf – to save their lives and provide them comfort.

The Susskinds questioned (in 2015) whether this grand bargain could survive a future of “increasingly capable systems” and suggested a future when all 7 of the following models were in use:

The traditional model, ie the grand bargain as it works now. Human professionals providing their services face-to-face on a time-cost basis.
The networked experts model. Specialists work together via online networks. BetterDoctor would be an example of this.
The para-professional model. The para-professional has had less training than the traditional professional but is equipped by their training and support systems to deliver work independently within agreed limits. The medical profession’s battle with this model has recently given rise to the Leng Review.
The knowledge engineering model. A system is made available to users, including a database of specialist knowledge and the modelling of specialist expertise based on experience in a form that makes it accessible to users. Think tax return preparation software or medical self-diagnosis online tools.
The communities of experience model, eg Wikipedia.
The embedded knowledge model. Practical expertise built into systems or physical objects, eg intelligent buildings which have sensors and systems that test and regulate the internal environment of a building.
The machine-generated model. Here practical expertise is originated by machines rather than by people. This book was written in 2015 so the authors did not know about large language models then, but these would be an obvious example.

What all of these alternative models had in common of course was the potential to no longer need the future traditional model professional.

There is another contract which has never been written down: that between the young and the old in society. Companies are jumping the gun on how the grand bargain is likely to be re-framed and adopting systems before all of the evidence is in. As Doctorow said in March (ostensibly about Musk’s DOGE when it was in full firing mode):

AI can’t do your job, but an AI salesman (Elon Musk) can convince your boss (the USA) to fire you and replace you (a federal worker) with a chatbot that can’t do your job

What strikes me is that the boss in question is generally at least 55. As one consultancy has noted:

Notably, the youngest Baby Boomers turned 60 in 2024—the average age of senior leadership in the UK, particularly for non-executive directors. Executive board directors tend to be slightly younger, averaging around 55.

Assume there was some kind of written contract between young and old that gave the older generation the responsibility to be custodian of all of the benefits of living in a civilised society while they were in positions of power so that life was at least as good for the younger generation when they succeeded them.

Every time a Baby Boomer argues that the state pension age increases because “we” cannot afford it, he or she is arguing both for the worker who will then be paying for his or her pension to continue to do so and that they should accept a delay in when they will get their quid pro quo, with no risk that the changes will be applied to the Boomer as all changes are flagged many years in advance. That contract would clearly be in breach. Every Boomer graduate from more than 35 years ago who argues for the cost of student loans to increase when they never paid for theirs would break such a contract. Every Boomer homeowner who argues against any measure which might moderate the house price inflation which they benefit from in increased equity would break such a contract. And of course any such contract worth its name would require strenuous efforts to limit climate change.

And a Boomer who removes a graduate job to temporarily support their share price (so-called rightsizing) in favour of a necessarily not-yet-fully-tested (by which I mean more than testing the software but also all of the complicated network of relationships required to make any business operate successfully) system then the impact of that temporary inflation of the share price on executive bonuses is being valued much more highly than both the future of the business and of the generation that will be needed to run it.

This is not embracing the future so much as selling a futures contract before setting fire to the actual future. And that is not a contract so much as an abusive relationship between the generations.

Imagine a voting system where all political parties win the proportion of seats they have earned as a result of their proportion of the vote, no more and no less

31. July 2025 · Write a comment · Categories: Birmingham, Media & Politics

In my last post, I expressed a preference for the single transferable vote. So let’s look at the competition (a more detailed look at each from the Electoral Reform Society can be found here):

Party List Proportional Representation

Variants of this are the most common types of voting system in the world, being used in 80 countries. In the closed list variant, people just vote for parties and the parties then supply candidates in proportion. An open list system has a list of candidates to vote for, the vote both determining the party vote and ordering the candidates which are then supplied according to their proportional vote. A semi-open system means parties publish the order in which their candidates will be supplied but voters just choose parties. Constituency size also affects how these systems work.

The closed list system was used in the UK for European Parliament elections until we left the EU. These elections had consistently low turnouts in the UK and only about 5% of people were able to identify their MEP. So I think that probably disallows these systems for the UK.

Additional Member System

This is first past the post but with additional MPs added to make the overall numbers for each party proportional to the popular vote, arrived at with a second vote for a party on a party list basis, with all its disadvantages.

Imagine how many more MPs would have been required to make the last election proportional! For the 412 Labour MPs to only represent 34% of the seats we would need 1,212 in total, an increase of 562 (ie almost double). This, combined with the disadvantages of the party list system, disallows it for me I think.

Supplementary Vote

You get two votes instead of one, first choice is FPTP. If noone gets 50% of the vote, there is a run off between the top two where second choices are then added on to the candidates’ totals (although if your first choice is in the run off, your second choice is not counted). It is used to elected the London Mayor which obviously doesn’t required proportionality. Which is good, because it does not remotely provide it.

Alternative Vote

If noone gets 50% of the vote, the candidate who came last is removed and their votes allocated according to the second choices of the people who had that candidate as their favourite. And so on until someone does get 50%. However it is not a form of proportional representation as the ERS re-running of the 2015 election under a number of different systems shows:

Also, we have already voted against introducing this system (in 2011).

Alternative Vote Plus

This was a system invented by the Independent Commission on the Voting System (often referred to as the Jenkins Commission as it was chaired by Roy Jenkins) in 1998, which has never been implemented anywhere. It recommended using the Alternative Vote system for 80-85% of the seats in Parliament, then topping up from party lists to make the system proportional. Unfortunately, as ERS have pointed out, 15% of the seats would not be enough to achieve this.

Two-Round System

This is very similar to the alternative vote system, where if noone gets 50% of the vote in the first round, the top two candidates go through to the second round, with people’s second choices reallocated where their first choices did not make the top two. It is therefore not a proportional system. It also introduces a gap between the first and second vote, with uncertain consequences.

Borda Count

In this system there is one ballot paper with a list of candidates. You put a number next to each candidate, with your favourite at number one. These are converted into points with the candidates ranked last scoring one point, two for being next-to-last and so on. The candidate with the most points is the winner.

It is a recipe for tactical voting and is used in Eurovision – need I say more?

So how do these compare with the single transferable vote?

Single Transferable Vote

First a link to the video from my last post, explaining how it works, as a reminder (I highly recommend it and it is under 7 minutes long).

In this system, you have multiple seats per (larger) constituencies, with constituencies the size of 4-5 current constituencies. As a voter you number the candidates (you must vote for one and then its up to you). There is a quota (known as the Droop quota after its inventor Henry Droop) which is calculated as:

total votes / (total seats + 1)) + 1

This wacky formula is to adjust the normal requirement for a single MP election for them to get more than 50% of the vote to one where there are multiple seats available, and the “+ 1” is there to replicate the “more than” requirement.

If a candidate gets at least this number of votes, they are elected and their surplus votes (ie the ones in excess of the quota) are then reallocated to your second choice candidate. If noone reaches the quota, then the least popular candidate is removed and their votes reallocated until someone does.

The constituency should then end up with MPs approximately in proportion to the percentage vote of each of their parties (although independents can operate successfully within this system too).

This is a proportional system which still gives you a link to your MPs. The larger constituencies can line up with existing areas which make sense to voters, eg in Birmingham there are 10 constituencies currently within the Birmingham City Council region, which could be combined into two larger constituencies each represented by 5 MPs in proportion to the votes in each area.

I must get a couple of requests a week from campaigners to write to my MP in support of their latest campaign. My own experience of writing to my MP, who has a well organised and efficient office but has been in the role for a long time and feels he knows his own mind about most things by now, is the most I can expect is a return letter telling me all of the reasons why I am wrong about my position on whatever it is. Imagine a constituency where most of you had the choice of an MP who shared at least some of your concerns and was therefore more likely to help represent your views more widely. Imagine how much more empowered you would feel, how much more likely to get involved in politics, how much more likely to vote.

Imagine that effect rippling throughout the constituencies up and down the country. Imagine what it might do to voter turnout!

*Source: ERS*. *Here the countries that use proportional voting systems are in purple and the countries that use non-proportional voting systems are in dark blue.*

Is proportional representation (PR) likely to lead to more representation for smaller parties and therefore coalitions? Yes it is. But the mistake is in thinking that FPTP doesn’t lead to coalitions. The difference is that they are currently within a few big dominant parties trying to hold their different wings together on the left and the right. With PR those deals need to be done in public so that we can judge them and adjust our votes accordingly.

The Jenkins Commission mentioned earlier ended up rejecting STV on the basis that it moved to bigger constituencies (which does not seem a disadvantage in itself), had a more complicated voting system (which can be fully explained in a video under 7 minutes long) and “a tendency towards parochial politics”. It seems to me that time has moved on. The challenges we are facing increasingly are going to need local community responses. What Lord Jenkins might have called “parochial” from his rather lofty view of politics may be just what we need now.

Instead imagine that your vote counted at the next election even if you weren’t in the majority. Imagine most people having a sympathetic MP they could write to about things that mattered to them. Imagine MPs encouraged to represent the views they stood for election on to the full extent of their ability – no more having to sit in one or two buckets that aren’t really what they’re about because they are the only buckets that ever get elected. Imagine that all political parties win the proportion of seats they have earned as a result of their proportion of the vote, no more and no less. Imagine being able to vote for the party you prefer rather than needing to tactically vote to keep out your worst nightmare. All this could be yours.

All we need to do is demand it!

Making votes matter

28. July 2025 · Write a comment · Categories: Media & Politics

At a time when fascism is gaining ground every day in the United States, genocide is being perpetrated in Gaza and protest is now not even permitted at the placard-holding level, it may seem that the electoral system is not the priority right now. But…

…Imagine that your vote counted at the next election even if you weren’t in the majority. Imagine most people having a sympathetic MP they could write to about things that mattered to them. Imagine MPs encouraged to represent the views they stood for election on to the full extent of their ability – no more having to sit in one or two buckets that aren’t really what they’re about because they are the only buckets that ever get elected. Imagine that all political parties win the proportion of seats they have earned as a result of their proportion of the vote, no more and no less. Imagine being able to vote for the party you prefer rather than needing to tactically vote to keep out your worst nightmare. All this could be yours.

At the last General Election on 4 July 2024, the Labour Party won 63.4% of the 650 seats in the House of Commons with 33.7% of the vote share. The 3rd and 5th parties in terms of votes, Reform UK and The Green Party collected 21% of the vote between them and only 9 seats, while the 4th party, The Liberal Democrats got 72 seats from 12.2% of the vote.

The Liberal Democrats, in particular, congratulated themselves hugely on how clever they had been in gaming the system (in fact they were about the only party where vote share and seat share were aligned), but the strategy of “where it managed to gain votes, and where it didn’t mind losing them” has given the Government a problem now. As Jonn Elledge has put it:

Last year the party won a lot of seats it would be unlikely to hold next time, even if things were going well; that reduces the chances the new intake believe they’ll be offered plum ministerial jobs one day, which gives them fewer incentives to act like lobby fodder.

Why would we continue to support a voting system that serves neither the governed nor those who seek to govern us?

There are currently several organisations lobbying for electoral change: the Electoral Reform Society (ERS), Make Votes Matter and Open Britain being the most high profile of these. ERS list 8 alternatives to first past the post (FPTP), while firmly nailing their colours to the single transferable vote (STV – explained in the video above) – a position I agree with. The other two are more focused on getting rid of FPTP: Open Britain sets replacing FPTP amongst a raft of measures included in a plan for functional democracy by 2030 but is not specific about which alternative it prefers; Make Votes Matter have signed up over 100 MPs to their campaign by not being specific about which voting system they prefer to replace FPTP.

I will explain why I think we should replace FPTP with STV and the benefits I think that would bring in my next post.

The End of the Professions?

24. July 2025 · Write a comment · Categories: Professions

On Wednesday last week the report from the Leng Review into the safety and effectiveness of physician associates (PAs) and anaesthesia associates (AAs) was published. Although it concluded that:

Research on the safety and effectiveness of PAs and AAs was limited, generally of low quality and either inconclusive or demonstrated a mixed picture.

This apparently did not prevent Professor Leng from feeling able to go right ahead and make 18 recommendations. Neither did it prevent NHS England announcing the same day that it would be expecting all PAs and AAs in the NHS to immediately:

Take on the new names for their roles of physician assistant and physician assistant in anaesthesia respectively;
No longer triage patients or see “undifferentiated” patients.

The rationale for the first of these was the fear that PAs and AAs were being confused with doctors. That this has been addressed by immediately making PAs and AAs much more confusable with each other is just one of the many hilarious things about this report. They also appear to have forgotten to let the General Medical Council (GMC) know, as their website still looks like this:

Then there is the meticulously recorded bile directed at PAs and AAs and their capabilities throughout what is described all over the website as an “independent” report. There were several charts of the opinions of PAs and AAs about their ability to carry out their duties compared to those of doctors. Here is one of them:

The fact I feel able to describe this as mostly bile is the template job descriptions at Appendix 5 of the Leng report. The one for PAs in secondary care includes the following principal duties and responsibilities:

carry out assessments of patient health by interviewing patients and performing
physical examination including obtaining and updating medical histories (looks like B and E);
order and perform agreed diagnostic tests including laboratory studies and
interpret test results (looks like J);
perform basic therapeutic procedures by administering all injections and
immunisations, suturing and managing wounds and infections (looks like M);
help to develop other members of the multidisciplinary team by providing
information and educational opportunities as appropriate (looks like L).

So even the Leng Review appears to have concluded that many of the doctors’ opinions polled here are ridiculous.

Of course I am lumping all doctors together here because the Leng Review does for the most part. There is one sentence where it is admitted that senior doctors, including GPs, tended to be more positive than resident doctors, but this is not really quantified.

The Leng Review will not be the last of its kind. It has taken up the concerns of a threatened profession and worked with them to connive in the othering of another sub-profession (set up, as admitted in the Leng Review report itself, by the Department of Health under, in the case of PAs, a competency framework in conjunction with the Royal Colleges of Physicians and General Practitioners) rather than tackle the actual threats the profession faces. As Roy Lilley wrote:

The BMA can stand in the way, or stand at the front, shaping how technology and new roles like PAs can improve care, close gaps, and make healthcare safer and smarter.

History teaches us that you can’t halt progress by breaking the machinery or driving new careers into a cul-de-sac.

So why are the doctors, particularly resident doctors (formerly known as junior doctors), so offended by the use of PAs and AAs in the NHS? Is it really about safety and effectiveness? Or is it that the British Medical Association (BMA) has finally lost the trust of its more junior members after years of inadequate representation and now is throwing its weight around with the campaign against PAs and AAs and now the resident doctor strike in a desperate attempt to convince them that the reason they are paid less than PAs and can’t get a job after graduation is not the fault of the BMA, but that of the Government, PAs and AAs?

As the Leng Review admits:

Since the early 2000s, and in response to increasing workforce pressures, there has been a growing recognition of the PA role across the globe as a flexible way to address doctor shortages and improve access to healthcare. Today, PAs or their equivalents are employed in over 50 countries, although the role is often adapted locally to meet specific healthcare system needs.

Is it perhaps this very flexibility which is the threat here, when NHS England are already reviewing postgraduate medical training due in large part to resident doctors’ “concerns and frustrations with their training experience”?

The doctors are not the only threatened profession. According to The Observer this week:

The big four accounting firms – Deloitte, EY, PricewaterhouseCoopers and KPMG – posted 44% fewer jobs for graduates this year compared with 2023.

These are the big beasts for finance and actuarial graduates and tend to set the market for everyone else, so these are big changes. Ian Pay of the ICAEW’s quote from the article is even more alarming:

Historically, accountancy firms have typically had a pyramid structure – wide base, heavy graduate recruitment. Firms are now starting to talk about a ‘diamond model’ with a wide middle tier of management because, ultimately, AI is not sophisticated enough yet to make those judgment calls.

A diamond model? That surely only makes sense for those at partner level currently interested in the purchase of diamonds? Sure enough, the article continues:

Cuts to graduate cohorts since 2023 have ranged from 6% at PwC to 29% at KPMG. According to James O’Dowd, founder of talent adviser Patrick Morgan, these are accompanied by senior employees being paid more and more job offshoring. Up to a third of some firms’ administrative tasks are carried out in countries with lower labour costs such as India and the Philippines.

So what happens when AI is sophisticated enough to make those judgement calls, calls which are often sophisticated forms of pattern spotting and which, quite frankly, AI systems are already much better than humans at in many cases already? Will the diamond model collapse still further into a “T-model” perhaps, with the very senior survivors being paid even more? Don’t expect labour costs in India and the Philippines to remain lower for very long as demand increases from their own economies as well as ours.

And the most important question? What then? Who will the senior employees who seem to be doing so well out of this at the moment be in 20-30 years’ time? Where will they have come from? What experience will they have and how will they have gained it when all the opportunities to do so have been given to the system in the corner which never gets tired, only makes mistakes when it is poorly programmed or fed poor data, and never takes study leave at the financial year end?

So Medicine, Finance and now Law. Richard Susskind has been writing about the impact of AI on Law, and with his son Daniel, on other professions too for some time now. The review of his latest book, How To Think About AI, has the reviewer wondering “Where has Reassuring Richard gone?”. In his latest book, Susskind says:

“Pay heed, professionals – the competition that kills you won’t look like you.”

So probably a threatened profession there too then.

In the 1830s and 1840s, according to Christopher Clark’s excellent Revolutionary Spring, the new methods of production led to “the emergence of a non-specialised, mobile labour force whose ‘structural vulnerability’ made it more likely that they would experience the most wretched poverty at certain points in their lives.” The industrialised economies changed beyond recognition and the guilds representing workers, with skills the need for which were being automated away, retreated to become largely ceremonial.

Then the divisions were those of class. This time they appear to be those of generation. Early career professionals are seeing their pay, conditions and status under threat as their more senior colleagues protect their own positions at their expense.

It remains to be seen what will happen to our threatened professions, but it seems unlikely that they will survive in their current forms any more than the jobs of their members will.

The Monty Brewster Predicament

16. July 2025 · Write a comment · Categories: Economics, Professions

Last week I read The Million Pound Bank Note by Mark Twain and Brewster’s Millions by George Barr McCutcheon, from 1893 and 1902 respectively. Both have been made into films several times: the Mark Twain short story was first made into a silent movie by the great Alexander Korda in 1916, although the best known adaptations were the one starring Gregory Peck in 1954 and Trading Places (starring Eddie Murphy) in 1983 (which included elements of both The Million Pound Bank Note and Mark Twain’s novel The Prince and the Pauper); Cecil B DeMille was the first to attempt a film adaptation of Brewster’s Millions (from the earlier play) in 1914, with the best known adaptation being Walter Hill’s 1985 movie starring Richard Pryor (movie poster shown above).

Both stories were written before the First World War and it is interesting to see when each has been revived with new adaptations. In particular, although an early attempt was made to film Twain’s story, noone attempted it again until after the second world war, whereas there was a new adaptation of Brewster during the very interesting period between 1920 and 1922 when the first international financial conferences were being held in Brussels and Genoa to establish an international consensus for policies where “individuals had to work harder, consume less, expect less from the government as a social actor, and renounce any form of labour action that would impede the flow of production.” The aim was to return to a pre World War I economic orthodoxy and therefore remove what would be very painful economic measures for most people from the political sphere and into the sphere of “economic science”. In other words, it was a time when the political elite were trying to change the rules of the game.

This may be because Twain’s story, about a man who is given a million pound note and is feted by everyone he meets as a consequence and never has to spend it, winning a bet between the two men who gave him it as a consequence, was seen as a rather slight tale. Interestingly an American TV adaptation and the Gregory Peck film a few years later came out around the time when the Bank of England actually first issued such notes (called Giants) in 1948, which also relied on the power of people knowing they were there rather than ever having to use them.

The rules of the game certainly vary considerably across the Brewster adaptations: DeMille in 1914 was very respectful of the original but by 1921 the $7 million dollars had shrunk to $4 million. By 1926 in Miss Brewster’s Millions, Polly Brewster must spend $1 million dollars in 30 days to inherit $5 million. This was the point where Twenty20 fortune dissipation appears to have supplanted the Test Match variety. In 1935 a British version had Brewster needing to spend £500,000 in 6 months to inherit £6 million. In 1945 Brewster must spend $1 million dollars within 60 days to inherit $7 million. By 1954 the first Telugu adaptation has him spending ₹1 lakh in 30 days which, by 1985, has inflated to ₹25 lakh.

Later in 1985, the Richard Pryor film requires Brewster to spend $30 million within 30 days to inherit $300 million, with the tweak that he is given the option to take $1 million upfront, which for the sake of the movie he doesn’t. There have since been five further adaptations reflecting the globalisation of the ideas in the story (three from India, one from Brazil and one from China) before the sequel to the Richard Pryor film last year.

What is striking about both stories is how, although supposedly about financial transactions, albeit of a rather unusual kind, they are in fact all about how people behave around the display of money. In Twain’s tale, Henry Adams is transformed from being perceived as a beggar to being assumed to be an eccentric millionaire as a result of producing the note.

In the Brewster story, Monty Brewster has to spend the million dollars he has been left by his grandfather within a year so that he has no assets left in order to claim the seven million dollars left to him by an uncle on this condition. The original story explains the strange condition (something the Richard Pryor film doesn’t do as far as I can recall) as being due to his uncle hating his grandfather so much (due to his grandfather’s refusal to accept his uncle’s sister’s marriage). The uncle therefore wanted “to preclude any possible chance of the mingling of his fortune with the smallest portion of Edwin P Brewster’s”.

The problem for Monty is that he is not allowed to tell anyone of the condition, and therefore it is the difficulties the behaviour he then has to adopt causes him with New York high society that is the subject of the story. There are dinners and cruises and carnivals and holiday homes all bankrolled by Brewster for himself and whoever will journey with him, during which he falls in love and then out of love with one woman and then falls in love with the woman he had grown up alongside. Things normally regarded as good luck, like winning a bet or making a profitable investment, become bad luck for Monty.

By the end of the year, and very close to spending the whole million with nothing to show for it, he returns from a transatlantic cruise where he had been kidnapped by his friends at one stage to prevent him sailing to South Africa, to find himself spurned by the very society he had tried so hard to cultivate:

With the condemnation of his friends ringing in his troubled brain, with the sneers of acquaintances to distress his pride, with the jibes of the comic papers to torture him remorselessly, Brewster was fast becoming the most miserable man in New York. Friends of former days gave him the cut direct, clubmen ignored him or scorned him openly, women chilled him with the iciness of unspoken reproof, and all the world was hung with shadows. The doggedness of despair kept him up, but the strain that pulled down on him was so relentless that the struggle was losing its equality. He had not expected such a home-coming.

After a bit of a scare that the mysterious telegram correspondent Swearengen Jones, who held the 7 million and was assessing his performance, had disappeared, everything comes right for Monty in the end and he marries Peggy who had agreed to do so even when she thought him penniless.

And we are left to assume that everything in the previous paragraph is reversed in the same way as in The Million Pound Bank Note on being able to display wealth once more.

There is a lot of plot in the Brewster story in particular, a lot of which does not amount to much but keeps Monty Brewster feverishly busy throughout.

These two in many ways ridiculous stories, written as they are just as economics is trying to establish itself as a science and ultimately the discipline that shapes our current societies, I think reveal quite a lot about the nature of money amongst people who have a lot of it. Neither Henry nor Monty (apart from an opening twenty four hours for Henry and a scene revolving around a pear in the gutter after a night sleeping rough) experience hunger or the absence of anywhere to sleep at any point. Their concern for money seems to be entirely about social position, the respect of who they regard as their peers and being able to marry the women they have set their hearts on. In other words, money is not about money for these protagonists, it is about status.

It seems to me that almost the entire edifice that we call economics now has possibly been constructed by people in this position. Is this why money creation is represented in so many economic models via constructions clearly at odds with the actual activities of banks (one of many pieces by Steve Keen demonstrating this problem here), and why ideas such as loanable funds and the money multiplier, persist in economics education? Perhaps the original architects of these economic theories did not need money to live, as much as they needed the respect of who they saw as their peers.

David Graeber often used to point out how much more time people at the bottom of society spent thinking about people at the top than the people at the top spent thinking about them. Is this at the heart of the problem?

Of course we do still have some social mobility. A relatively small number of people from poor backgrounds can still enter influential professions. Some of them have even become economists! Of course the very process of becoming a professional is designed to distance you from your origins: years of immersion in a very academic discipline, requiring total concentration and dedication to internalising enough of the professional “truths” learnt so as to be assessed as qualified to practise, normally while engaged in highly intensive work alongside more senior people for who these truths have already been securely internalised.

And then once there you are in the Monty Brewster situation, so insecure about your position within this new society you have joined that you will do whatever it takes to maintain it. You are “upwardly mobile”. Your families are proud that you are “getting on” and doing better, certainly in terms of income and professional respect, than they did. There is no serious challenge to this path other than its difficulty, which again creates a massive sunk cost in your mind when considering alternatives. And it is a path which is invariably described as upward.

Meanwhile the societies we have constructed around these economic edifices also have a lot of plot, a lot of which does not amount to very much but it keeps us all feverishly busy most of the time.

Humpty Dumpty and the Terrorism Act

07. July 2025 · Write a comment · Categories: Birmingham, Cartoons, Legal, Media & Politics

*Illustration of Humpty Dumpty from Through the Looking Glass, by John Tenniel, 1871.*

“When I use a word,’ Humpty Dumpty said in rather a scornful tone, ‘it means just what I choose it to mean — neither more nor less.’

’The question is,’ said Alice, ‘whether you can make words mean so many different things.’

’The question is,’ said Humpty Dumpty, ‘which is to be master — that’s all.”

This is the country we are now living in. Because 4 members of a group sprayed red paint on some aircraft and caused some damaged using crowbars at an Oxfordshire base, as part of a series of protests designed to end international support for Israel’s war in Gaza for which they have all been arrested and charged, the whole organisation has been “proscribed” following a vote of 385 votes to 26 in the House of Commons and the order subsequently signed by the Home Secretary, Yvette Cooper, putting it on a par with organisations like ISIS (a full list of the 81 organisations proscribed under the Terrorism Act 2000 and the 14 Northern Ireland organisations proscribed under previous legislation can be found here).

Proscription makes it a criminal offence to:

belong, or profess to belong, to a proscribed organisation in the UK or overseas (section 11 of the act)
invite support for a proscribed organisation (the support invited need not be material support, such as the provision of money or other property, and can also include moral support or approval) (section 12(1))
express an opinion or belief that is supportive of a proscribed organisation, reckless as to whether a person to whom the expression is directed will be encouraged to support a proscribed organisation (section 12(1A)) – this one was added by the Counter Terrorism and Border Security Act 2019.
arrange, manage or assist in arranging or managing a meeting in the knowledge that the meeting is to support or further the activities of a proscribed organisation, or is to be addressed by a person who belongs or professes to belong to a proscribed organisation (section 12(2)); or to address a meeting if the purpose of the address is to encourage support for, or further the activities of, a proscribed organisation (section 12(3))
wear clothing or carry or display articles in public in such a way or in such circumstances as to arouse reasonable suspicion that the individual is a member or supporter of a proscribed organisation (section 13)
publish an image of an item of clothing or other article, such as a flag or logo, in the same circumstances (section 13(1A)) this one was also added by the Counter Terrorism and Border Security Act 2019.

References are to sections of the Terrorism Act 2000.

In order to be proscribed, the Terrorism Act states that an organisation must have:

committed or participated in acts of terrorism;
prepared for terrorism;
promoted or encouraged terrorism (including the unlawful glorification of terrorism); or
be otherwise concerned in terrorism.

And terrorism is defined as:

the use or threat of action which: involves serious violence against a person; involves serious damage to property; endangers a person’s life (other than that of the person committing the act); creates a serious risk to the health or safety of the public or section of the public or is designed seriously to interfere with or seriously to disrupt an electronic system.

The use or threat of such action must be designed to influence the government or an international governmental organisation or to intimidate the public or a section of the public, and must be undertaken for the purpose of advancing a political, religious, racial or ideological cause.

As a consequence, 29 people were arrested under terrorism legislation for protesting about the proscription, including an 83 year old retired priest, arrested after appearing to be in possession of a placard. I assume it was the one shown here.

The organisation’s website now displays the following message:

Co-founder of Palestine Action Huda Ammori is seeking to bring a legal challenge against the Home Office with a hearing for permission to bring a judicial review set to take place during the week of 21 July. Meanwhile a new group has suddenly appeared, armed with a fresh supply of red paint and targetting Time Logistics (which they say supplied one of Israel’s biggest weapons companies) lorries near Birmingham.

And the name of the new group? Yvette Cooper.

Financial consequences

03. July 2025 · Write a comment · Categories: Economics, Media & Politics

According to Pat McFadden, a Government minister, there will be “financial consequences” to the decision to modify the planned cuts to disability and health-related benefits in order to win the vote on the welfare bill. There certainly will be for people receiving these benefits.

The changes to the bill in order to get it voted through will still:

reduce the health element of the Universal Credit for new claims from £97 to £50 per week from April 2026 and restrict payment to claimants over the age of 22, although now the benefit will continue to increase at least in line with inflation;
possibly re-introduce some of the restrictions to eligibility for personal independence payments following a review.

But that does not appear to be what McFadden was talking about, as he went on to list a number of taxes the Government would not raise. Instead the financial consequences comment sounded more like the empty threat of the playground bully when his victim has unexpectedly given him a bloody nose and he is trying not to lose face. Because nearly all of the newspaper coverage of this event appears to have been focused on this reputational aspect rather than on the fiscal significance of the changes:

In my last post, I referred to Harvey Whitehouse’s excellent Inheritance – the Evolutionary Origins of the Modern World, which included this definition of gossip:

When we lived in small communities, in which everybody knew everybody else, news consisted mainly of socially strategic information about who was hoarding wealth, who was telling lies, who was sleeping with whom, who was stealing, who was free-riding, and so on. In most of these newsworthy stories, there would be transgressors and victims, and news purveyors and consumers would be very sensitive to the reputational consequences of this information. The common term for this is gossip.

So by focusing on the reputational consequences of a welfare bill in the House of Commons, these newspapers are preferring to present a story which affects the livelihoods of up to a million people as if it were gossip. This approach is justified by the media as something the public are interested in and therefore something we will buy. Our bias towards stories about reputational consequences, even of people we do not know or are ever likely to meet, is therefore used against us and the world gets a little less understandable with every gossipy take of a more complex story. This has other implications (or perhaps what McFadden would call “consequences”): the rest of the day’s news seemed to revolve around whether someone had been mean to the Chancellor of the Exchequer and made her cry.

And the actual financial consequences? Well, the BBC made much about the impact of the Chancellor’s tears on the bond and currency markets. Morningstar went further and claimed that investors had saved the Chancellor’s job by forcing the Prime Minister to support her very publicly after failing to do so initially. The unspoken assumption is that the markets control the economy and all we can do is have gossipy conversations in our impotence about whether Rachel, Ed, Wes, Liz or Angela are up or down this week.

This is self-fulfilling: we can be as powerless as we decide to be. Or we can realise that the way we run our country and society is up to us. The £5 billion all of this is supposedly all about could be raised in any number of ways: slowing down the quantitative tightening programme the Bank of England is set on, a policy of selling bonds before maturity not adopted by the European Central Bank or the Federal Reserve in the United States, or any of a number of suggestions made by Richard Murphy which would have been focused on the top 10% of earners. Instead we went after the disabled first. Noone forced us to. We did it to ourselves.

Perhaps we should all be a little tearful about that.

The politics of gossip

25. June 2025 · Write a comment · Categories: Media & Politics, Uncategorized

*English fans at Estádio Mineirão in Belo Horizonte during the Costa Rica-England match for the 2014 FIFA World Cup, Brazil. 24 June 2014, 11:17:21 Source: Mariordo (Mario Roberto Duran Ortiz)*

Ever wondered why you often feel overwhelmed and powerless in the face of the daily news coming at you from TV, radio and social media? It is easy to lose sight of the culture we have surrounded ourselves with, to assume that it could be no other way and that we are seeing the world as it is when we are “assisted” to make judgements about things and people, that the way we organise our society has been distilled from hundreds if not thousands of years of experiment to arrive at something which we would be foolish to deviate from too much.

So it is always valuable to come across a book which challenges this very particular viewpoint, coming as it does from a very particular geography or geographies and at a very particular point in our history. Harvey Whitehouse’s excellent Inheritance – the Evolutionary Origins of the Modern World is just such a book. Its main contention is that our beliefs and behaviours have evolved much as our biology has and that three urges in particular can explain how our cultures have developed: conformism, religiosity and tribalism. All had strong survival advantages to them: conformism, via the urge to imitate, allowed us to store discoveries and innovations from generation to generation and build them up over time; religiosity, a by-product of our adaptive psychology – to anticipate how others will behave, to create lists and categorisations, our tendency to think things can be used as tools, and our other tendency to overdetect potential dangers around us; and finally tribalism. These urges have been used to create progressively more complex societies via routinisation of our lives and the fusion of our identities (the extreme state that causes people to lay their lives down for each other in military conflict in extreme cases for instance) with ever larger groups.

And some of the places Harvey and his co-researchers have ventured to test their ideas sound extremely challenging. Interviewing insurgents in the Libyan revolution, being initiated by the Baining tribe in Papua New Guinea, talking to a former member of the Indonesian terrorist organisation Jemaah Islamiyah about working with convicted terrorists in Indonesian prisons. People often with completely different perspectives on things which we have long regarded as settled in our own culture but also recognisably the same as us in all important ways. However I think my favourite attempted interviews were when they were making their way through the crowd at the England game against Costa Rica at the 2014 FIFA World Cup to test out their hypothesis that losing at football had “a more powerful bonding effect on supporters than winning”. 48 years of pain, etc.

The experiments they have carried out are also eye-opening. Creating made-up rituals of different intensities in a wooded field near Queens Belfast to see whether those who had been more scared by what they had been asked to do reflected more deeply on their experience and developed richer symbolic interpretations of the ritual. These developed until they were wiring up participants within a performance space with powerful speakers and lighting effects to lead them through rituals of even greater intensity.

Once you have started looking at your own society a bit more from the outside in this way, it is hard to stop. There is a great passage in the book about gossip:

So today’s front page from The Daily Mail is almost purely gossip: an article about the wedding of a man widely regarded as having hoarded wealth on a literally galactic scale and the potential reputational damage to the Prime Minister of a backbench revolt against his proposed disability benefit cuts.

Similarly today’s front page from The Sun is also almost purely gossip: a story about people variously called migrants and asylum seekers (presented as the same thing) asserted to be illegally working as delivery riders, which the paper labels as a “scam”. Plus something about the return of Cool Britannia and Keir Starmer warning us to prepare for war and the story about us buying some new fast jets which could carry nuclear weapons.

Now these are potentially important stories about how we want to run our country (well not the Bezos wedding or the Cool Britannia ones), but they are all told through the medium of gossip. This means we focus on the moral transgressions of people we will never meet that do not affect us personally rather than whether we are managing our complex society remotely competently.

The Daily Star makes it even easier to see how a serious story about the war between Iran, Israel and the United States can be reduced to one about Trump’s so-called “F-bomb”. And it may look like I am picking on the red tops, but all these stories are present and correct in The Guardian too.

I have just focused on a few newspapers here, but obviously social media has turbo-charged this effect and now with the power increasingly to generate convincing images and videos of things which have never even happened, the ability to unhinge our “news” operations completely from real life has never been greater.

If you were being presented with this gossip in a social situation within a group of people all spouting the Deliveroo story, it would be hard to argue with it, as it would fight against your very strong instinct to conform in your behaviour and to belong to the tribe you were surrounded by. The conflation of the Cool Britannia idea and the fast jets with nukes is a mystical jingoistic attempt to pull at our natural religiosity.

This is not news at all, it is psy-ops.