You get what you deserve

It appears doctors are increasingly of the view that certain treatments should be denied to the obese and to smokers. This was a relatively small, self-selecting survey, and certainly doesn't reflect the position of professional bodies, so it's wise to be cautious, but it does seem to indicate a trend towards the concept of the deserving and the undeserving sick.

It's easy to mock this on a number of pragmatic grounds. Obesity and smoking can both be symptoms of more profound disorders, rather than just self-indulgent lifestyles choices, while an obese employed 50 year old who has paid tax for 30 years arguably has a greater call on resources than a skinny teen who has never worked. There is also the issue of where you draw the line. Should skiers be denied treatment for broken bones on the grounds that they put themselves at risk?

The best answer is that health care in the UK is still (just) a public good and is made available as a universal right. To be deserving of health care requires simply that you be sick. This doesn't mean that treatments aren't rationed, or that clinical judgements aren't made on the basis of the individual patient, but it does mean that your non-medical circumstances and behaviour have no bearing on your access to health care.

Unfortunately, the concept of a right is one that has been under attack for some years, witness the regularity with which we are told that rights always entail responsibilities. A fundamental right is by definition unconditional. For example, human rights are so called because the only qualification is that you be human. That is why Abu Qatada has human rights. If Theresa May can prove that he is actually a fish, then she can pop him on a plane to Jordan tomorrow (she might have to ensure he had a clean tank of water for the journey, but that's about it rights-wise).

Philosophers distinguish between claim rights and liberty rights. In essence, the former entail responsibilities or duties while the latter don't. A worker has a claim right to be paid, so long as he has fulfilled his responsibility to work. A worker has a liberty right to withdraw her labour, unconditionally. Much of politics concerns attempts to recategorise between the two.

A more subtle interpretation of the survey is that GP commissioning, a centrepiece of the Lansley reforms, is beginning to worry doctors as it puts them in the firing line in respect of the inevitable decisions over rationing. Where once they could blame the local health trust, or even a specific hospital, they will shortly be the ones responsible for the postcode lottery. Shifting responsibility onto the patient is one way of avoiding that burden.

This requires patients to be increasingly assessed as worthy or unworthy, which harks back to the days before the NHS when doctors were often a powerful arbiter of social norms, and usually conservative to boot. The fat and smokers are easy targets, but how long will it be before other "undeserving" groups come into focus? How long before a religious doctor starts to cavil over birth control or abortion? If my assumption that drugs will sooner or later be reframed as a public health issue is sound, then we can expect some interesting debates about the worthiness of drug users when it comes to prioritising limited resources.

A day trip to Mordor

I've been keeping a low profile of late in terms of the footy, largely because the entire universe pivots on my every move and I don't want to put the mockers on our tortoise-like crawl to the safety of a third place finish. The ability of Newcastle, Spurs and Chelsea to intermittently blow up, or at least run out of puff, should see us safe, but it's been a season of turns and twists so keeping schtum on playing matters is probably wise for now.

I think it safe to comment on events off the pitch though, and yesterday's vist to the Britannia Stadium, to battle Sauron and his Orcs, did produce what Gary Lineker would term a "talking point". This was not the apeing of Arsene Wenger's rightly famous arms in the air gesture (more Basil Fawlty than Monsieur Hulot). Manager-baiting is perfectly legitimate when it focuses on the individual's foibles and record, though the well-known paedo-abuse that Wenger has received in the past, notably at Old Trafford and WHL, is well over the line. However, Arsenal fans are hardly saints in this regard and many would consider the mass outbreak of twitching that occurs in the seats behind the dugout when Harry Redknapp visits to be pushing it.

But those examples aside, the point is that managers are generally fair game and most are thick-skinned enough to cope. In the case of Sam Allardyce, you suspect that all he is is thick skin, like a real leather rhino suit. Not being understood, and not being liked (often by your own fans), goes with the job. As Pep Guardiola has found out, even near-universal adulation is no defence against the occasional abusive idiot, or Jose Mourinho as he is known.

There are a plenty of reasons for jeering or booing an opposition player, from his being an ex after the love died (Pennant), a thug who crippled one of our players (Shawcross), a figure of fun across the land (Crouch), a former Spurs player (Crouch and Etherington), or just plain annoying (Delap). But it's hard to see any justification for Stoke's fans booing Aaron Ramsey.

Some of them have claimed it's a reaction to Ramsey's refusal to accept Shawcross's apology after the career-threatening tackle in 2010, but their malevolence hardly supports a "more in sorrow than in anger" response. Apparently, echoing the Arsenal fans' regular chant of "Robin van Persie, he scores when he wants", which was varied on the day to "Ryan Shawcross, you know what you are", the Stoke fans took to singing "Ryan Shawcross, he'll break what he wants". Classy.

Even the normally confrontational Tony Pulis ducked the issue, claiming "I was more concerned about the Arsenal supporters booing Shawcross so I didn't hear the ones on Ramsey". I'm not sure what he was "concerned" about. Perhaps Shawcross is so mentally fragile the merest hint of displeasure is enough to tip him into profound depression. Probably not. This continued suggestion that Shawcross is as much a victim as Ramsey sticks in the craw, which is probably why the needle between the two clubs has continued to such a degree.

The Stoke fans attitude strikes me more as an example of how, in the safety of a crowd (or online), some people revel in the freedom to be gratuitously offensive, like the Chelsea knuckleheads who marred the period of silence in memory of Hillsborough at the recent semi-final with Spurs. What is perhaps more concerning is that neither Pulis nor his club were prepared to formally condemn it. To cap matters, while MOTD included a terse admonition by messrs Lineker and Hansen, this was clearly intended to provide sufficient balance to justify extensive footage of the crowd mimicking Wenger, something that Lineker himself went on to do.

It is this petty bullying, and the mealy-mouthed justification of it, that ultimately creates a climate in which serious violence on the pitch can be excused as "robustness" or just "unintentional".

Update (Sunday): The BBC's craven attitude on Saturday is now explained by the appearance of Tony Pulis as a guest pundit on MOTD2. The Wenger wave got another airing (or three) and Pulis was allowed to extol the spirit of the club and fans, not to mention the love of the underdog "in this country" (Pulis being an expert on abroad). Nobody suggested he might like to take the oportunity to distance himself from the booing of Ramsey, which was not mentioned at all.

Meanwhile, the campaign to have Crouch given the goal of the season award (which is not the ironic joke you think it is) continues apace. Suarez's distance lob this weekend is considered "not technically as difficult". RvP's volley against Everton has been airbrushed from history.

The legacy of Shirley Porter

When Shirley Porter, the former leader of Westminster City council, appeared on Desert Island Discs in 1991, one of her choices was Maybe It's Because I'm A Londoner. Given that she emigrated to Israel in 1993, to avoid the charges of gerrymandering that were eventually laid against her in 1996, she may have been indulging in sentimentality, but I like to think the feisty Tesco heiress was just taking the piss.

The news that London boroughs are seeking to export housing benefit claimants to Stoke and elsewhere has resulted in accusations of "social cleansing". This term is considered offensive not because it hints at discrimination by class and ethnicity, which is an objective fact, but because "cleansing" is associated with the communal violence that scarred the former Yugoslavia in the 90s. It was Boris Johnson who coined this emotive phrase in 2010, referring to his opposition to the government's plans for a housing benefit cap. He insisted that he would not allow London to go the way of Paris, with the poor moved to the outer suburbs, a process he disparagingly called "Kosovo-style social cleansing". Most Boris-watchers interpreted this as a coded message to the outer London Tory-voting boroughs that they would not be dumped on. His opposition to the benefit cap itself soon evaporated.

This week's news shows that the process of Paris-style relocation is well underway, but with ripples extending beyond the Greater London area. The benefit cap has inevitably bitten hardest in the centre of town, with many families gravitating to the outer boroughs. Newham's Stoke initiative is partly a reflection of the localised property boom caused by the Olympics, but it's also a consequence of increased demand caused by this intra-London migration. The speed with which this has happened also reflects the fact that the housing system was already under stress. This stems from the reduction in social housing stock, and the accompanying decanting of the poor from Central London, which has been going on since the Westminster homes for votes scandal in the late 80s.

The continuing robustness of the London property market, and the need of buy-to-let landlords to generate enough rent to cover their mortgage repayments, means that private rents in most of the capital will outstrip the benefit cap. The cap will not, as claimed by the government, force rents down in London, though it may achieve this at the margins elsewhere. So long as councils are unable or unwilling to build additional homes to meet demand, this will inevitably result in a continuation of the current process whereby the poor (both unemployed and working) are forced out of London. This is not an unfortunate and unintended consequence. It is quite clear from the combination of policies (e.g. pushing council rents up to 80% of the market rate) that this is deliberate. However, because this is being engineered through central government, the policy is not vulnerable to the charge of crude gerrymandering, though the electoral impact in London will undoubtedly benefit the Tories.

Residence in Central London will be dependent on a property/wealth qualification. It will be "a privilege, not a right", according to Westminster Council, where the spirit of Shirley Porter lives on. This will lead to exactly the sort of "doughnut" that Johnson claimed he would resist, though perhaps what he meant was that it would look more like the discarded flakes of a Cornish pasty (click '2016' for the full effect).

House raus

It seems frankly surreal to think that in the early years of the 21st century we are still debating the reform of the House of Lords. We should be colonising the Moon or mining asteroids, not deciding precisely which species of political hack should be entitled to wear ermine.

What probably saved the Lords from earlier extinction was that it conceded the bulk of its power, specifically the ability to reject or unilaterally amend legislation, in 1911, before the arrival of universal adult suffrage in 1918 (men) and 1928 (women). Had it held out till after WW1, it's hard to see how it could have survived as a hereditary body in any form. By collapsing like an England cricket team before tea-time, it perversely found itself in a political dead zone that allowed it to live on, zombie-like, for an another 100 years.

The House of Lords should not be reformed. It should be abolished outright because it is a standing affront to democracy. It is not quaint, nor even particularly traditional: life peers were only introduced in 1958. It is a two-fingered salute to the people of Britain; an arrogant and unashamed symbol of the institutional corruption at the heart of politics. The UK's bicameral system developed to reflect and entrench different class interests. The perpetuation of the Lords is therefore an acceptance of the continuing privilege of the old aristocracy and the new oligarchy.

It does not need replacing with a directly-elected second chamber, let alone one with a residuum of appointed political loyalists and bishops. Bicameral systems are only appropriate where the second chamber reflects an alternate pole of power, such as the federal states in the US. Unicameral systems are more than adequate where no such power balance is necessary, and there is no evidence they are any less democratic (cf. Norway, Sweden, New Zealand, Portugal etc).

Most bicameral systems reflect strong regional or ethnic divisions. The argument for a second UK chamber on federal lines is weak, as there are already devolved assemblies in Scotland, Wales and Northern Ireland. These aren't going to be abolished, which would mean either restricting a federal second chamber (weaker than the devolved assemblies) to just the English regions or adding another, competing layer of government. Both ideas are nonsensical. Multiple devolved assemblies for the larger English regions (i.e. the North, Midlands and South West), with powers equivalent to Scotland and Wales, might constitute a progressive alternative to the Lords, but this isn't on offer.

A well-worn argument for a second chamber is the need for a separate body to the Commons to revise, or "improve", legislation. The not-so-subtle implication is that the Commons is either incompetent in its drafting or too cowed by the whips to get it right first time. This is really an argument for better scrutiny of legislation by the Commons, and more authority for standing committees. It isn't an argument for intervention by the "grown-ups". The Lords is no defence against an elected dictatorship, and providing a second chamber with sufficient powers to function in that role will inevitably result in conflict and a constitutional crisis.

The broader argument that you need wise and experienced cross-benchers, independent of party, is just naked elitism. It is also not proven that appointing the "great and good" provides anything other than a very narrow range of life experience, no matter how expert the individual may be in their chosen field. What democracy needs is more representatives of the working class and the regions, not more TV-friendly academics and self-satisfied businessmen.

In a reformed Lords, most appointees and elected members would be time-serving party hacks, professional lobbyists or members of the usual metropolitan elites of finance, the law, media and PR. In other words, pretty much like MPs have become, and pretty much the same as the Lords has been for the last 50 years.

The widespread assumption that we need a second chamber, with no attempt to justify this need, is indicative of the degree to which the continuing presence of the Lords has corrupted political debate in this country. An example of this is the YouGov poll being quoted in support of Nick Clegg's Lords reform plan this week. The poll was commissioned by Unlock Democracy (nee Charter 88), who are explicitly committed to a second chamber. The respondents were not offered the choice of abolition.

This same lobby group has taken to regurgitating a poll carried out in January, well before the announcement of the joint committee's reform proposals on Monday. This one was commissioned by The Sun following the Lords amendment to exclude child benefit from the £26k benefit cap (the amendment was later overturned by the Commons). The poll was clearly intended to question the Lords legitimacy in blocking a policy favoured by the newspaper. Again, it did not ask if the respondents were in favour of abolition, merely whether they were in favour of the Lords being elected and (pinko) bishops excluded.

The debate over the next few weeks may well centre on the issue of a referendum, however the one thing we can be sure of is that this will be as much an abuse of democracy as the farce over electoral reform and the haggling over Scottish devolution. We will be faced with a binary choice: do you agree with the government's proposal for a new second chamber or not? What we really need is the opportunity to express support for straight abolition. Clear the house, and take all that ermine crap with you.

The great wen UFO

As we commence the festival of London-centric self-congratulation that runs from the marathon to the Olympics, the question of whether the capital is too big for its boots, or just too big for Britain, has once more raised its head. In the Spectator recently, Neil O'Brien (of the Tory think tank Policy Exchange) reiterated the myth that London took leave of the rest of the UK as a result of the coming of Thatcher and the mid-80s Big Bang.

It was a shabby, defeated city, brilliantly captured in The Long Good Friday, in which the rat-like gangster Harold Shand picks over the ruined wilderness of London’s abandoned docklands. We all know about what happened next. Mrs T and the Big Bang. Yuppies then hipsters. Russian oligarchs and Polish builders alike have moved to London.

This ignores the fact that the "Bigger Bang" of the Eurobond markets began in the 1960s, as the City's traditional Sterling area went into decline, that gentrification began then too (a point made in Dominic Sandbrook's current TV series on the 1970s), and that the "wilderness of London's abandoned docklands" was in reality a relatively short hiatus between the closure of the docks due to the containerisation revolution in the 70s and the formation of the LDDC in 1981. The very notion of the "hipster" is a London in-joke, the international super-rich have based themselves here since 1789, and there's been a big Polish community since WW2. It's also worth pointing out that Bob Hoskins does not look like a rat. A well-fed penguin, maybe.

London, and specifically the City, has always been out of tune with the rest of the UK. This didn't start in 1979 or 1986. O'Brien wishes to make the point that London is categorically different to the rest of the UK, so extreme contrasts and abrupt divisions are used to illustrate this: "Economically, culturally and socially, London has now left Britain behind, blasting off from the rest of the nation like some vast UFO. Its inhabitants need to remember those who have been left behind." That last sentence sounds half-hearted, while the preceding one is brimming with glee. The departing UFO metaphor is also a bit awry, as to most of Britain "that there London" is more like a huge alien spaceship that has come to hover over the island, like something out of Independence Day or District 9 (it's well known that Cockerneys will happily perform degrading sex acts in return for dog food).

John Harris offers a more romantic soft left perspective in the Guardian today, picking up on Andrew Lansley's announcement that the NHS will introduce regional pay and noting that exceptions will be made for (presumably) metropolitan high-flyers who will be sent beyond the M25 like latterday district commissioners (pith helmets optional). Harris welcomes the relative success of the SNP and UKIP as a sign of non-metropolitan frustration with the Great Wen, though his solution is a vague call for more top-down (i.e. directed from London) action: "the national state should shift anything and everything it can well beyond the capital". This even extends to welcoming Andrew Adonis's suggestion that the House of Lords should be shifted to Manchester.

This latter call is part of the fashion for eye-catching gestures towards regionalism that don't actually amount to much, such as moving some of the more tractable bits of the BBC to Salford, and insisting that what the larger English cities need are directly-elected mayors: a Boris in your backyard. This comes from the same people (Heseltine and Adonis appear to have formed a double-act recently) who abolished the powerful metropolitan counties (including the GLC) in 1986 and were surprised when the electorate rejected feeble regional assemblies in the North East referendum in 2004.

What O'Brien, Harris and Adonis fail to address is the economic basis for the dominance of London and the powerlessness of the regions. Local government was strong in Victorian Britain not because of the talents of Joe Chamberlain, but because Birmingham, Manchester, Newcastle and other cities were economically strong. The gradual conversion of the regions into bantustans, dependent on central government largesse and increasingly denied the right to fully manage their own affairs, is a consequence of economic weakness.

Equally, the dominance of London (and its South East hinterland) is a consequence of the capital's ability both to grab the lion's share of the UK's economic growth and exploit its international role as a tax haven gateway, service centre and luxury resort. Dubai with rain. There are also grounds to believe that the financial crisis of 2008, and the failure to reform the banking sector thereafter, are symptomatic of the evolution of London as a City state, pursuing goals independent of the rest of the UK. It was emblematic that David Cameron should choose to invoke the UK veto (or non-veto) at last year's Brussels summit to safeguard the interests of the City of London, while standing aside in respect of the Bombardier plant closure in Derby.

London is over-mighty and its gravitational pull is enervating to the rest of the country. The Labour party, unlike the Tories, has an obvious interest in rectifying this, however the Blair coup meant that it institutionally accepted that this was not possible within the neoliberal paradigm. Activist industrial policy is dead and we must not jeopardise the tax and trickle-down benefits that London brings.

There is solution to this. Traditional city states based their influence on being at the nexus of multiple trading routes.

London is now running an entrepôt trade in money at the intersection of the international time zones, just as Italian city states like Genoa or Venice had run an entrepôt trade in goods at the intersection of the trade routes from the East and the Mediterranean to the North and West of Europe. [pg 7].

If the political class will not reform the City's status as a tax haven gateway, then it should at least legislate to move the City to somewhere in the North so the benefit is distributed. What we call "the City" is a legal construct more than it is a physical place. The trading routes for money do not follow the natural routes of river valleys or trade winds, but are based on legislative fiat. Tax havens are such because we make them so, not because they are sitting on large, natural deposits of tax havenry.

The real geographical advantage of the square mile is the timezone, equidistant between Asia and the Americas, which means that anywhere in the UK would suffice just as well. There is an element of convenience in its proximity to mainland Europe, however this would not be significantly worse were it in Birmingham or Leeds, and this is more than offset by the advantages of being anglophone, particularly for US banks. It might be argued that such a shift would cause some foreign banks to prefer relocation to Frankfurt, but that ignores the fact that they are in London now precisely because it offers a more benign regulatory environment and thus more profit opportunities than Frankfurt, which would be preserved in Birmingham or Leeds.

Moving the House of Lords sounds radical, even cheeky, but the truly revolutionary option would be to move the Bank of England to somewhere in the heart of, well, England. It's time for the UFO to take off.

The Lavender Hill Mob

The excitement is gradually building to the big event of the summer. Yes, the first anniversary of the riots. How do you plan to mark it? I'm thinking of buying a comedy burglar's mask and a black and white hooped shirt.

I passed through Clapham Junction earlier in the week and noticed that they've finally got round to re-fitting the Party Superstore at the bottom of Lavender Hill, which is where I normally go for my fancy dress (well, I went once). This was broken into and gutted on the night of the 8th of August. The windows of Debenhams (Arding & Hobbs as was) were smashed in, while other shops attacked ranged from the obvious Currys and Carphone Warehouse to the less obvious Ladbrokes and Headmasters.

The trashing of the party shop was significant. While some people assumed the rioters were after face masks, I think the reason it was hit was simply because it was on the north side of Lavender Hill, close to the junction with Falcon Road. To "read" the riot in Clapham Junction, it helps to know the topography. The area is a good example of the social stratification of London, with distinct layers succeeding each other as you go south from the river.

Along the bank of the Thames, from Wandsworth bridge to St. Mary's Church in Battersea old village (now gentrified), you have the yuppie flats that have sprung up since the 80s on ground previously occupied by warehouses and small factories (including, I imagine, Stanley Holloway's foundry in The Lavender Hill Mob). The addition of these relatively expensive properties, occupied by people who make relatively little call on council services, and with older (and poorer) residents leaving the borough, has been one of the reasons why Wandsworth has been able to keep Council Tax low.

York Road marks the boundary between this littoral strip and the Winstanley Estate to the south, which is itself further bounded to the south and east by the railway and to the west by Plough Road. This is the working class ghetto, known for drugs, guns and urban music (So Solid Crew hail from here), and generally regarded as a no-go zone by non-residents. All these words are, of course, popular synonyms for "mostly black", though the estate is actually racially mixed. It's where most of the poor get shunted, on an equal opportunities basis.

On the other side of the tracks (ahem) you find Clapham Junction. This is a typical mixed area, centred on the crossroads just to the east of the station, which is where Arding & Hobbs and the Party Superstore are to be found. St. John's Road runs north to south, from the crossroads down to the Northcote pub at the junction with Battersea Rise. This partly-pedestrianised road is the real high street, with McDonalds, TK Maxx, Greggs, JD Sports, Waitrose and M&S among other outlets. There is even a Jamie Oliver shop.

The further south you go, the more middle class it gets, until on the other side of Battersea Rise it becomes Northcote Road, where you will find Jack Wills, Starbucks, the Gourmet Burger Kitchen and various expensive restaurants. East and west of the road are some of the most expensive houses in London, nestling between Wandsworth Common and Clapham Common and bounded to the south by Nightingale Lane and Balham.

Falcon Road is the only route south from the Winstanley Estate, the rail lines forming an impassable barrier elsewhere. Next to this "gate" you will find Lidl. This is not an accident. The rioters flowed south from here, hitting shops around the crossroads with Lavender Hill and St. John's Hill (the Metro referred to looting in the non-existent "Clapham Junction High Street", which just goes to show what a shoddy rag it is). The looters ventured down St. John's Road as far as Curry's, however they didn't pass the border of Battersea Rise.

This last fact should be evidence enough that, in Clapham at least, the rioting was not class-conscious, or even particularly smart as a criminal enterprise. A gang steaming the clientele sitting outside the trendy bars on Northcote Road would have got a lot of ready cash, while trying to break into Ladbrokes was only ever going to produce some well-used TV screens and stubby pens.

The day after the night before saw the spontaneous eruption of the great clean-up. Actually, this wasn't so spontaneous, as there are a lot of vocal middle-class groups in the area, such as I Love Clapham (their tag cloud is revealing). The Guardian put a picture of the "broom brigade" on its centre pages. This is amusing (to a cynic like me) because of the paucity of black faces, or even of working class ones. It's like "Where's Wally" (she's on the left, in glasses and bleached crop). The shot was taken just outside the station, looking up St. John's Hill to the west.

The day-to-day segregation of London is widely recognised. Our urban villages are ghettos. This has always been the case, but what has happened in recent decades is that the physical transitions from one to another have become more abrupt, the "endz" more furiously defined. The growing population and the high cost of property has led us to cram new builds up against the ghetto walls. In a society where satisfying the demands of the ego is seen as paramount, it should be no surprise that such cheek-by-jowl extremes of wealth and poverty should result in opportunistic looting. Walking from Northcote Road to Falcon Road north of the rail lines is like walking from Richard Curtis's hideously white Notting Hill to South Central LA. I exaggerate only slightly.

I recall suggesting at the time to a boneheaded Chelsea fan that you had to laugh ruefully about some aspects of the rioting, notwithstanding the damage and injury caused. Naturally he considered anything other than contempt for these "scum" as reprehensible. I momentarily thought (and half-hoped) that his head might explode. I think the extreme anger common in London after the event, and the way it quickly became a litmus test that you failed at your peril (reminiscent of the Princess Di hysteria), reflected the cognitive dissonance of apartheid. We just don't know how to deal with the "other", except by studiously ignoring them for the most part while tolerating their proximity. I found China Mieville's book The City and the City, in which two entire cities exist intermingled but with no interaction, particularly resonant because of this.

It's a far cry from postwar London and Alex Guinness's timid bank clerk, sitting in his Lavender Hill lodgings, dreaming up his plan to loot his bank of its gold bullion. Looting was a fine subject for comedy then. Perhaps I'll forgo the mask and shirt and buy a small Eiffel Tower instead.

The art of looking busy

One of the features of the current depression is that it hasn't been worse. Some of this is down to the support built into the social system since the 1930s, which has helped mitigate the worst impacts of unemployment and low wages, despite the attempts of the government to repeat the macroeconomic blunders of their predecessors and despite their bullying of the unemployed and disabled.

Some of it is down to the broad advance in wealth and living standards over the last 80 years, which has meant fewer visible signs of distress and greater familial resilience, such as adult children moving back in with their parents. Paradoxically, the 30s means test helped break up families, famously in Walter Greenwood's Love on the Dole, while now, when family values are meant to be weaker, unemployment is helping to keep them together.

Some, too, appears to be the result of a general desire to not think too much about the subject. This isn't a case of head-in-the-sand denial, more a wish to hunker down and wait for the shit to pass. Examples of this are the banks' forbearance in respect of commercial loans; building societies forbearance in respect of mortgages; and labour hoarding by firms. The last of these is the least understood, but it may have a bigger impact on the way recovery pans out than the behaviour of financial institutions.

Labour hoarding basically means firms keeping on certain workers, even though demand has dropped, in order to have their skills ready for an eventual pickup. This can be done by reducing hours, so the same amount of work is done by more people, or by keeping wages down (even to the extent of a cut in real terms - i.e. increases below inflation), so that costs can be reduced. On the face of it, this looks like a humane strategy to limit the negative impact of reduced output on workers, which also entails benefits for firms. Not only do they increase staff loyalty, but they avoid costly recruitment fees and learning periods when they wish to expand again. However, there are problems as well.

If headcount remains static while output drops, then productivity must fall as a simple mathematical calculation. Sure enough, there is clear evidence of such a drop, with some estimates putting this as high as 10% below trend level (i.e. the long-run rate at which productivity increases due to technology etc). A comparison of the rate of productivity growth shows this recession to be much worse than those in the 80s and 90s, while estimates of the economy's potential output have taken a major step back, implying a permanent loss of productive capacity rather than just a cyclical downturn - in other words, an L-shaped recession.

I'm sceptical about the latter as estimates of the output gap (i.e. how much more could firms produce with existing labour and plant) are subjective - they're a sentiment, like business confidence. In the services sector particularly, it isn't always easy to predict optimum output, unlike manufacturing where x workers produce y widgets per hour. There is a lot of elasticity. Workers can be diverted to long-cherished projects (rearranging the filing), put on training courses, or engaged in process improvement exercises. Some of this is displacement activity, but some will be an investment in future productivity.

However, if firms have a lot of excess capacity to use up before they need to hire again, this means we could be facing a jobless recovery, i.e. one in which employment growth is weak. This would also mean that youth unemployment would remain stubbornly high, particularly among the unskilled. Recent analysis of the prevalence of jobless recoveries since the 80s points to the way that job polarisation accelerates in these times. This means mid-range jobs that are more susceptible to automation are the ones that don't reappear as vacancies, so that employment growth happens at the top and bottom ends of the job scale, where automation is less applicable.

At an aggregate level, much of productivity growth is down to firms (or offices/plants in large firms) entering and exiting the market. This is partly because new businesses bring new ideas, while failing businesses tend to be unproductive. It is also because new businesses or new plants usually require investment in new technology, which tends to bring higher productivity.

Similarly, a lot of internal productivity growth is down to new hires. Most new hires into the skilled and "knowledge worker" roles that impact on productivity will come from existing jobs. Each recruitment has a cascade effect, creating further vacancies and labour churn. This amplifies productivity growth across the economy as workers are shuffled between employers and new ideas are spread. Churn also impacts on capital investment, notably in areas like IT. New staff usually drive the adoption of new systems, over and above the degree to which the decision to implement new systems leads to the hiring of new staff.

If labour hoarding has been extensive, this will limit the degree to which a recovery will cause a bounce back in labour churn. This in turn may cause productivity growth to remain sluggish. While this may not be significant in specialist sectors like IT, where external factors, such as the adoption of new technologies, help drive churn, it may well lead to slow rates of recruitment in more generalist sectors.

The bottom line is that we may be faced with a recovery characterised by continuing high unemployment and low productivity growth, both as a partial consequence of labour hoarding. This will eventually work its way through, as excess capacity is soaked up and labour churn starts to increase, but that could be many months, or even a couple of years, away. This could stimulate discussion about whether it is time to question how work is shared within society, which would be no bad thing.

We were promised jetpacks

Garry Kasparov has joined the ranks of the pessimists who think the rate of technological innovation has slowed, with baleful consequences. He's co-author of an upcoming book, so you'd expect him to lard it on for publicity's sake, but some of the examples he gave in support of his thesis recently had me scratching my head.

One of the main issues he cites is the slow rate of application of new technologies. It takes years from the experimental breakthrough to deliver something useful. The pessimists assume that this is a relatively recent thing, forgetting that it took over a century for the steam engine of Newcomen to evolve into the steam locomotive of Stephenson. This impatience leads them to further assume that major inventions dried-up sometime in the 1970s. Thus the first mobile comms call was made in 1973, so the iPhone is no big deal, and the last major breakthrough in computing was the Apple II in 1977. "After that, it is hard to find innovation of this level. Everything that followed were modifications that made them smaller, but the principle remains the same". Indeed, and the principle of steam power was first identified 2,000 years ago.

Kasparov explains this lack of innovation as the product of risk-aversion: "For example, in the last 60 years our planes have grown more comfortable, but they now fly more slowly since the decommissioning of the Concord. It's an unusual fact: over the past 40 years the first time in human history we have begun to move slowly."

Back in the 1950s and 60s, air travel was largely concerned with quickly relocating small numbers of rich people, plus sacks of air-mail, across and between continents. The expansion of air travel in this period was driven by business users, which reflected the needs of post-war reconstruction (this particularly stimulated flights between the USA and Europe) and general economic growth. For these customers speed was of the essence, hence the development of planes such as the De Havilland Comet and later Concorde. From the 60s onward, there was a massive expansion in air travel, facilitated by the arrival of the Boeing 727 and its successors, which was driven both by the continued growth in business travel and the rise of the foreign holiday as a mass commodity.

The technological breakthroughs in computing and communications that Kasparov notes would eventually change this environment to one in which tourists and non-business travellers would dominate. This was because business discovered the joys of remote meetings and email as a substitute for costly travel. I remember the hassle of trying to hold a telephone conversation with someone in California in the mid-80s. It was normal to have to ring back two or three times until you managed to get a "fast" line across the Atlantic that didn't suffer latency. It was also normal to travel there for face-to-face meetings, as phone conferences were frustrating and email in its infancy (no attachments). In my time we invested in a private phone network, video-conferencing, SMTP/MIME email and Intranets, all to facilitate communication without having to leave the office. Outside of jollies and tours of inspection, executives tend to only travel these days when they need to deliver a face-to-face bollocking.

The consequence of this was that it was no longer necessary for air travel to get any faster, as there wasn't a premium on speed of physical relocation and air-mail was killed-off by email. You don't need Concorde when you have video-conferencing. There are still business travellers of course, however they tend to be short-haul where costs are modest. Flight speed is less of an issue as you spend more time in taxis and checking in at the airport than you do in the air, so shaving 20 minutes off a 2-hour flight is not worth the technological investment.

In the circumstances, it is no surprise that air travel hasn't gotten any quicker. Instead, the main changes over the last 25 years have focused on increasing capacity and extending range, so you can get more holiday-bound passengers to more places without the need for stopovers and changes. This is not risk-aversion, simply a different economic imperative. What matters in travel these days is predictability. The simplistic view that travel times, i.e. average times for a particular route, have got faster over the course of history ignores the wide variability in earlier days when ships were dependent on unpredictable winds and land travel dependent on roads that might be washed away by storms. We have lost the cultural acceptance of delays, hence the rage over roadworks that add 30 minutes to a journey and the panic over fuel-stockpiling.

Kasparov's techno-pessimism is the flip-side of his techno-optimism, the belief that in the future everything will be faster, slicker and just more fun. You can hear the crushing of youthful dreams in this lament: "In the 1960s young boys dreamed of becoming aerospace engineers, now they want to be financial engineers, working in investment companies, which are the most attractive spheres for talent. This naturally affects the quality of the total scientific potential, because financial engineering creates nothing." There is much to be said for his criticism that too much talent has been diverted to sectors that aren't socially beneficial, however it is naive to believe that with more aerospace engineers we'd have delivered on personal jetpacks by now.

In reality, some seriously radical shit was invented in the last few years, we just don't know what it is yet, or even how it will be applied in ways that will transform our lives. Maybe 3D printers will morph into transporters. Maybe graphene will replace steel, as well as produce better vodka. Nobody foresaw that a lasting legacy of the Apollo space programme would be non-stick frying pans.

Round up the usual suspects

Much fun has been had with George Osborne's tale of his "shock" at discovering that the rich pay on average only 10% in tax on their income, with the Captain Renault clip from Casablanca being given an extensive airing. The suggestion is that the chancellor is a hypocrite, not only because he is well aware of the scale of tax avoidance but because he benefits from "tax planning" himself.

According to the Daily Telegraph, "Osborne is now determined that millionaires will have to pay tax of more than a third of their earnings". Coincidentally, Barack Obama has now come out in favour of the "Buffett rule", which will mean that US households earning over $1 million a year will pay at least 30% in tax. On the face of it, they appear to be heading in the same direction.

US median earners (the "middle class") pay an average of 16% in federal income tax. It's important to bear this in mind when considering Obama's call for a 30% minimum for millionaires. Also, the top 0.1% in the US pay an average of 26% in federal income tax. This is a massive drop from the 51% they paid in 1960, but it means that the Buffet rule is going to have only a limited impact on most of the rich. Their pips will not squeak. The real target are the minority of this minority (those earning over $100 million a year) who aggressively avoid tax and pay only 18%. It is this, combined with many millionaires paying the full top rate of 35%, that pushes the average down to 26%.

The historical trend in the US saw tax rates on the rich plummet after Reagan came to power, stabilise under George Bush senior, move back up under Clinton (but not too much), and then drop again under Bush junior. Obama's 30% target represents a Democrat concession that taxes on the rich will not return to pre-Reagan levels.

Despite this, there is little chance the Buffet rule will be implemented this side of the presidential election. It is a rhetorical commitment by Obama and marks the opening salvo of his head-to-head with Romney, the Republican candidate who has admitted to paying only 14% tax in 2010. The key point is that Obama wants the very rich to pay at least double the amount of federal income tax that median earners do. Romney will presumably argue to keep them where they are.

The UK figures are broadly comparable. Median households (earning about £26,000) pay 15% in income tax (after allowances) and those earning over £1 million a year pay about 36%. Given that the latter should have been paying income tax at 50% on most of their earnings, this average indicates a lot of avoidance. You'd have thought Osborne might have spotted this before now. UK national insurance contributions add roughly 7% for median earners, tapering off for higher earners.

In the above distribution, a near-vertical line indicates a highly progressive tax impact, a horizontal line a regressive impact - i.e. where the tax rate does not increase along with the quantum of income. While tax is largely progressive for most people, it becomes less progressive above median incomes. If you add in the impact of lower rates for capital gains and dividends, plus the regressive nature of VAT, the line becomes even flatter.

Osborne like Obama feels the rich should pay their fair share, but what is a "fair share"? The problem with 33% is that this looks unfair to the top rate payer, whose whole income is taxed via PAYE at up to 40% or 45%. Remember, in the Obama example, the discount for the rich playing by the rules is only 5%. The UK equivalent would be 7-12%. My suspicion is that we're being softened up for a top rate of tax close to 35% - i.e. the higher rate to be cut from 40% and the additional rate (now 45%) to be either reduced to 40% or abolished altogether.

The policy of the government, in cutting tax rates for the rich while attacking avoidance loopholes, is being sold as one of even-handedness. The cynical will note that the anti-avoidance campaign is focusing on issues that generate a lot of noise (e.g. capping charitable tax relief), rather than issues that might generate a lot of revenue (e.g. abolishing UK tax havens). A third degree reading is that we're seeing the resurfacing of the old dream of a flat tax regime.

No UK politician would dare to advocate this publicly (unlike in the US), so the appearance of a progressive system is maintained by the use of two rates, a basic rate and a top rate. The upper threshold for the basic rate is slowly decreased (it's going down from £35,000 to £34,370 this year) in line with the increase in the tax-free allowance. This pincer movement means that the range of income over which the basic rate applies will gradually shrink, and thus more median earners will find themselves paying the top rate.

While a lot of this will be paid for through cuts in public expenditure, the numbers will only add up if the total tax take doesn't shrink as the top rate goes down. This will not be the result of the Laffer Curve working its magic, but because more earners will be subject to the top rate, and because indirect taxes, notably VAT, will remain high as a proportion of household expenditure.

The ultimate strategy, for which the LibDems are as responsible as the Tories, is to divide the population into three classes: a bottom 25% who don't pay tax at all, 25% on the basic rate, and 50% on the top rate. Moving more median earners into the top rate band might appear counter-productive, but it means you are growing the potential support for cuts to the top rate. Reductions in the top rate are then sold as a quid pro quo for extending the bottom end of the band, though the greatest beneficiaries will obviously be the richest at the top end of the band.

Freud, drugs and urban regeneration

I visited the Freud Museum in Hampstead over the Easter weekend (the wife's idea of fun). Part of the display includes a film about Freud's working practices: he did his consultations in the house surrounded by books and antiquities, particularly Ancient Egyptian votive offerings. The commentary noted that Freud read more books on archaeology than psychology. This prompts momentary surprise, until you realise that before old Ziggy got to work there probably weren't that many books on the latter, so he may also have read more on cookery and dog-grooming.

This is an example of parallax - how our relative position can display an object against a different background. The paradox arises because we view Freud's reading habits against the modern corpus of psychology, which is extensive.

As my part of the deal, we took the number 28 bus all the way from Wandsworth to Kensal Rise and then walked from there to Finchley Road. We returned by Overground to Clapham Junction, which meant we were joined by shoppers from Westfield at Shepherd's Bush. This reminded me of Bradford's "Westfield hole", which featured in the recent by-election as an example of stunted urban regeneration and was offered as one of many reasons for George Galloway's victory, though unless he plans to fill it with his ego I can't see what difference he will make. Iain Sinclair has recently criticised the egomania that underpins "grand projects", and in particular the London Olympics with its Westfield legacy. The Bradford hole appears to be an emblematic absence, as if raw Westfield had been dug out of it and transported to East London to create a Westfield mountain.

Grand projects have been around since the dawn of civilisation, and shopping has often been a feature of them. Urban regeneration in Ancient Rome usually meant a bigger and better forum, new markets and public baths, rather than grander temples. Urban regeneration can be dismissed as an Ozymandias-like conceit, but it is a key motor of general growth and not just property speculation. It also represents "new territory" for capital investment and thus helps soak up excess accumulation. But property looks like a weak market over the near term. The big bubbles in the USA, Japan and the peripheral EU countries won't reinflate for a long time. London looks like it will maintain value and offer growth, but even that is likely to be modest.

Capital needs new markets to invest in because existing markets aren't providing enough opportunities. This is in large part why health and education privatisation is being pursued in the UK, and why we're investing heavily abroad, particularly where state franchises and infrastructure are being privatised. These are examples of previously non-capitalist markets being opened up to help with the over-accumulation of capital. What other opportunities might there be?

One that has been building up a head of steam for a while now is the decriminalisation of drugs. There is a broad consensus that the "war on drugs" has failed. Narcotics are being repositioned as a public health issue, rather than a moral failing that spawns crime, which means that ensuring quality control is more pressing than limiting supply. The president of Guatemala has started to talk of drugs as a "market" that needs to be "regulated". We're changing the background against which the drugs business is presented for discussion. In other words, it's the parallax effect again.

It looks like a government monopoly, or at least a highly regulated cartel, will appear in "drug-producing" countries. Meanwhile, the "free market" will probably apply to distribution (where the big bucks are) in the "drug-using" countries, but with heavy regulation, similar to booze and fags.

This dichotomy assumes that the existing economic model between drug exporters and importers will continue, but in future we may see "natural" drugs like cocaine and opiates replaced by synthetic drugs manufactured by Big Pharma. At the very least, the threat of this will be used by importers to keep the exporters' price low.

The drug gangs will be bought off or may be happy to go legit as government licenced producers and traders. The real world is not a morality play where you always pay for your sins (unlike The Godfather), so the conversion of drug barons to captains of industry will be smooth. We'll simply change the background: they were entrepreneurs all along.

Funnily enough, we've been this way before. The opium trade was once acceptable, as well as highly lucrative, and the 1880s saw the marketing of cocaine as a wonder drug. Sigmund Freud used it, both on patients and himself, for over a decade. It's entirely conceivable that within a couple of decades a branded form of cocaine will be more socially acceptable than tobacco.

Urban regeneration is often sold to the local community not just on the basis of what it adds, such as facilities and lifestyle, but on the basis of what it will sweep away, such as drugs and vandalism. The irony is that urban regeneration may be about to cede its position to drugs as the growth market for capital.

Does technology cause inequality?

I'm not thinking of the psychic damage caused when you don't have the latest Apple gizmo, but the way in which technological change is managed and the consequences this has for income equality.

While I was musing recently on the proposal to revamp ICT education in schools, I came across a number of papers discussing the relationship between education and wages over the last 60 years. These broadly show that income equality increased as the post-WW2 reform programmes extended education to the working classes, stagnated as these programmes ran out of steam in the 70s and 80s, and went into reverse thereafter. The causal explanation for this correlation is technology:

"Technological change increases the relative demand for skilled and educated workers, but educational advance increases their relative supply. This “race” between education and technology can produce rising, declining, or stable levels of economic inequality" [para 3]

The economist Daron Acemoglu has observed that whereas technological change in the 19th century was largely skill-replacing, i.e. substituting unskilled for skilled workers, technological change in the 20th century has been skill-biased, i.e. requiring higher skilled workers and thus placing a premium on education. One reason for this change may be the impact that the available labour supply has on the opportunity for profit growth. Where you have a lot of cheap, unskilled labour, skill-replacing technologies are attractive as they allow you to push down on labour costs. Where you have a lot of skilled labour, technologies that exploit those skills are attractive as they can boost profit through increased productivity.

"In contrast, the twentieth century has been characterized by skill-biased technical change because the rapid increase in the supply of skilled workers has induced the development of skill-complementary technologies." [pg 64]

New technologies spur the demand for education, while increased education spurs the development of new technologies. This sounds like a virtuous circle, so why should this give rise to increased inequality? The conventional answer would be that education has raced ahead of technological change, so we have an over-supply of educated workers, however this doesn't square with the obvious acceleration of technological change over the last 20 years, particularly in terms of computing and communications. Indeed, we know there is a dearth of sufficiently skilled workers because of the high wage premium for techies since the 80s.

In fact, technological change over the last 30 years has seen a mixture of different dynamics at work. Skill-replacing technologies did not end with the 19th century and have plenty of mileage yet, while offshoring allows skill-biased productivity gains to be combined with skill-replacing cost reductions. It is onshore office jobs where the virtuous circle is found, though even here it is limited to a core, with jobs at the margin vulnerable to automation and offshoring. At this point it is worth distinguishing between technical skills (often learnt on the job) and general knowledge (learnt at school and college):

"In periods of technological change, those who are relatively invested in technology-specific skills find it harder and more costly to adapt to the new changes. Conversely, workers who are heavily invested in general skills, such as education, adapt to the new technology more easily and less costly ." [pg 31]

It's easy to think of examples where a new technology has disrupted a sector of the skilled labour market, but it's not so obvious why education generally would make you more adaptable. The reason may be, to extend Acemoglu's thinking, that recent technological change has been biased towards the aptitudes of the educated.

At one level this is easy to dismiss because major technological breakthroughs are not usually driven by the needs of office workers, however when you distinguish between technology platforms (or macroinventions) and specific applications (or microinventions) then it looks more plausible. Thus the academic research into packet-switching that led to the Internet soon produced applications that replicated the form of memos (SMTP), bulletin boards (Usenet) and citations (HTTP), which office-based academics were familiar with.

What has been notable is the degree to which these new technologies have given rise to activities that have soaked up the productivity gains. Thus emails are more effective than paper memos, but this has led to everyone writing more with no overall reduction in labour time. The added speed of research that the Web has brought has been offset by time spent on "capricious browsing". The clamour for social media's use within business has long looked like a solution in search of a problem.

Schools and colleges are meant to "prepare" kids for the "world of work", i.e. they have an instrumental function (or at least a signalling value) beyond the intrinsic value of learning. Elementary and secondary modern schools used to focus on the discipline and obedience deemed necessary for factory fodder. Private schools cultivate self-confidence and an assumption of superiority. Modern secondary schools reflect modern business practices in the use of projects, teamworking, self-study and group tutorials (i.e. meetings). The actual skills we're teaching them may be "how to behave in an office", in which case learning how to use MS-Office is perhaps not as witless as it seems.

This may explain the paradoxical fall in computer science student numbers at a time when the wage premium should encourage uptake. The lesson of the last twenty years is that success in white collar jobs is largely about being a generalist, not a specialist, getting into management (of people or things) and generally making yourself look busy. When the most popular employers among graduates include business and accounting consultancies, then you know you're dealing with a generation bereft of romantic illusions.

Technology does not directly cause inequality. Instead, inequality is the consequence of the unequal way in which technology is applied to jobs. It is essentially skill-replacing at the bottom end of the income scale, enabling automation and offshoring of both skilled and unskilled roles. This is a return to 19th century practice. Indeed, the mid-20th century now looks like an anomaly: the demands of war and reconstruction, together with the limitations of transport and communication, pushed up the value of domestic workers, both skilled and unskilled, leading to reduced inequality.

At the top end of the scale (i.e. median earnings and above), the application of technology is skill-biased. Specifically, it is biased towards the skills and behaviours acquired by the educated, those increasingly referred to as "knowledge workers" (as if manual workers are barely sentient). Additionally, the self-directed mode of these skills and behaviours allows the productivity gains achieved by the technology to be dissipated, thus preserving white collar jobs. This waste of productivity at the top end is tolerated by business leaders so long as the beneficiaries aggressively pursue productivity gains through skill-replacement at the bottom end.

I suspect the next major technology wave, or macroinvention, will coincide with the near exhaustion of bottom-end skill-replacement and will lead to net productivity gains among white collar staff. The squeezed middle 'ain't seen nothin' yet.

Books do furnish a room

I don't know exactly how many books I possess. It's not the sort of thing you keep an accurate count of, but I reckon that it must be in the order of a thousand or more, and that's just the ones I can claim to have bought. I've probably read 95% of them, which works out at about one a fortnight since I graduated from Biggles and Rosemary Sutcliffe. My wife must have a similar number, and the kids probably have about 120 each, so the house may contain 2,500 or so. That's not quite a bookshop but it is an extensive section of one.

I was prompted to this quick calculation by visiting a couple of bookshops in Central London yesterday, and by the coincidental revelation of Amazon's exploitation of the tax rules for selling books and e-books. While I think Amazon's business model has much to tell us about modern capitalism and future trends, I'm not about to embark upon a nostalgic lament for the charming world of bookshops that smelt of mouse droppings.

I am, as the police reports would say, a habitual frequenter of bookshops, but I am drawn there by the presence of books, not by the musty atmosphere. Yesterday I went in search of Karl Polanyi's The Great Transformation, a book I had long intended to read and had now been spurred to purchase by a reference in Patrick Keiller's exhibition, The Robinson Institute, at Tate Britain.

As the subject is economic and social history, I decided to pop into the Waterstone's branch at the LSE, just behind The Aldwych. Drawing a blank, the affable chaps behind the counter told me they regularly had problems sourcing the book as it was a small publisher with an infrequent print run. They then checked their system, a mainframe application that looked to be of late-80s vintage, which revealed there was a single copy at the Gower Street branch, "but they may not have it now as the data is always 24 hours out of date" (overnight batch processing lives on).

Having wandered up through Bloomsbury, I climbed to the 2nd floor of the shop where the economics and history sections are. I couldn't find the book there either. I then had to wait 15 minutes to speak to the lone assistant. This was because most enquiries seemed to result in her wandering off to trawl the entire building, which meant the throughput was about one customer every 7 minutes. While loitering, I overheard two women at the open door of one of the poky offices at the back talking about shoes. Their voices (posh loud) and dress (no regulation black polo-shirt) made it clear these were management and above getting their hands soiled serving customers.

When I eventually got to the assistant, she checked her antique terminal and told that me the book might be on the floor above. I went up. I couldn't find it (the book that is, not the floor). The assistant there said it should be downstairs. I explained my recent history from the LSE onwards. She disappeared for 10 minutes. On her return, she confessed she'd checked downstairs and couldn't find it and suggested I try the LSE branch. She hadn't taken in a single word I'd said to her, though she had gone to a lot of trouble on my behalf.

It occurred to me that what I had experienced was not everyday frustration but a carefully designed retail experience in which well-meaning ineptness is part of the charm. With the appointment of James Daunt to run Waterstone's, it looks like they see their future as purveyors of bibliophile heritage, preserving the funny old ways of traditional booksellers as a nationwide brand. They can't compete with Amazon on price, e-books are eating away at the p-book share, and the mass-market has long been lost to supermarkets and airport and station outlets. Their future looks like Hugh Grant in Notting Hill, but replicated to every town in the land (or the ones with a sufficiently middle-class high street).

Amazon, by contrast, is a much more straightforward type of enterprise. I've never seen it as particularly zeitgeisty (the technology has long been ropey), but as a very traditional business maximising profits through three key strategies, all of which are central to modern capitalism. First, it uses its market strength to push down on the wholesale price of publishers, much as supermarkets do with farmers. It applies exactly the same strategy to other products. Second, it minimises its tax, largely through offshoring (or "out-of-stateing" in the US). As Jeff Bezos has said "It sounds counterintuitive, but physical location is very important for the success of a virtual business". There is, of course, nothing counterintuitive about this. Third, it pushes down on labour costs, even to the point of recruiting robots for its fulfilment centres.

While it hasn't exhausted any of these strategies yet, the rate of profit growth attributable to them will start to decline soon, if it hasn't already. Future medium-term profit growth in the "stuff you can read" sector will presumably depend on e-books. This will allow further reductions in cost, and thus fatter margins, though I don't think we'll see the one-off fillip of readers re-buying their existing books as we did with CDs for music.

Amazon also employs a fourth strategy, which is specific to e-commerce, whereby the expertise once provided by knowledgeable staff is now crowdsourced, in that you rely on product evaluations provided by other consumers for free. Physical booksellers can provide a credible alternative to this, but it is a premium service that will only appeal to specialist buyers or those who see it as a positional good in itself.

I don't think physical booksellers are doomed, though there will be many fewer of them in the future. The physical book is returning to its earlier form as a luxury product rather than a mass-market commodity. More and more of the books to be found in bookshops are hardback, large, glossy and expensive. The fiction section, particularly genre fiction, which is the main fare of e-books, looks to be shrinking, its space taken over by the triumphalist lifestyle sections (travel, cookery, self-help etc), "serious" gift books (history, biography, photography etc), and the now acceptable graphic novel.

The e-book is not the first attempt to introduce disposability to the market for reading matter. From chapbooks to paperbacks, the low-cost book has always been with us, but even the most ephemeral has ended up as decoration for our walls. With the e-book we face the real prospect of there being no such trace, no second-hand. The passing on of a good read, that tangible recommendation, is not the same as an online "like" or tweet. The possession of books has always been an indicator of the social status of a home, which is partly why we display them so prominently. The message has been: "I like books because I'm sophisticated"; the future message may be subtly different: "I have books because they're expensive".

A game of marbles

Stephen Fry has lent his support to the campaign to restore the Parthenon marbles to the Acropolis in Athens. I find it interesting that when this topic comes up most commentators avoid the P word, i.e. property. Ultimately, the rights of property are what the British Museum is defending: we own them, so sod off.

The argument in favour of the return of the marbles usually boils down to "they belong here", which is a more polite version of "they're ours, give 'em back". The many and various arguments against restitution are mostly specious, their number being a sign of uncertainty and the reluctance to mention property - i.e. if you had one good argument ("we own them") you wouldn't bother thinking up others. They tend to cluster around four main strands of thought.

1. You cannot undo history. This is the conservative argument. It is perhaps regrettable that things have turned out this way, but it would be better to accept them as they are and not compound matters.

This is an argument in conflict with itself. If you believe that we have a duty to honour history, in the Burkean sense, then you tend to accept the historical significance of specific artefacts. You cherish ruins and join the National Trust. You believe that artefacts possess a historical charge. But unless you believe their historical significance is primarily as the spoils of war, or as a commodity bought on the market, then their true historical value is revealed only when they are reintegrated into the organic environment from which they came.

2. This sets a precedent. This is the pragmatic argument. Where do we stop? What if every artefact in every museum had to be returned?

This is not really pragmatic, as the extreme case of every artefact winging its way home is clearly unlikely, though the net effect would probably be healthy: a wider distribution of artefacts generally and greater concentrations that would aid scholarship. In fact, we can be confident that only artefacts of major cultural significance (a subjective characteristic that can change over time) would be requested for return. The British Museum isn't going to ask that every Victorian steam engine exported to India is returned, nor is Sutton Hoo parish council going to insist on the return of its Saxon hoard.

3. Here is better than there. This is the elitist argument. The artefact will receive better care where it is now. We have the best expertise and facilities.

The unspoken assumption is that if the artefact is repatriated it will end up being damaged or neglected because the owning country is incompetent or doesn't really care. This is essentially the same argument that was used to justify the removal of the marbles in the first place, which is enough reason to reject it. Nobody would argue that we should have forcibly retained the treasures of Afghanistan, which were on display at the British Museum last year, because London offers a more politically stable home than Kabul.

4. More people will see it here. This is the utilitarian argument. We're a global transport hub and tourist destination, which means the artefact is easily accessible to experts and non-experts alike.

This is actually an argument for abolishing every local museum in the country and concentrating everything in Bloomsbury, or even for insisting that the Rijksmuseum should be transferred to London (assuming an extra runway at Heathrow). It's also vulnerable to the counter-argument that moving the marbles to Athens would actually boost the numbers who see them and better serve Greek experts.

Most artefacts have been removed from where they were found. To an archaeologist this is problematic as their value is in the context of their use, e.g. their position in strata or their relationship to specific buildings, which is why "treasure hunting" that produces the artefact without detailed provenance is frustrating.

So why don't the British Museum simply concentrate on the defence of property rights? Perhaps it was the dubious legal basis on which Elgin spirited the marbles away, however I think it worth noting that the Greek government has never formally requested their return (despite Melina Mercouri's urging), and nor has there been a rash of governmental claims for other artefacts elsewhere in the World.

I can't help feeling that governments and museums are tiptoeing around the issue because the only logically consistent basis for the status quo is the brute fact of possession. This is, of course, the actual basis for all property rights, but it isn't something we like to admit publicly. We're keeping them because we have them.

C is the new Latin

John Naughton joined the clamour for ICT education to be redesigned around programming in yesterday's Observer, something I've commented on previously. He rejects the instrumental justification that this will help the future economy and instead stresses the moral dimension. Because networked computing is central to how the modern world operates, if our children do not have a good understanding of the underlying technology, they will be "short-changed" and "intellectually crippled", he says in language shorn of all emotion. "They will grow up as passive consumers of closed devices and services, leading lives that are increasingly circumscribed by technologies created by elites working for huge corporations".

The implication is that an understanding of programming will be a guarantee of liberty and democracy in the future. That's possibly over-egging it. The real fear of the middle-class parents who read the Observer is less the coming dystopia and more that learning how to use Word and Excel will condemn young Emily to life as a public sector clerk. In contrast, computer science will give her access to the intellectual elite, working for a huge corporation. In fact, the likes of Apple and Google employ very few knowledge workers relative to their size, and programmers generally will always be a small percentage of the workforce (I'm talking here of real programmers, i.e. software developers, not website designers or marketeers who input content).

Naughton's claim, and the apocalyptic style in which it is couched, is typical of most debate around education, particularly with respect to the assumed failure to value science and technology. He even wheels out CP Snow of "Two Cultures" fame in support of this. The dichotomy in British education is real, but the basis is class not some inter-disciplinary antagonism. He gives an unintentional insight into this by dragging in the bete noire of Latin.

"That's why the fashionable mantra that emerged recently – that "code is the new Latin" – is so perniciously clueless. It implies that programming is an engaging but fundamentally useless and optional skill. Latin is an intriguing, but dead, language; computer code is the lingo of networked life – and also, it turns out, of genetic replication."

This misses the point. Latin is a token that provides access to a certain class of education. When I applied to go to university in the late 70s to study archaeology, there was a clear correlation between the requirement for O-level Latin and certain prestigious colleges, regardless of the substance of the course. Interestingly, no university required an O-level in technical drawing (something mainly taught in comprehensive schools), despite this having a far greater practical value. You spend much more time drawing pots and field plans than deciphering epigraphs.

It's also worth pointing out that computing languages can themselves become de facto "dead", even as their use grows. For example, you wouldn't teach kids to program in C, despite this being the language in which Unix and Linux are written. You'd do better to teach them a more modern, higher-level language such as Java or PHP. C is to PHP as Latin is to Italian.

In fact, you'd do better to not worry too much about the language at all, unless you want to replicate the Latin problem. What is of most value, both in terms of intellectual satisfaction and potential application, is learning the underlying principles and common methodologies. Naughton is strong on the former but weak on the latter, though it is methodology that is key to creativity and problem-solving. This in turn reflects the fact that software development, as a body of theory and practice, was hugely disrupted by the Wild West Web and is still struggling to get a grip. There were three reasons for this disruption.

First, the low cost of entry, notably the ease of learning Web scripting, resulted in the effective deprofessionalisation of programming: you didn't have to serve an apprenticeship (learn through others) but could hack your way to glory. The influx of cowboy coders led to rates crashing at the bottom end of the labour market, which in turn made it cheaper to throw bodies at any problem rather than seek to raise standards.

Second, the dotcom madness led to so much churn, in terms of startups and short-run projects, that many organisations were unable or disinclined to implement proper structure. Just as best practices can be disseminated through labour mobility, so worst practices can spread like a virus in a volatile market.

Third, the crossover of graphic design culture, as program logic and media presentation were interleaved, biased design and decision-making processes towards taste rather than empirical testing. Collaboration was seen more in terms of multi-disciplinary teams, i.e. individuals with specialisms, rather than multiple heads all working on the same problem. This encouraged both prima donnas and hangers-on.

All three remain major issues in the programming economy today, though the worst excesses have moved on to the new(ish) territories of social media and mobile apps. Elsewhere, software development is becoming progressively re-professionalised. This is the key social imperative behind the emerging consensus on the need for change: that we can keep and grow programming jobs in the UK and make them sufficiently high-quality to keep wages up. I suspect this is largely wishful-thinking.

John Naughton is right to urge the reform of ICT education, and right to prefer computer science and programming as the basis for this rather than the use of MS-Office, but he is naive to believe that our children will become better citizens as a result or that the positional good of an expensive education (private school, Latin, Oxford PPE) will be diluted.

What kids really need to be taught, or encouraged to learn for themselves, is how to think. That skill will still be valuable when programming as we understand it today is a quaint artisanal pursuit. One of the foundations of heuristics, and one of the key principles to good software development, is Occam's Razor or, as it is known in Latin, the lex parsimoniae.