Crowdfunding as the antithesis of electoral politics

20 May 2015 by in Business and finance, Current events, Nine visions of capitalism

We have just had to endure another stomach-turning electoral contest in which fear, venom, character assassination, unfunded promises and unproven assertions wrestled with each other and which those we collectively abhorred the least eventually won. Thank God we endure it for only six weeks in five years, yet it does us immense damage and sours the public mood. Rarely, if ever, has politics been so bereft of ideas, so sterile in its jousting, so destructive in its name-calling, so locked into rival ideologies that its partisans can no longer think, much less create.

Yet there is another movement afoot, one that is growing at astonishing speed, faster even than the digital revolution. Computer power has been credited with doubling in size every eighteen months but crowdfunding, sometimes called peer-to-peer lending is doubling every three months. But are we comparing like with like? Surely crowdfunding is just one additional way of getting investment funds, a way suited to smaller, maverick projects and can not even lay claim to political significance. We hope to show that it could change capitalism profoundly; it may not be overtly political but it has social and political repercussions of a very meaningful kind.

Crowdfunding is for the moment confined to the Internet. It uses various platforms, such as Kickstarter and Crowd Cube, to put ideas before a ‘crowd’ of on-line investors. A project is described and a request for enough capital is communicated. The crowd either meets the minimum capital needed to launch the project or it does not (money for under-subscribed projects is never collected). About one third of all projects are fully funded and go forward. Those receiving insufficient backing may have failed in any case and it is better for everyone that little loss was incurred at this early stage. However, a project may be relaunched in the future with a revised prospectus. We believe it is a matter of time before this development is picked up by mass media with millions of viewers and becomes a variety of Reality TV with totals raised broadcast during the programme, and with the whole culture celebrating innovation as a way of life. Commercial TV could find a new source of revenue by taking 5% of the total raised.

So let us compare the ‘democracy’ of our electoral process with the democratic potentials of crowdfunding. How do these contrast?

Electoral process Crowdfunding process
The first-past-the-post system gives big advantages to the majority parties at the expense of all minority interests, e.g. it takes 3.9 million UKIP voters to elect one solitary MP. Most funds go to small minorities, enabling them to nurture new ideas that go viral on the Internet, with the potential to change everything through daring novelties and life-changing creativity.
One party wins and another loses nearly everything in a zero-sum game wherein gains and losses cancel each other out and power is wrested away from opponents in life-shattering ways. All parties win where the project succeeds, entrepreneurs, investors employees, customers and the community. Ideas have been transformed into new realities beneficial to their instigators and the crowd of enthusiastic supporters and cheerleaders.
The game is to achieve power over people, get the electorate to buy your promises, attack and rubbish your opponents and consign them to opposition benches. The game is to achieve power through people, use their funds to keep your promises and realize the ideals in your prospectus with their money and their moral support. You seek to convert all those involved to your viewpoint.
The system is fiercely and relentlessly adversarial. We are right and our opponents wrong, foolish, dangerous and destructive. The least feared and hated party wins. The Devil vies with the Deep Blue Sea. The system is cooperative and co-creative with investors as midwives of procreation and with only projects that are truly needed receiving funds. Investors are seeking to improve their society, and where they succeed they profit.
The system requires millions of pounds to operate large organizations. This puts the electoral systems at the mercy of rich donors who buy access and expect a return for their money. The system operates by funding thousands of good ideas and small organizations. Funding goes not to power but to potential, to the idea whose time has come, to those with dreams to realize.
Large amounts of money from very few people buys continued dominance and conformity to what rich people demand. Small amount of money from a wide variety of people, fund a very diverse range of new ideas, which change us radically.
Large investment portfolios tend to the lowest risk possible and to markets where prices can be administered by market domination. Small investment portfolios can afford to stake less but risk much more on changing society for the better. Dramatic success is possible.
The viewpoint in almost entirely quantitative. Everyone wants just one thing and the answer is more. The viewpoint is almost entirely qualitative. Everyone wants to help their society but in different ways.
The attitude to minorities is that now they have been beaten, they should yield to majority control. They are losers and should be marginalized. The attitude to minorities is that they are a potentially creative resource and come up with ideas the majority would never hazard. Diversity is infinitely precious.
The whole purpose of politics is to realize your own economic self-interest and asserting these aggressively is enough to win. The whole purpose of crowdfunding is to realize meaningful ideals by offering these to the public for sharing with you.
Ideological politics is sterile because everything within one polarized extreme has been tried and one is not allowed to borrow from the rival viewpoint. It is off limits. Crowdfunding is an industry espousing radical ideas and hence borrows the vehicle, private enterprise, from the Right while the ideals are largely from the Left. Any new political idea is a hybrid of Right and Left.
The argument is about redistribution and the power of government. Can it confiscate what others have made? What will this do to enterprise and motivation? The argument is about pre-distribution. Might companies who promise their crowds to be fair, to promote women, to pay good wages, train their people, and be sustainable, gain better access to crowdfunding?
Competition is the life-blood of both politics and business. We we all want more and some of this must be taken from our weaker brethren. Diversity is the life-blood of both politics and business. Where we are sufficiently different invidious distinctions vanish and nearly all can succeed on their own terms.

What is unique about crowdfunding is that it starts even before a product or service has been made or any unit of currency spent. It is an idea, an abstraction and a value in our mind’s eye. We can share it with others, discuss within the ‘crowd’ what sort of world we want, producing any number of wealth development and satisfactions. It is a potential rebirth of the Puritan ethic insofar as it begins with the reason for our being and what we should do on earth and whom we should serve with the one life we have. It is the potential sheet anchor of the Innovative Society. Members of parliament have powers to help redesign capitalism as a beneficial force in our nation and insist that it builds industries which engage and develop us all. Where every organization performs before an appreciative crowd the world is changed.


Charles Hampden-Turner and Fons Trompenaars are the authors of Nine visions of capitalism (with Tom Cummings). It will be published on 7th September 2015. To preorder, please email info@infideas.com.

To find out more about Charles Hampden-Turner and Fons Tromenaars, and their company, please click here.

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Which Game of Thrones character are you most like, Prime Minister?

18 March 2015 by in Business and finance, Game of Thrones on Business

In a recent BuzzFeed interview David Cameron was asked which Game of Thrones character he identified most with. His answer was Ned Stark. Now we suspect one reason for this might be that Dave has very little knowledge of Game of Thrones but is vaguely aware of the events of season 1 and recognises Ned Stark as he’s played by Sean Bean, who was well known before the series. In a world where to get the popular vote you have to show interest in what the people are interested in, especially if you know you’re seen as a bit of an elitist, telling us that you don’t really watch Game of Thrones isn’t a viable answer (even though it’d be preferable for the Prime Minister to know less about Game of Thrones and more about the situation in Syria or Ukraine).

Had Cameron had a greater knowledge of Game of Thrones he might have seen that Ned Stark is possibly not the best answer for the leader of the country to give. Ned is of course honourable, noble and a man of action. But he is not a man of thought, tending to rush into the fray without properly weighing up a situation (Petyr Baelish wryly notes the Stark family characteristics of ‘quick tempers and slow minds’), nor is he politically adept. Having helped Robert Baratheon win his rebellion Ned retreats to Winterfell but this means that when, years later, he has to venture to King’s Landing as Robert’s new Hand he has no political alliances to call upon. Lacking anybody he can truly trust it’s little wonder he blunders so gravely that he finds his neck on Ilyn Payne’s block.

So if Ned Stark was the wrong answer for the Prime Minister to give, what might have been the right one?

Tywin Lannister – clever, masterly in strategy, great in a crisis
Well we can see why DC would have wanted to avoid this one really. Brutal and patrician, Tywin represents the side of the Tories that Cameron would like us to forget. The kind of ruler who gets his henchmen to burn farms and villages in order to root out wrongdoers and show the small folk what it means to cross him is not really the ruler a privileged member of the ruling class wants to identify with. Shame really since Tywin has many qualities to recommend him. He has a brilliant mind and can play most situations to his advantage. When others might worry about how their actions will be perceived Tywin looks only to what is best for the advancement of the Lannister family, which is great if you’re on his side and deadly if you’re not. His ability to make decisions quickly and stick to them means he is great in times of crisis. His major flaw, arguably the one that got him killed, is a lack of empathy. While he’s great at playing political games he’s unable to recognise when people don’t play the game, when they react emotionally rather than acting strategically. Because of this Tyrion surprised him twice, first by demanding a trial by combat and second by doing the unthinkable and letting his arrows fly.

Mance Rayder – man of the people who united disparate tribes in a common goal
Now this would have made a much better answer. Instead of identifying himself with a member of any ruling elite Cameron could have positioned himself as a plain-speaking ruler who’s truly democratic and loved by his followers (though perhaps that’s more in the realms of fantasy than Game of Thrones itself). The Free Folk laugh at folk on the southern side of the wall for bending the knee to those whose rule is inherited rather than earned. Instead they follow a king who has proved himself worthy of the title. He’s as clever as Tywin, managing to unite more than 100 warring clans simply by making them see that something bigger and more important than their petty squabbles is coming their way and if they don’t unite and head south of the wall they’ll all end up ‘dead or worse’. His ambitious plan to get round the Wall and take the Night’s Watch by surprise would most likely have succeeded were it not for Jon Snow’s infiltration of the Wildlings. If he’s able to enter into a coalition with Stannis Baratheon it could prove to be a winning alliance.

Daenerys Targaryen – compassionate, decisive and strategically adept

Daenerys: a great leaderPlus, you know, she’s young and female so had Cameron given this answer he could have gained a few points with a section of the electorate which probably feels it has little in common with him. Although Daenerys comes from a ruling elite, the Targaryens having been kings of Westeros for the last 300 years, she’s in exile and, unlike her brother, does not take it for granted that she should rule. Her qualifications for leading her people come from her abilities rather than her name. As Jorah tells her when he first realises her potential, “You have a good claim, a title, a birthright, but you have something more than that … You have a gentle heart. You would be not only respected and feared, you would be loved. Someone who can rule and should rule. Centuries come and go without a person like that coming into the world.” Instead of crumbling when she loses her child and her husband she transforms herself into the Mother of Dragons we’ve grown to love, freeing slaves, punishing the wicked and gathering a vast throng of supporters. She’s not perfect, having shown an impatience with those who question her decisions that could tip into something more dictatorial. But at the moment we love her – just, charismatic and strong, she’s the kind of leader we could only dream of having.

If David Cameron, Ed Miliband or Nick Clegg would like any more tips on success the Game of Thrones way we have just the book for them, available in plenty of time for the election (it’s not for you, Nigel).

Game_of_Thrones_S5_pre

Is football too expensive for the fans?

1 October 2014 by in Business and finance, Football Business

We read with interest yesterday a story that Virgin Media has asked Ofcom to investigate the way premier league rights are sold. According to Virgin the auction process is driving up prices and causing ‘significant consumer harm’. In his book Football Business economist Tsjalle van der Burg probes this question and comes up with the radical solution that all football on TV should be free:

What would happen if the EU introduced a ban on pay TV for all live matches and highlights shown in EU countries, so that they became free again? A ban would naturally mean that broadcasters would make less money. Therefore, they would pay the clubs less for their broadcasting rights. So the clubs would earn less and would have to moderate their expenditure. They could easily do this by paying the players less so that, on balance, clubs would not be disadvantaged. In the days before pay TV, clubs basically broke even, with lower income and lower expenditure and George Best producing beautiful play. So a pay-TV ban is perfectly possible. Indeed, because there is surplus money in the sector – more money than is needed for it to function as it should –  a pay-TV ban will not harm the game.

But how would TV stations finance the broadcasts? That’s simple: they would use the revenue from commercials. In the Netherlands, where many football matches are still available free of charge, the highlights of matches in the second professional league have been broadcast free-to-air for many years by a private company. The league is not extremely popular, with an average match attendance of about 4,000. This means that advertising can generate sufficient revenue for broadcasting all football matches which are at least as important as those of the second Dutch level. So we would be able to have a pay-TV ban for all these broadcasts while being sure they will remain on the air. Additionally, this also means there is no need for broadcasters to use taxpayers’ money to show football matches.

So it is possible to have a pay-TV ban for all important football matches. Indeed, there is only one drawback: players (and coaches) would earn less.

The benefits of a pay-TV ban would be considerable. The first advantage concerns the football fans who would watch the broadcasts anyway: they would get them for free. Their savings would be more or less equal to what the players (and coaches) would lose through reduced salaries. If the savings for those fans were the only advantage of the ban, the question of whether we should have a ban would be a question of fairness only.

But the ban also has another advantage. This concerns football fans who do not watch (certain) football matches on pay TV because the subscription fee is simply too high for them. These fans will watch the broadcasts if they are free, because football gives them pleasure. For these people, a pay-TV ban would mean more pleasure. At the same time, the broadcasters’ costs would not rise when more people turned on their television sets to watch football. So with a pay-TV ban we get more pleasure without any extra costs. This means that on balance the net effect is that the football community would be better off.

Football business

Cognac cocktails for your last summer party

22 August 2014 by in Spirits distilled, Wine and spirits

Here in the UK next Monday is August Bank Holiday, a national holiday that signals the end of the summer. Traditionally that means gardening, DIY and meeting up with friends to squeeze the last drop of sunshine out of the season. If you’re having a lunch, picnic or barbecue with friends this weekend (wherever you may be), why not brighten your gathering with a cocktail (or two)? Cognac makes the ideal base for a range of cocktails. This may be a surprise if for you cognac conjures up images of stuffy, leather-chaired gentlemen’s clubs, huge balloon glasses and cigars. So here’s Nicholas Faith’s explanation from his book, Cognac: The Story of the World’s Greatest Brandy, which we’ve followed up with a few recipes from our friends at Cognac Expert.

Cognac is an ideal base for cocktails; as Pierre Szersnovicz of Courvoisier puts it: ‘other spirits provide purely alcoholic support for cocktails whereas cognac brings a definite character to any blend’. Every cognac brand offers such a complexity of taste that all a professional mixologist has to do is to identify one of the many flavours and aromas in the spirit and enhance it by blending it with complementary flavours. Because it is made from grapes, cognac is eminently suitable for cocktails that will not react too violently with the wine to be drunk later in the evening. The old wives told the right tale: grain and grape really do not mix. I can attest to the ill-effects, felt the next morning, of even the smallest tincture of whisky before drinking wine in any quantity. Cognac-based cocktails are healthier.

Cognac’s virtue as the spirit of choice for cocktail makers has come at a time when Britain has emerged as the cocktail centre of the world. The reasons are many: ‘They don’t make bad cognacs,’ says Dick Bradsell, London’s cocktail pioneer, aware that there is less quality control in the making of competing spirits. He and his colleagues are discovering that cognac is mellower and softer and has the necessary smoothness and balance. It helps that you don’t need relatively expensive VSOP; VS does fine for cocktails. Moreover, cognac was due for a revival because it had been out of fashion for so long. In Bradsell’s words, cognac ‘missed out on all the funny drinks of the 1970s and so doesn’t have any gimmicky connotations’. It also helps that, in the United States anyway, drinkers believe that cognac is stronger than competing spirits, possibly because it has more character and far greater complexity.

The basic formula for most of these drinks is relatively simple: something sour with something sweet to exploit the flavour and strength of the cognac, together with a touch of character from bitters or the like. The flexibility of cognac is also important. ‘Any mix is fine,’ says Dave Steward, a cocktail expert, ‘provided you can taste the cognac’ – a direct contrast to the distillers’ attempts to make a competitor like vodka as anonymous as possible and, as he points out ‘we hope that these mixes will lead us back to the better cognacs – drunk neat.’ Also in its favour is its capacity to provide a more interesting twist on classic whisky-based cocktails – barmen sometimes admit that they’re often doing the equivalent of merely reinventing the alcoholic wheel. But then some of these – notably the julep – were originally based on cognac only to be usurped by bourbon.

If you’re using lemon or even orange then obviously you want a richer style of cognac – say Courvoisier or Hennessy – to compensate for the bitterness of the citrus fruit. Ready made ones like Grand Marnier or Cointreau which combine orange and brandy can be replicated – after a fashion. There are obvious mixers apart from citrus fruit and other fruit like apples, such as cream, chocolate and coffee. Just think of the Brandy Alexander favoured by Anthony Blanche, a character in Brideshead Revisited – though Waugh is clearly painting him as a bounder. The Alexander normally uses dark crème de cacao and grated nutmeg, though Blanche obviously wanted cream with his. Either way it’s fine because although it’s inevitably sweet, you’re not overly conscious of the individual constituents but only of the blend.

Cosmopolitan
A classic cocktail that goes down well on any occasion. Once again, easy to make and provides a taste sensation that’ll delight the taste buds. A great aperitif to enjoy before any meal. Add Media

Ingredients
6cl cognac (quality and brand of your choice)
1.5cl Cointreau
1.5cl lemon juice
3cl cranberry juice
crushed ice
wedge of lime

Prepare and chill cocktail or martini glasses. Place all the ingredients except the lime into a cocktail shaker. Mix well and allow to chill. Strain into the glasses and garnish with a wedge of lime. Serve immediately.

The Summit
This was created in 2008 specifically for the occasion known as the International Cognac Summit, an event organised by the BNIC. Mixologists and other cognac experts joined forces to create the ultimate cognac cocktail. The cocktail had to be simple to produce, with easily accessible ingredients. It also had to look fabulous – and taste amazing. And the Summit cocktail was the end result.

Ingredients
4 slices of freshly peeled ginger
1 slice of lime
4cl of VSOP cognac (brand of your choice)
6cl of lemonade
a fine peel of cucumber, to garnish

Place the lime and ginger into a glass and add 2cl of cognac. Add the ice and stir to mix. Add the rest of the cognac and the lemonade, then garnish with the cucumber. Serve immediately.

Sidecar
This classy little cocktail is both simple and chic. It not only tastes fabulous, but looks just wonderful when served. It is believed that it was so named after the motorcycle sidecar in which an eccentric British captain in Paris during the Second World War was transported to the bistro where the cocktail was born. The first recorded listing for this cocktail can be found in the early 1920s books, Harry’s ABC of Cocktails, and Cocktails, How to Mix Them. In the USA the Sidecar is often served with a sugared rim, and is very popular. 

Ingredients
2 parts of VS or VSOP cognac
1 part fresh lemon juice
1 part Triple Sec
dash of sugar syrup
1 twist of lemon peel for garnish

Place all the ingredients (bar the lemon peel) in a cocktail shaker with some crushed ice and mix. Allow to cool and then strain into a chilled cocktail glass. Garnish with the twist of lemon peel and serve immediately.

Cognac buy

The Premier League season 2014–2015 kicks off

15 August 2014 by in Business and finance, Football Business

Well, after what seems like an eternity with not even a mention of football, the new Premier League season is about to begin. So are you excited, wondering how your team will fare this year? Looking forward to some flashes of goal-scoring genius? Wondering who the season’s new star will be (perhaps it’s the manager – or perhaps not)? More importantly – have you been saving up?

As football fans are all too well aware the price of following the world’s favourite sport can take its toll – some have even started to protest the prices of attending a match. When you look at some of the costs assiociated with supporting football these days you can start to see why these fans are angry. Here are just a few examples of current Premier League prices:

  • A season ticket for last year’s cup champions Arsenal, the Premier League’s most expensive, will cost you a minimum of £1,014. Which makes last year’s league champions seem like a bargain – a season ticket at City will only set you back £299.
  • A ticket to Manchester United’s match versus Swansea at Old Trafford tomorrow (could you get your hands on a legitimate one) will set you back between £31 and £53.
  • Should attending matches be too rich for your blood you could always subscribe to Sky Sports for an extra (yes, on top of your basic subscription) £24.50/month. But don’t forget you’ll need an account with BT too if you want to watch all the Premier League matches, as many of the top games this season will be live on BT Sport.
  • A shirt for any of the big five costs £49.99. If you want one for your offspring too that’s another £35–40 per child.

But OK, it’s 2014 and the prices of everything have gone up in our lifetimes; that’s the way commerce moves. Perhaps it doesn’t matter that with your season ticket to Arsenal, a new shirt and attendance at all the away games you’re going to be spending in the region of at least £2000, if you get £2000-worth of enjoyment from it. But as author Tsjalle van der Burg points out in his new book, Football business, the cost of football has risen out of line with the economy as a whole. He thinks it’s unlikely that the enjoyment of fans has risen in line with the costs of being a fan.

In fact the way football is run now it is likely that it has become less enjoyable for the fans, largely due to what Van der Burg calls ‘competitive inequality’. In simple terms this means that the wealthier clubs (those owned by oligarchs and sheikhs) can afford better players, making them more likely to win tournaments and leagues. Consistently winning teams get more supporters and sell more tickets, get more promotional opportunities and make more money from the TV rights to games. So the rich become richer. If you support a less wealthy club, watching matches against the wealthier clubs can be frustrating as you know you have very little chance of winning. But this inequality can also make games less enjoyable for the fans of wealthier clubs – if you know you have very little chance of losing, a lot of the excitement of winning is taken away. As Van der Burg points out, enjoyment can’t be measured scientifically but he notes:

“In football, the quality of the basic product – football matches – has not improved over the years. Barcelona–Real Madrid is no more enjoyable or exciting today than it was in the past. Lionel Messi does not entertain the average Barcelona fan more than Johan Cruijff used to. And in all competitions, fewer goals are scored now. It’s a safe bet that in the next final of the Champions League there will not be ten goals in 90 minutes, as there were in the 1960 European Cup final. One of the reasons may be that current coaches put results ahead of entertainment, precisely because of the enormous amounts of money at stake.”

Van der Burg is an economist so he has tried to work out the problem using economic calculations. He asks if the sport would be more enjoyable if all clubs had the same chance of winning. You might think the simple and obvious answer is ‘Yes’ but as Van der Burg points out, if you take it down to bare statistics it’s not that clear cut – after all Liverpool have far more fans than Swansea so when Swansea beat Liverpool the enjoyment is experienced by a smaller proportion of fans. But:

“If Swansea were to win the title next year, the pleasure of the average fan of the league champion would possibly reach an all-time high. In addition, people who have sympathy for the underdog would also be pleased. A Swansea title would show that, however hopeless a situation may seem, and however life turns against you, hope is always justified. This will also make the fans of other clubs feel better during the next season, since much of their pleasure is based on hopes and expectations. Indeed, this is what [Major League Basebell promoter] Bill Veeck taught us long ago: sports clubs produce dreams. And to enable fans to dream, it would help if clubs like Swansea had some chance of winning the title one day.”

One thing is certain – football has more fans than ever worldwide. When the season kicks off at Old Trafford at 12.45 tomorrow excitement will be high not just in Swansea and wherever it is that United’s fans live but as far afield as Asia and South America. If we could find a way to keep that feeling going for all fans all season we’d be on to a winner.

Do you think football has become too expensive? Have you lost your enjoyment of the game as prices have risen or do you think it has become more exciting and enjoyable? Let us know what you think by filling in the comment box below or contacting us via Facebook or Twitter using the social media sharing buttons.

Football business

Competition: Best International Prediction of 2014

4 August 2014 by in Codebreaking our future

To celebrate the release of Codebreaking our Future by Michael Lee we are offering readers of our blog the chance to win a free subscription to the FutureFinder System for Individuals, which will help you identify future influences you can monitor.

While we’re interested in all your theories about the future, however outlandish, this article might help you come up with more reliable predictions. Once you’ve looked at these successful predictions (from Knowing our Future) and the methods behind them, let us know, in 300 words or fewer, using the form below, what your prediction is and how you arrived at your conclusion.

Michael Lee offers the following additional advice for predicting our future:

  • Read the news and pick an area of interest in which you would like to make a forecast (for example, technology or politics);
  • Look into the history of the evolution of the entity or subject you’ve chosen, to the current time;
  • Try to identify causes or strong influencing factors most likely to affect outcomes in this field;
  • Make your own rating of probabilities of possible outcomes based on this causal analysis, and choose pathways and outcomes which have strong probabilities.

Closing date is 5 September 2014. The winner will be notified by 19 September and their idea published on this blog and on the Institute of Futurology site. The subscription to the FutureFinder System for Individuals will be shared with the winner who will then be able to use the system without charge.

We're sorry but this competition has now closed.