Feeling a little ambitious? Be careful what you wish for.


Ambition: not to be clowned around with

Here’s a truly sobering passage from the pages of Smith’s Theory of Moral Sentiments. Ambition – or at least an ambition which has run its course – is painted as a kind of living death, and echoes those famous lines from Hamlet: “the dread of something after death, the undiscovered country, from whose bourn no traveller returns”. To achieve your goals can indeed be a fearful thing. It’s no coincidence that Bob Geldof’s autobiography is called, “Is That It?“, published after what must have been a monumental comedown post Live Aid. It’s also possibly the reason why Pulp’s last album was the supremely miserable, “This is Hardcore“, recorded after Jarvis Cocker’s realisation that fighting for what you want for so long, and then getting it, simply resulted in spending lots of time in hotel rooms alone watching films you probably shouldn’t. Even George W. Bush’s surprisingly readable autobiography, “Decision Points“, ends with the sorry post-presidential scene of him picking up poodle poop from his front lawn. Caveat emptor, dude.

‘Love,’ says my Lord Rochfaucault, ‘is commonly succeeded by ambition; but ambition is hardly ever succeeded by love.’ That passion, when once it has got entire possession of the breast, will admit neither a rival nor a successor. To those who have been accustomed to the possession, or even to the hope of public admiration, all other pleasures sicken and decay. Of all the discarded statesmen who for their own ease have studied to get the better of ambition, and to despise those honours which they could no longer arrive at, how few have been able to succeed? The greater part have spent their time in the most listless and insipid indolence, chagrined at the thoughts of their own insignificancy, incapable of being interested in the occupations of private life, without enjoyment, except when they talked of their former greatness, and without satisfaction, except when they were employed in some vain project to recover it. Are you in earnest resolved never to barter your liberty for the lordly servitude of a court, but to live free, fearless, and independent? There seems to be one way to continue in that virtuous resolution; and perhaps but one. Never enter the place from whence so few have been able to return; never come within the circle of ambition; nor ever bring yourself into comparison with those masters of the earth who have already engrossed the attention of half mankind before you.

Adam Smith, The Theory of Moral Sentiments


Less sizzle, more steak: how to get a president elected

Audacity to Win - David Plouffe
I remember when I was first passed a copy of The Audacity to Win by a good friend. He was in a state of nervous excitement when he handed it over. “You have to read this,” he said. “It’s amazing.”

I turned the hardback over in my hands. It was heavy and had a truly boring picture on the front of two suited guys hanging out in a locker room. It took me a second or two to realise one of them was Obama. The author’s name was weird too: David Plouffe. What kind of name is that? It didn’t look particularly promising. Sensing my apprehension, my friend ploughed on. “He’s the guy who took Obama from obscurity to presidency in less than two years. It’s a must read, believe me.”

My friend wasn’t wrong. I started it somewhat reluctantly at the weekend, but found myself turning the last page only three days later – an altogether astounding feat for someone like me; I never read much of anything these days unless it’s attached to an e-mail. And I don’t read much of them, either.

Plouffe (pronounced Pluff, by the way) is an extraordinary character. Part nerd, part hard guy and all-round workaholic, he is a strategy supremo and the mastermind behind the single most amazing election campaign ever run.

As a campaign team, they began life with no money, no equipment, and no access to any kind of talent whatsoever. Plouffe compared them at this time to a small start up company with only to an idea and a couple of laptops to hand. Given that they were also intending to run against the force of nature that was Hillary “I’m in this to win” Clinton, their chances of success were as close to zero as you can possibly get.

What they did have, however, was a candidate they absolutely believed in: Senator Obama.

That said, beliefs like this are nothing special in the campaign business; every other campaign team feels the same about their candidate (except they have the access to money, connections and the talent to back it up too).

So where to start?

Plouffe started by throwing out the campaign rule book. Instead of running his campaign the way they were always run – that is, by going round raising money from the big sponsors – he started doing research on the people who actually vote for the candidates at the grass roots level, building up the data and then building his campaign strategy up from that. He thought (rightly, as it turned out) that he could try a different tack when it came to raising funds. His evidence showed that, at the grass roots level, people were really keen on the central Obama message of change. They were fed up with the old style of politics and bought Obama’s message that it simply wasn’t fit for purpose any more. Not only that, the evidence showed that they might also be willing to contribute funds to make that change happen.

What follows is a master class in evidence-based strategic thinking.

First, they chose to stick to a really simple message – in this case ‘change’ – and then develop a single strategy around it. The team decided from the outset that they would rather have one strategy and stick to it, even if it failed, than six or seven competing strategies.

Second, if the evidence shows you should be doing one thing, but your instinct tells you to do something else, go with the evidence. The team were showered with abuse from the Clinton camp. They said the Obama campaign strategy was wrong; that they should be looking for the big money, and that they simply couldn’t win. Everything they knew and had learned about running campaigns screamed at them to change tack. But the evidence said otherwise, and so they stayed on course. What worked was one message; one strategy; sticking to one path (not many).

Third, they turned on the technology. The Clinton camp didn’t bother much about any of that – after all, it’s not where their big sponsors were (fair enough); for them, technology was all sizzle and no steak. But Plouffe’s data showed that the grass roots people he was targeting used technology and social media all the time, so his strategy targeted them that way too. Again, it was all about the market evidence underpinning the strategy at every juncture. In fact everything they did was measured against the strategy; if it didn’t fit, it got dumped. Simple.

Fourth, to check the strategy was working, they set clear internal guidelines along the way. This way they could judge performance on objective markers, rather than vague subjective ones. Plouffe argues that this also improved morale in the team because judgements on performance are open and transparent. You want to raise money? Put it in the performance agreement, and assign it a name from the team.

Fifth, he built great teams that were focused, but had fun too. The team motto was ‘Respect, Empower, Include.’ But my favourite ‘Pluffy Rule’ concerning teams was his ‘no assholes’ edict. Even if people had the talent, they weren’t hired if they didn’t fit in with the team; the team came first, not talented individuals. Plouffe’s right on the money when he says that people just perform better when they’re not being shouted at (are you listening Steve Jobs?). Conversely, it’s been widely reported that Clinton’s team was rife with infighting and mud slinging.

In the end, it all came down to the vision, the evidence and the strategy that pinned the two together. As Plouffe said to his team, “We need to be sure we’re doing the right thing, otherwise we’ll spend the remainder of the time twisting in the wind and hating every minute of it, and we’ll lose.”

How did he know they were doing the right thing? Evidence, constant market research and analysis of the results they were getting along the way.

In the end, the evidence-based strategy won, and the old, ‘we’ve-always-done-it-this-way-so-why-change’ strategy lost. Their radical approach to raise campaign funds at the grass roots level, using technology and on the ground ambassadors, paid huge dividends in the long run. Along the way they had to suffer the constant ridicule of rival teams. It says something about their success that, when the dust settled, the Clinton camp came asking Plouffe’s team to help pay off their campaign debts. Seems their old style strategy had simply sizzled out.

So if you want an entertaining lesson in how to build a winning strategy based on evidence, buy the book; it’s well worth it. It’s got a horrible picture on the front, mind.

Audacity to Win, by David Plouffe is available pretty much everywhere, including Amazon.

Apocaholics Anonymous



As the average age of a country’s population rises, so people get more and more neophobic and gloomy. There is immense vested interest in pessimism, too. No charity ever raised money for its cause by saying things are getting better. No journalist ever got the front page by telling his editor that he wanted to write a story about how disaster was now less likely. Good news is no news, so the media megaphone is at the disposal of any politician, journalist or activist who can plausibly warn of a coming disaster. As a result, pressure groups and their customers in the media go to great lengths to search even the most cheerful of statistics for glimmers of doom […] Apocaholics (the word is Gary Alexander’s – he calls himself a recovering apocaholic) exploit and profit from the natural pessimism of human nature, the innate reactionary in every person. For 200 years pessimists have had all the headlines, even though optimists have far more often been right. Archpessimists are feted, showered with honours and rarely challenged, let alone confronted with their past mistakes.

Matt Ridley, The Rational Optimist

On the grubby pursuit of wealth and glory


Did Adam Smith answer his own question?

Perhaps no economist will ever again so utterly encompass his age as Adam Smith. Certainly none was ever so serene, so devoid of contumacy, so penetratingly critical without rancour, and so optimistic without being utopian. To be sure, he shared the beliefs of his day; in fact, he helped to forge them. It was an age of humanism and reason; but while both could be perverted for the cruellest and most violent purposes, Smith was never chauvinist, apologist, or compromiser. “For what purpose”, he wrote in The Theory of Moral Sentiments, “is all the toil and bustle of this world? What is the end of avarice and ambition, of the pursuit of wealth, of power, and pre-eminence?” The Wealth of Nations provides his  answer: all that grubby scrabbling for wealth and glory has its ultimate justification in the welfare of the common man.

Robert Heilbroner, The Worldly Philosophers

For those of you interested in reading a little more about Heilbroner, I can suggest the following article on Reason. But the best thing to do is read his supremely influential book The Worldly Philosophers – it’s a truly brilliant historical overview of the subject and doesn’t once reference one of those tedious graphs mapping demand and supply. Highly recommend.

No amount of “cunning plans” will save the Euro now


Why the Euro project should embrace failure

“Never ascribe to conspiracy that which is adequately explained by incompetence.” Napoleon

Here’s an interesting question you don’t hear asked very often, if at all: What specific problem was the introduction of the Euro supposed to solve?

It’s interesting because the point of initiating new projects is usually to solve a problem or improve something. Trouble is, when you think of the Euro in these terms, it is hard to grasp what its introduction was supposed to actually achieve.

I can think of three possible answers. Let’s call these the federal, peace and convenience cases.

The federal case

Proponents of this view believe that the Euro is a necessary stepping stone towards tighter European integration. While the ultimate goal of this trajectory may or may not be the emergence of a truly federal state (a United States of Europe, so to speak), it is clear that this camp values the further integration of such things as taxes, labour legislation and welfare provision. Why? Because this would build a stronger EU block, one which would then be a true giant on the world stage, one which could both challenge the current hegemony of the United States and the ambitions of China at the same time.

Regardless of whether you are a supporter of this vision or not, one of the key issues with this explanation is that by introducing the Euro first, the federal camp has put the currency cart before the reform horse. For the Euro to have any chance of working, you really do need to work towards better integration of taxes, labour laws and welfare (amongst other things), but you need to do this before introducing a single currency. Doing it in reverse order merely exacerbates and amplifies these differences, rather than helping to keep them in check. Think Greece and Germany and you can see this is precisely where we are now.

Peace has broken out?

The second suggested problem goes something like this: countries that share the same currency don’t go to war. There is no doubt that this is a noble aim – who amongst us doesn’t want peace? Unfortunately this is not proving to be true. If anything the fissures and strains being caused by the Euro are actually putting Europe at risk. It is probably far-fetched to say that the Euro itself will lead to war; however with insults flying across borders and the far right parties pitching into the emerging political void, it is most certainly not helping with regard to keeping friendly relations between states.

The lazy traveller

The third and final problem that the Euro has been stated to solve is that of convenience. In short: single currencies are convenient to travellers, and means we don’t need to visit that Forex shop so often. This argument would be laughable if the current situation wasn’t so serious. On another level it’s not even true. We’ve had a single currency for years. It’s called a credit card.

Sound foundations?

So if the Euro isn’t doing such a great job of fixing any of the three potential problems we’ve identified, where does that leave us?

Some may still argue that, even though the Euro wasn’t designed to fix or improve anything, the principle of a single currency is still economically sound; therefore the Euro should stay and is worth fighting for. The big question to ask here is this: why do the proponents of the Euro believe this?

I think those who argue that the Euro is built on sound economic foundations are either having a joke at our (very considerable) expense, or woefully naïve. Like Napoleon, let’s be generous and assume the latter.

To demonstrate the poor economics of the Euro, here’s some extremely interesting analysis from Michael Cembalest, the CIO of JPMorgan. What he’s done is look at over 100 factors against which countries could be compared (such as global competitiveness, government institutions, corruption, debt levels, health and education, business sophistication, labour markets and capacity for innovation – to name but a few), and then put some countries into different, imaginary groups to see how they stack up to the actual grouping of the EMU.

Michael Cembalest's data shows how poorly the EMU region stacks up.

Michael Cembalest’s data shows how poorly the EMU region stacks up.

If you have a close look at this, and you’ll spot the killer punch. Even a grouping of a random selection of countries (those that begin with the letter “M”) have more in common when looking at these 100+ factors than the current grouping of the countries in the EMU block.

That’s pretty alarming.

As Cembalest argues, “you can ignore economics but it doesn’t mean that economics is going to ignore you”. That, in a nutshell, is the headache we are dealing with now. In other words we’ll need to put in the hard work and slog of the getting the reform horse right first, before we should even consider attaching a currency cart. You basically need to drag that tall bar way down, and as you can see, that’s some task.

Euro to blame?

But is this really all the Euro’s fault? Isn’t it just being portrayed as a scapegoat here? Surely there are other factors at play? That’s true; there are plenty of fundamental reforms out there that need to happen in order to get some of the worst performing countries back on track.

But here’s where the Euro has had a huge part to play in actually stopping those radical reforms from happening. When the Euro arrived, it flooded some of the more fragile markets with cheap credit, propelling them into a looking glass world where it seemed more or less anyone could afford more or less anything. Governments and peoples (we can’t just blame the politicians here) went on a spending spree, and all of those much needed reforms were put on ice – if not forgotten about altogether. It was party time! Big up your debt! Trouble is, all those problems didn’t go away, they just went into hibernation, and now the party is most definitely over, they’re back and they’re hungry, and no amount of Euro dollars seems to be able to satiate their appetite.

So if the Euro is not fixing any problems but instead generating them, and it’s also not economically sound too boot, then it starts to look like what it is – a failing political project that is literally costing us billions (if not potentially trillions) to keep on life support. It is, I suspect, one of the greatest boondoggle projects ever conceived by mankind. What makes this even more tragic is that the road we are heading down is one paved with good intentions, such as integration, peace and convenience.

Cunning Plans

So what should we do? The answer is, I think, obvious. We kill it. There is simply no way to save something that is this fundamentally unsound, and nor should we try. There are serious issues and reforms to deal with and the Euro is taking up far too much of our time, resources and money. Europe needs to be competitive again, and spend more money supporting R&D and entrepreneurs, but the Euro is getting in the way and throwing us off course.

Killing something is not a pretty solution, I admit, but better that then the endless series of hastily agreed carrot and stick solutions (the “bailouts and blackmail” approach) whose rules and goalposts change from one horrendous incident to the next. All too often they feel like the real life equivalents of the “cunning plans” that Baldrick from Blackadder proposes – “My Lord, we’ll solve the problem of the sinking house by building another floor on top”.

The brave (and competent) politicians we need now are not the ones with yet another rescue plan for the Euro, but the ones who come up with the best plan for the least painful exit. As Gideon Rachman on the FT once argued, the German’s have the best quote for this kind of situation, “better an end with horror than a horror without end.”

Footnote: I am very much a pro-European, but I am definitely very sceptical about the Euro. It is possible to hold both of these propositions without being in contradiction. In fact it is precisely because I am pro-European that I am anti-Euro.

Europe’s future will be muddled

merkel cameron hollande

An uncomfortable alliance

Here’s a short, provocative and interesting piece on the past, present and future of Europe by Anthony de Jasay on the Library of Economics and Liberty. It was written before the current debacle in Cyprus, but the conclusions – that Europe will muddle on for the foreseeable future through an increasingly uncomfortable alliance between the UK, France and Germany – will, I think, hold true. At least for now.

Anthony de Jasay, “A Triangular Europe: Three Incompatible Conceptions.” March 4, 2013. Library of Economics and Liberty. 27 March 2013. <http://www.econlib.org/library/Columns/y2013/Jasaytriangular.html>.

A beginner’s guide to self ownership


Fun stuff this. However don’t be tempted down the rabbit hole of becoming a libertarian as a result – society and the well-being of your fellow man is too important to get hung up too much on yourself. We have duties as well as rights. But as it stands, it’s a good introduction to the idea of self-ownership and property rights. Enjoy!