Well, Reykjavik also has the advantage that it is the capital of a place with a unique and spectacular landscape that is a convenient flight away from both North America and Europe.
Yes but that was true before the Financial Crisis, the interesting bit here is that they were able to quickly decide on a next local gimmick and execute the transition from a mini financial services hub economy to a decently sized tourism hub economy faster than certain other locales can stand up a new busway.
Piece is obvs. long on special pleading for crypto (-derivative) traders, but just wondered if subject matter might be a usefully specific or especially stark exemplar of systems issues involved.
"“bastard Jane Jacobsism” – a sort of concept that density and agglomeration spontaneously generate economic activity, that the natural condition of human beings is to be starting businesses and they are only prevented by not being in close enough proximity to one another."
100%. I think that one of the biggest issues in economic development is that mainstream economists are supply siders who, without saying so, really believe in Say's Law. (This applies in skills policy as well.) Not saying we know how to create demand but at least admitting that would be a better start.
The consultant disease often sets in when the organization's Eloi distrust their Morlocks--where the knowledge of the folks in the middle is devalued. The result: the consultant (if honest and competent) does some work that could have been delegated to a few good middle managers.
Consultants work better when the Eloi distrust themselves, as TW just suggested.
What would they have done without that rescue ship from the IMF? What would they have done without Instagram, which came along just in time looking for spectacular backgrounds, and plenty of cheap flights to get you to them? These are external factors that can end. Then what?
They are an island in the middle of the Atlantic, with lava. Eventually, people will forget about Bjork.
Their economic meltdown showed that they are not that different from other people. An interesting account of it:
And trust is priceless; it is the real capital of any society. It makes society itself possible.
But I see tectonic plates shifting in society.
Not long after the murder of the United Health executive (my provider BTW) and just before the Trump inauguration, there was also this miracle: workers went on strike, and won!
Skiers were already upset with sky-high prices and over-crowding, but the patroller strike was the cherry on top, leading to a sudden avalanche of anger. Read the comments. Complicated problems, but the mother of them was ski areas being captured by giant profit-extracting companies.
"Vail" Resorts is not in even in Vail. It is literally situated in a corporate business park in Denver. Not in the Rockies, as you might have expected. Google Map it and see. But if the worker bees go to the top floor and look west, they can actually see the Rockies far in the distance. Or, looking to the East, they can genuflect towards Wall Street. As they wish. Otherwise, they have a great view of the parking lot all day, when they aren't jockeying spreadsheets. They can't go skiing; this is not Patagonia.
Fun idea: maybe Vail could economize on that lease by just breaking it and moving to the "House of the Rising Sun Office Park," in New Orleans? A video by the previous tenant:
There is something to "agglomeration" but usually it is propaganda, let's look at UK and USA businesses:
* There were highly successful business agglomerations in Stoke, Newcastle, Liverpool, Birmingham, etc. they all disappeared in the great Harrowing of the Labor Union North by Thatcher, Blair and successors.
* Most blue collar employing businesses in the USA and UK Rust Belt agglomerations did not move to places with better transport links, proximity to customers, etc., in the same country they moved to other continents in non-agglomerated areas but with much lower wages and where labor unions and strikes were illegal or practically non-existent. The same happened to many white collar employing businesses.
* Places like London or NYC used to have also lots of businesses in various industrial areas. As a rule they did not move to other more "agglomerative" places in the same country, they moved like the Rust Belt businesses to other continents.
My short take on development in the UK is that it is simultaneously a high living costs (especially housing, but not just) and a relatively (to the high living costs) low wages place, too bad that in absolute terms the low wages are still 10 times higher than in India and similar places. Until that is fixed any sensible business will choose to hire in low living cost, low absolute wage places. This is a problem common to all of "walled garden" Europe.
The main factor here is China and other "tigers": the claim by many in USA/UK/EU was that the places with 10 times lower wages were not just poor but backwards so they could not compete with UK/EU for higher valued added production but places like China and other "tigers" were just poor, not backwards, and they can do everything that the USA/UK/EU can do, often better, and with a much lower cost base (except in Shanghai and Beijing of course :->).
Now why are London financial services (and in lesser form those of Edinburgh) the exception? Because it has a valuable selling point, the same as Singapore, Dubai, caribbean island statelets, Zurich, Liechtenstein, etc.: people who want to do sleazy activities and hide them from their home country authorities lease the "shield of sovereignty" of those places for very generous consideration. The last thing that the business people of China and other "tigers" want to do is to expose their sleazy activities to their home country authorities.
Conceivably as the remote locations of some of those financial centres show "the City" could be anywhere in the UK, like Skegness or Carlisle, but there is something to be said for having it where government elites who support the leasing of the "shield of sovereignty" can go through the revolving door without having to relocate far away.
A good interview by Paul Krugman with Phillips O’Brien was posted today. O'Brien made a very interesting point that Europe has become incapable of making military decisions as it has relied on the USA for protection since WWII with the creation of NATO. He noted that Finland is far better at organizing its military because it had to depend on itself until 2022 [and should be put in charge of organizing a united EU military force.]
I think your general point is that if you have a hierarchically organized system, where information flows upward and orders flow downwards, what you gain in task efficiency may be stymied by an incapability to operate without orders. [Back to Beer's nested 5-part functional systems? Each part needs all 5 components to operate well, but we don't design hierarchical systems that way - but more like the old Soviet economic planning system, more like militaries throughout history.]
Average number of elected councillors (approx.) at District Council level : 40~50
County Council level : 80~90. Roughly double.
One issue : too few elected politicians. Given Dunbar numbers, Allen curves etc, etc, it's far too easy for cliques to form within both the controlling party and the opposition parties, when you're essentially dividing the number of councillors by two or three (and throw in a couple of independents or the Greens or whatever as well).
LGA's census of councillors : Kind of worrying. The annual basic allowance would be on the order of 15 grand. For 22 hours (average) per week, of which 8 hours (about 33%) is meetings. Or, about £14.50 per hour. Or 3 quid over NMW. Notionally, that's pretty close to median wage, FTE.
Given that the average age is 59~ish, and just under half are retired, that allowance - as a wage - is probably OK, on the assumption that councillors view the role as a duty or vocation. Otherwise, I wouldn't like to describe it as attractive. It's nowhere near that of MPs.
However, average length of service is around 9 years. Just under half are in their first (and possibly only) term. This suggests that specialist domain knowledge is limited, with, essentially, no store. Gets worse if the 10,000 hour rule of thumb is useful, that councillors would need 10 years to just to gain that knowledge.
54% hold positions of responsibility; meaning about 46% are available to scrutinise the decisions. For a DC with 45 councillors, with overall control (ie. a majority) being Lab, Con or LD, then the entire party group get positions (cabinet/executive). There are no stroppy backbenchers.
Further, about 40% are also members of another public body. Eek.
That's the environment on the receiving end of the massive over-centralisation, control of duties, responsibilities and budgets.
There's most likely no golden age of good governance, Hatton & Co didn't exactly help.
One start; increase the number of elected councillors. Realign incentives, possibly by re-directing NI - employees' to the Council where they reside, employers' to where the work (primary site) is carried out. Scrap property-based council tax entirely. And maybe the VOA. CT is just a complete botch after 40 odd years.
Possibly, election turnout might actually begin to approach 50% within a couple of cycles.
«One issue : too few elected politicians. Given Dunbar numbers, Allen curves etc, etc, it's far too easy for cliques to form within both the controlling party and the opposition parties»
That and other numbers are interesting let me add that over the years "The Economist" (when it is was still not mostly propaganda) reported two interesting details about local politics:
* 40% of local councilors declare "estate agent" as their occupation. "The Economist" remarked how amazing it was that a category often thought of as brutally self-interested were instead so keen on public service :-).
* 65% of local Conservative Association chairpersons were/are the owners of the local mortgage/insurance/etc. shop.
The second detail had a determinant effect on the old "pension misselling" story (prosecuting 65% of local Conservative Association chairmen was deemed unpolitic).
Also, I didn’t think about the public sector. It can’t be firing, because until reckless no one got fired in the public sector. So in the public sector, perhaps consultants are hired to do the detailed work.
Not this consultant. Nor, for government sectors, is this usually the case, recent events notwithstanding.
I've found that much contemporary practice, including mine, is about identifying why the client is not seeing what they need to see to deliver the results they want. Anything a recent MBA could see, such as a balance sheet, has already been seen, believe me. This is one of the factors that makes firing people much less valuable, in terms of a paid service designed to "optimize" a business. It's commodified now, and in many industries the firing has always already happened. But McKinsey! Well, hiring them is about providing apparent legitimacy to any decision that might be made. The point of going to a fancy restaurant isn't to get full, even if you do.
Well, Reykjavik also has the advantage that it is the capital of a place with a unique and spectacular landscape that is a convenient flight away from both North America and Europe.
Yes but that was true before the Financial Crisis, the interesting bit here is that they were able to quickly decide on a next local gimmick and execute the transition from a mini financial services hub economy to a decently sized tourism hub economy faster than certain other locales can stand up a new busway.
(Off-topic, but:) of interest?
Time for the SEC to get serious on crypto
https://www.ft.com/content/96c3a8da-e3c5-4b19-a848-08995cda91a4
Piece is obvs. long on special pleading for crypto (-derivative) traders, but just wondered if subject matter might be a usefully specific or especially stark exemplar of systems issues involved.
"“bastard Jane Jacobsism” – a sort of concept that density and agglomeration spontaneously generate economic activity, that the natural condition of human beings is to be starting businesses and they are only prevented by not being in close enough proximity to one another."
100%. I think that one of the biggest issues in economic development is that mainstream economists are supply siders who, without saying so, really believe in Say's Law. (This applies in skills policy as well.) Not saying we know how to create demand but at least admitting that would be a better start.
Very much this.
Stimulating demand has risks, but "no such thing as a free lunch".
The consultant disease often sets in when the organization's Eloi distrust their Morlocks--where the knowledge of the folks in the middle is devalued. The result: the consultant (if honest and competent) does some work that could have been delegated to a few good middle managers.
Consultants work better when the Eloi distrust themselves, as TW just suggested.
Hi Dan.
Re Iceland:
What would they have done without that rescue ship from the IMF? What would they have done without Instagram, which came along just in time looking for spectacular backgrounds, and plenty of cheap flights to get you to them? These are external factors that can end. Then what?
They are an island in the middle of the Atlantic, with lava. Eventually, people will forget about Bjork.
Their economic meltdown showed that they are not that different from other people. An interesting account of it:
https://www.worldfinance.com/strategy/the-untold-story-of-icelands-financial-meltdown
May I recommend a film along these lines? Will make you laugh, and cry: "Local Hero"
https://www.youtube.com/watch?v=nufb3JysCgY
You still cannot "price" the priceless.
And trust is priceless; it is the real capital of any society. It makes society itself possible.
But I see tectonic plates shifting in society.
Not long after the murder of the United Health executive (my provider BTW) and just before the Trump inauguration, there was also this miracle: workers went on strike, and won!
https://utahstories.com/2025/03/park-city-ski-patrol-strike-shook-vail-resorts-ended-in-victory-for-fair-wages/
The issue of "community trust" is specifically raised 14 minutes 30 seconds into the next video:
https://www.youtube.com/watch?v=0bfD4NiiMfo
Skiers were already upset with sky-high prices and over-crowding, but the patroller strike was the cherry on top, leading to a sudden avalanche of anger. Read the comments. Complicated problems, but the mother of them was ski areas being captured by giant profit-extracting companies.
"Vail" Resorts is not in even in Vail. It is literally situated in a corporate business park in Denver. Not in the Rockies, as you might have expected. Google Map it and see. But if the worker bees go to the top floor and look west, they can actually see the Rockies far in the distance. Or, looking to the East, they can genuflect towards Wall Street. As they wish. Otherwise, they have a great view of the parking lot all day, when they aren't jockeying spreadsheets. They can't go skiing; this is not Patagonia.
Fun idea: maybe Vail could economize on that lease by just breaking it and moving to the "House of the Rising Sun Office Park," in New Orleans? A video by the previous tenant:
https://www.youtube.com/watch?v=N4bFqW_eu2I
OK, maybe not. Meanwhile, seen any wolfs wandering around, looking for their next meal? Hmmm.
Iceland is a nice little country, near Greenland.
Look the other way.
There is something to "agglomeration" but usually it is propaganda, let's look at UK and USA businesses:
* There were highly successful business agglomerations in Stoke, Newcastle, Liverpool, Birmingham, etc. they all disappeared in the great Harrowing of the Labor Union North by Thatcher, Blair and successors.
* Most blue collar employing businesses in the USA and UK Rust Belt agglomerations did not move to places with better transport links, proximity to customers, etc., in the same country they moved to other continents in non-agglomerated areas but with much lower wages and where labor unions and strikes were illegal or practically non-existent. The same happened to many white collar employing businesses.
* Places like London or NYC used to have also lots of businesses in various industrial areas. As a rule they did not move to other more "agglomerative" places in the same country, they moved like the Rust Belt businesses to other continents.
My short take on development in the UK is that it is simultaneously a high living costs (especially housing, but not just) and a relatively (to the high living costs) low wages place, too bad that in absolute terms the low wages are still 10 times higher than in India and similar places. Until that is fixed any sensible business will choose to hire in low living cost, low absolute wage places. This is a problem common to all of "walled garden" Europe.
The main factor here is China and other "tigers": the claim by many in USA/UK/EU was that the places with 10 times lower wages were not just poor but backwards so they could not compete with UK/EU for higher valued added production but places like China and other "tigers" were just poor, not backwards, and they can do everything that the USA/UK/EU can do, often better, and with a much lower cost base (except in Shanghai and Beijing of course :->).
Now why are London financial services (and in lesser form those of Edinburgh) the exception? Because it has a valuable selling point, the same as Singapore, Dubai, caribbean island statelets, Zurich, Liechtenstein, etc.: people who want to do sleazy activities and hide them from their home country authorities lease the "shield of sovereignty" of those places for very generous consideration. The last thing that the business people of China and other "tigers" want to do is to expose their sleazy activities to their home country authorities.
Conceivably as the remote locations of some of those financial centres show "the City" could be anywhere in the UK, like Skegness or Carlisle, but there is something to be said for having it where government elites who support the leasing of the "shield of sovereignty" can go through the revolving door without having to relocate far away.
A good interview by Paul Krugman with Phillips O’Brien was posted today. O'Brien made a very interesting point that Europe has become incapable of making military decisions as it has relied on the USA for protection since WWII with the creation of NATO. He noted that Finland is far better at organizing its military because it had to depend on itself until 2022 [and should be put in charge of organizing a united EU military force.]
I think your general point is that if you have a hierarchically organized system, where information flows upward and orders flow downwards, what you gain in task efficiency may be stymied by an incapability to operate without orders. [Back to Beer's nested 5-part functional systems? Each part needs all 5 components to operate well, but we don't design hierarchical systems that way - but more like the old Soviet economic planning system, more like militaries throughout history.]
«Europe has become incapable of making military decisions as it has relied on the USA for protection since WWII»
Suez 1956! A lesson in "protection" that none of the european elites have forgotten.
Average number of elected councillors (approx.) at District Council level : 40~50
County Council level : 80~90. Roughly double.
One issue : too few elected politicians. Given Dunbar numbers, Allen curves etc, etc, it's far too easy for cliques to form within both the controlling party and the opposition parties, when you're essentially dividing the number of councillors by two or three (and throw in a couple of independents or the Greens or whatever as well).
LGA's census of councillors : Kind of worrying. The annual basic allowance would be on the order of 15 grand. For 22 hours (average) per week, of which 8 hours (about 33%) is meetings. Or, about £14.50 per hour. Or 3 quid over NMW. Notionally, that's pretty close to median wage, FTE.
Given that the average age is 59~ish, and just under half are retired, that allowance - as a wage - is probably OK, on the assumption that councillors view the role as a duty or vocation. Otherwise, I wouldn't like to describe it as attractive. It's nowhere near that of MPs.
However, average length of service is around 9 years. Just under half are in their first (and possibly only) term. This suggests that specialist domain knowledge is limited, with, essentially, no store. Gets worse if the 10,000 hour rule of thumb is useful, that councillors would need 10 years to just to gain that knowledge.
54% hold positions of responsibility; meaning about 46% are available to scrutinise the decisions. For a DC with 45 councillors, with overall control (ie. a majority) being Lab, Con or LD, then the entire party group get positions (cabinet/executive). There are no stroppy backbenchers.
Further, about 40% are also members of another public body. Eek.
That's the environment on the receiving end of the massive over-centralisation, control of duties, responsibilities and budgets.
There's most likely no golden age of good governance, Hatton & Co didn't exactly help.
One start; increase the number of elected councillors. Realign incentives, possibly by re-directing NI - employees' to the Council where they reside, employers' to where the work (primary site) is carried out. Scrap property-based council tax entirely. And maybe the VOA. CT is just a complete botch after 40 odd years.
Possibly, election turnout might actually begin to approach 50% within a couple of cycles.
«One issue : too few elected politicians. Given Dunbar numbers, Allen curves etc, etc, it's far too easy for cliques to form within both the controlling party and the opposition parties»
That and other numbers are interesting let me add that over the years "The Economist" (when it is was still not mostly propaganda) reported two interesting details about local politics:
* 40% of local councilors declare "estate agent" as their occupation. "The Economist" remarked how amazing it was that a category often thought of as brutally self-interested were instead so keen on public service :-).
* 65% of local Conservative Association chairpersons were/are the owners of the local mortgage/insurance/etc. shop.
The second detail had a determinant effect on the old "pension misselling" story (prosecuting 65% of local Conservative Association chairmen was deemed unpolitic).
Consultants are hired when you need to fire some people. In the States, anyway.
«Consultants are hired when you need to fire some people.»
Consultant are usually hired for these purposes:
* To provide cover/shift blame for a decision already taken by executives, such as indeed "downsizing".
* To provide temporary extra bodies in periods of higher load, essentially as higher-level temps.
* To use specialist knowledge that the business does not normally need to provide useful advice to executives.
The third case is by far the rarest.
Your first “to provide.” Before it is announced.
Also, I didn’t think about the public sector. It can’t be firing, because until reckless no one got fired in the public sector. So in the public sector, perhaps consultants are hired to do the detailed work.
Not this consultant. Nor, for government sectors, is this usually the case, recent events notwithstanding.
I've found that much contemporary practice, including mine, is about identifying why the client is not seeing what they need to see to deliver the results they want. Anything a recent MBA could see, such as a balance sheet, has already been seen, believe me. This is one of the factors that makes firing people much less valuable, in terms of a paid service designed to "optimize" a business. It's commodified now, and in many industries the firing has always already happened. But McKinsey! Well, hiring them is about providing apparent legitimacy to any decision that might be made. The point of going to a fancy restaurant isn't to get full, even if you do.