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27 Jun 09

Excerpt - 'The Industrial Revolutionaries,' by Gavin Weightman - First Chapter - NYTimes.com

hapter One: SPIES

There were spies everywhere in eighteenth-century Britain. Though they disguised themselves in a variety of ways, they all had one ambition - to unearth the secrets of Britain's industrial success. They came from many different European countries, from Russia, Denmark, Sweden and Prussia, but the most eager of the spies were from Britain's greatest rival, France. Many were very erudite men who posed as disinterested tourists, compiling reports which they presented as purely academic treaties. Others posed as workmen in the hope of getting close to some fiendishly clever piece of machinery. And wherever the spies failed to gain entry, they were often reduced to lurking around local inns, hoping to engage knowledgeable workmen in conversation and induce them to cross the Channel for some splendid reward.

It was already evident to the French and other Europeans that Britain was gaining an industrial lead in the first half of the eighteenth century. There was, for example, the newly acquired technique of smelting iron with purified coal or 'coke' instead of charcoal, a fuel which was becoming prohibitively expensive. There were processes for the preparation of raw wool which were trade secrets and much sought after, as were some of the arcane skills of watchmakers. In the absence of any really reliable textbooks or journals which might disseminate information on how things were done, the most effective way to steal an innovation was simply to bribe a skilled workman to leave his employer. Indeed, in 1719 the British government had passed a law forbidding craftsmen to emigrate to France or any other rival country and put a penalty on attempted enticement. At that time the chief concern was the loss of iron founders and watchmakers. But after the mid-century it was the astonishing developments in textiles which were the chief target of foreign spies and the subject of protectionist legislation outlawing the export of tools and machinery as well as skilled men. It was in this trade that the English t

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19 Jun 09

Paul Kedrosky's Infectious Greed

I can't testify to the quality of the underlying data, but the findings in this employee survey are worth sharing:

* More than half (54%) of employed Americans report that they are likely to look for new jobs once the economy turns around.
* 71% of those between 18-29 are likely to look for new jobs once the upturn begins.
* Only 22 percent of Americans are saving money to prepare for a layoff.

paul.kedrosky.com - Preview

mary meeker track print new normal finance

  • an investment bank with a car showroom attached.
       -- Analyst
    quoted in Times
    of London
  • . The first phase is what the US is now experiencing, and that is mainly
    coming from the liquidity crisis. FRB has provided a credit line close to $1
    trillion and major institutions are now at the mercy of this facility. We lost
    Yamaichi and Sanyo Securities during the first phase of the crisis because they
    could not pull money from the inter-bank facilities. The second phase comes
    mainly from working out the bad assets. They face the problem as the write-offs
    far exceed the equity and they can not raise fresh capital from the market as
    their share price falls to a meaningless level. The Long-term Credit Bank of
    Japan, Nippon Credit Bank and Hokkaido Takushoku Bank all failed due to the
    write offs coming from loans to failing or failed companies. At this stage, it
    is important for the government to inject fresh capital to let the banks revive
    and return to their normal operation. In doing so, the Government could end up
    owning a bank directly or through debt-equity-swap.


    The third phase is characterized by the massive failures of operating
    companies. This is because survived financial institutions are under severe
    surveillance of the Government and they can not easily extend loans to
    traditional customers, or corporations. Japan has lost hundreds of companies ,
    such as Daiei, the largest retailer in Japan, in Phase 3. So, what Mr.Geithner
    talks about, i.e. Japan’s failure to address the right issues at the right time,
    is absolutely correct. What I am not sure is if the Americans are addressing the
    right issues with the right priorities and sequence, and how long it will take
    to get back to “business as usual”. It has taken Japan 15 years.

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An Interview With Paul Samuelson, Part One - Conor Clarke


Well I don't care very much for the People Magazine approach to applied economics, but let me put it this way. The 1980s trained macroeconomics -- like Greg Mankiw and Ben Bernanke and so forth -- became a very complacent group, very ill adapted to meet with a completely unpredictable and new situation, such as we've had. I looked up -- and by the way, most of these guys are MIT trained; Princeton to MIT or Harvard to MIT -- Mankiw's bestseller, both the macro book and his introductory textbook, I went through the index to look for liquidity trap. It wasn't there!

Oh, I used those textbooks. There's got to be something in there on liquidity traps.

Well, not in the index. And I looked up Bernanke's PhD thesis, which was on the Great Depression, and I realized that when you're writing in the 1980s, and there's a mindset that's almost universal, you miss a lot of the nuances of what actually happened during the depression.

I am regarded as a Keynesian. My book, which over a period of about 50 years sold millions of copies, for the first time brought home -- not only to advanced Ivy League places but also to community colleges and high schools -- the gist of the Keynesian macroeconomic system. I thought it would be a success because it was one Keynesian book by Lorie Tarshis, which for reasons I've never understood got completely tarred by a kind of a fascist group, and by Bill Buckley, as unsound and so forth. And unfairly that book never got a good chance. He had actually been a student of Keynes.

And my book came along and swept the field, and set a pattern so that every time somebody -- this is just scuttlebutt -- so that every time some economics textbook writer sued another textbook writer for plagiarism, it never got anywhere because the judge would just say, 'it's all Samuelson lite,' so to speak.

Anyway. Things swept so badly that I had distrust -- after 1967, let's say -- of American Keynesianism. For better or worse, US Keynesianism was so far ahead of where it started. I am a cafeteria Keynesian. Yo

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18 Jun 09

The Pocket Doctor: An Open Source Opportunity?

In a post back in March, I made the point that mobile phones and other mobile devices will increasingly function as medical monitoring devices, which could be a big opportunity for open source application development. The concept of the phone as doctor may still be questionable for some people, since there aren't many applications to point to (yet), but open source developers are often uniquely good at creating something where there is nothing. Here are some thoughts on how meaningful this kind of application development could really be, and who is working on the idea.

At the demonstration of the iPhone 3.0 operating system earlier this year, Apple demonstrated two new applications for the iPhone that monitor the glucose levels of the owners and monitor blood pressure. The idea is that iPhone owners who have diabetes or high blood pressure could have data on their physical status collected, and even automatically sent at regular intervals to a doctor. Think of the idea as a sort of onboard doctor.

There are already applications of this type arriving for the iPhone, but the early ones have mostly limited functionality, and don't do the actual monitoring of physical systems. There is, however, an interesting effort going on at UCLA to enable mobile phones to run medical tests. UCLA announced its advances in this area late last year.

UCLA researchers have developed a lens-free technique called LUCAS, or Lensless Ultra-wide-field Cell monitoring Array, for doing medical imaging with a cell phone. Phones with LUCAS technology use a short wavelength blue light to capture medical images. Then, the captured image is compared to a library of images to make a diagnosis. Initially, UCLA researchers see this as leading to new practices for wireless, remote medical diagnostics for diseases such as HIV and malaria in the third world.

We've written about open source applications aimed at humanitarian and global medical aid before. Recently, the Lemelson-M.I.T. program awarded $100,000 to Dr. Joel Selanikio for his developme

ostatic.com/...tor-an-open-source-opportunity - Preview

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14 Jun 09

Lorin Maazel Looks Ahead to Life After the Philharmonic - NYTimes.com

The leitmotif running through the maestro’s musings was that life had brought him to a new level of “mellow,” a kind of gimlet-eyed distance from the follies of humanity. It is a view of Falstaff more Shakespearean than Verdian.

“I remember once reading that what we are living, we may not be living at all,” he said. “We may just be characters in God’s dreams” — he paused and dropped his voice — “or nightmares. I don’t happen to believe it, but it’s a wonderful concept. If that were true, we’re all moving about in some god’s, or God’s, fantasy. That’s kind of unbelievable. Very scary to think about it.”

Maybe there was another reason for Mr. Maazel’s cosmic frame of mind. His life as a music director of great orchestras is reaching an end. He defines the notion of a magnificent maestro who jets among podiums as a guest conductor while moving between music directorships around the world. He is proud of never having had to ask for a job, he said, “which I suppose in a way is the ultimate arrogance.”

He was artistic director at the Deutsche Oper Berlin from 1965 to 1971, led the Cleveland Orchestra for 10 years until 1982, moved on to the Vienna State Opera, then the Pittsburgh Symphony, then the Bavarian Radio Symphony in Munich and finally the opera house in Valencia, Spain, and the New York Philharmonic.

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Fundamentally - The Stock Rally May Need a New Source of Fuel - NYTimes.com

Three months later, after huge gains, that consensus on stock valuations is breaking down. It’s quite possible that the rally will soon become a victim of its own swift success.

Liz Ann Sonders, chief investment strategist for the Charles Schwab brokerage firm, said that after seeing the Standard & Poor’s 500-stock index jump to above 940 from around 675 in just 14 weeks, a market that had been undervalued is now “fairly valued.” So a major tailwind that propelled stocks since March has disappeared.

“The initial move of investors back into the market was based on a value call,” she said. “You don’t have that value call anymore.”

Based on historical standards, domestic stocks are certainly no longer a bargain, according to Ben Inker, director of asset allocation at GMO, the asset manager based in Boston.

“From a pure valuation perspective, we’re in a bit of a gray zone now,” Mr. Inker said. “Stocks aren’t obviously overvalued, but we can’t say they’re cheap, either.”

Valuing equities is always hard, but it is particularly tricky amid an economic downturn of such historic proportions. There is little sense of when the fundamentals of the economy — including corporate profits — will recover.

It’s also uncertain how government stimulus efforts will ultimately affect crucial factors like inflation and interest rates, which have a direct impact on share prices.

Traditionally, the price-to-earnings ratio has been the most commonly used measure for valuing the market. Yet there are several ways to calculate P/E’s — and current economic circumstances make some methods particularly hard to apply.

For example, a classic technique takes the current price level of the S.& P. 500 and divides that by the earnings of the companies in the index over the preceding 12 months, using generally accepted accounting principles, or GAAP. Based on these figures, the S.& P. has had an average price-to-earnings ratio of 12.6 at the end of bear markets since 1938.

But this is no ordinary downturn. Because corporate losses in the fou

www.nytimes.com/...14fund.html - Preview

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JustSystems to Address Connection between XBRL and Semantic Web

NEW YORK & VANCOUVER, British Columbia--(BUSINESS WIRE)--Recent accounting scandals have heightened the need for transparency in reporting of financial data. Companies are now required to submit regular reports and disclosures conforming to accepted accounting principles like International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP). Financial regulators around the world have also mandated that these reports be tagged using the eXtensible Business Reporting Language (XBRL). As large repositories of XBRL data are now being collected, the quality of data submission is on the rise.

JustSystems, the largest independent software vendor in Japan and a worldwide leader in XML and information management technologies, today announced that Diane Mueller, vice president, XBRL development for JustSystems, and vice chair of XBRL International, Inc.; and Dave Raggett, JustSystems-sponsored W3C Fellow and member of the XBRL International Standards Board (XSB), will be speaking about XBRL at the 2009 Semantic Technology Conference being held June 14-18 at the Fairmont Hotel in San Jose, CA. The session titled, “XBRL, RDF and the Semantic Web,” will take place on Tuesday, June 16, 2009, at 4:30 p.m.

During the session, the presenters will address how XBRL brings precise semantics to financial data via reference to external accounting principles. By combining XBRL and the semantic web, there is tremendous potential for analyzing and exploring vast amounts of financial information on companies and markets worldwide.

Attendees will also learn about:

* Ramifications for both XBRL and the semantic web
* Standards development in relation to the semantic web that will complement the work of XBRL International
* Semantic case studies for financial data
* Current work to date on generating Resource Description Framework (RDF) from XBRL repositories

For more information on the 2009 Semantic Technology Conference, visit http://www.semantic-conference.com/. F

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Digital Domain - Hey, Just a Minute (or Why Google Isn’t Twitter) - NYTimes.com

Google moves faster than some of its critics think. But even if didn’t, the more important question is this: Do we really want Google’s search engine to swallow Twitter’s output as fast as it comes, without filtering, analyzing and ranking by authority?

“Real-time search begets real-time spam,” writes Danny Sullivan, the editor in chief of the Web site Search Engine Land.

Anyone who signs up to follow a particular Twitterer receives tweets instantaneously, as they are dispatched (when the system is functioning). Filtering is not an issue in such cases: The 1.77 million followers of Britney Spears presumably look forward to receiving every morsel of information broadcast from her account.

But if one wants to search Twitter for tweets about a topic — say, about Ms. Spears, but encompassing anyone’s tweet that happens to mention her — Twitter’s data fill an ocean in which it’s hard to find specific fish.

Twitter’s search page says, “See what’s happening — right now.” But Twitter’s database was not originally designed to be searched like Google’s was. Last year, in fact, Twitter bought another start-up, Summize, to provide it with search functionality.

Even so, search performance on Twitter is sluggish compared with the live tweet stream. Mr. Sullivan notes that Twitter’s search service does not consistently deliver real-time results: 20 or more minutes often pass before a given tweet appears in search results. At Google only hundredths of a second are needed to check its index when a search phrase is submitted. But to prepare, the company re-surveys the wide Web to update that index on a schedule that the company does not divulge. Some Web sites, like those of news organizations, are checked very often. Others await their turn in a rotating schedule of visits by Google’s crawler, the software that collects copies of Web pages.

Peter Norvig, director of research at Google, says that Larry Page, one of Google’s co-founders, has consistently pushed the company’s engineers to index the most active Web pages faster

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Prototype - Location, Location - It Still Pays to Be Near - NYTimes.com

Aspiring editors still move to New York, home to a huge share of the nation’s trade publishers. Many musicians still pack their bags for Nashville. Would-be entrepreneurs still flock to Silicon Valley, and for those who don’t make the move, leading venture capital firms often come to them, by setting up offices in tech centers around the world to be closer to new sources of talent.

Advances in technology “were supposed to make place unimportant, but in fact, the opposite has happened,” said Richard Florida, author of “Who’s Your City?: How the Creative Economy is Making Where to Live the Most Important Decision of Your Life.”

Today, Mr. Florida said, “a relatively small number of locations still produce the lion’s share of innovation.” These places continue to attract the most talented people from around the world, who then “combine and recombine in new and innovative ways that increase the odds that something great will emerge,” he said.

Of course, the technology that might render physical location unimportant is often itself a product of one of these innovative regions. Social networks like Facebook, founded at Harvard but now based in Silicon Valley, make it easy to share ideas online. Sites like LinkedIn, also based in the valley, aim to reproduce real-world business networking by identifying the connections among people.

These online tools can be effective for vetting ideas and for gaining introductions. The open-source movement has also shown that people everywhere can successfully work together in virtual teams to build software, translate Web sites, write Wikipedia pages and even play together in online concerts. Yet even with virtual networking for business on the rise, places like Silicon Valley and New York have not lost their allure.

It is hard to define what physical proximity provides that virtual networks lack. But some people suggest that it boils down to opportunities to build trust.

“When you’re starting a company, everybody needs to be on the same page about what is important,” said Leona

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Fresh Starts - In Computer Simulation Work, the Job Demand Is Real - NYTimes.com

Designers of computer simulations are sought in many fields to help understand complex, multifaceted phenomena that are too expensive or perilous to study in real life.

Simulations are used to gauge the impact that new rivals in the market may have on a company’s sales — or to help a manufacturer devise the cheapest, fastest means of delivering products.

To reduce costs measured in lives, not dollars, simulations examine responses in security threat situations, for instance, or how various factors affect aircraft or rocket-engine performance.

“The fundamental nature of modeling and simulation is to represent something that’s in the world out there in a way that you can manipulate and think about without risk and at low cost,” said Bill Waite, chairman of the AEgis Technologies Group, a Huntsville, Ala., company that creates simulations for various military and civilian applications.

“It almost doesn’t matter what kind of world you care about; you can use simulations,” Mr. Waite explained. “If you’re a defense agency, you want to create a simulation that will allow a missile that gets built to fly up to an enemy something-or-other and detonate. The same tools and same set of skills are used in the pharmaceutical industry to figure out how the little beads in a Bufferin are going to get from your stomach to your brain.”

He estimates that 400,000 people make a living in the United States in one aspect or another of simulation. His company employs close to 200 people, with an average salary of $85,000.

The profession draws on expertise in a number of areas and does not fit neatly into any single category. Many types of employers in private industry, the military and other branches of government hire simulation experts.

Simulation “overlaps engineering, math and computer science, but it isn’t the same as any one of those,” Mr. Waite said. “The discipline is extremely ecumenical and moves gracefully from representing lots of different things in different ways, while requiring a core set of skills.”

Those skills

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11 Jun 09

R&D 2.0: Fewer Engineers, More Anthropologists - Navi Radjou - HarvardBusiness.org

R&D 2.0: Fewer Engineers, More Anthropologists

4:56 PM Wednesday June 10, 2009

Tags:China, Global business, India

Recently GE made a big splash by announcing a $3 billion R&D investment over the next six years to develop low-cost healthcare equipment targeted at underserved populations — who primarily live in emerging markets like India, Brazil, and South Africa.

With most Western economies staying in the red through 2010, expect more Western firms to emulate GE and bet their organizations' future on emerging markets like China, India, and Brazil whose resilient economies keep growing. To enable this global expansion strategy, these multinationals are poised to dramatically beef up their R&D capabilities in developing nations.

While I am happy that Western CEOs are finally putting their money where their market mouth is by broadening their R&D footprint in emerging nations, I worry that they may not be investing in the right R&D model, and particularly not in the appropriate talent mix. Let me elaborate a bit.

In recent years, I have visited dozens of R&D labs of multinationals in India that are staffed with brilliant engineers and scientists, many of whom have PhDs in technical fields. They all represent version 1.0 of the global R&D model, still in practice, in which MNCs use low-cost but high-quality technical talent in emerging markets to crank out products and services that either get exported back to developed markets or are targeted to middle-class buyers in local markets.

But this 1.0 model will no longer be appropriate if MNCs like GE wish to cater their offerings to the 5 billion people who form the middle and the bottom of the economic pyramid in places like India, Brazil, and South Africa. Indeed, to effectively identify and address the explicit and unmet needs of the broader consumer base in emerging markets, I believe MNCs must adopt a new global innovation model. Let's call it global R&D 2.0.

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10 Jun 09

Emotional Cartography - Edited by Christian Nold

Emotional Cartography is a collection of essays from artists, designers, psychogeographers,
cultural researchers, futurologists and neuroscientists, brought together by Christian Nold, to
explore the political, social and cultural implications of visualising intimate biometric data and
emotional experiences using technology.

Essays by Raqs Media Collective, Marcel van de Drift, Dr Stephen Boyd Davis, Rob van
Kranenburg, Sophie Hope and Dr Tom Stafford

A5 Offset Litho - 96 pages - Full Colour

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06 Jun 09

Talking Business - Poking Holes in a Theory on Markets - NYTimes.com

There are no easy ways to beat the market,” Mr. Fox said when I spoke to him a few days ago. If you want to point to the single best thing the efficient market hypothesis taught us, that is the lesson: we can’t beat the market. Indeed, the vast majority of professional money managers can’t beat the market either, at least not on a regular basis.

As Mr. Fox describes it, much of the early academic work that led to the efficient market theory was aimed at simply showing that most predictive stock charts were glorified voodoo — just because a pattern had developed didn’t mean it would continue, or even that it had any real meaning. Dissertations were written showing how 20 randomly chosen stocks outperformed actively managed mutual funds. (Hence the phrase “random walk,” to connote the near impossibility of beating the market regularly.) Mr. Thaler, the Chicago behavioralist, says that evidence on this point — “the no free lunch principle,” he calls it — is clear and convincing.

In time, this insight led to the rise of passive index funds that simply matched the market instead of trying to beat it. Unless you’re Warren Buffett, an index fund is where you should put your money. Even people who don’t follow that advice know they should.

As it turns out, Mr. Grantham was an early advocate of index funds, mainly for unsophisticated investors who have no hope of beating the market. But he also believes that professionals should do better precisely because, as he puts it, “the market is full of major league inefficiencies.”

“There are incredible aberrations,” he told me over lunch not long ago. “The U.S. housing market in 2007. Japan in the 1980s. Nasdaq. In 2000, growth stocks were three times their fair value. We were quoted in The Economist in 2000 saying that the Nasdaq would drop by 75 percent. In an efficient world, you wouldn’t have that in a lifetime. If the market were truly efficient, it would mean that growth stocks had become permanently more valuable.”

As Mr. Grantham sees it, if professional investors h

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04 Jun 09

Philip C. Bolger, 81, Dies; Prolific Boat Designer - Obituary (Obit) - NYTimes.com

Mr. Bolger, something of a cult figure in the world of recreational boating, was a bit of a mad scientist, an experimenter who did not mind trying things and failing and then acknowledging his failures. Though he thought a boat could be perfect, he never thought a boat needed to be perfect to be useful or fun.

One of Mr. Bolger’s foremost interests was making boating easier and more accessible for people who were not full-time enthusiasts. For them he created the so-called instant boats, plywood craft that an amateur could build in a matter of hours. Often referred to as Bolger boxes, many were criticized as being out-and-out ugly — “They looked like floating packing crates,” Dan Segal, a boating writer, said — and Mr. Bolger acknowledged as much. But if you wanted to be able to build your own 12-foot boat and have some fun with it, the Bolger box was it.

Among Mr. Bolger’s nearly 700 designs were power boats, rowboats, fishing boats and sailboats, including many of the long, narrow, flat-bottomed sailboats known as sharpies. He designed, on the one hand, what has been called the world’s smallest dinghy, a novelty boat that actually folded up. On the other hand, he designed a replica of the H.M.S. Rose, an 18th-century British frigate, that was used in the 2003 film “Master and Commander: The Far Side of the World,” which starred Russell Crowe. The replica is now at the San Diego Maritime Museum.

Mr. Bolger was an iconoclast, a designer willing — eager, actually — to part with tradition, especially if it meant solving a practical problem. He had no loyalty to symmetry, for example; if necessary, he would move the mast, or even the centerboard, from the center of the boat. Indeed, instead of modifying existing boats, which is how boat design has largely evolved, Mr. Bolger liked to design on the basis of problem solving.

“If you said to him, ‘I want an inexpensive cruising boat for two people that I can put on a trailer,’ he’d design around the criteria,” said Mr. Segal, the former managing editor of the magaz

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Building an Innovation Factory: Innovation Inventory #9 - Scott Anthony - HarvardBusiness.org

There is a long held view that innovation is random. Because innovation is unpredictable, the best a company can do is to identify important innovations early and react appropriately. But decades of research and applied work has brought great clarity to the world of innovation. While we're still far from perfect predictability, companies that manage innovation like a process can sharply boost the returns on their investment in innovation.

One example of a company that has built an "innovation factory" is Procter & Gamble. The company follows a very structured approach to innovation. At the heart of its effort is an obsessive focus on the consumer. It has systems to encourage innovation, such as different processes for different types of ideas. It has a range of structures to support innovation, such as a $100 million corporate fund to invest in ideas that wouldn't naturally fit within an established unit. And it treats innovation as a strategic effort, with senior leaders actively involved in innovation efforts.

Not sure where to get started? Use the "Innovation Capabilities Audit" at www.SilverLiningPlaybook.com to assess your organization's innovation capabilities.

Remember: innovation is a discipline that can be mastered and managed — if you think and act in the right way.

Further Resources: The Silver Lining, Chapter 4; The Silver Lin

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03 Jun 09

LRB · John Lanchester: It’s Finished

It’s a moment of confusion and loathing that most of us have experienced. You’re in a shop. It’s time to pay. You reach for your purse or wallet and take out your last note. Something about it doesn’t feel quite right. It’s the wrong shape or the wrong colour and the design is odd too and the note just doesn’t seem right and . . . By now you’ve realised: oh shit! It’s the dreaded Scottish banknote! Tentatively, shyly – or briskly, brazenly, according to character – you proffer the note. One of three things then happens. If you’re lucky, the tradesperson takes the note without demur. Unusual, but it does sometimes happen. If you’re less lucky, he or she takes the note with all the good grace of someone accepting delivery of a four-week-dead haddock. If you’re less lucky still, he or she will flatly refuse your money. And here’s the really annoying part: he or she would be well within his or her rights, because Scottish banknotes are not legal tender. ‘Legal tender’ is defined as any financial instrument which cannot be refused in settlement of a debt. Bank of England notes are legal tender in England and Wales, and Bank of England coins are legal tender throughout the UK, but no paper currency is. The bizarre fact of the matter is that Scottish banknotes are promissory notes, with the same legal status as cheq

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  • The same principles apply to company balance sheets. They look a lot more complicated, but the underlying factors are the same. At business schools, they play a game – sorry, ‘undertake an exercise’ – in which students are given balance sheets and asked to determine what type of business the company is in. Sums are in millions of pounds. So what’s the business whose balance sheet is shown here?

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