Aurum Potestas Est

We as a race and a culture have a massive love affair with gold. It is the basis of our currency, the definitive mark of wealth and status, in some ways the bedrock of our society. We hoard it, we covet it, we hide it away except for special occasions, but we never really use it.

This is perhaps the strangest thing about gold; for something around which we have based our economy on, it is remarkably useless. To be sure, gold has many advantageous properties; it is the best thermal and electrical conductor and is pretty easy to shape, leading it to be used widely in contacts for computing and on the engine cover for the McLaren F1 supercar. But other than these, relatively minor, uses, gold is something we keep safe rather than make use of; it has none of the ubiquity nor usefulness of such metals as steel or copper. So why are we on the gold standard? Why not base our economy around iron, around copper, around praseodymium (a long shot, I will admit), something a bit more functional? What makes gold so special?

In part we can blame gold’s chemical nature; as a transition metal it is hard, tough, and a solid at room temperature, making it able to be mined, extracted, transported and used with ease and without degenerating and breaking too easily. It is also very malleable, meaning it can be shaped easily to form coins and jewellery; shaping into coins is especially important in order to standardise the weight of meta worth a particular amount. However, by far its most defining chemical feature is its reactivity; gold is very chemically stable in its pure, unionised, ‘native’ form, meaning it is unreactive, particularly with such common substances as; for this reason it is often referred to as a noble metal. This means gold is usually found native, making it easier to identify and mine, but is also means that gold products take millennia to oxidise and tarnish, if they do so at all. Therefore, gold holds its purity like no other chemical (shush, helium & co.), and this means it holds its value like nothing else. Even silver, another noble and comparatively precious metal, will blacken eventually and lose its perfection, but not gold. To an economist, gold is eternal, and this makes it the most stable and safe of all potential investments. Nothing can replace it, it is always a safe bet; a fine thing to base an economy on.

However, just as important as gold’s refusal to tarnish and protect is beauty is the simple presence of a beauty to protect. This is partly put down to the uniqueness of its colour; in the world around us there are many greens, blues, blacks, browns and whites, as well as the odd purple. However, red and yellow are (fire and a few types of fish and flower excepted) comparatively rare, and only four chemical elements that we commonly come across are red or yellow in colour; phosphorus, sulphur, copper and gold. And rusty iron but… just no. Of the others, phosphorus (red) is rather dangerous given its propensity to burst into flames, is also commonly found as a boring old white element, and is rather reactive, meaning it is not often found in its reddish form. Sulphur is also reactive, also burns and also readily forms compounds; but these compounds have the added bonus of stinking to high heaven. It is partly for this reason, and partly for the fact that it turns blood-red when molten, that brimstone (aka sulphur) is heavily associated with hell, punishment and general sinfulness in the Bible and that it would be rather an unpopular choice to base an economy on. In any case, the two non-metals do not have any of the properties that the transition metals of copper and gold do; those of being malleable, hard, having a high melting point, and being shiny and pwettiful. Gold edged out over copper partly for its unreactivity as explored above (after time copper loses its reddish beauty and takes on a, but also because of its deep, beautiful, lustrous finish. That beauty made it precious to us, made it something we desired and lusted after, and (combined with gold’s relative rarity, which could be an entire section of its own) made it valuable. This value allows relatively small amounts of gold to represent large quantities of worth and value, and justifies its use as coinage, bullion and an economic standard.

However, for me the key feature of gold’s place as our defining scale of value concerns its relative uselessness. Consider the following scenario; in the years preceding the birth of Christ, the technology, warfare and overall political situation of the day was governed by one material, bronze. It was used to make swords, armour, jewellery, the lot; until one day some smartarse figured out how to smelt iron. Iron was easier to work than bronze, allowing better stuff to be made, and with some skill it could be turned into steel. Steel was stronger as well as more malleable than bronze, and could be tempered to change its properties; over time, skilled metalsmiths even learned how to make the edge of a sword blade harder than the centre, making it better at cutting whilst the core absorbed the impact. This was all several hundred years in the future, but in the end the result was the same; bronze fell from grace and its societal value slumped. It is still around today, but it will never again enjoy its place as the metal that ruled the world.

Now, consider if that metal had, instead of bronze, been gold. Something that had been ultra-precious, the king of all metals, reduced to something that was merely valuable. It had been trumped by iron, and iron would have this connotation of being better than it; gold’s value would have dropped. In any economic system, even a primitive one, having the value of the substance around which your economy is based change in value would be catastrophic; when Mansa Musa travelled from Mali on a pilgrimage to Mecca, he stopped off in Cairo, then the home of the world’s foremost gold trade, and spent so much gold that the non-Malian world had never known about that the price of gold collapsed and it took more than a decade for the Egyptian economy to recover. If gold were to have a purpose, it could be usurped; we might find something better, we might decide we don’t need that any more, and thus gold’s value, once supported by those wishing to buy it for this purpose, would drop. Gold is used so little that this simply doesn’t happen, making it the most economically stable substance; it is valuable precisely and solely because we want it to be and, strange though it may seem, gold is always in fashion. Economically as well as chemically, gold is uniquely stable- the perfect choice around which to base a global economy.

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Art vs. Science

All intellectual human activity can be divided into one of three categories; the arts, humanities, and sciences (although these terms are not exactly fully inclusive). Art here covers everything from the painted medium to music, everything that we humans do that is intended to be creative and make our world as a whole a more beautiful place to live in. The precise definition of ‘art’ is a major bone of contention among creative types and it’s not exactly clear where the boundary lies in some cases, but here we can categorise everything intended to be artistic as an art form. Science here covers every one of the STEM disciplines; science (physics, biology, chemistry and all the rest in its vast multitude of forms and subgenres), technology, engineering (strictly speaking those two come under the same branch, but technology is too satisfying a word to leave out of any self-respecting acronym) and mathematics. Certain portions of these fields too could be argued to be entirely self-fulfilling, and others are considered by some beautiful, but since the two rarely overlap the title of art is never truly appropriate. The humanities are an altogether trickier bunch to consider; on one hand they are, collectively, a set of sciences, since they purport to study how the world we live in behaves and functions. However, this particular set of sciences are deemed separate because they deal less with fundamental principles of nature but of human systems, and human interactions with the world around them; hence the title ‘humanities’. Fields as diverse as economics and geography are all blanketed under this title, and are in some ways the most interesting of sciences as they are the most subjective and accessible; the principles of the humanities can be and usually are encountered on a daily basis, so anyone with a keen mind and an eye for noticing the right things can usually form an opinion on them. And a good thing too, otherwise I would be frequently short of blogging ideas.

Each field has its own proponents, supporters and detractors, and all are quite prepared to defend their chosen field to the hilt. The scientists point to the huge advancements in our understanding of the universe and world around us that have been made in the last century, and link these to the immense breakthroughs in healthcare, infrastructure, technology, manufacturing and general innovation and awesomeness that have so increased our quality of life (and life expectancy) in recent years. And it’s not hard to see why; such advances have permanently changed the face of our earth (both for better and worse), and there is a truly vast body of evidence supporting the idea that these innovations have provided the greatest force for making our world a better place in recent times. The artists provide the counterpoint to this by saying that living longer, healthier lives with more stuff in it is all well and good, but without art and creativity there is no advantage to this better life, for there is no way for us to enjoy it. They can point to the developments in film, television, music and design, all the ideas of scientists and engineers tuned to perfection by artists of each field, and even the development in more classical artistic mediums such as poetry or dance, as key features of the 20th century that enabled us to enjoy our lives more than ever before. The humanities have advanced too during recent history, but their effects are far more subtle; innovative strategies in economics, new historical discoveries and perspectives and new analyses of the way we interact with our world have all come, and many have made news, but their effects tend to only be felt in the spheres of influence they directly concern- nobody remembers how a new use of critical path analysis made J. Bloggs Ltd. use materials 29% more efficiently (yes, I know CPA is technically mathematics; deal with it). As such, proponents of humanities tend to be less vocal than those in other fields, although this may have something to do with the fact that the people who go into humanities have a tendency to be more… normal than the kind of introverted nerd/suicidally artistic/stereotypical-in-some-other-way characters who would go into the other two fields.

This bickering between arts & sciences as to the worthiness/beauty/parentage of the other field has lead to something of a divide between them; some commentators have spoken of the ‘two cultures’ of arts and sciences, leaving us with a sect of sciences who find it impossible to appreciate the value of art and beauty, thinking it almost irrelevant compared what their field aims to achieve (to their loss, in my opinion). I’m not entirely sure that this picture is entirely true; what may be more so, however, is the other end of the stick, those artistic figures who dominate our media who simply cannot understand science beyond GCSE level, if that. It is true that quite a lot of modern science is very, very complex in the details, but Albert Einstein was famous for saying that if a scientific principle cannot be explained to a ten-year old then it is almost certainly wrong, and I tend to agree with him. Even the theory behind the existence of the Higgs Boson, right at the cutting edge of modern physics, can be explained by an analogy of a room full of fans and celebrities. Oh look it up, I don’t want to wander off topic here.

The truth is, of course, that no field can sustain a world without the other; a world devoid of STEM would die out in a matter of months, a world devoid of humanities would be hideously inefficient and appear monumentally stupid, and a world devoid of art would be the most incomprehensibly dull place imaginable. Not only that, but all three working in harmony will invariably produce the best results, as master engineer, inventor, craftsman and creator of some of the most famous paintings of all time Leonardo da Vinci so ably demonstrated. As such, any argument between fields as to which is ‘the best’ or ‘the most worthy’ will simply never be won, and will just end up a futile task. The world is an amazing place, but the real source of that awesomeness is the diversity it contains, both in terms of nature and in terms of people. The arts and sciences are not at war, nor should they ever be; for in tandem they can achieve so much more.

Poverty Changes

£14,000 is quite a large amount of money. Enough for 70,000 Freddos, a decade’s worth of holidays, two new Nissan Pixo’s, several thousand potatoes or a gold standard racing pigeon. However, if you’re trying to live off just that amount in modern Britain, it quickly seems quite a lot smaller. Half of that could easily disappear on rent, whilst the average British family will spend a further £4,000 on food (significantly greater than the European average, for one reason or another). Then we must factor in tax, work-related expenses, various repair bills, a TV license, utility & heating bills, petrol money and other transport expenses, and it quickly becomes apparent that trying to live on this amount will require some careful budgeting. Still, not to worry too much though; it’s certainly possible to keep the body and soul of a medium sized family together on £14k a year, if not absolutely comfortably, and in any case 70% of British families have an annual income in excess of this amount. It might not be a vast amount to live on, but it should be about enough.

However, there’s a reason I quoted £14,000 specifically in the figure above, because I recently saw another statistic saying that if one’s income is above 14 grand a year, you are one of the top 4% richest people on planet Earth. Or, to put it another way, if you were on that income, and were then to select somebody totally at random from our species, then 24 times out of 25 you would be richer than them.

Now, this slightly shocking fact, as well as being a timely reminder as to the prevalence of poverty amongst fellow members of our species, to me raises an interesting question; if £14,000 is only just about enough to let one’s life operate properly in modern Britain, how on earth does the vast majority of the world manage to survive at all on significantly less than this? More than 70% of the Chinese population (in 2008, admittedly; the rate of Chinese poverty is decreasing at a staggering rate thanks to its booming economy) live on less than $5 a day, and 35 years ago more than 80% were considered to be in absolute poverty. How does this work? How does most of the rest of the world physically survive?

The obvious starting point is the one stating that much of it barely does. Despite the last few decades of massive improvement in the living standards and poverty levels in the world in general,  the World Bank estimates that some 20% of the world’s populace is living below the absolute poverty line of surviving on less than $1.50 per person per day, or £365 a year (down from around 45% in the early 1980s- Bob Geldof’s message has packed a powerful punch). This is the generally accepted marker for being less than what a person can physically keep body and soul together on, and having such a huge proportion of people living below this marker tends to drag down the global average. Poverty is something that the last quarter of the century has seen a definitive effort on the part of humanity to reduce, but it’s still a truly vast issue across the globe.

However, the main contributing factor to me behind how a seemingly meagre amount of money in the first world would be considered bountiful wealth in the third is simply down to how economics works. We in the west are currently enjoying the fruits of two centuries of free-market capitalism, which has fundamentally changed the way our civilisation functions. When we as a race first came up with the concept of civilisation, of pooling and exchanging skills and resources for the betterment of the collective, this was largely confined to the local community, or at least to the small-scale. Farmers provided for those living in the surrounding twenty miles or so, as did brewers, hunters, and all other such ‘small businessmen’, as they would be called today. The concept of a country provided security from invasion and legal support on a larger scale, but that was about it; any international trade was generally conducted between kings and noblemen, and was very much small scale.

However, since the days of the British Empire and the Industrial Revolution, business has got steadily bigger and bigger. It started out with international trade between the colonies, and the rich untapped resources the European imperial powers found there, moved on to the industrial scale manufacture of goods, and then the high-intensity sale of consumer products to the general population. Now we have vast multinational companies organising long, exhaustive chains of supply, manufacture and retail, and our society has become firmly rooted in this intense selling international economy. Without constantly selling vast quantities of stuff to one another, the western world as we know it simply would not exist.

This process causes many side effects, but one is of particular interest; everything becomes more expensive. To summarise very simply, the basic principle of capitalism involves workers putting in work and skill to increase the value of something; that something then gets sold, and the worker then gets some of the difference between cost of materials and cost of sale as a reward for their effort. For this to work, then one’s reward for putting in your effort must be enough to purchase the stuff needed to keep you alive; capitalism rests on the principle of our bodies being X% efficient at turning the food we eat into the energy we can use to work. If business is successful, then the workers of a company (here the term ‘workers’ covers everyone from factory floor to management) will gain money in the long term, enabling them to spend more money. This means that the market increases in size, and people can either sell more goods or start selling them for a higher price, so goods become worth more, so the people making those goods start getting more money, and so on.

The net result of this is that in an ‘expensive’ economy, everyone has a relatively high income and high expenditure, because all goods, taxes, land, utilities etc. cost quite a lot; but, for all practical purposes, this results in a remarkably similar situation to a ‘cheap’ economy, where the full force of western capitalism hasn’t quite taken hold yet- for, whilst the people residing there have less money, the stuff that is there costs less having not been through the corporation wringer. So, why would we find it tricky to live on less money than the top 4% of the world’s population? Blame the Industrial Revolution.

The Interesting Instrument

Music has been called the greatest thing that humans do; some are of the opinion that it, even if only in the form of songs sung around the campfire, it is the oldest example of human art. However, whilst a huge amount of music’s effect and impact can be put down to the way it is interpreted by our ears and brain (I once listened to a song comprised entirely of various elements of urban sound, each individually recorded by separate microphones and each made louder or softer in order to create a tune), to create new music and allow ourselves true creative freedom over the sounds we make requires us to make and play instruments of various kinds. And, of all the myriad of different musical instruments humankind has developed, honed and used to make prettyful noises down the years, perhaps none is as interesting to consider as the oldest and most conceptually abstract of the lot; the human voice.

To those of us not part of the musical fraternity, the idea of the voice being considered an instrument at all is a very odd one; it is used most of the time simply to communicate, and is thus perhaps unique among instruments in that its primary function is not musical. However, to consider a voice as merely an addition to a piece of music rather than being an instrumental part of it is to dismiss its importance to the sound of the piece, and as such it must be considered one by any composer or songwriter looking to produce something coherent. It is also an incredibly diverse tool at a musician’s disposal; capable of a large range of notes anyway in a competent singer, by combining the voices of different people one can produce a tonal range rivalled only by the piano, and making it the only instrument regularly used as the sole component of a musical entity (ie in a choir). Admittedly, not using it in conjunction with other instruments does rather limit what it can do without looking really stupid, but it is nonetheless a quite amazingly versatile musical tool.

The voice also has a huge advantage over every other instrument in that absolutely anyone can ‘play’ it; even people who self-confessedly ‘can’t sing’ may still find themselves mumbling their favourite tune in the shower or singing along with their iPod occasionally. Not only that, but it is the only instrument that does not require any tool in addition to the body in order to play, meaning it is carried with everyone absolutely everywhere, thus giving everybody listening to a piece of music a direct connection to it; they can sing, mumble, or even just hum along. Not only is this a wet dream from a marketer’s perspective, enabling word-of-mouth spread to increase its efficiency exponentially, but it also makes live music that other level more awesome (imagine a music festival without thousands of screaming fans belting out the lyrics) and just makes music that much more compelling and, indeed, human to listen to.

However, the main artistic reason for the fundamental musical importance of the voice has more to do with what it can convey- but to adequately explain this, I’m going to need to go off on a quite staggeringly over-optimistic detour as I try to explain, in under 500 words, the artistic point of music. Right, here we go…:

Music is, fundamentally, an art form, and thus (to a purist at least) can be said to exist for no purpose other than its own existence, and for making the world a better place for those of us lucky enough to be in it. However, art in all its forms is now an incredibly large field with literally millions of practitioners across the world, so just making something people find pretty doesn’t really cut it any more. This is why some extraordinarily gifted painters can draw something next to perfectly photo-realistic and make a couple of grand from it, whilst Damien Hirst can put a shark in some formaldehyde and sell it for a few million. What people are really interested in buying, especially when it comes to ‘modern’ art, is not the quality of brushwork or prettifulness of the final result (which are fairly common nowadays), but its meaning, its significance, what it is trying to convey; the story, theatre and uniqueness behind it all (far rarer commodities that, thanks to the simple economic law of supply and demand, are thus much more expensive).

(NB: This is not to say that I don’t think the kind of people who buy Tracy Emin pieces are rather gullible and easily led, and apparently have far more money than they do tangible grip on reality- but that’s a discussion for another time, and this is certainly how they would justify their purchases)

Thus, the real challenge to any artist worth his salt is to try and create a piece that has meaning, symbolism, and some form of emotion; and this applies to every artistic field, be it film, literature, paintings, videogames (yes, I am on that side of the argument) or, to try and wrench this post back on-topic, music. The true beauty and artistic skill of music, the key to what makes those songs that transcend mere music alone so special, lies in giving a song emotion and meaning, and in this function the voice is the perfect instrument. Other instruments can produce sweet, tortured strains capable of playing the heart strings like a violin, but virtue of being able to produce those tones in the form of language, capable of delivering an explicit message to redouble the effect of the emotional one, a song can take on another level of depth, meaning and artistry. A voice may not be the only way to make your song explicitly mean something, and quite often it’s not used in such an artistic capacity at all; but when it is used properly, it can be mighty, mighty effective.

NUMBERS

One of the most endlessly charming parts of the human experience is our capacity to see something we can’t describe and just make something up in order to do so, never mind whether it makes any sense in the long run or not. Countless examples have been demonstrated over the years, but the mother lode of such situations has to be humanity’s invention of counting.

Numbers do not, in and of themselves, exist- they are simply a construct designed by our brains to help us get around the awe-inspiring concept of the relative amounts of things. However, this hasn’t prevented this ‘neat little tool’ spiralling out of control to form the vast field that is mathematics. Once merely a diverting pastime designed to help us get more use out of our counting tools, maths (I’m British, live with the spelling) first tentatively applied itself to shapes and geometry before experimenting with trigonometry, storming onwards to algebra, turning calculus into a total mess about four nanoseconds after its discovery of something useful, before just throwing it all together into a melting point of cross-genre mayhem that eventually ended up as a field that it as close as STEM (science, technology, engineering and mathematics) gets to art, in that it has no discernible purpose other than for the sake of its own existence.

This is not to say that mathematics is not a useful field, far from it. The study of different ways of counting lead to the discovery of binary arithmetic and enabled the birth of modern computing, huge chunks of astronomy and classical scientific experiments were and are reliant on the application of geometric and trigonometric principles, mathematical modelling has allowed us to predict behaviour ranging from economics & statistics to the weather (albeit with varying degrees of accuracy) and just about every aspect of modern science and engineering is grounded in the brute logic that is core mathematics. But… well, perhaps the best way to explain where the modern science of maths has lead over the last century is to study the story of i.

One of the most basic functions we are able to perform to a number is to multiply it by something- a special case, when we multiply it by itself, is ‘squaring’ it (since a number ‘squared’ is equal to the area of a square with side lengths of that number). Naturally, there is a way of reversing this function, known as finding the square root of a number (ie square rooting the square of a number will yield the original number). However, convention dictates that a negative number squared makes a positive one, and hence there is no number squared that makes a negative and there is no such thing as the square root of a negative number, such as -1. So far, all I have done is use a very basic application of logic, something a five-year old could understand, to explain a fact about ‘real’ numbers, but maths decided that it didn’t want to not be able to square root a negative number, so had to find a way round that problem. The solution? Invent an entirely new type of number, based on the quantity i (which equals the square root of -1), with its own totally arbitrary and made up way of fitting  on a number line, and which can in no way exist in real life.

Admittedly, i has turned out to be useful. When considering electromagnetic forces, quantum physicists generally assign the electrical and magnetic components real and imaginary quantities in order to identify said different components, but its main purpose was only ever to satisfy the OCD nature of mathematicians by filling a hole in their theorems. Since then, it has just become another toy in the mathematician’s arsenal, something for them to play with, slip into inappropriate situations to try and solve abstract and largely irrelevant problems, and with which they can push the field of maths in ever more ridiculous directions.

A good example of the way mathematics has started to lose any semblance of its grip on reality concerns the most famous problem in the whole of the mathematical world- Fermat’s last theorem. Pythagoras famously used the fact that, in certain cases, a squared plus b squared equals c squared as a way of solving some basic problems of geometry, but it was never known as to whether a cubed plus b cubed could ever equal c cubed if a, b and c were whole numbers. This was also true for all other powers of a, b and c greater than 2, but in 1637 the brilliant French mathematician Pierre de Fermat claimed, in a scrawled note inside his copy of Diohantus’ Arithmetica, to have a proof for this fact ‘that is too large for this margin to contain’. This statement ensured the immortality of the puzzle, but its eventual solution (not found until 1995, leading most independent observers to conclude that Fermat must have made a mistake somewhere in his ‘marvellous proof’) took one man, Andrew Wiles, around a decade to complete. His proof involved showing that the terms involved in the theorem could be expressed in the form of an incredibly weird equation that doesn’t exist in the real world, and that all equations of this type had a counterpart equation of an equally irrelevant type. However, since the ‘Fermat equation’ was too weird to exist in the other format, it could not logically be true.

To a mathematician, this was the holy grail; not only did it finally lay to rest an ages-old riddle, but it linked two hitherto unrelated branches of algebraic mathematics by way of proving what is (now it’s been solved) known as the Taniyama-Shimura theorem. To anyone interested in the real world, this exercise made no contribution to it whatsoever- apart from satisfying a few nerds, nobody’s life was made easier by the solution, it didn’t solve any real-world problem, and it did not make the world a tangibly better place. In this respect then, it was a total waste of time.

However, despite everything I’ve just said, I’m not going to decide that all modern day mathematics is a waste of time; very few human activities ever are. Mathematics is many things; among them ridiculous, confusing, full of contradictions and potential slip-ups and, in a field whose age of winning a major prize is younger than in any other STEM field, apparently full of those likely to belittle you out of future success should you enter the world of serious academia. But, for some people, maths is just what makes the world makes sense, and at its heart that was all it was ever created to do. And if some people want their life to be all about the little symbols that make the world make sense, then well done to the world for making a place for them.

Oh, and there’s a theory doing the rounds of cosmology nowadays that reality is nothing more than a mathematical construct. Who knows in what obscure branch of reverse logarithmic integrals we’ll find answers about that one…

Why we made the bid in the first place

…and now we arrive at the slack time, that couple of weeks between the end of the Olympics and start of the Paralympics where everyone gets a chance to relax, wind down a little, and take time away from being as resolutely enthusiastic and patriotic as we have been required to for the last two weeks (or a lot longer if you factor in the Royal Wedding and Queen’s Jubilee). However, it’s also an undoubtedly good time to reflect on what have been, whatever your viewpoint, a very eventful last couple of weeks.

To my mind, and certainly to those of the Olympic organisers, these games have been a success. Whether you feel that it was all a colossal waste of money (although how anyone can think that of an event featuring the Queen parachuting out of a helicopter alongside James Bond is somewhat puzzling to me), or the single most amazing thing to grace the earth this side of its existence (in which case you could probably do with a nice lie down at the very least), its motto has been to ‘Inspire a Generation’. From a purely numerical perspective, it appears to have worked- sports clubs of all sorts up and down the land, even in niche areas such as handball, have been inundated with requests from enthusiastic youngsters after membership, and every other sentence among BBC pundits at the moment appears to include the phrase ‘the next Mo Farah/Usain Bolt/Ben Ainslie/Chris Hoy’ (delete as applicable).

However, I think that in this respect they are missing the point slightly, but to explain what I mean I’m going to have to go on a bit of a tangent. Trust me, it’ll make sense by the end.

So…, what is the point of sport? This has always been a tricky one to answer, the kind of question posed by the kind of awkward people who are likely to soon find an answer flying swiftly towards them in foot-shaped form. In fact, I have yet to hear a convincing argument as to exactly why we watch sport, apart from that it is for some unexplained reason compelling to do so. But even if we stick to the act of participation, why do we bother?

Academics and non-sportspeople have always had a whole host of reasons why not, ever since the days that they were the skinny, speccy one last to be picked in the dreaded playground football lineup (I’ve been there- not fun). Humans are naturally lazy (an evolutionary side-effect of using our brains rather than brawn to get ahead), and the idea of running around a wet, muddy field expending a lot of precious energy for no immediately obvious reason is obviously unappealing. Then we consider that the gain of sport, the extent to which it contributes to making the world a better place is, in material terms at least, apparently quite small. Humankind’s sporting endeavours use up a lot of material for equipment, burn a lot of precious calories that could be used elsewhere around the world to help the starving, and often demand truly vast expenses in terms of facilities and, in the professional world, salaries. Even this economic consideration does not take into account the loss in income presented by the using up of acres upon acres of valuable land for sports facilities and pitches. Sport also increases the danger factor of our lives, with a heavy risk of injury ranging from minor knocks to severe, debilitating disabilities (such as spinal injury), all of which only adds to the strain on health services worldwide and further increases the ‘cost’ of sport to the world.

So why do we bother with it at all? Why is it that the question governments are asking themselves is “why aren’t enough kids playing sport?” rather than ‘why are so many of them doing so’? Simple reason is that, from every analytical perspective, the benefits of sport far outweigh the costs. 10% of the NHS’ entire budget is spent on dealing with diabetes, just one of a host of health problems associated with obesity, and if just half of these cases were to disappear thanks to a healthier lifestyle it would free up around an extra £5 billion- by 2035, diabetes could be costing the country around £17 billion unless something changes. Then there are the physical benefits of sport, the stuff it enables us to do. In the modern world being able to run a kilometre and a half in four minutes might seem like a pointless skill, but when you’re being chased down the street by a potential mugger (bad example I know, but it’ll do) then you’d definitely rather be a fit, athletic runner than slow, lumbering and overweight. Sport is also one of the largest commercial industries on earth, if not on a professional level then at least in terms of manufacture and sale of equipment and such, worth billions worldwide each year and providing many thousands or even millions of jobs (although some of the manufacturing does admittedly have a dubious human rights record). The health benefits of sport go far beyond the physical & economic too, as both the endorphins released during physical activity and the benefits of a healthy lifestyle are known to increase happiness & general well-being, surely the ultimate goals of all our lives. But perhaps most valuable of all is the social side of sport. Whilst some sports (or, more specifically, some of the &%^$£*)@s involved) have a reputation for being exclusive and for demoralising hopeful youngsters, sport when done properly is a powerful force for social interaction & making friends, as well as being a great social equaliser. As old Etonian, heir his father’s baronet and Olympic 110m hurdles finalist Lawrence Clarke recently pointed out in an interview ‘On the track it doesn’t matter how rich your family is or where you’ve come from or where you went to school; all that matters is how fast you can get to the finish line’ (I’m paraphrasing, but that was the general gist). Over the years, sport has allowed mixing between people of a myriad of different genders and nationalities, allowing messages of goodwill to spread between them and changing the world’s social and political landscape immeasurably. This Olympics was, for example, the first in which Palestinian and Saudi Arabian women competed, potentially paving the way for increased gender equality in these two countries.

Clearly, when we all get behind it, sport has the power to be an immense tool for good. But notice that nowhere in that argument was any mention made of being the physical best, being on top of the world, breaking world records because, try as one might, the value of such achievement is solely that of entertainment and the odd moment of inspiration. Valuable though those two things surely are, they cannot begin to compare with the incalculable benefits of a population, a country, a world united by sport for the good of us all. So, in many respects, the success of an Olympic games should not be judged by whether it inspires a new superstar, but rather by how it encourages the guy who turns up with him at that first training session, who might never be that good a competitor… but who carries on turning up anyway. The aim of top-flight sport should not be to inspire the best. It should simply be to inspire the average.

OK, this WILL be the last money post…

First up, an apology for lateness- I know I said that this post would be up on Saturday, but had forgotten at the time that I would be spending my Saturday doing an 80km hike (18 and a half hours, if you want to know- it hurt). My feet have thankfully recovered since then, and since I really CBA to do a Six Nations Post given that there was only one game at the weekend (France-Ireland), it was a draw (17 all) and I only saw the last half hour, I thought I would give it a miss and concentrate on wrapping up my recurrent theme of money.

To quickly summarise what we’ve covered so far:
1) Money is an arbitrary human situation to give us a reference point for relative value
2) The economic system is based upon the world’s value being increased by doing work on raw materials, and people making money from it by the difference between the value the workers increase the raw materials by, and the amount they get paid [This differential is partly a necessary artificial creation, and is partly due to the price of labour being effected by the workforce’s size and attitudes itself- see point 4]
3) The process of people buying stuff in an economy almost invariably leads to inflation. A low level of inflation is indicative of this- a high level indicates an economy getting desperate, and a negative level a stagnant one
4) The process of value increase and inflation is necessary to balance out the human race’s resource consumption (for living resources we have reproduction- for finite ones, economics)
5) The fundamental rule of economics- when supply goes up, or demand goes down, the price drops.

I want to proceed from point 3, with a quick (and possibly overly simple and completely unnecessary) detour into exactly why economists and politicians want people buying more stuff. The explanation is simple really- every time something is bought, a process of value-increasing is completed. The money you pay for anything will always be greater than the total cost of supplying, making, processing and serving it (serving here meaning everything from customer support and IT to the bloke behind the counter taking your money), so when stuff is bought the company who made it makes a profit. This is the bottom line that demonstrates the process of value-increase and provides the money for more of it. Thus, people buying things means, in the long run, that the value of the economy as a whole gets increased. This is what causes economic growth, and thus growth is vital for our way of existence.

This is the classical way that businesses, and economies, make money- people buyin’ stuffs. There is a fairly well-accepted model for the stages industry goes through to make money in this way. Primary industry concerns the acquisition of raw materials (so farming, logging or mining), secondary is manufacturing, tertiary is the service industry (so selling things to you) and quaternary is basically R&D- the development of new products to push companies forward. In addition to this, modern-day business has a huge sector dedicated to helping the business function properly- this is why you have the IT, HR and customer services departments, whose aim is to ensure that other companies do not get the edge on theirs in competency.

However, in the last 400 years or so, with the advent of more organised, larger-scale and less geographically restricted business (think the East India Company or modern-day multinationals), a new form of business has risen up- that of the stock market. The idea is fairly simple- instead of companies building and saving up their profit over time in an effort to gain money and grow slowly, they persuade other people to give them money in exchange for a slice of the profits, as a way of picking up some fast cash. This as a concept at first seems rather flawed, as it basically involves gambling on the individual skill and potential success of both business and businessman, but it is often a far more preferential strategy. For smaller businesses, accruing some serious cash, or getting past the point where meeting rent is a struggle, could take several years that the owner does not want to spend tearing his hair out, so a quicker way of making cash is highly preferable (although on a smaller scale all dealings will be private, rather than in the madness of the stock market, and are more likely to be in the form of loans to ensure ownership of the business). On a larger scale, dealing with all the attempts to buy and sell bits of the company gets far too complicated to deal with privately, so larger companies who want to trade themselves on a larger scale will ‘float’ themselves on the stock market- basically this means dividing their company up into several million tiny bits and waiting for people to buy them. From hereon in, the bits of the company itself behave like any other commodity- as the price fluctuates up and down (supply and demand again), professional stockbrokers will buy and sell them in an effort to make money. As a company becomes more valuable, its shares go up in value and people buy them, hoping they will continue to go up. As the price falls, people sell them in an effort to make a profit, or at least minimise the loss. This fluctuation can happen rapidly, over the course of mere hours, which is why pictures of stock exchanges seemingly all consist of men in suits screaming into phones- the stock market changes very, very fast.

However, the stock market itself presents a huge problem to an economy- while the investment of large amounts of money in companies is undoubtedly vital to the proper functioning of an economy, this can all go rapidly wrong. The problem is that because buying shares in a company involves giving that company money, it makes the company more valuable and so its shares more valuable. Thus, people buy more shares in it because they see the price rising- you see the problem. At its worst, this leads to people investing in a company solely because other people have invested in the company, meaning that the value of the shares is artificially high based solely on investment and speculation- nothing concrete. The problem arises when everyone suddenly decides to start selling their (now very valuable) shares- this pulls the invested money, now the backbone of the company’s high share price, out of the company, and the price begins to fall. Suddenly, all the investors (sensing the price is about to drop) sell all their shares too (incidentally, they don’t actually sell them to anyone- the rules of the stock market say the company have to buy them back at the appropriate price) and suddenly, all the money is gone, with nothing real for the company to trade to make them money the old-fashioned way (or at least not enough to justify their high share price). Suddenly, the company has had all its investment taken away and is facing the prospect of having to pay back dozens of aggressive investors, and has no cash left.

This story has repeated itself several times over the years- it is known as an economic ‘bubble’. It first occurred on any significant scale in the ‘South Sea Bubble’ in 1720, which disgraced an entire British government, collapsed a company and sent the economy into chaos (although the speculation and willingness to buy everything just before the bubble burst led to pleas for investment in square cannonballs and ‘a company for carrying out an undertaking of great advantage, but nobody to know what it is’. Genuinely). The largest ever such collapsed was the American Wall Street Crash of 1929, which (among other things), condemned a large chunk of the richest nation on earth to living in slums, provoked massive rioting, bankrupted large swathes of Europe as well (and was arguably responsible for the rise of the Nazis), lead the Democrats to control both the White House and Congress and let Franklin D. Roosevelt show the American government that a little liberal socialism now and again can work wonders, advice that they have so far steadfastly ignored for the last 80 years. So yeah- bad thing.

This is the (now muchly belated) point I was trying to make whence I first started out upon this trilogy- the Stock Market is a mental place. While investment is part of the economy we now live in, the way the stock exchange handles it does, in my opinion, far more harm than good (I know I promised to try and keep my Views out of this blog, but this is just an analysis so bear with me). The stock market does not exist for the good of the companies being invested in, it exists for the good of the stockbrokers themselves- basically, professional gamblers, betting on the economy which controls the well-being of thousands with one aim and one aim only in mind: to get rich as quickly, easily and with the least hassle possible. Don’t get me wrong- I’m sure the majority of them are just as nice, normal people as the rest of us, but as for their trade… its not one I’m a fan of.

I’m not sure I support the Occupy movements, leftie though I may be, and I certainly don’t advocate the overthrow of the entire capitalist system. But, to all those who think they are just a bunch of stupid hippies, just look at the suicide rates for 1930 and ask yourself this- do you want to live in a world where the actions of so few can ruin the lives of so many?

Money, part II

OK, and so I return from the heady excitement of a weekend’s rugby to the more confuzzling realities of base level economics- here comes the second (and hopefully final) part of my description of the precise way money works in the economic system. For those who haven’t read part one, do so (post before last), otherwise this will get confusing.

I must begin with a correction and apology for the end of the last post I did on this subject- towards the end, I began referring to the actual production of money & value in an economy as inflation, rather than what actually causes it- devaluing the effort inputted by the worker so as to create a profit margin for the company boss. This is very much NOT inflation- I was, once again, getting ahead of myself.

Just to clarify this, I thought I might begin on a slight tangent and define what inflation actually is. Inflation is the process of everything in an economy getting a little bit more expensive over time. Cat food, washing powder, the cost of your boss employing you (ie your salary)- over time, this all rises slowly, at a rate of a fer percent a year. This is why, if you read old books or hear people talking about days gone by, people seemed to be able to get things incredibly cheaply in the past. Case in point- when I was at primary school, my teacher used to tell us about this shop her son (several years older than us) used to go to to buy sweets. At this shop, there was a row of sweets worth a few pennies, ranging from 10 down to 1p in price. Nowadays if I go into my local newsagents, the cheapest sweet I could buy costs 12p, and most cost quite a bit more. Why? Inflation.

The reason I was getting inflation confused with the production of value (for want of a better term), is partly because it, superficially, appears to be the same basic idea. I mean, if everything’s worth more money, the value of everything must be going up, right? Wrong- remember that money is only an arbitrary construct to give us an idea of value. Everything might be getting slowly more expensive, yes- but everyone’s salary will also be increasing at, on average, the same rate. So, for example, while your groceries bill may be getting steadily more expensive as the years go by, it will still remain roughly the same proportion of what you earn (presuming you stay in roughly the same job), so will not actually be putting any greater strain on your bank account.

So why do we have inflation, then? Why do our economists and politicians always try to ensure a low,  steady rate of inflation is always ticking over? After all, hyperinflation like what occurred in Germany in the chaos after the First World War can devastate a country, and its economy ( I heard a story once of someone at the time whose coffee went up in price by a quarter in the time it took him to drink it). Simple answer- it promotes growth, and is inherently linked to the process of ‘creating value’.

To explain: imagine a company makes cars. Because there is a differential between how much the car’s value is increased by people working on it, and how much said people get paid, the head of the company makes money. This means he is able to go out and buy things from his friend’s company, who make motorbikes. This makes his friend some money, which he spends on something else, etc. etc. until eventually more people are able to buy the first guy’s cars. This increases the demand for his cars, and thus the price he can get away with charging for them (no.1 rule of economics- when demand exceeds supply, price goes up, and vice versa, because there will always be someone willing to pay a bit more to ensure he gets the car and the other guy doesn’t). This increases his turnover. At this point he thinks “hmm, I’ve got a bit more money now, so I’ll pay my workers more. That way, people will come to work for me, not the guy next door”. So he raises his wages. To combat this, the guy in the factory next door raises his wages so all his workers don’t leave him, and all the other factories do too. Thus everyone’s wages increase, all the prices increase and hey- inflation. Notice how this process has lead to more people buying things (in reality this  is not just the bosses who do this, but reality economics is heinously complicated), and thus growth. This is, therefore, the basic cycle of economic growth.

However, the same is not so true for hyperinflation- when inflation gets out of hand. Since inflation leads to everything being worth more money but having the same value, it, over time, leads to the gentle devaluation of currency. If this process happens too quickly, and money becomes rapidly worth less and less, everyone gets terrified of the economic situation and uncertainty (how would you feel if you had no idea how expensive the milk would be when you got to the supermarket, and had to carry a wheelbarrow full of notes to pay for it), so people stop buying things and the economy ceases to show any real growth. This is why the situation is so bad in countries like Zimbabwe at the moment, where a mixture of corruption in the political system and generalised chaos everywhere else has lead to idiotic economic policies that cause inflation to soar upwards just as the real economy plummets downhill. In summary, therefore, a low, steady rate of inflation is the best thing for all concerned.

Right, that’s inflation covered, now onto… ah, right, 950 words already. Damn, I really need to get less into this. Either that or economics has got to become a lot easier to explain. Either way, I’m probably going to need another post to actually make my point on this (yes, I did intend to make a point at the start of this but have got somewhat bogged down, it seems) if not more, so think I will sign off for tonight. Saturday’s post will contain the third instalment of what I hope ends up just being a trilogy of economics, and I may actually get round to going beyond an anatomical description. Although please- don’t hold me to that.