Thinking About It Only Makes It Worse

by David Mitchell

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  When the chairman of the Nationwide building society (whose name, like Geoffrey Howe’s, is Geoffrey Howe) tried to justify its executives’ pay to a restive AGM, he said several strange things. Here’s one: “What would the Financial Services Authority say if our chief executive was paid just £100,000? It would shut us down. Nationwide would cease to exist.”

  Is that true? Is that the system? Does the Financial Services Authority reckon that anyone who gets paid £100k or less must be incompetent? That’s a very cynical view to take of members of the House of Commons. But, if it is true, it certainly justifies Nationwide in keeping its chief executive Graham Beale’s salary above that threshold. A full £2.16m above it, to be precise. That should make sure the FSA takes Nationwide seriously.

  But the main thrust of Howe’s argument was marginally less wacky: “This is a society problem, this isn’t a Nationwide problem.” Although, if it’s a problem with society, it may well be nationwide. But not exclusive to Nationwide. He continued: “There is a huge mismatch between what pop stars earn, footballers earn, business people earn, bankers earn and what the man on the street earns. A lot of people just find it hard to understand why there is such a big differential between what the man in the street earns and what senior business people earn.”

  So the problem, according to Howe, is a lack of understanding. Well, the first thing to clear up is the distinction between the “man on the street” and the “man in the street”. It’s quite important. I don’t think many people are complaining that bankers earn more than the homeless. This “society problem” can only be exacerbated by the fact that, from the plutocrat banker’s vantage point, it seems, the income of someone begging on the street and that of the average passer-by are indistinguishably negligible. But I don’t think that’s the lack of understanding Geoffrey Howe was referring to.

  It was deft of him to liken Nationwide’s highly paid executives to pop stars and footballers. “Let’s spread the hate,” he was probably thinking. And, of course, the huge earnings of some professional sportsmen and musicians wind a lot of people up, particularly now times are hard. But being cross because some people earn more than you is different from failing to understand why. I reckon almost everyone gets why pop stars and footballers are often rich: millions of people are willing to pay significant amounts of money to watch them do their thing. It’s very easy to see where that money comes from and, if you don’t like Stoke City or Lady Gaga, you don’t have to contribute yourself.

  But, when it comes to financial services executives, I agree with Howe that this lack of understanding exists – but I don’t agree that it’s a problem. I think it’s a good thing. I think it’s the product of the wisdom of crowds. People don’t understand why bank and building society executives are so highly paid simply because there is no adequate explanation. It’s an anomaly which, practically speaking, could only be corrected by the very people who benefit from it. That is a key failing with the current financial system.

  The Nationwide AGM was up in arms over these remuneration packages, yet only 9% of the society’s members failed to approve them. Either most Nationwide investors are secretly delighted to give millions of pounds to Graham Beale or that’s not a functioning democracy. It’s probably because most of the voters are failing to scrutinise how their money is spent. Or they don’t much care. Nationwide made £475m profit last year. In that context, the £7.9m being handed out to five senior executives doesn’t seem to matter so much.

  Howe argues the standard case that Nationwide must pay the going rate for high flyers or it will cease to fly high. That makes a certain amount of sense but fails to explain how this going rate was arrived at, or to allay people’s suspicions that it’s become artificially inflated. What is it that Graham Beale does that someone else couldn’t do – someone who’d be willing to take a pittance like £100k? Despite the evidence of parliament and the early series of The Apprentice, it can’t only be feckless attention-seekers who are willing to work for that kind of money.

  When Beale moves on – probably to an even more highly paid job at a bank – his successor will be similarly highly paid. Is that because he (or she) (probably he) will be one of a tiny number of people who also have the “Beale touch”, that magical ability to make an organisation hugely profitable? Or will they just be highly paid because people in jobs like that always are, and they’re not going to let that situation end if they can help it? On some level, is massively overpaying executives a necessary part of engendering confidence in the whole house of cards that we now know the financial sector to be? The idea that a cut-price chief executive might do just as well is too insulting to the industry’s self-image to be permitted.

  If that’s what’s going on, then a sort of reverse market effect is in operation, where, like with designer labels, the exclusivity of costliness makes an executive seem desirable, capable, even brilliant. What a disaster for shareholders and building society members, as well as customers and social justice, if that’s the case; if all of our financial institutions are being led in nude mediocrity by little emperors declaring: “If you want clothes like these, you’ve got to pay! Financial crisis, you say? Just think how much worse things would have been, left to the kind of chump who will work for six figures.”

  It’s a striking contrast to how MPs talk about their pay. Chastened by the expenses scandal, they jostle to express their revulsion at any talk of a raise. They don’t tend to say: “If you don’t pay top dollar, you won’t get the best people.” Perhaps that’s because it’s too obvious that we don’t and so we haven’t.

  The Independent Parliamentary Standards Authority’s proposed House of Commons pay rise would apparently cost Britain, a $2.3trn economy, £4.6m a year – and the prime minister (among many others) tells us it’s too much. The Nationwide building society is paying nearly twice that to five managers, and its chairman is convinced that it’s barely enough. My hunch is that they’re both wrong.

  6

  What You Don’t Know Can’t Hurt You

  If you genuinely don’t reckon you know how our schools and education system could be improved, you’re a very unusual person. So unusual that your views on education might, ironically, be of great interest. But most people are full of ideas – and I’m no exception. It was only when I started to compile this book that I realised how often I’ve come out with something I reckon about education, based on a half-remembered experience of my own or, more often, irritation at Michael Gove (God rest his soul).

  This bit contains a justification of the unfairness of exams, a celebration of aimless university research, an advocacy of teaching the fairytale version of history to give people something to talk about at parties, and a list of fun activities for pupils too obese to stand up under their own steam. But don’t worry, I’m not applying to set up my own free school, so none of these ideas will ever be put into practice.

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  The higher education watchdog has revealed that, in 2008, it received 900 complaints from students about their universities. That’s up 23% on 2007, and Diana Warwick, chief executive of Universities UK, described it as “900 complaints too many”. That’s taking student satisfaction pretty seriously. Quite what utopias of academic excellence and alcohol our universities would have to become to elicit zero complaints is frightening to imagine.

  Now that students are paying customers, maybe they expect Club 18–30 levels of drink and sex, plus extra-soft, double-quilted PhDs to wipe their learned arses on. But, even if you provide that, you’re still going to get some whingeing. I remember from my college days that not all 18- to 22-year-olds are gutsy, roll-up-their-sleeves-and-get-on-with-it troupers with overdeveloped senses of gratitude and a horror of appearing self-involved. Among Britain’s 1.9 million students, I suppose there must be one or two like that, but my guess would be one rather than two. And that he’s a virgin.

  The other way to hit Warwick’s target of zero quibbles is through tyranny. Keep
ing our student population in a state of terrified subjection may be a more cost-effective way of silencing their complaints than pandering to their needs. People in fear for their lives seldom write plaintive letters to their oppressors. Had there been a Pravda website in the days of Stalin, I don’t suppose many snippy comments would have been posted at the bottom of the editorial pieces. God bless democracy.

  But, hovering halfway between unimaginable luxury and petrified squalor, our universities are bound to get a bit of carping from their charges and for their charges. What’s worrying is that most of the complaints were about exam and coursework marks, and many of these were from students seeking to improve their results by citing mitigating circumstances. There’s a lot of this about. It has emerged that, in 2008, the number of GCSE and A-level students who get “marked up” rose by 10% to 330,000. There’s guidance on how these mark-ups are to be worked out: up to 5% for the death of a family member and 1% for a pet; 2% for suffering hay fever but just 1% for a headache.

  With the right combination of misfortunes, you could have a bright academic future. If you’re an asthmatic, diabetic, hay fever sufferer who’s lost a couple of grandparents and whose beloved family milk herd has been culled because of a foot and mouth outbreak, you’re probably on 200% before you walk into the exam hall. The days of “the dog ate my homework” are behind us; now it’s: “The dog ate my brother and consequently died. It’s given me a headache.”

  This system is a kindly attempt to make things fair. But even if it isn’t being abused, it risks rendering exams pointless. Passing an exam is supposed to represent something absolute: a certain standard being attained. “Regardless of a person’s advantages or disadvantages in life,” the exam certificate is saying, “they have achieved this level of knowledge or skill.”

  This then means something to potential employers, who may not care about the bearer’s allergies or short-lived relatives. It’s academic legal tender. Sterling would soon devalue if half the fivers in circulation turned out to be £4.63s that got bumped up because of cat death.

  Any attempt to tinker with marks to make allowances for misfortune undermines exams. It means you’ll never know what standard a candidate really attained. What if a lazy student lucks out with the death of a hated parent? Suddenly their ignorance is misinterpreted as grief.

  And why is the misfortune of losing a pet seen as worthy of more consolation than the much greater one of being stupid? If it’s ultimate loving fairness we’re using the exams for, let’s not give marks at all but join together in a heartwarming affirmation of the sanctity of human life. The country may be a happier place if we did that, although it’d be sod all use to prospective employers.

  This marking up is seldom quite as arbitrary as I’m implying. It’s done according to the grades teachers expected their pupils to get. But aside from the fact that league tables give schools a huge incentive to affect the highest possible expectations, if teachers can work out so accurately the grades examinees deserve, what’s the point of the exams in the first place? It’s probably that we think it benefits students to have to get their shit together, in a pressurised situation, in order to prove their aptitudes. That’s what happens in life: people have to deal with stress, cope in weird circumstances, step up to the plate.

  Universities and employers should make allowances for bright pupils with underprivileged backgrounds by being flexible about the grades they require – spotting unrealised potential is vital. But you don’t do that by pretending it’s been realised when it hasn’t. That’s just insulting to those who attained high grades properly and to the skills which that required.

  It doesn’t happen with driving tests, where the safety of other road users is at issue, and I hope to God it doesn’t with medical degrees. It’s no good saying “Physician, heal thyself” to an ailing doctor who only qualified after being marked up because he was ill. So if we think exams matter at all, the fair thing to the system, to the country, to civilisation and, ultimately, to the candidate is to give people a chance to retake, not send them out into the world bearing an accolade they haven’t earned.

  A qualification that means something concrete is the only help available to young people emerging into the chaotic unfairness of the job market. We do them no favours by undermining it in trying to counteract the incomparably lesser injustices of the examination hall.

  After all, in the real world, luck counts. Gordon Brown became prime minister at an unlucky time. However inept the pressure made him, there’s no doubt that the credit crunch and the MPs’ expenses scandal are crises that could have hit earlier or later. But, in a general election, no matter how unfortunate your circumstances, you don’t get marked up by a single vote.

  *

  A recent newspaper headline chilled me to the bone: “New panel to weed out ‘pointless’ studies,” it read. Pointless studies are meat and drink to columnists like me. Not the fillet steak and vintage claret of Gordon Brown audibly farting in the Commons or Jeremy Clarkson being attacked by a miniature poodle, but a Peperami and Fanta snack that keeps the wolf from the door in the leaner times. Without a constant supply of scientific research claiming that chocolate makes you romantic, white wine enhances sarcasm or automatic transmission makes your cock go floppy, I’d have to take a lot more weeks off.

  I know that there are always world events to comment on but, if you feel on shaky ground discussing North Korea, that jokes about helicopter shortages in Afghanistan might be taken amiss or that any mention of Baby P by a comedian will cause hysteria, then a lot of news is ruled out.

  Strange though it may sound, politicians and celebrities don’t always make dicks of themselves. As the old Lib Dem press office saying goes: “Some weeks Charles Kennedy keeps his shit together.” Not all opposition statements are laughably craven, the public reaction to the weather is not always humorously irrational and not every new government policy contains a glaring logical inconsistency.

  Luckily for me, this one does. The article under the terrifying headline was about the proposed new system for allocating government money for academic research, the Research Excellence Framework. It wants to weed out pointless studies by favouring research that looks like it’s going to be of economic or social use.

  Hooray! That won’t harm the comedy studies at all! When Professor Sponsored Link of the University of Twix announces that anti-wrinkle cream gives women the confidence to have cleverer children, he’s not being funded by the government but by a cosmetics manufacturer trying to grab a headline.

  All the “flowers/chocolate/ice cream bringing happiness/better orgasms/an enhanced sense of perspective” studies are entirely self-financing. They may add little to the sum of human knowledge, the fact that academics are reduced to them may show how eroded our respect for learning has become, but they’re not a drain on the taxpayer – they all get paid for out of various multinationals’ marketing budgets.

  So what sort of pointless study is this new system going to weed out? Why, all the ones that don’t have a solid social or economic goal, of course. The government isn’t going to pay for clever people just to sit in universities indulging their curiosity. No, they should be allocated something useful to discover and then research as hard as they can in that direction. Nothing good ever got invented by accident, apart from some silly fun stuff like the Slinky, Post-it notes, penicillin, warfarin and X-rays.

  That breakthroughs often come by accident rather than design, from a desire for knowledge rather than a gap in the market, is so well established it’s a cliché – it’s one of the things that every schoolboy used to know. Why don’t the government’s education experts? Is it linked to the fact that, under their tutelage, every schoolboy barely knows how to count to the number of A*s he’s just been awarded?

  The trouble is that, for a moment, it sounds perfectly sensible to demand that researchers justify their means in terms of their projected ends, but so, for a moment, does Noddy’s idea of building the roof of a ho
use first so that it keeps the rain off while you build the walls.

  Academic research with a demonstrable economic goal is not the sort that most needs government help. If you’d said 20 years ago “I’d like to develop a drug that cured erectile dysfunction in men”, I imagine you’d have got plenty of private-sector takers. As it happens, Viagra was also discovered by accident, when someone was trying to develop heart medicine, but you get the idea.

  Research which will obviously make money if it comes off will always find private funding and so should not be prioritised for public money. In fact, it’s the very place that public money should never go – it’d be like spending the Arts Council budget on profit-making pantos instead of opera, or pouring the licence fee into QVC rather than BBC Four. Public money should be made available for research that would otherwise not happen. Research of economic value is outside this category.

  To be fair, the greatest factor which will determine whether research deserves funding will, thankfully, even under this new system, still be peer review. But this greater emphasis on making academics justify their work in terms that results-obsessed government bodies will understand is worrying.

  And that’s where the talk of research of social value comes in. It’s a sop to the arts side. They’re trying to find a way to quantify the usefulness of a greater insight into paintings, books or historical events because they know they’re of little economic value, other than to get the odd documentary commissioned, but have a vague memory of someone saying at a dinner that they mattered. They’re trying to squeeze them into a plus column in their new spreadsheet of learning. Well, if that’s their only way of according knowledge worth, then they’re the wrong people to be making the decisions.