Cultural cross-over, a hybrid or something else?

According to my freshly ironed Times, one “attraction” at the Chelsea Flower Show this year is a “DMZ Forbidden Garden” where “a wooden watchtower glowers over a patch of soil littered with landmines and cartridge cases”. This “pays homage to the demilitarised zone between North and South Korea”.  

I suppose it is an inevitable consequence of the courageous decision by the RHS Board to put the direction of their show in the hands of the Turner Prize selection committee. 

At least we have been spared a video installation of Amazonian deforestation or a spontaneous interactive event on the theme of Genetically Modified lawnmowers.

Germany to exit eurozone?

Germany stands to gain the most from the retention of the euro, but refuses to support it. 

Rather than visiting ruin on Greece, and then Spain, Portugal and beyond, perhaps the other euro economies should demand that Germany alone reverts to its previous currency, which could then find its appropriate value without the encumbrance of the spendthrifts.

Civil service tax loopholes: Thousands on special contracts

More than 2,000 public-sector workers could be avoiding the full rate of income tax through special contracts, Government research has found.

Quite apart from the headline’s defective capitalisation, which would certainly not impress Lynne Truss, nor your average mandarin, the statement is simply tosh.

Civil Servants are employed by the Queen on contracts which guarantee generous holiday, maternity and sick pay provisions, a defined benefit pension and a measure of job security.

The vast majority of the 2,000 mentioned will be individuals working on time-limited or interim contracts that offer none of these benefits.

Moreover they will be paying their own NI and income tax.

They may be working in public sector roles but they are not Civil Servants. 

Geddit?

5,300-year-old Iceman Oetzi may have been lactose-intolerant

We apologise for a posting that may seem unrelated to current business and financial concerns (except for students of the social construction of health conditions and longevity-watchers), but yesterday's story from Agence France Presse does in our view demand wider circulation:

'The mummy of an iceman named Oetzi, discovered on 1991 in the Italian Schnal Valley glacier, has been displayed at the Archeological Museum of Bolzano since 2011.

Oetzi, the 5,300-year-old "Iceman" mummy of the Alps, lived for some time after being shot in the back by an arrow, scientists said on Tuesday after using forensic technology to analyse his preserved blood.

Contrary to a leading theory, Oetzi did not expire immediately from his wounds, they reported in the Journal of the Royal Society Interface, published by Britain's academy of sciences.

Scientists led by Albert Zink of the Ludwig Maximilian University in Munich, southern Germany used nano-scale methods to probe the oldest blood known to modern science, preserved by thousands of years of alpine chill.

Using a so-called atomic force microscope able to resolve images just a few nanometers (billionths of a metre) across, they identified corpuscles with the classic doughnut shape of healthy blood cells.

"To be absolutely sure that we were not dealing with pollen, bacteria or even a negative imprint of a blood cell, but indeed with actual blood cells, we used a second analytical method," Zink said.

They deployed Raman spectroscopy, in which refracted light from a laser beam gives chemical clues about a sample.

This showed the presence of haemoglobin and fibrin, which are key components in blood clotting, at the arrow wound on Oetzi's back.

"Because fibrin is present in fresh wounds and then degrades, the theory that Oetzi died straight after he had been injured by the arrow, as had once been mooted, and not some days after, can no longer be upheld," Zink said.

Oetzi's remains were discovered by two German hikers in September 1991 in the Oetztal Alps in South Tyrol, northern Italy, 3,210 metres (10,500 feet) above sea level.

Scientists have used high-tech, non-invasive diagnostics and genomic sequencing to penetrate his mysterious past.

These efforts have determined Oetzi died around the age of 45, was about 1.60 metres (five foot, three inches) tall and weighed 50 kilos (110 pounds).

He suffered a violent death, with an arrow severing a major blood vessel between the rib cage and the left scapula, as well as a laceration on the hand.

According to DNA analysis presented in February, Oetzi had brown eyes and hair and was allergic to milk products.

This supports the theory that despite the increasing spread of agriculture and dairying at the time, lactose intolerance was still common.

According to a theory aired in 2010 by an Italian archaeologist, based on seasonal pollen found in his stomach contents and at the burial site, Oetzi did not die at the spot where his remains were found. Instead, he was only ceremonially interred there.'

Synchronicity

Today witnesses the resignations of both the Archbishop of Canterbury and the Chief Executive of the FSA.

God and Mammon at a stroke?

Tories urge Osborne to spend £25bn Royal Mail pension windfall

To smooth the way to Royal Mail’s privatisation, the £25bn pension fund is being transferred onto the Government’s books as an asset.

The ongoing pension obligation will be met from current revenue, ie taxation, and will not appear on the Government’s books as a liability.

How Robert Maxwell would have laughed.

Scottish credibility

What is about the Scots these days?

Twenty years ago there was a popular music hall stereotype of Presbyterian frugality and even stinginess.

Today’s Scotsman spends uncontrollably, like a WAG on amphetamines, over-extending and ruining the Bank of Scotland, then the Royal Bank and now Rangers FC.

Should they achieve independence what will Standard & Poor or Moody’s make of their credit rating?

Bonus row not anti-business?

It’s not every day that your GOM finds himself in a measure of agreement with Mr Miliband, but this time he surely does have a point.

Let’s put the argument for bonuses first.

Some people, under some circumstances, are motivated by them. Not everyone and not all the time, but they can make a difference to business outcomes.

Bonus schemes are not confined to fat cats. Traditionally salesmen, factory workers on piecework and a host of people on modest earnings have a component of their take home pay based on “results”.

Bonus payments based on bottom-line business results represent an efficient way of controlling employment costs. When profits rise, pay rises. When profits fall, pay falls. It’s simple and good for business. (Note that this argument does not apply in the public sector.)

On the other hand.....

There is no established psychological relationship between output and the input, between the quantum earned and the effort put in. It’s not clear that people on sky-high packages work any harder or smarter than their predecessors on more modest incentives

Bonus schemes which are based on complex packages of results often do not make a lot of sense to the layman, the investor or the accountant. The increase in the level of bonus earnings of investment bankers over the last 20 years is a huge multiple of the increase in profitability or share price. One winner but lots of losers.

Some incentive schemes encourage behaviour that can be very damaging in the long term. Andy Haldane of the Bank of England has recently put forward a compelling argument that incentives based on RoE (Return on Equity) rather than the more inclusive RoA (Return of Assets) are in part responsible for the banking crisis.

The pay aspirations of the fatter cats are increasingly based not on absolute performance, but on perceptions of relative worth (by comparison with peers). Benefit consultancies use comparative (top quartile) indicators as the basis of their recommendations. This is logically inflationary.

So some bonus schemes, some of the time, can be “bad for business” if by that we mean bad in the long term for the investor, the middle-ranking employee and even the customer.

But all this is too rational. Much of the current furore is not about the principle at stake but the quantum. The gap between the highest earners and the median has gone skywards, and no-one has found a convincing argument to justify what looks like piracy. And as long as it looks like piracy, walks like piracy and quacks like piracy, it will be judged to be piracy and public opinion will put other values ahead of what may or may not be good for business.

After all it was ultimately public opinion that led to the abolition of slavery, and there were plenty of people around then who argued that this would be ruinous for business.