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Peter Radford

Peter Radford

Peter Radford is publisher of The Radford Free Press, worked as an analyst for banks over fifteen years and has degrees from the London School of Economics and Harvard Business School.

Articles by Peter Radford

Weekend read – Who’s in charge: us or our technology?

26 days ago

From Peter Radford
So who is in charge?  Who controls the flow of technology?  Is it us?  Or does the technology now control us?
We live in a technology infused world.  Our current civilization sits on a foundation accumulated through the past few centuries and built of machine power.  We cannot separate ourselves from this cumulative support system without regressing to a pre-industrial way of life.  Which is something few of us either want or are equipped to deal with.  We have forgotten how to live that life, and despite the sentimentalism of our artists and poets, it is not returning without a crash forced upon us.  We will not return willingly.
The rise of this technologically mediated existence crept up on us.  At first the technology was resisted: it displaced human beings from

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Diversity in economics

August 19, 2021

From Peter Radford
In this case geographical diversity.
Dani Rodrik has brought to our attention a rather serious problem within the economics profession: it is still dominated by people living and working in the West.  As a consequence it has a decided bias towards issues that are of significant interest to the West.
This is, of course, not news to any of you not living in the West.  Nor is it news to anyone outside the profession paying attention to the product of the journals and various other outlets.  The ideas that get the most attention and the work that gets most lauded is still channeled through a very narrow lens.  The result is a considerable — massive? — underrepresentation of viewpoints and experiences that inhibit the ability of the discipline to engage broadly with the

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Techno babble

July 2, 2021

From Peter Radford
What is about technology?  It’s either a panacea for all our ills, or it’s the cause of all the aforesaid ills.  Why can’t we make up our minds?
This morning’s Financial Times is, sort of, a good demonstration of the confusion we are in.
On the one hand there’s any article about cryptocurrencies.  On the other there’s a rather less techno-centric article about bank culture.  In both cases technology looms large.  In neither is technology really mentioned in detail.  It just forms a context and provides the framing for the problem being discussed.  After all cryptocurrencies are the archetypical modern techno fad and banks were early adopters of hi-tech bookkeeping and analytical tools.  It’s all about ledgers.  Which means, in my mind at least, that it’s all about

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Structural defects

June 30, 2021

From Peter Radford
The Bank for International Settlements issued its annual report yesterday.  Perhaps the central banks are feeling a little insecure, or perhaps they are a little more sensitive to economic reality, but the BIS felt compelled to use one third of its report to tackle inequality.  Here’s the summary as given in the report:
“Key takeaways
The long-term rise in economic inequality since the 1980s is largely due to structural factors, well outside the reach of monetary policy, and is best addressed by fiscal and structural policies.
Monetary policy can most effectively contribute to a more equitable society by fulfilling its mandate, which addresses two key factors causing inequality at shorter horizons. This requires keeping inflation low and limiting the incidence and

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Back to the bank?

June 20, 2021

From Peter Radford
Following on from the revelation that our impoverished banks are thinking off penalizing their staff for the rather obvious and rational decision to re-locate, along with their big city wages, to a low cost place to live, we discover that most are now trying to force those recalcitrant workers back to the big city offices.
My head is still spinning from the absurdity of the threat to cut the wages of enterprising workers.  Just how stupid, mean-spirited, and unnecessary is this?  Those workers are being exactly the kind of person the banks want to employ.  Self-interested, rational, aggressive in pursuing their goals, and intense.  The problem, I suppose, is that all those qualities make them difficult to control.  Whatever next?
Banks love, of course, to crow about

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Power shifts, or not?

June 9, 2021

From Peter Radford
“Even someone as smart as Larry Summers.”  
Power can flummox even the best economist.  A typical explanation of events in an economy makes scant reference to the way in which power distorts the wondrous smooth motions that so obsess the discipline.  It’s almost as if human relationships don’t exist in those wonderful models they are all so proud of.  For the rest of us, power is central.  It takes little time to realize that establishing an imbalance can have all sorts of advantages.  They most notable being that it defeats or undermines the consequences of the classic impersonal marketplace.  Fair is out.  Asymmetry is in.
Not that the existence of asymmetry ought surprise anyone.  The real world is an awfully lumpy place.  Resources, information, people, and

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Where are we going?

May 26, 2021

From Peter Radford
Paul Krugman has been rightly skeptical about cryptocurrencies lately.  The extraordinary volatility in the price of Bitcoin, for example, has brought a bout of crypto mania to the fore in both the media and the marketplace.  And, as seems usual, various regulators around the world are arriving at the party about a decade after the launch of what their advocates call an alternative to the evils of fiat currencies.
I suppose it would be churlish of me to remind us all that the launch of each and every form of crypto assets is itself an act of fiat.  Instead of a government waving its wand, a small group of self-selected techie libertarians waves its collective wand, that is if a group of libertarians can be called a collective.  The former is, apparently evil, the

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The technological bright blue yonder?

April 22, 2021

From Peter Radford
One of the greatest shifts subsequent to the rise of machinery and industrialization is the social acceptance of apparently  never-ending technological change.  A change, moreover, that we are told will inevitably lead us all towards an improved, more prosperous, healthier, and happier existence.  That this future cannot be precisely determined or known to us is set aside, we simply accept the drumbeat of change and presume the rest.
Or at least that’s one view.  How else to explain the great contrast between the social reaction to new technologies back at the onset of industrialization and our contemporary reaction?  The one was tempestuous and riddled through with hostility, questions, and counter-attack by the workers affected by the introduction of the first

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Chapter thirty-one

April 20, 2021

From Peter Radford
There’s a story about Richard Feynman who is reputed to have said that anyone who claims to understand quantum physics almost certainly does not.  This coming from someone who almost certainly did.  I have much the same reaction to anyone who claims to have understood Ricardo on their first read through his work.  Then again, perhaps it’s just my own struggle: every time I grapple with Ricardo it takes me a while to understand where he’s going.  It’s a case of knowing the plot, but failing to follow the details.
In any case, here we are towards the end of the pandemic-induced economic downturn and minds are turning back to the many longer term issues we were all discussing before the shutdown curtailed conversation and re-focused our minds on shorter term issues.

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Weekend Read – Odd contradictions

April 16, 2021

From Peter Radford
Jamie Dimon, CEO of JP Morgan Chase writes his annual letter to shareholders, Wall Street quivers in anticipation at his wisdom.  This year’s is a doozy.  Dimon, it seems, wants to explain to us all that corporations play many roles in society and are not simply focused on “short term rapacious profit taking” (his words, not mine).
Let me begin with an aside: why it is that an annual communication from a CEO to the shareholders of a corporation that he/she leads is thought newsworthy in some general sense?  Why is it not treated as a minor activity all CEOs are expected to indulge in?  Why is society at large meant to listen in and, perhaps, learn a thing or two?  Personally, I blame the cult of CEO personality, which is an absurdity that, by itself, demonstrates the

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The crooked timber of history

April 2, 2021

From Peter Radford
I was lucky enough last week to meet a few friends for the first time in person since the pandemic swept all before it.  We are an eclectic group with more than a fair influence of Wall Street.  Given all that is going on, and has gone on since we last met face-to-face, I expected to be drawn into endless political discussions.  But no, we spent a majority of our time talking about how the pandemic has accelerated the current wave of technological change.  At one point someone asked whether there were lessons from the Industrial Revolution that we could apply to where we are now.  Our conversation evolved from there.
Near the end of the introduction to his history of the British experience between 1700 and 1850 Joel Mokyr gives us his abbreviated perspective on the

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Inflation: who matters?

March 30, 2021

From Peter Radford
There are times when you really don’t need to say much.  The facts make the argument for you.  At such times all that matters is that the largest number of people are aware of those facts and that at least some of them speak to the issues raised.
So too is with a small snippet of news I saw this morning.
I came to it via the New York Times.  The original report being in Business Insider.
Apparently Wall Street bonuses have risen 1,217% since 1985.  Quite what the significance of 1985 is I cannot tell, but the number itself seems to have the right feel.  Having seen a few of those years first hand I can attest to the pace of increase from an anecdotal perspective.
More importantly, if we applied the same rate of increase to the minimum wage over a similar period it

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Reform of what?

March 25, 2021

From Peter Radford
We have heard a great deal in the American media about the so-called Biden reform agenda.  The huge injection of government spending into our hibernating economy is meant not just to sustain it until we arrive at a post-pandemic moment when it will spring back to life by itself, but also to reform it.  That is to say the $1.9 trillion package is not just disaster relief, but is also politically motivated to change the economic landscape beyond the pandemic.
I think the politics of muddling the two goals, relief and reform, into one big package are clear: the Republican party would fight tooth and nail against reform and with the wafer thin majorities that the Democrats enjoy delaying it would court permanent postponement of even the most modest reform.
But the

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The social question

March 9, 2021

From Peter Radford
If you were to ask me what the greatest intellectual error of the past fifty years has been I wouldn’t hesitate.  Shareholder value.  It’s an easy response.  Yes, it reflects my own curious interest in the fundamentals of business and its intersection with economics, but it is also emblematic of so much more.
Derived as it is from the wrong turn in economics and politics in the middle of the last century it carries with it so many of the ill founded ideas that have brought us all to where we are now: bedeviled once more by the social question.
How is it that the wealthiest nation the earth has ever witnessed is so ill equipped to ensure a secure life for its citizens?  All its citizens.
The history of the concept we know as shareholder value is well rehearsed.  There

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Sameness is just wrong

February 26, 2021

From Peter Radford
There is something truly odd about any economist who lives wholly in the world of equilibrium.  Truly odd.  Just think of what they have to assume to get there:
The first step is to make sure the problem they are tackling is well defined.  Really well defined.  Without ambiguous objects lurking in dark corners.  The problem must be well lit and sanitized of any potential taint.  And it mustn’t be connected to anything that might, under some circumstance or another, become entangled with it.  Good luck with that in the real world.
Then, this being economics, all the actors within the problem have to be identical.  They have to behave rationally — where rationality is something defined by the economist to make sure the math works out nicely — and they have to “know”

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AI and democracy

February 22, 2021

From Peter Radford
Just a quick thought prompted by my reading of a talk given by Allison Stanger during the Santa Fe Institute’s 2019 Fall symposium.  First she gives us a nice quote from Hannah Arendt’s “The Human Condition” who says the question is not …
“whether we are the masters or slaves of our machines, but whether machines still serve the world and its things or if, on the contrary, they and the automatic motion of their processes have begun to rule and even destroy the world and its things.”
This quote obviously resonates with fundamental interest to those of us struggling to understand the economy as we hurtle into the digital age.
The central issue as Stanger describes it is that all the algorithms based on big data, those that increasingly drive chunks of how we deal with

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Complexity, institutions and firms

February 20, 2021

From Peter Radford
Are they associated?
We all know that one of the central problems of economics is the existence of uncertainty.  At least since Frank Knight’s work in the 1920s, uncertainty has been something of concern to economists.  Knight’s description of uncertainty as being a condition in which no probability distribution existed, or could exist, has led some of the most eminent theorists of economics to argue that theorizing is simply not possible.  Which is a rather formidable obstacle.  I assume they meant that their particular form of theorizing was not possible.
One person who rose to the challenge represented by uncertainty was Douglass North, who famously built his theory of institutional change to show how humans respond to  the endemic uncertainty they deal with on a

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Information take two

February 18, 2021

From Peter Radford
Keeping the conversation going.
Let’s start with Shannon, from his personal papers published in 1993 …
“The word ‘information’ has been given different meanings by various writers in the general field of information theory.  It is likely that at least a number of these will prove sufficiently useful in certain applications to deserve further study and permanent recognition.  It is hardly to be expected that a single concept of information would satisfactorily account for the numerous possible applications of this general field.”
So Shannon is fine with an eclectic vision of information, and expects a variety of definitions to emerge as useful.  This seems extremely wise.  Especially given his own somewhat narrow version.
Weaver, in 1949, expanded on  this ecumenical

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The information conundrum

February 16, 2021

From Peter Radford
Kolmogorov, I think, hit the nail on the head when he said:
“At each given moment there is only a fine layer between the ‘trivial’ and the impossible.  Mathematical discoveries are made in this layer.”
He might just as well have said that life itself is discovered in this layer.  But let’s not get ahead of ourselves.
A few days ago I tried to point our way towards an acceptance of a certain humility.  I used a couple of quotes, one from Durer and one from Soros, to provide us with insights form well-regarded figures separated by a good long period.  Obviously the need to recognize our inherent fallibility has a long history.  The problem is that we keep forgetting and frequently end up acting as if we had some form of ultimate knowledge.  I used the word ‘utopia’ to

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What do Durer and Soros have in common?

February 13, 2021

From Peter Radford
I know, this is one of those more philosophical moments.  In my case prompted by my continued meditation on the deleterious effects of a belief in utopias.  Such beliefs seem always to end up with authoritarian consequences.  People can all too easily get swept up by the illusion of having solved life’s great mysteries.  It’s been going on for ages.  It appears to be a commonly held human attribute.  We need, apparently, to think we understand things that are, beneath the surface, remote, opaque, and inscrutable.  It’s the way we are.
The issue keeps popping up.  In the humdrum world of economics and economic history utopian ideas bedevil analysis.  Whereas we began with the humanistic description of the workings of an economy, for instance as articulated by Adam

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Forecasting errors

February 10, 2021

From Peter Radford
I suppose forecasting errors is one of those phrases that needs a bit of explanation.  Are we forecasting errors?  Or are we discussing the errors in forecasting?  I think it’s both.
Take the current debate going on about Biden’s $1.9 trillion economic relief package.
A few notable economists, including both Larry Summers and Oliver Blanchard, are arguing that Biden is proposing on spending too much.  This criticism is not based on any analysis of the level of unemployment, the ability to pay rents, the likelihood of imminent re-employment, or any other issue of urgency.  It is based on the usual orthodoxy economists trot out year after year.  The argument is this: the economy was not in distress prior to the pandemic, meaning there were none of those infamous

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January 6th, one month on

February 8, 2021

From Peter Radford
It’s been a month.  It seems a great deal longer.
Trump has slunk off the stage and the first signs of what the post-Trump political arena might look like are emerging.  It isn’t hopeful.  Not if you’re looking for peaceful politics.
As we become more able to adjust our focus and ask “what just happened?” with a better degree of clarity, it becomes more obvious, to me at least, that the entire movement that has come to be known as Trumpism was not actually Trump’s at all.  It pre-existed him.  He simply packaged and branded it as if it were one of those buildings that bears his name but which he does not own.  Trump was and remains a veneer.  He is always willing to push to the head of a crowd and claim it was his idea to gather.  He is always willing to present

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Epistemic revolution? The search for algorithmic justice

February 3, 2021

From Peter Radford
This is a long speculation, for which I apologize, provoked by the following:
“In an information civilization, societies are defined by questions of knowledge — how it is distributed, the authority that governs its distribution and the power that protects that authority. Who knows? Who decides who knows? Who decides who decides who knows? Surveillance capitalists now hold the answers to each question, though we never elected them to govern. This is the essence of the epistemic coup.”  — Shoshanna Zuboff, New York Times,  January 2021 
Coups are all the rage right now.  Is Zuboff right that we are the victims of an “epistemic coup”?  What do we even mean by an epistemic coup?
It gets complicated.
For years now we have been bombarded by articles, many of which emanate

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Game stop 2: What are stock markets for?

January 28, 2021

From Peter Radford
The sudden attention being given to the gyrations of Game Stop stock prices has caused all sorts of hand wringing within the hallowed walls of high finance.  In typical fashion the people who like to carry on their trading and associated activities beyond the public gaze are all a twitter because a bunch of apparently crazy outsiders are not adhering to the sedate rules of the game.  This produces truly odd results.  Normally virulently anti-government voices are suddenly calling for SEC investigations and even regulation to prevent outsiders spoiling things.  Some are swooning over the event as a demonstration of the awful greed and selfishness that has overtaken even average Americans — rather than just Wall Street denizens.
How dare average people become as greedy

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A reminder from Berlin

January 22, 2021

From Peter Radford
Sorting out my old bookshelves I came across an old Isaiah Berlin Essay “The Pursuit of the Ideal”.  At the risk of being boring here is a very long extract, he begins the essay this way:
“There are, in my view, two factors that, above all others, have shaped human history in this century.  One is the development of the natural sciences and technology, certainly the greatest success story of our time — to this, great and mounting attention has been paid from all quarters.  The other, without doubt, consists in the great ideological storms that have altered the lives of virtually all mankind: the Russian Revolution and its aftermath — totalitarian tyrannies of both right and left and the explosions of nationalism, racism, and, in places, of religious bigotry, which,

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Memo to self

January 18, 2021

From Peter Radford
This is short:
I have been accused recently of mis-using the word “coup” when I discuss the events of January 6th.  Worse, I have been called ignorant.
Here is what the dictionary says:
Coup = a sudden, violent, and illegal seizure of power from a government.
Perhaps my critics would feel safer with “insurrection” which seems to be the preferred word in the media.
Here is what the dictionary says:
Insurrection = a violent uprising against an authority or government.
The subtlety of the difference between the two words seems to revolve around the first being seizure of power, whilst the second is an uprising against those in power.  Beyond that they are both a reference to violence and an attempt to unseat, or change government.  Presumably a failed coup implies that

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Corporate reckoning

January 15, 2021

From Peter Radford
The aftermath of a coup attempt is one of those moments when a nation gets a really serious insight into its values.  Do, for instance, its politicians rally around some higher set of principles, or do they slide quickly back into the day-to-day argy-bargy of political positioning and infighting?
Ours are perilously close to the latter.  And this after their own place of work was invaded and trashed while they hid and cowered in sundry hiding places.  Profiles in courage are few and far between right now within our politics class.
The reason is obvious: one of major political parties is complicit in the ruin of democracy and in the rise of a far right version of populism based on white supremacy, nativism, and grievances of various sorts.  Perhaps this was the

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Under pressure

January 13, 2021

– the vital difference between a “firm” and a “corporation”
from Peter Radford
I am learning that it takes a while to come to terms with the trauma of an attempted coup.
Various people are reacting differently depending on their state of mind prior to the attempt.  What catches my eye, given my own perspective on the role of business in society, is the pressure emerging on our large corporations.  Having spent the past few years busily ignoring the moral corruption and ineptitude of the Trump regime business leaders are suddenly trying to appear pious.  Many of them are suspending their support for political groups and individuals.  Others are suspending social media platforms that were used to organize insurrection and ferment violence.
This is all too little too late.

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JANUARY 6, 2021

January 11, 2021

From Peter Radford
The crisis lingers on.
One would think, although we are now in an odd world, that abetting, instigating, and applauding an attack on Congress would result in more than a gentle rebuke.  Apparently not.  The wheels of American politics move extremely slowly and the perpetrator of the crime still is hunkered down in the White House bloviating, no doubt, about how he was robbed of his victory in November’s election.  Perhaps there will be enough spine amongst those who were attacked to exact appropriate revenge.  Perhaps not.
For, already, the political calculation that infects everything done in Washington is slowing and possibly preventing prosecution.  The Republican Party, now terrified of its full complicity and concerned about whatever is left of its public image,

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The firm, yet again

December 9, 2020

From Peter Radford
There is a new eBook published by the Stigler Center which is an offshoot of the Booth Business School at the University of Chicago.  The publication contains a number of short essays either attacking or defending the infamous pronouncements by Milton Friedman on the role of the corporation.  This year, you may recall, is the 50th anniversary of the newspaper article in which Friedman described his view that the purpose of the corporation is too maximize shareholder value.  The subsequent decades have seen that view permeate the business and  legal systems such that to argue against it is seen as oddball in the extreme.
Steve Kaplan leads the defense of Friedman with the opening essay and slides almost immediately into a humdrum general defense of capitalism rather

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