September 3, 2025 • 46 mins
On the final panel at this year's Fringe Festival in Edinburgh, host Merryn Somerset Webb speaks with Richard Wilson, chief executive of one of the UK’s largest investment platforms, Interactive Investor, Anna MacDonald, investment manager at Aubrey Capital, and journalist and author Alex Massie. The episode is taped in front of an audience at Adam Smith’s final remaining home, Panmure House.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Please welcome me in Somerset Web.
Speaker 1 (00:21):
Hello, Maren Talks Money Listeners, It's Meren Sumset Web.
Speaker 3 (00:24):
Before we get back to our regular.
Speaker 1 (00:26):
Programming in early September, we are bringing you something very special,
recordings of the conversations I had at Pamia House for
the Edinburgh Fringe Festival. Now, for those of you who
don't know, the Fringe is a three week arts and
culture festival that began in nineteen forty seven and takes
place in Edinburgh in Scotland every August. For the past
few years I have been hosting conversations about markets, economics
(00:47):
and investing from one of the most special locations in Edinburgh.
As part of this festival, I do it from Panma House,
which is the last home of Adam Smith, philosopher and
father of modern economics, is where he completed the asked
editions of his best sellers, The Theory of Moral Sentiments
and The Wealth of Nations. This year we did a
three day run was the end of August, and we
(01:08):
are bringing you the slightly edited conversations from those three days.
The panel I hosted on the third day featured Richard Wilson,
CEO of the UK's second largest investment platform, Interactive Investor,
Ala McDonald investment manager Aubrey Capital, and journalist and author
Alex Massey.
Speaker 3 (01:30):
Thank you, Thank you so much for all of you coming.
Speaker 1 (01:32):
This is really very very good of you on this
very near the end of the plastival, quite nice weather
and you've come here.
Speaker 3 (01:36):
We appreciate it.
Speaker 1 (01:42):
So the way we do it, three guests, all brilliant
and they're going to each give their favorite Adam Smith
quote and we're going to talk around those quotes and
their relevance and the barst are relevant today. Okay, So
on my right Richard Wilson. If you were here yesterday,
you already know Richard who was on yesterday too. He's
the CEO of Interactive Investor. Up if you haven't account
it Interactive Investor.
Speaker 3 (02:03):
Oh not so good today.
Speaker 2 (02:05):
Okay, I have.
Speaker 4 (02:08):
How many of you are Hargreave's Lands dining sods. I
did not talk.
Speaker 1 (02:12):
About that and also CEO of Aberdeen Asset Management. On
my right, I've got Alex Massey, who I think a
lot of you will know, Times columnist and author, and
you have a substack. I've temporarily forgotten the name of the.
Speaker 4 (02:24):
Substack of the Debatable Land.
Speaker 1 (02:26):
The Debatable Land. You must all go and read that.
I gather it's brilliant from alex and oh my far
left Adam McDonald, who is an investment manager at Aubrey Capital.
And those of you who came last year may remember
Anna from Van.
Speaker 5 (02:40):
Anna right, I am cheating. I've got two quotes.
Speaker 3 (02:44):
I don't tell this. You're allowed two quotes. And she
said it's fine, there's short, but.
Speaker 5 (02:47):
I just think they're not. It's important because, as we know,
Adam Smith wrote both The Inquiry and to the Nature
and Causes of the Wealth of Nations, but also a
Theory of Moral Sentiments. So my first quote is from
that Morals Sentiments book, and it says, where it possible
that a human creature could grow up to manhood in
some solitary place without any communication with his own species,
(03:11):
he could no more think of his own character than
of the beauty or deformity of his own face. Bring
him into society and he's immediately provided with the mirror
which he wanted before. And my second one, Snappy is snappy.
It's from the Wealth of Nations and he says the
man whose whole life is spent in performing a few
(03:32):
simple operations, has no occasion to exert his understanding and
generally becomes as stupid and ignorant as it is possible
for a human creature to become. So I think these
both really they show that Adam Smith wasn't just a
he wasn't an economist. He was a thinker about humanity,
a student of humanity. And the way I think it
(03:53):
relates to today is that with technology there is a
risk of becoming more and more isolated. That references is
the first quote I give. And I believe also we
have a misplaced trust in technology and perhaps in what
we're seeing now in AI, and that we really need
to work to develop our moral faculties through interpersonal skills
(04:17):
and interpersonal relationships. It's important that we mix and we
work things out ourselves. And also if we don't practice
our intellectual reasoning, our critical thinking, if we don't use it,
we're going to lose it. And I think that's something
also that we need to think about.
Speaker 3 (04:33):
So how do we do that?
Speaker 1 (04:34):
I mean, I think that I think a lot of
people would share that opinion that gradual by taking all
these shortcuts, using technology. Using AI, we lose a part
of ourselves. But how do we bring it back? How
do we maintain that?
Speaker 5 (04:45):
Adam Smith said that you could do it through education.
You could become a better citizen and you can become
a better participant. But I think there are simple things
that we should encourage people to. I mean, you should
be so we are social creatures. We need to maintain that.
And I think that actually we just need to be
very careful now that we don't delegate our thinking. To
(05:07):
let's face it, a group of very, very large companies
that could potentially have a monopoly on AI and what
we're generating, and we need to think about how to
do that. And we know that Adam Smith was not
a fan of monopolies.
Speaker 1 (05:21):
Do you think there is a danger with the very
fact that we're having this kind of conversation and this
kind of conversation is being had across the board politically
and socially. Is that a danger to those big monopolies?
You know, these are companies that are incredibly highly valued.
Large part of the US DOC market is taken up
with a small group of exactly these technology companies, and
every one of you who's invested in in any kind
(05:41):
of global tracker of any kind of massive.
Speaker 3 (05:48):
To these companies.
Speaker 1 (05:49):
So if that is the case, is this kind of
conversation about the social consequences of AI and technology a
long term threat to their margin?
Speaker 5 (05:59):
Well maybe, but I actually I think the problem is
that these companies are way ahead of government type of
and regulation, and Trump and his administration of the masters
of just moving on to another conversation when something gets
a little bit too difficult. And I found it sort
of pretty distasteful the sort of turning of, for example,
someone like Mark Zuckerberg, never my favorite person, but from
(06:21):
banning Trump from Facebook and twenty twenty one to giving
one hundred million towards his inauguration or whatever it was.
You know, it's just well, he didn't give under That
was Musk who gave huge amount of money, but I
think it was several million he gave towards the inauguration.
And now he's just part of that what's it called
a bro lug broing garchy, whatever, broarchy. I think that's
(06:45):
all pretty I worry that the horse has bolted, and
I think it's probably incumbent actually on parents and schools
and everyone to start thinking about making sure that children
don't just start relying on this thing. I mean, we're
all guilty of it.
Speaker 1 (07:01):
But this brings us into a conversation we had that
We talked a little bit yesterday about what what is
your child doing it in a world of AI? But
possibly one of the answers is that there's a huge
advantage to being the child, the young person who continues
with an old fashioned way of thinking, it doesn't take
too many shortcuts and hangs on to their social identity.
Speaker 5 (07:21):
Well, my daughter is sixteen and doing the International Baccalaureate.
She is they are they are now retreating from these
of technology completely, so they know that they'll use it
in the evening, but in classrooms and in uh you know,
they are really moving back towards critical thinking, doing things
that you'd leave everything outside otherwise. They're worried that children
will won't develop the skills.
Speaker 1 (07:42):
But then we and we talk We talked esty a
lot about AI, don't we did the effect on your company?
Speaker 5 (07:48):
We do?
Speaker 1 (07:48):
And it depends how you look at it. And you
could say we talked about the extent which call centers,
et cetera. AI is improving productivity massively, which is a
very good thing we did.
Speaker 3 (07:57):
And here's the downside.
Speaker 6 (07:58):
I'm trying to find this positive because this positive day
is an update. There is an update, And I mean
I look at the behavior of the remote working which
is now receding in commerce, where because people recognize the value,
because we're hypersocial animals, the value and need to interact together.
(08:22):
So in my organization, the ones I work with, whil
you've had a little bit of chivving to do more
and more, people choose to come to the office because
it's where you interact and how you survive. And you
come as oppose this kind of cool moment where you
had freedom not to be there. You created your own
new form of isolation by being remote. And so this
(08:46):
question of recognizing the human, thinking animal and the notion
somehow will all be kind of dissembled into lazy actors
out of the Matrix movie because we'll just feed some
monster with our is now this need, this recognition that
you have, this need to socialize to progress. So I
think I'm an optimist on well, if.
Speaker 1 (09:08):
You do manage to hang onto your job in the
AI era, you should try and come to the office.
Speaker 6 (09:14):
I think if you don't come to the office, you
cease to be relevant at some point because part of
the value that you add is that collaborative spirit, which
is that it's always been the making of human society
is how you act and believe together. The tools will
always change, whether it's shovels or computers or whatever it is.
(09:35):
But what makes you believe and makes you get up
and makes you try is the people you're with and
that recognition organically. That's actually we had this kind of
COVID shock where everyone went into the little bubbles, and
now you've got this new kind of self propelled reality.
I think where particularly when they're younger people that I
work with, because obviously I'm super young, that they choose
(09:58):
they object to not being in the area.
Speaker 5 (10:00):
I think you're lucky actually, because I've not found that.
I found it quite struggle.
Speaker 3 (10:04):
To get people back in.
Speaker 5 (10:05):
People back in, and also even things like making a
phone call seems to be quite daunting for some.
Speaker 7 (10:11):
Alex Well, but yeah, I mean this is in one sense,
it's you know, everybody loves to be optimistic about these things.
But if you look at you know, it's not just
self reported rates of you know, anxiety, loneliness, isolation, nervousness,
et cetera, et cetera, amongst particularly amongst young people. And
so now there's an extent to which you know, yes,
teenagers have always been like some degree, but it does
(10:32):
appear to be quite heightened now to be. And yes,
it's difficult to disentangle more general trends from particular sort
of you know, COVID trends and so on. The way
you had an extraordinary what two year period where all
sorts of things went crazy and the whole world went
mad in many respects. Was that a blip or was
it actually, in some ways actually possibly a sort of
(10:54):
port end of a more general future. And I suspect
it might actually be the latter.
Speaker 4 (11:00):
I didn't. I didn't. I didn't get I didn't I
didn't get that. I didn't get the habit happy memos.
Speaker 2 (11:04):
It's an up.
Speaker 3 (11:07):
But do you worry about your job?
Speaker 1 (11:08):
And Richard Richard said something when we were talking before
that I found absolutely horrifying. Yeah, you that Alex talked
about how he'd moved to II And Richard said, have
you used our AI investment coach yet?
Speaker 3 (11:19):
I mean, that's my job gone, literally just gone, just
like that.
Speaker 2 (11:22):
Yeah, it's a. It's a very cool bit of kit.
Speaker 6 (11:25):
It will drag all content, all content on planet Earth
relevant to your context, assimilates it presented to you in
half a second.
Speaker 3 (11:32):
Yeah, and your job as a commentator.
Speaker 4 (11:34):
People sort of say, oh, AI isn't all that.
Speaker 7 (11:36):
You ask it to generate an image and so on,
and it gives you somebody with eight fingers sort of thing,
and and you think, well, okay, you know, but you know,
if you compare where AI is now to where it
was twelve months ago or eighteen months ago and so on,
you know, you know it can now do if you ask,
you know, AI, could you write, you know, a thousand
words on Kirstarma and Rachel Reeves and their difficulties in
the style of say Danny Finkelstein, AI can now give
(11:59):
you a very good facsimile or pasti. It's sort of,
you know, it's a high quality pastiche. But of course
it is doing that because it can. It can read
all of what Danny's written before, and that is the
source material. So there isn't anything yeah, you know, and
so it's very good at that. But you know, in
our trade, obviously, the hope is that you know, people
(12:20):
will will value if you like the human but imperfect
over the artificial but suspiciously perfect. You know, I suspect
that that may be wish for thinking. And you know
it's already the case that you know, news is a
niche commodity in the same way as I think books
(12:41):
have would become a niche what they already are becoming
a niche commodity and so on. You know, that very
important to those who still subscribe, if you like, But
the numbers who do subscribe are you know, diminishing year
on year and so on, and again we have plenty
of survey evidence that suggests, you know, that young people
in particular, but also adults and on a reading less
than that they were in the past. And it's really difficult.
Speaker 5 (13:02):
You know.
Speaker 7 (13:03):
You speak to you people who teach at top tier
universities and so on, and ask them, how do your
first year undergraduates compare with those from say a decade ago,
and they say, well, they're just as bright, you know,
you know, they're you know, and they're socially engaged, and
they're inquisitive and curious and all the instruments on, but
they can't read in comparison with one.
Speaker 1 (13:21):
And I can't read as in focus reading a whole
yeah yeah, yeah, yeah yeah, or even one hundred pages.
Speaker 7 (13:27):
You know, you know, they really struggle to do the
kinds of reading that would have been considered ordinary part
of the course mandatory as recently as ten years ago.
Speaker 3 (13:37):
Okay, interesting, Ana, what were you going to say?
Speaker 5 (13:39):
Oh no, I was just going to say. I felt
alex was reasonably safe for some time because large language models,
the way they work is coming up with the most
likely words, so they sort of the most common word
that would follow another, whereas that's where your human ingenuity
comes in, as you're coming up with the unexpected.
Speaker 4 (13:54):
Well, you just have to write really bad sentences.
Speaker 2 (13:58):
In non e.
Speaker 1 (14:01):
And can I bring it back to invest briefly on
that business, is there a way to invest that gives
you exposure to the technologies we're talking about to AI,
but reduces some.
Speaker 3 (14:14):
Of the risk of being in those very big names.
Speaker 5 (14:16):
We're already starting to see the AI trade roll over,
as they say, which is people are realizing that for
most investments they have not generated any return yet, and
so doubts have started to creep in. But companies that
you know, something like an interact to investor the quoted
version could be an aj bell where they have started
(14:36):
to be able to use AI quite successfully. So there's
a layer of companies that can use their data to
service to service their clients more effectively. And actually, I
don't know if you've had any good experiences, but sometimes
chatbots for example, can actually be very very effective. But
what I'm doing for clients is still looking out for
lots and lots of different investment opportunities, and we can
(14:59):
come talk about them at the end, but there are
there are many sectors where they will benefit. There is
also many sectors that don't need to be touched by
AI to do well. So I think if you want
to be going to talk about those later or you
know so well, I mean I was thinking about this
quite what with the big trend of consolidation of wealth managers,
(15:19):
what you're finding is the big managers, say investing wrath
bones or something like that, they can't be quite as
nimble with small little investments they've had, so a lot
of them have had to reduce holdings in less so
niche investment opportunities and that's been really bad for investment trusts.
And so we've seen those this relentless selling of investment
trusts in the UK market, and that's also been to
(15:41):
do with people just dumping UK investments and even though
those investments might actually be overseas, they're still getting those discounts.
So I've been putting clients into, for example, the ABI
Japanese Opportunities Trust because there's a great deal of corporate
activity and corporate activism now in Japan and that's trading
at a discount. There's a very interesting UK investment trust
(16:06):
called Rockwood Strategic which invests in maybe ten to fifteen
microcap companies.
Speaker 3 (16:12):
In private companies or listed.
Speaker 5 (16:14):
Companies that have been given up on by the rest
of the market that are seen as uninvestable and they're
intelerates fantastic, So things like that, and I was thinking
also there's a very interesting investment trust called Coordiate Digital Infrastructure,
playing into digital assets and it's a thirty percent discount
to the asset value. So there's just really interesting names
(16:36):
out there. And the firm I work for Aubrey we
have an emerging markets fund and we think it's probably
pretty good time for emerging markets as well, which are
very decent valuations as those investor dollars have been sucked
into those big names. Small smaller companies and some regions
have just been completely ignored, and the valuations are really compelling.
Speaker 3 (16:58):
Thank you. There you go.
Speaker 1 (16:59):
Investment, No not, Michael thoughts on investments this early in
the show.
Speaker 5 (17:05):
Yeah, what I'm putting clients into really brilliant.
Speaker 1 (17:07):
Thank you, Ellen. Right, I think we have to go
on to our next quote. A we are a round
out of time, rich?
Speaker 2 (17:11):
Shall I go?
Speaker 4 (17:12):
Right?
Speaker 2 (17:12):
Here we go?
Speaker 6 (17:13):
It's only one quote, but I can read it twice.
Speaker 2 (17:19):
I can find it.
Speaker 6 (17:20):
Please, don't run out of battery.
Speaker 2 (17:21):
Oh, there we are, right.
Speaker 6 (17:22):
The interest of business men is always, in some respects
different from and even opposite to, that of the public.
The proposal of any new law or regulation of commerce
which comes from this order ought never to be adopted
till after having been long and carefully examined with the
most suspicious attention. It comes from an order of men
(17:44):
who have generally an interest to deceive and even oppress
the public.
Speaker 2 (17:52):
I thought that.
Speaker 6 (17:52):
That was topical in any number of kind of number
of windows. On the one hand, we've got the quas
I'm on a bolistic global tech companies trying to write
the rules for governments and see if you can play
catch up. On the hand, we've got the post Brexit.
Don't worry, We're not going to live with any more
(18:16):
of this nasty European regulation, and a decade later it's
all pretty similar. And then we have the new barons
of politics who are erstwhile self serving, narcissistic businessmen. I
can't think of any offhand who are writing rules which
(18:36):
we should all distrust because they in plain sight of
lining their own pockets. So I just thought that was
as a topical point of today, you couldn't get much
richer in terms of relevance.
Speaker 2 (18:51):
And now we've got in.
Speaker 6 (18:52):
The UK we have a current situation where I'm trying
to brow not to politicize it, where we have a
government that.
Speaker 3 (19:00):
Is you can politicize by the way.
Speaker 4 (19:03):
The government is.
Speaker 6 (19:07):
Talking about growth, yet its policies are divorced from the
interests of business. And if we don't solve that conflict
in terms of wealth creation and all the things that
we expect and hope to build from a society, we
will simply lose out in the global game of innovation
(19:28):
and stand living and continue this rather boring story of
woe is me in the UK about why aren't we
better than we thought we were and have been?
Speaker 2 (19:38):
So that's but there's a positive. We have lots of
opportunity with.
Speaker 6 (19:45):
Lots of wonderful academic and innovation technology in the UK.
We have some regulation UK and lack of support for
an innovation through the tax system, which is hurtful and painful.
But if we have the courage.
Speaker 1 (19:58):
But I think this is the key, isn't it That
everything that we've talked about over the last couple of
days and again today when we talk about the problems,
the difficulties exact, everything is flexible with policy.
Speaker 3 (20:08):
These are all policy mistake.
Speaker 6 (20:09):
Simple courageous simple decisions can fix and they're not short
term fixes because you need also to have the courage
of your convictions and lived with these over multiple cycles.
Speaker 5 (20:21):
If we acknowledge that to keep the bond markets calm,
we are going to have to raise taxes, where would
you let the axe fall?
Speaker 6 (20:28):
Well, that's not a very positive introduction to it. So
this gigantic double handed axe or the reality is that
you need to fish in the biggest pool and making
promises that you should never make. You at some point
you have to fess up. Income tax is by far
(20:53):
the largest pool. They should never have promised not to
touch it. In terms of we've got a we wrote
a bunch of checks that will last for two reasons,
the financial crisis, and then go nuts with COVID. We
wrote a bunch of checks we couldn't cover, and we've
now got a fiscal deficit, which is pretty nasty. You've
(21:13):
got to pay the piper and there's no point in
fiddling around at the edges. You need to deal with
it front up, and.
Speaker 2 (21:19):
You can do that.
Speaker 6 (21:20):
You can also at the same time incentivized entrepreneurship and
reward because those are quite small numbers, and this messing
around with ITHT to punish farmers or small business owners
for the sake of half a billion pounds is it
deflates the aspirations of what is about twelve or thirteen
million people in the country who are all involved in
(21:42):
small businesses, which is the entire future of the country.
So you can actually use the juice from one solution
to solve.
Speaker 5 (21:49):
The I just need to be brave and fess up.
Speaker 1 (21:51):
So it's a few points on the base rate of
income text, isn't it. That's as simple as that of
the allowance.
Speaker 7 (21:57):
Yeah, but I mean, isn't the eight also in it
an opportunity that at the moment, the v AT regime
is nuts. You know, you think of you know, the
great debate as that you know, is a jaffa cake,
a cake or a biscuit.
Speaker 8 (22:08):
This game up yesterday as well, and it's clearly a cake,
but it really matters, but it really matters for a
vot purposes, and so well, you know, so you know,
you have all these crazy carve outs and and anomalies
in v A T and so on, and it seems
that that that from a political point of view, it
seems to be that flattening all of those out, getting
rid of all of those is easier than income tax.
Speaker 7 (22:32):
It is no exemption across the except for newspapers obviously,
But I mean.
Speaker 6 (22:39):
I agree in principle, but in practice you always need
to be careful or mindful of unintended consequence. So if
we just go, you know what, let's just remove all
the v AT exemptions. That includes removing the exemptions on
interest and deposits, because that's just a VAT exemption in
financial services, it will destroy your business because all the
that on third party services will come in and you
(23:00):
you're done, probably overnight. So there needs to be a
kind of a process of managing proportionality and sequence. Even
I think on the principle, I agree on the application
you to be very careful you don't self harm as.
Speaker 1 (23:13):
Well, and the difficulty will be that actually, this isn't
going to happen because it promised, they're not going to
do this, and it's a huge promised to break. So
it is going to come somewhere else, and it's going
to come somewhere inside pensions or property or something like that.
Speaker 3 (23:26):
As you say, it's not going to be enough money, no,
but it's still no.
Speaker 2 (23:29):
Well then you we have.
Speaker 6 (23:30):
We have, So then we have tokenism and symbolism and
playing to the wrong audience. If we look at this
story and we know we suspect that it was just
chucked out in immediate to fly a kite. This thing
about capital gains on primary residents, and we're one of
the few countries that doesn't levy capital gains on your
(23:51):
on your residence, and of course if you've followed Alice,
we coould say, of course you would have capital gains
tax on, but you would never have transaction tax because
that's im said, and because what we proposed actually let's
do let's do both completely.
Speaker 1 (24:05):
Anyone, why don't we ask the audience if anyone has
any good ideas how red or wreaths can raise fifty
one billion pounds without breaking any promises.
Speaker 4 (24:14):
Sell whales.
Speaker 9 (24:16):
Anywhere you might not raise that might from.
Speaker 4 (24:24):
In the old days you would actually you go to war.
Speaker 6 (24:26):
Yeah, well you're to go to choir somewhere the rules.
Speaker 1 (24:31):
Seriously, has anyone got a thought on anything that isn't
tax that could be taxed?
Speaker 4 (24:37):
It's very hard to think of something that isn't.
Speaker 3 (24:39):
Taxed that that's really the question.
Speaker 5 (24:40):
It's impossible thing of anything that doesn't tax. Did you
enabled more licensing of north Sea oil and gas? Your
tax take could increase from the tax revenues.
Speaker 3 (24:49):
I think that breaks another promise.
Speaker 6 (24:52):
The biggest pools are an income tax by a country.
Everything else is sort of noise option.
Speaker 4 (24:57):
They're worded on National insured.
Speaker 6 (24:58):
Oporation tax, but it's not the best and if it is,
unless you you double it, which is probably not a
great great look up.
Speaker 1 (25:04):
Update update update, We're going to have to move and
move on, Alex.
Speaker 3 (25:08):
Why don't we do your quote. Was it actually with
very nicely?
Speaker 4 (25:11):
Oh yes, yes, yeah, well if I can read.
Speaker 3 (25:12):
It, I have terrible handwriting.
Speaker 1 (25:14):
I've written his quote down for him, and so it
may not be accurate.
Speaker 3 (25:18):
It may not be accurate.
Speaker 7 (25:19):
I think this is something that ought to be displayed
on you know, sort of motorway sciences. You're on the
A one or the A sixty eight at the Carter
Barnes on as you're crossing into Scotland and so on,
that this, this should be on the big, big notice board.
And so virtue is to be more feared than vice
because its excesses are not subject to regulation of conscience.
And I think that that would give people coming to
Scotland fair warning about the land they're about to enter,
(25:43):
because you know, in that one sentence, Smith captures an
awful lot of Scottish politics, not just right now, but
historically as well, and so on, the sort of humbug
and hypocrisy that has been a defining feature I would
suggest of Scottish public life for centuries. Some examples please, Yeah,
(26:05):
you know, obviously you know, off with Arsen's on why
do you hate Scotland? And I mean the first answer
is obviously for the money. But thereafter you know, one
cut against down to well, the people and the weather
and so on.
Speaker 4 (26:19):
But you wanted positive.
Speaker 1 (26:22):
There isn't anything positive you can come up with that.
But I think, I think that this is one of
my favorite quotes because it really and it feeds so
well into everything that's happened over the last decade. This
idea that you can say something that sounds good, sounds nice,
and no one can possibly oppose you because what you've
said sounds good and the unintended consequences of it, I mean, net.
Speaker 3 (26:41):
Zima, of course, is the anthletye Cklask of this.
Speaker 1 (26:43):
The unintended consequences of the wonderful thing that you've said
destroyer lives across the board. But because anyone who disagrees
with you is evil, we don't care about those people. Well,
and this is something that has defined politics in Scotland
for the whole time I've lived here, and is beginning
to or has also find quite a lot of political
engagement in other places as well.
Speaker 7 (27:03):
Yeah, I mean, you have a there's a a it
happens elsewhere as well, of course, but it is a
particularly virulent strain of sort of humbug in Scottish politics
and on, you know, and that that by presenting ourselves
as being a more moral people than the great Satan
to the South, you know, you know that we we
we we demonstrate our moral superiority and so on. And
(27:25):
you know it's the late John Smith AND's on who said,
you know that we are more moral people in an
interview with John Lloyd of the Financial Times, and that
was what, you know, nearly thirty what more than thirty
years ago, So it's not a particularly recent innovation, this
sort of thing, but you know, you you definitely have
it in spades in the last ten years in particular
as you say it, so you know, it's the sort
(27:46):
of thing you know, you launch a ferry with painted
on windows, and that is you know, it's the idea
of a fairy serves for an actual ferry, which you
know doesn't really work if you actually need to to get.
Speaker 4 (28:03):
And you know, you know the.
Speaker 7 (28:05):
I mean the quote that Richard's talking about the the
you know, the sort of sense of regulatory capture. And
some people are often suspicious about, you know, business interventions
in politics before precisely that reason self serving, et cetera,
et cetera, et cetera, and so but I think we
could extend that to the whole of the so called
third sector. Uh and you know charity so called charities
and public sector unions et cetera, et cetera, et cetera.
(28:27):
You know, who are often presented as being sort of
disinterested or impartial observers and so on offering their solutions
and some when they are obviously just vested interests just
as much as big businesses. But they have a room,
they have a seat at the table in Scottish public
life now to a degree that business certainly does not.
Speaker 4 (28:47):
And you know, some.
Speaker 7 (28:48):
Of this is about mood, but but you know, it
does have a real impact. I think you know that
if you have a you know, if you're speaking to
people and so on, you do you want to invest
in Manchester in Glass And I'll say, well, Andy Burnham,
whatever you may say about Manzoor and he wants our money.
You know, who do we speak to in Glasgow about that?
And where's the general atmosphere of seeing the private sector
(29:12):
as a multiplier of good things rather than just something
to be milked if you like. For the more virtuous
public sector, which has been the sort of motive.
Speaker 4 (29:23):
I think of the Scottish government.
Speaker 7 (29:24):
For the last ten years, in particular, the private sector
and industry and so on exists to fund the more
morally virtuous parts of society, which are not more morally
virtuous at all, but are presented as such.
Speaker 5 (29:42):
And one of the really interesting things I was just
going to say, I think that since the independence referendum,
companies have been scared to speak out about so many things.
And I also sit on I'm a trustee of a
think tank. It's a politically independent think tank. We do
good research around education, around health, and we'd love corporate sponsorship,
but they are scared to sponsor or to give us money, even.
Speaker 1 (30:07):
Though because the very neutrality of your research makes it
effectively criticism of the government.
Speaker 5 (30:11):
Yeah, And so they're too scared to be listed as
a donor.
Speaker 1 (30:14):
Yeah. And there is a very interesting that you know,
we have these the Social Attitudes Server, which comes out
for the UK as a whole and for Scotland. And
if you look at that survey over every single year,
the English and the Scottish have almost identical attitudes to everything,
almost that Nonetheless, this idea that there's a difference in
attitudes towards various social things. It persists even though it's
(30:37):
demonstrably not true.
Speaker 6 (30:38):
I just just not that I don't love Andy Burnham,
but just as an example of commercial development, innovation, future technology.
So I think I'm one of the largest fintech employees
in Manchester. I've got about a thousand people there. We're
doing all of our AI stuff. Despite Manchester's behavior, and
(30:59):
despite his behavior, he's brought nothing zero. In fact, he's
brought reasons not to be in Manchester. The reasons why
we're in Manchester is the talent pool and the sourcing
of their talent from the universities around Manchester is stable,
developing and there's inward migration of talent. That's not a
(31:22):
political thing. That's as something you because you're The steps
you take as an enterprise are about what next move
you make, and everything's around competence, and competence is all
about people. So back to the Glasgow contrast. I'm be
a super big fan of Glasgow or Edinburgh, but those
choices and when you look at that decision making process,
(31:45):
you're not it's some expedient kind of some Manchester's got midas,
you know, the midas Manchester inwards doesn't actually do anything
apart from do posters and stuff. The what what matters
is your connections with with institutions to support your development
into the future. Whilch show the universities and the socize
(32:05):
of your competitive group because you want to have talent
mobility between competitors. That's the important stuff. And I don't
see any reason why. I mean for the future of
Scotland or for a city or for the UK. Those
important connections about the future, which is about the future skills.
They need to be right in the middle of the conversation,
(32:26):
whether one politician or another makes hay out of it
and self promotes or not. And he's quite good at that.
It's not the same thing as actually having the right
programs in the right toil base.
Speaker 1 (32:36):
I'm looking for that great Anna Smith quote which I
can't find, about how most economic activity is carried out
and is successful despite government and regulation rather than because
of it.
Speaker 3 (32:46):
I can't find it, but you'll all know it. It's
one of the best ones. Sorry I interrupted you, Alex.
Speaker 7 (32:49):
You know, in the modern world it seemed to be
you know that it's very particularly in a small place,
and this is a small place to get very sort
of self obsessed and you know, and you know, one
of the features of Scottish politics in the last twenty
five years and so on is the narrowing of frames
of reference. And so you know, half a step ahead
(33:11):
of whatever's happening in England, you know, Harad's banneck burn,
half a step behind our calamity it's flodden. But is
England actually the appropriate frame of reference? You know, what's
happening elsewhere in the world, and we're very very narrow minded.
I think about not actually looking at what's happening elsewhere
in the world in terms of larger, longer term trends.
(33:33):
And you know, to some extent you could make some
of the same criticisms of the UK more generally, I
think in this regards on that when you look at
you know, international trends, you know, what are we doing
here and how does it marry up with what is
happening elsewhere?
Speaker 4 (33:47):
And you know, it's very very challenging.
Speaker 7 (33:49):
And I think that again, you know, we we we measure,
the things we choose to measure are often the wrong things.
So when it comes to say, like the you know,
the attainment in schools and so on, which used to
was supposed to be eliminated by next year. It's on
a spectacularly foolish promise because it could never be delivered.
But the way to narrow the attainment gap is to
(34:11):
ensure that the people at the top do less well.
Speaker 4 (34:14):
Then job done.
Speaker 7 (34:14):
The attainment gap has been eliminated because nobody is getting
an A grade anymore. So you know, you present that
as a success if that were to happen. But if
you look at you again, dispassionate international evidence, you see
a steady decline in educational achievement in Scotland over the
last twenty five years, predates the SMP. But it's a
long term problem. You know, the piece assessments and various
(34:36):
other international tests that show you know that in general,
particularly in maths and science and so on, doing worse
by an act at a constant absolute standard. And so
we measure the wrong things and then we draw the
wrong conclusions from the wrong things that we measure.
Speaker 1 (34:52):
I mean, no one's given me the option of infee,
Nicholas says in myself, So I can't ask you.
Speaker 4 (35:00):
She doesn't give I don't want to come on.
Speaker 3 (35:02):
But you know she's got a new book out.
Speaker 1 (35:04):
And one of the things that she always has heard
a lot of her tenure was that she wanted to
be judged by education.
Speaker 3 (35:08):
That would be her legacy.
Speaker 1 (35:09):
Right now, that's been such a monumental failure that we
don't really need to go into.
Speaker 9 (35:13):
It a lot.
Speaker 7 (35:14):
But what you didn't want to be judged by, you know,
I want to be judged on this, says politician, confident
she will not actually be judged on this.
Speaker 1 (35:21):
What do you think that her legacy actually is a
very connected toscross politics in a way that I'm not
as obviously she was in power for a long time
since just left a legacy.
Speaker 3 (35:29):
It's clearly not an education.
Speaker 4 (35:30):
What is it? Well, I mean, I mean political.
Speaker 7 (35:34):
You know, the half life of politicians is much much
shorter than they tend to think, and you know that
their legacy, such as it is, tends to be very
ephemerals on you know, the you know, they disappear and
they're replaced by the next person, and life trundles on,
and you know, in terms of substantive policy achievement, you know,
(35:55):
it's really quite difficult to see what her long term
big pick your successes have been. I think you could
make a case and regardless of whether you happen to
agree with the policy or not. And on that things
like the Scottish child payments on you know, cash transfers.
So you're going to say baby baby boxes is a nonsense,
I mean, you get a terrible poem and you know,
(36:17):
a terrible poem.
Speaker 4 (36:18):
I mean, you know there's one of the problem.
Speaker 7 (36:20):
Poetry has been a growth business in Scotland in recent
years and that's something to be deplored. But you know,
you could make an argument that cash transfers to to
to poorer families and so on has a substantial impact
on those poorer families, regardless of whether you happen to
agree with all the sort of social security decisions have
been made in recent years or their long term sustainability,
(36:42):
et cetera, et cetera. I think you can make you
can make a reasonable case that that is is a
genuine point of difference in terms of where we are
now compared to where she were, where we were before
she became First Minister. But in broader terms in health, education,
the economy, big ticket items of which and her government
had responsibility and on you look at it's a history
(37:06):
of missed opportunities in many ways because you know, she
had the ability, particularly in twenty fourteen when you know
she was super popular because she was not Alex Salmond
and people wanted to move on and have a fresh start.
Speaker 4 (37:19):
You know she had.
Speaker 7 (37:19):
She then actually had an opportunity to do big things
in education, in health, et cetera. But she duck those
challenges because fundamentally she's not interested in ideas or reform.
And you know in the end, you know, you read
her books on and it's full of this sort of
faux humility. Yes, yes, very Presbyterian type thing of you know,
(37:42):
I'm always confessing or you know, confessing my sins and
my mistakes and my weaknesses. Look how marvelous I am.
You know other politicians don't have the courage to do this.
Speaker 3 (37:53):
Read her book? Has anyone read her book? This is
why sin Adam Smith. Isn't it now? Anyone bought it
downloaded on the kindle?
Speaker 4 (38:00):
No, it's possibly not the room for Niccola then, is it.
Speaker 5 (38:04):
Yeah? But yet the astonishing thing is that on current polling,
the S and P or on track to be the
largest party in Hollyrood next year.
Speaker 7 (38:12):
But remember there's a big diff that's true obviously, but
but there's a big difference between an SMP that is
winning forty five to fifty percent of the vote and
one that is winning thirty three to thirty five percent
of the vote.
Speaker 1 (38:22):
Right, listen, we have a special guest, Dominic Dominic. I
want you to pop up and send except to Anna
for a minute. Because Dominico does great quotes and he's
often on the panel on the stage.
Speaker 3 (38:31):
Today we don't have enough.
Speaker 1 (38:32):
Microphones, so I'm going to bring him up special chair,
special chair for a special guests, different everyone else is.
I'm going to get one one quote from Dominic and
I want him to talk quickly about his new book,
which is on a subject there's very dear to all
our hearts.
Speaker 2 (38:46):
Well, thank you very much, Mary, and hello everyone.
Speaker 5 (38:49):
My name's Dominic dom Would you like me just to
hold the book up?
Speaker 4 (38:52):
Yeah, you do that.
Speaker 2 (38:53):
That would be wonderful than you under all your scenes.
And I nearly went off, so we can consider myself lucky.
Speaker 9 (39:03):
So the quote that I have is from Wealth of
Nations and it is goods can serve many other purposes
besides purchasing money. But money can serve no other purpose
besides purchasing goods. And in this instance he's referring to
the medium of exchange, thank you, function of money. And
(39:28):
there are actually three functions of money, to be a
medium of exchange, to be a store of value, and
to be a unit of account. But what has happened
to money? I've always argued that money should be independent,
and because money is no longer independent, it's the issuance
of governments. Money has become on top of being a
medium of exchange, store of value and unit of account,
(39:51):
it has become a tool of government. And because it's
become a tool of government, whether it's the United States
using its dollar as a sort of carrot and stick
to get other nations to behave themselves, you know, the
most famous recent example being its confiscation of all of
Russian assets using its dollar as a.
Speaker 2 (40:08):
Tool of war, or in the UK we just see
it repeatedly.
Speaker 9 (40:12):
Money has become a tool of policy, you know, from
the zero interest rate policies which followed the financial crisis
enabling the bailout of the banks, to the systematic debasement
of currency that's been going on for over one hundred years,
and the consequences of this have been quite terrible for society.
(40:37):
And just by way of example in the book here
I show consumer prices in the nineteenth century when money
was gold, when the gold sovereign was the pound coin,
and now take six hundred and fifty pound coins to
buy the old pound coin. Gives you an idea how
much it's been debased by. But if you look at consumed,
we came off the gold standard to print the money
(40:58):
to pay for the war, the Napoleonic Wars, and we
went back on the gold standard in eighteen twenty one,
and between eighteen twenty one and the eighteen fifties when
the California gold rush. In that thirty year period, just
one generation prices more than half. They came down by
about sixty five percent. And what that meant is that
(41:21):
everyone who was earning money, who was earning a salary,
was able to keep If you think, when you work,
you're expending energy, and what you receive in the form
money is stored energy. And everyone was then able to
keep their stored energy. They didn't have to didn't lose
its value, its value increased, and they were ever to save.
And once they covered the basics, which were food, clothing,
(41:43):
and shelter. They were able to invest in self improvement,
so that by eighteen seventy, before education became compulsory and
by statute and was provided by the state, I think
ninety six percent of the country was literate. And we
just saw the emergence of the middle classes that just
didn't previously exist or to nothing like the same extent.
(42:05):
And when the value of your money increases over time,
it totally changes the dynamic of society.
Speaker 2 (42:12):
And we compare that.
Speaker 9 (42:13):
I've got a table here and it shows prices in
nineteen seventy compared to prices today, and we see, for example,
a house is now seventy times more expensive than it
was in nineteen seventy. Salaries have only gone up twenty times.
And so because houses have gone up three and a
half times more than salaries, we now need two people
(42:33):
working in order to and a lot more debt to
buy the same house that was easily affordable seventeen years,
fifty or sixty years ago.
Speaker 2 (42:41):
Cars they should have come down.
Speaker 9 (42:42):
In price because we outsourced car manufacturer to China, we
got better at manufacturing cars. But because there's so much
finance involved in the purchas in the car they're up
thirty or forty times. Pint of beer, like it's thirty
times more expensive. That's largely because of the increased taxes
that go on as well. A pint of milk twelve
times more expense, gallon of petrol twenty times more expensive.
(43:02):
If you look at all these things in gold terms,
they're all cheaper than.
Speaker 2 (43:06):
They were in nineteen seventy.
Speaker 9 (43:08):
And a washing machine, interestingly, is only four times as
expensive as it was in nineteen seventy. And that's the
partly because we just used cash to buy washing machines.
We've outsourced their manufacturs to China, we've got better at
making them and so on.
Speaker 2 (43:21):
And then you look at the price of a phone call,
and of course in the.
Speaker 9 (43:25):
Nineteen seventies, when I was a little boy, you would
pay ten p for a local call.
Speaker 2 (43:29):
That lasted three minutes.
Speaker 9 (43:31):
Now we can have a video call with anyone anywhere
in the world and it costs nothing.
Speaker 2 (43:34):
And that's the deflationary effect.
Speaker 3 (43:36):
That's the upbet.
Speaker 2 (43:37):
Yeah, that's the good. That's the defense of technology.
Speaker 9 (43:40):
And so my rant is basically what terrible things we've
done to money and the result, like when you say,
why do people have more kids. The most commonly given
answer is I cannot afford to have more kids. So
we're starting families later in life and we're having smaller families.
And so the result of the basement of currency is
(44:01):
literally the depletion of our people.
Speaker 2 (44:04):
And it's terrible.
Speaker 1 (44:05):
And the hedge against the debasement of our currency is
to own more goal.
Speaker 2 (44:08):
Absolutely.
Speaker 9 (44:09):
One last thing we were talking about how the government
is going to pay for all the various things it
pays for inflation is taxation. Without legislation, we're sort of
forty five percent of GDP taxation, but if you in
factor in inflation, we're above fifty percent. And the way
that a lot of this is going to be paid
for is further debasement of the currency.
Speaker 7 (44:31):
In Scotland, it's fifty five percent of GDP is public
spending in and in and for Scotland.
Speaker 1 (44:37):
English taxpayers are covering the difference.
Speaker 7 (44:38):
Well, that is the thing, you know, I mean, Joel
Barnett is the patron saint of Scottish politicians on because
I mean he's worth fifteen billion pounds a year and
you know, you know, the SMP's policy technically is to
have full fiscal autonomy. And on, and you know, like
many things and on, be very careful what you.
Speaker 3 (44:54):
Wish for for the fun of it, Richard, you had something.
Speaker 6 (44:59):
Sorry, you know, you're almost slid into gold being a
proxy for money. But because as a means of exchange
is no use, No, it's a store of value.
Speaker 9 (45:09):
You tended to use silver and copper and nickel with
a more common medium of exchanges than gold, because there's
just so much value in Like a gold sogign would
be about the size of the two peer a little
bit smaller, and that's six hundred and fifty pounds. So
you would use gold for high value transactions horses and suits.
Speaker 6 (45:28):
Well, I think we talked the other day about there
was a transaction done where they paid for it in
gold and it was three tons and they had to
fly the gold in and flying three tons of gold
actually is quite a bit of a thing. Yeah, Russia
bought a load of drones off Iran, and because both
nations have been shut out of swift, they paid for
the transaction in gold, and so Russia flew three tons
of gold to Iran to pay for drones. I mean,
(45:50):
how impractical is that.
Speaker 3 (45:52):
Yeah, I'll tell you a lot about gold doesn't it.
Speaker 2 (45:53):
It does, but my subject was money and gold. Gold
function is more store of wealth than the appreciate.
Speaker 1 (46:00):
You should know by the way that Dominic was on
the panel yesterday, and yesterday he had some silver coins
which he handed around and clearly he doesn't come back.
Speaker 3 (46:07):
This is not a high trust audience.
Speaker 2 (46:10):
That's I have it here. That's silver dollar, the old
the old dollar. And it was a day's wait, wait
for a working man.
Speaker 9 (46:16):
And it's about an eighth a eighty percent of an
ounce of Silbert.
Speaker 3 (46:27):
Thanks for listening to this week's Marryn Doalk's Money.
Speaker 1 (46:29):
If you like our show, rate review, and subscribe wherever
you listen to podcasts. I keep sending questions or comments
to Marror Money at Bloomberg dot net. You can also
follow me in John on Twitter or x I'm at
mariness w and John is John underscored Steppek. This episode
was hosted by me Marin Zumset Web. It's produced by
some Asidi sound designed by Blake Maple's Special thanks to
(46:49):
my guests, to Blairbarrows and to all the rest of
the team at Pama House.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
Please welcome me in Somerset Web.
Speaker 1 (00:21):
Hello, Maren Talks Money Listeners, It's Meren Sumset Web.
Speaker 3 (00:24):
Before we get back to our regular.
Speaker 1 (00:26):
Programming in early September, we are bringing you something very special,
recordings of the conversations I had at Pamia House for
the Edinburgh Fringe Festival. Now, for those of you who
don't know, the Fringe is a three week arts and
culture festival that began in nineteen forty seven and takes
place in Edinburgh in Scotland every August. For the past
few years I have been hosting conversations about markets, economics
(00:47):
and investing from one of the most special locations in Edinburgh.
As part of this festival, I do it from Panma House,
which is the last home of Adam Smith, philosopher and
father of modern economics, is where he completed the asked
editions of his best sellers, The Theory of Moral Sentiments
and The Wealth of Nations. This year we did a
three day run was the end of August, and we
(01:08):
are bringing you the slightly edited conversations from those three days.
The panel I hosted on the third day featured Richard Wilson,
CEO of the UK's second largest investment platform, Interactive Investor,
Ala McDonald investment manager Aubrey Capital, and journalist and author
Alex Massey.
Speaker 3 (01:30):
Thank you, Thank you so much for all of you coming.
Speaker 1 (01:32):
This is really very very good of you on this
very near the end of the plastival, quite nice weather
and you've come here.
Speaker 3 (01:36):
We appreciate it.
Speaker 1 (01:42):
So the way we do it, three guests, all brilliant
and they're going to each give their favorite Adam Smith
quote and we're going to talk around those quotes and
their relevance and the barst are relevant today. Okay, So
on my right Richard Wilson. If you were here yesterday,
you already know Richard who was on yesterday too. He's
the CEO of Interactive Investor. Up if you haven't account
it Interactive Investor.
Speaker 3 (02:03):
Oh not so good today.
Speaker 2 (02:05):
Okay, I have.
Speaker 4 (02:08):
How many of you are Hargreave's Lands dining sods. I
did not talk.
Speaker 1 (02:12):
About that and also CEO of Aberdeen Asset Management. On
my right, I've got Alex Massey, who I think a
lot of you will know, Times columnist and author, and
you have a substack. I've temporarily forgotten the name of the.
Speaker 4 (02:24):
Substack of the Debatable Land.
Speaker 1 (02:26):
The Debatable Land. You must all go and read that.
I gather it's brilliant from alex and oh my far
left Adam McDonald, who is an investment manager at Aubrey Capital.
And those of you who came last year may remember
Anna from Van.
Speaker 5 (02:40):
Anna right, I am cheating. I've got two quotes.
Speaker 3 (02:44):
I don't tell this. You're allowed two quotes. And she
said it's fine, there's short, but.
Speaker 5 (02:47):
I just think they're not. It's important because, as we know,
Adam Smith wrote both The Inquiry and to the Nature
and Causes of the Wealth of Nations, but also a
Theory of Moral Sentiments. So my first quote is from
that Morals Sentiments book, and it says, where it possible
that a human creature could grow up to manhood in
some solitary place without any communication with his own species,
(03:11):
he could no more think of his own character than
of the beauty or deformity of his own face. Bring
him into society and he's immediately provided with the mirror
which he wanted before. And my second one, Snappy is snappy.
It's from the Wealth of Nations and he says the
man whose whole life is spent in performing a few
(03:32):
simple operations, has no occasion to exert his understanding and
generally becomes as stupid and ignorant as it is possible
for a human creature to become. So I think these
both really they show that Adam Smith wasn't just a
he wasn't an economist. He was a thinker about humanity,
a student of humanity. And the way I think it
(03:53):
relates to today is that with technology there is a
risk of becoming more and more isolated. That references is
the first quote I give. And I believe also we
have a misplaced trust in technology and perhaps in what
we're seeing now in AI, and that we really need
to work to develop our moral faculties through interpersonal skills
(04:17):
and interpersonal relationships. It's important that we mix and we
work things out ourselves. And also if we don't practice
our intellectual reasoning, our critical thinking, if we don't use it,
we're going to lose it. And I think that's something
also that we need to think about.
Speaker 3 (04:33):
So how do we do that?
Speaker 1 (04:34):
I mean, I think that I think a lot of
people would share that opinion that gradual by taking all
these shortcuts, using technology. Using AI, we lose a part
of ourselves. But how do we bring it back? How
do we maintain that?
Speaker 5 (04:45):
Adam Smith said that you could do it through education.
You could become a better citizen and you can become
a better participant. But I think there are simple things
that we should encourage people to. I mean, you should
be so we are social creatures. We need to maintain that.
And I think that actually we just need to be
very careful now that we don't delegate our thinking. To
(05:07):
let's face it, a group of very, very large companies
that could potentially have a monopoly on AI and what
we're generating, and we need to think about how to
do that. And we know that Adam Smith was not
a fan of monopolies.
Speaker 1 (05:21):
Do you think there is a danger with the very
fact that we're having this kind of conversation and this
kind of conversation is being had across the board politically
and socially. Is that a danger to those big monopolies?
You know, these are companies that are incredibly highly valued.
Large part of the US DOC market is taken up
with a small group of exactly these technology companies, and
every one of you who's invested in in any kind
(05:41):
of global tracker of any kind of massive.
Speaker 3 (05:48):
To these companies.
Speaker 1 (05:49):
So if that is the case, is this kind of
conversation about the social consequences of AI and technology a
long term threat to their margin?
Speaker 5 (05:59):
Well maybe, but I actually I think the problem is
that these companies are way ahead of government type of
and regulation, and Trump and his administration of the masters
of just moving on to another conversation when something gets
a little bit too difficult. And I found it sort
of pretty distasteful the sort of turning of, for example,
someone like Mark Zuckerberg, never my favorite person, but from
(06:21):
banning Trump from Facebook and twenty twenty one to giving
one hundred million towards his inauguration or whatever it was.
You know, it's just well, he didn't give under That
was Musk who gave huge amount of money, but I
think it was several million he gave towards the inauguration.
And now he's just part of that what's it called
a bro lug broing garchy, whatever, broarchy. I think that's
(06:45):
all pretty I worry that the horse has bolted, and
I think it's probably incumbent actually on parents and schools
and everyone to start thinking about making sure that children
don't just start relying on this thing. I mean, we're
all guilty of it.
Speaker 1 (07:01):
But this brings us into a conversation we had that
We talked a little bit yesterday about what what is
your child doing it in a world of AI? But
possibly one of the answers is that there's a huge
advantage to being the child, the young person who continues
with an old fashioned way of thinking, it doesn't take
too many shortcuts and hangs on to their social identity.
Speaker 5 (07:21):
Well, my daughter is sixteen and doing the International Baccalaureate.
She is they are they are now retreating from these
of technology completely, so they know that they'll use it
in the evening, but in classrooms and in uh you know,
they are really moving back towards critical thinking, doing things
that you'd leave everything outside otherwise. They're worried that children
will won't develop the skills.
Speaker 1 (07:42):
But then we and we talk We talked esty a
lot about AI, don't we did the effect on your company?
Speaker 5 (07:48):
We do?
Speaker 1 (07:48):
And it depends how you look at it. And you
could say we talked about the extent which call centers,
et cetera. AI is improving productivity massively, which is a
very good thing we did.
Speaker 3 (07:57):
And here's the downside.
Speaker 6 (07:58):
I'm trying to find this positive because this positive day
is an update. There is an update, And I mean
I look at the behavior of the remote working which
is now receding in commerce, where because people recognize the value,
because we're hypersocial animals, the value and need to interact together.
(08:22):
So in my organization, the ones I work with, whil
you've had a little bit of chivving to do more
and more, people choose to come to the office because
it's where you interact and how you survive. And you
come as oppose this kind of cool moment where you
had freedom not to be there. You created your own
new form of isolation by being remote. And so this
(08:46):
question of recognizing the human, thinking animal and the notion
somehow will all be kind of dissembled into lazy actors
out of the Matrix movie because we'll just feed some
monster with our is now this need, this recognition that
you have, this need to socialize to progress. So I
think I'm an optimist on well, if.
Speaker 1 (09:08):
You do manage to hang onto your job in the
AI era, you should try and come to the office.
Speaker 6 (09:14):
I think if you don't come to the office, you
cease to be relevant at some point because part of
the value that you add is that collaborative spirit, which
is that it's always been the making of human society
is how you act and believe together. The tools will
always change, whether it's shovels or computers or whatever it is.
(09:35):
But what makes you believe and makes you get up
and makes you try is the people you're with and
that recognition organically. That's actually we had this kind of
COVID shock where everyone went into the little bubbles, and
now you've got this new kind of self propelled reality.
I think where particularly when they're younger people that I
work with, because obviously I'm super young, that they choose
(09:58):
they object to not being in the area.
Speaker 5 (10:00):
I think you're lucky actually, because I've not found that.
I found it quite struggle.
Speaker 3 (10:04):
To get people back in.
Speaker 5 (10:05):
People back in, and also even things like making a
phone call seems to be quite daunting for some.
Speaker 7 (10:11):
Alex Well, but yeah, I mean this is in one sense,
it's you know, everybody loves to be optimistic about these things.
But if you look at you know, it's not just
self reported rates of you know, anxiety, loneliness, isolation, nervousness,
et cetera, et cetera, amongst particularly amongst young people. And
so now there's an extent to which you know, yes,
teenagers have always been like some degree, but it does
(10:32):
appear to be quite heightened now to be. And yes,
it's difficult to disentangle more general trends from particular sort
of you know, COVID trends and so on. The way
you had an extraordinary what two year period where all
sorts of things went crazy and the whole world went
mad in many respects. Was that a blip or was
it actually, in some ways actually possibly a sort of
(10:54):
port end of a more general future. And I suspect
it might actually be the latter.
Speaker 4 (11:00):
I didn't. I didn't. I didn't get I didn't I
didn't get that. I didn't get the habit happy memos.
Speaker 2 (11:04):
It's an up.
Speaker 3 (11:07):
But do you worry about your job?
Speaker 1 (11:08):
And Richard Richard said something when we were talking before
that I found absolutely horrifying. Yeah, you that Alex talked
about how he'd moved to II And Richard said, have
you used our AI investment coach yet?
Speaker 3 (11:19):
I mean, that's my job gone, literally just gone, just
like that.
Speaker 2 (11:22):
Yeah, it's a. It's a very cool bit of kit.
Speaker 6 (11:25):
It will drag all content, all content on planet Earth
relevant to your context, assimilates it presented to you in
half a second.
Speaker 3 (11:32):
Yeah, and your job as a commentator.
Speaker 4 (11:34):
People sort of say, oh, AI isn't all that.
Speaker 7 (11:36):
You ask it to generate an image and so on,
and it gives you somebody with eight fingers sort of thing,
and and you think, well, okay, you know, but you know,
if you compare where AI is now to where it
was twelve months ago or eighteen months ago and so on,
you know, you know it can now do if you ask,
you know, AI, could you write, you know, a thousand
words on Kirstarma and Rachel Reeves and their difficulties in
the style of say Danny Finkelstein, AI can now give
(11:59):
you a very good facsimile or pasti. It's sort of,
you know, it's a high quality pastiche. But of course
it is doing that because it can. It can read
all of what Danny's written before, and that is the
source material. So there isn't anything yeah, you know, and
so it's very good at that. But you know, in
our trade, obviously, the hope is that you know, people
(12:20):
will will value if you like the human but imperfect
over the artificial but suspiciously perfect. You know, I suspect
that that may be wish for thinking. And you know
it's already the case that you know, news is a
niche commodity in the same way as I think books
(12:41):
have would become a niche what they already are becoming
a niche commodity and so on. You know, that very
important to those who still subscribe, if you like, But
the numbers who do subscribe are you know, diminishing year
on year and so on, and again we have plenty
of survey evidence that suggests, you know, that young people
in particular, but also adults and on a reading less
than that they were in the past. And it's really difficult.
Speaker 5 (13:02):
You know.
Speaker 7 (13:03):
You speak to you people who teach at top tier
universities and so on, and ask them, how do your
first year undergraduates compare with those from say a decade ago,
and they say, well, they're just as bright, you know,
you know, they're you know, and they're socially engaged, and
they're inquisitive and curious and all the instruments on, but
they can't read in comparison with one.
Speaker 1 (13:21):
And I can't read as in focus reading a whole
yeah yeah, yeah, yeah yeah, or even one hundred pages.
Speaker 7 (13:27):
You know, you know, they really struggle to do the
kinds of reading that would have been considered ordinary part
of the course mandatory as recently as ten years ago.
Speaker 3 (13:37):
Okay, interesting, Ana, what were you going to say?
Speaker 5 (13:39):
Oh no, I was just going to say. I felt
alex was reasonably safe for some time because large language models,
the way they work is coming up with the most
likely words, so they sort of the most common word
that would follow another, whereas that's where your human ingenuity
comes in, as you're coming up with the unexpected.
Speaker 4 (13:54):
Well, you just have to write really bad sentences.
Speaker 2 (13:58):
In non e.
Speaker 1 (14:01):
And can I bring it back to invest briefly on
that business, is there a way to invest that gives
you exposure to the technologies we're talking about to AI,
but reduces some.
Speaker 3 (14:14):
Of the risk of being in those very big names.
Speaker 5 (14:16):
We're already starting to see the AI trade roll over,
as they say, which is people are realizing that for
most investments they have not generated any return yet, and
so doubts have started to creep in. But companies that
you know, something like an interact to investor the quoted
version could be an aj bell where they have started
(14:36):
to be able to use AI quite successfully. So there's
a layer of companies that can use their data to
service to service their clients more effectively. And actually, I
don't know if you've had any good experiences, but sometimes
chatbots for example, can actually be very very effective. But
what I'm doing for clients is still looking out for
lots and lots of different investment opportunities, and we can
(14:59):
come talk about them at the end, but there are
there are many sectors where they will benefit. There is
also many sectors that don't need to be touched by
AI to do well. So I think if you want
to be going to talk about those later or you
know so well, I mean I was thinking about this
quite what with the big trend of consolidation of wealth managers,
(15:19):
what you're finding is the big managers, say investing wrath
bones or something like that, they can't be quite as
nimble with small little investments they've had, so a lot
of them have had to reduce holdings in less so
niche investment opportunities and that's been really bad for investment trusts.
And so we've seen those this relentless selling of investment
trusts in the UK market, and that's also been to
(15:41):
do with people just dumping UK investments and even though
those investments might actually be overseas, they're still getting those discounts.
So I've been putting clients into, for example, the ABI
Japanese Opportunities Trust because there's a great deal of corporate
activity and corporate activism now in Japan and that's trading
at a discount. There's a very interesting UK investment trust
(16:06):
called Rockwood Strategic which invests in maybe ten to fifteen
microcap companies.
Speaker 3 (16:12):
In private companies or listed.
Speaker 5 (16:14):
Companies that have been given up on by the rest
of the market that are seen as uninvestable and they're
intelerates fantastic, So things like that, and I was thinking
also there's a very interesting investment trust called Coordiate Digital Infrastructure,
playing into digital assets and it's a thirty percent discount
to the asset value. So there's just really interesting names
(16:36):
out there. And the firm I work for Aubrey we
have an emerging markets fund and we think it's probably
pretty good time for emerging markets as well, which are
very decent valuations as those investor dollars have been sucked
into those big names. Small smaller companies and some regions
have just been completely ignored, and the valuations are really compelling.
Speaker 3 (16:58):
Thank you. There you go.
Speaker 1 (16:59):
Investment, No not, Michael thoughts on investments this early in
the show.
Speaker 5 (17:05):
Yeah, what I'm putting clients into really brilliant.
Speaker 1 (17:07):
Thank you, Ellen. Right, I think we have to go
on to our next quote. A we are a round
out of time, rich?
Speaker 2 (17:11):
Shall I go?
Speaker 4 (17:12):
Right?
Speaker 2 (17:12):
Here we go?
Speaker 6 (17:13):
It's only one quote, but I can read it twice.
Speaker 2 (17:19):
I can find it.
Speaker 6 (17:20):
Please, don't run out of battery.
Speaker 2 (17:21):
Oh, there we are, right.
Speaker 6 (17:22):
The interest of business men is always, in some respects
different from and even opposite to, that of the public.
The proposal of any new law or regulation of commerce
which comes from this order ought never to be adopted
till after having been long and carefully examined with the
most suspicious attention. It comes from an order of men
(17:44):
who have generally an interest to deceive and even oppress
the public.
Speaker 2 (17:52):
I thought that.
Speaker 6 (17:52):
That was topical in any number of kind of number
of windows. On the one hand, we've got the quas
I'm on a bolistic global tech companies trying to write
the rules for governments and see if you can play
catch up. On the hand, we've got the post Brexit.
Don't worry, We're not going to live with any more
(18:16):
of this nasty European regulation, and a decade later it's
all pretty similar. And then we have the new barons
of politics who are erstwhile self serving, narcissistic businessmen. I
can't think of any offhand who are writing rules which
(18:36):
we should all distrust because they in plain sight of
lining their own pockets. So I just thought that was
as a topical point of today, you couldn't get much
richer in terms of relevance.
Speaker 2 (18:51):
And now we've got in.
Speaker 6 (18:52):
The UK we have a current situation where I'm trying
to brow not to politicize it, where we have a
government that.
Speaker 3 (19:00):
Is you can politicize by the way.
Speaker 4 (19:03):
The government is.
Speaker 6 (19:07):
Talking about growth, yet its policies are divorced from the
interests of business. And if we don't solve that conflict
in terms of wealth creation and all the things that
we expect and hope to build from a society, we
will simply lose out in the global game of innovation
(19:28):
and stand living and continue this rather boring story of
woe is me in the UK about why aren't we
better than we thought we were and have been?
Speaker 2 (19:38):
So that's but there's a positive. We have lots of
opportunity with.
Speaker 6 (19:45):
Lots of wonderful academic and innovation technology in the UK.
We have some regulation UK and lack of support for
an innovation through the tax system, which is hurtful and painful.
But if we have the courage.
Speaker 1 (19:58):
But I think this is the key, isn't it That
everything that we've talked about over the last couple of
days and again today when we talk about the problems,
the difficulties exact, everything is flexible with policy.
Speaker 3 (20:08):
These are all policy mistake.
Speaker 6 (20:09):
Simple courageous simple decisions can fix and they're not short
term fixes because you need also to have the courage
of your convictions and lived with these over multiple cycles.
Speaker 5 (20:21):
If we acknowledge that to keep the bond markets calm,
we are going to have to raise taxes, where would
you let the axe fall?
Speaker 6 (20:28):
Well, that's not a very positive introduction to it. So
this gigantic double handed axe or the reality is that
you need to fish in the biggest pool and making
promises that you should never make. You at some point
you have to fess up. Income tax is by far
(20:53):
the largest pool. They should never have promised not to
touch it. In terms of we've got a we wrote
a bunch of checks that will last for two reasons,
the financial crisis, and then go nuts with COVID. We
wrote a bunch of checks we couldn't cover, and we've
now got a fiscal deficit, which is pretty nasty. You've
(21:13):
got to pay the piper and there's no point in
fiddling around at the edges. You need to deal with
it front up, and.
Speaker 2 (21:19):
You can do that.
Speaker 6 (21:20):
You can also at the same time incentivized entrepreneurship and
reward because those are quite small numbers, and this messing
around with ITHT to punish farmers or small business owners
for the sake of half a billion pounds is it
deflates the aspirations of what is about twelve or thirteen
million people in the country who are all involved in
(21:42):
small businesses, which is the entire future of the country.
So you can actually use the juice from one solution
to solve.
Speaker 5 (21:49):
The I just need to be brave and fess up.
Speaker 1 (21:51):
So it's a few points on the base rate of
income text, isn't it. That's as simple as that of
the allowance.
Speaker 7 (21:57):
Yeah, but I mean, isn't the eight also in it
an opportunity that at the moment, the v AT regime
is nuts. You know, you think of you know, the
great debate as that you know, is a jaffa cake,
a cake or a biscuit.
Speaker 8 (22:08):
This game up yesterday as well, and it's clearly a cake,
but it really matters, but it really matters for a
vot purposes, and so well, you know, so you know,
you have all these crazy carve outs and and anomalies
in v A T and so on, and it seems
that that that from a political point of view, it
seems to be that flattening all of those out, getting
rid of all of those is easier than income tax.
Speaker 7 (22:32):
It is no exemption across the except for newspapers obviously,
But I mean.
Speaker 6 (22:39):
I agree in principle, but in practice you always need
to be careful or mindful of unintended consequence. So if
we just go, you know what, let's just remove all
the v AT exemptions. That includes removing the exemptions on
interest and deposits, because that's just a VAT exemption in
financial services, it will destroy your business because all the
that on third party services will come in and you
(23:00):
you're done, probably overnight. So there needs to be a
kind of a process of managing proportionality and sequence. Even
I think on the principle, I agree on the application
you to be very careful you don't self harm as.
Speaker 1 (23:13):
Well, and the difficulty will be that actually, this isn't
going to happen because it promised, they're not going to
do this, and it's a huge promised to break. So
it is going to come somewhere else, and it's going
to come somewhere inside pensions or property or something like that.
Speaker 3 (23:26):
As you say, it's not going to be enough money, no,
but it's still no.
Speaker 2 (23:29):
Well then you we have.
Speaker 6 (23:30):
We have, So then we have tokenism and symbolism and
playing to the wrong audience. If we look at this
story and we know we suspect that it was just
chucked out in immediate to fly a kite. This thing
about capital gains on primary residents, and we're one of
the few countries that doesn't levy capital gains on your
(23:51):
on your residence, and of course if you've followed Alice,
we coould say, of course you would have capital gains
tax on, but you would never have transaction tax because
that's im said, and because what we proposed actually let's
do let's do both completely.
Speaker 1 (24:05):
Anyone, why don't we ask the audience if anyone has
any good ideas how red or wreaths can raise fifty
one billion pounds without breaking any promises.
Speaker 4 (24:14):
Sell whales.
Speaker 9 (24:16):
Anywhere you might not raise that might from.
Speaker 4 (24:24):
In the old days you would actually you go to war.
Speaker 6 (24:26):
Yeah, well you're to go to choir somewhere the rules.
Speaker 1 (24:31):
Seriously, has anyone got a thought on anything that isn't
tax that could be taxed?
Speaker 4 (24:37):
It's very hard to think of something that isn't.
Speaker 3 (24:39):
Taxed that that's really the question.
Speaker 5 (24:40):
It's impossible thing of anything that doesn't tax. Did you
enabled more licensing of north Sea oil and gas? Your
tax take could increase from the tax revenues.
Speaker 3 (24:49):
I think that breaks another promise.
Speaker 6 (24:52):
The biggest pools are an income tax by a country.
Everything else is sort of noise option.
Speaker 4 (24:57):
They're worded on National insured.
Speaker 6 (24:58):
Oporation tax, but it's not the best and if it is,
unless you you double it, which is probably not a
great great look up.
Speaker 1 (25:04):
Update update update, We're going to have to move and
move on, Alex.
Speaker 3 (25:08):
Why don't we do your quote. Was it actually with
very nicely?
Speaker 4 (25:11):
Oh yes, yes, yeah, well if I can read.
Speaker 3 (25:12):
It, I have terrible handwriting.
Speaker 1 (25:14):
I've written his quote down for him, and so it
may not be accurate.
Speaker 3 (25:18):
It may not be accurate.
Speaker 7 (25:19):
I think this is something that ought to be displayed
on you know, sort of motorway sciences. You're on the
A one or the A sixty eight at the Carter
Barnes on as you're crossing into Scotland and so on,
that this, this should be on the big, big notice board.
And so virtue is to be more feared than vice
because its excesses are not subject to regulation of conscience.
And I think that that would give people coming to
Scotland fair warning about the land they're about to enter,
(25:43):
because you know, in that one sentence, Smith captures an
awful lot of Scottish politics, not just right now, but
historically as well, and so on, the sort of humbug
and hypocrisy that has been a defining feature I would
suggest of Scottish public life for centuries. Some examples please, Yeah,
(26:05):
you know, obviously you know, off with Arsen's on why
do you hate Scotland? And I mean the first answer
is obviously for the money. But thereafter you know, one
cut against down to well, the people and the weather
and so on.
Speaker 4 (26:19):
But you wanted positive.
Speaker 1 (26:22):
There isn't anything positive you can come up with that.
But I think, I think that this is one of
my favorite quotes because it really and it feeds so
well into everything that's happened over the last decade. This
idea that you can say something that sounds good, sounds nice,
and no one can possibly oppose you because what you've
said sounds good and the unintended consequences of it, I mean, net.
Speaker 3 (26:41):
Zima, of course, is the anthletye Cklask of this.
Speaker 1 (26:43):
The unintended consequences of the wonderful thing that you've said
destroyer lives across the board. But because anyone who disagrees
with you is evil, we don't care about those people. Well,
and this is something that has defined politics in Scotland
for the whole time I've lived here, and is beginning
to or has also find quite a lot of political
engagement in other places as well.
Speaker 7 (27:03):
Yeah, I mean, you have a there's a a it
happens elsewhere as well, of course, but it is a
particularly virulent strain of sort of humbug in Scottish politics
and on, you know, and that that by presenting ourselves
as being a more moral people than the great Satan
to the South, you know, you know that we we
we we demonstrate our moral superiority and so on. And
(27:25):
you know it's the late John Smith AND's on who said,
you know that we are more moral people in an
interview with John Lloyd of the Financial Times, and that
was what, you know, nearly thirty what more than thirty
years ago, So it's not a particularly recent innovation, this
sort of thing, but you know, you you definitely have
it in spades in the last ten years in particular
as you say it, so you know, it's the sort
(27:46):
of thing you know, you launch a ferry with painted
on windows, and that is you know, it's the idea
of a fairy serves for an actual ferry, which you
know doesn't really work if you actually need to to get.
Speaker 4 (28:03):
And you know, you know the.
Speaker 7 (28:05):
I mean the quote that Richard's talking about the the
you know, the sort of sense of regulatory capture. And
some people are often suspicious about, you know, business interventions
in politics before precisely that reason self serving, et cetera,
et cetera, et cetera, and so but I think we
could extend that to the whole of the so called
third sector. Uh and you know charity so called charities
and public sector unions et cetera, et cetera, et cetera.
(28:27):
You know, who are often presented as being sort of
disinterested or impartial observers and so on offering their solutions
and some when they are obviously just vested interests just
as much as big businesses. But they have a room,
they have a seat at the table in Scottish public
life now to a degree that business certainly does not.
Speaker 4 (28:47):
And you know, some.
Speaker 7 (28:48):
Of this is about mood, but but you know, it
does have a real impact. I think you know that
if you have a you know, if you're speaking to
people and so on, you do you want to invest
in Manchester in Glass And I'll say, well, Andy Burnham,
whatever you may say about Manzoor and he wants our money.
You know, who do we speak to in Glasgow about that?
And where's the general atmosphere of seeing the private sector
(29:12):
as a multiplier of good things rather than just something
to be milked if you like. For the more virtuous
public sector, which has been the sort of motive.
Speaker 4 (29:23):
I think of the Scottish government.
Speaker 7 (29:24):
For the last ten years, in particular, the private sector
and industry and so on exists to fund the more
morally virtuous parts of society, which are not more morally
virtuous at all, but are presented as such.
Speaker 5 (29:42):
And one of the really interesting things I was just
going to say, I think that since the independence referendum,
companies have been scared to speak out about so many things.
And I also sit on I'm a trustee of a
think tank. It's a politically independent think tank. We do
good research around education, around health, and we'd love corporate sponsorship,
but they are scared to sponsor or to give us money, even.
Speaker 1 (30:07):
Though because the very neutrality of your research makes it
effectively criticism of the government.
Speaker 5 (30:11):
Yeah, And so they're too scared to be listed as
a donor.
Speaker 1 (30:14):
Yeah. And there is a very interesting that you know,
we have these the Social Attitudes Server, which comes out
for the UK as a whole and for Scotland. And
if you look at that survey over every single year,
the English and the Scottish have almost identical attitudes to everything,
almost that Nonetheless, this idea that there's a difference in
attitudes towards various social things. It persists even though it's
(30:37):
demonstrably not true.
Speaker 6 (30:38):
I just just not that I don't love Andy Burnham,
but just as an example of commercial development, innovation, future technology.
So I think I'm one of the largest fintech employees
in Manchester. I've got about a thousand people there. We're
doing all of our AI stuff. Despite Manchester's behavior, and
(30:59):
despite his behavior, he's brought nothing zero. In fact, he's
brought reasons not to be in Manchester. The reasons why
we're in Manchester is the talent pool and the sourcing
of their talent from the universities around Manchester is stable,
developing and there's inward migration of talent. That's not a
(31:22):
political thing. That's as something you because you're The steps
you take as an enterprise are about what next move
you make, and everything's around competence, and competence is all
about people. So back to the Glasgow contrast. I'm be
a super big fan of Glasgow or Edinburgh, but those
choices and when you look at that decision making process,
(31:45):
you're not it's some expedient kind of some Manchester's got midas,
you know, the midas Manchester inwards doesn't actually do anything
apart from do posters and stuff. The what what matters
is your connections with with institutions to support your development
into the future. Whilch show the universities and the socize
(32:05):
of your competitive group because you want to have talent
mobility between competitors. That's the important stuff. And I don't
see any reason why. I mean for the future of
Scotland or for a city or for the UK. Those
important connections about the future, which is about the future skills.
They need to be right in the middle of the conversation,
(32:26):
whether one politician or another makes hay out of it
and self promotes or not. And he's quite good at that.
It's not the same thing as actually having the right
programs in the right toil base.
Speaker 1 (32:36):
I'm looking for that great Anna Smith quote which I
can't find, about how most economic activity is carried out
and is successful despite government and regulation rather than because
of it.
Speaker 3 (32:46):
I can't find it, but you'll all know it. It's
one of the best ones. Sorry I interrupted you, Alex.
Speaker 7 (32:49):
You know, in the modern world it seemed to be
you know that it's very particularly in a small place,
and this is a small place to get very sort
of self obsessed and you know, and you know, one
of the features of Scottish politics in the last twenty
five years and so on is the narrowing of frames
of reference. And so you know, half a step ahead
(33:11):
of whatever's happening in England, you know, Harad's banneck burn,
half a step behind our calamity it's flodden. But is
England actually the appropriate frame of reference? You know, what's
happening elsewhere in the world, and we're very very narrow minded.
I think about not actually looking at what's happening elsewhere
in the world in terms of larger, longer term trends.
(33:33):
And you know, to some extent you could make some
of the same criticisms of the UK more generally, I
think in this regards on that when you look at
you know, international trends, you know, what are we doing
here and how does it marry up with what is
happening elsewhere?
Speaker 4 (33:47):
And you know, it's very very challenging.
Speaker 7 (33:49):
And I think that again, you know, we we we measure,
the things we choose to measure are often the wrong things.
So when it comes to say, like the you know,
the attainment in schools and so on, which used to
was supposed to be eliminated by next year. It's on
a spectacularly foolish promise because it could never be delivered.
But the way to narrow the attainment gap is to
(34:11):
ensure that the people at the top do less well.
Speaker 4 (34:14):
Then job done.
Speaker 7 (34:14):
The attainment gap has been eliminated because nobody is getting
an A grade anymore. So you know, you present that
as a success if that were to happen. But if
you look at you again, dispassionate international evidence, you see
a steady decline in educational achievement in Scotland over the
last twenty five years, predates the SMP. But it's a
long term problem. You know, the piece assessments and various
(34:36):
other international tests that show you know that in general,
particularly in maths and science and so on, doing worse
by an act at a constant absolute standard. And so
we measure the wrong things and then we draw the
wrong conclusions from the wrong things that we measure.
Speaker 1 (34:52):
I mean, no one's given me the option of infee,
Nicholas says in myself, So I can't ask you.
Speaker 4 (35:00):
She doesn't give I don't want to come on.
Speaker 3 (35:02):
But you know she's got a new book out.
Speaker 1 (35:04):
And one of the things that she always has heard
a lot of her tenure was that she wanted to
be judged by education.
Speaker 3 (35:08):
That would be her legacy.
Speaker 1 (35:09):
Right now, that's been such a monumental failure that we
don't really need to go into.
Speaker 9 (35:13):
It a lot.
Speaker 7 (35:14):
But what you didn't want to be judged by, you know,
I want to be judged on this, says politician, confident
she will not actually be judged on this.
Speaker 1 (35:21):
What do you think that her legacy actually is a
very connected toscross politics in a way that I'm not
as obviously she was in power for a long time
since just left a legacy.
Speaker 3 (35:29):
It's clearly not an education.
Speaker 4 (35:30):
What is it? Well, I mean, I mean political.
Speaker 7 (35:34):
You know, the half life of politicians is much much
shorter than they tend to think, and you know that
their legacy, such as it is, tends to be very
ephemerals on you know, the you know, they disappear and
they're replaced by the next person, and life trundles on,
and you know, in terms of substantive policy achievement, you know,
(35:55):
it's really quite difficult to see what her long term
big pick your successes have been. I think you could
make a case and regardless of whether you happen to
agree with the policy or not. And on that things
like the Scottish child payments on you know, cash transfers.
So you're going to say baby baby boxes is a nonsense,
I mean, you get a terrible poem and you know,
(36:17):
a terrible poem.
Speaker 4 (36:18):
I mean, you know there's one of the problem.
Speaker 7 (36:20):
Poetry has been a growth business in Scotland in recent
years and that's something to be deplored. But you know,
you could make an argument that cash transfers to to
to poorer families and so on has a substantial impact
on those poorer families, regardless of whether you happen to
agree with all the sort of social security decisions have
been made in recent years or their long term sustainability,
(36:42):
et cetera, et cetera. I think you can make you
can make a reasonable case that that is is a
genuine point of difference in terms of where we are
now compared to where she were, where we were before
she became First Minister. But in broader terms in health, education,
the economy, big ticket items of which and her government
had responsibility and on you look at it's a history
(37:06):
of missed opportunities in many ways because you know, she
had the ability, particularly in twenty fourteen when you know
she was super popular because she was not Alex Salmond
and people wanted to move on and have a fresh start.
Speaker 4 (37:19):
You know she had.
Speaker 7 (37:19):
She then actually had an opportunity to do big things
in education, in health, et cetera. But she duck those
challenges because fundamentally she's not interested in ideas or reform.
And you know in the end, you know, you read
her books on and it's full of this sort of
faux humility. Yes, yes, very Presbyterian type thing of you know,
(37:42):
I'm always confessing or you know, confessing my sins and
my mistakes and my weaknesses. Look how marvelous I am.
You know other politicians don't have the courage to do this.
Speaker 3 (37:53):
Read her book? Has anyone read her book? This is
why sin Adam Smith. Isn't it now? Anyone bought it
downloaded on the kindle?
Speaker 4 (38:00):
No, it's possibly not the room for Niccola then, is it.
Speaker 5 (38:04):
Yeah? But yet the astonishing thing is that on current polling,
the S and P or on track to be the
largest party in Hollyrood next year.
Speaker 7 (38:12):
But remember there's a big diff that's true obviously, but
but there's a big difference between an SMP that is
winning forty five to fifty percent of the vote and
one that is winning thirty three to thirty five percent
of the vote.
Speaker 1 (38:22):
Right, listen, we have a special guest, Dominic Dominic. I
want you to pop up and send except to Anna
for a minute. Because Dominico does great quotes and he's
often on the panel on the stage.
Speaker 3 (38:31):
Today we don't have enough.
Speaker 1 (38:32):
Microphones, so I'm going to bring him up special chair,
special chair for a special guests, different everyone else is.
I'm going to get one one quote from Dominic and
I want him to talk quickly about his new book,
which is on a subject there's very dear to all
our hearts.
Speaker 2 (38:46):
Well, thank you very much, Mary, and hello everyone.
Speaker 5 (38:49):
My name's Dominic dom Would you like me just to
hold the book up?
Speaker 4 (38:52):
Yeah, you do that.
Speaker 2 (38:53):
That would be wonderful than you under all your scenes.
And I nearly went off, so we can consider myself lucky.
Speaker 9 (39:03):
So the quote that I have is from Wealth of
Nations and it is goods can serve many other purposes
besides purchasing money. But money can serve no other purpose
besides purchasing goods. And in this instance he's referring to
the medium of exchange, thank you, function of money. And
(39:28):
there are actually three functions of money, to be a
medium of exchange, to be a store of value, and
to be a unit of account. But what has happened
to money? I've always argued that money should be independent,
and because money is no longer independent, it's the issuance
of governments. Money has become on top of being a
medium of exchange, store of value and unit of account,
(39:51):
it has become a tool of government. And because it's
become a tool of government, whether it's the United States
using its dollar as a sort of carrot and stick
to get other nations to behave themselves, you know, the
most famous recent example being its confiscation of all of
Russian assets using its dollar as a.
Speaker 2 (40:08):
Tool of war, or in the UK we just see
it repeatedly.
Speaker 9 (40:12):
Money has become a tool of policy, you know, from
the zero interest rate policies which followed the financial crisis
enabling the bailout of the banks, to the systematic debasement
of currency that's been going on for over one hundred years,
and the consequences of this have been quite terrible for society.
(40:37):
And just by way of example in the book here
I show consumer prices in the nineteenth century when money
was gold, when the gold sovereign was the pound coin,
and now take six hundred and fifty pound coins to
buy the old pound coin. Gives you an idea how
much it's been debased by. But if you look at consumed,
we came off the gold standard to print the money
(40:58):
to pay for the war, the Napoleonic Wars, and we
went back on the gold standard in eighteen twenty one,
and between eighteen twenty one and the eighteen fifties when
the California gold rush. In that thirty year period, just
one generation prices more than half. They came down by
about sixty five percent. And what that meant is that
(41:21):
everyone who was earning money, who was earning a salary,
was able to keep If you think, when you work,
you're expending energy, and what you receive in the form
money is stored energy. And everyone was then able to
keep their stored energy. They didn't have to didn't lose
its value, its value increased, and they were ever to save.
And once they covered the basics, which were food, clothing,
(41:43):
and shelter. They were able to invest in self improvement,
so that by eighteen seventy, before education became compulsory and
by statute and was provided by the state, I think
ninety six percent of the country was literate. And we
just saw the emergence of the middle classes that just
didn't previously exist or to nothing like the same extent.
(42:05):
And when the value of your money increases over time,
it totally changes the dynamic of society.
Speaker 2 (42:12):
And we compare that.
Speaker 9 (42:13):
I've got a table here and it shows prices in
nineteen seventy compared to prices today, and we see, for example,
a house is now seventy times more expensive than it
was in nineteen seventy. Salaries have only gone up twenty times.
And so because houses have gone up three and a
half times more than salaries, we now need two people
(42:33):
working in order to and a lot more debt to
buy the same house that was easily affordable seventeen years,
fifty or sixty years ago.
Speaker 2 (42:41):
Cars they should have come down.
Speaker 9 (42:42):
In price because we outsourced car manufacturer to China, we
got better at manufacturing cars. But because there's so much
finance involved in the purchas in the car they're up
thirty or forty times. Pint of beer, like it's thirty
times more expensive. That's largely because of the increased taxes
that go on as well. A pint of milk twelve
times more expense, gallon of petrol twenty times more expensive.
(43:02):
If you look at all these things in gold terms,
they're all cheaper than.
Speaker 2 (43:06):
They were in nineteen seventy.
Speaker 9 (43:08):
And a washing machine, interestingly, is only four times as
expensive as it was in nineteen seventy. And that's the
partly because we just used cash to buy washing machines.
We've outsourced their manufacturs to China, we've got better at
making them and so on.
Speaker 2 (43:21):
And then you look at the price of a phone call,
and of course in the.
Speaker 9 (43:25):
Nineteen seventies, when I was a little boy, you would
pay ten p for a local call.
Speaker 2 (43:29):
That lasted three minutes.
Speaker 9 (43:31):
Now we can have a video call with anyone anywhere
in the world and it costs nothing.
Speaker 2 (43:34):
And that's the deflationary effect.
Speaker 3 (43:36):
That's the upbet.
Speaker 2 (43:37):
Yeah, that's the good. That's the defense of technology.
Speaker 9 (43:40):
And so my rant is basically what terrible things we've
done to money and the result, like when you say,
why do people have more kids. The most commonly given
answer is I cannot afford to have more kids. So
we're starting families later in life and we're having smaller families.
And so the result of the basement of currency is
(44:01):
literally the depletion of our people.
Speaker 2 (44:04):
And it's terrible.
Speaker 1 (44:05):
And the hedge against the debasement of our currency is
to own more goal.
Speaker 2 (44:08):
Absolutely.
Speaker 9 (44:09):
One last thing we were talking about how the government
is going to pay for all the various things it
pays for inflation is taxation. Without legislation, we're sort of
forty five percent of GDP taxation, but if you in
factor in inflation, we're above fifty percent. And the way
that a lot of this is going to be paid
for is further debasement of the currency.
Speaker 7 (44:31):
In Scotland, it's fifty five percent of GDP is public
spending in and in and for Scotland.
Speaker 1 (44:37):
English taxpayers are covering the difference.
Speaker 7 (44:38):
Well, that is the thing, you know, I mean, Joel
Barnett is the patron saint of Scottish politicians on because
I mean he's worth fifteen billion pounds a year and
you know, you know, the SMP's policy technically is to
have full fiscal autonomy. And on, and you know, like
many things and on, be very careful what you.
Speaker 3 (44:54):
Wish for for the fun of it, Richard, you had something.
Speaker 6 (44:59):
Sorry, you know, you're almost slid into gold being a
proxy for money. But because as a means of exchange
is no use, No, it's a store of value.
Speaker 9 (45:09):
You tended to use silver and copper and nickel with
a more common medium of exchanges than gold, because there's
just so much value in Like a gold sogign would
be about the size of the two peer a little
bit smaller, and that's six hundred and fifty pounds. So
you would use gold for high value transactions horses and suits.
Speaker 6 (45:28):
Well, I think we talked the other day about there
was a transaction done where they paid for it in
gold and it was three tons and they had to
fly the gold in and flying three tons of gold
actually is quite a bit of a thing. Yeah, Russia
bought a load of drones off Iran, and because both
nations have been shut out of swift, they paid for
the transaction in gold, and so Russia flew three tons
of gold to Iran to pay for drones. I mean,
(45:50):
how impractical is that.
Speaker 3 (45:52):
Yeah, I'll tell you a lot about gold doesn't it.
Speaker 2 (45:53):
It does, but my subject was money and gold. Gold
function is more store of wealth than the appreciate.
Speaker 1 (46:00):
You should know by the way that Dominic was on
the panel yesterday, and yesterday he had some silver coins
which he handed around and clearly he doesn't come back.
Speaker 3 (46:07):
This is not a high trust audience.
Speaker 2 (46:10):
That's I have it here. That's silver dollar, the old
the old dollar. And it was a day's wait, wait
for a working man.
Speaker 9 (46:16):
And it's about an eighth a eighty percent of an
ounce of Silbert.
Speaker 3 (46:27):
Thanks for listening to this week's Marryn Doalk's Money.
Speaker 1 (46:29):
If you like our show, rate review, and subscribe wherever
you listen to podcasts. I keep sending questions or comments
to Marror Money at Bloomberg dot net. You can also
follow me in John on Twitter or x I'm at
mariness w and John is John underscored Steppek. This episode
was hosted by me Marin Zumset Web. It's produced by
some Asidi sound designed by Blake Maple's Special thanks to
(46:49):
my guests, to Blairbarrows and to all the rest of
the team at Pama House.
Host
Merryn Somerset Webb
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