EP 54: The Weekend Of Mistakes (with Leila Johnston)

0:00Welcome to the Library of Mistakes, changing the world, one mistake is a time. And welcome to a shelf life special fresh from the delightful Hey Castle in Hey On Why. I've just had a fantastic few days down south at the weekend of Mistakes, a festival organised by Hey On Why locals at the Economic Intrigue in Prezario's, Paul Great Batch and Alice Sherwood. In fact, they were guests on this podcast back in January, so you can go back and listen to that if you want a little bit more context about all of this. And what an extraordinary weekend I have had. This is the third weekend of Mistakes and the biggest so far with more than 20 sessions across three channels and two sites. And the sessions were about economics, mistakes, past, present and future with plenty of focus on how to avoid them. Plenty of voices you'll recognise if you've been following

1:02the Library podcast or coming to our events for a while. As well as attending, listening and taking notes, I've tried to record some bits of the sessions and corner some people as I saw them around. There will also be official recordings and films of everything, so keep an eye out for those popping up soon. Do follow the weekend of Mistakes on everything you can find them on, especially LinkedIn. And hopefully we'll get another episode up in the near future of this podcast with some of the proper recordings on the professional microphones. But for now, this should give you a flavour of the weekend and maybe wear your appetite for more. And it has been my great pleasure and privilege for the last three years, the first three editions of the weekend in Mistakes, to be called co-director. I've said to Paul often and boringly that it takes three years, or the founder of Glastonbury Festival, said that it takes three years for any festival to find its identity.

2:07I'm looking around at all of you here and the huge variety we have of speakers and attendees, I think that we have found very much the identity that Paul has described. And it occurred to me that just before I thank all the people who've been involved in putting this all together, just to pay a little bit of tribute to the sheer variety of people here. One of our first-time speakers came up to me just now in the Green Room and said, I'm quite an eclectic, but I'm just, and I said, yes it is, but I think eclectic place isn't it? So I'd like to just pay tribute to that, looking around the room in our Joggenbuster session, terrific session that we just have now. I saw just, this is a selection. I saw professors, I saw financiers, I saw entrepreneurs and podcasters. I think I saw

3:13a former member of the cast of RiverDance. Journalists, scientists, classists, people who know how to help you go bankrupt in the best possible way. Clerics and campaigners, politicians and pundits and much more. I was going to say heaven knows or brought you to this small town, which I can all go to, hey, but we know what it is. It is the intellectual stimulation and the quest for knowledge that Paul has described. So the big, big thank yous and there are many. I think I want to start again as we always do with the library of mistakes, with Russell Napier, who is the dawn. I think the OG, in a sense, is a phrase that I think only are in touch, will understand the OG and his states and his consiliary. Thank you,

4:14thank you for leading us down the path of the states. Well the event kicks off quite gently on Friday afternoon, with a Joggen debunking session chaired by our very own David Clark and he was ably assisted by Paul Greatbatch and Theodore Asemic in adjudicating an audience game of best definition with terms drawn of my hat ranging from debt to usury and we were all supplied with a quantum of bollocks glossary printout to help us get through the rest of the weekend, which is much appreciated. This is the first event of the, it is the first event, isn't it? So it's a bit like the curting, I think, at the winter of the day, it's really for the hard core found. So you're already welcome to be here. It's the jargum booking event. And as you know, finance

5:20is full of jargum. One of the ways to avoid making mistakes is to lure your jargum and try and overcome your jargum and speak in plain language. And just to show in the, I think it's fair to say in the finance industry, there is a tendency for people to use jargum as a way of kind of, showing off even what I wrote to Bloomberg a while ago, long time ago, and we used to explain everything. We used to explain edge points. Whenever we talk about edge points, we always put in a subordinate clause to say what a edge point was. I'll keep these three going to complain. They said, why are you explaining this? We don't need to be told what this is. But actually, it turns out they did because 2008 happened to happen. So then I went to the big debate, has the invisible hand led us astray, where Monica is a geeky, Baroness Alison Wolfe, and Jesse Norman MP provided some very different perspectives on and definitions of Adam Smith's famous trope. We're Jesse Norman running

6:23his own independent university. There was chat about the benefits of apprenticeships. And the common theme was power with Monica pointing out that people don't feel left out when they have no money. It's more when they have no choice, which can carried on actually being a bit of a theme for the whole weekend. Here's Baroness Alison Wolfe. Don't have really good regulation of what is being done. What you will very quickly start finding is that you have people setting up a house who will say, you would agree if a degree of was what you want. And you will find that there is actually, I think, genuine downward pressure on standards, because if what people need is a degree, they let them have a degree. And if people want to do research or they want to have an easy life or they want to do other things, there is a certain amount that you internalise. But I would say that the less of human behaviour is the one that Adam Smith learned from the majority of lazy

7:29Oxford docks, which is that you rely entirely on internalised moral standards at your peril, that you also need incentives for people to behave well, and rewards for people who behave well rather than all the reals going to the people who behave badly, free ride and just generally intelligent people. The networking continued into the evening and the next morning there was a discussion on stable coins, a tremendously complicated and involved subject chaired by Paul Great Batch with Isabella Kaminska and our own Russell Napier, the keeper of the Library of Mistakes. And I hardly took any notes, so this is going to be very backwards and wrong, but bear with me. If Bitcoin is digital gold, then stablecoin is a kind of digital dollars, enabling mobility between countries and currencies, Isabella mentioned the Medici model, which I think suggests the economic power sits with the issuer, and stablecoins can escape their own home country, supporting the home country system from afar. Obviously this means illegal activity is

8:33a concern, and Isabella talks about this possibly being more so with stablecoin than it is with the dollar. Russell pointed out that China has banned crypto trading as a country which likes to keep everything inside. It's not too surprising, but also hasn't tried to ban everything. And stablecoin isn't the only way that money is escaping because Paul had some great stats on notes being printed and increasing rate in the UK mainly for use outside of the country. The speakers noted that governments around the world are trying to invest locally, but for that we need savings and these are in short supply. So you're getting a sense of how involved all this stuff can get. Russell reminded us that in 2023 the Library of Mistakes mistake of the year award went to Silicon Valley Bank, an institution that managed to go bust whilst holding a risk-free asset. Next I went to a panel called Hunting for Growth, Cambridge, and get its Mojo back, where

9:37we heard Luke Johnson, Chairman of Gales Bakery, so Martin Donnelly, part time advisor to the Foreign Secretary on the UK Economic Diplomacy, and campaigner Dr Lawrence Newport agree and respectfully disagree about everything in the most fascinating and spirited way imaginable. It was fantastic. I didn't actually get in, so I had to watch it from the corridor so there's no recordings from this one, but I did take some notes. Essentially Lawrence was exasperated about the expense and waste involved in progressing infrastructure in the UK and everything else that we try and progress in the UK. Martin talked about how policies can deal because of short-termism and pointed out for example how impossible it would be to build motorways nowadays. Luke Johnson thinks we will only take action if we have a serious crisis in this country and that we need to accept the need to trade off and scrap net zero, and if we don't bulldoze through nuclear he says there's a real risk that the lights will go out. Martin wonders why the infrastructure is so bad and so

10:41sclerotic around the southeast, and Lawrence blames excess consultancy spending for a lot of our issues, while for Luke's safetyism and risk aversion are the problem that is currently blocking innovation in this country. Then we had a lovely look back to Roman society in Victorian times thanks to Professor Paul Cartelidge and Ray Parman who you might know from the Library of Mistakes walking toward he organised and he's a very well-known author based in Edinburgh. And we learn that financial failure has always been treated as a kind of moral failure and subsequently punished with some sort of restriction on freedom. Charles Dickens himself was imprisoned for debt along with his wife and most of his children. I think we all agreed that imprisoning debt is obviously silly and I want it expensive. The nature of debt has changed as well as we discover on a different

11:44panel we tend to owe money to big organisations and the government instead of to individuals, but what does it mean about our society that we continue to frame debt as a criminal, intentional act and punish it in the same way? I caught up with Ray Parman soon after he had been on that panel about the debt as prisons. I'm here at the Weekend of Mistakes for the second time. I was here the first one two years ago and it's great to be back and it's incredibly restored castle in Hale Wai. At this time I was talking about debt as prisons, the history of debt as prisons. I didn't know anything about any of that. It's fantastic discovery and the fact that people would get married and you know that you can do all these things from within your prison and then you can have a kind of house arrest situation in a building and it didn't sound too bad, sort of Epstein style semi-prisoned. Well Gregory Macof, who is hosting an event later today,

12:54came up to me afterwards and said why didn't we start a debt as prison now? We could race and venture capital. It was a great idea. But certainly there are a lot of debtors around, but whether they would pay to be incarcerated, I doubt. Did you see anything yesterday that you particularly enjoyed? I saw lots of things. One of the problems here is that there are so many good things that you would want to go and see and you have to make choices. So one of the most interesting and unusual events was Annie of Shorthouse talking about her book on how the Mafia took over all the gay bars in New York which is something that never occurred to me before and she'd done a huge amount of research and really fascinating stuff. Yeah, I went again, I went to that one and I loved how ambiguous it was. It really felt like the Mafia sympathized with the people they were

13:58protecting. It wasn't a pure extortion, it's a little bit more crazy. I suspect the particular Mafia boss who ran that side of the business was himself gay, but... Yeah, that was the suggestion. Well, the fact that he moved his office into the Stonewall Cafe rather sort of gives that away. You're going to say hats off to the Mafia, but maybe that's not a very good thing, but they had open minds. As long as they could make money out of it, they didn't discriminate against people, which is more than you can say for the rest of society. That's true. And the next morning we had a panel asking whether Japan was or was not an economic basket case, which is actually quite a reasonable question the more you find out about Japan as I'll summarize in a moment, but it was our very own Russell Napier again this time with macroeconomist Russell

14:59Jones and one of the weekends, most in demand moderators, Bloomberg's Merin Somerset Web, also a friend of the library, of course. So in the off-chance you don't know, Japan has been in a kind of weird economic status for a few decades now. It struggled with desperately low interest rates since the 90s, and with the resulting wage drops and growing piles of cash creating a vicious circle, as well as a cultural tolerance to corporate debt, the country's historic debt burden has got worse and worse. But global inflation went berserk after all the Covid supply chain mess, money printing, etc. And the Bank of Japan hiked rates in 2024. For the first time in 17 years, food prices have zoomed up recently. And of course, as the panelists say, inflation is not popular with aging populations. But Russell Jones and others believe the Covid effect may be a good thing for Japan's economy with prices pushed up, inflation targets may finally be

16:00met, and perhaps wages will get a kick up the bottom as well. And this was actually after the bubble had began to deflate, and he was talking when he said, oh, I think the Nikkei will be at a hundred thousand within five years. I don't think, boy, that's a strong view. I'm not quite sure how that's going to work out, and we're still waiting. But it gives you an idea of the level of optimism, which was around it, next day. And the story was so strong. And during that period, I'm sure there were exceptions now, but Russell, right, you probably saw it, didn't you, right? From you, it's going to happen. I was a very young man. Lots of people saw it. I mean, lots and lots and lots of people saw it. And no foreign fund manager, I'm aware of, ever had a market waiting in Japan, a famously John Temple, and I think he sold in 1985. And so I arrived at a really different September 8th, and I was told this thing is grocery other value, but we don't know it. You know, it wasn't the secret. No, maybe in Japan, there was a degree of enthusiasm, extrapolation. And most of the foreigners I knew also, this is a bubble that's going to end,

17:02but they had been saying it for three or four years. That's the problem. It wasn't that you think to say Japan was in a bubble. I mean, I handled hard. I have to say that, like most for it, so though there was this general tendency to say, I'm not sure this could go on, we still typically underestimated the degree of adjustment that came through, and I certainly did, right? I don't think I really understood quite how serious the situation was until 1996. And I wasn't alone in that. Well, the one that I remember getting it completely about is Peter Tasker, you remember? Yes. So I remember at some time in the first quarter of 1990, the UDI, I think, in Christmas Day, 1989, Peter Tasker was with maybe climates of that stage, and the analysts, the salespeople brought him around and said, look, this is not the high-speed, this is just Peter, just Peter sort of fantasizing. So just bad with him. And the market was at 40,000 and he said, they'll bottom up like 12. And everybody laughed, and you know, it wasn't, you know, too far. How many model these numbers is the right level? It was going to be 12,000. So

18:07it's not, you know, in a bubble, there are some people who say, but everybody ignores them because they've been selling it for years. And what were the bubbles at the end? It was monetary policy, right? Yeah, it was the bank of Japan brought in a new government towards the end of 1989, and he was given the job of trying to manage this, you know, through certain controlled matters. And it was Yasuhi Mieno. Mieno's sound had been at the B.O.J. at all his life. He'd only ever looked at the domestic economy. He didn't speak much English, and he was known as the Prince. That's what he was referred to within the bank itself. And the sense at the time was that this would be the Japanese Volkrat. He would do that kind of job, drive the excess out system. And he did, but unfortunately, like a lot of central bankers, he went on fighting that war for rather too long. And yeah, he squeezed a lot of the excess

19:10is out, but I mean, I remember by 1992 thinking, boy, you know, I think they've gone a bit far. Because that stage of monetary growth went negative, and I'm not a monetary economist by any means, but I think that's a very powerful signal. And I don't think it's probably about time that they aren't wowing some of this. But the B.O.J. was very reluctant. It took the Federal Reserve just over a year to get rates to zero during the global financial crisis. It took the baggage of Japan nine years. They were still fighting that last battle for an awful deal long time. Next, it was over to the cinema for a fabulous discussion between the festival co-creator, Alice Sherwood, and Anja Shortland, a professor of political economy, has been researching the relationship between the Mafia and Gay Nightlife. From the 50s to the 70s, the Mafia controlled many of New York's gay bars, including the iconic Stonewall Inn. The state liquor authority

20:13refused licenses to most gay venues, and those at state open were routinely raided. Remarkably, the mob stepped in to fill the gap, paying off police and eventually selling LGBTQ people access to semi-safe social spaces. And it's increased in the 1950s by the 1960s. It was ubiquitous. And then with gay liberation, it disappears. And by the 1980s, the Mafia has pretty much moved out of this market. So, can you set the theme because what surprised me was that earlier in the 20th century, things were much more liberal in our, probably the wrong word, but LGBTQ people as we recall them now, weren't marginalized and picked on. And then something happened in the 50s

21:14post-war to change the tone and tenor. Was that when it happened? Did I think of attractive characters like Tom Carpick? Yeah, so they were always criminalised, but a man of enforcement and the viciousness of enforcement really changed. So, it started in the late 1940s as the United States moved into the Cold War scenario with the USSR. And Senator McCarthy was made this allegation that the US bureaucracy was absolutely infiltrated by communists. And then somebody said, well, show us the communists and they're only two, so you kind of pivoted at this point and said we don't need to worry about the people who are already communists. Now we need to think not of the red manness, but of the lavender menace about people who are different, who are

22:20non-heatronomative, who are, who could be bright and extorted and turned. Well, my name is Emil Kalinowski and I am from the Cayman Islands and this is my third year coming and I've enjoyed it every single year and this year is better organized than ever. And what have I enjoyed? Just the eclectic nature of all the of all the topics just right now before this, I was listening to something about state capitalism and government corporations working together in the end of the Tatcher Reagan revolution and how we're returning to something that had occurred earlier and it had always been present in different, uh, different, uh, what would we call it, um, levels of involvement by government. And then I just went to a presentation on the mafia and queer life and the mafia's protection of gay nightclubs in 1950s. Amazing, what a, what a variety.

23:33And then it was Sunday and I went to the Death and Mental Health panel where did Asco's own Mary Duffy was joined by Professor Rachel Jenkins along with Malcolm Hurlston's CBE and Jenny Mouse School from Power Citizens Advice Bureau. They talked about how the death scene has changed in recent decades and household deaths are the ones that now plague people, things like energy or ears or TV licence court cases. There were some really interesting questions when the panel was directly asked if they would ban gambling given the choice to response was of course a unanimous yes. My name is Mary Duffy, I've conned on from sunny Edinburgh to sunny hey, um, delighted to be here the third year that I've been here and I think the best yet. So I hope you've all had a great time. Um, in this session this morning it's a bit of a shift from what we have been listening to over the last day and a half. There's been a lot about geopolitics and macroeconomic factors, even ancient Greece, fascinating, um, stuff on death.

24:38It's much closer to home today. We're talking about individual impacts of death on mental health and the mental illness that can result from having a unimaginable death in your life and we're very fortunate to have three people on the stage more than two more than what was advertised, who can speak with great authority about this and I hope you will really enjoy and have some good questions. I'm sure you're in this room because this issue speaks to you in some way. So I'm looking forward to a really good conversation today. What we found was this big association between death and mental disorders and it was between death and um, and all the different mental disorders. So common mental disorders, psychosis, alcohol consumption, um, and um, suicidality. They all showed a big association and when we looked into it more, and that was just, uh, our data was coming from a cross-national

25:43survey. So it was cross-sectional. We couldn't, um, say causation from that. We couldn't say that it was death causing mental illness or mental illness or death. But since then there'd been a number of studies following up different cohorts and there is a causation running from death to mental illness. So we were, now what we found was that death, um, if you look at the relationship between death and mental illness, death was magnifying the rate of mental illness by a factor of about six, six times risk factor. To put that into context, unemployed or divorced, does it by a factor of about two? Um, child abuse, does it by a factor of anything between about ten and eighteen, depending on what it is? So, um, death seems to be our second biggest, biggest risk factor. When you, um, control for low income, the risk comes down to a factor of about four. If you look at it the other way around and look at the impacted low income on mental disorder,

26:48it's a risk factor of about two. If you then control for death, it comes down to about one and a half. So, I always feel Michael Marmot's not quite right. Uh, it isn't low income that's the major risk. It's unmanageable debt. Well, the chair of that panel was of course Mary Duffy, trustee of Didasco and chair of the Library Mistakes Steering Committee. And I caught up with Mary in the green room to find out what else she had seen and what she was looking forward to seeing at the event later. This is my third year since it opened. Um, I think it's the best one. Really relaxed. The song shines really helping. Outside and today I've been doing two sessions about death. One about, um, engine briefs and engine roll and, um, Islamic approaches to death to really super entrusting. Is it a good thing? Is it bad thing? Is it a sin? Is it a form of, you know, help in society grow? And then the follow-up session was about Daedder's prison. There's some really great storytelling about the two panelists there about, um,

27:50how people were treated. Um, you know, the, the wretch and the purer when they came to prison with with death were treated differently. Ray Perman did a great session on that. So yeah, really, really great. Enjoying it. What if you got coming up this afternoon? I am going to go to the session on football. Uh, folks on rexham. Everybody's probably going to be professing the door to get into that one yet. See if Ryan turns up. But just super interesting for fall as a business. You know, it's not what it was when I was growing up in the 80s. Um, so yeah, that's my next, it's my next course. Well, the last discussion I saw was George Little John chairing a pair of heavyweight experts on the Russian economy, Maximilian Hess and Charles Hecker. We were treated to some great thoughts about sanctions from Charles Hecker, particularly their ineffectiveness in countries with strong illegal markets. And we had China and Russia described as very different beasts with China trying to rewrite the economic order in its favor and Russia,

28:51simply trying to blow up the whole thing. However, extreme and unruly you feel Russia is max stresses, it's probably worse than that. And the story being told within Russia is, of course, very different to the one we get over here. So, uh, here are a couple of clips that I managed to grab during that fascinating session. I'll take a word for the 1941's turning point. Uh, and then we've got a turning point in 2014. Probably an underappreciated turning point in 2014 with the annexation of Crimea. Then we have a turning point in 2022 with the launch of the full-scale invasion. Then we have a turning point two weeks ago with the war on Iran. And the problem is, when you start to get lots of turning points in increasing frequency, what happens is you begin to think that something systemic is happening. And, you know, we've heard in several of the panels over these weekend, and they've all been excellent. I've been very happy to attend a lot of them. This stuff about this, you know, talk about the destruction of the global war. And the thing

29:56that I wrestle with is we are clearly in a period of transition. I'm wondering whether this is, this period of incredible disruption and instability that we feel viscerally and financially and politically and economically, is this the new status quo? And is this something we're just going to have to get used to and become resilient against? Or is there some sort of new destination in mind? You know, are we on our way towards a new sort of global order? And I think a big mistake, and this is something I saw in Germany, and speaking to German audiences, in particular, in the sort of post-2014 era, was the idea that they could still have this so-called bondled or hundled change through trade, and which was epitomized by the building of the Nord Stream 2 pipelines after Russia's annexation of Crimea. I said, look, the mistake, I think, that was made,

31:00there is that one doesn't have to be a communist or a defender of Gorbachev, to say that Gorbachev recognized that he had real economic pains, even Chernobyl on the rope of the previous Soviet war, recognized that they needed to make economic changes, if not reintroduced capitalism, to improve their economy, to improve the well-being of their people, and to try to stabilize the system, to avert to collapse that ultimately happened. So they were more responsible to their people's economic interests than Vladimir Putin was in 2022. Vladimir Putin had more than 20 years of a steadily growing Russian economy. He had reorganized the system to put his friends and his allies in positions at the top. He had neutered the oligarchic threat, which was never popular enough amongst the Russian people to be a real area of uprising, and the point that I always make is by purchasing power bases. Your average Russian has never gone back to the wealth that they had in 2013. Yes, there may be more Russians in the forms of billionaires and so on and so forth, but that point I think is really important to make, and I do not think that Putin will put those

32:04economic concerns first and foremost there. Although the weekend was loosely themed on debt, it also looked at power, the complexities and pressures of the systems directing our resources, and had a go quite often at predicting the next fold in the unfolding of global events. In my opinion, we live in an increasingly infantile world of assault positions, but this was a crucial reminder that here in the real world, things are actually not straightforward. So come to the weekend of mistakes next year and you'll meet all kinds of surprising people that aren't supposed to exist according to the common public narrative. You'll meet boomers who are extremely concerned for the generations coming after them. You'll meet young people who are working their socks off to improve the situation for their age group. You'll be refreshed by a bunch of super smart people

33:08just trying to understand what's going on around the world without using an ideological lens to do so. You'll find people who care about others' money and well-being, many of whom have the power to actually instigate change. It's a fantastic thing and we're proud to be associated with it here at the Library of Mistakes. And it just remains me to say thank you for sticking with this episode, despite the slightly surveillance audio quality. I did have a better recorder. It did die on day one. So I did the best I could. Hopefully it hasn't been too bad. And I like to think it goes with the general sort of anarchic punk vibe of the weekend. My name is Layla Johnson. I'm a communications volunteer here at the Library of Mistakes and I usually co-host these episodes of shelf life with Fraser Allen. So keep an eye out for more of these and remember you can find us on all the usual social media, especially LinkedIn and YouTube and make sure you have a look at the

34:13Weekend of Mistakes, their website is www.weekendof Mistakes.org so you don't miss out next year.