The asymmetries of Putin vs the West (or, why The Economist keeps looking stupid)

It has been some time since this blog has taken its title at face value and looked at some of the large scale asymmetries at work in the world around us. The Ukraine conflict, however, presents just such a chance. Plenty has been written on the subject now by armchair experts in Eastern European strategy, many of whom no doubt only recently become epidemiology experts too. I offer a few simple thoughts about the asymmetric nature of the game Putin is playing, and in every case I start with the panacean truisms one finds in the media.

“Russian GDP is not even as big as South Korea, it is overreaching itself!”

The globalist response to almost any conflict has been to look to economic indicators – at least, the ones we are familiar with – as a measure of how powerful a country is or can be. I will give such commentators the benefit of the doubt that in most cases, they are aware there is some nuance and that localised imbalances can affect outcomes; but still, by and large, they will believe that historical determinism tells us that a country’s GDP will indicate the way the winds are blowing.

What Putin is exposing, however, is that for Russia (and China, amongst others), expenditure in materiel capital has to be matched with the commitment to expend human capital. On a GDP basis, many others will be more powerful than Russia; but judged on the basis of its hard resources multiplied by the factor with which it is willing to use them, Russia’s position on the world stage is not one of punching “above its weight”; it is very much a significant player (which, let’s be honest, is exactly how it is treated within the world of realpolitik). This is a case of asymmetric capital deployment.

The Western response in offering the Ukraine arms and supplies is a case in point: it costs the West nothing to do this. Indeed, given the realities of the military-industrial complex, offering military equipment which is in turn paid for through loose monetary policy actually helps the West. The problem is, it does not do much to help the Ukraine. Putin knows that no Western government at this stage is willing to lose the life of a single soldier in defence of Kiev; China knows likewise about Taiwan. And they are able to gamble that even with the best of wills in armament support, if the West has no boots on the ground, its commitment will be as fickle as the next budget discussion in Cabinet. Only blood counts.

So whilst it is absolutely true that Russia is not rich enough to match much of the West, it really does not matter because that is not the game being played. I suspect not a single Ukrainian soldier coming under a rocket attack is thinking to himself, “well the joke is on you, you’re overreaching your GDP base”. Unless the West changes its tune on how to respond, the Russian bear is not going to be paying too much attention. Instead, as one of my friends pointed out, “there is no significant military force standing between Russia and Paris today, a situation we have not faced for generations”. Another added, “but there is a lot of GDP standing in the way”.

“Russia is on the decline anyway, in ten years time this will be seen as a massive mistake!”

Again, this is very possibly true. After all, the big difference between the Russian threat and the Chinese threat is that it seems difficult to imagine Russia being more important in ten years time than today. Again however, I suspect this is cold comfort to the dying Ukrainian civilian, who is most probably not shouting to the incoming tanks “well you’re on the wrong side of history!”. As Keynes says, in the long run, we’re all dead.

The fact is that in this kind of game, a grenade in the hand is worth two on the production line. Most incidents like the Ukraine are not played out over the kinds of timeframe that the Cold War was; once an aggressor gets its way, it can be almost impossible to dig them out again other than at enormous costs which, as described above, people are unwilling to pay. Yet the fact is that Russia is doing this today, not years down the line when history has come to bite it. This is a case of asymmetric timing.

All powers are likely to rise and fall cyclically. Russia doubtless is on a down cycle already – but so what? History is not decided by trajectories (much as historical determinists and progressivists would love to believe), and still less are real objectives today affected by those long term trends. A power willing to punch today can easily and consistently outcompete the larger power waiting for things to fall into the natural order of things. Obama’s pushing of this wording is perhaps his most pernicious legacy as a clarion call to inaction.

“The whole world is watching this and will be judging Russia!”

Whilst the first two popular claims may well hold true, even if they are irrelevant, this last one is questionable due to one last great asymmetry, which constitutes the eternal dilemma of the policeman. The West is of course judging Putin – for now. Sanctions will come in. There is discussion of banning Russia from the SWIFT payment system for instance, as well as the removal of this season’s Champions’ League final from St Petersburg (Russia’s involvement in the Eurovision Song Contest however, has been subject to confusion).

The problem though, is precisely that the whole world is watching this – through the 24 hour news cycle, through social media, through memes. Yet the policeman’s dilemma is, why do I prioritise this over anything else? And with the fragmentation of Western attention, through so many channels, the cohesion of Western attention is less than in generations past, even as the volume of that attention is more. This is asymmetric focus.

The Russians know that Western observers struggle with creating a hierarchy of what is supposed to be important. Modern media has dampened our sense of proportionality, meaning that there is a perception of crying wolf. How much better or worse is Biden’s performance over the Ukraine, compared to the retreat from Kabul for instance? Or Obama’s red lines in Syria? Or his response to the last time Russia invaded the Ukraine? In the heat of the moment, everyone is entitled (as many are) to believe this is the most important issue in the world today; yet that same raw sensation will also see it be less to tomorrow. Maybe another invasion, maybe another form of Covid, maybe just forest fires will do the trick. Our lack of media curation has brought us to this.

I would additionally add that, in all of human history, sanctions have only ever to my knowledge worked in one example: South Africa. In this case, it worked because the target society of the sanctions (white South Africans) looked up to and respected those sanctioning them – they cared. Not the case with Russia, or with China. Probably not even the case with India. The corollary is that asymmetric focus is only solved when the matter is close to home – culturally, ethnically. Sweden, for instance, is not a member of NATO, but will still be able to count on American and European physical support in the event of a Russian invasion in a way the Baltic states might struggle with. Let’s be honest, because they’re white. This is the only thing which cuts through the ADHD of modern life. Are the Ukrainians really white enough and middle class enough for people to sustain their care? We will find out.

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If this sounds cynical, that is because it is. Asymmetries unlock many of the answers where there is more heat than light and war has been so unknown for so long. As long as Putin is playing a different game, the constant refrains about meaningless measures will remain rhetoric whilst real people are suffering. Grasping these asymmetries can lead to small but very effective changes in policy, and consequently enormously different outcomes. Given that the US purported to know about the coming invasion so long ago, a single battalion of American soldiers, under the guise of ordinary joint training exercises, would have made Putin pause for thought.

One must always ask oneself, “what would Putin do?“.

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PS – where now those anti-nuclear deterrent voices?

The Five Blogs of Christmas V – How the Empire was built

My muse has given me leeway until the end of January to complete “Christmas”, giving me just enough time to examine the bigger picture

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Between 1781, when Lord Cornwallis surrendered to the Americans at Yorktown marking the end of the First Empire, to 1942 when Percival surrendered to the Japanese at Singapore and effectively marked the end of the Third Empire, Britain did pretty well. By and large there was not a single concession in between those two dates – with British phlegm being marked by a few remarkable victories interspersed with some even more glorious catastrophes, such as the Retreat from Kabul; the Charge of the Light Brigade; the Sieges of Cawnpore and Khartoum; Isandlwana; and the Somme. The noble, defiant ignorance of the lower classes characterised Empire and was the basis on which it was built.

Since that time, we have had sailors like Arthur Batchelor blubbing away “when the Iranians, who called him Mr Bean, took away his iPod.” We have had a second withdrawal from Kabul where pets were being prioritized over people. Foreign policy has been of a somewhat reduced nature, and with that comes the question: have the British changed? Are we now a weaker nation, no longer capable of seizing the moment and battling for a greater cause?

I say, no. And I think we can see exactly where Britain remains as strong as she ever was. Here I examine the keystones of the imperial character, and how they still manifest themselves.

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Defiance

At the Battle of Jellalabad in 1842, Sir Robert Sale organised the Somerset Light Infantry to hold off thousands of Afghan jezails (after the inglorious / glorious massacre of British forces to the last man at Jugdulluk) for five months. Not only did these men of Taunton refuse to concede, but went on to capture 300 sheep from their assailants for provisioning.

Today this obstinacy and refusal to lie down continues, as shown by these courageous characters, who dressed as traffic cones for a stag do, blocking a local road and finally having to be arrested by the police:

Competitivity

Such was his desire to serve his country, Captain Scott and his four companions famously died in 1912, frozen to death in their vain attempt to be first to reach the South Pole. Yet this was a theme which had centuries of tradition for Britain, particularly in its rivalry with France. The imperial race that took us to the Americas and later the colonisation of Africa before they could, created much of the land holdings which allowed for the idea that Britain had an empire “on which the sun never set”.

And who are the heirs to Captain Scott? Step forward these men:

Cunning

The Great Game raged between Britain and Russia over the Northwest Frontier region over much of the 19th century. A war that never quite was, Britain strove to counter and undermine the Russian ambitions in the East at every turn, leaving no stone unturned to do so including setting up trade routes and client states. Likewise, when Britain wanted a war with Spain or France, she relied on privateers and pirates to harass her rivals until a war was inevitable – perhaps none more so than the provocations that led to the Second Anglo-Dutch War, where the Royal Africa Company was established to seize Dutch ships and outposts along West African coast.

This guile remains in the blood of the British, as shown by Surrey farmer Robert Fidler, who for four years between 2001-2005 fought the tyranny of the Planning Permission board of Reigate, by hiding an enormous folie de grandeur behind haystacks. The local council was not aware of this military build-up until the it was revealed with a flourish:

(Note: Fidler ultimately lost the case and had to tear down the house in 2016, but it was the effort that counted)

Opportunism

Many wrongly see the height of the British Empire as that conveyed through the formal life of Late Victoriana: reviews at Spithead, Great Exhibitions, the Delhi Durbar. Yet as I have noted before, the real peak of Empire was a century or more earlier, with James Wolfe’s victory at Quebec in 1759, and Robert Clive’s victory over local warlords at Plassey two years earlier. Throughout this period, the British displayed unparalleled buccaneering spirit, just as they had in battling the French in the pirate wars. Britain stumbled into her Empire accidentally, on the whole, but she never missed a chance to assert herself at the expense of others.

This remains perhaps Britain’s greatest trait. When a container ship sank off Devon in 2007 – before the financial crisis when household balance sheets were still bloated by overvaluation and there was no desperation in the air – the reaction of the Great British Public was to scavenge as much as possible before anyone could catch them.

This was magnified a few years later, when rioters in London turned out to be just as keen to loot from JD Sports as they were for social justice.

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And what of the French?

Our cousins across the Channel had a slightly different imperial experience. For a start, due to losing key engagements such as the Battle of the Saintes, France was largely left with bin-ends of empire such as the bone-dry sub-sahara. In Indochine, their most enduring contribution to civilization was the forcing of Vietnamese to eat baguettes and pate.

But they too were famed, whilst the contest lasted, for a sort of cunning. In the Americas for instance, the French were willing constantly to get into bed with local tribes in order to align short term interests against competitors such as British or Dutch. This came to a head in the French & Indian War (the Seven Years’ War) where they used the Delawares and Shawnees against the British colonists. However, whereas in the British this was a noble astucity, a dignified shrewdness of mind, in the French this can only be seen as double-faced artifice, the constant scheming of a younger brother who can never quite get what he wants.

Nowadays, French ingenuity is demonstrated in such activities as getting a free ride in defence spending through NATO, hijacking the European Union for their own ends, and this:

So I suppose we are all back to where we started …

The Five Blogs of Christmas IV – The Art of Ambiguity

My muse takes me to the subject of architecture, psychoses and the joy of leaving people guessing

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Readers of this blog may have noticed that I delight in the equivocal; indeed I find some of greatest artistic genius to be where the audience cannot quite nail down what it is they are supposed to be interpreting from something – or better yet, where several viewers will argue vociferously that they do understand it, but they cannot agree on what it is.

History of Art was, as with any non-science undergraduate at Oxford, a pastime one was shamed into knowing something about. Architecture in particular, given our surroundings, was a prime amateur concern: we had, after all, buildings spanning a period of eight centuries through which to decide that, of course, the University’s prime of life had been several hundred years ago and nothing constructed since Keble had any merit at all. I marveled regularly at the vista along Catte Street from the King’s Arms, a view which took in the Clarendon Building, the Bod, Hertford, All Soul’s, St Mary’s and of course the crowning centre of Oxford (and the closest answer tourists have to the question “where is the University?”), the Radcliffe Camera.

When studying this building as a dilletante, I learned that, apart from being Gibbs’ masterpiece, it was filled with traces of his Italian Mannerist heritage. Supposedly this was reflected in the complexity of cascading lines from one level to another, which were never straight and direct but staggered. And this was all very interesting, but to me, as I stood there occasionally breathing it in from the corner near Brasenose, there was something altogether more genius about it: I could never work out whether it was wide or tall.

Buildings and their designers aspire to something. Verticality is clearly a feature of modern urban skyscrapers; three centuries ago, breadth was more in vogue. But depending on the angle, the Rad Cam would be either imposingly tall or strikingly broad. It poses the onlooker an artistic and intellectual question which they cannot answer. Moreover it demands of you an emotional response which cannot be easily defined – and your response depends not only on your perspective, but on your mood, on your psychology, and on who you are.

For some time I had supposed this was an illusion of my own creation. Perhaps only my own deep-lying schizophrenia led to this. But over the years, as the internet came to catch more and more of our collective lives, I realised that you could see this in others too. If I were to Google “sketches of the Radcliffe Camera”, it turns up dozens of pictures; and within these casual drawings one can discern the same uncertainty and lack of consensus amongst everyone else.

To take these six at random, one can see all sorts of Freudian influences in the proportions observed. The “wide” school revels in grandeur, but is at the same time intimate and close; the “tall” school is aspirational, but distant and cold. Do these characteristics reflect something about the artists? Do the “tallists” have intimacy issues, or are the “wideists” overly deferential? Who knows. But one would be hard pressed to imagine that these sketches tell us nothing.

So much for other people. Above all, this reflects for me the occasional brilliance – inadvertent perhaps – of James Gibbs. He may not have achieved this in any other of his works – St Martin-in-the-Fields is a fine church, and the Fellows Building at King’s splendid – but neither of them had ambiguity. None of them left the observer with more questions than answers. But in the Rad Cam, the glorious and unanswerable paradox perceived in the eye and the mind are on full display. Many others, including Wren and Hawksmoor, arguably never surpassed it.

To not know what you think yourself is unfortunate; but to leave other people not knowing what you think – that is genius.

The Five Blogs of Christmas III – Battles of the Spurs

Missed a couple of days, but the Muse is now thinking about football …

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Hard-battling, controversial 2-2 draws have become a hallmark of Tottenham in recent years, with the recent game against Liverpool a case in point. Whilst many fans will remember other specific moments such as Ajax away in 2019, this series of draws symbolized life under Pochettino and will, perhaps, do so under Conte. I think the thing about them is not only their indication of our resilience when the team is at its best, but also that scoring goals was the mainstay of our key contests against the bigger clubs, not just defensive stability – something we all hope remains true.

Below, then, is a potted history of Tottenham as told through these glorious matches.

March 2016: Tottenham 2-2 Arsenal

This really kicks off the Pochettino and arguably the Kane era, since the most important part of it was that goal to give us the lead. The Arsenal of 2016 was still at the tail end of Wenger 2.0, the less successful but still fluid attacking side containing Özil and Sanchez at their peak, and a Hector Bellerin understood to be going on to great things at Barcelona.

Interesting to note that Kevin Wimmer was still in and out of our back line at that point (his £18m sale to Stoke must surely rank as one of Levy’s financial masterpieces), and Lamela playing his part, but the core of the great team, including a Dembele and Dier midfield, was in-place. We would have been happy with the result overall, but with Coquelin having been sent off in the 55th minute, it could have been more. The dropped points would start to count.

May 2016: Chelsea 2-2 Tottenham (aka “The Battle of Stamford Bridge”)

This remains perhaps one of my favourite displays from any Tottenham side, ever. The sheer determination of our boys to play the man, not the ball, is satisfying every time I rewatch it. It was a testament to the fact that for all the good football that Pochettino had started to instill in this young squad, there was also steel in them, a guttural identification with the club and the fans. Every poke, kick and punch was being unleashed on behalf of us, the supporters, and we loved every moment of it.

There are a lot of heroes here:

  • Dembele majestically exerting his power like a coiled big cat ready to pounce, including poking Diego Costa in the eye at the margins of a melee
  • Vertonghen pulling Diego Costa’s shirt and then feigning an Oscar-winning “who, me?” performance.
  • Lamela stamping on Fabregas’s hand
  • Rose lunging in on Willian and getting himself and his adversary booked
  • Kyle Walker throwing bodily fluids at Diego Costa
  • Dier chopping down Hazard like a lumberjack and then calmly walking away
  • Kane constantly pretending to be a voice of reason, mostly by pulling Diego Costa away from the fray (yes Costa was a major focus of our attentions)
  • Ryan Mason hauling down Hazard for no good reason other than he does not want to miss out in the story
  • Pochettino trying to calm it all down like a gangster patriarch who ultimately is more pleased to see blood than no blood

None of this conveys the full emotion of it all though. It is all the other moments, when Chelsea players are attacked by not one but two Spurs players in quick succession; or when a hard tackle against us (and there were plenty) was immediate answered by a comrade putting one through the offender. The players were playing for each other; there was joy; this was only the beginning, they would have thought.

One thing is for sure – this match would never have survived VAR, and that is a crying shame because this is what football is all about.

Jan 2017: Man City 2-2 Tottenham

In a foreshadowing of what would come a couple of years later, Pochettino’s team took it to Guardiola in his first season at the Etihad, fighting back from 2-0 down to pull level. Spurs have had a strangely strong record against City ever since Pep arrived, and this was one of the undeserved results we pulled off.

City still had a back line of Zabaleta, Otamendi, Kolorov and Clichy which explains some of this, but their attack was already potent. Sané and De Bruyne scored in quick succession in the second half, but Dele and Son (coming on for Wimmer) responded. But the real controversy was Kyle Walker’s clear push on Sterling which went unpunished, leaving Man City enraged much to the amusement of all. Both of our goals were also fairly spectacular, Dele with a trademark late run into the box for the first, whilst intricate interplay including a penalty box backheel from Kane set up the second. This was some of our best football.

Feb 2018: Liverpool 2-2 Tottenham

This match was so full of controversy that I even wrote a whole separate blog about it. Liverpool, of course, are poor losers at the best of times, and even worse winners; there is nothing quite as satisfying as seeing them upset. This topsy-turvy match (just as VAR was being introduced and finding its feet) saw a Liverpool side which already had almost all their pieces in place, including three of the current back four, and the famous front three. However they did have Lovren alongside Van Dijk and, perhaps worse, Karius in goal.

There was reams of column inches written after this match, but the highlights included a Wanyama goal which is probably the peak moment of his entire career. Kane uncharacteristically missed a penalty in the second half, but manned up to take and score a second one five minutes into injury time to draw us level again – and hush Anfield up. But it was the nature of the penalties – Kane’s supposed dive for the first, and Lamela (yes, him again) winding up Van Dijk for the second – which really stand out. We should not underestimate the benefits of gamesmanship that Lamela brought to this team.

Feb 2018: Juventus 2-2 Tottenham

Thus far we have only referred to Premier League matches. Tucked in between them though, was the footnote of our battle against Juventus in Pochettino’s slow season-by-season progress in the Champions League. Ultimately we lost the tie, with Juve coming to Wembley and giving a masterclass at match control, we being haunted by the words of Giorgio Chiellini.

But in this first leg at the Allianz Stadium, we actually fell behind to two Higuain goals in the first 9 minutes, demonstrating a certain immaturity, before heroically making a come back. Kane and Dele combined before half time, and while Higuain then hit the crossbar, Eriksen finally scored a free kick – albeit not a pretty one – to leave Juventus irritated at our resilience. As with the 2019 matches against City and Ajax, not eventually winning does not mean we do not have these memories in the bank; and what is more, we clearly learned from all this in order to go further the next time round. All part of growing up.

Aug 2019: Man City 2-2 Tottenham

It is easy to forget that despite Pochettino being sacked in November, the 2019-2020 season had actually started pretty well with a 3-1 home victory against Aston Villa, with new signing N’Dombele scoring, followed by this dazzling draw against Guardiola’s 98-point previous season champions. Bear in mind also that this came after perhaps our most controversial ever VAR match, against City in the Champions League quarter-final just months earlier, where a 94th minute Sterling “goal” was disallowed.

Somehow, VAR managed to disallow yet another goal, this time in the 93rd minute from Gabriel Jesus. So despite City chalking up 30 shots against us (10 on target) compared to our 3 (2 on target, 2 scored), we walked away points shared after first Lamela and then Lucas equalized – the latter just 19 seconds after being on the pitch. Frankly, even Poch and Guardiola had to laugh. Little did we know what was still to come.

“What just happened?”

Sep 2019: Arsenal 2-2 Tottenham

Just two games later, a bit of a different story. Arsenal (now managed by the short-lived Unai Emery) were looking pretty vulnerable, and had entered their phase of having little in the way of a recognized defence. It was hard to take seriously a back line comprising names such as Sokratis, Kolašinac and an ageing David Luiz; having said that, Aubameyang and Lacazette will always be able to sting – as they did here.

For once this was a tale that went against us, possibly indicating what was to come. Taking a 2-0 lead to the cusp of half time through Eriksen and then a Kane penalty, we still looked every inch the top four challengers we had been over the previous three seasons. But Lacazette’s strike just before half time changed the shape of things and it was Arsenal who would end up celebrating being able to battle back for a draw. The only thing to raise a smile for us was that yet again, VAR ruled a goal off against us as an 80th minute effort from Sokratis was deemed to have been offside in the build-up – from Kolašinac. What a great team that Arsenal side was.

Dec 2021: Tottenham 2-2 Liverpool

Which brings us to the present day. Fresh in the minds, we had Kane scoring his first proper goal of the season, his almost celebratory near-sending off moments later, and the corresponding red card handed to Andy Robertson instead (after – guess what – VAR again!). In the meantime Liverpool, who until that point were arguably the best team in the country and maybe in Europe (this has changed a little since), came back to equalize and then lead, before Son brought us back again.

Ironically, in this list of historic matches, this last one may be the least controversial, though it may not be the least significant. Conte finally tried a 3-5-2, and gave lifelines to Winks and Dele for the first time since he arrived. If things progress well, there is every likelihood that we look back on this game as the moment which came to define his change at the club.

More than anything though, this last 2-2 draw really harks back to all those previous 2-2 games, where Spurs really had the heart and soul to battle against the odds (with a little help from VAR at times, one would have to admit) and attain decent results against decent teams. And it is notable that so many of those results were away from home, meaning that at our best we were really taking the game to the opposition. This is the most heartening aspect of that period; we can only hope that better yet is to come.

North Shropshire was never much of a surprise

Tory mauling in North Shropshire by-election was self-inflicted by Boris  Johnson | Financial Times

Since the by-election in North Shropshire, described variously by lazy journalists and commentators as “stunning” and “shocking“, a lot has been written about how historic the North Shropshire result has been. Clearly, it was an extremely poor showing for the Tories and, arguably, for Boris personally. The actual historical context, of the seat being held by the Tories for two centuries, is also somewhat true – it certainly has not been held by Labour or the current Liberal Democrat party before this. However, the Tories of two centuries ago were clearly not the Tories of today, so unlike some of the Red Wall seats which fell to the Tories in 2019, the historicity of this claim is rather tenuous – those seats, for instance Workington or the Don Valley, were literally in the camp of just one party (Labour) since 1918.

So much for the soft stuff. The statistical context is even more important. The fact is that whilst North Shropshire was a bad result, it nonetheless was much to be expected. Most obviously, incumbent governments will of course always suffer during mid-term by-elections, since there is little reason for voters to turn out for anything other than “sending a message. In the 146 contested Parliamentary by-elections since 1979, only 7 have resulted in the incumbent party of government not losing vote share. Most of these have some particular backstory to them as well, such as the Blaenau Gwent or Glenrothes by-elections under Labour. Gains by the Tories such as Copeland or Hartlepool are, by definition, remarkable.

The second most obvious point to make is that by-elections in the aftermath of major crises – domestic or global – will always magnify this swing effect. The statistical evidence is more limited here, but it is worth noting that the greatest swings against have tended to come in the wake of enormous economic dislocations, in the early 1990s for the Tories (Newbury and Christchurch) and in a statistical basis of one, in 2009 for Labour (Norwich North). These represent the only times since 1979 that real GDP growth has slipped into negative territory, and it shows. Since Covid-19 has created an economy dislocation some 2.5x greater than the 2008 crisis, it stands to reason that anti-government swings will be larger still. It is imperfect but it stands up to scrutiny.

Most importantly however, it should also be noted that swings against incumbent governments have, over time, been larger and larger. This is a secular trend divorced from specific party politics, since it has continued as a trend throughout various Tory and Labour governments. Below is a chart of the swing against in all by-elections since 1979 where the ruling party has lost a seat. Not only can you visually see the increasing size of the swings against, but statistically it also works out that whereas in the 1980s a government could expect an average swing of ~-15% against at an election, by the 2010s one could expect a ~25% swing against on average. Swings have increased by 10% in and of themselves.

The obvious question to ask is why this has occurred, to which I will only for now speculate. The first reason is the ongoing evidence of partisan de-alignment since 1979, which has become more pronounced even after 2010. The second could be the ongoing evolution of social media and its impact on the 24 hour news cycle, something which actually affects by-elections more than general elections. After all, electorates are used to being inundated during a general election and have done since the 1930s. But the amount of national focus on individual by-elections, first from television and now through social media, has made both dealignment as well as the “bloody nose” concept more pronounced. Regardless of the specifics, governments are going to find it ever harder to win by-elections.

This is not to say that the Conservatives had anything other than a poor result. But long-term increases in anti-government swing + largest economic dislocation in a century = almost certain defeat for a government. Boris still did worse than he needed to; but anyone believing this was not the opposition’s to lose is kidding themselves.

The Five Blogs of Christmas II – True Romance

On the Second Day of Christmas, my muse has inspired me to a rather long cinematic reflection

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I am something of a sucker for romantic comedies. Recently for instance, I have been re-watching When Harry Met Sally and I will occasionally dip back into films such as 13 Going On 30, a minor classic in its own way. Yet at the end of the day, these do not much reflect reality – not for the conventional reason that “things never go as serendipitously in real life” (true though that is) but rather, because life is not really about first love at all, its about first break-up and, if you are lucky, the second romance.

Hence I keep to hand what I refer to as the Canon of romance films, several of which I have forced upon my friends at critical moments of their love lives, when I feel particularly inclined towards interfering in a slightly passive-aggressive way (even your best friends never really want to hear you true opinion about their love interests, despite asking; so best keep dumb and use alternative methods of expressing yourself like “hey I haven’t watched Fatal Attraction for ages!” and hope they get the hint about their slightly menacing ex who walks around with a kitchen knife hovering dangerously).

I also feel that each of the Canon speaks to me, each in their different ways, about key asymmetries in love, as in life. More than anything, the criteria for entry into this hallowed list is that it cannot be a simplistic “happy ending”, just as real life cannot be. Despite being listed as “romantic comedies”, these films leave you feeling unsure, as they should. So here are some of the must-sees before understanding one’s own romantic existence.

500 Days of Summer (2009)

500 Days of Summer (2009) - IMDb

This is of course the best example of romantic “asymmetry”. 500 Days really captures that post break-up introspection when you look back and think “well shit, I got that completely wrong!”. The cognitive dissonance between what you thought was happening and what, in fact, had occurred is one thing; but even more critical is the dissonance between what you perceived and what the other perceived over the same matter. The missed half-glances, the unheard comments, these are the seeds of your own romantic destruction.

Two human beings will never understand each other, of course; this is a Cartesian truth. But in our minds, the possibility of meeting minds is the basis of all hope for love. This film demonstrates the fragility and, frankly, the unlikelihood of such a situation. You will never truly understand your other half so do not waste your time trying.

Definitely, Maybe (2008)

Definitely, Maybe. I don't think anyone ever imagines on… | by Tita | Medium

Perhaps a strange choice as judged by the “happy endings” criteria, but bear with me. Officially, Definitely, Maybe ends with the “right” girl being picked by protagonist Will Hayes (and I admit, Will speaks to me due not only to his romanticization but his ability to live his life through contemporary politics and get lost in “moments” such as Bill Clinton’s indictment). But actually this is not doing the film justice: on a basic level, Will does not even end up with the woman who is his daughter’s mother, breaking at least one element of conventionalism.

But the more poignant issue are his three female options. The (I think unwitting) genius of the film is the way that whilst the narrative pushes the viewer towards accepting April as the “right girl”, actually most people end up having differing opinions. I know people who have watched it and wished he ended up with Emily, his college sweetheart, or Summer, the robust intellectual (for the record, she gets my vote).

The point being made is that whilst one can – indeed, should – believe in “true love”, this is not the same as believing in one true love. If you are lucky, you may go through life meeting half a dozen people who are the right one. They are all your true love, depending on where you are; and they are all set apart from the majority who are all wrong for you; but true love does not hinge on a single individual. Romantic choices are real, after which it is only practical choices which matter. In that sense, this is not a “happy ending”.

那些年,我們一起追的女孩 (2011)

那些年|柯震東吸毒全面遭封殺彎彎婚後12日街頭激吻重挫形象

Somewhat torturously translated as You Are The Apple Of My Eye, 那些年 captured the hearts and minds of cinema goers not just in Taiwan but also Mainland China when it was released, which from a socio-political perspective actually provides some insights as to how similar life is on the ground for young people between China and its renegade province, probably to the shock of all. But the schooldays nostalgia is only one theme: the other is living with the what-might-have-beens in life.

The unhappy ending is in a sense obvious, since despite all the dramatic interaction between the main characters, they do not end up together and the girl gets married to some nondescript other (any person you still harbour affections for will always end up marrying someone nondescript, that’s a golden rule). But this film really pokes in the eye the peculiarly Asian adherence to hyper inflated romance, and the world of the grand gesture which is often assumed to trump all. In reality of course, people will make practical choices and they will also move on; if you do not nail down someone in that romanticized moment – which is possible – then your window closes. And then you are left exactly as a window leaves you: peering in from the outside at what might have been, but without really know anymore if the vision inside is quite what you think it is.

You do then however, have to laugh and make fun of yourself, and it.

The Break-Up (2006)

Watch The Break-Up | Netflix

This is actually a quite brilliant and disturbing film, even in its funny moments. It really changed my view of both Vince Vaughn and particularly Jennifer Aniston, coming as I did from a childhood of watching her being the annoying and selfish Rachel in Friends (and yes, they were on a break). The film has the dramatic tension of an Arthur Miller play, with some scenes of such deep pathos that one might think that Vaughn (who co-wrote this after being mostly the straight man in comedy classics such as Old School) had reached straight into your own past and pasted its contents on screen.

I think the main takeaways from The Break-Up are that even those who are each other’s true loves (see above) can and often do break up. Being right for each other does not make being a success a foregone conclusion, and life may contain numerous right people, many of which end up being “failures”. Neither does failing with someone diminish their “right-ness”. The other point the film makes is that break-ups are tragedy microcosms, full of the specific choices one makes at given moments in time. Life, overall, is precisely about such choices and fate is decided upon these tosses of a coin. When Gary chooses not to go to the concert at the end, of course you could take a step back and say “oh well, he is emotionally repressed and incapable of expressing himself or being brave enough to put himself on the line”, and that is partly true. But in fact, his decision is being made by the finest of margins, whilst trying to make sense of a maelstrom of emotions. He doesn’t know where he is, where she is, where this is going. Why would he?

The Break-Up is a great film for rewatching, precisely because despite knowing the ending (they do not get together, although there is a hint of promise) you cannot draw yourself away from a horrified fascination. It is like watching Macbeth. This makes it a classic.

The Last Kiss (2006)

The Last Kiss - Movies - Review - The New York Times

Another heavy-hitter even amongst the Canon – albeit this one mainly for guys rather than girls. Almost every scene and every subplot in is packed with poignancy: seeing your ex at an event with your group of friends; the intensity that a newborn baby brings to up-end your life; the moment a friend with benefits suddenly needs something more. Most of all, the group of slightly ageing, obligated men deciding to run away from it all to go on a road trip, only to slowly realise they cannot and drop away one by one. These are the stories of our lives.

As far as the true romance goes, the main themes that are confronted include the existence of temptation, how to deal with it, and the fact that after such major exogenous shocks, it will all never be the same again. People in relationships change from being their other half’s “superhero” to just another normal person, in the same way that parents do so in the eyes of their children over time. Real love therefore – if it exists at all – is where you work through all those trials and tribulations to get to the real, sustainable stuff at the other end. Only there will you find whether it works or not. Whilst the end of the film does proffer hope about things working out, the important point is that this is no longer the old love, like a snake shedding its skin, Love 2.0 has to be ever changing and new. Love is a shark, it needs to move or it will die.

I must also add that The Last Kiss contains one scene, where the protagonist is slowly being caught in a lie by his other half, which churns the stomach of every guy I have sat through this film with. There is that moment of “uh oh”, the rapid calculation over at what point the lie needs to change or one has to cut losses and come clean. This battle is at the very heart of the male psyche.

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There are a few other honourable metions: When Harry Met Sally (1989) does have some great moments (including the assertion that guys cannot be friends with girls without sex playing a part – which is true). 13 Going On 30 (2004) is once again about choices – the only way you can get back your past is apparently through magic fairy dust (in other words, you cannot). A more recent film was How To Be Single (2016), which almost reaches Canon status in its assessment of modern urban romance and optionality, but I am unclear at the end as to whether this is supposed to be a happy ending or not. It’s a pretty good watch though, and the formula for total units of alcohol consumed between two parties and whether this means they will sleep with each other is a good one.

The long and short of all this is, I am a romanticized person – probably overly romanticized if anything. Yet the Canon demonstrates that it is the romanticization which causes the greatest problems and is the riskiest approach towards love in the first place. It is perhaps the only area of human existence where the majority of people, who are otherwise conservative in their choices, suddenly become gamblers and indeed will bet again and again. It is inexplicable; and therefore the Canon may make the inexplicable just slightly more explicable.

Lockdowns (still) don’t work

Austria back to total lockdown, vaccines mandatory from Feb | The Standard

As several countries slide back towards the spectre of Covid-21 lockdowns, this is perhaps an opportune moment to consider whether we actually learned anything from Covid-19 and the policy reactions around it. On the face of it, the answer would appear to be a firm “no”, as governments continue to react on the basis of at best short-term considerations and at worst, aesthetics.

Some time ago on another blog (Noah Smith on Substack), whose contents are interesting if rather pre-2016 in their globalism, a piece was posted on why lockdowns were so great. But the real gold here was in the comments, and I unashamedly publish one such comment in its entirety below, which makes the point valid then but even more so now: lockdowns never work because they are always closing the stable door after the horse has bolted. There is no viable way for most countries to get lockdowns right and effective. As a result, it is not very clever to try.

The commenter (presumably an Arsenal suppporter, disappointingly), retorts to Smith’s article thus:

The problem with this article – and with lockdowns in general – is that they assume they can control exponential growth. It’s been pretty well established that in most cases COVID-19 follows a logistic curve (in terms of cumulative cases and deaths). In order to stop a spike in cases and deaths you need to two things to work out for you. Firstly you need to get the timing of the lockdown correct and – more importantly – the lockdown has to take R below one.

There are some very big issues with this approach. One is that all three lockdowns, COVID infections (i.e. day 0 of a covid case) have peaked before lockdown measures took place. Professor Simon Wood of the University of Edinburgh has done some excellent work on this. It appears that we are as good at timing lockdowns as investors are at timing the market.

Secondly and more controversially, lockdowns are not effective in reducing infections. They do not work. If we examine the November lockdown we see that there is only a small decrease in infections after a lockdown is imposed. In the March and January lockdowns, infections were already decreasing in the days before lockdown and the R value was also decreasing prior to lockdown. Lockdowns may increase the rate at which R decreases (dR/dt), but the evidence for this is slim at best. For evidence of all of this, see the two graphs from Simon Wood.

Further evidence for lockdown 3 can be found here. On a more local level, we see such proof for this again and again in the failed local lockdowns in Leicester and the north of England. In London, cases were increasing rapidly in certain boroughs towards the end of the November lockdown. While the B117 variant and schools being open may have been factor in this, it further weakens the case for lockdowns. A collection of 35 papers have also reached similar conclusions

Despite all of this evidence against lockdowns, let us assume that they work to some extent. In order to justify them, the government must demonstrate the benefits of the lockdown outweigh the costs. Miles et al examined this and found that the “lowest estimate for lockdown costs incurred was 40% higher than highest benefits from avoiding the worst mortality case scenario at full life expectancy tariff and in more realistic estimations they were over 5 times higher“.

It appears that there are only two viable approaches to fighting COVID-19, the first being the “zero COVID” approach used by Taiwan, South Korea, Australia and New Zealand. The other option is the light touch approach of the US (Texas and Florida in particular) and Sweden. Anything in-between is likely to lead to more job losses and non-COVID excess deaths while doing almost nothing to slow down this disease.

All of these are fully sourced and the sources worth a read. To add to his comments, in retrospect the “zero COVID” approach is also not working, and the examples the author cited at that point have come to be bitten severely with ongoing local lockdowns and major disruptions to life. It seems unlikely that even Australia would continue advocating the “Australia method” these days, and that is before discounting the fact that Australia and New Zealand were able to impose such lockdowns rather uniquely given their island status. A democratic society which is not an island will find these extremely hard to bear.

In reality, even China is now talking about having to come to terms with COVID as something one lives with rather than something one conquers. With the latest Omicron variant demonstrating new levels of mildness in symptoms, we are almost certainly at the point where everyone will have to agree on tolerance towards the virus. Hopefully at least something will have been learned of the last two years, but perhaps this is asking too much.

The Five Blogs of Christmas I – Humble Servants

Since I have been rather remiss in updating my thoughts, and since blogging should be a discipline, in this week between the holidays I will attempt to collate some of the more idiosyncratic thoughts keeping me awake – most of which are unrelated to politics, economics of football. Like apples for health, I will aim to serve up one a day.

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A subject that has always fascinated me is that of the “humble servant”: figures in history who are merely subjects of a dynastic line, but whose dedication to that dynasticism is unfettered, pure and often more intense than the dynasts themselves. These are people serving an institutional cause, rather than either their own or even that of a nation or group. They are the behind-the-scenes powers, the civil servants and private secretaries, the bureaucrats, the imperial governors and administrators, the statesmen, the grand chamberlains, the chancellors. Often, they are the most ideological and committed members of a regime. They are what royal and imperial longevity are based on. They are also the touchstones of the “Great Men” theory of history, for which I have much time.

My favourite example is that of Eumenes of Cardia, Alexander the Great’s private secretary, a lone Greek amongst Macedonians and – sort of – a member of the Diadochi. Eumenes fought against the odds to carve out his own power in in the Hellenistic world, but did so due to his commitment to not just Alexander III but the Argead Dynasty more broadly. He understood well, more so than many of the Σωματοφύλακες (whose rank he, as a Greek, could never join), the necessity for both continuity and integration in the newly created empire, in order for it to remain tenable. On some level, he recognized, rather as elements of the British establishment did of America in the decades after 1918, that the civilizational propagation of the Greek world, even under the semi-barbarian auspices of the Macedonians, was preferable to its decline. To his very end, Eumenes proclaimed the rightful rule of Philip III and Alexander IV, infuriating Antigonus even as he commanded his adversary’s respect. Meanwhile, the Argead’s themselves were far from covering themselves with glory, undeserving in many respects the services of such a dedicated figure.

The other name which springs to mind is that of Armand Jean du Plessis, the Cardinal Richelieu. One of a number of cardinals serving the then-nascent House of Bourbon (Richelieu was to be followed over the next century by the Cardinals Mazarin and Fleury as chief ministers to respective Kings), Richelieu is commonly known as the villain in The Three Musketeers. Yet in fact, Richelieu played a crucial role in consolidating the power of the French monarchy under the weak and ineffectual early reign of Louis XIII, effectively inventing the modern Westphalian diplomatic system, coming out on top in the Thirty Years War and displaying the kind pragmatism – with regards Protestants for instance – which keeps kingdoms functioning. Ironically, it is in the BBC’s unfaithful adaptation of The Three Musketeers where Richelieu’s commitment to the institution of Bourbon monarchy are conveyed with most nuance; and despite the slander of Dumas, he never harboured dynastic ambitions of his own, instead being the target of various conspiracies on his life. Richelieu’s vision of Bourbon rule, and of the country’s pathway to greatness vis-à-vis Spain and Austria, makes him in many ways the father of modern France.

Armand Jean du Plessis, Cardinal Richelieu - Wikimedia Commons

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Having solicited my various learned friends, including through a WeChat group dedicated to obscure topics of historical interest, I have compiled a longer list of those who fit the bill of the noble “humble servant”. The qualifications have to include having a clear, identifiable dynastic regime to serve (rather than merely a nation or people – this is not about “patriotism”); being clearly non-dynastic themselves; and ideally their credentials resting not simply on high-profile military laurels, but rather that of being the power behind a desk. If they died for their troubles, that is an added bonus. The fact is that all institutions, be they political regimes or parties, institutions such as schools or universities, sports clubs and associations, and even corporations and work places, need these selfless and tireless counsellors and ministers. The lucky few have had them.

A dozen more humble servants (in somewhat historical order):

  1. Li Si 李斯 (3rd century BC)
  2. The Prophet Daniel (arguably 2nd century BC under the reign of Antiochus IV Epiphanes)
  3. Seneca the Younger (1st century AD)
  4. Zhuge Liang 諸葛亮 (3rd century AD)
  5. Yelü Chucai 耶律楚材 (13th century)
  6. Tokugawa Ieyasu (16th century)
  7. Thomas Cromwell (16th century)
  8. Pitt the Younger (18th century)
  9. Talleyrand (19th century)
  10. Metternich (19th century)
  11. Bismarck (19th century)
  12. Zeng Guofan 曾國藩 (19th century)

Honourable mentions: Stilicho and Belisarius, two great generals keeping the Western and Eastern Roman dreams alive through difficult times. However both purely military men, as was Prince Eugene of Savoy. Others, such as some of my personal favourites the Earl of Bute and his influencer Henry St John, the Viscount Bolingbroke (both for their services to George III), or Jacques Necker did not achieve quite enough in their own life times. By the time of democratic politics of the 20th century, statesmen no longer really qualify as humble servants since they are mostly no longer sustaining dynasticism, so De Gaulle, Churchill and Roosevelt are out. No room here for Dominic Cummings, either. Good men all, but not quite on the list.

“Success” against the virus ≠ zero deaths

Covid beach

One of the most fascinating aspects of the reaction to Covid-19 in the West, has been the near-perfect alignment between the political Left vs Right, and the sides of caution vs courage. Almost without exception – after a few early weeks of confusion – those who favour big government and intervention, also favour lockdown, wearing masks, almost permanent health screening and continued economic dislocation. Those that favour small government, lean towards Swedish-style herd immunity, and want an end to the lockdown and for people to just get back to work. Anecdotally, there are very few people crossing over at all, which I find remarkable.

In East Asia, by contrast, the response has been uniformly lock-step: everyone tolerates intrusive government and everyone supports the (virtue-signalling*) wearing of masks. Expats in Hong Kong, for instance, have felt heavily the weight of – effectively – racial prejudice for their differing attitudes on what constitutes “best practice”. All pretense of those traits of modernity – self-reliance, independence and adventure – which were driving urban Asia forward have vanished as these societies demonstrate their true colours of sheepish governmental dependency and open embrace of social closure.

The economic debate has raged for some time. Just to take headlines from recent days, one side (rather too gleefully for my liking) posits “Four reasons state plans to open up may backfire — and soon”, while the other retorts that “The lockdown left is no friend of the working class”. But for me the most pernicious rhetoric is that of men like Andrew Cuomo, whose popularity is premised on the logically fallacious claim that:

“ … if you ask the American people to choose between public health and the economy, then it’s no contest. No American is going to say, ‘accelerate the economy at the cost of human life.’ Because no American is going to say how much a life is worth.”

In this assertion we see the defeatist and absurd idea that lives should be protected at all costs. The fawning view that “Asian countries focused on containment in a bid to minimise mortality” has been accepted as the rightful moral goal of virus policymaking. The economics debate is fruitless, since it pits logic against emotion; but the moral point is important.

The analogy between Covid-19 and the common ‘flu is compelling and purposefully misunderstood: it is not a biological parallel per se, but rather one of social morality. It is an impossible and unnecessary task of government to eliminate death from natural causes. There is such a thing as “natural attrition” from disease and old age; and the ‘flu, which kills tens of thousands each year in the UK and US, remains the last bastion of socially accepted, blameless death on a large scale. The ‘flu is not like dying from traffic accidents, which might arguably be prevented; it is natural process of life and if this virus does not come to get you, the next one will. To try to prevent this is to commit yourself to a problem with no solution other than feeding an unquenchable appetite for resources – and in turn would ultimately spell the end for universal public healthcare which would be burdened intolerably by the expense. I will say this again: an acceptable level of deaths from Covid-19 in the UK should number in the tens of thousands before severe economic dislocation is necessary; several times more again in the US. “Success” was never, and should not be measured against, negligible mortality – for this virus or future ones.

Both Trump and Boris have thus made significant errors in their response; but the error was not so much their technocratic plans on testing and quarantines. Rather, the biggest blunder they made was to allow the narrative to move on to the grounds of protecting all life. From inception, both governments suddenly found themselves on the hook for an unachievable and undesirable objective: limiting deaths to zero or almost zero. This put them on a hiding to nothing and set a terrible precedent for both – though Trump and the US is likely to escape a touch more lightly. But Trump has also made a rod for his own back with his China rhetoric – since however true it is that the virus came from China, externalizing the cause, rather than making people accept it as a normal part of existence, strengthens their belief that “success” means stopping it like one would a foreign invader.

By the same token, for the first time in my recent life, I now no longer feel China is necessarily the long-term “winner” it might be. The government is very nearly promising its people protection against the unprotectable, setting expectations that may not long from now see them demand healthcare instead of military expenditure. All very well, but it will build no independent Great Power status like that.

I for one do not believe we should – or will – inhabit a world where major viruses lead again and again to the necessity for lockdowns. By the same token, neither do I believe that we should inhabit a world “safe” from such lockdowns only through constant testing, screening and health surveillance. Instead, we simply have to become a society of humans capable of digesting the idea that death is a fact of life; deaths from viruses and other natural causes, all the more so. To be constantly worried about death of this nature (as opposed, for instance, to war) is to be petty, parochial and apathetic, unable to see the bigger picture. I liken it to a company whose employees and management are constantly focused on cost-control and the bottom line; all the while forgetting the visionary focus on growing the top-line. Such a company is one living in the past, occupying the twilight of its existence, not looking to the future. It constitutes a lack of ambition.

Speaking personally, for all the distress and heartache that any disease or event incurs, I would rather not live in a society which exerts its time and resources, however good the intention, in trying to protect its people from life rather than encouraging them to jump into it. I would always favour courage over caution. Perhaps in this, I have finally discovered my true, core, Toryism.

 

* Curiously, a piece written by Jason Ng, an anti-government activist and lawyer, which vocally disapproved of expats during the virus and pretty much specifically called for expats to wear masks in order to “show solidarity” with locals – the very definition of virtue signalling – has been taken down from the Hong Kong FP website where it had been posted.

Just how rich is Tottenham Hotspur, really? Not very.

Daniel Levy

With the virus having suspended football, this seems like a good moment to finally sit down and look at exactly how “rich” Tottenham Hotspur is as a football club, and therefore think about the question of how much we can afford to spend.

The Swiss Ramble recently performed its annual analysis of Spurs’ finances, and it is an exercise I like and admire very much since it attempts to put into perspective the club’s performance and context amongst the elite. Yet it has a major limitation, which is that it focuses almost exclusively on “profitability”, as this excerpt shows:

Swiss Ramble

Source: Swiss Ramble twitter account

The problem, of course, is that profitability tells us very little about cash available, since the items on the P&L (including the profits after taxes) are mostly not real cash items. Instead they are filled with such concepts as depreciation and the gains recognized on the sale of players as assets. Essentially, these are accounting items. And I find it a dangerous way to look at a football club because it raises false expectations about how “rich” we are and therefore how much we should be able to pay for transfers.

I prefer to apply a financial perspective by looking at football clubs as one would any other business, through the company’s balance sheet and cashflow statements. The balance sheet gives us a sense of how indebted the company might be. But more importantly I like to look at the cashflow statement for a few reasons:

  1. Real cash items – the cashflow statement gets rid of non-cash items such as depreciation and replaces it with real cash such as capex
  2. Transfers – it more accurately captures the actual money going in and out on transfers including all hidden costs as well as payments spread over time – a £60m fee paid over three years should be seen as such and not lumped into one number
  3. Stadium investment – it captures all hidden costs but also allows for financing raised against the project, ending the “the stadium pays for itself” speculation.

Helpfully most financial accounts break down transfer spending in quite some detail, which in turn allows for me to get to my core concept: the pre-transfer free cashflow (“PTFCF”). For this I take the net cash inflow / outflow, and add back transfer spending which I assume to be discretionary. This brings us to a calculation which tells us how much “spare” money we would have available to spend in a given year, if we had wanted to.

Taking the June 2019 figures, this metric then allows us to judge – somewhat – our performance in the transfer window.

Pre-Transfer Free Cashflow by club for year ended June 2019 (£m)

PTFCF 2019

We can see from this analysis that Tottenham came a fair way off Man Utd, Chelsea and Liverpool (and one assumes Man City, who do not publish a cashflow statement or give any notes to their Intangible Fixed Asset investments). Arsenal were the big losers of last year given their Europa League participation, and Chelsea show themselves as doing well despite not qualifying for the Champions’ League. To be clear, generating a negative cashflow (just like generating a loss) does not mean you have no money to spend; only that you must do so unsustainably out of your “savings”, which will show up on the net debt (which we will get to).

If we look at the year prior, this becomes even more stark, and highlights the fact that Tottenham, contrary to some assertions, was under real financial pressure during the stadium building process starting in 2017.

Pre-Transfer Free Cashflow by club for year ended June 2018 vs net transfer investment for the following year (£m)

PTFCF 2018

Note: Since transfer spending runs July-June and mostly occurs during the summer transfer window, a June 2018 year ending is best contrasted with the June 2019 transfer spending.

At this point, Spurs were actually incurring a substantial negative PTFCF due to stadium costs, not least since much expenditure for large capital projects is paid up-front, for land acquisition and so on. Man Utd and Chelsea spent far more than they were generating – one might say generously, “investing for the future”; Liverpool were spending about as much as they might expect; and only Arsenal were spending significantly below their capacity, buoyed no doubt by the knowledge that they were not in the Champions’ League. Indeed Tottenham’s tiny net expenditure of ~£3m was quite flattering under the circumstances.

In fact, if we look at how Tottenham have performed on average against the rest of the Top Six (excluding Man City), we have had a tenuous few years.

Three-year rolling average Pre-Transfer Free Cashflow (£m)

PTFCF 2015-2019

On a rolling three-year average, the other clubs have managed a PTFCF of around £80m per year over the last five years, whereas Tottenham, having clawed our way into contention by 2016, have actually seen the gap widen again in the subsequent years. In other words, we really are not that well-off, are some way behind the other Big Six teams, and cannot spend the money on transfers that some fans seem to believe we now should. The stadium remains a massive gamble and has to succeed as a standalone business for us to begin making up the difference with the other clubs.

To cap things off, let us just look at the “savings”. A net debt position is typical of most companies and football clubs are no exception. Furthermore, the ratio of that debt to net assets or ‘shareholders’ funds” shows the relative indebtedness of a business.

Top Six clubs net debt (£m) and gearing for year ended June 2019

Gearing and net debt

On both measures, Tottenham are more precarious than our peers. Not only is net debt larger in absolute terms, carrying with it the funding for the stadium; but alone amongst the Big Six, our gearing is at more than 100%. No doubt much of the stadium borrowing is ring-fenced to a degree, and probably operates on a project finance basis; nonetheless the cost of the debt will weigh Spurs down through interest payments for some time – and the analysis gives a sense of how much better off Man Utd really are than us, for instance. Daniel Levy, who is no stranger to this situation, will clearly not be minded to let spending get out of hand.

Some of this will be well-known and obvious to observers. The reason I raise it is the danger of football fans demanding spending beyond what is possible – and Spurs have been particularly under the microscope for this. The Swiss Ramble’s analysis – whilst perfectly legitimate and technically correct – conveys a very misleading impression over our financial clout. Headlines about record revenues and profits on the P&L, lead to questions (from those who should know better) of “where has all that money gone?”. In the end, Spurs just are not yet that big a club, and whilst I am confident that we will reach our goals, it will still take some time before we can splash out.

 

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Browsing the internet after posting, I came across the University of Liverpool’s football finances website, which has recently just posted about Premier League club values for 2018-2019, which, whilst doing some equally interesting things,  has rather fallen rather into the same trap. Their proprietary “Markham Multivariate Model” is based on net profit adjusted for one-off items, but unadjusted for non-cash items. The formula is quite off-the-wall in other aspects too but I will let that lie for now.

Nonetheless it leads to what I think is just as unhelpful an output (below), saying:

Spurs overtook both Manchester clubs at the top of the table on the back of reaching the Champions League final, a fourth-place finish in the Premier League and a wage bill barely half that of Manchester United.

UoL club valuations

Even from the eyes of a purely financial investor, this cannot be true. Spurs’ true hidden value, if you want to see it this way, is the stadium value and its future earnings but as far as I can see this has not been captured by Markham. If you strip that out, however well managed our wage bill is, a DCF of Tottenham vs the other clubs would not come to this conclusion. My opinion: head in hands.