In the Tablelands

The past two nights we've been staying in the Atherton Tablelands, in a sweet little pole house on the edge of the rainforest - the pic is the view from our balcony.

The Tablelands are one of my favourite places in the world. Stretching off behind Cairns, they're tropical but at enough altitude that you're not swimming through sticky heat all day. The landscape is quietly astonishing--this is an old volcanic field, and though in parts it is as gentle and rolling as the Cotswolds, in others there are views down steep wooded valleys to the coast, and crater lakes are scattered so profusely that some are barely visited. And the wildlife is even more astonishing--a sliver of New Guinea, and quite different from the rest of Australia. Up here you can find tree kangaroos--dun, monkey-faced marsupials with opposable thumbs and prehensile tails; cassowaries--like an emu crossed with a dinosaur, with a bony crest on its head and a deep, iridescent wattle; birds of paradise, otherwise found only in New Guinea; plus freshwater turtles, platypuses, strangler figs, and a thousand other unique and beautiful species.

Yesterday we went for a quick swim in Lake Eacham, a calm, warm crater lake with trees tumbling down its cliffs and pandanus dipping their roots in the water. Anya was getting to the end of her awake time so got a tad grumpy, but came home and had a giant sleep. Later, we took a track down through the scrub behind our cottage to the creek, where the water was as milky as moonstone as it swirled down over rocks to deeper, slower pools. Kate, who loves creek swimming more than anything, let herself down into the water and did some breast stroke, grinning ear to ear; Anya sat on the shore with me, picking up pebbles and trying to work out what the sand tasted like.

In-flight entertainment

Anya's working on those DJ skills. Gurning too, by the looks of it. A right little clubber.

Wine for metallers?

We are up in lovely Cairns on holiday, and this was in the window of the bottle shop when I was out buying nappies. AC/DC wine.

I want to say something smart and witty here but I'm struggling to improve on 'You Shook Me All Night Long Moscato'. *adopts wine snob voice* A title more befitting a grenache, surely?

On Libya

Who would have concluded in 1945 that Europe--bloody and bankrupt after some 400 years of sporadic conflicts, interspersed with some of the most brutal wars in history--was about to transform itself into one of the world's most successful societies?

That's the thought that strikes me when I hear all the wise pessimism spouted about the Middle East revolutions this year. And so I find it hard to share the sceptical attitude of most on the left, now that even the Libyan quagmire appears to be nearing its endgame. Aren't progressives supposed to be optimists?

I can see how things have got this way. After the 1990s Clinton/Blair doctrine of "liberal interventionism"--sending in the troops to end conflicts and encourage democracy--many will have felt hoodwinked when they saw this drift into the senseless bloodshed of Afghanistan and Iraq. If you sense that your government has been party to a terrible crime, it's tempting to set up a moral rule to ensure that crime can never be committed again.

The antiwar left is also right to note that the outcomes of conflicts are rarely as predictable as military planners suggest. There's a reason Julius Caesar compared the start of the Roman civil war to a dice game: every military action is a gamble, and a gamble with human lives. That being the case, it's morally comforting to tell ourselves that anything we could possibly do would worsen things, and to then use that as a justification for doing nothing. After all, you're only liable if you act--right?

Well, I disagree quite profoundly with that idea. I think if you don't act in a situation where you have capacity to act, you're morally responsible for your inaction. So I'd rather that "my side" had the blood of a hundred on its hands, than to see it stand by to preserve its own blamelessness, while the "other side" killed ten thousand.

Of course, the problem is that real-world situations can never be boiled down to such neat calculus. Perhaps Gadaffi's threats of a massacre in Benghazi and rebel provinces were just a bluff; maybe he had learned a lesson from 1996, when his forces gunned down 1,200 people in a few hours to put down a prison riot. Perhaps this new government will fail, or install a new dictator, or even dissolve into an Iraq-style civil war?

All those scenarios are possible, and there's little question that the people of Iraq have been worse off in recent years as a result of the 2003 war. But equally, I think the Balkans, Sierra Leone, and Liberia are better off thanks to their interventions. Ditto Europe, after the US succumbed to liberal interventionism in 1941. Afghanistan I'm not sure either way; while the invasion has been incredibly trigger-happy and brutal, I think I might prefer as a Rawlsian ignorant participant to be teleported into Afghanistan in 2001 over, say, Somalia.

The left is always going to be queasy about lending its support to the military. And it's surely too early to declare the war in Libya a success. But I don't think the comforting kneejerk certainty of opposing all interventions does justice to the left's professed concern for human welfare. Insofar as it does, it describes a morality that would rather preserve its own purity than get involved in the grubby, culpable, business of bringing about real-world change. Sometimes, beliefs need the support of our actions as well as our words.

Party girl

So we had Anya's birthday party on Sunday. This was a sort of dry run for future parties: barring old-age lost marbles, this will be her only birthday ever when she won't know it's her birthday. So it's a good opportunity to make the mistakes that will be unforgiveable by the time she turns two.

It went brilliantly. She's a supremely sociable baby, ahem toddler, and just loves being surrounded by people telling her how special she is. The house never really felt over- or under-crowded. My attempt at making orange jellies failed due to insufficient gelatin but they were rescued as a trifle, and I can inform that when making child-friendly panna cotta it is best to add your hundreds and thousands at the end, because otherwise they dissolve into a pinkish mess.

My boss David's wife Kathy made awesome muffins and all the pizza got eaten. Anya's presents on the day included: mini table and chairs, where she now eats all her meals; a giant tiger teddy, the size of a teenage kid; a tiny cat that wags its tail, which she greeted with a delighted kiss; some beautiful dresses, and a load of books which she already seems to know intimately. Plus a bunch of other stuff.

I swear we're trying not to spoil her. People just can't help giving her things.

Happy Birthday to her!

Well over the past year I've likened Anya to a milk-hungry grub, when she was just a newborn; a penguin or seal, whenever she wore her arms-up swaddle and reached for the bottle during night-time wake-ups; and now, constantly, a naughty little monkey.

She's got a huge loving grin and an insatiable appetite for adventure. It's impossible to lie on the floor without her climbing back and forth over your legs, and she is up the stairs in a second if you let her. She eats with all the gusto and satisfaction of her parents; giggles and chatters like a beautiful demented thing; and loves more than anything just hanging out with doting parents, grumpy cat, or friends and relatives.

A first birthday is some sort of a milestone and we feel pretty stoked to have made it in one piece. But most of all Kate and I are just loving the ride, playing with our beautiful daughter and enjoying the process of getting to know her wonderful, gentle and humorous character as she grows.

Happy Birthday, beautiful girl!

Taxes aren't that big a deal

There's been a lot of debate around the internet over the past week after Warren Buffett wrote an op-ed in the New York Times saying squillionaires like him should pay more taxes. Needless to say I agree with him, but rather than deliver the whole rant now I want to focus on one thing I only realised after becoming a financial journalist: corporate taxes just aren't that big a deal to most companies.

You'd never know it from the volume of bleating that most of the media feels duty-bound to print, but the total corporate tax bill of the average company comes to just a few percent of their revenues. Look down an income statement and this becomes obvious: before paying corporation tax, a company must first pay wages; materials; rent and energy costs; administration bills; depreciation and amortisation; and interest on loans.

By way of illustration, these are the profit margins of American industry sectors in the first three months of this year. The numbers in the first column are the percentages of revenues on which corporate taxes are charged. Given that the top rate of US corporate tax is 35%, it's fairly simple maths to show that the healthcare sector is the only one where corporate taxes come to more than 5% of revenues.

Companies are duty-bound to raise the returns to their shareholders, and clearly cutting corporate taxes lifts the level of net profits which accrue to shareholders as equity and dividends. So I can understand why companies harp on about this, and why it's a major theme for business lobby groups.

But I can't understand why everyone else, from media to government, takes it so seriously. Look at the raw numbers: even in the case of the healthcare sector, cutting US corporate taxes by a massive 10 percentage points would add just 1.5% of revenues to shareholders' funds. Such a tax cut would be seen as a huge win for "business" and a huge defeat for "big government", but a company that grew its revenues by just 1.5% in a given year (or that failed to turn those higher revenues into net profits) would likely be seen as performing pretty poorly.

Keeping costs down is hard, but the things that managers can do on improving productivity, or marketing, or purchasing and supply chain management, or financing, or jobs and wages are much more important to shareholders' returns than the rate of corporate tax.

Obviously there's a separate argument that's made about payroll taxes, such as National Insurance and Superannuation. These are basically part of the wage bill and as such do make up a bigger part of business costs.

But I assume that even business lobbies realise that a dystopia where the old, infirm and unemployed must depend on their own savings or charity rather than receiving some measure of support from the state isn't a viable or attractive vision of the future.

So it's basically a question of whether the tax costs to support social spending are going to be added to personal income taxes or payroll taxes. Move them to personal income tax, and companies will save on payroll tax but have to sharply increase salaries to make up for the fact that their employees are suddenly having to directly pay for this stuff. What you give with one hand, you have to take away with the other.

Either way, wage bills would wind up pretty similar unless you're planning to hide a sharp deterioration in public services inside some slightly arcane issues of accounting and fiscal budgeting.

Books: Ian McEwan's 'Solar'

I've always had a soft spot for Ian McEwan, but I have to admit I've gone a bit cold on him in recent years as he's settled into the role of a state-of-the-nation writer, a sort of Novelist Laureate for the Blair-Brown generation.

My favourite writing by him is the darker, grimly humorous and macabre streak you saw in his early stuff--'The Cement Garden', with its wild children, the perverse stories of 'First Love, Last Rites', or even the fragmentary violence of 'Black Dogs'.

I think writers are generally least likely to find significance when they seek it out. While I'm reasonably interested in, say, what life was like for leftish British people on the fringes of the science world in the 1990s and 2000s (McEwan's now written three of those), I'm not so interested that I'd want to read 300 pages of it. Zola's 'Therese Raquin' gives me a picture of lower-middle class life in late 19th-century Paris, but I enjoy it because it's a great melodrama about jealousy and guilt, not for the historical detail.

To give the guy his dues, McEwan's novels are anything but dry historical documents. In fact, they're still full of violence and jealousy and regret and sexuality. I just wish he'd give in a little more to those tendencies.

He's a phenomenally talented writer, and 'Solar' is a pretty taut comedy centred on a philandering, obese Nobel-winning physicist whose outward celebrity as a developer of renewable energy technologies hides his inner corruption. This is a great comic character, full of evasions and procrastinations but capable of moments of brilliance that keep his many sins from catching up with him until the rather over-contrived denouement. McEwan writes several wonderful set pieces, and at times it is laugh-out-loud hilarious.

So why do I feel a bit disappointed? I suppose I like Ian McEwan best when he unsettles me; when I close the book with a shiver of unease that hangs around for a while afterwards. 'Solar' is the work of a supremely talented writer and in many ways it's flawless, but I ended it mostly with a vague feeling of admiration, as if to say: "So that's how he did it! Very clever."

I'd recommend it as a good read, but I don't want flawlessness from Ian McEwan. I want flaws! Big, interesting flaws: ones that catch unexpected reflections, and illuminate the world in surprising ways.

Rahnyaan Roland Kirk

Anya can play recorder! Or at least, she can blow into it and make a noise.

A couple of weeks ago we found a little toy recorder in the park. We brought it home, disinfected it, and put it in with her toys, and a few days ago Kate thought it would be fun to form a two-piece band, with Anya on the toy recorder and her on a proper one she'd had since school.

Of course Anya was having none of it. Why can't she play both recorders? So now she crawls around trying to play both simultaneously like some toddler version of jazz saxophonist Rahsaan Roland Kirk.

She can only play one note on the good recorder, and a sort of high-pitched hoot on the crap one. But she plays that one note damn well.

Beer for Thomas Pynchon fans

I went out last night to our friend Tom's birthday nite - stand-up with comic Wil Anderson, whom Aussies will know as that bloke from the Gruen Transfer. He was great and not at all like he is on the box.

Anyway, afterwards we went out for some drinks at a Bavarian pub. And those who've read "The Crying of Lot 49" will have been as shocked as me by the name of one of the beers on tap. In the novel, 'Thurn Und Taxis' is a secret underground postal service which has been locked in a hidden battle with a rival service for centuries (er ... it's complicated). They'd have been doubly shocked to discover that this beer was not listed on the menu. I detect the hand of the Trystero organisation...

Life skills: Pickpocketing

That is all.

Baby descending a staircase

As I might have mentioned before, Anya is damn good at climbing stairs. She is now up them like a flash pretty much every time we put her near them, and she can even climb over the bottom bar of the baby gate with barely a pause--tricky, because it's pretty much at chest height when she stands on the step below.

But coming down is a lot harder. Though she climbs up the stairs several times a day, she's never made it back down again--in fact the most she's managed is about halfway to the babygate near the bottom.

This isn't a physical limitation. She's really good at the reverse-leg-dangle, look-over-your-shoulder way of getting down from stuff. She'll quite happily get down from much higher objects, such as our bed which is taller than her at mattress level.

No, the problem here is mental. When you're climbing stairs, you are moving closer to a visible goal at the top. Whereas descending a staircase, at least in baby-fashion, is the opposite. You're moving away from something that's in front of you, towards something that you only glimpse in those glances over your shoulder when you're probably concentrating on not falling.

Basically, Anya can't get down the stairs because she has the attention span of a goldfish. She'll get about five steps down, then think: "Oh my god, there's a CAT sitting at the top of the stairs. I should go and investigate." And having done that and descended the same five steps again, the same cycle starts all over again. She's like some sort of toddler reverse Sisyphus.

Baby: Cell Block H

Our baby gates don't get a lot of use to be honest. Our stairs can only be semi-gated, as the bottom four steps are turning a corner out in the room, without surrounding walls. And Anya is so sociable, and so into picking up and playing with whatever we don't want her to pick up and play with, that we've never really done the thing of sequestering her in one bit of the house while we sit in the drawing room with a stiff G 'n' T.

So mostly they stand sentinel in doorways, sprung open with roof-rack luggage straps. Occasionally, if Anya and the cat look like coming to blows, we might use a gate to separate them. But Jasper blew that particular trick the other day by jumping clean over one of them.

Anyway, I'm glad that someone has found a use for them. Anya has discovered that she can swing a gate closed, stand up behind it and start shaking it like she's been framed for some sort of baby crime she didn't commit. Maybe Grievous Bodily Poo. Or Pottering With Intent.

Should there ever be a remake of Prisoner: Cell Block H she will be fully trained for the audition.

PS Three weird naming facts about Prisoner I found on that Wikipedia:

1. The British screening got that "Cell Block H" suffix because of an injunction from ATV, who produced that existential 60s whimsical thriller The Prisoner, and considered the name too similar. Aussies just know it as Prisoner.

2. It has a cult following in Sweden, where it is called Kvinnofängelset.

3. The Canadians called it Caged Women, which sounds like some terrible 70s Italian exploitation film.

The credit addiction

I think there's a major warning to Australia in what's happened the past few days in the UK.

After the initial flareup in Tottenham, most of the London riots happened in a quite distinct set of suburbs. Hackney, Peckham, Harringay, Clapham, Brixton, Kilburn, Lewisham, Ealing, Bow, Bethnal Green, Camberwell. I know all these places pretty well for a simple reason: they're where my friends live. My friends mostly being upwardly-mobile, middle-class thirtysomethings, this is another way of saying that violence has broken out wherever there's been a wave of gentrification in recent years.

My initial assumption was that most of the rioters were teenagers, but I've been struck by the anecdotal sense from the magistrates' courts yesterday that a lot were in their 20s to 40s, and not necessarily with any criminal background. If this is borne out, it strengthens the sense that a major current running through these events has been economic: people who feel shut out of some version of society, taking their revenge.

I've also been struck of late how many pretty mainstream financial world folk have been launching Jeremiads against governments' failure to act on the housing bubble of the noughties. Jeremy Grantham of GMO and Societe Generale's Albert Edwards have pretty well accused central banks of standing aside while the rich looted the poor through the medium of the housing market. I'm not exaggerating their language here.

I think the analysis gets motivation dead wrong, but in terms of consequences I think they're right. Restrictions on credit are some of the oldest human laws: some of the first scraps of writing from Mesopotamia refer to regulations on interest rates, and the Bible is full of regulations on usury and debt forgiveness. There's a reason for this: credit is an addictive substance that ordinary punters have trouble handling. Most of us have only the vaguest idea of how our earning and spending patterns are likely to change over a lifetime, and how unexpected events can change these ratios.

But in recent decades--the period of the "great moderation", when we appeared to have solved the economic woes that plagued previous generations--we have dropped those restrictions. It's easy to see how this happens. Go back 30-40 years and all sorts of aspects of consumer banking were very heavily regulated. Lobby groups push for a particular regulation to be dropped; the government drops it, cautiously at first. A few years go by and nothing untoward seems to have happened. So another regulation is lined up for the chop.

Each dropped regulation, in the absence of a consequent crisis, strengthens the notion that the regulations served no useful purpose in the first place. You end up in a world where, as Alan Greenspan once put it, you think that bankers' self-interests are enough to keep the system running safely. He laid out that theory in a Congressional hearing in late 2008. And in the same hearing, he admitted that it was clearly wrong.

I don't see particularly bad motives at work in that process. No one deliberately tries to drive their economy off a cliff (oh, except House Republicans...) But I see the action of that old Keynes maxim: It is difficult to get someone to understand something if his livelihood depends on his not understanding it. The fact that nothing has gone wrong yet becomes an impregnable argument against the suggestion that anything could go wrong ever, especially if everyone fears the consequences of taking away the punchbowl when the party is in full swing. So you end up with the situation you have in Australia, where lenders see nothing disturbing in creating property millionaires, using mortgages that will keep the millionaire borrowers living below the poverty line in terms of their free cash.

Loose credit policies only benefit two groups of people: lenders and asset owners. Asset owners see the value of their assets rise faster than inflation or incomes, as looser debt allows potential buyers to commit more and more of their incomes to the purchase. Lenders see people taking out bigger loans, increasing the returns available on the same stock of assets. Everyone else is doomed by the fallacy of composition: you may think that looser credit allows you to buy more stuff, but everyone else thinks the same thing and, in the case of supply-constrained assets like housing, the result is just that prices rise to match the increased supply of credit.

As far as housing in concerned, you now have a generation of the middle class who are locked either into cripplingly high mortgage payments if they buy property without substantial aid from their families, or locked out of property ownership altogether. Tenants are still exposed to the situation, however, because the collapse of government house-building programmes leaves most of them to the mercies of over-leveraged buy-to-letters. Add in the reform of housing benefits, which will sharply jack up housing costs for poorer Londoners, and you have a toxic mix.

I think it's true that these trends tend to correct eventually. Housing costs cannot always remain so far ahead of their long-run ratios to incomes. But in housing, those trends are extraordinarily long, so whole generations can be locked into paying too much.

Kate and I are relatively insulated from this because we've got relatively high incomes and an aversion to debt. That we don't own property is more about choice than capacity. But when most people of my generation look at those even 10 years older, they see people on similar incomes with property wealth that they will literally never hope to attain in their lives. They're then told that they will have to work longer, and save harder, and pay more, and take on still more debt, to preserve benefits enjoyed by older generations that they themselves can never be expected to receive.

As I can't say enough, none of this excuses the violence, thuggishness and vandalism that has happened over the past week. But social unrest, however apparently apolitical, is almost always fuelled by some deep-seated sense of injustice. And I think you see it right there.

In the UK at least, this particular bubble pretty well burst with Northern Rock late in 2007. Tighter credit standards and falling house prices have reversed the trend since then--although, again, it's telling that the riots broke out in the one part of the country where house prices have been rising again. But in Australia, the boom has mostly continued, and even accelerated, since then. That doesn't bode well for what will happen when this economy eventually runs into hard times.

Seasoning

Last time we made this soup we ate it so fast that I never got a photo. So here it is. We made this again tonight because Sydney's going through a cold snap.

I'm on late shifts this week which means long days. Kate made the mirepoix but I did most of the rest, and mostly we were cooking in a bit of a rush, in those few spare moments that one has in the day. Which made the moment of seasoning particularly wonderful.

Proper use of seasoning is something I've come to understand relatively late. My tendency was always to concentrate on the main flavours and textures and ignore the way that salt in particular can draw out and harmonise the flavours in a dish. But seasoning is the most sensual part of cooking: the moment when you stop the mechanical processes of chopping, stirring, sieving and lose yourself in concentrating on that one sense of taste.

This soup has the red wine-infused salt on the surface to give it little touches of an even more intense flavour, plus the sour cream delivering waves of sweet fattiness whenever your spoon breaks into it. And there's some sort of forest's-edge affinity between pork, and the chestnuts they snuffle up, and the fennel that grows on the disturbed ground. So ... yum.

The kid gets it!

Anya is now fully qualified to be either a theatregoer or the Pope (or both!) because she can now clap and wave on command.

She's quite impressed with her new skill and finds it hil-a-ri-ous when we command a performance, especially if there's someone around to show off to. She also possibly understands "put in" and "give", and of course the words maMA, DEDie, duh (dog) and ca (cat) get regular workouts.

People keep telling me that I'll end up missing the days when she was small and sweet and didn't talk back, but it's not happening yet. She just gets better with every day.

More on London burning

 



I got some pushback from Kate Ames and Sarah Cain (hi guys!) on Facebook for that last post. I partially blame my long-windedness because I think I was trying to say the same thing as them, that the riots across the UK are a case of the chickens coming home to roost for the politics of austerity.

That said, I'm very reluctant to suggest that this is some sort of direct response to the world's economic turmoil. Indirect, maybe. But apart from a few old-style anarchists who may be mixed in and probably taking fright at all the genuine anarchy going on, I don't think the motivations of the rioters are very political. Many of the perpetrators appear to be experiencing this as a sort of carnival of disorder: they seem to be revelling in their liberty, to use that word in its old, amoral sense.

In many ways, what's going on now is unusual more in its widespread nature than in the depth of the criminality. When I was living in Whitechapel with Duncan and Paul, we were at various points harassed by gangs of local kids; at one point (I was away on this occasion) we had bits of concrete chucked at us while walking down the street; our front door was egged, and rubbish bags set alight on our doorstep when Paul was home one day. Burnt-out cars were a fairly familiar sight on the streets nearby, and in the Diwali-Guy Fawkes period of autumn I used to joke that it felt like Kandahar from all the bought and rebuilt fireworks going off round the estate. You tended to keep to busy areas in that period: even in Harringay, Kate and I once had a firework shot at us when walking down the Harringay Passage.

So what's unusual is really that this has spread so far, and I think that's more a result of things like impunity, which in themselves may result from the weaker-than-usual response of demoralised emergency workers.

All that said, I think indirectly it is a response to the political and economic situation. I wasn't especially well-informed as a teenager, but I knew the Berlin Wall had fallen, what the US and USSR stood for, and had a vague sense of what it meant when one of those empires fell. I think in the same way, most teenagers in Britain have a vague sense that some impossibly rich people lost a lot of money a few years ago, and that everyone else is now being expected to pay for it with reduced benefits and prospects at a time of sharply rising living costs. In that sense, they likely feel they're being treated with contempt, and it's not so surprising if they return the compliment by lashing out at whoever or whatever looks financially secure but physically vulnerable.

I think this is probably made a bit worse by the fact there is a Tory-led government in power, although the scale of the structural adjustment needed in the national budget suggests that Labour would have made cuts on a similar scale (Alistair Darling has admitted as much). The government has made a bunch of unforced errors which have doubtless worsened the situation: the NHS debacle, which seemed ideological and dishonest; cutting housing benefits in London, which may well come to be seen as a factor in this outbreak; and treating cutting the 50% rate of income tax as a priority.

But the biggest problem is probably something they're not wholly responsible for: the fact that the Tories will always be seen as the party of the rich. If a Labour government instituted cuts on this scale (which it inevitably would have done) the labour movement would have torn itself apart between its left and right wings. But at least the unrest would have kept within the family. With a Tory government the disenfranchised feel even more distant from the levers of power, and it's the country that ends up tearing itself apart.

Panic on the streets of London

 

What's happening in London sounds like it's become genuinely quite scary and, along with everyone, I'm at a bit of a loss to know what's caused it.

Clearly part of it is just the apparent impunity. If you were convinced that nicking a £10 top from Primark would land you in 100 hours of community service, you wouldn't do it. Likewise, setting fire to bins and buses and Carpetright and Greggs the Baker. But it's become very clear that the police are unprepared, outmanoeuvred and possibly undertrained to deal with a situation on this scale.

In those circumstances, there seems to be a Wizard of Oz thing going on: rioting kids have discovered that the feared Wizard is a frail old man with a megaphone. The authorities having lost control of the situation, lawlessness spreads like an infection.

Another thing, obviously, is the nihilistic selfishness of the rioters. But without wanting to sound too much the cookie-cutter bleeding-heart liberal, I have to wonder: why here? Why now? If the perpetrators were always this mindless and selfish, why was it not kicking off in Croydon and Peckham five years ago, or ten, or 20?

I don't imagine those involved in this violence are vastly worse off than they've ever been: the rise in unemployment in the UK since 2008 has been fairly slight by international standards, and London is doing far better than the rest of the country. But clearly, with western economies in the doldrums for three years and now tanking again, there's an end-times mood in the air, that late 1970s feeling that the attachments between anti-social behaviour and its consequences have frayed.

Think of this over the span of history and it's not so surprising. States have always bought the acquiescence of their populations through progressively granting them benefits, be they voting rights, welfare states, moves towards racial equality, or just a general sense of growing prosperity. When people sense that those benefits are being taken back--that they and their generation are being expected to put up with diminished prospects to pay for the mistakes and excesses of others--they don't see why they should hold up their end of the bargain.

That certainly doesn't excuse what these scumbags have done to the city I grew up in. Wood Green--near where we used to live, and one of the first places to get smashed up--was always a bit chaotic but it had that London disorder I've always loved. It was rough around the edges but it was an optimistic place too, full of the bustle of people with ambitions, and energy, and a sense of humour; nothing like the tired, depressed high streets I've seen in other parts of the country. I'm sure it will ride out this setback, but it pains me that people did this, there and across the capital.

I expect that, in a very British way, society will muddle through this and 10 years from now these riots will be viewed with a vague amazement, the way we now view the truck drivers' fuel blockade that almost brought the country to a halt in 2000.

Still, we should remember how we got here. Early modern society was violent and brutal by modern standards, and also far more insecure and unequal. Over the past few centuries, the powerful have traded some of their wealth and influence so that they could live in a more stable society. That trend peaked a generation ago, and so far we've managed to patch over the fraying of this social contract with progressive taxation, regeneration programmes, and credit card debt.

The financial crisis should have been an opportunity to reverse that deterioration, but I fear it has become the opposite. There is a pretty simple solution to social unrest through the ages, and it involves jobs, prospects, and improving standards of living.

But in this crisis I fear we are faced with thugs who feel contempt for a society they feel offers them little hope; demoralised police and emergency workers who see little reason to risk themselves for a government that wants to cut their numbers; and a general population reeling from the general social and financial disorder. It's the loss of confidence again: both thugs and financial markets think the world is falling to bits, and that our institutions can't handle what's happening to us. I think they're wrong.