http://www.ivorcatt.co.uk/spiral2.pdf
Ivor Catt, 4.12.2018 1
How Britain threw away the chance to be incredibly
rich.
http://www.ivorcatt.co.uk/spectator2.htm
was here, but first we have to jump to the last, explosive March 2 article
which accurately predicts the present Microsoft, Google and Amazon. Then return
to the full set at http://www.ivorcatt.co.uk/spectator2.htm
Ivor Catt. 9.7.2019
Spectator March 2,
1974, p 275
Computers
The fettered giant
Ivor Catt
During the last
four weeks I have written a series of articles discussing the chaotic state of
a high technology industry, and the feeble government departments associated
with such industries.
Those articles
were the tip of an iceberg, a simplification of a complex subject. Some of the
rest of the iceberg is discussed in my book
http://www.ivorcatt.co.uk/x1bn.pdf , and yet more is only now coming to light
as, carrying my computer invention with me, I stumble around the murky alleys
of government and industry.
Perhaps the most
valuable contribution of my CAM invention will be to shine a searchlight into
the world of high technology in government, industry and university. A pretty
awful mess it has exposed.
The key discovery
that has been made is that, contrary to the conventional wisdom, no parties
are motivated primarily by profit. Loyalty to a particular group, fear of
appearing foolish, and a number of other motivations are stronger than the
profit motive. (Professor Basil Bernstein's writings are relevant here. https://en.wikipedia.org/wiki/Basil_Bernstein ) This is a valid, though unrecognised, position, because massive profit is necessarily
highly disruptive of the established order, and order is what nearly all of us
cling to.
The rejection of
high profitability is enshrined in a cliché of business management and accountancy,
the well-known principle that any business proposal claiming more than a
reasonable (say 50 per cent) return on capital invested must be rejected as unsound.
(Later in this article I shall discuss the methods used by technocrats to mask
the larger potential of a very good idea.) To put it another way, "Society
will not believe a project aiming at 1,000 per cent return on capital invested."
This can be rewritten, "Society will not tolerate a project aiming at 1,000 per cent return on capital
invested." [Something lucrative like “Silicon
Valley” “Big Tec” will not be allowed in Britain. All will unite to prevent it.
– IC 21.7.2021.]
The reason why the
latter phrasing is valid, is because the whole system of business finance and
management is built on the thesis that massive return on capital invested will
not occur. From this principle it naturally follows that control of business
and industry should be in the hands of accountants (Weinstock https://books.google.co.uk/books?id=X4tIJIhL3jMC&pg=PA107&lpg=PA107&dq=%22the+collapse+of+gec%22&source=bl&ots=hj9-58T8OH&sig=ACfU3U1yuEfyGzwdPbKMdbWSFrYta4Je-w&hl=en&sa=X&ved=2ahUKEwiWmpnlzqfjAhU8UBUIHShhCZUQ6AEwAnoECAkQAQ#v=onepage&q=%22the%20collapse%20of%20gec%22&f=false )
and the like, men versed
in marginal alternatives in a financial picture, because since we have
outlawed massive profitability, this is all the freedom of action that remains
to us, freedom to reduce our rental or labour costs
by perhaps 20 per cent, or avoid an increase of some such small percentage.
However, in
Britain we say that our only resource is brain-power. If the return on capital
invested is 50 per cent or less, the return is by definition on capital, not
on brainpower. If the investment were in brainpower, the return on capital
used must exceed 500 per cent, otherwise we are back to a capital-intensive
(not a brain-intensive) enterprise. It follows that the traditional (50 per
cent return) approach to business and industry will always stifle the very
industries that Heath, Wedgwood Benn, Walker et al say we must get
into, industries centered on brain-power, inventiveness, rather than on
capital, which we lack. Unfortunately, any move towards high technology (and
other brain-intensive) enterprise would break the present stranglehold of
traditional (non-technical) management upon industry, and lead to a rapid
decline in their social standing, salary and security. Whereas today an
engineer earns £2,000 and a non-technical manager £4,000, these rates would be
reversed in a brain-intensive industry.
It is not
surprising that a nontechnical administrator or financier of the traditional
kind feels more loyalty to his own social group than he feels to the `country'
(a vague concept in any case), and he will automatically move to stifle
brain-intensive industries [Microsoft, Google]. It is normal for a group whom
history is passing by to carry out a vigorous defensive rearguard. This is not
particularly pernicious of them, because they have a responsibility to their
families to try to protect their position, and because of ignorance they cannot
in any case conceive of the explosive profit potential of high technology, that
is, brain-power.
Technocrats
looking for finance for a new venture understand these problems, and do not
claim more than a small (50 per cent) projected return on investment. Also,
they accept the intrusion into their enterprise of large numbers of personnel
of the old kind (accountants, lawyers, salesmen, and generally quantities of
bodies), many of them into top positions, and allow their new, brain-intensive
enterprise to be made to look as much as possible like an old-style enterprise,
perhaps one manufacturing cardboard boxes or shoes. Unfortunately, the
old-style people and activities, once established in the enterprise, will have
a natural fear of the brain-intensive activity operating in one corner, and
what I call the 'management-technocracy guerrilla war' begins (see Computer
Worship Pitman £1.80).
One of the
anomalous results of this rule, less than 50 per cent return on capital
invested, is that it is far easier to raise £200,000 for an enterprise than
£40,000. This is because, even if successful, the rule says that the latter
investment will lead to less than £20,000 per annum income, and a banker’s
overheads are too large to service economically such a small enterprise. This
is why all experts in the field of high technology financing told me that I
should go for £200,000 finance, not £40,000. However, I persisted in asking for
£40,000, and this is what has caused such apprehension all round. (No one has
rejected my figures, however.)
Politicians need
to appear to support new invention and industry, and for this purpose
government departments are set up. Now if such a department were staffed by
competent technocrats, they would have the arrogance to believe in their
trade, and from time to time they would support a "£40,000 in, £5 millions per annum out" proposal.
On March 1, 1973, the National Research Development Corporation said
that the CAM invention " ...could be of fundamental importance in the design, construction and
operation of future digital processors and stores (i.e.
computers)."
Walker, Secretary of State for Trade and Industry,
earned his spurs as an asset stripper, https://www.investopedia.com/terms/a/assetstripper.asp , which by conventional business standards
is quite dynamic: However, compared with the (as yet virtually unexploited)
potential of high technology, asset stripping is mundane. So among politicians,
even Walker will have an accountant's fear of high technology as a potential
hostile power base.
As a defence against high technology and the technocrats within
the departments under their care, a politician will either introduce or allow
gross technical incompetence, as appears to be the case in the NRDC, or,
failing this, stifle the technocrats by interposing an impenetrable buffer
between the technocrats lower down and the political power to act higher up.
For instance, if Walker allowed highly competent technocrats from his
department, like E. A. Newman or D. 0. Clayden, in
the same room as himself for three hours, he would come out much the worse and
the power structure would be permanently altered. An admirable buffer between
upstart technocrats and political power would be a military man, since the
primary function of a military man is to keep the people below him and the
people above him apart.
To sum up: The
essence of accountancy and the pin-striped rest is balancing the books. The essence
of uncontrolled hi-technology is un-balancing the books. Never the twain shall
meet.
Now go
to the full set of articles at http://www.ivorcatt.co.uk/spectator2.htm
The day after, there was a snap election, and the ministers I was
homing in on disappeared. Then we waited for some years for the next step. http://www.ivorcatt.co.uk/x5cz2.htm
. I was trapped by the saboteur NRDC, but once I got £1,000 out of them
(equivalent to £20,000 today 2019), I could demand another government
department, and was given ACTP. They took some years to change their rules to
suit my case. ACTP put in the equivalent of £300,000 today (2019) for research
into the CAM invention in three universities. This proved the idea, but the
dying companies (Ferranti, Plessey, GEC) refused to touch it. Years later,
self-styled “pirate”, Thatcher’s Sir Clive Sinclair set up a company to develop
it with £16 million, and it came to market with acclaim – too late. The
technology had changed in the delay of 20 years. )
http://www.ivorcatt.co.uk/x1a31.pdf
http://www.ivorcatt.co.uk/x1a81.pdf
http://www.ivorcatt.co.uk/x18r.pdf
http://www.ivorcatt.co.uk/x2bd1.pdf
http://www.ivorcatt.co.uk/x37h.pdf