Went to see Bohemian Rhapsody last weekend. Phenomenal piece of rock history and wonderfully built up to the finale of Queen’s performance at Live Aid in 1985. What always stuck in my mind was how Bob Geldof was concerned that Queen would not exactly be able to wow Live Aid, which by his estimation was more of a Boomtown Rats or U2-type crowd. It is something that does not come out in the movie that much where the focus is more on Queen’s demise in 1985 and the question if Freddie Mercury could pull of a live performance. He could and he did and wrote history, it was voted as one of the best live rock performances ever and you can watch the original here. I do it regularly, it is 24 minutes well spent.
Of course, there is always a personal memory and Queen grew on me after this performance. I never forget the devastation when Mercury announced he was suffering from AIDS in late November 1991, followed by the news of his death only about a day later. What I did not know was that he lived and died at Logan Place, which was less than a block a way from where I lived at the time on Lexham Gardens in London’s Kensington neighbourhood. It felt weird knowing he was that close to where I was when he passed away.
The summer after Wembley hosted ‘The Freddie Mercury Tribute Concert for AIDS Awareness’ which similar to Live Aid saw a phenomenal line-up of artists perform classic Queen songs (with Queen) to a huge crowd. Lisa Stansfield’s rendition of “I want to break free” is one for the books.
So that was the election for school trustee. The benefits of being an incumbent with a solid track record and a strong message about the future for our students did not resonate with enough voters, unfortunately. The low turn out in Lions Bay as a result of an acclaimed mayor and council did not help the numbers.
While disappointed I can look back on four great years. The best way to put it is that in daily business life I sometimes go to meetings with some reluctance and negative feelings. At the West Vancouver school district that never happened. I dove into meetings and events with enthusiasm and every event, be it a board meeting, a committee meeting, a school visit, it always generated positive energy. People in West Vancouver, Bowen Island and Lions Bay generally have no idea what an amazing school district they have, one of the best in BC and probably in Canada. It competes head on with private schools and delivers cutting edge and innovative education. The dedication and professionalism of all staff is something to be really proud of, it was a joy to be working with them and I actually learned a lot too. It was an honour to have been a part of it, to have contributed to it and to see it flourish and grow. I will miss it.
Now on to new things. The show, as they say, must go on.
Making capital work for the betterment of the planet
During my years in Hong Kong in the 1990s I remember getting together with a number of locals to clean up some beaches of plastic, and by that I mean not picking up a few straws and cups. Many beaches were literally covered in plastic and the assault on the city state’s beautiful natural environment was one of the things that prompted Irene and myself to eventually move to Vancouver at the end of that decade. Yet it took another good decade and a half for deep changes in attitudes around the environment to take hold and prompt drastic action, in the West, but in China too. When we left the prosperous Sino-British free market enclave the lingering question in my mind was: “what if we are able to generate so much wealth, but are not able to enjoy it in a clean environment? What is the point?
Joel Solomon, the now well-known founding partner of Renewal Funds and champion of investing in clean and sustainable businesses, asks more or less the same thing in his book 'The Clean Money Revolution': “How much is enough?” He tracks his journey from a kid with health issues in Tennessee to organic farming in British Columbia to becoming an investor and relentless promoter of clean investing and helping to create what we now know mostly as ‘impact’ or ‘clean’ investing. His thesis is very simple: capitalism in its present form is destroying the way we live, so we need to reinvent it such that the power of capital is used to create a better and cleaner world. The argument is to not only divest from all businesses that steadily destroy the planet, but also from the ones that ravage communities and exact a deep toll on humans, physically and emotionally. Rampant consumerism is what needs to be addressed and the book posits that while we may be winning the money game, we are losing access to meaning and end up deeply unhappy. I would go even further and argue that we are currently losing both the money and mental well-being games.
Solomon tracks the origins of this thinking back to the 1970s and 1980s and notes that it took a while to organize, channel and get traction with well-to-do investors to move their money from ‘traditional’ investments into ‘clean’ opportunities. Many of these clean deals became successful and it is good to read up on the success of Stonyfield Farms – probably the best and creamiest yoghurt on the planet where Solomon was an early investor – and of course Ben & Jerry’s icecream. Such ventures that are based around clear values and focus on health and sustainability are able to change the way we consume and moreover, can change and impact the values of the larger firms that eventually acquire these smaller firms. The proceeds of these acquisitions get reinvested into new clean deals and that helps to grow an ecosystem that will cast its net wider and wider and eventually change the way we live and consume.
One of the things in the book struck me. As we have abandoned the church in the West we have replaced it with a deep worship for consumption and money, which, as we are finding out, leads to depression and, judging from social media, an endless quest for meaning. Solomon realizes in his book that this worship for money has run its course as we are not only wrecking the planet but our mental and physical selves. He points to a journey where we can learn to do with less, but also with products that are better and have more quality. And we can do this while preserving our system of free-markets and making money, we are just allocating this in a different direction. The one aspect in this argument that needs some elaboration, and it may well be outside the scope of his book, is the non-physical part. If we stop worshiping money and consumption but move to a cleaner state, what values will we be living by, and will they bring us the meaning we seek in life? Solomon dives into a description of Hollyhock, a centre for learning, connection and cultural transformation which gives a bit more context to the ‘meaning’ part which is great, but it falls short of what social-political and moral structures will underpin a world where clean money will come to rule.
There are some parallels with Steve Jobs who spent his early days hanging around organic farms and promoting the same wholeness message that we find in Solomon’s book. Yet the incredible success of Apple is now a story of what I call ‘hyper capitalism’ with manufacturing in low cost centres in China, totally overpriced products, quarterly earnings calls (a practice Solomon frowns upon) and spawning a culture of call centres across the globe where employees ensure Apple’s cashflow is given a further boost. Amazon and Facebook fall in the same category of course. This dichotomy makes it clear that even the cleanest and most idealistic businesses will eventually resort to the hard-core extractive capitalism that Solomon so detests. This is not a criticism, but merely a logical question coming out of the book and one that has to be addressed as we move forward.
Although not overly political, the book picks Reagan as the one who has helped unleash the forces that are now ravaging the planet. It is a pity that Solomon does not recognize that the Reagan era brought in the free market reforms and the appeal to individualism and entrepreneurship that are creating the very companies that are now driving the clean money revolution. And it was the former president himself who always said that capitalism was an imperfect system, and we simply had not been able to come up with something better. Solomon envisions a not materially different capitalist structure of society, only steered in a different direction and focusing on different outcomes. No one could have foreseen what the liberalization of markets in the 1980s, combined with Asia’s emergence as an economic powerhouse would mean for the environment and the way we now live.
When I moved to Vancouver in 1999 the quest was to find a different way of living in an environment where the quality of life would be better than in other centres across the globe. Solomon points to Vancouver as a success story as one of the greenest cities on the planet, but as we are learning now Canada’s west coast paradise is a basket case when it comes to fostering some measure of economic equality and creating opportunity. It may be green, but it often feels more like the playground for the uber-wealthy with an almost irrational reverence for money and property values, a very limited framework to build growth for all.
The book really hits it when it talks about entrepreneurship and early stage investing and Solomon’s lessons are applicable to beyond just clean money. He takes the smart approach by investing small amounts, taking minority positions and working closely with the entrepreneur making it clear that building relationships and collaboration lead to far better outcomes than banging the shareholder dogma ‘I need a return on my money’ routine. He is prepared to take a loss and hones in on the key question when investing in entrepreneur-led companies; “how will this person function in a crisis?” Reframing the relationship between investor and founder/entrepreneur is key and the case studies in the book underline these lessons in detail. Investing is not strictly a numbers game, it is above all a people’s game.
In the end, Solomon makes the right arguments on how to move forward (including finding ways to slow population growth), but for them to really go mainstream they need to be socialized across society and the political spectrum. The new approaches will need to part ways with government-enabled neoliberal politics and market dominant theories. The emergence of new political movements on both the left and right is evidence there is growing ‘intellectual room’ to move things forward in a new direction while preserving freedom of choice. Joel Solomon’s book is a great contribution to this discussion and at the same time a great work of reference for those who want to track the origins of clean impact investing.
How a workshop on term sheets has evolved to helping build better and deeper startup ecosystems
So when I was asked by Canada’s National Angel Capital Organization (NACO) in 2015 to do a workshop on term sheets and deal structuring, I was initially somewhat hesitant. Life was busy and what possibly could I tell angel investors about terms sheets that they didn’t already know? In my mind this was all old stuff about which there was lots of information to be found online, assuming you could Google the right terms. Yet, I gave it a go and now some three years on the 4-hour workshop has evolved from a relatively dry start to a lively discussion on deal terms and start-ups with lots of case studies and some horror stories that have already provided their value in steering some investors away from bad situations. And there is always a panel discussion that brings out even more good stuff with the audiences. More importantly, there are now more and more entrepreneurs in the audience for whom this is as instructive as it is for seasoned and aspiring angel investors. And then there are lawyers and accountants and others active in the ecosystem that join the sessions. The success has now even spawned a new workshop, ‘The Art of Valuation’ and I can proudly say that I have been to places that I never thought I would ever go to. Active investing in start-ups is now happening in places as remote and far away as Whitehorse in the Yukon and they are making solid progress.
In the first week of May a marathon was organized by the NACO team, five term sheet workshops, back-to-back, over five days in Atlantic Canada. The trip took us to St. John’s, Halifax, Charlottetown, Moncton to finish in the city that was battling the floods, Fredericton. And in each town I went through the now 90+ slides with case studies, theory and a local panel. And each time I was wondering if the audience would ‘get into it’, like it and engage with it. One of the things I have learned is that in some places there are non-stop questions and an incredible level of engagement (Regina in Saskatchewan comes to mind) and in others, well, I will not mention any names but sometimes you have to beg the listeners to challenge you or ask any questions. You never can tell where the debate will go. It also means I have learned to pace, if there is no debate I automatically fill up the spare time with start-up anecdotes and when I run out of time there are ways to speed up the content delivery without the audience really noticing it.
The Atlantic region did well in this department, there was good attendance and great enthusiasm to learn. It occurred to me that each year of course new entrepreneurs come to the market to start a business and each year fresh investors appear once they have cashed out, retired or otherwise are tired of playing the real estate or stock market game. And age is totally irrelevant: I see very young angels and I see older entrepreneurs. In my own BC-based network I am working with two female founders who are well into their sixties but who share a drive that should put many young people to shame. They all want to get going and it was no different in the Atlantic.
It also makes for great encounters, in Fredericton I ran into an older Dutch entrepreneur who was somewhat familiar to me, and when I asked if he was that well-known news anchor from the 80s and 90s in The Netherlands he confirmed enthusiastically, “yes, that is me” followed by “can you take a look at my new venture?” At the same event in Fredericton, a young female entrepreneur on the panel was able to share one of the best case studies ever on dilution and convertible notes, it got everyone in the audience (and me) thinking. In Halifax I ended up talking to an entrepreneur who had put some four years into developing a pretty revolutionary travel app – yes there is still lots of space in that sector. In Moncton a biotech entrepreneur confidently told me had raised $10 million from angels for his venture and in St John’s a team of young cleantech founders told me over beers how they had been able to get a British Columbia angel investor into their deal. And the processes put in place by an angel fund in Charlottetown were, to say the least, highly professional and impressive.
Talking terms, talking deals has moved from talking to angel investors about how to avoid mistakes and do better deals, to an integrated experience that helps the early stage ecosystem as a whole. Together with Boris Mann we developed the Common Docs, which is now a prime resource for investors and entrepreneurs in all of Canada (and internationally), delivering a great toolbox to do deals better and faster and not waste lawyer's time. Taken together, all these elements have grown into something that is facilitating the diversification and growth of our economies where more entrepreneurs (again, of all ages) start ventures across many different sectors and are able to source capital from an ever widening pool of angel investors, venture capital firms and other sources. It is a great story and it gives me enormous joy to be to be part of it.
Note: the tour would not have been a success without the great team consisting of NACO staff Yuri Navarro and Elena Dudarenko, Kirk Hamilton who presented 'An Entrepreneur's Guide to Angels' and our Atlantic wizard, Sally Ng,
Photos: from left to right: Halifax, the hotel patio in Fredericton, Moncton.
How the story of diaspora and determination entered my life and how it fascinated and inspired
My love for books must have originated in my dad’s study. Many hours I spent there flipping through his shelves were I could find anything about history, psychology, geography, biology, and of course war. Lots of war. As a teenager growing up in World War II it had framed his world, his thinking and he kept reading about it until his last days. It was a deep search for the ‘why’ and the ‘how’ and the more books and studies appeared over the years, the more sources there were to try and figure out that question. Amid all of the books there was one thick volume that showed victorious soldiers in a desert like landscape, all smiling and all in color. As I must have been five or six I was able to organize events based on the color or black and white nature of the photos, and the cheering soldiers were not from the 1940s. It fascinated me although I could not pinpoint why they were so happy and where exactly they were.
The black-and white shots in other books were far more gruesome. Emaciated corpses, gallows, kids rounded up by armed uniformed men and the haunting photo of young men chased down a Dutch street by – that much I had learned by then – German soldiers. Over the decades that followed the story of the Holocaust unfolded for me and the razzia on the Jonas Daniel Meyer Square in Amsterdam in February 1941 would go into history as one of the first and more brutal exercises of Nazi persecution in the occupied nation. Of the 427 men rounded up that day most had died under horrific circumstances by the summer of that same year in the Mauthausen concentration camp. The contrast of the cheering soldiers and the terrified young men was telling.
Life in the early 1970s in The Netherlands was, by all accounts, great. The restored economy after the war had started to pay its dividends, economically and socially. The age of flower power influenced middle class life and open liberal norms where an integral part of the left’s steadily growing influence, the ruling Labour Party was above all, perceived to be cool.
And the Dutch punched way above their weight internationally: calling out the Greek colonels, protesting against Pinochet in Chile and against the fascist regime that was still governing Spain under General Franco. As fierce as the government and the many activists were about transgressions against human rights in said countries, as deep was the love for other states. Passion and support for the young state of Israel, barely twenty-five years old in 1973, constituted an article of faith in the lowlands during the seventies. I still recall the emotional embrace between Dutch Prime minister and Labour leader Joop den Uyl and his Israeli counterpart, Yitzhak Rabin. There was a deep love for Israel and during the Yom Kippur war a local artisan store in my hometown raised funds to send to the Jewish state, it was only natural that we as kids found a way to contribute a few coins to this noble cause. A small nation, up against a massive force of Arab nations armed by the Soviet Union put Israel in the position of the underdog. They could and should count on our support. And although it is hard to make the retroactive argument, we must at the time have sensed that Israel was given a shot not just because it was an underdog and a fresh young nation. Its birth and fight for survival in all likelihood carried a dark part of our own Dutch history that had to be redeemed.
As deeply rooted I was in Dutch culture my yearning for the outside world was big. America was light years away and my dad’s business trip to New York was a community event that we talked about for weeks. China was even further away and we were led to believe that Mao had figured out socialism and that the Chinese were happy denizens in their monotone outfits. Too young to understand but having the right age to be fascinated by the foreign, I yearned for everything from outside our borders, the more exotic the better.
It was in this context that our fairly progressive school implemented a weekly program of folk dances, from grade one to grade six. It was of course awkward in the beginning, but gradually we got the hang of dancing for a few hours each week, opening our world to new rhythms and foreign cultures. The dance teacher turned out to be a man of the world and had organized the visit of an Israeli dance group to our town, including a performance at the school and some homestays for the young Israeli dancers. As luck would have it, my mom served on the school board and invited the group’s leadership team for a dinner in our house. Seated next to the wife of the group’s leader, Ruth, I was taken in by what these tough and Mediterranean looking people brought into our lives, arguing loudly with each other and with their hosts. It fulfilled my need for the exotic and the more exciting things the world had to offer. The group’s leader was a quiet man and most of the attention went to his radiant wife and the lead singer in the group, Effi Netzer who as I later learned was and still is one of Israel’s pre-eminent folk singers.
There were also a few men that tagged along with the group and their role was not all that clear. They hung around the group in a disinterested way and had no creative responsibilities and I recall the ongoing debate among us kids, wondering what Gil, Dov and Moshe were up to. It was my father in the end who undid the magic but managed to up the fascination with the entire visit by disclosing that these were armed security people. He could of course not resist mentioning that they were ready ‘to go’ if any threat to the dance group would present itself. The conflict in the Middle East had somehow made its way to a sleepy Dutch suburb, some excitement, at last !
Connecting the Dots
All these impressions started to merge and make sense in one way or another as the threads provided by the horrors of the Holocaust merged with the unfolding story of the state of Israel. As impressed as a young kid can be with armed security forces in the house, it was the realization that our visitors had no other option than to bring their own protection to the table wherever they traveled. It was clear, even then and at that age that no one else would really bother to ensure the safety of travelling Israelis. On the contrary, in the few instances that they had realistically expected to rely on foreign security it had failed miserably, the wounds of the massacre at the Munich Olympics in 1972 were still fresh and raw.
So I began to stich the pieces together and after reading Leon Uris’ books Exodus and Mila 18 as well as Dominique Lapierre and Larry Collins’ ‘O Jerusalem’ the picture of Israel’s emergence became clear. A home for a persecuted people who had been given no other option than to fend for themselves, where and wherever they were, conquered meter by meter, shedding lots of blood. From expulsion to diaspora to holocaust to redemption through statehood, the Jews had been able to overcome the deepest misery history had meted out and had returned to their ancestral lands some two thousand years on. And the cheering men in the book in my dad’s office were Israeli soldiers who had recaptured Jerusalem during the Six-Day War of 1967. The story of Israel represented a form of determined self-reliance that for us as post-war, young and relatively complacent Western European kids was hard to fathom. It was exactly what it made so appealing. What for Israelis was an inborn need for survival was for us something we could only hope to strive for.
What became even clearer was that the terms Israeli and Jew are interchangeable. Many Jews - in fact most of them – were not Israeli, yet they are part of the same tribe. If there was any doubt about this it was not long after the visit of the dancers that on a hot summer day through the open windows in our neighbourhood I could her radios announcing how Israeli commandos had liberated Israeli and Jewish hostages at the faraway airport in Entebbe, Uganda. They were saved from likely mass execution by terrorists. While most passengers had been released after a number of days, the terrorists had ensured to separate all Jews from the other passengers. For those not up to speed of what happened at that faraway African airport, I encourage you to Google the name of Dora Bloch, and read on from there.
Israel’s bold military move delivered the exact evidence of the self-reliance that Israelis had to exercise in order to survive. For when it came to the crunch, the rest of the world either did not care or were too conflicted to take a position in what appeared to me to be a very simple ‘good’ versus ‘bad’ scenario. Baffling as it was, the UN found room to criticize Israel for violating Uganda’s airspace (remember Kurt Waldheim?) and Air France captain Michel Bacos who had remained with the hostages when given the option to go also came under fire for reasons no sane human being could possibly comprehend. It was all evidence of an incredible double standard against which Israel – and Jews in general – were measured, something that continues to this day in each and every international venue.
As time wore on the contours of the Holocaust started to become even clearer with online testimonies of survivors and newly found documents in archives across Europe. We had dutifully learned that it all was the work of one madman whose extreme racist views swayed a nation down a troublesome path of mass murder and eventual self-destruction. Yet we had to make some effort to find out that, what Hitler did was simply activating the deep undercurrent of anti-Semitism long existent before his emergence as a political force in Germany. And not just Germany, I might add. And although the Dutch could claim some high ground as having opened our doors to Jewish refugees throughout the centuries – proudly marketing Baruch Spinoza and Anne Frank as ‘Dutch’ wherever possible – most of Europe was drenched in deep anti-Semitic sentiments. The fact that Christianity finds its roots in the worship of an errant Jew who had challenged the orthodoxy of his nation’s beliefs and found death on the cross at the hands of the Romans whose hand in turn had been forced by the local Jewish clergy, did not help.
It took the Dutch nation to this day to acknowledge the pitiful and regrettable role it played in the persecution and death of some 102,000 Jewish citizens as rounding up the young men at the Jonas Daniel Meyer square was just the start. It was something that was conveniently swept under the carpet during our history classes and the fact that there had been some Jewish survivors was presented as evidence of the heroic efforts of the Dutch resistance. For instance, it was not until 2011 that Ad van Liempt’s book about the complicity of the Dutch police in the deportation of those Jews unveiled the fanaticism and depravity that was put on display in facilitating the Nazi occupier’s dirty work. It was a nauseating read. Again, Dutch guilt more than anything else was what drove this ‘special relationship’ with Israel.
Israel’s confidence and successes grew under holocaust survivor Menachem Begin who inked the nation’s first peace deal with Egypt and who had the clairvoyance to neutralize Iraq’s emergence as a nuclear threat by bombing the reactors in Osirak. The latter was seen as an act of aggression but by most objective standards, a sensible pre-emptive act. Israel had by the early eighties transformed itself from a young and threatened nation to a confident power player and the correlation between success and worldwide criticism manifested itself strongly after Israel’s invasion of Lebanon in 1982. And although Israel was absolved of the relentless criticism over the atrocities during that war – read Dov Landau’s phenomenal biography of Ariel Sharon – a questionable pattern had been set. The love affair with the young state had started to show its cracks and I clearly recall how among the late teenagers that we now were I had to outline the justifiable and rational underpinnings of something the rest of the world considered an unjust war. No, the invasion of Lebanon was not a pretty affair, but nor was lobbing missiles into Israeli schools located in northern Israel.
However inspiring the story of Israel’s birth and early years was to some, geopolitical realities framed the nation’s successes much differently. The ‘Arab oil tap’ and the steadily growing Muslim population in European cities would shift attention and respect away from Israel at a time when its underdog status had long evaporated. The old contours of anti-Semitism started to emerge again after an absence of only a few decades. In recent years it seems to have been unleashed in full force, note for instance how the leader of the British Labour Party recently found himself embroiled in a scandal for supporting the very sentiments we had all thought had disappeared from mainstream political discourse. It is not a coincidence that Israel’s current prime-minister, Nethanyahu has often said that what is left of European Jewry should pack up and come home to Israel.
It is indeed sad that in a city that appeared to have successfully resurrected itself from the horrors that took away most of its Jewish citizens, anti-Semitism is back as part of daily life in the city. A city whose name in Yiddish designates a ‘safe place’ something it really wasn’t in the end. As a kid I grew up not only in my dad’s study learning about the Holocaust, Jews and Israel, I grew up with people that hardly ever used the word Amsterdam. They just called it what it was supposed to be, a great and safe place: Mokum.
Then and Now
The scene in our little school was breathtaking. Some thirty Israelis in their early 20s performed dances and song in the school’s central hall and the place broke down under the incredible energy, thrill and boundless enthusiasm. We as kids went crazy, clapping and cheering, we had never seen anything like this before in our lives. It was as if rock stars had descended upon our little school. The dances apparently were just the start as we were promised a solo performance by the group’s female lead singer. The announcer, probably forgetting he was at an elementary school, could not restrain himself – nor could we – over her incredible beauty. Tanned with dark hair and on seventies-style high soles, Haya Arad banged out a song that many years later with the help of Google and Spotify I was able to discover was the Nurit Hirsh & Ehud Manor classic, Ba-Shanah ha-Ba'ah. She performed it as if she were a big star in a major venue rather than a Dutch school with some kids and teachers and parents clapping and singing along. We all went into some frenzy and the school was shaking, this was music, this was singing !
The show finally was tilted to a different level when folk singer Effi Netzer took the stage with his accordion and urged everyone to sing long with a self-composed catchy tune. To this day I can sing it and realized it revealed the deepest aspirations of all of Israel:
Time will come, hear and say
Peace is yet on its way
Together and never apart
Sing this song with all your heart
This was followed by a never ending Halellujah, Hallelu, Hallellujah, Hallelu …. “
When the group left, the now celebrated security men in tow, we begged them for signatures and encircled the bus so it took them quite some time to make their way back to the airport. The event sealed a love affair and a hope that whatever was in store for Israel, we all hoped for it to be the very best.
More than anything, the story of the Jews and their hard fought journey back to Israel impressed upon me the virtues of self-reliance and determination against all odds. But there is also a component of guilt as our post-war generation had escaped the worst ravages of history and was given access to a seemingly carefree world. And maybe even some envy, because what if history came back and it turned out that we were totally unprepared for dealing with it ? The latter question may be answered in decades to come and in that process, what better to do than pass these lessons from history on to your children?
Center: The razzia on the Jonas Daniel Meyer square in Amsterdam on 22 en 23 February 1941.
And: a stone’s throw from the Israeli-Egyptian border near Eilat, my two daughters and a Dutch-Israeli friend unaware of the meaning and history that this photo represents, they just had a great time snorkelling in the Red Sea.
Understanding why and what we remember through the European perspective
A few years ago I spoke some words at the Remembrance Day ceremony here in Lions Bay– and I focused on how people in Europe experienced being liberated by Canadian troops in 1945. It makes sense to reflect on that, as we need to understand what they, these brave men and women, accomplished. And yes in a way, if The Netherlands were never liberated back then I would most probably not be standing here today.
Norman Kirby was among those troops. You landed on D-Day and marched and fought all the way up to the northern parts of The Netherlands and into Germany. By late August and early September 1944, allied troops crossed into Dutch territory. It caused a real panic among the Germans and their collaborators who started to flee and whose operations were severely impacted. The war could have ended right then and there if the massive allied attack on Arnhem, Operation Market Garden as it was called and you all probably know it better by the movie about it, ‘A Bridge too Far’, had succeeded. It failed as it met fierce German resistance and it caused the allies to get stuck behind the great rivers, separating the West and North of The Netherlands from liberated territory.
What followed was a winter of hunger, plunder and terror where the German occupiers basically destroyed what was left of The Netherlands while starving its population. The place was reduced to rubble. My own father who was seventeen in that last winter had to hide when German troops raided towns and villages to capture young men to work in Germany’s readily collapsing war industry. My father survived, as did my grandfather who was interned in Buchenwald, one of the more notorious concentration camps.
Around the same time that the allied troops entered The Netherlands, Anne Frank and her family were deported on September 3, 1944 – the last transport of Jews to Auschwitz from The Netherlands. The Frank family had been following the advance of the allied troops from their place and those of you have read her diary will remember the excitement when they figured out that allied troops were getting closer and closer to liberating The Netherlands. For them it was the last bit of hope that separated them from a certain death.
The story of Anne Frank and her family symbolizes the deep horror of the Nazi occupation. Their ordeal started in 1942 in what I find to be one of the most gut wrenching things I have learned about the Holocaust. A note from the German occupiers that her oldest sister, Margot, had to report to the train station on a certain night, on her own, unoccupied with only one piece of luggage. And yes, she had to walk there on her own saying goodbye to her family, forever, in the hallway. This is one of the cruellest things one can imagine and for the Frank family it was the sign to pack up and hide, a mission which almost was successful, as we know only her father Otto managed to survive the war.
As a kid I just did not grow up with those stories, they were part of post-war life in The Netherlands. My parents would point to Jews that had survived, to people that had collaborated with the Nazi occupiers, to people who had served in the resistance, to people that had lost loved ones and yes, on a lighter note, to some of the girls who got hitched to a Canadian soldier when they finally arrived during the first week of May 1945, liberating the Dutch from five years of occupation and the ‘winter of hunger’ as it came to be known.
These stories were essential in remembering and why freedom was such a precious thing. On this side of the ocean here in Canada we learn about the sacrifices of the soldiers and the battles for freedom, but in the Europe I grew up in I had learned firsthand what it actually meant what Canadian soldiers delivered us from. My father took me to the Remembrance Day services in May and after they ended he and I would casually stroll back to our house, leaving behind a square filled with floral tributes to the fallen. He would tell me that none of the unborn would ever realize what freedom really meant. In my childlike enthusiasm I firmly rejected this notion, but subconsciously I knew he was absolutely right. Not until you have experienced what it is to see entire families disappear from your street or to sit on a darkened attic for days on end to avoid capture, deportation and death, can one come to realize the true value of freedom.
And remembering is very hard. Over time things get lost, or sometimes people deliberately forget and move on. The Dutch never came to terms with the fact that out of 140,000 Jews, only 36,000 survived the war. Next year I will travel back to attend the unveiling of the Monument of Names in Amsterdam, a monument that has the names of each and every of those 104,000 Jews on it, much like the Vietnam monument in Washington, DC. It was built by letting donors adopt the names of murdered Jews and we as a family adopted a few. In doing that you bring them back to life, a bit. But note, it took some 70 years to get to this monument and yes; Anne Frank’s name will be on it.
But, if we do not keep telling and sharing these stories, people will not remember the why and the how of war. And people will no longer fully grasp why the Dutch were elated to see Canadian troops roll into their cities in the spring of 1945. So remembering today is not only to honour the soldier, but to fully understand what they fought for, what they gave their lives for.
This was the text for my words to the Lions Bay community on November 11, 2017. The photo of Norman Kirby was made during the ceremony of 2016.
Is a monetary crisis the real threat, and if yes, what will it look like ?
While climate change appears to be the one existential threat to civilization to some and mass immigration to others, it can be argued that the far more imminent one is monetary collapse. Lionel Shriver takes on this theme in her latest novel, ‘The Mandibles: A Family, 2029-2047’. In it she paints an in my opinion unusually realistic view of how a once wealthy family is reduced to poverty and famine as the value of the once mighty US Dollar evaporates.
Shriver’s trademark approach is to take on some current issue and frame it into a unique and often dark fictional narrative with character studies that leaves you wondering if you have to read the whole book again as it is not only that good, you are still ridden with a myriad of questions about each protagonist in the book. She has successfully taken on America’s ongoing healthcare trauma in ‘So Much for That’, obesity in ‘Big Brother’ and extreme school violence in ‘We Need to Talk About Kevin’. The latter was turned into a movie with Tilda Swinton and the story leaves you wondering about the horrendous reservoirs of misery that the human mind can apparently sink to. Beyond depressing, but a captivating read. ‘The Post Birthday World’ on the other hand is far more upbeat and captures an extra-marital affair in minute detail, exploring two different outcomes: if a kiss had or had not happened. So my expectations for her latest tome, ‘The Mandibles’, were quite high and Shriver does not disappoint. On the contrary, she has taken her social commentary to a new level altogether.
It would be hard to describe the book and not give away its plot, but in short it comes down to the greenback losing its value and the countries that have so generously advanced money to the debt-addicted American nation now seek repayment by other means. The world’s reserve currency is now the ‘bancor’ and America’s first Latino president resorts to extreme measure to ensure that the nation’s debt can be repaid in order to avoid a looming war with, among others, China. As we have seen in real-life with Greece’s debt crisis, the pain of drastic monetary action falls on the citizenry and so it falls on the Mandible family whose journey we follow over a 25-year period. Again, what makes Shriver’s writing so compelling is the plausibility of her fiction. In many ways we have already and consciously started the downward journey to a world where the greenback is no longer valuable and where we have to find our way back to gold and other instruments, like bitcoin, that store and preserve value.
It is not hard to imagine a world without currencies and cash and just imagine if we did away with it all, would the physical world not look exactly as it is now? A house is still a house, with or without a mortgage contract, right? The Mandibles is almost a piece of basic economic theory explaining how the artificial monetary construct on which we have built our society is vital in sustaining our physical world and pretty much all relations that govern our lives. Once money evaporates, the world around us changes so much that our core foundations get uprooted to such an extent that everything around us falls apart and gets destroyed. Rip up a mortgage contract and your house will all of a sudden look very different, that is what Shriver’s book tells us.
So yes, although fiction, the book is a piece of social-political commentary that resonates deep in the current environment, something that Shrives alludes too when referring to the 2008 financial crisis. In her book, Keynesian budgetary policies are demonstrated to have outlived their usefulness and a tech empowered welfare state that is used as an outsourcing center for the world’s new economic powerhouses (China, India) stand out as examples of our near term economic prospects. The crowning piece however is a libertarian nirvana that has seceded from the United States. On close inspection however it is nothing less than a Darwinian struggle for survival where the absence of government supported healthcare and rampant crime are the inescapable side effects for those that seek to claim one of the last remaining pieces of freedom on planet earth.
As dry and haunting as this may sound, Shriver brings this dark vision of our future to life with some phenomenal protagonists that span four generations. The kids that are our current day millennials, the post-boomers, boomers as well as the last representative of the greatest generation embodied by the Mandible pater familias ‘Great Grand Man’ whose fortune everyone is after are condemned to each other and to figuring out life without the hoped for family fortune. As a consequence, each family member has to fend for his or her own interests. And Shriver dives right into her knowledge of self as she describes the impact of the economic crisis on the generation that ultimately carries the most guilt in our monetary undoing: the baby boomers. Obsessed by self-interest, health and eternal youth, these are the ones that have to fight hardest to accommodate the most to the unforgiving post-dollar world. One of them, Nollie Mandible, is the boomer that is able to redeem herself and is in all likelihood Shriver herself as she paints the way out of the disaster that has effectively destroyed the United States as we know it.
It did not take me long to finish the book, it was that riveting a read, blending personal fictional drama with a fairly plausible analysis of the world’s future if we keep borrowing and printing money. It is after all not that hard to fathom that at some point this century Indonesia will invade Australia, yet it takes some dark futurology to invoke it in a novel as an entirely logical outcome of a re-ordered world. Shriver does that, with both humor and substance, and has put down a book that we all should read and reflect on while we still have our hands on the monetary steering wheel.
The region’s first angel investment conference aligns entrepreneurs and funders for a diversified regional economy
Last week I attended and presented at the Caribbean Angel Investor Forum in Montego Bay, Jamaica, the first conference of its kind. Jointly organized by the Caribbean Export Development Agency and the World Bank. The goal was to put angel investing in the Caribbean on the map and seek to professionalize the emergence of a new asset class which can be a key driver for economic growth and job creation. It was hoped that it could also deal with debunking the stereotype of angel investing as some sort of game for the wealthy only. Not only do many people invest at the angel level these days, they do this in combination with offering mentoring start-ups and helping to build ecosystems that will support stronger and above all more diversified economies.
A number of angel investors, lawyers, entrepreneurs and government officials from all over the Caribbean as well as the US and Canada exchanged ideas and above all sought to learn from each other. The Caribbean has not been immune to global shifts and the Trinidad delegation pointed out that their economy could no longer take oil revenues for granted and that diversification of the economy through angel deals was a necessity for them. While each country had its own issues, it was key to bring them on all on the same page with regards to proper angel investing. It was therefore good that at the opening Tomi Davies from Nigeria laid down very clearly that early stage investing was primarily investing in people and building long-term relationships. It was relatively easy for me to expand on that theme by explaining that I had seen well-funded companies with great technologies fail, while I had seen relatively lower-tech companies with limited amounts of cash flourish simply because of the people involved.
While in some Caribbean countries the concept of angel investing has only just taken hold, others are making solid progress and have raised the bar significantly. In the latter category falls First Angels Jamaica, which has built up a small portfolio of interesting investments but above all has developed a very disciplined investment approach. At the same time they are lobbying for government and regulatory support, which will benefit all Jamaican investors and entrepreneurs. Its chairman, Joseph Matalon, opened and closed the conference and not only shared his experiences to date but pointed to the challenges in getting government support. In that he elaborated on the fact that politicians are driven by election cycles and that building ecosystems where angels invest and nurture emerging companies takes much longer. This is something we have seen in Canada as well where the focus on natural resource projects somehow always outranks entrepreneurial activity during election cycles. In any case, Jamaica’s minister of state for finance, Fayval Williams, was present to hear this message and took the opportunity to summarize the progress the island state has made and emphasizing the fertile ground it now is for entrepreneurial activity.
It was timely that the NACO common documents had just been launched so I could give some depth and materials to my workshops on deal structuring and due diligence and share some vital education with the Caribbean community. There was energy and a clear thirst for knowledge on how to negotiate financings, how to create solid working relationships with entrepreneurs, and equally important, how to get angel investors to work together: share deals, pool funds and do due diligence together in an organized way.
The best part of the conference for me were the entrepreneur sessions. A number of regional start-ups pitched their ideas followed by ‘speed-dating’ at a number of tables. The impressive thing was not only the quality of the pitches – they would easily be very competitive in a North American setting – but the visionary and global approach each entrepreneur took. They all understood that their market was pan-Caribbean and global and their plans and ambitions more than underlined that. A much needed emergency platform, an extremely energetic candy manufacturer, a Caribbean Uber-type transportation play, an in-ABM advertising deal that generated some interesting revenue streams and a platform for stroke and elderly patients brought the audience to action. It was great to have dinner afterwards with a few of them, one local entrepreneur had graduated from MIT, set up his mobile survey conversations start-up in Kenya and had now stopped at the conference on his way to Silicon Valley to talk about his Series A financing. Global thinking in action indeed.
So there is no lack of ambition and willingness to finance and nurture an emerging angel and start-up ecosystem in the Caribbean and kudos to those that have taken the plunge in making it happen. But there are some major hurdles too. Lack of capital is not one of them according to most of the participants although some time was spent on figuring out how to mobilize the Caribbean diaspora to invest back home, much like ethnic Chinese have done when their country roared back to growth in recent decades. Lack of investable deals however was the key and most cited issue. Building deal flow not only requires patience, it also is a matter of education, mentoring and changing a mindset as is engaging with local universities and possibly enticing diaspora talent to come back and start companies. Add to that the common complaint that local entrepreneurs often lack the maturity to negotiate a deal and be mentored and it became very clear where the energies are to be focused. A combination of education and trial and error will in the end yield results and this is exactly what Matalon alluded to when he spoke about the time and effort involved in building successful start-up ecosystems.
The key driver for this however in the end is success. Not until the first early stage deals grow, become success stories and generate exits, will the larger environment take notice and mobilize new entrepreneurial minds who have seen that it can be done while also unearthing new pools of capital.
While each participant came away with different insights and ideas, all of them were energized. At the same time they were armed with a good sense of reality by understanding in what areas work needs to be done going forward. The first Caribbean Angel Investor Forum was a well-organized effort and a good start to get that process going. Keep your eyes open for the next emerging start-up market.
Creating a Canadian standard for term sheets to get more and better deals done, faster
Over the past year and a half I have been conducting a workshop on term sheets and structuring deals across Canada. This is part of the National Angel Capital Organization of Canada’s (NACO) effort to encourage angel investing and in particular help tech businesses get off the ground. It has taken me to Niagara, Kitchener-Waterloo, Calgary, Victoria, my hometown Vancouver, Kingston in Jamaica and next week Regina and Saskatoon. Wherever I go there are keen and very diverse audiences willing to learn how to structure and do better deals. Having done this work for many years it is sometimes surprising to see how light the knowledge about this is on the ground and what difference an intense 4-hour workshop can make, not to mention getting people enthusiastic about participating in an asset class that was until recently the domain of a privileged few. Because yes, people are writing cheques into high-risk ventures or into funds that are trying to get a return on supporting emerging tech firms across Canada. As I have learned, the term sheet is the starting point of what sometimes can be a very long and rocky relationship, so better get it right on day one.
In the process it has become clear that Canadian start-ups often use outdated term sheets, sometimes found after a Google search or by simply copying American documents that are an awkward fit for local deals. As a board member of an angel fund, I see many founder generated term sheets and even when there are reputable advisors or directors involved, the quality is generally poor. I do not need to see a term sheet where one page is dedicated to director biographies. These are not deal terms and documents like this go straight to the garbage can, unless we find the company willing to renegotiate and rewrite the document. In most case such a joint effort yields much better term sheets and at the same time we have enhanced the entrepreneurs’ understanding of the process.
So how great it was that Boris Mann – another Vancouver tech veteran – and I got invited to project manage #NACOCommondocs, a project designed to launch a Canadian standard for Common and Preferred share deals as well as Convertible Loan and Convertible Equity, the latter also known as SAFEs, or Simply Agreement for Future Equity. As easy as it would have been for Boris and me to lock ourselves in a room for a day and bang these new standards out, they have to reflect the Canadian market place and regional opinions. And, some deep legal thought from the six law firms that are sponsoring this important project, not to mention accounting opinions. So we have travelled to Montreal, Toronto, Calgary, Victoria, Halifax and of course Vancouver where lawyers, angel investors and entrepreneurs commented on our work and at times ripped apart some of our assumptions and deeply held beliefs. Our egos, believe me, can take that. There is nothing like solid and constructive feedback that seeks to improve your product. And yes, there are regional differences. In some parts of the country angels will insist on having the ‘redemption right’ in any term sheet, whereas in Vancouver and Calgary the mere mentioning of this concept generated outright hostility. Try and synthesize those two points of view into one standard document!
But as always in life, the truth is somewhere in the middle and there are many ways is which we can bridge the discrepancies and still present a menu card from which to build a perfect term sheet for your start-up. Both angel investors and founders can now use a base term sheet with options to extend with additional clauses that will better reflect their deal. At the same time lawyers will no longer have to worry about wasting billable time on educating cash strapped company founders on what a term sheet really is. They will be able to point to the NACO website and say: educate yourself, negotiate a deal and we can help you with the rest.
As we dove into this it became clearer that there are indeed many aspects depending on if you are doing a common share, preferred share, convertible loan or a convertible equity (SAFE) deal. Tax implications, share options, vesting schedules, you name it, it is all more than just sticking a clause in an agreement. So in addition to the term sheets and accompanying educational notes we will present a number of one-pagers on the NACO portal when the project is launched April that will complement and enhance knowledge. Expect notes on tax credits, friends & family rounds and the not unimportant one that answers the question: which document to use when?
But above all the key drive is to build better companies as Canada’s economy is diversifying while at the same time being asked to compete in a razor sharp global environment. Last week’s BC Tech Summit in Vancouver made me realize how far we have come over the past twenty years and how mature start ups have become, even when (often) using crappy term sheets. There is strong momentum with many ideas and readily available capital, although we can do more to create better companies and mobilize more investment dollars. The challenge will be for solid people to combine these ingredients and build a strong technology cluster that will – as much as angel investors like exits – stay in Canada and build wealth right here.
The pioneer of modern day populism gets ready for a vote that may change very little
Being the first always takes some unusual bravery and unique character. It was the Dutch that started experimenting with right leaning movements that put immigration on the agenda in the late 1990s and its initial champions were indeed hardly average citizens. A flamboyant gay professor, an errant moviemaker and a poor Somali refugee turned politician were the pioneers in ending the small nation’s politically correct consensus model. Championing enlightenment values they warned of a society that would succumb to accommodating non-western values and, eventually, the erosion of individual rights. The professor convincingly argued he was not prepared to fight the 1960s battle for women and gay rights again, the refugee and moviemaker teamed up to make a controversial short film about the submissive role of women in Islam. Brave as they were, within short order two of them were murdered and one was hounded out of the country to take up US residency. Pim Fortuyn, Theo van Gogh and Ayaan Hirsi Ali had been able to create a foundation on which the Dutch will now contest a much anticipated and divisive election that will tilt country further to the right, fracture its parliament and decimate one of the dominant purveyors of that famed consensus, the Labour Party. That said, it remains to be seen if the March election will bring the sort of change that some are now expecting.
Almost each and every piece written about The Netherlands ever since Fortuyn rose to international fame will wax on lyrically about Dutch tolerance and its liberal attitudes. The lax attitude to drugs in particular gives North Americans something to drool about for some reason. Foreign commentators fail to understand and align their rosy view of the country with the realities that literally brought blood to its streets. The perceptions are as mistaken as they are misinformed. The Dutch by nature are not more liberal than any other group: history and culture have forged a nation that is at best extremely pragmatic and at worst pretty indifferent. The political violence and drama are not a shattering of a liberal nirvana, no; they represent a logical reset, as something was apparently not working anymore. The pragmatic consensus had run its course, a notion not fully understood around the globe.
When its economy rose from the ashes in the post war world, cheap labour from Southern Europe and notably Turkey and Morocco fuelled growth and created a lower class of non-integrated citizens of whom the expectation was that they would pack up and go once they had reaped rewards from a Dutch dream. But nothing like that ever materialized – on the contrary, family reunifications increased the size of this group dramatically – and a growing Muslim minority became a feature of Dutch life. In a nation that stood silently by and in many cases actively collaborated in the deportation and murder of 102,000 of its Jewish citizens, the guilt of that weighed so heavily that any form of discrimination, indeed any critical discussion of minorities became a total taboo. The instinct was to make it work as best as possible and to rather not talk about it. In an odd twist of fate it was the Dutch contribution to the holocaust that ensured that instead of Jews its new and sizeable minority was now Muslim.
As the 1990s unfolded and more refugees (Eastern Europe, Africa) came to take up Dutch residency, the European Union added its weight by usurping the nation’s sovereignty, its currency and with it its confident sense of self. Native Dutch emigration against a backdrop of political discontent and an emerging economic crisis set the tone for the first decade of the new century. If you can get out, you might as well. For a brief moment the belief that things would be fine emerged, hopes of a ‘moderate Muslim’ and successful integration patterns heralded some calm, but not for long. The Brexit vote and migrant streams from the Middle East boosted the fortunes of the new right and put pressure on Mark Rutte, the current prime minister who is heading a reasonably successful Liberal-Labour coalition.
With its three pioneers off the stage, Fortuyn 2.0 emerged in the form of Geert Wilders, an erstwhile liberal politician who broke ranks with his party over Turkey’s potential EU membership. His words were harsher, far more direct including a political rally in which the crowd shouted “less, less!” to Wilders’ question if they preferred “less” or “more” Moroccans. He answered his audience that “we will take care of that” and it landed him in court, which, true to the populist instincts of his movement only boosted his popularity and poll rankings. Any attention is better than no attention and the nature of his campaign had become mainstream as his star continued to rise in the polls.
Another thing the nation pioneered successfully was reality-TV. Yes, the wave of shows that enveloped the world originally started out with the ‘Big Brother’ series in the 1990s: launched in The Netherlands, exported globally. The coarser and the more vulgar the language, the more viewers, and so it went with Dutch politics where – much like Donald Trump – the race to the abyss was accelerated in order to get more media attention. Morality and decency be damned, the voter not only stopped caring, they had developed a veritable appetite for it all. And leave it to the Dutch to do one better. Only a few weeks ago it was treated to a real ‘golden shower’ video with a famous 1970s & 80s singer allowing herself to be rained on by her lover. Yes, by all means do the math on her age.
So in this cacophony of noise, political instability and eroding sense of nationality, populist parties are thriving and if polls hold steady Wilders’ Freedom Party has a decent shot at being the largest party, with second place going to Rutte’s free-market liberals, the very people who until now represented the real Dutch right. The left has fractured into a Socialist Workers Party, Party for Animals, GreenLeft, Democrats 66, the remnants of Labour and 'Think' a party representing immigrants. To top it all off the Party 50+ is gaining traction in a nation where the greying top layer is increasingly worried about its entitlements although it has consistently refused to produce babies at the replacement rate in order to secure these benefits. And at the same time no one is interested to have the required level of immigration to supplant these unborn babies. Call this hedonism at its best. So in a bizarre way the fear of immigration contrasts itself with the need for immigration, a fact none of the Dutch parties, left or right, has so far really acknowledged.
Dutch consensus worked well historically as proportional representation forced the parties to collaborate, sometimes tilting left, sometimes tilting right, but never any dramatic shift in either direction. The pragmatic mandate brought non-ideological common sense to governing the lowlands and that may indeed explain the nation’s social and economic successes in the post-war years. The question now is if the current pressures on the system will force it to break or not.
If Wilders wins big, he will most likely not become prime minister as any coalition can lock him out of power, a position he actually may prefer. It is better to oppose and make the usual noise than to take real responsibility. At the same time any coalition government will be weak by virtue of the number of parties now required to get support from a parliamentary majority. So the best the Dutch can hope for is a fragile consensus that may not be able to carry the load of issues it is being asked to deal with.
The cracks that have started to emerge in Dutch political system after Fortuyn, Van Gogh and Hirsi Ali may reach deeper after this election. But it will not be an election to end it all, more one to perpetuate it all.
UPDATE March 16, 2017:
So the results are in. The populist right under Wilders gained, but not nearly as much as was projected only a month ago. The newer parties on the left (Green, Party for Animals, Think) did well too, but not nearly well enough to change the game. The two largest parties lost big (Labour was clobbered and the Free-market Liberals lost but are still the largest party in parliament with 20% of the seats) while the traditional Christian-Democrats and Independent Liberals recovered some ground.
So? The electorate gave a stern but mild warning to the traditional parties to get their act together. The voters pulled both right and left, but not hard enough. The traditional centrist parties now have the unenviable task to agree to form a four party coalition that will need to steer the small nation through the stormy waters it is in. A mild repudiation of the ‘ruling elites’ has given these very elites the task to try it once more, but they will have to take into account that that there is some unhappiness that will need to be addressed.
An outcome where no one wins is probably the best definition of a compromise. The Dutch are good at that and in the end may not be a bad thing at all.
Will creative destruction be America’s future ?
One of my good friends here is a true old style American liberal. Crossed the border into Canada as a result of his disgust over Vietnam in the sixties, became a professor and now an angel investor and avid student of history. But a liberal, above all. We get together often to talk business and politics, so not long after the election of Trump I reached out, preparing myself for a somewhat emotional lecture of how devastated he was about it all. Yet his reaction was as calm and measured as it was baffling to me. ‘No’, he said in a resigned manner, ‘this was bound to happen, if something is not working Americans will try the next best option and it is as simple as that’. ‘But’, he added, ‘progressivism as we know it is dead in America, that’s for sure’. No anger, no frustration, just a simple statement underlining how Americans pragmatically tweak and change things as they see fit.
It was a sobering but above all realistic call of what had just transpired. His words lingered in the air in the subsequent weeks as I tried to unwind the new balance of power, figuring out how things would be managed from Washington going forward. The name that kept popping up was that of Steve Bannon, CEO of Breitbart Media and Trump’s campaign manager. Having met Andrew Breitbart many years ago when he was only known as ‘Drudge’s Westcoast guy’ I was quite familiar with the brand and the general political direction of the media outlet Bannon invested in and now managed. It has to be said though that when Breitbart passed away there was praise for him from all sides of the political spectrum, a sentiment that was hard to find now that his successor was ensconced in the White House. But what was Bannon really about, what were his objectives? The superficial slurs of ‘white supremacist’ seemed too banal and uninformed, there had to be some deeper grounds on which Bannon made his career as an activist and that landed him only steps away from the presidency.
Once I had digested some readily available articles about him, most quite overlapping in terms of information, I watched ‘Generation Zero’ a documentary Bannon released in 2010 and which supposedly lays out his vision for America. It is a somewhat dark and haunting epic centered around the financial crisis of 2008, its origins and its key perpetrators, at least according to Bannon: the baby boomer generation. To put it in simple terms, he sees four turning points in American history, each an economic crisis that mutates into an all out war that unites the nation and in turn resets American life to a new start. The American Revolution, The Civil War and the Second World War were the first three, the recent financial crisis of 2008 is a prelude to the fourth turning point that – as it happens – we are now entering into. The movie itself does not point to the imminent war, but based on Bannon’s comments it is likely an ever-expanding conflict with radical Islam, or could it be China?
These are of course entirely plausible theories of history and Bannon fills the documentary with evidence of it all, but noticeably points to the liberal baby boomer generation – of which he is a part – as the inadvertent architects of the fourth turn. The economic argument he puts forward could equally have been made by Bernie Sanders: government bails out Wall Street and the average citizen foots the bill. A bill that is now so high that we are passing on an amount of debt that will likely crush and frustrate the next generation’s prospects of having a chance at a life that would resemble that of previous generations. Bannon takes the gloomier road and points to the baby boomer’s hedonism and self-indulgence as the dark force that has wrecked America for many decades to come. In it, he makes no distinction between the three boomer leaders that presided over the steady rot that has infected the system: Clinton, Bush and Obama. Elitism trumps ideology.
Throughout Trump’s campaign there was a call to go back to the 1950s, a time when ‘America was great’, productive and growing. I have seen similar nostalgic calls for that period in my native Netherlands when the late Pim Fortuyn took the stage as right-of-centre populist, when the post-war years were heralded as a model to aspire to. No one has ever made clear why, my father always said the fifties were an incredibly and forgettable boring period, but Bannon succeeds in explaining the why. No one, he argues, after having gone through the Great Depression and World War II was interested in anything but a ‘white picket fences’ happy suburbia where everyone worked, played and was content. This also explains why we can no longer replicate this utopia: none of us have gone through a real depression and devastating war, so none of the baby boomer or millennial generations can actually value, much less aspire to that what is so special about this sub-urban dreamland. If anything, it has made most people deeply unhappy and often in search of a ‘meaning of life’ quest. If Bannon’s views come to fruition there will be plenty of meaning to be found in merely surviving and fighting whoever takes on what is left of the western world. As I said: gloom and a prelude to a civilizational war is what ‘Generation Zero’ is all about.
Bannon seeks the creative destruction of this deformed society that we now live in, a society where risk taking, the core American value, has been taken away either directly or by government guarantee. In that he parts ways with Sanders who would use the state as a force of good, Bannon wants to tear the state apart.
The carmaker bail-out is a great example and that brings us to that other creative destructionist supporting Trump, Silicon Valley entrepreneur Peter Thiel. Few understood how a gay tech entrepreneur could back up Trump. Based on what we know about him is that he saw in Trump exactly the same thing Bannon noticed: the agent that could bring about a radical reset of how we run the economy, how we manage America. As a so-called ‘techno-libertarian’ Thiel would no doubt have rejected the now infamous auto industry bail-out, not only because of its poor economics (which would have been Bannon’s point) but also for the fact that ‘the car’ was already being re-engineered by different companies in a different place. Why bail-out ‘big auto’ when Google is already on its way building tomorrow’s car? Thiel believes strongly that America lost its way because it stopped innovating at the pace it once did and only a radical overhaul of existing industries can open the way to a new America. Herein lies of course a conflict with the new president whose promise to ‘bring back’ manufacturing jobs contrasts sharply with the idea of ‘reinventing’ manufacturing jobs. If he is to take Thiel’s – and Bannon’s advice – the actual destruction of old industries would set the stage for very different jobs.
So, Bannon and Thiel unleashed a quest for a new America and settled – for the time being – on Trump to bring in that agenda. And while the entire world is fretting over immigration and the president’s daily tweets, the far more powerful move into the future is beginning to shape up. It is one that is inspired by both Bannon and Thiel and will very likely end or reform liberal society to a point that we find it hard to recognize it, quite possibly unleashing an unregulated and extreme form of free-market enterprise. Because that is what America is best at and reversing laws like Frank-Dodd will unleash another Wall Street bonanza, this time however there will not be a government to bail out the losers.
The deeper question is if Bannon and Thiel will be able to influence Trump to bring about their vision for a renewed America and what geopolitical gambles will be part of that package. West Wing access is a fluid thing even for these two. In case their tenure or Trump’s comes to an end the question will be who will work with what has been put in place because as my good liberal friend alluded to, it is unlikely that we will ever be turning back. The early stage of the Bannon-Thiel fueled revolution is an answer to the wave of irreversible technological, global and fiscal realities. We will all have to deal and work with it.
Saying goodbye is never easy and this week I felt some real sadness upon learning that The Chase Hotel in Palm Springs had been sold to a group of developers. During our early years here in Canada we spent no less than three Christmas holidays in one of the nicest family hotels I have ever visited, and here’s the story.
It was a chance encounter for sure. Irene and I had spent weeks googling for a nice place to stay over Christmas in the desert resort, knowing that with two very young kids we needed access to a lot of things and ideally a kitchen. So somehow we hit The Chase during our online search and booked two adjoining rooms with kitchen in the heart of the old city of Palm Springs, better known as the ‘Movie Colony’. It was an older motel - famously frequented by Doris Day in the 1950s - small and nicely renovated with a decent pool and sizeable, like huge, rooms. We felt at home right away, in no small part because of the owner, Craig Blau and his super friendly staff. A retired fisherman from Oregon he and his wife had started looking for a home in Palm Springs, but ended up buying a hotel. By his own admission he had absolutely no knowledge of the hospitality business and that is probably exactly what made him such a great host, he ran the place as if it was his own home and treated each and every guest with the same open friendly attitude that you would extend to any houseguest. I did not get the impression Craig wanted to lose money on his hotel venture, but making the hotel hugely profitable was never of paramount importance or so it seemed. The hotel oozed calm, friendliness and warmth, much like the desert surrounding it.
A simple self-serve breakfast of fruit, juice and muffins (enabling our kids to walk down and have breakfast on their own if they wanted), oranges and grapefruits right from the poolside trees and late afternoon chocolate chip cookies were the signature treats at the Chase. And then the guests, a stable crowd as they kept coming back year-after-year, we made some good friends there and even a potential business deal emerged with a couple from Newport Beach who were devoted Chase frequenters. The kitchen in the room enabled us to make some great meals – our induction to the world of Trader Joe’s hails from the Chase days – and the BBQ at poolside was often used while we sipped away at quality cabernets that in Canada are too expensive too buy. And although we only brought kids, guests were allowed to bring their dogs and Craig would politely but firmly dismiss any potential guests that did not like dogs. If people wanted to bring their pets, fine.
Centrally located it was only a stroll to Palm Springs’ main drag, South Palm Canyon Drive with its shops and Sonny Bono statue. Yes, you could feel some of the old Hollywood influence and Craig was always keen to venture some background stories, like how our favourite Mexican restaurant around the corner was frequented by Suzanne Somers who, rumor had it, would never tip the waiters. And then there was the Palm Springs Art Museum just a few blocks away and the short drive to the Indian Canyons for some desert hiking. People always ask me what you can do in Palm Springs beside golfing and sitting next to the pool, but there is so much there, one could spend months exploring and living the desert life. The Chase somehow opened that door for us.
The pressure of development was always there and more than once the owners got offers or threats from neighboring developers to move The Chase somewhere else. I remember Craig telling me that he had some issues with a neighboring property owner who threatened to sue him as it was his “American right to develop anything he liked” next to Craig’s hotel. Craig remained unfazed and commented it was his American right to oppose that in any way he could. It highlighted his total calm and care to keep The Chase the way it was, simple, clean, friendly and above all unpretentious. The only thing that would really excite him was politics and I recall how he was embarrassed about Bush Jr. and the Iraq war and it makes me wonder what Craig is thinking right now that we have landed in the age of Trump.
As time moved on our Christmas holidays changed, in 2008 taking Craig’s own strong advice to go to Arizona, as its desert was so much nicer than the one that surrounds Palm Springs. Life moves on and we lost touch with The Chase. With Craig now well into his seventies it is going to be redeveloped and the fear is smaller rooms with your prefab mini-kitchenette because the new owners want you to eat in their new restaurant, of course. What’s worse, the hotel will lose its name and revert to its 1950s name, Holiday House Hotel. I remember sitting in the patio with Craig one day and asking him why they called the hotel ‘Chase’. He looked at me with a grin and pointed at his dog and said ‘we couldn’t come up with anything so we just named it after the dog’. And that was precisely how the hotel was, warm, fun with an ability to take life not all that seriously. The Chase Hotel, its owners and staff will be deeply missed.
Christmas, 2005. Nora and Maeve in their pajamas in the hotel's reception area with Craig on the right and the dog that gave the hotel its signature name. Forgot the name of the guy on the left.
Entrance to The Chase on West Arenas Road.
So I finally had some time to put down my thoughts on British Columbia's convoluted public education system with some ideas as to how we can fix it. You can find it here.
Over the past year I have been conducting a workshop on structuring early stage deals and term sheets as part of the NACO Academy. Now this will take me to such places as Calgary and Kitchener to name a few, so imagine my pleasant surprise when I was invited to conduct the workshop in Kingston, Jamaica. The local angel investing group FirstAngels Jamaica had organized a two-day event where they would present one of their latest deals, have their members network and allow me to run two modules, one a general introduction to angel investing and a second one focused on term sheets.
Like any other small nation Jamaica is forced, by history and circumstances, to look outward and be creative in developing its economic potential. And for good measure this goes well beyond reggae, tourism and having great athletes booking Olympic successes. Jamaica consequently is a nation of entrepreneurs and in that they are supported by a well-connected Jamaican diaspora that is able to source capital and deals that spur entrepreneurial activity on the island nation of some three million people. In addition it is also one of the key hubs for Caribbean economic development.
So it was great to discuss the deals FirstAngels had recently done and understand how local universities on the island plugged into this development. What emerged was a country with a real zest to develop new business sectors, ideas ready to be funded and incubated by a steadily growing class of private investors keen to diversify their holdings and help fund local growth. When asked what the biggest constraint was on growing this community the answer was as I had expected: deal flow. So far FirstAngels has funded four deals and they are keen to find more within their geographic setting, it should be noted that angel investors generally prefer to invest close to home.
During the actual workshops and panel discussion it was interesting to see the parallels and differences with other angel networks in North America. There were lots of questions from the audience that consisted of both (aspiring) investors, entrepreneurs and various professionals. A lot of time and questions dealt with valuation and I did my best to dissuade the attendees from getting too hung up over these and encouraged them to focus on the bigger picture and map out the future financing milestones of a new venture first. It was also rewarding to dive deeper into concepts that weren’t fully incorporated into local deal structuring and I happily elaborated on founder vesting and structuring option plans. It was great to have some Jamaican lawyers on the panel and get them to share some of their experiences.
But above all it was great to meet the entrepreneurs and learn how they got their businesses off the ground with limited resources. FirstAngels presented their most recent deal, an investment in BookFusion, and the e-book company is not any different from US or Canadian startups. Having cleverly outsourced some development to Europe combined with a US presence this Jamaican company is on to the next step with the support of the local angel community. Their story merged perfectly into my framework for the workshop and enabled all the participants to learn more about starting and financing companies and above all feel energized to take the next steps in that process. As for me I really enjoyed the extremely friendly and positive Jamaican atmosphere and once more realized how the rapid movement of capital and ideas is fuelling a new breed of economic activity across borders.
Note: anyone interested in getting me to do the two-hour introduction to angel investing or the four-hour structuring deals and term sheet workshops should contact Melissa Dodaro at NACO for further details.
Some lessons for life and political success: staying at it
It is surprising to some extent to see how the world these days devours ‘self-help’ and or ‘career advisory’ books, all promising to deliver the right tools and techniques to bring us riches and happiness or some sort of combination thereof. It was a relief for me this summer to return to my old passion of reading political biographies and to realize that all the clues to happier lives and better careers can easily be found by studying the lives of some of history’s great and see how they navigated some of the deeper challenges that defined their lives and come out as winners. So this summer I dove into David Landau’s epic work on the life of Ariel Sharon and it was followed by the deeply researched and voluminous biography that Ezra Vogel put together on Deng Xiaoping.
As a historical figure, Sharon tends to generate some negative reactions given the abrasive style he was known for, his presumed guilt in the Sabra and Shatila massacres and triggering the second intifada following his visit to the Temple Mount in 2001. Both of these claims by the way are clearly and helpfully dispelled by Landau’s book. Deng however usually can count on a far more sympathetic treatment as the man that transformed and modernized China. This of course is somewhat questionable as Deng most probably had been far more directly involved in unleashing lethal force, on his own subjects no less, during his career as one of Chairman Mao’s key enforcers and eventually as China’s paramount leader. During my years in Asia it was not unknown to hear business leaders praise the bloody crackdown in Tiananmen as one of the essential building blocks of a stable China that is open for business. Whatever the merit of that morally flawed argument, both Deng and Sharon built their careers in newly formed nations – Israel being established in 1948 and the People’s Republic of China only one year later, 1949 – that were under such formative pressures that the internal and external use of force were essential parts of the job.
Although China and Israel came into being under vastly different circumstances and cannot be compared in terms of size and histories, the parallels between the careers of both men are striking. Both biographies clearly present that their entire lives were essentially in the service of their nation and that both consequently took a deep personal toll in the process. These were compounded by significant personal dramas. Landau’s description of the death of Sharon’s young son Gur is moving and heartbreaking, much the same can be said for the way Deng’s son Pufang was denied medical treatment during the Cultural Revolution a result of which he spent the rest of his life in a wheelchair, paralyzed from the waist down. It is a testament to the quality of the books that you can sense how the deep pain of these personal tragedies accompanied these two men for the rest of their political lives and how it motivated them.
Yet the essence of both careers was that it took a lifetime to get to the top positions, Deng being a solid seventy-four when he could truly claim to be China’s paramount leader, Sharon was seventy-three on the day he was inaugurated as Israel’s prime-minister. Both books give a very detailed accounting for the reasons it took so long and how both men persisted against the many different forces that were aligned against them. The pragmatic fixer Deng had the nearly insurmountable task to carve out a space for plain reason and common sense progress in the toxic environment created by Mao’s continuous political struggles where dogma trumped everything else. Deng was purged from the leadership twice: in 1966 and within about a year of returning from the first one, in 1976. Both of these had career ending potential, yet Deng not only overcame both events, he emerged stronger and far more decisive. Sharon in turn had to navigate a different but equally explosive political environment in Israel – Landau’s book is a key primer to get a feel for the machinations of Israeli political power-play – but also his own character which at times created some roadblocks on avenues that had opened up for him. The benefit of the long road that both had to travel was of course the accumulation of deep experience and a huge personal network of politicians, administrators and military commanders complemented by an incredibly clear and growing sense of direction for each nation. This of course was compounded by the fact that by the time they reached the highest office there was little time left for them given their advanced age. For Deng it meant rejecting orthodox communism and embracing capitalism while maintaining one-party rule, for Sharon it was ditching the nationalist settler movement that propelled him to power and embrace disengagement from the Palestinian enemy.
Once you come to the end of Sharon’s biography it is both harsh and painful to see how he in early 2006 succumbed to a hemorrhagic stroke that sent him into an eight-year coma from which he never woke up. The remaining question that even the masterful Landau can not answer is whether Sharon would, following the departure from Gaza in 2005, have continued his unilateral disengagement by withdrawing from the West Bank and setting the stage for more favorable conditions for Israeli-Palestinian peace than is the case now. What we do know is that had Sharon lived as long as Deng, he would no doubt have left an even deeper imprint on the Middle East. Deng retired from the political scene in 1992 having reached the tender age of eighty-eight and as opposed to Sharon, did live to see most of what he set out to do: a stable and steadily growing China.
So what do these old men of state and their biographers have to tell us about our lives and careers? The same lessons that drove Deng and Sharon to ultimate success in their lives and careers. Hard work, focus, family and never ever giving up.
Note: Deng Xiapong and the transformation of China by Ezra F. Vogel (2013) and Arik: The Life of Ariel Sharon by David Landau (2014). As a complement I would recommend reading The Cultural Revolution: A People's History, 1962-1976 by Frank Dikötter (2016) which gives a bit more depth and analysis of the horrors of the Cultural Revolution an area on which Vogel’s book was a bit light.
So in many ways my life and career are a direct result of British engagement with Europe. In anticipation of the formal 1992 creation of the European Union, British banks started to evaluate their continental strategies and some, for the first time, embarked on recruiting graduates from across the channel. By sheer coincidence I ran into Barclays Bank at a job fair – not coincidentally in Brussels – and was asked to apply for their European Management Development Program. I did and so my first job application landed me right in the City of London, learning the ropes of banking at one of its more venerable institutions.
The interesting thing was that my new British colleagues ridiculed their nation’s and their employers’ European project and where somewhat miffed at all the opportunities and goodies that were thrown in the direction of the bank’s ten ‘Euro-recruits’. From day one I was lectured on the conspiracy coming from Brussels to subvert British freedoms, abolish pound sterling and eventually dismantle Westminster. This was long before immigration concerns and Nigel Farage. These were the last days of Margaret Thatcher whose career essentially ended over her views on Europe and the infamous campaign by The Sun newspaper to dispense some advice to the President of the European Commission on where to put his European Currency Unit as it was called in those days. Having grown up in a nation devastated by World War II where European co-operation was essential to economic recovery, there was never any debate, discussion, let alone an inkling that there might be something negative to say about European co-operation and integration. On the contrary, the late 80s were a time when the advent of the single market would bring more freedoms, riches and success for those that participated in it and my instant recruitment into London was the undeniable evidence of that. Critical thinking about the European Union was non-existent. Imagine my initial surprise at the British bitterness about it all.
That said, it did change my thinking and my crash course in Euroskepticism allowed me to see that giving up your currency would mean giving up your ability to be the master of your own destiny as Greece has now painfully learned. Globalization is great and opens the door to many opportunities, but to hand its management to unelected bodies far removed from the nation state will inevitably open the door to some unintended consequences. Even with Thatcher disappearing from the scene, the debate in Britain raged on.
And now, some twenty-five years later that British suspicion about the entire project has invaded many parts of continental Europe and has been adopted by emerging political movements on both the left and the right. Deep frustrations over unrestricted immigration and the economy at large are turbocharging populist sentiment and the EU is the first in the line of fire as an establishment project seen to have been instrumental in undermining the safety and security blankets that many across Europe had come to take for granted. Protest and anger are thus not only informed by evidence, but equally by ‘nostalgia’ something populist politicians love to plug into.
So the Brexit vote should not come as a surprise at all despite the near hysteria that enveloped the media and markets almost immediately after the results were confirmed. The consequent demise of both David Cameron and Jeremy Corbyn were also long in the making, the Brexit vote just accelerated it. And as such last week’s events should be welcomed as a timely wake-up call for Europe to come to terms with deep economic shifts, nearby war and chaos (Ukraine, Syria) and the festering wounds inflicted by harsh monetary policies, again Greece, but who is next? European commissioner Frans Timmermans today on his Facebook page admitted that the time has arrived to be ‘brutally honest’ and that the Brexit vote is a symptom of the feeling that ‘we have lost control of our destinies’. As much as the vote shook up Britain, it will give an equal boost for re-examination in Brussels.
So that is why we should welcome what happened in Britain last week. Although there will be quite some chaos in the weeks to come, think financial turbulence and purges in the British Labour and Conservative parties, there will and has to be a way out of this mess. It will consist of finding a ways to re-establish British relations with Europe, which will neither end nor remain the same, but more likely and hopefully will find some new middle ground. Britain cannot afford to let a referendum – a terrible tool to set a political course at the best of times – determine its future direction. Once the internal bloodletting is done, possibly followed by a general election, serious discussions can start without invoking the dreaded Article 50, which will set a timetable for a British exit. This process will help Europe find its balance and involve some serious re-examination on issues such as centralized governance, immigration, security and macro-economic policies.
Yes, I refuse to believe that Britain is out and that we are headed for some sort of dark age. But even if that were to happen there will be a route to some new equilibrium. Things will not be easy, but at the very least we are all awake now and ready to participate in framing a new future for Britain, Europe and the world at large. My induction in global thinking decades ago in London does not allow me to believe otherwise.
Postscript on July 7, 2016: it is of course quite extraordinary and maybe not coincidental that one of the very colleagues I referred to here and with whom I worked together in my first year at Barclays is none other than Andrea Leadsom (née Salmon), one of the two remaining contenders for the conservative leadership.
In only a few months time, I will be leaving on a mountain climbing expedition with Summits of Hope, the same group I scaled Kilimanjaro with two years ago. We will be attempting to summit Aconcagua in Argentina, the highest mountain in the world outside the Himalayas at 6,961 meters (22,837 ft) above sea level. I have started training and look forward to this great challenge, realizing it will be a lot harder than Kilimanjaro a few years ago.
I will cover the cost for the entire expedition myself, but we are raising money for children at BC Children’s Hospital. Summits of Hope is quite different from other charities as all funds raised directly support one full-time position at BC Children’s oncology ward, cancer research, education and laptops/toys for children in the hospital. I’ve pledged to raise at least $5,000 in donations for this climb, but my goal is to raise more. This is the same amount I targeted for the Kili trip, but ended up raising over $11k thanks to many generous contributions. It is often surprising what people will contribute, really.
Global News anchor Kate Gajdosik was part of this year's Kilimanjaro trip and here is a video of that prior to her leaving, and here is her detailed post on the climb and Summits of Hope's important role in it all.
So if you would consider making a donation, take a look at my Summits of Hope profile page with a link to donate. Please make sure you select ‘Pieter Dorsman' as the climber you are supporting on the donation form and designate the amount that’s right for you, no amount is too small or too large. Tax receipts of course will be issued directly. For a donation of $40 or more, I will fly your message on your own personalized flag and we will send pictures of your flag flying on Aconcagua when we return.
Selfie on Uhuru Peak, the summit of Kilimanjaro on October 17, 2013.
In the wake of the terror attacks in Paris, I remembered I once wrote a piece on the one terror attack that I ever experienced, or at least came relatively close to. This is what I wrote in 2003 about the 1992 attack on the Baltic Exchange. I made a few edits, but is largely the same text. And the photo of the damaged Commercial Union building above wqs made on April 13, 1992.
It was in April 1992 when I was working in the City of London that I went on my first real business trip. For a young guy, a great milestone in an emerging career and the location was not bad either, Athens in Greece. It was a business development conference and that week, apart from the conference, was pretty much dominated by the very close election race back in the UK where the unexciting John Major eked out a narrow election victory over Neil Kinnock’s Labour Party. On Saturday morning as the conference wrapped up we heard the news that a big bomb had gone off in London’s financial district, the area where most of us worked. There were no clear indications of the exact location, casualties or damage other than that it had been a huge explosion. Those were the days before the internet and mobile, so we digested the news slowly and did not race to our laptops to have a complete minute-to-minute rundown of events. I stayed the extra day and when I got home on Sunday night one of my managers was on the phone shortly after my arrival asking me whether I had heard about the attack and how the trip to Athens had been. I summarized what I had to say quite briefly and let him know that I would give a full report of my trip the next morning. “Well, Pieter”, he said, “you are going to have a few days off because the bomb exploded at the Baltic Exchange and our office building is in such a shape that it is very unsafe for staff to return to work”. This was quite a surprise, our office was at the northern end of St Mary Axe, in fact everyday I walked right past the Baltic Exchange at the southern end of St Mary Axe, the place were the bomb had gone off.
The next morning, the day off, I went to the area, camera in hand, and what I witnessed shocked and perplexed me completely. The area that had been damaged not only extended well beyond to what anyone would have believed knowing the location of the bomb; the damage done to that area, now cordoned off by police, was phenomenal. The impact of the explosion had covered the direct area with endless mountains of glass as nearly all of the windows of the adjoining Commercial Union skyscraper were knocked to smithereens. The force had also seriously damaged many other buildings, destroyed windows over a vast area, damaged cars and what amazed me and for some reason stuck in my mind: it left most traffic signs in a very wide area curved. The damage had thus also affected our building at the very end of St Mary Axe, although from the outside things did not look particularly bad. Apparently, there was significant damage and one of the greatest concerns was the structural damage not directly visible to the eye. Hence our few days off, in fact we spent the next two months in some reserve office space the bank had made available near St. Paul’s Cathedral.
The background to the bombing was soon clarified. The IRA’s political affiliates, Sinn Fein, had lost a seat during the election (Sinn Fein did contest seats in Westminster but they never occupied them) and the heinous attack was a “punishment” for the conservative victory. Three people were killed and I remember very clearly that one of them was a teenage girl who had happened to be there, waiting in a car while her mother picked up her dad from work.
I never directly linked the attack to myself or the chance that I could have been killed by it although the bomb went off right on the route that I walked every day from the Underground station to the office and back. I just did not happen to be there that day, I was in Athens, and there was, and is, no other way to look at it. During my stay in London Downing Street 10 had been attacked by a rocket propelled grenade launcher and one day the entire Underground system was shut down leaving my then girlfriend, and now wife, Irene presuming I was dead, however I was just four hours late being stuck in a bus somewhere on Piccadilly. At the time, the terror never felt like it was directed at me, or us, or to anyone close to me and I never got the sense from my British colleagues that they ever felt like they were a target. It was a constant, it was there, and if it came close to home it was sure to move on to another location. I never sensed fear, pain or worry. The nature, origin, much less a solution was ever discussed. The IRA was qualified as a group of isolated fanatics who did not even have majority support in their own ranks, losing a seat during the election was yet more evidence of their failure, isolation and increasing irrelevance. For me, it left a very vivid image of the physical impact of a bomb attack and it makes it easier to picture what can happen to people if they are in the vicinity of such a dreadful blast.
Today, some twenty-three years on, with a settled conflict in Northern Ireland and a wave of new terror attacks enveloping Europe, it may be worthwhile to recall how the British in those days dealt with lethal terror. They adjusted a bit here and there, but carried on regardless. The other side of this of course is to remember those that perished, then and today, innocent bystanders in a pointless orgy of violence.
Quite a few people have been asking about the ‘why’ of the terror attacks in Paris. Many others are shocked and surprised at the outburst of such extreme violence. For many however these attacks are hardly a surprise as they represent the most recent instalment of a process that got started in the 1950s with roots going back many centuries. Let me try and weave the component parts together into a narrative that I hope explains the ‘why’.
Collapse of the Ottoman Empire – It starts with the dismemberment of the Ottoman Empire after the First World War where on the remnants of that empire a number of artificial states were created in the Arab-Muslim world. All of these states came to be ruled by repressive autocrats or families who were more or less aligned with the western powers that defeated the Ottomans.
Autocratic Rule - These ruling elites largely survived through divide and conquer policies (think Sunni vs. Shi’ite groups in Iraq and Syria) or by closely aligning with the region’s dominant religion (think of the House of Saud as protector of the holy shrines in Mecca and Medina). Needless to say, these despots have used the most brutal and inhuman techniques at their disposal to consolidate their hold on power. Saddam Hussein in Iraq, the Assad clan in Syria, Muammar Gaddafi in Libya are some of the more recent examples here.
Resource-based Economies - The abundance of oil (Gulf States, Iraq, Saudi Arabia, Libya) prevented any form of economic or social innovation, the western petro-dollars kept flowing, creating a wealthy uber-elite that had no incentive to change, innovate or otherwise promote change to seek the betterment of their underlings. On the contrary, diversifying the economy would open the door to a level of foreign influence that could destabilize a hold on power that was tenuous at best. Many scholars have argued that an Arab world that at one point was highly successful and progressive reverted to anti-modernist stagnation.
Channeling Resentment - Resentment and anger of the ordinary underlings could easily be channeled by directing tension and aggression to externalities. Israel was the regional bad guy to fight against, or the ‘other Muslim’ with the Iran-Iraq war that constituted the absolute violent low point in terms of intra-Muslim bloodshed last century. While this war of neighbours consolidated the ayatollah’s power in Iran and Saddam’s in Iraq, it created utter devastation for their citizens.
Conflict with Modern and Secular World - Traditional Muslim life was challenged by modernity over the second half of the 20th century and as calls for progress through democracy were violently suppressed, a return to fundamental Islam (or Islamism) became a far more potent vehicle to challenge the westernized corrupt elites that governed the Arab world. Many have pointed to the Egyptian author and scholar Sayyid Qutb who emerged in the 1950s as a proponent of a return to tradional Islamist societies as a response to corrupt, westernized autocratic rule. Qutb is seen as the foundational ideologue of al-Qaeda and now, ISIS.
Quest for Purity - As with most fundamentalist or totalitarian groups, the all-encompassing idea is to create a better world where the prevailing ideology provides a route to a pure and uniform society. In the case of Islam that meant a return to a form of government where the secular state and religious authority are merged into one and where Islamic doctrine governs day-to-day life. The best example of such an entity was the original caliphate of the 7th and 8th centuries. It also provided the antidote to the western model that separates church and state.
Religion - And as opposed to fascism and communism where Hitler and Stalin banned or otherwise submerged religion, the religious doctrine in the fundamentalist mindset is the same as the political worldview to govern. When Hitler died fascism collapsed the next day, not so with Islam or Christianity for that matter as religion is far more potent than any secular worldview. It is outside the scope of my notes here, but the concept of God and the afterlife sets religion apart from any political ideology.
Dissent and Religion Merge - So to go back to say the mid-1990s the dominant protest movement in the Middle East became radical Islam or Muslim fundamentalism, whatever term suits you best. The idea to resurrect the caliphate started to manifest itself violently and in pursuit of its goals severing the ties between the West and the Arab autocrats became one of its primary goals. It should be remembered that al-Qaeda under Osama bin Laden was able to emerge and grow in a fertile environment where first the Russians intervened in Afghanistan (1980s) and where the United States led a UN-sanctioned war against Saddam Hussein after he conquered Kuwait in the early 1990s.
Attack the West, Provoke War, Weaken Local Rule - The 9/11 attacks completed the first phase of the process and the West’s response was exactly what al-Qaeda must have seen as its desired outcome: invasions in Afghanistan and Iraq, suppressing personal freedom in the West by creating a security state. All of these could potentially divide the West, weaken the local Arab autocrats and in time strengthen the hand of Islamists.
The Quagmire – And that is pretty much what happened. The easy target was Saddam Hussein not only as a serial violator of UN resolutions, but Saddam himself had moved way too close to fundamentalism and organized terror in order to preserve his position which originally was far more pro-western and secular than the new make-up of the Arab world required him to be. So George Bush decided to remove him. Post-war Iraq was chaos and enabled local Iraqi fundamentalists under Abu Musab al-Zarqawi to create a foothold where western powers may have thought that a ‘fly-trap’ would get all radicals into Iraq where they could be defeated in a decisive manner. This did not happen and the United States beat a retreat, leaving a country in deep chaos under corrupt and sectarian Shi’ite rulers whose presence further strengthened the efforts of Sunni fundamentalists. Following Zarqawi’s death they re-emerged under the banner of ISIS.
Arab Spring – All of this took place more or less around the same time of what came to be known as the Arab Spring of 2010-2012 where democratic uprisings (notably in Tunisia, Libya and Syria) saw a weakening of the old autocratic rule and a nascent democratic movement. But as we know now, opposition was not only channeled through believers in freedom and democracy, fundamentalists often gained the upper in hand in the revolts that emanated from that Arab spring. Noted examples are Libya, Syria and yes, Egypt, where a democratic experiment with a fundamentalist president (Mohamed Morsi) failed miserably.
And there’s ISIS – So building on the groundwork of Qutb, al-Qaeda’s successes, the US failure in Iraq and its subsequent withdrawal, weakened Arab autocrats, combined with the emergence of newly energized fundamentalist groups provided the fertile soil for the creation of the Islamic State of Iraq and the Levant (ISIL) or now better known as ISIS.
The Islamist Vanguard - As all revolutionary movements, be they fascist, communist, clerical or millennial in nature, a wealthier upper middle class vanguard establishes the way, think of the privileged upbringing Osama bin-Laden had or the background of Germany’s RAF terrorists. Or take Sayyid Qutb who studied in the United States, Colorado to be precise. They are the ones that conceptualize, create and finance the platform where the disgruntled troops can assemble and fight in pursuit of a better tomorrow, or in our case, a new caliphate governed by divine law.
Alienated Converts - In the case of fundamentalist Islam, those initiators can draw on a large pool of potential converts, often than more than willing to take up arms and fight. They are essentially the unemployed or underutilized poor young men across the Middle East whose ranks have grown in a demographic boom that was never accompanied by an economic one. Add to this the very many Muslims across Europe (primarily Maghreb and Turkish influx to North and Western Europe) who are not only unemployed and underutilized, but alienated in a culture that is in all aspects diametrically opposed to the ones in which they grew up.
Sexual Repression - And this brings us to the repressed sexuality in Muslim culture an element often overlooked but it stands to reason that it plays a crucial part in the emergence of fundamentalist violence. Traditional Muslim societies suppress both male and female sexuality and the resulting hormonal overdose for men can easily be channeled into violence. Let me give a simple example by pointing to that young and affluent Parisian couple where the girl is scantily dressed and both are enjoying a glass of wine in a trendy Paris bistro after a not so strenuous week at a local college or university. Their lives and values have been somewhat different, to say the least, from the single alienated Muslim youngster who empties his AK-47 on them. I hope this gets the point across.
Europe - That brings us to Europe, at one point in the history parts of which were occupied by the Ottomans. The idea of the fundamentalists restoring their caliphate is fueled by the notion that its borders should once more extend to what they once were. Here the fundamentalist Muslim doctrine merges with nostalgic notions of a time past and of what could be tomorrow. Potent recruitment material. Is a European reconquest a real goal for ISIS? Hard to say, but in the current environment where the US has retreated, the north Atlantic alliance is at its weakest ever and where the Muslim segment of Europe’s population keeps growing in relative terms it is an attractive notion for ISIS to promote as part of its overall strategy of enlarging its domestic Arab footprint by severing the ties between Arab’s remaining autocratic rulers and European elites.
Decadence and Freedom – And Europe (and America, Canada and Australia) represent the opposite of what fundamental Islam stands for: open and liberal gender relations, separation of church and state, increasing secularity (empty churches) and a general quest to enjoy life. We often see references from religious purists (not just Muslims, Christians too) to hedonism as one of the most abject expressions of life in Western societies. Any western city is now a perfect target and you do not have to necessarily bring in your recruits from overseas because they are already there. Paris has all of that and additionally a pretty terrible history with Muslims, few will recall the massacre of hundreds of Algerians in 1961 whose bodies were discarded in the Seine by the French police. More recently we can point to the cartoons published by Charlie Hebdo and the ensuing massacre at that magazine’s editorial offices. So what could be a more perfect target?
It is outside the scope of this article to provide a solution to this deep and violent conflict. The core purpose is to explain in a short but hopefully enlightening way how we ended up in a world where a small group of terrorists can randomly butcher totally innocent people in a city far away from their ancestral homes. The most important thing to note is that there is no single and simple explanation like “if the United States had not invaded Iraq this would not have happened”. These are anti-intellectual short cuts that deserve no merit, as the reality is so much more complex. A number of things that I offer here may on their own not be solid evidence of contributing to terrorism, but together they constitute a narrative that may help us to understand the recent violence better.
Anyone trying to find a solution will be perplexed by this complexity, which inevitably leads us to conclude that it will take a very long time before we can really address and solve it.
This is my weblog and as opposed to the earlier one I ran years ago, this is not one about just politics and markets.