The optimism of Mark Stevenson

The former pop star and cryptographer who knows how to save the world.

With swaths of Australia's eastern seaboard underwater, this week's New Statesman has a timely piece on the simple idea that could stop the country's destructive cycle of drought and flood. (You'll never guess what it is.)

It's written by Mark Stevenson, whose book An Optimist's Tour of the Future was published yesterday. It has received stellar reviews all over the place and is one of the most interesting science books I've read for a long time.

It turns out that Mark's got the best back story since Brian Cox – he, too, was in a pop band (they were big in Chile) and he was also a cryptography expert. Now, he's a stand-up comedian, writer and educator, trying to find out whether we're all doomed.

He has decided to take an optimistic – but rational – look at what the future might hold for us as a species. In his own words:

I've travelled over 60,000 miles across four continents, talked to more than 30 geniuses, met four robots and had two terrible conversations with computers. I've contemplated immortality, the end of capitalism and a new age of human evolution. In the process, I've attended an underwater cabinet meeting, helped invent one cocktail, been insulted in the outback, made a brace of new friends and had near-death experiences. I'm not the same person I was when I started.

The contentious subjects covered by the book include the human genome, nanotechnology, genetic engineering and renewable energy. Stevenson tackles them in an approachable way by focusing on the individual stories of the (often quite eccentric) people involved.

One of them is Aubrey de Grey, the gerontologist whose work on rodents makes him think that people can live to a 1,000 years old (as long as we don't get fat). You can see de Grey in action at a Ted talk here. Not only does he have the best beard in science, he might be the fastest talker you'll ever hear.

Mark also met a Columbia University professor called Klaus Lackner, who's developed a cheap and efficient way to scrub CO2 from the atmosphere – and now needs $20m to build a commercial prototype.

Then there's the controversial futurist Ray Kurzweil, who believes that humans will soon merge with technology and become a new species. (I knew my Xbox had been looking at me oddly.)

You can read more about the book (and Mark's pop career) here.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation