Send to Email Address
Your Name
Your Email Address
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.


Forget about listening to ourselves. In the age of data, algorithms have the answer, writes the historian Yuval Noah Harari
©Janne Iivonen
For thousands of years humans believed that authority came from the gods. Then, during the modern era, humanism gradually shifted authority from deities to people. Jean-Jacques Rousseau summed up this revolution in Emile, his 1762 treatise on education. When looking for the rules of conduct in life, Rousseau found them “in the depths of my heart, traced by nature in characters which nothing can efface. I need only consult myself with regard to what I wish to do; what I feel to be good is good, what I feel to be bad is bad.” Humanist thinkers such as Rousseau convinced us that our own feelings and desires were the ultimate source of meaning, and that our free will was, therefore, the highest authority of all.
Now, a fresh shift is taking place. Just as divine authority was legitimised by religious mythologies, and human authority was legitimised by humanist ideologies, so high-tech gurus and Silicon Valley prophets are creating a new universal narrative that legitimises the authority of algorithms and Big Data. This novel creed may be called “Dataism”. In its extreme form, proponents of the Dataist worldview perceive the entire universe as a flow of data, see organisms as little more than biochemical algorithms and believe that humanity’s cosmic vocation is to create an all-encompassing data-processing system — and then merge into it.
We are already becoming tiny chips inside a giant system that nobody really understands. Every day I absorb countless data bits through emails, phone calls and articles; process the data; and transmit back new bits through more emails, phone calls and articles. I don’t really know where I fit into the great scheme of things, and how my bits of data connect with the bits produced by billions of other humans and computers. I don’t have time to find out, because I am too busy answering emails. This relentless dataflow sparks new inventions and disruptions that nobody plans, controls or comprehends.
But no one needs to understand. All you need to do is answer your emails faster. Just as free-market capitalists believe in the invisible hand of the market, so Dataists believe in the invisible hand of the dataflow. As the global data-processing system becomes all-knowing and all-powerful, so connecting to the system becomes the source of all meaning. The new motto says: “If you experience something — record it. If you record something — upload it. If you upload something — share it.”
Dataists further believe that given enough biometric data and computing power, this all-encompassing system could understand humans much better than we understand ourselves. Once that happens, humans will lose their authority, and humanist practices such as democratic elections will become as obsolete as rain dances and flint knives.
When Michael Gove announced his shortlived candidacy to become Britain’s prime minister in the wake of June’s Brexit vote, he explained: “In every step in my political life I have asked myself one question, ‘What is the right thing to do? What does your heart tell you?’” That’s why, according to Gove, he had fought so hard for Brexit, and that’s why he felt compelled to backstab his erstwhile ally Boris Johnson and bid for the alpha-dog position himself — because his heart told him to do it.
Gove is not alone in listening to his heart in critical moments. For the past few centuries humanism has seen the human heart as the supreme source of authority not merely in politics but in every other field of activity. From infancy we are bombarded with a barrage of humanist slogans counselling us: “Listen to yourself, be true to yourself, trust yourself, follow your heart, do what feels good.”
©Janne Iivonen
In politics, we believe that authority depends on the free choices of ordinary voters. In market economics, we maintain that the customer is always right. Humanist art thinks that beauty is in the eye of the beholder; humanist education teaches us to think for ourselves; and humanist ethics advise us that if it feels good, we should go ahead and do it.
Of course, humanist ethics often run into difficulties in situations when something that makes me feel good makes you feel bad. For example, every year for the past decade the Israeli LGBT community has held a gay parade in the streets of Jerusalem. It is a unique day of harmony in this conflict-riven city, because it is the one occasion when religious Jews, Muslims and Christians suddenly find a common cause — they all fume in accord against the gay parade. What’s really interesting, though, is the argument the religious fanatics use. They don’t say: “You shouldn’t hold a gay parade because God forbids homosexuality.” Rather, they explain to every available microphone and TV camera that “seeing a gay parade passing through the holy city of Jerusalem hurts our feelings. Just as gay people want us to respect their feelings, they should respect ours.” It doesn’t matter what you think about this particular conundrum; it is far more important to understand that in a humanist society, ethical and political debates are conducted in the name of conflicting human feelings, rather than in the name of divine commandments.
. . .
We are already becoming tiny chips inside a giant system that nobody really understands
Yet humanism is now facing an existential challenge and the idea of “free will” is under threat. Scientific insights into the way our brains and bodies work suggest that our feelings are not some uniquely human spiritual quality. Rather, they are biochemical mechanisms that all mammals and birds use in order to make decisions by quickly calculating probabilities of survival and reproduction.
Contrary to popular opinion, feelings aren’t the opposite of rationality; they are evolutionary rationality made flesh. When a baboon, giraffe or human sees a lion, fear arises because a biochemical algorithm calculates the relevant data and concludes that the probability of death is high. Similarly, feelings of sexual attraction arise when other biochemical algorithms calculate that a nearby individual offers a high probability for successful mating. These biochemical algorithms have evolved and improved through millions of years of evolution. If the feelings of some ancient ancestor made a mistake, the genes shaping these feelings did not pass on to the next generation.
Even though humanists were wrong to think that our feelings reflected some mysterious “free will”, up until now humanism still made very good practical sense. For although there was nothing magical about our feelings, they were nevertheless the best method in the universe for making decisions — and no outside system could hope to understand my feelings better than me. Even if the Catholic Church or the Soviet KGB spied on me every minute of every day, they lacked the biological knowledge and the computing power necessary to calculate the biochemical processes shaping my desires and choices. Hence, humanism was correct in telling people to follow their own heart. If you had to choose between listening to the Bible and listening to your feelings, it was much better to listen to your feelings. The Bible represented the opinions and biases of a few priests in ancient Jerusalem. Your feelings, in contrast, represented the accumulated wisdom of millions of years of evolution that have passed the most rigorous quality-control tests of natural selection.
©Janne Iivonen
However, as the Church and the KGB give way to Google and Facebook, humanism loses its practical advantages. For we are now at the confluence of two scientific tidal waves. On the one hand, biologists are deciphering the mysteries of the human body and, in particular, of the brain and of human feelings. At the same time, computer scientists are giving us unprecedented data-processing power. When you put the two together, you get external systems that can monitor and understand my feelings much better than I can. Once Big Data systems know me better than I know myself, authority will shift from humans to algorithms. Big Data could then empower Big Brother.
This has already happened in the field of medicine. The most important medical decisions in your life are increasingly based not on your feelings of illness or wellness, or even on the informed predictions of your doctor — but on the calculations of computers who know you better than you know yourself. A recent example of this process is the case of the actress Angelina Jolie. In 2013, Jolie took a genetic test that proved she was carrying a dangerous mutation of the BRCA1 gene. According to statistical databases, women carrying this mutation have an 87 per cent probability of developing breast cancer. Although at the time Jolie did not have cancer, she decided to pre-empt the disease and undergo a double mastectomy. She didn’t feel ill but she wisely decided to listen to the computer algorithms. “You may not feel anything is wrong,” said the algorithms, “but there is a time bomb ticking in your DNA. Do something about it — now!”
Authority will shift from humans to computer algorithms. Big Data could then empower Big Brother
What is already happening in medicine is likely to take place in more and more fields. It starts with simple things, like which book to buy and read. How do humanists choose a book? They go to a bookstore, wander between the aisles, flip through one book and read the first few sentences of another, until some gut feeling connects them to a particular tome. Dataists use Amazon. As I enter the Amazon virtual store, a message pops up and tells me: “I know which books you liked in the past. People with similar tastes also tend to love this or that new book.”
This is just the beginning. Devices such as Amazon’s Kindle are able constantly to collect data on their users while they are reading books. Your Kindle can monitor which parts of a book you read quickly, and which slowly; on which page you took a break, and on which sentence you abandoned the book, never to pick it up again. If Kindle was to be upgraded with face recognition software and biometric sensors, it would know how each sentence influenced your heart rate and blood pressure. It would know what made you laugh, what made you sad, what made you angry. Soon, books will read you while you are reading them. And whereas you quickly forget most of what you read, computer programs need never forget. Such data should eventually enable Amazon to choose books for you with uncanny precision. It will also allow Amazon to know exactly who you are, and how to press your emotional buttons.
Take this to its logical conclusion, and eventually people may give algorithms the authority to make the most important decisions in their lives, such as who to marry. In medieval Europe, priests and parents had the authority to choose your mate for you. In humanist societies we give this authority to our feelings. In a Dataist society I will ask Google to choose. “Listen, Google,” I will say, “both John and Paul are courting me. I like both of them, but in a different way, and it’s so hard to make up my mind. Given everything you know, what do you advise me to do?”
©Janne Iivonen
And Google will answer: “Well, I know you from the day you were born. I have read all your emails, recorded all your phone calls, and know your favourite films, your DNA and the entire biometric history of your heart. I have exact data about each date you went on, and I can show you second-by-second graphs of your heart rate, blood pressure and sugar levels whenever you went on a date with John or Paul. And, naturally enough, I know them as well as I know you. Based on all this information, on my superb algorithms and on decades’ worth of statistics about millions of relationships — I advise you to go with John, with an 87 per cent probability of being more satisfied with him in the long run.
“Indeed, I know you so well that I even know you don’t like this answer. Paul is much more handsome than John and, because you give external appearances too much weight, you secretly wanted me to say ‘Paul’. Looks matter, of course, but not as much as you think. Your biochemical algorithms — which evolved tens of thousands of years ago in the African savannah — give external beauty a weight of 35 per cent in their overall rating of potential mates. My algorithms — which are based on the most up-to-date studies and statistics — say that looks have only a 14 per cent impact on the long-term success of romantic relationships. So, even though I took Paul’s beauty into account, I still tell you that you would be better off with John.”
Google won’t have to be perfect. It won’t have to be correct all the time. It will just have to be better on average than me
Google won’t have to be perfect. It won’t have to be correct all the time. It will just have to be better on average than me. And that is not so difficult, because most people don’t know themselves very well, and most people often make terrible mistakes in the most important decisions of their lives.
The Dataist worldview is very attractive to politicians, business people and ordinary consumers because it offers groundbreaking technologies and immense new powers. For all the fear of missing our privacy and our free choice, when consumers have to choose between keeping their privacy and having access to far superior healthcare — most will choose health.
. . .
For scholars and intellectuals, Dataism promises to provide the scientific Holy Grail that has eluded us for centuries: a single overarching theory that unifies all the scientific disciplines from musicology through economics, all the way to biology. According to Dataism, Beethoven’s Fifth Symphony, a stock-exchange bubble and the flu virus are just three patterns of dataflow that can be analysed using the same basic concepts and tools. This idea is extremely attractive. It gives all scientists a common language, builds bridges over academic rifts and easily exports insights across disciplinary borders.
©Janne Iivonen
Of course, like previous all-encompassing dogmas, Dataism, too, may be founded on a misunderstanding of life. In particular, Dataism has no answer to the notorious “hard problem of consciousness”. At present we are very far from explaining consciousness in terms of data-processing. Why is it that when billions of neurons in the brain fire particular signals to one another, a subjective feeling of love or fear or anger appears? We don’t have a clue.
But even if Dataism is wrong about life, it may still conquer the world. Many previous creeds gained enormous popularity and power despite their factual mistakes. If Christianity and communism could do it, why not Dataism? Dataism has especially good prospects, because it is currently spreading across all scientific disciplines. A unified scientific paradigm may easily become an unassailable dogma.
If you don’t like this, and you want to stay beyond the reach of the algorithms, there is probably just one piece of advice to give you, the oldest in the book: know thyself. In the end, it’s a simple empirical question. As long as you have greater insight and self-knowledge than the algorithms, your choices will still be superior and you will keep at least some authority in your hands. If the algorithms nevertheless seem poised to take over, it is mainly because most human beings hardly know themselves at all.
Yuval Noah Harari is the author of ‘Homo Deus: A Brief History of Tomorrow’, published by Harvill Secker on September 8. He will be speaking in London, Cambridge, Manchester and Bristol. For more information go to po.st/HomoDeusEvents
Illustrations by Janne Iivonen

Yuval Harari on big data, Google and the end of free will


For thousands of years humans believed that authority came from the gods. Then, during the modern era, humanism gradually shifted authority from deities to people. Jean-Jacques Rousseau summed up this revolution in Emile, his 1762 treatise on


Ireland will on Tuesday be ordered to claw back billions of euros from Apple, triggering one of the world’s biggest tax disputes and a political showdown between Europe and the US.
Based on an obscure 1991 Irish tax ruling issued for Apple, then a struggling computer maker, the Brussels competition decision has the potential to transform how corporate tax avoidance is policed in Europe.
The order to recoup back-taxes is expected to potentially be big enough to ricochet into the US election campaign, overshadow Apple’s latest product launch next week, and set in train a landmark legal battle.
Ireland and Apple strongly deny any wrongdoing and see the decision as an egregious example of over-reach by the EU’s executive arm that will not stand up to scrutiny in court.
What is the dispute over?
At the heart of the matter are tax arrangements that helped Apple pay an ultra-low rate of just 4 per cent on nearly $200bn of foreign profits it has earned over the past 10 years.
Apple’s lightly-taxed foreign cash mountain is the biggest of any US multinational.
The $187bn it held outside the US in 2015 accounts for a big share of the $1.2tn that US multinationals have parked offshore, in the hope that US tax reform will eventually cut the cost of repatriating the profits.
So far, Apple’s foreign profits have been lightly taxed.
What is the commission’s complaint? Why was Apple’s Irish arm so important?
About 90 per cent of Apple’s foreign profits are earned by Irish subsidiaries, which are highly profitable because they hold rights to Apple’s intellectual property.
But these Irish entities paid little tax because they were not tax resident anywhere — a usual structure that exploited differences between the US and Irish definitions of residence.
The European Commission is targeting the arrangement on the grounds that it gave Apple an undue tax advantage that distorted competition. It alleges this amounted to illegal state aid, a breach of the EU’s unique restrictions on state support to companies.
While it builds on similar commission tax decisions recently served against deals for Starbucks in the Netherlands and Fiat in Luxembourg, the Apple case is by far the biggest and most significant.
What is Apple’s position on the investigation?
EU investigators have examined how Apple paid a tax rate of less than 1 per cent on European sales in some years. But the company insists it pays every cent of tax owed in every jurisdiction.
Tim Cook, Apple’s chief executive, told the Washington Post in the past month that the tax structure deployed in Ireland was applicable to all companies and that it was not unique to Apple. In other words, Apple gained no special treatment in Ireland and therefore enjoyed no selective state aid.
With some passion, he personally pressed the company’s case with Margrethe Vestager, EU competition commissioner, in January. He also says the company is the biggest taxpayer in the US. “And so we’re not a tax dodger. We pay our share and then some.”
How will Ireland respond?
Ireland’s position is that any arrangement which gave tax advantages to Apple that were not available to other companies would have been illegal in Irish law. The country’s corporate tax regime has proved controversial with France and Germany.
Still, the Dublin authorities have taken a succession of steps in recent years to unwind the most contentious elements of the regime. Such moves include the elimination of the “stateless” tax structure deployed by Apple to minimise its tax rate in Ireland. Like Apple, Ireland is set to appeal the ruling in the European courts.
Why is the US so irked by the case?
This is more than a struggle between Brussels, Apple and Ireland. At the root of political concern in Washington is anxiety that profits are held abroad by US companies. In theory at least, forcing Apple to pay back taxes to Ireland would reduce the pool of money that might ultimately be taxed in the US.
Last week the US Treasury accused the commission of behaving like a “supranational tax authority” that threatened international tax reform agreements through the inquiries. This was on top of a direct plea from Jack Lew, Treasury secretary, to Jean-Claude Juncker, commission president, to reconsider the investigation. Earlier this year the Senate finance committee urged Mr Lew to consider a double tax rate on European companies if Apple was ordered to pay back taxes to Dublin.
What are the wider implications?
Appeals against the ruling will take years to resolve. But ultimately if the commission prevails in court, the decision will reset the balance of power on tax policy in Europe.
While governments will still be able to set their own tax rates, the commission will have established itself as a watchful referee of how national rules are implemented.
And the example of Apple — and its multibillion-euro bill in back taxes — will be a warning to big global companies to put their affairs in order, at least in Europe.
Success on appeal for Apple and Ireland might relieve some of that pressure, and give national governments more leeway.
But until then it threatens to upset US-EU relations, potentially further hampering already difficult talks on a trade deal. And for the moment, the commission’s ruling will stand as a severe blow to exotic avoidance strategies.


Ireland will on Tuesday be ordered to claw back billions of euros from Apple, triggering one of the world’s biggest tax disputes and a political showdown between Europe and the US. Based on an obscure 1991 Irish tax ruling issued for Apple, then a


It was a typically lazy August day on the holiday island of Martha’s Vineyard. Children were playing by the ocean, families were dining by the waterfront, and President Barack Obama and his family were enjoying the penultimate day of their holiday and relaxing on the beach. Lazy, that is, for everyone except Hillary Clinton.
Following a quick stop on neighbouring Nantucket, the Democratic presidential candidate was barrelling across the island in a motorcade as she made her way from one event to the next — a one-woman, selfie-taking, fundraising machine.
It was one part of a multi-stop tour that has taken her to wealthy enclaves across the country. In the 10 days to August 30, Mrs Clinton devoted seven full days to the endeavour, attending 20 separate events, some yielding seven-figure sums in two-hour windows.
In the final days of summer, Mrs Clinton is racing to raise the $1bn her advisers say she needs to defeat Donald Trump in November’s election, an amount comparable to what Mr Obama and Republican nominee Mitt Romney each raised in the 2012 contest.
Dennis Cheng, Mrs Clinton’s finance director, told campaign staff this month that they were halfway towards meeting their target, the Associated Press reported.
Building on the successful grass roots tactics used by primary rival Bernie Sanders, the Clinton campaign has stepped up its campaign to attract money from small donors, sending daily emails to supporters in recent days warning that the campaign was not “hitting [its] goals” in August.
The Clinton camp is keen to stress that the average donation size in July was just $44. But the whistle-stop tour of wealthy Martha’s Vineyard and the other big-name fundraisers underline how Mrs Clinton continues to rely heavily on establishment Democratic donors from the financial, technology and entertainment industries.
In California, she visited the home of Earvin “Magic” Johnson, the former basketball star, and his wife Cookie, before dropping in at the Hollywood mansion of celebrity couple Jessica Biel and Justin Timberlake, who at a 100-person event complete with a photo booth raised more than $3.3m.
Later, a select group of about 20 guests paid more than $200,000 each to dine with Mrs Clinton at the home of Laurene Powell Jobs, widow of Apple founder Steve Jobs. On Nantucket, they paid up to $27,000 to nibble on hors d'oeuvres at Innisfree, the estate owned by Elizabeth Bagley, the former US ambassador to Portugal.
By contrast Mr Trump has attended just a handful of fundraising events so far, despite raising $80m in July — only $10m less than Mrs Clinton.
You have to play by the rules and excel on every level. And one level is fundraising - Lynn Forester de Rothschild, E.L. Rothschild chief executive and prominent Clinton donor
Unlike Mrs Clinton’s, Mr Trump’s campaign has not given details of his fundraising schedule. It is known that he attended an event at the Cape Cod home of Bill Koch, the billionaire businessman. (Mr Koch’s better-known brothers Charles and David have declined to endorse the candidate.) While Mr Trump was set to hold a fundraiser in Rhode Island this week, that event was cancelled, the Providence Journal reported.
This lack of fundraisers has freed Mr Trump up to spend more time on the campaign trail, including recent appearances in Florida, Ohio and Mississippi. Mrs Clinton, by contrast, has hosted just one public campaign rally in the past two weeks.
Lynn Forester de Rothschild, chief executive of E.L. Rothschild and a prominent Clinton donor, said it was unfair to criticise Mrs Clinton for her use of high-end fundraisers, especially as the Democratic candidate was a vocal critic of the Supreme Court’s 2010 Citizens United ruling, which overturned campaign financing limits.
“She has to raise the money that is necessary in this environment, until Citizens United is repealed and there’s the comprehensive campaign finance reform that Hillary has promised. You have to play by the rules and excel on every level. And one level is fundraising,” Lady de Rothschild said.
Mr Trump, she claimed, would have adopted a similar tactic had he been more successful in wooing wealthy donors. “He doesn’t have the kind of supporters that she has. He would have fundraisers all day long if he could fill a room,” she added.
Matt Bennett, co-founder of Third Way, a Democratic think-tank, said Mrs Clinton was following a path well trodden by previous presidential nominees, both Democratic and Republican.
US election poll tracker Which White House candidate is leading in the polls?
“This [fundraising] is what you do in August. Voters aren’t paying attention. They're not watching television, they’re not going to rallies, they're not thinking about politics. And all your donors cluster in places that are easy to access, like The Hamptons,” Mr Bennett said.
The Hamptons is where Mrs Clinton has spent the past few days, attending six different fundraisers on Sunday and Monday, pulling in an estimated $14m. On Tuesday evening, she was due to appear at another Hamptons fundraiser, this one at the home of singer Jimmy Buffett, where VIP tickets, including premium seating and a private reception with the presidential candidate, cost $100,000 a piece. Jon Bon Jovi were scheduled to give a performance.
According to one former aid, this week could be the last chance for Mrs Clinton to meet en-masse with rich donors before the campaign really kicks off following September’s Labor Day holiday. “It is a lot harder to do that after Labor Day when [the candidates] actually have to go to real places,” he quipped.

Fundraising drive underlines Clinton’s reliance on wealthy backers


It was a typically lazy August day on the holiday island of Martha’s Vineyard. Children were playing by the ocean, families were dining by the waterfront, and President Barack Obama and his family were enjoying the penultimate day of their holiday


Millennial Money: What social media says about your lifestyle and creditworthiness
©iStock
Students about to head off to university have more to worry about than the prospect of loading themselves with debt. It is also the time of your life when your finances come under surveillance.
Credit scoring companies will be watching your every move from the age of 18 onwards, and years down the line, they will be the ones telling your bank whether to let you have that mortgage or not.
There are three major credit scorers in the UK — but it is likely that most millennials are blissfully unaware of them. They were not something that concerned me until, in my early twenties, I tried to switch from using a pay-as-you-go mobile contract to a fully fledged grown-up pay-monthly smartphone — only to be told I could not.
The computer, apparently, had said no. No further explanation was available. It seemed ridiculous — all right, I had a few unpaid university library fines but I’d always paid my rent on time (sort of) and I’d never even had a credit card.
So I just gave up. It seemed boring — and it was only when a colleague was turned down for a mortgage thanks to a years-old unpaid water bill that I realised my credit score really did matter. I was struck by the opacity. Who are these credit scoring companies? How do they have so much power? And what exactly do they do anyway?
The idea that there were people out there watching my every move and making what seemed quite a moral judgment about my financial trustworthiness was grim. But it is important to note that with a bit of time and effort, you can basically game the system.
In this age of unlimited data you might expect a credit check firm to be stalking you quite comprehensively. Millennials put an enormous amount of information out there and a whole host of apps will merrily download photos from your phone and demand access to your entire email inbox. Seeing a targeted ad in your news feed is often quite spooky. But while our social media posts can be a guide to our spending preferences, are they a reliable gauge of our creditworthiness?
Credit scoring companies in the US and China are already experimenting with data from social media profiles. Counting how many times someone says “wasted” in their Facebook status can help to predict whether they will repay their debts on time, according to a trial by US credit analyst FICO.
Being ‘wasted’ on Facebook may damage your credit score Credit analytics groups explore new ways of assessing a consumer’s ability to handle loans
And in China, who you are friends with can also boost your credit score. Peer-to-peer lender Jubao revealed last week that it was more likely to give borrowers the thumbs up if they were Facebook friends with celebrities. “You must be to some extent trustworthy . . . since otherwise you wouldn’t have such friends,” the company’s co-founder explained.
The good news is that UK credit agencies are not there yet — although it probably won’t be long. Hello Soda, a Manchester-based start-up, is one company that gathers information about potential borrowers from social media. But while lenders might be keen to buy this data, a study by credit agency Equifax last year showed that most consumers were horrified by the idea of granting such access.
So why do credit scoring companies want to befriend millennials in this way? Their problem is that the pool of data they draw from when assessing credit risk is still quite small. They mostly want to see your record when it comes to managing credit — but this means looking exclusively at utility bills and any credit cards you might have.
Rent isn’t included because, unlike mortgage repayments to a bank, it is tricky for the agencies to track payments to or between individuals. With at least one agency, I’m facing a problem common to a lot of people under 30, which is that my credit file is “too thin”. This just means that the credit scorers don’t have enough data points to produce a credit score confidently.
There are some things you can do to get around this problem, and it is best to start early — when you move into student halls or shared housing. If it is possible to get your name on to utilities bills, do so — but obviously make sure you pay them on time.
Whatever you do though, if you share a house or a flat with someone, don’t set up a joint bank account to deal with the bills. Behind the scenes, in the weird and wonderful world of credit scoring, this binds you to your housemates for years, and means you could affect each other’s credit scores long after your friendship has ceased. It’s one thing to move out because Mickey keeps peeing in the shower — but imagine the bitterness you’d feel if you couldn’t get a mortgage because Mickey hadn’t paid his Barclaycard bill.
Cancel bills when you move house — utilities companies are the bane of renters’ lives. Most people I know have spent many hours trying to persuade various gas and water companies that they shouldn’t be liable for the previous tenants’ bills.
I discovered with annoyance that one of the black marks on my own credit file was the fact that I’d never had a credit card. So, surely this proves that I’m a prudent individual worth lending to? Apparently it doesn’t work like that. The first thing to know is that you start on zero. The premise is that you’re unreliable and it’s up to you to prove otherwise. Actually, Equifax told me, credit agencies want to see that you’ve managed your credit well in the past. It’s one of the horrible traps of the scoring system — you have to get a credit card to prove you are worthy of holding a credit card.
If students can trust themselves not to go on a spending spree, getting a card now will do wonders for your future score. But another infuriating fact is that those of us with a poor credit rating will have to pay more for credit. So make sure you pay it off in full every month to avoid high interest charges.
There’s also another very easy and cheap way to improve your score — make sure you are registered to vote. This will help credit agencies verify that you live where you say you do.
Millennial Money Generation rent: recognise any of these demon landlords? A rogues’ gallery from ‘the Snooper’ to ‘the DIY Disaster’
Check your score occasionally and correct any mistakes — and remember that mistakes can happen. I’ve long had an unused overdraft facility which should work in my credit score’s favour, but it still isn’t showing up on my report. And if you have an erroneous utility bill, credit scoring firms can contact companies on your behalf — but only if you subscribe to their service.
And that is the other annoying thing — the big agencies charge for credit reports. You can reduce the cost if you remember to cancel the monthly subscription that most push you into once you’ve downloaded the report. But there are also a host of free services appearing — like ClearScore — which have taken up the mantle of teaching millennials about their credit score in the hope that they will use their website to obtain new credit.
Aime Williams is a reporter on FT Money. aime.williams@ft.com; Twitter: @Aime_Williams

How Facebook can affect your credit score


Students about to head off to university have more to worry about than the prospect of loading themselves with debt. It is also the time of your life when your finances come under surveillance. Credit scoring companies will be watching your every


©FT Graphics/Brian Saffer
Nearly four years after landmark reforms designed to shake up the financial advice market, the amount that private investors pay for investment advice has barely fallen, and many firms’ fee schedules remain mired in complexity.
According to accountants Grant Thornton, someone who entrusts £100,000 to a UK financial adviser or investment manager for a decade would pay 2.56 per cent of their pot every year, on average, for financial planning and the costs of holding financial products.
In December 2012, when the UK’s then regulator the Financial Services Authority (now the Financial Conduct Authority) implemented new rules to govern financial advisers in its Retail Distribution Review, that average cost was 2.86 per cent.
RDR scrapped commission payments to financial advisers by product providers on new business and aimed to introduce greater clarity between the different types of services investors could pay for.
The regulator said the reforms would “increase transparency of prices and enable competition” adding that charges should be disclosed in a “clear and upfront manner”.
In today’s income-starved market, the cost of advice is arguably of even greater concern to investors. The average private client with money in a steady growth-focused discretionary portfolio achieved a return of 2.3 per cent in 2015, according to private wealth index provider ARC.
All ongoing costs of running the discretionary portfolio — a type of investment where clients’ stocks and funds are chosen for them — were subtracted by ARC. But the costs of financial planning and advice, of administering tax-efficient wrappers such as Isas or pensions are not accounted for.
The cost of investing Firm Initial charge Ongoing charge Portfolio size assumed Extras Towry 1.80% 1.115% £500,000 1.8% taken each time new money is added St James Place Up to 5% 1.85% £500,000 6% exit fee on pension products in Y1, falls to 0 in Y6 Brewin Dolphin Up to 2% 1.91% £500,000 £20 per share trade Hargreaves Lansdown portfolio management service 1% Up to 2.4%* £500,000 Up to £11.95 per share trade * If multi-manager balanced trust purchased and ongoing advice taken; Sources: Companies/FT Money research
Wealthy consumers, says Bertie Gore Browne of Gore Browne Investment Management, “must look at fees very closely, as paying 2 per cent to 3 per cent a year is not justified in a time of low investment returns”.
Although the percentage amounts seem small, for regular savers, the compounded effect can be large.
Compare the advice market
We can go online to assess mortgages, holidays or phone contracts. Yet many financial advice and investment management companies do not display the total annual cost of using their services on their websites, instead offering charges for individual products or services, such as “financial planning” or “investment platforms”.
“If you were an average saver going online to put a shortlist together of companies you may interview to become your longstanding [financial] adviser, there is no easy way of understanding or comparing the likely costs,” says David McCann, an analyst at Numis Securities who follows the investment management and financial advice industries.
David Harrison, a financial advice industry veteran who runs wealth management services business True Potential, adds: “Consumers get a poorer deal because they have no way of comparing advice costs accurately.”
Financial advisers and wealth managers often argue that it is hard for them to express a price for their services on a website because each client chooses different services.
Interactive Calculate the hidden cost of fund fees Over the long term, managers’ fees can make a huge difference to wealth
At Hargreaves Lansdown, for example, someone using the “portfolio managed service” has a choice whether or not to take financial advice on an ongoing basis.
It is similar to going to a restaurant, where one has an idea of the cost of the meal, but does not know one what one will order.
Following the changes brought in by RDR, most people hiring a financial adviser will have a percentage of their portfolio subtracted at the outset as an “upfront charge” to cover financial planning and the set up of their investment portfolio. This charging method is often referred to as “ad valorem”.
“If it is 2 per cent, each £100 invested starts out as £98,” explains Graham Harrison, the managing director of ARC.
Large companies typically handle both advice and investment. Smaller advisers might subcontract investments to companies who run what they call “discretionary” or “bespoke” portfolios if the client has several hundreds of thousands of pounds, or more basic “model” portfolios if they have less.
In subsequent years, an “ongoing charge” is levied on the money invested. Most companies state a percentage amount on their website or in fee schedules. This can appear lower than actually is, however, if it is disclosed ahead of other costs such as share dealing or VAT.
UK retail investing fees stay above 2.5% annually Despite high hopes, reforms have not fundamentally changed charges
Brewin Dolphin, for example, says the ongoing charge for its financial planning and investment service is 1.3 per cent a year but a company spokesman confirms that this excludes VAT, and that investors holding funds, shares and EFTs will have an additional cost of 0.35 per cent.
As well as the cost of advice, investors need to be aware of the costs of different investment products. Clients’ money is often invested in funds run by professional stock pickers, and these will attract additional charges. With fund investments, the figure to look for is the total expense ratio (TER) or ongoing charges figure (OCF), which includes the management charge plus most other running costs. A typical TER for an actively managed fund might be 0.75 per cent. For a tracker, expect to pay 0.2 per cent or less.
How to bring costs down
The cash rich and time poor may consider paying a professional to handle investment decisions — be it a financial adviser or active fund manager — to be money well spent. However, this should not stop investors from asking if they are getting the best value, says Abraham Okusanya at Finalytiq, a consultant to wealth managers and financial advisers. An affluent client with a large portfolio to bring to a financial adviser or investment manager should be able to argue down percentage-based, he advises.
Mr Okusanya believes that someone with £1m to invest should never pay anything close to 2 per cent for upfront advice for ongoing financial work.
“The initial charge is for financial planning,” he says. “It would be hard to get to £20,000 of work here, because 15-20 hours of work would have to be done for the client at the beginning of the relationship, and some of this will be done by a paraplanner, whose hourly rate would be lower than the financial planner’s.”
The average hourly fee for a UK financial adviser is £150, according to unbiased.co.uk, although high-end wealth managers in central London can charge £350 or more.
Paul Killik Bond funds — the next big concern for investors? How will the market absorb a cascade of money exiting from the sector?
It is common for wealth managers to say they are providing their clients with a “bespoke” service, which suggests professionals are picking stocks or funds just for them.
The term is not a regulatory one, however. Paul Killik, founder of Mayfair wealth manager Killik & Co, says it is a throwback to the 1980s, when brokers could run personal portfolios for each client. “If they had a preference for technology companies, or the Far East, you were able to cater for that.”
Nowadays, he says, the FCA requires investment managers’ compliance departments to monitor investment mandates closely to assess suitability.
“A compliance department, which has to have a drop-down overview of the risks you are taking, could not monitor hundreds or thousands of individual portfolios, as otherwise they could not ensure to the regulator the business is being properly managed,” he says.
Graham Harrison at ARC agrees. He says investment portfolios tend to fall into a few distinct categories, such as “conservative” or “steady growth”. The word bespoke “makes people feel special”, he says, while a manager offering this will in fact have “maybe 18 investment solutions” that fit most clients’ needs. They can “flex this model”, he adds, “for example if a client hates oil shares or does not want exposure to Japan”.
“A truly bespoke service would be provided by the private investment office of a very wealthy family, who have done the equivalent of hiring their own tailor,” he says. What retail investors get is comparable to a ready-made suit, he adds. “They can change the pockets or the lining.”
Providers of services labelled “bespoke” argue the added extras are crucially important, as they can offer wealthy clients additional services such as tax advice.
“Do not underestimate the value of a customised approach for wealthier clients in ensuring they mitigate potential exposure to capital gains tax or inheritance tax, as the benefits from tailor-made investment management can be very considerable,” says Jason Hollands, managing director of Tilney Bestinvest, adding that such services “vastly outweigh any fee benefit from a canned solution bought from a website”.
If you are tempted to change your adviser, one final word of warning — there can be an exit fee. For example, FTSE 100 wealth manager St James’s Place will levy exit charges of 6 per cent on pension investments if clients leave the company within the first year, falling to zero after six years.
SJP managing director David Lamb said: “We strongly advise clients to invest for the medium term and do not advise investments for less than five years.”
Four low-cost alternatives for investors
Post RDR, the upfront-plus-ongoing costs model is the default charging model, and is popular with advisers because it gives them a predictable revenue stream. Europe Economics, which was hired by the Financial Conduct Authority in 2014 to report on the changes to the financial advice industry since the 2012 reforms, estimated that up to 90 per cent of the industry was charging in this way.
Here is the FT Money guide to the four main alternatives:
Fee-based financial planners
Fee-based financial planners can assess investment needs and retirement goals, charging on an hourly basis. Their hourly rates can be as high as a solicitor’s, although for larger portfolios they can prove better value than a 2 per cent upfront charge.
Those serving higher-end clients include James Hambro & Partners, Capital Asset Management and Kennedy Black. High street independent financial advisers may also be more willing to accept a flat fee for a service.
At the end of 2015, financial advice portal Unbiased.co.uk surveyed 217 advisers and found that while just 14 per cent were charging on an hourly basis, 45 per cent would accept a flat fee for a one-off financial planning project.
Robo advice
For investors with less complicated financial affairs, a robo-adviser could cut costs. Currently more popular in the US than in the UK and Europe, online-based investment services such as Nutmeg are growing in popularity with younger, tech-savvy investors.
Rise of the robo-advisers Voice apps and robots to revolutionise investments
Nutmeg charges a maximum annual management fee of 0.95 per cent for managing clients’ money, keeping costs low by constructing portfolios from cheap, passive products that mimic the performance of stock markets such as the FTSE 100, or asset classes such as government bonds. Its average annual fund charge is 0.19 per cent.
Traditional advisers argue that you get what you pay for, noting that robo-advisers lump investors into fairly basic categories, and do not offer face-to-face advice or financial planning. But the sector is growing in popularity.
Cardiff-based Wealthify and German company Scalable Capital, have also launched this year, as has MoneyFarm, an Italian company. In a bid to lure new customers, MoneyFarm announced in February that it would waive all fees on Isa investments under £10,000 and over £1m, pushing robo-advice fees to a new low for some investors.
A self-directed model portfolio
As well as the robo-advisers, investors looking for a low-cost alternative to traditional wealth management could consider the self-directed model portfolio approach offered by a wide range of brokers — including Hargreaves Lansdown, Charles Stanley, Fidelity, and Bestinvest. These are a popular way of investing tax efficiently within a stocks and shares Isa.
You need JavaScript active on your browser in order to see this video.
How much of your fee goes towards the online broker and how much goes towards paying for the funds (as an annual fund charge) varies. Hargreaves and Bestinvest will charge 1.4 per cent and 1.5 per cent respectively for buying into their off-the-shelf portfolios, along with a 0.4-0.45 per cent annual platform charge. AJ Bell, meanwhile, will levy a 0.22 per cent fund management fee and no platform fee for its Global Tracker Portfolios. Sitting between these offerings cost-wise are Charles Stanley, Fidelity and Trustnet Direct.
Investors who also use these platforms to trade shares directly should be aware that dealing costs vary widely, ranging from a minimum of £5.95 at Hargreaves Lansdown to £12.50 at Alliance Trust.
Deal direct with asset managers
Retail investors can also look forward to dealing directly with asset managers, who are themselves realising that they can bypass the middlemen and go straight to their customer, cutting out advisers and wealth managers. Dutch fund house Robeco, Deutsche Asset & Wealth, and US low-cost giant Vanguard are all working on direct-to-investor offerings, but these will probably only offer portfolios built from in-house funds. Investec Wealth, the wealth management arm of the South African bank, is set to launch a robo platform this year to service clients with fewer assets.
According to Citigroup, assets managed through robo-advice companies could reach $5tn (£3.8tn) over the next decade.

How much do you really pay your money manager?


Nearly four years after landmark reforms designed to shake up the financial advice market, the amount that private investors pay for investment advice has barely fallen, and many firms’ fee schedules remain mired in complexity. According to


Within 15 seconds of the semi-final of the men’s football tournament at the Olympics kicking off, Neymar was bearing down on goal. Brazil’s star striker was tackled by Honduran goalkeeper Luis Lopez, but the ball ricocheted between the men and rolled into the net.
Yet, the crowd inside the famous Maracana stadium in Rio de Janeiro was unsure whether to celebrate. The tackle had left Neymar in pain and in need of medical treatment. Fears rippled among the spectators who thought they were witnessing a repeat of the 2014 World Cup, an event Brazil also hosted. Back then, the team suffered a humiliating 7-1 defeat to Germany, a match Neymar missed through injury.
That World Cup loss has subsequently been seen in the country as the start of two years of national decline. Brazil’s footballing pre-eminence shattered, it was then shaken by a political crisis, a deep recession and a corruption scandal.
The mood is shifting. A first victory in the Olympic men’s football tournament — the gold medal that Brazilians desire above all others — could presage a broader revival. Neymar returned to the field and led a 6-0 rout of Honduras, scoring his second goal from the penalty spot in stoppage time.
“The victory will lift spirits but the next step will be harder,” said Rejane Lima, a football fan from Santos, the former base of Pelé, Brazil’s greatest player.
A gold medal would come at a crucial turning point for Latin America’s biggest economy. After suffering its deepest and longest recession on record — a 3.8 per cent contraction last year and an estimated 3.2 per cent decline this year, Brazil’s ailing economy is beginning to show signs that it is at least stabilising.
An upcoming vote on whether to impeach suspended President Dilma Rousseff, who was suspended from office in May, is set to ease the country’s political stalemate, raising the chance that congress will approve the fiscal reforms needed to bring back growth.
Four months after the lower house voted to begin impeachment proceedings against the leftist leader — ostensibly for breaking budget laws but really over anger about the recession and corruption — the senate is set to make its final decision at the end of August, barely a week after the Olympics closing ceremony.
Rafael Cortez, a political scientist at the Tendências consultancy, puts the chances of Ms Rousseff’s impeachment at about 80 per cent — a scenario that would lend Michel Temer’s market-friendly interim government more legitimacy to be able to pass unpopular reforms.
A gold medal in football is one that Brazilians prize above all others
“Even the suspension of Dilma helped improve expectations, so much so that consumer and industry confidence indices are already showing improvement — there is a feeling that the worst is over,” says Mr Cortez.
Brazil’s National Confederation of Industry said this week that its industrial confidence index has turned positive for the first time since March 2014, moving above the 50-point mark to 51.5 points in August from 47.3 points last month.
Mining companies and the rest of Brazil’s extractive industry, which has also benefited from the effect on exports of the weaker local currency, are particularly positive, as are larger companies with more access to funding, says José Augusto Fernandes, CNI’s director of policy and strategy. Companies in the construction sector, which is heavily-involved in the bribery and kickback scandal at state-oil company Petrobras, are more negative but sentiment is still improving as the interim government adopts more orthodox and liberal economic policies.
“We were heading into the abyss under the previous government of Dilma so just the change in economic policy significantly reduces the risk of the country suffering a catastrophic event,” says Luciano Rostagno, chief strategist at Banco Mizuho do Brasil.
Henrique Meirelles, Brazil’s new finance minister, has moved to reduce the country’s gaping budget deficit that ballooned to more than 10 per cent of gross domestic product last year, while central bank president Ilan Goldfajn is battling to anchor inflation expectations.
However, even if Ms Rousseff is impeached, Brazil’s new government will have a very small window to pass meaningful reforms, analysts warn.
Even the suspension of Dilma helped improve expectations, so much so that consumer and industry confidence indices are already showing improvement — there is a feeling that the worst is over - Rafael Cortez, Tendências consultancy
Obtaining a quorum in Brazil’s lower house will be significantly reduced until the country’s municipal elections in October with 15-20 per cent of lawmakers running for positions and many more spending time in constituencies campaigning for family and friends, according to Eurasia.
In December Brazil will then shut down for its long Christmas break, which often extends to carnival celebrations at the end of February. Later in the year, infighting in congress will probably increase ahead of the 2018 presidential elections, says Carlos Melo, a political scientist at Insper, a university in São Paulo.
While Mr Temer may be able to pass a proposed constitutional amendment to freeze future public spending, much-needed changes to Brazil’s bloated pension system are expected to be painfully slow. “They need to at least discuss the retirement age — reforms in Brazil are always incremental but they need to at least show that things are beginning to change,” says Mr Melo.
Then there have been the Rio games, which have suffered numerous glitches, from athletes being robbed to empty seats in stadiums. But Brazil’s Olympics have largely avoided the organisational disaster some had feared.
The progress of its men in the Olympic football tournament reflects the changing fortunes. Neymar was booed by his own fans after goalless draws against lowly South Africa and Iraq. But a winning run to the final has rekindled enthusiasm.
Brazil’s Seleção, the nickname given to the national team, still face major obstacles to earn redemption. They face the team it has come to fear most — Germany — in Sunday’s final.
For the political classes too, the real test will be producing results on the economy regardless of the outcome on the pitch. Ms Lima, the Brazil supporter, said: “In spite of all the festivities around the games, I don’t see a depoliticisation of people. Brazilians have learnt to separate sport from politics.”

Brazil looks to build on goals beyond football success


Within 15 seconds of the semi-final of the men’s football tournament at the Olympics kicking off, Neymar was bearing down on goal. Brazil’s star striker was tackled by Honduran goalkeeper Luis Lopez, but the ball ricocheted between the men and


US sales soar, providing a rare bright spot for Iran
Like many of the thousands of visitors who packed into a Persian carpet exhibition in Tehran, Mohammad could not afford to buy the exquisite rugs — he simply wanted to touch the fine, hand-woven craftsmanship.
And Mohammad knows his carpets: the 56-year-old spent two decades exporting Iran’s most sought after product to America. But he was forced out of business in 2010 after US sanctions on Iran were expanded to include Persian rugs, pistachio nuts and caviar.
“Looking at these intricate and delicately woven carpets make me relaxed,” he says, declining to give his last name. “I can stand here for an hour to look at every piece.”
The US was Iran’s major market for Persian rugs and the sanctions caused total carpet exports to drop by 30 per cent — the embargo meant no American could buy, sell or import Persian rugs, even if they were purchased outside of the Islamic republic.
But now, with many of the west’s sanctions lifted after Tehran reached a historic nuclear deal with western powers last year, the industry is enjoying a boom as sales to America soar.
Persian carpet exports were up 39 per cent in the four months to July 21, with American devotees of the Iranian artistry the main buyers. The surge is providing a rare bright spot for Iran amid mounting frustrations about foreign companies’ wariness to take advantage of the post-sanctions era and provide the economic dividend Iranians expected.
“The most important reason for the rise is the lifting of the US sanctions,” says Hamid Kargar, director of the Iran National Carpet Center, the state body in charge of handmade carpets.
Rug exports to the US were zero in the first four months of the 2015 financial year, but reached $27m in the same period this year, he says.
Gillian Tett Banks cannot invest in Iran without US guarantees This tale is a sad example of how uncoordinated Washington’s policy can be
But at the exhibition, where about 700 stands display a vast array of rugs painstakingly handwoven in different corners of the country by about 1m weavers, Hamidreza Zollanvari says there is still huge room for growth in the US.
He is the chief executive of Zollanvari Handwoven Carpet Company, which has been involved in the rug business for a century and has branches in the US, China, Germany, Switzerland and South Africa. The company has sold $250,000 worth of carpets to the US since January, but that compares to its annual global exports of $8m.
Mr Zollanvari says western banks’ reluctance to do business with Iran is a problem, with traders struggling find ways to transfer money between Iran and the US.
Despite the nuclear deal, the US retains some sanctions against Iran for its alleged sponsorship of regional terrorism. Those restrictions have made bankers wary of doing business with Iran for fear of inadvertently aiding money laundering financing terrorism or financial crime
“We have also had no access to the [US] market for years and don’t know what’s going on in their market and how their fashion and tastes have changed,” says Mr Zollanvari.
An important test of the Iranian industry’s ability to build on its recent gains will be The Rug Show in New York next month, he adds.
“It could be the first trial for the Persian carpet to test how much of the US market share they can take back,” says Mr Zollanvari.
The trial will come in an increasingly competitive market. Rivals in countries such as Pakistan, India, Afghanistan and China have taken advantage of sanctions on Iran to boost their exports.
Sitting on a stack of 40 handmade carpets worth about 30bn rials ($964,000), Mahmoud-Reza Habibian says exporters in those countries can produce a carpet for $40 a square metre but “I cannot do it with less than $100 per square metre”.
There are other challenges too. Sales to Europe have dipped due to the continent’s economic woes, while the Arab uprising and instability across the Middle East has hit exports to that region.
And while a trickle of tourists have started to visit the Islamic republic since Hassan Rouhani, the centrist president, took office in 2013, they cannot use credit cards to buy Persian rugs — among the world’s most expensive carpets — because of the absence of international banks.
But Iranians believe their carpets are still unrivalled.
“As a car lover will prefer a Mercedes-Benz to a Kia Pride and will pay a hell of money for it, a carpet lover will pay for Persian rugs because they are prestigious, have a long history and are genuine and diverse in designs,” says Mr Kargar.
At the exhibition, Mr Habibian shows off a piece of intricate carpet from Nain, near the central city of Isfahan, which took a mother and her two daughters four and half a years to weave.
“Elsewhere it may take one and half years to weave a carpet of this size. But you know why it takes so long here? Because every single tie of this carpet is knotted with love and just love, while its weavers have worked on it with all their hearts,” he says.


Like many of the thousands of visitors who packed into a Persian carpet exhibition in Tehran, Mohammad could not afford to buy the exquisite rugs — he simply wanted to touch the fine, hand-woven craftsmanship. And Mohammad knows his carpets: the 56-y


©Chiaki Nozu/Getty
This year’s Reading Festival boasted one of its most eclectic line-ups of late, with the curation taking in rock, pop and grime across all stages. Underground punk hero Frank Carter had his first main stage slot, and found his calling with his third band, the Rattlesnakes. Their bluesy chug — heard to full effect on their unofficial anthem “Devil Inside Me” — is a sonic update on Carter’s earlier work, and all the more accessible thanks to the hooks that permeate the base of purposeful, fuzzy hardcore-punk.
Grime is the first British musical movement in years to boast a true, distinct subculture. It made perfect sense that Boy Better Know — the collective formed by central genre figureheads Jme and Skepta — was given a prime slot on the main stage.
Solo 45’s “Feed ’Em To The Lions” offered a lyrical challenge to rival artists set to distinct clanging beats, before Chvrches’ twinkly, ethereal pop was recreated note-perfectly on stage with “Recover” and “The Mother We Share” fizzing with top-end sweetness.
Headliners Foals sounded considerably meatier and bass-heavy than they do on record, with single “My Number” standing out among a set that hinged on Yannis Philippakis’s tight and rhythmic guitar work. Breakthrough track “Cassius” had a rare live outing; it’s the source from which Foals’ distinct, clean rock originated, and their sound has evolved from its conception without losing its stamp of individuality.
Radio-friendly rockers You Me At Six were the surprise artist on the Pit stage on Saturday, and I found myself baffled at the size of the singing, swaying audience. Behind the colloquial relatability of the lyrics are rather uninventive chord patterns that sound as if they were written with the radio in mind, and rely on tried-and-tested devices such as octave jumps and repetition to flesh them out.
Slaves present a similar issue on the main stage in that their intentional, verging-on-caricature embodiment of the frustrated working class feels like a lunge for popularity rather than a heartfelt truth. Phrases such as “We are all slaves” make the right socially-questioning noises, but the ramblings of “Girl Fight”, where Isaac Holman describes witnessing women brawling while stumbling home with a takeaway, sound like a parody of the subculture they supposedly grew from.
Electronic undertones to Låpsley’s soulful chamber pop give her the feel of another current buzz act: the clean, minimalist electro pop of Christine and the Queens. Part Enya, part “I Am a Bird Now”-era Antony and the Johnsons, it’s Låpsley’s velvet lower register that will be her currency.
©Joseph Okpako/WireImage
Whatever one feels about The Red Hot Chili Peppers, they should be applauded for their ability to infuse singles and deep cuts alike with the unmistakable funk that ensures that listeners, reluctant or otherwise, know their songs. It’s almost become a sport to declare one’s hatred for the Chili Peppers, but the instant familiarity of “Can’t Stop”, “Dani California” and “Scar Tissue” — even the laid-back groove of new cut “Dark Necessities” sounds like something they wrote years ago — makes for a set that’s reliable if predictable. The Chili Peppers’ currency is consistency, and their sound will always polarise, but as a headliner for a commercial festival, they’re an obvious choice.
Consistency was something eluding Fall Out Boy, however, as the Sunday co-headliners struggled to inspire the same passion for the dance-rock of their latest work as they did for their earlier hits such as “Sugar, We’re Goin’ Down” (which they inexplicably played second despite it offering a guaranteed climax) and “Dance Dance”. Their 2013 album Save Rock And Roll struck the right balance between stadium pop and the artful, poetic rock that found them fame, and its title track, complete with Elton John impersonations from Patrick Stump, was a highlight here.
Biffy Clyro’s live sound brims with warm vocal harmonies and the earthy tones of Simon Neil’s guitar. The fullness makes them sound like a band of 10, and it’s on a stage that allows the knifepoint riffs of “Living Is A Problem Because Everything Dies” and reverberating swells of “Folding Stars” to grow and permeate the air that the Scotsmen are most at home. An impassioned rendition of “Many of Horror” sounded like the distillation of empathy, loss and the human condition distilled into music; the air appeared to stand still as the weary voices of Reading rose to sing along with Neil, sharing in his lament of lost love, and fireworks escalated the last performance of the weekend to a closing ceremony.
readingfestival.com


This year’s Reading Festival boasted one of its most eclectic line-ups of late, with the curation taking in rock, pop and grime across all stages. Underground punk hero Frank Carter had his first main stage slot, and found his calling with his third


Privacy is perhaps the greatest luxury anyone can buy, hence the trend for properties hidden from prying eyes and online searches
©Sarah Hanson
There is nothing remarkable about 23726 Long Valley Road — except that it does not appear to exist.
Estate agents’ advertisements show that the high-end Californian home — six bedrooms, pizza oven, pool — is situated in a gated community on the edge of Los Angeles. Yet prospective buyers searching online to check out the neighbourhood are wasting their time — none of the area’s 648 homes appear on Google Street View.
There are people who still want kerb appeal but many others don’t want anyone to know where they live
All that online maps show of the area are street routes and names — what could perhaps be an outline plan for a future housing development. But anyone looking for a kerbside view of the property will find no evidence of it.
The community’s name gives a clue why: it is called Hidden Hills. What the area’s occupants — who reportedly include Kim Kardashian, Miley Cyrus, Justin Bieber and Jennifer Lopez — value above all is privacy. That includes banning Google’s photography vehicles from entering (and declining to talk to the FT; a spokeswoman for the area’s management company said it had a policy of not giving interviews to the press).
Academics have long used the names “hidden communities” or “invisible communities” to denote areas with high concentrations of deprivation and social marginalisation. Yet some of the world’s most privileged people are choosing to hide from the public eye to protect their homes from burglars and other forms of unwelcome attention.
In an evermore connected world, privacy is perhaps the greatest luxury anyone can buy.
This demand for under-the-radar living has fuelled the spread of places like Hidden Hills. California has several other neighbourhoods that guard their privacy by refusing to appear on Street View, including Bradbury and Bell Canyon. All are among the most affluent neighbourhoods in the US.
Author and futurist Geoff Manaugh, whose book A Burglar’s Guide To The City documents these attempts to take entire communities out of the public gaze, calls it an “urban-scale non-disclosure agreement”.
The occupants of such areas “do not want to be discussed” and operate on the basis that “out of sight [means] out of mind — and out of the reach of burglars,” he writes.
To be clear: these options are not a true stealth strategy, hiding you from the tax authorities or security services. But they are a way of avoiding more casual unwanted attention, from nosy neighbours to the paparazzi.
“There was a time when people really flaunted their wealth; now they don’t,” says David Forbes, head of private office at estate agent Savills who advises wealthy buyers. “People’s priorities over the years have shifted. Now right at the top of the list it’s security.”
He cites the routine use of shell companies and other ownership structures to give property buyers anonymity, along with the increasing popularity of gated communities rather than “buying the individual villa up on the hill that everyone can see”. Homeowners are also pouring “a lot more money than ever before” into home security systems, he says.
This safety threat can be very real, Forbes warns. “If you’re driving a convertible Bentley right now in the South of France you’re asking for trouble, you’ll be followed back to your villa by a couple of scooters. People will still spend their money on boats and planes but open street displays of wealth, no, people don’t want to attract that kind of attention.”
This caution is feeding through into the design of homes. “There are always people who want what’s known as kerb appeal but there are many others who don’t want anyone to know where they live, they want to be discreet.”
Attempts to avoid a property’s detection can range from the small-scale to the colossal. At its most minute, location trackers such as GPS can be blocked using a jamming signal, preventing attempts to follow individuals.
Such jammers are legally questionable in many jurisdictions: some governments have banned their sale and use. They work by disrupting the communications between satellites and location detectors which are contained in many everyday technological devices including mobile phones, digital pedometers and smartwatches — and, more sinister, can be attached to vehicles by stealth.
On a larger scale, architects have begun to experiment with ways to conceal whole buildings.
The simplest way to remove habitation from public view is to put it underground, with basement dig-downs or even entire subterranean properties.
Langtry House near Hampstead Heath in London, for example, is a substantial property with three bedrooms, three bathrooms and a cinema room which has been fitted into the space underneath what was previously a row of lock-up garages.
©Joas Souza
The constrained site is tucked behind a mansion block. Although the home’s design was influenced primarily by tight planning regulations, which severely limited its height, the result is a Bond villain-style hidden lair.
For properties that remain above ground, some architects are trying out stealth concealment designs. An architectural experiment proposed by JaK Studio involves cladding the upper floors of a family home in Brockley, south-east London, with layered mirrors that reflect its leafy surroundings, disguising its scale and form.
For extra stealth, property owners can take their homes off the grid — generating their own electricity and water supply avoids tell-tale pipes and wires heading on to their land. Self-sufficient communities have become increasingly popular for privacy, as well as ecological, reasons; some estimates suggest that 180,000 households are living off the grid in the US alone.
The Three Rivers Recreation Area in Oregon is one example. With about 80 permanent residents and more than 4,000 acres in total, the area includes a marina, private airstrip, desert golf course and hiking trails.
Like Hidden Hills, its homes do not appear on Google Street View.
Keeping a property off the map has a long pedigree: famously, London’s iconic Post Office Tower was an official secret for decades despite towering over the city as its tallest building for more than two decades after its construction in the 1960s. The tower did not appear on London maps and its existence was only formally acknowledged in 1993 when Labour MP Kate Hoey spoke about it in the House of Commons — bizarrely, given that the building was given an official launch party in 1965 and was then open to the public for 15 years.
©JaK Studio
The proliferation of private public space is leading to a world with multiple levels of mapping: like a computer game, those in the know can find hidden spaces that are invisible to the unknowing mass of other people.
In his dystopian fantasy detective novel The City & the City the author China Miéville envisages a world in which two twin cities share the same physical space but are invisible to each other everywhere except a handful of areas which exist in both places and are essentially border zones.
One of Miéville’s characters cites a popular bit of local folklore which has boy meeting girl but then both spending the rest of their lives walking alongside each other unknowingly, as they occupy different cities.
The pair would “spend their lives faithful and alone, rising at the same time, walking crosshatched streets close like a couple, each in their own city, never breaching, never quite touching, never speaking a word across the border”, Miéville writes.
Although people who choose to live under the radar in the real world are not quite so invisible to the rest of us, there is a parallel here. Like Miéville’s fictional characters, they walk alongside us during the day, but at night they disappear off the map.
Kate Allen is an FT political correspondent
Illustration by Sarah Hanson
Photographs: JaK Studio; Joas Souza

How the super-rich are making their homes ‘invisible’


There is nothing remarkable about 23726 Long Valley Road — except that it does not appear to exist. Estate agents’ advertisements show that the high-end Californian home — six bedrooms, pizza oven, pool — is situated in a gated community on the edge


It was a typically lazy August day on the holiday island of Martha’s Vineyard. Children were playing by the ocean, families were dining by the waterfront, and President Barack Obama and his family were enjoying the penultimate day of their holiday and relaxing on the beach. Lazy, that is, for everyone except Hillary Clinton.
Following a quick stop on neighbouring Nantucket, the Democratic presidential candidate was barrelling across the island in a motorcade as she made her way from one event to the next — a one-woman, selfie-taking, fundraising machine.
It was one part of a multi-stop tour that has taken her to wealthy enclaves across the country. In the 10 days to August 30, Mrs Clinton devoted seven full days to the endeavour, attending 20 separate events, some yielding seven-figure sums in two-hour windows.
In the final days of summer, Mrs Clinton is racing to raise the $1bn her advisers say she needs to defeat Donald Trump in November’s election, an amount comparable to what Mr Obama and Republican nominee Mitt Romney each raised in the 2012 contest.
Dennis Cheng, Mrs Clinton’s finance director, told campaign staff this month that they were halfway towards meeting their target, the Associated Press reported.
Building on the successful grass roots tactics used by primary rival Bernie Sanders, the Clinton campaign has stepped up its campaign to attract money from small donors, sending daily emails to supporters in recent days warning that the campaign was not “hitting [its] goals” in August.
The Clinton camp is keen to stress that the average donation size in July was just $44. But the whistle-stop tour of wealthy Martha’s Vineyard and the other big-name fundraisers underline how Mrs Clinton continues to rely heavily on establishment Democratic donors from the financial, technology and entertainment industries.
In California, she visited the home of Earvin “Magic” Johnson, the former basketball star, and his wife Cookie, before dropping in at the Hollywood mansion of celebrity couple Jessica Biel and Justin Timberlake, who at a 100-person event complete with a photo booth raised more than $3.3m.
Later, a select group of about 20 guests paid more than $200,000 each to dine with Mrs Clinton at the home of Laurene Powell Jobs, widow of Apple founder Steve Jobs. On Nantucket, they paid up to $27,000 to nibble on hors d'oeuvres at Innisfree, the estate owned by Elizabeth Bagley, the former US ambassador to Portugal.
By contrast Mr Trump has attended just a handful of fundraising events so far, despite raising $80m in July — only $10m less than Mrs Clinton.
You have to play by the rules and excel on every level. And one level is fundraising - Lynn Forester de Rothschild, E.L. Rothschild chief executive and prominent Clinton donor
Unlike Mrs Clinton’s, Mr Trump’s campaign has not given details of his fundraising schedule. It is known that he attended an event at the Cape Cod home of Bill Koch, the billionaire businessman. (Mr Koch’s better-known brothers Charles and David have declined to endorse the candidate.) While Mr Trump was set to hold a fundraiser in Rhode Island this week, that event was cancelled, the Providence Journal reported.
This lack of fundraisers has freed Mr Trump up to spend more time on the campaign trail, including recent appearances in Florida, Ohio and Mississippi. Mrs Clinton, by contrast, has hosted just one public campaign rally in the past two weeks.
Lynn Forester de Rothschild, chief executive of E.L. Rothschild and a prominent Clinton donor, said it was unfair to criticise Mrs Clinton for her use of high-end fundraisers, especially as the Democratic candidate was a vocal critic of the Supreme Court’s 2010 Citizens United ruling, which overturned campaign financing limits.
“She has to raise the money that is necessary in this environment, until Citizens United is repealed and there’s the comprehensive campaign finance reform that Hillary has promised. You have to play by the rules and excel on every level. And one level is fundraising,” Lady de Rothschild said.
Mr Trump, she claimed, would have adopted a similar tactic had he been more successful in wooing wealthy donors. “He doesn’t have the kind of supporters that she has. He would have fundraisers all day long if he could fill a room,” she added.
Matt Bennett, co-founder of Third Way, a Democratic think-tank, said Mrs Clinton was following a path well trodden by previous presidential nominees, both Democratic and Republican.
US election poll tracker Which White House candidate is leading in the polls?
“This [fundraising] is what you do in August. Voters aren’t paying attention. They're not watching television, they’re not going to rallies, they're not thinking about politics. And all your donors cluster in places that are easy to access, like The Hamptons,” Mr Bennett said.
The Hamptons is where Mrs Clinton has spent the past few days, attending six different fundraisers on Sunday and Monday, pulling in an estimated $14m. On Tuesday evening, she was due to appear at another Hamptons fundraiser, this one at the home of singer Jimmy Buffett, where VIP tickets, including premium seating and a private reception with the presidential candidate, cost $100,000 a piece. Jon Bon Jovi were scheduled to give a performance.
According to one former aid, this week could be the last chance for Mrs Clinton to meet en-masse with rich donors before the campaign really kicks off following September’s Labor Day holiday. “It is a lot harder to do that after Labor Day when [the candidates] actually have to go to real places,” he quipped.


Fundraising drive underlines Clinton’s reliance on wealthy backers

It was a typically lazy August day on the holiday island of Martha’s Vineyard. Children were playing by the ocean, families were dining by the waterfront, and President Barack Obama and his family were enjoying the penultimate day of their holiday


Ireland will on Tuesday be ordered to claw back billions of euros from Apple, triggering one of the world’s biggest tax disputes and a political showdown between Europe and the US.
Based on an obscure 1991 Irish tax ruling issued for Apple, then a struggling computer maker, the Brussels competition decision has the potential to transform how corporate tax avoidance is policed in Europe.
The order to recoup back-taxes is expected to potentially be big enough to ricochet into the US election campaign, overshadow Apple’s latest product launch next week, and set in train a landmark legal battle.
Ireland and Apple strongly deny any wrongdoing and see the decision as an egregious example of over-reach by the EU’s executive arm that will not stand up to scrutiny in court.
What is the dispute over?
At the heart of the matter are tax arrangements that helped Apple pay an ultra-low rate of just 4 per cent on nearly $200bn of foreign profits it has earned over the past 10 years.
Apple’s lightly-taxed foreign cash mountain is the biggest of any US multinational.
The $187bn it held outside the US in 2015 accounts for a big share of the $1.2tn that US multinationals have parked offshore, in the hope that US tax reform will eventually cut the cost of repatriating the profits.
So far, Apple’s foreign profits have been lightly taxed.
What is the commission’s complaint? Why was Apple’s Irish arm so important?
About 90 per cent of Apple’s foreign profits are earned by Irish subsidiaries, which are highly profitable because they hold rights to Apple’s intellectual property.
But these Irish entities paid little tax because they were not tax resident anywhere — a usual structure that exploited differences between the US and Irish definitions of residence.
The European Commission is targeting the arrangement on the grounds that it gave Apple an undue tax advantage that distorted competition. It alleges this amounted to illegal state aid, a breach of the EU’s unique restrictions on state support to companies.
While it builds on similar commission tax decisions recently served against deals for Starbucks in the Netherlands and Fiat in Luxembourg, the Apple case is by far the biggest and most significant.
What is Apple’s position on the investigation?
EU investigators have examined how Apple paid a tax rate of less than 1 per cent on European sales in some years. But the company insists it pays every cent of tax owed in every jurisdiction.
Tim Cook, Apple’s chief executive, told the Washington Post in the past month that the tax structure deployed in Ireland was applicable to all companies and that it was not unique to Apple. In other words, Apple gained no special treatment in Ireland and therefore enjoyed no selective state aid.
With some passion, he personally pressed the company’s case with Margrethe Vestager, EU competition commissioner, in January. He also says the company is the biggest taxpayer in the US. “And so we’re not a tax dodger. We pay our share and then some.”
How will Ireland respond?
Ireland’s position is that any arrangement which gave tax advantages to Apple that were not available to other companies would have been illegal in Irish law. The country’s corporate tax regime has proved controversial with France and Germany.
Still, the Dublin authorities have taken a succession of steps in recent years to unwind the most contentious elements of the regime. Such moves include the elimination of the “stateless” tax structure deployed by Apple to minimise its tax rate in Ireland. Like Apple, Ireland is set to appeal the ruling in the European courts.
Why is the US so irked by the case?
This is more than a struggle between Brussels, Apple and Ireland. At the root of political concern in Washington is anxiety that profits are held abroad by US companies. In theory at least, forcing Apple to pay back taxes to Ireland would reduce the pool of money that might ultimately be taxed in the US.
Last week the US Treasury accused the commission of behaving like a “supranational tax authority” that threatened international tax reform agreements through the inquiries. This was on top of a direct plea from Jack Lew, Treasury secretary, to Jean-Claude Juncker, commission president, to reconsider the investigation. Earlier this year the Senate finance committee urged Mr Lew to consider a double tax rate on European companies if Apple was ordered to pay back taxes to Dublin.
What are the wider implications?
Appeals against the ruling will take years to resolve. But ultimately if the commission prevails in court, the decision will reset the balance of power on tax policy in Europe.
While governments will still be able to set their own tax rates, the commission will have established itself as a watchful referee of how national rules are implemented.
And the example of Apple — and its multibillion-euro bill in back taxes — will be a warning to big global companies to put their affairs in order, at least in Europe.
Success on appeal for Apple and Ireland might relieve some of that pressure, and give national governments more leeway.
But until then it threatens to upset US-EU relations, potentially further hampering already difficult talks on a trade deal. And for the moment, the commission’s ruling will stand as a severe blow to exotic avoidance strategies.


Ireland will on Tuesday be ordered to claw back billions of euros from Apple, triggering one of the world’s biggest tax disputes and a political showdown between Europe and the US. Based on an obscure 1991 Irish tax ruling issued for Apple, then a