Lunch with the FT: Cory Doctorow

©James Ferguson

Cory Doctorow should be too busy for lunch. He’s co-editor of, and a prolific contributor to, one of the most influential blogs in the world, Boing Boing. Over the past decade the Canadian-born writer has published 16 books, mostly science fiction novels. He campaigns vigorously on the politics of the digital age. His speaking schedule for the two months following our lunch requires three return trips from his home in east London to North America. He has almost 300,000 followers on Twitter. He is an impeccably prompt email correspondent.

More remarkable to me than any of this is that he claims to prepare for himself, his wife and five-year-old daughter “a three-to-four-course, hot/cold tailor-made breakfast every morning, in 20 minutes flat, with handmade coffees”. And although I arrive at Hawksmoor 10 minutes early, he’s there already, sipping sparkling water at the bar and reading a book. He’s wearing thick-rimmed spectacles worthy of Eric Morecambe, a Disney “Haunted Mansion” T-shirt, and a jacket; he’s 41 but looks younger. Did I mention that I have a tiny crush on Cory Doctorow?

As we’re shown to our table at the window, I feel compelled to ask about the breakfasts. How does he do it? After reading about this quotidian feat of fatherhood, I had tried to make my wife a fancy breakfast in bed, with eggs and honey-drizzled yoghurt and other trimmings. It took long enough that well before I was finished she had surfaced to investigate what was going on. I ask Doctorow for tips, confessing that I can scarcely produce a gourmet breakfast for my family once a fortnight.

“That’s your problem,” he says, in a bright, brisk Toronto accent. “You don’t do it often enough. If you did it every day, you’d get very good at it. It would become a habit, and habits are free.” His own breakfasts are prepared the night before – porridge measured out, yoghurt and berries mixed, served and in the fridge, eggs in the saucepan ready to be boiled. It’s obsessive, precise, carefully optimised – and, it seems, highly effective.

The waiter arrives to discuss steak with us. Hawksmoor is a hipsterish steakhouse near Spitalfields market, all dark wood and brick. The menu is unconventional, with steaks priced by the gramme and particular weights of pre-cut steak chalked up on the board. Doctorow – who had sent me a list of places he’d be happy to eat – seems to be a regular, and quizzes the waiter about when the meat is delivered and why, when he comes in the evenings, certain cuts have already been crossed off. The waiter assures us that the meat is delivered fresh every day and never frozen, even though it’s harder to carve the steak in an unfrozen state.

“Unless you have a laser,” offers Doctorow, at which point the waiter, rather curiously, begins to discuss whether certain cuts cooked rare present a risk of food poisoning.

“We’re not really supposed to talk about food poisoning,” admits the waiter. “You’ve got to come up with another name for food poisoning,” suggests Doctorow. “Like, er, ‘exotic gut flora experience’.”

I explain to Doctorow that he can choose whatever he likes and the FT will pay, but the world gets to see the bill. “That’s a very funny little bit of behavioural economics,” he replies.

Some of the steaks are sized for two, and I indicate that I’m willing to share one. Doctorow selects a large porterhouse for us, and we’re persuaded for reasons of flavour rather than safety to go for medium rare rather than rare. Doctorow chooses bone marrow and onion to start, with creamed spinach to accompany the steak. I start with a Caesar salad, and order triple-cooked chips. I press him to order some wine and he reluctantly agrees to drink half a glass, but refuses to choose.

I express surprise that he claims to know nothing about wine although he is obsessive about, for example, coffee. “I specialise,” he explains, adding that he rarely drinks much. I choose two glasses of the cheapest red. It’s not bad, and he downs his swiftly.

. . .

Doctorow’s fiction champions technology, while warning of how easily it can be used by repressive states or corporations. His own life provides an example of how to live with freedom in a technological age – he’s a man with no particular title, no hierarchical authority, no corner office and no secretary, who somehow manages to keep the plates spinning. Is it the same relentless, nerdy optimisation that gets those breakfasts on the table? He quotes from Brian Eno’s collection of not-quite-aphorisms Oblique Strategies , “Be the first to not do what nobody has ever thought of not doing before.”

Boing Boing, a marvellously eclectic blog, is a case in point – it’s a stripped-down vision of a 21st-century media outlet. Founded in 1988 as a print magazine, it went digital in the mid-1990s, and became one of the first blogs to attract a mass audience. Doctorow started writing for it as a favour for the blog’s founder Mark Frauenfelder, who was going on holiday, and never stopped. It’s incorporated as a business and is funded by sponsors, advertising and merchandise. It has a wide reach and yet, by the standards of a newspaper, is produced by a tiny team, with four main writers, three of whom live in California.

“We are spectacularly lean,” says Doctorow. “We have one phone call a year if we need it. We have one meeting a year.” He’s saving on air fare by tacking this year’s editorial meeting – in Los Angeles – on to a pre-existing trip. It’s usually at the Magic Castle, a private club for magicians. This is a typical touch of whimsy; Doctorow is also seriously smitten by Disney theme parks (his first novel, Down and Out in the Magic Kingdom (2003), imagines what Walt Disney World might be in the 22nd century).

Is this “spectacularly lean” operation the future of newspaper publishing, I ask? “It’s a future of publishing. One of the things that newspapers obscured was that they weren’t a medium, they were a collection of media bodged together.” Newspapers are like books, he says, a format that encompasses “anything from actuarial tables to Mein Kampf”.

But I haven’t quite tired of the topic of getting things done. Doctorow says he’s published 16 books in the past decade. How?

“I figure out how much time I have to write a book. I figure out how many words I need to write. I convert that into a daily rate and I write that many words every day come hell or high water.” Before I can raise the question of quality, he goes on to explain that there’s very little correlation with what he thinks is good writing while he’s at the keyboard, and what later turns out to be good writing – and so he might as well just get the words down and sort it all out later. Lest that process sound like pure hackwork, Doctorow novels have won or been nominated for most of the science-fiction awards that count.

The “write it now and fix it later” approach sounds perfectly reasonable to me, but then Doctorow pushes it to an extreme. “For instance, I wrote Homeland [2013] while I was touring Germany to publicise Little Brother [2008]. I had a translator, we’d visit lots of schools, and so I’d be speaking English half the time and he’d be speaking German half the time, and I’d write the book while he was speaking German.”

I point out that he is describing a superpower. Didn’t people wonder what he was doing as he sat in front of an audience tapping away on his computer while his translator spoke?

“Yes, but that was fine. At the end of the talk someone would say,” – and Doctorow assumes a gentle German accent – “‘Herr Doctorow, what are you doing with your computer on the stage?’ and I’d explain that I was writing my next book. They’d love that.”

Science fiction is often a way of exploring issues of contemporary relevance, and Doctorow’s work is no exception. In For the Win (2010), a novel aimed at the “young adult” market, he describes a battle between internationally mobile capital and the attempts of the trade union movement to mobilise “virtual sweatshop” workers across international boundaries. The action moves between India, where anything goes in a deregulated environment, and China, where the state is powerful but allied with the corporations in suppressing workers’ rights. The book manages to explore some complex economics in the context of a well-paced thriller.

Doctorow is clearly fascinated by economic issues, and points out that most science fiction and fantasy economies make no logical sense. The exception, he declares, is when Marxists write science fiction or fantasy. Take the recent Hobbit movie, for example. “How can the goblins have a mine that’s so inefficient?” he laughs, as he pauses from ripping the soft flesh from the marrowbones on his plate with his bare hands.

The porterhouse steak arrives, pre-sliced. It’s very good, charred on the outside but soft and pink beneath the surface. Doctorow has asked for horseradish while I am dipping my steak and chips into béarnaise sauce. The conversation is animated enough to slow our progress, and neither of us raises an eyebrow when a waiter noisily drops something fragile on the other side of the dining room.

So, I ask, if only Marxists get economics right in their novels, does that make Doctorow a Marxist? There’s a tension there, somehow – he’s a successful player in the market economy and fluently speaks the language of business; of profit, marketing reach, margins, and price discrimination. But his political activism seems squarely on the left – pro-labour, pro-equality, pro-rights.

“Marxists and capitalists agree on one thing: they agree that the economy is important. Once we’ve agreed on that we’re arguing over the details,” he says. But no, he’s not a Marxist. “I always missed the explanation of how the state is supposed to wither away.” In his novels and his blogging, the ruthless abuse of state power is just as much of a theme as the grasping amorality of large corporations.

Before long we’re talking about automation, and whether the rise of robots and algorithms is a threat to middle-class jobs. Doctorow’s next book will explore that territory in a suitably dystopian form, and he is keen to pick my brains about how things might play out. We discuss possible scenarios and I recommend an essay by John Maynard Keynes, “Economic Possibilities for our Grandchildren”. (Within hours he’s found it, read it and tweeted a recommendation.)

. . .

We’ve been making sufficiently slow progress through the meal that both of us have room for dessert. In fact, Doctorow effectively orders two – a crumble with cornflake ice-cream on the side. I order peanut butter caramel shortbread. After we both ask for double espresso, he pulls out a small plastic bottle that once contained mineral water. It’s half-full of a pale brown liquid. “I nearly forgot. I brought you some cold brew coffee.” I sniff at the concoction, the product of Doctorow’s latest coffee experiments. It’s made by steeping coffee in cold water overnight, and it smells sweet. When I try it later, the taste is mild but the caffeine jolt is fierce.

As we wait for dessert, I ask him about his recent speeches at technology conferences discussing the “war on general purpose computing”. He runs through the argument with practised fluency. Computers are by nature general-purpose machines. It’s impossible to make a computer that does all the kinds of things we want computers to do yet is somehow disabled from making copies of copyrighted material, or viewing child pornography, or sending instructions to a 3D printer to produce a gun.

“Oh my God, that’s good,” says Doctorow after his first mouthful of crumble. My peanut butter shortbread is fantastic too, if absurdly calorific. We are interrupted only by another waiter dropping a tray of glasses.

He continues with the argument. The impossibility of making limited-purpose computers won’t stop governments or corporations trying to put on the locks, or changing laws to try to make those locks effective. But the only way these limits can possibly work is subterfuge: computers therefore tend to contain concealed software that spies on what their users are trying to do. Such software is inevitably open to abuse and has often been abused in the past.

Digital rights management systems intended to prevent copying have been hijacked by virus-writers. In one notorious case, the Federal Trade Commission acted against seven computer rental companies and the software company that supplied them, alleging that the rental companies could activate hidden software to grab passwords, bank account details and even switch on the webcam to take photos of what the FTC coyly calls “intimate activities at home”. As computers surround us – in our cars, our homes, our pacemakers – Doctorow is determined to make people realise what’s at stake.

We polish off our coffee and desserts, and the conversation rolls on, covering digital media strategy, the future of book publishing, and Rupert Murdoch’s chances of keeping control of News Corp. I ask him about the FT’s business model. He approves of the use of the standard web language HTML5 in the FT app, which makes it less dependent on Apple or any single tablet format. “That’s a good idea,” he says. Then again, he adds, “selling a product that is well-liked by people who are price-insensitive is never a bad thing.”

We’ve been in the restaurant for three hours and are the only customers left. The staff wipe the tables around us and patiently bring flasks of tap water without being prompted. Yet another glass breaks, somewhere on the edge of my vision. “It’s not a good day for gravity,” says Doctorow.

I feel embarrassed that I’m the one who has to call things to a halt, but I’m going to be late for my next appointment. We admire the size of the bill, shake hands, and Doctorow heads off to the pool for a long swim.

That evening, I send him an email. His response is immediate.

Tim Harford is an FT columnist

The Second Great Depression

Publisher Penguin Press HC, The

Year 2013

Pages 496 pp.

Price $29.95

The going got tough: A sign advertising bankruptcy in California, Sept 2012. (Lucy Nicholson / Courtesy Reuters)

After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead BY ALAN S. BLINDER. Penguin Press, 2013, 476 pp. $29.95.

Alan Blinder is only the most recent in a series of prominent economists who have produced analytic accounts of the U.S. economic downturn. His crisp narrative lays out the policy options that were available at each stage of the crisis, and his analysis is infused with a deep understanding of macroeconomics. Overall, it is the best general volume on the subject that has been published to date.

Despite its many virtues, however, the book paints an overly optimistic portrait of the state of the U.S. economy. “More than four years after Lehman Brothers went under,” Blinder writes, “policy makers are still nursing a frail economy back to health.” But the U.S. economy is worse than “frail,” and there are few signs that it is being nursed “back to health.” Most economists claim at least one silver lining in the economic downturn: that it was not as bad as the Great Depression. Up until recently, I agreed; I even took to calling the episode “the Lesser Depression.” I now suspect that I was wrong. Compare the ongoing crisis to the Great Depression, and there is hardly anything “lesser” about it. The European economy today stands in a worse position compared to 2007 than it did in 1935 compared to 1929, when the Great Depression began. And it looks as if the U.S. economy, when all is said and done, will have faced certainly one lost decade, and perhaps even two.

The U.S. economy has enjoyed a recovery only in the sense that conditions have not gotten worse. Blinder notes that the unemployment rate jumped to ten percent at the height of the crisis and is now hovering around eight percent, nearly halfway back to economic health. But this assessment is misleading. In the middle of the last decade, the percentage of American adults who were employed was roughly 63 percent. That figure dropped to about 59 percent in 2009. It remains there today. From the perspective of employment, the U.S. economy is not recovering but flatlining.

Look at the GDP figures: in the 12 years between the beginning of the Great Depression and the United States’ entry into World War II, the U.S. economy saw its production drop by an amount equal to 180 percent of the output of one average pre-crisis year. If one assumes, as the Congressional Budget Office does, that U.S. production will return to its pre-2008 form by 2017, the economy will have suffered a shortfall equivalent to only 60 percent of one average pre-crisis year. But it is unlikely that the economic downturn will be over by 2017: no war or major innovation appears to be looming on the horizon that could propel the country into an economic boom the way World War II did at the end of the Great Depression. If the downturn drags on into a second lost decade, the United States will incur further losses equal to the output of a full average pre-crisis year, bringing the total cost of the crisis to 160 percent of an average pre-crisis year and nearly equal to that of the Great Depression.

Of course, the present downturn has caused far less human misery than the Great Depression did. But that is because of political factors, not economic ones. The great network of social insurance programs established by President Franklin Roosevelt’s New Deal, President Harry Truman’s Fair Deal, President John F. Kennedy’s New Frontier, and President Lyndon Johnson’s Great Society, and defended by President Bill Clinton, sharply limits the amount of poverty a downturn can cause.

And what of the future? Only ambitious political action of the kind that created those programs can insure the country against suffering an equal economic calamity down the line. Yet the U.S. political system is dysfunctional. Congress will not support the kind of financial regulation the country sorely needs. Blinder concludes his narrative with a number of smart forward-looking recommendations, but his book’s biggest weakness is its lack of a road map out of the present impasse that takes into account the political climate. Without a more dramatic set of actions, the United States is likely to suffer another major economic crisis in the years ahead.

SICK PATIENT, BAD DOCTORS

Some will argue that I am assuming the pose of Dr. Gloom. They are likely to be wrong. For one, the U.S. bond market agrees with my assessment. Since 1975, the yield on 30-year Treasury bonds has averaged 2.2 percentage points higher than that of short-term Treasury bills. Given that the current 30-year Treasury bond yields 3.2 percent per year, the typical financial market participant anticipates that short-term Treasury bill rates will pay out interest at an average of barely more than one percent per year over the next generation. The Federal Reserve keeps the short-term Treasury bill rate at that low level only when the economy is depressed -- when capacity is slack, labor is idle, and the principal risk is deflation rather than inflation. Since World War II, whenever the yield on the short-term Treasury bill has been two percent or lower, the U.S. unemployment rate has averaged eight percent. That is the future the bond market crystal ball sees: a sluggish and depressed economy for perhaps the entire next generation.

Meanwhile, barring a wholesale revolution in the thinking (or personnel) of the U.S. Federal Reserve and the U.S. Congress, so-called activist policies, such as multitrillion-dollar asset purchases or sustained large-scale investments in infrastructure, are not going to be put in place to rescue the economy. Policymakers are too concerned about rising U.S. government debt. Their worries, of course, are misplaced right now, as Blinder well understands. He shares the consensus of reality-based economists that debt accumulation -- whether through the Federal Reserve’s buying government bonds or through the U.S. Treasury’s issuing them -- is not the U.S. economy’s most serious problem as long as interest rates remain low.

The deficit hawks seem to have forgotten the basic principle of macroeconomic management: that the government’s job is to ensure that there are sufficient quantities of liquid assets, safe assets, and financial savings vehicles. Over the past several years, this principle has gone out the window. A majority of the voting members of the Federal Open Market Committee, which oversees the Federal Reserve’s buying and selling of government bonds, believe that the Fed has already extended its aggressive expansionary policies beyond the bounds of prudence. Blinder rightly disagrees: “The Fed’s hawks seem more worried about the inflation we might get than about the high unemployment we still have. I’m rooting for the doves.”

Worse still is the attitude of the U.S. Congress. “America’s budget mess is starting to look Kafkaesque,” Blinder writes, “because the outline of a solution is so clear: we need modest fiscal stimulus today coupled with massive deficit reduction for the future.” Republicans must accept that tax rates will be higher a decade from now, he argues, and Democrats must accept lower government spending than is currently projected. A deficit-reduction package, perhaps in the mold of the Simpson-Bowles plan (a proposal by Erskine Bowles and Alan Simpson, co-chairs of the president’s deficit commission, that combines spending cuts and tax increases), should be adopted in the future, Blinder argues, but not yet. Blinder is preaching the right message, but he is preaching it to an audience of ravens and vultures. Congress is taking its cues from Steve Martin’s Saturday Night Live character Theodoric of York, Medieval Barber: no matter what the ailment, all the patient needs is another good bleeding. In this case, the tool of bloodletting is rigorous austerity, which only puts further downward pressure on employment and production.

A BROKEN SYSTEM

As U.S. policymakers cling stubbornly to wrong-headed policies, what can economists do? In such an environment, they can no longer realistically expect to push policy toward an appropriate posture. So what else should occupy economists’ time? At the juncture in the Great Depression most similar to today’s point in the current crisis, John Maynard Keynes turned away from policy to attempt to reconstruct macroeconomic thought from the ground up. By writing The General Theory, Keynes intended to force economists to think differently when the next crisis struck. Up until 2009, it looked like Keynes had succeeded. But today, it is clear that his task was only half finished, if that. The same ritual incantations that were made during the 1930s -- summoning the “confidence fairy,” through the magic of austerity, to shower the blessings of prosperity on the economy -- are now recited repeatedly and ever more frantically. This is worrisome, to say the least.

Speaking at the London School of Economics in March, the economist Lawrence Summers called for the reconstruction of macroeconomic thought, on the one hand, and the reconstruction of the institutions and orientation of central banking, on the other. But no living economist is smart, bold, or arrogant enough to try to be Keynes, and Blinder wisely takes a more modest approach. He frames his recommendations for reform in ten commandments: three that are addressed to the government and seven that are addressed to financiers. The first set urges policymakers to remember that the cycle of profit, speculation, exuberance, crash, bankruptcy, panic, and depression has been a constant feature of industrial market economies since at least 1825; that self-regulation by financiers is a disaster; and that financiers should have very strong incentives not to walk up to the edge of defrauding the public. The second set of commandments exhorts financiers to remember that their shareholders are their real bosses, that managing and limiting risk are essential, that excessive borrowing is dangerous, that complex financial instruments are equally dangerous, that trading should be carried out using standardized securities in public markets, that the balance sheet is a picture of a firm’s position and not a toy, and, finally, that perverse compensation systems must be fixed.

It is clear that the U.S. government ought to obey Blinder’s first three commandments and strictly regulate finance. It should hold Wall Street liable for its past misrepresentations and omissions to encourage better behavior in the future. But Blinder does not emphasize enough just how difficult that task has proved to be and how little political will exists to face it. Some economists assume that this job will be easier for future generations because even people who are currently in their 20s will never forget the orgies of fraud that were committed in the housing, mortgage, securities, and derivatives markets. Others, meanwhile, think that the political will to rein in financial excess will only continue to wane. According to this camp, Wall Street finds it easy to buy influence on Capitol Hill. Although financial firms have a collective long-term interest in being regulated, financiers are too stupid to recognize this -- or they simply expect to make their pile and then say, “Après moi, le déluge.” If this argument is indeed correct, the United States is in awful trouble.

Sound regulation of Wall Street will depend on a different, less money-dominated form of politics -- like the kind that was generated by the more egalitarian income distribution of the post–World War II years. But how to get to such an income distribution today? After World War II, the United States made a successful commitment to mass education, which sharply increased the number of those competing for high-salary jobs and thus reduced their income edge over the working class. Such a renewed commitment to education, coupled with a severe strengthening of the progressivity of the U.S. tax system, could create the type of politics and Capitol Hill that would support the kind of financial regulation that 2008–9 revealed was desperately needed.

Blinder’s next seven commandments, addressed to financiers, are less useful than the first three. Blinder is right to identify perverse compensation systems as a major problem. They give financiers incentives to take large risks in the belief that they can make a killing and then get out before the crash. The truth is that there are three ways to make money in finance, and only one of them is simple. The first is to possess better information than other market participants and use that information to buy low and sell high: this is nearly impossible to do on a regular basis. The second is to match necessary risks with investors for whom it makes sense to bear extra risk: this is very difficult. The third, and simplest, is to match necessary risks with investors who do not understand what those risks really are. This is especially easy when information in the financial markets is scant -- when securities are complex, when trading is proprietary and secret, and when balance sheets do not accurately represent firms’ performance.

As long as perverse compensation systems for financial executives exist, the United States’ financial problems will remain nearly, if not completely, intractable. Reforming such systems would fix many, if not all, of these problems. In an ideal world, financial professionals would earn amounts similar to other professionals -- such as doctors, lawyers, architects, and engineers -- until near retirement, at which point they would be amply rewarded if their judgment had been superb and their clients had received good value. In a past generation, this was accomplished via their late-career ascension to lucrative partnerships at private investment banks. Today, shareholders of financial corporations could impose such a compensation system if they so wished. But they are not organ­ized, and they do not so wish. Financiers, therefore, have no pocketbook reasons to obey any of Blinder’s commandments, only their regard for the public interest.

Mindful that his prescriptions might not take hold and that another calamity could well befall the economy, Blinder concludes his book by suggesting how policymakers ought to act during the next crisis: they must focus on heading off risks before they materialize, communicate their policies clearly, make sure to distribute the pain fairly, and never promise that there will be less pain than there will be. (It is difficult to imagine a bigger disaster for the public’s understanding and the Obama administration’s credibility than then Treasury Secretary Timothy Geithner’s August 2010 New York Times op-ed, “Welcome to the Recovery” -- save, perhaps, for President Barack Obama’s premature sighting of “glimmers of hope.”)

Policymakers must impose distributions of pain that not only are fair but also are seen to be fair. Bank executives and directors who fail to properly oversee their firms’ investments should lose their jobs, their stock options, and their past years’ bonuses -- and if shareholders will not impose such penalties, the government needs to do so. Shareholders who voted for such executives and directors should lose their equity. And the president needs to speak to the people, explaining the crisis and the government’s response, over and over again, in language the average voter can grasp.

WHAT IS TO BE DONE?

Despite the U.S. economy’s feeble recovery, it is difficult to evaluate the Obama administration’s handling of the fallout from the financial crisis. On the one hand, the president and his team made enormous errors -- believing that the recovery would take hold rapidly, that banker opposition to financial reform could be neutralized and overridden, and that the housing sector needed neither reorganization nor large-scale foreclosure relief, to list just three. On the other hand, it is important to remember that reacting to a crisis is a lot harder than it looks. Moreover, as economists in the Obama administration are quick to point out, Congress has placed extraordinary obstacles in Obama’s path. It is also worth nothing that even though the crisis originated in the United States, Europe is suffering more. In other words, it could have been much worse, as it is right now across the Atlantic. Still, it is undeniable that Obama’s management of the crisis has not produced a real recovery, that institutional rebuilding has stalled, and that the proper lessons of the financial crisis have not penetrated the United States’ money-dominated politics.

But this does not mean that policymakers and economists can give up. In the short run, little can be done except to take down the names of those policymakers and economists who have been predicting inflation and national bankruptcy from monetary and fiscal stimulus and growth from austerity -- and remind voters and journalists of who was right and who was wrong. In the medium term, policies will shift. By 1935, six years after the outbreak of the Great Depression, all the major economies had adopted programs along the lines of the New Deal, except for France, whose continued attachment to the gold standard served as a horrible warning. Should its coalition government survive and double down on its austerity policies, the United Kingdom may serve a similar role as a warning against prioritizing spending cuts over economic recovery when demand is missing -- a warning of the consequences of, as the British Depression-era economist Sir Ralph Hawtrey put it, “cry[ing], Fire, Fire, in Noah’s Flood.” The political moment to prioritize recovery and full employment may yet come, if those who understand can recognize and seize it.

In the long run, however, the task remains to educate shareholders that it is unwise to provide the traders and managers who supposedly work for them with fortunes based on short-term accounting, and to educate politicians that such compensation systems create risks too large to be acceptable. It ought to be possible to carry out that task. Someday. Maybe.

A Long Rivalry Resumes, Over Sips and Crackers

LONDON — Both teams had filled their rosters with only the most devoted competitors, training for months for this contest, doubtless the most prestigious of its kind in England and perhaps the world. They arrived early on the morning of the match, tense and unsmiling and prepared to compete.

The first round was hard-fought, a grueling 40 minutes from which both sides emerged a bit dazed; the second round proved more trying still. In the end, despite a valiant push from the younger, upstart squad, the match perhaps came down to experience, a turning point that came 20 minutes before the final bell for which no amount of training can prepare a competitor.

“Tannin buildup,” said a knowing David Soud, who last week helped Oxford narrowly defeat its archrival, Cambridge, in the 60th edition of what was in all likelihood the world’s first wine-tasting contest.

The Oxford and Cambridge Varsity Blind Wine-Tasting Competition, wherein participants must identify 12 unmarked wines by grape, country of origin, region, subregion, vintage and taste characteristics, seems a testament to man’s will to compete over just about anything. Or perhaps it is a measure of the attraction to the esoteric and bizarre that seems to reside somewhere deep within the English spirit. Or perhaps, some competitors suggested, wine-tasting ability is simply one more realm in which Oxford and Cambridge can play out their long and much mythologized rivalry.

Whatever the case, the gustatory capacities of the competitors are remarkable, to say nothing of their knowledge of winemaking practices and trends.

“It’s very serious, there’s no doubt about that,” said Jancis Robinson, the wine journalist and critic who served as one of two judges at this year’s contest. “You train like an athlete.”

Certainly, the competitors seemed all business when they gathered last Thursday at the Oxford and Cambridge Club, a grand edifice just a few steps from Buckingham Palace.

They were eight men and six women, among them a handful of Britons but also Chinese, Americans, a Pole, a Dutchman and a citizen of Brunei, among others. There was a physicist, a biochemist and an archaeologist, but also a creative writer and an expert on modernist poetry.

They sat around a table in a basement room, unspeaking, beneath a dour portrait of King Edward VII. On the table were 84 fine-stem crystal glasses — six for each competitor in each 40-minute round, with one round for whites and a second for reds — 14 water glasses, nine black spittoons and four plates of water crackers, to neutralize the palate.

The competitors twirled and sniffed and inspected, some holding their noses while sipping, others warming their glasses between their thighs, all of them scratching notes on their tasting sheets.

Tasting cannot fairly be called a spectator sport, but there were plenty of curious sounds, a dissonant chorus of slurping and sluicing and spitting, marked by the occasional chime of crystal on crystal and the creaking of wooden floorboards beneath a plush carpet. One Cambridge competitor, aerating her wines in her mouth, produced a sound akin to the pressurized rush of an airplane vacuum toilet.

“I’ve been mocked a couple of times,” said the woman, Vaiva Imbrasaite, 23, a Lithuanian doctoral student in computer science. (It can, however, be a useful party trick, Ms. Imbrasaite said.)

Most competitors concluded that the reds, which were on average significantly older than the whites, were more difficult. As they age, even very different reds tend to converge in flavor, said Mr. Soud of Oxford, the poetry expert. The senior competitor at 46, he said it was the taste or smell of American — not French — oak that allowed him to identify, with near exactitude, a 1953 Vega Sicilia.

According to the 15-page crib sheet that Oxford competitors are meant to memorize, an accurate description of that wine might have noted aromas of “coconut” — from the oak — and “tobacco leaf,” as well as a “horse manure character.” It also would have indicated that the wine was made largely from tempranillo grapes, in the Ribero del Duero region of Spain, and was a “gran reserva,” the top classification.

(Organizers said that, in commemoration of the contest’s 60th anniversary, the wines were older and more expensive than usual; a bottle of the Vega Sicilia goes for about $1,000, give or take a few hundred.)

The white wines were tricky, competitors said, in particular No. 5 — a “bear,” said Mr. Soud, an American — which was revealed to be a 2010 Condrieu from the northern Rhone valley. “If you misread astringency as acidity, you get it wrong,” Mr. Soud said, seeming to think this constituted a coherent explanation. An ideal description of that wine, according to the Oxford guide, might have noted the aromas of “peach, apricot, quince, musk” and “blossom.”

The contest was not always so scientific. The inaugural match, in 1953, involved wines from a single merchant, which published a full list of the bottles it stocked.

“Basically, they mugged up on the list,” said Jennifer Segal, who has edited a history of the competition for its 60th anniversary, titled “Reds, Whites and Varsity Blues.”

Oxford won that first match, and maintains a slight lead over all. In the years after it started, the contest was the province of the well heeled and finely bred, a “semi-aristocratic boys club” much like the schools themselves, Ms. Segal said. The wine selections were accordingly pricey and conservative, largely Bordeaux.

Women and foreigners arrived on the teams in the 1970s, Ms. Segal said, and the French Champagne house Pol Roger began sponsoring the match in 1992, introducing wines from around the world.

The Varsity match appears to have been the world’s only official collegiate oenological competition until the turn of the century, organizers said. Since then, a handful of teams and contests have cropped up across the globe, including some that have challenged the Oxford and Cambridge teams, which usually win. “They don’t kid around,” said Raphaël de Valence, 20, who leads the tasting team at the Université Paris-Dauphine, in France.

This year, Oxford began training in October with at least three tasting sessions a week, said Ren Lim, 27, a Bruneian doctoral student in biophysics and the team captain. He employed a training schedule meant to boost confidence, with a difficult tasting about a week before the match, followed by several much easier sessions.

“You have to do it,” Mr. Lim said of the psychological engineering, though he was at a bit of a loss to explain his interest in competing.

“It’s just this Oxford-Cambridge thing, I suppose,” Mr. Lim offered, though he added cheerily, “There are perks, too.” Last week, these included a bottle of Pol Roger Brut Vintage 2002 champagne for each member of the winning Oxford team; Cambridge competitors received bottles of Pol Roger Brut Reserve, which can hardly be deemed a punishment. Everyone was poured a steady flow of complimentary Champagne at what proved to be a boozy midday awards ceremony.

Earlier, after the contest had ended slightly before noon, the competitors went to a nearby pub for celebratory beers. Mr. Lim had two pints, the second of which he drained in an impressively extended gulp. He offered no tasting notes, but emerged smiling.