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FT: The boffins in the boardroom

The boffins in the boardroom

By Jon Boone

Published: August 30 2006 18:03 | Last updated: August 30 2006 18:03

When Hagan Bayley, a professor of chemical biology, returned to Oxford from the US in 2003, he had no particular interest in starting a business. He always knew that his research into protein pores, tiny naturally occurring holes that can be used to identify molecules that pass through them, could have commercial applications. But he was interested in pure research, not in marketing and balance sheets.

“I came to Oxford to do research, not set up companies. I am a scientist and my skills lie in the laboratory, not the boardroom,” he says.

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Nonetheless, today he is the founder and a director of Oxford Nanolabs, a nanobiotechnology diagnostic company that is developing small hand-held devices based on his discoveries, which he hopes will be able to diagnose a range of diseases cheaply and instantly.

The growing presence on campuses of companies offering financial and managerial assistance to academics with good ideas is helping to transform universities’ approach to technology transfer. Ten of the UK’s leading re­search institutions have struck deals with a handful of companies that take an equity share in any company or licensing deal in return for their support.

The model is unique to Britain and has produced a flow of spinouts and stockmarket listings for companies that began in state-funded university laboratories. Yet it is not without its critics, who argue that institutions are not getting a good deal.

Prof Bayley is not one of them. “I decided 10 per cent of my time was as much as I was willing to give the company but having Isis, the IP Group and Spike made everything very easy.”

Isis Innovation is the name of the university department that helps academics protect and manage their intellectual property (IP), the IP Group is a private company that helps to organise early stage finance for spinout companies and licensing deals, and Spike Willcocks is a former chemistry student at Oxford who graduated in 2001 and opted for a life in the City of London.

Now he is business development director of Nanolabs and leads a group of technicians in rented lab space just over the road from Prof Bayley’s laboratory. His team is working to overcome the challenges of turning Prof Bayley’s pure research into a usable device that could interest environmental and security groups as well as medical companies.

The IP Group is not just partly responsible for Prof Bayley having his own company; it also helped build the gleaming new laboratory that he works in. The Chemistry Research Laboratory, opened by the Queen in 2004, contrasts starkly with the “dreadful Victorian conditions” some of Oxford’s scientists still work in and Prof Bayley says it was one of the factors that tempted him to return. The IP Group, which started life as an arm of investment bank Beeson Gregory and was until quite recently called IP2IPO, forged a ground-breaking deal with Oxford’s chemistry lab in 2000. In exchange for £20m ($38m), the bank got a 50 per cent stake of the university’s share in any company spun out by the lab for the following 15 years.

The deal was regarded as exotic at the time, but now the IP Group has struck similar deals giving them exclusive access to IP at seven other institutions and has a pipeline of licensing deals and spinout companies.

Oxford observers say the mingling of business and academia has helped change the culture of a university that has not always been at ease with commerce. Dons increasingly see setting up companies as a normal part of academic life and some “serial entrepreneurs” have begun to emerge.

But are such deals the answer to the problem of top-notch British discoveries and research lying unused on library shelves? For too long, critics have argued, UK universities have not been entrepreneurial enough.

As a 2003 report into university and business links by Richard Lambert, former editor of the Financial Times, pointed out, the UK’s citation rate in academic papers is 53 per cent higher per capita than Germany’s; yet that country makes 230 per cent more patent applications per capita than the UK.

Is the IP Group’s strategy – which is unheard of in the rest of the world – an answer to another problem that is often blamed for hindering technology commercialisation in the UK: investors’ apparent wariness of funding spinouts?

Whereas high net-worth individuals flock to US campuses, falling over each other to invest in risky start-ups, the “angel investor” scene in the UK is a lot less vibrant. Gordon Brown, the UK chancellor of the exchequer, has tried to redress this by pumping money into basic research, and earmarking “third stream” funding to help universities set up technology transfer offices that can protect and manage intellectual property.

The IP Group has also been paid the ultimate compliment of being copied by other companies that are scrambling to sign up the research universities that still have IP up for grabs.

But not everyone is impressed. One stalwart of the UK technology transfer scene, who did not want to be named, said universities were allowing themselves to be “ripped off” by signing away years’ worth of IP for relatively small amounts.

Certainly, the IP Group does not offer £20m in upfront cash these days. In 2005 it gained the right of first refusal to invest in IP created at the University of Bristol for the next 25 years in return for an initial investment of £5m. The cash does not go to the university but into the spinout companies, in which the IP Group gains an equity stake.

Imperial College London, one of Europe’s leading research universities, has rejected the IP Group model, arguing that it dilutes the university’s stake in its own IP. Imperial Innovations, the company handling the university’s technology transfer activities, has used a private placement and an initial public offering to raise £36m to invest in spinouts and technology. The university holds an equity stake in Imperial Innovations worth around £100m.

Geoffrey Thompson, chief executive of Braveheart Ventures, a company that has framework deals with five Scottish universities, be­lieves Imperial’s move will kybosh further deals which leave universities with a tiny equity share.

“What they have done at Imperial is very, very clever. They have realised that they can get a lot more bang for their buck by aggregating their IP into a commercial vehicle. By not going down the IP Group route they will have a bigger share of a bigger pot.”

Mr Thompson estimates that there are around 20 UK universities that could opt for the Imperial model if they wanted. But even that would not please some academics. Ross Anderson, a professor at the Cambridge computer science department and a serial entrepreneur himself, is scathing about the usefulness of “university bureaucrats” and outside companies.

“A third of my colleagues in the department have become entrepreneurs and a whole lot of them have made money and now live in big houses in the country. That’s because the average faculty member has significantly more business acumen than these financiers.

“My advice to academics if they get approached by some City spiv is to say, ‘Son, there’s the door.’ ”

Angle exports IP deals to US

Is a British approach to commercialising academic ideas about to be exported to the rest of the world?

Traditionally, the UK higher education sector has looked outwards, mostly to the US, for tips on how to turn high-tech research into lucrative enterprises.

But one technology commercialisation company with links on both sides of the Atlantic says it is keen to bring to the US the trend of universities selling intellectual property rights to an independently owned third party in return for guaranteed funding for spinout companies.

Angle, a company that has done one-off deals with research institutions in both the US and the UK, struck its first such deal with Reading University, in the south of England.

For the next 20 years it will be able to take a 60 per cent equity stake in spinouts it chooses to invest in, and 15 per cent from those that it does not invest in.

Andrew Newland, Angle chief executive, said the deal was partly “defensive” as other companies in the UK are circling British universities. But he also revealed that he is negotiating similar arrangements with some US universities that get overlooked by venture capitalists.

“They are not places like MIT or Harvard that do lots of technology transfer and lots of deals, but those that are slightly off the beaten track of California and the east coast.”

A formula for commercial success

• Colin Besant is an academic entrepreneur who likes to get his hands dirty with company affairs. An earlier career in industry left the professor at Imperial College London with a taste for business. He also finds it “wonderfully exciting and rewarding”, which compensates for the fact that he has not, he claims, made “huge sums yet”.

The science underlying his company, Turbo Power Systems, emerged from his work leading a multi-disciplinary team of mechanical engineers at Imperial. It led to the development of a compact electricity generator with applications ranging from micro-generation for houses to air-conditioning for London Underground trains, one of the company’s current projects.

After a long career in business and academia he is excited that British universities are taking the commercialisation of technology seriously: “When research projects used to come to an end, the team would just split up and all the IP would just be left to rot.”

• Oxford Asymmetry, the company founded by Stephen Davies, was sold for £316m ($602m) in 2000. An Oxford University lifer, he stayed on after his undergraduate studies to become professor of chemistry in 1996.

He set up the company as the sole investor without any help from the university, describing Isis Innovation, Oxford’s technology transfer company, as “not attractive to me” in the 1980s.

The company created a library of new chemical compounds to be used for drug discovery testing. It grew over time, reinvesting the cash it generated.

Prof Davies has drawn heavily on his mantra – “my businesses don’t burn cash” – when setting up his next business, Vastox, a drug discovery platform that is similar to Oxford Asymmetry but exploits research in genetics as well as chemistry.

Vastox does not use any intellectual property developed within the university but he is happy for Oxford to take 10 per cent of the equity.

• David Haddleton’s research group at Warwick University works on novel ways to synthesise polymers.

His research laid the foundations for the setting up in October 2001 of Warwick Effects Polymers, which after attracting outside investment moved to a purpose-built facility on the University’s science park.

Its portfolio of patents cover a broad range of catalysts for use in creating polymers. The company says these could have applications in the healthcare, pharmaceutical, personal care and microelectronics sectors.

It is looking to license its technology around the world, as well as doing contract research.

• Lifestyle Choices was created just last year using the know-how of Bill Ledger, professor of obstetrics and gynaecology at the University of Sheffield.

The company offers a range of products in the female fertility and menopause market, and in January it launched its first product. Called Plan Ahead, it gives a predictive assessment of the number of eggs in a woman’s ovaries.

To get his venture off the ground, Prof Ledger worked with Biofusion, an Aim-listed company that has an exclusive 10-year agreement with the University of Sheffield to commercialise its medical intellectual property.

Copyright The Financial Times Limited 2006

FT: The problem with Masters of the Universe

The problem with Masters of the Universe

Published: August 30 2006 03:00 | Last updated: August 30 2006 03:00

If it is tough at the top, then it is hardly surprising that the top jobs are invariably filled by determined, dominating people - the alpha males who are the subject of this new book. Its authors, Kate Ludeman and Eddie Erlandson, are a husband-and-wife executive coaching team, who have worked with more than1,500 chief executives and senior executives, including Michael Dell and Kevin Rollins at Dell, and Ebay's Meg Whitman.

As good coaches, the authors avoid being unfairly judgmental about their subject. They recognise the alpha male's strengths as well as his weaknesses, and argue that the world needs its alpha leaders right now.

But when those strengths turn into liabilities "alpha male syndrome" has struck: "The stronger the positive qualities, the more likely they are to erupt as negatives." Alpha males display extreme confidence. They "want excellence, they want it now, and they're sure they know how to get it", the authors explain. But, they add, this self-assurance can go too far.

"A great deal of wreckage is caused by boys behaving badly. The healthy ones - well-balanced human beings in full command of their alpha strengths - are natural leaders who are trusted by colleagues, respected by competitors, revered by employees and loved by Wall Street. But other alpha males are risks to their organisations - and sometimes to themselves."

The authors should know what they are talking about; they are self-declared alphas. Ludeman is a coach with a doctorate in psychology, Erlandson a surgeon turned health guru. One high-tech entrepreneur told them, after he had lost his investors $20m: "Looking back on it, I wasn't always right, but I was never in doubt." That is an alpha male talking. But what about alpha females? Do they not get to the top as well?

"Alpha women want to lead, but they don't necessarily need to rule," the authors say. They are not as belligerent or as aggressive as their male equivalents. For this reason the authors have chosen to focus on the real problem cases: the men.

How can you tell when alpha male syndrome is afflicting your business? Consider how meetings are run, they suggest. Are they like a particularly unpleasant episode of the competitive television programme The Apprentice? If so, they can become "theatres for the Alpha Male Show". Often there will be a gap between how an alpha male leader thinks the meeting has gone and the reality.

To complicate the matter further, we need to understand that there are four types of alpha male leader, say the authors: the commander, the visionary, the strategist and the executor.

Commanders are dominant high achievers, de­manding the best from themselves and others. But they may also create fear, suppress disagreements and stifle open communication.

Visionaries are passionate enthusiasts, resilient and indefatigable. However, they can lose sight of the needs of today, dazzled by their own vision of tomorrow.

Strategists are strong decision-makers. They are innovators, finding opportunities buried in piles of data. But they can seem remote and dispassionate, and unable to engage with arguments that are not based on hard facts.

Executors are brilliant deliverers of results. They are strong on detail and superb problem-solvers. But they may prove to be excessively demanding micro­managers, often disappointed with others' efforts.

Alpha males may end up playing several roles, or "personas" (from the Latin for mask). But with help, harmful personas can be abandoned in favour of the authentic self. "If you and you alone change, other people will also change," the authors say.

Alpha males are bad for everyone's health. The old tycoon's joke: "I don't get ulcers - I give them", is just wrong. In fact, alpha males are often adrenalin addicts.

"Those adrenalised bodies in business suits are all dressed up with nowhere to go," Ludeman and Erlandson say. "Alpha adrenalin junkies not only make themselves sick, they create a toxic environment for everyone else. That's why organisations dominated by dysfunctional alpha males are likely to have a higher incidence of illness, absenteeism, burnout, turnover and early retirement than businesses run by healthy alphas and non-alphas."

Ludeman and Erlandson know their subject well. Alpha males "think they're delivering a wake-up call when in fact they are hurling verbal grenades". You might admire them but do you want to work with them? And if you are one, how might you moderate your behaviour? Unsurprisingly, for a couple with a coaching business, they feel that coaching is the answer.

You can even complete an online self-assessment questionnaire (soon to be available at www.AlphaMaleSyndrome.com). Of course, this may lead to further verbal jousting along predictable lines: "My alpha male syndrome is bigger than yours."

Copyright The Financial Times Limited 2006

FT: The guardian of BASF’s secret formula

"Mr Hambrecht was confident BASF could shoulder the financial and operational burden of integrating three companies at the same time... reflect a quaint pride in the strength of BASF’s organisation. There is a “way of doing things” – detailed planning, rigorous practice, careful execution – that suffuses the 141-year-old group.

The preparations for meeting Mr Hambrecht, who took the reins in May 2003, speak volumes about BASF’s culture. Two months in advance, a date is booked. With a month to go, a spokesman is pressing for decisions on the interview’s structure. Days later, he is asking for the interviewer’s curriculum vitae.

The source of this detailed competence becomes clear when you step outside the head office building. Northwards and eastwards towards the Rhine, mile after mile of factories – 250 in total – turn oil and gas into a long list of their chemical derivatives...BASF’s name for its vast, interconnected production complex (for which there is no adequate English translation) is the Verbund. It has built similar sites elsewhere, but none as big. Successive generations of managers have seen mastery of the network as the key to the company’s success...A chemical reaction produces a predictable series of products and by-products. BASF has therefore constructed the Verbund to squeeze every ounce of value out of those reactions. Instead of shipping everything to the next user, it looks for new ways of reusing and recombining them.

This has spawned a vast cascade of products from oil-based ethylene to food additives, and miles of pipes that bring chemicals from different parts of the site. The resulting savings in transport costs mean that BASF’s production costs are up to one-fifth less than those of its rivals – even in high- cost Germany. Protecting this advantage is Mr Hambrecht’s overarching aim.

Despite the emphasis on tradition and continuity, BASF does change, he insists...For example, the Verbund used to buy the oil and gas that are the raw materials for its products, which have included cassette tapes and drugs. In the 1960s, though, it moved into energy trading, as a way of insulating it from the ups and downs of raw material and chemical prices...Thirty years later, Mr Hambrecht’s predecessor Jürgen Strube sold off tapes and pills. But he expanded into crop protection, a “downstream” business less volatile than core chemicals, and started selling gas in a German joint venture with Russia’s Gazprom...With the purchase of Engelhard’s catalysts and Degussa’s construction chemicals business, Mr Hambrecht again extended BASF’s reach towards markets blessed by steadily rising consumer demand and predictable prices.

...As economic crisis swept Asia, Mr Hambrecht, then BASF’s regional head, stuck with the tough and often confusing talks. “We planned years ahead. We didn’t let the crisis chase us out of the country. Other companies weren’t as steadfast...."The Chinese saw that we were prepared to stand firm with the partnership we were seeking. We gained their confidence,” he says. “In the same way, many companies came to question their plans to enter Russia. We never did that.”

It is one of the rare times that Mr Hambrecht uses the first person. “You can’t really associate anything BASF has done in the past three years solely with my person,” ....It is as convincing a demonstration as any of the power of “the BASF way” to subsume even the man at the top of the company.

===

The guardian of BASF’s secret formula

By Gerrit Wiesmann in Ludwigshafen

Published: August 27 2006 17:30 | Last updated: August 27 2006 17:30

Jürgen Hambrecht has spent as much money buying companies in the past six months as he and his predecessor at the helm of the world’s biggest chemical group have in the six preceding years.

In doing so, Mr Hambrecht has increased sales of Germany’s BASF from about €42bn to more than €50bn ($64bn) and made it a world player in the fast-growing markets for catalytic converters for cars and chemicals used in construction.

Yet he is remarkably keen to play down the move, as he sips from a cup of jasmine tea in BASF’s head office in Ludwigshafen. “I couldn’t have told you 18 months ago that those deals would happen. But we were looking at those sectors,” he says matter-of-factly.

He claims it is as much by accident as by design that the group has spent €7bn in the space of a few months.

Last year, just as it was preparing a €4bn bid for Engelhard, a US catalyst manufacturer, and making a €400m offer for US plastics maker Johnson Polymer, Germany’s Degussa put its building chemicals up for sale at €2.2bn.

Cash rich after three years of strong chemicals demand, Mr Hambrecht was confident BASF could shoulder the financial and operational burden of integrating three companies at the same time.

Some might take his insouciance as a sign of arrogance. In fact, it appears to reflect a quaint pride in the strength of BASF’s organisation. There is a “way of doing things” – detailed planning, rigorous practice, careful execution – that suffuses the 141-year-old group.

The preparations for meeting Mr Hambrecht, who took the reins in May 2003, speak volumes about BASF’s culture. Two months in advance, a date is booked. With a month to go, a spokesman is pressing for decisions on the interview’s structure. Days later, he is asking for the interviewer’s curriculum vitae.

The source of this detailed competence becomes clear when you step outside the head office building. Northwards and eastwards towards the Rhine, mile after mile of factories – 250 in total – turn oil and gas into a long list of their chemical derivatives.

BASF’s name for its vast, interconnected production complex (for which there is no adequate English translation) is the Verbund. It has built similar sites elsewhere, but none as big. Successive generations of managers have seen mastery of the network as the key to the company’s success.

A chemical reaction produces a predictable series of products and by-products. BASF has therefore constructed the Verbund to squeeze every ounce of value out of those reactions. Instead of shipping everything to the next user, it looks for new ways of reusing and recombining them.

This has spawned a vast cascade of products from oil-based ethylene to food additives, and miles of pipes that bring chemicals from different parts of the site. The resulting savings in transport costs mean that BASF’s production costs are up to one-fifth less than those of its rivals – even in high- cost Germany. Protecting this advantage is Mr Hambrecht’s overarching aim.

“The big difference with other companies is that BASF has a long-term strategy. It’s based on the Verbund and has a long tradition,” he says. “You take charge of a company that is well run. The challenge is to keep it running well.”

The man in charge has to know the machine – Mr Hambrecht has worked at the company for nearly 30 years – and its constraints. While BASF can absorb the recent medium-sized acquisitions, for example, the Verbund precludes a mega-merger as the need to transport goods conventionally would be likely to raise, not lower, production costs.

Mr Hambrecht describes his role as that of a “conductor” who makes existing parts and players cohere, not a composer who makes and sells something new. “A chemical company doesn’t need a pop star boss,” he says.

Indeed, there is no apparent flamboyance to Mr Hambrecht, who turned 60 last week. With a gaunt runner’s physique, he is used to straight talking.

But his job is far from artless. Though the laws of chemistry impose their constraints on the range and volume of its products, each BASF boss has drawn the limits of his Verbund differently.

Despite the emphasis on tradition and continuity, BASF does change, he insists. “Our portfolio changes have been quite substantial in past years. In the last decade, we’ve sold businesses worth €11bn and have spent more than €13bn.”

For example, the Verbund used to buy the oil and gas that are the raw materials for its products, which have included cassette tapes and drugs. In the 1960s, though, it moved into energy trading, as a way of insulating it from the ups and downs of raw material and chemical prices.

Thirty years later, Mr Hambrecht’s predecessor Jürgen Strube sold off tapes and pills. But he expanded into crop protection, a “downstream” business less volatile than core chemicals, and started selling gas in a German joint venture with Russia’s Gazprom.

Extending that end of the Verbund, Mr Hambrecht last year forged a ground-breaking alliance with the energy giant, which gave BASF a one-quarter stake in a Siberian gas development.

With the purchase of Engelhard’s catalysts and Degussa’s construction chemicals business, Mr Hambrecht again extended BASF’s reach towards markets blessed by steadily rising consumer demand and predictable prices.

“You always have to adapt things here and there in a strategy to account for economic, cultural or even political changes,” he says. “It’s not about revolution, it’s about managing constant change – of company and strategy.”

Its habit of thinking in long time spans and adopting a gradualist approach have been the greatest boon for the company in the past decade, says Mr Hambrecht.

In the mid-1990s, BASF started talks to invest €1.5bn in a Verbund site near Beijing, akin to more mature projects in Antwerp or Geismar, Texas. The project – the biggest foreign investment in China – started production last year.

As economic crisis swept Asia, Mr Hambrecht, then BASF’s regional head, stuck with the tough and often confusing talks. “We planned years ahead. We didn’t let the crisis chase us out of the country. Other companies weren’t as steadfast.

“The Chinese saw that we were prepared to stand firm with the partnership we were seeking. We gained their confidence,” he says. “In the same way, many companies came to question their plans to enter Russia. We never did that.”

He takes a final sip of tea. Mr Hambrecht’s travels in China have obviously left their mark. He says they calmed his irascible side. “I learnt to be more patient – that’s something that stood me in good stead with the Russians.”

It is one of the rare times that Mr Hambrecht uses the first person. “You can’t really associate anything BASF has done in the past three years solely with my person,” he says.

It is as convincing a demonstration as any of the power of “the BASF way” to subsume even the man at the top of the company.

A LAMENT FOR THE ‘GERMANY DISCOUNT’

When Jürgen Hambrecht took over as chief executive of BASF in spring 2003, he said the chemicals company had “to get closer to the customer” and “become more profitable” to boost its valuation and guard against being taken over.

To this end, he encouraged his marketing people to think in terms of providing solutions, not simply products. As a result, the Mercedes A-class car is not simply coated in BASF paint – BASF people do the painting.

He also bought companies such as the US catalyst maker Engelhard in order to move BASF into markets that are closer to consumers – and subject to more stable pricing levels. Prices of industrial chemicals, by contrast, are tied to the ups and downs of the business cycle.

Moves such as these and cost cuts in Germany and overseas helped to boost the group’s results. Return on capital employed more than doubled from 8.4 per cent in 2002, the year before Mr Hambrecht took over, to 17.7 per cent 2005.

Yet this bounce in performance does not appear to have roused investors to a similar degree. BASF’s share price has risen by a relatively disappointing 75 per cent since he took over and is currently trading at about the €62-a-share level.

The chief executive is not happy. He thinks German companies still suffer from a “Germany discount” because investors are “gloomy about the parameters for doing business here” – such as high taxes, red tape and thrifty consumers.

On top of that, Mr Hambrecht feels investors have not yet recognised the potential of BASF’s expanding oil and gas business or that of its forays into biotechnology. The chances are that these “haven’t yet been priced into the stock”, he says.

But he is meek enough to concede that investor ignorance might go hand in hand with bad corporate communication.

“It’s our responsibility to relay things so the financial markets understand what we’re doing,” he says.

Copyright The Financial Times Limited 2006

FT: Casinos bring a change of fortune for 'Redneck Riviera'

Casinos bring a change of fortune for 'Redneck Riviera'

By Andrew Ward

Published: August 28 2006 03:00 | Last updated: August 28 2006 03:00

It is 10am at the Isle of Capri casino in Biloxi, Mississippi, and Don Williams has been gambling since breakfast. In his hand is a credit slip showing $15 of winnings but, rather than cashing out, he inserts it in a slot machine in the hope of bigger returns.

Two goes later and his credit is down to $13 as the reels fail to deliver matching symbols. "I've been back five times since Katrina," says the 65-year-old from Alabama. "I haven't won a thing."

While Mr Williams is short of luck, the future of the Mississippi casino industry has never looked brighter.

Many doubted the state would recover its crown as gambling capital of the south after Hurricane Katrina destroyed or badly damaged all 12 of its seafront casinos last year.

But, 12 months later, gambling revenues have bounced back to three-quarters of their pre-Katrina level and gaming companies are pouring billions of dollars into an expansion expected to more than double the number of casinos.

MGM Mirage, the world's second-largest gaming group, will mark the anniversary of Katrina tomorrow by reopening its Beau Rivage casino in Biloxi following a $550m (€433m, £290m) refurbishment - the seventh to return since the storm.

Revival of the casinos is crucial to broader recovery along the Mississippi coast because gambling was one of the most important pillars of the state economy before Katrina, generating $500,000 in daily tax revenues.

In Biloxi, the main gambling centre, about 30 per cent of the population worked in casinos and half the city's annual budget was funded by gaming and associated restaurants and hotels.

Gambling was legalised in Mississippi 16 years ago to provide a fresh source of growth for coastal communities hit by a decline in their traditional fishing industry.

Until Katrina, casinos were restricted to floating seafront barges to appease opponents of gambling in one of the Bible Belt's most God-fearing states. But the law was relaxed following the storm to allow casinos on land within 800ft of the shore, as state legislators sought to make sure the industry returned.

Almost immediately gaming companies began buying former residential land swept clear by Katrina, with at least four new casinos planned in addition to existing ones being rebuilt.

A.J Holloway, mayor of Biloxi, says he expects his city alone to have 18-22 casinos within 10 years, making it a rival to Atlantic City, New Jersey, as the second-largest US gambling destination after Las Vegas.

Casino operators are part of a broader rush of private capital into the Mississippi coast as investors seize the opportunity created by Katrina to redevelop a stretch of sandy coastline once derided as the "Redneck Riviera".

Property developers were already eyeing the coast's potential as nearby Florida became more expensive and crowded, but the storm provided a catalyst for them to move in.

More than $600m worth of new seafront apartment blocks have been proposed in Biloxi alone since the storm, with several already rising from the ground even before all damaged buildings have been demolished.

Mr Holloway says the number of new apartment units planned for the city has increased from 3,500 before Katrina to more than 9,000 today.

Heavy private investment in the coast helps explain why Mississippi has made more progress towards recovery than neighbouring Louisiana. While many streets in New Orleans remain strewn with debris and half its population is still absent, the clean up in Mississippi is nearly complete and 98 per cent of its people are back - albeit with 100,000 still living in trailer homes.

"When I went with the police chief to survey the wreckage after the storm, I did not have much hope," says Mr Holloway. "But we're coming back quicker than I expected."

Not everyone is enthusiastic about the influx of casinos and apartment complexes. Critics fear the coast's rich southern architecture and fishing heritage risk being obliterated and complain that the interests of gaming companies and property developers are being put ahead of ordinary people.

Land prices in Biloxi have soared from about $15-$25 per sq ft before Katrina to $50-$100 following the storm as developers swarm, delivering a bonanza for land owners but making it harder for low-income residents to return.

Many of Biloxi's poorest residents, mostly African-Americans and Vietnamese fishermen, lived in the district that was flattened by Katrina and is now earmarked for redevelopment by casino operators.

But Michele Chamberlain, one of 3,800 employees about to return to work at the Beau Rivage, has no complaints. "I don't know anyone in Biloxi that is opposed to the casinos," says the 27-year-old. "They are the only businesses creating jobs."

Copyright The Financial Times Limited 2006

FT: Saving virtues

see also John Weinberg

Saving virtues

By John Gapper

Published: August 26 2006 03:00 | Last updated: August 26 2006 03:00

The Accidental Investment Banker: Inside the Decade that Transformed Wall Street by Jonathan A. Knee

Oxford University Press $26, 272 pages

Investment bankers are feeling their age. Jonathan Knee's entertainingly indiscreet memoir of his years at big investment banks is the latest sign of midlife crisis in the ranks of the City of London and Wall Street.

As banks such as Goldman Sachs derive more of their revenues from financial trading, the corporate financiers who used to hold sway there chafe at their loss of influence and independence. Some have left to join small advisory boutiques, complaining that the "trusted adviser" is no longer valued by today's financial conglomerates.

The passing of time has also produced a trickle of memoirs from corporate financiers, shedding light on how they earn (or justify) their large salaries and bonuses. Freud in the City, David Freud's account of life at Warburg and UBS, is one such tale. He is now joined by Knee, who was an adviser to media companies at both Goldman Sachs and Morgan Stanley.

Knee, who now works for a finance boutique and teaches at Columbia University, is firmly in the traditionalist camp. For him the golden era of the corporate financier is past, killed by the rapid growth of banks in the 1990s and their increasing willingness to put their own interests before those of their corporate clients.

So representative is his complaint that his memoir would not stand out for that alone. But The Accidental Investment Banker has another quality: Knee's amusing, if sometimes brutal, forthrightness in describing ex-colleagues. One Goldman banker, he writes, had "stellar strategic judgment" but "often looked as if he had slept on a park bench".

As for Joe Perella, the legendary mergers and acquisitions adviser who recently left Morgan Stanley to form a financial boutique, a meeting in his office "could go on for hours and was accented by... emotional calls to friends, relatives, clients and bankers, dozing off and occasional flatulence".

Knee's talent for wicked pen portraits is put to good use because he worked in the vicinity of some the most colourful and intriguing investment bankers of the 1990s. Among them was John Thornton, a rebel at regimented Goldman Sachs, who built its mergers and acquisitions business in Europe and Asia and was regarded with suspicion by its bankers in the US. Knee was a protege of Thornton and gives him a comparatively easy ride. But he acknowledges that Thornton's individualistic pursuit of "the most important people in the world" and his flair for self-publicity are the kind of thing he abhors in others. He would prefer that all banks still practised Goldman's traditional values of teamwork and loyalty to clients.

Instead, the 1990s saw changes that weakened banks' adherence to what J.P. Morgan called "first-class business in a first-class way". These included the dotcom boom, when banks scrambled to hire and retain staff with huge guaranteed bonuses, and the lowering of the barriers between commercial and investment banking.

Does this amount to more than a lament for the good old days? After all, Knee's is hardly a flattering portrait of how investment bankers have always operated, luring chief executives with a dash of industry expertise and a smattering of ideas about possible acquisitions. He provides a devastating description of how fat "pitch book" presentations for new business are thrown together by junior staff.

Still, he makes a decent case that it is harder now for corporate financiers in big banks to offer impartial, long-term advice to companies. Wall Street was never perfect, but its imperfections have multiplied with age.

Jonathan A. Knee will answer questions live on Tuesday at www.ft.com/accidental

Questions can be posted earlier

Copyright The Financial Times Limited 2006

FT: Gone Dutch

"But the most visible expression of Dutch wealth is the Dutch body. Over the last century the Dutch have shot up by an average of 20cm to become the world's tallest people."

"The most stressful change in the postwar Netherlands was mass immigration. In the early 1960s there were still only a few hundred Turks and Moroccans in an almost all-white nation. Then foreign "guest workers" were recruited. They were given brooms, hardhats and a ghetto apartment and put to work. Nobody bothered teaching them Dutch. Later their families followed. Growing up in Leiden in the 1970s and 1980s I never met a Dutch Turk or Moroccan. Now about 10 per cent of the Dutch population is non-white, higher than the approximately 8 per cent in Britain.. Yet racist politics were slow to take off.'

"In 1900 the Netherlands had 5 million inhabitants, fewer than Belgium, Portugal or Austria. In the next century the Dutch population more than trebled, thanks to wealth, relative peace, the procreation race between Dutch Protestants and Catholics, and immigration. It's the sort of growth-rate you would expect in a developing country. Today the Netherlands has 16.4 million inhabitants, 6 million more than Belgium or Portugal and twice as many as Austria. The Netherlands now averages 395 inhabitants per square kilometre, 152 more than the UK.Misuse of land increased Dutch claustrophobia. Farming now produces less than 5 per cent of Dutch GDP. Yet in 2000, farms still occupied two-thirds of the country's territory. The remaining third was crammed with people... This created a nostalgia for a lost Dutch landscape, felt by everyone who remembers the emptier country of a few decades ago."

"Fortuyn's anger at Muslims, at the European Union, and at the Netherlands' technocratic rulers, appealed particularly to less- educated voters. He thus introduced class struggle to a country previously so homogeneous that it had boasted of having "the poorest rich and richest poor" in the world. Bos told me a divide arose between the educated class and the common man. "Because intellectuals thought positively about Europe and the common man didn't like that. Because intellectuals said migration enriched society, and the common man was faced with the downsides of it."

"But in bigger ways too, Bos is a new Dutch politician: like Blair, he has got his party listening to voters. In another country this would be a platitude. But in the Netherlands it is a new idea. Here technocrats used to lead, and voters trusted them. Populism didn't exist. Bos - like most successful Dutch politicians today - learned it from Fortuyn. Dutch populism chiefly means being tough on immigrants. As Bos phrases it: "You have to ask whether it's solidarity to let people in who have no real chance of succeeding in your country because they are so far behind."... Bos says nice things about immigrants too, but no previous Dutch Labour leader ever said anything so sharp...Dutch anti-immigration extremists have been marginalised precisely because mainstream types like Bos have adopted much of their message...The new Dutch populism will be more rule-bound, more respectable, less hysterical than Verdonk's version. It will probably make the Netherlands more democratic. But it will also bury Dutch exceptionalism. The Dutch used to see their polity as uniquely liberal and tolerant. Now, after Fortuyn, it is a grubbier, sadder, less hopeful place, no longer a guide-land.

==

Gone Dutch

By Simon Kuper

Published: August 26 2006 03:00 | Last updated: August 26 2006 03:00

The Dutch national identity crisis of the past five years has featured several characters straight out of pantomime. First, around the time of the September 11 attacks in 2001, came Pim Fortuyn, a giant gay anti-immigrant politician in tailored Italian suits; later Theo van Gogh, a foul-mouthed filmmaker descended from Vincent van Gogh's brother; and Ayaan Hirsi Ali, a beautiful former Somali asylum-seeker who with Van Gogh made a silly little film against Islam. Fortuyn and Van Gogh were murdered, while Hirsi Ali has sought exile in the American Enterprise Institute, a think-tank in Washington.

The latest cartoon character to bestride Dutch politics is the country's minister for integration, Rita Verdonk. Once a far-left member of the "Union for Lawbreakers", later a prison governor, "Iron Rita" is possibly the toughest anti-immigrant politician in any European cabinet. At 5.30am one day in June, a disagreement involving her and Hirsi Ali brought down the Netherlands' centre- right coalition government. On November 22 this once placid country will experience its third election in under five years.

I wrote a book (Retourtjes Nederland - "Return Tickets to the Netherlands") to try to understand how the Dutch had changed. I had arrived in Leiden as a six-year-old immigrant in 1976, and stayed for 10 years, but after Fortuyn's murder in 2002 I could no longer recognise the country where I grew up. On visits nowadays, I often feel like a time-traveller from the 1980s. Recently I was stuck in a traffic jam in The Hague on a Sunday morning. I experienced a sequence of shocks: a traffic jam on a Sunday! Look, a hairdresser that's open on Sunday! The hairdresser is called "Istanbul!"

My research for the book showed me that in recent decades the Netherlands had undergone a transformation of a magnitude rare in western Europe. Fortuyn and the other pantomime characters were merely symptoms of this transformation.

Before September 11 2001 it had been hard to find a quieter and happier place than the Netherlands. "When the world ends I'll go to Holland, because there everything happens 20 years later," the German poet Heinrich Heine supposedly said, though no one can find the reference. After the 17th century the Dutch experienced a long holiday from history. They escaped civil wars, revolutions, the first world war and communism. With little to complain about, there were almost no Dutch political extremists. Even the country's National Socialists of the 1930s were relatively moderate and non- violent.

The archetypal story from Dutch history concerns the Trotskyist politician Henk Sneevliet, who in the early 1930s got into trouble with Stalinists. "The attacks were not limited to words," writes the historian Chris van der Heijden. "A communist gang waited for Sneevliet after a public meeting in Rotterdam in March 1931. He reached the train station only under guard." And then, darkly: "It wasn't the only time such a thing happened to him." At the same time Stalin was slaughtering hundreds of thousands of Trotskyists in the USSR and there were street battles in Weimar Germany.

History caught up with the Netherlands only when the Germans invaded in 1940. Three-quarters of Dutch Jews - about 100,000 people - were killed in the Holocaust. Altogether the Netherlands lost 200,000 people in 20th-century conflicts: a ghastly massacre, except when compared with practically any other country. Dutch gentiles have had three fairly placid centuries.

Ruled by boring technocrats, the Netherlands grew rich fast after the second world war. The discovery of large gas reserves helped. A country of poor pious farmers became a country of part-time office workers in new suburbs. On measures such as average income, education, longevity or use of internet, the Netherlands made the top 10 of most international league tables. But the most visible expression of Dutch wealth is the Dutch body. Over the last century the Dutch have shot up by an average of 20cm to become the world's tallest people.

The average Dutchman now stands 1.85 metres (6ft 1in) tall, and women 1.71 metres (5ft 7in). My classmates were raised on a regime of brown bread, dairy infusions and inoculations, in a climate where everyone of normal physique was in danger of being blown straight into the North Sea. My nickname at primary school was Mini Kuper, after the popular car of the time.

Worse, the Dutch keep getting bigger, as if in a horror movie. One of the scariest sights in modern Europe is a Dutch school playground at break-time. The national transformation is embodied by a friend of mine, a 1.99-metre tall London correspondent of a Dutch financial newspaper, whose great-grandparents were photographed in National Geographic magazine as typical Dutch cheese-farmers in 1954.

By 2001, anyone comparing the contemporary Netherlands with all societies that had ever existed had to conclude that it was doing well. Wim Kok, prime minister from 1994 until 2002, once rightly suggested in parliament that given all the good news they'd had, they might do the Mexican wave. Yet the populist uprising begun by Fortuyn had already been a long time brewing.

The most stressful change in the postwar Netherlands was mass immigration. In the early 1960s there were still only a few hundred Turks and Moroccans in an almost all-white nation. Then foreign "guest workers" were recruited. They were given brooms, hardhats and a ghetto apartment and put to work. Nobody bothered teaching them Dutch. Later their families followed. Growing up in Leiden in the 1970s and 1980s I never met a Dutch Turk or Moroccan. Now about 10 per cent of the Dutch population is non-white, higher than the approximately 8 per cent in Britain.

Yet racist politics were slow to take off. Politicians treated immigration as a taboo topic. In part, this was because of the memory of the Holocaust, and the Dutch failure to save their Jews. Wouter Bos, the leader of the country's Labour party and the most likely next prime minister, told me that whenever a Dutch politician raised problems of integration, "others evoked the memory of the second world war. There was such an enormous feeling of guilt about our own failure in the war that the discussion was immediately stopped".

But by 2001 the war was sufficiently long ago that Fortuyn could attack Muslims without being depicted as a new Hitler. He was a funny speaker, with a touch of Oscar Wilde about him - not like the technocrats. Fortuyn also introduced messianism into Dutch politics: the idea that you could create the perfect society, without traffic jams or hospital waiting lists or un-Dutch thoughts. The existing society could only be a disappointment after that.

The September 11 attacks on the US launched his brand of anti- Muslim populism. Fortuyn's description of Islam as "a backward religion" appealed to many voters. But his best work was his slogan "the Netherlands is full." Much of the turmoil of the past five years has happened because the Netherlands is one of the world's most densely populated countries.

In 1900 the Netherlands had 5 million inhabitants, fewer than Belgium, Portugal or Austria. In the next century the Dutch population more than trebled, thanks to wealth, relative peace, the procreation race between Dutch Protestants and Catholics, and immigration. It's the sort of growth-rate you would expect in a developing country. Today the Netherlands has 16.4 million inhabitants, 6 million more than Belgium or Portugal and twice as many as Austria. The Netherlands now averages 395 inhabitants per square kilometre, 152 more than the UK.

Misuse of land increased Dutch claustrophobia. Farming now produces less than 5 per cent of Dutch GDP. Yet in 2000, farms still occupied two-thirds of the country's territory. The remaining third was crammed with people. This created a nostalgia for a lost Dutch landscape, felt by everyone who remembers the emptier country of a few decades ago. The field behind my house in Leiden, to cite one tiny example, no longer exists. This nostalgia was shared by Fortuyn, by the green activist who murdered him, and by Fortuyn's voters, who demanded to live in a country without traffic jams. On May 15 2002, nine days after he was shot, his party won 18 per cent of the vote in parliamentary elections. Dutch anti-immigration fever is the consequence of too many people in too small a space.

Fortuyn's anger at Muslims, at the European Union, and at the Netherlands' technocratic rulers, appealed particularly to less- educated voters. He thus introduced class struggle to a country previously so homogeneous that it had boasted of having "the poorest rich and richest poor" in the world. Bos told me a divide arose between the educated class and the common man. "Because intellectuals thought positively about Europe and the common man didn't like that. Because intellectuals said migration enriched society, and the common man was faced with the downsides of it."

Fortuyn's murder was a bigger shock than it would have been in Germany, Britain, Italy or even Sweden, countries that are used to political murders. No Dutch politician had been killed since a mob lynched the De Witt brothers in 1672. (A thumb and tongue remain on display in the Hague Historical Museum.)

For centuries the Netherlands had little experience of extremism and violence. After Fortuyn's death it still had little experience, but it now lived in fear. Then, in November 2004, Theo van Gogh was stabbed to death by the Islamic fundamentalist Mohammed Bouyeri for having made his anti-Islamic film. Panic erupted nationwide. The murder was described as a "Dutch September 11", even though it wasn't exactly comparable in scale, and hadn't been committed by a wealthy international terrorist organisation.

Dutch thugs mourned Van Gogh by burning mosques and Islamic schools. A cabinet minister said the Netherlands was "at war". Many Dutch people felt that their holiday from history had ended.

Old Fortuyn quotes, once shocking, became mainstream. Gerrit Zalm, deputy prime minister, said "the Netherlands is full", while Geert Wilders, an MP who founded an anti-immigrant party, said Islam was backward. But the chief heir to Fortuyn's revolution became Rita Verdonk. She is that rare thing in the Netherlands, a nationalist politician, who said that for immigrants becoming Dutch was "first prize".

Verdonk decided that the problem with the Netherlands was that the local Muslims were not Dutch enough. She wanted to make them pass integration courses, or to send them "home" if they committed crimes. People who passed the courses and became citizens would then have to sing the first stanza of the Dutch national anthem. This features the surprisingly unpatriotic lines "I am / of German blood" and "The King of Spain I have always honoured", but Verdonk prefers to emphasise the phrase "loyal to the fatherland".

She once suggested immigrants be given "vignettes" to gauge how well they had integrated. It was unclear what she meant by this - whether there should be a physical mark, such as a tag or passport stamp, or some invisible grading system. She dropped the idea after Hans Dijkstal, former leader of her "liberal" rightwing VVD party, said he was reminded of the Nazis' yellow star for Jews.

Verdonk then focused on developing her integration courses for those born outside the Netherlands. One retired professor of foreign origin, receiving a letter instructing him to take such a course, corrected the spelling mistakes and posted it back. Nor would the courses have helped Bouyeri, who was arrested carrying a poem of his own composition in rhyming Dutch.

Like the original "Iron Lady", Margaret Thatcher, "Iron Rita" prided herself on knowing her own mind. In the Dutch phrase, she was "straight through the sea". No multiculturalist, she scolded an imam who refused to shake her hand because she was a woman. But despite her mantra that "rules are rules", many of her proposals turned out to be illegal: Dutch law does not allow special treatment for members of certain ethnic groups. It is therefore illegal, for instance, to send Dutch citizens who happen to be of Moroccan origin on integration courses, or to Morocco if they commit a crime. The collapse of most of Verdonk's plans left her relying chiefly on words. When a Muslim teenager was knocked over and killed by a car after stealing its driver's handbag, Verdonk said: "If that boy hadn't stolen that bag, he'd still be riding around on his scooter."

Technocratic MPs didn't like Verdonk's habit of appearing on television to reveal personal details from some deported asylum- seeker's file. They were angry when Syria and Congo got information about asylum-seekers whom Verdonk was returning to these dictatorships. They didn't like Verdonk's intention to send gay and Christian asylum-seekers back to Iran. (If her definition of modern "Dutchness" didn't include protecting gays and Christians from an Islamic theocracy, it was unclear what it meant.) Dijkstal compared Verdonk to the extremists Jean-Marie Le Pen in France and Belgium's Filip Dewinter.

One day this spring Verdonk saw a television programme about Hirsi Ali. The programme made the familiar point that the country's most celebrated immigrant had given a false name when applying to stay in the Netherlands. This was apparently news to Verdonk. She immediately announced that Hirsi Ali should lose her passport.

Parliament's anger with Verdonk boiled over, as MPs rallied behind their favourite asylum-seeker. Hirsi Ali wrote an open letter apologising for her sins. It said of Verdonk: "I completely understand that she acted as she did." Verdonk then said Hirsi Ali could keep her passport.

The government might have survived, had the weary Christian Democratic prime minister Jan Peter Balkenende not let slip in parliament during a late-night debate that Hirsi Ali's apology to Verdonk was necessary. This confirmed a rumour being fed by Hirsi Ali herself, that she had done a deal with Verdonk: an apology for a passport. The technocrats were outraged. The little D66 liberal party left the coalition government in protest at Verdonk. The government fell. Today Iron Rita remains in the minority centre- right "rump cabinet" as it heads for the elections. So far she has survived three parliamentary motions of no confidence.

Verdonk is partly responsible for a new Dutch despair over the country's image abroad. The country used to see itself as a light unto nations, the ideal democracy. In Dutch debates on foreign policy, it was common to use the phrase "Netherlands guide-land". For decades, few foreigners paid much attention. But in the past five years, Dutch politics suddenly became international news. Fortuyn, Van Gogh and Hirsi Ali were ideal characters for foreign media, because each could be captured in a sentence: Fortuyn was gay, Van Gogh possessed a legendary name, and both were slain horribly. The "banishment" of the beautiful Hirsi Ali got into papers everywhere.

The Dutch are big consumers of foreign media, and ravenous for their own rare appearances in them. The past five years have brought much embarrassment. When George W. Bush made a speech last year in Brussels, for instance, he mentioned the domestic situation of only one European country: the Netherlands, which he said was suffering from violence.

The Hirsi Ali affair particularly embarrassed the Dutch. Some American media suggested that she was being banished because her attacks on Islam frightened the weak-kneed Dutch. This was quite wrong. Her attacks on Islam were popular in the Fortuynist Netherlands. And the minister who threatened to take away her passport ("shamefully", wrote The New Yorker) not only seemed to share her views of Islam, but was also the political representative on earth of Fortuyn, first prophet of these views.

Nonetheless, the Verdonk-Hirsi Ali affair made the Dutch look both cowardly and anti-immigrant. Balkenende ordered Dutch ambassadors to write to foreign newspapers explaining the true facts of the case. It's questionable whether this restored the Dutch image abroad, because almost immediately afterwards the next Dutch story broke in the foreign media: a new "paedo-party" called for the legalisation of sex with 12-year-olds.

When I asked the Labour leader Bos whether the Dutch image had worsened, he said: "I notice it, and I think it's a shame, because in the end you have less influence. It's not at all 'the Netherlands guide-land' that we always thought we were."

At least the Dutch establishment avoided the ultimate embarrassment: in May Verdonk narrowly failed to become leader of the hitherto respectable VVD party. She lost the internal election to Mark Rutte, despite getting 45 per cent of the vote. Now the VVD is again so respectable that Ben Verwaayen, the Dutch chief executive of British Telecom, is in charge of writing its election manifesto.

Amid the political mess, the Netherlands has regained much of the placid happiness that prevailed before 2001. The economy is growing again after an unusual period of stagnation and recession. Everywhere normality is returning. The site of Van Gogh's murder on a busy Amsterdam shopping street was once a shrine of flowers and letters, but this spring I searched in vain for the spot.

Perhaps best of all, the Netherlands is already becoming less full. The solution turned out to be getting rid of the farmers instead of the immigrants. Dutch farmland is fast being returned to nature, or to the real-estate developers. Agriculture now takes up just 54 per cent of Dutch territory, and its share keeps falling. New homes and parks are going up where cows recently grazed. Sietse van der Hoek, author of a book on "the last Dutch farmers", writes that "the Netherlands will shortly be a de-farmed nation, and a whole new history for the Low Countries will commence." The population explosion is over; the transformation of the national landscape has begun. By mid-century the Dutch may hardly feel claustrophobic at all.

European Commission Eurobarometer polls of public opinion this summer showed levels of Dutch contentment consistent with a whole nation being on Prozac. Ninety-five per cent of those polled said they were happy with their lives. They were more confident than most Europeans about their economic future, showed above-average faith in their politicians, and only 19 per cent named terrorism as a key issue facing the country. A year after the Netherlands voted "no" in a referendum on the European constitution, 74 per cent of Dutch people said membership of the EU was a good thing. Only the Irish were more positive among EU member-states.

In this climate, the Netherlands' most obsessive anti-immigration politicians are vanishing. Their messianism and untechnocratic "can-do" spirit had failed to get rid of traffic jams or immigrants. The Armageddon they predicted has yet to materialise: old ladies still cycle down Dutch high streets. Fortuyn's LPF party has imploded and will probably disappear from parliament at the November elections, though Fortuyn's own name remains such a valuable brand that the LPF is disputing its use with a rival party.

Politicians who bang on about immigrants a la Verdonk - appealing to "abdominal feelings", as the Dutch call it - are now considered slightly tasteless. The coming election, like most previous Dutch elections, will be fought chiefly over minor adjustments to the elaborate welfare safety net. The election's main peculiarity is that it might result in the ousting of the sitting prime minister, Balkenende. So great is Dutch contentment that no premier has been voted out of office since 1973. There have been communist dictatorships that offered less job security. In November, however, Labour is predicted to triumph. Balkenende, a devout Protestant throwback to the Dutch 1950s with a Harry Potter hairstyle, is not helped by his total lack of charisma.

Whoever wins the election, the Netherlands will never again be quite the same place it was on September 10 2001. I realised this when I interviewed Bos last year at an international retreat for Social Democrats in Surrey. The fresh-faced, informal yet earnest 43-year-old is strangely reminiscent of the fresh-faced, informal yet earnest 43-year-old Tony Blair who moved into Downing Street in 1997. Like Blair, Bos is well-educated: he completed two degrees with distinctions, quotes the latest sociological studies, and spent nine years working for Shell. It's a typical Dutch technocrat's CV, with the requisite modern twists: Bos tries to keep Fridays free of work so that he can be a stay-at-home father to his two children. He doesn't wear a tie, and immediately suggests to me that we address each other with the familiar "jij", the Dutch equivalent of the French "tu".

But in bigger ways too, Bos is a new Dutch politician: like Blair, he has got his party listening to voters. In another country this would be a platitude. But in the Netherlands it is a new idea. Here technocrats used to lead, and voters trusted them. Populism didn't exist. Bos - like most successful Dutch politicians today - learned it from Fortuyn. Dutch populism chiefly means being tough on immigrants. As Bos phrases it: "You have to ask whether it's solidarity to let people in who have no real chance of succeeding in your country because they are so far behind."

Bos says nice things about immigrants too, but no previous Dutch Labour leader ever said anything so sharp. He had come to Surrey to persuade Social Democrats from around Europe that the left must take traditional rightwing issues like immigration and Euroscepticism seriously. Bos explained to me that one big divide in Europe was between countries that had experienced a rightwing populist movement and those that hadn't. In countries with populism - notably Denmark, Austria and the Netherlands - the left had learned how easily it could lose voters to people like Fortuyn. Bos said it "worries me a bit" that the left in Britain and Germany hadn't realised this yet. Dutch anti-immigration extremists have been marginalised precisely because mainstream types like Bos have adopted much of their message.

The new Dutch populism will be more rule-bound, more respectable, less hysterical than Verdonk's version. It will probably make the Netherlands more democratic. But it will also bury Dutch exceptionalism. The Dutch used to see their polity as uniquely liberal and tolerant. Now, after Fortuyn, it is a grubbier, sadder, less hopeful place, no longer a guide-land.

Copyright The Financial Times Limited 2006

FT: Uncivil war

"With increasing social unrest and popular outrage at the party-state’s corruption, it is probably too early for the masses to relegate Mao’s call to rebel to the dustbin of history. As a former Red Guard, now a successful businessman in Beijing, remarked to the oral historian Sang Ye: “If you ask me to look back on it from my present perspective, I don’t think it was all that different from today. If a time comes when rebellion is justified again, I might be too old to get involved, but believe you me I’m going to encourage my son to get out there and fuck them over a bit.”

==

Uncivil war

By Geremie R. Barme

Published: August 25 2006 15:00 | Last updated: August 25 2006 15:00

Mao’s Last Revolution
by Roderick MacFarquhar and Michael Schoenhals
Belknap Press/Harvard University Press ₤22.95, 752 pages

On August 18 1966, Mao Zedong reviewed a mass gathering of zealous young people in Tiananmen Square. At the last moment, he donned a People’s Liberation Army uniform and, although it didn’t quite fit his bulky frame, it marked both to his audience of more than a million Red Guards and to his colleagues standing on the rostrum with him, that the old guerrilla leader was launching a new campaign. It would become a war of all against all, a civil conflict unlike any other that China had experienced.

In China, August 1966 is known as Red August - hong bayue. For the supporters of the Great Proletarian Cultural Revolution, red symbolised revolution and the ardour for uncompromising and radical change. For them the slogan of the day was “rebellion is justified”. But for those who were the victims of the opening salvos of that political movement, the harrowing weeks of verbal abuse, ransacking and murder made it “bloody August”. It was but a prelude to the long years of confusion and devastation that were to follow.

Mao’s Last Revolution is the product of years of research and reflection by two prominent scholars of China’s communist-era politics, Roderick MacFarquhar and Michael Schoenhals. Both had close encounters with aspects of the Cultural Revolution - MacFarquhar travelled to China and early on offered prescient analysis of the politics of the day; Schoenhals studied at a late-Maoist university. Like other foreigners who experienced China then, as well as countless Chinese, they were engrossed by the events of those years. For decades they have both pursued their interest, following the gradual revelations of participants, ferreting out internal documents and personal accounts in an effort to make sense of what happened over many years of writing.

This book is a meticulous rendition of elite Chinese revolutionary politics. It supplements MacFarquhar’s voluminous studies of the origin of the Cultural Revolution, and like his other works the detailed depiction in this book is judicious and painstaking. It is an account that puts other recent works on Mao’s grand revolution in the shade - one thinks in particular of Jon Halliday and Jung Chang’s bestselling “maledictory” on Mao.

Mao’s Last Revolution will be essential for students of the denouement of the Chinese revolution. However, this tome is not for the general reader. And while the authors are savvy connoisseurs of power politics, their work provides scant insight into the broader world of high-Maoist China.

It is frustrating that the authors give so little weight to the underpinnings of Mao’s last revolution; nor do they help the reader gauge the origins or extent of pent-up mass fury. On the ground, beyond the corridors of power, there was great popular resentment towards the socialist state’s callous rule. The party’s arrogant elitism, its entrenched system of privilege and the yawning gap between its high-minded rhetoric and day-to-day reality, all fed into a frenzy that not only created “bloody August”, but also eventually saw the country awash in blood.

The authors have their eyes set on elite infighting, and they traverse their chosen battleground with a staunch gait. It is a dour journey they make, one only occasionally relieved by touches of (gallows) humour, although humour - black rather than red - is a common feature of Chinese accounts of this wretched era. So, for example, it is a relief to encounter the authors’ comment on the murderous antics of the opportunistic Wang Li: “But if Wang was trying to jump on the bandwagon, he found that he had landed on a tumbril instead.”

For insightful and elegant writing on the Cultural Revolution, however, the work of Simon Leys (pen name for Pierre Ryckmans), the Australian-based Belgian sinologist, has yet to be surpassed. It is therefore surprising that, while many other non-Chinese accounts (some quite dodgy) are quoted in Mao’s Last Revolution, the remarkable books by Leys such as The Chairman’s New Clothes (1971) and Chinese Shadows (1975) are ignored.

Mao’s Last Revolution ends with the authors expressing their magisterial hope that, at some unspecified time in the future, a democratic China will confront the full history of this period and the legacy of Mao Zedong. In today’s post-socialist China, however, it is already evident that the Chairman and his history are so intermeshed with that country’s identity that perhaps even democracy will fail to exorcise his shade.

With increasing social unrest and popular outrage at the party-state’s corruption, it is probably too early for the masses to relegate Mao’s call to rebel to the dustbin of history. As a former Red Guard, now a successful businessman in Beijing, remarked to the oral historian Sang Ye: “If you ask me to look back on it from my present perspective, I don’t think it was all that different from today. If a time comes when rebellion is justified again, I might be too old to get involved, but believe you me I’m going to encourage my son to get out there and fuck them over a bit.”

Geremie R. Barme, a historian at the Australian National University, Canberra, co-wrote and co-directed “Morning Sun”, a documentary on the Cultural Revolution.

Copyright The Financial Times Limited 2006

FT: The great returner who triumphed in game of life

"Agassi burned out on the game. Women posted him naked photographs of themselves with their phone numbers inscribed, which must have been distracting. In 1997 he put on 22lbs. His epitaph was already written: a waste of talent.

Yet he returned to become world number one. "Why do you think fans prefer Agassi to Sampras?" asked Mats Wilander, a great of the 1980s. "Agassi has known it all, the victories, the decline, the renaissance and victory again. His path through tennis is symbolic of life.

"Agassi inhabited each of the three main human personality types in turn: teenage fantacist, slacker and finally striver.

The great returner who triumphed in game of life

By Simon Kuper

Published: August 26 2006 03:00 | Last updated: August 26 2006 03:00

It was one of those sporting careers that punctuated a life. Whatever you were doing these past 20 years, Andre Agassi was either around, or spectacularly not around, playing hooky from his vocation of tennis. But at 36 the boy from Las Vegas is kissing the game goodbye.

The US Open, which begins on Monday, will be his last tournament. I asked a few good judges - Martina Navratilova, his coach Darren Cahill and the chess champion Garry Kasparov - for their verdicts. But first a former opponent, Richard Krajicek: "It's as if he sees the ball bigger than the rest of us, because he returnsso quickly that as the opponent you are often on the wrong foot."

The bigger they made new players, the faster Agassi sent back their serves. When Andy Roddick served at 149mph, a new world record, Agassi returned it. He inaugurated a new kind of tennis. The serve-and-volley players were gradually replacedby followers of Agassi - including Roger Federer and Rafael Nadal - who hit winners from the baseline.

Rallying with Agassi was generally fatal. The instant an opponent dropped a ball a yard short, Agassi didn't give him another chance, sending the ball to the corners, patiently playing out the point like a great chess player unleashing his algorithms on a tiny positional advantage. "I think he understands the game better than anyone," Cahill told me.

Agassi's problem wasthat unlike his rival Pete Sampras, he always knew there was a life outside tennis. Agassi burned out on the game. Women posted him naked photographs of themselves with their phone numbers inscribed, which must have been distracting. In 1997 he put on 22lbs. His epitaph was already written: a waste of talent.

Yet he returned to become world number one. "Why do you think fans prefer Agassi to Sampras?" asked Mats Wilander, a great of the 1980s. "Agassi has known it all, the victories, the decline, the renaissance and victory again. His path through tennis is symbolic of life."

Agassi inhabited each of the three main human personality types in turn: teenage fantacist, slacker and finally striver. I asked Cahill what such a loverof life felt about training. "Everyone has their highs or lows in training," admitted Cahill. "He wants to improve himself. He never wastes a second of his training time, or his playing time."

What could a coach teach him? "Good question. There's not much you can change. That would be a major mistake. Make sure he makes the most of the punishing groundstrokes."

Was there anything that Agassi never learned? "The one thing I've tried to help him with which has been more difficult than I anticipated was to make him more comfortable around the net."

Navratilova is herself retiring from doubles next month, aged 49. I askedher to explain Agassi's longevity in singles.

"Amazing, amazing," she said. But how did he do it? "He stays inside the baseline, he takes the ball early, so he doesn't have to go as far to hit it. So he's very efficient in how he plays. And his strokes are efficient as well, meaning there's not much flailing around. It's pretty compact: short swing and pop. None of this big-ass backswing."

Where does Agassi stand in tennis history? "For me Rod Laver is the greatest of all time," said Cahill. "I would just about take Andre's career over anybody else: to have won the four slams, to be number one, to be the oldest number one. For me it's Rod Laver, and then Andre with a bunch of other players just behind him."

But did Agassi care about history? "He never takes the time to sit back and look around," said Cahill. "He's a humble guy. His main concern is making sure he can give back to the underprivileged children of Las Vegas."

Amid the elegies it's refreshing to hear someone diminish Agassi's achievement. Kasparov dominated chess for almost 20 years. In 2003 I asked him whether he felt kinship with ageing greats in other sports, such as Agassi or football's Paolo Maldini. "Yeah, they try," Kasparov conceded, "but my record has no comparison, because I'm number one for 18 years, and also in chess you have to come up with new concept.

"Every club player who has enough time to work with his computer could come up with the final solution of a position."

However, he added: "In tennis, Agassi is still Agassi, and you can't beat him even if you know all the movements."

When I asked Cahill how we would remember Agassi, he barely mentioned tennis. He said: "He's the most generous giver to charities of any athlete in any sport. He should be damn proud of where he is today."

Indeed: over five sets, and after saving several match points, Agassi won his match against himself.

Copyright The Financial Times Limited 2006

FT: Café leads way back to normality for Bay St Louis

"We wanted to create a haven of normality where people could escape what's going on outside," says Martin Chambers, who owns and runs the café with his wife, Alicein. "It's like a ray of hope. One customer came in, looked around and said: 'I think everything's going to be OK'."

[another example: how bill hewlett donated money to repair the stanford arch first after the 89 earthquake]

Café leads way back to normality for Bay St Louis

By Andrew Ward in Atlanta

Published: August 26 2006 03:00 | Last updated: August 26 2006 03:00

If a list were made of the most urgent priorities facing Bay St Louis, Mississippi, a year after it was battered by Hurricane Katrina, a coffee shop offering $3.75 café lattes and free wireless internet access would not feature prominently.

But two weeks after opening, the Mockingbird Café is starting to look like the best thing to happen to the town since the storm.

For the regulars who have already discovered it, fresh coffee and muffins are only part of the appeal. At least as important is the focal point it has created for a community recovering from disaster.

This week, the café, a southern-style, whitewashed wooden building that survived both the civil war and Katrina, was buzzing. Returning evacuees shared stories and teary embraces; an architect pored over rebuilding plans on her laptop computer; local teenagers huddled around a table sipping milkshakes.

"We wanted to create a haven of normality where people could escape what's going on outside," says Martin Chambers, who owns and runs the café with his wife, Alicein. "It's like a ray of hope. One customer came in, looked around and said: 'I think everything's going to be OK'."

As the first anniversary of Katrina approaches on Tuesday, the story of how the Chambers survived the loss of almost all their possessions and investments to return and start afresh is emblematic of thousands of similar experiences up and down the US Gulf coast.

In a region where family roots run deep and strong southern accents are almost universal, Mr Chambers, born in Northern Ireland, is a curiosity. He came to New York to celebrate St Patrick's Day 10 years ago and never returned. New Orleans was his next stop and it was there that he married Alicein, who owned a designer clock-making business there.

With Alicein pregnant, the couple moved last year to Bay St Louis, the town where she grew up. Combining his skills as a bricklayer with her flair for design, they set up a business buying old properties to restore. By the time Katrina struck, they owned six houses. All but two were destroyed, with $250,000 of stock at the clock business.

Only a fraction of their losses were covered by insurance. But as the storm rolled in, the biggest concern was the welfare of Ms Chambers and their unborn child. They evacuated to an inland motel but when flying fence posts pierced its flimsy walls they realised they needed to flee further.

Safety was found 250 miles north-east in Monroeville, Alabama, birthplace of Harper Lee, the Pulitzer Prize-winning author of To Kill a Mockingbird. Their stay there would later inspire not only the name of the coffee shop but also the second name of their baby son, Atticus, after the hero in Ms Lee's novel.

The day after Katrina, a National Guardsman on the Mississippi border told Mr Chambers: "Bay St Louis is gone." That turned out to be an exaggeration, but only just. Much of the town had been devastated by the 30ft storm surge, including many of the art galleries, craft shops and restaurants for which it was known.

An exception was a 143-year-old building on South Second Street that sustained only minor damage. The Chambers used their savings and insurance payout to buy it and make it a cafe, with a local bank making up the shortfall.

It was the first new business to open in Bay St Louis since Katrina. "We're confident it is going to pay off," says Mr Chambers. "This place was booming before the storm and there's no reason it can't do so again."

Copyright The Financial Times Limited 2006