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Speaking Ill

April 14, 2013 3 comments

In the last few weeks, the political climate in the UK crossed a line into a darker place. Anyone who has been following me over the last year or so will know my concerns about the trajectory that we are currently following. I recently re-watching this interview with rogue economist Steve Keen, where he talks about the danger of the rise of extremist politics as a result of the economic climate and austerity, and I am reminded that I am not alone in my fears. It is also a reminder that the UK is far from unique in these dangers: while this post will talk about the events of the last two weeks in the UK, readers in Australia, the US and other parts will no doubt recognise these problems in their own current politics.

The Philpott State…

It started off badly enough a couple of weeks ago with Iain Duncan Smith’s absurd comments that he could survive on the £53 a week that some welfare recipients are being subjected to as a result of his policies. This showed Duncan Smith to be nothing more than a school yard bully with a dangerously weak connection to the real world of many people (a more balanced report that I saw puts the figure at around £193 a week – I am fortunate enough to own my home and not pay rent and I would struggle on that amount – IDS’s figure wouldn’t even feed me).

But Duncan Smith’s nonsense – rarely a day goes by when he doesn’t fail a debunking of some sort or another – was just the hors d’ouvres to a more poisonous main course. It really got going with the Philpott trial. This was a man who had killed his numerous children in a house fire. He was also a recipient of state welfare. The Daily Mail, in a coup de grace for the Architecture of Resentment, went front page with a headline stating that the killings were a result of the welfare state – yes good people, you heard it here: welfare makes people kill their children. We need only change the story a little (instead of being a welfare recipient he was, say, Jewish) to see where this kind of politics is located in the course of history. Of course, the Daily Mail is an extremist right-wing paper – during the last election it described Liberal Democrat candidate Nick Clegg as a Nazi (ironic) – and perhaps shouldn’t be taken too seriously. But it is also very widely read and is a useful barometer of the low and more dangerous end in our political discourse. The article in the Daily Mail was shocking and hateful – it illustrates the Architecture of Resentment in the clearest manner possible. It speaks ill of the living and the vulnerable.

So far, so bad. The following day Chancellor George Osborne spoke a sanitised version of the Daily Mail’s hate speech (Prime Minister Cameron’s only contribution was to endorse Osborne’s comments). He said, and I quote, “there is a question for government and for society about the welfare state, and the taxpayers who pay for the welfare state, subsidising lifestyles like that.” His words, to be sure, are prettier than those found in the gutter press. But he was making exactly the same generalisation from a specific isolated case. His words evoke the same message, and it is a message that has been repeated endlessly for three and a half decades: the poor choose to be poor; it is a lifestyle choice (which includes, apparently, murdering children); welfare destroys homes (Now with new KILLING!). It is nothing more than the tired rhetoric of welfare dependency. This is the right-wing argument that welfare creates dependency on the state and on taxpayers. Welfare is like a narcotic, addictive and pleasurable to the recipients. The welfare state is nothing more than an opium den: at least as harmful and as undesirable.

Speaking Ill of the Living

To anyone who has ever actually depended on welfare the offensiveness of this kind of talk will be obvious. I grew up within Australia’s state welfare system. It ensured me a home, food, shelter, and an education – primary, secondary, and tertiary. To be sure, growing up within this system was far from perfect – the erosion of the social contract was already well under way even then. But I shudder to think of what my life might have turned into if I had been abandoned to the vagaries of the free market – if I could only have received the health care, shelter, and education that my capacity to buy would allow me. I am grateful for the support I received. I have gone from being a recipient of welfare benefits to paying taxation in the highest brackets, and I do so gladly.

I have proudly watched many good friends grow up within this system of support to become nurses, teachers, software developers, accountants, lawyers, musicians, restaurant owners, and so on – productive and responsible members of society, growing according to their own life plans and through their abilities rather than from whatever bargaining power they inherited. Such cases are not the exception – these are the success stories that are not told often enough. So much of our political space is polluted with fanciful talk of how the welfare state ruins people, with hardly any space to its real-life achievements. (It is curious that the Daily Mail universalises from Philpott but not from J. K. Rowling who wrote the first Harry Potter book while receiving welfare). These are cases where a worse result would certainly have ensued without the supporting social structure. The people in my life are real people, with their own goals and ambitions, hopes, fears, needs and wants. They are no different from the other seven billion people in the world in that respect.

It is certainly true that a lot of people remain within the welfare system (although the degree of intergenerational welfare “dependency” is grossly exaggerated as testified to in this Joseph Rowntree Foundation report). I have no reason whatsoever to believe that their failures are due to the welfare system, and I would hazard that their lives would have been even worse without the existing safety net, and that whatever “burden on society” that they posed would remain regardless, in some form or another.

The “dependency” rhetoric is loaded and deeply misleading, intended, like all Architecture of Resentment talk, to produce a certain result. The truth is that we are all dependents. Each day we depend (quite unknowingly) on the actions and (less recognised but just as important) inactions of many thousands of people. This deep interdependency is greatly expanded by the economics of capitalism. There are those who do depend on state welfare. To claim that they become dependent because of welfare is to get things the wrong way around. I will use the word “rely” instead of the poisoned word “depend”: such people rely on welfare. They do not form a dependency – they have one already that the state fulfils because the market will not or cannot. Some cannot work for reasons of illness, some are unlucky, some made bad choices, in many cases bad choices are forced (the best of a bad lot), and very often vulnerabilities compound each other. Some have been told for too long that they are valued by the market, and the market, finding their value to be zero, marks them as worthless. Some are simple functions of an economic framework that need unemployment to work properly – capitalism does not operate if everyone is employed: new businesses cannot start, new techniques cannot emerge, and, without the example of the destitute job seekers, employed people become unruly and might even start thinking for themselves (shock!); wages would rise and profits disappear. This is simply to say that unemployment is what economists call an “externality” – where one person benefits and another pays the price. If capitalist ideologues were more internally consistent and less expert at managing their spectacular cognitive dissonances, they would have to conclude that those who fulfil the role of being unemployed should be compensated well for the awfulness of their job by those who benefit – the profit takers. The state, in economic terms, should simply create a “perfect market” by forcing the beneficiaries of unemployment to pay for what they get from it. Of course that will never happen – profits uber alles!

Economics aside, what I can say with absolute certainty from my own experience is that welfare recipients have more than enough problems of their own without having to deal with the resentment and prejudice of ignorant people.

Breeding Welfare Scroungers…

One of the most popular welfare myths is that state welfare encourages people to have many children. The “logic” is that they are paid more welfare if they have more children so there is a “moral hazard” built into the system. This was part of the Daily Mail’s story on Philpott, and was also part of what was insinuated as a “lifestyle choice” by Osborne. Discussing Philpott with a friend, she looked at me (exasperated, as usual) and said (it wasn’t a question) “But why else would he have had so many children if not to claim the welfare benefits?” I have this sort of conversation far too often. The odd part is why people should think that this is the one explanation left over when all other candidates have been exhausted. The neighbourhood where I grew up was a government housing area with maybe a thousand families on welfare – I was one, and these are the people I went to school with. Nearly all families had between one and three children. I don’t recall a family with four or more (which is not to say that they did not exist). But I would say that the average was about two. (The number of parents might be more variable – marriage failure and economic insecurity are closely correlated). The Joseph Rowntree Foundation report above corroborates this in present day Britain. The number of children in welfare-receiving families doesn’t differ in any significant way from other families. The real question then is, if there is such a financial incentive for welfare recipients to breed, why are there not more children in welfare families than there are?

In fact, there is a case to be made that a stronger, more generous, social welfare state can reduce the chances of large families (both in and out of the welfare state). We know from studies of different cultures that the main reasons that people have very large families are to compensate for high mortality rates (from malnutrition and so forth) and in very financially insecure environments where parents rely on their children in old age. We also know that more unequal countries and countries with stingy state support tend to have higher rates of teenage pregnancy which, in turn, tends towards larger families. Today in Britain the government has proposed caps to welfare recipients so that they receive no more when they have more than a certain number of children. Using state welfare to shape people’s reproductive choices should make us all very nervous. The whiff of eugenics is deeply disturbing, and quite possibly the thin end of a very fat wedge intended to breed the poor out of existence. Caveat emptor.

Speaking Ill of the Dead

The Philpott story receded quickly, but only because the Tories got an even better opportunity to propagandise: the death last week of Margaret Thatcher. And no writing about welfare vilification and the political manipulation of the people is complete without a mention of her.

I spent (far too) much of the last week furiously arguing with people who claimed that negatively commenting on the legacy of Thatcher in the week of her death was distasteful and wicked, and that the spontaneous street parties and the campaign to top the music charts with that Judy Garland tune were the poorest of all possible forms. One should not speak ill of the dead. I have to disagree. The week has been spent by the Conservatives attempting to rewrite history, sanctifying and sanitising the memory of Thatcher’s legacy. In other words, they want to create a lie. And part of the reason for this is that they see themselves as the inheritors of her ideological project. They are right in that, of course (Blair was also in this lineage). But it is this that makes it wrong for them to try to suppress criticism of Thatcher’s legacy, even in its quirkiest manifestations. So let’s take a look at that legacy…

She was someone who was, by any honest account of public records, homophobic, racist, contemptuous of the unfortunate, an advocate of instigating war to deflect attention from home affairs, and a friend and admirer of a number of the world’s most brutal dictators. With her trans-atlantic partners-in-crime, she was the co-executor of what may be the largest process of social larceny in human history, transferring more wealth up the social ladder than ever before seen. Her economic policies stripped Britain of its public assets, brought about large-scale unemployment, and ultimately led to the financial mess that we face today (Will Hutton gives a good overview of her economic legacy here).

Apologists, of course, reject this, even if it is all on record. Some, for example, in the flurry of revisionism, have suggested that her friendship with Pinochet was a quid pro quo for his help with the Falklands. But her association with him starts well before and goes far beyond that. Pinochet came to power through a CIA-backed coup of September 11, 1973, that evicted the democratically elected Salvador Allende. This was a key stage in the neoliberal project that Thatcher was so central to. Pinochet’s regime marked the first large-scale experiment in free-market fundamentalism and involved the open complicity of many key figures of neoliberalism, including Milton Friedman and Friedrich von Hayek, who, like Thatcher later, openly praised Pinochet. This experiment proved conclusively that neoliberalism and liberty are in no way related, and that free-market capitalism is perfectly compatible with torture, rape, and murder – a lesson that I fear we have not learned thoroughly enough. Thatcher didn’t admire Pinochet (or Suharto, or Pol Pot,) despite what he was and did, but because of it. They were ideological kindred.

I attempted a Socratic thought-experiment with someone who was appalled at the street parties. I started with “If Hitler were to die today, would you not celebrate?” The experiment ended immediately with a barrage of “there’s no comparison between Hitler and Thatcher”. Actually, there is always a comparison – comparisons imply ranking, not equality. But never mind. My point was not that she was as bad as Hitler – she wasn’t – but rather to make the (what I thought was obvious) point that Hitler should not be the threshold of evil only beyond which criticism is valid. Had the experiment continued I would have moved down the scale through less evil men and women, trying to find the point where criticism becomes distasteful. Mussolini was arguably less evil than Hitler, for example, but I’d still think it appropriate to criticise him after death. Some of Thatcher’s buddies no doubt would cluster around the Mussolini-mark. And in a good-evil scale, say, Ghandi-to-Mussolini, I would hazard that the Iron Lady was closer to Mussolini than to the Mahatma.

But even if you buy into the whole “Thatcher-as-Saviour-of-Britain” line – and many do, despite the evidence to the contrary – who are you, or I, or anyone else, to decide how others should react to her death? No one can honestly deny that there are an extraordinary number of people who feel that Thatcher wronged them. I happen to agree with them: you might not. But this is neither here nor there. Only they can decide what response is appropriate. This coming week, Thatcher will be buried, and I fear that there may be violence. But maybe not. It is not for me to judge.

The press have been using the word “divisive” to describe Thatcher’s premiership. They mean that she was “controversial”. She was indeed that. But she was divisive in the other way too – she seeded division in a way that British society has yet to recover from. She was the classic “divide-and-conquer” leader, and a first class proponent of the Architecture of Resentment. Never one to let facts get in the way of a good story, Thatcher, like Cameron’s government today, was adept at vilifying the poor and those reliant on the State. Today, Thatcher’s legacy is an extreme politics contemptuous of evidence and powered by the open manipulation of people’s emotions. Speaking ill of the living is the stock trade of this government. In the face of this, we have a duty to speak ill of the dead: speaking ill of the dead is the beginning of an honest assessment of where we are and how we got here.

Athena and the New Versailles

April 4, 2012 1 comment

A few weeks ago I went to an interesting talk by author Nicholas Wapshott about his new book on Keynes and Hayek, the two economists who have shaped the dominant views on twentieth century economics. John Maynard Keynes secured his international reputation in the 1920s through the publication of his book The Economic Consequences of the Peace. After the First World War, representatives of the British, American, and French governments met in Versailles, just outside of Paris, with representatives of recently defeated Germany. There, they hammered out a treaty outlining reparations to those countries by Germany for the costs of the war. Keynes was a member of the British delegation and wrote his book based on his observations there. He walked away appalled by the terms of the treaty. It was these impressions that he outlined in great detail in his book. He made what was one of the most extraordinary predictions in modern history. The terms of the treaty would, he claimed, create extraordinary poverty, insecurity, and resentment in Germany. The resulting degree of desperation among the German people would make them deeply prone to the less than benign influence of ideologues and demagogues. And this would make a second great war all but inevitable within a short period after the first. Short of actually mentioning Hitler by name, Keynes was exactly right on every point. His prediction was maybe the single most spectacular, audacious, and important one made in the last century. And it has implications that we must take seriously today.

Wapshott, in his talk, vividly painted this picture of Keynes’s arrival onto the public scene. He then went on to make a very interesting point. There was, he claimed, a parallel between what happened after the Great War and what is currently happening now in Europe. Of course, now the shoe is on the other foot and it is Germany that is naming the conditions. In the place of post-war Germany we now have Greece which has been asked (if we can use that term) to accept extraordinary terms of austerity in exchange for a bailout package. This general theme has been on my mind for some time, and it is one that refuses to go away. This week I went to a talk by the renegade Australian economist Steve Keen who made the same point when asked what the options for Greece are: there was a serious risk, he said, that they might vote for a “man with a moustache”. The cradle of democracy is no stranger to dictatorship. Greece is not alone in this danger.

The secret of Keynes’s prediction is that he did what economists are generally loathed to do (and one reason why economic modelling so frequently proves inadequate or even harmful) – he took actual human behaviour into account. People who are afraid and insecure make poor choices and are prone to doctrines that offer quick and easy solutions. They are likely “to listen to ugly voices, and to use their votes and money to give these voices a political platform of increasing influence” (Standing, 2011, p. 1). The oft-quoted saying that those who trade security for freedom deserve and receive neither is too facile: some forms of security are essential if freedom is to exist at all. Desperate people behave irrationally. People who are divided economically can only be united by appeals to their worst natures – their pride, vanity, and prejudice. This is also the secret of social control through the commonly applied method of fear of the “other” (Communists, “Radical Islam”, Homosexuality, Atheism, and heretics). It is here that the apparent dichotomy between equality and freedom is shown so nakedly to be false. The puzzling and contrary shift to the political far right since the banking crisis must be understood in these terms.

It is a curious thing that the “rolling back of the state” by reducing the state’s welfare and regulatory capacities has also involved extending the state’s enforcement capacities. We saw this under Thatcher with the wholesale extension of CCTV coverage of London and around the UK, and the use of naked force against the unions. It is no surprise that the same US government that cut taxes for the wealthiest also introduced the euphemistically named “Patriot Act”. Today, Cameron’s austerity measures and rolling back of state welfare provision is accompanied by serious talk of internet and telephony surveillance and secret trials in the interests of state security. It is no secret that incarceration rates correlate directly to a weak welfare state, with the US leading the way and the UK taking the prize in Europe.

From time to time, in defence of Thatcherism, I am told that the UK was in terrible shape before she took hold of the country. No doubt this was true. It is also true that today’s woes in the UK are a direct “consequence of her peace” – her ideological platform and “solution” of deregulation and privatisation. Hitler achieved an extraordinary rejuvenation of the German economy. He also committed the greatest crimes that humanity has ever seen. The cure can be much worse than the disease. The libertarian stance of the likes of Hayek was that the state is inherently bad and any large state will inevitably lead to the loss of freedom and dictatorship. He used Nazism as the exemplar of this claim. But he mistook symptom for cause and derived exactly the wrong lesson. By defining liberty as absence of coercion libertarians come to the party far too late – this is why I identify freedom in opposition to domination which can be economic as much as anything else. Hitler certainly did use the state to effect great evil. But he could only do so because of the state of the German economy and the desperation of the German people, a direct result of punitive austerity which a healthier state could have avoided. Austerity in a time of depression is not only bad economics – it is bad politics. The big government / small government debate is and always has been entirely the wrong debate. The debate must be about good government / bad government and should talk about representativeness and accountability. Limiting the debate to a matter of size simply begs the question. A small strong state is not a good state. The economic functions of the state are no great threat to liberty – economic liberty is not liberty per se; it is often its worst enemy. But the enforcement function of the state surely is. Healthy public provision provides the weak with a defence both against the state and against the strong who might use the power of the state to harm them. Weakening such provision while strengthening the enforcement capacity of the state is not a recipe for liberty: it is an invitation for the “man with the moustache” to enter the scene.

So to check the score: Keynes – 1, Hayek – 0.

The liberty of the Germans died in Versailles, long before Hitler came to power. It is not yet too late for the rest of us, but we cannot take this for granted.

[Edit] Here is an interview with Steve Keen from late last year – very interesting.

References:

Standing, G. (2011). The Precariat: The New Dangerous Class. Bloomsbury Academic.

An Overview of my Argument

March 16, 2012 Leave a comment

I’ve been asked to do a short talk about the book I am writing so I thought this would be a good opportunity to provide a very high level outline of where I’m heading. I’d like to sketch out here in very broad brushstrokes an overall thesis, tying together some of things that have already been discussed here, and leaving for future posts the details of the remainder. Where I can, I will make links here to more detailed arguments that I have made in past posts. The remaining arguments will be regrettably brief but I will endeavour to flesh them as I progress with the book.

The case I am making is against the ideology known as “political libertarianism”. It is closely related to an economic doctrine called “neoliberalism” and the arguments I make will count against both. These doctrines are typical of the “new right” in politics, the motivations of people such as Reagan and Thatcher, but also in practice of the likes of Blair, Clinton, and Cameron. All of these have sought to “roll back the state” and to promote free market capitalism based on variations of these philosophies.

The libertarian argument is, very roughly:
1. Liberty is an absence of coercion, where coercion means physical force or the threat thereof. This is the so-called “negative” definition of liberty.
2. People have the right to liberty. Therefore the rights that people have are limited to protection against coercion. Coercion is only permissible in preventing coercion.
3. Private property can only be transferred between two parties voluntarily. This is mostly free exchange (in a market or otherwise), or in the form of gifts or bequests (e.g. inheritance). Any other mode of property transfer is coercive and therefore a violation of people’s rights.
4. The state should only involve itself in protecting people’s rights. Therefore, the state should limit itself primarily to protecting private property.
5. Taxation and the provision of welfare and services to the members a society is a violation of liberty because it requires taking resources from some to provide to others. Similarly, regulation of commerce, labour conditions, and so forth limit free exchange and, hence, liberty
6. Free market capitalism consists of voluntary exchanges, so a) the free market is the only valid manifestation of liberty and b) the state should support the free market.

In philosophical terms these claims are indefensible. In practical terms they are unsustainable.

Here, as briefly as possible, are the top-level philosophical objections.

The idea that liberty means non-coercion is simply too narrow and does not reflect any reasonable notion of what it means to be free. Freedom is not just something that individuals have. It is a function of the relationships between people in a shared real world. Libertarians conflate liberty with choice, or “revealed preferences”. But we cannot infer freedom from the fact that people choose between some options. People under dictatorships typically go along with it without struggle, and, in that sense, make choices within that context, but they cannot be said to be free. The nature of the options available to a person, and how they are shaped by the choices of others, is an important component of liberty. Arguing for freedom-as-choice, Robert Nozick was able to defend voluntary slavery as compatible with liberty. He could only do so by ignoring the likelihood that a person is very likely not free before they make such an appalling “choice”. A more plausible definition of liberty is “non-domination”. Domination implies that a person or group has significant control over the life options of others. I can dominate you and bend your will to my ends simply by having something you need. Coercion is simply the extreme point of domination and cannot exist without domination already being present. They need not resort to actual coercion to impose this control. People can be perfectly unfree before coercion need be employed (in fact, a recourse to actual coercion might point to imperfect domination). Our interaction with others is grounded in relative bargaining positions, often very asymmetrical, and it is here that we find the spectre of domination.

The idea of rights goes well beyond the prevention of coercion. Rights are social devices that protect us from “standard threats”.  The common right-wing view suggests that rights exist to protect us from the state. This is only half the story. Rights exist to mutually protect us from each other (including but in no way limited to the uses that some would put the state to). This extends the notion of rights well beyond simply preventing us from the coercion of the state. Bargaining asymmetries are an important site of standard threats and a variety of rights may be needed to effect protection.

The notion of private property, in the hands of libertarian thought, suffers from numerous problems. It is common for the ownership of property to be conflated with the ownership of one’s self – Nozick, for instance, segues between objecting to the redistribution of bodily organs, talents, and other personal attributes, to objecting to the redistribution of wealth and material goods. But the two are importantly distinct. Interfering with a person’s body and mind is a very different prospect to interfering with their property. Property ownership is a relationship to the external world. It is, importantly, a relationship between not just the owner and a thing but all people and a thing.

The property relationship is one of tyranny as much as it is one of freedom. A person’s property defines their own little dictatorship. It is a limit on the freedom of what everyone else in the world can do with that thing. It is not clear that any individual can or even should have such a unique control over any part of the external and shared world. We all need physical resources to pursue nearly all of our goals in life. Exclusive control of some resources that we can use to directly pursue our goals is thus an essential precondition to any reasonable notion of liberty. But property is also held that is not directly needed by a person. We live in a complex world where our goals can typically only be fulfilled by cooperating with others. So property can also be used as leverage against people who have the things or skills that we need to pursue our goals. Beyond that, it can simply be used as a coarser lever against others to bend to one’s will. It is here that the prime threat to liberty exists. The question is how much control over the resources needed by others is compatible with liberty.

Property exchange is both subject to, and heavily influenced by its outcomes, asymmetries of bargaining positions. It is not the only component of bargaining advantage but is surely the most important. Other components, like the very important informational advantage, and the ability to develop innate talents, are heavily influenced by property control. The relationship between property ownership and bargaining advantage is the primary contributor to the fact that property tends to concentrate in a small number of hands (anyone who can grasp compound interest can understand this, I think). It is simply not the case, as libertarians claim, that the transfer of property according to some “rules of the game” automatically produces just and fair results – the content of the rules matter very much.

Property rights are, on the whole, instrumental – they exist to serve other, more important, goals that we may have. Clearly they cannot protect these goals if the role of the state is limited to purely protecting existing property holdings. For property rights to be effective in asserting our liberty they must ensure that a) all people have some amount of guaranteed property, both for direct personal use and for exchange, and b) differentials in property ownership do not become so large as to create intolerable differences in bargaining relations. Property ownership, unchecked, contains both the seeds and the mechanism of domination. The protection of unlimited property accumulation is not a defence of liberty but a defence of power. Not only is the redistribution of wealth not necessarily a violation of liberty (or no worse than the violation inherent in defending property rights) – it is a necessary precondition to the preservation of it. Liberty and equality are not at all opposites as is often claimed.

In some cases it is preferable to protect more directly the things that people need rather than leave it to the indirect means of private property ownership and the markets. Provision of rights to health care and education fit this bill. Their contribution to bargaining positions makes it important to ensure that access to them is not subject to pre-existing bargaining advantages. The state has a clear role here that goes well beyond simply facilitating open markets.

Finally, the kinds of property that we permit in a society are important. In the not so distant past it was thought perfectly ok to own people as property. Laws in many parts still treat spouses as property in important ways. Today, the dominant form of productive ownership, the investor-owner share/stock model, is effectively the ownership of the productivity of workers (the argument on this is long, and for another day). This is no great advance on feudalism, and the arguments that defend it are flimsy to say the least. The resulting businesses look uncomfortably like authoritarian systems. They are also one of the greatest sources of compounding inequalities. A society built around worker-owned cooperative enterprises is a necessary step to fixing this.

So much for the philosophical case. What, then, of the practical objections? I can only discuss a couple of points here, but these are especially important.

It is orthodox in right-wing economics that market transactions capture everything of relevance to the world. This is patently false. Every transaction carries potential costs, risks, and benefits to people who are not involved in the transaction. Economists call these “externalities”, or third-party effects. Most discussion limits these to physical effects like pollution (and more recently, climate effects). These are very important and illuminate much in what is wrong with the property and market models. What is much less discussed is what I call “social externalities” – the side-effects of markets on people across a society. These include poverty, unemployment, crime, social instability and many other things. In an increasingly complex and interdependent world risks taken by some are leaked onto others who had no part in choosing them: risks are increasingly social. Growing inequality and, with it, growing disparities of bargaining positions have compounded the problem by making it much easier for powerful actors to shirk risk while retaining the profits (again, compounding their advantages). The banking crisis of 2008 is a dramatic example of this. Both redistribution (understood here not as welfare but as insurance) and regulation have crucial roles to play in this.

Closely related to this is the notion that private ownership ensures the best use and conservation of a resource – neoliberals would say “something that is owned by everyone is owned by no one”. This bears little scrutiny. Capitalism has an appalling track record of conservation and it can only get worse. Markets hold notoriously short-term and myopic views. An individual owning a rainforest will as soon sell or destroy it to make a profit and move on to some other profitable activity with the gains than preserve it for future use. Private ownership denies a voice to many interested parties (including the not yet existing parties of future generations). Self-interest, of the mythical “rational” type or otherwise, has little room for the consideration of others.

Markets may be blind to race, religion and gender (although this claim is much exaggerated – they are very much alive to wealth). But they are also blind to need. Market demand only recognises the presence of purchasing power, and gross inequality also means that the productive powers of a society are weighed heavily towards fulfilling the wants of the best off. The conservative argument is that the worse off benefit because the rich serve as “early adopters” and pay the price of research and so forth, paving the way to luxuries become available to the poor. This claim, like others, is greatly overstated and depends very much on the gap between the wealthy and the poor being reasonably close. (Never mind that it has been overwhelmingly the middle classes who have served this role in the last century). It also ensures that many of the things that poor need that already exist (like healthcare) are priced to suit the rich and kept out of reach of the poor. This has been even more evident in the inflation of house prices by wealthy “speculators” which did much to create the debt conditions leading to the “sub-prime crisis”, and the following financial crisis.

Finally, the overall structure of capitalism has no end-goal. It relies on perpetual growth and a form of economic obesity. Over the last two centuries we have moved from a producer economy to a consumer economy. The mechanism of capitalism has been useful in raising our capacities to meet our material needs. (The jury is out on whether this might have been achieved in other, better, and more sustainable ways). But having met those needs, and then some, the system, relying as it does on ensuring that investor/owners continue to profit, has come to depend on exponentially ever-growing consumption. We have gone from producing in order to consume to consuming in order to produce. While we adhere to a property system that insists that those with more than they need are richly rewarded for allowing the use of their excess wealth it cannot be otherwise. Rather than reap the rewards of improved productivity in better lives, we have sold (and have had to sell) those lives in exchange for things we simply do not need or even want. We have seen, in only a few decades, the growth of planned obsolescence, and increasingly short life-spans for products, along with the encroaching commodification of all aspects of life, from food preparation to the out-sourcing of the raising of our children.  At the same time we have seen the transformation from a public that saved to one that takes on personal debt in order to compete in the anti-social status consumption race, so much so that people are paying off their debts long after they have consumed their goods. This was also important in the lead-up to the banking crisis. The bailouts in 2008 have extended across generations and across all of society the indebtedness required to keep this system going. We work longer and harder than we used to and are, by most measures, less happy. The alternative – living good, sensible, fulfilling lives – cannot work because, to put it bluntly, if the “one percent” do not get their three percent per annum they will take their ball and go home, taking all of our social gains with them. Perhaps we should let them – this is a most sublime form of servitude. Libertarianism has no answer to these questions but goes a long way to explaining how we got here. The growth problem has profound implications for the way that we view society, property, employment, unemployment, the work ethic, and progress. These are just some of the vestigial ideas that past circumstances have left us with that we need to reconsider.

Or else.

Remember Remember the fifth of November

November 5, 2011 1 comment

Remember remember the fifth of November
Gunpowder, treason and plot.

I see no reason why gunpowder, treason
Should ever be forgot…

So the old poem goes. Tonight is Guy Fawkes Night in the UK, that peculiarly English commemoration of the failed attempt by said Mr Fawkes to blow up Parliament, an act of political terrorism celebrated by… well… blowing things up: the smell of gunpowder across London tonight will no doubt be thicker than Fawkes could ever have hoped for. I will most likely celebrate in my own quiet way by watching, yet again, the film V for Vendetta, that wonderfully dark cinematic poem, based on the graphic novel Alan Moore and David Lloyd, depicting the slippery path from Thatcherite neoconservatism to fascism.

The film made famous the Guy Fawkes mask, worn by the complicated hero of the film, and finally worn by the masses on the streets of London to symbolise their unity against their oppressive society. It should be no surprise therefore that the mask has found a new life in the global “Occupy” movement.

One could get the impression from the media that this movement is either about violent anarchy, or about lazy complaining people with nothing much to say. In London they are said to be defiling an important public site, and in other parts of the world they are simply engaging in pointless destruction of property and wasting the taxpayer’s money in policing and so forth.

The media is rarely an accurate measure of these things. I attended a trade union parade earlier this year. About half a million people were there. The bulk of the media presented this event as simply a bunch of overpaid and ungrateful public sector workers complaining about their overly-generous pension schemes, subsidised by the hard-working private sector workers who had even worse pension prospects. Of course, the march was nothing of the sort. Yes, public sector pensions were one of the issues they were protesting about. But only one of many. They were also raising their voices against the brutal slashing of important public services, inequity in incomes across society, the unaccountability of the financial sector to those who are carrying the cost of their bailout while the bankers continued to reward themselves more than generously, and so forth. I am not a union member, but I attended the rally because I share a concern with all of these issues.

A big issue of that day was the demand for the introduction of a Tobin Tax – the so called “Robin Hood tax”, which takes a tiny percentage on all financial transactions between banking groups. The intent of such a tax is to provide some compensation for “externalities” (or third-party effects – the effects on those not involved in the transactions), and to provide a (very, very small) disincentive to speculative trading, which feeds market volatility and carries significant destructive effects. Of course, this tax is now being openly promoted by leaders in the EU (under the name of the “financial transaction tax”), but the idea has been around for a very long time. The UK Conservative government has characteristically responded to the EU proposal by saying it is a good idea but they would only do it if everyone else did it too, which is simply a way of saying they have no intention of ever implementing it. Needless to say, the UK Conservative government didn’t respond at all to the same proposals made at the union rally. And the media, at the time of the rally, presented none of the true flavour of the day, preferring to portray it as just another whinge by the unions. Much the same is happening with the “Occupy” protests.

Interestingly, the Archbishop of Canterbury, a man who, regardless of your religious views, is often worth listening to, came out this week in favour of the Tobin tax, and suggested that the “Occupy” protesters would do well to articulate their demands more clearly. While his statement on the tax is welcome, one might wonder whether he would do even better to actually meet with the protesters and hear their concerns before he judged the adequacy of their articulation. Much has been made of the protesters defiling an “important” religious site in London (they are only next to St Paul’s because the law prohibits them from occupying the ground right next to it outside their intended target – the London Stock Exchange). But if one were to ask the question “what would Jesus do?” surely the answer would lie in the tents outside the church rather inside than in it.

Watching the BBC’s show “Question Time” over the last few weeks has been both interesting and frustrating. For those not familiar with the show, this is a weekly show featuring a panel of politicians and political commentators that respond to questions from a studio audience. One panellist voiced the view that the protestors were just the children of the bankers who they professed to oppose. The clear response to my mind is “so what?” The greatest moral progressions of the last few centuries have come about when children explicitly rejected the morality of their parents. How else could we ever hope to reduce racism, sexism, and bigotry of all kinds? Family is, after all, the great transmitter of prejudice. Another panellist complained that the protestors went home at night to their comfortable homes. Again, so what? Is exposing oneself to pneumonia a necessary precondition of political protest? Must the protestor suffer to make a point? Yet another panellist, describing the protesters as being “anti-capitalists”, observed that some protestors were drinking Starbucks coffee or using Apple notebooks. But the blanket term “anti-capitalist”, like most “anti-whatever” labels, is all too often used to silence discussion and debate and impose a hegemonic viewpoint. These protestors are not, on the whole, against capitalism per se – they are opposed to the balance between capitalism (and markets) and the other dimensions of society.

So we may suspect that the media is not really doing their utmost to connect the “Occupy” protestors with the general public and present a fair and balanced view.

Karl Marx believed that the downtrodden of the world would recognise their common plight and unify in solidarity to overthrow their oppressors. Marx was right about many things, and wrong about many others. Of the things he got wrong, this is perhaps the greatest. It is the easiest thing in the world to pit the weak against the weak, and the hardest thing for them to find common cause. Throughout this current time of great uncertainty, the story has been one of divisiveness. Public sector workers are pitted against private sector workers; local-born against immigrants; old versus young; protestors versus non-protestors, even though, if the cases were properly articulated it would be found that they share much the same concerns. Markets thrive on such divisions. Those with common cause are orchestrated to compete with each other for jobs rather than cooperate to find more effective solutions.

William Gibson, in a beautiful phrase in his book Spook Country, described the people of the United States during the reign of George W. Bush to be in a state of Stockholm-Syndrome with their government. Their fear of terrorism led them to sympathise with those who would take away their freedoms. Something like this is happening now: fear and uncertainty divide those with common cause and place them in opposition to each other as they fight for scraps. Labour Unions are often accused of blackmailing society. But in the last few years we have experienced what is effectively a strike of Capital, without anything like such commentary. The politicians, fearing capital flight, are in their own state of Stockholm-Syndrome with their captors and funders. We happily attach onerous conditions to welfare for the poor (one must not riot, one must take any job no matter how awful or intrusive, etc), but the corporate welfare of bailouts has been meted out without any such conditionality. It is quite extraordinary, and a sign of how deeply we are caught in our traps, our fear and our insecurity, that so few people have in fact taken to the streets.

What, then, of democracy? Democracy, that place where citizens meet as equals and deliberate in the search for common and agreeable solutions, is needed more desperately now than ever. As Gandhi said of western civilisation, it would be a very good idea. There was a brief moment this week in Greece where it seemed that the home of democracy would exercise that principal, but in the end market pressures prevailed and the people were denied their voice. It was a parable for the greater problem of the Eurozone – the excess of market power combined with the lack of democratic accountability. Free markets and democracy are, as some like John Gray have noted, rival systems.

So today, on the day commemorating Guy Fawkes, I will not be advocating the destruction of the Houses of Parliament. I will, however, suggest that it is high time that these buildings are put to their proper use in the service of a truer democracy. Would that tonight the streets of London, of New York, of Oakland, and in every other city, be filled with the face of Guy Fawkes, and behind each mask a person demanding a fairer, more democratic, society. To quote V: “People should not be afraid of their governments. Governments should be afraid of their people.”

The Quiet Riot

August 20, 2011 1 comment

In recent weeks the riots in the UK have marked the ultimate triumph of Thatcherism – the complete absence of Society. The riots were not so much the breakdown of a society, but rather the obituary to a society that has already passed on. Behind the enticing byline that these riots have divided Britain lies the truth that these were the consequence of a society already divided.

When the Lady issued her famous edict that there is no such thing as society she had already set about making it so. Her work was continued in Reaganism, Blairism, Clintonism, and Bushism. The results are now clear for all to see. Of course, when declaring this mysterious absence, she meant nothing more than that the wealthy had no obligations to anyone, and began dismantling any social infrastructure that inferred that they might – progressive taxation, shared infrastructure (shared anything, in fact), protective worker regulation and all that. This, the barefaced manifestation of pure Libertarianism, is, of course, a deep betrayal of its Lockean roots but is entirely consistent with its modern version a la Hayek, Nozick, and Friedman. Curiously at the same time that this dismantling of Society was beginning we can see the birth of the notion of the obligation to the shareholder – the responsibility, as it were, to the rich. This new responsibility operates at the legal and the social levels, and was again writ large in government policy from taxation to welfare. So a horizontal set of mutual obligations, assuring the good of the weak against the strong, were replaced with a responsibility pointing upwards only, protecting the strong against the weak. The wealthy were no longer burdened with the costs of the social externalities that their activities create, and the plight of the worker, thrown into a sea of insecurity designed to maximise investment returns, was of no concern. This is not a local problem, nor is it one that we have moved beyond – for example, recent discussions in the US have the Right telling us to use the words “job-creator” instead of “the rich”, the lie being evident in the predictable rise in stock prices whenever job-cuts are announced. Ownership of work by the minority holders of wealth, with the expectation of ever-increasing returns, is by no means automatically compatible with job-creation (or stability or, for that matter, democracy).

The battle has begun to explain the causes of the riots. Some in the UK Conservative party (and, perhaps surprisingly since he should know better, some like Vince Cable) have declared that the riots are not socio-economic in origin. Cameron has explicitly stated that they were not about the economy or about poverty. Others have more plausibly suggested that they might be. Cameron has rightly declared that Society is “sick”, but appears to have little insight into the nature of the ailment. Rather, he suggests that parts of society are sick, which is a little like saying that my stomach is cancerous but on the whole I am quite well thank you very much. Today he orders a review to “fix society”. We might remain skeptical. He has, to date, failed to notice that his “Big Society” (remarkably similar in practice to Maggie’s “no such thing”) requires the pre-existence of a Society per se.

So were the riots socio-economic in nature, or just socio-, or just -economic, or none-of-the-above? Were they individual or structural in nature? We separate these things too quickly, and the hunger for a simple explanation, preferably with an identifiable villain, is all but irresistable. Orwell weeps. But we can at least look at the kind of questions that are currently floating about.

Let’s get the absurd out of the way. Did media-technology cause the riots? Of course not. They may have facilitated in spreading an idea quickly, but so what? It is the idea that is important – the media was not the message. We should be deeply concerned about the state of our Society when many thousands of people, with nothing in common but their socio-economic class, saw so little of value in the dominant value-system; they saw no immediate problem in their actions, and indeed couldn’t relate social values in any way to their acts. This was not a few isolated people, nor was it an organised group – this was a relatively spontaneous set of happenings across a large set of cities and towns. This was a festering problem that manifested itself in the way that it did because of what we have become. This is what the absence of Society – the absence of inclusive social bonds that all can buy into and benefit from – looks like. This is the true face of Libertarianism.

Another absurdity. Was this, as the dubious Libyans would have us believe, the righteous rise of the people against power, the British “Spring”? Not consciously. Nor was it like the Greek riots whose objections were relatively clear. If anything it was more like the quite mindless lashing out of an abused child whose life has conditioned him to behave appallingly. But the powers-that-be would be fools to ignore the message in here, and greater fools to misrepresent it as the misbehaviour of an errant few. More than ever, Power needs to listen carefully, and to do so without lazily reflecting on the superficial alone.

What, then, of the more promising questions? Was it a failure of parenting? Sure it was. But good parenting requires a sufficient social grounding and reflects social reality. How can someone make a good parent if they have not received a decent education? Or if they have to work several minimum-wage jobs just to make ends meet, ensuring that they are never there for their children, even if they do manage to bring in enough for food and shelter. How can marital unity be expected to survive the most intense economic pressures? How can we square the round peg of responsible parenting with the fact that the options for many are either to provide the material means for family at the expense of being absent from their childrens’ lives, or to be with their children in stigmatized and demoralised circumstances? Some heroically manage, to be sure, as has been endlessly pointed out. But they do so against the odds, and there is little in our current social arrangements to improve these odds.

Was it a failure of education? Definitely. What else should we expect when quality schools are increasingly funded according to ability to pay, ensuring that those who need it most get it least.

Was it a failure in employment? By all means. People in secure and gainful employment tend not to riot. But when the fickle moods of the holders of wealth control job prospects, and when economic growth based on ever-increasing competitive consumption is the mantra, we have no sound basis for meaningful and secure work.

Was it a failure of morality? Absolutely. But therein lies the rub. When there is no such thing as Society we cannot expect a social morality to exist. We cannot expect people to observe the sanctity of property if there is no reasonable social mechanism for such people to become a part of that structure. Why would they respect social norms when social norms so obviously exclude them? By no means can we expect property to evoke respect when the next few generations will be parting with their own property to pay debts brought about by the good times of those who have preached “responsibility”. A social morality built on subservience to capital (never better exhibited than in 2008) is no social morality at all. And the lesson that bad deeds are rewarded if you are of the right class only takes us further down the spiral.

The rioters acted selfishly. In that sense, they behaved in exact accordance with the dominant morality of our day – the pursuit of self-interest. To be sure, as many neolibs and neocons delight to point out, self-interest is not the same thing as selfishness. They also love to talk about the “invisible-hand” – that mythical belief that good things spontaneously come about from the aggregate effects of individuals pursuing their own individual wants. But that is, at most, telling half the story. Invisible-hand effects (that is to say, unintended aggregate effects) also include the negative – climate change, unemployment, poverty, crime, and – yes – selfishness. When the social structure is inherently insecure and ruthless and competition is the norm then amplified selfishness is the inevitable result. Insecurity breeds the hoarding mentality – enough is never enough – , and, at its worst, the smash-and-grab mentality, no less so in the corporate politics of hostile takeovers and wage- and worker-cuts than in the grimy reality of the burned-down suburbs of London with its smashed windows and looted goods.

Mr Cameron wants to heal “Broken Britain”. But he must first move beyond the symptoms and discover the disease, a cancer that both major parties have contributed to in recent decades. He must not be allowed to shirk the question of the correlation between the areas where rioting was most intense and those that have received harsh spending cuts in order to pay for the misdemeanors of the banking class (the fiscal and social costs of which dwarf that of the riots).

Mr Cameron, the champion of “choice” and spontaneous voluntarism, got a dose of what spontaneity and choice can look like if the background context is ignored. The challenge for him, if he has the courage to face it, is to understand the role that government can have in favourably shaping that context. The neoliberal minimal-state is certainly too weak a conception for this task, and is, in any case, entirely the wrong shape. Cameron’s own version of the minimal-state, “The Big Society”, looks very much like newspeak for the continued opting-out of the wealthy from Society (with, of course, the understanding that they can be bailed out of their troubles), a continuation of the Thatcherite project. “Voluntarism” under this aspect will be whatever those with the means decide it to be, a modern version of noblesse oblige, and entirely inadequate. That has to change. At the very least the State needs to mitigate social externalities, and, where this is not possible, to act as a clearing house for settling those social debts to those who bear the costs. But it can and should do a whole lot more to stimulate equity and opportunity. Life is not a game, and society should not have winners and losers.

So should we, like the underclasses of England, go out and loot, steal, and destroy? No. But nor should we do nothing. There are definitely things that need to be destroyed, but they lie in the minds of people and not in the shop windows of the High-Street. We need a “Quiet Riot” in which we relentlessly challenge the notions and outcomes of the last three decades at every level. We must refuse to accept embedded class-based privilege, and construct our Societies on a basis of mutuality, inclusivity, and respect rather than on the impoverished notions of pure self-interest and the mythologies that have allowed inequity to reign. We can no longer afford to mindlessly accept the belief that what is good for the rich is good for everyone. We must go even further and seek to prevent what is bad for the wealthy being even worse for everyone else, as the banking crisis has made oh-so-clear. Debates on the weight of social benefits and burden need to move beyond the petty caricatures equating fairness to comparative tax rates or absolute amounts of money, and focus on the sharp and brutal distinction between the receipt of transitory or fragile benefits by the poor and the middling versus that of permanent benefits by the priviliged that ossify their positions of power. We need to talk about the breadth, depth, and spread of opportunity. We need to talk about the social costs of exponential consumption and the diminished returns from economic growth. We need to talk about the institutional foundations of our Societies and ask whether they promote a capability set on which people can exist harmoniously with others and on which good lives can be built. We need to look at ways to supplement and supercede self-interest with a broader view of common-interest. A precondition for this is the reduction of the empathic gap between the haves and the have-nots. And that must start by both reducing the opportunity gap and the wealth gaps that perpetuates it.

There is much to do and much to talk about, and there is urgency. The time for the Quiet Riot is now.

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