The last bonus

We are repeatedly told that those who run banks and other great enterprises require to be paid enormously because their jobs are so tremendously demanding and those who can do them are so few. I suspect that there are actually quite a number of people who could do them, and the evidence suggests that both the CEOs and the star traders often fail to perform above chance and that they can commit egregious errors, even when warned of their possibility.

Yet to pay such individuals truly exceptional amounts of money helps create the impression, to the impressionable, that they are truly, almost Platonically, exceptional people. For the rest of us, to fall in with this view of the world and to give the idea that we are all to be placed into the positions for which we are pre-eminently fitted, there has been created the panoply of ever-expanding competitive formal qualifications. In education and training, as in the economy, ranking and rating supplant judgement. Such a system favours those who can operate it, either as candidates or providers (witness the recent fuss here about our now privatised secondary education examining boards training teachers how to get the best out of their systems), but, beneath it, privilege and favouritism persist.

This is the new 'world-class' status to which we must all aspire (or, in the case of many labourers in the vineyard, sink) lest we perish. The result, amongst the people generally, is to detroy the hope of good fortune (a necessary element of social content always), the belief in an accommodating society (it is no accident that it is in supposedly meritocratic societies that social mobility has declined), and the faith in the nation as a legitimate and effective expression of collective choice (as para-governmental international agencies and trans-national corporations increasingly dictate terms to states). Across Europe the extremist tendencies flex their muscles in dark and disreputable corners, and Molotov cocktails are a growth industry.

Lookout

I hope people anxious to understand what is going on day by day in the economy and the 'markets' and how to interpret their newspaper headlines (UK "bank shares rally", "US stocks soare,") are following golem XIV thoughts, the insider's outsider.

Memo to PM

"...the look of many city centres has improved beyond all recognition as a direct result of urban regeneration policies. Yet it still only takes five minutes to walk from the sparkling Liverpool One shopping complex to the first block of boarded-up flats. The shopping centre provides low-paying jobs in an environment that encourages high spending, and does nothing to stimulate the local economies of nearby areas.

"We can't ignore what geographers such as Danny Dorling have been stating for years. Polarisation between rich and poor areas, as much as between rich and poor people, has been increasing since the 70s, in large part because regeneration projects have not been able to make good the simple fact that wages and employment prospects at the bottom have collapsed while those at the top have gone through the roof."

As I walk through the streets and parks of poor areas of London I can only feel that their state betokens a kind of contempt among the 'enabled' classes for their residents, and that  the rescuing of these environments must be beyond their residents' capacities. I can only wonder what they feel when they travel to the well manicured environs of Kensington or Notting Hill.

L'affaire RM

"I'm not throwing innocent people under the bus" I might get my phone hacked.

Appropriately for the empire of a man whose empire sought to cow and suborn politicians, so much about the creaking News Corporation echoes the highest levels of political dynamics. It is a nice irony that 7 per cent of a company that depends for its generation of cash on the manipulation of popular sentiment is owned by the Sovereign Wealth Fund of the Saudi government, better known for its sympathy with money than its sympathy with people. Another bit is owned by our Church Commissioners (for the time being).

It is instructive to see how rapidly corrupt bedfellows in the murkier chambers of power can fall out. Politicians are now tumbling over themselves to snatch their underclothes back on, and even the Metropolitan Police seems (heavy emphasis needed there) to be rediscovering its public duty. Is there a lesson here for international bank executives?

And in the US ‘experts’ are covering the situation with their usual perspicacity. It's all about ensuring a smooth take-over of control by James. "It is a problem for succession. That is the key issue in the US, not the ins and outs of who hacked whom over in England," said Jack Lule, a journalism professor at Lehigh University. Presumably his equivalent banking professor was saying “The key issue is who gets to be the next CEO of Goldman Sachs, not who lent what to unemployed rednecks to buy their collapsing shacks.”

The famed ‘establishment hating’ intimate of prime ministers, as he flits from here to there in helicopter, private jet, yacht or chauffeur driven car, is as out of touch with mundanity as fin de régime Tony Blair (who, it is revealed through a Freedom of Information request, telephoned him on 11th, 13th and 19th March 2003 before troops went into Iraq on the 20th; Mrs T could draw a discreeter veil and, apparently, not mention the patriarch even once in her memoirs). The great man is reported as saying, "I'm not throwing innocent people under the bus." Does he recall that image of the London bus with its roof blown off or even know that his journalists hacked survivors’ phones?

New found land

Talking to the New Labour think tank Progress Tony Blair argued that Labour should make the economy its priority: “I still think we need to focus a lot on the micro side: targeted policies that support business, jobs, that allow that large amount of cumulative reserves in business to be invested and that also gives us an opportunity to regain, which I think is very important to us, our relationship with business.”

The recognition that, at a time (at least in the UK) of continuing recession, business sits upon a ‘large amount of cumulative reserves’ is not new, but the idea that government needs to bring about detailed measures that will ‘allow’ business to invest those reserves, that our present structures and arrangements do not provide the opportunities for such private business investment, is something that might find common ground with our coalition government’s programme of reshaping, and shrinking, the state.

As Tony Blair says, “In the real world of the 21st century there will be some pick and mix of policy. Sometimes it will be less left v right than right v wrong. Above all today, efficacy – effective delivery…”

It always seemed to me that Tony Blair would see no essential difference between governing the country and managing Tesco. For New Labour to command the brand loyalty of Tesco might seem his ideal – and political loyalty cards might not be a bad idea either. Yet I believe much harm has been done by the now almost universal political lip service to the ‘middle ground’, that territorial discovery of Tony Blair’s, who then set about the ruthless extirpation of its aboriginal inhabitants. There needs to be a recognition that a society, and its organisation, does inevitably contain conflicting interests and that it is the task of government to construct a recognised and broadly acceptable balance of those interests.

Instead we now have the pretence that all our interests coincide, that ‘we are all in this together’, and that any discussion of competing claims or modes of organisation is mere residual tribalism interfering with ‘effective delivery’. So bring on ‘reform’ of public services (“motivated of course by values” as Tony Blair quickly parenthesises). Along with this goes an anodyne invocation of ‘fairness’ as the ultimate arbiter of all political choices, as if every measure were somehow vaguely and morally unquestionable. Even corporation tax rates can be set by ‘fairness’: we must be fair to consumers, tax-payers, businesses – to anyone or anything you care to mention.

Just like Tesco, fair to suppliers (don’t they want to sell?), and fair to customers (don’t they want to buy?). Or like News Corporation, so sure of what the public wants; so sure of its mission to construct the new society, safe from hypocrites and perverts.

Given that the News Corporation interest is primarily in making money rather than in nurturing the continuing health of its particular newspaper imprints, one wonders how those in command could have been so stupid as to imagine that they could continue to get away with, not just the scale of illegality at one or more of its papers, but with its sheer nastiness. How could they think that they could go on indefinitely blankly facing down every new revelation? The answer probably lies in the arrogance born of power (it conforms to a type seen presently in several areas of international politicking). Such arrogance was bolstered by the cravenness of our politicians who believed that the popular press could deliver that hallowed (and hollow) ‘middle ground’ to them. Did not those papers demonstrate, day after day, how firmly they had their thumbs on the popular pulse? Efficacy, thy name is Murdoch.

"Globalisation's pull" - or push?

Writing in the New York Times ‘Intelligence’ column, under this title, Roger Cohen argues that ‘more globalisation is coming, whatever the reactions against it’, including those arising from the persistence of the ‘virulent’ nation state.

He cites the very recent suggestion by Jean-Claude Trichet, president of the European central bank, that there will be, in the foreseeable, if not quantifiable, future a European finance ministry empowered to set economic and fiscal policy in the seventeen eurozone states. To describe this, as he does, as a ‘radical’ proposal is to ignore its congruence with a long history of the gradual usurpation of formerly national powers by the EU. He is right to say that the euro was a ‘political project’ aiming to take Europe ‘a step closer to a United States of Europe’, but those propelling such projects have always misjudged their strategy, ignoring the extent to which such covert moves would stoke up resentment at the ‘democratic deficit’ at the heart of the EU and bolster nationalistic sentiments.

Whatever the logic of a European finance ministry to make sense of monetary union, there would seem to be no foreseeable chance of its making headway against not only popular but also governmental resistance. Indeed the tendency would seem to be towards the unravelling rather than the consolidation of monetary union in the EU. How many ‘peripheral’ countries now privately regret not having stood outside the euro like Britain?

Some observers would disagree with Roger Cohen and see the forces of globalisation as more of a virus than those of the nation state – in the speed and covertness with which it has spread, in the damage it has inflicted upon the host body, and in its immunity to antibiotics.

To argue, as he does, that the popular uprisings against corrupt governments in the middle east represent a ‘globalised’ popular sentiment against strictly ‘national’ corruption is surely stretching his thesis to breaking point. The popular movements may have been emboldened by successful uprisings in neighbouring countries, but they do not seem to have seen themselves as having a transnational identity. The idea of pan-Arabism was something fostered by autocrats, whilst they not only bolstered their personal control of the nation’s people and resources, in defiance of nationally accountable institutions, but personally profited to huge and corrupt extent, with the willing collaboration of foreign powers (mainly western democracies), global corporations and finance houses. It was not the people of Saudi Arabia who benefited from the financial ‘arrangements’ with BAE Systems, so nimbly protected from legal scrutiny by Tony Blair.

Most of the popularly driven national political developments in recent decades have been against the tide of supra-national consolidation, towards more ‘national’ states that their peoples feel can be made more answerable to their will and wishes, or that are simply less sclerotic as social organisations – in the UK, the Soviet Union, the former Yugoslavia, Czechoslovakia, the Sudan, and China itself not immune.

Globalising institutions are of course different beasts to supra-national states, but ultimately they may answer to the same popular demands. Ultimately all systems have to manipulate people. The supranational powers of the IMF, the WTO and even the EU, and the like, have been won covertly without popular consent or even sometimes awareness. They are usually strongly allied in their interests with globalised trade and finance – and so we return to Greece and the eurozone. In many cases these interests and institutions are coming under severe strain from diverging individual national interests, governmental as well as popular and political elites will at some point recognise that their interests do not for ever coincide with those of financial elites.

Finally, I would agree with Roger Cohen that the universal appette for the fruits of technology does promote globalisation, although the picture chosen (perhaps not by him) to illustrate his article, of two women on Segways passing a protest camp in Madrid, is to me suggestive of the thought that such appetite may at some point come to seem relatively feeble.

Wheelbarrow

A world at financial war

The scale of the struggle between irreconcilable economic interests and the extent to which the outcome will reshape our societies seems to be very imperfectly understood. I recommend this article by Michael Hudson.

"... the financial sector will proceed with buyouts and foreclosures until it possesses all the assets in the world, all the hitherto public assets, corporate assets and those of individuals and partnerships."

Super good faith

Legal injunctions prohibiting the publication of information about the supposedly private lives of famous people enjoying seven figure remuneration, such as bankers and football stars, have recently been defied by postings on Twitter and the internet.

(American banks tend to call it not 'remuneration' but 'compensation', and it normally comes in 'packages' - compensation for what private loss, one wonders - in this country bank compensation more normally means payments to depositors in failed banks.)

To return to the defiance of injunctions: ‘Lord Judge said he believed that ways would be found to curtail the "misuse of modern technology", in the same way that those involved with online child pornography were pursued by the police. "Are you really going to say that someone who has a true claim for protection perfectly well made has to be at the mercy of modern technology?" he asked.’

Our culture secretary, the celebrated Jeremy Hunt, accused Twitter of 'making an ass of the law'. It was of course Charles Dickens in Oliver Twist who famously yoked together the law and an ass, when he had Mr Bumble observe that if 'the law supposes that your wife acts under your direction' then 'if the law supposes that ... the law is a ass'. Well, Mr Hunt is only our government minster responsible for culture, but had he been a little more familiar with his Dickens he might have concluded that the law is not being made an ass now, but is already an ass for supposing that Twitter will act under his or its direction.

Abhorrent though the activities of paedophiles are, there is something deeply disturbing about the almost unrestricted panoply of official investigation, restrictions, and surveillance, and public demonization being applied to the internet pedlars of inconvenient or even false information. Lord Judge’s sentiment may be laudable, but his proposal presages a new apparatus of official control whose application will outrun the avowed intentions of those who introduce it, and will include no protection for the unprivileged from 'the proud man's contumely ... the law's delay, the insolence of office'.

‘The report also says that media reports of comments made in parliament which set out to contravene injunctions may be in contempt of court. Reports of statements in the Commons and Lords are only protected by parliamentary privilege if they are published "in good faith and without malice".’

War is the health of the state

'It cannot be too firmly realized that war is a function of States and not of nations, indeed that it is the chief function of States. War is a very artificial thing. It is not the naïve spontaneous outburst of herd pugnacity; it is no more primary than is formal religion. War cannot exist without a military establishment, and a military establishment cannot exist without a State organization. War has an immemorial tradition and heredity only because the State has a long tradition and heredity. But they are inseparably and functionally joined. We cannot crusade against war without crusading implicitly against the State. And we cannot expect, or take measures to ensure, that this war is a war to end war, unless at the same time we take measures to end the State in its traditional form. The State is not the nation, and the State can be modified and even abolished in its present form, without harming the nation. On the contrary, with the passing of the dominance of the State, the genuine life-enhancing forces of the nation will be liberated. If the State’s chief function is war, then the State must suck out of the nation a large part of its energy for its purely sterile purposes of defense and aggression.
...
'What is the State essentially? The more closely we examine it, the more mystical and personal it becomes. On the Nation we can put our hand as a definite social group, with attitudes and qualities exact enough to mean something. On the Government we can put our hand as a certain organization of ruling functions, the machinery of lawmaking and law-enforcing. The Administration is a recognizable group of political functionaries, temporarily in charge of the government. But the State stands as an idea behind them all, eternal, sanctified, and from it Government and Administration conceive themselves to have the breath of life. Even the nation, especially in times of war — or at least, its significant classes — considers that it derives its authority and its purpose from the idea of the State.
...
'Nothing is more obvious, however, than that every one of us comes into society as into something in whose creation we had not the slightest hand. We have not even the advantage, like those little unborn souls in The Blue Bird, of consciousness before we take up our careers on earth. By the time we find ourselves here we are caught in a network of customs and attitudes, the major directions of our desires and interests have been stamped on our minds, and by the time we have emerged from tutelage and reached the years of discretion when we might conceivably throw our influence to the reshaping of social institutions, most of us have been so molded into the society and class we live in that we are scarcely aware of any distinction between ourselves as judging, desiring individuals and our social environment. We have been kneaded so successfully that we approve of what our society approves, desire what our society desires, and add to the group our own passionate inertia against change, against the effort of reason, and the adventure of beauty.

'Every one of us, without exception, is born into a society that is given, just as the fauna and flora of our environment are given. Society and its institutions are, to the individual who enters it, as much naturalistic phenomena as is the weather itself. There is, therefore, no natural sanctity in the State any more than there is in the weather. We may bow down before it, just as our ancestors bowed before the sun and moon, but it is only because something in us unregenerate finds satisfaction in such an attitude, not because there is anything inherently reverential in the institution worshiped. Once the State has begun to function, and a large class finds its interest and its expression of power in maintaining the State, this ruling class may compel obedience from any uninterested minority. The State thus becomes an instrument by which the power of the whole herd is wielded for the benefit of a class. The rulers soon learn to capitalize the reverence which the State produces in the majority, and turn it into a general resistance toward a lessening of their privileges. The sanctity of the State becomes identified with the sanctity of the ruling class, and the latter are permitted to remain in power under the impression that in obeying and serving them, we are obeying and serving society, the nation, the great collectivity of all of us. . . . '

War is the health of the state

RANDOLPH BOURNE 1918

A modest proposal

An article in one of our ‘serious’ newspapers, the Daily Telegraph, in the past few days has apparently proposed that voting in national elections here should be restricted to those who pay a minimum level of income tax. In that way voting would be confined to those who actually ‘make a contribution’ to society. How, other than financially, could anyone contribute to society?

Progressive though this suggestion is as a welcome partial re-introduction of the property qualification which we somehow lost in the nineteenth century, I have a much better one. Voting eligibility should be maintained as it now is, but all votes should be weighted according to the positive or negative contribution by the voter to the national exchequer. So the vote of someone who paid, for example, £50,000 income tax in the preceding year, would count as fifty positive votes, whilst that of someone who received £2000 in state benefits would count as two negative votes.

This idea has many advantages. It preserves the strangely hallowed twentieth-century shibboleth of ‘universal suffrage’. It reflects precisely the voter’s contribution to society across the entire range. It penalises tax exiles. It gives an incentive to governments both to increase marginal rates of taxation and to maintain state benefits for the poor: that would make mine truly a ‘one nation’ proposal, very likely to appeal to a Daily Mail readership, let alone the Daily Telegraph.

(I should explain for my North American readers that ‘one nation’, though always without the suffix ‘under god’, is a term that historically resonates in my country also, usually attached to our ‘natural party of government’ as ‘one-nation conservatism’, as embraced originally by Benjamin Disraeli, novelist and Queen Victoria’s favourite prime minister 1868 and 1874-1880, as opposed to that dreadfully hectoring Liberal, William Gladstone. Could this nation today choose so conspicuously Jewish a figure as Disraeli as Prime Minister, or indeed so stern a moralist as Gladstone?)

Finally, my proposal has also the indirect advantage of surely bringing about a massive boost in tax receipts in the year preceding an election, to be emphatically utilised by the incumbent party to dispense largesse to the voters, and vice versa.

I rest my case.

For the avoidance of doubt, as they say, I should perhaps point out that this post takes its title from Jonathan Swift's 'Modest Proposal...' and the whole thing is intended ironically. Except, that is, for the reflections on prime ministers, where I do think that the Victorians, whom we tend to regard as somewhat hidebound and prejudiced, were perhaps more tolerant and publicly adventurous than we are today. Or maybe they were just tolerant of different things.