Friday, 24 April 2015

So You Want To Be a Rock 'n' Roll Star?

One of the odder features of this general election is that Ed Miliband may be the only party leader who actually wants to be Prime Minister. While there is still an element of "Go, nerd!" about it, the milifandom meme works because of his evident appetite for a role that other party leaders seem to be lukewarm about at best or disdain at worst. This could be simple naivety on his part, but I think it chimes with a popular assumption that candidates for Number 10 should at least display determination, which perhaps explains why Boris Johnson is now being wheeled out on the national stage. I always thought the Tories were making a mistake in caricaturing Miliband as Wallace, given that the stop-motion icon is an epitome of decency whose busy projects are well-meaning and human-scale. If the Labour leader had invested in a beagle five years ago, he'd surely be miles ahead in the popularity stakes now.

Cameron has already confirmed that he'll stand down as PM before the end of the next Parliament, if successful, without ever having convinced us that he really wanted the job in the first place (if Johnson consciously echoes Churchill, Cameron unconsciously echoes Halifax). He has always come across as someone who regarded it as an entitlement, rather than an achievement, with the inevitable result that his premiership has been marked by little principle and much opportunism, from the flip-flop on economic policy to the serial exploitation of Scotland. One of the unintended consequences of the resurrection of John Major this week was to remind us that the last Tory party leader to win an outright majority never gave in to the eurosceptic "bastards", whereas Cameron has conceded a referendum on the EU that will likely split the party in two, whatever the outcome.

I suspect the judgement of history will be that Cameron marked the decadence of the modern Conservative Party - i.e. the electoral legacy of Churchill and Macmillan. Though Thatcher is considered a "clean-break" by both supporters and critics, she was a traditionalist whose impact owed much to timing and her inability to imagine the consequences of globalisation and the resurgence of finance capital. Her admiration of Hayek and Friedman was philosophical, not technocratic ("economics is the method, the object is to change the soul"), which explained her romantic sympathy for her patrician predecessors and her dislike of Ted Heath. If Major marked an attempt by the Tories to reconnect with their inner Macmillan, he also revealed the impossibility of such nostalgia as the party started to fray under the social and economic tensions of the era, from sleaze to the ERM. The Cameron re-brand has been marked by one defeat after another, but none of them decisive: the waste of economic stagnation, marginalisation in Europe, the failure of deficit reduction. Same-sex marriage (trivial in historic terms, if you compare its impact to divorce or abortion) will probably be his only memorable achievement.

Nick Clegg long ago gave up even the pretence of presenting himself as a clean-cut alternative PM, instead trying to recast the LibDems as the domestic political equivalent of the UN Blue Berets: a higher form of civilisation trying to pacify the antagonistic locals. This reveals the de haut en bas worldview of establishment liberals that is normally obscured by the voluble party membership with their fondness for dog-shit and the sort of gestural policies that have now found a home with the Greens. Nicola Sturgeon is getting plenty of air-time, despite not standing as an MP and already being First Minister of Scotland, but her whole raison d'etre is that she does not want to be Prime Minister of the UK. Despite the Tory scare-mongering to the contrary, the SNP (who are close readers of the history of Irish independence) will keep their distance from Westminster entanglements. Just as Labour haven't forgotten 1979, neither have the Nats.

Everyone agrees that Nigel Farage has lost his spark, which is variously attributed to illness (i.e. too much booze), tiredness (i.e. too much booze) or the lack of anything interesting to say other than "blame the immigrants". My favourite conspiracy theory is that he has been bought-off by a Tory promise of a peerage if he fails to win South Thanet. In fact, UKIP always knew that they would do well to keep their head above water in a general election. They're a cup-team, which means they thrive as a protest vote in by-elections and when they can maximise their core support in low-turnout European elections. We're now in the run-in of the league season, where attention shifts to the challengers for the title (Labour and Tories) and those in danger of the drop (the LibDems). Farage has understandably adopted a defensive, core-vote strategy, which is why insulting the BBC audience in the second leaders' debate was a calculated ploy rather than evidence he'd over-indulged in the green room.

Outside of general elections, UKIP provide a sharp stick with which the media can prod the main parties, not so much to advance a particular agenda (though there is a fair bit of that, given the prejudices of press barons) but to generate embarrassments and mini-outrages that will attract readers and viewers. UKIP give good clickbait. The drying-up of media attention does not reflect an establishment conspiracy so much as the temporary redundancy of the party as a goad and the surfeit of "wind-ups" provided by party media machines, both overtly and covertly, from "Scottish mayhem" to Grant Shapps's sock-puppetry. Once the election is over, and particularly if the Tories form a government and maintain the commitment to a referendum, UKIP will emerge from its burrow as Europe moves back up the agenda.

The media's focus on the the post-election negotiations to come is tedious, but its allows them to sneer at all the parties even-handedly and thus reinforce the ideological assumption that democracy is inadequate and that the will of the people, whether in Scotland or Greece, must be resisted if it steps beyond acceptable bounds. Though some centrist die-hards continue to extol the benefits of coalition, most UK commentators prefer to predict chaos and illegitimacy. This obviously serves the neoliberal agenda of arrogating more and more of the social sphere to the control of the market and its supra-democratic institutions. Naturally, if the Tories and LibDems can command a majority once more (with the help of the DUP, perhaps), this will instantly be presented as stability and continuity and thus "good news for the markets".

I think Ed Miliband's improving popularity (which, let's be honest is too little and too late) owes something to the apparent respect he has shown for democracy during the campaign, both in his love-bombing of the electorate (all those heartfelt straight-to-camera pitches) and his refusal to be drawn into pre-election stitch-ups (admittedly, this may just be tactical good sense rather than principle). While other party leaders casually alienate large blocs of the electorate (the Scots, non-Kippers), or simply write them off (all those ex-LibDems), Miliband seems determined to appeal to as many people as possible, rather than settle for the "35 per cent strategy" of recent myth (another early claim of impending illegitimacy). It may not work, but at least it means that someone is prepared to campaign in an open and inclusive manner. As Obama found (and Miliband, like most Labour wonks, is enamoured of Democrat Party practice), the "hopey-changey" thing can make a difference.

Monday, 20 April 2015

In Google We Trust

The EU Commission has decided to take on Google for abusing its dominance in Internet search. I fear this can only end in tears, and not just because the commissioner, Margrethe Vestager, was supposedly the inspiration for the leading character in Borgen, Nick Clegg's favourite wet-dream (I mean the TV series about coalition government, not the specific character, obviously). Her roots as a "radical centrist" in Denmark's neoliberal Social Liberal Party (roughly equivalent to the LibDem Orange Bookers) should alert you to the naivety of her understanding of how big business actually works, though you'll be less surprised that she continues the EU's track-record of being pretty clueless about what Google and the other US tech-titans are actually up to.

John Naughton notes that "Google’s current dominance in search is a product of three ingredients: astonishing computing horsepower, distributed globally in huge server farms; smart algorithms; and the possession of colossal amounts of data that can be mined for machine-learning and generate further refinements in Google search. And it’s the combination of these three things that matters". In fact, the basis of its dominance is just the last of these. To coin a phrase: it's the data, stupid. The server farms are merely the necessary infrastructure required to store the data, while Google's key algorithms for at least a decade have been those that parse and index (i.e. organise and interpret) the data, not those that rank it for search results. A large part of my contempt for search engine marketing (SEM) is that the snake-oil distracts from this simple truth.

Google's ability to gets its nose out in front of its search competitors in the late-90s owed everything to the quality of its search ranking algorithms, but it has not depended on them since the early-00s, despite the mythos that has been built around Page Rank (surely more laughable now than KFC's "secret recipe"). It is worth remembering that Google's ascent to dominance owed more to clever positioning than superior technology. It bested Yahoo because the latter was still dependent on a human-curated directory that could not keep up with the explosion of the Web. In contrast, AltaVista's more advanced technology - notably its crawler and natural language queries - proved popular with techies but ultimately turned off the growing audience of "civilians" who couldn't be arsed with Boolean operators. Google quietly adopted the techie smarts (and uncluttered homepage) pioneered by AltaVista, and has since deliberately modelled its geek proposition on the "Easter eggs" of video-game culture - i.e. covert fun for the cognoscenti that doesn't frighten the civvies.

Google relied on synopses, rather than indexing everything on a page, and used links as a proxy for popularity and thus reliability (which they rebranded as "relevance"). In other words, it didn't have the most advanced technology, it simply provided the best user experience: up-to-date, rationally ranked, and with the appearance of objectivity. Google recognised that the quality of search results depended on the relationships between data (links between pages), which meant that it instinctively appreciated the value of the user's own data - i.e. search history and other inferred preferences - as a means of refining search results. Having achieved dominance in search, it was able to translate that into dominance in user preference data (your opinions), which reinforced its dominance in search and thus advertising: a positive feedback loop. The subsequent growth of social media has created a new dataset (your mates' opinions, and your opinion of them) that Google has not been able to similarly dominate, but its control of Android means it can access most of the expanding dataset of mobile user preferences, and social media is now largely mobile (hence "mobilegeddon").

The case being pursued by the EU against Google is focused on the self-interested abuse of rankings, specifically "by systematically favouring its own comparison shopping product in its general search results pages". In other words, they are disputing the independence and accuracy of a species of advertising. For that reason, I suspect their chances of success are no better than those of the ultimately fruitless antitrust investigation by the US Federal Trade Commission between 2010 and 2012. Given the higher political profile of the issue in Europe, centred on the desire to make US tech-companies subject to EU regulation, this may result in some face-saving agreement over cosmetic changes. The parallel investigation into Android stands a better chance of proving anti-competitive practice through OEM lock-ins for search and map apps, much as Microsoft proved vulnerable over the bundling of Internet Explorer, though that precedent suggests the outcome will simply be the opportunity to choose apps at setup.

Historically, the state has routinely promoted monopolies, both because of the revenue potential (e.g. issuing licences in return for up-front cash) and because some large-scale ventures (such as overseas trade) required guaranteed incomes in order to raise the substantial capital needed for success. This still happens today, e.g. the issuing of rail operator franchises and the sale of mobile spectrum bandwith. In the seventeenth and eighteenth centuries, opposition to monopolies usually reflected political factions - i.e. a disagreement over which elites should profit from the commercial powers controlled by the state - hence the focus of attack was often the "old corruption" of the monopolists and their political agents (most famously the impeachment of Warren Hastings in respect of the East India Company).

The industrial revolution and the ideology of laisser-faire marked a political turn against state-sanctioned monopolies, but not against cartels and other "conspiracies against the public" by politically well-connected suppliers (an attitude that lives on in Westminster's dealings with the City). The growing political intolerance of such abuses in the late nineteenth century reflected the parallel growth of national mass-consumer markets (and the growth of large, vertically-integrated businesses, or "corporate trusts", this gave rise to) and the advance of democracy. It was the national dimension (the product of improved transportation and distribution as much as an expanded franchise) that made the issue salient, but the maturity of democracy that determined its political progress (the UK didn't get round to creating a monopolies commission until 1949).

Of course, "democracy" in this historical context really meant the interests of "small businessmen" rather than the mass of the population, though popular campaigns in the late nineteenth and early twentieth centuries would often focus on the assumed consequence of price-gouging. The grand-daddy of antitrust legislation, the US Sherman Act of 1890, was aimed at anti-competitive practises by big business that forced smaller producers and service providers out of the market. The most famous consequence was the breakup of Standard Oil in 1911, though that proved so controversial that large-scale industrial breakups went out of fashion in the US after WW1, a tendency reinforced by the merger-mania of the 1920s and the corporatism of the 1930s and 40s (the later dismantling of AT&T in 1982 was directed at its government monopoly, and was thus a form of privatisation). By the beginning of the twentieth century, the focus of antitrust legislation had shifted from restraint of trade to consumer welfare. This was the logical corollary of social legislation, such as the concern with public health and (in the US) prohibition, with the state taking on the role of protector and arbiter.

In the middle of the twentieth century, the antitrust focus shifted towards achieving "allocative efficiency", which reflected the greater role of the state in economic planning (e.g. mandating specific monopolies or de facto cartels through price-setting, as much in the US as in Europe and Japan). This produced a reaction in the 1970s, as part of the neoliberal turn led by the Chicago School, based around a narrow reinterpretation of consumer welfare. By focusing on consumer effects, neoliberals argued that business intentions were irrelevant. A leading light in this shift was the conservative American jurist Robert Bork, who was famously rejected by the Senate as a Reagan nominee for the Supreme Court. John Naughton refers to Bork's book, The Antitrust Paradox, which suggested that commercial monopolies could be in the public interest if they advanced consumer welfare. What Naughton doesn't mention (though I'm sure he is aware) is that one of the last things Bork published before his death in 2012 was a co-authored (and Google-sponsored) paper specifically defending Google at the time of the FTC investigation.

The assumption behind the EU case is that Google is providing a service (search results) and that its market dominance allows it to abuse its position by favouring its own secondary services (Google Shopping) in those results. A parallel would be brewing companies that own tied houses and oblige landlords to serve specific beers. But there are two problems with this way of thinking. First, all price comparison sites mediate actual product sellers. Foundem (one of the complainants to the EU) cannot guarantee that it delivers lower prices without proving either that it enjoys exclusive discounts from product sellers (or is perversely sacrificing its own margins) or that Google Shopping inflates prices. Neither looks likely, primarily because Google Shopping isn't in the margin-maximisation business: what it wants is user data. On a narrow Borkian interpretation, there looks to be little evidence to prove that consumers are disadvantaged by being pointed towards Google Shopping rather than another price comparison service.

The second problem is that preferential treatment by a communications medium is hardly unusual. A better parallel than a tied pub would be the historic tendency of Rupert Murdoch's newspapers to not only carry adverts for Sky but to plant friendly stories masquerading as editorial (Private Eye used to have a regular feature on these, until they realised it wasn't going to stop), much as Sky News in turn carries complimentary (and complementary) stories that refer to News UK publications. While it might be uncontroversial for the government to insist that tied houses be allowed to sell guest-beers, there seems to be little expectation that The Sun should be obliged to publish puff-pieces about Channel 4 to balance out the puff-pieces about Sky, even in these supposedly radical post-Leveson times.

What this highlights is that the EU Commission is thinking of Google more as a public utility, or a public corporation like the BBC, rather than a commercial service. This might not be wholly irrational, but politically it is a dead end. The EU cannot insist on a charter to govern behaviour and an independent governance structure to monitor compliance, not just because Google is a global business that predominantly operates outside the EU, but because the current political wind is not towards greater collective action in Europe, as both Greece and migrants adrift in the Medierranean can attest. Google is going to remain a private US corporation whose sole raison d'etre is profit, and its advertising revenues will continue to derive from its unique dataset of rich user preferences that no competitor is likely to be in a position to rival for years to come. If Facebook couldn't knock Google off its perch, it's unlikely that a British price comparison website is going to manage it.

If the EU insists that Google does not favour its own service in its search results the company would be perfectly entitled to address the issue by deprioritising all price comparison sites in favour of actual product sellers. The end result, in terms of harvesting user preference data, would be reduced but still acceptable from Google's perspective (because better than the competition), and they might even be able to justify higher advertising fees for the sellers who would divert some of their marketing spend from price comparison sites. As far as Android is concerned, obliging users to choose search and map apps is unlikely to alter the landscape given Google's dominance in these areas (Bing is no Firefox). Frankly, game, set and match.

Wednesday, 15 April 2015

Reading the Manifestos

A cynic might suggest that none of the manifestos are worth the paper they are written on, given that everything will be negotiable in the event of a hung parliament (a "red line" is simply a reserve price indicator). The profusion of uncosted feelgood pledges might encourage that view, though gestural promises that die like mayflies are nothing new and should always be taken with a pinch of salt ("why me?", shrieks an inconsolable Nick Clegg from the wings). The "cross-dressing", in which parties bid to steal (or at least neutralise) the more attractive items from the opposition's wardrobe, is also hardly novel, nor the knowing media claims that it proves "they're all the same" (so why eject the incumbent?). But manifestos do contain some meaningful intentions, and even philosophical differences. It's just increasingly difficult to winnow this wheat from the chaff.

Over the last 50 years, what a manifesto told us was what the party thought the electorate wanted to hear, which is not the same as what the party wanted to convince the electorate of (other media, such as election broadcasts, posters and sympathetic interviews fulfilled this purpose), let alone how it intended to govern. The success of Labour's 1945 effort was that it famously chimed with popular concerns - food, work and homes (the nationalisation of industry was far more prominent than the proposed NHS) - while the Tories under Churchill still banged on about the Empire and "the small man in business". Even when paper wasn't rationed, early twentieth century manifestos tended to be short and to the point, reading at best like an impassioned speech and at worst like the colourless minutes of some well-meaning committee. This "address to the electors" style started to change in the 1960s as Don Draper & co began to peddle their peddling.

Today, the marketisation of politics has led to monsters of over 80 pages. Though these are often dismissed as "shopping-lists", artlessly lumping a bypass for a marginal constituency with the renewal of Trident, their format is more akin to a company prospectus: acres of boasting and CSR blather mixed with dull photos of "real people". This excess is ideological: politics as "retail", managerial "solutions" for every known ill, and aspirational "goals" for a target-driven life. In terms of content, they aspire to the "reader engagement" of a modern broadsheet newspaper, mixing world affairs with the parochial, but deliver the insipidness of a local free-sheet. I doubt even Ed Miliband's ex-girlfriends could be bothered to read them. This bloat has led in turn to the aide-memoire of "key pledges" on a credit-card-sized card that is most definitely not a credit card (careful with that symbolism, dude). Like corporate lucky bags at party conferences, the real message is that the business of politics is business.

Labour was never going to rediscover its intellectual cojones and ridicule deficit-mania at the eleventh hour, so it was predictable that their 2015 manifesto would commit to something as inane as the "budget responsibility lock". As Chis Dillow points out, this is merely a instance of "acting stupid" in the face of a hostile and irrational media, so we really shouldn't pay it too much attention. The emblematic policy is the abolition of the non-dom rule, which few people understand the technicalities of (it's meant to be obscure) but everyone knows is about fairness - yay, go fairness! This, together with the overall theme that "Britain only succeeds when working families succeed", helps put an egalitarian gloss on the standard neoliberal pabulum (worry about the deficit, accommodate business, improve the quality of labour etc).

Labour party spokesbots have even been able to easily sidestep the claims that abolition of the non-dom ruse may not raise much tax (the dodgers are already working on other dodges) by focusing on the morality of it. We all recognise a cheat when we see one, and we all catch the whiff of the hypocrite in the decision of rich Brits to claim they are really foreigners. Of course, if they were really serious about tax-dodging, or just clearing up administrative anomalies from the days of empire, then Labour would abolish Crown dependency tax-havens and the privileges of the City of London Corporation. At best, the non-dom commitment signals a genuine determination to improve tax receipts (morality has nothing to do with it); at worst, it is euthanising an egregious abuse that has become an embarrassment across the political spectrum in an age of public austerity.

Meanwhile, the Tories have sought to recast themselves as the party of the workers, hence the centrepiece of their manifesto is the commitment to extend right-to-buy to housing association tenants. The purchase price will be heavily-subsidised using funds raised by forcing councils to sell-off their better remaining stock as it becomes vacant. Supposedly, this magic money will compensate housing associations, pay for one-for-one council house replacements (i.e. new, cheaper stock), and also contribute to the cost of preparing brownfield sites. Loaves and fishes come to mind, but with a stiffer challenge in terms of coordination. As a practical policy this is nuts, and likely to face legal challenge by housing associations wondering why it isn't being extended to other private landlords, but it works as an emblematic policy: a Thatcher tribute act in an era of small ambitions (it's worth recalling that it was included as an aspiration in the 1979 Conservative Party manifesto, but that the party subsequently got cold feet due to the encroachment into the private domain). That also explains the subliminal purpose of "the good life" soundbite.

The big difference between the Labour and Tory manifestos is the referendum on EU membership, which represents a clash of interests between different sections of capital. This is echoed in the differences of tone in respect of low-pay: the Tories want to lower the tax burden to subsidise crap wages, while Labour wants to penalise shit jobs to encourage productivity growth. This is a real ethical choice, and one that will affect many workers, but it also represents a strategic moment for British capital, on a par with the pivotal decision by Gordon Brown to block adoption of the euro. Strangely, and despite the presence of UKIP, the EU referendum has received little attention to date beyond some guff about democratic responsibility, which is ironic. It's as if the dominant issue of the next parliament (if the Tories get back into government) cannot be properly discussed, despite its potential to destabilise the economic growth on which so many other policies are dependent.

For the most part, the rest of the two main manifestos represent differences of degree on a neoliberal spectrum. For example, though Labour promise to scrap the Health and Social Care Act, their track-record since 1997 and their commitment to integrate social care suggests more "reform" is on the way. Creeping privatisation may be halted, but it's unlikely to be reversed. Similarly, and despite the claims of supporters, there is more agreement than disagreement on the economy. On the fiscal front, Labour's decision to exclude capital spending from its definition of a balanced budget makes good sense in an era of weak demand and low interest rates, but the hegemonic prejudice against public debt means that we will continue to convert public investment into a private rent through PFI and similar scams. The attitude towards the poor remains punitive: moderate beasting versus full-on beasting.

You don't need to read the manifestos to appreciate the philosophical differences between the parties, with emblematic policies trailed ahead of the big book to ensure media focus and the best of the rest quickly reduced to an online listicle. The Tories' claim to be better managers of the economy reduces to an offer to manage it in the interests of property, inheritance and established business. Labour's claim to be the champions of working people reduces to being better managers of labour in the service of progressive capital. The Tories will feather-bed the comfortably off because they cannot break out of the laager of their class interests. Labour will improve the lot of the poor and underprivileged because big capital has an interest in a higher skill, higher wage working population. The Tories remain conflicted between conservatives and neoliberals. Labour remains conflicted between neoliberals and social democrats. Plus ├ža change.

At their present rate of growth, the manifestos will graduate from novella to full-blown novel within a decade, but this is a sign of their increasing irrelevance, not their popularity, and not unlike the editorial bulking-up of newspapers in the Internet age. Their size and blandness means they are increasingly of interest only to specialist readers, and that means party activists rather than journalists or political scientists. Gradually, they are moving away from reflecting what the party thinks the electorate wants to hear to what the grandees think will keep party members onside. This in turn reflects the atrophy of party democracy and the corporatisation of the party hierarchies. The manifesto has become the quinquennial report by the board to the minority shareholders.

Thursday, 9 April 2015

The Share Bear

I was re-watching Paddington the other night (Easter treat) and noted again the concession to modern manners by which Mrs Bird, a paid housekeeper in the original tale, was redefined as a distant relative who had been taken in and made useful with a duster. Perhaps this was intended to reinforce the film's charitable spirit - it's a socially-conservative hymn to immigration and cultural variety that must confuse Kippers - but it also emphasised our cultural sensitivity about what might be called "the coming servant problem". In one way this was odd, given the film's backwards-looking fondness for good manners and comforting treats such as marmalade (sugar was rationed till 1953), but I think the film is nostalgic specifically for the postwar mix of egalitarianism and counter-revolution: a bit like the New Routemaster.

The most obvious counter-revolutionary trope is the film's technology, displayed in a Ladybird book-style progression from the pre-war steampunk Geographers' Club via 1950s toys (the era of Michael Bond's original stories), a 1960s motorbike and a 1970s Volvo, to the beige house-phones and iconic Dustbusters of the 1980s. No one seems to have a smartphone and the most modern tech on show (apart from ubiquitous CCTV), namely a pair of Beats-like headphones, functions as a symbol of communication failure in a film where talk brings people together. The moment that Mrs Brown, on her way out to the library, deposits half a dozen telephone directories on the kitchen table to aid Paddington's search for the unknown explorer, is the moment you realise that the Internet has not been invented in this parallel universe.

It is hardly a surprise then that the black cab driver (Matt Lucas with Arsenal air-freshener) has yet to be disrupted by Uber, while Mr Gruber's antique shop has clearly been unaffected by the arrival of eBay. No one suggests that AirBnB might be the solution to Paddington's search for a bed. This is a sharing economy, but one in which people share for reasons of loyalty (Mrs Bird), altruism (the duffel coat), and self-esteem (the voluble cabbie can't help offering traffic advice to the villain). Sharing taboos are important (toothbrushes), and coercive sharing (pickpocketing) is clearly unacceptable. Private property is to be defended (the home), but not taken to extremes (taxidermy). Mr Brown's initial reluctance to share his home with a bear is put down to excessive caution, which is another form of communication failure: humanity lost to calculation (interestingly, his job as a "City worker" is now the less provocative "risk analyst"). The plot denouement hinges on the sharing of a marmalade sandwich.

The reluctance of a film centred on sharing to acknowledge the existence of social media suggests an ambivalence about contemporary developments in the so-called "sharing economy". Of course, the monetisation of private goods, such as cars, spare rooms and driveways, isn't "sharing" in any real sense but "sweating assets". From eBay to The Silk Road, the Internet is realising the libertarian ideal in which anything is for sale and where a willing buyer or seller can always be found at a price. The "sharing economy" fulfils the ideological need to cast every consumer as a simultaneous entrepreneur, but a more accurate description of the world we are creating is the "on-demand economy", with its overtones of constant, infantile need.

The Internet pioneers were much enamoured of the idea of a "gift economy", however this was a hippy misunderstanding of an anthropological term that describes highly-formalised obligations in a rigid hierarchy. A gift economy is built on debt, creating a conservative society in which people are connected by a web of historic transactions and future expectations (in Paddington, Mr Curry's amorality is shown by the contrast of his inheritance of his mother's house with his opportunistic pinching of memorial flowers: an insult to the dead). In practice, this primitive "cyber-communism" of the Internet in the 70s and 80s was made possible by abundance, specifically the infinite replicability of digital data. In contrast, "sharing" implies access to something that has limited supply, which is where capitalism comes in.

According to The Economist, "Karl Marx said that the world would be divided into people who owned the means of production—the idle rich—and people who worked for them. In fact it is increasingly being divided between people who have money but no time and people who have time but no money. The on-demand economy provides a way for these two groups to trade with each other." The picture painted is of freely-consenting adults engaged in mutually-beneficial transactions, but in fact these activities are usually mediated by businesses. The use of the word "trade" to describe this relationship also obscures the imbalance of power. If technology is, in Coasian terms, reducing the transaction costs of outsourcing, then it must be reducing the bargaining power of labour. As The Economist concedes, "Risks borne by companies are being pushed back on to individuals", and that includes end-customers too.

While Uber is casualising workers, AirBnB is providing a front for firms to pose as casuals. It is "a site that uses the heartwarming stories of a few of its hosts to provide a cover for a growing cadre of professional renters using the site to avoid municipal regulations around safety (no fire inspections), zoning (driving gentrification of tourist areas), and taxes". The most obvious evidence that the on-demand economy is structurally biased is the high level of fraud, which affects consumers and micro-businesses the most. This does not arise from the technology, which is perfectly capable of being implemented securely, but from the market demand for frictionless transactions and impulse-buying. Consider Amazon's evolution from the relatively innocent "people also bought" feature via their pre-emptive shipping algorithm to the Pavlovian "Dash" button.

The Economist's dichotomy is false because it ushers offstage the ultimate beneficiaries: those who are rich in both time and money. While busy professionals call up goods and services delivered by the precariat, capitalists own the exchanges. Evangelists of hyper-marketisation, like Thomas Friedman, are excited that "Ordinary people can now be micro-entrepreneurs". The language encourages the idea that being a small-time player is worthy in itself, and this extends to freelancing as much as running a small business: "Large numbers of people will have to invent their own jobs, based on new types of work organizations that leverage digital markets and platforms. While experts and politicians have no clue as to what to do, the collaborative economy may well be the invisible hand’s answer to this critical societal challenge". As ever, the invisible hand is intended to obscure the all too visible capital.

To what extent has the direction of technological innovation been dictated by existing social forces? Did the processes of globalisation and deindustrialisation encourage the development of technologies that presume a reserve army of willing labour? If employment has stayed high, would we have made less progress with apps and more progress with robotics? As The Economist notes, "the on-demand economy is not introducing the serpent of casual labour into the garden of full employment: it is exploiting an already casualised workforce". Similarly, to what extent has the recycling of personal assets for gain been influenced by three decades of privatisation and (for many) stagnant wage growth? The UK "bedroom tax" and AirBnB both treat the spare room as an otherwise wasted asset, but the former surely owes more to the culture of capital gains brought about by right-to-buy than the memory of Cathy Come Home.

Andrew McAfee thinks that the on-demand economy being pioneered in the Bay Area will soon spread from the rich and tech-savvy to the middle classes, just as new goods and services have in the past: "much better convenience and service are coming soon to many." But this is to confuse the dynamic of commodity deflation (and historic rising wages in les trente glorieuses) with the use of an already pervasive technology (Internet devices) to drive down the price of labour by maximising supply in an era of structural unemployment. Despite his optimism, McAfee has to concede that "The only true problem with this future scenario is that the people delivering the goods and services won’t be well paid, just as they aren’t today. There’s simply too much slack in the labour market to force wages up, and I don’t see that situation changing any time soon; the twin forces of automation and globalisation are just too powerful."

In other words, technology can restore servants to the upper middle classes - but in a fragmentary and virtual form - thus providing the social support for the much smaller number who own the technology. This might seem regressive in the West, but an economy in which you get "a boy" to do chores for you, or have a live-in maid, is common in the developing world, and it is significant that firms such as Uber have quickly sought to expand to these areas, anticipating that a relatively small (but absolutely large and growing) middle class in countries like India is where long-term revenue growth lies. The "micro-entrepreneur" vision implies that the sharing economy is a wholly new model, rather than a reversion to the putting-out system that preceded the industrial revolution in the West and still exists elsewhere. The concentration of capital in that revolution required the concentration of labour, which created the basis for economic struggle. The "cloud" sounds fluffy and universal, but it is actually a hyper-concentration of capital in tandem with a hyper-dispersion of labour.

There is far less innovation in the "sharing economy" than advertised. The change underpinning services such as AirBnB and Uber is not merely that the Internet brings sellers and buyers together more efficiently than older methods, but that it allows sellers to advertise, and buyers to buy, more discreetly. A service that allows you rent out your driveway does not require a sign in front of your house that might invite negative comment from the neighbours, and shy buyers can rely on email rather than the phone or face-to-face. While tech-boosters laud the way that smartphone apps are disrupting car-hire, they ignore that one of the most successful service transitions has been prostitution, where discretion is an issue for both buyer and seller. Similarly, the major advance that has enabled Uber is not an app but the GPS that allows inexpert drivers to find their way, while the rate of its adoption is determined less by local bandwidth than political deregulation (ironic, given that GPS was developed, and is still maintained, by the US government).

Consider the following two statements. Andy Haldane, of the Bank of England, thinks "There are good grounds for believing technological forces are driving innovation and hence growth, in a classic Neo-Classical cycle. But there are equally-good grounds for believing sociological forces are retarding growth, in an endogenous-growth pattern". The economist W. Brian Arthur notes: "The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem".

This suggests that we face a revolutionary situation not because society is resistant to the "disruption" of the new technology, but because it has no way of effectively adapting to that disruption; and that failure is as much a failure of capitalism (and the capitalist imagination) as society. Paul Mason asks in respect of 2008. "Was this event the last in a series of shocks needed to allow a third technological revolution to take off? Or was it evidence that capitalism’s tendency to adapt and reshape in response to technology has stalled, or is even finished?" In other words, if capitalism is incapable of addressing the "wealth distribution" problem, and if society is imaginatively stuck in a politics that can see no alternative to capitalism, is it inevitable that we will, like Paddington, simply wish the problem away?

Sunday, 5 April 2015


The format of the leaders' debate was pure gameshow, though more in the style of The Weakest Link than Blind Date. Julie Etchingham seemed to consciously model her severe style on Anne Robinson, which was undoubtedly a better choice than attempting to channel Cilla Black (the collision of politicians and human interest is usually toe-curling). This made the interruption of reality - the heckler - all the more amusing, as if the programme was about to descend into something more akin to The Jeremy Kyle Show, with Nick Clegg condemning David Cameron as a love rat and Nigel Farage stinking the place out. Though the post-match pundits mischievously claimed that Nicola Sturgeon came out on top (she said nothing new and didn't land a punch, but then she didn't have to), I suspect the lasting memory will be Leanne Wood's contempt for the UKIP leader.

There were two dynamics in play. First, the competition to be Prime Minister: a straight choice between Cameron and Miliband. The format of the debate prevented any real interrogation of policy, which was presumably the Tories' cunning plan, but given the small differences on offer (how harsh would you like your austerity?), and the implicit caveat that coalition means that all promises are contingent (thanks, Nick Clegg), it was always going to be about projecting personal "credibility". Where once this might have been a mixture of essentially cultural and social virtues, such as gravitas or sincerity, it now means performative governance: a combination of financialisation (policy framed as a choice of investment options) and managerialism (problems reduced to targets and metrics) topped with superficial personality (empathy and kitchen etiquette).

The second dynamic was the marketplace for beliefs. The fragmentation of politics is held to be due to low popular esteem (which is hardly novel) and the alienation of traditional supporters, however an equally plausible explanation is that it marks the continuing evolution of politics as a consumption preference and thus reflects a wider tendency towards the particular and the niche. This is not just the extension of market techniques to the social realm, which came in with mass media (national opinion-polling is a century old), but the assumption that political choice is now a matter of personal rather than social identification - i.e. what best expresses me rather than what would be best for society. This can be seen not just in the narcissistic tendency of the Greens ("vote for what you believe in") and UKIP ("we're not like the rest"), but in the number of English voters attracted to a party they cannot vote for, the SNP.

The great achievement of neoliberalism has been to occlude class by a relentless focus on homo oeconomicus, the representative utility-maximiser, and by the acceptance of abstract "market forces" that aren't situated in any social or historical reality. The only concessions to solidarity are bromides such as "hard-working people" and the patronisation of "the poorest in society" as objects of pity. It was interesting that the only time ethics came to the fore in the debate (as opposed to utilitarian calculations such as "investing in our kids") was in the discussion of foreigners, first in the context of foreign aid and then in the context of supposed benefit tourism. It appears that Margaret Thatcher's gloss - "'No-one would remember the Good Samaritan if he'd only had good intentions; he had money as well" - has yet to convince.

But this popular appetite for the ethical also shows the gulf that exists between the propaganda of the media and the reality of social relations. The Telegraph regretted that even Cameron "failed to make the case for business, for fear of upsetting the voters", which reveals its binary view of a world divided between the beleaguered minority of "wealth creators" and the profligate majority demanding more tax for its "precious NHS" (or "class war vs the free market", in the words of the realiably dichotomous Janet Daley). Despite the traditional early appearance of a letter from business leaders extolling ("in a personal capacity") the necessity of Conservative government, the reality is that electors tend to ignore the opinion of their self-appointed betters unless there is a naked threat that carries really menace, such as the banks that promised to leave Scotland in the event of independence. This is why the individual threat to quit Britain if Labour wins (a job once left to publicity-starved has-beens, but now the territory of professional trolls) is always so ill-judged.

Nigel Farage's insistence that the NHS should put "our own people first" appeals to the same sense of solidarity that underpins the pitch of the SNP, Plaid Cymru and even the Greens, but when he extends this to refusing treatment to HIV patients, he loses all sympathy because their primary characteristic is not their foreignness but their misfortune. For all the tabloid frenzy directed at "benefit cheats", the mundane truth is that most people lack the energy for permanent hatred. We can manage lazy xenophobia or low-level bigotry, but find rigorous racism (or "class war") too much of an effort. The right have never quite understood charity, routinely confusing exhibitionism with selflessness, just as they have never quite managed the right tone of voice when talking about the NHS (Cameron indulged in his usual shroud-waving, a manoeuvre now subject to the law of diminishing returns). The political class over-estimates both the cruelty and sentimentality of the people, largely because they are polluted by the distorting prism of the media.

Despite the grumbles of political journalists, trapped in the conventions of their own making, the debate was revealing of the gap between the Westminster bubble and common concerns. It isn't that the UK electorate are not bothered about wealth creation, just that they have a wider, more generous interpretation of what constitutes wealth. The debate also suggested that the modern contempt for politics emanates more from the establishment itself than it does from the people. After all, the limited number of debates and straitjacketed form were dictated by Number 10, while the caution and defensiveness of the answers from Miliband, Cameron and Clegg were prompted by spin doctors and election strategists, not by the questioners. That points to the fundamental pessimism of neoliberalism, an ideology that pays lip service to the post-enlightenment belief in the perfectibility of man, but which (as a soft totalitarianism) assumes that man is an inveterate back-slider, hence the need for constant vigilance, striving and assessment.

The neoliberal erosion of democracy is real and deliberate, but it would be overly-pessimistic to assume that this is inexorable. Without getting too dialectical about it, the process creates it own contradictions. The "seven dwarves" form of the leaders' debate is both a consequence of and a response to neoliberal hegemony and its insistence that markets are superior to deliberation. Coalition or minority government can lead to bland centrism, but it can also shift the political locus off-centre (it's worth remembering that not only is the Greek government a coalition, but so is Syriza as a party). The idea of a UK "popular front" after May the 7th - even if informal - is not altogether far-fetched, and might even be welcomed by some in the Labour party as a way of drawing a definitive line under Blairism, but this would not presage a departure from neoliberalism, merely a generational makeover in the interests of "compassion", "fairness" and "opportunity for all". A bit more Cilla Black, chuck.