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Friday, 18 April 2014

Silver Linings

I've spared the commentary on Arsenal recently because they have been, I think everyone would agree, all over the place. It has been hard to make much sense of what has gone on, though I think we're now emerging from the waking nightmare. In early March I was still whistling cheerfully, hoping that Anfield was an aberration and that we would ignore the script that insisted on a collapse. To make matters worse, Liverpool have failed to crumple since, which raises the prospect that Alan Hansen's last season on MOTD will see them clinch the title. The chief compensation will be the look on Alex Ferguson's face when someone mentions "perch". That and the knowledge that the odious Mourinho would have been denied.

In one sense we are the victims of our own success, the table-topping early season form having raised expectations, perhaps unreasonably (I thought 76 points a realistic target and we're still on for that). Wenger might have gambled during the transfer window, bringing in some fresh blood as a contingency for injuries and lost form, but there were few players of the required calibre available, not least because it's a World Cup year. Without reinforcements, we were riding our luck. Sure enough, the overlapping losses of Ramsey, Walcott, Wilshere and Ozil drained the team of its earlier zip and panache. Wenger's recent claim that we must "return to basics" is more an admission of inescapable constraints than a deliberate strategy.

The return of Ramsey and (possibly) Ozil should give us more attacking variety, though the key for the run-in may well be the stability of the defence. Vermaelen has looked an unconvincing stand-in both at centre-back and left-back, so you have to hope Koscielny and Gibbs stay and get fit respectively. We're not going to discover some free-scoring strikers down the back of the sofa, so maximising our points total will require clean-sheets and opportunistic goals from midfield. Podolski is rightly seen as a specialist in the latter, but his defensive play is poor and unlikely to get better. I suspect his sparing use reflects Gibbs's injury proneness.

The progress to the FA Cup final has been encouraging. Though the dominant narrative on the day will be about Arsenal potentially slipping up ("another Birmingham"), such that a victory will be sniffed at by the neutral, this ignores the team's success in beating Spurs, Liverpool and Everton to get there. We have fought our way through, and the mental fortitude of the penalty shootout against Wigan was part of that. My one regret is that the game is being played at Wembley, which remains a horrible ground, far inferior to Cardiff for atmosphere and only marginally more convenient for travel. To add insult to injury, 40k of the 90k tickets for the match will go to members of the "football family" (i.e. liggers and touts), which means only a 60% chance of getting a ticket in the draw for season ticket holders.

I went to the semi-final and frankly enjoyed little of it. This was due less to the dull play (Wigan were unadventurous and we were too slow) and more to the pissed-up, angry Arsenal fans, particularly the two knobheads in front of me who insisted on standing, despite us being almost at the top of the upper tier. The chief use they found for the seats was to kick them in anger when Wigan scored. I'm not averse to swearing in frustration at games myself, but the vitriol directed at our own players and manager was just insane. The pissed knobhead to the left of me, who smoked throughout and disputed the decisions of a linesman who was a quarter of a mile away, was almost reasonable in comparison. Naturally, these same eejits were the loudest in celebration when we scored.

They're a minority, but there is no doubt that they represent a distinct strand among supporters: blokes in their late 30s and 40s whose youth and early adulthood coincided with the long run of success from 1987 to 2005, for whom the lean years have perhaps reflected disappointments and narrowing options off the pitch. I'm reminded of Alan Sillitoe's The Match, not least because supporting Notts County through thin and thin puts our silverware drought into perspective.

I had thought that this would be a season in which the title would be clinched with a low points total of around 80, but Liverpool could still achieve a total of 89, the same as the last two champions. If we take maximum points, we'll finish on 79. This will probably still only be enough for fourth spot, but it would represent progress: the last three seasons we've finished on 68, 70, and 73 points. If we can additionally win the FA Cup, then you'd have to mark the season down as one of real progress and encouragement, though I have a feeling the angry brigade will only be satisfied if we additionally make successful summer bids for Diego Costa, Bastien Schweinsteiger and Gareth Bale.

Sunday, 13 April 2014

The Return of Political Economy

The two most interesting men on the political scene today are a Frenchman whose name sounds English, and an Englishman whose name sounds French: Thomas Piketty and Nigel Farage. In their different ways, both are connoisseurs of power.

The high profile given to Piketty's Capital in the Twenty-First Century confirms the return of political economy to the centre stage. In part this can be ascribed to the reputational damage suffered in 2008 by orthodox economics and its focus on ethically-neutral utility maximisers; in part it is a response to the disillusion felt when neoliberal politicians admitted that they could interfere with markets after all, bailing-out banks and socialising twenty-odd years of looting as public debt; and in part it is the result of the long gestation of the counter-movement against marketisation - the idea that the economy should be freed of social regulation in order to maximise growth.

The return to an ethically-founded view of economics is welcome because it entails a focus on power. The modern defence of capitalism rests on the premise that "wealth is most readily increased in systems where those who are more productive earn greater incomes". In other words, allowing the talented to prosper raises aggregate growth, which in turn benefits all. This is not so much the nonsense of 1980s "trickle down" as a reformulation of the postwar consensus that growth was the engine of greater equality: a rising tide lifting all boats. This ultimately utilitarian approach ignores the impact of power - i.e. the way that incumbency is abused to preserve privilege. The importance of Piketty's work is to show that, without redistributive policies and confiscatory taxation, returns to capital exceed returns to growth, which leads to ever-widening inequality and the concentration of power. You need to address the politics as well as the economics.

Despite the prominence of economic disputes in the 70s and 80s, such as the saltwater / freshwater debate and the monetarist experiment, the real watershed was a political shift in attitudes towards power that ultimately owed more to Hayek than Friedman and was heavily influenced by the anti-totalitarian focus on state agency over private inequality. The resulting neoliberal critique claimed to be the continuation of classical liberalism's concern with the balance of personal freedom and equality: a thread connecting Mill's view of liberty to Rawls's Difference Principle. The latter "permits diverging from strict equality so long as the inequalities in question would make the least advantaged in society materially better off than they would be under strict equality". The Rawlsian theory of justice is now under real pressure, not least because we see how "citizenship and democracy are ... sucked of their meaning by the super-rich". But this raises a question: why has mass democracy, which only arrived after World War One, allowed a return to the levels of inequality last seen in the Edwardian era?

One explanation is that ideology maintains the linked fictions of equality of opportunity and merit, and that this provides cover for the continuation of patrimonial capitalism. Like TV talent shows, superstar executive pay and dotcom billionaires preserve the illusion that wealth is potentially available to all, no matter how humble our origins. Even if this success is the result of gaming the system, or just simple luck, it can still be seen as admirable if the former has the whiff of the iconoclastic upstart and the latter the appearance of a lottery. But the vast majority of people do not actually want spectacular success: their desires are for comfort and the absence of worry, not the furious competition of the free market. The driven individuals of entrepreneurial myth are very rare - if they weren't, the economy would be chaotic.

Another explanation is that democracy "can be anti-egalitarian insofar as it causes politicians to heed the noisy but minor complaints of the privileged whilst ignoring the bigger but silent plight of the genuinely worst-off". In other words, democracy is a contest for attention and thus rewards the organised and vocal. But while there is obvious truth in this - it explains why a mansion tax is deemed less politically feasible than a spare bedroom tax - it doesn't explain why we largely ignore obvious abuses by the super-rich, such as tax dodging, nor why certain highly organised sectors of society are frustrated by their relative lack of influence.

Opinion polls consistently show the electorate to be more pro-social and less pro-market than the political consensus. In other words, less tolerant of the compromises made with power. While some of this may be wishful thinking that evaporates in the voting booth, it's pretty obvious that no major party truly reflects this stance (Labour's terror of nationalisation is not shared by the public). This is not unreasonable - political parties tend to be aspirational, rather than a reflection of the status quo, because they attract people who want to change things, even if only to wind the clock back to a mythical past - but there clearly has to be continuity between the two. This suggests that the key problem with democracy may be one of representation; that the disillusion of recent years, from Iraq to expenses, is symptomatic of a widening gap between majority opinion and the policies on offer in the political "marketplace". In other words, this is another example of neoliberal regulatory capture that has not been rectified since 2008.

In this light, UKIP's cheerful contempt for actual policies, and their reliance instead on vague sympathies, is very much of the moment, even if they did arrive at this position by the accident of incompetence. Much of their appeal concerns the issue of power, both real and imagined: controlling immigration, resisting "rule from Brussels", the over-weening state, the sins of the "political class" etc. In reality, UKIP are anti-redistribution and pro-inequality, which is why I think the claims that they will hoover up working class votes in the North are (outside the comic interlude of the EU elections) misplaced. Most of their party members are people who think they have an entitlement to power, while most of their supporters are people who feel increasingly powerless.

Farage's besting of Nick Clegg in the recent EU debates has been described as the victory of stories over facts, which plays to a patronising belief among progressives that the unsophisticated electorate are suckers for hokey tales and simplistic images. In reality, Farage is simply channelling a wider contempt through dodgy anecdotes that would invite derision down the pub. A bonkers claim, such as that the EU writes 70% of our laws, works because it is bonkers. Farage's real trick is to show utter disrespect for the established parties and the norms of political debate. We actually want the allegations about maintaining a mistress on MEP expenses to be true; we want him to be a card. But the indulgence of Farage does not mean that we wish him any real power. As soon as he shows an appetite for it, we will deny him it. His popularity depends on being seen as anti-authority, not in promising a better authority.

Tony Benn's five questions ("What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?") could serve as UKIP's manifesto, so long as they never get anywhere near real power and have the tables turned on them. The problem, as indicated by their desire to abolish inheritance tax, reduce corporation tax and implement a flat-rate income tax, is that the "interest" they represent is all too obviously the patrimonial wealth behind political power that Thomas Piketty has extensively profiled, and this becomes increasingly obvious the more they formalise their policies. In that sense, UKIP are utterly of their time, and will remain so regardless of the EU or immigration.

Monday, 7 April 2014

What's the Big Deal?

The Guardian asks: "Can collective consumerism help cut energy bills?" Apparently, "Henry de Zoete, a 32-year-old former adviser to Conservative education secretary Michael Gove and scion of the De Zoete banking dynasty" has launched "The Big Deal on Energy", which seeks to use the power of group buying to secure improved tariffs for gas and electricity customers. I was amused to see this story appear on the same day that Alexei Miller, the CEO of Gazprom, announced that wholesale gas prices for Ukraine will be increased due to the lapsing of discounts negotiated by the former regime of Victor Yanukovych.

These discounts were quid pro quos for Ukraine rejecting the association agreement with the EU, which led to the Maidan protests, and for the 2010 Kharkiv Accord, which extended Russia's lease on its Crimean naval base. The latter was recently rescinded by Vladimir Putin on the grounds that the annexation of Crimea made it irrelevant. The formality of the former lapsing indicates that we are probably now in the negotiated end-game of the Ukraine crisis. At one level, both of these initiatives are examples of exchange dynamics: the Russians are exploiting a monopoly position, while de Zoete & co are striving towards a monopsony (i.e. single buyer) ideal. In practice, we decry the former and applaud the latter. Ironically, Miller is arguably being more honest about the reality of the energy business.

The criticism of Miller's announcement is directed at Gazprom's ultimate sponsor, Putin. EU sanctions against Gazprom are as unlikely as Chelsea running foul of UEFA's Financial Fair Play rules. Energy is a matter of national security, so no one is blathering about the wonders of the "free market" on this occasion, or suggesting that Gazprom is anything other than an arm of the Russian government. This is in contrast to the coincidental blathering in the UK about gas and electricity prices and the rapacious practices of the "big six" suppliers. The usual suspects on the right are busy claiming that any government intervention (whether in the form of price-caps or "green crap") is counter-productive, despite the obvious lesson from Gazprom that what we pay for our energy is driven as much by political design as scarcity or market dynamics.

It is true that supply and demand determine prices over the long term, but it is also true that state intervention is the largest factor in sudden price fluctuations (and has been since the 1970s oil shocks), and that both wholesale and retail prices are heavily affected by domestic policy, even in the most pro-market economies. For example, the lower gas prices due to the "shale revolution" in the US are as much the product of government subsidies and a ban on exports as a breakthrough in technology or increased reserves. In the UK, the government has already (quietly) admitted that fracking will not lead to lower energy prices, any more than North Sea oil did, and that there are few parallels with the US experience.

The wide variation in gas and electricity prices across Europe should be evidence that there is not a free market either at national or international level, and for a good reason. In a genuinely free market, exposed to wholesale price shocks and cut-throat competition, we would have both price volatility and the periodic failure of suppliers. This would mean that disconnections and blackouts would be regular occurrences (this actually happened in California in the early 00s). Given the risk of public disorder, not to mention the psychic damage of "third world" problems, developed nations tightly regulate their domestic energy supply, which means de facto cartels and the setting of price bands. The latter must reflect local affordability, which is why they tend to move inversely to the cost of other household staples, such as housing and food.

The cost of energy is a public order issue, which is why Ed Miliband was taking few risks in promising to cap prices. The popularity of this rhetoric, and the irritation it caused in government and among the suppliers, shows that we all know the market doesn't exist and that the state can significantly influence prices without an investment strike. In this light, the proposal that our interests can be better served by "collective consumerism", i.e. switching en bloc, is crass. It sounds empowering, even a sentimental echo of the co-operative wholesale principle. In practice, it's the old idea of a buyers' club updated for the Internet age: essentially a mailing list where discounts are the quid pro quo for spam. "The Big Deal" may be focused on energy today, but a quick shufti at their terms (no mention of energy, just "campaigns and offers") indicates that this will become as promiscuous as Groupon.

It is also worth remembering that while collective buying can be beneficial in aggregate (if it efficiently clears surplus stock), in a market such as energy, where prices are multifarious and openly manipulated, any savings achieved by the buyers' club will be cross-subsidised by higher tariffs charged to non-members, which will disproportionately affect poorer households obliged to use pre-payment meters or unable to commit to annual contracts. The Big Deal on Energy preserves the fiction that there is a buyers' market for gas and electricity and that government is ultimately powerless. According to Henry de Zoete: "people power can fix the energy market quicker than politicians." Alexei Miller could soon put him right on that one.

Wednesday, 2 April 2014

Get a Job, Get Married

What links gay marriage and full employment? Though we never lack for people who interpret variations in marriage practice as evidence of fluctuating morality, there has always been a firmer relationship between the institution and the hard facts of class and economy. Marriage in law remains largely a matter of property rights and inheritance, which is why it has always been more popular among the middle class than the working class. Gay marriage is already looking almost stereotypically "middle Britain" in its emphasis on common sense, good humour and mawkish sentimentality.

When we marry depends largely on our economic circumstances. Where once heterosexual marriage was the precursor to childbearing, it now typically follows it. In other words, women often seek the "security" of marriage once their economic independence is diminished or made vulnerable. Likewise, working class women increasingly eschew marriage not because they want to live off the state but because working class men increasingly bring insufficient economic value to make formalising a relationship worthwhile. Tax-breaks for married couples are small beer in comparison.

George Osborne's commitment to "fight for full employment" is opaque, but given the recent record on job creation and the absence of any credible plans to alter the composition of the economy (aka "rebalancing"), it will most likely be achieved, if it is achieved at all, through the expansion of low wage roles in the service sector. As the total workforce participation rate has barely changed over time, beyond women substituting for men (i.e. men have dropped out of the labour market altogether as women have entered it), it is also obvious that this will require some degree of workfare-style coercion. The Tories criticism of Labour's "jobs guarantee" is essentially semantic. Both are committed to the state direction of unskilled labour and the subsidising of low-wage employers.

The consequence will be to depress median wages and productivity further. It will also expand the already large number on the statutory minimum wage, which since its introduction has inched towards becoming the norm rather than staying an outside boundary. It is noteworthy that Germany is now thinking of introducing a minimum wage, presumably because they have seen how "beneficial" it can be in acting as drag on median wage growth. In their defence, increased profitability due to wage restraint since the mid-00s has led to higher levels of investment and thus better productivity growth, though this in turn reflects a larger, export-oriented manufacturing sector. In contrast, wage restraint in the UK has not stimulated investment but led to labour-capital substitution - i.e. employing more cheap workers instead of better equipment.

But low investment and poor productivity growth will not continue indefinitely. Despite the techno-pessimists, it is becoming increasingly obvious that we're in the middle of a radical economic transformation, the start of which can be dated to the post-dotcom bubble recovery in 2003. The coincidence of the "war on terror" should also be noted, as the hegemony of the information economy is as much a product of political will as commercial innovation. Martin Wolf contrasts this new turn with the industrial revolution: "The machines of the first age replaced and multiplied the physical labour of humans and animals. The machines of the second age will replace and multiply our intelligence". That ambiguous word covers both business insight and the "intel" of state surveillance.

But this is not human intelligence, except in a narrow and reductive sense. It is a mistake to assume that "robots" replacing white-collar jobs is about technology carrying out cognitive tasks. Very few white collar jobs entail any real cognitive independence or improvisation. You are usually following a script of some sort, and the impact of process engineering and lean manufacturing, which maximise algorithmic control and minimise human agency, has been to proceduralise more and more jobs (the bureaucracy of targets in the public sector serves the same purpose). Of course, some are better at adapting to this than others. Thus in finance the tendency towards automation and complexity is partly driven by obfuscation, which provides excellent cover for abuse.

The Economist attempts to put a positive spin on this: "leaps in machine intelligence could create space for people to specialise in more emotive occupations, as yet unsuited to machines: a world of artists and therapists, love counsellors and yoga instructors. Such emotional and relational work could be as critical to the future as metal-bashing was in the past, even if it gets little respect at first". To this list you can now add wedding planners, choristers and pre-nuptial agreement lawyers. The problem, as hinted at by George Osborne's new-found determination, is that these fulfilling roles will, like marriage, bias towards the better-off. The future equivalent of metal-bashers can expect bit parts as personal waiters and synchronised forelock-tuggers, not to mention the joys of cohabitation and permanent renting.

Thursday, 27 March 2014

Through a Glass Darkly

The news that Facebook is buying Oculus, the makers of the much-anticipated Rift virtual reality headset, has been interpreted by many as a forward play for the next iteration of the Internet, beyond mobile and the suddenly quotidian attractions of WhatsApp. This is pretty routine tech-hyperbole, but the claim does possess an internal logic, best articulated by the online game designer, Raph Koster, who distinguishes between an object-centric and a people-centric Internet. An "object" in this sense is not just an intelligent device ("the Internet of things") but also manipulable data (as in a software engineering object). The daddy in this space is Google, with its investment in augmented reality, Nest and Glass, not to mention search. "People-centric" sounds benign, but what it actually means is the ubiquitous mediation of social interactions. Facebook is the daddy here, and it clearly sees VR (virtual reality) as the logical progression of the social space from a 2D page to a 3D world.

VR has the attraction of allowing access to virtual people as much as virtual worlds. At the moment, a sleb's Twitter feed is often the work of a marketing intern. In the future, you will be able to interact with a near flawless bot of Paris Hilton (who will thereby stay forever young). The official announcements on the Oculus deal, and most of the media commentary, have avoided the obvious killer-app for VR technology, which is interactive porn. In time, the Rift headset will be augmented with haptic suits and genital prostheses (the full wank-rig, in other words). The solution to the commercial porn problem of recent years (how do you make money when there is so much free content available) is now obvious: you sell the hardware and software. The real losers will, as usual, be the models. Hentai (Japanese anime porn) is the future, just less cartoonish and more tactile.

Another way of thinking about this is that Google is increasingly in the business of augmentation, while Facebook is moving towards simulation. Koster is smart enough to recognise that this distinction is actually a carve-up; that underneath the applications, Google and Facebook have a common model: "It’s time to wake up to the fact that you’re just another avatar in someone else’s MMO. Worse. From where they stand, all-powerful Big Data analysts that they are, you look an awful lot like a bot. The real race isn’t over the client — the glasses, watches, phones, or goggles. It’s over the servers. It’s over the operating system. The one that understands countless layers of semantic tags upon every object on earth, the one that knows who to show you in Machu Picchu, the one that lets you turn whole visualizations of reality on and off".

Evgeny Morozov caught the flavour of this totalising ambition last year, and also correctly noted that the threat posed by surveillance is not to privacy but to democracy: "The widespread feeling of emancipation through information that many people still attribute to the 1990s was probably just a prolonged hallucination. Both capitalism and bureaucratic administration easily accommodated themselves to the new digital regime; both thrive on information flows, the more automated the better". Both business and the state seek pre-emption: identifying and intercepting a danger before it fully emerges, or identifying and satisfying a want before it fully forms. Both insist that they have our best interests at heart, both insist that it is what we want.

If this sounds gloomily dystopian, there is yet hope. This can be seen in the public reaction to Google Glass. The backlash against "Glassholes" is not just an example of the age-old tendency to give anyone who wants to be different a good kicking (a "hate crime", no less), any more than it is solely a product of socio-economic resentment in an increasingly divided San Francisco. It is clear that what creeps people out is simply the visible sign of intrusion and observation, even when the device is switched off. There may also be a subtext to do with gender and power relations: Glass turns geeks into people who gaze, in the sense defined by John Berger in Ways of Seeing. It is perhaps this whiff of proprietorial entitlement, rather than the corporate logo, that sees Glass bracketed with Google Buses.

There have been attempts to dismiss the backlash as a reactionary spasm in the face of an inevitable future that we will all come to embrace: "The future is on its way, and it is going to be on your face ... Wearables are where we’re going". Glass-wearers have even attributed simple gadget-envy: "Some of the irony is that the people hating on me for wearing Google Glass are probably going to have a pair in six months or a year". But this sounds like misplaced Messianic fervour (it reminds me of Clive Sinclair claiming we'd all be driving C5s). It also fails to address the reality that ubiquity does not make something acceptable. There is a reason why CCTV cameras are out of reach, and it's not just a preference for overhead shots.

The common ground between Glass and Rift, as emblems of their owners' view of the future, is wearable computing. The significance of this is not the technology per se, or even its use in a public space (we've had that since the transistor radio), but the integration with the body and the suggestion that it may not be wholly under the control of the wearer: that perhaps the wearer and others in the public space are subject to it. Naturally, boosters insist that the opposite is true - that wearables make the technology less visible ("out of our way") and more controllable. This worry over wearables is not paranoia about cyborgs, but the long-standing (and historically justified) fear that technology is a means of control. When archaeologists study man's first tools, they are also studying his first weapons.

To come somewhat more up to date, if you think about books as a technology, then the decision of Chris Grayling to limit access to them among prisoners makes perfect sense. The problem with books is that they are asymmetrical. Despite the best efforts of priests and business gurus, they are always subject to the reader, a point appreciated by thinkers from Martin Luther to Jacques Derrida. Books fail to give authority sufficient power over the reader, while potentially they give the reader some power, via knowledge, over authority. In contrast, the degree of control over the subject promised by wearables is enormous. Perhaps in future, instead of books, prisoners will be issued with glasses that flash up encouraging homilies, or deliver brief electric shocks to the recalcitrant.

The wider political context of wearable computing is the tension between privacy and transparency. To be effective, democracy needs both: the ability to determine without coercion (free assembly, the secret ballot) and the ability to interrogate and limit those who seek a mandate. The mediation of transparency has always been the expression of power, which is why the rich own newspapers and governments employ censors. Transparency should be proportionate to power, but the reality is the inverse: the powerless are the most exposed and inspected, while the powerful enjoy the greatest respect for their privacy. The idea that ubiquitous surveillance ("sousveillance") means we can better hold power to account is not only naive, it is positively dangerous because the technology of transparency will always bear more heavily on the powerless than the powerful.

As our ability to interact with the world (both objects and people) is increasingly mediated, transparency, which should contain power, instead serves to increase the cost of privacy, in terms of inconvenience and the loss of utility. Privacy then becomes even more obviously a species of property and thus the preserve of the wealthy. Sometimes, turkeys do vote for Christmas.