Friday, 31 January 2014

The Return of the Trimdon Trimmer

Tony Blair's call for the international community to get behind Egypt's General (soon to be Field Marshal emeritus) Sisi initially sounded like a parody. On second thoughts, it occurred to me that it might be out-of-control spinning by the Egyptian regime, and thus another example of their epically bad media management. On third thoughts, I realised that Blair had probably said the words and presumably meant them. The clue that this is echt Blair is to be found in the the choice of clichés, some of which are beginning to sound rather jaded, hence the easy assumption of parody.

"The fact is, the Muslim Brotherhood tried to take the country away from its basic values of hope and progress. The army have intervened, at the will of the people, but in order to take the country to the next stage of its development, which should be democratic. We should be supporting the new government in doing that". Mutatis mutandis, this sort of language could have appeared in support of any authoritarian putsch since Napoleon III (and there are obvious Bonapartist parallels in the developments in Egypt over the last three years.)

It's the foregrounding of hope and progress that tells you that this is the work of the Trimdon Trimmer. Hope is mere pabulum, but progress is the neoliberal cliché par excellence, if you'll pardon my French. It is so flexible, so opaque, that it can always be wheeled out, regardless of the evidence on the ground. For years we have been making progress in Afghanistan, like Iraq before it. But progress also has a more fundamental meaning, which goes right back to the enlightenment roots of neoliberalism. It presumes a teleology, a belief that we are "on a journey" to a better place, "the next stage of development" (there is a set path, with no possibility of diversion).

The suggestion that the army has intervened "at the will of the people" should be taken with a pinch of salt. As Tony Dale pointed out today at the LRB, Blair has had a hard-on about the idea of a "popular mandate" since the middle of last year, when he claimed that 17 million Egyptians poured onto the streets to depose Morsi. More sober analysts reckon the demonstrations amounted to around 2 million across the country as a whole. To put this in context, the 15th February 2003 protest against the Iraq War is thought to have mustered at least 1 million, and possibly nearer 2 million, on the streets of London alone, with an estimated 6 to 8 million protesting worldwide. This did not lead to a change in policy, let alone government.

Lord Sedgefield continues: "Right here in Egypt I think it is fundamental that the new government succeeds, that we give it support in bringing in this new era for the people of Egypt. And, you know, we can debate the past and it's probably not very fruitful to do so, but right now I think it's important the whole of the international community gets behind the leadership here and helps".

While the faux-chummy punctuation of "you know" is pure Blair, the formulation "right here" recalls the 1999 Fat Boy Slim song, Right Here, Right Now, which sampled the phrase from the 1995 SF film, Strange Days, set in the near future of ... 1999 (the film, poorly regarded at the time, has a resonance today in light of Google Glass and that whole surveillance thing). You suspect Blair will gradually come to symbolise the late 90s in a way that the mid-70s are symbolised by Kevin Keegan, Brut and (sadly) Jimmy Savile. The term "new era" is stock bollocks, but his suggestion that it isn't fruitful to debate the past is hilarious when you consider the ideological importance of the legitimation of history in "the land of the Pharaohs". Here you see the inescapable contempt that teleology has for the past, whether in the guise of neoliberal nostrums about progress or the Taliban dynamiting statues of the Buddha.

A significant aspect of Blair's personal influence on modern neoliberalism has been the extent to which the religious foundations of the secular concept of progress have been tenderly excavated. This influence did not end with his departure from Number 10, but has been raised to a whole new level. It is no accident that he has chosen to focus his talents on the Middle East, where (according to the man himself) "religious difference, not ideology, will fuel this century's epic battles". I have a horrible feeling he may have already visited the site of Meggido and stared purposefully into the middle distance.

The worry is not just that Blair sincerely believes this ahistorical nonsense, but that he is actively working (with a lot of money behind him) to impose this Manichean worldview on the rest of us: "the purpose is to change the policy of governments: to start to treat this issue of religious extremism as an issue that is about religion as well as politics, to go to the roots of where a false view of religion is being promulgated, and to make it a major item on the agenda of world leaders to combine effectively to combat it. This is a struggle that is only just beginning".

Of course, we shouldn't fall into the trap of believing that Blair is a religious fundamentalist in the usual sense. His fundamentalism is ultimately political, rather than religious. But the psychic toll that this has taken on him (he was a self-declared socialist and CND member in 1983, when he started as an MP) has resulted in an ever greater belief that his weltanschauung is ordained by Heaven. To quote from the website of his own Tony Blair Faith Foundation: "the Faith and Globalisation Initiative (FGI) programme fills the vacuum of knowledge surrounding the role of religion in the modern world. It prepares the current and next generation of leaders by providing policy advice, research and analysis". The "vacuum of knowledge" and the "next generation of leaders" are phrases that would have appealed to Diderot and Jefferson.

Tuesday, 28 January 2014

Antisemitism and the Idea of Europe

This year's Holocaust Memorial Day coincided with the arrival of the big guns for the BBC's commemoration of World War One, with Jeremy Paxman doing his best Chris Morris impersonation for the opening salvo of the ambiguously titled documentary series, Britain's Great War (the French barely got a mention). All histories are inescapably moulded by the anxieties of the present, thus in the year of the Scottish independence referendum the unionist angle was covered by the story of the Hearts football team joining the Army en masse in Edinburgh in 1914 (Belfast and Dublin were conspicuous by their absence).

The question of the UK's relationship with Europe hovered overhead as Paxman explored the British fear of invasion and the shelling of Hartlepool, which got as much time as the first battle of Mons. The prospect of a German empire was described with mounting horror, while the reality of the British Empire was reduced to Indian soldiers recuperating in Brighton's Royal Pavilion (a thematic continuation of Paxman's search for positive imperial synergies that started in his 2012 series, Empire).

The war and the EU were also knitted together in a Guardian comment piece by Frank-Walter Steinmeier, the current German foreign minister, who drew direct parallels between 1914 and today: "Europe in the early 20th century was experiencing an early economic globalisation, but foreign policy lacked both the will and tools to foster a peaceful balance of interests". The references to the Holocaust were implicit and couched in the language of classic Ordoliberalism: "Instead of the law of the strong, Europe is governed by the strength of the law". Steinmeier cites George Kennan, the US diplomat and historian, who was a proponent of the balance of power (recast post-WW2 as the Truman Doctrine) and of greater international cooperation in Western Europe to contain Soviet ambitions. The suggestion is that the EU now serves to channel the energies of Germany for the common good: a European Germany rather than a German Europe, in Thomas Mann's famous formulation.

The great debate in twentieth century historiography has been the extent to which WW2 was a direct consequence of WW1 (the "seminal catastrophe", according to Kennan), and thus whether the 1914-45 period can be seen as another Thirty Years War (interrupted by "an armistice for twenty years", in the words of Marshal Foch). In one sense this is uncontroversial - clearly resentment over the Treaty of Versailles helped the growth of Nazism - but the real debate is less about the triggers of conflict and more about the deep-rooted causes. The chief argument in favour of the Thirty Years War thesis is that Hitler was the continuation of a consistent German policy of aggrandisement (there are clear echoes of this in the simplistic views of Michael Gove). The argument against is that German foreign policy was anything but consistent, being characterised more by the flexibility of Bismarck and the opportunism of Hitler, not to mention the serial blundering of Wilhelm II.

This lack of a coherent political explanation has led to a focus on both socio-economic and cultural forces to explain the evolution of German policy. The former sees the promotion of nationalism between 1871 and 1914 as a defence against socialism and a justification for the acquisition of captive markets for German industry. The latter sees German nationalism as essentially congruent with the German language, and thus inherently destabilising because of the language's extensive geographical spread (the Grossdeutschland of the nineteenth century "German question", which led to the Volksdeutsche of Nazi ideology). In this reading, the virulence of German anti-semitism was due to  the predominance of the language among Europe's Jews (Yiddish derives from High German), and the important cultural contribution of assimilated Jews such as Heinrich Heine, rather than just the usual conspiratorial mania common in France and elsewhere. The Holocaust was thus an attempt to eradicate "illegitimate" German-speakers that paralleled the Heim ins Reich policy of seeking to absorb the "legitimate" ones into a monoglot empire.

It has become popular on the political right in recent years to glibly suggest that the ideological roots of the EU lay in the Nazi-imposed New Order of occupied Europe (this trope is also found on the paranoid left), and that the Germans' cunning plan has been to succeed through a mixture of manufacturing and red tape where they previously failed with tanks. This ignores the reality of a radically different system (equipment looting and forced labour migration), as well as the earlier roots of European cooperation in the interwar years (such as the steel cartel which prefigured the postwar European Steel and Coal Community, the forerunner of the EEC), not to mention the Continental System of Napoleon or various customs unions. The British tradition of splendid isolation means that we tend to largely ignore the centripetal forces of the continent.

The chief reason for this mischievous equivalence is the assumed dominance of Germany in the modern EU, which is less a reflection of that nation's post-unification economic strength (not as great as generally assumed) than of France's relative weakness (itself an invented tradition) and the UK's perennial semi-detachment. Britain's support for EU enlargement, cynically intended to slow integration, served to shift the mental centre of the EU from Stasbourg to somewhere between Frankfurt and Berlin. The more profound issue is not that the EU has Nazi DNA, but that as a pan-European project it must necessarily accommodate all of European history, a lot of which has centred on Germany. As the neoliberal Rainer Hank puts it, "the idea of Europe is politically all-encompassing and it is ideologically robust".

In other words, it can mean all things to all people (the confusion of the Ukrainian Euromaidan protests being a current example). The very fact that it appeals across the political spectrum, and is sufficiently vague and aspirational to transcend local difficulties, means that it inevitably overlaps with more unsavoury ideologies. This gives rise to the perception of an institutionalised obliviousness, a willed blindness to its own history, despite all the formal commitments to remembrance and reparation. Hank quotes Julia Kristeva, the French psychoanalyst and writer, on Europe's failure to truly confront its own past. "I am not just thinking of the Holocaust here. I am thinking of the Inquisition, of the pogroms, of colonialism, of machismo or of the wars which devastated the continent and spread out across the whole world".

The post-2008 German accent of the EU gives the traditional vapid teleology of integration ("ever closer union" etc) a slightly more sinister edge, given the burden of history, which is perhaps why we have become more sensitive to signs of anti-semitism, even though it has been part of the background noise throughout the postwar era, right across the continent. Since 1945 it has evolved from old-style pogroms and the ravings of the Catholic right to the indulgence of anyone hitching a ride on the Palestinian cause and the self-proclaimed antagonists of "the system" (Dieudonné et al). That anti-semitism can pop up on both the left and right is a sign of its practitioners' political immaturity, not its universal appeal. That said, anti-semitism, like the idea of Europe, is highly flexible.

Friday, 24 January 2014

The Dharma Bums

The self-regard of the Davos crowd reached new heights with the news that Goldie Hawn has been leading a meditation session in order to combat the stress experienced by "hard-pressed business executives". As any fule kno', stress is the result of a perceived lack of control over one's circumstances, which is why it tends to afflict the poor and the powerless disproportionately more than the rich and the powerful. Claims that the latter are the chief victims of this "killer" inevitably descend into bathos: "[they've] spent the last five years dealing with crises from the collapse of Lehman Brothers to the Syrian civil war -- all connected 24/7 to their beeping, buzzing smartphones". The poor lambs. The irony is that the Magic Mountain was originally noted for its sanitoria, where the neurasthenic bourgeoisie escaped the hurly-burly below. How times change.

The meditation spectacle is intended to convey two messages: that the world economy is recovering after careful treatment, and that the physicians are not the blood-letters of popular imagination but thoughtful and humane benefactors, thus the prominence of "mindfulness". Of course, this is just a reworking of Californian solipsism (self-centred, non-judgemental), hence the symbolic presence of Goldie Hawn. The idea that investment bankers are going to focus on "living in the moment" takes on a different meaning in light of Martin Scorcese's The Wolf of Wall Street. Indeed, one of the most "mindful" books I've ever read was Bret Easton Ellis's American Psycho. What we need is less mindfulness and more thoughtfulness.

Away from the mountain, health reverts from aspirational dharma to its more usual form as a commodity with the news that NHS patient data is to be sold to private companies. Patient data has long been described as an untapped resource, even a geographical area ripe for exploitation, hence the frequency of phrases like "opening up" and "seizing the opportunity". The implication is that it is unclaimed property, alienated from the individual, thus allowing other actors to stake a claim. This tendency is often conflated with the IT concept of "openness", twisting a non-proprietary strategy into a proprietorial land-grab. In the case of healthcare data, the proponents inevitably focus on the benefits for research and better outcomes for patients, rather than commercial efficiency or the creation of new product lines. Well, they would, wouldn't they?

This commitment to "transparency" and "sharing" is in stark contrast to the reluctance of the UK government to make sensitive (i.e. politically embarrassing) data available for decades or even centuries. The news that the state has conveniently lost key documents relating to the Profumo affair was topped by the reports that it is keeping documents relating to the compensation of slave traders safely under lock and key, possibly to avoid drawing too much attention to the extent to which many modern fortunes depended on the recycling of slave capital into early industries in the UK and other types of trade, as much as fear of litigation by the descendants of slaves or by Caribbean governments. The British reticence about the slave trade is memorably exemplified in the works of Jane Austen. While the very few textual references to it have been exhaustively mined to determine that her sympathies were essentially pro-abolition, this misses the point that the whole mise-en-scene, i.e. the wealth flowing through Bristol and Bath that gave the Regency era much of its sheen, was the product of the trade.

The news about the NHS's new revenue stream (branded as the cloying "") has prompted legitimate concerns about the de-anonymisation of patient records, but this ignores the likelihood that the initial goal of private buyers is the promise of "big data" rather than access to specific personal records (though that will come in time). A concern that should be more prominent is whether the data is reliable, given the pressure that now exists to massage performance (the tyranny of targets) and the inherent selection bias of an organisation (ideally) focused on cure and care rather than running trials. There is also a risk that the body charged with managing the release of data to commercial users (the Health and Social Care Information Centre) might eventually be privatised or reduced to a weak regulator, specifically once the NHS has been fragmented and a large enough subset of the data must be sourced from private healthcare providers. The new market in health data will then be complete.

Back at Davos, private companies will continue to lobby governments to ensure that their tax affairs remain private and privileged, even as they push for greater access to the rich datasets of the common herd. The World Economic Forum gathering provided a natural venue for the launch of a new "independent commission" (i.e. neoliberal lobby campaign) to "focus primarily on state censorship of the internet as well as the issues of privacy and surveillance raised by the Snowden leaks". Snowden's virtual presence is intended to provide PR cover for the lobby's chief objective, which is to prevent the Balkanisation of the Internet. Like Goldie Hawn, he is being used, but probably not being paid.

Monday, 20 January 2014

Why Rob Banks?

The recent blather-fest over bankers' bonuses avoided the key question, which is: why do banks make so much money? The American bank robber Willie Sutton, when asked why he robbed them, is supposed to have said "because that's where the money is". The phrase was a journalist's invention, and often misattributed to John Dillinger, but it gave rise to Sutton's Law, which is a variant on the time-honoured principle: consider the obvious. Ed Miliband has proposed that the big five banks be ever-so-slightly broken up to encourage competition, but this will not obviously lead to the banking sector becoming less profitable, so it does not address the key issue - unless you think the issue is the superior magical properties of the number seven.

Banks make too much money. We know this because they pay such high sums in salaries and bonuses (it really is that obvious). Retail banking is not highly profitable, but investment banking and involvement in wider financial services makes the sector profitable overall, albeit more risky. One argument against large bonuses is that these are profits that are being skimmed off by employees to the detriment of shareholders - i.e. the principal-agent problem - however it is clear that enough "owners" are beneficiaries (or are disempowered through intermediaries) to prevent this changing. As the old saying has it, "the best way to rob a bank is to own one". The state bailout of banks in 2009 has meant that future profitability (i.e. at the level of management profits) can now be taken for granted, hence we should not be surprised that the bonus habit has not been kicked. If you ever had any doubts about banking being a one-way bet, you shouldn't now.

The reason banks are so profitable is not that they constitute a cartel (Miliband's implicit criticism), or even that they have a monopoly over money (the argument of those who prefer gold or Bitcoins, whose own behaviour disproves the monopoly claim), but that most of us have a bank account, which wasn't the case as recently as 30 years ago. The rise of financial services profitability reflects the growth in household savings and debt, which is "obvious" when you consider that the broad role of banks and building societies is to convert savings into loans. While we fret about rising debt (legitimately, as so much has been converted into unproductive assets such as property), and the iniquities of rising inequality (exacerbated by the class bias of banking), we ignore the growth in overall social wealth. Bank profits (and thus the divvy of bonuses) are an economic rent on society as a whole.

The way to change this is to limit the scope of commercial banks (the investment/retail ringfence is a red herring as the key issue is profit not practice). This means re-establishing the role of mutuals, cooperatives and not-for-profit savings banks (not the pseudo-mutuals we have today, which are intimately bound up in the banking industry). Again, to state the obvious, the tide of change since the 1980s - of demutualisation, extinction of savings banks, and diversification and mergers - has fuelled the growth in bank profitability, providing access to mortgages and household savings for leverage. Re-engineering the banking sector is hardly a novel proposition, though it's too often justified by questionable claims that it would lead to more business investment (the evidence points to a lack of demand for investment capital rather than a lack of supply), or by the romanticising of mutuals and nostalgia for Captain Mainwaring. I would offer two other reasons for considering it.

The first is that we need to decouple property debt from property prices at some point. The current strategy of insufficient home building, out-of-reach mortgages, and rising private rents cannot go on indefinitely. Whether you think this will be resolved by a bonfire of planning regulations (the market) or by renewed council house building (the state), the consequence must be a drop in the real price of property (i.e nominal prices growing at a slower rate than inflation). A gradual adjustment can be absorbed, but for the duration (two or three decades) it will mean lower profits as mortgages lose their attraction as an asset class (at the macroeconomic level, this just means that funds go elsewhere, ideally into more productive investments - it will also kill equity release, which means consumer demand will fall, though the reduction in mortgage repayments should partly offset this, while more productive investment should lead to rising real wages). Mutuals could accommodate this as their fundamental model is to recycle repayments into new loans. Falling real prices means that the repayments on historic loans can fund proportionately more new loans (conversely, during eras of rising real prices, mutuals must borrow more wholesale funds or limit loan supply - hence the evolution of mortgage-backed securities).

The second reason is technology. Miliband's vision of two new banks on the high street misses the point, even if it is just a rhetorical trope. In the future, there will be many fewer bank branches (they have halved in number since 1990 as online and phone banking have grown), and that is no bad thing. The traditional UK retail model is based on free banking subsidised by higher lending fees (e.g. punitive overdraft charges), upselling (mortgages and insurance) and mis-selling (PPI etc). A not-for-profit, nationalised utility bank, funded by the taxpayer, could support a branch network (merged with post offices in some areas), and so free-up the commercial banks to move to a combination of online-only and a smaller number of specialised business lending branches. This would also allow the commercial banks to divest themselves of "basic" accounts and low-value customers, so reverting to their traditional "well off" market, where service fees would be more acceptable. The nationalised bank should also own the inter-bank payments system (and rebuild it from the ground up) and provide cash-in facilities for traders, wherever they bank. It could also provide self-financing (i.e. zero profit) personal loans to those deemed unattractive by the commercial banks, thus under-cutting the extortionate payday lenders.

Of course, we already have a nationalised bank in the UK, in the form of RBS, and have even created a holding company for mortgages in the form of Northern Rock Asset Management (the bit left after Branson walked off with the branches), so the basis of a utility bank is already in place. What isn't present is the political will to take the next step, which suggests both a reluctance to cross the City and a refusal to even think about the housing crisis beyond subsidising the existing, dysfunctional model. Instead we are offered palliatives such as "easier switching", new "challenger" brands, and "Help to Buy", not to mention Wonga and its ilk.

Willie Sutton was jailed repeatedly and broke out of prison three times. He was eventually paroled in 1969, aged 68, when he was physically incapable of any more robberies. It is estimated that he stole over $2 million (roughly ten times that in modern prices) during his criminal career. When asked, he replied: "Why did I rob banks? Because I enjoyed it. I loved it. I was more alive when I was inside a bank, robbing it, than at any other time in my life. I enjoyed everything about it so much that one or two weeks later I'd be out looking for the next job. But to me the money was the chips, that's all". Why do bankers pay themselves stratospheric bonuses? Not just because they love the money. They love the status, the buzz, the disapproving glares from the rest of us schmucks. So long as we let them, they will keep on doing it.

Wednesday, 15 January 2014

The Manchurian Candidate

The case for HS2 has been somewhat less than robust since day one, but it has now entered the realm of the fantastic with this report in the Guardian: "The arrival of the HS2 north-south railway could help bring down soaring property prices in London and the south-east, according to David Higgins, the former Olympics boss and new chairman of the project". The champions of the New Metropolitan Line are surely getting desperate if they are driven to claiming that it will bring down house prices in London. Next we'll be told that it will help limit increases in electricity and gas bills.

According to the new project boss, "The existing pressure on housing, commercial property prices and transport in London and the south east has become a vicious circle which is counter-productive for both the economy in general and for individuals and their families. By creating extra capacity for commuter trains in the south, and making it easier for businesses to establish themselves in the Midlands and North, HS2 can both reduce that pressure, and spread prosperity, and jobs, more evenly across the country".

This is nonsense, by which I mean not that you might disagree with it, but that it doesn't actually make semantic sense. A "vicious circle" implies some sort of negative feedback: A leads to B which causes more A. Does he mean that supply insufficient to meet increased demand causes demand to increase even higher? What is the mechanism for that? The implication of the non sequitor second sentence is that "extra capacity for commuter trains in the south" will reduce house and commercial property prices (hence the Guardian's interpretation), but this only makes sense if you believe that HS2 will not increase the population of London (and nor will anything else) but will simultaneously expand the commuter belt and thus the avilable stock of housing for London workers (which in turn assumes a buyer's market in Solihull). The fundamental justification for transport is that it increases economic activity, which has the effect of increasing the population and thus "pressure on housing". The idea that HS2 will reduce the price of a two-bedroom flat in Battersea is preposterous.

Higgins isn't putting all his eggs in one basket, so he continues to push the traditional justifications, such as jobs and industrial regeneration ("spreading jobs more evenly", like Nutella on toast). I particularly love "making it easier for businesses to establish themselves in the Midlands and North", as if they were hitherto inaccessible regions: here be dragons. There is, of course, no explanation of the "ease" for Brummie startups that HS2 would provide (in practice, more London wages spent in the West Midlands will boost some local services, but depress others dependent on business activity that then moves to London). As the 2010 report to Parliament by Professor John Tomaney concluded, following a meta-study of high-speed railways around the world, "the impacts of high speed rail investments on local and regional development are ambiguous at best and negative at worst". This is largely because "in countries with dominant capital cities net benefits tend to accrue to these". Given that HS2 phase 1 is essentially a commuter line into London, it is hard to believe that the UK experience will be any different.

In related news, the government plan to spend £20m on a new FE college, somewhere along the route between London and Birmingham, to train railway engineers. This is optimistically slated to open in 2017, in time for the start of phase 1 construction. Of course, this means it will have missed a lot of the actual engineering work, which takes place during design and planning - i.e. ahead of construction - which suggests that the focus of graduates will actually be on inspection and maintenance. According to David Higgins, "by creating a demand for engineering skills over a prolonged period, HS2 can also train a new generation of engineers who can look forward to a career at the cutting edge of technology in this country - something that isn't possible at the moment because of the stop/start nature of projects". A better way to read this is that the government realise they must invest in the skills needed to avoid another Potters Bar or Hatfield tragedy.

Parallel to this talk of speculative benefits, there seems to be a difference of opinion between Higgins and the government in respect of cost control. Whereas the latter appears confident in his abilities - "Sir David Higgins to drive down cost of HS2" - Higgins himself is being understandably cautious, though the wooliness of his language (see above) leaves this open to interpretation, hence the FT say he "dashes hopes of big HS2 savings" while the BBC reckon he "pledges to make savings". What isn't yet clear is whether his caution is simply tactical (i.e. under-promise and over-deliver) or if he is trying to manage expectations down ahead of his initial report in March. It is hard to believe that he can identify any reliable and significant savings at this stage, short of compromises on route (e.g. less tunnelling) or outsourcing the work to the Chinese. Given the political risks of the former, the latter may turn out to be quite attractive.

There has certainly been a head of steam (ahem) building for this option. Boris Johnson commended the uber-state-planning Chinese in contrast to wobbly Labour back in November, Andrew Adonis played the safety card shortly afterwards (i.e. a qualified yes), and the Chinese government are now upping their bid to include local feeder lines. In one sense this is a marriage made in heaven. The pace of infrastructure investment in China is slowing down from its historic peak, and they need to boost high-value exports as their economy shifts to greater domestic consumption, while the UK does not have the skills in depth and would struggle to overtake the competition in France and Germany for the European market. Had we invested in high-speed rail (and engineering education) in the early 90s, instead of privatisation, we might have been in a different position today.

As it is, our FE college suggests a future role as caretakers and regulators, which will at least keep Andrew Adonis happy. The real winners will be the bankers who will handle the flow of Chinese funds through the City. Some will no doubt consider it their patriotic duty to recycle part of their gains into a HS2 season ticket, as they upgrade from a Tudorbethan mansion in Chesham to an original Elizabethan mansion in the Forest of Arden.

Sunday, 12 January 2014

The Non-Revenger's Tragedy

Steve McQueen's 12 Years a Slave is first and foremost a Hollywood film, and therefore constructed out of a series of compromises. McQueen's achievement is in preserving a unity of vision despite the distractions of the music (too emotionally peremptory at times), Brad Pitt as a Canadian Jesus (producer, carpenter, redeemer, beard-wearer), and the happy ending (subtly undermined by a postscript that tells us Solomon Northup then disappeared into obscurity). At times, you are reminded of Roots (the TV series) and Steven Spielberg. At others, of Terrence Malick. I suspect it was McQueen's admiration for the latter that prompted the choice of Hans Zimmer as composer (he provided the score for The Thin Red Line). Some of the atonal and electronic snippets work well, but the full orchestral numbers, while majestic, are like being buttonholed by a florid aunt (fine for Gladiator, but less appropriate here).

McQueen's now well-known trope of the occasional long take, pushed far beyond expectations, works well precisely because of the framework of Hollywood conventions. The most notable is the scene where Solomon is almost hung to death, ending up on tiptoes to avoid strangulation. His would-be hangers have been chased off by the overseer, keen to preserve his employer's property. This melodrama (Tibeats, the ring-leader, "turns tail" in a way that can only be described as classic) is followed by an extended take as the rest of the slaves eventually reappear from hiding to go about their business around the struggling Solomon. The overseer does not cut him down and seems determined that no one else should either. This can be read as makeshift punishment for the slave's part in the fight that led to the attempted lynching, or an insistence that the master's property will not be touched. One other slave surreptitiously provides Solomon with a drink of water, but this feels like Hollywood intruding. The whole point of the scene is that he is a dehumanised object, and treated as such by the blacks as much as the whites.

The other signature long take occurs late in the film, at a point when Solomon has largely accepted his lot and before fate takes a positive turn. We see him in close-up staring off to our left. Gradually he turns his head until he is staring directly into the camera. You can see the mix of emotions - despair, contempt, sorrow - flit across his face (Chiwetel Ejiofor must largely act from the neck up as his body is literally not his own). After a while, he turns his head to our right and the interrogation ends. It reminded me of Elem Klimov's great film about the horrors of war, Come and See, which used the same technique. The title of that film was a reference to the Book of Revelation: "Come and see! And I looked, and behold a pale horse: and his name that sat on him was Death". Coincidentally, Klimov's film was released in the same year (1985) as Clint Eastwood's Pale Rider, whose title was similarly inspired.

Death is constantly lurking, but this is another concession to Hollywood. Plantations were not death camps. While physical punishment was routine, excessive force that maimed or killed was avoided because it damaged property. The casual (and fictional) murder of a slave on the ship transporting Solomon and others from Washington to New Orleans jars because it represents the wanton destruction of capital - someone, somewhere would have been mightily pissed off, given that the going rate for a healthy young male was $1,000. We know this detail because of the scenes involving Paul Giammatti as the slave trader, Theophilus Freeman. Giammatti turns in a compelling cameo as a man whose human sympathy extends "no further than a coin". This is the closest the film comes to the brio of Django Unchained, and it has a particular irony because of the actor's previous role in the TV mini-series John Adams, where he played the anti-slavery Founding Father and second US President.

What is well handled by McQueen and the scriptwriter, John Ridley, is the centrality of property and the extensive use of slaves as debt collateral. The appeal to the rights of property-holders is a constant refrain of the "bad" owner, Epps, while the "good" owner Ford talks more of the obligations that property entails. Both are hypocrites, regularly spouting biblical tosh to defend the indefensible, and both are also clearly incompetent as businessmen. Ford's generosity (a fiddle, not freedom), in response to Solomon's ideas for improving the estate, is as reflective of intellectual barrenness as Epps's belief that a bad crop must be a biblical curse, brought on by the evil ways of his slaves. What is less convincing is the violence, in the sense of its motivation rather than its depiction. This is shown as the product of cowardice (Tibeats), bipolar disorder (Epps's mood swings), and sexual jealousy (Mistress Epps), rather than the inexorable logic of a dehumanising system.

The strength of the film, as in McQueen's previous work, is not just the visceral acting but the counterpoint of visual flair to the bodily suffering. The entr'actes are skyscapes and shots of sunlit trees that owe a lot to Malick's influence. The hanging Spanish Moss lends a languid air while echoing the strange fruit of lynchings. Within scenes, McQueen regularly employs shots fragmented through lines that echo prison bars, such as sugar cane, the spokes of a wheel, and the paddles of a steamer. This hints at a wider system of restraint than shackles, and becomes stronger on the plantations where there always seems to be an unfinished timber frame in the offing and much of the action takes place on or in front of verandas with serried columns. The implication is that everyone, black and white, is imprisoned within the system, which is a very Hollywood cop-out. Nobody appears to be a beneficiary, let alone having a good time.

Brad Pitt's paean to liberty and universal rights boils down to labour mobility: "I can walk out of here tomorrow" (which had me flippantly thinking of Pitt and Angelina Jolie descending on the surprised denizens of some ravaged corner of the globe to dole out aid and sympathy). The question is: could McQueen (like Malick) walk out of Hollywood tomorrow? 12 Years a Slave is an excellent film, with many fine moments to enjoy in between the gruelling beatings, but I suspect that I will be more likely to re-watch Django Unchained, if only because a revenger's farce is more entertaining than a non-revenger's tragedy.

Friday, 10 January 2014

On Workers and Water Cannons

It looks like Larry Summers' IMF speech on "secular stagnation" in November will remain central to economic debate for the foreseeable future. This is as much because of the political ramifications as the economic. To recap, Summers suggests that we (in the developed West) are in an era of low growth, which started well before the 2008 crash, marked by low interest rates and stubbornly high unemployment. As Paul Krugman noted, one implication of this is that we need financial bubbles to provide any sort of oomph to the economy.

In the New Yorker, John Cassidy summarises the former US Treasury Secretary's position as a combination of supply-side causes ("slower growth in the work force and a drop in productivity growth") and demand-side solutions ("ending the disastrous trend towards ever less government spending and employment each year and taking advantage of the current period of economic slack to renew and build out our infrastructure", in Summers' own words). Cassidy characterises this as a "centrist" position, in contrast to the wilder shores of the left where you will find advocacy of "tougher labor laws to spur higher wages, more income distribution, and centrally-directed investment" (yay, the 60s!) In American political geography, as in the UK, the centre is pro-big capital and "relaxed" about finance capital (Summers was a prime mover behind financial deregulation during the Clinton administration).

Cassidy is still drawn to the idea that low productivity growth is the result of a lack of innovation: "The online revolution, after a promising start, has so far proved disappointing. The green-energy revolution hasn’t really got going" (kids today, attention span of a gnat - as the slow-burn impact of online shopping on supermarkets shows, disruption can take a decade or more). As I've previously noted, there are good reasons to believe that productivity growth has been increasingly decoupled from technological innovation since the 80s, and that our current problems are actually the result of transformative technology, not the lack of it. Rather than rehash the arguments about the awesomeness of ICT, I think it worth looking at the other chief culprit in Summers' analysis, namely the slow growth of the work force. This has a particular relevance in the UK because of the current debate about immigration, which is increasingly presented as a trade-off for growth.

Moving the discussion beyond emotion to pragmatic calculation has long been the aim of pro-immigration advocates on both the political left and right, from macroeconomists like Jonathan Portes to the CBI and the City. Not everyone has moved onto the new terrain. Says Nigel Farage: "I'd rather we weren't slightly richer and I'd rather we had communities that felt more united and I'd rather have a situation where young, unemployed British people had a realistic chance of getting a job". Of course, as Portes would point out, lower immigration means fewer jobs for natives, due to lower demand. The inevitable consequence of "less richer with the same number of jobs (now filled by natives)" is lower wages, which might satisfy the small capitalists of UKIP but is unlikely to entice the wider population.

Economic growth over the second half of the twentieth century was heavily dependent on a growing workforce. This was a combination of three things: the high birth rate during the postwar "baby boom"; the increased level of female participation in the workforce (from roughly 1/3rd to 2/3rds of working-age women over the last 60 years); and immigration. The problem faced by the UK (and most other developed nations) is that the baby boom and the move of women into the workforce were one-off events that are unlikely to be repeated. From now on, immigration is going to have to do the heavy lifting.

This might seem a daunting prospect, but in fact the "terms of trade" have never been better. As the developing economies grow, they are producing millions of skilled workers that can be attracted to the developed economies by relatively higher wages. Labour migration then is simply a matter of comparative advantage: we have the money and they have the workers. At a certain point, the wage gap will narrow and the flow of immigrant workers will shrink, however that is probably many decades away. There are plenty of countries still at the back of the development queue with high birth rates and under-employed women (the global population is not expected to top out until early next century). Even when the labour market tightens in emigrant countries, it is likely that this will be eased by further immigration there from less developed countries (similarly, the feared "flood" of Bulgarian and Romanian migrants this year will probably divert towards Greece and Spain, while more Greeks and Spaniards will in turn head for London).

The argument of Farage and others is that we can and should eschew growth in the working population, either settling for a steady-state economy (which finds some support on the eco-friendly left) or using our native intelligence to boost productivity growth instead. Unfortunately, both of these strategies assume a very different economy to the one that we've actually got. A steady-state or zero growth economy sounds nice in theory, all recycling and bucolic contentment, but the reality would probably be increasing repression as the powerful sought to preserve their privileges. The great attraction of growth for the right is that it offers the poor and powerless hope: the possibility of getting on, a larger pie that we can all have a slice of. Despite the continuing attempts of China to prove otherwise, growth and democracy tend to go hand in hand (the neoliberal con is to insist that only markets deliver reliable growth, despite the evidence to the contrary). Stagnation tends to breed authoritarian "stability", like Portugal under Salazar, or Russia under Putin.

A high-productivity economy (the "innovation nation" no less) depends on the free flow of ideas and the stimulation of new thinking, which means new people (like the Russians who developed Graphene in Manchester). There is an obvious correlation between high value-added economies and immigration - just look at London. The idea that the UK could be an exception to this rule is improbable. The bottom line is that the advanced economies need immigration to fuel growth, specifically by stimulating demand. Counter-cyclical government spending and infrastructure investment can certainly help boost aggregate demand, but by its very nature this has to be temporary. Low immigration and persistently high government debt gives you Japan, a stagnation early adopter.

At this point you might wonder why we need more workers, even highly innovative ones, when the robots are going to take over. The point is that workers (unlike robots) are also consumers, and that means they create both demand and product. A growth in the workforce tends to be relatively progressive in terms of wealth distribution as the increase in aggregate demand is widely spread through lots of individual purchasing decisions. Productivity growth is less progressive because it is selective - typically it delivers greater returns to capital. Optimal growth (in mainstream economic thinking) is a mix of the two. Many of our current problems stem from the shift of income from labour to capital, which is the result of productivity (better technology and increased automation) amplified by policy (the privileging of finance through lower CGT etc).

Both automation and the declining birth rate (i.e. the ageing of society) are serving to shrink the share of the population with a healthy disposable income (that they largely spend), at the very time that policy is further consolidating wealth among the elite (who save proportionately more). This has been routinely dressed up as a conflict between the generations in a bid to obscure its class basis. Similarly, immigration has been dressed up as an "issue" for the working class (foreigners taking our low-wage jobs and swamping our state schools), with pro-immigration advocates dismissed as a "metropolitan liberal elite". This serves to distract from the real challenge to the well-off. The choice is not between immigration and growth, because growth is the outcome, not the option. Rather the choice is between immigration and repression. The news that Boris Johnson wants to see water cannon on Tottenham High Road is an agenda-setting victory for UKIP.

Sunday, 5 January 2014

Let England Shake

To mark the upcoming centenary of the Great War, Michael Gove has decided to attack the history dons who ridiculed his inept curriculum proposals last year by conflating Richard Evans with Richard Curtis: "The conflict has, for many, been seen through the fictional prism of dramas such as Oh! What a Lovely War, The Monocled Mutineer and Blackadder, as a misbegotten shambles – a series of catastrophic mistakes perpetrated by an out-of-touch elite. Even to this day there are Left-wing academics all too happy to feed those myths". Confusingly, the headline of his Daily Mail article talks of the approaching anniversary, which routinely happens every year, but then neither Gove nor Daily Mail sub-editors are noted for their care and attention.

Gove's attraction to history is that it allows him to freely insult the dead, who cannot after all sue (the last surviving British soldier, Harry Patch, who called the war "legalised mass murder", died in 2009). This shows the extent to which his political approach is influenced by his background in journalism (you can take the boy out of the gutter press ... etc). Where Boris Johnson acts like a particularly unhinged and solipsistic columnist, Gove clearly sees himself as a leader writer, thundering about iniquities while insisting on formal politeness at all times. In 2013 his assaults upon the dead included his snide equivalence of Jade Goody and Antonio Gramsci and his insistence that the Daily Mail's hatchet-job on Ralph Miliband was "the price we pay for liberty" (eternal vigilance now being the monopoly of GCHQ).

As ever, having wrapped himself in the flag, Gove pleases his regular employers at the Daily Hate by insisting on press freedom, which he thinly disguises as a universal right rather than the privilege of rich nutters: "But whatever each of us takes from these acts of remembrance and hours of debate it is always worth remembering that the freedom to draw our own conclusions about this conflict is a direct consequence of the bravery of men and women who fought for, and believed in, Britain’s special tradition of liberty". The Mail's respect for drawing one's own conclusions was coincidentally highlighted last week by their review of Polly Harvey's guest-editorship of Radio 4's Today programme as "drivel" and "left-wing rants". Harvey's filtering of the Iraq and Afghanistan wars through the imagery of the Great War, in Let England Shake, did not find favour.

One of the targeted dons, Richard Evans (who wittily summarised Gove's ideal curriculum in 2011 as "the wonderfulness of us"), was notably scathing about the Education Secretary's previous forays into Great War history last year: "Only from a narrowly British perspective, and in ignorance of modern scholarship on the period, is it possible to view the end of the war in 1918 as a victory for Britain. The men who enlisted may have thought they were fighting for civilisation, a better world, a war to end all wars, a war to defend freedom: they were wrong". As Evans noted in reply to Gove's latest article, the simplistic attempt to paint Willhelmine Germany as bad and Britain as good simply doesn't square with the facts: "How can you possibly claim that Britain was fighting for democracy and liberal values when the main ally was Tsarist Russia? That was a despotism that put Germany in the shade and sponsored pogroms in 1903-6."

Many other critics have noted that in 1914 Germany had universal male suffrage, while Britain didn't, which gives you an insight into the latter's "special tradition of liberty" (and all this without mentioning Ireland or the colonies). Evans's point is not that Britain was guilty of hypocrisy in 1914, any more than it was in allying with Stalin's USSR in part deux, but that declared war aims, whether contemporary or retrospective, should be treated with scepticism. If history is a trial (i.e. an attempt to establish truth), then the role of the historian is more akin to a prosecuting or defending counsel than a judge, and the acceptance of this multiplicity - that there may be two or more sides to an argument - is central to the method. Perhaps the finest film ever made about history (as opposed to a film merely set in the past) was Rashomon, precisely because it presented multiple, conflicting perspectives.

The broader consensus about the Great War, from left to right, and a key reason for the subsequent revulsion, is that it was a case of unintended consequences, not a noble matter of principle. It was first and foremost a political blunder, by a complacent elite (all wars are initiated by elites), before it was a military one. Though economic and geopolitical pressures made European conflict likely (the underlying causes of war are often described with the acronym MAIN: militarism, alliances, imperialism and nationalism), many politicians and military strategists believed it could either be contained by diplomacy (the system of alliances was meant to spread risk, not amplify it - a strategic error similar to the dilution of financial risk in the years before 2008) or, in the worst case, would produce quick military resolutions (famously the Schlieffen Plan). The continuing sensitivity over Great War historiography, and its modern relevance, is entirely down to the evidence it provides for the self-delusion of the powerful.

Britain's involvement in the war was a consequence of the traditional pragmatic policy of seeking a balance of power in Europe overlaid with the newer ideology of "liberal intervention" that had been used to justify the expansion of empire during the nineteenth century. The spirit of jingo was inspired by the perceived threat to Britain's global interests in the Victorian era, and initially directed more at Russia and France than at Germany. While this evolved into a perceived existential threat, embodied in the popularity of invasion novels such as The War of the Worlds and The Riddle of the Sands, the underlying motivation was essentially the defence of property - i.e. holding on to Britain's privileged "place in the sun".

Nationalism was the chief means used to mobilise support for the war (i.e. to get the property-less to defend the rights of property-owners), but this was soon augmented by atrocity stories and crude appeals based on the threat to women and children (always popular with the press). Since the evaporation of visible empire, the British right's appeal to nationalism has morphed into the defence of sectional interests, notably the rights of small capitalists to pay crap wages and of finance capital to pay itself whatever it can get away with. Thus the current media focus on benefit cheats, itinerant Romanians (possibly vampire gypsies) and Boris Johnson's cornflakes.

Gove's intervention in matters historical, as much as his class-oriented education policy, is a means of bolstering his support on the right of the Tory party, at a time when Cameron is being accused of a policy of "let's not be beastly to the Germans". Professors of history like Richard Evans are wasting their breath if they think that Gove is either open to persuasion or even that he fully believes the nonsense that he spouts. With the prospect of Cameron failing to secure an outright majority in 2015 still very much on the cards, Gove's cultivation of the Daily Mail constituency is a necessary preparation for the "big push" to come.

Thursday, 2 January 2014

Detachment Theory

Much of the response to the new series of Sherlock has focused on the increased humanity of the protagonist, shown through the introduction of his parents and the warmer sibling rivalry with Mycroft (their playing of speed-Operation was a nice touch). The seasonal subtext was the love-hate of family and the warm glow of friendships reaffirmed. Fans (who got their own homage plus some incidental fanfic sexual fantasy) stay happily on the hook as the solution to the not-fatal fall remains unexplained, though some have grumbled about the rather uninspired plot at the centre of the fun. They seem to have forgotten that it's also panto season: a decommissioned Tube station, a bomb under the Palace of Westminster, and a peer in the pay of North Korea. Short of a couple of homicidal ugly sisters, it couldn't have been more obvious.

Naturally, you can't please everyone. Tim Stanley in the Telegraph reckons that "Sherlock owes less to Arthur Conan Doyle than it does to Marvel comics". The improbability of his resurrection, not to mention powers of deduction that "bordered on the psychic", mean that Sherlock is a superhero, even a god: "Jesus with OCD". This is a reactionary bleat against the blasphemy of man, the enlightenment Prometheus who challenges throne and altar. Stanley reveals his true colours when he bemoans the gay running-gag as evidence of "the death of brotherhood" in modern society, as opposed to the evolution of tolerance. The playful resurrection conceit ("I believe in Sherlock Holmes") is clearly a riff on the madness of a voracious media that deifies and demonises by turn. There were many similarly Pythonesque moments to enjoy, from the barking fan club through Mycroft's foolproof method for learning Serbian.

The inability of fogeyish conservatives like Stanley to "get the joke" is a badge of honour. This is not just the elevation of moral seriousness above frivolity, which turns plenty of lefties into humourless bores as well, but the deliberate isolation of the contemptible and decadent. What Stanley fails to appreciate is that Sherlock is camp - or more precisely High Camp with a dash of the post-modern (the fluid boundaries between actor and role and between fan and fiction). As Susan Sontag wrote in the 60s, "The whole point of Camp is to dethrone the serious". But this is not the mocking laughter of the cynic: "Camp proposes a comic vision of the world. But not a bitter or polemical comedy. If tragedy is an experience of hyperinvolvement, comedy is an experience of underinvolvement, of detachment." But this raises the question, what is Sherlock detaching us from? Let us employ the Holmesian method to see if we can find out.

As the world's first consulting detective noted, his method was one of "reasoning backwards" from effects to causes. Presented with a crime, he would seek to create a pattern from disparate data that would explain why and how the crime occurred. In The Hound of the Baskervilles, he expanded on his method: "we hold several threads in our hands, and the odds are that one or other of them guides us to the truth. We may waste time in following the wrong one, but sooner or later we must come upon the right." This explains the need for large amounts of data and also hints at the network mapping that is central to its interpretation. It also emphasises the importance of the apparently inconsequential (Homles's party trick) and suggestive absences (the dog that didn't bark, most famously).

In Holmes's method there is usually a "singular feature" that starts the process of deduction. In the current TV series, that feature is his use of information technology. Sherlockian gadgets are just updated variations on old habits, thus the smartphone replaces Bradshaw's Railway Guide and his monograph on the varying tensile strengths of natural fibres is now a blog post. Though a modern-day Sherlock would struggle to survive without the Internet, given how much information is now only available via that medium, the human brain is centre-stage at all times. Related to this, we have the explicit introduction of the "mind palace" (or method of loci) technique as his key working tool, represented in whizzing text overlays as he presses his temples. You never saw Basil Rathbone do that, because Conan Doyle never described it.

Sherlock is an information system incarnate, hence the desire to humanise him. The data network is represented through the old-fashioned method of pinning things on the wall in order to create connections. At the heart of the network are photos of people Sherlock refers to as "markers", shady people whose atypical activity (e.g. fleeing the country) may indicate an attack is imminent. Though The Empty Hearse centred on the prevention of an implausible crime (the bomb plot), and the failure to adequately explain another (the near immolation of Watson), small crimes were satisfactorily solved along the way on the basis of a few inconsequential facts. These were cameos of domestic betrayal, such as the cheating husband and the abusive father, implying that the truth about ordinary folk is easily deduced.

What the camp of Sherlock is detaching us from is the reality of surveillance, which depends on banks of servers and questionable algorithms, not a discriminating mind. If camp is detachment, then it succeeds by making the gap between reality and representation obvious, like a middle-aged Irishman in drag (Mrs Brown's Boys was the other big festive TV hit, condescendingly admired by Tim Stanley for "irritating the kind of people who claim to understand Sherlock" - apparently there is a rule against enjoying both). In this sense, Mark Gattis's camp interpretation of a fogey state suggests a different reality (incompetent, venal). For all the bromance, the key relationship is not between Sherlock Holmes and John Watson, but between Sherlock and his brother Mycroft. It is the love-hate of information technology and government.

Between the second and third series came the Edward Snowden revelations. I have no idea if they informed Mark Gatiss and Steven Moffat in any way, but the personification of information (Sherlock can deduce as much about you as Facebook can), and its uneasy relationship with the security state, looks to be at the heart of its camp "detachment".