Wednesday, 31 January 2018


Arsenal reached the two-thirds point of the season last night in classic style, losing 3-1 to bottom-placed Swansea, which allowed the Welsh club to leap out of the relegation zone for at least a day. Given that this was a match of barely credible cock-ups by the Gunners, fans were left fearing that the well-trailed transfer of Pierre-Emerick Aubameyang was about to go tits-up as Olivier Giroud came on. Surely he would get crocked within 5 minutes, so scuppering his move to Chelsea and Michy Batshuayi's linked transfer to Dortmund? In the event, Giroud remained typically unruffled and the Gabonese international's move to London was confirmed this morning, though it is doubtful a fresh striker is all that we need to turn around a season teetering between modest success and dull failure. The rumour that David Luiz might travel in the opposite direction to Giroud didn't help. Despite late-Wenger Arsenal's reputation for football as improvisational jazz, the last thing we need is another impulsive defender with a tendency to nod off at key moments. More positively, Mesut Ozil (football's Thelonious Monk) is reported to have extended his contract to 2021.

Our points tally for the first third of this season was 22; for the second it was 20. Last season we got 25-25-25 and finished fifth. The previous season we managed 26-22-23 and finished second. Given the higher number of points among this season's top-four at this stage, and assuming Arsenal don't dramatically improve and secure 30 in the final third, we're looking at a finish under 70 points for the first time since 2011 when we finished fourth on 68. I suspect this year such a total would secure no better than sixth, which means our continued presence in European competitions in the year of the Glorious Brexit may depend on winning the Europa League. That's not beyond a team that has proven capable of raising its game in cup competitions, but the early exit from the FA Cup against Nottingham Forest suggests we may even be losing that knack. The Carabao Cup may yet put a gloss on the season, and in many respects I'd rather we faced a team like Manchester City in the final rather than one determined to exploit our weaknesses more than rely on their own strengths, but finishing the campaign empty-handed and well off the pace is looking increasingly likely.

Given Petr Cech's recent mistakes, notably at Bournemouth and Swansea, and his increasingly forlorn search for that elusive 200th clean-sheet, I doubt he will be first-choice goalkeeper beyond the end of his current contract, which ends in June 2019, and perhaps not even beyond the end of this season if David Ospina leaves when his contract expires in July. With Emi Martinez and Matt Macey too young, Arsenal will need to buy an experienced 'keeper in the summer. That won't necessarily mean an immediate end to Cech's Arsenal years, and I'm sure many would welcome him eventually following the same route as Per Mertesacker into coaching at London Colney (though Jens Lehmann might have something to say about that), but you have to expect that the 35 year-old will spend a lot more time warming the bench in future, unless he chooses to drop a level or return to Sparta Prague. In retrospect, I still find it hard to understand why Wojech Szczesny was shipped off to Italy. He might have got on the wrong side of Arsene, but at 27 he is now entering his prime at Juventus and the current manager isn't likely to be around beyond 2019. That looks like a blunder by the club hierarchy, and evidence that they have been reluctant to over-rule Wenger.

Goalkeeping errors can cost you points, but the number depends on opportunity and therefore the quality of the defence generally. More worrying than Cech's slow decline is the increasing fragility of our central defenders. Arsenal hasn't been a strong defensive team for over a decade, but the current setup looks particularly erratic. If we look at the goals for and against at the end of the four seasons between 2013 and 2017, the progression is 68-41, 71-36, 65-36, 77-44, suggesting a significant drop-off in 2016-17 masked by attacking efficiency. The tally for the 25-game mark of those seasons was 48-26, 47-28, 39-22 and 54-28. The move to a back three was meant to provide greater defensive resiliency without impeding our goal-scoring, but it hasn't been as effective as Chelsea's switch in Autumn 2016, hence the chopping and changing in formations this season. At the 25-game mark we have scored 46 and conceded 34. While there is every reason to hope that we'll improve in attack and thus pick up points, at this rate we could finish the season with a goals against total of 50. If you want to win the league, you usually need to score over 80 and concede fewer than 30.

With Koscielny now limited by age and chronic injury, Mustafi unconvincing, and Holding and Chambers still raw, we are going to need to invest in at least one established central defender soon, notwithstanding the arrival of the promising Greek youngster, Konstantinos Mavropanos, at the start of the January transfer window (apparently a Sven Mislintat pick). Jonny Evans wouldn't be an upgrade, in my opinion, though Roma's Kostas Manolas might be. Counter-intuitively, a player like David Luiz might be able to fill the defensive midfielder slot that neither Francis Coquelin nor Mohamed Elneny has managed to make their own, though buying a specialist in that position would surely be the simpler option. The way that Elneny has moved between defence and midfield during recent games might suggest a conscious plan rather than improvisation, or perhaps just Wenger harking back to the flexible role played by Emmanuel Petit. On the flanks, we will almost certainly persist with attacking full-backs, which is fine by me, but this just increases the need for greater solidity in and around the penalty area, as well as more movement in attack to create short-passing combinations when they overlap.

Elsewhere in midfield, the question remains whether Granit Xhaka is worth Wenger's continued indulgence, given the number of times he is caught ball-watching as another opponent steals in to score. For all his passing accuracy (on his day), he remains too slow for my taste and too much of a liability if you want to accommodate Jack Wilshere or Aaron Ramsey. While those two never quite hit it off as a pair, not least because they instinctively made the same runs, I suspect that age and greater wisdom might make them more compatible now. While it would be fun to see them flanked by Ozil and Mkhitaryan and with Lacazette and Aubameyang up-front, I suspect that will be a Plan B only. Plan A will presumably sacrifice a striker for a holding midfielder and rotate Wilshere and Ramsey for a single slot alongside Xhaka. My own belief is that Arsenal's balance requires the Swiss international to be dropped to the bench. His utility has been blunted by opponents sitting deep, preventing him using his long-range passing to get attackers in behind, while he doesn't have the burst of speed to open up angles for shorter passes.

While Sven Mislintat, Huss Fahmy and Ivan Gazidis will get plaudits for the Aubameyang and Ozil deals, the real test for the new "talent acquisition" regime will come with long-term reinforcements for central defence and midfield, if not during this window then certainly in the summer. So far, Gazidis appears to have delivered on his promise of a shakeup while Wenger has remained diplomatic, a sign that he knows his tenure is coming to an end and that the new guys must be given a degree of autonomy during the transition. Assuming no more significant activity today (there's just under 5 hours to go before the transfer window shuts), I think it would be fair to say that the club is finally shaking off its recent torpor. The question now is whether a rejigged attack will be enough to compensate for a fragile defence and produce something close to 10 wins out of the remaining 13 league games, not to mention victories in the cups. I'd love to see it happen, but I suspect the need for bedding-in will make it difficult. We're going to be improvising for a while yet.

Friday, 26 January 2018

I'm With Her

The poetry world is apparently split because the poet Rebecca Watts has dissed the poet Hollie McNish, among others, for her "denigration of intellectual engagement and rejection of craft" in favour of "personality". This tale is interesting because of the parallels with the recent fuss over the high-profile French pushback against the #MeToo "movement" (or #BalanceTonPorc, "call out your pig", as it is more assertively styled in France), in which various grande dames of literature, cinema and academia protested against what they see as a new puritanism that casts women as victims. While the liberal media have mostly sat on the fence over Watts's entertaingly acerbic diatribe, they have tended to condemn the Frenchwomen for letting the side down and have done so in terms that are unapologetically ageist: "Although there is a range of ages represented among the women, there is something of a generational tinge to the discussion. They object to the imposition of new rules on established figures". Of course, what this really points to is a clash between an establishment and its challengers.

The victims of Harvey Weinstein were predominantly younger women in Hollywood, but it was noticeable how quickly older, more established women joined a campaign that at its heart is concerned with the abuse of economic power and status. This may have been prompted by solidarity, but it may be counter-productive. As the scope of the investigation into sexual harassment rippled out across the film industry, we were faced with another spin of its "greatest hits", including Woody Allen, Roman Polanski and Kirk Douglas. The result was to obscure the issues of power and institutional connivance behind tales of individual wrongdoing or the collective failings of a gender (#NotAllMen was unironically adopted by equally established males who sought to signal their virtue). What was telling in Meryl Streep inviting Ai-jen Poo of the National Domestic Workers Alliance as her plus one to the Golden Globes was the way that an institutional failing had been promptly institutionalised. That the glittering event culminated in Oprah Winfrey being promoted as a future President of the United States was beyond parody.

Such a co-option hasn't been as evident in France, partly because of historic divisions within French feminism centred on a distrust of America. This has produced the air of a generational stand-off, but one centred on a substantive disagreement over both the nature of harassment and how it should be tackled. That this has been presented in the anglophone media as a cat-fight is inaccurate but predictable. A similar gulf in worldview appears to be operating in the small world of British poetry, but this one is more geared to class than age. Watts, who is in her 30s, is an Oxbridge alumnus who writes technically accomplished poems that display her thorough familiarity with the established canon, from Dickinson through Auden to Heaney. Though she emphasises the art, her criticism of the likes of Hollie McNish and Kate Tempest is also political, which she makes explicit with a comparison to Donald Trump: "Like the new president, the new poets are products of a cult of personality, which demands from its heroes only that they be 'honest' and 'accessible', where honesty is defined as the constant expression of what one feels, and accessibility means the complete rejection of complexity, subtlety, eloquence and the aspiration to do anything well".

The "cult of personality" is a strange target to choose when you consider its centrality to the Romantic poets, or indeed the way that later confessional poets, like Sylvia Plath, have been turned into cults. The sarcastic reference to honesty and accessibility hints at the plain-spoken and the humdrum, which is just a round about way of saying working class. As the tenuous association with Trump makes clear, this is a criticism of vulgarity. Poetry has always been vulnerable to the incursion of the common sort, largely because the means of production and distribution have been more accessible than other art-forms. This has led to a long history of working class or lower middle-class poets tolerated as tragic exceptions or amusing eccentrics, from John Clare to John Cooper-Clarke (the publication of Mark E Smith's Collected Lyrics is surely imminent). That Robert Burns has been anachronistically accused of being a "Weinsteinian sex-pest", largely on the basis of his bawdy language rather than his abuse of power, shows that propriety is in a ceaseless struggle with prosody. In dismissing the unschooled, Watts makes the now standard plea for the value of expertise: "If we are to foster the kind of intelligent critical culture required to combat the effects of populism in politics, we must stop celebrating amateurism and ignorance in our poetry".

The title of Watt's article is derived from Andrew Keen's 2007 book, The Cult of the Amateur, which decried the democratisation of social media (or Web 2.0, as it was then called), accusing it of undermining expertise and excellence as the cost of the means of artistic and critical production fell (here's an earlier summary of his argument). Keen saw this as a fulfilment of Marx's Utopian vision of a society in which everyone could pursue their preferred and multiple interests: "to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic". Keen didn't see this as a good thing. In his view, the creative self-realisation of social media was a seductive fantasy and a form of narcissism that was dangerous for the vitality of culture. This isn't a novel critique. The idea that society depends on an order in which we each have an allotted role goes back beyond Plato. In its modern incarnation, the party of order does not necessarily insist on the fixity of roles (precarity has its advantages for employers, after all), so long as there is a recognisable hierarchy that maintains privilege (see the President's Club etc).

Keen uses the word "amateur" to describe someone who is unqualified and lacking in accomplishment, which means ignoring that in its original sense, in the late 18th century, the word connoted privilege. You needed independent means and free time to pursue the love of a particular subject. As the 19th century progressed, and as the means of cultural production and dissemination were commoditised, the salaried middle class were increasingly able to cultivate the sort of amateur interest previously limited to the rich, hence the explosion of artistic and scientific societies. As the working day shortened and surplus income grew, this process extended further down the social scale, blurring the distinction between the amateur and the hobbyist, which explains why the former took on an increasingly pejorative meaning. What was notable was not so much that the means of artistic or professional production had been democratised (most remained out of reach for the majority of people) but that the social role of the amateur had been demoted. It was a loss of privilege.

The middle class fear of the Internet combines a number of traditional themes: the suspicion of an intrusive state (surveillance), the fear of social disruption (the loss of middle class careers and the erosion of professional status), and the fear of the lower orders (dumbing-down, mob-rule, lack of emotional restraint). The conservative roots of this are evident in the air of nostalgia, harking back to a better time before we were corrupted, hence the flexible meme "we have lost the ability to think/read/communicate", and in the burgeoning panic over the damage that smartphones are supposedly doing to fragile young minds. For all his concern about the hollowing-out of the middle class, Keen is primarily concerned with maintaining the privileges that he considers are due to excellence. This has become ever more explicit in his pronouncements. Today he insists that "When you do away with curation you undermine truth", a claim that shows how his aesthetic distaste for amateurism has hardened into a philosophical defence of elitism. His prescriptions, outlined in his new book, How to Fix the Future, are regulation, competitive innovation, consumer choice, civic responsibility, and education. In other words, muscular neoliberalism.

That Watts' and Keen's calls for curation and excellence are finding a receptive audience among liberals as much as conservatives is because of a longstanding fear of vulgarity, not just because of the structural erosion of the privileged print media by digital upstarts over the last two decades. The emblematic importance of Steven Spielberg's film The Post lies not just in its nostalgic evocation of a powerful press imbued with civic responsibility but in its choice of protagonist. Richard Nixon was famously the most crude and profane President prior to the current incumbent. The story of Katherine Graham is as much about noblesse oblige as the battle against everyday sexism and political mendacity. That Catherine Deneuve - the face of Marianne, no less - has been criticised in France for her #MeToo scepticism is a sign of cultural health. That Meryl Streep has become the public face of the #Resistance in the US is a sign of cultural sclerosis. That one little-known British poet has criticised another, essentially for the wrong sort of felt experience expressed in the wrong sort of language, is a sign of how increasingly marginal and petty the UK is.

Monday, 22 January 2018

Polarisation and Class

In a recent tweet, Matthew Goodwin suggested that a YouGov survey on Brexit sentiment indicated a "polarised Britain". It's not evident that the data show any such thing, not least because attitudes to Brexit clearly exist on a spectrum, which raises the question of what a British political scientist might mean by this term. The concept of political polarisation takes two forms: an increase in the policy differences (and thus "distance") between the two main parties and a greater degree of party identification and mutual dislike (i.e. partisanship) among supporters. These are not the same thing, and can even move in opposite directions, though the one may influence the other. In practical terms, polarisation at the party level reduces the likelihood of policy cooperation. The recent US government shutdown is taken as evidence of polarisation between Republicans and Democrats, while the current debate within Germany's SPD over a "grand coalition" with the CDU/CSU is taken as evidence of a less polarised polity. Both the "culture wars" in the US and the return to a straight two-party fight in the UK have been interpreted as growing polarisation within the electorate, though it could be argued that both actually reflect greater polarisation at the party level.

In the field of political science, polarisation has predominantly been seen through the lens of American experience and its modern incidence is usually traced back to the realignment that followed the Voting Rights Act of 1965, when conservative Southern Democrats started to gravitate towards the Republican Party and the latter's liberal tradition, then embodied by Nelson Rockefeller, withered away. In effect, this process sorted voters into more clearly defined liberal and conservative camps, which in turn encouraged the parties to adopt more ideologically consistent positions over and above the covert appeals to race embodied in Nixon's Southern Strategy and his invocation of the "silent majority". This means that polarisation has been a persistent feature of the neoliberal era. That might appear paradoxical in view of the emergence of the Washington Consensus, but it might also suggest that polarisation, particularly around issues of values and identity, has been a compensation for a lack of real disagreement elsewhere, which in turn explains the increasing use of rhetorical tropes such as "tribalism" in its framing.

In contrast, the story of the UK was presented from the late-80s onwards as the decline of tribalism, both in the sense of socio-economic group identification and party affiliation. This reflects the greater association of political tribalism with socio-economic class in Britain. As class was marginalised ("We're all middle class now", as John Prescott once said), the use of tribalism as both an analytic metaphor and a rhetorical trope declined, increasingly replaced with technocratic appeals to "what works". Conventional British wisdom from the 90s onwards was that elections were won from the centre, which meant that polarisation had less utility in British political analysis than it did in the American equivalent. The recent revival of the term is largely the work of centrists aiming either to clear an ideological space for a new "moderate" party formation or to encourage a repeat of New Labour's shift to the right. A rider to this has been the insistence that Brexit shows that the traditional dividing line of socio-economic class is fading and being replaced by a new division centred on cultural values ("open" vs "closed") and demography (old vs young). In other words, polarisation may be on the increase but it has nothing to do with class.

Goodwin shares the centrist view that the British political landscape changed in the 1990s, but rather than seeing this as the triumph of technocratic managerialism over special interests, he casts it more as the replacement of a socio-economic class cleavage by one centred on "cultural" values, such as a dislike of immigration and gay marriage, and thus comparable to US developments. This goes further than the idea of a post-material politics to ascribe predominantly reactionary values to the working class. In Goodwin's reading, the change manifested itself at the political level first in the limited success of the BNP and then in the growth of UKIP, as described in Revolt on the Right, which he co-authored with Rob Ford. This interpretation was amplified by centrists who stressed the tension within the Labour Party between non-metropolitan traditionalists (Northern MPs, Blue Labour etc) and a cosmopolitan, progressive elite. Though this has always been part of Labour's makeup, deindustrialisation and the post-material turn were expected to (finally) cause a rupture, which would manifest itself in the "traditional white working class" flocking to the Tories in 2017. In the event, it didn't work out that way, leading to Goodwin having to eat a page out of his book on Brexit live on TV.

The return of traditional two-party politics in the UK is a reversion to the historic norm, but much of the analysis since June last year has described it as an increase in polarisation, despite no real evidence that voters have changed their opinions or that they have become more partisan. If anything, opinion polling on policies and attitudes has confirmed that voters have largely held the same opinions for years, for example consistently favouring nationalisation of public service providers and being mistrustful of big business. What has actually changed is that the subjects of opinion polls and focus groups have broadened out from the narrow obsession with leadership and electability that dominated political coverage from the mid-90s onwards, reflecting the greater prominence of substantive policy debate since 2008. In retrospect, Labour's failure in 2015 looks to have been the result of timidity, both in its reluctance to seize the policy initiative (e.g. its acceptance of the Tories' deficit narrative) and in its hesitation in dropping the superficial signalling that had marked the previous two decades (those immigration mugs and the "Edstone").

A stronger argument can be made for an increase in polarisation at the party level over the last couple of years, for two reasons. First, Labour's shift under Corbyn to a politics that is both policy-led and recognisably within the tradition of postwar social democracy has served to define a credible alternative to neoliberal orthodoxy. Second, the Tories' obligation to own Brexit has required them to give a more nationalist inflection to neoliberalism, hence the halting gestures towards economic justice and social responsibility. Though it proved to be a disaster in many ways, the Conservatives' 2017 manifesto was significant for its emphasis on policies, however poorly thought through some of them were. The schizophrenia of the Tory campaign, caught between the vacuity of "strong and stable" and the buttonholing of the manifesto, has already become legendary, but we shouldn't allow this to be framed by Tory apologists like Tim Shipman as a matter of personality clashes or technical misjudgements. This was a party in transition from the glossy leadership of the Blair/Cameron era to the new policy seriousness, and as such the Tories in 2017 were not that dissimilar to Labour in 2015.

Though support is coalescing around the two dominant parties to the exclusion of others (though not as much as in the 1950s), this isn't polarisation except in a narrow technical sense. Rather than polarised, a better interpretation is that Britain is more politically engaged than it has been for a while - probably since 1997 - and that the two main parties are responding to this by defining clear policy differences, for example over nationalisation, rather than by trying to pitch a "best price" for an essentially common offering. Labour has made the most progress in this regard, which in part has been due to its careful ambiguity over Brexit, while the Tories look like they will struggle to catch-up until Brexit can be consigned to the out-tray. Assuming that the smaller parties maintain a hardcore of support (though the implosion of UKIP looks increasingly likely), the next general election will probably come down to swing voters, that is people who cast their ballot in response to specific policy preferences and with an emphasis on material concerns, such as housing, public services and wages.

Unless you imagine these individuals as manic, pinballing from one extreme to another, this suggests that talk of a polarised Britain, or indeed of a post-material politics, is exaggerated. In the case of Matthew Goodwin, this looks like an attempt to preserve the idea of a cultural cleavage that supersedes class interests. This shouldn't come as a surprise from someone who has built a career on the twin ideas that values are now politically dominant and that this provides a vector for the far-right to enter the political mainstream. A return to material or class politics marginalises the far-right as a subject of academic interest. What is more surprising, or perhaps just dispiriting, is that centrists have decided to pursue a similar strategy of exaggerating polarisation in order to delegitimise Labour's shift under Corbyn. In so doing they are reinforcing the Goodwinian narrative and thus the idea that the electorally decisive bloc is made up of Northern, working-class reactionaries. Just as the instrumental use of polarisation by parties under neoliberal hegemony in the US led to the election of Donald Trump, so the same dynamic in Britain risks preserving the dishonest discourse of "legitimate concerns" that should die a death with UKIP.

Tuesday, 16 January 2018

The Legacy of George Osborne

The collapse of Carillion has been heralded as a watershed moment for privatisation. I doubt that's true. The deficiencies of public sector outsourcing and PFI deals have been known for decades, while the prospect of a major change in public sector management is probably only going to occur with a change of government, which may not happen before 2022. The refusal to bail out the business, even though it means more write-offs for state-owned RBS, suggests that the government is keen to avoid the distraction of both a specific inquest into the company and a general debate about public services and infrastructure investment. The desire to protect taxpayers' money is incidental. Given the competing demands of Brexit, that is hardly surprising. While John McDonnell's robust insistence on a public inquiry has been predictable (imagine how this would have been handled by Ed Balls), the failure of George Osborne to make his now habitual dig at Theresa May was less so.

The former Chancellor's editorial in yesterday's Evening Standard, which relegated the topic behind the scourge of plastic waste, suggested the root cause was a combination of the excessive size of Carillion and the tendency of civil servants to prefer the devil they know: "The failure to use a variety of smaller, mid-size companies undermines innovation and leaves services hostage when things go wrong". What is missing from this timid analysis is political accountability. The push for government contracts to go to more and smaller firms was a cosmetic gesture during Osborne's tenure at the Treasury that has resulted in minimal change for pretty obvious structural reasons. It has little to do with civil servants' aversion to novelty. His claim also obscures that the material change in circumstances in 2010 was the imposition of austerity. This led to Whitehall putting the screws on suppliers to reduce contract costs, which was one of the contributory factors to Carillion's eventual demise. This was a death long foretold. As the old Ernest Hemingway joke has it, "How did you go bankrupt? Two ways. Gradually, then suddenly".

Osborne, not for the first time, is being disingenuous. Dealing with a single big supplier is easier for the client, particularly when cuts erode the public sector's capacity for effective supplier management, while big companies with extensive portfolios of public revenues are more likely to secure the financing necessary to initiate large contracts without the need for the state to make formal guarantees that would appear on the national accounts. This tendency towards the big also encourages suppliers to operate essentially as intermediaries (hence the way they morph into empty brands with meaningless names), willing to facilitate any new service required by the client regardless of their actual competence or history, if only to maintain the relationship and the advantages of incumbency. The result is the consolidation of companies handling government contracts, not a flowering of supplier variety, and an ever more desperate search for low-cost sub-contractors and cuttable corners rather than a commitment to innovative service delivery.

What was being outsourced to Carillion was financial and project management, not innovation or risk. For this reason it is pointless to talk of nationalising the company, or to wonder why it is being liquidated rather than being put into administration. It isn't a going concern and it has little in the way of tangible assets. There aren't any means of production to put into public ownership and the company's institutional capital centres on the ability to win public sector contracts, which would be redundant if it were nationalised. Of the 4.43bn total assets it reported in 2016, only 144m were fixed assets (property, plant, equipment etc). Cash, receivables, inventory and investments made up 2.4bn and goodwill (representing the intangible cost of historic acquisitions) a further 1.6bn. In other words, its tangible assets were largely money or near-money, most of which appears to have been haemorrhaged over the last year. The warning that creditors may receive only a few pennies in the pound tells you not only that the cash has gone but that the contracts represented by the receivables aren't sufficient to meet the liabilities, confirming that the proximate cause of collapse was evaporating margins and an inability to secure further financing.

Both of these will have been evident for months, if not years, which is why it is entirely legitimate to demand scrutiny of the apparent under-estimation of the risk of collapse by both Carillion's board and government ministers. But we shouldn't lose sight of the fundamental issue here, namely that the outsourcing sector and PFI contracts have both been pushed by structural forces towards financial arbitrage rather than competitive service delivery, a situation exacerbated for almost a decade by the contingent demands of austerity, which have reduced both the number of contracts and profit margins. The result is a "market" made up of fragile suppliers who are obliged to grow or die; or at least win new contracts, no matter how small the profit, in order to to keep the life-support machine turned on. When even the FT describes Carillion as "a lawful sort of Ponzi scheme - using new or expected revenues to cover more pressing demands for payment", then the cat is well and truly out of the bag. This was an unsustainable model and plenty of people must have known that for a long time.

Carillion's executive remuneration was geared to winning contracts and growing, which meant that there would always be a reluctance to retrench, even when the warning signs started to flash, such as in 2014 when hedge funds began short-selling the company's shares. Other obvious signs of distress were the growing deficit in the pension fund and the imposition of abusive supplier payment terms, which were increased to 120 days in 2013 (another example of financial arbitrage - client terms remained at 30 days in most cases). This was evidence in the public domain. The apparent failure to raise any of these issues at board level points to the uselessness of non-executive directors who share the same cultural values (growth at all costs, the primacy of shareholder value, the need for superior executive rewards etc). This failure also extends to ministers, who in respect of the governance of public sector outsourcing and PFI deals have a de facto non-executive role. Their inability to read the signs, and the suggestion that they may have deliberately ignored some in order to cut the business more slack, points to a similar cultural weakness.

The centrist debate on outsourcing revolves around the concept of "drawing the line", which is a mixture of Coasian theory and liberal propriety. This suggests that getting it right is a matter of refinement and judgement. As Simon Jenkins harrumphs, "How to find the ideal mix of public sector loyalty and private sector incentive has bedevilled state procurement since the dawn of time. But there should be clear rules, as with monopoly regulation, such as limits on market dominance, debt and remuneration". The suggestion that we lack clear rules on all these matters is absurd. Public procurement is highly regulated and rule-bound, not just because of political sensitivity but because suppliers themselves appreciate the advantages that accrue to incumbents through high barriers to entry. The flaw in this abstract thinking is that in the real world public sector loyalty and private sector incentive constitute a volatile mix. There is no stable combination; no clear line. This is not necessarily a problem if one is dominant. The problem arises when a dynamic like austerity erodes loyalty and incentives simultaneously. As the public sector struggles to recruit and retain staff, and as outsourcers collapse, the government is waking up to the legacy of George Osborne.

Wednesday, 10 January 2018

Privilege and Merit

The news that Virgin Trains is to stop selling the Daily Mail is a pretty obvious distraction from season ticket price rises and the scandal of the East Coast franchise, however it does incidentally highlight the class association of the railways in popular discourse. It is important to note that while Virgin Trains offered the Daily Mail for sale to standard class passengers, it provided complimentary copies to first class passengers. The howls from Northcliffe House about "censorship" do not reflect the loss of the paltry revenue stream arising from the former, but the ending of the tacit endorsement entailed by the latter. In other words, this is about the loss of privilege rather than the denial of a human right and one that challenges the newspaper's claim to pre-eminence among the UK's middle-class readership. In claiming that its staff objected to the Daily Mail's content, Virgin Trains has endorsed the liberal activism of Stop Funding Hate (changing the world one informed purchase at a time), while stopping short of suggesting that its employees might have a say over its own offerings, such as its rip-off "free" Wi-Fi. In so doing, its implies that the Daily Mail may be less representative of "decent" opinion in Britain, which is an affront to the paper's self-image.

One point made with dull regularity when the annual price rises come round is that railways are a middle-class subsidy. This is true but irrelevant. So are roads and universities. Pretty much any public good tends to be exploited more effectively by the middle class, from the NHS to national parks, but that's not a sufficient reason to argue against public investment. The question should be whether the subsidy produces outcomes that benefit all. Railways bring wider gains for the economy and society than those that accrue to actual travellers. They allow for city agglomerations that enable larger and more specialised industries, which produces more jobs and higher average pay. The increased demand for rail travel over recent decades reflects the increasing proportion of service and professional jobs within the economy plus the related rise in property values in city centres. The result is more and more people needing to travel in from the suburbs or satellite towns. This is exacerbated in cities like London by the Green Belt, which obliges commuters to live further out, and by premium services like HS2 that seek to extend the outer limit of the commuter zone. Compared to the subsidy of the Green Belt, public spending on suburban rail travel is relatively modest.

One reason for emphasising the middle-class nature of rail travel is to suggest that the cost of nationalisation would disproportionately fall on the working class (and emblematic white-van drivers in particular) in the form of higher taxes, though as ever this avoids the broader question of incidence and the shift from wealth and income to consumption taxes. Public ownership of the railways is not a panacea, though it still has significant advantages over the use of private operators. What ultimately matters, as we saw in the 1970s and 80s, is the level of investment. The attraction of rail for both operators and financiers is the same: a natural monopoly with a guaranteed income stream. But a monopoly almost always under-invests, hence rail privatisation leads to a de facto state railway parasitised by rent-extractors focused on branding and public relations (hello, Richard Branson). The franchise model is particularly unsuited to railways because few operators can realistically bid, so there isn't a competitive market, and the strategic importance of rail transport means the state will always be on the hook, which allows private operators to bale out when their profits are threatened, as we have repeatedly seen in the UK.

The argument for introducing market discipline - that competition between suppliers will lead consumers to reveal their preferences - simply does not apply to railways. By dropping the Dail Mail, Virgin Trains is cannily giving the impression of a working market in which low sales have revealed its customers distaste for the paper: it has been judged on its merits. The same sort of thinking appears to lie behind the creation of the Office for Students, which has been in the news lately. The introduction of variable tuition fees has not led to the appearance of a dynamic price signal, largely because guaranteed student loans and earnings-related repayment mean that buyers aren't actually price-conscious (and accelerated two-year degree courses won't change that). Likewise, competition has not led to market exit by poor suppliers because supply, at the level of the individual college and within the limitations created by an annual buying round, is not elastic. University access remains a game of musical chairs in which some of the chairs are in a hard-to-reach annex. Like many other regulators, the job of the OfS will be to simulate competition in order to justify rent-extraction and to institutionally favour privileged suppliers such as Oxford and Cambridge.

The furore over Toby Young has been hitched to a variety of current phenomena, from Harvey Weinstein to campus free-speech, but the central argument concerns merit. To his liberal detractors, Young lacked both specific qualifications for the job and a reputation for probity and public service sufficient to be seen as one of "the great and good". This criticism not only elided the antagonistic purpose of the OfS but ignored the lesson of his father, Michael Young's The Rise of the Meritocracy: that all elites are self-perpetuating and merit is consequently less objective than we imagine. The younger Young's defenders (wisely) did not try to big-up his unimpressive work with free schools but instead lauded his free-thinking and "caustic wit". His supposed merit was his iconoclasm, which shows how merit can easily be interpreted to suit any agenda. Young's role as the little boy confronted by a naked emperor was intended to help improve the higher education sector by forcing it to "think outside the box", but that necessarily entailed criticising the academic and public service elite who have defined the boundaries of that box up till now.

Coincidentally, Young's appointment came shortly after the resignation as a government advisor of Andrew Adonis, the meritocrat's meritocrat, which perhaps created a contrast that was a little too stark for (liberal) public taste. Indeed, you have to wonder why the suddenly-available Adonis wasn't considered as a last-minute candidate for the OfS board role, even if anything other than chair (a role he allegedly lobbied for) might be beneath his dignity. Not only is he impeccably neoliberal and well-versed in the sector but he went out of his way to criticise "fat cat" vice-chancellors last year. I suspect the answer is that Adonis might take the brief to introduce competition, as opposed to merely simulate it, too seriously. His claims that university expansion was a mistake and that the sector operates as a price cartel were perhaps a little too iconoclastic (not to mention questionable) at a time when the government was more interested in beasting "snowflake" students as part of a misbegotten culture war. Both Young and Adonis have been left without plum jobs, but I doubt they will lose the privilege of having their fervid opinions relayed by the UK press, from the Guardian to the Daily Mail.

Friday, 5 January 2018

The Office for Fuck's Sake

There are many reasons for criticising the odious Toby Young, but the crudity of his language (aka "caustic wit") is not one of them. He is, after all, a paid entertainer. If Frankie Boyle had got the gig with the new Office for Students, rightwing criticism of the Scottish comic's language would be equally beside the point. Likewise, Young's history of making derogatory comments about women or working class kids isn't a good look for someone who is supposed to further the interests of all students, but it isn't particularly germane to his role on a body that will be acting as a competition regulator for universities. As should be obvious from the makeup of the rest of the board, which has been successfully obscured by the focus on Young, this is a typical neoliberal agency intent on the further marketisation of higher education. There will be gender and class bias, but this will be structural rather than the result of Young's powers of persuasion. The reason why he is unsuitable for a position on the board of the OfS in its own terms is that he lacks any relevant experience of business or competition regulation. Being a journalist or setting up a free school are irrelevant achievements in this context.

Young is dim enough to perhaps not realise when is being played. The timing of the announcement of the appointment, one minute into the New Year, looks less like an attempt to bury bad news and more like a calculation that booze and the bank holiday would quickly drive the debate onto Twitter, which in turn meant that wider press coverage tended to be about the ensuing outrage rather than the remit of the OfS or the business-heavy composition of its board. If Young were to step down, this would be treated by many as a moral victory, while the OfS itself would get a free pass. The battle won, the war lost. You can see a similar dynamic at work when a Berkeley professor uses Twitter to explain how Donald Trump manipulates the media agenda through Twitter, thereby ignoring the more substantive damage being done in Congress. The Tories appear to have decided some months ago (I'm thinking specifically of the spat between Jeremy Hunt and Stephen Hawking) that they have little to lose in adopting an antagonistic media stance and much to gain in terms of distraction. The elevation of Toby Young is clearly part of a wider strategy.

The root problem here is liberal morality. A good example of this came on the same day as the OfS board announcement when John Harris penned a piece in the Guardian titled "Take it from the insiders: Silicon Valley is eating your soul". Harris imagines that the tendency of tech titans to restrict their own childrens' exposure to social media is a telling admission of their product's toxicity, like a beer baron insisting that his kids be shielded from alcohol, but all it really indicates is a retreat from a public social network to a reserved space of privilege (I doubt the kids are sitting bored at home). That liberal critics emphasise the supposed addictive properties of social media (Harris wheels out the trusty "dopamine hit") is just the usual criticism of the mass as weak-willed and incapable of self-control and thus of a piece with articles on New Year resolutions and detoxing. Thirty years ago the same articles were being written about the malign effects of television and the need to restrict childrens' viewing time. A hundred years ago children were being criticised for always having their noses in books.

Having diagnosed the problem to his own satisfaction, Harris espies a solution: "There is a possible way out of this, of course. It resides not in some luddite fantasy of an army of people carrying old Nokia phones and writing each other letters, but the possibility of a culture that actually embraces the idea of navigating the internet with a discriminating sensibility and an emphasis on basic moderation". That last word is being used in a dual sense: as an act of self-censorship and as advocacy of a middle way. What Harris doesn't explain is how we are to acquire a "discriminating sensibility". Playing Snake on a Nokia 3310, perhaps. If Facebook is increasingly creating a walled garden that shuts out the world ("let us discriminate for you"), Twitter remains much more of a public space open to riotous assembly, but it is one in which propriety and judgement are becoming ever more prominent, hence the increasing number of users who feel the need to broadcast their decisions to block or report others. This performative curation of one's own filter bubble looks suspiciously like a bigger dopamine hit than making a sarky comment beneath a blue tick mark's tweet.

Eric Posner of the Chicago Law School published Twenty Theses About Twitter last July. He starts by suggesting that "People sign up for Twitter for two reasons: to obtain information and to exert influence", but then goes on to show why this is a false prospectus. There are better sources of information and Twitter is a poor medium for making a case sufficient to change someone's mind. Posner's central thesis is one of self-indulgence:

7. Twitter’s real function is to enable people to obtain validation for their beliefs.
8. People send tweets with a single overriding purpose: to get the tweet "liked" or retweeted.
9. When your tweet is liked or retweeted, you enjoy a dopamine surge.

This may sound like a reduction of humanity to the status of lab rats, but Posner is no behaviourist. What he is suggesting is that the risk/reward dynamic of Twitter is so different to the "real world" of calculating utility maximisers that the online persona can undermine the offline:

16. In the non-virtual world, successful people take care to keep up impressions, for example, they avoid making controversial statements to friends, colleagues, and strangers except when unavoidable, and even then do so in a carefully respectful way.
17. In Twitter, the same people act as if their audience consisted of a few like-minded friends and forget that it actually consists of a diverse group of people who may not agree with them in every particular on politics, religion, morality, metaphysics, and personal hygiene.
18. Without realizing it, people who use Twitter damage the image of themselves that they cultivate in the non-virtual world.

In effect, Twitter is a drug that corrodes human capital through the collateral damage it does to social relations, much like cocaine. Of course this theory only holds for those people whose Twitter ID reflects their public persona and whose real world human capital is significant. While economic liberals like Posner stress the dopamine hit, which is essentially a transactional model that leaves the idea of preference intact, cultural liberals are more likely to focus on the corrosive effect of anonymity, hence the lasting popularity of the Ring of Gyges as a trope in modern analyses of the disinhibition that the Internet enables. The one focuses on a lack of self-restraint, the other on the circumvention of social constraint. To put it another way, Posner thinks the reward (the hit) is too cheap in the short-term and the delayed cost (damage to reputation) is being excessively discounted, while cultural liberals see anonymity as a form of free-riding. What they share is a belief that the price of social media should be higher, even though its nature (the need for data at scale and the reliance on advertising) demands that the service be provided free. Twitter is a pure market because it enables the expression and ranking of almost any individual preference, but it is "irresponsible" because it does so by undermining the price mechanism.

The low cost of entry of social media is a leveller in the sense that a "speech-act" of a nobody has the same form as that of a celebrity or professional commentator. In the offline world this is rare outside of public meetings - i.e. heckles - which is why such events are carefully managed, if not avoided. But just as the speaker at a lectern or in a pulpit has a structural advantage, so Twitter creates a hierarchy of regard through the number of followers and likes. A consequence of this is that holding others up to ridicule becomes a powerful tool for the powerful, on a par with having a column in the Spectator, but as the case of Toby Young shows, Twitter still retains the potential to empower "the mob". While many "nobodies" have helped excavate Young's more objectionable tweets, the press coverage on the outrage has inevitably concentrated on disobliging comments by other "slebs" or credentialled experts. And so the game goes on. Toby Young is obviously a charlatan and a fool, but that makes him all the more suitable for the role of a patsy. He must by now have twigged that he is the sacrificial offering for the inauguration of the OfS, so presumably he has also secured a suitable pay-off. I expect him to feature in a future honours list.