Friday, 29 May 2020

Sovereigns and Scapegoats

A paradox of the Covid-19 crisis is that not much has substantially changed in our lives, despite the vogue for "all is changed, changed utterly" opinion pieces. We are restricted under lockdown, but not unbearably so. I appreciate that I'm speaking from a position of relative privilege and that many vulnerable people are suffering, but the point is that they were vulnerable before the pandemic and already suffering. Just as the prime Minister's suddenly plummeting popularity has shocked a commentariat that had forgotten the level it was at before the "rally round the flag" effect boosted it only two months ago, so we risk forgetting that history is mostly continuity. Covid-19 has exacerbated the situation of the poor and vulnerable, but it has hurled down few of the mighty, which would be a better sign that we were witnessing a catastrophe. Measured in unemployment and lost output, the economy is not markedly worse than it was in previous recessions, such as in the early-80s and early-90s, though a lot is still in the post. The idea that stockbrokers jumped off the ledges of Wall Street in 1929 is a myth, but it did reflect a moment of genuine despair. In reality, the damage arising from the Great Crash was largely the result of bad policy in response rather than the bursting of a stock market bubble.

Though recession is forecast, and increasingly expected to run for many months, particularly if a vaccine is slow in arriving, we should bear in mind that we've experienced anaemic growth for years. The economy may have come to a spluttering halt and even slipped into reverse, but we were only travelling in first gear anyway. A V-shaped recovery is easier to engineer if you don't have to increase speed beyond a crawl. There are reasons to fear a depression, but many of those concern secular trends rather than an adverse shock. Austerity was a foolish policy response in 2010, but it had a less damaging effect than the comparable response in the early 1930s and part of the reason it was pursued was that economists and politicians expected that to be true and thought, correctly as it turned out, that the politics could be managed to maintain public support. The automatic stabilisers of the welfare state, despite the cuts, together with the refusal to move away from the debt-fuelled basis of finance, despite new checks and safeguards, meant that the position of capital could be preserved (and even enhanced through quantitative easing) at a cost to labour that was shown to be tolerable. Democracy in the 1930s threatened capital but it has served to defend it over the last ten years.

One explanation for this combination of economic resilience and minimal social disruption is that productivity long ago reached a point at which growing profits could be guaranteed to capital while subsidising make-work sufficient to create a democratic defence of the system, through a privileged electoral bloc of the in-work who could find common cause with the increasingly privileged bloc of the elderly and rentiers. The "feather-bedded" public sector of yore was mostly myth, but the contemporary equivalent of a corporate class dependent on the better-paid bullshit jobs and technology-enabled distraction is all too real. This has been made obvious by the pandemic, as professionals grapple with Zoom or complain that they're still too busy to clean their own homes. It has also shone a light on where the actual labour exploitation occurs: that is, where the make-work is negligible but wages are depressed through pecarity, zero-hours and a dog-eat-dog labour market. This truth has been partially acknowledged in the media, but it has largely been drowned-out by waffle about sourdough starters and home-schooling, emphasising the solipsism of the "isolated" (but not really isolated) family unit. This, together with the mawkish valorisation of key-workers, has made the child's coloured rainbow drawing the symbol of our collective state of mind: a happy place we can retreat to when we can't bear too much reality.

In the early days of the lockdown, the British media's attitude towards the public swung between the sentimental and the Hobbesian. This isn't new - it's the house style, after all - but the pandemic has allowed these traditional frames to be deployed at a national scale, rather than being limited to minorities or representative individuals. The collective "clap for the NHS" was the supreme example of the sentimental, while the panic-buying of toilet rolls was the chief emblem of the Hobbesian. In reality, relatively few people have consistently done either. Most of us have clapped at some point, usually in the first week or two, but only a minority of the population have kept it up despite the positive social engagement that has become a feature. Likewise, a majority of us bought a little more at the supermarket at the beginning of the pandemic, and rationalised our own actions as prudence, but we've since reverted to normal patterns of buying adjusted to the nature of lockdown. There might have been an uptick in the sale of guns and ammo in the US, but in the UK it's mostly been booze and flour, suggesting our war of all against all will be limited to drunken bakers.

From the tutting of the Guardian to the invective of the Sun and Mail, the assumption in March was that people were untrustworthy, selfish and stupid, with the "covidiot" very much to the fore. As the supermarkets adjusted their supplies, and officious police clamped down on guerilla sunbathing and picnics, unnecessary and self-indulgent travel became the chief spectacle of antisocial behaviour. Of course, this meant focusing on an even smaller minority of the population, literally picked out by police drones in some cases, which led the press to replace its narrative of Hobbesian conflict with the trusty scapegoat: the individual whose egregious disregard for the rules shows contempt for our solidarity and collective sacrifice. Dominic Cummings is a perfect choice for this role, given his combination of privilege and arrogance and the suspicion of hypocrisy that comes with being in the public eye (a suspicion that reflects both popular cynicism and the Hobbesian worldview of the press). What has been funny (at least to me) is that his defence of his actions has been impeccably Lockean, from his insistence on the tolerance of competing beliefs through the justification of selfish reason to the rights of property (that bluebell wood). 

Where Thomas Hobbes and John Locke famously intersect is in the realm of social contract theory. At the heart of this is the question of how much liberty an individual will surrender to the authority of the state in return for social protection and the maintenance of order (in plain English, the protection of property). While Hobbes saw authority (the sovereign) as an inherent necessity of society, Locke saw it more as the collective delegation of self-interested individuals. Both were contractarians, but Locke emphasised the contract as rational rather than essential or instinctive. In this regard, Boris Johnson has proved himself to be a Lockean rather than a Hobbesian, and this as much as anything may explain his sympathy for Cummings. Despite his childhood ambition to be "World King", he is clearly a reluctant sovereign (as an aside, it is amusing to see liberals berate him for being an ineffective dictator). Like David Cameron, the danger he poses to society is largely the product of his class prejudice and intellectual laziness, rather than the megalomania, paranoia or bigotry that have distinguished previous inhabitants of Number 10. Far from imposing his will as if it were justified by divine right, he is currently engaged in trying to make a deal with the British people, just as he did over Brexit.

That deal concerns not only the trade-off of lives for economic health, but the degree of responsibility to be shared in easing the lockdown. Johnson has been obliged by circumstance to act as the sovereign, but he would far rather the people exercise their own judgement - use "good British common sense" - to determine what was appropriate, just as Cummings supposedly did. In this sense he is far more of a dealmaker than the arbitrary sovereign in the White House. His chief adviser is a lightening-rod for those who oppose an early easing of the rules, but he has also become a useful stick for anyone who wishes to beat the government generally or Johnson specifically. Keir Starmer's decision to not join other opposition party leaders in demanding Cummings's resignation is less a cunning plan of sitting back and allowing the Tories to kick lumps out of each other and more an indication that he is understanding of the government's dilemma and supportive of its intent. As such his message is intended for business, not the electorate, and that message is that balancing the needs of the economy and public health is a matter superior to party politics. This is the purest essence of neoliberal thinking, in which loud virtue and the clamour of the mob gives way to rational deliberation among men of property. John Locke would have been proud.

Saturday, 23 May 2020

Last Orders

The Dutch journalist and author Rutger Bregman has been in the papers recently puffing his new book, Humankind: A Hopeful History. Following the sunny optimism of his advocacy of a liberal UBI in Utopia for Realists, his latest is a Pinkerish celebration of human progress and decency: a humanist teleology that has inevitably found favour with the liberal establishment. One of the central parables (it's that sort of book) is about the "real" Lord of the Flies, a group of Tongan youth who survived a 15-month shipwreck in 1965-6 through cooperation and ingenuity, which stands in clear contrast to William Golding's bestseller (which was an actual parable, rather than an exercise in misanthropy that revealed its author's tendency towards child abuse and Nazism, as Bregman bizarrely imagines). Just as Defoe's Robinson Crusoe is emblematic of the transition from mercantilism to capitalism and imperialism, so this meta event (forget the book - that's not important) is typical of contemporary neoliberalism, from Bregman's privileged position (he has spoken truth to power at Davos, naturally) through the amelioration of selfish human capital by pro-social teamwork represented by the lads' tale to the market for the film rights.

Bregman is typical of the media milieu now asking whether neoliberalism "is gasping its last breath" in the face of the Covid-19 pandemic (of course liberals like Joe Stiglitz have been asking the question since the millennium). He explains its original triumph in the 1970s as the result of crisis (barely explained) prompting governments to adopt "the ideas that are lying around", in Milton Friedman's phrase. This obviously obscures the reality that classical liberal ideas about prices and revealed preference were current from the 1940s, even as he provides a whistlestop tour of the history of the Mont Pelerin Society, but it also ignores that what made liberalism "neo" was the splicing of free markets and unfettered capital with the activist government and welfare state that arose in Western Europe and the US in the twentieth century. As to the ideas that are lying around today, his survey alights on the need to tax wealth more (Piketty, Saez and Zucman), to leverage the entrepreneurial capacity of the state (Mazzucato), and to be more forgiving of public debt (he cites MMT advocate Stephanie Kelton). All of these are "radical" ideas only insofar as they nudge up against the outer limits of conventional liberal thought. There is no suggestion here that property relations or the power of the state are intrinsically problematic.

Neoliberalism will remain hegemonic until the material and political conditions that gave rise to it - the combination of captalism and democracy - change. A crisis may interrupt that hegemony, even require it to be temporarily suspended, as happened in 2009 and is happening again today, but the very responsiveness of capital and the state in a period of crisis is an indicator of its persistence. If Gordon Brown hadn't "saved the world", somebody else would have. The material conditions and the levers of state power were in place, and the commitment to international cooperation was instinctive. Neoliberalism's champions during the twentieth century emphasised its internationalism for two reasons. First, because that reflected the material reality of rapidly advancing globalisation and the free movement of capital. Second, because it provided a way of disciplining nation states (The Washington consensus, "market sentiment" etc). That second reason in turn meant that a revolution against neoliberalism was unlikely to succeed at a national level. As global revolution was now improbable, and frankly inconceivable after 1989, it was reasonable to think that this marked "the end of history". 

The political rise of the xenophobic right over the last decade does not represent a turning away from neoliberalism but a conservative reframing of it in order to secure democratic legitimacy ("neo-illiberalism", perhaps). Likewise, the progressive proposals for a modest tax on wealth, for greater pro-social state activism and a more sophisticated view of public finances are a liberal reframing that seeks democratic legitimacy for the continuation of the capitalist system. At the material level, the nationalistic turn of neoliberalism reflects the slowing of globalisation since 2000, measured in terms of trade and complex supply chains, and the political ramifications of the global savings glut and its associated current account deficits. The former has fuelled divisions over international dependency (most starkly in the debate over Brexit), while the latter has led to talk of "trade wars" and competitive international rebalancing, employing the language of a century ago while blithely ignoring the ground reality of a highly-integrated world system. Globalisation is running out of puff because it has succeeded, not because it has failed. 

Neoliberalism isn't beleagured, let alone in reverse. It is adapting its form while preserving its central tenets, such as the universal applicability of markets, the superiority of the price signal over planning, and the management of atomised labour as human capital. All of this is visible in the British government's immigration bill, with its emphasis on the demands of "the economy", its dropping of targets (proving that these were merely a technocratic fetish) and its adoption of a points-based valuation of the individual (you as an applicant now have your own target). The Conservative government will not regress to some older political order, such as authoritarian nationalism, even if it does adopt some of the characteristics and indulge the fantasies of reactionary groups on the right. What it will do is carefully read public opinion in order to assess the optimum degree of xenophobia or authoritarianism to deploy, as we've seen in its decision to exempt workers in the NHS and care sector from the migrant healthcare charge. This is being presented as a victory for virtue (and "forensic" opposition) by the liberal press, but it's merely a distraction from a proposed system that is far more liberal than conservative.

The "return of the state" commentary that has become popular during the pandemic is partly an anticipation of a more interventionist Tory government, committed to regional rebalancing and large infrastructure projects, and partly a relief at the end of the Corbyn interlude and the associated assumption that managerialism and technocracy have reasserted their grip on the Labour party. This nostalgia for the high neoliberal era is fundamentally no different to the nostalgia for "our finest hour" or the "spirit of '45". The past is always employed as a lever for the present, but our selective use of it clearly indicates an agenda, and what the current agenda points to is the maintenance of the neoliberal ideal of government as the guarantor of markets and the manager of human capital. For example, consider how fetishising the "national story" can be used to reconcile the conflicting demands of the people for social protection and the demands of capital for deregulation and personal risk-taking, which has reached surreal heights in the UK with the government's strategy of elevating the defence of the NHS above the defence of the public.

Viewed through the prism of humanism, neoliberalism is always with us. This is true in two senses: the liberal tenet of the responsible and free individual and the associated idea of governmentality - the way in which society is managed towards an assumed optimum without recourse to the blunt discipline of systematic coercion or the prohibitions and obligations of law. For Michel Foucault, homo economicus was not merely a rational agent, produced by Enlightenment theories such as Utilitarianism, but a form of subjectivity whose genealogy can be traced back to the displacement of the pagan view of sexuality as experience (ars erotica) by the Christian hermeneutics of the self and its techniques of confession and the pastorate, which eventually leads to the scientia sexualis of the 19th century and the biopower of capitalism. He didn't live to see the FitBit, but he wouldn't have been surprised by that "technology", with its combination of penance, personal confession and competition.

For all its softly disciplinary nature, Foucault also saw the emancipatory potential of neoliberalism for minorities: "a society in which there is an optimization of systems of difference, in which the field is left open to fluctuating processes, in which minority individuals and practices are tolerated, in which action is brought to bear on the rules of the game rather than on the players,and finally in which there is an environmental type of intervention instead of the internal subjugation of individuals" (the Birth of Biopolitics, pg 259-60). This is more than an oblique celebration of the San Francisco bathhouse scene of the 1970s. The key point here is that concept of environmental intervention: the network of power relations that simultaneously liberates the individual from older forms of subjectivity (such as Christian guilt or the normative discipline of the Enlightenment) while constraining social action against the system itself. Foucault was attracted to the former - the ability to create the subject without recourse to law or morality - but he didn't neglect the latter. 

What Foucault's reading of Gary Becker and other Chicago School thinkers suggested was that neoliberalism provided a space for resistance and autonomy in a way that previous regimes of governmentality didn't. This can be bracketed as simply another contradiction of capitalism, but it also helps explain the tenacity of neoliberalism today. For many (albeit in reality predominantly white, western, well-off etc) this has been an era of personal freedom and rapid material gain. The social liberalism that produced gay marriage and "wokeness" has been substantial and will not be reversed by atavistic bigotry. The ultimate winner of the culture wars is certain, if only because of the obvious generational divide that the conflict reflects. Like it or not, this "progress" has been a triumph for neoliberalism. Consequently, we shouldn't be surprised if there is a reluctance to concede that neoliberalism is passing from history, nor that many staunch defenders of the status quo still claim that neoliberalism isn't even a thing, which is the best evidence of its continuing hegemony. 

Friday, 15 May 2020

Emotional Labour

All jobs, in the simple sense of activity you do in return for payment, are inescapably power relations. What distinguishes work from barter is that one party must exchange their labour, and it is invariably that party who is at a disadvantage in terms of power. An argument against the simplistic model of work as a transaction tending towards equilibrium, in which resources are optimised by matching demand through the mechanisms of market and price, is that there is always a deadweight cost associated with masking the reality of the power relation. This largely falls on the worker, who must often contribute additional emotional labour (suppressing your irritation in the face of a frustrating customer, for example, or laughing at your boss's crap jokes), which subtracts from their actual labour by wasting time (there are other thiefs of time, of course, but ceteris paribus). One way in which the power relation operates is by increasing that emotional labour at the expense of productive labour.

Though this waste can be rationalised at the microeconomic level as simply another preference on the part of the buyer of labour (I am paying you to tug your forelock because that maximises my utility in terms of self-esteem), at the macroeconomic level it is clearly a deadweight loss to society in a similar manner to the "old Spanish practices" that lower efficiency on the shopfloor. A further loss can potentially arise when the employer feels obliged to invest some of their own time justifying the power relation and resisting claims that it is exploitative. This can be a necessary investment if negative publicity leads to commercial loss, but for most buyers of labour it is neither public relations nor emotional labour but simply the curation of their own ego. Whether that in turn constitutes a deadweight loss to society depends on whether the employer might otherwise be productively using that time and energy. A further complication arises when the buyer of labour is also a worker: they might be forgoing time that they would otherwise use for earning.

Well, that's enough theory. Let's now turn to the working week of Sarah Ditum, one of the many soi-disant radical feminists in the media whose political centrism (or even steady drift to the right) usually entails a "gender critical" perspective. Despite not employing a domestic cleaner herself, Ditum chose to berate Owen Jones for his suggestion that those who do employ cleaners should simply pay them to stay at home during lockdown and so avoid putting them at risk of infection. The motivation on Ditum's part seems to have been simply her ongoing resentment of Jones, the two being on opposite sides of the TERF war, though she also appears to sympathise with the original claim by Theo Usherwood, the Political editor of LBC, that the most supportive thing you can do for "households that might not be financially viable without work" (i.e. the poor) is to let them labour in the homes of middle-class professionals. 

This culminated in her writing a piece for the Spectator on 'The underlying sexism of the conversation about cleaners and Covid' in which she made plain her target: "the righteous left ... that insists ‘blow jobs are real jobs’ decries the woman who hires another woman to scrub limescale out of the bathtub". It's worth repeating again that Ditum does not herself employ a cleaner, so you have to wonder why she is suddenly an expert on the subject. A cynic would point out that articles that trash the left, and Owen Jones in particular, are always going to find a buyer in the Tory press: just ask Nick Cohen and David Aaronovich (for the record, Ditum was supported on Twitter by Hadley Freeman, David Baddiel and Janice Turner, the latter even managing some homophobic snidery about Jones's lack of children). But what I want to focus on here is not the question of her credentials, which would be playing the TERF/SWERF game, but her implied hierarchy of work: the idea that cleaning and sex-work are categorically different.

Earlier in the article she says: "There’s an old linguistic slippage that has made the words ‘dirty woman’ become, over time, ‘sexually available woman’. And though standards of propriety have changed, the association between cleanliness and feminine morality has not. A woman who declines to do housework, or who simply points out that doing it is labour, is a bad woman". There is obviously an association of dirt with poverty, and of poverty with prostitution, but this doesn't explain the particular place of domestic servants in the history of sexuality. The contemporary association of cleaners with sexual availability (it's an established porn trope) has nothing to do with the morality of the female (or sometimes male) workers. It has to do with the ability of employers (mainly, but not always male) to coerce them into sex. It is an odd blindspot in an ostensibly feminist article on cleaners that workplace sexual harassment isn't even mentioned.

This brings us back to the issue of the power relation, but it also highlights the extent to which the ego-curation of employers depends on selective blindness (the irony here is that as someone who doesn't employ a cleaner, Ditum has mimiced the ego-curation of those who do and parlayed that into paid work). Another example of this is found in the way that the corporate classes distinguish between "working at home" and "working from home". The first is mildly shameful, if you're not an independent professional, because you get little done but also realise how little the job requires anyway. The second is a privilege that only makes sense in the context of an office-based norm. A key part of that privilege is that it reduces the amount of emotional labour demanded (which normally accounts for a lot of the office-based inefficiency). But even this distinction, which has been made more salient for many by the Covid-19 lockdown, occludes those for whom "working at someone else's home" is how they make a living. 

Will Davies has made the point that under neoliberalism workers have been divided into capital and labour; that is, the modern conception of human capital versus the traditional conception of unindividuated labour. This division is popularly described through the concept of skill: human capital is high skill, manual labour is low-skill (you'll note we rarely talk about mid-level skills though these obviously exist and actually account for most workers in formal sociological terms). The issue of skill has come to the fore during lockdown because the topical definition of "key-workers" includes people who were previously considered to be at either ends of the skill spectrum: doctors and carers. This has made the divorce between actual social esteem (our respect for those who help us) and presumed social esteem (the valuation of human capital reflected by pay) even more acute. The defence of the status quo in the face of this cognitive dissonance is an appeal to sentimentality, hence the weekly clap for the NHS.

Esteem goes back to the origins of society and predates its appropriation by hierarchy. A more modern idea, which emerged in the middle of the twentieth century, is that of self-actualisation. Though it has a broad definition, it too was appropriated by hierarchy, specifically the hierarchy of work. Doing a fulfilling job became the epitome of self-actualisation. The defence proferred by middle-class professionals who hire domestic cleaners has sought both to appeal to our belief that many jobs are mis-labelled in terms of skill and to insist that self-actualisation is a motivator at all skill levels. Thus Sarah Ditum pays cleaners a backhanded compliment by insisting she isn't up to the job, or at least the level of the "skilled" ("I am not a clean person. Maybe a six out of ten on the clean scale"), while David Baddiel suggests his cleaner, who he is currently paying to stay at home, wants to work because she is bored, thereby failing to appreciate that telling him she is bored and keen to return to work (in response to his enquiry) is emotional labour. And so the circle closes.

Saturday, 9 May 2020

Authoritarians and Dirtbags

Earlier this week, Paul Mason circulated a pre-publication draft of a new paper by the political scientist Paula Surridge. Entitled 'Values, volatility and voting: understanding voters in England 2015-2019', it is the latest installment in the ongoing debate about the role that "values" play in the preferences of the electorate, relative to traditional "economic" concerns. The paper focuses on the last three general elections, with the obvious implication of "hard lessons for Labour". It thus ignores the 1980s, which is arguably when values - as expressions of cultural norms rather than philosophical principles - were formally reintroduced to politics with the reaction to the permissive legacy of the 1960s that Margaret Thatcher supposedly embodied (see also the parallel history of the US Moral Majority). It also ignores New Labour's appropriation of values in the 1990s ("Tough on crime" etc) and its steady loss of public support in government during the 2000s despite its increasing commitment to reactionary rhetoric and authoritarian social policy. In other words, this is about Labour post-Blair.

What caught my eye were the statements employed to locate survey respondents on the two contrasting axes: the left-right (economics), and the liberal-authoritarian (values). It is telling that the statements used to position voters on the two scales have quite different "voices". The materialist statements read as if they were the product of a vox-pop or focus group; in contrast, the non-materialist statements read like newspaper editorials.

Left-right scale:

- Government should redistribute income from the better off to those who are less well off
- Big business benefits owners at the expense of workers
- Ordinary working people do not get their fair share of the nation's wealth
- There is one law for the rich and one for the poor
- Management will always try to get the better of employees if it gets the chance

Liberal-authoritarian scale:

- Young people don't have enough respect for traditional values
- Censorship is necessary to uphold moral values
- For some crimes, the death penalty is the most appropriate sentence
- Schools should teach children to obey authority
- People who break the law should be given stiffer sentences

Of course, we shouldn't imagine the one as authentic and the other as inauthentic. The economic statements could have come from a Boulting brothers' film, while the value statements can be easily-sourced in most pubs. Both sets of statements are freighted with priors ("ordinary", "fair" etc), but there is a clear difference in tone. One explanation is that newspapers, as predominantly rightwing propaganda, tend to focus more on values than economic justice, so they are simply more likely to use the associated vocabulary, which then reinforces common parlance. But this doesn't explain why the five value statements should focus on respect, morality, crime (twice) and authority. Compassion and tolerance are values too, but neither is explicitly addressed and can only be negatively inferred (consider in this context the tortured attempts by Labour politicians to describe "British values" in recent decades). There is an ideology implicit in the choice of these particular statements.

Surridge claims that "These two value dimensions are theoretically, and empirically, uncorrelated at the individual level. This means that it is not possible to predict where a voter is positioned on the ‘liberal-authoritarian’ dimension by knowing their position on the ‘left-right’ dimension." And yet she also notes that "The means [i.e. statistical averages] of the scales indicate that on average voters were to the left of the notional centre point of the left-right scale and to the ‘authoritarian’ end of the liberal-authoritarian scale." In other words, we have a structure that suggests a sweet spot just inside the "left authoritarian" quadrant. Any biaxial analysis will claim that the axes are independent, but in this case they're clearly interdependent. Much of what we articulate as values are actually the product of material conditions and our response to them (e.g. fear encourages mistrust), while statements about those conditions are in turn coloured by our values (e.g. the expectation of fairness). In this sense, the social history of Britain since the late-1970s has been about how changes in the economy and associated ideology have influenced sentiments. For example, precarity has eroded solidarity while the notion of human capital has encouraged a dismissive attitude towards welfare.

The focus on values and how they interact with the material dimension has allowed the political field to be conceptually fragmented, first into quadrants and then into more granular groupings of dubious accuracy. This is much more pronounced on the left than the right, which is a reflection less of social reality than the belief that the left is fissiparous coupled with the overwhelming media power dedicated to proving the point by encouraging factionalism. The media's anthropology of the right tends towards court politics (who now remembers the Cameroonians?) while largely ignoring the differences between fractions of capital (hence Brexit was analysed more through the lens of values than economics). In contrast, the media's anthropology of the left is obsessive about lineage (e.g. Tom Newton Dunn's notorious exposé) and difference, from the rivalry between Unite and Unison officials to the heterodoxy of the dirtbag left. The aim is to deny the possibility of a progressive coalition centred on economic justice and social equality. As this combination is ostensibly respectable, it has become necessary to associate it with repellent characteristics, hence the insistence that the Nazis were socialists or the perennial attempts to link the left with support for terrorism.

Many of the Surridge's findings will come as no surprise: that voters on the centre-left economically but in the middle of the values scale were more likely to vote Conservative than Labour in both 2015 and 2019 (it was 50/50 in 2017), which obviously calls into question what centre-left actually means; that Remain voters with right-wing economic views preferred the Conservatives, despite the supposed importance of Brexit to them; and that voters with left-wing economic views but authoritarian values similarly biased towards the Conservatives, particularly in 2019. This simply reinforces the anecdotal evidence of last December when soi-disant liberals once more found excuses to vote for a government that they were sure would be terrible, while Labour found its vote eroded by both FBPE obduracy and "Corbyn is a terrorist-lover" smears. So what does it mean? Mason's stated concern is coalition-building: "I do want to build the labour movement as a coalition that includes the so-called 'authoritarian' left voters, but to the extent we fail to keep the so-called left authoritarians (nationalise railways and bring back death penalty, as @p_surridge describes) you have to then construct a wider alliance with the 'left liberals'".

As a journalist, Mason tends to talk in terms of discrete electoral blocs, but it should be obvious that the electorate is more complicated than that, and certainly more complicated than the quadrants implied by the biaxial model. After all, it is possible to support nationalising the railways but not the death penalty. If you don't recognise that complexity, you end up appealing to a fictional population: missing your target because the rhetoric is that little bit off while alienating previous voters. New Labour's attempts to reinforce its electoral coalition by shifts towards the authoritarian pole had a poor record (so much so that's its now trying to burnish its anti-Nazi history). The party's one success in broadening its coalition was in 2017, post-Blair, when it retained leavers while attracting younger, more liberal voters. Mason understands this (he's not an idiot), but his popular frontism suggests not just electoral expediency but a pessimism of the intellect. He clearly doubts that the "left authoritarians" can be won back in sufficient numbers and suspects that Labour is at risk of losing "left liberals" to minor parties or demoralisation. This points to a tendency towards catastrophism on the left, as distinct from the utopianism with which it is usually charged, which was all too evident in the reactions to the December election result.

The left (or "far-left", in contemporary liberal parlance) is distinguished by a scepticism about grand narratives, a contempt for hypocritical virtue and a love of parody. It is, in other words, postmodern, which in itself is a red rag to the bull of the right. The left is criticised by the right and centre for its rudeness and its distaste for traditional political shibboleths, but this is to ignore that its style is a critique of its own past errors rather than simple bad manners. It has adopted facetious cynicism as a way of dealing with its historicised anxiety. The horrors of the bureaucratic left in power (and I'm using "left" here in its widest possible sense), from the gulags to Iraq, have left it burdened by guilt and suspicious of its own promises, despite those historical episodes proving that the "left" in power is rarely actually left. This is why sarcasm is as characteristic as optimism. In contrast, the right has regretted nothing and learnt even less. Its lack of reflexive cynicism is evidence that it is untroubled by its own history, hence dressing up as a Nazi or celebrating Pinochet is at worst a breach of etiquette, while showing off your collection of racist and eugenicist books is barely worthy of comment.

One consequence of this is that the organised left lacks ruthlessness, as seen in the lost opportunity of the Labour party under Corbyn, a man whose mild ethical socialism and collegiate style proved inadequate in the face of bad-faith and hypocrisy. The Labour left's enjoyment of the Labour right's discomfort between 2015 and 2017 was a classic strategic error. Instead of reforming the party, they assumed the right was a busted flush, or could at least be contained by a left-leaning membership and supportive unions. The recovery of the right was not preordained, but it was always likely given the social and political forces determined to blackball the left. Surridge's paper does not resolve Mason's dilemma about how to build a broad left coalition, essentially because it isn't designed to. Rather it situates the debate ever more firmly on the values dimension. For the left, fighting on that territory is a profound mistake that plays into the hands both of the Labour right and the Tories. Harold Wilson, who trimmed between left and right throughout his career, said that "The Labour party is a moral crusade or it is nothing". In reality, Labour is the party of the economic dimension or it is nothing.

Friday, 1 May 2020

Scandinavian Models

Should we provide state-backed loans to businesses that avoid tax? Other European governments are making assistance conditional on being registered domestically for corporation tax and even on not paying dividends or executive bonuses. Morally this is understandable, hence the Church of England has chipped in to the debate in the UK, but it's economically questionable, both in terms of its immediate impact on aggregate business activity and its longer-term effect on government revenue. The pragmatic response is that if we want to minmise disruption to the economy we need to preserve as many existing firms as possible, regardless of their tax status or ethical track record. Discriminating now is literally virtue-signalling, and doing so in the midst of a pandemic is self-indulgent. This doesn't mean that we should tolerate tax-avoidance, but that now is not the right time to focus on it. That time was before the pandemic, when some of the politicans now arguing for funds to be withheld were less trenchant in their criticism, or after the pandemic, when I suspect many will revert to a more tolerant attitude.

EU states like France and Denmark that intend to deny assistance to tax-avoiders are not applying a novel policy of ethical judgement. They are simply continuing their existing policy in respect of tax-havens, which can be summarised as a lot of posturing and limited action. This is an expression of bourgeois virtue, as is the related demand that companies suspend dividends, which simply means capital hoarding cash that would otherwise be converted to income and more widely distributed. A virtuous approach relies on scapegoats, so the EU recognises the Cayman Islands as a tax-haven but not Luxembourg or the Netherlands, while it simultaneously tolerates a broader business culture that winks at systematic avoidance. What the current moment reveals is that firms are embedded in society and can only avoid their responsibilities through government connivance. Emmanuel Macron and others are simply trying to divert attention away from that truth. We can also see this ostentatious virtue at work in the decision of the gambling industry to forgo advertising during the lockdown. If such advertising is wrong now, then why is it right at any other time?

The UK government is pursuing a similar course in adopting a wary attitude towards Virgin Atlantic, focusing on the moral hazard of public debt rather than its own connivance in that company's history of tax avoidance. But this political emphasis on the idea of "something for nothing" highlights how the proposed "bailout" of businesses has been misrepresented by sections of the media. What the government is offering, through the Coronavirus Business Interruption Loan Scheme (CBILS), isn't a state loan, let alone a handout, but an 80% guarantee on commercial loans, of up to £5 million, to borrowers with turnover up to £45 million. This means that if the borrower defaults, the commercial lender is liable for only 20%. There's not much moral hazard here, even though the government will also pay the interest and charges on the loan for up to 12 months (through the separate Business Interruption Payment scheme). This isn't a parallel system to commercial financing, rather it's an auxiliary measure intended to give banks and other lenders the confidence to extend financing to stressed companies.

Initially the scheme was exceptional: limited to businesses that couldn't secure loans under normal commercial terms. That restriction has since been lifted, while the requirements for collateral have also been eased, and now the government is proposing to guarantee loans of up to £50,000 at 100% for small businesses. It's had much positive press ("Dishy Rishi" etc), but CBILS has proved something of a damp squib so far, with less than half of all applicants securing a loan. There is also an 80% guarantee scheme for large businesses (CLBILS+), limited to £25 million for firms with turnover from £45 million to £250 million and £50 million for firms with turnover above that level. These aren't eligible for BIP interest cover, so they are no different to a normal commercial loan. In addition, the Bank of England is offering a Covid Corporate Financing Facility (CCFF), whereby it buys short-term debt (commercial paper maturing at up to 12 months) in order to provide liquidity for larger firms. All in all, the government's strategy for supporting business is cautious and conventional, despite the media claims of a radical departure.

An alternative approach should be considered for large businesses, including foreign-owned (and not just tax-haven-based) ones like Virgin Atlantic. While Richard Branson has proposed a goverment loan on "commercial terms", the state could instead take an equity stake, as it did in 2008 with some UK banks. That was couched as a temporary mechanism for providing liquidity, but it can also be a way of (de facto) recouping tax in the form of dividends or capital gains. This is not to suggest that dividends should be seen as a substitute for corporation tax (should the state secure a majority of the equity, it should then insist on the business being redomiciled to pay its tax in full), rather it should be seen as a second-best approach to ensure that society is able to recoup some of the benefits of its own wider investment - e.g. in airport and road infrastructure. There is the risk that the investment can go down as well as up (and that would be as good a reason as any for avoiding an airline today), but this should be seen as part of a wider portoflio rather than just a targeted investment in troubled firms.

The model for such "beneficial nationalisation", where the state acts as an investor rather than a dominant owner, is that of the sovereign wealth fund. A majority of the Government Pension Fund of Norway, the largest sovereign fund in the world at over $1 trillion, is made up of holdings in foreign companies, many of them registered in tax-havens. Though the Fund applies ethical standards in respect of which companies it invests in, this largely reflects the nature of the business or its operating practices (e.g. avoiding arms, tobacco, environmental damage etc). It doesn't insist that companies pay a particular level of tax, either in Norway or elsewhere, though it has made moves towards greater transparency over tax-havens under public pressure following the Panama Papers revelations. It's a capitalist entity, with all that this implies in its attitudes to corporate governance and the management of labour, but its ultimate subservience to parliament means it must be sensitive to public opinion. The result is that Norway is often more effective in raising revenue from tax-haven-based businesses than either their nominal or actual home countries.

The debate on whether tax-avoiding companies should have access to state support is framed as a moral issue, but at root it concerns the power that ownership confers to domicile offshore. For all the appeals to virtue by contemporay politicians, few states have been inclined to restrict that power since the 1980s, indeed many have gone out of their way to try and attract foreign businesses through tax arbitrage. Though most politicians clearly pursue capitalist class interests, we should also recognise how difficult it would be to restrict the power of ownership in a globalised economy lacking capital controls. One way out of this bind would be to gradually socialise ownership, not through pension and mutual funds that merely veil capitalist power, but by the "inclusive ownership fund" approach proposed by Labour last year (partly modelled on Sweden's Meidner Plan). This wouldn't work for offshore companies, but that's why any way the state can opportunistically secure a stake should be pursued, even if it means bailing out Richard Branson. Ironically, some domestic businesses that dismissed Labour's plan at the time are now lobbying for the state to provide capitalisation through equity.

What the current protestations of virtue indicate is that the state will in future seek to recoup greater tax from offshore companies, not so much because of public opinion but because all developed states now recognise that the distribution of tax between capital and labour needs to shift in favour of the latter if society is to avoid galloping inequality and collapsing public services. This recognition predates the Covid-19 pandemic, but the current crisis makes it more pressing. After the last decade, any state that seeks to increase the tax burden disproportionately on labour, which is what austerity does, will almost certainly face serious social unrest (les gilets jaunes amplified). France and Denmark are signalling that capital must carry a larger burden in future, while the UK is signalling that it remains uncertain about its strategy post-Brexit: whether to double-down on being a tax haven gateway that privileges capital, or to pursue a more national economy in which the burden of tax is more evenly shared between capital and labour.