Friday 16 February 2024

Antisemitism Again

There are a number of reasons for the Labour Party's continuing troubles over antisemitism. Having deployed it as a weapon for factional ends, there should be no surprise that it has proven to be a double-edged sword in the hands of the Tory press who, for commercial as much as ideological reasons, like nothing better than blood on the floor. Likewise, the patent insincerity of the more thuggish elements of the Labour right in claiming to be lifelong campaigners against racism and bigotry was always likely to blow up in their faces at some point. I'm genuinely surprised it has taken this long, but that in turn points to a third reason: that the media's indulgence of Keir Starmer's leadership was always likely to end ahead of the next general election. He lacks the charisma and novelty of a mid-90s Blair and the process of making Labour's manifesto "bullet-proof" against Tory attacks has left a vacuum that needs to be filled somewhow. When your leading defenders are either insisting that you are a serial dissembler who will suprise us all by being more radical in office, or that your lack of fixed principles is actually a sign of pragmatic maturity, then you know you're going to struggle when the electorate asks what it's getting in return for booting out the Conservatives.

Beyond the confines of the Labour Party, the contemporary salience of antisemitism obviously owes a lot to the conflict in Gaza, though it should be emphasised that the turn in sympathy against Israel and towards the Palestinians, which is what we're really talking about here, long-predated the 7th of October and can be traced back to the collapse of the Oslo accords. The defenders of Israeli policy, such as the UK's Community Security Trust, whose data on the level of "antisemitic incidents" is routinely relayed by the media without interrogation, have obviously sought to conflate criticism of Israel with antisemitism, to the point of now claiming that the phrase "Free Palestine" is anti-Jewish if addressed towards Jews or Jewish institutions. In other words, we are seeing the boundary of what qualifies as antisemitism expanded, a danger that many previously predicted in respect of the demand to adopt the IHRA definition without qualification, including Kenneth Stern. This rhetorical inflation has led to many tropes that were previously considered acceptable, if crude and insulting, to now be taken as prima facie evidence of antisemitic intent, which appears to be what has tripped up Azhar Ali and Graham Jones, the two prospective parliamentary candidates at the centre of the latest Labour "row".

There is a fine line between believing that Israel has opportunistically exploited the 7/10 attack to pursue long-standing aims in Gaza and believing that there was a conspiracy to amplify the attack in order to further those aims. In suggesting the latter, Azhar Ali was indulging his audience in a worldview assumed to be common among Muslims: not just that Israel is conniving but that it is cruel and callous. What this suggests is that the presumption of factions based on ethnic or religious heritage remains part of Labour's internal management culture. Party members, even relatively elevated ones such as councillors, are assumed to have bloc loyalties (specifically to Pakistani-heritage biraderi) and must therefore be appealed to by pandering to what are assumed to be that bloc's prejudices. The two leading theories as to who leaked the meeting are that it was either a member of another faction disappointed by Ali's selection or someone genuinely appalled by what he said. In either case, this was clearly a political decision, which indicates how misguided it was to try and address the participant's concerns through the medium of an imagined bloc identity.

In contrast to Ali's statements, Graham Jones's "Fucking Israel" is a nationalist rather than a communalist sentiment. Likewise the claim that anyone fighting for the IDF is a traitor. What this highights is the double nature of antisemitism, here in the form of two distinct traditions: the idea of Jews as insufficiently loyal to their "adopted" country (Jones) and the idea of Jews as having an intrinsic moral deficit wherever they are found (Ali). The former has tended to be characterised as a sophisticated, even aristocratic tradition (e.g. the Dreyfus Affair), while the latter has been seen as vulgar: the antisemitism of the marketplace (e.g. Kristallnacht). But in reality these two traditions have always overlapped to the point where there is no meaningful distinction in practice - i.e. in how they impact on Jews. It exists purely in the minds of antisemites. The distinction between an upper class patriotism and a lower class materialism was constructed to reflect better on that upper class and to quarantine the lower classes whose "excitable" responses to economic disruption had a tendency to expand beyond questions of Jewish culpability into broader debates about inequality and power.

The paradox of Nazi antisemitism - that the Jews could be characterised as both rich and powerful and at the same time as poor and verminous - was not simply a geographical distinction between the assimilated Jews of the Rhineland and the alien Jews of the Polish shtetls. It was also a class distinction in motive: the bourgeois antisemite resented the unequal competition of the bourgeois Jewish cabal and despised the vulgarity of the poor Jew, while the working class antsemite resented the power of the Jewish capitalist and despised the unequal competition of the Jewish worker willing to accept lower wages. The double nature of antisemitism reflects those class differences. Likewise, just as anti-black racism reflects the beliefs of "white" racists rather than any intrinsic quality of "blacks" (hence racism birthed race, not the other way round), so classic antisemitism - that is the antisemitism of the modern historial era rather than the religious antisemitism of the pre-modern era - reflects the ideology of the ethnically homogeneous nation, which was meant to unify the classes. 

That classic antisemitism, with its roots in the nineteenth century and its overlaps with "scientific racism", never went away because we never superseded the nation state. But it has altered over time, specifically the dual nature of antisemitism has seen a bifurcation. The vulgar Jew has retreated into history in most Western societies. This is not simply because of the demographic impact of the Holocaust in Europe or the successful upward social mobility of Jews in the US (incidentally a continuing theme in American culture, e.g. in recent films such as Oppenheimer and Maestro). There are still working class Jews, but you rarely see them in the media. Instead the community representatives are overwhelmingly middle or upper-middle-class, tend towards the centre-right politically, and identify with the establishment. Likewise, few of us are familiar with the reality of working class life in Israel because Western media prefer to present the country in middle-class terms as one of technology start-ups, liberal values (that admittedly need defending from the vulgar Netanyahu) and the IDF's gender-equality, with the charedim as little more than a background noise and the illiberal settler movement as semi-detached.

This has left a vacancy that has been filled by Islamophobia. The traditional tropes of antisemitism from the "lower" tradition have been transferred wholesale: the shadowy conspiracies and unfair competition (the underlying rumble about the Rochdale selection), the morbid religiosity, the desire to defile white women ("grooming" will be on the Rochdale ballot courtesy of an independent candidate). We can also see elements of the upper tradition echoed in popular forms - e.g. the treatment of the traitorous Shamima Begum. But if the upper tradition lives on, it does so predominantly, if paradoxically, under cover of philosemitism. The Jews are to be applauded because they have shown us what a true nation state looks like. They are defeating the Muslim interlopers, purging their land and ensuring the survival of the Jewish race. A good example of how these two traditions now combine was offered this week by Trevor Kavanagh, the former Political Editor of The Sun, who opined that all Muslims are by definition anti-Jewish. This manages to treat both Muslims and Jews as homogeneous groups with common characteristics, while also conflating all Jews with Israel.

What this suggests is that Labour isn't going to able to "rid itself" of antisemitism, or at least the appearance of it, any time soon. The Tories will insist on the association of Muslim support and antisemitism not simply as a way of attracting Jewish (and Indian) support to themselves but as a way of gradually detaching Muslim voters from Labour. The hierarchy of racism within the party reflects a factional approach, and that won't change so long as the party remains averse to actual politics and so preserves the utility of ethnic blocs. The groups that achieved national prominence campaigning against antisemitism in Labour under Corbyn, such as the JLM, are unlikely to cede that prominence now, which will encourage further rhetorical inflation. The identification of the left with antisemitism has been pursued to inoculate the party from any taint of socialism, but the consequence of this has not just been a shift to the right on the ideological spectrum but a movement in the boundary of antisemitism itself, as Azhar Ali and Graham Jones have just discovered. Too many people are now invested in the persistence of antisemitism within Labour for it to easily disappear.

Saturday 10 February 2024

Labour's Industrial Strategy

John McTernan was unfortunate in his timing. His plea for Labour to drop the pretence that the green prosperity fund was anything other than an industrial strategy came only days before the long-heralded confirmation that the expected next government will not be spending £28 billion per year transitioning to a low-carbon future or anywhere near that figure. Lost in the debate over whether this latest u-turn shows Labour cleaving to the Tory agenda or simply incapable of sincerity is his use of a term suggesting a more dirigiste approach to the management of the economy than has been visible of late. As a confirmed Blairite, McTernan would no doubt insist that New Labour had an industrial strategy, but in substance this amounted to little more than acquiescence in the once-fashionable idea that letting the financial sector do as it pleased would ultimately benefit all. In fairness, that was a strategy with a long pedigree in British politics. The formal industrial strategy of the postwar years was, like the wider concept of planning, an atypical interlude in a history otherwise tending towards laissez faire.

The UK's fitful attempts to craft an industrial strategy between 1940 and 1980 reflected the nature of the economic model that developed over the much longer period between 1750 and 1890. The technological advances of the age, which every schoolkid learns to recite as a series of names (Arkwright, Bessemer, Stephenson etc), gave the UK a significant first-mover advantage as they did not spread sufficiently rapidly to allow other nations to quickly develop competitive domestic production. There were two consequences of this: the growth of export-oriented capital goods sectors in the UK (shipbuilding, railways etc) with the corollary of a firm commitment to free trade, and the defensive adoption of protectionist policies by many of those competitors in an effort to shield and develop domestic production (notably the USA). The common ground was a commitment to sound money - the gold standard - which in turn benefited the UK by making the City of London the central nexus of global trade and capital financing.

The extroverted nature of British industry led to sectors dominated by multiple, small-to-medium size manufacturers specialising in niche products and selling to a global market. In contrast, the protectionist policies of the UK's chief competitors encouraged vertical integration within captive domestic markets, the classic example being the development of Standard Oil in the US, a company that spanned extraction, refining, distribution and retail (a model that remains central to the oil business today). The institutional effect of this was the emergence of the large-scale corporation and a tendency towards merger as a means of achieving growth, particularly notable in Germany around steel production, which was only occasionally restrained by anti-trust laws (e.g. the break-up of Standard Oil). After World War II proved the inefficiency of further expansion through territorial aggression, this birthed the modern multinational. 

While all this was going on, the UK found itself pulled between competing interests. The established capital goods and manufacturing sectors lobbied government to preserve their export markets, which gave rise to the conflict between free trade and imperial preference (the latter being an attempt to stunt the growth of capital production and manufacturing in the colonies, which inevitably failed because no one seemed to appreciate that this wasn't what the dominions themselves wanted). Meanwhile, there was a conscious effort to consolidate the fragmented primary goods and manufacturing sectors during the twentieth century, notably coal, steel and automobile production. Typically, this was done by a combination of nationalisation, the encouragement of private sector mergers, and various schemes in between where the state would act as a sleeping partner underwriting private capital with public money. 

What remained a constant was the interests of high finance and the influence it exerted on the UK state - what Giovanni Arrighi, in The Long Twentieth Century, refered to as its "pecuniary rationality". Despite the retreat from the gold standard and the emergence of capital markets in New York and Tokyo, the City of London continued to exert sway over the state's fiscal policy and industrial strategy, constraining the former (the "Treasury view") and showing little enthusiasm for the latter. Indeed, if nationalisation in the UK was characterised by a willingness to preserve the existing management culture and resist workers' control, it was also marked by a desire to side-step the City's lack of interest in domestic opportunities and to short-cut the process of private sector consolidation. The problem was that the fiscal constraints inevitably led to under-investment in those nationalised industries by the state: neither brave enough to defy the money markets nor brave enough to reform British management.

The technological first-mover advantage that the UK benefited from in the late-eighteenth and early-nineteenth centuries (roughly 1760-1840) now looks like a historical one-off, both in terms of the transformative effects it had on society (e.g. urbanisation) and in its duration, though you could make an argument for China's economic catch-up since 1978 being an echo of it, albeit through the absorption of common technologies into an untapped domestic market and then through labour cost arbitrage with the West. Subsequent cycles of advance, notably the second industrial revolution (1870-1914) and more recently the digital revolution (1970-1990), saw new technologies dispersed globally in ever more rapid bursts. This in turn means that the boost to GDP growth arising from new technologies tends to be weaker and much shorter. While tech-boosterism is still a thing among politicians and pundits, the likes of Tony Blair look increasingly naive in their fetishistic belief that the embrace of technology alone can transform a nation's fortunes. 

Today, growth above the historic mean, or even above the level of national comparators, can only arise in two ways. One is a historic conjuncture in which secular trends and contingent opportunities coincide to produce a benign environment. For example, a demographic bulge that rapidly adds youth to the working population or the demands of reconstruction after a period of major destruction. The second is a major change in the composition of the economy that provides a higher-level comparative advantage. For example, the discovery of oil, or other valuable resources, within a territory or the rapid expansion of an export-oriented industry that cannot be quickly replicated by competitors (such as semiconductor fabrication). Of course, these developments themselves entail risks, notably the resource curse in the first instance and exposure to fluctuating foreign demand and currency speculation in the second. A safer approach may be a state-led change in the compostion of the economy but for a developed nation with already mature technology like the UK such a change is more difficult to achieve: you can't just take it off the shelf as the Chinese did.

Outside these exceptional circumstances, the ambition for most states will be growth close to the international average. For developed economies, that's been around 2% per annum over the last twenty years. The UK is currently at about 0.5%, so there's certainly headroom, but getting closer to 2% won't generate the sort of tax incomes, ceteris paribus, required to fund much long-term investment, particularly given the demands to boost day-to-day spending on the NHS, social care and crumbling local goverment services. The green prosperity fund - or green new deal if you prefer, emphasising the pro-labour and pro-social aspects - offered a potential way out of this bind: a major retooling that would boost growth in the short-term and make the economy more competitive in the longer-term so sustaining that growth (or at least enabling the UK to keep up with its peer group). In rejecting the idea of using the green transition to boost growth, Labour are not simply allowing the Tories to set the agenda, or giving up on the climate crisis, they are confirming that the stranglehold of the City, last seen during the Truss debacle, remains very much in place. 

Labour hasn't been the party of the workers since the 1970s, and even then workerism was only one of a number of competing ideological strands, but it did retain a credible claim to be the party of growth long past that point and as recently as 2019. With this announcement, Starmer and Reeves have confirmed that it has given up that claim and is now simply the party of sound money: the "fiscal rules" have become a fetishistic end in themselves rather than the means to a particular fiscal end (higher spending, lower taxes etc). The move to the right on policy (i.e. all those promises reneged), like the authoritarianism and managerial brutality, are not simply the instinctive behaviours of the right wing of the party. They are an expression of an overarching commitment to sound money that inevitably produces a conservative, pessimistic mindset and a preference for austerity: the constraint of the growth they claim to be in favour of. Labour has no industrial strategy because it has no growth strategy beyond a pious hope.

Friday 2 February 2024

All in the Family

Gothic is coded posh. Or, to put it another way, gothic is a romantic recuperation of the past in which ruined property represents the decline of a hierarchical order: the bare ruined choirs of an abandoned abbey; the forbidding castle of the absentee landlord. The persistence of social hierarchy, and the contemporary economic importance of property, mean that the gothic is never far from the surface of our culture. Unfortunately, this often gives rise to a fetishisation of the property and an unrealistic, even hysterical, treatment of social relations. A recent example is Emerald Fennell's film, Saltburn, in which a middle-class psychopath destroys an aristocratic family and inherits their country pile. You probably saw that coming a mile off, even without the signposting to Brideshead Revisited and The Talented Mr. Ripley. Two far superior films, with striking similarities in plot but which use the gothic in more varied and imaginative ways, are Joanna Hogg's The Eternal Daughter and Andrew Haigh's All of Us Strangers. Of the two, Hogg's film is the more obvious in the way that it plays with gothic tropes, but it does so precisely to wrong-foot expectations. Haigh's film is more subtle in its use of gothic themes, but that is because its class milieu is very different.

The Eternal Daughter re-uses the upper-middle-class mother and daughter from Hogg's two Souvenir films, Rosalind and Julie, but here both are played by Tilda Swinton. The film opens in suitably gothic style with mist and enveloping darkness as the pair plus dog arrive at a Welsh mansion, now converted to a hotel. The cabbie provides a tale-cum-warning. Naturally, the hotel is all but deserted, the receptionist is sour and unhelpful (she's Welsh and thus coded as resentful and lower class), and there are lots of noises in the night. The purpose of the visit is for some mother and daughter quality time, but it's clear that the relationship though loving is cool, even formal, with polite ministrations substituting for meaningful engagement. It's all very upper middle class in its emotional restraint and acceptance that there is an unbridgeable divide between the generations. There is also a strain of cynicism: Julie is covertly recording her mother's comments as raw material for a screenplay she is writing, which presumably reflects Hogg's own ambivalence about her autofictional approach to filmmaking.

It transpires that the building was one that Rosalind lived in as a young girl during World War II (it was owned by an aunt), and that she carries memories - some nice, some not so nice - of what occured there. Suitably cued, you're expecting something bad to happen and sure enough the dog goes missing. Julie enlists the help of Bill, an enigmatic member of staff, and they search the grounds. The dog then turns up in Julie's room. This is the signal for a tonal shift away from the gothic. Julie shares a drink with Bill, who offers advice on bereavement: Julie has lost her father and Bill his wife. She later hears Rosalind tell Bill that she, Julie, has no children and will thus lack a dutiful daughter to care for her in her old age. The film reaches its climax with a birthday meal for Rosalind at which point we suddenly realise that the reason we never saw both characters in the same shot was not because they're played by the same actress but because Rosalind was never there: she too is dead. Julie is at the hotel on her own, working on a screenplay (presumably this film) and thus conjuring up her mother's ghost. As the film concludes, we realise that the hotel isn't deserted, that the receptionist is solicitous and that the weather is fine. Further confusing expectations, the wise old head Bill turns out to be real, rather than another projection of Julie's psyche. 

A common and recurrent motif in both Hogg's film and Andrew Haigh's All of Us Strangers is the protagonist looking out of a window but in a way that suggests they are looking into the past rather than observing the present. Haigh's protagonist is Adam, played by Andrew Scott, a gay screenwriter approaching middle age who not only doesn't have kids but appears to have no friends: they moved out to the suburbs and country to raise families. Like Julie, Adam is in search of his dead parents and struggling to write about them. On a research trip to his modest childhood home in Sanderstead, he encounters a trim man in his 30s with a 'tache. What looks for all the world like a pickup turns out to be a visitation by his 80s-era father who takes him home where he is welcomed by his mother who recognises her now grownup son by his eyes. Just as Julie sought to establish a greater rapport with her mother, so Adam seeks to explain himself to his mum and dad, played by Claire Foy and Jamie Bell. This primarily means coming out to them but it also means expressing what their loss meant to him. They died when he was only 12, after which he was brought up by a granny in Dublin (which explains Scott's accent). 

There's a degree of humour in the generational divide that veers perilously close to a 1970s sitcom, but the real subject is the unbearable weight of a love that cannot now be expressed even if the imaginative encounter with his parents provides the consolation that they would love him just as much now as they did when he was a shy and sensitive child. As with Julie and her mother, not only does Adam conjure his parents' ghosts but he is finally ghosted by them over a meal, in Croydon's Whitgift Centre of all places. The twist in this tale involves Harry, played by Paul Mescal, the only other occupant of Adam's London tower block, who offers human contact and warmth as much as sex, but who is eventually revealed to be another imaginative projection of Adam's mind but, tragically, extrapolated from an all too real person who is also now dead. Adam is lonely - pathologically lonely, adrift in a building that is improbably empty and constantly replaying the queer-coded music of his 80s youth: Erasure, the Pet Shop Boys, Frankie Goes to Hollywood.

The difference between the two films reflects the class of the parents and how this has affected the child's understanding of the world. Rosalind's emotional reticence and Julie's instrumentalism have left their relationship transactional. Gestures of care and tokens of memory - Julie's presents for her mother, her mothers stash of photographs - have become the medium of exchange. Honest expressions of feeling are avoided and when Julie's finally burst through they come across as self-pitying and selfish. In contrast, Adam's parents are more emotionally engaged - allowing Adam into their bed, relishing shared joys like dressing the Christmas tree - but their view of the world - dismissing "poofy shit" - was as typical of their day as the easy relationship with drink and cigarettes. Adam's loneliness is rooted in his belief that they could never have understood what he was experiencing as a bullied schoolkid: that he was effectively orphaned before their deaths in a car crash. Their return offers a chance for Adam to convince himself that it wouldn't have mattered: that they would have evolved with the times while continuing to love him for who he was and is.

The property in The Eternal Daughter has been lost to the family. It is now a commercial, and thus a slightly grubby middle-class, concern rather than a gentry family home with all its history of good and bad. Despite the early suggestions of ruin, the Welsh mansion is actually in good condition and a popular hotel. As such, it represents an optimistic view of changing social relations: evolving towards a more democratic if essentially capitalist future. The property in All of Us Strangers is cosy but also empty. Adam never interrupts the present owners of his childhood home. They aren't there just as there is no one, apart from Harry, in the block of well-appointed flats in London where Adam now lives, which feels more like an abandoned spaceship than a slab of prime real estate, an effect heightened by the vivid sunsets that Adam observes from his 22nd floor eyrie. This property is also capitalist but it looks more like an investment: the urban flat as safe deposit box for distant investors; the suburban home as a Thatcherite aspiration now found to be devoid of humanity. 

Gothic fiction is characterised by fear, the supernatural and the demands the past makes on the present. Julie fears a childless old age, Adam a life of loneliness. For both of them the supernatural is less a threat than a device that allows them to commune with the dead: a form of spiritualism for people who don't believe in spirits. The dynamic of both stories sets a time-limit on the past's demands - there is no haunting as such and the ghosts are a friendly as Caspar - and both protagonists come to realise that they must let the past go so that they, rather than the dead, can rest in peace. Both films ultimately supersede the gothic: Hogg's by highlighting the self-indulgence of the aesthetic and letting the light of day in; Haigh's by revealing that terror and inconsolable loss are quotidian emotions that affect us all, not the preserve of a social elite with refined sensibilities. Both are wonderful films. In contrast, the ending of Saltburn, in which Barry Keoghan's character cavorts naked through his newly-acquired palatial home, suggests little more than the masturbatory fantasy of an estate agent as imagined by someone who knows the correct cutlery to use on all occasions.

Friday 26 January 2024

Labour Teleology

The Labour Party has always historicised itself. If Conservatives incline towards biography (as do Liberals, which tells you a lot), Labourites have preferred to situate their story within the broad sweep of British narrative history, though in practice this has tended to be largely English history of the sort made famous by RH Tawney and EP Thompson: somewhat sanctimonious and proudly parochial. This is partly the product of insecurity - a recognition that the Conservatives and Liberals long defined official English history so an alternative story needed to be told - and partly a recognition that the individual should not be elevated above the collective - something that became an article of faith after Ramsay MacDonald let high office go to his head. Whereas the Conservative Party is rooted in a belief that the old regime will persist, Labour is committed to the idea that, to coin a phrase, "Things can only get better". While in reality often less optimistic (Fabian gradualism), even downright pessimistic ("the forward march of Labour halted"), there is still the sense that Labour is on the right side of history and should therefore embrace the future.

In its earliest days this commitment went beyond vague progressivism to a concrete teleology: the labour movement had a social and economic goal and the party had a legislative programme to achieve it that could feasibly be enacted one day. Of course, there were differences of opinion about what that goal was, hence the ambiguity of the terms socialism and social democracy in Labour Party discourse, though these tended to be presented as debates on means rather than ends: essentially bureaucratic gradualism versus state activism. In contrast, conservatism is by definition anti-teleological. Preservation of the past is necessarily the deferral of the future. Modern conservatism, since the late 1970s, has employed the trope of progress and even revolution but in the context of a regressive movement in time: back to basics, it's morning in America again. The current appetite among Tories for a Thatcherite revival is a decadent example of this: an insistence that supply-side stimulus can once more work its magic despite the blunt rejection by reality when Liz Truss attempted it. 

Postwar Labour revisionism was essentially the claim that the party's goal had been achieved by the 1950s and that the future would simply be a matter of efficient management of the social gains. In other words, bureaucratic gradualism won the day. Progress was still possible, but this would be the organic product of growing enlightenment rather than the engineering of social relations. This was a rejection of socialism in favour of the early twentieth century welfare liberalism that Labour had superseded when it supplanted the old Liberal Party. The debate in Labour in the 1960s and 70s was characterised by the revisionists refusal to admit this truth until the breakaway SDP. Even then, the claim to be the inheritors of the tradition of "social democracy" was a denial. Reality eventually obliged the SDP to fold into the Liberal Party. This surprisingly tortuous process took some years due to the egos involved, notably those of Roy Jenkins and David Owen, which emphasised how much the politics were essentially biographical (Jenkins, who had already written a life of Asquith, became a serial biographer once his political career ended).

The important point to note here is that welfare liberalism was still recognisably progressive. While it might advocate a different economic path - less nationalisation, more free trade (in the EEC) - it was congruent with the social goals of the labour movement in terms of improved rights and more extensive social goods. In the event, the reinvented conservative movement took over that economic path and married it with a regressive social agenda in the 1980s, which marginalised not only the socialist strand of Labour but the liberal strand as well. The emergence of New Labour (the very name redolent of progress and novelty) marked not only the formal acceptance of the Conservative Party's economic dispensation but its social prejudices too, hence the focus on welfare reform, antisocial behaviour and school discipline. This produced a government that regularly regretted its own liberal impulses (e.g. over the Freedom of Information Act) but this was offset by an optimism that made it confident enough to renounce its own past in the service of the future (e.g. Clause IV). The current Labour leadership represents not so much a return to the New Labour mix of light and dark as a bias towards that underlying strain of pessimism. The demand by Blairites for another "Clause IV moment" is telling inasmuch as Keir Starmer shows no appetite for it. What he appears to prefer are purges and disciplinary sanctions. Lacking the optimism of 1997, all we are left with is the authoritarianism.

Shorn of hope, all Labour can now offer is a permanently deferred future: "if the fiscal rules allow". It has become the party of no future, even if that designation is being widely applied to the Conservatives as they continue to poll badly. Tony Blair was obsessed with the future, even if it was one constructed out of mangement consultancy hype and his own credulity. In contrast, Keir Starmer seems permanently discomfited by the idea that tomorrow may be different from today, while Rachel Reeves, desperately trying to cultivate an intellectual hinterland, appears to have never had an original thought in her life: everthing is second-hand or shop-worn. The prospect for the general election later this year is of two parties painting a bleak future. The Tories will inevitably resort to "Don't let Labour ruin it" and point to the weak shoots of growth, if only because they simply haven't got an alternative, but the future they envisage will therefore be one that is fragile and anxious. Labour will say all the right things about getting a grip, restoring trust and boosting the economy, but on every substantive issue they will equivocate or urge "realism" about how much (i.e how little) can be done. The future they envisage will be equally underwhelming.

The parallel for the 2024 general election may turn out to be 1983 rather than 1997. Not in its outcome, of course - a Conservative landslide that depended on the Falklands War and the SDP - but in the bleakness of the main parties' offerings as mediated by the press and TV. The Thatcher government might have been buoyed by victory in the South Atlantic, but its message wasn't an echo of 1945's New Jerusalem but a promise to continue the policies that had led to recession and deindustrialisation. While the economy had improved, there was no promise of sunny uplands. Instead there was an emphasis on the intractability of unemployment and the threats of lawlessness, the USSR and trade unions. For Labour, the most famous speech of the campaign was by the then Shadow Education Secretary, Neil Kinnock: "If Margaret Thatcher wins on Thursday, I warn you not to be ordinary. I warn you not to be young. I warn you not to fall ill. I warn you not to get old". For partisan reasons, there was an unwillingness at the time and later to acknowledge the progressive temper of the 1983 manifesto, which was notoriously described by Gerald Kaufman as "the longest suicide note in history", hence the prominence given to Kinnock which all but sealed his elevation as the next party leader.

The chief dynamic of UK politics since 2019 has been the Labour Party's shift to the right. The Conservatives are out of ideas, but still able to set the agenda in the confident expectation that Labour will follow where they lead. Thus debate centres on whether tax cuts are feasible, not on whether we should change the balance of taxation between wages and wealth, while the NHS is portrayed as in dire need of reform rather than just the resources necessary to do its job. Liberal opinion is fretful over the adoption of centre-right policies and the next government's room for fiscal manoeuvre, but it isn't about to urge that we revisit the arguments of the socialist left. That's because British liberals long ago made peace with their conservative instincts. As was made painfully clear during the EU referendum and the ensuing campaign against Corbyn, and most recently in the response to the war in Gaza, they are in the business of preserving the old regime. Progress is to be welcomed, but at a snail's pace. This liberal-conservatism has now hegemonised Labour, with the result that the party of progress has lost confidence in the future. One symptom of this is a revival of biography, even if masquerading as narrative history, which is ironic given the dearth of personalities in the current leadership. Labour's teleology is at an end.

Tuesday 16 January 2024

Beyond the Horizon

Most English Premier League football clubs have now introduced digital passes for ticket-holders. There have been teething problems, but the technology is clearly here to stay: a bit like VAR. There are a number of reasons for this, from clamping down on ticket-touting (though the touts are still to be seen - I have no idea how they do it now) to better crowd safety (the long legacy of Hillsborough and the Taylor Report), but another driver for clubs' investment in ticketing technology since the 1980s was fraud at the margin - i.e. gate operators letting people under or over the turnstile, so the counter ratchet didn't click, and pocketing the money. To an extent this had always been tolerated as the cost of prevention was high and the loss to the club marginal, but it became a much bigger issue as entrance prices went up and clubs became more dependent on their matchday income. While wealthy foreign owners have driven inflation in the game since the millennium, financial fair play rules have simply reinforced the need to squeeze every last penny from the gate.

The reason I raise this is that it provides a useful entry-point for discussing what has come to be known as the Post Office scandal. There are two parts to this: the bug-ridden Horizon IT system and the response of the Post Office management to the unfolding debacle. Both were informed by a suspicion that the organisation was being defrauded at the margin, though it's central to the sorry tale that this started out as a belief that benefit claimants were defrauding the state, not just sub-postmasters and sub-postmistresses defrauding Post Office Limited. It's also worth emphasising at this point that, with the exception of a handful of Crown Post Offices, those sub-postmasters are independent franchisees - i.e. small business people. This is important because it highlights a discrepancy between the positive rhetoric around self-employment and sub-contractors and the harsh reality of asymmetric commercial relations (it's also worth noting in passing that there are a lot of pseudo-SME arrangements in the public sector, e.g. doctors, as well as in the grey areas of public corporations, e.g. the BBC, and state owned commercial entities such as the Post Office).

While the now-famous (and likely to be awards-laden) ITV drama, Mr Bates vs The Post Office, focused on the human interest of the present, and while much of the subsequent outrage has focused on the perversity of the law and the recent underfunding of the courts, necessitating an act of Parliament to unpick the mess, to do the story justice (sic) you really need to look at the longer history. It might appear unnecessary to start with the origins of the General Post Office in 1635, but we should certainly go back as far as 1838 and the introduction of money orders, which is when the opportunities for fraud at the margin start to proliferate. The need for strict financial controls was reinforced by the creation of the Post Office Savings Bank in 1861 and the gradual expansion of state financial services culminating in the payment of old age pensions in 1909. The GPO has been investigating fraud at the margin for over 300 years, but this has been reported in the context of the scandal as evidence that it had become a law unto itself: that it shouldn't have been pursuing private prosecutions outside the purview of the Crown Prosecution Service. 

But this misses the crucial point that the Post Office has a long data series - a corporate memory, if you will - on fraud at the margin. Why did no one notice the statistical anomaly of a significant rise in fraud prosecutions, estimated to be from an average of 5 a year to 55, after the introduction of the Horizon system? The likely answer is that Post Office management suspected the higher level of fraud was always there but that only now, with the benefit of computer-based accounting, were they able to uncover it. It's also worth noting here the downward secular trend in Post Office revenues and the pressure this exerted on management to reduce losses and thus reliance on state subsidies. What's less understandable is why government ministers weren't (as far as I can tell) asking the obvious question, i.e. is this increase in cases statistically credible?, particularly when you consider how wedded both New Labour and the subsequent coalition were to targets and metrics as part of the culture of New Public Management (NPM). The suspicion must be that politicians who spout about "business rigour" and "evidence-based policy" are mostly clueless when it comes to basic data analysis.

The second historical strand worth looking at is the origin and development of ICL. The business was created under the second Wilson government in 1968 and overseen by Tony Benn, the then Minister for Technology. It was an example of an industry "champion" (what would later be derided as "picking winners") formed by the merger of three UK computer fims. The state would have a 10% stake and would provide funding for research and development. The aim was to build a domestic competitor to IBM that could service both the UK public and private sectors and also develop an export market. Unfortunately, it started out with a 6-bit architecture instead of the by then standard 8-bit byte, as used by IBM and others, making its products a technological dead-end. It ended up marketing Fujitsu mainframes and minis, which were IBM clones. That gave the Japanese a route into the UK public sector, which they consolidated by buying a majority stake in ICL in 1990. The point to note here is that unlike IBM, which reinvented itself around software and services, ICL and Fujitsu were always chiefly hardware businesses. 

The primary political driver for the creation of the Horizon system was the plan, developed under the Major administration, to introduce magnetic swipe-cards for the payment of benefits, which it was thought would reduce fraud. The conversion of other Post Office counter business from a largely paper-based system to an electronic point of sale (EPOS) system was a secondary political consideration, though clearly from the perspective of the Post Office itself this was the commercial priority. The project was an early example of a private finance initiative (PFI), with the developer to recoup their costs and profit via transaction fees. ICL Pathway Limited was set up with the explicit purpose of winning the bid for Fujitsu, which it did in 1996. By 1999, with Labour now in government, the project was already a mess, not least because of doubts about the long-term viability of swipe-cards (chip-and-pin, common in Europe in the 1990s, arrived in the UK in 2003). As a result, the benefits element was ditched and the project scope reduced to the counter business.

Instead of going back to the drawing board, ICL Pathway decided to simply build on top of the already flaky prototype. It is clear from evidence already presented in public inquiries (herehere and here) that Horizon was a badly-run project, with a poor architectural design, that tried to integrate with new third-party technology as it went (e.g. Windows, Oracle, SAP and wide-area networking). There appears to have been no consistent development methodology, no automated test framework, and poor bug management and version control. The smell it gives off is of a second-rate mainframe-centric business circa the mid-80s, which isn't surprising. What this in turn highlights is that there was inadequate IT competence at a senior level within the Post Office, which could have independently assessed ICL Pathway, and equally little technical nous within govenment, despite the public technophilia of the likes of Tony Blair. What is also clear is that the then Trade and Industry Secretary, Peter Mandelson, was pushing ICL Pathway to meet deadlines when the correct course of action would have been to abort the project, re-specify the requirements, and start a fresh tender process on a fixed-cost plus margin basis.

There have been multiple TV dramas about Hillsborough and Grenfell, and yet justice has not been delivered in either case and the prospect of special acts of parliament to deliver it are negligible (though it should be said that the proposed Post Office act may never see light of day given the issues of principle it raises). The difference between those tragedies and the Post Office scandal is that they highlighted the negligence of the state towards ordinary people: the contempt of South Yorkshire police towards football fans in the one, and the disdain of a Conservative borough council towards poorer residents in the other. At Hillsborough, there was no appetite in government to criticise a force that had been central to the defeat of the miners five years earlier. As Thatcher herself said in response to the Taylor report, "The broad thrust is devastating criticism of the police. Is that for us to welcome?" Likewise, in the shadow of Grenfell Tower there was little desire to criticise a borough for cheeseparing when that had been the order of the day in local government for decades and when building safety had been presented as a contraint on enterprise ripe for deregulation. 

Ironically, had the Post Office remained fully in the public sector - i.e. as a public corporation rather than as a state-owned private company - the scandal could have dragged on even longer as there might have been greater political ramifications, but equally it might not have happened in the first place as the imperatives - that combination of a bad technology choice and government pressure to be a PFI success - could have been lacking. I don't imagine post offices would still be run on paper records, but a more thoughtful project might have decided to simply adopt a proven, off-the-shelf EPOS system with standard back-end ERP integration (post offices are just retail outlets, after all). The root problem was that initial demand to handle benefit payments, which in turn arose from the delusion that fraud at the margin could be reduced by a large enough figure to satisfy the critics of welfare. The compounding factor was the insistence of ministers that Post Office Limited should operate at arms-length from the state while being put under pressure by its owner (those same ministers) to be a commercial success.

The foot-dragging by the Post Office after the initial evidence that sub-postmasters were being wrongly convicted was not just the usual arse-covering or desire to minimise costs, it also reflected the history of petty fraud within the business and the fear that a general amnesty and blanket compensation might benefit the guilty as well as the innocent. Over-and-above bad management and poor IT practice, the scandal highlights the gulf that exists between the theory of the small business (incentivised, hard-working, responsible) and the reality (muddling through, sometimes incompetent, dodgy at the margins). What's depressing about the otherwise laudable TV drama and the public response to it is the idea that these people must have been innocent precisely because they were small business operators: that cuddly Toby Jones. In other words, they have been given the benefit of the doubt (albeit there are limits) in a way that the victims of Hillsborough and Grenfell never were.