Labour: the hard facts

Good column by Eunice Goes on The Conversation:

So far, no one has shown that they understood the causes of Labour’s defeat in 2015 and the problems social democracies have had all over the world following the global financial crisis. Instead, they have preferred to talk about micro policy ideas, such as free childcare and sex education policies. None seem to fit into a larger narrative.

The truth of the matter is that the Labour Party is stuck in a very deep hole. Research from the Fabian Society shows that in order to secure a majority in 2020, Labour needs to gain at least 106 seats in very different parts of the country. Considering the forthcoming constituency boundary changes and the advent of truly multi-party politics, that task seems like mission impossible.

In order to win, Labour needs to find an electoral formula that attracts Tory voters in the south of England and UKIP voters in the Midlands and north-east of England. In Scotland it needs to attract SNP voters and the south-west and English urban centres cities it needs to pull in Liberal Democrat and Green voters. None of the current contenders to the leadership of the Labour Party has so far shown that they are able to pull off this very difficult electoral trick.

That’s true. The bigger question, though, is whether the Labour party could ever pull off this trick without being rebuilt from the ground up.

Those whom the Gods wish to destroy, they first make acquiescent

One of the great puzzles of our time (for me at least) is the pervasive passive acquiescence of populations in Western democracies in what has been happening to society — and being done to ordinary people. Why did the economic catastrophe brought about by the madness and greed of the banking industry not lead to revolutionary outrage? Why did the Occupy movement in the end turn out to have such little purchase? Why did Syriza come in with a bang and surrender with such a whimper? And why are people so accepting of the abuses of state and corporate surveillance?

One of the most interesting explorations of this phenomenon is a new book, The Age of Acquiescence: The Life and Death of American Resistance to Organized Wealth and Power by Steve Fraser. It’s already had a few thoughtful reviews — for example Jill Lepore’s essay in the New Yorker. “To chronicle the rise of acquiescence”, Lepore writes,

Fraser examines two differences between the long nineteenth century and today. “The first Gilded Age, despite its glaring inequities, was accompanied by a gradual rise in the standard of living; the second by a gradual erosion,” he writes. In the first Gilded Age, everyone from reporters to politicians apparently felt comfortable painting plutocrats as villains; in the second, this is, somehow, forbidden. “If the first Gilded Age was full of sound and fury,” he writes, “the second seemed to take place in a padded cell.” Fraser argues that while Progressive Era muckrakers ended the first Gilded Age by drawing on an age-old tradition of dissent to criticize prevailing economic, social, and political arrangements, today’s left doesn’t engage in dissent; it engages in consent, urging solutions that align with neoliberalism, technological determinism, and global capitalism: “Environmental despoiling arouses righteous eating; cultural decay inspires charter schools; rebellion against work becomes work as a form of rebellion; old-form anticlericalism morphs into the piety of the secular; the break with convention ends up as the politics of style; the cri de coeur against alienation surrenders to the triumph of the solitary; the marriage of political and cultural radicalism ends in divorce.” Why not blame the financial industry? Why not blame the Congress that deregulated it? Why not blame the system itself? Because, Fraser argues, the left has been cowed into silence on the main subject at hand: “What we could not do, what was not even speakable, was to tamper with the basic institutions of financial capitalism.”

Now, in Dissent Rich Yeselson muses on the same paradox.

The moment of resistance to capitalism in its period of violent gestation is now gone; the defense of a then still vibrant moral economy has ended. His evocative prose grows more abstract as he lacks a narrative of conflict to hang it on. He presents three “fables of freedom” that serve as ballasts of the current order: the addiction to consumption; the odd deification of high-tech titans and even criminal investment bankers as anti-establishment rebels; and the fantasy of the “free agent,” the independent contractor liberated from the constraints of security, benefits, and community.

In an Observer column a while back, I pondered possible explanations for apparent acquiescence in corporate surveillance. One is that people simply have no idea what’s going on. This seems to me to be unduly patronising: it assumes that most people are clueless idiots. Another possible explanation is that people really value the ‘free’ services they get in return for sacrificing their privacy.

And then I hit on an interesting piece of research done by researchers in the University of Pennsylvania in conjunction with the PEW Internet and American Life project. They polled a representative survey of 1,500 US internet users to see what they thought about surveillance-driven business models. They concluded that internet companies are misrepresenting a large majority of Americans by claiming that people give out information about themselves as a trade-off for benefits they receive.

The findings also suggest that users’ willingness to provide personal information to web services cannot be explained by ignorance. Instead, the researchers propose a different explanation – that

a majority of Americans are resigned to giving up their data – and that is why many appear to be engaging in trade-offs. Resignation occurs when a person believes an undesirable outcome is inevitable and feels powerless to stop it. Rather than feeling able to make choices, Americans believe it is futile to manage what companies can learn about them. Our study reveals that more than half do not want to lose control over their information but also believe this loss of control has already happened.

If this is really what’s going on, we have arrived at a very strange place indeed – a neoliberal paradise in which people display the kind of passive resignation Václav Havel observed in Czechoslovakia under Soviet rule and analysed in his great essay The Power of the Powerless. “Human beings are compelled to live within a lie,” Havel wrote, “but they can be compelled to do so only because they are in fact capable of living in this way.”

Has it really come to this?

Brooding on this, I wondered what a serious pushback might be like. Hacktivism is one possible avenue. The trouble is that you need technical nous to do it seriously, and most people don’t possess that kind of expertise. Also it can have serious personal downsides, like infringing the Computer Misuse Act, for example.

But there is another kind of activism that doesn’t require any expertise. It just requires an act of will. It is that of boycotting services that one regards as exploitative. If a few million people in Britain and elsewhere boycotted Facebook then the impact would be significant, both in terms of breaking the spell of resigned acquiescence, and also in sending a signal to the corporation (and, more particularly, its board of directors) that perhaps their exploitative and manipulative practices might, in the long run, be damaging to shareholder value. After all, if the illusion of inexorable growth is challenged, then valuations will fall. Look, for example, at current Wall Street concern about the slowing down of Twitter’s growth. And if valuations start to fall, then the fiduciary duties of directors will come into play.

In a way, it’s like judo: using the opponent’s strength against him. Richard Stallman did it with copyright law — he used it to protect the right of programmers to give stuff away on condition that anyone who used their stuff had also to give it away on the same conditions. He called it Copyleft.

It’s the technique the Guardian has used in its climate change campaign. The paper fastened on a simple idea that anybody could understand: that if we extract and burn all the fossil reserves on earth then we will generate enough global warming to fry the planet several times over. So: leave those reserves in the ground. And campaign for disinvestment in companies which still have plans to extract fossil reserves.

Since disinvestment by serious outfits like pension funds will have the impact of reducing share prices (and therefore ‘shareholder value’), directors of such companies suddenly had a fiduciary duty to take an interest in what their companies are doing — which may lead them to conclude that protecting the shareholder interest may involve getting out of fossil fuel extraction.

We could use a similar approach with Facebook, Google & Co.

The puzzle at the heart of modern history

… well, as Isaiah Berlin saw it anyway (as summarised by Mark Lilla in his essay in The Legacy of Isaiah Berlin):

“The puzzle is this: how did the optimistic and progressive spirit of 18th-century Europe give way to the dark and terrifying world of the 19th and 20th centuries? How did the Europe that produced Goethe and Kant, Voltaire and Rousseau, Tolstoy and Chekhov, also produce the Lager and the Gulag?”

Labour’s ‘leadership’ contest

This morning I watched one of the most depressing TV programmes of 2015 — Andrew Neil on Sunday Politics grilling the four candidates for the Labour leadership. At times, one had the impression that all four inhabited a parallel universe to the one in which the party was roundly defeated in May. This Observer editorial puts it well:

Two months after a disastrous election defeat, Labour is mired in a lengthy, inwardly focused leadership election. The debates are of micro-politics, not existential crisis. There is an assumption of relevance, just as the party is stalked by irrelevance. It is as though the election never happened. Maybe Labour needs reminding what happened on 7 May. It not only lost but was routed in many heartlands, crushed in marginals and rendered virtually invisible in the south. To paraphrase the now infamous foreign football commentator who relished an England defeat, “Labour, your boys took one hell of a beating.”

If a leaked poll is any guide, then a growing number of the Labour party membership now seem to view Jeremy Corbyn as the answer to that drubbing. This is like a pupil who, on being told they answered incorrectly, repeats the same answer shouting ever more forcefully. It’s still the wrong answer. The party faces a choice. It can strive to get re-elected and thereby have an impact on those it purports to represent. Or it can sink in to a warm bath of delusion and face an even larger wipeout in 2020.

On top of that, there are two looming problems: (i) the total wipe-out of the party in Scotland, and (ii) the impending revision of electoral boundaries in England. The implications are that Labour may never again win an election in a country effectively consisting of England, Wales and Northern Ireland. So the game’s up for the party hitherto known as “Labour”.

The only thing that will work is a radical conceptualization of it as a technologically-savvy progressive centrist party focussed on the socio-economic problems and challenges that will emerge in the next three decades. Reconceptualization on this scale is at least a ten-year project, which also means that Labour will not win the next election in 2020. So what the leadership election ought to be about is who could lead the re-invention of a party along the lines that are needed.

But — as today’s TV hustings showed — it isn’t about anything like that, but simply about which Westminster insider will get the nod and the official car.

So is Grexit really Germany’s policy?

Barry Eichengreen (who is currently the Pitt Professor in Cambridge) thinks so:

Germany wants Greece to choose between economic collapse and leaving the eurozone. Both options would mean economic disaster; the first, if not both, would be politically disastrous as well.

When I wrote in 2007 that no member state would voluntarily leave the eurozone, I emphasized the high economic costs of such a decision. The Greek government has shown that it understands this. Following the referendum, it agreed to what it – and the voters – had just rejected: a set of very painful and difficult conditions. Tsipras and his new finance minister, Euclid Tsakalotos, have gone to extraordinary lengths to mollify Greece’s creditors.

But when I concluded that no country would leave the eurozone, I failed to imagine that Germany would force another member out. This, clearly, would be the effect of the politically intolerable and economically perverse conditions tabled by Germany’s finance ministry.

Barry thinks that German Finance Minister Wolfgang Schäuble’s idea of a temporary “time out” from the euro is “ludicrous”.

Given Greece’s collapsing economy and growing humanitarian crisis, the government will have no choice, absent an agreement, but to print money to fund basic social services. It is inconceivable that a country in such deep distress could meet the conditions for euro adoption – inflation within 2% of the eurozone average and a stable exchange rate for two years – between now and the end of the decade. If Grexit occurs, it will not be a holiday; it will be a retirement.

Economically, what this means is that

the new program is perverse, because it will plunge Greece deeper into depression. It envisages raising additional taxes, cutting pensions further, and implementing automatic spending cuts if fiscal targets are missed. But it provides no basis for recovery or growth. The Greek economy is already in free-fall, and structural reforms alone will not reverse the downward spiral.

So the ‘agreement’ will eventually trigger Grexit, either because the creditors withdraw their support after fiscal targets are missed, or because the Greek people rebel. “Triggering that exit”, Eichengreen concludes, “is transparently Germany’s intent”.

Appeasement over encryption is a *really* bad idea

This morning’s Observer column:

Ever since the internet emerged into public view in the 1980s, a key question has been whether digital technology would pose an existential challenge to corporate and governmental power. In this context, I am what you might call a recovering utopian – “utopian” in that I once did believe that the technology would put it beyond the reach of state and corporate agencies; and “recovering” in the sense that my confidence in that early assessment has taken a hammering over the years. In that period, technology has sometimes trumped politics and/or commercial power, but at other times it’s been the other way round.

The early battles were over intellectual property. Since computers are essentially copying machines, making perfect copies of digital goods became child’s play. As a celebrated trope put it: “Copying is to digital technology as breathing is to animal life.” So began the copyright wars, triggered by widespread piracy and illicit sharing of copyrighted files, which emasculated the music industry and led to the emergence of new corporate masters of the media universe – Apple, Spotify, YouTube and the rest – and the taming of the file-sharing monster. Result: Technology 1, Establishment 1.

The second battleground was the monitoring of network communications. The internet enabled anyone to become a global publisher and to exchange information via email with anyone who had a network connection. And this posed acute difficulties for established powers that were accustomed to being able to control the flow of information to their citizens. Since nothing on the net in the early days was encrypted, everyone communicated using the virtual equivalent of holiday postcards – readable by everyone who handled them en route to their destination. The only difficulty that states experienced in monitoring this unprotected torrent was its sheer volume, but Moore’s Law and technological development fixed that. It became feasible to collect “the whole goddam haystack” (to quote a former NSA director) if you threw enough resources at it. So they did – as Edward Snowden revealed. Result: Technology 0 Establishment 1.

But the biggest battle has always been about encryption…

Read on

The German question redux

Since I’ve been ranting on about the evaporation of sovereignty in the Eurozone, I think it’s only fair to cite Gideon Rachman’s thoughtful reservations on the subject.

EUROPE WOKE UP on Monday to a lot of headlines about the humiliation of Greece, the triumph of an all-powerful Germany and the subversion of democracy in Europe.

What nonsense. If anybody has capitulated, it is Germany. The German government has just agreed, in principle, to another multibillion-euro bailout of Greece – the third so far. In return, it has received promises of economic reform from a Greek government that makes it clear that it profoundly disagrees with everything that it has just agreed to. The Syriza government will clearly do all it can to thwart the deal it has just signed. If that is a German victory, I would hate to see a defeat.

As for this stuff about the trashing of democracy in Greece – that too is nonsense. The Greek referendum on July 5 was in essence a vote that the rest of the eurozone should continue to lend Greece billions – but on conditions determined in Athens. That was never realistic. The real constraint on Greece’s freedom of actions is not the undemocratic nature of the EU. It is the fact that Greece is bust.

Quite. Roger Cohen also had a terrific piece in yesterday’s New York Times in which he mused on the way “the German question” has returned to preoccupy both the Germans and the rest of the European Union.

In the immediate post-war era, Cohen writes, the Question was clearly posed:

How to rebuild the country while keeping it under American tutelage? How to ensure it remained a political pygmy even when it had grown from the ruins to become an economic titan? Whether to reunite it, and how to do so within the framework of NATO and the European Union? How to integrate Germany so completely in Europe that it would never again be tempted to stray down some wayward path, or “Sonderweg”?

By the early 21st century, he continues, these issues had been resolved.

The United States had helped fashion the German Federal Republic and underwritten its security. The European Union had defused Franco-German enmity, Europe’s perennial scourge; a tacit understanding gave France political primacy even if Germany had the economic muscle.

Three things then upset this applecart. The first was the “poisoned chalice” of the euro.

Conceived to bind Germany to Europe, it instead bound far-weaker European countries to Germany, in what for some, notably Greece, proved an unsustainable straitjacket. It turbo-charged German economic dominance as Berlin’s export machine went to work. It wed countries of far laxer and more flexible Mediterranean culture to German diktats of discipline, predictability and austerity. It produced growing pressure to surrender sovereignty — for a currency union without political union is problematic — and this yielding was inevitably to German power.

The other two developments which combined to propel Germany into the driving seat were the declining economic and political power of France and its presidential leadership, and the withdrawal of the US from the continent’s affairs. In that context, it’s interesting that the Minsk ‘accords’ — which are supposed to restrain Putin from further troublemaking on the fringes of the EU — do not have the US as a signatory.

And the implications of all this?

Precisely the thing that Germans were most uneasy about, and their neighbors, too, has now occurred. Germany dominates Europe to a degree unimaginable even 15 years ago. When I lived in Berlin around the turn of the century, Germans were still debating whether they could ever be a “normal” country and whether they could ever feel “proud.” Now such rumination just seems quaint. Germany has decided it has no choice but to assume its power.

It wants to use it well. But its domination is stirring resentment, on a massive scale in Greece, where flip references to the Nazis are common; in France, where the feeling has grown that German severity with an already humiliated Greece is overblown; in Italy, where German-imposed austerity is resented; and in other countries of high unemployment and economic stagnation, where old anger toward Germany has not been entirely effaced by the passage of seven decades.

That phrase — “flip references to the Nazis” — reminds me of something Paul Mason said during the Greek election which brought Syrzia to power. He noticed that the anthem being sung by party activists was the one partisans used to sing when resisting the German occupation in the 1940s.

I’ve always admired modern Germany. I still do, especially when I compare its enlightened industrial system and federal, non-monarchical constitution (things which were imposed upon it, ironically, by Britain and its allies after the war) to the UK’s demented neoliberalism and hierarchical non-constitution. But yoking all kinds of less efficient economies to the German one was a catastrophic error, even if the intentions behind it were good. Everything that the sceptics warned would happen has happened.

And the oddest thing of all is that we in the UK have Gordon Brown to thank for keeping us out of it. If Tony Blair had had his way we would now be in it up to our necks.

CORRECTION: I incorrectly credited Simon Kuper with the first quotation in this post. It was in fact from a piece by another Financial Times columnist — Gideon Rachman. Thanks to Gerard de Vries for pointing this out.

The thoughts of Chairman George

Lovely piece by Glen Newey in the London Review of Books. Sample:

In accordance with the new five-year plan, the people’s economy will sustain yearly 2.5 per cent growth and a permanent budget surplus. Public sector deficit will be outlawed and consigned to pulped editions of the encyclopedia. In his address to the congress of people’s deputies the chancellor was able to announce that from next spring the old bourgeois-reformist ‘minimum’ wage will fade into the background. There will be a compulsory ‘living wage’ of £7.20 an hour for all workers (over the age of 25), to which the work and pensions secretary reacted with a spontaneous, rhapsodic outburst to convey the gratitude of the people. Younger workers will continue to enjoy the fruits of social solidarity by earning a minimum but not a living wage. They will receive £5.30 (if aged between 18 and 20) or £6.70 (if 21 to 25) per hour under the minimum wage from 1 October; apprentices will get a very generous 19 per cent increase to no less than £3.30. The rate for 16 and 17-year-olds will soar by a full 8 pence to £3.87 per hour. This is truly a pioneering moment in the life of the working masses.

The choice: Scylla or Charybidis?


The Greek ‘bailout’ neatly embodies the choice that now faces Western societies. In thinking about it I was reminded of Homer’s celebrated difficulty with the mythical sea-monsters, Scylla and Charybidis, summarised thus by Wikipedia:

Greek mythology sited them on opposite sides of the Strait of Messina between Sicily and the Italian mainland. Scylla was rationalized as a rock shoal (described as a six-headed sea monster) on the Italian side of the strait and Charybdis was a whirlpool off the coast of Sicily. They were regarded as a sea hazard located close enough to each other that they posed an inescapable threat to passing sailors; avoiding Charybdis meant passing too close to Scylla and vice versa. According to Homer, Odysseus was forced to choose which monster to confront while passing through the strait; he opted to pass by Scylla and lose only a few sailors, rather than risk the loss of his entire ship in the whirlpool.

(Fuseli’s painting doesn’t quite capture this. Artistic licence, huh!)

OK: how does this play out in our time? Answer, we’re caught between two pernicious economic dogmas: neoliberal austerity from the Anglophone world on the one hand; and, on the other, the German phobia about debt.

So much for national sovereignty

So the Greeks are having a repeat lesson in what it’s like to live under German domination. Or, as Paul Mason puts it

It was hard to see last night what the rulers of Europe wanted.

What they’ve arguably got is a global reputational disaster: the crushing of a left-wing government elected on a landslide, the flouting of a 61 per cent referendum result. The EU – a project founded to avoid conflict and deliver social justice – found itself transformed into the conveyor of relentless financial logic and nothing else.

Ordinary people don’t know enough about the financial logic to understand why this was always likely to happen: bonds, haircuts and currency mechanisms are distant concepts. Democracy is not. Everybody on earth with a smartphone understands what happened to democracy last night.

National sovereignty is an illusion in the Eurozone. But this particular penny took some time to drop in the hapless countries which joined the project. I remember well the euphoria which greeted Irish entry into the EU: at last we were a ‘proper’ country. EU membership enabled us to get out from under the shadow of our former colonial master. When it was Ireland’s turn to hold the Presidency for the first time, I was in Dublin for the first Summit. The city was en fete. I was staying in the Westbury, the conference hotel for all the national delegations except the British, who were accommodated in the British Embassy.

Outside the hotel stood the longest line of black limousines ever seen in Ireland. I fell into conversation with one of the drivers of same, who was lounging outside his vehicle waiting for his delegation to emerge from the hotel. I said that I hadn’t known there were so many stretch limos in Ireland. He laughed and said confidentially: “Between you and me, this would not be a good weekend to die in this country”. It transpired that the government had rented every funeral director’s car for the great weekend!

And so Ireland learned to strut the world stage. And then came the Celtic Tiger — an outbreak of madness and greed that still leaves one transfixed — during which my countrymen “lost the run of themselves”, as my old friend Frank McDonald puts it. And then the banks imploded and the Fianna Fail government decided in a panic-stricken weekend that they (or, more accurately, the hapless Irish taxpayers) would underwrite the foreign bondholders of those same banks, thereby saddling every man, woman and child in the country with a debt running into thousands of Euros. But it would all be ok, they thought, because the European Central Bank and the EU would see them right.

And so the ‘bailout’ came, administered by three technocrats from abroad who arrived in Dublin to teach the feckless Irish some neoliberal manners. But even then, the penny didn’t really drop.

What finally did it was the night in November 2011 when it was revealed that the top-secret details of the budget to be revealed the next day by the Finance Minister in the Dáil (the Irish parliament) were, in fact, already being discussed by members of the Bundestag in Berlin.

And then my countrymen finally understood why they had traded national sovereignty for that brief moment in the global sun.

The Greeks are now making the same discovery.