Innovation in an age of austerity

This lecture by Eben Moglen* of Columbia Law School is the most important thing I’ve seen in ages. It’s 90 minutes long (45 minutes talk + 45 minutes Q&A), so you need to make yourself a coffee and book some time out. But it’s worth it. And if you’ve really, really busy, then there’s a useful — but not comprehensive — set of notes by Stephen Bloch here.

Cory, who first alerted me to this, has ripped the audio so another way to access it is to put on an MP3 player and listen to it on the train or in the car.

Cory described the talk as “one of the most provocative, intelligent, outrageous and outraged pieces of technology criticism I’ve heard” and I agree. It’s also a useful antidote to the greatest evil of all — conventional wisdom.

*Footnote: For those who don’t know him, here’s a useful brief bio:

Eben Moglen has been battling to defend key digital rights for the last two decades. A lawyer by training, he helped Phil Zimmerman fight off the US government’s attack on the use of the Pretty Good Privacy encryption program in the early 1990s, in what became known as the Crypto Wars. That brought him to the attention of Richard Stallman, founder of the GNU project, and together they produced version 3 of the GNU GPL, finally released after 12 years’ work in 2006.

Today, he’s Professor of Law at Columbia Law School, Founding Director of the Software Freedom Law Center and the motive force behind the FreedomBox project to produce a distributed communication system, including social networking that is fully under the user’s control.

Stuxnet, Obama and the necessary hypocrisy of statecraft

This morning’s Observer column.

When Stuxnet was first discovered in 2010, it attracted a great deal of attention for several reasons. For one thing it was so remarkably sophisticated and complex that its creation would have required a large software team. This led many of us to suppose that it must be the work of the security services of a major industrial country: it was hard to imagine run-of-the-mill malware authors going to all that trouble when they could be harvesting stolen credit-card numbers without getting out of bed. But the most intriguing thing about Stuxnet was the way it targeted a very specific piece of equipment: the Siemens Simatic programmable logic controller. It is commonplace in industrial operations everywhere – oil refineries, chemical plants, water-treatment facilities and so on. And it is also the device that controlled the centrifuges of the Iranian nuclear programme. Stuxnet could – and did – instruct the Siemens controller to cause the centrifuges to accelerate until they disintegrated.

All this pointed toward one conclusion – that Stuxnet must have been the creation of either the US or Israel. But no one knew for sure. Now, thanks to some fine investigative reporting by David Sanger, we do. The Stuxnet project – codenamed “Olympic Games” – was actually started by the Bush administration and accelerated by Obama in his first months in office. What’s more, Sanger claims that Obama took a detailed, personal interest in the progress of the Stuxnet attack and that there were some agonised discussions in the White House when it was realised that the worm, instead of remaining inside the Natanz nuclear plant, had escaped into the wild, as it were…

The Greek ‘election’

Interesting piece by Slavoj Žižek in the LRB.

The next round of Greek elections will be held on 17 June. The European establishment warns us that these elections are crucial: not only the fate of Greece, but maybe the fate of the whole of Europe is in the balance. One outcome – the right one, they argue – would allow the painful but necessary process of recovery through austerity to continue. The alternative – if the ‘extreme leftist’ Syriza party wins – would be a vote for chaos, the end of the (European) world as we know it.

The prophets of doom are right, but not in the way they intend. Critics of our current democratic arrangements complain that elections don’t offer a true choice: what we get instead is the choice between a centre-right and a centre-left party whose programmes are almost indistinguishable. On 17 June, there will be a real choice: the establishment (New Democracy and Pasok) on one side, Syriza on the other. And, as is usually the case when a real choice is on offer, the establishment is in a panic: chaos, poverty and violence will follow, they say, if the wrong choice is made. The mere possibility of a Syriza victory is said to have sent ripples of fear through global markets. Ideological prosopopoeia has its day: markets talk as if they were persons, expressing their ‘worry’ at what will happen if the elections fail to produce a government with a mandate to persist with the EU-IMF programme of fiscal austerity and structural reform. The citizens of Greece have no time to worry about these prospects: they have enough to worry about in their everyday lives, which are becoming miserable to a degree unseen in Europe for decades.

Such predictions are self-fulfilling, causing panic and thus bringing about the very eventualities they warn against. If Syriza wins, the European establishment will hope that we learn the hard way what happens when an attempt is made to interrupt the vicious cycle of mutual complicity between Brussels’s technocracy and anti-immigrant populism. This is why Alexis Tsipras, Syriza’s leader, made clear in a recent interview that his first priority, should Syriza win, will be to counteract panic: ‘People will conquer fear. They will not succumb; they will not be blackmailed.’ Syriza have an almost impossible task. Theirs is not the voice of extreme left ‘madness’, but of reason speaking out against the madness of market ideology. In their readiness to take over, they have banished the left’s fear of taking power; they have the courage to clear up the mess created by others. They will need to exercise a formidable combination of principle and pragmatism, of democratic commitment and a readiness to act quickly and decisively where needed. If they are to have even a minimal chance of success, they will need an all-European display of solidarity: not only decent treatment on the part of every other European country, but also more creative ideas, like the promotion of solidarity tourism this summer.

[…]

Here is the paradox that sustains the ‘free vote’ in democratic societies: one is free to choose on condition that one makes the right choice. This is why, when the wrong choice is made (as it was when Ireland rejected the EU constitution), the choice is treated as a mistake, and the establishment immediately demands that the ‘democratic’ process be repeated in order that the mistake may be corrected. When George Papandreou, then Greek prime minister, proposed a referendum on the eurozone bailout deal at the end of last year, the referendum itself was rejected as a false choice.

Well, up to a point, Lord Copper. I agree with that last para, because what’s been clear for decades is that the European ‘Project’ is, at its heart, a profoundly undemocratic one in the sense that a large proportion of the citizens of European democracies don’t feel represented within the Euro machine and probably have never voted for it. An academic colleague of mine who has spent many months in EU committees discussing science and technology policy once told me that there was one infallible way of getting Eurocrats riled, and that was to ask whether a particular venture would be a defensible use of “taxpayers’ money”. My friend intuited that it was the idea that taxpayers might be in any way relevant to these questions that really irritated the Eurocrats.

Likewise, the fact that my fellow-countrymen in Ireland rejected the Lisbon Treaty in a referendum was famously regarded by Brussels as the ‘wrong’ result. The Irish was told to go back to the ballot box and vote differently (and they did). This is a bit like Brecht’s famous dictum that if the people reject the government then it is time to dissolve the people and get a better crowd.

On the other hand, it’s really difficult to work up too much sympathy for a society in which tax-evasion and a bloated public sector are as pervasive as they have been in Greece. Consider, for example, Micheal Lewis’s celebrated report on the country which contained passages such as this (about the Greek public sector):

As it turned out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past decade the wage bill of the Greek public sector has doubled, in real terms—and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.” The Greek public-school system is the site of breathtaking inefficiency: one of the lowest-ranked systems in Europe, it nonetheless employs four times as many teachers per pupil as the highest-ranked, Finland’s. Greeks who send their children to public schools simply assume that they will need to hire private tutors to make sure they actually learn something. There are three government-owned defense companies: together they have billions of euros in debts, and mounting losses. The retirement age for Greek jobs classified as “arduous” is as early as 55 for men and 50 for women. As this is also the moment when the state begins to shovel out generous pensions, more than 600 Greek professions somehow managed to get themselves classified as arduous: hairdressers, radio announcers, waiters, musicians, and on and on and on. The Greek public health-care system spends far more on supplies than the European average—and it is not uncommon, several Greeks tell me, to see nurses and doctors leaving the job with their arms filled with paper towels and diapers and whatever else they can plunder from the supply closets.

Or this, about tax evasion:

A handful of the tax collectors, however, were outraged by the systematic corruption of their business; it further emerged that two of them were willing to meet with me. The problem was that, for reasons neither wished to discuss, they couldn’t stand the sight of each other. This, I’d be told many times by other Greeks, was very Greek.

The evening after I met with the minister of finance, I had coffee with one tax collector at one hotel, then walked down the street and had a beer with another tax collector at another hotel. Both had already suffered demotions, after their attempts to blow the whistle on colleagues who had accepted big bribes to sign off on fraudulent tax returns. Both had been removed from high-status fieldwork to low-status work in the back office, where they could no longer witness tax crimes. Each was a tiny bit uncomfortable; neither wanted anyone to know he had talked to me, as they feared losing their jobs in the tax agency. And so let’s call them Tax Collector No. 1 and Tax Collector No. 2.

Tax Collector No. 1—early 60s, business suit, tightly wound but not obviously nervous—arrived with a notebook filled with ideas for fixing the Greek tax-collection agency. He just took it for granted that I knew that the only Greeks who paid their taxes were the ones who could not avoid doing so—the salaried employees of corporations, who had their taxes withheld from their paychecks. The vast economy of self-employed workers—everyone from doctors to the guys who ran the kiosks that sold the International Herald Tribune—cheated (one big reason why Greece has the highest percentage of self-employed workers of any European country). “It’s become a cultural trait,” he said. “The Greek people never learned to pay their taxes. And they never did because no one is punished. No one has ever been punished. It’s a cavalier offense—like a gentleman not opening a door for a lady.”

The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all. The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.” I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted—apart from the fact that prosecution would seem arbitrary, as everyone is doing it—is that the Greek courts take up to 15 years to resolve tax cases. “The one who does not want to pay, and who gets caught, just goes to court,” he says. Somewhere between 30 and 40 percent of the activity in the Greek economy that might be subject to the income tax goes officially unrecorded, he says, compared with an average of about 18 percent in the rest of Europe.

Žižek is right that our enslavement to a particular manifestation of neo-liberal capitalism threatens to undermine democracy. The problem for his case is that the Greeks are not a great argument for it. A better example might be Ireland, a country in which every man, woman and child is now in debt to the tune of €17,000 because of their government’s insane decision to indemnify banks for their crazed borrowing and lending. In the last General Election, my countrymen threw out the crooks (Fianna Fail) who had got the country into this mess, but elected a crew who — at least in one respect — were just “Fianna Fail Lite”, and who have insisted in sticking to the ludicrous commitment entered into by their predecessors. The result: an austerity programme on steroids, and a predictable recession.

Of course — as with the Greeks — my countrymen are not exactly blameless either. Apart from tolerating the pervasive corruption of their politicians and of the planning system, they also enthusiastically mounted the ‘Celtic Tiger’ and goaded it energetically into a gallop in the belief that the laws of economics had been suspended, that property bubbles go on forever, and so on. So I’m left with the thought that while we get the governments (or at least the politicians) that we deserve, we also got a banking system and an economic ideology that none of us voted for and even fewer of us understood.

Why Cameron daren’t cast Murdoch adrift

Lovely Observer column by Nick Cohen.

The greatest fear is among the Conservatives. Murdoch’s decision to release emails that showed how Jeremy Hunt’s adviser was facilitating News Corporation’s takeover of BskyB was a taste of what may come. Not just Hunt, but Cameron and George Osborne were complicit in promising sweetheart deals to News Corporation. Coulson, Brooks, James Murdoch and Rupert Murdoch know it. What is more, the Tory leadership suspects they can prove it.

We are in the absurd position where the Conservatives dare not stop fawning over Murdoch now for fear that he will reveal how they fawned over him in the past.

Cameron could end the absurdity in a day. He might ally with Labour and the Liberal Democrats and take the best opportunity in years to establish the new system for regulating media monopolies Britain will need as Google and the other net giants grow. That he lacks the bravery to seize the moment tells you all you need to know about the littleness of the man.

Gadaffi’s ghost returns to haunt Sarko

From Philippe Marlière’s wonderful rolling diary of the 2012 French presidential election.

After Marshall Pétain’s cameo earlier this week, Muammar Gaddafi’s ghost has invited himself to the campaign. Mediapart, a respected news website, has revealed today that Gaddafi’s regime had agreed to fund Nicolas Sarkozy’s 2007 campaign to the tune of 50 million euros. Mediapart produced a 2006 document in Arabic which was signed by Gaddafi’s foreign intelligence chief. The letter referred to an “agreement in principle” to support Sarkozy’s campaign. All major media have mentioned the story. Will they hold the president to account? I wouldn’t hold my breath. Most French journalists are tame and deferential to powerful politicians. The most servile of them, smelling blood, have started to be a bit more combative of late. But this is too little and too late.

The problem for the Posh Boys: they’re not actually much good at running the country

My Observer colleague Andrew Rawnsley has a very perceptive column about Cameron and Osborne in the paper this morning.

Once asked, while in opposition, why he wanted to become prime minister, David Cameron replied: “Because I think I would be quite good at it”, one of the most self-revealing remarks he has ever made. Shortly after he moved into Number 10, someone inquired whether anything about the job had come as a surprise to him. Not really, he insouciantly replied: “It is much as I expected.” In his early period in office, that self-confidence served him rather well. He certainly looked quite good at being prime minister. He seemed to fit the part and fill the role. Broadly speaking, he performed like a man who knew what he was doing. That is one reason why his personal ratings were strikingly positive for a man presiding over grinding austerity and an unprecedented programme of cuts.

So you can get away with being “arrogant” as long as the voters think you have something to be arrogant about. You can also get away with being “posh” in politics. To most of the public, anyone who wears a good suit and swanks about in government limousines looks “posh” whether their schooldays were spent at Eton or Bash Street Comprehensive. There may even be some voters who think – or at least once thought – that an expensive education has its advantages as a preparation for running the country. Though David Cameron and George Osborne have always been sensitive on the subject, poshness wasn’t a really serious problem for them so long as they could persuade the public that they were in politics to serve the interests of the whole country, not just of their own class.

Rawnsley’s right: one of the things that has become obvious in the last few months is how amateurish these lads are. Their self-esteem is inversely proportional to their ability — a classic problem for toffs.

Maybe this is really beginning to dawn on the electorate. Currently Labour has a huge lead over the Tories in the polls. And that’s despite having Miliband like a millstone round the party’s neck.

Snooping and state power

This morning’s Observer column:

The basic scenario hasn’t changed. Because of technological changes, we are told, criminals and terrorists are using internet technologies on an increasing scale. Some of these technologies (eg Skype) make it difficult for the authorities to monitor these evil communications. So we need sweeping new powers to enable the government to defend us against these baddies. These powers are as yet unspecified but will probably include “deep packet inspection” as a minimum. And, yes, these new measures will be costly and intrusive, but there will be “safeguards”.

The fierce public reaction to these proposals seems to have taken the government by surprise, which suggests ministers have been asleep at the wheel. My hunch is that the proposals were an attempt by the security services to slip one over politicians by selling them to senior officials in the Home Office, who, like their counterparts across the civil service, know sweet FA about technology and are liable to believe 10 implausible assertions before breakfast. In that sense, the Home Office has been “captured” by GCHQ and MI5 much as the health department has been captured by consultancy companies flogging ludicrous ICT projects….

May 31: the make-or-break date for the Eurozone

The first national referendum on the proposed European Fiscal Treaty takes place in Ireland on May 31. My hunch is that it will be rejected. Elain Byrne had an interesting article in the Guardian about the background.

Ireland has rejected two of the four European referendums put to voters over the course of the last decade. The Fine Gael-Labour coalition, now a year in office, has already lost a referendum – the public rejected a political reform poll last October. A hint of government complacency and a public overwhelmed by personal debt, rising unemployment and budget cuts could scupper the yes vote’s chances.

The Irish Central Bank published a study on Thursday which showed that Irish households have suffered the most severe wealth destruction in Europe. Dan O’Brien in the Irish Times reported on Friday that the net worth of Irish households has fallen by 35% since 2007, the 17th consecutive quarter of decline. And yet Ireland does not do protest. Greek-style demonstrations do not suit an Irish mindset weary of decades of Northern Ireland violence. We are essentially a very conservative people. Nonetheless, there is a steady upswell of dissent building among the middle classes.

It is articulated through something very close to the Irish psychic–land. As part of the European Central Bank, European Commission and IMF programme, the government is obliged to introduce a household charge. This is an attempt to broaden the tax base as one means of addressing the yawning €18bn gap between income and expenditure. Ireland is virtually unique among its European neighbours in not having any property-based charges.

The deadline for the €100 charge was last Friday. To date just 886,000 householders had voluntarily registered of the 1,570,814 properties affected…

People in Ireland are very pissed off. They’ve had their love affair with Europe, and it’s over, just like their love affair with Fianna Fail and the political establishment it spawned is over.

Later: When asked in a Guardian interview whether the Euro was a disaster, Stephanie Flanders, the BBC’s Economics Editor replied:

“It’s more than a disaster, I think it’s a tragedy. It was quite an ambitious project, which had pros and cons, but it was basically mis-sold to everybody. So the Germans were sold it as a way of spreading a German approach to economics, and German stability, across the eurozone; but they were told that it would come without any obligations on them, there would be no bailouts. At the same time, the others were told this was a quick ticket to German stability, and they would get low interest rates and low inflation, and they weren’t told: there’s one catch – you have to be as competitive as Germany for ever. And if you do have any problems, all the usual tools you’d use to get out of them won’t be available to you. For many of these countries, the implication is years more austerity, which has a big sign on it saying, ‘Brought to you by the euro.'”

Spot on.

Republican philosophy: the Romney version

Lovely, succinct summary by Dave Winer:

I have a lot of money. I got it the right way. I inherited a lot of it, and then I made a lot more. Every year I make a hundred million or more. Money is a big deal for me.

And in that way I represent Republicans everywhere.

Now I know what you all want. You want my money. Hey if I were you I’d want my money too. Here’s what I have to say to that: Fuck You. I have my money and it’s mine and you can’t have it and that’s that.

In summary. 1. My money is mine. 2. Fuck you.

Those are the two basic tenets of the Republican philosophy.