Sunday, 4 December 2016

Tracy Emin and William Blake - from unmade minds to unmade beds

Liverpool Tate are currently running one of those 'compare and contrast' exhibitions that have a slightly didactic thrust. They managed to obtain Tracy Emin's piece My Bed and have surrounded it with sketches and paintings by William Blake from their archives. The connection is supposed to have something to do with the presence or absence of the artist but, the best one can say is that this connection is mainly present through its absence.

At best provocative. Tracey Emin's My Bed -
Foto: Tate Liverpool

Putting the works of two artists together in an exhibition is always a risky thing to do and I am not sure Emin's work will ultimately benefit from this recent attempt to draw parallels where there are few or none. What the exhibition demonstrates most of all is the enormous explosive imagination of Blake and his breathtaking artistic inventiveness that allowed him to borrow (and shape) mysticism and philosophy even centuries later. In contrast, Emin's Bed looks at best 'provocative' rather than a piece of groundbreaking or revolutionary art.

Michelangelo Pistoletto: Venues of the Rags
Foto: AK
But then again, the curator's choice of Emin and Blake in one exhibition may have been slightly unfair to Emin given that hardly any artist could hold their own in comparison to Blake's restless mind and his artistic output. The comparison between Emin and Blake also falls down on a different matter and that is the supposed link between a piece of (largely) conceptual art and sketches/paintings. As far as conceptual art is concerned, Emin is herself not the most entertaining or the one with sufficient depth. Interestingly, as a brief walk about on the other floors of the Tate Liverpool reveals, other pieces show more affinity to Blake's philosophical musings than Emin's. Even a funny piece like Michelangelo Pistoletto's Venues of the Rags has more entertaining value than Emin's work. And Rebecca Horn's Scratching Both Walls at Once evokes feelings of haunting and dread.

Reaching out. Rebecca Horn's Scratching both Walls at Once
Foto: AK

The comparison finally grinds to a screeching halt in a second room where Emin's prints are juxtaposed to some of Blake's. The comparison is not a kind one to Emin and cruelly demonstrate the lack of depth and artistic vacuity of her print work. The exhibition should act as a warning to potential curators: do not match up what is best kept separate.

Speenhamland and Free Trade

As the debate about free trade versus protectionism rages on, it may be useful to cast an eye back to another period in history when protectionism was en vogue.

Karl Polanyi wrote about it eloquently in his The Great Transformation. The essential tension that made protectionism ultimately unworkable, he wrote in 1945, was that capitalism requires three conditions to be met to function properly: labour should find its price on the market (unhindered individual or collective negotiation of wages); capital and good can be exchanged unhindered (free trade without tariff and custom barriers); and the creation of money should be subject to an automated mechanism (an exchange rate established on the currency market or, previously, a fixed rate such as the gold standard).

To implement but one, free trade, without the other (to tether one currency to another without means of adjusting, or to deny labour to find its price in free and fair negotiations) is to set capitalism up to fail. Polanyi illustrates his argument with a detailed analysis of the Speenhamland practice, something that figures little in history books but was discussed and debated vigorously in 19th century economics. Speenhamland was essentially a system of wage subsidy, where wages would be supplemented by a form of outdoor relief by local taxpayers. In essence, Polanyi writes, it achieved two counter-productive things. First, it undermined the ability of people to negotiate their wages (individually or collectively) to accomplish a fair price for their labour. But, second, it also tied their labour to a specific place, making it impossible to move. The Speenhamland system thus created capitalism without a free and unhindered labour market.

Polanyi's example is instructive for the current debate on protectionism and free movement of people. Allowing goods, capital and services to move freely but denying the same right to people will achieve only one thing, to undermine capitalism to function properly. A fair market economy can only work smoothly if all three mechanisms of exchange (labour, goods and money) can move freely. Restrict one and you will cripple the others.

Protectionism vs. Free Market

The election of Donald Trump has thrown up serious questions about the commitment of the future US government to free market policies. Trump has repeatedly voiced his concerns about free trade agreements such as NAFTA and has indicated that negotiating other free trade agreements is out of the question. This does not bode well for the Brexiteers who find themselves in the awkward position to have advocated leaving the largest free trade zone (the EU) with the hope of engineering new ones with Britain as the driving centre. Given the preference of current populist leaders for protectionism, Britain could easily find herself in a free trade zone of one.

With public opinion increasingly favouring protectionist policies in the US and elsewhere, it may be worth reminding us of the rationale for free trade. The prime example of tariff and customs union remains the European Union which has underpinned the free trade agreement with a contractual framework ensuring that all participating countries implement the same standards of products and environmental protection. The idea was that free trade can only work for the benefit of all if everybody has to adhere to the same level playing field, hence free trade has to be supported by the same trading and production standards. How the Brexiteers will pull off a similarly comprehensive agreement with China, Australia or the Asian Sub-continent within the next couple of years is difficult to see. Although they have been critical of the pace of negotiation by the EU with Canada on the (finally agreed) CETA free trade agreement (it took the parties 7 years in total), the reason is less a unwieldy Bruxelles bureaucracy then to buttress the sustainability of any free trade deal with a comprehensive deal of similar standards on customer and environmental protection. Free trade is not worth the name if it only extends to exchange of goods. Those goods also need to comply with the same standards to ensure producers are on the same level playing field. Otherwise competition between free trade partners won't be fair.

The second issue relating to free trade concerns the movement of people. Brexiteers have been highly critical of the fact that free movement of goods and capital is linked in EU law to the free movement of people. They paint free movement of people as an anachronism in times of high geographical mobility. Where the world is on the move, countries need to regain control of their borders to steer migration.

The four freedoms of movement (capital, goods, services and people) are however linked within EU law for a specific reason, one that features less in the Brexiteers argument. It is one of equity between employers and employees, between capital and labour. To grant capital the right to move wherever it wants within a free market zone yet deny people the same right establishes serious imbalances between the two forces that shape our economic life. It is a question of equity to ensure that people have the same rights as capital.

The sum total of the Brexiteers case thus amounts to a muddled bag of inconsistencies. They would like to leave the largest free trade area to establish their own. They criticise the slowness of the EU's negotiating practice but fail to acknowledge the complexity of free trade agreements based on similar agreed product and protection standards which contribute to the protracted nature of these negotiation. They want more competition but trade agreements without similar standards will decrease the chances of fair competition between future trading partners. In addition, they want free movement of goods, services and capital (City of London) but deny the same right to people, therefore enshrining an imbalance in opportunities and freedoms between capital and labour. They want to boost free trade on a world wide stage at a time when the electorate in their ideologically closest ally (US) has given the strongest signal yet that protectionism is the word of the day. Britain may find itself in a world of its own, in a trade zone of one very soon if the Brexiteers' wish comes true.

Thursday, 10 November 2016

The pace of change ...

As everyone is scratching their heads wondering how we got here (The UK, a large economic power, leaving a single market and the US, the main superpower, having a president who would like to erect walls and impose tariffs) it may be useful to remember the following words.

'Nowhere has liberal philosophy failed so conspicuously as in its understanding of the problem of change. [Its] common sense attitude toward change was discarded in favor of a mystical readiness to accept the social consequences of economic improvement, whatever they might be. ... It should need no elaboration that a process of undirected change, the pace of which is deemed too fast, should be slowed down ... so as to safeguard the welfare of the community.'

'The rate of progress have turned the process itself into a degenerative instead of a constructive event. For upon this rate, mainly, depended whether the dispossessed could adjust themselves to changed conditions without fatally damaging their substance, human and economic, physical and moral.' (The Great Transformation, p.37ff)

Karl Polanyi wrote this in 1944. His words remind us of the destructive character of change if we do not mitigate its worst consequences on communities through governmental intervention. Whilst he wrote this about change that came in the wake of enclosures in England, it equally applies to today's transformation by immigration, globalised markets and rapid technological progress. The liberal case for unfettered change depends in large measure on tarnishing everyone who struggles with the speed of change as a reactionary, or worse a racist and xenophob. Karl Polanyi was none of that. But he did recognise that communities cannot survive unless the moral, social and economic fabric is altered gradually rather than being torn apart in the name of economic progress that only benefits a small professional elite.

Monday, 7 November 2016

The agonising choice

If sanity prevails and the pollsters are right then Americans will elect the first woman president tomorrow. By voting for Hilary Clinton, the majority of voters will reject misogyny, overt racism and dog-wistle politics, and instead give a mandate to the most competent and experienced politician who ever stood for office. And yet, they will also have elected a politician with one of the most obnoxious personalities and probably one of the most corrupt one of modern times. I do not envy American voters having to chose between Scylla and Charybdis. With Trump they would elect somebody who makes you worry about the welfare of people. With Clinton they would elect somebody who makes you worry about the welfare of American politics.

Clinton's problem - a lack of honesty
Copyright Washington Post
Despite Trump's best efforts to give the election away to the Democratic candidate, the polls still indicate that the final tally in the electoral college may be close. That is quite an achievement on the side of Hillary Clinton and her team who have been up against one of the least accomplished Republican candidates, someone who failed to get the support of his own party and managed to alienate more than half of the general population with derogatory comments about women and ethnic minorities. In short, pretty much any candidate would have had decent chances against Trump and it speaks of the widely held mistrust against her, that Clinton will probably just about scrape into the highest office.

So, what went wrong in an election that was her's to lose all along? There appear to be reasons that have to do with the nature and history of the candidate as well as some reasons that relate to Clinton's policies. Let's look at the latter first.

The American society and economy never quite recovered from the shock of the 2008 crisis. Whilst the Obama administration showered some industries with subsidies and bail outs, it could not arrest the long term decline of manufacturing that had started in the 1990s. Whatever you think about the forces of globalisation (cheaper consumer prices in the shops; mobility of labour and capital), it left an entire stratum at the bottom of society bereft in a sea of hopelessness. Those who benefited from globalisation were largely the intellectual and professional elites in urban places. Neither Clinton nor the Democratic Party in general ever found a formula to address the concerns of those left behind.

That should not surprise us. Liberals (the American left) are most comfortable with the language of universal rights, unfettered by notions of place and belonging. It is this universalist perspective that prevents them to grasp the anger amongst many Americans with illegal immigration which, incidentally, provide the large Latin American workforce cleaning the houses and mowing the lawns of the country's elite.

It is this vacuum that Trump managed to fill and which, whatever the electoral outcome, politicians on both sides need to find answers to if they want to prevent a repetition in four years time of the dog-whistle politics so successfully championed by the billionaire.

The second aspect of Clinton's candidacy and the deep reservations it evokes amongst Americans is personal in nature. Clinton comes with baggage, not least a philandering husband, and the thought of Bill Clinton roaming the White House to sexually target young female interns fills most ordinary people with horror. Yet, the personality problem extends beyond her husband and goes to the very core of her own character. Hilary Clinton must appear to most Americans as one of the most dishonest politicians of modern times. Lying her way through the Benghazi Committee hearings must surely be the pinnacle of a political career that was marked by deviousness, double-dealing and betrayal. Despite having deleted thousands of official emails, and thereby violated any rule in the book for government officials, her sense of entitlement to the presidency is palpable and must be grating for everyone who thinks that politicians are in office by virtue of the democratic will of the people. Her lies and distortion would be the stuff of comedy (see Saturday Night Live) if they would not have been so serious and contributed so much to the disenchantment of Americans with politics in general.

In the end, it must be the most agonising choice Americans ever faced: to chose between a Republican who is unfit for the office of President and a woman who is a disgrace to her fellow Democrats. One hopes that a majority prefers the corrupt liar over the misogynist.

Monday, 26 September 2016

Where did it all go wrong? The Labour Party after the second coming of the Messiah

As Labour MPs pick up the pieces after their battle with the left wing extremists led by their leader and his enforcer John McDonnell, it may be time to take stock and assess where to go from here.

The (second) election of Jeremy Corbyn (to his supporters, the second coming of the Messiah) demonstrates a deep shift in party politics. The question is whether this transformation of the Labour Party heralds a fundamental change in the attitudes of the wider electorate as well, signaling the long expected ‘move to the left’ once announced by Corbyn’s predecessor Ed Milliband.

There can be no doubt that societies in the developed world have undergone a significant alteration of the political radar since the economic crisis in 2008. What used to be an attitude to wealth and income inequality best described by Tony Blair as ‘relaxed’ made way to a vibrant debate on social justice. At the forefront of this debate is the issue of wage stagnation since the 1990s in the US and  as Thomas Piketty argued, the growing income inequality fuelled by rising income from assets.

Where the picture veers into the strange is when we look at the responses to the crisis by the individual parties. Centre right parties moved gradually to the centre and tried to develop policies to counter wage stagnation, broadly trusting in the power of the economy to lift everybody’s boat at some time.

The left of centre parties, many of which were in fact in power when the crisis hit, showed a staggering lack of ideas. Gordon Brown’s inaction at the moment of economic disaster was symptomatic. Tired of Brown’s dithering, his chancellor, Alistair Darling, had to take the reigns and protect the banking sector by bailing out some of the largest lenders. The next two years were largely wasted with inactivity by the Labour government. Not a single policy was launched by the Brown government to counter the growing wage gap. It was as if Labour politicians who had started their tenure in 1997 with so much gusto were frozen like rabbits caught in the headlights before the car bumps them off the road.

Following the 2010 election, the Conservatives continued to move into the centre with modest welfare reforms under George Osborne, the introduction of the national living wage and fiscal consolidation. The next five years are generally acknowledged to have been a wasted opportunity for the Labour Party. Under Ed Milliband’s leadership an endless number of policy reviews was conducted with very little outcome or impact. As the next election was nearing, Labour struggled to put a manifesto of pledges together that amounted to a coherent programme for government. Instead it opted for an oversized tombstone inscribed with several vacuous statements that prompted ridicule and laughter in the wider public.

Thus, in a sense, Jeremy Corbyn’s election to leader was actually the first proper response of the Labour Party to the economic crisis and its related problems such as wage stagnation and income inequality. And this is where the story assumes surreal proportions. Instead of embarking on a profound reassessment of Labour policies and a wider debate on how to tackle social injustice under conditions of low productivity, how to address the disappearance of low skilled jobs and the rise of the professional classes under conditions of a fiscal straightjacket that is likely to continue for the next decade, Labour members opted for a type of unrestrained sloganism, a simplistic populist left wing version of Donald Trump. The most notorious aspect of this move to populism is the striking absence of any hard thinking about policies, the slavish adherence to abstract slogans, and a determination not to let reality impinge on the simplistic worldview those slogans purport.

An important side effect of this return to the 1970s is that Corbyn’s ideas show little traction with the working class voters he pretends to represent. As so often before, the proletariat appears to refuse to play along with the Marxist leaders. Corbyn acolytes appear to be mainly young middle class voters who should have little investment in a Marxist worldview that assigns to them a diminishing political role as the proletariat ‘gains class consciousness’. But then, as so often, paradoxes abound in English Socialism, once led by an aristocrat, Tony Benn, who virulently campaigned against the very educational standards he benefited from.

Where does that leave the political landscape in England? Labour’s move to the extreme left may just open up some electoral space for moderate social democrats and liberals. LibDem’s leader Tim Farron seems to sense that when he appealed to disenchanted moderate Labour voters to join the Liberal Democrats. It is customary in the British media to write off the LibDems but the party still has a significant number of councillors and some parliamentary representation (at Westminster and in Cardiff), more than other fringe parties such as the Greens and UKIP. Councillors are usually the knights in shining armour when it comes to trudging through the English rain to deliver leaflets to potential voters or placing calls to the ‘pledged voters’ to go to the polling booths. So, the LibDems are electorally in a better position than the Greens and UKIP.

The biggest threat to Conservative rule is however amy come from inside the Tories themselves, through a prime minister who ditches the moderate compassionate Conservatism that served David Cameron so well in the last 6 years. Part of the reason why Labour shifted to the extreme left was that the Conservatives firmly occupied the centre ground with progressive policies once popular under Labour, such as national minimum wage, welfare reform and the academy programme. The biggest mistake Theresa May could do is to vacate this centre ground and encourage moderate Labour politicians to formulate their own policies. Let’s hope she is a closet Cameroonian.

Monday, 29 August 2016

The moral tyranny of the free market

As the Labour Party battles out who will lead them into the next election defeat, it becomes clear that the dominant theme in the party is now one of 'nationalisation' of industries and services. Both candidates advocate taking the railways into national ownership, a call more easily made than done, as the recent Observer editorial argued.

Those were the times - Nationalisation in 1947

In a space best characterised as an echo-chamber, the rank and file of the Labour Party are competing for the most extremist positions, underpinned by what Hannah Arendt once called the 'emancipation from reality'.

However, the more interesting question is why leftists have such a visceral hatred for the market in the first place. Marx himself was by no means disinclined to let market forces do their work in the inevitable demise of the capitalist order. And Lenin himself used the free market in the brief New Economic Policy period to improve people's material lives following the deprivations of the Russian Civil War. So, why do socialists a la Corbyn have such as dislike for free markets?

Much of this appears to do less with where Corbyn and others want to take the country than with where they have been. Corbyn seems to cherish the old nationalised railways exactly because the image of British Railway branded carriages criss-crossing the country offers the certainties of old times. His and his supporters' desire to nationalise industries are motivated more by the past than any exciting vision of the country's future.

A second reason may however be a fundamental misunderstanding of the moral nature of the free market. When asked about the role of private providers in the NHS Corbyn reliably talks about profit in healthcare (conveniently denying the fact the GPs are running business as well which need to make a profit too). Corbyn does not seem to understand that profit is not the only, and often not the main motivator for people to set up businesses. The main reason why people become self-employed is because it gives them the opportunity to shape their own destiny and be in control of their lives.

Running a business is thus a fundamental manifestation of personal freedom. As people establish businesses they exercise a right which is tied up with personal responsibilities, such as making and keeping mutual promises and entering contracts. Running a business thus has a moral side as people operate in a contractual sphere which imposes civic obligations on them which in turn allows them to disclose their moral commitment to civil society. The recent focus on those who have tried to escape their contractual commitments (Philip Green e tutti quanti) only reinforces this point as they are the exception to the norm.

It is this moral aspect of economic activity that Corbyn and his left wing comrades refuse to acknowledge when they argue in favour of nationalising industries. Where such a policy would lead is clear for everyone with only a cursory knowledge of the sophisticated discussions amongst Marxists and Revisionists since the 1880s. Or, alternatively, if once prefers the Soviet Russian debate, one may look it up in Trotzky's critique of Stalinism. Nationalising an industry only achieves one thing. It puts the 'means of production' into the hands of a bureaucratic elite whilst removing the notion of personal responsibility for success and failure of economic activity from everyone. Where everyone owns everything, no one feels responsible, and the result is usually a steady but inevitable decline. Anyone remember British Leyland?

Sydney Opera House - Expressionism at its best

Sydney Opera House from the Ferry
Foto: Axel Kaehne

Modernist architecture can be as much a revelation as it is sometimes a disappointment. Most modernist building tend to be something of the latter because they fail to relate meaningfully to their surroundings. Norman Foster's IB tower in Malaysia is little more than exactly that, a very tall building without much thought about its environmental context. Zaha Hadid built impressive buildings but they never managed to link in, or indeed cared much about their neighbourhoods. And then there is the external versus the internal. Hans Scharoun's Philharmic Hall, Concert Hall and Library in Berlin are all of a kind externally, but the real wonders start once you enter the buildings.

Hans Scharoun's Philharmonic Hall - Foto: Manfred Brueckels

Perhaps this lack of connectivity to the physical context is the nature of the beast, something that modernist architecture is preternaturally disposed to. This may particularly be the case with expressionism. Expressionism has mainly remained a dream confined to the drawing boards of architectural firms, presumably because the issue of fitting expressionist buildings into their environment is tricky. Where expressionism has made it into reality, the buildings tend to be in areas that have no residential or urban context in the first place, such as Berlin's Congress Hall.

Berlin Kongresshalle - Foto: Bertholt Werner

Sydney's opera house is an exception. It was built adjacent to the central business district, an area that glorifies in mainly non-descript and forgettable glass and steel buildings. However, the Sydney Opera House is at the same time slightly removed from the district by virtue of being located on the tip of a promontary. This affords it a distance to the city that was put to some extraordinary use by the architect. The individual 'shells' of the House open up towards the city which gives those standing inside the house or those sitting on its front steps a breathtaking view of the Sydney skyline.

The view from Sydney Opera House towards the Central Business District
Foto: Axel Kaehne
In the night, people leaving a performance at the opera or concert hall get the impression that the venue somehow floats on the water, like something moored in Sydney Harbour. The sense is of something holistic that works well with its surroundings to impress. Hence a rare example of expressionist architecture done well.

Monday, 22 August 2016

The gender pay gap - new evidence

This morning a new report by the Institute for Fiscal Studies on the gender pay gap is being released. It comes along some new evidence about the structural reasons for the pay gap.

The new evidence and reports make fascinating reading, not least because they attempt to identify the point at which the pay of female workers diverges from that of male workers in companies. This point appears to occur at the time of child birth when women traditionally take up child care and either drop out of employment temporarily, or work part time. Once the children reach the age of 20, women who go back to full time employment the wages of women never reach the wage levels of their male counterparts.

If this points to the need for structural changes such as providing better child care for families and/or more flexible parental leave, this is certainly not the whole story. Interestingly, even before women take up maternity leave, the wage gap to their male colleagues is already 10 percent.

Once women are working part time, their chances of progression are also significantly reduced which points to a dilemma. We know that part time workers are actually more productive compared to their full time workers, but that does not seem to translate into better pay or equal opportunities to be considered for promotion.

If this all sounds gloomy and hard to tackle, however, it is worthwhile remembering that there is some good news too. The gender pay gap itself has reduced from about 28 percent in 1993 to 18 percent to date. Much of that is due to the increasing number of women in high paying jobs. So, whilst women's pay now increases faster than men's pay in general, the gap still exists. In addition, women in low pay jobs with no promotion opportunities do not experience any pay differential to their male colleagues in similar positions, which again illustrates the critical role of promotion and progression in generating the pay gap in the first place for higher paid workers.

It seems to me that to make progress on this issue, several things need to happen. First, the government should continue to provide additional flexibility for parental leave. The cultural shift in providing child care jointly by both parents still has not materialised, but incentivising both parents to contribute to this appears essential.

Second, the legislation to compel companies to provide transparency about salary structures amongst their work force is welcome as well. It will produce additional evidence and allow boards to take a hard look at how they perform on the issue of pay.

Last but not least, progression and promotion needs to be de-coupled from the amount of time you work, and linked to productivity, which would ensure that part time workers gain opportunities to progress as well.

Legislation is unlikely to make inroads into this problem, what is required is more a cultural shift at the work place.

Sunday, 31 July 2016

The other Brexit narrative

As the new British Prime Minister intones that Brexit means Brexit, quite a few people still scratch their heads and ask themselves what it actually all means. The biggest headache for the British is now to determine where this magical nirvana outside the European Union is actually located and, once they have found it, to figure out how to get there.

Recriminations abound how we all got here and there are theories a plenty on the social media sphere, so here is, for good measure, mine, why Britain made for the exit.

On the face of it, Brexit was all about leaving Europe. However, in the midst of the campaign Nigel Farage mentioned that he would be very happy indeed to give up economic growth for better quality of life. His comment went largely unnoticed, but it shouldn't have. It was a remarkable admission by a, for good or ill, national politician for two reasons.

One the face of it, his admission to be willing to see less economic growth for better quality of life in Britain would be suicidal for any mainstream politician. Economic growth is the engine of progress. It pays for hospitals, schools and public services. To understand how dominant this narrative actually is look no further than David Cameron's promise to develop a 'well being and happiness strategy' of his government to replace the common indicators of national wealth which went ... exactly nowhere. Once in office, it's the treasury figures that drive everything. They determine whether departments have a bit less or more to spend, whether another school can be built or another foundation stone for a hospital can be laid.

So, why was Farage's comment not ridiculed? One may argue that he stands outside the mainstream debate anyway. But that is just lazy thinking. More likely, the mainstream was missing something out here that Farage had spotted and I believe it is the confluence of two issues. The first is the ineffectiveness of growth to translate into increases in real income for the working classes up and down the country. Britain was, up to the Brexit vote, strictly speaking, booming. Economically it was one of the most successful countries in the OECD. Yet, none of that growth meant any better life for the people in Yorkshire, Manchester or Birmingham who were on rock bottom agency pay. If the link between growth and wages had been severed however, there was little reason to pursue growth for the sake of it.

The periphery of economic growth
The second issue was linked to globalisation. The growth argument is tightly interwoven with the globalisation narrative. In an increasingly connected world, we will become ever more mobile with our portable skills moving from one employer to another when it suits us. We, the workers, in this picture, are just as rootless and transferable as the companies are. But the fact of the matter is that this only applies to a tiny minority of young professionals (mostly male) before there establish families. People do not move around like things, they cannot be put on a shipping container and send off to far away shores if things go belly up in one place. It's this discrepancy between the mobility of capital (and companies) and people's rootedness in places that creates the friction in the globalisation gearbox and Farage put his finger on it long before anybody else did.

Where the growth narrative and the globalisation narrative meets it creates some incredible wealth, with a singular dynamic (metropolitan) elite of professionals benefiting from it. Where they jar, they create some real misery like the forgotten towns and cities on the periphery. Farage's comment, as always, was prescient, rather than backward looking, as his detractors have it. He spotted the losers in the globalisation race, for whom growth does not mean better living standards. Once the link was broken, the Kaiser was naked. Why pursue growth for the sake of it?

And this is the location where some counter-narratives are meeting and producing some very odd alliances indeed. One is, rooted in the anti-growth debate of the 1970s, articulated by the left-leaning anti-globalisation campaigners who warn against the economic and ecological consequences of ever more growth. The second is that which refuses to accept the inevitability (or indeed desirability) of progress. Both counter-narratives together, go to the very heart of the capitalist system and it is ironic (London) and tragic (Stoke-on-Trent) at the same time that Britain is the battle ground on which this argument is to be had.

Thursday, 21 July 2016

Trump's 'facts and lies'

As the Republican Convention in Cleveland is getting under way, there is a lot of soul searching in the US. Some of the big beasts in the Republican Party have decided to stay away, and even some of those who attend the Convention have decided to give only half hearted support to the man who got more votes in the primaries than any candidate in the history of the Republican Party.

America and the Republican Party appear to be deeply divided about the virtue and credentials of the man who calls others 'liars', 'rapists' and 'criminals'. On one side, there are those who think Trump speaks truth to power (or 'the establishment') whilst on the other side, there are those who believe that he has irreparably damaged American democracy. So who is right? What's the problem if Trump uses harsh language, or is a loudmouth? Isn't that just part and parcel of the rough and tumble of free speech? Here is why I believe that Trump is bad for democracy.

The public debate in the US has always been throughout history a fairly robust affair. One reason is the first amendment which guarantees free speech. The right to say what you think has often been understood as a justification to say anything you want. So why should politicians not exploit the space free speech provides to the fullest extent?

There are two ways to say that you disagree with somebody. You can either say that you believe that the other person got their facts wrong, and thus appeal to an independent measure of truth, objectively (or more correctly: inter-subjectively) established. Or you can say that you think that the other person is lying. The latter is not a statement about the truth or falsehood of what somebody says. It is a statement about the motivation that person allegedly has when they say what they say. Motivations are however not subject to independent verification. Statements about what motivated somebody to say something can not be validated by an appeal to some objective (or inter-subjective) measure.

Donald Trump - in conversational mood.

That makes statements about other people's motives statements of belief, rather than statements of facts. And questioning the moral commitment of your opponent strikes at the heart of their legitimacy to contribute to the public debate. Suspecting somebody to be morally corrupt disputes their right to be heard. It resembles the claim that somebody is 'un-American' which tore apart the democratic fabric of the US in the 1950s. And remember, questioning the motivation of somebody is not something that can be verified or refuted by a fact. It pits one statement of belief against another.

Thus, saying that somebody is lying, i.e. willingly, out of moral degeneracy, puts the debate beyond public verification and therefore beyond forms of public reason. No fact checking will ever formally establish whether Hilary Clinton is a wicked person or not. Nor can any fact checking ever establish whether or not she was animated by evil motives when she was not as forthcoming about her use of the private email server as she should be. Contrast this with the argument that Clinton may or may not have known that the use of her private email server was improper. That is something that an investigation may establish as a fact, if evidence exists.

The difference between the two types of arguments above is that the latter is one that can be decided within the realm of facts, and is therefore located within politics, whereas the former is firmly anchored in questions about morality, something that is impervious to political argument.

Trump has made it clear that he wants to engage in shadow boxing in the realm of moral rectitude, clearly in the knowledge that questions about politicians' motives cannot be decided either way. He hopes that if he only repeats claims about the alleged lack of moral rectitude of his opponents often enough, something will stick. His strategy is to drag political debate where it cannot be fact checked. But a democracy that leaves behind its measures of what constitutes truth and reality is lost at the sea of moral claims. It's is where meaningful debate ceases and public reason as an arbiter in political discussion dies.

Sunday, 17 July 2016

Why more taxes on the rich may be a dead end

The debate about inequality has reignited the discussion on taxes. The picture emerging from any analysis of tax revenues is a stark one indeed. Essentially there are two disparities that stand out. The first is the widening gap between the taxes paid by small and medium sized enterprises and those paid by multi-national companies. Figures for the US illustrate this point well. The effective tax rate multinational companies in the US paid on their profits has been 24 percent in 2015 (The Economist, 9th July 2016), yet the official tax rate stands at 39 percent. This means that small enterprises which do not have the advantages of being able to move their profits into low tax havens or to use tax loopholes to shield their profits from tax are effectively paying a higher rate on their profits than the largest top 50 firms.

The second area which contributes to a sense of injustice in tax matters is personal income tax. This debate has been galvanised by the revelations about the superrich hiding their assets in tax havens through tax avoidance or tax evasion, depriving governments of legitimate tax income. So far, the UK government has tried to tackle the disparities in the tax system by taking people at the bottom of the income scale out of tax altogether, raising the income tax allowance.

Whilst reducing the tax burden of the poorest is welcome there are signs that the increasing income and wealth gap creates some limits on what can be achieved through tax policy on its own. The danger is that lowering the reliance of the government's income tax base on tax payers at the bottom of the scale whilst increasing its reliance on top tax payers creates unacceptable volatility in tax revenues in the long term. Take the example of California. On paper, income tax policy in the sunshine state is one of the most radical in the West. The rate of income tax stands at 13.5 percent (on top of federal levy of 39.6 percent). That makes income tax levels in California one of the highest in the Western world, something to be celebrated in the books of campaigners for equality.

However, it also means that about 45 percent of all income tax revenues are now coming from a very small number of superrich people who happen to have their tax base in California. The top 1 percent of tax payers pay almost half of all income tax in the state. Since other taxes are subject to strict regulation and cannot be changed easily, California's lawmakers have little room for manoeuvre when things go belly up. If only a few of the top 1 percent of tax payers decide to leave the state, this creates a considerable gap in the government's coffers rippling through to education and welfare policies with a vengeance.

High dependence levels on very few tax payers, whilst welcome in terms of creating more equitable levels of income, thus looks like a poor mechanism to create stable and effective government revenue streams, which in turn are essential for public services and infrastructure investment. Narrowing the tax base may therefore increase volatility at the expense of tax revenue certainty which is so important for long term strategies to tackle inequality. It seems the debate on how to best address inequality needs a few more ideas.

Tuesday, 5 July 2016

The problem with experts

The referendum on Britain's membership of the European Union is sometimes perceived as a revolt against experts and the political elite. In an interview, one of the lead campaigners for Brexit, Michael Gove, dismissed economists by pointing out they did not predict the economic crisis of 2008 and hence had a bad record of success.

Whilst some of the unease ordinary people have with experts overlaps with their disquiet about political classes, the problem with experts has additional dimensions that are mainly a product of our dependence on them. There is hardly any area of life where we do not gratefully and dutifully submit to the recommendations of experts, be it medicine or plumbing. Yet, at the same time, we also resent and relentlessly question the basis of their authority.

At the core of the argument against experts stands doubt about the source of their knowledge, expertise. In a world where everything is available at a click of a button on Wikipedia, expertise is seen as little more than accumulated and stored wisdom about how to do something, which is practical knowledge. What is unacknowledged in this view of the sources of authority is the fact that practical knowledge sits on a mountain of theoretical knowledge, which developed through formulating and testing models of how best to do something. This theoretical foundation is however constantly shifting ground, which in turn requires careful assessment and recalibration of opinions within a community of practitioners, be they plumbers or dentists. It is this dynamic nature of expertise that people feel uncomfortable with, as opposed the desired stability and certainty.

In a sense, the refusal to recognise the dynamic nature of expertise is a reflection of our impatience with knowledge production. As the referendum demonstrated, people wanted to know 'the facts' in a world where facts are socially constructed and constantly challenged. The hope that experts could pronounce authoritatively on the legitimacy or truth of those 'facts' will always remain just that. It mirrors the disenchantment of many people with political strife: the demand that politicians just find common ground and agree on something that can then be implemented. That view neglects the critical role of strife and argument in knowledge production as well as politics. To argue about something is to strengthen the foundation of whatever might ultimately emerge as the best way forward.

Saturday, 25 June 2016

The revolt of the dispossessed

The vote in favour of Brexit appears to have surprised everyone, not least the Brexiteers themselves. As politicians across the political spectrum in Britain and Europe scramble for answers to the question 'what next', the reactions from those in the Brexit camp and those in favour of staying in the EU could not have been more different. After a strangely sombre Boris Johnson addressed the media yesterday, trying to look presidential and like a PM in waiting, the Brexiteers have now gone into hiding. As the BBC correspondent Norman Smith noted, not one of them could be reached for comment at this critical moment and as the economic warnings of Remain campaigners come true. The reason is clear. Neither Johnson nor Gove ever had a plan of what to do next. Their campaign was predicated on questionable assumptions and base prejudices against immigrants. Now, that clear policies and a coherent strategy is required, they are nowhere to be seen.

Gurnos Estate in Merthyr Tydfil with a life expectancy of 58.8 years 

As for the other side, consider Nicola Sturgeon's response to the recent vote. Her cabinet made it clear that they will explore how to keep Scotland in the EU, something that conveniently overlaps with her overriding policy goal to take Scotland out of the UK. It helps that she has also quickly reassured Europeans who live in Scotland that they are welcome there. It is this inclusive political tone by Sturgeon that is such a far cry from anything Johnson can ever muster. 

As for the actual culprit in the room, the vote has made one thing crystal clear to anybody who wants to see it: Jeremy Corbyn has not got a chance in hell to ever make it to Downing Street. Whilst his anti-capitalist rants carry some favour with a small vocal left wing group in London, it cuts no ice in the traditional Labour heartlands which reel from cuts to local services and feel left behind. In that sense, the revolt of the poor in Merthyr Tydfil and Yorkshire was just as much a revolt against the Westminster elite as one against a Labour Party that had cocooned itself in anti-capitalist rhetoric and shadow boxing with their Blairite wing. If Britain is heading for a snap election in about a year's time, the Labour Party will likely to disappear from large parts of the country as an electoral force. 

Saturday, 11 June 2016

Why 'Leave' are winning

If you had asked me 6 months ago what the outcome of the EU referendum would be, I would have ventured an unambiguous answer: 'Britain will vote to remain in the European Union'. How wrong this answer would look today. The latest poll puts the Leave camp 10 points ahead of Remain.

Whether or not you believe the polls, everyone agrees on one thing: it's going to be close. Very close indeed. And it shouldn't be. So how did we get here?

There is now a consensus that the gravest threat to a Remain vote is the rapid decline of Labour in its heartlands. The Guardian and the BBC recently travelled into these areas where deprivation, long term unemployment and general hopelessness have dominated the political landscape since the 1980s. South Wales is a good example. Asked why they support Leave, the answers come thick and fast. And they are all of one kind: immigration. Whilst there used to be hesitation to discuss this issue, covered by the thin veil of British politeness, now people openly voice xenophobic and at times even racist prejudices.

Their opinions are peppered with flagrant falsehoods such as: 'immigrants get a grand in cash when they get here' or 'they get free housing', or 'most of them scrounge on benefits'. But the tenor is remarkably similar. The message is simple, straightforward and repeated up and down the country. And it is one that comes from one source alone: UKIP.

Neil Hamilton, of 'cash for question' fame, now sits in the Welsh Assembly for UKIP
Foto: WENN

Although the Labour Party does not want to hear it, its voters are abandoning Labour in droves. More and more Labour supporters have moved to the far right, taking the electoral fortunes of their party with them into an abyss of xenophobia and narrow-mindedness.

Why did this happen? And why now? There are essentially two reasons for this. The first is that UKIP has gone unchallenged for decades when it peddled its falsehoods and distortions about foreigners and migrants in the UK. The Conservatives felt largely insulated from the UKIP threat due to the first-past-the-post electoral system. And the Labour Party thought the UKIP message to run counter to the ideals of solidarity and mutual support that defined the party in the post-war period. So no one thought it worthwhile spending political capital on challenging the UKIP narrative (with the valiant exception of Nick Clegg, anyone remember him?).

The referendum changed this drastically. It gave Farage and his minions a national stage to articulate publicly the simple message that had already sunk into the nation's (sub)consciousness: It's the migrants' fault.

The second reason is of tactical nature. The Leave campaign settled early on a simple message and managed to define the terms of the debate: control, sovereignty, immigration. It shaped the content and nature of the terms by positively associating false choices like 'control' versus 'Brussels' with democracy. There are too many ironies in this to list them all here, ranging from the claim that the British political system is a beacon of democracy (House of Lords anyone?) to ignoring role the EU has played in democratising large swathe of the post-communist and post-Franco landscape since 1975.

Defining the terms of engagement is the key ingredient for political success and the Leave campaign understood this well. Once the campaign started Brexiters could rely on a solid foundation of animosity towards others, xenophobia and outright racism that was put in place long time ago by UKIP. All they had to do is to bring in their harvest of division and resentment.