On rent control

Ed Miliband is clearly determined to be the Robin Hood of modern times. His policy proposals on energy, housing and the railways for a future Labour government have one word in common: price control. That makes him the darling of the much battered middle classes (although there has been some dispute recently about how badly the middle classes have actually fared during the recession).

Miliband thinks that the answer to imbalances between supply and demand is state regulation through the control of prices. Fix the price of bread and butter and people will be able to buy these goods aplenty for a fair price, so the logic goes. Miliband's critics have not been shy either with colourful descriptions of this policy approach. Simon Jenkins from The Guardian called the latest proposals for control of rents 'economically illiterate'. So who is right?

There are two reasons why I believe Jenkins is the proverbial voice of reason. First, controlling prices never has the effects those introducing price controls want them to have. Take the example of price controls for food following the war. Germany, just like any other European country suffered severe food shortages between 1945 and 1948. There was ample evidence however that sufficient food was being produced. The Adenauer government, under its Minister for Economics Erhard, abruptly abolished food price controls in 1948. There was much dismay at this move in all political quarters. The fear was that prices would spin out of control. In fact, the opposite happened. Within weeks, shops started to fill with food products and prices started to drop. By the end of the year, food supplies to the German population had stabilised amid record low prices.

Not quite the capitalist - Ludwig Erhard abolished price control and created the German economic miracle

Britain took the opposite way. The British government decided to continue with food price controls and, consequently, rationing and serious food shortages were a constant feature of family life in Britain well into the 1950s. In the meantime, the British government understood food shortages as a problem of insufficient state regulation and control, railing against 'food hoarding' and tightening its bureaucratic planning grip on food stuffs that had previously traded on the open village market for times immemorial. The lesson: the more you try control the supply of a product by setting prices, the less people will want to sell it, hoping for a better price soon. In essence, price controls exacerbate supply side problems, rather than solve it.

This leads to the second reason why Miliband is wrong to call for rent controls. His proposal assumes that rents are a problem for all and everyone in the country. Yet that is clearly not the case. If there is one feature of British economic and social reality that mitigates against central control from Westminster then it is the shocking imbalance between the South East (and South West to some extent) and the rest of the country. Talking of exorbitant rents in the South East and London makes sense. But the same proposition is non-sensical for someone living in Liverpool or Leeds where you can rent a spacious 2 bedroom property for about £450 per month.

Capping rents would mean that fewer people would like to provide rental properties (or repairing existing ones) which would only have the effect of limiting the already tight supply in London and the South East, whilst producing a similar tightening of the yet ample market supply in other areas. In other words, controlling rents would make things worse for everyone involved.

What sounds like a good idea for you if you have ambitions to be Robin Hood is certain to backfire. As the example of food rationing shows we have been here before. But perhaps collective memory is just too short. Who remembers British food rationing after the war?

On Co-op, modern management and mutualism

One of the most difficult questions in organising capitalism is what types of management would be best for society. The conventional answer is that one involving citizens and communities to a large degree in decision making also benefit them most. This ‘empowerment’ ideology dominates much of the current discourse on economic equality (austerity driven by narrow shareholder values versus public service largesse underpinned by public interests). 

Yet the crisis at the Co-op clearly undermines this simple binary narrative. As the former (Labour) City Minister Myners has expressed his desperation with existing governance structures at the Co-op (loosely based on mutualism) that make the company close to ‘ungovernable’ due to the cacophony of voices on its management board, the Co-op should be a paragon of community virtue if the conventional narrative is anything to go by. 

The Observer today reports, however, that this does not even come close to the truth. Instead of considering community interests during its latest offloading of company segments to the wider market, those organising the sale of Co-op farms at the Co-op management board have made it clear that they are not interested in community buy outs. They, so The Observer reports, are keen to see a hedge fund or a Chinese investor to take over the farms, including the 44,000 acres of land attached. 

If this was a public service, the outcry on the left would be noisy and sustained. After all, the farms have been financed by Co-op members throughout their existence and their profits have been re-invested rather than creamed off by the members in line with the principles of mutualism, the Co-ops founding tenet. Now, the board is likely to offload those very farms to the very financial behemoths they were supposed to resist. 

What does it tell us about the relationship between management and community interests? It appears that there is little direct linkage between how effectively community interests can be served through specific management structures, in particular through mutualism. As the Co-op fights for its survival, modern highly leveraged capitalism appears to be the only guide for action. 

The chimera of the powerless individual

A specter is going round in the political debate, the specter of the multi-national company that buries all people under its relentless drive for profit. The conventional trope is one of an overbearing multinational conglomerate that sweeps everything and everyone before it, squashing the powerless and helpless and forcing them to submit to its will.

But is our age really characterised by a lack of power for individuals? Has the domain of individual freedom really shrunk since globalisation has arrived on our shores? There is clearly a significant and worrying asymmetry between the power of the multinational companies and governments that are trying to extract taxes out of their profits. The demise of state power however has much to do with the geographical boundaries of governments and the ability of multinationals to transcend those boundaries. Much of the blame (if this is a case for blame) can be laid at the doorstep of those very governments that have tried to lift governmental controls through free trade agreements. So, there should be little surprise that capital flows freely where it is told to do so.

Yet, the fact that governments stand largely impotent before the behemoth of multinational capital does not necessarily mean that the individual suffers likewise. You can only think so if you believe that governments are the sole guardians of human beings. There is some truth in it (think of security), yet the larger picture seems to be one of increasing freedom for individuals rather than one of its diminishment.

What constrains individuals in modern societies are not multi-national companies through the free flow of capital. Companies and the economies globalisation has created appear to enable freedom rather than  squash it. What traditionally and historically restricts the freedom of individual human beings are state boundaries and social expectations of conduct underpinned by collective notions of morality and law. But we do not have to ascribe to a mechanistic conception of liberty to see globalisation as the main agent in the increase of human freedom. Marxists can take comfort in the fact that even in their traditional domain of positive liberty, the big barriers to individual freedom have been knocked back. Access to education is universal in most countries now and states have made huge strides towards health care provision for all.

Whether you live in Costa Rica, Nigeria or Slovenia, geographical mobility is at unprecedented high levels which demonstrates that individuals all over the globe do not perceive themselves as powerless in the face of economic forces but more than ever, see this world as their oyster. And my suspicion is that the leveling forces of global economic integration are a big part of this story of empowerment.

The stylistic audacity of Uwe Johnson

There is prose and there is prose. I have always struggled with some of the magical realist writings but perhaps this has something to do with the fact that I don't read Spanish or (Brazilian) Portuguese so the particular melody of its most prominent examples escapes me. When it comes to German prose, there have been some books with international recognition recently. Daniel Kehlmann's Measuring the World and The Reader by Bernhard Schlink are probably good examples of solidly crafted German writing.

Yet, for all their surprising narrative turns and twists or observational acuity, the linguistic means employed in them are often pedestrian to say the least. In fact, I have not read any German novel or story recently that had a playful attitude to the German language. You have to go back to Uwe Johnson to find something remotely experimental when it comes to style. Johnson is famous (and perhaps notorious) for curious placements of adverbs in the sentence order. In his Frankfurter Lectures (published under the title Begleitumstaende) Johnson reveals the fights and arguments he had with proof readers and editors about his writing style. Yet, he offers a simple justification.

'Das ist die Absicht, Sie herauszulocken aus Ihren Lesegewohnheiten, und erlaubt ist es obendrein.' (p.188)

Johnson wanted to tease readers out of their comfort zone and challenge them linguistically. More so, his (grammatically correct) style functioned as a plot device, adopting different viewpoints and constantly shifting the centre of perspectival gravity. His book, Mutmassungen ueber Jakob is a brilliant example of this. As the plot thickens, the voices become almost unrecognisably and continually displaced, a narrative device that reflects the conspiratorial nature of human existence in a paranoid country embarking on a socialist path to human misery.

Fighting with editors over the order of things in sentences - Uwe Johnson

Johnson always maintained that his writing style was guided by simplification rather than obfuscation. I somewhat disagree. Simplifying the structure of the German sentence often acted as a deliberate cover to keep the reader guessing who was talking. In a way, his writing mirrored the anxieties (and double think?) of East Germans as Big Brother was watching over them. Perhaps Johnson refused to see his writing as a measure of his location in time and place because he wanted to write a prose that proved timeless. For me, his rootedness in the paranoia of the East German regime produced a style that is here to stay, long after the Kehlmanns and Schlinks are forgotten.

The geographical realities of Europe

As the European elections are creeping ever closer, the debate about 'in or out' of Europe gathers momentum. The hapless leader of the LibDems, Nick Clegg, showed some guts to publicly slug it out with the UKIP leader, Nigel Farage. The result was pre-ordained, to say the least.

It is not just that Farage is a formidable debater, and Nick Clegg failed to update his schtick from the last time he appeared in a leaders debate ('Trust me, I am an honest politician'). More importantly, Europe is pretty low on the list of issues that concerns voters. Curiously, that works in favour of Farage, the eternal anti-European. Exactly because Europe is of little relevance to the day to day lives of ordinary people, it arouses heated debates. Nothing is more fun than to discuss something that allows people to let emotions rip without making it a substantial issue that splits families. Gay marriage is in the same category, something that will affect only a few thousand people in the UK, but evokes hot debates up and down the country. In the small matter of Europe, it may not help that its parliament is little more than a talking shop (what size for bananas?) and its bureaucrats are filling their pockets with dodgy expenses.

But what clinched it for Farage is ultimately something else. It is the lack of experiencing benefits (or anything else for that matter) through being in Europe. If you live in a border town in Belgium you will drive across a (non-existing) border and go shopping in French or German super markets. If you watch the news in Germany, you will be swamped with stories about your French or Polish neighbours. In short, on the continent, you live Europe, whilst in Britain, Europe is something far away. The prevailing sentiment that India or the US are culturally closer to Britain does not help.

Poor Clegg will have to face geographical reality, which is that Britain is an island, and so the pro-Europeans will always be disadvantaged right from the start. On top of that, and despite all the heat it generates in the media, Europe does not mean much to most ordinary people in this country, for better or worse.

The Palestinian Front splits again!

The political left in the UK is always concerned to provide sufficient choice for its potential voters. According to Wikipedia there are currently more than 24 leftist political parties vying for the support of anybody who sees him/herself on the left of Labour. Yet, 24 political parties are clearly not enough so Ken Loach has just launched another Socialist Revolutionary Front for the Liberation of Palestine (or was that England?).

Time to split - with comrades like these who needs Labour?

He was kindly answering questions online to Guardian readers recently and mentioned that his new party will look to establish co-operations with other left parties in Europe, such as Die Linke (the former East German Communists) and Syriza. I am not sure that either of those will be much amused about this offer, given that both parties actually win votes (Die Linke is even in government in some German states), which is clearly something that Loach's party can only dream of. Yet, every revolution starts with a dream, or shall we say with false consciousness?

I will bet a great British pound (ONE!) that Loach's party will not even get their deposit back if they ever muster to put up a candidate in a general election. Anyone???

The English Idyll and HS2

There has been a lot of debate recently about the pro and cons of HS2, the high speed train the government may or may not build from London to the North of England. A main argument of those critical of the scheme is that the route of the track will lead through some of England's most beautiful countryside. The government has tried to address this concern by proposing to partially tunnel large parts of the railway through the Chiltern. For many, however, this does not go far enough.

Here is one vocal critic describing the potential effects of the new track:

This rail 'will slash like a knife through the delicate tissues of a settled rural civilisation... and will brutally amputate every hill on their way.'

Strong stuff, but I have not been entirely honest in giving the quote. It is not from a critic of HS2 but by John Clare, an opponent of the London to Birmingham railway in 1835.

The fact is that railways always change the landscape to an enormous degree. As W.G.Hoskins wrote in 'The Making of the English Landscape':

'Railways created as much beauty as they inadvertently destroyed, but of a totally different kind. The great gashes they inflicted on the landscape in their cutting and embankments healed over, and wild flowers grew abundantly once more' (p.264).

True, railways rarely create beauty in themselves, but, as Hoskins rightly notes, they often give us new vistas of the existing world, even if only fleeting ones glimpsed from inside a high speed train.