Drawbridge Brothers: Nationalism

Nationalism is the closing of a door. The ideology gives off a strong penchant for isolationism and, a tendency to breed ethnic and racial discord, at times leading to hatred. If you think – ‘we must look after our own’ – it becomes a definitive barrier to a broader, more cosmopolitan outlook. It closes a chapter to a life that could be illuminating.

 

There’s much discussion about the origins and when it reared its ugly head. Francis Fukuyama1 (p187) cites two authors of the subject, i.e. Benedict Anderson who suggests nationalism emerged in the 16th century, whereas Ernest Gellner puts it at the 19th century. A third voice, Steven Grosby, Nationalism (p118) opines that it is difficult to determine.

Agreement is reached that it is a question of identity. Perhaps it could be construed as a need to belong. A powerful emotional state can be generated by the ideology. So strong are the feelings brought to bear that it can override rational thought.

It is widely agreed, Fukuyama (p191) that nationalism was ‘socially constructed’. Of course, it has mainly benefitted the elite but does have a base in tradition. However, tradition changes over the centuries. What was cultural norms and thought traditional in the 11th century is quite different to our cultural norms and way of life today. Tomorrow’s cultural norms will be different again; perhaps based more on equality and a move from borders.

The elite and political class have made good use of the powerful emotive pull of the ideology to their advantage. The consolidation of Germany as a nation following the 1871 war against France is an example. The First and Second World Wars with the call to arms ‘Your Country Needs You!’ had them lining up to enlist. An explosive cocktail of pride, – patriotism, jingoism, propaganda and manhood made it almost impossible to resist.

The European Union (EU)

The construction of the EU may seem as a step away from borders towards a new unity as noted by Fukuyama (p192) “… the European Union has been trying to construct a postnational sense of European citizenship since the 1950s.” Steven Grosby (p25) has a slightly different take on the issue when he writes that we are possibly seeing “… the emergence of the empire of the European Union.”

While the author’s intention may be more to do with semantics they do portray quite a contrast of view. Fukuyama hints at an all embracing natural development whereas Grosby has a more Machiavellian tinge to it with the use of the word ‘empire’.

My humble take is that it has more to do with erecting a force big enough to counter the emerging powers of India and China as well as to keep abreast of America. In effect the EU is a business model for economic survival. On present political course it may well become an empire.

However, the EU is not without problems, the UK has voted to leave and Spain already weak has a dilemma with the prospect of the Basque region breaking away. But Spain is not alone, in the UK Scotland threatens to divorce itself from the rest of the nation but wants to remain in the EU. Thus we have the EU trying to build an economic block to rival India, China and America while nationalism is snipping at its toes.

It is a peculiar situation that both Scotland and the Basque region want to break from their parent country but remain in the EU. Neither seems to see the contradiction that the EU wants a cohesive block with no borders but both the above want a separate border. It would seem that they do not understand the cultural shift that is envisaged for Europe.

Further afield in Canada, Quebec has a strong leaning to be independent. Some in Quebec and in the Basque area are prepared to use violence to secure their vision. Steven Grosby (p116) sums it up, “…the uncivil ideology of nationalism continues, often tragically, to have a hold, with varying degrees of intensity, on the imagination of humanity.” Read of the events of the Balkan Wars.

In all cases above, each see themselves as culturally unique in some way with different traditions, as an ethnic body. However, Alice Roberts in her book, Celts (p268) opines that there is no “…‘pure’ ethnic identity, from a genetic point of view.” She later concludes, “We’re all genetic mongrels.” In other words we are all part of a bastard race.

Throughout our history slavery has been a part of our society. People were traded all over the known world. I think of Rome which had an abundance of slaves, who did not scatter for ‘home’ when the empire collapsed, rather they were assimilated. Our history is full of conquests, of much rape and pillage. Slavery was a part of the economics of the old world as it is now with the despicable underworld of people traffickers.

Francis Fukuyama is unequivocal, “It is certainly correct that nationalism was a by-product of modernization, and that specific national identities were socially constructed.” The question is by whom? We can hopefully agree that it was not the march of the peasantry that consolidated Germany, or bound France, or Britain. Conquest, power, dosh (£ $) that was the key motivators. The peasantry did march but as enslaved soldiers of their masters.

A little bomb was left for others to get excited over by the writer Ernest Renan, cited by Fukuyama (p196) when he states, “Forgetting, I would even say historical error, is essential to the creation of a nation.” Hmm!

Nationalism has proven to be a tool in the hands of the unscrupulous, the elite and political class. They call upon it as a sheep dog to corral support for their next enterprise. Pride, a deadly sin, stirs the necessary response to action. Across the way, emotion rides past giving ‘the finger’ to intellect, rationale and reflection, who lower their heads.

1Francis Fukuyama   Political Order and Political Decay

 

Democracy: Can it Survive?

 

Democracy holds more emotion in its wake than any other political theory. It has stimulated a considerable amount of discussion and hyperbole from the earliest philosophical writers to the present day. But the burning question is whether democracy can work, and, can it work for the majority of society or is it a pleasant guise for control by an elite?

Certainly, the thought of democracy has wetted the thinking of many writers considered among our best intellects over the centuries:

Plato: was not a fan as he condemned it “… followed citizens’ impulses.” rather than the common good.

Nietzsche: was not enamoured either, he wanted to be, “… beyond the lowlands of the herd conscience.”

Machiavelli: likewise; as the intellects would be the prisoner of the “whims of the people”.

Charles Maurras: believed we should accept that we have, “natural hierarchies”.

JS Mill: was concerned by, “…the moral coercion of public opinion” that the individual was sovereign and bemoaned the ‘tyranny of the majority’.

www.serendipity.li/jsmill/jsmill.htm

https://en.wikipedia.org/wiki/Anti-democratic_thought

Without being disparaging these were yesterday’s men with yesterday’s prejudices, when the very concept of democracy held a fear of control by the ‘herd’. Mill’s focus on the individual is little more than a scream of a narcissist. Along with the others mentioned their fear was brought on by the prospect of the uneducated rabble who survived in vermin infested hovels having jurisdiction over them.

They saw no potential in the hoi polloi. They simply looked at the uneducated mass and contrasted that with their own highly educated self and, were blinded by that fear and blatant snobbery.

Would a look at a more modern picture reveal a more sympathetic view?

Robert Michels: opined “… that democracy is a façade legitimizing the rule of a particular elite…” He suggested that democracy naturally slides into an oligarchy. He himself moved from being a socialist to become a fascist. Can we see a trend?

Rabbi Elazar Shach: had no doubts, “Democracy is a machinery of lies, false notions, pursuit of narrow interests and deceit.” His preference was to follow the teachings of the Torah.

https://en.wikipedia.org/wiki/Opposition_to_democracy

Not much succour there for believers so let’s come right up to date:

A study carried out by Martin Gilens & Benjamin Page (2014) concluded that the majority of the American public had little influence on U.S. government policy. I have encountered that view several times and have raised it on previous posts.

A more damning assault on the weakness of democracy comes from ex U.S. president Jimmy Carter (2015) who is reputed to have said that the USA is now “… an oligarchy with unlimited political bribery.” Wow! Don’t mince your words Jimmy. Again, it is a slight that has its own choir of substance.

https://en.wikipedia.org/wiki/Oligarchy

We have come across the term oligarchy a few times and can now add other nouns such as plutocracy and fascism.

  • Fascism – strict rule by a leader & a small group of supporters.
  • Oligarchy – government by a small group.
  • Plutocracy – government by the wealthy.

Political scientists and sociologists will no doubt condemn me but the terms come across as much of a muchness. Or to put it more informally – money talks!

The political class will scream and bring forward an array of quotes from notables to try to establish that they don’t fit into any of the categories above. The social democrats in particular will holler their disapproval of any such characterization. In response I would suggest that they look in the mirror and learn the true insightfulness of reflection. They have ruled, especially in Europe for the last few decades, so anything that has gone wrong has done so under their watch, e.g. the rise of fascism and far-right groups.

“…extremism flourishes in an environment in which respectable voices offer no solutions as the population suffers.” Paul Krugman (p19) End This Depression NOW!

We’ve had ex-president Jimmy Carter, Nobel Prize winning economist, Paul Krugman, so let’s hear from political philosopher Noam Chomsky. “It’s getting so that when I hear the word ‘democracy’ uttered by a politician or government official I automatically reach for my BS detector.”          Chomsky – Language and Responsibility There are a whole, whole lot of people do exactly the same as Chomsky.

So nobody likes democracy from the educated of the past to the educated of the present. What shall we do? Dump it in the rubbish can or just leave it to rot. For me, sitting on the next to bottom rung of the ladder of power (big ladder), I say keep it. As it has not yet completed its cycle.

There are weaknesses but there are in all political philosophies. There are also solid strengths as experienced in 2016 with the march of ordinary joe who shocked the political establishment with their voting power.

The body blow to the political class in UK, USA and Italy is a very hopeful sign, though a move to the right it was not a bridge to far. A thoughtful and inclusive campaign can swing things around.

A further strength of democracy is the ability to remove poor governments and the dirtbags whose back pocket is weighing them down. The system while open to abuse is also open to voices of descent and those who aspire to a good society. It’s just unfortunate that the latter voices cannot sing in harmony and as a choir.

Note what Charles Handy (p89) writes, “In a democratic culture, if it is not to degenerate into a battle between interest groups, it is particularly crucial that we find a common cause.”               Handy – Empty Raincoat

False Hope

To this end the social democrats and the general left of the British political scene probably thought they had found a ‘common cause’ with their promotion of political correctness (PCism). They were very wrong. It may have been perceived as a positive step forward towards a good society but it was clumsily introduced and implemented as tactfully as a bulldozer at a F1 race.

One can’t condemn fascism and communism as totalitarian regimes then seek to impose a political agenda, even if that agenda may be construed as for the common good. But to then lacerate opponents and doubters with vile accusations and, invoke the law to enforce its acceptance is hypocritical. It is not equality at work.

Any political agenda which is imposed may be considered as totalitarian. “What is a totalitarian regime but one in which variety of opinion is suppressed and conformity to a particular ideology is enforced.”  Catherine Rowett, www.academia.edu/1766239/A_dangerous_opponent_of_democracy

A more moderate view of PCism comes from Graham Good – University of British Columbia: “… it catches a certain kind of self-righteous and judgmental tone in some and a pervasive anxiety in others…”   https://en.wikipedia.org/wiki/Political_correctness

It may be shrouded in Karl Popper’s term ‘piecemeal social engineering’. Others may liken it to B.F. Skinner’s (1904-1990) view that society should develop ways to condition people to behave in a more appropriate way.  Book: Walden Two 1948

Some will associate it with George Orwell’s novel Nineteen Eighty-Four (p241 (Appendix)) and his version of Newspeak, which was devised, “…to meet the ideological needs of Ingsoc, or English Socialism.” The sole purpose of Newspeak was to, “…to make all other modes of thought impossible.”

http://www.encyclopedia.com/social-sciences/dictionaries-thesauruses-pictures-and-press-releases/piecemeal-social-engineering

Nonetheless, many right-wing activists believe that PCism is ‘indoctrination’ an attempt at ‘brainwashing’. Can the left in politics answer this view without being curt, inflammatory and dismissive? Dialogue is our only way forward in a positive vein.

Moreover, PCism was introduced throughout the western world. This would suggest a concerted and determined plan to impose it by the social democrat political elite. However, their haste was their undoing because they never took the time to talk it through with the electorate which suggests a contempt for ordinary joe. This fervent flurry to have it implemented and cemented before the likelihood of political change may have forced their hand to try to secure it with the weight of the law.

The law may remain in force, even after political change and, will stop people from openly voicing an opinion but will not change their mental attitude. The use of the law will foster resentment and that resentment will fester. The cost will be high.

There is a considerable loss of trust between the people and their elected representatives, admittedly, not solely due to PCism but it is a serious nail in the democratic coffin. Other costs include:

  • A decided move to the right in politics.
  • The rise of fascist parties in Europe.
  • People ‘feel’ the contempt of the political class.
  • Division in society.
  • A set back in the quest for a good society.

Of serious concern is that once people move to the extreme right in politics they very rarely move back to the centre ground. They become entrenched.

A chasm has opened between those in favour and those against PCism. A vehement opposition has emerged. In some parts of America it has reached fever pitch, with radio talk show hosts lambasting PCism at every opportunity and shows like South Park taking the mickey. It has given the right in politics a ready-made platform from which to pillory the left.

Jokes about PCism may not be heard much on television in the UK but are common in local pubs and clubs. And every time a silly case gains media attention it reinforces the held view and encourages others to join in.

Such a rallying of opposing loud hailers may appear as a positive thing for a healthy democracy but it is not. Entrenchment on either side makes it nigh impossible to find common ground, and a ‘common cause’. Thus the advocates of political correctness may have set back the very principle of equality because they failed to make it inclusive.

Call me a cynical conspiracy theorist but could the failure have been deliberate. In order to maintain the alliance of the political class and business interests and the windfall that comes from corruption.

Without doubt democracy has many challenges but still has room for development. In my opinion PCism is an exemplary example of the dangers inherent in democracy; it was too one sided and the brain child of a cabal of thinkers. The result is that we have factions of right and left at loggerheads or at worse entrenched and bitter.

People Power?

The weaknesses of democracy are apparent if we re-examine the views expressed earlier. We can dismiss the fear of the ‘intellects’ of the past as their vision of despair did not materialize. On the other hand there is a degree of truth in the more modern analyses.

Michels view that democracy is a ‘façade’ for rule by an elite is insightful. If we think in terms of the political class and the present feeling of alienation by the people, that gives credence to Michels’ observation. However, we do have opposition parties and organizations; perhaps not as strong as they should be but that could have as much to do with our lack of involvement as their whispered voice.

We can add to the voice of Michels the study of Gilens and Page and their conclusion that the electorate of America have ‘little influence’ on government policy. The obvious point being made is that the public are simply ignored. That being the case gives credence to Michels other contention that democracy slides into oligarchy.

I would lump together Rabbi Shach’s view on ‘deceit’ with Jimmy Carter’s condemnation of ‘bribery’. They both contend that corruption is rife in the political hierarchy. We should all be aware that corruption plagues our political system. It’s as widespread as trees in a woodland. There is not a country in the world which you could say was squeaky clean. Daunting, isn’t it?

In America, supposedly the great democracy corruption is second nature to the politicians. It is given the name ‘clientelism’ which simply means; you scratch – I scratch and both our backs are covered because the money given to my campaign is just a donation. And my vote for particular legislation is that I support it. A whole lot of $millions is involved.

The problem is so embedded in India that the government has recently changed its currency; new notes for old in an attempt to flush out corruption. As the Indian government has recognised corruption harms the economy. Good luck. However, we should take our hat off to them for such a bold move. Good to see some politicians with a large degree of bottle.

Another positive story comes from South Korea where the president Park Geun-hye has been impeached on bribery charges. The head of Samsung has also been questioned (for 22 hrs) about donations totalling around $25.5 million. The authorities are now trying to secure an arrest warrant for the head of Samsung. President Park’s future will be decided by their constitutional court.

China has only recently set up a new agency to investigate the agency they initially established to counter the growth in corruption. It makes me think it’s a lot like a dog trying to catch its own tail.

A more recent example comes from a report in the Daily Mail January 11 2017. The story outlined that a businessman flew $500,000 in a private jet to Liberia, Africa to bribe two officials in order to have the law changed to suit his mining company.

One more case to hit the headlines is that of Rolls Royce the engine manufacturer. Several areas of the media have given it some prominence with its fine of £641m or around $810m for bribing foreign officials to secure contracts. Daily Mail 2017/01/17

The Guardian claims that along with the BBC they exposed the scandal in October 2016. However, the investigation had been on-going since 2012 with the cooperation of the company. The good thing is that it was exposed. Let’s have a monthly column on corruption in all media.

These are but a few examples and as already alluded to there are few clean bums in the political world. On a serious note we should listen to J. Stiglitz (p165)  “Corruption undermines faith in our democracy.”  The Price of Inequality

What should we do next? It seems like an impossible task to rid the system of the pirates. It’s especially difficult in that we need the existing politicians to implement a programme of corruption busting. Progress is being made based on the evidence above. Fighting corruption is a big job which requires a considerable amount of mental strength and the belief that ending corruption is essential work.

I’ve illustrated with the examples of India and South Korea that it is possible and that there are good guys out there. I’m also of the opinion that there is considerable mileage for politicians to pick up the cudgel against corruption.

Can democracy be saved?? Will the Fantastic Four come to its rescue? The Guardians of the Universe! James Bond, even? Unfortunately, we can’t rely on the fantasy world to help us.

Though I’m reminded of an old movie I watched on TV; it was Michael Douglas playing the role of the American President, Andrew Shepard. He’s addressing the assembled press and uses a one liner which struck me as apt: “Democracy isn’t easy” and goes on to attack his republican opponent Bob somebody.

And that’s the reality, democracy isn’t easy. I wish I had a blueprint, all the answers but I come up against the pure logic of Karl Popper The Open Society. He argues, correctly, that there can’t be a blueprint that we cannot lay down a set path that people will follow because we want them to. If we can agree on something, then let’s have a go, see if it works, if not change it. It’s a slow process but eventually we get to where we hope is a good society. That should be our common cause.

I’m encouraged by the electoral votes of 2016 and hope that the movement continues into 2017 in both France and Germany. I just hope that the political elite can hear the alarm go off.

I was struck by the speech that British Prime Minister Theresa May gave at the UN in September 2016 when she reminded the assembled that:

“We must never forget that we stand here, at this United Nations, as servants of the men and women that we represent back home.”

Colour me surprised but intrigued by her reference to representation, which was positive. But the bit that got my real attention was the use of the word ‘servants’. Was this purposeful as a means to curry favour back home, an ideological slip or a clear understanding of what democracy should look like. Of course, as a believer I hope it was the latter and like me she is a true disciple. Arrrh! My cynical personality is coming out!!!!

Nonetheless, we know in which direction we need to go, for our sakes, for our children and our grandchildren. Let’s keep our common cause in mind every time we vote or want to voice an opinion. Our motto: we know where we’re going. If politicians or businessmen don’t want to come along – stuff them. A good society is too important to be side tracked by the merchants of greed.

We must also be aware that we can’t get everything we want. Let’s walk and talk and see where it leads us.

 

 

 

The Rape of the Poor

 

Try not to live as a pretender,

But so try to manage your affairs

That you are loved by wide expanses,

And hear the call of future years.

Boris Pasternak – It is not Seemly to be Famous – stanza 3

It is now well documented that while the super rich have grown richer the poor have travelled in the opposite direction. According to several economic writers the blame lies squarely with the neo-liberal economic model*, and, that its demise signals the last rites for capitalism. It’s a stretch to suggest that because one economic model has failed that we must prepare for a new world order.

However, there is one truth and that is that the poor have been raped. They have been raped of income, of opportunity, of prospects, of their self-esteem and of their very dignity. Let’s draw our picture with a few succinct and powerful quotes from notable writers.

The USA, under neoliberalism, boosted profits by impoverishing its own citizens.” Paul Mason (p19)1

“…income inequality has reached extreme levels not seen since the 1920s, and before that, the 1890s.” James Rickards (p236)2

The general thrust of these quotes are supported by other economists that I have previously quoted in earlier posts: Stiglitz, Chang, Rodrik, and Krugman. There can be no doubt that the poor have not kept pace with the distribution of wealth that has been generated. The push to globalization and its fellow rider free trade have cost the poor of the western nations much.

*www.en.wikipedia.org/wiki/Neoliberalism    

 Multinationals have simply used their capital to invest elsewhere, mostly in Asia and China in particular, to utilise the cheap and at times slave labour. A prime example, quoted in several books is that of Apple. This company pays to have its phones etc. manufactured in China by cheap labour but when the finished product comes back to USA and Europe, Apple charge a price that would equate to the phones being manufactured in America or Europe. The company makes huge profits from such an arrangement. Huge!

We are all now aware why the big boys have been promoting globalization and free trade; it’s of great benefit to their profit margin. The rest of the populace can go take a hike!

Banksy

But wait! The hoi polloi have not sauntered off with their cap between their legs. No, they’ve used their democratic right to vote against the elite. They have done what our politicians have been afraid to do.

Stunned, the elite stare in amazement at the audacity of the low-life. Some have voiced their anger at this popular wave of sentiment: the Brexit vote in UK, the Trump victory and the referendum outcome in Italy. Shit! they cry. The bastards are ganging up on us! However, the real reason is that the elite have been blinkered by “decades of denial” Rickards (p230) Paul Mason (p258)

Nonetheless, the elite have sent out their Stormtroopers to defend their rights. Politicians of various hues have marched to the given tune. Jean-Claude Juncker, head of the European Commission has made it clear that events should not be dictated by populism. John Major, ex-Prime Minister of Britain bemoaned the “tyranny of the majority” (John Stuart Mill 1859). Meanwhile, Labour MP Chuka Umunna, speaking on the BBC News channel spoke of the “elective dictatorship”.

·         These little men are so full of their own self-importance.

Let’s try and explain to these political hacks why populism is so in vogue:

“Once the election is over, voters are ignored and winning elites carry out preconceived plans”. Rickards (p238) Ring a bell? Been here before?

This leads nicely to philosopher Michael Sandel, (p13) 3

“Disillusion with politics has deepened as citizens grow frustrated with a political system unable to act for the public good, or address the questions that matter most”.

I would make one quibble with Sandel with his use of the word ‘unable’; I would have used the adjective ‘unwilling’.

Michael Sandel’s book was published in 2012 and was probably written therefore in 2011, if not before. Five years later and the elite still had not grasped the significance of what was happening right under their noses! The logical explanation is that they couldn’t give a shit. And now the shit has hit the fan!

One can only learn if willing to. It seems our political masters are unwilling. Their attack on democracy, for that’s what it amounts to, is a clear attempt to diminish the power of the majority. We cannot as a society, have a democracy that does not adhere to the majority vote, whether we agree with the vote or not. Let those who talk of the “tyranny of the majority” stand up and demand a dictatorship.

I appreciate that Karl Popper in his work the Open Society had a dilemma accepting a majority vote in favour of a fascist party. My response to his concern is that society should never get so low down that it is faced with such a prospect. A democratic society has failed if it reaches that stage.

In the midst of a crisis people hanker for a solution, a solution with the least trouble. The question is should people push forward in a direction of which they are unsure, full of doubt but advised to dare. Or will people be more cautious and look for something vaguely familiar or perhaps rely on the political party that appears to know what it wants and how to get everyone there. The road to fascism!

Democracy: The Only Road Forward

In the general election of 2015 in the UK, the Conservative Party polled 36.9% of the public vote and secured power as the next government. The Labour Party won 30.4% of the popular vote and is now trying to override a majority decision of 52% that voted to leave the EU.

The Scottish nationalist with 4.7% of the national vote are busy screaming in alto from the upper circle; joined by the Liberals who saw their percentage of the vote fall by a staggering 16%. The refrain of this unlikely choir is, ‘All we are saying, is let’s stay in’. They’ll still be singing as the gravy train goes rolling down the track – out of sight.

www.bbc.co.uk/news/election/2015/results

We have reached an impasse, will the political class respond positively and accept that the times are changing or must they be pushed to the wayside. Will it be the death knell of capitalism as espoused by Paul Mason and James Rickards? There is little doubt that neoliberal policies have proved a nightmare for the overwhelming majority. Those at the top end of the table had a feast out of neoliberalism. The question is are they now willing to share?

Perchance they will remain in denial as both Rickards and Mason state. If so what are the consequences? I doubt the elite can carry on much longer on their present course. The deep frustration with the elite will turn increasingly to anger which will beget activist groups taking up the cause of the people.

Such a scenario will not strengthen the elite as the use of force against these factions will break down quickly. It will not bring out the silent majority against the perpetrators. That old reliance was only solid when there was trust and most people felt good about their lifestyle. The rise of populism is a clear indication that many are genuinely feeling downtrodden.

Many of the elite may feel just as Mitt Romney does, “…inequality is the kind of thing that should be discussed quietly and privately.” J Stiglitz (p33)4  Those days I’m afraid are gone, if they ever existed outside the comfort of elite homes and country clubs.

Winter for all Seasons

According to Paul Mason (p262) quoting from a survey from the OECD that world development will be weak for the next 50 years and that inequality will rise by an estimated 40%. If these figures are anywhere near accurate then winter is going to be all year round for the poor. And if winter is all year round people are going to get mighty fed-up! Guy Fawkes might get reinvented for real.

Mason also states that the only way to keep globalization and free trade is by having the costs borne by the poor. Again if he is right – its winter! He gains support for his view from James Rickards (p227) who argues, “Yet free markets and free trade are flawed in theory, non-existent in practice.”

This assertion is proven when we look again at the practises of Apple and other conglomerates. Such businesses gain comparative advantage because their money buys more in China and the cheap labour make it a double whammy. China also gains comparative advantage by having the investment and the jobs. Who loses? The workers in America and other western nations!

Further examples are the manipulation of the Chinese currency the yuan or of their interest rates. Other nations have also made great use of the manipulation of both as well as the corporate tax which for example, is due to reduce from 28% in 2010 to 17% in the UK by 2020. Therefore there are no free markets or free trade; everything has a fix.

Nonetheless, the lack of truly free markets or trade does not spell the end of capitalism. The system has witnessed upheaval before, several times, and by hook or crook the system has mutated or morphed and we carry on. In living memory for some is the horror of the 1920s and 1930s – ‘Buddy can you spare me a dime’.

Another period of uncertainty was in 1968 when many of the young at the time believed they were on the brink of revolution particularly in France. In the USA there was the anti-Vietnam protests, civil rights, the rise of the Black Panther movement, and woman’s lib. The Prague Spring, trouble was brewing all over the world. “Many protests were a direct response to perceived injustices…”

www.en.wikipedia.org/wiki/Protests_of_1968

Most recently the 2008 financial crash has kicked many, right where it hurts. Ouch!

What is increasingly likely is turmoil in the EU. The euro () has never been stable and the single market is hurting many countries. These nations: Spain, Portugal, Greece, Ireland among their number have been on the receiving end of the slump that followed the 2008 crash. For eight (8) years they have held to the philosophy of the single market but, and it’s a big but, for how much longer.

Paul Mason (p261) argues that the EU is just one ‘political accident’ away from collapse. In this I would be in agreement with him. The self-interest of politicians from one of the nations mentioned above may be the trigger in a struggle to stay in power.  Moreover, the euro () was a political construct not a financial one and therefore weak from, GO. The bureaucracy is too big, and wields too much political power. A bureaucracy should never hold political influence; otherwise we enter the realm of Stalin.

However, any possible collapse can and should be managed. The EU needs to reinvent itself and those in power must surely be aware of the need for radical reform. The euro is but a starting point. It’s about the political class’s ability to face reality. If not – KA-POW!

Moreover, Mason and Rickards are not the first economic writers to predict the fall of capitalism. Joseph Schumpeter (1883 – 1950) had a whole school of economics named after him and prophesied the evolution of capitalism into socialism. It didn’t happen, as you are aware.

Schumpeter recognised that capitalism adapted and adopted but felt that the very nature of the system and the changes it goes through would cause its mutation.  Schumpeter  termed it ‘creative destruction’ thus the process of regular change and the growth of multinationals and management teams would stymie the entrepreneur, as a result  the system  would lose its dynamism and, the bureaucracy and the State would play a greater part in the new socialist world.

Of course others preceded Schumpeter. We can look back to Marx and Engels, to the world of Lenin and Trotsky, to Mao and the likes of Ho Chi Minh. With the exclusion of Marx and Engels, the other attempts at the promised land directed by the state from the centre came crashing down. The failure in all these enterprises was the insistence on ‘democratic centralism’ – basically the central committee told everyone what to do. It was the vision of the Politburo or nothing.

The other side of the coin of failure was trying to control development and trade in a predominately capitalist world. In essence they could not compete which forced their leaders to become increasingly totalitarian. And as usual the workers paid the price!

Market Economy?

Nonetheless, the state has a role in the capitalist system. Neoliberalism may want a minimalist state but we’ve never heard the big boys moan when regularly bailed out. In every economic downturn or crash as in 1929 and 2008 the state stepped in with tax payers’ money to prevent the catastrophe that would have followed in consequence.

Ha-Joon Chang (p456)5 is adamant that the state has a crucial role and may even be critical in maintaining a society for the public good. “The economy is much bigger than the market. We will not be able to build a good economy-or a good society-unless we look at the vast expanse beyond the market.” He cites Herbert Simon of the Behaviourist School, that 80% of economic activity happens inside organizations not in the market. (p159)

So what can the state do to help rebuild our broken economy? Many jobs can be created by investment especially by improving infrastructure: build more and better roads etc. Even Donald Trump threatens to help America get going again by infrastructure programmes.   

Retreat is another way to help our economy, retreat to the Bretton Woods agreement of July 1944 and claw back the free rein given to the banking sector through deregulation by Reagan, Bush and Clinton. Perhaps there’s a need for another clever intervention as with the New Deal 1933-1938 which held back the growing tide of anger at the depth and extent of poverty at the time. Of course the economy really took off with the Second World War but I’m not advocating a third.

The Bretton Woods agreement was an attempt to bring lasting stability to the world economy, and it worked until dismantled. The team which drafted the programme described the world of finance as “…a casino instead of a driver of economic well-being.” Rodrik (p97)6 Rodrik (p111) after examining a lot of evidence, stated, “The inevitable conclusion is that financial globalization has failed us.”  

Trade globalization can also be restricted and more power shifted to domestic governments. Let’s leave it to economist Ha-Joon Chang (p446) to lay down the case for a rethink:

“In the last three decades of hyper-globalization, economic growth has slowed down, inequality has increased, and financial crises have become far more frequent in most countries.”

Michael Sandel (p64) adds, “Economists often assume that markets do not touch or taint the goods they regulate. But this is untrue. Markets leave their mark on social norms. Often, market incentives erode or crowd out nonmarket incentives.”

Sandel argues that to put a price on everything diminishes the human interaction. He gives several examples such as the selling of kidneys and blood. Such enterprises hurt the lower class the most; it is therefore unfair, as here survival often necessitates the action. His philosophy demolishes the logic of neoliberal economists that we are all motivated by self-interest.

The trafficking of women and children for sex is a clear example. The kidnappers / sellers are self –interested as are the men who pay to use these unfortunates. But can it ever be justified? Would we or should we ever permit it as a legitimized trade transaction?

The human factor cannot be discounted from any understanding of how the world works. Money is but one example of a motivator. However, it’s also regarded as the ‘root of all evil’. Somebody knew something. Economists don’t like nouns like ‘altruism’ because they can’t quantify it and therefore can’t add it to their constructed model.

Let’s refer once again to the philosopher Michael Sandel (p130)

“Altruism, generosity, solidarity, and civic spirit are not like commodities that are depleted by use. They are more like muscles that develop and grow stronger with exercise. One of the defects of a market-driven society is that it lets these virtues languish.”

This is an area that I don’t think Mason has fully taken on board; emotion is a most powerful part of our makeup and can lead us in many directions. I’m thinking of religion and its hold over people and their decision making. Any move to socialism may be blocked, unless we let God in, because religion can be very intractable.

Obviously, the market is not all that the neoliberal /classical economists would have us believe. But is the capitalist system doomed as Mason and Rickards suggest. I have an alternative view of what is taking place. I believe it’s a war of the elites.

Clash of the Titans

Wealth creation has a direct relation with power and consequently the Middle East has become one of the richest areas on the planet. Therefore, presumably, it could become the prime powerhouse of the globe and its elite the most powerful group. Add to that scenario the emergence of China and its record breaking productivity which casts it into a power player. Then of course, we have the West, led by America.

On the outskirts of this game lies Russia, rejected by the elite of the West because Putin won’t play ball by the set rules. Putin cannot be trusted to conform to the big picture. So, Russia gets up to as much mischief as it can in an attempt to be heard and still retain some credibility as a big player.

So here we have it, three main players at the table and an outcast screeching on a bench nearby. The Middle East has vast wealth and can turn on a tap to get as much as it wants. China has been accumulating significant wealth over the last few decades and can screw its people for more if needed – bang goes their saving plans.

The West has a fair back up but needed a whole lot more, hence the rape of the poor. It needed to replenish the coffers to make the banker feel good. But the West had an ace up its sleeve; it could cause big trouble in little China and particularly in the Middle East.

War! The Iraq war was only partially about oil and more about destabilizing the region. The Arab world was then encouraged to turn against each other. In Libya, under the guise of introducing democracy the West invaded – the nation is still torn apart. A similar ploy was utilized in Syria. For generations the different brothers of Islam, Shiite and Sunni lived in calm cohesion, now there is nothing but killing of their brothers.

 China has built a powerful industrial base but this has been on the back of Western capital. The multinationals can at any time transfer their allegiance back to their home nation leaving China with a major industrial wasteland.

It may seem that the West have the resource to come out on top. Perhaps, but the rise of populism has taken the gloss off their cosy abode, unless they come up with something new damp and rot will set in and they could lose any advantage.

Therefore the contention is that the world is in trouble because the elites are at war. Once this battle is resolved it will be back to business. Thus capitalism is not falling apart; it is being used by the elites to fight their respective corner.

There is so much more to this theory: industrial espionage, the deliberate interference on manufacturing of products. In this war some industrial giants are being forced to recall damaged goods which have been sabotaged, costing them $ millions. It’s nasty out there!

Notwithstanding, neoliberalism has proven a disaster movie: the steadfast, independent and strong individual (read – elites) have fought off the greedy bandits’ (read –poor) and secured world domination. Not quite! Ordinary Joe is back with a new army armed with the knowledge that:

·         Financial globalization has failed

·         Trade globalization has failed

·         That inequality has greatly increased.

The people want a better managed, more fair, more decent society than the ‘grab what you can mentality’ of the present system. Citizens want a ‘civic spirit’; they want to flex those ‘muscles’ to strengthen the positive values to take us forward. The people want a fair share of the goods they help produce.

So we are getting close to the crossroads, there will be change but I don’t think it will be revolutionary, it will be a while yet before the end to the capitalist system. Capitalism will not meld or morph into socialism; we are simply not ready intellectually for that stage of development. How damned unfortunate!

Instead governments will spend as Keynes advised. They will also introduce a degree of protectionism while continuing to promote free trade. Currency, corporate tax and interest rates will be manipulated. The financial world will be regulated as before. This will be a period of stabilizing the economy. Government investment will become a crucial element in future development.

Much may be determined by the political class. Whether they have the nous to change, the strength of will, the character, and a sense of civic duty. Or will they besmirch the aspirations of the people and cry foul as have British politicians over the Brexit vote.

We move on, perhaps a tad slower than before but hopefully happier.

1.       Paul Mason        POSTCAPITALISM A Guide to our Future.

2.       James Rickards The Road to Ruin

3.       Michael Sandel                 What Money Can’t Buy

4.       J.E.Stiglitz            The Price of Inequality

5.       Ha-Joon Chang Economics: The User’s Guide

6.       Dani Rodrik         The Globalization Paradox

 

Populism: Let’s Celebrate?

 

Robber Barons

Robber Barons

Populism arises from the dissatisfaction of the people at the back end of the train. It’s a long train. We have all participated in the building of society therefore we should all share in the benefits. It is not a case of envy but of right. The popular vote is a warning salvo; a means to give a good shake to the elite and political class. Will the gruesome twosome listen or will the people have to push harder. Time will tell!

Decisions have to be taken by the political class as to how the river will meander. Politicians have to understand that the people want a decent life with as little hassle as is possible. They want more transparency from the state. They also want easy access, to what might be defined as everyday things. They want their children to have better prospects than they experience, therefore social mobility is crucial.

Moreover, the demands of the poor are not an attempt at robbery, nor is it about taxing the rich till they bleed. However, the wealthy may like to pay the full tax they should. And if the State has to come and get the tax, let there be stiff penalties. There is little thought at the moment of the guillotine being wheeled out but there is an anger borne of frustration of the daily grinding of the millwheel but having barely a crust to eat.

Populism is just one consequence of inequality. A whole economic argument has been written by J.E. Stiglitz, The Price of Inequality. He like others, Ha-Joon Chang* and Paul Krugman* have highlighted the growing disparity since the 1980s. As the latter states, “… the income of the typical family grew much less after 1980 than before”. While Chang and others suggest that inequality creates barriers to economic growth by restricting social mobility.*Chang, Economics: The User’s Guide (p320)

*Krugman, End This Depression NOW (p73)

child from the streetsBy not mobilizing the 80% who don’t get a fair shot at a top class education we fail, we fail because we don’t know what talent awaits discovery. We fail because many poorly educated end up in prison. We fail because we have failed to listen and failed to act.

 

The experience of the poor throughout the world has led to a mountain of distrust. Therefore an initial step for the political class is to give clear indications that this rift will be healed. I accept that this will be difficult for career politicians whose hand has never been far from the till. Such characters must be weeded out. Perhaps we need to think in terms of a fixed term for holding office, say 15 years after which they must stand down?

I can well understand why the ‘gruesome twosome’ have misgivings about populism. They may well concur with the view, “… while a wing of scholarship in political science contends that populist mass movements are irrational and introduce instability into the political process”. www.en.wikipedia.org/wiki/Populism

There may be a tad of logic in that opinion but only in that such ‘irrational’ behaviour and ‘instability’ upset the status quo. And if the status quo is upset what was the underlining cause? Obviously the system has gone skew-whiff. Who would have made it so? I suggest the ‘gruesome twosome’ ask the mirror. A question on the political bias of the writers also needs to be asked.

Notwithstanding, the wealthy may hide behind the notion of the ‘ideas man’ that as they thought of the idea or solution ergo they should reap their just dessert. However, in discussing such a scenario Ralph Waldo Emerson (1803-1882)* adds some thinking to that weak logic when suggesting a clearer view of events.

The scenario:

people need to get their goods from point A to point B so a businessman came up with the idea of a railway but before the businessman could stash the cash, Emerson restrains him by reminding him, “The human race has gone out before him, sunk the hills, filled the hollows, and bridged the rivers”. Ergo!

*Emerson Representative Men 1850 – published in English Critical Essays, Edmund D. Jones (ed:) p459

The Scam!

The term rip-off looms large in the thinking of the general populace. It seems that everywhere they look Fagan is in the shadows. Ben Goldacre, Bad Science (p208) illustrates this with an incidence in the pharmaceutical industry concerning SSRI drugs, an antidepressant. He tells us that the data from the trials of the drugs was purposely delayed, being issued much later than expected. When the trials were issued data that suggested that the drug might be dangerous was hidden deep in the blurb. Also buried was data that suggested it was no better than placebo.

Another fleecing example comes from an unusual source the crime novelist Michael Connelly.* The character Micky Haller explains to his daughter about the sheer number of foreclosures in the housing market as a result of the 2008 financial crisis:

“These lenders all want their money back and so some of them do bad things and some of them hire people to do bad things. They lie and cheat and they take away people’s houses without doing it fairly or under the law”.

*Connelly, The Fifth Witness (p65) Good read.

Hence, one might start to grasp the sense of betrayal building in the gut of thethHCBKO3M8 people. Unsurprisingly, many feel used and abused. These incidents in the pharmaceutical industry and the sub-prime scandal demonstrate a considerable degree of contempt by the wealthy against society.

Moreover, the propaganda or spin lays the weight of the blame on the people themselves or the most deprived sections of society. It’s all the fault of the workshy or those fiddling social security payments.

Thus there seems little room for engagement as the ‘gruesome twosome’ appear entrenched in their attitude. However, if contempt is allowed to fester the democratic route to righting wrongs may hit a serious buffer. The big boys who find themselves in the first class carriage need to reflect long and hard on the way forward, and find an avenue towards a just society. The answer is out there!

I will happily direct them to some good reading material. Bryan Magee, Popper (p78) highlights Karl Popper’s view of a good democracy, “… free institutions, especially those which enable the ruled to effectively criticize their rulers and to change them without bloodshed”.

Another philosopher Michael Sandel, Justice (p266) adds a crisp point, “Too great a gap between rich and poor undermines the solidarity that democratic citizenship requires”. Now that’s a piece of craftsmanship. In essence a better distribution of the wealth that is generated can help keep the peace.

The question is, can on old dog learn a new trick? Mitt Romney a presidential candidate in 2012 suggested that the poor suffer from ‘envy’. Chang (p318) Of course the people rejected him; little surprise there. Romney just doesn’t get it, perhaps an illustration from the consummate thinker Ralph Waldo Emerson might help to enlighten him and others of his ilk.

While discussing the genius of Shakespeare, Emerson explores the reality, “In point of fact, it appears that Shakespeare did owe debts in all directions,…”. He cites the contribution of Malone and others past and present. And as John Donne said much earlier, 1624 “No man is an island”.

Nonetheless, as evidence of their righteousness the wealthy cite the fact that the majority of economists believe in individualism of the libertarian (republican) belief. That a nation should be based economically as a minimalist state, that the state should not pass any policy without consulting all the people. The state did, the people elected Trump! Happy?!

Furthermore, the concept of individualism is so tempting; we like to think of ourselves as special. But if we can grasp the significance of what Ralph Waldo Emerson is saying then we can recognise that in the social environment (not biological) we do not stand alone but are reliant on many others.

This body of economists also put forward the idea that all consumers are rational shoppers. Poppycock! The argument that shoppers are rational stems from a badly constructed model. There are numerous restrictions and ploys which come into play concerning shopping:

  • Education level
  • Income level
  • The £/$ billions spent on advertising by all industry
  • Sales, special deals, Black Friday, January sales. Fashion

Anyone who looks at the annual fashion splurge has to admit that there’s nothing rational about shoppers. The extent of consumer debt aided by, the have plastic, will spend attitude. Businesses would have to be stupid to spend £/$ billions on advertising their goods if the shoppers could not be convinced to buy their product and not an alternative.

Many of the multinational businesses spend £/$ billions building a ‘brand’ name e.g. Nike – to convince the customer that their product is a sound buy.

Indeed, it is worrying that the ‘gruesome twosome’ and their acolytes suffer from a serious dose of groupthink. The problem with groupthink is that it is dangerous, and, so it has proved. Note what Dr Nicky Hayes* says about the condition, “… the consequences of groupthink can be disastrous”. Shall I mention the 2008 financial crisis again? Oops!  *Hayes Understand Psychology (p137)

 

th1b2fvzdtThere is a clear justification for harping on about the financial crisis (there I go again) because the same gang of economists advised governments to implement a package of measures we now call ‘austerity’. Another term for austerity is ‘CUT’! Millions of people’s lives have been affected. Youth unemployment is 25%+ in Spain, 40% in Italy, nearly 20% in France, eight years on. Eight years and people are still struggling to make ends meet.

The latter are the ‘jam’ guys but there’s nothing sweet about their troubles. This group of the population are ‘just about managing’ (JAM) to survive on their meagre income. Eight years on!

So forgive me if I have little time for these economists. Their concept of the minimalist state would have left the world in a diabolical mess following the crisis had it not been for government intervention. Francis Fukuyama* shoots from the hip when he states: “If the state did not control the richest and most powerful elites in society, the latter would appropriate and misuse the political system at everyone else’s expense”.Fukuyama Political Order and Political Decay (p56)

Governments have more to concern themselves with than an economic model. Thank goodness!

We have come a long way but not very far. If you read Robert Roberts* a sense of horror makes you ever so sad and at once angry at the extent of destitution in the UK 95 years ago. Tens of thousands of destitute souls where sent to live and work in the workhouses, a place, generally recognised as hell. It is difficult to get national figures because the poor were dealt with at the local level. *Roberts:  The Classic Slum

Today we see ourselves as more fortunate, there are no workhouses. However, destitution has not gone out of our lives. According to the Joseph Rowntree Foundationth6xovw9al there are an approximate 1.25 million destitute people in the country, 300,000 of which are children. The destitute are classified by certain measures: someone who can’t afford the basic essentials they need to eat, keep clean and stay warm and dry. www.jrf.org.uk/press/destitute-uk

 

Changes need to be made; the road to a just society cannot be allowed to rut for another 100 years! And the change must come from the elite and political class. It is incumbent upon them to show willing and to deliver in the short and long term. Let their bedtime reading include all those mentioned in this text. The philosophy of an Open Society by Karl Popper might be a good place to start, followed by Justice by Michael Sandel.

Without doubt populism can prove to be a very positive thing to have happened. We can stop, think, and reflect. We can celebrate this opportunity to get back on track – 1950s style when people felt they had a good life. What was termed the golden age. We can move forward from this juncture more determined, more realistic, more in tune with what makes a just system work. We can employ greater participation and have greater transparency. We can use our nous.

 

Elites: The Selfish Gene

thKF8B2C69

“Greed has taken over”.*

These are not my words but those of David Rubinstein (2007) who made $billions on Wall Street. He recognised the grab epidemic that had gripped the centre of finance. The selfish gene had infected just about everyone, and the infatuation with the big bucks overpowered the otherwise educated.

*Suzanne McGee – Chasing Goldman Sachs (p177)

Of course greed has long been a deadly sin and thus part of the human make up. Wherever there are winners and losers greed has been dangling its lustful bait.

Though greed and elites have been around quite a while the world has now changed significantly and the divide is much more noticeable. Ordinary Joe has become more aware of their daily grind and the comparison with those of wealth. Television, films and books help to keep them informed.

The dramatic change came with the advent of socialism, Marxism and democracy. These developments brought the growth of political parties and trade unions which have changed the dynamics by keeping people aware. Social media has a world audience that means we are neighbours in many respects.

Moreover, information on the great divide is well documented. Noam Chomsky, How the World Works deals with it by mentioning the philosophers David Hume (p129-30) and Aristotle (p209-210). Hume acknowledges that leaders are only in power as long as the people tolerate them.

Aristotle was challenged by a question on how to deal with the great divide – reduce poverty or reduce democracy. His answer was to lessen the impact of poverty, a purely logical conclusion.

It is quite obvious that if you are a part of the elite that you would chose to maintain your status. However, history teaches us that empires always fall and therefore the wise counsel of Aristotle should be heeded.

Unfortunately, greed clouds judgment.  Joseph E. Stiglitz – The Price of Inequality (p5) clarifies the great divide by pointing out that in America the top 1% gets 40% more in one week than the bottom 20% get in a year. Bloody hell! you may whisper to yourself but the worse is yet to come.

The top 0.1% in one and a half days (1.5 days) gets what the bottom 90% make in a year. Now you can scratch your head in disbelief. NO WAY you say, but. Obviously the elite is deaf to the wisdom of Aristotle (384 – 322 BC)

Francis Fukuyama – Political Order and Political Decay (p479) hits the nail on the head when he states, “In the contemporary United States, elites speak the language of liberty but are perfectly happy to settle for privilege”. The same argument can be espoused for the elite everywhere. One consequence is that the poor and poorly educated become marginalized. (p488) Further consequence flow from this reality.

Therefore, few would dispute the analysis of Suzanne McGee (p354) when she says that attitudes on Wall Street have not improved since the 2008 financial crash that battered the poor hard. The cry of the financial elite is, “me first, me foremost, and only me”.

Though the election surprises of 2016, and going into 2017 may wake the elite from their slumber. The Brexit election in the UK and the Trump victory in the presidential election may bring a wakeup call with the cockerel. Throughout Europe we are witnessing a growing dissatisfaction with the elite and their political acolytes.

Furthermore, throughout the world people are standing up and letting it be known that they are fed up with the status quo.

Protestthiec512pf

South Africa:      Since 2008 an average of 2 million people has taken to protesting annually.

Main complaint: poor services and corruption.

www.en.wikipedia.org/wiki/Protests_in_South_Africa

Venezuela:         Polls show that 75% of people are unhappy with the government of Nicolas Maduro. Massive oil reserves suggest it should be a wealthy country.

Main complaint: food shortages, power cuts and corruption.

www.bbc.co.uk/news/world-latin-america-36319877

September 2016 over 1million protest against government. NY Times suggest mainly middle class but then they can be the most dangerous.

www.en.wikipedia.org/wiki/2014%EZ%80%9316_Venezuela_protests

El Salvador:         Main complaint: Corruption – effects food shortages and poor services.

Brasil:                    April 2016 poll shows 63% don’t like the government of Dilma Rousseff. Since been ousted, her successor has faced similar protests.

Main complaint: high inflation, bad recession = prices & unemployment + corruption

www.bbc.co.uk/news/world-latin-america-35810578

Equatorial Guinea:  has one of Africa’s largest oil reserves but is one of the continents poorest. Their leader is estimated to have amassed a personal fortune of $600 million.

Around the world a better informed populace are beginning to assert their rights. Power to the people!

thXB41ZEDFCorruption

A keyword in many instances is ‘corruption’. However, corruption takes many forms, from direct bribery to filling one’s own pocket surreptitiously. Moreover, corruption is not solely attributed to developing countries. Britain was rocked by the expenses scandal when our Members of Parliament took to giving themselves handsome handouts, leaving the taxpayer to pick up the bill. Then of course, there’s the semi-legal type of corruption known as lobbying.

Interestingly, Senator Ted Cruz, who sought nomination for the republican presidential candidacy, was noted as saying, “…career politicians’ ears and wallets are open to the highest bidder”. In Texas 2015 www.theintercept.com/2015/07/30

Let me give you a handful of views on lobbying.

“…it defies belief that the banking industry’s legions of lobbyists did not have a major impact,”…on government policy. Francis Fukuyama (p481)

“In other cases, interest groups have been able to block legislation harmful to their interests”. Ibid (p486)

These groups, instead of pursuing wealth-creating economic activities, made use of the political system to extract benefits or rents for themselves”.  Mancur Olson – The Rise and Decline of Nations quoted ibid (p481)

Or it may be due to exploitative elites, typically in cahoots with the government, who block any improvement in economic condition that would threaten their power” Dani Rodrik – The Globalization Paradox  (p137) Rodrik was looking at reasons for poverty in poorer nations.

All told more than $3.2 billion was spent on lobbying in 2011 alone. The main distortion is to our political system; the main loser, our democracy” Joseph E Stiglitz (p119)

The pattern is clear, the political outcome of lobbying seldom works for the majority; as decisions are heavily influenced by interest groups. E.E.Schattschneider – The Semisovereign People   ibid (p483)

There are several other damning opinions I could add to those given but hopefully the point is made. Unfortunately, the material from which I got the quotes is not on the daily reading diet of the poor and poorly educated.

Ordinary Joe tends to rely on gut and experience, the latter a method favoured by Aristotle, to reach a conclusion. The poor may be marginalized but their brain has not ceased to work.

Dissatisfaction with the political class has grown over the decades to such an extent that, “…trust in Congress has fallen to historically low levels barely above double digits”. Ibid (p481) A similar point is made by Stiglitz (p117) that the rich have, “…become more distant from ordinary people”.

While these instances concern the American system they are readily transferable throughout the world. Perhaps, in understanding this ‘distance’ those who cannot grasp the seismic political upheaval called Brexit and the Trump victory can begin to comprehend that the ‘sleeper has awoken’!!

The Double Deal:

Backhander

Backhander

A good outline of the direct and moral corruption that is bought on a daily bases of lobbying can be read in Francis Fukuyama (p478) when he deals with ‘reciprocal altruism’. Basically, I give you a big contribution to your election fund and somewhere down the line, you do me a favour. It’s a fancy name for you scratch my back I’ll scratch yours.

We are all aware of cronyism and nepotism and as distasteful as they are, we also know that they are an apron string around our lives. Who wouldn’t help a friend or look after one of our family when times are hard? However, when a similar thing happens at the top end of business its use is to maintain status and power, and to advance wealth.

That brings us back to the catch phrase noted by Suzanne McGee (p354) “…me first, me foremost, and only me”. The actions and statements of the rich are catalogued beside all the other pieces of exhibitionism that symbolizes their contempt for the poor. These are duly noted until a jigsaw has been completed and then contempt is fired back at those in power.

The notion that the poor lap up the display of wealth and the misnomer that their anger is only a form of jealousy is so out of place. The trite use of ‘jealousy’ was a smokescreen floated by the wealthy to browbeat the poor.

I refer back to the wisdom of Aristotle that experience is a solid learning tool; and experience is what the poor collect in abundance. The machine operator knows that they are producing wealth and have become aware that their share of the proceeds is hardly enough to survive on. Hence the ostentatious flirting of the rich does not engage their jealousy but their anger.

A Learning Curve?

Unfortunately, the harsh reality is as stated by Ralph Schosstein, a banker on Wall Street, “Memories fade faster on Wall Street than on Main Street”. (McGee p383) The lure of the big buck is so enticing it’s almost irresistible. For the big boys it’s their raison d’etre. It appears that nothing much has been learned since the build up to the 2008 crash that we are still suffering from.

“A few years ago various cunning bankers were sitting around on their fat arses scratching their sweaty balls wondering how they could make themselves even more disgustingly rich….so they started looking around and they spied a vast amount of poor Americans who hadn’t been allowed loans before…” Geraint Anderson, Cityboy (p307)

Soon the world economy collapsed and we had to bail them out!

Control of the financial sector should have been exercised by the government. However, government must be free of corruption. Hm! I’m reminded of a child’s nursery rhyme – the wheels on the bus go round and round…. Lobbying all day long!

In today’s society we need the money men but they also need us. We are both sides of the coin. What they need to understand is that wealth distribution is a key element in keeping the fabric of society on a harmonious path.

Many countries throughout the world are experiencing an upsurge in people power. In the UK and the USA the people have exercised their democratic rights to let the elite know that they too want to participate in the nation’s wealth. Let’s keep it democratic!

 

Europe: Moving Politically Right?

  • Our politicians

There are fears that Europe is moving inextricably to the right in politics. The numbers voting for the parties of the right has grown. Nationalism and an increase in xenophobic

If only it was about food waste.

attacks have prompted scaremongering.  The parties of the left in politics are equally loud in protest and actions. The increase of extremism can be laid squarely at the door of politicians; they will not admit it but their poor management has brought us to this juncture.

America is also witnessing a political phenomenon. And this is where our story begins. The decision of the American administrations of Reagan, Bush and Clinton to deregulate the financial system led us directly to the banking crisis of 2008. The repeal of the 1933 Glass – Steagall Act which brought regulation to the banking sector after the great crash of 1929, lead the way. Suzanne McGee (p269). The crisis of 2008 still has us in the doldrums. Thank-you cowboy Ron!

In Europe the crisis was handled badly, made worse by our political leaders. Joseph Stiglitz (pxxv) Greece had been allowed to spend aided by Goldman Sachs bank until the bubble burst. The EU refused to bail Greece out and instead insisted that the country go cap in hand to the IMF. A political farce ensued, Dani Rodrik (p218). Panic engulfed the EU caused by political ineptitude particularly on the part of Germany.

Greece was forced to pass laws on cutting its health service, on trade union rights including collective bargaining and to cut the minimum wage to secure a bail out. Austerity, austerity the catchphrase of the neo-liberal economists had taken hold. Prune back, was the rallying call, in order to pay your debts. Believing in the ‘confidence fairy’, Paul Krugman (p200) e.g. make the markets believe that you are not being profligate and they will continue to invest. Mm, the very people who caused the crash!

Prune, hack, slice; wages, jobs, the welfare state. Prune, hack, slice, the debt man’s at the gate. That was the basic spin from our politicians. Somehow the economic mire we found ourselves in was the fault of the workers and the poor. A telling analysis of the absurdity of such a political logic is given by Krugman (p200)

“The trouble with the current situation, [2012] insisting on perpetuating suffering [austerity] isn’t the grown-up, mature thing to do. It’s both childish (…) and destructive”.

We can add the voice of Stiglitz (p76) to that analysis:

“The irony is that in the crisis that finance brings about, workers and small businesses bear the brunt of the costs”.

Income inequality has been rising since the 1980s. Ha-Joon Chang (p333). The trend is acknowledged by many economists. The trend was marked in the USA and UK who have followed the neo-liberal economic school of thinking — austerity. Thus over a sustained period ordinary people have witnessed a decline in their living standards and the failure of politicians to protect their well-being.

Dissatisfaction has been brewing, the kettle is not yet boiled, but. Wages depressed, jobs scarce at the lower end of the market, the economic crisis not yet resolved, forced cultural change with growing concerns over migration / immigration. A very large section of society is concerned by the onslaught of politically correct doctrine and worry about their culture and way of life. The negative response of politicians has many feeling that their voice is irrelevant.

In the midst of this cacophony the politicians in the UK gave themselves a pay rise. The gulf has just got wider!

The sustained barrage of political correct idioms to be learned coupled by the demeaning labels: racist, bigot, NIMBY, old and backward etc. etc. etc. leaves many feeling they are being brainwashed by New Stalinists. Having to mind your P’s and Q’s every time you speak, support their interpretation of events. Perception is everything!

A note of caution from Howard Gardner the eminent Harvard psychologist (p51);

“…emotion is often a more powerful factor in influencing our behaviour than logic”. He suggests that there are: “…more neural connections going from the limbic emotional centre to the intellectual cortex”.

With the establishment of Sharia courts in the UK and the seemingly endless mention of the rights of minorities tends to suggest that the needs of the majority have already been met. This does nothing to broker acceptance or respect. Frustration and anger builds!

On and on the assault comes with an absence of someone to turn too. No political outlet because all the recognised parties are seen to be in cahoots. There is tiredness with interest groups hogging the limelight and achieving their demands. Politicians have forgotten the wisdom of Edmund Burke: cited in Charles Handy (p103)

“ Because half a dozen grasshoppers under a fern make the field ring with their importunate clink, while thousands of cattle, repose beneath the shadow of the British oak, chew the cud and are silent, pray do not imagine that those who make the noise are the only inhabitants of the field,…”

The real danger of the present situation is that the dissatisfaction with the establishment becomes ingrained. It could make a good Shakespearian play:         Macbeth Act 1V sc.1

“Double, double toil and trouble,

Fire, burn; and, cauldron, bubble.

No surprise that the electorate, middle-left and middle-right scour the horizon for an escape route. The far-right too has quickly recognised an avenue to explore and found many alienated folk standing on the roadside.

 Germany            –              NPD (neo-Nazi???)

France                  –              National Front

Austria                  –              Freedom Party

Netherlands       –              Dutch People’s Party

Sweden              –              Sweden Democrats

Finland                 –              Finns

The list could go on but the point is made.

Much of the anger at this time is generated by the migrant crisis and once again political ineptitude rears its ugly head. However, many of the parties of the far-right are also opposed to the EU – the mammoth without ears. Some of these hard-line groups have secured up to 30% of the popular vote and together hold an approximately 33% of the seats in the European Parliament. Amazing!

www.huffingtonpost.co.uk/2014/05/26/

The crucial point here is that they don’t want to reform the EU. They want to kill it off.

In the UK voters floundered in various directions, some finding solace with Ukip, but the electoral system (first past the post) dented their enthusiasm; 4 million votes but no parliamentary seats. Others took revenge on the Liberal and Labour parties leaving the Tories with a strong hand.

In the USA the republican right are being trounced by Trump, whilst the democrats have found an alternative voice in Bernie Sanders. Why?

The story unfolds with a Sky news correspondent Tuesday March 1 2016. A question of why a woman was voting for Bernie Sanders brought an illuminating response: she said it was not about Bernie but the doors his campaign opened to a wider discussion of many important topics.

Here an articulate, grey hair, voice of reason is seeking an explanation for her feeling of alienation from political life. Her voice is echoed in multiplies of millions around the globe. For decades the political class has ambled on impervious to ordinary folk and disparaging of their concerns. They had been emboldened by the lack of an opposition.

Floundering in the political mire, ordinary Joe felt powerless. Their only source of power they believed was their vote, but all the recognised parties were proving to be equally crap. Along came the extremes and sat down beside them and brushed their powerlessness away.

I can hear echoes of Caliban:      The Tempest   scene 2 187 – 195

No more dams I’ll make for fish,

Nor fetch in firing

At requiring,

Nor scrape trenchering, nor wash a dish.

‘Ban, ‘Ban, Ca—Caliban

Has a new master. Get a new man!

Freedom, high day! High day, freedom! Freedom, high day, freedom!

 

It seems that the political class are akin to an oil tanker, nice and steady when crossing the Atlantic Ocean but slow and in need of a lot of space when it has to turn. It has to turn.

Are we adrift?

Not quite but we are getting there. There is a growing feeling of unfairness out there in the world. Fairness is a powerful psychological trait. It is so strong that it can dictate people’s thinking, tied, perhaps rigidly, to a person’s emotion.

There is a sense of tiredness with the grab society; the, me, me, me philosophy of some. And with the flashy, look at my wealth occultists.

Charles Handy (p198) puts it well, “…it is ultimately not tolerable for the many poor to live beside the fewer rich”. Jealousy? No, disgust! During the so called ‘Golden Age’ of the 50s, 60s, 70s, everyone seemed to share in the prosperity created. Since the 80s times have changed.

The trickle-down effect

Many of the working class accepted the ‘spin’ of government that by cutting taxes for the rich this money would be used to create more employment hence the new wealth would ‘trickle down’. A similar ‘spin’ is given to corporate tax reductions. This view was entrenched until, “…in the face of considerable evidence that it is untrue”. Fukuyama (p465) Further evidence can be found in: Chang (p451), Stiglitz (pp 8, 78), Rodrik (p165) and Krugman (p84).

Quid pro quo

The rich and our politicians appear more focussed on feathering their own nests than being responsible leaders. The concept of clientelism: you scratch my back and I’ll scratch yours, is very much alive in the corridors of power.

In the UK members of parliament (MPs) were able to employ their wife and offspring at the expense of the tax payer. The expenses scandal of recent years is still haunting some of them. Others have been caught doing dodgy deals.

In America clientelism is all but a business whereby interest groups give generously to a politician’s campaign for election and in return gain influence in the corridors of power. Fukuyama (p87) suggests it undermines democracy because it “…strengthens existing elites and blocks democratic accountability”.

Therefore we can see why the people feel alienated from the political system. The feeling of powerlessness is not a fleeting will-o-the-wisp experience. As Ha-Joon Chang (p106) points out, austerity governments in the Netherlands, France, and Greece were voted out in 2012 followed by Italy in 2013. It made no difference; the austerity package of the EU was nonetheless imposed.

Meanwhile, in the UK the conservative government is busy cutting away at areas of the state in the name of efficiency. Slice by slice it is cutting into the National Health Service (NHS).

Perhaps politicians should take note of the wisdom of Fukuyama (p532)

“When governments cease being accountable, they invite passive noncompliance, protest, violence, and in extreme cases, revolution”.

Abuse of power

A further hard hitting policy is the raising of the retirement age in the UK. Women had their retirement age raised from 60 to 65 in line with men. Now everyone has to put in several more years before they can escape the workhouse. The ‘spin’ by the government is that as a result of people living longer the pension bill will be much higher and needs to be offset by people working for longer.

Some women will have had their work life extended by up to 10 years. How much is the government saving by that little manoeuver??

The true implication is that successive governments have sanctimoniously mismanaged the economy. For 50 years many have paid income tax and national insurance tax and god knows how many other taxes and now when retirement looms they are a burden. Shame!!

This is an abuse of power as it leaves large numbers of people feeling anxiety and guilt. It only affects the workers as the better off have the means and can decide when they want to retire. No such luxury for the less well off.

Thus we have the rise of the Tea Party in America and Donald Trump viewed as a saviour. In Europe the rise of the far-right and extreme left. In the UK we have Ukip on the centre right whilst the far-left are still sucking their dummies and waiting for the resurrection of Trotsky.

A few more words of wisdom for our shamelessly needy politicians – from the 17th century

“…government should benefit the people, not those in power”. Wang Fuzhi       www.en.wikipedia.org/wiki/Wang_Fuzhi

Karl Popper adds his voice: we need an open society; “…in which the political institutions can be changed by the governed”.

Do some good join Robin Hood!

 

Suzanne McGee                               Chasing Goldman Sachs

Joseph Stiglitz                    The Price of Inequality

Dani Rodrik                         The Globalization Paradox

Paul Krugman                    End This Depression Now

Howard Gardener           Multiple Intelligences: The Theory in Practice

Ha-Joon Chang                  Economics: The User’s Guide

Charles Handy                   The Hungry Spirit

Francis Fukuyama            Political Order and Political Decay

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe: No Highs.

 

Unity???

Unity???

As we spiral towards a referendum in June 2016 watch out for the spin of verbosity. It’s butter-up time at the polls. You will be near deafened by the bald tales from either side. Who has the correct answer about Europe, the stay- put brigade or the opt- out gang?

It should be obvious that big business, multinationals will favour the UK remaining in the embrace of the EU. It serves their business purpose. If Europe did not meet their needs they would be seen leading the charge to leave.

We are bound to hear stories of dire consequences, for jobs, livelihoods and a whole

Talking EU

Talking EU

gambit of other ghouls that awaits us if we depart. There will be ghosts in every unlocked cupboard which will become increasingly terrifying as we get closer to election day.

Nationalism will be bandied around like a worn tennis ball. Only Putin will be happy if we leave! However, an exit will not affect the sanctions that the EU has imposed on Russia over the Ukraine crisis. It will not affect policy on Syria. It’s all a smokescreen to remind the older voter of the Cold War.

Cameron’s position is weak because he gained only crumbs from the EU table. Did he expect anything else? Time will show that the ‘gains’ are meaningless. His cause has only brought about a poorly constructed but definite political grave.

There was no mention of structural change because it would not have reached the table for discussion. No matter that the time frame was too tight, with insufficient space for major issues to be studied and debated. Why the rush? He locked himself in a cupboard by advocating a referendum and, viewing public opinion knew he had to put his skates on.

Being kind I would say that the rush to the polls was bad advice from his advisors. If real change had been on Cameron’s agenda he would have taken his time; we have until 2020 to get a response. So why didn’t we ask for more? The answer is sky- blue; he knew it would not be negotiable.

Look closely at what the Prime Minister brought home and this tells us that the EU has no intention to change. We can have a few crumbs if we close the door behind us and shut up. The electorate has been played, duped and now we need to be herded quickly before we understand.

The EU can only survive with fundamental structural reform. It has been floundering since conception. The euro was another massive mistake. Europe is still recovering from the 2008 banking crisis; it will take several more years to swim clear.

thGUA278IXA lack of an audit and the continual escalation of spend is a sky-blue indication that the whole bureaucratic system has no direction and no leadership. It is a growing giant of an octopus. It will fail and the cost of life support will be huge.

Many leading economists had grave reservations about the introduction of the euro and misgivings about its future. Paul Krugman describes it as Europe’s big delusion (pp177-187) and a mistake from the beginning (p168) Krugman argues that it lacked a central focus such as the US Federal Reserve or the Bank of England. The European Central Bank (ECB) basically followed German thinking.

He illustrates how the euro and the ECB directly affected the countries of: Spain, Ireland, Portugal and Greece driving them deeper into recession. The policy of austerity was foisted on them. It would take seven (7) years before the ECB accepted quantitative easing (printing money to buy debt) and poured 3.2bn euros to support them.

Joseph Stiglitz another Nobel Prize winning economist lays austerity bare when he states,”…there has been almost no instances of countries that have recovered from a crisis through austerity”. (pxxv) Dani Rodrik yet another top economist has much to say on the experience of Argentina and its austerity programme. (Chapter 9 pp184-206) It was a disaster!

In essence the EU has caused many of its own problems rushing forward politically without thought of consequence. It is plagued by indecision and a thought process which operates on the basis of – what’s in it for me- (WIIFM)

The EU apparatus is divorced from the citizenry. The people don’t matter. The WIIFM syndrome is illustrative of its political absurdity. There is no unity of purpose, only agendas. Rodrik (p215) is scathing, “European Parliament operates mostly as a talking shop rather than as a source of legislative initiative or oversight”.

Such being the case gives lobbyists an open door. Francis Fukuyama (pp501-502) points to a quirk, he terms ‘jurisdiction-shop’. It works on the basis that if unsuccessful at their national level lobbyists simply pack their briefcase and head for Brussels. He cites the work of political scientist Christine Mahoney who suggests that ‘outside groups’ those seeking social change have ‘significantly less access to European Institutions’.

To further illustrate the lack of unity Rodrik (p218) is unequivocal when he says that when the EU comes under stress ‘the responses are overwhelmingly national’. The migrant crisis we are presently experiencing is a sky-blue example of such a scenario.

Europe is not for turning!! Unless it is prepared to, we must jump ship!!

 

  • Paul Krugman    End This Depression Now!
  • Joseph Stiglitz    The Price of Inequality.
  • Dani Rodrik         The Globalization Paradox
  • Francis Fukuyama            Political Order and Political Decay