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Friday, 26 August 2016

Nationalise This

Jeremy Corbyn's travails on the Train to Newcastle (aka #traingate) have pushed the question of rail privatisation back onto the political agenda. Predictably, the media have fallen over themselves to hold this up as either evidence of his unfitness for office or as a foolish whimsy that no sane person would contemplate. Being thoroughly bored by the issue - not least because popular opinion hardly needs convincing of the case for nationalisation and the damage to Richard Branson's business interests is negligible - I thought it might be more interesting to first look at the case for nationalisation elsewhere. Rather than adopt a socialist justification, i.e. that the means of production, distribution and exchange should be commonly owned for ethical reasons, I'd like to make the case for three nationalisations on purely pragmatic grounds: what is most efficient and effective.

First up is car insurance. You cannot legally drive without insurance, so you do not have the option to not buy, i.e. to decline to enter the market, which is supposedly a characteristic of free enterprise. This means that car insurance cannot be presented as a preference: a choice that demotes other potential expenditures based on the utility that accrues to the individual consumer. Given that you must enter the market under duress, the advertising and management overheads entailed in convincing you to choose insurer A over insurer B (or market comparison site A over market comparison site B) are largely waste. They do not grow the total market or persuade consumers to substitute car insurance for apples or golf clubs. They merely distribute a fixed revenue between different suppliers.

Premiums must reflect the ratio of possible claims to pool value (i.e. the sum of all premiums). The lowest ratio comes with the largest possible pool (this is simply maths), so premiums for a single national scheme would be lower, ceteris paribus, than two or more private schemes across the same population. A single national pool would have lower overheads, not just due to reduced expenditure on advertising but because of management and administrative efficiencies - i.e. scale effects. The argument that a public body would be less efficient than private provision is ideological and depends on both the theoretical incentive power of consumer market exit (which is not possible if insurance is mandatory) and the belief that supplier competition will reduce overheads, despite these ultimately reflecting pool size.

The second candidate for nationalisation is pharmaceuticals. This is not a free market today, if only because the state sets priorities for drug development through public health policy, IP licensing and the law. In a truly free market, improved strains of cocaine would be an R&D priority, simply because these would produce larger profits for pharmaceutical companies than a vaccine for the Zika virus. Having seen the poor job that incentives do in encouraging research in areas that the state prioritises (e.g. antibiotics vs chronic drugs), the state is increasingly demanding of the pharma sector (e.g. the recent UK O'Neill Commission) and may even become coercive. While the history of Big Pharma has obviously centred on large private firms, it is worth remembering that most of these have worked hand in glove with the state, both in terms of R&D (e.g. exploiting academic labs) and securing sweetheart deals for national monopolies or (in the UK) NHS supply.

The conflict between the common good and privilege is gradually leading to a distinction between "societal drugs" and "consumer drugs": vaccines for children on the one hand, expensive cancer treatments on the other. What is likely to happen is not that Pharma as a whole will be nationalised but only that part of R&D dealing with "societal drugs" - i.e. the high-cost, high-risk element that business might be happy to avoid. The manufacture of societal drugs might still be outsourced to Big Pharma, essentially through the issue of "patents" in the original sense of that word, but the falling cost of drug manufacture means that production would probably shift to developing nations, which is where we're also likely to see the manufacture of "legal highs". The boundary between licit and illicit will become ever vaguer, with Big Pharma increasingly pushing that boundary to increase profits.

The third candidate for nationalisation (and returning us to where we started) is transport. Those who demand the nationalisation of the railways are too modest in their ambitions, not least because they forget that the road network is already 99% nationalised (there are very few private toll roads). Privatised transport "services" are essentially parasitical businesses that make use of public infrastructure, from airlines that depend on a commonly-managed airspace to bus companies that gripe about road tax. While it is possible to present car-hire (whether black cabs or Uber) as a genuine market - i.e. as opposed to a de facto monopoly in which winning contracts, rather than service delivery, is the road to profit - this can only be done by ignoring the public subsidy represented by roads and traffic lights.

The argument for nationalising the railways is not that this will necessarily lead to less overcrowding, cheaper fares and better sandwiches, but that transport is a public good and should be managed to maximise public benefit. This means getting rid of first class carriages (whch increase profit per traveller at the expense of reduced traveller numbers), simplifying fares and advance booking (a major bugbear of passengers), and binning all the corporate branding, affiliate marketing and other bollocks that taints the experience of getting from one place to another. It also means rehumanising the experience of rail travel in the UK, which is less about designating "quiet carriages" or apologising for delays and more about not treating people like cattle.

Despite all the media fluff about Corbyn's supposed hypocrisy and Branson's cheek, what stood out in the video of the Labour leader sitting rather forlornly on the floor while reading a copy of Private Eye was how typical this vignette was of the routine humiliation that all passengers are faced with unless they pay a premium for a reserved seat or a first class ticket. We seem to have become inured to this over recent years, treating an uncomfortable and often unpleasant experience, for which we pay a lot of money both directly and indirectly, as if it were a form of penance or an unavoidable tax (like car insurance). Ending the humiliation is as good an argument for returning the railways to public ownership as I can think of, so perhaps the case is finally more ethical than pragmatic.

 

Sunday, 21 August 2016

Spivs and Snake Oil

In Britain, the archetypal dodgy-dealer is the spiv. When Nigel Farage recently grew his demob 'tache, many immediately noted his resemblance to Private Walker of Dad's Army, which was a reflection of the former UKIP leader's casual relationship with the truth as much as his antique style. Despite the historical spiv barely surviving the 1940s, the type has lived on in both popular culture (Flash Harry, Arthur Daley, Del Boy Trotter) and the economy (Philip Green and Dominic Chappell are two ends of the character spectrum). Though some rightwing social historians have tried to explain the spiv's popularity as a proto-Thatcherite - an entrepreneur bypassing the dead hand of the state and creating an efficient market - his lasting fascination arises from the ambiguity of social mobility (i.e. class) and sartorial codes. The spiv's fondness for silk ties, sharp suits and the ubiquitous covert (or Crombie) coat subverted traditional cues about social station and would go on to influence teddy boys, mods and skinheads. Farage's fondness for the covert coat established him as a spiv years ago.


The 1940s American equivalent of the spiv's attire was the zoot suit, but while this was often associated with black or Hispanic criminal gang members, they were not seen as archetypal dodgy-dealers, not least because they were deemed by the white majority to lack verbal articulacy (the scat-singing of the zoot-suited Jazz musician can be seen as an ironic satire of this prejudice). The more common figure of the dodgy-dealer in US culture was the snake oil salesman - usually Anglo-Saxon and always fluent - whose sartorial flamboyance was unlikely to extend beyond a waistcoat of the sort once favoured by Mississippi steamboat gamblers. Indeed, many would adopt relatively sober attire, seeking to echo the plain dress and plausibility of the preacher or the doctor. What this distinction highlights is that the dominant semiotic channel in British politics is visual and the subtext concerns class (remember Michael Foot's coat), while that of America is linguistic and the subtext concerns race (Trump owes his success this year to insulting Mexicans and Muslims).

I'm highlighting this distinction because it helps illuminate a recent slew of articles by US liberal commentators asking: what's Trump's game? The suggested answer, stimulating both pearl-clutching horror and squeals of delight, is that the Republican Party's official candidate is more interested in furthering his media career than in gaining the keys to the White House. The idea was originally floated back in June by Sarah Ellison in Vanity Fair: "Trump is indeed considering creating his own media business, built on the audience that has supported him thus far in his bid to become the next president of the United States". This analysis included a get-out clause to head off obvious doubts: "launching a cable channel is 'nuts' because of the limited spectrum available, the declining advertising rates, and the immense start-up costs and resources required". Of course, for brand Trump these are details that someone else must worry about.

The Donald's recent turn to Stephen Bannon of Breitbart News to run his campaign, and his apparent dalliance with Roger Ailes, the disgraced former CEO of Fox News, has stimulated even more claims that his real purpose is 24-hour rolling Trumpery, though this is clearly driven in part by the happy daydream of an assault on Rupert Murdoch that would damage them both. According to John Cassidy of The New Yorker, "he's laying the groundwork for a new conservative media empire to challenge Fox". Cassidy also suggests that simple cupidity drives the man: "Trump resents the fact that he has helped raise the ratings of certain news organizations, such as CNN, without getting a cut of the additional revenues". This "explainer" (which has little evidence to back it up) works because it taps into the longstanding American liberal distaste for the populist: the smooth-talking con man who gulls the small town "hicks". The traditional story ends in one of two ways: the bogus claims are seen through following liberal intervention ("howdy, Doc") or the huckster's avarice sees him bought off or tempted into a fatal error.

The idea that rightwing "movement" politics in the US is essentially an unscrupulous business, selling snake oil to "suckers" and pandering to rich bigots like the Koch brothers, has supporters across the political spectrum, from conservatives like David Frum bemoaning the corruption of thinktanks, through liberals like Paul Krugman joining the dots to the Republican Party, to Marxists analysing the political economy of the direct mail industry. While there is substance to the claim (reactionaries distrust evidence, value faith and admire "inside information" as a benign form of conspiracy), it can easily segue into the contempt for "the crowd" that is traditionally found in the liberal appetite for prurient tales of venality and hypocrisy (not to mention vulgarity and sex) among evangelicals, from Elmer Gantry to Jim and Tammy Faye Bakker. In the case of Trump, the belief that his goal is financial betrays a fear that he won't be "found out", that even his insulting of a dead military hero won't be enough to alienate the crowd, essentially because the word "Muslim" is enough to get him off the hook with his constituency.

The media empire trope also reveals a liberal worry that Trump's personal unsuitability for the highest office reflects a more general drift towards triviality and self-indulgence in US politics, which is at root a conservative critique of decadence. For Neal Gabler in The New York Times, "The shift is from politics to grabbing attention, and, quite possibly, from winning the election to winning the defeat, which is how he has spent practically his entire career". But it's not just Trump: "Mike Huckabee used the attention he got in his losing campaign to land a gig on the Fox News Channel. Sarah Palin used hers to get a reality show and enormous speaking fees. Ben Carson used his to sell books". The dog that didn't bark here is the unease over Hillary Clinton's leverage of her stint as Secretary of State (her consolation for losing to Obama in the 2008 primaries) to pull in speaker fees from the likes of Goldman Sachs, not to mention the longer history of the Clinton Foundation in securing largesse.

There is also a sense among neoliberals that just as Trump is an impostor as a politician, he is also an impostor as a businessman. Matt Yglesias in Vox outlines this critique. On the political, "A Trump campaign that exists entirely as an extension of Trump’s persona is unlikely to win, but it’s at least a viable product. An actual Trump administration that tried to function this way would be a disaster". In the economic realm Yglesias notes that "Trump isn’t really a businessman in the conventional sense anymore, and hasn’t been for some time. He’s a television star ... a person who’s famous primarily for being famous". What is being pointed to here is a general lack of managerial ability, which is ironic given that the recent flurry of think-pieces insisting this is a media play was triggered by his firing and hiring of senior campaign management figures, which is at least decisive. If you dismiss managerial competence altogether, then Trump's success can only be explained as dumb luck.

One of the few commentators to spot that this is more about liberal bad faith than Trump as an individual, or the institutional contradictions of the Republican Party, is Gwynn Guilford at Quartz: "there’s the hint of smug delight that Trump’s supporters have basically been swindled by a con man. That’s a cue to dismiss his millions of supporters as angry nativist losers who prefer bigotry to policy - PT Barnum-certified suckers incapable of voting in their own interest". She also rightly notes that the media play story allows some uncomfortable questions to be ignored: "These Trump masterplan narratives feel compelling to people who can’t accept that, for all his faults, Trump stands for something important. His success reveals that many Americans feel their democracy long ago stopped representing their interests". If Trump isn't an evil genius, then his success is down to the failing of others, and that spreads far beyond the Republican Party.


Nigel Farage never managed to get elected to Parliament. While he fulfilled a political role - normalising xenophobia and providing a populist interpretation of euroscepticism - he was never personally trusted and nor was he assumed to be managerially competent. He is a spiv and spivs don't tend to get elected (Grant Shapps is an exception). Snake oil salesmen do get elected (e.g. Joe McCarthy) because they trade in hope and fear. The liberal cry - "Trump's only in it for the money" - suggests a lack of confidence in the people's ability to see through him, which reflects a prejudice about the prevalence of racial bigotry and stupidity among the white working class. The inadvertent nature of Trump's success (that he expected to lose the primary but lose well enough to further his media career) was thrown into relief by the Brexit vote, which has been widely interpreted as a media campaign that got out of hand. In the UK, the spiv has scarpered in the aftermath, which is what spivs do. In the US, the snake oil salesman will only leave town either in ignominy or on the next coach with a pay-off. It sounds like liberals are hoping for the latter, which doesn't reflect well on their own pitch.

Monday, 15 August 2016

Marriage Guidance

One meta-narrative in politics at the moment is the idea that there is a reconfiguration underway between liberalism and authoritarianism. David Edgar laid this out in the British context: "Conservatism used to be an often uneasy compound of Tory social paternalism and anti-statist economic liberalism; while on the left, an alliance between progressive social liberalism and egalitarianism created the best of postwar Britain, from the welfare state to the social reforms of the 1960s and 1970s". In other words, both left and right were each an uneasy marriage between liberal and authoritarian impulses in which the binding was largely down to the congruence of class interests. On the left, organised labour found common cause with middle class progressives who benefited from the expansion of the welfare state. On the right, economically liberal capitalists found common cause with conservative rentiers and working class Tories obsessed with hierarchy and security.

What the meta-narrative suggests is a realignment in which the two liberal strands increasingly combine in opposition to the two authoritarian strands. As Edgar puts it, "The new fault line splits both alliances in half: allying economic with social liberalism (the coalition that brought you the coalition) on the one side, and economic intervention with social conservatism on the other. As a result, an ever-deepening wedge now divides Labour’s aspirational, liberal, globalised wing from its traditional base. Although good news for the Conservative party, this is best for the populist right, which has rushed to fill the vacuum created". This isn't a new narrative - it underpins much of the Blue Labour and Red Tory guff since 2008 and the various attempts to define a "post-liberalism", not to mention the "UKIP will take the North" trope - but it has a particular salience in the Brexit era because economic nationalism is back on the table along with pessimism about the persistence of xenophobia and other nasty working class habits.

In fact, this fluidity goes back to the 70s when, to pick a topical example, euroscepticism was found mainly on the left as a defence of economic unilateralism. In the 80s it moved to the centre as a liberal response to the perceived drift towards a more socialist Europe under the influence of Jacques Delors (many anti-EU parties, such as UKIP and AfD, started out not on the authoritarian right but in the centre) before being colonised by the traditional nationalist right, ironically after the UK's success in advancing the single market and EU expansion at the expense of "social Europe". Instead of being a defence against globalisation and neoliberalism as many hoped, the EU has come to be seen as the facilitator of those very same forces, which explains popular French euroscepticism (even though the FN has no intention of advancing workers' rights or promoting solidarity, it has been able to exploit this disillusion). In fact, we have been living through an era of ideological confusion for almost 50 years. This "realignment" is simply modernity.


Neoliberalism started combining economic and social liberalism in the early-90s, building on the freedom trope of the 80s. As Flipchart Rick notes of the years since, a paradox is that "this period saw a victory for the social liberalism of the left and the economic liberalism of the right. The trouble is, most voters were never really that keen on either". However, it is worth remembering how Bill Clinton's Democrats and Tony Blair's New Labour were only too happy to indulge authoritarian policies, from military intervention through incarceration to state surveillance, which is why their Republican and Tory successors offered dreams (shrink the state, hug a husky) and then delivered government programmes that were more of the same plus tax cuts for the rich. For many among the working class, McJobs and precarity didn't look like economic liberalism so much as the exploitative practices of classic laissez faire, while social liberalism looked like a glorification of middle-class values: gay marriage but not the decriminalisation of drugs. As with many things, the economic plus social liberal combo was more apparent in the metropolis than the country at large.

Insofar as the binding on the left has frayed, it is largely due to the failure of neoliberalism to satisfy the working class priorities of housing, wages and job security. New Labour sought to advance the interests of vocal fractions of the working class, such as those who could afford mortgages or secure mobility via further education, but this simply pointed up the contrast with the less vocal "left behinds". The marriage on the right has held up better, essentially because the affair that liberal capitalists had with New Labour has run its course (the PLP revolt reeks of the desperation of a spurned lover). The Tories can afford to move towards greater authoritarianism now simply because big capital and finance capital are both constrained post-Brexit. Taking back control is meaningless for most citizens, but it has a real meaning (as a threat) for domestic capital. The state temporarily has an enhanced degree of influence over the rules of the game and it should be obvious that some conservatives intend to use this opportunity to sculpt a more nationalistic dispensation.

We tend to underestimate the degree to which global political ideologies are influenced by nationally-specific ideologies of government and public administration. In other words, there is not a single ideology but multiple, often in contention and persisting for centuries. For example, German Ordoliberalism clearly bears the imprint of Prussian Cameralism, while French corporatism bears the imprint of Colbert and Napoleon as much as De Gaulle. Similarly, US neoliberalism owes more to Locke than Hobbes, while the reverse is true of British neoliberalism (the representative UK neoliberals were Jack Straw and Theresa May, not Gordon Brown or George Osborne). The full economic consequences of Brexit will not be known for decades, but this year clearly marks the end of the zombie neoliberalism that dates from late 2008. This does not mean that neoliberalism itself is dead, merely that it has mutated once more (Simon Wren-Lewis suggests it is intellectually weak but politically strong, though persistence is usually a sign of intellectual tenacity).

I suspect that Will Davies is right in foreseeing a shift of the efficient markets hypothesis from the realm of finance to labour (via the gig economy) and a greater emphasis on the need to sweat personal assets in the new mercantilist age ushered in by Brexit. In other words, neoliberal theory will pragmatically go with the authoritarian flow. The political consequences of the UK leaving the EU will ultimately arise from the economic, but that means we are faced with an interregnum that could last all the way up to a general election in 2020. In this period, the vacuum has initially been filled with self-conscious appeals to history that are more stylised than substantial, such as Theresa May's apparent rediscovery of Rab Butler and Owen Smith's chanelling of Nye Bevan. If Jeremy Corbyn is guilty of looking back to the 70s and 80s, it appears his opponents have even longer memories. These tributes are merely a way of buying time while the political establishment (the civil service as much as government) debates the neogotiating position it will adopt not just towards the EU but towards the various UK capitals.


The prognosis that the left is irretriveably split, that the marriage cannot survive, obviously serves a variety of interests on the political right and centre. This is why the simplistic dichotomy - the division between "Labour's aspirational, liberal, globalised wing" and its "traditional base" - is so patently false. You don't need to look far to find evidence that working class Labour voters aren't racist homophobes who overwhelmingly voted leave, while there is no shortage of evidence that its "aspirational, liberal, globalised wing" is marked by intellectual timidity and middle class bigotry. Similarly, the idea that the Tories are about to institute full-blown central planning or nationalise the railways simply because they have rehabilitated the term "industrial strategy" is delusional. This political realignment remains more an expression of centrist hope in respect of electoral representation than a reality in the economic and social spheres, and the reason for that (which I hinted at in the opening paragraph) is the power of class interests.

Historically, the political advance of the left coincided with a period when the electorate and the workforce were almost perfectly coterminus: the era of social democracy and high levels of employment. Once democracy became unavoidable after WW1, the strategy of the right was to first delay it through appeals to responsibility and then construct an anti-labour majority. Thus fear of female superficiality in the UK's "Flapper Election" of 1929 give way to an ideological emphasis on women's innate caution, financial prudence (their role as consumers antagonistic to producers) and desire for social respectability. By the 1950s, the right was obliged to augment this conservative appeal with pro-labour policies in the areas of housing, education and welfare, or risk electoral annihilation. One Nation Toryism, which is routinely invoked in the name of every new Conservative administration (even Thatcher's in 1979), remains a communitarian gloss for a reactionary and divisive politics.

The conservative revanche of the late-70s required not only the elevation of the market above planning, and the reinterpretation of liberty as financial freedom, but the promotion of management as an intrinsic good in the face of "problematic" labour. This was founded on the idea of human capital, which rebranded workers as valuable but individual resources and managers as stewards rather than exploiters. The marginalisation of the left in the 80s and 90s obviously owed a lot to the defeat of organised labour and the emergence of a professional political caste, but it also owed something to the hegemonic spread of managerialism in both the public sector and service industries. This still provides what passes for a policy platform among centrist politicians, from Labourites talking about "electability" to Democrats dissing Trump's "unfitness for office". Managerialism, not iffyness about gay marriage or a hankering for the death penalty, is the essence of authoritarianism, and that remains hegemonic across both Labour and the Conservatives.

Monday, 8 August 2016

The UK's Achilles Heel

The government's decision to delay approval of the Hinkley C project, more than speeches about inclusiveness and broad hints that austerity is now passé, proves (if proof were needed) that the EU referendum result is a watershed in British history. Though it is being presented as an issue of national security, it is clearly economic in nature. As a symbol of both EU integration (a French energy provider) and the UK's role as the leading conduit for foreign investment in Europe (Chinese money), the project was informally predicated on a remain vote, hence the political capital invested in the plan by David Cameron and George Osborne earlier in the year. Even if the final decision is still to proceed, the hesitation signals a moment of doubt, not so much over a project whose technical and economic merits are far from compelling than over the future composition of the UK economy, and that doubt involves a reconsideration of the strategic decisions taken in the early 1980s.


Trade agreements these days are less about tariffs and more about the free movement of financial capital (i.e. the facilitation of foreign direct investment, both by UK institutions abroad and by foreign institutions in the UK), intellectual capital (e.g. IP protection), and human capital (the ability of multinationals to move human resources around the world). The UK industrial sectors that generate the largest export values are business services, finance, wholesale and retail, and transportation and telecoms. It's worth emphasising that much of "retail" involves consumer services and digital products, while much of "transportation" is also consumer services, such as airlines. The export of physical goods is nowhere near dominant in the makeup of the UK's trade flows and unlikely to take up much time in Brexit negotiations (the need for specialist negotiators is a reflection of the contractual complexity of services not commodities).

This is important because the UK's post-Brexit trade deals will inevitably involve trade-offs between the interests of various sectors, most obviously the interests of the City and international business service providers versus the rest. Domestic manufacturers of export goods are likely to be marginalised (though they'll get disproportionate media coverage), but that is not necessarily a problem (some would say, what's new?). In the markets that we export to, notably Europe, import tariffs are generally not a big deal except in areas that are deemed strategically significant (for reasons of domestic politics as much as national capability, like agriculture), or where foreign exporters are deemed to be overly-aggressive in seeking market share at the expense of domestic producers. A current example would be steel, where the EU has just imposed anti-dumping tariffs on China and Russia.

Much of the UK's manufacturing export sector involves specialised equipment (machinery, high-end cars, computers etc), luxury goods, non-substitutable products (e.g. pharmaceuticals protected by patents and intellectual goods protected by copyright), or distinctive cultural products such as food and drink (e.g. biscuits, tea-bags, bottled beer). It's unlikely that British manufacturers will face punitive tariffs, but equally unlikely that the negotiation of new free trade deals with all and sundry will result in a significant boost to exports outside Europe. The UK is never going to be the workshop of the world again, because the particular economic and geopolitical circumstances that allowed this to happen in the 18th and 19th centuries no longer apply. In that sense, there is no going back to before the accelerated deindustrialisation of the 80s, even if that nostalgic desire motivated some leave voters dismayed by the loss of skilled jobs and career security.

The key decision that was taken in the Thatcher years was not the closure of the mines or steelworks but the prioritisation of London as both a financial and business services centre. This has proved to be more socially damaging than the dereliction of former pit villages, largely through the impact on housing of a deliberate policy of property leverage and the impact on wages and job security of precarious employment and deunionisation. The creation of property-backed debt, which both fuelled the economy through consumption and magnified the profits of the City, was only made possible by the abandonment of social housing. Likewise, the growth of business services has led to the capital simultaneously sucking in huge numbers of people from the rest of country (and often the most talented) and huge amounts of money from the rest of the globe (and not always the cleanest), both of which have further amplified the property market.

Though it meant little to most leave voters, London enjoyed an enviable sweet spot as both an offshore front and the dominant provider of services to European businesses, able to leverage the advantages of language and an accommodating legal system. Historically, the EEC/EU has tolerated London's role as an offshore intermediary as a quid pro quo for the wholesale services it offered continental banks (many of which moved into the City in the 80s and 90s), much as it tolerated Switzerland's banking sector as a secrecy jurisdiction at the heart of Europe. Over the last 30 years, the global flows of wealth seeking a reliable return or protection from taxation have ballooned, the product of growing inequality and super-salaries in established economies and the emergence of a new super-rich class in developing economies. With European states facing a growing welfare bill due to ageing, and a shrinking tax base due to structural unemployment and low wages, the focus has turned to increasing the tax-take from both the rich and foreign corporations.

The gradual restrictions introduced on Swiss banking through EU pressure point the way. The future threat is not that Frankfurt will suddenly eat the City's lunch or Dublin take over the business services market, though there will be plenty of noise about anything that touches on the euro or "passporting", but that the EU will seek to impose de facto capital controls (or at least "hindrances") to prevent London syphoning off monies that would otherwise generate tax revenues for EU members, and to limit the ability of foreign corporations to access the single market via London without adequate recompense. The quid pro quo being outlined in the media is access to the single market in return for the free movement of labour, but the actual deal is more likely to come down to the continuation of both (with some minor adjustments for political PR) in return for the City being tolerated as an offshore front and London as an operating platform for non-European capital.


The decision on Hinkley C is being presented as a concern over Chinese influence and specifically the fear that they might "weaponise" the plant in the future, though more in the sense of threatening electricty blackouts than a nuclear meltdown. This is hype. Not only is the Hinkley reactor being designed, built and operated by the French state-owned firms Areva and EDF, but the entailed involvement of the Chinese in a future reactor at Bradwell is years away. The UK has more to fear from its current reliance on Huawei routers in BT's datacoms network. A more credible risk is that the EU (via France) might seek to use the project as leverage during Brexit negotiations. The government's decision to delay looks like a prudent call at a time of uncertainty, but the underlying issue doesn't lie in either Somerset or Beijing but in the City of London. Brexit isn't going to turn the clock back - nothing can - but there is a clear choice ahead: economic nationalism versus the primacy of the City. Theresa May has emphasised the former, but I suspect this is merely a gesture. The EU knows the City is the UK's achilles heel.

Wednesday, 3 August 2016

A Trivial and Insidious Step

Following the recent terrorist attacks in France, various French news outlets, including Le Monde, La Croix and BFM-TV, decided to stop publicising the identities of the perpetrators in order to avoid their "posthumous glorification". This policy is limited to terrorists who claim allegiance to Daesh/ISIS, and can be read as an act of frustrated resistance in the wake of the apparent failure of the French security services to prevent recent incidents (Le Monde starts from the Hobbesian position that la première des missions que nous déléguons à l’Etat est de nous protéger). There is no suggestion that the policy will be extended to others who seek ostensibly political ends through violence, such as Anders Breivik, or those non-ideological actors motivated by revenge against perceived slights. Not the least of the miscalculations is that this "no platforming" qualitatively distinguishes jihadi terror, which is kind of fame.


The French media's resident idiot-philosope, Bernard Henri Levy, has tried to provide an intellectual foundation for this act of self-censorship. He gives three reasons: that publication makes the perpetrators "globally recognised characters in the showbusiness side of this terrorist war, thus fulfilling one of their keenest desires"; that by excavating their personal and social context, such as an unhappy childhood or a sudden radicalisation, "we are taking the shortest route to the banalisation of evil"; and finally that publication creates a copycat effect, "an invitation to vulnerable minds to follow their example and to commit similar acts". These are unoriginal, conservative justifications: the oxygen of publicity; understanding less and condemning more; and the manipulation of the ignorant by outside agitators. You may recall Margaret Thatcher making the same points in the 1980s, variously about the IRA and rioters in British cities.

They are also examples of bad faith. The "showbusiness" of Islamist terrorism has its roots in the sympathetic coverage by Western media of the Muhajideen in Afghanistan in the 1980s, which was then compounded by the "shock and awe" presentation of the two Iraq wars. A beheading is the principle of asymmetric conflict applied in the realm of video. The "banalisation of evil" is meant to evoke Hannah Arendt and the Eichmann trial, but in doing so Levy misses the point that banality does not arise from misplaced sympathy but from a lack of empathy. As Susan Neiman says about Arendt's analysis (quoted by Corey Robin), "Contemporary dangers begin with trivial and insidious steps". As for the invocation of "vulnerable minds", Levy clearly doesn't consider himself to be among their number, but he gives no clue as to how they are to be distinguished. Presumably the ban will not be extended from the popular press to academia or public policy thinktanks.

What is more interesting (for students of the BHL brand) is his attempt to provide historical context, referencing the anarchist outrages of the late nineteenth century and the urban terrorism of Italy in the 1970s (i.e. the Red Brigades rather than the neofascists). One obvious difference is that these leftwing groups aimed their attacks at the state in the form of institutions and specific office-holders, such as politicians and judges, with few deliberate attacks against "non-combatants" (that was the hallmark of deep-state provocateurs, as at Bologna). Insofar as we can be sure of the strategic objectives of jihadi attacks in Europe, these appear to be driven by a combination of revenge for civilian Sunni deaths in the Middle East and a hope that ensuing state repression might alienate local Muslims. A better parallel would have been the Provisional IRA, whose modus operandi included symbolic assaults on the state (most obviously the Britsih Army), revenge attacks against Protestants, and bombings that killed civilians. Perhaps Levy was uncomfortable with this parallel because the subsequent political trajectory doesn't suit his call for a "total war".

He also avoids any mention of the original "terrorism" of the French Revolution, despite this being a prominent concern of revisionist French thinkers since the 70s, notably in their insistence that Robespierre and Saint-Just inevitably begat Stalin and Mao. This isn't domestic sensitivity so much as a refusal to mix categories. In this liberal view, La Terreur was the result of the state being captured by illegitimate forces, just as the Gulags were a perversion of the state's mission to protect its citizens, but it was state violence nonetheless. Daesh/ISIS is not engaged in a contest to capture the state or force concessions from it, and its claim to independent statehood remains unaccepted, hence it is easier to bracket it with stateless nihilists with whom negotiation is impossible. This partly explains the importance of religion in the Western response to Islamism: it both fills the ideological void and can be taken as evidence that there can be no compromise, even when jihadis turn up with copies of Islam for Dummies.

By focusing on religion and "the clash of civilisations" we can avoid questioning actual politics in the Middle East and North Africa. We avoid naming some things (oil, destabilisation, the suppression of democracy) by talking loudly about other things. Compare and contrast with Northern Ireland where a reluctance to cast the conflict as solely sectarian, and a willingness to discuss the other things (discrimination, resources, gerrymandering), eventually paved the way towards a resolution. This is not to suggest that there is any prospect of encouraging Daesh to the negotiating table, not least because Western policy in the Middle East is not led by France, but that greater engagement with French Muslims (rather than scolding) might make the environment more hostile to Islamist violence. To this end, identifying a terrorist as a citizen is a small contribution towards advocating the pursuit of a political course.

Suppressing a terrorist's identity will have no positive impact. There aren't that many wannabe jihadis in France who read Le Monde, let alone the Catholic paper La Croix. What this tactic does is dehumanise the terrorists, which paradoxically makes them mythical and increases their cachet among those who admire the illicit. Terrorism employs other people, its victims, as means to a propagandistic end. Treating a terrorist in a similar fashion is not a clever response. What is presented as a gesture of defiance by Le Monde looks like an act of pretentious self-importance by a newspaper grieving over the loss of its authority since the rise of the Internet. Denying people their name, reducing them to their initials as Levy suggests, is a step on the way to treating them merely as numbers, and that is ultimately a road that leads to Auschwitz.