Monday, 29 June 2015

Flip a Coin

On the same day that Greece introduces capital controls, we learn that UK banks want the government to relax regulation of the financial sector. The latter is couched in the somewhat mimsy terms of "reducing the cost of regulatory compliance", but it's obvious that this simply means a quantum reduction in regulation and not an improvement in productivity. Pedants might argue that there is no equivalence here, as capital controls restrict civilians while regulations govern bankers, but that is to misunderstand that significant international movements of capital are initiated within bank backoffices, not via ATMs. The financial crash of 2008 was converted into a sovereign debt crisis across the Eurozone periphery essentially to protect core area banks and shift the cost of the ensuing recession from capital to labour. The latest turn in Greece sees the drama return to its source in the banks.

The UK financial sector continues to bleat about the iniquities of the bank levy, the possible introduction of criminal sanctions for executives, and the regulatory "red tape" that prevents them making larger profits. Some of this is just industry lobbying ahead of George Osborne's July budget statement, which many observers anticipate being a Lawson-like landmark now that the constraints of coalition have gone, but it also sits within a wider narrative about the centrality of financial services to the UK's economy and how this should influence David Cameron's negotiations with the EU. Just as you cannot understand Greece without appreciating the dominant economic role of tourism and shipping (and how these impact on seasonality, self-employment and tax receipts), so the UK government's manoeuvrings invariably reflect the interests and concerns of the City.

A hallmark tactic of the rightward turn across Europe since 2009 has been historical revisionism, from the claims of Labour's "profligacy" in the UK to the recasting of Eurozone history as a conflict between strivers and skivers. Another example of this revisionism was the claim in May, by Philip Booth of the Institute of Economic Affairs, that the deregulation of the City under Margaret Thatcher was a myth: "It is unambiguously the case that statutory regulation of financial markets increased under the Thatcher government. Furthermore, it is clear that markets are able to develop comprehensive systems of regulation when left to themselves. Indeed, it was these systems of regulation that the government prohibited because of competition policy concerns about restrictive practices that were operating within the market". In other words, the desire to increase competition, by the removal restrictive practices, led to greater state interference in the market.

Booth has been banging this drum for a while, partly because he is a market fundamentalist, and thus averse to state interference whatever the stripe of government, but also because it allows him to claim that the disaster of 2008 was the result of state mismanagement, with the happy accident that much of the blame can be laid at Gordon Brown's door, even though the Labour Chancellor was arguably more sympathetic to Booth's preferred self-regulation and institutional independence that his Tory predecessors. In reviewing Thatcher's record, Booth recognises a key point usually ignored by her supporters, namely that she was an instinctive centraliser. For all her harping on about The Road to Serfdom, her fundamental issue with the postwar state was not its dirgisme (consider her record as Education Secretary) but that the "wrong sort" had taken charge. Her famous phrase "not one of us" reflected her social snobbery as much as her ideological convictions.

Booth's plea for self-regulation ignores the nature of the institutional and cultural changes that occurred in the City in the 1980s. Much of the tacit regulation of the old City arose from the institutional separation of stock jobbers and brokers, which served to make certain conflicts of interest difficult, if not impossible. Likewise the separation of merchant and retail banking. This could only be done away with - thereby opening up new commercial opportunities - by substituting new regulations to prevent abuse. Similarly, the cultural norms, which depended on personal ties and class identity ("my word is my bond"), could not survive globalisation. Structural regulation and convention was formalised as part of the harmonisation demanded by the new global financial markets. This highlights the role of the neoliberal state in the era of globalisation, namely to act as an agent for class interests and negotiate across national boundaries. This is a role that is often tacitly supported by the regulated entities themselves, as it helps create barriers to entry and thus privileges incumbents.

Booth warmed to the theme in his criticism of the 79 economists who recently pooh-poohed George Osborne's proposal to outlaw deficits. In doing so, he made a case for the deliberate restraint of government: "There is plenty of economic theory that suggests that a government tying its own hands increases credibility and thereby lowers borrowing costs." This is essentially the "confidence fairy" nonsense that has been comprehensively disproved by continuing low interest rates in recent years (hence Booth's use of the word "theory" rather than "data"). Credibility in the eyes of the lenders is determined by a government's ability to meet interest payments, not by the size of its debt or its current deficit. The situation in Greece is proof of that, with the immediate trigger for the escalation of the crisis being the June repayment to the IMF. That Greece's debt is unpayable has been clear since 2010, but that has been an irrelevance to the bailout negotiations. Similarly, the last UK government's failure to eliminate the deficit by 2015 as promised has not noticeably dented confidence among creditors.

The ideological consistency between Booth's two positions - the government should be restrained, the market shouldn't - is the belief that private markets are better-suited to designing and managing regulation because of dispersed and tacit knowledge (i.e. the Hayek insight), while governments are poorly-suited because of central planning and vested interests (i.e. public choice theory). The problem with this view is that it must ignore the reality of vested interests in the private sector (or seek to mitigate them by appeals to ever more "competition"), despite the ample evidence of the failure of self-regulation in the City, while denying the capability of government to ever gather information efficiently, despite the historical evidence to the contrary and the fact that the private sector is dominated by large, bureaucratic organisations that mimic government at its undemocratic worst. As Paul Krugman rightly noted, "We may live in a market sea, but most of us live on pretty big command-and-control islands ... most of us are living in the world of Dilbert."

The broader context of Booth's revisionism and the UK finance sector's many complaints is the fear that the new Tory government may be tempted to compromise on EU financial market regulation in return for political concessions. In other words, they will settle for marginal gestures around sovereignty and immigration that please eurosceptics. George Osborne, as he has shown with the enhanced powers of the Bank of England and the extension of anti-abuse safeguards following the LIBOR scandal, is happy to regulate the market when it is politically expedient. What the financial sector and its academic and media-outriders like Booth want, is for the government to prioritise the independence of the British state (i.e. subsidiarity) in determining financial regulations, on the basis that this can then be biased towards a "light-touch" regime, ideally centred on self-regulation. The paradox is that while the UK remains within the EU, the City's interests are best served by an interventionist state.

Today's coordinated response by the Eurozone hardcore to the Greek government's decision to call a referendum on the current bailout terms has been to frame the vote as a choice between the euro and the drachma, with the former entailing unqualified acceptance of the terms dictated by the "group of 18" and thus the delegitimising (and presumably removal from power) of Syriza. If they were keen to keep Greece in the Eurozone, they would not be proceeding in this fashion, regardless of their distaste for a "leftist" government, because of the risk that their intervention might antagonise the Greek people. They seem determined on pushing Greece out (despite the crocodile tears of France and Italy), which might (ironically) allow them to write-off some of the country's debts in a way that is domestically palatable (i.e. by "washing their hands" of the Greeks), leaving the management of Greece's remaining debts in the hands of those nice people from the IMF.

One bystander who must be feeling a little queasy at the sight of this is David Cameron. Neither a democratically-elected government nor an explicit referendum appears to cut much ice with the hardcore, so why should he imagine that he will get any concessions? Just as the choice facing the Greek people on Sunday may be unpalatable, because either outcome is likely to lead to a worsening standard of living, so the choice facing British electors at a date yet to be determined may be inconsequential. Ironically, and contrary to the City's worst fears, Cameron may actually need substantive concessions in the area of EU financial regulation to obscure the limited concessions elsewhere. While the Greeks are faced with "heads they win, tails you lose", Cameron is hoping that a deal that doesn't have an adverse impact on the euro will be cynically accepted as a double-sided coin by an EU hardcore that now cares for little else.

Thursday, 25 June 2015

Boy's Own History

Andrew Roberts' three-part TV series Napoleon was a distillation of his 2014 book, Napoleon the Great. The heroic nature of the undertaking is obvious from the title of the more substantial work. What the TV adaptation provided, with the British historian outlining his case in rooms done out in First Empire bling, was a life-story with plenty of ormolu knobs on. What was fitfully entertaining was seeing a classic French narrative delivered in high Tory style, though the conservative admiration for Boney shouldn't surprise us too much. Winston Churchill surely learned as much from the career of the Corsican Ogre as he did from that of the first Duke of Marlborough, while Nigel Farage clearly owes more to bonapartisme than the political theory of Wellington. Roberts is an unapologetic apologist for the great man theory of history. Though he was frank in his admissions of Bonaparte's war crimes and egotism, the series was essentially a defence of enlightened despotism, in which Roberts brimmed with glee when Bonaparte was shown to be sculpting history to his will.

Historians are much taken with military metaphors: they marshal facts, they survey the field, they call up reinforcements. If most historians are experts in patient siegecraft, or the concentration of overwhelming force on the enemy's weak points, there remains a strand of historiography whose "dash" recalls the swift manoeuvring and daring gambles of the early Napoleonic era. This cavalier approach has a particular attraction to Thatcherite Tory historians, such as Andrew Roberts and Niall Ferguson, which stands in contrast to the more pessimistic and puritan tone of an earlier generation of Tories, such as Corelli Barnett, for whom all was decline, wasted opportunity and the vulgarity of the modern. Barnett wrote a particularly scathing biography of Bonaparte in 1978, which emphasised his opportunism, luck and the indulgence of a Mafia-like family of grasping relatives (there were odd echoes of Anthony Burgess's 1974 novel, Napoleon Symphony, with its ironically quotidien take on Bonaparte's story).

Roberts is a far better historian than Ferguson, both in print and on screen, being less manipulative with the facts and motivated by boyish enthusiasm (he was much taken with Napoleonic military fashions) rather than partisan contempt, but he does share the Scot's weakness for the counterfactual, with much fretting over where Bonaparte "went wrong". This reflects the Tory view that history is advanced by pivotal decisions taken by key individuals, rather than the interplay of class interests, which under-estimates the constraints on choice - i.e. determinism - whether economic, geographical or cultural. But this emphasis on choice is a double-edged sword. Roberts bemoans that Bonaparte failed to take his generals advice at Borodino and after, and that at Waterloo he lacked enough experienced marshals to offer any. This could be taken as evidence that the genius of Napoleon in the field was a more collegiate affair than history has hitherto allowed, which rather undermines Roberts' own thesis, or it could be taken as evidence that the enemy had learnt from their defeats and were now narrowing the options for the French, suggesting that Bonaparte's "edge" was significantly determined by his opponents inadequacies over the decade between 1799 and 1809.

Bonaparte's military genius was built on foundations bequeathed first by the Ancien Regime, notably the advances in artillery under Gribeauval, and then by the Revolution, particularly the levée en masse and the creation of large, conscript armies. In the early 1790s, a French artillery officer with a pragmatic political stance and contacts in the National Convention was in a sweet spot. Both improved field artillery and conscript armies would be gradually adopted by France's continental enemies, narrowing the military gap and leading to the strategic reverses after 1812 (Bonaparte's first battlefield defeat was at Asper-Essling in 1809). The adoption of the Corps d'Armée system was a major advance for which Bonaparte can take credit, but it was also an inevitable consequence of the expansion in the size of armies in the field. Though Bonaparte was undoubtedly a general with a genius for outflanking, it's easy to forget that many of his battles were won by throwing large numbers of troops into frontal assaults ("toujours l'attaque") after the enemy had been manoeuvred into a vulnerable position and then battered with cannon - e.g. at Austerlitz and Wagram.

The later carnage at Borodino and Leipzig was a logical extension of the tactics employed at Austerlitz, Bonaparte's most famous victory, where the enemy centre collapsed and French casualties were light. The difference was that the enemy was now more adroit at manoeuvring, thus denying Bonaparte the opportunity to outflank, resistant to feints, and better able to mass large armies in the field and wear the French down. Russia's scorched earth retreat in 1812 and the initially defensive and then offensive manoeuvring of the Allied forces ahead of Waterloo were examples of the maturity of Bonaparte's opponents, but they also highlighted the limits of the French Emperor's imagination: he had no plan B. Though it was fought a century later, the Somme was in many ways a typical Napoleonic battle. Just as the German success in the East at Tannenberg recalled the rapid manoeuvring and outflanking of Bonaparte, the stalemate on the Western Front was reminiscent of the bloody attrition of Leipzig and Waterloo.

There was a strong element of contemporary propaganda in Roberts' language, with much ahistorical talk of "meritocracy", "hard work" and "strivers", which will have pleased his mate in Number 10, though he failed to spot the contradiction in his dismissal of Bonaparte's incompetent brothers, plonked on various petty thrones across Europe, and his praise for the promotion of able generals from humble origins. Roberts correctly noted that Bonaparte's political constituency centred on the bourgeois who had secured property and economic rights through the dispossession of the church and aristocracy, but he was guilty of accepting Bonaparte's own propaganda about preserving the gains of the Revolution. What the period after the coup of 18 Brumaire meant in practice was the consolidation of a bourgeois reaction, the establishment of a new nobility, the suppression of democracy, and the reversal of gains by workers, women and West Indian slaves.

Napoleon (the historical icon, as opposed to the mundane Bonaparte) was a "new type of man", hence his emblematic importance in art and philosophy, from Beethoven's Eroica to Nietzsche's Ubermensch. A key element of his novelty was the belief, popularised by Rousseau, that talent could be found at any level of the social order. This was a profoundly destabilising idea for a society with so much invested in hierarchy - and the France of the First Empire was just as minutely obsessed with grades and status as the Ancien Regime - but it could be controlled if that talent was seen to be rare: a biological "sport" that required reclassification and absorption into the hierarchy. The persistent nineteenth century trope of the madman claiming to be Napoleon reflected the psychological ambivalence of this attitude: the exceptional was simultaneously possible and impossible.

The strategy of co-option required an emphasis on the unusual nature of talent, to emphasise that a general reordering of society through a true "meritocracy" was not on the cards: the elevation of a man, not mankind. The tension in this idea - the frontal assault of individual ambition on an initially resistant but finally surrendering society - would provide fertile soil for early nineteenth century literature, most notably Stendahl and Balzac in France, but extending also to Thackeray and Dickens in England and many others across the continent. The idea lives on today in debased form, in national lotteries and TV talent shows. Though the common soldier might have had a marshal's baton in his knapsack, the primacy of military "gloire" reflected the continuation of an aristocratic ideology and thus served to contain the revolutionary implications of Bonaparte's apercu. Roberts did mention the Code Napoleon and various other administrative reforms enacted under the Empire - they could hardly be ignored given their longevity and influence - but he was reluctant to dwell on Bonaparte the bureaucrat. He preferred the man of action - the adventurer finally and tragically reduced to boredom on Saint Helena. This was a Boy's Own history.

Sunday, 21 June 2015

Guns and Racists

One immediate result of the Charleston massacre has been the welcome eclipse of Rachel Dolezal. Race in America has reverted from a narcissistic preference to implacable destiny, with much "centuries in the making" chin-stroking by the commentariat. According to Jonathan Freedland in The Guardian, "Race and guns are the birth defects of the American republic, their distorting presence visible in the US constitution itself." This is ahistorical nonsense. While the USA was certainly founded as a racist state, and the right to bear arms was defined as a constitutional right, contemporary problems with race relations and guns have little to do with these "birth defects". The shootings in Charleston this week, like the police execution of Walter Scott in April, cannot be sourced to the 1780s or the 1860s. Though we do not make the world anew every day - so the past certainly continues to influence the present - it is nothing more than Burkean nostalgia to imagine that the present is inescapably determined by the past, that current social failures are the result of ineradicable policy blunders made centuries ago. Progressives who bemoan the tyranny of the US constitution are humming a conservative tune.

The US attitude to guns was broadly similar to that of other developed nations during the early twentieth century, with largely unfettered ownership tolerated but actual use dwindling as a consequence of the secular move of the population from the countryside to towns and cities. The one exception, enacted at state level, was to restrict the rights of blacks as part of the Jim Crow system. To put this in context, the UK only introduced limitations on the sale of firearms in 1903, with a focus on excluding minors and the insane. Controls were extended after WW1, in part due to unease over the mass-arming of the working class during the war and the worrying example of Bolshevik Russia, and gradually tightened over subsequent years. In contrast, the US National Firearms Act of 1934 was triggered by public anxiety over criminal activity during the prohibition era. Despite the high profile of gangsters, gun-ownership was in slow decline in America throughout the century, just as it was elsewhere. The popularity of gun clubs and the fetishisation of hunting were the products of urban modernity, not the persistence of ancient customs, with the legal indulgence of "sporting" guns and the distaste for cheap "Saturday night specials" reflecting a class and race bias.

The new salience of gun ownership as a political issue in America, and specifically as something admirable and emblematic of "liberty", was a response to the civil rights movement of the 50s and 60s and the subsequent reframing of white fears about the advance of blacks as a more generalised anxiety about social breakdown. The psychopathy and gang-wars of White Heat and Little Caesar had given way to the muggings, rapes and drug-fuelled craziness of Dirty Harry and Death Wish. This increased antagonism was fuelled by both white resentment and black assertiveness, but it also reflected underlying changes in the economy and demography, similar to those happening in other developed countries over the course of the 60s and 70s. This was reflected in an across the board increase in violence - criminal, domestic and political - and specifically an increase in deaths due to assault in the US. However, it is worth emphasising that levels of gun ownership in America continued to slowly fall.

The rapid escalation in assault deaths that had started in the early 60s ran out of steam in the late 70s, during the early years of the Carter administration, when ownership rates were still falling. It was only in the Reagan years (so more Escape from New York and Fort Apache The Bronx) that the decline in gun ownership was arrested, and then only temporarily. The downward trend picked up again in the 90s during the Clinton presidency, while the rate of assault deaths also continued to fall. During the Bush II years, rates of gun-ownership flatlined, despite the war on terror and the focus on homeland security. The long-term trend is clear, with the percentage of US homes owning guns falling from 50% in 1977 to 31% in 2014. Meanwhile assault deaths have continued to fall, though there remains some way to go before the US is line with other developed nations. The data suggest two things: more guns in society means more violent deaths, but the level of carnage is amplified by social tensions. In other words - and contrary to simplistic liberal propaganda - the mere presence of guns does not solely determine the level of mayhem, even if there is a broad correlation between the prevalence of guns and rates of homicide.

What is also clear from the US data is that gun fatalities tends to be greater in areas with larger (and long-established) black populations. Leaving aside atypical big cities such as LA and New York, the most deadly areas of the USA are the core southern states: Louisiana, Mississippi and Alabama. Some on the right claim that this is because of black-on-black crime, with the implication being that blacks are innately more murderous, but this is to ignore two facts: first, that most murderers know their victims, so murders tend to be intra-racial in societies where integration is weak; and second, that murder rates correlate with socio-economic class - the poor commit more murders than the rich, and they tend to murder other poor people. We also know that blacks are far less likely to own guns than whites in the US, though this rarely leads right-wingers to advocate that blacks acquire more guns in self-defence.

The recent spate of killings of unarmed black men by white policemen (a "spate" that may just be the more comprehensive publicising of a mundane fact) might suggest a white fear of violent blacks, but what you see is white over-reaction and a callous disregard for black lives. The murder rate is a social pathology, which in the US is amplified by the availability of weapons. Gun ownership is a reflection of racial tension, but largely since the 1960s, and its slow decline is a sign of increasing integration and dwindling prejudice. Though the conservative reaction of the 70s and 80s slowed this decline, the gun-lobby is clearly fighting a rearguard action in the face of steady social change: a sophisticated black president, a scion of the house of Bush who is Catholic and has a Hispanic wife. The root cause of America's "gun problem" is the social division of the races, but this is a contemporary reality, not an ancient legacy, and one that looks increasingly at odds with the wider public mood. Gun rights will, like smoking in bars and restaurants, eventually give way and people will then look back and wonder how they could have put up with such legalised insanity.

The reluctance to acknowledge the racial background to the growth in homicides in the 60s and 70s and the related valorisation of gun ownership in the 80s led to a number of attempts at historical legitimation for gun rights, as part of the wider conservative turn, from "faith" in the Founding Fathers' wisdom to the extolling of the frontier spirit as a characteristic of American exceptionalism. These appeals to history ignored the fact that the Second Amendment was concerned with the maintenance of a militia, a collective right, not the personal use of firearms, and that very few Americans in history had ever experienced "the frontier", let alone been on the receiving end of aboriginal hostility. What is strikingly evident to most non-Americans (and many frustrated Americans too) is the absurdity of the justifications put forward for lax gun control. It's obvious, from the smirking demeanour of gun-lobbyists and the irrationality of their case ("the pastor should have allowed his parishoners to carry concealed weapons"), that these justifications are euphemistic and insincere.

Freedland's article is a good example of the way that these two issues - race and gun violence - are treated as parallel failings, with their inter-relationship limited to mere coincidence: "the damage guns and racism inflict both separately and when they collide". This is an approach common to liberals and the more polite conservatives. In fact, America's gun laws, at both state and federal level, have always been a discourse about the competing rights of racial minorities and the white majority, from the pre-Civil War period up to today. Guns are an emblematic form of property. Like cars, the possession of a gun is not merely a statement of power and privilege, it also signals assertive membership of civic society, which is why acquiring guns was a performative tactic of black activists during the 60s, from Martin Luther King to Malcolm X and the Black Panthers.

A black man openly carrying a gun was seen as an affront by whites in exactly the same way as having a white woman on your arm was (the woman being another species of property). The reaction against gun control that became hegemonic during the Reagan years was part of a wider movement of symbolic white, middle-class empowerment; with the restoration of guns, as emblems of power and possession, acting as a proxy for the "taking back" of the country from its presumed domestic and foreign enemies. But though this conservative turn bellowed about national strength and religious certainty, it was marked by a particularly tearful strain of patriotism, galloping paranoia (perversely recuperating the 60s leftist fear of the state, famously parodied by The Illuminatus! Trilogy), and a belief that violence was the default solution to most problems. The logical conclusion was the apotheosis of the heroic killer - with his superior whiteman's gun, like a cross between Leatherstocking and Jesus Christ - seen most recently in American Sniper.

Racism in America is a modern phenomenon arising from socio-economic conflicts and their manifestation in political and institutional corruption. It's about contemporary wants and needs, not tradition. The belief that the value of white homes would decline once blacks moved into a hitherto exclusive area ("there goes the neighborhood") was not merely an assumption that a racially-mixed population would make a property less attractive to prospective buyers, but a belief that blacks choosing such homes intrinsically devalued them: if you like this, then I don't. "White flight" is a modern condition (or at least a condition of the second-half of the twentieth century), not the baleful legacy of slavery, which is why it wasn't limited to the USA. Segregation depends not on physical separation, which is always doomed to fail in a world where geography is dictated by wealth rather than race, but on not wanting the same things. Ultimately, those wants are a product of economic power and cultural capital, which is why the gun re-emerged as a consumer totem and status identifier during the 70s.

The southern states of the US could only have maintained segregation by crippling their economy in the 50s and 60s, much as they had done under slavery in the early nineteenth century. Wisely, they accepted the economic logic, which eventually led to the revival of the "New South" as part of the wider demographic growth of the "Sun Belt". This change in the economy naturally produced social dislocations, including the undermining of established groups and greater class and geographical mobility. In the South, this saw a growing black middle class leapfrog an increasingly "left behind" section of the white working class and lower-middle class. This in turn produced a resistance at the ideological level, hence the edgy (and often overtly racist) nostalgia for all things antebellum and the revived sentimentality of the "Lost Cause". Like all nostalgia, this is driven by regret for a past that never actually existed and must therefore be retrospectively created, like a Civil War battle re-enactment.

There can be nothing more obviously and deliberately insulting than flying the Confederate flag beside South Carolina's statehouse, but it is not widely appreciated that this is an affectation that only dates from 1961, a year that happened to be the centenary of the declaration of the Confederacy. This was not a time-hallowed tradition but the invention of a relic for contemporary political purposes, namely the defiance of equal civil rights for blacks. It has no more integrity than Rachel Dolezal's "transracial" hair or Dylann Roof's conceit in styling himself the "last Rhodesian". Contrary to the belief of liberal apologists like Jonathan Freedland, Roof's crimes are a modern manifestation of contemporary racism, fuelled by Internet crazies and conniving right-wing media, not some chronic symptom of an unalterable past.

Thursday, 18 June 2015

Head in the Sand

Last week saw the publication of the review into the UK's data investigatory powers by David Anderson QC, who labours under the title of the "Independent Reviewer of Terrorism Legislation". The media response predictably focused (with some helpful nudges by government sources) on whether ministers should be able to unilaterally issue interception warrants without judicial oversight, framing it as a contest between different powers within the traditional state and thus an issue of checks and balances - an interpretation that all sides (i.e. insiders) feel comfortable with. The question of the rights of citizens (let alone the rights of non-citizens) and the related question over the nature of online data were both marginalised. We continue to fail to adequately address the management of the haystack (the bulk-collection of data), fussing instead over the correct protocol for extracting needles.

The key principles that inform Anderson's recommendations are "minimise no-go areas" and "limited powers". In other words, the state should be able to harvest whatever commercial data companies gather, but within a legal framework, which is essentially the status quo. The special safeguards to be made for privileged groups - such as journalists, MPs and lawyers (section 12.60-67) - is an example of the "judicious" approach that assumes surveillance is targeted, should be proportionate, and treats subjects as specific "persons of interest". It thereby also flatters the named groups. This is an operational model that has been out of date since at least the mid-90s and arguably since the arrival of digital phone switches in the 1970s. When someone like Piers Morgan knows how to hack a mobile phone, what this highlights is not just systemic corruption and a crisis of ethics within a privileged sector, but that data storage and communication is wide open to abuse.

The sophisticated neoliberal commentariat, with the lofty Martin Kettle to the fore, offer an alternative dichotomy of competing interests in the form of securocrats versus libertarians. The fundamental assumption remains the same: we require a compromise and fortunately there are men and women of good will on both sides (they probably went to college together) so a middle way can surely be found that serves the "public good", an ideal that is best determined by ignoring the public. The idea that the interests of each and every individual citizen would be safe in the hands of judges, and that this represent a categorical improvement on ministerial oversight, is predictably naive, but that pales beside this choice Kettlism: "The champions of online privacy have often been unwilling to concede, sometimes even as a matter of principle, the claims of the guardians of the state for necessary powers of intrusion to protect the public." That's often, not always, but the slur serves to characterise the opponents of the state as absolutist and unreasonable, as if they intended to abolish the police into the bargain.

In fact, the contest that the review reveals is one between those who wish to exploit the new asset of "big data", the Internet companies and the state, and the basis of their dispute is purely financial: who pays for the infrastructure of surveillance? The interests of society, the source of that data, are treated as irrelevant. Anderson fails to consider that the activities of data companies may constitute a threat, his analysis (section 3) instead biasing towards "national security" and "good order/public safety". Instead, he separately concedes the concerns of critics only insofar as they can be expressed as a quid pro quo, and therefore a commercial exchange, quoting Bruce Schneier thus: "The bargain you make, again and again, with various companies is surveillance in exchange for free service". Schneier's choice of words was unfortunate, as "bargain" suggests an arrangement freely entered into, but we know that few people fully understand the terms of the deal, even if they trouble to read the EULA.

If he wants to treat the relationship of the individual and Internet businesses wholly in terms of a commercial exchange, Anderson needs to bear in mind that consumer law isn't limited to caveat emptor. The state has enacted a wide range of protections. So why is it reluctant to do the same in respect of online data? The answer can be found when Anderson directly addresses private sector activity (8.65-106) and concludes: "(a) It may legitimately be asked, if activity of a particular kind is widespread in the private sector, why it should not also be permitted (subject to proper supervision) to public authorities. (b) The extent to which we think it normal to share personal information with private sector providers will in any event tend to condition the terms in which we think about what it is acceptable to allow the state to do on our behalf." Clearly the state is neither disinterested nor independent when it comes to online data.

Historically, a mixture of self-interest (e.g. capital's incentive to keep Labour healthy) and democracy (i.e. the demand for universal rights) has encouraged government to regulate commercial practices. Though we can see the regulation of commodities and the development of consumer protection as an extension of biopolitics, i.e. techniques for the control of the population, we shouldn't ignore the extent to which it was also brought about by democratic pressure: the people demanding the right not to be bilked or endangered. That same pressure exists in respect of online activity, however it is being diverted in the UK through the false dichotomies of minister/judge and securocrat/libertarian, while in the US it is being diverted by the equally false dichotomy of citizen/non-citizen. While the weight of recent history makes other developed nations cautious in the area of surveillance, in the anglosphere there has been a distinct ideological turn towards treating advocates of "privacy rights" as shrill, marginal and even (horror of horrors) anti-business.

Anderson's treatment of what is "widespread" and "normal" in the private sector as intrinsically right also tells us that the "free at the point of use" model of the Internet has normalised the belief that the state should have unfettered access to citizens' data. Had the early commercial Internet in the 90s adopted a system based on micropayments, as many advocated, this would not necessarily have been the case. It is possible that an assumption of privacy and the restricted use of data would have become the norm, and while that would have limited the development of some (parasitical) applications, it would probably have enrichened datasets and thus created other opportunities. Of course, it's also possible that even with a viable micropayments infrastructure we'd still have ended up in exactly the same situation as we find ourselves in today, as savvy providers offered free service in return for unfettered data exploitation. The world will be bought up, one way or another.

Anderson's view on bulk personal data collection by the state (8.26-29), including GCHQ's harvesting of public sector datasets, is that this is a "powerful tool" and "entirely useful and rational". You can almost hear the panting. He continues the disingenuous distinction between content and metadata that the government and intelligence services have been pushing for years: "GCHQ has therefore suggested that there should be a new power to intercept only this information [i.e. metadata] rather than, as at present, all content as well. It points out that such an approach would intrude less into privacy" (10.28). He is obliged to separately note that there are many among "civil society" who question this interpretation (12.27). This is a classic example of British judiciousness: on the one hand this, and on the other hand that. The choice will be left to the politicians who commissioned the review, but it is clear enough what the establishment position is.

The review is what you would expect from a QC: a discussion about the balance of powers between privileged parties (ministers and judges) and an assumption that the law is a wholly adequate means to provide both executive control and safeguards to allay public concerns. There is no real acknowledgement of the nature of data as property, while the contrasting idea that data is an extension of the person (and thereby inherits rights) is limited by the assumption that its management is the proper and exclusive concern of the state. The historic shift, over the course of the twentieth century, from a society predominantly based on manual labour to one based on "knowledge work" has moved the emphasis of biopolitical control from the physical and categorical (i.e. the intrinsic value of individuals as units of production) to the cognitive and relational (i.e. the contingent value of the activities of fragmented individuals and groups). While opportunism and institutional paranoia plays its part, the state's eager interest in data surveillance fundamentally reflects this evolution: from the attempt to control what we do, to the attempt to control what we think.

Monday, 15 June 2015

Fast and Furious

The is-it-a-feminist-film-or-not? reading of Mad Max: Fury Road is a misdirection. George Miller's series has always been about a man - the clue is in the title - who has gradually evolved from a two-dimensional reactionary into a three-dimensional one. The fun of the films is essentially boyish: smirking parodies of heroic forms and daft cars, like a cross between Blackadder and Top Gear. The presence of Miranda Richardson did not make the former feminist, any more than the hiring of Sue Perkins would the latter. The redeeming virtue of Mad Max is that his confusion (the condition of modern manhood) has not curdled into either fascistic misanthropy or unthinking misogyny. In that sense, Max is a more complex character than most "action heroes" and more empathetic than his obvious progenitor, the "man with no name" played by Clint Eastwood in Sergio Leone's westerns (there is an amusing reference to this in the latest film in Max's initial refusal to reveal his name, a ploy that echoes all the way back to the Odyssey).

This latest instalment in George Miller's seminal series has an elegiac air about the scenes featuring Tom Hardy as Max, many of which are bathed in the "magic hour" sun that became a feature of westerns in the 70s, such as Butch Cassidy and the Sundance Kid and Days of Heaven. This is a visual shorthand for historical inevitability: my time is over; all things must pass. Hardy, like Gibson in Mad Max 2, is also noticeably close-mouthed (Miller naturally parodies this by having him muzzled for a large part of the film). Though this reinforces the feminist reading, because Charlize Theron's Furiosa gets to do marginally more talking and just as much arse-kicking and problem-solving, the underlying message is conservative: talking gets you into trouble. It also has the effect of characterising Max as a figure only partly of this world, for whom every utterance appears to be a conscious effort of translation, though more in the mould of a social outsider than the uncanny demi-god that Eastwood perfected.

Miller's films often employ a story-telling trope and use artefacts as mediums of memory, with the postmodern irony being that these tales and memories are inevitably misleading or delusional, to the point of downright fatal. In Fury Road, we get the legend of "the Green Place" and an old biker-lady's portmanteau of "heirlooms". The film ends with Max melting away in the crowd as Furiosa is popularly acclaimed the new leader of the Citadel, the heart of this "civilisation" (no need for nonsense like an election). This trope signals a man moving from the real to the mythical realm, a process that has been underway since Max quit the police force in the first episode in 1979. Tom Hardy has apparently been contracted to do three more films. By the last I suspect he'll need no dialogue at all. This shouldn't detract from the qualities the actor brings. If Mel Gibson's incarnation had a little too much of the Achilles about him, Hardy's resourceful hero has the air of an Odysseus.

The key anxiety addressed by this fourth film is not to be found in the relationship of the sexes but in the image of a world of work (the Citadel's social hierarchy is literally powered by treadmills) in which men are increasingly constrained and even envious of women's ability to choose between a biologically-mandated role (i.e. reproduction and nurturing) and a life that is in no way inferior to that of a man (Furiosa's skill in driving the war-rig or shooting, and the independence of the Vuvalini bikers). Mad Max's initial job upon capture by the forces of the Citadel is to be a blood-bag for Nux, a sick warrior, which calls to mind Marx's famous use of the vampire metaphor but also the traditional male fear of being "bled dry" by wife and kids, of being tied-down by the job (Max is literally chained to Nux, and then stuck on the front of his car like an oversized Spirit of Ecstasy). Apart from the mindless mob and the comedy villains (the ruler of Gas Town, in a shabby suit with nipple rings instead of a fob-watch, was a particular delight), the only male role in this society appears to be that of war-boy.

Slowly dying from radiation sickness and brainwashed into a beserker desire for death in battle (Valhalla awaits), the war-boys make explicit the roots of the Lost Boys trope, which Miller introduced in the previous Mad Max instalment, in the cannon-fodder of the Great War. These "half-lives", controlled by the physically and morally corrupt Imortan Joe, the tyrant of the Citadel, represent the madness of men. "Who killed the world?" one of Joe's "breeders" (the harem of physically hale swimwear models that constitute the plot's McGuffin) accusingly asks Nux. The unstated answer is men, but the film tells us that not all men are the same: there's always the exceptional Max, with his independent resourcefulness and guilt-ridden flashbacks. The conservative pessimism of Miller's dystopia is evident in the lack of subtlety in his social order. The figures of authority are monsters and slaves to their own mad ambitions, their enforcers are idiot lumps of muscle or deluded youths, while the common people are weak and inept (they can't even seem to fill a billy-can with water without descending into chaotic violence). The only real exception - and a welcome splash of lurid colour - is Coma, the Doof Warrior, the artist henceforth known as the double-neck-guitar-cum-flamethrower guy.

Fury Road features a running theme of binoculars and telescopes: the far brought near and the world framed, which is a knowing joke about the process of film-making (one of Joe's deformed sons oversees the action from a director's chair). The series can be thought of as one long pastiche of cinema tropes by Miller, which tends to obscure the backward-looking nature of the films' politics. Mad Max was always out of time, and always more concerned with the US (i.e. American cinema heritage) than Australia. The moral breakdown and biker gangs of the original 1979 film were a hangover from the social anxieties of the late 60s that would bring Nixon to power. The energy crisis and fetishisation of petrol in the second film, released in 1981, was a re-run of early 70s fears rebooted by a punk aesthetic that would prove as influential in cinema and design as its near-contemporary Blade Runner.

Mad Max 2 also made clear Miller's debt to Sergio Leone, including some obvious plot parallels with A Fistful of Dollars (which Leone in turn borrowed from Kurosawa's Yojimbo, and Kurosawa borrowed from Dashiel Hammett's novel Red Harvest). The third film, released in 1985, took a sociological turn with the more complex politics of Bartertown, but is remembered mainly for the postmodern way in which it cheerfully pastiched its predecessor in the series with ever more improbable vehicles, big hair and a gonzo-brilliant Tina Turner. To British audiences, watching after the end of the miners' strike, it seemed spookily up-to-date - a dominatrix leader crushes a competing social power that controls the energy supply - but in fact the political subtext was still focused on the 70s energy crisis and the fear of a post-apocalyptic social breakdown filtered through tropes borrowed from The Lord of the Flies and Riddley Walker.

The fourth film fully catches up with the fear of nuclear war, referenced in the prologue and an ever-present theme in the sickness of Imortan Joe and the "half-life" war-boys. Ideologically, we appear to have finally reached the 1980s, hence the Vuvalini, a gang of mature biker chicks who distrust men and specialise in clean headshots, look like a women's group just returned from Greenham Common. There are also some more ambivalent gestures towards contemporary concerns, such as the tech-augmented human (Furiosa's prosthetic arm good, Imortan Joe's life-support system bad) and the atavistic perils of religion (Valhalla standing in for Paradise, to avoid a too-obvious equivalence of the war-boys with teenage Jihadis), but this remains an economy centred on petrol as much as water, which is a stunning conceit when you think that in a genuinely "regressed" society a horse would be far more valuable than a car (apart from ominous birds and a two-headed lizard that Max eats, fauna is noticeable by its absence).

The traditional western-film themes of home and redemption are as strong as ever, but what has become ever more prominent in the series is the sense of being lost in the world - uprooted and unable to recognise the sites of memory. The "Green Place" that the escaping women search for has declined into a toxic mud-flat with crows and stilt-wearing scavengers, shot in the crepuscular monochrome of The Seventh Seal, that they pass by unwittingly. The entire narrative arc is essentially a cinematic joke: "there's no place like home". Having spent the first half of the film fleeing from the only greenery to be seen anywhere in this desert landscape, supposedly to find the Green Place of legend, Max intervenes to turn the convoy around and target the liberation of the Citadel. If the first half owes a lot to The Wages of Fear (the transportation of a valuable but volatile cargo), the second owes most to the wagon train sub-genre (settlers, complete with seeds, must brave "hostiles" to reach the promised land) with a strong dash of Stagecoach (a pregnant woman, self-sacrifice, male and female outsiders making common cause).

Though this literal about-turn looks like a two-fingered salute by the director to narrative logic, it actually marks the transition of the film from a study in the alienation of forced labour to the valorisation of a settled order. Though Max believes he must remain an outsider, he also believes that civilisation must advance (or at least recover from its ecocidal folly) and that the women - Furiosa, the "wives" and the Vuvalini - represent the forces of progress. Having been robbed of his surplus blood by Imortan Joe's war-boys, Max freely provides a transfusion to save Furiosa, the rebel who was an "Imperator", a favourite of the old regime. The possibility of revolution is sublimated by restoration (here recast as "redemption", in traditional western style), a more glorious revolution, in which the corrupt monarchy, driven insane by its desire for heirs, is overthrown not by a democratic uprising but by an oligrachic coup. This is the birth of the republic. If the first half of the film is Greek, the second half is Roman.

The sociologist Richard Sennett, in his 2006 book The Culture of the New Capitalism, talked of the stresses of the new social order (i.e. what has come to be known in pop-culture as the "precariat"): "Only a certain kind of human being can prosper in unstable, fragmentary social conditions. This ideal man or woman has to address three challenges. The first concerns time: how to manage shortterm relationships, and oneself, while migrating from task to task, job to job, place to place .... The second challenge concerns talent: how to develop new skills, how to mine potential abilities, as reality’s demands shift. ... The third challenge follows from this. It concerns surrender; that is, how to let go of the past." That's a pretty good thumbnail sketch of Mad Max: Fury Road, but one that also hints at the tragic dimension that keeps us interested, namely Max's inability to escape his past. Regardless of its passing the Bechdel test with flying colours, the film is bonkers and I'm already looking forward to the fifth instalment.

Wednesday, 10 June 2015

Something Will Turn Up

Like any financial entity, government has three levers for managing its accounts: income, spending and borrowing. George Osborne's plan - to be announced in a speech to his City backers tonight - to enshrine near-permanent annual budget surpluses in law is a self-denying ordinance that appears to remove the last of these from active use, essentially by ruling-out debt-financed deficits. The ostensible objective is "to bear down on debt and prepare for an uncertain future". On the face of it, this means that any temporary increase in public spending caused by an economic downturn would have to be funded from the surplus on current tax receipts. There will be exceptions to this new golden rule (the specifics of which will be announced in the July budget) - i.e. special circumstances when debt will be deemed a necessary evil (wartime, presumably) or re-categorised (financial sector bailouts, perhaps) - but it is unlikely this will extend to fluctuations in the business cycle, as that would rob the law of any real purpose.

Significantly, even natural Tory-supporters are questioning the wisdom, if not the ambition, of this. The Telegraph wonders where a surplus is going to come from, given that public spending's "low-hanging fruit has already been plucked" and economic growth is currently failing to deliver the necessary swell in tax revenues, essentially because productivity and wage growth is weak, reflecting a worsening composition of the economy as job polarisation becomes entrenched and employment growth clusters at the bottom end of the pay scale. Given their flirting with "budget locks", it will be interesting to see how the incipient Labour leadership respond to this "trap" (as an aside, how can it be an effective trap when it is obvious?). The early signs suggest they are still trying to discriminate between investment (good) and demand stimulus (not so good), which is no real advance on the neoliberal settlement of the New Labour years.

One obvious problem with Osborne's approach is that large annual surpluses will not be popular, despite the media waffle about "repairing the roof while the sun shines". As the money piles up and the debt-to-GDP ratio falls to "normal" levels, the pressure to "return it" via tax cuts will be politically difficult to resist. This means that future surpluses will be modest in size, which in turn means they will probably be insufficient to accommodate a recession once the automatic stabilisers (increased unemployment benefits and tax credits) kick in. This is likely to trigger either tax rises or further cuts to public services, both of which will depress demand and thus exacerbate the downturn. We will have returned not only to boom and bust, but to a more spendthrift attitude in which the burden of current indulgence (tax cuts) is placed on future generations (insufficient investment). Ironic, no?

There is also the danger that this may lead to greater tax volatility. Since 1979, tax cuts have tended to bias towards income tax and property, while tax rises have tended to bias towards consumption. More recourse to the lever of taxation to manage fluctuations in the national accounts will, in the current neoliberal climate, lead to increased inequality. Income tax rates will be cut and tax-free allowances increased in the good times, and VAT and excise duty will be increased in the bad. The alternative would be more reliance on the lever of spending - i.e. to spend less - but that will worsen inequality by definition. There is also little likelihood that spending would be increased during an upturn, not just because demand will naturally ease in certain areas but because the ability of the public sector to survive through the downturn will be taken as proof that it can permanently operate on a tighter budget.

A further problem is that restraining government borrowing necessarily reduces the demand for loanable funds. In other words, savers seeking a decent, low-risk return are going to be looking at very low interest rates for the foreseeable future, which won't go down particularly well with Conservative supporters. The only solution would be a more than compensatory increase in borrowing by the corporate and household sectors, to drive up rates, but this would have to be of the scale seen in the run-up to 2008 - i.e. massive corporate over-leverage caused by mergers and acquisitions, rather than productive capital investment, and/or massive household over-leverage to fund consumption and mortgages. At the moment, only mortgages show any real sign of growth, but that is clearly dependent on ever more inventive government stimulants, and if the plan to allow housing association tenants to buy their homes tells us anything, it is that we're now scraping the barrel.

We also shouldn't be surprised that a fiscal settlement that rules out deficit-financing will more speedily return us to an age of private affluence and public squalor. While pro-middle class infrastructure investment, such as commuter transport, will continue to be funded, and while the private sector will happily pony-up the capital for guaranteed future rents in areas like healthcare, much of the fabric of public life will degrade if it cannot find a sponsor to replace the state. This is hardly a new development - it continues the transformation of local government from a service provider to a property developer, the spread of corporate sponsorship to social and cultural goods, and the financialisation of public infrastructure - but the Chancellor's desire to "settle" this indicates the extent to which the "circle-squaring" of the New Labour years is to be ruled out of bounds.

George Osborne has earned a reputation both as a cunning tactician, with his various traps and manoeuvres, and a visionary strategist, with his "Northern Powerhouse" rhetoric, despite the evidence of his first 5 years in government pointing to a talent for little more than spinning his policy failures and boosting his media profile through judicious use of a high-vis jacket. The Guardian has characterised this latest initiative as a return to Victorian habits, "when the public finances were run on the Mr Micawber principle that income exceeding spending equalled happiness and spending exceeding income equalled misery". Of course, Micawber's most famous maxim was that "something will turn up". It is this spirit of insouciance that I think better captures the essence of George Osborne.

Friday, 5 June 2015


I was initially optimistic about the outcome of the Greek debt crisis, reasoning that Syriza represented the best vehicle for genuine structural reform and therefore the completion of the country's long-delayed integration into the "Eurosystem", however I think I may have under-estimated the extent to which German conservatives have adopted a laager mentality since 2008, which has been evident in their increasingly vocal contempt for those, such as Syriza, whom they consider to be "impudent" in their criticism of the neoliberal/ordoliberal orthodoxy (a charge now being echoed by Greek conservatives). Oddly, this means the Germans are becoming more like the British in their attitude towards their fellow Europeans. Just as domestic eurosceptics assume that continentals don't fully understand such concepts as liberty, so the conservative core of the EU is now dismissive of the definitions of democracy and popular will current in the periphery.

Behind the caricatures and fantasy of the popular media, Britain's attitude to Europe has always been instrumental rather than idealistic, and seen as such by other European states. This gave us a reputation for being "high maintenance" long before Margaret Thatcher's handbag swung into action. It also led to a suspicion (at least on the part of the French) that La Perfide Albion, as a historic opponent of any form of continental union from the Holy Roman Empire onwards, would prefer Europe to remain weak and fractious, though after 1945 this was assumed to be driven more by the interests of US hegemony (sold domestically as "the special relationship") than the traditional balance of powers. That suspicion has largely evaporated as America has turned its focus towards Asia since the 90s and encouraged the EU to treat (and contain) Russia as a regional issue. A by-product of this has been the increasing marginalisation of the UK, both in Washington and "the chancelleries of Europe". The attitude of the French and Germans has evolved respectively from exasperation and indulgence to disinterest and polite boredom.

The decisive factor in the UK's attitude to Europe has always been the City of London. Big capital has been broadly pro, small capital broadly anti, leaving money capital the casting vote. The ideology of "global free trade" obscures the significance of the continent as the chief foreign market for London's financial services since the early 19th century. In the postwar era, with the sterling area entering its twilight, Europe was pretty much the only game in town. As the eurodollar markets developed in the 1960s, it became clear that closer political integration would be necessary to pre-empt the development of an "insider" competitor to London in any future union. The later growth of euroscepticism was fuelled in part by the City's embrace of globalisation once the US banks moved in after 1986 (Nigel Farage is a product of this era), however 2008 may have been the point at which the "buccaneering" conceit jumped the shark. It is now clear that the euro isn't going to be allowed to fail, and equally clear that banking union and future financial regulation will disadvantage any "outsider". This means that the City will probably plump for continued membership, with suitable "guarantees" over its operational independence.

Though it will be painful, a Grexit will be accommodated by the eurozone, and even a Brexit will be accommodated by the EU. Both have clearly been priced in, hence the willingness of the French and Germans to wind up Cameron by advocating moves towards a common EU Treasury while he is trying to "make nice". The caveat is that this indicates an acceptance that not all states will jump on the integration bus - i.e. a two-speed Europe is now official policy - with the eurozone "core" proceeding in lock-step and other EU states proceeding as they see fit. According to Angela Merkel: "we have always been able also to pursue a Europe at different speeds, to find opt-out solutions for example". This is pragmatic. Europe is neither an island nor as geographically and culturally consistent as North America. There are always going to be peripheral states that will require customised arrangements: Russia, Turkey, Switzerland, Norway etc. Extending this logic to states that are already members of the EU, but outside the eurozone, is no big deal, which is why a Brexit would not be as binary (and traumatic) as many think. But as Greece is finding, no such customisation will be tolerated within the eurozone.

However, Merkel's stance also glosses the actual history of the EU and in particular the tension, between a federalist vision of "ever closer union" and a sovereigntist one based on intergovernmentality and subsidiarity, that marked the decade up to Maastricht in 1991. The latter vision has become dominant, essentially because the fall of the Berlin Wall and the clamour for East European states to join the EU led to an acceptance that the greater economic variety required a "variable geometry" of integration (ironically, German reunification was much more idealistic than pragmatic). The pivotal moment was the paper, Reflections on Europe, produced by Karl Lamers and Wolfgang Schäuble in 1994. Though this continued to advance a federal vision, it was significant for proposing that EU integration should proceed with a "hard core" - essentially the traditional Franco-German axis and their closest allies - which acknowledged the impossibility of all Europe advancing as one for the foreseeable future. In other words: a looser arrangement for the EU as a whole, but more rapid integration for the core.

This hard core of the EU will inevitably be coterminus with the eurozone. Euro 2.0 will entail greater fiscal control by the EU to match monetary control, and the embedded ideology of that control will be neoliberal. The euro will be a means of disciplining nation states, as Greece is now finding. Another way of looking at this is that the hard core concept is a way of shoring-up the euro and making it resilient against future financial system shocks: fortress euro. That suggests a growing appetite to cut Greece loose as the "weakest link". The Greeks' miscalculation earlier this year was to assume that their eurozone peers would either acknowledge that their debts were unpayable and write them off (and encourage the IMF to do likewise), or extend-and-pretend in return for a sincere fiscal reform programme. Underlying this was the assumption that no one wanted Greece to leave the eurozone, either out of genuine pro-european solidarity or aversion to a setback for the common currency. That now looks like a misjudgement.

To write-off Greek debts would be to admit that Greece should never have been admitted to eurozone membership in the first place. This would stick in the craw of the other states that had to make sacrifices both in the lead up to the euro's launch and during the crisis of 2010-12. To push Greek repayments into the distant future would be to set a precedent for future fudges around fiscal responsibility, and would (at least in the mind of conservatives) raise the prospect of populist national governments "looting the EU treasury". This explains the salience of Greek pensions in popular mythology. In short, the EU core seems set on a policy of intolerance and obduracy until such time as the fiscal infrastructure of euro 2.0 is built and "good housekeeping" habits are internalised. The Greek miscalculation was encouraged by the reflationary noises made by Francois Hollande in France since 2012. In the event, he was unable to either significantly amend the fiscal pact or get agreement on a parallel growth pact. The German view simply steamrollered on. Both Hollande and Matteo Renzi of Italy continued to talk of "flexibility" up to late 2014, but both appear to have been called to order since then.

The history of the EU can be broken down into three, twenty-year periods: 1950 to 1970 focused on the free trade in goods - the original common market; 1970 to 1990 focused on the liberalisation of services, the harmonisation of goods and regional support; while the period between 1990 and 2010 shifted focus to accommodating growth eastwards. (As an aside, the commitment to the formation of the EU, including monetary union and social harmonisation, was made in 1972, ahead of the UK's 1975 referendum, so the claim that "we never voted for this" is specious). The Social Chapter of the 1991 Maastricht Treaty signalled the high-water-mark of "social Europe" and solidarity. Far from ushering in a mandatory regime of frogs' legs and siestas, this proved to be little more than the harmonisation of employment terms for big capital, hence the alacrity with which New Labour sidestepped John Major's opt-out and incorporated the provisions into statute in 1997.

The 1990-2010 period not only saw social policy gradually sidelined, it also saw the hegemony of neoliberalism, which moved the vocabulary of EU debate from cooperation to competition. This was reinforced by the particular circumstances of individual states as they responded to globalisation, such as the Harz reforms in Germany, which shifted the focus of economic development away from the liberalisation and infrastructure investment of the 1970-90 period towards labour market reform and wage repression. This turn inevitably undermined national welfare systems thereby eroding support for the nation state as the "container of social citizenship". As Étienne Balibar puts it, "In Europe today, therefore, the crisis of democratic legitimacy resides in the fact that national states have neither the means nor the will to defend or to renew the 'social contract', and the fact that the instances of the European Union are not predisposed to search for the forms and the contents of a social citizenship of a higher level".

Parallel to this, neoliberalism has also undermined the state through privatisation and marketisation, denigrating the public sector's motives and competence and calling into question the very idea of public service - i.e. that there might be a middle-ground between profit-seeking and charity. But this movement is not shrinking the state and marginalising it in our lives. Rather it is turning the state into the agent of privileged corporations that have growing control over us but who are increasingly beyond our control. The result is a collapse in loyalty to the state, which can be seen in the growing disillusion with the "political system", the compensatory affection for supra-state institutions - such as the NHS and the monarchy, the emergence of "national identities" that are anything but national (viz English vs British), and the increasing disregard for state integrity (the historic significance of May 2015 may be the death of conservative unionism and the consequent emergence of Scotophobia). This collapse in loyalty is both fed by and feeds the desire of the state to develop ever more thorough means of surveillance, which leads all too easily to the means of behavioural control and the direction of opinion.

Since 2010 we have obviously been in a new period of European history. Though it's early days, the outline is becoming clear: this will be the era in which EU policy is increasingly run in the interests of the core, with the periphery urged to adopt the "Berlin consensus" wholesale in the spirit of neoliberal competitiveness rather than any antiquated notion of international social solidarity. It looks like the Greek crisis will now be resolved in July. The delayed €1.6bn repayment to the IMF is not the problem. The real challenge is the €6.7bn of euros due to be repaid to the ECB in July and August, which just happens to be a little less than the €7.2bn being withheld by the Troika from the second bailout programme pending acceptable structural reforms. Shuffling the monies back and forth would open up negotiations for a third bailout, where the Greek government would focus on the necessity of write-offs as the quid pro quo for further reforms.

The question is whether Germany is holding out for better terms up-front, or whether it has no intention of agreeing to a write-off, come what may. I'm now in the latter, pessimistic camp. Either the Greek government will run up the white flag, leading to the split of Syriza and sending a clear message to other European states about the limits of democracy, or the Greeks will default. Alexis Tsipras's defiant speech to parliament today suggests that which way the Greek government jumps will now depend on popular reaction over the next few weeks: a call to democracy (which means people on the street as much as opinion polls) that must profoundly irritate the Troika. While the general assumption is that a default means Grexit, it could in fact result in neoliberal "special measures" whereby a Monti-like technocratic government takes over to impose EU-friendly reforms as the price of staying in the euro and guaranteeing small depositors. The risk for Syriza is that staying in the euro may trump all other considerations for enough Greeks to make this viable. In other words, the outcome is probably going to be the same whatever Alex Tsipras & co decide: the party of order wins.

Monday, 1 June 2015

The Global Game

Arsenal's FA cup win has been described  as evidence that they must now push on for the league title and a welcome reminder that "the sport we love" is about joy rather than bribes. That these two views were expressed by the TV broadcasters, who are the ultimate generators of the money that ends up in both player transfers and dodgy wire transfers, perfectly illustrates the psychosis of the sport. Despite being a season ticket-holder since the mid-80s, I didn't get a ticket in the ballot for the final (the odds were about 40%), my "seat" presumably being occupied by some other fan who paid a small fortune via the black market to the secretary of a non-league club (aka "the football family"). I'm sure the latter has conscientiously recycled the cash into a new set of kit, just as some of FIFA's largesse will have made its way through the sieve of intermediaries to fund an all-weather pitch in an African township. The Cup Final ticket allocation scam is an example of traditional English corruption, wholly unlike the bungs circulating among FIFA members.

Football is a gripping sport because goals are few and the team that scores is not necessarily the one that is on top. The grippingness didn't last long on Saturday. Despite a couple of late penalty shouts, Aston Villa were never really in the game. Arsenal controlled it and never looked in danger of not winning in normal time once Alexis Sanchez had scored the second goal. Wenger comprehensively out-thought Sherwood, and the Arsenal players showed no nervousness, unlike last year. In contrast, the Villa players looked tired from the kick-off and never really matched the Gunners' level of determination. My only disappointment was that "big Villa fan" David Cameron was otherwise engaged on the day - possibly discussing with Karen Brady how much more public money could be funnelled West Ham's way. As the match drew to a close, and the cameras picked up Randy Lerner bending the ear of the President of the FA (presumably saying "I'm out of here"), my thoughts turned to Friday's election to the post of President of FIFA and the oddity of another prince standing as the reform candidate.

FIFA reflects the state of global governance, which is why any exposure of its inner workings is unedifying, and why the product of nepotism can be advanced as the champion of probity. It was founded by the European powers in 1904, as part of the wider movement towards international technical coordination, but with a strong whiff of imperial soft-power about it. The UK (i.e. the four "home nations", but essentially England) has had a troubled relationship with the francophone organisation, marked by delusions of superiority and frequent sulking (out, in, out and then in again). The first twenty years were marked by volatile expectations of the positive, irenic impact of the sport on wider society - a style that lives on in the hyperbole of its modern PR and its love of fresh-faced, innocent children. The initial champagne toasts and goodwill to all mankind were dashed by World War One, then revived in the spirt of the League of Nations and post-war reconciliation, only to be further undermined by the strident nationalism of the twenties and thirties.

FIFA's history can be characterised as a simple echo of wider geopolitical forces, but this downplays the agency of the self-appointed elites who have dominated the organisation since day one, exemplified in the 1930s by their willing cooperation with Fascist Italy. The 1960s saw the temporary triumph of reaction, quite out of keeping with the times, as England's Stanley Rous became president, but the shifting geopolitical sands were evident both in the boycott of the 1966 World Cup tournament by the African nations, who had been denied a direct qualification place, and Rous's failure to get Apartheid South Africa readmitted as a FIFA member. The 1970s saw the emergence of two secular changes: the dominance of the developing world, as more countries joined the organisation, which provided the powerbase first for Joao Havelange and then Sepp Blatter; and the growth of revenues due to TV, which has transformed FIFA into a rent-seeking monopolist providing cash in exchange for influence (and presidential votes).

FIFA finds it difficult to hide its admiration for authoritarian regimes, from Junta-era Argentina to Putin's Russia. Much of the attraction of Qatar, beyond the bank transfers of uncertain purpose, is the ability of that country to build the required (and ultimately wasted) infrastructure through simple diktat. The deaths of construction workers are not a regrettable by-product: they're evidence of the sort of power that gives FIFA officials a hard-on. When Blatter & co talk about "legacy", they are dreaming the dream of Ozymandias, though as they showed with the US in 1994, guaranteed profits trump legacy. As an individual, Blatter may well be innocent of paying or receiving bribes, but then it's clear that what gets him out of bed is the adulation that the job brings: he's a power-junkie. His reputed $11 million salary can be seen as a cut provided by the grateful recipients of those bribes, but it can also be seen as a standard neoliberal reward for failure - i.e. turning a blind-eye to systemic abuse.

Much of the criticism Blatter is now facing is both legitimate and hypocritical, stemming from the failure of the England and US bids to host the 2018 and 2022 tournaments. From Blatter's perspective, the awards to Russia and a Middle Eastern state were not only politically logical, they addressed a historic imbalance. Of course, it would have made more sense footballistically (to borrow a Wengerism) to have awarded the tournament to the USSR in the 60s or 70s, and Egypt would be a more logical Middle Eastern location even now (cooler, more fans, handy for Ozymandian ruins etc). As a rent-seeker, FIFA will always go where the money is, which means either disguised state subsidies or guaranteed commercial revenues. The US Soccer Federation and the English FA know this perfectly well. They don't have a problem with corruption, so long at it isn't too overt and accords with bourgeois norms - so Mulberry handbags are an acceptable "gift", prostitutes are not. Their real gripe is that the growth of the global TV audience is reducing their relative importance to advertisers.

The attraction of a global sporting event - and the Olympics is the only serious competitor to the World Cup in this space - is that it allows global brands to reach a global audience. But this in turn means that the attractiveness is biased towards emerging markets where those brands can achieve above average growth. The US and Europe are saturated markets where advertising spend is focused on brand maintenance. The Middle East, Africa and Asia are markets where the potential return on each advertising dollar is much higher. They are also the growth areas targeted by global TV companies, such as Sky, for the same reason. The consequence is that the money wants to pile into emerging markets, which suits the "democratic" structure of FIFA (by the way, the perpetuation of the separate UK associations, not to mention minnows like San Marino and Andorra, owes a lot to the "rotten borough" indulgence of UEFA seeking to maximise its own bloc).

It is unlikely that there will be any break up of FIFA. A fragmented tournament would see a collapse in commercial value, and could also result in a general waning of interest, much as the FA Cup suffered after the launch of the Premier League. European clubs already complain about the demands of regional tournaments other than the Euros, so you could expect to see any inter-continental tournament quickly reduced to an 8-team exhibition. The FA Cup has partially re-established itself, but it has done so by becoming more TV-friendly: the final at 5:30, wall-to-wall nostalgia, aggressive international sales. For that most English of institutions, it has become more and more of a global event, with fans watching in sports bars from Wellington to Washington, cavorting in their replica shirts from Lagos to Kuala Lumpur. Saturday's goals were scored by an Englishman, a Chilean, a German and a Frenchman, all playing for a global brand. I'm perfectly happy with that, but I would like the opportunity to see it with my own eyes.