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Friday, 31 July 2015

Above the Sea of Fog

The traditional start of the summer holidays is marked in even-numbered years by international football tournaments. In odd-numbered years it is marked by a Martin Kettle article in The Guardian insisting that politicians should develop a more extensive cultural hinterland, ideally centred on an appreciation of Richard Wagner. I don't know if this is just the lazy recycling of the same piece while he is otherwise engaged at the Bayreuth Festival, or whether it's an idiosyncratic rider to his contract that he should be allowed to indulge this particular hobbyhorse every couple of years, but I do know that his philosophy is as depressing as it is familiar.

In 2011, Kettle greeted the Israeli State Orchestra's appearance on the Bayreuth fringe as a welcome step in the rehabilitation of the composer of The Ring Cycle: "Wagner was indeed an antisemite and a composer. But that does not make him an antisemitic composer, whatever that means, any more than being a reactionary ant-Dreyfusard makes Cézanne a reactionary painter. I confess that I do not understand what antisemitic music is". This is historically tone deaf, as the categorisation of music, or any other cultural product, as either halal or haram is clearly a political judgement. Wagner is the antisemitic composer supreme because the Nazis (abetted by his family) made him so, not because of his antisemitic essays or any questionable tropes in his operas. Kettle almost concedes this point in his own contradiction: "None of this means that the ban on the playing of Wagner in Israel and by Israeli orchestras is anything other than utterly understandable". Well, quite. It's a political decision.

What this shows is Kettle's desire to demarcate areas of life, but to then use the resulting dichotomy (art versus politics) for instructive purposes: a pointer to better political behaviour. This compartmentalisation is one of the chief legacies of Ancient Greek philosophy, with its alienation of gods and men and its distinction between personal ethics and communal politics (Greek tragedy, and biography - e.g. Socrates, addresses the tensions this gives rise to). It stands in obvious contrast to the totalitarian approach of the monotheistic religions, in which scripture and clerical interpretation extends to all aspects of the natural world. The great irony is that Wagner's "transcendence" (i.e. overwrought romanticism), as much as his conservative vision of an ordered and organic world, was taken as supportive of the Nazis' totalitarian ambitions: the Gleichschaltung (coordination) of society. It is precisely the quality that Kettle praises in Wagner, his ability to stand outside of politics, that makes him such a favourite of politicians, particularly those of a neoliberal persuasion who see a similarly transcendent (and instructive) role for the market.

In 2013, Kettle observed that "Politics may seem to rule the public roost much of the rest of the year – but it is a striking fact that politics has no power against the summer. ... This, after all, is the time of year when politics can no longer keep up the pretence that it is all-encompassing". But Kettle isn't going to fall into the trap of sports administrators down the ages, claiming that sport and politics don't mix and have been separate spheres since the sacred truce of the original Olympic Games (which actually mixed sport, religion and art, including the political skill of rhetoric). The singling-out of politics as an area of life that must be restricted is too obviously a reactionary impulse, so better try something a bit more sophisticated: "So it is therefore also an opportunity not for suspending all thought about politics but for trying to put politics into a more life-enhancing balanced context. ... I know this from watching and listening to Wagner, and I know it with absolute certainty too: I know that political engagement and a sustained cultural life are twin necessities of the civilised condition, twin embodiments of the belief that the world can be a better place than it is".

In his latest post from the interface of politics and high art, Kettle sums up his worldview thus: "I’m fascinated by politics because it embodies life as it is in reality. I’m fascinated by music because it expresses life as it might ideally be." It might be a little glib to simply claim that I'm the opposite, but I certainly don't think that politics should be reduced to a pragmatic managerialism that stultifies imagination and reinforces conservatism. Politics must embody aspiration at the social as much as the personal level, otherwise it is reduced to the transactional, utility-maximisation of neoliberal lore. Equally, the idea that music gives us access to a higher realm is just religiose, po-faced nonsense (the traditional corollary of the idea that "primitive" rhythms are bestial). Kettle needs to muddy his Apollonian elitism in the Dionysian moshpit. Much great music succeeds because it provides a thrilling perspective on reality, not because it "takes us to a better place". I suspect Kettle's distaste for genuinely popular music reflects a fear of that mundane, unsettling power.

The recurring theme of Kettle's pieces is the "philistinism" of British politicians, which has long been shorthand for their isolation from the continent and reluctance to embrace the European project. The summer months, when well-paid columnists decamp to their spiritual homes in the Dordogne, Tuscany and various Mediterranean islands, is an opportunity to recharge cultural batteries in the warm south before re-engaging with the recalcitrant denizens of these misty, northern isles. For some, like Kettle, it is also a chance to reaffirm the "higher project" of neoliberalism, which has a well-known weakness for Alpine mountains, from Mont Pelerin to Davos. Wagner, and the festival setting at Bayreuth (pan-European, exclusive and with the faint whiff of transgression), offers an emblem not only of a syncretic European culture but of a higher power that animates our collective will, ensuring good order and common sense through its political personifications (Frau Merkel to the fore) while vouchsafing a hint of the sublime to the adepts of the invisible hand.

Wednesday, 29 July 2015

Timeless Values

The Iraq debacle and the crisis of 2008 meant that New Labour was never required to explain its wider failure (despite winning three general elections, it was progressively losing popular support). Though specific issues have been thoroughly criticised since - PFI, the poor returns to education, the lack of economic dynamism, the erosion of human rights - the neoliberal programme has largely escaped discredit. Even the claim that Gordon Brown spent too much in the later years is essentially an attempt to suggest that New Labour back-slid, reverting from its youthful Blairism to the slovenly ways of old tax-and-spend Labour. This has allowed the Blairites to continue presenting themselves as a progressive force in politics, sloughing off unhelpful baggage as the errors of Brown and Miliband. In this they have been ironically helped by the accommodating nostalgia of the Corbyn insurgency, which has been big on performative decency but light on policy specifics beyond the tried and tested (free childcare, nationalised railways etc). We appear to be stuck in one of those Gramscian moments when the new cannot be born, giving rise to the morbid symptom of Harriet Harman's interim leadership.

The criticism of Liz Kendall (more than the other candidates, who are clearly neither as "new" nor as Blairite) has often been about character, in which the left accusation of "Tory" (aka bitch) is as irrelevant and insulting as the Daily Mail speculating about her weight. British political culture has always been significantly more concerned with personalities than the "ishoos" that Tony Benn used to insist on, not least because it has managed to preserve the form of court politics, from Prime Ministerial patronage to the absurdity of the House of Lords. Though many have criticised the policy desert of the leadership contest, what commentators are really bemoaning is the lack of personality and novelty (the simultaneous eclipse of Boris Johnson means the Tories offer no respite), hence the excitement generated last week by the Old Pretender's latest intervention (the Young Pretender having presumably decided that familial loyalty obliges him to sit this one out).

As a hegemonic ideology, neoliberalism does not encourage self-doubt, but it is striking nonetheless how the Blairites have continued to annihilate their own past, insisting that historical inevitability requires the party to move further to the right ("win from the centre") rather than attempt to recapitulate any earlier purity. As Tony Blair insisted, "This change requires new thinking. And 2015 is not 2007 or 1997. So yes, move on. But don’t move back!". The theme of irresistible change is one of neoliberalism's key borrowings from Marxist thought. This is not the classical liberal belief in benign progress - social advance moderated by individual liberty - but the idea of change as a simultaneous threat and opportunity, a dynamic that creates its own contradictions and anxieties: the "global race", the need to invest in personal human capital, the surrender to the wisdom of the invisible hand etc.

The economic dimension of neoliberalism attempted to assuage the understandable fear of ceaseless change by claiming that the aggregate product of markets would be a form of optimal stability (the Great Moderation), which in turn suggested that even bigger markets (further globalisation) would lead to even greater stability. This has obviously lost credibility in recent years, with the restoration of "normalcy" requiring the cognitive dissonance of a belief in the market's simultaneous reliability and unreliability (the Chinese are embarrassing to the global order because they make this overt). In contrast, the political dimension has traditionally sought to leverage fear rather than assuage it, with the "global war on terror" being a prime example of how this then follows the pathways of economic interdependence. As Blair explained in the immediate aftermath of 9/11: "Today the threat is chaos; because for people with work to do, family life to balance, mortgages to pay, careers to further, pensions to provide, the yearning is for order and stability and if it doesn't exist elsewhere, it is unlikely to exist here" (so let's stabilise the fuck out of other countries).


This rhetoric insists there is no connection between the positive urgency of modern life and the negative threat of chaos. Instead, instability is framed as an external rather than an internal force; while the new economy is assumed to be the collective will of the people, rather than a politico-legal design. Warming to the theme of history's march, Blair casts globalisation as evidence of human progress: "But globalisation is a fact and, by and large, it is driven by people. Not just in finance, but in communication, in technology, increasingly in culture, in recreation. In the world of the internet, information technology and TV, there will be globalisation. And in trade, the problem is not there's too much of it; on the contrary there's too little of it. The issue is not how to stop globalisation. The issue is how we use the power of community to combine it with justice". Of course, this is "justice" in the sense that Rawls and Nozick redefined it, subordinate to principles of liberty and property and cavalier about historically-situated community.

One of the key features of the political implementation of globalisation has been the promotion of Carl Schmitt's "state of exception" (the idea that sovereignty is the power to proclaim an exception to the normal rule of law) from the national to the international sphere. Intervention in the affairs of another state has historically been justified through an argument between realism (states pursuing rational if morally-ambiguous self-interest) and liberalism (the imposition of one's own moral order, justified in the name of humanity or progress). Realism was the default position in the postwar era of detente, with the wars of the 1990s marking the shift towards liberal intervention. 2001 marked the globalisation of the state of exception with the birth of the apparently never-ending "global war on terror". Though there was a lot of facile talk about "blowback" in respect of US foreign policy after 9/11, the longer view will surely be that this was part of a wider process of globalisation in which al Qaeda did its bit by globalising terrorism (on a similar note, the symbolic power of IS is the idea - owing as much to postmodernism as the Quran - that the caliphate can be proclaimed anywhere).

Giorgio Agamben described the US attitude towards prisoners of the "global war on terror" in 2005: "What is new about President Bush’s order is that it radically erases any legal status of the individual, thus producing a legally unnameable and unclassifiable being. Not only do the Taliban captured in Afghanistan not enjoy the status of POWs as defined by the Geneva Convention, they do not even have the status of people charged with a crime according to American laws". In a globalised, porous world, this style of governmentality easily seeps back into the domestic sphere. Historically, we have tolerated the systematic abuse of human rights abroad and have had no difficulty compartmentalising our behaviour (consider David Olusoga's documentary series on the compensation of British slave-owners), but now we see little odd in repatriating this instrumental contempt for the rights of others, from curbs on domestic free speech, via suggestions that we strip UK citizens of their passports, to denying benefits to women who have the temerity to have a third child.

Though we are still prone to judging communities en masse, e.g. asking all Muslims to apologise for jihadis, the wider trend is towards a more individuated scheme of responsibility, seen most clearly in the "personal plans" and sanctions of welfare reform, as befits a marketplace of isolates paying mortgages and furthering careers. The consequence is that we start to lose sight of people's individual social grounding, and are then surprised to be disoriented by the chaos of the market. This has produced the amusing sight of the Labour party fretting about entryism by Toby Young and Derek Hatton (yer barred!), both excited at the prospect of paying £3 to vote for Jezza. Ironically, if they'd limited the leadership vote to full party members and union affiliates (i.e. actual communities), they wouldn't have had this problem, but that's the market for you. The vetting process appears to be to ask wannabes to agree with the statement "I support the aims and values of the Labour Party, and I am not a supporter of any organisation opposed to it". Tough.


As Tony Blair claimed last week, Labour's preference for heart over head "makes us mistake defending outdated policy with defending timeless values", though he rather ruined the effect by reducing those values to managerialism: "what is right as a matter of policy is right as a matter of principle". What the Blairites are reluctant to concede is that the "timeless values" that attract Labour supporters are not the likes of liberty or meritocracy, let alone pragmatism or the market, but the sort of instinctive solidarity and equality of outcome long dismissed by hardcore neoliberalism as the garden path that leads inevitably to the road to serfdom. Of course, the Labour establishment isn't going to diss these values to their face. From the Blairite permanent revolution to the reinvention of sterile historic forms by Tristram Hunt and Maurice Glasman, the aim is to regulate dissent. The mooted coup by John Mann and others is pure Carl Schmitt: we demand a state of exception now. What Corbyn's bemused candidacy has inadvertently revealed is that the timeless value of New Labour is intolerance.

Saturday, 25 July 2015

The Postcapitalist Imaginary

What is meant by "postcapitalism"? The trigger for this question was Paul Mason's recent puff-piece in the Guardian for his forthcoming book of that name. This isn't a critique of the book (a review copy has not turned up in the post) but a consideration of the concept and specifically what I take to be the determining philosophical frame. The idea of postcapitalism is implicit in the conceptualisation of capitalism as a historic force, so it's at least as old as the Communist Manifesto of 1848, but the term itself coincides with the popularisation of "postmodernism" after 1968. This is significant because postmodernism's scepticism about historicity and linear progress implies the coexistence of different stages of development, which is characteristic of the postcapitalist belief that the future is emergent and diffuse, rather than something that clicks into place come the day of revolution: "The future is already here – it's just not evenly distributed", as William Gibson put it. What I'm interested in is this postmodern inflexion of postcapitalism, which I think Paul Mason (to judge by his other writings on the subject) is representative of.

The first point to note is that postcapitalism has the characteristics of speculative fiction, not just because it imagines what a future society might look like, but because it takes inspiration from literature and cinema as much as history and economics. It is concerned with ethics more than econometrics. The postmoden influence can be seen in a tendency towards stylistic mashups and paradox, such as the trope of advanced technology recreating antique social forms: microserfs and the broadband-enabled crofter (steampunk is the ironic mirror of this, in which antique tech is reimagined in modern social forms). This also explains the privileged role of technology in the postcapitalist imaginary, as both a metaphor for the ceaseless energy of capitalism and a paradigm for its potential supersession. According to Frederic Jameson, in Postmodernism, or The Cultural Logic of Late Capitalism, "The technology of contemporary society is therefore mesmerizing and fascinating not so much in its own right but because it seems to offer some privileged representational shorthand for grasping a network of power and control even more difficult for our minds and imaginations to grasp: the whole new decentered global network of the third stage of capital itself".

The second point to note is that postcapitalism is an implied social critique of capitalist practices and institutional forms, such as marketisation, globalisation, the firm etc. Though history is littered with functioning economic systems that claimed (in so many words) to be postcapitalist, the term really gained currency as a response to the "actually existing capitalism" of the neoliberal era, particularly once it "finally triumphed" over those other systems in 1989 and the Washington Consensus became hegemonic. However, postcapitalism is always at risk of lapsing from a specific critique into an emotional rejection of modernity that culminates in the construction of a pre-capitalist idyll (but with WiFi); an antique society in which freedom from the market simply reproduces older forms of oppression. Some of this reactionary impetus is merely the employment of older templates for want of imagination, but some clearly appeals to a conservative yearning for order and certainty in the face of churning modernity, which is easily projected, like a Rousseau-inspired Instagram filter, onto indigenous peoples and nature.


Mason paints a picture of an emergent process: "Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm". He groups a number of phenomena together as evidence of immanent postcapitalism, including the sharing economy, the commons and peer-production. "I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: 'This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation'".

The idea of immanence, like the phrase "survival mechanism" and the appeal to "a change in our thinking", points to the religious undercurrent of this analysis. The Gospels could be accurately summarised as "a new way of living in the process of formation" (that final word nods to Gramsci, the last Christian martyr). The use of terms such as "escape route" and "bolt-hole" also hints at the vestiges of hippy millenarianism that more broadly inform techno-utopianism, in both its libertarian and anticapitalist variants (if he ever writes a manifesto, Mason might employ as its rubric: "turn on, tune in and drop out"). The words "nurtured, promoted and protected by a fundamental change in what governments do" imply that the emergence of postcapitalism is dependent on the capture of the state, which is orthodox socialism. They also imply a political revolution ahead of a change in material circumstances, which is an odd proposition from anyone with a grasp of history, let alone a Marxist. Clearly, existing governments are in no hurry to "promote" an alternative to capitalism, and Syriza's experience suggests that even the mildly-sympathetic are likely to be ostracised and undermined by the rest.

The late 60s marked the end of the century-long era love-affair with technology as the driver of social progress (reliance on humankind itself having taken a knock at Auschwitz). This was partly driven by asymmetrical wars (notably Vietnam), the fear of nuclear catastrophe and the growing evidence of environmental degradation, but it also reflected the increasing anxiety of privileged groups in the face of social mobility and civil rights, both of which seemed to be enabled by technology, from new communication media such as TV to labour-saving devices that encouraged women into work. This ambivalence produced both varieties of rejection (from hippies to Christian Fundamentalism) and a conscious recasting of technology as the means both to achieve personal liberation and restrain state power, culminating in the famous Apple Mac "1984" advert.


The idea that technology might simultaneously save and destroy the world would give rise to a religiosity (the "technological sublime") that would lead to transhumanism and the singularity. More obliquely it would influence the Californian Ideology (aka "dotcom neoliberalism"), and in particular the idea of a networked society of the elect (the "digerati"), floating free of class relations and nation states. This took a predictable battering when the smoke of the dotcom bust lifted to reveal a landscape dominated by the new tech grandees, such as Apple and Google, but that just led to a doubling-down on the emancipatory potential of the technology, particularly as social media appeared to energise traditional autonomism and horizontalism. Much of postcapitalism respectfully nods back at the operaismo of Fiat workers and the work-in at Upper Clyde Shipbuilders, with little sense of irony.

Mason describes three aspects of the emergence of postcapitalism: the impact of technology on work (not just automation but the freelancing of the sharing economy); the abundance of information (i.e. zero-cost replicability and the vain - in his view - attempts to monopolise data); and collaborative production (which bypasses both the market and managerialism). The heart of this is an assumption that the replicability central to digital technology (though let''s not forget the pioneering work of the C60 mixtape) will progressively erode the value of capital goods, though paradoxically this assumes that the composition of capital will continue to shift towards the informational despite the declining returns. In other words, the tendential fall in the rate of profit is superseded by the tendential fall in the value of capital. Let's ask Taylor Swift what she thinks.

There is an echo here of a Marxist syllogism: technological determinism ("The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist") and the remorseless accumulation of capital ("the larger capitals beat the smaller") gives rise to the concentration and immiseration of labour ("What the bourgeoisie therefore produces, above all, are its own grave-diggers"), which leads to the supersession of capitalism. In Mason's version, technology both disperses and empowers labour, while simultaneously undermining the market value of information, which is taken to be the now-dominant form of capital. In combination, this produces a social movement that bypasses capitalist practices and institutional forms. This isn't persuasive. Mason is betting that the phenomena of the interstices ("co-ops, alternative producers, parallel currencies and local exchange systems") are harbingers of the future, rather than the limits of resistance. They haven't overtaken the economy to date, and there is no good reason to supect that high-speed broadband will make much difference.

Like the well brought up Marxist that he is, Mason does not neglect the dialectic: "Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism". This builds on the central Marxist idea of the inevitable gestation of first socialism and then communism from within capitalism, due to the system's own contradictions. This new variant of dialectical materialism sees technology take on the gravedigger role once reserved for the proletariat. Just as the concentration of labour was thought to herald the inevitable end of the bourgeoisie, so the diffusion of labour may do the same. Which is a neat irony, if true.

There are two obvious problems with this. First, the collaborative exchanges enabled by technology are as likely to reproduce social relations in which property dominates. This is clear from the early stages of the "sharing economy", in which "the larger capitals [continue to] beat the smaller". This might change, but I see few grounds for optimism at present. Mason insists that the new monopolies (Google, Facebook etc) "cannot last", but this is a profession of faith ("information wants to be free" - to be fair, he may provide more substance to this claim in his book). The evidence is that capital (with the state in tow) is doing a fine job monopolising data already. The decline in production costs for music may be driving prices towards zero, but profits are maintained because the same process is expanding the market. Let's not forget that per-track sales were introduced by Apple. When an Eskimo buys a 99-cent Elvis track off iTunes, that represents a slice of profit unattainable by the music industry in the 1960s. Ultimately this process must run out of steam; but not yet.


Second, huge areas of the economy are going to remain capital-intensive. While Mason redefines an airliner as an "information factory", it remains a damn expensive factory. The Internet has shown itself to be powerful in exploiting the collective knowledge of people (both data and programming), in a way that was hitherto impossible, but there is little evidence that it's about to democratise mining or car production. Says Mason, "We can predict, from this, that postcapitalism – whose precondition is abundance – will not simply be a modified form of a complex market society ... Information goods are freely replicable. Once a thing is made, it can be copied/pasted infinitely. A music track or the giant database you use to build an airliner has a production cost; but its cost of reproduction falls towards zero. Therefore, if the normal price mechanism of capitalism prevails over time, its price will fall towards zero, too". True, but the airliner itself will still cost millions, in the same way that Taylor Swift live will command a premium.

There has always been a strand of disappointment in modern Marxist theory with the the failure of the industrial proletariat to fulfil its historic role. This stretches from critiques of the soviet system to critiques of labourism. For some, the workers have been misled by state capitalists; for others, the fault lies in false consciousness and the resilience of capitalist ideology. This has led many theorists to transfer their hopes from the traditional vanguard to disadvantaged social groups, from Gramsci's subalterns through anticolonialism to identity politics. Come the hegemony of neoliberalism, this culminated in the binary opposition of the global "multitude" of Hardt & Negri and later the 99% of the Occupy movement. Even the modish "precariat" can be seen as an attempt to conjure into existence a contemporary class consciousness.

For many postcapitalist theorists, technology now replaces social relations as the defining characteristic of the progressive class, though this implies a degree of educational privilege that clearly marginalises the poor (you can't eat software or construct a dwelling out of it). Indeed, the transfer of our hopes onto technology looks like an admission of the redundancy of labour. As Mason puts it, "Today it is the network – like the workshop 200 years ago – that they 'cannot silence or disperse' ... By creating millions of networked people, financially exploited but with the whole of human intelligence one thumb-swipe away, info-capitalism has created a new agent of change in history: the educated and connected human being". This is to confuse the accessibility of the network with the concentration of will (have you seen social media?). Technophile postcapitalism wants everyone to be connected (and thus mediated) in order to fulfil their role as the "agent of change in history". This is not a million miles away from the Leninist view that what the "backward" corners of the Earth required first and foremost was industrialisation in order to create a proletariat.

Mason is understandably more authoritative when he deals with contemporary economics: "Austerity ... means driving the wages, social wages and living standards in the west down for decades until they meet those of the middle class in China and India on the way up". This is spot-on, but he could also have noted that in the realm of ideology it entails harmonisation of political institutions and social mores as well. While this takes a progressive turn in the developing world (i.e. becoming more like the West, which obviously produces tensions), it means a return to more hierarchical and familial forms in the developed world (which produces other tensions). By this I don't mean cultural conservatism (e.g. anti-gay), but rather the redefinition of progress in liberal bourgeois terms (e.g. pro-gay marriage while suspicious of fecund single mothers). Where freedom once meant the ability of an abused wife to leave her husband and get a council flat, it now means the right of a council tenant to buy her property and leave an unencumbered inheritance.

Is this an ultimately vain attempt to resist the social transformations triggered by technology, or is it actually the product of those changes? Is the historic purpose of the Internet the creation of a truly global bourgeoisie? The message of globalisation may be that we can no longer develop independently (the eurozone crisis may be telling us the same thing). As the factors of production become more mobile (and we might consider information as a new factor that is perfectly mobile), wages are diffused, which is good for Bangalore but less good for Birmingham. In aggregate, this actually increases scarcity because it increases demand. There is then a race between the growth of a global population with disposable income (or debt) and the fall in production costs of commodities. I suspect there will be enough scarcity (real or engineered) to support capitalism for some time to come.


The problem with vulgar informationalism (e.g. the "knowledge economy") is that it focuses on pure forms that are often marginal in their economic impact (Wikipedia wiping out the encyclopedia business is a very small earthquake), though they may have a strong ideological role in culture. Thus we routinely elevate social media above database technology (I never thought I'd feel sorry for Larry Ellison). We forget that institutional forms of capital are just as likely to adopt new technologies as be undermined by them. Railways easily moved from steam to diesel to electric-power. There is a clear continuity between the first factories of the eighteenth century and modern "sheds", even if the latter are increasingly populated by robots. Selling books on social science or economics to a generalist audience requires bold claims, so Mason is obliged to predict a clean break despite conceding that the emergence of capitalism itself was not the product of any such sudden shift. Political revolutions, such as 1642 and 1789, marked the culmination of phases in a much longer revolution in technology and social relations. The idea that capitalism (and presumably the capitalist state) will soon wither as a result of a technology that was purely theoretical as recently as 50 years ago is nothing if not ambitious.

Postmodernism's scepticism about historicity, the idea that we can meaningfully understand historical events and divide them into chronologically unique periods, was both a response to the assumed acceleration of modernity and its simultaneous loss of focus/telos. As Francis Fukuyama's End of History meme would show, this attitude could easily serve an ideological purpose after 1989, insisting on the reality of progress but denying the possibility of dialectical historical change. In other words, denying the possibility of any future "post" state: neoliberalism as the eternal present. The response to this in the 90s was the growth of "anticapitalism" as a politics of resistance and rejection, or just bloody-mindedness (the anti-globalisation protests, the anarchist "black blocs", the slow movement etc). As the rediscovery of history in the Balkans, the Gulf and eventually downtown Manhattan proceeded apace, this gave rise to a renewed desire to describe what a better world might look like. Postcapitalism is the combined product of anticapitalism, the social implications of the Internet, and the paradoxical ahistoricity of late capitalism, which in denying any further linear progress opens up the possibility of departures in an unlimited number of other directions.

A final thought. Turning once more to William Gibson: "When you want to know how things really work, study them when they're coming apart". Postcapitalism isn't a species of utopianism, in the sense that a teleological critique like Marxism can be said to imply a utopia. Postcapitalism is a continuation of the twentieth century programme to deconstruct capitalism, to uncover the ethical, rather than scientific, basis of its inner workings, which is why it has enjoyed such a vogue since 2008. Postmodernism has served to exempt it from the obligation to explain how its normative strictures can come into being (why what should be will be), which in turn shields it from the charge of pessimism levelled at earlier critical theory (why what should be cannot be). Its embrace of technology is instrumental and usually couched in language indistinguishable from that employed by journalistic boosters and evangelical business consultants. For all its talk of the social and the collaborative commons it is primarily focused on the personal, imagining "escape" in the same way that trains and automobiles once offered a route out of rural idiocy, or imagining "salvation" in the manner of deracinated social mobility. Postcapitalism looks remarkably like emancipatory capitalism.

Monday, 20 July 2015

What is the Purpose of Labour?

Let us accept that the purpose of a political party is not simply to represent a class interest, but to manage an element of the political economy in furtherance of that interest. Thus the purpose of the Conservative Party is to manage parliamentary democracy in such a way as to preserve and reinforce existing privileges. The purpose of the Labour party is to manage labour in the interests of capital and the liberal professions. This isn't a cynical view, merely a reflection of its actual achievements, notably the development of a welfare state focused on improving the quality of labour, and the creation of a hierarchical public sector that privileged the professions. Beyond that, Labour's record in office has merely been the continuation of cautious liberalism by other means.

The current angst over the Labour party's purpose is the product of an era in which workers are increasingly surplus to requirements. This is the result of two, inter-related developments: the rapid advance of information technology, which is simultaneously reducing the demand for domestic labour and increasing the supply of global labour; and the shift of focus for capital expansion and accumulation from the developed to the developing world. In a word, globalisation. While it's moot whether we'll achieve a post-scarcity economy, we are clearly moving to a stage in capitalism's long history where jobs are no longer effective as a universal mechanism of value exchange: balancing the distribution of social wealth (wages) against exploitation (profit). Since the 80s, we have mitigated this through various formal and informal job-creation schemes, from workfare and public sector investment through "bullshit jobs", precarity and the spread of self-employment. These are clearly fragile and inefficient responses.


According to the Invisible Committee, "Today work is tied less to the economic necessity of producing goods than to the political necessity of producing producers and consumers, and of preserving by any means necessary the order of work. Producing oneself is becoming the dominant occupation of a society where production no longer has an object: like a carpenter who’s been evicted from his shop and in desperation sets about hammering and sawing himself". This performative workerism becomes ever more anxious, hence the increasingly paranoid language about "strivers" and "shirkers". This presents a problem to Labour as a party centred on the social value of work, i.e. the belief that we become individually and collectively better-off through work and that the welfare state is a necessary adjunct of the world of work. In contrast, the Tories can thrive politically in an economy where a job moves from being a right to a privilege, and the welfare state is recast as the burden of the workless on the workers.

The Labour leadership contest has been bereft of any real situational analysis, beyond rightist scares about an "existential crisis" (the wall-to-wall coverage the Observer gave to the latest Blairite "directed focus group findings" was hilarious: to determine the way ahead, speak to a tiny sample of Tory voters who obliging parroted Tory propaganda). The contest has been equally bereft of substantive policy debate (ironically, it took Harriet Harman's misjudgement over benefit cuts to spark the contenders into life). As a result, it is essentially a competition of moods: accommodation versus resistance. While the latter has the better tunes, Jeremy Corbyn is likely to lose simply because Labour's raison d'etre is ultimately accommodation. That said, it is worth noting that his fleeting popularity (like that other maverick, Donald Trump) owes much to a visceral distaste for managerialism and the denial of autonomy, and that both the electoral success and the institutional failure of Syriza in Greece is feeding the anti-establishment mood.

Guy Standing of precariat fame notes that "the progressive march of history ... is always about the struggle over the key assets of the time. And in this regard we are living in a tertiary society, not an industrial society. The key assets now are security, time, information (or knowledge) and financial capital, not machines, buildings or other physical assets". Labour, as a democratic socialist party, was initially concerned with the parliamentary struggle over the control of capital (nationalisation). From the 1930s onwards, it transitioned towards a social democratic party, struggling over the control of labour (via the medium of the welfare state), which marked its evolution from an ostensible working class vanguard to a middle class managerial elite. Since the 70s, it has failed to come to terms with the shift that Standing outlines, too often focusing on the low-hanging fruit of the trivial democratisation of knowledge (e.g. academies) and financial capital (e.g. ISAs), while happily ceding control of physical assets to the market. Pro-capital in-work benefits have been its chief policy for addressing security. Notable by its absence has been any attempt to address the issue of work time.


For accommodationist parties like Labour, whether social democratic or neoliberal, there are three options in respect of work time. First, the party can advance a citizens basic income as an continuation of its historic pro-social and redistributive mission, accepting both that the solution must be universal and that it needs to address societal wealth as well as work. Second, it can advance a job guarantee as a continuation of its commitment to full-employment, committing the state to being the employer of last resort and insisting (despite the evidence) that unemployment will remain cyclical. Third, it can advance a managed transition to a parsimonious dole, policing the "left-behinds" and valorising workers/tax-payers. The problem Labour is faced with is not which strategy makes sense in economic terms - the basic income wins hands down - but how this can be effected politically. As the old joke has it: it works in practice, but does it work in theory?

One of the reasons for the reluctance to address a basic income is the recognition that popular macroeconomic understanding has been set back relentlessly over the last 30 years with simple notions such as aggregate demand and multipliers dismissed as abstruse and technical. The parables of microeconomics are now so widespread, from national credit cards to leaky roofs, that any plan that relies on social trust, rather than individual responsibility, is considered crazy talk. Explaining the positive benefits of a basic income on entrepreneurship, innovation and wellbeing is an uphill struggle. It obviously doesn't help when some advocates of a basic income are hamstrung by their ideology (e.g. the anti-growth Greens), but the bigger problem is shifting discussion on a basic income away from a benefits substitute to a more rational way of managing an economy characterised by a declining demand for labour and an abundance of capital.

The job guarantee is a perfectly good response to cyclical unemployment, but it is wasteful and ultimately unsustainable in the face of structural unemployment. The public sector cannot be allowed to compete with the private sector, so both wages and the social value of the work must be inferior. If a profit can be made in any activity, the public sector will have to cede it to the private sector. Consequently, a large-scale job guarantee scheme might well accelerate privatisation and drive down wages for the public sector as a whole. As the number of guaranteed jobs grows over time, so society is coarsened and impoverished. The job guarantee is often advocated because of the presumed externalities of work: on-the-job training and informal skill development, community cohesion and social stability, improved mental health and self-esteem. However, it is doubtful that these benefits would accrue over a long-term dominated by structural, as opposed to cyclical, unemployment. Instead, the job guarantee might produce a new helot class, unable to break into an ever-shrinking pool of private sector jobs and condemned to low-value, pointless toil that undermined self-respect.

The instinctive response of the Tories is to create a parsimonious dole. In practice this will be a basic income, but one that has been birthed out of the existing infrastructure and ideology of benefits, primarily through the creation of limits: the overall benefit cap, the cap on housing benefits, the cap on child benefit etc. This "capping" has become the dominant motif of debate around the funding of the unemployed and the underpaid. It is important because it removes the key distributive mechanism of a basic income: the ability to distribute the fruits of growth by gearing the income level to GDP as opposed to prices or private sector wages. A related tactic has been to question the definition of poverty: what constitutes an acceptable standard of living. The "national living wage" is clearly intended to depress that level, but also to act as a de facto cap - i.e. the implied limit of ambition for equivalent benefits.


Though the state will reserve the right to mandate the wage level (Osborne's marginalisation of the Low Pay Commission is only superficially centralising), in practice the level will be determined by capitalist sentiment. This will inevitably bias downwards in real terms, with business leaders claiming that a generous increase will damage confidence. Though the Tories are effecting a small step up in the short-term (more than offset by benefit cuts), the longer-term trend will be as mean as before. In theory, a Blairite Labour Party might match the rhetoric while being more generous in practice; but, as they found with working tax credits, any mechanism that can be gamed by the private sector will be so gamed, leading to the unintended consequences of under-investment and declining productivity. Even accommodation presents choices: do you accommodate automation and liberate labour, or do you accommodate the implicit blackmail of business's monopoly on the declining pool of jobs?

Labour's strategy since the 80s has been a combination of corporate indulgence (to encourage and subsidise job creation), and public sector investment, to both improve the quality of labour (supply-side) and create jobs (demand-side), particularly in regions unable to independently attract private capital. The limits of this strategy have become obvious, with low levels of corporate investment and high levels of corporate tax avoidance, endemic low-pay and increasing job insecurity, and a beleaguered public sector. The Tories long term strategy towards the welfare state has always centred on division, from the defence of private beds in the NHS, through a preference for means-testing over universalism, to the current speculations of Iain Duncan Smith on Schillerian insurance markets (as with pensions, it can't be long before NICs are "liberated" for employees and abolished for employers). Labour's desire to "revive the contributory principle" risks reinforcing this turn.

The Tories attempt to rebrand themselves as the "workers" party is not merely chutzpah or an attempt to deny the word to Labour ("recasting it as the badge you wear when you earn a living, and you resent subsidising anyone who doesn't", in the words of John Harris). It is a recognition that the core employed (i.e. those with well-paid jobs, rather than the precariat) are a shrinking segment of society that is increasingly open to a pitch based on fear, the preservation of gains, and the acceptance of privilege. This is an old strategy with its roots in the working class Toryism of  Disraeli, which sought to combine deference (the organic "one-nation") with sectional appeals during periods of social and economic turmoil (e.g. anti-Catholic sectarianism in the face of Irish immigration). Despite the Bullingdon Boys, modern working-class Toryism has decisively shifted away from deference since the 1960s towards aspiration (i.e. self-interest), which was nicely illustrated this week by The Sun's publication of a photo showing the royals giving Nazi salutes (this was also an early shot across Cameron's bows to keep the royals away from an EU referendum that will inevitably feature anti-German sentiment).

In response, some on the centre-left have sought to recast Labour as a party of nation and community, detaching it from the workplace (as Harris puts it, "As the great grey millstone that is Labour’s name still attests, paid employment is too often assumed to completely define people’s sense of who they are"). This has produced multiple morbid symptoms, from the sentimental authoritarianism of Blue Labour, through the civic nationalism that casts envious eyes at the SNP, to the Village Green Preservation Society of the likes of Harris ("Labour should finally think seriously about what needs to be conserved and protected: the town centre, the green-belt fields, the bus route, the pub" - Blake and Orwell are never far away). What they all share is a belief that the party should desert the field of the economy (or at least choose to fight more of its battles elsewhere) because labour is increasingly excluded from it. This is the resigned acceptance of enclosure.


Labour was (and was proud to be) the party of welfare when that was seen to be joined at the hip to work: temporary unemployment assistance in an era of full employment; health care and education for workers and their families; and council housebuilding (good accommodation at affordable prices) intended to make up for inadequate private sector provision. Over time, neoliberalism has normalised the traditional Tory critique that welfare is an opponent of work, rather than its necessary support. As welfare has come to be the defining characteristic of the jobless and precariously employed, Labour has sought to cling ever more tenaciously to the life-raft of work: rebranding as business-friendly New Labour, insisting that rights are contingent on responsibilities (they must be "earned"), and treating benefits as evidence of poor personal choices.

The choice embodied in the Labour leadership contest should be about more than just the mood music of accommodation and resistance. It should be about the need to change Labour's purpose to meet the changes in the economy. The New Labour project has failed: we are not a "young country" with high skills and world-beating businesses, generating well-paid jobs and affordable housing. We are a country marked by growing inequality, rentiers, low investment, poor productivity and a worsening balance of payments. Labour will remain accommodationist, but it needs to get back on the front foot as the party best able to manage the transition to a post-work society. Its new purpose should be to "reform welfare", but not in the sense of treating it as an opponent that must be tamed. Instead it should acknowledge that welfare is a universal right and the goal is to manage it in the interests of all, rather than a few. It is welfare that needs a rebrand.

Saturday, 18 July 2015

Managerialism and Innovation

Chris Dillow asked an interesting question recently: "Could it be that the spread of managerialism and the pursuit of 'efficiency' in the static sense of trying to maximize output for given inputs has squeezed out innovation?" I'm not convinced that innovation is generally in decline (the Robert Gordon thesis), but I do think there have been significant changes in its institutional form, and this - combined with a generational misunderstanding of the significance of software - may lead some to pessimism. Where I think Chris errs is in building the following claim: "If this is the case, then perhaps secular stagnation is not so much an aberrant feature of hierarchical capitalism as its logical consequence ... managerialism squeezing out the slack space in which innovation can occur." This implies that managerialism, and its deleterious effect on innovation, is the main cause of secular stagnation, and it further implies that managerialism is a recent development. In contrast, I'm of the view that stagnation is largely the fruit of innovation, and specifically the revolutionary dynamics of software, and that managerialism was born with capitalism and reached maturity over a century ago.

In theory, manageralism is the belief that professional managers are best equipped to administer and plan activity. This isn't the simple advocacy of management (planning, checking and so forth), but the insistence that there is a orthodox body of knowledge and techniques, supported by qualified professionals, that should be applied universally to optimise human activity. Because this orthodoxy is exogenous, it necessitates hierarchy (the dominance of the expert over the non-expert), accountability (feedback between the two) and measurement (the close inspection of the non-expert by the expert). These characteristics are often taken to be managerialism, but it is important not to lose sight of the significance of the word "professional". If its mode is control, its motivation is power. At root, managerialism is elitist and therefore anti-democratic. Like much of business practice, its roots lie in religion (consider the etymology of "professional" and "clerical") and the wider social transition of the Early Modern era.

The notion of a meritocratic elite independent of the social order was crucial to the development of both Protestantism (e.g. the Calvinist elect) and Counter-Reformation Catholicism (e.g. the Jesuits). Emerging from scholasticism, professionalism would first absorb post-Renaissance empiricism and then the "bourgeois revolutionary" mode of the Enlightenment during its secular diffusion. The growth of industry in the eighteenth and early nineteenth centuries saw it increasingly adopt the practices and language of engineering. Though the occult habits of old lived on in Freemasonry, there was a clear shift in the first half of the nineteenth century from the adept who masters arcane knowledge to the "practical man" (or woman, if you consider Florence Nightingale's exemplary managerialism at Scutari) who masters public knowledge, both in the sense of the corpus of scientific evidence and quotidian data within his sphere.

This is the point when we can start to talk of "managerialism" as a generic approach. By the late nineteenth century, it had expanded beyond engineering to business more generally, notably in the form of the "scientific management" of F W Taylor in the USA, which was influential on both the Fabians and the Bolsheviks (it's wrong to assume the managerialist infection of government started with neoliberalism). It was also influenced in Europe by the contemporaneous growth of corporatism. This was a response to industrialisation that combined both Catholic notions of organic community and reactionary political notions of nationhood, seeking to reconcile different interest groups in the service of social "harmony". It was a major ideological current that fed into Fascism and Nazism, and the remnants of it could be seen in the postwar era in Christian Democracy and the co-determination of the social market economy.

In practice, managerialism is fundamentally teleological, in its insistence on purpose (mission statements, targets) and its emphasis on perfectibility, seen in such practices as CQI, TQM and Six Sigma. It is also evangelical and imperial, in its insistence on a single truth that can be applied universally. MBA courses are sold as "object lessons", and thus commodities, a form that they have inherited from mass-produced religious tracts (the same influence can be seen in the "parables" of neoclassical rational agents and behavioural economics). Managerialism is also prescriptive, in its reliance on magisterial texts supported by "case histories" (which often turn out to be convenient fictions). Popular business books exist to emphasise the transformative power of simple rules, the need for intervention and close inspection (unfettered by society), and the inevitability of ongoing corporate reinvention.

Ideologically, shifts in management theory reflect the changing needs of capital. For example, the diffusion and disempowering of labour was enabled by process reengineering and human capital theory; the first abstracting work design from consideration of actual workers, and the second emphasising the need to cultivate (and thus divide) workers as individuals rather than as members of a group. It also gave rise to organisational learning, as institutional and tacit knowledge were eroded through outsourcing, offshoring and casualisation. Similarly, the reverse takeover of the state has witnessed not only the adoption of market-based mechanisms by the public sector, but also the assumption by the private sector that it has equivalent rights to the state but without similar responsibilities, for example in the area of data privacy and surveillance.

Managerialism is now so pervasive that it is more helpful to define it in terms of the things that it prohibits. Chief among these is autonomy (the claims for the value of autonomy within businesses, like the notion of "managed democracy", are specious). Managerialism assumes that intervention by outside experts is always beneficial and routinely denigrates tacit knowledge ("not invented here syndrome"). Behind this is the premise that organisations are inherently inward-looking and traditional ("always done that way"). But rather than a critique of capitalist hierarchy, this is framed as an individual failing, with the objective being to "save" or "turn around" the specific organisation. In the same way that modern notions of addiction and rehabilitation employ the traditional tropes of demonic possession, weakness of the flesh and personal religious salvation, so the practice of managerialist intervention is big on missions and revivals.

Managerialism also deprecates unpredictability (famously satirised in the "mystery" scene in Shakespeare in Love). This is more than risk-aversion. Capitalism appreciates the value of speculative ventures and creative destruction, but this is because it is optimistic about its own ability to overcome obstacles and setbacks. What it cannot abide is the presumed unpredictability (i.e. unreliability) of labour, which is why it is fundamentally pessimistic about human motivations (people are naturally lazy, greedy etc). Where it has occurred, the corporate indulgence of "obliquity" (the investment in curiosity and thus the possibility of serendipity) has tended to be either the result of independent funding guarantees (e.g. the importance of US Department of Defense money for the original "skunkworks") or a combination of low R&D costs and a desire to motivate staff (e.g. Google Time depends on the material cost of self-directed projects being trivial, while labour time is recouped through a willingness to overwork on other days).

Outside such formal arrangements, and particularly those tech companies that make a fetish of research as part of their brand, informal slack space has clearly declined as many businesses have become leaner. R&D has been increasingly outsourced, however this may ultimately be a good thing if it bridges the traditional pure/applied divide between business and academia. Globally, both pure and applied research resources are growing due to rapid expansion in the developing world, and there seems little let up in its cultural celebration, from The Theory of Everything to the current Pluto mission (essentially academia's inheritance of the medieval "duty of prayer"). Innovation has increasingly left the building (of the large company) and become dispersed among many more nodes, of which startups are just one class. This reflects the way that ICT is reducing the cost of research in many areas, both as as a general purpose technology and through the leverage of new information networks (let's not forget the origins of the Internet).

It's plausible to imagine that the flexibility and virtuality of the modern economy (from the "precariat" to Uber) is facilitating "decorporatization", whereby lower transaction costs allow businesses to move towards the Coasian ideal of a small group of contract managers. With labour dispersed and atomised, and the "slack space" of the old corporate world no more, it would be easy to conclude that innovation was in decline and that this was sapping capitalist vitality. But it's worth noting here that one of the criticisms of Taylorism a century ago was that it stifled innovation. Clearly that was unfounded. Managerialism is inimical to innovation (or at least undirected innovation) because it is a technology of power and innovation potentially challenges the established order (see The Man in the White Suit for an emblematic mid-century critique), but the evidence is that managerialism is no more successful in taming or inhibiting innovation than predestination and the Jesuits were in preventing the advance of atheism.


Innovation is the product of human curiosity rather than the availability of corporate space. What has happened is that the technological changes that have been exploited by managerialism to create leaner organisations and disperse labour have also served to disperse and democratise innovation. Whether this will lead to the final crisis of capitalism, as Paul Mason thinks, I will leave till another day.

Monday, 13 July 2015

New Order

The party of order has won. A split in Syriza is now likely and a new Greek government of national unity the most probable outcome. I suspect Tsipras will remain at the helm, partly because the eurogroup want to tie him to a personal guarantee of implementation, and partly because the leaders of the mainstream Greek parties lack credibility and don't want to accept a poisoned chalice. The specificity of the terms of the agreement, and the insistence on reimposed inspection and homework-marking, are humiliating for the Greeks. If this isn't quite a Carthaginian Peace, it certainly echoes the punitive and counter-productive attitude of Versailles in 1919. It is even faintly redolent of the arrogance of the Allied takeover of Iraq in 2003, with its talk of "de-politicising" the Civil Service. What is perhaps most disturbing is the evidence that the eurogroup were never sincere during the negotiations, and that all key decisions were dictated by Germany.

However, it is misleading to call this as a "coup", as power has not be seized. The power was already in the hands of the Troika and had been since 2009. Syriza have always had a poor hand, but they thought (not unreasonably) that the rest of the eurozone would reckon an easing of austerity to be a fair price for a genuinely reformist government. In the event, Syriza's "impudence" has only produced a more vindictive imposition, both to preserve the fiction of beneficial austerity and isolate any political initiative outside the orthodoxy. That orthodoxy is now as much ordoliberal (the adherence to established rules) as neoliberal (deregulation, marketisation etc). As a consequence, talk of a fissure in Europe has shifted from German-Greek relations to German-French relations, though the evidence from Varoufakis (who is, admittedly, not a disinterested observer) is that the French failed to stand up to the Germans when it mattered.

This is hardly surprising. The French crisis of confidence over recent decades has a number of causes, from stylised declinisme (equal parts nostalgia for De Gaulle and the soixante-huitards), through anxieties about modernity (the role of women, laicité, Islam and the rise of the FN), through fears of creeping Americanisation and cultural homogenisation (notably the advance of English). But at root, there lies a fear that in a German-dominated EU France will be marginalised, with its natural supporters (Italy, Spain, Portugal and Greece) exiled to the periphery and Germany buttressed by a hardcore (Kerneuropa) of Austria, The Netherlands, Finland and the Baltic states. This begins to stir uncomfortable memories of both the foreign policy failures of the later years of the Third Republic and the pathological denial of Vichy: a failure in its historic objective of constraining Germany followed by an abject humiliation.

There is a suspicion that the relentless face-punching of the Greeks is meant to be an exemplary lesson for the French. If the attitude of France in the aftermath of 1989 was essentially one of skittish worry - that Germany would be distracted by reunification and so neglect the joint project of the EU - the attitude now is one of sphincter-squeaking anxiety at Germany's evident willingness to lead. The claim last week that Angela Merkel was in a cleft stick - terrified of being the leader who oversaw the first substantive reverse for Europe, in the form of a Grexit, while simultaneously terrified of alienating popular opinion at home - looks absurd in retrospect. She was always going to get a deal, and always on whatever terms Germany chose. The pro-Greek rhetoric from Hollande and Renzi on Sunday, like the subsequent claim that France was the active midwife of the agreement, was just face-saving.


Three years ago, Perry Anderson put the emerging German role into historic perspective: "To work, the Union requires the state that is a different order of magnitude in population and wealth to give it coherence and direction. Europe needs the hegemony of Germany, and Germans must cease to be shy in exercising it. France, its nuclear arsenal and seat in the Security Council now of little relevance, must adjust its pretensions accordingly. Germany should handle France as Bismarck dealt with Bavaria in that other federal system, the Kaiserreich, soothing the lesser member with symbolic awards and bureaucratic balances under Prussian primacy". This view is coloured by Anderson's increasingly unsympathetic view of the French, but he is also aware of the inherent weakness of Germany and how its obduracy reflects immobility: "The new hegemon may be flexing its muscles. But it remains a lame one, unable either to dismantle the monetary union generating disorder, or to move beyond it towards a political union in which it would have to accept fiscal transfers its electors refuse".

Absent any vision for the EU beyond the preservation of order and a respect for rules, the Germanification of Europe proceeds incrementally: a slow march through the institutions. As Eric Bonse puts it, "The old complaint of a 'pro-French bias' in Brussels has fallen by the wayside; German personnel policy has won the day. Almost all the strategically important positions are now held by Germans, and understandably this is not received with universal enthusiasm. ...  A special characteristic of this casting is that some lead roles are reserved not for Germans but for politicians like Tusk or Juncker, who have close ties to the German government. ... all EU actors – and not just the Germans – are integrated into a regulatory framework that turns them into German Europe's pawns." Historically, France and Britain were the leading providers of the senior civil servants of the EU Commission, which reflected the larger governmental expertise of those two states in the second half of the twentieth century. No more.

Though Germany had long enjoyed indirect influence via the Bundesbank, the launch of the euro and the establishment of the Frankfurt-based ECB brought more of the German style of administration into the workings of the EU. In particular it shifted the normative framework away from the counter-cyclical policies of Keynsianism, while placing a greater emphasis on regulating monopolies and cartels (e.g. its attitude towards US tech companies). That combination of belt-tightening and market intervention is central to the Greek agreement. As Bonse notes, "German Europe is not chiefly held together by individuals, but by rules – just as the 'ordoliberal' school of thought demands. Yet these rules have brought Europe neither growth nor stability. They are fragile, in need of enhancement or even failing. They are also no longer recognized by all EU countries – in fact, quite the opposite: Greece, alongside the UK and Hungary, is more or less openly laying down a challenge to the rules. In short: German Europe is stronger, but at the same time more vulnerable, than ever before".

While some have opportunistically tried to corral Greece with the UK as a dispute over sovereignty and subsidiarity, the Procrustean fate of the country is actually symptomatic of Germany's failure in its leadership role, not a difference of views over "ever closer union". The corrosion of democracy does not arise solely from the flaws of the euro itself, but from the limiting beliefs of Ordoliberalism. Europe is moving from the republic of ideas, which was founded in Paris in 1789, to a republic of rules, which was constituted in Frankfurt in 1998. The French feel powerless to resist this, while the British are concerned solely with self-interested exemptions. Everybody else is making their peace with the new German order; some more messily and painfully than others.

Saturday, 11 July 2015

Osbornomics

Many people appear have been nonplussed by the apparent contradictions of "Osbornomics" revealed in this week's budget statement: welfare slashed, but the minimum wage up; the bank levy relaxed (for bigger banks), but a new apprenticeship levy imposed on big businesses; corporation tax down, but tax on dividends up; inheritance favoured, but buy-to-let disfavoured. For some, this is just evidence of Osborne's obsession with political positioning; for others, evidence of opportunism and incoherence. These are not mutually-exclusive. Those expecting a landmark budget - one that would reset the assumptions of economic policy, like Geoffrey Howe in 1981 or Nigel Lawson in 1988 - were disappointed, with the suspicion mounting that this iteration was uncomfortably close to the "omnishambles" of 2012, despite the avoidance of self-inflicted wounds like the pasty tax.

Given the lack of any clear economic focus (the subsequent productivity plan was largely tinkering), most of the commentary has veered towards a political interpretation. For example, Simon Wren-Lewis noted that "Most of the Conservative base is not devoted to the cause of free markets, but is passionate about their own families' income and wealth"; while Tim Harford was equally scathing: "Mr Osborne promised a Budget for working people but reality does not match that sound bite. The biggest tax break was for people inheriting expensive homes from their parents". As reliable as clockwork, Martin Kettle piped up that "George Osborne's budget was more New Labour than Thatcherite". His evidence? "It was a budget that reduces the size of the state while using the state's power to intervene in labour markets and raise pay". This ignores the fact that state intervention is not, contrary to myth, anathema to Tories, as even the IEA recently pointed out, but to accept that would be to admit the narrow ideological space between New Labour and the Conservative Party.

According to Kettle, "Many on the left, and some on the right, believe all modern UK politics exists in the shadow of Thatcherism. In this view, as Britain was de-industrialised after 1979, there was an epochal battle between neoliberal, small-state and socially authoritarian ideas against social democratic, mixed-economy ideas". This is not just the usual triangulation that insults the intelligence of anyone who is not a centrist. It continues the fallacy that neoliberalism desires a small state and is socially authoritarian, when the evidence (from the size of the state to gay marriage) is to the contrary. Thatcher was certainly a social reactionary, which might be taken to contradict her laissez-faire attitude towards economics, but that fails to situate her historically: she owed more to the pessimism of Hayek than the optimism of Friedman.


The Conservative party of 1979 was not neoliberal; and it came to power because Labour was exhausted, not because it promised a radical programme. It's cabinet members included a majority of Heathites (aka "wets") and traditional de haut en bas Tories, like Hailsham and Carrington, many of whom derided Keith Joseph, the nearest thing to a neoliberal, as a "mad monk", as much for his un-Tory-like fervour as his barking policy ideas. Kettle creates the strawman of an abrupt political shift, which obscures the slow march of neoliberalism to hegemony between the early-70s and the mid-90s. He insists that "This is not 'the same old Tories' – and it is important to understand why". In fact, this is very much the same old Tories, if by that is meant the historic party of property that long-predated Thatcher and the right-to-buy. Ironically, Kettle echoes Paul Goodman in seeing Osborne as an opportunist in the tradition of Disraeli, but views this tactically (the "political obsessive" meme that has attached itself to the Chancellor) rather than strategically.

"New Labour was a sustained first attempt to rebuild a post-industrial, more market-orientated form of social solidarity, which rejected the injustices and anarchies of the post-1979 neoliberal order as well as the economic unsustainability of the regime it replaced". While New Labour was certainly ameliorative and progressive, its commitment to a "more market-orientated form of social solidarity" was textbook neoliberal. Kettle is trying once more to detach New Labour from association with the now-toxic neoliberal brand, which leads him to reverse-engineer Blair & co as the progenitors of contemporary Conservatism: "So it might be more useful to think of the Cameron governments – as to some extent some of their members have thought of themselves – more as alternative successors to new Labour rather than to Thatcher". The suggestion that New Labour was a "second watershed", rather than the culmination of a process lasting a quarter of a century, is one more attempt to deny the real implication of Thacher's delusional boast that her greatest achievement was Tony Blair, namely that they were both phases of a common endeavour to entrench a state intervening decisively on the side of capital.

On the conservative right, Tim Stanley is happy to applaud the historical continuity of Osborne's stance: "It revisits that moment in the 19th century when capitalists first realised that a little regulation could both improve society, give workers a stake in the system and make everyone more profitable in the long-run". The libertarian right, represented by Allister Heath, acknowledges this genealogy but regrets that intellectual purity is being sacrificed for political expediency: "We now know that Mr Osborne’s brand of conservatism attempts to marry, not entirely coherently, a smaller state with extensive government intervention ... [His] beliefs are consistent with a philosophical tradition that has held sway in the Tory party for most of the past 65 years, with the crucial exception of the Eighties and early Nineties". In their different ways, both Stanley and Heath acknowledge that Osborne is no committed free-marketeer or instinctive state-shrinker. Their employment of the diminutive - "smaller", "little" - is just whistling to keep their spirits up.


We've seen two crucial interventions recently that reveal the nature of neoliberalism in what we may come to see as its dotage. The key event in Greece was not the decision of the eurozone group of 18 to ignore the referendum result, but the decision of the ECB to limit liquidity support last week, thereby pulling the trigger on Greece in slow motion. We were presented with the spectacle of a central bank deliberately undermining a national banking system for which it has ultimate responsibility as the lender of last resort. By extension, this meant undermining a popular government, confirming Varoufakis's subsequent characterisation of the euro's management as "disciplinarian". The power-play within the Troika (which has left the IMF looking a broken reed), and specifically the decision to bail out Greece's creditors and refuse any debt restructuring, saw the shift of neoliberal focus from capital access (deregulation, liberalisation, privatisation) to capital consolidation (the protection of accumulations and inheritance). Post-2008, neoliberalism has evolved from a historically progressive (if destructive and class-biased) force to a conservative and reactionary one. Consider the continued determination to black-ball Syriza from EU political society for not being sufficiently penitent.

The second intervention was Osborne's decision to restrict child benefit to two kids (I wonder if the Civil List will be similarly curtailed for any additional royal sprogs). Behind this is the idea of children as property. Historically, conservatism has been divided between a reactionary distaste for the breeding habits of the poor ("more mouths to feed"), which lives on among neo-Malthusians and some Greens, and natalism, which encourages large families as a matter of national policy (initially for bigger conscript armies and then for a growing labour supply). The former saw children as an asset that belonged to the family, hence the reluctance to allow its "cost" to be externalised onto society (but also the toleration of child labour, which externalisded its benefits). The latter saw children as an asset of the nation, hence the willingness to socialise investment, which started with medals for fecund mothers and culminated in the welfare state (its growth in the interwar and postwar years owing much to concerns over population replenishment). This policy change, as much as the further privileging of inheritance, confirms the lesson of Greece: that we are in an era focused on the preservation of capital, not its expansion.

Returning to Martin Kettle: "British voters remain highly receptive to a modernising Labour approach that shows it is in touch with the way the country and the world have changed and are changing. Whether Labour offers them that is what the party must now decide in its leadership contest. In the absence of such an offer from Labour, however, Osborne's budget will seem to many voters like a logical and not wholly unreasonable alternative". Kettle's insistence on historical inevitability, and the plea that Labour - as a modernising vanguard - should offer the electorate what is best for them, rather than what they might want, emphasises the degree to which neoliberal practice since the 1970s consciously borrowed from both Marx and Lenin. What Kettle has failed to accept is that neoliberalism dispensed with the revolutionary form in 2009. We are in an age of reaction, in which the preservation of gains is now paramount.

Wednesday, 8 July 2015

Timoney of Athens

My apologies for the title of this post, but I may never get a better opportunity to deploy this particular pun. The tale of a man who foolishly squanders his wealth on false friends that subsequently desert him in his hour of need, causing him to become a wretched misanthrope, might appear to be promising raw material, but I'd be doing serious damage to try and eke out any real parallels with the Greek debt crisis. However, I cannot pass on without noting that Shakespeare's play was a favourite of Marx, partly for its cynical view of the corrupting power of money. As the German summarised it, "Money, then, appears as this distorting power both against the individual and against the bonds of society, etc., which claim to be entities in themselves. It transforms fidelity into infidelity, love into hate, hate into love, virtue into vice, vice into virtue, servant into master, master into servant, idiocy into intelligence, and intelligence into idiocy".


The impression I gained last week from the UK press and TV was that opinion in Greece was evenly-divided. It was clear on the ground when we arrived on Friday that the "No" (Oxi) camp was well ahead, and I really don't think this was due to a mysterious midweek swing. I think the British media slant was the product of a schismatic reading of Greek politics and the habitual pro/anti-EU frame, rather than conscious bias, though the regular interviews with small business owners bemoaning uncertainty and neoliberals bemoaning democracy on Newsnight is becoming almost parodic. Though there were a few riot police lurking off-stage during the "No" rally in Syndagma Square on Friday night, there was no sense of antagonism or threat, despite the simultaneous (and much smaller) "Yes" (Nai) rally at the nearby Panathenaic Stadium. "Oxi" dominated the posters and flyers around Central Athens, with the periptera (newspaper kiosks) providing little islands of "Nai" and anti-Syriza sentiment (one tabloid carried a magnified photo of Tsipras's face to suggest that stress was giving him cold sores).

Athens is always relatively depopulated in summer, as many locals head off for ancestral islands or rural villages, but this was even more pronounced due to the recent drop in tourist numbers caused by the scare stories of financial chaos. The longest queue we saw at an ATM was 5 people in the centre of town on the Monday morning. 0 to 2 was typical. It's worth remembering that living costs in Greece are relatively cheap, so a €60 a day limit is not quite the problem that London-based media types imagine. The cafés were probably about half as full as they would normally be, though those in both Exarchia (anticapitalist) and Kolonaki (rich) remained busy. The Greeks are having a hard time, but they are not on their knees (yet), hence the defiant "Oxi!". The historic significance of Sunday was the precedent of a national referendum being used to reject an EU-level agreement. Though this has happened before, notably during the Maastricht Treaty ratification process, it has usually been glossed-over as a "pause" or evidence of the need for "variable speed". There is no credible way to spin the Greek vote as anything other than a slap in the face.


The good humour of the Greeks (particularly evident as crowds gathered in Syntagma Square on Sunday night as the vote came in) should remind us that this "crisis" does not originate in Greek politics, despite the many historic failings of the Greek system, but reflects a wider struggle over the costs of neoliberalism, which is now corroding the EU. Greece is only atypical in quantitative terms, not qualitative. Steve Randy Waldman gets to the nub of the matter: "The choice Europe's leaders faced was to preserve the union or preserve the wealth, prestige, and status of the community of people who were their acquaintances and friends and selves but who are entirely unrepresentative of the European public. They chose themselves. The formal institutions of the EU endure, but European community is now failing fast ... They turned a systemic problem of financial architecture into a dispute between European nations. They brought back the very ghosts their predecessors spent half a century trying to dispel".

The architectural problems of the euro hardly need reiterating, but it is worth emphasising one key point: the implication of "convergence" was that the transition to a common currency could be achieved without the need to write-off historic debts. In other words, there would be no "reset", either in 1999 or thereafter. Despite last week's report by the IMF confirming that Greece's debt is unsustainable, this means that the group of 18 remain determined not to concede the Greek demand for a deal that includes a debt haircut. Despite the clearly exceptional situation of Greece, this would establish a precedent that the eurozone hardcore fear would quickly lead to either the disbanding of the common currency (to prevent the more incontinent members from "looting the treasury") or the acceleration of fiscal union (which might jeopardise the EU itself, even if some are attracted to the idea of shrinking back to "fortress hardcore").

In other words, the real cause of the EU's irritation with Greece is not Tsipras's "unreliability" or Varoufakis's "impudence" but the obligation to make a hard choice. Waldman is right to see the EU elite's response as a straightforward reflection of class interests, but I also think the current dilemma is coloured by the evolution of those interests since the fall of the Berlin Wall. Germany's tragedy was that social democracy quit the stage just before the moment it was most needed, namely at reunification. What Waldman calls the "loan shark theater" of the Greek crisis is in part the projection of a particular German angst over regional transfers, with the North-South EU divide inverted within the Federal Republic. To the Bavarian middle-class, the youth of Exarchia are indistinguishable from the "recipients" of Kreuzberg in Berlin.


This is the bitter legacy of the "Europe of the regions" meme that enjoyed such a vogue in the 90s and 00s, often as a rather hopeful counterweight to the "democratic deficit" of the EU. Though this was usually presented in progressive terms as a matter of devolution and autonomy, the reality was mainly wealthier regions, such as Catalonia and Lombardy, being reluctant to subsidise poorer ones. In those poorer regions (and outside those with a history of separatism, such as the Basque Country) devolution only gained traction once central government indicated a willingness to curtail transfers as part of a wider anti-redistribution policy, hence the birth of the meme in the 80s. For example, the advance of the SNP in Scotland can be sourced to the Poll Tax and regressive reform of local government financing under Thatcher (the current Tory offer of fiscal autonomy is a strategic continuation of that anti-distribution policy).

But the idea of regional identity is misleading. The strongest advocates weren't traditional "ethnonationalists" or reactionary antimodernists but business owners with minimal financial interests in the central state and growing interests (and peers) outside the country. John Hall, the erstwhile owner of Newcastle United, banging on about "the Geordie nation" and how the club could be the equivalent of Barcelona, was an emblematic if ridiculous UK example. Regional pride, like civic nationalism, simply reflected the evolution of capitalist interests. In particular, it highlighted the growing alliance of multinationals, who found Brussels and regional governments easier to negotiate with than national governments, and SMEs, who resented national taxes as their profit margins were eroded by increased global competition. In contrast, national businesses lost influence through market deregulation, foreign takeovers and privatisation, and were gradually replaced as a political lobby by companies dependent on public subsidies via tax-breaks and outsourcing. We swapped ICI and British Rail for Amazon and G4S.

2008 restored the clout of the national state through its bailout of banks and regional governments, but the consequent increase in central government debt has merely exacerbated the resentments of the richer regions, i.e. the resentment of businesses and asset-owners towards the nation state as an agent of redistribution, hence the new political orthodoxy of austerity, corporate indulgence, and the valorisation of inheritance. The hype of the "Northern Powerhouse" is typical of a vocabulary of devolution and autonomy that masks a reality of public service cuts and corporate handouts. The real division remains one of class, even if this is increasingly characterised spatially - i.e. by where you live - due to the dominance of property wealth: "the rich quarters of Europe are all more similar to each other than to the poorer areas that are nearer to them". And vice versa. Just as Kolonaki Square looks like Sloane Square, so Exarchia looks like Kreuzberg.


The Greek crisis has provided an outlet for this new class solidarity, which is why liberals and social democrats have been just as contemptuous of Syriza as conservatives have. A cynic might assume that Sigmar Gabriel, the German SPD leader and vice-chancellor in the current coalition, was merely reinforcing his own position in case Merkel compromises, but his angry dismissal of Alexis Tsipras is of a piece with his neoliberal track record. More ridiculously, Guy Verhofstadt challenged Tsipras in the European Parliament today to live up to the example of two earlier liberal Greek PMs, Charilaos Trikoupis and Eleftherios Venizelos. The former is famous for declaring Greece bankrupt in 1893, as a result of the clientelism that Verhofstadt claims Tsipras is reluctant to eradicate, while the latter ordered the seizure of Smyrna in 1919, triggering the Greco-Turkish War that would result in the destruction of the Greek communities in Anatolia.

The invocation of Trikoupis returns us neatly to Steve Randy Waldman's excoriation of the EU elite's foolish and historically ignorant attitude, and in particular their invocation of moral hazard as a reason not to write-off Greek debt. As he notes, "the term moral hazard traditionally applies to creditors. It describes the hazard to the real economy that might result if investors fail to discriminate between valuable and not-so-valuable projects when they allocate society's scarce resources as proxied by money claims. Lending to a corrupt, clientelist Greek state that squanders resources on activities unlikely to yield growth from which the debt could be serviced? That is precisely, exactly, what the term 'moral hazard' exists to discourage". Of course, the systemic risks built up by the global banking system (aka "too big to fail"), and the compromised interests of the neoliberal elite, trumped all consideration of moral hazard in 2008, which in turn required the rapid identification of an alternative scapegoat to carry this moral burden.


Showing that there is nothing new under the sun, Patrick Eichenberger (in 2010) described the international response to Trikoupis's announcement of bankruptcy in 1893: "German and other creditors tried to put pressure on their respective foreign offices, which argued that the investors knew about the risks involved. Therefore, the German state or other states could not act as a de facto saviour since creditors then probably would act even more foolishly in the future". Following a debilitating war with the Ottoman Empire in 1897, "Athens grudgingly accepted that a European commission would restructure the national finance status under account of the remaining interests of the creditors. As a result, many Greeks saw no future in their country and migrated to Europe, the United States, and also to Australia". What neoliberals like Gabriel and Verhofstadt cannot allow, dedicated as they are to their own perverse reading, is that Tsipras is trying to set Greece on a new path and that the EU is now playing a reactionary role, not a progressive one, by inhibiting him.