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Friday, 26 February 2016

We Are Always Right

The disagreement between David Cameron and Michael Gove over whether the former's EU deal is legally binding is interesting for reasons beyond our relations with the rest of Europe. Gove isn't a trained lawyer (that hasn't been a requirement for the job of Lord Chancellor since 2005), so his legal opinion has no authority, but this hasn't stopped him pontificating ex cathedra, as he has long been wont to do. In his previous job as Education Secretary he routinely dismissed the opinion of educationalists ("the blob") and attempted to sculpt the national curriculum to mirror his own views. This might suggest a consistent disregard on Gove's part for professional expertise (other than that which echoes his own prejudices, of course), but I think it points to a more fundamental, if unintended, achievement of neoliberalism in refashioning the political realm.

New Labour sold us the idea of the managerial state, but much of this was mere theatre that obscured the degree to which power was gradually transferred beyond political control. Publicly, there was a continuity between managerialist politicians, obsessing over targets and league tables, technocrats pursuing social and market optimality through independent regulators, and a corporate sector subject to the discipline of competition. In practice, privileged corporates captured regulators and ran rings around politicians who either lacked managerial competence or had long been absorbed by the neoliberal borg through business consultancies, think-tanks and Brussels internships. 2008 refuted the claims of technocracy - that human complexity could be managed and that markets were self-regulating - but it didn't undermine the central claim of neoliberalism that there was no alternative to markets. 2009 was, in many ways, a technocratic triumph, even if it (briefly) employed Keynesian techniques that were anathema to neoliberalism.


While a generation of Labour politicians still diligently stick to the neoliberal script, despite the sea-change of 2008, the Tories have proved more willing to ad lib and indulge personality in pursuit of popularity, hence the egotism of Boris Johnson ("half man, half Brexit") and the sight of a bumptious Gove admiring his reflection in the shiny buckles of his Lord Chancellor outfit. Together with the serial fibbing of ministers like Jeremy Hunt and Chris Grayling, and the playground quality of debate ("tuck your shirt in", "what my mother would say"), this suggests a further infantilisation of British politics. Though Jeremy Corbyn has received flack over his dress-sense, the most pained criticism has been directed at the party members who elected him, accused of valuing the expressive over the instrumental, of following heart over head, just like stroppy teens.

The worry among centrists is not simply that the electors lack nous but that neoliberal hegemony, in stressing the impotence of politicians in the face of market forces, is paradoxically reducing politics to the expressive rather than creating a homogenised consensus, hence the tendency to treat Corbyn, Trump and Le Pen as "symptoms" of a common problem. Behind this lies an assumption that our globalised world is now too complex for ordinary voters to understand, leading them to hit out at elites or minorities and to indulge "know-nothings". There is a tendency on the part of centrists to dismiss unorthodox policies as either pandering or virtue-signalling. This view derives from the fetishisation of electability: the belief that politicians will either cynically adopt insincere positions to secure votes or will repel voters through adherence to an impractical "ideology". The alternative is presented not merely as a "middle way" between left and right, but a course between the Scylla and Charybdis of populism and impotence.

As unorthodox politicians have come to the fore, centrists have sought to rein them in by a conscious restoration of the credibility of technocrats. This was nicely illustrated in a recent debate over Bernie Sanders. Steve Randy Waldman got the ball rolling with a legitimately expressive pitch: "It is not that I am for Bernie Sanders, but that Bernie Sanders is for me. Bernie Sanders, more than any politician who has ever had a serious shot at the office of United States President, represents my interests and values ... A democratic polity does not elect a technocrat-in-chief, but politicians whose role is to define priorities that must later be translated into well-crafted policy details ... In a democratic polity, wonks are the help. The role of the democratic process is to adjudicate interests and values. Wonks get a vote just like everyone else, but expertise on technocratic matters ought not translate to any deference on interests and values."

This prompted a response by Ezra Klein that sought to both reinforce the role of technocrats and to cast the job of a political leader in managerial terms: "In a democratic polity, wonks are the help. But that only underscores the importance of electing someone good at hiring and managing them. A President Sanders could hire excellent technocrats to help him make policy, but would he want to? A President Sanders could surround himself with experts who know the shortcomings of his ideas, but would he listen to them? A President Sanders could become deeply engaged on foreign policy, but would he decide to?" He then extended this metaphor of the hiring manager to the electorate at large: "Voters are hiring managers, and the presidential campaign is a long, strangely constructed job interview." That the idea of the CEO-politician has once more become mainstream tells you that after its near-death experience, neoliberalism is once more in rude health.


Waldman counters by insisting on the expressive value of Sanders' campaign: "Presidential campaigns are not presidencies. The goals, incentives, and constraints are entirely different. The 'policy process' of a campaign begins first and foremost with the work of a campaign, which is to signal the interests and values of the candidate." But he effectively concedes the ideological match by introducing yet another neoliberal metaphor, namely the idea of politics as selling or deal-making: "Certainly presidents have to sell policies to legislators, so you might argue that the sales job that is an election may not be not entirely alien to the process of governing". The problem with this sort of thinking is that hiring, firing, deal-making and selling are precisely the "skills" (however bogus in reality) that Donald Trump claims to offer as a potential President.

Trump's other characteristic is, quite simply, that he is a character. In other words, he is benefiting both from the expressive turn of politics, which values colourful opinions and synthetic anger, and the valorisation of business, which suggests that any problem can be solved by managerial fiat. These are the conjoined twins of neoliberalism, though the first was unintended and is now proving troublesome. As Mark Schmitt noted: "Trump is a parody not just of Palin-era conservatism but of technocratic managerialism". It is the linkage of the two - expressive and instrumental - that is the winning combo. Though it may not appear immediately obvious, Trump's closest parallel in the UK is not Boris Johnson, let alone Nigel Farage, but Michael Gove. The differences are stylistic - loudmouthed insult versus condescension, braggadocio versus smugness - but the underlying assumptions are the same: we can bend the world to our will and we are always right.

Wednesday, 24 February 2016

Risk Management

Arsenal lost to Barcelona last night because of individual mistakes. Alex Oxlade-Chamberlain missed a clear chance to score in the first half and then over-ran the ball when we had a promising break. There was a collective failure of positioning and reaction on Barca's opening goal, while the penalty was a (literal) balls-up between Mertesacker and Flamini. Arsene Wenger was understandably frustrated that we had played well and contained Messi & co for 70 minutes before we "gave it away", suggesting that the players' ambition to win the game, rather than return to the Nou Camp with the advantage of not having conceded, had been imprudent. While some fans will gripe about Wenger himself, and others will question the lack of investment, particularly in strikers, the glaring difference between the two teams was that Barcelona did not make as many costly mistakes. For all the talk of their flair, what they have is efficiency: a quality that Wenger has long extolled as the acme for any team.

When managers complain of "unforced errors", or the team "throwing it away", they're not necessarily blaming the players so much as railing against the nature of a sport that leaves them feeling impotent on the touchline, their control over events limited to substitutions and shouted instructions that are often ignored. This is the reality of the Gary Neville experience at Valencia, where tactics-board theory is constrained by the practice of inherited players and his difficulty communicating with them. Coaching and motivation don't differ greatly between the top sides, despite the mystique around man-management and the increasing application of arcane science, not least because elite players are self-motivating and the backroom experts freely move between clubs. What marks out a great manager is the ability to envisage what a player might be capable of, much as a champion trainer does with a racehorse (Ferguson's interest in the sport of kings was always a busman's holiday).

This means that the fundamental job of a manager is the selection and hiring of players. The relative success of Leicester and Spurs this season owes more to buying players who fit into a particular team formation and style (and have avoided too many injuries) than to endless training-ground drills and pep-talks, something that Claudio Ranieri has been quite open about. Manchester City's failure to push on since 2014 reflects an uncertainty in their recent transfers, and perhaps now the expectation of a Guardiola clear-out. If Wenger is open to criticism at Arsenal, it isn't that he fails to buy players who are good enough for the club - Ozil and Sanchez are clearly world-class on their day - but that he tends to buy players who are error-prone. This is because he likes a risk, both in terms of the player's potential (think Overmars, Vieira, Henry etc) and playing style, and this is something that predates the financial constraints of the last decade. It is clearly a conscious trade-off and his frustration arises from the player's failure to manage it through self-awareness.

Many of Arsenal's players have strengths that entail vulnerabilities. For example, Alexis Sanchez has a tendency to take on too many players. This can result in goals, or more often chances for team-mates, but it can also lead to lost possession and damaging counter-attacks. Theo Walcott makes intelligent runs (disproving the "lacks a football brain" guff of pundits unused to the modern game), but the result is that he infrequently touches the ball, being dependent on others finding him. A consequence is that he's often out of position during a transition, which is why Wenger selects Oxlade-Chamberlain (or previously Ramsey) when a tighter formation is required. Laurent Koscielny is a supreme tackler and interceptor, but his eagerness risks fouls (ironically, his failure to deliberately foul led to Barca's first goal). This is why so many Arsenal players have a "Marmite" quality about them, which sees fans divided and sentiment fluctuate wildly, even within a single season: Giroud, Ozil and Mertesacker have all come in for criticism at times, while Flamini is an ever-reliable scapegoat.


It's also why opponents target their weaknesses. For example, Diego Costa's mauling of Koscielny in the first league match with Chelsea was intended to provoke him. Koscielny refused to take the bait but Gabriel then made an error by over-reacting to the provocation. Similarly, in the return match, Costa manoeuvred Mertesacker into a last-man foul and then threw himself to the turf (i.e. he denied himself a goal-scoring opportunity as he could easily have gone on with Mertesacker grounded) to get the German a red card. This isn't new. Vieira and Bergkamp were routinely wound-up by opponents, while Wayne Rooney hurled himself at Sol Campbell's thighs at every opportunity. I suspect that the affront of some Arsenal fans at such manipulation stems from the belief that we we place too much faith in playing our own game rather than undermining the opposition - i.e. we're too honest. Of course, when an Arsenal player does stoop to gamesmanship, e.g. Overmars or Pires collapsing in the penalty area, it tends to be treated as a national scandal.

In contrast, Barcelona have largely rid themselves of players of this risk/reward ilk - Carles Puyol was probably the last of note - and on the night their defence, which is not notably miserly, avoided any major errors. The consequence is that while the team is admirable in its discipline and cohesion, and individual players show great technical skill, there is something off-putting about them on the pitch. Outside of their theatrical response to tackles, this is an unemotional team, which is perhaps best expressed in the "reformed" character of Luis Suarez and the general lack of individual ego. Neymar in a Barca shirt does not look like Neymar in a Brazil shirt. I suspect that if the roles had been reversed in Jordi Alba's forehead bump of Giroud, the latter would have got a red card. This is not sour grapes, but recognition that Wenger's teams are always on the edge, from the excessive card-collecting of the early days to the occasional plot-losing of today, and referees are tuned to it, just as they anticipate fouls on Messi.

It's easy to forget that the Invincibles were rather un-Wenger-like in their avoidance of calamity over 49 league games, or rather that they saved the cock-ups for cup matches. Their escape from the Champions League group phase in 2003-4, after starting with two defeats and a draw, and including the famous 5-1 demolition of Inter at the San Siro, was much more akin to recent experience. Arsenal under Wenger has been like a rollercoaster rather than a relentless TGV, though clearly Wenger is searching for a combination that is closer to the latter in its consistency and efficiency. This is why the tie with Barcelona can't be said to be over, though a plucky 1-0 away win is probably the best we can hope for. In retrospect, a group-stage exit might have been the best for our season overall (it would certainly have allowed for an FA Cup replay with Hull this week), but equally the crucial away win at Olympiakos may yet reap rewards in terms of mentality. It probably helped the self-belief that saw us beat Leciester at home recently.

In the league, the season so far (broken into thirds) has seen 26 points from 12 games and 22 from 13. It looked like we'd weathered the traditional soft patch in November, but then we had a relapse, starting and ending with Southampton, which saw us secure only 9 points from a possible 21. In the final third, we have 3 from 1 so far. We'd need to get 29 points over the remaining 12 games to hit a total of 80, which means something like one defeat and two draws. Not impossible but suggesting an efficiency that has eluded us so far. That said, the winning figure for the title is now looking like it could be as low as 76, so dropping points in up to five games might still be bearable. It's Man Utd at Old Trafford next. Though they've been poor this season, you know they'll pull the stops out against us, though we're equally capable of over-powering them as we did in the home game. If we play as we did for the first 70 minutes last night, but with the addition of some chances taken, we should be capable of returning with maximum points.

Friday, 19 February 2016

We Are The Law

The case of the San Bernardino killer's iPhone 5C is being vigorously promoted as a defence of civil liberties and resistance to the spread of the surveillance state. It's neither. The claim of Tim Cook to be making a principled stand is nonsense. The key thing to grasp from the outset is that this is a contest over property, not privacy, and that the state has a contingent right to seize private property under certain circumstances and assuming due process. The principle is embedded across a number a laws, reflecting the variety of property classes and differing methods of seizure, from eminent domain (compulsory purchase in UK parlance) to civil forfeiture (confiscating criminal proceeds even when no specific crime has been proven).

In the context of the Apple affair, we don't need to worry about what those precise circumstances are, or even the specific act being invoked (though it is amusing to see people who bang on about the sanctity of the constitution appalled at the use of a 1789 statute). So long as the state has operated within the existing law, and the courts accept that they have reasonable grounds to exercise the right of confiscation, then their action is legitimate. Where there is a point of contention is whether digital information can really be considered as property and who has title in it. You'll notice that Apple have been quiet on this aspect of the case, and for good reason.

In their "Message to Our Customers" (incidentally an example of American documentary fetishism), the company states: "The United States government has demanded that Apple take an unprecedented step which threatens the security of our customers. We oppose this order, which has implications far beyond the legal case at hand". Citing the government is disingenuous because it is a Federal court judge who has issued the order. This is not a case of the FBI turning up in Cupertino in dark suits and shades to put the frighteners on Tim Cook. Contrary to Cook's claim, this is not an unprecedented step if we consider it as a request for the surrendering of private property (and let us, for argument's sake, assume that smartphone data is property), even if it may be the first time it has happened in respect of an iPhone (in fact it's probably not). This solipsism is typical of Apple, as is the implied trumping of the government's public security concerns by "the security of our customers". The suggestion seems to be that Apple inhabit a parallel legal universe to the rest of us.


The letter insists on the need for encryption. This is not in dispute. Encryption is a necessary technique to ensure privacy, and we should be concerned by any state attempt to undermine encryption standards or tools, but it simply isn't the issue at hand. The FBI wants to hack a password, not break a code. The letter also warns of the dangers of creating a backdoor that could be subsequently exploited by criminals and "bad actors" (i.e. possibly including an abusive government). This danger is also not in dispute, but Apple's characterisation of the FBI's request as the creation of a "backdoor" is questionable and their risk assessment is scare-mongering.

A backdoor is, by definition, a security vulnerability. But it is also, by implication, a general vulnerability that would be present (if latent) on all smartphones running the same operating system. That is not what the FBI has requested. It is proposing that Apple create a bespoke vulnerability, for installation on a single device, essentially by branching the iOS operating system. This is what hackers routinely do (and no, it's not just limited to opensource software - there are iOS mods out there too). There is no "precedent" being set here. The ongoing security of the iPhone depends on the confidentiality of the iOS source code within Apple (and that won't be changed by the FBI's request) plus the integrity of the system upgrade process (which can check to ensure that bespoke changes aren't accepted).

Privacy means the right to be obscure: to be able to live your life away from the prying eyes of others. This implies the opportunity (i.e time and space) to create your own property, but it does not entail an absolute right over that property. There is a distinction to be made between human rights (which are inalienable) and property rights (which are not). The reason why privacy and property are so easily confused is that we have long treated the human body as a type of property. This did not end with the disappearance of feudalism or the abolition of slavery. Military conscription, prison and compulsory education are ways in which the body as property can still be alienated by the state.


The current justification for mass surveillance is that if you've nothing to hide, you've nothing to fear. This is pernicious because it accepts that surveillance of the innocent should be the norm, which necessarily means the end of any universal right to be obscure. In practice, the powerful can still secure their own privacy through privilege, which means that it becomes a relative right and thus a form of property: something you might or might not possess. What we currently lack is a formal right of obscurity (let's call it the Garbo principle: "I want to be alone"), essentially because this is such an innate expectation that we take it for granted. As technology capable of surveillance becomes more ubiquitous, we need to formalise this right.

The letter paints Apple in a noble and patriotic light: "We feel we must speak up in the face of what we see as an overreach by the U.S. government. We are challenging the FBI’s demands with the deepest respect for American democracy and a love of our country ... we fear that this demand would undermine the very freedoms and liberty our government is meant to protect." In fact, a better way of looking at this affair is that Apple has failed its customers. Just as the state has a contingent right to seize property, so the individual has an absolute right to dispose of their property (while they have title) as they see fit. This includes destroying it.

In practice, you can erase all of the data on a smartphone, though you'll usually need special software to do so (i.e. securely overwrite the physical media). The iPhone will automatically erase data if you enter the wrong password repeatedly, but this is a long-winded and clumsy method compared to smashing it to smithereens with a hammer. What the iPhone 5C lacks is a self-destruct timer, a la Mission Impossible. Had this been available, there's a good chance the San Bernardino terrorist would have solved Apple's problem for it. Had he chosen not to avail himself of this feature, Apple could in good conscience have agreed to assist the FBI.


The reason Apple doesn't provide this facility is because it considers every iPhone ever made to still be its property. Legally, it has some grounds for thinking this way. When you buy an iPhone, you do not buy a copy of iOS, or any of the other software on the phone. You merely buy a licence to use. The software remains the intellectual property of Apple. Because the company has always insisted on complete control of its products, both hardware and software, it tends to have a very proprietorial attitude towards them, even though the hardware is incontestably the property of the user after purchase. The obvious recent example is "Error 53", where an iPhone 6 will permanently disable itself if it suspects third-party interference. This is an example of Apple's "overreach" (they've now retreated), trying to maintain a monopoly on handset repairs by claiming spurious security concerns.

Apple is encouraged in this attitude by the current uncertainty of the law in respect of digital property. That uncertainty in turn is the result of lobbying by companies such as Apple to prevent the extension of strong property rights to user data. As it stands, the digital economy depends on the ability of businesses to extract value from the data created by its customers. This is possible because digital data can be infinitely copied without reducing the value of the original to its creator. In other words, what is being alienated is the use of the data rather than the data itself. In theory we already have a legal framework capable of controlling this - intellectual property copyright - but in practice this is treated as a commercial matter rather than an inalienable right. When you click "I agree", you are conceding that the service provider retains its full IP rights in respect of its software, while you freely give up your IP rights in respect of your data.

The San Bernardino affair is just the latest stage in the ongoing struggle between the state and capitalists for the control of society's data. A true defence of civil liberties would restrain both government agencies and Internet companies, not favour one relative to the other. Apple knows that too much accommodation of the state will tarnish its brand image, and it also calculates that a head-on challenge will boost its assumed right to negotiate privileged treatment. The state calculates that a test case centred on domestic terrorism during a Presidential Election campaign is the ideal opportunity to publicise its demands for "equipment interference". The state has a good, narrow case because it is publicly seizing the data of an individual. Apple's "principled" objection, in pursuit of its own commercial interests, risks encouraging the state to legislate more sweeping powers to seize the data of everyone, thereby eroding the privacy the company claims to respect.

Monday, 15 February 2016

Europe's Democratic Deficit

British debate on the nature of the EU has tended to revolve around federalism and the free market, which essentially reflects British history. The distrust of federalism is not so much a memory of Napoleon than the guilty secret of the UK's origins as an elite stitch-up that created the original "superstate". The attraction of the single market is less nostalgia for Victorian pre-eminence in manufacturing and trade than regret over the loss of the contrived market of empire and commonwealth (hence the significance of New Zealand lamb in 1975). But while important, federalism and the free market are both ideals with little presence in the real world. In terms of actual practice, the evolution of the EU needs to be thought of in terms of functional cooperation, political construction and the regulatory regime.

Functional cooperation means industry-level coordination across national borders, of which the European Coal and Steel Community of 1952 was the obvious starting-point. Though we were encouraged to think of the Common Market in terms of agricultural produce at first, and later white goods and services such as tourism, the chief economic objective was the rationalisation of industry on a continental scale, from which the UK was semi-detached until the 1970s. We recall the rationalisation of the 70s and 80s in terms of British losses in a global marketplace, e.g. steel and ship-building moving to the Far East, but this was also a period when key UK industries, such as car-making and financial services, benefited from European integration. The high-point of the functionalist era was the Single European Act of 1986.

The Maastricht Treaty of 1992 was when the focus shifted from functional cooperation to inter-governmentality, i.e. state-level coordination as a precursor to legal and political integration, most obviously in the formal declaration of the European Union and the planned introduction of the euro. The attitudes of the time - from the optimism of the coming "European century" to the concerns over German hegemony - were influenced by the events of 1989 and after, but it is clear now that this was the moment when the federal idealism of the 1950s died, essentially because subsequent expansion to the East set back social and economic convergence, while the adoption of the euro marked a disciplinary turn as most of the EU was divided into two camps: creditors and debtors. Europe has always progressed through national qualification - "joining the club" - but if membership was once about winning promotion, it was now about avoiding relegation.

The EU's political construction is both elaborate and opaque, with its many councils and presidents. This is often explained as a fudge between the need for popular legitimacy and the preservation of national sovereignty, but that ignores the evident distaste for democracy. This is not mere technocracy, important though that is to the Commission, but the inheritance of an older, ultimately aristocratic style of government: the continuation of the chancelleries of Europe by other means, specifically the persistent Council of Ministers and the episodic European Council (i.e. heads-of-state summits). The distance from a truly federal state is clear if you compare the EU with the US, where the institutions (Congress, Presidency, Supreme Court) construct the national polity and govern the agenda (consider the current political sensitivity over the replacement of Judge Antonin Scalia). The EU has either empty forms (Parliament) or elite bodies for whom secrecy is habitual.

Before 2008, the debate on the "democratic deficit" was given impetus in the European Parliament by regional parties whose primary target was their respective nation states rather than Brussels. Together with fringe parties who benefited from proportional representation but were excluded from national legislatures (e.g. UKIP), this imagined a European parliament that was not only comprehensive and inclusive, but representative of subnational elites. The pan-European groupings of left and right were never more than superficial. This model has been diluted by expansion - the "Europe of the regions" only made historical sense in the West - while the impact of the euro has been to shift the dynamic away from the national core and periphery (with the latter often being net-providers of fiscal transfers to the state - e.g. Lombardy and Catalonia) to the EU core and periphery (with the latter invariably the recipient of transfers).

 
The popular legitimacy of the EU does not depend on its political construction but on it's economic performance: the promise of rising living standards, secure welfare, and greater opportunity. But while the emblematic benefits of "free movement" have been real (to study, work, holiday and buy property), the era since Maastricht has been marked by widespread wage restraint, youth unemployment, personal debt and the erosion of public services, which casts the EU in an unflattering light compared to the old EEC. The ideology of "Europe" tends to obscure the economic reality through its focus on personal freedom and other Enlightenment values. Even today, liberals remain more comfortable talking in these terms, hence their volubility over the reactionary drift in Poland and Hungary, ironically reviving the familiar West vs East paradigm of the years before 1989, and the transfer of heroic status from dissident poets to cheeky cartoonists.

As with any political "project" (cf Bill Clinton, Tony Blair etc), there is an assumption that the demos must be cajoled into accepting what is good for it. This leads to a barely concealed contempt for actual democracy. Habituation is the core practice of the European project, which explains why you have to think of the EU in much longer timescales than we normally consider in politics, and why the champions of the project consider their work to be running to a schedule that makes local political manoeuvres (referenda, the posturing necessary for re-election etc) irrelevant. Though the origins of the EU are assumed to lie in the postwar reconstruction of the late-1940s and early-1950s, much of the theory of "Europe" originates in earlier reactions to the collapse of the pre-1914 order; reactions that were wary of democracy and inclined to corporatism.
 
The Austrian school of political economy was a product of the Hapsburg Empire, specifically the perceived failings of the Dual Monarchy to reconcile competing national and social interests through bureaucratic control. For Ludwig von Mises and Friedrich Hayek, free enterprise and free trade before 1914 had demonstrated a way to surmount the problem of nationality. In their view, the interference of the Hapsburg state in the economy, initially in its desire to act as a referee between competing national groups through planning, and later in its tentative steps towards a welfare state, impeded the market's ability to naturally resolve social and ethnic tensions. Despite this antipathy towards the state, Hayek was an early advocate of European federalism and monetary union in the 1930s (he later changed his mind and advocated competing private currencies).

His reasoning was pragmatic. A central government would be less able to adopt interventionist policies because of competing national sensitivities, and would thus revert to a focus on monetary policy (i.e. sound money) rather than fiscal policy. This would avoid the dangers of a "superstate" but would also remove monetary control from national governments that could be swayed by special interests, thus limiting their fiscal latitude in practice. This was a liberal vision that owed as much to the Bank of England's management of Sterling before the Great War as it did to the Hapsburg Empire. For Hayek, the latter failed because it committed to the unachievable goal of reconciling national interests, while the former succeeded because it ignored everything other than price stability (it is worth noting that this is the same remit given to the ECB).
 
The claim that the EU's problem is "a common currency without fiscal transfers" is an old-style federalist argument. The ordoliberal reality is that transfers are off the agenda but you can expect the further extension of fiscal discipline by the Commission and ECB. What we have today is an EU in which fiscal intervention is achieved through monetary crisis, as in the bailouts of Ireland, Portugal, Cyprus and Greece. Far from limiting the ambitions of the superstate, the euro has become the means by which the hegemony of European capital is advanced without democratic accountability. Just as the abstraction of monetary policy through the Bank of England served the interests of finance capital before 1914, often at the expense of national industrial interests in the UK, so the abstraction of monetary policy through the euro is serving the interests of a capitalist class today, and not just in the core.


This discipline is not a novelty that came in with the euro, and it certainly isn't limited to the policies of the ECB. As Perry Anderson said in The New Old World: "Because it possesses no independent powers of taxation ... There has been a virtually inbuilt drive within the Commission to expand its authority by the alternative route of regulation". The bureaucracy of the EU is a puny thing, measured in terms of its employees or budget, but it is impressive in its reach. It is closer to the civil service of the Roman Empire than that of the Hapsburg Monarchy. Of course this ignores the informal resources it can call on within multinational corporations, national quangos and think tanks, which points to the reality that Brussels is essentially the iceberg-tip of a lobby for supranational business interests. What is perhaps less appreciated is that its approach to regulation is heavily influenced by the US model of politically independent, technocratic bodies focused on market failure and consumer protection, a model that dates from the Progressive era of the early twentieth century.

This model was a conscious attempt to rescue capitalism from the predations of robber barons and to marginalise labour as a political actor. Though it became more interventionist (and thus contentious) in the US during the New Deal and Great Society years, it reverted to a more "purist" style in the 1970s and 80s, partly under the influence of neoliberal thinkers inspired by von Mises and Hayek, for whom the only justification for regulation was to ensure and advance competition. This chimed with the ordoliberal orthodoxy championed by Germany, and also suited the free enterprise evangelists of the UK, particularly when it helped advance privatisation, despite the media fluff about straight bananas. Much of the bureaucratic critique of the EU by the right has been directed at an American institutional style imported via the lobbying of US multinationals.

After the 1990s, functional cooperation declined in importance both because of globalisation, which turned the EU's commercial attention outwards, and expansion, which obliged it to repeat in Eastern Europe many of the structural and integrative reforms it previously went through in the West. Political construction ran out of steam because the original trajectory assumed by federalism's advocates and detractors alike - towards a more powerful Parliament and a rebalancing from the interests of commerce to those of civil society - proved illusory. The euro has revealed the "project" to be about the constraint of supranational democracy, not its furtherance. Meanwhile, the regulatory regime has developed beyond addressing market failures to encompass the creation of markets through privatisation and the incorporation of new areas of profit through expansion.

Since 2008 we have seen the return of class interests to the European political stage. Though this is framed in terms of geography (core versus periphery), demography (old versus young) and migration (native versus immigrant), it is clear that the central issue is the inequality of economic power. What we have witnessed is not just separate but thematically similar protests, such as Occupy and the Indignados, but the emergence of a pan-European political consciousness. This could be seen last year in popular attitudes towards Greece. Whether scolding or supportive, it seemed that most Europeans had an opinion and felt entitled, either because of their taxes or emotional identification, to express it. Similarly, wealth inequality (post-Piketty) and the refugee crisis are treated as EU-wide concerns. The free movement of labour within the EU, from East to West and South to North, is helping create a demos in the same way that movement from the countryside to cities did in the nineteenth century.

Few locate the democratic deficit today in the European Parliament. That has revealed itself to be a fig-leaf, its agenda set by the Commission (it still can't initiate legislation) and its composition fragmented by self-interested regionalists and social conservatives determined to keep it powerless, a situation that has worsened with each phase of expansion. The more important democratic deficit is that the troika of the ECB, the Commission and the Council of Ministers is incapable of representing, let alone reconciling, emerging class interests, which suggests that the EU is far more fragile than it has ever been, so much so that the UK's renegotiation (let alone Brexit) could have unforseen consequences. That the anti-immigrant Pegida, which was founded in Germany, has just launched a UK branch (made up of the usual EDL suspects) is as symptomatic of this as the left-leaning Democracy in Europe Movement launched by Yanis Varoufakis and others. The ultimate irony might be that the euro outlasts the EU as we have come to know it.

Thursday, 11 February 2016

The Plot Against America

The American system of government, and in particular its constitutional furniture (Congress, the Supreme Court, the Presidency), is constitutive of national politics as much as it is representative. In other words, the national polity is periodically recreated through the democratic process. This is why US politics is highly prescriptive, obsessed with procedural manoeuvres, and treated as a spectator sport by the media. The spectacle of the US Presidential campaign is particularly didactic in that it takes candidates and voters on a journey from ward-level caucuses through state primaries and inter-state conventions to a nationwide election and the abstractions of national interest. The trajectory serves to marginalise interests that don't easily fit into this structure. For example, race tends to enjoy a brief salience in the South Carolina primary but is usually kept to the undercard elsewhere.

It also produces the paradox of a nation famed for its parochialism obsessing over foreign policy issues, even if they are addressed in cartoonish terms. A gradual process of refinement and moderation, heavily mediated in the latter stages by Washington elites and the traditional sages of foreign affairs (Henry Kissinger will shortly pop up), produces a final consensus that is pretty much "more of the same" with the promise of better behaviour. It also tends to bias towards rhetorical moralism and the global responsibilities of "the indispensable nation", which diverts attention from more obvious economic self-interest, so Russia will usually figure more than South America. This is why American Presidential elections tend to have more foreign policy substance than you'd expect, and why domestic debate often dances around proxies for race: crime, welfare, the "middle class" (i.e. white working class).

There has been plenty of commentary since Obama's election in 2008 about the demographic tilt in the USA and how this is likely to influence future elections. The conventional wisdom holds that the Democrats are a shoo-in because of high levels of support among growing minority populations, as well as the socially liberal but economically-stressed young; while the Republicans will struggle to forge a viable electoral alliance between Hispanic voters across the sun-belt and mad-as-hell seniors across the Midwest. This assessment assumes that blacks will always favour the Democrats and that there is a latent conservative majority among Hispanics (and not just Cuban exiles). This is a bit like the idea that the Scots will always vote Labour and that Asians have yet to wake up to the attractions of the Tories. It's true until it's clearly not.

American conservatism has three pillars: nationalism, capitalism and religious morality. Until the 1950s, nationalism was heavily conditioned by the US's origins as a racist and genocidal state and its belief in the "manifest destiny" of whites. The Civil War may have led to the emancipation of slaves, but it also standardised racial discrimination as a principle of social organisation, as blacks were transformed from chattels to second-class citizens. Race-inflected nationalism in the late 19th century served to advance capitalist interests in the near-abroad, e.g. in the war against Spain, but it also served a domestic purpose in dividing the working class between natives and immigrants, with the latter being defined by culture (e.g. Catholic Irish and Italians) as much as ethnicity (e.g. Chinese).

The value of race as an organising principle weakened as immigrant groups assimilated, blacks moved to the northern industrial cities, and the Great Depression crossed racial and cultural lines. With uncertainty over what constituted a popular nationalism - no longer WASP, let alone centred on small farmers and craftsmen - American identity started to define itself through populist and isolationist opposition: against trusts and robber barons; foreign entanglements and European imperialism; and the red menace of the Soviet Union and China. Anticommunism became central to US politics for two reasons. First, it provided a form of ideological nationalism that marginalised race and class (though this ironically created an environment in which civil rights could be advocated as pro-American). Second, it provided support for the elite pivot from isolationism to internationalism in the 1940s.


After 1989 and the sudden redundancy of anticommunism, US nationalism was reworked by neo-conservatives as the proactive assertion of US economic interests abroad. For all the guff about exporting freedom, this was clearly a return to "realist" geopolitics. This not only maintained America's internationalist focus, but self-consciously connected with the "imperial" lineage of the late 19th century before the turn to isolationism. The problem was that this policy's triumphalism and delusion ("we make our own reality") demanded permanent success. When it hit the buffers in Iraq, the policy framework fell apart. Some conservatives sought to fill the vacuum this created with Islamophobia, but that hasn't provided anywhere near as compelling a threat to America as international communism once did, and the general population remain sceptical that terrorism is sufficient justification for sending American troops (as opposed to drones) overseas.

While white resentment at minority advances remained a strong undercurrent during the conservative revival of the 70s and 80s, it was never strong enough to turn nationalism back towards a nativist or isolationist stance. This was partly because of the Reagan era's aggressive internationalism, but also because conservative strategists deliberately channelled the resentment into an attack on a welfare state that was seen as a proxy for "those people", i.e. blacks and other minorities. The recent shift towards greater support for welfare in the US reflects demography as much as the economy. While the increase in income inequality and the poor prospects for "millennials" grab the headlines, the sea-change is that whites are due to become a minority of the US population by 2043, so "those people" will increasingly be funding the welfare state of tomorrow. The growing intolerance of police violence and guns are signs of this social change: both the growing confidence of minorities and the growing rejection of institutional racism in their name by whites.

The trope of "war" in domestic American politics is usually a sign of elite interests being pursued through divide-and-rule. Cold War anticommunism helped hobble the American labour movement at a time when it was economically powerful, and also provided a means of hampering support for the extension of civil rights. The "War on Drugs", and the subsequent growth of the carceral state, like the rhetorical attack on "welfare queens", was a cynical manoeuvre to divert the resentment of whites, faced by destabilising social and economic changes, towards blacks; a manoeuvre embraced by the Democrats as much as the Republicans. The "War on Terror" has served to create a new "other" (i.e. Muslims) at a time when black and Hispanic voters have become too significant as constituencies to either ignore or alienate. But America is war-weary, and the paranoid style promoted latterly by Fox News is facing diminishing political returns as it becomes ever more internecine and absurd.

Barack Obama's presidency may have been marked at the beginning by the antics of the Tea Party, but it has been marked at the end by Black Lives Matter. The significance of BeyoncĂ© delivering a Black Power tribute at the Super Bowl is that a TV network dependent on advertisers seeking a broad audience did not bat an eyelid. The problem faced by the political establishment is that America is running out of enemies. This is not because it is drawing in its horns internationally, but because it cannot identify a convincing, common threat that unites an increasingly diverse domestic audience. Global jihad doesn't measure up as an existential danger, old dichotomies like white versus black no longer work for enough people, while the self-identifying middle class is increasingly open to single-payer healthcare, the legalisation of cannabis and more progressive taxation.

Donald Trump is the logical result of the "plot against America" turn of Republican politics. Where other candidates are reduced to threatening to carpet-bomb far away countries where evil villains may be hiding, Trump happily singles out Mexicans and Muslims on US soil. His popularity reflects the rejection by the Republican base of the conventional wisdom that the party must reach out, but there is little evidence that circling the wagons will be electorally successful. In contrast, there is growing evidence that the demographic dividend promised for the Democrats is more likely to be realised by a social democrat like Bernie Sanders than by a neoliberal like Hillary Clinton for whom Wall Street funding, race and gender are all instrumental. As the field thins, it is the "1%" who are increasingly being cast as public enemy number one, almost by default.

Friday, 5 February 2016

The Symbolic State

In 1982, the economic historian Sidney Pollard suggested that the weakness of British economic policy was the result of "concentrating first and foremost on symbolic figures and quantities, like prices, exchange rates and balances of payment, to the neglect of real quantities, like goods and services produced and traded". In his book, The Wasting of the British Economy, he claimed that rational planning and investment in the postwar years were "repeatedly sacrificed for the sake of symbols". This argument can be expanded. Over the course of the 1950s and 1960s, both Conservative and Labour governments pursued foreign and defence policies whose cost exceeded the UK's financial power, largely to keep the symbolic "seat at the top table". They also maintained Sterling as a semi-global reserve currency for symbolic political rather than practical economic reasons.

Pollard's analysis was reinforced at the time that he wrote by the Thatcher government's narrow focus on the money supply as part of its monetarist experiment. The subsequent commitment to the ERM, like the investment in Trident and the need for the Union Jack to fly over Port Stanley, similarly elevated the symbolic over the pragmatic. In retrospect, British political history after 1945 looks like a teenager flitting from one pop-star infatuation to another. Though neoliberalism introduced a managerialist focus on "process" (e.g. supply-side reform), its British incarnation quickly reverted to an obsession with metrics, notably the emblematic targets of the Blair years in health and education (and a tolerance for the massaging of process to meet those targets). Though Pollard's is an analysis that assumes the economy is heavily determined by decisions made in Whitehall, rather than changes in the material base, it remains insightful because macroeconomic management continues to be dominated by the symbolic norms of the Treasury (e.g. the deficit).


You might say that all nations are invested in symbols, so what's so different about the UK? The Force de dissuasion projects French power, and the euro has clearly inherited the cultural significance of the Deutschmark for Germany (if to the frustration of other Eurozone members less wedded to the "black zero"). The point is that these are substantial: the world's third largest nuclear arsenal and an unprecedented multinational currency. What is noticeable about British symbols is that we cling to increasingly empty forms. The point about Jeremy Corbyn's suggestion that we keep our nuclear weapons "in the cupboard under the stairs", like the fact that the value of the pound reflects the cost of London property rather than the health of the economy as a whole, is that it pulls back the curtain to "let daylight in upon the magic" (to borrow Walter Bagehot's phrase about the need to preserve the "mystery" of the monarchy).

In other words, the "signifier" has become so important that we preserve it even when what it represents, the "signified", is redundant. We have become wedded to the idea that national identity is symbolic, hence the constitutional antiquarianism of the monarchy and the House of Lords. The current EU negotiations are symbolic (and thus baffling to other EU members) in the sense that particular metrics, such as net migration, are taken to be indicators of broader social and economic health, despite being wholly inadequate to the task. While defenders of the symbolic realm become ever more absurd (now proposing a bill to enshrine Parliamentary sovereignty), the suspicion grows that not only are these symbols hollow, but that they serve as vectors of corruption and anti-democratic collusion: the defence industry recycles taxes to privileged corporations, the management of the pound is biased towards the interests of the City, and the Lords have become a means by which corporate interests infest Whitehall.

The vacancy of these symbols chimes with the wider (and, it should be said, contested) notion of British decline. In a review of Pollard's book, Arthur Marwick noted that the postwar search for the causes of relative economic decline ranged over a century, from the failure to invest in technical education and technological innovation in the 1880s to "the conservative reaction against austerity in the 1950s". Others traced the malaise to the anti-industrial ethos of the British upper class in the Victorian era or the self-indulgence of the postwar welfare state. What all these theses had in common was a belief in internal decay masked by outward propriety - a "whited sepulchre" - hence the resonance of hypocrisy, woodworm and moral turpitude in postwar culture. Part of the attraction of neoliberalism for UK elites was the promise that these outmoded forms could be superseded through a commitment to the international norms of modern management practice.

Will Davies has defined neoliberalism as the "pursuit of the disenchantment of politics by economics". As Stephen Dunne puts it in his review of Davies' The Limits of Neolioberalism, "it opposed the enigmatic authority of politics, ... proposing the world as depicted by the Austrian School of economics as the less mysterious, more legitimate alternative". This rationality, whether in the form of homo economicus or Coase's theory of corporate efficiency, was undermined not just by the events of 2008 but by the state of emergency that arose from it, specifically the intervention by the government to reset the game through the bailout of the banks, "simply by force of decision" as Davies puts it. However, I think the rot set in much earlier, arguably within months of Tony Blair coming to power in 1997 when the death of Princess Diana showed the residual power of the symbolic, and was certainly confirmed by the decision to preserve the "enchantment" of the House of Lords.


2008 was when the curtain collapsed. It marked a return to arbitrary power after decades in which we were assured that the executive was subject to the same market constraints as all neoliberal actors, thereby ensuring the preservation of democracy and accountability. The consequence has been both the rise of hitherto impermissible political attitudes (both Sanders and Trump are beneficiaries of this emperor's new clothes moment in the US) and the anthropological turn towards behavioural economics and big data. The former has revived the optimistic idea of the state as the agent of democratic will, rather than just another actor subject to the market, while the latter has sought to replace the metaphysical claims of neoliberalism (the panacea of markets) with a return to the pessimistic anthropological management theorised in the early 20th century by the likes of Thorstein Veblen, Wilfred Trotter and Edward Bernays. The one activist, the other atavistic.

Though neoliberalism continues to be hegemonic, its symbols are increasingly viewed as empty forms. This ranges from suspicion over the motives and practices of "superbrands" like Google, to the identification of the "1%" as rentiers rather than wealth-creators. "Technocrat" has become a term of abuse, there is growing cynicism over the beneficial claims of competition, while meritocracy has given way to "generation rent". The divide between ideology and reality leads to the intellectual redundancy of the political centre, prompting politicians to revive moth-eaten symbols centred on sovereignty and security, to which we respond ambivalently. These are superficially revolutionary times. In other words, we may not see the overthrow of capitalism, but we can now envisage the end of the outmoded forms that we neglected to dismantle during the neoliberal years. If we choose the activist over the atavistic, the process that began in 1989 with the retirement of the symbols of communist power may finally arrive in London and Washington.

Monday, 1 February 2016

Star Wars as Counterfactual History

Now that the fever around Star Wars: The Force Awakens has abated, I thought it might be fun to look at the series through the prism of counterfactual history. The first thing to note is that George Lucas's creation is set in the past - "A long time ago in a galaxy far, far away" - so it is a suitable subject for a historian. It is also entirely fictional, a characteristic it shares with the counterfactual. The over-arching Star Wars story has the framework of a classical political history, notably the transition from republic to empire (and back again), while the historical parallels with the American Revolution and the Vietnam War (and even the post-9/11 era in Episode VII) are clear. It also has strong mythic elements, employing a narrative arc built on Greek and Roman tales and archetypal, if somewhat two-dimensional, characters (Lucas's Freudian obsessions are now giving way to more Jungian tropes under the Disney influence).

With its antique social forms (from taverns to princesses), and daft technology (from light-sabres to death-stars), Star Wars is unimaginative and implausible as Sci-Fi, but this simply highlights that it owes more to counterfactual history than speculative fiction. If The Lord of the Rings is a reactionary fantasy, and Star Trek is a thought-experiment about the liberating potential of technology, Star Wars occupies a parallel universe of the historically familiar in which social development (as opposed to chronology) appears to have stopped. This is why the messed-up production history (the 22 years between the shooting of episodes IV and I) does not really matter. It's not like fashions alter: everyone still dresses as if they had just wandered in from a WW2 film or a Western. Despite its pretensions to rationalism, this is a universe in which change is the product of personal ambition, economics has barely advanced beyond mercantilism, and the galaxy is under the sway of secret societies and the soupy metaphysics of the Force. If I had to put a date on its intellectual vintage, I'd say around 1770.

Counterfactuals are categorically different to speculative fiction. While a counterfactual may be employed in the creation myth of a utopia or a dystopia - the South wins the American Civil War, the Axis Powers win World War Two - the purpose of speculative fiction is to construct a social or political model in which particular relations can be tested under changing conditions: could chattel slavery survive in an industrial society, would a totalitarian regime implode under the impact of modern technologies? Speculative fiction tends towards the dialectic: contending forces, constant stress, disruptions in the social fabric. The subject is change. In contrast, the subject of a counterfactual is likely to be persistence. When change does feature, it usually takes the form of new technologies seamlessly integrated into a traditional setting (those daft light-sabres again), which is an ideological plea for the independence of social relations from the material base: we can acquire high-tech and maintain an aristocratic hierarchy.


Because they are conservative, counterfactuals are paradoxically often optimistic. They seek to wish away actual changes (no fall of Constantinople, no Bolshevik Revolution), but in so doing they annihilate history and imagine an eternal present in which social relations are unchanging. Even those counterfactuals that imagine pessimistic scenarios tend to do so in order to highlight current virtues or make satirical contrasts with the present day. For example, most fictionalised alternate histories in which the Nazis successfully invaded Britain (or the USSR invaded the USA) feature a heroic resistance and complicit state apparatchiks. Just as British pre-1914 "invasion literature" reflected anxiety over empire and the social question, so a Nazi Great Britain was an extreme example of the imaginative response to the welfare state, while the WW3 strand in American culture (e.g. Red Dawn) was more about resisting gun control and Washington than a genuine expectation of a Russian revanche in Alaska. In a similar vein, Star Wars is not just about the eventual triumph of good over evil, but about resilience: the Jedi order cannot be destroyed.

Counterfactuals that extrapolate developments - i.e. "if X didn't happen" - usually reflect the belief that social continuity is to be preferred, even when they allow for technological change. Tory historians who wonder what would have happened if the UK hadn't been involved in the two world wars are usually mourning the loss of empire. Their defence of this approach invariably privileges the opinions of contemporary elites. As Niall Ferguson says, "Virtual history -- and this is a very, very important point, which isn't understood by many people who dabble in 'what if' questions -- is only legitimate if one can show that the alternative that you're discussing, the 'what if' scenario you're discussing, was one that contemporaries seriously contemplated". This distinction is nonsense. The plausibility of an option to a political elite is irrelevant. The UK declaring neutrality in 1914 is no more "realistic" than the Battle of the Somme being stopped by the intervention of Martians. Neither happened: a miss is as good as a mile.

Rightwing alternate histories tend to emphasise the pivotal role of individuals, which is both a reflection of their non-materialist ideology and their emotional origin in the realms of fantasy fiction. This can be inadvertently entertaining. Consider this from the economist Bryan Caplan: "Suppose Karl Marx had never been born.  How would the modern world be different? ...Without Marx, there would have been no prominent intellectual promoter of violent revolution for socialist dictatorship. There would still have been a big socialist movement, including many socialists dreaming of bloodbaths and tyranny. But the movement as a whole would have rapidly evolved into something like social democracy. Third World dictators would still have killed in the name of socialism. But there would have been no Soviet Union without Marx. And without the Soviet Union, there would be no fascist Italy and no Nazi Germany" (the Fascist party was founded in 1915, two years before the Bolsheviks seized power). Killing Luke Skywalker at birth might well have preserved the Galactic Empire, but that's because it's a fictional construct.


Counterfactual history is the louche cousin of comparative history, whose methodology it freely borrows to lend itself some credibility. The latter seeks to contrast developments between different groups or territories, usually in the same historical period. This is a perfectly respectable undertaking that can provide valuable insights, but it requires caution. It tends towards the study of nation states, as units of measure that are more easily compared, and the treatment of economic development as the product of competitive advantage rather than internal social relations, which has an obvious ideological purpose. Its methods are also easily twisted to support non-contemporary and often absurd equivalences, for example Niall Ferguson's recent claim that Muslim immigration to Europe parallels the fall of the Roman Empire. This goes beyond the idea that history repeats itself (or rhymes) to an older, reactionary idea of recurrence as the working of fate. This is a key feature in Star Wars, particularly evident in The Force Awakens.

Conservatives who defend alternate history as a method of enquiry tend to be selective in their interpretations not only of what is plausible but of what is likely. For example, Ferguson believes that had the UK remained neutral in 1914, Germany would have won a short war whose consequence would have been a more liberal German state and lasting peace in Europe (and incidentally an EU that the UK never joined). However, this requires the denial not only of actual history, but of any alternative outside the preferred one: "there's simply no way to imagine a Nazi regime emerging, or, indeed a Weimar Republic emerging, if the Kaiser Reich, the Imperial Reich, is victorious in the war that it begins in 1914". For this to be true, we must accept that Weimar and the Nazis had no causes outside of Germany's defeat, which is dangerously close to the Nazi's own interpretation.

If Star Wars has the form of a counterfactual history, what is the factual history to which it runs counter? One theory is that Lucas's films (including the Indiana Jones series, which he wrote for Steven Spielberg to direct) are an attempt to imagine an alternative American cinema in which the studio system of the 40s and 50s survived the impact of television unscathed. Instead of the "golden age" of the 70s auteurs that the upended industry produced, distinguished by films as diverse as The Godfather, The Exorcist and Taxi Driver, we would have had Star Wars episodes I to III, in strict chronological order and hard on the heels of American Graffiti (which influenced the iconic TV series, Happy Days). What this suggests is that Lucas's films remain stuck in the 1970s. Though he is no longer the driving creative force, it is hard to see the Star Wars series escaping that decade any time soon.