21 August 2013

Dial M for Murdoch

I have had this book for several months but have been reluctant to open the cover, not because it was likely to be turgid or boring but because I feared that the content would both sadden and sicken me in terms of the conclusions I would be forced to draw about the decline of standards in public life. Although none of the content is now news, to read it collected together is an emotional rather than intellectual feat. It truly does describe, as its subtitle claims, how News International has been permitted through cowardice and greed to corrupt Britain.

I often think of involvement in politics as being a continuum that runs from truth to power. Anybody involved in making political decisions is forced to compromise and then tells their story about why that happened. So even Gandhi would have been hard pushed to claim he was entirely at the truth end of the spectrum. But British politics today is entirely focused on power, and money used as a tool to obtain greater power. In this world the perverse statement by James Murdoch to the Edinburgh Television Festival (August 2009, p. 90) creates no sense of dissonance: 'There is an inescapable conclusion that we must reach if we are to have a better society. The only reliable, durable, and perpetual guarantor of independence is profit.'

The Murdoch press used phone hacking not primarily to garner stories that would sell newspapers. It was a strategy to gather dirt on the rich and powerful and to blackmail them into submission. The aim was to gain even greater control of the market for information by bullying Cameron and Hunt to allow News International to control 40 per cent of national newspapers and the UK's largest broadcaster (p. 89). The Murdoch family needed to get  control of the remaining 61% of the company’s shares and they needed to prevent politicians from blocking this. It was only the timely breaking of the scandal by The Guardian that put the wholly undemocratic and anti-competitive buyout on hold.

It helped me to have read Jon Ronson's book on psychopaths during the same month as Dial M, because it is apparent that many of those involved in this story are incapable of experiencing remorse or shame and spotting how these people abound in public life makes their behaviour seem more like a disability than evidence of moral decay more generally. But as a society we must find a way to protect ourselves against such people. In response to suggestions of press regulation, those who thrive in the murky and corrupt world of British public life raise objections around liberal values and human rights but, like James Murdoch's suggestion that what Sky is seeking to achieve is media competition in the public interest, this is deceitful guff.

Tom Watson makes clear that the way he and Nick Davies ferreted out the truth about the underbelly of the British media establishment was by using the mantra ‘follow the money’. Hence the inevitable conclusion of the Murdoch saga is that we urgently need to get money out of politics and competition into the media. The Office of Fair Trading exists to prevent exactly the sort of monopolistic domination that Sky has achieved in recent years, while the failure of successive governments to limit donations to political parties feeds into the same incestuous and corrupt relationships between politicians and media executives.

In spite of the work of lawyers and the courage of witnesses a year on from the publication of his report, Lord Leveson’s Inquiry has come to nothing. Politicians claim that they are forced to consider the press’s plan for self-regulation equally alongside Leveson’s independent proposals. Sky still dominates our media and the BBC, that should be our defence, has made a cowardly retreat in the face of political threats. Alan Rusbridger is still fighting the establishment but his paper is lonely and isolated, as it was throughout the years of Murdoch dominance. This autumn will be a watershed in our democratic history with the trials of Brooks, Coulson et al. We should be watching carefully to see whether, in the end, truth or power holds sway.

13 August 2013

The Entropy Law and the Economic Process

I am reading Georgescu-Roegen 's mighty work and not at the first time of trying. It is a huge, dense and rich tome, rich in the manner of chocolate mousse but similarly hard to take in large quantities. But this is August and the month when even the over-worked drones of the modern academy can find some time for reading and so I am treating myself to a surfeit of chocolate mousse and will be sharing some select spoonfuls via this blog.

For those who do not know this book or its author it is worth beginning by saying that  Georgescu-Roegen (henceforth GR) was born in Constanta on the Black Sea coast of Romania in 1906. He studied first mathematics and then statistics and economics, on a scholarship to Paris and in London with Karl Pearson. After communism came to Romania he went to the US where he taught economics at Vanderbilt University from 1950 to 1976. We probably know about GR because of the work of his student Herman Daly, who began with a fairly conventional career but seems to have been so influenced by the thought of his heretic teacher that he started taking the biophysical limits seriously and developed, with others, the school of Ecological Economics that is now one of the major critical approaches to the neoclassical hegemony.

I was drawn to the book because, unlike so many economist who began as mathematicians, GR did not remain in the abstract world of numbers and figures, trying to make the systems of life fit into the place statistics had designed for it. Rather his objective was to address the relationship between the biological world and the theorising of economists directly and honestly. Since this task lies at the heart of the interest of a green economist a careful reading of the book is inevitable. However, to challenge the discipline he was so much a part of GR needed to conduct a deep and systematic analysis of how economics worked in the middle of the last century, and it is the outcome of this that the The Entropy Law and the Economic Process presents.

GR begins with a survey of the philosophy of science, as a background to discussing whether economics can ever be a science. Here he draws in many of the philosophical greats, reminding us, for example that it was Kant's view (explained in his wonderfully titled Prolegomena to Any Future Metaphysics that will be Able to Present itself as a Science) that, rather than observing the world and then theorising from our findings, we create our theories and then force our observations to fit them: 'the understanding does not draw its laws (a priori) from nature, but prescribes them to nature' (p. 35).

GR's target, of course, is the early theorists of economics, who sought to transform economics into 'a physico-mathematical science', for example Leon Walras who, when faced with the impossibility of extending the concept of 'utility' this far apparently exclaimed 'Eh bien! This difficulty is not insurmountable. Let us suppose that this measure exists, and we shall be able to give an exact and mathematical account' of the influence of utility on prices and on other economic variables (p. 40). Perhaps it was Walras who was the original inspiration for the joke that asks how many economists it takes to change a light-bulb. The answer is none at all, because they assume that the light-bulb has already been changed.

Jevons was similarly optimistic about the potential of the new sciences and the load-bearing capacity of its concepts. Having declared his intention to rebuild economics as 'the mechanics of utility and self-interest' he waved his hand optimistically at the large quantity of data in account-books and the like as an indication of the nature of economics as a quantitative study, but 'failed to go on to explain how ordinary statistical data could be substituted for the variables of his mechanical equations' (p. 40) GR likens this to 'planning a fish hatchery in a moist flower bed'.

His conclusion on the work of these pioneers of the economic science is damning, his target its misplaced enthusiasm for mechanistic epistemology and for using logic in an inappropriate context: 'For I believe that what social sciences, nay, all sciences need is not so much a new Galileo or a new Newton as a new Aristotle who would prescribe new rules for handling those notions that Logic cannot deal with'.

12 August 2013

Solidarity to Counter Corporate Exploitation

As though in response to my previous post (!) Chris Bryant will today make a speech addressing the political economy of immigration. According to extracts published in yesterday's Telegraph, he will accuse Tesco and Next of deliberately hiring workers from other EU countries because they are prepared to put up with working conditions and terms of employment that unions outlawed for British workers several decades ago. This, at last, is Labour fighting back on behalf of labour but it comes nearly a decade too late.

Most of the public prognostications about immigration are performance rather than policy, because since the major Enlargement of the European Union in 2004, right in the middle of the last Labour government, there has been a labour-market of 500 million people but without legislation to protect working conditions. What the EU proudly calls the 'largest enlargement so far' took place in 2004 and saw ten new countries join the EU including the Czech Republic, Poland, Slovakia, Solvenia, Hungary and the Baltic States. This creation of a huge pool of surplus and low-paid Labour was inevitably going to create downward pressure on wages and cause migration from lower- to higher-paid economies across Europe.

I opposed the Enlargement because I saw that it would increase the size of the low-skilled labour-market and therefore as part of a corporate agenda to undermine the power of working people. I lived in Wales at the time and it was obvious from that vantage-point that the life-chances of those who relied on employment in the factories of multinational companies would suffer seriously if workers earning far less were to become available within the same single market. I assume that Chris Bryant, MP for the Rhondda, has a similar vantage-point but his protestations come to late and with no concrete policies attached. If trade unions, and the Labour parties that were supposed to represent labour and were in power in many of the EU countries at the time, had insisted on equal terms and conditions and a single European minimum wage then the Enlargement could indeed have spread poverty eastwards, but without this agreement it actually brought poverty and employment insecurity westwards.

The conditions of employment, democratic rights and legal protections we enjoy in the UK--the very reason that living and working here is so attractive to those overseas--were won as a consequence of long and bitter struggles. Globalisation, through the expansion of out-sourcing and off-shoring as well as the freer movement of labour, has weakened these rights. This is an issue that stems from the relative power of capital and labour rather than an argument about who us, or is not, a racist. The whole immigration debate is a classic example of divide-and-rule, distracting from the obvious truth that all workers need to be protected with basic employment rights and minimum wage rates.

In the 19th-century the attempt by those who control capital to exploit workers by moving them beyond their sphere of natural rights was recognised and the proposal was one if international solidarity: that workers of the world should unite. If Chris Bryant is to move beyond rhetoric, and to convince working people that there is some purpose in voting Labour, then he needs to get his union friends across Europe to organise that solidarity and call for uniform working conditions and a Europe-wide minimum wage.

8 August 2013

International Workers of the World

The question of immigration has been off limits for the left until fairly recently. The discomfort of left-wing intellectuals at being seen to be racist or unwelcoming has been skilfully manipulated by those whose interests have been well served by the influx of cheap powerless labour.  A worker without papers is a non-person, a person who has no legal rights who can do nothing to defend him or herself against exploitation. Globalisation has weakened the power of unions, as we have forced to compete with the slave-like conditions and wages of workers in China and the other ‘emerging’ economies across the world. The hard political-economy truth is that this process was greatly exacerbated by the desperate movement of illegal workers who travelled the world to chase the flow of goods and capital.

A few renegade intellectuals, notably David Goodhart and Maurice Glasman, have recently broken ranks, arguing that Britain’s white working-class have lost their means of livelihood as well as identity and that this is the root cause of our social malaise. Sadly, Goodhart in particular has failed to match his explanation of the impact of immigration with condemnation of the overtly racist policies of right-wing politicians who are seeking to capitalise on the unease this causes and so has lost much credibility. Glasman is by nature a contrarian and the clear division between his position and that of Labour’s traditional intellectual community has effectively led to the break-up of the ill-fated ‘blue labour’ project.

The target of Goodhart and Glasman were the middle-class intellectuals who adopt a liberal position on immigration without considering its impact on those in more vulnerable situations. Those with more liberal attitudes towards migration tend not to live in the neighbourhoods of our cities where they need to think about what the migration of such people does to the life chances of their children whether in terms of employment, housing or social services. Little surprise, then, that a recent survey of British social attitudes shows negativity to immigration to be closely allied with social class. The Gs might well agree that we are operating with outrageous double standards – exporting our language, companies, TV shows, media stars but objecting when those on the receiving end of this barrage choose to seek its origin personally. But the reality is that the migration of doctors and lecturers and engineers, who travel the world selling their skills, is a world apart from the migration of desperately poor economic and social migrants who sell their bodies and their souls.

If you are beginning to feel a little hot under the collar at this point it is worth wondering whether we have all been duped by this discussion: is it not a classic case of divide and rule being exercised on the commentariat by the corporate elite? Because the question of immigration is not really a question of immigration at all. The political furore caused by the racist vans is just window[1] thrown by the political establishment. The present media and political bombardment creates a huge noise to attack or defend people from other nation-states who have become our neighbours. Such identity politics sucks you in and is a powerful distraction from the main issue, which is the consequences of the internationalisation of labour and the utter failure of those whose political project should be to protect the conditions of working people to make a political response. 

Globalisation is a reality now, albeit a reality I would rather see reversed, for reasons that stem from my concern for the huge energy demand engendered by the movement of both people and goods. If it is here to stay then the rules governing the global capitalist system need to be negotiated by the people of the world: this should be where our energy is focused. Whether in terms of taxation or workers' rights the framework that governs the global market should be negotiated by democratic means and with social and ecological objectives. The failure of this most basic form of justice is why our lives appear more Dickensian every year. In a horrifying global echo, the national degradation that the first round of capitalism left in its wake, represented by the human flotsam of prostitution, drug abuse, gangsterism and cultural decay found in Victorian Britain, now characterises the cities of the world and is fast returning home. We are the International Workers of the World, and we have never been needed more.

Thanks to Chris Hart for some really insightful comments on an earlier draft of this post

[1] Wikipedia: a radar counter-measure in which aircraft or other targets spread a cloud of small, thin pieces of alumninium which either appears as a cluster of secondary targets on radar screens or swamps the screen with multiple returns

7 August 2013

How is the Chancellor Engineering a Pre-Election Boom?

After several years of dire economic news, suddenly, just about the time when parliament went into recess, the stories about the British economy changed. Almost overnight we moved from gloom to boom, with Osborne celebrating 0.6 growth and the euphoric tone of the journalists outstripping that of the Chancellor. With an election now just 18 months away, and it being certain to be an election dominated by arguments about the economy, this has made me rather suspicious about how this return to economic joy is being measured, and how the dark forces of monetary manipulation might be influencing it.

I am not alone in my suspicion that the happy economic news may not be all that it seems. The traditional left, however, limits its critique to the suggestion that the increase in GDP is being driven by the retail sector and is based on withdrawn savings by those who can no longer wait for their wages to rise. Frances O'Grady's claim that 'Britain's fragile recovery is being propped up by families raiding their piggy-banks' is supported by ONS data showing that the ratio of household spending to savings has fallen from 7.4% for 4.2% in the past year.

What first made me nervous about the 'return to growth' was Faisal Islam's excessive use of superlatives on his Channel 4 News report on Monday. He has Capital Economics predicting 1.5% growth in this quarter alone, with huge increases in both business confidence and business investment. This caused me to think back to the stories of companies sitting on cash (largely accumulated as a result of the government's loose monetary policy via QE) because of fear of investing it. There was much discussion of how the Chancellor might encourage companies to invest their cash-pile to revive the economy, including the suggestion that he might impose a levy on them for stagnant cash holdings.

Has the Chancellor somehow found a way of encouraging UK corporates to start spending the £750bn. they have in reserves (incidentially, a figure equal to half the UK's annual GDP)? Certainly his proposal for tax relief on smaller companies, who apparently hold around £120bn. of the total, which was included in last year's autumn statement, may be beginning of have an impact. But is there some other incentives for companies to invest, or threat do them if they do not?

The less subtle evidence of engineering is in the form of the incentives to restart the housing market, that well worn engine of unsustainable booms past. The Help to Buy scheme supports purchasers of new homes to take on mortgages that the banks think they cannot afford to pay. It is thus risky in two regards, since it will tend to keep house prices at the sort of excessive levels that led to the financial crisis in the first place, and at the individual level it risks households losing their homes if interest rates rise. It does appear to have stimulated a boom in house building which helps to explain the higher GDP figures.

The manufacturing and production figures illustrated in the graphic make it clear that the hype over recovery is seriously overdone. Production and manufacturing - the sort of real economic activity that the Conservatives claimed they wanted us to rebalance towards - is still struggling and nowhere close to the level it was before the financial crisis. The improvements we see appear to stem much more from monetary manipulation and the shuffling of cash between various elite players. This sort of wealth does not find its way down to those on average incomes who are struggling with the consequence of the capitalist disaster of 2008.

However, the Conservatives are playing the politics of this extremely cleverly. The Chancellor is likely to come out of his term in shared government with the public sector smashed up and Labour vowing to continue with these destructive and draconion cuts. The recession has also led to a culture of fear amongst employees, who are accepting reduced wages and appalling working conditions, as exemplified by the zero-hours contract. A success for George and his cronies but the real problems around the failure of manufacturing, the ongoing trade deficit and lack of resilience in our local economies and the iniquitous failure of the banking system are all yet to be addressed.

6 August 2013

No Fracking Way

I try not to be too party political on this blog, but it will hardly have escaped notice that I am the Green Party's Economics Speaker and that I have been selected as the top candidate for the south-west for next year's European Elections. So I will be seeking votes during this year, although I hope this will not affect the focus of the blog too heavily.The reason I stand for election is because I would trust myself to make the right decisions for the right reasons more than a member of any of the other parties. Unless you have decided that democracy is so corrupt that it is best avoided, a position I think has been created and is being reinforced by the corporate lobby, then you will end up having to make a choice next year and the following year.

Which brings me to the purpose of this blog: to express my utter disgust at the prospect of the fracking industry turning into some sort of Wild West boom in our pleasant countryside as it has in the US, and to explore how the other parties are reacting to the possibility of fracking. The evidence is that all three parties that make up the corrupt political establishment are supportive of this new, dirty and expensive fossil fuel. In their world, where economic growth is the holy grail and profit is king, bizniz must chase after this next opportunity to make money and we must bear the cost in our communities.

I am starting from my backyard because it is the part of the world I feel responsible for protecting. I grew up in Bath and brought up my own children in Blagdon, in the Mendips, so I found to my horror that licences have been granted all round that area, seeking to exploit the gas reserves in what was once the Somerset coalfield. The local campaign group Frack Free Somerset have provided a map of the licenced areas and also a list of suggested actions you can take.

The economics of fracking demonstrate the extractive and exploitative approach to everything of value typical of capitalism. Licences to what are natural resources, and therefore in my book a common heritage, are auctioned by the Department of Energy and Climate Change. The prices look absurdly cheap to me, which probably explains the glee with which the energy industrialists are pushing forward with fracking. Cuadrilla's licence to destroy the Forest of Bowland in Lancashire cost just £160m. for an area of 450 square miles between Blackpool and Preston. There are tax breaks too: Britain will have the lowest tax rate for the fracking industry anywhere in the world, with a tax break called the 'shale gas allowance' more than halving the tax payable from 62% to 30%. This is one of Osborne's wheezes to make the economy boom in the run-up to the 2015 general election, and our local environments will bear the cost.

With their friends and relatives in the oil industry and advisor Lynton Crosbie also having strong links to the oil and gas industry we should not be surprised that the Tories are supporting fracking. What about their partners the Liberal Democrats, those well known supporters of all things enviromental? When he spoke at the end of the last parliamentary session, Treasury Secretary Danny Alexander could hardly contain his excitement at the prospect of so much money to be made. It was Alexander who announced the bribes for local communities, which are in fact paltry compared to the profits to be made. For a mere £100,000 and 'at least 1 per cent' of overall revenues undefined 'communities' are lured into selling the birthright of their grandchildren. Unsurprisingly, where profits are concerned it turns out that it is not we who are the 99%.

As befits a party seeking election within the next 18 months, Labour has been less sanguine about the prospects for such an unpopular and exploitative industry. Back in June 2011 Labour's energy spokesman Huw Irranca Davies called for a temporary moratorium while a review on safety was undertaken. His replacement as shadow energy minister, Tom Greatrex, continues the line of the need for better regulation rather than opposition to fracking in principle. In an interview with Business Green he argues explicitly that 'an absolutist position' is not in our interest, so we cannot expect opposition to fracking from Labour, whose opposition is avowedly conditional.

Aside from the planetary pollution there is also the certainty of more local environmental pollution. Fracking is a vile industrial process that uses toxic chemicals that will contaminate our land and our water supplies. It is entirely inappropriate in our small island. It will set back the attempts to reduce our climate-damaging carbon emissions, which were already failing due to inconsistency and attempts to revive the economy through boosting energy-intensive consumption. But it also provides a way of avoiding the fundamental changes to our lifestyles and industrial processes that we know are ultimately necessary. To support fracking is like a parent encouraging their child to eat more sweets and drink more fizzy drinks while at the same time telling them that they need to lose weight.

So, you know where I am going, and I at least have the excuse of having made this clear from the start. If you really want a party that will oppose fracking as part of a consistent policy to reduce energy use and undertake a transition to a fossil-free future you know what to do. The Green Party stands against fracking. Caroline Lucas's rousing speech this past weekend at Balcombe makes the arguments clear, but in case you think we are jumping on a bandwaggon you can also watch her demolish the greedy pro-frack apologist on Newsnight in March 2012, while successfully putting Paxman in his place. As she argues, fracking will divert effort and investment from the expansion of renewables that is so urgently needed. It is dirty and dangerous to our health: we must stand together to oppose it.

5 August 2013

Climate Change and Cognitive Dissonance

The most recent edition of the British Social Attitudes survey has some interesting findings for those of us struggling with the cognitive dissonance that characterises public policy towards climate change. While the government may be chasing after the dollar with heedless disregard for the future of the species, for example by relentlessly increasing the cost of rail travel and increasing the pressure for new airport capacity, the British people are actually convinced that climate change is happening (76%) and that transport is a major factor contributing to our impact on the climate (although this percentage is down from 80% seven years ago to 65% today.

It is clear, however, that the failure of political leadership in the field of transport policy is affecting public opinion. If the government produces farcical and trivialising messages about the impact of our transport decisions - as in the notorious example of the advice about solving climate change by driving 5 miles less per week - then we can hardly be surprised if people see little need to change their travel habits. According to the report 61% of people think that they should be able to fly as much as they like, and 18% maintain this right even if it harms the environment. Conversely 55% think everyone should reduce their car use for the sake of the environment, but 47% see no point in doing so unless others do the same. The clear pro-car policies espoused by the Tory-Lib Dem government are a clear signal that others are not expected to do the same and therefore, in themselves, undermine the motivation of the socially and enviromentally conscious half of Britain.

What emerges from the data around the perceived impact of transport decisions is that they are driven by the nature of media and political messaging rather than by the scientific evidence. As we passed the spine-thilling 'milestone' of 400 parts per million of carbon dioxide in the global atmosphere earlire this year, the percentage of people in the UK who stated that air travel has a serious impact on climate change returned to its 2005 level (64%), before all those warnings about how climate change is more threatening than global terrorism. And the percentage thinking that car use has an impact on climate change had fallen significantly from 77% in 2005 to 66% in 2011.

Human beings are not rational and we are not scientific. We respond to social pressure and to our desire to feel loved and experience pleasure. If people enjoy their two weeks in Thailand enough they can easily convince themselves that this has no impact on the lives of their grandchildren; they can walk the line of cognitive dissonance just like the government does. Many of us have already chosen to abandon flying and driving and live in communities where it is already unfashionable and socially unacceptable to fly casually and frequently. But more important is the need to redouble our efforts to emphasise this as a political message about renationalising railways and reducing the need for car journeys to school or work, because changing our attitude towards travel is a vital political issue rather than a personal lifestyle choice.