Wednesday, 30 November 2011

The League of Ugly Gentlemen.

The Time for Populism.

The very suggestion that there is a ruling-class might be dismissed as a "conspiracy theory". It would no doubt be met with rage from some who would unroll the accusation that this is just a backward attempt to take us back to the politics of class. Because apparently we have moved beyond class and into an age where all the old battles have been won. Nothing will ever change for the reason that all the necessary changes have already been accomplished. Even as the British elite hold around £4 trillion in the form of antiques, paintings and pensions, to speak of 'class' is to resurrect flat-earth politics. This huge concentration of wealth in a few hands is not unique to our little island. The total liquid wealth of the global rich (around 10 million people) came to $40 trillion in 2009 and it has been increasing in spite of the crisis. In the advanced capitalism of today, we are led to believe, the class structure has been obliterated and the individual now rises in accordance with their own merit, specifically talents and work ethic.

There was an interesting study covered in the New Scientist on the matter of a global ruling-class. In an analysis of the relations between 43,000 multinational corporations it has become evident that a relatively small group of companies that hold onto a disproportionate amount of power in the global economy. The work revealed a core of 1,318 companies with interlocking ownerships. On average each of these companies had connected to around 20 other companies. These 1,318 companies represented 20% of global operating revenues and it appears that the 1,318 own through shares the majority of the world's large blue chip and manufacturing corporations - representing a further 60% of global revenues. The team went further to untangle the network and found that just less than 150 companies control 40% of the wealth in the entire network. The dominant companies include Barclay's Bank, JP Morgan Chase & Co and Goldman Sachs. In light of all of this can we really maintain that the idea of a ruling-class is so outlandish? 

The British elites still carry some of the remnants of the privileged position that they held in the old feudal power-structure. Consequently, the political class has not yet gotten used to ratifications, not even at the symbolic level which the Americans "enjoy" so much. This is the reason that the Americans have a much stronger Freedom of Information act than Britain. Of course, the US has a sophisticated network of mass-media and public relations which muddies the water to keep a great deal of Americans in the dark. There is a similar network in Britain, except we lack the same formidable free access to information. The consequence is that the insights into the political and ruling-class are much more difficult to come by. Occasionally the information seeps out of the liberal end of the mass-media press, to the chagrin of the reactionary gutter-press who would rather announce the triumph of socialism than acknowledge the bitter truth of class and deplore the horrors of capitalism. The discourse is casually limited by the influences and interests that ensnare the media.

So we know that the Conservative Party received £7.3 million in the campaign for 2010, while Labour received around £5.3 million. Since David Cameron became party leader we know that the Party has received £42 million from financial institutions, over half of the total donations that the Party received altogether. This is chicken feed compared to the US elections where the outcome is always pre-bought, Obama received around $750 million which is $400 million more than his opponent. In 2012 it seems we will see campaign contributions surpass $2 billion thanks to a decision by the US Supreme Court. We should view the corporate circus run-amok in the American government with wary eyes in Britain. The tales of the links between Tories and the private sector should not surprise anyone, nor should the proximity of lobbyists to power even at the highest level in this country. Out of the convergence of interests invested in the state we find policy emerges, there is a potential for political stagnation as well as radical change. Right now the situation is one of stagnancy.

The Labour Party has often been thought incompatible with the Conservative Party for the reason that the former is embedded in the labour movement, whereas the latter has long been the party of business. It has to be noted that the decline of trade unions in this country as a political force has made it possible for Big Business to share the Labour Party with them. As long as the unions are powerless then it is possible for Big Business to dominate the Party, the clashes of interests can be easily managed. It has to be noted that the industries unscathed by union-influence at all are impervious to the decisions of militants and moderates alike in the labour movement. This is the reason that it is perfectly possible for financial institutions to hold out for the Labour Party. The financial colossus cannot be broken by the labour movement and it cannot be stopped from leaping from Labour to Conservative whenever it has to. The commentariat don't like to say that the Con-Dem Coalition could have easily been the Lab-Con Coalition.

As the Institute for Fiscal Studies has found, the overall effect of the Treasury's new plans will be to reduce the incomes of those in the bottom 30% of earners and to benefit those in the top 60%. The top 60% would include the 10% of the population who own £4 trillion in wealth already and this is the primary constituency of the Coalition. It is not that the government is incapable of serving the people, it is that the government has a dual constituency torn between the interests of working-class people and the elites. So any appeal to one has to be made to the other at the same time, often on the terms of the constituents with greater clout and influence. This is the reason that David Cameron will talk of "muscular liberalism" and the "failure" of multiculturalism as an appeal to working-class people riled up by the press about Muslims and immigration. It is perfectly compatible with the austerity measures which are set to destroy what was accomplished in the immediate aftermath of World War II. To put it crudely the economic policies appeal to a particular base while the social policies and political rhetoric appeal to the masses.

Wednesday, 23 November 2011

The ultra-Politics of Powell.

Delusions of Nationhood.

The economist Friedrich von Hayek was a member of the Mont Pelerin Society and so was Enoch Powell at the same time. Powell would later garner a reputation as a 'maverick' in the Conservative Party. He posed as a libertarian critic of the welfare state, immigration and European integration. Even though Powell voted for Clement Attlee in 1945 out of disgust over the way that the war ended and stood in opposition to immigration controls in the 1950s. As Health Secretary under Macmillan, Powell personally oversaw the employment of the Commonwealth immigrants at the NHS which was understaffed at the time. He was opposed to attempts to restrict employment of immigrants in the public sector on the basis that it was wrong to treat an individual differently on the basis of their origins. Powell was a libertarian and a staunch nationalist who believed in the Empire, which he saw collapse in his own lifetime and he yearned for it to be restored. As MP Powell drew up a plan to reconquer India in 1950, which Churchill dismissed as "madness". He was opposed to US influence, Irish reunification, Communism and European integration out of this belief in the British Empire.

Milton Friedman, a fellow member of the Mont Pelerin Society, praised Enoch Powell as a principled man. Powell stood by monetarism throughout the predominance of Keynesian theory and the widespread practice of social democratic policies throughout the Western world. The sumptuous distance from power that Powell enjoyed later functioned as a plateau from which a shot could be fired at the Establishment in standard populist manner. Of course, the distance served the ultra-right as a comfortable place for indulgence away from any chance of serious reflection on policy and theory. The point of excessive rhetoric for Hayek was to bolster support for the old system reconstituted behind the mythic guise of 'free-market'. The state-planners of social democratic capitalism would be placed by a managerial state-capitalist nexus, whereby the 'competitive order' is maintained. Powellism is no different, it was the standard Tory combination of classical liberalism and cultural conservatism. It parades before the rabble in the proto-populist garb of parochial nostalgia for the imperial glory and unfettered capitalism of the Victorian era.

Enoch Powell became a strident opponent of immigration after Ted Heath became Conservative leader in 1965, with Powell coming third behind him and joined the Shadow Cabinet as Secretary of Defence. Around this time Powell became increasingly critical of immigration and came out in opposition to Sikh men wearing turbans at work. It may have been a bid to position himself for the leadership role in the long-term. It couldn't have been pure opportunism on his part given that it was a position he maintained for the rest of his life. He saw himself as a prophet and it came through in his language, it was the words of Virgil he invoked. But it is clear that the 'Rivers of Blood' speech was timed to put Ted Heath on the spot and shape immigration policy dramatically. He was silent in opposition to the Race Relations act when it was discussed by the Shadow Cabinet just 10 days before he made his notorious speech. If Ted Heath failed to undertake tough policy-decisions on immigration it could have meant another Labour victory in 1970, after which Powell could have challenged Heath and become party leader.

Tried and Tested.

Once in power Ted Heath abruptly castrated Powell as a potential rival with the 1971 Immigration act, which reduced immigration to zero in the early 70s. Heath rejected the suggestion, as Powell had, that the state could manage the economy. The Conservative government embarked on a new approach to the economy, which hoped that the unhindered market would reconstruct British industry and society. Powell had long been a proponent of such an approach and now there was the chance to see it realised. But the Heath government abandoned the approach abruptly as unemployment started to rise and industry was left devastated. The new strategy was a "dash for growth" with the liberalisation of credit and a higher level of public spending. It was for a moment that the British economy boomed before the phenomenon of stagflation emerged as inflation and unemployment to rise simultaneously. The Keynesian orthodoxy was left perplexed and the monetarists found the chance they had been looking for.

Even though Heath had abandoned the market as the instrument to organise society and, much to the chagrin of Powell, saw Britain join the European Economic Community, the Conservative government helped set the conditions for Thatcher - which was heavily influenced by Powellite thinking. The Heath administration had removed exchange controls and opened up the UK economy to the international financial markets, money could now be moved in and out of the country on a whim. The threat to democracy of deregulated finance proved correct as we have witnessed a political stasis in the West since the global economy underwent the first stages of financialisation. It was the stagflation which opened up the space into which monetarism could enter as an alternative to Keynesianism. The failure to manage the economy gave credence to the position that the state could not manage the economy and should not be expected to. The way that the labour movement defeated the Conservative government demonstrated that the working-class had to be broken.

Powell was the consummate precursor to Thatcherism, in many respects, and had good reason to take delight in the collapse of the Heath government. Of course, Powell had a lot in common with Heath and a lot more than he would have admitted. The immigration policy of Heath was crafted to neuter him and the economic doctrine could only be salvaged for Powell as it was aborted. Under successive Labour governments there was an increase in deportations and the introduction of virginity tests on Asian women coming to live with their husbands in Britain. Again, Powell could languish at a distance from power and comfortably refuse any critical self-reflection at all. The Heath administration was not 'pure' in its approach to economic affairs and it sold out to the Europeans at the first chance. Powell could reassure himself that the ideas in his mind had yet to be realised. Then came the rise of Thatcherism and this time it would be different as Thatcher made clear when she said "To those waiting with bated breath for that favourite media catchphrase, the U-turn, I have only one thing to say: You turn if you want to."

No more U-Turns?

This time the government did not back down to the trade unions and instead systematically crushed every union it provoked into confrontation. In many respects Thatcherism was Powellism adjusted to the processes of globalisation and financialisation. The austerity measures of the early 1980s led to violent riots across the country in some of the most deprived and vulnerable communities. The ideological justification for the cuts came out of neoliberal doctrines which Enoch Powell supported and propagated throughout his career. The process by which the state was "rolled back" left the population devastated. It required the shock of the Falklands war to bolster patriotic support for the government. But it also required a means to explain away the social problems that the process generated. This is where Enoch Powell is on the side of the Establishment. The riots just supported his thesis that there would soon be violence and destruction on a huge scale if immigration were not reversed. Conveniently Powell could spout this line and not confront the consequences of the economic policies which he supported.

At the same time, Powell could hide behind the fact that the policies did not go far enough and the social democratic settlement was not obliterated totally. The doors were periodically opened to permit a spurt of immigration in order to boost the supply of labour. The so-called "special relationship" between the US and the UK continued as the US permitted the British retaliation to the Argentine invasion of the Falklands. This was a war fought in America's backyard against an action undertaken by a dictatorship that Washington had supported. The days when the British rebelled against American foreign policy were long gone. Integration with Europe continued steadily as it had since the 1950s, with Thatcher pushing through the single European act - perhaps one of the most integrationist measures. Thatcher was also a member of the Heath Cabinet which took Britain into the European Economic Community in 1973 and campaigned for a Yes vote in the 1975 referendum. Margaret Thatcher was no bastion of 'national sovereignty' rather she never deviated from the traditional Conservative position on European integration which we might describe today in the vein of UKIP as Europhilic as opposed to Eurosceptical.

The Euro was a right-wing project from the very beginning as the European Central Bank has no qualms about the level of unemployment. Yet it is often portrayed as a leftist project by the ilk of Powell for the reason it is a state-system and we are reminded that the state fails to do good even on the rare occasions that it means to. The convenient blind-spot is to the neoliberal role of the state as a managerial system of a 'competitive order' in Hayekian theory. The right-wing opposition to social democratic capitalism was just an opposition to the particular form of the state-corporate nexus. Instead of state-planners looking to provide services and a social safety-net to the poor and most vulnerable, people like Powell were looking for a bureaucracy which would do more for business than society. As convenient as it may be for reactionaries like Powell to dismiss the Left for having ideas, it has to be said that the return to the glory of Victorian Britannia really is utopian. The only acceptable state project is on the side of 'national sovereignty' which has no place for the poor except as a dis-empowered rabble to be exploited.

Sunday, 20 November 2011

The Politics of Euroscepticism.

The strange history of Euroscepticism in Britain goes back decades, it was ironically the Conservatives who were much more keen on European integration and the Labour Party were opposed to the project insofar as it could potentially hold-back socialism. In fact, the labour movement was opposed to economic integration out of a staunch protectionist attitude towards British industry and a general fear of foreign competition. In this respect Bob Crow is a throw-back to a bygone politics. The opposition to integration within the Conservative Party first took the form of a campaign (which was led by the Earl of Sandwich) to prevent Britain from entering the Common Market in the early 1960s. It was based on a superstitious nationalism which elevated the British above the "frogs and huns" of the continent. So we find that the opposition to European integration included Michael Foot and Enoch Powell, it united the opposing elements of the Left and the Right.

The anti-Politics of the Market.

The specific tendency of right-wing opposition to the European Union goes back to the roots of think-tanks and Thatcherism in Britain. It was none other than Friedrich von Hayek who convinced Antony Fisher that the only way to bring about political change is to form think-tanks, which will propagate "second-hand ideas" and shape the discourse in doing so. Fisher went on to found the Institute of Economic Affairs and about 150 other think-tanks in his lifetime. For years Antony Fisher and Oliver Smedley had sought to undermine state-planning in Britain. Fisher and Smedley were convinced that the state-planning apparatus would lead Britain down the road to totalitarianism by its very nature. For them even the Milk Marketing Board and Egg Marketing Board were innately opposed to freedom. The Common Market was just a bigger state-system of economic planning, as Smedley and Fisher had introduced battery farming to Britain they were naturally sceptical of any government policy on agriculture.

The state-planning apparatus  had a scientific guise complete with a technocratic system, the ideals of classical liberalism looked out of date by comparison. The appeal of Hayek was that he had developed a technocratic theory of the market, so the old ideals were torn out of their original context and revamped for the modern age. So Adam Smith's invisible hand becomes a metaphor for a cybernetic flow of information exchange, whereby the abstract signals sent out by millions of people forms the price mechanism; and the key to order without central planning. It would be an automatic system of signalling which would be self-directed. This is the only alternative because it is not possible to hold all information in one central system. Major Smedley went further than just help found think-tanks and actually pioneered pirate radio in order to "liberate" information from state-control. The nostalgic look back on it now as the epitome of the cultural revolution which obliterated traditionalism in the 60s. In reality the first pirate radio-station was the beginning of the counter-revolution.

Smedley ran his radio-station with great success, but he was intolerant of competition and wanted a monopoly on his new venture. So when Reg Calvert popped up it was not unbelievable just how fast the situation deteriorated into violence. The rival station was raided by thugs-for-hire and Calvert was shot dead as he tried to confront Smedley, who went on to be acquitted of murder. Even though Reg Calvert represented the kind of individualist that the think-tanks, set up by Fisher, should have praised. The truth was Smedley represented the old aristocracy, which felt entitled to manage the system through the private sector. There was no room for people who genuinely wanted to act as free individuals regardless of the power-structure. To those with the upper-class sense of entitlement the doctrines of classical liberalism remain a useful tool in corroding the welfare state. As Adam Curtis has pointed out, the neoliberal aim was never to shake the established power-structure to its core and re-order it. Even for Hayek the state has its' role in a managerial capacity, to maintain a competitive order, which is not much different from economic planning in a sense. Of course, people like Antony Fisher and Oliver Smedley detest any kind of bureaucracy except when they are the managerial aristocracy.

It was in the midst of the economic stagnation of the 1970s that the "second-hand" ideas of the Institute of Economic Affairs were welcomed into mainstream politics, along with the doctrines of monetarism developed at the Chicago School of Economics by Milton Friedman. It was not until the 1980s that the welfare state was "rolled back" to make way for the market. It was then that the ideas of Hayek and Friedman supplanted Keynes as the economic orthodoxy. Thatcher blended these ideas with rational expectations and Goodhart's Law. The economy could not be managed by the state and there was no way to achieve full employment, so it was tossed aside as a goal that should even be considered. The post-war settlement of social democracy was torn apart bit by bit. The social planners had failed and so all other alternatives could be dismissed even as options in the new era of "popular capitalism". The promised dynamism of the free-market could be unlocked through the politics of 'commonsense' rather than ideology. The irony is that this is the ideology of the free-market, it becomes even more evident when the mission runs up against serious obstacles.

Saturday, 19 November 2011

The Eurosceptic Reaction.

"Angela Merkel is an unfuckable lard-arse." - Silvio Berlusconi 

As the crisis hit the Eurozone we have seen the usual wing-nuts of the Conservative Party go ballistic on the question of EU membership once again. It has led to amusing spectacles of toffs talking tough, with Jacob Rees-Mogg spitting out with references to Shakespeare's Henry V not to mention Bagpuss. John Major has labelled the plan a "heat-seeking missile" aimed at the City of London. It is interesting to find that the defence of banking and the matter of national sovereignty converge in the hollow heads of Conservative politicians. The possibility of a financial transactions tax across Europe is well overdue, actually it is a decent step towards a tax on international banking as a whole. The Eurosceptics are opposed to any move on the part of the state to tax the wealthy, while they muddle up the intervention to save the mega-rich from higher taxes with some kind of patriotism. Unsurprisingly, the banks have pumped £42 million into the Conservative Party since 2005. Some might think these people want to pull-out of the EU so our country can become a plaything of international finance.

Meanwhile good old-fashioned Europhiles like Michael Heseltine are still standing by the Euro, for we should not forget that the Euro was always a right-wing project and the European Central Bank does not care about unemployment. It was the old Tory position which was held by everyone from Churchill to Heath. It was renegades like Enoch Powell who were so vehemently opposed to integration with the Continent. It is no coincidence that the same opposition within the Conservative Party, as well as from UKIP, comes from admirers of Powell. This is the irony of the situation, David Cameron has a lot in common with Angela Merkel. Both of them are conservatives in leading states, not to mention deficit hawks, who are suspicious of the French. The nationalism of Powellite thought provides easy answers to the problems festered by the untrammeled forces of the market. It is no coincidence that Enoch Powell stuck to his line on immigration as Thatcherism, which he supported, broke the back of the working-class.

The answer to the Eurozone crisis is not withdrawal and British schadenfreude is neither wise nor appropriate in a time of such turmoil. The parochial attitudes of nationalism are most unbecoming for the UK, whether it be the resentment with which foreigners are greeted; the deluded view of our own past or the suspicion of our neighbours. It is convenient for the dispossessed, and even more for those who dispossessed them, to spread the lie that the EU is the source of everything wrong with Britain. The people of this country have been fucked over by the mega-rich and their allies, we deserve answers and we look for them. Sadly in the wrong places often. The despair at Whitehall has been channeled towards Europe, benefit scroungers and immigration, so that the fears of working-class people might converge with the elite interests. We have seen the lowest voting turn-outs in Britain since the establishment of the vote. Only fear can drive people forward in this supposedly post-political age.

The position of 'national sovereignty' has a convenient blind-spot, from where we can't see Trident is a part of the American nuclear-command system. Not one of these people seem to care that the British foreign policy is just an extension of the American foreign policy. The last independent decision on foreign policy was over 40 years ago when Harold Wilson refused to support the criminal war in Indochina and send British troops to die in Vietnam. US foreign policy has often trumped the decisions of British policy-makers. It was Dean Acheson who remarked at the peak of the missile crisis in 1962 "Britain is our lieutenant, the fashionable word is partner." The British ruling-class prefer the fashionable word to the blunt truth. At the height of the missile crisis in 1962 US planners treated Britain with utter contempt, keeping the UK government in the dark as they took actions which could have led to the destruction of Britain in a nuclear exchange with Russia.

The so-called "special relationship" is mostly an illusion generated by the close proximity of interests that the British elites share with the American ruling-class. This is the reason it is only "special" on this side of the pond. The Common Good does not enter into this at all and the working-classes of both countries are mere playthings. At the same time the British elite experience a duality of interests, torn between the US and the EU, as well as a fear that the UK might lose its position as Uncle Sam's lieutenant in Europe. If you want to see a real special relationship look at American relations with Israel. Still it has to be said that the miserable liars who govern us have relationships of convenience with American Presidents. Think of the millions Tony Blair is currently shoveling into his pockets as he rubs salt into the wounds of people devastated by US foreign policy. The Medal of Freedom has been awarded to Tony Blair, John Major and Margaret Thatcher for their subservience.

In the Cold War a united European state had the potential to stand as a social democratic bloc independent of the US and the Soviet Union. The superpowers could have been balanced off against this bloc. Now there is only the American empire, with emergent powers in the East, to which Britain has become a mercenary state without the political grandeur of Israel. We shouldn't kid ourselves with referenda: the choice is not Whitehall and Brussels, it is between Washington and Brussels. Europe still has the potential to emerge as a bloc of independence from American power, there is still a long way to go before the EU is perfect of course. The democratic deficit in Brussels is an embarrassment, but the democratic deficit in Washington is a disgrace and only the American people can solve that problem. We have yet to build a solid European labour movement and organise a serious push for a greater standard of living in Europe. The struggle will be a difficult one granted, but there is no future with the Americans.

Wednesday, 16 November 2011

Hobbes on Democracy.

Thomas Hobbes was a perfect foil for Machiavelli in a way, as Machiavelli claimed to have discovered a new continent of a new order but it was Hobbes who made that continent habitable. The focus of Leviathan, specifically in chapter 19, shifts onto the different kinds of commonwealth as distinguished from one another in terms of institutions and the succession to sovereign power, as well as in differences of convenience, aptitude in the creation of the peace and security of the people. For Hobbes there were only three main models of commonwealth: monarchic, aristocratic and democratic. This is due to the indivisible nature of sovereign power can only be peacefully manifested in representatives of “either one or more or all”.[1] For our purposes we will be focused particularly on what Hobbes has to say about democracy rather than aristocracy and monarchy. But the views he held on aristocratic and monarchic systems remain important only insofar as they can be distinguished from a democracy or a “popular commonwealth” as Hobbes deemed it.

Early on in the chapter democracy is marked out as distinct from monarchy and aristocracy, as a popular commonwealth in which representation comes in the form of “all that will come together”. Thomas Hobbes contrasts this with monarchy, where the representative is one man, and aristocracy, which is only partial assembly. In the case of a democracy every man has the right to enter into it, rather than in an aristocracy where only the men distinct from the rest can enter. Notably, if the power of the monarch has been limited then the state in question is not a monarchy as sovereignty fell into the hands of an assembly (which could be either democratic or aristocratic). For Hobbes the indivisibility of sovereign power is necessary for peace, an end for which sovereignty is instituted. Once power becomes divided it is no longer sovereign, so for conflict to be avoided it is vital for a duality of power to be averted.

For peace the sovereign must have absolute authority, be not a party to the covenants and hold absolute authority only to the extent that the sovereign has the power to enforce the law. Then it is absurd to think that there could be perpetual peace when sovereign power is in the hands of an assembly (as in a democracy) for the absolute representation of the people would fall to subordinate representatives and the power could very easily become divided. Thus subordinate representatives pose a danger to sovereign power insofar as such a system can become a source of division in the commonwealth.[2] So sovereign power can be divided, but it shouldn’t be because power ceases to be sovereign once it has been divided.[3] Think of instances in which states have collapsed into chaos amidst an uprising, a rupture of the order from which the sovereignty of the regime is undermined to the extent that a duality emerges and a rival for sovereignty appears.

There are also cases where the sovereign takes the form of a one-party state and a sudden rupture explodes the status quo. The revolution and subsequent civil war in Libya was one such example where power was stripped of its sovereignty as the people rebelled, but eventually sovereign power was manifested in a new government as the Gaddafi regime was brushed aside in Tripoli. We might even segue into theories of what makes a revolutionary situation. We might understand a revolutionary situation as defined by the emergence of what Charles Tilly called “multiple sovereignty”, which has three main features. First of all, the existing state suffers a loss of power to contenders and rivals. Secondly the rivals fall back on a base of popular support which is a significant portion of the population overall. Lastly, the existing state cannot, for whatever reason, repress the contenders and the base of support behind them. The fears of a divided sovereignty, which Hobbes had, are precisely a fear of this kind of situation arising.

Whether or not it is possible for a sovereign to hold absolute power regardless of its' form (whether monarchic or democratic) is not really explored by Hobbes at this point. For Hobbes, democracy is problematic for a number of reasons let alone the question of indivisible sovereignty. In a democracy the people of the assembly would not just represent the common interest of constituents. The individual has their own private interests which would rival the common interest and could easily come first, as Hobbes notes that the “passions of men are commonly more potent than their reason.” Where the public and private interests are unified the public is most advanced, Hobbes maintains that in a monarchy the private interest is the same as the public. The reasoning being that the wealth, power and honour of a monarch are derived from the subjects. The ability of the state to defend itself from enemies would be undermined if the people are poor, contemptible or too weak to maintain such a war. In a democracy, the prosperity of the people contributes not so much to a corrupt leadership as it does many times deceit, treachery and conflict.

Hobbes points out that a monarch can receive counsel wherever and from whomever he so deems fit, in secrecy, at whatever point before the time of action. In a democracy in which a sovereign assembly has been established, there is no time or place in which the assembly could receive counsel with secrecy because of the multitudinous nature of an assembly. So when such an assembly requires counsel, it will not be received except from those who have a right to do so and may not leave the confines of its own body to do so. Typically this will mean that the assembly will receive counsel from people who are more versed in the accumulation of wealth than knowledge. The advice could likely come in the form of long discourses, which would commonly call upon men to act in various ways rather than govern them. For Hobbes the assembly could reach out to counsel from the unskilled in civic matters, orators and so on, who give their opinions in speeches full of pretence and inept learning, this could only lead to the disruption of the commonwealth or do it no good at all.

It is possible that the assembly could strip good citizens of property to enrich friends of the assembly (e.g. friends of the people rather than the friends of elected representatives). Hobbes concedes that this is a possibility in a monarchy, he maintains that “we do not read that this has ever been done.” For the favourites of the assembly are more numerous than a monarch, so there is a greater temptation to serve the interests of their own kindred as well as to seductive orators – who have greater power to hurt than to help, as “condemnation than absolution more resembles justice.” Not only is it impractical for the assembly to be well advised there is a great potential for inconstancy as the potential for such in a monarchy is multiplied as with the mass of the representative. For Hobbes the resolutions of a monarch are subject to no other inconstancy than that of his own nature, whereas democratic resolutions are subject to the nature of the masses.

The assembly would be prone to disagreement as a result of the nature of man, as well as due to envy and interest, to the height of such disagreement a civil war maybe the consequence.[4] So it would seem that the stability of the state in question is at stake with the rise of a democracy. At the same time, the whole of the assembly cannot fail unless the multitude fail as well and there is no place for the question of the right of succession in a democratic government for the reason that anyone can enter into such a government. Though the death of a monarch differs from the death of an entire assembly, it would still dispossess the people of a representative and leave the multitude without a sovereign which unites them. The question of stability inevitably arises once again, without the guarantee of the “peace of men” it is likely that the state could return to the “condition of war in every age” and the only alternative to this is an “artificial eternity of man”.[5]

[1] Leviathan, Thomas Hobbes, Hackett Publishing Company, Inc. (1994) pg.118-120
[2] It makes sense then that Hobbes considered it absurd that the monarchy could hold sovereign power as it invites the people to elect representatives capable of putting forth the advice from the people. In the rare case of a monarchy in which the monarch is never considered a representative, though called sovereign, the status of representative would fall to those who have been sent by the people to carry their petitions and give the monarch their advice. In such cases then it is imperative for the “true and absolute representative of a people” to instruct the people in such offices and watch how they admit any other representation on any occasion.
[3] Leviathan, Thomas Hobbes, Hackett Publishing Company, Inc. (1994) pg.120-121
[4] For Hobbes, to say it is inconvenient to place sovereign power in the office of one man or an assembly of men (e.g. rather than a democratic assembly) is to hold that “all government is more inconvenient than confusion and civil war.” All danger must originate in the dispute between those who are for an office of such honour and those out to profit for themselves.
Leviathan, Thomas Hobbes, Hackett Publishing Company, Inc. (1994) pg.122-123
[5] Leviathan, Thomas Hobbes, Hackett Publishing Company, Inc. (1994) pg.124-125

Sunday, 13 November 2011

No Society, No Alternatives.

The Iron Lady.
In the General Election of 1979 the Conservative Party came out on top with Margaret Thatcher as Prime Minister. For Thatcher any attempt to manage the economy would lead to disaster and the catastrophic crash of 1973 was caused by Heath's attempt to control the economy. Instead Thatcher decided the state should be "rolled back" and power be handed over to the markets, a wave of deregulation and privatisation followed. The idea was that the unhindered power of the free-market would reconstruct industry. Heath removed exchange controls and opened up the UK economy to the international financial markets, money could now be moved in and out of the country at will. The banks could now raise huge amounts of capital from anywhere in the world in order to finance the purchase and sale of a vast number of companies. The banks could now target a company, finance entrepreneurs to buy that company and then strip the company of its' assets. The point was to increase profits and maximise return to the shareholders.

Private Vices for Public Benefits.
We might understand Thatcherism as a combination of monetarism and rational expectations, which suggested that the changes in policy could only be managed if the public were convinced that the government would stick to it regardless of what happens. Of course, the cuts in public spending required a determination to confront and smash the labour movement. This went as far as sicking the right-wing elements inside MI5 on Arthur Scargill and the NUM. Thatcher provoked a strike with the announcement that there would be a wave of pit closures and redundancies on the grounds that it was cheaper to import coal. The Thatcher government went after one union after another in a bid to sweep away the remnants of the post-war settlement which had empowered working-class people. The country was opened up to foreign investment and competition, which further undermined the trade unions and destroyed industries like steel, cars and shipbuilding.

After the fall of the Heath administration in 1974 it was clear to the elites that the labour movement had to be broken. It was the only way to turn back the tide as the working-class made significant gains in the standards of pay and working-conditions. One of Thatcher's economic advisers Alan Budd has since conceded that in his most pessimistic moments he suspects that his ideas had been ruthlessly used. Furthermore that the ideas of monetarism served as a theoretical cover for the Thatcherite policies, which could not have been implemented otherwise. The capitalist class had simply seen in the ideas a way to instigate a crisis of capitalism which would smash the trade unions and leave the country immersed in unemployment. It would be easy to hold down wages from then on and profits could skyrocket once again. The rise of Thatcherism might then be attributed to the structural needs of the system for a much more timid working-class that could easily succumb to exploitation and domination.

The Road is Clear.
In the 1980s there was a decline in wages for working-class people and unemployment increased rapidly as the benefits system came under fire from the government. To supplement the loss in demand the need for a fast-track line of credit emerged, the debt economy was pushed to its limits as households across the country fell back on credit cards, loans and mortgages. The privatisation of social housing in Britain at first appeared as a gift to the working-class as it made it possible for them to buy an asset, at a relatively low cost, which might make them rich one day. The housing market was seized upon by speculators, eventually pushing low-income earners out to the outskirts of cities as house prices skyrocketed. The old industries were swept aside to make way for the new era, in which money would be made from money and not much else in Britain. After 11 years of Thatcherism manufacturing in the UK had been virtually destroyed, employment in manufacturing plummeted by 30%.

The deregulation of the financial colossus in London led to the currency crisis of 1984 - speculators had begun to sell pounds and buy dollars because of high exchange rates in the US - and the government just had to stand back and watch. It was the early signs of what would come in later years. In 1987 the Thatcher government retained power for a third election just as the country was hit with an economic crisis, as a wave of panic swept the stock market, as it turned out that shares which had risen in value for 4 years were over-valued. The global markets were soon infected by the contagion of fear and the governments were powerless in the face of such chaos. The rise of a rapacious financial sector had been the works for a long time, now it surfaced and went on to stumble into a devastating crash in 1992 and an even more destructive crash in 2008. As the political class had unleashed the forces of finance they had bound themselves as slaves to the financial colossus in the City of London.

The Long March, to Where?
The fall of Thatcher in 1990 came after the Poll Tax demonstrations descended into riots in Trafalgar Square converged with internal tensions in the Conservative Party. By then unemployment had reached around 7%, working-people had been by some of the biggest wage cuts in the world as inflation began to rise into double figures once again. John Major looked to reassert control over the market for the purpose of setting limits to the fluctuations of the exchange rate. Of course, it was too late for the Grey Man as the old forms of political control and planning had been obliterated as options. So under Major, Britain became a part of the Exchange Rate Mechanism and the pound was fixed to the Deutschmark in order to liberate the currency from the speculators. The currency markets then took on the British government, to force Major to devalue the currency and to abandon the Exchange Rate Mechanism. It began with the sale of billions of pounds on the foreign exchanges.

The marketisation and systematic privatisation has brought destruction to major industries and has significantly undermined the welfare state as it was in the post-war era. The workers' share of GDP in wages reached its highest points in the 70s, Thatcherism succeeded in the reversal of this trend and the policies which she first implemented in the 80s have become the orthodox for British governments. Between 1997 and 2009 wages for working-class people increased by 45% while the wages of high-earners increased by over 300%. Today we live in a society which is more unequal than it was 40 years ago, the top 10% get 31% of income, while the bottom 10% get 1.3% of income, this is the same 10% of the British population who sit on £4 trillion in wealth. On top of this, the end of the Cold War signaled the beginning of a supposedly post-political era in which only managerial politics remain and Thatcherism has taken the place of the social order it aimed to dissolve. We live in an era without ideas, where no alternatives are imaginable and where even the suggestion of 'society' is suspect. It was the collapse of the post-war settlement under the weight of its own contradictions which has left us in this state of affairs, now we need a new settlement.

Wednesday, 9 November 2011

The End of the Golden Age.

The Last Gasp of Liberalism.
In the late 1960s the Labour government cancelled many of its election promises and moved to cut public spending as it faced rising inflation. The government turned to raising productivity in order to drive growth, a quick way to reorganise British industry was needed. It would end up following a model pioneered by Jim Slater, who set out to strip companies of assets in order to generate a short-term profit. Slater did not profess to hold any concerns at a social level, the only concern he had was to make money and nothing more. So the government put together an industrial reorganisation corporation to supervise a radical experiment in British industry. Under the guidance of Tony Benn the state orchestrated massive takeovers and mergers in British industry, with conglomerates forged out of old companies and thousands of workers made redundant in the process. The Wilson government effectively oversaw the liquidation of industry in order to raise productivity and efficiency to new heights.

Thatcherite before it was Cool.
The Conservative government formed around Ted Heath in 1970 embarked upon a new approach to the economy. Heath rejected the suggestion that the state should or could manage the economy, instead he opted for less intervention in the economy and ultimately to leave the lame subject to the forces of the market. As Rolls Royce went bankrupt and the experiment led to the closure of numerous factories and unemployment began to rise Heath backed away from the approach. The government then went on a "dash for growth" through the liberalisation of credit and a raised public expenditure as the earlier policies seemed to not be working. For a moment it seemed to work, the British economy boomed briefly and then the phenomenon of stagflation emerged as inflation and unemployment began to rise at the same time. The Keynesian orthodoxy was left perplexed.

In 1973 the Conservative government attempted to suppress wages as inflation skyrocketed and in doing so provoked violent strikes. Whatever approach the government took it seemed that the trade unions were a significant obstacle. Ted Heath decided to slam the breaks on the economy, immediate freezes were introduced on wages, prices and even profits. It was a last ditch attempt to control the economy and the stock market panicked at the suggestion of a freeze on profits. Then came the OPEC protest against the Yom Kippur War, in which oil prices were hiked up by 400% and the consequent price shock led to rates of inflation as high as 27% by the mid 70s. The British economy fell into a catastrophic crash as a result, even though the explosion of oil profits flowed to British energy corporations and the rise in price made North Sea Oil increasingly profitable. Finally amidst industrial action, power cuts, a three-day week and out-of-control inflation the Heath government lost power in 1974. But the post-war settlement had been further undermined. The suggestion that the economy could even be managed began to breakdown.

The Science of Money.
None of the traditional methods of Keynesian economics seemed able to resolve the problems in the UK economy in the 1970s. It began to look as though any attempt to pump money into the economy for the purpose of growth was doomed to failure. The proponents of monetarism came on the scene with a theory which seemed to provide technical solutions to the bizarre situation. There was too much money chasing too few goods in the economy. To bring inflation under control it was necessary to slow down the rate of monetary growth. For Milton Friedman the economy was a predictable system governed by laws which were just as objective as the laws of science. The political project of the monetarists went as far as to further challenge the state as a planning apparatus of the economy. The beginning of the end for social democracy was set in motion a few years before as the Bretton-Woods system fell into disarray. The Nixon administration dismantled it as the system was strained by the porous boundaries to capital flows. The US government abandoned a fixed exchange rate in 1971 as gold could no longer serve as the base of international money. The US government retreated from traditional methods of control and the exchange rate was left to float.

Richard Nixon was the last liberal President of the United States, it was the Carter administration who laid the foundations for Reaganomics. Britain soon became enthralled in the same economic theory in the late 70s. Perhaps then we might deem Harold Wilson the last social democrat to stand as Prime Minister of the UK. The country was immersed by desperation as Britain seemed doomed to descend into a gray mediocrity and in 1976 Harold Wilson resigned. The resignation came after a persistent smear campaign against him by a small faction of ultra-rightist MI5 agents - who thought Wilson was a Soviet spy sent to destroy Britain. It was just one of a few plots - which were never followed the logical conclusion - within the Establishment, it went as far as plans to install Lord Mountbatten as Prime Minister and the formation of private armies to fight unions in the event of a General Strike. The resignation opened up a void in government, Tony Benn, Michael Foot and Denis Healey came forward in competition with Jim Callaghan, Anthony Crosland and Roy Jenkins. The right-wing of the Labour Party came on top with Jim Callaghan winning.

A New Game.
That same year Britain fell into the abyss and faced bankruptcy so the government turned to the IMF for  a loan, the catch was a prescription of economic reform. The nature of the economic reforms were clear at the Labour Party Conference that year when Prime Minister James Callaghan stated "We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour that, that option no longer exists insofar as it ever did exist. It only worked on each occasion, since the War, by injecting a bigger dose of inflation into the economy on every occasion followed by a higher level of unemployment as the next step." The IMF came to the rescue later that year and Milton Friedman was awarded the Nobel Prize in Economics, this demonstrated the shift in paradigm as monetarism came to the forefront of economic theory. By now there was a new leader of the Conservative Party, Margaret Thatcher had surrounded herself with monetarists such as Keith Joseph. The road was clear as the people became increasingly disillusioned with the Labour government.

How did we get here?

A Safe Pair of Hands?

For over 30 years the post-war settlement has been systematically eroded and it looks as though we may see the end of the welfare state in our life times. The austerity measures David Cameron has delivered unto us have come with the promises of the "Big Society". Perhaps the political class has a Victorian model in mind, the philanthropic capitalism that prevailed throughout the 19th Century. The welfare state constructed under the Labour government of 1945 to 1951 never pleased everyone and it was met with strong criticism from the right-wing media with The Financial Times in the lead. But the criticism of the welfare state took on a much more mainstream character in the 1960s and became increasingly emphatic throughout the 70s. Even though the social democratic era which lasted for 30 years has been likened to a "golden age" of capitalism as a significant growth and development was achieved by historical standards. It culminated in the rise of the Thatcherites and the subsequent 30 years of neoliberalism.

Second-Hand Ideas.
The transition did not simply come about out the growing criticism of the welfare state in the 1960s and 70s, there was a propagation of neoliberal ideas throughout this period and it began with the Institute of Economic Affairs. It was a right-wing businessman Anthony Fisher who founded the Institute in 1955, it was the first of 150 think-tanks which he would set up to disseminate "second-hand ideas". In the early 50s when Anthony Fisher was an isolated figure working with Major Oliver Smedley after they met at the Society for Individualists. Both of them were opposed to the state planning involved in the reconstruction of Britain after the Second World War. Smedley and Fisher were convinced that the increasing power of the state would lead to the end of democracy. For them even the Milk Marketing Board and the Egg Marketing Board were enemies of liberty. Importantly, it was Friedrich Hayek who talked Anthony Fisher into setting up think-tanks in order to the shape the dominant discourse and ultimately influence public opinion to achieve political change.

By then the British Empire was falling apart with the rising tide of revolutionary nationalism in the Third World. The political class was determined to see to it that the UK could be invigorated to the level of an economic powerhouse in spite of the collapse of the Empire. With the achievements of the 1940s came a state apparatus of economic planning in which technocrats worked to secure prosperity in Britain. The National Economic Development Council was set up in 1961 with the growth target of 4% between 1961 and 1966. At the time NEDC was dominated by Keynesian economists who were convinced that it was possible to control an economic boom, so that the rise of aggregate demand would not necessarily lead to the economy being flooded with imports and wage rising leading to inflation. There was no new theory, just a new use of old methods. NEDC pledged to plan investment in industry as the government would hold down inflation. The Conservative government poured money into the economy and by 1963 it looked as though the economy was on track with the plan as a boom was underway.

A Soviet Spy?
In opposition the Labour Party responded with a national plan which would be run by the Department of Economic Affairs, that would aim to deliver a great deal of growth in 6 years as well as the expansion of British industry would be stable insofar as it is controlled. If Labour could succeed in doing this then there would be little need to redistribute wealth because there would be more for everyone. Harold Wilson came to power just as the economic boom initiated under the Conservative Party began to overheat, imports were flooding the country and wages were rising. It looked as though the Labour government had to devalue the pound in order to make British exports cheaper abroad. It was in part the inability of the political class to accept British decline which led to a refusal under Wilson to devalue the currency. Instead the Labour government opted to pin down wages and prices, as well as initiate spending cuts and cancel election promises. There were repeated runs on the pound as foreign investors lost confidence in the Labour government before finally Labour conceded the devaluation of sterling, but by then it was too late and the economy grinded to a halt.

In doing so the Labour government under Harold Wilson had unwittingly undermined the notion of the planning apparatus as a unique and certain method to secure significant economic development at a faster pace. During this time that the City of London became increasingly important as the government acted to protect and enhance the powers of finance with respect to the global flow of finance capital. The protection of finance capital through the manipulation of interest rates conflicted with the needs and interests of domestic manufacturing capital. A structural division within the ruling class emerged as the conflict held back the expansion of the domestic market via the restriction of credit. The commitment to a strong pound had undermined the export position of British industry, this laid the ground for the balance of payments crises of the 70s. These contradictions played a fundamental role in the breakdown and regeneration of the British state-corporate nexus which composed the transition from social democracy to neoliberalism.

Monday, 7 November 2011

The Threat of/to Iran.

Let's Play MAD!

The recent talk of bombing Iran may indicate just how paranoid and irrational policy-makers in Israel actually are. There seems to be a distinct inability to pursue self-interest at the most basic level, to limit the threat of terrorism, never mind an ability to recognise the moral degeneracy the Israeli government has readily indulged in for so long. The real question is whether or not the attack would be authorised in Washington. We known that the US and UK have contemplated backing such an attack on Iran. It is possible that the US and Israel will trap themselves into a situation in which they will have to bomb Iran. The Western paranoia around Iran is interesting in itself, it seems to have persisted in spite of the criminal invasion of Iraq and its devastating consequences: over 1 million dead, 5 million children made orphans and 4 million displaced. Many millions more have been dispossessed by the illegally imposed economic reforms, then there are the rates of cancer higher than Hiroshima in Fallujah.

Even though Iran has quite a low military expenditure, with no capacity to deploy force abroad and a defensive military doctrine. The only significant aggression that the country has been involved in centuries was when Iran seized control of a couple of Arab islands. Incidentally, that was in the 1970s under Pahlavi and the US supported the action. After Reza Pahlavi was dethroned, the US supported Iraq in a military strike against Iran in 1980 that turned into a war and raged for almost a decade. We should remember, as Iranians remember, that the Shah was installed in power after Mohammed Mossadegh was overthrown in a coup orchestrated by the CIA on the behalf of the British government. The democratically elected government of Iran was overthrown in 1953 to protect Western oil interests, Prime Minister Mossadegh had nationalised the oil fields which were owned by the Anglo-Persian Oil Company that has since been renamed British Petroleum. Pahlavi ruled with an iron fist for 26 years until the Revolution of 1979 and the monarchy was supplanted with an Islamist regime.

Don't forget Who Runs the World!
In the region Iran is a "threat" to order and stability because it is independent from US influence and does not take orders from Washington. This might make sense of the way Condie Rice questioned the legitimacy of the Iranian government. It is true that the elections of 2009 were rigged to secure an already safe victory for conservative Mahmoud Ahmadinejad over reformist Mir-Hossein Mousavi. It's quite rich for a Bushite to question the legitimacy of a government given the fact that the Bush administration was never actually elected. There is actually little difference between the US and Iran insofar as the scope for democracy is concerned, though the American system is certainly more sophisticated and a far more well oiled machine. Instead of a clerical apparatus choosing the candidates the Americans have found a way for money to limit the range of candidates and essentially elect the President. The condemned system of "guided democracy" in Iran has less crude and less brutish parallels throughout the West. Really, the issue here is that the Islamist regime in Tehran does not take any orders from Washington as the Saudi Royals do. If it was about legitimacy surely Rice would question the position of King Abdullah.

Ironically, the position of Iran has been strengthened considerably by the invasion of Iraq, which Mohammed Khatami wanted to support and even wanted to send Iranian troops into Iraq as part of the invasion. Of course, Khatami's reformist proposals for American-Iranian relations were shattered when Bush came out with the "Axis of Evil" which placed Iran as an enemy alongside Iraq and North Korea. At the same time, the American occupation of Afghanistan and Iraq has posed a threat to Iran as well as the hostility of the Gulf States to the Islamic Republic. The Americans have sought to nudge the Indians towards Turkmenistan rather than Iran, with occupied Afghanistan as the main root of any hypothetical pipeline. The Gulf States are out to undermine the potential of any future Shi'ite uprising in Northern Saudi Arabia and on Bahrain which might rip major oil fields from American control. So a nuclear capability would serve the regime as a deterrent to a hostile superpower, all the while Israel hoards hundreds of nuclear weapons.

The Axis of Feeble?
The attack could be launched from the US military base situated at Diego Garcia, which is an African island that was swept clean of inhabitants by the British in order for the Americans to build a military base. The island is a major outpost of American aggression in the region with the capability to launch attacks on major targets. The Obama administration has stationed hundreds of 'bunker busters' at Diego Garcia - each with the capacity to destroy thousands of tonnes of reinforced concrete - as well as submarines armed with tomahawk nuclear missiles. It was the exposure of a bizarre plot to assassinate Saudi ambassador Adel al-Jubeir which kick-started the spiral into a military conflict with Iran. There has been a great deal of scepticism around this plot. Even the RAND Corporation has found that it seems implausible the Iranians would carry out such a plot, as it would significantly harm their own national interests. It seems highly unlikely that the Islamist regime would reach out to Mexican drug gangs to blow up a Saudi ambassador in a New York restaurant. Nevertheless, the plot has prompted talk of whether or not it constituted an act of war by Iran on the US thereby providing a justification for an all-out war.

As Israel was established in 1948 Hannah Arendt predicted that the Jews of Palestine would become like the Greeks of Sparta, they would change character to such an extent that they would no longer be able to represent world Jewry as a whole. Consequently the state would no longer function as the Jewish homeland. We might look at the people who run the Israeli state to see if Israel can really claim to represent the Jews of the world, do we really think Netanyahu meets this standard? Does Avigdor Lieberman come any closer? Think of Netanyahu's words of the "beneficial" impact of 9/11 and the invasion of Iraq for the strategic betterment of Israel. Think of the racist Lieberman plan, which includes annexation of greater land and separation of Arabs from Jews. It would impose a loyalty oath for anyone looking to become an Israeli citizen. Let alone the reactionary drivel held as thought in the minds of thugs like Avigdor Lieberman. For Arendt this is the result of the state model Israel has taken, specifically the European form of the nation-state as defined in ethnic terms. As an alternative to the ethnic nation-state model - which would conceive of Israel on a racial notion of Jewishness - Arendt argued that an independent state for Jews and Palestinians could have been founded within the British Commonwealth of Nations wherein each group received equal rights.

Instability in Stability.
Today, the policies and actions of the Israeli government have long been incongruous to the liberal values of a vast number of Jews in the world. It is certainly impossible to find anyone who is content with the situation, putting aside serious human rights violations, the perpetual war-machine of Israel prevents the state from pursuing significant socio-economic development. Israel is now one of the most unequal countries in the world, it was once amongst the most equal and featured a socialistic economy. The Israeli economy has a strong financial sector, remains a major exporter of diamonds, chemical fertiliser and high-tech industry which is tied into a huge arms industry - which has done business with South Africa in the days of Apartheid. Israel does a great deal of business with developing countries when it comes to the arms trade, including Colombia and Honduras under right-wing dictatorships. At the same time, the ceaseless war-machine, that came out of the seemingly constant threat from Arab neighbours, has pushed aside all over concerns including socio-cultural development like the Kibbutzim.