Monday, 23 February 2009

Some thoughts on moral breakdown

Melanie Phillips, good evidence for Oscar Wilde's claim that 'A man who moralises is usually a hypocrite, and a woman who moralises is invariably plain.'

The only thread to the pieces I've put together in this post is that they challenge the usual blah drone blah from 'Conservative' commentators, such as Melanie Phillips, that the sole reason for the perceived moral decline of this country is due to 'The Left' and 'Political Correctness (Gone Mad)'. These nebulous concepts are rarely, if ever, defined. Whenever I hear people slagging off 'The Left', I have to ask, as someone who thinks himself somewhere on that side of the political spectrum: are you talking to me?

Perhaps I am in a very small minority, but I think if it is to be more than a label, being on 'the Left' means giving a damn about others. It definitely does not mean wanting to see society fall apart into a Hobbesian war of 'all against all'. Quite frankly, for someone not giving a damn about others is glorified Thatcherism and the forces of 'creative destruction' she fronted (being the 'Useful Idiot' of the City of London and transnational capital) devastated the moral capital of British society. As Paul Routledge argues below, the vandalism of Britain's industrial base during the Thatcher-Major years (which Blair and Brown did little, if anything, to reverse) has had terrible social repercussions, not least in the former coalfields:

It’s the pits for Norman Tebbit to say sorry now to the miners
Paul Routledge, Daily Mirror, 13/02/2009

The greedy, wicked bankers said “sorry” first, but now it’s the turn of Norman Tebbit to show remorse.

For what he did to the miners!

Thatcher’s right-hand man during the Great Strike For Jobs of 1984/85 is conscience stricken about the Tory devastation of mining communities.

It’s a bit late now, Milord Tebbit. Twenty five years too late next month, as it happens.

You should have thought about the cruel consequences at the time.

But in a new book about the strike he says: “Those mining communities had good working class values and a sense of family values. The men did real men’s heavy work going down the pit.”

Yes, and who deprived them of that work and destroyed those communities? You and your fellow Tory ministers did.

“There were also some very close-knit communities which were able to deal with the few troublesome kids,” he says.

“If they had any problems they would take the kid round the back and give them a good clip round the ear and that would be the end of that.”

Yes, and who turned the coalfields into a police state, where community law and order collapsed? You did.

“Many of these communities were completely devastated, with people out of work, turning to drugs and no real man’s work because all the jobs had gone,” he continues.

Absolutely right. The former pit villages are rife with drugs largely because you took away that work and hope from young people.

“There is no doubt that this led to a breakdown in these communities, with families breaking up and youths going out of control,” Tebbit admits.

Yes, because your government’s obsession with crushing the National Union of Mineworkers set father against son, brother against brother and family against family.

A way of life that had grown up over generations was smashed to smithereens.

“The scale of closures went too far,” he concludes. Quite so.

An industry that powered the nation was sacrificed on the altar of Thatcherite dogma. To assuage his remorse, Tebbit naturally blames this “enormous damage” on the strike.

The strike his government engineered because it hated Arthur Scargill and the NUM.

To the Tories, the fate of the miners and their communities was acceptable collateral damage in a class war.

Tebbit’s regrets are revealed in Marching To The Fault Line by Francis Beckett and David Hencke.

Unlike the bankers, he can’t bring himself to say “sorry”.

Not even after a quarter of a century, when he’s 77 years old. Pass the old crocodile a hanky, will you?

In spite of all of his admiration of Joseph Stalin, there is no doubt in my mind that Arthur Scargill was more of a practical patriot than Norman Tebbit ever was!

The IWCA are clear that the 'no such thing as society' attitudes implicit in Thatcherism's 'greed is good' worldview have fueled the rise of the lumpenproletariat.

Dealing with the renegades, 19th January 2009

Amidst all the concern about knife crime and gang culture, it is often tacitly assumed that the perpetrators are representative of alienated working class youth. Not so: what they are more generally representative of is a new -and growing- social formation that has willingly embraced a non-work ethic. It needs to be recognised that these lumpen elements represent a grouping that is quite separate from, and actively hostile to, the interests and well-being of the working class proper.

Recently a columnist from The Independent lashed out in a fury at the white working class, describing them as lazy, self-pitying and “the always-wretched and complaining”. To emphasise her theme, Yasmin Alibhai-Brown cited Karen Matthews as representative of what she unapologetically considers a lower breed. With a little more thought she might have strengthened her argument by adding the names Sean Mercer and the parents of ‘Baby P’ to complete an unlovely ambassadorial trinity.

Less easily dismissed is an article in the Guardian, by Andrew O‘Hagan entitled ‘What went wrong with the working class?’ It will make uneasy reading for some. He states bluntly that ‘the English working class is dead’ while Yasmin Alibhai-Brown bitches that it isn’t. While some of O’Hagan’s observations are indeed valid, where both he, like Alibhai-Brown, gets it wrong is in confusing and conflating the traditional working class with the emergence of the new underclass. This is hardly uncommon, as the benefits in propaganda terms for supporters of the status quo are self-evident. And for similar reasons, the ‘nouveau lumpen’ -a social and political menace that is deeply corrosive first and foremost to the morale and well-being of working class communities themselves- is rarely if ever addressed in political terms either.

Admittedly the biggest problem in identifying the trend is the physical proximity between the emerging underclass and the working class proper. Though they may share the same estates at the same time the former harbours instincts, values and aspirations at variance with and indeed hostile (like sort of low rent neo-liberals) to traditional working class custom and practice. This is what goes to make it so potentially destructive a fifth column. Karl Marx himself concluded that it represented ‘the most dangerous class of all’ for similar reasons. And given its current scale, a class is what it undoubtedly is.

What is society to them, or they to society?

Teen on teen murder may grab the headlines, but the prevalence of male teen pack on lone adult (often middle-aged) male murder is a barely less lethal, though much less heralded phenomenon. What also goes unmentioned in the midst of all the hand-wringing is that these crimes are effectively premeditated, in the sense that the perpetrators are ‘going equipped’, the tools of the job seemingly always at hand. But far more dangerous than any knife or gun is the psychological conditioning required for the sometimes entirely random murder as a rite of passage: well over 50 teen murders in London alone in two years and counting. That there is nothing similar in working class culture in the past half century to match this level of pathology cannot be ignored. The razor gangs, teddy boys, mods and rockers, punks and skinheads, and football hooligans did not come close. Which suggests that the type of individuals being steadily immersed into the gang culture are themselves the product of a new social formation. Instead of being the representative of alienated working class youth as portrayed especially in liberal and right wing circles, the leaders and opinion formers are more often than not the progeny of the ‘fallen idle’ - a renegade section of the working class that has learned to embrace the ‘no-work ethic’.

And even if initially a scarcity of choices is what propels these youngsters toward the life, the gang culture is alluring. More than anything what it promises the pack member (there is almost always a pack factor) is instant gratification. Money, status and sex (consensual or otherwise - mass rape goes unreported though is apparently not uncommon) all seem instantly more attainable, with the core philosophy all wrapped up rather opportunistically in the flag of ‘respect’. Put simply most are ‘in the life’ because they want to be. It might also be tempting to dismiss it all, as some do, as nothing but a lethal subculture (on the mistaken grounds that the scum only kill each other) but the belief system and philosophy they draw on -get rich quick, the weak go to the wall- has a considerably wider and more venomous resonance.

Why this is important politically is that once a lumpen mentality is allowed to take root over a generation or more, a pattern is set seemingly for other socio/ political relationships too. In place of civic pride, community spirit, or basic empathy and solidarity (none of which have any place in their world) there is instead an over-developed sense of individual entitlement combined with a perverse pride in subverting a core socialist tenet: ‘you only take out exactly what you’ve put in’. It follows that outside of what affects them directly as individuals or maybe immediate family there is a malign indifference. After all what is society to them, or they to society? All told, the corrupting consequences of the no-work ethic appear to be numerous and hardwired.

A knock-on consequence is that many ordinary working class communities become blighted by a not dissimilar contagion. Thoroughly demoralized, many no longer regard themselves as having any real stake in how their neighbours or the wider community is getting along. Previously a deep sense of community and comradeship made many an otherwise downtrodden area bearable. Working class families enjoyed the same sense of belonging be they in the Gorbals, the East End or Harlem. It made life worth living. This sense of shared working class values has been almost entirely extinguished in many areas of Britain today. In Moss Side there is no evidence of local outrage at child killers living in its midst. So three years on the killer of Jesse James walks free. And though a number of individual have been charged and convicted in relation to the murder of 11 year old Rhys Jones in Liverpool’s Croxteth, a similar code of ‘omerta’ dominated that investigation.

Much of this destruction can be directly attributed to the 30 year crusade by Reagan/Thatcher/Blair, who, inspired by right-wing think tanks, became convinced they could actually influence how people think. Atomising social relations and fundamentally changing what people had faith in, is, if anyone needs reminding, what neo-liberalism was really about. Having done so successfully, we now are reaping the whirlwind.

Consequently with the arrival of each new generation previously identifiable working class ideals are eroded or displaced, while ‘lumpen’ characteristics typified by a venal and brazen opportunism seem to become ever more pronounced. In some areas it already appears to be the natural condition.

Understanding more and condemning more

Understandably the emergence of the ‘underclass’ (with the working poor being wrongly included) has been greeted with glee by many right-wing academics. Usually because it affords them a soft target, an ideal opportunity, without ever appearing to over-reach, to justify the existing order and validate middle class prejudice. Among the more seriously motivated the scrutiny of this new social set is to discern if it might carry a possible threat to the existing political order. In actual fact they needn’t worry, for as an effective fifth column it is already proving a considerable buttress to the status quo though arguably still in its infancy.

But precisely because the IWCA is in business to ensure that a political threat to the system is not extinguished, aspects of housing, education and social security policy, apparently well meaning and benign, when mixed with the overarching neo-liberal narrative may have become toxic. If that proves to be the case they have to be pinpointed and rooted out. What strengthens our class - as a class - is always strategically good while any polices which emasculate, diminish or dilute it is strategically bad.

The first task therefore is to explain where this new social formation has come from and how it functions, while at the same time backing long reaching solutions that promise to check or reverse its growth, a stance that might be best explained by re-working an oft-quoted comment from John Major on criminality in 1993: ‘we need to understand a little more and condemn a little more‘. In a post-industrial world having the ability to confidently define the core working class constituency is a must. Because it is only out of such a process that the political authority to exclude as well as include can emerge.

In the shorter term a sharpening of tactics in order to immunise the core of the working class from its influence in the here and now are no less important. On the upside, the credit crunch and with it the evisceration of neo-liberal values and principles will force those among the working class who were encouraged to believe that simply taking out a mortgage automatically led to social elevation to think again. And politically regroup. It is of course likely that a crushing recession will increase the numbers living in poverty, but the collective conclusions arrived at will also drive a welcome wedge between the working poor and the detritus of what will in time come to be regarded as little more than a failed social experiment.

Although I see myself as a social liberal, I recognise that other people have other social mores and moral values. However, it seems to me that whether you believe (i) we should all live in a nudist free love commune or (ii) in a society where the Taliban would be seen as dangerously libertine on personal morality, or (iii) somewhere inbetween, I cannot see how social disintegration can be avoided under the current socio-economic system of turbo-capitalism. For example, it is ridiculous, as Peter Wilby argues below, to call for the defence of marriage when the logic of the current economic regime undermines it:

Fewer weddings? Blame the Tories
Peter Wilby, New Statesman,22 May 2008

Why has marriage declined? The usual explanation - on the right, at any rate - is that feminism and "the permissive society" were pioneered in the 1960s and 1970s by trendy lefties ideologically hostile to existing institutions. Using the media, education and government, these wicked folk brainwashed the masses into believing that marriage belonged in the dustbin of history.

Following the dictates of their betters, workers have succumbed to a feckless, hedonistic and short-termist lifestyle. Their children, condemned to emotional and economic poverty, are the victims.

This presumably explains why, on marriage and the family, the Tories are the social engineering party, which wishes to strengthen traditional marriage with tax breaks. Labour is the laissez-faire party, taking a neutral attitude. Talking to researchers from Civitas, which has just produced a report called Second Thoughts on the Family, Harriet Harman, Labour's deputy leader, argues that the growth of marital separation and divorce, far from being a social negative, is just an example of how people have more choice. She can afford to take that relaxed view, the Tories might say, because she and her like have successfully completed their engineering.

But it is the right, not the left, that has weakened marriage. True, middle-class feminists originally promoted the idea that marriage was a patriarchal institution which trapped women in unequal and often abusive relationships. However, as the Civitas report puts it, "marriage has been extricated from gender inequality". Women don't have to stay single in order to pursue careers. Indeed, potential female partners are now valued as highly for their earning power as their ancestors were for their home-making skills. Members of professional aristocracies, in the media, law and politics, for example, intermarry rather as the sons and daughters of the landed aristocracy did, and with motives not dissimilar. As Jane Austen teaches us, marriage is an economic union, not a romantic one.

Among parents in the higher social classes, therefore, marriage is alive and well. Further down the ladder, it has declined steeply. Of married women who had children in 2000, 43 per cent had a degree-level qualification, against 24 per cent of cohabiting women and just 10 per cent of single women. According to a survey of young people carried out for the Civitas report, nearly a third in social class E say they will never get married, against 10 per cent of ABs.

To understand why, we could do worse than look at Marx and Engels.

"The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society . . ." they wrote in the Communist Manifesto. "All fixed, fast-frozen relations, with their trains of ancient and venerable prejudices and opinions, are swept away." Marriage and the family were eventually among those "relations of society". In the UK, working-class marriage declined not in the 1960s and 1970s, but in the heyday of neoliberalism, under a government that supposedly favoured the traditional family.

Young people believe, according to the survey, that the main reason for marriage is "commitment". But Thatcherism drove the concept of commitment out of working-class lives: the commitment of employers to their workers, of workers to their unions, of skilled men and women to their trades, of citizens to local communities. A whole generation has been taught, in the words of the sociologist Richard Sennett, that "there are no long-term career narratives". Nor are there any long-term narratives for communities, as the fate of village pubs, post offices and small shops vividly illustrates. Is it so surprising that people struggle to establish narrative in their personal lives, too, and that, lacking models of commitment, they are reluctant to commit to spouses and children?

It is refreshing that much of this is recognised by Anastasia de Waal, author of the Civitas report. Although she works for a centre-right think tank, which usually specialises in "back to basics" stuff, she rejects the Tory attitude to marriage as firmly as Labour's.

"Successful family policy," she argues, "needs to circumvent both new Labour's avoidance of the significance of parenting structure . . . and the Conservatives' overattachment to structure for structure's sake."

Instead of worrying about the danger of couples separating, says de Waal, we should ensure the parenting structure remains intact.

But neoliberal capitalism, alongside globalisation and technological change, has, I fear, removed all kinds of structure from the lives of large sections of the population, and particularly the economic structure that once underpinned marriage and parenthood. Perhaps it was unavoidable and perhaps, as some would say, it is no bad thing.

However, it cannot be blamed on the left.

I'll leave it there- form your own conclusions!

Saturday, 7 February 2009

How we got into this hole...and how we might get out?

Not much to say, apart from I think these are great articles. I'm not sure, as Peter Wilby says, that we on Airstrip One have all become capitalists; merely that we have been put under great pressure to think we are ones. However, that's a minor quibble.

All of us live by the logic of finance: Margaret Thatcher promised wealth for all in her new society. First, though, we all had to become capitalists. Peter Wilby on our long road to ruin
New Statesman, 5 February 2009

We now know that Alistair Darling was not joking when he said last summer that we faced the worst economic crisis in 60 years. The fall in GDP is now the steepest since 1947. But that was a mere blip on the road to postwar recovery. We cannot be confident that the present crisis is similar, or that comparisons with the most recent recessions – in the 1970s, 1980s and 1990s – are the right ones. Increasingly, politicians and economists recall the 1930s, with its grisly tales of bank closures, currency collapse, deflation and mass unemployment.

Yet none of these precedents provides adequate guidance. In the 1930s, the majority of Britons had not bought (I use the verb deliberately) into capitalism as they have over the past 30 years. Working-class families then accounted for three-quarters of the population, but less than one-fifth owned their home. Few held a bank account and almost none invested in shares or bonds, either directly or through pension schemes. For most of these families their only insurance was against funeral expenses.

Working-class life was based on cash, with surplus income, rare at the best of times, converted into portable possessions. Debt was widespread - it was sometimes the only way a working-class family, even if it had a regular income, could buy new clothes or shoes - but it was small-scale and local. Many were accustomed to existing on the margins of subsistence, and the dole, pitiful as it was, ensured that the Depression just made life more of a struggle. It did not frustrate ambition or aspiration, because most ordinary people had none. The consumer society had not been invented.

The Britain of 2009 is utterly different. The country was changed profoundly by Thatcherism (as the United States was changed by Reaganism), often in ways that were scarcely noticed at the time and are now forgotten.

The roots of the present crisis lie in the 1980s and early 1990s, but the effects of these years are only now becoming evident. At the time, politicians and economists explained that we were entering a post-industrial age. In future, the most successful countries would earn their living from services, not from the production of goods. Given the history and reputation of the City of London, Britain, it was said, was particularly well placed to lead in financial services.

Finance became the country's fastest-growing industry, expanding at 7 per cent a year on average, and dragging in its wake associated functions such as public relations and law.

The implications went far beyond a change in the economic structure. Just as a society based on industry favoured companies that assured themselves a steady supply of raw materials, so did one based on finance favour companies that assured a steady supply of money from the world's credit markets. Just as industry once required strong domestic markets if it were to flourish overseas, so did finance.

Above all, just as the Industrial Revolution transformed lifestyles, family relations, personal expectations and the very rhythm of existence, so did the financial revolution.

For all of us, the logic of finance has become ubiquitous, from the cradle to the grave. New Labour's "baby bonds" encourage parents, on a child's birth, to invest in a trust fund. Students take out loans to finance their higher education, a device that was preferred over a graduate tax precisely because it compels young people to consider their courses as "investments" with "rates of return". A home is no longer just a place to live, love and raise a family but a speculative investment, a source of security for credit, or "equity" that may be "released"; it turns all of us, as Martin Wolf, the Financial Times commentator, has put it, into "highly leveraged speculators in a fixed asset". With the decline of the state old-age pension (now worth less, as a proportion of average earnings, than when it was introduced in 1909) and, outside the public sector, the almost complete disappearance of pensions based on final salaries ("defined benefit" schemes), millions will depend on the vagaries of the bond and share markets for a decent income in old age.

Deregulation, enhanced by the internet, requires consumers to search for better "deals" on power supplies, car insurance, mortgages, savings rates, phone charges and so on. Social scientists have coined the word "financialisation" to describe this new world, as they used "industrialisation" to describe the old. As Essex University's Robin Blackburn has put it, financialisation "encourages households to behave like businesses, businesses to behave like banks, and banks to behave like hedge funds".

The new order followed the collapse in the 1970s of the postwar economic and social consensus, known as Keynesianism. Trade unions were weakened, partly by legislation, partly by the decline of heavy manufacturing industry. Labour could no longer drive a hard bargain.

Capital, assisted by deregulation of money movements across borders, held the whip hand. Under the Anglo-Saxon economic model, employers could now hold down wages - if necessary by relocating or threatening to relocate abroad - shed jobs and require longer hours and/or more productivity from their workforces. Faced with the devaluation of their labour, working people had to try and get a slice of the capitalist action. Money, they had to learn, no longer stopped with the wages generated from employment. As Randy Martin, the New York University public policy specialist, puts it in his illuminating book Financialisation of Daily Life (2002), "what once belonged to the workaday world beds down with leisure and domesticity".

This was exactly what Margaret Thatcher wished for. Once, western governments tried to subjugate the working class. The governments of the postwar era, by contrast, tried to pacify it. High wages, good working conditions, decent housing, stable employment, predictable pensions and, crucially, the power of a large state sector to head off deep recession through fiscal intervention delivered the workers’ consent to, even enthusiasm for, a capitalist economy. It also ensured the stable domestic markets that provided the basis for unprecedented economic growth. As the student rebels of 1968 understood, the workers were required not just to produce goods but to consume them, too.

Thatcher offered what you might call a "third way". The working class was not to be enslaved or tamed, but abolished. Everyone would become, in their private if not in their working life, a member of the bourgeoisie, owning a house, acquiring debt to improve themselves, trading in shares and bonds. With such financial commitments, they would be reluctant to sacrifice regular income by going on strike.

Better still, they would vote Conservative, or at least for an alternative party that accepted, as new Labour did, the broad principles of Thatcherism. The spectre of communism or socialism would be exorcised.

But was it possible to create mass capitalism when large sections of the population lacked capital? Could a new liberalised economy - free from the constraints of either government regulation or union bargaining strength - deliver the stable mass consumer markets of the previous 30 years? To these questions, housing, along with the wide availability of credit, was the central answer.

The sale of council-owned dwellings – the best-known of Thatcher’s housing policies – took more space in the Conservatives’ 1979 election manifesto than health, education or social security. At the time, 85 per cent of British voters favoured the policy and, given that the discounts on sale prices to long-term residents could be as high as 60 per cent, it seemed a rare example of the state offering something for nothing. But it was also a form of gerrymandering, as the effect of the policy was to break up the public housing estates that formed the basis of Labour Party mobilisation.

The sales generated £17.5bn over ten years. But local authorities were not allowed to use the revenues - or the proceeds of other taxes - to build new council housing. Moreover, government subsidies to council house rents were reduced in favour of means-tested benefits available to those who rented private as well as public housing. The result was to make council housing less affordable, with rents rising 40 per cent in real terms between 1979 and 1984, and, as it increasingly became a ghetto for those who lacked either the means or the aspiration to buy, less attractive to live in. In a decade, the proportion of the population who were owner-occupiers jumped from under 55 per cent to more than 65 per cent (it is now 70 per cent).

They were assisted by a second revolution: the easier availability of mortgages. Until the 1980s, nearly all mortgage lending to the public came from building societies. The societies' history went back to the late 18th century and they were specifically designed to allow working people to pool and save their resources in order to build and buy houses. The savers were known as "members" and, nominally at least, owned the societies. Loans, financed purely from savings, were largely restricted to members. If savings were insufficient to meet demand, borrowers had to wait, often for several months. A regular income of sufficient size to support repayments, as well as a deposit from one's own resources, was essential. A building society manager would usually insist on meeting the borrower personally. There was no significant competition: managers of the leading societies met monthly to agree their interest rates.

This system was swept away in the 1980s as the Tories allowed banks to enter the mortgage market. If banks were allowed to behave like building societies, the societies reasoned, they should be allowed to behave like banks. The Building Societies Act 1986 gave them the necessary flexibility, including more freedom to raise funds from the wholesale money markets rather than their own savers and to advance unsecured credit. Crucially, it also allowed them, if a majority of members voted in favour, to demutualise and actually to become banks.

Abbey National - which had broken the societies' interest rate cartel even before the 1986 act - was the first to take advantage of this provision and several more followed over the next decade, as members were tempted by lump-sum "windfalls" that bought them out of their ownership rights. Labour opposed the bill but without great passion or conviction. As Larry Elliott and Dan Atkinson point out in their latest book, The Gods That Failed (2008), deregulation of all kinds was sold with a leftish slant; regulation, once considered a device to protect the public, was now seen as a conspiracy against the public.

In 1986, at least one Labour MP, Austin Mitchell, saw "no great harm in more unsecured credit". A Tory MP proposed that all building societies should be required to demutualise within ten years; in other words, that they should be abolished. Institutions that had survived for 200 years were thus quietly dismantled. An entire model of popular saving was undermined.

Working-class communities had long saved for special needs, such as Christmas or holidays, through local "clubs", often centred on the neighbourhood pub, with a trusted elder, usually a skilled artisan, acting as treasurer. Others, known as "friendly societies" (based, as the name suggests, on personal relationships), provided help in times of ill-health or unemployment. The pre-1986 building societies could trace their lineage directly back to this tradition, which Clive Thornton, then chief general manager of the same Abbey National that so enthusiastically embraced the new era, once called the highest form of socialism. The model, though on a larger, more sophisticated scale and now patronised as much by the middle classes as by the working classes, was essentially unchanged: lending and borrowing was between people who knew and trusted each other (if less intimately than they once did), and the community met its needs from its own resources. It was a world away from the deregulated banking that allowed loans to be split and repackaged as "asset-backed securities" sold to unknown investors on the other side of the planet.

Who benefited from demutualisation? The answer can be summed up in two figures: between 1993 and 2000, chief executives of the demutualised societies got pay rises of 293 per cent against 65 per cent for chief executives of the remaining mutuals. An all-party group of MPs concluded in 2006 that consumers got inferior savings and home loan rates. What the original members gained in windfalls, they lost in higher charges. It is just one example of how financialisation involves a substantial invisible “tax” on nearly all the transactions that ordinary people are encouraged to make: a rake-off by managers in the financial services industry that can amount, according to some estimates, to 25 per cent. Blackburn calls it “insider looting on a grand scale”. No wonder Labour’s scheme for “stakeholder pensions” – intended for people on low or middling incomes who were no longer covered by final-salary schemes – flopped so badly. It set a 1 per cent cap on charges.

A second housing revolution followed legislation on the building societies. In 1988, a housing act introduced the assured shorthold tenancy, which gave tenants - who until then had been notoriously hard to evict - security for just six months, after which landlords need give them only two months' notice, without stating reasons. A second act in 1996, at the fag end of Tory rule, made the assured shorthold the default agreement for any new renting. Henceforth, new assured tenancies became very rare. Lenders and letting agents, recognising the opportunities, introduced a type of mortgage that would allow the small-scale landlord to be treated as an owner-occupier rather than a business.

The stage was set for the buy-to-let revolution, which would eventually involve more than half a million landlords, most owning four properties or fewer, "contributing" (if that is the right word) four times as much to the UK economy as the motor industry. It seemed, for a time, like a win-win for the country: the young, unattached and mobile got a plentiful supply of rentable property while their more settled elders (the median age of buy-to-let landlords is in the early forties) got a new income stream allied to an appreciating asset. All done by the magic of easier credit.

Housing became a national obsession. In an intensely competitive, deregulated mortgage market, lenders fell over each other to offer favourable terms and cared not at all if a high proportion of the money "leaked" to consumer spending. Retired couples were encouraged to remortgage their houses to fund holiday cruises or grandchildren's trust funds. Young couples of all classes stretched their resources to get "on the housing ladder", knowing councils had sold off the best of their housing stock and, for the aspirational family, a council home was no longer an option. Couples in their middle years saw buy-to-let as an additional stream of income, a hedge against redundancy or declining earning power. Second homes became increasingly fashionable. The Tory government abolished rates, which linked local taxes to house values, and substituted first poll tax and then council tax, which was only slightly less regressive. All this created a housing bubble which, in turn, made ownership of houses yet more desirable, even mandatory. Despite occasional crashes, there seemed no end to the upward surge in house values.

Housing thus allowed neoliberalism to deliver what, up to the 1970s, Keynesianism had delivered through high wages, secure employment and guaranteed pensions: buoyant, confident consumer markets and a population that had an interest in preserving the existing political and economic order. The new economic order could not otherwise bring to the masses the stable and rising living standards that it promised.

In the 1980s and early 1990s, it brought deep recession and chronic unemployment, the consequence of the instability of a globalised and deregulated financial system that allowed capital to cross national boundaries at a single computer keystroke. In Britain - and even more so in America - it brought gross inequality of incomes. Average US wages, in real terms, are no higher than they were 30 years ago and in Britain, too, they have stagnated over the past five years.

Credit, normally secured on rising house values but increasingly unsecured, was the rabbit in the neoliberals' hat, as they discovered during the recession of the early 1980s. In 1982, under Sir Geoffrey Howe's chancellorship, controls on hire-purchase, which strictly regulated the amount that could be borrowed, were abolished. Credit cards were then in their infancy, confined to sections of the younger and more affluent middle classes. Now, they are held by some two-thirds of the UK adult population, the highest proportion in Europe.

Colin Crouch, professor of governance and public management at Warwick University, describes the effect of this unprecedented liberalisation of credit as "privatised Keynesianism". J M Keynes argued that, when economies needed stimulating, governments should take on debt. Under the privatised version of his doctrine, individuals do the borrowing.

By the end of 2008, UK personal debt had risen to nearly £1.5trn, more than twice the national (public-sector) debt, and more than 170 per cent of disposable income. When the government incurs debt on a comparable scale - as it has done in its efforts to soften the effects of the recession - Tory politicians and economists ask how it can ever be paid off. No similar questions were asked as private debt ballooned.

The dominant political message of the past 30 years was that the private citizen was on his or her own. Risks previously borne by the state or employers were transferred to individuals, particularly in pension provision. Britain moved towards the stage where, beyond a bare minimum “safety net”, each of us was required to make provision for financial security and social care in our old age, for our children’s post-school education, for our housing, for our capacity to survive spells of unemployment or illness.

As Robin Blackburn puts it in his book Age Shock (2006), citizens "have to learn how to hedge risks and spread income over their life cycle". Each individual needed "to convert himself or herself into a two-legged cost centre and profit centre, with loans and insurance used to shift costs to where they can most advantageously be borne". Collective provision, whether through the state, local authorities, trade unions or mutuals such as the building societies, was discouraged. Like those who travelled on trains or buses, those who relied on such supports were failures.

Anybody who failed to buy shares in privatised utilities, to grab the offer of a windfall from demutualisation, or to take advantage of the tax breaks for owning private pensions or equities was a fool.

New Labour and, in the US, its Democratic equivalents, did little to question this philosophy or to reverse its effects. The idea that individuals should become, as the Blairite guru Anthony Giddens put it, "responsible risk-takers" was fundamental to the Third Way. The US Democrat Philip Bobbitt, nephew of the former president Lyndon B Johnson, explained with approval in his much-praised Shield of Achilles (2002) how the welfare state had been succeeded by the "market state", which abdicated responsibility for the well-being of its citizens and merely provided them with opportunities.

Financialisation is now unravelling, with the state striving desperately to shore it up. With financial institutions facing bankruptcy and credit markets frozen, it can no longer deliver prosperity - or the illusion of it - to the masses. Ruination, which capitalism so regularly visited on the Victorian middle classes and which was portrayed so often in the fiction of the period, threatens to envelop millions. The promises of neoliberalism are revealed for what they were: a sham. An ideology that seduced most of the population is broken. The psychic and political consequences are incalculable.

The only real flaw in Naomi Klein's piece below is that she misses Britain out of her mini-list of 'today's basket cases' that are 'yesterday's "miracles"'...

All Of Them Must Go
Naomi Klein, The Nation, February 5th, 2009

Watching the crowds in Iceland banging pots and pans until their government fell reminded me of a chant popular in anti-capitalist circles back in 2002: "You are Enron. We are Argentina."

Its message was simple enough. You--politicians and CEOs huddled at some trade summit--are like the reckless scamming execs at Enron (of course, we didn't know the half of it). We--the rabble outside--are like the people of Argentina, who, in the midst of an economic crisis eerily similar to our own, took to the street banging pots and pans. They shouted, "¡Que se vayan todos!" ("All of them must go!") and forced out a procession of four presidents in less than three weeks. What made Argentina's 2001-02 uprising unique was that it wasn't directed at a particular political party or even at corruption in the abstract. The target was the dominant economic model--this was the first national revolt against contemporary deregulated capitalism.

It's taken a while, but from Iceland to Latvia, South Korea to Greece, the rest of the world is finally having its ¡Que se vayan todos! moment.

The stoic Icelandic matriarchs beating their pots flat even as their kids ransack the fridge for projectiles (eggs, sure, but yogurt?) echo the tactics made famous in Buenos Aires. So does the collective rage at elites who trashed a once thriving country and thought they could get away with it. As Gudrun Jonsdottir, a 36-year-old Icelandic office worker, put it: "I've just had enough of this whole thing. I don't trust the government, I don't trust the banks, I don't trust the political parties and I don't trust the IMF. We had a good country, and they ruined it."

Another echo: in Reykjavik, the protesters clearly won't be bought off by a mere change of face at the top (even if the new PM is a lesbian). They want aid for people, not just banks; criminal investigations into the debacle; and deep electoral reform.

Similar demands can be heard these days in Latvia, whose economy has contracted more sharply than any country in the EU, and where the government is teetering on the brink. For weeks the capital has been rocked by protests, including a full-blown, cobblestone-hurling riot on January 13. As in Iceland, Latvians are appalled by their leaders' refusal to take any responsibility for the mess. Asked by Bloomberg TV what caused the crisis, Latvia's finance minister shrugged: "Nothing special."

But Latvia's troubles are indeed special: the very policies that allowed the "Baltic Tiger" to grow at a rate of 12 percent in 2006 are also causing it to contract violently by a projected 10 percent this year: money, freed of all barriers, flows out as quickly as it flows in, with plenty being diverted to political pockets. (It is no coincidence that many of today's basket cases are yesterday's "miracles": Ireland, Estonia, Iceland, Latvia.)

Something else Argentina-esque is in the air. In 2001 Argentina's leaders responded to the crisis with a brutal International Monetary Fund-prescribed austerity package: $9 billion in spending cuts, much of it hitting health and education. This proved to be a fatal mistake. Unions staged a general strike, teachers moved their classes to the streets and the protests never stopped.

This same bottom-up refusal to bear the brunt of the crisis unites many of today's protests. In Latvia, much of the popular rage has focused on government austerity measures--mass layoffs, reduced social services and slashed public sector salaries--all to qualify for an IMF emergency loan (no, nothing has changed). In Greece, December's riots followed a police shooting of a 15-year-old. But what's kept them going, with farmers taking the lead from students, is widespread rage at the government's crisis response: banks got a $36 billion bailout while workers got their pensions cut and farmers received next to nothing. Despite the inconvenience caused by tractors blocking roads, 78 percent of Greeks say the farmers' demands are reasonable. Similarly, in France the recent general strike--triggered in part by President Sarkozy's plans to reduce the number of teachers dramatically--inspired the support of 70 percent of the population.

Perhaps the sturdiest thread connecting this global backlash is a rejection of the logic of "extraordinary politics"--the phrase coined by Polish politician Leszek Balcerowicz to describe how, in a crisis, politicians can ignore legislative rules and rush through unpopular "reforms." That trick is getting tired, as South Korea's government recently discovered. In December, the ruling party tried to use the crisis to ram through a highly controversial free trade agreement with the United States. Taking closed-door politics to new extremes, legislators locked themselves in the chamber so they could vote in private, barricading the door with desks, chairs and couches.

Opposition politicians were having none of it: with sledgehammers and an electric saw, they broke in and staged a twelve-day sit-in of Parliament. The vote was delayed, allowing for more debate--a victory for a new kind of "extraordinary politics."

Here in Canada, politics is markedly less YouTube-friendly--but it has still been surprisingly eventful. In October the Conservative Party won national elections on an unambitious platform. Six weeks later, our Tory prime minister found his inner ideologue, presenting a budget bill that stripped public sector workers of the right to strike, canceled public funding for political parties and contained no economic stimulus. Opposition parties responded by forming a historic coalition that was only prevented from taking power by an abrupt suspension of Parliament. The Tories have just come back with a revised budget: the pet right-wing policies have disappeared, and it is packed with economic stimulus.

The pattern is clear: governments that respond to a crisis created by free-market ideology with an acceleration of that same discredited agenda will not survive to tell the tale. As Italy's students have taken to shouting in the streets: "We won't pay for your crisis!"

So how will the crisis be solved here politically? While I was reading an edited version of the above in yesterday's Guardian, on the opposite page Martin Kettle, Tony Blair's Vicar On Earth, was contemplating a 'National Government' in the next year or two (a Far Centre 'Government Of All The Talents'...without much talent). You have been warned!

Tuesday, 3 February 2009

Anyone For Workers Control For British Industry?

The wildcat strikes which are hitting oil refineries, power plants and construction projects over the recruitment and importation of foreign workers at worse rates and conditions than British ones, look set to continue.

When Gordon Brown came out with the phrase 'British Jobs For British Workers' in his speech to the 2007 Labour Party Conference (the one, looking back, when he should have called a General Election) I remember thinking it a stupid phrase for him to use. Quite simply, if you are letting all and sundry from abroad buy up the British economy without much fuss and making a virtue of the British economy's 'openess'to foreign investment, how are you going to guarantee 'British Jobs For British Workers'? Especially when you have a Prime Minister and Government who are all for 'globalisation', the European Union and the 'flexible labour market'? If workers here had some control over and/or say in how the enterprises they work for, it would mean something worthwhile. However, there's no chance of that with GB running (or fronting)the show.

There have been well-expressed fears that GB's phrase, picked up by the strikers, has fascist or racist overtones. 'BJ4BW' is a phrase that the National Front used during their 'Strasserite' turn in the 1980s and has been adopted by the BNP under the leadership of Nick Griffin, the David Cameron of 'British Nationalism' (ie both are public school/Oxbridge-educated types with scurillous/libellous rumours about their private lives attached to them, who have made it their task to 'modernise' and 'sanitise' the erstwhile 'Nasty' political party they head by issuing policies and statements more traditional members see as moves to 'the left'). BNP members have taken a break from cheering on Israel's bombing Gaza to pieces to turn up at demonstrations, picketlines and meetings (sometimes they even arrive on time!) but have been told to go forth and multiply by the strikers. This is good. If NG was to take office, I can imagine the strikers having a truncheon (at the very least) around their heads pdq. Just like Hitler and Mussolini (and Haider and Fini more recently) a BNP Government, or one with BNP participation, would quickly find an accomodation with global corporations and the EU. Those BNPers who actually believe in 'BJ4BW' would soon find themselves victims of a very British 'Night of the Long Knives.'

Fortunately the strikers have moved onto using the phrase 'equal access' (Hat-tip: Charlie Marx). In any case I found myself supporting this strike pretty much from the start, which is quite unlike me. I put my hands up and admit: I'm not a willy-nilly supporter of strikes and industrial action. My Dad was involved in the Winter 1970-1 postal strike and my family suffered badly during that (I think my parents won a Xmas hamper that year from somewhere, which was gratefully received!), so I think there is something deep in my psyche which reacts against those (particularly people who are not directly involved in the industrial dispute) who cheer on industrial action at a drop of a hat. My formative years in the 1980s saw industrial action either badly beaten or achieving mere Pyrrhic victories for the workers. I see unions at pretty good at negotiating decent pay and conditions for their members, but if an employer wants to close a workplace or factory, there is not a lot they can do. The 1984-5 Miners' Strike demonstrated that to me. I think the Upper Clyde Shipyards 'work-in' occupation of 1971-2 is still the best model for combatting closure, especially as it helps explode the fiction that people striking for their jobs are lazy good-for-nothings. There is also an ultra-leftist gene in me, nourished by reading Rosa Luxemburg years ago, which regards trade unions, in the final analysis, as a way of mediating conflicts over control in the economy. Trade unions working to improving pay and conditions are 'a good thing' but they rarely challenge the way society is going and how it is run. Hence, even when unions win, they merely replicate the labours of Sisyphus, condemned to push a stone up the same hill every day.

However, I have to say these wildcat strikes are a good thing well worth supporting as they ask serious questions about where our economy and society are going. Who controls and runs Britain? In whose interests? Are people going to continue putting up with the corporations, the banks and their political and media lackies ordering them about? In 'the good times' (the phrase 'The Golden Age That Never Was' comes to mind!) these questions were merely rhetorical. Now they are very real.

Good stuff on the strikes can be found at:

Independent Working Class Association;

Rebellion Sucks! (who points out the role the EU plays in this: 'Socialist Superstate?' Pull the other one, Guv!);

Nation of Duncan who has just posted that Polish workers have joined the strikes in Devon! I wonder if the BNP will be going off to try and recruit them?!

A Very Public Sociologist;

Splintered Sunrise (the Best Leftie Blogger in the British Isles!);&

Jon Cruddas (the Labour Party's last hope, though I disagree with him on ID Cards).

The Socialist Party, of which both Nation of Duncan and A Very Public Sociologist are members of, have actual members involved in the dispute and seem to have helped push the strike into an anti-capitalist, rather than an anti-foreigner, direction. If the 'good guys' of the British Left ie the SP, IWCA, Jon Cruddas, the SSP etc get wider support for their stance, then all to the good.

Finally, I think the moment Peter Mandelson basically told the strikers to get on their bikes a la Norman Tebbit and go to Europe to find jobs is when the Labour Party kissed goodbye to winning the next General Election. That doesn't mean, of course, Mandy and his fellow Blairites won't get jobs in a Cameron-led de facto 'National Government' after the next election. (After all, Lord M will still have a job post-election, even if most of the current batch of Labour MPs don't).The best comment on Mandelson's bon mot was in Monday's Guardian:

Now that Mandelson has urged British workers to get on their bikes and look for work in Europe, it seems the transformation of New Labour into Old Tory is complete. Sadly, many British workers are not blessed with the flexible mortgage arrangements, government job creation schemes and gold-plated EU bikes so extravagantly showered upon Mandelson over the years. Let them eat cake, perhaps?
Chris Webster
Abergavenny, Gwent

For someone who is supposed to be a political genius and PR-whizz kid, Mandelson's not very good, is he?