A very old friend of this blog is a man called Dennis Howlett. He was, in fact, the person who first persuaded me to try the medium way back in June 2006. He posted a comment today which I thought worth sharing. In it he said:
@richard — after all these years and given the stuff you've had to put up from the far right, I imagine you are enjoying a well deserved sense of vindication.
My problem with these revelations is — where do world government leaders go from here? How is any action going to be trusted (sic) by the ordinary person who will not understand the intricacies involved and yet must at the same time feel betrayed? It is easy to say that the obvious answers are A, B or C but what we are seeing is systemic global corruption. That surely makes the prospect of concerted action almost impossible to imagine as viable without the equivalent of revolutionary change. If you accept that then things could get very ugly.
I also fear that mainstream media is going to be largely challenged to come up with a tone that people will find credible yet their ‘voice' cannot be ignored as a factor playing into populist politics. I see that in the US (I currently live in San Diego) in the egregious attention given to the Trump campaign in the name of ratings and ad dollars.
If that is not a meta-question I am not sure what is, which is why it interested me. It is also why I have little sense of vindication: the challenges remain ahead.
The first thing to say that I have already written three other blogs to prepare the ground in response to the question Dennis raised. The first is on what David Cameron should say to make clear precisely where he stands now, which is ambiguous at present, to say the least. The second is on the costs that tax havens impose on the UK, and the third on actions we could take to tackle them. Each stands in its own right, bit each contributes here too, although I will not repeat them.
My point is that what most people will feel in the face of these revelations is a natural sense of powerlessness. This will be based on frustration with politicians who duck the question, a lack of comprehension on what this abuse means and why it happens and lastly a feeling that nothing can be done. This is precisely why clear messages, that a politician can know their mind and provide leadership, that they can explain the issue and that they can formulate a response (which is what I have sought to do) are essential. The feeling of helplessness has to be addressed, and it is only clarity of words, message and proposed action that can deliver that.
As important though is the understanding, which I stress, that the necessary actions can begin locally, especially in the unique case of the UK, but certainly not in isolation here. Across the globe getting the domestic act in order in a way that holds business, wealth and an elite to account for the use they make of the privileges they are given by society is essential. The relationship between the grant of privilege by a democracy and accountability for its use has to be re-established, however much some will resent it. This is the starting point for changing sentiment. Unless that can be done the sense that sweeping everything, democracy included, away in a revolutionary act is worthwhile may become real. To say I would profoundly regret that is the most massive understatement.
Last, leaders cannot achieve these goals by playing a blame game - which is always the resort of the charlatan, of whom we have too many. Rather they have to manage it by accepting responsibility. Admittedly this is a characteristic in desperately short supply of late, especially when it has all too often been equated with self-interest, which can frequently be its antithesis. As I argued in my book, The Courageous State, what we have in fact become used to are what I called cowardly politicians. They are the sort who, when they see a problem, seek to distance themselves from it as much as possible and then suggest the market is bound to find a better solution than they or the state could possibly achieve.
There is no way that this can now deliver the political solution we need. The problem is that on this occasion it is very definitely the market - for offshore secrecy - that is the problem. We cannot, therefore, in anyway expect the markets to solve the problem. That's not least because the challenge that the market for secrecy creates is to the credibility of markets as a whole. The simple fact is that secrecy undermines every single component of market theory and practice and the suggestion that they can provide a powerful contribution to human well-being. With secrecy there is an unlevel playing field, which makes fair competition impossible. With secrecy free riding will always happen. With secrecy abuse is inevitable. With secrecy trust will always be eroded. With secrecy cheating will be the norm. With secrecy no market will have the information it needs to allocate resources efficiently to ensure that well-being is maximised. In fact, secrecy is a bigger threat to markets than communism ever was because it has the power to destroy markets from within. To describe secrecy as the cancer of the free market is to understate its significance.
This does, though, demand a new and special type of politician. It requires a politician who simultaneously believes that markets are sufficiently important to stake their reputation upon, whilst believing that the power of the state can be used to uphold markets from the threat that is inherent within them. Such politicians have become virtually non-existent in the neoliberal era, where faith in the market alone has been the mantra required of anybody seeking power. Fundamentally this is the conundrum we face: people are completely un-used to a politician who can ride two horses at once, seeking to preserve and uphold the market whilst lauding the power of the state to achieve this objective, and demanding the tax and the resources that are needed to protect honest business from those who would, quite deliberately, undermine it.
This is not the revolutionary change of the type that Dennis fears, but at the same time it is little different in its demand: it requires a fundamental sea-change in opinion, and a willingness on the part of electors in a democracy to realise that it is in their best interest to now pursue politics that are entirely different from those that prevailed for the last 35 years.
The choice is of a peaceful transformation to an economy where the appropriate power of the state is used to regulate the potentially destructive forces of some elements of the market, or of a much more dangerous alternative . I candidly see little between these options, and know, very definitely, which one I prefer. I hope that by the power of argument, and through the conviction of people of goodwill, that the compromise that represents the mixed economy within a democratic state can prevail again. The alternatives are far too ugly to consider, but what the Panama Papers make it clear is that we have to decide what we want. There is no room for fence-sitting anymore.
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Richard, you say here:
“With secrecy there is an unlevel playing field, which makes fair competition impossible. With secrecy free riding will always happen. With secrecy abuse is inevitable. With secrecy trust will always be eroded. With secrecy cheating will be the norm. With secrecy no market will have the information it needs to allocate resources efficiently to ensure that well-being is maximised. In fact, secrecy is a bigger threat to markets than communism ever was because it has the power to destroy markets from within. To describe secrecy as the cancer of the free market is to understate its significance.”
For me, the glaring irony is that the operation of a Communist State, such as was the Soviet Union, was almost identical with that of the “secret” neo-liberal state.
In both there are/were unlevel playing fields between the “nomenklatura” in both, with secrecy as to what was really happening behind the Kremlin facade in the Soviet Union, and the democratic facade in what were the liberal democracies, before they were captured by the neo-liberals.
Trust is/was eroded in both systems, cheating is/was endemic in both, double standards operate/operated in both, and in both hostility to the fair market is/was the essential modus operandi = bend the market to serve the few and the ideology they support.
That being so, I would welcome a revolution in the UK, but a Czechoslovak style “velvet revolution” demonstrating to our corrupt Westminster bubble, by force of peaceful dissent, that their time is up, and that Cameron should go to the Palace, offer his resignation, and advise the Queen to summon a trusted MO to from a Constituent Assembly style Government, to shape REAL reforms to offer to the people.
Were he still alive, I would have suggested Michael Meacher for the rokr. As he isn’t, I would propose Caroline Lucas.
Hear hear
It’s great to see an endorsement for democratic processes.
Spot on and superbly put, as usual, Andrew.
Yes I agree very well put.
Terrific proposal, Andrew (best positive comment I could think of when others have taken the “usual” ones!).
Bravo. This is precisely what is needed. Political traction will simply have to be secured for this approach. But it will savaged by those on the right and centre-right who want to keep rigging, subverting and distorting markets (and suborning governing politicians) to capture economic rents and by those on left who either do not understand functioning competitive markets or loathe them instinctively or both.
Could we actually be on the threshold of shaking off ‘the likes of us’ (eg. Tressall) submission that infuriated the table-thumpers of long ago who could not get the down-trodden to help themselves – or are we merely wishing it?
There is a sense of possibility, and of turning tide, combined of course with a sobering sense of difficulty, but nonetheless there is currently a ‘one thing after another’ continuation of exposing the system, and alongside that there is a growing understanding and mood for change.
I wonder whether LOBO loan contracts is next to get the lid taken off, been simmering. And in such a way that goes further than mere bad financial sense, in showing it as a contrivance to siphon off more public money, and with longer term aim to leave councils short and thus easy prey for state-reduction ideology.
Is it true that a £50 m loan can turn into a £300 m repayment over 35 years using a LOBO? If so, how do local councils justify this use of what seems to be PFI by another name? Also, are these amounts borrowed ‘off the books’?
This is the next scandal in the making
Richard, it’s interesting to read something of the history of how this blog came about – and all power to Dennis for suggesting you become such a voice in what has become such an (apparently) influential medium.
However, regarding your bigger – and fundamental – question, did you read the “long read” by Yanis Varoufakis in The Guardian earlier in the week? I ask because anyone who has would have witnessed the reality of the situation we are now in regarding what we once (and still mistakenly) believe to be systems of democratic politics.
In short, the whole construct is quite simply that – a construct: a charade that has been slowly and meticulously put together to create the fiction that we – the people – have some form of influence over those – the 1% – who oppress and control us.
The Panama Papers represent a window into their world. One that sacrifices everything at the altar of self interest, greed and mendacity. One in which psychopaths – men and women devoid of any empathy and moral compass – are free to impose their opinions and beliefs – and thus policies – on anyone they deem to be weaker or of less “value” than themselves and their ilk. And one in which this attitude is lauded as THE natural human condition.
In fact, this is the real face of contemporary feudalism – neo-feudalism as it has often been referred to on your blog – and we should call it as we see it: cruelty and exploitation writ large and with the backing of the state. And as the Panama Papers make clear – but as any reader of your blog will be only to familiar with – a system in which the English government has been and remains a leading player through their support of a network of tax havens and secrecy jurisdictions that has as it epicentre the City of London.
Ivan
Unsurprisingly I agree
But I missed the piece – about 20 broadcasts and 50 media interviews plus some teaching, a sons birthday and a bit of blogging meant a shortage of time
And today I am whacked
But have to discuss three book offers with my agent
I don’t think I should complain!
Richard
Is there any wonder you’re whacked. I was similarly so after a tedious journey up and down the M1 to Milton Keynes (but it is school holiday time so the best time to tackle any motorway); several meetings; and trying to deal with a range of issues my MSc students have as they approach the submission date for their theses; not to mention trying to get an outline together of yet another unit i have to write a module due out in November.
But anyway, there’s no surprise in why you’re in such demand given the emergence of the Panama Papers.
On the Varoufakis article – which is superb throughout – what I was really alluding to was his recounting of his meetings with EC finance ministers, and Schauble in particular (who incidentally failed to even shake his hand). There’s much more besides, but to my knowledge this is the first time he has written in detail about the reaction to the Greek government’s proposals for getting out of the mess they’re in and the reaction of other EC countries to this – which was, quite frankly, appalling to the extent that it could be considered utterly childish.
Furthermore, the imposition of unbending neoliberal “rules”, which as Varoufakis points out, aren’t actually written down anywhere, is tantamount to sacrifice of an entire country. An act that it is clear almost everyone concerned are perfectly happy to go along with so long as the gods of neoliberalism are kept happy and satisfied. Anyway, here’s an excerpt to finish:
‘After I had recited our government’s plea for a substantial renegotiation of the so-called “Greek economic programme”, which had the troika’s fingerprints all over it, Dr Schäuble astounded me with a reply that should send shivers up the spine of every democrat: “Elections cannot be allowed to change an economic programme of a member state!” he said categorically.’
http://www.theguardian.com/world/2016/apr/05/yanis-varoufakis-why-we-must-save-the-eu
Ivan
I took half an hour out to read it – and have coffee
It’s well worth the time
Thanks for sending me in its direction
And thankfully I have no new module to write for next year
But I have a pile of essays coming my way
Richard
Ivan you reminded me to take another look at Yanis’s website which has some good new content, including his participation in Channel 4’s discussion with Jesse Norman, Diane Abbot and Alexander Nekrassov about tax havens plus a separate discussion about the EU and Brexit – which I had missed earlier this week but is well worth watching.
http://yanisvaroufakis.eu/
I too am trying to catch up
I saw the discussion of the EU and Brexit, Keith, but had missed the other one you refer to. I’ll watch it later when I have my elevenses. Thanks.
I understand the fear that Dennis Howlett expresses, but I don’t think the horns of the dilemma are quite as sharp as that. To fear that those who currently control the power and the money actually *are* the masters of the universe and must prevail is to partly succumb to their world view.
It is true that ordinary people ‘will not understand the intricacies involved’, but they are still capable of trusting or distrusting on the basis of a person’s demeanour, and as long as Richard and his co-activists can persuade politicians who come across as honest and transparent of their case, ordinary people will have somewhere they feel they can put their trust and the democratic process will continue to function. These are the people who elected Corbyn (and Caroline Lucas, come to that), who then persuaded John McDonnell to perform a massive U-turn in the full public glare (for which I think many people respect him), whose representation in turn of Richard and co’s arguments is now very gradually winning wider respect for them. On the Today programme over the past few days, the presenters have been sounding far less sceptical about the ‘Tax Justice’ viewpoint than they did even a couple of months ago. And who would have thought that someone labelling himself a socialist could be running as a serious candidate in the US presidential elections — even if he is not expected by anyone to win? To have got this far, he must have a sizable public of some description. Crumbs, we all thought the Obama phenomenon was startling when *he* first arrived on the scene, but this is ridiculous.
I haven’t read the Varoufakis article either yet, but again I can understand why he would feel like that about what happened in Greece. He’s right, too. But in terms of the world as a whole, what the EU and international money did to Greek politics has contributed to the public’s education in the power of international money. Without that background and all the groundwork laid by the Tax Justice campaign, the Panama Papers would have been no more than a none-day wonder — if indeed anyone had thought it worth the danger of leaking them in the first place.
Where the argument falls down, though, is in assuming that by changing the system you will also eliminate the ability of psychopaths (who are a constant in human society) to operate within it. Far from it — they will be quicker than anyone else to react to the new set-up, while the upset will greatly hamper the ability of the non-psychopaths to work out how to counteract them.
I think we forget just how dire conditions were in the past that the reformers of the day were trying to overcome — and in the end succeeded. Compared to those trying to curb the power of the Stuart kings, or bring in Reform in the early 19th century, or improve the conditions of labour around the turn of the last century (and, oh dear, those poor Tolpuddle Martyrs — the equivalent of Greece now?), our position now is certainly not more daunting or depressing. Brain Cartor mentions the frustration of the Tressell-era tub thumpers — but as (I think) he implies, Tressell’s terrific depiction of that frustration was published at exactly the time when the tub thumping was really beginning to bear fruit and the results were gaining momentum. I don’t believe there were any fewer psychopaths running things then, but the democracy which our forebears fought such desperate struggles for for so long was still good enough to get enough of the job done.
Violent revolutions happen when there is nowhere for the pressure from below to go. People like Richard are providing channels which not only stop it from blowing up, but allow it to be directed to constructive use. I think the system is still good enough to get enough of the job done. So don’t despair, everybody pat themselves on the back, draw a deep breath, and keep up the good work.
(This got much longer than I intended. Hope that’s OK, Richard.)
That’s fine
And thank you
I had a conversation with a wise man yesterday. He said that things could move very suddenly now (like the government could collapse – you suggest it should resign), but no one is in position to take over effectively yet. He reckons they could be 10 years away. I suspect he’s reckoning that it will take that time for him to finish his magnum opus and get it into the political system. I would have added a smiley but it isn’t funny at all.
Richard you are doing absolutely sterling work here and elsewhere.
Please do not exhaust yourself though – you are needed by society for the long term.
I am, for me, taking a quietish day today
I’m glad I’m now Emeritus – not sure I could cope with your workload any longer.
On a lighter note I’m not generally a fan of party political broadcasts but If you have not seen the “Not so secret life of 5 year old politicians” by the Greens I would highly recommend it https://www.facebook.com/sianberrygreen/videos/10154067973962370/ sadly rings far too true.
My work load is my own fault!
And yes, that is a good video
This article about the way the art world (or rather the investing in art world) has also been manipulated by the offshore world makes interesting reading.
It strikes me that as long as we have a world that sees everything of beauty, rarity, necessity and desire as objects for “investment” – we will always fail to see the real value of these things to people and the planet.
The increasing trend for the financialisation of everything, is not in my view a positive or sustainable direction of travel, nor any way for most people to live a fulfilling and sane life. And yet that is the logic that underpins capitalism, which is probably why it has become so abhorrent to me!
http://www.theguardian.com/news/2016/apr/07/panama-papers-joe-lewis-offshore-art-world-picasso-christies
Another interesting article in Bill Mitchell’s analysis of the economic and political policy in Britain during the 1970’s (focusing on the irreconcilable conflict between labour (and its unions) and capital (and its bankers).
Also an interesting quote below that just shows when push comes to shove, the state (led by either the blues or the reds/light blues) will always support the City of London irrespective of the harm it will do to the domestic economy and the vast majority of people in this country (workers and business owners alike).
As Rowthorn observed (1980: 143):
… during the 1950s and 1960s … British governments gave a rather low priority to domestic economic development, and devoted both resources and energies to the creation of the world role for British capitalism. This involved rebuilding the City of London as a world financial Centre, facilitating overseas investment by big industrial firms and supporting a huge military establishment. It absorbed resources which could have been used productively at home, and was accompanied by a laissez-faire fairy economic policy of non-intervention in the private sector. As a result, British industry failed to keep up with its rivals and economic development was relatively slow. Clearly, such a process of relative decline must eventually lead to severe problems and, indeed in the late 1960s Britain entered a prolonged period of crisis.
http://bilbo.economicoutlook.net/blog/?p=33307
I’m a new subscriber to your excellent blog.
I just wanted to share a slightly off-topic but interconnected issue,
that of money creation itself.
I hope this is okay to post here.
http://positivemoney.org/
This issue has been dealt with here many times and in my book The Joy of Tax
Positive Money have not quite got i right, I am afraid. Close, but not right
I asked them to take a look at what you do.
They are at least trying to raise awareness and are very above board.
Perhaps they can learn from your work.