On Ukraine

There’s a phrase from the second Iraq war era that has stuck with me; ‘big hand, small map’. It’s a pithy summary of the way that large, complex problems can look simple from a distance or when reduced to a handy chart or slideshow.

Iraq, and Afghanistan, seem to have taught the current administration in Washington lessons; notably that there are limits to what it can do with hard power; that other nations don’t like external parties determining their future; that not everyone wants to be, or live like, an American. 

This is not a bad thing, yet just as generals are often accused of a tendency to prepare to fight the last war, the same can also be true of politicians.

That may partly account for the West’s incrementalism in Ukraine. Whereas the watchwords in Iraq were ‘shock and awe’ in Ukraine they seem to be ‘let’s boil a frog’.

The caution is, to some extent, that the West feels it’s in a game, variously, of chicken with someone who doesn’t blink or of poker with someone whose face has been immobilised by a vat of botox. Putin, it’s said, is a man who plays a weak hand very well. 

I take issue with that. Putin seems rather to be a man who plays a weak hand quite badly but gets away with it because the other players suspect he has a pistol under the table that he’s prepared to use if he loses. Fear of what Putin might do if he finds his back against the wall leads many to prefer a negotiated solution rather than decisive action.

For all the lessons of history that have been learned there are other lessons that seem to have been forgotten.

One of those is that empires tend to expand until they’re defeated. One of the forces that powers empires is myth. The Americans had ‘manifest destiny’. The British had the ‘white man’s burden’ and a sun that never set. The Romans ‘invincibility’. Defeat rewrites the narrative.  

Putin’s own narrative seems to draw deep on Russian history and adds frills of his own. Russia is the perennial victim (it’s a recurring theme across Eastern Europe). It’s the last beacon of true Christianity (in a way that’s remarkably free of any actual Christianity). It’s the only bastion of Western civilisation against the degenerate forces of immigration, atheism, homosexuality and anything else Putin either despises or can use for his own political ends – and this despite the fact that he also likes to distinguish Russia from the West. There are certainly contradictions at play.

If many Russians subscribe to Putin’s world view that’s at least in part because they’re not presented with alternatives. We tend to forget how people can believe almost anything they want to. It’s not about facts. It’s not about being rational. It’s about belonging.

At a fundamental level we’re wired to survive in groups. Belief is often the price of membership of the group. Think Q Anon or Trumpism, think Scientology, cargo cults or extreme evangelical Christianity – we’ll adjust our thinking to that of our tribe because the alternative is exclusion and, in evolutionary terms, that equates to death.

Though many Germans resisted the Nazi world view, plenty who didn’t much like it went along with it because they just wanted to survive. It became a national psychosis. Only utter defeat shattered the illusion, though a significant minority never recanted, even in defeat. 

Expect no different from modern Russia. A few have packed up and left. Most stay because they can’t or see no reason to go. Unless there’s a complete internal collapse following humiliating defeat, Putin, or those ready to pick up his torch, will keep the narrative going.

And this narrative includes antiquated ideas of spheres of influence, of the Русский ми (Russkiy Mir / Russian world / Pax Russica), greater Russia and so forth that impinges fundamentally on Russia’s neighbours, marking them as subservient to the interests of the reborn empire.

Which begs the question; when people talk of a negotiated settlement, what exactly are they suggesting is open to negotiation? If that includes Ukrainian territory not only are they asking the international community to legitimise the seizure of sovereign territory by force, with the terrible precedent that sets in an age of autocrats, but it also produces an outcome that feeds and emboldens the whole idea of greater Russia and those who would replicate it for their own parts of the world. Fascists seem only to respect strength. Perceived weakness only confirms their view that democracies are incapable and undeserving of wielding power.

The current situation is a predictable result of autocracy. The genius of democracy is, in one respect, that it ensures the peaceful transition of power. When there’s no mechanism for that transitions tend to be bloody. In Asia this is sometimes known as riding the tiger. You’re fine so long as you are on the tiger’s back. Your problems begin when you dismount. Suddenly you find yourself gazing at the very same sharp teeth that previously intimidated your enemies. There’s very little room for ex-autocrats.

Which means that, as an autocrat, you’re stuck there. And with time the responsibilities for all one’s bad decision starts to accumulate. Once the tiger has devoured a few scapegoats people start to realise that the common factor isn’t the goats, it’s the rider on the tiger’s back. The rider always needs to find fresh meat.

We’ve seen this time and again through history. Putin faces the same dilemma. How does he retire, even if he wants to? And do the factions he manages – the military, the securocrats, the oligarchs – want him to fall if that opens up the possibility of one of their rivals becoming ascendant?

In short, there is no obvious exit ramp for Putin or Russia. Nor is there any reason to believe that any negotiated solution would be final or in any way respected. Putin neither respects the West nor believes it honours its word. Why should he feel bound to honour his?  

No one of my political stripe likes war. It’s obscene and abhorrent. Yet here we are. Appeasement has, once again, only delayed conflict. Further appeasement will only do the same.

Do we then continue to boil the frog? That depends greatly on whether Russia has been able to learn from its mistakes or whether the flaws in its military strategy are baked into a corrupt, top-down system. 

If the latter then the West may, at the price of countless-thousand Ukrainian and Russian lives, continue to denude Russia’s military capability for a fairly modest proportion of its own treasure – one source put the large contribution from the US at around 5% of its annual defence budget and declared it cheap at the price, which, if it reduces the possibility of the US having to fight wars on two fronts (i.e. with China as well) it absolutely will have been.

If the former then the West will probably rue not having gone the shock and awe route. Yes, there’s the risk it might lead Russia to use battlefield nuclear weapons. But the unpredictability of what follows that must give Putin pause as much as his Western adversaries. If he goes nuclear the consequences would almost certainly be catastrophic for Russia. The only question is whether they would also be for the entire world.

There are no easy answers in the current situation but equally nothing that suggests that negotiation will give Western democracies anything they want. Next time, however, it might serve us well to ensure that collapsed societies regenerate and thrive as successful members of a democratic, rule-based, international community. It’s cheaper, in the long run, than looting them.

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Even Neo Nazis Should Get Due Process

The test of democracy and of the rule of law, both here and in Greece, is not how it treats the best of us but how it treats the worst.

For that reason the Abu Hamzah case did not leave me aghast, but rather reassured.

If an objectionable, foreign thorn in the side of the British establishment could get due process to the point where the UK government was forced to push for a change in the law in Jordan to make inadmissible evidence gained through torture, then decent citizens here have good reason to expect justice.

That doesn’t mean we should be complacent. There are real threats to justice in Britain, such as cuts to legal aid. However the battle is clearly not yet lost.

Meanwhile in Greece the authorities have moved to arrest members of the Neo-Nazi party Golden Dawn, including its leader Nikolaos Michaloliakos and four other Golden Dawn MPs. They’ve been charged with belonging to a criminal organisation and it’s claimed that guns and ammunition were found in Michaloliakos’ home.

Recent posts by reservists belonging to elite Greek military units calling for a coup, the killing of a prominent leftist musician, sustained attacks on immigrants and left wing protesters, had all brought things to a point where the state seems to have felt it had little alternative other than to act.

I feel obliged to say two things.  Firstly that I believe in muscular democracy; in other words I do not believe that a democracy, in the name of democracy, should hand the means of its own destruction to non-democratic forces. When Turkey’s Prime Minister Recep Tayyip Erdoğan declared at one point that he saw democracy as a bus, ‘you use it to get to your destination and then get off’, he associated himself with autocrats everywhere, from Hitler onwards, who have exploited democracy. The minimum qualification for being allowed to seek power through the democratic process must be a commitment to surrender power democratically when citizens demand it. For that reason it’s hard to justify allowing Golden Dawn or any other anti-democratic group an electoral platform.

The other thing I would say is this; however odious Golden Dawn the party and its members may be they must get due process and a fair trial. It’s not so much a concern about creating martyrs. Most knuckle dragging far right thugs would fetishise a rotting dog’s carcass if it served their warped cause. Nope, it’s because the damage done to Greek democracy by further degrading its already damaged institutions would be almost as bad as letting Golden Dawn damage them.

There’s a passage in A Man For All Seasons, where Sir Thomas More is debating with his son-in-law William Roper, that puts it better than I could.

Roper: So now you’d give the Devil benefit of law!
More: Yes. What would you do? Cut a great road through the law to get after the Devil?
Roper: I’d cut down every law in England to do that!
More: Oh? And when the last law was down, and the Devil turned round on you — where would you hide, Roper, the laws all being flat? This country’s planted thick with laws from coast to coast — man’s laws, not God’s — and if you cut them down — and you’re just the man to do it — d’you really think you could stand upright in the winds that would blow then? Yes, I’d give the Devil benefit of law, for my own safety’s sake.

Bang ‘em up, throw away the key and all that, but do it proper and do it so a better, more confident, more self-respecting, more honest, more democratic Greece can come out of this.

(Thanks to Mr. James Mackenzie for directing me to the passage above)

Syria Should Be Tearing Us All Apart

If you’re not torn over Syria then I’d suggest you haven’t thought things through sufficiently.

If you’re for military action and you haven’t asked yourself whether we might not end up with something worse, with more dead, and with Western countries mired in yet another intractable conflict, then you really haven’t been paying attention.

If you’re against military action but you don’t at least worry that somehow we should do something to help the millions of Syrian civilians caught up in this bloody mess, or you don’t fear that we’ll see more chemical attacks, bombardments of residential areas, massacres of entire families, even communities, that we’re in danger of becoming bystanders to crimes against humanity, then ‘principle’ has clearly trumped empathy for those whose lives are being torn apart.

But then this is not a simple situation. For those who like their morality black and white this is frustratingly grey.  Syria is not just a civil war. It is a proxy conflict for every tension being worked out across the Middle East.  To the Saudis Assad, an Alawite who enjoys the support of Shia and Christian minorities, is both a threat to Sunni orthodoxy and a last vestige of secular Ba’athism, statist Arab nationalism. To radical Sunnis, Salafists and Al Qaeda affiliates it’s the latest draw for an international community of adherents who exist to fight, whose reason for being is to wage religious war and to create a new Caliphate, a fantasy state for those wanting to return to a ‘purer’ age that never existed.

For Syria’s Alawites and Christians it may seem like a last stand for people who want to remain Arabs in an Arab world yet free to practice their own beliefs.

For the Iranians and Hezbollah it’s a new front in their battle against the Gulf States.

Yet into this cauldron of conflict we’re being asked to believe we can make a simple intervention that will somehow do good, or at least mitigate bad.

Yet because this is not a simple situation it’s almost impossible to know what consequences even a simple intervention would have.

There is talk of airstrikes or cruise missile attacks.  What would those achieve? Even if they did send a signal to Assad that chemical weapons attacks won’t be tolerated, the thousand or more who died from an as yet unidentified agent, presumed to be a neurotoxin, were one thousand among a hundred thousand others who’d already died from shell, bullet, blade, disease and malnutrition.  We might stop another chemical attack but even without chemical weapons we could see another hundred thousand die by other means before this conflict is through.

And think of the risks. Just imagine Western fighter pilots shot down by Saudi or Iranian supplied surface to air missiles and held hostage. The Americans readily admit they have only a passing idea of what is going on, on the ground, now. Imagine video of Western military hostages being posted on the internet daily with no possibility of locating and extracting them.

Or if, despite protestations to the contrary, Western troops are sent in then a proxy conflict between the different ideological strands across the Middle East also becomes a proxy conflict between Islam and the West drawing in every would-be mujahedeen who wants to die in a holy war or return home with a video of him slitting an American throat.

None of these is one iota of help to a people who have already suffered two tears of horrendous conflict.

Caroline Lucas says we should focus on helping refugees and providing humanitarian aid. Yes, we should. And rather than ratcheting up the pressure with military action we should use this dark opportunity to bring together a wider coalition of interests to use such pressure that can be brought to bear on the players in this conflict to de-weaponise Syria. That means persuading the Russians, who will argue that any nation or government has a right to weapons with which to defend itself, to stop sending arms to the Assad regime. It means persuading Iran and Hezbollah to back off. It means leaning on the Saudis. It means policing borders that are more or less unpolicable. It means giving Assad, a man who should rightly lose everything, something to lose because right now he has absolutely nothing to lose. He can fight or he can die like Saddam at the end of a rope or like Gaddafi in a storm drain. Assad cannot ultimately stay, but right now neither can he leave. If and or all of this seems highly improbable that’s because it is highly improbable. However every state in the region, and those looking on, know that it’s a better option that the alternatives; a failed state, a sectarian conflict spilling out into Lebanon, Jordan, Iraq, the Caucasus, possible the wider Arab world.  It took 150 years for Europe’s religious wars to play themselves out and we’re still living with the scars

The chances of Syria having a peaceful democratic future are very slim right now. If we’ve learned anything from the Arab spring it’s that democratic minded groups rarely cooperate well with one another, nor do they fare well against radical Islamist groups prepared to use extreme violence to further their cause.  A Salafist takeover post Assad remains a real possibility and in a country as diverse as Syria that could of itself prompt a further humanitarian crisis.

Syrians rose up against Assad because, like others across the Middle East, they want freedom. Right now I suspect millions of them would settle for peace.

There are no right answers and no good outcomes – only imperfect answers and less bad outcomes. But there are some very wrong answers and any course of action dictated by Western politicians feeling that they must be seen to be doing something would be very wrong. A politician’s ego is not worth the loss of a single life. Not one.

 

 

Wikileaks Farage eMail Shock

From: N.Farage [mailto:N.Farage@labellefrance.fr]
Sent: 07 January 2013 12:50
To: Charles Louis Farage de Mille Feuille
Subject: Notre Victoire!

 

Mon Cher Papa,

There is nothing more depressing than an English winter.  It is dank, it is foggy, il est gris!  Nothing on earth is more calculated to make a Frenchman pine for la patrie than Farnborough in January.  These English in their deathly suburbs with their club ties and their blazers with little brass buttons, their gin and tonics and their four by fours; this is the only country in the world that prides itself on a complete absence of culture – and to think I have to pretend to be one of them.  Sacre bleu!

I have said it before and I will say it again. Nothing grieves me more than being unable to use the name you gave me at my christening.  But I cannot deny that the identity you created for my mission bears the mark of genius.  Who could possibly suspect a man called Nigel?

What name is there that better captures British médiocrité, their insularité, their contemptible lack of style, than this ‘Nigel’.  At least I am able to keep my nom patronymique. These stupid English, they are too dim and slow witted to suspect a thing.  But how I long to stand up, to claim back my true identité and declare; “C’est moi, Napoleon Farage!”

If there is a solitary ray of soleil it is that our plans for the destruction of Grand Bretagne move forward apace.  Oh how delicieux the revenge that has been 200 years in the making.  Not since le petit Corporal paraded the Grand Armée at Boulogne have our prospects been so bright.

Mais écoutez moi!  They must suspect nothing.  When the British talk of leaving Europe we must reassure them like this; ‘do not worry.  There will be no problem.  Of course we will trade with you.  We will have special arrangements.  It will be like before only better.’

I feel almost sorry for them.  They have such a childlike, such a naïve view of Europe, it is pitiful.  They think that having lorded it over us all this time, having made life for us in Brussels a living hell, having foisted their stupid language on us, that they can have all the good things that come with belonging to Europe without having to share the pain.  They have no idea how we have suffered having to be nice to both them and the Germans, at the same time.

Non.  We send them on their way with sweet words like the last guest at the dinner party and then nous fermons la porte avec un boom.  And when they knock to be allowed to come back in we pretend we’ve gone to bed.

They have no empire left.  They have offended almost every nation in their Commonwealth.  The Americans can’t stand them, these Englishmen who go on all the time about things that no one who wasn’t at their stupid schools can understand.  What is this Wall Game merde?  Cameron; zut!  Ile est une pomme de terre avec le visage d’un cochon d’inde.  Forty per cent of their trade is with the EU.  Only four per cent of the rest of the EU’s trade is with Britain.  They are beyond mere imbeciles.   They are… finished!

But enough of this papa.  I have once more to wear that ridiculous blazer, pretend to be a proper Englishman and to secure our revenge.

A Bientot

Napoleon

Vegan Tigers and Moral Corporations

What is it with politicians?  All too often it’s all about them looking good and not at all about getting something done.

Take Margaret Hodge.  With bosses from Amazon, Starbucks and Google lined up before the Public Accounts Committee she lectures them on their failure to pay more tax and when they point out that they’re within the law she comes back with “We aren’t accusing you of being illegal; we are accusing you of being immoral.”

Excuse me?  Corporations aren’t immoral, they’re amoral.  That’s the way they’re constituted.  Their legal duty is to make profits to pay for dividends to shareholders.  If it doesn’t add to their revenue they’re not allowed to do good.

“I am very proud of the structure that we set up,” says Google boss Eric Schmidt. “We did it based on the incentives that the governments offered us to operate.”  He’s been given a set of rules to play by and he’s gamed them.  If it’s not very sporting it’s because it’s not sport, it’s business.

And while that little lecture raised Mrs Hodge’s profile it didn’t do anything much to address the underlying problem.

I’d have some sympathy for the politicians who would rather fire off a soundbite than actually take concrete action if they hadn’t had plenty of warning that this sort of rampant capitalism was coming down the track.

“I hope we shall…crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to trial and bid defiance to the laws of our country,” wrote one former president of the United States.

‘Which president?’ you ask. ‘Clinton?  Carter? Kennedy maybe?’

A little further back.

‘How about one of the Roosevelts, FDR or even Teddy back in the day?  Don’t tell me was it Abe Lincoln?’

Nope.  It was Thomas Jefferson in a letter dated 1816.   Thomas Jefferson was no socialist.  He was quote convinced of the ability of private business to provide the goods that the people and the government needed better and cheaper than could the state. But he was equally convinced that business, unfettered, would try to run the show for its own benefit and not for the good of the nation.

So having had two centuries to wake up to the realities politicians like Mrs Hodge still appeal to corporations’ sense of morality.  That’s like asking a tiger to consider veganism.

Corporations are the way they are because requiring them to maximise profit was deemed to be the best way of ensuring they didn’t cheat their shareholders.  But while they don’t make moral choices, they do make cost benefit analyses.

If a new product stands to make a listed company £1Bn profit, but there’s a risk of it causing death or injury, the analysis will weigh potential profits against fines, compensation and the cost of reputational damage.  Governments can set fines, courts can determine compensation and campaigners can make a company’s reputation the issue and, between them, they can do their best to deter bad behaviour.

But better than surrounding a tiger with people wielding pointy sticks and hoping they don’t nod off, is building a really good, plain wall.

Companies are forever looking for the gaps in legislation through which they can slip a couple of billion quid and keep it out of the taxperson’s way.  The more complex the legislation, the more gaps go un-noticed by legislators, but not by sharp-eyed corporate-tax lawyers.  In general the simpler the rules the harder they are to game.

One thing global corporations cannot hide is global profits.  They have to declare those to shareholders.  They avoid tax through internal accounting so that their profits are made, for legal purposes, in low-tax jurisdictions.

So how’s this?  If Starbucks makes £10Bn profit worldwide and 10% of its turnover is in the UK the starting point for tax calculations should be 10% of its global profits, i.e. £1Bn.  The default minimum taxable profits would be set at a percentage of that £1Bn, say 50 or 66 per cent.  If a corporation wants to argue that it really isn’t making that much profit in the UK, and should pay less, then the onus should fall on the company to prove it.  Internal licensing and silly payments from one wholly owned subsidiary to another should be discounted.

I can hear the Tax Payers Alliance (an odd name for people who want to avoid paying tax) and the libertarian right protest; ‘you’ll drive businesses out of Britain!’

Really?  In just over a decade Starbucks has persuaded millions of people in the UK to pay £3 or more for a small bucket of not-great coffee, something we’d have called crazy in the days before all that coffee made us crazy.  If Starbucks go will people stop drinking the stuff?  Will we suddenly become a decaff-nation?  Or will some enterprising soul, seeing hundreds of empty coffee shops and hundreds of unemployed baristas, and more to the point a ready made market, not simply open new, better coffee shops and make themselves a small, or actually quite large, fortune.

So let’s quit the grandstanding, the soundbiting and the moralising and build us a good, simple legal wall.

A Hole Where A Heart Should Be

People, it’s time to get real.  The rich don’t want to stay rich because it allows them to consume vastly more resources than you and me.  Vast wealth does not equate 1:1 to vast consumption.  Once needs have been met and wants have been sated wealth is about far more than that; it’s about status. But beyond that, once mere status has been surpassed vast wealth buys you power.  It’s not really about stuff.  Any old moderately well off person gets to buy more stuff than they know what to do with.

Let me give you an example.  A while ago an academic research group investigated who was the richest person in history.  The measure they settled on was measuring wealth in terms of the number of average incomes of contemporary citizens from the same state that it would take to equal a given rich person’s wealth.

If memory serves the answer was Carlos Slim, the Mexican telecoms magnate, whose wealth is equivalent to the earnings of 440,000 average Mexicans.

The point is this: when Carlos Slim gets up in the morning he doesn’t eat 440,000 fried eggs for breakfast.  He doesn’t own 440,000 cars.  Indeed he has a reputation for leading a fairly unremarkable life.  He lives in a 6 bed house in Mexico City.  He drives himself around.  Yes, he collects art, but he has built a public museum to house much of it.  In short he’s a fairly down-to-earth multi-billionaire.

However as the Telegraph article observes: “The reach of his dominion is so large that the average Mexican will wake up on sheets bought from a Slim-owned store; buy their morning bread from a Slim-owned bakery; and drive to work in a Slim-insured car. They will call friends on a Slim-owned (sic) mobile phone, lunch at a Slim-owned restaurant, and smoke Slim-owned (sic) cigarettes.” That’s power.

I’m not even sure that it’s the super rich that should be our primary concern.  After all where businesses are wholly owned by a Slim or a Warren Buffet, a George Soros or a Bill Gates, they’re capable of having a moral dimension.  Of course the super-rich are often super-rich because they’re super-ruthless, but there’s no inherent contradiction.   If you wholly own a business you get to decide the principles on which it operates.

Publicly listed corporations on the other hand are a very major problem.  A blog post by Rob Manuel of B3ta captured the notion very neatly:  “Psychopaths, as explored in Martha Stout’s wonderful The Sociopath Next Door, will tell any lie to achieve their aims and not be troubled by conscience. They represent about 4% of the population, and the corporation is effectively psychopathy encoded into law. A publicly traded company legally has to choose the option of maximising profits for shareholders – to be a corporation with a conscience is to break the law.”  Or as Joe Sullivan, Facebook’s CSO (and a former California D.A.) summed it up neatly when we met last year; “Corporations are not moral entities.”

There are good reasons why listed corporations are required to maximise profits for shareholders – primarily because the maximisation of profit is relatively easy to assess and it serves the ostensible aims of those shareholders, whereas other considerations are nebulous and could easily be used as a smokescreen for fraud.

But however good the reasons are it means that the world is run for amoral organisations and amoral ends while the rest of us are expected to act in a moral manner.

Look at the contrast between the Microsoft Corporation and Bill Gates.  They are not one and the same – despite rumours to the contrary.  Back in the 90s Microsoft was seen to be using its power in the market to destroy the competition either by breaking its own software so it didn’t work with that of competitors, or through bundling or by buying up competitors and killing them off.

Microsoft would surely argue to toss with that description but it oughtn’t to dispute that that perception was widespread, and so back in the 90s Gates, as the face of Microsoft, was demonised as ruthless and amoral.

Now he’s using his billions through the Bill and Melinda Gates Foundation to do good stuff.  So is he a good person or a bad person?

Truth be told the Gates you see now is probably the Gates he always was.  However a good guy in a corporate straight jacket is constrained to be an evil Borg.  The corporation admits of no morals.  It will eat your children unless the cost of doing so outweighs the benefits.  Freed of corporate constraints and with the vast resources at his disposal Gates champions many worthy causes and funds them too.

Instead of moral judgements corporations carry out a cost benefit analysis.  In other words ‘what is it going to cost us?’  So they’ll ask themselves ‘will we get caught?’  They’ll ask themselves ‘what is the highest fine we’re likely to have to pay?’  They’ll ask themselves ‘what will this cost us in damage to our reputation?’ They’ll ask themselves ‘will the compensation we’ll have to pay to a dozen families for killing their loved ones outweigh our projected profits?’

So what’s the answer?

Their answer will be ‘take the most profitable course of action’.  Ours must be; we’ll treat you like any other entity without morals – we’ll put up bars around you to keep people safe.

It’s the ultimate hypocrisy of the political right that it constantly lectures people about being moral while absolving corporations of any moral obligations whatsoever.  If we all acted like corporations there would be anarchy (and not in a good way).

Yet it’s corporations that increasingly set the tone of Western society.  To function within them it certainly helps to align your values with theirs.  Expediency takes over from right and wrong, profitability from usefulness, worth is measured in terms that work on a balance sheet not on a hymn sheet.

When the great minds of The Enlightenment hoped to see the influence of organised religion wither it wasn’t that they hoped that society would become less moral.  Rather they hoped that the principles shared by the world’s great religions would be freed from the bonds of the institutions that had set themselves up as gatekeepers over them and parlayed that position for wealth and power on Earth rather than a place in heaven.

But as the churches retreated from public life corporations filled the void with an anti-morality.  We owe much of the world we have inherited to that phenomenon.  When conservative religious societies in other parts of the world reject Westernisation it’s in part because they recognise not a different morality but, all too often, the absence of morality.

Some, myself included, suspect that corporations may collapse under their own weight in an increasingly agile, fast moving culture.  So many big players look flat footed compared to their smaller rivals.  Others argue we should take a collective sledgehammer to corporations.

Short of that there are certainly measures that are open to us that would have a radical effect on the corporate world.

The first would be an all out assault on the notion of ‘legal personality.’  Legal personality is essentially a legal fiction that assigns personhood and the rights that go with it to a non-living entity, such as a corporation.  Thus a corporation, in the US, enjoys the right to free speech and that stretches to making campaign donations, just as would a citizen-voter.  Obviously corporations have more money than citizen-voters and buy a bigger shout.

They can also sue and get sued and because they can get sued the corporate shell can (albeit not in every instance) shield directors, shareholders and employees from legal action.  If you find a corporation guilty you can’t jail it.  You can only fine it or take other measures – often rather paltry (fines are rarely stated as a percentage of turnover, for instance and if they were the cost based judgements that corporations make might be rather diffferent).  The ultimate sanction in a civilised society (as opposed to one that allows the death penalty) is to deprive criminals of their liberty.

All of us, whether rich and poor, have only so many days, so many months, so many years upon the Earth.  Take a year from a poor man and take a year from a rich man and it’s a great leveller.

If a rich man gets caught speeding the fine is meaningless.  Take away his licence and it’s an annoyance; he’ll hire a driver.  Take away his freedom and finally he experiences justice just as a poor man would.

So corporations get rights but they don’t get the same responsibilities or the same obligations as the rest of us.

If we insisted that the individuals at the top of corporations took responsibility, real responsibility, personal responsibility, for the actions of the organisations they ran, if we didn’t allow the buck to stop with an abstract entity, if we limited the rights of corporations so their only real rights were those of their workers and shareholders as citizens, we might be a lot further down the road to a world where the moral sense that guides most of us through life would be the same moral sense that guided the way business is done on our planet.

And if we didn’t allow companies a voice but only their workers and shareholders as citizens then we might find that power returned to where it belongs – with, all of us, rich, poor, young, old, men, women, gay, straight – that’s what the founding fathers meant when they introduced their newborn constitution with the words; “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

It’s a sad irony that those words ring hollow in modern America – because we the people, and not we the corporations, is what it’s all about.

Wotcha Pippa, Got an Old Motor?

So, Pippa Bartolotti drives a Jag!  That’s a little surprising given that she’s one of the four candidates for leader of the Green Party.  And though she expresses amazement it’s that fact that The Independent chose to lead its contest coverage on, frankly that’s hardly a surprise at all.

Journalists like nothing more than the whiff of hypocrisy especially when they smell it on one of our (would-be) elected representatives.  No matter that there’s a cogent case that a Prius is impractical, or that now Pippa has the Jag it’s more eco to run it than buy a new car.  Nope, the question is how someone who wants to front the Greens could have bought one in the first place.

Cards on the table time; I have a car.  I drive it more than I’d like to but, living in the sticks, and 2 miles from the nearest bus stop, and almost 5 from the nearest village, it’s not as easy as when I lived in London, there was a bus stop 50 yards away and I only used the car to drive back to the sticks every month or so.

I bought a second hand VW Golf 5 years ago.  It runs on diesel, and when I go past one of those rare outlets that sells the stuff, it runs on recycled biodiesel.  I like it.  I get variety.  I can smell of stir-fry, curry or fish and chips and as I go past I know I’m doing a little bit to boost sales of deep-fried food as people get a whiff.

Am I a saint?  The heck I am.  If I was saintly I’d cycle everywhere with my small son in a trailer on the back.  And if we got wiped out in the process by one of the psycho lorry drivers that uses the road between me and the station I might get an obit in Green World, while the non-green world would write me off as a selfish idiot for putting my child in harm’s way.  See; you can’t win.

But the point is this – if you espouse a principled position, as Greens try to – you can do too little and you can do too much.  Do too little and you sound like on of those old time SWP bores that used to tell women at my uni that liberation would come after the revolution.  The ones that believed them are still waiting,  It’s not good enough to say ‘well it’s not easy being green’ (though it sounds better if you sing it).  You have to make some sacrifices.

On the other hand if you really do live your ideals, as people like Brig Oubridge do – Brig who I also saw speak at university and who, as a result, I suspected was possibly the coolest person on the planet – the mainstream commentariat declare that you’re living in la-la land and couldn’t be trusted with high office.

So it’s a bit of a tightrope.  If you want guidance for how to walk that tightrope you might take a leaf out of the Caroline Lucas guide to how to do it.  Get a good haircut, choose simple, stylish but unostentatious clothes, avoid extravagance but don’t sound like you’re lecturing mum and dad Middle England to wear a hair shirt and radiate good vibes.

I’m afraid Pippa rather fell off the tightrope.

However her other point, that Greens have a rather uncomfortable relationship with business, is well made.

I became a Green, for among other reasons, because I agreed with the green critique of the consumer society.  It’s something we don’t talk about enough at the moment, but the endless cycle of creating unhappiness in order to create wants so that those wants can be filled is a cycle that has to be broken.  It’s a cycle that has enslaved us to needless labour and has turned us into a society that judges everything by its cost and values people by how much wealth they conspicuously display.

However even if we do manage to break these chains we’ll still need things and services and jobs and businesses provide all of those.

The big debate is really about two things – the scope of the state and the scope of private enterprise.

I believe strongly in limited government (as distinct from small government); that the state should be the instrument of action and not the repository of power.  It should be (with caveats) the embodiment of the popular will.  We want an NHS?  Then we mandate the state to create and run a public healthcare service free at the point of use as the most efficient way to realise our chosen collective endeavour.  Likewise all the other services we decide that we need to provide for all citizens in order to create a compassionate and civilised society.

What the state shouldn’t do is go freelancing – looking for ways to increase its scope beyond its doing what we want it to do.  I don’t want the state spending money infiltrating peaceful protest groups, or engaging in foreign wars that serve neither our interests nor the greater good of humanity.  I don’t want the state to poke its nose into my bedroom, allying itself with one religion or another or a host of other things.

Because there are about 60 million different opinions about what the state should and shouldn’t do we work out these differences through the ballot box.  It ain’t perfect but, as Churchill said, it’s the worst possible system except for all the others that human beings have tried.

So if you were to suggest that it’s the job of the state to design, build and sell us mp3 players, you might have some difficulty persuading your fellow citizens that we should take our government’s eye off the ball of more important tasks with such fripperies.

As for business, what is it’s scope?  For me the Greens’ real gripe with business is this: business has no place whatsoever co-opting power for itself.  In a democracy power belongs to all of us; one person, one vote.  Moreover if you believe in subsidiarity that power should be kept as close to the people as the people wish.  (Me, I’m happy to delegate organising rubbish collection to the council UNTIL they do something stupid and I want to stop them doing that stupid something).

But what we have now is the apparently inexorable leeching away of power from the institutions we delegate it to, to big business.  Note I don’t simply say business.

Small and medium sized businesses rarely have much, if any, power at all.  Greens are instinctively pretty sympathetic to smaller businesses and I reckon it’s because they provide goods, services and jobs without trying to set themselves up to make decisions for us for which they’re unaccountable.  Big business tries to do exactly that.

That is the big political issue of our age – the theft of power from the people (yes all the people – stockbrokers, company directors and the idle rich along with the rest of us – they all get one vote just like you and me) by big finance and big business.

If Greens used the power question as the litmus they’d be far less conflicted about their relationship with businesses.  It’s abuse of power by corporates – from bullying local authorities into approving megastores to leaning on government to drive down the minimum wage or holding a gun to our collective heads to bail them out after the financial crisis – that is at the root of it all.

If we got that power back and if we made decisions collectively, every person in this country over sixteen, in our best interests as both a whole and as a collection of 60 million individuals, we’d probably not be facing the global meltdown we all fear.

So Pippa, make smarter decisions next time you shop for a motor and start talking about the proper role of business in a greener society.

Innocent or guilty, if Assange’s rights aren’t upheld then neither are ours

I’ve been having heated exchanges with a number of Greens on Twitter about the Assange case.

Seeing people whose politics I identify with tweet “he’s a rapist” or “he’s guilty” frankly makes my blood run cold.  I like to think myself a member of a liberal political movement committed to due process, the rule of law and human rights not a lynchmob.

Clearly it’s better politics to button one’s lip and say nothing but it’s hardly principled to do so.  What might be more useful is a calm overview of what is happening in this case.

At stake are the human rights of three people: Julian Assange and his two accusers.  His accusers have the right to see their complaints of rape and sexual assault properly investigated, and if prosecutors decide there’s a case to be answered Assange should stand trial.

Meanwhile Assange has the right to a fair trial.  He also has the right not to put himself in jeopardy of rendition to the United States where he might face a military tribunal and the possibility of the death sentence by leaving the UK where his activities with Wikileaks have not been judged criminal.

Separating these two cases is hard because the British and Swedish governments make it very hard.  According to the Ecuadorian government which, though it has its own human rights issues, has now offered Assange political asylum, the Swedes have refused to give assurances that they won’t allow him to be extradited or rendered to the United States and the Swedes haven’t contradicted that claim.

Thus we face a damnable Gordion Knot of competing interests.  So let’s start at the beginning and remind ourselves how we got thus far.

Warrants for Assange’s arrest were initially issued late on Friday August 20^th 2010 on one charge of rape and another of molestation.  The following day those warrants were cancelled.  Eva Finne, a Swedish Chief Prosecutor said: “I don’t think there is reason to suspect that he has committed rape.”

In the days that followed the women’s case was taken up by Claes Borgstrom a lawyer and some time spokesperson for Sweden’s Social Democratic Party on gender equality.   Borgstrom is a committed campaigner, however his involvement in the case inevitably brought charges that it was becoming politicised.

The fact that police subsequently questioned Assange for an hour in Stockholm on Monday 30^th August 2010, when he denied the charges, and also that two days later Sweden’s DPP Marianne Ny decided to resume the investigation, only gave those alleging a political motive more ammunition.

Assange left Sweden in late September after an application for a work permit had been refused and, it would appear, after avoiding attempts by Ny to interview him.  There is a reasonable question to be asked why, when police were initially so quick to question Assange, Ny took her time about doing so.  He’d been in the UK for several weeks when on November 18^th Ny eventually went to court to secure an arrest warrant for him.

Meanwhile the hacking community came out heavily for Assange.  He was well known on the hacking circuit and many of those who hacked websites, avowedly in his cause, saw the entire episode as an attack on Assange’s work with Wikileaks – which gave the hacker motto ‘information wants to be free’ into its most dynamic and visceral incarnation ever.

Wikileaks had already upped the ante in its FOI campaigning in April 2010 by releasing video of a US helicopter attack in Baghdad that killed a number of civilians including a Reuters crew. Then it distributed hundreds of US diplomatic cables – the first major tranche (of 220) being put out on November 28^th with thousands more following over the next year.

Quite disgracefully hackers and supporters outed Assange’s two alleged victims and they were subsequently vilified in social media.   Even Assange’s London defence team, assembled to fight Sweden’s attempts to extradite him, were careful not to demean his accusers.  One of the most neutral accounts of the key proceedings reviewing the evidence is provided by The Guardian.  Close examination of proceedings reveals that Assange counsel was not accepting the alleged victims accusations but was rather, as would be quite normal, taking them at face value for the purpose of testing whether his  alleged actions amounted to a crime under English law which counsel argued they would not.  His critics have chosen to read or have apparently miseread his defence counsel’s remarks as an admission of guilt.  What doesn’t seem to be in dispute is that there were sexual relations but the issue of consent is.  His defence team have not conceded that he committed a sex crime.

That is for a court to decide.  At present no charges have been filed in Sweden.  Assange is wanted for questioning.  He has repeatedly offered to be questioned in London and that offer has, apparently, been refused.  Instead he exhausted his appeals against extradition and was due for deportation when he sought asylum at the Ecuadorian embassy.  Now we have arrived at a juncture where the UK government is apparently hinting it will enter the embassy to seize Assange.

So, what to make of this mess.

Firstly it is impossible to dissociate Assange the FOI activist from Assange the accused.  He has seriously angered some extremely powerful interests, notably the United States government.

The US has been expanding its jurisdiction for several years.  The Gary McKinnon and Richard O’Dwyer cases are examples of UK citizens pursued for the US though they committed no crime in the UK and never set foot on US soil.  The situation has escalated into a major issue in the UK because of the perceived (disputed) difference in the weight of evidence each country needs to produce to secure extradition, with critics saying the bar is set far too low for extradition to the United States.

Likewise European arrest warrants are under scrutiny because British citizens can be extradited and held on remand without charges being levelled and on evidence that wouldn’t bear scrutiny in an English or a Scottish court.

So we face a situation where Assange believes that if sent to Sweden he will be delivered into the hands of the United States and face prosecution, possibly for treason (there is an irony if that is the case since one can only commit treason against one’s own state).

There’s precious little evidence to persuade Assange’s supporters that this isn’t a stitch up.

Put aside the claims of his defence team that his alleged actions wouldn’t be a crime if they had taken place in the UK.  That may be so, but plenty would then ask if they shouldn’t be.

Put aside the fact that he hasn’t been charged in Sweden.

Rather ask yourself this: why, when Britain’s own record on sexual violence against women is so shamefully bad, is the UK government apparently talking about violating the sovereign territory of Ecuador’s embassy in London in contravention of the 1961 Vienna Convention.

Its efforts in the cause of two Swedish women, whose allegations are yet to result in charges, are out of all proportion to the efforts it makes on behalf of thousands of British women who face sexual violence every year.

Still we ask for better street lighting, for more rape suites, for better training for police officers handling allegations of sexual violence and better public education.

And look at the statistics: in 2006/7, 800 people were convicted of rape despite one in 200 women reportedly being raped in that year – a conviction rate of around 1%.  Would the UK government go to so much trouble in any comparable case?  Has it ever prosecuted any foreign diplomat accused of rape in the UK without the explicit permission of that envoy’s government?

None of this means that Assange should be let of the hook.  Whatever he may have achieved in the cause of freedom of information does not absolve him of any crime he may have committed against his accusers.  He should face charges as and when they’re brought.  Every facility should be offered to the Swedes to question him so that a decision on charges can be made.  However he and his supporters fear that Swedish law and the stance of its conservative government would facilitate his speedy extradition to the US where former Presidential candidate Mike Huckabee has already called for his assasination and where several prominent members of congress, including heads of key relevant committees, have demanded he face charges of espionage that carry a potential death penalty.

Rather the British government should seek assurances from Stockholm that nothing will happen that is not in accord with European Human Rights law and that Assange will not be extradited to face an unfair trial or possible execution.  No such arrangement has been sought or offered and I suspect it won’t be.  One must ask why an unprecedented ‘threat’ was levelled at the Ecuadoreans when if the real aim is to ensure Assange faces a proper trial in Sweden there are better ways to address what many see as Assange’s attempts to evade justice.

The whole episode leaves his two female accusers bruised and abused not only allegedly by Assange but also by some of Assange’s supporters and by the legal systems and governments of several countries.  They deserve justice and we should support genuine efforts to see they get it.

However we should not be prepare to see their plight hijacked by those who would surrender our hard won rights to a government in Washington that preaches one thing at home and pursues an entirely hypocritical line when it suits it abroad.

There’s another victim in all this – the cause of liberty.  We’re slowly but surely losing any moral standing we have to take despots around the world to task.  Every failing on our parts is used to justify abuses many times worse elsewhere.  Our real power comes from our principles.  Shame on those who sell them so cheap.

Thanks G4S! You’ve Reminded Us All Why The Private Sector Ain’t The Answer.

G4S’s abject failure to keep its side of the bargain over Olympics security ought to act as a damned great neon warning sign when it comes to the private sector taking a public role.

We’ve had to put up with the bleating of the ideological right for way too long.  “The private sector is more efficient,” “the private sector delivers value for money,” “the state shouldn’t be taking on roles that business could fulfil.”

The G4S debacle ought to serve as an object lesson in how the private sector serves its own interests and not those of the nation.

Yes they’re likely to pay a penalty for not having delivered on their contract, but a fat lot of good a penalty would have been if the state hadn’t been able to make good G4S’s mistake by calling in the military.  If we didn’t pay for the armed services through our taxes then the whole £8 or 9 billion corporate binge that is the Olympics could have been fundamentally compromised.  G4S’s liabilities however wouldn’t have covered a fraction of that bill.

Just as with the banking bail-out the state provides a safety net for the private sector just as it does for citizens.  But while the government is quick to act against people on benefits for relying on that safety net they’re a lot slower to act against big business.  Of course they government points the finger but it doesn’t follow up the rhetoric with concrete action.

Rather than do that they throw a couple of high profile scapegoats to the wolves – Fred Goodwin and Bob Diamond being two fine examples – but once the public appetite for blood has been sated the rest get to breathe a sigh of relief and carry on much as before.

And not only does the state cover the fat behind of big business when it screws up, it allows it to get away with a far lower degree of scrutiny and accountability.

Companies providing public services are allowed to claim ‘commercial confidentiality’ to avoid answering questions.  They are far slower to answer in the media than our elected representatives.  The G4S story cropped up last weekend but it took the company’s boss Nick Buckles a whole week before he buckled to public pressure and went on the Today Programme to face an appropriate grilling – for days we didn’t get so much as a proper statement.

We’re seeing this right across our public services these days.   Even after a Coroner slammed St George’s Hospital in Tooting for killing a patient suffering from dehydration by sedating him after he called police to complain rather than giving him water, no one from the damned trust would go before the media.

What happened was little better than corporate manslaughter and they don’t have the decency to face questions.

The absolute minimum for private sector companies providing public services should be that they are held to the same standards as the public sector – no commercial confidentiality, no refusing to answer questions, complete transparency and direct accountability to the public.  If you take on a public service contract you contract to become a public servant – not a service provider.  Why?  Because if the public are paying for you to serve them then the public is the boss, or do we have to explain the basic customer/retailer relationship to people in the business world?

But even with proper transparency and accountability there is still a major flaw in the whole notion of private provision of public services.  It’s not addressed often enough – it comes down to contracts and it’s very simple.

With any contract, public or private, you set a budget and you agree a level of service.  With public provision of services if you achieve greater efficiency you can raise the level of service and deliver more for the taxpayers contribution.  With private provision companies deliver up to the agreed level of service and no further.  Efficiencies don’t result in a better deal for the public, they result in bigger profits for shareholders.  You don’t get to drive up the level of service until the contract comes up for renewal – and in some cases that could take up to 25 years.

And that’s just the start of the problem because while it’s relatively straight forward to agree a budget and build it into a contract, nailing down a level of service in an operation as complex as a hospital is far harder.  And when the right witter on about how much better equipped the private sector is I’d unhesitatingly agree with them in one respect above all others – they have better lawyers.  If the public sector is bad at one thing it’s contracts.  Nine times out of ten the private sector runs rings around government and once a bad contract is in place we’re stuck with it.  So drawing up an enforceable service agreement is tough enough, but arriving at one that delivers ongoing and incremental service gains to the public is nigh on impossible to frame.  We can only lose.

So perhaps it’s time that we started to think about how the public sector can take the best of the private on board, encourage innovation, reward excellence at every level, make staff a real part of the public enterprise, so we can start to deliver what the private sector can’t – for while listed companies are bound by law to deliver for their shareholders, public enterprises can be bound by their having to answer to all of us so that they deliver better and better for the communities and the society they serve.

And when we hear Conservative ministers, in the wake of the G4S farce, praise our armed forces as the best in the world we shouldn’t let them forget that it’s an unashamed admission that the state, the common weal, the public collectively through our taxes and the work of our public servants, can deliver unrivalled excellence.

Merchant Bankers, the lot of ’em

Every seasoned television journalist knows that TV is good with people, personalities and emotion and bad with complex ideas, facts and figures.  It’s why TV news reports hang big topics on individual cases; TV can’t make us care about 100,000 disabled people losing their benefits in the abstract but it can make us care about one disabled person struggling to get by, trying hard to get a job, being shafted by the system.  And by making us care about the one there’s a chance it’ll get us to care about the many.

Pity then Stephen Hester, boss of RBS, trying to turn a publicly owned bank back into something that private investors will want to take off our hands (albeit at a giveaway price if George Osborne has anything to do with it).

Hester has become the unwilling poster boy for everything that’s wrong with our increasingly divided society.  Bob Diamond, Barclays’ Group Chief Executive last year got a far bigger bonus (£6.5 million) than the one that Hester has just turned down.  But that’s not the point is it; Barclays is doing fairly well and is private, RBS is struggling and publicly owned.  Hester is our man, Diamond belongs to the market.

So why pity Stephen Hester?  Hester is the victim of the fact that the three big parties can’t address the real issues, the big issues.  That would require too fundamental a critique of what has gone bad with our society.  Hester has become the target over a narrow issue that the Tories, LibDems and Labour feel they can address without getting into really uncomfortable territory.

So, at the risk of being a pariah on Bright Green, I’m going to start with a defence of Stephen Hester.  Hester was brought into RBS to sort out its problems because he had a track record with Credit Suisse, Abbey National and, briefly, with a newly nationalised Northern Rock.  His task was to salvage an RBS which, briefly in early 2009 was the world’s largest company by asset value (£1.9 Trillion) with liabilities of £1.8 Trillion – and we; you, I and every other British tax payer, we own 84% of those assets and, by extension, we are underwriting 84% of those vast liabilities.

Clearly we don’t want a numpty sorting out RBS.  The trouble is that people with the skills needed to avert a disaster big enough to warrant a poem from the late William McGonagall are sought all over the world and they’re sought by very, very rich institutions.  Anyone capable of getting RBS back on track could take their CV anywhere are get a very large pay packet.  Hester’s problem is that RBS’s shares have fallen over the last year, the bank has shed 11,000 jobs and that, notwithstanding the fact that he may have prevented the situation being far worse, a bonus for a result like that looks, in political terms, very bad.  Above all though Hester has become a public servant running the kind of enterprise that no state would have chosen to run, let alone create – a high octane, aggressively acquisitive financial institution that mixed dull retail banking with highly speculative investment operations.  As a public servant he finds himself judged not next to his peers in banking but next to nurses and dinner ladies and cabinet ministers.  The criticism levelled at his bonus by the three big parties is founded on his being a public servant and the poor headline indicators of the bank’s performance.

So Stephen Hester gets it in the neck, faces calls for a Commons debate about little old him, and waves goodbye to almost a million pounds in share options.

The reason I feel sorry for Stephen Hester is that the real issue is not one man’s bonus but a system that consistently rewards ‘top people’ with sums of money that are beyond the imagination of most of those who work for a salary, if they’re lucky enough to get one.

So how has that happened?  Banks like to say that they need to attract the best and the brightest.  It’s long struck me as funny that when we reach for a profession that acts as a metaphor for intelligent we come up with terms like ‘rocket scientist’, ‘brain surgeon’, ‘boffin’, ‘quantum mechanic’.  We don’t say ‘merchant banker’.  If we say ‘merchant banker’ without meaning it literally we’re likely to be using it as rhyming slang as a substitute for something a little more offensive.

I happen to know an astrophysicist.  He’s very clever and paid very badly.  I know a few doctors.  They’re paid a lot better but they’re not paid anything like as well as people in banking many of whom have studied far less hard and do far less good.

Banks don’t have any sort of monopoly on talent.  Plenty of bright people do more useful things with their lives.  Banks do enjoy the greatest proximity to absolutely mindblowingly large streams of virtual cash.  The crumbs that fall from the tables of banking giants are, by mortal standards, huge.  As a result they suck in quite a lot of talent much of which is interested, above all, in those huge crumbs.  So remuneration in banking reflects more the availability of cash with which to reward people (and those people’s ability to make cash), rather than intrinsic worth.

None of this you’ll hear from LabDemCons.  Nor will you hear any fundamental criticism of the way banks operate, of the effect that banking remuneration has to divert useful people away from more socially useful professions, of what it does to a society when tens of thousands of people are propelled into a stratospheric earning bracket creating a vast pay divide (with all the social ills that follow in its wake) and distorting asset prices (such as housing) in a way that positively impoverishes those outside that world.

So let’s have a sensible debate about banks.  Banks can be very useful.  They handle money – money being a clever invention that saves people having to stick a cow in their pocket when they want to buy an iPod and saves Apple having to parlay a cow with a software developer who has time to offer but only a balcony on which to graze a cow…

OK, I’m being flippant, but financial institutions can act as flexible links to ease fluctuations in demand, spot and invest in new trends, facilitate trade between nation states, allow people to save the proceeds of a lifetime’s work against old age and sickness and so forth.  In Germany banks traditionally forged long-term relationships with companies, in which they’d invested, installing a representative on the board to offer advice and provide oversight; it was hands on banking focused on encouraging the production of real and useful stuff that people need and want.  Banks can have a useful, though often rather dull, role in society.

The trouble began when banking started to get rather exciting.  The biggest practical issues to have arisen in the Anglo Saxon world in recent decades have been the increased ability of banks to create cash on their balance sheets and to (supposedly) offload risk, and their tendency to engage in making profit through speculation rather than investment.

Since big bang in 1986 UK banks have typically reduced their capital against their liabilities (what is generally termed increasing their leverage).  With the extra dosh they’ve ‘invented’ they’ve been able to bring US style consumer credit to the UK and Europe (allowing consumers to run up more debts doesn’t of itself lead to more houses being built but it does create more cash to chase the available stock of houses pushing up prices while increasing their exposure to defaults).  They’ve magick’d up financial instruments (of which CDOs were merely the most infamous) that are essentially ways of disguising how bad the quality of debt they’ve been trading amongst themselves is, removing the risk from the lender but not transferring meaningful oversight of that debt to its new owner.

On an international level markets have gone beyond their traditional role of helping to determine true value to a state where they can create crises in order to profit from them.  One could make a cogent argument that what we’re seeing at the moment is disaster capitalism writ large – with markets demanding that states downsize and hold a fire sale of assets (which can be bought cheaply by those able to raise cash) and that governments are unable to take sensible Keynesian measures, such as investing in capital projects that upgrade infrastructure and make an economy more competitive, for fear that they’ll be held to ransom.

The banks aren’t alone responsible for their being too much cash sloshing around and with the asset price and localised wage inflation that’s gone with it.  Technology has also allowed people to become more productive.  Rather than result in a more generalised increase in living standards it’s benefitted those who are in a position to pitch their skills into the biggest and most lucrative markets.  Globalisation works to push up remuneration for those at the top and push it down for everyone else.

Likewise international corporations are able to shop around in a beggar my neighbour search for the lowest tax rates.  Of course any suggestion that global capital needs global regulation provokes cries of ‘new world order’ from the libertarian right, a political movement funded by, of course, big corporations (c.f. the Tea Party and the Koch brothers).

A single article isn’t the place to discuss the answers to such big problems.  One article doesn’t even allow room to set out all the problems.  However it should illustrate that Stephen Hester isn’t the problem.  He’s a symptom.

The reason the flock throws one of its number to the wolves is to keep the wolves distracted.  We can’t take down the rich one at a time (we’ll we could but we’d be about it for ever).  It’s even morally highly questionable whether we should as a society turn on one person – rich though he may be, Hester is but a single human being.  Following the mob won’t lead us to the new Jerusalem.

No, we should refuse to allow our focus to be drawn from the biggest issues of an increasingly divided society and a world where the nation state is being outmanoeuvred by transnational corporations to the detriment of the many and the benefit of a very few.  We shouldn’t be happy about Hester’s bonus but nor should we make him a scapegoat.