Omnishambles, Chloe Smith and a Government without grip

On the internet today, in Britain at least, it is impossible to avoid comment about Economic Secretary Chloe Smith’s disastrous attempted defence in Newsnight last night of the Government’s decision not to implement a 3p per litre increase in fuel duty, due this autumn. The consensus is that she was utterly shredded by Jeremy Paxman, and completely failed to defend the tax change.

I’ve commented before on the unravelling of George Osborne’s budget proposals – drawing on my experience of working on Budget vehicle tax proposals in my Civil Service days.  Responding to Tory MP Douglas Carswell’s claims that the Civil Service had got hold of the Budget process, I concluded that that Budget process was so political that this was unlikely.  Since then I’ve seen a blog post by former Treasury official and adviser (and former colleague on a couple of Budgets) Damian McBride, whose explanation is closer to Carswell’s; that the politicians had lost their grip.  On the basis of yesterday’s events I conclude that Damian’s  thoughts were rather closer to the mark than mine originally were.

What was obvious from that interview was that Chloe Smith was appallingly badly briefed – something that suggests that the Treasury machine was caught badly on the hop.  The inability to specify beyond a vague reference to Departmental underspends where the money was coming from was an extraordinarily basic error; it’s difficult to believe that the Treasury machine, used to defending hard decisions and with a deeply-ingrained horror of unfunded commitments, could have swallowed that one.  That in turn suggests that this decision was a last minute political caving-in to a populist campaign run by the Murdoch media. As late as lunchtime yesterday, according to Newsnight’s Paul Mason, the Conservative line was to rubbish the deferral of the tax rise as opportunism.

The politics surrounding this decision are strange.  Labour chose to make this issue a point of attack, doubtless influenced by their old friends at the Sun.  It’s odd because  the recent falls in fuel prices have made the policy easier to defend; but in any event a cut in a tax which is overwhelmingly paid by the better-off (fuel use is closely linked to income) at the expense of spending on services which are more likely to be used by those on lower incomes is a curious position for Labour to take (even if it’s far from atypical – all of a piece, for example, with Labour’s backing for a council-tax freeze in Brighton at the expense of services).  And in real terms this is a tax cut – as Paxman pointed out repeatedly in the interview, if the Government is serious about deficit reduction, what business has it doing this?

And, yet again, a high-profile Budget measure is abandoned – this one at considerably greater cost than the others. I cannot think of any precedent for a Budget that has been so completely shambolic. If a Labour Chancellor had done this, you can only imagine the headlines.

The answer surely lies with Osborne, and the way in which he embodies what looks like the defining characteristic of this Government – that it wants to do politics, not government.  In a week when we have seen Cameron speculating in a wholly evidence-free way about ending housing benefit for the under-25s, based on a narrative which posits the hard-working against those on benefits when he knows that the vast majority of those receiving that benefit are in work, this is one more example of the bigger omnishambles at the heart of the coalition; the abandonment of evidence in favour of ideological narrative.  Labour Chancellors like Gordon Brown and Alistair Darling – and indeed old-style Tory Chancellors like Kenneth Clarke – knew that the detail mattered.  Osborne, who substitutes arrogance and entitlement for intellect and application, appears incapable of understanding this.

At the heart of all this is a simple question. In the midst of the worst economic crisis in living memory, can Britain really afford a Chancellor who prefers to play at politics than getting to grips with his job?

The triumph of the commons: why Elinor Ostrom matters

The death of Elinor Ostrom, economist, radical and first woman to win the Nobel Economics Prize, seems to have passed largely unnoticed in the Anglo-Saxon world; a look at the #ostrom hashtag on Twitter in the hours following the announcement of her passing showed tributes in many languages, for once English not in the majority.  Yet Ostrom’s work remains an inspiration to those on the Green left and, I’d argue, is supremely important in developing a counter-narrative as the failure of the Anglo-Saxon model of free market economics becomes clearer by the day.

Why does Ostrom matter?  To answer this, you need to go back to one of the most influential texts of free market economics – Garrett Hardin’s The Tragedy of the Commons, published in 1968.  The heart of Hardin’s argument can be found in these paragraphs:

The tragedy of the commons develops in this way. Picture a pasture open to all. It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy.

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, “What is the utility to me of adding one more animal to my herd?” This utility has one negative and one positive component.

1) The positive component is a function of the increment of one animal. Since the herdsman receives all the proceeds from the sale of the additional animal, the positive utility is nearly +1.

2) The negative component is a function of the additional overgrazing created by one more animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular decision-making herdsman is only a fraction of -1.

Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another…. But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit–in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.

In other words, Hardin argues that collective control of a resource is impossible.  The answer to this tragedy – private ownership (Hardin goes on to compare the use of commons to bank robbery). It is a hugely influential text, one that has been used over and again to argue that common ownership is impossible.  Hardin argues that common ownership will lead to environmental degradation; ultimately he concludes that the answer lies in preventing the populace from breeding.  It’s important to note that, not only is this argument fundamentally anti-democratic, but it is firmly rooted in the social Darwinism that informs so much American socio-political discourse (the irony that this unsupportable bastard offspring of Darwinism holds sway in a society in which millions reject the central, scientifically-supported tenets of evolution is of course vast and obvious).

The failures in the metaphor are obvious.  Most obviously, Hardin offers no evidence at all that the commons are doomed to fail; the actual historical evidence shows that in many societies at many periods, land has been managed as a commons, sustainably and to the benefit of all, according to common rules.   Hardin argues that private ownership will do better; he offers no evidence to support this claim.  Also, the image of the rational being painted by Hardin is clearly one-dimensional; the rational actor is the one who seeks immediate gratification without thought to the collective consequence.  But it’s a straw man; while those attributes look very much like the actor in models of market economics, the simple fact is that not only do people do not necessarily think like that, but in almost all the interactions of life we actually do completely the opposite.  These are ideologically-based assumptions that pay no heed to the empirical world.  I refute Hardin’s psychological assumptions every time I put my scraps on my compost heap. The use of pseudo-mathematics in Hardin’s example is really just a form of obfuscation.

Most importantly, in spite of all these flaws, this unsupported concept of humanity provides a ready rationale for the appropriation and privatisation of common assets – or, more generally, of natural resources.  It’s actually a deep expression of pessimism about the human race – a set of assumptions that Hobbes would have recognised.

The importance of Elinor Ostrom’s work is that it provides a refutation of this world view.  And significantly – at a time when academic economics has retreated increasingly into the refining of mathematical models, leaving the relationship of economic theory to the real world increasingly unexamined, Ostrom was a thinker who worked in the field; her work was informed by a range of projects looking at issues as diverse as water associations in Los Angeles, police departments in Indiana and irrigation in Nepal.  It’s an economics that is grounded in experience. She drew on history and empirical research to show that in reality people are not just selfish actors, but do consider the wider consequences of their actions for those around them and the environment in which those actions are carried out.

At the heart of Ostrom’s contribution is a set of rules for the commons:

1. Clearly defined boundaries (effective exclusion of external un-entitled parties);
2. Rules regarding the appropriation and provision of common resources that are adapted to local conditions;
3. Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process;
4. Effective monitoring by monitors who are part of or accountable to the appropriators;
5. A scale of graduated sanctions for resource appropriators who violate community rules;
6. Mechanisms of conflict resolution that are cheap and of easy access;
7. Self-determination of the community recognized by higher-level authorities;
8. In the case of larger common-pool resources,organization in the form of multiple layers of nested enterprises, with small local units at the base level.

These are of course high-level principles – there is no magic wand being waved here; governing the commons, like any democratic exercise, may well in practice be messy and difficult – and involve a lot of activity that those who only measure achievement in terms of cash output will regard as wasteful and bureaucratic – but the fact is that it can be done, and done democratically and sustainably.  In that it contrasts powerfully with  the central conceit of market economics that there is, in Margaret Thatcher’s phrase, no alternative.  Market economics posits a set of pseudo-psychological statements about how individuals behave – of which Hardin’s comment is one; Ostrom’s work on the commons shows that human activity is far richer and more diverse than the market theorists would allow, and is above all democratic – it’s a basis for how equal human beings can resolve key issues about the management of resources without the coercion of ownership, or, crucially, the appropriation of resources

What does Ostrom tell us about the current world financial crisis?

Ostrom’s theory of the commons can be seen as providing a powerful alternative to the conceits and fallacies at the heart of the current world economic crisis.  The current crisis looks in many ways very much like Marx’s crisis of capital accumulation – corporate interests hoarding vast cash piles, while demand slumps, in the face of the capital’s need to accumulate to survive.  It’s a scenario that moved Keynes – whose mission was always to save capitalism from the idiocies of its practitioners – to formulate the need to stimulate demand, to kick-start the normal process that kept capitalism working (and, one might add with the hindsight of today,  to escape the cycle of crises that increasingly appears to characterise raw unregulated capitalism).

Commons thinking addresses two key elements of the way in which capital has continued to accumulate.  The first is through accumulation and price inflation of assets like land – the latest crisis, like every financial crisis since 1973, was precipitated by the collapse of a property bubble.  The second is through the monetisation and effective privatisation of assets held in common but which have sat outside the traditional purview of exchange.  This includes such things as the appropriation and exploitation of land belonging to indigenous people (or colonialism, as we used to call it) and the turning of subsistence economies into cash-based suppliers for the wealthier parts of the world; it also includes the monetisation of natural resources like air and water or even  life itself (for example in the case of the appraisal mechanisms for new roads, where the safety benefits of new roads are calculated on the basis of a “value of life” number generated through stated preference techniques);  exchanges that have traditionally been free acquire a cash value that can be factored into GDP numbers that feed capital’s voracious need for compound growth.  It means that economic activity – and increasingly what we would traditionally think of as non-economic activity – is carried on according to structures of value dictated by capital’s need for voracious expansion.  And many would argue that it is that expansion, based on paper values of intangible assets rather than the needs and aspirations of the majority, that is at the root of the current crisis.  Moreover, the inexorable pressure of capital accumulation – especially in times of crisis – is towards short-term gain; an economy which is based on the short-term realisation of paper gain in relation to monetised assets is the very opposite of sustainable.

Commons thinking offers us a way to counteract this. It challenges the belief that the only measure of wealth is the generation of asset numbers on paper; it reminds us that real wealth often has little or nothing to do with economic activity, and it places democratic decision-making at the heart of the generation of real value (it actually means that we decide democratically what has value, rather than leaving that decision to owners of capital and their tame accountants, or to politicians in a representative democracy in which those who do not share the prevailing ideology have little or no voice).  It’s a challenge to the fatalism of market economics – notably to the belief that millions of people are not permitted to have a view on what matters.  It emphatically does not offer easy solutions – in that sense it is way more honest than the neoliberal view that suggests we just have to make markets work more efficiently to ensure prosperity for all.  It recognises the messiness of life, the fact that the world is full of conflicting interests that have to be resolved, far more effectively than a system based on the single imperative of maximising paper asset value in the long-term.

In summary: the commons, and Ostrom’s work, offer a starting-point for an economic and political discourse that is more humane, nuanced, grounded and sustainable than the dominant neoliberal ideology.  At a time when neoliberalism is failing and the reaction to that appears increasingly to be an abandonment of democratic principles, the work of Elinor Ostrom is desperately important.

Recessional

Rudyard Kipling wrote his poem Recessional for Queen Victoria’s Diamond Jubilee in 1897. Not his original choice – that was The White Man’s Burden – but Recessional was something altogether less celebratory; a warning against hubris, a reminder of the transitoriness of pomp and ceremonial whose repeated refrain of “lest we forget” has become more readily associated with the mass slaughter of two world wars than with the emptiness of Jubilee celebrations.

It’s a thought that has never been far from my mind, as the three days of national rejoicing comes to an end. At the centrepiece, a Thames flotilla, a pop concert and a Service of Thanksgiving in St Paul’s; around the country, street parties (perhaps fewer than the mainstream media led us to believe), bunting, flag-waving, beacons, drinking; in the media, celebratory fawning; elsewhere, the slightly different pomp and circumstance of this Summer’s other main event, the Olympics, suspended for a day or two while the Queen’s sixty years on the throne are celebrated in the appropriate fashion.

Looking at the events, I have found it a strange and detached affair – a strange sense that this was not the Britain I know and live in from day to day (a feeling I had during the Falklands War, or after the death of Princess Diana). What does it tell us about Britain today? What are we celebrating – is it the longevity of an old lady, head of state through accident of birth and abdication, who has served inscrutably for so many years? Or is it an institution, or a society? As a nation (or at least some of it) waves bunting and Union flags, eats cup-cakes, Keeps Calm and Carries On, and unites around the television set to watch Elton John sing forty-year-old pop standards, how does this connect to the daily reality of people in Britain today?

Glimpses of reality

A number of vignettes show how the Jubilee celebrations connect with the darker side of modern Britain.

First, the growing scandal of the Thames Pageant stewards – a painful and poignant reminder of what life is like for millions in Coalition Britain. Long term unemployed people made to work for their benefits – despite, of course, the fact that they will have paid their National Insurance – bussed in from Bristol in the night, forced to sleep rough under London Bridge and change into their uniforms in public, denied use of toilets and shipped out to a sodden campsite in Essex. People who replaced paid workers who had been sacked shortly beforehand; apparently some were told they would be paid. A potent reminder that the grandeur celebrated on the Thames largely derives from an empire based on forced labour; a reminder that, for all the rhetoric of national inclusiveness, there are people who our political and media class either forget or actively demonise.

A second vignette; a campaigner for disability rights being told on Twitter that he had no right to campaign, and that he should be grateful for even the much-diminshed largesse that the taxpayer showers on him.  It’s all too common a trope of modern Britain; the coalition’s attack on the most vulnerable in society, a Government of bankers and landowners gleefully stigmatising them as scroungers, is perhaps the most repellent of the many mandate-less behaviours of the current Government

And finally a third vignette – the unknown but I suspect large number of employees who have no contractual right to a paid holiday on 5 June, and who are being forced to lose a day’s pay as their employer closes. I have spent some time trying to find numbers, which I guess must run into many thousands of people in our increasingly casualised economy – people who I’d guess would be on low hourly rates, living marginally in a society where pay is falling in real terms. I know of cases where this is happening but I cannot find any general numbers, or even any suggestion that some of the lowest-paid in Britain subsidising the Royal celebrations with a day’s pay is a problem. It reminds me of those sad, poignant memorials one sometimes sees in historic houses, salvers or other gifts presented to the landlord by loyal tenants on the occasion of their marriage or other such rite of passage, the contributions no doubt extracted with the menace of ostracism.

They are reminders – poignant and powerful – that the pageantry and pomp are the gilded carapace of a society that is becoming more divided, poorer and crueller than for decades. And since the Coalition took power two years ago, the constant implementation of measures for which it has no electoral mandate has turned that slide into a rout. We wave flags and eat cupcakes, but an institution that has done more to improve the daily lives of Britons than any other – the NHS – is quietly dismantled by coalition parties awash with donations from businesses determined to milk its remains for profit.

Adulation and democracy

This has not been a good few days for those who believe that a democracy is a society that can look at itself critically and objectively. The myth of royalty has been poured forth from the media; most notably through the constant distortion of history, through the narrative that seeks both to emphasise the ancient ritual of monarchy and to claim that it is an institution that has refreshed and modernise itself. The latter is probably closer to the truth, but as an expression of its survival instinct rather than a desire to be forward-looking. And if there is one emotion that has dominated this Jubilee it is nostalgia. The cup-cakes, the invocation of wartime unities in the face of the common enemy (now beyond the memories of all but our most senior citizens); all looking to the past. It constrasts powerfully with the 1897 affair, a celebration of imperial power by the establishment, confident and expansive – but with, it appears, rather less interest among the general public than we might expect today (and anti-Jubilee protests in the Empire). In 1897, the British establishment could be confident in its power, even though events were stirring that would utterly change the way in which Britain was owned and run.

Between then and now lies the twentieth century, one in which so many of the certainties of 1897 were brutally swept away. In less than twenty years Britain would be embroiled in the First World War; the surprising thing is not the scale of the carnage but, how in Britain, young men fresh out of public schools, the defining 1897 narratives of Empire, leadership and patriotism and service ringing in their ears, were sent away to a slaughter that, proportionately-speaking, far outweighed that of the conscripted cannon-fodder of a war that was in many ways a family dispute among the crowned heads of Europe. The colonies found their voices and their eventual political liberation. The coming of democracy, the welfare state, the social ferments of which led to Labour’s 1945 victory and the popular culture of the sixties; all of these should have made the events of the past three days impossible. But, here we are, celebrating a Diamond Jubilee again, if anything more passively than ever before. Where did it all go wrong?

The vast Ruritanian ritual we have seen over the past few days, it seems to me, is not the act of a confident, empowered democracy. It looks to me like a desperate act of refuge, a flight from unpalatable truths of political and social life. And to me it is impossible to understand the Jubilee, and the reaction of social and political elites to it, without acknowledging that we are mired in a deep political crisis; a fundamental crisis of political legitimacy. It is a crisis in which the narratives of the politcal elites – regardless of party – are becoming increasingly disconnected from the reality of life of Her Majesty’s subjects; one in which faith in democracy is increasingly being undermined.

I have written before about the neoliberal consensus across Westminster, in which three main political parties (not to mention the governing party in Scotland) embrace fundamentally the same economic ideology – one which is both flawed and deeply unpopular, resulting in both failure and an inherent culture of dishonesty.  Parliamentary expenses scandals, the deep corruption at the heart of the political elite’s connection with Rupert Murdoch – above all the enactment of measures like the effective privatisation of the NHS or higher education without any political mandate; all of these are symptoms of a crisis of democracy, exemplified above all by the fact that mainstream politics has become about the expression of a series of narratives unsupported by reality.  The narratives of Westminster politics become more dysfunctional by the day, simply unable to represent the realities of life for millions.

And this is perhaps where Kipling’s vision is so telling.  Kipling wrote that the appearence of pomp and pageantry was chimerical, and would fade away, but at the core was an inner set of values that would endure – in his case the values of Christianity.  More than a century later, our contemporary Diamond Jubilee has shown that it is the central core of values that has failed, while the puffery of monarchy and power remains.  There is of course a central core; it is the feral politics and economics of an elite that has brutally and knowingly turned back the progress – economic, social and political – of a century; which, in an age of mass media and ungrounded celebrity politics, needs the monarchy to preserve the illusion of a single, happy, united nation.  Coalition policies are needlessly, viciously destroying lives;  but for a day or two a population weary of dealing with the day-to-day consequences of an ideologically-mandated cut in their living standards, in a society that pays lip-service to popular democracy while denying the reality, can get time off from the realities of life.  They can wave flags, cheer fly-pasts, party in the streets and look back to a time when things appeared more secure – when we still looked to an enabling state to orchestrate the collective provision of things like healthcare or decent social housing or university education, and when it was still possible to buy a suburban semi on the national average wage.

And constitutionally, of course, the monarchy stands as a powerful symbol of democratic failure.  It is through the royal perogrative – and the mystery and deference that continues to surround the institution – that the political elite can conduct its business away from public scrutiny, whether that business be fighting illegal wars without Parliamentary approval, letting big corporations off their tax obligations or even using Government press officers covertly to spread malicious lies about the poorest and most vulnerable in society.  There is no more powerful or obdurate enemy of democracy in Britain than the institution of monarchy, because it is the very institution that allows political elites to subvert democracy.

The three days of Jubilee celebration, then, seem to me to have been  a festival of national failure.  In 1897 the Jubilee celebrated imperial power; it preceded ferments that, for a while at least, appeared likely to shift the balance of wealth and power in the direction of the majority; but since 1979 that balance seems to me to have shifted decisively back.  We live in a society in which, over the medium to long term, people have become poorer and have less control over their lives, despite all the appearance of glossy prosperity.  Their environment is being degraded and there is less security in the real sense of the word.  People have saved for their old age only to find themselves in near-destitution.  Public space is shrinking and we live increasingly in a state of exception.  We have more toys and live less.  Even many of those whose material well-being has improved find themselves racked by insecurity and fear, and as a society we continue to self-medicate through drugs and alcohol to an extent that isn’t the case in our more equal European neighbours.

Against all that, monarchy is about generating the illusion of unity.  ”All in it together” is the mantra of Britain’s neoliberal coalition and monarchy is one way of convincing people to believe that.  Monarchy in Britain is both an anti-democratic outrage and a particularly manipulative and somatic branch of the global entertainment industry.  It’s a toxic combination and one that we as a society need to grow out of.

The most offensive Jubilee souvenir ever?

Walking along the trendy George Street in Hastings this afternoon, now bedecked with Jubilee bunting and shop windows full of nostalgia-themed Jubilee goodies (numerous invocations to Keep Calm and Carry On), I was somewhat surprised, to put it at its mildest, to come across this:

The Jubilee Golly, price £15, handmade in Hastings.  Now tasteless Jubilee tat is one thing, but this … desperately offensive and inappropriate; just wrong at so many levels. Something that surely has no place in the diverse Britain of 2012.

But on reflection, it’s actually quite a potent sign of what the Jubilee means.  Look at the shop windows, the newpaper articles, the TV coverage; this Jubilee is about nostalgia. It’s drenched in the fiction of a byegone age, and age which we will be told was more innocent, simpler, and – yes – less “politically correct”.  One in which people knew their place in the community and Britain was a better place for it.  One in which aspirations for a better, more equal, more open society has no part; a country in which one Kept Calm (or at least Quiet) and Carried On.  And, at its apex, a monarch and family who, inscrutably, channel and define the parameters within which the hard-working families of political myth operate. One in whose iconography middle class, scrubbed families sat at breakfast in gleaming suburban parlours, a jar of Robertson’s marmalade on the table, while  mother served, father contemplated his day at work, and the children wondered whether there would be time to finish another chapter of Enid Blyton before heading to school.

It is a nostalgia born of a sense that Britain as a society no longer functions, in which the effects of feral capitalism are set aside for a day or two to indulge in a nostalgia for a time when things had the appearance of comfort and certainty. Defeatism dressed up as celebration.

Jubilee Golly is at one level an offensive racial caricature. At another she’s a powerful metaphor for what this Jubilee means.