Contents What's New?

Regulating Banks?

Ed Miliband's "popular mobilisation"

Defence spending

Amartya Sen and
New Labour's Spending Cuts

A Very Busy Deputy Prime Minister

Death of Demi Leigh Mahon

Recession? What Recession?

Ed Balls sacks governors

'Broken Britain' & the Small State

Probation told to underspend

Climate Change Policy

Prudence: R.I.P



Losing Democracy

John Locke's Warning

'The new elite'

'It's far too late'

'There's no such thing as society'

The End of Local Government

Europe

Washington Consensus

Marketising the Public Sector

Consumerism

Boom & Bust

The General Will

The Global Labour Market

'War on Terror'

A multiplicity of threats

'A New Politics'

IPCC Report

Good News; Bad News

The recession - and with it New Labour's search for 'efficiency savings' - has brought 'interesting' consequences.

Take, for example, the good news that ID cards are to become voluntary. Given New Labour's problem with the actualité it's not surprising that this move has been treated with a dose of healthy scepticism, which is confirmed by the revelation that applicants for passports will have their details entered on the ID database. That, it seems, has NOT been the victim of 'efficiency savings'.   [GDN1]

The next item of might-be-good news is that the London-to-Edinburgh rail line is to be nationalised. Is BR making a comeback? Well, not exactly:

The transport secretary, Lord Adonis, said the contract will be put back up for auction to private companies at the end of next year but it is expected to fetch much less than £1.4bn, leaving the state with a gap in its rail budget.
[GDN2]

Another costly bailout.

But the most interesting developments are in the area of defence spending. For sixty four years since the end of WWII it's been an axiom of British defence policy that Britian is still a great power "punching above its weight" as Douglas Hurd liked to put it.

Punching above its weight is code for: spending beyond its means.

It seems the recession is catching up with the delusions of grandeur that have informed defence policy right up until the present. As Lord (Paddy) Ashdown told the Telegraph:

"I think - and again this rather more is a personal view, but it is reflected in the commission's report - that we are now reaching the end of nearly 600 years of the domination of Western power, Western institutions and Western values in world affairs ... One conclusion we arrive at is we can no longer afford to maintain museum Cold War armaments. We can no longer afford to maintain full-spectrum Armed Forces capable of operating anywhere in the globe like a mini-United States ...
Lord Ashdown warns of £9bn-a-year defence budget gap

Let us hope that both Tories and Labour are taking that message on board.









Losing Democracy

In the last few years there has been no shortage of ideas for making Britain a more democratic place.    [A New Politics]  

What we need to focus on is why change is not taking place, and is unlikely so to do so under present circumstances.

The following is a list of some of the factors which seem to me to explain the reasons for the growing degredation of democracy:

  1. The absence of accountability; [4.5]


  2. The transfer of powers away from local communities to central government; [5]


  3. The transfer of powers away from central government to the European Union; [6]


  4. The adoption of the 'free market' economy, and the transfer of powers to the IMF, and the WTO; [7]


  5. 'Choice' and the growth of 'consumerism' as driven by the demands of the 'free market' economy; the supremacy of market norms and the individual; [8]


  6. Government by 'General Will' [9]


  7. Why the 'free market' needs the General Will; Immigration [10]; and the 'War on Terror'. [11]

The merging of the public and private sectors entails the end of the public service ethic which is described - and lamented - by David Selbourne [3], and is also consequent on the strange marriage of New Labour's centrist process of governing to the 'libertarianism' in the economic and social spheres, as evidenced by the bogus rhetoric of 'choice' in the educational and health sectors, the open encouragement of binge drinking, and the changing role of the police.

The Illusion of Choice
Binge drinking

David Smail [4] focuses on the impact of powerlessness on individuals who are unable to adjust to a society based on unfettered competition, as does Oliver James.   'Blatcherism'

Finally, since market norms are strictly short-termist in operation, it's vital to consider the unseen threats posed by the 'free' market's addiction to growth.   [12]



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"Of the Legislative, Executive and Federative Power of the Commonwealth.

"The Legislative Power is that which has a right to direct how the Force of the Commonwealth shall be imploy'd for preserving the Community and the Members of it.

"But because those laws which are constantly to be Executed, and whose force is always to continue, may be made in a little time; therefore there is no need, that the Legislative should always be in being, not always having business to do.

"And because it may be too great a temptation to human frailty apt to grasp at Power, for the same Persons who have the Power of making Laws, to have also in their hands the power to execute them, whereby they may exempt themselves from Obedience to the Laws they make ...

" ... to their own private advantage, and thereby come to have a distinct interest from the rest of the Community, contrary to the end of Society and Government ... "

John Locke: Second Treatise of Government, para 143.

Speaker uses 319-year-old law to gag reports on ID card scheme

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Anthony Sampson on 'The new elite'

The new elite is held together by their desire for personal enrichment, their acceptance of capitalism and the need for the profit-motive, while the resistance to money-values is much weaker - and former anti-capitalists have been the least inclined to criticise them once in power.

It was a change among Tories as well as socialists. Harold Macmillan had kept his distance from bankers - 'banksters' he liked to call them - and Ted Heath talked about the 'unacceptable face of capitalism'.

But Margaret Thatcher's government was full of bankers, and Tony Blair said nothing about the greed in the boardrooms or the abuse of corporate power.

Many businessmen felt more at home with New Labour than with John Major's administration.

As government became more dependent on private investment and party donations, both ministers and permanent secretaries came closer to bankers and to corporate chiefs: the centre of gravity of the power-world was shifting away from Westminster towards the City.

"The new Establishment was looking like one giant boardroom, linked by common interests and agreements.

From:  'Who Runs This Place?'  Anthony Sampson  John Murray 2005

Amazon.co.uk
MPs who tried to stop you seeing their expenses
MPs' expenses in detail
MPs' expenses: Full list

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It's far too late ...

There are no boundaries of class or party among those who sense, or know, that British society is in profound trouble. Yet the consensus that this anxiety has created remains largely unexpressed.

Politicians dare not tell the whole truth about it for fear of adding to public alarm, and losing by it. Complaint over the quality of public provision, or about the education system, or about the statistics of violent crime regularly break surface, but in fragmentary fashion ...

Telegraph.co.uk David Selbourne

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'There's no such thing as society'

"Distributed throughout developed, Western society there is, as Foucault put it, an apparatus of power now all but perfected in obscuring from the vast majority not only the extent of injustice and inequity globally, nationally and locally, but also the ways in which injustice and inequity cause suffering."

David Smail
Mental Illness - Cartesian Dualism
Victims of Cartesian Dualism - Victims of Market Norms
Victims of Neoliberalism
Vulnerability and Violence

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'We need to change our policies as well as our leader'

Michael Meacher pinpoints the problem of accountability:

"So what is wrong with British politics today? The single biggest problem is the lack of accountability of power. It underlies every issue where the party and the public disapproves of government policy but cannot change it. There is little point in lobbying parliament or taking to the streets in protest at war in Iraq or Iran, or the replacement of Trident or a new round of nuclear power stations, or the marketisation of public services, if the government (for which often read the prime minister) has already made up its (his) mind, and can't be held to account. The checks and balances have all but disappeared.

"What is needed is a new framework of power that restores the authority of the House of Commons, secures effective ministerial control of the civil service and moves to a more constitutional type of premiership. Parliament, through strengthened select committees, chosen by a secret vote of the whole house in accordance with party numbers and not by the whips, should have statutory power to ratify cabinet appointments, summon ministers and require disclosure of all relevant documents, to appoint external committees of inquiry where the government may be reluctant to do so, and to table its own motions for debate on the floor of the house at least once a month, with a vote at the conclusion."
The Guardian

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The End of Local Government

Not for the first time, David Miliband has been saying all the right things about devolving greater powers to the locality, and brownie points for his realisation that lack of powers and influence at the local level are a factor in 'the deeper causes of disaffection with party politics':

... we need to get state power in the right place ... We need basic minimum standards to avoid deep disparities. But unless we devolve greater powers to local government and local people to choose their own priorities and influence the key services in their area, from policing and skills to healthcare, we will not tackle the deeper causes of disaffection with party politics.

The Times 05 April 2008

'Thatcher's favourite test-bed'

Localise Public Services

Miliband's Localism

Three priorities to improve UK democracy

More Links


'Thatcher's favourite test-bed for radicalism'

Replicating the free market

Simon Jenkins relates Margaret Thatcher's weird mix of private sector methods and centralist modes of control:

She might import into the public sector some of the disciplines that recession had visited on the private sector, but for most public services some means short of privatization must be found.

Discipline must not mean loss of control. ...

On any psychological spectrum from freedom to control there was no doubt where Thatcher stood. She might espouse freedom in theory, but in practice she craved control ...

The result was the most intensive refashioning of public services since the 1940s ...

To Thatcher and Lawson the failure of the public sector to deliver measurable improvements in services was a symptom of ingrained socialism. This had to change. If an activity was not suitable for privatisation it must at least be managed by some proxy for it.

This was implemented in a series of reforms ... culminating in a programme to hive off distinct government activities as semi-autonomous agencies ... civil servants were no longer 'secretaries' but became executives, directors and managers.

Each was increasingly chained to budgets, targets and performance assessments, quantified so incentives could be generated and rewarded.

How else ... would people be motivated other than by money?

The result was the introduction of into government of tools drawn from the arcane world of management consultancy.

They included re-engineering, internal prices, out-sourcing and virtual markets, for everything from defence supplies to government hospitality. ...

Inter-agency contracts were to be established ... Purchasers had to separated from providers and everyone defined as a buyer or seller. This dichotomy, the 'purchaser/provider' split', supposedly replicated the free market.

Initially the impact was concentrated on Thatcher's favourite test-bed for radicalism, local government.
Centralising Services
[Thatcher's] ... attention fastened on a group of services whose leadership was at some remove from the heart of government, notably the health service, housing, schools and universities, urban renewal, and local government.

In most democracies these activities were either constitutionally protected or were regional, provincial or municipal in responsibility. ...

To Thatcher these were just the services most afflicted by socialism ... They had to be purged by being brought within the penumbra of her office.

Aspects of delivery might be subject to private-sector discipline but never with loss of control. ...
Housing

I've selected housing from Simon Jenkin's book because it illustrates several key strands in Thatcher's ideology: hostility to elected local government; hostility to subsidised services; centralised control; and finally the growing stigmatisation of the marginalised: the 'losers' who we are now encouraged to dismiss with contempt.

For Thatcher home-ownership embodied all the vigorous Tory virtues: secure saving, family values, household gods, a lifetime of hard work rewarded. ... She was adamant that the state should use its resources to help people own their houses.

This form this took was tax relief on mortgage interest payments.

Despite annual pleading from the Treasury, she regarded 'middle class subsidies' as a fit compensation for years of taxes spent on the undeserving poor. ... It was her sort of social engineering.

The cost of mortgage interest tax relief ... increased by 200 per cent in real terms between 1980 and 1990, to stand at £7 billion. ...

Needless to say local councils and their tenants enjoyed no such indulgence. ...

When ordering councils to sell houses, built partly with local money, she felt she should ... leave the receipts with the locality ... But [she] had no desire to leave local authorities to disperse [it]. ... She was determined to impose her own view of how the nation's housing stock should be financed an allocated.

... Most council anger was directed at Thatcher's insistence on discounts of up to 60 per cent ... Sales raised £18 billion during the 1980s ... [but] ... The cost of discounting was estimated at 32 billion overall.

For its part the Treasury could not bear to see such money pouring into council coffers. Lawson used his powers to restrict the right-to-buy revenue for investment ... He was determined to treat the money as his own ... in 1987 he boasted a £1 billion undershoot in ... public borrowing [but] did not mention that it reflected a surge of £2 billion that year in right-to-buy receipts. ...

While council houses were being sold, they were not being built.

In the 1970s, local councils built or restored 200,000 units a year. By the end of the 1980s the total was down to 13,000 and falling. A chapter in the history of civic Britain was ending.

So, how was the "statutory duty" to meet housing needs to be fulfilled?
Not by elected councillors!

Charitable housing association had long complemented local housing departments, usually more efficiently. Thatcher duly heaped praises on them.

Housing associations received 90 per cent of their money direct from central government through a quango, the Housing Corporation. This body could now do no wrong.

In 1979 the corporation had 100 staff and a budget of £50 million. When Thatcher let it had 700 staff and a budget of £1 billion. It was sponsoring the construction of three times as many houses as were local councils. ...

[Thatcher's] response to the poor image of inner-city housing was a burst of ad hoc initiatives which came to characterize all Whitehall intervention in this area of the welfare state. The late 1980s saw Housing Action Trusts, Community Housing trusts, Urban Housing Renewal Units, and Priority Estate Projects.

Under Major and Blair the pace of such intervention quickened, except that the names were of the 1990s: Estate Action, Rough Sleeper, Tenant Choice.
Thatcher & Sons | Simon Jenkins | Penguin Allen Lane 2006
The legacy of Margaret Thatcher


Reform need not mean privatisation
if public services are localised

First, a 21st-century state will not be as centralised as the one that exists today. The notion that the budget for maths classes in Oldham or hip replacements in Truro should be set in London is indefensible. Services, most agree, should be decentralised. That can't just mean relocating certain agencies to York or Newcastle, to do the same job of centralised, top-down management from a different place. It has to mean genuine devolution, allowing a town or city to run its own services from start to finish.

Jonathan Freedland, The Guardian, 17 May 2006

Miliband's threatening letters
undermine his localism spin

In his speech yesterday, Miliband rightly implied that the centralist drift in Britain has gone beyond all common sense, yielding disempowered communities and dissatisfaction with public services. To a localist the reason is simple. The lowest tier of government in France is the commune. It has an average population of 1,580. Germany's lowest tier has 4,925, and Scandinavian countries are comparable. The British average is 118,400. In France there is an elected representative for every 116 electors, in Germany for every 250. Britain's ratio is one to 2,605. Small wonder British election turnouts are half those on the continent.

So far Miliband's localism is all jargon and buzzwords. We have stakeholders, conveners, forums, partnerships, meetings and cobwebby ideas such as citizens' juries. If these are localism's little platoons they are Dad's Army. The one thing Miliband and his colleagues never mention is democracy. They are horrified by voting. Their latest fad is "double devolution", but this invariably involves taking power from anyone who has dared stand for election. Miliband is unable to list a single power to be given to elected councillors. His benefaction is to unspecified volunteers who are "below the radar" of democracy yet who deserve something called "more control".

This is hidden centralism. The reality lies with Miliband's boss, John Prescott. When he asked the people of the northeast if they wanted a new regional outpost of his department and they said no, he ignored them and imposed it.

Simon Jenkins, The Guardian, 22 February 2006

Three priorities to improve UK democracy

... constitutional reform should concentrate on three priorities: to re-establish the House of Commons as the central political authority; to straighten out the way we pay for politics; and to re-invent local democracy. All else is a sideshow. ...

Britain has the most centralised political system in Europe. The House of Commons is the people’s national assembly but has been sidelined in public policy, except to give legitimacy to Downing Street decisions.

It is too easy for the government to get its way without its decisions being seriously tested by an assertive legislature. ...

The most difficult constitutional matter is local democracy. Britain just does not have proper local units to devolve power to. Across Europe, municipalities have an average population size of about 10,000 inhabitants. In Britain, districts average about 110,000 inhabitants and metropolitan boroughs in England more than 300,000.

British democracy needs a system of municipalities and many more elected politicians to represent citizens’ interests. ...

FT 20 December 2007

More Links

"Blair's failed centralism"
Charles Leadbeater: The DIY State
Community Empowerment
Ecotowns
Home Ownership
Leeds not Birmingham
Public Sector Soviet Tractor Factory
Quangos
Simon Jenkins

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The European Union

The EU has an array of democratic deficits.

First, and most importantly, it hovers between 'intergovernmentalism' and 'supranationalism' making lines of accountability even more problematic than they are inside national governments. oD

All other problems with EU democracy flow from this dichotomy.

Comparison with the US constitution further highlights the bizarre nature of EU institutions and the way they relate to each other.

The three bodies concerned are the EU Commission, the Council of Europe and the European Parliament.

Parliament and Council are described as

... two chambers in the bicameral legislative branch of the European Union, with legislative power being officially distributed equally between both chambers. However there are some differences from national legislatures; for example, neither the Parliament nor Council have the power of legislative initiative. In Community matters, this is a power uniquely reserved for the European Commission (the executive) ... [Wkp]

This is akin to a Whitehall department instructing the House of Commons to examine a bill, allowing MPs the power to amend or reject it.

If the Parliament does wish to initiate legislation, it has first to get the Commission to draft it.

Control of the executive - the Commission - rests with the Council, which appoints the President of the Commission. Parliamentary committees vet appointments to the Commission - as would happen in the US - but can only reject the commissioners as a body not individually.

Budgetary matters are similarly complex:

The legislative branch officially holds the Union's budgetary authority, powers gained through the Budgetary Treaties of the 1970s.

The EU's budget is divided into compulsory and non-compulsory spending.

Compulsory spending is that resulting from EU treaties (including agriculture) and international agreements; the rest is non-compulsory. While the Council has the last word on compulsory spending, the Parliament has the last word on non-compulsory spending.

The institutions draw up budget estimates and the Commission consolidates them into a draft budget.

Both the Council and the Parliament can amend the budget with the Parliament adopting or rejecting the budget at its second reading. The signature of the Parliament's president is required before the budget becomes law. ... [Wkp]

I can find no complete list of powers which have been passed to the EU, the nearest thing to it is at [FedEE].

If your time is not limited, euroknow describes itself as a 'Concise Encyclopedia of the European Union'. I dread to think what the full version looks like!

There is a larger issue behind the constitutional mechanics:

What is Europe good for?

The fault-lines which run through national politics are present on a larger scale within the EU. What started as a project supported by Europe's Social and Christian Democrat parties has gradually become a vehicle for the promotion of neoliberalism.

Richard Corbett takes up the story:

The EU ... has been a positive force for workers, enshrining in its work the trade union values of social inclusion and solidarity, welfare states and public services, and worker participation and collective bargaining ...

However, in recent years, social Europe has floundered. Its previous achievements remain on the statute book, but new ones are few and far between.

The Barroso Commission has had a somewhat one-sided focus on market liberalisation which, combined with the lack of progress in the review of the decade-old directive on working time and the delays in adopting a directive on vulnerable temporary agency workers, is leading to rising trade union dissatisfaction ...

Guardian 12 Septmber 2008
EU Lisbon Treaty pushes privatised superstate
Social Europe
The Lisbon Treaty: A Very Real Danger

'Neoliberal Communitarian Citizenship'

European Union: after the reform treaty

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The Market Economy

The Neoliberal Agenda

  1. Privatisation of public enterprises;
  2. Deregulation of the economy;
  3. Liberalization of trade and industry;
  4. Massive tax cuts;
  5. 'Monetarist' measures to keep inflation in check,
    even at the risk of increasing unemployment;
  6. Strict control on organised labour;
  7. Reduction of public expenditures, particularly social spending;
  8. The down-sizing of government;
  9. The expansion of international markets;
  10. The removal of controls on global financial flows.

Governmentality

There is an array of anti-democratic aspects to the neoliberal agenda.

First, it was never presented to voters as a coherent package to be debated and subject to vote - a referendum would have sealed its legitimacy - and second, it has effectively removed the economy from the arena of political debate since, for example, a proposal which ran counter to any of these ten points is unlikely to get through Parliament, and, in any case might fall foul of European law, or agreements entered into with, say, the World Trade Organisation.

This explains why policy differences between the mainstream parties are now marginal, and largely presentational, since the Washington Consensus has bi-partisan support.

This is also the reason for the relaxation of business regulation - points two, three and six - since it's an axiom of 'free' market theory that regulation interferes with - distorts - the workings of the market. [RFRB]

It's also the reason for the gradual winding-down of the social state - points seven and eight - instanced by the run-down in the quality of care for the elderly, and the mentally ill .   [DR]     [KR]     [SICE]

Yet, as David Smail, Oliver James and Paedar Kirby have pointed out, neoliberalism inevitably leads to increased incidence of conditions like anxiety and depression.

The confirmation that prison in now the 'default' option for the mentally ill is matched by research confirming that the size of the prison population is inversely proportional to spending on welfare.    [CaS]

The neoliberal agenda also gives rise to a range of policy oxymorons, most notably that involving Gordon Brown's 'war' on child poverty. Brown has pursued two incompatible aims: lower taxes on the rich, and the alleviation of child poverty.

Business Secretary John Hutton's speech in praise of "aspiration and ambition" highlighted the contradictions involved. [GD]

He was able both to call on us to "celebrate huge salaries" and re-affirm the committment to the 'war' on child poverty, apparently failing to notice that the rich no longer provide the revenue necessary to win that campaign.   [IFS]

Nor should this surprise us: under the terms of the Washington Consensus redistribution of incomes is in breach of points 4, 7, and 8, so the money has to be obtained from a growing range of stealth taxes which fall hardest on people outside the 'tax avoidance' bracket.


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'Marketising' the Public Services

Health Care

NHS Logistics

Prison & Probation


Hospitals granted foundation status despite a plethora of failings
GP care facing 'franchise threat'
Hospital and GP reforms 'flawed'
Independent Reconfiguration Panel
Keep our NHS Public
Maternity units closed to mothers

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The Culture of Consumerism

“What is new about the culture of consumerism is that consumption is now elevated to the predominant value and central activity of human culture, so that it is no longer an activity to whose primary purpose is to satisfy needs (either biological or spiritual) but rather an activity driven by induced wants; for this reason, it never satisfies since new wants are all the time being created by the culture ... commodities are therefore being consumed not for themselves, but rather for the meanings associated with them, as is well illustrated by the central role played by branding in this culture.”
“The symbolic meanings attached to consumption are created by a powerful transnational advertising industry. This is now one of the most globalising industries with a small number of companies having interests in countries throughout the world.” [VaV]

The question arises: how do people on modest incomes participate in globalised consumerism?

“Through the use of multiple credit cards, people can achieve levels of consumption beyond what their income would permit. By this means they achieve their social identity and sense of belonging, thereby replacing an earlier practice of citizenship through belonging to political parties, trade unions and other collective organisations ...”
Wealthy and Asocial

"Chelsea Tractors" Sports Utility Vehicles, 4 x 4's - whatever - have become the symbol of what it means to be wealthy and asocial.

First, they demonstrate power. Short of driving a tank, you couldn't be much safer. And other people's safety is a matter for them. "It's not my problem ... they're losers."

Second, they demonstrate success as a consumer: you want the best, you can afford the best, you're worth it.

Third, they demonstrate the weakness of government and regulation. Only the Mayor of London has had the guts to confront them.

Fourth, they are emblematic of the 'affluenza virus' - the end of 'society' and social obligation - which is essential to the success of corporate-capital-globalism.

Corporate-capital thrives on the creation of envy and discontent; concern for others, and for the general good, has vanished. It recognises two classes of people: winners and losers.

The balance between the individual and the collective has now swung to the extreme end of individualism.

Democracy squeezes into the gap between collective societies, like the Soviet Union and Nazi Germany, and individualistic societies where relationships have become, in Zygmunt Bauman's language, "liquid".

Another way of looking at it is via Polly Toynbee's "caravan" metaphor. In an individualised society, the 'convoy' has broken up into individual - and self-contained - units. Relationships with other 'units' are unimportant.

More Links

Buy it, wear it, chuck it
'It's a wonderful world'
No such thing as society
Privilege and privation
'£3.65bn cost of lost generation'
The problem with school 'choice'
Spend! Spend! Spend!
The Trap

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Boom and Bust: Brown's Bubble Burst

The Guardian's Larry Elliott describes the real crisis behind the expenses furore.

Heal the economy to mend the politics

Westminster's reputation has been shredded not because its officials march around in fancy dress but because its members have shown themselves incapable of tackling the issues that really matter to voters: a secure, decently paid job; an affordable home; a pension that provides enough to live on.

MPs wondering why they are in such bad odour should mull over the ­economic data released while they have been waiting to be fingered by the Daily Telegraph.

House building is at its lowest since 1953; unemployment rose faster in the first quarter of this year than at any time since modern records began in 1971; real incomes have barely grown for all but the rich since 2003, and for the poorest 20% have fallen since the last election. The Economist Intelligence Unit last week described Britain as being in the most brutal slump since 1931, the year sterling came off the gold standard.

In part, these policy failures can be explained by arrogance: Brown really did believe he had unearthed the ­philosopher's stone that would provide everlasting prosperity and stability. In part, the failures can be explained by a belief that there was not much policy­makers could do to change things in the age of globalisation. In part, they come down to the woeful lack of economic competence among far too many MPs. Result? Voters see the House of ­Commons as a glorified county council run by self-serving dunderheads. ...

True rehabilitation will require humility, a plan of action for digging the economy out of its deep hole, and a degree of competence lacking until now ...

Let's start with the real state of the economy. Dhaval Joshi, an economist at RAB Capital, has produced research showing that the long period of above-trend growth the prime minister boasted about was due simply to consumers running down their savings.

In the mid-1990s, the savings ratio based on take-home pay (stripping out pension contributions by employers and employees) was about 5% of GDP. By the time the financial crisis broke in 2007 it was -9%. Consumers, in other words, were spending more than they earned and were able to do so because they could borrow against the rising value of their homes during a property bubble ...

The tough – but inevitable – message from this is that Britain has to start living within its means. Instead of relying on debt-driven consumer spending or higher government borrowing, future growth will rely on investment, manufacturing and exports. A bombed-out housing market and the 30% devaluation in the pound over the past two years should help, as should the fact that Britain still has a core of excellence in advanced manufacturing and is strong in services that can be exported.

But it won't happen without the government taking a hands-on approach to industrial policy – not just through procurement policies and subsidies for strategically important sectors of the economy, but also by using its stake in the banks to ensure that low interest rates deliver capital to productive enterprises rather than to a new burst of speculation in property.

Sadly, there seems to have been a loss of nerve. Ministerial courage has failed and the willingness to take radical action has been supplanted by a belief that there can be a return to business as usual within a couple of years. This is not only a forlorn hope; it also squanders a golden opportunity. The misguided managerialist approach has meant that the anger felt towards the bankers has now been turned on the politicians, but in a more intense form.

Managerialism is no longer good enough. In business terms, Westminster has been losing the loyalty of its customers for years. The damage to the brand can be repaired only with a new business plan that gives the punters what they want. Changing the corporate logo or replacing a couple of board members is not going be enough.

Guardian 24 May 2009
No return to boom and bust ...
CBI urges formulation of industrial policy
Extinction of the engineers
The Depression of 2010

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The General Will

The large state finds other jobs

Having lost the management of the economy, the state - which should have 'withered away' if neoliberal theory were correct - continues to thrive by finding other tasks, namely micro-managing people's lives from Whitehall.

An excellent example of this trend is the proposal to set targets for schools in areas not previously central to education:

Schools may be judged on teenage pregnancy rates and drug problems
· Plan to include 18 social targets in Ofsted reports

Schools will be made to keep records of teenage pregnancy rates, pupils' drug problems, criminal records and obesity levels under government plans to give parents a true picture of children's lives ... a discussion document from the Department for Children, Schools and Families, suggest schools would become accountable for 18 new targets, from bullying and neglect, to what happens to pupils after they leave school.

Sources said the 10-page document, entitled Indicators of schools' performance in contributing to pupil wellbeing, calls for Ofsted inspectors to judge schools on the wide range of measures in addition to existing criteria such as exam results and exclusion rates.

The measures could be implemented by Ofsted from 2009, and suggest that schools would become broadly responsible for children's safety, enjoyment and happiness. ... [GDN]

This example of Rousseau's General Will [Wiki] in action comes along side the almost daily deluge of reports and 'research' urging people to change their lifestyles in myriad, and sometimes contradictory, ways.

Usually the sub-text is downward pressure on public spending.

This particular report exemplifies the thinking of Sir Isaiah Berlin, who, according to A.C. Grayling:

... thought positive freedom could tempt the state to prescribe and perhaps enforce ways of living and acting that it believed would be in the best interests of individuals, and thus what those individuals should desire (whether or not they in fact did so). This temptation has lately come to prove too great even for Western liberal democracies, which now routinely pass laws enforcing behaviour they think is in individuals' best interests to adopt ...

'Liberty' | A.C.Grayling | Walker 2007 | page 256   [Isaiah Berlin]

The 'war on terror' allows governments to introduce legislation ostensibly for use against terrorists - and would-be terrorists - and for such laws also to be used to target anyone, such as the parent from Poole in Dorset, who was suspected of manipulating the schools admissions process.    [Extent of council spying revealed]

Worse, the boundaries between the 'war on terror' and the combatting of crime are being eroded as more and more local 'officials' become ex-officio members of the police and security services.    [New powers proposed for security staff]    [We're all suspects now]

More Links:

Democratic Centrism and Targets
Freedom v tyranny
Governing ... General Will
Labour's public sector is a Soviet tractor factory
Plato v Ivan Illich
'Protint'
Reforming the Public Sector

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Global Labour Market, the War on Terror, and the General Will

To what Jeff Faux calls the 'global investor class', inward migration into the UK has played a highly useful role in depressing wages and bolstering profits, but, it has also created several problems for government, the first of which is the opposition to the impact of the global labour market, manifesting itself as hostility towards migrants.

Culture Secretary Margaret Hodge - MP for Barking - caused uproar within her own party when she articulated a widespread point of view by calling for housing allocation to be based on " ... length of residence, citizenship or national insurance contributions ..." [TLG] which prompted Alan Johnson to accuse her of offering "grist to the mill of the BNP". [TLG]

In order (a) to persuade the indigenous population to accept migrants, and (b) to root-out terrorists, New Labour has been forced to adopted policies that may cancel each other out.

Persuading 'the natives' to support immigration involves something called 'social cohesion'. This branch of the General Will involves producing the sort of report that was published by the Housing, Planning, Local Government and the Regions Committee of the House of Commons in May 2004.

Eighty pages of worthy platitudes exhort all and sundry to play their part in promoting the 'multicultural vision':

Local authorities need greater incentives to break down barriers between different communities.

The Audit Commission should put social cohesion on a par with performance in education and social services in its Comprehensive Performance Assessments.

Council officers should be rewarded for their efforts to promote social cohesion.

Political parties and the wider public need to share a multicultural vision for their towns.

Services should be based where they will serve all communities to avoid duplication and promote cohesion.    [HPLGRC]

Lord Goldsmith's report 'Citizenship: Our Common Bond' was another attempt to confront lack of identity.

The Queen is to be wheeled on stage - like some deus ex machina to repair the social bonds which global-neoliberalism has trashed.   [MoJ]

The intended outcome - a sort of docile feudalism - would suit the global 'movers and shakers' very nicely. Forelock tuggers don't ask questions, they stick within the 'cultural' boundaries of News International and the corporate media, and go shopping. With the corporate plastic.    [CMMS]

A 'return to primordial loyalties' [PL] is an equally likely outcome.

Immigration Links:

Migrant builder took home £8.80 for a week
A casual injustice
Call for migrant housing rethink
Immigration is fine for the rich
Immigration is now making the rich richer and the poor poorer
'Labour costs are too high if I employ Brits'
New EU migrants may be eroding pay levels
The Forgotten Underclass
This land of opportunity must not close doors to migrant labour

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The War on Terror, 'Social Cohesion'
and the 'Pinochet Alternative'

The war on terror is all about 'primordial loyalties', in this case a fundamentalist religion which takes us back nearly a thousand years to the time of the Crusades.

It's Northern Ireland writ large. But it's also providing the necessary smokescreen for more government by the General Will, in support of the Washington Consensus.

Lord Goldsmith's variety of social cohesion might not deliver; in which case the apparatus of the war on terror - 42-day detention, a range of gargantuan databases - such as are 'needed' for ID Cards, the NHS, ContactPoint - might have wider significance.

Ostensibly, the need for all this 'security' legislation is all blamed on 7/7, but, as the IRA's mainland bombing campaign did not provoke a similar response, it's hard to go along with that line of argument.

Emulation of the US Homeland Security Department's policies might confirm the 7/7 theory, but, as many of the current databases seem unconnected with the 'war on terror', this argument also seems incomplete.

I tend to the view that this is actually the Pinochet Alternative to Lord Goldsmith's feudalist route to the acceptance of the neoliberal 'utopia'.

In sum, the implementation of the Washington Consensus actually requires a large active government intent on keeping the populace 'on side', masking the truth as far as possible, aided and abetted by the 'cultural' norms of News International, and Ray Bradbury's "Fahrenheit 451".  [451]

As in the Soviet Union, there is to be no withering away of the state, quite the reverse.

Those two utopian experiments - Marxism and Neoliberalism - end up as mirror images, in which a small powerful minority reaps all the rewards.

China is the permanent reminder of the reality of the 'successful' neoliberal state: a police state in which the tenets of the Washington Consensus come closest to full realisation.


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It's not bankers Labour is watching, it's you

Here's how things stand. The follies of the big banks have caused the steepest plunge in output since the second world war. The economy is showing signs of stabilisation, owing largely to emergency cuts in interest rates and taxpayers' billions being used to prop up a ­financial system on the brink of collapse. Unemployment is rising, and it is rising most rapidly for the blameless, not the wretched bankers.

Even before the recession began, incomes for those at the bottom of the pile were below the level of three years ago. The longer Labour has been in power the slower incomes have grown. Inequality is higher than under Thatcher. Child poverty has increased in the past three years and the public finances are shot to pieces.

According to the prime minister, we are now living in a different world. The crisis of neo-liberalism has ushered in a new age in which there is a new and more important role for the state.

That is true, but only up to a point. The state is rather keener on controlling the people than the markets.

The evidence for this? Well, in the past month, the Treasury has announced that it is "not persuaded" that the most profound financial crisis of the past 100 years should result in reform along the lines of the Glass-­Steagall act of 1933. This is a sensible idea that would cut the banks down to size and create a legal distinction between retail and investment banks ...

Read Larry Elliott in full

New Labour's corporate state
Guilty as not charged
Curse of the DNA register
'Intelligent policing'
Liberty
New powers proposed for security staff
N02ID
'Protint'
Safe in our cages
Snoop software makes surveillance a cinch -
'Snooper's charter'
The well of freedom is running dry
UK may store all phone calls and emails -
Unmanned spy planes to police Britain
We're all suspects now
Why I told Parliament: you've failed us on liberty

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The Spectres at the Global Feast

Neoliberalism has an addiction to growth. Without growth it would implode.

But governments - with more (borrowed) money than sense - share in the addiction, and believe that only by throwing mega quantities of cash - good money after bad - can the growth party continue.

The fact that growth cannot continue into some infinite future fails to register on the corporate radar.

Fox News dismissal of 'peak oil' [EaC] indicates that, as with climate change, so with resource depletion: denial is the order of the day.

Despite mounting evidence to the contrary, the multiplicity of threats to the neoliberal dream are beginning to coalesce, and the tipping point is the impact of biofuels on food and agriculture.    [ 'Biofuel caused food crisis']

The decision of both the US [CP] and the EU to tackle climate change by switching agricultural land to growing fuel for transport not only worsens both the food crunch and carbon emissions, it postpones the day when this fact will have to be faced: the current economy is unsustainable.

Eco Links1
Eco Links2
Guardian Environment
New Scientist: Climate Change

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Advocating Reform

Reform

A New Politics

Curbing the whips
Direct democracy
Empower the committee system
Holding the executive to account
Restrict the use of secondary legislation



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