Friday, December 10, 2010

People against Power

Violent strikes in France, the Wikileaks affair, Student protests in London - what’s going on? Do these apparently disparate events have anything in common? The media certainly treat them as entirely unconnected. Yet all three have at their core a common distrust and rejection of those who govern us.

A great deal of the current disaffection stems from the fact that politicians are making tax payers foot the bill for the near ruin visited on Western economies by corrupt bankers and financial speculators. Wikileaks has added to the discontent by revealing details of how governments flout national and international law, routinely lie to their own people and subvert the decisions of their own elected parliaments.

While it is too soon to characterize the present as a turning point in our history, we should not entirely dismiss the thought that we may be witnessing the first skirmishes in a prolonged struggle of the people against their rulers; a struggle between demos and plutos, between the citizenry and an unholy alliance of government and finance, between a people’s Democracy and a Plutocracy sugar-coated with a regular but meaningless electoral ritual in which faces may change but policies emphatically do not.

At first sight, such a conflict may seem ludicrously one-sided, with governments enjoying all the resources of state power as well as the backing of capital and big business. But the people have the advantage of numbers and an ability to attack from unsuspected directions - such as Operation Payback and the 500 and growing mirror sites for Wikileaks.

Rulers dislike and fear the populace; and for that reason, if for no other, we should never trust them no matter how earnestly they claim to act on our behalf. Shakespeare - who knew more about political life than most of us will ever learn - understood the relationship all too clearly:

MENENIUS: The helms o’ the state, who care for you like fathers....
FIRST CITIZEN: They ne’er cared for us yet: suffer us to famish, and their store-houses crammed with grain; make edicts for usury, to support usurers; repeal daily any wholesome act established against the rich, and provide more piercing statutes daily, to chain up and restrain the poor. If the wars eat us not up, they will; and there’s all the love they bear us.

Has anything at all changed since the Bard wrote those lines?

Monday, December 6, 2010

Peter Mandelson - How to be a Global Consultant

The media delight in bestowing nicknames on top politicians: Iron Lady, Grocer Heath, Two Jags, Prince of Darkness and so on - the latter being one of several disobliging epithets by which we have come to know the machiavellian figure of Peter Mandelson.

Baron Mandelson of Foy and Hartlepool is also widely known under the simpler, more innocuous rubric of “Mandy”. Curiously, he is the second person to enjoy recognition by this name, the first being a good-time girl called Marilyn “Mandy” Rice-Davies who, in 1963, became a key character in a titillating scandal - the infamous and tragic Profumo Affair - involving a government minister, a heredity peer of the realm, an osteopath, and a Soviet official.

In addition to their nickname, Ms Rice-Davies and Lord Mandelson share other attributes across the years: diligence in building an address book with names of the rich and powerful, a sense of how to exploit them, and an ability to arouse the prurient interest of press and public.

We do not need to be told why Ms Rice-Davies proved so fascinating: her attractions spoke for themselves. Lord Mandelson’s charms, on the other hand, may seem more elusive; that is until one considers the allure of power which can be every bit as magnetic as sex, especially when allied to a somewhat villainous reputation.

Villainous? Well why else would he be known as the “Dark Lord” - (yet another of his evocative sobriquets). Here is a man condemned more than once to Hades who, through a mysterious alchemy, has always managed to re-emerge vigorous and refreshed as if he had found nourishment in the barren wastes of obscurity where ordinary earthlings might expect to perish.

His first descent to that ignoble place occurred in 1998 after he failed to declare either to parliament or to his building society a £373,000 loan from fellow Minister Geoffrey Robinson. Mere mortals might well have ended up in court from that double pecadillo, while Mandy was merely put out to grass for a while in his subterranean feeding-ground.

Then, after his mate Tony Blair brought him back and gave him another ministerial portfolio, he was banished anew in 2001 for allegedly nudging a fellow minister to grant a British passport to an Indian billionaire.

Surely that was it for Mandy’s career in public life. But no. Again he resurfaced - led from the underworld by a Prime Minister determined to play Hermes to his Persephone. This time, Blair decided that Mandy was probably better off out of the country and despatched him to Brussels as “our” European Trade Commissioner.

What did Mandy know about international trade? Probably not much more than would occupy the backside of a postage stamp; but that hardly mattered. All he needed to fulfil his role was to answer ”free trade” to every question; after which he could get on with adding more filthy rich names to his address book.

He had not been long on the job before we learned that he was spending time with Russia’s richest man, Oleg Deripaska, on the latter’s super yacht off Corfu. By coincidence, Deripaska’s company - Rusal - had recently benefited from a lowering of European tariffs on aluminium, a decision allegedly sanctioned by “our” European Trade Commissioner.

When Gordon Brown mounted the political throne after Blair’s resignation, no one - least of all perhaps Brown himself - thought Mandy would reappear on the political stage. The two intensely disliked each other, didn’t they? Not enough apparently to overcome Brown’s fear that without Mandy he would lose the next election, nor Mandy’s unquenched desire for the robes and dispensations of office (one is hideously reminded of Lear’s acerbic comment that a dog’s obeyed in office).

After such impressive resurrections, a casual observer might wonder if Mandy truly does possess special faculties. By reputation he has a razor-sharp mind and near miraculous powers of electoral campaign management. Baffingly to this writer, the press seem happy to describe him as the cleverest and most competent cabinet minister of his generation, so clever, indeed, as to have signally failed in every ministerial position he has occupied while evidently leaving behind a quite opposite impression. Similarly, he basks in credit for the glorious New Labour victory of 1997 of which he was reportedly the architect, while escaping any responsibility for the subsequent decline of New Labour’s popularity and the disastrous campaign of 2010 which he oversaw.

Skill of a kind is certainly needed to take all available praise for success while avoiding any blame for failure; or if not skill, then perhaps a sublime indifference to the world beyond oneself. It took the dismal electoral defeat of 2010 to raise doubts about Mandy’s continuing value to Labour, and then a new leader to suggest that the noble lord might usefully consider a dignified retirement.

Not that anyone could expect a man of Mandy’s recuperative qualities to heed such advice. News that he is to embark on a new career as an international business consultant should come as no surprise. What might raise our eyebrows in admiration is that his brand new firm - Global Counsel LLP - has received backing from WPP, the media and communications giant headed by the brilliant, mercurial Sir Martin Sorrell. Let us note, in passing, that Sir Martin was recently appointed to David Cameron’s Business Advisory Group. At this elevated level of money-making, there’s no such thing as political affiliation: everyone, deep down, is a cross dresser.

What exactly do international business consultants do? Basically, they come in two varieties. The first - let’s call them the workers - help companies develop new business in other countries. They conduct market research, find plant locations, negotiate local regulations, raise finance, identify partners and senior personnel, source materials and other inputs, estimate investment requirements and profit expectations and so on. Given that Lord Mandelson has no experience in any of these activities, we may assume that he does not belong among the workers. Consultants of the second kind - let’s call them the aristocrats - essentially do very little. I was about to write “nothing” , but that would be doing them an injustice. Their principle occupation is in introducing business executives to politicians, and politicians to business executives; and their main instrument of work - in fact their only one - is that address book. It is not a very energetic occupation, but it can be very lucrative. This is because many of the world’s large contracts - for example, the building of power stations, or dams, or highways, or the supply of military hardware, are in the gift of ministers, potentates, kings, and dictators. Here we may picture Mandy in his element, conversing on the telephone with the Chief Executives of multinationals, rubbing shoulders with princes and their consorts at cocktail parties, dining with plutocrats in Beijing and Moscow - and offering not to secure deals, which would require perhaps too much effort - but to put them in touch with someone who can.

Mandy may expect to make a handsome living as this second variety of consultant. No doubt WPP will also benefit, though to what extent we may only speculate, for the doors that Mandy opens will remain closed to common humanity. We can only fantasize about what takes place behind them, just as tabloid readers of the sixties fantasized about the antics of Ms Rice Davies and her pretty pal Christine Keeler. There is a difference, however. Mandy Rice Davies was nothing if not transparent about her motives and her tastes, whereas Lord Mandelson, true to his nicknames, seems ever to dwell in the shadows, famous but not quite visible, like a spirit of the night.

Thursday, November 11, 2010

The Path to Underdevelopment?

Every year since 1990, the United Nations has published its Human Development Report,  a comparative survey of the world’s nations and peoples measured not just by income, but  also by education, health, life expectancy, literacy and so on. The number of measures and the sophistication of the analysis have grown over time, but the objective has remained the same, namely to chart improvements and sometimes - sadly - declines  in human development.

The report’s narrative focuses primarily on the Developing World; but the statistical underpinning embraces all countries and is presented in the form of a table -  the Human Development Index (HDI)  -  in which each country appears in rank order of developmental success. The different components of the HDI  - income, education, health etc. - are also presented in rank order so that readers can identify how well or poorly countries have performed in these sub-categories.

Anyone hungry for a counterbalance to the bombastic notions of politicians and ideologues who increasingly dominate our economic discourse will find nourishment here. UK readers, however,  regardless of political stripe, may find some of the fare unpalatable. Here’s why.

 In the first year of the Report - 1990 - the UK placed tenth overall in human development, behind Japan, Sweden and Canada - amongst others, but ahead of West Germany, Italy, Spain and the USA. Twenty years later, in 2010, we have fallen to 26th position, behind not only these four countries (including a united Germany) but also Israel, Korea, Hong Kong and Greece. Moreover, unlike most of our European neighbours, our relative trajectory has been firmly downward:
Much of the UK’s current status has been sustained by the growth of national income - fuelled in part, as we are learning to our cost, by public and private debt.

Take out income from the equation and the picture becomes even more disquieting. We manage a 26th position for health - hardly glorious in view of our much-vaunted NHS; but for education - the mantra of the Blair government and now under blistering attack by the Coalition - we have sunk to 37th, behind - among other nations - Rumania, Poland and Uruguay. The graph below compares the UK’s performance with that of three Latin-American countries - all of them with left-wing governments of which our political classes and our mainstream media make a point of disapproving:
What the HDI suggests is not simply that the UK is being overhauled - which could be a positive development if other countries were joining us at our high level - but that since around 1995, we have been in a process of decline.

How has this happened? One reason may be that the last fifteen years have coincided with a massive privatisation of our public sphere, and the wholesale delivery of our economy to the neo-liberal Washington Consensus.
What we have witnessed during this period is a withdrawal of Government from its traditional role of fostering the nation’s health, education and general well-being, and the contracting out of those responsibilities to the private sector.   The Coalition’s recent decision to disinvest in Higher Education and its equally disgraceful plan to sell the nation’s forests  are merely the latest insults to our already ragged social fabric.

We should also recognise that the hectoring, authoritarian approach of the Labour Government to educational “standards”  has been a manifest failure. What could not be privatised has been bureaucratised into inanition.

Over the last 100 years, the UK has led the world in many things. Radar, aircraft jet engines, the pocket calculator and the World Wide Web were all invented  by citizens of these islands. Time was when much of what we consumed in this country we also made here.

Now almost everything comes from elsewhere, including most of the industrial and electronic engineering that once fed our prosperity. We have been pioneers in the hollowing out of UK industrial creativity and the delivery of the nation to financial speculators.

Before long we may earn recognition as another kind of pioneer: the first country of the modern world to sink back into Underdevelopment.

Tuesday, June 29, 2010

Football, Failure and Laissez-faire

Fabio Capello remarked some time ago that less than 40 per cent of the players who feature regularly in the Premier League qualify for selection to the England squad.

Accustomed to seeing more foreign stars in the Premiership than home-grown ones, we have also in recent years grown used to foreign managers taking charge of our clubs: - Arsène Wenger, Carlo Ancelotti, Rafael Benitez, Jose Mourinho, Avram Grant, Gerard Houllier, Gianfranco Zola and so on.

Top football clubs, the traditional incubators of national excellence, are now primarily commercial businesses. Their first objective is to make money for shareholders. If there  is a dichotomy between the emotions these clubs arouse amongst fans - which are essentially local and tribal - and the demands of capitalist enterprise - it disappears when it comes to winning. Fans and owners alike are happy to have success purchased rather than built.

The rationale is easily framed in the form of a question. Why develop local expertise and skill - which takes time, dedication and the risk of “failure” - when you can buy ready-made brilliance on the world market?

Nothing, perhaps, more clearly demonstrates the denationalization of the game than the passing of so many famous clubs into foreign ownership. Half of the Premier League’s twenty teams are now in foreign hands, including Chelsea, Liverpool, Manchester United, Manchester City and shortly - if media reports are accurate - Arsenal.

The unwritten neo-liberal bible tells us that this is the way to produce the best of all possible results in the best of all possible sporting paradigms.

That the model doesn’t satisfy the larger pretensions, hopes and aspirations of the nation is irrelevant. Or rather, according to the laissez-faire template we have inherited from the Thatcher-Reagan years,  it offers - like a linear programme - the least worst outcome, even if at times of national defeat we may think otherwise.

What has happened to football has also occurred in the wider economy, of course.

No significant nationally-owned car manufacturer remains. We have all but closed UK shipyards. Our aircraft industry is a pale reflection of what existed fifty years ago. We no longer make our own clothes, refrigerators, televisions, telephones, trains, computers, printers, footwear, sports equipment. Most of our pottery and tableware is imported; and much of our food too.

Those who lament the passing of UK industry into external control point out that we are still a major exporter of manufactured goods. This is true, but it wholly misses the point.  Manufactured products exported from this country come largely from assembly plants, not from centres of creative industrial enterprise. Assembly plants merely put together products designed and engineered elsewhere - often with imported components. Just like football, we no longer invest long-term in the skills and know-how needed for national success. The world’s innovators, the engineers, tool and die makers, industrial designers, increasingly reside elsewhere - most notably in those countries that have eschewed laissez-faire to a greater or lesser extent in favour of managed trade and economic development policies.

Countries that exercise more care about ownership of their industrial profile (Germany, Netherlands, Denmark, India, China, Brazil  among them) also tend to be the strongest swimmers when they find themselves plunged in the forbidding waters of an international recession.

Similarly, those with few foreign players in their domestic football competitions - the South Americans are prime examples - have little difficulty putting together first class national teams.

Footballing beneficiaries of the neo-liberal model consist of a clutch of over-paid players many of whom make their fortune here while returning home to foster their country’s success on the international stage. 
Another, stranger kind of beneficiary has also emerged. In a fascinating manifestation of material decadence, a select few clubs have become the trophy playthings of billionaires. World-wide, there may be many thousands rich enough to acquire a trophy spouse. But to own a Premier League football club - now that is really something. Short of owning a country, English Premier League clubs are arguably the costliest toys in the known universe.

The solution for English (and UK) football - and for our industrial and economic vitality - is to reduce foreign participation in the game. As far as concerns football, that won’t happen until our Premier clubs enter the final lap of their race towards financial ruin. How long that may take is anyone’s guess, but  by some accounts they are well on their way.

Perhaps our national economic profile will follow the same course - ineluctable decay followed, we may hope, by a revival of the creativity and entrepreneurial drive that inspired our first industrial revolution. We should not, however, hold our collective breath, for we have not yet reached the bottom of the hill. Revival, moreover,  is far from assured, and the second time round - should it occur - will require us to stand on our own feet rather than on the backs of  peoples who right now may well be contemplating the pleasure of standing on ours.

Tuesday, April 27, 2010

A word about the UK Economy

The prevailing neo-liberal ideology to which the UK is wedded rests on the idea of completely open borders to trade and capital flows. It is a dog-eat-dog world that places market competition as the prime motif of economic policy-making. Companies are free, even encouraged, to have their products made wherever it is cheapest to do so and to export them into the UK rather than have them manufactured locally.

Countries with the lowest production costs are invariably those with low-paid labour, poor educational and welfare standards and non-existent pollution controls. So while we import cheap manufactures, we export, free of charge, our responsibilities for the welfare of employees and for the environmental impact of industrial production.

The weltanschauung also demands that companies redefine themselves as commodities, as if they were the same kind of substance as potash or sugar. National corporations, no matter how vital to our industrial profile, should be available for sale and thereafter moulded to suit the ambitions of owners who live elsewhere and have no stake in the welfare of the founding country or its citizens.

One obvious result of this economic paradigm has been the denationalization of UK manufacturing industry which - unsurprisingly - now only accounts for 12% - 14% of GDP,  down from over 30% in 1970.

Expenditure on R & D - the handmaiden of industry and catalyst of innovation - has likewise fallen dramatically compared with other so-called industrialized countries - and so has the UK’s trade balance in goods.

R & D has faded at least in part because we no longer own most of our major manufacturing base. Innovative effort tends to take place at headquarters - not in foreign-owned assembly plants or in the offices of wholesale importers. Japanese plants in the UK, for example, conduct almost no R & D. With the sale of so many great UK companies, the bulk of our work force has been deskilled with barely a murmur of protest, while politicians blithely ignore the evidence - demonstrated in the above table - of our poor performance.

Both Labour and Tory soothsayers dismiss the decline of UK-owned manufacturing by claiming that the service sector and the ‘knowledge economy’ will henceforth be our main engines of growth.
Except for financial services and tourism, however, most of the service sector does not generate wealth; it merely redistributes existing resources. And the jobs created are usually low-paid, semi-skilled, relying more often than not on government expenditure to survive.

The ‘knowledge economy’ equation rests on the fantasy that somehow we will be able to compete through excellence in design and innovation while the rest of the world remains content to manufacture products for our consumption. Keen-eyed readers will spot the contradiction. An economy dependent on low-grade service jobs is unlikely to have the wherewithal to command the heights of technological innovation. Nor are countries like China and India going to cede the territory to us, just because our politicians say so. On the contrary; with the manufacturing base at their fingertips, they will be almost inevitably become innovators as well. Given the current commitment of our politicians to the neo-liberal economic model, it is not wholly irrational to wonder whether we might be in the first stages of progressive underdevelopment of the kind that happened to other centres of excellence in the past, like ancient Egypt, Greece and Rome.

What has been the effect of UK economic policy on incomes? At first glance, the statistics seem reasonably positive. With the exception of 2008 - 2009, real wages appear have risen over the last decade

But if that is true why do so many people feel they are treading water?  The answer is slightly complex. Inflation was certainly kept in check during most of the past decade - largely through the importation from low-cost countries of cheap food, clothing, footwear, electronics and other modern ‘essentials’. This, by the way is the source of Gordon Brown’s famous boast about the end of boom and bust. Where inflation showed itself, however, was in ‘goods’ that couldn’t be imported, of which the most important and obvious is property. House prices where I live, for example, have risen five fold over the last dozen years - against an average wage increase of about 15%. That is a staggering difference.

How can it be that house prices rose so much faster than wages? The answer lies mainly in the amount of money available to buy them. It is not wages that have risen astronomically but debt.

During the boom that led to the current crisis, many will recall receiving countless offers of loans through their electronic or physical mail box. We should remember that under a Fractional Reserve Banking System  - which is what we have - every time a bank makes a loan it effectively creates new money and thereby increases its own assets. Granting loans was good business for the banks, and securing one became scarcely more arduous for the applicant than buying a sofa.  Many people took the bait. Private indebtedness soared, and with so much debt money sloshing around in the economy, property prices shot through the roof. Other “unimportable” costs rose as well, like education and health care, though health costs were partly attenuated by the “importation” of nurses from elsewhere and by contracting out cleaning and janitorial services to companies using low-cost immigrant labour. In other words, the underlying inflationary pressures in the economy only showed up in certain “immobile” sectors. Elsewhere they were disguised by cheap imports both of goods and labour.

Who has benefited from the UK’s neo-liberal version of globalization? Answer: bankers, financiers, major business owners, commodity brokers and corporate executives. News that the UK’s richest people enjoyed a massive increase in their wealth last year should come as no surprise. The present economic system foments the concentration of wealth at the top. Mega profits are the wages of a system in which capital is free to go where it will regardless of the effect on national economies and on the local labour force.

Let’s return for a moment to those loans. On both sides of the Atlantic we have long been sold the idea that a dignified life includes ownership of our own home. To borrowers who couldn’t muster an initial deposit, many of whom were unemployed or in low-paid employment, lenders - notably in the United States - began offering mortgage loans of 100% or more of the value of the property. They knew these loans were risky, so they charged borrowers a high rate of interest to reflect the risk level - thereby making monthly payments even more difficult and unlikely. Then they bundled these risky loans up with others that seemed a little less risky, tied them with plenty of string, and sold them as solid “securities” to other organizations with the promise of a steady income stream from the very attractive rate of interest being charged. All entirely legal - and fundamentally corrupt. Then began the chain reaction. Borrowers defaulted because they couldn’t keep up with their payments, and when the banks repossessed the properties they found that the market for them had shrunk and their value had plummeted. Meanwhile, the organizations left holding those parcels of high-value securities - RBS was one - suddenly discovered that the contents consisted of nothing but cool air.

How easy it is to forget that behind every loan default and property repossession are impoverished lives, people made homeless because they bought the dream of economic independence and discovered that the system itself made the dream impossible. The current financial crisis is not an aberration that can be addressed by a few changes in the banking regulations. It is a precise function of the neo-liberal model.

How have other countries approached the issue of western-style globalization? Many have taken it with a large pinch of salt. German nationals have retained ownership of a substantial proportion of their manufacturing base - and as a result Germany has remained an important source of technological innovation as well as one of the world’s largest exporters of manufactures.

In France, government regularly intervenes to prevent foreign takeovers of key industries. Denmark and The Netherlands have put huge resources and effort into horticulture and agroindustry - sectors not conventionally associated with high-tech but which demand as much scientific, engineering and managerial know-how as many of the more glamorous ‘knowledge’ activities. Selective protectionism has remained a part of economic policy.

China meanwhile, has taken a different route - ignoring the western neo-liberal model altogether and conducting a highly-managed industrial and trade strategy that includes exchange-rate manipulation as well as state oversight of foreign investment in China and Chinese investment elsewhere.

What does all this mean for the UK? That is precisely the question  our three main parties have studiously avoided in the run-up to the election. Both Tories and Labour are irrevocably wedded to neo-liberalism, while the Lib Dems watch placidly from the sidelines apparently afraid to comment. None of them seems inclined to question, let alone reverse, the laissez-faire trajectory on which we are embarked.

Yet if we are to avoid a future of ineluctable decline, we will have to tackle the issues of re-industrialization, R & D, and the need to start making things once more for ourselves. We will also have to face the implications - as even Peter Mandelson has finally understood - of allowing our industrial base to fall into foreign hands.

Tuesday, March 23, 2010

A Grumble about UK Economic Policy

Nowhere is the idea of consumer choice more absurd than with schools and hospitals. A choice of schools can only be meaningful if some are "inferior" - and therefore unpalatable; while the idea of choosing a hospital when we are sick presupposes that we are in a position to distinguish between available options - something that would lie beyond the expertise of most of us even when we are not sick. What, I suggest, we would prefer are good schools and good hospitals so that choice is rendered unnecessary.

But these are not the only absurdities of modern capitalist theology. Another is the idea that corporate efficiency is always compatible with national or regional economic efficiency. In fact, the two are different and, in many cases, mutually exclusive. In a capitalist economy it is always efficient for the firm to produce at the lowest possible cost - and its techniques for doing so include maximizing sales, reducing labour costs, and externalizing social costs. But it is not economically efficient at the national level for people to buy superfluities (and create the associated waste), nor for a nation to cope with employment instability, the displacement of small farmers and business-owners by multinationals, the ravages of industrial pollution, and the societal disruptions that accompany extremes of inequality. Inequality itself is arguably a spur to capitalist enterprise, but it is also a charge on the social fabric. Investment banking, and currency and commodity markets can net vast rewards for a few businesses and individuals, but they often do so by devastating vulnerable populations and, as we have recently seen, inflicting significant harm on national economies.

One of the most interesting ways in which companies externalize their costs is by laying them off on their own customers. Banks, for example, have been closing branches not a result of a loss of clientele but as a cost reduction measure; and the direct result can be measured in longer queues and more waiting time for customers. A similar effect can be noticed in the widespread practice of imposing multiple layers of alternative "choices" to customers trying to make a telephone enquiry, at the end of which, as often as not, they are invited to call back because "we are experiencing a large number of calls". Practices such as these are a means of transferring costs from the firm to the customer - making them wait for a service that "efficiency" suggests they should receive well...efficiently.

Recently while waiting in a bank line-up, I made a stab at estimating the value in lost working hours to the UK economy if my own waiting experience were representative of that of bank customers in general. The sum came to £320 million per year based on a modest average labour value of £20 per hour.

A couple of weeks later, I found myself making a similar calculation for time wasted trying to get BT to resolve a broadband issue. In this case I spent a total of just under four hours on the telephone over two days (including time "on hold") and spoke at length to no less than five different people. My estimate of the value of the time lost projected onto the UK population as a whole came to £1.5 billion - not including the cost to BT of having five staff members involved of whom four proved unable to help.

These are tongue-in-cheek calculations, of course. But could they also be food for thought?

Friday, January 22, 2010

Idealism, Politics, Uruguay

A small country in a region generally ignored by the anglo-saxon world is undergoing a remarkable transformation. Five years ago, for the first time in its history, the people of Uruguay elected a socialist government and a left-wing president, Tabaré Vásquez. They came to power with an idealistic mission not just to raise the general standard of living of the people but to institute a series of social and economic reforms that would both strengthen their democracy and fundamentally improve their quality of life.

At the heart of this mission - which to outsiders may well have seemed naively ambitious - was a plan to ensure that Uruguyan children had access to the same educational and informational resources as the most privileged children of the so-called First World. With this in mind, Vásquez announced at the end of 2006 his Plan Ceibal - to give a free laptop equipped for internet access to every child between the ages of 6 and 12 ..."so that each of them is not only equal in law but equal in opportunity".

Just under three years later, as Uruguayans were preparing to elect his successor, President Vásquez completed the task by personally handing a laptop to the 6-year-old who stood last in line. Every school child in Uruguay now owns a reader's ticket to the vast library of human knowledge and learning offered by the World Wide Web.

Don José Mujica - Uruguay's new president elect - belongs to the same left-wing coalition as Vásquez - the Frente Amplio - and he has made clear that he intends to make the same commitment as his predecessor to education, social welfare and justice.

Most of us have heard politicians voice similar intentions, and we are familiar, too, with their subsequent failure to carry them out. What makes Uruguay different, is that these apparently utopian dreams are being implemented - not in half-measures but fully, openly and with the participation of the people.

Uruguay's new president has a remarkable and colourful history. He is a former member of the Tupamaro movement - an armed revolutionary group formed in the 1960s. Apprehended several times, he spent nearly fifteen years in jail - where, in addition to being tortured, he was confined for two years at the bottom of a well. He was finally released after the restoration of democracy following the military dictatorship of 1973 - 1985.

In appearance Mujica could could scarcely look less like a guerrilla fighter or even a national leader. He never wears a tie and rarely a suit, and one could easily imagine him as a retired school teacher or bus driver spending his time chatting in a local café or dozing over a newspaper on a park bench. When he speaks, however, one becomes instantly aware of a quiet but deeply impressive charisma, and intelligence of a high order. His style is simple, his voice, tone, vocabulary those of the man and woman in the street. In every conceivable sense he appears as one of the people.

A speech he made to a gathering of intellectuals shortly after his triumph in the polls is as deeply inspiring in its own way as Obama's victory address to the US nation a year earlier. In it he lays out an Athenian vision - not of a country where citizens are offered a banal series of consumption choices, but of one where everyone is empowered by the quality of their education to lead fulfilling lives and to participate in the well-being of the nation and of their fellow citizens.

One senses that Uruguay is breaking new ground, and that if the country continues to travel the road on which it is now embarked, it will likely emerge in twenty years time as the Switzerland of the southern hemisphere: at once the most deeply democratic, technologically dynamic and culturally creative nation in Latin America.

In the anglo-saxon West, with our usual hubris and contempt for poorer nations in distant parts, we will probably refuse to see the lesson offered by this small country. Instead, as likely as not, we will watch in mild bewilderment as it scoots past us on the UN Human Development index. And then we will settle back to the petty squabbles of party politics, and the vacuous blather of political leaders who have long since traded in whatever idealism and principle they might once have possessed for the chintzy accoutrements of office.

Thursday, January 21, 2010

Obama, the Crisis and the American Dream

Most of us were too thrilled by Obama's victory to worry about how he would perform. From the outset, as his choice of key cabinet members clearly demonstrated, he showed a lack of conviction about what he wanted to achieve: Clinton at State, Geithner at the Treasury, and Gates at Defense. Gates, of course, was CIA Director under Bush, Geithner comes straight out of Wall Street, while dear Hilary is nothing if not "old Washington". At a moment when Obama had a chance to blow some fresh air over the Potomac, he inhaled the stale DC air instead.

His dithering over Afghanistan and backtracking on key elements of health care reform once again show an absence of decisive leadership and maybe even of genuine political conviction. There is an old saying that it's better to die on your feet than live on your knees; but on health care in particular, Obama appears to have dropped to the floor as soon as the GOP shook a fist at him.

But where Obama - and indeed the US - are truly in a hole is with the economy. The flaw in the American version of capitalism lies buried in the heart of the American mythology about itself: that everyone can "make it", that individuals are responsible for their own success or failure, and that government should keeps its hands out of people's pockets and its nose out of their affairs. The US system is the best because - well - it's the best.

Unfortunately, international comparative statistics tell a different story. Social mobility in the US is among the lowest in the developed world (the UK's record is, if anything, even worse); and the US is at the bottom of the developed country list for life expectancy and infant mortality. Most people, in other words, don't "make it". Nor are they great at looking after themselves. Low educational standards is another US "achievement".

Meanwhile, and perhaps in the long term even more important, the neo-liberal, laissez-faire economic model has not only hollowed out industry in the US by fostering the flight of production facilities to low-cost areas of the world, but it is proving defenceless against the state-guided, protectionist capitalism of China and some smaller eastern countries. Much of the West's decline has, until recently, been masked by the availability of cheap imports (thereby disguising the relative reduction in quality of employment and in average remuneration) and the massive financial profits generated by Wall Street and the City. But the current recession, the gargantuan greed of western bankers, and the West's huge indebtedness have torn away the mask to reveal a sickly visage.

The US is very far from moribund, but she is unquestionably in trouble and her citizens are palpably angry about it - hence the voter volatility in the Massachussetts senate race. Ironically, voters want Obama to get the country back on its feet even though many of them don't believe government should be involved. They want health care fixed only if it comes tax free, and while they are wedded to laissez-faire, they want the bankers reined in and maybe even punished (unless punishment means more government in which case - maybe not). In a nutshell the problem isn't government involvement but the American weltanchauung.

What the country needs, one suspects, is a reevaluation of its sclerotic economic model, a searching re-examination of its collective myths, and a far more courageous administration in the White House.