Monday, December 9, 2013

The Meaning of PISA

OECD’s Programme for International Student Assessment (PISA) tests 15-year-olds on their knowledge of reading, maths and science. Publication of the latest test results has raised much alarm in the UK - and in other countries that we think of as “advanced” - because our students seem to be flat-lining  in a world apparently being overtaken by the likes of China and  the Asian Tigers. Some of the dismayed rhetoric emanating from the Education Secretary has sounded eerily like an updated version of a terror known in the late nineteenth and a good part of the twentieth centuries as the “yellow peril”, namely that the West was about to be overrun by hoards of ill-intentioned folk from the Far East.  Ghengis Khan, thirteenth century founder of the fearsome Mongol Empire, provides the proto-type.
“Do PISA scores matter?” was  the introductory topic  on  BBC’s December 5th edition of Question Time.  All three politicians on the panel concurred that they do, along with that self-important purveyor of prejudice Nick Ferrari (formerly of Fox News,  deviser of  Topless Darts  and the News Bunny - you get the picture).  Professor Mary Beard, sole educator on the panel, found herself alone in questioning the validity of PISA scores; but though she was clearly the most knowledgeable of those present, she was also the least articulate, possibly because she was less accustomed than her fellow-panelists to the soundbite world of instant opinion. Even though her intervention may have lacked impact, however, its thoughtfulness  provoked me to dig a little deeper into international educational comparisons.
Finding PISA sceptics proved easier than I expected.  A  Huffington Post article by Diane Ravitch, professor of education at New York University dismisses international test scores as worthless. While the US  has never been first in the world, nor even near the top, on international tests, Ravitch claims, it has done pretty well economically, and in terms of scientific invention and business creativity - in fact better on many measures than any other nation. She bases these assertions partly on her own observations but more on a paper by Keith Baker, a retired researcher at the US Department of Education, entitled Are International Tests Worth Anything?.
Baker’s  paper begins with his main conclusion: “...for the top dozen or so most-advanced nations in the world, standings in the league tables of international tests are worthless.”  He then goes onto analyse how well the First International Comparison Study (FIMS) - administered in 1964 to 12-year-olds in 11 countries - predicted national success in the first decade of the 21st century. [1] That he focuses his analysis on the US should not concern us unduly since of the eleven country participants in the 1964 FIMS, US students came second last, just ahead of Sweden.
Politicans wringing their hands (or gloating) over their nation’s PISA performance tend to think in simple terms of economic growth. Baker goes both deeper and wider. His measurements cover Wealth Creation, GDP growth, Productivity, Quality of Life, Democracy, and Creativity; and his results do not simply cast doubt on the validity of international comparisons of student performance, they are in some cases, starkly counterintuitive. He demonstrates convincingly, for example, that “the higher a nation’s test score 40 years ago, the worse its subsequent economic performance”.
In an analysis of a more recent PISA exercise incorporating 27 countries,  Bakers reaches similar conclusions :”...the nations that scored at the PISA average generally outperformed those scoring above or below average….   Mediocre test scores correlate with better, more successful countries than do top scores (or lower scores)”.
Rather than worrying about PISA, Baker argues, policy-makers would to better to concern themselves with issues that UK readers might recognise:  “run-down schools in the nation’s inner cites, misdirected parental interference in schools, …. the lack of parental and administrative support for teachers.” ...and assisting students to pursue the dreams and ambitions that really matter: life, liberty and the pursuit of happiness.[2]
Cambridge economist Ha-Joon Chang comes to a remarkably similar conclusion about education in his entertaining “23 things they don’t tell you about capitalism”.  In Thing 17,  subtitled “More education in itself is not going to make a country richer,”  Chang provides a plethora of examples to illustrate the point. Education is valuable, he maintains, not for raising productivity or GDP, but  for helping us to “...develop our potentials for living a fulfilling and independent life.”
The table below offers a comparison of selected countries by PISA score,  Nobel prizes (as a simple proxy for intellectual creativity) and GDP per capita. In the first of the two Nobel columns, I have counted solely Nobel prizes awarded since the beginning of the century so as to allow for the recent developmental advances that have occurred in the Far East.  The second column accounts for all Nobel prizes as a proportion of each country’s population. Israel and Finland are included on account of their reputation for educational quality.

Clearly the countries with the worst PISA scores are those with the most impressive  Nobel record. Equally significant, the correlation between PISA performance and GDP per capita is, as both Baker and Chang suggest, rather weak (less than 0.5).  Admittedly, the GDP comparison does not allow for a dynamic element of growth; but it does suggest the enormous distance China still has to travel in order to achieve a GDP per capita level similar to that of the “developed” world. Rather than fearing China’s progress we should be urging her on as well as applauding the achievements of countries like Korea and Taiwan that, in economic terms at least, have already reached the promised land.
Education Secretary Michael Gove has given no sign that he might be aware of the ambiguities inherent in PISA comparisons. What he has evidenced repeatedly - as Seamus Milne outlines in a corruscating critique - is a remarkable degree of political incompetence allied to an uncritical belief in his own genius, characteristics that would make him a figure of fun were his role in public life less important. On hearing him speak, I find myself irresistibly drawn to the thought that he might be an incarnation of Thomas Gradgrind, Dickens’ teeth-grinding, flint-hearted headmaster, for whom all that matters in life are “facts and calculations.”  Gove’s own words suggest he would probably welcome the likeness. Were he alive, would Dickens despair at this re-emergence in the flesh of what he had satirised on the page?
We should not be surprised then that Gove interprets the PISA results as indicating national failure. Rather, he gives the impression of relishing what he considers to be evidence of our scholarly mediocrity because it provides ammunition for his assault on two of his pet hatreds: state education and the Labour Party. Naturally, in the Education Secretary’s smug universe, the excellence of teachers, which he is ever quick to note for fear of an unwelcome riposte from the profession, is entirely a consequence of Tory (meaning his) policies, whereas our PISA results are a product of Labour ineptitude.
Among the current crop of parliamentarians, Gove is far from alone in preferring facile opinion to critical thinking. Today’s politicians would doubtless all claim to be well educated. Yet  in the matter of PISA, as in so many other matters, most display a remarkable lack of curiosity about the data they are fed. What might cause us to doubt the quality of our educational system  is their apparent inability to apply their minds to anything not addressed in their Party instructional manual. If at some stage they were trained to think for themselves, they seem to have deposited that faculty at the door of Party Central Office - hoping perhaps to pick it up when they retire and not realising that brainpower left in storage tends to atrophy for lack of exercise.
“In science,” Einstein once remarked, “Imagination is more important than knowledge.” [3] Gove and many of his fellow parliamentarians appear to believe the opposite. Readers may judge which of the two is more likely to be right.

[1] He justifies the choice of decade  on the grounds that  “Today’s world is largely a world created and operated by the now 55-year-old FIMS generation”
[2] It is worth emphasizing that Baker does not claim (and nor do I) that educational standards and scores within nations are not valid and useful.
[3] Interview with George Sylvester Viereck, Saturday Evening Post, October 26, 1929

Moorfield and the NHS

A year ago I developed an unsightly lump on my left eyelid. At first, I thought it was a stye but when, after a month, it was still in place I consulted my doctor. He told me it was a chalazion cyst caused by a blocked tear gland, could last as long as six months but required no treatment. It lasted seven. Two months later it re-emerged in the same place, larger than ever and this time with a slight but discomforting addition of pain and blurred vision.
Further back in time, when I was living in Mexico, I was a regular dinner guest at my girlfriend’s family home. Other guests would often be present, one of whom, an elderly uncle, had a habit of launching on one of a seemingly infinite store of anecdotes with the phrase “Cuando yo mataba a la gente…” which roughly translates as “In the days when I used to kill people…” It took me a few dinners to inquire - nervously and in the uncle’s absence - whether I had correctly understood the meaning of such an alarming prolegomenon. When the initial burst of laughter had given way to appropriate sobriety, I received an explanation.  Uncle Luis had been a doctor but had ceased to practice while still a young man because his beloved wife had fallen seriously ill and he had been unable to save her. He had thereby concluded that doctors do more harm than good and people should stay away from them - a view that Moliere the great satirist of the medical profession might well have approved.
It is perhaps under these twin influences - the one literary the other experiential - that I have tried to steer clear of serious engagement with doctors, and though  my efforts have not always been successful, I am only too happy to find reasons for ignoring their counsel or simply not seeking it. Armed thus with my doctor’s original advice, namely to wait it out, I opted this time not even to bother him with a visit. I would simply do nothing.
So matters would have remained had an old friend who had suffered a similar problem not advised me to pay a visit to London’s Moorfield Eye Hospital.
“They cured me in no time, “ she said, adding by way of reassurance for my pocket that Moorfield is NHS and I wouldn’t have to pay.
At first I demurred on the grounds that I would have to get a referral from my doctor and then wait for months for an appointment.
“No, you just walk in.”
“You might have to wait, but they’ll see you for sure.”
My partner  plus a couple of other friends were listening to this conversation and now, with one voice, they urged me to seek treatment. What after all had I got to lose?
My reluctant answer: nothing very much.
So I followed the advice and, one Friday morning last September, walked into Moorfield Eye Hospital unannounced. To my surprise, the receptionist treated my sudden appearance as perfectly normal and directed me to the out-patient’s department where, after a ten-minute delay, my details and the purpose of my visit were noted and I was directed to an adjacent waiting area where some twenty others were already seated. I had brought the Penguin edition of Boethius to console me during what I was sure would be a near eternity of enforced faineancy, but had barely had time to read through the opening verses  of Book 1 before being interrupted by a nurse who bore me away for a preliminary assessment of my state of health. Then came a second period of waiting in a different area, before I was once again led away, this time, for an eye test. Third and fourth episodes of waiting and examination followed - each in a different location of the out-patients’ department whose layout is sufficiently bewildering to dispel any confidence the uninitiated might entertain about their navigational skills. This first visit lasted for about four hours, long enough for my sense of direction to abandon me entirely so that, despite a respectable amount of signage, I had to ask for directions to the exit. Nevertheless,  when I finally made my way out, I carried with me, in addition to  the news that I would need minor surgery, a brace of appointments, the first for a preliminary medical check-up, and the second for the main event.
The last of these took place a few hours ago and I am now  seated before the computer, minus an unpleasant cyst and with a very large patch over one eye, held in place by numerous lengths of white tape which I am instructed not to remove until the morrow. En route home, I felt like the very incarnation of Dickens infamous headmaster of Dotheboys Hall  because,  in addition to having only one (visible) eye, the blank side of my face was much wrinkled and patched up, which gave me a very sinister appearance, especially when I smiled.
None of that matters, of course.
What does matter is that the manner in which all the staff of Moorfield Eye Hospital dealt with me could not, in my view, be bettered. The organization works not so much like a well-oiled machine - for machines are impersonal  and can offer no tenderness or humour, still less awareness of pain - as the epitome of what one imagines a hospital should be: a place where skill, compassion and efficiency combine in the service of the people. This is the same, magnificent NHS that is odiously hounded by the right-wing gutter-press and repeatedly traduced by Tories bent on breaking it up and delivering the pieces to private profiteers. Both have seized with delight on the problems at Stafford Hospital, thereby fostering the patently false idea that it represents the NHS as a whole. By contrast, when it comes to awarding fat contracts to the private sector, our coalition government studiously avoids drawing a generally adverse conclusion about  the likes of G4S and Serco, companies under scrutiny for over-charging the government and false accounting.
Before embarking on my recent brief experience of the NHS at Moorfield, I harboured no small degree of scepticism, if not about the level of expertise, then certainly about the waiting times, bureaucracy and quality of patient-care I would encounter. Instead,  I have come away proud and grateful to live in a country capable of offering such exemplary service to someone who, literally, walks in off the street. In a world that continues to be driven by crass neo-liberal values, NHS is something rare and precious. We must do all we can to keep it; and if, by the next election, it has been largely sold off, then we must fight to take it back.

First published by Open Democracy.

Wednesday, September 4, 2013

Imperialism without clothes

David Cameron “gets it”. He respects the will of parliament and the views of the public at large. There will, therefore be no UK involvement in military action against the Syrian regime.
On the other hand, word from Downing Street has it that Ed Milliband is a “copper–bottomed shit”; and from Michael Gove that the Tory and Lib-Dem rebels are “ a disgrace” Evidently, the will of parliament is not so worthy of respect as the prime minister pretends. As usual, the nastiest and loudest vitriol comes from the Right.
Such childish tantrums are, perhaps, what we must expect from the callow young people who rule over us, most of whom have long since grown accustomed to getting their own way. So accustomed, in fact, that on recalling parliament a couple of days early the prime minister took it for granted that the governing Coalition - and possibly Labour too - would give him the licence he sought to pursue the course of war.
When Tony Blair got to his feet in parliament for a similar purpose ten years ago, he at least felt it necessary to offer a compelling case. His speech, however deceiving in content, was nonetheless a tour-de-force of rhetorical virtuosity. Cameron’s, by contrast was numbingly pedestrian, loud and clear-voiced to be sure but strong on bombast and sonorous outrage, flimsy of content and devoid of any genuine direction by moral compass. Milliband’s response, though less fluent (he has a distressing tendency to repeat words and even whole phrases as if he is not sure whether anyone is listening) at least offered a semblance of coherent thought as well as political awareness of the desirability of learning from the UN weapons inspectors. He was, of course, correct in saying that the recall of parliament could only have been to obtain immediate approval for military action.
The interplay between the Coalition and Labour offered a depressing reminder of the bovine partisanship of our parliamentarians.  Commentators have noted that the government motion and the opposition amendment  were not so different in purpose and content as to be irreconcilable.  Gripped by mutual antagonism, however, nothing - least of all the “national interest” -  would have induced either to vote for the other. As a consequence, both motions flopped. But it is worth noting that had the Tories held their collective nose and approved the Labour amendment, we would now be holding hands with Obama and Hollande and readying ourselves for another perillous Middle-East adventure.
Much hand-wringing has followed the negative vote.  Are we no longer prepared to intervene wherever wrong-doing occurs?  Are we retreating into isolationism? Is the “special relationship” at an end? What if the master casts his unprofitable servant into outer darkness? Well, a mere decade ago, the French were “cheese-eating surrender monkeys”, “French fries” had become “freedom fries”, and France formed part of the “axis of weasles”. Now "les grenouilles" are America's oldest ally. Redemption can come swiftly if nations make the right squeaks.
Following hard on the UK parliamentary negative,  John Kerry claimed that a large volume of material existed all pointing to the Assad regime as the perpetrator of the chemical weapons atrocity in Damascus.  Why didn’t Cameron offer up this evidence? Possibly because the State Department didn’t have any until Mr Kerry decided that it was needed. Who can forget Colin Powell’s embarrassing submission to the UN on Iraq’s WMD - his assembly of unverified accusations and grainy photographs that revealed nothing in particular? That, too, was incontrovertible evidence. In a BBC radio interview, one Tory spokesman offered an alternative explanation: that after the Iraq debacle, the British public no longer trust evidence provided by the government; although why he felt that we should have greater trust in the word of government ministers is a question similar to the one posed by the Carpenter to the Oysters after he and his pal the Walrus had consumed them: “...answer came there none -”.
The US President - no doubt with half an eye on what happened in the UK - opts to ask Congress whether to attack the Assad regime. He has power to act already but is understandably insecure both about the objective of military action, and whether he can carry public opinion.  The second is, of course, dependent on the first.  We know US intervention will not involve “boots on the ground”. Talk is of “punishment”, a “surgical strike” and lately of  “infrastructure degrading”. What would be the consequences? No one can say given this rather complex version of prisoner’s dilemma. The region is a notorious powder-keg with major powers like Russian, Iran and Israel in the mix.  For good reasons, no one articulates the aim in terms more definite than a handful of foggy abstractions.
Regime change, ruled out here as so often in the past, nevertheless has to be the only game worth playing. So it was in Iraq and in Libya. In the long run, Assad is doomed regardless of the outcome because, even in the unlikely event he were to win the civil war outright, he will become an international pariah. With the possible exception of Russia under Putin, the world community will not engage with him; and even Russia may tire of an association with someone so tainted by crime, so sullied by pursuit of an appalling civil war, and who sooner or later is bound to be replaced by a regime that will steer clear of involvement with an overt supporter of its predecessor. In other words, Putin’s support for Assad could, in the medium term, ensure that Russia loses its best ally in the region.
What of the imperialist fantasies of UK politicians? They appear still not to have caught up with the fact that we are now a medium-sized power with no money. The public understands this; understands that the government is savagely cutting public services, selling off whatever remains of publicly-owned assets, and making the poor pay for the greed and fecklessness of bankers. It is also slicing away at our military capability and making a wholesale mess of defence spending. Yet the inexperienced people who govern the country still think they can strut the world stage like 19th century  commanders of the empire, summoning gunboats to bend ignorant natives to the imperial will. With apologies to Shakespeare, we may picture Assad in the role of Barnadine on the day of his intended execution:
Assad:...I will not consent to die this day, that’s certain.
Coalition: Oh you must; and therefore we beseech you, Look forward on the journey you shall go.
Assad: I swear I will not die today for any man’s persuasion.
Coalition: But hear you…
Assad: Not  a word. If you have anything to say to me, come to my ward; for thence I will not today.

(Measure for Measure IV:iii)
What should we do? Provide aid to the refugees and support for the countries that harbour them. Leave the rest to the UN.

Tuesday, August 6, 2013

Burke and the Poverty of Political Thinking in the UK

Not long ago I was invited for the first and - thus far - the last time to a meeting at the Institute for Public Policy Research (IPPR), an organization described on its website as “the UK’s leading progressive think tank”. It took place in a modest room at the IPPR’s office where I found myself seated at a long table together with a group of perhaps twenty people, one or two of whom I recognized as public figures. Nick Pearce, the IPPR’s Director presided. Theme of the evening: Edmund Burke, the 18th century political thinker and polemicist. Two intellectual heavyweights, David Marquand and Maurice Glasman, had agreed to deliver their thoughts. Both are Labour men as befitted the IPPR’s left-leaning ethos. Among Marquand’s many distinctions is that of being a former principal of Mansfield College, Oxford; while Glasman was elevated to the peerage in 2011 where he sits on the Labour benches. He is a founder and spokesman for what has become known as Blue Labour.
I anticipated a battle of ideas between the two men with the rest of us pitching in, but what emerged was a harmonious duet extolling Burke’s many supposed virtues and claiming him for the Left. A flavour of their views can be found here and here.
Coincidentally, this year saw the publication of Tory MP Jesse Norman’s intellectual biography Burke: Philosopher, Politician, Prophet. I offer the Guardian review as the least tediously partisan of those I have read. Unsurprisingly, given his political leanings, Norman claims Burke for the Right. His book is an unashamed exercise in hagiography in which he skates hurriedly over the unsavoury elements of Burke’s life and writings - of which there are many - so as to dwell on what he considers to be his hero’s unrivaled perception of how we could and should frame the political, social and economic life of the nation.
If UK politicians have ever concerned themselves with political ideas and the philosophical underpinnings of their professed beliefs, they have long since lost the habit. It would be churlish therefore to criticize those who attempt to buck the trend. What disturbs is not the attempt but the choice of Burke as a model.
As a democrat, Burke does not even make it to first base.  In his seminal “Reflections on the Revolution in France” (1790), he claims that to elect a head of state or even to cast doubt on the royal right of succession would be ...utterly destructive of the unity, peace and tranquillity of this nation. Following the Glorious Revolution of 1688, Burke tells us, the “lords” and “commons” gave up forever the peoples’ right to choose their own governors: So far is it from being true that we acquired a right by revolution to elect our kings, that if we had possessed it before, the English nation did at that time (1689) most solemnly renounce and abdicate it for themselves and for all their posterity for ever.[1]
Tom Paine dismissed this Burkean absurdity in a single sentence Immortal power is not a human right, and therefore cannot be a right of parliament.[2]
However,  it was not only with respect to the head of state that Burke dismissed the value of elections: ...when leaders choose to make themselves bidders at an auction of popularity, their talents in the construction of the state will be of no service. They will become flatterers instead of legislators; the instruments not the guides of the people.[3] Better so to arrange matters that the common people have as little influence as possible on the running of the country.
Burke took his rather jaundiced view of democratic politics to heart in his own political life. He spent most of his long parliamentary career as an MP for the pocket boroughs of Wendover and Malton - the first controlled by Lord Fermanough and the second by Lord Rockingham, one of the wealthiest men in England. In 1774 Burke tried his hand in a genuine election as a shoo-in candidate for the City of Bristol. His victory speech offers a priceless example of his rhetorical gifts: ought to be the happiness and glory of a representative to live in the strictest union, the closest correspondence and the most unreserved communication with his constituents...It is his duty to sacrifice his pleasure to theirs.[4] Unfortunately for the good citizens of Bristol, that was practically the last they saw of their new MP. Having secured their vote, he troubled himself no more with their concerns. At the following election, he chose wisely not to stand in a place where he would have to be “a bidder at an auction of popularity” because he would undoubtedly have been turfed out. Instead, he accepted Rockingham’s offer of Malton whose few constituents would expect nothing of him and would remain safely beneath his lofty gaze.
    Burke distrusted democracy if it implied any kind of meritocracy or equality of opportunity. The road to eminence, and power from obscure condition, he wrote, ought not to be made too easy, nor a thing of much course…[5]
Property seemed to him of far greater importance than human ability in ensuring a stable society: ability is a vigorous and active principle, and as property is sluggish, inert, and timid, it can never be safe from the invasions of ability, unless it be, out of all proportion, predominant in the representation. It must be represented too in great masses of accumulation, or it is not rightly protected…..The power of perpetuating our property in our families is one of the most valuable...circumstances belonging to it….Some decent regulated pre-eminence, some preference...given to birth, is neither unnatural, nor unjust, nor impolitic.[6] This is not merely an argument in favour of oligarchy, it is a clear rejection of the most basic democratic principles to which all three of our major political parties claim to adhere.
Interestingly, Adam Smith had a quite different view of the landholding question: ... lands which lie near great towns, which frequently change masters, are much better cultivated than those which lie at a distance from them and continue long in one family.—The estate of a great family stands very little chance of being farther improved than it is at present. The lord has nothing to lay out upon it and the tenants are not in the state which would induce them to improve. If this estate was divided into a number of small possessions each having a separate master, it would soon be cultivated to a high degree. Farms set out for long leases or feus are those which tend most to the improvement of the country...[7]

As a committed monarchist, Burke was outraged by the French Revolution and not least by the treatment of Louis XVI and his consort Marie-Antoinette. The two were still alive when Burke penned his Reflections (they were executed in 1793); but what raised the temperature of his indignation was the idea that a monarch could be deposed by the common people. Of Marie Antoinette, who was by then deeply unpopular in France (Austrian by  birth, she was known l’Autre -tri - chienne - the ‘other bitch’), he wrote
It is now sixteen or seventeen years since I saw the queen of France, then the dauphiness, at Versailles; and surely never lighted on this orb, which she hardly seemed to touch, a more delightful vision…...Never, never more shall we behold that generous loyalty to rank and sex, that proud submission, that dignified obedience, that subordination of the heart, which kept alive, even in servitude itself, the spirit of an exalted freedom. The unbought grace of life, the cheap defence of nations, the nurse of manly sentiment, and heroic enterprise is gone!….[8]
This is not simply overblown rhetoric, it is embarrassingly bad prose from a writer whom countless authorities - Norman being merely the latest - insist is one of the greatest exponents of the English language. The conflation of “exalted freedom” with “submission”, “subordination”, and “servitude” is priceless.
Burke’s writings are laden with sycophantic paeans to the landowning nobility. He seems never to have wondered, however, at the means by which these fabulously wealthy men came by their property. Perhaps a reminder is due.
Villagers in the Middle Ages worked common land and made common wealth. In the sixteenth century, aristocrats began enlarging their estates by ejecting peasants  from what had formerly been common land and then re-employing them as labourers.  Thomas More’s hero, Rafael Hythloday, noted the development:
...No longer content to lead lazy, comfortable lives which do no good to society, (the nobles and gentlemen) must actively do it harm by enclosing all the land they can for pasture and leaving none for cultivation.[9]
Later on, governments got in on the act. In England, during the eighteenth and nineteenth centuries, they dispossessed common villagers of their best remaining acreage and awarded that also to the aristocracy. Between 1760 and 1844, almost four thousand enclosure acts were shoveled through parliament, each designed to legalize a land seizure.  The peasants suddenly found that if they grazed livestock or hunted on traditional common lands, they would be treated as thieves and subjected to the full force of the law. In those days theft, even of a shilling, was punishable by death.
Burke writes ..we have never dreamt that parliaments had any right whatever to violate property….[10] Clearly he was not thinking of common property. Or perhaps he considered property real only when owned by a private citizen. If so he would doubtless have approved of the privatization policies of recent UK governments; which explains, perhaps, why they might approve of him.
Despite so much evidence to the contrary, the conventional view of Burke as a meritocrat who believed in change provided it was gradual (so gradual, some might say, as to be unobservable), is well summarized by Norman: ...far from defending privilege, (Burke) saw a successful social order as the means by which individual talent and energy could find their just rewards.[11] What Burke actually believed, however, appears to be quite the opposite: The body of the people must not find the principles of natural subordination by art rooted out of their minds. They must respect that property of which they cannot partake. They must labour to obtain what by labour can be obtained; and when they find, as they commonly do, success  disproportionate to the endeavour, they must be taught their consolation in the final proportions of eternal justice….[12]

On the issue of slavery, Norman is not alone in proclaiming Burke as an opponent if not exactly an abolitionist of slavery; although there is not much evidence of his support for Wilberforce’s long anti-slavery crusade. Burke did, however pen a curious document entitled Sketch of the Negro Code[13] in which he laid out proposals for the treatment of black slaves - including methods of physical punishment that were all-too-revealing of his stated belief that blacks were not civilized creatures and should not attain their freedom until such time as they had secured that desirable status. According to Burke’s code, slaves of impeccable manners and behaviour should have a right to buy their freedom at rates to be fixed by two Justices of the Peace..., though he fails to suggest where they might find the money. A renowned advocate of individual liberty, Burke nevertheless thought that despite being committed slave owners ... people of the southern (American) colonies are much more strongly….attached to liberty than those to the northward…[14] In his fascinating “Counter History of Liberalism” Domenico Losurdo describes Burke as “the tutelary deity of the slaveholding South”.
What of slavery or its near equivalent at home? During Burke’s time, workers in coal mines and salt works in Scotland were obliged to wear a collar bearing the name of their master. Adam Smith, Burke’s contemporary, maintained that The master has the right to correct his servant moderately, and if he should die under hs correction, it is not murder...[15]
Of these practices Burke has nothing to say, though it hard to believe him unaware of them. What we do know is that Burke’s sympathies for the poor, if they existed, were purely rhetorical. He thought it was at once mad and blasphemous to believe that among the competencies of government was supplying to the poor those necessaries which it has pleased the Divine Providence for a while to withhold from them. Poverty was the result of Divine Displeasure which would not countenance challenges to the laws of commerce - which were the laws of nature and therefore the laws of God.[16]
Workhouses, in which the indigent were made to labour under a regime of virtual slavery, were expanding in size and number throughout Burke’s lifetime. The conditions under which people lived and worked in these institutions at the time can perhaps be gauged from Daniel Defoe’s comment  on the workhouse in Bristol (which) has become such a terror to the Beggars that none of the strouling crew will come near the City.[17] The author of Robinson Crusoe died two years after Burke was born; but if anyone wonders whether the terror he described outlived him, I can affirm that among my early memories of childhood is that of hearing fearful references to the workhouse from members of my own family.
Other terrors also formed part of the daily life of the poor. Able-bodied men were exposed to the constant danger of being pressed into the navy or the army with little prospect of a return to their family and only modest hope of survival given the dangers to which they were exposed. Crimes punishable by death proliferated - the number increasing at least four-fold in the 150 years following the Glorious Revolution of 1688 - almost all of them offences against property.
Not one glance of compassion, Paine complained, Not one commiserating reflection has he bestowed on those who lingered out the most wretched of lives….He is not affected by the reality of distress touching his heart, but by the showy resemblage of it striking his imagination. He pities the plumage, but forgets the dying bird.[18]
One of the least pleasant features of Burke’s world view is his transparent antisemitism. In Reflections, he writes of ...Jew brokers contending with each other who could best remedy with fraudulent circulation and depreciated paper the wretchedness and ruin brought on their country by their degenerate councils… And of post revolutionary France he affirms that The next generation of the nobility will resemble the artificers and clowns, the money-jobbers, usurers and Jews who will always be their fellows and sometimes their masters. Surprising to say the least that Lord Glasman’s professed admiration for Burke is not tempered by an awareness of opinions such as these.
In the context of Burke’s attack on Jews as purveyors of worthless paper money in revolutionary France, it is worth noting his comment on the situation in England:  ... not one shilling of paper money of any description is received but of choice;...the whole has had its origin in cash actually deposited; is convertible, at pleasure, in an instant and without the smallest loss, into cash again.
This is, of course totally false. Burke appears to have been unaware that fractional reserve banking was well underway in England during his time. Maybe he should have consulted his friend Adam Smith before making so bold with this misguided display of familiarity with the banking system.
Admirers of Burke like to point to his prescience in predicting the Terror unleashed by the French Revolution and the eventual rise of a powerful and dominating ruler (Napoleon). What they fail to note is the number of Burke’s predictions that failed to materialize: the demise of Christianity in France, and of civilization along with it, the takeover of that country by malevolent Jews and so on. They also fail to acknowledge that the modern world has opted for the basic tenets of the Revolution. Most democratic countries are republics not monarchies including the United States, India,  all the Latin American nations etc.
During the round table discussion at the IPPR I did my best to counter the flood of praise for Burke.
“But,” someone pointed out, “Burke was right about such critical events as the French Revolution. There was chaos and murder.”
“He may have been right in the short term,” I countered, “But France has ended up as a republic and doesn’t seem to be notably less civilized than the UK; and the Revolution changed the way all of us think about the rights of the people to choose their governors. In most of the world it is not Burke’s view that has prevailed but Paine’s.”
Burke would probably have shrunk into a footnote of history if a handful of politicians and scholars had not found nourishment in his works for their prejudices. Even Burke’s reputation as a fine  prose stylist would be less firm if his admirers were not so willing to overlook his taste for florid rhetoric and rebarbative vituperation.  The gap - often enormous - between his message and the turgid grandiloquence of his prose, his taste for redundant adjectives whose main effect is to stuff the reader with hot air in place of measured argument, are not the hallmarks of a great writer still less of a measured thinker.
What a pity that in the 21st century, when the world confronts economic, environmental and socio-political issues of which Burke could have had no inkling, we still have politicians and opinion-formers looking to this overrated 18th century prig for inspiration and guidance.

1 Edmund Burke,Reflections on the Revolution in France; London 1790.
2 Thomas Paine, Rights of Man; London 1791.
3 Burke, Reflections, op.cit.
4 Burke, Speech to the Electors of Bristol; 3 November 1794.
5 Reflections, op.cit.
6 Ibid.
7 Adam Smith. Lectures on Jurisprudence, Glasgow 1762
8 Ibid.
9 Thomas More, Utopia; London 1516.
10 Reflections, op.cit.
11 Jesse Norman, Edmund Burke - Philosopher, Politician, Prophet; London 2013
12 Reflections, op.cit.
13 Burke, Sketch of the Negro Code, 1780?
14 Quoted in Domenico Losurdo, Liberalism - A Counter-History, London 2011, p. 37
15 Adam Smith. op.cit.
16 See Losurdo, op.cit., p.193
17 Daniel Defoe, Giving Alms No Charity, London 1704.
18 Paine, op.cit.

Note: This piece was first published in Open Democracy.

Friday, July 5, 2013

Age of Dissent

We live an age of grievance and disillusionment. Manifestations of discontent have been erupting all over the globe like outbreaks of a fever. In recent times we have witnessed mass protests in London, New York, in Rio and São Paulo and other Brazilian cities, in Istanbul, Algiers, Madrid, Athens, Cairo, Sofia, Rome: protests against political incompetence, broken promises, the growing gap between rich and poor, the greed of bankers and corporate moguls, and the unholy alliance between these and the people who govern us.  At an extreme level, we have seen governments overthrown in Tunisia, Libya and Egypt, and a civil war in Syria that shows little sign of concluding. Egyptians are in the streets again.
What is going on?
One possibility is that we are collectively experiencing one of the less savoury effects of globalization in the westernized neo-liberal version that has so captivated much of the world. Economic downturns are no longer merely a national problem.  A slump in the US or European markets can put people who live ten thousand miles away out of work. Sub-prime loans and clever schemes for disguising them have brought more than a few banks to the edge of ruin (and one or two over the edge) regardless of where they are or were headquartered. More importantly, people of many different countries have paid a heavy price for banking profligacy - and will likely conintue paying for many years. Cuts in public services - or a failure to invest in them - figure among the complaints of Brazilians as well as Britons; home repossessions have become a frighteningly familiar phenomenon in Spain as well as in the United States. What we have seen is the delivery of whole populations to the vagaries of the international market, the rapacity of financiers, and the careless cruelties of incompetent governments.
Globalization has achieved something else, however, that can only be uncomfortable to governing elites, namely the capacity for people to share experience and to communicate with each other instantaneously and over long distances. Much like the weather, a disturbance in one country can cross oceans and reappear on the far side of the globe. Anger and disaffection are no longer constrained by frontiers. We are becoming as knowledgeable and sometimes even as indignant about injustice in distant lands as in our own back yard. People are discovering that they have more in common with the protesters of Tahrir, Taksim, Wall Street and Avenida Presidente Vargas than with their own politicians, who increasingly convey an impression of belonging to a perverse offshoot of the human species: one that is remote, immune to economic distress, morally if not legally corrupt in its intimacy with wealth and the wealthy, and concerned about the cares of the rest of us only insofar as there is political advantage in seeming so.

One reflection of the growing distance between governors and the governed may be observed in the recent eruption into the headlines of Bradley Manning, Julian Assange and Ed Snowden: the first of these currently being tried for a litany of horrendous lèse-majestical offences, the second holed up in the Ecuadorean embassy in London, and the third seeking sanctuary from the US Authorities. Their offences: informing the people of the illegal and morally repugnant activities of the US Government and its allies, of which the UK is a salient member. These activities are not simply in defence of the citizenry, nor directed specifically at criminals or terrorists or hostile and undemocratic regimes. They are aimed at all of us, individuals and governments alike, without the knowledge or consent of either.

In constitution-less UK, no foolproof protection exists against whatever our political leaders wish to do on our behalf. We have only the demonstrably unreliable words of ministers and their minions that although they are defending our interests and our lives, we shouldn’t know how they are going about it.  Many of them are the same career politicians who were gung-ho for the Iraq War and who happily waved our soldiers into Afghanistan on a peace and stability mission. US citizens do have a constitution that supposedly safeguards them against the abuses of government; but in matters of surveillance and secrecy, the relevant clauses seem to have been whited out.
The crimes of Assange, Manning and Snowden are to have revealed to the public that the sanctimonious image of Western democracy propagandized round the world is seriously misleading. Whether or not Manning and Snowden are, as they would claim, defenders of the US constitution, all three men have unarguably defended the people’s right to know what is being done in their name.Yet they are branded as traitors in the twisted logic of those for whom constitutional protections and civil and human rights have become mere impediments to action.No one has conducted an opinion poll of international public reaction to the hounding of Bradley Manning, Julian Assange and Ed Snowden, but it’s a good bet that all three would command a majority of support in most countries if not in the United States.
A triumvirate of corporate executives, financiers and politicians has demonstrated what a glance at history unfailingly reaffirms, namely that democracy - the voice of the people - is invariably distasteful to political elites even when by election they appear to be its beneficiaries.  Jefferson made this observation repeatedly.
Patrick Henry, another US Founding Father, spotted the danger inherent in government secrecy when he noted that:  “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them”.
Regrettably, exposure of unpleasant secrets does not alone provoke in our leaders either remorse or a desire for change. When skullduggery becomes public - as it has done repeatedly with Abu Ghraib, Guantanamo, Extraordinary Rendition, collusion in torture, spying on allies, and so on - politicians  defend it on the grounds of public interest, or more specifically to protect us from the activities of terrorists, or maybe just because that’s what governments do.
There is a curiously unpleasant precedent to this kind of grubby justification. After the German Reichstag erupted in flames in 1933,  Hitler used the occasion to announce his War on Terror and to push through legislation - the "Decree on the Protection of People and the State" - that allowed the police to intercept mail, wiretap phones and imprison  terrorism suspects without charge. References to "The Fatherland" began cropping up in Hitler's speeches and, before long, an Office of Homeland (Fatherland) Security - the Reichssicherheitshauptamt came into being whose first head was that luminous defender of human rights,  SS-Obergruppenfuhrer Reinhard Heydrich. It was apparently not too difficult to persuade a significant proportion of the German people that these initiatives were designed to protect them from the hostiles forces that were bent on destroying their way of life.
Disquiet over the undercover activities of public agencies is not, of course, the only cause of  the increasing distance between governors and the governed.  During the last UK election, members of the current Coalition assured the electorate that there would be no “top-down” reorganization of the National Health Service, a promise that has proved as empty as President Obama’s that he would close down Guantanamo Bay.  French and Dutch voters rejected the The Treaty Establishing a European Constitution so the EU collective changed the title to the Lisbon Treaty, made a few amendments, and this time made sure not to consult the people. While the banks have done their best to ruin us, and their senior executives continue to pay themselves obscenely large sums, governments world-wide have made no significant attempt to introduce stricter controls over financial transactions.
Wedded as they are to a market-fundamentalist view of how to shape the administration of life, traditional parties have become irrelevant as foci of alternative visions. Before Labour leader Tony Blair came into office, he promised to stick to the spending plans of the previous government. Ed Miliband, current Labour leader, has just delivered the same message. US presidents regardless of Party stick to the same neo-liberal ideology and to the same projection of US power overseas. Right now the Obama administration is wagging an authoritarian finger at China and Russia over their refusal to send Snowden back home (finger-wagger John Kerry has not yet understood that foreigners no longer genuflect before US Secretaries of State still less fear their admonishments). These are examples from the anglo-saxon world, but readers in other countries will recognise the behaviour in their own political landscape. It can be summarized as disdain for public opinion and for the openness and honesty without which democracy becomes little more than a slogan.
Among world leaders, an unusual figure appears from time to time to remind us that alternatives do exist.   Pepe Mujica, President of Uruguay is one.  He donates most of his salary to the poor, and recently opened some rooms of the presidential palace as a temporary shelter for the homeless. He has acquired a deserved reputation as the world's poorest president.  He is probably the only national leader whose word I would unhesitatingly trust.  There are lessons to be learned from the behaviour of leaders such as Mujica, but it’s unlikely that any politician in Europe or North America would be willing to heed them. I remember a conversation with a senior Foreign Office mandarin when Evo Morales, then president-elect of Bolivia and the first indigenous president of any South American country made a brief visit to Europe. I asked whether Tony Blair would be inviting Morales to Downing Street.
“No,” came the reply, “Blair only meets with important people.”
“Like who?”
“Oh, leaders of major countries, presidents of multinational companies. Bolivia’s too small for him.”
France, Italy, Spain and Portugal have recently confirmed Morales’ unimportance by refusing him permission to overfly their territory on his way home from a meeting in Moscow. Now we learn that someone has been bugging the Ecuadorean embassy in London. Evidently, in the minds of our great leaders, these are insignificant little banana republics whose dignity can be trampled at will. As Latin America locks arms in a collective protest against what is seen as an act of neo-colonialist arrogance, it would be good to let the peoples of that continent know that  in this as, in so many matters, our leaders do not represent us.

Sunday, June 9, 2013

Banking for Blasphemers

      This little essay is reproduced here as a response to an on-line discussion launched elsewhere.

  Contrary to popular belief, most bank loans come neither from the banks’ own cash nor from customer deposits, but from money created at the moment of the loan. When you borrow funds from your bank, the bank deposits the money in your account and simultaneously increases its assets by the same amount. And since assets represent a claim on goods and services, the bank thereby enriches itself at everyone else’s expense. Of course, it also charges interest on the loan, which brings in  a little extra profit.  Throughout the explanation given below - which is greatly simplified for reasons of space - it is important to bear in mind that every bank loan creates as deposit.
        Here is an example. Let’s suppose an official at the central bank issues John Fastbuck with a banking licence which he uses to set up Fraudulent Bank Ltd. (We will assume, for  the sake of simplicity, that the banking system has only one bank in addition to the Central Bank (which may also be privately-owned as is the Federal Reserve in the U.S.).  John has no money, so the initial balance sheet is as follows:

        Assets                   Liabilities & Equity
           0                                    0
        Ms Angel inherits 1000 euros in cash which she deposits in a savings  account with Fraudulent Bank. Now the bank’s balance sheet looks like this:

        Assets                  Liabilities & Equity
        1000                           1000
        So as to meet reserve requirements and in preparation for making serious profits, Fraudulent Bank buys a 1000-euro bond at the central bank. It does this by registering the purchase and crediting the government account (in this example we are using a reserve requirement of ten percent - though average bank reserves world-wide are significantly lower and, in some instances and countries - including the United States - the reserve requirement has been waived or sidestepped).:

             Assets                              Liabilities & Equity
    Current    1000
    Deposits    0                                      1000
    Bonds     1000                                   1000
    Total       2000                                    2000
        Where did the extra 1,000 come from? Thin air. It was just a bookkeeping entry: effectively a promise to pay the central bank.
        Let’s return to the initial deposit.  Ms Angel chose to deposit the money with Fraudulent Bank because the interest-rate offered seemed attractive at 10 per cent.  Now Fraudulent Bank needs to generate income to cover the interest liability. The best way of doing that is to start lending - fast. Along comes Mr Honest who needs a 9000-euro loan for his daughter’s university fees. In view of Mr Honest’s good name, Fraudulent Bank readily approves the loan (though it takes collateral lien against his house as security):

            Assets                              Liabilities & Equity
Current     1000
Deposits                                               1000
Bonds       1000                                    1000
Loans       9000                                     9000
Total      11000                                   11000
        Clearly the depositor’s money was used to meet a reserve requirement of ten percent.  The loan to Mr Honest came from funds created by the bank. These funds are not, of course, in the form of gold nuggets. They are, once again, “promises to pay”. They allow Mr Honest to use his loan - and cause the “money” to circulate - solely because everyone accepts  cheques (or electronic transfers) of Fraudulent Bank as “good”.
        What about interest payments? At the end of the year, the bank has to pay Ms Angel 10% on her deposit of 1000 euros = 100 euros. In order to attract loan business, the bank feels it can only charge borrowers 5%. Five per cent of Mr Honest’s 9000 = 450 euros. So at the end of year one of operation, Fraudulent Bank’s balance sheet looks like this:

             Assets                              Liabilities & Equity
    Current              1000
    Deposits                                              1100
    Bonds                1000                          1000
    Loans                9000                           8550
    Ret. Earnings                                         450
    Total                11000                         11000
    In reality the banks charge borrowers a higher rate of interest than they concede to depositors so they make even more profit than Fraudulent Bank.
    Note that the amount of money in circulation is increased by the bank’s  payment of interest to Ms Angel. Where has this money come from? The answer is that it comes from the ether just like Mr Honest’s loan.  On the other hand, the amount of money in circulation is reduced by Mr Honest’s payment of interest to the bank.  Where does that money come from? It doesn’t. The bank only created money for the loan, not for the interest. So in order to ensure that money is available for paying interest, the banks have to issue - and therefore lend - still more money. And since these new loans also attract interest, it follows that outstanding debts can never be repaid because there will never be enough money in circulation.  Moreover, because countries as well as individuals borrow money (money that didn’t exist before the loan was made), it follows that every citizen - that includes you and me - is in hock to the banks. In fact, our collective debt to them exceeds the  value of all humanity’s assets.
    By the way, provided Mr Honest continues paying interest, Fraudulent Bank doesn’t want his loan repaid because that would have the effect of reducing its equity.
         What if Mr Honest goes bankrupt and misses his interest payments? The bank has an answer for that too: it’ll take his house instead. Those 9,000 euros are not just a bookkeeping entry, they’re real.
        Now you know why banks have been so keen to lend money. Fractional reserve banking gives them a licence to print it - and to commit fraud also since they are lending funds which - a second before the loan -  they didn’t possess. If we could all do that we’d have as much money as we wanted - though admittedly it wouldn’t be worth very much.
    There is, of course, a very large fly in this  comfy banking emollient - of which the current crisis offers an excellent example. When banks make too many sub-prime loans (loans to people who are at high risk of default - and then do default) the collateral - usually real property - tends to lose its market value. When supply exceeds demand (in this case for repossessed houses in the US) prices plummet - which meant that the banks left holding the collateral turned out to be worth much less than their balance sheets indicated. They were also not bringing in the expected cash flows. The rest, as they say, is history.
        If you’ve followed this account, you might be wondering why any reserve is required at all, why banks can’t simply create as much money as they can find people to lend it to. The same thought has occurred  both to them and to many legislators. Before the 2008 crisis politicians - with Tories at the forefront - were banging on about the negative effective of “over-regulation” of the banking industry, while banks were sidestepping reserve requirements anyway through the use of Collateral Debt Obligations and Credit Default Swaps. In many of the countries that matter, the banks had - and for that matter still have - a completely free hand to ruin us.
    Moral? Next time you take a bank loan, don’t worry about paying interest and don’t even think of paying it off. The money wasn’t the bank’s anyway and if the loan officer tries to claim the opposite, ask her to prove it.

Note: This little piece was initially inspired by Canadian Economist John Kutyn; but there are many other sources. See, for example, Michael Rowbotham: ‘The Grip of Death’ and ‘Goodbye America’, Oxford 1998 and 2000;  Huber & Robertson: ‘Creating New Money’, London 2002;  Sir Harry Page:’ The Lending of Money at Interest, London 1985.