Friday, 25 November 2011

Is there room for intellectuals in cricket?

Ed Smith in Cricinfo 24/11/2011

WG Grace thought reading books was bad for your batting. "You'll never catch me that way," he scoffed. The story serves as a metaphor for sport's suspicion of intellectual life. Thinkers, readers, curious minds: do we really want them clogging up the supposedly optimistic, forward-looking atmosphere of a cricket team?
Cricket is still grappling with the terrible news that Peter Roebuck - one of sport's genuine intellectuals - jumped to his death from his hotel balcony as he was being questioned by South African police about a sexual assault charge. The circumstances of Roebuck's death were clearly atypical. Nonetheless, his life - especially those parts of his life that belonged to cricket - fit the pattern of an intellectual who never quite settled into an easy relationship with the sport he loved.

Other sports are arguably even more anti-intellectual than cricket. Football never entirely understood Pat Nevin. Graeme Le Saux was subjected to homophobic chants and abuse. He wasn't gay, of course - his "sin" was to read serious newspapers such as the Guardian.

In Ball Four, the New York Yankees pitcher Jim Bouton's wrote the first great exposé of major league sport. He described how the management encouraged, almost forced, their players to drink beer after matches. That Bouton preferred milk was thought to be proof that he wasn't a real bloke. He was made to feel guilty for being intellectually curious. Bouton wrote admiringly about one soulmate who liked to lie down in open fields and read poetry. But his intellectual team-mate subsequently denied it.

Let's not pretend that there aren't tensions between thinking and competing. I turned professional at probably my most openly intellectual phase, when I had just graduated from Cambridge University. Perhaps too many things had all happened too soon for me - I was only 20 when I graduated. And we were young and callow and could be a pretentious bunch, with the intellectual bar set ludicrously high. We thought nothing of being habitually dismissive - forgive us, but being dismissive was the style.

From that rarefied academic environment, dominated by abstract thinking and academic competitiveness, I stepped straight into a first-class cricket dressing room. It was a massive change and gave me a huge jolt. And I'm sure I didn't always handle it well. On one away trip, my room-mate picked up the book on my bedside table. It was Experience and Its Modes, a densely argued book by the philosopher Michael Oakeshott. I'll never forget the expression on his face.

Mike Atherton and I once discussed whether intellectuals had any place in modern sport. The best defence is that good sports teams embrace diversity. They are open to all different types, including players who do not naturally fit the stereotype of a team player. The best teams are liberal in the deepest sense. They do not stifle independent thinkers or left-field ideas. They do not enforce conventional, middle-brow behaviour.
For that reason, the worst combination for a sporting intellectual is a losing team and a weak, insecure captain. A losing team searches for scapegoats. During times of insecurity and pressure, as history shows, human groups often turn on unconventional individuals. Insecure leaders want to be surrounded by players of limited intelligence. It is easier that way.

Surprisingly, however, the team's "intellectual" usually has little to fear from the anti-intellectual jocks. No, the real threat comes from the jealousy of the nearly man, the player who fancies himself as a thinker and resents the competition. Team splits often begin with the manipulations of jealous, thwarted players who think they are cleverer than they are.

The best teams are liberal in the deepest sense. They do not stifle independent thinkers or left-field ideas

Winning, of course, always helps. A winning team is more inclined to look for the good in unusual players. Looking back on my career, the happiest times were when I played under secure captains and coaches. My father, a lifelong teacher, often told me that weak headmasters appoint unthreatening deputies, but strong headmasters back themselves to handle more restless and independent people. I suspect that was one of Adam Hollioake's great strengths as a captain: he encouraged people to be themselves. He could do that because he was happy in his own skin. "I enjoy my life, I want my team-mates to enjoy theirs" - that was always the impression I got from Adam.

Roebuck, I sense, craved that kind of acceptance - in cricket and in life. He once emailed me a long, uncorrected series of acute perceptions and observations. It was classic Roebuck - staccato, direct and unsparing, especially of himself. He wrote: "I realised that I had not actually enjoyed cricket at all. Englishmen love to suffer! I played one creative innings at Somerset and that's the only press cutting I kept. I never really dared again."

He was determined to avoid those errors in his career as a writer. "Always tell the truth in your own way. As a journalist I never go into the office, as I say nothing happens in offices! One has to work hard not to get sucked into 'the operation'. But dare one tread that path? Do you? Professionalism is not an enemy but it has become a mantra. I concentrate entirely in staying fresh - or else work becomes tired, cynical, useless. Cleverness is an easy substitute for thought. Begin afresh afresh as Larkin wrote."
That "Do you?" was one of the most direct challenges I have had put to me.

He had so much more thinking to do, so many more insights to develop. Instead, his innings did not run its full and proper course. "A player goes through three stages - natural, complicated, simple - not many reach that last stage but the journey cannot be avoided. Failure is the problem," he wrote to me.

Roebuck's three-stage journey applies to life as well as to batting. It is deeply sad that Roebuck's life ended while it was still very much at the complicated stage. One day, I hope, the intellectual will find it easier to find a natural role in professional sport.

Former England, Kent and Middlesex batsman Ed Smith is a writer with the Times.

Wednesday, 23 November 2011

Only builders will profit from Cameron's sub-prime homes

Simon Jenkins, The Guardian, 23/11/2011

After the SS British Economy hit an iceberg three years ago, survivors were hauled from the freezing sea aboard the good ship Cameron. They assumed he'd be a more reliable helmsman. So what should they make of their new captain deciding to hurl his vessel at full speed towards the self-same iceberg?
David Cameron announced on Monday that he wants to "revive people's hopes and dreams of homeownership". He intends to use up to £650m of public money to reflate what is by definition the sub-prime end of the mortgage market. Public money will this time bail out not reckless bank mortgage lending, but reckless sales to individuals by private housebuilders. It is called kickstart, which is coalition speak for bailout.

Magic gold dust is the stock in trade of the politics of housing. Cameron, like all leaders exhilarating in spending public money, accords the owning of a home (cosy word for house) the status his forebears gave the church. He speaks spiritually of "that magic moment when you get the key and walk into your own flat". It is a dream, he says, "which should be available for everyone, not just the better off". His government wants to meet that hope and realise that dream.

With ministers said to be panicking about growth, every lobby in the country is rushing to town waving bottles of snake oil. Few are as powerful or persuasive as the housebuilders, sharing with bankers a responsibility for the world's current woes. The Guardian on Monday listed six almost identical housing initiatives in recent years. This kickstart is eerily similar to Labour's explicit Kickstart Housing Delivery plan of 2009, with the same subsidies for undeveloped sites and the same £400m incentives package. On each occasion the lobbyists come away with money in their pockets – but with the housing market unmoved. The market tracks not Whitehall initiative but the level of demand in the economy, and this tracking is as constant as government's belief in its power to break it.

On Monday the eager-beaver housing minister, Grant Shapps, indulged in the usual mission creep. "It is not a multimillion-pound expense," he said, which is what it is. The policy is to be "industry-led", with housebuilders "buying into the scheme". This is no wonder when they wrote the rules to enable them to profit risk-free. It is a lobbyist's charter.

There is some new help for renovating existing and derelict properties and some welcome land disposals, but no sign of an end to tax discrimination against repairs and conversions, where big gains in housing capacity are to be found. There is just an incantation of the developers' slogan that 230,000 homes are "needed nationwide", as if a home were a unit in a Leninist housing pool, rather than a flexible concept in a market responding to demand and supply.

There is no shortage of houses in Britain, indeed there is a raw surplus. Many are just too expensive for those who want to live in them. This is hardly new. Every chart of housebuilding and prices suggests that both will start turning up soon, along with mortgage availability, irrespective of government subsidy. The one thing that will send prices into a speculative spiral is a reckless return to Thatcher-style mortgage subsidies and Blair-style sub-prime lending.

The proper use of public money on housing is on the very poor. Here the policy is mystifying. Shapps asserts a hitherto unknown "right" of social tenants to buy the houses they rent. He is offering a 50% discount on the estimated purchase price, thus giving away half the value of the public housing stock, regardless of whether its not-for-profit owners agree. So much for localism and the "big society". This will be exacerbated by a little noticed concession to the housebuilders, releasing them from past promises to supply social housing on already permitted sites. This astonishing capitulation makes a mockery of planning localism.

Social housing remains hopelessly ill-defined in Britain, where 60,000 of its beneficiaries reportedly have second homes and hundreds of thousands more are well-off. Shapps even asserts a social right to a subsidised house near where one's parents live. When the Victorian social reformer, Octavia Hill, launched "three percent philanthropy" to aid the urban poor, she too was aiming away from real need. As Gareth Stedman-Jones wrote in Outcast London, Hill was helping not the truly desperate but a politically emergent class of "deserving poor". The same applied to municipal housing. Only after the second world war was access to a subsidised house loaded in favour of real need.

Under Margaret Thatcher housing subsidy wheeled upmarket, to promote homeownership. Tax relief was explicitly deployed as a means of sucking wage earners into homeownership (and Tory voting). The memoirs of Tory chancellors Lord Howe and Lord Lawson blaze with arguments with Thatcher on this. To her, subsidies were not to relieve housing distress but to aid those heroes of stability and growth, the deserving poor and middling rich. Housing politics has been skewed upmarket ever since.

Today's constant reference to the plight of young people "struggling to get on the housing ladder" reflects the reckless politics of the sub-prime crisis. It humiliated renting, inflated house prices, impoverished young people and ruined thousands in a frenzy of the "homeownership" bubble. Home owning peaked at 70% of Britons, against between 40% and 55% in Germany, France and the Netherlands. It leached savings from the economy and made British workers starkly immobile, compared with Germans or Japanese.

Much could be done to raise the status and availability of renting. The balance of security of tenure has tilted too far from tenant to landlord. Tilting it back could be balanced by fiscal incentives for converting and subletting. The latest kickstart echoes the cliches and slogans of the 1990s and 2000s, inducing hundreds of thousands on both sides of the Atlantic to sink their savings in to properties they could not afford.

The message is toxic. Even if the government is underpinning the housebuilders' side of the bargain, and the
money would be better spent on housing the poor, people should not be encouraged to borrow beyond their means in another gamble on rising prices. Sub-prime was an error more grotesque in its consequence than any could have foreseen. No responsible government should head that way again.

In the UK 2,800 bankers earn over £1m. The claim that rare skills command a premium does not apply to them

Jonathan Freedland in The Guardian, 23/11/2011

Here's a game you can play at home. Ask your friends how much they reckon the head of human resources at Cadbury, the chocolate company, pocketed for the last year for which we have figures. In my experience, the guessing will open at around the £100,000 or £150,000 mark. Then, realising that the answer must be stunning or else you wouldn't be asking the question, people go higher, suggesting £300,000 or even £500,000.

Those who place their bet at that very top end tend to smile at the absurdity of it, acknowledging in advance the madness of such a high salary. So far, in two years of playing this game, I have never seen anyone get the right answer. Which is that in 2008 Bob Stack, then head of HR for Cadbury, was rewarded with a package totalling £3.8m, including £2m in exercised share options. The aptly named Stack retired with all that and an £8m pension pot, paying him £700,000 this year and every year.

It's a choice example, even if Cadbury, gobbled up by Kraft, is, like Stack, no longer part of the British corporate scene. No matter how inured you think you are to runaway executive salaries, laid bare by this week's report of the High Pay Commission, that one makes the jaw drop. For Stack was not some master of the universe CEO, heading up a global financial behemoth. He ran the personnel department at a chocolate company. That's not a trivial job. But a basic package of nearly £2m a year? It makes no sense.
Ask people to pinpoint the problem and they might struggle to be specific. They just find it appalling that, as the commission found, today's CEO is often paid 70, 80 or over 100 times the salary of their average worker, when three decades ago the ratio usually stood at 13 to 1. A gap has turned into a vast, ever widening chasm.

Why does this matter exactly? You can't simply whine that it's unfair, insisted the executive recruiter Heather McGregor on the Today programme. "Anyone over the age of seven who complains that things are not fair needs a reality check," she said.

Deborah Hargreaves, the High Pay Commission chair, is ready with grown-up, hard-headed arguments for why runaway pay is bad for business. When those at the top are getting so much more than their subordinates, workers get demoralised, Hargreaves told me; absenteeism increases, and staff refuse to engage with management or support the corporate mission. When the average salary has increased just threefold over the last 30 years, it makes workers sullen and resentful to note that, say, the head of Barclays has seen his pay rise by nearly 5,000% over the same period.

Free-wheeling capitalists should be particularly alarmed, says the commission. Gargantuan executive pay is sapping enterprise: people who might have been risk-taking entrepreneurs have no reason to start their own businesses when they are so comfortably looked after at corporate HQ. And of course such winner-takes-all rewards warp the wider economy. Housing in London is just one example. The bonus boys have driven up prices at the top end, pulling the whole housing market out of reach of would-be first-time buyers at the other end. It's trickle-down economics at its worst: the wealth of the rich doesn't cascade downwards, but its corrosive consequences do.

Defenders of the wealthy brush aside such talk, certain their critics' real beef resides elsewhere, in envy or a retro-communist desire for uniformity. "Move to Cuba" was McGregor's most succinct soundbite.
In one way she's right: concerns over worker demoralisation and reduced entrepreneurial spirit do not lie at the heart of the matter. Our objection to telephone-number salaries goes deeper. What it comes down to is desert – a notion so deeply ingrained that, yes, even a seven-year-old can grasp it: the belief that people should deserve the rewards they get.

That's why the "move to Cuba" remark was so off beam. Most people have long accepted that there will be a differential in pay that, in the hoary example, the brain surgeon will earn more than the dustman. People understand that some skills are rare and therefore command a greater premium. They even accept that this can result in extreme outcomes, with the likes of Wayne Rooney trousering £250,000 a week. But none of that logic applies to the current state of corporate pay.

Rooney is truly a one in a hundred million talent; there might be just two dozen people in the world who could match his skills. But with all due respect to Bob Stack, that is not true of him. Nor can it possibly be true of the 2,800 staff in 27 UK-based banks who, according to the Financial Services Authority, received more than £1m each in 2009. Whatever these people are able to do, it's clearly not rare.

Jonathan Freedland in The Guardian 23/11/2011

Ah, comes the reply, but these are the cream of the international crop, among the very best bankers in the world. The commission report blows a hole in that tired argument, revealing there's hardly any cross-border poaching of corporate talent. Not many of our monolingual high earners could work abroad and even fewer would want to. They like it here and do not have to be paid lottery jackpot money to stay.

So rarity and competition can't justify these rates, and nor can any old-fashioned notion of desert: there is no society-wide consensus that says these people do such valuable, critical work they deserve their riches. On the contrary, we lament that the City lures maths and science graduates who might otherwise have become great engineers or scientists, paying them instead to move digits on a screen producing nothing of any discernible value whatsoever.

When reward slips its moorings from merit, this surely poses a danger that goes beyond our economic prospects. What message are we sending the next generation of Britons? Why should they aspire to become a surgeon or a headteacher or a judge, when those once top-paid jobs now earn a tiny fraction of the salary attached to a relatively cushy, low-risk seat in the boardroom or on the trading floor?

Strikingly, the commission found that even the mega-earners do not kid themselves they deserve their pay. They admitted that they had got lucky, that they worked no harder and risked no more than those earning much less. But they did think they were "entitled" to what they got. Hargreaves draws no parallel with the August rioters, except that they "showed that same sense of entitlement, that they could take trainers or a TV, as those bankers who thought they could take a bonus, even if they had brought a bank to its knees".
The commission has plenty of bright ideas for change. Ignore the City bleats that meaningful action has to be international, which sadly is impossible: action has only been impossible up till now because the UK, batting for the City, has blocked any EU attempt to tackle high pay. But the larger change will be cultural. We need to revive the lost notion of merit and desert, to make those bagging huge, undeserved salaries feel a sense of shame or at least loss of reputation at such unwarranted rewards. We have the Fairtrade scheme, so why not a Fair Pay kitemark granted only to products made by companies who pay defensible rates? Such a seal of approval should be given only sparingly – only to those who have really earned it.

Another balanced perspective on the global economic crisis

By Chan Akya

The trick to flying is to fall ... and miss. Douglas Adams, Hitchhiker's Guide to the Galaxy

Douglas Adams should have been around now, but tragically died a few years ago aged in his late forties (rather than at '42'). If he had been around, perhaps he would have given some wise counsel to world leaders who all seem out at sea in attempting to handle a crisis that wasn't necessarily of their making but almost seems certain to be their undoing.

The weekend saw political parties in the United States failing to agree on a program to adjust let alone cut sharply the country's yawning budget deficit. Alongside, the seventh regime change since the beginning of 2010 in Europe after this week's booting out of Spain's prime minister Jose Luis Rodriguez Zapatero marks yet another chapter of voters throwing not just the baby out with the bathwater, but in this case also the midwife and the entire bedroom. (See The men without qualities, Asia Times Online, October 29, 2011).

Cue the markets pushing Spanish and Italian yields to record levels this week, and even "reassuring" statements from rating agencies about US creditworthiness being shrugged off. The talk in Europe is now when, not if, Italy and Greece leave the euro; speculation has even mounted about the tenability of the French fiscal position.

Meanwhile banks on both sides of the Atlantic are being pummeled into submission with eye-watering declines in share price which the banks are attempting to correct by shedding thousands of employees. The count this year so far is that over 200,000 banking jobs will be lost in the major financial centers of the West - in effect reversing the entire marginal hiring by the industry since 2008. Alongside business sentiment continues to fall, and as companies postpone indefinitely their plans to invest, the job market isn't going to bounce back anytime soon.

Then there is the economic data. European data is no surprise except to those who have been sleeping for a while, but the ugly numbers from US gross domestic product on Tuesday showed declining inventories - exactly the kind of multiplier effect on the negative end of the spectrum that predicts further and sharper economic pain.

Game theory
Politicians in the US and Europe need to be aware of two basic tenets of government:
a. If you are going to bluff, do it big and do it early;
b. If you are going to panic, do it early and do it big.

The unsaid supplemental rule here is: don't do both. This is the reason for the opening quote from Douglas Adams.

Suspension of disbelief is an art form but apparently also broadly applicable to various aspects of modern life ranging from market sentiment to voter angst. There is very little certainty about any initiative, which basically calls for strong confidence in one's ability to achieve something and more importantly in one's ability to convince the other side of one's confidence in respect to the same. For the markets, the common thread is really one of credibility, not of credit worthiness.

Think about this broadly - if the European Union had stepped out and initiated a broad program to buy every unsubscribed bond from Greece, Italy, Spain et al in the beginning of 2010, would any of the problems really have gotten out of hand since then? Instead, they embarked on a series of "limited" interventions, which have been fruitless precisely because everyone knows they are limited.

It's a bit like walking into battle carrying a single revolver - everyone knows you only have six bullets, and once they dodge those you are the one in serious trouble. If on the other hand the other side has no clue about your weapons and ammunition, the battle is most likely won without firing a single shot.

In the end, this is the primary reason for the Keynesian policies of the past three years to have failed utterly. They were simply insufficient, vastly under-estimating the true economic damage wrought by the 2007-8 financial crisis (I really shouldn't be dating this financial crisis, given that it very much continues to this day). This was then a case of bluffing late and bluffing small time. I am of course happy with this failure because, as I argued before, the demographic necessity of the West was to embrace poverty either broadly through inflation or narrowly through significant write-offs in savings and investments.

So much about the Keynesian failures, but how did the Austrian School followers do in their neck of the woods? Not too well I am afraid. Austrian principles such as credit tightening in a crisis, allowing banks and companies to go bust without hesitation were observed in the exception (Lehman Brothers) rather than the rule (countless US and European banks).

Even in the case of sovereign debt, the demands for austerity (Greece) were trivial and the penalties for noncompliance, laughable ("You veel resign Mr Papanderou, ja?"). This isn't the way that free markets work.

If you really wanted to stem the moral hazard tide, the best way would have been to rescue depositors but let the banks go into administration. That would have ended up costing Ireland a fraction of what the country has spent on its banks since the beginning of 2008, primarily to mollify German bankers who had made incredibly stupid lending decisions (see (F)Ire and Ice", Asia Times Online, November 20, 2010) in the first place.

Even in the US, research has shown that in situations where private institutions purchased mortgages at deep discounts from the banks (or more likely from the Federal Deposit Insurance Corporation, which rescued the banks), the turnaround has been palpable. Mortgages have been quickly modified, some useless tenants kicked out while a majority see their payments adjusted to more affordable levels along which they also have upside participation. In contrast, the government-rescued banks still carry billions of zombie mortgages and have simply failed to address them adequately if at all.

This isn't a surprise as the banks invested government bailouts not into their decrepit operations but rather in punting across their fixed-income books, essentially loading up on a whole bunch of underpriced assets. Some of these assets rose in price, but some others have since fallen back over the course of this year.

"Those damn Europeans sold from summer," exclaimed an American banker by way of explanation of his horrific trading losses in the second half of this year. "Yes, but what were you doing with a 30x leverage position on your books in the first place?" I countered, to no avail. "What else could I do - everyone else was hiring in 2009 and management asked me why I wasn't" he replied. That is moral hazard in practice for you. A game of passing the parcel where everyone knows that the parcel contains an explosive device that may be set off by movement, time or just randomly.

The way forward
How do I expect this all to be resolved? This presupposes that I do expect this situation to be resolved in the first place, which I really can't see at this stage. Among all the worst body of options out there, it is my belief that the following combination is likely to produce the most acceptable solution from here on:
1. An unpopular Obama administration attempts to reverse the mollycoddling of US banks going toward the elections. This means a crackdown on banking system leverage, proprietary trading and a long look at jailing a bunch of bankers. This would also involve taking a couple of US banks (you know who you are) to the proverbial cleaners, in essence allowing a controlled bankruptcy of those institutions.
2. Meanwhile the Europeans simply go ahead and commit big time to Keynesian solutions, essentially overruling the German opposition. The European Central Bank indulges in significant and unlimited quantitative easing, while European governments turn their back on austerity.

In this combination, the following market impacts come through:
a. A significant decline in the value of the euro against the US dollar, perhaps approaching parity or worse;
b. A sharp decline in global stock prices followed by a sharp rally next year;
c. Rampant inflation in the Western world that helps to push up commodity prices after the initial decline;
d. Recovery in European sovereign bonds for the short-term.

In every possible way of looking at all this though, I cannot help but admit to a strong whiff of wishful thinking in all this. Oh well, it is Thanksgiving after all.

Tuesday, 22 November 2011

On Peter Roebuck by a former student

Fabian Muir

I met Peter Roebuck at boarding school when I was nine years old. It was his first summer in Sydney, having come from England in the off season to teach at Cranbrook School, where he was also a tutor in the junior boarding house.

Even then it was clear that Peter was different. Although already playing for Somerset, this thin, bespectacled Englishman seemed more bookworm than sportsman.

He would wander the halls with his hands behind his back, admonishing boys for saying they were "good" rather than "well". When he was meant to be supervising the students, he could often be found on a nearby bench, his well-developed nose buried in a tome. In the boarding house, a hostile world in which a book-burning never seemed far away, this already marked him as eccentric.

His liking for the unorthodox was further underlined by his instant friendship with another tutor, Mr Griffiths, a nutty professor with messy hair, who played the organ like Lon Chaney and crunched on bulbs of garlic as others do on apples. To this young schoolboy, they were beacons in an otherwise bleak environment.
One holiday weekend I was the only boy left in the house and Peter was "master on duty", giving him the dubious distinction of supervising me for three days. In retrospect I think he used those days to test me.
First we went to a dusty tennis court to play cricket. Subcontinental conditions, no pads, hard ball. It was a scorching summer's day, the kind that exists only in a childhood memory. Peter faced my pale imitations of Dennis Lillee and graciously allowed me to dismiss him once or twice, but I would never be one of his leatherflingers.

When it was my turn to bat, he showed less mercy. He bowled spin unlike anything I had seen before, the ball fizzing through the air like a hornet and skittling me repeatedly. We repeated the exercise in the days that followed, but my enthusiasm outweighed my talent. I failed the test.

So he tried another route. Over dinner he asked me how I felt about War and Peace, a classic question to any nine-year-old. By chance I knew the story, having taken a fancy to Natasha Rostova after seeing the epic Russian film version with my father. Peter's eyes lit up with impish enthusiasm and he began to discuss the novel. He extolled the writing and expressed his own admiration for the character of Pierre. This makes sense to me now, for Pierre was also a seeker, slightly out of place everywhere, yet deeply sympathetic.
This was the way Peter operated. He would search out your strengths and weaknesses, then work on both.
Believing he had identified a strength of mine, he nurtured it in years to come, first with reading, later with writing. He would visit the dormitory and pass me "subversive" literature, samizdat-style, to help me on my way. Narziss and Goldmund was one. His standard greeting became, "Hello Fabes, what are you reading at the moment?" I had to have a good answer ready.

I did not understand it then, but in short he was becoming a mentor, a word mentioned often in the tributes that have flowed since his death. He was naturally suited to this role, because he came from that breed of teacher who takes a genuine interest in individuals and thrills in their development. He cared.

His ability to build a very personal rapport made him born to share knowledge, be it in the classroom, on the field or in the commentary box. This is the reason why many readers and listeners felt they knew him, and this is the reason he went on to maintain contact with many students once they had completed their schooling. Our own friendship would last for over 30 years.

Mine was by no means an exceptional case. Peter built long-term friendships with a great number of former pupils, charting their growth and proud to think that he might have played a role. He often became close to their families as well. In reverse, we took equal pleasure observing Peter's own progress, first as a cricketer, coach and teacher, later as a writer, commentator and philanthropist.

Having had the benefit of reading the articles since his passing, it seems a number of professional colleagues found Peter somehow inaccessible. Many of his students and those he coached would feel differently. That is not to say they knew him fully, but it is possible that his guard was lower with people he had known from an early age.

By nature he was shy, but to say he was aloof or reclusive is to misunderstand the man. In fact the reverse was the case, for Peter's love for and curiosity about humanity gave him an insatiable appetite for new people and experience. Far from being withdrawn or, worse, elitist, he was in his element chatting to strangers. An Antiguan fruit seller, Mumbai chaiwallah or Sydney taxi driver - he would talk to anyone. More importantly, he treated them all as equals, honoured their opinions and feasted on their stories. He loved life's colour and different cultures, and understood that the big picture is about ordinary people, not celebrities. His pieces were more likely to contain a quote from his local Italian than from a player.

It was this humanist approach that so often set Peter's writing apart. It was this humanist approach that legitimised the decision to read the newspaper from the back page. Cricket, a dramatic sport that ruthlessly exposes a player's resolve and frailties, a sport that reveals more about the human condition than any other, was tailor-made for Peter's sensibilities.

Fascinated by the triumphs and follies of man, he was always trying to get beneath the surface and discover the causes. To meet him personally meant you had to be willing to answer a series of thoughtful, interested questions, which were sometimes direct but never intrusive. And he would absorb the answers. Often he would refer to remarks made during conversations that had taken place years earlier.

For those more accustomed to reading his columns and hearing his commentary, the skill of Roebuck the listener may come as a surprise. For it is a skill, an important one, especially in a world where so many people prefer to talk about themselves. Peter was a two-way street.

It seems he also had his demons. I never saw them. That he had made some mistakes is established fact. Sometimes he would make veiled references to the past, which showed that it had burdened, chastened and hurt him, but otherwise his view was to the future. It is possible that the charitable work he would go on to perform was in part born of a desire to wipe the slate clean.

It was an unusual experience to arrive at Roebuck's front door - always wide open - and peer down the corridor. His clear voice would penetrate the gloom, after which his physical form would slowly materialise in the shadows like the Tardis. I quipped about this once and his response was typically elliptic: "Only moths need bright light"

Upon reflection, perhaps something could have been read into his Bondi home, which he kept in a state of almost complete darkness. It was an unusual experience to arrive at his front door - always wide open - and peer down the corridor while announcing one's arrival. His clear voice would penetrate the gloom, after which his physical form would slowly materialise in the shadows like the Tardis. I quipped about this once and his response was typically elliptic: "Only moths need bright light."

Certainly the good he achieved far outweighed any indiscretions, but the modesty of the man meant that the broader public was unaware of much of it. Only now are people learning of the hundreds of underprivileged children who received an education through his unstinting efforts, frequently at his own expense.

This was a natural extension of his first instinct, which was always to help. Often he would do so without even asking if help were needed. He began by helping privileged children in Sydney, but moved on to the far more meaningful task of youths from Zimbabwe and India.

I asked him not so long ago whether he missed having had a family. "What do you mean?" he retorted. "I have the best family a man could want, look here." He then, glowing with pride, fetched photos of a number of his "sons" in South Africa.

For, of itself, cricket had become too small for him. Not meaningless, just small. Around 2007 we were sitting in his backyard and he said that, having become pre-eminent in his field, he had nothing left to achieve in cricket and that "my priority now is helping these kids, that's how I can really change something". If he enjoyed charting the progress of his former pupils, then charting that of the former teacher was much more rewarding.

Another word that has been recurring since his passing is "complex". It is a dangerous pastime to analyse people who are no longer able to present their own view, but it is no doubt true that he combined many qualities that appeared to be at odds with one another. Sensitive yet tough; a maverick yet a stickler for tradition; humble yet intensely proud; a great success, but with no interest in wealth; a man of coruscating intelligence, but given to faints of unexpected vagueness; an introvert with the courage to bare his opinions before millions. He was, one might say, the Morrissey of cricket writing.

In many ways he was born out of his time. Nineteenth-century England might have suited him better, where he would have dined with Sir Richard Burton or been an envoy to the Khan of Samarkand.
Perhaps the key element of the "Roebuck conundrum" was that of a private and retiring individual becoming a public figure. Had he been able to choose, he quite likely would have eschewed the limelight, but it inevitably came with the territory. More usefully, it gave him access to certain people and opportunities to pursue his humanitarian goals.

Never did the limelight's glare find him more spectacularly than when he called for Ricky Ponting's sacking in 2008. We had dinner several weeks after the article appeared and it was noticeable that a number people stared as he entered the restaurant. "I've crossed the Rubicon," he said. "People now know who I am. That was never my intention." I asked what his intention had been. "To say what I thought at that moment." In other words, to do what he always did, often as a lone voice, come hell or high water.

Peter was at times criticised for supposed inconsistency in his articles, writing one thing one week, then something rather different down the line. He also softened on Ponting. What this really showed, however, was his willingness to reconsider his initial opinion, reshape it and even admit a mistake. The same exacting standards he imposed on others he imposed twofold on himself. This was honesty not hypocrisy, a strength not a weakness.

Why was he a mystery to many who knew him? Perhaps experience of how the English media can handle public figures had made him build his walls a little higher, even in Australia. But there was a gate in those walls, which had only to be lightly pushed. Those who passed through it found themselves in a quite extraordinary garden, which revealed something new with each visit. On the 13th I wept as I was forced to accept that I had seen that garden for the last time.

I could weep again now when I think of all the lines left unwritten. Instinctively the eyes of readers will search for his column and the ears of listeners will strain for his voice - the twitches of a phantom limb. Or more accurately, the gap he leaves will hurt like a pulled tooth.

An evening with Peter was always stimulating. The wine was usually cheap but the debate was champagne. 
His mind was incisive, his humour oblique; his idea of a good joke was to ask Prime Minister John Howard on air whether he did yoga.

More often than not, our discussions did not concern cricket, rather literature, travel or politics. Sometimes we talked about relationships and the beauty of Russian girls. I know of at least one woman whom Peter loved and lost.

We also discussed death on numerous occasions. He was not preoccupied with it, but he was intrigued by cricketers who fall into a hole and contemplate suicide upon conclusion of their playing careers. Not for him, however. He believed that the simple solution lay in finding a worthwhile and satisfying alternative, something he had surely managed for himself in several fields.

He did not rule out life after death. He considered this presumptuous, for there was too much unexplained in a miraculous universe, where everything seemed possible. At our last meeting this year, he had no intention of discovering the answer anytime soon, declaring, "Death is about confronting your own mortality, but I don't have this problem because my starting point is that I'm immortal!"

Tragic events have proven otherwise, with draining suddenness. Truly immortal, however, are his words, which cannot be wrenched away from us so brutally and will remain as a permanent gift to all.

Fabian Muir is an Australian writer now based in Berlin

An Influential Economist admits the wrongness of economic dogma

Stephen King

Monday, 21 November 2011

This week I'm going to take a step back and offer my "Top 10 Beliefs Strongly Held in 2007 Which Now Turn Out to Have Been Hopelessly Wrong".

Belief No 1: Inflation targeting delivers prosperity and stability.

In the late 1980s, central bankers the world over became enamoured with inflation targeting. Scarred from the inflationary excesses of the 1970s, price stability seemed eminently desirable. Yet the single-minded pursuit of low inflation also revealed a remarkable ignorance of earlier periods of economic instability which didn't involve very much inflation, at least not of the conventional kind.

Japan had an almighty financial bubble in the late 1980s yet, relative to other nations, enjoyed a remarkably low inflation rate. The US had extraordinarily low inflation in the 1920s but, funnily enough, the decade ended with the Wall Street Crash.

Belief No 2: Japan screwed up but the West knows better

As an argument reflecting cultural and national supremacy, this takes some beating. The Japanese supposedly failed to do the right things. In particular, they didn't loosen monetary or fiscal policy until it was too late. The US wasn't going to make the same mistake. The collapse in stock prices in 2000 thus brought on a dose of the monetary vapours. US interest rates dropped dramatically as the Federal Reserve tried to prevent "another Japan". The policy worked, but only by ramping up house prices, household debt and the mortgage-backed securities market.

The US now faces a situation perhaps even worse than Japan's. The economy has stagnated, risk aversion has increased, government bond yields have plunged, the budget deficit is out of control, government debt has been downgraded, deleveraging is rife and long-term unemployment has soared.

Belief No 3: Governments don't default

Everyone knew that the emerging nations defaulted like clockwork but that developed nations were somehow different. Surely they would never treat their creditors with such disdain. It just wasn't cricket.

Yet cross-border holdings of capital had risen to unprecedented levels. And, within the eurozone, nations had lost the option of printing money. So we now have a situation where, within the eurozone, southern debtors owe money to northern creditors yet, as a consequence of the financial crisis, don't have a lot of spare cash. No surprise, then, that default has suddenly become a – previously unlikely – option.

Belief No 4: Globalisation is good for everyone

The idea was simple. As economies became ever-more integrated – through the opening up of trade and capital flows – resources would be allocated more efficiently, the global economic pie would get bigger and everyone, potentially, would become richer.

Now that western economies have stagnated, household incomes have declined and pension pots are dwindling, the argument doesn't look quite so clever. The pie has indeed become bigger – largely the result of persistent growth in the emerging world – but it's been sliced up in unexpected ways. Not everyone's a winner after all.

Belief No 5: Equities are a good long term investment

This all went wrong at the beginning of the Millennium. The FTSE 100 peaked just shy of 7,000 at the very end of 1999. That now seems a long time ago. While there's been the occasional big rally since then, the falls have been even larger. Despite the extraordinary deterioration in government fiscal positions across the world, risk-averse investors have preferred to buy Treasuries, gilts and Bunds than equities.

Belief No 6: The emerging world cannot decouple

Oh yes it can. While economic activity in the Western world is no higher than it was at the end of 2007, before the world suffered the full force of the financial meltdown, activity in the emerging world is dramatically higher. Chinese GDP, for example, is about 40 per cent higher than it was in 2007.

Belief No 7: Markets work

Some markets work, others don't. Monopolies and oligopolies can't always be broken up but anyone who's bothered to open an economics textbook knows they don't always deliver the best outcomes for society as a whole.

Belief No 8: Global markets trump national states

This was an extension of Francis Fukuyama's "End of History and the Last Man", the idea that western liberal democracies and market-driven economies had triumphed, paving the way for a new era of commonly shared values and beliefs. Yet, as we've lurched from one crisis to the next, the return of national self-interest has been remarkable, not least in the eurozone.

Belief No 9: House prices always rise

No they don't. This discovery lies at the heart of the problems now dragging down western economic activity through a process of persistent deleveraging.

Belief No 10: Nothing can travel faster than the speed of light

My defence of economists. Yes, we got a lot of things wrong. My profession hardly covered itself in glory. But if the boffins at Cern are proved right, our most fundamental beliefs about the universe may also be wrong. If Einstein couldn't get it right, it merely shows that even the cleverest human is fallible.

Stephen King is the group chief economist at HSBC

Socialism for the Rich

George Monbiot

In the documentary series which finished on Friday evening, the heiress Tamara Ecclestone set out to prove that she isn't "a pointless, quite spoilt, really stupid, vacuous, empty human being". This endeavour was not wholly successful. Channel 5 showed her supervising the refurbishment of her £45m home in London, in which she commissioned a £1m bathtub carved from Mexican crystal, an underground swimming pool complex, her own nightclub, a lift for her Ferrari, a bowling alley with crystal-studded balls and a spa and massage parlour for her five dogs, to save her the trouble of taking them to Harrods to have their hair sprayed and their nails painted. But there was something the series didn't tell us: how much of this you helped to pay for.

In court a fortnight ago, her father, the Formula One boss Bernie Ecclestone, revealed that the fact his family's offshore trust, Bambino Holdings, was controlled by his ex-wife rather than himself could have saved him "in excess of £2bn" in tax. The name suggests that the trust could have something to do with supporting his daughter's attempt to follow the teachings of St Francis of Assisi.

Ecclestone has also been adept at making use of the corporate welfare state: the transfer by the government of wealth and power from the rest of us to the 1%. After the mogul made a donation to Labour's election fund, Tony Blair demanded that F1 be exempted from the European Union's ban on tobacco sponsorship. The government built a new dual carriageway to the F1 racetrack at Silverstone.

In other countries his business has received massive state subsidies. Russia, for example, has recently agreed to build a circuit for Ecclestone to race his cars, and then charge itself $280m for the privilege of letting him use it. Working in India in 2004, I came across the leaked minutes of a cabinet meeting in which the consultancy McKinsey insisted that the desperately poor state of Andhra Pradesh – where millions die of preventable diseases – cough up between £50m and £75m a year to support F1. The minutes also revealed that the state's chief minister had lobbied the prime minister of India to exempt Ecclestone's business from the national ban on tobacco advertising.

Socialism for the rich, capitalism for the poor: that is how our economies work. Those at the bottom are subject to the rigours of the free market. Those at the top are as pampered and protected as Tamara Ecclestone's dogs.

On Tuesday George Osborne decided at last to review the private finance initiative (PFI), under which the companies building public infrastructure made stupendous profits while the state retained the risks. But if you thought that the chancellor's decision represented a wider shift in policy, you'll be sorely disappointed. Two days later he agreed to sell the state-owned bank Northern Rock to Richard Branson. Under the deal, the state keeps the liabilities while Branson gets the assets – rather like PFI. The loss equates to £13 for every taxpayer.

Someone who will not suffer unduly from being touched for £13 is Matt Ridley. As chairman of Northern Rock, he was responsible, according to the Treasury select committee, for the "high-risk, reckless business strategy" which caused the first run on a UK bank since 1878. Before he became chairman, a position he appears to have inherited from his father, Ridley was one of this country's fiercest exponents of laissez-faire capitalism. He described government as "a self-seeking flea on the backs of the more productive people of this world … governments do not run countries, they parasitise them."

The self-seeking parasite bailed out his catastrophic attempt to put his ideas into practice, to the tune of £27bn. What did the talented Mr Ridley learn from this experience? The square root of nothing. He went on to publish a book in which he excoriated the regulation of business by the state's "parasitic bureaucracy" and claimed that the market system makes self-interest "thoroughly virtuous".

Having done his best to bankrupt the blood-sucking state, he returned to his family seat at Blagdon Hall, set in 15 square miles of farmland, where the Ridleys live – non-parastically of course – on rents from their tenants, handouts from the common agricultural policy and fees from the estate's opencast coal mines. No one has been uncouth enough to mention the idea that he might be surcharged for part of the £400m loss Northern Rock has inflicted on the parasitic taxpayer. It's not the 1% who have to carry the costs of their cockups.

Even in the midst of this crisis, when the poor are being hammered on all sides, the government still seeks to transfer their meagre resources to the rich. Last month the business department listed five employment rules that businesses might wish to challenge. Among them were the national minimum wage and statutory sick pay.

On Friday, David Cameron opened negotiations with Angela Merkel over the eurozone crisis. His two principal demands were that there should be no "Robin Hood tax" on financial transactions and that the working time directive, which prevents companies exploiting their staff, should be renegotiated.

Just as instructive was what he did not discuss. In fact, as far as I can tell, none of the European leaders have yet mentioned it in their summits, even though it accounts for almost half the EU's spending. It is of course the agricultural subsidy system, which now costs British taxpayers £3.6bn a year.

We like to imagine this money supports wizened shepherds who tie up their trousers with bailer twine, but the major beneficiaries are people like the Ridleys. The more land you own, the more support you receive from the state.

The common agricultural policy is a massive state subsidy to the richest people in Europe: the aristocrats and plutocrats who possess the big holdings. British politicians pretend that it is protected only by the French. This is bunkum: in February a House of Commons committee demanded not only that the existing subsidy system be sustained but also that we should reinstate headage payments, encouraging farmers to produce food nobody wants.

Last week the Guardian exposed a system which looks like state-enforced slavery. To qualify for the £53 a week they receive in jobseeker's allowance, young people are being forced to work without pay for up to eight weeks for companies such as Tesco, Poundland, Argos and Sainsbury. Some of the nation's poorest people, in other words, are being obliged by the state to subsidise some of its richest businesses, by giving them their labour.

For the corporate welfare queens installing their crystal baths, there is no benefit cap, no obligation to work, in some cases no taxation. Limited liability, offshore secrecy regimes, deregulation and government handouts ensure that they bear none of the costs their class has inflicted on the rest of us. They live at our expense, while disparaging the lesser mortals who support them.

A fully referenced version of this article can be found on

The billionaire Virgin boss Richard Branson is no radical, he's no entrepreneur, he's just a plain old-fashioned carpetbagger

Last week, you, me and every other taxpayer in Britain each handed £13 to the billionaire Richard Branson. Not that we were told about this national whip-round. Instead, George Osborne claimed the heavily discounted sale of Northern Rock to the Virgin boss and a few of his chums represented "value for money". That's a funny way to describe a deal where taxpayers come out at least £400m poorer, but at least we now have an answer to that perennial pre-Christmas question of what to give the man who has everything.

And what do Team Branson plan to do with the Rock? Listen to Virgin Money chairman David Clementi's talk of creating "a significant banking competitor" and you'd have come away with wholesome impressions of commitment and investment. If you'd leafed through the FT this weekend, though, you'd have read about how the Virgin consortium will raid the business of its own cash to pay for the purchase – and then, as the chief investor, American financier Wilbur Ross, puts it: "We would hope to sell out a few years down the road." In other words, the business plan is to buy it cheap, strip it of assets – then flog it dear.

Hang on, you're probably thinking. Is this the same Branson who had those record shops? Who always pops up in the papers dressed as a woman or riding in a hot air balloon? Sir Richard of the Beard and the Overbite?

And the answer is: yes. Sure, Branson would like you to believe that he's the greatest iconoclast since John Calvin, leading a Reformation of established business. And if you won't buy that, he'll settle for being cast as a public-school Don Quixote for ever tilting at insiders and interest groups. Yes, the entrepreneur screws up – as with cars, cola, cosmetics and all those other discarded Virgins – but he takes risks.

The more prosaic truth is that the Virgin boss keeps himself in homes in Holland Park and Necker Island by taking taxpayer subsidies and operating heavily protected businesses. After all, you don't get much safer than a small mortgage lender that's had all its rubbish assets taken off it by the Treasury, in a market where the big banks are keeping their eyes down and their fingers crossed.

Think about the great Branson triumphs and you'll see what I mean. Virgin Rail? A monopoly on the West Coast main line, complete with initial subsidies worth hundreds of millions. Virgin Radio and Virgin Mobile? Both granted government licences to operate in a heavily restricted market. Virgin Airlines? The beneficiary of regulators' decision to strip British Airways of landing slots between London and New York and award them to the number two player. Again, a closed market where Branson has tried to keep the door shut tight against further competition.

Despite all the awards and the cosy relationships with whoever's in Downing Street, the Virgin boss neither makes anything, nor changes anything. He's no radical. The Northern Rock purchase is typical of his style: he fronts up a deal where the real money tends to come from someone else (in this case, an American and an Abu Dhabi investment firm), slaps the Virgin name everywhere and then cashes out as soon as possible. Branson isn't an entrepreneur; he's a carpetbagger.

Early in Tom Bower's splendid biography of Branson, there is a scene in which he is giving a Millennium Lecture at Oxford University in November 1999. The "lighthouse for enterprise" is asked what his great hope is for the new century, and a hush falls over the audience. What might he say? Were this Bill Gates, a picture would be painted of a software revolution. The head of Nissan might summon up a vision of Africans and Asians gaily pootling about in cheap new hatchbacks. What does the bearded visionary have in mind? "To run the national lottery."

Of course he does: a government-gifted licence to get his brand name plastered everywhere – the sort of thing Branson is always after.

But here's the thing: in his desire for sheltered money-makers, the Virgin boss differs from the rest of British business only in his desire for publicity. Look at our household names: take out retail, banks and commodities and the things you're left with bear names such as Wessex Water or Centrica or Arriva. In other words, they do things the public sector used to do – pump water or pipe gas or lay on public transport. Alternatively, they're outfits such as Serco, or Capita and they're bidding for contracts from the government; or they're engineers bidding for PFI projects. Now look at the big names in America or Germany: there are firms such as Google or Siemens.

Over here much of the private sector isn't adding anything or innovating – indeed, it's tricky to do that when you're running an administrative office or supplying water. They're simply taking contracts and cutting staffing costs.

This is a picture of lazy British business, either seeking business from the state or the protection of sheltered industries. And yet if you listen to the Conservatives, the problem with the economy is that the labour markets are too heavily regulated. No 10 lets it be known that it's taking seriously ideas to scrap laws around unfair dismissal, so that employees can be sacked without explanation.

The implication of all this is that Cameron and Osborne think the workers are to blame for the malaise of the British economy. Look at the Northern Rock deal, however, or flick through the business pages, and the opposite appears to be the case: it's business that needs to be prodded into working harder.

Monday, 21 November 2011

Love at 50: Never too old for a live-in!

Times of India - 21-11-2011

AHMEDABAD: The Mehndi Nawaz Jung Hall, one of the oldest auditoriums in Ahmedabad, could well become the ground zero of a social revolution in India.

Such was the success of the country's first live-in mela for 50-plus people here on Sunday that the organizers have now decided to hold it in Bhopal, Pune, Delhi, Kolkata and Mumbai in the next six months. At least seven couples from as far away as Assam, Karnataka and Gujarat found prospective live-in partners during the event. Many of them are planning to go on dates for a few days before they finally start living in.

"Some call our event radical, but we see it as the new thought," said Natubhai Patel, founder of Vina Mulya Amulya Seva, the NGO which organized the mela. Patel will take the live-in couples to Rajpipla on a picnic next month, where they can spend some private time.

Among the lucky ones on Sunday was Jeetendra Brahmbhatt, 62, a widower from Ahmedabad, who felt butterflies in his stomach when he met Ami Pandya, 52, a divorcee. "I have all the luxuries in life, but I wanted somebody to share my feelings with and find an emotional connect," said Brahmbhatt."I need someone whom I can enjoy life with, go shopping and watch movies," said Pandya, who had brought her 25-year-old daughter along. Brahmbhatt is a consultant to an MNC, and his son is a successful professional in Tokyo. The duo will date for a few days.

"At my age, sex is not a consideration. What I need is company, a person with whom I can live with for the rest of my life," said Natu Thakkar, 60, who owns a rice mill in Bavla, and found a livein partner in Jyotsna Dave, 53.

More than 350 people, including 70 women, turned up at event seeking to explore live-in relationship. People from Delhi, Assam, Punjab, Madhya Pradesh, Tamil Nadu, West Bengal, Karnataka, Maharashtra and even NRIs came in the hope of finding companionship. The maximum entries were from Gujarat, especially small towns where the elders have been left alone by their kin settled abroad. If this experiment is successful, live-in may not be a taboo word in the country.

The event drew enthusiastic participation, with women seen decked up with make-up and expensive saris and men attired in formals and suits.

Participants came from all walks of life: from journalists to businessmen, from singers to company directors, and from farmers to teachers. The process was simple - every participant came on to the stage wearing a numbered badge and information about him or her was provided by the announcer. The details announced included age, caste, education, employment profile and financial standing. Participants were asked to note the numbers of potential matches.

After introductions, the women were given the power to call the shots. They met prospective matches for five minutes each and exchanged pleasantries and information. Once this was done, participants stated their preference and pairs were announced. Organizers had laid two rules: participants had to be financially settled and had to have secured the consent of their children, if any, for the process.

"While some took the decision pretty quickly about probable partners, others weighed all available options," said an organizer of the event. "Interestingly, most participants stated that they had come to the event to find a friend and a companion in the evening of life and thus caste or age was no bar." Indeed, many participants ventured out of their comfort zone and explored matches from other castes and age groups.

Hindus, Muslims, Sikhs, Christians and Parsis attended the event. Mohammed Ismail Shaikh, 56, a resident of Jivraj Park, Vejalpur, told TOI: "After the demise of my wife, I was feeling lonely." He said his children were busy with their careers.

Prabhat Rawal, 78, had come from Veraval. "Some laughed at the idea and asked why this at such an age but I say, why not," Rawal said. "I am well-off financially and want to enjoy the remaining years of my life with someone."


It's not about sex

Pritish Nandy
20 November 2011, 03:02 PM IST
Sex is as much a part of politics as of life. So sex scandals never bother me. You see them everywhere. Sometimes, open and brazen, as in the case of Silvio. Most times, they are sneaky and covert as in Narain Dutt Tiwari's case. But whatever they are, these sex scandals expose our own hypocrisy. Why on earth would we expect our leaders to be saints and, if not saints, celibates? Are they pursuing a profession or a religious order? If they are our representatives, they will have all our faults and foibles as well.

The truth is: People today have illicit sex all the time, and many among us have it among our own gender. No one quite knows how this promiscuity came about. Some blame popular culture. Others say, our popular culture merely mirrors the way we actually are. It's stupid to expect that our politicians will be any different from us. If they were, it will only make them worse. If you ask me, it's their sexual pursuits that make them human. Take that out and all you are left with is just greed: An obsessive greed for money and power. Grabbed, not earned.

So what bothers me is not sex. Not even sleaze. For one man's sleaze is another's pleasure. What bothers me is where many of these sexual encounters eventually lead. They seldom remain just encounters between consenting adults, as all sex ought to be, licit or illicit. They spiral down into a dark hell of depravity, violence and crime. Crime so brutal that the sexual part  of it seems like just a minor distraction.

The abduction and possible murder of Bhanwri Devi, a small town nurse who was having an affair with a minister, recently caused so much upheaval that the Rajasthan Chief Minister had to dump his entire cabinet. The Gehlot ministry was never much known for its rectitude and efficiency. But what dropped it wasn't its corruption or its ineptitude. What dropped it was a horrible story of deceit, extortion, abduction, and (in all likelihood) murder. For Bhanwri Devi, who was in the eye of the storm, is now missing and was last seen abducted by hired goons with a contract to kill. 

It's not just Bhanwri Devi. Every day you read about many such cases. The starting point may be sex. Or sexual attraction. But where it leads to is unspeakable hell. Acid attacks. Slashing. Abductions. Brutal violence. Khap incited murders. It is one endless spiral of horror with each story worse than the other. At the heart of it all is just one obsession: Sexual dominance. Power.

What disturbs me is the fact that sex, one of the most wonderful things India taught the world to celebrate, is now just another instrument of power men keep using to harass, intimidate, dominate, and commit violence on women. So girls wearing jeans are attacked outside their colleges. So are girls drinking in bars. Or out on dates. When the men accompanying them try to resist, they are stabbed, murdered. Mumbai is still reeling under the impact of the ghastly killing of two young men, Keenan and Reuben, who tried to protect their girlfriends from being molested by a bunch of local hoods. There is that horrible case of a policeman who picked up a college girl on Marine Drive where she was sitting with one of her classmates and raped her in the police chowky right there, in broad daylight.

No, it has nothing to do with sex. This is about power. Sex is only a pretext. The obsession with power leads to such disgusting, violent crime. It shows how perverse our notion of manhood is, how emasculated we are as men that we seek to prove our manhood by attacking helpless women. Or try to disempower them by idiotic laws that seek to prevent them from working in bars beyond 9 pm. As the demand for greater representation in politics from women's groups grows, so does the violence. You see it even in the virtual world these days. Women are constantly harassed, intimidated, stalked on the net.

But don't discredit sex for this. Discredit the genes that make us men believe every woman is easy game. And when she says no, she must be taught a lesson. No, it's never about sex. It's only about power. And the abuse of power is what politics is all about.

Saturday, 19 November 2011

To secure credit, Europe finds global financial markets no longer attuned to Western interests

Joergen Oerstroem Moeller 

The eurozone crisis has not only raised questions about the viability of the common currency, but could also jeopardize an economic model that has so far reigned supreme. The course taken to resolve the crisis in Europe will have long-term impact on the most vibrant parts of the world – from Asia to Latin America.

In developed countries of the West, debtors have run up a high debt ratio to gross domestic product, even while economic growth was high Рoverspending when they should have saved. They borrowed to spend more, demonstrating a disastrous failure to grasp basic economic principles as well as flaws in moral behaviour and ethical judgment. Among these borrowers are established heavyweights Рthe United States, most European nations and Japan. The United States, one of the wealthiest countries, became an importer of capital instead of exporting capital, registering its last balance vis-à-vis the rest of the world in 1991.

After accumulating savings over several decades through prudent and cautious policies, the creditors sit on a large pile of reserves with low domestic debt and government deficits. These reserves are largely held by emerging countries with China at the forefront. As a paradox, the emerging economies have taken it upon themselves to lend to the richer countries – exporting capital almost as vendor’s credit. Indeed, this reversal of roles is one explanation for the global financial crisis. The global monetary system is not geared to function under such circumstances.

This development was framed by the so-called Washington Consensus of the 1980s – a neoliberal formula that spurred globalisation by promoting liberalization of trade, interest rates and foreign direct investment; privatisation and deregulation; as well as competitive exchange rates and fiscal discipline. Fundamental flaws were exposed, raising the question about which economic model might replace it.

There are two possibilities in this competition: One strategy is from the United States and a group of Democrats who suggest that more short-term borrowing and spending could lead to growth, tax revenues and exit from recession – even if the debt grows and deficits become permanent. A breakthrough by the US Congressional super-committee to make substantial cuts over the next 10 years won’t fundamentally change this stance, merely reducing rather than eliminating the deficit. The Europeans have taken the opposite view: They advocate starting the recovery by reducing deficits and debt even if that seems counterproductive for economic growth in the short run. The Europeans are also raising taxes across the board, regarded as indispensable for restoring balance in government budgets.

The results of either plan won’t be known for a few years. Chances are, however, that the European policy will carry the day for the simple reason that creditors call the tune. It’s highly unlikely that creditors favour continued reliance on deficits as the inevitable consequence will be inflation, eroding the purchasing power of their reserves. Indeed, the Chinese rating agency Dagong has announced that it may cut the US sovereign rating for the second time since August if the US conducts a third round of quantitative easing.

Early in the crisis, as Europe set up a stabilizing bailout fund, there were rumours in the market that China, Russia and Japan might rescue of the euro, either by buying European bonds or going through the International Monetary Fund. It’s unclear how China wants to proceed with such an undertaking, but Russia and Japan have allegedly acted to do that through the International Monetary Fund or by buying European bonds.

Countries with surpluses do not dream of rescuing the euro; they act in their own interest. Economically they prefer the European fiscal discipline, reasoning that American prodigality will shift much burden of adjustment onto them. They may dread being left with the US dollar as the only major international currency, forcing them to endure, at times, whimsical policy decisions by the Federal Reserve System, the US Treasury Department or US Congress. The euro and the European Union are seen, and indeed needed, as a counterweight. The EU may look weak, but it’s a respectable global partner, offering the euro as an alternative to the dollar and serving as a major player in trade negotiations and the debate about global warming, just to mention a few examples.

It can be expected that other nations will step forward to support the euro. But at what price? What conditions, if any, will be put on the table and will the Europeans consent? A case can be made that, as creditors undertake investments to help the euro, they actually help themselves, and there are no reasons why the eurozone should pay any price. We can expect a game of hardball, in which nerves matters, and who gives what to whom may not be clear at all.

Another question has arisen about who decides and who is in charge. The G20 meeting in Cannes revealed a growing consensus to stop the financial houses amassing and subsequently abusing power. If the global financial system is big enough to force Italy into a default-like situation, many countries are surely asking whether they’ll be next. The big financial houses are viewed by many as irresponsible stakeholders, if stakeholders at all. Consider, the US government is suing 18 banks for selling US$ 200 billion in toxic mortgage-backed securities to government-sponsored firms, the Federal National Mortgage Association and the Federal Home Mortgage Corporation, known as Fannie Mae and Freddie Mac. In April 2011 the European Commission initiated investigations into activities of 16 banks suspected of collusion or abuse of possible collective dominance in a segment of the market for financial derivatives.

The market has muscled its way in as judge about whether a country’s political system or economic policy are good enough. But the market is neither a single institution nor a broad, balanced mix of diverse players. It’s become a small group of large financial institutions, the power of which overwhelm what even big countries can muster: 147 institutions directly or indirectly control 40 percent of global revenue among private corporations. A sore point is that they pursue profits without concern over implications for countries and societies. Rather than let measures work, these financiers force the issue here and now, even as they speculate against efforts, many admittedly delayed and inadequate, to resolve debt crises. Financial institutions holding sovereign bonds that could default insure themselves by buying a credit default swaps. What seems like prudent corporate governance becomes a shell game as these obligations are traded among financial institutions, some of which don’t hold sovereign bonds in their portfolios – all of which heightens interest in forcing default.

The temptation to roll back economic globalisation inter alia by breaking up the eurozone or restricting capital movements has been resisted. Economic globalisation is holding firm.

Creditor countries can set the course on future economic policies – likely highlighting fiscal discipline. While the West had vested interest in the big financial houses, the incoming paymasters do not, and they can be expected to increase their control over investment patterns. This can be done either by setting up own financial houses or buying into Western financial institutions as was the case in the slipstream of the 2008 global debt crisis.

The global financial market is changing course, away from looking after Western interests and acting in accordance with corporate governance as defined by the West toward a more global outlook guided by the interests of new group of creditors.

Joergen Oerstroem Moeller is a visiting senior research fellow, Institute of Southeast Asian Studies, Singapore, and adjunct professor, Singapore Management University and Copenhagen Business School.

Wednesday, 16 November 2011

Criticism of Schumacher - if you curtail growth, living standards drop

Schumacher was no radical – if you curtail growth, living standards drop

By suggesting it's better to be economically poorer and spiritually richer, Schumacher ignores links between growth and wellbeing
A customer inspects washing machines at a supermarket in Wuhan, China
Consumer revolution … a customer inspects washing machines at a supermarket in Wuhan, China. Photograph: Darley Shen/Reuters

EF Schumacher's Small is Beautiful is widely viewed as a humanistic and radical tract. Nothing could be further from the truth. Viewed in its proper context it is both profoundly anti-human and deeply conservative.
The central idea in Schumacher's text is that there is a natural limit to economic growth. As he put it: "Economic growth, which viewed from the point of view of economics, physics, chemistry and technology, has no discernible limit, must necessarily run into decisive bottlenecks when viewed from the point of view of the environmental sciences."

Schumacher objected to organising the economy on a large scale precisely because he believed that more prosperity would damage the environment. He correctly understood that small-scale communities cannot produce nearly as much as those operating on a regional or global scale. A modern car, for example, typically relies on components, raw materials and know-how from around the globe. From the perspective of Schumacher's "Buddhist economics", it is better for people to be poorer in economic terms if they can be spiritually richer.

This argument flies against a huge weight of evidence showing that material advance is closely bound up with progress more generally. The past two centuries of modern economic growth have seen huge advances in human welfare along with technological innovation and social advance. Perhaps the most striking single indicator of this improvement is the increase in human life expectancy from about 30 in 1800 to nearly 70 today. Note that this is a global average, so it includes the billions of people who live in poor countries as well as the minority who live in rich ones.

Almost every other measure of wellbeing has increased hugely over the long term, including infant mortality, food consumption and level of education. Most of humanity, even in the developing world, has access to services our ancestors could only have dreamt of, including electricity, clean water, sanitation and mobile phones.

None of the arguments used by Schumacher's followers to counter this narrative of progress are convincing. Greens often side-step the broader case for growth by deriding the accumulation of consumer goods and services. Environmentalist arguments have more than a tinge of elitism, with comfortably middle-class greens scoffing at the masses for wanting flat-screen televisions and foreign holidays. It should also be remembered that some consumer goods, such as washing machines, have directly led to huge improvements in human welfare.

Anti-consumerism reveals more about the narrowness of the green vision than it does about economic growth. Viewing rising prosperity simply in terms of consumer goods is incredibly blinkered. Growth provides the resources for much else including airports, art galleries, hospitals, museums, power stations, railways, roads, schools and universities. Popular prosperity provides the bedrock for much that we value in contemporary society.

Another common green rebuttal to the benefits of growth is to point to the existence of inequality. Of course it is true that there are huge disparities both within countries as well as between the developed and developing world. The key question, however, is how best to tackle the problem. From Schumacher's perspective it is desirable to reduce the living standards of everyone except the poorest of the poor. His is a narrative of shared sacrifice and lower living standards for almost all. The alternative vision, the traditional position of the left, was to argue for plenty for everyone.

Finally, there is the argument about the environment itself. The most popular variant of the idea of a natural limit nowadays is that growth inevitably means runaway climate change. However, there is plenty of evidence to the contrary. There are many forms of energy, including nuclear, that do not emit greenhouse gases. There are also ways to adapt to global warming such as building higher sea walls. Since such measures are expensive it will take more resources to pay for them; which means more economic growth rather than less. If anything the green drive to curb prosperity is likely to undermine our capacity to tackle climate change.
Schumacher's fundamentally conservative argument chimes well with those who want to reconcile us to austerity. It suits those in power for the mass of the population to accept the need to make do with less. Under such circumstances it is no surprise that David Cameron, like his international peers, is keen for us to focus on individual contentment rather than material prosperity.

It is hard to imagine a more anti-human outlook than one advocating a sharp fall in living standards for the bulk of the world's population.

Pigeonholing protesters as anti capitalist will only allow those who are against reform to avoid the issue

Singapore central business district
In Singapore 'a staggering 22% of national output is produced by state-owned enterprises'. Photograph: Luis Enrique Ascui/Reuters

The Occupy London movement is marking its first month this week. It is routinely described as anti-capitalist, but this label is highly misleading. As I found out when I gave a lecture at its Tent City University last weekend, many of its participants are not against capitalism. They just want it better regulated so that it benefits the greatest possible majority.

But even accepting that the label accurately describes some participants in the movement, what does being anti-capitalist actually mean?

Many Americans, for example, consider countries like France and Sweden to be socialist or anti-capitalist – yet, were their 19th-century ancestors able to time-travel to today, they would almost certainly have called today's US socialist. They would have been shocked to find that their beloved country had decided to punish industry and enterprise with a progressive income tax. To their horror, they would also see that children had been deprived of the freedom to work and adults "the liberty of working as long as [they] wished", as the US supreme court put it in 1905 when ruling unconstitutional a New York state act limiting the working hours of bakers to 10 hours a day. What is capitalist, and thus anti-capitalist, it seems, depends on who you are.

Many institutions that most of us regard as the foundation stones of capitalism were not introduced until the mid-19th century, because they had been seen as undermining capitalism. Adam Smith opposed limited liability companies and Herbert Spencer objected to the central bank, both on the grounds that these institutions dulled market incentives by putting upper limits to investment risk. The same argument was made against the bankruptcy law.

Since the mid-19th century, many measures that were widely regarded as anti-capitalist when first introduced – such as the progressive income tax, the welfare state, child labour regulation and the eight-hour day – have become integral parts of capitalism today.

Capitalism has also evolved in very different ways across countries. They may all be capitalist in that they are predominantly run on the basis of private property and profit motives, but beyond that they are organised very differently.

In Japan interlocking share ownership among friendly enterprises, which once accounted for over 50% of all listed shares and still accounts for around 30%, makes hostile takeover very difficult. This has enabled Japanese companies to invest with a much longer time horizon than their British or American counterparts.
Japanese companies provide lifetime employment for their core workers (accounting for about a third of the workforce), thereby creating strong worker loyalty. They also give the workers a relatively large say in the management of the production process, thus tapping their creative powers. There are heavy regulations in the agricultural and retail sectors against large firms, which complement the weak welfare state by preserving small shops and farms.

German capitalism is as different from the American or British version as Japanese capitalism, but in other ways. Like Japan, Germany gives a relatively big input to workers in the running of a company, but in a collectivist way through the co-determination system, in which worker representation on the supervisory board allows them to have a say in key corporate matters (such as plant closure and takeovers), rather than giving a greater stake in the company to workers as individuals, as in the Japanese system.

Thus, while Japanese companies are protected from hostile takeovers by friendly companies (through interlocking shareholding), German companies are protected by their workers (through co-determination).
Even supposedly similar varieties of capitalism, for example Swedish and German, have important differences. German workers are represented through the co-determination system and through industry-level trade unions, while Swedish workers are represented by a centralised trade union (the Swedish Trade Union Confederation), which engages in centralised wage bargaining with the centralised employers' association (the Confederation of Swedish Enterprise).

Unlike in Germany, where concentrated corporate ownership has been deliberately destroyed, Sweden has arguably the most concentrated corporate ownership in the world. One family – the Wallenbergs – possesses controlling stakes (usually defined as over 20% of voting shares) in most of the key companies in the Swedish economy, including ABB, Ericsson, Electrolux, Saab, SEB and SKF. Some estimate that the Wallenberg companies produce a third of Swedish national output. Despite this, Sweden has built one of the most egalitarian societies in the world because of its large, and largely effective, welfare state.

And then there are hybrids that defy definition: China, with its large socialist legacy, is an obvious case, but Singapore is another, even more interesting, example. Singapore is usually touted as the model student of free-market capitalism, given its free-trade policy and welcoming attitude towards multinational companies. Yet in other ways it is a very socialist country. All land is owned by the government, 85% of housing is supplied by the government-owned housing corporation, and a staggering 22% of national output is produced by state-owned enterprises. (The international average is around 10%.) Would you say that Singapore is capitalist or socialist?

When it is so diverse, criticising capitalism is not very meaningful. What you have to change to improve the Swedish or the Japanese capitalist systems is very different from what you should do for the British one.
In Britain, as already physically identified by the Occupy movement, it is clear the key reforms should be made in the City of London. The fact that the Occupy movement does not have an agreed list of reforms should not be used as an excuse not to engage with it. I'm told there is an economics committee working on it and, more importantly, there are already many financial reform proposals floating around, often supported by very "establishment" figures like Adair Turner, the Financial Services Authority chairman, George Soros, the Open Society Foundations chairman, and Andy Haldane, the Bank of England's executive director for financial stability.

By labelling the Occupy movement "anti-capitalist", those who do not want reforms have been able to avoid the real debate. This has to stop. It is time we use the Occupy movement as the catalyst for a serious debate on alternative institutional arrangements that will make British (or for that matter, any other) capitalism better for the majority of people.