Friday, 29 May 2015

Hotel Kerala-fonia

Confronting Islamism in the Indian Subcontinent

Children used to be scared of the dark – now they fear failure

Tim Lott in The Guardian

Many facets distinguish the minds of children from those of adults, among them imaginative capacity, the repression of reason and the mysterious condition of innocence. But perhaps one of the most telling divisions is between the things adults fear and those that worry children.

I recently asked one of my youngest daughters what she feared most. She answered without hesitation: failure. This disturbed and surprised me. I had always thought of fear of failure as an adult preoccupation, but it seems that one of the effects of the climate of the times (and the media saturation that expresses it) is the importation of adult fears to childish minds. The fear of ghosts is being replaced by the terror of underperformance.
This “adultisation” of fear is underlined by a survey I came across on the internet suggesting that children’s fears had changed considerably over the past few generations. In this survey, from Johns Hopkins University in Baltimore, the top five fears 30 years ago were animals, being in a dark room, high places, strangers and loud noises. In the updated survey, kids were afraid of divorce, nuclear war, cancer, pollution, and being mugged.
A more recent poll, carried out in the UK a little over a year ago, points up some enduring traditional fears, including spiders and bugs, witches, the dark and clowns. However, being bullied, being approached by strangers and school performance all featured.
Children’s fears are a litmus test of the society we live in and they are clearly changing – becoming more concrete – as society becomes more performance-driven, insecure and saturated with threatening, upsetting facts. Refreshingly, missing from either of the lists was fear of terrorist attack or paedophile abduction – the sort of thing parents have nightmares about – but it is clear that the imaginative arena of anxiety is undergoing a transformation and perhaps an intensification.
I don’t know what to do about fear, given I suffer fair amount of existential fear myself, even knowing, as I do, that fear for the most part is useless. “To conquer fear is the beginning of wisdom,” said Bertrand Russell, but unless one is singularly lacking in imagination, one never conquers fear completely.
I was once asked what single piece of advice I would proffer my 17-year-old self and the answer I came up with was, “Don’t be so afraid.” Nevertheless, I spent much of my early years frightened, like my daughter, of failure or rejection. Many of my later years, too.
Fear can be shameful. The film that most recently gave me the chills was Force Majeure in which a father runs away from his wife and children when he is faced with a situation of sudden danger. My secret terror – and I imagine the fear of many men – is that some ignoble primal instinct in such a situation would render me similarly unheroic. How would one live with oneself after that?
I cannot sincerely tell my children there is nothing to be afraid of in life. What I can say with conviction is that fear, for the most part, is useless. It tarnishes your soul, yet does nothing to protect you against the situation you are anxious about. It is the most terrible waste of time. I agree wholeheartedly with Aung San Suu Kyi – “The only real prison is fear and the only real freedom is freedom from fear.”
Courage is not being free from fear, however. Courage is not allowing fear to distort your purposes and cramp your life. We all have secret fears and to deny it is to deny some essential element of our personalities. But if you can do one thing for your children, show them bravery, so that they learn bravery themselves. For courage is the wellspring from which an authentic life flows.

The Rohingyas - The forsaken people

Natasha Shahid in The Friday Times

Who are the Rohingya people and why does everyone disown them? Natasha Shahid attempts to answer these questions 

Outsiders in their own country

“The Rohingya come from Burma, but for many years have fled repression there to Bangladesh, Thailand, Malaysia, and Indonesia. […] Primarily because the Burmerse government denies them citizenship, most are stateless.” – David Mathieson,Perilous Plight: Burma’s Rohingya Take to the Seas

Of the approximately two million Rohingya alive today, 800,000 live in Burma, 200,000 in Bangladesh, 50,000 in Malaysia and around 500,000 live scattered over the Middle East, where they went looking for work. But can the Rohingya call any of these countries their home? Their treatment by the two proposed countries of their origin – Burma and Bangladesh – does not suggest so: while one has a majority tied up in refugee camps, the other is bent upon killing them to the last man. What did the Rohingya do to deserve this fate?

Rakhine, the state where most of the Rohingya community is settled

History of the Rohingya People

The origins of the Rohingya people are disputed. Followers of Islam and belonging to the Indo-Aryan stock, they themselves say that they are natives of Rakhine, the south-western Burmese state which shares its northern border with Bangladesh. Others suggest that they are of Bengali origins, and that their language is a derivative of the Bengali language. Alistair D. B. Cook suggests that their movement originated in the Middle East, and brought them to Rakhine after crossing the rest of South Asia.

Whatever their origins, most scholars agree that the Rohingya have been residents of Burma since around the 15th century AD. Archaeological evidence reportedly suggests that the Rohingya have lived in the country since the times of the Kingdom of Mrauk U (1425 AD – 1785 AD). And yet the Burmese government insists that they are not one of their “historical ethnic groups”: the major reason behind their persecution at the hands of the Burmese authorities.

One of the many boats floating on the Indian Ocean, with no country willing to let it anchor

What did the Rohingya do to deserve this fate?

Under British rule, Bengalis were encouraged to repopulate the fertile region of Arakan (now Rakhine), and the boundaries between Bengal and Arakan were removed. So, in all practicality, Bengal and Arakan became a single state making it easier for the Bengali people – who were majority Muslims – to travel to and from Arakan. This migratory trend resumed at the time of the Bangladesh Liberation Movement in 1971, when many Bengalis fled their country and settled in Arakan, instead. The Burmese government insists that most of the people who form the Rohingya community today belong to this stock: another reason behind their attempts to expel the community from the country.

During the Second World War, Japan successfully captured Burma but the British fought the Japanese invading forces on Burmese soil. After the Japanese were ousted, Burma’s Rohingya formed a political party – Arakan Muslim League – which started a political movement to be absorbed into East Pakistan at the time of the Partition of India. The party sent a request to Mohammad Ali Jinnah, himself, in May 1946 to include Arakan in his partition plan. Jinnah turned the request down, replying that he could not intrude in Burmese affairs.

Apparently Jinnah’s rejection led the Rohingya to abandon their political cause, not seeing any use in pursuing it. They decided to take up arms, instead. The target of this armed movement, termed by the Rohingya as a jihad, was at first the separation of the Mayu region in the north of Arakan – where most of their population resided – and its annexation with East Pakistan. When the Burmese government refused to cater to these demands, the Rohingya mujahideen declared jihad on their own government. There was a time when these armed rebels controlled almost all of northern Arakan, forcing the non-Rohingya inhabitants of the state to flee their homes.

This jihadist movement continued for about a decade before the Rohingya rebels finally laid arms between 1957 and 1961, primarily as a result of a military operation initiated to crush the uprising. This is when the displacement of the Rohingya began, which continues to this day.

Another abandoned boat

The Rohingya’s Current Status

After being crushed by the Burmese government in the 1960s, the Rohingya rebellion re-immerged at the time of the East Pakistani separatist movement. At the moment, it is believed to be receiving aid from Islamic terrorist groups such as Al-Qaeda and the Tehrik-i-Taliban, and even from some countries, including Pakistan.

The recently accelerated attempts of the Burmese government at the genocide and expulsion of the Rohingya people has brought the country into the international spotlight – for all the wrong reasons. The persecution of the Rohingya, especially under the nationalist, pan-Buddhist military rule (1962-2011) has had terrible repercussions for the community. General Ne Win, the first military ruler of Burma who assumed control of the country in 1962, expelled Muslims – all Muslims, not just the Rohingya – from the army, and in 1982, under a new citizenship law, the Rohingya were declared as non-nationals.

It didn’t stop with the government: Burma’s citizens – mostly Theravada Buddhists – had an equal share in victimizing the Rohingya people. It was the Buddhist monks who initiated an anti-Muslim movement in 2001, in which pamphlets like Myo Pyauk Hmar Soe Kyauk Sa Yar (“The Fear of Losing One’s Race”) were distributed in the common public. In the same year, 200 Muslims were killed and 11 mosques were burnt down by common Burmese citizens. It is said that this movement was in retaliation to the destruction of the Buddhas of Bamiyan in March, 2001 by the Taliban. The claim is very likely true, as the Burmese government brought down two mosques – Han Tha Mosque and Taungoo Railway Station Mosque – on the demands of angry Buddhist monks, who wanted to “avenge” the destruction of the Bamiyan Buddhas.

Clearly Muslims aren’t the only ones who are over-sensitive about their religion.

Since 2012, there have been repeated anti-Muslim riots in Rakhine and elsewhere in Burma that have claimed the lives of hundreds of Muslims. An anti-Muslim riot can be sparked in Burma for a reason as little as a Facebook photograph, or for no reason at all – it’s like a haystack simply waiting to catch fire.

Verbal abuse: a member of the Burmese bureaucracy once termed the Rohingya “ugly as ogres”


With the state of their lives in Burma, the Rohingya Muslims have no option but to leave their home country – if they can call it that. But where would they go? At the moment, they don’t seem to care. The Rohingya are fleeing Rakhine by the boatful whenever they can, even though they know their journeys do not have any destination. Many have fled to Bangladesh, where they are being kept in refugee camps. Many have managed to make it to the Middle East and Japan, while some have even reportedly made it to Karachi. These are the lucky ones.

The unlucky ones? They are stranded mid-sea with nowhere to go. We can only imagine what the state of their lives in their native country must have been for them to rather float endlessly in the middle of salty waters with no food to eat and no water to drink.

Shoddy Science - Study showing that chocolate can help with weight loss was a trick

Kashmira Gander in The Independent

A journalist seeking to lay bare how the research behind fad diets can be “meaningless” and based on “terrible science”, has revealed how he tricked international media into believing that chocolate can aid weightloss.

Posing as Johannes Bohannon, Ph.D, the research director of the fabricated Institute of Diet and Health, biologist and science journalist John Bohannon ran what he called a “fairly typical study” used in the field of diet research.

German broadcast journalists Peter Onneken and Diana Löbl asked Bohannon to conduct a clinical trial into the effects of dark chocolate, as part of a documentary exposing how simple it is for bad science to make headlines.

“It was terrible science. The results are meaningless, and the health claims that the media blasted out to millions of people around the world are utterly unfounded,” Bohannon wrote of his in an article for

To collate their data, the team asked 5 men and 11 women aged between 19 to 67 to follow either a low-carbohydrate diet, or the same diet but with an added 1.5oz of dark chocolate. Meanwhile, a control group were asked to eat as normal.

While the data showed that the group which ate a low-carb diet while indulging in dark chocolate lost weight 10 per cent faster and had better cholesterol readings, Bohannon stressed that the study was set up for failure.

“Here’s a dirty little science secret: If you measure a large number of things about a small number of people, you are almost guaranteed to get a “statistically significant” result.”Bohannon explained that thanks to a method known as "p-hacking", the study could have just as likely shown that chocolate helped sleep or lowered blood pressure as the threshold for data being classed as "significant" is just 0.05 per cent.

The study could have just as likely shown a positive effect on blood pressure than weight loss, says Bohannon (Photo: Getty Images)THE STUDY COULD HAVE JUST AS LIKELY SHOWN A POSITIVE EFFECT ON BLOOD PRESSURE THAN WEIGHT LOSS, SAYS BOHANNON (PHOTO: GETTY IMAGES)

After a journal was duped into accepting the shoddy study for money, Bohannon and his colleagues then put together a press release which would be irresistible to journalists and editors looking for a story.

The research was splashed across newspapers and websites across 20 countries in half a dozen languages, seemingly proving how easily dodgy science can circulate across the world’s media.

However, some have questioned the ethic behind the study, with one commenter writing below the piece:
"Going out of their way to court media coverage (that was going to repeat the story but never, ever follow up on the hoax once it was revealed — and this is a hoax) was ethically problematic,” one commenter said.

"If you want to uncover the shady workings, that didn’t really help. It seems like only the people who were already aware of the problems are going to be reached by this reveal."
The stunt came after Bohannon exposed how “open access”science journals were willing to publish deeply flawed research claiming that a drug had anti-cancer properties.

In the investigation for the prestigious journal Science, he revealed the dangers of abandoning the peer-review process expected in science publishing.

Tuesday, 26 May 2015

A Canadian's views on India

Tarek Fatah chats about his four-months visit to Hindustan - Bilatakalluf with Tahir Gora Ep10

Bilatakaluf with Tahir Gora TAGTV EP 07 - Is MQM victim or part of establishment?

Missing Virender Sehwag?

I think I am missing Virender Sehwag. To be fair, this is a wonderful bunch of young players and they are carrying the baton delivered to them by an extraordinary group. I find Ajinkya Rahane most pleasing to the eye, Rohit Sharma’s 264 was an audacious innings that stretched our imagination, the fielding is better than it has been and there are fast bowlers out there who don’t aspire to be medium-pacers. And I will tell people when I am old that I saw Virat Kohli bat. Cricket is still great fun but I am missing Sehwag.

Sehwag had me sitting on the edge of my seat. Always. It was like watching a thriller except that when you watched it the next time, you still didn’t know what was coming next. He was jaw-dropping, he was hair-wrenching. You rolled your eyes and you threw your head back. You looked at the scoreboard and it always showed you a different number. He could be exhilarating, he could be frustrating. He took you on a joyride and he laughed while you held on to your seat in fright.

I always thought Sehwag played cricket the way it was originally meant to be played. The numbers happened. 8586 runs in Test cricket @ 49.34 with 23 centuries. Those were brilliant numbers but we don’t need them to explain Sehwag. Or to fight his case in an argument. In cricket’s most native form, the bowler bowls to get a batsman out and the batsman plays to hit the ball. You got the feeling Sehwag didn’t worry beyond that. Only if he couldn’t hit the ball, he blocked it. You hardly ever analysed Sehwag’s innings, you just enjoyed them.

But he wasn’t a blind basher. Talking to him about cricket, and sadly those moments were too rare, you always came away thinking you had spoken to someone with an uncluttered, confident mind. “The batsman is always scared,” he once said, “but the bowler must be too. He must also think, if I bowl a bad ball where will Sehwag hit me!” The thinking behind that is clear and it has the simplicity that is disarming. If the bowler knows the batsman isn’t going to hit him, he isn’t afraid of bowling a bad ball. But he is most likely to bowl a bad ball when he is afraid of the consequences of bowling one.

We often talk, in sport, of playing to the fear in the enemy camp. Often we never get that far because of the fear in our own mind. A tense cricket match is as much about managing skill as it is about managing fear. There is scarcely a calm mind on a big day. Maybe that is why Sehwag was the most feared man in an India-Pakistan match. He played with a smile, with a song on his lips but also with a calm mind, letting fear brew within the opposition. In 9 Test matches, he made 1276 runs @91.14. It would have been interesting to have measured his pulse, especially in relation to everyone else’s!

He told us, too, that it was okay to hit in the air, to hit over the top and in doing so, he recalibrated risk for all of us. We were always told, from club cricketers to Test players, that hitting in the air was inviting another mode of dismissal. For years we accepted that as the gospel, like good boys we didn’t challenge it.

But Sehwag happily hit over the top, he played into the gap over the fielder’s head where everyone confined themselves to seeking the gap between fielders. Yes, it was still risky but with new bats, it was nowhere near as threatening as everyone believed it was.

And so he has left behind a treasure of good cheer. Which among those was his best? 201* out of only 329 against Sri Lanka when everyone else was playing on a minefield and he was on the highway? 319 against South Africa from only 304 balls while chasing 540? 309 at Multan? 254 at Lahore? That ridiculous 293 from 254 balls in Mumbai when he ended day 2 at 284 not out while still in the field at the start of play? Or was it that 83 from 68 balls with India chasing 387 to win a Test? Would anyone in the world hit eleven 4s and four 6s against a target that had only so rarely been achieved in cricket history? Sehwag often talks about facing the ball, not the bowler or the situation. Surely it had to be that way that day!

I don’t know how much I am going to see of him. I absolutely enjoyed seeing him play for the Kings XI in the IPL but what of India? Maybe the eyes aren’t seeing the ball the same way, maybe the feet are heavier, maybe the bat isn’t as charged with freedom. Maybe there isn’t the same fear in the mind of the bowler running in.

The runs are drying. You wonder if you are listening to the last bars of a lilting melody. You wonder if it is time to leave the theatre. I don’t know but if it is, it’s been an unforgettable ride.

Man who killed himself at Dignitas explains decision in film

Dan Carrier in The Guardian

Jeffrey Spector, right, at dinner with his family, said his condition could have left him with neck-down paralysis at any moment and he believed in his right to dignity. Photograph: Warren Smith 

A businessman with an inoperable tumour has killed himself at an assisted dying clinic in Switzerland – after spending his last seven days making a film for his widow and three children.

Jeffrey Spector died on Monday, six years after he was diagnosed with an inoperable tumour that was growing near his spinal column.

Doctors had warned him the condition would eventually lead to paralysis and death and so Spector said he decided he wanted to be in control of the final stages of his life.

When his illness began to get worse he decided that he had no option but to travel to Switzerland due to UK law. He said: “Assisted suicide is illegal in the UK so it had to be Switzerland.”

He added that he decided it was time when his symptoms increased in severity. “I put one date off so that my daughter could do her exams – but I was going downhill and was finding it hard to use my hands. I had no pressure in my fingers.

“I felt the illness had crossed the red line and I was getting worse. Rather than go late, I am jumping the gun. I call it the least worst option, which is best for my family in the long term.”

Spector, who was the director of a number of advertising and internet firms in Blackpool, Lancashire, chose to be joined by a film crew for the last week of his life. His decision to be filmed has echoes of the death of Guernsey-based hotelier Peter Smedley, whose assisted death in 2011 was screened in a documentary by the late Sir Terry Pratchett for the BBC.

Spector, whose family joined him at the Zurich clinic, described his condition as “a walking timebomb” as he could be struck with neck-down paralysis at any moment.

In an interview released by Dignitas, Spector said he was not scared of death and added: “Never judge someone until you have worn their shoes.

“I know I am going too early. My family disagree, but I believe this is in their best interests.” Stating he wanted to be “in control of the final stages of my life”, he said: “I was a fit and healthy person and my life has been turned upside down.

“What started as backache in 2008 developed into an illness that led me to having to make this most awful decision. Friends, and most of all my family, have urged me not to go through with it.”

Spector first discovered he was ill when he complained of having a sore back and stiff neck. He collapsed at a hotel after attending a friend’s retirement party and sought medical advice. He said: “I thought I had overdone things. My legs went in the hotel room. I got back home and booked in for an MRI scan.

“The phone call from the clinic asked me to go for another scan, which revealed a large tumour high up in my spine in and around the spinal cord.

“My surgeon was confident he could remove the tumour but tests revealed it would be too dangerous. I woke up thinking it would be out, but he told me he could not even take a biopsy.”

Instead, surgeons removed bones elsewhere in his back to relieve pressure caused by the tumour, but it continued to grow.

Spector added: “Had it been lower down the spine, and I lost the use of my legs, I would have been distraught but I could cope. Where it was meant total paralysis from my neck down.”

As the tumour grew, Spector visited the Dignitas clinic and decided that he would kill himself before the tumour’s advance meant he would be unable to do so.

He said: “I know I am going too early but I had consistent thoughts without peer pressure. It had to be a settled decision by a sound mind. If I am paralysed and cannot speak, then what hope is there? I am a proud person – a dignified person, independent and self motivated. It is me who is doing this.”

In the UK, anyone convicted of assisting a suicide can face a 14-year jail term. Pressure group Dignity In Dying, which counted Pratchett as one of its patrons, have long campaigned to change the law.

Labour peer Lord Falconer proposed a bill stating that if someone has a prognosis of less than six months to live, they should be allowed to have an assisted death subject to a number of safeguards and checks. His private member’s bill was debated in the House of Lords in June 2014 and reached the committee stage in parliament in January. However, due to opponents delaying its progress, the bill did not reach the Commons before parliament was dissolved ahead of the general election.

“Some people will criticise me, but do not judge me,” said Spector. “I believe in my human right to dignity. I want the ability to have a cup of tea and hold a phone – I want to be able to do those things myself.

“I believe what I am doing is in the best long term interests of my family. They disagree, but they do accept I have my own opinion.”

A family friend said on Monday: “Jeffrey was not for changing his mind. He did not want to be unable to walk or talk.

“From the outside he appeared as normal – chatty, driving his car, but inside he knew he was getting worse. People have tried to talk him out of this, his own family have begged him.

“But if Jeffrey Spector could not be the Jeffrey Spector we all knew, because of this tumour, this was his way out.”

Concentration and Mental Toughness in Cricket

Ed Smith in Cricinfo

How we are duped by the wrapper, how we mistake the veneer for the structure underneath.

Alastair Cook's appearance is guileless, his speech polite, his behaviour dignified. Too nice? Check the record. He is the toughest cricketer England have produced for decades.

Yesterday in making 153 not out under intense scrutiny and pressure, he once again underlined his pre-eminent gift: responding to a crisis by entering a state of extended and productive concentration.

There are many widespread misconceptions about concentration. It is not so much a wilful and assertive state of mind ("I am going to concentrate hard now") as a state of freedom that flows from the absence of irrelevant thought ("There is nothing extraneous in my mind, no impediments in the road ahead").

Anyone who achieves mastery of a craft, art or profession has by definition also learned to master concentration. They may still suffer anxiety and concern in prospect and retrospect ("Will my work be good enough?", "Was my work good enough?"). But in the act itself, when the script is still being written, they must achieve a state of clarity.

That's why when you meet a brilliant performer - whatever the field - they almost always have an air of calmness and simplicity. When the game is on, their mind is free and uncluttered.

Cook's calmness is preternatural. I watched him carefully yesterday and on Saturday, studying his manner and habits between balls. The gentle walk out to square leg after each ball; the brushing away of stray dust on the pitch; the nonchalant way of standing at the non-striker's end, legs crossed, one hand on hip; the twiddle of the bat in his hands as the bowler turns, looking down at his bat for the first stride or two, then up towards the bowler. All were totally consistent, unruffled by the changing facts of the scoreboard or the corresponding level of anxiety within English cricket.

Whether Cook was watching Ian Bell edge behind as the ball swung in the anxious morning session, or if he was a contented spectator as Ben Stokes smashed England into a dominant position - neither circumstance made any difference to him. He was the same player throughout. His tempo and body language found perfect equilibrium.

It serves as a good metaphor for Cook the man as well as Cook the player. Very seldom is he knocked off kilter or thrown off balance. People have certainly tried. Consider the context of Cook's innings. Yesterday the Sunday papers suggested that Cook was batting to save his captaincy. (Not true, incidentally, as Andrew Strauss has said Cook will captain in the Ashes, but the temptation to turn genuine drama into a phony last-chance saloon often proves irresistible.) In the short term, the fortnight before the Test was dominated by the Kevin Pietersen saga, whipped up once again into full fury. In the medium term, English cricket has endured a state of near permanent crisis for months - at the top of the English game, Cook's captaincy is almost the only aspect of continuity. Widen the focus to take in the last 18 months. Cook has suffered an Ashes whitewash and then, in the summer of 2014, near universal calls for his removal as captain. All bruising, they were experiences that would have crushed many players. Captaincy exhausts and depletes almost everyone in the end. It shows no sign of hobbling Cook yet.

It has long been obvious that Alastair Cook is the finest concentrator to play for England in the modern era. He is also among the most psychologically resilient. Only now do I realise that those two facts are intimately connected. Indeed, watching Cook over the past weeks has reinforced a link I've struggled to notice before: mental strength, whatever the sphere, relies on the art of concentration.

Captaincy exhausts almost everyone in the end. It shows no sign of hobbling Alastair Cook yet © Getty Images

Concentration (the ability to filter out unnecessary noise) leads to clarity, and clarity preserves mental reserves. Quite simply, you don't waste precious focus on things that don't matter.

When I played with Steve Waugh for Kent in 2002, we had several conversations about his mental approach. One recurrent theme was that Waugh defined "toughness" as emotional stability and psychological consistency rather than outward displays of "spiritedness" or meaningless emotion. A batsman with a clear mind, no matter what is going on around him, is displaying mental toughness. The toughest players win more of those scraps, the battles that happen inside their own minds.

Waugh called it mental toughness because sport is adversarial. But that state of flow and focus has much in common with the writer who can see past the mess in his study and follow the story in his head; with the painter sketching a portrait on a noisy train; with the surgeon who tunes out the sense of panic around him when an operation is going wrong and sees only the path ahead. Concentration is not about seeing more. It is about seeing less.

Pressure, in fact, brings out the best in Cook. In the third innings of Tests, when England face a first-innings deficit, he averages 66.

Just as well. Given the nature of the Test season ahead (Australia, Pakistan, South Africa) there will be many more days when Cook will need to do what he does best: to forget the blurry frustrations in the middle distance and watch the ball onto the middle of the bat.

Monday, 25 May 2015

How to turn a liberal hipster into a capitalist tyrant in one evening

Paul Mason in The Guardian

World Factory … how would you cope? Photograph: photograph by David Sandison

The choices were stark: sack a third of our workforce or cut their wages by a third. After a short board meeting we cut their wages, assured they would survive and that, with a bit of cajoling, they would return to our sweatshop in Shenzhen after their two-week break.

But that was only the start. In Zoe Svendsen’s play World Factory at the Young Vic, the audience becomes the cast. Sixteen teams sit around factory desks playing out a carefully constructed game that requires you to run a clothing factory in China. How to deal with a troublemaker? How to dupe the buyers from ethical retail brands? What to do about the ever-present problem of clients that do not pay? Because the choices are binary they are rarely palatable. But what shocked me – and has surprised the theatre – is the capacity of perfectly decent, liberal hipsters on London’s south bank to become ruthless capitalists when seated at the boardroom table.

The classic problem presented by the game is one all managers face: short-term issues, usually involving cashflow, versus the long-term challenge of nurturing your workforce and your client base. Despite the fact that a public-address system was blaring out, in English and Chinese, that “your workforce is your vital asset” our assembled young professionals repeatedly had to be cajoled not to treat them like dirt.

And because the theatre captures data on every choice by every team, for every performance, I know we were not alone. The aggregated flowchart reveals that every audience, on every night, veers towards money and away from ethics.

Svendsen says: “Most people who were given the choice to raise wages – having cut them – did not. There is a route in the decision-tree that will only get played if people pursue a particularly ethical response, but very few people end up there. What we’ve realised is that it is not just the profit motive but also prudence, the need to survive at all costs, that pushes people in the game to go down more capitalist routes.”

In short, many people have no idea what running a business actually means in the 21st century. Yes, suppliers – from East Anglia to Shanghai – will try to break your ethical codes; but most of those giant firms’ commitment to good practice, and environmental sustainability, is real. And yes, the money is all important. But real businesses will take losses, go into debt and pay workers to stay idle in order to maintain the long-term relationships vital in a globalised economy.

Why do so many decent people, when asked to pretend they’re CEOs, become tyrants from central casting? Part of the answer is: capitalism subjects us to economic rationality. It forces us to see ourselves as cashflow generators, profit centres or interest-bearing assets. But that idea is always in conflict with something else: the non-economic priorities of human beings, and the need to sustain the environment. Though World Factory, as a play, is designed to show us the parallels between 19th-century Manchester and 21st-century China, it subtly illustrates what has changed.

A worker in a Chinese clothing factory Photograph: Imaginechina/Corbis

A real Chinese sweatshop owner is playing a losing game against something much more sophisticated than the computer at the Young Vic: an intelligent machine made up of the smartphones of millions of migrant workers on their lunchbreak, plugging digitally into their village networks to find out wages and conditions elsewhere. That sweatshop owner is also playing against clients with an army of compliance officers, themselves routinely harassed by NGOs with secret cameras.

The whole purpose of this system of regulation – from above and below – is to prevent individual capitalists making short-term decisions that destroy the human and natural resources it needs to function. Capitalism is not just the selfish decisions of millions of people. It is those decisions sifted first through the all-important filter of regulation. It is, as late 20th-century social theorists understood, a mode of regulation, not just of production.

Yet it plays on us a cruel ideological trick. It looks like a spontaneous organism, to which government and regulation (and the desire of Chinese migrants to visit their families once a year) are mere irritants. In reality it needs the state to create and re-create it every day.

Banks create money because the state awards them the right to. Why does the state ram-raid the homes of small-time drug dealers, yet call in the CEOs of the banks whose employees commit multimillion-pound frauds for a stern ticking off over a tray of Waitrose sandwiches? Answer: because a company has limited liability status, created by parliament in 1855 after a political struggle.

Our fascination with market forces blinds us to the fact that capitalism – as a state of being – is a set of conditions created and maintained by states. Today it is beset by strategic problems: debt- ridden, with sub-par growth and low productivity, it cannot unleash the true potential of the info-tech revolution because it cannot imagine what to do with the millions who would lose their jobs.

The computer that runs the data system in Svendsen’s play could easily run a robotic clothes factory. That’s the paradox. But to make a third industrial revolution happen needs something no individual factory boss can execute: the re-regulation of capitalism into something better. Maybe the next theatre game about work and exploitation should model the decisions of governments, lobbyists and judges, not the hapless managers.

Fake Diplomas, Real Cash: Pakistani Company Axact Reaps Millions

Declan Walsh in the New York Times

Seen from the Internet, it is a vast education empire: hundreds of universities and high schools, with elegant names and smiling professors at sun-dappled American campuses.

Their websites, glossy and assured, offer online degrees in dozens of disciplines, like nursing and civil engineering. There are glowing endorsements on the CNN iReport website, enthusiastic video testimonials, and State Department authentication certificates bearing the signature of Secretary of State John Kerry.

“We host one of the most renowned faculty in the world,” boasts a woman introduced in one promotional video as the head of a law school. “Come be a part of Newford University to soar the sky of excellence.”

Yet on closer examination, this picture shimmers like a mirage. The news reports are fabricated. The professors are paid actors. The university campuses exist only as stock photos on computer servers. The degrees have no true accreditation. 

In fact, very little in this virtual academic realm, appearing to span at least 370 websites, is real — except for the tens of millions of dollars in estimated revenue it gleans each year from many thousands of people around the world, all paid to a secretive Pakistani software company.

Axact makes tens of millions of dollars annually by offering diplomas and degrees online through hundreds of fictitious schools. Fake accreditation bodies and testimonials lend the schools an air of credibility. But when customers call, they are talking to Axact sales clerks in Karachi.

That company, Axact, operates from the port city of Karachi, where it employs over 2,000 people and calls itself Pakistan’s largest software exporter, with Silicon Valley-style employee perks like a swimming pool and yacht.

Axact does sell some software applications. But according to former insiders, company records and a detailed analysis of its websites, Axact’s main business has been to take the centuries-old scam of selling fake academic degrees and turn it into an Internet-era scheme on a global scale.

As interest in online education is booming, the company is aggressively positioning its school and portal websites to appear prominently in online searches, luring in potential international customers.

At Axact’s headquarters, former employees say, telephone sales agents work in shifts around the clock. Sometimes they cater to customers who clearly understand that they are buying a shady instant degree for money. But often the agents manipulate those seeking a real education, pushing them to enroll for coursework that never materializes, or assuring them that their life experiences are enough to earn them a diploma.

To boost profits, the sales agents often follow up with elaborate ruses, including impersonating American government officials, to persuade customers to buy expensive certifications or authentication documents.

Revenues, estimated by former employees and fraud experts at several million dollars per month, are cycled through a network of offshore companies. All the while, Axact’s role as the owner of this fake education empire remains obscured by proxy Internet services, combative legal tactics and a chronic lack of regulation in Pakistan.

“Customers think it’s a university, but it’s not,” said Yasir Jamshaid, a quality control official who left Axact in October. “It’s all about the money.”

Axact’s response to repeated requests for interviews over the past week, and to a list of detailed questions submitted to its leadership on Thursday, was a letter from its lawyers to The New York Times on Saturday. In the letter, it issued a blanket denial, accusing a Times reporter of “coming to our client with half-cooked stories and conspiracy theories.”

After the initial publication of this article, Axact posted a public responseon its website, saying it would seek legal action. The statement begins, “Axact condemns this story as baseless, substandard, maligning, defamatory, and based on false accusations and merely a figment of imagination published without taking the company’s point of view.”

Also after publication, some of the testimonial videos and specific website contents cited in this article were taken down without explanation.

In an interview in November 2013 about Pakistan’s media sector, Axact’s founder and chief executive, Shoaib Ahmed Shaikh, described Axact as an “I.T. and I.T. network services company” that serves small and medium-sized businesses. “On a daily basis we make thousands of projects. There’s a long client list,” he said, but declined to name those clients.

The accounts by former employees are supported by internal company records and court documents reviewed by The New York Times. The Times also analyzed more than 370 websites — including school sites, but also a supporting body of search portals, fake accreditation bodies, recruitment agencies, language schools and even a law firm — that bear Axact’s digital fingerprints.

In academia, diploma mills have long been seen as a nuisance. But the proliferation of Internet-based degree schemes has raised concerns about their possible use in immigration fraud, and about dangers they may pose to public safety and legal systems. In 2007, for example, a British court jailed Gene Morrison, a fake police criminologist who claimed to have degree certificates from the Axact-owned Rochville University, among other places.

Little of this is known in Pakistan, where Axact has dodged questions about its diploma business and has portrayed itself as a roaring success and model corporate citizen.

A screengrab taken from the website Columbiana University. This and other Axact sites have toll-free American contact numbers and calculatedly familiar-sounding names.

“Winning and caring” is the motto of Mr. Shaikh, who claims to donate 65 percent of Axact’s revenues to charity, and last year announced plans for a program to educate 10 million Pakistani children by 2019.

More immediately, he is working to become Pakistan’s most influential media mogul. For almost two years now, Axact has been building a broadcast studio and aggressively recruiting prominent journalists for Bol, a television and newspaper group scheduled to start this year.

Just how this ambitious venture is being funded is a subject of considerable speculation in Pakistan. Axact has filed several pending lawsuits, and Mr. Shaikh has issued vigorous public denials, to reject accusations by media competitors that the company is being supported by the Pakistani military or organized crime. What is clear, given the scope of Axact’s diploma operation, is that fake degrees are likely providing financial fuel for the new media business.

“Hands down, this is probably the largest operation we’ve ever seen,” said Allen Ezell, a retired F.B.I. agent and author of a book on diploma millswho has been investigating Axact. “It’s a breathtaking scam.”

Building a Web

At first glance, Axact’s universities and high schools are linked only by superficial similarities: slick websites, toll-free American contact numbers and calculatedly familiar-sounding names, like Barkley, Columbiana andMount Lincoln.

But other clues signal common ownership. Many sites link to the same fictitious accreditation bodies and have identical graphics, such as a floating green window with an image of a headset-wearing woman who invites customers to chat.

There are technical commonalities, too: identical blocks of customized coding, and the fact that a vast majority route their traffic through two computer servers run by companies registered in Cyprus and Latvia.

Five former employees confirmed many of these sites as in-house creations of Axact, where executives treat the online schools as lucrative brands to be meticulously created and forcefully marketed, frequently through deception.

The professors and bubbly students in promotional videos are actors, according to former employees, and some of the stand-ins feature repeatedly in ads for different schools.

The sources described how employees would plant fictitious reports about Axact universities on iReport, a section of the CNN website for citizen journalism. Although CNN stresses that it has not verified the reports, Axact uses the CNN logo as a publicity tool on many of its sites.

Social media adds a further patina of legitimacy. LinkedIn contains profiles for purported faculty members of Axact universities, like Christina Gardener, described as a senior consultant at Hillford University and a former vice president at Southwestern Energy, a publicly listed company in Houston. In an email, a Southwestern spokeswoman said the company had no record of an employee with that name.

The heart of Axact’s business, however, is the sales team — young and well-educated Pakistanis, fluent in English or Arabic, who work the phones with customers who have been drawn in by the websites. They offer everything from high school diplomas for about $350, to doctoral degrees for $4,000 and above.

“It’s a very sales-oriented business,” said a former employee who, like several others, spoke on the condition of anonymity because he feared legal action by Axact.

Axact employees often follow up aggressively with previous customers, pushing them to buy more. Some pose as American officials, badgering clients to spend thousands of dollars on State Department authentication letters. Payments are funneled through offshore firms.

A new customer is just the start. To meet their monthly targets, Axact sales agents are schooled in tough tactics known as upselling, according to former employees. Sometimes they cold-call prospective students, pretending to be corporate recruitment agents with a lucrative job offer — but only if the student buys an online course.

A more lucrative form of upselling involves impersonating American government officials who wheedle or bully customers into buying State Department authentication certificates signed by Secretary Kerry.

Such certificates, which help a degree to be recognized abroad, can be lawfully purchased in the United States for less than $100. But in Middle Eastern countries, Axact officials sell the documents — some of them forged, others secured under false pretenses — for thousands of dollars each.

“They would threaten the customers, telling them that their degrees would be useless if they didn’t pay up,” said a former sales agent who left Axact in 2013.

Axact tailors its websites to appeal to customers in its principal markets, including the United States and oil-rich Persian Gulf countries. One Saudi man spent over $400,000 on fake degrees and associated certificates, said Mr. Jamshaid, the former employee.

Usually the sums are less startling, but still substantial.

One Egyptian man paid $12,000 last year for a doctorate in engineering technology from Nixon University and a certificate signed by Mr. Kerry. He acknowledged breaking ethical boundaries: His professional background was in advertising, he said in a phone interview, speaking on the condition of anonymity to avoid potential legal trouble.

But he was certain the documents were real. “I really thought this was coming from America,” he said. “It had so many foreigner stamps. It was so impressive.”

Real-Life Troubles

Many customers of degree operations, hoping to secure a promotion or pad their résumé, are clearly aware that they are buying the educational equivalent of a knockoff Rolex. Some have been caught.

In the United States, one federal prosecution in 2008 revealed that 350 federal employees, including officials at the departments of State and Justice, held qualifications from a non-Axact-related diploma milloperation based in Washington State.

Some Axact-owned school websites have previously made the news as being fraudulent, though without the company’s ownership role being discovered. In 2013, for instance, Drew Johansen, a former Olympic swim coach, was identified in a news report as a graduate of Axact’s bogus Rochville University.

The effects have sometimes been deeply disruptive. In Britain, the police had to re-examine 700 cases that Mr. Morrison, the falsely credentialed police criminologist and Rochville graduate, had worked on. “It looked easier than going to a real university,” Mr. Morrison said during his 2007 trial.

In the Middle East, Axact has sold aeronautical degrees to airline employees, and medical degrees to hospital workers. One nurse at a large hospital in Abu Dhabi, United Arab Emirates, admitted to spending $60,000 on an Axact-issued medical degree to secure a promotion.

Shoaib Ahmed Shaikh, the founder of Axact, in an image taken from social media.

But there is also evidence that many Axact customers are dupes, lured by the promise of a real online education.

Elizabeth Lauber, a bakery worker from Bay City, Mich., had been home-schooled, but needed a high school diploma to enroll in college. In 2006, she called Belford High School, which had her pay $249 and take a 20-question knowledge test online.

Weeks later, while waiting for the promised coursework, Ms. Lauber was surprised to receive a diploma in the mail. But when she tried to use the certificate at a local college, an official said it was useless. “I was so angry,” she said by phone.

Last May, Mohan, a junior accountant at a construction firm in Abu Dhabi, paid $3,300 for what he believed was going to be an 18-month online master’s program in business administration at the Axact-owned Grant Town University.

A sales agent assured Mohan, a 39-year-old Indian citizen who asked to be identified only by part of his name, of a quality education. Instead, he received a cheap tablet computer in the mail — it featured a school logo but no education applications or coursework — followed by a series of insistent demands for more money.

When a phone caller who identified himself as an American Embassy official railed at Mohan for his lack of an English-language qualification, he agreed to pay $7,500 to the Global Institute of English Language Training Certification, an Axact-run website.

In a second call weeks later, the man pressed Mohan to buy a State Department authentication certificate signed by Mr. Kerry. Mohan charged $7,500 more to his credit card.

Then in September a different man called, this time claiming to represent the United Arab Emirates government. If Mohan failed to legalize his degree locally, the man warned, he faced possible deportation. Panicking, Mohan spoke to his sales agent at Axact and agreed to pay $18,000 in installments.

By October, he was $30,000 in debt and sinking into depression. He had stopped sending money to his parents in India, and hid his worries from his wife, who had just given birth.

“She kept asking why I was so tense,” said Mohan during a recent interview near his home in Abu Dhabi. “But I couldn’t say it to anyone.”

Chasing Bill Gates

In Pakistan, Mr. Shaikh, Axact’s chief executive, portrays himself as a self-made tycoon of sweeping ambition with a passion for charity.

Growing up in a one-room house, he said in a speech posted on the company’s website, his goal was to become “the richest man on the planet, even richer than Bill Gates.” At gala company events he describes Axact, which he founded in 1997, as a global software leader. His corporate logo — a circular design with a soaring eagle — bears a striking resemblance to the American presidential seal.

Unusual for a software entrepreneur, Mr. Shaikh does not habitually use email or a cellphone, said several people recruited to his new station, Bol.

Barkley University claims that its degrees are recognized all over the world.

But his ambition is undimmed: Last year he announced plans for Gal Axact, a futuristic headquarters building with its own monorail system and space for 20,000 employees. His philanthropic vision, meanwhile, has a populist streak that resonates with many Pakistanis’ frustrations with their government. 

As well as promising to educate 10 million children, Mr. Shaikh last year started a project to help resolve small civil disputes — a pointed snub to the country’s sclerotic justice system — and vowed to pump billions of dollars into Pakistan’s economy.

“There is no power in the universe that can prevent us from realizing this dream,” he declared in the speech.

But some employees, despite the good salaries and perks they enjoyed, became disillusioned by the true nature of Axact’s business.

During three months working in the internal audit department last year, monitoring customer phone calls, Mr. Jamshaid grew dismayed by what he heard: customers being cajoled into spending tens of thousands of dollars, and tearful demands for refunds that were refused.

“I had a gut feeling that it was not right,” he said.

In October, Mr. Jamshaid quit Axact and moved to the United Arab Emirates, taking with him internal records of 22 individual customer payments totaling over $600,000.

Mr. Jamshaid has since contacted most of those customers, offering to use his knowledge of Axact’s internal protocols to obtain refunds. Several spurned his approach, seeing it as a fresh effort to defraud them. But a few, including Mohan, accepted his offer.

After weeks of fraught negotiations, Axact refunded Mohan $31,300 last fall.

The Indian accountant found some satisfaction, but mostly felt chastened and embarrassed.

“I was a fool,” he said, shaking his head. “It could have ruined me.”

Deception and Threats

Axact’s role in the diploma mill industry was nearly exposed in 2009 when an American woman in Michigan, angry that her online high school diploma had proved useless, sued two Axact-owned websites, Belford High School and Belford University.

The case quickly expanded into a class-action lawsuit with an estimated 30,000 American claimants. Their lawyer, Thomas H. Howlett, said in an interview that he found “hundreds of stories of people who have been genuinely tricked,” including Ms. Lauber, who joined the suit after it was established.

A broadcast studio at Bol, a television and newspaper group owned by Axact that is scheduled to start this year. CreditSara Farid for The New York Times

But instead of Axact, the defendant who stepped forward was Salem Kureshi, a Pakistani who claimed to be running the websites from his apartment. Over three years of hearings, his only appearance was in a video deposition from a dimly lit room in Karachi, during which he was barely identifiable. An associate who also testified by video, under the name “John Smith,” wore sunglasses.

Mr. Kureshi’s legal fees of over $400,000 were paid to his American lawyers through cash transfers from different currency exchange stores in Dubai, court documents show. Recently a reporter was unable to find his given address in Karachi.

“We were dealing with an elusive and illusory defendant,” said Mr. Howlett, the lawyer for the plaintiffs.

In his testimony, Mr. Kureshi denied any links to Axact, even though mailboxes operated by the Belford schools listed the company’s headquarters as their forwarding address.

The lawsuit ended in 2012 when a federal judge ordered Mr. Kureshi and Belford to pay $22.7 million in damages. None of the damages have been paid, Mr. Howlett said.

Today, Belford is still open for business, using a slightly different website address. Former Axact employees say that during their inductions into the company, the two schools were held out as prized brands.

Axact does have regular software activities, mainly in website design and smartphone applications, former employees say. Another business unit, employing about 100 people, writes term papers on demand for college students.

But the employees say those units are outstripped by its diploma business, which as far back as 2006 was already earning Axact around $4,000 a day, according to a former software engineer who helped build several sites. Current revenues are at least 30 times higher, by several estimates, and are funneled through companies registered in places like Dubai, Belize and the British Virgin Islands.

Axact has brandished legal threats to dissuade reporters, rivals and critics. Under pressure from Axact, a major British paper, The Mail on Sunday, withdrew an article from the Internet in 2006. Later, using an apparently fictitious law firm, the company faced down a consumer rights group in Botswana that had criticized Axact-run Headway University.

It has also petitioned a court in the United States, bringing a lawsuit in 2007 against an American company that is a competitor in the essay-writing business, Student Network Resources, and that had called Axact a “foreign scam site.” The American company countersued and was awarded $700,000, but no damages have been paid, the company’s lawyer said.

In his interview with The New York Times in 2013, Axact’s chief executive, Mr. Shaikh, acknowledged that the company had faced criticism in the media and on the Internet in Britain, the United States and Pakistan, and noted that Axact had frequently issued a robust legal response.

“We have picked up everything, we have gone to the courts,” he said. “Lies cannot flourish like that.”

Mr. Shaikh said that the money for Axact’s new media venture, Bol, would “come from our own funds.”

With so much money at stake, and such considerable effort to shield its interests, one mystery is why Axact is ready to risk it all on a high-profile foray into the media business. Bol has already caused a stir in Pakistan by poaching star talent from rival organizations, often by offering unusually high salaries.

Mr. Shaikh says he is motivated by patriotism: Bol will “show the positive and accurate image of Pakistan,” he said last year. He may also be betting that the new operation will buy him influence and political sway.

In any event, Axact’s business model faces few threats within Pakistan, where it does not promote its degrees.

When reporters for The Times contacted 12 Axact-run education websites on Friday, asking about their relationship to Axact and the Karachi office, sales representatives variously claimed to be based in the United States, denied any connection to Axact or hung up immediately.

“This is a university, my friend,” said one representative when asked about Axact. “I have no idea what you’re talking about.

The middle-class malaise that dare not speak its name

Zoe Williams in The Guardian

Illustration by Jasper Rietman

What is a “middle-class” expense? According to the Daily Telegraph, after considerable dialogue with its own readers, the key items in the portfolio of the bourgeoisie are as follows: school fees, dental care, health insurance, holidays, wine (fine), new cars, holidays and “cultural activities”. The price rises in all these areas have been astronomical – health insurance has gone up by 51% over the past six years, school fees by 40% – while over the same period earnings in the double-average-wage bracket have gone down by 0.8%.

Private school fees are paid by 7% of the population; private health insurance is taken out by 11%. This isn’t really the middle: the determination to retain the term middle class for those who are actually wealthy is akin to the care with which the right wing never describes its views as rightwing, preferring “commonsense”. It is a constant project to reframe what is normal in the image of what is normal for one person in 10.

But actually, on this matter, the middle classes are pretty normal. Income has stagnated across every section of society apart from the top 1% (whom the Telegraph would probably call upper middle or well-to-do). GDP per capita is lower than it was seven years ago. “That,” said the economist Joseph Stiglitz in an interview on Sunday “is not a success.”

It’s hard for the wealthy to mobilise around their declining living standards. Their options are limited. When so much of your wealth is spent avoiding the social structures on which solidarity is based – education, the health service, our crap dentistry of international renown – who do you complain to? Who are you going to stand shoulder to shoulder with? Your outrage at the world is limited in its expression to your power as a consumer. That’s why the incredibly angry, bright pink man yelling at a BT helpline is such a staple of modern British sitcoms; as a guardian angel against feelings of impotence and injustice, BT can’t really help – even if it does answer the phone.

So there’s the stain of self-interest barring entry to the language and power and solace of unity. There’s also a huge amount of shame involved in being in debt or struggling, especially against the backdrop of assumption that privilege is somehow the result of a lifetime’s sound financial decisions.

There’s a public pressure not to mention declining living standards, because that would be to insult people whose living standards have declined to the point of being unable to eat. There’s also a private pressure, since the status of the affluent is, of course, rooted in the affluence – and if one breaks ranks to say there’s actually quite a lot of anxiety involved, it makes everyone look bad.

Oh, and one other huge impediment: nobody wants you for an ally when your complaint is that health insurance has gone up three times as fast as wages. Had housing been added to the Telegraph’s basket of middle-class goods, they would have seen that, for the older homeowner with a mortgage, the rise in other prices is offset somewhat by the very low interest rates. But they would also have seen that the “middle-class” renter, or even the renter who actually is middle class, is suffering rent rises with no respect to wages, insecurity of tenancy, crummy conditions and life-changingly large proportions of income going on housing costs – very similar conditions, in other words, to everyone else.

The extent to which we are all in this wage-stagnating, price-increasing swamp together is a question of age rather than class. A middle-class person coming out of university is part of the private personal debt boom; a middle-class person under 30 is a victim of the rentier economy. When you strip out the peculiar lottery-win of being over 40 in the housing market, you can see the picture more clearly: everyone who earns, now earns less, while, by incredible coincidence, the ratio between profit and wages has tipped in the shareholders’ favour.

It is deeply ingrained in our political culture that classes must be held in opposition to one another; and a confluence of interests between the middle and the bottom is only possible when the bottom tries to emulate or join the middle (sorry, did I say tries? Of course I meant aspires).

It cuts across the spectrum – on the left, you would never want to preach allegiance between the person hit by the bedroom tax and the person who can’t afford the second holiday. On the right, you would never admit that there was any systemic connection between falling wages for the bottom decile, and falling wages for the eighth.

But considering them together would make it easier to see the patterns: wage depression never conveniently stopped at the bottom 20%, there is little brake on corporate power, and credit is allowing prices in every sphere to peel away from earnings. These trends are obscured by the rather dated political determination that “the needy” must be interested in one kind of politics, and “the aspirational” a completely different kind. Better to acknowledge the similarities in the situations we all face.

Sunday, 24 May 2015

Criminal bankers have brazenly milked the system. Let’s change it

Will Hutton in The Guardian


 Traders colluded in online chatrooms to time the buying and selling of huge amounts of currency. Photograph: Ruben Sprich/REUTERS

The world’s biggest banks had been steeling themselves for months before the US Department of Justice’s rulings on manipulation in the foreign exchange markets. Last week’s announcement was, if anything, less tough than expected; £3.7bn of fines were levied on top of those announced last autumn, to bring the grand total to an astounding £6.3bn. Crucially, the banks also admitted that what they had done was criminal. The US attorney general, Loretta Lynch, declared that foreign exchange traders had exhibited“breathtaking flagrancy” in setting up a group they called “the cartel” to manipulate the market between 2007 and the end of 2013. The fine was “commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law, or to the public welfare”.

Put bluntly, the world’s most prestigious banks had brazenly and systematically ripped off their clients. It was the crime of the decade. Yet the markets had been expecting worse. Only a month ago, Deutsche Bank had paid a record £1.6bn fine for manipulating and rigging prices in the currency and money markets. If this was the benchmark, thought the markets, the fines for other banks would be higher. As it was, £3.7bn seemed almost modest and the share prices of Barclays, RBS, Citigroup and JP Morgan rose sharply in relief.

----Also watch 

Bird and Fortune on Investment Bankers


The hope in the banking world is that the worst may be over. The combination of modestly increased regulation, stronger internal compliance and clawing back pay and bonuses if there has been malpractice – together with genuine determination at board level to root out criminal practice in dealing rooms – should begin to make a difference.

Yet will it be enough? Our grandparents, less in hock to today’s ruling doctrines – that markets can be presumed to be infallible and egoism is always beneficial – were wiser about how to organise markets than today’s economists and regulators. It is striking, despite record fines and the sacking of the Bank of England’s head of foreign exchange operations, who knew about the collusion but never drew it to the authority’s attention (on the grounds that whistleblowing was not part of his duties), that the British approach is still softly, softly.

Minouche Shafik, deputy governor of the Bank of England, expressed her horror at the casual “misconduct” among traders and the language they used to justify what they did in a speech to the London School of Economics last autumn. (Shafik is in charge of the fair and effective market review that will propose changes to the foreign exchange markets.) She conceded that no one can talk any more of a few bad apples – the barrel is rotten. But while recognising that deep change was necessary, her proposed areas for potential remedial action are largely technical. Tonally, her comments reminded me of the infamous Bischoff report into the banking system in 2008/9, which, despite the narrowly averted banking collapse, recommended as little as possible should be done to reform the City.

In fairness, Shafik spoke before last week’s admissions of criminality. The US Justice Department has raised the stakes. What everyone has to confront is that the banks have been party to an organised, global criminal conspiracy to defraud their clients. Traders colluded in secret online chatrooms to time the buying and selling of huge amounts of foreign currency to benefit each other. As one said: “If you ain’t cheating, you ain’t trying.” The entire framework, and the economic philosophy that supported it, has been found wanting.

In terms of structure, the foreign exchange markets are the closest to a Thatcherite nirvana that has ever been devised. Governments do not manage rates to comply with an internationally agreed system, as they did after the war. The price of a pivotal financial asset is determined wholly by private supply and demand. The market makes its rules. There has been close to zero public regulation. Banks buy and sell on their account freely and for their clients. Conflicts of interest abound. The pursuit of profit is the only hallowed value.

The argument in favour of this is that it is vital for the promotion of world trade and prosperity, but daily turnover on the foreign exchange markets dwarfs the volume of world trade. To paraphrase Adair Turner when chair of the now-abolished Financial Services Authority, much of this turnover is plainly neither socially useful nor promotes public welfare. It does, however, enrich those who trade in it and, as we see, criminally.

For 30 years, the doctrine has been that state involvement would be counterproductive. Modern companies, of which banks are a sub-set, have been encouraged to define themselves not as organisations delivering economic and social good, but as profit-making machines for anonymous, tourist shareholders. Managers did not question their trading teams too hard: they knew how important the profit was to their bonuses and to the bank. As for the teams, they were prepared to trade themselves – moving from bank to bank, depending on whoever paid them best. They were not an integral part of great organisation: they were, and are, boys on the make.

In a letter to all the CEOs of Fortune 500 companies, Larry Fink, head of BlackRock Asset Management, the biggest in the world, deplored the short-term financial priorities of modern corporations, which he said had lost their way and urged a refocusing. What has happened in our currency dealing rooms is part of that story. Addressing it requires a new deal between shareholders, companies and their workforces, and between the public and the private. We need a reshaping of company law and the way companies are owned so that managers pursue less fevered, short-term amoral strategies. And we need an acceptance that in market after market there is a co-dependence between state and business.

Rather than imposing swingeing fines after the event, the state has an obligation to create, with the banks, a financial architecture in which such practices cannot happen. Conflicts of interest and opportunities for price rigging should be outlawed. Criminal currency traders should be prosecuted All bonuses should be capable of being clawed back. Currency trading should be licensed on organised, accountable exchanges.

Those rules and systems that the world’s free marketeers considered so antediluvian turn out to be wise and friendly to honest-to-god businesses. Mark Carney’s Bank of England has been quietly re-regulating mortgage finance, abandoning the free-market zealotry of the 1980s and 1990s. It should do the same in the foreign exchange markets. Our grandparents were not so stupid after all.

Arjuna Ranatunga - Large and in charge

Defiant, passionate, cunning - Arjuna Ranatunga was a mighty tough cookie on the field and an unwavering friend off it

MARTIN CROWE in Cricinfo MAY 2015

Truth be known, I love to hate the Australians more than anyone else. And therefore the man who got under their skin the most is my hero. Appearances can be deceiving, and when it comes to Arjuna Ranatunga, the rotund Sri Lankan mastermind, there was nothing soft in his underbelly. He is as tough a cricketer as I have ever come across.

We represented our countries at the same time, both very young, eager allrounders hoping to fit into the cut and thrust of international cricket. Sri Lanka were just beginning their climb, possessing many fine cricketers, if not hardened professionals. New Zealand were a nice mix of amateur and professional, led in example by the pro's pro, Richard Hadlee.

I first spoke to Arjuna while fielding under a helmet at short legin Kandy in 1984. He was defiantly chirpy at the crease, never taking a backward step. His game was a bit limited - the cut and sweep were his release shots. He appeared unfit, yet he never lacked for effort or punch. He quickly became known as "Chef": hungry, dressed in white, and ready to give hell to anyone who didn't conform to the rules of his workspace.

We teased each other a little but deep down we had huge respect for one another, and I loved his smile and zest for life. He had no out-of-control ego, or fear, just a massive heart and a cunning mind. Despite Sri Lanka having no experience as such, Arjuna soaked up all he could. It was as if it was preordained - his apprenticeship was a natural platform for him to learn how to mastermind his team to unprecedented glory.

He quickly became known as "Chef": hungry, dressed in white, and ready to give hell to anyone who didn't conform to the rules of his workspace

I was more comfortable bowling to Arjuna than batting against him. I could swing it away from him, and enjoyed following up my bouncers with a prolonged look to see his response. He was always muttering something and smiling. When he bowled to me, he knew I feared getting out to his miserable deflated wobblies.

Regrettably, he dismissed me too often, notably in Wellington, when I was one short of being the first Kiwi to post a triple-century. I recall the moment when he got to the end of his run-up, beaming ear to ear. He had a gift for me. At that precise moment, up popped the thought that I had already achieved the triple-century. I didn't remove the thought; instead, I hung on to the feeling a bit longer. "Heck, you've done it," I muttered.

Arjuna rolled in and offered up a juicy half-volley wide of off stump. It was a glorious finish to a hard-fought draw, and some history. I never saw the ball leave his hand. My mind was scrambled as I jumped from "Done it", to "Where is it?" Seeing it very late and very wide, I lashed out in desperation, the blade slicing the ball and sending a thick edge into the slip cordon. Hashan Tillakaratne, the wicketkeeper, moved swiftly and calmly to his right and plucked the ball millimetres from the ground.

While Arjuna was upset for me, I was angry and inconsolable. A couple of weeks later, in the Hamilton Test, he dealt it to me again with the same mode of dismissal. Unintentionally, he had got under my skin, in the nicest possible way. I began to hate facing his gentle floating autumn leaves.

By 1996 he was a wise sage. He knew his team and their strengths, and he knew what buttons needed pushing. He saw the Australians as an easy target. He saw how false they could be: loud, lippy banter masking their own fears, often turning into personal abuse when the pressure mounted. He believed the more they resorted to mental disintegration the more they exposed themselves, diverting their attention from their obvious skill and from the job at hand.

A streamlined Arjuna bowls in the 1983 World Cup © Getty Images

On the eve of the World Cup final he told the many drooling media hounds that Shane Warne was just an average bowler. It caused a violent reaction, more so because "Chef" had been pecking away at the Aussie psyche for a few years and this was the ultimate insult. While Warne tightened with fury, Aravinda de Silva - Arjuna's right-hand man and master batsman - loosened up. Two buttons pressed, both for different purposes, both pushed to achieve one result.

Arjuna dabbed the winning run down to his favourite third-man area. Upon seeing it disappear to the boundary, he reached down and grabbed a stump. It was as if he were picking up the stake he had earlier rammed in the ground upon his arrival. That stake stood for a nation that had cracked the code to win a world title. Ranatunga's name was etched in history forever.

We became close companions off the field. He would take me home to dinner, offering his favourite foods and delights. Not surprisingly, he enjoyed a fine feast, probably more than he did cricket, and I loved hanging out with someone so at ease. He also helped me get expert treatment for my ailing legs, so I could get fit again after developing hamstring problems due to my knee condition. He took me to places I never knew existed, and I felt safer with him in a foreign land than I did in any other.

Arjuna wasn't really an arch-enemy or a player I loved to hate. I loved him, full stop. Mostly I loved the way he stood up to the big boys, the bullies, and bulldozed them back in his unique inspiring way. He represented the underdog.

Arjuna left everything out on the park and, going by his healthy waistline, that was quite a plateful.