Britain's free market economy isn't working

Larry Elliott in The Guardian

Last week should have been a good one for George Osborne. The first day of April marked the day when the ”national living wage” came into force. The idea was championed by the chancellor in his 2015 summer budget when he said it was time to “give Britain a pay rise”.

Unfortunately for the chancellor, the 50p an hour increase in the pay floor for workers over 25 was completely overshadowed by the existential threat to the steel industry posed by Tata’s decision to sell its UK plants.

Instead of being acclaimed by a grateful nation, Osborne found his handling of the economy under fire. The fact that official figures showed that Britain has the highest current account deficit since modern records began in 1948 did not help.

At one level, all seems well with the economy. Growth was revised up for the fourth quarter of 2015 to 0.6% and is running at an annual rate of just over 2% – close to its long-term average and higher than in Germany, France or Italy.

Two of three key sectors of the economy are struggling, though. Industrial production and construction have yet to recover the ground lost in the recession of 2008-09, leaving the economy dependent on services, which accounts for three-quarters of national output.

Digging beneath the surface glitter shows just how unbalanced and unsustainable the economy has become.

Growth is far too biased towards consumer spending. Borrowing is going up and imports are being sucked in. An enormous current account deficit and a collapse in the household saving ratio are usually consistent with the economy in the last stages of a wild boom rather than one trundling along at 2%.

A little extra digging provides the explanation, with some alarming structural flaws quickly emerging.

Here are two pieces of evidence. The first, relevant to the debate about the future of the steel industry, comes from an investigation by the left of centre thinktank,the IPPR, into the state of Britain’s foundation industries.

Foundation industries supply the basic goods – such as metal and chemicals – used by other industries. They have been having a tough time of it across the developed world, but the decline has been especially pronounced in the UK. Since 2000, the share of GDP accounted for by foundation industries has fallen by 21% across the rich nations that belong to the Organisation for Economic Cooperation and Development but by 43% in Britain. At the end of the 1990s, imports accounted for 40% of UK demand for basic metals; import penetration is now at 90%. Clearly, this trend will become even more marked if the Tata steel plants close.

The second piece of evidence comes from a joint piece of research from the innovation foundation Nesta and the National Institute for Economic and Social Research being published on Monday. This found that productivity weaknesses are common across the sectors of the UK economy, but particularly marked among newly formed companies. Fledgling firms tend to be less efficient on average, but the report said that in the years since the recession performance had been unusually poor among startups.

Since the economy emerged from recession, the growth of highly productive companies has been curbed and there has also been a slowdown in the number of under-performing businesses contracting in size. This helps explain why Britain has an 18% productivity gap with the other members of the G7 group of industrial nations.

According to the economic orthodoxy that has prevailed for the past four decades, none of this should be happening. The theory was that a good, solid dose of market forces would clear out the dead wood from the manufacturing sector; financial deregulation would ensure that funding was provided to young, thrusting startup firms; and free trade would ensure that British industry remained on its toes. Industrial policy would no longer be about “picking winners” but involve an open door to inward investment and low corporate taxes.

This approach has proved a complete dud. Successive UK governments have allowed good companies to go to the wall for the sake of their free market principles. They have squandered the once-in-a-lifetime opportunity provided by North Sea oil to modernise and re-equip the manufacturing sector. They have sat back and watched as the economy has stumbled from one housing-driven boom-bust to another. They have now arrived at the stage where house price inflation is running at 10% a year; the current account deficit in the latest quarter was 7% a year; and manufacturing is in recession.

The UK has been here before, although this time the numbers are scarier. Traditionally, what happens next is a sharp fall in the value of the pound, which helps rebalance the economy by making exports cheaper and imports dearer.Consumer spending takes a hit because goods cost more in the shops while manufacturers get a boost because their products are more competitive on world markets.

Such a depreciation would almost certainly be triggered by a decision to leave the EU in the referendum on 23 June. The assumption is that this would be a bad thing; in truth, a cheaper currency would be one of the benefits of Brexit.

But only in the right circumstances. There is more to rebalancing the economy and solving the UK’s deep-seated problems than simply devaluing the pound. If it was as easy as that, Britain would be a world beater by now. Getting the right level for the pound is a necessary but not sufficient factor in putting the economy right.

There is no shortage of ideas. Help for steel would be provided if procurement rules were tightened up so that contractors had to show they were sourcing sustainably, with the test being the impact on the environment and on local communities. The IPPR has a range of ideas for boosting foundation industries, including building stronger supply chains with advanced manufacturing and using the regional growth fund to provide more patient finance.

Nesta said its research shows the need for better targeted support for new companies rather than blanket measures such as cuts in business rates.

A new paper for the Fabian Society by the former Labour MP and leadership contender Bryan Gould believes there should be a twin-tracked approach: a 30% depreciation of the currency accompanied by a focus on credit creation for investment. This, he argues, could happen either through the existing banking system under the direction of the Bank of England or, if necessary, through a national investment bank. Gould says this is not about “picking winners” but about setting the parameters for possible good investment opportunities.

What links all these ideas is the belief that Britain needs a proper long-term industrial strategy. The prerequisite for that is an admission that the current model – low investment and competing on cost rather than quality – has failed, is failing and will continue to fail.

My atheism does not make me superior to believers. It's a leap of faith too

Ijeoma Olua in The Guardian

 

I don’t believe in a higher power, but the fact we’ve never proven there isn’t one means there could be a God.

There are many different ways in which people come to atheism. Many come to it in their early adult years, after a childhood in the church. Some are raised in atheism by atheist parents. Some come to atheism after years of religious study. I came to atheism the way that many Christians come to Christianity – through faith.

I was six years old, sitting in my frilly yellow Easter dress, throwing black jelly beans out into the yard, when my mom explained the story of Easter to me. She explained Jesus’s crucifixion and resurrection as the son of God, going into great detail. And when she was finished telling me the story that had been a foundation of her faith for the majority of her life, I looked at her and said: “I don’t think that really happened.”

I didn’t come to this conclusion because the story of a man waking from the dead made no sense – I wasn’t an overly analytical child. I still enthusiastically believed in Santa Claus and the Easter bunny. But when I searched myself for any sense of belief in a higher power, it just wasn’t there. I wanted it to be there – how comforting to have a God. But it wasn’t there, and it isn’t to this day.

The same confidence that many of my friends have in the belief that Jesus walks with them is the confidence that I have that nobody walks with me. The cold truth that when I die I will cease to exist in anything but the memory of those I leave behind, that those I love who leave are lost forever, is always with me.

These are my truths. I don’t like these truths. As a mother, I’d give anything to believe that if anything were to happen to my children they would live forever in the kingdom of a loving God. But I don’t believe that.

But my conviction that there is no God is nonetheless a leap of faith. Just as we have been unable to prove there is a God, we have also been unable to prove that there isn’t one. The feeling that I have in my being that there is no God is what I go by, but I’m not deluded into thinking that feeling is in any way more factual than the deep conviction by theists that God exists.

I keep this fact in mind – that my atheism is a leap of faith – because otherwise it’s easy to get cocky. It’s easy to look at acts of terror committed in the names of different gods, debates about the role of women in various churches, unfamiliar and elaborate religious rules and rituals and think, look at these foolish religious folk. It’s easy to view religion as the root of society’s ills.

But atheism as a faith is quickly catching up in its embrace of divisive and oppressive attitudes. We have websites dedicated to insulting Islam and Christianity. We have famous atheist thought-leaders spouting misogyny and calling for the profiling of Muslims. As a black atheist, I encounter just as much racism amongst other atheists as anywhere else. We have hundreds of thousands of atheists blindly following atheist leaders like Richard Dawkins, hurling insults and even threats at those who dare question them.

Look through new atheist websites and twitter feeds. You’ll see the same hatred and bigotry that theists have been spouting against other theists for millennia. But when confronted about this bigotry, we say “But I feel this way about all religion,” as if that somehow makes it better. But our belief that we are right while everyone else is wrong; our belief that our atheism is more moral; our belief that others are lost: none of it is original.

Perhaps this is not religion, but human nature. Perhaps when left to our own devices, we jockey for power by creating an “other” and rallying against it. Perhaps we’re all part of a system that creates hierarchies based on class, gender, race and ethnicity because it’s the easiest way for the few to overpower the many. Perhaps we all fall in line because we look for any social system – be it Christianity, Islam, socialism, atheism – to make sense of it all and to feel like we matter in a world that shows time and time again that we don’t.

If we truly want to free ourselves from the racist, sexist, classist, homophobic tendencies of society, we need to go beyond religion. Yes, religion does need to be examined and debated regularly and fervently. But we also need to examine our school systems, our medical systems, our economic systems, our environmental policies.

Faith is not the enemy, and words in a book are not responsible for the atrocities we commit as human beings. We need to constantly examine and expose our nature as pack animals who are constantly trying to define the other in order to feel safe through all of the systems we build in society. Only then will we be as free from dogma as we atheists claim to be.

Germany faces impossible choice as Greek, Spanish and Italian austerity revolt spreads

Ambrose Evans-Pritchard in The Telegraph

The political centre across southern Europe is disintegrating. Establishment parties of centre-left and centre-right - La Casta, as they say in Spain - have successively immolated themselves enforcing EMU debt-deflation.

Spain's neo-Bolivarian Podemos party refuses to fade. It has endured crippling internal rifts. It has shrugged off hostile press coverage over financial ties to Venezuela. Nothing sticks.

The insurrectionists who came from nowhere last year - with Trotskyist roots and more radical views than those of Syriza in Greece - are pulling further ahead in the polls. The latest Metroscopia survey gave Podemos 28pc. The ruling conservatives have dropped to 21pc.

The once-great PSOE - Spanish Workers Socialist Party - has fallen to 18pc and risks fading away like the Dutch Labour Party, or the French Socialists, or Greece's Pasok. You can defend EMU policies, or you can defend your political base, but you cannot do both.

As matters stand, Podemos is on track to win the Spanish elections in November on a platform calling for the cancellation of "unjust debt", a reversal of labour reforms, public control over energy, the banks, and the commanding heights of the economy, and withdrawal from Nato. 

Europe's policy elites can rail angrily at the folly of these plans if they wish, but they must answer why ex-Trotskyists threatening to dismantle market capitalism are taking a major EMU state by storm. It is what happens when 5.46m people lack jobs, when 2m households still have no earned income, and when youth unemployment is still running at 51.4pc, and home prices are down 42pc, six years into a depression.

It is pointless protesting that Spain's economy is turning the corner, a contested claim in any case. There comes a point when a society breaks and stops believing anything its leaders say.

The EU elites themselves have run their currency experiment into the ground by imposing synchronized monetary, fiscal, and banking contraction on the southern half of EMU, in defiance of known economic science and the lessons of the 1930s. It is they who pushed the eurozone into deflation, and thereby pushed the debtor states into accelerating compound-interest traps.

It is they who deployed the EMU policy machinery to uphold the interest of creditors, refusing to acknowledge that the root cause of Europe's crisis was a flood excess capital flows into vulnerable economies. It is they who prevented a US-style recovery from the financial crisis, and they should not be surprised that such historic errors are coming back to haunt.

The revolt in Italy has different contours but is just as dangerous for Brussels. Italians may not wish to leave the euro but political consent for the project but broken down. All three opposition parties are now anti-euro in one way or another. Beppe Grillo's Five Star movement - with 108 seats in parliament - is openly calling for a return to the lira.

Mr Grillo proclaims that Syriza is carrying the torch for all the long-suffering peoples of southern Europe, as it is in a sense.

"What’s happening to Greece today, will be happening to Italy tomorrow. Sooner or later, default is coming," he said.

Premier Matteo Renzi staked everthing on a recovery that has yet to happen. He is running out of political time. Deflation is overwhelming the fiscal gains from austerity. Italy's public debt has jumped from 116pc to 133pc of GDP in three years. The youth jobless rate is 44pc and still rising. Italian GDP has fallen 10pc in six years, and by 15pc in the Mezzogiorno. Italy's industrial production has dropped back to the levels of 1980.

The leaders of Spain and Italy know that their own populists at home will seize on any concessions to Syriza over austerity or debt relief as proof that Brussels yields only to defiance. They have a very strong incentive to make Greece suffer, even if it means a cataclysmic rupture and a Greek ejection from the euro.

Yet to act on this political impulse risks destroying the European Project. Europe's Left would nurture a black legend for a hundred years if the first radical socialist government of modern times was crushed and forced into bankruptcy by Frankfurt bankers - acting at the legal boundaries of their authority, or beyond - choosing to switch off liquidity support for the Greek financial system.

It would throw the Balkans into turmoil and probably shatter the security structure of the Eastern Mediterranean. It is easy to imagine a chain of events where an embittered Greece pulled out of Nato and turned to Russia, paralysing EU foreign policy in a self-feeding cycle of animosity that would ultimately force Greece out of the union altogether.

The charisma of the EU - using the Greek meaning - would drain away if such traumatic events were allowed to unfold, and all because a country of 11m people wanted to cut its primary budget surplus to 1.5pc from 4.5pc of GDP and shake a discredited Troika off its back, for that is what it comes down to.

One is tempted to cite Jacques Delors' famous comment that "Europe is like a riding bicycle: you stop pedalling and you fall off" but that hardly captures the drama of what amounts to civil war in a union built on a self-conscious ideology of solidarity.

"The euro is fragile. It is like a house of cards. If you pull away the Greek card, they all come down,” warned Greece's finance minister Yanis Varoufakis.

“Do we really want Europe to break apart? Anybody who is tempted to think it possible to amputate Greece strategically from Europe should be careful. It is very dangerous. Who would be hit after us? Portugal?" he said.

George Osborne clearly agrees. The worries have been serious enough to prompt a one-hour Cobra security meeting. "The risks of a miscalculation or a misstep leading to a very bad outcome are growing,” said the Chancellor.

Currency guru Barry Eichengreen - the world's leading expert on the collapse of the Gold Standard in 1931 - thinks Grexit might be impossible to control. "It would be Lehman Brothers squared,” he said.

This is not the view in Germany, at least not yet. The IW and ZEW institutes both argue that Europe can safely withstand contagion now that it has a rescue machinery and banking union in place, and must not give in to "blackmail".

Such is the 'moral hazard' view of the world, the reflex that led to the Lehman collapse in 2008. "If we knew then what we know now, we wouldn't have done it," the then-US treasury secretary Tim Geithner told EMU leaders in early 2011, the first time they were tempted to eject Greece.

The fond hope is that the European Central Bank can and will smooth over any turbulence in Portugal, Italy and Spain by mopping up their bonds, now that quantitative easing is on the way. Yet the losses suffered from a Greek default would surely ignite a political firestorm in Germany.

Bild Zeitung devoted two pages this morning to warnings that Grexit would cost Germany €63bn, or much more once the Bundesbank's Target2 payments though the ECB system are included. The unpleasant discovery that Germany's Target2 exposure can in fact go up in smoke - despite long assurances that this could never happen - might make it untenable to continue such support.

It is unfair to pick on Portugal but its public and private debts are 380pc of GDP - the highest in Europe and higher than those of Greece - making is acutely vulnerable to toxic effects of deflation on debt dynamics.

Portugal's net international investment position (NIIP) - the best underlying indicator of solvency - has reached minus 112pc of GDP. Public debt has jumped from 111pc to 125pc of GDP in three years. The fiscal deficit is still 5pc. The country's ranking in global competitiveness is close to that of Greece.

"The situation in Portugal is very different," says Paulo Portas, the deputy premier. Sadly it is not. Once you violate the sanctity of monetary union and reduce EMU to a fixed-exchange system, the illusion that Portugal is out of the woods may not last long. Markets will test it.

Only two people can now stop the coming train-wreck. Chancellor Angela Merkel and her finance minister Wolfgang Schauble, a man who masks his passion for the EU cause behind an irascible front.

Syriza have made a strategic blunder by turning their struggle into a fight with Germany, demanding Nazi war reparations, and toying with the Russian card at the very moment when Mrs Merkel is locked in make-or-break talks on Ukraine with Vladimir Putin.

Mr Varoufakis is trying to limit the damage, praising Mrs Merkel as the "most astute politician" in Europe, and Mr Schauble as the "only European politician with intellectual substance" - a wounding formulation for the others. He has called on Germany to cast off self-doubt and assume its roll as Europe's benevolent hegemon, almost as if he were evoking the glory days of the Holy Roman Empire when pious German emperors stood as guarantors for Christendom.

This is the only pitch that will work. Angela Merkel has risen above her narrow East German outlook and her fiscal platitudes of the early crisis to emerge as the soul-searching Godmother of Europe and the last credible defender of its unity. But even Mrs Merkel can be pushed too far.

The Science Delusion by Rupert Sheldrake - A review

                                 

                                  The Science Delusion - Sheldrake 

                                The Day the Universe Changed - James Burke

We must find a new way of understanding human beings

• 
• • Mary Midgley
  • The Guardian, Friday 27 January 2012 09.00 GMT

Dogs: do they really know when you're coming home? Photograph: Laurie and Charles/Getty Images

The unlucky fact that our current form of mechanistic materialism rests on muddled, outdated notions of matter isn't often mentioned today. It's a mess that can be ignored for everyday scientific purposes, but for our wider thinking it is getting very destructive. We can't approach important mind-body topics such as consciousness or the origins of life while we still treat matter in 17th-century style as if it were dead, inert stuff, incapable of producing life. And we certainly can't go on pretending to believe that our own experience – the source of all our thought – is just an illusion, which it would have to be if that dead, alien stuff were indeed the only reality.

 

We need a new mind-body paradigm, a map that acknowledges the many kinds of things there are in the world and the continuity of evolution. We must somehow find different, more realistic ways of understanding human beings – and indeed other animals – as the active wholes that they are, rather than pretending to see them as meaningless consignments of chemicals.

Rupert Sheldrake, who has long called for this development, spells out this need forcibly in his new book. He shows how materialism has gradually hardened into a kind of anti-Christian faith, an ideology rather than a scientific principle, claiming authority to dictate theories and to veto inquiries on topics that don't suit it, such as unorthodox medicine, let alone religion. He shows how completely alien this static materialism is to modern physics, where matter is dynamic. And, to mark the strange dilemmas that this perverse fashion poses for us, he ends each chapter with some very intriguing "Questions for Materialists", questions such as "Have you been programmed to believe in materialism?", "If there are no purposes in nature, how can you have purposes yourself?", "How do you explain the placebo response?" and so on.

In short, he shows just how unworkable the assumptions behind today's fashionable habits have become. The "science delusion" of his title is the current popular confidence in certain fixed assumptions – the exaltation of today's science, not as the busy, constantly changing workshop that it actually is but as a final, infallible oracle preaching a crude kind of materialism.

In trying to replace it he needs, of course, to suggest alternative assumptions. But here the craft of paradigm-building has chronic difficulties. Our ancestors only finally stopped relying on the familiar astrological patterns when they had grown accustomed to machine-imagery instead – first becoming fascinated by the clatter of clockwork and later by the ceaseless buzz of computers, so that they eventually felt sure that they were getting new knowledge. Similarly, if we are told today that a mouse is a survival-machine, or that it has been programmed to act as it does, we may well feel that we have been given a substantial explanation, when all we have really got is one more optional imaginative vision – "you can try looking at it this way".

That is surely the right way to take new suggestions – not as rival theories competing with current ones but as extra angles, signposts towards wider aspects of the truth. Sheldrake's proposal that we should think of natural regularities as habits rather than as laws is not just an arbitrary fantasy. It is a new analogy, brought in to correct what he sees as a chronic exaggeration of regularity in current science. He shows how carefully research conventions are tailored to smooth out the data, obscuring wide variations by averaging many results, and, in general, how readily scientists accept results that fit in with their conception of eternal laws.

He points out too, that the analogy between natural regularities and habit is not actually new. Several distinctly non-negligible thinkers – CS Peirce, Nietzsche, William James,AN Whitehead – have already suggested it because they saw the huge difference between the kind of regularity that is found among living things and the kind that is expected of a clock or a calcium atom.

Whether or no we want to follow Sheldrake's further speculations on topics such asmorphic resonance, his insistence on the need to attend to possible wider ways of thinking is surely right. And he has been applying it lately in fields that might get him an even wider public. He has been making claims about two forms of perception that are widely reported to work but which mechanists hold to be impossible: a person's sense of being looked at by somebody behind them, and the power of animals – dogs, say – to anticipate their owners' return. Do these things really happen?

Sheldrake handles his enquiries soberly. People and animals do, it seems, quite often perform these unexpected feats, and some of them regularly perform them much better than others, which is perhaps not surprising. He simply concludes that we need to think much harder about such things.

Orthodox mechanistic believers might have been expected to say what they think is wrong with this research. In fact, not only have scientists mostly ignored it but, more interestingly still, two professed champions of scientific impartiality, Lewis Wolpert and Richard Dawkins, who did undertake to discuss it, reportedly refused to look at the evidence (see two pages in this book). This might indeed be a good example of what Sheldrake means by the "science delusion".

Oprah is wrong. Atheists can experience wonder and awe

Those who believe in God do not have a monopoly over possession of that magnificent sense of the sublime

Frank Furedi in The Independent

In one sense Oprah Winfrey was absolutely right when she lectured the humanist swimmer Diana Nyad about the inconsistency of the outlook of atheism with a sense of awe. For Oprah, a woman of faith, the sense of wonder and awe are inextricably intertwined with religion and God.

Indeed since the emergence of the Judeo-Christian tradition, awe is the mandatory reaction that the true believer is required to have towards God. From this perspective the sense awe and wonder is bounded and regulated through the medium of religious doctrine. In contrast, those of us who believe that it was not God but humans who are the real creators are unlikely to stand in awe of this allegedly omnipotent figure.

Although in the 21st century the term awe and awesome are used colloquially to connote amazement and admiration historically these words communicated feelings of powerlessness, fear and dread. The Oxford English Dictionary tells us, that awe means ‘immediate and active fear; terror, dread’. The OED explains that from its original reference to the Divine Being it has acquired a variety of different meanings, such as ‘dread mingled with veneration’ and ‘reverential or respectful fear’. All these meanings signal one important idea which that ‘fearing’ and ‘dreading’ are inherently positive attributes to be encouraged.

The religious affirmation of fear and dread of a higher being is indeed alien to the humanist view of the world. But does that mean that Oprah is right and that atheists cannot wonder and awe? Not at all. Those who believe in God do not have a monopoly over possession of that magnificent sense of the sublime that catches us unaware in the face of the truly mysterious. Atheists and humanist experience wonder and awe in ways that sometimes resembles but often differs from the way that the religious people respond to the unknown.

We all have the capacity and the spiritual resources to experience the mysteries of life and the unexpected events that excite our imagination through a sense of wonder. Those who stand in awe of God internalise their sense of wonder through the medium of their religious doctrine. Their response can possess powerful and intense emotions. But the way they wonder is bounded by their religious beliefs and their conception of God.  In a sense this experience of spiritual sensibility is both guided and ultimately dictated by doctrine and belief. Historically those religious people who dared to go beyond these limits risked being denounced as heretical mystics.

In contrast to the way that religion does wonder, atheists and humanists possess a potential for experiencing in a way that is totally unbounded. Humanists do not stand in awe of the mysteries of God but truly wonder at the unknown. Through the resources of the human imagination (humanities) and of the sciences the thinking atheist realises that every solution creates a demand for new answers.  That’s what makes our wonder so special. Instead of dreading and fearing, it empowers us to set out on the quest to discover and understand.

Experience shows that the capacity to wonder is a truly human one. Toddlers and young children do not need God to wonder at the mysterious world that surrounds them. At a very early stage in their life they express their sense of astonishment and wonder without effort or a hint of embarrassment. Thankfully most of us continue to be motivated and inspired by the mysteries of life.

One final point. There are of course some new atheists who insist on living in a spiritual-free world. From their deterministic perspective everything is explained by neuro-science or our genes. But what drives them away from wonder is not their atheism but their inability to engage with uncertainty. In that respect they are surprisingly similar to those who embrace religious dogma to spare themselves the responsibility of engaging with the mysteries that confront us in everyday life.

For Tories, privatisation is still a matter of dogmatic faith

Dogmatic in the face of all the evidence; backing fringe policies embraced by obscure minorities; pushing failed ideas which, if implemented, would be nothing short of disastrous. Here are accusations long thrown at the left by level-headed advocates of such moderate proposals as, say, illegally invading countries prompting hundreds of thousands of deaths, or introducing cuts Mrs Thatcher could only have dreamt of.

So how about this for an extreme, unpopular policy? According to YouGov, the proposed privatisation of the Royal Mail is opposed by over two-thirds of Britons; even Tory voters are more likely to be against than in support. Just 4 per cent strongly support the flogging off of yet another public service, which gives an indication of how few hardcore free-marketeers there are.

The breadth of opposition is hardly surprising. Britons have endured a three-decade-long experiment of selling off our utilities and public services. After a fair run, the cheerleaders of free market extremism must now accept that they have failed to win the support or consent of the British people. A poll in April found that 61 per cent believed major public services such as energy and water were best run by the public sector; only just over a quarter opted for private companies. Every poll going shows that we want the railways back in public ownership. That so few MPs echo these calls in Parliament is a damning indictment indeed of our political elite and the state of British democracy.

The public’s verdict is undoubtedly based on pragmatic experience. The taxpayer is paying around three times more subsidising private railways than when they were run by the state. Ticket prices soar above inflation, pricing out millions of families, and the service is fragmented and chaotic. Energy and water companies are ripping off consumers when workers’ pay packets are facing the biggest squeeze in modern times.

This latest bout of free market extremism comes after a torrid week for the dogma of “private sector good, public sector bad”. Security companies G4S and Serco have both been accused of overcharging the state for the electronic tagging of offenders, including billing government for people who had died or never even been tagged. During the Olympics, G4S failed to deliver enough security guards, leaving the state – who else? – to fill the vacuum. At the time, Tory Cabinet minister Philip Hammond admitted that the episode challenged his “prejudice that we have to look at the way private sector does things to know how we should do things in government”.

The list could go on. Take the likes of A4e, the welfare-to-work company: on top of being investigated for fraud, its former chief executive Emma Harrison stood down after paying herself a £8.6m share dividend at the expense of the state. There are the PFI schemes that exploded under New Labour, leaving the taxpayer saddled with billions of pounds worth of debt. And then, of course, there’s the small matter of the banks that collapsed. It wasn’t free market dogma that rescued them – it was the state.

The case against privatising our Royal Mail is overwhelming, even disregarding other failures. It is a profitable business, making £440m last year. It is a natural monopoly. The right-wing think-tank Bow Group suggests that rural Post Offices could close and the price of stamps could be hiked.

The truth is the free market extremism pushed by the biggest party in Britain – the neo-liberal centre of Blairites, Cameroon Tories and Orange Book Lib Dems – is riddled with hypocrisy. Modern capitalism depends on a big state, on government largesse. Bailed out banks; PFI contracts; tax credits that subsidise bosses paying low wages; housing benefit subsidising landlords because of the mass sell-off of council houses – the list goes on.

Many of the free market extremists have benefited directly from their dogma. Take Patricia Hewitt, who journeyed from left-wing firebrand to Blairite health secretary: she was recently appointed board director at Bupa, a health company that stands to benefit from the privatisation of the NHS. Lord Norman Warner, a “Labour” Lord who supports the Tories’ dismantling of the NHS, is a non-executive chairman of UK Health Gateway and an adviser to technology firm Xansa, all of which government plans have guaranteed a bright future. The revolving door of free-market extremists is profitable indeed.

Evidence that shatters the demonisation of the public sector is routinely ignored by our media and political elite. The Government is planning to reprivatise the East Coast mainline, despite the Office of Rail Regulation finding it to be the “most efficiently run franchise”. None of this means opponents of free market extremism should be defensive, allowing themselves to be painted as conservative opponents of “reform” (a term stolen and redefined as “privatising” and “cutting”). When the post-war Labour government nationalised key sectors of the economy, it created top-down, undemocratic public corporations. Without meaningfully involving users and workers, there was little resistance when Thatcher sold the family silver.

It’s time to argue for a new form of democratic, social ownership. Take the railways. They could easily be taken into public ownership if the political will was there: the state could simply take over each franchise as it expires. But instead of being run by bureaucrats in Whitehall, passengers and workers could be given the right to vote for representatives on the management board. The same argument could be made for, say, the banks, the NHS, or Royal Mail, forcing services to be more responsive to the needs of users, without selling them off to companies who are solely interested in making big bucks – not in delivering a quality service.

As the free market extremists once again ignore the will of the British people, it’s time to go on the offensive. Yet another disastrous sell-off doesn’t mean simply sticking to the status quo. Democracy, not privatisation: that should be our call.

Dogma will lead to Murder

by A C Grayling

Although defenders of religion like to portray faith as a source of peace and fellowship, and condemn those who commit atrocities in its name as untrue believers, the daily news media show how far this is from being invariably true. In fact, the relentless drip of bad news about religion-prompted violence in the world shows that the more zealous people are in their religious beliefs, the more likely they are to behave in non-rational, antisocial or violent ways.

The cold-blooded public murder of soldier Lee Rigby in Woolwich this week is an example. Murders are committed for a variety of reasons, but one thing they have in common is that those who commit them have to be in an abnormal state of mind. From rage or jealousy, through the cold psychopathology of the professional hitman, to the soldier who must be rigorously schooled and disciplined so that he can kill other human beings in defined circumstances, a difference to the normal mindset is required. One potent way of achieving the required mindset is religious zealotry.

Belief in supernatural beings, miracles and the fantastical tales told in ancient scriptures is, at least, irrational and, at worst, pathological. The more earnest the belief, therefore, the less sane is it likely to be in its application to the real world. At the extreme, it not only prompts but also – from their own perspective – justifies believers in what they do. Unnatural lifestyles, self-harm, ritualistic repetitive behaviours, fantasy beliefs and the like – all of them the norm for religiously committed folk – might be harmless to others in most cases, but when they become annexed to hostility to others outside the faith, or to apostates within it, the result is dangerous.

To the ordinarily sane mind, such acts as butchering a stranger in the street in broad daylight, and engineering a mass murder such as happened on 9/11, are in equal proportions lunatic and disgusting. Working backwards from that judgement, we must arrive at the conclusion that the people who do such things are neither ordinary nor sane. They exhibit a defining mark of psychopathology: the ability to proceed by perfectly rational steps from mad premises to horrible conclusions, while yet displaying in most of their surrounding behaviour the appearance of normality.

Consider: the 9/11 murderers engaged in a long period of flying training, planning, financing their activities and living among their victims – even queuing politely to get on the fatal planes with those they were about to kill – and all this takes self-control. But wedged into the outwardly normal behaviour, like a rusted medieval nail driven deep into their brains, was the lunatic belief that they were doing something meritorious, justified and moral.

“Faith,” someone once said, “is what I will die for; dogma is what I will kill for.” The border between preparedness to die and kill is so porous that it is easily crossed. As a result, history welters in the blood of religion-inspired mayhem. The problem is the complete and unshakeable assurance that religion gives its votaries that what they do in its name deserves praise. Agents of the Inquisition burned heretics to death to save them from the consequences of persisting in their sinfulness, so that they would spend less time in purgatory. So it was, they believed, an act of kindness to kill them. The current crop of terrorists do not bother to claim kindness towards their victims; hatred – or, at a poor best, revenge – is the frankly avowed motive. But here the justification is that unbelievers are worthless, deserving nothing but death.

It is a theme of recent critical attacks on religion that it is too often divisive, conflict-generating, atrocity-justifying and inflammatory – and this quite independently of whether any religious claims about supernatural beings or miraculous occurrences are true. Religious apologists are eager to point to the charitable and artistic outcomes of religion either as a palliation or an excuse, but non-religious people do charitable and artistic things, too, and it is hard to detach them from the kindness and creativity, respectively, that are a natural endowment of most human beings no matter what they believe.

In further defence of religion, its apologists haul out the weary canards about Hitler, Stalin and Mao as examples of secular committers of atrocity – the claim even being made that they did what they did in the cause of atheism as such. Apart from the fact that Hitler was not an atheist, the interesting point about ideologies that claim the One Great Truth and the One Right Way is that it does not matter whether it invokes gods or the dialectic of history as their justification; it is their monolithic and totalising character that does the work of making them murderous. The Inquisition of Torquemada and Stalinism are little different in their effects on their hapless victims.

The obvious point to note about the murders carried out in the name of a deity this week, whether Sunni car bomb attacks on Shia in Iraq or the murder of Lee Rigby, is that they were affairs of conviction. To do such things, you have to be convinced to the point of unreason that you are doing right. Note this contrast: in the careful estimations of a scientific world-view, nothing is so certain. The absence of question marks and their prompting of reflection, caution and the search for good evidence are not required when it comes to the eternal truths of faith.

Is there any way of combating the corrosive effects of unreasoning religious conviction that leads to so much murder in the world? Yes: stop making children think that they must implicitly accept and unquestioningly obey one or another supposed Great Truth. Encourage them to be sceptical, to ask for the reasons and the evidence, to see with a clear eye the consequences that might follow from believing an inherited picture of the world that wishes to be immune to challenge or revision, and is prepared to kill people who do challenge it.

Then, in a generation or two, what happened on a Woolwich street might become close to impossible. 

Creationist free schools are an abuse - ancient ignorance has no place in education Young minds are primed by nature to believe most of what adults tell them to believe. They should be treated with respect, not twisted into shapes that conform with dogma

A C Grayling in The Independent

An increasing concern about the current free school movement is that too many of those behind it have a religious agenda. Freedom of Information figures reported in The Independent this week show that 132 of the 517 applications to open free schools in the past couple of years have come from faith groups.

Creationists and fundamentalists of various stamps are eager to open schools so that they can proselytise the young, knowing that this is by far the chief way that religious belief survives in the world.

A single moment’s thought shows that the expression “faith school” is a contradiction: education should be about how to think, not what to think; it should be about learning, enquiry, testing evidence and arguments, not indoctrination of the young into having “faith” in one or other of the many ancient belief systems that constitute religion. The younger a child is, the more intellectually defenceless he is, and the easier it is to fill his head with beliefs from which it might cost him much, later in life, to free himself so that he can see the world truly and clearly.

It is not for nothing that the Jesuits say, “Give me the child until he is seven and I will give you the man.”

For note what “faith” means: it means believing without evidence or reason, and even in the face of contrary evidence; this intellectual irresponsibility is regarded as a religious virtue, as the story of Doubting Thomas is intended to illustrate.

There are, therefore, powerful reasons for saying that the government should require all free schools to be secular in the sense of neutral towards faith commitments. Children should not be subjected to indoctrination into religious beliefs, any more than they should be instructed in school to believe that astrology, magic, the occult or voodoo are true.

In being taught about religion (as opposed to being taught to believe religious dogmas), they will see for themselves the conflicting claims, the basis in ancient ignorance, and the too often baleful effects of religion on human lives and societies. Whether they come to believe in Shintoism or Christianity or Islam after that will at least be their own choice, based on an examination of the grounds for believing.

I and my colleagues at the New College of the Humanities have put in a bid to open a free school in Camden with a concentration in the arts and humanities. One stringent principle of its educational ethos is to be that pupils must be encouraged and equipped to think for themselves, to challenge, to ask questions, to have a very good case for committing themselves to any ideological viewpoint, whether political, religious or otherwise. That is the overwhelming responsibility of education.

If the phrase “faith school” makes any sort of sense, it must mean “schooling in a faith”.  We have been lulled by the wishy-washy laissez-faire history of Church of England schools into thinking that religious-ethos schools are harmless affairs, with a bit of cod spirituality and morality thrown in at school assembly on some mornings of the week.

But the new faith school movement is far from harmless. Its objective is to capture minds and hearts for a sectarian outlook. Creationists and “intelligent design theorists” wish to combat science where it is easiest to do so: in very young heads which are primed by nature to believe most of what adult authorities tell them about the world.

In the past, Richard Dawkins and I have described religious indoctrination of small children as “child abuse”, and if one is being strictly literal in the use of these terms, so indeed it is. This seems fighting talk to those who are unaware what a cost the world pays in the divisions, conflicts and antipathies generated by religion, or the psychological burden of children and adults struggling with feelings of sin and inadequacy.

The argument that children need to be nourished spiritually and morally as well as educated in the theorems of arithmetic and the dates of history are right: but those who use this argument thinking that only religion provides these things are more wrong than they know. There are rich, deep, powerful traditions of thought and debate about life and how it can be best lived in the philosophy, literature and art of our world, which have no reference to religion, require no “leaps of faith”, and appeal to the clarity of reason and the innate warmth of the human heart as their basis.

Religion is the belief system of our remote ancestors who knew little about the universe, and made up stories to explain it to themselves. It is extraordinary that so many people still live by those stories, so manifestly inadequate as a resource for understanding the world and informing our moral lives. Education should not be narrowing minds into the antiquated moulds of those beliefs, but opening them so that by the bright light of enquiry they can seek and examine evidence for themselves.

A young mind is a beautiful opportunity: receptive, curious, quick to soak up information and techniques; it is something to be treated with utmost respect, not twisted into shapes that conform to antique dogmas, but given every chance to grow and discover. That is what a free school should aim for: an education in intellectual autonomy.

Professor Grayling is founder and Master of the New College of Humanities

Wall Street thanks you for your service, Tim Geithner

First the treasury secretary propped up the big banks with public spending. Then he backed their agenda: cuts to public spending

• 
• • Dean Baker
  • guardian.co.uk, Friday 11 January 2013 20.08 GMT

Departing Treasury Secretary Timothy Geithner is congratulated by President Barack Obama and his next nominee, Jack Lew. Photograph: Mark Wilson/Getty Images

Treasury Secretary Timothy Geithner's departure from the Obama administration invites comparisons with Klemens von Metternich. Metternich was the foreign minister of the Austrian empire who engineered the restoration of the old order and the suppression of democracy across Europe after the defeat of Napoleon.

This was an impressive diplomatic feat – given the widespread popular contempt for Europe's monarchical regimes. In the same vein, protecting Wall Street from the financial and economic havoc they brought upon themselves and the country was an enormous accomplishment.

During his tenure as head of the New York Fed and then as treasury secretary, most, if not all, of the major Wall Street banks would have collapsed if the government had not intervened to save them. This process began with the collapse of Bear Stearns, which was bought up by JP Morgan in a deal involving huge subsidies from the Fed.

The collapse of Lehman Brothers, a second major investment bank, started a run on the three remaining investment banks that would have led to the collapse of Merrill Lynch, Morgan Stanley, and Goldman Sachs if the Fed, FDIC, and treasury had not taken extraordinary measures to save them. Citigroup and Bank of America both needed emergency facilities established by the Fed and treasury explicitly for their support, in addition to all the below market-rate loans they received from the government at the time. Without this massive government support, there can be no doubt that both of them would currently be operating under the supervision of a bankruptcy judge.

Of the six banks that dominate the US banking system, only Wells Fargo and JP Morgan could conceivably have survived without hoards of cash rained down on them by the federal government. Even these two are questionmarks, since both helped themselves to trillions of dollars of below market-rate loans, in addition to indirectly benefiting from the bailout of the other banks that protected many of their assets.

Had it not been for Geithner and his sidekicks, therefore, we would have been permanently rid of an incredibly bloated financial sector that haunts the economy like a horrible albatross.

Along with the salvation of the Wall Street banks, Geithner also managed to restore their agenda of deficit reduction. Even though the economy is still down more than 9 million jobs from its full employment level, none of the important people in Washington is talking about measures that would hasten job creation.

Instead, the focus is exclusively on deficit reduction, a process that is already slowing growth and putting even more people out of work. While lives are being ruined today by the weak economy, Geithner helped create a policy agenda where the focus of debate is the budget projections for 2022.
These projections are hugely inaccurate. Furthermore, the actual budget for 2022 is largely out of the control of any politicians currently in power, since the Congresses elected in 2016, 2016, 2018, and 2022, along with the presidents elected in 2016 and 2020, may have some different ideas.
Nonetheless, the path laid out by Geithner's team virtually ensures that these distant budget targets will serve as a distraction from doing anything to help the economy now.

There are two important points that should be quashed quickly in order to destroy any possible defense of Timothy Geithner.

It is often asserted that we were lucky to escape a second Great Depression. This is nonsense.
The first Great Depression was not simply the result of bad decisions made in the initial financial crisis. It was the result of ten years of failed policy. There is zero, nothing, nada that would have prevented the sort of massive stimulus that was eventually provided by the second world war from occurring in 1931, instead of 1941. We know how to recover from a financial collapse: the issue of whether we do so simply boils down to political will.

This is demonstrated clearly by the case of Argentina, which had a full-fledged collapse in December of 2001. After three months of freefall, its economy stabilized in the second quarter of 2002. It came roaring back in the second half of the year and had made up all of the lost ground by the middle of 2003. Its economy continued to grow strongly until the 2009, when the world economic crisis brought it to a standstill. There is no reason to believe that our policymakers are less competent than those in Argentina: the threat of a second Great Depression was nonsense.

Finally, the claim that we made money on the bailouts is equally absurd. We lent money at interest rates that were far below what the market would have demanded. Most of this money, plus interest, was paid back. But claiming that we thus made a profit would be like saying the government could make a profit by issuing 30-year mortgages at 1% interest. Sure, most of the loans would be repaid, with interest, but everyone would understand that this was an enormous subsidy to homeowners.

In short, the Geithner agenda was to allow the Wall Street banks to feed at the public trough until they were returned to their prior strength. Like Metternich, he largely succeeded.

Of course, democracy did eventually triumph in Europe. Let's hope that it doesn't take quite as long for that to happen here.

Reclaim the BBC – starting with the Today programme

The Today programme's old boys' club style reveals just how out of touch the BBC is with its licence-fee payers

• Elinor Davies for our Beeb, part of the Guardian Comment Network
• guardian.co.uk, Friday 1 June 2012 11.39 BST

'Despite its veneer of neutrality [Radio 4's] Today programme gives us a very specific take on the world.' Photograph: Graeme Robertson

1. ourBeeb is a new website hosted by openDemocracy's OurKingdom section, which will debate the future of the UK's most important cultural institution

Like many people, I tune into the Today programme most weekday mornings before I go to work. It's a form of masochism, really, as I don't enjoy it much and I know full well I will end up swearing at the radio. But it covers the main stories of the day and makes me feel vaguely plugged into what's going on in the world. So why the expletives?

Despite its veneer of neutrality (a problematic concept anyway, of course) the Today programme gives us a very specific take on the world. It's a world in which the views of the establishment are unquestionable facts, and a needlessly aggressive interview style masquerades as incisive journalistic scrutiny.

In the programme's daily review of the newspapers the entrenched prejudices of the mainstream media regularly go unchallenged. The presenters read out quotes from a selection of the daily rags on a range of the day's stories. But who decides which papers, which quotes, which stories? Last Tuesday they covered the revelation by the Department for Work and Pensions that thousands of people on sickness benefit "had been discovered to be fit for work". This is a complicated news story – who decided they were fit for work? According to what measures? But not for Today. We get the illusion of bias-free reporting – they're only reading out what the papers say, after all. But what the presenters gave us were two very similar angles on the story, from the Daily Mail and the Sun, both of which unquestioningly used these statistics to bolster the editorial line that these scroungers should get back to work. Why quote from two papers with the exact same viewpoint?

Often, in an effort to provide two sides of a debate there is that familiar, pointlessly adversarial interview style that the Today programme specialises in. Last June, the writer Graham Linehan wrote this searing critique of the "squabbling that passes for debate" on Today. Linehan was writing after his experience on the programme, in which he had been invited on to discuss his stage adaptation of The Ladykillers, only to discover he was expected to provide one side in an "argument" about the value of adapting films for theatre. Of course, as Linehan admits, confrontational interviews sometimes make sense – we need them sometimes to get to the truth. But more often it is not the best way to get to the heart of a story. Such interviews have the air of a university debating society, where notions are challenged and argued merely for the fun of it. (They remind me a little too much of Chris Morris interviewing the organiser of the London Jam Festival on The Day Today.)

Paradoxically, when the Today presenters are confronted with the genuinely powerful, the interviews can be surprisingly lightweight, a case in point being John Humphrys' recent interview with David Cameron. Humphrys spent a tiresome five or so minutes haranguing him about Abu Qatada (and admittedly gave him a bit of a hard time about tax dodgers in government), but failed to challenge any of the Tory tropes that Cameron trotted out repeatedly throughout the interview, about being on the side of "hardworking people who do the right thing", making the country more "pro get up and go" and even "making sure our children aren't burdened with debt". Is it not Humphrys' job to pick apart such cliches and enquire what they actually mean? The interview descended into an infuriating kind of mateyness, in which the two men laughingly discussed Cameron's relaxed demeanour and his "date nights" with his wife. As if this wasn't nauseating enough, when the interview finished, the BBC's political editor, Nick Robinson, (known for his long-standing Tory associations) joined Humphrys for a nice cosy chat about the PM and the interview that had just finished. There was no mention, in either conversation, of NHS reform, of unemployment, or of the double-dip recession. It was all just one big jolly jape.

It is this lofty, old boys' club approach to the news – as if nothing really matters beyond the Today studios – that I find so irksome. There was a discussion on the programme a few weeks ago about the effect of the housing benefit cap on low-paid Londoners, between Grainia Long from the Chartered Institute of Housing and Mark Easton, the BBC's home editor. Both Long and Easton quoted statistics demonstrating rising rents and the massive financial pressure the cap places on people in the capital. But the discussion quickly became focused on the effect the cap would have on the flow of cheap labour into London. Easton speculated whether the government had really thought through the impact of this policy and wondered aloud just who was going to do these low-paid jobs in London if people couldn't afford to pay the rent.

It's a valid point of course, but Easton's observation did have a touch of the Today loftiness about it. Running through it seemed to be the assumption that listeners really only care about this issue because it means that there will be no poor people left to sweep the streets or serve coffees or empty the bins in their offices. The low-paid workers are not the participants in this discussion – they are merely objects, being talked about in so far as they are useful. Today does not belong to these people.

As Dave Boyle points out in his article for ourBeeb, the BBC is astonishingly unaccountable to its licence-payers and boy does it show. For me, nothing expresses the need to reclaim the BBC better than those smug exchanges between rich, powerful men on Today. We deserve better than this.