A Level Economics Essay1: Government Intervention and Income Inequality

 Explain why governments might intervene to reduce income inequality.

Governments might intervene to reduce income inequality due to various reasons. Income inequality refers to the unequal distribution of income among individuals or households within a society. When there is a significant gap between the incomes of the rich and the poor, it can lead to social and economic challenges.

Here's a simple explanation of why governments intervene to address income inequality:

1. Social Stability: High levels of income inequality can create social tensions and unrest. Large disparities in income can lead to feelings of injustice and discontent among the population, potentially resulting in social and political instability. Governments intervene to promote social harmony and maintain a peaceful society.

2. Poverty Alleviation: Income inequality often implies that certain individuals or groups have limited access to essential resources, such as food, healthcare, education, and housing. Governments intervene to reduce income inequality by implementing policies aimed at alleviating poverty and providing support to those with lower incomes. For example, they may introduce social welfare programs, such as income transfers, subsidies, or targeted assistance.

3. Economic Growth and Productivity: High levels of income inequality can hinder overall economic growth and productivity. When a significant portion of the population has limited purchasing power, it can dampen consumer demand, leading to reduced economic activity. Governments may intervene to reduce income inequality, as more equitable income distribution can stimulate economic growth by boosting consumer spending.

4. Equality of Opportunity: Governments often emphasize the importance of equal opportunities for all individuals, regardless of their socio-economic background. Income inequality can limit access to quality education, healthcare, and other resources, which can perpetuate social and economic disparities across generations. By addressing income inequality, governments strive to ensure equal opportunities for all citizens.

A relevant economic diagram that illustrates the impact of income inequality is the Lorenz curve and the Gini coefficient. The Lorenz curve is a graphical representation of income distribution, while the Gini coefficient is a summary measure of income inequality. The steeper the curve and the higher the Gini coefficient, the greater the income inequality within a society.

By analyzing the Lorenz curve and Gini coefficient, policymakers can assess the extent of income inequality and design appropriate interventions to reduce it. Government interventions might include progressive taxation, minimum wage policies, investment in education and skills training, and implementing regulations to promote fair competition in the labor market.

Fallacies of Capitalism 5: The Self Regulating Market Fallacy

How does the "self-regulating markets" fallacy fail to account for the need for government intervention to address market failures and ensure fair competition? 

The "self-regulating markets" fallacy is the belief that markets can regulate themselves without the need for government intervention. This idea suggests that if left to their own devices, markets will naturally correct any imbalances and ensure fair competition. However, this fallacy overlooks the need for government intervention to address market failures and promote a level playing field. Let's explore this concept with simple examples:

1. Market failures: Markets can experience various failures that prevent them from functioning optimally. For instance, externalities like pollution or the depletion of natural resources are costs or benefits that affect third parties not directly involved in transactions. Without government intervention, these external costs or benefits are not taken into account, leading to inefficient outcomes. For example, if factories are allowed to pollute freely, it may harm public health and damage the environment, but the market alone may not correct this issue. Government intervention, through regulations or taxes, can internalize these externalities and ensure a more efficient allocation of resources.

2. Monopolies and market power: Unregulated markets can result in the concentration of market power and the emergence of monopolies. Monopolies can abuse their power by setting high prices, reducing quality, and stifling competition. This restricts consumer choice and hampers innovation. Government intervention, such as antitrust laws and regulations, helps prevent and address monopolistic behavior, promoting fair competition and benefiting consumers. For example, if a single company dominates the internet search engine market, it may unfairly prioritize its own services over competitors' offerings, leading to biased search results. Government intervention can help maintain a competitive market where multiple players have an equal opportunity to compete.

3. Information asymmetry: In many transactions, there is an imbalance of information between buyers and sellers. This information asymmetry can lead to market failures. For instance, in the market for used cars, sellers may have more information about the condition of the vehicle than buyers. This can result in "lemons" being sold at higher prices, as buyers are unable to make informed decisions. Government intervention, such as consumer protection laws and regulations, can require sellers to disclose relevant information and ensure transparency, enabling fair transactions and reducing information asymmetry.

4. Ensuring fair competition: Self-regulating markets may not always guarantee fair competition. Unfair business practices, such as price fixing, collusion, or deceptive advertising, can harm consumers and undermine competition. Government intervention through competition policies and regulatory bodies ensures that businesses compete on a level playing field, preventing anti-competitive behavior and promoting fair markets. For example, if two competing companies agree to fix prices, it harms consumers who are deprived of the benefits of competitive pricing. Government intervention can enforce regulations that prohibit such anti-competitive practices.

In summary, the "self-regulating markets" fallacy fails to account for the need for government intervention to address market failures, prevent monopolies, mitigate information asymmetry, and ensure fair competition. Without appropriate regulations and interventions, markets can result in inefficient outcomes, reduced consumer welfare, and unequal distribution of resources. Government intervention plays a crucial role in maintaining a well-functioning and fair economic system.

Why do Governments Bailout Undeserving Banks?

 

Welcome to the era of the bossy state

The relationship between governments and businesses is always changing. After 1945, many countries sought to rebuild society using firms that were state-owned and -managed. By the 1980s, faced with sclerosis in the West, the state retreated to become an umpire overseeing the rules for private firms to compete in a global market—a lesson learned, in a fashion, by the communist bloc. Now a new and turbulent phase is under way, as citizens demand action on problems, from social justice to the climate. In response, governments are directing firms to make society safer and fairer, but without controlling their shares or their boards. Instead of being the owner or umpire, the state has become the backseat driver. This bossy business interventionism is well-intentioned. But, ultimately, it is a mistake.
 
Signs of this approach are everywhere, as our special report explains. President Joe Biden is pursuing an agenda of soft protectionism, industrial subsidies and righteous regulation, aimed at making the home of free markets safe for the middle classes. In China Xi Jinping’s “Common Prosperity” crackdown is designed to curb the excesses of its freewheeling boom, and create a business scene that is more self-sufficient, tame and obedient. The European Union is drifting away from free markets to embrace industrial policy and “strategic autonomy”. As the biggest economies pivot, so do medium-sized ones such as Britain, India and Mexico. Crucially, in most democracies, the lure of intervention is bipartisan. Few politicians fancy fighting an election on a platform of open borders and free markets.

That is because many citizens fear that markets and their umpires are not up to the job. The financial crisis and slow recovery amplified anger about inequality. Other concerns are more recent. The world’s ten biggest tech companies are over twice as big as they were five years ago and sometimes seem to behave as if they are above the law. The geopolitical backdrop is a far cry from the 1990s, when the expansion of trade and democracy promised to go hand in hand, and from the cold war when the West and the Soviet Union had few business links. Now the West and totalitarian China are rivals but economically intertwined. Gummed-up supply chains are causing inflation, reinforcing the perception that globalisation is overextended. And climate change is an ever more pressing threat.

Governments are redesigning global capitalism to deal with these fears. But few politicians or voters want to go back to full-scale nationalisation. Not even Mr Xi is keen to reconstruct an empire of iron and steel plants run by chain-smoking commissars, while Mr Biden, despite his nostalgia for the 1960s, need only walk through America’s clogged West Coast ports to recall that public ownership can be shambolic. At the same time the pandemic has seen governments experiment with new policies that were unimaginable in December 2019, from perhaps $5trn or more of handouts and guarantees for firms to indicative guidance on optimal spacing of customers in shopping aisles.

This opening of the interventionist mind is coalescing around policies that fall short of ownership. One set of measures claims to enhance security, broadly defined. The class of industries in which government direction is legitimate on security grounds has expanded beyond defence to include energy and technology. In these areas governments are acting as de facto central planners, with research and development (r&d) spending to foster indigenous innovation and subsidies to redirect capital spending. In semiconductors America has proposed a $52bn subsidy scheme, one reason why Intel’s investment is forecast to double compared with five years ago. China is seeking self-sufficiency in semiconductors and Europe in batteries.

The definition of what is seen as strategic may well expand further to include vaccines, medical ingredients and minerals, for example. In the name of security, most big countries have tightened rules that screen incoming foreign investment. America’s mesh of punitive sanctions and technology export controls encompasses thousands of foreign individuals and firms.

The other set of measures aims to enhance stakeholderism. Shareholders and consumers no longer have uncontested primacy in the hierarchy of groups that firms serve. Managers must weigh the welfare of other constituents more heavily, including staff, suppliers and even competitors. The most visible part of this is voluntary, in the form of “esg” investing codes that score firms for, say, protecting biodiversity, local people or their own workers. But these wider obligations may become harder for firms to avoid. In China Alibaba has pledged a $15bn “donation” to the Common Prosperity cause. In the West stakeholderism may be enforced through the bureaucracy. Central banks and public pension funds may shun the securities of firms judged to be anti-social. America’s antitrust agency, which once safeguarded consumers alone, is mulling other aims such as helping small firms.

The ambition to confront economic and social problems is admirable. And so far, outside China at least, bossier government has not hurt business confidence. America’s main stockmarket index is over 40% higher than it was before the pandemic, while capital spending by the world’s largest 500-odd listed firms is up by 11%. Yet, in the longer term, three dangers loom.
High stakes

The first is that the state and business, faced by conflicting aims, will fail to find the best trade-offs. A fossil-fuel firm obliged to preserve good labour relations and jobs may be reluctant to shrink, hurting the climate. An antitrust policy that helps hundreds of thousands of small suppliers will hurt tens of millions of consumers who will end up paying higher prices. Boycotting China for its human-rights abuses might deprive the West of cheap supplies of solar technologies. Businesses and regulators focused on a single sector are often ill-equipped to cope with these dilemmas, and lack the democratic legitimacy to do so.

Diminished efficiency and innovation is the second danger. Duplicating global supply chains is extraordinarily expensive: multinational firms have $41trn of cross-border investments. More pernicious in the long run is a weakening of competition. Firms that gorge on subsidies become flabby, whereas those that are protected from foreign competition are more likely to treat customers shabbily. If you want to rein in Facebook, the most credible challenger is TikTok, from China. An economy in which politicians and big business manage the flow of subsidies according to orthodox thinking is not one in which entrepreneurs flourish.

The last problem is cronyism, which ends up contaminating business and politics alike. Firms seek advantage by attempting to manipulate government: already in America the boundary is blurred, with more corporate meddling in the electoral process. Meanwhile politicians and officials end up favouring particular firms, having sunk money and their hopes into them. The urge to intervene to soften every shock is habit-forming. In the past six weeks Britain, Germany and India have spent $7bn propping up two energy firms and a telecoms operator whose problems have nothing to do with the pandemic.

This newspaper believes that the state should intervene to make markets work better, through, for example, carbon taxes to shift capital towards climate-friendly technologies; r&d to fund science that firms will not; and a benefits system that protects workers and the poor. But the new style of bossy government goes far beyond this. Its adherents hope for prosperity, fairness and security. They are more likely to end up with inefficiency, vested interests and insularity.

China's Economic "Model"

 

Free markets must be protected through the pandemic

The Financial Times Editorial Board 

Short of a communist revolution, it is hard to imagine how governments could have intervened in private markets — for labour, for credit, for the exchange of goods and services — as quickly and deeply as in the past two months of lockdowns. Overnight, millions of private sector employees have been getting their pay cheques from public budgets and central banks have flooded financial markets with electronic money. 

One may be forgiven for worrying that the pandemic has brought socialism on its coat-tails. Yet the paradox is that today’s emergency measures are necessary to protect the long-term health of free markets and a capitalist economy. Those who, like this news organisation, value those institutions must welcome this unprecedented intervention. 

Liberal democratic capitalism, with free and open markets and secure private property rights, remains the best institutional framework to meet the aspiration of freedom and prosperity for all. But liberal democratic capitalism is not self-sufficient, and needs to be protected and maintained to be resilient. 

Catastrophic emergencies — wars, pandemics and natural disasters — bring risks that only governments can protect against. A purist libertarianism that denies people this protection cannot survive its first crisis.  

Capitalism can also undermine itself over time, if it is not tended by smart regulatory frameworks. The global financial crisis — caused in part by opacity, self-dealing and perverse incentives — showed that markets need good rules of the road to remain free, open and efficient. The accelerating disruptions from climate change prove a similar point. 

Like all social systems, free markets depend on political legitimacy. One of the greatest long-term threats to capitalism functioning well is the perception, let alone the reality, that markets which are supposed to be free are actually rigged in favour of the powerful.  

A creeping suspicion this might be the case had started to erode its popular support, especially after the financial crisis. The rising wave of young self-confessed socialists in the US and UK, homelands of economic liberalism, was clear proof of that. Mismanaged economies that leave many people behind give fuel to left-wing populists, who see state intervention as a replacement for capitalism, not just a corrective. But they also empower right-wing populists, who offer business a Faustian bargain of collaboration. 

Today’s situation resembles that of the 1930s. Back then, centrist liberals from US president Franklin Delano Roosevelt to British economist John Maynard Keynes saw that liberal democratic capitalism, in order to survive, had to be shown to work for everyone. The victory of their ideas set the stage for the success of western capitalism in the decades after the second world war. 

Now, like then, capitalism does not need replacement even if it may need repair. Free markets work best when all have access to them, which requires the state to provide smart, transparent and proportionate ground rules and offer social insurance in the last resort. The latter is exactly what governments have done in the necessary battle against Covid-19. Their many support measures, costly as they are, constitute an investment into a safe return of freer markets and a self-sustaining capitalism when the crisis abates.  

The task for friends of liberal capitalism is to determine how free-market values can be buttressed in the future. That is a task made easier, not harder, if the state does its job well today.

Economic ideology ditched in the war for economic survival. Jeremy Corbyn was right after all!

The Covid-19 outbreak is forcing politicians and central bankers to set aside ideology and orthodoxy to prevent a global collapse writes Larry Elliot in The Guardian 

 

‘For the time being, politicians are adopting a bipartisan approach to coping with the crisis, and that’s entirely understandable.’ Donald Trump and Steven Mnuchin at a White House press conference on Tuesday. Photograph: Drew Angerer/Getty Images


It is as if the lights have been switched off. The global economy has been plunged into darkness as countries hunker down in response to the Covid-19 pandemic.

Most recessions develop gradually over time. When the last one started in 2008 it took the Bank of England six months to spot it. This time it is different. Then it was a financial virus, this time it is the real thing. Commentators often say the economy is hitting the wall or is falling off a cliff on the weakest of evidence. Today the cliches are horrifyingly true.

On some estimates the UK economy is on course to shrink by 15% in the second quarter of 2020. That is not a recession, it is a collapse surpassing anything in modern times, including the Great Depression.

When the banks were bailed out in 2008, it was because policymakers feared precisely what is now happening: a complete shutdown of the global economy. The rescue package worked, but only just. The early indications from China are that the impact of Covid-19 is markedly greater than that of the financial crisis, itself the most severe downturn of the postwar era.

This was a crisis that could and should have been predicted but, as in the years leading up to 2008, policymakers have been complacent and financial markets in denial about the risks.

Late in the day though it is, lessons need to be learned from 2008. The response not only has to be big and bold, it also has to be coordinated. Yet the international community went into this crisis with a row between two of the biggest oil producers – Russia and Saudi Arabia – driving down the cost of crude, and China and the US embroiled in a trade war. The pandemic has highlighted the need to work together for both public health and economic stability reasons.

Sadly, the world has rarely looked less prepared to act in concert and that matters, because this time it is not the banks that need bailing out, it is the people. Some are able to work from home: millions are not. Covid-19 is already a health crisis; it is set to be an economic crisis too.

A month ago, when financial markets belatedly woke up to the threat posed by Covid-19, the assumption was that there would be a painful but relatively short shock. But even if countries have emerged from quarantine by the summer – a very big if – the speed of economic recovery is going to depend on the collateral damage caused in the meantime: how many businesses go bust; whether laid-off workers have reached the limit of their credit cards to pay the regular monthly bills; the time it takes for confidence to return.

Politicians are starting to use the language, and deploying the policies, of wartime. The UK government wants manufacturers to switch production lines to making ventilators in the same way that factories switched from consumer goods to making planes and tanks.

They are also adopting the language and policies of the left: the need for social solidarity, the importance of intervening to help struggling firms, the urgency of bailouts for hard-hit industries. In a battle for economic survival the constraints of peacetime have to be ditched. When the chancellor, Rishi Sunak, said this was not a time for ideology or orthodoxy, what he really meant was that this was not time for free-market ideology or orthodoxy. Just as in 1940, the size of the budget deficit is seen as irrelevant. All sorts of hitherto taboo policies become possible.

Central banks have provided the first line of defence. They have cut interest rates and begun pumping money into the financial system through the process known as quantitative easing (QE). It is a sign of how the once unconventional quickly becomes part of the mainstream that QE is now seen as being a regular part of a central bank’s armoury.

This time too the once unthinkable will eventually become not just feasible but desirable. Milton Friedman said that governments could always prevent a slump if they were prepared to load helicopters with money and rain it down on the populace. Provided the public thought the cash didn’t have to be paid back, they would increase their spending and lift the economy out of recession.

Governments have always harboured grave doubts about helicopter money. It involves finance ministries ordering central banks to finance tax cuts, cash handouts or public spending increases through the printing of money and so brings into question central bank independence. An even stronger objection is that it leads to hyperinflation and ends – as in the Germany of 1923 – with people trundling wheelbarrows of worthless cash to the shops.

But for now what should be scaring policymakers is the risk that the world economy is heading for the Germany of 1932, when unemployment hit six million and a failure to abandon orthodox policies led to the rise of fascism. 

When Jeremy Corbyn was running to be leader of the Labour party in 2015 he flirted with the idea of People’s QE, by which he meant using the money created by the Bank of England to support a green transformation of the economy. It was seen as wildly irresponsible at the time and was quickly ditched.

This week, Jim O’Neill, a former Goldman Sachs chief economist and minister under David Cameron, said there should be cash handouts so people can feed themselves and pay their household bills during the crisis. And what did he call it? People’s QE. Hong Kong has decided to give all residents a cash handout; Donald Trump wants to do the same in the US.

For the time being, politicians are adopting a bipartisan approach to coping with the crisis, and that’s entirely understandable. But at the end of the second world war the public asked themselves a simple question: if a more interventionist approach was right in wartime, why not try it in peacetime? When the Covid-19 crisis is over, as it eventually will be, they might well ask the same question.

Pakistan's Trials

Najam Sethi in The Friday Times

Let’s face it. Whatever some may think of Nawaz Sharif’s omissions and however much others may hate him for his commissions, the fact remains that he has demonstrated the courage of his conviction that the unaccountable Miltablishment has no business interfering in the affairs of an elected government, much less in engineering its rise or fall.

Nawaz has held firm to this conviction since 1993 when he was dismissed from office, restored by the Supreme Court and then compelled to step aside. He met the same fate in 1999 and spent seven years in forced exile. Now he is behind the bars for the same “crime” (he insisted on putting General Pervez Musharraf on trial for treason and demanding an end to the politics of non-state actors in domestic and foreign policy). He could have spent another ten years in exile in the comfort of his luxury flats in London – much like Benazir Bhutto, General Musharraf or Altaf Hussain, closer to home, and Lenin, Khomeini and many others in historical time — and looked after his ailing wife. But he chose instead to return, along with his daughter, and go straight to jail “to honour the sanctity of the ballet box”.

This is an unprecedented political act with far reaching consequences. It has driven a spike in the Punjabi heartland of the Miltablishment and irrevocably degraded the ultimate source of its power and legitimacy. The provinces of Balochistan, Sindh and KP have witnessed outbursts of anti-”Punjabi Miltablishment” sub-nationalism from time to time but this is the first time in 70 years that a sizeable chunk of Punjab is simmering not against the “subversive” parties and leaders of other provinces but against its very own “patriotic” sons of the soil. This is that process whereby the social contract of overly centralized and undemocratic states is rent asunder. In that sense, it is the Miltablishment which is on trial.

Unfortunately, the judiciary, too, is on trial. In a democratic dispensation, it is expected to fulfil three core conditions of existence. First, to provide justice to lay citizens in everyday matters. Second, to uphold the supremacy of parliament. Third, to remain above the political fray as a supremely neutral arbiter between contending parties and institutions. On each count, tragically, it seems amiss. Hundreds of thousands of civil petitioners have been awaiting “insaf” for decades. The apex courts are making laws instead of simply interpreting them. And the mainstream parties and leaders are at the receiving end of the stick while “ladla” sons and militants are getting away with impunity. At some time or the other in the past or present, controversy has dogged one or more judges. But the institution of the judiciary is in the dock of the people today because it is perceived as aiding and abetting the erosion of justice, neutrality and vote-sanctity. In 2007, the “judicial movement for independence” erupted against an arbitrary act by a dictator against a judge. In that historical movement, the PMLN was fully behind the lawyers and judges. The irony in 2018, however, is that the same lawyers and judges are standing on the side of authoritarian forces against the PMLN.

The third “pillar” of the state – Media – is no less on trial. It is expected to “freely” inform the people so that they can make fair and unbiased choices. But it is doing exactly the opposite. A couple of media houses have succumbed to severe arm-twisting and opted to gag themselves; many have meekly submitted to censorship “advice”; most are silent for or blind for material gains. The proliferation of TV channels was meant to be a bulwark against authoritarian or unaccountable forces. But a failing economy and political uncertainty has pitted the channels against one other for the crumbs, which has given a leg up to those on the “right side” of the fence. At any rate, the corporatization of the media by big capitalist interests has served to protect the powerful at the expense of the weak.

Finally, the fourth pillar of the state — Parliament — is about to be stripped of its representative credentials. The castration of the two mainstream parties and their leaders is aimed at empowering one “ladla” leader and his party, a host of militant religious groups and a clutch of opportunist “independents” to storm the citadels of the legislature.

Is all hope lost? Are we collectively fated to be victims of a creeping authoritarian and unaccountable coup by the “pillars” of the state in tandem?

No. Sooner than later, the media and judiciary will begin to crack. Neither can survive by being “pro-government” for long. Every chief justice seeks to make his own mark on history as distinct from his predecessor and no judge can shrug away the weight of popular opinion for long. The electronic and print media, too, cannot allow social media to run away with independent digital news and analysis pegged to financial sources outside Pakistan.

Meanwhile, we, the people, must get ready to suffer.

How British politics rediscovered Tony Benn and Enoch Powell

John McTernan in the Financial Times

All political lives . . . end in failure”. Enoch Powell’s memorable line resonates 40 years on not only because it seems so true, but because it was underscored by his own career. A brilliant academic, a decorated soldier and a reforming health minister, Powell was set for the highest office until the racist “Rivers of Blood” speech exiled him to the Commons backbenches and eventually to Northern Ireland as an Ulster Unionist MP. 

Yet despite the well-known arc of triumph to tragedy, the time has surely come to revisit his dictum — for Powell is the politician who dominates our age as no other does. The arguments that he articulated in the 1960s and 1970s resonate across the world. On the one hand, the seemingly unstoppable rise of the populist right, from France’s Marine Le Pen to Hungary’s Viktor Orban. On the other, the abiding split on Europe within the Conservative party that no leader has ever healed. The age of Brexit is the age of Powell. 

Why? First, British politics is dominated by immigration, a discussion conducted in terms that could have been drawn straight from the book of Powell. His infamous 1968 speech is still deeply disturbing to read but its tropes are all too recognisable. 

There is the obsession with numbers. Powell asks that since “it be not wholly preventable, can it be limited?” — a view that has its echo in the current Tory government’s fixation on cutting net migration to tens of thousands. There is the argument, too, of the pressure on public services. And there is the acceptance that UK residents are the victims of immigration: “The . . . sense of alarm and resentment lies not with the immigrant population but with those among whom they have come and are still coming.” The eugenicist strand is all that is missing from contemporary politics. 

Arguments which were so repellent and unacceptable that Powell was sacked from the Tory shadow cabinet have become mainstream. Paradoxically, it was the migration of white Christians from eastern Europe after 2004 that proved the political tipping point in the UK, legitimising a discourse about immigration that claimed to be about culture rather than race, but had clear roots in Powell’s racism. All this despite the fact that the apocalyptic visions of Powell were refuted by the reality of modern Britain. When Prince Harry marries Meghan Markle next year, the Royal Family will, like so many families, have a mixed race member. That success is a measure of just how wrong Powell got his predictions. 

Yet, arguments are one of the great political legacies — and while Powell lost in fact, he has won in rhetoric. The Brexit Leave vote was not just due to his argument but also to the cowardice of leaders of both main political parties in not challenging outright untruths about migration. Powellite arguments were marshalled against one of the institutions he most strongly opposed, the EU. It was Enoch wot won it. 

Finally, Powell would appreciate the irony that his once mighty Conservative party is being propped up in power by the Ulster Unionist’s usurpers, the Democratic Unionist party. The narrow views of a political party from Northern Ireland hold the whip hand in the most important peace time negotiations ever undertaken by the UK. 

The observation that all political careers do not end in failure is not restricted to the right of British politics. It is not merely that Jeremy Corbyn spent decades in the wilderness before increasing votes for the Labour party in this year’s snap election, depriving Theresa May of both a majority and a mandate. Take a look at his policies and his politics. They are routinely assaulted as coming from the 1970s. Nationalisation, council house building and government-planned industrial strategy. 

But they come from a very specific source in the 1970s: Tony Benn, another grand politician whose career ended in apparent failure. A successful technocratic minister in Harold Wilson’s government in the 1960s, after Labour’s surprise defeat in the 1970 general election Benn turned sharply to the left. He shaped the Labour governments of the 1970s, with their increase in nationalisation and state investment in industry. He was the architect of Labour’s 1983 manifesto — the so-called “longest suicide note in history” — which led the party to a historic defeat. Benn’s state-sponsored companies collapsed, his bid for deputy leader of the Labour party failed, the Alternative Economic Strategy — the siege economy which was his great ideological project — abandoned. 

And finally, under Tony Blair the party became New Labour, accepting much of the Thatcherite settlement. It embraced the market, celebrated business and was an unprecedented success electorally. Benn and Bennism was over. 

Or so it was thought. Now Benn and Powell — whose careers ended so badly in the 1970s — dominate the ideas of British politics. The Tory party is riven by a divide over Europe deeper than it has been at any time since Powell and Benn led the campaign against common market membership in the 1975 referendum. With the migration target, and a majority sustained only by DUP MPs, Mrs May’s government cannot escape Powell’s long shadow. Meanwhile, in Mr Corbyn’s Labour party, state planning is back. With promises of tax rises targeted on corporations and the wealthy, this is the return of Old Labour with a vengeance. In British politics there has rarely been such successful second acts.

Why the Tory project is bust

David Hare in The Guardian


Just over 40 years ago, I wrote a play called Knuckle which tried out for two weeks at the Oxford Playhouse, before going on to open in the West End. It was my fourth full-length play, and one that suffered an extremely difficult birth. I was 26. If only I had known it, its reception was to have a decisive and lasting effect on my life. Knuckle was produced at a time of bitter and fundamental industrial disputes, so the hotel I stayed in along from the theatre was subject to blackouts. It was February and it was freezing cold, and there were evenings when the hotel was lit only by candles placed on the stairs and in my room. 

Edward Heath, a Conservative prime minister, was about to announce a markedly unwise election based around the question of “Who runs Britain?” He was tired, he said, of the trade unions having too much power and he wanted to settle the arguments between government and workers once and for all. At the end of February 1974, the electorate gave him a dusty answer – it is always said to be a mistake to go to the people with a question they expect you to answer for yourself – but Heath hung on for a few undignified days in Downing Street, trying to cobble together a coalition, before gracelessly accepting the inevitable. Harold Wilson, the victor, quickly settled with the miners, and the lights came back on again.

The past is comparatively safe, next to the present, because we know how at least one of them turns out. Or do we? One of my purposes last year in publishing a memoir, The Blue Touch Paper, was to reclaim the 1970s from the image that politicians of one fierce bent have successfully imposed with the help of largely compliant historians. The now-familiar version of our island story is that we all spent the 1970s in industrial chaos, with successive governments failing to confront the overbearing unions, until Margaret Thatcher arrived and set about deregulating markets, privatising public assets and generally encouraging citizens to work only for ourselves and our own self-interest. This, we have been continually told over three decades of sustained propaganda, was wholly to the good. The country we now live in with all its crazy excesses of inequality and flagrant immorality in the workplace – bosses in large firms averaging 160 times the salaries of their worst-off employees – is said to be far superior to how it was in the days when labour still held management in some kind of check.

History belongs to the victors. Conservatives in Britain now command not just the economy but the narrative as well, and three recent Labour governments have done little to challenge it. But it is not the case that everything was in chaos until 1979, since when everything has been bliss. The 1970s were disputatious times, times of profound and often bitter argument. Living through them was not easy, and a lot of us suffered wounds that took years to heal. But the political discussions we were having – in particular about how the wishes of working-class employees could be more creatively taken into account – were about important things, things that, disastrously, present-day politicians disdain to address. The shocking rancour of the 1970s now looks like a symptom of their vitality. Today’s quiescence seems more like a phenomenon of resignation than of contentment.

 

David Hare’s play Knuckle in 1974 featured a father and son who represented two contrasting strands in conservatism. Photograph: Comedy Theatre

Knuckle was a youthful pastiche of an American thriller, relocating the myth of the hard-boiled private eye incongruously into the home counties. Curly Delafield, a young arms dealer, returns to Guildford in order to try and find his sister Sarah who has disappeared. But in the process he finds himself freshly infuriated by the civilised hypocrisy of his father Patrick Delafield, a stockbroker of the old school. In the play father and son represent two contrasting strands in conservatism. Patrick, the father, is cultured, quiet and responsible. Curly, the son, is aggressive, buccaneering and loud. One of them sees the creation of wealth as a mature duty to be discharged for the benefit of the whole community, with the aim of perpetuating a way of life that has its own distinctive character and tradition. But the other character, based on various criminal or near-criminal racketeers who were beginning to play a more prominent role in British finance in the 1970s, sees such thinking as outdated. Curly’s own preference is to make as much money as he can in as many fields as he can and then to get out fast.

The first thing to notice about my play is that it was written in 1973. Margaret Thatcher was not elected until six years later. So whatever the impact of her arrival at the end of decade, it would be wrong to say that she brought anything very new to a Tory schism that had been latent for years. Surely, she showed power and conviction in advancing the cause of the Curly Delafield version of capitalism – no good Samaritan could operate, she once argued, unless the Samaritan were filthy rich in the first place. How else to explain the fact that the very split that she formally confronted in the different mindsets within her government – she named the two opposing sides “wets” and “drys” – was explored in my work at the Oxford Playhouse more than five years before? In 1951, resolving never to vote for them again, the novelist Evelyn Waugh had complained that the Conservative party in his lifetime “had never put the clock back a single second”. But the administrations that Thatcher first led and then inspired have never shown interest in conserving anything at all. The giveaway, for once, has not been in the name.

You may say that the party aims, like all such parties, to keep the well off well off. That, never forget, is any rightwing grouping’s conservative mission, which will offer a blindingly simple explanation for the larger part of its behaviour. And for obvious reasons, the money party in this particular culture has also aimed to perpetuate the narcotic influence of the monarchy. But with these two exceptions, it is hard to think of any area of public activity – education, justice, defence, health, culture – which any of the last seven Conservative governments have been interested in protecting, let alone conserving. On the contrary, they have preferred a state of near‑Maoist revolution, complaining that, in an extraordinary coincidence, almost every aspect of British life except retail and finance is incompetently organised. Who could have imagined it? And after all those dominant Conservative governments! In this belief, they have launched waves of attacks against teachers, doctors, nurses, policemen and women, soldiers, social workers, civil servants, local councillors, firefighters, broadcasters and transport workers – all of whom they openly scorn for the mortal sin of not being financiers or entrepreneurs.

For a party that is meant to like people, and to believe in enabling them, the modern Conservative party, once inclusive, has had, to say the least, a funny way of showing it. From every government department we regularly expect sallies against the very people who toil in the sector that the minister is supposed to lead. If there were at this moment a Ministry of Fruit Picking, you can be damn sure that the only way an ambitious Tory minister could advance his career would be by launching a blistering attack on the feckless indolence and inefficiency of fruit pickers.

It would be dishonest, however, to pretend any kind of nostalgia for the earlier, smugger form of conservatism. It is commonly said that leaders such as Harold Macmillan had either fought in the trenches or known men at first hand in their industrial constituencies and so gained a respect for working-class life, which the 21st-century leadership, with its upmarket aura of fine wine and evenings spent manspreading with sofa-sprawled box sets, conspicuously lacks. But this is to ignore the repellent layer of snobbery on which such sympathy relied. Even if, like me, you find the modern snobbery of a Notting Hill Cameron, who would rather be seen to be cool than to be caught out being compassionate, even more disgusting than the old-fashioned kind – because it is so much more cynical and calculated – nevertheless there was in the blimpish tone of the old conservatism an air of right-to-rule that saw the country as its plaything and government as its entitlement. Winston Churchill’s outrage at being booted out at the end of the second world war and the ruling class’s linking of the words “inexplicable” and “ingratitude” in the face of the hugely beneficial result speaks of an entire class culture that had at its heart a group resolution neither to understand nor to explain.

As the years have passed, the contradictions within conservatism have seemed to reach some kind of breaking point at which it is very hard to see how its central tenets can continue to make sense. Admittedly, since the severe recession brought about by the banks, Conservative administrations have found favour with the electorate while Labour has languished. At the election a year ago, Conservatives did somehow scrape together votes from almost 24% of the electorate. But such an outcome has done nothing to shake my basic conviction. In its essential thinking, the Tory project is bust.

The origins of conservatism’s modern incoherence lie with Thatcher. Whatever your view of her influence, she was different from her predecessors in her degree of intellectuality. She was unusually interested in ideas. Groomed by Chicago economists, she believed that Britain, robbed of the easy commercial advantages of its imperial reach, could thenceforth only prosper if it became competitive with China, with Japan, with America and with Germany. For this reason, in 1979, a crackpot theory called monetarism was briefly put into practice and allowed to wreak the havoc that destroyed one fifth of British industry. As soon as this futile theory had been painfully discredited, Conservative minds switched to obsessing on what they really wanted: the promotion and propagation of the so-called free market. If a previous form of patrician conservatism had been about respectability and social structure, this new form was about replacing all notions of public enterprise with a striving doctrine of individualism.

It is painful to point out how completely this grafting of foreign ideas onto the British economy has failed. The financial crash of 2008 dispelled once and for all the ingenious theory of the free market. The only thing, ideologues had argued, that could distort a market was the imposition of unnecessary rules and regulations by a third party, which had no vested interest in the outcome of the transaction and that was therefore a meddling force that robbed markets of their magnificent, near-mystical wisdom. These meddling forces were called governments. The flaw in the theory became apparent as soon as it was proved, once and for all, that irresponsible behaviour in a market did not simply affect the parties involved but could also, thanks to the knock-on effects of modern derivatives, bring whole national economies to their knees. The crappy practices of the banks did not punish only the guilty. Over and over, they punished the innocent far more cruelly. The myth of the free market had turned out to be exactly that: a myth, a Trotsykite fantasy, not real life.

Even disciples of Milton Friedman in Chicago were willing to admit the scale of the rout. They openly used the words “Back to the drawing board”. But in an astonishing act of corporate blackmail, the banks themselves then insisted that they be subsidised by the state. The very same taxpayers whom they had just defrauded had to dig in their pockets to pay for the bankers’ offences. Although state aid could no longer be tolerated as a good thing for regular citizens, who, it was said, were prone to becoming depraved, spoilt and junk-food-dependent when offered free money, subsidy could still be offered, when needed, on a dazzling scale, to benefit those who were already among our country’s most privileged and who were, by coincidence, the sole progenitors of its economic collapse. What a stroke of luck! Socialism, too good for the poor, turned out to be just the ticket for the rich.

It was the Labour government of Gordon Brown that consented to this first act of blackmail. It had little choice. There were dark threats from the banks of taking the whole country down with them. But it was the City-friendly Conservatives, learning nothing from history, who caved in without protest to a second, more outrageous wave of blackmail. The banks that had led us into the recession then argued that they were the only people who could lead us out. And the only way they could restore prosperity, they insisted, was by returning unpunished to exactly the same practices that had precipitated the crisis in the first place.

It has become impossible for any Conservative to argue for a free market when they do everything in their power to forbid free movement of labour. One is impossible without the other. A market, by definition, cannot be free if it operates behind artificial walls, or if it deliberately excludes traders who can offer their goods and services at a more competitive price. At the moment many such traders are volunteering to arrive and lend our market exactly the vigour that Conservatives always say it needs. But all too many of them, whether from Aleppo or from Tripoli, are dying with their children in open boats in the Mediterranean because the home secretary, Theresa May, is telling them that when she talks of the “free market”, she doesn’t actually mean it. She means “protected market”. She means “our market”. She means “market for people like us”. How can anyone with a trace of consistency or personal honour stand up and declare that international competitiveness is the sole criterion of national success, while at the same time excluding from that competition anyone who can compete better than you? Economic migrants, showing exactly the qualities of risk-taking, courage, independence, and family responsibility that Conservatives affect to admire are invited by May to plunge to their deaths in the sea rather than to trade.

The outcome of the Conservatives’ 30-year love affair with the idea that Britain is at heart no different from China, †he US or Germany, has inevitably been a sense of threat to the idea of national identity. Once Thatcher surrendered a native British conservatism to an American one, she knew full well that the side-effect would be to destroy ties and communities that held society together. By her own policies, she was reduced to petulant gestures. At Downing Street receptions she replaced the despised Perrier with good British Malvern water, but nobody was fooled. If international capital did indeed rule the world, then nothing made Britain special. On the contrary, it was on its way to being little more than a brand, defined, presumably, by the union jack, Cilla Black, Shakespeare, Jimmy Savile, Merrydown cider, and the Bonzo Dog Doo-Dah Band. “We are a grandmother,” offered to cameras in the street on the birth of her first grandchild, represented a grammatical formulation halfway between patriotism and lunacy, intended to suggest the unique syntactical glamour of the English language. With the flick of a single pronoun, anyone could make themselves royalty. But on Thatcher’s watch, Britishness was now just bunting, a Falklands mug, a pretence.

 

A protest outside the Home Office against the Conservative government’s immigration policies, in 2015. Photograph: Guy Corbishley/Alamy

Since then, successive Conservative governments have agonised long-windedly about the problem of how to make citizens loyal to a nation at the very moment when they are declaring the primacy of the economic system over the local culture. Their words die as soon as spoken, because everyone can see that if a government is unwilling to lift a finger to save those few organisations – like, for example, the steel industry – that do indeed forge communities, then all their rhetoric is so much guff. The home secretary, hitting syllables with a hammer as to a backward class of four year-olds, gloweringly asks everyone to share what she calls “British values”. Yet her own values, which she shares with the gilded David Cameron and George Osborne, include support for drone strikes and targeted assassination, the right to intercept private communications, the intention to curtail freedom of speech, the imposition of impossible limits on industrial action, a fierce contempt for any of the sick or unfortunate who have relied on the support of the state in order to stay alive, and a policy of selling lethal weapons to totalitarian allies who use them to bomb schools. The home secretary contemplates with equanimity the figure of the 2,380 disabled people who died in the little more than two years following Ian Duncan Smith’s legislation that recategorised them as “fit to work”. I don’t. By these standards, am I even British? Do I “share values” with Theresa May? Do I hell.

There will certainly be those who think me wistful in imagining that just because a headbangers’ conservatism no longer makes any intellectual sense that it is therefore finished. You will point, correctly, to the resilience of the Tory party and its ability to adapt at all times to changing circumstance. In the autumn of 2015, Jeremy Hunt, the health secretary, ready to warn us of what he insisted with relish were the harsh realities of global capitalism – Oh God, how Tories love saying “harsh realities” – insisted that Britain could only compete with China if it lowered state benefits and slashed tax credits for working people. It was, he said, essential for our whole future as a nation. But when George Osborne, the chancellor of the exchequer, then reversed his announced plan to slash those tax credits because such slashing would have represented a threat to his own advancement to Downing Street, that same Jeremy Hunt fell, on the instant, conspicuously silent.

It is, you may think, exactly such calculating practicality that is keeping the Tory ship floating long after its engine has died. You will add that the problems of how individual cultures are to endure the assaults of global corporations are, after all, not confined to Britain. Even if the government were of a radically different colour, you may say, it too would be facing the almost impossible challenge of asking how any country is to maintain meaningful democracy in the face of a predatory capitalism run by a kleptocratic class, which feels entitled to skim money at will. Would any faction honestly do better than the Tories at dealing with businesses run for no other purpose than the personal enrichment of their executives?

David Cameron arrived in office aware that a conservatism that was purely economic could not possibly meet the needs of the country, and therefore chose to advance an unlikely system of volunteerism, which he called the “big society”. It was, self-evidently, a palliative, nothing more, the lazy shrug of a faltering conscience, and one that predictably lasted no longer than the life cycle of a mosquito. Alert to a problem, Cameron lacked the fortitude to pursue its solution. Instead, Conservative ministers have fallen back on the more familiar, far more routine strategy of sour rhetoric, petulantly blaming the people for their failure to live up to the promise of their leaders’ policies. Do you have to be my age to remember a time when politicians aimed to lead, rather than to lecture? Is anyone old enough to recall a government whose ostensible mission was to serve us, not to improve us? When did magnanimity cease to be one of those famous British virtues we are ordered to share?

 

Prime Minister David Cameron makes a speech on the ‘big society’ in 2011. Photograph: WPA Pool/Getty Images

Commentators excoriate the politics of envy, but the politics of spite gets a free pass. Jeremy Hunt hates doctors. Theresa May despises the police. John Whittingdale resents public broadcasters. Chris Grayling loathed prison officers and Michael Gove famously had it in for teachers. Nowadays that’s what is called politics and that’s all politicians, Conservative-style, do. They voice grievances against a stubborn electorate that is never as far-seeing or radical as they are. Like Blair before him, Cameron has reduced the act of government to a sort of murmuring grudge, a resentment, in which politicians continually tell the surly people that we lack the necessary virtues for survival in the modern world. They know perfectly well that we hate them, and so their only response is to hate us back. Politics has been reduced to a sort of institutionalised nagging, in which a rack of pampered professionals, cut from the eye of the ruling class, tells everyone else that they don’t “get it”, and that they must “measure up” and “change their ways”. Having discharged their analysis, the preachers then invariably scoot off through wide-open doors to 40th-floor boardrooms to make themselves frictionless fortunes as greasers and lobbyists – or, as they prefer to say, “consultants”.

Of all the privatisations of the last 30 years, none has been more catastrophic than the privatisation of virtue. A doctor recently remarked that she was happy to put up with long hours and underpayment because she knew she was working in the service of an ideal. But, she said, if the NHS were so reorganised that she were then asked to suffer the same degree of overwork to provide profits for some rip-off private health company, she would walk away and refuse. In describing her motivation in this simple way, she put her finger on everything that has gone wrong in Britain under the tyranny of abstract ideas. Why do we work? Who are we working for? As Groucho Marx once asked: “If work’s so great, why don’t the rich do it?” People are ready, happy and willing to do things for our common benefit that they are reluctant to do if it is all in the interests of companies such as British Telecom, Virgin Railways, EDF Energy, Talk Talk, HSBC, Kraft Foods and Barclays Bank, outfits that still have little or no interest in balancing out their prosperity in a fair manner between their employees and their shareholders.

The reason we have been governed so badly is because government has been in the hands of those who least believe in it. Politicians have become little more than go-betweens, their principal function to hand over taxpayers’ assets, always in car boot sales and always at way less than market value. No longer having faith in their own competence, politicians have blithely surrendered the state’s most basic duties. Even the care and detention of prisoners, and thereby the protection of citizens from danger, has been given to contractors, as though the state no longer trusted itself to open a gate, build a wall, or serve a three-course meal. With foreign policy delegated to Washington, and consciences delegated by private contract to callous logistics companies, no wonder the profession of politics in Britain is having a nervous breakdown of its own making.

In the years after the second world war, under successive administrations of either party, we profited from purposeful initiatives, building the welfare state, the housing stock and the NHS. We voted for leaders who shared a common-sense belief that government was necessary to do good. They entered politics partly because they believed in its essential usefulness. How strange it is, then, this new breed of self-hating politicians who want to make a healthy living in politics, while at the same time insisting that the only function of politics is to get out of the way of private enterprise. Ever since Ronald Reagan announced that he would campaign on a platform of smaller government, it has been an article of faith on the right to insist that the state must play an ever smaller part in the country’s affairs. But the paradox of a Thatcher or a Reagan is that they fulminate all the time against the state while living lavishly off it. Our current administration advises everyone else to strip back and face the new demands of austerity. Meanwhile, it employs 68 unelected special advisers to fix Tory policy at taxpayers’ expense, while busily ordering a private jet for the prime minister’s travel.

How did we get here? And how do we move on? Prince Charles, questioning a monk in Kyoto about the road to enlightenment, was asked in reply if he could ever forget that he was a prince. “Of course not,” Charles replied, “One’s always aware of it. One’s always aware one’s a prince.” In that case, said the monk, he would never know the road to enlightenment. A similar need to forget our pretensions must newly govern our politics. We do not live in a free market. No such thing as a free market exists. Nor can it. The world is far too complex, far too interconnected. All markets are rigged. The only question that need concern us is: in whose interest? In the light of this question, obsessive Tory spasms about Europe are revealed as a doomed attempt to re-rig the market even further in their own favour, so that the same exclusion orders that prevent Syrians and Libyans from threatening our carefully protected wealth should in future keep out over-eager Hungarians, Poles, Bulgarians and Romanians. Far from wishing to free the country to compete in the world, anti-European Union sentiment in Britain is, in Tory hearts, about protecting Britain yet more effectively.

The first task British politics has to address is correcting the terrible harm we have done ourselves by assuming that nothing can be achieved through collective enterprise. It is as much a failure of national imagination as it is of national will. When I woke up on the morning after Knuckle opened in London, on 5 March 1974, then the stinging impact of the play’s rejection by audiences and critics alike forced me finally to admit to myself that I was not just a theatre director who happened to write, but that I was, indeed, going to spend the rest of my life as a professional playwright.

In the 1980s and 1990s, my attention turned to the people on the front line who helped bind the wounds of communities shattered by Thatcherism. In plays such as Skylight and Racing Demon and Murmuring Judges, I was able to portray teachers and vicars and police and prison officers who, newly politicised, saw their jobs as trying to tackle the everyday problems caused by a reckless ideology. I loved writing about such hands-on practical people because I admired them. They became my heroes and heroines. But even as I tried to discredit the publicity that saw Thatcherism as liberating, I was still reluctant to propose a counter-myth, which pictured the government of 1945 as a permanent model of perfection. Requested over and again to write films and plays about the National Health Service, I always refused because I was reluctant to make too facile a comparison. How could I write on the subject without seeming to imply that once we had ideals, and that now we didn’t?

 

Michael Gambon and Lia Williams in David Hare’s play Skylight, in 1996. Photograph: Joan Marcus/AP/AP

Our current politics are governed by two competing nostalgias, both of them pieties. Conservatives seek to locate all good in Thatcherism and the 1980s, and in the unworkable nonsense of the free market, while Labour seeks to locate it in 1945 and an industrial society, which, for better or worse, no longer exists. And yet issues of justice remain, and always will. Conservativism, as presently formulated, is unworkable in the UK because it continues to demand that citizens from so many different backgrounds and cultures identify with a society organised in ways that are outrageously unfair. The bullying rhetorical project of seeking to blame diversity for the crimes of inequity is doomed to fail. You cannot pamper the rich, punish the poor, cut benefits and then say: “Now feel British!”

There is a bleak fatalism at the heart of conservatism, which has been codified into the lie that the market can only do what the market does, and that we must therefore watch powerless. We have seen the untruth of this in the successful interventions governments have recently made on behalf of the rich. Now we long for many more such interventions on behalf of everyone else. Often, in the past 40 years, I refused to contemplate writing plays that might imply that public idealism was dead. From observing the daily lives of those in public service, I know this not to be true. But we lack two things: new ways of channelling such idealism into practical instruments of policy, and a political class that is not disabled by its philosophy from the job of realising them. If we talk seriously about British values, then the noblest and most common of them all used to be the conviction that, with will and enlightenment, historical change could be managed. We did not have to be its victims. Its cruelties could be mitigated. Why, then, is the current attitude that we must surrender to it? I had asked this question at the Oxford Playhouse in 1974 as I walked back down a darkened Beaumont Street to a hotel of draped velvet curtains, power outages and guttering candles. I ask it again today.

Intervention, evasion, destabilisation by Security Council members

Brahma Chellaney in The Hindu

If Libya, Syria and Iraq are coming undone and Ukraine has been gravely destabilised, it is the result of interventions by big powers that claim to be international law enforcers when, in reality, they are lawbreakers

Big powers over the years have targeted specific regimes by arming rebel groups with lethal weapons, thereby destabilising some states and contributing to the rise of dangerous extremists and terrorists. The destabilisation of Ukraine, Syria, Iraq and Libya, among other states, is a result of such continuing geopolitical games.

It is the local people who get killed, maimed and uprooted by the interventions of major powers and their regional proxies. Yet those who play such games assume a moral posture to rationalise their interventionist policies and evade responsibility for the consequences of their actions. Indeed, they paint their interference in the affairs of other sovereign states as aimed at fighting the “bad” guys.

Cold War echo

Take the blame game over the downing of Flight MH 17, which was shot down by a surface-to-air missile (SAM), allegedly fired by eastern Ukraine’s Russian-speaking separatists, a number of whom have clearly been trained and armed by Russia. Russia’s aid to the separatists and Washington’s security assistance to the government in Kiev, including providing vital intelligence and sending American military advisers to Ukraine, is redolent of the pattern that prevailed during the Cold War, when the two opposing blocs waged proxy battles in countries elsewhere.

Today, with the Ukrainian military shelling rebel-held cities and Russia massing heavy weapons and troops along the frontier, the crisis threatens to escalate to a direct U.S.-Russia confrontation, especially if Moscow directly intervenes in eastern Ukraine in response to the worsening humanitarian crisis there. The United Nations says the fighting in eastern Ukraine has uprooted more than 230,000 residents. Over 27,000 of them have taken sanctuary in Russia.

After the MH 17 crash, U.S. President Barack Obama was quick to hold Russia and its President, Vladimir Putin, guilty in the global court of opinion over the downing and to spotlight Russian aid to the separatists. Through sanctions and diplomacy, Mr. Obama has steadily ratcheted up pressure on Mr. Putin to stop assisting the rebels. Yet, Mr. Obama has had no compunction in gravely destabilising Syria through continuing covert aid to “moderate” militants there. The aid is being channelled through the Central Intelligence Agency (CIA) and the jihad-bankrolling oil sheikhdoms.

Regime-change strategy

Mr. Obama set out on the mission of regime change in Syria by seizing the opportunity that opened up in 2011, when popular protests broke out in some cities against President Bashar al-Assad’s autocratic rule. The detention and torture of a group of schoolchildren, who had been caught scribbling anti-government graffiti in the city of Deraa, led to protests and demands for political reforms and a series of events that rapidly triggered an armed insurrection with external assistance.

From bases in Turkey and Jordan, the rebels — with the clandestine assistance of the U.S., Britain and France — established a Free Syrian Army, launching attacks on government forces. Washington and its allies simultaneously mounted an intense information war demonising Mr. Assad and encouraging officers and soldiers to desert the Syrian military and join the Free Syrian Army.

Read: On Syria, Russia awaits chance to say ‘I told you so’

It is clear three years later that their regime-change strategy has backfired: Not only has it failed to oust Mr. Assad, it has turned Syria into a failed state and led to the rise of the Islamic State of Iraq and the Levant — a brutal, medieval organisation seeking to establish a caliphate across the Middle East and beyond. With radical jihadists now dominating the scene, the Free Syrian Army has become a marginal force, despite the CIA continuing to train and arm its members in Jordan.

Had Mr. Obama, British Prime Minister David Cameron and French President François Hollande not embarked on this strategy — which helped instil the spirit of jihad against the Assad regime and opened the gates to petrodollar-financed weapons to Syrian jihadists — would murderous Islamists be in control of much of northern Syria today? It was this control that served as the staging ground for the rapid advance of the Islamic State of Iraq and the Levant into Iraq. This group now is in a position to potentially use water as a weapon through its control of the upstream areas along the Euphrates and Tigris rivers in Syria and Iraq, including important dams.

By inadvertently turning Syria into another Afghanistan — and a threat to regional and international security — the interveners failed to heed the lessons from the CIA’s funnelling of arms to the Afghan mujahideen (or self-proclaimed “holy warriors” of Islam) in the 1980s. The funnelling of arms — partly financed by Saudi Arabia and some other oil sheikhdoms — was a multibillion-dollar operation against the Soviet forces in Afghanistan that gave rise to al-Qaeda and monsters like Osama bin Laden and Mullah Mohammad Omar, chief of the Taliban who remains holed up in Pakistan. It ranked as the largest covert operation in the CIA’s history.

 Now, consider a different case where a regime-change strategy spearheaded by the U.S., Britain and France succeeded — Libya. The ouster of Col. Muammar Qadhafi’s government through U.S.-led aerial bombardment in 2011, however, ended up fomenting endless conflict, bloodletting and chaos in Libya.

The virtual crumbling of the Libyan state, more ominously, has had major international implications — from the cross-border leakage of shoulder-fired SAMs from the Qadhafi-built arsenal, including to Syrian jihadists, to the flow of other Libyan weapons to al-Qaeda-linked groups in the arid lands near the Sahara desert known as the Sahel region. Nigeria’s Boko Haram extremists have also tapped the Libyan arms bazaar.

The weapons that Qatar and, on a smaller scale, the United Arab Emirates shipped to Libyan rebels with U.S. approval, including machine guns, automatic rifles and ammunition, have not only destabilised Libya but also undermined security in Mali, Niger and Chad. These weapons had been handed out like candy to foment the uprising against Qadhafi.

There cannot be better proof of how the toppling of Qadhafi has boomeranged than the fact that the U.S., whose ambassador was killed in a 2012 militant attack in Benghazi, the supposed capital of the Libyan “revolution,” has now shut its embassy in Tripoli, citing increasing lawlessness. The predawn evacuation of its entire embassy staff to Tunisia, with U.S. warplanes providing air cover, represented a public admission of defeat.

The plain truth is that it is easier for outside forces to topple or undermine a regime than to build stability and security in the targeted country. With neighbourhoods becoming battlefields, Iraq, Syria and Libya are coming undone. Another disintegrating state is Afghanistan, where Mr. Obama is seeking to end the longest war in American history.

Marginalisation of U.N.

Such is the United Nations’ marginalisation in international relations that it is becoming irrelevant to the raging conflicts. To make matters worse, the U.N. Security Council’s five permanent members, although tasked by the U.N. Charter to preserve international peace and security, have helped spark or fuel regional conflicts and aided the rise of insurgent groups through their interventionist and arms-transfer policies. These five powers — all nuclear-armed — account for more than 80 per cent of the world’s official exports of conventional weapons and most of the unofficial transfers. Chinese arms, for example, have proliferated to a number of guerrilla groups active in Africa and Asia, including insurgents in India’s northeast.

The only mechanism to enforce international law is the Security Council. Yet, its permanent members have repeatedly demonstrated that great powers use, not respect, international law. They have a long history of ignoring international rules when these conflict with their plans. In other words, the international law enforcers are the leading lawbreakers.

Mr. Obama, in toppling Qadhafi through the use of air power, and Mr. Putin, in annexing Crimea, paradoxically cited the same moral principle that has no force in international law — “responsibility to protect.” Indeed, the transition from the 20th to the 21st centuries heralded the open flouting of international law, as represented by the bombing of Serbia, the separation of Kosovo from Serbia, and the invasions of Afghanistan and Iraq. Against this background, it is scarcely a surprise that, despite the continuing rhetoric of a rules-based international order, the world is witnessing the triumph of brute force in the 21st century.

If the Security Council is to act more responsibly, its permanent members must look honestly at what they are doing to undermine international peace and security. This can happen only if the Council’s permanent membership is enlarged and the veto power abolished to make decision-making in that body truly democratic.