"Don't marry the one you love, but marry the one who loves you": Irish Wisdom

 

"Over 5800 Foreign Funded NGO's fail to renew their licence on 31 Dec 2021"

 

Fraudsters of the world, come to London. And bring your dirty money

Kleptocrats love this country, knowing full well they’ll be free from proper scrutiny writes Nick Cohen in The Guardian

‘No one can say how many in the UK are living off immoral earnings.’ Illustration: Dominic McKenzie/The Observer 



There is no better representation of the decline of the English upper class into the global rich’s servant class than Ben Elliot. On the one hand, the co-chairman of the Tory party is now a rent collector, hauling in money for the Johnson administration from the Russian rich and native hedge fund bosses.

On the other, he is an actual servant: an upmarket flunkey, to be sure, praised by society magazines for his “puppyish schoolboy charm”, but a flunkey nonetheless. Elliot is a founder of the Quintessentially “concierge” service that gives the super-rich anything they want: luncheon on an iceberg; the Sydney Harbour bridge closed for a wedding proposal. There’s nothing Elliot won’t do for paying customers up to and including arranging a meeting with our future sovereign. Camilla, Duchess of Cornwall, is Elliot’s aunt and it appears that no considerations of good form or good manners have prevented him monetising the connection. Not that the prince appears to mind. A Quintessentially advert interrupts a montage of shots of yachts and celebrities to quote his royal highness as saying he is “particularly grateful” to Quintessentially for organising a party he attended. Members of Elliot’s Quintessentially club donate to the Conservatives. The Conservatives gave Elliot £1.4m of taxpayers’ money in 2016 to “attract the right high-value individual investors to the UK through bespoke programmes”. If on arrival, those high-value individuals went on to show how valuable they were by hiring Quintessentially and donating to the Tories, the circle would be complete.

Upstairs has moved downstairs in the remains of the Tory day and a large segment of British capitalism is now employed as the best servants money can buy. The law, PR, City, estate agency and banking know that easy riches come from serving the large part of the world where it pays to forget Balzac’s warning that the secret of a great fortune no one can explain is invariably an undetected crime. For want of an agreed name I propose “Corruptistan” to cover Russia and the ex-Soviet states, the kleptocracies of Africa and the Middle East and probably soon China as the communist elite learns how to expatriate its wealth. 

Given the secrecy of the financial system, the defunding of the police and regulatory authorities and the English libel law, no one can say how many in the UK are living off immoral earnings. But two statistics and one quotation give us a measure of the UK’s dependency culture. Graeme Biggar, of the National Economic Crime Centre, said a “disturbing proportion” of criminal money from the old Soviet Union is “laundered through UK corporate structures”. Companies House, meanwhile, has become a front organisation for organised crime. So welcoming is it to criminals that 335,000 of its listed companies do not reveal the name of their beneficial owners. And 4,000 of the names it appears to reveal turn out on close inspection to belong to children aged two or under.

Last month, Professor Sadiq Isah Radda, a Nigerian anti-corruption official, encapsulated the consequences of the UK’s tolerance of theft. An opponent of corruption in Nigeria, home to countless online scams? A joke figure, you might think. But Radda spoke with a seriousness no government minister can muster when he said the UK was “the most notorious safe haven for looted funds in the world today”. The corruption we facilitate destablised Nigeria and, he might have added, many other countries besides.

Last week, a handful of MPs asked why the Conservatives were so peculiarly soft on this particular crime. In 2017, they promised a law that would compel the foreign owners of UK property to reveal their identities. (The willingness to allow private and state criminals to launder their wealth anonymously through the prime London property market was Radda’s main charge against Boris Johnson.) Nothing has been heard of this bold “anti-corruption strategy” since.

Likewise, the government has said it wants to stop Companies House being a crime scene where anyone can set up a firm without proof of identity or the most cursory checks. Even the Conservative party appeared to agree that it should not be harder to apply for a passport than to set up a shell company. But once again nothing happened.As for the recommendations in the Russia report on money laundering, they vanished as soon as they were made.

The SNP’s Alison Thewliss asked: “I wonder who benefits from this delay. Is it the oligarchs and those to whom they donate?” Pat McFadden, Labour’s shadow chief secretary to the Treasury, asked Conservative MPs why they thought “their party has been such an attractive destination” for £2m in gifts from Russian donors.” Change must come soon or not at all. Britain has benefited so greatly from the wealth of the corrupt we may soon be at the stage where we cannot afford to clean ourselves up. So many people are making so much money, what was once outrageous has become normal. This to my mind is why the security services and the judges just shrug when oligarchs with links to hostile foreign powers use the intimidatory costs of England’s unreformed legal system to menace critics. No one likes hard questions about a nation’s guilty secrets, not even the men and women who are professionally obliged to ask them. Labour certainly believes that tolerance of fraud is now part of the government’s economic strategy and the Treasury wants to loosen what few protections exist to compensate the financial services industry for the Brexit debacle.

Cynical readers may not care as long as the UK can wallow in streams of hot money. They should recall how many times con artists have tried to fleece them. Online fraud is the crime you are most likely to suffer from, yet nowhere in the government’s online safety bill is there a word about fighting the fraudsters who flourish on social media platforms. Once the Tories started turning a blind eye, they found it impossible to stop.

You cannot profit from economic crimes committed abroad while enjoying the rule of law at home. The presence of the global plutocracy’s valets at the top of government and society shows the UK no longer even bothers to pretend that it can.

What's Wrong With the Nobel is Wrong With Economics!

 

No surprise Leeds lost to Manchester United, just look at the wage bills

Although teams can often defy financial logic for a time, to move up a tier is incredibly difficult

Manchester United’s Fred celebrates celebrates after completing Manchester United’s 5-1 victory over Leeds. Photograph: Jon Super/AP
 

Jonathan Wilson in The Guardian

The easy thing is to blame the manager. It has become football’s default response to any crisis. A team hits a poor run or loses a big game: get rid of the manager. As Alex Ferguson said as many as 14 years ago, we live in “a mocking culture” and reality television has fostered the idea people should be voted off with great regularity (that he was trying to defend Steve McClaren’s reign as England manager should not undermine the wider point).

Managers are expendable. Rejigging squads takes time and money and huge amounts of effort in terms of research and recruitment, whereas anybody can look at who is doing well in Portugal or Greece or the Championship and spy a potential messiah. Then there are the structural factors, the underlying economic issues it is often preferable to ignore because to acknowledge them is to accept how little agency the people we shout about every week really have in football. 

That point reared its head after Manchester United’s 5-1 victory over Leeds on Saturday. There was plenty to discuss: are Leeds overreliant on Kalvin Phillips, who was absent? Why does Marcelo Bielsa’s version of pressing so often lead to heavy defeats? Can Mason Greenwood’s movement allow Ole Gunnar Solskjær to field Paul Pogba and Bruno Fernandes without sacrificing a holding midfielder and, if it does, what does that mean for Marcus Rashford?

Yet there was a weird strand of coverage that insisted Solskjær had somehow outwitted Bielsa, even in some quarters that Bielsa needed to be replaced if Leeds are to kick on. (They finished ninth last season with 59 points, the highest points total by a promoted club for two decades). A Bielsa meltdown is possible; they do happen and he has never managed a fourth season at a club. There should be some concern that, like last season, Leeds lost by four goals at Old Trafford, insufficient lessons were learned, even if Bielsa said this was a better performance. But fundamentally, Manchester United’s wage bill is five times that of Leeds. 

Everton, who finished a place below Leeds last season, had a wage bill three times bigger. Of last season’s Premier League, only West Brom and Sheffield United had wage bills lower than that of Leeds. To have finished ninth is an extraordinary achievement and nobody should think to slip back three or four places this season would be a failure. Modern football is starkly stratified and although teams can often defy financial logic for a time, to move up a tier is incredibly difficult.

There is still a tendency to talk of a Big Six in English football and while it is true six clubs last season had a weekly wage bill in excess of £2.5m, it is also true that within that grouping there are three with clear advantages: Manchester City (who had kept their wage bill relatively low, although if they do add Harry Kane to Jack Grealish that would clearly change) and Chelsea because their funding is not reliant on footballing success, and Manchester United because of the legacy that has allowed them to attach their name to a preposterous range of products across the globe.
Mikel Arteta is struggling to revive Arsenal. Photograph: Tom Jenkins/The Guardian
Liverpool can perhaps challenge for the title this season, but their wage spending is 74% of that of United. That they were as good as they were in the two seasons before last was remarkable, but last season showed how vulnerable a team like Liverpool can be to a couple of injuries. Similarly, Leicester’s two fifth-place finishes with the eighth-highest wage bill are a striking achievement, their decline towards the end of the past two seasons less the result of them bottling it or any sort of psychological failure than of the limitations of their squad being exposed.

Which brings us to the other two members of the Big Six: Arsenal and Tottenham. Spurs’ last game at White Hart Lane, in 2017, brought a 2-1 win over Manchester United that guaranteed they finished second. Since when Spurs have bought Davinson Sánchez, Lucas Moura, Serge Aurier, Fernando Llorente, Juan Foyth, Tanguy Ndombele, Steven Bergwijn, Ryan Sessegnon, Giovani Lo Celso, Cristian Romero and Bryan Gil, while United have bought, among others, Alexis Sánchez, Victor Lindelöf, Nemanja Matic, Romelu Lukaku, Fred, Daniel James, Aaron Wan-Bissaka, Bruno Fernandes, Harry Maguire, Donny van de Beek, Raphaël Varane and Jadon Sancho. Money may not be everything in football, but it does help.

The irony of the situation is that it was investment in the infrastructure that should allow Spurs to generate additional revenues and better develop their own talent (much cheaper than buying it) that led to the lack of investment in players largely responsible for the staleness resulting in Mauricio Pochettino’s departure. That Daniel Levy compounded the problem by appointing José Mourinho – acting like a big club as though to jolt them to the next level – should not obscure the fact that until that point he had pursued a ruthless and successful economic logic.

Arsenal had gone through a similar process the previous decade, investing heavily in a new stadium at the expense of the squad, only to discover that by the time it was ready the financial environment had changed and the petro-fuelled era had begun. It was easy after the timid performance against Brentford on Friday to blame Mikel Arteta and ask why he gets such an easy ride. For all that Arsenal have finished the past two seasons relatively well, that criticism will only increase if there are not signs the tanker is being turned round. But the gulf to the top of the table is vast and a desperation to bridge that has contributed to a bizarre transfer policy.

That does not mean managers are beyond reproach and limp displays like Arsenal’s deserve criticism. But equally we should probably remember that where a side finishes in the league has far more to do with economic strata than any of the individuals involved.

On Ambition: Necessary but Corrosive?

Lucy Kellaway in The FT

Not long ago I had lunch with a friend who told me that his father, who had been a moderately well-known politician, had just died. 

How sad, I said. 

What was sad, he replied, was less his death than his life. From a young man he had set his heart on being in the cabinet but never made it beyond junior minister — and never got over it. For the past three decades of his life, he had been bitter, envious, bad company to others and a liability to himself. What had killed him in the end, his son told me, was not the organ failure reported on his death certificate, but thwarted ambition. 

A few days later I was doing a podcast with Dame Jenni Murray, the veteran broadcaster. We were discussing our careers post separation from our life-long employers, the BBC for her and the Financial Times for me. 

She said she was loving her new freelance existence and felt more carefree than she ever had. The reason: she had not one shred of ambition left. Freed from the monkey on her shoulder driving her on to succeed, she could enjoy the work she did for its own sake. 

I said that on the contrary I was entering my seventh decade more ambitious than I had ever been. I was starting a new school in September, would be teaching A-level economics for the first time, and was hell bent on doing well. 

These two conversations have got me thinking about both the corrosiveness and the necessity of ambition and wondering how much of it we need, how to turn it off when it’s no longer useful — and how to stop it from doing us in. 

Striving for power, position or money 

I was brought up to despise ambition. My parents had that snobby suspicion of overt success common in Britain in the middle of last century and disapproved of striving for power, position or money. I would hear them say “He’s very ambitious” — implying that the person in question was only a hop, skip and a jump away from turning into Macbeth. 

 When it came to my own early career as a journalist I would have sworn black and blue that I had no ambition whatsoever — any advancement was simply due to luck. 

I changed my mind about 15 years ago when I went around asking all the most successful journalists at the FT if they considered themselves ambitious. The older, posher Brits mostly said no, but everyone else, all the Americans and all younger journalists said yes. 

Suddenly I saw how pathetic the old-fashioned British aversion to visible striving was. All successful people are ambitious. If you want to achieve anything, especially in anything competitive, you won’t get anywhere at all without ambition. 

Now as a teacher, I find myself not only pro-ambition, but being forced to teach it to children. “High expectations” are one of the government’s eight teacher standards each trainee teacher must provide evidence of to qualify — the idea is that teachers expect great things from every student so that they can expect great things of themselves. 

Just before the end of term I asked my year 11 students to write down what they wanted to do with the rest of their lives. Some said they wanted to make a lot of money in the City and then start their own businesses. Others wanted to be neurosurgeons, professional footballers, astronauts, forensic scientists. One said he wanted to return to the country his parents were from and become a politician and help to resolve the civil war there. 

As they started to discuss their ambitions I wanted to cheer. What a great job the school and their parents had done to make them all aim so high. What a great job I was doing as their economics teacher! 

Aim high, but within reason 

But as this roll call of ambition continued, I started to feel a bit uncomfortable. I wanted to say: come off it Tommy, you have struggled for three years to see the difference between fixed and variable costs so I’m not sure that the ambition of being Elon Musk is realistic for you. 

What comes out of this are three thoughts. 

Ambition is a good thing but it must be proportionate. This is true not only of Tommy but of all of us — we should aim as high as we can, but within reason. If my friend’s father had had the more reasonable (but still high) ambition of becoming an MP, he might have died a very happy man. 

The second is that if you do not get the success you want, you need to let go quickly, before the wanting destroys you. My brother had the ambition of being a professional oboist. From the age of about 15, this was all he wanted in life and for a decade he did everything to make it happen. But when, in his mid 20s, he realised he was probably not going to get snapped up by the London Symphony Orchestra — or any orchestra at all — he sadly put his oboe away, cancelled his ambition and joined a stockbroker instead. 

Lastly, I now see I’m wrong about myself again. Contrary to what I told Murray, I’m not ambitious any more. I’ve looked it up and it means a “strong desire for success, achievement, power or wealth”. I don’t even have a weak desire for three of those and while I do want to achieve as an A-level teacher, that is because I’ll be no use to my students if I don’t know what I’m doing, and I won’t have any fun myself. 

Now mine is gone, I see more clearly the trouble with ambition. It is not that it turns you into a ruthless, driven version of Macbeth, but that the striving, by definition, makes you dissatisfied with your life at present. Worse still, all the really ambitious people I have known have never been satisfied by achieving the thing of their dreams, they merely concocted an even bigger dream. I daresay that if my friend’s father had made it to the cabinet, he would still have died embittered by dint of not having made it as prime minister. 

In the end he was unusual and unlucky to die still holding on to ambition. One of the greatest joys of getting older is the corrosive side of the striving, the wanting, the envy tends to recede. Whether it is because the charms of success, power and money fade as you get older or whether it is because of the diminishing probability of achieving those things — it doesn’t matter. Murray was right: life without the monkey is a good deal nicer.

Aagamee Manushya Party / Human Future Party

 We the members believe: 

1. Human knowledge and understanding are limited. We believe in a sceptical examination of all philosophies, knowledge systems and their methods.
2. Life on planet earth appears on a downward spiral and all attempts should be made to prevent the extinction of the human race and its environment.
3. Achievement of political power is crucial to achieving our objectives and all methods are fair.
4. Land, labour, money, risk… are fictitious concepts and we will aim to search for better fictions to prevent the extinction of the human race and its environment.

 The above principles will be used to guide our approach to any issue.

 Membership:

Anybody can become a member of the party by affirming to the above four values and paying the requisite joining fee and annual membership charges.

 Anybody can leave the party by submitting their resignation to the appropriate authority in the party with six months notice.

 The party will evolve disciplinary policies after ascertaining that a member has violated its founding values.

 Governance:

 The party will have a Chairperson, a General Secretary and a Treasurer as a leadership troika. The troika will take decisions to achieve the party’s values. Each officer will have a vote each to decide on all operational issues and decisions can be made by a majority vote. Pursuing a consensus should always be the initial approach.

 On issues relating to the values of the party, these maybe amended with a 75% majority of the general membership.

 The leadership troika will have a term of three years. Elections will be held for each post every three years.

 The party may be dissolved with a 80% vote of the general membership.

 

Application form to join Aagamee Manushya Party / Human Future Party

 

 

I:                                                                                        

residing at:

 

 

hereby affirm:

 

1. Human knowledge and understanding are limited. We believe in a sceptical examination of all philosophies, knowledge systems and their methods.
2. Life on planet earth appears on a downward spiral and all attempts should be made to prevent the extinction of the human race and its environment.
3. Achievement of political power is crucial to achieving our objectives and all methods are fair.
4. Land, labour, money, risk… are fictitious concepts and we will aim to search for better fictions to prevent the extinction of the human race and its environment.

 

I wish to join The Aagamee Manushya Party / Human Future Party and promise to work in a diligent manner to propagating its values and beliefs.

 

I enclose the amount                                                              towards membership and annual subscription charges.

 

 

 

 

Signature

The case against Modern Monetary Theory

 Stephen King in The FT

In a world in which government debt is rapidly rising, it’s hardly surprising that there’s growing interest among investors in Modern Monetary Theory. After all, one of its central claims is that budget deficits are, from a financing perspective, an irrelevance. So long as increased government borrowing doesn’t lead to inflation — and, at the moment, there really isn’t much of it around — we can all afford to relax. 

 As Stephanie Kelton notes in her book The Deficit Myth, governments with access to a printing press are “currency issuers” (exceptions include, most obviously, members of the eurozone). As such, all their spending could, in principle, be financed via the creation of cash. Taxes may serve other purposes — the redistribution of income and wealth, the discouragement of “sinful” behaviour — but, in the world of MMT, they serve no useful macroeconomic role. 

---Also read

Can governments afford the debts they are piling up?

The magic money tree does exist, according to modern monetary theory

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In the real world, however, taxes are crucial. The fundamental difference between government finances and those of companies and households is not access to a printing press but, instead, the coercive power to raise taxes. A company making a severe loss cannot reduce that loss by imposing taxes on everyone else. A government can. A worker receiving a pay cut cannot force others to make up the difference. A government can.  

Armed with this knowledge, creditors are understandably willing to accept mostly lower returns on government bonds than on other investments. Put simply, the risk of government default in the face of an adverse economic shock is lower than for other would-be borrowers. 

 Admittedly, there are limits, dictated largely by the political capacity of a government to raise revenues in difficult circumstances. Emerging markets often end up resorting instead to devaluation, default or inflation. In anticipation, borrowing costs spike. 

Still, imagine for a moment that governments embrace MMT. Imagine too, as MMT proponents suggest, that control of the printing press is taken away from unelected central bankers and given to “accountable” elected fiscal representatives. Would we be any better off? 

Far from it. Giving elected representatives the keys to the printing press is the equivalent of giving a gambling addict the keys to the casino. For many politicians, the primary objective is to remain in power. As such, they will too often be incentivised to pursue instant gratification at the expense of longer-term stability. In the early-1970s, the UK embarked on what became known as the “Barber boom”, thanks to the efforts of Conservative chancellor of the exchequer Anthony Barber to engineer an election victory in 1974. As it turned out, the Tories lost and, two years later, the UK ignominiously had to accept a bailout from the IMF. Central bank independence provides a useful bulwark against such behaviour. 

More importantly, inflation and taxes are, in many ways, simply two sides of the same coin. Those governments without access to tax revenues can instead “debase the coinage”. Supporters of MMT claim this will never happen, yet history suggests otherwise: after all, it has been a tried and tested policy of kings and queens over hundreds of years. Too often, those with access to the printing press are prepared to take undue risks in the hope that “this time it’s different”. 

In truth, inflation helps solve the financing issues that proponents of MMT claim no longer exist. Negative real interest rates, a result of higher-than-anticipated inflation, serve to redistribute wealth away from private creditors (pensioners, for example) to public debtors. Much the same could be achieved through a wealth tax. At this point, we come full circle: the distinction between the printing press and taxes begins to break down.  

Thanks to Covid-19, government debt is rising rapidly and, for that matter, appropriately. In the face of recurring lockdowns, we are better off allowing companies and workers to enter a period of economic “hibernation” in the hope that, once the virus is under control, they can thaw out. The alternative of multiple business failures and mass unemployment is of no use to anyone. In the process, however, we are in effect borrowing from our collective economic futures. At some point, some of us will be presented with a bill which, if hibernation policies succeed, we will be in a reasonable position to pay. The political process will decide whether that bill comes in the form of higher taxes, more austerity, rising inflation or eventual default. That, I’m afraid, is the deficit reality.

The UK is one of the most corrupt nations on Earth

Fortunes are being made by political favourites, while Brexit could cement London’s reputation for money laundering writes George Monbiot in The Guardian

‘Awarding coronavirus contracts to unusual companies, without advertising, transparency or competition now appears to have been adopted as the norm.’ Photograph: Andrew Milligan/PA


Fear, shame, embarrassment: these brakes no longer apply. The government has discovered that it can bluster through any scandal. No minister need resign. No one need apologise. No one need explain.

As public outrage grows over the billions of pounds of coronavirus contracts issued by the government without competition, it seems determined only to award more of them. Never mind that the consulting company Deloitte, whose personnel circulate in and out of government, has been strongly criticised for the disastrous system it devised to supply protective equipment to the NHS. It has now been granted a massive new contract to test the population for Covid-19. 

Never mind that some of these contracts have reportedly cost taxpayers £800 for every protective overall delivered. Never mind that at least two multi-million pound contracts appear to have been issued to dormant companies. Awarding contracts to unusual companies, without advertising, transparency or competition now appears to have been adopted as the norm. Several of the firms that have benefited from this largesse are closely linked to senior figures in the government.

Every week, Boris Johnson looks more like George I, under whose government vast fortunes were made by political favourites, through monopoly contracts for military procurement. Any pretence of fiscal rectitude or democratic accountability has been abandoned. With four more years and the support of the billionaire press, who cares?

The way the government handles public money looks to me like an open invitation to corruption. While it is hard to show that any individual deal is corrupt, the framework under which this money is dispensed invites the perception.

When you connect the words corruption and the United Kingdom, people tend to respond with shock and anger. Corruption, we believe, is something that happens abroad. Indeed, if you check the rankings published by Transparency International or the Basel Institute, the UK looks like one of the world’s cleanest countries. But this is an artefact of the narrow criteria they use.

As Jason Hickel points out in his book The Divide, theft by officials in poorer nations amounts to between $20bn and $40bn a year. It’s a lot of money, and it harms wellbeing and democracy in those countries. But this figure is dwarfed by the illicit flows of money from poor and middling nations that are organised by multinational companies and banks. The US research group Global Financial Integrity estimates that $1.1tn a year flows illegally out of poorer nations, stolen from them through tax evasion and the transfer of money within corporations. This practice costs sub-Saharan Africa around 6% of its GDP.

The looters rely on secrecy regimes to process and hide their stolen money. The corporate tax haven index published by the Tax Justice Network shows that the three countries that have done most to facilitate this theft are the British Virgin Islands, Bermuda and the Cayman Islands. All of them are British territories. Jersey, a British dependency, comes seventh on the list. These places are effectively satellites of the City of London. But because they are overseas, the City can benefit from “nefarious activities … while allowing the British government to maintain distance when scandals arise”, says the network. The City of London’s astonishing exemption from the UK’s freedom of information laws creates an extra ring of secrecy.

The UK also appears to be the money-laundering capital of the world. In a devastating article, Oliver Bullough revealed how easy it has become to hide your stolen loot and fraudulent schemes here, using a giant loophole in company law: no one checks the ownership details you enter when creating your company. You can, literally, call yourself Mickey Mouse, with a registered address on Mars, and get away with it. Bullough discovered owners on the Companies House site called “Xxx Stalin” and “Mr Mmmmmm Xxxxxxxxxxx”, whose address was given as “Mmmmmmm, Mmmmmm, Mmm, MMM”. One investigation found that 4,000 company owners, according to their submitted details, were under the age of two.

By giving false identities, company owners in the UK can engage in the industrial processing of dirty money with no fear of getting caught. Even when the UK’s company registration system was revealed as instrumental to the world’s biggest known money-laundering scheme, the Danske Bank scandal, the government turned a blind eye.

A new and terrifying book by the Financial Times journalist Tom Burgis, Kleptopia, follows a global current of dirty money, and the murders and kidnappings required to sustain it. Again and again, he found, this money, though it might originate in Russia, Africa or the Middle East, travels through London. The murders and kidnappings don’t happen here, of course: our bankers have clean cuffs and manicured nails. The National Crime Agency estimates that money laundering costs the UK £100bn a year. But it makes much more. With the money come people fleeing the consequences of their crimes, welcomed into this country through the government’s “golden visa” scheme: a red carpet laid out for the very rich. 

None of this features in the official definitions of corruption. Corruption is what little people do. But kleptocrats in other countries are merely clients of the bigger thieves in London. Processing everyone else’s corruption is the basis of much of the wealth of this country. When you start to understand this, the contention by the author of Gomorrah, Roberto Saviano, that the UK is the most corrupt nation on Earth, begins to make sense.

These activities are a perpetuation of colonial looting: a means by which vast riches are siphoned out of poorer countries and into the hands of the super-rich. The UK’s great and unequal wealth was built on colonial robbery: the land and labour stolen in Ireland, America and Africa, the humans stolen by slavery, the $45tn bled from India.

Just as we distanced ourselves from British slave plantations in the Caribbean, somehow believing that they had nothing to do with us, now we distance ourselves from British organised crime, much of which also happens in the Caribbean. The more you learn, the more you realise that this is what it’s really about: grand larceny is the pole around which British politics revolve.

A no-deal Brexit, which Boris Johnson seems to favour, is likely to cement the UK’s position as the global entrepot for organised crime. When the EU’s feeble restraints are removed, under a government that seems entirely uninterested in basic accountability, the message we send to the rest of the world will be even clearer than it is today: come here to wash your loot.

Economics for Non Economists 2 – Quantitative Easing Explained

by Girish Menon

Pradhip, you have asked for an ‘Idiot’s guide on Quantitative Easing and how it affects the economy’. Let me try:

The Bank of England (BOE) has been practising Quantitative Easing (QE) since 2009. The amounts are:

Time	Amount in £ Billions
Nov. 2009	200
July 2012	375
Aug. 2016	435
Mar. 2020	645
June 2020	745

Ref – The Bank of England

What exactly did the BOE do when they said they were doing QE?

The BOE created additional digital money and used it to buy financial assets (especially government bonds) which were owned by the privately owned banks, pension funds and others.

How did they create this additional money?

Unlike you or me who would be arrested if we did this; the BOE has been conferred with monopoly powers to conjure up any amount of money from thin air by typing the necessary numbers into its bank accounts. It’s as simple as saying, ‘Let there be £745 billion and it appears in the bank’s accounts.

Why do they do QE?

Post the 2008 financial crisis there was a liquidity crisis (see below for explanation of liquidity crisis). The BOE by buying the government bonds from local banks transferred cash to them thus enabling them to start their lending activities in the economy.

In 2020 too they have done the same, but this time I suspect that even if the commercial banks are willing to lend there may not be enough borrowers and so this policy may not have the intended effect of stimulating economic growth.

How does QE affect the economy?

The dominant worldview is that debt drives the world. So QE ensures that lenders have enough money to lend to prospective borrowers. Borrowers borrow money to produce and sell goods at a profit; enabling them to repay their loans with interest while creating jobs in the economy.

The above borrower will use his loan to buy machinery, employ labour…. One man’s spending is another man’s income, so the money begins to circulate among citizens in an economy and a positive spiral will push economic growth and create employment.

However, all this theory hinges on the citizens’ confidence about the future. In the current Covid climate, with firms downsizing at will and people worried about their future, I doubt if there will be a critical mass of borrowers to re-start the stalled economic activity.

Pradhip, thus the BOE does indeed have a magic wand to create money out of thin air. You may ask why is it that in a free market I am not allowed to create my own money? Now that question will be considered seditious!

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What Is a Liquidity Crisis?

A liquidity crisis is a financial situation characterized by a lack of cash or easily-convertible-to-cash assets on hand across many businesses or financial institutions simultaneously. In a liquidity crisis, liquidity problems at individual institutions lead to an acute increase in demand and decrease in supply of liquidity, and the resulting lack of available liquidity can lead to widespread defaults and even bankruptcies. (Ref Investopedia)

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Why The Lives of the Poor are not worth saving!

A STUDY has been doing the rounds since early April which argues that in poor countries the price of a lockdown is larger than the benefits to be gained from it. The lead author of the paper is an economist of Bangladeshi extraction at Yale, who has plenty of experience working in developing countries and is no stranger to the lay of the land here. Khurram Husain in The Dawn

I first came across the study when it was being circulated in mid-April by people from industry, particularly those who were busy lobbying the government for easing the lockdown restrictions. It was subsequently cited in a few opinion pieces published in newspapers, and most recently was invoked by Planning Minister Asad Umar in his televised talk with the press in which he presented a bevy of arguments in support of easing the lockdown.

It is useful to examine this study carefully, because doing so gives us an idea of how (some) economists approach questions of pressing and urgent public importance, and the limitations of the tools that they use.

The study in question is called The Benefits and Costs of Social Distancing in Rich and Poor Countries, and it is authored by Zachary Barnett-Howell and Ahmed Mushfiq Mobarak, both highly credentialled and published economists at Yale. It begins by asking whether “shuttering the economy for weeks or months and mass unemployment are reasonable costs to pay?” in return for “flattening the curve” of Covid-19 cases. In order to answer their own question, the authors have to first render both the costs and benefits of a lockdown into a comparable unit. The economic costs are measured in dollars, whereas the health benefits of a lockdown are measured in lives saved. So the question arises: how to compare these two quantities — lives and money — with each other?

To do so, the authors deploy a widely used model in the economics literature called the Value of Statistical Life model. What VSL does, quite literally, is tell us the dollar value of human life in different contexts. It was used originally in more limited contexts to help policymakers with complex judgements in cases where a particular policy imposed an economic cost in return for a vague health benefit. One example might be setting air quality standards.

But with the passage of time, the VSL model began to be used in contexts far more complicated and more pressing than any in the past. One example is climate change, where a number of economists from prestigious universities have used the model to argue that the benefits from the mitigation efforts to curb carbon emissions that scientists are calling for are not worth the economic costs that they will impose. Simply put, they argued that the likelihood of climate change turning out to be a catastrophic event was small, and making massive investments in foregone output today to avert an event that was probabilistically miniscule was not worth the cost.

The VSL at stake did not justify the massive investments required to curb greenhouse gas emissions to a two per cent increase by century end. This debate was sparked in 2006 when the Stern Review, put out by the eminent UK economist and public servant Nicholas Stern, argued that such an investment was now a matter of existential importance for mankind to make. Those who opposed him either took issue with his projections of the economic losses that climate change would impose, or invoked the VSL model to argue that the foregone economic output was larger than what was purportedly being saved.

It took 16-year-old Greta Thunberg to cut through the Gordian technicalities into which the ensuing conversation fell. “People are suffering, people are dying, entire ecosystems are collapsing,” she exclaimed in her famous address to the UN in September 2019. “We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth. How dare you!”

Today, the economists are back, armed with their VSL model, telling us that the dollar value of the lives saved as a result of the lockdown are worth less than the foregone output in developing countries, and they specifically mention Pakistan as one example.

For the US, for example, they say 1.76 million lives will be saved through aggressive interventions, and put the total value of these lives at $7.9 trillion. This easily justifies a $2tr stimulus along with whatever economic losses result from a closure of the economy.

It is worth asking, they argue, “whether similar mitigation and suppression strategies are equally valuable in low- and middle-income countries”. When they compute the VSL for countries like Pakistan and Nigeria, they find that the amount is so low that it makes little difference to have a suppression strategy. “In comparison to US losses, the dollar costs of uncontrolled Covid-19 in large countries such as Pakistan or Nigeria look miniscule.”

So they’re basically telling us that we are investing precious foregone economic output to save lives that are not worth saving. Among the reasons why the Covid-19 loss is lower for a country like Pakistan is the “higher base VSL” in the US.
They don’t give the dollar figure, but in a graphic they show that the “total VSL lost” for the US ranges from $25tr to just under $1tr depending on the severity of the suppression measures. For Pakistan, Bangladesh and Nigeria, their model shows the total VSL lost to be near zero across the range.

Economists have a hard time speaking plain English, especially when they are attaching dollar values to human lives. It is worth asking this pair to explain in plain English how the base VSL is higher in the US. And the irony is that this argument is being used to justify an easing of the lockdown in the name of the daily wagers themselves, the very people whose lives are found to be not worth saving!

Bank of England to directly finance UK government’s extra spending

 Chris Giles and Philip Georgiadis in The FT

The UK has become the first country to embrace the monetary financing of government to fund the immediate cost of fighting coronavirus, with the Bank of England agreeing to a Treasury demand to directly finance the state’s spending needs on a temporary basis.  

The move allows the government to bypass the bond market until the Covid-19 pandemic subsides, financing unexpected costs such as the job retention scheme where bills will fall due at the end of April.  

Although BoE governor Andrew Bailey opposed monetary financing earlier this week, Treasury officials felt it was best to have the insurance of the central bank willing to finance its operations in the short term. 

It highlights the extraordinary demands on cash the government has experienced in recent weeks, which it feels it cannot finance immediately in the gilts market. 

In a statement to financial markets on Thursday, the government announced it would extend the size of the government’s bank account at the central bank, known historically as the “Ways and Means Facility”, which normally stands at just £370m. 

This will rise to an effectively unlimited amount, allowing ministers to spend more in the short term without having to tap the gilts market. In 2008, a similar move saw the facility rise briefly to £20bn. 

The scale is likely to be large. The government has already tripled the amount of debt it wanted to raise in financial markets in April from £15bn announced in the March 11 Budget to £45bn by the start of this month.  

Although the gilts market showed severe stress in the middle of March as the coronavirus crisis deepened, the government has so far had little difficulty raising finance, especially as the BoE had already committed to printing £200bn to pump into the government bond market to ensure there was sufficient demand for gilts and improve market functioning. 

This direct monetary financing of government would be “temporary and short-term”, the Treasury said in its statement. 

“As well as temporarily smoothing government cash flows, the W & M Facility supports market function by minimising the immediate impact of raising additional funding in gilt and sterling money markets,” it added. 

It said any drawings on this facility would be repaid as soon as possible before the end of the year. 

Market reaction was muted. Sterling was trading 0.1 per cent higher against the US dollar at just below $1.24 shortly after the announcement, while the yield on the benchmark 10-year UK gilt was flat at 0.37 per cent.  

But many economists saw the Treasury’s demand to be financed directly as a big step. 

Tony Yates, senior adviser at Fathom Consulting and a former BoE official, said the move was “an indication of the extraordinary pressures on government”. He added, however, that UK monetary financing of government deficits was unlikely to turn Britain into Zimbabwe because, once the crisis was over, the UK’s capacity to raise taxes again remained intact.  

But just as the quantitative easing the BoE has introduced since 2009 has never been repaid, Richard Barwell, head of macro research at BNP Asset Management and also a former BoE official, said temporary moves such as this often became more permanent as time passed. 

“Persistent monetary financing feels inevitable. Central banks just need to figure out a plan for how to best get into it and how they might eventually want to get out of it,” he said. 

The Ways and Means Facility had long been used as a financing means of government for day-to-day spending before the BoE would sell government bonds to the market, but by 2006 it had become an emergency fund with the financing of government undertaken by the Debt Management Office on a scheduled basis. 

Less than a month ago, the BoE said there was little chance there would be any need to use the facility, demonstrating just how much stress government finances have come under in the past few weeks. 

In a call with journalists on March 18, Mr Bailey said the facility was just a “historical feature”.  

“I don’t think at the moment we’re facing an inability of the government to fund itself, so, yes, it’s there, but it’s not a frontline tool,” Mr Bailey said at the time. 

In an opinion column in the Financial Times earlier this week, the BoE governor pledged not to slip into permanent monetary financing of the government. He said the central bank would not engage in permanent monetary financing, but did not rule out temporary operations that he said would not be inflationary. 

“Short-term operations play an important role in stabilising market conditions and counteracting any immediate tightening of monetary conditions,” Mr Bailey wrote.  

Fran Boait, executive director of Positive Money, an advocacy group, said: “This use of direct monetary financing demonstrates once and for all that the government does not depend on the market to finance its spending. Hopefully now we can have an honest debate about how our collective resources should be allocated.” 

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.

Who painted my money white

It's not just corruption. Entrance into elite US colleges is rigged in every way

An FBI sting revealed that wealthy parents are buying their children a place in top universities. But they’re not the only problem: the whole system is rigged writes Richard V Reeves in The Guardian 

 

‘Elite colleges are serving to reinforce class inequality, rather than reduce it.’ Photograph: Boston Globe/Boston Globe via Getty Images


Shock horror! Wealthy Americans are using their money to buy their children places at elite colleges. An FBI investigation, appropriately named Operation Varsity Blues, has exposed a $25m cash-for-admissions scandal. Coaches were allegedly bribed to declare candidates as athletic recruits; test administrators to change their scores, or allow someone else to take the test for them.

At the center of the cheating scheme was William “Rick” Singer, the founder of a for-profit college preparation business based in Newport Beach, California. Among the 33 parents caught in the FBI sting were Hollywood stars Lori Loughlin and Felicity Huffman. Loughlin starred in the series Full House. Huffman is famous for her role in Desperate Housewives; now she will be more famous as a desperate mom. And she’s not alone. The breathless anxiety among many affluent parents to get their kids into the very best colleges is a striking feature of upper-class American life.

Singer’s bribery scheme allegedly allowed parents to buy entrance for their offspring at some of the nation’s most prestigious colleges, including Yale, Georgetown University, Stanford University, UCLA, the University of San Diego, USC, University of Texas and Wake Forest.

FBI officers were at pains to point out that the colleges themselves are not being found liable; though nine athletic coaches were caught in the net.

“Following 10 months of investigation using sophisticated techniques, the FBI uncovered what we believe to be a rigged system,” John Bonavolonta, the FBI special agent in charge said, “robbing students all over the country of their right to a fair shot of getting into some of the most elite universities in this country”.

But here’s the thing: the whole system is “rigged” in favor of more affluent parents. It is true that the conversion of wealth into a desirable college seat was especially egregious in this case – to the extent that it was actually illegal. But there are countless ways that students are robbed of a “fair shot” if they are not lucky enough to be born to well-resourced, well-connected parents.

The difference between this illegal scheme and the legal ways in which money buys access is one of degree, not of kind. The mistake here was to do something illegal. Meanwhile, much of what goes on in college admissions many not be illegal, but it is immoral.

Take legacy preferences, for example. This boosts the admissions chances of the children of alumni; and for obvious reasons the alumni of elite colleges tend to be pretty affluent, especially if they marry each other. (They are also disproportionately white.) The acceptance rate for legacy applicants at Harvard, Yale, Princeton, Georgetown and Stanford is between two and three times higher than the general admission rate. If they don’t get in first time round, they might be asked to take a “gap year” and enter a year later instead, a loophole known as “Z-listing”. A Princeton study found that being a legacy applicant had the same effect as adding 160 SAT points – on the old scale up to 1600 – to a student’s application. Imagine if colleges gave that kind of admissions boost to lower-income kids?

As John W Anderson, the former co-director of college counseling at the Phillips Academy, an elite boarding school in Andover, Massachusetts, once admitted, of the students from his school who are Z-listed for Harvard, “a very, very, very high percent” are legacies. The Harvard Crimson estimates the proportion at around one in two.

Or how about donor preferences? Rather than bribing coaches, the wealthiest parents can just bribe – sorry, donate to – the college directly. In 2017, the Washington Post reported on the special treatment given to “VIP applicants” via an annual “watch list”. Applicants whose parents were big donors would have notes on their files reading “$500k. Must be on WL” (wait list). Even better, these donations are tax free!

As a general rule, the bigger the money the bigger the effect on admissions chances. Among elite aspirational alums, the question asked is “what’s the price?”. In other words, how much do you have to donate to get your child in?

Whatever the price is, those with the fattest wallets can obviously pay it. Peter Malkin graduated from Harvard Law School in 1958. He became a very wealthy real estate businessman, and huge donor. In 1985, the university’s indoor athletic facility was renamed the Malkin Athletic Center in his honor. All three of Malkin’s children went to Harvard. By 2009, five of his six college-age grandchildren had followed suit. (One brave boy dared to go to Stanford instead.)

How elite US schools give preference to wealthy and white 'legacy' applicants


Or how about Jared Kushner, Donald Trump’s son-in-law? Kushner was accepted into Harvard shortly after his father donated $2.5m. An official at Kushner’s high school said there was “no way anybody in the administrative office of the school thought he would, on the merits, get into Harvard. His GPA did not warrant it, his SAT scores did not warrant it.”

David E and Stacey Goel just gave $100m to Harvard. I’m going to go out on a limb here and say that their children probably have an excellent chance of Harvard admission.

Even those parents who are not in the wealthiest brackets, but are squarely in the upper middle class, can use their money to boost their kids’ chances, through tutors, SAT prep classes, athletic coaches. Students who apply early have better chances of admission, which favors more affluent families since early admission precedes financial aid decisions. Many colleges prefer students who have “shown an interest” in their college. How to show an interest? By visiting the campus – easy for those with money for flights and hotels, less so for those on modest or low incomes.

Small wonder that at elite colleges, including most of those targeted in the corruption scheme such as Yale, Duke, Stanford and Wake Forest, take more students from families in the top 1% of the income distribution than from those in the bottom 60% combined.

So hats off to FBI special agent Bonavolonta and his team for exposing the corruption admissions. But it is in fact simply the most visible sign of a much deeper problem with college admissions. Elite colleges are serving to reinforce class inequality, rather than reduce it. The opaque, complex, unfair admissions process is a big part of the problem. From an equality perspective, it is not just Singer and his clients who are at fault: it’s the system as a whole.

For 2,000 years we’ve linked Jews to money. It’s why antisemitism is so ingrained

From Judas to Shylock, Jews have been blamed for the evils of profit and capitalism. To some leftists, that story still appeals writes Jonathan Freedland in The Guardian


 

Illustration by Matt Kenyon


I’m reluctant to add to the workload of the Equality and Human Rights Commission, which this week announced the first step towards a statutory inquiry into Labour and antisemitism. If it goes ahead, it will be only the second time the commission has seen fit to investigate a British political party for racism – the first related to the BNP – and, given the number of complaints that have been reported, it’ll have its work cut out. Nevertheless, I have a research trip to suggest.

First, though, a word of context. An oft-heard defence of Labour is that a party of its now vastly increased size is bound to reflect the wider population; since that population includes some antisemites, then, sadly but inevitably, so will Labour. But that swerves around a gloomier possibility: that anti-Jewish racism might exert a particular appeal to some on the left – even, paradoxically enough, those who might otherwise proudly regard themselves as anti-racists. 

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Is anti-Zionism the same as anti-Semitism?

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John Harris deftly explained the point on these pages this week, writing that Labour has embraced a form of left populism that “tends to present the very real failings of modern capitalism not as a matter of anything systemic, but as the work of a small group of people who are ruining things for the rest”. Such thinking immediately invites a question: who, exactly, are these people who have wrought such havoc? Who makes up this wicked cabal? Antisemitism is there to provide an answer, the same answer it has provided for so long and in so many places: the Jews.

That Momentum recently felt the need to produce a video urging its members not to be seduced by the age-old conspiracy theory that the Rothschilds secretly rule the world confirms that a certain kind of leftist – one who blames capitalism’s deformities on evil individuals, rather than structures – can be susceptible to the lure of antisemitism. But that should scarcely come as a shock, especially in the western societies of Christian Europe, including – perhaps especially – Britain. For in these societies capitalism – money – has always been linked to, even deemed synonymous with, Jews.

Hence my suggestion of a research trip. On 19 March, the Jewish Museum London will open an exhibition both fascinating and deeply unsettling. It’s called Jews, Money, Myth, and it makes clear that the tendency to connect Jews and money is a habit centuries – indeed millennia – old.

Perhaps you’d be unsurprised by the 20th-century examples, including the grotesque caricatures of rich, fat Jewish bankers controlling the globe, sometimes rendered as repulsive, multi-legged, insect-like monsters. (The equality commissioners might be struck by the echo here of the image that Labour officials deemed unworthy of sanction when shared by a party member: it showed an Alien-style creature, marked with a Star of David, clamped to the face of the Statue of Liberty.)

Entering the Victorian era, the casual visitor might nod with similar familiarity at the nutcracker in the shape of Fagin, Charles Dickens’s miserly Jewish pickpocket, a reminder that Jews were mocked for being both too poor and too rich, caricatured as both beggars and bankers, pedlars and plutocrats – a premonition of their later fate, to be blamed for both communism and capitalism. Even so, some of the cartoons might still shock in the ugliness of their depictions of Jews as more akin to rats or insects than people. You head back 400 years and think, “Of course, Shylock” – Shakespeare’s Jew who says, “I did dream of money-bags tonight.” Back through the centuries you go, to the York massacre of 1190, which left an estimated 150 Jews dead, thanks to mob violence stirred by one Richard de Malbis, filled with resentment at the Jews to whom he owed money.

You keep going until you find yourself at Judas, ready to betray the son of God himself for “30 pieces of silver” – a phrase that lives on, incidentally, in social media posts hurled at Jews or their defenders. Now, of course, all the 12 disciples, like Jesus himself, were Jews – yet, as this new exhibition shows, it was Judas who western art chose to depict as the Jew, often with the red hair that marked him out as a betrayer, alongside his mysteriously fair-haired, fair-skinned fellow apostles. The power of the Judas story lives on: Judas a byword for traitor, the word Jew and Judas almost indistinguishable in several languages, including German.

The historical explanation for this enduring linking of Jews and money is that Jews were pushed into financial roles by a church that barred Christians from, say, lending money for interest, and barred Jews from doing much else, such as owning and farming land. As Anthony Julius – whose Trials of the Diaspora is the definitive history of English antisemitism – puts it, in a feudal society in which Jews could be neither peasants nor lords, there was “no other niche” available. But psychological explanations also suggest themselves, starting with the notion that Christian society was able to split off that aspect of itself it regarded as sinful – its pursuit of wealth and profit – and project it instead on to a hated other: the Jew.

Whatever its origins, the archetype of the avaricious Jew acquired its place in the culture. It can operate at the level of playground insult – “Jew” as a synonym for stinginess – and at the level of global conspiracy theory, with Jews, or “Rothschilds”, the hidden hand pulling the strings of world capitalism and its necessary corollary, imperialism. It is planted deep in the soil of western civilisation, in Britain, the land of Fagin and Shylock, especially. It is deep enough to shape our thinking – there to be reached for when a crisis, such as the 2008 crash, requires an easy, explanatory villain – but also so deep that it is almost buried, out of sight.

The result is that sometimes we can’t even see it, even when it is right in front of us. Recall that Jeremy Corbyn’s first response on hearing that the notorious mural depicting Jewish bankers playing Monopoly on the backs of the poor was to be removed, was to ask, “Why?” He literally could not see the problem. (An image of that mural will be included in the exhibition, alongside other examples of antisemitic depictions of supposed Jewish power.)

Given the 2,000-year-old history of this equation between Jews and the wickedness of money, it is absurd to imagine any one of us would be immune to it. Inevitably, plenty of Jews have themselves internalised it – including no less than Karl Marx, whose writings are peppered with anti-Jewish sentiment, who referred to money as “the jealous god of Israel”, and who looked forward to “the emancipation of mankind from Judaism”.

It is equally absurd to think that merely announcing yourself as an anti-racist automatically inoculates you from this history. It doesn’t. Instead it has to be brought into the open and confronted. But first we have to admit that it’s there.