Calling true conservatives: stop the fake ones from destroying Britain

George Monbiot in The Guardian

Conservatism takes three main forms. Inclusive conservatism seeks to protect objects of value for the benefit of everyone. These might include great urban vistas, or national parks, or wildlife, or works of art, or great institutions, such as the NHS and the BBC. This is the conservatism governments invoke when a nation goes to war.

Exclusive conservatism, by contrast, resists change that would assist the great majority, on behalf of a privileged elite. This is the form – fighting the universal franchise, workers’ rights, progressive taxation and the welfare state – that has prevailed in the United Kingdom for most of its history.

Then there is a third form, which calls itself conservatism but is nothing of the kind: tearing down everything to clear a path for capital. This is the form that prevails today in Britain, in the United States and across much of the world. Its mission is the destruction of the norms, the values, the institutions, the public properties and the public protections that impede the scope for profit-taking.

Capital knows only the future, never the past. It rushes towards the prospect of future gains. All that lies in its path must be swept away, regardless of the value people might attach to it. Modern conservative governments see their mission as facilitating this process. If Theresa May’s government is re-elected, its opportunities for doing so will exceed those that Donald Trump is discovering in America.

The reason is as follows. In converting European law into UK law through the so-called great repeal bill, the government will grant itself the power, as its white paper states, “to correct the statute book where necessary”. “Correcting the statute book” will come to be seen as one of the great political euphemisms of our time.

The corrections will take the form of secondary legislation, which means using something called a statutory instrument. The government estimates that 800 to 1,000 of these instruments will be required – on top of the usual total – and their impact will be profound, as they are dealing with huge issues. In practice, there is almost nothing parliament can do to challenge them. As the Brexit analyst Ian Dunt points out, the bill is “shaping up to be the single biggest executive power grab in Britain’s postwar history”.

Protesters are removed from Solsbury Hill in 1994, to allow the Batheaston bypass to be built. Photograph: Adrian Arbib

Statutory instruments cannot be amended. Due to a combination of government control over the parliamentary timetable and a number of arcane and archaic procedures, hardly any have been blocked in the 70 years of their existence. Already their power is freely abused. They are supposed to be reserved for technical matters: straightening out laws in ways that don’t alter our relationship to the state. Increasingly, they are used to sneak more significant changes through parliament. As the journalist Jane Fae reports, 1,900 a year were used, on average, by the last Labour government (a high enough number, which probably incorporated plenty of abuses); under the Conservatives this has risen to more than 3,000.

After promising “an outright ban” on fracking under national parks, David Cameron’s government reversed the promise by smuggling a statutory instrument through parliament. This is likely to set the pattern, in a new Conservative government, for “correcting the statute book”, not least because, May’s administration explains, parliamentary scrutiny will have to be “balanced” by “the speed of this process”. Dunt observes that “nearly half a century of workers’ rights, environmental standards, health and safety laws, consumer protections, animal rights, and countless other areas are now at the mercy of Conservative ministers, who can use a rainy Friday afternoon, when everyone is down the pub, to finally start rubbing out bits of law they never liked”.

The promise of Brexit was that we would regain sovereignty over our affairs. But May’s plans will achieve the opposite. Sovereignty will reside in the executive, while parliamentary scrutiny is curtailed. Nothing will be safe from what modern conservatives gleefully describe as creative destruction.

We can see where this is going. The billionaire press pours scorn on environmental and workplace legislation. The National Farmers’ Union, in its election lobbying document, demands that the neonicotinoid pesticides linked to the wiping out of bees and other wildlife – and currently banned by EU law – can be used here again. The government sees planning laws and wildlife havens as impediments to business. It uses every possible excuse not to act on air pollution: any concession must be extracted with the pickaxe of European law. Prominent Conservatives ridicule those who try to protect the character and charms of the nation as “the Green Blob”.

In pursuit of ever closer union with Trump’s America, the government is likely to offer up any national standards and peculiarities it deems necessary to secure a trade deal. This is why it chose as trade secretary Liam Fox, who represents in its purest form the Conservative urge to smash the crockery.

I remember being struck by the thought – when lying with a group of dreadlocked anarchists at the foot of an iron age hill fort in 1994, in the path of an earth movercommissioned by John Major’s government – that we were the conservatives and they were the destructives. We were seeking to defend the fabric of the nation while they, with their road schemes joining the dots between scheduled ancient monuments, chalk downlands, water meadows and woodlands, were trying to pulp it. They claimed to be patriots, but we loved this country more than they did.

There is no incompatibility between an inclusive conservatism and the defence of public investment, public services, workers’ rights, gender equality and the interests of ethnic minorities. Indeed, I find it hard to see how anyone can love people without also loving the living world that gave rise to us, or can love our civilisation without loving what remains of those that came before.

If Theresa May wins, hers will not be a normal Conservative government, even by the weird and ever-shifting standards of 21st century normality. Through the powers she grants herself, it threatens to become a maelstrom of destruction on behalf of the party’s funders and associates. Unlikely as our prospects are, we must do all we can to stop her from regaining office. Conservatives arise, and defend your country from those who abuse your name.

This is how the price of shares is really decided

Satyajit Das in The Independent



Equity investors – who have enjoyed strong gains over the past eight years – are unlikely to question the merits of stocks as an investment. US stock markets have tripled in price since 2009. In nominal terms the Dow Jones Index is up 70 per cent from its peak in January 2000. But 17 years later it is up only 19 per cent in real (inflation-adjusted) terms.

Investors rarely scrutinise the driver of equity returns. In reality stock markets have changed significantly over recent decades, driven by artificial factors that result in manipulated and unsustainable values.

The traditional functions of the stock market include facilitating capital-raisings for investment projects, allowing savers to invest and providing existing investors with the ability to liquidate their investments when circumstances require. Unfortunately, a number of factors now undermine these functions.

First, equity markets have increasingly decoupled from the real economy. Equity prices now do not correlate to fundamental economic factors, such as nominal gross domestic product or economic growth, or, sometimes, earnings.

Second, equity markets have become instruments of economic policy, as policymakers try to increase asset values to generate higher consumption driven by the “wealth effect” – increased spending resulting from a sense of financial security. Monetary measures, such as zero-interest-rate policy and quantitative easing, distort equity prices. Dividend yields that are higher than bond interest rates now drive valuations. Future corporate earnings are discounted at artificially low rates.

Third, the increased role of HFT (high frequency trading) has changed equity markets. HFT constitutes up to 70 per cent of trading volume in some markets. The average holding period of HFT trading is around 10 seconds. The investment horizon of portfolio investors has also shortened. In 1940 the average investment period was seven years. In the 1960s it was five years. In the 1980s it fell to two years. Today it is around seven months. The shift from investing for the long run has fundamentally changed the nature of equities, with momentum trading a larger factor.

Fourth, the increasing effect of HFT has increased volatility and the risk of large short-term price changes, such as that caused by the 7 October “flash crash”, discouraging some investors.
Fifth, financialisation may facilitate market manipulation, with the corrosive impact of insider-trading and market abuse eroding investor confidence.
US federal investigators found a spider’s web of insider-trading exploited by a small group of funds that benefited twice: from both trading profits and artificially enhanced returns. These, in turn, generated more investments and higher management fees. The investigations revealed expert network firms, which provided “independent investment research”. Redefining the concept of expertise, these firms seemed to specialise in matching insiders with traders hungry for privileged information, routinely allowing access to sensitive information on sales forecasts and earnings.

Regulators suggested that the practice was so widespread as to verge on a corrupt business model. Reminiscent of the late 1980s investigations into Drexel Burnham Lambert, Ivan Boesky and Michael Milken, the clutch of prosecutions has created an impression that a small golden circle of traders have an information edge, disadvantaging other, especially smaller, investors.

Finally, alternative sources of risk capital, the high cost of a stock market listing, particularly increasing compliance costs, increased public disclosure and scrutiny of activities including management remuneration as well as a shift to different forms of business ownership, such as private equity, have changed the nature of equity market. New capital raisings are increasingly viewed with scepticism as private investors or insiders seek to realise accreted gains, subtly changing the function of the market. The problems are evident in both the primary markets (lower numbers of initial public offerings of new shares) and in the secondary markets (reduced market turnover).

The recent Snapchat IPO illustrates the trend. Snap, a young, still unprofitable company, saw its shares soared 44 per cent on its first day of trading, although it fell sharply subsequently. Shareholders providing capital will not be able to control the company, as company insiders have not given common stockholders voting rights, which is inconsistent with conventional corporate governance models. In technology-intensive sectors, for example, entrepreneurs, such as those associated with Snap, now use IPOs to either facilitate exits for venture capitalists and founders, create a currency in the form of listed shares to compensate or finance acquisitions, or raise cash to fund shortfalls between revenue and expenditure.

The declines are symptomatic of the problems of excessive financialisation. Financial instruments, such as shares and their derivatives, are intended as claims on real businesses. Over time, trading in the claims themselves have become more rewarding, leading to a disproportionate increase in the level of financial rather than business activity. Longer term, the identified developments threaten the viability of the stock market as a source of capital for businesses and also as an investment, damaging the real economy.

Left, right, or the good fight?

Tabish Khair in The Hindu

Bestselling author Amish Tripathi recently set people arguing with his contention that he didn’t “believe in left-wing and right-wing ideologies”; he was “just proud of the land” in which he was born, and its culture. Immediately, some of my friends assumed that I would be hostile to such a statement, but I agree with Mr. Tripathi – partly.

The matter of ‘Indian culture’ is easily resolved. Born in Muslim circles, where many claim a similar pride in Islamic practices, I have long looked at matters specifically. As a Muslim I am not proud of the fact that we give fewer opportunities and legal options to Muslim women at times, but I am proud of Islam’s egalitarian and charitable requirements. Similarly, as an Indian I am not proud of our cultural preference for male children and our caste prejudices, but I am proud of a lot of other things: our art, music, philosophy and literature, our civilised ability to live with differences, etc.

I am sure Mr. Tripathi means what I mean: like me, he is proud of the fact that we have an increasing number of women authors, scientists and politicians and not of the fact that we also have female infanticide. So that part of the argument is hardly a matter of controversy.


Making sense of the demarcation

The left-right divide – or its lack – appears more contentious. As I am usually associated with the left by people, except, I suspect, overly assured people on the intellectual political left, who happen to hold tenure in universities like Cambridge or inhabit cities like Delhi and London, I am expected to take exception to this part of Mr. Tripathi’s claim. But once again, I agree – partly.

Yes, the demarcation between the left and the right – in terms of political ideologies – does not make sense. It stopped making sense at least as far back as the rise of Stalinism in the Soviet Union. That is so because the left – as Karl Marx understood – needs to be contextual and relational. The main difference between the left and the right is that the left, if it is really the left, looks at a matter in the present context, and tries to judge it in that living and material context. The right, if it is really the right, depends on the authority of ‘custom’, ‘religion’ and similar inherited matters for justification. Failing to shut you up with ‘god’, it hits you with the fetishised ‘gene for crime!’

With the rise of Stalinism – and similar communist ideologies – a part of the political left basically started thinking like the traditional right. It started justifying its positions not by engaging with the living and the always changing world of people and their social relations, but by telling people how to live and think based on inherited ‘sacred’ ideas and texts. The fact that these texts were attributed to Marx or Lenin and not to the Gospel writers or Luther makes no difference.
Now, one of the problems the actual left has always had – because it (rightly to my mind) wants to engage with the lived materiality of social relations – is its tendency to privilege change. Because the actual left is particularly alive to changes and sceptical of tradition-based arguments, it tends to see change in largely positive terms. You have nothing to lose but your chains, thundered Marx and Engels, momentarily forgetting that people always have more to lose than their chains, and the poor have more to fear losing the little that they have than the superflux-rich.

Similarly, as the right bases its arguments on traditions and custom, it tends to believe that everything inherited from the past – as culture or religion – is necessarily good. This again may not be the case. Inheritances from the past might be good or bad; they might even have been good once and turned bad now. Similarly, a change might be for the better or for the worse.


An unwillingness to engage

Given this basic realisation, just as there are those on the left who think like the right, there are also those on the right who think like the left. In short, there are those on the left who act on the basis of inherited ideas that may have no validity today, and there are those on the right who test traditions on the basis of a lived engagement with the changed conditions of the present.

Actually, many of the political problems of the world today stem from exactly this situation: the fact that there are many on both the left and the right who are unwilling or unable to engage with the changing socio-economic relations of power today. For instance, the political left keeps talking of the proletariat even as workers have been cleverly changed into minor managers of their own labour by neo-liberalism, and the political right keeps talking of the free market of capitalism, even as neo-liberalism survives by enforcing governmental interference in the market but only on the side of the very rich!

Fatah ka Fatwa - Islamic Banking