Sunday, 27 September 2020
Saturday, 19 September 2020
Thursday, 17 September 2020
Tuesday, 15 September 2020
To lead Britain through a crisis, you have to be able to see beyond it: Gordon Brown abandons Neoliberal Economics
When the economy collapsed in 2008, I had to think ahead. I fear too little thought has been given to our recovery after Coronavirus writes Gordon Brown
‘Our young people now face the worst labour market for 50 years.’ Photograph: Hollie Adams/Getty Images
Our country’s Covid-19 crisis, together with the economic crisis the pandemic brought with it, is not over. In fact, it is entering a dangerous new phase.
With the UK economy collapsing by 25% in March and April – a fall twice as bad as those in Europe and the US and now only halfway back to pre-crisis level – a recovery plan is needed: closer to France’s £90bn, Germany’s £115bn and the US’s £1tn is required, not the £30bn announced by the chancellor in July.
Millions of people – not 200,000 as now – must be tested every day if the mass return to the workplace is not to result in a second wave of the disease.
And, if the end of the furlough scheme on 31 October is not to bring the highest number of redundancies in living memory, new job-protection measures – based on the Office for Budget Responsibility’s assessment that unemployment could reach 3m – will have to be implemented in the next few days.
Already I see the Conservative economic doves of the spring reverting to type, emerging as the grasping fiscal hawks of autumn, unable to see that every economic orthodoxy has been turned on its head.
Having led the country through one big crisis after 2008 – I had to learn quickly, and learn from my own mistakes – I can feel some sympathy for Boris Johnson, even though mea culpa is the one Latin phrase that will never cross his lips. But I found back then that it was not enough just to do day-to-day crisis management, or even to be one step ahead of events; the real challenge is to anticipate the next problem but one.
More than that, to solve each problem I had to get to the root of it, often by overriding conventional thinking, and following that up with a relentless determination to mobilise all the weapons at one’s disposal. In 2008 the banks were running capitalism without capital, so we nationalised strategically important financial institutions.
Now, in 2020 and still in the absence of a vaccine or a cure, we should have been clear from the outset that regular mass testing was – and still is – the effective way to detect the spread of the disease and then to respond with prompt local public health interventions.
But I fear that those responsible – having misspent millions on contracts for serially ineffective initiatives – have given too little thought to what also matters in the days ahead: engineering the long-term recovery.
Investing now – to save good companies and prevent the destruction of capacity and the loss of key jobs and skills for good – means following Germany and France by maintaining furlough payments in key sectors, preferably with a wage subsidy for part-time work, and with the backstop offer of retraining during absence from the workplace.
And, where workers have to stay at home to avoid the spread of infections during the inevitable increase of pandemic-related local lockdowns, the support available to them has to feed their families, which today’s miserly £90 a week does not.
Our young people now face the worst labour market for 50 years – yet today’s youth employment programme will assist only 350,000, and only for six months, when there are 3.5 million under-25s who are not in full-time education. So to guarantee a job, training or education requires a far more rapid expansion of new apprenticeship, college and university places, along with the re-introduction of the more generous future jobs programme that we had in 2009.
Tory austerity was never a good idea and is now an admitted failure. But it is frankly an economic absurdity when government borrowing costs are so small – 10-year gilt yields are around one-20th of those of 2008 – and unmet needs so extensive.
Indeed inflation – once seen as the justification for austerity economics – is so low in the US today that the Federal Reserve has deemed that maximising employment will now be its main priority. Again, the UK is behind the curve. In 1998, serving as chancellor, I was responsible for the Bank of England Act, which required the Bank to pursue high levels of employment. Now I am the first to say that the Bank needs a more demanding constitution, one that imposes a dual mandate: to take unemployment as seriously as inflation. This should be matched by an operational target stating that interest rates will not rise or stimulus end until unemployment falls to pre-crisis levels.
The current crisis is of course global as much as it is domestic. From 2008 to 2010, I spent much of my time persuading my fellow leaders to act as one, and to agree a synchronised stimulus alongside aid for developing countries. But I am shocked that now – with the world’s economies simultaneously damaged by the pandemic and an economic shock far worse than back then – the world’s leaders have done so little work together in response.
In short, all countries should be agreeing to call time on 50 years of neoliberal economics. They should break not only with their exclusive focus on controlling inflation, but with the pursuit of deregulation, liberalisation and privatisation at the expense of fairness, employment and sustainability. That project, once called the Washington consensus, is out of favour even in Washington. A new paradigm would give priority to fair trade, not just free trade; better control of the management of destabilising capital flows to replace the current free-for-all; a competition regime that can robustly address monopolistic behaviour from rent-seeking digital platforms; an industrial policy that would include generous support for science and innovation – with all that wrapped in a commitment to action on climate change and action on unacceptable levels of inequality.
Could it happen here? I believe so. While the government may feel able to steamroller its policies through the House of Commons thanks to an 80-seat majority, our multinational and increasingly regionally diverse country can no longer be straitjacketed, as now, by a remote and failing centralised state.
In contrast to the tiny and fallible cabal in No 10, democracy is rising again elsewhere: no longer just MPs and local councillors, but directly elected metro mayors and elected decision-making bodies in Scotland, Wales and Northern Ireland. And, as with the outrage against the government’s breach of international law, a rebellion of the regions and nations could force the prime minister to listen.
A challenge no doubt, especially with this prime minister. But he is already worried about the fragility of his recently acquired strength in the north of England; and as a unionist, he knows he must also take heed of voices in Scotland and Wales, where his popularity is waning fast. Politically – and despite his formidable record in the genre – he knows he cannot afford a U-turn on the union.
A strong alliance encompassing trades unions and businesses too can thus not only press for a recovery plan but also revive the spirit of cooperation and unity across our country – and, through a newfound solidarity, give the British people what we need most: hope.
Our country’s Covid-19 crisis, together with the economic crisis the pandemic brought with it, is not over. In fact, it is entering a dangerous new phase.
With the UK economy collapsing by 25% in March and April – a fall twice as bad as those in Europe and the US and now only halfway back to pre-crisis level – a recovery plan is needed: closer to France’s £90bn, Germany’s £115bn and the US’s £1tn is required, not the £30bn announced by the chancellor in July.
Millions of people – not 200,000 as now – must be tested every day if the mass return to the workplace is not to result in a second wave of the disease.
And, if the end of the furlough scheme on 31 October is not to bring the highest number of redundancies in living memory, new job-protection measures – based on the Office for Budget Responsibility’s assessment that unemployment could reach 3m – will have to be implemented in the next few days.
Already I see the Conservative economic doves of the spring reverting to type, emerging as the grasping fiscal hawks of autumn, unable to see that every economic orthodoxy has been turned on its head.
Having led the country through one big crisis after 2008 – I had to learn quickly, and learn from my own mistakes – I can feel some sympathy for Boris Johnson, even though mea culpa is the one Latin phrase that will never cross his lips. But I found back then that it was not enough just to do day-to-day crisis management, or even to be one step ahead of events; the real challenge is to anticipate the next problem but one.
More than that, to solve each problem I had to get to the root of it, often by overriding conventional thinking, and following that up with a relentless determination to mobilise all the weapons at one’s disposal. In 2008 the banks were running capitalism without capital, so we nationalised strategically important financial institutions.
Now, in 2020 and still in the absence of a vaccine or a cure, we should have been clear from the outset that regular mass testing was – and still is – the effective way to detect the spread of the disease and then to respond with prompt local public health interventions.
But I fear that those responsible – having misspent millions on contracts for serially ineffective initiatives – have given too little thought to what also matters in the days ahead: engineering the long-term recovery.
Investing now – to save good companies and prevent the destruction of capacity and the loss of key jobs and skills for good – means following Germany and France by maintaining furlough payments in key sectors, preferably with a wage subsidy for part-time work, and with the backstop offer of retraining during absence from the workplace.
And, where workers have to stay at home to avoid the spread of infections during the inevitable increase of pandemic-related local lockdowns, the support available to them has to feed their families, which today’s miserly £90 a week does not.
Our young people now face the worst labour market for 50 years – yet today’s youth employment programme will assist only 350,000, and only for six months, when there are 3.5 million under-25s who are not in full-time education. So to guarantee a job, training or education requires a far more rapid expansion of new apprenticeship, college and university places, along with the re-introduction of the more generous future jobs programme that we had in 2009.
Tory austerity was never a good idea and is now an admitted failure. But it is frankly an economic absurdity when government borrowing costs are so small – 10-year gilt yields are around one-20th of those of 2008 – and unmet needs so extensive.
Indeed inflation – once seen as the justification for austerity economics – is so low in the US today that the Federal Reserve has deemed that maximising employment will now be its main priority. Again, the UK is behind the curve. In 1998, serving as chancellor, I was responsible for the Bank of England Act, which required the Bank to pursue high levels of employment. Now I am the first to say that the Bank needs a more demanding constitution, one that imposes a dual mandate: to take unemployment as seriously as inflation. This should be matched by an operational target stating that interest rates will not rise or stimulus end until unemployment falls to pre-crisis levels.
The current crisis is of course global as much as it is domestic. From 2008 to 2010, I spent much of my time persuading my fellow leaders to act as one, and to agree a synchronised stimulus alongside aid for developing countries. But I am shocked that now – with the world’s economies simultaneously damaged by the pandemic and an economic shock far worse than back then – the world’s leaders have done so little work together in response.
In short, all countries should be agreeing to call time on 50 years of neoliberal economics. They should break not only with their exclusive focus on controlling inflation, but with the pursuit of deregulation, liberalisation and privatisation at the expense of fairness, employment and sustainability. That project, once called the Washington consensus, is out of favour even in Washington. A new paradigm would give priority to fair trade, not just free trade; better control of the management of destabilising capital flows to replace the current free-for-all; a competition regime that can robustly address monopolistic behaviour from rent-seeking digital platforms; an industrial policy that would include generous support for science and innovation – with all that wrapped in a commitment to action on climate change and action on unacceptable levels of inequality.
Could it happen here? I believe so. While the government may feel able to steamroller its policies through the House of Commons thanks to an 80-seat majority, our multinational and increasingly regionally diverse country can no longer be straitjacketed, as now, by a remote and failing centralised state.
In contrast to the tiny and fallible cabal in No 10, democracy is rising again elsewhere: no longer just MPs and local councillors, but directly elected metro mayors and elected decision-making bodies in Scotland, Wales and Northern Ireland. And, as with the outrage against the government’s breach of international law, a rebellion of the regions and nations could force the prime minister to listen.
A challenge no doubt, especially with this prime minister. But he is already worried about the fragility of his recently acquired strength in the north of England; and as a unionist, he knows he must also take heed of voices in Scotland and Wales, where his popularity is waning fast. Politically – and despite his formidable record in the genre – he knows he cannot afford a U-turn on the union.
A strong alliance encompassing trades unions and businesses too can thus not only press for a recovery plan but also revive the spirit of cooperation and unity across our country – and, through a newfound solidarity, give the British people what we need most: hope.
Monday, 14 September 2020
Sunday, 13 September 2020
Seeing Mussolini’s Italy in Modi’s India
There are uncanny parallels between the Italy of the 1920s and the India of the 2020s writes Ram Guha in Scroll India
Professed reverence for the laws
In the same year, Benedetto Croce characterised the ideology of the ruling party and of Mussolini as a “bizarre mixture of appeals to authority and to demagoguery, of professed reverence for the laws and of violation of the laws, of ultra-modern concepts and of musty old trash, abhorrence of culture and sterile attempts at producing a new one…” In this regard, the Italian State of the 1920s bears a striking resemblance to Modi’s regime today which speaks respectfully of the Constitution while blatantly violating its spirit and essence, which appeals to ancient wisdom while displaying a contempt for modern science, which claims to exalt ancient culture while manifesting an utter philistinism in practice.
While most independent-minded Italian intellectuals were forced into exile, Benedetto Croce stayed on in his homeland, offering an intellectual and moral opposition to fascism. As his biographer puts it, “[w]hereas the regime employed the mass media and the education system to promote the cult of Mussolini and to inculcate submission to authority, demanding from the new generations, in mystical union with the Duce, without asking questions, ‘to believe, to obey, to fight’, Croce, instead, offered a set of liberal values, preached freedom, defended the dignity of man, as a free agent, and urged individual decision and personal responsibility.”
Credit: Prakash SINGH / AFP
Why did the Italian demagogue enjoy such great popularity among the masses? Here is Gilmour’s answer: “Mussolini survived so long partly because he incarnated certain strands of italianata; he embodied the hopes, fears and generations that believed Italy had been cheated of its due, both by its liberal politicians and by its wartime allies, who had forced it to accept the ‘mutilated peace.’”
By the same token, Modi has successfully appealed to an alleged Golden Age in the distant past where Hindus were supreme in India and abroad, argued that Hindus had slipped from that pedestal owing to Muslim and British conquerors in the past, and pitted himself against conniving and corrupt Congress politicians who would drag Hindus and India down again.
Reading these books about Italy in the 1920s in the India of the 2020s, I was depressed by the many parallels; but also consoled by the few departures. Unlike Mussolini’s Italy, in Modi’s India, the Bharatiya Janata Party has had to contend with political opposition from other parties; admittedly an Opposition much attenuated at the Centre, but still fairly robust in half-a-dozen major states of the Union. The press has been tamed, but not entirely crushed. And while Mussolini’s Italy had only Benedetto Croce to call it to account, Modi’s India still has many writers and intellectuals speaking out courageously in defence of the founding principles of the Republic, and in all the languages of the Republic too.
In The Pursuit of Italy, after describing how Mussolini consolidated his rule, Gilmour remarks: “Fascism’s appeal was blunted, however, by its failure to provide prosperity. Italians might be deceived into thinking they were well governed but they could not be deceived into thinking they were well off.” Mussolini failed in providing jobs and prosperity; whereas Modi has, in fact, done far worse on the economic front, his ill-thought and quixotic policies annulling much of the progress that the Indian economy had made in the three decades since liberalisation.
Millions of young men today fanatically follow Narendra Modi. The fate that awaits them, and us, is anticipated in what Benedetto Croce said with regard to the millions of young men who fanatically followed Mussolini. After the Italian dictator had died and his regime had finally fallen, Croce wrote sadly of “the treasury of moral energies that the oppressive regime misguided, exploited and at the end had betrayed”.
Benito Mussolini and his fascists thought they would rule Italy forever. Narendra Modi and the BJP think likewise. These fantasies of eternal rule will not come to fruition; but so long as the present regime remains in power, it will continue to extract a horrendous cost – in economic, political, social, and moral terms. Italy took decades to recover from the ravages of Mussolini and his party; India may take even longer to recover from the ravages of Modi and his party.
I read a lot of biographies, these often set in other countries than my own. A book I have just finished is Benedetto Croce and Italian Fascism, by the Canadian scholar, Fabio Fernando Rizi. It uses the life of a great philosopher to tell a larger story of the times he passed through.
Reading Rizi’s book, I found uncanny parallels between the Italy of the 1920s and the India of the 2020s. The myth of Benito Mussolini, like the myth of Narenda Modi, was crafted by writers and propagandists “eager to sing paeans to the genius of the Duce”. These propagandists had begun to call the leader of fascism “the providential man”, “the man of massive faith”, or simply, “the Man of Providence”. Thus was created “the myth of the Duce, the chief who is always right, the leader who dares where others vacillate”.
In December 1925, the Italian State passed a new law, which came down hard on the press and its freedoms. The consequences of this law were that “within a few months, the most important papers came under Fascist control, one by one. Some owners were compelled to sell under economic or political pressure. All the liberal editors had to resign and were replaced by more accommodating men.”
Reading Rizi’s book, I found uncanny parallels between the Italy of the 1920s and the India of the 2020s. The myth of Benito Mussolini, like the myth of Narenda Modi, was crafted by writers and propagandists “eager to sing paeans to the genius of the Duce”. These propagandists had begun to call the leader of fascism “the providential man”, “the man of massive faith”, or simply, “the Man of Providence”. Thus was created “the myth of the Duce, the chief who is always right, the leader who dares where others vacillate”.
In December 1925, the Italian State passed a new law, which came down hard on the press and its freedoms. The consequences of this law were that “within a few months, the most important papers came under Fascist control, one by one. Some owners were compelled to sell under economic or political pressure. All the liberal editors had to resign and were replaced by more accommodating men.”
Professed reverence for the laws
In the same year, Benedetto Croce characterised the ideology of the ruling party and of Mussolini as a “bizarre mixture of appeals to authority and to demagoguery, of professed reverence for the laws and of violation of the laws, of ultra-modern concepts and of musty old trash, abhorrence of culture and sterile attempts at producing a new one…” In this regard, the Italian State of the 1920s bears a striking resemblance to Modi’s regime today which speaks respectfully of the Constitution while blatantly violating its spirit and essence, which appeals to ancient wisdom while displaying a contempt for modern science, which claims to exalt ancient culture while manifesting an utter philistinism in practice.
While most independent-minded Italian intellectuals were forced into exile, Benedetto Croce stayed on in his homeland, offering an intellectual and moral opposition to fascism. As his biographer puts it, “[w]hereas the regime employed the mass media and the education system to promote the cult of Mussolini and to inculcate submission to authority, demanding from the new generations, in mystical union with the Duce, without asking questions, ‘to believe, to obey, to fight’, Croce, instead, offered a set of liberal values, preached freedom, defended the dignity of man, as a free agent, and urged individual decision and personal responsibility.”
Reading further into Rizi’s book, I found this passage: “By the end of 1926, liberal Italy had died. Mussolini had consolidated his power and created the legal instruments for the continuation of his dictatorship. Political parties had been outlawed, and freedom of the press destroyed. The opposition had been disarmed and Parliament reduced to impotence. By 1927 it had become almost impossible to undertake any political action; it was also dangerous to express critical opinions in personal letters or in public places. Civil employees could lose their jobs if they expressed views contrary to government policy.
“Besides a powerful and revitalized police division in the Ministry of the Interior, under the direct responsibility of the chief of police, a new and efficient secret police organization, ominously and mysteriously called OVRA, was created with the aim of repressing any sign of anti-fascism and controlling any expression of dissent. In a short while, it collected files on more than one hundred thousand people, including Fascist leaders, and built an impressive web of special agents, spies, and informers whose reach extended throughout the country and even abroad.”
As I was transcribing these words from Rizi’s book, news came in of the home ministry demanding, from the Finance Commission, a sum of Rs 50,000 crore to fund what it called “real-time surveillance” of citizens. This at a time when the states are being denied the money owed to them by the Centre; and while the home ministry has already dangerously abused its powers through the foisting of fake cases on independent thinkers, activists, and journalists.
And here is Rizi’s description of the Italian Parliament, c. 1929: “Parliament had become a rubber stamp of the government’s decisions. Speeches of the few remaining members of the opposition were ignored, or more often shouted down to jeers from the floor and from the public galleries.”
Patria and gloria
Fabio Fernando Rizi’s book focuses on one person in one country, and eschews comparative analysis. However, in passing, the author remarks that “Italian Fascism created an authoritarian regime, ever increasing its reach, but it did not have the time, perhaps did not even possess the strength, to build a totalitarian society.” This must be read as meaning only one thing; however awful Mussolini’s Italy was, it was not nearly as awful as Hitler’s Germany.
After reading Rizi’s intellectual biography of Benedetto Croce, I turned to David Gilmour’s magnificent book, The Pursuit of Italy, a wide-ranging and compellingly readable history of that country from the beginnings of time. Thirty of the four hundred pages of this book deal with Mussolini’s years in power. As with Rizi, much of what Gilmour said about Italy in the past chillingly resonated with what I am witnessing in my own country at present.
Consider thus these remarks: “In the 1930s the regime’s style became more ostentatious. There were more parades, more uniforms, more censorship, more hectoring, more speeches from the leader, more shouting, gesturing and grimacing from a balcony to vast crowds, which greeted Mussolini’s every reference to patria and gloria with chants of ‘Du-ce! Du-ce! Du-ce!’”.
Much the same could be said about Modi’s rule, especially after he won a second term in 2019, his every utterance greeted with “Mo-di! Mo-di! Mo-di!”.
“Besides a powerful and revitalized police division in the Ministry of the Interior, under the direct responsibility of the chief of police, a new and efficient secret police organization, ominously and mysteriously called OVRA, was created with the aim of repressing any sign of anti-fascism and controlling any expression of dissent. In a short while, it collected files on more than one hundred thousand people, including Fascist leaders, and built an impressive web of special agents, spies, and informers whose reach extended throughout the country and even abroad.”
As I was transcribing these words from Rizi’s book, news came in of the home ministry demanding, from the Finance Commission, a sum of Rs 50,000 crore to fund what it called “real-time surveillance” of citizens. This at a time when the states are being denied the money owed to them by the Centre; and while the home ministry has already dangerously abused its powers through the foisting of fake cases on independent thinkers, activists, and journalists.
And here is Rizi’s description of the Italian Parliament, c. 1929: “Parliament had become a rubber stamp of the government’s decisions. Speeches of the few remaining members of the opposition were ignored, or more often shouted down to jeers from the floor and from the public galleries.”
Patria and gloria
Fabio Fernando Rizi’s book focuses on one person in one country, and eschews comparative analysis. However, in passing, the author remarks that “Italian Fascism created an authoritarian regime, ever increasing its reach, but it did not have the time, perhaps did not even possess the strength, to build a totalitarian society.” This must be read as meaning only one thing; however awful Mussolini’s Italy was, it was not nearly as awful as Hitler’s Germany.
After reading Rizi’s intellectual biography of Benedetto Croce, I turned to David Gilmour’s magnificent book, The Pursuit of Italy, a wide-ranging and compellingly readable history of that country from the beginnings of time. Thirty of the four hundred pages of this book deal with Mussolini’s years in power. As with Rizi, much of what Gilmour said about Italy in the past chillingly resonated with what I am witnessing in my own country at present.
Consider thus these remarks: “In the 1930s the regime’s style became more ostentatious. There were more parades, more uniforms, more censorship, more hectoring, more speeches from the leader, more shouting, gesturing and grimacing from a balcony to vast crowds, which greeted Mussolini’s every reference to patria and gloria with chants of ‘Du-ce! Du-ce! Du-ce!’”.
Much the same could be said about Modi’s rule, especially after he won a second term in 2019, his every utterance greeted with “Mo-di! Mo-di! Mo-di!”.
Credit: Prakash SINGH / AFPWhy did the Italian demagogue enjoy such great popularity among the masses? Here is Gilmour’s answer: “Mussolini survived so long partly because he incarnated certain strands of italianata; he embodied the hopes, fears and generations that believed Italy had been cheated of its due, both by its liberal politicians and by its wartime allies, who had forced it to accept the ‘mutilated peace.’”
By the same token, Modi has successfully appealed to an alleged Golden Age in the distant past where Hindus were supreme in India and abroad, argued that Hindus had slipped from that pedestal owing to Muslim and British conquerors in the past, and pitted himself against conniving and corrupt Congress politicians who would drag Hindus and India down again.
Reading these books about Italy in the 1920s in the India of the 2020s, I was depressed by the many parallels; but also consoled by the few departures. Unlike Mussolini’s Italy, in Modi’s India, the Bharatiya Janata Party has had to contend with political opposition from other parties; admittedly an Opposition much attenuated at the Centre, but still fairly robust in half-a-dozen major states of the Union. The press has been tamed, but not entirely crushed. And while Mussolini’s Italy had only Benedetto Croce to call it to account, Modi’s India still has many writers and intellectuals speaking out courageously in defence of the founding principles of the Republic, and in all the languages of the Republic too.
In The Pursuit of Italy, after describing how Mussolini consolidated his rule, Gilmour remarks: “Fascism’s appeal was blunted, however, by its failure to provide prosperity. Italians might be deceived into thinking they were well governed but they could not be deceived into thinking they were well off.” Mussolini failed in providing jobs and prosperity; whereas Modi has, in fact, done far worse on the economic front, his ill-thought and quixotic policies annulling much of the progress that the Indian economy had made in the three decades since liberalisation.
Millions of young men today fanatically follow Narendra Modi. The fate that awaits them, and us, is anticipated in what Benedetto Croce said with regard to the millions of young men who fanatically followed Mussolini. After the Italian dictator had died and his regime had finally fallen, Croce wrote sadly of “the treasury of moral energies that the oppressive regime misguided, exploited and at the end had betrayed”.
Benito Mussolini and his fascists thought they would rule Italy forever. Narendra Modi and the BJP think likewise. These fantasies of eternal rule will not come to fruition; but so long as the present regime remains in power, it will continue to extract a horrendous cost – in economic, political, social, and moral terms. Italy took decades to recover from the ravages of Mussolini and his party; India may take even longer to recover from the ravages of Modi and his party.
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