Interview with Sanjay Dixit
Interview with Pervez Hoodbhoy
Saturday, 2 January 2021
The backlash against colonialism holds lessons in guilt and gratitude
Descendants of conquerors and the conquered must move towards a universal account of history writes Mihir Bose in The FT
In the tsunami of words on the poisonous legacy of slavery and empire generated by the death of George Floyd, an African-American who was killed in Minneapolis in May by a white police officer, two stand out: “gratitude” and “guilt”.
Should descendants of those who built empires on the back of exploitation feel guilty for what their ancestors did? Or should the descendants of the colonised feel gratitude that their ancestors were conquered?
My wife is a descendant of the conquerors, having been born into the British Cecil family which has produced prime ministers and great political leaders. I am one of “midnight’s children”, born a few months before India won its freedom from British colonial rule in 1947. While I joke that she is a child of the conquerors and I of the conquered, I do not expect my wife to feel guilty for what her ancestors did. But I do reject the idea that I should be thankful that my ancestors were conquered.
That the conquered should feel gratitude was a view often expressed during the days of the British empire. It was not uncommon for the British to say that the Indians needed to be “civilised”. As Winston Churchill, who was then out of government and campaigning against self-rule for India, put it very bluntly in a speech in 1931, the vast majority of Indians “are primitive people”.
Today, some historians imply I should be grateful for colonial legacies. Niall Ferguson, in his book Empire: How Britain Made the Modern World makes the argument that the empire “enhanced global welfare — in other words was a good thing”. He adds that it brought free markets and the rule of law. Other individuals are still as blunt as Churchill.
While I do not think my ancestors needed to be civilised by Europeans, they had many faults. My family are high-caste Hindus and there is no denying the abominable way these upper echelons of society treated the so-called untouchable castes, now known as Dalits. My abiding childhood memory is of my mother giving the sweeper woman tea and sweets, thinking she was being generous, while telling us that nobody should ever use her cup and plate.
Years ago, I visited Bangladesh, where my family is from. While very hospitable, the Muslims there made it clear they had not forgotten the dreadful way my rich Hindu ancestors had treated theirs. I know I need to acknowledge such historical truths, but I do not see why I should feel personally guilty.
The same applies to my wife. For example, on a family trip (including nephews and nieces) to the National Portrait Gallery before the Covid-19 pandemic, we stopped before a portrait of Arthur Balfour, nephew of three-times prime minister Lord Salisbury and himself a prime minister. The potted history mentioned that, as foreign secretary, he was the author of the 1917 Balfour Declaration in support of “the establishment in Palestine of a national home for the Jewish people”.
I pointed out that, a few months before, he had warned the British cabinet in a memo, that Indians would not be able to manage parliamentary democracy because they were not of the same race as Europeans. Even education would not bridge the racial divide. Balfour and his fellow cabinet ministers, presided over by Lloyd George, did not dispute Lord Curzon’s estimate that it would take Indians 500 years to learn to rule themselves. I said this not to make my wife’s family feel guilty, but to highlight that the history we have been taught is far from the complete picture.
This is what we need to tackle: call it the “Machiavelli problem”. More than 1,500 years before the Renaissance diplomat and philosopher wrote his book on statecraft, The Prince, an Indian called Chanakya wrote a treatise on the same subject called Arthashastra, as a handbook for a great king.
Niccolò Machiavelli may or may not have known about its existence but it cannot be disputed that, while Machiavelli was merely a theoretician, Chanakya helped build one of India’s greatest empires. Indian schoolboys know of both men and the diplomatic enclave in New Delhi is called Chanakyapuri. Yet Chanakya is often described as the Indian Machiavelli and he is hardly known outside India.
The result of imbalances like these is that descendants of the conquered, like me, always carry two bags: one containing the conqueror’s history, the other that of the conquered. Descendants of the conquerors, like my wife, only have to worry about the first bag.
Unless we can equalise these historical weights and start to move towards a truly universal history, the past will continue to divide us and we shall always be wrestling with the problems of guilt and gratitude.
Friday, 1 January 2021
What we have learnt about the limits of science
Thiago Carvalho in The FT
Some years ago, on New Year’s Day, my wife and I noticed that our son, not yet two months old, was struggling to breathe — a belaboured, wheezing effort was all he could manage — and we decided to face the holiday emergency room crush. After assessing his blood oxygen levels, the pediatrician said: “Pack a bag, you will be here all week. He will get worse. Then he will get better.”
Our son had contracted something called respiratory syncytial virus, and it was replicating in his lungs. In a scenario similar to Covid-19, most healthy adults infected with RSV will experience a mild cold, or no symptoms at all. However, some unfortunate infants who contract RSV may suffer a devastating pulmonary infection. For those kids, there are no drugs available that can reliably stop, or even slow down RSV’s relentless replication in the lungs.
Instead, according to Mustafa Khokha, a pediatric critical care professor at Yale University, doctors first give oxygen and then if the child does not improve, there follows a series of progressively more aggressive procedures. “That’s all supportive therapy for the body to recover, as opposed to treatment against the virus itself,” says Khokha. Outstanding supportive care was what our son received, and the week unfolded exactly as his pediatrician predicted. (It was still the worst week of my life.)
For all the progress we have seen in 2020, a patient brought to the emergency room with severe Covid-19 will essentially receive the same kind of supportive care our son did — treatment to help the body endure a viral assault, but not effectively targeting the virus itself. The main difference will be the uncertain outcome — there will be no comforting, near-certain “he will get better” from the attending physician.
Contrast that story with a different one. On a Tuesday morning in early December, in the English city of Coventry, Margaret Keenan, just a few days shy of her 91st birthday, became the first person in the world to receive the BioNTech/Pfizer Covid-19 vaccine outside of a clinical trial. The pace of progress was astonishing. It was less than a year since, in the closing moments of 2019, Chinese health authorities alerted the World Health Organization to an outbreak of a pneumonia of unknown cause in Hubei province.
The Covid-19 pandemic has given us an accelerated tutorial on the promise and the limits of science. With vaccines, testing, epidemiological surveillance, we know where we are going, and we have a good idea how to get there. These are essentially challenges of technological development, reliant now on adequate resources and personnel and tweaking of regulatory frameworks. For other scientific challenges, though, there may be no gas pedal to step on — these include the prickly problems of arresting acute viral infection, or understanding how the virus and the host interact to produce disease. Science, as Nobel Prize-winning immunologist Peter Medawar put it, is the art of the soluble.
In March, when, incredibly, the first human vaccine trials for Covid-19 were kicking off in Seattle, the WHO launched an ambitious clinical trial to try to identify existing pharmaceuticals that could show some benefit against Sars-Cov-2. In October, the WHO declared that all four arms of its Solidarity trial had essentially failed. The search for effective antiviral drugs has not lacked resources or researchers, but in contrast to the vaccine victories, it has yet to produce a single clear success story. The concentrated efforts of many of the world’s most capable scientists, relying on ample public support and private investment, are sometimes not enough to crack a problem.
Perhaps nothing exemplifies this more clearly than what followed Richard Nixon’s signing of the National Cancer Act on December 23 1971. The act was cautiously phrased, but January’s State of the Union address declared an all-out war on cancer: “The time has come in America when the same kind of concentrated effort that split the atom and took man to the moon should be turned toward conquering this dread disease.” The war on cancer would funnel almost $1.6bn to cancer labs over the next three years, and fuel expectations that a cure for the disease would be found before the end of the decade. Curing cancer remains, of course, an elusive target. In 2016, then vice-president Joe Biden presented the report of his own Cancer Moonshot task force.
The success of the Apollo program planted the Moonshot analogy in the science policy lexicon. Some grand challenges in biology could properly be considered “moonshots”. The Human Genome Project was one example. Like the race to the Moon, it had a clear finish line: to produce a draft with the precise sequence of genetic letters in the 23 pairs of human chromosomes. This was, like the propulsion problems solved by Nasa en route to the Moon, a matter of developing and perfecting technology — technology that later would allow us to have a genetic portrait of the cause of Covid-19 in under two weeks.
The cancer context was rather different. In the countdown to the war on cancer, Sol Spiegelman, the director of Columbia University’s Institute of Cancer Research, quipped that “an all-out effort at this time [to find a cure for cancer] would be like trying to land a man on the Moon without knowing Newton’s laws of gravity.” And so it proved.
We now know quite a lot about how the body resists viral infections, certainly much more than we knew about the biology of cancer in 1971. Over 60 years ago, at London’s National Institute for Medical Research, Alick Isaacs and Jean Lindemann exposed fragments of chicken egg membranes to heat-inactivated influenza A virus. In a matter of hours, the liquid from these cultures acquired the capacity to interfere with the growth of not only influenza A, but other, unrelated viruses, as well. Isaacs and Lindemann named their factor interferon. Interferons are fleet-footed messengers produced and released by cells almost immediately upon viral infection. These molecules warn other host cells to ready themselves to resist a viral onslaught.
Viruses rely on hijacking the normal cellular machinery to make more copies of themselves and interferons interfere with almost all stages of the process: from making it more difficult for the virus to enter cells, to slowing down the cellular protein factories required to make the viral capsule, to reducing the export of newly made viral particles. Interferons are now part of our pharmaceutical armoury for diseases as diverse as multiple sclerosis and cancer, as well as hepatitis C and other chronic viral infections.
Multiple interferon-based strategies have been tried in the pandemic, from intravenous administration to nebulising the molecule so that the patient inhales an antiviral mist directly into the lungs. The results have been inconclusive. “A lot of it has to do with the timing,” says Yale immunologist Akiko Iwasaki, “the only stage that recombinant interferon might be effective is pre-exposure or early post-exposure, and it’s really hard to catch it for this virus, because everyone is pretty much asymptomatic at that time.”
This year’s scramble for effective antiviral drugs led to a revival of other failed approaches. In 2016, a team of researchers from the United States Army Medical Research Institute of Infectious Diseases in Frederick, Maryland, and the biotech company Gilead Sciences reported that the molecule GS-5734 protected Rhesus monkeys from being infected with the Ebola virus. GS-5734, or as it is more familiarly known now, remdesivir unfortunately failed in clinical trials. This was a bona fide antiviral, backed up by demonstrations that the drug efficiently blocked an enzyme used by viruses to copy their genome. Ebola was already remdesivir’s third dead-end: Gilead had previously tested GS-5734 against hepatitis C and RSV, and the results were disappointing.
In late April, National Institute of Allergy and Infectious Diseases director Anthony Fauci, a member of the White House coronavirus task force, proclaimed that the US remdesivir trials had established “a new standard of care” for Covid-19 patients. As has happened repeatedly during the Covid-19 crisis, the data backing this claim not been made public, nor had it, at the time, been peer-reviewed.
Fauci explained that the drug had no significant effect on mortality, but claimed that remdesivir reduced hospitalisation times by about 30 per cent. It was the first piece of good news in a spring marked by global lockdowns. Unfortunately, results from a large-scale trial run by the WHO released in the autumn failed to support even the limited claims of the US study (Gilead has challenged the study’s design), and the WHO currently advises against giving remdesivir to Covid-19 patients.
For those who do not naturally control Sars-Cov-2 infection, or who have not been vaccinated, the failure to repurpose or create effective antiviral agents leaves supportive care. We are only beginning to understand the interplay of this new virus and human hosts. It is also a protean affliction, as sex, age, and pre-existing conditions all affect outcomes. The single clearest way to reduce mortality remains the dexamethasone treatment for patients requiring supplemental oxygen initially reported in the UK Recovery trial. It is not a direct attack on the virus, but a way to ameliorate the effects of infection and the immune response to it on the human body. Dexamethasone is, in a very real sense, supportive care.
So what have we learned about the limits of science? First, we were reminded that spectacular successes are built on a foundation of decades of basic research. Even the novel, first-in-class vaccines are at the end of a long road. It was slow-going to get to warp speed. We learned that there are no shortcuts to deciphering how a new virus makes us sick (and kills us) and that there is no ignoring the importance of human diversity for cracking this code. Diabetes, obesity, hypertension — we are still finding our way through a comorbidity labyrinth. Most of all, we have learned an old lesson again: science is the art of the soluble. No amount of resources and personnel, no Manhattan Project, can ensure that science will solve a problem in the absence of a well-stocked toolbox and a solid, painstakingly built theoretical framework.
South Korea recorded its first Covid-19 case on January 20. Eleven days later, Spain confirmed its first infection: a German tourist in the Canary Islands. Spain and South Korea have similar populations of about 50m people. As of publication of this piece, South Korea has had 879 deaths, while Spain reports over 50,000. The west missed its moment. Efficient testing, tracing and containment of Covid-19 was a soluble technological and organisational problem. Here too, we can hear echoes of the war on cancer. The biggest single reduction in cancer mortality did not come from a miracle drug. It was the drop in lung cancer deaths, due to what we could call the war on tobacco. Perhaps Dr Spiegelman might concede that even if we don’t have a law of gravity, we do have a first law of medicine: always start with prevention.
Covid-19 has pushed science to its limits and, in some cases, sharply outlined its borders. This century’s first pandemic finds humanity, with its transport hubs and supply chains, more vulnerable to a new pathogen. But virology, immunology, critical care medicine and epidemiology, to name a few, have progressed immeasurably since 1918. Unfortunately, in a public health emergency, the best science must be used to inform the best policies. In the seasonal spirit of charity, let us say that that has not always been the case in our pandemic year.
Thursday, 31 December 2020
Hope for Britain after Brexit
Those who predict economic Armageddon ignore the reality. The status quo wasn’t working – now there’s an opportunity for change writes Larry Elliott in The Guardian
‘The mass exodus of banks and other financial institutions from the City of London, predicted since June 2016, has not materialised.’ View over the Thames to the City. Photograph: Niklas Halle’n/AFP/Getty Images
So this is it. Forty-eight years after Britain joined what was then the European Economic Community, the fasten seatbelt signs are switched on and the cabin lights have been dimmed. It is time for departure.
Many in the UK, especially on the left, are in despair that this moment has arrived. For them, this can never be the journey to somewhere better: instead it is the equivalent of the last helicopter leaving the roof of the US embassy in Saigon in 1975.
The lefties who voted for Brexit see it differently. For them (us, actually, because I am one of them), the vote to leave was historically progressive. It marked the rejection of a status quo that was only delivering for the better off by those who demanded their voice was heard. Far from being a reactionary spasm, Brexit was democracy in action.
Now the UK has a choice. It can continue to mourn or it can take advantage of the opportunities that Brexit has provided. For a number of reasons, it makes sense to adopt the latter course.
For a start, it is clear that the UK has deep, structural economic problems despite – and in some cases because of – almost half a century of EU membership. Since 1973, the manufacturing base has shrivelled, the trade balance has been in permanent deficit, and the north-south divide has widened. Free movement of labour has helped entrench Britain’s reputation as a low-investment, low-productivity economy. Brexit means that those farmers who want their fruit harvested will now have to do things that the left ought to want: pay higher wages or invest in new machinery.
The part of the economy that has done best out of EU membership has been the bit that needed least help: the City of London. Each country in the EU has tended to specialise: the Germans do the high-quality manufactured goods; France does the food and drink; the UK does the money. Yet the mass exodus of banks and other financial institutions that has been predicted since June 2016 has not materialised, because London is a global as well as a European financial centre. The City will continue to thrive.
If there are problems with the UK economy, it is equally obvious there are big problems with the EU as well: slow growth, high levels of unemployment, a rapidly ageing population. The single currency – which Britain fortunately never joined – has failed to deliver the promised benefits. Instead of convergence between member states there has been divergence; instead of closing the gap in living standards with the US, the eurozone nations have fallen further behind.
In their heads, those predicting Armageddon for the UK imagine the EU to still be Germany’s miracle economy – the Wirtschaftswunder – of the 1960s. The reality is somewhat different. It is Italy, where living standards are no higher than they were when the single currency was introduced two decades ago. It is Greece, forced to accept ideologically motivated austerity in return for financial support. The four freedoms of the single market – no barriers to the movement of goods, services, people and capital – are actually the four pillars of neoliberalism.
The Covid-19 crisis has demonstrated the importance of nation states and the limitations of the EU. Britain’s economic response to the pandemic was speedy and coordinated: the Bank of England cut interest rates and boosted the money supply while the Treasury pumped billions into the NHS and the furlough scheme. It has taken months and months of wrangling for the eurozone to come up with the same sort of joined-up approach.
Earlier in the year, there was criticism of the government when it decided to opt out of the EU vaccine procurement programme, but this now looks to have been a smart move. Brussels has been slow to place orders for drugs that are effective, in part because it has bowed to internal political pressure to spread the budget around member states – and its regulator has been slower to give approval for treatments. Big does not always mean better.
Leaving the EU means UK governments no longer have anywhere to hide. They have economic levers they can pull – procurement, tax, ownership, regulation, investment in infrastructure, subsidies for new industries, trade policy – and they will come under pressure to use them.
Many on the remainer left accept the EU has its faults, but they fear that Brexit will be the start of something worse: slash and burn deregulation that will make Britain a nastier place to live.
This, though, assumes that Britain will have rightwing governments in perpetuity. It used to be the left who welcomed change and the right that wanted things to remain the same. The inability to envisage what a progressive government could do with Brexit represents a political role reversal and a colossal loss of nerve.
So this is it. Forty-eight years after Britain joined what was then the European Economic Community, the fasten seatbelt signs are switched on and the cabin lights have been dimmed. It is time for departure.
Many in the UK, especially on the left, are in despair that this moment has arrived. For them, this can never be the journey to somewhere better: instead it is the equivalent of the last helicopter leaving the roof of the US embassy in Saigon in 1975.
The lefties who voted for Brexit see it differently. For them (us, actually, because I am one of them), the vote to leave was historically progressive. It marked the rejection of a status quo that was only delivering for the better off by those who demanded their voice was heard. Far from being a reactionary spasm, Brexit was democracy in action.
Now the UK has a choice. It can continue to mourn or it can take advantage of the opportunities that Brexit has provided. For a number of reasons, it makes sense to adopt the latter course.
For a start, it is clear that the UK has deep, structural economic problems despite – and in some cases because of – almost half a century of EU membership. Since 1973, the manufacturing base has shrivelled, the trade balance has been in permanent deficit, and the north-south divide has widened. Free movement of labour has helped entrench Britain’s reputation as a low-investment, low-productivity economy. Brexit means that those farmers who want their fruit harvested will now have to do things that the left ought to want: pay higher wages or invest in new machinery.
The part of the economy that has done best out of EU membership has been the bit that needed least help: the City of London. Each country in the EU has tended to specialise: the Germans do the high-quality manufactured goods; France does the food and drink; the UK does the money. Yet the mass exodus of banks and other financial institutions that has been predicted since June 2016 has not materialised, because London is a global as well as a European financial centre. The City will continue to thrive.
If there are problems with the UK economy, it is equally obvious there are big problems with the EU as well: slow growth, high levels of unemployment, a rapidly ageing population. The single currency – which Britain fortunately never joined – has failed to deliver the promised benefits. Instead of convergence between member states there has been divergence; instead of closing the gap in living standards with the US, the eurozone nations have fallen further behind.
In their heads, those predicting Armageddon for the UK imagine the EU to still be Germany’s miracle economy – the Wirtschaftswunder – of the 1960s. The reality is somewhat different. It is Italy, where living standards are no higher than they were when the single currency was introduced two decades ago. It is Greece, forced to accept ideologically motivated austerity in return for financial support. The four freedoms of the single market – no barriers to the movement of goods, services, people and capital – are actually the four pillars of neoliberalism.
The Covid-19 crisis has demonstrated the importance of nation states and the limitations of the EU. Britain’s economic response to the pandemic was speedy and coordinated: the Bank of England cut interest rates and boosted the money supply while the Treasury pumped billions into the NHS and the furlough scheme. It has taken months and months of wrangling for the eurozone to come up with the same sort of joined-up approach.
Earlier in the year, there was criticism of the government when it decided to opt out of the EU vaccine procurement programme, but this now looks to have been a smart move. Brussels has been slow to place orders for drugs that are effective, in part because it has bowed to internal political pressure to spread the budget around member states – and its regulator has been slower to give approval for treatments. Big does not always mean better.
Leaving the EU means UK governments no longer have anywhere to hide. They have economic levers they can pull – procurement, tax, ownership, regulation, investment in infrastructure, subsidies for new industries, trade policy – and they will come under pressure to use them.
Many on the remainer left accept the EU has its faults, but they fear that Brexit will be the start of something worse: slash and burn deregulation that will make Britain a nastier place to live.
This, though, assumes that Britain will have rightwing governments in perpetuity. It used to be the left who welcomed change and the right that wanted things to remain the same. The inability to envisage what a progressive government could do with Brexit represents a political role reversal and a colossal loss of nerve.
Monday, 28 December 2020
Britain out of the EU: a treasure island for rentiers
There’s no sign that ministers will use the twin shocks of the pandemic and Brexit to fix a broken system that is failing too many people opine the editors of The Guardian
Windfall profits
Perhaps the most penetrating X-ray of this phenomenon today is by Brett Christophers in his book Rentier Capitalism. The academic makes the case that Britain has become a treasure island for those seeking excess profits from state-sanctioned control of natural resources, property, financial assets and intellectual property. Rent, paid by renters to rentiers, is tied to the ownership or control of such assets, made scarce under conditions of limited or no competition.
Mr Christophers says that the first sign of this new order was when Britain struck black gold in the North Sea. He writes that MPs on the public accounts committee noted with incredulity in 1972 that “the first huge areas of the sea were leased to the companies as generously as though Britain were a gullible Sheikhdom”. After that, public assets were sold off cheaply. The private sector ended up controlling lightly regulated monopolies in gas, water and electric supply, and public transport and telecoms. Customers lost out, overpaying for poor service. In a rentier’s paradise, windfall profits abound. Brazenly occupying the lowest moral ground was essential, as the housebuilder Persimmon proved by earning supersized state-backed help-to-buy profits long enough to hand out a £75m bonus to its boss.
The banks, which took this country to the brink of collapse a decade ago, are at the heart of a rentier state. France, Germany, Japan, the US all have banking sectors smaller than the UK. While banks earning rents have flourished, the households paying them – either directly as financial consumers, or indirectly as taxpayers of a debtor state or customers of debtor firms – have floundered.
The anger that such spivvery engenders is diffused politically by making voters complicit in the theft. The sell-off of council homes, says Mr Christophers, was a privatisation that gave many of those perhaps most inclined to kick against Thatcherism a personal stake in the project. Culturally, Brexit plays the same sort of role as the right to buy, insulating poorer leave voters from the idea that they will suffer from the resulting policies.
The prime minister understands that Covid can change Britain, but lacks modernising policies. He extols the virtues of free competition – both for itself and because such freedom, he reasons, will somehow liberate the spirit fluttering within a pre-Brexit Britain caged by coronavirus. He is no doubt betting that the disruption of leaving the EU will be lost in the roar of an economy taking off as an inoculated population returns to offices and shops.
Weakened regulations
The gap between rich and poor in the UK is at least as high today, academics calculate, as it was just before the start of the second world war. This is largely because the British state that once mediated the struggle between labour and capital has been taken over by rentiers. Weakening regulations, reducing the importance of fiscal policy and shredding social protections has corroded liberal democracy in which an increasingly influential wealthy few have been enjoying a free run. Ultimately, rentiers want to increase what the economist Michał Kalecki called the “degree of monopoly” in an economy. This allows them to limit the ability of workers, consumers and regulators to influence the markup of selling prices over costs and to defend the share of wages in output.
The EU says its labour, environment and customer protections are a floor, not a ceiling, and that they can’t be traded away for frictionless market access. If we had stayed in the club, our ability to concentrate profits for monopolists would have been stymied in future trade deals negotiated by Brussels and open to MEPs’ scrutiny. Outside the EU, Mr Johnson can barter away such regulations – without parliamentary oversight – and scrap safeguards in new technology for higher monopoly profits. Karl Marx wrote in The Eighteenth Brumaire of Louis Bonaparte in 1852 that “the Tories in England long fancied that they were in raptures about royalty, the church and the beauties of the ancient constitution, until a time of trial tore from them the confession that they were only in raptures about rent”. His assessment of early 19th-century Tories applies with unerring accuracy to today’s Conservatives.
Mr Christophers’ insight is that the Tories under Mr Johnson are a party of – and for – rentiers, much more than the interests of productive capital. This explains why, after 2016, the Tory party embraced Brexit and shrugged off productive capital’s concerns about leaving the EU. It will be to the great detriment of this country if the pandemic permitted Mr Johnson to combine present-day fears with a yearning for hopeful change to persuade the average person to vote against their interests in the future. But history often repeats itself first as tragedy, then as farce.
‘Culturally, Brexit plays the same sort of role as the right to buy, insulating poorer leave voters from the idea that they will suffer from the resulting policies.’ Photograph: Christopher Furlong/Getty Images
When the UK entered the coronavirus age in March, state resources and collective commitment were mobilised on a scale not seen since the second world war. Decades ago, Britain had revealed itself, thanks in part to being able to marshal the industrial might of the empire, to be a formidable world power. Its economy was energised with breakthroughs in radar, atomic power and medicine.
Although the story of the pandemic has not yet ended, there appears to be no such transformation in sight under Boris Johnson. Rather depressingly, familiar trends of greed, incompetence and cronyism are reasserting themselves. This is bad news for an economy where there has been a collapse of socially useful innovation. Britain’s lack of hi-tech manufacturing capabilities, notably in medical diagnostic testing, was cruelly exposed by the pandemic.
This country has become more of a procurer than a producer of technology. But it is a remarkably inefficient one – despite an extraordinarily high percentage of lawyers and accountants in the working population. Connections seem to matter more than inventions. How else to explain why, in the desperate scramble to procure personal protective equipment, ventilators and coronavirus tests, billions of pounds of contracts have gone to companies either run by friends or supporters – even neighbours – of Conservative politicians, or with no prior expertise.
History is not short of examples where political insiders were successful in extracting virtually all the surplus that the economy created. Such influential interests moulded politics to enlarge their share of the pie. Greed was limited only by the need to let the producers survive. The shock of war, revolution, famine or plague provides an opportunity to fix a broken society. But if, post-pandemic, UK politicians care less about reform than the retention of power, they will fail to restrain the grasping enrichment that undermines democracy itself.
When the UK entered the coronavirus age in March, state resources and collective commitment were mobilised on a scale not seen since the second world war. Decades ago, Britain had revealed itself, thanks in part to being able to marshal the industrial might of the empire, to be a formidable world power. Its economy was energised with breakthroughs in radar, atomic power and medicine.
Although the story of the pandemic has not yet ended, there appears to be no such transformation in sight under Boris Johnson. Rather depressingly, familiar trends of greed, incompetence and cronyism are reasserting themselves. This is bad news for an economy where there has been a collapse of socially useful innovation. Britain’s lack of hi-tech manufacturing capabilities, notably in medical diagnostic testing, was cruelly exposed by the pandemic.
This country has become more of a procurer than a producer of technology. But it is a remarkably inefficient one – despite an extraordinarily high percentage of lawyers and accountants in the working population. Connections seem to matter more than inventions. How else to explain why, in the desperate scramble to procure personal protective equipment, ventilators and coronavirus tests, billions of pounds of contracts have gone to companies either run by friends or supporters – even neighbours – of Conservative politicians, or with no prior expertise.
History is not short of examples where political insiders were successful in extracting virtually all the surplus that the economy created. Such influential interests moulded politics to enlarge their share of the pie. Greed was limited only by the need to let the producers survive. The shock of war, revolution, famine or plague provides an opportunity to fix a broken society. But if, post-pandemic, UK politicians care less about reform than the retention of power, they will fail to restrain the grasping enrichment that undermines democracy itself.
Windfall profits
Perhaps the most penetrating X-ray of this phenomenon today is by Brett Christophers in his book Rentier Capitalism. The academic makes the case that Britain has become a treasure island for those seeking excess profits from state-sanctioned control of natural resources, property, financial assets and intellectual property. Rent, paid by renters to rentiers, is tied to the ownership or control of such assets, made scarce under conditions of limited or no competition.
Mr Christophers says that the first sign of this new order was when Britain struck black gold in the North Sea. He writes that MPs on the public accounts committee noted with incredulity in 1972 that “the first huge areas of the sea were leased to the companies as generously as though Britain were a gullible Sheikhdom”. After that, public assets were sold off cheaply. The private sector ended up controlling lightly regulated monopolies in gas, water and electric supply, and public transport and telecoms. Customers lost out, overpaying for poor service. In a rentier’s paradise, windfall profits abound. Brazenly occupying the lowest moral ground was essential, as the housebuilder Persimmon proved by earning supersized state-backed help-to-buy profits long enough to hand out a £75m bonus to its boss.
The banks, which took this country to the brink of collapse a decade ago, are at the heart of a rentier state. France, Germany, Japan, the US all have banking sectors smaller than the UK. While banks earning rents have flourished, the households paying them – either directly as financial consumers, or indirectly as taxpayers of a debtor state or customers of debtor firms – have floundered.
The anger that such spivvery engenders is diffused politically by making voters complicit in the theft. The sell-off of council homes, says Mr Christophers, was a privatisation that gave many of those perhaps most inclined to kick against Thatcherism a personal stake in the project. Culturally, Brexit plays the same sort of role as the right to buy, insulating poorer leave voters from the idea that they will suffer from the resulting policies.
The prime minister understands that Covid can change Britain, but lacks modernising policies. He extols the virtues of free competition – both for itself and because such freedom, he reasons, will somehow liberate the spirit fluttering within a pre-Brexit Britain caged by coronavirus. He is no doubt betting that the disruption of leaving the EU will be lost in the roar of an economy taking off as an inoculated population returns to offices and shops.
Weakened regulations
The gap between rich and poor in the UK is at least as high today, academics calculate, as it was just before the start of the second world war. This is largely because the British state that once mediated the struggle between labour and capital has been taken over by rentiers. Weakening regulations, reducing the importance of fiscal policy and shredding social protections has corroded liberal democracy in which an increasingly influential wealthy few have been enjoying a free run. Ultimately, rentiers want to increase what the economist Michał Kalecki called the “degree of monopoly” in an economy. This allows them to limit the ability of workers, consumers and regulators to influence the markup of selling prices over costs and to defend the share of wages in output.
The EU says its labour, environment and customer protections are a floor, not a ceiling, and that they can’t be traded away for frictionless market access. If we had stayed in the club, our ability to concentrate profits for monopolists would have been stymied in future trade deals negotiated by Brussels and open to MEPs’ scrutiny. Outside the EU, Mr Johnson can barter away such regulations – without parliamentary oversight – and scrap safeguards in new technology for higher monopoly profits. Karl Marx wrote in The Eighteenth Brumaire of Louis Bonaparte in 1852 that “the Tories in England long fancied that they were in raptures about royalty, the church and the beauties of the ancient constitution, until a time of trial tore from them the confession that they were only in raptures about rent”. His assessment of early 19th-century Tories applies with unerring accuracy to today’s Conservatives.
Mr Christophers’ insight is that the Tories under Mr Johnson are a party of – and for – rentiers, much more than the interests of productive capital. This explains why, after 2016, the Tory party embraced Brexit and shrugged off productive capital’s concerns about leaving the EU. It will be to the great detriment of this country if the pandemic permitted Mr Johnson to combine present-day fears with a yearning for hopeful change to persuade the average person to vote against their interests in the future. But history often repeats itself first as tragedy, then as farce.
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