An Iconoclast to lead the Central Bank

We need an iconoclast to lead the Bank of England

Central bankers are acting like allied commanders at the Battle of the Somme. Adair Turner would be a breath of fresh air

• 
• • Simon Jenkins
  • The Guardian, Tuesday 9 October 2012 21.00 BST

Adair Turner's most celebrated soundbite, in 2009, was that British banking is over-large, and much of it is overpaid and ‘socially useless'. Illustration: Belle Mellor

How to wreck Adair Turner's chances of becoming next governor of the Bank of England? Answer, name him as the best candidate fit for the job. For the first time in modern history it really matters who is governor. It matters that the person should have a grasp not just of the shambles that is modern banking but of the rigor mortis now afflicting Britain's economic managers. They desperately need someone with the guts for new ideas.

Turner has been a banker and an economist, two professions most tainted by the past five years. Bankers are tainted by venality, economists by intellectual failure. No one involved is free of guilt. No one has gone to jail, and only a few high-profile bankers have even suffered. What matters is have they learned?

Today the IMF predicted that Britain has relapsed into recession and should "smooth its planning adjustment over 2013 and beyond", jargon for "let up on austerity". Whether such IMF forecasts merit more credibility than the wildly over-optimistic ones last year, I cannot tell. Certainly the blunders have been serious. A cut of £1 in public spending apparently does not lead to 50p less economic activity but at least £1.30p less. The "multiplier effect" of deficit reduction is thus a downward deflationary spiral. This is not ideology, but the mathematics of catastrophe.

Those who warned three years ago that the risk of double-dip recession was so high as to require a plan B were right. The Treasury, the Bank of England and the IMF were wrong. The fact that the Treasury has had to propose six ineffective business lending packages in a row, and the Bank has had to pretend to pump £375bn "into the economy" is proof of that failure. I do not believe for a minute that George Osborne and his advisers, had they correctly predicted the recession, would be following the present policy. At least the IMF is now admitting its mistake.

Government and Bank economists are continuing to allow politicians to cop out of reflating demand for fear of a U-turn. Economists are like physicians in the days when they believed in leeches. They take no responsibility for gross errors that would get doctors struck off, and even transport officials suspended.

Turner is criticised as a dabbler and turncoat, a McKinsey consultant and a poor administrator. He was Tory, then SDP, then Blair courtier, an academic economist turned head of the CBI. He was a poacher turned regulator at the Financial Services Authority. He ran pensions and low-pay policy and is unceasingly iconoclastic and articulate. To adapt Ruskin, a hundred economists may look, but few can see. Turner can see. His opinions can be deduced from a torrent of outspokenness. His most celebrated soundbite, in 2009, was that British banking is over-large, and much of it is overpaid and "socially useless". As free markets mature, he says, insiders merely collude to "proliferate rent-extracting opportunities" – that is, make huge sums of money. They should be curbed.

Three of Turner's lectures, delivered in 2010 and now revised as "Economics after the Crisis", are eulogistically reviewed by Robert Skidelsky in the latest Times Literary Supplement. Turner maintains that economics has blown too much with the political wind. It has ordained that growth is in lock-step with social order and human happiness. It is not. He does not go the whole happiness agenda but nods vigorously in its direction. Nor do wider incentives yield fairness or evidence of contentment.

This does not seem leftwing – rather pragmatic. Increased leisure may be good yet impair growth. Market forces do not correctly price risk, as we have just seen in spades, but can spin off into an instability. The task of regulation, says Turner, is to curb upturns and minimise downturns, as Keynes ordered. It should have warned politicians against the debt bubbles and housing hysteria of the last decade.

Turner seeks to "reconstruct economics" not as anti-capitalist but, Skidelsky points out, as a challenge to "an unattainable market perfection" that can so clearly lead to periodic collapses and a huge cost to human welfare. There is a moral complexity to economics that is both necessary and difficult.

As for present policy, Turner seems to agree with the IMF that Britain has over-deflated its economy. In July he told the Bank's monetary policy committee that it faced a liquidity trap in which quantitative easing "was proving to have little impact on behaviour and on demand". Using the banks to stimulate the economy – the core of Treasury and Bank policy – was "ineffective". This amounted to saying that recession was now government-induced.

Turner's more private view is that Britain should consider whether debt should now be "monetised", financed by blatantly printing money rather than buying bank bonds and hoping this boosts demand. His is a version of the "helicopter" money advocated by JM Keynes and Milton Friedman. Turner points out that actually printing money – not pretending to as at present – would involve "no increase in government debt and therefore no increase in future debt servicing". It is pure inflation and needs careful handling, but just now it is like pouring oil on a seized engine. On the spectrum from plunging deflation or hyper-inflation, the risk of the former far outweighs the latter. At very least, this should be discussed.

Britain's central bankers are like allied commanders during the Somme, sticking blindly to a defunct strategy out of sheer familiarity. Turner's scepticism seems no more than prudent. In this context, a Bank governor steeped in the financial establishment but with an observant eye and a mind open to argument is more than a breath of fresh air. It is one thing that might jolt us out of the present mess.

Colonised and coloniser, empire's poison infects us all

Ideas that underpinned Britain's imperial project led not only to torture in Kenya, but war and catastrophe in Europe

• 
• • George Monbiot
  • The Guardian, Monday 8 October 2012 20.30 BST

'The ideology that led to Hitler's war and the Holocaust was developed by the colonial powers.' Illustration by Daniel Pudles

Over the gates of Auschwitz were the words "Work Makes You Free". Over the gates of the Solovetsky camp in Lenin's gulag: "Through Labour – Freedom!". Over the gates of the Ngenya detention camp, run by the British in Kenya: "Labour and Freedom". Dehumanisation appears to follow an almost inexorable course.

Last week three elderly Kenyans established the right to sue the British government for the torture that they suffered – castration, beating and rape – in the Kikuyu detention camps it ran in the 1950s.

Many tens of thousands were detained and tortured in the camps. I won't spare you the details: we have been sparing ourselves the details for far too long. Large numbers of men were castrated with pliers. Others were raped, sometimes with the use of knives, broken bottles, rifle barrels and scorpions. Women had similar instruments forced into their vaginas. The guards and officials sliced off ears and fingers, gouged out eyes, mutilated women's breasts with pliers, poured paraffin over people and set them alight. Untold thousands died.

The government's secret archive, revealed this April, shows that the attorney general, the colonial governor and the colonial secretary knew what was happening. The governor ensured that the perpetrators had legal immunity: including the British officers reported to him for roasting prisoners to death. In public the colonial secretary lied and kept lying.

Little distinguishes the British imperial project from any other. In all cases the purpose of empire was loot, land and labour. When people resisted (as some of the Kikuyu did during the Mau Mau rebellion), the response everywhere was the same: extreme and indiscriminate brutality, hidden from public view by distance and official lies.

Successive governments have sought to deny the Kikuyu justice: destroying most of the paperwork, lying about the existence of the rest, seeking to have the case dismissed on technicalities. Their handling of this issue, and the widespread British disavowal of what happened in Kenya, reflects the way this country has been brutalised by its colonial history. Empire did almost as much harm to the imperial nations as it did to their subject peoples.

In his book Exterminate All the Brutes, Sven Lindqvist shows how the ideology that led to Hitler's war and the Holocaust was developed by the colonial powers. Imperialism required an exculpatory myth. It was supplied, primarily, by British theorists.

In 1799 Charles White began the process of identifying Europeans as inherently superior to other peoples. By 1850 the disgraced anatomist Robert Knox had developed the theme into fully fledged racism. His book The Races of Man asserted that dark-skinned people were destined to be enslaved and then annihilated by the "lighter races". Dark meant almost everyone: "What a field of extermination lies before the Saxon, Celtic and Sarmatian races!"

Remarkable as it may sound, this view soon came to dominate British thought. In common with most of the political class, W Winwood Reade, Alfred Russell Wallace,Herbert Spencer, Frederick Farrar, Francis Galton, Benjamin Kidd and even Charles Darwin saw the extermination of dark-skinned people as an inevitable law of nature. Some of them argued that Europeans had a duty to speed it up: both to save the integrity of the species and to put the inferior "races" out of their misery.

These themes were picked up by German theorists. In 1893 Alexander Tille, drawing on British writers, claimed that "it is the right of the stronger race to annihilate the lower". In 1901 Friedrich Ratzel argued in Der Lebensraum that Germany had a right and duty, like Europeans in the Americas, to displace "primitive peoples". In Mein Kampf, Hitler explained that the German empire's eastward expansion would mirror the western and southern extension of British interests. He systematised and industrialised what imperial nations had been doing for five centuries. The scale was greater, the location different, the ideology broadly the same.

I believe that the brutalisation of empire also made the pointless slaughter of the first world war possible. A ruling class that had shut down its feelings to the extent that it could engineer a famine in India in the 1870s in which between 12 million and 29 million people died was capable of almost anything. Empire had tested not only the long-range weaponry that would be deployed in northern France, but also the ideas.

Nor have we wholly abandoned them. Commenting on the Kikuyu case in the Daily Mail, Max Hastings charged that the plaintiffs had come to London "to exploit our feeble-minded justice system". Hearing them "represents an exercise in state masochism". I suspect that if members of Hastings' club had been treated like the Kikuyu, he would be shouting from the rooftops for redress. But Kenyans remain, as colonial logic demanded, the other, bereft of the features and feelings that establish our common humanity.

So, in the eyes of much of the elite, do welfare recipients, "problem families", Muslims and asylum seekers. The process of dehumanisation, so necessary to the colonial project, turns inwards. Until this nation is prepared to recognise what happened and how it was justified, Britain, like the countries it occupied, will remain blighted by imperialism.

Robert Vadra - Rent Seeker or Entrepreneur?

Property empire was built on soft loans handed out in unusual circumstances, documents show

In February, as rumours of the ambitions of Congress president Sonia Gandhi’s son-in-law swirled amidst the heat and dust of the election campaign in Uttar Pradesh, her daughter Priyanka moved to scotch speculation about Robert Vadra’s possible political future.

“He’s a successful businessman,” the younger Ms. Gandhi said of her husband, “who is not interested in changing his occupation.”

Even though Mr. Vadra has increasingly emerged in the public eye, there has been little information on just how successful a businessman he is — and how his empire was built.

Last year, The Economic Times first wrote about his “low-key entry into the real estate business” with the help of DLF Ltd, India’s largest commercial property developer. And on Friday, Arvind Kejriwal and Prashant Bhushan of India Against Corruption (IAC) released documents which showed how Mr. Vadra has acquired land assets in and around the National Capital Region worth hundreds of crores of rupees, sometimes at prices below market value — funded by interest-free loans disbursed to him by DLF and other companies for no apparent reason.

Though the documents reveal no illegality or impropriety on the part of Mr. Vadra, they do raise the question of why DLF — which is a publicly traded company — would enter into multiple business transactions with him on terms that appear highly preferential. The company on Saturday issued a lengthypress release setting out its side of the story but questions of corporate governance remain and minority shareholders are likely to ask the company for the rationale behind its arrangement with Ms. Sonia Gandhi’s son-in-law and whether similar soft loans (or “advances” as DLF prefers to call them) and deals have been transacted with companies owned by other prominent individuals. The answer to the second question may help explain why a normally feisty Opposition has been remarkably silent on the DLF-Vadra connection since the story first broke in 2011.

In 1997, the year Mr. Vadra married Priyanka Gandhi, he incorporated his first, modest business — Artex, which dealt with brass handicrafts and fashion accessories. From 2007, there was a surge in his activities. Inside of a year, he founded five other ventures, spanning the real estate, hospitality and trading sectors.

Ms. Gandhi maintained a distance from these companies: in 2008, she dissociated herself from the sole business in which she was involved, aircraft charter firm Blue Breeze Trading.

From balance sheets and directors’ reports released by IAC and additional papers obtained by The Hindu, which relate to six group companies, it is clear that Mr. Vadra’s rise was meteoric. In 2007-2008, his companies started out with promoter funds of just Rs. 50 lakh.

However, the companies succeeded in acquiring 29 high-value properties by 2010, armed with loans and advances of Rs. 80 crore from DLF,… as well as Bedarwals Infra Projects, Nikhil International and VRS Infrastructure. These included a Rs. 31.7 crore acquisition of a 50 per cent share of Saket Courtyard by 2010, armed with loans and advances of Rs. 80 crore from DLF, as well as Bedarwals Infra Projects, Nikhil International and VRS Infrastructure.

These included a Rs. 31.7 crore acquisition of a 50 per cent share of Saket Courtyard Hospitality, which owns the 114-bed Hilton Garden Hotel in New Delhi; a 10,000 square foot penthouse, number B1115, at the DLF Aralias complex for Rs 89.41 lakh; 7 apartments in DLF Magnolia for Rs. 5.2 crore; apartments for Rs. 5.06 crore at DLF Capital Greens; and a DLF-owned plot in Delhi’s ultra-posh Greater Kailash II area for Rs. 1.21 crore. Though DLF’s press release said some of these prices were “completely incorrect,” the investment numbers are all stated in the balance sheets filed by Mr. Vadra’s companies with the Registrar of Companies.

Then, at the end of 2010, Mr. Vadra’s companies also picked up a bouquet of rural properties: 160.62 acres of agricultural land in Bikaner for Rs. 1.02 crore, and Rs. 2.43 crore for an additional 5 parcels of land of unknown acreage; land at Manesar, on Delhi’s fringes, for Rs. 15.38 crore; land at Palwal for Rs. 42 lakh, land at Hayyatpur, in Gurgaon, for roughly Rs. 4 crore; land at Hasanpur for Rs. 76.07 lakh; land at Mewat for Rs. 95.42 lakh; unidentified agricultural land for Rs. 69.09 lakh; and two ‘other real estate bookings’ worth Rs. 9 lakh.

From just Rs. 7.95 crore in fiscal 2008, Vadra’s fixed assets and investments grew to Rs 17.18 crore in fiscal 2009, jumping a staggering 350 per cent in a single year to Rs 60.53 crore in fiscal 2010, the year in which most of these properties were acquired with promoter funds of just Rs. 50 lakh along with interest of Rs. 255.46 lakh earned on advances and loans and zero group activity or profitability.

Despite the high market value of these listed assets (properties), though, the declared investment portfolio in Mr. Vadra’s balance sheets remained a meagre Rs. 71 crore at the end of fiscal 2010 with accumulated group losses of Rs. 3 crore.

Mr. Vadra’s companies did not respond to e-mails sent by The Hindu seeking clarifications on the details of these transactions. In particular, it remains unclear why DLF and other major corporations would have made him large loans, since this is not in the nature of their business. Nor did Mr. Vadra’s companies have any apparent prior specialisation in real estate business.

Financial wizardry

The financial information available from the balance sheets and directors’ reports of Mr. Vadra’s companies — Sky Light Hospitality, Sky Light Realty, Blue Breeze Trading, Artex, Real Earth Estates and North India IT Parks — raise hard questions about what business it is they actually do, and how this business is conducted.

Each of the companies has 268, Sukhdev Vihar, New Delhi, as its common address, and Mr. Vadra and his mother Maureen Vadra as directors. Mr. Vadra, the documents show, receives remuneration of Rs. 60 lakh per annum from just one company, Sky Light Realty. The payment, the company’s auditor states is “remuneration in excess of the limit prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975.”

There are no other employee costs in the books, either to his mother or to others. However, in the documents, both directors “place on record their deep sense of appreciation for the committed services of executives, staff and workers of the company.”

Strangely, while assets balloon in each subsequent balance sheet, there is no account of the corresponding enhancement of visible business activity. For example, the balance sheets raise a current liability of Rs. 50 crore against the Manesar land, though it was registered for just Rs.15.38 crore in the same financial year, defying all commercial and financial prudence and raising doubts about whether this was an income rather than a current liability.

A senior chartered accountant told The Hindu on condition of anonymity, given the individuals involved, that masking incomes as loans/current liabilities in this manner is an unorthodox accounting device. “Using short term funding of this kind to create long-term assets defies financial prudence as it constitutes a high business risk, unless they are not really ‘current liabilities’ and are not payable in the short term, which means they are nothing but incomes which have been disguised,” he said. Vadra’s auditors consistently overlook this in all six firms, while accounting firm Khurana & Khurana in its Auditors Report for Real Earth Estates Pvt. Ltd. for the year 2010, actually opts to gloss over this by stating: “Based on the information and explanation given to and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on short term basis which have been used for long term investment.”

The auditor’s accounting rigor comes into further question with its statement that according to the information and explanations given to us, the company has, during the year, not granted any loans, secured or unsecured to companies, firm or other parties covered in the register maintained under section 31 of the Companies Act 1956, excepting the advances under business obligation accordingly paragraphs 4 (iii) (a) (b) (c) and (d) of the order are not applicable. However, the balance sheet shows loans and advances of Rs 2.89 crore for the company in 2010.

Many such loans, which reflect as total current liability of Rs. 72 crore in the accounts, are invested in long-term assets like land. Curiously, no one appears to be pressing for the return of these loans — which are, according to the documents, interest-free.

Additionally, all of Mr. Vadra’s companies show interest income from fixed deposits, claiming tax deducted at source for this interest without accounting for the fixed deposits themselves in the balance sheets. The six companies’ profitability, which grew from zero in 2007-8 to Rs. 20.94 lakh in 2008-9 to Rs. 255.46 lakh in 2009-10, was not from any business activity in these companies but purely from interest on 23 elusive fixed deposits amounting to roughly Rs. 5 crore.

There are other unexplained gaps in the financial information. As of March 31, 2010, the group profit and loss account shows that only Sky Light Realty made a profit, and that too in one single year. Yet, while the others show losses, they continue to make investments. This profit of Rs. 244.98 lakh was despite a complete absence of business activity or liquidation/reduction of fixed assets, investments or other bookings. However, the accumulated losses of Rs. 3 crore from the other 5 firms in the RV Group’s 2010 balance sheet wipe out Vadra’s capital and reserves, raising questions about his ability to buy so many high value properties with zero capital.

DLF’s fortunes

Perhaps the key to the relationship could lie in DLF’s troubled fortunes since 2008 — the very time its dealings with Mr. Vadra acquired significant scale. According to a March 1, 2012 report by the respected Veritas Investment Research Corporation, DLF Ltd is an organisation under duress, with its management scrambling to consummate assets sales, rationalize its land bank and divest non-core operations.

Since a May, 2007 Initial Public Offering, which sold at Rs. 525 per share, the stock price declined by 46 per cent in March 2012 compared to a roughly 30 per cent gain in the Sensex over the same period with the stock presently trading at Rs. 241.80, a steep 54.13 per cent dip.

Veritas points to questionable related-party transactions, aggressive and conflicting accounting policies, self-enrichment and inability to deliver on promises, and a balance sheet stretched to the limit, with no free cash flow and no credible plan to de-lever its balance sheet. “If your investment decision incorporates management integrity, then bypassing DLF will be an easy choice,” the Veritas report states.

In addition, Veritas does “not believe the disclosed book equity and asset base of the company,” stating that via its dealings (merger) with DLF Assets Ltd (DAL), from FY 2007 to FY 2011, the company inflated sales by at least Rs. 11,236 crore and its profit before tax by Rs. 7,233 crore.

A slowing real estate market in a high inflation environment and over-exposure to Gurgaon — among India’s most speculative real estate markets — is further expected to create tremendous pressure on the company’s balance sheet. “In the end, we believe DLF will seek assistance from financial institutions to restructure its loans,” the report affirms, urging investors not to buy DLF stock. DLF dismissed the report as “mischievous and presumptive.”

Mr. Vadra himself has attributed his brass-to-gold success story to hard work—and a little help from “family” friends like K.P. Singh, the chairman of the DLF Group. However, Mr. Vadra has strongly denied taking any favours from DLF in the past. “I have a good understanding with DLF. Our children are friends, we are friends. They are seasoned businessmen. They are not daft… They don't need me to enhance them. They’ve existed for years,” he told The Economic Times in March 2011.

Indeed, in January 2002, he made his distaste for favour-seeking capitalism public, dissociating himself from his brother and father, alleging that they were promising jobs and favours using his name and association with the Gandhi family. His father responded by suing him for defamation.

Hard work Mr. Vadra may well have put into building his property empire. But the help he received from friends like DLF suggests at least a part of his success flowed from the willingness of others to bet on the outcome of his enterprise.

£1m buys foreign investors right to live in Britain

Foreign millionaires are flocking to use a little-known immigration scheme that allows wealthy individuals to jump to the top of the queue for permanent residency.

The most recent figures from the Home Office show that more than 400 people applied to use the investor visa scheme in the 12 months to the end of June. This compares with a total of 331 people in 2011 and fewer than 200 in 2009. Photo: PA

By Harry Wilson

9:30PM BST 06 Oct 2012

Rich Russians and Chinese are increasingly using "investor visas" that allow wealthy foreigners to effectively buy the right to live in the UK in return for buying at least £1m of gilts or shares and bonds in British companies.

Top London private bankers have expressed concerns at the number of people using the scheme to gain permanent resident status, arguing that the authorities should consider raising the amount of money needed to gain residency.

"The £1m threshold was put in place more than 20 years ago and is not the obstacle it once was. We have seen a huge increase in demand from Russians, Chinese and people from the Middle East wanting to move to London and it is clear that given the unlimited demand the time may have come to charge more for entry," said on senior London banker.

The most recent figures from the Home Office show that more than 400 people applied to use the investor visa scheme in the 12 months to the end of June. This compares with a total of 331 people in 2011 and fewer than 200 in 2009.

Mark Pihlens, chief executive of Invest UK, which advises wealthy foreigners on investing in Britain, said political instability in the Middle East as well as China and Russia had driven the spike. "People want to take out a second option on where they and their children can live," he said. 2012

Wealthy foreign nationals can speed up the process by investing greater amounts. Investments of more than £5m and £10m mean permanent residency could be gained within as little as two years.

A convincing study shows that business leaders and serial killers share a mindset

The Wisdom of Psychopaths by Kevin Dutton – review

• 
• • Tim Adams
  • The Observer, Sunday 7 October 2012

Christian Bale as Patrick Bateman in the 2000 film adaptation of Bret Easton Ellis’s novel American Psycho. Photograph: Moviestore Collection/Rex

Do you think like a psychopath? It has been claimed that one quick way of telling is to read the following story and see what answer to its final question first pops into your head:

1. The Wisdom of Psychopaths
2. by Kevin Dutton
3. 
4. Buy it from the Guardian bookshop

Search the Guardian bookshop

1. Tell us what you think: Star-rate and review this book

While attending her mother's funeral, a woman meets a man she's never seen before. She quickly believes him to be her soulmate and falls head over heels. But she forgets to ask for his number, and when the wake is over, try as she might, she can't track him down. A few days later she murders her sister. Why?

If the first answer that springs to your mind is some variation of jealousy and revenge – she discovers her sister has been seeing the man behind her back – then you are in the clear. But if your first response to this puzzle is "because she was hoping the man would turn up to her sister's funeral as well", then by some accounts you have the qualities that might qualify you to be a cold-blooded killer – or a captain of industry, a nerveless surgeon, a recruit for the SAS – or which may well make you a commission-rich salesman, a winning barrister, a charismatic clergyman or a red-top journalist. The little parable purports to reveal those qualities – an absence of emotion in decision making, a cold focus on outcomes, an extremely ruthless and egocentric logic – which tend to show up in disproportionate degrees in all those individuals.

There is a problem though. When Kevin Dutton, the author of this compulsive quest into the psychopathic mind, tried the question on some real psychopaths, not one of them came up with the "second funeral" motive. As one commented: "I might be nuts but I'm not stupid."

The admirable quality of this book is Dutton's refusal to accept easy answers in one of the more sensational fields of popular psychology. He comes at the challenge of deconstructing the advantages and dangers of psychopathic behaviour with two distinct motivations. First, the academic rigour of a research fellow at Magdalen College, Oxford. Second, with the more human need to understand the character of his late father, a market trader in the East End, a man with an "uncanny knack of getting exactly what he wanted", who could sell anything to anybody, because to him "there were no such things as clouds, only silver linings". Psychopaths, we learn, are the ultimate optimists; they always think things will work in their favour.

Dutton's curiosity takes him from boardrooms and law courts to neurological labs. He tries in different ways to get inside the heads of those individuals for whom killing has been a way of life – from Bravo Two Zero's Andy McNab to the video game-obsessed inmates of Broadmoor's secure wards. In his effort to get to their truths he has a tendency to write with the one-tone-fits-all breeziness of the excited enthusiast; at certain points his insistent chattiness jars. Though he demonstrates few of the characteristics of psychopaths himself, none of the limited range of cold fury of Viking "berserkers" or the wilful icy detachment of brain surgeons, he is in thrall to their possibilities. Perhaps, he argues, we all are.

Dutton's book at any rate supports the idea that to thrive a society needs its share of psychopaths – about 10%. It not only shows the value of the emotionally detached mind in bomb disposal but also the uses of the psychopath's ability to intuit anxiety as demonstrated by, for example, customs officials. Along the way his analysis tends to reinforce the idea that the chemistry of megalomania which characterises the psychopathic criminal mind is a close cousin to the set of traits often best rewarded by capitalism. Dutton draws on a 2005 study that compared the profiles of business leaders with those of hospitalised criminals to reveal that a number of psychopathic attributes were arguably more common in the boardroom than the padded cell: notably superficial charm, egocentricity, independence and restricted focus. The key difference was that the MBAs and CEOs were encouraged to exhibit these qualities in social rather than antisocial contexts.

As Dutton details this relationship, part of you is left wondering if the judge who recently praised a housebreaker for his courage and resourcefulness, and expressed the hope that in the future he might use his energies in more constructive directions, might have had Dutton's book by his bedside. Certainly you are left wondering if corporations that really want to find driven leaders might be as well to conduct their recruitment round in the juvenile courts as the universities. In this sense it is hard to know which is more chilling: the scene in which Dutton weighs a serial killer's brain in his hands and reveals it to be in no way tangibly different from yours or mine, or the research that shows the ability of American college students to empathise with others has, in the past 30 years, reduced by 40%…

The sequencing and analysis of the first Malayali personal genome

The new Malayali world of DNA

T. NANDAKUMAR

A Kochi-based laboratory has completed the full sequencing and analysis of the first Malayali personal genome, revealing the genetic diversity of the linguistic group and signalling a revolution in disease diagnosis and treatment.

The study by SciGenom Laboratories established that the Malayali is genetically similar to the Caucasians more than any other race on earth.

A detailed report on the analysis has been published after peer review by BMC Genomics, an international medical journal that identifies and pools research contributions in genomics. Investigators at SciGenom Labs had joined hands with Stephan C. Suschter's laboratory at Pennstate, USA, and others to analyse the genome sequencing data.

The report carries elaborate comparison of Malayali genome against other published genomes from other parts of the world. The study revealed that the gene sequence of the Malayali varies from Chinese and African genomes but stands closer to the Caucasian, a term denoting the white race.

Genetic diversity

According to the report, the availability of this genome and the variants identified is a first step in understanding the genetic diversity in the Indian subcontinent, a crucial factor in identifying clinically relevant changes. These changes, along with further studies on additional genomes from this region, should provide a comprehensive assessment of the disease burden in the Indian population, it concluded.

Dr. George Thomas, Director, SciGenom Labs, said this was the first complete sequencing of a South Asian Indian female (SAIF) genome. “The real challenge with regard to the data obtained from genome sequencing is its analysis for arriving at sound conclusions. The analysis enables listing out those genetic deformities and hidden diseases in an individual which would come out in future,” he said.

“So diseases such as cancer, diabetes, liver diseases, and Alzheimer’s would become predictable and there could be preventive treatment and personalised drugs. This is the field occupied by bioinformatics and India needs to develop a good number of experts in this field,” he said.

The sequencing and genotype data has been deposited at the European Genome-Phenome Archive, hosted by the European Bioinformatics Institute (EBI). The SAIF variant information could be viewed at http://gbrowse.scigenom.com. and the full report published by BMC Genomics was available at http://www.biomedcentral.com/1471-2164/13/440, a press note issued by SciGenom Laboratories said.

A rightwing insurrection is usurping our democracy

For 30 years big business, neoliberal thinktanks and the media have colluded to capture our political system. They're winning

• 
• • George Monbiot
  • The Guardian, Monday 1 October 2012 20.30 BST

After contemplating a military coup Sir James Goldsmith went on to form the Referendum party, slogan: Let the People Decide. Photograph: Jacqueline Arzt/AP

To subvert means to turn from below. We need a new word, which means to turn from above. The primary threat to the democratic state and its functions comes not from mob rule or leftwing insurrection, but from the very rich and the corporations they run.

These forces have refined their assault on democratic governance. There is no need – as Sir James Goldsmith, John Aspinall, Lord Lucan and others did in the 1970s – to discuss the possibility of launching a military coup against the British government: the plutocrats have other means of turning it.

Over the last few years I have been trying better to understand how the demands of big business and the very rich are projected into policymaking, and I have come to see the neoliberal thinktanks as central to this process. These are the groups which claim to champion the free market but whose proposals often look like a prescription for corporate power.

David Frum, formerly a fellow of one of these thinktanks – the American Enterprise Institute – argues that they "increasingly function as public relations agencies". But in this case, we don't know who the clients are. As the corporate lobbyist Jeff Judson enthuses, they are "virtually immune to retribution … the identity of donors to thinktanks is protected from involuntary disclosure". A consultant who worked for the billionaire Koch brothers claims that they see the funding of thinktanks "as a way to get things done without getting dirty themselves".

This much I knew, but over recent days I've learned a lot more. In Think Tank: the story of the Adam Smith Institute, the institute's founder, Madsen Pirie, provides an unintentional but invaluable guide to how power in Britain really works.

Soon after it was founded (in 1977), the institute approached "all the top companies". About 20 of them responded by sending cheques. Its most enthusiastic supporter was the coup plotter James Goldsmith, one of the most unscrupulous asset strippers of that time. Before making one of his donations, Pirie writes, "he listened carefully as we outlined the project, his eyes twinkling at the audacity and scale of it. Then he had his secretary hand us a cheque for £12,000 as we left".

From the beginning, senior journalists on the Telegraph, the Times and the Daily Mail volunteered their services. Every Saturday, in a wine bar called the Cork and Bottle, Margaret Thatcher's researchers and leader writers and columnists from the Times and Telegraph met staff from the Adam Smith Institute and the Institute of Economic Affairs. Over lunch, they "planned strategy for the week ahead". These meetings would "co-ordinate our activities to make us more effective collectively". The journalists would then turn the institute's proposals into leader columns while the researchers buttonholed shadow ministers.

Soon, Pirie says, the Mail began running a supportive article on the leader page every time the Adam Smith Institute published something. The paper's then editor, David English, oversaw these articles himself, and helped the institute to refine its arguments.

As Pirie's history progresses, all references to funding cease. Apart from tickets donated by British Airways, no sponsors are named beyond the early 1980s. While the institute claims to campaign on behalf of "the open society", it is secretive and unaccountable. Today it flatly refuses to say who funds it.

Pirie describes how his group devised and refined many of the headline policies implemented by Thatcher and John Major. He claims (and produces plenty of evidence to support it) either full or partial credit for the privatisation of the railways and other industries, for the contracting-out of public services to private companies, for the poll tax, the sale of council houses, the internal markets in education and health, the establishment of private prisons, GP fundholding and commissioning and, later, for George Osborne's tax policies.

Pirie also wrote the manifesto of the neoliberal wing of Thatcher's government, No Turning Back. Officially, the authors of the document – which was published by the party – were MPs such as Michael Forsyth, Peter Lilley and Michael Portillo. "Nowhere was there any mention of, or connection to, myself or the Adam Smith Institute. They paid me my £1,000 and we were all happy." Pirie's report became the central charter of the doctrine we now call Thatcherism, whose praetorian guard called itself the No Turning Back group.

Today's parliamentary equivalent is the Free Enterprise Group. Five of its members have just published a similar manifesto, Britannia Unchained. Echoing the narrative developed by the neoliberal thinktanks, they blame welfare payments and the mindset of the poor for the UK's appalling record on social mobility, suggest the need for much greater cuts and hint that the answer is the comprehensive demolition of the welfare system. It is subtler than No Turning Back. There are fewer of the direct demands and terrifying plans: these movements have learned something in the past 30 years.

It is hard to think how their manifesto could have been better tailored to corporate interests. As if to reinforce the point, the cover carries a quote from Sir Terry Leahy, until recently the chief executive of Tesco: "The path is clear. We have to be brave enough to take it."

Once more the press has taken up the call. In the approach to publication, the Telegraph commissioned a series of articles called Britain Unleashed, promoting the same dreary agenda of less tax for the rich, less help for the poor and less regulation for business. Another article in the same paper, published a fortnight ago by its head of personal finance Ian Cowie, proposes that there be no representation without taxation. People who don't pay enough income tax shouldn't be allowed to vote.

I see these people as rightwing vanguardists, mobilising first to break and then to capture a political system that is meant to belong to all of us. Like Marxist insurrectionaries, they often talk about smashing things, about "creative destruction", about the breaking of chains and the slipping of leashes. But in this case they appear to be trying to free the rich from the constraints of democracy. And at the moment they are winning.