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Sunday 26 July 2015

The World Today - GREECE: A PEOPLE BETRAYED


‘Quarterly capitalism’ is short-term, myopic, greedy and dysfunctional

Will Hutton in The Guardian


It has been obvious for years that British capitalism is profoundly dysfunctional. In 1970, £10 of every £100 of profit was distributed to shareholders: today, under intense pressure from short-term owners, companies pay out £70. Investment, innovation and productivity have slumped. Few new companies grow to any significant size before they are taken over.

Exports have stagnated. The current account deficit is at record proportions. The purpose of companies now is not to do great things, solve great problems or scale up great solutions –why capitalism is potentially the best economic system – it is to become payolas for their disengaged owners and pawns in the next big deal or takeover. Not only the British economy suffers – this process has become the major driver of rising inequality, low pay and insecurity in the workplace as management teams are forced to treat workers as costly commodities rather than allies in business building.
Regular readers of this column will be familiar with the refrain, and the stubborn resistance from the British mainstream. There is absolutely nothing wrong at all with the British private sector, runs the Conservative argument: to the extent the British economy does have problems they are rooted entirely in taxation, regulation, unions and government. But in a week when the Financial Times – a great British asset and embodiment of the best of our journalism – has been sold to Nikkei for no better reason than to support Pearson’s short-term share price, powerful and public criticism of the way British capitalism operates has come from an unexpected quarter.

Last year, the governor of the Bank of England, Mark Carney, called on firms to have a greater “sense of their responsibilities for the system”, in particular the social contract on which market capitalism’s long-term dynamism depends. On Friday’s Newsnight, the chief economist of the Bank of England, Andy Haldane, built on the governor’s concerns. He began with the seven-fold increase in the proportion of profit distributed to shareholders in dividends and bought-back shares over the last 45 years, which he said necessarily “leaves less for investment”. The explanation was simple: British (and indeed American) company law “puts the shareholder at front and centre. It puts the short-term interest of shareholders in a position of primacy when it comes to running the firm.” He thought company law that placed shareholders on a more equal footing with other stakeholders – workers, customers, clients – would work better. Dare I say it – stakeholder capitalism?

He damned the way the public limited company has developed. “The public limited company model has served the world well from a growth perspective. But you can always have too much of a good thing. The nature of shareholding today is fundamentally different than what it was a generation ago. The average share was held by the average shareholder, just after the war, for around six years. Today, that average share is held by the average shareholder for less than six months. Of course, many shareholders these days are holding shares for less than a second.”

In New York, at almost exactly the same time Newsnight was transmitting its interview with Andrew Haldane, Hillary Clinton was speaking from the same script, attacking what she called “quarterly capitalism”. “American business needs to break free from the tyranny of today’s earning report so they can do what they do best: innovate, invest and build tomorrow’s prosperity,” the Democratic presidential front runner declared. “It’s time to start measuring value in terms of years – or the next decade – not just next quarter.” She does not want to reinvent the public limited company, but she proposed the most far-reaching tax reforms of any Democrat presidential nominee to change the incentives for shareholders and executives alike. In American terms this is a revolution.

It is long overdue and the argument is beginning to get traction in the US. Free-market apologists insist that the more cash is handed back to shareholders, then the more they have to invest in innovation. The stock market is doing its job: promoting efficiency. The trouble is that everyone can see it’s 100% wrong. The market is hopelessly inefficient, greedy and myopic. When Larry Page and Sergey Brin floated Google, they took care to insulate the company from “quarterly capitalism”: they accorded their shares as Google’s founders 10 times the voting rights in order to protect their capacity to innovate from the stock market – what they considered Google’s real business purpose.

From robots to self-driving cars, from virtual reality glasses to investigating artificial intelligence, Google is now one of the most innovative firms on Earth. Meanwhile the typical US Plc, like its counterpart in Britain, is hunkering down, investing and innovating ever less and distributing more cash to shareholders for the reasons Haldane explains. Far from market efficiency, the whole system is undermining the legitimacy of capitalism.

But bit by bit influential voices such as Haldane’s are having the nerve to declare the Anglo-American system does not work. A rich collection of reflections and commentary edited by Diane Carney (Mark Carney’s wife) was published after London’s Inclusive Capitalism conference last month. Yet, except for former business secretary Vince Cable, no leading British politician has entered the lists. It will be intriguing how George Osborne reacts: one instinct will be to sack Carney and Haldane, as he has done Martin Wheatley, the head of the Financial Conduct Authority, for being too tough on the City. Another will be to co-opt the argument for the one nation Tory cause before the Labour party does.

He needn’t worry too much. One of the reasons that Tony Blair dropped his advocacy for stakeholder capitalism back in 1996 after the publication of The State We’re In was because too many leftwing Labour MPs took the Jeremy Corbyn line that the party’s mission was to socialise capitalism rather than reform it, while too many rightwing Labour MPs such as Peter Mandelson and Alistair Darling were terrified of upsetting business, as today, it seems, is Liz Kendall. He had zero internal political support, business was distrustful and the Tories were accusing him of returning to 1970s corporatism. Today the Bank of England and the likely next US president are supporters. Will one of the contenders for the Labour leadership have the courage to make the case? So far, they have all been mute. If Andy Haldane has done nothing else, he will have dramatised the poverty of today’s thinking about capitalism – in both main political parties.

Saturday 25 July 2015

The last thing Labour needs is a leader like Jeremy Corbyn who people want to vote for

Mark Steel in The Independent

At last sensible Labour politicians are injecting some maturity into the leadership debate. To start with, Tony Blair’s aide John McTernan called anyone who nominated Jeremy Corbyn a “moron”, which is such a refreshing change from the divisive and childish approach of the Left.

His next statement will be that Jeremy Corbyn smells like a poo-poo and anyone who votes for him has a tiny willy, because John McTernan understands the importance of Labour appearing grown up and united.

Now Blair himself has informed us Corbyn would be a disaster. This could cause a problem, because for giving his views in a speech Blair usually charges at least £200,000, and Labour’s finances are stretched enough as it is. Normally he’s advising the government of Kazakhstan or a Saudi Arabian oil company, or shaking hands with characters like Colonel Gaddafi so it’s surprising he didn’t suggest cancelling the election and putting the army in charge of the party, and sentencing Diane Abbott to 500 lashes. Even so it’s sweet of him to take time out from his busy schedule.

He said that if your heart is telling you to vote for Corbyn, you need a heart transplant. You can see how he thinks this, because the first word anyone thinks of when they see Blair is “heart”. Tony Heart Blair is what his friends President Assad of Syria and ex-military ruler Mubarak of Egypt call him.

When you’re responsible for all the heartfelt warmth and sunshine that resulted from invading Iraq, it’s understandable if you get angry with heartless types such as Jeremy Corbyn who opposed it all along, but not everyone can live up to Blair’s standards.

Blair’s supporters point out that although his current image is tarnished, we should remember he was hugely popular in 1997.

The Blair viewpoint has clearly affected Margaret Beckett, as she’s one of the MPs who nominated Corbyn, and her response to being called a moron was to agree. She regrets helping him to stand for the election, she says, as she never guessed he would win as much support as he has. This is a novel attitude towards democracy, that the worst thing you can do in an election is allow someone to stand if they might win.

Maybe Labour should change its rules for elections again, so that anyone who disagrees with Blair is only allowed to stand if they sign a pledge to get fewer than eight votes.

Luckily, Corbyn’s opponents are making a persuasive case for their own bids. Andy Burnham is especially clear that he’s opposed to the Tory’s Welfare Bill, as it will “Hit working families” and “hit children particularly badly”. Indeed he’s so opposed to it that he was determined not to vote against it. The most effective way to oppose it, he insisted, was to abstain rather than vote against it, because that way he can unite the party against it.

It’s so rare that a politician speaks clearly like that, in a language we can all understand. Presumably he’ll be telling all his supporters not to vote for him in the leadership election, but to abstain as that way he can win by even more.

Burnham is known as an Everton fan, so when he’s at their games he must try and persuade the Everton supporters to sing “Spurs and Everton, Spurs and Everton, we’ll abstain on this one evermore, we’ll abstain on this one ever-more”, rather than fall into the trap of supporting the team he supports by supporting them.

Maybe his plan is to make Labour electable again by supporting all the different policies. If he becomes leader, Labour will support the cuts and oppose them, and oppose fox-hunting but support it as well, and that way the party can win votes from everyone.

Labour Leadership cadidates, from left to right: Yvette Cooper, Jeremy Corbyn, Liz Kendall, Andy Burnham

It could be that the reason three of the candidates are struggling to make an impact is they don’t seem capable of expressing what they stand for.

Whenever they’re asked what they believe in they make grand replies such as “I want a Britain not of down but of up, for the always and not the never, that reaches out to all of us, not only people on the 133 bus, a Britain not just of the liver but also the kidney, a Britain that can care, can share, be debonair, fair, abstain on the austere, and say a prayer like Tony Blair.”

Liz Kendall makes some effort to stand for something definite, which is to be like Blair but more so, and next week she’ll probably criticise Blair for only invading Iraq once when he should have done it twice.

There are reports that Kendall has asked Yvette Cooper to drop out, as Liz stands the best chance of beating Corbyn. As every survey shows Kendall is by some distance last, that’s impressive and I might try this myself. I’ll suggest to Mo Farah that he drops out of the 5,000m in next year’s Olympics, as my time of two hours is the only one that stands a chance of beating the Kenyans.

All three are now squabbling, not about ideas or policies or even their favourite type of biscuit, but over which one has the best chance to beat Corbyn. And they must beat him, because by being capable of expressing his ideas clearly and simply, for example by voting against welfare cuts, he makes himself unelectable.

If you look at Corbyn’s record it’s clear he just can’t win elections. In his constituency of Islington North he inherited a majority of 4,456, which is now 21,194. He’s one of the few Labour MPs whose vote increased between 2005 and 2010, when he added 5,685 to his majority. This is typical of the man, defying the official Labour policy of losing votes and getting more of them instead, just to be a rebel.

So let’s hope one of the others triumphs, and at least wins back the votes Labour lost in Scotland, where so many people at the last election said “I canna vote Labour, they don’t abstain enough for me, the wee morons.”

Friday 24 July 2015

How to think about Islamic State

Pankaj Mishra in The Guardian

Violence has erupted across a broad swath of territory in recent months: wars in Ukraine and the Middle East, suicide bombings in Xinjiang,Nigeria and Turkey, insurgencies from Yemen to Thailand, massacres in Paris, Tunisia and the American south. Future historians may well see such uncoordinated mayhem as commencing the third – and the longest and the strangest – of world wars. Certainly, forces larger and more complex than in the previous two wars are at work; they outrun our capacity to apprehend them, let alone adjust their direction to our benefit.

The early post cold war consensus – that bourgeois democracy has solved the riddle of history, and a global capitalist economy will usher in worldwide prosperity and peace – lies in tatters. But no plausible alternatives of political and economic organisation are in sight. A world organised for the play of individual self-interest looks more and more prone to manic tribalism.

In the lengthening spiral of mutinies from Charleston to central India, the insurgents of Iraq and Syria have monopolised our attention by their swift military victories; their exhibitionistic brutality, especially towards women and minorities; and, most significantly, their brisk seduction of young people from the cities of Europe and the US. Globalisation has everywhere rapidly weakened older forms of authority, in Europe’s social democracies as well as Arab despotisms, and thrown up an array of unpredictable new international actors, from Chinese irredentists and cyberhackers to Syriza and Boko Haram. But the sudden appearance of Islamic State (Isis) in Mosul last year, and the continuing failure to stem its expansion or check its appeal, is the clearest sign of a general perplexity, especially among political elites, who do not seem to know what they are doing and what they are bringing about.






In its capacity to invade and hold a territory the size of England, to inspire me-too zealotry in Pakistan, Gaza, Afghanistan, Nigeria, Libya and Egypt, and to entice thousands of camp followers, Isis represents a quantum leap over all other private and state-sanctioned cults of violence and authoritarianism today. But we are not faring well with the cognitive challenge to define this phenomenon.

For Obama, it is a “terrorist organisation, pure and simple”, which “we will degrade and ultimately destroy”. British politicians, yet again hoping against experience to impress the natives with a show of force, want to bomb the Levant as well as Mesopotamia. A sensationalist and scruple-free press seems eager to collude in their “noble lie”: that a Middle Eastern militia, thriving on the utter ineptitude of its local adversaries, poses an “existential risk” to an island fortress that saw off Napoleon and Hitler. The experts on Islam who opened for business on 9/11 peddle their wares more feverishly, helped by clash-of-civilisation theorists and other intellectual robots of the cold war, which were programmed to think in binaries (us versus them, free versus unfree world, Islam versus the west) and to limit their lexicon to words such as “ideology”, “threat” and “generational struggle”. The rash of pseudo-explanations – Islamism, Islamic extremism, Islamic fundamentalism, Islamic theology, Islamic irrationalism – makes Islam seem more than ever a concept in search of some content whilenormalising hatred and prejudice against more than 1.5 billion people. The abysmal intellectual deficit is summed up, on one hand, by the unremorsefullybellicose figure of Blair, and, on the other, the British government squabbling with the BBC over what to call Isis.

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In the broadest view, Isis seems the product of a catastrophic war – the Anglo-American assault on Iraq. There is no doubt that the ground for it was prepared by this systematic devastation – the murder and displacement of millions, which came after more than a decade of brutalisation by sanctions and embargoes. The dismantling of the Iraqi army, de-Ba’athification and the Anglo-American imprimatur to Shia supremacism provoked the formation in Mesopotamia of al-Qaida, Isis’s precursor. Many local factors converged to make Isis’s emergence possible last year: vengeful Sunnis; reorganised Ba’athists in Iraq; the co-dependence of the west on despotic allies (al-Sisi, al-Maliki) and incoherence over Syria; the cynical manoeuvres of Assad; Turkey’s hubristic neo-Ottomanism, which seems exceeded in its recklessness only by the actions of Saudi Arabia and the Gulf States.

The failure of the Arab Spring has also played a part. Tunisia, its originator, has sent the largest contingent of foreign jihadis to Iraq and Syria. Altogether an estimated 17,000 people, mostly young men, from 90 countries have travelled to Syria and Iraq to offer their services to Isis. Dozens of British women have gone, despite the fact that men of Isis have enslaved and raped girls as young as 10 years old, and stipulated that Muslim girls marry between the ages of nine and 17, and live in total seclusion. “You can easily earn yourself a higher station with God almighty,” a Canadian insurrectionist, Andre Poulin, exhorted in a video used by Isis for online recruitment, “by sacrificing just a small bit of this worldly life.”

It is not hard to see that populous countries such as Pakistan and Indonesia will always have a significant number of takers for well-paid martyrdom. What explains, however, the allure of a caliphate among thousands of residents of relatively prosperous and stable countries, such as the high-achieving London schoolgirls who travelled to Syria this spring?

Isis, the military phenomenon, could conceivably be degraded and destroyed. Or, it could rise further, fall abruptly and then rise again (like al-Qaida, which has been degraded and destroyed several times in recent years). The state can use its immense power to impound passports, shut down websites, and even enforce indoctrination in “British values” in schools. But this is no way to stem what seems a worldwide outbreak of intellectual and moral secessionism.

Isis is only one of its many beneficiaries; demagogues of all kinds have tapped the simmering reservoirs of cynicism and discontent. At the very least, their growing success and influence ought to make us re-examine our basic assumptions of order and continuity since the political and scientific revolutions of the 19th century – our belief that the human goods achieved so far by a fortunate minority can be realised by the ever-growing majority that desires them. We must ask if the millions of young people awakening around the world to their inheritance can realise the modern promise of freedom and prosperity. Or, are they doomed to lurch, like many others in the past, between a sense of inadequacy and fantasies of revenge?

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 Returning to Russia from Europe in 1862, Dostoevsky first began to explore at length the very modern torment of ressentiment that the misogynists of Twittertoday manifest as much as the dupes of Isis. Russian writers from Pushkin onwards had already probed the peculiar psychology of the “superfluous” man in a semi-westernised society: educated into a sense of hope and entitlement, but rendered adrift by his limited circumstances, and exposed to feelings of weakness, inferiority and envy. Russia, trying to catch up with the west, produced many such spiritually unmoored young men who had a quasi-Byronic conception of freedom, further inflated by German idealism, but the most unpromising conditions in which to realise them.

Rudin in Turgenev’s eponymous novel desperately wants to surrender himself “completely, greedily, utterly” to something; he ends up dead on a Parisian barricade in 1848, having sacrificed himself to a cause he doesn’t fully believe in. It was, however, Dostoevsky who saw most acutely how individuals, trained to believe in a lofty notion of personal freedom and sovereignty, and then confronted with a reality that cruelly cancelled it, could break out of paralysing ambivalence into gratuitous murder and paranoid insurgency.

His insight into this fateful gap between the theory and practice of liberal individualism developed during his travels in western Europe – the original site of the greatest social, political and economic transformations in human history, and the exemplar with its ideal of individual freedom for all of humanity. By the mid-19th century, Britain was the paradigmatic modern state and society, with its sights firmly set on industrial prosperity and commercial expansion. Visiting London in 1862, Dostoevsky quickly realised the world-historical import of what he was witnessing. “You become aware of a colossal idea,” he wrote after visiting the International Exhibition, showcase of an all-conquering material culture: “You sense that it would require great and everlasting spiritual denial and fortitude in order not to submit, not to capitulate before the impression, not to bow to what is, and not to deify Baal, that is, not to accept the material world as your ideal.”

However, as Dostoevsky saw it, the cost of such splendour and magnificence was a society dominated by the war of all against all, in which most people were condemned to be losers. In Paris, he caustically noted that liberté existed only for the millionaire. The notion of equality before the law was a “personal insult” to the poor exposed to French justice. As for fraternité, it was another hoax in a society driven by the “individualist, isolationist instinct” and the lust for private property.

Dostoevsky diagnosed the new project of human emancipation through the bewilderment and bitterness of people coming late to the modern world, and hoping to use its evidently successful ideas and methods to their advantage. For these naive latecomers, the gap between the noble ends of individual liberation and the poverty of available means in their barbarous social order was the greatest. The self-loathing clerk in Notes from Underground represents the human being who is excruciatingly aware that free moral choice is impossible in a world increasingly regimented by instrumental reason. He dreams constantly and impotently of revenge against his social superiors. Raskolnikov, the deracinated former law student in Crime and Punishment, is the psychopath of instrumental rationality, who can work up evidently logical reasons to do anything he desires. After murdering an old woman, he derives philosophical validation from the most celebrated nationalist and imperialist of his time, Napoleon: a “true master, to whom everything is permitted”.

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The bloody dramas of political and economic laggards can seem remote from liberal-democratic Britain. The early and decisive winner in the sweepstakes of modern history has guaranteed an admirable measure of security, stability and dignity to many of its citizens. The parochial vision of modern history as essentially a conflict between open society and its enemies (liberal democracy versus nazism, communism and Islam) can feel accurate within the unbreached perimeters of Britain (and the US). It is not untrue to assert that Britain’s innovations and global reach spread the light of reason to the remotest corners of the Earth. Britain made the modern world in the sense that the forces it helped to originate – technology, economic organisation and science – formed a maelstrom that is still overwhelming millions of lives.

But this is also why Britain’s achievements cannot be seen in isolation from their ambiguous consequences elsewhere. Blaming Islamic theology, or fixating on the repellent rhetoric of Isis, may be indispensable in achieving moral self-entrancement, and toughening up convictions of superiority: we, liberal, democratic and rational, are not at all like these savages. But these spine-stiffening exercises can’t obscure the fact that Britain’s history has long been continuous with the world it made, which includes its ostensible enemies in Europe and beyond. Regardless of what the “island story” says, the belief systems and institutions Britain initiated – a global market economy, the nation state, utilitarian rationality – first caused a long emergency in Europe, before roiling the older worlds of Asia and Africa.

The recurrent crises explain why a range of figures, from Blake to Gandhi, and Simone Weil to Yukio Mishima, reacted remarkably similarly to the advent of industrial and commercial society, to the unprecedented phenomenon of all that is solid melting into thin air, across Europe, Asia and Africa.

“Spectres reign where no gods are,” Schiller wrote, deploring the atrophying of the “sacral sense” into nationalism and political power. Fear of moral and spiritual diminishment, and social chaos, was also a commonplace of much 19th-century British writing. “The rich have become richer, and the poor have become poorer; and the vessel of the state is driven between the Scylla and Charybdis of anarchy and despotism,” Shelley wrote in 1821, blaming inequality and disorder on the “unmitigated exercise of the calculating faculty”. Coleridge, denouncing “a contemptible democratical oligarchy of glib economists”, asked: “Is the increasing number of wealthy individuals that which ought to be understood by the wealth of the nation?” Dickens did much with Carlyle’s despairing insight into cash payment as the “sole nexus” between human beings. DH Lawrence recoiled fruitfully from “the base forcing of all human energy into a competition of mere acquisition”. Proximity to British arguments helped shape Marx’s vision of a proletariat goaded by the inequities and degradations of industrial capitalism into a revolutionary redemption of human existence.

The actual revolutions and revolts, however, occurred outside Britain, where liberal individualism, the product of a settled society with fixed social structures, seemed to have no answers to the plight of the uprooted masses living in squalor in cities. Its failure first motivated cultural nationalists, socialists, anarchists and revolutionaries across Europe, before seeding many anti-colonial movements in Asia and Africa. In an irony of modern history, which stalks revolutions and revolts to this day, the search for a new moral community has constantly assumed unpredicted and vicious forms. But then the dislocations and traumas caused by industralisation and urbanisation accelerated the growth of ideologies of race and blood in even enlightened western Europe.


A militant Islamist fighter films a military parade in northern Syria celebrating the declaration of an Islamic caliphate. Photograph: Reuters

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“The way of modern culture,” the Austrian writer Franz Grillparzer once lamented, “leads from humanity through nationality to bestiality.” He died too early (1872) to see another landmark en route to barbarism: modern European imperialism, whose humanitarian rhetoric was, like one of its representatives, Conrad’s Kurtz, “hollow at the core”.

In Asia, the usual disruptions of an industrial and commercial system that transcends political frontiers and destroys economic self-sufficiency, enslaving individuals to impersonal forces, were accompanied by a racist imperialism. The early victims and opponents of this ultra-aggressive modernity were local elites who organised their resistance around traditionalist loyalties and fantasies of recapturing a lost golden age – tendencies evident in the Boxer Rebellion in China as well as early 19th-century jihads against British rule in India.



Premodern political chieftains, who were long ago supplanted by western-educated men and women quoting John Stuart Mill and demanding individual rights, do not and cannot exist any more, however “Islamic” their theology may seem. They return today as parody – and there is much that is purely camp about a self-appointed caliph sporting a Rolex and India’s Hindu revivalist prime minister draped in a Savile Row $15,000 suit with personalised pin stripes. The spread of literacy, improved communications, rising populations and urbanisation have transformed the remotest corners of Asia and Africa. The desire for self-expansion through material success fully dominates the extant spiritual ideals of traditional religions and cultures.

Isis desperately tries to reinvent the early ideological antagonism between the imperialistic modern west and its traditionalist enemies. A recent issue of their magazine Dabiq approvingly quotes George W Bush’s us-versus-them exhortation, insisting that there is no “Gray Zone” in the holy war. Craving intellectual and political prestige, the DIY jihadists receive helpful endorsements from the self-proclaimed paladins of the west, such as Michael Gove, Britain’s leading American-style neocon. Responding to the revelation on 17 July of secret British bombing of Syria, Gove asserted that the “need to maintain the strengthand durability of the western alliance in the face of Islamist fundamentalism” can “trump everything”.

Clashing in the night, the ignorant armies of ideologues endow each other’s cherished self-conceptions with the veracity they crave. But their self-flattering oppositions collapse once we recognise that much violence today arises out of a heightened and continuously thwarted desire for convergence and resemblance rather than religious, cultural and theological difference.

The advent of the global economy in the 19th century, and its empowerment of a small island, caused an explosion of mimetic desire from western Europe to Japan. Since then, a sense of impotence and compensatory cultural pride has routinely driven the weak and marginalised to attack those that seem stronger than them while secretly desiring to possess their advantages. Humiliated rage and furtive envy characterise Muslim insurrectionaries and Hindu fanatics today as much as they did the militarist Japanese insisting on their unique spiritual quintessence. It is certainly not some esoteric 13th-century Hadith that makes Isis so eager to adopt the modern west’s technologies of war, revolution and propaganda – especially, as the homicidal dandyism of Jihadi John reveals, its mediatised shock-and-awe violence.

There is nothing remarkable about the fact that the biggest horde of foreign fighters in Iraq and Syria originated in Tunisia, the most westernised of Arab countries. Mass education, economic crisis and unfeeling government have long constituted a fertile soil for the cults of authoritarianism and violence. Powerlessness and deprivation are exacerbated today by the ability, boosted by digital media, to constantly compare your life with the lives of the fortunate (especially women entering the workforce or prominent in the public sphere: a common source of rage for men with siege mentalities worldwide). The quotient of frustration tends to be highest in countries that have a large population of educated young men who have undergone multiple shocks and displacements in their transition to modernity and yet find themselves unable to fulfil the promise of self-empowerment. For many of them the contradiction Dostoevsky noticed between extravagant promise and meagre means has become intolerable.

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The sacral sense – the traditional basis of religion, entailing humility and self-restraint – has atrophied even where the churches, mosques and temples are full. The spectres of power reign incontestably where no gods are. Their triumph makes nonsense of the medieval-modern axis on which jihadis preening on Instagram in Halloween costumes are still reflexively defined. So extensive is the rout of pre-modern spiritual and metaphysical traditions that it is hard to even imagine their resurrection, let alone the restoration, on a necessarily large scale, of a non-instrumental view of human life (and the much-despoiled natural world). But there seem to be no political escape routes, either, out of the grisly cycle of retributive bombing and beheading.

The choice for many people in the early 20th century, as Rosa Luxemburgfamously proclaimed, was between socialism and barbarism. The German thinker spoke as the historical drama of the 19th century – revolution, nationalism, state-building, economic expansion, arms races, imperial aggrandisement – reached a disastrous denouement in the first world war. The choice has seemed less clear in the century since.

The mimic imperialisms of Japan and Germany, two resentful late-modernisers in Britain’s shadow, played out on a catastrophic scale the conflict built into the capitalist order. But socialist states committed to building human societies on co-operation rather than rivalry produced their own grotesqueries, as manifested byStalin and Mao and numerous regimes in the colonised world that sought moral advantage over their western masters by aiming at equality as well as prosperity.

Since 1989, the energies of postcolonial idealism have faded together with socialism as an economic and moral alternative. The unfettered globalisation of capital annexed more parts of the world into a uniform pattern of desire and consumption. The democratic revolution of aspiration De Tocqueville witnessed in the early 19th century swept across the world, sparking longings for wealth, status and power in the most unpromising circumstances. Equality of conditions, in which talent, education and hard work are rewarded by individual mobility, ceased to be an exclusively American illusion after 1989. It proliferated even as structural inequality entrenches itself further.

In the neoliberal fantasy of individualism, everyone was supposed to be an entrepreneur, retraining and repackaging themselves in a dynamic economy, perpetually alert to the latter’s technological revolutions. But capital continually moves across national boundaries in the search for profit, contemptuously sweeping skills and norms made obsolete by technology into the dustbin of history; and defeat and humiliation have become commonplace experiences in the strenuous endeavour of franchising the individual self.

Significantly numerous members of the precariat realise today that there is no such thing as a level playing field. The number of superfluous young people condemned to the anteroom of the modern world, an expanded Calais in its squalor and hopelessness, has grown exponentially in recent decades, especially in Asia and Africa’s youthful societies. The appeal of formal and informal secession – the possibility, broadly, of greater control over your life – has grown from Scotland to Hong Kong, beyond the cunningly separatist elites with multiple citizenship and offshore accounts. More and more people feel the gap between the profligate promises of individual freedom and sovereignty, and the incapacity of their political and economic organisations to realise them.

Even the nation state expressly designed to fulfil those promises – the United States – seethes with angry disillusionment across its class and racial divisions. A sense of victimhood festers among even relatively advantaged white men, as the rancorously popular candidacy of Donald Trump confirms. Elsewhere, the nasty discovery of Atticus Finch as a segregationist compounds the shock of Ferguson and Baltimore. Coming after decades of relentless and now insurmountable inequality, the revelation of long-standing systemic violence against African Americans is challenging some primary national myths and pieties. In a democracy founded by wealthy slave-owners and settler colonialists, and hollowed out by plutocrats, many citizens turn out to have never enjoyed equality of conditions. They raise the question that cuts through decades of liberal evasiveness about the cruelties of a political system intended to facilitate private moneymaking: “how to erect,” as Ta-Nehisi Coates puts it in his searing new book, Between the World and Me, “a democracy independent of cannibalism?”

And yet the obvious moral flaws of capitalism have not made it politically vulnerable. In the west, a common and effective response among regnant elites to unravelling national narratives and loss of legitimacy is fear-mongering among minorities and immigrants – an insidious campaign that continuously feeds on the hostility it provokes. These cosseted beneficiaries of an iniquitous order are also quick to ostracise the stray dissenter among them, as the case of Greece reveals. Chinese, Russian, Turkish and Indian leaders, who are also productively refurbishing their nation-building ideologies, have even less reason to oppose a global economic system that has helped enrich them and their cronies and allies.

Rather, Xi Jinping, Modi, Putin and Erdogan follow in the line of early 19th-century European and Japanese demagogues who responded to the many crises of capitalism by exhorting unity before internal and external threats. European or American-style imperialism is not a feasible option for them yet; they deploy instead, more riskily, jingoistic nationalism and cross-border militarism as a valve for domestic tensions. They have also retrofitted old-style nationalism for their growing populations of uprooted citizens, who harbour yearnings for belonging and community as well as material plenitude. Their self-legitimising narratives are necessarily hybrid: Mao-plus-Confucius, Holy Cow-plus-Smart Cities, Neoliberalism-plus-Islam, Putinism-plus-Orthodox Christianity.



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 ‘Isis mobilises ressentiment into militant rebellion against the status quo’. Photograph: Reuters Photograph: Stringer . / Reuters/REUTERS

Isis, too, offers a postmodern collage rather than a determinate creed. Born in the ruins of two nation states that dissolved in sectarian violence, it vends the fantasy of a morally untainted and transnational caliphate. In actuality, Isis is the canniest of all traders in the flourishing international economy of disaffection: the most resourceful among all those who offer the security of collective identity to isolated and fearful individuals. It promises, along with others who retail racial, national and religious supremacy, to release the anxiety and frustrations of the private life into the violence of the global. Unlike its rivals, however, Isis mobilises ressentiment into militant rebellion against the status quo.

Isis mocks the entrepreneurial age’s imperative to project an appealing personality by posting snuff videos on social media. At the same time, it has a stern bureaucracy devoted to proper sanitation and tax collection. Some members of Isis extol the spiritual nobility of the Prophet and the earliest caliphs. Others confess through their mass rapes, choreographed murders and rational self-justifications a primary fealty to nihilism: that characteristically modern-day and insidiously common doctrine that makes it impossible for modern-day Raskolnikovs to deny themselves anything, and possible to justify anything.

The shapeshifting aspect of Isis is hardly unusual in a world in which “liberals” morph into warmongers, and “conservatives” institute revolutionary free-market “reforms”. Meanwhile, technocrats, while slashing employment and welfare benefits, and immiserating entire societies and generations, propose to bomb refugee boats, and secure unprecedented powers to imprison and snoop.

You can of course continue to insist on the rationality of liberal democracy as against “Islamic irrationalism” while waging infinite wars abroad and assaulting civil liberties at home. Such a conception of liberalism and democracy, however, will not only reveal its inability to offer wise representation to citizens. It will also make freshly relevant the question about intellectual and moral legitimacy raised by TS Eliot at a dark time in 1938, when he asked if “our society, which had always been so assured of its superiority and rectitude, so confident of its unexamined premises” was “assembled round anything more permanent than a congeries of banks, insurance companies and industries, and had it any beliefs more essential than a belief in compound interest and the maintenance of dividends?”

Today, the unmitigated exercise of the calculating faculty looks more indifferent to ordinary lives, and their need for belief and enchantment. The political impasses and economic shocks in our societies, and the irreparably damaged environment, corroborate the bleakest views of 19th-century critics who condemned modern capitalism as a heartless machinery for economic growth, or the enrichment of the few, which works against such fundamentally human aspirations as stability, community and a better future. Isis, among many others, draws its appeal from an incoherence of concepts – “democracy” and “individual rights” among them – with which many still reflexively shore up the ideological defences of a self-evidently dysfunctional system. The contradictions and costs of a tiny minority’s progress, long suppressed by blustery denial and aggressive equivocation, have become visible on a planetary scale. They encourage the suspicion – potentially lethal among the hundreds of millions of young people condemned to being superfluous – that the present order, democratic or authoritarian, is built on force and fraud; they incite a broader and more volatile apocalyptic and nihilistic mood than we have witnessed before. Professional politicians, and their intellectual menials, will no doubt blather on about “Islamic fundamentalism”, the “western alliance” and “full-spectrum response”. Much radical thinking, however, is required if we are to prevent ressentiment from erupting into even bigger conflagrations.

Tuesday 30 June 2015

The BBC is under threat because its success challenges market ideology

Polly Toynbee in The Guardian


'The cuts are so severe that they risk sending the BBC into a downward spiral.' Illustration by Joe Magee


Groping for British emblems to bind together an ever more diverse and fissiparous society, politicians struggle to find cultural and emotional social glue. Make your own list from the Queen to Glastonbury, but overwhelmingly people put the NHS and the BBC right up there near the top, deep-dyed into British DNA.

But not this government. Whatever Conservatism once meant, it’s no longer about conserving precious things. The NHS staggers under the fragmenting Lansley act and the BBC is under more severe assault than ever before,threatened with licence fee cuts – and perilous charter renewal ahead. Is it payback time for Rupert Murdoch’s election support? According to BBC political editor Nick Robinson, Cameron on his battle-bus said of the BBC: “I’m going to close them down.” Joke or threat, it’s too close to what many in his party want to be laughed off. Many of the newer Tory MPs, Thatcher’s children, detest the very existence of the BBC – its phenomenal success an affront to market ideology.

Threats come thick and fast. John Whittingdale, newly promoted culture secretary, called the £145 licence fee “worse than the poll tax” in his former role as head of the culture select committee. Sajid Javid, the business secretary,complained this month that the licence fee was “a large amount for many families” and “needs looking at”. Other Tories shed crocodile tears for the poor who can’t afford the TV licence, calling for non-payment to be decriminalised – a compassion not shown to twice as many prosecuted for not paying council tax.

Decriminalisation would lose the BBC an estimated £200m a year – and that’s deliberate. The BBC may lose £600m if forced to carry the Department for Work and Pensions’ cost of exempting over-75s from the licence fee. And there’s a proposed five more static years to add to the current seven-year licence fee freeze.

The risk is that these become seen as “moderate” cuts, a “compromise” with the factions that want the BBC killed off. Yet they are so severe that they risk sending the BBC into a downward spiral, where fewer good programmes mean weakened public support, allowing yet more cuts. The loss of the Olympics to Eurosport from 2022, for an unaffordable £920m, is exactly what the BBC’s head of sport warned recently: as BBC income shrivels it can’t compete – and the licence fee looks less good value.

Barely a day goes by without the Mail, Telegraph and Rupert Murdoch’s papers attacking the BBC. This week’s Sunday Times had a full page of gleeful, barely veiled encouragement to the young not to pay their licence fee if they only watch catch-up TV on iPads or smartphones. It reported 150,000 more households in the past three months abandoned traditional TV and the licence fee, claiming not to watch it live. Everyone admits there’s a growing problem with attaching the licence fee to a TV set – but that’s easily fixed with a household fee or by bringing iPlayer under the licence.

Murdoch bullies ceaselessly for a subscription system, to shrink the BBC to the tiny size of America’s PBS. His paper’s poll shows apparent “waning” public support, with only 48% saying the licence fee is value for money, slightly more preferring funding by advertising. Left out was the inconvenient answer to one poll question which found only 9% want it funded by subscription. The BBC quotes 11 other polls showing that support for the licence fee at 42% is higher than for any other form of funding. What’s astonishing is that 96% of people use the BBC every week, spending an average of 18.5 hours watching, listening or online.

This week BBC Radio 4 launched its new season with a special celebration. With strong emphasis, its director general, Tony Hall, warned in a speech: “It’s something none of us should take for granted – there’s nothing else like it in the world.” He’s right, the station is the soundtrack to the nation, a never-ending conversation of remarkable intelligence and pleasure, reaching deep among Sun and Mirror readers, defying accusations that it’s a middle-class silo. By rights, this Reithian relic should have died out long ago: instead its listeners keep growing – up from 9 million a decade ago to 11 million now.

In the kitchen, in the car or out jogging with an iPod, I can’t imagine life without it. On a desert island, isn’t the entire back catalogue what you’d choose? The Now Show, More or Less, Neil Macgregor’s History of the World in a 100 Objects – only God and gardening have me reaching for the off button. Now here comes a whole day of poetry. Even the awfulness of the Archer family has me gripped.

Those 11 million Radio 4 adherents listen for an average of 12 hours a week – and each shining hour costs just 1.4p per listener. Nothing was ever such good value. The entire BBC has half the budget of Sky and a quarter of BT’s – which offer a fraction of the quantity or quality.

Choice busts out of every new provider – Amazon, Netflix and many more to come – yet the BBC, at £12 a month, dominates the British airwaves, while Sky charges an average £47.

The other line of attack will be on BBC governance – even though its every move is already over-policed by governors, trust and all the acronyms: Ofcom, NAO,PAC, DCLG, plus many parliamentary committees. From millions of BBC words, blunders and scandals are relatively few.

The BBC’s success infuriates its enemies because it defies Hayekian laws of gravity; the market ought to offer better value but it doesn’t. Attacks on BBC “bias” rain down: James Harding, head of BBC News, protested at the “hell on wheels” “ferocity” of attacks during the election – a little faux-naive, perhaps, from a former Murdoch editor who knows the agenda from the other side.

The BBC has a near impossible task in finding unbiased truths in an ideological world – and sometimes it splits the difference to stay on the safe side when forced to choose between sense and nonsense. The establishment leans heavily, the weight of an 85% Tory and europhobic press breathes hard to push it off its foothold. There is too often a blandifying of essential arguments when intimidation by bullies drains life out of reporting on the NHS, benefits, austerity or Europe.

Pinko bias is an illusion of the right – and voters gave Cameron his win. Before wielding axes, Tory MPs should think hard about constituents who spend 18.5 hours a week with the BBC – and of its place in national life as an unmatched cultural treasure.

Teaching the poor to behave

G Sampath in The Hindu

By shifting the burden of poverty alleviation from the state onto the poor themselves, behavioural economists are ignoring the structural causes of poverty. They are also erasing the behaviour of the owners of capital from the poverty debate

The World Bank’s World Development Report (WDR) 2014 was about ‘Risk and Opportunity’. The 2013 WDR is simply named ‘Jobs’. The 2012 WDR is titled ‘Gender Equality and Development’.

Other WDR themes in the recent past include ‘Agriculture for Development’ (2008), ‘Equity and Development’ (2006), and ‘Building Institutions for Markets’ (2002). They all have an overt economic dimension. Naturally — for it’s a bank, after all. But the World Bank’s 2015 WDR is titled ‘Mind, Society and Behaviour’. That’s right. Now, what would a bank — or, if you prefer, a multilateral development finance institution — want with mind, society and behaviour?

There is a two-word answer to this question: behavioural economics. In its 2015 WDR, the World Bank makes a strong pitch to governments for applying behavioural economics to development policy.

As the report notes in its opening chapter, “The analytical foundations of public policy have traditionally come from standard economic theory.” Standard economic theory assumes that individuals are rational economic agents acting in their best self-interest.

But in the real world, people often behave irrationally, and not always in their own best economic interest. For instance, they might splurge when they could save, or give excessive weight to the immediate present as opposed to the distant future.

Is poverty a mindset?

Behavioural economics uses insights from psychology, anthropology, sociology and the cognitive sciences to come up with more realistic models of how people think and make decisions. Where these decisions tend to be flawed from an economic point of view, governments can intervene with policies aimed at ‘nudging’ the targeted citizens towards the right decision.

All this seems fairly unobjectionable. However, things change when behavioural economists focus their attention exclusively on the behaviour of the poor. Till date, there is no evidence that monitoring and ‘nudging’ the behaviour of the world’s poor is a better route to alleviate poverty than, say, monitoring and ‘nudging’ the behaviour of the financial elite. Surely the latter cannot be deemed as altogether rational economic agents — not after the 2008 crisis?

The second assumption of behavioural economics — presented as a new ‘finding’ based on research, and regurgitated wholesale by the 2015 WDR — is that the poor are less intelligent than the rich. It is an obnoxious idea, and also politically incorrect. Of course, this is not stated in as many words.

The correct way to say it, then, is to state that “the context of poverty” depletes a person’s “bandwidth” — the mental resources necessary to think properly — as a result of which he or she is, well, a poor decision-maker, especially compared to those who are not in “the context of poverty”, such as the rich and the middle classes.

Lest anyone misunderstand, the authors of the report hasten to add that it’s not just the poor but anyone — even the wealthy — who, when placed in a “context” of poverty, would make wrong decisions. (For the record, it must be noted that the poor are — all else being equal — more likely to be in “the context of poverty” than the rich.)

To support these assumptions, a number of research studies are trotted out. One such study, mentioned in the report, was conducted on Indian sugarcane farmers, who typically receive their income once a year, at the time of harvest.

It was found that the farmers’ IQ was ten points lower before they received their harvest income than afterward (when they were flush with cash and were comparatively richer). So ideally, they should not take major financial decisions before harvest time. Such an insight into how poverty affects behaviour could have policy implications for, say, cash transfers — which can be timed, or made conditional, on displaying certain behaviours pre-determined by the state as ‘rational’.

The report states in all earnestness that poverty “shapes mindsets”. From here, it is a hop, skip, and jump to holding, as the leading behavioural economists of the day do, that the poor are poor because their poverty prevents them from thinking and acting in ways that can take them out of poverty.

Thus the focus as well as the burden/responsibility of poverty-alleviation would shift from the state — from macroeconomic policy, from having to provide employment, health and education — to changing the behaviour of the poor. The structural causes of poverty — rising inequality and unemployment — as well as the behaviour of the owners of capital are evicted from the poverty debate, and no longer need be the focus of public policy.

Behavioural economics

In this context, it might be pertinent to note that the rise of behavioural economics as a discipline parallels the rise of neoliberalism, starting from the 1980s and rapidly gaining respectability and funding from the 1990s. All the leading lights of the field such as Daniel Kahneman, Amos Tversky, Robert Shiller, Senthil Mullainathan, Richard Thaler and Cass Sunstein made their mark in this period, and are heavily referenced in this report.

A fundamental principle of neoliberal thought is to find market-led solutions to socio-economic problems. No matter that poverty is often a symptom of market failure. Free market ideologues attribute poverty and all socio-economic ills to market distortions caused by state interference. The economists who get to shape the World Bank’s WDRs are chosen for their ability to toe this line.

On the odd occasion that the lead author of a WDR made a bid for intellectual independence, he had to make an untimely exit. For the 2000-01 WDR, titled ‘Attacking Poverty’, the original draft prepared by the distinguished development economist Ravi Kanbur — incidentally brought in by Joseph Stiglitz — spoke of the need to build effective safety nets for the poor before the introduction of free market reforms.

Both Mr. Kanbur and Mr. Stiglitz were out of the World Bank before the report was. As the economist Robert Wade points out in an essay on this episode, titled ‘Showdown at the World Bank’, the version eventually published no longer spoke of creating prior safety nets for the poor. It instead called for putting them in place “simultaneously with labour-shedding reforms”.

The point of this detour into WDR history is that — to borrow the jargon of behavioural economics — the overarching necessity to conform to free market ideology may be said to impose a ‘cognitive tax’ on World Bank economists, as a result of which their ‘mental models’ do not permit the ‘framing’ of poverty in ways that may contradict this ideology.

The Keynesian formula of safety nets from the free market may well be permanently banished from the policy agenda. But that still leaves unresolved the problem of how to manage the social and political consequences of the widening income gap between the 1 per cent and the 99 per cent. This is critical because growing discontent could lead to political instability. After all, in order for markets to function, and commodities to flow freely and predictably, the excluded masses must be taught to behave. This is where behavioural economics comes in.

Action and behaviour

In order to change the behaviour of the poor, one must first understand it. It is this understanding that behavioural economics promises to codify into knowledge. To be sure, the WDR readily acknowledges that even the rich, the economists, and the World Bank staff themselves, might be subject to cognitive biases.

But nowhere in its 230-odd pages does the report present an instance, or even a hypothetical example, of a behavioural economics-inspired policy intervention whose target is, say, a class of billionaire investors, despite the fact that today, compared to the poor, this is a group that wields far more influence, per capita, on a nation’s economic destiny. Changing their behaviour — for instance, manipulating them into deploying their billions on productive rather than speculative investments — could generate more beneficial, and more effective, outcomes than micro-manipulating the financial decisions of a poor peasant.

A major confusion that dogs this report is the conflation of ‘action’ and ‘behaviour’. The term ‘behaviour’ comes with the baggage of the empirical sciences. It is typically used with reference to animals and objects under scientific observation. Behaviours can be studied for patterns. To the extent that human beings are also animals, they can also be said to exhibit behaviours. But what makes them human is precisely their capacity to transcend behaviour patterns — in other words, to act.

The political theorist Hannah Arendt, in The Human Condition, speaks of three kinds of human activity: labour, work and action. Of the three, what distinguishes action is its political nature. When behaviourist economics speaks of poverty as a “cognitive tax”, it writes ‘action’ — the political agency of the poor — out of the equation.

As democratic nation states reorient themselves to being accountable to global financial markets, non-democratic bodies such as the World Trade Organization, and trade agreements such as General Agreement on Tariffs and Trade and Trade in Services Agreement , they will necessarily become less responsive to the aspirations of their own citizens. With overt repression not always the most felicitous or cost-effective policy option, it has become imperative to find ways and means to ideologically tame the economically excluded. Hence the new focus on the minds and behaviour of the poor.

Behavioural economics, insofar as it is concerned with the behaviour of people in poverty — and it is this stream which dominates this year’s WDR — is simply the latest addition to the neo-liberal toolkit of political management.

Sunday 28 June 2015

The moral crusade against Greece must be opposed

Zoe Williams in The Guardian


 
‘Greece is being sacrificed to maintain a set of delusions that enfeebles us all.’ Illustration by Robert G Fresson


‘This is our political alternative to neoliberalism and to the neoliberal process of European integration: democracy, more democracy and even deeper democracy,” said Alexis Tsipras on 18 January 2014 in a debate organised by the Dutch Socialist party in Amersfoort. Now the moment of deepest democracy looms, as the Greek people go to the polls on Sunday to vote for or against the next round of austerity.

Unfortunately, Sunday’s choice will be between endless austerity and immediate chaos. As comfortable as it is to argue from the sidelines that maybe Grexit in the medium term won’t hurt as much as 30 years’ drag on GDP from swingeing repayments, no sane person wants either. The vision that Syriza swept to power on was that if you spoke truth to the troika plainly and in broad daylight, they would have to acknowledge that austerity was suffocating Greece. 

They have acknowledged no such thing. Whatever else one could say about the handling of the crisis, and whatever becomes of the euro, Sunday will be the moment that unstoppable democracy meets immovable supra-democracy. The Eurogroup has already won: the Greek people can vote any way they like – but what they want, they cannot have.

On Saturday the Eurogroup broke with its tradition of unanimity, issuing a petulant statement “supported by all members except the Greek member”. Yanis Varoufakis, the Greek finance minister, sought legal advice on whether the group was allowed to exclude him, and received the extraordinary reply: “The Eurogroup is an informal group. Thus it is not bound by treaties or written regulations. While unanimity is conventionally adhered to, the Eurogroup president is not bound to explicit rules.” Or, to put it another way: “We never had any accountability in the first place, sucker.”

More striking still is this line of the statement: “The Eurogroup has been open until the very last moment to further support the Greek people through a continued growth-oriented programme.” The measures enforced by the troika have created an economic contraction akin to that caused by war. With unemployment at 25% and youth unemployment at nearly half, 40% of children now live below the poverty line. The latest offer to Greece promises more of the same. The idea that any of this is oriented towards growth is demonstrably false. The Eurogroup president, Jeroen Dijsselbloem, has started to assert that black is white.

And that brings us to the crux of the troika’s programme: what is the point of reducing this country to rubble? The stated intention at the start of the austerity package was to restore order: allow Greece to take a short hit to its GDP in the interests of building a stronger, more balanced economy in the long run. As it became clear that growth was not restored and that even on its own terms – the creditor must come first – the plan was failing, the line changed. It became a moral crusade, a collective punishment of the Greeks.

In 2012 the head of the IMF, Christine Lagarde, said in an interview with this newspaper, “Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax. And I think they should also help themselves collectively.” How? “By all paying their tax.” At the time, it sounded strange: how, in a country of cripplingly high unemployment, with whole families living off the depleted income of one pensioner, was the answer going to come from tax?

She was offering not a solution but a narrative: the Greeks were in this situation because they were bad people. They wanted a beneficent state, but they didn’t want to pool their resources to create one. The IMF was merely the instrument of a discipline they dearly needed. This line has broadly held – the debtors are presented as morally weaker than the creditors. To give them any concessions would be to reward their laziness and selfishness. The fact that debt is a two-way street – that the returns on debt exist because of the risk that the money might be lost, and creditors have their own moral duty to accept losses when they arise – is erased by this telling of the events.

Also airbrushed out of that story is what the late economist Wynne Godley called (in 1992!) the “lacuna in the Maastricht programme”: that while its single-currency proposal made provision for a central bank, it had nothing to say on the matter of what would replace the democratic institutions – the national governments whose power, once they had no control over their own currency, would be limited. Now we have our answer: the strongest takes control. At the moment, Germany knows best. How do we know they know best? Because they are the richest. The euro was founded on the idea that the control of currency was apolitical. It has destroyed that myth, and taken democracy down with it.

These talks did not fail by accident. The Greeks have to be humiliated, because the alternative – of treating them as equal parties or “adults”, as Lagarde wished them to be – would lead to a debate about the Eurogroup: what its foundations are, what accountability would look like, and what its democratic levers are – if indeed it has any. Solidarity with Greece means everyone, in and outside the single currency, forcing this conversation: the country is being sacrificed to maintain a set of delusions that enfeebles us all.