Sunday 5 February 2017
Friday 3 February 2017
Leavers complain, but they’ve shared the benefits of cheap EU labour
John Harris in The Guardian
The idea that Peterborough feels like the future may seem unlikely. But it’s true: this bustling city with a population of 190,000 really does feel as if it’s on the social and economic cutting edge.
Brand new housing developments extend into the distance, as does rush-hour traffic. On its southern edgelands is Kingston Park, a surreal clump of vast warehouses and distribution sheds that includes an unbelievably large Amazon “fulfilment centre”, and one empty newly built structure, seemingly waiting for another multinational to fill it. Throughout the day, walkways and roads nearby are smattered with people in hi-vis jackets, living the zero-hours life, and trying to make the best of it.
Talk to them – Hungarians, Lithuanians and Bulgarians – and you’re reminded of two things about this part of England: the presence of large communities from central and eastern Europe; and the fact that their long-hours, low-wage work sits behind parts of the economy we all tap into every day.
In Peterborough it is warehousing and distribution; in nearby Wisbech, the food industry. Meanwhile, modern lives flip between trips to Aldi or Lidl, and online shopping sprees. Make no mistake: it is these people’s toil that the whole circus depends on.
As the article 50 debate grinds on, Downing Street has reportedly been warned that “at least half a dozen” Conservative MPs may join those from other parties to call for a legal guarantee that the 3.3 million EU nationals living in the UK will be able to stay. David Davis, the Brexit secretary, says nobody would be “throwing people out of Britain”, though his department’s white paper published on Thursday offers nothing more concrete than the statement, “We want to secure the status of EU citizens who are already living in the UK … as early as we can.”
Until negotiations are under way, certainty is obviously a non-starter. Besides, whatever the eventual legal outcome, the conversation about Brexit – which was backed by 61% of Peterborough’s voters – may already be sending out the cultural signal that migrants should either go home or not bother coming. Whatever, talk to such people here about their future and the conversation instantly pushes abstract matters of negotiating stances to one side: questions about the EU are raw and visceral.
In a country as class-bound as ours, the idea of some kind of British dream might seem incredible. But for many of the people who have come to this part of England from the former communist bloc, the idea of the UK as a land of opportunity is real. And for some Polish people in particular, it seems to have come true: you start working insane hours in a minimum-wage job, then move up to a middle-management position, and eventually buy a house. Starting a small business may be an option. Meanwhile, whatever your career status, you will have kids who are effectively British – or, as everyone here puts it, English.
How odd that such a quintessentially Thatcherite ideal is being put under threat by her political heirs. “There are fears that they might chase us out of here, fears of deportations,” says one woman working in a Polish-owned food shop. “But life goes on.”
I’m told there have been rumours that, with the formal triggering of article 50 in March, EU citizens will suddenly not be allowed into the UK, even if they are coming back after a trip home. “It is stressful,” says Petya, who came to the UK from Bulgaria. “People are not sure if they can leave … or even if they can afford to stay.” The falling value of the pound also plays on people’s minds.
In Wisbech, Lionel Sheffield is the boss of a firm, Rapid Recruitment, that supplies largely eastern European workers to local businesses. He reckons that applications to be on his books from EU countries fell 50% immediately after the referendum, and are now 25% down year-on-year. He fears a “precipice”.
David Orr, who owns local packaging firm Fencor, uses temporary workers whose numbers fluctuate with his business cycles. He’s written to ministers asking how this will work post-Brexit, and says the government is “not even bothering to listen”.
Orr says he has been pointed towards so-called tier 2 work visas, which involve formally becoming a “sponsor” approved by the UK Border Agency, a licence costing £536, and the obligation to put adverts in jobcentres for at least 28 days. He recently wrote to the home secretary warning that “the outlook at present looks frighteningly like the autumn of 2009 – the start of the last recession – [but] the big difference is that this time most of the economic damage will be self-inflicted”.
Left-leaning people may read about such cases and respond with moralistic sighs. Why, they may wonder, are businesses reliant on all that agency labour? But try coming up with a model of consumerism that avoids huge seasonal fluctuations. As Brexit may yet prove, coming down hard on this part of the economy would lead to lots of businesses going under.
It may turn out that the EU’s key contribution to Britain’s economy and society over the past 15 years was not the high-flown stuff about European cooperation and internationalism, but the way that it provided a huge pool of workers who would do jobs most British people would balk at, and thereby sustained a fragile mess of stagnating wages, skyrocketing credit, cheap food and consumerism-as-culture.
Millions of leave voters have experienced the magical benefits of all that just as much as those who voted remain. And if the whole model starts to unravel, their howls of dismay will be just as loud. It would be a very British outcome: in the land of having your cake and eating it, proof that if you play fast and loose with the people who do the baking, the fun soon stops.
The idea that Peterborough feels like the future may seem unlikely. But it’s true: this bustling city with a population of 190,000 really does feel as if it’s on the social and economic cutting edge.
Brand new housing developments extend into the distance, as does rush-hour traffic. On its southern edgelands is Kingston Park, a surreal clump of vast warehouses and distribution sheds that includes an unbelievably large Amazon “fulfilment centre”, and one empty newly built structure, seemingly waiting for another multinational to fill it. Throughout the day, walkways and roads nearby are smattered with people in hi-vis jackets, living the zero-hours life, and trying to make the best of it.
Talk to them – Hungarians, Lithuanians and Bulgarians – and you’re reminded of two things about this part of England: the presence of large communities from central and eastern Europe; and the fact that their long-hours, low-wage work sits behind parts of the economy we all tap into every day.
In Peterborough it is warehousing and distribution; in nearby Wisbech, the food industry. Meanwhile, modern lives flip between trips to Aldi or Lidl, and online shopping sprees. Make no mistake: it is these people’s toil that the whole circus depends on.
As the article 50 debate grinds on, Downing Street has reportedly been warned that “at least half a dozen” Conservative MPs may join those from other parties to call for a legal guarantee that the 3.3 million EU nationals living in the UK will be able to stay. David Davis, the Brexit secretary, says nobody would be “throwing people out of Britain”, though his department’s white paper published on Thursday offers nothing more concrete than the statement, “We want to secure the status of EU citizens who are already living in the UK … as early as we can.”
Until negotiations are under way, certainty is obviously a non-starter. Besides, whatever the eventual legal outcome, the conversation about Brexit – which was backed by 61% of Peterborough’s voters – may already be sending out the cultural signal that migrants should either go home or not bother coming. Whatever, talk to such people here about their future and the conversation instantly pushes abstract matters of negotiating stances to one side: questions about the EU are raw and visceral.
In a country as class-bound as ours, the idea of some kind of British dream might seem incredible. But for many of the people who have come to this part of England from the former communist bloc, the idea of the UK as a land of opportunity is real. And for some Polish people in particular, it seems to have come true: you start working insane hours in a minimum-wage job, then move up to a middle-management position, and eventually buy a house. Starting a small business may be an option. Meanwhile, whatever your career status, you will have kids who are effectively British – or, as everyone here puts it, English.
How odd that such a quintessentially Thatcherite ideal is being put under threat by her political heirs. “There are fears that they might chase us out of here, fears of deportations,” says one woman working in a Polish-owned food shop. “But life goes on.”
I’m told there have been rumours that, with the formal triggering of article 50 in March, EU citizens will suddenly not be allowed into the UK, even if they are coming back after a trip home. “It is stressful,” says Petya, who came to the UK from Bulgaria. “People are not sure if they can leave … or even if they can afford to stay.” The falling value of the pound also plays on people’s minds.
In Wisbech, Lionel Sheffield is the boss of a firm, Rapid Recruitment, that supplies largely eastern European workers to local businesses. He reckons that applications to be on his books from EU countries fell 50% immediately after the referendum, and are now 25% down year-on-year. He fears a “precipice”.
David Orr, who owns local packaging firm Fencor, uses temporary workers whose numbers fluctuate with his business cycles. He’s written to ministers asking how this will work post-Brexit, and says the government is “not even bothering to listen”.
Orr says he has been pointed towards so-called tier 2 work visas, which involve formally becoming a “sponsor” approved by the UK Border Agency, a licence costing £536, and the obligation to put adverts in jobcentres for at least 28 days. He recently wrote to the home secretary warning that “the outlook at present looks frighteningly like the autumn of 2009 – the start of the last recession – [but] the big difference is that this time most of the economic damage will be self-inflicted”.
Left-leaning people may read about such cases and respond with moralistic sighs. Why, they may wonder, are businesses reliant on all that agency labour? But try coming up with a model of consumerism that avoids huge seasonal fluctuations. As Brexit may yet prove, coming down hard on this part of the economy would lead to lots of businesses going under.
It may turn out that the EU’s key contribution to Britain’s economy and society over the past 15 years was not the high-flown stuff about European cooperation and internationalism, but the way that it provided a huge pool of workers who would do jobs most British people would balk at, and thereby sustained a fragile mess of stagnating wages, skyrocketing credit, cheap food and consumerism-as-culture.
Millions of leave voters have experienced the magical benefits of all that just as much as those who voted remain. And if the whole model starts to unravel, their howls of dismay will be just as loud. It would be a very British outcome: in the land of having your cake and eating it, proof that if you play fast and loose with the people who do the baking, the fun soon stops.
How corporate dark money is taking power on both sides of the Atlantic
George Monbiot in The Guardian
It took corporate America a while to warm to Donald Trump. Some of his positions, especially on trade, horrified business leaders. Many of them favoured Ted Cruz or Scott Walker. But once Trump had secured the nomination, the big money began to recognise an unprecedented opportunity.
Trump was prepared not only to promote the cause of corporations in government, but to turn government into a kind of corporation, staffed and run by executives and lobbyists. His incoherence was not a liability, but an opening: his agenda could be shaped. And the dark money network already developed by some American corporations was perfectly positioned to shape it. Dark money is the term used in the US for the funding of organisations involved in political advocacy that are not obliged to disclose where the money comes from. Few people would see a tobacco company as a credible source on public health, or a coal company as a neutral commentator on climate change. In order to advance their political interests, such companies must pay others to speak on their behalf.
Soon after the second world war, some of America’s richest people began setting up a network of thinktanks to promote their interests. These purport to offer dispassionate opinions on public affairs. But they are more like corporate lobbyists, working on behalf of those who fund them.
We have no hope of understanding what is coming until we understand how the dark money network operates. The remarkable story of a British member of parliament provides a unique insight into this network, on both sides of the Atlantic. His name is Liam Fox. Six years ago, his political career seemed to be over when he resigned as defence secretary after being caught mixing his private and official interests. But today he is back on the front bench, and with a crucial portfolio: secretary of state for international trade.
In 1997, the year the Conservatives lost office to Tony Blair, Fox, who is on the hard right of the Conservative party, founded an organisation called The Atlantic Bridge. Its patron was Margaret Thatcher. On its advisory council sat future cabinet ministers Michael Gove, George Osborne, William Hague and Chris Grayling. Fox, a leading campaigner for Brexit, described the mission of Atlantic Bridge as “to bring people together who have common interests”. It would defend these interests from “European integrationists who would like to pull Britain away from its relationship with the United States”.
Atlantic Bridge was later registered as a charity. In fact it was part of the UK’s own dark money network: only after it collapsed did we discover the full story of who had funded it. Its main sponsor was the immensely rich Michael Hintze, who worked at Goldman Sachs before setting up the hedge fund CQS. Hintze is one of the Conservative party’s biggest donors. In 2012 he was revealed as a funder of the Global Warming Policy Foundation, which casts doubt on the science of climate change. As well as making cash grants and loans to Atlantic Bridge, he lent Fox his private jet to fly to and from Washington.
Another funder was the pharmaceutical company Pfizer. It paid for a researcher at Atlantic Bridge called Gabby Bertin. She went on to become David Cameron’s press secretary, and now sits in the House of Lords: Cameron gave her a life peerage in his resignation honours list.
Trade secretary Liam Fox. Photograph: Daniel Leal-Olivas/AFP/Getty Images
In 2007, a group called the American Legislative Exchange Council (Alec) set up a sister organisation, the Atlantic Bridge Project. Alec is perhaps the most controversial corporate-funded thinktank in the US. It specialises in bringing together corporate lobbyists with state and federal legislators to develop “model bills”. The legislators and their families enjoy lavish hospitality from the group, then take the model bills home with them, to promote as if they were their own initiatives.
Alec has claimed that more than 1,000 of its bills are introduced by legislators every year, and one in five of them becomes law. It has been heavily funded by tobacco companies, the oil company Exxon, drug companies and Charles and David Koch – the billionaires who founded the first Tea Party organisations. Pfizer, which funded Bertin’s post at Atlantic Bridge, sits on Alec’s corporate board. Some of the most contentious legislation in recent years, such as state bills lowering the minimum wage, bills granting corporations immunity from prosecution and the “ag-gag” laws – forbidding people to investigate factory farming practices – were developed by Alec.
To run the US arm of Atlantic Bridge, Alec brought in its director of international relations, Catherine Bray. She is a British woman who had previously worked forthe Conservative MEP Richard Ashworth and the Ukip MEP Roger Helmer. Bray has subsequently worked for Conservative MEP and Brexit campaigner Daniel Hannan. Her husband is Wells Griffith, the battleground states director for Trump’s presidential campaign.
Among the members of Atlantic Bridge’s US advisory council were the ultra-conservative senators James Inhofe, Jon Kyl and Jim DeMint. Inhofe is reported to have received over $2m in campaign finance from coal and oil companies. Both Koch Industries and ExxonMobil have been major donors.
Kyl, now retired, is currently acting as the “sherpa” guiding Jeff Sessions’s nomination as Trump’s attorney general through the Senate. Jim DeMint resigned his seat in the Senate to become president of the Heritage Foundation – the thinktank founded with a grant from Joseph Coors of the Coors brewing empire, and built up with money from the banking and oil billionaire Richard Mellon Scaife. Like Alec, it has been richly funded by the Koch brothers. Heritage, under DeMint’s presidency, drove the attempt to ensure that Congress blocked the federal budget, temporarily shutting down the government in 2013. Fox’s former special adviser at the Ministry of Defence, an American called Luke Coffey, now works for the foundation.
Former Arizona senator Jon Kyl. Photograph: Saul Loeb/AFP/Getty Images
The Heritage Foundation is now at the heart of Trump’s administration. Its board members, fellows and staff comprise a large part of his transition team. Among them are Rebekah Mercer, who sits on Trump’s executive committee; Steven Groves and Jim Carafano (State Department); Curtis Dubay (Treasury); and Ed Meese, Paul Winfree, Russ Vought and John Gray (management and budget). CNN reports that “no other Washington institution has that kind of footprint in the transition”.
Trump’s extraordinary plan to cut federal spending by $10.5tn was drafted by the Heritage Foundation, which called it a “blueprint for a new administration”. Vought and Gray, who moved on to Trump’s team from Heritage, are now turning this blueprint into his first budget.
This will, if passed, inflict devastating cuts on healthcare, social security, legal aid, financial regulation and environmental protections; eliminate programmes to prevent violence against women, defend civil rights and fund the arts; and will privatise the Corporation for Public Broadcasting. Trump, as you follow this story, begins to look less like a president and more like an intermediary, implementing an agenda that has been handed down to him.
In July last year, soon after he became trade secretary, Liam Fox flew to Washington. One of his first stops was a place he has visited often over the past 15 years: the office of the Heritage Foundation, where he spoke to, among others, Jim DeMint. A freedom of information request reveals that one of the topics raised at the meeting was the European ban on American chicken washed in chlorine: a ban that producers hope the UK will lift under a new trade agreement. Afterwards, Fox wrote to DeMint, looking forward to “working with you as the new UK government develops its trade policy priorities, including in high value areas that we discussed such as defence”.
How did Fox get to be in this position, after the scandal that brought him down in 2011? The scandal itself provides a clue: it involved a crossing of the boundaries between public and private interests. The man who ran the UK branch of Atlantic Bridge was his friend Adam Werritty, who operated out of Michael Hintze’s office building. Werritty’s work became entangled with Fox’s official business as defence secretary. Werritty, who carried a business card naming him as Fox’s adviser but was never employed by the Ministry of Defence, joined the secretary of state on numerous ministerial visits overseas, and made frequent visits to Fox’s office.
By the time details of this relationship began to leak, the charity commission had investigated Atlantic Bridge and determined that its work didn’t look very charitable. It had to pay back the tax from which it had been exempted (Hintze picked up the bill). In response, the trustees shut the organisation down. As the story about Werritty’s unauthorised involvement in government business began to grow, Fox made a number of misleading statements. He was left with no choice but to resign.
When Theresa May brought Fox back into government, it was as strong a signal as we might receive about the intentions of her government. The trade treaties that Fox is charged with developing set the limits of sovereignty. US food and environmental standards tend to be lower than Britain’s, and will become lower still if Trump gets his way. Any trade treaty we strike will create a common set of standards for products and services. Trump’s administration will demand that ours are adjusted downwards, so that US corporations can penetrate our markets without having to modify their practices. All the cards, post-Brexit vote, are in US hands: if the UK doesn’t cooperate, there will be no trade deal.
May needed someone who is unlikely to resist. She chose Fox, who has become an indispensable member of her team. The shadow diplomatic mission he developed through Atlantic Bridge plugs him straight into the Trump administration.
Long before Trump won, campaign funding in the US had systematically corrupted the political system. A new analysis by US political scientists finds an almost perfect linear relationship, across 32 years, between the money gathered by the two parties for congressional elections and their share of the vote. But there has also been a shift over these years: corporate donors have come to dominate this funding.
By tying our fortunes to those of the United States, the UK government binds us into this system. This is part of what Brexit was about: European laws protecting the public interest were portrayed by Conservative Eurosceptics as intolerable intrusions on corporate freedom. Taking back control from Europe means closer integration with the US. The transatlantic special relationship is a special relationship between political and corporate power. That power is cemented by the networks Liam Fox helped to develop.
In April 1938, President Franklin Roosevelt sent the US Congress the following warning: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” It is a warning we would do well to remember.
It took corporate America a while to warm to Donald Trump. Some of his positions, especially on trade, horrified business leaders. Many of them favoured Ted Cruz or Scott Walker. But once Trump had secured the nomination, the big money began to recognise an unprecedented opportunity.
Trump was prepared not only to promote the cause of corporations in government, but to turn government into a kind of corporation, staffed and run by executives and lobbyists. His incoherence was not a liability, but an opening: his agenda could be shaped. And the dark money network already developed by some American corporations was perfectly positioned to shape it. Dark money is the term used in the US for the funding of organisations involved in political advocacy that are not obliged to disclose where the money comes from. Few people would see a tobacco company as a credible source on public health, or a coal company as a neutral commentator on climate change. In order to advance their political interests, such companies must pay others to speak on their behalf.
Soon after the second world war, some of America’s richest people began setting up a network of thinktanks to promote their interests. These purport to offer dispassionate opinions on public affairs. But they are more like corporate lobbyists, working on behalf of those who fund them.
We have no hope of understanding what is coming until we understand how the dark money network operates. The remarkable story of a British member of parliament provides a unique insight into this network, on both sides of the Atlantic. His name is Liam Fox. Six years ago, his political career seemed to be over when he resigned as defence secretary after being caught mixing his private and official interests. But today he is back on the front bench, and with a crucial portfolio: secretary of state for international trade.
In 1997, the year the Conservatives lost office to Tony Blair, Fox, who is on the hard right of the Conservative party, founded an organisation called The Atlantic Bridge. Its patron was Margaret Thatcher. On its advisory council sat future cabinet ministers Michael Gove, George Osborne, William Hague and Chris Grayling. Fox, a leading campaigner for Brexit, described the mission of Atlantic Bridge as “to bring people together who have common interests”. It would defend these interests from “European integrationists who would like to pull Britain away from its relationship with the United States”.
Atlantic Bridge was later registered as a charity. In fact it was part of the UK’s own dark money network: only after it collapsed did we discover the full story of who had funded it. Its main sponsor was the immensely rich Michael Hintze, who worked at Goldman Sachs before setting up the hedge fund CQS. Hintze is one of the Conservative party’s biggest donors. In 2012 he was revealed as a funder of the Global Warming Policy Foundation, which casts doubt on the science of climate change. As well as making cash grants and loans to Atlantic Bridge, he lent Fox his private jet to fly to and from Washington.
Another funder was the pharmaceutical company Pfizer. It paid for a researcher at Atlantic Bridge called Gabby Bertin. She went on to become David Cameron’s press secretary, and now sits in the House of Lords: Cameron gave her a life peerage in his resignation honours list.
Trade secretary Liam Fox. Photograph: Daniel Leal-Olivas/AFP/Getty Images
In 2007, a group called the American Legislative Exchange Council (Alec) set up a sister organisation, the Atlantic Bridge Project. Alec is perhaps the most controversial corporate-funded thinktank in the US. It specialises in bringing together corporate lobbyists with state and federal legislators to develop “model bills”. The legislators and their families enjoy lavish hospitality from the group, then take the model bills home with them, to promote as if they were their own initiatives.
Alec has claimed that more than 1,000 of its bills are introduced by legislators every year, and one in five of them becomes law. It has been heavily funded by tobacco companies, the oil company Exxon, drug companies and Charles and David Koch – the billionaires who founded the first Tea Party organisations. Pfizer, which funded Bertin’s post at Atlantic Bridge, sits on Alec’s corporate board. Some of the most contentious legislation in recent years, such as state bills lowering the minimum wage, bills granting corporations immunity from prosecution and the “ag-gag” laws – forbidding people to investigate factory farming practices – were developed by Alec.
To run the US arm of Atlantic Bridge, Alec brought in its director of international relations, Catherine Bray. She is a British woman who had previously worked forthe Conservative MEP Richard Ashworth and the Ukip MEP Roger Helmer. Bray has subsequently worked for Conservative MEP and Brexit campaigner Daniel Hannan. Her husband is Wells Griffith, the battleground states director for Trump’s presidential campaign.
Among the members of Atlantic Bridge’s US advisory council were the ultra-conservative senators James Inhofe, Jon Kyl and Jim DeMint. Inhofe is reported to have received over $2m in campaign finance from coal and oil companies. Both Koch Industries and ExxonMobil have been major donors.
Kyl, now retired, is currently acting as the “sherpa” guiding Jeff Sessions’s nomination as Trump’s attorney general through the Senate. Jim DeMint resigned his seat in the Senate to become president of the Heritage Foundation – the thinktank founded with a grant from Joseph Coors of the Coors brewing empire, and built up with money from the banking and oil billionaire Richard Mellon Scaife. Like Alec, it has been richly funded by the Koch brothers. Heritage, under DeMint’s presidency, drove the attempt to ensure that Congress blocked the federal budget, temporarily shutting down the government in 2013. Fox’s former special adviser at the Ministry of Defence, an American called Luke Coffey, now works for the foundation.
Former Arizona senator Jon Kyl. Photograph: Saul Loeb/AFP/Getty Images
The Heritage Foundation is now at the heart of Trump’s administration. Its board members, fellows and staff comprise a large part of his transition team. Among them are Rebekah Mercer, who sits on Trump’s executive committee; Steven Groves and Jim Carafano (State Department); Curtis Dubay (Treasury); and Ed Meese, Paul Winfree, Russ Vought and John Gray (management and budget). CNN reports that “no other Washington institution has that kind of footprint in the transition”.
Trump’s extraordinary plan to cut federal spending by $10.5tn was drafted by the Heritage Foundation, which called it a “blueprint for a new administration”. Vought and Gray, who moved on to Trump’s team from Heritage, are now turning this blueprint into his first budget.
This will, if passed, inflict devastating cuts on healthcare, social security, legal aid, financial regulation and environmental protections; eliminate programmes to prevent violence against women, defend civil rights and fund the arts; and will privatise the Corporation for Public Broadcasting. Trump, as you follow this story, begins to look less like a president and more like an intermediary, implementing an agenda that has been handed down to him.
In July last year, soon after he became trade secretary, Liam Fox flew to Washington. One of his first stops was a place he has visited often over the past 15 years: the office of the Heritage Foundation, where he spoke to, among others, Jim DeMint. A freedom of information request reveals that one of the topics raised at the meeting was the European ban on American chicken washed in chlorine: a ban that producers hope the UK will lift under a new trade agreement. Afterwards, Fox wrote to DeMint, looking forward to “working with you as the new UK government develops its trade policy priorities, including in high value areas that we discussed such as defence”.
How did Fox get to be in this position, after the scandal that brought him down in 2011? The scandal itself provides a clue: it involved a crossing of the boundaries between public and private interests. The man who ran the UK branch of Atlantic Bridge was his friend Adam Werritty, who operated out of Michael Hintze’s office building. Werritty’s work became entangled with Fox’s official business as defence secretary. Werritty, who carried a business card naming him as Fox’s adviser but was never employed by the Ministry of Defence, joined the secretary of state on numerous ministerial visits overseas, and made frequent visits to Fox’s office.
By the time details of this relationship began to leak, the charity commission had investigated Atlantic Bridge and determined that its work didn’t look very charitable. It had to pay back the tax from which it had been exempted (Hintze picked up the bill). In response, the trustees shut the organisation down. As the story about Werritty’s unauthorised involvement in government business began to grow, Fox made a number of misleading statements. He was left with no choice but to resign.
When Theresa May brought Fox back into government, it was as strong a signal as we might receive about the intentions of her government. The trade treaties that Fox is charged with developing set the limits of sovereignty. US food and environmental standards tend to be lower than Britain’s, and will become lower still if Trump gets his way. Any trade treaty we strike will create a common set of standards for products and services. Trump’s administration will demand that ours are adjusted downwards, so that US corporations can penetrate our markets without having to modify their practices. All the cards, post-Brexit vote, are in US hands: if the UK doesn’t cooperate, there will be no trade deal.
May needed someone who is unlikely to resist. She chose Fox, who has become an indispensable member of her team. The shadow diplomatic mission he developed through Atlantic Bridge plugs him straight into the Trump administration.
Long before Trump won, campaign funding in the US had systematically corrupted the political system. A new analysis by US political scientists finds an almost perfect linear relationship, across 32 years, between the money gathered by the two parties for congressional elections and their share of the vote. But there has also been a shift over these years: corporate donors have come to dominate this funding.
By tying our fortunes to those of the United States, the UK government binds us into this system. This is part of what Brexit was about: European laws protecting the public interest were portrayed by Conservative Eurosceptics as intolerable intrusions on corporate freedom. Taking back control from Europe means closer integration with the US. The transatlantic special relationship is a special relationship between political and corporate power. That power is cemented by the networks Liam Fox helped to develop.
In April 1938, President Franklin Roosevelt sent the US Congress the following warning: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” It is a warning we would do well to remember.
Thursday 2 February 2017
Beyond gonorrhoea and cholera
Jawed Naqvi in The Dawn
COMPARISONS have been made between Donald Trump and Narendra Modi. They may have several facets of personality and politics in common but their routes to power were entirely different.
Modi’s road to becoming prime minister was enabled by bloodshed and a state that is swamped by a rapacious variant of capitalist ideology that profits from Hindutva. The phlegmatic Manmohan Singh was its misleading poster boy. Trump’s rise to power was strongly resisted, on the other hand, by a subtler corporate system driven by the deep state. Genial Obama was the veneer.
Manmohan Singh, for all his mild manners, classified the country’s most impoverished tribespeople as the biggest security challenge. On behalf of usurious capitalism, he unleashed a military campaign against the forest dwellers in which women continue to be raped and homes uprooted. Some women abused and tortured by the police in Chhattisgarh were in Delhi to share their ordeal on Sunday. Singh unleashed state terror on anti-nuclear villagers who opposed controversial Russian-built nuclear reactors near their southern hamlets, which they fear are potentially worse than Fukushima’s.
Singh prophesied that Modi, if he won, would be a disaster for India. But Modi has only added narrow nationalism and its bloodier prescriptions to the quiver he inherited from Singh. Business tycoons that supported Singh are sworn allies of Modi.
Obama, like his predecessors, dropped bombs at will over Afghanistan, and contrived, in harness with Hillary Clinton, the depredation of a secular Syria and a secular Libya. Trump, albeit from a white supremacist plank, has asked inconvenient questions about the decimation of secular Arab satraps who had successfully kept the lid on a fanatical religious genie. Modi has uncorked the evil spirit of Hindutva, not learning from the tragedy that befell the neighbours when Ziaul Haq let loose Islamic revivalism as a tool of governance.
As Singh thought of Modi, Obama too cautioned that Trump would be disastrous for America. Singh and Obama were prophetic about their successors; of that there should be no doubt. But they were both accomplices in their rise. That too is indisputable.
There is a preponderance of embedded journalism in both chest-thumping democracies, embedded meaning lying in bed with the state. As his American cousins had done in Iraq, a BBC journalist, unbelievably, rode astride a tank to liberate Kabul. His Indian counterparts brought the Kargil war into Indian drawing rooms with their helmets on. Images of the bloody war on colour TV, replete with an American-style trail of body bags of fallen soldiers all the way to their usefully filmed funeral scenes helped enliven a genre of nationalism that was barely dormant.
Nationalism thus fanned mutated soon enough to become a scourge for many helmet-embracing journalists, but the penny still doesn’t seem to have dropped. One of them says she loves Kashmir and the Indian army in the same breath but fails to notice the inherent contrariness of her loves. And she also loves capitalism, the Indian TV anchor who left her job recently would say. There is nothing in any of her three loves — Kashmir, army, and capitalism — that reveals a less than robust nationalist bone.
A burgeoning mass of Indians is similarly failing to see the umbilical ties between militarism and communalism, between nationalism and fascism of which India’s rapacious genre of capitalism is an energising force. Adam Smith would have cringed.
Trump’s luck with the media was opposite of Modi’s. CNN and the New York Times have emerged as his most implacable critics in the American media. He struggled for a while even with arch-right-wing Fox News. All were complicit in the tragic unravelling of the secular Iraqi state and earlier in the sacking of Afghanistan. The media sold unverified tales of hidden weapons of mass destruction. Remember?
Trump has said many things that are downright gut-wrenching to any liberal sensibility, but one belief he has held on to would make even his Israeli allies hate him. That’s his criticism of Iraq’s invasion by America.
Trump’s visa restrictions on Muslims, however, are a copyright infringement. Modi excluded Muslim asylum seekers first. Trump is soft on Syria’s Christian refugees to placate a domestic constituency; Modi is wooing Hindu Bangladeshis.
In a world where old problems, new headaches and daily mood swings are all delivered through television, there is a distinct possibility for the masses to be swayed by an absence of reason.
Early experiments showed we could be persuaded to choose a brand of cigarettes by flashing wild stallions, unrelated to the topic, in the backdrop of Marlboro country. Ford cars would leap between rugged hills to woo customers who had to otherwise pass a rigid set of driving tests to get a licence to precisely not try the tricks. Cigarettes cause cancer just as climbing vertical cliffs, if at all possible, would wreck the car if not also kill the driver. But that realisation is a rare and usually delayed intuition. The ‘informed’ choice TV boasts is, more often than not, pure bad advice.
You can’t have a debate with a TV ad. It’s a monologue. Trump and Modi have this in common. They hate to face questions. They avoid news conferences. They both tweet. They give exclusive and by implication friendly interviews. Modi speaks routinely on the radio, which has remained the most compelling means of collaring the masses since the Third Reich.
I am sure Trump will soon be discovering the miracles of the radio. Orwell’s 1984 is selling feverishly across America. The fractious opposition that helped Trump’s rise is now standing up to him. That possibility looks distant in a nuclear-tipped India where the opposition seems more troubled by the rise of Arvind Kejriwal, a democrat, than by Modi, a potential fascist. Julian Assange described Clinton and Trump as a choice between gonorrhoea and cholera. With Europe in right-wing ferment and India in free fall, Assange may soon find it difficult to tell the difference.
COMPARISONS have been made between Donald Trump and Narendra Modi. They may have several facets of personality and politics in common but their routes to power were entirely different.
Modi’s road to becoming prime minister was enabled by bloodshed and a state that is swamped by a rapacious variant of capitalist ideology that profits from Hindutva. The phlegmatic Manmohan Singh was its misleading poster boy. Trump’s rise to power was strongly resisted, on the other hand, by a subtler corporate system driven by the deep state. Genial Obama was the veneer.
Manmohan Singh, for all his mild manners, classified the country’s most impoverished tribespeople as the biggest security challenge. On behalf of usurious capitalism, he unleashed a military campaign against the forest dwellers in which women continue to be raped and homes uprooted. Some women abused and tortured by the police in Chhattisgarh were in Delhi to share their ordeal on Sunday. Singh unleashed state terror on anti-nuclear villagers who opposed controversial Russian-built nuclear reactors near their southern hamlets, which they fear are potentially worse than Fukushima’s.
Singh prophesied that Modi, if he won, would be a disaster for India. But Modi has only added narrow nationalism and its bloodier prescriptions to the quiver he inherited from Singh. Business tycoons that supported Singh are sworn allies of Modi.
Obama, like his predecessors, dropped bombs at will over Afghanistan, and contrived, in harness with Hillary Clinton, the depredation of a secular Syria and a secular Libya. Trump, albeit from a white supremacist plank, has asked inconvenient questions about the decimation of secular Arab satraps who had successfully kept the lid on a fanatical religious genie. Modi has uncorked the evil spirit of Hindutva, not learning from the tragedy that befell the neighbours when Ziaul Haq let loose Islamic revivalism as a tool of governance.
As Singh thought of Modi, Obama too cautioned that Trump would be disastrous for America. Singh and Obama were prophetic about their successors; of that there should be no doubt. But they were both accomplices in their rise. That too is indisputable.
There is a preponderance of embedded journalism in both chest-thumping democracies, embedded meaning lying in bed with the state. As his American cousins had done in Iraq, a BBC journalist, unbelievably, rode astride a tank to liberate Kabul. His Indian counterparts brought the Kargil war into Indian drawing rooms with their helmets on. Images of the bloody war on colour TV, replete with an American-style trail of body bags of fallen soldiers all the way to their usefully filmed funeral scenes helped enliven a genre of nationalism that was barely dormant.
Nationalism thus fanned mutated soon enough to become a scourge for many helmet-embracing journalists, but the penny still doesn’t seem to have dropped. One of them says she loves Kashmir and the Indian army in the same breath but fails to notice the inherent contrariness of her loves. And she also loves capitalism, the Indian TV anchor who left her job recently would say. There is nothing in any of her three loves — Kashmir, army, and capitalism — that reveals a less than robust nationalist bone.
A burgeoning mass of Indians is similarly failing to see the umbilical ties between militarism and communalism, between nationalism and fascism of which India’s rapacious genre of capitalism is an energising force. Adam Smith would have cringed.
Trump’s luck with the media was opposite of Modi’s. CNN and the New York Times have emerged as his most implacable critics in the American media. He struggled for a while even with arch-right-wing Fox News. All were complicit in the tragic unravelling of the secular Iraqi state and earlier in the sacking of Afghanistan. The media sold unverified tales of hidden weapons of mass destruction. Remember?
Trump has said many things that are downright gut-wrenching to any liberal sensibility, but one belief he has held on to would make even his Israeli allies hate him. That’s his criticism of Iraq’s invasion by America.
Trump’s visa restrictions on Muslims, however, are a copyright infringement. Modi excluded Muslim asylum seekers first. Trump is soft on Syria’s Christian refugees to placate a domestic constituency; Modi is wooing Hindu Bangladeshis.
In a world where old problems, new headaches and daily mood swings are all delivered through television, there is a distinct possibility for the masses to be swayed by an absence of reason.
Early experiments showed we could be persuaded to choose a brand of cigarettes by flashing wild stallions, unrelated to the topic, in the backdrop of Marlboro country. Ford cars would leap between rugged hills to woo customers who had to otherwise pass a rigid set of driving tests to get a licence to precisely not try the tricks. Cigarettes cause cancer just as climbing vertical cliffs, if at all possible, would wreck the car if not also kill the driver. But that realisation is a rare and usually delayed intuition. The ‘informed’ choice TV boasts is, more often than not, pure bad advice.
You can’t have a debate with a TV ad. It’s a monologue. Trump and Modi have this in common. They hate to face questions. They avoid news conferences. They both tweet. They give exclusive and by implication friendly interviews. Modi speaks routinely on the radio, which has remained the most compelling means of collaring the masses since the Third Reich.
I am sure Trump will soon be discovering the miracles of the radio. Orwell’s 1984 is selling feverishly across America. The fractious opposition that helped Trump’s rise is now standing up to him. That possibility looks distant in a nuclear-tipped India where the opposition seems more troubled by the rise of Arvind Kejriwal, a democrat, than by Modi, a potential fascist. Julian Assange described Clinton and Trump as a choice between gonorrhoea and cholera. With Europe in right-wing ferment and India in free fall, Assange may soon find it difficult to tell the difference.
Wednesday 1 February 2017
We need the state now more than ever. But our belief in it has gone
Aditya Chakrabortty in The Guardian
Zero-hours workers '£1,000 worse off a year' than employees
At the centre of the play is a 19-year-old whose life is already over. Tamsin Carmody’s mother has died, leaving her in charge of the family. That means looking after her brother, Dean, who has been almost broken by poor mental health. When things get too much, he’ll press his hand on to a burning hob.
To scrape by, Tamsin works on zero hours in a giant distribution warehouse, packing strawberry lube, Meat Loaf albums, bottles of gin. The grim details of how the 21st-century British labourer has been reduced to cheap commodity are all here: the work boots that leave Tamsin’s feet clenched balls of pain, the countless paper cuts from folding cardboard that never get time to heal, the pleading for more work each morning. Some of this derives from Soper’s own experience. The 25-year-old has done her own zero-hours stint in a packing plant where, after calling in sick for a shift, she turned up the next day only to be ordered home: she had already been replaced.
Then there’s Dean. The government reckons he’s fit for work, despite his inability to face strangers or venture out in daylight. He loses his disability benefits, and has to enact the farce of assembling a CV and applying over and over again for jobs he won’t get and could never hold down.
And here is where a play does what a newspaper can’t and a politician won’t: the siblings’ lives are laid side by side, and the state is revealed to be just as callous, unanswerable and punitive as the employer.
FacebookTwitterPinterest Erin Doherty (Tamsin Carmody) and Joseph Quinn (Dean Carmody) in Wish List. Photograph: Tristram Kenton for the Guardian
Illustration by Nicola Jennings
I left the Royal Court theatre a few days ago, feeling as though the writer had been rifling through my and other reporters’ notebooks. In Wish List, Katherine Soper has pinned down a theme central to today’s politics – but one I’ve yet to see in print or hear from an MP. To grasp it is to understand much of what drives support for both Brexit and Trump – and just why this is such a hostile climate for the left, be it in the form of Ed Miliband or Jeremy Corbyn, Bernie Sanders or Hillary Clinton.
I left the Royal Court theatre a few days ago, feeling as though the writer had been rifling through my and other reporters’ notebooks. In Wish List, Katherine Soper has pinned down a theme central to today’s politics – but one I’ve yet to see in print or hear from an MP. To grasp it is to understand much of what drives support for both Brexit and Trump – and just why this is such a hostile climate for the left, be it in the form of Ed Miliband or Jeremy Corbyn, Bernie Sanders or Hillary Clinton.
Zero-hours workers '£1,000 worse off a year' than employees
At the centre of the play is a 19-year-old whose life is already over. Tamsin Carmody’s mother has died, leaving her in charge of the family. That means looking after her brother, Dean, who has been almost broken by poor mental health. When things get too much, he’ll press his hand on to a burning hob.
To scrape by, Tamsin works on zero hours in a giant distribution warehouse, packing strawberry lube, Meat Loaf albums, bottles of gin. The grim details of how the 21st-century British labourer has been reduced to cheap commodity are all here: the work boots that leave Tamsin’s feet clenched balls of pain, the countless paper cuts from folding cardboard that never get time to heal, the pleading for more work each morning. Some of this derives from Soper’s own experience. The 25-year-old has done her own zero-hours stint in a packing plant where, after calling in sick for a shift, she turned up the next day only to be ordered home: she had already been replaced.
Then there’s Dean. The government reckons he’s fit for work, despite his inability to face strangers or venture out in daylight. He loses his disability benefits, and has to enact the farce of assembling a CV and applying over and over again for jobs he won’t get and could never hold down.
And here is where a play does what a newspaper can’t and a politician won’t: the siblings’ lives are laid side by side, and the state is revealed to be just as callous, unanswerable and punitive as the employer.
FacebookTwitterPinterest Erin Doherty (Tamsin Carmody) and Joseph Quinn (Dean Carmody) in Wish List. Photograph: Tristram Kenton for the Guardian
Tamsin can’t meet her impossible targets of packing 400 items an hour; Dean is in no state to fill in all his job applications. Tamsin’s boss shrugs that he’s following orders: “They just get the numbers in the red and they work out how to put them in the black.” Dean’s health assessor and welfare adviser are in the pay of a government following a busted austerity strategy that relies on cutting off money to the poor.
Both have to struggle through tick-boxes, euphemistic nonsense (Tamsin’s warehouse is a “fulfilment centre”; Dean’s disabilities make him “fit for work”) and a system that grabs a lot while giving a pittance.
We’re often told that the state and the market have entirely different roles. But meet any number of the people paying the price for Britain’s crash, and you’ll see that they play almost identical parts using similar language and similar bureaucracy. And far from protecting low-paid workers from the depredations of the market, the state wants to hurl more people into it under the pretence that they are shirkers.
None of this fits with how social democrats view the state. Having attended my fair share of Labour and other leftwing political meetings, I know that a staple feature is that some grey-haired man in a jumper will leap up towards the end and launch into a good-hearted defence of the state. Public investment, social security, industrial strategy: all will circle back to the state; all will be met with murmurs of approval.
This has happened without the pundits and politicians noticing
And all are a million miles away from the experiences I regularly hear while reporting. I think about Lisa Chapman in Northamptonshire frantically searching the internet in the small hours to protect the benefits of her husband, who has Parkinson’s. A few days after my trip to the theatre I saw a presentation from the head of a local Citizens Advice. One of the PowerPoint slides read: “For some people, there is no safety net any more.” There was a time, she explained, when if someone walked in penniless she could get on the blower and shout, and scream and get them some money from somewhere. Now? That was almost impossible.
And I think of the valleys of south Wales, and the replies I got when asking what would make things better in one of the poorest parts of western Europe. No one mentioned the government, either in Cardiff or in Westminster. When I mentioned the G-word – in this place, where Thatcher shut the mines while Labour just relied on its voters to carry on being good little sheep – the response was usually laughter.
At the end of 2015, a team of academics held a series of two-day discussions with small groups of members of the public across Europe. They were asked only one big question: what should the government do for your children’s generation? Of all the countries, the British were easily the most pessimistic about what could be done – behind even Slovenia.
The British liked the NHS and pensions, but thought both would be gone in a generation. They didn’t talk about the good things that could be done by government. Trade unions came up just once in the entire two days. “I found it quite shocking,” recalls Peter Taylor-Gooby, of the University of Kent. “Of all the groups we interviewed, the British had this mood of resigned, reluctant individualism.”
Thirty years ago, Ronald Reagan claimed the nine most terrifying in the English language were: “I’m from the government and I’m here to help.” He said it was a joke; it turned out to be a prophecy. Three decades of both right and left privatising, outsourcing and deregulating have shrunk the public imagination about what their representatives in government can achieve. Put that alongside the shattering of the working class, the smashing of trade unions, and the diminishment of so many other social institutions.
The need for the state and collective action hasn’t diminished, but the public belief in it has gone. The state is now either invisible or hostile. This has happened without the pundits and politicians noticing, but its consequences could shape politics for decades.
After Dean has received his latest brown envelope, Tamsin turns to him and begins a vow. “We’re gonna make it without them. OK? Fuck them … we can do this ourselves. We can – I can work, and …” Her voice breaks. “This isn’t fucking fair. I can’t keep doing this. I can’t.
“I’m so fucking tired.”
Both have to struggle through tick-boxes, euphemistic nonsense (Tamsin’s warehouse is a “fulfilment centre”; Dean’s disabilities make him “fit for work”) and a system that grabs a lot while giving a pittance.
We’re often told that the state and the market have entirely different roles. But meet any number of the people paying the price for Britain’s crash, and you’ll see that they play almost identical parts using similar language and similar bureaucracy. And far from protecting low-paid workers from the depredations of the market, the state wants to hurl more people into it under the pretence that they are shirkers.
None of this fits with how social democrats view the state. Having attended my fair share of Labour and other leftwing political meetings, I know that a staple feature is that some grey-haired man in a jumper will leap up towards the end and launch into a good-hearted defence of the state. Public investment, social security, industrial strategy: all will circle back to the state; all will be met with murmurs of approval.
This has happened without the pundits and politicians noticing
And all are a million miles away from the experiences I regularly hear while reporting. I think about Lisa Chapman in Northamptonshire frantically searching the internet in the small hours to protect the benefits of her husband, who has Parkinson’s. A few days after my trip to the theatre I saw a presentation from the head of a local Citizens Advice. One of the PowerPoint slides read: “For some people, there is no safety net any more.” There was a time, she explained, when if someone walked in penniless she could get on the blower and shout, and scream and get them some money from somewhere. Now? That was almost impossible.
And I think of the valleys of south Wales, and the replies I got when asking what would make things better in one of the poorest parts of western Europe. No one mentioned the government, either in Cardiff or in Westminster. When I mentioned the G-word – in this place, where Thatcher shut the mines while Labour just relied on its voters to carry on being good little sheep – the response was usually laughter.
At the end of 2015, a team of academics held a series of two-day discussions with small groups of members of the public across Europe. They were asked only one big question: what should the government do for your children’s generation? Of all the countries, the British were easily the most pessimistic about what could be done – behind even Slovenia.
The British liked the NHS and pensions, but thought both would be gone in a generation. They didn’t talk about the good things that could be done by government. Trade unions came up just once in the entire two days. “I found it quite shocking,” recalls Peter Taylor-Gooby, of the University of Kent. “Of all the groups we interviewed, the British had this mood of resigned, reluctant individualism.”
Thirty years ago, Ronald Reagan claimed the nine most terrifying in the English language were: “I’m from the government and I’m here to help.” He said it was a joke; it turned out to be a prophecy. Three decades of both right and left privatising, outsourcing and deregulating have shrunk the public imagination about what their representatives in government can achieve. Put that alongside the shattering of the working class, the smashing of trade unions, and the diminishment of so many other social institutions.
The need for the state and collective action hasn’t diminished, but the public belief in it has gone. The state is now either invisible or hostile. This has happened without the pundits and politicians noticing, but its consequences could shape politics for decades.
After Dean has received his latest brown envelope, Tamsin turns to him and begins a vow. “We’re gonna make it without them. OK? Fuck them … we can do this ourselves. We can – I can work, and …” Her voice breaks. “This isn’t fucking fair. I can’t keep doing this. I can’t.
“I’m so fucking tired.”
The hidden agenda behind Benevolence - An Indian critique of Universal Basic Income
G Sampath in The Hindu
The idea of a universal basic income (UBI) has been gaining ground globally. While Switzerland held a referendum on it last year (it was voted down), Finland introduced it earlier this month. Media reports suggest that the government of India’s flagship Economic Survey this year is likely to endorse the UBI, setting the stage for its introduction.
On the face of it, an unconditional basic income for everyone seems a great idea. In the West, the UBI is being discussed as a solution to two problems: unemployment due to automation; and growing social unrest caused by extreme inequality and precarity. It is expected to solve the unemployment problem by decoupling subsistence from jobs, freeing human beings to realise their true potential, preferably through entrepreneurship. It would address the second by supplying monetary resources to access the necessities of life. This, in a nutshell, is the popular understanding of the UBI. The reality, however, is not so rosy.
The UBI debate in India has been a narrow one — restricted, for the most part, to financial viability. Its advocates argue that it is a more efficient way of delivering welfare, while its opponents hold that the fiscal burden would be too much. What hasn’t received adequate attention is the politics behind the UBI: who is pushing the idea? To what end? And why?
The UBI evangelists
The most eloquent advocates of UBI today are free-market enthusiasts — the same lot branded as neo-liberals for their advocacy of deregulation, privatisation, and cuts in welfare spending. Their guru, Milton Friedman, was an early advocate of basic income. Outside the academic realm, the biggest champion of UBI is the global tech sector. Silicon Valley billionaires such as Elon Musk, the founder of Tesla Motors, and Facebook co-founder Chris Hughes have publicly backed the idea.
Could it be possible that the global financial elite have finally sprouted a conscience? The reports of the UBI pilot projects conducted so far offer a clue. Invariably, they all present the same conclusion: giving cash to the poor is better than traditional welfare.
Of course, it would be wonderful if the problem of inequality and poverty were solved for us by a sudden moral awakening of the rich. Unfortunately, the current enthusiasm for the UBI is not the product of such a momentous development.
Not an add-on benefit
The biggest myth about the UBI, partly responsible for sections of the Left endorsing it, is that it is a redistributive policy that would reduce inequality. It is indeed possible to have a redistributive UBI. But it would need to fulfil two conditions: it must be funded by taxing the wealthy; and the existing entitlements to the poor must not be taken away. Such a UBI would actually be a socialist measure that would increase the bargaining power of the working classes by giving them an income cushion.
But neither of these conditions is met by any of the UBI designs being promoted today, either globally or in India. The much-touted Finnish experiment is restricted to the unemployed. It does not cover all working individuals. And it only replaces the already existing basic unemployment allowance and labour market subsidy — it is not an add-on benefit.
In India, too, the UBI is not an add-on. On the contrary, it is about giving in a different form (cash), and under one umbrella, what is already being given (in-kind and cash benefits) via different channels.
Back in 2008, in an influential paper in the Economic and Political Weekly titled ‘The case for direct cash transfers to the poor’, Arvind Subramanian, the present Chief Economic Adviser of the government, along with economists Devesh Kapur and Partha Mukhopadhyay, argued that the ₹1,80,000 crore spent annually on centrally sponsored schemes and assorted subsidies should instead be distributed as cash directly to 70 million households below the poverty line. Put simply, the UBI in India is nothing but the old wine of direct cash transfer in a fancy new bottle.
Its objective remains the same: to eliminate the public distribution system (PDS) and with it, the food, fuel, and fertiliser subsidies. The same old arguments for replacing the PDS with cash transfers are now being trotted out in favour of the UBI. The addition of the word ‘universal’ signals greater ambition but alters neither the substance nor the motive.
But let us take the arguments in favour at face value. What constitutes a basic income? Common sense dictates that it should be whatever is required to take care of basic life needs. A logical equivalent for this figure would be the minimum wage. The central government’s move last year to raise the minimum wage for non-skilled, non-agricultural workers to ₹9,100 per month was set aside following opposition from industry. Perhaps ₹9,100 per month is too luxurious an income to qualify as ‘basic’. The actual minimum wage in India is around ₹4,800 per month. Could we then expect at least this amount from our UBI?
While different numbers have been bandied about, there seems to be a broad consensus around the Tendulkar committee poverty line of ₹33 a day. This works out to a basic income of ₹1,000-₹1,250 a month or ₹12,000-₹15,000 a year. But even this modest figure is estimated to cost 11-12% of the GDP. In contrast, all the government’s subsidies put together account for only 4-4.5% of the GDP. This presents three options: one, the government makes up the deficit through additional tax revenue; two, it limits the fiscal burden by shrinking the UBI coverage from ‘universal’ to those below the poverty line; and three, it further shrinks the amount being doled out.
Given India’s narrow tax base, and a policy mindset hostile to the idea of extracting more tax revenue from the wealthy, we can rule out option one. So the UBI we get, if we get one, would be derived from a combination of the second and third options, which means both ‘U’ and ‘B’ are out of UBI, leaving us effectively with what we already have: cash transfers.
Most critically, one aspect is taken for granted by all the three options: the UBI will be funded primarily by the money allocated for CSS and subsidies. In other words, a basic income, however paltry, would help strengthen the case for the elimination or a significant roll-back of programmes such as the PDS, midday meal schemes, and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Why a UBI now?
There is no point reprising here the case against direct cash transfers, which economists such as Jean Dreze have made convincingly. It is nonetheless fascinating to see the emerging contours of a distinctive political project.
The Jan-Dhan Yojana set out to make every Indian accessible to global finance. The Aadhaar card set out to make every Indian identifiable and enumerable as data — the currency of global tech. The high mobile penetration has connected every Indian to the global digital network. An element that was missing was consumer behaviour, which the recent demonetisation sought to address, by force-feeding ‘cashless’ to a cash-dependent population. The UBI fits perfectly in this scheme of things, as it seeks to compress the whole gamut of welfare benefits into one, and mount it on a singular JAM (Jan-Dhan, Aadhaar, Mobile) platform.
But why a UBI now? One explanation could be the immense pressure on India in secretive free trade negotiations. The developed nations have for long wanted India to wind up its food security-related provisions — both state procurement of foodgrains, and their subsidised distribution via PDS. A UBI would pave the way for the elimination of these measures, dealing a death blow to food security and deepening farm distress.
Another is that the Indian state is stuck with welfare commitments it cannot renege on without political and legal consequences. The efficiency/inefficiency argument for scraping PDS and MGNREGS never acknowledges that these are rights-based social entitlements with specified outcomes — and that is not accidental. Shifting the welfare paradigm to UBI would loosen the bonds of legal and social accountability. Under the PDS, for instance, the state must provide a specified quantity of foodgrains to the poor no matter what. With UBI, it has the option letting the payout slide behind inflation, as has already happened with the old age and widow pensions.
In the final analysis, we need to answer a simple question: is the UBI about reducing inequality and poverty? If the answer is yes, then there are many things the state could do at a fraction of what the UBI would cost — from enforcing the minimum wage law, to releasing funds on time for MGNREGS. But if a dispensation hostile to these tried and tested anti-poverty measures develops a sudden zeal to eliminate poverty through UBI, a measure of scepticism is in order.
The idea of a universal basic income (UBI) has been gaining ground globally. While Switzerland held a referendum on it last year (it was voted down), Finland introduced it earlier this month. Media reports suggest that the government of India’s flagship Economic Survey this year is likely to endorse the UBI, setting the stage for its introduction.
On the face of it, an unconditional basic income for everyone seems a great idea. In the West, the UBI is being discussed as a solution to two problems: unemployment due to automation; and growing social unrest caused by extreme inequality and precarity. It is expected to solve the unemployment problem by decoupling subsistence from jobs, freeing human beings to realise their true potential, preferably through entrepreneurship. It would address the second by supplying monetary resources to access the necessities of life. This, in a nutshell, is the popular understanding of the UBI. The reality, however, is not so rosy.
The UBI debate in India has been a narrow one — restricted, for the most part, to financial viability. Its advocates argue that it is a more efficient way of delivering welfare, while its opponents hold that the fiscal burden would be too much. What hasn’t received adequate attention is the politics behind the UBI: who is pushing the idea? To what end? And why?
The UBI evangelists
The most eloquent advocates of UBI today are free-market enthusiasts — the same lot branded as neo-liberals for their advocacy of deregulation, privatisation, and cuts in welfare spending. Their guru, Milton Friedman, was an early advocate of basic income. Outside the academic realm, the biggest champion of UBI is the global tech sector. Silicon Valley billionaires such as Elon Musk, the founder of Tesla Motors, and Facebook co-founder Chris Hughes have publicly backed the idea.
Could it be possible that the global financial elite have finally sprouted a conscience? The reports of the UBI pilot projects conducted so far offer a clue. Invariably, they all present the same conclusion: giving cash to the poor is better than traditional welfare.
Of course, it would be wonderful if the problem of inequality and poverty were solved for us by a sudden moral awakening of the rich. Unfortunately, the current enthusiasm for the UBI is not the product of such a momentous development.
Not an add-on benefit
The biggest myth about the UBI, partly responsible for sections of the Left endorsing it, is that it is a redistributive policy that would reduce inequality. It is indeed possible to have a redistributive UBI. But it would need to fulfil two conditions: it must be funded by taxing the wealthy; and the existing entitlements to the poor must not be taken away. Such a UBI would actually be a socialist measure that would increase the bargaining power of the working classes by giving them an income cushion.
But neither of these conditions is met by any of the UBI designs being promoted today, either globally or in India. The much-touted Finnish experiment is restricted to the unemployed. It does not cover all working individuals. And it only replaces the already existing basic unemployment allowance and labour market subsidy — it is not an add-on benefit.
In India, too, the UBI is not an add-on. On the contrary, it is about giving in a different form (cash), and under one umbrella, what is already being given (in-kind and cash benefits) via different channels.
Back in 2008, in an influential paper in the Economic and Political Weekly titled ‘The case for direct cash transfers to the poor’, Arvind Subramanian, the present Chief Economic Adviser of the government, along with economists Devesh Kapur and Partha Mukhopadhyay, argued that the ₹1,80,000 crore spent annually on centrally sponsored schemes and assorted subsidies should instead be distributed as cash directly to 70 million households below the poverty line. Put simply, the UBI in India is nothing but the old wine of direct cash transfer in a fancy new bottle.
Its objective remains the same: to eliminate the public distribution system (PDS) and with it, the food, fuel, and fertiliser subsidies. The same old arguments for replacing the PDS with cash transfers are now being trotted out in favour of the UBI. The addition of the word ‘universal’ signals greater ambition but alters neither the substance nor the motive.
But let us take the arguments in favour at face value. What constitutes a basic income? Common sense dictates that it should be whatever is required to take care of basic life needs. A logical equivalent for this figure would be the minimum wage. The central government’s move last year to raise the minimum wage for non-skilled, non-agricultural workers to ₹9,100 per month was set aside following opposition from industry. Perhaps ₹9,100 per month is too luxurious an income to qualify as ‘basic’. The actual minimum wage in India is around ₹4,800 per month. Could we then expect at least this amount from our UBI?
While different numbers have been bandied about, there seems to be a broad consensus around the Tendulkar committee poverty line of ₹33 a day. This works out to a basic income of ₹1,000-₹1,250 a month or ₹12,000-₹15,000 a year. But even this modest figure is estimated to cost 11-12% of the GDP. In contrast, all the government’s subsidies put together account for only 4-4.5% of the GDP. This presents three options: one, the government makes up the deficit through additional tax revenue; two, it limits the fiscal burden by shrinking the UBI coverage from ‘universal’ to those below the poverty line; and three, it further shrinks the amount being doled out.
Given India’s narrow tax base, and a policy mindset hostile to the idea of extracting more tax revenue from the wealthy, we can rule out option one. So the UBI we get, if we get one, would be derived from a combination of the second and third options, which means both ‘U’ and ‘B’ are out of UBI, leaving us effectively with what we already have: cash transfers.
Most critically, one aspect is taken for granted by all the three options: the UBI will be funded primarily by the money allocated for CSS and subsidies. In other words, a basic income, however paltry, would help strengthen the case for the elimination or a significant roll-back of programmes such as the PDS, midday meal schemes, and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Why a UBI now?
There is no point reprising here the case against direct cash transfers, which economists such as Jean Dreze have made convincingly. It is nonetheless fascinating to see the emerging contours of a distinctive political project.
The Jan-Dhan Yojana set out to make every Indian accessible to global finance. The Aadhaar card set out to make every Indian identifiable and enumerable as data — the currency of global tech. The high mobile penetration has connected every Indian to the global digital network. An element that was missing was consumer behaviour, which the recent demonetisation sought to address, by force-feeding ‘cashless’ to a cash-dependent population. The UBI fits perfectly in this scheme of things, as it seeks to compress the whole gamut of welfare benefits into one, and mount it on a singular JAM (Jan-Dhan, Aadhaar, Mobile) platform.
But why a UBI now? One explanation could be the immense pressure on India in secretive free trade negotiations. The developed nations have for long wanted India to wind up its food security-related provisions — both state procurement of foodgrains, and their subsidised distribution via PDS. A UBI would pave the way for the elimination of these measures, dealing a death blow to food security and deepening farm distress.
Another is that the Indian state is stuck with welfare commitments it cannot renege on without political and legal consequences. The efficiency/inefficiency argument for scraping PDS and MGNREGS never acknowledges that these are rights-based social entitlements with specified outcomes — and that is not accidental. Shifting the welfare paradigm to UBI would loosen the bonds of legal and social accountability. Under the PDS, for instance, the state must provide a specified quantity of foodgrains to the poor no matter what. With UBI, it has the option letting the payout slide behind inflation, as has already happened with the old age and widow pensions.
In the final analysis, we need to answer a simple question: is the UBI about reducing inequality and poverty? If the answer is yes, then there are many things the state could do at a fraction of what the UBI would cost — from enforcing the minimum wage law, to releasing funds on time for MGNREGS. But if a dispensation hostile to these tried and tested anti-poverty measures develops a sudden zeal to eliminate poverty through UBI, a measure of scepticism is in order.
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