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Showing posts with label privilege. Show all posts
Showing posts with label privilege. Show all posts

Friday 20 June 2014

Alan Bennett: Abolish Private Education


Alan Bennett in The Independent

Preaching is a hazard when writing plays. One isn't supposed to preach and gets told off if one does. Poets are allowed to, but not playwrights, who – if they have naked opinions – do better to clothe them in the decent ambiguities of their characters or conceal them in the sometimes all too thin thicket of the plot. Just don't speak to the audience.
I have always found this prohibition difficult. John Gielgud, who was in my first play, thought talking to the audience was vulgar. Then he was prevailed upon to try it and thereafter would seldom talk to anybody else. I understand this and even in my most naturalistic plays have contrived and relished the moments when a character unexpectedly turns and addresses the house and, in a word, preaches.
This may be because as a boy and a regular worshipper at St Michael's, Headingley, I heard a lot of sermons. I also used to go to Saturday matinees at the Grand Theatre in Leeds, though on occasion the sermons were more dramatic than the plays. This was particularly so when they were preached, as they quite often were, by visiting fathers from the Community of the Resurrection at Mirfield, who were almost revivalist in their fervour and the spell they cast over the congregation.
So when, as a young man, I first had thoughts about what nowadays is called stand-up, it's not surprising it took the form of a sermon. Like all parodies, it was born out of affection and familiarity and the Anglican services that were in my bones, and there is symmetry here, as the first sermon I preached on a professional stage was in Cambridge 50-odd years ago, across the road at the Arts Theatre in the revue Beyond the Fringe. It was on the text: "My brother Esau is an hairy man but I am a smooth man."
That sermon apart, I have never formally preached since until this morning and here I am again in Cambridge.
This is where I came in.
I had first seen Cambridge 10 years before when, as a boy of 17, I had come down from Leeds in December 1951 to sit the scholarship examination in History, staying the weekend, as one did in those days, in the college of my first choice, Sidney Sussex.
The place and the university bowled me over. Leeds, where I had been born and brought up, was like the other great Northern cities still intact in 1951, but though I was not blind to its architectural splendours – unfashionable though at that time they were – it was a soot-blackened, wholly 19th-century city and as a boy, like Hector in The History Boys, I was famished for antiquity.
I had never been in a place of such continuous and unfolding beauty as Cambridge and, December 1951 being exceptionally cold, the Cam was frozen over and a thick hoarfrost covered every court and quadrangle, giving the whole city an unreal and celestial beauty. And it was empty, as provincial places in those days were.
I see my 17-year-old self roaming unrestricted through the colleges, as one could in those unfranchised days, standing in Trinity Great Court in the moonlight, thinking it inconceivable I could ever come to study in such blessed surroundings. And nor could I, so far as Trinity was concerned.
Sidney Sussex wasn't quite my taste in buildings, but you had to be cleverer than I was – or higher up the social scale – to have the real pick of the architecture.
Still, we were examined in the Senate House, the interior of which, had it been in Leeds, would have been sequestered behind red ropes, and I went to evensong in King's, astonished that one could just walk in and be seated in the choir stalls.
It was Advent, or what nowadays is called the countdown to Christmas, and one of the hymns was "O Come, O Come Emmanuel", which is rather dirge-like, but it has stayed with me all my life since.
Interviewed by the kindly dons at Sidney, I was for the first time conscious of having a Northern accent.
If the dons were genial, some of my fellow candidates were less so. That weekend was the first time I had come across public schoolboys in the mass and I was appalled. They were loud, self-confident and all seemed to know one another, shouting down the table to prove it while also being shockingly greedy. Public school they might be, but they were louts.
Seated at long refectory tables beneath the mellow portraits of Tudor and Stewart grandees, neat, timorous and genteel, we grammar school boys were the interlopers; these slobs, as they seemed to me, the party in possession.
But it was a party, seemingly, that I was going to be allowed to join as, though I was a long way from getting a scholarship, Sidney Sussex offered me a place to read History, to come up after my national service.
This, too, takes in Cambridge and if you're beginning to wonder whether, far from being a sermon, this is just a stroll down memory lane, take heart, because here is where a tentative homily begins to shove its nose above the horizon.
Having done basic training in the infantry, I was then sent on a course to learn Russian, a year of which was spent out of uniform and in very relaxed circumstances in Cambridge.
It was a heady atmosphere, more so in some ways than university proper, where many of my colleagues were headed after national service. Some of them were disconcertingly clever; boys from public schools who, when they talked of their schooldays, often had in the background a master whose teaching had been memorable and about whom they told anecdotes and whose sayings they remembered; teachers, I remember thinking bitterly, who had presumably played a part in getting them the scholarships most of them had at Oxford and Cambridge.
For them, the scholarship examination – from which I'd just managed to scrape a place – had almost been a formality. They had been schooled for it and groomed for the interviews that followed, with the scholarships and exhibitions that ensued almost to be taken for granted. This was Oxford and Cambridge after all; they were entitled. If I felt this was wrong, which I did, it was not at that time an altruistic feeling. I was thinking of myself and how the odds were stacked against me and boys like me. And here I should apologise that this narrative is couched so continuously in single-sex terms, but then, so had my education been, my school, the army, my eventual college – all of them at that time male institutions.
As I say, I saw the odds as stacked against me but took some comfort, as I think educators did generally, in assuming that this situation must inevitably alter and that the proportion of undergraduates from state schools at Oxford and Cambridge would gradually overtake that from public schools until they were both properly and proportionately represented.
It was only when, as time passed this didn't happen, that what in my case had begun as a selfish and even plaintive grievance, hardened to take in not just entrance to Oxford and Cambridge, but access to higher education in general, with the scramble for university places more desperate year by year. And this is to say nothing of the cost. Better minds than mine have tackled this problem and continue to do so and I would be foolish if I claimed to have a solution. But I know what is part of the problem and that is private education. My objection to private education is simply put. It is not fair. And to say that nothing is fair is not an answer. Governments, even this one, exist to make the nation's circumstances more fair, but no government, whatever its complexion, has dared to tackle private education. It might have been feasible at the time of the Butler reforms in 1944 but there were other things going on.
The Labour government in 1945 could have tried, but it had a great deal to do besides. There was not another chance until 1997, when Labour's huge majority would have at least allowed a start, except that the prime minister had been a public schoolboy himself and seemingly a happy one, so that opportunity too went begging. I am not altogether sure why. When the question comes up there is always talk of the social disruption that would result, as if it might be the Dissolution of the Monasteries all over again. But would it?
I am not, after all, suggesting that public schools should be abolished, but a gradual reform which began with the amalgamation of state and public schools at sixth form level, say, ought to be feasible and hardly revolutionary, if the will is there.
And that, of course, is the problem.
Some of this lack of will can be put down to the unfocused parental anxiety summed up, almost comically now, in Stephen Spender's 1930s poem:
My parents kept me from children who were rough,
And who threw words like stones and wore torn clothes.
Class, in a word, still. Less forgivably, there is a reluctance to share more widely (and thus to dilute) the undoubted advantages of a private education: smaller classes, better facilities and still, seemingly, a greater chance of getting to university. Beyond that, though, I'm less sure of the long-term social advantages which once would have included the accent, but hardly today. Still – and this is not to discount the many excellent schools in the state sector – a child of average ability is likely to do better at a good public school. Otherwise why would they be sent there?
 
Were reforms to happen, I suspect that the ones who would be the least worried by such an amalgamation would be the boys and girls themselves.
It would be unsurprising if you were to discount these forthright opinions as the rantings of an old man. I am now 80, an age that entitles one to be listened to, though not necessarily heeded. I had never been much concerned with politics until the 1980s, when they became difficult to avoid.
Without ever having been particularly left-wing, I am happy never to have trod that dreary safari from left to right which generally comes with age, a trip writers in particular seem drawn to: Amis, Osborne, Larkin, Iris Murdoch all ending up at the spectrum's crusty and clichéd end. If I haven't, it's partly due to circumstances: there has been so little that has happened to England since the 1980s that I have been happy about or felt able to endorse. One has only had to stand still to become a radical. Though that, too, sounds like an old man talking.
Still, I don't regret it and one thing it's always a pleasure to see on television is the occasional programme about ancient and persistent activists; old ladies recounting their early struggles for women's rights or battles for birth control, veteran campers from Greenham Common: cheerful, good-humoured and radical as they ever were; still – though it's not a word I care for – feisty after all these years. That to me is wisdom as disillusion is not.
Another reason why there is a lack of will and a reluctance to meddle – a reluctance, one has to say, that does not protect the state sector where scarcely a week passes without some new initiative being announced – is that private education is seemingly not to be touched. This I think is because the division between state and private education is now taken for granted.Which doesn't mean that it is thought to be fair, only that there is nothing that can or should be done about it.
But if, unlike the Daily Mail, one believes that the nation is still generous, magnanimous and above all fair, it is hard not to think that we all know that to educate not according to ability but according to the social situation of the parents is both wrong and a waste.
Private education is not fair. Those who provide it know it. Those who pay for it know it. Those who have to sacrifice in order to purchase it know it. And those who receive it know it, or should. And if their education ends without it dawning on them then that education has been wasted. I would also suggest – hesitantly, as I am not adept enough to follow the ethical arguments involved – that if it is not fair, then maybe it's not Christian either.
How much our ideas of fairness owe to Christianity, I am not sure. Souls, after all, are equal in the sight of God and thus deserving of what these days is called a level playing field.
This is certainly not the case in education and never has been, but that doesn't mean we shouldn't go on trying. Isn't it time we made a proper start? Unlike today's ideologues, whom I would call single-minded if mind came into it at all, I have no fear of the state. I was educated at the expense of the state, both at school and university. My father's life was saved by the state as, on one occasion, was my own. This would be the nanny state, a sneering appellation that gets short shrift with me. Without the state, I would not be standing here today.
I have no time for the ideology masquerading as pragmatism that would strip the state of its benevolent functions and make them occasions for profit. And why roll back the state only to be rolled over by the corporate entities that have been allowed, nay encouraged, to take its place? I am uneasy when prisons are run for profit or health services either. The rewards of probation and the alleviation of suffering are human profits and nothing to do with balance sheets. And these days no institution is immune. In my last play, the Church of England is planning to sell off Winchester Cathedral.
"Why not?" says a character. "The school is private, why shouldn't the cathedral be also?" And it's a joke, but it's no longer far-fetched.
With ideology masquerading as pragmatism, profit is now the sole yardstick against which all our institutions must be measured, a policy that comes not from experience but from assumptions – false assumptions – about human nature, with greed and self-interest taken to be its only reliable attributes.
In pursuit of profit, the state and all that goes with it is sold from under us who are its rightful owners and with a frenzy and dedication that call up memories of an earlier iconoclasm.
Which brings me nearly to the end.
One pastime I had as a boy which, thanks to my partner, I resumed in middle age, was looking at old churches, "ruin-bibbing" Larkin dismissively called it, though we perhaps have a little more expertise than Larkin disingenuously claimed he had. I do know what rood lofts were, for instance, though, like Larkin, I'm not always able to date a roof.
The charm of most medieval churches consists in what history has left and one learns to delight in little, the dregs of history: a few 15th-century bench ends, an alabaster tomb chest or, where glass is concerned, just the leavings of bigotry, with ideology weakening when it came to out-of-reach tracery – the hammer too heavy, the ladder too short – so that only fragments survive, a cluster of crockets and towers maybe, the glimpse of a golden city with a devil leering down.
In my bleaker moments, these shards of history seem to me emblematic obviously of what has happened to England in the past, but also a reminder and a warning of what in other respects is continuing to happen in the present, with the fabric of the state and the welfare state in particular stealthily dismantled as once the fabric of churches more rudely was, sold off, farmed out; another Dissolution, with profit taking precedence over any other consideration, and the perpetrators today as locked into their ideology and convinced of their own rightness as any of the devout louts who four and five hundred years ago stove in the windows and scratched out the faces of the saints as a passport to Heaven.
I end with the last few lines of my first play, Forty Years On. It's set in a school with the headmaster on the verge of retirement and is what nowadays is called a play for England. It ends with the boys and staff singing the doxology "All Creatures That on Earth Do Dwell", with before it, this advertisement for England:
To let. A valuable site at the crossroads of the world. At present on offer to corporate clients. Outlying portions of the estate already disposed of to sitting tenants. Of some historical and period interest. Some alterations and improvements necessary.

Wednesday 26 March 2014

Inherited wealth is an injustice. Let's end it


Inheritance, which rewards the wealthy for doing nothing, is once again becoming a key route to riches – just as it was in the Victorian era
Hands dropping coins
'The transfer of wealth between generations allows access to privileges that are otherwise beyond reach.' Photograph: Cultura Creative (RF) / Alamy/Alamy
Inherited wealth is the great taboo of British politics. Nobody likes to talk about it, but it determines a huge number of outcomes: from participation in public life, to access to education, to the ability to save or purchase property. When David Cameron recently promised to raise the threshold for inheritance tax to £1m and praised "people who have worked hard and saved", he is singing from the hymn sheet of inherited inequality: it is, after all, easier to save if you inherit substantial sums to squirrel away, or if you can lock money in property that is virtually guaranteed to offer huge returns. Hard work has very little to do with it.
In 2010-11, the most recent period for which we have figures, 15,584 estates of 259,989 notified for probate paid inheritance tax. That is approximately 3% of all deaths that year. Already, inheritance tax is paid by a tiny fraction of all estates. The asset composition of these estates remains stable over time, with property composing about 50% of taxable estates; a disproportionate number of these are located in London and the south-east, reflecting the rocketing house prices in that corner of the country. The "nil-rate threshold" – the value under which inherited wealth is untouched by tax – currently stands at £325,000, frozen since April 2009. But that's only half the story. Since 2007, it has been possible for spouses to transfer their unused nil-rate band allowance to their surviving partner. This has lifted many estates in the £300-500,000 band out of inheritance tax altogether: at this point we are beginning to talk about substantial, indeed life-altering, sums of money.
Beyond these key figures lies a hinterland of tax-minimisation strategies through which assets can be exempted from tax, including various types of trust and business property relief. Despite nominal efforts to curb this kind of minimisation, there remains a booming market in financial advice tailored to avoidance. The knock-on effects of this minimisation are huge: it permits further concentration of wealth in the hands of those who already possess it, rewarding those cunning enough to avoid taxation, and cushioning their children with an influx of unearned wealth. There are obvious uses to which this can be put: paying off student loans early, thus avoiding interest, investing in buy-to-let property, or high-return financial products. It permits the children of the middle classes to sustain themselves through unpaid internships or unfunded study into secure middle-class careers, while locking these off from those without such resources. Given the chancellor's recent changes to pensions, the flow of cash into property as a secure income stream for the already wealthy is only likely to increase. Again, despite the rhetoric, this has little to do with hard work, but the preservation of wealth gaps between classes.
Why do we permit this? The transfer of wealth between generations is an injustice: it is a reward for no work, and a form of access to privileges that are otherwise beyond reach. Professor Thomas Piketty, in his new book Capital in the Twenty-First Century, makes the argument that, after a social-democratic blip in the middle of the last century, inheritance is once again becoming the key route to wealth. Piketty argues that if wealth is concentrated and the return on capital is higher than the economy's growth rate, inherited wealth will grow more rapidly than that stemming from work. This returns us to the terrain of Balzac and Austen, where the road to financial security is to target those who already possess wealth and, where possible, marry them. The data Piketty analyses – a huge and comprehensive set – suggests that the proportion of people receiving a sum in inheritance larger than the lifetime earnings of the bottom 50% is set to return to 19th-century levels in the next couple of decades. Pleasant news for our neo-Victorian government; less pleasant for the rest of us, and a disaster for anyone who cares about inequality.
It is difficult to justify inherited wealth from anything other than a class-partisan position. It is the point where the already threadbare veil of "meritocracy" falls off to reveal a fiscal system designed to reward already concentrated pots of wealth. Far from a Keynesian "euthanasia of the rentier", we are seeing the triumph of a rentier economy: in such conditions, rather than further accumulation by the sons and daughters of the wealthy, we should instead demand an end to inherited wealth entirely.

Wednesday 24 October 2012

So how long can the US hold the world to ransom with the dollar?



On 8 November 2010, the German finance minister Wolfgang Schäuble told the Wall Street Journal: "The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base."
US gross government debt currently totals around $16trillion (£10trn). The US government holds around 40 per cent of the debt through the Federal Reserve and government funds. Individuals, corporations, banks, insurance companies, pension funds, mutual funds, state or local governments, hold 25 per cent. Foreign investors, China, Japan and "other" (principally oil exporting) nations, Asian central banks or sovereign wealth funds hold the rest.

Historically, America has been able to run large budget and balance of payments deficits because it had no problem finding investors in US Treasury securities. The unquestioned credit quality of the US, the unparalleled size and liquidity of its government bond market, ensured investor support. Given its reserve currency and safe haven status, US dollars and US government bonds were a cornerstone of investment portfolios of foreign lenders.

During this period, emerging countries such as China fuelled American growth, supplying cheap goods and cheap funding – recycling export proceeds into US bonds – to finance the purchase of these goods. It was a mutually convenient addiction .

Asked whether America hanged itself with an Asian rope, a Chinese official told a reporter: "No. It drowned itself in Asian liquidity."

Given the sheer quantum of US debt, foreign investors may become increasingly less willing to finance America. Japanese and European investors, struggling to finance their own government obligations, may simply not have the funds.

Given its magnitude and the lack of political will to deal with the problem of debt and public finances, the US is now deploying its FMDs – "financial extortion", "monetisation" and "devaluation" – to finance its requirements.

In a form of extortion, existing investors like China must continue to purchase US dollars and bonds to avoid a precipitous drop in the value of existing investments.

Debt monetisation – printing money – is another strategy. The US Federal Reserve is already the in-house pawnbroker to the US government, purchasing government bonds in return for supplying reserves to the banking system. Expedient in the short term, monetisation risks setting off inflation. The absence of demand in the economy, industrial over-capacity and the unwillingness of banks to lend have meant successive "quantitative easing" has not resulted in higher inflation to date. But the risks remain.
Monetisation is inexorably linked to devaluation of the US dollar. The zero interest rates policy and debt monetisation is designed to weaken the dollar. As John Connally, the US Treasury Secretary under President Richard Nixon, belligerently observed: "Our dollar, but your problem."

Despite bouts of dollar buying on its safe haven status, the US dollar has significantly weakened over the last two years, losing around 20 per cent against major currencies since 2009. As the dollar weakens US foreign investments and overseas income gain in value. But the major benefit is in relation to debt owned by foreigners. As almost all its government debt is denominated in US dollars, devaluation reduces its value.

This forces existing investors to keep rolling over debt to avoid realising losses. It encourages them to increase investment, to "double down" to lower their average cost of US dollars and debt. It also allows the US to enhance its competitive export position.

Major investors in US government bonds now find themselves in the position John Maynard Keynes identified: "Owe your banker £1,000 and you are at his mercy; owe him £1m and the position is reversed."
Valery Giscard d'Estaing, the French finance minister under Charles de Gaulle, famously used the term "exorbitant privilege" to describe the advantages to America of the dollar's role as a reserve currency and its central role in global trade.

That privilege now is not only "exorbitant" but "extortionate". How long the world will let the US exercise it is uncertain.

Satyajit Das is a former banker and author of "Extreme Money" and "Traders, Guns & Money"

Monday 7 May 2012

A web of privilege supports this so-called meritocracy


On both sides of the Atlantic, the social ties that bind our political, legal and corporate forces lie exposed
huntsman and stirrup cup
‘The meetings, lunches and visits showcase a parallel, unaccountable universe where decisions are made and deals done.' Photograph: Laurence Griffiths/Getty

Shortly after Mitt Romney's failed 2008 campaign for the Republican nomination his son Tagg set up a private equity fund with the campaign's top fundraiser. One of the first donors was his mum, Anne. Next came several of his dad's financial backers. Tagg had no experience in the world of finance, but after two years in the middle of a deep recession the company had netted $244m from just 64 investors.

Tagg insists that neither his name nor the fact that his father had made it clear he would run for the presidency again had anything to do with his success. "The reason people invested in us is that they liked our strategies,'' he told the New York Times.

Class privilege, and the power it confers, is often conveniently misunderstood by its beneficiaries as the product of their own genius rather than generations of advantage, stoutly defended and faithfully bequeathed. Evidence of such advantages is not freely available. It is not in the powerful's interest for the rest of us to know how their influence is attained or exercised. But every now and then a dam bursts and the facts come flooding forth.

The Leveson inquiry has provided one such moment. It was set up last year to look into the specific claims about phone hacking at the News of the World, alleged police corruption and the general culture and ethics of the British media. But every time it probes harder into the Murdoch empire it draws blood from the heart of our body politic, telling us a great deal about how Britain's political class in particular and ruling class in general collude, connive and corrupt both systemically and systematically.

Issues of alleged criminality will eventually be determined in the courts. But while illegality would be more damning, much of what we now know that is legal is no less corrosive. The evidence has laid bare the intimate, extensive and insidious web of social, familial and personal ties between the political, corporate and legal forces that govern a country: a patchwork of individual and institutional associations so tightly interwoven that to pick at one part is to watch the whole thing unravel. The "sit downs", pay-offs and class camaraderie on display owe more to a cross between Downton Abbey and the Sopranos than the functioning of a 21st-century democracy.

The details of the main narrative bear repeating. We now know that James Murdoch met with David Cameron 12 times between January 2006 and January 2010 – eight times for dinner, twice for breakfast, once for lunch and once for drinks. Between May 2010 and July 2011 there were also more than 60 meetings between ministers and either Rupert Murdoch, his son James, the then News International chief executive Rebekah Brooks or James Harding, the editor of the Times. That averages around one a week. We know there were more, but not all were logged as such by Downing Street.

The subplots are stunning. And the forthcoming attractions could yet overshadow the lot. Now that Brooks has agreed to hand over her text messages to Cameron, we are about to learn whether rumours that they exchanged as many as 12 texts a day are true.

Brooks was arrested both on suspicion of phone hacking and corruption last year. She was arrested again this year with her husband, Charlie Brooks, on suspicion of perverting the course of justice. Charlie went to Eton with Cameron – as did the Tory mayor of London, Boris Johnson.

Such is the incestuous nature of the British ruling class and the gene puddle from which it draws its stock. Such is their brazen venality, complicity, contempt and mendacity. Eton, Oxford, Bullingdon, Westminster – if you're looking for a tiny minority who are struggling to integrate, look no further than the cabinet.

Two things make this a matter of import as well as intrigue. The first is the lie it gives to the insistence on meritocracy at a time of acute economic crisis when benefits are slashed, the poor hammered. Cameron and his cabinet insist others pull themselves up by their bootstraps even as they themselves swan around in their parents' expensive pairs of loafers. Today almost 40% of MPs went to private school. In 1997 it was just 30%. In terms of social mobility, we are going backwards. The issue here is not class envy but class entrenchment. The fact that they were born rich is irrelevant. They had no choice in the matter. But the fact that they appear to want to give even more to those who already have a great deal while denying much to those who have little is unforgiveable.

The one job Cameron landed in the private sector was arranged by his wife's mother, Lady Astor, who was friends with Michael Green, then executive chairman of Carlton. Green gave Cameron a starting salary of £90,000. He has no more had to stand on his merits than James Murdoch had to interview for a job at News Corp.

Rocked in the cradle of power from birth so that its rhythms become second nature, these people imbibe their sense of entitlement with their mother's milk. But the personal tutors, private schools, the most expensive universities do not, somehow, suffice. As though the benefits of wealth were not enough, they apparently feel the need to game the very system they already control.

Which brings us to the manner in which these interactions mock the very notion of democracy on which the nation's illusions are based. For the meetings, lunches and visits showcase a parallel, unaccountable universe where actual decisions are made and deals are done. All these informal gatherings took place at a time when the government was supposed to be adjudicating News Corporation's bid to take over BSkyB. With the culture secretary described by Murdoch's lobbyist as a "cheerleader" for News International, it seems as if the takeover was to all intents and purposes a done deal, prevented only by the fallout from the hacking scandal. All the kinks ironed out on horseback and settled in time for the main course. Parliament would have been a mere rubber stamp. Oversight reduced to an afterthought in a House of Commons that may soon more closely resemble a house of cards.