Responsibility, accountability and all that

What would you make of a zoo which kept its more harmless animals under strong guard but which allowed its man-eaters to roam free? I am beginning to feel this is a good way to look at Western systems of social control and regulation.

Some 15 years or so ago, transparency and accountability became a big issue in my professional field (of governance). I have only recently begun to question the motives which have been at work.
Reassuring, at one level, in the story it told of how various public organisations were held to account by citizens, it demonstrated one of many apparently superior elements of the capitalist model of governance over the communist one which had been the default system of the countries in which many of us were working post 1989. For example, in 2001 I myself wrote this briefing note on the issue for my beneficiaries in a Central Asian State.
But, at another level, the emphasis (in the UK at any rate) on the need for more and more scrutiny of government business has perhaps had a hidden agenda – part of the wider drive there has been for several decades to convince people that government activities were inherently inefficient and malevolent. After all, while we were devoting more and more energy to scrutiny, for example, of local government activities, regulations and controls were being lifted from banks and financial agencies.

Bank profits these days – as most people have noticed – are pocketed by members of the 1% but their losses are nationalised. And only in Iceland, it appears, are attempts being made to prosecute a few (including a Prime Minister) who are deemed culpable for the banking crisis.
It was only Shaxon’s book Treasure Islands which made me realise that bank bosses and owners had managed only a decade or so ago to wriggle out of their legal responsibilities – by having their legal status altered to that of "limited liability”. Until then, bank bosses stood to lose everything if their banks went down. No more!
And I noticed yesterday that no less a figure than Nassim Taleb (of Black Swan fame) has suggested that we return to this simple model of accountability for financial insititutions -

Instead of relying on thousands of meandering pages of regulation, we should enforce a basic principle when it comes to financial oversight:
The captain goes down with the ship;
Every captain and every ship.

In other words, nobody should be in a position to have the upside without sharing the downside, particularly when others may be harmed. While this principle seems simple, we have moved away from it in the finance world, particularly when it comes to financial organizations that have been deemed “too big to fail.”

The best risk-management rule was formulated nearly 4,000 years ago. Hammurabi’s code specifies: If a builder builds a house for a man and does not make its construction firm, and the house which he has built collapses and causes the death of the owner of the house, that builder shall be put to death.

Clearly, the Babylonians understood that the builder will always know more about the risks than the client, and can hide fragilities and improve his profitability by cutting corners—in, say, the foundation. The builder can also fool the inspector (or the regulator). The person hiding risk has a large informational advantage over the one looking for it.

Of course, despite the public condemnation of bankers (a word which appropriately rhymes with wankers) there is by no means an intellectual consensus on the precise role which various groups have played in this global crisis.

Robert Skidelsky looks briefly in his book Return of The Master at 6 possible groups to blame (bankers, hedge funds, credit-rating agencies, central bankers, regulators and governments) before turning his fire on economists.

And, in a very-well written 2009 book The Financial Crisis – who is to blame, the ex-Chair of the British Financial Services Agency (Howard Davies) explores 39 different explanations of its possible cause. You can see some overheads and videos from his various presentations here, here and here
A wikipedia entry also gives a useful summary of the various explanations. Those looking for more complex treatment should have a look at this paper which

reviews current explanations of crisis whose differences are classified according to whether the causes are located in structure or agency or in neither as part of a kind of third way explanation.

In this section we argue that these explanations of the crisis (as accident, conspiracy or calculative failure) share common assumptions about how crisis is generated within socio-technical systems amenable to technical, mainly technocratic, fixes.

The second section shifts the problem into a much more political frame, initially by introducing the politics literatures on policy fiascos which are more commonly associated with foreign policy humiliations than with economic crisis. Within this frame, the section focuses on the massive failure of regulation before the crisis and argues that the crisis was then permitted by the inaction of political and technocratic elites whose hubristic detachment was such that they made no serious attempt to control the finance sector.

The third section explains how the process of financial innovation produced a fragile latticework of connections that was inherently ungovernable. A brief conclusion draws out some implications.

 My basic point, however, remains - that we should be responsible for our actions. That is the sysem in which 99% of us work - the systems created in the past few decades have lifted that basic rule from the 1% and encouraged total irresponsibility.

A Deafening Silence

Groupthink has always fascinated me. Even more, its corollary – the failure to ask how it can be avoided in future. The result is that governments and organisations bounce around from one fashionable idea to another. The 2008 global crisis and its aftermath is not only a case-study ("how did our various elites buy such snakeoil?") – but a stark demonstration of the need for social ideas to be subjected to more critical appraisal. Indeed of the need for more contrarians and sceptics – and for a culture which values such a critical approach.
The institutions and professions which are supposed to develop and sustain the critical analysis central to liberal democracy – universities, journalism, opposition political parties – have been found so severely deficient in this respect as to have lost almost all credibility. And with it, our model of democracy!

There may be a debate within (and about) the economics profession prompted by Paul Krugman, Steve Keen and the Real World Economics network - but where is the debate about the conditions in universities, journalism and politics which allowed such a profession (and that of management) to exert so much unchallenged influence and to screw us all so right royally?

A recent book Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance by Robert R. Locke and J. C. Spender offers some useful comparative, social insights. It contrasts the role of engineer-economists (and their schools) in post-war France with that of managers in America

US engineers principally in schools of industrial administration (MIT, Carnegie Institute of Technology, Georgia Institute of Technology, etc.) propagated the scientific toolkit of operations research. But their interaction with corporate management differed considerably from what took place in France. In 1900 when Frederick Winslow Taylor began the scientific management movement, engineers on the shop floor were deeply involved. But by the second quarter of the 20th century a revolution in corporate governance was well underway. Its historian, Alfred D. Chandler, Jr., most famously in The Visible Hand (1977), describes this rise of new managerial hierarchies in giant corporations whose managerial needs were quite different from those Taylorism induced. Because top corporate management concentrated on money more than product management, it required staff that could deal with financial reporting and marketing, that could oversee money flows through the various corporate divisions -- information that was much more vital to decision making in a multifaceted strategic setting than product knowledge. It required accountants and controllers to design and run the management system; they replaced the engineers previously at the top. At General Motors Alfred P. Sloan installed systems of financial reporting to headquarters “based heavily on analysis of managerial accounting data,” (Rother, 63). Sloan noted that GM was in the business of making money not automobiles. Other multiple division corporations followed suit. In 1929 The Controllers’ institute was founded in the United States because of their increasing managerial importance.

French engineers at the head of industry, preoccupied with saving their country from backwardness, succeeded in their task during what the French call “The Thirty Glorious Years” of postwar modernization (1945-75). American managers succeeded, too, in making lots of money. But there was little in the educational background of most top managers in US industrial corporations that permitted them to work closely with operational research scientists and economists like in the system of French engineering education and industrial leadership. US corporate moneymen lacked the scientific and mathematical knowledge needed to grasp quickly what operations research people and neo-classical economists were talking about..............

Post-war American business school professors and students had abysmal mathematical knowledge Business school professors, students and finance investors did not comprehend mathematics enough to see its limitation as a tool in the modeling of financial markets. When the financial crisis came, surprised finance analysts, Paul Wilmott and Emanuel Derman issued The Financial Modelers Manifesto, which opened with words reminiscent of Karl Marx: “A specter is haunting markets – the specter of illiquidity, frozen credit, and the failure of financial models.” Then followed the admission: “Physics, because of its astonishing success at predicting the future behavior of material objects from their present state, has inspired most financial modeling. Physicists study the world by repeating the same experiments over and over again to discover forces and their almost magical mathematical laws. … It’s a different story with finance and economics, which are concerned with the mental world of monetary value. Financial theory has tried hard to emulate the style and elegance of physics in order to discover its own laws. … The truth is that there are no fundamental laws in finance.”

Stealing the world

I’ve just finished reading Nicholas Shaxon’s Treasure Islands: Tax Havens and the Men Who Stole the World (2011).It describes how the City of London is at the heart of a colossal corrupt system which had its origins in the activities of US gangsters seeking to launder crime proceeds to make them legitimate. To do this the British colony of Bermuda was first used but when that became too hot they moved to the Cayman Islands in the Caribbean. Despite its tiny population (30,000) these mosquito ridden islets are nominally home to 800,000 registered companies all of them paying virtually no tax. Cayman is now the world's 5th largest financial centre hosting three quarters of the world's hedge funds and $1.9 trillion on deposit, four times as much as New York banks. Even critics of conventional wisdom such as Paul Krugman have admitted that they failed to spot what was going on -

I was vaguely aware of the existence of a growing sector of financial institutions that didn’t look like conventional banks, and weren’t regulated like conventional banks, but engaged in bank-like activities. Yet I gave no thought to the systemic risks.

Wealthy people own about $11.5 trillion in offshore tax havens- one quarter of all global wealth. In 2006 700 of Britain's biggest businesses paid no tax at all in the UK. Shaxon also relates how the British Establishment have regarded the tax havens UK has long sheltered in the inner ring of Jersey, Gernsey, Isle of Man and its residual overseas territories in the Caribbean – where any pretence at democracy has long since gone. A whole chapter is devoted to how anyone who voices the slightest criticism in Jersey is hounded for their life by policy-makers who not only benefit from the financial deals but don’t even bother to hide the conflicts of interest.

He argues that tax havens – which the International Monetary Fund estimates to hold more than a third of the world’s GDP on their balance sheets – have fundamentally undermined the world’s economic system. Not only has the legitimate, on-shore financial system become progressively deregulated to compete with offshore – helping to cause the 2008 crash – but tax avoidance keeps poor nations reliant on aid. He explains:

Offshore business is, at heart, about artificially manipulating paper trails of money across borders. To get an idea of how artificial it can be, consider the banana. Each bunch takes two routes into your fruit bowl. The first route involves a Honduran worker employed by a multinational who picks the bananas, which are packaged and shipped to Britain. The multinational sells the fruit to a big supermarket chain, which sells it to you. The second route – the accountants’ paper trail – is more round-about. When a Honduran banana is sold in Britain, where are the final profits generated, from a tax point of view? In Honduras? In the British supermarket? In the multinational’s US head office? How much do management expertise, the brand name, or insurance contribute to profits and costs? Nobody can say for sure. So the accountant can, more or less, make it up. They might, for example, advise the banana company to run its purchasing network from the Cayman Islands and run its financial services out of Luxembourg. The multinational might locate the company brand in Ireland; its shipping arm in the Isle of Man; ‘management expertise’ in Jersey and its insurance subsidy in Bermuda.

Say the Luxembourg financing subsidiary now lends money to the Honduras subsidiary and charges interest at $20 million per year. The Honduran subsidiary deducts this sum from its local profits, cutting or wiping them out (and its tax bill). The Luxembourg’s subsidiary’s $20 million in extra income, however, is only taxed at Luxembourg’s ultra-low tax haven rate. With a wave of an accountant’s wand, a hefty tax bill has disappeared, and capital has shifted offshore. What are the implications of this? Most importantly, our banana multinational has managed to avoid paying the Honduran government – or indeed any government – any tax. About two-thirds of global cross-border world trade happens inside multinational corporations. Developing countries lose an estimated $160 billion each year just to corporate trade mispricing of this kind. In 2006, the world’s three biggest banana companies, Del Monte, Dole, and Chiquita, paid only $235,000 tax between them – despite combined profits of nearly $750 million.

The book describes how all of this has happened in the last few decades - and the role which the establishment in 1957 of Eurodollars played. As one of the reviewers put it -

Whatever became of the UK coalition's zeal to bring bankers to heel? The same thing that wrecked Gordon Brown's supposed plan to close global tax loopholes – and brought all parallel efforts to dust. Simply, the threat to scarper offshore if too many displeasing measures are inflicted.

Simply, the impossibility of getting international action in a world where States like Delaware compete with offshore havens to register companies whose activities are guaranteed secrecy – and therefore not only pay no taxes but wriggle out of all regulatory requirements. And trigger off a "race to the bottom".

The City of London, seeing its imperial glories fade, used the leftover connections of empire to construct a web of influence and cash around the globe (with the Bank of England playing head spider). The Swiss, sitting pretty, had lessons of neutrality, secrecy and cupidity to impart to a wider audience. Enter bright sparks who might have invented spaceships or life-saving drugs, but in fact invented the eurodollar market – a continent of opportunity without actual territory or policing, because it existed somewhere over there, somewhere offshore. And, of course, enter the tax havens that helped make the whole edifice possible: enter anywhere where transparency lay covered in mists and democracy was up for sale to the highest bidder: enter the havens of opportunity.

In both the book and on video he voices his astonishment that so few academics and journalists have explored this field. And it takes a great deal of courage to expose and challenge the power which is involved. The sections of the book devoted to some of these people is very inspiring.
It's not easy to see how the genie can be put back in the bottle - but at least with books like these there is no longer any excuse for ignorance. People are getting organised. Here's a useful update on latest moves from a tax justice network. Shaxson had an excellent discussion about the various issues on Open Democracy a year ago - and Richard Murphy - one of the key reformers who previously worked with one of the Big Accountancies) - is optimistic

Cultural toursim in Bulgaria

A year ago I announced that I was trying to draft a booklet on realist Bulgarian art to encourage visitors to visit the great galleries here - and gave a link on my website to the concept as it then stood. Thanks to the recent regional tour and a kind offer of assistance from the Curator of the Dobrich Gallery, I have been working on the draft again – and have just uploaded a new version to the website. This one gives a small amount of info on about 150 painters who have taken my fancy.And yesterday I found another charming little private gallery (Loran) exhibiting works from the mid century.

The caricaturists 
The Bulgarian tradition of caricaturists is a very strong one – starting (I think) with Alexander Bozhinov a hundred years ago and including people such as Ilyia Beshkov, Marco Behar and Boris Angeloushev. One of them, indeed, Rayko Aleksiev so annoyed the communists that he was arrested on their coming to power and died in prison under suspicious circumstances. A Gallery is named after him.
One of my prize possessions is a copy of a 1954 magazine called New Bulgaria with each of its 18 pages covered with 3-4 amazing pencil caricatures almost certainly doodled by Bulgaria’ most loved graphic artists – Ilyia Beshkov. I was happy to pay 250 euros for it – after all I got 50 sketches for about the same price as the going rate for one (admittedly larger) caricature of his!
And in one of Sofia’s many street stalls, I bought last week two 1962 issues of an art magazine Izkustvo – one of which had excellent Beshkov reproductions – to add to the rather worn 1941 issue I have of another cultural newspaper Shturschel (?) which has a Beshkov reproduction on its front page.

Cultural Tourism
This got me surfing the net to try to find some information about these art journals of the early and mid part of the century. I drew a blank but did come across some interesting material on the Bulgarian cultural heritage - not least some grim experiences one young painter had during the the Communist period. How artists coped during communist repression is a fascinating subject - some (like Boris Denev and Nikolai Boiadjiev refused to toe the official line on painting and almost stopped painting); many other moved into theatre design and cinema). Things had eased by the 1980s largely due to the influence of PM Zhivkov's daughter who was a great art afficiando!
I unearthed an interesting paper on how the communist heritage could be used as part of a cultural tourist strategy (which missed this human dimension) and another paper (by the same Dobrich author) on how Bulgaria might develop a strategy for cultural tourism.
Also an interesting example of how some of the treasures here are ignored even by the locals.

The gouache above may look a little like a Beshkov - but is actually one of the V Vulev's I bought a few days ago in Vihra's Gallery

"Europeans can't blog"

It appears that Europeans can’t blog - or at least the economists can’t – which I find surprising in view of the number of such blogs I can find. The argument, however, is that

European blogs are still very much “unconnected”. That is, they use hyperlinks far less than their American counterparts - or do it but in a way that doesn’t create two-way debate. In brief, Europe has bloggers, but no blogosphere: it lacks a living ecosystem to exchange and debate
Linking to some newspaper article, even with a discussion section, does not create a two-way discussion (…) and linking to articles on your own blog is nice, but not really a sign of an interlinked blogosphere.

The article recognisese that the language barrier does make a European discussion more difficult – but makes two other interesting points. First that there are few European blogs dealing with economics which aggregate relevant blogs in the way this fascinting American one does . And that the culture of open discourse is underdeveloped in Europe. Especially the last aspect is problematic because it is hardest to change but arguably the most important. As they phrase it, "European economists seem to prefer to spread knowledge rather than stir debate".
The discussion sparked by the article led me to this excellent blog portal on European issues which actually links to 900 blogs on EU-related matters.
The new LSE blog on European politics and policy makes a point which I have made here myself -

I also do not see a relevant EU-focussed academic blogging community. There is so much EU research out there, so many specialists on a wide range of EU topics, but they are not out here debating their research and their specialist topics, neither with each other nor with the rest of the world. The don’t bring the academic debate on EU affairs to the digital public and they therefore miss the great chance of making academic research on EU matters more connected to reality and reality more connected to what we find out in often years long research process.
For me, the EUROPP blog is a chance to foster academic involvement online, in the EU blogosphere and beyond. This will only work if those writing here are aware what is written elsewhere in the digital sphere, if they react by linking and debating what was said by others, by going to other blogs, fora, Facebook discussion threads and if they involve in the discussions where they happen instead of just leaving self-sufficient texts here on this blog.
Good blogging is quite easy if one takes the time to do a little research and to understand the dynamics of these discussions In this sense, blogging is like academic work: Cite others, add your own thoughts and knowledge – and once you know roughly what you have found or what you want to say, go to fora where the debate is already going on.
The EU blogosphere is like one of the academic conferences you can go to, and the state of this conference is not bad at all – but I’d say it could be much better with the involvement of more academics.

Back to Capitalism

The big issue when I was becoming politically aware in the 1950s was about company ownership. Managers, it was argued, were replacing owners as the key decision-makers – “corporation man” seemed to have replaced the “robber baron” as society’s concern. But they were a harmless breed – with, so it was argued, a more civilised set of objectives than the raw pursuit of profit and repression of labour which had characterised the latter. James Burnham was a key figure in the recognition of the role of managers; this 1946 essay by George Orwell played an important part in bringing Burnham's thesis to wider attention. 

And, with the scale of publicly-owned companies and the new confidence of post-war Keynesians, intellectuals started to argue that the left could live with what remained in private hands.

CAR Crosland’s The Future of Socialism, published in 1956, was the elegant expression of the new view that patterns of company ownership were no longer of interest to socialists. After fifty years, however, ownership is back as a political issue.  

Will Hutton has figured several times on this blog as the guy who has most closely mapped the DNA of European capitalism. Recently he has been chairing a British Commission on changes which are needed to this model and outlines the results in an article here  -

There is a worldwide debate trying to define what 21st-century capitalism could be. Some countries, such as Singapore and Israel, have developed small state entrepreneurial capitalism as their answer. Then there is Germany and the Nordic countries' stakeholder capitalism; the democratic development capitalism of Brazil and India; China's self-described "socialist market" capitalism; and government activism even works in the US – witness the revival of the car industry. Nowhere can you find a modicum of economic and social success without some form of public and private partnership, directed financial systems, corporate ownership structures driving engagement and stewardship and effective social safety nets.
This reality is now being increasingly recognised, not least because of the financial crisis whose origins in excessive faith in market forces was caused by the Anglo-Saxon right's ideas. Last week, I launched the conclusions of the Ownership Commission which I have chaired for the last two years. A group of us, including the president of the CBI, and the chairman of the John Lewis Partnership, concluded that an indispensable precondition for a sustained British recovery was a new and more systematic attempt to secure better ownership of British business assets.
We must have more plural and diverse ownership structures, in particular more medium-sized family firms, co-operatives and employee-owned companies, and the public limited company needs to become less fixated with short-term profit goals. We need to ensure the tax, legal and regulatory system triggers the maximum amount of ownership engagement and stewardship and, where it falls short, to devise new means of filling the gaps.
Plc shareholders, we advocate, should, as far as possible, pool their voting rights in new not-for-profit mutuals better to engage with the companies they own. We think company directors should be better enfranchised to think of the sustainable, long-term entirety of their business rather than the next hour's share price. We want the absurdities of the tax and regulatory system that hold back co-operatives and employee-owned companies to be swept away. We want medium-sized firms to be able to build more quickly their capital and their balance sheets – to create the equivalent in Britain of the German Mittelstand, the amazing cluster of largely family-owned companies that drive Germany's innovation and export success. We propose a dramatic and fast scaling-up of existing support along with new measures, such as banks being able to get Treasury indemnities for new lending.
Ownership policy driving plurality, engagement and better stewardship should be one of the anchors of any framework for recovery, in effect the creation of a British variant of north European stakeholder capitalism, as business secretary Vince Cable, speaking at our launch, recognised and endorsed. But it is only a precondition. Britain has to reshape its financial system so that it backs business. The state has to become an active economic player, constructing the system of institutions and direct support that will drive particular industrial and business sectors forward. We have to spend hard cash on infrastructure and R&D. And Britain's fraying social safety net needs repair, not further destruction.
We need a better capitalism and this budget should have decisively begun its creation. Instead, it will be a fudge, betting all on lowering the deficit. A missed chance for Britain and the first notes of the requiem for this coalition.

The discussion thread is interesting and one of the discussants posed a series of excellent questions -

1) How is capital going to be regulated when capital is free to roam though wires, to evade taxes, entice governments with corruption and blackmail governments with disinvestment to reduce wages, taxes and err … regulation? Waves of capital move around the world to where conditions are better for accumulation leaving joblessness and devastation. Global wages and taxes drop in relation to economic output and this damages demand, capacity, employment and the health of the global economy.

2) How are gigantic corporations going to be regulated? The Forbes 2000 had revenues of $32 trillion in 2010 (global GDP is $60 trillion). Their profits rose by 67% since 2009!! How many people do they employ? – only 80 million or 1% of the global population. How much do they return back to society for what they turnover? – not much. How many small businesses disappear annually as the process of oligopolisation relentlessly continues in capitalism? How can we have a global economy where decent wages – unsupported by private debt and government spending - can sustain a level of capacity that can provide decent levels of employment in this world with this hideous type of economy? How is this destructive process of oligopoly going to be reversed?

3) How will bank failures be avoided in the future? How will the risk taken by banks be minimised with regulation without thwarting investment and damaging the real economy in a system where hundreds of trillions of capital must be *constantly reinvested* by these banks that must inevitably take risks in these investments. If this investment halts for a second we will all starve.
Credit bubbles like the one burst in 2008 are not a peculiarity; they are the norm in capitalism. Every panic of the 19th century and every crisis of the 20th century was a result of overextension of credit. And curbing credit bubbles is not a solution. It simply causes permanent stagnation unless a dynamic economy is sustained by healthy demand. Once more this is the real issue. The recent bubble did nothing but to mask the real failure of the economy which we are now facing when we contemplate restricting unsustainable credit. Without this bubble we would have had much less economic activity and much higher unemployment.

4) In the short term, how is the debt crisis going to be resolved? Where is growth going to come from when the debt stimulus *still* being pumped is removed from the already anemic economy. What levels of unemployment one needs to expect if deleveraging the local debt or the global total debt (in the order of 300% of global GDP) is seriously attempted.

5) How will capitalism deal with the fundamental problem of "growth". The system "needs" an exponential growth rate that matches the rate with which the productivity of labour naturally increases thanks to competition that forces streamlining and automation in order to .... keep employment stable. This is simply ridiculous.
Regarding the glossing over German, Swedish, Danish, Finnish and Northern Yeti welfare Capitalism: it is declining together with the decline of capitalism: benefits and wages drop, poverty and inequality increase in these places. Welfare was funded by trade surpluses, natural resources, high productivity plus quite a lot of local debt in many cases. And also by the debt and trade deficits incurred by other countries,but the party is over!
I am afraid, this is a truly intractable problem of a system that meets its own contradictions. And such vague articles do not even start to address the problem.

Here’s a fascinating interview with a sharp Greek economist on the background to the Eurocrisis.
And also a good piece on another localist Greek initiative

And the painting (a gouache) is one of three of Vasil Vulev I bought on Thursday - when I was also fortunate enough to meet the painter himself.

Fine example of 1980s art

Hats off (again!) to Vihra Pesheva of Astry Gallery here who has mounted another wonderful celebration of an older Bulgarian artist. This time it is a extensive collection of the work of Vassil Valev from the 1980s. Valev was born in 1934 in a village near Burgas – and his oil and aquarelle work from this period focusses on that. He was Director for a time of Targovishte Art Gallery and is now still a Professor. His intro on the website says simply -

I was born in the village where I spent my childhood and teen years. Many of my stories relate to the village: Cow yards, neighbours gossiping, rural suburbs, rural toil. Even my landscapes from Sofia are the suburbs rather than the noisy city centre. The characters in my paintings are working people, often elderly, those suffering…

AsVihra puts it – "Bulgaria’s period under the socialist regime still arouses complex emotions. The art from this period is, variously, denied, ignored or treated as a collector’s genre rather than appreciated individually. But it is part of our cultural heritage and Vassil Valev’s work offers a rare depth". Whether showing tobacco harvesters, Iraqi nomads or family groups, the works (often gouache) show a deep human sympathy.
Vihra does not have a lot of space in her small gallery - but this time her exhibition offers not only the oils on the wall but a collection of unmounted aquarelles in folders. The average price is about 500 levs. Some of them, for me, have the Ilyia Beshkov touch.
All this in addition to the display of oils and small scupltures in the entrance area from other living artists always makes her gallery a joy to visit.

An interesting conversation in Dobrich

Dobrich in some 30 kilomtres inland from Balchik and has the look and feel of a town double its official size of 93,000 citizens. Its central square is one of the largest I have ever seen – and is adorned by various large buildings, one of which (previously the Court of Justice built under the "occupation") now houses the extensive art collection – which you can find listed on the town’s excellent (English) website (at the end of its list of cultural centres)
While we were admiring the small special exhibition of Vladimir Dmitrov- he Master’s work, we were approached by the Gallery’s Director, Evelina Handzhieva who speaks excellent French and, very graciously, gave us a personal tour of her domain. It started with a group of schoolkids who were receiving some interactive training in the process of paper-making – the gallery, uniquely, has a collection of paperworks produced by the participants of a recent international event held here.
Separate sections are devoted to the gallery’s collection of sculptures and prints – and to local artists as well as old masters - such as this rare work of Ivan Mrkvichka (1856-1938),

one of two Czechs (the other is Jaroslav Vesin) who are credited with setting Bulgarian painting on its modern path.

The breadth of the collection is one of the widest I have seen (with a nice mix of older and contemporary). The exhibition space is so extensive that the tour took more than an hour – with Daniela being loaned a coat to protect her against the cold (no heating again).

I was very taken with this contemporary work by Plaven Valchev (born 1951).
I have been nicely received in all of the Regional galleries I have visited in Bulgaria – but this was the first time I was able to have a proper conversation about the problems of running galleries here at this time. Over a cup of tea, Evelina (like all the Directors here I’ve met an artist herself) explained that it is the Ministry of Culture who set a formula which dictates the number of staff to which regional galleries are entitled. So much for local government autonomy!! And, in Dobrich’s case, with such an huge palace, the staff of 12 (including 2 cleaners and 3 attendants) is simply insufficient. There is no surveillance system - so security is labour-intensive.
As was evident from the number of brochures, the Director is highly proactive in seeking out opportunities for marketing and funding (A Swiss Foundation was mentioned) and the Gallery’s CD lists the various international exhibitions (eg China and Slovakia) which have been mounted with the support of Embassies here. But it is an uphill struggle – a good venture of bussing tourists from the beaches nearby during the summer fizzled out.
It is not easy to produce a winning formula for such a problem. But one thing is clear for me – it requires local solutions and this means removing the dead hand of central control – and encouraging networking between galleries (national and international), hotels, businesses (eg the new owners of the rich agricultural land and the golf courses!!) and educational establishments.
Don't get me wrong - national financial support needs to be maintained (otherwise the galleries could be at more risk)) but on the basis of more imagination......

This is a detail of the Valchev painting