Bucharest gets more like Budapest

Romanian Prime Minister Victor Ponta has been accused in a highly respectable international scientific journal – Nature (based in London) - of copying large sections of his 2003 PhD thesis in law from previous publications, without proper reference. A third PM resignation in 4 months could result. 

Ponta, leader of the Romanian Social Democratic Party, took office as prime minister only last month, replacing a Prime Minister who had only been in power for 3 months following protests against austerity measures.

Ponta’s defence so far has consisted of denial; saying that Law Doctorates require a lot of pasting and source-referencing (but this is true of all doctorates); that he may have failed to observe the correct referencing system; that the doctorate is worthless to him and that he will be happy to resign it.

The allegations are also raising fresh doubts about the government’s ability to tackle corruption in the higher-education system. Education and Research Minister Prof. Ioan Mang was forced to resign for plagiarism last month on accusations of plagiarising in 8 articles; this is still under investigation by The National Committee of Ethics in Research. And Laura Codruta Kovesi, Romania's 39 year-old Head Prosecutor, and close to President Basescu, is also accused of having plagiarized her PhD thesis. 

Government measures to make the country’s struggling science and education system more competitive and transparent were proposed recently, but the plans met ferocious opposition from large parts of the academic establishment, and were substantially relaxed by the current government.

Ponta obtained his PhD from the University of Bucharest while acting as Secretary of State in the government of an earlier prime minister, Adrian Năstase — who was also his PhD supervisor; faces 7 charges ofcorruption; and who was sentenced recently to a 2 year jail sentence  

These are the bare facts – but the case is not straightforward -

• Ponta was undoubtedly one of the few Romanian experts in his field (international penal code) 
• he did not have the time then to undertake serious research work on top of his other commitments (eg State Sec)
• It is almost 10 years ago that Ponta was awarded his PhD. Why is the accusation surfacing only now?
• The thesis was published as a book in 2010 – with the foreward written by one of the people from whom Ponta is accused of plagiarising
• there is a possibility that the person plagiarised was in fact also plagiarising!
• Nature is a highly respected international scientific journal (started in 1869) which does not normally go for political “scoops”. An article about standards in Romanian Academia would have been highly appropriate after the resignation of the Education Minister (and the widespread concerns about the purchase here of Degrees) but no such article was written – instead a rather superficial and biased scoop about the Prime Minister. Why and who pointed the journal to the issue?
• The Romanian President (Basescu) is a hyperactive paranoid who had Ponti foisted on him. It is highly plausible that he is behind the story seeing the possibility of killing three birds with one stone – getting rid of Ponta; smearing the social democrats just before the upcoming parliamentary elections; and bringing the reform of the higher education issue back on the agenda.
• A respected foreign scientific journal was chosen simple because the local media are simply no longer trusted here. 

Comments on the article on the website have been extensive (more than 100) and give a good insight into life and attitudes here in Romania. Everyone has an opinion – only a couple of the comments suggest that more evidence is needed and most involve complex rants.

My own view, for what it is worth, is that –

• Ponta is undoubtedly guilty of plagiarism – the casual nature of his comments demonstrate the mentality of the political class here. The article in question says - Members of Romania’s post-communist elite — including many politicians — have been eager to acquire academic credentials. In the view of some critics, a number of private and public universities in the country are consequently degenerating into ‘degree mills’ that care little about the quality or novelty of the knowledge that they produce, and which are a breeding ground for academic plagiarism.
• The higher education system is indeed deeply corrupted
• "Nature" should indeed be ashamed of the way they have dealt with the issue – the story should have been a more substantive one (and perhaps after the results of the National Committee of Ethics in Research investigation) with Ponta merely being an example. Now the issue is completely politicised
• In his few weeks in power, however, Ponta shows every sign of being a pupil of the control freak in Hungary, Victor Orban. Two days after the Education Minister resigned, the National Committee of Ethics in Research was fired for 'incompetence' reasons. The new Ethics Committee has been accused of being composed mainly of personnel closely related to the prominent SDP member and former Minister Prof. Ecaterina Andronescu. And his government has just politicised the highly respected Romanian Institute of Culture by transferring it from the Presidency to the Senate.

This last move is bad enough -  but it is the way in which it was done that really stinks - an emergency ordinance! It's a major story in itself which you can read more about here.  
Paul Dragos Aligica, a Romanian political scientist at George Mason University in Arlington, Virginia sums up the plagiarism issue - 

“One could almost feel pity for all these guys who have power and money, and who are now craving intellectual recognition. Unfortunately these incidents just add to the disrepute of Romanian academic standards and create extra pressure that real Romanian scholars and scientists will now have to fight against.”

Transylvanian Trilogy

There are not many books available in the English language about this part of the world – Olivia Manning’s The Balkan Trilogy is perhaps the best known - covering the period just before and then during the Second World War.

Over the course of the last ten years, however, mostly through word-of-mouth recommendations, another trilogy The Writing on the Wall, originally published in Hungary between 1934 and 1940, has come available in English (thanks to a translation by his daughter) and bids to be considered as one of the finest works of the 20th century. The first volume, unfortunately, is out of print but I have just finished the second; and the final volume They were divided will arrive shortly here at my Transylvanian mountain redoubt.

The author was Count Miklos Banffy who had a huge ancestral estate in Transylvania, but was also a politician in the Austro-Hungarian empire and after WW I he became Hungary's Foreign Minister. The central character in the trilogy is Count Balint Abady, and we follow his story through the ten years leading up to the outbreak of WW I. Abady is a voice of reason in the Austro-Hungarian government as the empire dithers and bickers its way into the dustbin of history. But politics is only one facet in this vastly entertaining trilogy. Banffy is a great storyteller, and he stuffs the novels with colourful, vibrant characters. There are frustrated, doomed lovers, dissolute aristocrats, scheming estate overseerers, gypsies, a barking mad count, and a couple of dozen other memorable characters – most living their lives just up the road from the Brasov area (where I live) in and around what is now Cluj but is identified in the book by its Hungarian name Kolozsvar. Add in duels, hunts, balls and sundry intrigues and you have 1,500 or so pages of addictive reading. Banffy wants to tell the often bitter truth about the world he knew and he wants to do it in the most vivacious way possible.The second volume is called They Were Found Wanting and one reviewer caught the mood well

This book is the saddest, most gracefully told, subtly portentous book I've read in years, and it's only the second book in the trilogy. First off, the writing is anything but bathetic. It is poetic where poetry is summoned by circumstance and, likewise, quotidian when needs be. It is altogether unbelievably exquisite in the execution. The subject matter has two mirroring themes, constantly playing off against each other, the political obliviousness of aristocratic Hungary as it hurries unwittingly towards WWI, and, more shatteringly poignant to this reader, the slow, inexorable crumbling of the doomed love between Count Balint Abady and the married Adrienne. Here, for example, is the description of Abady's enchantment with the estate woodland, his love for which is only enhanced by his love for Adrienne: "Everywhere there were only these three colours, silver, grey, and vivid green: and the more that Balint gazed around him the more improbable and ethereal did the forest seem until it was only those strands near at hand, which moved gently in the soft breeze, that seemed real while everything further off, the pale lilac shaded into violet, was like clouds of vapour in slight perpetual movement as if swaying to the rhythm of some unheard music."

After WW II, Banffy, like a character in a tragic novel, ended up reduced to a landless nobody with a meaningless title in communist Hungary. His Transylvanian home Banffy Castle at Bontida village was destroyed by retreating Germans in vengeance for his role in Romania changing sides in the second world war. He died in 1950. But the good news is that, under The Transylvanian Trust, the castle is being restored and is now a training centre for craft skills.

Labour

The scything season is getting underway – bit later than usual (I think) because of the spell of cold and wet weather last month. And there is nothing like an hour’s work with a scythe from 07.00 with the sun not yet burning your back – followed by a scrub down on the veranda with water from a traditional bowl and pitcher. Right now (at 08.00) the mercury is measuring 35 degrees on the veranda but, as it is Sunday, I have a powerful excuse for not working!

Earlier this year, I confessed my failure, as a leftist politician in Scotland, to engage properly with trade unions. I was an early example of the breed whose social science training led it arrogantly to assume that they (and their officials) had become a brake on progress. One of the books in the latest Amazon package to arrive this week – Paul Mason’s Live Working or DieFighting - is a powerful and exciting coverage of key events in labour history. As business correspondent for BBC's Newsnight (and the author of subsequent Meltdown) Mason is in a great position to use his knowledge of contemporary capitalism, and the working class it is creating, and marry it with his knowledge of labour history. 

Each chapter begins with a sketch of the conditions suffered by a group of workers subjected to the rule of globalised capital in the modern world. This leads us into the description of a moment from the creation of the unions, the annals of the left or a fleeting revolutionary upheaval shedding light on present problems. 

‘[This] history needs to be rediscovered because two sets of people stand in dire need of knowing more about it: first, the activists who have flooded the streets in Seattle, Genoa and beyond to protest against globalisation; second, the workers in the new factories, mines and waterfronts created by globalisation in the developing world, whose attempts to build a labour movement are at an early stage. They need to know…that what they are doing has been done before…Above all they need to know that the movement was once a vital force: a counterculture in which people lived their lives and the main source of eduction for men and women condemned to live short, bleak lives and dream of impossible futures.’ (x)

The various chapters compare mutilated workers in Shenzhen, China, today and the Battle of Peterloo, Manchester in 1819; silkworkers in Varanasi (Benares), India now and in the Lyons, France, revolt of 1831; the casual labourers of a Lagos slum in 2005 and the Paris Commune of 1871; oilworkers in Basra, Iraq in 2006 and the invention of Mayday in Philadelphiain 1886; and immigrant office cleaners in London’s East End in 2004, and the Great Dock Strike of unskilled workers in London’s East End in 1889. If we eventually reach the globalisation of unskilled workers’ unionism in 1889-1912, we are later confronted by ‘wars between brothers’ amongst miners in Huanuni, Bolivia, today and German workers’ failures to condemn the war of 1914-18 and to bring about a revolution at its end. There are several more such stories in this panoramic work, often expressed in the words of the men and women activists involved.

 “Politically, the labour movement has debated strategy in terms of reform versus revolution. Practically, to the frustration of advocates of both approaches, workers have been prepared to go beyond reform but settle for less than revolution.’ (xiii)

In his concluding chapter, Mason does go into interpretation, offering an explanation for the Post-World War Two loss of working-class independence, and incorporation into two ruling-class projects, one in the West, the other in the East. However:

 ‘It is very different now. Today the transnational corporation is the primary form of economic life. In addition, global consumer culture is breaking down all that was local, insular and closed in working-class communities. There is, for the first time, a truly global working class. But it has not yet had its 1889 moment,’ (page 280)

village tradition and solidarity

Last Saturday I found myself, as an agnostic, in an initially embarrassing situation – being invited (as I thought) to lunch at a village neighbour’s house and landing at a religious ceremony marking 6 months since the death of a grandparent. The penny (and my heart) dropped as I approached the house and saw the older village women in black dresses and headscarves sitting in a row at table. Fortunately the men were in more informal attire - and one of the grand-daughters even in a long, colourful and sexy skirt. And, when the young priest realised who I was, he was very friendly and understanding. Even so, I found the half-hour chanting and reading difficult – particularly when people crossed themselves (something which causes my Protestant and agnostic hands to freeze whenever I attempt an anthropological pretence). And I beat a fast retreat from the room when a couple of women dropped on their knees under the priest’s embroidered scarf right in front of me - and started kissing it.

In between times, however, I was appreciating the way members of the Orthodox Church do celebrate the dead with these rituals at intermittent dates from the death. I’ve mentioned before how bad we Brits are at this. The scale, however, of the subsequent food and drink was a bit excessive – and hardly conducive to proper commemoration (no toasts). Ditto the differentiation between the men and the women – the latter not only sitting separately but also acting as the servants while the men got loud.

The main subject of their conversation at table was the local elections taking place the next day – the last week or so has been highly amusing with long-overdue road repairs being undertaken all over the place including the potholed track (more like a dried-out river bed) which connects our village to the main road.  Here perhaps is a measure of elite attitudes in different countries – the political class everywhere engages in such vote-buying but here they seem to assume that people’s memories are so short that they have to carry out such public works in the days (not months) before the election itself?

One of the important themes in Geert Mak’s biography of a village (see yesterday’s post) is the encroachment of the outside world on tradition and solidarity – initially through roads; then labour-saving devices; money replacing mutuality; then television; european legal requirements for livestock; and, finally, urbanites buying and/or building houses in the village. Other books also cover this theme - eg Blacker's Along the Enchanted Way (Transylvania); Alastair McIntosh's Soil and Soul; and Robin Jenkins' Road to Alto - an account of peasants, capitalists and the soil in the mountains of souther portugal (1979). Alto in Portugal was a self-sufficient economy, with a stable, sustainable agricultural pattern practiced for centuries. There were no major disparities, and people helped each other during the occasional drought. The community didn’t need many external inputs. This utopia could have gone on forever, but for the coming of a six-kilometre tarred road. The farmers moved to cash crops and the cash economy; soon, the village was not producing enough food for itself and became dependent on external seeds, fertilisers, finance. The middlemen gained the most from this conversion.

The old socio-economic structure, where everyone had their place and nothing much ever changed, no longer exists. In its place there is a system in which any land becomes increasingly seen as a potential source of profit. The old stability and predictability has gone forever, to be replaced by the competitiveness and the mentality of a gold rush. All because of six kilometres of tarred road

The pace of change has been slower in this village where I stay; few outsiders like me - although my old neighbour pointed out yesterday (as we were returning with 4 hens he had bought in a nearby town of Rasnov) a house which a Frenchman is apparently restoring. 
And the photo which heads this post is of the embellished track at the bottom of my garden which now allows me to take my car there. 
My acceptance in the village is helped, I’m sure, by my friendship with old Viciu; and by the fact that I live without ostentation (having kept the traditional features of the house – and driving a 15 year-old locally-produced car!!) But you have to get used to a lot of questions – about where you are going; what you are doing; how much things cost you – and comments about your sneezing and nocturnal movements! That’s why I laughed out loud at certain sections of Mak's book which cover these exactly similar features – “people usually proffered  unasked explanations for any action that was out of the ordinary, for anything that could appear not quite normal. You explained why you were walking round behind your neighbour’s meadow – “it’s more out of the wind there”     

Getting under the skin

As regular readers will know, I am a fan of non-fiction books which focus on a place, person, movement or era and help us – by the power of the writing – to get “under the skin” of events. There has been a (rather bitter) controversy in certain American literary circles about whether “literary journalism” is an appropriate term of this genre. There is apparently a website for International Association for Literary Journalism Studies which tells us that for the purposes of scholarly delineation, our definition of literary journalism is ‘journalism as literature’ rather than ‘journalism about literature.’ One of the (rather smug) contenders in the controversy – who has written several books about the issue – offers a more detailed definition

Typically, literary journalism involves immersion reporting (sometimes for a year or longer), the active presence of the author’s voice in the narrative, and it uses the tools long associated only with fiction, such as elaborate structures, characterization, and even symbolism, but with the added requirement of accuracy. Literary journalism often deals with ordinary people rather than celebrities or politicians. Such long-form narratives stand in contrast to the relatively hurried forms of standard journalism. I use the term to describe the work of Edmund Wilson, James Agee, Martha Gellhorn, Joan Didion, Tom Wolfe.

Sad but typical that all examples are (North) American. He might have included writers such as Norman Lewis; Neal Ascherson; William Dalrymple; Arundhati Roy; Geert Mak; or the rather neglected Dervla Murphy. 

But the term does seem a bit ambiguous if not contradictory – “journalistic” implies articles (rather than books) and is a put-down term - and “literary” a rather pretentious one. And who decides whether a work deserves either (or both) of these epithets? VS Naipaul won the Nobel prize for literature; wrote a powerful book about Islam Among the Believers which has all the features of literary journalism – but Naipaul is neither a journalist and only rarely writes articles. And there are many academics who write superb prose-works aimed at the general public eg Simon Schama.

Apparently the more general term is “creative non-fiction” – which I think is more appropriate. But what about the phrase "deep writing" which I found myself using in September?

Coincidentally, I have been reading two books which illustrate, I think, the range and power of such a genre. Geert Mak’s An Island in Time – the biography of a village; and Rachel Polonsky’s Molotov’s Magic Lantern – a journey in Russian History

Mak IS a journalist (Dutch) – but has written wonderful books about Europe; and Amsterdam. 

For An Island in Time he spent a year in a rural part of The Netherlands he had known in his childhood. Let one of the reviewers give you a sense of the book - 

The lure of education, of easy money, of city life and hedonism affected the children of Jorwert, just as it did those of the French mountain youngsters or those in the Spanish plains. Schools struggled and then closed. Shops followed them. Churches remained the focus, but in protestant northern Europe they didn't have the hold they had in the catholic south – which isn't to say the whole Jorwert didn't put aside their personal faiths the day the church tower collapsed and set about figuring out how to rebuild it! Mak examines all of the issues in true journalistic fashion, supporting his arguments with academic study and local example.

It is the local anecdotes, however, that bring the book truly to life and make it worth reading. It really is about Peet who died among the cabbages with his leek bucket beside him. It is about the annual play that commandeers the solicitor's garden… and it is about that same solicitor ensuring that property changes into the right hands when it comes on the market. The real people that make the place what it is.

It is about the stories people tell. Reading "An Island in Time" is very much like sitting at your father's or grandfather's knee and hearing tales of how it used to be. Those tales survive in villages, because villages are really just overgrown families. Word of mouth is passed on and down the line.Like families, villages are hotbeds of dissent and squabble. When planning decisions come up, battle lines are drawn and comments made in the resultant public meetings will determine outcomes of totally unrelated events for years to come. Some things are never forgiven. Small things, usually. The wrong things.

Being 'one of them' enables Mak to enter into the lives of the people of Jorwert. They trust him with their stories. Does he betray that trust? I don't think so. His take is a very sympathetic one. He rarely takes sides, and clearly understands the natures of the pressures and problems. He made me love the place, and its people. He made me care about the fact that their way of life is being lost and that, no matter how many city folk decide to downsize and go back to the land, no matter how genuinely they try to enter into village life, they will never truly succeed – because their motivations have entirely shifted by virtue of their urbanisation.

Polonsky, on the other hand, is an academic who lived in the Nineties in an apartment block still referred to by Muscovites as “the Party Archive” from its years as a resting place for Communist Party officials. Her discovery of the annotated books of a high-level Soviet apparachtnik set her off on a literary journey which she captures in the beautifully-written Molotov’s Magic Lantern. The best of its reviews puts it like this -  

On the floor above hers lay Vyacheslav Molotov’s old flat, with his Stalin-era furniture and the remains of his book collection, annotated and catalogued by the owner in violet ink. It turns out that the loathsome Molotov – who signed off more names for execution during the purges than Stalin, and of whom Stalin remarked (rather wittily): “If Molotov did not exist, it would be necessary to invent him” – was a passionate book collector, who read poetry and whose favourite writer was Chekhov.

There is a dispiriting theme in Polonsky’s book, of cultivated, well-read people who commit terrible crimes: the Nazi collaborator and possible war criminal Boris Filistinsky who later, under the name Filippov, had a long and respected career as a poet and editor at an American university. What is one to make of these characters, who love the humanities, and epitomise inhumanity?

Also in Molotov’s apartment is a magic lantern, for which Polonsky finds an apposite quotation from Anna Akhmatova: “Memory is structured so that, like a projector, it illuminates discrete moments, leaving unconquerable darkness all around.” Molotov has a terrifying capacity to forget. When questioned in later life about those whose lives he signed away, sometimes thousands in a day, he is vague: “I can’t remember… I think he got mixed up with the Right-wingers… What does it matter?” Much of contemporary Russia seems happy to collude with this amnesia.

Yet this book celebrates those few who refuse to forget, and whose efforts illuminate even the darkest moments of the past.
As Polonsky travels in widening circles away from Moscow, down to Taganrog in the south, Arkhangelsk and Murmansk in the north, she encounters the dark side of Russian history. The image of a “Lend-Lease” American bulldozer shovelling frozen corpses into a Gulag grave has huge power; and the great chronicler of the Gulag, Varlam Shalamov, observes Moscow ringed by towerblocks “like watchtowers, guarding the prisoners”, and draws the sombre conclusion that “the watchtower of the Gulag zone was the architectural symbol – the principal idea – of his time”.

Much of Molotov’s Magic Lantern can be read as an ode to books and reading. The 19th-century philosopher and librarian Fyodorov believed that “to study meant not to reproach and not to praise, but to restore life” – both to subjects and to readers. In Soviet times many were sustained by study, finding inventive ways to discuss forbidden preoccupations. Shalamov describes the hunger for books which is almost as unbearable as the pains of starvation. “There is no sweeter thing,” he said, “than the sight of an unread book.”

Later he transformed his suffering into crystalline prose, quite as adept as Chekhov’s. One wishes that Molotov had been forced to read it, although no doubt he would have responded with his usual mulishness: “1937 was necessary.”

Polonsky’s interests are eclectic, ranging from obscure 19th-century poets to contemporary propaganda pamphlets. The latter she fillets with dry wit: unpleasant publications sponsored by the FSB (KGB in new guise) which spell out Russia’s primal supremacy, and the Roerich Movement’s New Age prophecies, “rich in pseudoscience”, which warn of danger from Europe, “noting in passing that the sun sets in the west and scenes of the Apocalypse appear on the western walls of Russian churches”. Contemporary politics does not really interest her, but by sifting through the layers of irrationality and prejudice in Russian culture she achieves a more profound understanding of Putin’s Russia than many other foreign observers.

Good old political economy

Yanis Varoufakis’ recently published The Global Minotaur – America, the true origins of the financial crisis and the future of the world economy arrived here in the mountains a few days ago and has provoked a lot of thoughts. 
First about the light which such a political economic (and historical) approach throws on the matter – an honourable American elite which had experienced the financial breakdown of 1929 and the savagery of the 2nd World War was determined to create the conditions to ensure it never happened again. 
Most of us (think we) know about the 1944 Bretton Woods Conference and its institutions and the Marshall Plan. Not so well-known is the (behind-the-scenes) American role in establishing the Coal and Steel Community (leading to the EU); and in setting Japan on its path to post-war success. 
And, until I read this book, I had, frankly, not really understood the significance of the 1971 American decision to break the dollar link with gold. As the Far East has supplanted the US and Europe as the productive powerhouse, the American deficit (and capital inflow) has mounted to stratospheric proportions – thereby creating the conditions for new and toxic financial mechanisms. 

At the heart of Varoufakis’ writing (including his incisive blog) is the danger of a common currency (whether at global or european level) without a recycling mechanism. There are quite a few summaries and interviews in the internet about the book – eg this one from Naked Capitalism - 

Philip Pilkington: In your book The Global Minotaur: America, The True Origins of the Financial Crisis and the Future of the World Economy you lay out the case that this ongoing economic crisis has very deep roots. You claim that while many popular accounts – from greed run rampant to regulatory capture – do explain certain features of the current crisis, they do not deal with the real underlying issue, which is the way in which the current global economy is structured. Could you briefly explain why these popular accounts come up short? 

Yanis Varoufakis: It is true that, in the decades preceding the Crash of 2008, greed had become the new creed; that banks and hedge funds were bending the regulatory authorities to their iron will; that financiers believed their own rhetoric and were, thus, convinced that their financial products represented ‘riskless risk’. However, this roll call of pre-2008 era’s phenomena leaves us with the nagging feeling that we are missing something important; that, all these separate truths were mere symptoms, rather than causes, of the juggernaut that was speeding headlong to the 2008 Crash. Greed has been around since time immemorial. Bankers have always tried to bend the rules. Financiers were on the lookout for new forms of deceptive debt since the time of the Pharaohs. Why did the post-1971 era allow greed to dominate and the financial sector to dictate its terms and conditions on the rest of the global social economy? My book begins with an intention to home in on the deeper cause behind all these distinct but intertwined phenomena.

PP: What, then, do you find the roots of the crisis to be?

YV: They are to be found in the main ingredients of the second post-war phase that began in 1971 and the way in which these ‘ingredients’ created a major growth drive based on what Paul Volcker had described, shortly after becoming the President of the Federal Reserve, as the ‘controlled disintegration of the world economy’.
It all began when postwar US hegemony could no longer be based on America’s deft recycling of its surpluses to Europe and Asia. Why couldn’t it? Because its surpluses, by the end of the 1960s, had turned into deficits; the famous twin deficits (budget and balance of trade deficits).

Around 1971, US authorities were drawn to an audacious strategic move: instead of tackling the nation’s burgeoning twin deficits, America’s top policy makers decided to do the opposite: to boost deficits. And who would pay for them? The rest of the world! How? By means of a permanent transfer of capital that rushed ceaselessly across the two great oceans to finance America’s twin deficits.
The twin deficits of the US economy, thus, operated for decades like a giant vacuum cleaner, absorbing other people’s surplus goods and capital. While that ‘arrangement’ was the embodiment of the grossest imbalance imaginable at a planetary scale (recall Paul Volcker’s apt expression), nonetheless, it did give rise to something resembling global balance; an international system of rapidly accelerating asymmetrical financial and trade flows capable of putting on a semblance of stability and steady growth.

Powered by America’s twin deficits, the world’s leading surplus economies (e.g. Germany, Japan and, later, China) kept churning out the goods while America absorbed them. Almost 70% of the profits made globally by these countries were then transferred back to the United States, in the form of capital flows to Wall Street. And what did Wall Street do with it? It turned these capital inflows into direct investments, shares, new financial instruments, new and old forms of loans etc.
It is through this prism that we can contextualise the rise of financialisation, the triumph of greed, the retreat of regulators, the domination of the Anglo-Celtic growth model; all these phenomena that typified the era suddenly appear as mere by-products of the massive capital flows necessary to feed the twin deficits of the United States.

PP: You seem to locate the turning point here at the moment when Richard Nixon took the US off the gold standard and dissolved the Bretton Woods system. Why is this to be seen as the turning point? What effect did de-pegging the dollar to gold have?

YV: It was a symbolic moment; the official announcement that the Global Plan of the New Dealers was dead and buried. At the same time it was a highly pragmatic move. For, unlike our European leaders today, who have spectacularly failed to see the writing on the wall (i.e. that the euro-system, as designed in the 1990s, has no future in the post-2008 world), the Nixon administration had the sense to recognise immediately that a Global Plan was history. Why? Because it was predicated upon the simple idea that the world economy would be governed by (a) fixed exchange rates, and (b) a Global Surplus Recycling Mechanism (GSRM) to be administered by Washington and which would be recycling to Europe and Asia the surpluses of the United States.

What Nixon and his administration recognised was that, once the US had become a deficit country, this GSRM could no longer function as designed. Paul Volcker had identified with immense clarity America’s new, stark choice: either it would have to shrink its economic and geopolitical reach (by adopting austerity measures for the purpose of reining in the US trade deficit) or it would seek to maintain, indeed to expand, its hegemony by expanding its deficits and, at once, creating the circumstances that would allow the United States to remain the West’s Surplus Recycler, only this time it would be recycling the surpluses of the rest of the world (Germany, Japan, the oil producing states and, later, China).

The grand declaration of 15th August 1971, by President Nixon, and the message that US Treasury Secretary John Connally was soon to deliver to European leaders (“It’s our currency but it is your problem.”) was not an admission of failure. Rather, it was the foreshadowing of a new era of US hegemony, based on the reversal of trade and capital surpluses. It is for this reason that I think the Nixon declaration symbolises an important moment in postwar capitalist history.

Immediately after reading the book, I turned to Howard Davies' earlier (2010) book The Financial Crisis; who is to blame? which looked (briefly) at 39 different explanations of the global crisis. Astonishingly - although that book's opening pages mention (positively) the 1980 Brandt Commission's call for reform of the monetary system and other critiques of growth and neo-liberalism, they are then put to one side with the comment that "those arguments go beyond the scope of this book"!!! 
Of course root-and-branch critiques are more difficult to translate into the instantaneous and headline-grabbing policy-making political elites now seem to require. But for someone of Davies' calibre to dismiss proper analysis in this way is quite shocking - and tells us so much about the "commentariat" on whom we depend for our understanding. 
There is, perhaps, a lot to be said for elite, behind-the-scenes manoeuvring!! Except that all elites have their snouts in the swill.

The Global Minotaur makes us think about the different ways we try to make sense of the world; how seldom we change our thinking; and what it takes to make us do that. It will be interesting to see how seriously his analysis is taken by other economists or whether (as I suspect) he will be written off as a .....Greek....bearing intellectual gifts....

what is Europe for?

The USE – United States of Europe – is back. For the eurozone, at least. Such "political union", surrendering fundamental powers to Brussels has always been several steps too far for the French to consider. But Berlin is signalling that if it is to carry the can for what it sees as the failures of others in this global crisis, there will need to be incremental but major integrationist moves towards a banking, fiscal, and ultimately political union in the eurozone.
It is a divisive and contested notion which Merkel did not always favour. In the heat of the crisis, however, she now appears to see no alternative. The next three weeks will bring frantic activity to this end as a quartet of senior EU fixers race from capital to capital sounding out the scope of the possible.Herman Van Rompuy, president of the European council, Mario Draghi, head of the European Central Bank, Jean-Claude Juncker, Luxembourg leader and longstanding head of the eurogroup of single currency countries, and José Manuel Barroso, chief of the European commission, are to deliver a eurozone integration plan to an EU summit on 28-29 June. All four are committed European federalists.

The Guardian 5 June 2012 

This is a rare blog (for me) about the European Union. It tries initially to “fix” the mainstream British attitude to what was once “The Common Market” but which, a couple of decades ago, underwent a name change and resurrected ambitions.

Unusually for a Brit, I try to be objective – since I have always been favourably disposed to things European. This was, actually, one of the reasons I felt unable to go forward in 1983 as a Labour candidate for my hometown to the British Parliament. Neither Tony Blair nor Gordon Brown (in the same year) had any such dilemmas in fighting for election with a manifesto which threatened British withdrawal.

The blog is written in response not only to this news item - but also to a reread yesterday of the powerful overview of the European scene (and of its core academic writing) contained in Perry Anderson’s The New Old World. One of the many fascinating insights the book contains is that the intellectual framework for most of the tens of thousands of academics whose full-time professional occupation is European studies is…..American political science. Rather dryly, Anderson quotes (on page 80) Alfred Cobban’s definition of this branch of learning 50 years ago – a device “for avoiding that dangerous subject (politics) without achieving science”     

The fixation of the European political class on Federalism has been a constant source of puzzlement to even the most highly educated and pro-European Brits. Of course we understood the initial post-war drive to ensure there could be no more bloody conflicts between Europeans; we were reasonably convinced in the 1980s by the arguments about the potential a European system had to mitigate the power of the multinationals (although the sad reality has been that the multinationals have become a powerful but hidden part of the European constitution); and we recognised the powerful role which prospective EU membership had played in creating and grounding the legal, political and commercial institutions and processes of ex-communist countries.

But otherwise, we are not convinced by the relentless drive toward homogeneity; nor of the results from all the time and money spent on closed bureaucratic meetings and summits. Winston Churchill’s comment on the latter “Jaw-jaw is better than war-war” no longer packs the punch it once did. Brits are, of course, famous for being an awkward squad. In European circles we are always ready to puncture overblown rhetoric - although, sadly, New Labour brought its own brand of opaque Newspeak to negotiations.

De Gaulle’s dismissive image of the UK being “a nation of shop-keepers” and of bean counters is sustained by the overriding defence of the British political class of the privileges of the London financial elite; of the country’s 1990s rebate; and by its zealous compliance with European regulations. 

Other countries take a more relaxed attitude to their European obligations, appearing good Europeans at the negotiation stage but less so in their failure to implement. Membership of what became the European Union was always for us a matter of economic calculation rather than political commitment. 

And the calculations continue – alongside growing anxiety about the transfer of powers to a complex and opaque system of bargaining (amongst officials and lobbyists) and questionable judicial judgements in other countries. The previous generation of British politicians seemed to value democracy more than the present lot. After all they had fought a war for it! 

We have always been wary of the Eurocrats – and I was shocked during my (short) experience of working in Brussels in the mid 1990s by the privileges and their curious combination of indolence and arrogance. European structures are modelled on the French system which, in the post-war period, has been governed for the most part by civil servants – with citizens being reduced to the role of protestors.  

In the 1980s it was still possible to believe that the EU might build on the European social model (which owed nothing to the European Commission). Delors, after all, was still imbued with the values of most of the founders of the “European project” but, since then, the Commission officials and policies have become infected with neo-liberalism – a disease which most new member countries have also brought to the European political table since 2004. 

It has always been obvious that "the European project" had no place for the citizen - talk of the "democratic deficit" was so much eyewash (and the German push for greater powers for the European Parliament just a guilt reflex). 
But the scales have only now fallen from people's eyes as they saw the ease with which the European Union powers displaced the elected rulers of Italy and Greece..... 

Since writing this, I've come across an extensive overview of current British attitudes to the EU - which reveals the full scale of the British alienation from Europe.

Scotland as fortress against neo-liberalism?

Neal Ascherson is one of Scotland's few intellectual journalists and visited Greenock last year during the by-election there whose results seemed to halt what had been the powerful onward march of the dominant nationalist party there. His subsequent article in the London Review of Books started with an evocative description of the social changes there and the developed some useful insights into the country's politics -

In my first spell there, the great estuary of the Clyde was lined for mile after mile with clanging, sparking shipyards, and every shop-sign in West Blackhall Street read ‘SCWS’ – Scottish Co-Operative Wholesale Society. When I returned nearly 50 years later, the yards had vanished. There were a few charity shops, an Asda; in grey housing schemes up the hillside, a shrunken population waited quietly for the council to repair broken doors and fences. The young, it was said, traded heroin if they needed cash for clothes and clubbing. The young with the energy to get out of their beds, that is.Greenock is struggling into recovery now. It is a place built for outward vision and hope, a big theatre in which tier on tier of streets look out across the estuary to the mountains. Not only James Watt, but many painters, novelists and poets began here. After utter collapse, small citizens’ groups are trying to rub the old town back to life, to restore hope: a new theatre, the restoration of the huge ropeworks factory, a protest (why use cobbles imported from China, in a landscape of good Scottish stone?).

Apart from independence, the Scottish nationalists and the Labour party whom they have supplanted want much the same things. After all, one way to describe what’s going on in Scotland is that a fortress is being thrown up to keep out the worst of the privatising, state-slashing, neoliberal tide: a northern redoubt to preserve and modernise what’s left of British social democracy and the postwar consensus. But coalition would have been unthinkable. Too long spent in tribal hatred. And real differences. Labour in Scotland has a hundred-year history of sacrifice, comradeship and struggle. The SNP has never been socialist, and came late to social democracy. The paint on its social credentials is still drying. Salmond was a banker, but his minority government sat helplessly as Scotland’s banks and its main building society went the way of Iceland and Ireland. (It’s an unwelcome truth that Scotland escaped the same devastation only because it was inside the United Kingdom, and Gordon Brown rescued its finances.)The fundamental perception of British socialism, and Scottish socialism especially, is about wasted lives, the strangled destinies of ordinary people.

Last summer, I went to Jimmy Reid’s funeral in Govan. Billy Connolly, once an apprentice in the same shipyard, told a story about going for walks with Reid in Glasgow. ‘He’d point to a tower block and say: “Behind that window is a guy who could win Formula One. And behind that one there’s a winner of the round-the-world yacht race. And behind the next one … And none of them will ever get the chance to sit at the wheel of a racing car or in the cockpit of a yacht.”’ Does the SNP see its fellow human beings that way? It certainly sees the nation clearly: it has all the angry confidence, the impatience to get down to the heavy lifting, the bright-morning optimism Labour has lost. But how about the compassion?

Jimmy Reid began in the Communist Party, moved to Labour but ended up in the SNP. Latterly, whichever party he was in, he was fond of saying that ‘the rat race is for rats.’ Alex Salmond might prefer Scotland to win the race first and waste the rats afterwards. But at the funeral he announced that Reid’s words, and the speech that contained them, would be reprinted and distributed to every schoolchild in Scotland. After he said this, Salmond looked up from his text and added, almost to himself: ‘What’s the point of being first minister if you can’t do things?’ And Govan Old Church slowly began to rumble with applause, hands beaten by shipyard workers, bankers, ministers of the kirk, women and men of all the parties including Tories, soldiers on leave, families in black who had come from the isles. On this they agreed: in Jimmy Reid’s name, they wanted this man to do things. Now he can.

The photograph is taken from Customshouse Quay and looks toward what used to be the site of the shipyards.