The real watershed of the modern era

1979 is the year people point to as the critical date when the certainties of the immediate post-war period ended – with the election of Margaret Thatcher (and her ally Ronald Reagan a year later); and the overthrow of the Iranian Shah and arrival of theocracy…But it was, arguably, a few years earlier that the tectonic plates moved when Nixon (in 1971) renounced dollar convertibility; and when (in 1973) the oil crisis shook the developed world   

The significance of my last post is the story it tells of a world collapsing in the mid 1970s and the arrival in Washington in 1975 of a new generation of politicians – “the Watergate Babes”….who considered those who had borne the Democrat’s flag for the previous decades as “old-fogies” who no longer deserved a place in power…..

I was part of that same generation – my first taste of power was indeed 1968 (as a town councillor and very soon a committee chairman) – although I was also holding down a position as an academic (until 1985) which gave me the opportunity to absorb the new thinking about political economy and public economics which was then being articulated in the States. Social science was still new then – and economists still few in number. We had, sadly, a certain arrogance about the new tools at our disposal and toward our elders…….Tony Crosland had been my hero - "The Future of Socialism" which followed James Burnham in arguing that management rather then ownership was the issue had been published in 1956....... 
I vividly remember the words which came from my mouth at my inaugural meeting as Chairman in 1971 with an experienced Director – suggesting I could bring to our partnership a managerial experience which was at that stage entirely theoretical!!! 

The Atlantic article gives a wonderful sense of the intellectual mood which was around then - it starts with the newly-elected young Democrats targeting in 1975/76 one of the great stalwarts of the Democrat part,. Wright Patman, who represented the proud tradition of American populism- 

In 1974, young liberals did not perceive financial power as a threat, having grown up in a world where banks and big business were largely kept under control. It was the government—through Vietnam, Nixon, and executive power—that organized the political spectrum. …. suspicion of finance as a part of liberalism had vanished.

Over the next 40 years, this Democratic generation fundamentally altered American politics. They restructured “campaign finance, party nominations, government transparency, and congressional organization.” They took on domestic violence, homophobia, discrimination against the disabled, and sexual harassment. They jettisoned many racially and culturally authoritarian traditions. They produced Bill Clinton’s presidency directly, and in many ways, they shaped President Barack Obama’s.                   
 The result today is a paradox. At the same time that the nation has achieved perhaps the most tolerant culture in U.S. history, the destruction of the anti-monopoly and anti-bank tradition in the Democratic Party has also cleared the way for the greatest concentration of economic power in a century. This is not what the Watergate Babies intended when they dethroned Patman as chairman of the Banking Committee. But it helped lead them down that path.

The story of Patman’s ousting is part of the larger story of how the Democratic Party helped to create today’s shockingly disillusioned and sullen public, a large chunk of whom is now marching for Donald Trump……….
 In 1936, Wright Patman authored the Robinson-Patman Act, a pricing and antitrust law that prohibited price discrimination and manipulation, and that finally constrained the A&P chain store—the Walmart of its day—from gobbling up the retail industry. He would go on to write the Bank Secrecy Act, which stops money-laundering; defend Glass-Steagall, which separates banks from securities dealers; write the Employment Act of 1946, which created the Council of Economic Advisors; and initiate the first investigation into the Nixon administration over Watergate.

Far from being the longwinded octogenarian the Watergate Babies saw, Patman’s career reads as downright passionate, often marked by a vitality you might see today in an Elizabeth Warren—as when, for example, he asked Fed Chairman Arthur Burns, “Can you give me any reason why you should not be in the penitentiary?” 

……..Patman was also the beneficiary of the acumen of one of the most influential American lawyers of the 20th century, Supreme Court Justice Louis Brandeis. In the 1930s, when Patman first arrived in Washington, he and Brandeis became friends. While on the Court, Brandeis even secretly wrote legislation about chain stores for Patman. Chain stores, like most attempts at monopoly, could concentrate wealth and power, block equality of opportunity, destroy smaller cities and towns, and turn “independent tradesmen into clerks.”

In 1933, Brandeis wrote that Americans should use their democracy to keep that power in check. Patman was the workers’ and farmers’ legislative hero; Brandeis, their judicial champion. ….Brandeis did for many New Dealers what he did for Patman, drafting legislation and essentially formalizing the populist social sentiment of the late 19th century into a rigorous set of legally actionable ideas. This philosophy then guided the 20th-century Democratic Party. Brandeis’s basic contention, built up over a lifetime of lawyering from the Gilded Age onward, was that big business and democracy were rivals. “We may have democracy, or we may have wealth concentrated in the hands of a few,” he said, “but we can’t have both.” Economics, identity, and politics could not be divorced, because financial power—bankers and monopolists—threatened local communities and self-government.

This use of legal tools to constrain big business and protect democracy is known as anti-monopoly or pro-competition policy.…..

J.P. Morgan’s and John D. Rockefeller’s encroaching industrial monopolies were part of the Gilded Age elite that extorted farmers with sky-high interest rates, crushed workers seeking decent working conditions and good pay, and threatened small-business independence—which sparked a populist uprising of farmers, and, in parallel, sparked protest from miners and workers confronting newfound industrial behemoths. 

In the 20th century, Woodrow Wilson authored the Federal Trade Commission Act, the Federal Reserve Act, and the anti-merger Clayton Act, and, just before World War I intervened, he put Brandeis on the Supreme Court. Franklin Delano Roosevelt completed what Wilson could not, restructuring the banking system and launching antitrust investigations into “housing, construction, tire, newsprint, steel, potash, sulphur, retail, fertilizer, tobacco, shoe, and various agricultural industries.”

Modern liberals tend to confuse a broad social-welfare state and redistribution of resources in the form of tax-and-spend policies with the New Deal. In fact, the central tenet of New Deal competition policy was not big or small government; it was distrust of concentrations of power and conflicts of interest in the economy.

…….Underpinning the political transformation of the New Deal was an intellectual revolution, a new understanding of property rights. In a 1932 campaign speech known as the Commonwealth Club Address, FDR defined private property as the savings of a family, a Jeffersonian yeoman-farmer notion updated for the 20th century.

By contrast, the corporation was not property. Concentrated private economic power was “a public trust,” with public obligations, and the continued “enjoyment of that power by any individual or group must depend upon the fulfillment of that trust.” The titans of the day were not businessmen but “princes of property,” and they had to accept responsibility for their power or be restrained by democratic forces. The corporation had to be fit into the constitutional order. ….

New Deal fears of bigness and private concentrations of power were given further ideological ammunition later in the 1930s by fascists abroad. As Roosevelt put it to Congress when announcing a far-reaching assault on monopolies in 1938: “The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism.” In 1947, Patman even commissioned experts to publish a book titled Fascism in Action, noting that fascism as a political system was the combination of extreme nationalism and monopoly power, a “dictatorship of big business.”

This basic understanding of property formed the industrial structure of mid-20th-century America and then, through its trading arrangements, much of the rest of the world. Using this framework, the Democrats broke the power of bankers over America’s great industrial commons.

To constrain big business and protect democracy, Democrats used a raft of anti-monopoly, or pro-competition, policy to great effect, leading to vast changes: The Securities and Exchange Commission was created, the stock exchanges were regulated, the big banks were broken up, the giant utility holding companies were broken up, farmers gained government support for stable agricultural prices free from speculation, and the chain stores were restrained by laws that blocked them from using predatory pricing to undermine local competition (including, for instance, competition from a local camera store in San Francisco run by a shopkeeper named Harvey Milk).

The Democrats then extended this globally, through the International Monetary Fund, World Bank, and NATO—even as the United Stated simultaneously used that decentralization to mobilize local communities around the world against the Soviet threat. For example, when General Douglas MacArthur led the Allied occupation of Japan at the end of World War II, key parts of his economic plan included importing the Glass-Steagall Act and antitrust laws into Japan. Back home, Democrats poured government financing into science, and they forced AT&T, RCA, and DuPont to license their treasure troves of patents so that small businesses could compete and so that the scientific discoveries of the corporate world couldn’t be locked away. Eventually, strong competition policy gained a bipartisan consensus, and the idea that anyone would allow concentrations of private power to dominate U.S. politics seemed utterly foolish.

I will continue the summary tomorrow - 
in the meantime, the photo is one taken at the glorious exhibition here in Sofia about the "Russian Impressionists" - "Gust of Wind" (1960ss) by Grishchenko

A Fatal Detachment

Last Sunday’s blogpost – before the Trump victory which was so obvious for those with eyes to see – focussed on populism and on the rage which one finds in Europe and northern America. Bernie Sanders was a self-confessed socialist but such was the people’s rage and need for a champion that they were somehow able (even with America’s visceral hatred for the word) to take that in their stride……

The same was true of Trump – the precariat and the left-behind whites forgave him his offensiveness (even relishing his political un-correctness) since he shared and championed their revulsion of free trade and movement of labour

Scales are beginning to fall from some eyes as the bubble in which the media lives (in their own company and that of the elites) is exposed – with few journalists having bothered to survey life in small-town America. John Harris, with Gary Younge, one of the few who bothered, used a wonderful phrase about “a fatal detachment from the place where politics is actually played out”

We know about the trivialisation of politics but have not quite fathomed perhaps the extent to which even the “higher” journalism indulges in it, with its fixation on personalities rather than issues. Citizens may not be policy geeks but they are experts in the problems/issues they see and feel around them….. 

There are two articles I would urge people to read who wish to have a depth understanding of what is currently going on – first Glenn Greenwald’s piece of 9 November - 

The parallels between the U.K.’s shocking approval of the Brexit referendum in June and the U.S.’s even more shocking election of Donald Trump as president Tuesday night are overwhelming. Elites (outside of populist right-wing circles) aggressively unified across ideological lines in opposition to both. Supporters of Brexit and Trump were continually maligned by the dominant media narrative (validly or otherwise) as primitive, stupid, racist, xenophobic, and irrational.

In each case, journalists who spend all day chatting with one another on Twitter and congregating in exclusive social circles in national capitals — constantly re-affirming their own wisdom in an endless feedback loop — were certain of victory.

Afterward, the elites whose entitlement to prevail was crushed devoted their energies to blaming everyone they could find except for themselves, while doubling down on their unbridled contempt for those who defied them, steadfastly refusing to examine what drove their insubordination.

But the article which really helped connect the dots for me was this long one a few weeks ago in The Atlantic titled How Democrats killed their Populist soul.  I’ve read a lot about the “neo-liberal capture” of our political and government institutions but this is the single article that helped me understand (a) how crucial in the post-war period was the continuing commitment to anti-monopoly policies; (b) how the “Watergate babies” broke that in 1975 in the post-Vietnam and Nixon eras; and (c) the role played in that break by such writers as Lester Thurow and even the great JK Galbraith…

Basically that’s when the pass was sold on globalisation and equality; that’s when my generation lost whatever commitment it had retained to small-town civilisation….

Ina future post, I hope to expand on that…….
in the meantime the painting which heads the post is one from Tony Todoroff's latest exhibition in Vihra's superb Astry Gallery

Leonard Cohen RIP

For the past decade, Leonard Cohen's songs have captured me......it was only a few weeks ago that I enjoyed the youtubes shown below.....one of them shows the most loving interaction between singers I have ever seen......

Others show the most thoughtful conversations.........

Thank you Leonard......RIP

https://gerryco23.wordpress.com/2008/12/18/leonard-cohens-anthem/

https://www.theguardian.com/music/2016/oct/20/leonard-cohen-you-want-it-darker-album-review

https://www.youtube.com/watch?v=IVJImYNGqwk

https://www.youtube.com/watch?v=qD8pe7Iwwb0#t=201.344211

Lonesome Heroes Documentary; https://www.youtube.com/watch?v=-BKx1LpxAt4

https://www.youtube.com/watch?v=44-xVe_vivs

https://www.youtube.com/watch?v=h8Ux6d2b9Ng

http://vancouversun.com/news/staff-blogs/leonard-cohen-the-theology-of-love

http://www.newyorker.com/magazine/2016/10/17/leonard-cohen-makes-it-darker

his tracks have been playing around us all afternoon - and I salute this website which uses one of his lines as its title -  https://gerryco23.wordpress.com/2016/11/11/goodbye-leonard-you-let-in-the-light-for-us-all/

How to Run a Government

Michael Barber’s 2015 book How to Run a Government has what to a Brit is a rather off-putting American sub-title – “so that citizens benefit and taxpayers don’t go crazy”

But, for at least 5 years, he was Blair’s right-hand man in the Cabinet Office trying to “deliver” better performance of carefully selected targets mainly in the educational and health sectors and has, for the past decade, used this experience to build a global reputation as a “delivery” or “implementation” guru in various parts of the world – not least Canada and the Punjab. And he is one of a small (if growing) number of people who has been able to both straddle the worlds of government and consultancy and write coherently……..

So I didn’t hesitate to buy the book from Bucharest’s Anthony Frost Bookshop – even although it failed my “standing on the shoulders of giants” test (ie its - short – reading list failed to mention some important texts from other practitioner/academic/consultants such as Christopher Foster and John Seddon let alone such writers as Chris Hood and Pollitt; Robert Quinn and the entire literature of change management)

But I’m at page 170 and thoroughly enjoying it – despite the occasional over-indulgent self-referencing….. Hardly surprising that he’s made a fair number of enemies in his time but his straightforward language and description of the various techniques and working methods he’s found useful in the last 20 years of advising political leaders in various parts of the world I find both useful and refreshing.

In 1999 I pulled together my own scribbles about reform efforts – for a new audience I was then facing in central Asia - In Transit – some notes on good governance. This was just as New Labour’s Modernising Government effort (which lasted until 2010) was getting underway. I followed these with great interest although the ex-communist context in which I was working was a very different one – see my “The Long Game – not the logframe” (2012) for its assessment of the chances of Technical Assistance programmes making any sort of dent in what I called (variously) the kleptocracy  or “impervious regimes” of most ex-communist countries.   

There are surprisingly few reviews for a book which has been out for some 18 months which says a lot to me about academics, consultants and journalists…..

Populism - what is it?

A common theme of current journalism is the “populist” rage tearing through the fabric of western politics…...as expressed. for example, in Brexit and in the scale and nature of support for both Bernie Sanders and Donald Trump. 
I’ve always had a problem with this epithet  - not least for its patronising tone about citizens and its assumption that our modern elites were incapable of being mistaken about globalisation.......
 A couple of years ago, I extracted this "deconstruction" from the volume of scribblings on the subject- 

- First, the ‘people’ is of paramount importance. Here, a feeling of community is stressed, and horizontal cleavages (such as left-right) are played down while vertical ones are played up for the purpose of excluding particular groups, e.g. elites and immigrants.

- Second, populists claim that the ‘people’ has been betrayed by the elites through their abuse of power, corruption etc.

- Third, populists demand that the “primacy of the people” has to be restored. In short: the current elites would have to be replaced and in their place the new leaders (the populists) would act for the good of the ‘people’.

An earlier post referred to a paper which gave more detail -

1. Populism is the substitute for the eroded Left/Right divide in politics. It replaces it through the populist cleavage of ‘the establishment’ versus ‘the people’. They are perceived as false unities and indeed pose a potential threat to the pluralist and constitutional dimensions of democracy.  

2. Populism is a revolt against (the narrative of) globalisation.  

3. Populism is a revolt against what the Germans call the Second Modernity, or late modernity: that is the modernity of individualisation, de-traditionalisation, cosmopolitanism, neoliberal capitalism and the global network society.  

4. Populism is a revolt against expert-driven, technocratic policy-making.  

5. Populism is the revolt of the working class and the squeezed lower middle class against the dominance of academic professionals in society and public discourse.  

6. Populism is the revenge of the working class after the neoliberal betrayal (permanent welfare state austerity reforms) of socialist and social-democratic parties.  

7. Populism is a dangerous, xenophobic revolt against ill-managed mass migration which negatively affected the lower end of society much more so than the upper end.  

8. Populism is a revolt against a world that is changing too rapidly and where traditions, identities, and securities are no longer respected.  

9. Where socialism and Christianity no longer act as moral and cultural restraints or breaks to the disrupting process of globalisation, populism has filled the vacuum: populism is a romantic, irrational, emotional revolt against the inhuman philosophy of efficiency in both the market and the state. 

10. Populism is a revolt against the powerlessness of the political class who have seemingly lost all grip after handing control over to the anonymous forces of globalisation, the financial markets, and the logics of EU technocracy.

 I would ask my readers to bear these definitions in mind as British and American events unravel in the next few weeks........

Trump looks set........

In 2014 I followed the long debate about Scottish Independence very closely on my blog – taking an agnostic view and offering no hostages to fortune. The 55-45% vote for continued membership of the UK confirmed my assessment about how things were panning out. 
The shorter debate earlier this year on British membership of the European Union which culminated in the stunning 52-48% support for Brexit was a decision I had felt in my bones – although not one I supported. 

I have the same feeling about the Donald Trump campaign……. The guy is clearly one of the world’s greatest bastards – see, for example, this video on the impact one of his golf courses is having on a small Scottish community…..

At the moment, however, he looks set to land in the White House - and the Anywhere but Washington video series gives us a good sense of why......small town america has turned against the power elite....
Few journalists have seemed able to get his measure but this peak-oil blogger is one of the few who has been able to make sense of the interminable American election process of the past 12 months.

Massive giveaways to big corporations and the already affluent, punitive austerity for the poor, malign neglect for the nation’s infrastructure, the destruction of the American working class through federal subsidies for automation and offshoring and tacit acceptance of mass illegal immigration as a means of driving down wages, and a confrontational foreign policy obsessed with the domination of the Middle East by raw military force. ........Those are the policies that George W. Bush and Barack Obama pursued through four presidential terms, and they’re the policies that Hillary Clinton has supported throughout her political career. 

Donald Trump, by contrast, has been arguing against several core elements of that consensus since the beginning of his run for office. Specifically, he’s calling for a reversal of federal policies that support offshoring of jobs, the enforcement of US immigration law, and a less rigidly confrontational stance toward Russia over the war in Syria.

It’s been popular all through the current campaign for Clinton’s supporters to insist that nobody actually cares about these issues, and that Trump’s supporters must by definition be motivated by hateful values instead, but that rhetorical gimmick has been a standard thought-stopper on the left for many years now, and it simply won’t wash. The reason why Trump was able to sweep aside the other GOP candidates, and has a shot at winning next week’s election despite the unanimous opposition of this nation’s political class, is that he’s the first presidential candidate in a generation to admit that the issues just mentioned actually matter. 

That was a ticket to the nomination, in turn, because outside the echo chamber of the affluent, the US economy has been in freefall for years.  I suspect that a great many financially comfortable people in today’s America have no idea just how bad things have gotten here in the flyover states. The recovery of the last eight years has only benefited the upper 20% or so by income of the population; the rest have been left to get by on declining real wages, while simultaneously having to face skyrocketing rents driven by federal policies that prop up the real estate market, and stunning increases in medical costs driven by Obama’s embarrassingly misnamed “Affordable Care Act.” It’s no accident that death rates from suicide, drug overdose, and alcohol poisoning are soaring just now among working class white people. These are my neighbors, the people I talk with in laundromats and lodge meetings, and they’re being driven to the wall. 

Most of the time, affluent liberals who are quick to emote about the sufferings of poor children in conveniently distant corners of the Third World like to brush aside the issues I’ve just raised as irrelevancies. I’ve long since lost track of the number of times I’ve heard people insist that the American working class hasn’t been destroyed, that its destruction doesn’t matter, or that it was the fault of the working classes themselves. (I’ve occasionally heard people attempt to claim all three of these things at once.) On those occasions when the mainstream left deigns to recognize the situation I’ve sketched out, it’s usually in the terms Hillary Clinton used in her infamous “basket of deplorables” speech, in which she admitted that there were people who hadn’t benefited from the recovery and “we need to do something for them.” That the people in question might deserve to have a voice in what’s done for them, or to them, is not part of the vocabulary of the affluent American left.

What's ironic, of course, is that it's an uncouth billionaire who has challenged the conventional wisdom of the power elite.....

a Curate’s Egg

Paul Mason is an engaging writer but, now that I have finished his Post Capitalism – a guide to our future, I have to admit to a feeling of great disappointment.

The book simply fails to live up to the promise of its subtitle. Indeed at least one third of the book is actually devoted to writers and events of more than 100 years ago. Now I am someone who deeply respects the contribution which long-dead writers and people made and which is too easily forgotten – but I do draw the line at suggestions that we have something to learn from the travails of the early soviets of the Russian revolution (p267).

And it is nothing short of breath-taking that his reference to the potential of cooperatives and social enterprise (which employ tens of millions workers globally) dismisses them as “experimental and small-scale” and says that “with the exception of thinkers such as Bauwens and Wark, few have bothered to ask what a new system of governance and regulation might look like” (p 267).

This simply does not begin to do justice to the extensive material which is available – some of which can be seen in such posts as The undermining of cooperation, No Excuse for Apathy and Beacons of Hope

But I am grateful to the book for drawing my attention to the writings of these “thinkers” one of whom is the founder of the p2p Foundation and the other the author of a famous Hacker’s Manifesto. Although I don’t find their accounts coherent or easy to place in the wider literature - they seem the scribbles of young geeks….  

The other text, however, which Mason references and of which I was also unaware, is much more serious – it is Jeremy Rifkin’s 2014 book The zero marginal cost society – the internet of things, the collaborative commons and the eclipse of capitalism  (the link gives the google book).  This does seem a sustained examination of the phenomenon which, despite the title of Mason’s book, he fails (in my view) to treat properly…..   

Rifkin summarises his thinking in this article and here

There is also this review; this interview and a long review from the Ken Wilber integral school

Rifkin’s book does, however, get a fairly severe mauling from the right - the left – and others in between

In short I find Mason’s book a bit of a Curate’s egg - ie good and bad….and suffering badly from the fault to which I draw increasing attention – not even trying to build on the relevant work of others…

Things look up on the wine front

Things seem to be looking up on the Romanian wine front – if my experience yesterday afternoon is anything to go by. Had gone looking for the Dionysus wine bar which had excellent feedback on its Facebook – only to discover that the owner had sold up and that it was in the process of being refurbished. It is scheduled to open next week under the very unprepossessing name (the new owner told me) of “Industrial Winery” (??!!!)

So I wound my way instead to Abel’s Bar which I had noticed last week (open, as seem all such places in Bucharest, from 16.00 to 24.00) and was nicely received by young Anda who advised me on the wine list which contains about 20 Romanian wines, mainly from nearby “Dealul Mare” but also from Vrancea, Dragosani and Transylvania. 

I went first for the Basilescu GOLEM (a mix of Chardonnay and Feteasca from Dealul Mare) and was very impressed that she gave me a small sip for me to check before she filled up the glass. Indeed she did more – she poured me another white alongside the Golem to allow me to compare before I made the choice – the second taste was a GARBOIU (with Sarba/plavaie grapes) from Vrancea

And to help me decide on my second glass – which turned out to be GARBOIU Tectonic (Gewurztraminer) I was able (perhaps this explains the bar’s name??) to taste a sip of Avincis Cuvee Petit (actually a Sauvignon Blanc) from Dragasani (a bit too sweet for me) and a LICORNA Serafim Chardonnay from Dealul Mare – the last of which was very good. But I don’t often get the chance to taste Gezurztraminers so that's what I went for……

Presumably it's the higher prices of Romanian wines (5-8 euros for bottles - compared with 3-5 in Sofia) that make real wine bars feasible in Bucharest. Opportunities to taste by the glass are simply not to be found in Sofia -except at the special events held by CasaVino and Vina Orenda.   

While googling for these websites I found a serious Romanian wine blog – with the delightful name of Good Things. What really impressed is that he has more than 200 posts about wines under 20 lei (just over 4 euros)