To transform the world we must become dual personalities

Long time readers of this blog will be familiar with regular references to the famous Milgram experiment of the 1960s. This was a psychological experiment in which an unerring majority of subjects, from varying walks of life, displayed a willingness to inflict immensely painful, possibly lethal, electric shocks on strangers - when ordered to do so.

It was a microcosmic refutation of conservative efforts to attribute society’s ills to ethical deficiencies or people’s inner cruelty, recklessness or credulity. Subjective feelings did not matter. Cruel people did not inflict more shocks than kind people. Obedience, not personal disposition, was the deciding factor.

While conservatives such as Niall Ferguson chide that “we bay for regulation, though not of ourselves,” Stanley Milgram’s frequently replicated experiment shows that obedience to institutional drives, rather than wayward personal desires, explains human behaviour at the level of the economy and politics.

It follows that the economic stagnation we face, the “endless crisis” as it has been called, has systemic roots. It is not the result of human frailties but the collective outcome of people rationally pursuing the aims of the institutions they work for (you can blame bankers and CEOs if you wish but replacing them all will merely produce a new parade of faces to despise).

I still think Milgram illuminates where conservatives like Ferguson just kick up dust swirls of confusion. But the systemic/obedience explanation is not the whole story. As Milgram himself concluded, obedience, to work, has to be willingly entered into. Open compulsion just leads to resistance. People, in other words, have to want to be used.

The only thing worse than being exploited is not being exploited

And we do want to be used; increasingly so. The vast majority of people are materially bound to the capitalist system’s, smooth functioning. That’s an observation, not a judgement. We have careers, we covet advancement, we have families and dependants to support. This is all the more acute at a time of economic stagnation, when jobs are thin on the ground. There are 85 applications for every graduate job in Britain. It is in your rational self-interest to make yourself into the kind of person that will make an employer choose you, rather than a rival.

As Oscar Wilde might have said, the only thing worse than being exploited, is not being exploited.

Yet at the same time leaving the system to it own devices, a system that is driven by institutional impulses and is not the collective sum of human desires, is to invite disaster, looming and unending social, economic and ecological crises.

If it is economically rational to accede to the institutional aims of the organisation you work for and to obediently carry out its day to day tasks, it is also economically rational to attempt to rise within it, to not be poor. “Our first duty, a duty to which every other consideration should be sacrificed,” said the socialist playwright George Bernard Shaw, “is not to be poor.” But here lies an intractable rational problem. This explains how economic crises can happen regardless of personal motives, but it also explains how the ‘machine’ will just go on, dispensing its consequences, because there is no-one to intervene to alter or transform its inner workings.

There is a vague hope that somewhere along the line people will decide to rebel. Milgram in his book, Obedience to Authority, likened obedience to sleep. They are both states from which people can be shaken out of. But in Anglo-American societies, at least, it seems clear that it is forlorn to hope that economic decline, the economy pressing down more severely on people, will spark rebellion.

The personal is not the political

I think the first and crucial step in resolving this conundrum is to divorce the personal from the political. We have duties to ourselves and duties to society at large and they are often not the same. The one writer I have come across who has fully recognised our dual and conflicted nature in this regard is Dan Hind.

His 2007 book, The Threat to Reason, was primarily about how being “enlightened” was not about fearlessly denouncing fundamentalists, New Agers or postmodernists but seeking out the truth about our own societies, the real nature of the state and of corporations. But he also made a neglected, though profound point, in that book. In order to transform the word, we first must give up, he said, the idea of a unified self.

“Most of us cannot and will not sacrifice our careers and the welfare of our families for the abstract demands of universal truth and justice,” he writes. “But we are nevertheless confused and distressed by the contradictions inherent in the state and corporate bureaucracies of Britain and America.”

Here is Hind speaking:

The philosophical keystone that Hind makes use of is the work of the eighteenth century German thinker, Immanuel Kant. Kant said that our accustomed definitions of ‘private’ and ‘public’ need to be reversed. When ensconced in any institutional role, as employees, we reason ‘privately’, said Kant. It is only when we are free as individuals to think, unencumbered by any institutional ties, that we can hope to reason ‘publicly’.

It is Hind’s insight that, unless we are independently wealthy, we cannot hope to escape from this dual nature. “We do not have to renounce our private identities as employees,” he writes. “But we must recognise that the sum of our private identities does not constitute the full expression or our humanity.” There is a permanent tension, Hind says, between the requirements of our economic role and a wider commitment to an accurate description of the world and the possibility of radically altered institutional arrangements.

To fully express our humanity and a desire to understand and change the world, we cannot conflate the world-view of our employer with our own. The employer we must detach from may be a corporation. But it can also be a government, a university department, or an NGO. We have to accept our institutional life, but also step outside of it.

A deathly logic

Since The Threat to Reason was published in 2007, the demands of our private identities, the inescapable need to survive and prosper within the confines of this society, have intensified massively. This has trapped us inside a deathly logic which says because we are materially dependent on the success of our actual or would be employers, we should rationally give them everything they want. “What’s good for General Motors, is good for America,” as they used to say in the US. Mould yourself into the kind of person likely to succeed, ever-flexible, ever obedient - sell yourself. At the wider level, make sure corporate tax rates are competitive because the last thing you want to do, obviously, is frighten them away.

What Hind offers is a way to loosen this constricting grip. How we act and what we want on a personal level, are vastly different and often in conflict with, how we need to act and what we should want on a political level. To colonise everything with personal needs and desires, is social suicide.

“An active acceptance of our dual nature as private and public agents holds out the prospect of a world transformed.”

The wreath of conservatism. Niall Ferguson gives us a lecture. Part Two

Since Plato there has been a thread of fear running through Western political thought. The foreboding that, in putting the poor in the saddle, democracy would lead to a fatal redistribution of wealth. Thatcherism in Britain fed on this sense of apprehension: the feeling that government redistribution from rich to poor had placed handcuffs on business, and the creation of wealth. It is a political dogma that conservatives cannot let go of. UK Chancellor George Osborne’s belief that government spending was “crowding out” private sector investment springs from the same source.

Niall Ferguson’s Reith lecture is founded on this primal fear. But he neglects one small fact. That poor and rich have swapped roles. In recent decades conservatives have become so successful at combating this supposed defect of democracy that now in western states, all boasting universal suffrage, redistribution works in the opposite direction. From poor to rich. Or to be more accurate, from the majority to a rich minority.

The ubiquity of corporate welfare in the UK, as shown in part one, is such that its presence can longer be politely hidden. As an example consider the Bank of England’s "funding for lending" scheme which will offer cut-price loans to banks, in exchange for some of their toxic assets such as credit card debt – “assets” which will be transferred to care of the government, otherwise known as the taxpayer. The scheme is worth £80 billion: just £3 billion less than the £83 billion cuts in public spending which the Conservatives are implementing in order, they say, to eliminate the government’s fiscal deficit. Cuts, equivalent to taking 19% from the budget of every government department, which will have a palpable effect on the welfare of people, as opposed to corporations, in Britain.

In continental Europe, the story is similar, and sometimes even more blatant. Spain ran a budget surplus prior to the economic crisis. Nevertheless the right-wing Spanish government of Mariano Rajoy is forcing through a €65 billion austerity package in order to pay for another  €100 billion bail-out of insolvent banks.

Don’t Call it Democracy

Many people now experience government as a racket, shovelling money with alacrity down the throats of banks and corporations, but denying, with stony-hearted glee, basic support to people when they need it most. In Britain, you can pay national insurance and tax for decades, but if you fall ill you find that the “benefit”, which you have paid for, is time-limited for a year. That is, if you are considered ill enough to qualify for benefit at all.

 The honest conclusion from all this is that we don’t live in democracies. We live in “polyarchies” – countries with universal suffrage and fair elections but where a privileged class ensures that, whoever wins, it benefits from government spending and tax avoidance. Former New York Times foreign correspondent Chris Hedges describes our political domicile as a “corporate state”.

But it’s also true that, in these polyarchies, the people who present themselves as fiscal conservatives aren’t conservative at all.

Top of Niall Ferguson’s list of wasteful US government programmes to be culled, come Medicare and Medicaid. They are ways in which the government pays for the cost of medical treatment for people on low incomes and the retired. And it’s true the costs are rising exorbitantly. But that is because these programmes pay for huge cost of private, as opposed to socialised, medicine. A recent international study illustrated the size of the expense. A routine visit to the doctors, the study found, cost $23 in France compared to $89 in the US. The price of an angiogram – a scan to see whether arteries in your heart are blocked – was $789 in America, compared to $35 in Canada.

So one way to seriously reduce the costs to the taxpayer, a sensible person might conclude, would be to create a public health system, resembling the French system, for instance. The “public option” is supported by 65% of Americans, opinion polls say. But to conservatives like Ferguson, the thought is simply verboten. (Actually what Americans got in the recent health care reform was compulsory registration with private medical insurers, a compromise that ensures costs go on rising and that says a lot about the pointlessness of American liberalism.)

Fiscal Incontinence

The idea of using taxpayers’ money to subsidise the private sector is such an unthought of feature of conservative strategy, that it is almost a reflex, rarely rising to consciousness. The possibility that costs might be reduced to the taxpayer by challenging  private sector structures cannot be contemplated.

 In Britain, the 2012 Health and Social Care Act will compel the National Health Service in England to commission services from the private sector. The cost to the public of this new market has been put at £20 billion a year. According to the authors of The Plot Against the NHS, “Each consortium [now clinical commissioning group] will have to employ a team of commissioners to negotiate contracts, monitor their performance, accountants to pay all the bills, lawyers to vet contracts and conduct court cases over disputes, team to vet drugs prescribed by GPs, and check their referrals to specialists and the treatments proposed by specialists. It will also need an advertising and PR department. Every hospital and chain of clinics will need the same.”

The Act, the largest reorganisation of the NHS in its history, has been introduced by the Conservatives in the face of deep opposition, and whilst they inflict £83 billion spending cuts elsewhere. The symmetry with the interests of corporations, regardless of the financial cost to the public, is unmissable. According to health researcher Alyson Pollock, the private health care industry does not want a purely private market. “Its interests lie,” she says, “in becoming for-profit providers in a basic health care system funded out of taxation.” And, at a time of austerity, they are getting what they want.

The similarity between the fate of the de-nationalised railways in Britain and the awaiting fate of the NHS has been noted. An equally inconvenient truth is that re-nationalisation of the railways has been estimated to save £1.2 billion a year. And yet, despite this policy having overwhelming public support, all the main political parties, Conservative, Liberal Democrat and Labour, each one fervently committed to saving public money, reject re-nationalisation. When it comes to derailing the corporate gravy train, our fiscal conservatives magically transform themselves into fiscal incontinents.

You might draw the conclusion that Leftism is the only option that makes financial sense.

Self-regulation

Niall Ferguson ends his lecture with the now familiar conservative lament that, at root, people caused the economic crisis themselves. “As our economic difficulties have worsened, we voters have struggled to find the appropriate scapegoat,” he tells us. We blame politicians, “but we also like to blame bankers and financial markets, as if their reckless lending was to blame for our reckless borrowing. We bay for tougher regulation, though not of ourselves.”

This is clearly meant to be a rhetorical flourish but there is, actually, a simple way of “regulating ourselves”, a method that has been used, often quite brutally, by conservatives in government for decades. The method is interest rates, the price of lending money. The government, or the central bank, sets the rate, and banks and other financial institutions set their rate at similar levels. Government interest rates, in the US and UK, are at historic lows. At 0.5% in the UK, the interest rate is at the lowest level since the Bank of England was formed in 1694. Savers suffer because the interest they get is lower than inflation, while borrowing and spending are officially encouraged.

As far as the state is concerned, Ferguson believes that "you can't solve a problem of extensive debt with more debt”.

But with the wider economy, apparently you can.

If conservatives, such as Ferguson, had the courage of their professed convictions, they would argue that interest rates should rise, to say 8 or 10%. This would reward and encourage saving and discourage the binge borrowers whose reckless behaviour plunged the economy into such dire straits. But I don’t hear any calls to raise interest rates. In 2011, David Cameron did plan to tell the Conservative Party conference that people should pay off their credit card debt. But when the speech was leaked, it was pointed out that if his advice was followed, consumer spending would drop by a quarter and GDP by 15%. The speech was rewritten.

The only conclusion to draw from this silence is that continued borrowing, by consumers and banks, is saving the economy from completely collapsing. In other words, the response to the bursting of a huge credit bubble is to strain to create another one. I’m not an economic historian but that doesn’t look sustainable to me.

As far as conservative thought is concerned, the light is beginning to get in.

The wreath of conservatism. Niall Ferguson gives us a lecture. Part One

I have finally worked out the perplexing intellectual strategy of modern conservatism. It is, despite appearances, nothing to do with personal responsibility, wealth creation, the minimal state or really not liking gay marriage. It is rather aimed at constructing a parallel universe in complete contradiction to the way the world actually is. And then to go to work to get people to accept this surrogate version of reality and use the ensuing collective delusion to quietly fleece people seven ways from Sunday in the interim. 

For the first four years of this economic crisis, the strategy worked like a dream. Now the cracks are beginning to show.

It is an epiphany that springs irresistibly to mind when the poster boy of contemporary conservatism, Niall Ferguson, opens his mouth. The problem with austerity, he evinced in a recent BBC Reith lecture is not that there’s too much of it, but not enough. (It might be said that in his contrarian relish for austerity, Ferguson is the mirror image of the inveterate Marxist-Leninist Slavoj Žižek – Stalin did not go far enough. But that is a matter for another post).

“If young Americans knew what was good for them, they would all be in the Tea Party,” says Ferguson. You will search in vain for a ‘not’ in there. He really means it. Capitalists of the world unite and stop all those poor people getting hand-outs from the government.

But there are obstructions in the way of sating the conservative dream. “Today’s Western democracies now play such a large part in redistributing income,” frets Ferguson, “that politicians who argue for cutting expenditures nearly always run into the well-organised opposition of one or both of two groups: recipients of public sector pay and recipients of government benefits.”

Those pesky benefit claimants, selfishly opposing reform by committing suicide.

Seeing that government’s redistribution of income plays such a large role in conservative demonology, it is worth examining this crime in detail. It would be amiss not to start with the £1.5 trillion increase in the national debt of Britain caused by the banking bail-out in, a redistribution described as the largest single transfer of wealth from poor to rich in England since the time of William the Conqueror. But, William, it was really nothing compared to the US bail-out which cost the government $7.7 trillion, more than half the value of everything produced in the US in 2008. I think that can be classed as a redistribution though not the direction traditionally imagined by conservatives like Ferguson.

Since then of course there has been further government generosity for the richest among us. In June the British government announced an £80 billion emergency support programme for banks, through which they will be given cheap loans in exchange for “poor quality assets like credit card debt”. The Bank of England also promised to pump a minimum of £5 billion a month into “City institutions” to “improve their liquidity”.

This is all in addition to the ongoing marvel of Quantitative Easing, the creation of money by the government. QE is paid, not to benefit claimants or public sector workers, but to banks. Government QE hand-outs will soon amount to £375 billion. The Federal Reserve in the US has dallied a little more in this particular dark art. The practice has cost more than $2.2 trillion there.

It is worth adding that the country highlighted by Ferguson as having the highest public debt, Japan, is the very same country that pioneered Quantitative Easing and has been furiously bailing-out its finance sector for 20 years. There might be a clue there as to the cause of its public indebtedness but I’m not an economic historian like Ferguson.

In totting up the full extent of government redistribution, it’s important not to forget the Private Finance Initiative in Britain: a policy that originated with the Conservative government in 1992, and was then enthusiastically adopted by Tony Blair’s New Labour. It is estimated this will cost taxpayers £300 billion. The poor, unless they own a large percentage of shares in Siemens, don’t benefit from this particular act of government redistribution.

A fifth of government spending in the UK now goes directly to the private sector in form of payments for outsourced services, a proportion that will only increase as outsourcing enjoys a boom not seen since the 1980s. And these companies are always such tremendous value for money. Since the railways in Britain were contracted out to the private sector (by John Major’s Conservative government), taxpayer subsidies have increased twelve-fold to £6 billion a year. The cost of the collapse of tube maintenance company Metronet to the taxpayer £2 billion. The cost of bailing-out the privatised nuclear power generator, British Energy in 2003, was £3.6 billion. The Labour government’s scrapped identity card scheme was estimated to have benefited private contractors to the tune of £6 billion. The bill of the recent car-crash of a PFI project involving Somerset Council and IBM has been put at £31.5 million.

The great leap forward in corporate welfare undertaken by the current Con-Dem government is workfare. A scheme in which the state forces young people to work for large companies for nothing, while paying bare subsistence costs – ie their benefit.

“It is a mystery that while traditional right-wing commentators like the TaxPayers Alliance and the Mail object to funding an individual’s benefits,” writes Alex Andreou in the New Statesman, “they appear quite happy to cross-subsidise huge conglomerates.”

And all this without mentioning the war. The Iraq War, that is. In whose cause Ferguson was such an enthusiastic cheerleader. The war cost the American government an estimated $3 trillion and the British government £4.5 billion. The cost to the UK is £20 billion if Afghanistan is included. And who is exactly is paid to make all those missiles, aeroplanes, guns, bullets and uniforms? It wouldn’t be private, profit-making corporations would it? The bill is always posted to the same address – the state, funded by the taxpayer.

While we’re on the subject of war, it is timely to mention a confession in 2001 by the then US Defense secretary Donald Rumsfeld that the Pentagon “cannot track $2.3 trillion in transactions”.

“I could go on” as Steve Coogan once put it. But you’re probably getting bored by now.

“In the absence of effective scrutiny,” writes Dan Hind, “popular resentment of state expenditure concentrates on transfers of wealth from the middle classes to the poor, rather than on transfers from the majority to a relative handful of insiders."

And for conservatives, resentment, unlike government spending, is something you don’t want to go to waste.