Too successful for its own good. Should we save capitalism from itself?

There are many kinds of capitalism. Free market capitalism, which easily morphs into the dominance of corporations. Or social market capitalism, in which there is a larger role for the state and workers are represented on company boards. There is even state capitalism, in which everybody works for state enterprises, which pass themselves off as socialist, but exploit people just the same.

But now perhaps there are only two kinds of capitalism which count. Successful capitalism and capitalism which is too successful for its own good. The consequences of each are different but equally horrible in their own way.

Back in the roaring nineties successful capitalism was thought to be the only game in town. In Britain, Tony Blair’s New Labour exemplified the social democratic acceptance of capitalism. The “market” would hum along unmolested in the background and the government would skim off the tax revenue. Labour spokespeople waxed lyrical about the wealth-creating genius of the private sector and spent the proceeds on tax credits for the working poor, the National Health Service – health spending went up by 30 per cent – and relieving child poverty. It was, in essence, a deal.

But, said Left and green critics of capitalism, this was a myopic accommodation, trading short-term advantages for long-term disaster. Growth – the social ecologist Murray Bookchin said expecting capitalism not to grow was like expecting a lion to become vegetarian – might support enlarged public spending but would eventually make the planet unliveable.

In 2007, a British professor of engineering worked out that, based on an economy growing at three per cent a year, we would consume resources equivalent to all those we have consumed since humanity began as a species by 2040. In 33 years. I think the word you are grasping for is unsustainable.

As the writer Mark Fisher has said, successful capitalism was based on a fantasy: “A presupposition that resources are infinite, that the earth itself is merely a husk which capital can at a certain point slough off like a used skin, and that any problem can be solved by the market”.

To believe in successful capitalism you had to stick your index fingers in your ears and sing “la, la, la” very loudly. But both celebrators and critics agreed that capitalism worked.

Oh shit

But just as capitalism was swaggering around the globe, assured in its invincibility, disaster struck.

The global economic meltdown happened, the worst economic contraction since the Great Depression. $14.5 trillion of value was wiped from global companies.

The former masters of the universe, who meet at Davos, now speak of a “dystopian future” destroying the gains of globalization.“For the first time in generations, many people no longer believe that their children will grow up to enjoy a higher standard of living than theirs,” they warn.

Something had gone badly wrong.

The conventional explanation was that investment banks were too reckless, financial speculation overreached itself and the economy became dangerously skewed. But, in truth, capitalism had become too successful for its own good.

In the US, where the crisis was hatched, wages had stagnated since the mid-70s, while productivity – worker ouput that the employer benefits from – raced ahead. The result was not only spiralling inequality (the US was actually more equal than many western European countries in early ‘70s) and burgeoning corporate profits, but an orgy of personal borrowing so that consumption could be maintained despite the fact that earnings weren’t going up.

A cursory look at recent US economic history shows a series of bubbles. A massive stock market crash struck in 2000. The price of shares is dependent on the expectation of future corporate profits so crashes occur when there is a realisation of total over-optimism about profits. The crash was stopped from turning into a recession by reducing interest rates to below the rate of inflation for three years. Borrowing doubled – the house price and house building bubble ensued – but when that burst so spectacularly in 2007 there were no more bubbles left. Reality – the reality of stagnating earnings – could be evaded no longer.

A dusty old critique of capitalism suddenly became remarkably persuasive. That held that capitalism was inherently self-destructive. Each employer tries to keep wages, which are just another cost, as low as possible. But if they are too successful in that endeavour, the same workers with the low wages won’t be able to play their other vital role in capitalism, that of consumers of goods. Economic health depends upon the employer impulse to keep wages down being frustrated by another countervailing power. Capitalism can be too successful for its own good.

Flatliners

Worryingly for economic health, the US capacity for stagnating earnings has proved a very effective export. In the UK, earnings grew strongly throughout the ’80s and ‘90s but have flat-lined since 2003, four years before the onset of the ‘great recession’. Worker productivity, meanwhile, has kept on steaming ahead. Post-downturn wages rises in Britain are currently half the rate of inflation. Average wages are forecast to be no higher in 2015 than they were in 2001. France and Germany have followed a similar trajectory. Researchers describe an acute “decoupling”of earnings from growth.

The UK Resolution Foundation, which has produced a series of reports on living standards, worries that a return to growth won’t necessarily mean rising wages. Stagnating earnings also ensure burgeoning inequality (yes, it can get worse).

But there is another larger, elephant in the room, problem. The US experience demonstrates that you can’t, to use the economists’ elegant term, “decouple” growth from earnings forever, without eventually destroying growth as well (in industrialised, western countries at least, the experience of developing, exporting countries like India seems to be different). Earnings are purchasing power, in economics-speak ‘demand’, and growth cannot survive indefinitely without purchasing power.

The economic vista in front of us is that of a tsunami of bank debt inexorably making its way to shore. At the same time, earnings power which could lift countries out of recession, is exhausted. The level of personal borrowing is huge and, as we have seen, earnings stagnated or declined even before the recession.

That last factor cannot be wished away, or undone by governments even if they were inclined to. The reasons for stagnating earnings are analysed by a Resolution Foundation report. Technological change has obviated the need for low-skilled workers, firms have given precedence to share dividends over the pay of ordinary workers, outsourcing has increased, and the bargaining position of workers has been diluted. None of these factors will be reversed given current trends and the balance of power politically and economically.

The globe stops warming

It doesn’t have to be this way, you cry. And you’d be right. The Resolution Foundation report, Painful Separation, finds that in some European countries, namely Finland, Sweden and Denmark, there has been only mild divergence between economic growth and median pay. It is no accident that in Scandinavian countries, they say, “Recession? What recession?”

They haven’t killed the goose that lays the golden egg. They, if it isn’t stretching the metaphor too far, nurture their goose. They have effective countervailing powers like strong trade unions. They haven’t left successful capitalism behind. But there is a catch.

Amid all the deleterious social effects of the great recession – the homelessness, the riots, the suicides, the divorces – there was one undoubtedly progressive, though unintended, result. The sudden drop in economic activity achieved something international protocols and protesters invading airport runways had failed to. The rate of global warming was arrested. For only the fourth time in 50 years, carbon emissions fell.

It is clear that the kind of capitalism that Anglo-Saxon societies have been living through for the past 30 years is an ineffective form of capitalism. Growth rates have been unimpressive, financial crises have become more frequent and earnings have been held down. Too much power has been given to or taken by corporations and the rich. Capitalism has become too successful for its own good.

The South Korean economist, Ha-Joon Chang, in his book 23 Things They Don’t Tell You About Capitalism, argues convincingly that what we call “free market economics” has been shown to fail spectacularly. He puts the case for more assertive government control, different forms of ownership, the outlawing of financial products like derivatives, and the rebalancing of the economy away from finance and into the long-term production of manufactured goods. Capitalism can work if the harnesses are placed back on and it is guided in the public interest.

In other words, a return to successful capitalism, a capitalism that is in rude health. Chang eulogises the “miraculous” performance of South Korea in the ‘80s and ‘90s, which grew at an average of six per cent year. China today, he says, illustrates what can be done if free market prescriptions aren’t followed.

The problem isn’t the economic reasoning. The problem is that the world, ecologically, cannot cope with the replication of the Chinese or South Korean economic success stories. If earnings in the US had continued to track GDP growth, as they had done from 1945 to 1973, the average household would have earned $80,000 a year, not $50,000 as they in fact do. Even accounting for the spike in borrowing, consumption has been suppressed in US as capitalism has become too successful for its own good. It is revealing that Chang mentions the word “environment” just once in his entire book.

Chang, like John Maynard Keynes seventy years ago, wants to save capitalism from itself. 

Post-capitalism

But the truth is that neither successful capitalism, nor capitalism that is too successful for its own good, presents a remotely desirable prospect.

The latter leads, in Ann Pettifor’s words, to “dramatically higher levels of unemployment, the loss of savings, home foreclosures, bankruptcies, emigration, suicides, divorce, social unrest and political upheaval – to name but a few of the consequences.”  The former provides a swifter route to the dystopian future of global warming.

Awareness of the awful consequences of both alternatives leads to the realisation that the only rational option left is some form of post-capitalism. It doesn’t mean, in the caricature of one British government minister, everyone running around in Maoist boiler suits, but it does entail an end to the growth fetish and ensuring a secure standard of living for everyone. What “post-capitalism” is like in detail is what we should be concentrating on now.

You don't have to be a psychopath to work here but it helps. Does Darth Vader run Goldman Sachs?

“Know the power of the dark side” says Darth Vader to Luke Skywalker in The Empire Strikes Back. But we haven’t, it seems, taken Darth’s wise, if husky, counsel to heart. According to management researchers we are naively unaware of the dark’s malign and boundless influence. “Dark leadership” they claim, was the force behind the global financial crisis.

Once great companies were brought to their knees by “impostors” acting as their leaders. Dark, dysfunctional leadership has destroyed firms with historic reputations. Employees have lost their livelihoods, shareholders their investments and, perhaps most troubling of all, capitalism has lost some of its credibility.

Corporate psychopaths, says Clive Boddy, a Professor at Nottingham Trent University, are one type of dark manager. In a paper for the Journal of Business Ethics entitled “The Corporate Psychopaths Theory of the Global Financial Crisis” Boddy says corporate psychopaths “probably” or “largely” caused the global financial meltdown.

Commentators, says Boddy, no longer accept that all managers work selflessly for the benefit of the organisations that employ them. Corporate psychopaths are an example of this selfish, destructive manager.

Psychopaths are the one per cent of people who completely lack a conscience. They are charming but ruthless and entirely out for themselves. As a result, they are a menace to the companies they work for and society as a whole.

These psychopaths rose to senior positions within financial corporations where they were able to influence the moral climate of the organisations that employed them, Boddy claims. They “largely caused the crisis” because their “single-minded pursuit of their own self-enrichment and self-aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

How did these monsters manage to get so powerful? Well, before the 1980s, companies were more stable and slow to change, Boddy writes. Corporate psychopaths were more noticeable as “undesirable managers” and their “selfish, egotistical personalities” didn’t get them very far. But then the corporate environment became more dynamic and chaotic and corporate psychopaths made their way to the top of organisations which they were able to destroy from within.

Bollocks

There’s one slight flaw in this theory. It’s complete bollocks. Far from these “undesirable managers” rising invisibly through the corporate hierarchy until they reached the corner offices of financial behemoths, they were eminently desirable and desired. Brian Basham, “veteran City PR man, entrepreneur and journalist”, writes approvingly of Boddy’s corporate psychopath theory for the UK Independent newspaper. But mid-way through the article Basham relates a conversation he had with a “senior UK investment banker” about the attributes of successful banksters. The senior investment banker makes a confession:

“At one major investment bank for which I worked, we used psychometric testing to recruit social psychopaths because their characteristics exactly suited them to senior corporate finance roles.”

“Here was one of the biggest investment banks in the world seeking psychopaths as recruits,” writes Basham.

This major investment bank, for some mad reason, preferred the characteristics of psychopaths to the “old fashioned concept of noblesse oblige” equality or fairness.

Never-ending growth

But when Basham tries to locate the source of the malaise he, too, drifts swiftly into fairy land. He thinks the financial sector’s search for “never-ending growth” is to blame.

I hate to the interrupt the catharsis of hating heartless bankers but the search for never-ending growth is universal in capitalist societies and not restricted to the intangible, abracadabra money-creating world of finance. Every week newspapers fret over whether economic activity in the services or manufacturing sector is above 50 per cent (that means growth hurray!) or below 50 per cent, which means contraction (we’re all doomed!). Governments manically chase the willow the wisp of growth. Without growth, in this society, we’d live in a permanently depressed economy, with the blights of high unemployment, poverty and homelessness for company. Without growth, in technical terms, you’re screwed.

Growth is, to use a word that is coming back into fashion, systemic and the financial sector, like every other sector of the economy, hasn’t stopped pursuing it, even if it has stopped achieving it.

Greggs the Bakers, to take one example, is not a bank - you can’t get much more tangible than a sausage roll - but it, too, has a never-ending search for growth and has been very successful in achieving it. It now has more high street shops in Britain than McDonalds. The way companies, including but not only banks, operate, is to secure and augment market share, destroy the competition, make as much money as they can and achieve as close to monopoly status as possible. In other words, grow.

Rip out their hearts

Basham has seen Dick Fuld, former CEO of Lehman Brothers on video, snarling that he wanted to rip out his competitors’ hearts and eat them before they died. It’s terrifying, he says. But it’s also not unique. I personally can attest to one manager in a non-financial company who wanted to render a competitor so poor they couldn’t even afford shoes. Some people do take the injunction to destroy the competition rather too literally. But they aren’t all psychopaths. They are all senior managers in capitalist firms, however.

Here is Dick Fuld in action (note the applause after he says he wants to rip his competitors’ hearts out)

Basham’s neat separation of good and bad capitalism, like Ed Miliband’s emphasis on predatory capitalism, ignores the allure of finance in the first place. It wasn’t just the likes of Lehman Brothers, Goldman Sachs and Citigroup that were, to use a technical economic term, “at it”. Manufacturing companies like Ford and General Electric diversified massively into finance for the rather prosaic reason that they could make far more money out of lending to people than through their core business of making cars, light bulbs or fridges. “Because its lending division, GE Capital, has provided more than half of the company’s profit in some recent years, many Wall Street analysts view G.E. not as a manufacturer but as an unregulated lender that also makes dishwashers and M.R.I. machines,” says a New York Times article.

 The dominance of finance is not an aberration, but a simple recognition of where the biggest profits can be made.

Basham, in approving of the corporate psychopath theory says that, in unregulated times, the least-principled rise to the top. But how, prey, did the times get so unregulated? Through continuous and expensive lobbying by financial corporations and banks, that’s how. The US Commodity Futures Modernization Act of 2000 which legalized speculation in commodities and derivatives like credit default swaps, didn’t happen all by itself.

Can Basham name a single corporate CEO, psychopathic or non-psychopathic, who lobbies for more regulation? That might as well have been a rhetorical question.

Psychopaths didn’t lobby for financial deregulation anymore than they employed themselves in investment banks.

Functional, all too functional

Deregulation and the ensuing crisis, scandals and bankruptcies did not come about because of bad people or dysfunctional leadership. Leadership was all too functional. In the words of American economist, Richard Wolff: “Capitalism systematically organizes its key institutions of production – the corporations – in such a way that their boards of directors, in properly performing their assigned tasks, produce crises, then undermine anti-crisis reforms, and thereby reproduce those crises.”

It’s all the difference the world. To use an analogy, Manchester United is not a football club because Manchester United Plc employs people who are good at football anymore than Lehman Brothers acted psychopathically because psychopaths wheedled their way into leadership positions at the firm. Manchester United is designed and constituted to be a football club so it seeks to recruit people who can tackle, catch left-wing crosses swinging in the wind, or are lethal from 12 yards. Investment banks seek psychopaths for the same reason that Manchester United seeks young men who can score 30 goals a season.

It isn’t complicated and the fact that intelligent people can’t see it must mean there is a reason for their willful blindness. There is a taboo at work here. As Jack Nicholson once said, “The truth? You can’t handle the truth.”

I don’t want to burst Boddy’s carefully constructed career bubble (actually that’s a lie) but it is quite possible to work selflessly for the benefit of the company that employs you and for that company to behave selfishly, psychopathically even. The aforementioned General Electric has a giant tax department with the sole purpose of avoiding tax. GE actually received a tax benefit in the US of $3.2 billion in 2010. “We have a responsibility to shareholders to legally minimize our costs,” explains a GE spokeswoman (the second, unspoken part of the sentence is “everyone else can get f*****”). That’s an institutional reason for selfishness. No psychopaths needed. Fairness and noblesse oblige are also conspicuous by their absence.

But the expectation that managers should be selfless is, in any case, mystifying. “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest,” said Adam Smith. That sentence has become one of the foundations of market economics. Our own personal selfishness, in other words, leads to an overall benefit to society. Self-aggrandizement and the desire for self-enrichment are expected, desired even, in capitalism. But now, according to Boddy, those same selfish qualities have become the reason for disaster. I must have missed something.

Friedrich Hayek, the free marketeer who had such an influence on Margaret Thatcher, said society would prosper if everyone was motivated by personal gain. Now we are told by capitalist ideologues like Boddy that the problem is too much selfishness. You have to admire the flexibility.

The psychopath theory of the financial crisis needs further development and research, says Boddy. And like investment banks during the boom, there is immense potential for expansion. Why not apply the theory to 9/11 for example? The reason Al-Qaeda flew planes into the World Trade Center was because it was run by psychopaths. What we need is a new Al-Qaeda with leaders committed to fairness and equality. If that sounds ridiculous, that’s because it is.

Surely the role of psychopaths in causing the Second World War has been underplayed? The National Socialist German Workers’ Party must have been honeycombed with psychopaths. Unfortunately for the theory, Reinhard Heydrich, the man who conceived and planned the Final Solution, was partial to the very non-psychopathic activity of playing Beethoven string quartets with friends in his spare time.

The truth is far more disturbing. With all due love and respect to the Occupy Movement, it isn’t the one per cent of psychopaths that you need to worry about, but the other 99 per cent.

The 99 per cent

The Milgram Experiment, which has been examined in this blog, explains why attributing outcomes no-one likes to psychopaths is a monumental cop-out. In the experiment, first conducted 50 years ago, members of the public were instructed to give electric shocks to a “learner” if he got memory testing questions wrong. No real shocks were actually delivered, the “learner” was acting, but the participants thought they were really hurting someone. One or two per cent of people relished giving the shocks – up to 450 volts - and inflicting pain. They were real sadists, maybe psychopaths.

 The vast majority – around 70 per cent of participants – didn’t like what they were doing but went on dutifully giving electric shocks on instruction, even passed the point they thought the learner might be dead. They took no pleasure in delivering the shocks - they shook, sweated, they even laughed hysterically at themselves – but they obeyed, and did it anyway.

The motives of the sadists/psychopaths and the ordinary folk were completely different. But their actions were the same.

As the creator of the experiment, Stanley Milgram, said, subjective feelings were irrelevant. When a person merges their unique personality into an organisation, they become a mere vessel, and are no longer an autonomous person. “It is the essence of obedience that the action carried out does not correspond to the motives of the actor,” he concluded, “but is initiated in the motive system of those higher up in the social hierarchy.”

In case of the investment bank that used psychometric testing to find psychopaths because they were so suited to senior finance roles, non-psychopaths would have had to mimic their behaviour or find somewhere else to work. Their own motives and personalities were irrelevant.

In the 18^th century, the French philosopher Montesquieu said, “First men make institutions but afterwards institutions make men”. It is a simple piece of wisdom. If we want real change we had better change institutions because changing people is a road to nowhere.

On one point, however, Boddy is correct, if for the wrong reasons. He says that if the corporate psychopaths theory of the financial crisis is accurate, “we are now far from the end of the crisis. Indeed, it is only the end of the beginning.” The second part is true.

Here is a more rational view of the corporate psychopath (it's not about individuals)

Is everything my fault? Conservatives, responsibilization and Jean-Paul Sartre

There is a table in Walter Benn Michael’s book, The Trouble with Diversity, at once vindicating and disquieting. The table shows average American SAT, college admission tests, results ranked by family income. It is no shock that students from rich families have much better scores than students from poor ones. What is fascinating, though, is that scores rise smoothly depending on family wealth. Students from quite rich families do well, but not quite as well, as students from very rich families.

The Spirit Level, written by the English epidemiologists Richard Wilkinson and Kate Pickett, uncovers the same trends across a whole range of malaises from obesity to teenage conceptions.

 The percentage of young British women from the second richest quarter of households who become teenage mothers is double that of women from the richest quarter. Mothers from the second from top social class group are more likely to say they have a poor relationship with their children than mothers from the very top social class.

It is not just that extreme differences in circumstances produce different real-world outcomes. But also that small differences in circumstances appear to produce palpably different outcomes.

Even something as personal as mental health is intimately related to kind of economic system you live in, actually the kind of capitalism. Americans, for example, are far more depressed, on average, than Italians. And mental health can change remarkably quickly, apparently in response to changed economic conditions. Oliver James in his book The Selfish Capitalist shows what happened when Australia deregulated consumer credit in the 1990s. Within a few years Australians had three times as many credit cards as Europeans and worked the longest hours in the developed world. During the same period, mental distress spiralled. The number of Australians who were severely distressed, to the point of seeking treatment, rose by two-thirds in four years.

The idea that how you think is basically a product of your social environment is not new. It was Karl Marx who famously said, “It is not the consciousness of men that determines their social being but, on the contrary, their social being that determines their consciousness.”

Before Marx there was the socialist pioneer Robert Owen, who said the problem of his age was the Christian insistence on “individualization”, fixing responsibility for problems on the individual and denying the all-powerful influence of society.

Just as in Owen’s time, there is now a clamour for fixing responsibility for problems on the individual. Growing and convincing evidence for the indisputable influence of society explains why books like The Spirit Level, which meticulously document how social and economic systems influence behaviour, have been attacked by right-wing thinkers. They know it’s on to something.

But there is also something in this line of thought, call it determinism, that people who aren’t right-wing ideologues recoil from. It’s not inevitable that if you are well off, as opposed to very rich, you will have a slightly more fractious relationship with your children. Most people can’t help but rebel against the idea that “their social being determines their consciousness”, no matter how many statistics are around which say that it does. They are not just puppets of circumstance. They still feel free.  

And they are right. Nobody but you decides whether to slump on the sofa for hours watching tv or go out and exercise. Nobody but you decides who to sleep with or who to marry. Whether you like it or not, you are responsible.

This feeling explains the stubborn allure of the right-wing emphasis on personal responsibility, despite its myriad contradictions. You choose your own destiny, say conservatives. Chick lit writer turned British Conservative MP, Louise Mensch encapsulated this perfectly in a Guardian profile last September. “I take the classic Reaganite view that if you want something, you have to do it yourself,” she said. “Life is what you make it, don’t accept your limitations, jump before you’re pushed, leap before you look.”

You can scoff like the author of the profile, and scoff quite justifiably, that nothing will shake Mensch’s opinion that the only difference between her and some jobless loser on a council estate, is a go-getting attitude. Mensch, of course, was privately educated and comes from very wealthy family (something like the great ‘rags to riches’ entrepreneurs Rupert Murdoch and Richard Branson). But when she says nobody else wrote my novels for me and “my achievements, such as they are, are my own”, she is right. Even if you are the privately educated daughter of Catholic gentry, it’s not inevitable that you will write crap novels or get elected as a Tory MP. You have to want those things.

Is there a way out of this conundrum, where the claims of both free will and social determinism appear justified in their own way? “It makes no sense to complain since nothing foreign has decided what we feel, how we live, or what we are,” said Jean-Paul Sartre in 1943. Sartre was the father of existentialism, an unforgiving doctrine of personal responsibility that would make even Louise Mensch blush.

When Gary Cox, author of How to be an Existentialist says “Freedom is not freedom from responsibility, freedom is having to make choices and therefore having to take responsibility,” he sounds like a stern conservative fundamentalist. Sartre was so uncompromising on personal choice that he even wrote, “I can not be crippled without choosing myself as crippled.”

To existentialists, consciousness was all about future possibilities. You always have the freedom to respond to a given situation. Even you are being escorted by prison guards down a strip-lit corridor leading to a lethal injection chamber, Sartre would say you still possess the freedom to respond to that situation in the way you want to.

His major philosophical work, Being and Nothingness, was written against "determinists of all stripes" .

But Sartre was not a conservative. He was a Marxist. He wrote a long book, Critique of Dialectical Reason, trying to reconcile existentialism and Marxism. His brand of Marxism ranged from the flawed to the bizarre. He was a long-standing supporter of the Stalinist French Communist Party and ended up dallying with Maoism and the Baader-Meinhof gang. I’ve no interest in defending these allegiances, but the point remains that Sartre, the most unforgiving and anti-determinist existentialist, was not a conservative or a neoliberal. The reason why I hope will be apparent soon.

Here is a film about Sartre::

Another existentialist, the psychologist Viktor Frankl, wrote a book about his experiences in Nazi concentration camps, including Auschwitz. Even in the worst imaginable circumstances, you can find meaning, find a way to react, he said. He wrote a critique of what he called, pan-determinism.

You cannot be free from conditions, said Frankl, but you are always free to take a stand towards those conditions.

“As a professor in two fields, neurology and psychiatry, I am fully aware of the extent to which man in subject to biological, psychological and sociological conditions,” he wrote. “But in addition to being a professor in two fields I am a survivor of four camps – concentration camps, that is – and as such I also bear witness to the unexpected extent to which man is capable of defying and braving even the worst conditions conceivable.”

You can predict the future only within the framework of a large statistical group, said Frankl. The individual remains essentially unpredictable.

This is Frankl being interviewed:

 There are similarities between the conservative and the existentialist emphasis on responsibility, but only superficial ones. The conservative explanation for the economic crisis is that people in general, an undifferentiated mass of people, were responsible. Conservative MP Jesse Norman blames “humans” for not understanding risk properly and misguided banks who hyped unaffordable mortgages on a credulous public. Companies, he goes on, are formed by human affection (stop laughing). So if companies spring out of human desires, then what they do is the responsibility of all of us. If the economy tanks, we have brought things on ourselves. The “economic system” has no impulses of its own apart from the desires of the people that comprise it, said the free market Institute of Economic Affairs in 1978. Capitalism “does what its users demand of it” says another British right-winger, Tim Montgomerie. “How can we put limits on ourselves?” he asks with perplexity?

But while conservatives say people cause their own problems, it denies their ability to change the underlying economic conditions save the contortions of trying to make themselves fit in. This is real cruelty of contemporary conservativism/neoliberalism. It says it’s all about freedom but really it’s just about adaptation.

Long ago Karl Polanyi noted the “rigid determinism” of free market economics. The market economy is a delicate machine that only works if government gives way to what the markets want. In modern times, while globalization was just something to be celebrated, the American journalist Thomas Friedman talked about the “golden straitjacket”. Countries would only prosper if they privatized state-owned companies, cut corporate taxes, balanced budgets and eliminated restrictions on foreign investment.

The straitjacket isn’t golden anymore, but it has been stretched even tighter. Debt-ridden governments, bankrupted by bailing out banks and recession without end, say they have no choice but apply drastic cuts to public spending to satisfy the same “markets” that lent to them. Prosperity isn’t the aim anymore, just survival.

What Karl Polanyi wrote of the Great Depression is now just as true eighty years later. “Whether wages or social services had to be cut, the consequences of not cutting them were inescapably set by the mechanism of the market.”

American journalist Barbara Ehrenreich has written of the plight of professional Americans who have done everything right – got impressive degrees and gained marketable skills – and still find themselves economically unneeded and jobless. They, in their thousands, turn to career coaches, who immediately locate the problem in them and their attitudes, rather than in an economic system that finds them dispensable. In the 1820s, Robert Owen spoke of individualization, denying the influence of society and blaming the individual for everything that befalls them. Now we have the same malaise. It has been termed responsibilization.

“If it is the individual, not the economic system, that is at fault then it is the individual, not the economic system, that must be reformed,” writes Dan Hind in The Return of the Public … “No matter how hard we try (my italics), the current economic system needs fewer and fewer of us.”

Contemporary conservative and neoliberal ideology are well-refined techniques for inducing depression, and the evidence suggests they do it very well. You are responsible for everything that happens to you but there is nothing you can do to change the situation.

The American economist Richard Wolff says a perfect recipe for unhappiness is trying to solve a social problem through individual action. It’s like trying to unlock a door using the wrong key. It won’t work and it won’t do any good blaming yourself for the door’s failure to creak open. You need to change the circumstances and use the right key. Alternatively you could just kick in the door (actually this metaphor might have legs).

Which is where existentialism comes in. Existentialists said consciousness was never determined. A person could never escape the freedom to choose how they responded to a given situation. But because consciousness is always about possibilities not inevitabilities, they never denied the possibility of responding by changing the situation as well. Conservatism (or neoliberalism) does deny this precisely because it is a philosophy of adapting to what is. It is, as Karl Polanyi realised, rigidly deterministic in its own way.

At the same time there is a brand of left-wing determinism that goes back to Karl Marx and Robert Owen that is equally disabling. Just as the economic system causes depression and obesity and drug use (pick your problem at will) so the system will cause people to rebel and change it. In Capital Marx said that capitalism would produce its own gravediggers. Unfortunately it doesn’t. It seems to produce at best apathy and at worst mass delusions so that even when it is cracking up people think nothing is basically wrong.

It seems glaringly apparent that the trajectory we are on, will lead sooner or later, probably sooner and in some instances now, to economic, social and ecological disaster. But changing that trajectory will be an assertion of genuine choice and freedom. It will be doing something that is unexpected, unwanted and undetermined, a classic Existentialist choice. The Occupy protests are a perfect example, unpredicted and unpredictable. They are unnerving to the powers that be precisely because no-one knows, including the participants, where they will lead.

“Waiting for someone else to do the job for us is a way of rationalizing our inactivity” says the Slovenian Marxist philosopher Slavoj Žižek. It’s not wise to read Žižek unless accompanied by a barrel-load of salt, but in this instance he is right. The direction is history is towards biocide and total passivity. We can’t rely on “objective tendencies” as Žižek calls the crutches of deterministic Marxists, to save us. We must intervene against the grain, like deciding to run down the street naked, in an Existentialist assertion of freedom.

As Louise Mensch says, “Life is what you make it”.

I live in a democracy but I spend half my life in a tyranny. Go figure

Review of The Return of the Public by Dan Hind

Part Three 

In 1970 the US-based Czech economist Jaroslav Vanek said, “One of the main reasons why the western world is so schizophrenic is that we have political democracy and economic autocracy.”

As the ‘great recession’ which began in 2007 unfolds, the schizophrenia engendered by economic autocracy is not only producing strange hallucinations but endangering the life of the subject.

Hind unmistakably echoes US economist Richard Wolff in locating the germ of the crisis in the way corporations are organised. Corporations, the source of financial survival for most people, are run as autocracies. Corporate boards of directors receive the profits from the work of millions of people who rent their time and effort. A small elite decides what to do with this huge amount of money. In political terms, corporations are tyrannies.

And corporations - private tyrannies - were responsible for the downturn that began in 2007

In the US, where the crisis started, corporations were basking in a 30 year profits bonanza as the influence of trade unions, the only check on their power to do as they pleased, declined. The result was stagnating wages for the majority, while productivity raced ahead. The reaction to this change took the form of a huge increase in borrowing. People borrowed from the banks, the very organisations who received the increased profits, in the form of deposits, from corporations. The banks then tried to make more money by lending, as banks do.

Eventually, the circle could not be squared. The need for ever-increasing consumption could no longer be met by substituting historically unprecedented borrowing for stagnating demand. Reality – the reality of stagnating wages – eventually caught up with the prevailing delusions and crisis ensued.

It is a crisis fomented by the dominance of corporations. There is, in the words of Oscar Wilde, only one thing worse than not getting what you want, and that is getting it.

Not just the crisis, but many of the related ills besetting us today, would evaporate says Hind (with Wolff nodding in the background) if corporations were organised differently: If they were run, not by their boards of directors, but by the workforce as a whole.

“It is likely that they [the workers] will prevent managers from behaving in ways that jeopardize their own livelihoods,” says Hind. “Asset stripping, ill-considered mergers and takeovers, and financial engineering will all become less attractive in companies where the overriding preoccupation is with maintaining stable and rewarding conditions of employment.”

Worker-run companies would not seek tax havens abroad, says Hind, because their workers are also taxpayers in their own countries and have no desire to rip themselves off. These companies would not gleefully outsource functions overseas because they are not just interested in securing the cheapest price for labour, but the best working conditions for workforce: for themselves.

At its simplest level, the case for economic democracy is that you don’t normally shoot yourself in the foot. Unless you’re mad or a very bad shot. Or have read a lot of Milton Friedman.

The fundamental cause of the economic crisis was not that the fortunes of investment banking were inextricably linked with those of retail banking, but that the small elite running the economy have interests different from, and in conflict with, the interests of the vast majority of the population. Until that basic conflict at the heart of the economy is dealt with, crisis will always haunt us.

Imagine, says Richard Wolff, that for the last 40 years we had lived in an economic democracy. Worker self-directors would not have stopped real wages rising in the 1970s. It “made sense for capitalist boards of directors to enrich themselves and their shareholders [through stagnating wages and thus soaring profits] but it would not have made sense for worker self-directors,” he says.

A subterranean interest in economic democracy has developed that remains invisible to the political mainstream. Apart from Dan Hind and Richard Wolff, the authors of The Spirit Level, Kate Pickett and Richard Wilkinson, have embraced worker ownership as the only solution to mushrooming economic inequality. Human rights campaigner Peter Tatchell and occasional Labour party adviser Maurice Glasman, have both advocated the German model of co-determination, where all enterprises with 50 or more employees would have to share control between management and the workforce.

These thinkers, to their credit, accept that a real answer to the economic impasse we face has to delve far deeper than the cosmetic solutions offered by politicians. The needs of the 1 per cent can’t continue to override the needs of the 99 per cent. But they do, as this blog has suggested before, present half an argument.

Full employment is now a chimera, both in the sense of what society actually needs, and in the sense of the number of employees that enterprises, worker-controlled or otherwise, require. “No matter how hard we try, the current economic system needs fewer and fewer of us,” Hind says. Another economic system will have different aims, but it won’t magically create permanent paid employment for everyone.

It’s also the case that to turn enterprises into cooperatives, and that is essentially what we are talking about here, will not automatically ensure that the needs of society, of the public in general, are met. These cooperatives could well be just as competitive, seeking to benefit solely their own employees, as conventional capitalist businesses. The limits as well as the virtues (and there are many) of syndicalism, workers running their own enterprises, have been scrutinised before, in reflections going back as far as the drawbacks of worker control during the Spanish Civil War of the late 1930s. In contemporary society, a pertinent criticism of Conservative attempts to make public sector worker form cooperatives, aside from the jaw-dropping irony, is how would the needs of the users of public services, be represented?

Caveats to economic democracy have been expressed by another economist who has been reviewed in this blog, Harry Shutt. Hind echoes Shutt’s proposal on how to ensure that enterprises don’t stray from the public interest.

Shutt, too, wants a “more functional and publicly acceptable pattern of enterprise organisation”. But he does not advocate economic democracy. Instead he says that companies should only benefit from state-granted limited liability if the community is represented on their board or they are run on a non-profit basis.

Limited liability means that investors can lose only the amount they invest in a company, no matter what wrongdoing it is guilty of. This artificial limit, for free market aficionados granted by the state, does not apply in ordinary life.

“A man who causes harm in the course of his work can be sued for the full cost of that harm to the point of personal ruin,” Hind points out. “A man who own shares in a company that causes the same harm risks only his original investment.” Adam Smith, the 18th century Scottish thinker who inspires a lot of today’s free marketeers, was against limited liability.

Hind’s idea is that the privilege of limited liability should be reserved for companies controlled by their workforce. For all other companies, the behavioural check of unlimited liability would apply.

Without limited liability, for example, banks would not have been so keen to sell sub-prime mortgages, package those same mortgages into investments that they did not own, and then rely on the taxpayer to cough up £1.5 trillion to save them when everything went wrong. The externalising impulse of all corporations – we just want the profits and the subsidies, the problems we cause aren’t our responsibility – would be impossible without limited liability.

“There can be no principled objections to reforms that inculcate a proper prudence into the actions of large commercial concerns,” says Hind.

The adoption of unlimited liability, or in other words ethical responsibility, would make profit harder to contrive. It might lead in time to a more rational economic system.

In Hind’s system, the carrot of limited liability would still be on offer – as a way of inducing companies to change in ways which gave overall control to their workforce.

The reason is that without economic democracy, political democracy is denuded of meaning. The current system of corporate ownership means that senior managers have the resources to control the political process and the world of ideas. Recent UK and US history is inexplicable without understanding this dominance, and the concomitant political passivity of most people.

 We are not really schizophrenic, as Jaroslav Vanek described us in the 1970. Now economic autocracy has hollowed out political democracy.

But, says Hind, if enterprises are democratised, they not only cease to be so toxic to the humans that inhabit them, they will also transform the remnants of political democracy. “Instead of providing funds with which owners and senior managers can intimidate their employees and dominate the political process, enterprises instead become schools for deliberation on matters of general concern.”

If the last 30 years have been dominated by the attempt to remake the public sector in the image of the private sector, now the political imagination has to turn around. In its sights will be banks, pharmaceutical companies, private equity funds, hedge funds, the basic architecture of the misnamed “private” sector. Now it’s your turn.

“He who wants bread is his servant that will feed him.” What does freedom really mean?

Review of The Return of the Public by Dan Hind

Part Two 

On the day of his execution during the English Civil War, King Charles I expressed his essential political philosophy. Freedom, he said, consists of the state protecting life and property. It is nothing to do with anything so presumptuous as everybody having a share in government.

Of course Charles was separated from his head a few hours later. But his idea of liberty has proved remarkably durable and explains the pseudo-democracies in which we live and which have delivered us into crisis – economic, ecological and political.

Absolute monarchy in England died with Charles I. After the restoration of the monarchy power was shared, but it was shared with a very small group of people. The aristocracy, property-owners and the rich had the right to participate in government. They attained “public” status. Everyone else just had to do what they were told. The eighteenth century novelist Henry Fielding said that everybody was a nobody in Great Britain, apart from 1,200 people.

The intervening centuries have seen the expansion of the right to vote to everyone. Theoretically we are all equal and have equal power. But public status and the right to real participation is still jealously guarded. In Britain and the US, “the investing classes” Hind notes, “usually described in abstract terms as ‘the market’ or ‘market forces’, constitute “the effectual public in both countries”. A group of just a few thousand people control $100 trillion, two-thirds of the world’s total assets. Almost everybody, as Henry Fielding said almost three centuries ago, is still a nobody politically, despite universal enfranchisement.

We should be a public, but we are still just an audience.

A concept of liberty forged in the mid-twentieth century has given its blessing to this situation and, more importantly, persuaded a lot of people that any deviation will lead to humanitarian disaster. And it is an idea of what freedom is that has a lot in common with what Charles I said before he was escorted to the scaffold.

It was the philosopher Isaiah Berlin who said there were two contrasting ideas of liberty, positive and negative. Positive liberty is the liberty of the French Revolution and the Bolsheviks. A group of people constituting a party or the state decide they know what freedom is and how humanity must get there. Because they know, other people can be ‘forced to be free’. And if they disagree, they can be guiltlessly exterminated, for the good of all. Positive freedom leads inexorably to the gulag.

Here is a description of the two ideas of liberty by the documentary maker Adam Curtis

Negative liberty, the kind of liberty Berlin believed in, was by contrast necessarily limited. Freedom was achieved when people or institutions were “left unmolested” to do what they chose to do. It is this idea of liberty – which traces its lineage back to Thomas Hobbes and the soon to be headless Charles I – that has proved incredibly influential in recent decades. The crimes of Communism have taught an unavoidable lesson and we will have to put up with injustice if we want to be free.

But this concept of negative liberty – leaving private institutions unmolested – has delivered us into seemingly unending economic crisis. And left us powerless to get out.

Berlin’s concept of negative liberty has been described as the classic English interpretation of liberty. But, as Hind shows, that is false in more than one way. The choice Berlin presented was false. We don’t have to decide between Joseph Stalin and Milton Friedman. And there was another English interpretation of liberty, created at the same time as Charles I was insisting we should always remain subjects, that was neither about positive or negative liberty.

During the English Civil War, an English republican, James Harrington wrote a book called The Commonwealth of Oceana. Freedom was only achieved, he argued, when citizens determined government policy. If citizens do not hold power they are not free. Any other form of government was a condition of dependence.

In words of another English republican of the time, Algernon Sidney: “Liberty solely consists in an independency upon the will of another”.

This belief that economic independence was the fountainhead of political liberty meant that Harrington supported “equality of estate”. He believed in widespread land ownership – England was an agrarian country then – that everyone should be their own landlord. As Harrington pithily summarised the situation. “He who wants bread is his servant that will feed him”.

Note that the belief that economic independence is a precondition of freedom and that freedom must mean participation has nothing to do with the positive liberty of Isaiah Berlin’s nightmares. It does not mean the abolition of power – that is impossible – but it does mean that power should be dispersed and not held by a political elite – a Communist party for example – who can coerce others into the utopia or dystopia they desire.

We all still want and need bread, and are thus, as English republicans like Harrington would see, in a state of economic dependence and unfreedom. We not only fear sudden dispossession – losing our jobs – but are captured by the hope of advancement. It is not just that we live in a state of constant precariousness and fear of poverty. We are driven, as Hind puts it, “to alter our conduct and speech, even our beliefs, in order to obtain advantage. Even our desire for independence drives us into an ever more slavishly dependent cast of mind.”

While this material dependence remains people cannot “assert themselves fearlessly as citizens” “A citizen who fears she may lose her livelihood if she speaks out is not meaningfully free,” says Hind, “unless she is a hero or a fool”.

There is a near perfect correlation between career advancement and acceptance of the status quo. Because most of us want career advancement, we don’t stray into areas that will upset our employers. As a result, says Hind, “the individual is left alone in a horribly uneven struggle”.

Hind is inspired by this English Republican notion – dating back to the 17^th century – that freedom means material independence. We shall examine in the third and final part of this review how Hind thinks this need should be expressed now, through economic democracy. But he thinks that material independence has to be buttressed by accurate information. The first step towards changing the world, is understanding it.

This where the idea of public commissioning, discussed in Part One, comes in. “It is difficult to get a man to understand something when his job depends on not understanding it,” said the American novelist Upton Sinclair in the 1920s. So we must start to understand the world outside our own jobs and the private institutions that mediate the information we receive. We must start to reason independently, in a Kantian sense. Enlightenment, said Kant, was only possible when we are able to reason and communicate outside of private institutions.

Currently the population is only audible when they echo governing assumptions. In the US, for example, 53 per cent of Republican voters are in favour of higher taxes on the rich. But Republican senators recently succeeded in voting down a $60 billion Democrat jobs programme because it involved a 0.7 per cent tax increase on people with incomes above $1 million.  On that issue, Republican voters are politically silent. Or just plain irrelevant.

In Britain the story is eerily similar. Conservatives and their friends in the City of London are aching to abolish the 50 per cent tax rate on people earning over £150,000. But Conservative voters – let alone everybody else – want to keep it.

Hind’s idea is that £80 million a year in Britain should be controlled by the population through a system of participatory commissioning. The population, on the way in Hind’s terms towards becoming a public, would decide what subjects to investigate and how they would be publicised. The money would be enough to employ 3,000 journalists and researchers, 250 full-time investigative journalists in each region or devolved nation.

Here is Hind taking about public commissioning

Publicity, how the world is understood, would no longer be in the sole discretion of professional editors and private owners.

It will immediately be objected that the population, given a chance to indulge its wishes in an undirected way, would choose reactionary subjects to investigate. Or, at best, an incoherent mess of reactionary and progressive policies. Capital punishment, for example, has long had wider support among the general public in Britain than among politicians. 125,000 Britons have recently signed an e-petition on the government’s Downing Street website calling for cheaper petrol and diesel. A 2010 e-petition advocating taking climate change seriously and investing in renewable energy, by contrast, attracted just 11 signatures. 

There is a sense in which a participatory Left now should echo Tyler Durden in Fight Club: “let the cards fall where they may”. Reality is bad and getting worse so something has to shift. But it’s also true that a real revelation of the way the world is, can only benefit the anti-capitalist Left. The current order of things depends, as Hind says, on “accepting the comforts of a hallucinatory system of descriptions”.

As an example consider the way disabled and ill people in Britain has are now often branded as “scroungers” and benefit “cheats”. According to polls there has been a substantial increase in the number of disabled people suffering abuse and aggression. Focus groups have uncovered the regular assertion that seven out of ten disabled claimants are faking it.

But these views, vindictive and horrible as they are, also come from somewhere. “Participants justified these claims by reference to articles they had read in newspapers”, says a Glasgow Media Group study of the focus group results. The same study discovered a near tripling of words such as cheats, skivers and scroungers in newspapers. But the fact is that levels of fraud for disability benefits are just 0.5 per cent.

If this subject were investigated through Hind’s system of public commissioning, these fact, as opposed to the distortions perpetuated by the Daily Express, couldn’t help but be exposed. It is a question of shining a light, and if the alternative media can never reach enough people to do so, an alternative has to be found.

Popular resentment of benefit “scroungers” and “cheats” is real enough as many people can testify. But it depends, in the absence of effective scrutiny, on believing that the main problem is the transfer of wealth from the working majority to the poor, rather than on siphoning wealth from most people to insider companies.

Hind quotes Thomas Jefferson – and it should be the motto of a participatory Left today - “there is not a truth existing which I fear, or would wish unknown to the whole world.”

Public commissioning, as Hind concedes, might appear a modest step, dwarfed by the scale of the challenges facing us. But a well-informed citizenry is a precondition for changing the world, a necessary though not sufficient condition as Marxists used to say. As Machiavelli said, without approval, “one change always leaves a toothing stone for the next”.

In Hind’s opinion, as publicity changes so too will general opinion. And when opinion changes, so does the scope of the political, and the idea of what is open to change.

What can this lead? You can’t prejudge democracy but just as the last three decades of neoliberalism have involved remaking the state in the image of business, Hind believes that as neoliberalism implodes, it is not the public but the private sector that needs reforming. And, as we shall see in the third and final part of this review, this involves ending the economic dictatorship in which we exist.

Why the world is not changing

 Review of The Return of the Public by Dan Hind

Part One

In the summer a book was published about something that didn’t happen. The Strange Non-Death of Neo-liberalism concerned an earthquake that never occurred.

Following the 2007-? economic crash, the fundamentals of an entire economic system should have been coldly reappraised. Instead, corporations still funded and lobbied political parties for favoured treatment, banks were showered with taxpayer billions which they then didn’t lend, and supply-side fantasies that lower corporate taxes could revive economic growth were clung to with an almost touching disregard for actual evidence.

But this adherence to the pieties of the past, while everything underneath had changed, was not restricted to boardrooms and ministerial office suites. There was no marked shift among the general population either. In November, The Guardian newspaper reported that, still the most popular explanation for the economic downturn was debt racked up by the last Labour government.

In the metaphor of one economist, blaming the government for the current capitalist economic depression is about as sensible as blaming your neighbour’s dog.

It’s as if a person whose entire family is killed in a car crash starts taking it out on traffic wardens.

Dan Hind’s book, The Return of the Public, is about why this urgent need to transform the world or even to reform it, isn’t happening. Its argument is similar to one put by Noam Chomsky. Before you can change the world, you have to understand it.

Here is Dan Hind speaking:

For the mass of people in Anglo-American society, the world is not understood. Hind does not lapse into the familiar shrugging lament that most people are only interested in celebrities and just can’t be persuaded to take an interest in more important things.

His argument is different and genuinely radical in its implications. There once was a time when a person could make sense of the world through conversations and the ordinary interactions of everyday life. That time is past. Now, in order to understand the world around them, people are dependent on others – other institutions – to report events and provide explanations for why they happen.

Public opinion is not the result of millions of people autonomously establishing how the world works. Public opinion is created. And the organisations that create public opinion, media organisations private and public, the sources that the public get their opinions from, uninform and misinform in equal measure. The result is that the pre-condition for changing the world, grasping what it is really like, is not there.

“Efforts are reform or transformation stand or fall on the basis of the picture that most people carry in their heads about what is possible, necessary and just,” says Hind.

We have been told, he says, a generation of fairy tales. And sleeping beauty has not woken up yet.

One example Hind gives, is the economic crisis, which gets more serious by the week. For most people, in the words of Bank of England governor Mervyn King, it “seemed to come out of a clear blue sky”.

Of course, it didn’t just fall out of the sky. The conditions were building for years, decades even. But in order to know this, you would have to have read, for example, the Marxist-inspired Monthly Review, where dissident economists, like Harry Shutt and Richard Wolff, were arguing that trouble was brewing, that growth rates had slowed, and that debt was filling in for the role that should have been played by rising incomes.

But the mainstream media, the media on which most people are reliant for the picture of the world that they carry in their heads, said nothing was wrong. For example, David Lereah, chief executive of the National Association of Realtors, and author of Why the Real Estate Boom will not Bust (2005) was cited 1,700 times in the American media in the two years before the housing bubble did actually burst, more than three times more often than any other source.

The media were ably assisted in their failure to carry out their ostensible social function of informing the population by policy-makers. In 2005 Timothy Geithner, now US Treasury Secretary, said there was “no sign of a large, macroeconomic shock on the horizon.”

“When the facts change, I change my mind,” John Maynard Keynes famously said. One reason for the spread of Occupy protests is that the media, and policy-makers, have proved incapable of changing their mind.

Harry Shutt and Richard Wolff are still marginal, still outside the bounds of acceptable opinion, despite having been proved right. While their voices are not heard in the media (Wolff is heard somewhat but only due to huge personal effort and the fact that the US is in worse shape than other economies) other economists who saw no problem with the credit markets, remain at the centre of decision-making.

“It is, by way of analogy, as though physics remained dominated by papal patronage and career success depended on denouncing Newton and Einstein,” says Hind.

In order to be heard, you have to serve an identifiable constituency, most commonly through the job you are employed to do. Consider this article on what economists think will happen to inflation from the left-liberal Guardian newspaper. Barring the General-Secretary of the TUC, the economists all speak for businesses. IHS describes itself as global information company that shapes today’s business landscape. The British Chamber of Commerce aims to help “British business to thrive”. ING and Deutsche Bank are both, well, banks. The Centre for Economics and Business Research was set up to “bridge the gap between economics and business”.

It should be rather obvious that if you are employed to speak for IHS, the British Chamber of Commerce, ING, Deutsche Bank, or the Centre for Economics and Business Research, you don’t just say what you think, but you speak for interests of that organisation. You articulate their worldview or you don’t work for them.

But inflation, or unemployment or wages, is a subject that affects everyone. If inflation spikes massively upwards, many millions of people would struggle to buy basic necessities, or afford their rent or mortgage payments. What to do about inflation is something that the population at large, the public, has a huge interest in. But who speaks for the public? As the above discussion in The Guardian (a newspaper which presents a far more accurate view of the world than most) demonstrates, the experts who do speak, all speak on behalf of organisations with very specific, and limiting, interests. Unless, we still have faith in the old adage, “what’s good for General Motors, is good for America”, this is deeply troubling.

This is not to embrace the delusion that the public is “omnicompetent”. No-one person can be an expert on everything. But it is to recognise that something is very wrong when marginal economists who predicted the economic crisis, are still marginal. And those that thought everything was fine, are deciding what to do next.

The problem, says Hind, is that the public has no means to assign expert status to “social scientists whose work has predictive power”.

The reason is that expert status, and thus the right to have influence and speak to millions, is limited to those that work for organisations that already have power. The problem is so intrinsic and so fundamental, that attempt to reform the media and make it more representative, are doomed to failure. We have to, as philosophers were wont to do in the past, turn everything on its head.

Hind turns to the insights of a timid eighteenth century Prussian philosopher, Immanuel Kant. Kant did something deceptively simple, but amazingly enlightening (he was an Enlightenment philosopher). He said our concepts of private and public were the wrong way round.

We reflexively assume that a spokesperson for the British Chamber of Commerce is acting publicly when h/she speaks for them. When they go to the pub after work, and they can say what they please, they are speaking privately.

Kant said this was all mixed up. In truth, when we act in an institutional role, we are acting privately. But when we step outside this role, we are free to reason in an unrestrained way. Thus, we are acting publicly. Kant gives the example of a priest who has to believe in Catholic homilies as a priest. But if he steps outside of this role, he can consider if religious doctrines are in error.

“Experts who remain bound to institutional roles and interested constituencies cannot make public use of their reason,” says Hind. “They are not, in Kant’s sense of the word, enlightened.”

The times in which we live, says Hind, call on us to examine how we might reason publicly in the Kantian sense. “How we might reason as disinterested individuals and in ways that communicate successfully with others.”

His ambition has a lot in common with that of the American libertarian socialist Murray Bookchin, whose concept of libertarian municipalism is about disinterested citizens taking power, and not acting in an interested fashion as lawyers, teachers, marketeers or toilet brush salesmen.

Hind’s idea, his first step – public commissioning – is much less wide-ranging than Bookchin’s. The “field of general description” – the way the world is understood – can no longer be left to professional editors in the private or public media, and their use of experts, who act in Kantian sense privately, as the servants of institutions.

The public would be given the right and the resources to commission investigations, carried out by journalists or scientists, into subjects they choose and decided by a vote. This is not to assume that the general public knows everything, or can know everything, but the desire for impartial scrutiny, of knowing the truth about something, will prove decisive when people are free to act outside the constraints of their working lives.

Some subjects may be frivolous, or right-wing (like political correctness or liberal bias), but most wouldn’t. “Any issue where there might be doubt over the prevailing consensus,” says Hind, “for example the trade in illicit drugs, the struggle with terrorism, the global financial architecture, or the governing views on economic development, peace and war – could, in a system of public commissioning, be opened up to scrutiny.”

Public opinion would no longer be the creature of private interests.

In the second part of this review, we will look in detail at the idea of public commissioning. And the concept of liberty, forged in the English Civil War, that inspires it.