Tuesday, 27 September 2022

The Importance of Being in Denial

Late last month an interview was published that you probably never saw. You never saw it not because it was tedious or inconsequential but because of the opposite. It took apart the consensus narrative on which British politics has rested for the past four or more years. The result has been silence. The arguments it contained are not disputed but rather the continued existence of the perilously shaky edifice that is British political common sense depends on maintaining that it never existed.

The interview is with Geoffrey Bindman, renowned human rights lawyer and former deputy leader of Camden council. He is a member of the Labour party, who, according to his own admission, straddles left/right divides. He is, incidentally, also Jewish.

Bindman addresses the notion that antisemitism was rife the Labour party under Jeremy Corbyn and that Keir Starmer has shouldered the burden of ridding the party of this stain by expelling the guilty parties. “You can look at all the statistics and studies that have been made,” says Bindman. “If you look at the facts you can’t justify what Keir has said or done unless he’s using it as a pretext. A political strategy. That’s all I can say.”

He is particularly dismissive of the notion that Corbyn himself is antisemitic. “I like Jeremy tremendously,” he says. “…. But he has his faults. And part of his problem is he's too honest and too decent to be an ideal leader. He's not tactical. He just says what he thinks, which gets him into trouble. And he never defends himself.”

Corbyn’s continued suspension from the Parliamentary Labour party is unprecedented in British political history. Disgraced former political leaders have never been treated in anything like this fashion. Neville ‘In the name of God, go’ Chamberlain – replaced by Churchill as PM after the botched Norway campaign of 1940 – remained leader of the Conservative party and a member of the War Cabinet. George Lansbury, forced to resign as Labour party leader in 1935 because of his pacifist stance, continued to sit as a Labour MP until his death five years later. His former deputy, Clement Attlee, paid tribute to him as a “champion of the weak”.

Not so Corbyn, who has lived in the political equivalent of outer Siberia since claiming that – quite correctly – that “[A]nyone claiming there is no antisemitism in the Labour Party is wrong … but the scale of the problem was also dramatically overstated for political reasons by our opponents inside and outside the party, as well as by much of the media”. The Socialist Campaign Group of Labour MPs, who you might imagine would have resolutely defended him as one of their own, could muster little more than a mildly riled press release. And even that wasn’t unanimous. Labour MPs in general have treated him like a pariah, refusing to be seen together in photos  and remaining unmoved when someone spat in his face during the height of Covid (which could have been fatal).

The lawyer Martin Forde, author of the eponymous Report into the leaked report of the work of Labour’s Legal and Governance Unit, lauded the compilers of the leaked report for not succumbing to “denialism” about the seriousness of antisemitism in the party. But it strikes me that, for the sake of historical truth and any future democracy may have in this country, a measure of denialism is exactly what is needed. As Bindman says in reference to the EHRC finding that the Labour party broke equality law, “the worst part of it was the party took it all lying down …. They accepted it when they should have challenged it.”

This denialism should take two main forms:

1. Jeremy Corbyn is himself not antisemitic, nor did he protect antisemites from exposure

The ‘mature’ Labour antisemitism ‘crisis’ narrative, in full flow from 2018, did not content itself with claiming that the party itself was riddled to the core with antisemites. It also asserted that Corbyn himself was personally so full of animosity towards Jews that he represented an “existential threat” , that, should he be elected Prime Minister, he’d be the first antisemite in government in the West since the Second World War, and that he even planned to “reopen Auschwitz”.

The companion piece of this effluvium was that Corbyn, in league with his team of like-minded crony advisers, was badgering away behind the scenes endeavouring to shield the antisemites his leadership had attracted into the Labour party from public exposure and sanction.

This was the story that blazed its way across the media in the spring of 2019, with The Observer claiming that the Labour leadership “opposed recommendations to suspend several party activists accused of antisemitism”.  The Sun followed suit with allegations of “meddling” by Corbyn and co. to prevent their “friends” getting kicked out of the party. The iconoclastic Private Eye joined in with a claim of 100,000 emails revealing “the protection of anti-Semites … on a scale the public does not begin to understand”.

The trouble is this cache of damning emails doesn’t appear to exist. Or if it does exist it indicates an entirely different motivation to the one presented. The evidence points in the opposite direction. When Corbyn was finally able to choose the General-Secretary he wanted – Jennie Formby – the prosecution of internal antisemitism cases tripled. The EHRC report into antisemitism in the Labour party did indeed find that the leadership had interfered in cases (which it found was unlawful), but mainly to speed them up. The aforementioned Forde report from July of this year called out the “wholly misleading media reports” suggesting that Corbyn’s staff “had aggressively imposed themselves on the process against HQ’s wishes.” In fact, says Forde, they did so at the request of the Governance and Legal Unit (the part of the Labour party bureaucracy responsible for complaints about member behaviour) and “in good faith”.

In truth Corbyn responded with alacrity to claims of antisemitism within the Labour party; something that cannot be said of his predecessors. He commissioned the Royall Report into allegations of antisemitism at Oxford University Labour Club and the Chakrabarti Inquiry into antisemitism in the wider party both within a year of becoming leader.  The latter, certainly, has been airbrushed out of existence by parts of the Labour party and the media.

Corbyn is still facing the demand that he apologises unequivocally, unambiguously and without reservation for his comments in response to the EHRC inquiry nearly two years ago. Though whether that will gain him readmission to the Parliamentary Labour party is a moot point. However, on this evidence, other people should be apologising to him, not the other way around.

2. Labour under Corbyn was not overrun with antisemitism, nor was it institutionally antisemitic.

Corbyn, as can be seen above, did not respond to the EHRC report by claiming – to use Starmer’s résumé, obediently parroted by the BBC’s Laura Kuenssberg – that antisemitism in Labour was “all exaggerated”. He explicitly stated that there was antisemitism in the Labour party, “sometimes voiced by people who think of themselves as on the left”, but that its scale had been “dramatically overstated”. That seems, notwithstanding the ructions it produced, quite a realistic assessment of the true situation.

As cited at the time by Corbyn, statistics indicated that only 0.3% of Labour members had been accused of antisemitism with allegations serious enough to warrant an investigation. That figure does not authenticate wild claims that the party was a “cesspool” of antisemitism, that it was an inherently racist party, that it was “the party of Holocaust denial”, or that it was afflicted by “epic” levels of antisemitism. Nor does it justify false assertions from the top of the party that Labour under Corbyn had been found guilty of institutional antisemitism by the EHRC.

It might be argued that the bare figures don’t encapsulate the “seriousness” of antisemitism in the Labour party. Martin Forde takes this line, praising the compilers of the leaked report for not surrendering to the notion that allegations of antisemitism were nothing more than a smear.

And there is evidence of the existence of antisemitism in the orbit of the Labour party that wasn’t simply confected or ‘weaponised’ to attack Corbyn. For example, the book Bad News for Labour: Antisemitism, the Party & Public Belief ­­– which cannot be accused of being hostile to the Corbyn project as it is source for the opinion poll finding that the public believed 34% (not the real figure of 0.3%) of Labour members had been accused of antisemitism ­– lists several examples, gleaned from interviews with Labour activists, of seemingly genuine antisemitism.

These include the creation of antisemitic sub-group with a Constituency Labour Party that posted four or five articles a day all about “blood libel, Rothschild, conspiracy etc.”, culminating in “outright holocaust denial”. Another activist who had administered the left-wing Red Labour Twitter account highlighted several instances of online antisemitism “from people who identify as Labour left”, enough “to have reported at least a dozen people a year”.

Likewise the case of a council candidate sharing an article on holocaust denial (before the Corbyn era it should be pointed out) does not appear fabricated.

That said, of the 15 Labour activists interviewed in Bad News for Labour, 11 reported seeing no antisemitism at all in party circles, with one remarking, “I am completely at a loss to understand what this antisemitism row is all about.”

That is why many activists reacted with incredulity when asked by the soft left to sign a letter in March 2019 saying they had personally witnessed antisemitism in the Labour party. It’s why there is no reason to doubt Geoffrey Bindman’s sincerity when he says, “I have had close involvement with the Labour Party for many years, and I can say that I've never really experienced antisemitism among fellow Labour Party members or in Labour meetings.” Curiously (Don’t) Change UK defector and former leadership hopeful Chukka Umunna said the same thing before he got with the programme.

Attempts to substantiate the notion that antisemitism was rampant in Corbyn’s Labour party always seem to fall down on the specifics. For example, the EHRC report lists “evidence of antisemitic conduct by an ‘ordinary’ members of the Labour party”. This list includes “comparing Israelis to Hitler or the Nazis” and deriding a witch-hunt in the Labour party or blaming the “Israeli lobby” for the volume of complaints. The former depends on the details: for example in 2011 the sociologist and historian of the holocaust Zygmunt Bauman compared the West Bank separation wall to the Warsaw Ghetto and he clearly wasn’t antisemitic. The latter just isn’t antisemitic. Nor is there any attempt to identify how common this conduct was in the context of rapidly growing Labour party membership under Corbyn which peaked at just under a sixth of the population of Wales.

There are grounds to be suspicious of the large volume of complaints received about antisemitism. According to the leaked data used in the Aljazeera documentary The Labour Files, 23% of complaints about antisemitism in the Corbyn era came from one person. Corbyn staffer Phil Bevin was seconded onto logging antisemitism complaints (to get rid of the backlog) and reports that the majority he saw came from two individuals. “There was a lot of duplication of the complaints, in terms of they were about the same people for the same things,” he claims. “And very often – probably more often than not – it wasn’t specified whether they were actually Labour members”.

And the whole narrative about unbridled antisemitism in the Labour party under Corbyn is undermined by the fact that the crackdown on it avidly pursued by his successor has disproportionately target Jews. Jewish members of the Labour party are five times more likely to be investigated for antisemitism than non-Jewish members. Overall at least 56 Jewish Labour members have been investigated, suspended or expelled from antisemitism (1.09.00). This is seriously odd. It’s akin to an investigation into anti-Black racism singling out black people or one into Islamophobia going after Muslims. It must also be case that the 56 form part of segment of 0.3% Labour members charged with allegedly ‘genuine’ antisemitism.

The full quote from Corbyn adviser and ex-Guardian journalist Seamus Milne that was selectively truncated in the BBC Panorama documentary ‘Is Labour Antisemitic?’ ironically gives a good summary of the absurd situation that has actually transpired. “If we are more than very occasionally using disciplinary action against Jewish members for antisemitism,” he wrote, “something’s going wrong and we’re muddling up political disputes with racism.”

In truth, the Labour antisemitism ‘crisis’ was and is a textbook example of a moral panic. A group of people perceived as threatening to society’s interests – in this case the Corbynite Left – are accused of something because the way in which they are threatening cannot be faced head on. What they are accused of may contain a grain of truth but it is vastly blown out of proportion. However, it is in the nature of moral panics that what really drives them is never openly admitted. Especially in Britain the demand for new moral panics is an unending feature of politics.

Thursday, 1 September 2022

Speculation and its Discontents

Ask an educated person for a definition of capitalism and you will probably get a recitation of how the desire to make money ensures unmet demand is met. This may lead to a gross state of inequality requiring governmental remedy – and even the creation of undreamt of wants – but the essential carrot of great wealth on the horizon means that someone, somewhere will provide for basic needs – albeit at a price not everyone can afford.

Here lies the system’s essential dynamism and why, whether you like it or not, it ‘delivers the goods’ as they say.

Given the vast array of products available to people with the means to buy them, that’s an understandable viewpoint.

However, as can be seen by the current staggering inflation affecting energy and food prices, it’s not an accurate one. Capital-ism – the investment of money in order to make more money – can in fact contradict the laws of supply and demand, creating perceived shortages where none actually exist.

It’s widely accepted that the huge rises in prices for oil, gas and food are behind the massive rises in inflation in western countries. Inflation, we are told, will reach 18% in the UK by early next year. Putin’s invasion of Ukraine is seen as the catalyst for these increases driven by creating war-induced shortages of basic goods. And shortages, a basic principle of economics tell us, equal spiralling prices.

Or not, as the case may be. Despite wild jumps in wholesale prices, oil, for example, did not stop flowing. Citi, the same bank that predicts 18% inflation in Britain at the start of 2023, believes the price of oil will fall to $45 a barrel by the year’s end, not indicative of a crisis of supply. Ukraine’s imperilled status as the ‘breadbasket of the world’ prompted huge increases in the price of cereals and wheat, surging past historic highs in February and March. But now, as the Economist magazine notes, food prices are tumbling, despite the fact that, as far as anyone is aware, the war in Ukraine has not come to an end.  As it turns out, agricultural corporations saw “substantial gains” and “were not negatively affected by Russia’s invasion of Ukraine”.

So much for the ‘unbuckable’ laws of supply and demand.

The one commodity where there has been a genuine disruption of supply is natural gas, with gas flowing from Russia to Germany through the Nord Stream 1 pipeline reduced by 60%. However, the current ‘global’ price is 9 to 11 times “higher than usual” which, I would suggest, is not commensurate with cut backs in one country’s supply. Before the Ukraine war, the price of gas was already rising and, according to Shell, the influx of hedge funds and other speculators into the market was a major factor. “Prices are becoming less determined by news about supply and demand because of the influence of new financial players moving money in and out of the market,” the company was reported as saying.

These booming ‘world’ prices have caused – and are causing – real suffering to millions, if not billions, of people. Essentially the perception of scarcity, fuelled by trillions of dollars of speculative money, created artificial scarcity by inflating the price of basic commodities like food and fuel beyond the reach of ordinary people. Around 71 million more people have already been pushed into extreme poverty and the UN secretary-general has warned of an “unprecedented global hunger crisis”.

Winter in Britain is looking bleak beyond imagining with millions unable to pay soaring energy bills and thousands dying from the cold.

And this suffering is directly attributable, not just to Putin’s ‘weaponisation’ of gas, but also to the ‘wall of money’ at the top of society which has an unquenchable thirst to accumulate more wealth. The speculators – hedge funds, fund management firms, investment banks, sovereign wealth funds and pension funds – all exist for the unceasing purpose of making money out of money. According to American socialist magazine Jacobin:

As with all speculative bubbles, once cash poured in and pushed up prices, the resulting higher prices ‘confirmed’ the initial story, eliciting fresh capital sending prices even higher … Commodity exchange trade funds received $4.5 billion in a single week as retail investors ploughed their savings into the latest get-rich-quick craze. Institutional investors likewise poured money into the commodity markets, not because of any belief about fundamental supply and demand but to diversify their portfolios with and ‘inflation hedge’.

This is probably the first time in recent memory the ‘rich world’ has been seriously affected by speculation-fuelled surges in the prices of basic goods. But it’s not the first time it has happened to the majority world in this century. In both 2008 and 2010, there were “global food crises”, in which hundreds of millions of people in the Global South were propelled into extreme poverty by rising bread prices, precipitating riots and revolution in countries around the world. Yet the problem wasn’t actual scarcity. Unlike during the French Revolution when a poor harvest did precede the cresting of popular unrest, in 2008 and 2010 prices doubled despite more food being produced in that year than at any other time in history (55.45).

Perverse and unnecessary suffering like this is the consequence of a little appreciated aspect of the huge inequality bestriding the world. Inequality on this scale is not only unjust in that the billions of poor people in the developing and developed world don’t have the resources to live decent lives. Inequality on this scale generates baleful outcomes by virtue of the simple fact that immensely rich people have too much. The world’s largest fund manager, Black Rock, for example, has over $10 trillion under management. And that $10 trillion will be invested in profit-promising opportunities that, over time, will grow and grow in a never-ending process.

Fatal social problems like financial crises, the continued exploitation of fossil fuels, the undermining of democracy, the gutting of the public sector, and the recasting of housing as simply a means to amass wealth (to name a few) have their roots in this perpetual search for new sources of profit for this towering ‘wall of money’. Such activities aren’t merely “socially useless”, in the words of Adair Turner, the former chairman of the UK Financial Services Authority. They’re socially destructive.

Long ago, the economic historian, Karl Polanyi, singled out the “scarcity of Capital” as the factor which crippled “potentially rich countries from developing their natural wealth”. Now, after periodic economic crises smoothed away with bail-outs and capital-creating ‘Quantitative Easing’ schemes, we have the opposite problem. In the description of one economist, we have a glut of capital.

If, on the rare occasions that the chaos caused by commodity price speculation is squarely faced, the answer is invariably presented in terms of the imposition of World War Two-style price controls and the return of regulations that hem in the speculators. Just over 20 years ago the passing of the Commodity Futures Modernization Act in the US (signed into law by ‘New Democrat’ Bill Clinton) ended Roosevelt-era regulation in which speculation was confined to 20% of a given market.

But we are facing a very different world to the one that existed when these regulations were put into effect. According to one assessment, the volume of capital in the world tripled between 1990 and 2010, reaching $600 trillion. This figure was nearly ten times the value of global goods and services, ensuring that the vast majority of it inevitably went into some form of speculation, i.e. betting on an increase in the value of an asset, such as the global price of wheat.  And this was in 2012. It was predicted, then, that global capital would hit $900 trillion by 2020.

The pressure exerted by this mass of money was a pivotal reason for the dismantling of regulation towards the end of the last century – the Commodity Futures Modernization Act was famous for exempting derivatives such as Credit Default Swaps from regulation, which many believe created a direct path to the Global Financial Crisis of 2008. Theoretically, it should be possible to re-regulate; if the hurdle of political systems being dominated by the uber-rich can be overcome. However, where would these trillions of now redundant capital go to? It wouldn’t be invested in the expansion of physical production because the demand for ‘fixed capital investment’, as it’s known, is nowhere near strong enough. It also won’t just cease to exist because there is no (legal) purpose for it.

Re-regulation and the overthrow of the market fundamentalist dogma of the last forty years may be abundantly necessary but they won’t save us from what the capitalist system has become.






Tuesday, 2 August 2022

The Generosity of the Working Classes

Whenever workers are accused of being greedy for wanting their wages to keep up with inflation – as RMT members, BT workers and train drivers are now, in common with workers generally in the late ’70s – it always puts me in mind of two Austrian economists.

One is the über free-marketeer, and also Margaret Thatcher’s favourite practitioner of the ‘dismal science’, Friedrich Hayek. He was adamant that society would benefit, and become immeasurably wealthier, if everyone was motivated solely by profit. “In fact, by pursuing profit we are as altruistic as we can possibly be,” he said, “because we extend our concern beyond to people beyond our range of personal conception.”

Another Austrian, Karl Polanyi (technically Hungarian but he was born in Vienna and lived there for many years), noted that this admonition to behave as selfishly as possible in economic matters pointedly didn’t apply to workers. In fact if wage earners didn’t act in precisely the opposite way – with admirable restraint and concern for the common good – the whole profit maximising system would rapidly fall apart.

If, Polanyi noted in his most famous book The Great Transformation, what workers are selling – their labour – is just the same as any other commodity produced for sale, like sugar or bottles of vodka, they should seek the highest possible price for it. If, that is, they are motivated solely by maximising profit, which Hayek and his predecessor Ludwig Von Mises thought everyone should be. Polanyi elaborated:

Consistently followed up, this means the chief obligation of labor is to be almost continually on strike … The source of the incongruity and practice is, of course, that labor is not really a commodity and that if labor was withheld in order to ascertain its exact price (just as an increase in supply of all other commodities in similar circumstances) society would very soon dissolve for lack of sustenance.

Naturally workers would not be allowed to continually renegotiate the sale of their labour in this manner. This is where the neoliberal solicitude for freedom crumples like leaves on a bonfire. Margaret Thatcher famously used the power of the state to destroy the influence of organised labour the moment it ceased to be a compliant partner of employers and tried to protect the living standards of its members. And in response to the actions of the RMT and others, Liz Truss, the favourite to be next British Prime Minister, wants a legal requirement to maintain “minimum service levels” even when public sector workers have balloted for a strike. If enacted Truss’s promise would return Britain to the salad days of the liberal utopia (coincidentally the original title of The Great Transformation) before disputes between employers and employees were made civil matters and when workers could be – and were – jailed for breaking their employment contract.

Liberal Fascism

And this, shall we say, fickle relationship with freedom is by no means a new impulse on the part of conservative-liberals. In the 1920s, one of the original economic liberals, Ludwig Von Mises, thought the merit of Italian Fascism would “live on eternally in history” for having “saved European civilisation” by smashing, quite literally, the workers’ movement in Italy.

It is illuminating that wage earners – flesh and blood people with bills to pay and other people to look after – are the only element of the economy expected to exercise restraint in economic matters out of concern for the common welfare. Nobody in power really thinks for one moment profit should not be maximised by corporations. And despite the propaganda that in these enlightened times, corporations ‘do well by doing good’, it certainly is being unashamedly maximised. Both Shell and Centrica (British Gas) recently posted record profits notwithstanding predictions that energy bills will soon triple. According to research by the union Unite, profit margins for the UK’s FTSE 350 companies (big business in other words) were 73% higher in 2021 than they were before the pandemic.  Despite Sir Keir Starmer telling us that “When business profits, we all do”, the bedtime story that high profits produce economic growth and rising wages like parched earth blossoms after a cloudburst just won’t wash anymore. Are we supposed to ignore the experience of last three decades?

Not selfish enough

The conclusion that economic selfishness is in fact a virtue when practised by those legal entities called corporations is defended despite the fact that excessive profits are a more likely inflationary culprit than high wages (which in fact have been stagnating or falling for years). In the words of the father of market economics, Adam Smith, “Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”

One could argue that workers in Britain and elsewhere – far from being too selfish, aren’t being selfish enough. The RMT is demanding a pay rise of 7% which when inflation is at 9.1% is obviously a real terms pay cut. And here lies the crucial difference between wage earners and other elements of the economy, or ‘factors’ in production. When employers seek sky high profits or when landlords raise the rent by way above the rate of inflation, they do so because they can and because the practice is socially validated. When workers submit to whatever wage they can negotiate (usually whatever they are offered, even to get a trade union recognised is an immense struggle) they do so because they have to. Because, lacking independent means, they have to procure the means to survive for themselves and their families.

Historically, this unequal ‘deal’ been accepted, partly out of brute power, and partly because it promised benefits – to consumers, to workers receiving rising wages – that seemed to accrue from submission to the demands of capital. But what if, as in happening now in the West, the bounty stops flowing. How long are we going to continue to oppress ourselves?