David v Ed: weighing the evidence

Before reaching my decision on the Labour leadership (see previous post), I asked supporters of each Miliband brother on Twitter to recommend to me one video and one article/blog post which would show their preferred candidate at his best.

Here is a selection of the best responses for each candidate. These helped me reach my decision: they are posted in the hope that they may help others do the same.

Ed Miliband

Speech at the LSE on the Living Wage:

“I don’t think we should try to out-right the right on crime.”

Change to Win. (Ed’s Fabian Society essay.)

David Miliband

VIDEO: Sun Cabbie interview.

Keir Hardie lecture.

Labour must build a broad coalition.

The continuity myth: why David Miliband is not a Blairite continuity candidate.

And it has to be said: this video of Ed Miliband in the Commons, while billed by one of his supporters as evidence of his ability to take on the government in debate, only reinforced my concerns about Ed being made to look shrill and hysterical once he was facing David Cameron rather than a lightweight like Chris Huhne.

Thanks again to all those who responded to my request. It was a big help in reaching my decision, even if some of you may be dismayed by what that decision was…

Save NHS Direct?

Friday’s “inadvertent” revelation by health secretary Andrew Lansley that NHS Direct is to be scrapped (and replaced by an “NHS 111″ service with fewer medical staff) caused immediate outrage across most of the Labour Twittersphere.

I found myself feeling more ambivalent about the proposal. My personal experiences of NHS Direct in recent years have not been wholly positive: it’s hard, when being told that a nurse will call back in two hours to discuss your distressed child, to feel that this is a jewel in the NHS’s crown. Personally I’ve found local out-of-hours services (such as EMDOC) more useful. These have improved greatly in recent years, at least in our area, and are surely vulnerable to “stealth cuts” that will be more damaging than the high-profile axing of NHS Direct.

Other people’s experience of NHS Direct may well have been different (in which case please let me know in the comments), though I wonder how many of those rushing to post #saveNHSdirect tweets have had first-hand experience of the service. The Guardian report points out that GPs recently called for the service to be abolished, as it had failed in its stated aim of reducing pressure on A&E wards and GPs’ surgeries. In practice, a large proportion of NHS Direct callers were simply referred onwards to casualty or their GPs, which tallies with my own experience.

There are some broader political points to make here, however, concerning how Labour responds to such developments.

First, if our response to every proposed cut is an explosion of anger, this will open us to claims that we are not serious about reducing the deficit (even though even the leadership candidates all agree that between 50% and 67% of deficit reduction would need to come from cuts, in contrast to the government’s 80%). It will also lead to “outrage fatigue”, as we use up our reserves of energy and credibility before the really serious cuts begin with this autumn’s Comprehensive Spending Review.

Having become exhausted by the debate on Twitter on Friday night, I picked up the book I’m currently reading, Anthony Beevor’s D-Day, and immediately came across the following quote from Frederick the Great:

He who defends everything defends nothing.

In other words: pick your battles. (One reason the leadership election can’t end soon enough: a large part of the leader’s job will be to help us to do so.)

Second, though, and more importantly, this incident says something about the terms in which Labour frames its opposition to government actions. “Save NHS Direct” expresses the issue in essentially institutional terms: “The service currently known as NHS Direct must remain in largely its current form”. That may excite some people, but will leave many others cold. And the Tories will delighted to see Labour turn into the party of the status quo.

Instead, we should be framing the debate in terms of what this means for ordinary people’s lives: “It’s 10 pm and your child is crying in pain. What help can you get from the NHS right now?”

It’s far from obvious that NHS Direct (in its current form) is the only, let alone perfect, answer to that question. It’s equally far from obvious that an “NHS 111″ service which provides details on how to access local out-of-hours services isn’t a reasonably good answer to that question: provided the local services are there to back it up.

Which is the big question. Will NHS 111 actually be an effective service providing useful information about good-quality services? Or will it end up as a series of recorded messages directing you to underfunded out-of-hours services where you sit from 11 pm to 3 am in a darkened hospital waiting to see an exhausted junior doctor?

That’s where Labour’s attention should be focused: on doing what it can to ensure the government provides an effective NHS service outside “normal working hours”, and exposing the Tories’ almost-inevitable failure to do so. A campaign to “Save NHS Direct” is unlikely, in itself, to achieve either of those aims.

Which Miliband? Yes, it’s…

Well, I think I’ve finally reached a decision on the Labour leadership. It’s always been a matter of “which Miliband?”, but I’ve been surprised at how difficult I’ve found it to choose between them. 

On the face of it, it ought to be easy: Ed Miliband is the more obviously left-wing of the two, and I’m impressed by his emphasis on policies such as the Living Wage. David Miliband, by contrast, is widely seen as the “Blairite” candidate, the candidate of the Labour right, and in particular as being tainted by his support for the Iraq invasion in 2003. 

So on paper, Ed is the better choice for me. But we’re not electing a set of policy proposals: we’re electing a leader. And in the end – having seen them both in action at the CSM hustings, and having read numerous articles and speeches (and watched a number of videos) by and about each brother – David strikes me as having greater credibility than Ed as a party leader – and as a prospective prime minister. 

I say this with a degree of reluctance, and not entirely without misgivings. I don’t believe David Miliband is the “Blair Mark II” or “continuity candidate”, but there is something dispiriting about hearing New Labour nostrums about “responsibilities as well as rights” and so on given a fresh airing by him. (Contrast Andy Burnham’s formulation in his “Sun Cabbie” interview: “everyone looks out for each other but everyone does their bit”, which says the same thing in a fresher and more concrete way.) 

I was impressed by his Keir Hardie lecture, however, and by his support for increased use of mutualisation. I also agree with him on the need for Labour to build a broad coalition again, as in 1997 – which means not completely burning our boats with Lib Dem supporters (and not patronising them, Ed). And while I find the term “community organisers” a little toe-curling – a little too obvious in its attempt to evoke Obama – David Miliband’s drive to train up 1,000 community organisers does at least show a concrete commitment to developing Labour’s grassroots campaigning – an area where New Labour was weak, and which is now essential both on the basis of principle (the sort of party we want to be) and pragmatism (the party is too financially embarrassed to engage in high-cost national campaigns). 

More negatively, my feeling is that Ed Miliband is a little too “lightweight” to be a credible leader going toe-to-toe with David Cameron. Having seen him misjudge his audience at the CSM hustings by speaking in too impassioned a manner (and, more to the point, ignoring the actual question that had been put to him), my big fear is that Cameron would find it all-too easy to portray Ed as shrill and a bit gauche: “Calm down, dear!” The most effective weapon against Cameron is not spittle-flecked oratory but a forensic dismantling of his claims: a task to which David strikes me as better suited. 

And in the end, there’s only one question that matters for me: which candidate has the best prospect of delivering a Labour government at the next election? One thing the coalition is demonstrating in its first few months in office is that even an imperfect Labour government is better than a Tory (or Tory-dominated) one. I’d rather have a Labour government led by David, but quite likely implementing many of Ed’s policies (such as his Living Wage proposals), than a Labour party whose leadership’s pronouncements are more congenial to my ears but which remains in opposition. 

Note: This was written before I heard about Jon Cruddas’ formal endorsement of David Miliband yesterday. I agree with pretty much every word of what Cruddas says in his interview with New Statesman – including his criticisms of David Miliband. Like Cruddas, I am not completely sold on everything MiliD stands for or says, but still think he is the best candidate for rebuilding Labour as a more pluralist, communitarian and activist political organisation. 

A part of me still regrets that Cruddas did not stand for the leadership himself, if only to enhance the level of debate. However, my support for the “Cruddas for Labour Chair” campaign starts here…

Mobility and equality

Social mobility has been all the rage this week, with the appointment of Alan Milburn as “social mobility tsar” (a wonderfully self-contradictory term when you think about it) and Nick Clegg’s speech on the subject.

Social mobility is one of those things which everyone is in favour of – so long as the mental picture is that of the bright working-class kid who gets to Oxford or whatever. The moment it’s suggested that those bright working-class kids might dare to edge out the middle classes, it becomes apparent that social mobility is only acceptable so long as it doesn’t interfere with the natural order of things: that is, existing social relations.

Hence the cross-party popularity of social mobility. It enables Conservatives to feel at ease about inequality, because “those who have what it takes can still make it in life, wherever they start from”. It enables Labour to feel at ease about its inability (or unwillingness) to make a serious effort at reducing inequality. And it allows Lib Dems to feel that warm inner glow of niceness which is of such importance to them.

As such, “social mobility” is an inherently conservative concept, and indeed a hopeless one. It takes it for granted that existing social relations and levels of inequality are unchangeable, and that the post-industrial lot of what we used to call “working-class communities” cannot be substantially improved for the better. All we can do is let ladders down into the abyss so that a few able people can scramble up into the middle class.

In addition, social mobility without reduced inequality is a chimera, as can be seen in this chart from Richard Wilkinson and Kate Pickett, the authors of The Spirit Level (src):

(It’s worth noting that this is an update of a chart in The Spirit Level, which originally only had data points at the top and bottom of the regression line, and was criticised by some for this reason. Subsequent research has added in more data points which confirm the relationship.)

As the chart (and the research behind it) demonstrates, social mobility is significantly lower in countries with high inequality. The USA, despite its supposed ideological commitment to social mobility (“the American Dream”), has far lower levels of social mobility than any of the other “rich countries” for which data is available – and is also the most unequal. (It’s probably relevant that the concept of the American Dream originated at a time when the USA was one of the most equal societies on the planet.)

One reason for this relationship (which I think Wilkinson and Pickett suggest, though I’m working from memory here) is that more unequal societies not only make it harder for people to ascend from the bottom, but make those in the “sharp-elbowed middle classes” (and upper class, Dave) far more determined to hang on to what they have rather than see themselves or their children sink irrevocably into the “lower orders”.

Whatever the explanation, it is clear that the only way to ensure true social mobility is to reduce levels of income inequality. I predict that this government will achieve neither.

Capital flow and the professions

In my previous post I looked at how David Harvey (in his book The Enigma of Capital) argues that capital needs to find new areas in which to expand in order to:

• absorb accumulated capital surpluses; and
• maintain compound growth in capital accumulation.

One means by which this can occur is through deregulation. This opens up previously-restricted areas for increased capital expansion in several ways: through increasing competition, through removing restrictions on external capital investment, and so on.

This process can currently be seen at work in the legal profession in the UK. Until now, solicitors have been prohibited from sharing their profits with non-lawyers. This has prevented solicitors from entering into partnership with other professionals (such as accountants) or accepting external capital investment. Non-lawyers have been unable to employ solicitors to provide legal services.

All this is now changing with the (gradual) implementation of the Legal Services Act 2007. This will allow solicitors to enter into partnership with other professionals and to accept external investment, and will allow non-lawyers to employ solicitors to provide legal services, albeit still subject to extensive regulation.

While the effects of this remain to be seen, there is broad consensus over certain likely effects. In particular, two predictions frequently made (though not to unanimous support) are as follows:

• Small high-street law firms are seen as being under severe threat. Many will end up being driven out of business by new commercial providers (“Tesco Law”). Many of those that survive may end up in “Specsavers”-style franchise operations, of which an outfit like Quality Solicitors may be a nascent form.
• Many larger firms are expected to seek external investment, or even to float on AIM or the Stock Exchange.

In each case, this is likely to lead to a major cultural change for lawyers. In particular, many senior lawyers will cease to be “capitalists” – partners owning a significant share of the business and having a say in how it is run – and become employees.

Many who today would be sole practitioners or in small partnerships will end up employed by “Tesco Law” or the Co-op instead, just as high-street butchers have ended up working behind supermarket meat counters. In the large firms, most of those who today would be partners will remain employees, albeit very well-remunerated ones in many cases. Even if they own shares in the plc that has replaced their LLP, that will be more in the nature of an employee benefit than a genuine stake in owning and running the business.

In short, a higher proportion of lawyers will be “labour” and a lower proportion will be “capital” (and those who remain capitalists will have diminished power next to their external investors). It’s no exaggeration to describe this as a proletarianisation of the legal profession – provided we expunge from our minds all associations of the term “proletariat” with manual labour, flat caps and horny-handed sons of toil, and focus instead on the technical meaning of “those who sell their labour to capitalists” (which therefore includes many whom we would regard as “middle class”).

Perhaps the result won’t be quite as extreme as I’ve described it here – though the stockbroking partnerships of “the old City” were no doubt as confident of their continuing existence in 1986 as most law firms are today. But the basic point will remain the same: external capital will have new avenues (however closely-regulated) in which to absorb surpluses and pursue compound growth. And the law will complete its transition from being a profession (with a slightly sniffy approach at times towards the whole grubby business of “trade”) to being a business. (Not in all respects a bad thing: it’s not as if the legal profession of old was a by-word for great customer service. But still a significant change.)

As Marx and Engels put it back in 1848:

The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.

Money in search of money: a “capital eye’s view”

We live in a capitalist society, but what is capital and how does it work? How can we understand its effects in remodelling and transforming society? I’m currently reading David Harvey’s The Enigma of Capital, which aims to answer these questions.

Prof Harvey defines capital as follows:

Capital is not a thing but a process in which money is perpetually sent in search of more money.

The aim of his book is to improve our understanding of this process of capital flow, “the lifeblood that flows through the body politic of those societies we call capitalist”. To put it another way, it’s a “capital’s eye view” of economic processes, showing how many social and political phenomena can be understood from the perspective of capital flow and accumulation.

Two key points which Harvey reiterates throughout his book are:

• Capital creates a problem of capital surplus absorption: in other words, capital is accumulated that needs somewhere to go, something to do with it, somewhere to reinvest it.
• A healthy capitalist economy requires endless capital accumulation at a compound rate of three per cent. Why? A number of reasons, but partly because a capitalist whose enterprise ceases to grow is unlikely to remain a capitalist: they will be overtaken and eventually driven out of business (or bought out) by their competitors. A pension fund whose assets fail to grow will go out of business. Similarly a capitalist country that ceases to grow will be left behind and ultimately exploited by its competitors.

These imperatives of capital surplus absorption and compound growth at a rate of three per cent are what drive both the creativity and destructiveness of capitalism, its relentless expansion into new areas of life and human activity. Capitalism requires continuous compound growth at 3 per cent in order to survive (like the proverbial shark that cannot stop swimming), and builds up surpluses that require reinvestment. Together these factors operate to turn what were previously absolute limits for capital into barriers that must be, and soon enough are, overcome.

This then explains many of the economic and political developments of the last few decades, as capital finds new areas in which to expand: through investment in what were previously state-operated areas of activity (privatisation of state enterprises, PFI projects), through the expansion of financial markets, through deregulation, and perhaps most significantly through the transformation of economies such as China’s.

What I’m finding illuminating about Prof Harvey’s thesis is this. We tend to see capital’s role as one of responding to other needs or desires: a family need a mortgage to buy a home, an entrepreneur needs venture capital for her start-up company, a government wants to build a new hospital without raising the money in advance through taxation, and so on. The role of capital is then perfectly symbolised by the “Dragons” in Dragon’s Den: intimidating, critical but ultimately benevolent, at least to those of their supplicants who show they have “the right stuff”.

Prof Harvey turns this on its head, however: it is capital whose needs are primary. Capital needs somewhere to flow, in order to use up surpluses and maintain compound growth.

This then helps us understand the pressures to open up new areas to private investment and commercial activity. As has been pointed out, while many of the new government’s “reforms” – such as to education and the NHS – may keep services nominally in the public sector, “free at the point of use” and so on, in practice the newly “freed” schools and GPs will find themselves dependent on private-sector providers to provide services previously carried out by local education authorities and primary care trusts.

Other actions are more nakedly a transfer to private capital, for example the abolition of the Audit Commission, whose auditing functions are likely to end up being carried out (at higher cost) by accountancy firms.

This “capital’s eye view” also helps provide a different perspective on many areas of deregulation, particularly in the professions. I’ll come to this in my next post.

A bit of the “big Other”

I’m currently reading Mark Fisher’s short book Capitalist Realism: Is There No Alternative? (see my Tumblr for a brief summary of what Fisher means by “capitalist realism”). In one chapter, “All that is solid melts into PR”, Fisher looks at the purpose of the PR, branding and marketing activity that pervades contemporary capitalism, and discusses Slavoj Žižek’s concept (originally from Lacan) of “the big Other”:

The big Other is the collective fiction, the symbolic structure, presupposed by any social field. The big Other can never be encountered in itself; instead we only confront its stand-ins. (p.44)

These “stand-ins” include not only political leaders but (perhaps even more so) the media. It is this “big Other” towards which PR is directed:

One important dimension of the big Other is that it does not know everything. It is this constitutive ignorance of the big Other that allows public relations to function. Indeed, the big Other could be defined as the consumer of PR and propaganda, the virtual figure which is required to believe even when no individual can. (p.44)

It is easier to grasp what is meant by the “big Other” when we look at it in the context of a society whose illusions we are now able to see through: the Communist states of eastern Europe that proclaimed themselves to be examples of “Really Existing Socialism”:

Who was it … who didn’t know that Really Existing Socialism (RES) was shabby and corrupt? Not any of the people, who were all too aware of its shortcomings; nor any of the government administrators, who couldn’t but know. No, it was the big Other who was the one deemed not to know – who wasn’t allowed to know – the quotidian reality of RES. (pp.44f.)

The distinction between what the big Other knows and “what is widely known and experienced by actual individuals” is more than “‘merely’ emptily formal”. If the distinction is lost – if the big Other is suddenly made aware of what it previously did not know – the social system itself can disintegrate.

Fisher argues that this was the real significance of Krushchev’s 1956 speech denouncing Stalinism. He wasn’t telling his audience anything they didn’t already know, as individuals, about the brutality and corruption of Stalin’s regime, but:

…Krushchev’s announcement made it impossible to believe any more that the big Other was ignorant of them. (p.45)

So that’s Really Existing Socialism; but what about Really Existing Capitalism? Fisher argues that the prevalence of PR, branding and advertising shows that capitalism can only operate if Capital’s true nature – “rapacious, indifferent, inhuman” – is masked by “various forms of sheathing”:

Really Existing Capitalism is marked by the same division which characterised Really Existing Socialism, between, on the one hand, an official culture in which capitalist enterprises are presented as socially responsible and caring, and, on the other, a widespread awareness that companies are actually corrupt, ruthless, etc. (p.46)

Or as we might put it: Capital devours widows’ houses and for a show makes lengthy Corporate Social Responsibility statements.

A small-scale capitalist equivalent to Krushchev’s collapsing of Stalinism’s “big Other” can be seen in the fate of Gerald Ratner:

Ratner precisely tried to circumvent the Symbolic and “tell it how it is”, describing the inexpensive jewellery his shops sold as “crap” in an after-dinner speech. But the consequence of Ratner making this judgment official were immediate, and serious – £500m was wiped off the value of the company and he lost his job. Customers might previously have known that the jewellery Ratners sold was rather poor quality, but the big Other didn’t know; as soon as it did, Ratners collapsed. (pp.46f.)

All this makes me wonder what it is today that the “big Other” in our society does, and doesn’t, know. Further thoughts on this are invited.

One practical political point, though: as Labour seeks to defend its legacy from Tory/Lib Dem attacks, we do need to clear with ourselves about what were genuine achievements that were “widely known and experienced by actual individuals”, and what were things that perhaps only the “big Other” knew about.

From bigotry immemorial

An intriguing detail from this report on the latest court challenge to the BNP: the BNP’s definition of “indigenous British”:

…indigenous being defined by those that settled in these islands between 11500BC and 6 July 1189.

The start of that range will come as a relief to any surviving descendants of the former inhabitants of Britain’s oldest home, which has just been dug up in North Yorkshire and which dates from a comfortably “indigenous” 8500 BC. Don’t worry, guys: you’re “proper British” in Nick’s eyes.

But it’s the precision of the end of the era of “indigenous settlement” that catches the eye. In fairness, this date is not totally random: 6 July 1189 was the date on which Richard I acceded to the throne of England, and in 1275 it was fixed in statute as the beginning of the “time of memory” – any rights existing before 6 July 1189 being deemed to have existed “from time immemorial”.

So no doubt the BNP chose this date as giving a patina of legal respectability to their definition of indigenous: “indigenous Britons” being those whose ancestors have been in Britain “from time immemorial”. I’m sure it’s entirely coincidental that, by fixing the date before the expulsion of the Jews from England in 1290, the BNP ensures that Jewish people are excluded from its definition of “indigenous”.

I avoid, you evade, he defrauds: the semantics of cheating

Here we go again. Yet another “war on benefit fraud”, with David Cameron pumping his biceps and promising an “uncompromising” clampdown on “welfare cheats”.

Fair enough: if benefit fraud is, as reported, £1.5bn a year then that’s money that would be better spent elsewhere. But as many have pointed out, the amount stolen through benefit fraud is far lower than the amount stolen through tax evasion – a reported £15bn a year, equivalent to 3% of total tax liabilities (compared with 0.8% for benefit fraud).

Yes, the authorities take action against tax evasion as well as benefit fraud, but we don’t have the same steady drumbeat of propaganda implying that benefit fraud is to blame for most of society’s ills. Where are the bus-stop ads with freefone numbers for shopping tax cheats? Where the outraged middle-market tabloid headlines? Are HMRC using credit reference agencies to help catch tax evaders?

In short, the emphasis on benefit fraud is as much concerned with blaming the poor for their own problems and delegitimising welfare benefits, and claimants, generally (“They’re all at it, you know”).

However, in pointing this out we need to be careful that we do not make basic errors that let our opponents off the hook (“You don’t know what you’re talking about, LOL!”). In particular we need to be careful in distinguishing between tax evasion and tax avoidance, rather than falling into the trap exemplified by this tweet doing the rounds today:

Tax evasion – failing to pay tax which you are legally required to pay – is fraud and a criminal offence. Tax avoidance is a different matter: it is “simply” minimising the amount of tax which you are legally required to pay in the first place. Nothing illegal about it, at least until the occasionally-mooted “general anti-avoidance measure” sees the light of day.

And in broad terms there is “good” tax avoidance and “bad” tax avoidance. “Good” tax avoidance is what most of us do in one shape or form. If you put your savings in an ISA rather than a conventional deposit account, you’re “avoiding” paying tax on the interest. If you pay your pension contributions through a “salary sacrifice” scheme rather than as a deduction from pay, that’s tax (or, to be precise, national insurance) avoidance. If you invest in a company through an EIS, that’s tax avoidance. These things are all above-board and recognised by HMRC as legitimate means of minimising one’s tax exposure.

“Bad” tax avoidance is what many large corporations and rich individuals do, using complex and artificial arrangements to exploit loopholes in tax legislation. Perfectly legal but (in the view of many people) ethically murky. Not that it’s easy to draw a clear line between “genuine transaction carried out in a tax-efficient way” and “artificial transaction carried out purely to exploit the tax rules” – which is why the “general anti-avoidance measure” never progresses beyond party manifestos.

So in summary: yes, we need to point out repeatedly that for every pound lost in benefit fraud there is at least £15 lost in tax evasion, and probably even more lost in “bad” tax avoidance. To put it bluntly, we need to make it clear that depriving the exchequer of revenue is mainly something that rich people do rather than poor people. But if we’re not clear in the distinction between “illegal” and “legal but probably shouldn’t be”, then it’ll be all-too easy for the Tories to avoid, and indeed evade, this issue.