Tuesday, 9 April 2013

Not waving goodbye but drowning...

Thatcher, everyone agrees, transformed the British economy. This is true, or has a kernel of truth in it somewhere, but it is also complete rubbish.

The argument that Britain had many rust bucket industries which needed to be shut down and be replaced with a gleaming new service sector (merchant banks, supermarkets that stay open all night etc.) is a remarkably cruel one, especially for groups like the miners and steelworks who lost livelihoods and communities. But if Britain did get rid of the rust buckets in the 1980s the real cause was not privatisation, the sale of council houses or the Falklands War (the things Thatcher really did) but Ted Heath's steering Britain into what was then called the Common Market (now the EU).

By the 1980s Britain's mines were mostly extremely well run, safe and highly efficient. They were not rust buckets. But they had to compete against mines in countries with much more favourable geological conditions (in Britain the easy to extract coal had been taken by a mining industry that dated back to the Roman era more than 1,500 years ago). They also had to compete against miners who were paid a tiny fraction of National Union of Mineworkers (NUM) rates, in an industry that was still highly labour intensive.

But Britain saw itself as an island of coal surrounded by a sea of fish. The fish (or our ability to harvest them) disappeared thanks to Ted Heath and the EU's fishery policy. The coal went (or was sealed untouched in the ground) thanks to Thatcher's wilful vandalism.

That there were rust buckets is undeniable: just think of the car makers. Intense international competition wiped many of them out thanks to the lowering of trade barriers caused primarily by the EU membership Heath had negotiated.

Thatcher's legacy was the destruction of housing. In the 1970s as many public sector houses were built as private sector ones. Thatcher did not change this by allowing councils to sell homes (Jim Callaghan's Labour government had allowed that already). What she did was to prevent councils from building ordinary houses. The idea was that the private sector would take up the slack. Private house building would double.

But it didn't.

Three decades later the private sector is building no more homes than it did when the clampdown on council house building began. In fact it's building rather less.

One reason for this is that Thatcher also encouraged the privatisation of Britain's building societies (at the time the prime institutions financing house purchasing). She wanted organisations like Northern Rock (the first British bank to have a run in 150 years) to privatise. And Northern Rock was not the only former building society to face bankruptcy in the great depression that started in the first decade of the 21st century.

When the banks stopped lending (because they had made gargantuan losses gambling in financial instruments they were too stupid to understand) new mortgages slowed to a trickle. But there never was a private sector house building bonanza, perhaps because the sort of people who got council houses could not afford any type of mortgage. The house building industry (that supported Thatcher to the hilt) lost out because it used to build those council houses, though the real losers were the homeless and those living in over-crowded slum housing.

Thatcher's second legacy was the destruction of the social democratic consensus, or to put it another way the death of Keynesianism. When she came in to office much of British industry (particularly utilities like electricity, gas, telecoms and the post office) was owned by the state. The state, not the people. We didn't feel like we owned it because it was high handed and bureaucratic, often serving its own interests rather than ours.

But it was bloody useful to have it there. During times of relative economic decline, state utilities took no notice and carried on investing. Add to that state benefits (like unemployment pay), that increased during economic down turns and the economy had an automatic stabiliser. In times of down turn, the state took up the slack and prevented mass unemployment.

Mass unemployment returned to Britain in the 1980s, then we had the long boom in the nineties and early naughties. In 2013 the British economy, like much of the rest of the so called developed world, has had five years of depression and no-one knows how to get out of it.

That there has been a massive redistribution of income from the poorest to the wealthiest is undeniable. But the world is more complicated than a simple reading of the employment or census statistics might lead you to believe. When I was a child it was a real event when we got a spin drier and my dad had a good job and earned a fair income. Today I have a fridge, electric kettle, coffee maker, washing machine, numerous computers, a mobile phone and more technological junk than you can shake a stick at. Yet my employment is very insecure and I earn little.

So did Thatcher really change the world or did she just ride the crest of a Kondratiev wave for a while? Whatever the truth, we will never see her like again, if we are lucky.

Monday, 8 April 2013

Thinking is painful, not thinking hurts even more

The majority is not always wrong, but given time it will become so.

If you read the press or listen to the radio you will think our problem is a huge shortage of labour. We are constantly being told that there are too many welfare cheats, people adapt to a lifestyle of living on benefits and the pension age needs to come down because we are all living too long.

People believe these things because they are told them again and again. But they are not true. The real problem is mass joblessness and particularly youth unemployment. Think for a few seconds and you will realise the best way to help young people to get work is to encourage older people, or at least those who can retire, to do so.

But we don't just need to reduce the pension age. That's just a temporary sticking plaster designed to make things better at a time of massive economic crisis. In the longer term we need to encourage brave volunteers to live without work.

This is clearly obvious because in the current stage of the quickening technological revolution, jobs are being destroyed faster than they are being created. Machines are being developed that are better, simpler and cheaper at performing complex tasks. Everything from diagnosing illnesses to complex micro-surgery, is becoming easier and more effective thanks to assistance from sophisticated machines.

This is not the current wave of Fordism (or production line automation). These machines work on their own and can be programed (or program themselves) to perform highly individual tasks.

At the same time the new industrial giants (Google, Facebook, Apple, Amazon etc) employ relatively few people. The evolving businesses do not create jobs in the way that they used to.

So we either need to work fewer hours (to share out the jobs) or some people have to accept they will have a lifetime without work.

The UK government's response (today) to this is to attempt to cut £2 billion payments to those receiving long term disability allowances, in an attempt to force thousands of people to compete for jobs that do not exist.

But perhaps you remember our old friend TINA, from the days of Margaret Thatcher? TINA stood for There Is No Alternative. In this case the TINA argument would be: The tax base can only afford to pay for a limited amount of welfare.

Again, this is complete nonsense. Over the last 30 years there has been a massive redistribution of income from the poorest to the richest. A fair tax system would reverse this trend, creating enough money for the sick and disabled to eke out a dismal lifestyle on state benefits.

Another popular misconception is the idea that if you tax too hard the wealthiest flee abroad to avoid your taxes. This is because you don't tax hard, you tax intelligently. Click and Tobin taxes could raise billions irrespective of the dwelling place of the super rich, so long as the economic activity that gives them that wealth takes place in the UK.

Tuesday, 19 March 2013

There will be blood

A few days ago (March 8, 2013) we were reading about RBS cash machines that had stopped working, apparently because of a hardware glitch. This story in the Daily Mail was fairly typical http://www.dailymail.co.uk/news/article-2289358/Computer-fault-halts-RBS-withdrawals--While-boss-picks-700k-bonus.html. It was the hardware (or according to other stories a software update)? Oh really?

Then we learned that the Cypriot banks are defaulting, possibly because they got too much Greek sovereign debt (they took a punt on Greek government bonds). Coincidence?

Well, the RBS story would once have been thought of as extraordinary. Banks claimed an infallibility for their software/hardware that went far beyond Papal infallibility. The reason for that was that they wanted people to believe it was utterly impossible for their cash machines to make a mistake. These days, of course, we don't believe the Pope's infallible (even if we are entirely sure who holds that esteemed lifetime post) and if we have any feelings about the banks, we probably think they bat for the other side.

So if it wasn't a software/hardware problem, what else could it have been? The current economic crisis dates from August 7, 2007, when BNP Paribas terminated withdrawals from three hedge funds citing "a complete evaporation of liquidity". I became conscious that something was going terribly wrong when a friend (Mike Pinkney, now deceased) told me he'd joined lengthy queues outside the privatised building society Northern Rock in September 2007. That was the first run on a British bank in 150 years. These events were caused by an absence of liquidity. What liquidity means is trust, specifically trust between the banks.

If one bank doesn't believe another bank can balance its books, it stops lending it money (or paying out money on its behalf at cashpoints). Banks have to lend each other money because banking is an inherently crazy business. The fundamental economic principle is lend short and borrow long. Banks do just the opposite. They take your money and then let you remove it the next day, but they lend it to borrowers who may finish off repaying their loan a decade or more later. A run on any bank can finish it off, unless it gets government support.

Cash points refusing to pay out can be a sign that the banks are getting nervous. But how could this happen: The UK government owns a controlling stake of 84% of the Royal Bank of Scotland Group (RBS)'s ordinary shares, but the bank remains nominally independent of government. Surely the British government can't go bust?

RBS only had a problem for two hours and that's probably about the length of time you'd expect it to take the chief executive of a nationalised company to track down the responsible Minister and for him (or her, there are some Tory women Ministers) to instruct the Governor of the Bank of England to sort out the problem.

So is the system really seizing up again? The point of austerity, otherwise known as monetarism and in the Great Depression of the 1930s called The Gold System, is beggar your neighbour economics. We cut our costs, become cheaper, and take our neighbours' markets away by selling goods at prices they can't match. This is called export led growth.

The alternative, Keynesianism, is concerted growth in spending designed to restore confidence in the system as a whole. It's hard for one country to do this on its own (though America may be the exception to this rule), because if you grow your economy your competitors sell their products in your market creating a black hole in your trade figures.

In October 2011 in this blog I suggested that the Germans should be asked to leave the euro. See http://jbrind.blogspot.co.uk/2011/10/remarkable.html. By that time it had become absolutely obvious that austerity wasn't going to work and would just create bigger debts. European governments were kicking the can down the road (putting off making a decision) not because they had any real expectation that something would turn up, but simply because they had run out of ideas.

It's now probably too late for the Germans to leave the euro and the only answer is for the Germans to become more like the southern Europeans. European governments need to print money in a concerted attempt to refloat the european economy. Will the Germans do this? Probably not.

In which case, we're in for a bumpy road. There will be blood, or at least bloody revolutions.

Sunday, 22 July 2012

Electric Liz

In the early months of the Second World War, even after the so called phoney war, there wasn't much hatred of the Germans, my father says. They were clearly the enemy, or at least the opponents, but people had yet to develop a passionate loathing for the Nazis. That came later.

At the time my dad was about 12 or 13 years old and living in West Norwood, south London. He says that even when the Luftwaffe bombed the area people bore it with resignation. That was just what happened in wars.

All that changed when they killed Electric Liz.

My dad happened to be there at the time when the German plane appeared over Norwood High Street. He jumped over a wall and hid. Liz did not.

When the plane had gone her dead body was lying in the street.

Electric Liz was something like a street person. My dad doesn't know how she got her name but it might have been through begging for small change for the meter.

In those days most people had to put a coin in the slot to get both gas and electricity.

However she got the name, Electric Liz was a street person, not exactly homeless but as close to it as may be. She looked like a tramp, a destitute person.

Clearly she was also a character. Everyone in West Norwood knew her.

If she had survived the war, the National Health Service, would probably have done its best to help her. Today, of course, we are far more enlightened than in those post war years, and there are again thousands of street people all over the country (though I believe they have been cleared away for the duration of the Olympics where I live in north east London).

The death of Electric Liz really brought home the horrors of war to Norwood High Street and from then on my dad says, people really hated the Nazis.

They must have known before that war is always about killing and being killed, but the English are a soft lot and it takes the death of an innocent to raise their passions.

Wednesday, 11 July 2012

Baby booomers

The boomers. Millions of them aren't there? All the soldiers went home and started families after the war.

Actually it's all a load of nonsense and the truth is that in the key decade (1951-1961) the population hardly grew at all!

The increase in population of England and Wales in that decade was about 2 million. Even if you take 1939 to 1961 it was only 4 million. Between the 1951 and 1961 censuses there were 7,121,000 live births, rather less than in any decade between 1871 and 1921. In fact the population increase was on the low side in the 1951/1961 decade.

And right now there's a wave of immigration, mostly young East Europeans. Net migration to the UK is running at about a quarter of a million a year (according to the latest statistics).

In the so called boomer years the net increase in population was about 200,000 a year.

So according to the statistics there might be an extra 200,000 pensioners each year, but there's also 250,000 mostly young, economically active people to take their place.

According to the latest statistics there are 29.13 million economically active people http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/february-2012/statistical-bulletin.html in employment. I can't find the statistics but thanks to the increase in female employment, improved health and the fact that many jobs are now less physically demanding, I believe this is a far higher percentage of the population than in the 1950s.

Right now there's mass unemployment and many people who want to get a job are unable to do so. There may be feckless and idle people out there but not all the unemployed are like that. Many are absolutely desperate to get work.

The idea of making it harder for younger people to get jobs by forcing older people to work when they would prefer to retire, is plain evil. It also makes no economic sense.

The wealthy and those with extreme right wing views want to reduce public services because they don't use these services and they want to cut taxes (since even the wealthiest person has to pay some tax, VAT for example).

In the 1960s and 1970s (when they knew all about the baby boomers story) we were promised a reducing retirement age, as automation took over and we moved into a leisure society.

But in those days there were fewer billionaires and their ability to manipulate the public agenda was not so profound.

One thing should be retired (permanently) and that's this story about the baby boomers.

Monday, 2 July 2012

John Massey

I was John the video maker, then there was John the author and John the murderer. Of the three of us, I thought John the murderer was by far the nicest.

I wasn't quite sure what John the murderer was doing there. Once he cleaned my car for me and did a very good job. John the murderer likes clean cars.

Many people say driving with me is exciting (code for terrifying). John the murderer was kind enough to say he thought I could be quite a good get away driver.

He didn't tell me his second name and I didn't ask. It was none of my business and I'm rotten at remembering names anyway. I'd probably have forgotten even if he had told me.

It was only some time later when I discovered John was really John Massey, an escaped convict, Britain's longest serving prisoner. By that time he'd been captured and was back in prison.

John Massey is an amazingly talented craftsman and fixer. He can fix anything even his escape from almost any prison.

He created a widgit for my tripod that made it work in an emergency but as well as the practical he has an artistic side: he showed me amazing, intricate art works he had produced.

At the time he was on the run having walked out of Ford open prison. It was not the first time he'd absconded from jail.

Escape is a serious crime (from the perspective of the jailers who don't like prisoners who slip the leash). So when he was recaptured instead of returning to an open prison he was sent to Pentonville.

I've never been to prison but I have tried to video the outside walls of Pentonville and that scared me. But John worked out a way of making a rope and then used it to scale the frighteningly high walls.

John Massey's crime was unforgivable. He used a sawn off shotgun to kill Hackney bouncer Charlie Higgins. If there is any justice in this world this will still haunt his conscience when he goes to his grave.

But the legal system in this country has laid down that a life sentence for murder usually means 14 years in prison. If John Massey had been a model prisoner he'd have been out by 1990 (22 years ago).

How is it possible that a man convicted in 1976 and sentenced to 20 years imprisonment is still in prison in 2012, more than 35 years later?

John Massey's downfall is a strange combination of heroic virtues. He is intensely loyal to his friends and his family. When he's escaped it's always been a last ditch attempt to see a close member of his family who was dying or seriously ill. Most people wouldn't be able to climb the walls of Pentonville (something like 20 feet high). But 64-year-old John Massey is incredibly fit for someone of any age. Then, few fit men would have the ability to construct a rope capable of taking their weight from bits of rubbish lying about a prison.

He was the wrong person, in the wrong place at the wrong time,

When he escaped from Pentonville, police warned the public that he was dangerous. This was so absurd that it did not damage John's reputation but just made the police look like a lot of shifty, lying bastards. Let's be kind to them and say they simply didn't know, after all John was in the prison authorities care.

In reality John Massey is a very kind, gentle, talented, warm and friendly old man. He shouldn't be in jail. If the prison authorities had any sense they'd offer him a job helping to make British prisons less leaky, making escape more difficult.

I'm not the only one who thinks John Massey should not be in prison. He has some powerful allies as Eric Allison reported in the Guardian. But my guess is that John's going to be in prison for several more years until everyone forgets the fuss. He will be in prison not because he needs to be but because the authorities have egg on their face and want to pretend that justice is on their side.

They are wrong.

Monday, 25 June 2012

The madness of archivia

Archives are a good thing aren't they? The British Library, county archives, Kew and the many other, all fantastic organisations whose only purpose is to serve the historians and the curious. What could be better than that? True altruism?

Well up to a point, Lord Popper, to quote Evelyn Waugh's Scoop.

There used to be a sort of deal with public records (wills, birth, marriage and death certificates, census records, etc.) that the people would provide the information, park it in a central registry and then have access to it in perpetuity.

No-one minds a small administrative charge being levied in order to allow the archive to continue to exist. Well, that's an exaggeration (perhaps). In these days of the internet, in which it is said information wants to be free, people do mind but they put up with it.

What is really galling is that these organisations have started to claim copyright over the documents, as if they own them rather than the original creators (or their heirs and successors).

But surely, you object, copyright only lasts for 70 years after the death of the creator of the object (whatever it is)? How can wills, for example, be the copyright of anyone if they are more than 70 years old? Most people only start to get interested in wills when they were issued a century or more ago, so what's the problem?

Well, the archives make it as difficult as possible for you to copy the things they hold. You can not wander into a gallery and photograph an old master. It may be hundreds of years old but it is effectively the copyright of the gallery because photographic copies of it are tightly controlled by the gallery.

Many archives refuse to allow you to copy the documents they hold. Copies will usually be available but you have to pay an extortionate fee to get the copy. This fee will be something like £5. It didn't seem like a lot in the days when photography was expensive (you needed negatives and paper), but in these digital days, it's possible to create thousands, perhaps millions of photos for a fiver.

But a fiver (you protest) that's not much! Well, first of all you don't know how poor I am. Second, it isn't just one fiver if you are searching for something it can be quite a lot of fivers.

I run a kind of mini archive myself. I am one of the GOONS, a member of the Guild of One Name Studies. I have registered the name Brind and I am supposed to get an index of all the basic information relating to Brind births, marriages and deaths. Up until recently I could buy a single copy of a document and then provide it to any Brind family history researcher.

Up until recently I could pay the fivers, get the documents and copy them, even posting them online. Of course the archive would know I had breached its copyright (the copy of the copy, if you see what I mean), but since I was giving it away for free there would be little point in the archive pursuing me.

I can't do this any more. Archives have discovered a new technology that prevents, or makes difficult, the copying of documents. Since the originals are usually pretty awful, this additional level of obstruction makes the whole process more or less pointless. The archives have won. They control the documents. They own them.

The purpose of copyright is supposed to be to give the author of the piece, the due rewards of his or her work. Edward Munch created four versions of The Scream. I could imagine each being hung in a gallery and that gallery having the right to control access to the physical object. That makes sense. But when it comes to making copies of the The Scream, I think it belongs not to any one of those galleries but to Edward Munch (or his heirs and successors), if it belongs to anyone. To buy an object is not to buy the copyright. If you buy a copy of one of the Harry Potter books, believe me, you do not own the copyright.

People often donate things to archives because they believe they are providing a public good or they are putting something important on record. Think of the photographer who hands over an archive to the local library so that the pictures will be available for the local community. Such altruism is not uncommon.

If the archive then exerts copyright over those photographs isn't that a kind of artistic theft: wrong on two levels? It is wrong because the archive doesn't own the copyright (the originator still owns that), but it is also wrong because on many levels, it subverts the whole purpose of copyright.

Firstly, there's the 70 year issue. No one owns the copyright of something produced in antiquity. It is a public good. Anyone can use it. Secondly, what is happening is that copyright is being changed from something belonging to artists or creators to an organisational or corporate right.

Big business rules or big business sets the rules.