Hugh Hornby Birley

Below is my blog written for the People’s History Museum (PHM) in Manchester – celebrating their acquisition of the portrait of Hugh Hornby Birley. The PHM has a great exhibition – Disrupt? Peterloo and Protest that runs until February, 2020.

The captain of the Yeomanry at Peterloo

Portrait of Hugh Hornby Birley, captain of the Manchester and Salford Yeomanry, oil paint on canvas, date unknown © People's History Museum

To complement the display of a portrait of Hugh Hornby Birley, who as captain of the Manchester and Salford Yeomanry played a central role in the events that unfolded at the Peterloo Massacre, we asked author Jeff Kaye to share his research on Birley from his forthcoming novel All the People and treat us to an excerpt about the painting, now in People’s History Museum’s (PHM) collection.

 

The captain of the Yeomanry at Peterloo

‘It may be hard for us to imagine the carnage at St Peter’s Field at the Peterloo Massacre on 16 August 1819, when the Manchester and Salford Yeomanry led by Captain Hugh Hornby Birley rode into the crowd, sabres cutting, killing men, women and a child, injuring almost 700.

Thereafter, the survivors and their supporters who wished to commemorate the tragedy of Peterloo were not allowed near the site of their grief.  The field was blockaded by the 15th King’s Hussars, the regiment that supported the yeomanry into battle in 1819, stationed nearby at Hulme Barracks.

Therefore, on each anniversary of Peterloo, crowds of working people would gather outside a house in Mosley Street and also at Chorlton Mill, now apartments at the junction of Cambridge Street and Hulme Street.  There, they would jeer at the symbols of the man that led the charge at Peterloo, the faceless buildings owned by Hugh Hornby Birley.

The authorities considered him guiltless and it was not until April 1822 that a private prosecution was brought by Thomas Redford, a Middleton hatter, against the promoted Major Birley and others, for ‘assault’ at St Peter’s Field.  The prosecution failed and Birley must have believed that, at 44 years of age, the shadow of Peterloo had lifted.

Chorlton Mill, unknown artist

Birley was already a successful businessman in Manchester, based on the success of Chorlton Mill, the area’s main employer.  He was also a civic leader, the founder of the Manchester Chamber of Commerce and spokesman for the Manchester Association of Master Manufacturers.  He used this platform to vigorously oppose Ten-Hour reform: his reputation as the harshest of employers was well earned.  He also despised interference by the state into his private affairs, except for the wholesale reduction of the tax on corn because he considered taxation was required to fund his cherished military.

As the Treasurer of the Lying-in Hospital (later transformed into St Mary’s Hospital on Oxford Road, Manchester) for 30 years, he may also have considered himself a philanthropist, if a giver of time rather than his money.  But this was insufficient to persuade working people to suspend their hatred.  Indeed, many of Birley’s own class thought him contemptible, including Archibald Prentice, Editor of The Manchester Times newspaper and Founder of the Anti-Corn Law League with Richard Cobden.  Cobden donated land at St Peter’s Field for the building of the Free Trade Hall; considered a cenotaph to Peterloo and a snub to Birley.Lying in Hospital 1820 © Salford Pubs, Part One by Neil Richardson (Bath Inn)

Birley attempted to build a wall of respectability to change memories.  His business activities, work for the town and his philanthropy were likely designed, at least partly, to alter how he was remembered rather than compensate for any guilt, which he never admitted.  Such efforts were doomed to fail.  In 1842, cotton mill workers, striking over starvation wages and the Chartist cause of universal suffrage, came to Chorlton Mill.  Throughout the Plug Plot Riots of 1842, other mills across the North West closed without a fight, but Birley’s mill was defended vigorously against the strikers with water hoses fired and masonry thrown from the roof, causing the death of a young girl.  The mill was nevertheless closed.

As the strikes ebbed, the Northern Star newspaper, in its Peterloo commemoration edition of 20 August 1842, printed the engraving published by journalist and agitator Richard Carlile of the Peterloo Massacre on its front page with the description, ‘The accompanying engraving represents the horrible scene, just when the ‘heroes’ were hard at work.  Let the ‘heroes’ look upon it and refresh their memories respecting their courageous ‘deeds in arms’.’Northern Star newspaper, 20 August 1842

Feargus O’Connor, the newspaper’s Editor and Chartist leader, listed all the members of the yeomanry present on 16 August 1819, headed by: ‘Hugh Hornby Birley, Commander.’

In my forthcoming novel, All the People, a story of the fight for survival and universal suffrage by the people in Manchester, the heart of the industrial revolution, Birley reads the article in shock.  He had decided to return permanently to Broom House, his country home in Weaste in Salford together with his painting that had hung in his office.  He knows that his life’s efforts to erase the memory of one terrible act have been futile and rips the newspaper to pieces with a knife, then:

‘He walked to his painting…Yes, he had looked mightily content with himself, he thought, all those years ago, self-confident and secure, almost overbearing in his towering self-belief.  Yet now, as he reached into his final years, he was conscious of an insecurity that he had never allowed to surface.

He was standing with some difficulty, exhausted, shaking with the strain of life pressing on his shoulders.  He inched closer to inspect the painting.  It showed a man in his prime, at the height of his physical wellbeing, he thought, yet with eyes that could not look into his own.

He wondered how he would be painted now?  His physical form would show him fatter, for certain; redder of face, definitely; balding, of course.  But, underneath the external signs of ageing, how would the artist seek to show the inner self?  Would he portray the man of destiny, the yeoman, forever undertaking what was right and proper for God, his King and his country?  Or would he betray the man, maltreated throughout his life, misunderstood, drenched in a guilt that he would never acknowledge, eyes unwilling to make contact with even the artist himself?

Birley shuddered at an image that he no longer recognised.  His shaking grew in intensity … He still had the knife in his hand.  “Perhaps,” he said, “I should lance the boil of history.’

St Peter’s Church, Manchester a guide by Clare Hartwell, engraving by J Fothergill, c1820It is ironic that deep beneath St Peter’s Square in the heart of Manchester lies the Birley family crypt.  Burrow beneath the streets where St Peter’s Church once stood and you will find the tombs where Hugh Hornby Birley was buried on 8 August 1845, just eight days before the 26th anniversary of Peterloo.  By that time, it is doubtful that anyone congregated outside his mill or home, but the ghosts of St Peter’s Field could jeer at his corpse for an eternity.’

Jeff Kaye is the author of the forthcoming novel, All the People.  It is a story of the fight for survival by Manchester people between the Reform Act of 1832 and the Plug Plot Riots of 1842, due for publication in the autumn of 2019.  During the last 15 years, Jeff’s work within international Non-Government Organisation’s such as Global Witness and Transparency International added greatly to his interest in Britain’s development.  All the Peopleis the outcome.  He previously wrote Last Line of Defense about corruption in America, following his earlier career in hi-tech industries.  Jeff is a graduate of the University of Manchester.

A portrait of Hugh Hornby Birley is on display in PHM’s new exhibition Disrupt? Peterloo and Protest until Sunday 23 February 2020.  The exhibition is part of PHM’s year long programme exploring the past, present and future of protest, marking 200 years since the Peterloo Massacre; a major event in Manchester’s history, and a defining moment for Britain’s democracy.  The exhibition is supported by The National Lottery Heritage Fund.

People’s History Museum is open seven days a week from 10.00am to 5.00pm, and is free to enter with a suggested donation of £5.  Radical Lates are the second Thursday each month, 10.00am to 8.00pm.

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Doughnut Economics – Quam Oeconomica

The Search for Oeconomica Phase III

The essence of Kate Raworth’s excellent book, Doughnut Economics, is that economics has to move from an understanding of the world in 18thor 19thC terms (based on a mechanical set of analogies) to a 21stC understanding based on how we understand evolution, our knowledge of systems theory and complexity.

Doughnut-Economics

In simple terms, the book suggests, that in order to develop from a perpetual journey to increase GDP and move to a world economy that “Thrives in balance”, we focus on critical issues such as inequality, changes in banking, CO2, new metrics and many other changes via a vast number of small experiments that will, under conditions of complexity, generate changes in our direction and potentially move us from this Phase of our economic experience (Phase II) via a phase transition to another. However, the range of changes that may be needed (this vast number of small experiments) do not appear to be extremely hopeful and each one is tiny compared to the enormous background material in which it exists. Any one may be successful or not and many, if successful together, may generate enough traction to propel society to the phase transition that it needs. However, it, or they, may not!

 

The dynamic set of changes that forged the industrial revolution, the move from a rentier society based around the ownership of land, to a capitalist-driven society based on the ownership of ideas, of speeding up production, of creating demand for goods and services, took on the form of a phase transition (if the continued use of analogies can be permitted). This dramatic change occurred over many years, but traction was firmly in place by the 1830’s in England. Years after this, by the time Karl Marx was writing das Kapital, capitalism had transformed the countries of western Europe and would do the same for the USA and elsewhere. While land remains a high value commodity, the demand for goods and services and the ability to pay for them has transformed most of the world and continues to do so.

 

However, this phase transition (Phase II) remains, even today, in a variety of stages of development. In the USA and western Europe, it is well entrenched. In India and China, it is feverish in its intensity. In sub-Saharan Africa and Afghanistan, it is well hidden. This means that prescriptions for moving beyond this Phase are unclear as different sections of the globe are at such different stages. No mention was made in the book of the Maslow hierarchy (that provides at least some analysis of the individual’s search for sustenance, from meeting purely physical needs to those of mental well-being) and it would be useful to seek some sort of understanding based on regional access to the Phase Transition of the industrial revolution before experimentations can be determined as useful.

 

This is because, while so much attention is given in the media, universities and in books, to the second and third industrial revolutions (supposed to be via computing and then via robotics, AI and bio-engineering), the real focus of Doughnut Economics is beyond this towards a third Phase – a post-capital-only phase. In driving towards that new Phase (if humans are to make it successfully), Doughnut Economics properly focuses on the Georgescu-Roegen notion of entropy being sufficiently understood so that the world  focuses on energy use and utilisation as the crucial underlaying of society, rather than the traditional notion of productivity (the making of goods and services in progressively more ‘economical’ ways). This is right but it is debatable whether this is the prime driver for change, at least from a human viewpoint. Humans exhibit potentially destructive tendencies when caught in a particular way of thinking. Kate Raworth described this in within the book (Easter Island as one example) and it seems that humans need to actually see and feel danger before they react. A good analogy is how the UK reacted to Germany before 1939. Rearmament did not take place until the enemy was rampaging through Europe. Why? Possibly, because the human tendency is not to give up on ways of life (having reached a reasonable plateau) unless forced by external change. Complexity theory would suggest that a plateau of living is only change when externalities require it – with ‘require’ being highly operative.

 

Phase II was driven by, as the book states, the notion of economic gain for those in charge of capital and ideas, focused on the desire of perceived need. This economic gain argument has been transformed over the last 200 years to permeate all of society not just through the notion of GDP at the macroeconomic scale but through accounting at the micro-level. Thus, financialization of the world at both micro- and macro-scales underpin everything that we do. Everything is priced and our utility (our desire for something) is only respected when it has a number against it. Recently, a charity worked out the value we place on parks. This notion of £974 per person per year is then used somehow to justify spending on parklands. The whole notion of natural capital flows from a need to show value of the aspects of life that make life worth living so that even companies and accountants can evaluate them in discounted cash flow techniques. This is where Phase II shows it has conquered the world or it may be showing that Phase II is nearing its end.

 

Changing this is an enormous challenge but Doughnut Economics, while preparing the way, seems to suggest that the world can be redirected by an understanding by economists about how the world is different to their theories and through the use of diagrams.

 

A more detailed analysis of the changes that induced the phase transition in England in the industrial revolution to Phase II would indicate the scale of the challenge now. The doughnut diagram is highly useful and the concepts that underpin Doughnut Economics are highly positive in that they speak in the language of the new century, even if hampered by the limits to our knowledge that such analogies provide.

 

However, if a phase transition in our model of living is required, and the book strongly argues in that way, then we need to assess how this can be done successfully in a world that it markedly at variance region by region and where, as a result, different nations and regions will adopt different attitudes. For example, those countries lower on the Maslow hierarchy (if it or something similar can be utilised on a national scale) will retain their pursuance of basic needs via growth in GDP for far longer than those countries that have reached higher levels of economic maturity, where post-quantitative norms may be considered. If this is the case, and it is highly likely to be, then how do the latter set of nations decide how to remain sufficiently competitive in productive means, assuming that they will not simply give up their desire to at least maintain a level of economic security in a world that will reward economic gains for many years because it is measurable?

 

Doughnut Economics posits, amongst many other things, repeated changes in GDP, up, down, level in no particular order and through a variety of changes in taxation from income and employment to energy usage or externalities. However, different countries will adopt different measures and taxes and there will be a vast range of unintended consequences in such a complex environment that will continue to drag down the impact of the desired moves to a new phase.

 

Of course, we do not even know what a new phase will look like. Doughnut Economics suggests some thoughts on this and they relate to the quality of life beyond the quantity of life that mature economies are building, where, having gained the basics (food, shelter, clothing), we have moved towards the second tier of luxuries (goods and services) and towards Maslow’s higher tiers of self-actualisation (although we would need to see this is national terms rather than individualistic).

 

What can economists and accountants (macro and micro) do for this future? Perhaps the role for such narrow providers of data is disappearing in the same way that the role of horses changed when the motor car appeared. To take us to the next Phase needs a whole new school of thought that understands the different levels of Phase II that has been achieved on a global scale and will address the new mix of qualitative and quantitative requirements of Phase III (against the background of natural resource despoliation and global warming). If the concept of ‘natural capital’ is the last cry of Phase II as an attempt to take a grip of the natural world by the accountants of Phase II, then Phase III has to develop a new breed of expert that can show how humans can retain the dynamism that ‘gain’ provided for many (although by no means all or even the majority) and moves us away from numeric (or financialized) gain towards a qualitative framework, from the historical meaning of economics – the art of managing a household (which, arguably, humans now understand) – to the art of managing quality of life.

 

This is likely to be back to the area of ‘political economics’, the relationship between the production of goods and services and the society within which they are produced and then forward towards an inclusion of the qualitative aspects of life (as individuals and communities) – ‘quam oeconomica’.

Chartists rising in Newport – 4 Nov 1839

Frost_Monmouth_court

A brass band was playing an overture that he could not quite place. He was not sure that anyone could and some of the cornet players may have wondered if the trombone was reading from the same music, while the drummer beat to a rhythm of his own choosing. Feargus O’Connor was standing very close to the stage in Carpenter’s Hall, above the orchestra pit in which the band was hidden from sight if not aurally. He would be introduced to the very large crowd that had each paid for a ticket to celebrate the birthday of the late Henry Hunt, which was two days’ later on Wednesday 6th November. Unusually for Feargus, the event, organised by the Friends of Radicalism, was in the shape of a tea party and many of those listening with stiff smiles were female, also noteworthy.

 

Abel Heywood, who had provided the bail for Feargus, had been elected to Chair the event and called on all present to celebrate the glorious life of Henry Hunt to which there were many cheers. He then introduced the man he called ‘the poor man’s friend’, Feargus O’Connor, who jumped on to the stage and began his oration to so much applause that the wooden building appeared to shake. If the ghost of William Cobbett could not be with him that night, although his next trip was to Oldham, where he was sure to have a visitation, he thought, then he would surely raise the ghost of Henry Hunt. As soon as he called himself a ‘Huntite’, then the spirit of the great man roused him to a great performance that enraptured the crowd. “Whatever I do will come to nothing compared to Henry Hunt, for he was the first, alone when he started his agitation for universal suffrage and the rights of the poor. I am simply in his footsteps.” The applause was far more than the tinkling of spoons on cups that one might have expected in a tea party. It was substantial and gave Feargus time to view his audience, especially the multitude of young ladies that were of constant distraction.

 

Before he had stepped on to the stage, a note had been passed his way that he had scarcely had time to notice but he glanced at while the audience was in such a rapturous mood, cheering and shouting his name. The note mentioned something about Newport in Wales and the word Frost appeared several times. He took it to be a joke about the Welsh weather but could not be bothered to read it fully until his speech was concluded and he stepped almost into the arms of Julian Harney. “Feargus, we have to leave quickly.”

 

“I know, we have a coach to Oldham.”

 

“No, Feargus, this is far more serious. The coach will wait.” He took Feargus into a small room and sat him down. Abel Heywood had followed them in and was asked to be silent while Harney read from some notes he had made. “Feargus, Abel, I am sorry to rob you of your time but this is a serious matter that I have for you. You will remember our own John Frost, Convention Representative from Newport, Feargus, the Chairman of the Convention meeting you attended at the Crown and Anchor?” Feargus replied: “I recall that he became very fired up that day. He was under much pressure, if I recall.” Harney nodded and went on: “His fire did not die, Feargus, for he was also one of many Chartists in Wales that had been mightily angered by the recent imprisonment of their friend, Henry Vincent, for crimes that were unproven and clearly fabricated by the local police. This was, for the working people of the Town, the last straw and the local people in Newport yesterday decided to take matters into their own hands.” Feargus’s face showed clearly his dismay as the young Londoner continued.

 

“I will read for you information that has come my way.” Feargus and Abel sat back in their seats, waiting for the story to be told: “From the Coach and Horses in Blackwood, the Welshmen decided to hold a mass assembly, after which they would march in three sections on Newport: Frost leading from Blackwood, a second from Brynmawr and Ebbw Vale led by Zephaniah Williams and a third from Pontypool led by William Jones. From Cefn, where they were to meet up, they would march further into Newport, stopping traffic and mail coaches and then taking the town. This had been their own plan, a Welsh plan, not coordinated with anyone outside of that country but a plan to take the Town by force!”

 

“You knew nothing of this?” Feargus asked Julian, who felt Feargus’s stare eating like acid into his face.

 

“No, Feargus, no, we knew not a jot of this. They kept this close.” He continued: “As they marched, Zephaniah’s lawlessness, always likely to be a risk, became untrammelled. Houses were broken into by his men, some of them drunk, no doubt, and adult males were forced, against their will, to join the armed Chartists on their way to Newport. With Frost at the head of the marchers, those with guns were told to go to the front, those with pikes behind. The rain was now falling heavily and the marchers were, by this time, soaked to the skin. Some asked whether they were right to attack indiscriminately but Frost’s ambition was to create havoc and what needed to be done, would be done, he said.”

 

Feargus feared what was coming and a small crowd had now gathered around them as Harney went on:

 

“By this time, it was just yesterday, Feargus, Sunday, preparations were under way in Newport to defend the town. The Mayor held hourly briefings and soldiers had been sent out on reconnoitres to find where the enemy lay. Several of them were taken prisoner by Frost’s men. Other soldiers, meanwhile, carried out local searches and many were arrested for carrying arms. They were imprisoned in the Westgate Hotel and at the new Army Barracks, the Union Workhouse. Soldiers were then also sent to the Westgate to guard the men so taken.”

 

“The Westgate! We have spoken there, Julian. I remember it.” Harney ignored the interruption: “The fact that there appeared to be only twelve or so soldiers at the Westgate raised the confidence levels amongst the Chartists to an extreme and encouraged them further as they began the final stage of their march to take over the Town. Frost gave the command: ‘March, march!’ and, leading the men in his heavy black coat and red cravat, he was followed by those with guns, marching five abreast, those with pikes behind them. At the back, they carried pitchforks, sticks, mandrills and whatever else they could find.”

 

“In the Town, many locals had come outside to see for themselves what was happening and peered from behind doors and from side streets. Frost’s men arrived at the Westgate and, at the entrance to the stable, Frost commanded that the doors be opened. Inside were Mr Hopkins, the Superintendent of Police and a number of Special Constables. A scuffle took place as demands were made for the prisoners taken the previous night to be freed.”

 

“The constables were armed just with staves and began to run for escape as the Chartists began their attack on the hotel. The soldiers, themselves fully armed with guns, of course, started to load and fire on the Chartists but the fire was returned in good measure. Bang!” Feargus and Abel jumped back in their seats as Harney smiled: “The Mayor had been shot and, while his arm was being bandaged, an un-named Chartist entered with a pike, which he aimed at the Mayor himself! Bang! That Chartist was quickly shot by a soldier, from point-blank range. There was much more firing but, within some minutes, the attackers withdrew and quiet was resumed. Many soldiers had already exhausted their ammunition within the fifteen or so minutes of the attack and would have likely fled if the attack had persisted for much longer. The Chartists were almost victorious.”

 

“Hundreds of Chartists now ran back up the hill from which they had come into Newport. Zephaniah Williams had been leading his own laggards into the town, delayed by all his pillaging and they were now passed in the other direction by those fleeing before he had even become part of the fray. The rebels were, lucky for them, not pursued by the soldiers but hundreds of weapons were seized at the Westgate. Amongst those weapons were found the dead bodies of fifteen Chartists.”

 

Feargus and Abel both gave out audible sighs at the thought of the deaths. Harney read from a note he had in his hand:

 

“That they believed that they were fighting for a just cause is shown by a letter, written by one of those dead and I have it here,” as he waved it over his head, “I will read it and it will bring tears to the eyes of grown men,”

 

‘Pontypool, Sunday Night, November 4th, 1839.

 

Dear Parents,

 

I hope this will find you well, as I am myself at present.

 

I shall this night be engaged in a struggle for freedom, and should it please God to spare my life, I shall see you soon; but if not, grieve not for me. I shall fall in a noble cause. My tools are at Mr Cecil’s, and likewise my clothes.

 

Yours truly,

 

George Shell.’

 

“George Shell, a cabinetmaker, was but nineteen years’ old when he died, shot by the military at the Westgate.”

 

Feargus asked: “How many men died, Chartists and soldiers and police?”

 

Harney looked at his notes: “Twenty-two bodies were eventually found, although not one had been born in Newport. Twenty-two bodies, more even than died at St. Peter’s Fields.” Feargus could somehow feel the spirit of Henry Hunt as it drifted away.

 

A People’s Charter for Fair Voting

 

150706_Chartists

Fair Voting

Changes in the way we vote operate on a geological scale in this country. The ‘40 shilling   franchise’, that gave the vote to all men in England and Wales who were property freeholders valued at or above 40 shillings, was introduced under Henry VI in 1430 and was not overturned until the ‘Great Reform Act’ of 1832, a wait of 402 years!

185 years’ later, on 30th October, 2017, there was a parliamentary debate in Westminster Hall on the merits of Proportional Representation. It was inspired by a public petition of one hundred thousand electronic signatures via email. Petitions to the King in England were introduced under the reign of Edward I around 1275, another ancient method. Yet, they were not commonly used by the general public on any large scale until the Chartists’ pursuit of the People’s Charter. After Peterloo, which will commemorate its 200th anniversary on 16th August, 2019, the Chartists attempted to gain universal suffrage with the 6 demands of the People’s Charter and brought forward several petitions to the House of Commons. These included millions of signatures, written on vast sheaves of paper and carried to the House of Commons by armies of volunteers that stretched several miles along the route to Parliament. These marches were major events in themselves, bringing out tens or hundreds of thousands of working people, waved on by large street crowds, still disenfranchised by the 1832 Act that gave the vote only to around 5% of the population (adding the capitalist class to the landowners). Each petition resulted in a debate in Parliament but, each was summarily dismissed by a ruling elite that would not relinquish power to those that they considered beneath them. The last Chartist Petition under their ‘leader’, Feargus O’Connor, was in 1848 and the cry for universal suffrage was defeated with no further extension to the vote until 1867.

Move forward 150 years and the result of the latest petition will, in the short term, be no change and no parliamentary debate on the floor of the House of Commons but the arguments for PR that were heard in Westminster Hall clearly outflanked those (mainly C/conservative) opponents.

It was not just the voting system but it is clear that democracy itself was being debated just as it was 200 years ago when Henry ‘Orator’ Hunt was speaking to a crowd of one hundred thousand in St Peter’s Fields in Manchester. The resultant charge of the Manchester and Salford Yeomanry that murdered around twenty and injured hundreds was named ‘Peterloo’ to resonate with the battle of Waterloo in 1815.

It is now ‘First Past the Post’ (FPTP) system that is on trial. FPTP has been our system for election to the Commons from at least 1430 but where, as the six demands of the People’s Charter of 1837 showed, democracy was only available to a few. In the 180 years after the People’s Charter was written, gradual changes have been made so that, once registered, every citizen of eighteen years and over has the right to vote in a local constituency, of which there are 650. The candidate with the most votes wins a constituency – a situation that remains the same as in 1832 (or even 1430) except that the votes are now by secret ballot. The winner of most ‘seats’ has a majority in the House of Commons. What could be wrong with that?

What is wrong is that ‘Winner-takes-all’, constituency-by-constituency, disenfranchises the vast majority of voters. The Electoral Reform Society calculated in 2015 that 74% of votes cast in the General Election were completely wasted as they are either votes for the losing party or votes for the winning party that exceeds the amount needed to win. Since I was first able to vote (at the 1974 General Election, when living in Manchester, when the Party I supported, the Liberals, gained 19.3% of the votes and only 13 seats!), I have not, at any General Election since, believed that my vote counted for anything – my preferred candidate has always lost! This is a form of disenfranchisement that results in reduced voter turnout, tactical voting that requires voters to vote for a second party to unseat their least favoured, protest voting in bye-elections and referendums (the Brexit vote has been viewed as, at least in part, such a protest) and a sense of voter irrelevance. So, despite having the ability to place a cross against a political party, the feeling is that the action is useless. At a time when the traditional two-party system is under siege, this results in the largest two parties obtaining government with lower votes than ever. It is a reason that Non-governmental organisations (NGO’s) are more popular than before because people believe that the political party system is not one where their vote counts and that pressure points have to be obtained through other means.

Of course, it is even worse than this because many of the individual constituencies are in areas where particular parties have had complete control for many years: Labour in inner-city heartlands, Tories in rural areas. Voting in these areas is akin to the rotten boroughs of the 1820’s so that anointed individuals take up their seats without the need to strive for election.

This leads to parties putting their efforts primarily in those constituencies that are properly contestable, where the luck of location means that more than one party has a chance of success. In these seats, just a change of a few percentage points can mean success. It can be easily argued that just a few thousand people in the whole country decide general elections. The fight for votes in the UK comes down to far less than 5% of the population, the situation that existed prior to 1832.

Of course, no system is perfect. The UK needs a system where every vote can count but there is a desire in this country to hang onto constituency representatives that work for that constituency. That entails a well-thought out plan for a form of proportional representation. The Jenkins Commission in 1997 produced a system that attempted to combine the benefits of constituency and proportionality but, after support from the Labour opposition, came to nothing when Labour gained power.

Will the UK ever achieve an improved form of democracy when those in power get there through FPTP? Is there enough pressure from the public that will drive politicians to proportional representation and change the system that has endured since 1430? Perhaps we need a charter for democracy in 2017. The People’s Charter of 1837 did not bring the Chartists universal suffrage but all except one of its demands (annual elections) have been met. What the People’s Charter did not envisage was that better forms of communication (even O’Connor’s Northern Star newspaper was no match for today’s online communication revolution) would engender the ability of so many viewpoints to be held and argued over that leads to the increased number of political parties. We now need a voting system that re-enfranchises all the people and also motivates people to become active participants in the election process.

 

We need a People’s Charter for Fair Voting.

 160111_Pic2

Science as a Candle for Democracy

Candle

July 14th celebrates the storming of the Bastille in Paris on that day in 1789. After the War of Independence in America, it was a second revolution to bring democracy to a kingdom, this time in Europe. For Thomas Paine, writing The Rights of Man shortly thereafter (a quote used by the great Christopher Hitchens in his biography of Paine:

“Never did so great an opportunity offer itself to England, and to all Europe, as is prodiced by the two Revolutions of America and France.”

Whether, over two hundred years’ later, the success of the revolutions is properly signalled by the visit to France of the popularist Donald Trump is highly questionable for his visit signifies a distinct darkening of how democracy is faring in the USA, Europe (post-Brexit referendum), Turkey, the Phillipines, India, China, Russia, Saudi Arabia, Israel where serious strains are being felt and ‘strong man’ politics is under way.

It may be straining credibility to equate these dark concerns on democracy with the election of Norman Lamb, a Liberal Democrat Member of Parliament, to the position of Chair of the House of Commons Science and Technology Committee, a Committee whose purpose is to scrutinise the UK Government on its strategy and programmes in this area. Yet, this linking of science and democracy is central to the changes we are currently seeing in the world of politics.

Science in the Soul‘ is a collection of the writings of Richard Dawkins, where he shows his distinct ability to reason and explain to the full.  In the book, Dawkins commends the science populariser, Carl Sagan, as a man that should have won the Nobel Prize: not for science but for literature and it made me re-read his excellent book ‘The Demon-Haunted World‘, published around twenty years ago.

Sagan’s book is about how “scientific thinking is necessary to safeguard our democratic institutions and our technical civilisation” and is so apt in an era of Donald Trump and Brexit (with its Govian taunts about how not to believe experts) that it should be read and re-read by anyone with a desire to understand our current problems and what is needed to extricate ourselves from the hole that we are digging for ourselves. It was also frighteningly prescient. I reprint here, word for word, a sizeable paragraph from the book that accurately forecasts a significant chunk of our world in 2017:

“….science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children’s or grandchildren’s time – when the United States is a service and information economy; when all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agenda or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what’s true, we slide, almost without noticing, back into superstition and darkness. The dumbing down of America is most evident in the slow decay of substantive content in the enormously influential media, the 30-second sound bites (now down to 10 seconds or less), lowest common denominator programming, credulous presentations on pseudoscience and superstition, but especially a kind of celebration of ignorance. As I write, the number one video cassette rental in America is the movie Dumb and Dumber. Beavis and Butthead remains popular (and influential) with young TV viewers. the plain lesson is that study and learning – not just of science, but of anything – are avoidable, even undesirable.”

If an afterlife existed, Carl Sagan would be looking down at the events of 2016, and tut-tutting knowingly, shaking his head and pulling at his long, white beard (all sages have long, white beards in heaven, don’t they?): “I did tell you guys!” he would be shouting, hoping that some mystical ripple would resonate from his screams of despair into our heads, deaf and dumb to all sense.

In the so-called developed world, technology moves forward at a great pace so that major phase transition events bypass us with alacrity. The whole ‘fake news’ environment washed over us only in the last few years as the networked world provided everyone with the ability to be journalists and have an opinion that all can see. As always with new technology, those most capable of utilising it to advantage included the criminally-minded who not just sent emails from Nigeria asking for your money, or emails and texts that would lock up your computer or cellphone if you replied but, more subtly, perverted voting systems and swayed voters by their ability to infiltrate the social networks with lies, distortions and manipulations to a precision that a few thousand votes in the right States resulted in a Trump presidency.

Sagan wrote further on this:

“We’ve arranged a global civilisation in which most crucial elements – transportation, communications, and all other industries; agriculture, medicine, education, entertainment, protecting the environment; and even the key democratic institution of voting – profoundly depend on science and technology. We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.”

“The scientific way of thinking is at once imaginative and disciplined. This is central to its success. Science invites us to let the facts in, even when they don’t conform to our preconceptions. It counsels us to carry alternative hypotheses in our heads and see which best fit the facts. It urges on us a delicate balance between no-holds-barred openness to new ideas, however heretical, and the most rigorous sceptical scrutiny of everything – new ideas and established wisdom. This kind of thinking is also an essential tool for a democracy in an age of change.”

Carl Sagan was a sceptic and the book shows how scepticism, used pro-actively, not as a tool to doubt everything for doubt’s sake, is central to understanding. He provided a toolkit for guarding against a fallacious or fraudulent argument. In summary:

  • Where possible, independently verify the facts
  • Encourage debate on this by opponents and proponents of views expressed
  • Discount ‘authorities’ who generally carry no weight; in science there may be experts, not authorities. In politics, beware such experts.
  • Spin more than one hypothesis
  • Don’t get over-attached to an hypothesis just because it’s yours
  • Quantify where you can
  • If there’s a chain of argument, show that every link works
  • Occam’s Razor – if two solutions exist, choose the simplest
  • Always ask if the hypothesis can be disproved (e.g. Brexit will save British taxpayers £350m a week!)

Now, not everyone has the time to go out and do all this. So, we rely on journalists and others to do so. This brings me back to Norman Lamb, a man who has gained tremendous respect across all parties for his honesty and campaigning zeal (in the area of mental life as an example). He is a democratically-elected member of a Parliament often thought of as the home of democracy (Thomas Paine might have doubted that and the first-past-the-post system of elections means that most in the UK are, effectively disenfranchised) and now Chairs a Committee on Science and Technology. We should be using such institutions to galvanise the linkages between science, technology and democracy to challenge ourselves in how we think so that crass assertions made during the Brexit referendum and by Donald Trump and others (that might lead to the USA’s desertion of the Paris Agreement on environment as just one example) are challenged by not just politicians but by all those that should hold us to scientific thinking.

This means that we should understand why those that wish to believe in such perversions of reality actually do so and why scientific thought processes are so easily overturned, that ‘rigorous scrutiny’ is accepted as the norm. A recent article in the Financial Times, by John Gapper on how CP Snow identified the gap in thinking on science by intellectuals in the 1950’s shows that this is not new, but it is not just intellectuals that have the vote in the 21st Century, it is all the people.

So, a plea to Norman Lamb and his Committee, whatever the Terms of Reference have historically been, it is time to challenge our lack of scientific thinking, the lack of awareness of science and technology throughout the population and how this “combustible mixture of ignorance and power is going to blow up in our faces” – if it hasn’t already.

Democracy took many lives and many years to establish in the western world and elsewhere. It is not yet extinguished but, like a candle that has been burning for many hours, the light is in danger of failing. Sagan’s book was sub-titled: “Science as a Candle in the Dark”. On the day the French commemorate its own democracy, we should not let that candle flutter to extinction.

Candle

Unmasked – Corruption in the West

Unmasked – Corruption in the West

by Laurence Cockcroft and Anne-Christine Wegener

 

Yesterday, 9th December, 2016, was International Anti-Corruption Day and many newspapers and journals used it to publicise the most venally corrupt nations, often those in Africa and the Middle East viz. NY Times.

 

These are developing nations, highlighted by Transparency International’s Corruption Perception Index, where those affected by corruption are most at risk of its exploitation by their leaders.

 

What Laurence and Anne-Christine have done is to shine a light on the developed West, where corruption remains a standard and where the mechanisms that enable corruption around the world, such as highly proficient banking systems, legal and accounting expertise, sophisticated technologies, exist to maximise the ability of those throughout the world to illegally and immorally syphon billions, possibly trillions, of dollars, pounds and euros away from legitimate ownership.

 

This is an important work that provides the bedrock of understanding for those who are interested in dealing with corruption to dig further into the subject. It highlights the enormous degree of corruption in the Americas and Europe, from political to banking, from sport to business to organised crime in a highly readable way but one that provides important information, not gloss. It also shows the huge challenge where, even in highly developed, wealthy economies, the desire to have more seems undiminished.

 

Laurence was a founder of Transparency International (TI) and Anne-Christine was a deputy director of Transparency International’s worldwide Defence and Security Programme (DSP). I am privileged to be both a Trustee of TI-UK and Chair of DSP, so I know the contribution both have made and also the huge work that still needs to be made.

 

The book is an important balance for the anti-corruption world. Corruption is not just in poor countries and, where grand corruption is concerned, the West is involved with the developed world anyway in financing the corruption and in enabling aspects of it such as money laundering. Together with the corrupt practices that appear to be endemic in the West, such as in lobbying, sport, political favours, business, crime-related, the West has a massive anti-corruption agenda to fulfil and knows it.

 

Three things, amongst many, cry out for action. First, there is the need for politicians and business people at the highest level to be far more active and vocal in this area. This includes their associations, such as Chambers of Commerce in the USA that are actively trying to water down the Foreign Corrupt Practices Act to dumb down the level playing field and make corruption easier. Beyond this, politicians in wealthy countries are too devoted to increasing GDP at any cost and the danger is growing that the ethics of doing business will be adversely affected as a direct consequence of the inequalities caused by the banking crash of 2007/8. Brexit and Trump are such outcomes and, viewed from the anti-corruption side, harrowing in their potential.

 

Second, the resources that are provided to implement and manage the laws that politicians might deliver on are woefully inadequate for the task. If legislatures enact new laws to strengthen anti-corruption norms, it is the execution of the laws that fail so often through inadequate expertise and sheer money provided.

 

Third, it is time for anti-corruption to be seen as a positive economic benefit. Corruption is bad for the wealth of the broad population, assisting only those at the top of the tree. In a world that seeks to reduce inequality and where voters are making their positions clear that they will not tolerate their position for much longer, intelligent politics and business (and development aid) means reducing corruption becomes more important. It is a key method of increasing economic well-being by ensuring that enormous flows of corrupt money stays in countries that require it as well as in the economies where it can be properly used rather than syphoned into a tax haven bank account where it remains as dead money. In an age where the velocity of money is slowing, corruption remains a cause of economic decline.

 

Unmasked comes as at important time, just as the world is turning in on itself. The West should learn the lessons that are described so well in the book and use this difficult period to ensure that the first gear in which it has for so long been engaged is kicked into second and upwards not into reverse.

A People’s Charter for the Banks

 

In 1842, Feargus O’Connor led the working people of the United Kingdom into a general strike on behalf of the People’s Charter. The Chartists’ aim was for the House of Commons, then run by the elites of the landowning class plus some merchants and millowners after the 1832 reforms, to become more democratic. The six proposals were:

 

  1. A vote for every man over 21 years
  2. Secret ballots
  3. No land qualification for voters
  4. Payment for Members
  5. Equal constituencies
  6. Annual ballots

 

It took many years for the first five to be enacted and many more for women to achieve equality (something not even envisaged by the Chartists). The Chartists failed to drive change because the British economy continued to improve and the other motors for change (such as Trades Unions) were continuously provided with small (even if sometimes significant) improvements in factory conditions, better hours, better wages and the like. This meant that pressure for change in the way that the Chartists demanded were stifled by more practical changes that were seen to immediately impact the working classes.

 

However, the impact of elites continuing to run the country and ameliorated only by small improvements in conditions was (in hindsight) bound to result in extreme consequences. The First World War was a consequence of elites throughout Europe playing a game decidedly different to the vast majority of people and using them as mere playthings – whether in armies or in factories.

 

The BBC’s current six-parter, Tolstoy’s “War and Peace”, shows clearly who was in charge in 1805. That continued throughout Europe until 1918 at least after millions of lives were lost.

 

It may seem difficult to equate the financial crisis of 2007/8 and the consequences of that crisis to the class crises of the nineteenth century but the similarity of elites that are unwilling to give up any power over the economy remains. The elite may now be different (although bankers held great power in the nineteenth century as well) but the way that Banks and their allies in Governments in the UK (Conservative as well as Labour) see the rest of the country as mere playthings is no different.

 

A new film is about to hit the screens in London – “The Big Short”. Based on Michael Lewis’s book of the same name, published in 2010, it portrays the banking world in the USA as completely indifferent to the problems faced by society as they pursue their own, short-term gains and bonuses. Government is either unable or unwilling to address the problems because the banks are so important to the country – too big to fail – and also because most in Government do not understand what to do.

 

Just as the mill owners of the early nineteenth century were seen by landowners as a necessary partner for the future, Governments see bankers and banking in the UK as necessary for themselves. This means that they tolerate all but the very worst abuses.

 

The FCA – Financial Conduct Authority

 

The FCA is the organization that Parliament developed under the Financial Services and Markets Act 2000 to oversee the financial system. Part of its remit is:

 

The reduction of financial crime.

(1) The reduction of financial crime objective is: reducing the extent to which it is possible for a business carried on—

(a) by a regulated person, or

(b) in contravention of the general prohibition,

to be used for a purpose connected with financial crime.

(2) In considering that objective the Authority must, in particular, have regard to the desirability of—

(a) regulated persons being aware of the risk of their businesses being used in connection with the commission of financial crime;

(b) regulated persons taking appropriate measures (in relation to their administration and employment practices, the conduct of transactions by them and otherwise) to prevent financial crime, facilitate its detection and monitor its incidence;

(c) regulated persons devoting adequate resources to the matters mentioned in paragraph (b)

(3) “Financial crime” includes any offence involving—

(a) fraud or dishonesty;

(b) misconduct in, or misuse of information relating to, a financial market; or

(c) handling the proceeds of crime.

(4) “Offence” includes an act or omission which would be an offence if it had taken place in the United Kingdom.

(5) “Regulated person” means an authorised person, a recognised investment exchange or a recognised clearing house.

 

All this is within a framework of law that sits the financial community within itself. By this I mean that the regulator is charged with the above but only insofar that it does not harm banking competitiveness and so that the resources of the FCA are used efficiently under Section 2 of the law. While consumer information is called up in the law, there is no balancing of the “reduction” of financial crime against the needs of the consumer and nothing about how the financial system and banking in particular is to be used to benefit the overall British economy.

 

This means that the FCA is bound by rules that err on the side of the banking and financial fraternity – a financial brotherhood – and does nothing to impact the financialisation of the economy to which I referred in a previous blog.

 

Evidence of the ability of Government to “rebalance” the objectives of the law in favor of the banks is the recent decision of the FCA to shelve its report on the culture of banking and for it to work on an individual basis with banks (behind the scenes). As Michael Lewis’s book and the film so amply shows, culture is at the heart of the problem. The FCA’s step backwards under acting Head Tracey McDermott appears to be sold evidence of its inability under the current law to be effective on behalf of the British economy unless it has a leader within the FCA with enough integrity of his or her own to challenge the banks on behalf of all consumers and all those potentially impacted by wrongdoings of the banks – like Martin Wheatley. Ms McDermott is now no longer in the running for the Chief Executive position. Does anyone on the shortlist that Chancellor of the Exchequer, George Osbourne, has interviewed come up to those exacting standards: someone that has the integrity to see through the shortcomings of the Financial Services and Markets Act 2000 (FSMA 2000) and is able to bring the banks into line so that they serve the economy?

 

I doubt it as this Government has shown repeatedly that it is hell-bent on balancing the books at the expense of all else – even if that means allowing banks to keep the economy from re-balancing to an economy that uses banks and finance from one where the banks suck the rest dry.

 

This means that the law needs to change. It is so important that the UK is “de-financialised” (like an addict that needs to be properly drawn from drugs) that we should seek the FSMA 2000 to be brought up to date with a Charter for economic improvement so that, at the very least, the FCA has to minimize financial crime not just reduce it and so that, in any decisions it makes, the needs for economic well-being override the considerations in Section 2 that could lead to favouritism towards bank and those individuals within that system.

 

Because it has never been shown that a massive banking system does anything other than reduces the ability of other industries to survive because it raises exchange rates, raises property values, sucks the best people into it, restricts business loans because of short-terminism, pays for short-term advantage and (often) criminality at the expense of good business decisions and overly impresses economically uneducated civil servants and politicians with their results.

 

The lessons of an elite taking hold of an economy and leading it to disaster have not been learned. The lessons of 1842 that led to the First World War and the lessons of 2007/8 have been sidelined as this Government now has a majority in the first-past-the-post House of Commons (still undemocratic) and a Chancellor who has decided that bashing the banks has gone far enough. He has done this without any notion of economic objectivity whatsoever.

 

We now need a People’s Charter for Banking and De-financialisation – maybe just two elements to start with:

 

Change the Financial Services and Markets Act 2000 to:

 

  • Section 6 – Minimize criminal wrongdoing not “reduce”
  • Section 2 – Add an over-riding requirement so that any decision of the FCA has to show that it is taken in regard to overall economic well-being of the country not just to the financial industry.

 

Just like those that had been left out of the elite ruling classes of the 1830’s and 1840’s, those that are not allowed entry to the financialised sector, i.e. the mass of people – the British public, need to challenge how decision-making in that sector, now taking far too much of the British economy and with very disputed benefits to the mass of people (just like early capitalism) need to agitate for change.

In the 1840’s, the Chartists were successful only in bringing the issues of the working class to the attention of the ruling classes. They did not succeed in most of their demands. It took decades until those demands were met and eighty years before women were given the vote. This country still has a House of Lords and unrepresentative democracy in the Commons as a result of first-past-the-post: we are very conservative. Nevertheless, when British people have their backs to the wall, they react. The FCA is putting British people’s back to that financial wall by their inability to tackle banking as it should be tackled – at the centre. With a pending recession in the UK – in the midst of austerity – this is a dangerous situation. Time to make changes.

 

 

 

 

Don’t Look, Won’t Find

DLN

 

Don’t Look, Won’t Find – Money Laundering in the UK

Transparency International – UK just published “Don’t Look, Won’t Find” which exposes enormous gaps in the UK’s ability to stop illicit money coming into the the country.

The report shows how all sectors, from banking to the enablers of money laundering like the accounting firms, legal firms, company registration firms to the sellers of final products and services like auction houses, private education, fail the test of oversight and reporting on a consistent basis.

This means that huge amounts (tens of billions of £’s) enter the country illegally from China, Russia, Africa and elsewhere – depriving those countries of the money they need and, as a by-product, pumping up house prices in London.

I had the privilege to Chair the Advisory Committee for this report – part of the Corrupt Capital project at TI-UK which aims to uncover how London (a major financial centre) needs to work hard to rid itself of corrupt capital that enters its system here and in the many tax havens to which it is connected world-wide.

Those who have written this report have done an excellent job of uncovering the chaos that exists in oversight and reporting systems in the UK.

 

Don’t Look, Won’t Find

Swing Riots to Zero Hours

 

150402_Swing Riots

The early 19th Century contains a forgotten history lesson in trying to understand the changes in the relationship between the workforce and business.

Farming in the early 19th Century (by far the main employer) was mainly open field farming where wealthy landowners leased out their farms to tenant farmers. These tenant farmers then brought in labour to work the farms. Farm labourers were selected at annual labour fairs in the villages and small towns close to the farms. When selected, the labourer would be employed by the farmer for a year or so and live on the farm – usually sharing in the work and eating with the farmer and his family.

This seemingly idyllic relationship can be likened to working relationships in the 1960’s and 1970’s when employment was meant to be “for life”. It was the breakdown in that relationship and the tensions that ensued that led to British trades-unions forcing a mass of industrial disputes in the 1970’s that Margaret Thatcher’s government sought to end.

In the 1820’s and 1830’s, the annual fairs gave way to monthly contracts and then often to weekly and daily as the world of agriculture was devastated after the end of the Napoleonic Wars, as weather conditions worsened for farming and as poor conditions led to a rise in disease that devastated cattle and sheep in many areas. The need to keep costs lower and lower led to wage reductions on a regular basis and the invention of the threshing machine was seen as a needed investment by farmowners that could afford the investment.

For the farm workers, by 1830, life had become intolerable and the “Swing” riots ensued. Rowland E Prothero (Baron Ernle), writing in his “English Farming” (1888):

“While the Luddites broke up machinery, gangs of rural labourers destroyed threshing machines, or avenged the fancied conspiracy of farmers by burning farm-houses, stacks, and ricks, or wrecking the shops of butchers and bakers. In the riots of 1830-31, when “Swing” and his proselytes were at work, agrarian fires blazed from Dorsetshire to Lincolnshire.”

Fast-forward to 2015 and we are now confronted by the realization that business (our 21st Century equivalent of 19th Century farming in terms of employment) is now employing zero hours contracts with increasing regularity. This 19th Century response to a 21st Century problem goes hand-in-hand with the UK’s inability to increase its productivity to anywhere near the levels of Germany and France (let alone the USA).

Luddism (and its followers, the Luddites) was a cry against the fear of mechanization in mills and early factories (and the farms) while the “Swing” riots, although exacerbated by the introduction of threshing machines, was more than this. It was a reaction against a change in relationships that had been developed over many years. This breakdown of the relationship between the farm labourer and the farmer (and the poverty into which farm labourers were thrown) led to riots and the extraordinary backlash of Government (labourers were imprisoned, many were banished to the colonies and many were executed).

Zero Hours Working and Independence

This time around, zero hours contracting is also a symptom of a breakdown in relationships. It is common in low-skill environments and very common in many areas where Government (local and national) has decided to outsource. Many of these jobs occur where the individual on a zero-hours contract is working in social care. This is an example of short-term cost requirements that can easily lead to long-term quality disappearance – as the ability of the carer is their responsibility as far as the contractor is concerned.

For some time, the relationships between employer and worker in manufacturing and services has been changing – and reflects the way of agriculture in the early 19th Century. Workers are now more like sub-contractors as Tom Peters  (a leader in management thinking) envisaged back in 1994 when he wrote an article in The Independent – “Travel the Independent Road”:

“I contend that…everyone, bellhop, boss, scientist, had best achieve the mindset of the independent contractor.”

With the growth in self-employment in the UK since the financial crash of 2007/8 (where 15% of all workers are now self-employed and one-third of employment since 2010 has been in this area according to the Bank of England), we do appear to be changing the relationship between bosses and workers. In the Bank of England’s Q1 2015 Report, it asserts that “much of the recent increase in self-employment reflects longer-term trends.”

The steady ageing of the population and the increased distance between business managers (the most similar to tenant farmers in the 1830’s) and the average worker (at least in terms of salary) suggests that the 20th Century may well have been just a phase in the development of capitalism. It may well be that the natural default position is more ambiguous – offering those with skills the ability to sell into a marketplace with a range of options rather than the existing with one employer that pays for those skills for the whole of a working life.

In highly skilled jobs within the film industry, for example, it has been common for some time for companies to be formed just to make one film. Skills are brought to bear on that film (whether by actors, directors, script writers, cameramen/women and all the rest) who then disperse at the end of the production. They leave with payment for their role and investment of time and skill and, hopefully, with their reputations enhanced – reputations that will help them towards the next collaboration.

In most work, the old mentality of learning on a job and working for the same company for life persists. Zero hours contracts splits the worker from the employer so that they cannot gain training and benefits from that skill accumulation.

The Labour Party, in the run-up to the May 7th General Election, calls for the curtailment of such contracts. However, as argued in many areas, there are many types of such contracts (not all bad) – Independent 3rd April 2015 – and the move to such contracts may well be a harbinger of changes in the working structure. If the latter, while abuses at work need to be stopped, then we still need to have a change our thinking about how we assist those who are independent contractors to develop skills and capabilities (and also help them to negotiate good independent contracts) and to help them to access the work where it is available.

This calls for government to understand and work with the organisations that represent the self-employed – who have been for so long the virtual bystanders in a game carried out by business and representatives of permanent employees (trades unions and staff associations).

There may well be no repeat of the Swing Riots in the 21st Century but as inequality of income and wealth become progressively worse, it is critical that we ensure that inequality of opportunity for all those who want to work but may decide (or have it decided for them) to work as independents is minimized. This can be done by enabling training in skills and enhancing the networks of opportunity for them.

Independent working can be entirely fulfilling but the old (Ed Miliband?) mindset needs to change to the way the world is working in the 21st Century and to maximize the ability of the self-employed / Independent worker to achieve success in this changing (and uncertain world).

 

 

 

 

 

 

Gulliver’s Travails – HSBC’s Satire on the rest of us

150225_Gulliver

 

It seems like Jonathan Swift’s best act of satire has been mixed with Robert Louis Stevenson’s best story-telling and then updated to the 21st Century as HSBC were derided before the House of Commons Treasury Committee today (25th February, 2015).

Nick Shaxson wrote “Treasure Islands” about tax havens but even he could not have foretold what looks like a complete satire on British society perpetrated by our biggest bank.

The Chair and CEO of HSBC Holdings (Stuart Gulliver and Douglas Flint) may well have been crafted by Swift and Stevenson. Lemuel Gulliver and Captain Flint (or his parrot that sat on the shoulder of Long John Silver) are two of the greatest characters in British fiction.

Gulliver’s Travels was (especially in its pre-Bowdlerised version) a satire on government and the British people.

Treasure Island was a story about man’s greed.

How odd that its two best-known characters come together before the Commons treasury Committee – both trying their best to defend their own position and that of their bank’s.

The Satire

HSBC are surely being disingenuous or maybe downright satirical pouring scorn on the general public. As they have been dealt blow after blow around money laundering, gold pricing, Swiss bank tax evasion and others, the satire has grown.

We sit open-mouthed at the sight of senior business folk that have earned £ millions but who take no overall account for the problems that were caused on their watch. Banking is now held in total contempt by most yet no-one has been brought to account in the UK since the banking-induced recession in 2007/8.

To the banks, the rest of society appears to be merely a group of Lilliputians finding a giant on the beach but being so impressed by their size and strength that we can do nothing.

To the banks, the rest of society appears to be like treasure chests that are theirs to own.

This is the reversal of their original intention – which was to lubricate business and to enable tomorrow’s investments to be made earlier. Society needs to find a way out of the satire that is being played on itself and what better opportunity is there than in the dual presentation of Swift and Stevenson’s characters before us?

No Impunity?

It is very hard to feel empathy for wealthy bankers who have presided over such failings. Douglas Flint points out that he has not taken bonuses for some time and Stuart Gulliver believes that banks are now being held to higher account than the Church and the armed services. The first is irrelevant and the second is a disgraceful statement that does much dis-service to any organization that has made so many gross errors of judgement and suffers so little governance – governance that is only applied when mistakes are found out.

The ability of senior bank staff in the UK to maintain complete impunity from prosecution remains a singular insult to the rest of the population that has seen real wage deflation since 2007/8.

However hard it is to bring bankers to justice under UK law, there seems to be as little chance of action now as there was when Gordon Brown was snuggling close to that community when the roof caved in.

HMRC appears complicit in its investigations since the receipt of whistle-blown data five years ago but that should not inhibit the UK’s investigators from doing more than the Treasury Committee – which seems to accept that it cannot find anything out before it goes wrong time after time after time and just hopes that HSBC gets it right sometime.

Messrs Gulliver and Flint had an uncomfortable day today and I am sure that they are working hard to make things right. Yet, claims that they did not know what was going on in Switzerland (or elsewhere where the bank failed) are weak claims that have not been sufficiently critiqued. When HSBC bought the Swiss private banks, they knew the secrecy laws in that country and they knew that there were major risks. To adhere to the escape clause of Swiss secrecy in a UK-registered company with world-wide shareholders seems to be an attempt to escape responsibility for any problems that might ever be encountered when an acquisition is made.

The reputational losses to HSBC as a result of the acquisition is substantial. HSBC’s shareholders should be mounting a class action on that basis alone as today statements were made that seemed to suggest that when HSBC makes an acquisition in a place of opacity, no matter what the outcome the senior staff that signed off on the acquisition cannot be held to account.

That is in addition to the nonsense that HSBC Board members should be relieved of governance responsibilities if there is secrecy in a jurisdiction.

This is surely a great satire perpetrated on the rest of us. Someone does need to unravel it. Swift originally wrote Gulliver’s Travels as a gross satire on society. We should not allow Gulliver’s Travails (and Flint’s) be Bowdlerised in the same way.