Is FIFA-world just a microcosm of the real one?

Russia's president Vladimir Putin (left) and Fifa president Sepp Blatter

FIFA-world: a virtual world where you get ahead by what you pay and stay ahead by denying the evidence

“When we get bribed, we stay bribed.”

Jon Stewart on his Daily Show in the USA – his take-down of Sepp Blatter and FIFA. The legal onslaught on FIFA-world  has been 24 years in the making – 24 years before the legal process (headed by the US Attorney General Loretta Lynch) went into motion. As Stewart remarked, “even Switzerland” itself had moved on FIFA.

Yet, Sepp Blatter was overwhelmingly affirmed by FIFA delegates for another four years – on the votes of Africa, Asia and Platini’s France amongst others. This was despite the obviously dangerous legal claims made against many senior employees and representatives of FIFA by the US and Swiss legal authorities. This was despite the fact that Blatter has been President of FIFA for so long – it has been on his watch.

The President of FIFA has (under its latest statutes) the following responsibilities:

32. President

The President represents FIFA legally.

He is primarily responsible for:

a)  implementing the decisions passed by the Congress and the Executive Committee through the general secretariat; 

b)  supervising the work of the general secretariat;

c)  relations between FIFA and the Confederations, Members, political bodies and international organisations.

Only the President may propose the appointment or dismissal of the Secretary General.

The President shall preside over the Congress, the Executive and Emergency Committee meetings and those committees of which he has been appointed chairman.

The President shall have an ordinary vote on the Executive Committee and, whenever votes are equal, shall have a casting vote.

If the President is absent or unavailable, the longest-serving vice-president available shall deputise.

Any additional powers of the President shall be contained in the FIFA Organisation Regulations.

As FIFA’s legal representative on planet earth, it seems clear that Blatter would be held accountable for all its actions whether he knows about them (and he claims a complete absence of knowledge) or not. Yet, FIFA members, by a great majority, supported his continued Presidency.

For some of us, this seems absurd. For those of us brought up under democratic systems, where wrongdoing in an elected body is normally punished by the voter, the inability of FIFA to sort itself out appears naïve as does the apparent understanding of the electorate. Yet, to many of those who voted for Blatter, their response was entirely logical.

How FIFA-World Seems to Work

The world has changed over the last fifty years to an extent that is now becoming highly visible. Until the 1950’s, the great western powers and the USSR held military power (hard power) over the rest of the world. One by one, states outside this power block became politically independent. Asian economic power-houses like Japan grew quickly and then China began its sustained and dramatic economic renaissance. After the break-up of the Soviet Union, instead of democracy, economic power brokers developed (with Putin at the top of that tree).

While we understandably focus on military and security threats posed by those like ISIS, the world has been moving on – with economic growth at the centre (softer power).

However, instead of the west’s domination, there are now various centres of economic power – such as China, India and Brazil – which are breaking down long-established norms.

These norms (such as the desire by Western nations to link good governance with economic aid) are under real threat as newly enriched nations like China care less about the good governance of its supply and customer base outside China than it does internally and less than the stated aims of the earlier economic hegemonies.

This compounds the pent-up pressure on the governments of the newly developing world that may be tired of the continuous pressure put on them to do more of what the west wants them to do – such as reduce corruption and improve good governance. This is not the reaction necessarily of their people (most are completely sick of the bribery and corruption that exists, often sick of the absence of real democracy and the absence of real representation) but in many parts of the world, the people do not have a say.

Also, populations are torn between a natural desire to see things properly run (good governance) and feeding their kids or having a roof over their heads. Elsewhere, like in Russia, the government has a rigid control over their people. The same is true in China.

Finally, nations are now (because of their own economic strength and because of alliances with those like China) less likely to fold against the old hegemonies of the USA and Europe.

For all these reasons, FIFA-world seems symbolic of the new world order that is taking place where an organisation that has been corrupt for so long is able to maintain good relationships with its supporters through its economic success and the ability to pass on that financial success to a range of nations and individuals – upon which it also survives. It pays to support Blatter – even if you are in receipt of dirty money.

Despite pressure from the west (notably the UK – via, mainly, its newspapers like the Sunday Times while government was just as mercantilist when London was in the running for the World Cup), FIFA refuses to change from the inside. As there is no ability to march into Switzerland and take over the company by force (the 19th Century ideal), the only method remaining is via international law as applied by the US Attorney General and the Swiss. It has taken 24 years to get to this stage.

What could we be learning from FIFA-world?

This microcosm represented by FIFA-world must have lessons for the new real world order but it is not easy to overcome the concern that fifty years of working towards better governance (e.g. where we have seen increases in the number of democracies throughout the world) is under threat.

The natural focus on material wealth as the highest priority for all nations and all people is understandable. Worldwide poverty indicators are reducing (even if mainly from Chinese economic success). As Maslow showed so clearly in the 1930’s, most people focus on material wealth creation well before there is a serious thought given to quality of life issues.

MAslow

This is clearly seen in practice as the world pursues economic gains even in those countries that are already wealthy. Even the safety and maintenance of nature and the environment becomes translated into a form of costed “natural capital” so that it can enter into our economic thinking. If it has no valuation methodology, then humans seem unable to evaluate it. If we can’t count it, we can’t imagine it, apparently.

This means that issues like corruption are treated as secondary to economic benefit or economic security in most nations. It is no longer just a case of saying “Corruption is bad, stop!” because the complexity of the each situation means that, in the short term, those who gain through corruption and / or being part of a corrupt environment do not visualise the problems quickly enough. Moral crusades are not high enough on Maslow’s hierarchy (which was developed for marketing purposes but serves as a useful tool elsewhere).

Even the use of legal sanction by the USA, while applauded by many in developed nations, is not so well received elsewhere. Blatter knows how to utilize this reaction by appealing to the sensitivities of nations that do well out of FIFA economically and see themselves (as nations and individuals) threatened economically by the ending of corruption. This is not much different from oil-rich nations like Angola preferring to sell to China than the west – because no-one in China is demanding good governance from Sonangol, the dos Santos-owned oil company. It is similar to tribal leaders in Afghanistan that react badly to the west’s demands for an end to corruption in that country.

Those legal sanctions operating in the West (through a range of anti-money laundering devices, FCPA, Bribery Act and the like) can have great power when used against corporations. They are now extra-territorial in scope and can remove any one nation’s or company’s ability to protect themselves from legal onslaught. However, in the UK, for example, implementation of laws such as the Bribery Act are completely under-resourced so reliance has been placed on the US to widen its military policing role to one of legal challenge – where an individual using US assets (banking, currency or legal) is liable.

Such legal sanction needs to be policed (a) by more than just the USA and (b) in a way that is not seen as hegemony by former military world powers.

The first requires resources and a willingness to attack the problem; the second is far more subtle – a need to assess how to convince the world that corruption is hugely damaging to economies, sectors or society and even security (as is seen in Nigeria, Iraq, Afghanistan and many others vulnerable nations where armed forces are depleted by funding being ransacked by a few elites) when the benefits are clearer than the problems.

As an article in today’s National Post in Canada shows so well, giving the World Cup to a country well down Transparency International’s Corruption Perception Indicator (CPI) is asking for trouble. Yet, not giving the World Cup to such nations (which are developing nations in need of such investment and focus) until they have cleaned up their act would be seen to be counter-productive – and construed as anti-poor. There is no support for such a move.

What needs to happen is that good governance is seen as a central tenet of major corporations and of governments (national and local) and, for this to happen, a huge and relentless shift needs to take place in the way the non-FIFA world works so that the real economic needs of people are met while the ugly needs of vested interests that stand to gain through corruption are not.

For corruption to be minimized should be seen as one of the world’s major aims – where we need nations to meaningfully sign up to this in the same way as we sign up to human rights as corruption erodes human rights as well as any impediment known to humankind.

FIFA-world is a microcosm of how the real world tolerates corruption and the 24-year corruption story in FIFA is by no means finished. We need to learn from that story not just to fix FIFA-world but to fix the way the world tolerates corruption.

Note: I am a Trustee of Transparency International – UK

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The Strange Death of Liberal England – all over again!

150509_DeathofLiberalism - again

Nick Clegg made a speech on 19th December 2013 to a conference organised by the Open Society Institute and Demos which spelled out what Liberalism is about. It was poorly reported by the media which focused on criticisms of the Conservative policies on tax benefits for married people. But, it was an important speech in that Liberalism – the real third way of British politics – was, for the first time in many years, made the key topic.

In “the Strange Death of Liberal England” written by George Dangerfield in 1935, the twin political opponents of workers and capital were seen to squeeze out the rights of the individual as two opposing armies took over. This death was correctly seen as liberalism and the niceties of that philosophy were sacrificed to economic imperatives. Economic supremacy and economic growth (as measured by wages and GDP) became the real determinant in our politics and economics – a natural result of the economics of the 19th Century.

Now, western economies are relatively wealthy in pure economic terms despite the travails of the last eight years. It is the squeezed middle classes that have faced economic peril – with real antipathy to the financial “class” that seem to have acquired all the economic power. However, “austerity” economics has imperilled the lower paid and the poor on the altar of “balancing the books”.

In 2013, and in his recent resignation speech after an election that punished the Liberal Democrats for much more than cosying up to the Conservatives, Nick Clegg made the case so well. Liberalism stresses the balancing of the needs of individuals against power blocks – against totalitarianism of all kinds. “The values of the open society – social mobility; political pluralism; civil liberties; democracy; internationalism – are the source of my liberalism. And reflecting on the events of the last year, it is clear to me that they have rarely been more important than they are today.” Clegg said in 2013.

In his more recent speech made yesterday, Clegg stated that the loss of liberal values from recent politics spoke of a real risk to freedoms and the pursuit of life over entrenched interest groups. Unfortunately, this message had not been made by Liberals for 5 years (except in the odd speech like in 2013) and the mistrust held by the electorate over the decisions to become part of a Tory-led coalition along with the about-turn on University fees caused enough of the electorate to dismiss the Liberal Democrats. This party became “Tory-light” in the eyes of the young who had voted for them in 2010.

As economies struggle around the world, modern politics should be looking beyond the cul-de-sac of entrenched self-interest and power blocks to the values of the open society called up in Clegg’s 2013 speech. We should measure our rights to exist in ways that are more suitable than GDP or income measured in such straightjacket terms as numbers of £’s or $’s or Euros. Open society should be the way we measure our lives – this requires satisfactory income levels but there is more to what humans need than income to buy things that have diminishing returns to our well-being. Clegg’s speech should have been a useful starting point for what politics should be about beyond the next tax break. I hoped at the time that many would read it, that the press would begin to re-establish itself and begin to help lead the way to a new politics and economics for the 21st Century.

My hopes were dashed by a Liberal Democrat party that forgot its true centre (probably lost anyway when it joined with the Social Democrats thirty years ago) and only remembered it when it had lost.

Where does liberalism go now in the UK?

Perhaps the election throws up another route. The Labour Party’s dismay at it abject failure to ignite interest in the whole of the UK may be seen as an early stage in a change there, too. Born on the back of the struggle of the working class to assert itself in 1900, Dangerfield in his 1935 book showed clearly how that movement of labour was bound to kill off the party that had tried to represent labour up to then (the Whigs and then the Liberals) but from a middle class perspective.

Now, working people have succeeded in asserting their rights and many now aspire to middle income status. The struggle is now for all employed people to struggle in a world where the top 1% seem to be capturing the economies. They also have a mission to improve the lot of those outside of work.

For the Labour Party, this means that their traditional block of supporters seeks different outlets – Scottish Nationalist or UKIP, Green or even Conservative – where aspirations stretch from pure economic to the type of society for our children. Labour has to change to reflect aspiration – not just Tory-light (which Blairism was too close to) but something motivational. Ed Miliband talked about One Nation (a Victorian memory) that David Cameron repeated in his victory speech. This needs to be taken forward to the 21st Century and maybe Labour needs to reach out not go back into itself.

In the past, this was spoken of as a “realignment of left wing politics” but it needs a new 21st Century definition. Liberal thought as Clegg made so clear in 2013 and briefly referred to on 8th May, 2105, could be what drags the Labour Party kicking and screaming into a new mission for this century.

“The values of the open society – social mobility; political pluralism; civil liberties; democracy; internationalism” allied to safeguarding the poor and those who find it difficult to gain traction in that society, providing opportunity for all, motivating all to achieve both economic benefits and quality of life – these could be the new liberal values of Labour – and Liberals. Maybe the realignment is overdue – but, not just with left-ish ideals from the 1930’s, but liberal ideals for the 2020’s.

Trickle-down Economics – Cameron’s legacy?

150508_streetarabs1890

This was originally posted in 2013 just after the death of Margaret Thatcher. Now that the Conservatives have amassed a majority at the General Election, I am re-publishing as the message holds even firmer today.

“In our system, everything is done according to a pyramid approach: the order is given from the top and carried out at the base.”

No, this was not Margaret Thatcher but Jiangwen Qu – professor at Kumming’s Centre for Asian Studies, talking about China. (Taken from China’s Silent Army, Juan Pablo Cardenal and Heriberto Araujo).

He went on to say: “We believe that other countries should follow this model, because if you let everybody give their opinion it is difficult to make decisions.”

Yet, it demonstrates how in our so-called democracy, the top-down theory of decision-making was so faulty. Margaret Thatcher won three general elections because the Labour Party was split between the left-wing (originally led by Michael Foot) and the right, which broke away to form the Social Democrats. In the UK’s ridiculous “first-past-the-post” election system, a party needs only 35-40% of the vote for a substantial majority – that was Margaret Thatcher’s luck. This luck had already been seen in her victory over Edward Heath in the leadership contest in 1975 – although it has to be said that she took full advantage of that luck.

Margaret Thatcher always said that she believed in democracy but made great fortune from its deficiencies. Apart from a rigged election system that gives minor parties full majorities, she did not practice democracy in terms of decision-making. Her cabinet (where the Prime Minister is supposed to be prima inter pares – first amongst peers) was where “the order is given from the top and carried out at the base”. This was her style from the time she became Prime Minister to the time she was thrown out by those who had the substance to rebel after 13 years of her idiosyncratic style of democratic rule.

Leadership and Democracy

Within a system such as ours, Margaret Thatcher did not split the country – her support was far less than half the country (usually than 40% of the voting population) and even those that voted for were split between various streams of the Tory party. She fragmented it. Her supporters in 2013 would mainly be found in UKIP today although she would have still used the Tory Party as it is the only vehicle for power. The split was far worse as it demonstrated that rule of a democratic party would be by just the largest minority and with extreme policies.

Those policies did change the economic landscape that had been moving to rigid control by sclerotic centrist organisations such as Trades unions, Public Sector, old-style corporations and successive governments that had no vision for society.

Thatcher destroyed the comfiness of society in her own terms and put in its place more top-down doctrines around monetarism. Because liberalism had floundered after the first World War, centrist forms such as socialism and corporatism were, it seemed, all that there was left. Even the linking of Liberals and Social Democrats in he 1980’s was to prove a failure of liberalism as the Liberal Party moved towards a centrist European ideal and away from the localism and bias away from the centre that had characterized the party from its inception.

Strong leadership takes advantage of democracy in the UK (and still does) and the trade-off between the two is a constant battle. Where no leadership exists (and this is a story of today) then democracy does not replace it until some form of leadership appears. In the UK, we still have sclerotic centrist organisations that support the status quo and no vision or leadership for the 21st Century that would inspire the change that wealthier and better-educated citizens would aspire to.

The Centre going Forward

There is a massive danger that the completely centrist and statist system operating in China (as quoted in the first paragraph above) will, because of China’s growth and rapid ascendance, come to dominate political thinking the world over. Liberal Democracy is already wilting in western Europe as major decision-making is made by the unelected (in Brussels and for some time in Italy) with nations such as Portugal, Spain, Cyprus and Ireland ruled from the centre (read Germany). This is far away from localism and screams about the loss of Liberalism. The now-disgraced and jailed Chris Huhne remains a fan of the EU and the Euro – not a surprise that his background is social democracy not liberalism.

The 20th Century was a battleground between the forces of darkness epitomized by extreme Nationalism, Communism and Fascism on one hand and the forces of democracy on the other. Millions lost their lives and millions more suffered in gulags and concentration camps for democracy and the end of extremism.

The 21st Century battleground is more complex as the war between the different political forces of centrist and localism is splintered by the battles for resources and markets (and by the impending battle for climate and conservation) and between north and south and rich and poor and corruptors and corrupted.

Thatcherism knew only Hayek-style liberalism – an understandable reaction against socialism and the fear that fascism was created around that fear. In its place, The Road to Serfdom (Hayek’s best known work and Thatcher’s quasi-bible) postured a place for Government in monetarism and information provision – working to ensure that the market could work through transparent pricing. This was its limit and disregarded the essence of society (although Thatcher did not assert that society did not exist, she might as well) as did Hayek in his complete opposition to anything that wreaked of socialism – even social democracy was something that Hayek viewed as naturally leading to totalitarianism.

The problems that Hayek missed and that Thatcher and Reagan made possible (and that China is already risking) is that while socialism runs everything from the centre, the opposite camp of economic liberalism naturally tends towards a small minority at the top owning all the assets and all the decision-making apparatus. It is clear from the history of the last 30 years that the rich are getting richer while the poor get poorer (in terms of direct wealth and the supporting services offered to them) and that the dynamism needed in society from the other sectors is dying. Margaret Thatcher notoriously believed that there would be a trickle-down effect. That was nonsense and that is now proved.

Worse, a market-led economy which is based around numbers only (with GDP growth as the religion) leads to huge societal dislocations. The NHS is a valid case where management by statistics leads to deaths and the complete abandonment of human character – as evidenced by the maltreatment of the elderly. The opposite system (as in the USA) based on insurance only leads to only the wealthy having good medical services.

Worse, the motivation by quantity alone means that quality of life is abandoned in the drive for more goods. This is the market at work when left to its own devices. The market is driven by the simplest routes to success – numbers. We cannot be solely market-driven even if the market is the best form of driving entrepreneurialism.

People-centricity not Centrism or top-down

Society has experimented with many forms of government and economics. On the latter, we have a general agreement that market-led economics works best, but it is market-led not liberal or libertarian markets. Market-led means that other decision-making mechanisms are relevant wherever the market tends to extremism – such as domination of the market by monopolies or when the rich 1% control all the assets.

In the West, we believe that democracy works best because we all have a stake and are all equal under the law. Huge, developing countries like India and Brazil have similar philosophies but are riven by corruption. China is a centrist “civilization state” which directs from the core and will, at some stage, erupt into democracy. Russia is a centrist state by tradition and a mafia-dominated chaos.

Where we believe in equality under the law, we have to strike balances which Hayek / Thatcher / Reagan economics cannot achieve. This balance has to ensure that the drive is towards the individual but that society steps in to take out excesses. The balance is developed by society – with civil society and civil society organisations strengthened against the powers of the centre wherever they are.

This is far away from a socialist state where assets are owned and / or controlled from the centre and where equalization is the norm. Balance (whatever it is called) rewards entrepreneurship but would not award bankers or managers in the same way. It would not have made the reduction to 45% in the top income tax rate in the UK – whether or not this had been financially sensible in the short-term – as it shows a total disregard to society and the motivation of the great majority of its citizens that are struggling to prosper.

People-centricity and a focus on society using the best of the market and democracy but using brain power and ingenuity as well as technology represent the 21st Century as we struggle against top-down, centrism, climate change, resource degradation and inequality.

It is not what Margaret Thatcher intended as it requires not just the whip but also the driving force of human capability in all areas of society to see beyond the numbers or the desire to control from the top. It is leadership by motivation and inspiration.

With the death of Margaret Thatcher, let’s lay to rest trickle-down economics along with socialism and fascism.

When Bush Senior said “it’s the economy, stupid”, society was shelved.

Let’s talk society not just economics. Human brain power not numbers. Ingenuity not GDP. Well-being not hospital stats. Quality not quantity. Society not just economics. Real leadership, motivation and inspiration.

Trickle

Lying to Ourselves over PFI – Private Finance Initiative

Ashmole-Academy-817x389

PFI was Government outsourcing at its worst as the Independent has uncovered. There is a saying “There are no free lunches” but politicians like to pretend that there are.

PFI was a scheme to bring forward capital spending for hospitals, schools, care homes and others areas of under-funded public utilities without showing it in spending profiles – without being honest and transparent with the public about what it was doing.

Ally this to the cozy relationship between certain politicians and those in the building and construction industry and the inability of civil servants to really understand enough about the risks to dissuade politicians and the recipe was in place.

What we have is a burden on our public sector that will not impact the politicians that made the decisions but will have grave (in some cases literally) consequences for those who will be unable to be provided with the care they need as costs in our public sector rise over the next few decades as the bills are paid.

Back in 1998, when I was a Trustee / Governor at a local school in North London, I identified that the school needed to be rebuilt. It was crumbling, had asbestos, its electrical wiring was unsafe, roofs were collapsing and let in vast amounts of rain water and the school had to make use of temporary facilities that were installed 30 years before. There was a real danger that the school would be closed at some time in the future unless radical steps were taken and the only answer was to rebuild.

I made a presentation to the Board of Governors in 1998 where I proposed that, while PFI was an option being actively touted by Government as a panacea, we should not touch it. In Powerpoint slides, printed and shown on an overhead projector (we could not afford the computer equipment) I tried to persuade reluctant but well-meaning local people to reject the obvious answer because of “long-term high charge over 30 years” and loss of control over our own assets. The slide shown 17 years ago is below:

1998

The school, now Ashmole Academy in Barnet was built without PFI – although it took until 2004 to see it through. Eleven years’ later, the school (where I was Chair for 12 years from 2002 until 2014) remains in excellent condition and is an excellent school – one of the best in England.

When this Government began its enquiry into school buildings a few years’ ago, it commissioned Sebastian James and his team that produced the James Report.

This report, to which a few of us from the board at Ashmole made representations and met with members of the Report team prior to publication, did not condemn PFI but simply said:

Private Finance Initiative

A procurement route established in 1995, and more widely adopted since 1997. It is an important route for much Government spending on assets as it transfers significant risks to the private sector. PFI requires private sector consortia to raise private finance to fund a project, which must involve investment in assets, and the long-term delivery of services to the public sector.

As a result, PFI was allowed to continue on the basis that it meant to provide a “transfer of risks to the private sector”. For this transfer (which is really nonsense as the transfer was merely to get public sector spending off the books and into the books of the companies), the construction and service companies were handsomely compensated.

Not only that, but local and national public sectors were completely overwhelmed by the prospect of architectural excellence rather than practical building and this resulted in grandiose schemes that impress architects and win awards but ended up being hard to maintain, costly to build and a long-term drain on finances.

The lessor, now the School or the local authority is then stuck with a long-term agreement which it has to pay – at costs which are far greater than those which a Government could have loaned the money at – just to get costs off the books so no-one would notice that the financial burden was excessive while the new facilities were being built.

As to the risk being transferred, at Ashmole, we decided to take on such risk and then make sure that we had good contractors, good architects, good project management overseen by knowledgeable Board directors / trustees and good contracts in place. The risk was normal – it was on the suppliers not the school as we were the customers. The risk issue is nonsense.

The James Report is now forgotten but should have been a reminder that PFI was a major accident waiting to happen.

The Independent’s Report highlights not just the crippling costs of PFI but also the problems that are met when government (local and national) become swept away by those in the private sector who promise a free lunch and by their own lack of transparency and inability to understand business.

We entrust Government with much of our future but, while we condemn those that allowed PFI to take place in such a shambolic way, we should bear in mind that we may be expecting far too much in an area of greatest risk – the place where public and private sector meet. Knowledge and capability on either side are varied but neither really “gets” the other. This is why banking crises will always appear from time to time and why outsourcing of public sector often delivers much less than “expected”.

The place where public and private sector meet is a dangerous one and is less well understood than the specific sectors themselves. However, one way that such disasters as PFI could be reduced is through transparency – it was the desire to keep costs “off the books” that took us into PFI when extra expenditure on the public sector financed by low-costs Treasuries would have been a far better investment.

However, the pressure to falsely account was made by the pressure put on politicians by keeping government spending down even in the face of greatest need. It is why, even today, the NHS funding row is all about showing how the £8bn will be afforded in years to come when we all really know that we have very little idea what the UK’s finances will look like in three to five years. Good management of finances does not mean we can possibly be that accurate (no company really believes it knows how it will be doing beyond twelve months and beyond that, forecasts are but guides based on spreadsheets – the same is true of economies but with thousands more indeterminate variables).

So, PFI and similar comes from our desire to lie to ourselves and for politicians to lie to a public that is implicit in the lie.

We need to educate ourselves to reality by being more transparent.

Swing Riots to Zero Hours

 

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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).

 

 

 

 

 

 

“Blind Eye” Culture in Business

A good article written by Rowan Bosworth-Davies and posted on Linkedin today prompted me to respond favourably as follows:

This article has a shown a good understanding of “blind eye” corruption that is, unfortunately, at the top of many banks and many businesses. It could be argued that HSBC, Tesco, GSK and many others (from the UK alone) pushed bottom line growth at the expense of ethics and (often) the law while senior management profess no knowledge whatsoever of the problems that were under way in their companies.

When I wrote “Last Line of Defense” 15 years ago, I tried to explain in the book the process that a business (written there as a fictionalised US defense and aerospace business) went through that propelled it to commit corrupt acts while keeping the boss clean. Having worked in that industry, it was something that I had seen at first hand and 15 years’ later, it persists. Businesses are subject to major stresses and opportunities that drive them to the edge of acceptability.

For large companies, the penalties need to be huge to stymie the desire to do wrong and they need to be enforced. Prevention is the best cure, of course, but that depends on rigorous independent scrutiny by NED’s /Independent Directors that has not showed itself to work at HSBC.

It needs external auditors who should be required to carry out audits of potential corruption and the company’s adherence to processes that prevent it.

It requires leadership that drives in a culture of ethics throughout.

It requires a business that makes it clear that is has to know that each area adheres to its ethical culture and where there are no areas of secrecy – again, as is claimed at HSBC.

The banking crises and the problems at Wall-Mart, Tesco, GSK and elsewhere show that the problems that bedevilled the Defense and Aerospace industry (and may still do in some areas) is common throughout finance and elsewhere. This culture is one that has been tolerated by Governments – especially in the UK where prosecutions are not made if there is doubt of success. This is a problem in corruption and money laundering that makes top business people complacent. Only in the USA does there appear to be a drive to resolve this problem – at least via prosecution.

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.

So and so’s. How Some Banks Con

What does HSBC stand for? What do we do about it?

“so and so” – an undefined person considered beneath contempt

  • So, HSBC is shown by the BBC to have systematically organized illegal tax benefits for hundreds or thousands of its customers through its Swiss subsidiary. No surprise.
  • So, HMRC (the UK’s tax collection agency) has recovered only £135 million since that time in tax and penalties out of billions that are illegally saved each year. No surprise.
  • So, HMRC and this government agreed with the Swiss authorities (after the leaks about HSBC were found) not to prosecute except where the cases would be virtually guaranteed to succeed. No surprise.
  • So, the then Sir Stephen Green (now Baron Green), then HSBC’s CEO at the time is not talking and the Conservatives (via the chief Secretary to the Treasury – David Gauke) say that there is no evidence that he directly knew of what was going on. No surprise.
  • So, the Conservatives demand to know why Ed Balls, now Shadow Chancellor and then City (of London) Minister did nothing at the time. No surprise.
  • Anyone see the actions that the issues and finger-pointing provoke? Just politicians ranting at each other while the poor taxpayer – those “so and so’s” who have been squeezed mercilessly since the banking industry exploded in 2007/8 – is left with the bill – lower wages and austerity.

Meanwhile, the real “so and so’s” who should have been prosecuted and some doing time in prison are seen as outside the justice system – no longer within the law despite proof of a multi-billion pounds swindle on the UK.

So what?

Well, there has been extreme tax fraud – no-one denies it. Even HSBC accepts that they have had to make major changes in their banking practices – although, according to staff who have left HSBC this did not really make any progress until well into 2011.

Sir Stephen Green may well not have known the specifics. CEO’s of big banks (and most large organisations) are sheltered from the bad things going on but it is no defence to state that they did not know “specifically”. CEO’s are appointed as heads of such organisations and set the tone – the culture – of any organisation. As such, they are culpable for any major misdeeds that occur. In his excellent book on RBS, Shredded, Ian Fraser takes apart any claims that CEO’s can be said to have stood outside the fray. Maybe RBS was even worse than HSBC but senior management set the culture and reap the rewards of profits – Sir Stephen would have benefitted personally from the gains made through tax fraud in the Swiss subsidiary and, if he did not know what was happening (just as Henry II is alleged to have made the claims about Thomas Becket’s murder in 1170), then his lack of pro-activity in finding out would have been a joke. We don’t seem to have learned much in 845 years!

Anyway, if Sir Stephen Green knew nothing and is as innocent as a puppy, then how can Ed Balls (City Minister at the time) be accused of knowing everything by the people who then appointed Sir Stephen Green (now Baron Green of Hurstpierpoint) to Government in 2010?

Is there really a case against Ed Balls when the good Baron knew nothing, apparently? David Gauke sounded ridiculous on BBC Radio 4’s Today programme today because he was being so. Stupid political points were being made when the “so and so’s” who rule the world (the bankers) are freed from the rigours of the law (and any ethical codes) and continuously benefit.

Public Accounting for the “So ands so’s”

So, Margaret Hodge (the Chair of the British Parliament’s Public Accounts Committee – PAC) states that she will bring those responsible before her Committee. She states, quite properly, that the UK is not “aggressive enough” is tackling these issues. Even though the issues occurred during the previous Labour Government’s period in office, Mrs Hodge states very clearly that Stephen Green has a responsibility – he either “knew” of the tax dodges or was “asleep at the wheel” – quite right!

The PAC should now (seven years too late) point to what should be done: not just who is culpable but how the UK will recover the lost tax and how the UK will not stand for repeated situations. The USA fines banks billions of dollars. The UK (with the political establishment too much in hock to the banks and the civil servants and HMRC too timid and weak) does almost nothing but whimpers about no-one being responsible and it being too difficult to prove.

Which “so and so’s” are running the madhouse?

Isn’t it time that those who have suffered so much from the banks’ failures begin to see some recompense? This is not a desire for revenge but failures of this size have not led to a discernible change in this country’s culture or efforts to ensure such failures do not recur.

HSBC seems not to have been penalized for tax avoidance schemes and a culture that would not be tolerated even at Tesco. The UK has a need to change the way it deals with abhorrent schemes and aberrant behaviours. Politicians and those who work in the public sector need to feel the pressure that the public wants them to be under – pressure that needs to result in the defence of public needs. If it does not, then Syriza in Greece was an outcome of such lack of public interest and UKIP in the UK is another (although not quite the anti-aberrant banking behavior that is needed). If this Government does not ensure that the “so-and-so’s” aren’t allowed to run the country, then May’s general election in the UK will see an even more angry electorate ditching them.

13th Century – Magna Carta; 21st – a new “Great Charter”?

‘to no one will we sell, to no one deny or delay right or justice’.

Magna carta

On 15th June, 2015, Magna Carta will be commemorated. It will be 800 years since King John of England affixed his royal seal to the document at Runnymede – alongside the Thames in southern England. Magna Carta was an agreement between King John and English nobles that sought to overturn the singular rule by a despotic monarch and set the scene for the gradualist changes that resulted in democracy.

Magna Carta emphasized the rights of the individual over the state (even if those individuals in 1215 were just a few nobles).

That fight between the state (and those who want to capture the state for themselves) and the individual is unresolved 800 years later despite successive waves of change.

While in the West we consider the balance between the State and individuals to be rational and where the rights of individuals are upheld by rules such as The Human Rights Act, there is a perpetual seeking after new balances when threats appear or when certain groups capture more of the State. In the USA, for example, this balancing resulted in the splitting of responsibility between Executive, Legislature (itself into two parts) and Judges – which Fukuyama now calls a “vetocracy” which is more and more in the pay of key sectors that know how to manipulate decisions.

More widely, nations like China and Russia have never allowed significance to a balance between the state and individual rights. China, especially, has for 2000 years emphasized rule by law rather than rule of law – where the State (or those that consider themselves to be the State) is above the law. Xi Jinping’s recent attack on corruption appears to be but the latest attempt by one person and his clique to dominate the state.

More recently, like a laser beam to the head, the murders in France of journalists at Charlie Hebdo, of a Muslim policewoman close by and, later, at a Kosher deli, have highlighted that the individual and the rights of any individual are consistently challenged by states and those purporting to act on behalf of a state (or, in this case, an entity that stood before the state or that, in some cases, acts as a state – here, a religion).

The death of King Abdullah of Saudi Arabia reminds us of the total submission of individual rights in that country beneath the rule of one family – under the aegis of the Wahhabi sect of Islam.

Individual Rights

The battle between the State (whether represented by an elite or an ideology headed by a group purportedly representing that ideology) and individuals is a battle that clearly still rages. The rights of the individual against such groups are key to the different mindsets that distinguish real freedom from all other forms of government and governance.

The spectrum is a wide one but State (with a wide definition of that word) “ownership” ranges from political or quasi-political (such as China) to dictatorial (Equitorial Guinea, Angola) to religious (ISIS) to monarchic / theocratic (Saudi Arabia) to such “democracies” where voting is rigged (such as Zimbabwe and Afghanistan) to enable elites to maintain themselves in power.

This is not a battle between different nations but one where the rights of individuals are challenged by state or state-like bodies.

Whereas we may not see the actions taken against journalists in Turkey by the Erdogan regime to be in any way similar to extreme violence as has just happened in France, it is on that spectrum. Between states that defend the rights of individuals and those which violently oppress them (and subsume them to the so-called state or a religion) lies many variations – but, all can slide in the wrong way to extremism.

The extremists who claimed to be Islamists are one extreme; Erdogan’s government is dangerously edging in that direction as freedom of the press is a crucial embodiment of individual freedom.

Corruption at the Heart

Sarah Chayes has just published “Thieves of State”. It is an extraordinary book that, through her own experiences as a journalist and then on the staff of various military commanders from the US and in places like Afghanistan, enables her to show clearly how corruption is at the heart of so many national and international upheavals. From Afghanistan to Egypt, from Tunisia to Nigeria, governance has been geared towards corruption and becomes the mechanism of government.

Sarah’s aim is to show how the corruption flow in those countries is not top-down, but bottom-up, where so-called “facilitation payments” lead up the chain to larger corruption at the top – whereby nations recast themselves as mafias but, now, emasculating nations.

She shows how Karzai was able to do this in Afghanistan; how the military do this in Egypt; why this was the norm in Tunisia.

Individualism and the right of individuals to have justice have no place in such states. The state is simply a mechanism to suck the benefits of society through corruption to a few at the top who become extremely wealthy and some further corrupt benefits to those further down to makes ends meet. The vast majority of society suffers through lack of funds and the thieving of funds meant for development – for policing, for security, for health services, for education and for the rest of what we in the West would call normality.

This is why the Arab Spring promised so much but gave so little. Only in Tunisia has the promise started to be met. The strength of people in such a country is to be applauded and the recent election of Beji Caid Essebsi in a free and open election to be warmly welcomed.

Similarly, the people of Sri Lanka made a momentous decision at the ballot box by throwing out President Rajapaska and electing Maithripala Sirisena – a man dedicated to fighting corruption and nepotism.

Yet, as Sarah Chayes has shown, outside of these countries, either corrupt states remain ruled by corrupt kleptocrats or the fight back is via religion. Boko Haram and ISIS claim to be against the ways of the West as they see it – the corruption that is embedded in Nigeria or Iraq. At this extreme, even education is seen as the mechanism by which individuals grab the capability to enter into the corrupt system. Chayes views the connivance of the USA in that corruption (she mentions the suitcases of cash that the CIA provided to Karzai as but one example) as leading to the success of terrorist organisations in gaining credibility amongst many people in countries like Iraq because they see this as the only way out of the corruption that wrecks their lives.

Working on the disease

Yet, it is 800 years since Magna Carta – an agreement between a king that believed in his own divinely-given rights as usurping all others and a group of wealthy noblemen that wished to garner some rights to themselves. From that time, many of us have progressed to where individual rights are now enshrined in law and also in practice.

Yet, as recently as the 17th Century, England was riven with corruption – it was endemic. Samuel Pepys, the renowned diarist of that time, spent six years to work corruption out of the Royal Navy – which was crumbling under the weight of bribery and nepotism – notably, the sale of position and procurement. Although Pepys was not innocent of corruption himself, as his biographer, Claire Tomalin has written, his own honesty went some way to right some wrongs. England gradually, through the 18th and 19th Centuries, eroded corruption from its core but it was not an overnight demolition. Chayes’ example of Singapore and its ability to eradicate corruption almost overnight is a good case of a small nation challenging itself and succeeding. Elsewhere, it takes longer

Chayes focuses sensibly on the role of not just organizations like the military within corrupt nations but organisations outside like the CIA in understanding the drivers against the halting the disease of corruption and the complete erosion of justice. However, as the West (via organisations like the OECD and the US FCPA) progressed after World War II to a consensus on governance and how governance would become part of the stated requirement for development assistance, this has, more recently, been unsettled by the rise of China – which has appeared to care little for such governance considerations – notably in its dealings with African states.

This unsettling of the post-WWII consensus (despite Xi Jingping’s drive to eradicate the disease in China – which many suggest is more politically motivated than anything else) is a major challenge that can be added to Sarah Chaye’s list of issues to be assessed when developing an anti-corruption programme.

A “Great Charter” for the 21st Century

Sarah Chaye’s book puts corruption at the heart of the problem that besets the world.

  • While climate change (with its own problems of solution and understanding) has been seen as a world-wide challenge that has to be resolved;
  • while health concerns are the subject of huge technological research and financial resolve;
  • while economic prosperity is the subject for everyone at all times;
  • while nature conservation and the future of human life on this planet is a central consideration of all;
  • while terrorism is dislocating masses, murdering thousands, displacing millions – often through the guise of extreme forms of religion – and requires regular government action;
  • corruption plays a role in all the world’s key areas of collapse but has far less formal acknoweldgment.

From small-scale facilitation payments to large scale national strangulation, corruption inhibits and destroys.

The world now needs a charter for the 21st Century that marries the rights of individuals and justice (started with the Magna Carta in 1215) to the rights of individuals and communities to be unhindered by corruption. We now need a formal acknowledgement of its central corrosive ability that destroys nations, destroys security and completely disallows individual and community justice to take place.

“To no one will we sell what is not ours to sell”

“From no one will we take what is not ours to take”

 

‘to no one will we sell, to no one deny or delay right or justice’.

200 Years of Peace? 200 Years of Rockets and Bombs?

Dec 24, 1814 – Signing of the Treaty of Ghent between USA and UK

Dec 24, 2014 – Arms Trade Treaty

141215_TreatyofGhentpicii

While we have been commemorating the centenary of the beginning of the First World War, it is now exactly 200 years since the UK and USA signed the Treaty of Ghent signaling the end to the War of 1812 and the establishment in British eyes of American equality, firm agreement on borders and freedom to sail the seas and an agreement to seek the end of slave trafficking. The Treaty was deemed to be “an honourable peace” for the United States that many believe was a rallying call to its citizens – honourably exiting the War with firm borders and a fundamental view of nationhood. The UK and USA have been at peace (outside the odd skirmish) for 200 years and “The Star Spangled Banner” (written in 1814 to commemorate the bombardment of Fort McHenry in Chesapeake Bay by the Royal Navy) remains the anthem of the USA to this day – while its lyrics remain constant:

“And the rockets’ red glare, the bombs bursting in air”

During those 200 years, however, the world has been stricken with world wars and regional conflicts that rewrote borders almost everywhere. We live now with the consequences of borders drawn up by Empires that bore very little resemblance to the needs of the people within them. In many countries in Africa and Asia, nations were brought into being that collected many different peoples. In Africa, these people were then subjected to rulers that grouped them into so-called tribes (that Fukuyama describes as newly created) and have been the cause of much bloodshed since then. Nigeria, for example, was never a nation until it was created by the British and the Muslim north and Christian south are uneasy bedfellows.

21st Century Nationhood

The 21st Century offers both great opportunities and great risks. The nations that have been established during those last 200 years may, in many cases, bear little resemblance even after all those years to the people that live there.

  • We see this in nations like Ukraine where Russia is attempting destabilization through the indigenous Russian populations in the East.
  • We see this in a country like Nigeria – split between a Muslim north and a mainly Christian south.
  • We see this throughout the Middle East where the so-called Islamic State (IS) calls for a caliphate and an end to the “arbitrary” borders brought in by the British and others after the First World War, where Sunni and Shia are pitted against each other.
  • We see it in many African states, where colonial rulers attempted to develop states which had not existed before and where definition by nation is still hugely misunderstood.
  • We see it in China where Tibet has long wanted its independence and where the Uighurs still rally against Han domination.
  • We see it even in western Europe where, for example, the Scots only narrowly decided to remain in the UK after a referendum, where the Catalans are keen to split from Spain and where many northern Italians yearn to split from the under-developed and relatively ungovernable south.
  • We saw it in the Soviet Union which broke up into states that were better aligned;
  • We saw it as Yugoslavia split.
  • We saw it as Czechoslovakia split.

Multi-National groupings

 

The 21st Century has, however, witnessed a rapid drive to globalism so that the inter-relationships of countries with others are more complicated than ever. Whether it is China in Africa or the USA in Central America, leading economies are progressively more dependent on others.

This is now a world where multi-national companies are in competitive positions with nations. Maybe not in the same way that the British East India Company – which still had its monopoly intact at the time of the Treaty of Ghent in 1812 – but where agreements under way such as TTIP (Transatlantic Trade and Investment Partnership) between the EU and USA, companies are expanding their rights to take Governments to court under the ISDS – investor-state dispute settlement mechanism. Several countries (such as South Africa and Indonesia) are now opting out of such arrangements  which provide an equality between corporations and governments that could well be said to be anti-democratic.

Beyond companies, nations are increasingly engaged in arenas such as the UN, EU, NAFTA, African Union, ASEAN and multitudes of other multi-national engagement devices.

With the rise of the internet and social media, it is also far easier for individuals from opposite sides of the world to group together and do so within seconds.

Orwell posited three regional groupings with continuous warfare in his “1984”. 66 years on from when that book was written, the bipolar world of the US and Soviet Union became the unipolar world of the USA and now sees the rise of China fighting for prime position economically and others fighting for the next division placings within a world of fast communication and many forms of potential divisiveness and opportunities for engagement.

Big Brother may well be in place but it is more two-way as Snowden recently showed. As long as there remains a free press and the use of the internet is available, this will continue in ways that Orwell did not foresee (outside of states like North Korea and, at a lower level, China).

 

Shifting sands

It is not just in the Middle East that the sands shift as IS is fought by the Kurds and local national forces.

Sands continuously shift throughout the world as people group around a variety of causes, ideas and faiths and behind a variety of organisations and individuals. In a complex world, change is constant as our experiences evolve. However, it is clear that nations can no longer hide within themselves – each nation is exposed externally and internally as communication systems expand.

It took several weeks for the fact that the Treaty of Ghent had been signed to be relayed to those in the USA still fighting and dying.

Now, drones don’t just provide the means to inflict missiles on enemies but also provide data and information within milliseconds. Mobile phones provide instant photos and videos worldwide. The so-called Arab Spring was clearly accelerated by such media and took Middle Eastern governments by surprise as a result of that speed. In Tunisia, the results have been impressive for democracy even if elsewhere the forces for vested interests have re-emerged.

We do not know how humans will be organized in 200 years’ time. Issues like the environment and global warming will take precedence as the real (rather than promised) effects bite. These and other impacts will provide a changing environment that will, as always, require the most from human ingenuity. As we would appear to the world of 1814, the world of 2214 will feel very different to now – even if we can assume that technology will maintain our enjoyment of the planet.

But, what we assume to be stable – the nations that we are part of – will undoubtedly shift over this century and beyond. As rapid and increasingly ubiquitous communications become ever more the norm for most of us, and, after what may be a long period of difficult adjustment, there could be a tendency towards a better understanding of humanity beyond national boundaries and of our place on this planet.

While the Treaty of Ghent is hardly a cause of much celebration and it has been almost forgotten amongst the sounds of WWI commemorations, it was significant in that it signaled friendly relations between the most prosperous nation on earth at the time (the UK) and its wayward child (the USA) – two “united” nations that remain and prosper 200 years later – much of that owing to their “special” relationship that has matured during that time.

Today, 24th December, 2014, the Arms Trade Treaty (ATT) comes into effect. Could this be the positive event that will be celebrated 200 years from now? That Treaty has been signed up to by 130 nations – not even signed by Russia and China and still to be ratified by one of the signatories to the Treaty of Ghent – the USA. It took several months for the ratification of that Treaty by the US Senate in 2015 – owing mainly to communication delays. There is no such excuse in 2014/15. Let the ATT not be delayed any further – let nations not be swayed by the arms companies.

For now – let’s all enjoy the festive season and my best wishes for 2015!