The Battle of Life

150706_Chartists    150706_AfricanMigrants

In 1846, Charles Dickens published one of his Christmas stories – “The Battle of Life”. Very few remember it now, although at the time it was as popular as A Christmas Carol. While it was a romantic story, it was also a metaphor for living – a reality that the mid-Victorians daily confronted – the battle of life.

As Peter Ackroyd noted in his biography of Charles Dickens:

“…the real importance of the story is to be found in its title. The Battle of Life was a phrase which meant a great deal to mid-Victorian Englishmen: it was even something of a truism in a world for which struggle and domination were the twin commandments, where the worship of energy and the pursuit of power were the two single most significant activities, where there was a constant belief in will, in collision, in progress. Darwin and Malthus both described “the great battle of life” and “the great battle for life”, the important confusion between the two phrases materially assisting the evolutionist’s case”

 

Samuel Smiles, maybe the exponent of what are known as “Victorian values” summed it up:

“The battle of life is, in most cases, fought uphill; and to win it without a struggle were perhaps to win it without honour. If there were no difficulties there would be no success; if there were nothing to struggle for, there would be nothing to be

achieved.”

Battles of life are still fought daily – for survival, for religious conviction, for self-esteem, for self-betterment, for the rights of others unable to fight for themselves, for equality.

In the 21st Century developed world, we often think that the battle of life has been won – we are economically well-off, pretty well educated and maybe complacent about our success. Yet, on a world scale, the battle of life daily persists and it is when we are confronted by the scale of that battle (as many British people were recently in Tunisia and as many were just ten years ago in London) that we are reminded that the Battle of Life goes on unabated.

In Dickens’s time, Britain was well underway with its industrial revolution and bestrode the world as an economic power house even if its working people were poor, with little chance of benefitting from the wealth creation. This gave rise to Chartism – working people’s attempts to gain access to power but this was dealt with by the oligarchy in power at the time in Britain. Our wealth generation was based on a world as supplier and this required a growing Empire from which to extract the raw materials it needed to feed the industrial base and to sell its goods – and a labour force here and overseas that provided it with unceasing supplies to make the machinery of the factories function.

We may have come a long way since then in this country but we remain pre-occupied with ourselves. Not much has changed in terms of Government and institutions since that time. We still have a House of Lords, we retain “first past the post” voting, London remains far wealthier than the rest of the country, we retain a certain disrespect for foreigners, we still want to play a major world role (although much of that is through our soft power status). We remain one of the five permanent members of the United Nations Security Council – still with a veto power. London retains its place as a major financial centre – which many believe assists our economy but many others rue its dependency on money laundering and the part it played in the 2007/08 financial meltdown.

Of course, the world is changing around us. China is now the largest economy in the world and while its per capita wealth is far lower than the west, the fact that it is so large means that, at the centre, it can aggregate massive amounts of money that can be used by Government. This is the real power of growth and economic vitality – the ability to amass funds centrally to spend on military might and security even as millions are still impoverished. On a smaller scale, North Korea still spends money on nuclear weaponry while so many starve.

In Africa and Asia, thousands try to escape the torment of their home countries to live aboard – leading to high-risk escapes on the high seas and many deaths and the recent scenes just across the Channel in Calais.

Industry is now global. The 19th Century British labour market that kept wages low and poverty high (and on which Marx and Engels – living in London and Manchester for most of their lives – based das Capital upon) is now also global – with an international labour market that has exactly the same problems as we had here two hundred years ago: low wages and desperate health and safety conditions (that have led to hundreds of lives lost in building the stadia for the 2022 World Cup in Qatar).

Meanwhile, it would be hard to extract much of this change from the recent General Election here. An election fought by the winning Conservatives on short-term tax breaks and a fear of the unknown – when that “unknown” was held to be Labour Party leftism and Scottish independence fears; when Liberal Democrats lost public trust over university funding; when UKIP gathered around 3 ½ million votes on the back of fear of the foreigners.

It was hard to feel motivated by the short-termism and fear-mongering that underscored that election. It was an election where Liberal Democrats were sent back to the 1970’s in terms of seats won and where they lost more votes in one election than could have been believed and when many argue liberalism should be the 21st Century political answer to all the changes and aspirations of a 21st Century world.

21st Century Aspirations – Economic Freedoms and Responsibilities

It has been educational to listen to the two Liberal Democrat contenders for that party’s leadership recently. Tim Farron and Norman Lamb, two out of the eight remaining Lib Dem M.P.’s in the House of Commons, both appeared before at the Institute of Public Policy Research at separate events.

They spoke and answered questions on a range of issues but the focus was on what liberalism meant to them.

Tim Farron told the meeting at the IPPR that he bases his liberalism on five key values: Freedom, Equality, Quality of Life, Internationalism and Reform. In his manifesto, a sixth value was added – a new economy.

Norman Lamb spoke about similar values and his experience of working as a Health Minister.

Both noted how their vision was formed by Jo Grimond and the debt they (and we) owe to William Beveridge – the man behind social services and the NHS, who identified the “five evils” of society as of squalor, ignorance, want, idleness, and disease as the drivers behind the need of government to be involved in society to a greater degree than before.

It is interesting to remember that Liberal have had to move a long way from the idealists of the 19th Century. While the Tories represented the landowners then, the new middle classes of that Century (who were behind the Free Trade movement as were the Liberals of that time) were not looking towards improving the lot of the common man (and certainly not women). The Factories Acts were gradually introduced throughout that Century as a result of pressure from outside Parliament and often against the deep-seated reservations of the capital class.

Liberals of the 21st Century now understand what J K Galbraith called the “social balance” between the public sector and the private to ensure that needs are met but that individuals are still able to model their own lives within a society that does not deprive them of aspiration and opportunity but actually seeks to improve those life chances. Liberalism also aims to ensure that the individual that lives most of their lives in “civil society” are able to do so with real freedom to enjoy and be fulfilled in that life. Life should not be just a centralized, top-down socialism nor a numbers-driven economics-only rat-race. Life is a complex mix where wealth creation is important (wealth being not just quantity of life but also quality) and so is ensuring that opportunity (such as good education, health and housing) is available to all so that individuals can become the most that they are able. When we also use our abilities on a global stage and enshrine this within the crucial notion of freedom (to believe in and voice your own views without fear), this is 21st Century Liberalism.

Because both Tim and Norman understand the critical elements of liberalism (something central to Nick Clegg – as he understood in a speech in 2012 to …but never reinforced outside that so that people would know what they were voting “for”), it is difficult to separate them on the basis of views held.

For me, the issues come down then, to this:

If Liberals want to become a force for real good in the UK (and world) and want to play a political role and not just be seen as a pressure group, they do not have to be just great campaigners, clammering for redistribution and fairness, but they have to ensure that there is a Liberal Economic Philosophy that enough people believe in.

Liberal Economics for the 21st Century

Having completely bought into all the other values of liberalism, it seems to me that the Liberal Democrats (and Liberal Party before them) have sometimes not grasped the central perceived need of most people – economics and economic freedom. The industrial revolution embedded the zeal for wealth creation amongst the capitalist class that has since become the underlying basis for how people see their lives.

Increased wealth creation has led to better health for those who are fortunate enough to live in the economically developed world and to longer and better lives. Illness does not mean death as it did in the 19th Century for us in the UK. Food is plentiful (although food bank use is on the rise) and we do not suffer from stunted growth as happens too frequently in the developing world – we suffer more from obesity. Education is open to all (albeit in different and not yet good enough for all). Our streets are relatively clean and we have a police force that is designed to serve and a set of laws that are mainly enforced without social stress. We have freedom of expression and democracy.

Much of this is down to wealth creation so that we can be said to be well up Maslow’s Hierarchy of need.

However, inequality is now increasing and the challenges of this country in a world where countries like China are now beginning to dominate economic growth are substantial. The impact is serious in areas like London where housing costs are so high because of the demand from those from overseas – many thought to be laundering questionable money through the London property market.

We also see scenes in Calais on a daily basis how those countries that are not providing economic freedom to their citizens – through corruption and war and mismanagement that leads to hunger and illness – drive their own people from those countries. This is an international problem – African migrants

So, how could Liberal Democrat economic philosophy be developed to tackle the issues that impact everyone – which everyone believes to be crucial to their lives and those of their families and within which the other values of liberalism can be seen to flourish?

We have to focus on responsible wealth creation in this country and overseas that marries the need to galvanise wealth creators (small businesses, risk-takers, new science, co-operation between public and private sector) along with a focus on great education that motivates and provides opportunity, understands how we develop sustainable growth (that assists the environment and connects us with it – not just seeing it as “natural capital” in the way that the 19th Century mill-owner saw workers as capital) and international. In the latter, we have to understand how the UK is a seller to the world and a buyer to the world but also part of that world. That world needs to ensure that the poorest are given opportunities and that sink-holes like corruption are eradicated. That equal playing field that liberalism feels so deeply is now an international playing field.

Economic freedom (the ability to grow our wealth) in a responsible way should be part of any liberal philosophy. But, it is not the 19th freedom to trade freely – it has to be a freedom with responsibilities attached. Together, economic freedom with responsibilities would help us win the battle of life that we all face.

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“Farewell, fair cruelty” – The Age of anti-welfare

The “Safety Net”

Ian Duncan-Smith has introduced a new system of welfare payments in the UK that seeks to better link payments to the sick, disabled and those out of work to their ability to find work and get paid for work. His (and his government’s stance) is that since the introduction of welfare payments (brought in by the post-WWII Labour government following the Beveridge Report in 1942), the world has changed and welfare has become a “right”  that needs to be changed.

Churchill had previously voiced his view that a safety net be provided to all those in society who fell on hard times. In 2006, Greg Clark  (now Financial Secretary to the Treasury) urged the Tories not to be caught up in Churchillian rhetoric as: “The traditional Conservative vision of welfare as a safety net encompasses another outdated Tory nostrum – that poverty is absolute, not relative. Churchill’s safety net is at the bottom: holding people at subsistence level, just above the abyss of hunger and homelessness.”

Mr Duncan-Smith, according to Peter Oborn, writing in the Daily Telegraph “is animated by a profoundly Christian vision of free will, redemption, and what it means to be human in a fallen and imperfect world.” It is this vision that hearkens back to Churchill and pushes this coalition government in the direction of the 19th Century.

Individual vs. State

The balance in any modern, developed State is to balance the interests of individuals and State (and also at least think through the requirements and abilities of the third sector / civil society). While, as Oborn writes, Margaret Thatcher ignored the welfare system and the NHS by refusing to substantively alter them, and while Blair and most obviously Brown made them more a political football, Duncan-Smith has taken a view that individuals must be given the incentive to work and stand on their feet.

This fits well in a society still in a state of shock following the banking crisis of 2007/8 and where our sovereign debt position is a massive risk for our future.

It fits with Tory doctrine of the 19th Century (although not with the post-WWII consensus that MacMillan and succeeding Tories espoused).

It fits partially with the Liberals (although not necessarily the Social Democrat wing in the Liberal Democrats) in that the balance between individuals and the State should always veer toward the former – although Liberals will usually point to freedoms and open society issues rather than the “incentives” that Duncan-Smith talks about.

Welfare Stands Alone

The problem is that while it is possible that Duncan-Smith has a mission and feels genuinely that welfare needs to be changed, the world is not just about welfare. It is also about economics and opportunity. Attempting to change welfare benefits (which will naturally come down hardest on the weakest sections of society) without successfully managing up the fortunes of the wider economy and critical areas such as education (a crucial force for change and a massive “enabler” in ensuring people have the skills and capabilities that allow them to stand on their feet) cannot work.

Even Samuel Smiles (the 19th Century author of Self-Help) said: “I would not have any one here think that, because I have mentioned individuals who have raised themselves by self-education from poverty to social eminence, and even wealth, these are the chief marks to be aimed at. That would be a great fallacy. Knowledge is of itself one of the highest enjoyments. The ignorant man passes through the world dead to all pleasures, save those of the senses… Every human being has a great mission to perform, noble faculties to cultivate, a vast destiny to accomplish. He should have the means of education, and of exerting freely all the powers of his godlike nature.” (my underlining).

Government is split into different areas of control and it is a real dilemma. If David Cameron really wishes to go back to the 19th Century and bring in welfare reforms that attempt to force people to work or lose benefits, then the same Government has, at least, to generate the capabilities that will allow them to do so.

This means that George Osborne and his Ministers have to attack our substantial problems of growth (or the lack of it) while we seem to be entering a Japanese-style lost decade.

This means that Michael Gove (himself on a mission) has to ensure that those areas of greatest need in education (which are the areas most adversely impacted by Duncan-Smith’s welfare reforms) receive the resources (investment and brainpower) that they need. This could, for example, mean forcing top quality schools (from private and public sectors) to link up with worst performing schools in the country much as Lord Adonis tried to do voluntarily as he describes in his recent book “Education, Education, Education: Reforming England’s Schools”.

Of course, this means jointly pursuing policies as a Government rather than addressing individual issues one at a time because individual Ministers want to make a name for themselves.

Of course, this is the job of a Prime Minister (and in a Coalition, the Deputy Prime Minister) to see that the key decisions of each Ministry complement each other. They have failed to see how disjointed it all is and failed to understand the changes that have been put in place since the 19th Century that repels the drive to go back in time.

Back to the Poor Laws

There is a real danger that the failure to articulate a vision by our politicians, allied to an economic position that is perilous is leading the UK (or at least England) back to the Poor laws as articulated in 1834. This was the age of the workhouse as described so well by Charles Dickens. The 19th Century zeal, which Duncan-Smith is bringing to bear, is allied to monetarism and austerity together with an education philosophy which focuses on individual schools (Academies) without much understanding of how to best ensure the worst ones thrive.

This means that a “perfect storm” is likely to erupt: an economy of austerity, a goodbye to welfare and a lack of educational opportunity where it is needed. This may be seen in the future as a Government that forgot the riots of 2011 much like the riots against the Poor Laws in the 1830’s.

Modern times deserve modern remedies and better leadership

The challenge for any Government in a post-2007 world is to sufficiently understand the role it places in providing the underpinning for a thriving society. This is not the old Tory rule from the top – where the top 3% get the resources and everyone hopes for a trickle down effect. The class system in the UK – no longer just three – may have been dispersed but the political class may not have yet picked up on their duties.

Whether or not many welfare recipients have pro-actively taken themselves out of the work markets and work ethics, Government’s job is to enable them to come back into the market. This means motivating and educating at the same time as gradually changing the rewards structure.

Tell a workforce that they are pathetic and they will become so. Tell people that they are work-shy scroungers and they will not co-operate. Cameron and Osborne (and Gove) understand little about leadership. They want to show leadership by forcing issues not by motivation (or nudging – I understand they read that book – shame they never read any on good leadership) in the same way that the Upper Classes ruled in the 19th Century.

Modern times need a government that motivates and has a vision that is constant throughout – not a bunch of managers with no sense of leadership.

This should mean that rhetoric changes to encouragement not estrangement in a way that Miliband’s desire for “One Nation” (Disraeli) is meant to work. Within that rhetoric (maybe the start of some vision), the economic policies of sustainable growth have to be applied not just hope that austerity will somehow work and shift us to private economy growth; within that rhetoric, an education system that drives the worst schools to function along with the connectivity with local people (including parents); within that rhetoric, a welfare system that rewards such involvement in the community – not just salaried work.

The latter means that people should be able in a modern society to be able to work in a variety of areas – within civil society – rather than for a pittance in a salaried job. This also means spending time with kids where the worst performing schools are victims of poverty and estrangement of parents and local leadership.

This is joined up Government where each part of government takes fully into account what is happening in other sectors of society. It is not what we have now.

Farewell, fair cruelty was said by Viola in Twelfth Night – Viola was trying it on – a woman pretending to be a man.

Duncan-Smith is worried about welfare beneficiaries who shouldn’t be getting welfare – people who are not what they say they are.

This government is pretending to be showing leadership – it isn’t. It is merely repeating the mistakes of their forebears from 200 years ago.

Farewell welfare, indeed. We run the risk of becoming an anti-welfare society that alienates huge sections of it while the rest of government stands aside. Time for some vision and leadership and for this government to understand the impact one part has on another – Duncan-Smith needs Osborne and Gove to help him succeed.  Malvolio’s experiences in Twelfth Night may also be educational for Ian Duncan-Smith – he was also a man more sinned against than sinning.

Hard Times – from 1854 to 1504 (Dodd-Frank)

Masters and “Quiet Servants”

Charles Dickens wrote “Hard Times – For These Times” (usually known as “Hard Times”) in 1854. This was a bleak analysis of mid-19th Century factories and the mechanistic drive for material reward.

The world of the Industrial Revolution saw immense material improvement within a 19th Century mindset that saw business develop on the back of “resources” – whether they were natural resources (like coal) or human resources – Dickens’s “quiet servants”. Resources were resources and how they were discovered, whose they were, the conditions under which they were mined, how they were shipped or the conditions under which they were placed into the manufacturing process were not much of a consideration.

Britain and other developing nations of the time grew wealthy on their own drive, ingenuities, financing and trading and manufacturing instincts but the whole process would have collapsed if access was not obtained to raw materials from the rest of the world and the use of “human materials” from all over (including their own countries). The terms “human resources” is still with us along with natural resources – but the “quiet servants” grew louder.

Gradually, from 1833 when Britain enacted laws that children under nine should not work in factories, throughout the second half of the 19th Century and into the 20th, our human resources (people working in factories and mining, for example, in the industrializing nations) campaigned and secured rights over income, health and safety, length of the working day and age restrictions.

Developed countries worked out that, to work well and succeed, we had to develop ways that we all could share to some extent in the benefits that material gain provided. This is the basis of free and fair societies based on successful economies.

From nation to global

The last thirty years has seen a vast shift from developed nations using the rest of the world merely to buy from and sell to, to a shift to manufacturing and now development and R&D throughout the world. Trade has grown internationally and the so-called integrated “global economy” is in place. We are no longer merely the industrialised west and the under-developed rest, but an inter-connected web of nations within one, world economy.

Yet, the strains are clearly showing. Allied to the vast changes in internet communications (similar to the vast increase of communications that shaped 18th Century politics and the 19th Century – the telegraph and the phone), all peoples of the world now see themselves as part of this world (or global) economy in the same way that 19th and early 20th Century factory workers saw themselves vis a vis factory owners. They then, understandably, demand rights and safeguards.

This is now happening on a world scale as we develop our global nation (economically).  The changes are profound and, if done properly, will be of enormous benefit.

21st Century Responses

This week saw the approval after two years of the US SEC (Security and Exchange Commission) of articles 1502 and 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The two measures could have major implications for all of us in that (properly implemented) they set a real standard for the globalized economy in two, crucial areas:

  1. the willingness of all of us to buy items cheaply no matter how the raw materials were obtained
  2. the willingness of all of us to buy items from wherever in the world, no matter what corruption was employed in their provision.

Article 1502 refers to the mining of key raw materials in Africa such as tantalum, tungsten, gold and tin. It will (after an implementation period) require all suppliers and manufacturers to state that their products do not contain raw materials that financed war or bloody conflict. So many years after blood diamonds were headlined, there is now a statute that demands that companies step back and consider what they are buying. Manufacturers that buy such raw materials have had to count the cost of reputational disaster if they continue to sidestep basic human responsibilities in this global market. Now, there will be a legal imperative in the USA.

Article 1504 is the Cardin-Lugar rule which sets rules for country-by-country reporting of companies in the extractive industries concerning the revenues and profits they make in all countries where they do business (on a project by project basis).

Both articles require all companies that are listed in the USA to comply (although not immediately), wherever those countries are based. The European Union is expected to pass similar laws.

The implementation of the two articles will help to drive change on a global scale, where individual nations (e.g. where the resources are extracted) are unable to do so. Why? For several reasons:

  1. Developing nations (especially resource-rich and economically poor) are prone to corruption and often unable or unwilling to enact these laws themselves;
  2. Developing nations (especially in parts of Africa) use resource revenues to fund conflicts and wars;
  3. Corporations operating in those areas need to show global sensibilities – where treatment in their overseas subsidiaries and employees is brought up to levels that we believe are credible and reasonable. It is hard to do that without legal change as competition is too high to expect corporate ethics (whatever that means) to work on its own.

To Ayn Rand libertarians Dodd-Frank is an economic travesty and many in the US are waiting for Romney and Ryan to get elected and reverse these laws. That would be the travesty. It is enough that in developing nations, the gaps between the rich and the rest are widening; it is enough that nations like Greece are now collapsing economically. There is potential for real strife in nations where inequality is too widespread.

But, we now live in a global economy where we are all dependent on each other. That means simply that best practice (that works on a national scale) has to be introduced globally wherever feasible. The intricate balance of trade, manufacturing, design and the need for natural resources (as well as the need to work together on climate change issues or disease control, for example) dramatically increase the need to treat the global economy as one economy – which it is. This means that national rights have to be respected but that is not enough.

Article 1504, for example, takes the trust element away from many nations like Equatorial Guinea, where the leadership is a kleptocracy and where riches from oil revenues do not go to the people in any meaningful form. Country by country reporting will, eventually, put an end to opaque deals between companies and those who have taken over the ownership of natural resources in those countries by showing transparently what profits are made and revenues generated on a project by project basis. Citizens in those countries will begin to be able to see how those revenues are used or not. Information is valuable and a first step to more equitable conditions.

21st Century Ethics

As we enter the fifth year of the post-sub prime recession (with economic collapse in Greece and high youth unemployment in Spain), we remain much more concerned with ourselves than with people and nations thousands of miles away. The change that global economics has wrought, however, is that we can no longer ignore the plight of those so far away even if we (wrongly) wish to do so. Their plight is ours just as the impoverishment (economically and educationally) of our inner cities is a blight and our plight.

The Chinese view things differently, of course. A thousand years of relative impoverishment has left it hungry for economic growth and its hunger leads it to plunder the natural resources of Africa. China’s legalist centre, its Confucian heart and its loathing of western imperialism means that it is content to leave governance issues aside. Its own internal corruption (the corruption of a centrist and legalist government, where bribes are the common currency of the status quo) means that it is unlikely to require good governance in return for its acquisition of raw materials. In fact, its non-linkage of governance requirements gives China a distinct trading advantage in Africa.

It is to be hoped that this is a short-term business expedient and a long-term mistake for the Chinese. Just as the best manufacturers in the 19th and early 20th Century were leaders in improving conditions for their employees (notably, Henry Ford who wanted his own staff to be able to afford to buy his cars) and just as the US spearheaded safety rules in the 20th Century, it is likely that the best companies will understand that improving the safeguards overseas (whether in their own companies or those of suppliers) will be important, medium-term investments.

Reputational loss is now potentially huge (as Apple realized when suicides at one of its biggest suppliers in China, Foxconn, began to rise and changes in working practices were required by Apple). The raw materials that we require for so many of the goods that we buy are obtained under horrendous conditions in Africa. It is not just blood diamonds but all those naturally occurring elements that the SEC has just regulated into law.

In addition, the country-by-country reporting will shine a light on the regimes that take in billions of dollars of income and disburse so little to their people. Pressure will mount from outside and inside.

Organisations like One, Transparency International, Global Witness and Enough and the Publish What You Pay coalition deserve huge credit for a relentless drive over many years to enact such positive changes. The US Congress deserves huge credit for bringing it into law in the powerhouse of the US economy. The EU should follow and they should all work within the OECD and elsewhere to ensure that these measures, providing an ethical underpinning to the global economy, are made global.

We live in a globalized economy and comparative advantages should be developed through intelligence, hard work and ingenuity – not via the impoverishment or hardship of our global neighbours.  The bringing into implementation of Dodd-Frank’s articles 1502 and 1504 suggests that the global economy is waking up to the fact that our “quiet servants” deserve respect wherever they are – close to home or further away. The global economy (and climate change and air travel and the internet….) means we are all neighbours now.