Notes On The News
by Gwydion M Williams
- All Bosses Grossly Overpaid
- Korea – Still Shadow-Boxing
- Syria – the Kurdish PKK as the Last Bolsheviks
- Dogmatic Bottomism
The mainstream British media are all now bad-mouthing Carillion. Need I add to that?
Private Eye has nicely documented its warning from years back about the ‘Private Finance Initiative’. That it broke the rules of the traditional capitalism they broadly believe in.
Is that enough? Of course not. When one scam fails, another starts.
One scam after another is the reality economic ‘reform’ since the 1980s. Almost all reactionary: 19th century bodges dropped for good reasons. ‘New Labour’ was overawed by it, only because most of them had come from a childish leftist misunderstanding of real commerce.
Every single Thatcherite economic ‘reform’ was wrong. Even when addressing real problems, she got the wrong answer. For council housing, one famous complaint was that you couldn’t choose what colour to paint your own door. So, relax those rules but keep it public and cheap.
Before the 1980s, only a few hopeless drunks were homeless. All too ordinary nowadays.
Before the 1980s, you had to be subnormal or averse to regular work to be unemployed most places, though there were unemployment ‘black spots’. Now jobs are scarce even for the average would-be worker.
A tiny percentage of the homeless or unemployed have misbehaved. Likewise, a few of those who suffer in road accidents. But not most of them, in either case. Of course, the rich are among road-accident victims: they don’t push lies about it. The dream of a ‘property-owning democracy’ is unreal. The number of individuals with genuine economic freedom has diminished.
In a real society, as distinct from New Right fantasies, there is a finite amount of freedom. (The liberal-left have similar fantasies, and so are an ineffective opposition.) As I see it, ‘freedom’ is not a natural entity. It is an area of freedom that the society defines, and the state enforces. It enlarges as we grow more prosperous and secure, but is always finite.
From the 1980s, a more-than-millionaire class gained freedom at the expense of the rest of us. Even squeezing the Next Nine, the talented but much less privileged stratum just below the ‘Richest 1%’. Everyone also gained social and sexual freedom, which caused confusion. Clarity is badly needed. It would be a promising idea for Labour to explain that Tory promises to ordinary right-wingers were never met.
Before the 1980s, many young people bought houses. Now, deregulated finance has pumped up prices where there are jobs. Made the price almost zero where regional industries were neglected and died. Many will have to wait till their 60s to get a house. Economists, well-funded by the very rich, still insist that wealth comes from cleverness and hard work! Thatcher absolutely believed that she was restoring old-fashioned middle-class values. The values her grocer father genuinely upheld. She never saw that the real beliefs of the New Right were poison to those values.
To see the actual world-vision of the serious thinkers among the New Right, try ploughing through some tedious pretentious novels from the last years of American SF writer Robert A. Heinlein. Who wrote good stuff in the 1950s and 1960s – I’d recommend Citizen of the Galaxy and Orphans of the Sky as good reads in themselves. But he showed a romantic admiration for authoritarian bullies in the notorious Starship Troopers, which is also pig-ignorant about how real armies work. (Fans who experienced actual warfare in Vietnam mostly felt this.) Stranger in a Strange Land was briefly a much-praised work in the Sexual Revolution that Thatcher despised: nowadays correctly seen as heroizing another variant on the traditional male bully. Then beginning with Time Enough for Love, he wrote long pretentious slabs of life as the New Right Overclass would wish it to be. Including an utter contempt for democracy, parliamentary or otherwise. This is probably also the private view of most post-Thatcher Tories dependant on the votes of authentic old-fashioned conservatives.
Thatcher was never very clever. Smart enough for a degree at Oxford: but one function of universities is to sort original thinkers from those just good at passing exams. She was in the lower grade, and failed as a Research Chemist in actual capitalist industry. One potential employer rejected her as ‘headstrong, obstinate and dangerously self-opinionated’. Useful qualities when she got herself a rich husband and a career as a Tory MP.
And failed again. The chaos of the 1970s gave her a chance to be a genuine conservative, strengthening whatever was left of authentic Tory values. Instead she followed New Right doctrine, believing that markets were self-correcting. Believed the weird notion of an ‘Invisible Hand’ proposed by Adam Smith. Smith probably got it from seeing how growing commerce was undermining the traditional Christian values he despised. It was left to Karl Marx to realise that this same undermining would be fatal for the Enlightenment values that Smith favoured. That commerce would burst open any political and social system that let it run free.
The ‘Invisible Hand’ stayed invisible, or rather imaginary, in the vast process of privatisation and contracting-out. Making profits while destroying wealth was far too easy. Curing 1970s disorder did not in fact improve economic growth in Britain or the USA. Blighted it in Western Europe and Japan, the countries whose spectacular success prevented a serious regrowth of fascism in countries where it had been popular. Those same countries went on the win the Cold War – the USA itself had no clear advantage over the Soviet Union until the 1980s.
The Mixed Economy of the 1940s to 1970s was enormously successful. The state managed Tamed Capitalists and mostly forcing them to do something useful. Untamed, they exploited their wealth and inside knowledge to enrich themselves at the public expense. Used accounting fiddles to make highly run-of-the-mill managers look brilliant and deserving of vast salaries.
A deregulated system rewards cheating, much more readily than honesty. Various Ponzi or pump-and-dump operations give the impression of brilliance, without the problem of being authentically brilliant. ‘Smart money’, unless it encourages useful new products, can only make a profit at the expense of ‘silly money’. If some people get a lot more than they would for a regular investment, others must get less, or perhaps lose it all.
Enron was notorious. But only one of many: “Carillion made almost £150m worth of pre-tax profit last year on around £5bn worth of revenue. Despite a fall in profits on last year, the full year dividend on Carillion’s shares was increased from 18.25p to 18.45p. In fact, the yield on Carillion shares has remained at around 8.5% over the last few years, next to a FTSE100 average of 3.5%.
“Its Chief Executive, Richard Howson, made £660,000 last year, on top of a £245,000 bonus. Including pensions, benefits, and other ‘incentives’, his total reward stood at £1.5m. The outgoing finance director, who jumped ship just after Carillion issued its profits warning earlier this year, made £460,000, received a bonus of £140,000, and had a total pay package of around £1m.
“These extensive payouts belied the parlous state of Carillion’s underlying financial position. Over the last 10 years Carillion’s profits have continuously declined whilst its debt levels have skyrocketed. A firm should only ever take on debt for the purposes of investment; debt financing comes with interest, which has to be paid off regardless of the firm’s performance — so unless the capital is used to improve the firm’s productivity it will end up as an unpayable debt overhang… “Carillion’s business model rests solely on arbitrage — ‘the simultaneous purchase and sale of an asset to profit from a difference in the price’. We cannot nationalise Carillion because there is nothing in Carillion to nationalise. It doesn’t do anything. It is a fiction of a firm whose existence is predicated upon the largesse of a corrupt and financialised neoliberal state.”
Naturally, the mainstream British media bad-mouth the vast salaries of Carillion bosses. But few of them would say that such salaries would be absurd even if the companies had been as brilliant as they pretended to be.
I’ve previously mentioned that the brilliantly successful Chinese economy runs with top managers with much more modest salaries. If that’s capitalism, it is a version of capitalism that Labour needs to make the British norm. Naturally the Feed-the-Rich Economist magazine sees it otherwise:
“On an international basis, [state-owned enterprise] bosses are dramatically underpaid. The president of PetroChina, the country’s biggest oil company, earned 774,000 yuan ($112,000) in 2016; the CEO of Chevron, a firm of roughly the same market value, pulled in a handsome $24.7m.”
An average US worker gets 7 times as much as their Chinese equivalents. The Big Bosses gets 221 times as much. A Chinese boss gets 7.3 times their country’s average: their US equivalent 430 times as much. Which country is out of line?
“The only sensible strategy is to accept reality, however unpleasant it is, and to come to terms with North Korea as a nuclear power.” Thus spoke George Soros, at the recent Davos Economic Forum.
Soros may be part of a growing shift in elite opinion. Naturally, he did not join the growing complaints about gross inequality. A major cause is the parasitic finance he himself grew rich through. And he ranted about a Russian threat, because they dared defend themselves when US-organised riots hijacked Ukraine. But he has a sense of survival.
And so does President Trump. I can’t believe he fails to grasp that Korea, with authentic Weapons of Mass Destruction, cannot be safely attacked. Not wrecked in a ‘comfortable war’, as Iraq was after Saddam Hussein trustingly destroyed the few special weapons he had.
Trump may be genuinely ignorant about Climate Change. It is otherwise hard to see why he has so far nailed his colours to the mast about it being a liberal fantasy. He is more likely to marry Hillary Clinton than to be vindicated on that issue, and it will undermine his whole effort at restoring the populist white-racist values he inherited from his father. But he doesn’t know much science, nor respect it. He is part of a business community where they prefer profit and an evasion of probable blame. And it is confusing that Climate Change can include a bout of unseasonal wintry weather. This is down to shifts in the Jet Stream: but would he know a Jet Stream from a Jet Engine?
It has long been the case that North Korea could inflict vast damage and death on South Korea, and to Japan. Sadly, I doubt that any US President in the whole history of the country would have been much bothered. The biggest concern is that it would have included US tourists. But it now seems likely that North Korea could hit US cities with nuclear weapons, which cannot be risked just to be rid of an irritating hold-out of the pre-1980s order.
Just now, the two Koreas are being slightly friendly for South Korea’s Winter Olympics. Trump blusters as usual, but has probably given covert approval. Had it been President Hillary Clinton, would we be safer? She is not a blabbermouth like Trump. But she still believes that the USA can reshape the world in its own image and to its own selfish advantage. I’m sure Trump would wish it to be so. But he seems to know that it isn’t.
To finish off the declining Soviet Union, the USA sponsored Islamists in Soviet-occupied Afghanistan. People who grew into their most dangerous enemies.
I wish I could believe that a similar ‘blowback’ will occur with the USA trying to set up an enclave of Syrian Kurds. People who call themselves the YPG, but everyone knows that their hard core is the Marxist-Secessionist PKK. People who for years have been fighting the Turkish state.
Sadly, secularism and socialism have been losing out to Islamism everywhere in the Middle East, Turkey included. Even the PKK gets its ideology muddled with other values. And in Nepal, the Maoists backed a Communist Party that is actually Moderate Socialist to win the recent General Election. Unless one counts North Korea, with its ruling dynasty, the PKK are the Last Bolsheviks.
The Islamist movement is a logical follow-through of the ignorant hard-line version of Islam that Saudi Arabia spread through subsidised mosques and with US approval. Socialists have nothing like that. An interesting Marxist development in South Yemen failed completely, for reasons that remain obscure.
For now, we have the anomaly of the USA protecting the Last Bolsheviks. Which a US spokeswoman accidentally admits recently: “In an eyebrow-raising slip of the tongue, the US State Department spokesperson Heather Nauert on Thursday called the YPG in Afrin, Syria, ‘the PKK’, which is considered by Ankara as a terrorist group waging war against the Turkish state and is viewed as a terrorist organization by Washington itself.”
I had already decided that ‘Mrs Heather-Brain’ was a fool. On a level with Boris Johnson, who casually assumed that an accused woman with British citizenship was guilty as charged when negotiating with Iran.
A spectacular lunar eclipse on 31st January happened with the moon below Britain’s horizon. But other interesting lunar events are promised.
The Far Side of the Moon is special, because the moon is tidally locked to Earth and always shows us the same face. This has cycles of dark and light that are ‘days’, and also the lunar months for Earth. Likewise on the Far Side: talk of a Dark Side of the Moon is ignorant nonsense. But though the Far Side has been seen many times, beginning with an early Soviet craft, no one has yet landed there.
The problem is radio contact with Earth: the bulk of the moon blocks it. Not insoluble: “A [Chinese] communications relay satellite … will be launched in June of 2018, and will take up a position at the Moon-Earth L2 point, where it will be able to see both the landing site and Earth. The [robotic] lander will be launched at the end of 2018.”
This L2 point is behind the moon. A satellite can sit without using much fuel. The Far Side has a different geology. It would also be a wonderful place for a radio telescope, screened from the electronic chatter of Earth.
Also an excellent place for fiction. Arthur C. Clarke’s excellent SF novel Earthlight was long ago overtaken by events – his giant lunar optical telescope is far too small. He also failed to realise just how quickly female astronomers would emerge, having no women apart from secretaries in his science station. But it could be updated to be a radio telescope. The spy and space-war plot-lines would make an excellent SF drama, with a pro-peace message.
If Earthlight (TV Series) ever gets made, it would be by the USA’s liberal-left. I often find them admirable. Rather more often, I view them as hopeless.
Liberalism assumes a Nice Domination by the Anglo Core. And with Obama and the Clintons, not to mention Blair, they floundered when they had to choose between being decent or maintaining this Nice Domination.
I have the advantage of being certain it is an historic dead end. It was an important stage in the liberation and uplift of the human race. But always imperfect, tied to its birth from Enlightened Absolutism. It ranged from ‘Free (Mostly for Me)’ to ‘Free (Just Like Me)’, or occasionally ‘Free (Do It Your Way)’. It is literally unimaginable to them that in the Middle East, with its violent and alien traditions, a popular authoritarianism was the best force for shaping society the way they’d like it to be shaped. That it was foolish to destroy such regimes in Iraq and Libya, and good that Assad has survived in Syria.
Even believers in ‘Free (Do It Your Way)’ believe that ‘bottom-up’ forces are the solution to everything. It is of course very nice if people change without coercion – but historically, that is not reliable, nor always desirable. Graffiti are praised: most are mindless and some racist. Racism etc flourish on the Web.
Top-Down authoritarianism is sometimes unavoidable. To put it crudely, Bottom-Up isn’t always what suits your own bottom. That’s why I call it Dogmatic Bottomism.
I can also hope to be part of the next wave of beliefs. George Monbiot recently praised at least some forms of State Power as the only way to save civilisation.
The West tells everyone to adopt its own system of ‘quarrelsome democracy’. Rivals each say they should have all of the power. Have an election to settle it for the next few years.
In the West, it has normally been a game. Not at all democratic in Britain till the 1880s, and new social forces were slotted into existing parties.
And still failed in Ireland. A series of wars are likely to be settled by Northern Ireland Catholics breeding faster and becoming a new majority.
A quarrelsome democracy easily splits on regional and ethnic lines. The Scottish-English union worked mostly because religion cut across nationality. May now be failing.
In poor sad torn Ukraine, ‘Oranges Are Still a Rotten Fruit’.
A wave of justified complaints that Facebook and Amazon have too much power. But then what?
As I said last month, in a ‘free’ service funded by advertising, you are the product.
So, would they ban it? Subsidise serious media? Unlikely.
I’m old enough to remember when marriage was compulsory. Now New Zealand’s new Prime Minister being pregnant is everywhere reported just as a bit of good news. Only in comments on a Daily Mail article did someone complain she hasn’t yet got around to marrying the man she lives with.
That’s progress. Proof that Thatcherism was actually a flop.
Previous Newsnotes at the Labour Affairs website, https://labouraffairsmagazine.com/past-issues/. Also https://longrevolution.wordpress.com/newsnotes-historic/. I blog occasionally at https://gwydionmw.quora.com/.
 https://labouraffairsmagazine.com/past-issues/2015-magazine/2015-07-magazine/2015-07-ukraine-illegally-removed-its-elected-president/, https://gwydionwilliams.com/46-globalisation/ukraine-kievs-five-day-war-machine/