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Roger Warren Evans
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item0014 18 September 2002Socialists gain ground In this week’s Swedish Elections the Social Democrats consolidated their position – in the face of a “Liberal” Right-wing opposition playing the race card in developing its “tougher” immigration policies. It was a magnificent victory, raising the socialist vote from 36% to 40% of the poll. But these are testing times for all liberals, of whichever Party. It is a time to keep a cool head, and a cautious tongue. And to understand just how and why the present saga is being acted out. This week in Germany, the Christian Democrats are attempting to play the race and card, in Sunday’s upcoming General Election. Happily, in this week’s Macedonian Elections, the nationalist Government was defeated by the Socialist Opposition. It’s been a good week for socialists, with good prospects also of a win in Germany on Sunday. But the conduct of these elections clearly indicates that, with popular anxieties and insecurities rising, the search is for a scapegoat – and as so often in European history, the scapegoat is being found in the stranger, the traveller, the foreigner, the immigrant. In countering that awful process, there are two things to be done. First, minimise the originating anxiety. Anti-foreigner felling is triggered, in my view, by other anxieties, other fears – the foreigner is merely the scapegoat. An exaggerated bogeyman. The Swedish SDP leader Goran Persson spoke eloquently while on the stump to a crowd assembled at Stockholm Railway Station in the closing days of the Swedish Election. His words were reminiscent of Neil Kinnock’s great anti-Tory speech “I warn you not to fall ill…” –
Lesson One then, is “Attack the underlying problem, not the scapegoat”.
Lesson Two is one which Labour leaders must learn, and learn quickly, in particular the pivotal Minister David Blunkett.
“Virtual Capital Reinsurance”
That is a gentle way of putting it. For it is a dishonest deceit, a fraud upon the shareholders. The immediate effect is to reduce the reported contingent liabilities of the life insurance company, making the remaining figures look much better. But that is not the reality. The small-print of the re-insurance policies ensure that these dicey policies eventually find their way back onto the accounts of the originating company, by circuitous routes. In the meantime, the shareholders have been given a much rosier picture of their company’s health than should have been given. None of us with Board-level experience can remain ignorant of the dishonesties which are accessible to unscrupulous Directors, particularly if aided and abetted by pliant auditors. As a lawyer and company director, I am keenly aware of the institutional fragility of the “company limited by shares”, whether in private form or when quoted on a public Stock Exchange. Root-and-branch reform is needed – although there is no sign that Patricia Hewitt has any stomach for the fight.
Pyrrhic Victory ISTC, the iron and steel union, won an undoubted victory this week for its members, against Caparo plc. Caparo was just one of many firms which have suspended their final-salary company pension schemes, replacing with the pot-luck system of capital payments. Under the old schemes, employees were guaranteed a pension related contractually to their previous salary, by some comprehensible formula. With the new pensions, the employer merely undertakes to invest contributions on behalf of the employee, and give back the resulting lump-sum upon retirement. Under the Caparo settlement, all existing employees will effectively retain their rights, with the company retaining the right to down-frade future recruits. That is the best that ISTC could get, and they are justifiably pleased. But, but... Caparo was a special case. The man behind Caparo, Swraj (now Lord) Paul, is a kindly avuncular man, a long-time Labour supporter, a committed socialist, and rightly proud of the success that he has achieved in UK industry. I remember him well, from my days in the Labour Finance & Industry Group, when he first entered the Lords. He will have been mortified by the public and political reaction to Caparo's action - particularly as other companies are doing the same thing every day of the week. He will have been keen to see an honourable deal done. And the ISTC deal will certainly strengthen the hands of those who argue that many employers have been in breach of contract by withdrawing their pensions promises in mid-term. So my unqualified congratulations go to the ISTC. As socialists, however, we should not go down that path. The present cancellations are indeed a scandal, an oppression of those least able to look after themselves. But what did we expect? That the corporations would behave like the Mothers' Union? The truth is that the corporations constitute fragile, insubstantial partners in high matters of state. We should not rely on them to deliver, in any key public policy sector. Only the State can give, to ordinary people, the secure assurances they yearn for, in seeking to avoid the threat of poverty in old age. The only satisfactory socialist solution is the creation of a new, universal, decent Old Age Pension, at 30% of national average wage. That cause was advanced, during August, by the publication of proposals for a redistributive "Universal Protected Pension". The State must take the responsibility for collecting contributions and paying pensions, using a combination of pay-as-you-go and investment methods. My hope is that the trade unions, while pursuing their members' interests aggressively post-Caparo, will also throw their weight behind the creation of a new era of pensions security - New Labour, New Old Age Pension - that's what I say. Drop me a line < Back to Home Page
Sunday 15 September 2002 Hi Uncle Roger I've been enjoying your website – though puzzled why your Hit stats don't show up my visits from the USA – maybe it’s the fact that I am going through an Intranet system that disguises where I am viewing from. On Iraq, there is one key issue - How do you manage the risk that Saddam Hussein could attack anyone with chemical/nuclear weapons? If you can manage that risk then the general public would definitely be opposed to war with Iraq. All these other theories as to why the US and the UK would want to go to war with Iraq become completely irrelevant if you can answer the first question. I agree that Mark Hertsgaard's article is spot on, it probably does stem from the Bush comment about either being with us or against us. The media wants to show it is with Bush otherwise it will be accused of being unpatriotic and being patriotic is incredibly important to Americans at the moment. There are stars and stripes everywhere, there is even one flying over our balcony courtesy of our neighbours on the floor above. Love to Auntie Elizabeth Regards Oliver
- great to hear from you .... and it's a good question. If there is a “threat” from Saddam Hussein, how is it to be managed? My answer is that I do not consider the nuclear - chemical --biological "threat from Saddam" to be sufficiently great to risk the greater conflict that would be triggered by preemptive US action - even if the Security Council, under the present duress, were to agree. Such aggression would send the worst possible message to the international fraternity that peaceful diplomacy was no longer "on the table" as the method-of-choice - the only relevant language of international relations would be seen to be main force - just as Israel has already used the American "war on terror" to justify their Palestine attacks - that would all quickly become the common coin of international relations, with everyone claiming the right to follow the American example. It is true that a new UN Resolution would help to contain the precedent - but remember, it would only be a vote of the Security Council, not the UN as a whole... Whether or not one "uses war" as a means of resolving ANY issue is ultimately a matter of balanced political choice - even if one is attacked oneself. I am not a pacifist, and I accept that the use of force is justified on occasion: the Gulf War action was justified, because Saddam actually attacked Kuwait, although there was the issue at the time of misleading US diplomacy which suggested that they would not intervene. Afghanstan was no success. As a means of "finding the 11/9 Al’Quaida terrorists" (the original war aim) the attack on Afghanistan was a woeful and destructive failure - some 4,000 civilians killed - yet all the victories against Al’Quaida to date have been intelligence/policing victories, and are likely to remain so - the FBI says that it should have been given a bigger role in the response, and they are obviously right. The Afghanistan aggression was a terrible error of judgment, even if an "understandable" error, in the frenetic political atmosphere of the time - both Bush and Blair lost their heads under pressure (which is not a good omen) - the USA wisely got out very soon, and the Taliban feuding has returned - one faction has been exchanged for another, and the cause of decent, liberal government in Afghanistan is hardly advanced at all - I cannot see any prospect of holding elections, in the near future. It would have been much better for US/UK to "cool it" and use ruthless and comprehensive investigative methods - they are the ones that are now paying off now, after all. There have been no Al’Quaida arrests in Afghanistan. Saddam is a vicious dictator who uses the manipulation of war and the aura of war, and the deployment of military forces internally, as his means of staying in power – that is his political language - he enjoys no democratic legitimacy, and can only stay in power by playing the war card, keeping his whole society on a permanent war-footing, on rationing, blaming all the hardship on "foreign powers" - that is simply his method of ruling internally. Even if he chooses to develop "weapons of mass destruction", that does not mean that he will actually use them - it is entirely thinkable that, in the minds of a sadistic and militaristic autocrat, they are simply the means of retaining his dominance of his own people - he will go to the very brink, in maintaining his own power, showing his people that he always "means business", and is indispensable to their survival - he always needs is the credible threat of foreign-power destruction, in order to keep his own people subjugated. These are nasty methods of governance, certainly - but if internally contained, nothing to justify unleashing the international dogs of war. Many tyrants use similar techniques, without being attacked by their neighbours. We are not contemplating war on Robert Mugabe, and he would be far easier to dislodge. Some would say that George Dubya, whose own democratic legitimacy is so fragile, is also deploying the aura-or-war in order to bolster his own hold on power at Washington - do you think there is anything in that theory? The right policy, for tyrants like Saddam is international containment - a refusal to ally with them or support them, isolating them diplomatically (embargo, and boycott). Just consider the implications of the reverse position: America is holding some 2,000,000 civil prisoners, the vast majority "black", held for long years on some appallingly trivial charges - and they are now executing them again - that is a blot upon the reputation of the civilised world, but would that justify an attack-by-war on the American people? No: that is simply one aspect of "the American way" - and however inhumane it is, and however much we dislike it, it could never justify aggressive war. The same is true of the appalling civil rights record of the Chinese Government, with its execution of thousands of Chinese each year, some for very trivial crimes - who fancies a war over that? No neighbouring state (except tiny Kuwait) has requested military intervention against Iraq, and the overwhelming majority of Iraq's neighbours are bitterly and coherently opposed to war - "on their patch". There is simply no substantive threat which can in my view justify war in these circumstances - any more that anyone could justify war against the UK merely because of our nuclear Trident submarines - or war on Pakistan or India merely because they possess weapons of mass destruction. We are all being sucked in, I believe, to a desperate attempt by the Republicans to win the November Congressional Elections - the greatest threat is from the failure (possibly, both by Bush and by Blair) to realise that that is indeed the Cheney game-plan (he is the one designated to occupy the tough-cop role, in this Keystone team). We would really be in danger if either Bush or Blair were to start taking it all seriously, like the Pilot who went down with the missile, at the end of Dr Strangelove. Let's be clear: both Bush and Blair - neither of whom is any great intellect - are perfectly capable of guessing-it wrong - they are playing a very dangerous game indeed - indeed their own character-weaknesses represent the greatest present threat to our world order. We must all do everything we can, to make sure that their complex game of bluff is not taken seriously... Let’s keep in touch Roger Drop me a line < Back to Home Page
Raging tea-cups I owe you my reactions to the two dominant headlines of this weekend, neither of which excites my personal interest. On fox-hunting and the Countryside Alliance March, I think Tony Blair is quite wrong to allow this divisive emotional issue to be perpetuated - Tony! Please do a U-turn! - and I have no more to say. On the Exam debacle, my position is different. The problem lies with the unsatisfactory University practice (a) of relying on school-exam results to determine issues of University entry, and (b) on of relying on a ridiculous level of precision. "I was offered Two A's and B, but I only got two As and a C, so I was not accepted.." That sort of thing is a pantomime! The blame for this absurd system lies with the Universities, not with the Examiners. It is rumoured that the schools, ever subservient to the Universities, may cut the school-year still further - just to give the Universities longer to make their entry decisions after the A-level results have appeared. That would be wrong - Sixth-formers already miss too much school time, after the present examinations. No - the right course is for the universities to make firm, binding offers to each pupil (if necessary, after both interview and their own tests) subject only to the pupil's avoidance of complete meltdown in the A-level exams. Each University should select its undergraduates and send them into the A-level exams in confidence that a broadly satisfactory performance will see them home and dry. No sensible person believes that exam results can ever be precise measurements of performance, and the universities are silly to make that assumption. The University Entrance Tutors should take responsibility for their own selection decisions, making firm outright - subject only to reserving the right to withdraw a place for really bad A-level results.
Half a loaf Theme of the week is the "trial" of West European socialism - Swedish elections last week, the German this week. And Denis MacShane, writing in The Guardian, points out that New Labour was right to reject the rigidities of a state-managed labour market, removing obstacles to employment, and limiting the disruptive powers of the trade unions. The German economy still suffers grievously from statist rigidities. I agree with MacShane. But I do not accept the gloss that he puts upon these perceptions. The State should indeed withdraw from any attempt to constrain or inhibit either hiring or firing, but should give powerful assurances to those faced with unemployment. In this respect, I would go even further than new Labour has yet gone. But every person losing a job, for whatever reason, should be entitled to the continuation of full-salary, by way of a new form of Adjustment Pay, for a full six-months, to facilitate satisfactory job-search. Employers would be given positive incentives to assist ex-employees with their job-search. The State should not inhibit entry to employment, but should cushion any departure from it. None of the of Continental formats for unemployment benefit, generous as they are, meets the bill - as socialists, we should be re-designing our welfare state to give new assurances of support, for those affected by changing market conditions. I would use Adjustment Pay to replace both the Redundancy Pay system and the concept of wrongful dismissal. I know that this will seem heretical to many traditionalists, but I am confident of my argument. New international market conditions demand new socialist assurances. Apart from unlawful discrimination (which would remain actionable in its own right), every employer should be free to dismiss any employee, provided that Adjustment Pay were duly paid. The gaping weakness in the UK welfare state is the Old Age Pension. Neither the Swedes nor the Germans would contemplate treating their citizens as we do: their old age pensions are a fundament of their political settlement. Every person should be given the assurance of the indexed equivalent of £130 per week, at today's values. Given these assurances against penury, both during working-life and after its ending. Drop me a line < Back to Home Page
446 23 September 2002 My own Civil Service training I have never forgotten the care and wisdom that went into my induction as a senior civil servant, in December 1974. I had been recruited as the DoE's Industrial Adviser on Construction, with the rank of Under-Secretary, and I have already given you an account of my appointment. Both my Permanent Secretary Sir Idwal Pugh and my Deputy Secretary Peter Lazarus (a Ministry of Transport man, at a stage when the planning, housing and transport briefs were combined, for the first time) gave me many hours of their time, to talk through we me the ethos of the First Division, whose ranks I had perforce joined. My job was to get out into the construction and property development industries, and to act as the eyes and ears of the Department in the industry. And they explained just how I was to avoid creating any semblage of partiality. They wanted me to engage with the captains of the industry, on their behalf, but on no account to become beholden to anyone. This was their advice.
I lived by that code. It was only part of a detailed moral briefing which I received, and which influenced me deeply. It sounds as if Jo Moore may have missed out on all that. Drop me a line < Back to Home Page
447 23 September 2002 The Morning Star and Jerry Jones I confess I have never heard of Jerry Jones. But last week, by way of his article in the Communist daily the Morning Star (Wednesday 18 September) we effectively made common cause, at one remove. He declared, in resounding terms, the susceptibility of the corporations to management by Governments. That is the message of my own Newport Manifesto, although my line is to stress Governments' command of the very rules of corporate existence, throughout the world. Jerry Jones also echoes my July 2002 exposition of the theory of Market Denial
This is what Jerry Jones wrote, in last Wednesday's Morning Star -. "Previous articles in this series have have implied that the major transnational corporations now have huge power of Governments. But that is only to the extent that Governments have allowed them to have such power. For it is Governments, and the people who elect them, that ultimately control the legislature - and hence the rules and regulations that determine who can do what. For example, who can doubt that the US Government could break up Microsoft if it so chose? Even economically-weak Governments of underdeveloped countries have considerable power. For example, in the 1970s, when a number chose to nationalise the assets of the world's most powerful oil corporations, there was little that the corporations could do about it - they did get paid compensation. More recently, the Malaysian Government - when it faced the haemorrhaging of funds from the country in the wake of the 1997 east Asian crisis - defied internationally agreed rules and imposed capital controls on transnational corporations. Again, they had little choice but to accept. It is often portrayed that transnational corporations, acting together, have the power to pick off individual Governments that pursue policies which corporations perceive to be against their interests, holding Governments to ransom by withdrawing investment until there is a change of policy. That is precisely what happened to the Mitterand Government of France in the early 1980s. However, had the French Government had the courage of its convictions and to take the trouble of involving the whole electorate in what the transnational corporations were demanding, and sought the support of the electorate to take the assets that the transnational corporations were running down, there is little doubt that the Government would have won the day. Of course, it would have been rather easier if the French Government could have expected support from other Governments, but that was no reason for it to have chickened out from what it had been elected to do. The capacity of Governments to act independently, and to carry out their election pledges, has also been undermined by the extent to which they have made themselves too dependent on transnational corporations for investment - which is what gives corporations the power to play Governments off against one another. Thus, in order to attract investment to their countries, Governments find themselves increasingly having to compete against one another to offer various incentives, such as subsidies, reduced taxes or tighter labour laws that keep down wages. And the more this goes on, the more dependent Governments become. That is because lower tax rates on profits, and lower wages, make the tax-take lower than it would otherwise be - which in turn reduces the amount of revenue that Governments have at their disposal to undertake their own investment activities in the interests of the public as a whole. Thus transnational corporations get into an even stronger position to play Governments off against each other. In other words Governments collectively have allowed themselves to be too much influenced by the lobbying and propaganda of transnational corporations and their supporters in the media and in University economics departments. There is also the problem that many members of Governments readily accept the propaganda because they personally are doing very well out of it. It is up to the rest of us to work towards replacing such Governments. What Governments must realise is that the interests of transnational corporations, and international financial institutions, do not necessarily coincide with the interests of the public as a whole, on whose behalf Governments are supposed to be acting. Indeed, this was sharply pointed out two centuries ago by Adam Smith who, contrary to popular belief, would almost certainly would not have been sympathetic to the free rein that Governments have given to transnational corporations (...) Governments need to realise that, far from transnational corporations being in a position to play Governments off against each other, Governments in fact have the power to play transnational corporations off against one another in order to achieve their policy objectives. That is because, what transnational corporations need if they are to exist at all, are markets for their products. And since Governments have ultimate control over markets, that puts Governments in an exceptionally strong bargaining position. The huge amount of resources that transnational corporations pump into the lobbying of Governments suggests that corporations are only too well aware of that. It represents a sign of their weakness rather than their strength. This is also evident from the speed with which transnational corporations rush to Governments for support when they become involved in a trade dispute - as happened, for example, in the 1990s during the long-drawn-out banana dispute involving EU and US transnational corporations. In short, it is not correct to blame transnational corporations either for the power that they wield or more specifically for the way they have managed to manipulate the world economy to their specific advantage. Transnational corporations are in the business of making the best use possible of the investment resources that they have at their disposal on behalf of their shareholders, with the aim of maximising their returns.
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