potlatch

Britain's Brezhnev-style capitalism

Karl Marx believed, optimistically, that capitalism was creating the conditions of its own socialist successor, through bringing an emergent class together in cities and factories, where they would inevitably discover their shared interest and the superiority of common ownership. Optimistic Marxists, such as Hardt and Negri, continue to believe that something like this is true, on the basis that value is dematerialising, making it eventually impossible to privatise. There are even business gurus who preach something similar.

Wandering around Stratford Westfield the other day, I had a similar but more pessimistic thought: maybe capitalism is gradually morphing into the 'actually existing' state socialism of the old Eastern Bloc. (For international readers, Stratford Westfield is a vast shopping centre that was strategically located between the 2012 Olympic Park and the nearest train station, in the hope of rinsing unfortunate athletics fans for some cash en route to the games.) British capitalism already has many of the hallmarks of Brezhnev-era socialist decline: macroeconomic stagnation, a population as much too bored as scared to protest about very much, a state that performs tongue-in-cheek legitimacy, politicians playing with statistics to try and delay the moment of economic reckoning. But it was this glimpse of Bucharest-style architecture, while crossing one of the Westfield walkways, that really brought this home:

A whole area of Hackney and Newham, that used to be a wasteland of scrap metal and ex-industrial equipment, was bulldozed, concreted over and then built on at vast scale, as part of London's unnecessary Olympic modernisation project. Only a very carefully planned alliance of state and corporate actors could have made this happen, with the principle goals being 'security' and 'delivery'. But even these apparently neoliberal ideals were becoming mired in comedy by the time of the games themselves. The 'security' threat was so vaguely defined, that battleships were located in the Thames and rocket-launchers placed on top of people's homes, like those laughable Red Square muscle parades of  yore. Meanwhile, the 'delivery' was spoken of as 'on budget', but on the comical principle that 'budget' meant whatever the spokespersons needed it to.

Travelling around the area, you get a very clear sense that you are no longer in an unplanned, emergent or liberal urban space. Both aesthetically and politically, this is the nightmare that everyone from Jane Jacobs to Friedrich Hayek was warning us against: the quest for complete control of an economy or a space will result in a uniformity that is at best very dull and at worst very frightening. Examples of 'actually existing' state socialism tended to sit at various points on a spectrum between the two. For a British example of something that is a tad scary and more than a tad depressing, here is another shot of post-Olympian London:

The absurd sculpture that nobody asked for, the CCTV, the barbed wire, the bland greyness; I was probably breaking the law by taking this photo, but the security guards had probably given up caring. In any case, I might have bought them off with the offer of a pack of Marlboro reds or an Eagles LP.

Earlier this week, I happened to hear an old NYLON friend, Suzi Hall, speaking about her work on the LSE Ordinary Streets project, which is carrying out a close ethnographic and economic analysis of the Peckham Rye Lane area of London, including interviews with hundreds of shopkeepers. The work sounds like a brilliant example of what an anthropological sensibility can bring to the understanding of urban economic life.

She compared Peckham Rye to Stratford Westfield, in terms of numbers of businesses and the employment generated. While Westfield was sold as a local regenerator and job creator, Peckham Rye Lane's economy of ethnically diverse small-holders is eyed suspiciously by policy-makers as an apparent blockage to economic development. Plans are afoot to help chains move into the street as a step towards 'regeneration'. Yet Suzi reported that, while Westfield Stratford had duly delivered its promised 8,000 jobs, Peckham Rye Lane's local market was already a source of 13,000, via a far greater number of businesses. This is aside from the webs of social networks that accompany an 'embedded' market economy, in contrast to identikit businesses that are taking over most highstreets.

The notion that in an age of shrinking social security, policy-makers might view such a street as anything other than an irreplaceable socio-economic benefit is just bizarre. Why such government suspicion of the market? In contrast to the known quantity of WH Smiths, it probably appears dangerously opaque to the local council, but only because of the myopic tools of transparency and surveillance that are in use. A different gaze, such as that practiced by Suzi and her colleagues, would reveal things differently. The blind fear of the migrant (or even second or third generation migrant) converts economic liberty from the asset that Adam Smith portrayed it as, to a risk that requires costly management. And when it comes to mitigting the risks associated with individual freedom, the Chinese political model will always 'out-perform' ours...

In his recent On Critique, Luc Boltanski argues that repetition becomes the key trope of political actors who seek to avoid moments of critical or objective judgement. Words are recited, truths are repeatedly affirmed, routines are performed repeatedly, for fear that otherwise questions might be asked. This is different from, say, a company audit or an evaluation, in which there is a ritualistic element to it, but the outcome is unknown, unless it has become corrupted in some way. My feeling is (and I discuss this in a book I'm just finishing) that neoliberalism has entered a post-critical, repetitive phase, in which certain things have to be spoken - delivery, efficiency, security, competitiveness - but in order to hold the edifice together, rather than to reveal anything as objectively 'delivered', 'efficient', 'secure' or 'competitive. Political systems which do not create space for critique encounter this need for mandatory repetition immediately, as occurred to state socialism.

Neoliberalism was a political system in which the world was put to the test in some way, it was simply that the tests employed were those which privileged price and entrepreneurial energy. I don't want to defend this form of testing, which is often cynical, bullying and depressingly unsympathetic to other valuation systems. But there was often some consistency about it and the capacity for an unexpected outcome (for instance, that local economic diversity might be revealed to be more fiscally efficient). Look at Westfield today, however, and you see an economic culture being repeated, without any sincere sense that this represents 'choice', 'efficiency' or 'regeneration', nor any sense that things might have turned out differently even if this had been known. The point becomes to name this as 'efficient' and that (e.g. Peckham Rye Lane) as 'inefficient', and try and avoid or suppress evidence to the contrary. The fear arises that provable efficiency might involve abandoning one set of power structures in favour of another. And so economics becomes a naming ceremony, not a test.

Eastern bloc socialism had to keep going through the 1970s and 80s, inspite of lagging growth and failed ideological hegemony, because nobody knew what else to do. This is the stage neoliberal policy-making has now reached. The difference is that there is still one area of our economy that is still moving and changing, namely the money economy, with corporate profits high and financial innovation ongoing. What seems to have changed, post-2008, is that the price paid for this monetary dynamism is that the rest of us all have to stand completely still. In order that 'they' in the banks can cling on to their modernity of liquidity and ultra-fast turnover, 'we' outside have to relinquish our modernity, of a future that is any different from the present. Finance is to our stagnant societies what the space race and the Cold War were to the Eastern Bloc countries of the 1970s and 80s - a huge cost that the state imposes on its public, with the result that cities and economies start to become tedious processions of the same.

my new reports on co-operatives and mutuals

Just as I was leaving my previous job, at the Centre for Mutual and Employee-owned Business, I was involved in three different pieces of writing, a couple of which have now been published (the third will follow in the next couple of months).

Firstly, the Blueprint for a Co-operative Decade has been published by the International Co-operative Alliance. This was something that Cliff Mills and I worked on over last summer, and was discussed first at a discussion of the ICA board in Cape Town in June, then at the ICA annual conference in Manchester in October. So in fine co-operative style, it's the result of much dialogue, and a careful effort to forge consensus. In that sense, Cliff and I are 'anti-gurus'.

Secondly, Measuring Mutuality: Indicators for Financial Mutuals [pdf] has been published by the Association of Financial Mutuals. This is an attempt by Jonathan Michie and I to think through how to evaluate performance of risk-managing institutions, other than in terms of profit. Given how much culpability 'shareholder value' in banking holds for our current malaises, this is an issue whose pertinence must extend beyond the mutuals sector, I'd have thought.

Hope these are of some interest. Happy to discuss them further.

conclusion to Uneconomics

I've written a concluding piece for the Uneconomics essay series, that I've been editing over the course of the year. You can read it here (I didn't write the headline) or a chunk here:

A great deal has been said and written about how the present economic crisis has (or should have) undermined the validity of orthodox economic methods. Part of the purpose of the Uneconomics debate has been to develop this challenge, as demonstrated by Phillip Mirowski’s polemical contribution. But less has been said about how this crisis represents an overwhelming endorsement for the emergence of more culturally-conscious forms of economic and political analysis.

Can you really hope to understand why bankers would risk their entire banks, without also understanding something of the destructive exuberance of finance culture since the 1980s? When core pillars of financial governance, such as ‘shareholder value’ and central bank inflation-targeting, start to backfire, surely it is important to understand how certain numerical indicators come to attain symbolic authority in the first place. What is going on when regulators and credit-raters place their faith in statistical risk models?    

Dealing with these issues requires an anthropological sensibility, which is attuned to questions of symbolic representation and organizational norms. So much of the financial crisis comes down to a single problem, of allowing models of reality to be mistaken for reality itself. The paradoxical result was that the quest for transparency began to generate its own opacity. Accounting reports obscured the messiness of organisations. Simple credit ratings hid the intrinsic complexity of the firms, mortgages and products that were being evaluated.

inverted crises

I'm currently reading Andy Beckett's excellent When the Lights Went Out: What really happened to Britain in the seventies, and have just got to the economic woes of Harold Wilson's government. Although the story of stagflation is a familiar one, and neoliberalism is often interpreted as a deliberate strategy to restore profitability at the expense of labour, it is striking quite how differently that crisis was experienced, compared to our present one. In fact, politically, the two are direct inverses of each other, making a class-based analysis almost impossible to resist, even for non-Marxists. Consider the following:

Very significantly for the direction of British politics during the rest of the seventies and beyond, some Britons were affected by the bad times more quickly, and with more sense of shock, than others. Between 1974 and 1976, it was the comfortably off who suffered. High inflation ate their savings. The low pound spoiled their holidays. A property crash - house prices fell 13 per cent in 1974, 16 per cent in 1975 and 8 per cent in 1976 - devalued their homes. The stock-market slump did the same for their shareholdings. Share dividends shrank or were not paid at all. During these years, disposable income fell considerably faster for the richest tenth of British households than for everyone else, and by larger and larger amounts the further you were up the financial scale. Even in severe recession, this was not a familiar situation...

This sense of a world being turned upside down was sharpened by the fact that other categories of Britons, traditionally not as well-off or secure, were, at least at first, less affected by the crisis. Trade unionists' wages were protected from inflation by their readiness to strike and by the political leverage of their leaders. The jobs of public sector workers were protected by the continuing increase in government spending.

Of course we know where this all ended, and it was a Labour government that first experimented with monetarism, and effectively started reversing these trends. But reading this passage, one thing that struck me was that these symptoms of crisis now appear remarkably attractive to us, in a crisis that is having the very opposite effect on class stratification. In fact, many mainstream economists would love to see companies hording less cash or distributing it as dividends, and putting it into employees pockets. The once-monetarist Bank of England has stood by and allowed the pound to fall by an astonishing 30%, while inflation may now be George Osborne's only hope of retaining any macro-economic credibility whatsoever. Many in the political centre-ground are desparately looking for ways of mitigating the extreme effects of financialisation, whereby the rich appear unscathed by this crisis. And if that meant house prices falling to a level where a new generation of 'hard-working families' could afford homes, then that might be a thoroughly democratic outcome. But by and large, if policy-makers decided that the seventies really weren't so bad after all, the strange truth is that there's no plausible way that the course of the current crisis could be diverted towards a more egalitarian path (at least not without some sort of implausibly radical reinvention of regulation, such as imposing capital controls).

Such is the extraordinary power of capitalism to remake both itself and society. In the space of half a lifetime, the experience of capitalist crisis has been entirely stood upside down, from being something that the great unwashed visit upon the wealthy, to vice versa. In our current financialised period of capitalism, we assume that the wealthy will always benefit from upheaval, but how short our memories are. Who is to say that the crisis of the 2030s - or sooner - won't be far more fearsome for elites than for everyone else? Unless one buys into the headier forms of world systems theory, it is entirely impossible to say.

pigs might fly?

Inspired by the TUC's After Austerity conference, and more so by CRESC's recent report on industrial policy, I've posted a new article to the Uneconomics debate, on what type of expertise might be needed to move beyond the impasse of 'let the market sort it out'. As I conclude:

An industrial policy that wasn’t simply the outcome of corporate lobbying (e.g. copyright extensions) or an ultimatum (e.g. banking bailouts) or national nostalgia (e.g. rescuing cherished brands) would necessarily involve policymakers acquiring a new form of expertise, that was more sensitive to the organisational, historical and material elements of capitalism...

Too often, we assume that we need a new Keynes to come along and rescue us, or failing that, the old one. Somewhere, a very clever man must be working on a very complicated book that will produce a new and better economic policy template. We just need to wait for him to finish. What if this is misguided? What if all we can rely on is what the American political scientist Charles Lindblom characterised as ‘muddling through’? If this is the case, we might at least strive to muddle through in an informed and competent way.

Building up this information will take time. But, as US economist Dean Baker remarked grimly at After Austerity, “we have plenty of time” – this depression isn’t going anywhere. 

Thatcherism: a red herring?

I am impatient to know how history is going to judge the multiple institutional and moral collapses of the past five years. Specifically, the interesting question is: what exactly is coming to an end? It could, of course, be various things, operating with various historical rhythms, as I suggested here. But here's a brief thought: what if the entire idea of 'Thatcherism' turns out to be a red herring? Or, at any rate, what if we were so distracted by all the conservative rhetoric of markets and entrepreneurship, that we entirely failed to see what was really going on?

The unfolding Barclays scandal forces the left and the right to wake up to the reality of what's been going on. Specifically, when we thought we were placing our trust in 'markets', we were actually placing our trust in highly complex firms and exotic cultures of individual expression, that are largely opaque to the outside world. When the rhetoric was of 'market freedom', it actually meant an abnegation of public responsibility on the part of firms and individuals. The term 'market' did for banks what the term 'God' does for Catholic Priests, in keeping government and public at bay (for a while I've had an idea for a comparative sociological research project, looking at banks and psychoanalysts side by side, to identify common strategies for achieving non-regulation; not that I want to see the entire world regulated, far from it, but it is interesting to consider what rhetorical strategies are used to avoid formal accountability). Understanding what precisely we have been placing our faith in, and accepting it isn't quite what we thought we were placing our faith in (for better or worse), is the first step to removing our faith from it. This is more of a challenge for the Left than the Right, seeing as the former still have their opponents' word 'market' echoing in their ears, whereas the latter have realised their own error.

When did this now-crumbling era begin? We (and I'm as guilty of this as anyone) like to pinpoint the late 1970s as the moment when neoliberalism emerged. It was then that the crisis of Keynesianism was completed, and a new paradigm for economic policy-making began. But this may reveal something of the narcissism of liberal elites, who like to believe that intellectuals and ideas are central to historical and economic periodization. (One might also characterise it as bloody-minded Hegelianism or conservatism, which insists that reason drives history, and not vice versa). A more pragmatist approach would recognise that ideas simply help to stabilise and legitimise forms of behaviour that have already emerged.

If the Barclays scandal proves to be decisive and telling, then we will need to shift our periodisation, such that 1968-71 becomes the key transition point in the formation of neoliberalism (or whatever we might call it instead). Two things took place during these turbulent years.

Firstly, '68 and its aftermath generated a new ethos of anti-moralism, that might have appeared heroically Nietzschean or Freudian in its more explosive and exciting moments, but could only translate into a dull masturbational culture of pleasure-seeking and deceit, as it permeated beyond the intellectual world of Guy Debord et al. Rooseveltian liberals, such as Daniel Patrick Moynihan and Daniel Bell, spotted this immediately, leading to a form of Left Neo-conservatism (which Britain seems only now to be developing in the form of Blue Labour). By the late 1970s, even younger cultural critics, such as Richard Sennett, had cottoned on to what their generation had done. The 'great refusal', advocated by Marcuse, had its noble elements, but these have eventually be vastly out-numbered by its depressingly adolescent ones.

Secondly, 1971 was when paper money was divorced from reality, following Nixon's decision to disconnect dollars from gold. Admittedly, faster telecommunications and offshore trading had been placing tremendous strains on the dollar since the late 1960s, so no doubt there is some telecoms satellite launched around this time that could claim to be even more decisive. From this point forward, the monetary system became a battle between rival symbolic codes, with the symbolic code of '$$' enforced upon the world through the alliance of Wall Street and Washington DC (see Peter Gowan's The Global Gamble). Disconnected from any tangible or material notion of value, the monetary system became a game of dictating perceptions and propping up linguistic rules.

In the broader sweep of history - as, for example, portrayed in Giovanni Arrighi's 700-year history of capitalism - it is unsurprising that a combination of these two occurences would end in political and economic disaster. The divorce of ethics from normativity ('68) combined with the divorce of money from material reality ('71) creates the conditions for a frictionless financial culture, in which critics conspired by coining the term 'postmodernism', and in which lying about the price of money is an entirely reasonable and legitimate thing to do. Taking a longer sociological view of the Barclays scandal, the question is not 'why did they do it?', but really, 'why wouldn't they do it?' On what basis, really, did any of us expect pleasure-seeking individuals, far from the disciplining reach of any market, trading paper whose value had nothing to do with utility or human need, to do anything other than manipulate perceptions of that paper's value? How else does paper attain any value, without perceptions being manipulated to some extent? And why, honestly, did anyone believe that individuals, high on the legacy of '68, would manipulate that value for the benefit of the public or mortgage-holders, and not for themselves?

Thatcherism was therefore a late-comer, providing post hoc rationalisation for a surge of egoism and monetary game-playing that was probably unstoppable by 1979 anyhow. Thatcherism provided a new paradigm for the state's role in this, to tackle inflation rather than unemployment and build sufficient prisons to make such a policy practicable, but in this it was reacting not proscribing. Perhaps Thatcherism's one stroke of courage was to dress this elite decadence up, quite preposterously, as a return to conservative Victorian England. For some reason, it is only now that Tories such as Peter Oborne and Ferdinand Mount appear to have spotted that this, like Libor, was another audacious fix. Bob Diamond, born 1951 and reaching adulthood as Nixon was sworn in, was less naive, and continues to exhibit his own 'great refusal' to accept any public judgement placed upon him.

the Barclays scandal: made in Chicago

The scandal of Barclays' manipulation of interest rates, which some suspect may end up spreading to other banks, looks set to provide us with this summer's drip-drip expose of British power elites. 2009 was the Summer of Duck Ponds, and 2011 was the Summer of Milly Dowler's Mobile Phone. And now we enter the Summer of Libor.

This one could be equally significant. It's not that the banks possess very much moral authority right now anyway, but then nor did The News of the World or MPs. As Zizek argued about wikileaks, what's distinctive about contemporary scandal is in making tacitly-assumed truths impossible to ignore. It matters greatly whether the banks were acting within the rules, but brought down by excessive exuberance, complexity and inadequate regulation, or whether they were attempting to rig the entire game in secret.

Or at least, we assume it matters, hence the moral outcry about interest-rate rigging. But what if the distinction is actually non-existent? What if rigging the game is the game? On one level, this is the end game of neoliberalism, in which the refusal to accept any notion of political-normative authority external to economic efficiency ends up undermining its very conditions of possibility. But a careful reading of Chicago School economics might suggest that this has been an integral feature of neoliberalism all along.

It's worth standing back, and remembering that there were always (roughly) two traditions of neoliberalism. From the 1930s onwards, there was a European one, which sought to inject strong legal norms into the free market system, to defend it from monopoly and the state; this was manifest in ordo-liberalism, the German 'social market' economy, Henry Simons in Chicago and the pre-Chicago Hayek. This elevated the price system to a quasi-sovereign authority, backed by law. Then,  from the 1950s onwards, there was the Chicago School one, which sought to use price theory to explain all forms of economic, social and political behaviour; Aaron Director and Ronald Coase play a key role in this tradition. This is what influenced US regulation from the 1970s onwards, and European regulation from the 1990s onwards.

As I argue in this paper (and to simplify somewhat) where the former privileged the price mechanism of the market, the latter privileged price theory of neo-classical economics. The former assumed that the state's job was to reinforce market institutions using law; the latter assumed that the state's job was to analyse existing institutions as they happen to exist, and analyse their behaviour on the psychological premise that each actor is behaving 'as if' in a market. The problem with this latter approach is that, if every individual in a highly complex institution is acting rationally in their own interest, and that this is most likely efficient given available information, there is scarcely any basis on which policy-making can insist on one institutional design over another. Efficiency is likely to emerge organically from the aggregate of individual decision-making, both in the marketplace and in the murkier world of firms (such as banks) and networks (such as elite relations and lobbying networks).

From a Chicago School perspective, faith is not being placed in the market (a position which would warrant the enforcement of market norms) but in individuals to act in a reasonable, market-like fashion. Foucault explains the transition to Chicago-style neoliberalism nicely:

it is no longer the analysis of the historical logic of processes; it is the analysis of the internal rationality, the strategic programming of individuals' activity.

A particular idiosyncratic psychology is presupposed (NB as a methodology, not an empirical anthropology!) in which individuals act in a calculated, self-interested fashion. But law and morality possess no distinctive quality within this worldview; they are simply additional forms of psychological incentive and disincentive. Hence, the very notion of 'cheating' becomes virtually meaningless. If behaviour can be proved as inefficient, then incentives need introducing to dissuade people from doing it. But constructing such proof is fiendishly difficult, especially in highly complex institutional environments. How is the regulator to demonstrate that their view on efficiency is superior to the banker's own view on what is going on? Falling into this trap is what Alan Greenspan recognised as his key mistake.

In his famous essay, The Methodology of Positive Economics, Milton Friedman introduced a neat metaphor, to defend economics from the charge of unrealism. He suggested that if capitalism were a game of billiards, that economists were like geometricians: the players could be expert at the game, without understanding anything about geometry, while economists could understand why the balls travelled at the angles they did, without being any good at the game. The key issue is that the 'outsider' and the 'insider' have radically different views on what is going on, and (what Friedman didn't say) radically different concepts of authority. As an observer, you have no right to tell me how the game 'should' be played; equally, I have no interest in how the game appears in the aggregate.

Staffed by economists, neoliberal regulators end up being like silent geometricians, watching in amazement as bankers move balls with great precision around the table towards the pockets. As long as the players are both trying to win the game and not (as per a cartel) seeking to co-operate on the outcome, then all must automatically be well. The geometrician has no view on the 'right' or 'wrong' way to hit the ball, and couldn't possibly insist that the billiard-player's hand might be in the wrong place or doing something suspicious.

This is very different from the early European neoliberal epistemology, in which the great virtue of prices was that they have an explicit, public quality that nobody can misunderstand, be they 'billiard players' or 'geometricians'. The competitor and the observer inhabit the same shared world. There is necessarily a limit to how much prices can be manipulated, if they are to sustain this political and epistemological role of social consensus-formation (it's often struck me that Ryanair's "£5 flights" which cost £85 are another example of the triumph of Chicago neoliberalism over European neoliberalism). Upholding the market requires not only a minimal level of transparency, but also of simplicity. By contrast, if 'price' is simply understood as a psychological metaphor, rather than a visible unambiguous public institution, then manipulation of actual prices becomes entirely legitimate within the overall game of wealth accumulation. And this is precisely what Barclays have been doing.

new paper: The Emerging Neo-communitarianism

I've had an article accepted by Political Quarterly (Andrew Gamble's last act as editor, no less; there's one for an incredibly niche and tedious pub quiz) entitled 'The Emerging Neo-Communitarianism'. It'll be published in October, but I've uploaded a pre-print here.

This was a paper I initially presented in Delhi last year, in the Rising Powers symposium. It attempts to interpret and characterise emerging forms of government, in terms of micro-political departures from key tenets of neoliberalism. By abandoning the Hayekian and the neo-classical emphasis on an autonomous, choosing individual, to be governed through prices and incentives, in favour of a more social and habitual individual, policy-makers are moving towards a form of 'neo-communitarianism'. Neo-communitarianism is to communitarianism as neoliberalism is to liberalism, that is, it is a technocratic, economised derivative of a moral and political philosophy.

If you're still reading, this chart lays out a typology of the two rival styles or logics of government that the paper explores:

The paper is pretty speculative in its outlook. Clearly we do not have a grand new paradigmatic idea, such as Keynesian demand management. But perhaps scholars and policy-makers need to accept that crises do not always occasion grand paradigm shifts, but also occasion more subtle and organic changes, which enable governments to simply cope. The belief that an Idea, probably produced by some brilliant grey-haired man in a university, will rescue us, may be a comfort blanket we need to abandon.

CRESC conference on 'promises' and crises

The CRESC Annual Conference looks excellent this year:

Weds September 5 - Friday September 7, 2012, Manchester University

Keynote Speakers

• Barbara Adam (Social Sciences, Cardiff University)
• Robert Boyer (ENS, Paris)
• Aditya Chakrabortty (The Guardian) 
• Will Hutton (Hertford College, Oxford University)
• Paul Mason (BBC Newsnight)
• Elizabeth A. Povinelli (Anthropology, Columbia University)

Promises: Crises and Socio-Cultural Change

In the midst of global financial crisis and radical transformations in states, institutions and social relations, it has become urgent to explore the role promises play in effecting socio-cultural change. As particular plans, projects, policies, initiatives, dreams and visions, promises both open and close the possibility of different kinds of socio-cultural futures (and pasts). What promises are contained in the current political and socio-cultural moment?

Hopefully see you there!

what do banks and prisons have in common?

I've published an article at openDemocracy, as part of the Uneconomics debate, in which I attempt to stand back and take a wide-ranging look at the policy dilemmas posed by the banking system. There is, I suggest, a serious problem in that the state has become an under-writer for a wasteful and ineffective risk management system, on which it cannot now easily turn its back. In that respect, the financial system has become like the prison system: a poorly calculated strategy for reducing risk, which may have the exact opposite effect, but which the taxpayer has become entangled with. As I argue:

Nearly five years after the dawning of the financial crisis, we can now identify one of its possible long-term legacies: the implicit association between the modern state and large financial institutions has become an explicit one. It is no longer possible to specify exactly where the state ends and the banking system begins...

We are living with a situation in which billions of pounds of public money is still being effectively siphoned into the pockets of private individuals, via quantitative easing and other forms of support for the banking sector. The on-going hand-wringing over the 'fairness' of bankers' pay tends to ignore the graver public insult, that billions of pounds are being removed from the banking system in the form of bonuses, which the taxpayer will have to provide if the system collapses again. Gordon Brown cites figures ^↑ showing that if bankers had reduced their pay by a mere 10 per cent between 2000-2007, the banks would have had £50bn more of capital available to them when the crisis struck, which is the same amount that the government injected into RBS and Lloyds-TSB in October 2008.

There is a structural problem here that has still not been dealt with. If this situation is to change, the government will need to take risks with its modus operandi of risk management. While regulators and policy-makers view the future via traditional risk management techniques, they will effectively endorse traditional risk management institutions of the City of London. Only with an ethos of experimentation can anything genuinely new be anticipated and valued.

You can read the rest of the article here. Comments might be better placed underneath the article itself, rather than on this blog.