10 Membranes

15/12/2011

12/12/2011

Britain and the EU

In all the analysis of Britain and the EU over the past few days I have been very surprised by the absence of historical perspective, because here is where the roots of the present situation lie. Europe and Britain’s divergent histories shape their present positions and, unfortunately in my view, make them ultimately incompatible. Both Europe and Britain seem to have an inadequate grasp of the others position, and a cold dose of history would help either side. 

What are the positions? On Britain’s side that national sovereignty is sacred; that loss of it to the EU is a catastrophic surrender. On Europe’s side that closer integration is a good thing for stimulating trade, preventing war and improving international strength and domestic living standards. In fact I believe both are true in their own way. Britain’s view is informed by the following macro-historical factors:

1.) The War(s): There is in Britain a narrative that, perhaps starting with the Armada, running through the wars of Spanish succession, the Napoleonic wars and culminating of course in WW2, Britain has always stood alone against European tyranny. One can essentially construct a nationalist history whereby Britain has repeatedly fought off one potential pan-European dictator after another. By far the most important piece in this story is WW2, incredibly still the defining moment of contemporary Britain where, despite sacrificing an empire and an economy, we heroically resisted the Nazis. It was a moment we all feel proud of, rightly, yet did lasting damage to the country and has proved a crutch we are unable to do without. Its legacy as been to leave the British with a sense that anything European is at some level tyrannous, wants to control, and that to compromise is surrender.  All the European conflicts waged over hundreds of years leave the British with a sense that to “submit” to the EU is not only a betrayal of Britain, but is too lose some eternal battle, to be ruled over, to be on the wrong side in WW3. Regardless of the facts, I believe this feeling animates much popular opinion in the UK, and also explains in large part the continued military alliance with the US. 

2.) The Island Nation: I don’t think it can be overstated what impact this has on British thinking, and is intimately connected to the points above and below. Geographic isolation leads to psychological isolation. While I couldn’t quite specify the mechanisms by which this acts, it has an intuitive force. 

3.) Parliamentary tradition: this comprises a number of threads, but broadly speaking is the political equivalent of fighting off tyrants. From Magna Carta, through the Civil war to the Glorious Revolution and the Reform Act, Britain, or at least England, has a tradition of reasonable liberty, when compared with peer nations, and a series of checks and balances internally. The freedom of Parliament has been consistently challenged, but has remained through those checks and through vigorous defence. A key element here is that famously non-existent constitution, a supple, changeable non-written Constitution that will bend before it breaks, and incorporates certain key guarantees on freedom and so on. These elements can be roughly defined as: a firm commitment to a loose notion of liberty; a powerful, relatively balanced Parliamentary tradition; a flexible yet iconic constitution; a basic political structure with an unbroken thread dating back a millennia. 

Put these three together and you have an ancient, deeply embedded Weltanschauung, that views any European initiative as a stealth attack on Britain’s liberty, a craven surrender to a new and megalamanical dictatorship. Britain is a very open country. We have sold all our best houses, and much worse, all our best companies to foreigners with hardly a squeak of protest. They do not fit into this narrative, and so it gets by; in contrast the EU is viewed as a latter day Napoleon or even Hitler, though no one says this explicitly, designed specifically to tear apart the autonomy and power of the Mother of Parliaments. And this time even the Channel won’t save us. 

On the Europe side there are several reasons why these conditions don’t pertain:

1.) Newer states: many EU states are “new” - Germany and Italy created from fractious agglomerations in the nineteenth century, Belgium and Greece slightly earlier creations from crumbling empires, many of the Eastern bloc countries newly emerged from communism or newly formed altogether. This doesn’t apply to states like France and Spain though. 

2.) Occupation: Virtually all the states of Europe have experienced occupation of one kind or another over the past two hundred years, often multiple times from many directions. Psychologically this contrasts with almost 1000 years of unbroken “home rule” in England, and gives European nations a different perspective on the EU, as a preferable solution to non-voluntary losses of sovereignty. It’s my hunch that if Britain had been successfully invaded from about 1800 on, we would be much more interested in the EU. Becoming part of a European state is not therefore surrender, but actually a clever strategic objective. 

3.) Absolutism: In virtually all European states, apart from some exceptions like Scandinavia and the Netherlands, absolutist, dictatorial or revolutionary rule has featured more centrally, and more recently, than in the UK. 

Given these histories, breathed in the air from birth, the present situation is understandable, and historically Britain’s position has been good for the Continent, in as much as it has been a useful counterweight to dominance from any one corner, for the good of all. It thus now views the EU as the new dominant corner to which it must be a counterweight, rightly or wrongly. 

This is mistaken for one reason - it reads the present as if it were history, and the problematics of history still purchased. They don’t. The world is becoming one of mega-blocs, like the nineteenth century, although spread throughout the world. The US (and NAFTA) and China are the most obvious examples, but India, Brazil, ASEAN and to a certain extent Russia and the Arab League, all represent regional super-blocs. The 21st century is likely to be about vast power centres, around which will float smaller free-wheeling entities like Switzerland, Hong Kong and Singapore. Britain is far, far too big to ever have a relationship to Europe like Switzerland; yet also far, far too small to be a serious player in this new age of Powers. Strategically our best bet is to be part of the European superstate, capable of acting with authority, securing the future for it’s inhabitants, this despite the messy, often thoroughly misguided and even damaging comprises that form the EU and it’s future. 

For the above reasons this will never happen. Mutual recognition of this fact is perhaps the best outcome of an otherwise disastrous summit. 

In many strange ways Britain is analogous to Japan, like Britain a small, indecipherable, fiercely independent archipelago sitting off an enormous continent to which it feels both superior to and fearful of; like Japan a country of enormous strengths and glaring weaknesses; and like Japan a country struggling to adapt to the new reality where it is not rich enough or powerful enough to stand up to the big boys, but not small enough to pass under the radar, too arrogant to accept either. 

06/12/2011

05/12/2011

01/12/2011

16/11/2011

Europe is the new USSR

At one stage the USSR was making huge gains on the USA: it’s industrial production was rising fast, with living standards being hauled behind it; it’s military capacity was vast and growing; it’s scienctists and engineers were world leaders, ahead of the US in the Space Race; Communism was on the march around the world, from Cuba to China. But then it became a car crash in slow motion, for thirty years stuttering to what was, in hindsight, an inevitable collapse. 

Interestingly Europe of the present day shares some key features with the USSR of the 1980s. 

- An impenetrable and self serving bureaucracy. The EU is not as opaque as UK popular folklore would make out, but it is inherently technocratic (what a chilling, evocative and brilliant word), and obtuse. Coupled with the “closed door” nature of the key meetings in the Council of Europe it is not exactly engaging. Likewise European countries like France, Italy and yes, the UK, have large, professional, vested and powerful bureaucracies that as much as the politicians control the countries. We in Europe like to think we are beacons of democracy, but functionally Europe is not so far from China, where a nominally enlightened bureaucratic class governs immovably from on high (as China and to some extent Europe prove, this isn’t a priori a bad form of governance). 

- Widening inequalities. There are two axes of inequality within Europe - inter state and intra state. A common theme on this blog has been that of the 1 and the 99%, as we now call it. While such a trend is most pronounced in the most neoliberal countries of Europe, namely Britain, it is a global trend and applies across Europe. Yet we now have the prospect of several two speed Europes, politically, but also economically where the so called periphery will continually get poorer for the foreseeable future. The USSR had a major faultline of inequality between the party elite and the rest, which destroyed the credibility of the regime and sapped morale across the country, building up a good deal of instability in the process. 

- Declining Industry. Take Germany out of the picture and Europe’s industrial base isn’t a pretty picture. The UK and Italy both used to be industrial giants, with strong, innovative companies and track records of global success, before each in its own way, was hit with a bombshell - bad productivity and Thatcher in the former, China in the latter. A small hardcore of great manufacturers remains, but it is clear that countries like South Korea and increasingly China will dominate industrial production in the coming years, and will only continue the slow shrinking of European industry as a global player. 

- Declining Research. Scientific research never stopped in the USSR, but it lost its dynamism as edge. It did not have the manpower and more crucially the resources and system to compete. On all measures we are seeing the same now happen in Europe. We produce far less scientists than Asia, and spend far less as a proportion of GDP, especially the UK which contributes a woeful level of GDP to R&D (although still has a respectable impact from that research). What started as a strength in the USSR - the controlled concentration of resources in selected key areas- eventually became a weakness as the open ended, organic US model proved to be more powerful. Now in China we are seeing, as with economics, the fusing of the two, leading China to position itself as the global leader in areas like space technology and synthetic biology. 

- Malaise. One of the most curious and in my view the most important aspects of the end of the USSR was that everyone knew it was coming. Party cadres and trammelled upon workers alike both had the sense that the system was bust, it’s days numbered, its legitimacy gone, a malaise that stemmed from years of unreversed decline. This seems to be echoed in the populations of Southern Europe - they know their countries have been living beyond their means, they know it will be bad, but they also refuse to accept it. This double think is manifested in the way Greeks know they must pay taxes, yet still continue not to do so. People across Europe have a sense of the bankruptcy of finance capitalism, the European social model, Western supremacy and the rest; we in the UK have enjoyed 60 years of diminishment and no one sees any prospect of it ending soon. 

None of the above are like for like comparisons, or that the situation is any way directly analogous, but certain parallels seem interesting to me. You might dismiss it and say, well Europe is alright, it is still, just, growing, it still has great companies and scientists and so on. You would be right. However this was also the case for the Soviet Union - it wasn’t that it went backward, it’s that its major competitors went forward much, much quicker while it stagnated during the Brezhnev years. Europe is experiencing such a stagnation, economically, scientifically, industrially, with the same inflexible, broken sense of politics and engagement from the population, even as our competitors in the Asia-Pacific region race mightily ahead. 

Many in the UK have shown undisguised smugness at the fate of the Eurozone, ironic, seeing as many of the above traits are more than usually pronounced there (here). 

If I had to sum up the situation I would describe it as the following: economic imbalances and stagnation + popularly discredited politics + loss of overall competitiveness = the Soviet Union circa 1980/Western Europe 2011. 

15/11/2011

Occupy Tax Havens, Not Cities

The Occupy protest movement has attracted a fair amount of criticism and acclaim, David Cameron helpfully informing us that protesting is something he believes should take place on two feet. Presumably surrounded by pepper-spray wielding policemen intent on causing maximum intimidation and harm, but only if you are a harmless student. 

Like many people, Vince Cable and Ed Miliband included, I sympathise with the motivations behind the protest: widening inequality seems to be a function of an extractive elite taking an ever larger slice of a pie that is getting smaller or remaining about the same. Like them I share some reservations about the nature of the protest and also its goals, which are too open ended, utopian and unworkable on the one hand, too alienating and useless on the other. This is because the Occupy movement isn’t (yet) thinking strategically, and is basically a bunch of crusties having a whale of a time camping outside St. Pauls. 

If the movement did decide it was serious, here is what I would suggest.

Occupying large cities is functionally useless for a number of reasons. Firstly because a city like London is large enough to swallow almost any protest of this nature, which is so geographically focused that it can never really disrupt the rhythms of the city, can never put off tourists, or business travellers or have any impact other than to me a mild inconvenience and eye sore on one of our greatest buildings. Trading has not stopped on the LSE because a man with unwashed hair is waving a placard outside; the protest is asymmetric with the forces that it is arrayed against; it is but a drop in the ocean and doesn’t scale up to the opponent, in this case the most powerful and effective organisational system we have ever known. Secondly the protests fail to account for the utterly mobile nature of contemporary capital - even if they did truly occupy London, capital would simply decamp to Geneva, or somewhere else, and so on. 

Ok, the protests might get media coverage, which in the heads of those participating is a great achievement, but is actually rather lame, a fall back position of the left over the past 30 years that has resulted in the untrammelled triumph of the neoliberal economic agenda. If the sole aim of your protest is galvanising the public through your heroic actions of peeing in Starbucks, well, good luck. 

A far better, more practical, focused and impactful version of the protests would be to occupy selected tax havens. Typically tax havens are very small jurisdictions, without large state and security apparatuses, that are very dependent on the outside world, and as Nicholas Shaxson’s Treasure Islands makes clear, play a vastly disproportionate role in the imbalances of the global economy. More companies are registered in the minute Virgin Islands, than any other territory. 

This means - tax havens are vulnerable to small numbers of people. A sit in over just a couple of hundred at the port and airport of an island like Jersey would quickly paralyse the society. Moreover most tax havens are not tinpot dictatorships, but in some sense dependencies of countries that would not allow indiscriminate treatment of protesters, ensuring some degree of safety. Crucially it would be easy to establish clear goals for the protests: an end to tax regimes that allow for global tax evasion on a vast scale, or at least repatriation of certain amounts of tax. Suffice to say the goals could be a little more concrete and achievable than “the end of global capitalism” even if they aren’t exactly easy. 

Plus it would still be a global struggle. Britain would take the Channel Islands; France could have Monaco, which would fall like a pack of cards; Germany could take Lichtenstein; the US could have the various Caribbean tax havens. Occupy camps are everywhere - I saw one recently in Hong Kong - and everywhere there are tax havens. Tax havens as a whole are not subject to the mobility of capital we see in the major states as there is only a finite number of such entities, and major nation states will never be able to compete on tax rates. It is possible for the world to run low on tax havens in a way that it isn’t for financial centres. 

I should say I am not advocating this strategy; just that if the Occupy movement where serious about making a change, there are more effective means of protesting than camping in big all consuming cities, at the heart of a big all consuming system. Attack the system at its weakest points, not its strongest, and you are more likely to see real gains, not just hot air. 

07/10/2011

Metadata

I’ve been talking about metadata a lot recently - on Publishing Perspectives about SEO, and on the Frankfurt Book Fair blog about metadata more widely. Next week at the fair I will be delivering a presentation which examines the history behind the recent changes to Google’s search methodology. After that I will take a break…

This presentation on marketing agencies from BBH’s Mel Exxon was most enjoyable. 

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