“Saving the World”? Gordon Brown Reconsidered by William Keegan
Searching Finance, 2012
Five years on from the financial crash and the world is still picking through the pieces. Most commentators seem to be able to agree on most of the causes, but cures have been harder to find. Sovereign debt is stubbornly high, the global economy still sluggish, and financial institutions are still regularly proving themselves to be any combination of unapologetic, unhelpful, or untrustworthy.
With the ink still drying on the history books, it seems an odd time to be penning a self-declared revisionist tome as the Observer’s chief economics commentator William Keegan has done in Saving the World. It makes more sense though when the specific subject is Gordon Brown, whose move up to the top job following Tony Blair’s resignation was countered by his reputation moving swiftly in the opposite direction. It fell so low so quickly that he is now a figure of ridicule, barely noticeable on the political scene despite still being a standing MP for his Kirkcaldy constituency. We know where it went wrong for Brown; he was a founder of the now popularly-derided New Labour project, he was at the helm of the ship when the country fell into recession following the onset of the financial crisis, he was the chancellor in charge when the country ‘spent beyond its means’, and equally as significantly, the victim of a wearying public. Perhaps the biggest issues though were internal. As Keegan elegantly writes, “his obsessive personality, inability to delegate, and intrinsic disorganisation were to prove inimical to a harmonious and successful premiership”.
Keegan also ably highlights how Brown’s unsuitability to the role of Prime Minister led to his hesitation in calling an election in October 2007 when polls showed he could have won. He ultimately ‘bottled it’, and the public’s mind rapidly settled on Vince Cable’s scything description of how quickly Brown had changed “…from Stalin to Mr Bean”. Whilst time can erode the edges, it’s fair to say Brown currently rests comfortably among the pantheon of British political hate figures.
Yet the author shows that, for all Brown’s faults, he is something of a misunderstood figure, poorly served so far by the reflections of history, particularly in his home country. With a keen historian’s eye and countless quotes from political insiders and commentators of the day, Keegan argues that Brown made the right call on the two biggest questions he faced; on the Euro and the Financial Crisis. On the former he resisted pressures from Tony Blair and the ‘common sense’ of the day to steer Britain away from automatic entry to the single currency and, as a result, kept us clear of what we can now see plainly to be the sinking ship of the Eurozone. Of the latter, his historical studiousness and well-tended international banking relations gave him the knowledge and conviction to act as the crisis unfolded. Keegan shows that Brown was instrumental in getting the key figures of international politics and finance around the table, successfully urging them to accept his plan for recovery, and “saving the world” in the process.
Saving the World: Gordon Brown Reconsidered is not a blanket defence of a questionable record, but a skillful and entertaining acknowledgement that for all his failings, Brown was the “right man in the right place at the right time” to lead the global response to a crisis that, without his decisive intervention, could have become much, much worse. Whether history will, as Keegan suggests, remember Brown more as a ‘hero’ than a ‘zero’, only time will tell. It is possible though that, as Keegan hints in Saving the World‘s final pages, Brown and his Keynesian leanings will be remembered more fondly the longer the current government’s austerity measures continue.
If you’ve read the news over the last couple of days you may be aware of a video of a rather creative protest by a group calling themselves WeAreIntruders, who gatecrashed former Head of HMRC, Dave Hartnett’s retirement do. As Head of Her Majesty’s Revenue and Customs, Dave Hartnett oversaw the ‘sweetheart deals’ with Vodafone and investment bankers Goldman Sachs amongst others, pardoning them of paying billions of pounds of tax, and the group of smartly dressed protesters entered his ‘retirement party’ to present him with a mock award for “Services to Corporate Tax Planning”. The stunt was all the more successful for the fact that many in the audience initially applauded the presentation, assuming it to be genuine. However, a recent article by Calum Fuller in Accountancy Age magazine describes the protest as “ juvenile, schoolyard goading”, and as “puerile, needless and, in truth, nasty tactics” that are “far from conducive to reasoned, intelligent debate”.
Well I disagree entirely. Protests such as this are an absolutely essential part of an active civil society, acting as an effective check and balance on power, by ‘naming and shaming’ those situations and people that damage society as a whole. Creative protest like this is at the core of what marks us out as a mature democracy. Yes Dave Hartnett was celebrating his retirement, but it was the place that it was held (behind closed doors at an Oxford College, a stable of the elite) and the people in attendance (movers and shakers in the world of politics and economics) that so reflected the very nature of the ‘sweetheart deals’ he had been accused of overseeing – perceived as shady handshakes between rich chums in darkened rooms.
Saying that this is puerile and not conducive to reasoned, intelligent debate is nonsense. It’s precisely because of the lack of reasoned, intelligent debate on these issues that protesters feel the need to do what they do. Tax issues are occasionally discussed in parliament and in other blogs, but where people in society don’t feel their voice is being heard through the established channels, they will resort to alternative methods such as protest, to make sure that they are.
In addition, sometimes creative protest can be even more effective than ‘intelligent debate’ in producing the right outcome, and this is potentially a case in point. The beautiful thing about creative protest like this it provokes reactions that can be more revealing about the nature of the issues than any controlled debate could. If you’ve watched the video to the end, you’ll see that the barrister who escorts the protesters out calls them (in his best gentry voice) “trespassing scum” and threatens to “set the dogs” on them. It’s a similar attitude displayed to that of Chief Whip Andrew Mitchell, who swore at the police and called them (by their own account) “plebs” earlier in the week. It shows a sense of entitlement and outrage; that they feel they are above and apart from their fellow human beings. This kind of attitude is at the heart of the Hartnett tax cases – it highlights very clearly that in many places in our society, there is still one rule for the rich, and one for everybody else.
I’ve recently been reading David C. Korten’s excellent (and perhaps seminal) book When Corporations Rule the World. It was first published over 15 years ago but absolutely all of it is just as relevant to today’s world (if not more so) than the day it first came off the presses. The book is a phenomenal commentary on a world dominated by corporate and wealthy interests, and the extent to which we have been duped by a ‘Corporate Libertarian’ system that does not and can never provide global prosperity, democracy, sustainability, or fairness. His gift though is in exposing the transient nature of our current capitalism, showing how it is the culmination of decisions and laws made over the preceding decades all across the globe.
This is important for two reasons. Firstly in showing us that the existing system is just another stage in history, we realise that it is neither permanent nor inevitable. This provides the hope that it can be changed. Secondly, in identifying the historical steps that led to its creation, we can begin to plan its disassembly, and move on to something better. Thankfully Korten identifies what that ‘something better’ might look like.
In the last few chapters he lays this out in detail, but it is his idea of this ‘democratic pluralism’ earlier in the book that provides the theoretical framework for understanding the difference between where we are now, and where we want to be. As Korten sees it, a democratic society contains a Civic, Governmental, and Economic sector. The Civic sector is the cultural essence of society, which through our creativity and relationships brings meaning and expression to communal and individual life. The Civic sector willingly but reluctantly gives power to the Governmental sector to provide safety, security, and the rule of law through democracy so the civic sector can flourish. The government also provides the framework and regulation of a fair, local, market economy which helps deliver prosperity to the Civic sector. In Korten’s view these three sectors work in balance to provide the richness of life which we all seek to find, but many feel is missing. He makes it very clear that this balance positions the Civic sector as the essence of society, with the Governmental and the Economic in service to it.
He thinks that the fatal flaw of Socialism was to elevate the Governmental sector above the Civic and the Economic, suppressing freedom of cultural expression, as well as the efficient functioning of a fair market. Its collapse was therefore inevitable. Likewise, he believes that the current model of ‘Corporate Libertarianism’, which puts the interests of big business and a tiny wealthy minority above any other demographic, elevates the Economic sector above the Civic and Governmental. This he believes can no better deliver global prosperity than the Socialist ideals. Therefore starting from the position of our existing capitalist model; it is only when the Economic sector is bought back under control, with power returned to Governments and democratic processes, and the Civic sector given priority again, will we achieve a sustainable society that we can all look forward to living in.
Tom and I have been a bit quiet on the blog front over the last month, instead preparing for the first of what will hopefully be many whyPolitics training events on money and the financial crisis (amongst other things) – the first of which takes place tonight in Loughborough. The course is free and covers an evening a week for three consecutive weeks. By the end of it we hope attendees will have a better idea of how the UK’s financial systems work, what the financial crisis was/is all about, and how us, the UK, can move forward – all within the context of sustainability. We hope the course will prove accessible even to ‘total beginners’ of finance and economics, but only time will tell if we’ve got that right! Our hope is that it will equip people with some of the information and confidence needed to begin to engage in the political and economic system, and be able to more actively consider the political and media dialogue.
It’s quite possible that we’ll combine the three evenings into a one-day format for future sessions, which will then mean we can more realistically run them further afield. We’ll try and advertise any future courses via this blog, well in advance.
A couple of articles in the news this morning demonstrate, each in their own way, a worrying trend of unquestioning contempt for the function of the State. This kind of contempt is depressing for its lack of hope, but also because (as in these cases) it appears to be irrational. Firstly, the Guardian report that the Department of Health has been exposed running a tax dodge for 25 of its top employees, avoiding (and helping employees avoid) paying National Insurance contributions and income tax. It’s crazy and more than a little ironic that those at the top of the department responsible for the NHS have such a lack of appreciation for the service that they refuse to pay their contributions. These are the same people, all of them on more than £100k a year, tasked with delivering the government’s cuts and efficiency targets for the NHS which has and will see thousands of lower-paid staff lose their jobs.
Secondly, an article by Sue Cameron in the Telegraph castigates the State for the supposedly high level of successful appeals against State judgements ranging from immigration to benefits to parking tickets. The writer proclaims “Whitehall’s hidden scandal” and that the State needs to ‘get it right first time’. She claims that the ‘whopping’ 39% of successful appeals over support allowances and the 63% of similar appeals on parking tickets shows that the State is ‘incompetent’ and submitting people to the ‘dead-weight of bureaucracy’. What she completely neglects to do is provide context for any of her figures.
She says that there were 197,000 appeals against the Department of Work and Pensions over employment and support allowances, and that 39% were successful. This might seem like a lot, but Institution for Fiscal Studies shows that in 2011 the DWP dished out benefits of one kind or another to 30million recipients. That 39% successful appeals out of 197,000 total appeals means that the State got it right first time 99.7% of the time.
Next, she complains that 62% (my math) of the 70,985 parking tickets appealed were annulled. However, depending on which figures you use there were a total of between 8 and 10million parking tickets distributed last year, which gives the State a first-time success rate of at least 99.5%.
Figures for the other two statistics she complains about are harder to find. Immigration figures from the Office of National Statistics put the influx at 590,000 for 2011. From the Telegraph article we presumably sent a further 60,000 back home, so roughly 62,000 of that 590,000 were successful appeals. So even in the legally and practically complicated sphere of immigration, often spread across the vast grey areas between national and international law, the State got it right first time in 88.5% of cases. I have nothing to gauge whether that’s a good figure or not, (no comparisons with other countries, etc) but I would say that I found the figure surprisingly high having been regularly saturated in the view of our ‘failing immigration system’.
Lastly, the figure on School admissions. Again the figures are hard to come by, but there were 25,500 successful appeals out of 513,000 offers in 2011 – leaving a 95% first-time success rate by my count. Dig deeper into the figures and you find that 85% of families were offered a place at their first choice school which means that there were only 77,000 who could have any reason to object. Yet the Telegraph claims there were 85,000 appeals? Clearly some figures are off somewhere – however what this shows is that it’s likely that basically every family that didn’t get what they want appealed the decision. This sounds like a problem with the schools system specifically rather than a hidden scandal of ‘State incompetence’.
So while there may well be some continued work that needs doing on immigration, and the Schools admissions process appears to be very weak (I am unqualified to analyse further), the idea that the State is widely failing in its judgements is absurd. Let’s be clear, the overall general picture in these cases is not one of ‘bungling bureaucracy’, but of a competently-run system. Let’s stop this unquestioning and wholesale contempt for the state, and instead engage in measured discussion on what areas need improving, and how we do it. I might suggest we start by re-assessing the current cuts agenda and ensure that all areas of the state are given the resources necessary to do their jobs properly.
- “Perhaps the sentiments contained in the following pages, are not yet sufficiently fashionable to procure them general favour; a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defence of custom. But the tumult soon subsides. Time makes more converts than reason”
- Thomas Payne, 'Common Sense'