A place of politics, culture (!!) & random subjects from Airstrip One. Noel hopes it will be of interest and/or use to all sorts of voyagers in cyberspace!

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Monday, August 28, 2006

Big Brother and stuff

No, no, not the crap Channel 4 boreathon (pity they didn't do it like the book- human faces being stamped on by boots forever and helmets with rats) but 24/7 surveillance wherever you are. Like this...

It's not always good to share: A government plan for data sharing between public bodies threatens to further undermine civil liberties in the wake of the ID cards debacle
Michael Cross, The Guardian, Thursday August 24, 2006

Ministers are preparing to overturn a fundamental principle of data protection in government, the Guardian has learned. They will announce next month that public bodies can assume they are free to share citizens' personal data with other arms of the state, so long as it is in the public interest.

The policy was agreed upon by a cabinet committee set up by the prime minister, and reverses the current default position - which requires public bodies to find a legal justification each time they want to share data about individuals.

The officials behind the "transformational government" scheme say data sharing could present a more consumer-friendly face to government, and help tackle social problems such as prisoners re-offending.

For example, officials say, when moving house, a citizen would register the change online once with their local authority's "one stop shop". It would update its own records, that of the new local authority, and then of central government, including the electoral register, DVLA and Inland Revenue.

A destruction of liberty

Similarly, on completing a prison sentence, an ex-offender's details would be available to probation officers, local authority social services and the employment service, reducing the risk of people with criminal records disappearing from government records and re-offending.

Simon Davies, of the pressure group Privacy International, described the timing of the new policy as "sick", but said he was not surprised. "It's about the most blatant destruction of liberty we have seen for a while," he said.

Apart from the implications for privacy, widespread data sharing would enable different arms of the state to operate as one body - collecting fines and taxes on behalf of another agency, for example. This would be a major threat to civil liberty, Davies said. "Functional separation [between departments] is an important principle of justice and accountability, for example allowing you to fight a local authority on its own turf," he said. "This effectively dismantles that limitation."

Besides alarming groups concerned about the spread of the "big brother" state, the "transformational government" strategy, under which the new policy was drawn up, has already raised concerns about data protection from the information commissioner.

Contravenes data protection law

Presently, data sharing in government is regulated by several tiers of law. Like commercial companies, public bodies must comply with the data protection act. They are also subject to the common law duty of confidentiality, as well as statutes covering the release of specific sets of data: these can block data sharing even when the citizen concerned gives permission.

In November last year, the Transformational Government strategy drawn up by Ian Watmore, now head of the prime minister's delivery unit, set out proposals for government bodies to share IT systems and other infrastructure to enable public services to be designed around citizens rather than bureaucracies.

Earlier this year, the Cabinet Office revealed that the prime minister had set up a ministerial committee, called Misc 31, to examine data sharing. In early July, the committee, chaired by Hilary Armstrong, minister for the Cabinet Office, agreed to a new statement of the government's position: "Information will normally be shared in the public sector, provided it is in the public interest." Ministers are due to announce a policy based on this position in the week beginning September 11.

Davies said the new policy would end the current "truce" between the privacy lobby and government. "If the government want to play dirty, they'll find themselves staring down the barrels of something akin to the ID card debate. I would hope there's going to be a monumental row." Davies has been at the forefront of those opposing the ID card, which the Labour administration is seeking to introduce.

The new policy appears to contravene a key principle of the data protection act, which is that "personal data shall be obtained only for one or more specified and lawful purposes, and shall not be further processed in any manner incompatible with that purpose or those purposes". Ministers are likely to argue that efficient public administration is not incompatible with other purposes.

The data protection registrar, Richard Thomas, would not comment on Misc 31's decision ahead of the formal announcement. He has, however, previously said that all government data sharing must be in accordance with the data protection act. Last month, he commented that while he supported "sensible" information sharing, the government risked losing public trust if "reasonable expectations of privacy are not met".

The official in charge of making Transformational Government happen, John Suffolk, the government's chief information officer, says there is no intention to create a free for all. "Not all information will be shared," he told the Guardian in an interview last week. Most frequently, data sharing will just be a matter of allowing access to names and addresses, he said.

"This is not about sharing your health record or criminal record. It's about basic data sharing to ensure that services to citizens are seamless." Government databases will still be subject to the data protection act, and accessible only by people who need the information.

Such statements are unlikely to satisfy critics. Even some government IT chiefs have concerns about the new policy. "Who defines the public interest?" asks Glyn Evans, head of business solutions and IT at Birmingham City council, which was well ahead of central government in making its services electronically available. Preserving trust is especially important in local government, says Evans. "These aren't anonymous civil servants viewing your data, they could be your next door neighbour."

Thomas criticised the Transformational Government programme's intention to make wider use of the national insurance number to identify citizens. He "has significant concerns" over whether the existing national insurance number is robust or secure enough to be used as a single identifier for all government transactions.

Originally generated for use in connection with benefits and taxation, the NI number has limitations, he says: "There has been no tradition of individuals keeping the number secure. If the number becomes a single reference to gain access to a wider variety of personal information held by government this poses a significant security risk."

Suffolk says that while no decision has been made, the national insurance database is the most likely candidate to become a central repository of citizens' names and addresses. "They have done a tremendous amount of work on data cleansing."

Whatever policy decisions emerge, Transformational Government's approach to data protection and privacy will face widespread critical scrutiny in the light of the identity card controversy. The new data sharing policy is likely to be set out in terms that emphasise its use in improving the accuracy of information and protecting privacy.

But Evans advocates taking one step further - letting citizens decide which public body has access to which pieces of personal data. While the idea is being tested in local government, "it may be a step too radical for Whitehall," he says.

What the hell's "the public interest"? "Hey, look, you know, its truly is the People's Public Interest..."

Blogging late tonight, 20 to 4 in the morning here in not so sunny London town. Being busy writing articles for the New Statesman. Hopefully they will think them good, publish them and even pay me. Nothing that regular readers (yes, just your good self I'm afraid- again) will be surprised at. One is a critique of "New Britishness", the other a sort of review of Tom Nairn's The Break-Up of Britain, one of the most important political books I've ever read, which was published 30 years ago next year, and had a second edition with a Postscript anticipating New Labour published 25 years ago this Autumn. Originally the two articles were really one, but I managed to disentagle them.

Anglo-Scottish co-operation...

I had given up on pro-English and pro-Scottish political groups getting on and supporting each other, but the English Democrats proved me wrong (rather too far to "the Right" for my liking, but they aren't racist/BNPish)...

Vote SNP in 2007 and connect with the English!

The on-going scandal of English students being the only ones in the UK to face University top-up fees this September had a new twist today when the SNP came out in condemnation at the blatant "anti-English" policies pursued by New Labour, Lib Dems and Conservatives alike.

The SNP have exposed the spiteful anti-English pact between Lib Dems and New Labour in Scotland, who jointly agreed to inflict extra financial penalties on English university students should they try to avoid paying English top-up fees (imposed let us not forget by Scottish and Welsh MPs!!)

In a public repudiation of this disgusting example of blatant anti-Englishness, the SNP have announced their intention to remove all punitive charges on English students wishing to study in Scotland, and give English students exactly the same rights as any other citizen living within the EU if they are elected to the Scottish Parliament next year.

The English Democrats congratulate the SNP for this wholely proper gesture. The EDP condemns all three main political parties in England for their continued discrimination against the people of England and urge all fairminded Scots, to vote for the Scottish National Party in the forthcoming election as it is clear that only the Scottish Nationalists understand the importance of fairness and equality in political life, without it the Liberal Democrats, New Labour and Conservatives will continue their inexorable decline - something we heartily welcome.

The Times
27 Aug 2006 by Ed

Saturday, August 26, 2006

Interview with Gore Vidal

"Never miss a chance to have sex or appear on television."- Gore Vidal.

Dubya being interviewed by Gore Vidal would make very good television...

Gore Vidal By David Barsamian, August 2006 Issue of The Progressive

Gore Vidal is a gold mine of quips and zingers. And his vast knowledge of literature and history—particularly American—makes for an impressive figure. His razor-sharp tongue lacerates the powerful. He does it with aplomb, saying, “Style is knowing who you are, what you want to say, and not giving a damn.” He has a wry sense of noblesse oblige: “There is no human problem which could not be solved if people would simply do as I advise.”

Now eighty, he lives in the Hollywood hills in a modest mansion with immodest artwork. I felt I was entering a museum of Renaissance art. A stern painting of the Emperor Constantine was looking down upon us as we sat in his majestic living room. A Buddha statue from Thailand stood nearby. But all was not somber. He had a Bush doll with a 9/11 bill sticking out of it on a table behind us.

His aristocratic pedigree is evident not just in his artistic sophistication but also in his locution. In a war of words, few can contend with Vidal.

“I’m a lover of the old republic and I deeply resent the empire our Presidents put in its place,” he declares.

Vidal moved gingerly and was using a cane. A recent knee operation left him less mobile. He says, “The mind is still agile but the knees have grown weak.” We sat in upholstered chairs. On a nearby table I saw the galleys of his second memoir, Point to Point Navigation. It will be out this fall. His earlier one, Palimpsest, came out in 1995.

Prolific does not even begin to describe Vidal’s literary output. He’s the author of scores of novels, plays, screenplays, essays. In 1993, he won the National Book Award for his collection of essays, United States. His recent books (he calls them “pamphlets”)—Perpetual War for Perpetual Peace, Dreaming War, and Imperial America—have sold in huge numbers. When I asked him what was the point of his work, he said, “I am chronicling America.” The prose, whether polemical or fictional, is elegant.

Distantly related to Jackie Kennedy, he does not romanticize JFK. “He was one of the most charming men I’ve ever known,” says Vidal. “He was also one of the very worst Presidents.”

He’s been a Democratic candidate for the House from New York and for the Senate from California. Today, he ridicules the Democrats for supineness.

He sees a certain continuity in U.S. foreign policy over the last fifty years. “The management, then and now, truly believes the United States is the master of the Earth and anyone who defies us will be napalmed or blockaded or covertly overthrown,” he says. “We are beyond law, which is not unusual for an empire; unfortunately, we are also beyond common sense.”

I talked with him on a hot afternoon in mid-April.

Q: In 2002, long before Bush’s current travails, you wrote, “Mark my words, he will leave office the most unpopular President in history.” How did you know that then?

Gore Vidal: I know these people. I don’t say that as though I know them personally. I know the types. I was brought up in Washington. When you are brought up in a zoo, you know what’s going on in the monkey house. You see a couple of monkeys loose and one is President and one is Vice President, you know it’s trouble. Monkeys make trouble.

Q: Bush’s ratings have been at personal lows. Cheney has had an 18 percent approval rating.

Vidal: Well, he deserves it.

Q: Yet the wars go on. It’s almost as if the people don’t matter.

Vidal: The people don’t matter to this gang. They pay no attention. They think in totalitarian terms. They’ve got the troops. They’ve got the army. They’ve got Congress. They’ve got the judiciary. Why should they worry? Let the chattering classes chatter. Bush is a thug. I think there is something really wrong with him.

Q: What do you think of the conspiracy theories about September 11?

Vidal: I’m willing to believe practically any mischief on the part of the Bush people. No, I don’t think they did it, as some conspiracy people think. Why? Because it was too intelligently done. This is beyond the competence of Bush and Cheney and Rumsfeld. They couldn’t pull off a caper like 9/11. They are too clumsy.

Q: Today the United States is fighting two wars, one in Afghanistan and one in Iraq, and is now threatening to launch a third one on Iran. What is it going to take to stop the Bush onslaught?

Vidal: Economic collapse. We are too deeply in debt. We can’t service the debt, or so my financial friends tell me, that’s paying the interest on the Treasury bonds, particularly to the foreign countries that have been financing us. I think the Chinese will say the hell with you and pull their money out of the United States. That’s the end of our wars.

Q: You’re a veteran of World War II, the so-called good war. Would you recommend to a young person a career in the armed forces in the United States?

Vidal: No, but I would suggest Canada or New Zealand as a possible place to go until we are rid of our warmongers. We’ve never had a government like this. The United States has done wicked things in the past to other countries but never on such a scale and never in such an existentialist way. It’s as though we are evil. We strike first. We’ll destroy you. This is an eternal war against terrorism. It’s like a war against dandruff. There’s no such thing as a war against terrorism. It’s idiotic. These are slogans. These are lies. It’s advertising, which is the only art form we ever invented and developed.

But our media has collapsed. They’ve questioned no one. One of the reasons Bush and Cheney are so daring is that they know there’s nobody to stop them. Nobody is going to write a story that says this is not a war, only Congress can declare war. And you can only have a war with another country. You can’t have a war with bad temper or a war against paranoids. Nothing makes any sense, and the people are getting very confused. The people are not stupid, but they are totally misinformed.

Q: You’ve called the country “The United States of Amnesia.” Is this something in our genes?

Vidal: No, it’s something in our rulers. They don’t want us to know anything. When you’ve got a press like we have, you no longer have an informed citizenry.

I was involved somewhat with Congressman Con-yers on what happened in Ohio during the last Presidential election.

Conyers is the ranking Democrat on the Judiciary Committee, and he went up there with a bunch of researchers. They went from district to district, and they found out how the election was stolen. He wrote a report that was published by a small press in Chicago. To help out, I said I’d write a preface for him on how the election was stolen. We were thinking that might help. But The New York Times and The Washington Post were not going to review the book about how we had a second Presidential election stolen. They weren’t going to admit it.

A huge number of Americans still believe that Saddam Hussein was responsible for 9/11. You have a people that don’t know anything about the rest of the world, and you have leaders who lie to them, lie to them, and lie to them.

It’s so stupid, everything that they say. And the media take on it is just as stupid as theirs, sometimes worse. They at least have motives. They are making money out of the republic or what’s left of it. It’s the stupidity that will really drive me away from this country.

Q: When were the media better?

Vidal: They’ve never been much good. They belong to the people who own them. But they were better, the level was higher. There used to be foreign correspondents in other countries. There’s nobody abroad now. The New York Times gave up being anything except a kind of shadow of The Wall Street Journal. The Washington Post is the court circular. What has the emperor done today? And who will be the under-assistant of the secretary of agriculture? As though these things mattered.

Q: What do you think of the public advertising of one’s faith among political leaders? They make a show of going to church and participating in ceremonies.

Vidal: Personally I find it sickening, and very much against what our Founders had in mind. Remember that the country was mostly founded by Brits, and England’s always gotten credit for having invented hypocrisy. So we are reflecting our British heritage when we hypocritically talk about how religious we are.

Q: Is the U.S. more like Sparta than Athens?

Vidal: We’re not so good as either. We certainly are not warlike. Spartans were based upon military service. We don’t want that. We want to make money, which I always thought was one of the most admirable things about Americans. We didn’t want to go out and conquer other countries. We wanted to corner wheat in the stock market or something sensible like that. So we are very unbelligerent. We were dragged screaming into World War I. Well, we were slightly enthusiastic about that, but we were very innocent farm people in those days. In World War II, we fought to stay out of that war. And every liberal figure in the United States from Norman Thomas on was anti-war. They were isolationists in the old populist tradition. So we never had a chance of being Sparta.

Q: Talk about the role of the opposition party, the Democrats.

Vidal: It isn’t an opposition party. I have been saying for the last thousand years that the United States has only one party—the property party. It’s the party of big corporations, the party of money. It has two right wings; one is Democrat and the other is Republican.

Q: What can people do to energize democracy?

Vidal: The tactic would be to go after smaller offices, state by state, school board, sheriff, state legislatures. You can turn them around and that doesn’t take much of anything. Take back everything at the grassroots, starting with state
legislatures. That’s what Madison always said. I’d like to see a revival of state legislatures, in which I am a true Jeffersonian.

Q: Do you see any developments on the horizon that might suggest an alternative?

Vidal: Newton’s Third Law. I hope that law is still working. American laws don’t work, but at least the laws of physics might work. And the Third Law is: There is no action without reaction. There should be a great deal of reaction to the total incompetence of this Administration. It’s going to take two or three generations to recover what we had as of twenty years ago.

David Barsamian is the director of Alternative Radio in Boulder, Colorado. His latest book is “Original Zinn: Conversations on History and Politics.”

How to really bring down the West...

Hijacking planes is so passe, Osama...

Sell-out: Why hedge funds will destroy the world
If hedge funds were a country, it would be the eighth-biggest on the planet. They can sink whole economies, and have the potential to crash the entire global financial system. Yet they are beyond regulation. We should be very afraid.
Janet Bush, New Statesman, Monday 31st July 2006

Something ominous is going on in world finance - again. On 11 May, the US Federal Reserve, America's central bank, raised rates and hinted that it might do so again. Wall Street wobbled but stock markets in the emerging economies fell through the floor. Since that day, Colombia's stock market has slumped by 42 per cent; Turkey's by 38 per cent; Pakistan and Egypt by 28 per cent; India by 25 per cent; the Czech Republic by 22 per cent.

Why? These fast-developing economies have been the recent darlings of the world's mobile capital, acting as magnets for multinational corporations seeking new frontiers. Yes, the US economy is still the biggest in the world and changes in US interest rates affect the entire global financial system. But there is something very dark indeed at the heart of this story and it is called the hedge-fund industry - lords of havoc who, a consensus is building, have the potential to be responsible for the next great crash - and nobody knows what to do about it.

Howard Davies, then chairman of Britain's Financial Services Authority (FSA), admitted in 2000 that hedge funds were not very well understood by policy-makers and regulators, but then added: "That is not astonishing in one sense, in that if we do not regulate it, we need know less about it. But it is clear that if we are interested in systemic stability, we cannot ignore a sector which can mobilise around the same volume of assets as the US commercial banking sector."

When Dr Ben Bernanke, chairman of the US Federal Reserve, the most important financial supervisor of all, was quizzed by the US Senate banking committee about whether derivatives - complex financial instruments liberally used by hedge funds - should be regulated, he commented: "Derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and use them properly." This statement came pretty close to admitting that regulators don't have a clue what is going on and are therefore powerless to regulate the funds. Given their sheer size and increasing influence, this is stunning - and scary.

Hedge funds are private investment funds, primarily organised as limited partnerships - in essence, betting syndicates for the very rich. The amount of money they handle, in so far as anyone can estimate this, is mind-bogglingly large. The IMF's best estimate is $1trn; industry professionals reckon $1.5trn. If hedge funds were a country, it would be the eighth-largest in the world. To invest in one of these funds, you have to put in a minimum of $1m, although that initial investment is chicken feed compared with what can be earned - if that is the right verb for what amounts to global-scale gambling. The US Institutional Investor Magazine reckons that the top 25 hedge-fund managers in 2005 earned on average $251m each in 2004 - compared with $10m for the CEO of a typical top 500 US corporation.

Hedge funds are not new - just notorious. They started to take off properly in the late 1970s when floating exchange rates and volatile interest-rate movements transformed the capital markets, and gathered momentum as technology and electronic trading became increasingly quick and soph isticated. The funds were - and are - run typically by a tight group of traders, backed usually by fewer than a hundred individuals prepared to commit a great deal of money into their hands. Today, it is estimated that there are 9,000 funds and what started as a US phenomenon is spreading - though the FSA estimates that there are at present only 325 hedge funds based in the UK.

The key features of these funds are that they trade in eye-watering risk and they are barely regulated. The two are related. Because they answer to nobody but themselves, hedge funds have side-stepped regulation and can do as they like. What they like is risk - and their main tool is "leverage" - borrowing to play the markets. It is not unusual for a hedge-fund investor to control $100m in securities with only a $5m down payment. Of course, that means that when a bet goes wrong, it goes spectacularly wrong. If the hedge-fund industry's positions in the market are 20 times the cash they actually hold, their potential impact on the world financial system is about equal to US GDP.

That is why the emerging-market stock markets have taken such a battering over the past two months. Hedge funds poured money into emerging markets in the search for high returns, able to borrow billions relatively cheaply while interest rates were low. But as soon as the cost of borrowing increased they had to bail out rapidly, leaving the developing economies to clean up the mess.

Of course, recent losses were preceded by spectacular gains. India's stock market had doubled in two years, hailed by the country's leaders as proof that the Indian economy had taken off. For some, at least, it has - but the stock-market boom has greatly exaggerated India's progress. There have been huge inflows of equity investment from foreign investment banks and hedge funds and a large portion of that money came not from New York, London or Frankfurt, but from Mauritius, an Indian Ocean island that just happens to be a tax haven.

Yet no economy can possibly benefit in the long term from a tsunami of "hot money" crashing in and rolling out as fast as it had arrived. For a long time, India protected its economy with moderate capital controls, but its resistance to neoliberalism finally crumbled as it entered a frantic horse race to attract the increasing number of jobs offshored by developed economies. Now it has call-centres and IT development galore; but the quid pro quo has been a new and intense vulnerability to unstable financial flows.

Devil-may-care money

For the 35 per cent of India's population that the World Bank estimates lives on less than $1 a day, that is a gut-wrenching prospect. The long-term solution for any economy trying to develop in a sustainable way is to rely less on devil-may-care foreign money, institute a framework that encourages long-term investment, and look to its own growing numbers of affluent - some in the diaspora - to invest in their country's future. In the short term, the clamour is growing for hedge funds to be regulated.

Naturally, it is possible to argue that to the brave go the spoils. If hedge-fund investors are prepared to take the risk, why shouldn't they reap the rewards? If they live by risk, they should be allowed to die by it, too - in January the Eifuku Fund, based in Japan, lost $300m in a week.

This argument might hold water if hedge-fund gam- bling were purely a private matter. It isn't. When Enron, the huge US energy trading company that had increasingly relied on risky hedge-fund investing and leverage, collapsed in 2001, 4,500 people lost their jobs and more than $1bn of their pensions. Some $60bn was wiped off the value of US stock markets.

Enron's core business was failing - or had been hijacked by the greed and venality of its management. But hedge funds have the potential to wreck perfectly healthy and well-run companies. One senior British banker told me: "You talk to any FTSE-100 company and they live in fear of the hedge funds. If they choose to short your shares [a contract in which shares are borrowed for a set period on the bet that they will go down in price, and are then bought back, hopefully more cheaply, and repaid to the institution that lent them] you're fucked."

Hedge funds can arrest the development of whole econ omies, and they have the potential to crash the financial system. It has almost happened before. In 1998 the Fed persuaded the "Fourteen Families" (an apposite Mafia reference) of Wall Street - the major banks - to cough up money for a $3.6bn bailout for Long-Term Capital Management, a hedge fund whose bets went wrong. The Fed said at the time that LTCM's failure had been abrupt and disorderly and had posed "unacceptable risks to the American economy".

Nasty surprises

Has the lesson been learned? Of course not. Only a year after LTCM went under, the huge California Public Employees' Retirement System won the go-ahead from its board to invest up to $11bn - or a quarter - of the state pension fund's port folio in hedge funds. The FSA recently cited a J P Morgan survey which estimated that UK pension funds had allocated 4.8 per cent of their portfolios to hedge funds at the end of 2004, more than double the figure the previous year. Railpen, the UK railway pension fund, has invested £600m of its assets in a hedge-fund partnership, and Sainsbury's pension scheme has trebled its exposure to hedge funds.

So an increasing amount of ordinary people's money is available for use at the global gambling table. But how much could be at risk? We just don't know - and that means there is scope for any number of nasty surprises.

Even worse, as the regulators have admitted, they don't really understand this industry well enough to be able to deal with it. In June, the hedge-fund industry held a jolly at Knebworth, dubbed Hedgestock. Look at the titles of just two of the discussions: "'I can't believe it's not Beta' - Simple Beta, Complex Beta, Virgin Beta, and ABS factors - any Alpha left to spread around?"; and "'Incubator Alligator?' - sowing seeds, but do they stay for a cigarette?". One feels some sympathy for the Fed and the FSA.

In a world where, increasingly, we have only to twitch to be regulated it is pretty noteworthy that hedge funds are the exception. Either, in some way that we aren't clever enough to understand, they are of overwhelming importance to our collective well-being; or the regulators have in effect colluded with the wild frontiers of modern-day finance. They continually argue that hedge funds, by taking risks others won't, play a useful role in oiling the wheels of global markets.

Now, even they are alarmed that a hedge-fund-triggered meltdown is coming. Yet their efforts to move in on the hedge funds have been half-hearted at best, the habit of laissez- faire hard to shake off. Even when a serious regulatory effort has been attempted, it has been outmanoeuvred. In February America's Securities and Exchange Commission finally started requiring hedge-fund managers both within the United States and outside to register if they have more than 14 US-based investors and $30m or more in assets. In June the rule was thrown out by the US court of appeals for the District of Columbia circuit, on the grounds that it was "arbitrary" and didn't make a compelling case. Two senior Democratic senators are now trying to legislate to reverse that ruling.

Surely the Europeans, the last bastions against Anglo-Saxon free-market mania, will ride to the rescue. Well, not exactly. The EU internal market and services commissioner, Charlie McCreevy, recently ruled out new rules to regulate hedge funds, saying that they played a crucial role in putting the "fear of God" into company boards, to the benefit of all. A group set up to study hedge funds for the European Commission recently argued that the European industry was adequately regulated and needed to be protected from onerous new rules threatened from the United States.

So, hedge funds are increasingly looking to relocate from the US to Europe. It looks as if the wanton boys of the Dan gerous Sports Club will be allowed to carry on playing their virtual-reality money games - even closer to us poor sods trying to earn our livings.

Inside the hedge: a day in the life
by Al Fahunter

6.45am: I am in front of my multiple screens at our St James's-based offices after a Tube ride from north London, beating the rush hour and allowing me to read up on news and concentrate on the ordre du jour.

By 8am, when all European markets open, the phones stop ringing for about 45 minutes. This is when we decide what we'll do for the morning, trading-wise, until the US market opens or corporate and economic data feeds through. Today's story is that AMD is bidding for ATI in the US - great news if you hold European semiconductor stocks in Europe and Asia like me. The bad news is that Bank of Cyprus has pulled its counterbid for Emporiki Bank after a thumbs-down from Central Bank of Cyprus. I'd been building a position in Emporiki in the hope that Crédit Agricole would trump the Cypriots. I'm now looking at a €2 loss per share.

I concentrate on special situations in stocks and bonds - easily translated into M&A investments and corporate events, which have performed very well this year. I buy shares in the bid target and, depending on the bid structure, hedge my position by selling other shares or bonds - allowing me to leverage (ie, borrow) against the assets I manage. This usually inflates the bet two to three times the size of my investment, allowing me to reduce the risk and accentuate the gains.

My diary has calmed down for the summer, but the corporate reporting season is about to kick off: some companies are still vying for my votes or funds, so lunch is sushi at the desk while I catch up on the trading update. Like the 8am opening in Europe, the US opening at 2.30pm is followed by a period of tranquillity. Markets in Europe close at 4.30pm and we have the end-of-day auctions. I still have to attend a meeting and get a round-up from our traders. The gym beckons around 7pm; I have a quick drink with a broker at Just St James to catch up on gossip. Having missed Arki Busson's charity evening, which raised £18m in one night in June (it clashed with World Cup trips to Germany), I was dying to know who bid for the yoga session with Sting. If only I hadn't had to listen to the glowing praise for Arsenal's new stadium from one of my Arsenal-supporting brokers who attended the Dennis Bergkamp testimonial last Saturday, I could have called it a good day.

Al Fahunter is a pseudonym

Hedge funds by numbers

$1.5trn Total amount of money managed by hedge funds worldwide

9,000 Estimated number of hedge funds today

$250bn Estimated value of the Asian hedge-fund industry by 2010

$750,000 Amount that GLG Partners was fined for alleged insider trading by its star hedge-fund manager, Philippe Jabre

Research by Daniel Trilling

Terror and Science

If he's still alive (properly alive, as opposed to being kept alive like Ingsoc kept Immanuel Goldstein alive) I wonder what Whitney Houston fan Osama is thinking about the fact that every time someone makes the least commotion on a transatlantic flight these days a couple of fighter planes are sent up? I bet he's thanking Allah that didn't happen on September 11th 2001 over the North East United States...

It seems that most people here have no faith in the Government telling the truth, or anything like the truth, about The War Against Terror any more. To quote John Arbuthnot from 1735 "All political parties die at last of swallowing their own lies", and it seems New Labour has reached the point when it can dig that hole no more.

It seems the same is true in the USA. The piece below by Ted Rall (via Lew Rockwell's blog) draws on an article by The Register which basically suggests that the "plotters" would have had to take over the toilets on the plane for a suspiciously long time for the liquid explosives that were supposed to be at the heart of the "plot" to work...

Americans Shrug at Phony Binary Explosives Threat

LOS ANGELES--Attention, citizens of the national community: stay tuned for a HomeSec alert! A fiendish plot has been uncovered! Terrorists loyal to the sinister forces of Eastasia have been apprehended! It is another glorious victory for the homeland! All hail Oceania!

It was hard not to suffer a 1984 flashback on August 10th, when UK authorities and their rhetorical American partners claimed to have rounded up more than two dozen British Muslims accused of--or so they claimed--participation in an elaborate plot to commit "mass murder on an unimaginable scale." According to Britain's national Crown Prosecution Service the suspects planned "to smuggle the component parts of improvised explosive devices onto aircraft and assemble and detonate them on board" as many as ten passenger jets bound for the United States from England.

The airline industry, long teetering on the edge of financial catastrophe, could easily be shoved headlong into oblivion as the result of harsh new security restrictions. Travelers are being asked to arrive at the airport three hours before their scheduled departure times because of longer lines at shortstaffed security checkpoints. All liquids and gels--staple components of cosmetics, toothpaste, medicine and other toiletries--have been banned from carry-on baggage, adding at least another hour to the trips of carry-on-only passengers who previously never had to wait for their belongings to disgorge upon the baggage carousel.

Industry analysts say travelers aren't afraid of being blown up by terrorists. They're right. Hundreds of millions of people fly each year; very few end up shredded among the wreckage of an office tower. But passengers are afraid. They fear that the government's draconian security measures will make them miss their flights. That real and wholly justifiable fear has already cut ticket sales by as much as 20 percent.

A mere two days after British officials announced that they had foiled the dastardly Islamofascists terror plot, and the Bush Administration crowed that this news somehow proved that they had once again kept us safe, Americans weren't fazed in the least. People polled by Newsweek said, 54 to 26 percent, they still didn't want to give up their carry-on bags. As the Republican Party continued its suicidal stay-the-course mantra into the November midterm elections, the sound of a Great National Shrug greeted the latest triumphalist shrieks from America's telescreens.

Could it be, despite our leaders' long-established record of always telling us the truth no matter what, that we can't be sure there was a plot at all? Or that, if there was a plot, it wasn't viable--certainly not nearly enough to justify the risk to the airline industry or hassling hundreds of millions of travelers?

According to the respected and irreverent British technology publication The Register, the plot--if it existed--was a joke. Smuggling the component parts of triacetone triperoxide (TATP)--the liquid explosive we've been told was the object of the wannabe jihadis' vengeance fantasies--and successfully mixing them into a brew powerful enough to bring down a plane would require skills far beyond the capabilities of, well, anyone.

"First," wrote The Register, "you've got to get adequately concentrated hydrogen peroxide. This is hard to come by, so a large quantity of the three per cent solution sold in pharmacies might have to be concentrated by boiling off the water...Take your hydrogen peroxide, acetone, and sulfuric acid, measure them very carefully, and put them into drink bottles for convenient smuggling onto a plane. It's all right to mix the peroxide and acetone in one container, so long as it remains cool. Don't forget to bring several frozen gel-packs (preferably in a Styrofoam chiller deceptively marked "perishable foods"), a thermometer, a large beaker, a stirring rod, and a medicine dropper. You're going to need them.

"It's best to fly first class and order champagne. The bucket full of ice water, which the airline ought to supply, might possibly be adequate...Once the plane is over the ocean, very discreetly bring all of your gear into the toilet. You might need to make several trips to avoid drawing attention. Once your kit is in place, put a beaker containing the peroxide/acetone mixture into the ice water bath (champagne bucket), and start adding the acid, drop by drop, while stirring constantly. Watch the reaction temperature carefully. The mixture will heat, and if it gets too hot, you'll end up with a weak explosive. In fact, if it gets really hot, you'll get a premature explosion possibly sufficient to kill you, but probably no one else.

"After a few hours--assuming, by some miracle, that the fumes haven't overcome you or alerted passengers or the flight crew to your activities--you'll have a quantity of TATP with which to carry out your mission. Now all you need to do is dry it for an hour or two."

The conclusion is clear: "Certainly, if we can imagine a group of jihadists smuggling the necessary chemicals and equipment on board, and cooking up TATP in the lavatory, then we've passed from the realm of action blockbusters to that of situation comedy."

The "plot," or at least the prosecution thereof, is already unraveling. Two "terrorists" have been released. Of the remaining 23, only 11 have been charged. Of those charged, only eight face charges related to the "plot."

Indeed, perhaps the technology which is supposed to make us safer in T.W.A.T. is more dangerous than anything wannabe loverboys of 72 virgins could ever dream up. For example, electronic passports. The piece below (hat-tip to no2id) comes from mobile security firm Flexisis:

In order to increase the security of United States travel documents, the Government has developed a new ‘electronic passport’ system. This new passport system, slated for deployment in October 2006, will contain RFID tags: chips that will wirelessly send passport and biometric information to an inquiring RFID reader. Through extensive research and real world experimentation, Flexilis has discovered a significant issue in the State Department’s proposed solution. This issue, if not immediately addressed, could put American passport holders at increased risk while traveling abroad for the ten year lifetime of the passport deployment.

RFID e-Passport Vulnerability

Starting October 2006, new U.S. passports will contain RFID (Radio Frequency Identification) chips which hold an individual’s picture and personal information. These chips can be “read” wirelessly from a distance of several feet. In order to prevent thieves from stealing sensitive personal data, the State Department has included several security measures in the proposed passport standard.
Reading a passport’s RFID chip requires a password generated by scanning the machine readable data on the inside front cover. Additionally, a small shield in the front cover is supposed to only allow wireless passport reading when the booklet is open.
The current system prevents attackers from accessing the onboard RFID tag when a passport is fully closed; however, when in a pocket, purse, or briefcase, a passport has a very high probability of being slightly open. Our research has shown that, even when open only a fraction of an inch, the current proposed passport will fail to prevent unwanted RFID communications.

Although the current shield is often ineffective, the chip’s password prevents personal information from being unknowingly disclosed; however, the simple ability for an attacker to know that someone is carrying a passport (and where he or she is carrying it) is a dangerous security breach.

Additionally, it may be possible to determine the nationality of a passport holder by “fingerprinting” the characteristics inherent in each country’s RFID chips. Taken to a logical extreme, this security vulnerability could make it possible for terrorists to craft explosives that detonate only when someone from the U.S. is nearby.

A better solution utilizes a dual cover shield and a specifically designed RFID tag assembly which is able to shield the passport until it is significantly open, not just a fraction of an inch. Thus, even when your passport is slightly open in your pocket, purse, or briefcase, you are protected from malicious data-theft, and (in a pessimistic future) RFID-equipped terrorists.

Even though no personal information is disclosed due to the failure of the current shielding system, such a breach of security has a real potential for people to be hurt, and, given the time until implementation, has a real potential to be corrected with a better solution.

So e-passports may make Americans more vulnerable to terror attacks. Knowing that it's American technology, it'll probably be taken up by our lot here with gusto ("Hey, look, you know, it truly is the People's Passport...").

Stuff on Latin America

What does one make of Hugo Chavez, President of Venezuala? He seems to get up the nose of the Bush Admin, and he seems pretty popular with the poor of his country.Of course, it hardly goes without saying that much of the hostility of the Bush Admin and its cheerleaders towards Chavez is to do with the fact that Venezuala has a lot of oil.

However, being the non-interventionist Little Englander that I am, I wouldn't support sending troops to support him, just as I wouldn't help the Bush Admin to overthrow him. If people want to volunteer in a private capacity to take part in either, go ahead, put your gun where your mouth (or pen, or keyboard) is, but if it all ends in tears and you lose your passport somewhere in downtown Caracas, you shouldn't expect your local embassy to help you out.

However, as the US is so militarily stretched now, it can't send the Marines and 82nd Airborne Division over to Caracas to sort the upstart out. Support a botched coup d'etat, as happened in 2002, seems to be about the size of it at the moment. Plus I guess the US military top brass probably have no idea if Hispanic American soldiers would be prepared to shoot their fellow Latinos. The same doubts about the loyalty of US troops firing on their own "kith and kin" probably influences US planning vis-a-vis Mexico at the moment.

I suppose the US will have to stick to projecting its "soft power" in Latin America, until further notice (or bring back the draft). For instance, US-backed "people power" will be supported. Any other sort of "people power" will have to be ignored if at all possible, as the situation in Mexico at the moment shows.

'People power' is a global brand owned by America:The US and the western media back protests over controversial elections when it suits them, but are silent over those in Mexico
Mark Almond, The Guardian, Tuesday August 15, 2006

A couple of years ago television, radio and print media in the west just couldn't get enough of "people power". In quick succession, from Georgia's rose revolution in November 2003, via Ukraine's orange revolution a year later, to the tulip revolution in Kyrgyzstan and the cedar revolution in Lebanon, 24-hour news channels kept us up to date with democracy on a roll.

Triggered by allegations of election fraud, the dominoes toppled. The US secretary of state, Condoleezza Rice, was happy with the trend: "They're doing it in many different corners of the world, places as varied as Ukraine and Kyrgyzstan and, on the other hand, Lebanon ... And so this is a hopeful time."

But when a million Mexicans try to jump on the people-power bandwagon, crying foul about the July 2 presidential elections, when protesters stage a vigil in the centre of the capital that continues to this day, they meet a deafening silence in the global media. Despite Mexico's long tradition of electoral fraud and polls suggesting that Andrés Manuel López Obrador - a critic of the North American Free Trade Agreement (Nafta) - was ahead, the media accepted the wafer-thin majority gained by the ruling party nominee, Harvard graduate Felipe Calderón.
Although Mexico's election authorities rejected López Obrador's demand for all 42m ballots to be recounted, the partial recount of 9% indicated numerous irregularities. But no echo of indignation has wafted to the streets of Mexico City from western capitals.

Maybe Israel's intervention in Lebanon grabbed all the attention and required every hack and videophone. Back in 2004 CNN and the BBC were perfectly able to cover the battle for Falluja and the orange revolution in the same bulletins. Today, however, even a news junkie like me cannot remember a mainstream BBC bulletin live from among the massive crowds in Mexico City. Faced by CNN's indifference to the growing crisis in Mexico, only a retread of an old saying will do: "Pity poor Mexico, so far from Israel, so close to the United States."

Castro's failing health gets more airtime than the constitutional crisis gripping America's southern neighbour, which is one of its major oil suppliers. Apparently, crowds of protesters squatting in Mexico City for weeks protesting against alleged vote-rigging don't make a good news story. Occasionally commentators who celebrated Ukrainians blocking the main thoroughfares of Kiev condescend to jeer at Mexico's sore losers and complain that businessmen are missing deadlines because dead-enders with nothing better to do are holding up the traffic. Ukraine's Viktor Yushchenko was decisive when he declared himself president, but isn't López Obrador a demagogue for doing the same?

The colour-coded revolutionaries of the former Soviet Union had a pro-western agenda - such as bringing Georgia and Ukraine into Nato and the EU - but in Latin America radicals question the wisdom of membership of US-led bodies such as Nafta and the WTO. The crude truth is that Washington cannot afford to let Mexico's vast oil reserves fall into hands of a president even half as radical as Venezuela's Hugo Chávez.

But didn't the western observers certify the Mexican polls as "fair", while they condemned the Ukrainian elections? True, but election observers are not objective scientists. The EU relies on politicians, not automatons, to evaluate polls. Take the head of its observer mission, the MEP José Ignacio Salafranca: as a Spanish speaker in Mexico, Salafranca had a huge advantage over many of the MEPs in Ukraine who draped themselves in orange even while en mission - but he is hardly neutral. His rightwing Popular party is an ally of Calderón's Pan party, which is in power in Mexico. Calderón was immediately congratulated by Salafranca's colleague Antonio López-Istúriz on the "great news".

The days of leftwing fraternalism may be over, but the globalist right has its own network, linking the Spanish conservatives, American Republicans and Calderón's Pan party - and they provided the key observer. To paraphrase Stalin: "It doesn't matter who votes, it matters who observes the vote."

Salafranca has a track record as an election observer. In Lebanon's general elections in 2005 he had no problem with the pro-western faction sweeping the board around Beirut with fewer than a quarter of voters taking part and nine of its seats gained without even a token alternative candidate. "It is a feast of democracy," he declared. His mood changed when the democratic banquet moved to areas dominated by Hizbullah or the Christian maverick General Aoun. Suddenly, "vote-buying" and the need for "fundamental reform" popped up in the EU observation reports.

Unanimity on the scale seen across Lebanon suggests that the cedar revolution - despite the hype - did nothing to promote real democratic pluralism. Hizbullah's hold on the south is the most controversial aspect of the sectarian segmentation of Lebanese society, but everywhere local bosses dominate their fiefdoms as before. Similarly, more scepticism about Ukraine's revolution would have left people better informed than the orange boosterism that passed for commentary 18 months ago.

But Mexico is different because it is so under-reported. The cruel reality is that "people power" has become a global brand. But like so many global brands it is owned by Americans. Mexicans and any other "populists" who try to copy it should beware that they're infringing a copyright. No matter how many protesters swarm through Mexico City or how long they protest, it is George Bush and co who decide which people truly represent The People. People power turns out to be about politics, not arithmetic.

Mark Almond is a history lecturer at Oriel College, Oxford

Of course, the USA has a lot of blood on its hands in Latin America. If the Soviet Union had treated the populations of its "sphere of influence" in Eastern Europe between 1945 and 1989 the same way the United States had treated & Latin America during the Twentieth Century, the Americans would have nuked Moscow years ago. Most of the military juntas that ruled much of Latin America for much of the Twentieth Century had as much popular legitimacy as the puppet Communist Parties that ruled the Eastern Bloc until the end of the 1980s. If Lech Walesa had been a Guatemalan independent trade unionist activist and Vaclav Havel an El Salvadorean dissident intellectual in the early 1980s they would have soon ended up in ditches courtesy of the local death squads.

It goes without saying that keeping of control of a country in one's "sphere of influence" doesn't have to be crude and excessively violent. The Soviets never really understood that. Sending troops (either Soviet or local) onto the streets was often the first option when the locals got angry in the Eastern Bloc, and the lack of viable alternative means of maintaining their dominance was one of the reasons the Soviets lost control of their "allies" in 1989.(BTW I have a feeling the Communist nomenclaturas in the USSR and the Eastern Bloc would still be in power today if they had established two ruling parties who fought elections against each other mostly on matters of presentation and style and occasionally swopping the positions of government and opposition, defusing most discontent in wider society in the process. Having two parties representing different wings of the ruling class seems to keep things under control in the USA. To quote the old joke: the USA is a one party system, but being the USA, there's two of them). If only the Soviets had men like John Perkins twenty years back, the CPSU would still be in charge and the Warsaw Pact would be working just fine...

A hit man repents: John Perkins didn't wield a gun - he wasn't even a paid-up CIA agent - but he did have nefarious ways of making countries around the world bend to the will of the US. Until his conscience got the better of him and he looked for other ways to change the world
Gary Younge,The Guardian, Saturday January 28, 2006

On November 24 2002, Lucio Gutierrez swept to power in Ecuador's presidential election. It was a momentous victory for the populist, leftwing leader who had pledged support for the poor indigenous Indians in a country where 60% live in poverty.

The way John Perkins tells it, within a week Gutierrez had a visitor. "An economic hit man walked into his office and said, 'Congratulations, Mr President, I just want you to know that over here I've got a couple of hundred million dollars for you and your family if you cooperate with your Uncle Sam and our oil companies. And over here I have a man with a gun in his hand and a bullet with your name on it.'"

Within two months of his election, Gutierrez had apparently made his choice. Implementing a swingeing austerity programme that attacked the very livelihoods of the people who elected him, he raised fuel prices by more than 35% and froze public sector workers' salaries for a year.

"It's a particularly tough position to be in," admits Perkins. "If you're really conscientious, you're probably going to compromise. You're going to say, 'I've got to stay in office. I can do better than anyone else, but somehow I've got to appease these people.' And the whole time that economic hit man is in your office he's saying, 'Remember Noriega, remember Allende, remember Lumumba. Remember, remember, remember.' There's a long list of guys who did not go along and were either overthrown or assassinated ... They may say it more subtly, but the message is very clear."

Two years later, a huge popular uprising forced Gutierrez from office. Now an interim government awaits elections for a new leader. Within a few days of that election, says Perkins, another "economic hit man" will return with another ultimatum.

With his tales of hit men, assassinations and coups, Perkins, now 60, sounds as if he has just slipped off a grassy knoll and landed on the deck of his waterfront home in West Palm Beach, Florida. But for him this is no conspiracy theory. The hit men he refers to are not metaphorical. "I mean literally and physically they will walk into your office," he tells me. And he should know - for a decade, Perkins was one of them.

In 1972 Perkins went to see the then dictator of Panama, General Omar Torrijos. Torrijos was a nationalist who was eager to wrest control of the Panama Canal from the US. Perkins went in to read him the riot act and came out with what sounded like an agreement. Some years later, Torrijos started talking to the Japanese about building a larger, sea-level canal for Panama that would have undermined American influence and corporate interests in the area. One night in 1981 Torrijos died when his Twin Otter aircraft crashed under mysterious circumstances. Perkins is convinced he was killed by US interests who placed a bomb on the plane. Had he lived, Perkins writes in his book, Confessions Of An Economic Hit Man, "He would have served as a role model for a generation of leaders in the Americas, Africa and Asia - something the CIA, the NSA [National Security Agency] and the EHMs [economic hit men] could not allow."

Economic hit men resort to such heavy-handed tactics, says Perkins, only when all other means of leverage have failed. The rest of the time they would employ a mixture of bribery, sex, flattery, prostitution, distortion, extortion, abduction and invasion to get their own way. "Sex was a very common tool used by economic hit men," Perkins says. "It was not uncommon for us to seduce wives of oil company executives because that was a way of gaining information and learning things about their husbands."

If the threats of the economic hit men don't persuade, the "jackals" will come in to make good on them. The jackals, says Perkins, are the CIA-sanctioned heavy mob who foment coups and revolutions, murder, abduction and assassination. And when the jackals fail, as was the case in Iraq, then the military goes in.

Economic hit men, Perkins says, work entirely separately but completely in concert with the state. Perkins never once reported to a US government agency - but he is in little doubt that the US government always knew and approved of what he was doing. His task, he says, was to ensure that US business interests came out on top, regardless of who won an election, and that the American wealthy were further enriched, regardless of who was impoverished as a result.

In his role as an analyst for the international consulting firm Main, Perkins worked for what he calls the "corporatocracy" - global big business. His first task was to persuade foreign governments to take large loans for huge engineering and construction projects conducted by US companies such as Halliburton and Bechtel. To achieve this, Perkins produced reports that would vastly exaggerate the benefit such projects would bring to the nation's economic development, thereby making it vulnerable.

Then, he writes, "I would work to bankrupt the countries that received those loans so that they would be for ever beholden to their creditors, and so they would present easy targets when we needed favours, including military bases, UN votes, or access to oil and other natural resources."

For all of this, Perkins earned a substantial wage and through his 20s and 30s lived large on a lavish expense account. Based in Boston, his work took him to, among other places, Indonesia, Saudi Arabia, Ecuador, Iran, Colombia.

But misgivings that he harboured from the outset grew with his salary. At 36, Perkins was about to be made the youngest partner in Main's history - a promotion that would have made him a millionaire by the age of 40. Fearing the seductive lure of his new position, he decided he had to leave.

He says it was like having an angel and a devil sitting on each shoulder and calling him in different directions. "I had both these guys shouting at me and I could turn either way I wanted. I couldn't turn away from the good conscience. It kept whispering in my ear. But I could live according to the bad conscience because everybody around me was."

The devil kept waving his wallet, but gradually Perkins retreated. He quit Main in 1980, although for several years after he could not resist continuing to accept freelance consulting jobs.

His recruitment into the world of economic hit men sounds like a scene from a James Bond movie. The story began with him as a young man looking for information about Kuwait in a Boston library shortly after he had started working for Main. An attractive, older woman named Claudine, whom he had never seen before, sat opposite him and slid over a book with the precise information he was looking for and her business card. "I've been asked to help in your training," she said.

Perkins, who was married at the time, started an affair with Claudine, who simultaneously inveigled him into the world of economic hit men. "At the time I thought she really cared so deeply for me," says Perkins. "But, of course, now I see it was part of her job."

A few years earlier, he had sought deferment of going to fight in Vietnam by applying for a job at the National Security Agency. After several interviews and a day of psychological profiling, he was offered a job to train as a spy. He never took the job in the end, joining the peace corps instead, but he is convinced that the results of his NSA tests identified him as having the ideal insecurities to be inducted as an economic hit man. Raised by Calvinist parents in an environment as emotionally cold as a New England winter, his vulnerability was not difficult to find. Claudine was there to finish off the job. "She was amazingly effective at what she did and she learned from my NSA tests that I had the three big weaknesses of modern culture - that is, the weakness for money, power and sex - and she exploited all of them. In many respects, she appealed to all my fantasies. And she started by giving me the sexual fantasy."

Her induction speech was melodramatic and definitive. "You're not alone," she told him. "We're a rare breed in a dirty business. No one can know about your involvement - not even your wife. I'll be very frank with you, teach you all I can during the next weeks, then you'll have to choose. Your decision is final. Once you're in, you're in for life."

Claudine disappeared almost as mysteriously as she appeared, leaving Perkins to make his wildly extravagant forecasts designed to corrupt and bankrupt developing nations. He never needed Big Brother or Sister, or any more instructions, after that. He knew the template he had to work to and, so long as he fulfilled the task, everyone was happy and he was handsomely rewarded.

"I wasn't making bucketloads of money," he says. "For many of those years I was making a decent salary, but it certainly wasn't what lawyers were making. But I had phenomenal expense accounts. I was living like a king. I was travelling first class, best hotels, best food, women always there. I could throw money around, but my salary wasn't that great."

He was fully aware of the consequences of his actions. "I knew that building electric power plants probably would increase the gross national product in a country, even if not by as much as I was predicting, but I also knew that it wouldn't help the majority of poor people in these countries because they didn't even have a light bulb. It doesn't matter what the hell GNP does in these countries, because it's not going to help the poor people. So I knew the promise wasn't true."

But Perkins carried on anyway. His conscience piqued him, but with all the positive reinforcement around him, it couldn't quite stop him in his tracks. "There is a great line in the new Harry Potter movie where he says we can do the right thing or the easy thing. And I could do the easy thing for me because it was lucrative and enjoyable... I was being invited to speak at Harvard and other universities around the world on these subjects. I was being patted on the back by Robert McNamara, the president of the World Bank. I could convince myself that I was doing a good thing."

But morality would eventually trump venality. Damascene moments are rare in real life. David Brock, the former rightwing muckracker who made a career trashing the Clintons and Anita Hill, and later repented, wrote: "As a young zealot, I disciplined myself to ignore the soft tug of my own conscience and see only what I was supposed to see." And so it was with Perkins. But it was less of a blinding flash of light than an evolutionary process that would eventually turn him inside out - among other things, it sounds as though he just got bored and started growing up.

"I was burned out and I really wanted to start a new life," he says. "There had been a lot of women, but that had also cost me a marriage. I had found a new woman [his current wife] and I was very fond of her. And I was no longer going to live this life of travelling and big expense accounts. I was spending all this time in the office, deciding who gets raises and who sits in the window seat. I had become a top-level manager."

None the less, leaving was an "awful wrench" which left him in a daze. "I spent the next couple of weeks going down to the Quincy market in Boston and I would sit there on one of the benches reading Shakespeare. I was lost and didn't know what to do with myself."

He was rescued from his disorientation by a call from Main. A client had said they would sign up for some work only if he were leading the team. "I jumped and then, as I'm falling through midair thinking, 'Holy shit, what have I done?' a trampoline appears at the bottom and it's my own company again. That got me back into it again. Not exactly back in the game again. Not doing true EHM stuff. Not building empire. But back on the circuit working for corporate America."

It was during this period that Perkins founded an alternative energy company, Independent Power Systems. He remarried and moved to West Palm Beach, on Florida's hurricane-prone coastline, where he will interrupt his descriptions of coups and assassinations to catch the cry of an osprey. The energy project lasted 10 years, until 1990, when he sold his company and turned his attention to working with indigenous Indians throughout the Americas and on protecting the environment. He wrote five books, about indigenous cultures, shamanism, ecology and sustainability. The front page of his website reads, "John Perkins: Dedicated to changing the world."

By then he had become active, if not an activist, in antiglobalisation campaigns. He believes the protests that target the World Trade Organisation meetings and other showcase events of international capital, such as the demonstrations in Seattle in 1999, have a big impact. The guardians of global capital are powerful, he says, but they are also mortal and emotionally vulnerable.

"Corporate executives are fear-driven," he says. "They are afraid of many things. One of them is competition. One of them is not making enough money. One of them is not making as much money as somebody else. They're fearful. They're fearful of their board of directors, they're fearful of the next quarterly report, the bottom line, the price of stock. They live in constant fear of what tomorrow is going to bring. That includes being fearful of anything that is critical of their corporations or their way of life. So I think that demonstrations have a very powerful effect. The corporate executives are going to stand there and tell you that isn't true. But once again they are operating from a place of fear. Many of the corporate heads today grew up during the 1960s and the anti-Vietnam demonstrations, and they saw the power of that."

With the help of just one thinly veiled threat to keep his mouth shut, Perkins kept his vow of silence regarding the work of economic hit men until September 11 changed his mind.

"Back then, we never conceived of the US being attacked by someone who was living in a cave in Afghanistan," he says. "It was a lot more subtle a world in my time. We never worried about Che attacking us. We did worry about Cuba for a while, but that was the only thing we worried about. Now the stakes have changed radically... Bush is a great catalyst. I think he's pushing us to the edge."

It was then that Perkins wrote his memoir. The book was lionised by the alternative media on publication in the US and took off, despite being ignored by the mainstream media. "The New York Times and the other papers never mentioned the book except on their bestseller list," he says. Today, as he embarks on a book tour, he fears "a crazy man" could shoot him. "It's always a crazy man," he says. "John Kennedy was killed by a crazy man, Robert Kennedy was killed by a crazy man, Martin Luther King was killed by a crazy man. It's the crazy man who walks up to you after you've done a reading at a book store and sticks a gun in your gut and shoots you, and then he gets taken off some place and probably killed by somebody else or put in a straitjacket, and nobody really knows what really happened."

During the height of McCarthyism, President Eisenhower said that even when former communists confessed and turned on their former comrades, he could never quite trust them. They are "such liars and cheats", he told his attorney general, "that even when they apparently recant and later testify against someone else for his communist convictions, my first reaction is to believe that the accused person must be a patriot."

Perkins certainly has the zeal of a convert. "America has to change," he says. "The people of South America have sent a very strong message to America and to the world. Latin Americans have sent us a message. Middle Easterners have sent us a message. The voters of the US have to take the next step. It's up to us now. We must take this seriously. We're a nation of people that represents 5% of the world's population and consumes 25% of the world's resources. Simple mathematics will tell you that you can't sell that model to China or Africa or India. But we don't want to hear that. Because if you're one of the 5%, then you're leading a damned good life. Even the poorest among us are leading a much better life than the much less poor in the rest of the world."

At times it seems as though Perkins is using the knowledge he acquired as an economic hit man to assuage the wrongs he committed in the past. "We outlawed slavery back in the 1860s in the US, but we've taken it abroad. If you were to tell an executive at Monsanto or Nike or Wal-Mart that we use slave labour, they would say, 'No, we're paying them $2 a day. That's better than anyone else around them.' But the truth is we always paid slaves. Slaves on the plantations got free room and board. That's more than what most of these people in these other countries are getting; $2 a day probably doesn't buy their families room and board."

At other times it sounds as if Perkins is overcompensating. "Terrorism is a very poor choice of words," he says referring to the terror attacks of September 11. "I am in no way condoning the actions of a man like Osama bin Laden, who killed thousands of mostly innocent people. But, on the other hand, a lot of the people around the world who, in one way or another, support what we call terrorist movements, are basically very nationalistic people. They are fighting for their families, they're fighting for survival, they're fighting for their lives."

Mostly innocent?

"I have no doubt that there were people in the World Trade Centre who weren't innocent and who were part of this whole [economic] process," he says. "But they were probably a very small proportion of the people who were there. Most of the people killed there were innocent."

His analysis of how the "corporatocracy" works hand in glove with the American government to keep profits high and developing nations in check is entirely plausible. Much of it, particularly in Central and South America, is more or less a matter of public record. It's the details - crazy men, a seductress with a dossier on him - that are hard to swallow.

It wouldn't be the first time a powerful country such as the US has gone to extraordinary lengths to preserve its power. Tales of German and Italian nationals (to name but a few) being picked up on the street by the CIA and whisked to third countries where they are tortured, interrogated and then released months later without charge, beggar belief. But they are true. On the other hand, this wouldn't be the first time a good argument and compelling story has been embellished for effect. There is simply no way of knowing.

Softly spoken and articulate, Perkins does not talk like a braggart. You don't get the impression that he's looking for the dramatic and self-serving response to a question.

"The overall scheme is not a conspiracy," he says. "The corporatocracy is ourselves - we make it happen - which, of course, is why most of us find it difficult to stand up and oppose it. Conspiracy means doing something illegal by definition. The overall scheme is not. But within the overall schemes there are plenty of conspiracies going on."

Unlike most men of his age and generation, corporate, anticorporate or otherwise, Perkins listens and engages. In short, he is very believable; it's his story that is challenging. One wonders, for example, why a newly elected leader would need an economic hit man to come into his office and read him the riot act when capitalism delivers a pretty clear warning all by itself. When it was obvious that the leftwing Workers Party leader Luiz Inacio Lula da Silva would be elected president of Brazil in 2002, the invisible hand of the market picked him up by the scruff of the neck and slapped most of the socialism out of him. In the three months between his winning the vote and being sworn in, the currency had plummeted by 30%, $6bn in hot money had left the country and some agencies had given Brazil the highest debt risk ratings in the world.

"We are in government but not in power," said Lula's close aide, Dominican friar Frei Betto. "Power today is global power, the power of the big companies, the power of financial capital."

In short, there was nothing an economic hit man could tell Lula that the Financial Times hadn't said already. Lula had choices, argues Perkins, pointing to Hugo Chávez in Venezuela as an example of a South American leader from a smaller economy who weathered the storm. "Lula had a lot more control than he admits to having," he says. "The same thing happened to Lula that happened to Gutierrez - he was read the riot act. Today, they are a lot more crude."

And then there is the small question of why, given Claudine's warnings, he is alive to tell the tale?

"The word's out there," he says. "The book's sold 200,000 copies and is translated into 20 languages. What's getting rid of me going to do?"

In short, whatever the United States gets up to Latin America, democracy has as much to do with it as the USSR's behaviour in Eastern Europe had to do with establishing democracy there.

Random thoughts

Yours' truly above, on Kitsilano beach, Vancouver, September 2004. As you can see, the photo is now proudly at the top of my blog (I still have no idea why the latest post jumps down after a couple of seconds- I hope it doesn't spoil your enjoyment (?!) of the blog).

Briefly on the subject of Vancouver, I bought the Time Out guide to Vancouver not so long back. I am a sucker for any tourist guides (whether in book or article form) of Vancouver- I guess it is a form of soft porn to me. Much of it wasn't too much of a surprise to me. However, the guide did slag off the press in Vancouver, which was a bit of a surprise to me, as I was quite impressed by the papers (both paid and free) when I have been over there. Compare London's Metro to Vancouver's version and there is no contest. Similarly Dose & 24, the other two Vancouver daily freesheets last time I was over, were impressive- I mean, one had a full page article on HL Mencken! I think Time Out's Guide was disparaging as it sees a potential nemesis. That is, a free weekly guide to London on the lines of the Georgia Straight. Time Out magazine is a good guide to entertainment possibilities in London (my advice to visitors to London is buy a copy of that if you want to know what is going on and where to go) but it is a few quid. If someone came up with a free equivalent a la the Georgia Straight for London it would hurt Time Out to say the least.

Anyway, enough such free paper talk. Lots to post, but I did come across this while wandering around the Net this morning. I enjoyed Pulp Fiction when it first came out, although now I do think Tarantino is a bit of a one-trick pony (you can't see him directing a version of War and Peace can you?). Anyway, you may want to test the quiz below...

What Pulp Fiction Character Are You?

You are the king of smooth -- enough said.

Take the What Pulp Fiction Character Are You? quiz.

Sunday, August 13, 2006

Crying wolf once too often?

I'm thanking my lucky stars that I didn't decide to fly off somewhere in the past few days. Can you imagine having to stand in queues for hours at an airport and having to basically put everything you need for the cabin in a big plastic bag? I hope the airlines/airports made allowances for people having to put loads of stuff into their luggage & not charge for stuff put in the hold for being over the limit.

As for the "plot", in a way I hope that something is found because I think people are getting "war weary." After all the post-September 11th "alerts", arrests that led to those held in custody being released without charge, and the fact that most people know we were led into war with Iraq on the basis of a pack of lies, I think the next "alert" will not be taken seriously by the general public, if nothing turns up this time. It does not help that the Home Secretary John Reid rather resembles Buster Bloodvessel, lead singer of Bad Manners.



BNP= Bomb Nasty Palestinians?

Well, it seems there will be a ceasefire in the Israel-Lebanon conflict in the next couple of days and about time too. Too many innocent people have died in both Israel and Lebanon. Furthermore, it seems that the propaganda war has been won by Hezbollah, as the Israelis have been unable to crush them quickly, as the Israelis thought they would.

Well, war brings together strange alliances and bedfellows, but I've found one on my own doorstep. My piece on the BNP led to a comment being posted by Storm Front, a (Neo-)Nazi website, listing all its latest articles. I had a quick gander, as I do with anyone who leaves a message with me (even all those tedious spambots), & I came across the headline BNP spokesman praises Israel, insults WNs [ie "White Nationalists"]. I had a look and it quoted from an article by the BNP's "independent legal advisor" Lee Barnes. The whole article by Mr. B can be read on the BNP website if you are inclined, but the Stormfront was frothing at the mouth at such bon mots as:

These so called ‘Nationalists’ that attack Israel at the whim of the media can also be found standing shoulder to shoulder with Far Left activists, Communists, the United Nations and various repugnant Islamic terrorist groups, and yet never seem to think about the logic of them doing so. Any ' alliance' that involves nationalists agreeing with the media and communists etc is based either on stupidity or a misunderstanding of the nature of the issue. They should start understanding the future, instead of navel gazing into the past....

For decades the lunatic fringe of the Nationalist movement has said that the media is controlled by the ‘Jews’ and Israel. The reports from the BBC, and the rest of the British media, are so anti-Israel and pro-Hezbollah that such a contention has been revealed to be total rubbish. The fact is that Israel have adopted one of the most restrained invasions in world history. They have leafleted the areas where they are about to strike before they hit those targets. Thats not something NATO did in Serbia when it bombed the Serbs to assist the Kosovan Muslims in their campaign of ethnic cleansing. When they bombed the trains and TV station they did not warn the public and the media beforehand....

As a Nationalist I can say that I support Israel 100% in their dispute with Hezbollah. In fact, I hope they wipe Hezbollah off the Lebanese map and bomb them until they leave large greasy craters in the cities where their Islamic extremist cantons of terror once stood. The 21st Century is the Islamic Century. Unless we start to resist the threat of Islamic extremism then within 100 years the West will have become Eurabia....

Israel is the only living organic nationalist state on the planet. They live only as they still have the will to fight and wage war. The West is now a senile culture, it sleeps in dreams of its former glory whilst a new generation of barbarians is beseiging its gates. In its quest for gold it has ignored the real dangers it has created for us all.

I wonder what all those pro-Israelis in the media who denounce anyone opposed to anything Israel does as "anti-semitic" would make of a head honcho in the BNP supporting "Israel 100% in their dispute with Hezbollah"?

Another footnote from the BNP article is the Socialist Unity piece which declared Sean Gabb to be pro-BNP. This is cobblers (I should have said that in the post). I've read one of his books Dispatches From A Dying Country: Reflections on Modern England (2001), and some of his Libertarian Alliance pieces & he is a Libertarian Conservative, not some BNP stooge. Dr. Gabb is not my cup of tea politically 100% (quelle surprise!). However, he is interesting, & anyone opposed to the war in Iraq and say "Today, I feel a greater affinity in important respects with the followers of Noam Chomsky than with people like Kenneth Clarke and Tony Blair, who are supposed to stand between me and the Chomskyites" (Dispatches From A Dying Country, p.xiii) can't be all bad! He also has a website.

I thought I'd show this article below to show that Sean Gabb is not a stooge of Nick Griffin. It is also interesting on two other counts. First, it was published on the Lew Rockwell website. It proclaims itself pro-market, anti-state and anti-war and gives the Bushies a good verbal kicking. I try to ignore its anti-socialist diatribes on the grounds that being Americans, Lew Rockwellies use "socialism" as a swear word for anything they don't like. Second, Dr. Gabb predicts the next few years in British politics. I'm still convinced that the next General Election will probably lead to a Cameroonie/Lib Dem Orange Book/Disaffected Blairite "National Government" coalition who will "modernise" & "reform" us all to death, but a pure Cameron government is still a possibility, as is a Gordon Brown one. Anyway, here's Dr. Gabb's view of where we are going (and his thoughts on the BNP).

Mark Oaten, Rent Boys and the Secret Police: A View of How England Is Governed at the End of Its History by Sean Gabb, January 24, 2006

At a dinner party last Wednesday, I fell into conversation with a friend who is also a friend of Mark Oaten. He – for those of my readers who do not live in England or in the present – was at the time the home affairs spokesman for the Liberal Democrat Party, and was standing for the leadership of his party. I heard from my friend that Mr. Oaten's office had just been burgled. We passed an interesting ten minutes speculating on which of his rivals had commissioned the burglary, and what might have been found. We agreed on looking forward to Thursday morning for the newspaper reports.

Except for a paragraph in The Guardian, there were no newspaper reports of the burglary. The big news instead was that Mr. Oaten had withdrawn from the leadership contest. The lack of coverage of the burglary, together with concentration on its probable effect, suggested some involvement by the secret police. But why should it matter to them, I asked, who led the Liberal Democrat Party? And what was the nature of the dirt they had found in his office and used against him?

The second question was answered this morning by The News of the World. This revealed how Mr. Oaten had been consorting for some time with male prostitutes, and that these had on at least one occasion been paid to humiliate him with what the reporter described as "a bizarre sex act too revolting to describe." Bearing in mind what sexual acts do get routinely described, and even shown, in the British media nowadays, the mind reels at what Mr. Oaten must have been doing. Not surprisingly, he had already resigned from the Liberal Democrat front bench, and his political career is probably over.

I turn now to the first question. Why should the secret police take any interest in fixing the election to lead the Liberal Democrat Party? Why destroy Mr. Oaten? His views, after all, were about the closest of any of the candidates to those of the other party leaders. He would in no sense have promised any radical departure from the consensus. Yet he has been destroyed, and with a memorable brutality. Why?

My answer is that Mr. Oaten was destroyed because he was foolish enough to stand in the way of the latest stage in the reshaping of our politics. He fell victim to a conspiracy.

I grant – I have no factual evidence for what I am about to say. No one has taken me aside and whispered into my ear, or given me classified documents. Aside from having heard about the burglary last week, I have no more information than anyone else. This being said, the facts as we have them do suggest a hidden cause. I could state the facts and reason back to this cause. However, I am not writing for some learned journal, and I find it more entertaining to assume the cause, and then show how it provides a scheme of explanation for the facts.

I assume that the ruling class of this country – or a significant group within it – has lost confidence in Tony Blair as Prime Minister, and in the Labour Party as a governing force. This, if true, is the main fact in our politics. Indeed, it has become the connecting thread for the whole present narrative of politics in this country.

Now, some of my friends – and one was with me at that dinner party of last Wednesday – believe that there is something called "The Blair Project," and that the content of this is determined by and connected with nothing more than the momentary electoral convenience of Mr. Blair. They laugh at me if I insist that there is any more significant connecting thread for events.

For all they laugh, they are wrong. It is possible to see, during the past 25 years in at least this country, a movement towards a new settlement in politics. This movement has continued regardless of who has occupied which office, and regardless of what party has won which election. It is clear that the ruling class – or that loose coalition of politicians, bureaucrats, lawyers, educators, and media and business people who derive wealth and power and status from an enlarged and active state – wants an end of liberal democracy. The desired new settlement is one in which those at the top or with the right connections can enjoy the most fabulous wealth and status, and in which their enjoyment of these can never again be challenged from below. We, the ordinary people, are to be stripped of our constitutional rights – no freedom of speech, no personal or financial privacy, no procedural safeguards in the criminal law. We are to be taxed and regulated to what counts in our own culture as the edge of the breadline. This is on the one hand to provide incomes for clients of the ruling class, and on the other to deprive us of the leisure that might allow us to understand our situation, and of the confidence that might allow us to challenge it. In any event, every organ of the ruling class is at work on promoting ideologies of boundless submission to the new settlement.

At the same time, structures of accountability that emerged in the 17th and 18th centuries are to be deactivated. Their forms will continue. There will be assemblies at Westminster. But these will not be sovereign assemblies with the formal authority of life and death over us all. That authority will have been passed to various unelected and transnational agencies. And so far as the Westminster assemblies will remain important, our votes will have little effect on what they enact.

We are passing into the sort of world that existed in much of Europe before the French Revolution – a world of diverse and conflicting sources of authority, all equally unaccountable. The great simplification of authority that happened in Europe after 1789, and that had happened over two centuries earlier in England, was a product of nationalism; and simplification was followed by accountability and then by liberalism. This sort of reaction is in future to be made impossible by promoting movements of people so that nations in the old sense disappear, and are replaced by patchworks of nationalities more suspicious of each other than of any ruling class.

The progress of this counter-Enlightenment can be seen in the statute book – from the removal of the unanimity rule in jury trials in the Criminal Justice Act 1967, to the European Communities Act 1972, to the subsequent Criminal Justice Acts, to the Proceeds of Crime Act 2002, to the Civil Contingencies Act and the Terrorism Act 2005. In these, we have a clear movement towards despotism. This movement did not begin in 1997. The Election of the Blair Government marked no change of direction – but only of pace. The policies of state we have at present have not been set because they suit the electoral convenience of Tony Blair. Mr. Blair became Prime Minister because he seemed at the time best suited to carry forward policies of state set by others.

But his usefulness is at an end. He is no longer wanted by those who matter, and his party is no longer wanted.

Therefore, the Conservative Party has been brought back from the dead. It has been given a leader who has accepted almost everything done by Labour since 1997, and whose objections are confined to those areas within which the ruling class is itself divided. Because of what he is – or of what he says and does – Mr. Cameron has been cried up by our controlled media as a man of outstanding charm and vision. In contrast, the Government is every day reviled in the media for some new dereliction – alleged "paedophiles" allowed to teach in schools, or complicity in the use of torture by the Americans, for example – that would once have been discussed in terms too restrained to cause instability.

My advice to anyone who likes to gamble is to bet on a Conservative victory at the next election. Do not suppose that this will be a government of conservatives. Just as the Labour victory in 1997 caused no break in continuity, so the replacement of Labour will in turn change nothing fundamental. But there is to be a change of faces at the top.

All that stands in the way of a Conservative revival is the effect on our electoral system of the Liberal Democrat Party. This has benefited since 1997 from the oblivion to which the ruling class and its media condemned the Conservatives. It holds several score seats taken from the Conservatives, and splits the anti-Labour vote in scores of other seats.

Therefore, Charles Kennedy was forced earlier this month to resign as Liberal Democrat leader. The cover story was that he was a drunkard and had been useless in his position, and that the challenge came from Menzies Campbell. So far as I can tell, he had been pretty effective – more so than most party leaders. As for Mr. Campbell – let us, by the way, stop recognising the titles handed round within the ruling class: now that our Constitution is no longer liberal or democratic, its honours are to be regarded again as mere feudalistic baubles – I doubt he is bright enough to tie his own shoe laces. Mr. Kennedy was forced out because he was too effective as party leader for the Conservatives to recover. He was threatened with a personal destruction so horrible that he resigned on the spot and was glad to call himself a drunk in public. Mr. Campbell was then told to get ready to preside over the electoral collapse of his party.

Then Mark Oaten announced he would run for the leadership. Given his public views, he might have thought himself the preferred candidate of the ruling class. He misread the situation. He was probably warned, in the usual elliptical way, that he should withdraw from the contest. He did so too late. The reporters had already been briefed, and the front pages cleared. By then, he had been too much of an irritant, or was too unimportant, to save.

The nature of his sexual tastes had no bearing on the decision to break him. I have never met a Member of Parliament who was not obviously into drink or bribes or unconventional sex. The secret police make sure that no one who cannot at the right moment be pressured into conformity will come close to being elected to Parliament.

Nor have the Liberal Democrats been the only minor party targetted for destruction. The UK Independence Party is dead as an electoral force. There is a limit to how much infighting a political party can survive. UKIP has been torn apart by agents of entry and of provocation, and is headed for collapse. Because of its authoritarian structure, the British National Party is less open to such attacks. Therefore, its leader has been put on trial for political offences that carry a maximum sentence of seven years. Since I believe Mr. Griffin is himself an agent of the secret police who has gone beyond his brief, I suspect the present trial in Leeds will end in a compromise. Do not expect the BNP to continue offering in future the sort of challenge to the new settlement in our politics it seemed until recently on the verge of offering.

So, lucky Mr. Cameron. All he has to do now is ensure the ruling class remains disenchanted with the present Government, and hope that enough of the electorate fails to see what is being done to the country and will continue to legitimise a settlement that in its sordid authoritarianism taints the preceding thousand years of English history.

But if what is happening in England now is distressing and even shameful, it is also compulsively interesting.

BTW, hasn't the whole Tommy Sheridan libel trial left the Scottish Socialist Party shattered almost beyond repair?

I disagree with Dr. Gabb on is his belief that Mrs. Thatcher's economic "reforms" did great good for the country. As far as I'm concerned she was a "useful idiot" (to use Lenin's phrase) of the City and transnational corporations, left us trailing the USA, selling us out bigtime to the EU (despite wrapping herself in the Union Jack), broke the back of our manufacturing industry, wrecked our coal industry and urinated North Sea Oil up the wall. Despite this, Dr. Gabb is not a "useful idiot" of corporate capitalism as this piece from Kevin Carson's website demonstrates:

Tuesday, April 19, 2005
Sean Gabb Gives the Corporatists Nine Kinds of Free Market Hell

From the latest Free Life Commentary. Sean Gabb recently spoke at a debate on "Free Trade vs. Fair Trade" hosted by Oxfam and Christian Aid. Although he expressed some doubts after the fact about his effectiveness (he is not, he said, a good speaker given such time constraints), Sean packed quite a bit of rhetorical force into his short speech. The ASI's Alex Singleton (now of the Globalization Institute) used the first half of the free trade side's time to give a speech that, from Sean's summary, sounds to me pretty much like what you'd expect from that quarter (although that's my characterization, and mine alone). Sean, using the other half of the time alloted to his side, proceeded to preach the old-time free trade religion of Cobden and Bright, and to damn the transnational corporatists to hell. Among my favorite parts:

If you think that I came here tonight to defend multinational corporations and the international government institutions, you have chosen the wrong person. These are dishonest. They are corrupt. They are incompetent. They have blood on their hands.

But do not suppose for a moment that the world trading order as it actually exists is liberal or more than incidentally connected with free markets. A free market is a place where individuals and groups of individuals come together to transact voluntary exchanges without any backing of government force. To call the actually existing order liberal – or “neo-liberal” – is as taxonomically accurate as calling the old Soviet Communist Party syndicalist. That order is based on tariffs, subsidies and a web of other often invisible regulations. The international institutions are a projection of Western states. The multinational corporations are creatures of these states. They shelter behind the privilege of limited liability. They get their political friends to cartelise markets, and do favours in return.

This is not market liberalism. It is a fraud played on us all by our ruling classes – these being those politicians, bureaucrats, educators, lawyers and media and business people who derive wealth, power and status from an enlarged and activist state.

In his later assessment of the speech in Free Life Commentary, he added:

....I grow increasingly convinced that allowing the creation of joint stock limited liability corporations was one of the greatest legislative mistakes of the 19th century. Their existence is based on a separation of ownership from control. The owners are released from all responsibility. The controllers form a separate class of corporate bureaucrats little different in outlook from civil servants. The usual psychology operates. They will commit immoral acts for their organisations they might not consider committing for themselves. The owners will assent. The legal privileges and unlimited lifespan of these corporations let them grow to enormous size and wealth. The opportunities exist for highly effective immorality. Collectively, they become part of the state apparatus, and work to destroy true, unregulated enterprise.

These corporations could not exist in any natural economic order. I have heard other libertarians argue that they might emerge without legal privilege on some loose contractual basis. But I do not agree. The shareholders would still be liable in tort, and that alone would deter them from any involvement with a business that they did not personally control. As for the utilitarian argument, that large undertakings need large companies, I also disagree. So long as it showed an acceptable return on investment, there is no project too big to be taken on by clusters of sole traders and partnerships. No doubt, things like the Channel Tunnel would not have been built – but I fail to see how not having that would have made the world a poorer place. Even if some highly valuable projects might not be undertaken, their lack would be compensated by the greater general innovation to be expected in an order of small, unregulated firms.

Sean concluded his assessment rather modestly:

On balance, it was worth attending. I waved the flag for the Libertarian Alliance. I handed out several dozen business cards.

He accomplished much more than that. The audience included Martin Khor of the Third World Network, along with a whole gaggle of people from Oxfam. Their agenda for addressing the evils of corporate globalization is, as Sean said in his speech, an ineffectual one of "kumbaya socialism." But most of the evils they object to, and much of their analysis of those evils, is right on the mark. It's in their proposed solutions that they go wrong; and I think many in the anti-globalization movement are amenable to rational persuasion, if they ever heard sound economic arguments from a free market advocate they didn't have good reason to distrust. Sean's speech was possibly the first free market libertarian argument they ever heard that wasn't vulgar libertarian boilerplate, nor a disingenuous cloaking of the interests of state capitalist global corporations behind "free market" rhetoric. Perhaps some seeds were planted that night.

posted by Kevin Carson | 5:53 PM

Larry Gambone said...
Excellent speech from Sean! He does a definitive demolition job on the pretentions of the neocons and their vulgar libertarian bum buddies. While your typical leftist argument only goes half way, exposing neocon talk about free markets and free enterprize as fraud and hypocrisy really knocks them to the ground.

Looks like all of us democrats, "Left", "Right" and "Centre" may have to stand together against the the guns of the "Far Centre" on the one side and the guns of the Religiously and Racially Obsessed on the other...