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Posts Tagged ‘America’

The Erosion of Public Goods: Time to Rally

24/02/2011 1 comment

The Middle East is engulfed by the rage of millions. Its heartening to see so many realise their rights and finally mobilise to oust their dictatorships and demand a better quality of life sans white people, tanks and jets. Western governments are eager to piggyback on this public outrage despite supporting said tyrants for decades. This rage is not isolated.

We are inspired to take every breaking story as self-contained, sensitive to the inner dynamics of the event and the history of the town, city or country. Recent stories, such as  the protests in Wisconsin, the 50,000 projected job losses in the NHS here, and the upheaval of ancient regimes in the Middle East are all incredibly different issues, but are they?

I believe there is something more at work here, and to notice as such is considerably dependent on assessing the various strands of history which have led different populations to demand a better quality of life. The working and middle classes have simply had enough, everywhere, and are finally waking up to the possibilities of living in a democracy.

We band the word “democracy” around like its a done deal in the West – like its a product we manufacture and sell to the world with an ambiguous one-glove-fits-all instruction guide. Make no mistake, the democratic deficit in the West (see U.K) is a stark problem we have to address at length for there to be any progressive legislation which tackles gross inequality.

Therefore, we must be careful not to make “the banks” a scapegoat. No doubt, they are grossly dangerous organisations which actively promote inequality and simply reward wealth with wealth, but they, like everything which operates in society, are dependent on legislation which allows them to do what they do. Banks are simply not accountable, governments are.

The recent history in the United States regarding the two major (now homogeneous) political parties is a testament to what has befallen all Western countries to some degree or another regarding this last point. Nowhere in the world has such a metamorphosis taken place in the political arena given the strength and diversity of its culture.

During WW2, taxes were at an all time high in the U.S. During the boom of the 60’s and 70’s, this started to change because of the emergence of a strong pro-business, free market lobby. The Republicans enjoyed the attention of these lobbyists and took it upon themselves to pen friendly legislation. Nothing has changed there. What of the Democratic Party?

Back then, the Democrats relied on a strong labour movement embodied by powerful unions, who, without the vast riches of giant corporations, could still do one thing all political parties valued above all else: organise the electorate. Yet, the labour movement was soon splintered and abandoned by the Democrats.

This was because the activists on the left became disillusioned with lacklustre and unimaginative union leadership. Their usefulness spiralled into oblivion as different bodies of the movement started pulling in other directions, such as the growing anti-war sentiment, or feminism, or the environment. What was a clear mission became blurred by the broad spectrum of interests which emerged from the movement.

For big business and the Republicans, their interest was the singular goal of acquiring wealth, and therefore power – together creating a working relationship to acquire both respectively.

Thus, the cynical leadership of the left saw unions as becoming defunct, inefficient, and unable to do the one thing they wanted them to do – organise behind the party come campaign time.

This snippet of American history is vitally important to understand what happened there next, and what is happening here today.

Big business saw its opportunity to hold both parties in thrall to its financial muscle. The Democratic Party finally towed the line the corporate lobbyists were setting in order to keep pace alongside the Republicans. Taxes have steadily been in decline since the 60’s, and during the last 30 years, the top 1% of the population have been raping the income chart.

 

This is not to mention corporate tax levels, which have plummeted despite astronomical profits.

Reason? “We create jobs with that money”. Yes, you do, and pay them 185 times less than what you get (if they’re lucky). This is while co-opting the labour market by standardising that low wage amongst fellow CEOs and Gov. officials at the golf course on Sunday. Ahem, back to reasoned assessment…

 

Charts courtesy of motherjones.com – where you can find many more revolting ones to shake your fist at.

Now, to be in the American government, one has to be rich. Super rich, in fact. Campaign costs are always footed by corporate interests eager to have friends on both sides writing the law. It is a classic business model: dominate the market by controlling all production outlets – Kind of like Starbucks opening two shops on the same road. You win or you win.

The consequence in politics is that you limit choice and freedom.

The second half of the 20th Century can be remembered as the 50 years where the siege against public goods in society swayed in favour of big business. The U.S. has taught us that much, as they serve as something of a blueprint for the current government in the U.K. as it pursues increasing the wealth and prosperity for the blue-blooded upper classes.

It remains a fact that political parties don’t care about the electorate. To them, voters are an alien mass of hands and feet which somehow gives them power. What they do value is those who can organise the great unwashed into making a favourable decision at the ballot box. The policy has always been about seeking stability – at home and abroad.

That is, stability in funding for the political party, and the stability of low trade costs for the corporate friends who had bankrolled them into office.

The outrage in the Middle East shines a great fat light on this point. The U.S. and other Western governments have admitted to seeking stability over democracy in this region, and achieving neither (Condoleezza Rice in Cairo, 2005). They will want you to believe this sentiment has changed. It hasn’t.

The West are vocally supporting these uprisings not because they view democracy as an objective good, but as something contingent on the same old fashioned notion of stability. Now, they think Arabs living in oppressive dictatorships will behave better in a democracy. It has nothing to do with democracy as an idea in and of itself – it is still secondary to stability.

This is a microcosm of a larger point. The assault against the public good, as seen with its steady erosion in the U.S, the old/new Conservative ideologues in the the U.K, and flagging kleptocracies in the Middle East, and all the dictators around the world propped up by one foreign element or another – it all comes down to a great and engineered shift in risk.

Public goods are the bedrock of society. Not only do they limit the market with regulations, no access zones and such like, they give citizens a space where they do not have to relentlessly keep competing with each other economically. The key to big business strategy here is destroying all public goods and replacing them with individual and involuntary risk.

The risk element is important to understand, as seen with the recent financial crisis. Banks failed at the roulette table and the taxpayer bailed them out. This embodies the individual paying the cost vs. business undertaking risk. This is also why the wealthiest 1% have enjoyed such a grotesque rise in income over the poor over the last three decades.

When we win, they win bigger. When they lose, we lose bigger. This relationship is a relatively new phenomenon and has only been brought about by legislation enabling corporate entities to have more rights and lower rates of tax than the individual. A bank is liable to pay 1% in corporation tax on profits of £11.6bn. The individual always loses.

And the working individual must lose for big business to succeed in the way it has done. Corporate strategy focuses on keeping people collectively weak and dependent. It is a weird dynamic, because on one hand, new technology is personalising our media and simultaneously bringing people together regardless of government or corporate interests.

Yet, the same corporations depend on our weakness to organise to demand accountability in government, and better conditions in society and the workplace. They want to provide the leadership and the laws, but are creating the conditions with which we can empower ourselves once again.

It is the old capitalist joke: they would invent the only weapon that could destroy themselves if they thought they would be made supremely rich by it.

And they have.

The protests in Wisconsin are a throwback to the dogged labour movement which is steadily awakening once again. The downtrodden workers of the wealthiest country in the world remember the public good wistfully now more than ever. Sometimes when you are at your lowest, you are at your highest.

The people in the Middle East are fed up with their installed dictators, and one by one, by popular will, these dictators will fall on their swords for the public good, for better working conditions, and for a free and democratic vote – something we cannot even do here in the West given the myriad of business interests involved in a modern political campaign.

In the U.K, we are in the middle of it all, and by virtue of that and our history, we can contribute to the cause only by example.

This means not repeating the mistakes of the past by identifying a handful of leaders who will ultimately fail under the combined pressure of the entire corporate lobby with all its instruments of coercion and persuasion.

This means going after those accountable as an organised network emboldened by what democracy is capable of delivering here and everywhere it is championed. The public good is not just the street lamp, or a bench, or a park. It is workers rights, fair wages, health care and the freedom to organise.

The stories are indeed standalone, but the movement is global.

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Debt Management to Become a Standalone Course in High Schools.

19/10/2010 6 comments

Come on, it might as well be.

Lord Browne and his team issued a report on October 12th detailing the direction higher education must go because of this economic climate. We have just seen a defence review today which is cutting 42,000 jobs in the Ministry of Defence, affecting RAF, Navy, Army and civilian positions. Where do they go? Who cares! Oh, you do.

The country is on a downward downsizing spiral because of the gluttony and risk taking from the guys at the top.

Our education system has long been identified as a sector in dire need of reform, yet has gone without the attention it deserves because of the turbulent decade we have just experienced. We have been involved in two messy wars, terrorism on our shores and endured a recession so huge the effects will be felt for many years to come.

What do we know about this system which is responsible for moulding the next generation of workers, thinkers, innovators, and moralisers? Its benefits include a tuition fee cap that normalises the financial circumstances in which one can enter higher education. Then there are drawbacks, such as the rigidity of assessment procedures and the linearity of teaching.

Browne’s report aims to address the impending spending cuts which will affect higher education institutions. The cuts, which will be announced formally tomorrow, will severely squeeze an institution’s funds for teaching and research, so the impetus is on the universities to generate their own funding through private means.

I agree with the purpose of this report – to reform higher education, and later hopefully secondary education – but this effectively means the marketisation of the higher education sector.

This is a kind of a big deal. For a country which did not even charge students tuition fees a little over 12 years ago, we have rapidly got to the point where we are thinking of removing the fee cap altogether. How can something as important as a fee cap, in terms of contributing to social mobility and offering something towards building a true meritocracy, be scrapped?

 

System not responsive to the changing skills needs of the economy.
Analysis from the UKCES suggests that the higher education system does not produce the most effective mix of skills to meet business needs. 20% of businesses report having a skills gap of some kind in their existing workforce, up from 16% since 2007.

The CBI found that 48% of employers were dissatisfied with the business awareness of the graduates they hired. This evidence suggests there needs to be a closer fit between what is taught in higher education and the skills needed in the economy. It also adds force to the argument for helping existing workers to enter part time study and improve their skills.

 Securing a Sustainable Future for Higher Education in England, p.23

On the face of it, all this means is that higher education must adapt to the business market and provide a business friendly skill-set. This is one of the underlying assumptions of this report, and one which it is guided by the will to massage the various business interests which would like to see students develop skills the businesses want.

This is vitally important. The question which is ignored in this report, and any report which first considers the requirements of current short-term gains focused business first, is what should be dictated by what? Should what we study determine the jobs which are created, or should the existing jobs created by existing managers determine what we study?

Again, on the face of it, it is ridiculous to consider someone graduating from a philosophy degree starting a career as a full-time philosopher. However, isn’t it equally as ridiculous (to add very unjust) for someone who has an incredible grasp of history to enter employment as a sales representative, assuming that isn’t their burning desire?

Business can never be allowed to dictate our education because a homogenised education system, i.e. one tailored to meet the demands of business, will destroy diversity and positively halt innovation, condemning us to endlessly trying to meet unrealistic targets which exist in some areas of the working world.

What about employers who value employees with unique skill and knowledge sets, who are able to contribute creatively, rather than mechanically?

But no, lets roundly blame the beleaguered education system for not producing them while largely ignoring the employment market which does not welcome them. Schools are flooded with restrictive paperwork from the government while university leavers have to endure the rhetoric of business interests. We are being made to focus on only one of the two fronts.

 

Quality.
Students are no more satisfied with higher education than ten years ago. Employers report that many graduates lack the skills they need to improve productivity. Institutions have no access to additional investment to pay for improvements to the courses they provide. In any case the incentives for them to improve the student experience are limited.

p.23

 

Why is that? Well, it is easy to see that the blame for a graduate’s frustration falls squarely on the institution or course he has just left, either by misinforming him about prospects, or teaching him self-indulgent skills which are not easily transferable. We never really look at the employment sector to identify the great disconnect between it and our education too.

Business must be put in the spotlight. Also, we must stop using the word “economy” interchangeably with “business” in the first place, as, rather cannily, “economy” seems to have this more inclusive connotation, whereas “business” seems to describe some arbitrary organisation apart from the consumer, and crucially, with little interest in the consumer.

All in all, just another marketing ploy the government and big business utilise to dull our sensibilities when faced with their simplistic solutions (to their problems). Before even looking at the outrageous numbers, the first principle underpinning this report fails quite astonishingly:

 

Principle 1: There should be more investment in higher education – but institutions will have to convince students of the benefits of investing more.

p.24

 

I have emboldened the word “convince” not only to draw attention to it, but simply to underline it’s boldness. Students evidently are not willing to pay any more for their education, but will be powerless if universities impose higher fees to generate funding. There are a lot of problems with this strategy, never mind the numbers it entails.

Firstly, government officials and the people who are behind this report actually believe universities will give their persuasive efforts some meat and backbone. Persuasion can always be simply that: persuasion. Convincing a student of the supposed benefits of studying at a particular institution could merely accelerate the growth of the universities’ marketing arms.

Secondly, every university already outlines, in paper with a high GSM, that they are incredible and innovative. Giving a university the freedom to raise prices like a business will negatively enable it to behave like a business in other areas. Costs will be minimised regardless of quality of output, and prestige will play even more of a prominent role than it already does.

 

“Increasing competition for students will mean that institutions will have stronger incentives to focus on improving teaching quality.”

p.48

 

Creating “competition for students” through a private market would be catastrophic for society on many levels. Incentivising universities with a profit motive will see profits increase at a rate disproportionate to the standards of education. When taking into account matters such as social mobility, vast debt, and regional insensitivity, the new model leaves a lot to be desired.

Browne’s report models fees up to £12,000 per year, with fees in the region of £6,000 being earmarked as the most common sum to be requested. However, they concede there would be no cap (music to the Russell Group’s ears). It is also conceded that for most universities to break even, fees in excess of £7,000 would need to be charged.

The government, the group who have produced this review, and the universities have all remained relatively tight lipped about the ramifications of removing the cap. Of course they would! The government can make savage cuts, the universities are given the freedom to extort their students, and the this group can add a popular report to their portfolio.

Everyone wins! Except us, as always. Lets live the nightmare for a moment:

 

Higher_ed_bubble_9-3-2010_10-20-44_AM 

 

To illustrate what removing the cap could (and most likely would) do, I have obtained a graph with data from the Bureau of Labour Statistics in the U.S. Browne’s review and the support it has drawn from the coalition government is explained by satisfying all the parties except the new generation of students.

By adopting more of an American model, we are in danger of letting universities, the crucial institutions which (should) shape employment, innovation, and aid social mobility, concentrate on boosting profits, employing even more administrators to do so, and lumping students with horrendous mortgage style debts before they have even begun their careers.

The mantra of it being an investment for the future is unravelled by our economic cycles of boom and bust which entail little or no job security. Our volatile economic climate is controlled by business interests, and the governments elected to appease them. Employment is slashed at whim, while credit ratings are protected religiously by incompetent regulatory systems.

My cynicism is informed by our neighbours across the Atlantic, whose free market dogma has revealed itself to be a bitter pill to swallow for society at large. Institutions such as Harvard charge as much as $50,000 (£34,000) a year, over 4 years, not 3. The total comes to $200,000. How is this justifiable, other than by regressing to matters of prestige?

George W. Bush, probably the most incompetent president in recent history (and beyond), attended Yale, a renowned university in the U.S. How? Through heavy private contributions – the same contributions we are going to be asked to make to fund our institutions. That’s fairness right there in all its star-spangled glory.

Now, I don’t know about you, but I am not keen for us to produce clowns like that, reassuring English accent or not.