The spiked review has published an article by me on how the fear of ‘populism’ has led to an elite turn against social media. I will upload the full text at a later date but for now it is available by simple following the link.

My introduction to last week’s Academy of Ideas Economy Forum discussion on the backlash against Silicon Valley is now available to listen to on the event’s webpage.

Spiked Entebbe review

10 Jun 2018

My review of the recent Entebbe film was published on spiked on 21 May.

In 1976, Palestinian and German terrorists hijacked Air France Flight 139 and flew it to Entebbe, Uganda. This event touches on some of the thorniest of all political questions, including the Holocaust, anti-semitism, the state of Israel, the plight of the Palestinians, terrorism and Germany’s relationship with its Nazi past.

The hijacking started shortly after the Air France flight, en route from Tel Aviv to Paris, had taken off from Athens. Alongside the two German terrorists from theRevolutionäre Zellen (Revolutionary Cells), were two Palestinian hijackers from an extreme splinter group, the Popular Front for the Liberation of Palestine – External Operations (PFLP-EO). They first took the plane to Benghazi in Libya, before flying to Entebbe in Uganda, where they were welcomed by the dictator, Idi Amin.

The hostages were held captive in Entebbe for another week. Ugandan soldiers stood by, protecting the terrorists. Two days into the hijacking, identifiably-Jewish prisoners, including several non-Israelis, were separated from the non-Jewish ones. In the subsequent days, the 150 or so non-Jewish prisoners were released. With Germans involved in selecting Jews for likely execution, echoes of the Holocaust were unmistakable. To their immense credit, the Air France crew took the brave decision to stay behind with the Jewish hostages.

From then on, the central question was whether the Israeli government was willing to negotiate the release of the remaining hostages. But instead, it decided to mount a high-risk military rescue operation – despite the huge distance between Israel and Uganda. The decision was taken partly on principle and partly because Israel did not believe the negotiations would work in practice. Four Lockheed C130 transport aircraft, containing Israeli elite special forces, were sent to rescue the hostages. The operation was a success. Over a hundred hostages were released, just three were killed, as was one Israeli soldier. Dora Bloch, an elderly Jewish hostage, who had been taken to hospital after falling ill, was later killed by her Ugandan captors.

In the late 1970s, the hijacking was the subject of three action films, Victory at Entebbe, Raid on Entebbe, and Operation Thunderbolt. But Entebbe, the latest attempt to dramatise the events, takes a different angle, telling the story from the perspective of the two German hijackers.

Unfortunately, Entebbe fails to probe the difficult questions it raises. In particular, how did many young Germans of the 1960s and 1970s generation come to see West Germany, as it was then, as the heir to Nazism? And how did a significant number of them go on to view Israel as exemplifying fascism? The first was convincingly examined in The Baader Meinhof Complex, a 2008 German film. But Entebbe offers no insights into either. Beyond portraying the obvious irony of armed Germans separating Jews from non-Jews in the name of anti-fascism, there is little more to this film.

Its German protagonists are one-dimensional, and the Israelis and Palestinians are even less convincing. This is partly a result of the film’s insistence – repeated several times – that Israelis and Palestinians must engage in peace negotiations. Much like Steven Spielberg’s 2005 film, Munich, Entebbe suffers from a heavy-handed political message on the need for political reconciliation.
This didactic approach can have bizarre results. Entebbe opens with an extract from a performance by Israel’s Batsheva dance company. Fifteen dancers, dressed in a version of orthodox Jewish garb, are sat on chairs in a semicircle. As Echad Mi Yodea (a traditional Passover song) plays, the dancers strip off some of their garments. The same performance appears again at the end of the film, interspersed with the rescue mission. The director, José Padilha, explains in the Jewish Chroniclethat the orthodox garb represents the ‘political constraints’ to negotiation, which need to be thrown off. The strange sequence is ‘a way of cinematically saying’  that ‘unless both sides strip themselves of their orthodox ways of thinking, there is not going to be an agreement’ between Israelis and Palestinians.

This is why Entebbe misses what makes the conflict so intractable. There is no appreciation of the scale of the tragedy for all those involved. For example, after the Jewish hostages are separated from non-Jewish ones, the film’s characters suggest the Israelis might now be more amenable to peace talks. Yet anyone who understands the dynamics of Israeli society would know that the selection of Jews for likely death was, on the contrary, bound to make Israel more resolute. Unlike the English word, selection, the Hebrew term, selektsia, has unmistakable associations with the horrors of the Holocaust. Of course, it would have been clear to detached observers, even back in 1976, that the Entebbe hijacking was not a precursor to resurgent Nazism. But it should not be a surprise that under such extreme circumstances, many embattled Israelis would draw this conclusion.

If anything, Entebbe is even more shallow in its portrayal of the Palestinians. They are depicted merely as the victims of a terrible injustice, who are determined to exact violent revenge on those they deem responsible. There is no exploration of how they view their predicament or how these particular terrorists concluded that this hijacking was a reasonable course of action. Their role in the film is simply to kill or be killed. Unlike the German hijackers, they are not shown to have any moral qualms about their actions. They are completely dehumanised.

Perhaps Entebbe could not reasonably be expected to examine all of the difficult themes the hijacking raises. However, it could have at least explored the human dimension of one of them. Instead, it falls back on the cliché that both Israelis and Palestinians are simply too intransigent to talk to one another.

Spiked has published my review of the film Entebbe. I will upload the full text soon.

My latest book review in the Financial Times was published on Friday 4 May

Understanding the lives of the wealthy in contemporary Russia is like opening up a traditional matryoshka wooden doll: the distinctive external form clearly shapes the contents.

Russia is a world away from the textbook model of a free market in which risk-taking entrepreneurs thrive in a benign environment. At times there have been, at the very least, strong incentives for those pursuing wealth to bend if not break the law. Those who have amassed the greatest riches have, in many cases, had the closest connections to government or themselves held senior positions.

It is widely known that in the 1990s some Russians, now widely referred to as oligarchs, became fabulously wealthy through their role in the privatisation of grossly underpriced state assets.

Of course, no country quite lives up to the perfect entrepreneurial model, but Russia’s situation is peculiar. Not only was it the largest part of the Soviet Union until that regime collapsed in 1991, but also the transition since then has been traumatic.

Putinomics: Power and Money in Resurgent Russia, with its lucid outline of Russian economic development since the 1990s, is a valuable guide to understanding this shift. Chris Miller, an assistant professor of international history at Tufts University in Massachusetts, argues that Russia’s economic strategy under the leadership of Vladimir Putin has three main pillars. First, it is intent on strengthening the central authority of the Kremlin. Second, to prevent popular discontent, it is keen to promote low unemployment and adequate pensions. Finally, it relies on private business to improve the efficiency of the economy, but only where it does not contradict the previous two strategies.

Although the Russian leadership is pro-business in the abstract, it will take ruthless action against companies or individuals it sees as challenging its power. The recently re-elected president has long made his attitude clear, with warnings to business leaders who have attempted to wield political influence counter to the Kremlin.

Although Putinomics does not focus primarily on Russia’s business leaders, it does refer to them often and it certainly throws light on their plight. Perhaps the best known is Mikhail Khodorkovsky, widely believed to be Russia’s richest man before he fell out dramatically with Putin in October 2003. When the oil magnate’s private plane landed in the Siberian city of Novosibirsk he was arrested by troops attached to the FSB intelligence agency. After spending a decade in jail on fraud charges, he was eventually released and allowed to go to live in Switzerland.

Without particularly defending Putin, Miller suggests that his hostility to Khodorkovsky was not a matter of personal whim. Just as Putin was trying to increase the tax take from business, Khodorkovsky launched a campaign to lower his Yukos oil company’s tax bill.

The tycoon, who once co-wrote a capitalist manifesto hailing “His Majesty, Money”, was also pursuing talks to build an oil pipeline to China when Putin favoured one stretching to the Pacific. Khodorkovsky then openly mocked the Russian leader’s favoured scheme while accusing a Putin ally of corruption. The billionaire had therefore broken the cardinal rule of Russian politics: he had undermined the authority of central power. Although Putin was keen to promote himself as pro-capitalist and defender of the rule of law, he had overriding priorities.

The Khodorkovsky affair is far from the only example of a development that seemed perverse from a western perspective.

Miller relates how the 2014 Winter Olympics in Sochi on Russia’s Black Sea coast was not just a sporting event but also a massive construction project involving the whole region. Most of the building work was managed either by oligarchs or state-owned companies. This set-up gave powerful groups access to large revenue streams but also gave the government identifiable individuals it could blame if problems emerged.

What comes out most strongly from Miller’s work is that Russia should be understood, at least partly, on its own terms. Some of Moscow’s actions may be objectionable, but they generally have their own rationale.

Understanding the internal dynamics of contemporary Russia is more important than ever. Putinomics is a valuable contribution to that task.

Putinomics: Power and Money in Resurgent Russia, by Chris Miller, University of North Carolina Press, 240 pages

Fox News on Friday

1 Apr 2018

I was on the Claire Fox show last Friday (30 March) discussing the economics of Brexit. My item is about two hours in.

On 26 March the Academy of Ideas (formerly the Institute of Ideas) distributed a podcast version of last year’s Battle of Ideas debate on “Silicon Valley from Heroes to Zeroes” in which I was panellist. The session explored the backlash against Silicon Valley in the policy and public debates. A lot has happened in this discussion since last autumn but clearly the debate about Facebook and Cambridge Analytica has once again brought it to the public’s attention.

Yesterday the Financial Times published my latest book review.

There is one battle that even the wealthiest person is bound to lose. Even the most advanced medical technology can only postpone, rather than overcome, the inevitability of death. Some argue that, before long, regenerative medicine will transcend this reality but, for the time being at least, death will remain an essential part of human existence.

That leaves open the question of what should happen to the assets of rich individuals once they have died. Some affluent people will not care — their wealth will be of no use to them under such circumstances — while others will take a pragmatic attitude without thinking about the broader significance.

Many others, however, will ponder at least some of the difficult questions raised by death and inheritance. For example, what is the nature of property rights? Is an inheritance tax just? If so, what form should it take? What difficulties does inheritance raise in relation to the persistence of social inequality?

Judging by the keen interest in philanthropy, there are plenty of prosperous individuals pondering these questions. They are keen to do good, not just in their lifetime but afterwards too. Leaving a positive legacy is a central preoccupation for many.

Daniel Halliday, a political philosopher at the University of Melbourne, has written a practical philosophical guide to some of these questions. The Inheritance of Wealth marries a discussion of the principles involved with a sketch of what he sees as some of the key empirical features of contemporary inequality.

Halliday’s perspective is essentially that of a moderate egalitarian. He sees what he describes as “economic segregation” as unjust. In his view, those in the wealthier layers of society have better life chances than others, even though it may not be fair. Often the rich achieve their advantages entirely or largely through accident of birth.

Halliday’s critique is, however, a measured one. He concedes that some people do achieve their wealth through merit and he is certainly not in the camp of those who argue that all bequests should be abolished. His goal is not to destroy capitalism but to work out how, in his view at least, it can operate more fairly.

The scene is set with an examination of early liberal writings on inheritance from the likes of John Locke, Adam Smith and John Stuart Mill. None of these economists — from the 17th, 18th and 19th centuries, respectively — wrote much about inheritance specifically, but there are scattered mentions as part of broader discussions of such topics as property rights and social class. Although these thinkers differ among themselves, there are certain common elements. In particular, their view of inheritance can be seen partly as a reaction against the preceding feudal experience.

Pre-capitalist societies tended to be highly stratified. Social mobility and equal opportunities were not recognised at times when people’s position was determined by birth. Therefore, those writing in the early days of capitalism tended to be concerned with the risks of inherited wealth promoting idleness and maintaining a rigid social order. Halliday shares these worries in relation to the present, rather looking back to the feudal past.

Nor were early liberal thinkers alone in being sometimes scathing in relation to inheritance. Andrew Carnegie, the Scottish-American industrialist and philanthropist, reflected a common view in late 19th-century America in describing the bequesting of wealth to family members as “most injudicious”. Halliday quotes him as saying “the man who dies rich dies disgraced”.

In practical terms, Halliday’s favoured form of taxation for inheritance is what he calls a Rignano scheme. This follows an early 20th-century Italian thinker, Eugenio Rignano, who proposed that second-generation wealth should be subject to a higher tax rate than first-generation wealth. The idea is that entrepreneurs would still have an incentive to work hard to benefit their children but later descendants should not live idly off the wealth created by earlier generations. It would also help create a society where opportunities are more widely shared.

Halliday is open to discussion about the precise form such a scheme would take. For instance, it might make more sense to tax the recipients of wealth rather than the estate of the deceased.

Those who share Halliday’s premises are likely to find many of his arguments persuasive. On the other hand, those who are either unconvinced that economic segregation is a serious problem or are unconcerned by it will not. The Inheritance of Wealth at least has the merit of making readers ponder a difficult subject.

On 2 February my latest review was published on the Spiked Review of Books.

Debating individuals who have a completely different mental picture of the world presents a fundamental challenge. That is, they differ not just in their political convictions or values, but even in terms of how they describe reality. There seems to be insufficient common ground even to start a discussion.

That is certainly the case in relation to the critics of the wealthy, or ‘the 1%’, as they are known nowadays. The rich are routinely portrayed as greedy, ostentatious and obsessed with status. Yet such caricatures, despite being so prevalent, are rarely grounded in actual observations, let alone systematic research.

Just to emphasise: the point here is not to take a political stand for or against the rich. It is deliberately more fundamental than that. The question is whether perceptions of the wealthy even serve as an accurate description of the reality of the wealthy.

Certainly my impression of wealthy people from my job as a journalist writing about economics and finance is that they are not the aggressive materialists so commonly portrayed. On the contrary, they generally seem at pains to come across not only as normal, but as morally worthy. They are a world away from the caricatured neoliberal plutocrats that so many of their critics seem to assume.

Of course, they may be on their best behaviour when meeting journalists. I have no way of knowing what they are like in private. But even the existence of such a yawning gap between their public persona and their real selves should be worth investigating.

From this persepective Uneasy Street is an important book. It is an all too rare empirical study of how the rich see themselves. Rachel Sherman, an associate professor of sociology at the New School for Social Research in New York, did in-depth interviews with 50 parents in 42 households in the New York area. Their annual household incomes ranged from $250,000 (£190,000) to over $10million, while their assets ranged from $80,000 to over $50million.

Overall, Sherman’s sample size is relatively small, and confined to New York, but it is nevertheless valuable given the dearth of research in this field. She also supplemented her research by conducting 30 interviews with those who work with the wealthy, such as architects, art advisers, estate agents, interior designers and personal chefs.

Getting the rich to talk about their own wealth is notoriously difficult. They are extremely unwilling to be open on such matters. Sherman, by her own admission, benefited from having a similar social background to her interviewees. She has also gone to considerable lengths to disguise the identity of her subjects.

Sherman’s project is to discover how the wealthy see themselves rather than accepting the caricatures. She correctly observes that ‘the wealthy are often represented not only as status-seeking and lazy, but also as morally deficient in terms of personality and behaviour. Even relatively serous non-fiction books such as Richistan and Plutocrats reinforce this idea, even in their titles.’

Instead, Sherman found that her subjects felt highly conflicted in relation to their own wealth. They certainly had no intention of giving it up, but they struggled with the question of how to be worthy of their material privilege. They were desperate to see themselves as Good People, or ‘moral actors’, as Sherman calls them. Typically, they advocated diversity, openness and meritocracy rather than pursuing status based on material possessions.

Indeed, they tend not to see themselves as wealthy at all, but as middle class. That is not to say they failed to realise they had a lot of money relative to others, but that they nevertheless identified with what they saw as mainstream, respectable values.

A perhaps extreme exponent of this approach is Hillary Clinton, who in 2014 infamously said that she and her husband had been ‘dead broke’ when they left the White House. Yet whatever assets and debts they may have had in 2001 – and there is some dispute about this – the former president and first lady clearly had huge earnings potential. Apart from a generous presidential pension package for Bill, there were five-figure speaking fees, lucrative book deals, and consulting work for both of them. By 2016, it was widely estimated that they were worth over $200million. Yet, despite their great wealth, Hillary was still keen to identify with the middle class and speak out against the excesses of the rich.

Sherman identifies three ways in which the rich managed to square this circle and so manage to perceive their own wealth as legitimate. First, they were keen to emphasise that they worked hard, even if they often acknowledge there is an element of luck in their material advantage. They seize on whatever kind of work they did – paid, voluntary or domestic – to justify their wealth as deserving.

Secondly, the rich emphasised that their consumption is prudent. They were not against spending money in principle, but they are keen to view it as being spent in a sensible and frugal way – for example, on their children or on things that demonstrated high cultural capital. They viewed luxury items as exceptional and eschewed ostentation.

Finally, ‘giving back’ in some way was seen as important. This included both traditional philanthropy and volunteering, as well as an awareness of privilege.

Paradoxically, such awareness meant acting as if class differences did not exist. It involved observing a norm of silence in relation to material advantage. It also included – at least in the minds of the wealthy – treating others with kindness, respect and gratitude.

The flipside of this awareness of wealth was a tendency to criticise other rich people who were seen as not living up to these norms. For example, one of Sherman’s wealthy subjects describes the behaviour of other rich individuals in an exclusive seaside resort in New York:

‘Well, once summer hits [in the Hamptons], I can’t stand [it] – like, we don’t go out to dinner. We don’t really leave the house, other than going to the beach. Because the people are just awful, you know – too much money, spoiled. They hate locals. They’re rude to people that work in restaurants and everything, because they’re locals.’

Sherman’s carefully crafted observations of how the rich view themselves raise a difficult question. How can the caricature of the avaricious wealthy survive when it is so at odds with the reality of a highly conflicted group of individuals?

An important factor is no doubt the lack of class conflict in contemporary society. There are no existential challenges facing those with material privilege. Gone are the days, at least for the time being, when they are faced with the threat of political revolution or expropriation.

The climate of economic atrophy in the Western economies also plays a part. A dearth of growth in the developed world means there is an intense focus on how to distribute seemingly scarce resources rather than how to create more. This strengthens the idea that consumption has to be ‘responsible’. In practice, it means others in particular, rather than the wealthy themselves, are expected to constrain their consumption.

Under such circumstances, the divisions within the elite take on an outsized importance. The lack of a popular threat deprives them of a sense of purpose and encourages them to turn in on themselves. It is a classic case of what Sigmund Freud called ‘the narcissism of small differences’. There is a heightened sense of ‘us and them’ among the affluent rather than between them and the rest of society.

Creating and attacking caricatures of the errant rich has the added advantage of giving the wealthy a sense of mission. It allows affluent individuals to define themselves as progressive in contrast to those other, supposedly backward members of the rich.

In other words, there is a strange symmetry between the views of the wealthy themselves and those of their green-tinged critics. The sense of responsible consumption favoured by the rich is hard to distinguish from middle-class preoccupations more generally. Both sides are keen to attack the greedy rich as a kind of pantomime villain, presenting themselves as on the side of Good against Evil. Indeed, many of Sherman’s wealthy interviewees expressed affinity with Occupy Wall Street, which was in the news at the time she was doing her research.

Supposedly radical criticisms of the rich strangely reflect the inner turmoil of the rich themselves. Any meaningful discussion about the true significance of material inequality in contemporary society needs to start by thinking afresh.

 

 

I will be introducing a discussion on the backlash against Silicon Valley at the Academy of Ideas Economy Forum in London on the evening of Tuesday 13 February. More details can be found here.

NOTE: THIS EVENT HAS BEEN POSTPONED TO A LATER DATE.