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« December 2003 | Main | February 2004 »

January 30, 2004

Interval

I shall be away next week; posts will resume around the 8th of February. In the meantime, the most dispiriting story of the past few days is identified by Stephen Pollard in The Times, the least perceptive and self-critical resignation statement I can recall is reproduced here, and the early work of the greatest living writer in the English language is available here.

January 29, 2004

Hutton's verdict

My reticence yesterday over the Hutton Inquiry was due not to the intractability of the issues but to my being stranded by the weather. But I reflected that for those of us who for months had been criticising the BBC and supporting the Government it would be easy and tempting merely to pronounce victory, to crow smugly and to damn the BBC.

So I shall do all of those things.

Last July I wrote:

The implications for the BBC's credibility as a public-service news broadcaster are so disturbing that it's unsurprising that the corporation's own coverage of Dr Kelly's tragic suicide should verge on the coy. According to its political correspondent Nick Assinder:

"[T]he long term effects of this tragedy must surely be to force all those who participate in politics to look long and hard at their behaviour. It raises numerous questions about openness, responsibility, trust and even morality. And there can be no more powerful a case for a new compact between the public and those who are elected to serve it. It is now unthinkable that, once this horror has passed, we will all simply go back to our old ways."

The pronoun in the final clause does not appear to refer at any point to Assinder's own employer or colleagues. I should be surprised if that incorrigible, insufferable assumption of superior insight and purity of motive were not a casualty of Lord Hutton's inquiry.

A few days later I wrote:

The BBC's credibility has been destroyed not because a particular politician says so but because of the way the corporation has behaved. It broadcast sensational allegations that its source did not recognise. It misrepresented the nature of its source, claiming he was from the intelligence services, thereby evading the need for further substantiation of its correspondent Andrew Gilligan's claims. These are violations of basic professional ethics, never mind of the ethos of public service broadcasting.

[Andrew] Marr must know this, because he's an experienced and scrupulous journalist. Yet he concludes with the feeble observation that:

"I don't think that when this inquiry finally reports, probably in September, anybody - BBC, journalists, or the government or spin doctors - are [sic] going to walk away from this claiming a great political defeat, a great political victory."

Of course no one will claim a great political victory: the issue is more important than politics. A man has died, by his own hand; the Hutton inquiry has been established to find out why. What we can already say for certain would still hold were Dr Kelly alive today, and does hold regardless of its salience for the inquiry into his death. The BBC's output of news and current affairs is in chaos; it lacks adequate controls; it is consistently ill-informed; certain of its correspondents are frankly ignorant of the subjects they're supposed to specialise in; it is sentimental rather than analytical; it introduces - not even covertly, for its practitioners know of no other way of making sense of the world - a bias that treats pressure groups as invariably disinterested and political authority as deceitful; and it reports on the security policies of western democracies, specifically the United States and Israel, as if no terrorist threat existed and these countries' military actions were evidence of malign intent rather than defensive necessity.

In September I wrote:

Andrew Gilligan's priming the Foreign Affairs Committee with questions for Dr Kelly was not merely an embarrassment: it was an abuse of privileged sources and professional responsibilities. So far from his original report's having been well-sourced, it was contradicted not only by the author of the government's dossier on Iraq's weapons, John Scarlett, but also by Gilligan's BBC colleague Susan Watts. The BBC Chairman, Gavyn Davies, failed to exercise management control of this loose cannon, or even to evidence interest in the subject at all till Alastair Campbell challenged the BBC on the veracity of its reporting. The obvious course for Davies would have been then to act on the suggestion of the prime minister that the BBC state that, while it stood by its right to broadcast the original Gilligan report, it now accepted the factual basis of that report to have been wrong. If Davies had done that he would have limited the damage to the corporation and upheld his reporters' right to exercise judgement, while taking the honourable and professionally-required course of correcting a serious mistake. Because none of us knows the reasons for Dr Kelly's suicide, I shan't speculate on what effect this would have had on his actions; it would simply have been right for Davies to acknowledge that the BBC had got itself into a position incompatible with its status as a public-service news organisation.

And I still erred on the side of the BBC. I considered Defence Secretary Geoff Hoon had shown so little interest and managerial competence in the running of his department and the welfare of his employee that I felt he should resign immediately. I am happy to place on record my having been unreasonably critical of the Government on this issue, and to correct my mistake.

Three issues remain: the character of the BBC’s response; the criticism of the Inquiry by self-interested parties; and the complexion of post-Hutton politics.

The resignations of the two most senior figures in the BBC’s management are welcome and honourable. The accompanying verbiage is not. Greg Dyke’s pre-recorded assertion yesterday that the BBC acknowledged errors and had taken remedial action bore the hallmarks of one who had no conception of the venality of the BBC’s conduct. These were not faults of administrative torpor or inefficiency: they were instances of professional misconduct compounded by an institutional abdication of responsibility to investigate grave and unfounded allegations. The moral evasion of the BBC management in insinuating that, while they resign, they do so having been more sinned against than sinning is an indication in itself of the unfitness of the BBC to be self-regulating or even to be taken seriously as a public-service broadcaster.

Those whose views on the issue have been moulded not by a disinterested consideration of the responsibilities of a public-sector organisation but a prior animus against the Government for having overthrown the world’s worst tyrant have been left with little to do except cry foul. Their animadversion is neither convincing nor elevated. As Professor Norman Geras rightly observes:

[M]ost of the whitewash stuff is being produced by whom? Why, by journalists for liberal, anti-war media. Have you read even one of these who has acknowledged that there might be a problem with substituting his or her perception of the issues for Lord Hutton's over a matter on which they have at least two strong reasons for being partisan towards one side and against the other? I haven't. This relates, though, to a war which they vehemently opposed; and to findings against a media organization to which they are well-disposed and in favour of a government to which they aren't well-disposed. It's a bit of a caricature, but not too much of one, to suggest that this is like me coming before a judicial tribunal of some sort, and in which my own conduct is under scrutiny, and saying 'The hell with judge and tribunal. I can decide.'

The persistence of these underlying political presumptions is the only explanation I can adduce for the suspension of criticism of the BBC by those who would surely know better but for their anti-war position. The former BBC war correspondent and Independent MP Martin Bell, whom I revere but whose views on Iraq I have disagreed with for years, lamented in his political memoirs the death of “news as we had understood it and journalism as we had practised it”. Yet he now remarks in The Guardian:

Most people, even now, are more inclined to trust the BBC than the government – this one, or any other.

Well, I should hope so. The BBC is, after all, bound by its charter to be impartial. This Government, like any other, by definition has a political point of view. It’s because the BBC has taken on the functions of a political party, dispensing a view of the world that is tendentious and intellectually idle, that it’s got into this mess. Yesterday was not a disaster for good journalism: it was a prerequisite of restoring the best traditions of foreign journalism that used to be practised by BBC correspondents such as Kate Adie and Charles Wheeler and that has now been superseded by politically-loaded, sanctimonious, superficial, ill-informed and professionally improper ululating.

Finally, the politicians’ reception for Hutton was as revealing as the journalists’. When Michael Howard acceded to the Conservative leadership I was deliberately emollient in this blog, for I certainly wanted the Conservative Party to have a plausible and articulate leader in order to preserve the informal conventions of a two-party system. But I didn’t take this to an extreme: in response to a suggestion that progressive voters ought to vote tactically in Howard’s own constituency at the next election, I noted that while there was indeed a respectable case for voting tactically for Howard in order to defeat the Liberal Democrats, it would not be a course I myself would recommend.

But Howard’s handling of the two principal issues of this week has been unprincipled and even tawdry. To have opposed university top-up fees without having any policy to replace it with, to the detriment of university funding and personal responsibility, was philosophically chaotic and politically foolish. To have resurrected all the charges that Lord Hutton disposed of, and to have done it in the same speech in which he ostensibly accepted the findings of Lord Hutton, was beyond obtuseness: it was graceless opportunism that redounded to his lasting discredit.

That debate was a triumph for Tony Blair over two party leaders who are lesser men and less principled politicians. The quality of our democracy is the better for it.

January 28, 2004

Don't consult: govern

The moment Tony Blair won the vote on a neutered but still desirable bill on university top-up fees, political commentators observed that the thinness of his majority demonstrated, in the words of Tom Happold of the Guardian:

Whatever the rights and wrongs of the argument, Mr Blair has been weakened by tonight's vote. To rebuild his authority and reunify his party he must take on board at least part of the rebels' critique. If he wants to carry on with his plans to reform the public services he must learn to consult and explain more. Otherwise the fate of Mr [Ramsey] Macdonald and Mr [James] Callaghan awaits.

I cite Happold because he's an astute commentator - as is the BBC's Andrew Marr, who said much the same thing - rather than an inveterate oppositionist, yet his advice to Tony Blair is exactly wrong. If Blair wants to continue with the reform of public services then he must learn to pay less attention to those critics. If he builds up a minimal reform as a vote of confidence, then his critics will be encouraged in their erroneous belief that public service reform is an extreme position that needs to be tempered if not thwarted.

According to Professor Nicholas Barr on Newsnight last week, the government's proposals on top-up fees would mean that one-sixth of the current cost of a degree would be borne by the student, if and when he was in a position to pay. To raise this money from general taxation when 82% of taxpayers are not graduates is an overt case of sectional interests triumphing over the public good. The only possible case for objecting to this reform, given that poor students do not pay tuition fees, is that education is - in economists' jargon - a public good that generates positive externalities. But as Alison Wolf, Professor of Education at London University, has pointed out, there is no clear link between student numbers and economic growth:

[W]ithin developed countries there is no clear link between student numbers and growth rates, GDP per head or productivity. For example, Switzerland, at the top of the income tree, has the lowest university participation rates in the OECD; while the US, also near the top, has the highest. Big increases in university numbers are at least as likely to follow periods of rapid growth as they are to precede them: Japan is a prime example.

So when a minister asserts that "We need more young people to go to university because it is an economic necessity," he or she would be hard pressed to back up the claim.

Education is not obviously a public good - or rather, it is a hybrid case where the primary benefit of education accrues to graduates themselves, and who thus ought to pay for that benefit themselves if they are in a position during their working lives to afford it. This isn't a counterintuitive proposition attractive only to the affluent and privileged: it's an integral part of what I would take to be liberal beliefs. Professor Wolf's article is well worth reading in full (as is her book Does Education Matter?); while only tangentially mentioning party politics, it does make a telling observation:

Politicians, too, have the interests of core supporters to accommodate. The Liberal Democrats have campaigned consistently against university fees: their website trumpets that "Liberal Democrats in Scotland abolished tuition fees completely", and urges people to vote Lib Dem as a "vote for scrapping fees". Bear in mind, though, where the greatest beneficiaries of that policy are to be found. It is in the Liberal Democrat heartlands-the Guildfords and Newburys, the Kingstons and Cheltenhams, not in Peckham, Govan, Gateshead or Merseyside.

Tony Blair should deal with these intellectually bankrupt critics, inside and outside his party, by showing them no respect whatever. The examples Tom Happold gives of the Macdonald and Callaghan governments - both of which were divided and incidentally lost votes on the second reading of a bill - do not demonstrate the case he wishes to make. The critics of Macdonald and his Chancellor, Phillip Snowden, had no idea how to manage the economy through the Depression; with the crucial exception that they ought not to have defended the Gold Standard (an exact modern equivalent would be the system of currency boards pegged to the US dollar that some South American countries with histories of high inflation adopted), Macdonald and Snowden were among the most effective politicians of the last century and whose reputations ought to be much higher in Labour circles than they are. Likewise, if James Callaghan's Treasury team - Denis Healey, Joel Barnett and Edmund Dell - had compromised with their critics during the 1976 crisis, the sensible and necessary step of securing the IMF loan contingent on cutting public spending would not have been possible, and the alternative stratgies promoted by Tony Crosland and (much less seriously) Tony Benn would have caused immense economic hardship and needless diplomatic disruption.

The proper model for a reforming Labour government is New Zealand in the 1980s, when the Finance Minister Roger Douglas established an economic framework of rules in place of a highly protected and ossified economy. (Among Douglas's reforms was the exact precedent for Gordon Brown's later adoption of the policy of central bank independence.) In a useful account of these reforms a few years later, Donald Brash, Governor of the Reserve Bank of New Zealand, observed:

The comprehensive nature of the economic policy failure in New Zealand demanded a correspondingly comprehensive reform programme. As well, the first stage of the reform was carried out at high speed. It was probably the world's first example of a `big bang' approach to reform. The case for fast and comprehensive, as opposed to gradual and piecemeal, action was cogently argued by Roger Douglas in a remarkable speech to a meeting of the Mont Pelèrin Society in Christchurch in 1989. Douglas rejected the conventional view that reform can succeed only if political support for it has been established beforehand; this, he said, merely compromised the quality of the reforms, thus adding to their eventual cost and sowing the seeds of opposition. Instead, he said, consensus 'develops progressively after the decisions are implemented, as they deliver satisfactory outcomes to the public'.

It's an example that Blair - whose instincts are right and whose willingness to put up a fight is discernible but not yet militant enough - would do well to emulate.

January 27, 2004

"I wish to express my disgust..."

A wonderfully self-important open letter of protest to my new friend Charles Kennedy is appearing on the Internet, and I thought I should do my bit to publicise it. It's written by one Nick Dearden, who is something called Campaigns Director for War on Want. Here it is, heavily edited but with no substantive point omitted:

Dear Mr Kennedy

I wish to express my disgust at the dismissal of Jenny Tonge from your front bench. That poverty and desperation caused by years of Israeli aggression - the biggest source of instability in the Middle East - leads people to suicide bombings is obvious. Without trying to understand the conflict in this way, we have no hope of achieving peace in the region. Jenny Tonge's comments on Palestine were not only reasonable but express the feelings of many people in this country, and probably the majority of people across the world.

Blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah.

Blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah.

Mr Kennedy, you have stated many times that you are a man of principle, that your form of politics centres on truth, on justice, on rising above vested interests. Yet your action of Friday was one of the most cowardly political acts I have ever witnessed. In one act you have made a lie of everything you claim to stand for, and I am sure that many people will be deeply disappointed.

Yours

Nick Dearden

Don't you just love that rhetorical device of asserting that some empirical claim that happens to coincide with the political prejudices of its utterer is 'obvious', thereby obviating any requirement to prove it? Mr Dearden is quite experienced in deploying it, in lieu of any other method of demonstrating what he confidently declares to be 'understanding', as I have recalled. A little while ago - for Mr Dearden is no more of a Liberal Democrat than I am, as you might have inferred from the absence of any reference in his letter to his acquaintance with the party - he popped up as spokesman for a front organisation for the Socialist Workers' Party called 'Globalise Resistance'. In that capacity he was privileged to have a BBC Six O'Clock News Forum devoted to himself a couple of years ago, to publicise May Day protests. The following exchange took place between him and the interviewer, who was reading out listeners' emails:

Interviewer: Let's talk about your interests as a group. Let's move onto the developing world. Oliver Kamm, UK: "A notable beneficiary of globalisation is the Third World. Developing countries need foreign capital in order to fund the current account deficits that arise when a country's investment opportunities exceed domestic savings. How do you feel about your role in campaigning to keep the Third World poor?"....

Dearden: Well all of these economic theories are basically manmade constructs - we've created the world to operate like this and it's in the interest of a few people who've created the world to operate like this that it continues to operate like this. We're part of a global movement, so today there were millions of people in Africa, in Asia, in Latin America, also marching with us. We quite often take our lead from those movements and those people are saying - we don't want the freedom to be part of the World Trade Organisation, we don't want the freedom to take World Bank loans, we have enough food, we have enough basics in our country to feed and clothe everybody in our country. It's the economic system that the West has created that forcibly removes those resources from our country in order to make a few people in the West far richer than they actually need to be.

So I would completely dispute the fact that we're taking money out of the Third World. What we are arguing for is a democratic Third World, is a democratic globe where people can decide how the resources that they create are used and we want those resources to be used on making people's lives decent rather than basically making a few corporations very wealthy.

Impressive, eh? At least, I'm sure it would be if I understood it - especially the bit when he started disputing something he then termed a 'fact', on which, bizarrely enough he was correct (countries that run current account deficits are net importers of capital) but plainly hadn't intended to be. Note also his astonishing, horrifying assertion that developing countries can subsist purely on self-sufficiency; it would be ironic if it were not so serious a subject that a man who believes such things should now be operating under the title 'War on Want'.

Still, it's good to know that in his new role Mr Dearden places such a premium 'on truth, on justice, on rising above vested interests'. In 1990 War on Want was found to be insolvent, have submitted misleading accounts for five consecutive years, that a bank balance of £1 million ought to have been stated as an overdraft of £40,000, that money held on trust had been commingled with money needed to run the charity, that debts had been uncollected and that membership records were inaccurate (cited in Dominic Hobson, The National Wealth, 1999). If I were a contributor to War on Want, however enamoured I was of Jenny Tonge, I think I'd want someone there who spent his time on competent administration of revenues and control of costs before I gave Nick Dearden a job, let alone a megaphone.

January 26, 2004

Do-It-Yourself Economics

Continuing an occasional series in which public figures make dogmatic economic assertions that, while enduring and popular, are otherwise inexplicable. The term was coined by David Henderson in his 1985 Reith Lectures, Innocence and Design.

The government must do more to help our businesses compete in overseas markets, just as rival countries’ governments do.
Digby Jones, Director-General of the Confederation of British Industry, The Guardian, 26 January 2004


The government has economic duties that are important and extensive. Those I would list at a minimum are providing public goods, levying taxes in a way that is widely accepted as fair rather than arbitrary, controlling inflation, maintaining an adequate level of demand, managing public borrowing such that the budget balances over the course of the business cycle, dealing with negative externalities that aren’t efficiently corrected through the marketplace, providing social benefits and redistributing income in order to tackle poverty. These are ambitious goals with no obviously correct way of accomplishing them; any government that could claim tolerable success in them will have done a worthwhile job and a public service.

To claim that in addition the government has a duty to ‘help our businesses compete in overseas markets’ is a gross and impertinent non sequitur. I have read Jones’s article several times, and I have no idea why he issues this stern injunction. Actually, that’s not strictly true: the clue lies in his preposterous designation of other countries as ‘rivals’. So they may be on the football field; they are not rivals or competitors in the international economy.

The notion that government should promote exports is a hangover from the post-war period when exchange rates were fixed and sterling was not a convertible currency. The term ‘balance-of-payments deficit’ became a recurring feature of British politics in that period, when official reserve transactions (which are an important part of the balance of payments under a fixed-exchange-rate regime) were a separate part of the national accounts. But advanced industrial economies with floating exchange rates and relatively free capital flows do not have balance-of-payments problems: a deficit on current account will always be balanced by a surplus on capital account. If a country is buying more goods and services from the rest of the world than it is selling, then it must also be selling more assets to the rest of the world than it’s buying.

Countries can certainly suffer from adverse currency movements (up or down) if they run a mix of policies that is inconsistent with stable inflation – but the remedy is already within the remit of what the government’s legitimate responsibilities are (in the UK, the independent operation of monetary policy to meet an announced inflation target). Governments have no business whatever in promoting exports, which are a cost and not a benefit: they are what we give up in order to purchase things we want. What is particularly outrageous about the assertion of the Director-General of the CBI is his insistence that government take upon itself, at taxpayers’ expense, the promotion of a sectional interest – namely his members.

I support Tony Blair against his allegedly Left-wing but almost invariably reactionary critics on many things: Iraq, top-up fees, foundation hospitals, the lot. But there’s one thing I don't defend him on. His critics claim he pays too much attention to the business lobby, and – oddly enough, and for reasons that they probably wouldn’t recognise – his critics are right. Blair does place too high a regard on the judgements of industrialists, who are merely one lobby among many others and who have no more necessary expertise in economic management than the most obdurate trade union leader. I draw the analogy deliberately, as a brace of television programmes this week to mark the twentieth anniversary of the miners’ strike reminds me of the economically insupportable demand of the then miners’ leader that no pit should ever be closed on economic grounds. Nonsense it may have been (and was), but the National Union of Mineworkers is a shadow of its former self, while to this day one can rely on the CBI to come up with destructive tomfoolery.

January 25, 2004

More on ideological apology for terror

Well, this is interesting. Peter Black, a serving Liberal Democrat politician in the Welsh Assembly (and who considers Charles Kennedy had no choice but to sack Jenny Tonge), discloses:

There have been lots of messages to the party condemning the actions of Charles Kennedy in sacking [Jenny Tonge], stating in some cases that it is a pro-Israeli act, in others that it is intolerant and illiberal and in one case that he lacks the courage that Jenny Tonge showed in speaking out.

I've said what I wanted to on this issue, and hope (though do not expect) that it will be unnecessary to return to it. It was not a pro-Israeli act to sack Dr Tonge, other than in the indirect sense that Israel is a constitutional democracy and the sentiments Dr Tonge expressed - ideological apology for terror - were inconsistent with democratic politics. But that's just the point: what was wrong with Dr Tonge's remarks was only tangentially, if at all, concerned with the politics of the Arab-Israeli conflict (on which subject I deliberately made no reference in my criticisms). More important and fundamental, those remarks made porous a boundary that democrats must observe and where necessary shore up.

To those who genuinely can't see this, I'm not sure how best to explain the point or even whether it's worthwhile to make the attempt. Nonetheless I took down from my shelves this afternoon a volume that is unconnected with the politics of the Middle East but is concerned directly with the issue of principle in this discussion, and I consider addresses it well. It's a set of essays, published in 1978 and long out of print, entitled Herod: Reflections on Political Violence. The author is Conor Cruise O'Brien, historian and polymath, who in the mid-1970s was a Labour minister in the Fine Gael-Labour coalition government in Ireland.

O'Brien mounted then, and has done since, an astonishingly brave campaign to isolate the apologists for IRA terrorism in his own country. He was brave in one - basic and physical - sense because he clearly laid himself open to terrorist attack; he was if anything even braver in identifying the ideological roots of terror in the widely-held shibboleths of Republican discourse among Irish constitutional politicians and in the Irish press. These were nothing so crude as outright support for terrorist bombings. They were a set of shared assumptions - "Ireland's right to unity; the corresponding non-right of the Northern Ireland majority to have a state of their own; the deluded and ridiculous nature of that majority; the baseness of the British, the absurdity of their institutions and the brutality of their forces; the identification of Irish patriotism with anti-British feeling" - that oppressed O'Brien with "the sheer implacable, impenetrable cosiness of it all". And he goes on to make a reflection that, but for its referring to Ireland rather than the Arab-Israeli conflict, could have been written today about the ideological premises of Dr Tonge and her friends:

What was most oppressive was not the legitimation of violence in itself, but the frivolity of this legitimation, the refusal to see that it was legitimation, or that legitimation was important. 'Violence is a by-product of the partition of our country' is a statement by a political leader - Mr Jack Lynch, now [1978] Taoiseach [of a Fianna Fail government] - who has often and sincerely condemned the IRA. But if you tell him that in that and similar statements he and his friends have provided the IRA with its charter of legitimacy, and that it is a sense of legitimacy which sustains a fighting force and keeps up the killing, then he will look at you with those hurt eyes: 'How can you say that of me?'

How apt; how wise; how quietly devastating to a certain type - the frivolous type - of political activist who knows nothing, literally nothing, of the impact of terror on ordinary acts of living. I have heard it said, and I know it to be true, that when an Israeli family parts at the start of each working day, its members are sure to kiss and declare their love for each other for they know there is a not insignificant possibility they will never see each other again. It's a society in which it takes reserves of courage merely to go shopping, travel on a bus or eat in a restaurant.

Dr Tonge gave not the slightest indication that she was aware of the moral import of remarks that would have been culpable had they been off-hand, but which she made even worse by devoting the best part of a day to uttering judgements of stupefying frivolity to various media. That large numbers of her party consider she has been wronged and is courageous speaks for itself and requires no further comment from me.

Except one. I gave my views on Dr Tonge's remarks to a senior Liberal Democrat MP, who replied on Friday morning robustly dissociating himself from what she had said. He sent me a further email in the afternoon immediately Dr Tonge's sacking had been made public to inform me of that fact. My inference from the sequence of his remarks is that the decision to sack Dr Tonge had been made almost immediately and then conveyed to senior members of the party.

I'm unembarrassed and indeed thankful, if marginally surprised, to say this. On all appearances the Liberal Democrat leadership handled this matter well. It was important that they act decisively; they did so, and I congratulate them upon it. Let us hope they manage to instil within their party ranks an awareness of why they acted thus.

UPDATE: Wouldn't you know it? Dr Tonge now claims - despite her serial broadcast interviews throughout Friday and her own 'clarification' issued through the Liberal Democrats' press office - that her remarks were 'misinterpreted'. With all the capacities of emphasis and rhetorical force that my knowledge of English allows me, I am unable to overstate this judgement: no they weren't. They were understood perfectly well, and that's what Dr Tonge is complaining about.

UPDATE II: The Lib Dem politician Peter Black, whom I quote above, has contributed a comment on this post in which he complains that I have falsely associated the whole of his party with Jenny Tonge's views. For reasons I explain also in the comments section, this is a baffling (if revealingly defensive) accusation: being a notoriously fair-minded commentator on Liberal Democrat affairs, I went out of my way both to mention Mr Black's own support for the sacking of Dr Tonge and to commend Charles Kennedy on the speed of his decision. My point in this post was rather to reflect on the disturbing fact that a significant body of opinion within the Liberal Democrats believes that Dr Tonge has been wronged and should be reinstated. My point is not open to dispute, as is confirmed by a report in The Guardian (Monday):

Charles Kennedy is facing calls from rank-and-file Liberal Democrats to reverse his decision on Friday to sack Jenny Tonge from the party's front bench, after she said that she might be a suicide bomber if she lived in Palestine.

Yesterday the outgoing Liberal Democrat deputy chairman, Donnchadh McCarthy, said that he was mounting a petition for her reinstatement. Although not well known outside the Liberal Democrats, Mr McCarthy carries influence with party activists.

He said yesterday: "The sacking of Jenny Tonge has been greeted with dismay across wide sections of the party. Jenny made a brave attempt to try to bring attention to the fact that if the appalling suicide bombings are to stop, then we need to understand and address the desperation and political alienation that leads [sic] to such awful acts of violence.

"The party should take no lessons in condemning violence against innocent civilians from the Tory Party, which have [sic] been such enthusiastic cheerleaders for the war in Iraq in which tens of thousands of innocent people were maimed and killed."

The witlessness and indecency of Mr McCarthy's remarks are not for the moment the issue at hand (though it should not be overlooked that he compares the actions of British and American troops, who in combat go to extraordinary lengths to avoid civilian casualties, to those of terrorists who target civilians for killing). What is of rather greater moment, and indeed fundamental significance, for British politics is that a substantial body of Liberal Democrat opinion - "across wide sections of the party" - does not understand the nature and extent of the gulf that separates democratic politics from political violence.

January 23, 2004

Ideological apology for terror

Having observed a vow of silence concerning the Liberal Democrats for a full week, I’m tempted to point out what happens when that party is free of the restraining influence of my scrutiny. But unfortunately this is no matter for facetiousness:

A Liberal Democrat MP sparked outrage last night by saying she would consider becoming a suicide bomber if forced to live like Palestinians.

Pro-Israel politicians were incensed by Dr Jenny Tonge’s remarks.

But a defiant Dr Tonge, the party’s former international development spokeswoman, told a pro-Palestinian lobby that life under Israel could be intolerable.

"That sort of thing repeated on a daily basis made me understand how people can become suicide bombers," she said.

"I think if I had to live in that situation - and I say that advisedly - I might just consider becoming one myself."

Dr Tonge didn’t disclose whose advice it was on which she had acted advisedly, but the evidence suggests it was someone concerned to dig a hole still deeper for her:

Dr Tonge issued a further clarification of her remarks through the Lib Dem press office, but they seemed unlikely to satisfy her critics.

The MP said: "I do not condone suicide bombers or terrorism. But I do understand, having been to Palestine myself and having seen the daily barrage of humiliation and aggravation [sic] faced by Palestinians, why suicide bombers opt for this most desperate of actions.

Unsurprisingly the political reaction across parties – though not, apparently, including the Liberal Democrats themselves - has been swift and deprecatory. It should be obvious – though I fear that to some of the shriller Liberal Democrats it isn’t obvious at all – that Dr Tonge’s remarks are incompatible with any reasonable conception of public service in a constitutional democracy, but it’s worth spelling out why the empirical claims and the political principles underlying her views are inflammatory nonsense.

First, Dr Tonge’s insistence that she “understands … why suicide bombers opt for this most desperate of actions” is factually wrong. She doesn’t understand. She has made no attempt to understand. Instead of so attempting, she has merely retailed an idle stereotype that shifts the moral responsibility for acts of barbarism on to the victims and away from the perpetrators.

What drives and characterises terrorists is a question to which an economist at Princeton University, Alan Krueger, has devoted statistical expertise and dispassionate analysis. Writing in the New York Times last year he noted that Palestinian terrorists do not fit the conventional image of being desperate and impoverished:

The stereotype that terrorists are driven to extremes by economic deprivation may never have held anywhere, least of all in the Middle East. New research by Claude Berrebi, a graduate student at Princeton, has found that 13 percent of Palestinian suicide bombers are from impoverished families, while about a third of the Palestinian population is in poverty. A remarkable 57 percent of suicide bombers have some education beyond high school, compared with just 15 percent of the population of comparable age.

This evidence corroborates findings for other Middle Eastern and Latin American terrorist groups. There should be little doubt that terrorists are drawn from society's elites, not the dispossessed.

With a Czech collaborator, Jitka Maleckova, Professor Krueger published his research findings in detail in a National Bureau of Economic Research working paper in 2002 (available for download here for a nominal fee). He concluded that there was in fact some positive correlation between privilege and terrorism, and drew a parallel with those who engage in political activity:

More educated people from privileged backgrounds are more likely to participate in politics, probably in part because political involvement requires some minimum level of interest, expertise, commitment to issues and effort, all of which are more likely if people are educated and wealthy enough to concern themselves with more than mere economic subsistence ... Terrorist organizations may prefer highly educated individuals over less educated ones, even for homicide suicide bomb attacks. In addition, educated, middle or upper class individuals are better suited to carry out acts of international terrorism than are impoverished illiterates because the terrorists must fit into a foreign environment to be successful.

It’s possible that Dr Tonge has read this research and uncovered flaws in the data and methodology (though it is should be noted that Professor Krueger, whose specialist area is the economics of the labour market, is highly familiar with research areas that require analysis of data), and has simply decided to keep her findings secret. It’s also possible that she’s a silly woman who has no idea what she’s talking about. I merely state the possibilities: you decide.

But Dr Tonge’s pronouncements are worse than merely ignorant. Her protestation that she does not condone terrorism is a disingenuous and indecent rhetorical trick intended to absolve her of responsibility for doing exactly what she claims she isn’t doing. The point about this type of reasoning has been made with pellucid clarity by the political philosopher Michael Walzer, author of one of the most important books of our age on the ethics of war. Shortly after September 11 he identified the type of moral evasion that Dr Tonge exemplifies, and named it the ‘Politics of Ideological Apology’. He lists and dissects several spurious rationalisations for terrorist acts:

The fourth excuse plays on the notion of innocence. Of course, it is wrong to kill the innocent, but these victims aren't entirely innocent. They are the beneficiaries of oppression; they enjoy its tainted fruits. And so, while their murder isn't justifiable, it is ... understandable. What else could they expect? Well, the children among them, and even the adults, have every right to expect a long life like anyone else who isn't actively engaged in war or enslavement or ethnic cleansing or brutal political repression. This is called noncombatant immunity, the crucial principle not only of war but of any decent politics. Those who give it up for a moment of schadenfreude are not simply making excuses for terrorism; they have joined the ranks of terror's supporters.

I have no hesitation in declaring the Liberal Democrat MP for Richmond Park an ideological apologist for terrorism. The response of her party so far has been muted or even collaborative. Dr Tonge put out her ‘clarification’ through the party’s Press Office. One very young member of her party even commended her ‘honesty’ – evidently unaware that honesty is the last characteristic Dr Tonge displays in her moral evasions, and that in any event reticence in proclaiming one’s views is much the more honourable course where those views stand outside the bounds of civilised political discourse.

A principled democratic party cannot afford to categorise Dr Tonge’s opinions as ‘personal views’, as if they were merely a legitimate minority opinion within a latitudinarian whole. They are abhorrent, they need to be described as such, and Dr Tonge must be given the choice of retracting her remarks or losing her party’s whip. Today.

UPDATE: I asked for action today, and she was sacked from her party's front bench this afternoon. This is a minimal step. If, as Charles Kennedy declares, Dr Tonge's views are incompatible with Liberal Democrat principles, it raises the question of why she has not also been deprived of the Liberal Democrat whip. Nonetheless, it would be churlish of me to dispute that Dr Tonge's sacking and the speed with which it was accomplished are to Charles Kennedy's credit, and I don't dispute it.

January 22, 2004

"What a quite remarkable man"

Tom Watson, the blogging MP and a thoroughly sensible Labour man, took part in a radio discussion yesterday with Tony Benn and was impressed:

"I got a pager message just after five, from a close friend, saying there is life after parliament."

So ends the latest edition of the Tony Benn diaries, Free at Last! Mr Benn describes his last day as an MP. He just packed his belongings into a cardboard box and was away. Away to conduct 358 public meetings in something like 270 towns!

The radio interview went well, although of course I was in the presence of Tony Benn and therefore slightly awe struck. His diaries are 15 million words long and go back to the 1930's. He told me that they are stored in nine garages. What a quite remarkable man he is.

Unfortunately Tom doesn't quote the most priceless sentence in the whole book, describing a meeting Benn had at the Russell Hotel in London in May 1994 (page 246):

Then Pilger and Chomsky talked to each other, both saying how difficult it was to get through media censorship.

I can't quite explain why, but the image of two media superstars earnestly assuring each other of their persecuted status never fails to bring a smile to my face. That they were observed admiringly by a former Cabinet minister and prolific columnist, who could see nothing funny in the proceedings, makes my disposition more cheerful still.

In some respects, Benn is indeed a remarkable man. To have served in two governments and almost been elected Deputy Leader of his party despite manifest incompetence in public affairs is unquestionably an achievement of sorts. His principal actions in government were to ensure the continuation of Concorde - a plaything for wealthy industrialists and film stars, subsidised by the taxpayer - and to waste much government time and some public money on ill-conceived schemes of 'workers' control'. The most absurd of these schemes was an ailing workers' co-operative, formerly a private company, called Kirkby Manufacturing and Engineering (KME), which Benn championed in the early days of the 1974-79 Labour Government, when he was Industry Secretary. KME made radiators, parts for British Leyland and - heaven knows why - orange juice. Benn first gave a subsidy of £3.9 million of public funds to the company, and a further £860,000 was awarded in 1977. The money might as well have been thrown in the river: the company's financial position deteriorated such that a loss of £700,000 in the first half of 1978 was succeeded by a loss of £1 million in the second half. Whereupon a private firm called Worcester Engineering was persuaded to take over KME with another public subsidy of £4.3 million.

With a peerless record of feckless underachievement to his name, Benn mounted a destructive campaign to take over the Labour Party once it had lost the 1979 election. I don't really need to rehearse the history of this miserable period in the fortunes of the social democratic Left, but it's worth recalling that after Labour had suffered the inevitable catastrophic defeat in the 1983 general election on a programme of unilateral nuclear disarmament and a command economy, Benn (who had lost his own seat in the debacle) gave a novel interpretation of events. In an article in The Guardian he pronounced the election result a 'remarkable achievement' for the shattered remnants of the Labour Party, on the grounds that for the first time ever some 8 million people had voted for an explicitly Socialist programme. I was an undergraduate and a Labour activist at the time, and when Benn came to speak at my university shortly afterwards I asked him whether he was prepared to accept the overwhelming personal credit for this achievement that he undoubtedly deserved. Unfortunately I was so smug at what I imagined to be the cleverness of my question and so pleased that it annoyed a lot of people in the audience that I can't remember what the answer was. I doubt very much that Benn was fazed.

Since then Benn's political longevity and obsessive record-keeping have dimmed the public memory of his more fanciful ventures, but I'm afraid the affection that surprising numbers of sensible people such as Tom feel for Benn has yet to settle on me. I was cheered a few years ago to find that my incredulity at this phenomenon was shared by George Walden, a highly intelligent and magnificently independent-minded Tory MP till he voluntarily left the Commons and the Conservative Party at the 1997 election. In his excellent memoirs he comments on the sentimentality accorded a certain type of politician:

In my first months in the Chamber I watched the performance of many people on both sides of the House with awe. The least impressive, it seemed to me, were [Enoch] Powell, [Michael] Foot and Benn - seen then as the three great parliamentarians of our time. To them I listened with distaste. What struck me was how much they had in common. All were burning patriots who had done precious little for their country in their long parliamentary careers and each, in his way, a deal of harm. Powell appealed to bigotry, and was to find his spiritual home in the rancid politics of Northern Ireland. Foot and Benn, contrary to Right-wing belief, were no Marxists, Marxism requiring a degree of intellectual discipline, but self-indulgent patricians. All were essentially small men affecting the postures of great ones. All were fiery orators and intellectual mountebanks (Foot's book on H.G. Wells and Powell's cranky theories on the gospels were laughed to scorn by expert critics). All were Europhobes and Americanophobes, stroppy Little Englanders who, insofar as they were known at all, enjoyed no status or respect beyond our shores.... It struck me that, seen together, Foot, Benn, Powell and [Julian] Amery [an obscurantist Tory MP] represented the worst of their generation, escapologists from reality who were unwilling to stare the truth of Britain's position in the face and who made a career by bamboozling the impressionable.

In some respects, Walden's comparison is too kind to Benn. Powell was a bigot and a crank all right, but he was at one time in his life a genuine Classical scholar. (There again, Walden omits mention of another of Powell's preposterous idees fixes: the notion that the true author of the works of Shakespeare was Edward de Vere, the 17th Earl of Oxford. This is quite a popular fantasy among English snobs and American amateur enthusiasts: of the latter, even so distinguished a public servant as Ambassador Paul Nitze counts among their number. I can only say that, while a brilliant man, Nitze is no Elizabethan scholar.) Foot is a risible literary critic, but he has actually read the books even if he hasn't understood them. So far as Benn is concerned, his diaries contain nothing on literature, music or anything - his family excepted - that lies outside the narrow boundaries of his political obsessions. There is, in the celebrated phrase of Denis Healey - the most genuinely cultured and intellectually brilliant politician of that generation - no 'hinterland' to Benn.

In my view, that matters, for it's replicated in an extraordinary lack of imagination and judgement in Benn's perception of the world order. In his last speech to the House of Commons, he gave a sanctimonious pocket-sermon he had recited many times before:

The House will forgive me for quoting myself, but in the course of my life I have developed five little democratic questions. If one meets a powerful person--Adolf Hitler, Joe Stalin or Bill Gates--ask them five questions: "What power have you got? Where did you get it from? In whose interests do you exercise it? To whom are you accountable? And how can we get rid of you?"

Last year, Benn did indeed meet a powerful person - an absolutely powerful person - to whom he had the opportunity to address these five little democratic questions. Yet oddly enough none of them appeared in the transcript of the 'interview' Benn conducted with Saddam Hussein on 4 February and which was broadcast by Channel 4 News. Instead viewers were treated to this type of hard-hitting, no-nonsense inquisition by Benn of a man responsible for gassing the Kurds at Halabja:

There are tens of millions, maybe hundreds of millions of people in Britain and America, in Europe and worldwide, who want to see a peaceful outcome to this problem , and they are the real Americans in my opinion, the real British, the real French, the real Germans, because they think of the world in terms of their children.

I have ten grandchildren and in my family there is English, Scottish, American, French, Irish, Jewish and Indian blood, and for me politics is about their future, their survival. And I wonder whether you could say something yourself directly through this interview to the peace movement of the world that might help to advance the cause they have in mind?

I wish I could find something witty or at least ironic to say about a man capable of such hypocritical evasion and mindless wittering before a genocidal tyrant, but I can think only of the words of the Boston lawyer Joseph Welch to the notorious Senator Joe McCarthy:

Until this moment, I think I never really gauged your cruelty or your recklessness.... You have done enough. Have you no sense of decency, sir, at long last? Have you left no sense of decency?

January 20, 2004

The Democrats and trade - again

It really is splendid news that Richard Gephardt is out of the race for the Democratic nomination. The man has founded a political career on economic demagoguery, and it's fitting to the merits of his case that he should have turned out to be the perpetual loser. I hope, though am not confident, that the Democrats can now abandon the anti-trade stance that Gephardt has popularised and with which he has impoverished American political debate.

To that end, and with obviously minuscule influence, I want to pin down the criticisms of free trade before moving on to other matters. Fortunately two of my correspondents have objected, from incompatible standpoints, to my last post but one, entitled Democrats against the world, and I will address their objections directly.

The first correspondent, from the US, maintains:

"'Level playing field' advocates—including, most prominently, the labor unions—say that it will prevent American jobs from being stolen. Another way to say this is that it will prevent jobs in poor countries from being created."

It's this simple: why should a job in one country be lost so that a job can be created in another country? What obligation does the US have to the world that is so important that it must allow its own citizens to be deprived of jobs so that someone overseas can have one?

Is this just down to the have-nots drowning out the voices of the (for the time being) haves or is there some silver lining for the recently fired American employee in this picture that I am missing?

I'm not saying free trade is good or bad, just raising a very simple point -- one which I have yet to see any Gephardt opponent / anti-anti-free trader / etc take the time to respond to. It was one thing when it was just textiles jobs that were headed overseas, but now it's the tech sector, and that's going to hit a lot closer to home with anyone who dreamed of hopping on the PC/e-gravy train of the 80s and 90s, once it gets up to speed.... [He then argues that protecting American jobs will be a huge vote-winner for the Democrats.]

Well, I'll respond to it. I believe that even if it made economic sense to protect US (or British) industry from foreign competition in order to safeguard jobs, it would still be morally wrong to do so at the expense of Third World development. But fortunately (for I am no moral philosopher), the argument for protecting jobs through trade restrictions is bad economics as well as bad ethics.

The overall effect of trade on aggregate US employment is (approximately) zero. Of course trade destroys some jobs, in import-competing industries; it also creates new jobs, in export-competing industries. Over time these will balance each other. This happens because if there is an imbalance between jobs destroyed and jobs created then it will be generally be offset by either an adjustment in wages or a shift in macroeconomic policy. For example, a rise in unemployment will typically result in an easier monetary policy by the Fed, which will stimulate growth and put downward pressure on the exchange rate. This in turn will, other things being equal, expand demand for exports and dampen demand for imports, causing employment to rise. In the long run the variable that total employment most closely tracks is the number of people in the labour force. This will depend on such things as demographics and labour market policies (which affect the so-called non-accelerating inflation rate of unemployment) rather than trade.

This is not just a matter of theory. This table from the Council of Economic Advisors' Economic Report of the President shows annual data going back to the 1940s for the civilian labour force and civilian employment (these are columns C and D in the table; the most recent data are on the second sheet). They track each other closely. There is always some unemployment, but this is determined in the short run far more by the decisions of the Federal Reserve Open Market Committee than by trade, while over the long run employment will resume its relationship with the labour force.

The reason jobs lost will be balanced by jobs created is that imports and exports are not independent. It is not possible to boost exports without at the same time expanding imports. In order to import goods and services we need to generate the earnings to pay for them, which is to say we need to export. (Putting it like this brings out the fact, as frighteningly few politicians understand, that exports are a cost, not a benefit: they are what we have to give up in order to enjoy the benefits of imported goods.) If we impose import controls, then our trading partners will be unable to generate the foreign earnings necessary to buy our exports.

So it's not true that trade costs American jobs. It's not true either that the jobs that are destroyed by imports are high-wage jobs. Before he was Treasury Secretary in the Clinton administration, Larry Summers co-authored a 1989 Brookings paper that concluded "after being adjusted for skill differences, wages in export-intensive industries are 11 per cent above average, whereas wages in import-intensive industries are 15 per cent below average". Every subsequent study that I know of has been consistent with these findings: the two big industry exceptions to this conclusion, steel and autos, are unrepresentative of the wider economy.

Summers's conclusion points to one facet of why trade benefits America and indeed its trading partners. Trade is valuable not because it boosts employment - it doesn't, as we free traders should acknowledge - but because it raises living standards by allowing specialisation in production. Trade is especially important for Third World development, because it enables gains in productivity and thereby increases in real wages, and from that the ability of a country to lift itself out of poverty. I argue below that an anti-trade bias in domestic policy by Third World nations is a more important obstacle to their economic betterment than rich-world protectionism, but rich-world protectionism is certainly an obstacle and progressives will wish to lift it rather than compound it.

On which point, I turn with a heavy heart to a comment posted by one of my regular contributors, who lives in Manchester. He writes (beginning with a quotation from me):

"Trade is not a zero-sum game: it's a mutually enriching exchange that allows gains in living standards through each country's being able to specialise in what it produces."

I'm surprised noone [sic] has challenged this. As you may be aware, I am not an expert in economics. Nonetheless this sounds like a ridiculous statement. Trade will ideally be a mutually enriching process, sure. But sometimes you get ripped off, no? Sometimes a country like Vietnam starts selling a whole load of coffee on bad IMF advice, and there's a glut in the coffee market, and prices plummet, and this is enriching for consumers of coffee and enpoverishing [sic] for producers of coffee.

Sometimes countries aren't able to specialise in what they have a competitive [sic - I think he means comparative, but can't be sure from the context] advantage in, for example when the US/UK floods the developing world with agricultural products and erects tarrifs [sic]. It's still trade, if not 'free' trade. So I dispute your claim that trade is a mutually enriching exchange.

Go ahead Mr Kamm, sneer at my ignorance, I thought I'd rattle the cage anyway.

PS: Gore and Leiberman [sic] wanted to protect the environment and labour standards? No way! What fools! If we insisted that products were built in factories with a fire escape, then the poor would never escape from poverty! - he writes with sarcasm.

It's not my purpose to defend the IMF. (Though in fact the IMF has had an unfair press: in many countries over some decades its policies have contributed to sound economic management. The British Labour Government's borrowing from the IMF under certain conditions in 1976 was much criticised at the time both by the Conservatives and by the Labour Left, but it was an entirely sensible recourse for a country that was soon to become a net oil exporter. The Chancellor in that government, Denis Healey, in my view did an excellent job of dealing with a wretched economic inheritance and a recalcitrant party - but that's a post for another time.) But it's worth interjecting that whatever anti-globalisation web site my interlocutor has got his Vietnam example from didn't trouble to check its facts. The usual villain cited in this case is the World Bank, which allegedly lent large sums to expand the Vietnamese coffee industry, whereupon prices collapsed on the world market and hardship resulted. In fact, the World Bank - which has become commendably open and self-critical about schemes that have failed - played almost no part in this at all, and made no investments designed to boost coffee production. Only two of its projects in rural Vietnam had even a connection with coffee, and one of them - an agricultural diversification project - was intended to diversify Vietnamese production away from this single, highly-cyclical commodity.

On the question of trade more generally, there is no question but that Vietnam has benefited from a more open economic regime. Between 1990 and 2002, total exports and imports of goods (in US dollar terms) both increased on average by 21 per cent a year, significantly faster than GDP, while the merchandise structures of exports and imports became - as the IMF had intended and advised - more diversified. In 1992 almost half of Vietnamese exports were in the commodity sector (12% rice and 37% other primary commodities); in 2002 the equivalent figure was 25% (4% rice and 21% other primary commodities). Crude oil was down from almost a third of exports to a fifth, while manufactures in this rapidly industrialising nation grew from 6% to 32% of exports. (All these data are taken from the IMF report Vietnam: Selected Issues, 5 December 2003, page 14.)

Poverty in Vietnam has declined sharply since the policy of Doi Moi - a greater openness compared with the Stalinist command economy, and most particularly the abolition of the state's monopoly in foreign trade - was introduced in the late 1980s. In a recent paper on Vietnam's economic performance since 2001, David Dapice, Senior Fellow in the Vietnam Program at Harvard, noted that the poverty rate had fallen from 75% at the initiation of Doi Moi to 37% in 1998 and perhaps 32% in 2001. Dapice speculates that declines in some agricultural prices, including coffee, have contributed to a slackening in the pace of poverty reduction, which I guess is my interlocutor's point - but I give all this background to indicate that if you concentrate on one fashionable campaign without examining the wider economic context, you're liable to miss quite a lot.

On the question of western agricultural tariffs, I am of course opposed to them. Yet - as I mentioned above - rich world protectionism is not an insuperable obstacle to the betterment of developing nations. I wrote about this a few months ago when criticising a report written by my friend Stephen Pollard:

It is simply not the case that EU protectionism is the major cause of restricted growth in Third World exports. A more important factor is the import-substitution strategies that developing countries, especially those in sub-Saharan Africa, have used. An anti-trade bias has hurt export performance by restricting domestic competition. That bias takes the form of significantly higher levels of protectionism in developing countries – in textiles, food and industrial products - than in the rich world. (This chart, constructed for a World Bank working paper from figures compiled by Michael Finger and Ludger Schuknecht, demonstrates the point.)

The point is expounded lucidly by the trade economists Jagdish Bhagwati and Arvind Panagariya (from whom I took the link to the chart) in this article from the OECD Observer:

The recent castigation of rich-country protectionism by the heads of international agencies and in the media, while welcome, is ... little more than a reiteration of the obvious. But the absence of a simultaneous and equally pointed focus on the protectionism of poor countries, which has also been amply documented by informed trade economists, has encouraged several fallacies which can only make it harder to reduce protectionism in those countries. These fallacies need to be exposed and the latest critics, far too often non-trade experts, asked to always condemn protectionism in both poor and rich countries, even as they wreak more contempt on the rich ones.

I hope that my interlocutor in Manchester, and other readers who think like him, will ponder Bhagwati's advice carefully before condemning as 'nonsense' the benefits of the international trading system.

Finally, there's probably little to be gained from instructing a certain type of mind-set on the economics of trade and labour standards, but I'll do it anyway. I'm in favour of good working conditions and environmental protection, and I certainly consider no factory in the world should be without a fire escape; I object strongly to making trade agreements conditional on labour and environmental standards. The reason was well stated by 100 or so Third World intellectuals and NGOs (including incidentally the Secretary of the All-India Trade Union Congress) in a Statement Against Linkage in 1999 to coincide with the failed Seattle summit of the World Trade Organisation. (Contrary to popular mythology, the summit's failure was due not to the anti-globalisers' protests but to the insistence of the United States that trade agreements should be linked to labour and environmental standards. The conjunction of the world's richest country protesting about labour standards ought to have given even the most passionate anti-trade campaigner cause for thought, and perhaps even stirred the realisation that the demand is a transparent protectionist ruse.) The statement observed:

The WTO's design must reflect the principle of mutual-gain; it cannot be allowed to become the institution that becomes a prisoner of every developed-country lobby or group that seeks to advance its agenda at the expense of the developing countries. The game of lobbies in the developed countries seeking to advance their own interests through successive enlargement of the issues at the WTO by simply claiming, without any underlying and coherent rationale, that the issue is "trade-related", has gone too far already. It is time for us to say forcefully: Enough is enough.

Those familiar with the recent history of US labour campaigning will recognise the pattern. In 2000 the US adopted the African Growth and Opportunity Act, which aimed to stimulate development in Africa by offering similar tariff preferences to those enjoyed by Caribbean nations. And you know what? The AFL-CIO, that supposed bastion of progressive values, opposed the legislation.

And this is where we came in. Thank goodness the champion of the cause of American big labour has been knocked out of the presidential race once and for all. May his influence not linger with the remaining candidates.

Iowa

Sorry for absence of posts - went down with a heavy cold over the weekend, but will update the site in the next 24 hours or so.

Nice to see Gephardt out of the race and Dean a distant third, however - though I doubt Iowa has wider significance for the nomination. I hope Lieberman does well - his appeal as being strong on defence and liberal on social issues is one I have a lot of sympathy for - but it's clear he has no chance of the nomination because the party's activists don't inhabit the same ground as the electorate. To hear Howard Dean's assurance that he stands for "the Democratic wing of the Democratic Party" is to recall the famous insistence of a Labour Party constituency activist in the early 1980s that "we must not compromise with the electorate". If you're a left-wing activist who despairs of the enlightenment of those outside your sect, the chances are you'll have minimal appeal to them.

I've been particularly taken in the campaign so far with the lack of artifice of Howard Dean's supporters. Commenting on the recent change of Prime Minister in Canada, the web log of the 'Baltimore for Dean' supporters declares 'Another Tony Blair in Canada? Let's hope not':

Jean Chretien is leaving office and I am very sad to see him go. I think his liberal social views were first rate and very much the direction in which the US, as well as the world, should also be heading.

I was further saddened to see that his successor Paul Martin, intends to make improving ties with the US a top priority of his. Perhaps, creating a cabinet level committee strictly towards dealing with US-Canadian relations. I am very proud of the nations, Canada included, that stood against this bogus conflict in Iraq. I hope that Mr. Martin will not attempt to drop Canada into the heart of this mess, just in attempt to improve relations with George Bush. Even dating back to the Reagan years, the Republican administrations have a long history of giving Canadians the shaft through steel & lumber tariffs and I don't see Mr. Bush rectifying that situation anytime soon. Let's remember (and feel free to check the books on this) that our inter-country trading was at it's [sic] best during the Clinton years. Simply put, it is not in the Republican agenda to make life easier for a socially progressive nation. So be warned -- Mr. Bush is no friend & Mr. Martin may be setting himself up for some severe let down if he thinks otherwise. Stand Strong up there guys -- the last thing we need is another Tony Blair type international suck up nuzzling at the teats of the Bush administration while alienating himself from his country.

So get this: a Dean grass-roots organisation complains when Canada seeks to improve relations with the US. The great literary critic Lionel Trilling came up with the term 'the adversary culture' to describe this sort of attitude to one's own liberal democratic nation, and something is clearly amiss when it appears in the campaigning material of supporters of a man who seeks the presidential nomination of one of the two great parties of the world's leading democracy.

The reference to Tony Blair tells us something important that I hope will be understood readily by the liberal Left in this country. Dr Dean's supporters are not our type of Left. Tony Blair supported the United States in overthrowing tyranny in Afghanistan and Iraq, at some cost to his domestic political fortunes. He did so for no reason other than the intrinsic merits of the policy. He was right, for he saw immediately what was at stake after September 11 in curtailing the spread of weapons of mass destruction and attacking the terrorist groups that seek literally to destroy western civilisation.

I follow Canadian politics reasonably closely, and 'Baltimore for Dean' may be assured that Canada is indeed most unlikely to have 'another Tony Blair type' in office any time soon. What is more serious - for transatlantic relations and the security of the west - is that Howard Dean is no Tony Blair.