Category Archives: Uncategorized

The Politics of Money

At present too few of us understand the financial system well enough to know how to reform it, even though, as J.K. Galbraith once remarked, ‘the process by which the banks create money is so simple, the mind is repelled’. But after the events of the last few years all of us can appreciate that the creation of credit is fraught with the potential for abuse. And even a brief examination of the historical record shows that privately owned banks have repeatedly jeopardised the common wealth by exploiting the arcane power of debt creation. Finance should be subject to a prolonged inquiry by the population organized as publics to determine whether and how it should be reformed. Perhaps they will conclude that the central banks in Britain and the United States should only give money to state institutions, either as loans or transfers, as circumstances dictate. State-owned development banks could fund industrial expansion in particular regions and sectors and defined publics would exercise responsible control over their activities. Private banks could continue to take deposits from private investors and use them to make loans. But they would no longer have access to the state’s capacity to generate near limitless credit; they would no longer be able to create bubbles in asset markets; they would no longer need to be bailed out by taxpayers who do not understand and are required to believe, the fate of the sucker through the ages.

Of course a public system of credit might lead to reckless cronyism or bureaucratic torpor. But the current system already does. Employee-owned companies might become unjust and sclerotic. But the corporations they would replace already are. Once generally distributed knowledge can provide the basis for legislation the people might still decide that the current structure of the private sector cannot be improved without unacceptable risks. Or they might decide to abolish private property and try to create a world without exploitation. My own hope is that they will move to democratise the workplace and the system of credit in the context of a steady shift from private opulence to public justice.

The Return of the Public, 2010

How Do You Change the World?

The Greatest InventionJeremy Corbyn’s victory in the Labour leadership elections and Bernie Sanders’ barn-storming campaign for the Democratic presidential nomination have brought economic justice into the very centre of political debate in the English-speaking world. Ideas that once seemed marginal are becoming part of a new common sense.

Since 2003 the Tax Justice Network has been analysing the offshore system and the global economy on which it depends. Its members around the world have been developing both a critique of the current order (Treasure Islands, The Price of Offshore) and a programme of reform (automatic information exchange, country-by-country reporting). Working on a shoestring, they can claim to belong to one of this century’s most influential NGOs.

To order a copy of The Greatest Invention: Tax and the Campaign for a Just Society, visit The book is available as an ebook and paperback direct from the site. It can also be found at a
number of online retailers.

A Convention Parliament

I was eating my breakfast one morning in late 2011 when I was approached by two luminaries in the Labour party. We were in a hotel in Brussels, on George Soros’s dime. Later that day I was going to tell a room full of stone-faced Eurocrats that the extremism that should worry them was the kind that bailed out banks and shifted the costs of said bail-out onto the rest of the population, rather than the imminent Islamicisation of Europe. It was one of my last appearances in the circuits of expenses paid chit chat.

These two had something else on their minds. They wanted to know if I was the author of a disobliging blog post about Miliband’s description of the  Occupy protests as a ‘crisis of concern’, rather than a political event. Between mouthfuls of croissant I admitted I was. Well, one of them, the more senior one, said, with somewhat more venom than I think was called for, words to the effect that Miliband couldn’t give his support to the Occupy protests until they were happening in every constituency in the country, or were getting a lot more media coverage.

Sophisticated leaders wait until they can see where people are going and then they chase after them, the better to lead. It is simple-minded to think that leaders should, you know, lead. That seemed to be the gist of it.

Well, perhaps they were right and I was wrong. If Miliband had gone all out against austerity and bankocracy he would have created all kinds of problems in the Labour Party, for sure. Ed Balls would have resigned, maybe. But it now looks like Miliband could have gone back to the membership with a ‘red agenda’ and romped home.

Anyway, we do know that all the caution in the world didn’t bring Labour victory in the election. And now a politician is articulating a politics that overlaps in important ways with the Occupy movement, and seems to be connecting with people. Jeremy Corbyn is arguing for a response to the economic crisis that shifts the burden away from those on low and middle incomes and onto the wealthiest. Both higher taxes and tighter regulation of the offshore sector are in play. This is exactly the position of UK Uncut from 2010 onwards. Not everyone at Occupy was in agreement with UK Uncut by any means, but an awful lot of them were.

Corbyn is also arguing for thorough-going reform of the financial sector and some innovations in public financing side that would have warmed the hearts of many in the Occupy working groups. Those who struggled to get their heads around modern monetary theory outside Saint Paul’s can take some pride in the fact that their debates and discussions are now being echoed in the rhetoric of a plausible candidate for leader of the Labour Party.

It’s hardly surprising that the kinds of people who occupied public spaces and risked being kettled or arrested for tax justice are willing to chip in a few quid to help push a similar agenda.

But what if this occupation works and Corbyn actually wins? He will have to find a way to build on the momentum and take his policies to the country – the people joining the Labour party now won’t be enough to win a general election, after all.

He has two options. He can try to make peace with the Labour party or he can lead the current wave of enthusiasm for change forward to its natural conclusion – a refounding of the UK state through a reformed constitution. If he takes the first option and tries to lead in the normal way then, like Miliband, he will end up being hemmed in by the right of his party, isolated from those seeking progressive change, and then blamed for the subsequent defeat.

But Corbyn could make a deal with all the progressive groups for an electoral pact centred on a constitutional convention that leads to a new constitution in the next Parliament. He could then use the period between now and the next ballot to build a consensus for deep reform of the UK state along lines that would make Murdoch assisted bankocracy of the kind we currently enjoy impossible.

The second option is more interesting, in that it holds out the hope of a left-wing victory, perhaps before 2020, and a rejection of the politics of austerity. Even more importantly, it is inseparable from a reconfiguring of the British state, and a revolution in general understanding in matters concerning finance, the media and the organization of industry (credit, communication and the corporate form).

As Adam Ramsay has pointed out, the Labour party has historically been quite weak in much of England. It is this weakness, rather than the strength of Conservatism, that goes furthest in explaining the latter’s infuriating habit of winning elections. So, Labour could stand aside in some seats in favour of the Greens in Bristol, Norwich, that kind of place. It could also do so in some other places in England where independents stand a chance and Labour are trailing. Let Plaid have their seats unopposed next time round.

No deals with UKIP.

In Scotland Labour can stand aside in some seats in favour of the SNP and campaign hard elsewhere. They could also back a Green candidate somewhere, to show that they aren’t, in fact, narrow-minded sectarians. Scotland’s civic nationalism is a strand of opinion that Labour should not be seeking to wipe out. Of course the Welsh and Scottish nationalists would have to agree to a constitutional convention, but it would be hard to refuse since if either nation rejected the British constitution on offer, they would effectively be voting for independence. Among many other things a new constitution has to deal with the national question in a durable way.

It might be that the Scots decide for independence. But they might quite like being part of a reformed British polity. For example, monetary policy is currently set  in London by a committee of the Bank of England where London’s financial sector predominates. A Bank of Britain, with regional and national representation, could ensure that the interests of the banks no longer trump the needs of the rest of the economy. (Each of the regions and nations could also run an investment bank under Bank of Britain supervision with a mandate to support infant industries and de-carbonise the economy. The Bank of England staff are very clever, it’s just that they are working for the wrong people.)

At any event, a Corbyn-led informal constitutional convention, which uses the resources of the Labour movement to organize widespread participation in a debate about the fundamentals of governance, will spread the political mobilisation we saw in the Scottish referendum debate to the rest of the United Kingdom. That would be a better use of time and money than trying to win over the media in London, most of whom hate the idea of deep reform or are required to pretend to by their employers. Besides, the structure of the media needs to be close to the centre of a convention’s concerns. Any progressive movement worth a damn should welcome the emnity of the Daily Mail and engage instead with its readers.

This doesn’t mean Labour has to make it arithmetically impossible to win an outright majority, nor does it mean that this is anything other than a one-time deal. The point is to go into the election next time on a shared programme of constitutional reform, which would include a proportional system of voting, among many other things.

A convention would make Corbyn seem like a Prime Minister in waiting, whatever his fellow MPs get up to in Parliament. And it would win over people who know in their hearts that there is something wrong with England in particular and would like to see it sorted out. The electoral pact and the convention reinforce one another. The combination allows Corbyn to stand above party and become a focus for the great energy for reform that now exists. From the perspective of the Labour movement it means that they have a chance to put workplace rights on a much sounder footing by incorporating them into a written constitution.

This approach might not come easily to the Labour left. There is no doubt a lingering hope that, with the right policies, a Labour majority in Parliament can be secured and social justice delivered without the bother of reforming the ancestral constitution. Although Corbyn has expressed support for a constitutional convention it does not feature in his ten-point plan. The emphasis on the economy is understandable, but the economic agenda he wants to promote will not be possible unless the majority of voters become engaged in a substantive debate about political economy that only a wide-ranging convention can deliver. His opponent, Yvette Cooper, has dismissed the idea of People’s QE on the grounds that it is not ‘credible’. At the moment she is right. Most people, including most MPs, don’t understand the monetary system and so cannot judge the idea on its merits. Come election time the Conservatives will make this general incomprehension the raw material of another Project Fear. And the problem runs deeper. The economic vibrancy Corbyn wants will only come from democratic reforms that tie individual energy and creativity to the production of public goods. If we want real prosperity we must, reluctantly or not, embrace democracy.

A surge in the number of registered supporters doesn’t make a Labour-led government inevitable, by any means. If Corbyn is to become the prime minister it will have to be the first stage in a process that develops and shares a progressive agenda and then inscribes egalitarian and participatory democracy into the constitutional structure of the British state. And since economies are the creations of states, in changing the state we have an opportunity to create a modern economy that replaces speculation and money laundering with commons-based production and a Green New Deal. Constitutions are about more than voting systems and tiers of government. They are also about who get to know what, and hence who gets what. They are about the deep structure of society, the mechanisms that create and direct coercive power and that generate consent. Those who think themselves more radical than the Greens might want to look to constitution-building rather than electoralism over the next few years.

A campaign for a convention Parliament, from which would emerge a reformed system of government and a society quickened by new bonds of solidarity, new channels of intelligence and enlightenment, new forms of collective endeavour, this is the kind of thing that would appeal to the best of us, and the best in the rest of us.

As for those two Labour types, I guess they are waiting for Corbyn to fail so that they can get down to business and find a plausible successor to Tony Blair. By 2030, say.

A Regime of Crime

“London’s banks and trading houses defend the interests of the wealthy around the world against the claims of democracy. The place is, in important respects, the capital of global capitalism. As we have seen in recent years this means it is also the capital of organized crime. The apparent solidity and timelessness of the unreformed settlement are central to London’s status. As the Citibank executive Walter Wriston once observed, the trade in dollars outside the US ‘exists in London because people believe that the British government is not about to close it down. That’s the basic reason and it took you a thousand years of history’.

A republican movement for constitutional reform will draw attention to the hidden wiring that connects London to global capital flows and their enabling circuits of information and untruth. To the extent that our current economic arrangements frustrate popular sovereignty in Britain, they must be changed. And so renovated republicanism here threatens the cause of financial oligarchy around the world.”

From the introduction to The Magic Kingdom, in case anyone has read today’s Independent article on money laundering in the London property market, or the recent pieces about HSBC’s private banking operations, or …

Amazingly, the book hasn’t received blanket coverage in the UK press, or indeed anywhere. Which leads me to suspect that I ought to concentrate on cultivating my own garden at this point.

The Spectre of Uselessness

In the London Review of Books John Lanchester takes a look at a couple of books on the robotisation of the economy. He concludes by saying that “it says a lot about the current moment that as we stand facing a future which might resemble either a hyper-capitalist dystopia or a socialist paradise, the second option doesn’t get a mention.”

But the second option does get a mention in other places. The Novara Media crew have made the phrase “Fully Automated Luxury Communism” a little bit famous, for example. So it isn’t that the second option doesn’t get a mention. It just doesn’t get a mention in the books that the London Review of Books chooses to review. If this sounds like sour grapes from a disappointed author, that’s because it is.

In The Magic Kingdom I wrote:

Material production needs far fewer of us than it once did. Our current rulers respond by turning the shared world into a casino. Images of personal liberation overlay the lived experience of debt and low pay for the majority and spectacular wealth for a ruthless or lucky few. The production of celebrity incarnates the lie that we too could have had a life worth living, if only we had tried a little harder, had believed in ourselves a little more fervently. By contrast, public status gives us the means to exchange what Richard Sennett has called ‘thespectre of uselessness’ for work in which we secure both personal emancipation and the common good. Such work is only
possible if we reconstitute the state on republican lines.”*

*I didn’t quite write that, because solecism. Whenever I manage write something interesting, I like to put a big fat thumbprint of an error somewhere in the middle of it.


As part of the BBC’s Democracy Day, BBC 4’s The World at One included an interview with Philip Coggan, billed as an Economist columnist and author of The Last Vote. (He’s also the author of Paper Promises, and The Money Machine: How the City Works, two books about finance that hold no terrors for the prevailing orthodoxy.)

Coggan began by saying that “democracies”, by which he meant countries that elect their governments, I think, were suffering by comparison with Singapore and China, which seem more efficient. He went on to suggest that there were “bottom up” and “top down” problems. The public have become disenchanted with politicians, because they haven’t had the prosperity they were promised. Meanwhile national politicians continue to pretend that they can tackle problems like terrorism, climate change and tax evasion that can only be address internationally. As a result, people are turning towards “extreme” parties.

The presenter Martha Kearney raised the question of the media’s role in driving popular “disillusion”:

Martha Kearney: Are there other factors at play here in terms of people’s disillusion with politics, I mean, what about the role of the media?

Philip Coggan: Yes, I think that the media does play a significant role. We’ve seen in the US, for example, people who watch the basic news on the main channels decline and people who watch the politicised news on Fox Nes, MSNBC and so on, go up. We’ve also seen the internet rise, people get a lot of their sources of news from the internet and they tend only to focus on those sources of news that confirm what they already believe. So we’ve had this big rise in conspiracy theories. It took twenty four hours before the first conspiracy theories about the Paris attack occurred. When people believe that thing, when they believe that their electors are frauds and that they are conspiring against them, that only makes them turn to people with very simple solutions on the far right and the far left and that’s very dangerous.

This exchange is odd from a number of angles. For one thing, most British people aren’t slumped in front of Fox or CNBC. The BBC is still by far the most important single player in the UK media system. That’s why more and more people have taken to demonstrating outside its offices, something that hasn’t featured prominently on #bbcdemocracyday.

When it comes to the fundamentals of economic and political organization the BBC works strenuously to keep us all in a state of innocence. Remember, this is the news organization that told us that quantitative easing “is like filling up a petrol tank with imaginary petrol”. It is similarly willing and able to keep itself out of discussions about how the established media have contributed to “public disillusion” (the choice of words is telling).

Instead of a conversation about the role that the BBC plays in the current political order, and how it might be reformed as part of a new constitutional settlement, we are treated to Mr Coggan’s thoughts about American cable news and conspiracy theories on the internet.

The whole performance smacks of a kind of paranoid complacency.

[Update: George Monbiot has written a piece for the Guardian about public service broadcasting. Like Mr Coggan he spends too much time talking about North America, but he is more clear-eyed about the problems in mainstream coverage, it seems to me.]

The Magic Kingdom – Foreword


Today the New Left Project and openDemocracy are publishing the foreword to The Magic Kingdom: Property, Monarchy and the Maximum Republic.

The book draws on recent scholarly work – especially that of Stuart White and Quentin Skinner – and explores what republican freedom in the modern era requires. It goes on to set out a neo-republican programme of constitutional reform for the United Kingdom of Great Britain and Northern Ireland.

The bailout of Britain’s banks triggered a crisis that has deepened through a series of ever more extraordinary scandals and revelations. If we are to put an end to this crisis we will have to take into account the institutional, technological and material changes of the last three hundred years and devise a constitution that safeguards true liberty under the law.

Liberal constitutionalism has run its course and now mutters to itself about voting systems and the House of Lords. It is time to register that the systems of communications and credit are matters of deep constitutional significance, and that a sovereign people must insist on its supremacy over those who control property.

Change in Britain is inevitable. The form it takes is up to us.

(During January the Kindle of The Magic Kingdom can be had for 99 pence. You can also order the paperback at your local independent store, which is of course preferable.)