Liverpool won yesterday. I don’t like soccer. I don’t watch it (unless Liverpool are playing), I don’t play the game, nor have I any interest in its tactics, development, or the circus that surrounds the professional game. But because Liverpool won yesterday, I feel better today. I have been a fan of Liverpool since I was eight or nine years old, when in order to belong in my class at school, I chose a team (there were two choices; the other was Manchester United. I hate Manchester United.). Even though I’m much older now, and deeply understand the naivety of choosing to support a foreign team playing a foreign game where grown men (often racist, always straight, and sometimes with a penchant for violence) kick a ball around a field, it reaches deep inside of me when they win, and when they lose. Sport is an extremely powerful social force, and in the past thirty years, bankers and politicians have learned how to control that force in an unprecedented way.
Paul Mason‘s imminent book ‘Postcapitalism’ is plugged this weekend in the Guardian with an extended essay on the subject. Accompanied by some excellent graphics, some of which I’ve reproduced here, the broad thesis is that capitalism as we know it is ending, and that we are moving into a ‘sharing economy’, but at its heart is a Marxist argument about information and power. Mason goes so far as to argue that the changes we are witnessing herald the arrival of a new kind of human being, a sort of cocktail of Marxist proletarianism, social Darwinism, and Kurzweilian posthumanism.
We mentioned in the last post a scenario where capital transcended human ownership, and became – through law – an entity in and of itself, lording it over mere humans. It sounds far-fetched, but is it? The discourse on inequality is about wealth accumulation of a small number of people, but it is essentially a discussion about the centralization of capital, where fewer and fewer people control that capital. Now, as the number of people controlling the capital decreases, the question arises: what happens if it gets down to two people, or one person, controlling the preponderance of capital? There are political answers to this, and social answers, but – for now – let’s consider the financial side.
In the West, Capital is generated primarily through the corporate-legal structures of western liberal democracy. In essence, companies produce goods and services, and accumulate assets and profits. They grow through acquisitions – other assets – and increase profitability. However, most companies are moving now towards virtualized infrastructures. What that means is that companies own less and less of their own assets, and become, essentially, capital generators, rather than capital owners. Let’s take a hypothetical example… Continue reading “Virtualized Capital: Kafka meets Piketty”
The coalition negotiations in Germany appear to have stalled on the question of whether Chancellor Merkel will authorize further European capital (read: German capital) for Irish banks. Further more, the SDP is trying to force Ireland to raise its corporation tax rate, an incentive that has diverted investments away from the rest of Europe in key areas such as the Internet and Biotechnology. This is not the first time that Germany has taken on the appearance of a reluctant bully in Europe, forcing itself on the weaker nations who are not deserving of its largesse. It is of course symptom, not cause, and the true reason for the current difficulties – perpetuated now for five years or so – is the structural failure of the European project to manage economic diversity.
There is some great wealth in Europe, concentrated in pockets such as the Ruhr valley, Northern Italy, Southern England, and other places. Big industries such as auto manufacturing and pharmaceuticals employ hundreds of thousands, while financial services help to facilitate the trade of those products all over the world. The wealth, however, is poorly distributed if we consider the wider context.
The Syrian Crisis continues to dominate international news this week, as poorly executed Washington diplomacy prolongs the affair, and Assad and Putin teach them a lesson in media management. The breathtaking hypocrisy in Putin’s defense of International Law (hopefully the New York Times doesn’t syndicate to Georgia) is matched only by Obama and Kerry in their grand pronouncements on human rights violations in the Middle East. If the weariness of the double standards in International Politics was insufficient to shake one’s faith in the State system, then perhaps we might take some time to think about the sustainability of institutions whose legitimacy is being persistently assaulted from within and without.
Six months ago, it appeared obvious that Bashar Al-Assad was on his way out of Syria. What was less clear, however, was who was likely to succeed him. And it is this particular point – the absence of a clear opposition – that has kept him in place. The various countries that have an interest are both local and global, and the rationale of each bears thinking about.
Let’s start with the neighbours. Immediately surrounding Syria are Turkey, Iraq, Jordan, Lebanon and Israel. Hizbollah – and therefore Lebanon – is supporting Assad, primarily one suspects because they think he will win. Syria has long been a friend of the Palestinians. Assad himself put it thus in 2002: “As far as an occupier is concerned, there is no distinction between soldiers and civilians… There is a distinction between armed and unarmed, but in Israel everyone is armed. In any case, we adopted the following concept: resistance to occupation is a legitimate right.”
Outgoing Chinese Prime Minister Wen Jiabao today added his voice (not for the first time) to those warning against rising inequality as a threat to China’s development. Imbalances in economic growth he warned were threatening the success of the economy. “We must make ensuring and improving people’s wellbeing the starting point and goal of all the government’s work, give entire priority to it and strive to strengthen social development,” he added. It is a common refrain, and one that goes to the root of modern statecraft.
Ireland has had a well documented, rather turbulent recent economic history. Following on from the bursting of the property bubble and the attendant banking collapse, an extraordinarily myopic political decision to nationalise the exposure of the banks led to a sovereign debt crisis, and, ultimately, a bailout from the troika of the IMF, ECB and European Commission. Apart from the loss of money, there was plenty dramatic wailing about the loss of National Sovereignty, and references to the War of Independence and the heroes of 1916 and ‘is this what they died for?’ rhetoric. There was even a nuance to the sovereignty question, in that the country had lost her economic sovereignty, whatever that meant.
Now, politics has always had an uneasy alliance with the propriety of language, bending it to its will as any situation may have seen fit. The distinction between economic sovereignty, and other sovereignty, one supposes, is that while we’re not necessarily allowed to award pay rises to civil servants, we are still permitted to invade England. At least we have that, I guess. Of course, the extent to which we are – truly – permitted to invade England is limited in exactly the same way as our freedom to spend money has been limited. It is not a flat prohibition on action through coercive or other power that has limited what Ireland as a State can do; it is the threat of exclusion from international systems upon which we have become irrevocably dependent that limits our action.
In considering the concept of state legitimacy, we need to understand why is it so important? I’ve mentioned before that there are two kinds of legitimacy as I see it, an internal legitimacy and an external legitimacy. External legitimacy is that conferred upon a sovereign state by the international community, affording it standing in the community of nations, making it entitled to trade and interact in international affairs. Internal legitimacy is that internal relationship between the state and its people, wherein the state is recognised as representative, or authoritative in matters such as justice, taxation and (to a greater or lesser degree) morality.
In order to understand why legitimacy is important, we should consider what happens when it disappears. We need to consider this in respect of both internal and external legitimacy. External legitimacy is perhaps easier to consider, as there are so many well documented examples, and because the legitimating forces are clear and easily measurable; when the international community describes a country as a failed state, it is primarily in relation to its external legitimacy. Sanctions are usually the first indicator. The International Community decides, in its wisdom, that due to some breach in the rules – formal or otherwise – a State, and in particular its régime, needs to alter its behaviour in order to be considered persona grata. The State becomes isolated, trade opportunities become limited, and economic progress is retarded. This happened in Iraq, Iran, Afghanistan, North Korea, Syria, Somalia – the list goes on.
The United Kingdom is under tremendous strain of late. It may not appear to be at first glance, but considering the following points.
First, there is the long struggle as retrenchment from Empire finally reaches its apotheosis, and the multicultural misfit that has wracked both The Netherlands and France. Legitimacy amounts to different things for each cultural grouping, whether that is the legitimacy of the police service (amidst allegations of institutional racism), or the problem with British Muslim representation.