The collapse of Rover – Triumph of capitalism

Alex has a link to the long awaited report on the collapse of Rover and also links to a contemporary post of his predicting the main findings of the report:

Since then, though, we’ve seen one of the most horrible examples of shameless self-enrichment at others’ expense in British history. The restructuring of the Rover complex was conceived to get all the profitable bits of the firm out of the MG-Rover Group, the car factory, and into the hands of the Phoenix chaps. This may not seem that bad, until you remember that a sizeable chunk of the original capital was put up by Rover workers themselves. They got shares in MG Rover Group, not Phoenix: so they have now lost everything. Another point: the famous £427 million interest-free loan from BMW was paid to Phoenix (well, actually to another shell company, Techtronic, but this can be collapsed for clarity), not MG. They then charged MG Rover interest on it. What this means has only just dawned on me-as shareholders, the Phoenix group have only the same minimal claim on the assets as the workers who bought in. But as creditors, they are at the top of the heap behind only the Inland Revenue.

Expect a very big supermarket on the site.

Which to me sounds like a textbook example of what Naomi Klein called disaster capitalism in her book The Shock Doctrine (or more precise, capitalism). A natural or artificially induced crisis is “solved” by throwing money at private parties because government is unable, forbidden or ideologically incapable of solving the problem itself. And because it’s an emergency, the money needs to be spend now with any oversight forgotten and neglected. But the first goal of any profit driving company is making a profit and hence even “good faith” companies will strive to do the least amount of work for the largest amount of money, will be tempting into rent seeking behaviour. Which is what the Phoenix group did; getting that interest free loan themselves and then charging Rover interest on it, taking away much of the benefit Rover could’ve had from that loan. Instead of adding value, they took away value because their first loyalty was to their own interests, not Rover’s.

And this is an essential feature of capitalism, not a bug. Capitalism is profit driven and any goal which is supposed to be achieved by making use of this will be secondary to this. What Phoenix did to Rover is not a crime, not a regretable exception, but the rule, even in day to day transactions between companies. Which is why it’s nonsense to talk about the greater efficiency of the private sector as opposed to the public sector, unless you judge it in the context of making profits.

Which is also why so many big public sector IT projects fail of course. The NHS or the Home Office might want to get their working IT systems, but for the companies who have gotten the contract the goal is to keep the project alive as long as possible and “goldplate” it…

Dudefight! (Or, what do the Bengalis matter)

So Andy “Socialist Unity” Newham and Louis “Unrepentant Marxist” Proyect have gotten in an online cat fight, after Louis objected to what he saw as Andy’s glorification of Winston Churchill. In Louis’ view, and I’m inclined to partially agree with him, Andy praised Churchill too much, gave him too much credit in what circumstances forced him to do and neglected to mention the dark side of how he led the war, as for example with the starvation in India:

When I brought up the topic of 6 to 8 million Bengalis dying because of British wartime policies that caused a famine, I was treated like a skunk at a garden party by Newman and his supporters, including Paul Fauvet, a signer of the Euston Manifesto who wrote: “Louis Proyect’s tactic is to change the subject. He doesn’t want to talk about Churchill’s role in World War II, so he talks about the Bengal famine instead.” Meanwhile, Newman also chastised me for “prioritising the entirely secondary issue of India…”

To which Andy responded angrily. I’m not so much interested in the wider disagreement between the two and whether or not Andy was slandered by Louis or is too defensive, but in the argument Andy makes in the comments about the Bengali famine:

The bengal famine actually killed roughly two million people. There is no mileage to be gained by exagerating.

In Eastern Europe tens of millions of people died due to the war, including widespread famine.

To select one incident of famine being used as a deliberate wespon of murder, remember that in 1944 the Nazis deliberatly blocked all foodstuffs being transported to Western Holland as a form of collective punishment for a rail strike, and this left some 18000 dead.

The Bengal famine was not deliberate, but the result of callous incompetence, and an inaccurate model of economic understanding. Small consolation to the dead, but an important moral and political difference. My own maternal grandmother died of malnutrition in England in 1936, due to similar faulty economic theories. She was 26 years old. That dodn’t mean that the British tory government was as bad as Hitler, although I am sure it seemed like it to my granddad, my mum and her siblings.

Nor is it as straight forward as you make out in your simplistic statement that the rice went to British soldiers.

There was the loss of Burma to Japan, which had been a major rice exporter to Bengal, and then a major cyclone, and an outbreak of a disease in the rice plants. The crop was down, and there were less imports.

The British and Indian armies did buy a lot of rice, but the main cause of the famine seems to have been an unregulated market, so that the percieved drop of rice availability led to hoarding, price rises, putting rice out of reach of the poorest. the hoarding was mainly carried out by more prosperous bengalis.

There was undoubtedly racism and incompetence in the government that led to a slow administrative response; but the famine was arguably more due to faulty economic theory, which made the government slow to intervene to lower prices.

In the post itself Andy had justified his own omittance of the famine by saying that well respected histories of the Second World War, including Angus Calder’s, The People’s War often omit it as well, which doesn’t strike me as a particularly strong argument. That at the time people in England rarely cared or thought much about India is understandable, but more than sixty years onward and in the context of the war as a “People’s War”, things like the Bengali famine need to be mentioned and evaluated, as it shows how some peoples mattered more than others.

Moving on to the meat of Andy’s argument about the famine itself, what struck me was that, while he agrees with Louis on the reality of it (though not its importance, as mentioned), he (unconsciously) seems to want to lessen the crime of it, by coming up with all sorts of reasons as to why it wasn’t a crime as much as an accident. He compares it to deliberate acts of nazi terrorism (though the famine in Holland was due more to the liberation of most of its agrarian parts before the densely population of western Holland than to deliberate starvation), worse tragedies in Eastern Europe and finally argues it was caused by “callous incompetence” and “faulty economic theories” rather than design. These phrases may sound harsh, but their main effect is still to remove responsibility for the famine from those who administered Bengal and those who profited from the panic.

This idea that atrocities like the Bengali famine taking place under (imperialistic) capitalism are unintended side effects for which nobody can be held responsible is a widely used excuse for the crimes of capitalism, which are not tolerated when used to diminish responsibility for similar atrocities taking place under Stalinism, say. The famine in Bengal is like the famines in the Ukraine in the thirties, a foreseeable consequence of deliberate policies introduced without the consent of the people they affected; at best both these atrocities were treated as acceptable costs, at worst these were the intended outcomes of these policies. Let’s not forget that part of English colonial rule in India was the deliberate destruction of the old local, village based support networks that used to prevent or alliviate famine earlier and its replacement by a nation wide free market. It was in this context that the deliberate decision was made by the government to divert part of the harvest to English soldiers, to not interfere in the free market and let speculation continue that priced what was available out of reach of much of the population. The famine was not a tragic accident, but the unavoidable outcome of these decisions and hence as much a crime as if these people had been gunned down instead.

Capitalism as a system has avoided much of the guilt for its crimes because we are trained to only look at the goals the bosses in business and government want to achieve and to see the negative consequences of achieving those goals either as a natural part of the system or at worst as regrettable accidents. What we need to realise instead is that these consequences cannot be decoupled. If a water company is privatised and then raises its prices beyond the reach of the poorest third of the population, this means that deaths due to cholera caused by drinking unsafe water are as much a goal of the company as the increased profits, as the latter is not realisable without the former. Socialists should know this and not make excuses.

the freedom to swim in a river without the act being marketed as wild swimming

M. John Harrison gets annoyed about what he calls the new enclosures — the way perfectly ordinary activities have been commodified by business and government into something you need to pay for or ask permission for.

My point is simply that everyone must have the freedom to swim in a river without the act being marketed to them as “wild swimming”. The label is a danger because it’s the first step towards commodification.

The councils, lobbies, sports-regulatory bodies and swimming-hat manufacturers can’t take “wild swimming” indoors to control it as a commodity & meter it out to the participants in paid-for units (although that was ably done to rock climbing, which thought of itself as a “wild”, fully exterior activity, across the 1990s); but they can construct the kind of linguistic & cultural enclosure around it that will allow them to take profit in other ways.

In this sense, & in lots of others, the UK outdoors has been moved relentlessly indoors over the last two and half decades.

I don’t see how this observation has anything to do with elitism. What I am trying to disentangle–from political, commercial & media constraints–is the individual human freedom to decide to go swimming, or walking, or riding a bike without that action being a privilege granted by someone else and/or a source of profit for someone else.

The difference is between the activity as an action & the activity as a captive resource which is then offered back under the terms of whatever group has captured it.

Amsterdam taxis: free market fail

For personal reasons which I won’t bore y’all with, we’ve been forced to make a lot of use of the incomparable Amsterdam taxi system lately. It’s not been a good experience, the one or two excellent drivers notwithstanding. Our experiences are not unique; Amsterdam taxis are some of the worst in Europe, as I’m sure Frumious Bandersnatch will agree with:

However, I’ve heard that it has gotten better at Central Station. I heard that they have supervision. And I actually didn’t have a choice. So I walked to the head of the line.

First thing that I noticed. No supervision. No idea if he/she was getting coffee or just gone for the day. Uh-oh.

I went to the first driver in the row. He informed me that this would be 15 euros. I said that I wanted to go with the meter. He said that he only worked with a zone system, so it was 15 euros everything between 1-5 kilometers. (I know from experience that a taxi ride to where I needed to go was generally maximum 12 euros) I told him that I knew this wasn’t true and I had the right to go with the meter. He told me to “go find a TCA driver since they charge less.” He insisted that they were allowed to charge more for central station. (For non-Dutch people, TCA was the former big bad monopoly that got broken up in Amsterdam to protect the consumer. Ha.)

I looked around again to see if I could find their minder, but there was nobody visible. I went to the second taxi in the row. That person also refused to drive with the meter to Oost, and told me that I had to go with the first taxi. “Nobody here will use the meter,” he told me snottily.

The third taxi was from TCA. He told me that I had to go to the first taxi. He got abusive when I said that the first driver refused to go with the meter. He said “I won’t drive with the meter either.” By this point, one of the other drivers in the line had shouted at me to “fuck off”.

Another TCA taxi driver (farther back in the line) said that he didn’t dare to do otherwise besides do what the rest in the line did.

It doesn’t get any better from there. Such experiences are all too common, especially around the tourist heavy areas of the city centre like Central Station or Museumplein. The irony is, for most tourist destinations there are plenty of cheap, easy to use and fast public transport options to use instead. but if you don’t know that as a tourist, your natural instinct is to use a taxi and nine times out of ten they’ll take you for a ride. Central Station to Dam Square, with its quota of fancy hotels, is only a ten minute walk or a five minute tram ride; take a cab and they’ll either tell you to fuck off for wasting their time with such a short ride (that’s the honest ones) or they’ll show you the entire city and deliver you there an hour later.

The problem is that Amsterdam went from a monopoly situation in which there was only one taxi company, TCA, which only had to provide Soviet levels of service, to one in which everybody with a dodgy twenty year old Mercedes Benz could call himself a taxi driver. Too many taxi drivers chasing too few customers with no time for short rides, no time to be concerned with anything but getting the next fare in. Neither situation was ideal, to say the least.

The Amsterdam taxi market needs reform badly, but any solution that leaves either a load of freelancers or some sort of monopoly or duopoly in place isn’t going to work. In both cases there is the problem that the people driving the taxis are entirely dependent on their taxi to make a living and the pressure to chase golden rides remains. What Amsterdam needs I feel is to make the taxis into some sort of semi-public transport, with the drivers on a proper wage and the customers knowing what they get into when they step into the cab.

How capitalism aids swine flu

Mike Davis has an article in the Socialist Worker (US) about the swine flu, specifically how several profit driven business practises aid and abet the creation of virulent forms of swine flu and retard the fight against the threatened pandemic:

But the mythology of bold, preemptive (and cheap) intervention against avian flu has been invaluable to the cause of rich countries, like the U.S. and Britain, which prefer to invest in their own biological Maginot Lines, rather than dramatically increase aid to epidemic frontlines overseas–as well as to Big Pharma, which has battled Third World demands for the generic, public manufacture of critical antivirals like Roche’s Tamiflu.

[…]

Perhaps it is not surprising that Mexico lacks both capacity and political will to monitor livestock diseases and their public health impacts, but the situation is hardly better north of the border, where surveillance is a failed patchwork of state jurisdictions, and corporate livestock producers treat health regulations with the same contempt with which they deal with workers and animals.

Similarly, a decade of urgent warnings by scientists in the field has failed to ensure the transfer of sophisticated viral assay technology to the countries in the direct path of likely pandemics. Mexico has world-famous disease experts, but it had to send swabs to a laboratory in Winnipeg (which has less than 3 percent of the population of Mexico City) in order to identify the strain’s genome. Almost a week was lost as a consequence.

[…]

This has been a transition, in essence, from old-fashioned pig pens to vast excremental hells, unprecedented in nature, containing tens, even hundreds of thousands of animals with weakened immune systems, suffocating in heat and manure, while exchanging pathogens at blinding velocity with their fellow inmates and pathetic progenies.

[…]

Last year, a distinguished commission convened by the Pew Research Center issued a landmark report on “industrial farm animal production” underscoring the acute danger that “the continual cycling of viruses…in large herds or flocks [will] increase opportunities for the generation of novel virus through mutation or recombinant events that could result in more efficient human-to-human transmission.”

The commission also warned that promiscuous antibiotic use in hog factories (a cheaper alternative to sewer systems or humane environments) was causing the rise of resistant Staph infections, while sewage spills were producing nightmare E. coli outbreaks and Pfisteria blooms (the doomsday protozoan that has killed more than 1 billion fish in the Carolina estuaries and sickened dozens of fishermen).