Jeremy Corbyn and Michael Foot

Much has been made of the ‘unelectability’ of Jeremy Corbyn, on the grounds that the British people won’t vote for a party led by a self-described socialist.  Apart from a reliance on this apparently being self-evident to the speaker and their presumed audience, this is normally demonstrated by citing Labour’s disastrous result in the 1983 election under Michael Foot.  I’d like to examine three things about this: who is talking about this comparison and why; what actually happened in 1983; and what I feel the genuine likely outcomes are in the event of Corbyn taking the Labour leadership.

Firstly, I’d note that I don’t expect Labour to win the next general election regardless of the outcome of the contest to become leader.  This is not to say that it isn’t a possibility, whether with a small minority, or in a coalition of some kind, but none of the contenders seem to possess whatever spark is necessary to drag their party to greater heights (of course, this quality might become evident at a later date, but nothing says that such people must always be around.  Certainly the nearest we seem to have in the higher echelons of British politics at the moment is Nicola Sturgeon).  It is a truism that governments lose elections, so the matter may be in the hands of Cameron et al, but an effective Opposition should be attempting to force errors, as I shall later observe.

Who and why?

There are two chief groups attempting to talk down Corbyn’s chances as leader, one inside and one outside the party.  The first are generally more obviously entitled to be listened to on the matter, being as they presumably support one of the other candidates; it is only natural for them to talk down the merits of an opponent.  The worrying aspect is any notion of an ABC movement – Anyone But Corbyn.  The grounds being mentioned for this are that Corbyn will ‘tear the party apart’ by being too far to the left, but this is to entirely misplace the blame for such a possibility, as it is they themselves who are threatening to damage the party they pledge their allegiance to.  If Corbyn is duly elected, they should really be able to bite their tongues and get behind the new leader, at least until he has had a fair chance to show what he might achieve.  To do otherwise would be to reject the notion of a democratic party (albeit in the rarefied form that internal Labour elections practice).  Of course, once they have sufficient evidence that Corbyn isn’t going to lead them into government they may feel free to trigger another leadership contest in the prescribed fashion, should they choose.

The second group are broadly Tories, either members of the party, or those whose inclinations lie that way but whose primary allegiance is to their own financial and business interests.  That the first group should be given any credence regarding an internal Labour election is frankly ludicrous.  They clearly want the outcome mostly likely to lead to a Tory victory in the next general election, and will say whatever they think will produce that result.  But it is a trap to think that one can prognosticate on this basis, since some are talking Corbyn down, while the rest are trying (including via the Telegraph’s rather distasteful campaign to interfere in the matter) to push Labour towards a Corbyn victory, on the grounds that he will be the weakest opponent for Cameron or whoever succeeds him.  Quite simply, Labour voters should not be listening to their opposition.

More complicated is the matter of what business and the majority of the mainstream media are up to.  It is perfectly possible that they are working towards multiple goals: a Corbyn victory to – apparently – secure a future Tory government (with the associated low tax rates and regulation they prefer); a victory for any of the other candidates, but one who has been pushed towards adopting policies (particularly economic, again) that will favour their interests, should the Tories contrive to lose the next general election; or even a full schism in the Labour party, thereby apparently securing a Conservative government in perpetuity.  The single thing most likely to head off all of these is a unified Labour party, under whatever leader the members select, and this is where an examination of the party in and up to 1983.

1983 and Michael Foot

The received wisdom, which we should, as always, be extremely sceptical of, is that Michael Foot’s leadership was the cause of one of Labour’s lowest points when they were roundly beaten by Thatcher’s Conservative party.  And this has been attributed, particularly by those making the link to Corbyn, due to the fact that he was the most left-wing of recent Labour leaders.  Of course, whichever way one wants to read depends very much on personal interpretation, but I think it is pretty easy to show that this version of events is at least highly questionable.  Which is not to say that Foot’s position wasn’t a, even the single biggest, factor, but merely to show that things were considerably more complex (which should be enough to undermine the Foot-Corbyn link).

The simplest matter is the simple question of how, if Foot-style socialism is anathema to the British public, his party polled so strongly against Thatcher’s newly elected government?  Of course this also speaks of the weakness of the Tories at the time, before any of the Prime Minister’s signature policies had been accepted.  But it hardly characterises Foot as unelectable.  The fact is that a lot happened in the intermediate period between general elections, and I think that it is these events that provide us with a more plausible series of explanations than something inherent to Foot’s character.

On the government’s side, it managed to win a lot of public support.  Winning a war certainly helps, notwithstanding the way that Churchill managed to get himself booted out in the aftermath of WW2 (which incidentally demonstrates not only the possibility of a truly left-wing party winning the popular vote, but the virtue of having a clear plan – they won not only on the promise of the welfare state, but by convincing that they knew how to bring it into being).  And they also put themselves in a strong position by framing the conflict with organised labour, which had blighted the country through the 70s, as another war that could and must be won.  They were aided in this by the vast majority of the popular press (only the Daily Mirror publicly endorsed Labour) which, then as now, was controlled by a small number of people who were naturally disinclined to support the notion of unions and strike action.  This also forced Labour into making a choice between backing the ‘fifth column’ unions that comprised much of their traditional support, or taking a proto-Blair position that keeping business happy is the best way to secure social goods.

Lastly,  most importantly, and very much tied to the final point above, the Labour party split.  To expect Foot to win a victory when a good portion of the party he led had departed (and let’s not forget that Foot was the ‘compromise candidate’, so it is hard to say what the outcome might have been had one of the other contenders taken the party leadership).  Imagine if, in a post-Cameron Conservative party, their next leader is somebody happy to proclaim the necessity, if not desirability, of remaining in Europe, only to trigger an exodus by a good portion of the party (including several senior figures) to form a new alliance with UKIP.  While this is not exactly equivalent to the circumstances that led to the SDP-Liberal alliance, I hope it does give an idea of the nature of the split.  One could hardly be surprised at a poor Tory showing in the next general election.

In summary, Foot didn’t lose the election purely because he was too left-wing.  There were many factors, and while there were members who felt that that party was too far to the left, this concern pre-dated his leadership.  Given that the departures were of those on the right of the party, it is possible that a leader more to their tastes might have forestalled the split as it occurred, but it is not unreasonable to think that those on the left might have acted in a parallel fashion if they felt that the party had lost touch with its roots.  Certainly, no alternative candidate could have promised the certainty of entering government that would, just over a decade late, allow Blair to pacify the old guard as he launched New Labour.

Corbyn the candidate

The most striking thing about Jeremy Corbyn’s proposals, notwithstanding the picture painted by his opponents both within and without his party is just how moderate they are.  For a self-described socialist in an era where that has, following the USA, become a dirty word (although it has been pleasing to see Bernie Sanders reclaiming the term over there as something reasonable, even desirable), he really doesn’t seem to display a desire to overturn the existing order.  He is not talking about a massive expansion of welfare, but a mere return to the previous status quo before the Tories began their enthusiastic dismantling of systems.  This is not to say that he may not entertain longer-term ambitions in this, but he is clearly aware of what the public will accept for now.  Neither is he suggesting a massive overhaul of taxation.  He has been very careful to only talk of paying fair shares, and to tie talk of the very well-off paying ‘a little’ more to secure the wellbeing of children and the most deprived.  Rather, he has focussed on how much can be done by making the collection of existingly expected revenues more efficient.  And I realise that every potential government likes to talk about efficiency, but some of this is as simple as increasing the staffing and funds available to HMRC.  While I am sure that there is some level at which diminishing returns cut in, it seems both self-evident and under examination true to observe that monies spent here reap an almost automatic increase in tax revenues that can hardly be objected to as the money is already owed.  In fact, I would go so far as to suggest that cutting resources to HMRC to the extent that has occurred of late can only make sense if viewed in highly ideological terms, i.e. that taxation is inherently bad and inimical to a just and prosperous society.  Anyway, I think that few who take a more objective view will object to the plausibility of the suggestion on Corbyn’s part.

Without wanting to carry out a full analysis of Corbyn’s positions – which I may either save for another day, or leave to those more qualified than I – I think that few of them smack of the extreme left.  This is not to say that he might personally prefer a more socialist party, and indeed government.  But he is smart and pragmatic enough to realise that an offer to return to the recent period of the Blair administrations (if without the foreign adventures, and creep against civil liberties) is both appealing and plausible.  The Tories have only been able to remove and reduce tax credits, benefits, and the like on the grounds that it is necessary for a return to prosperity.  And in this they sow the seeds of their own fall, since their ideology requires them both to proclaim the success of their methods and declare their insufficiency.  They and their immediate supporters will only truly be happy with the complete dismantling of the welfare state.  And I think it is pretty clear that very few member of the British public at large want this.  Moreover, an ever increasing proportion are finding that, despite the proclamations of growth, they aren’t feeling any richer, and in many cases are still worse off than before the financial crisis began in 2008.

In short, I think that Corbyn is electable, although his challenge is to show this is the case in the teeth of concerted opposition and mudslinging by his opponents and the mainstream press.  Even if he loses the party leadership contest, the eventual victor needs to realise that taking on many of his positions is the only way that Labour stand to win a general election, barring a complete collapse from their opponents.  They need to emphasise that – as in the Blair years (and I don’t mean to look at them through rose-tinted glasses, because there were many major problems and the economic gains were largely cyclic, but they were marked – at least until Iraq really took off the sheen – by a general feeling of optimism, in contrast to the pessimism since 2008) it is perfectly possible to combine prosperity with a state that at least aims to provide for all of its citizens.  Against this is the fact that austerity has not done what was promised.  Most people do not feel more wealthy, more secure; London seems to have recovered, but even here much of the affluence is tied to the unsustainable rise of the property market.  The main mark of austerity has instead been the increasing rate of transfer of assets from the poor and middle classes to the very wealthy.  Corbyn has begun, and Labour need under whatever leader they choose, to offer an alternative.  Only by fighting, rather than being coopted into supporting, the notion that There Is No Alternative to continuing austerity, do they argue for their own electability, even existence.  And to ‘admit’ that the current situation is the result of Labour profligacy – it isn’t; it was due to buccaneering bankers and light-touch regulation – is only to hark back to the idea that you cannot trust Labour with the finances.  The way to fight the Conservative proclamation of doom – with the rider that only a harsh Tory government can save us – is not to go along with this narrative, but to announce and explain how things could be better under a Labour administration.  Without this, the question is going to be, as now: what exactly is the Labour party for?

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Some thoughts on Greece, debt, and morality

So, in the wake of the Greek referendum result, the haggling continues.  And let’s not ignore the fact that this referendum took place as a negotiation tool.  Whether or not it turns out to be useful probably depends on how public the Greeks can keep the negotiations (their opponents across the table don’t really care about the claimed ‘democratic mandate’, not least because they are, at least theoretically, backed by the support of the other 496 million EU citizens who didn’t get a vote).  In a public arena, it benefits them to be thought of as the underdogs; the Germans in particular have shown a sensitivity to coming across as bullies.

The ground may have shifted somewhat – how much remains to be seen – but this vote was never the make-or-break matter that either side pretended it was.  Of course they had to maintain that it was critical, not least because it’s pretty hard to get people to turn out to the polling stations if they’re being told that their ballots make little or no difference.  These things never end; the Greek government will continue to work to maintain as much control as possible of its domestic finances, and the Troika – on behalf of the creditors – will try and maximise the amount and security of the return on its ‘investment’.

Assuming, at least behind closed doors, that both parties understand that this is merely a business negotiation, it’s more interesting to me to look at how the rest of the world views it.  And it appears either that, egged on by much of the media, this is a matter of morality.  On the one hand, plenty of people take the view that, quite simply, one *must* pay one’s debts.  On the other, that forcing Greece into a continuing spiral of cuts and austerity, as a punitive measure and one that shows no sign of returning them to a secure footing from which they might be able to enjoy solvency, is both cruel and unethical.  I admittedly have more sympathy with the latter group, not least because the past few years of austerity in Greece have failed to produce the promised result.  It appears that neither side have an answer to the financial situation, so I’ll take the one that is less reliant on the general misery of the ordinary Greek people, thank you very much.  Anyway, with that given I’d like to look at the bases for insisting on the debt being repaid (aside from those with a direct interest in the matter, for whom the basis should go without saying).

Why repay debts?

Clearly, most people need to repay debts most of the time, otherwise no system of lending money could work.  Just as linguistic communication relies on the fact that the majority of us tell the truth to the best of our ability, any arrangement of financial communication that relied on constant monitoring and coercion would be practically unworkable.  However the conversational analogy works the other way too: any sensible person maintains some kind of measurement of reliability, and is in the habit of confirming important facts.  This may not be due to outright dishonesty; we are all prone to spreading gossip and information the veracity of which is unknown.  Likewise, we may overestimate our own solvency and ability to repay.

However, while acknowledging that a small number of defaults are unavoidable due to unforeseen circumstances, I think most people would still maintain that a debt should be repaid whenever possible.  And when I say ‘whenever’ this usually includes the possibility of extreme discomfort to the debtor (and his or her dependants).  It’s odd how strongly moral the talk around is: debts *must* be repaid or, it is implied, the whole system breaks down.  But just as we can cope with the possibility that some people may not be telling the truth – however unwittingly – we are actually perfectly capable of dealing with defaults.

Initially, I’d demonstrate that the system is perfectly capable of dealing with defaults by observing that pretty much every country has experienced one at some point.  Most several times.  Plenty of observers have gleefully pointed out that Germany, in particular, did several times in the last century.  And in the long term it doesn’t seem to have done them, or their creditor en masse (I’m not disputing that some people will have done very badly at the time) that much harm, as demonstrated by the fact that people and banks continue to lend to them.  More immediately, in the wake of its own banking crisis, Iceland was threatened with being cut off from the world banking system, and ultimately economic destruction, if it failed to make food for its own bad banks.  It refused, and bounced back.  The threats and predictions were fairly rapidly shown to be groundless, little more than hard negotiating tools.

Actually, I’m going to go further and argue that not only are some bad debts inevitable, but they are a necessary part of the system.  This is borne out by the existence of interest; why else is it charged.  Few people can be ignorant of the fact that the rate of interest charged reflects, in large part, the risk that the debt will not be repaid.  But I don’t think they’d be as quick to realise that this is the reason that one expects to receive more than one lent out in the first place.  Of course they might say, Greece or a country in its situation should expect to pay a high rate of interest because of the high risk, but this starts from the basis that creditors would already expect to receive a return on their money.  If one is certain of receiving X amount on their money, then a dubious prospect must offer, say 2X, or more (proportionate to the assesses risk).  Germany can borrow at 1%, where Venezuela must pay 20%, for example.  But even the 1% that Germany pays is based on an amount of risk, however small.  Nowhere is entirely safe.  The fact that *everybody* must pay interest reflects this.  We have grown so used to this that we ignore the fact that money doesn’t actually grow by itself.  It grows because somebody thinks that they can do something else with it while we don’t (or that they can do more with it than we can).  And this is why the possibility of default, and even the necessity of some degree of it, is essential to the financial system.  If nobody ever defaults, why should anybody expect to receive (or pay) interest on their money?

If I have a billion idle pounds and you need it, why shouldn’t I just give it to you?  I ask for 10% interest, but that’s predicated on the fact that I could get 9% elsewhere, with somebody who looks like a safer prospect.  Of course I could just sit on it, leave it under the mattress (assuming that robbery isn’t a concern), but that benefits nobody.  And I think that most people are relatively altruistic: if a friend – i.e. somebody who I don’t consider a risk at all – asks to borrow a tenner from me (which I have spare), I hand it over with no questions asked.  For anybody else I might ask for some kind of collateral or interest, but that is based on risk.  And we all benefit from a world in which the lending of money is not only possible, but common.  Not only might we find ourselves a bit short sometimes, but it allows for economic growth with all of the comforts and possibilities that that affords.

Given this lack of a purely financial justification for arguing against default, it’s unsurprising that we feel the need to fall back on a moral one.  Which isn’t a bad thing, because it’s certainly still true that default should remain relatively rare.  But when appropriate – i.e. when the costs of repaying the debts are too high in either financial or social terms – we shouldn’t feel too guilty about it.

Postscript 1

Of course any specific claims I’ve made about the permissibility of Greece (or any other country) defaulting again are tempered somewhat by the newness of the situation.  The Euro is a new thing, so there are additional potential complications.  But the uncertainty is mirrored – it might ultimately bring down the single currency, but then it might actually strengthen it by allowing all the members to know that there is no inevitability – since neither side knows the future.

Postscript 2

Those with an interest in the connection between morality and debt will no doubt be aware of the commonality, linguistic and otherwise, between religion and finance.  Plenty of people more erudite than I have written on the subject, so I’ll just observe here that the word ‘redemption’ being used in both is merely one of the more prominent exmaples.

On Taxation

We have a bad attitude to taxation in the UK.  I suspect the same is true in virtually every other country in the world (Rentier states have a whole bunch of their own issues).  It’s not just that we dislike paying tax ourselves, although that would be a good starting point, but it’s the way that – most of the time – we celebrate people getting one over on the Inland Revenue.  At the same time, when we do pay tax, we are ever conscious of how much we think we should receive in return.  This is not a good recipe for long-term stability – if nobody wants to pay for more than they *think* they receive in return, there’s no room for people in need to, even temporarily, rely on the state’s largesse.  At some other point I’d like to talk about the difference between how much people gain from the state compared with how much they think they do, and how this is the foundation of the abuse heaped on people who claim benefits, but not right now.

(of course this isn’t true of absolutely everybody.  I’ve recently noted my admiration for J K Rowling for her refusal to move herself or her assets overseas, since she maintains her admiration for the welfare state that supported her before she struck it lucky.  At the same time I observed, with no disrespect meant to her, that this shouldn’t really be the sort of thing that needs to be celebrated.  I’m also sure that there are a good number of regular salaried people who simply pay what they owe without grumbling)

This fits into our wider view of the state.  Unlike some countries, the state is never of us.  It is always other, and slightly hostile.  I say slightly hostile, because we’re nowhere near situation in the US, where the federal government is seen by a good number of people, egged on by state-level administrations, as being the enemy of the people.  But conversely we rarely seem to consider that the UK government might do anything simply for the good of the population at large.  This is probably helped by the impression, not unjustified, that most people get into government to satisfy their personal ambitions.  But the effect is that when we hand over a money as taxpayers, we think of it as gone, spent, even stolen.  We fail to consider that at least a portion of it will be spent to benefit us all, as citizens (I know we’re technically subjects, but I don’t see that as incompatible with citizenship, even if it is horribly anachronistic).

Of course this is bullshit.  For all of the bad decisions, inefficiencies, and vote-chasing policies, the state does a huge amount for all of us.  Of course much of this may be down to the civil service rather than elected members of parliament, but it stands.  Feel free to argue about any single area you disagree with, but it still stands.  Just don’t pretend that just because you don’t receive what you consider to be ‘benefits’ (and I know a considerable number of people won’t count Child Benefit, because ‘everybody’ gets that), you don’t get anything from the state.

Framing taxation

If we don’t like paying tax, and have had a long series (a long, long series) of governments who reward their friends, allies, and potential voters with breaks and rebates, it follows that tax itself, and especially an increase therein, is punitive.  Carrot for some people, stick for others.  This is not healthy.

This probably isn’t helped by the way some chancellors use rates, particularly on things like alcohol and tobacco, in an attempt to steer people away from ‘bad’ behaviour (and I realise that things are more complicated than that, but it is framed that way).  This means that those who wish to indulge must pay up in some kind of penitential gesture.

If we’re being punished regardless of merit, this automatically pushes us towards favouring those who flout the law.  In a police state, petty criminals are heroes, and those who escape ‘justice’ to be lauded.  People can feel no personal connection, or affection for a body they believe to be coercing them.

Anyway, I’m tired so I’m not going to fully develop things now.  Suffice it to say that I think that we need to rethink how we think about tax.  It needs to be a part of our civic duty, of how we participate in society.  But I’d like to be able to achieve that without going down the nationalistic road.  It’s not about being better than other countries, although a little healthy competition might help.  It’s about making our country better in itself.  Unfortunately, I don’t see this happening while we’ve got such an unimaginative bunch of wasters in charge.  Can you think of anything sufficiently inspiring that the coalition have achieved?  In little more that five years the Attlee government built the NHS and modern welfare state.  Even Blair oversaw the introduction of the minimum wage before he fucked it all up by dragging us along on his military adventures.  But Cameron and Clegg?  Sod all to show for five years except a shit-load of people reliant on food banks.  Ah, fuck it, I’m too annoyed to make a coherent point.

Postscript

Please note that I’m not arguing against criticising the administration of government, where and how it spends money, or the tax rate.  These are separate and narrower points.  But realise that if you think the state is wasteful, that needs to be fixed before you can demand that you pay less.

Anti-corporate activity

I have accounts with HSBC, and I’m not feeling too comfortable about it right now.  In the last week or so, there have been a couple of stories that don’t exact leave my bank looking squeaky clean.  To be fair, as far as the Daily Telegraph business goes, I’m far more concerned about the newspaper’s actions – I expect advertisers to try and get coverage that suits them, and journalists should be fighting against this.  But then that’s a point I shall pick up on.  I’m going to refer directly to this case, but most of my points with be general and highly theoretical, as I don’t know the specifics.  I’m a philosopher, not an economist or lawyer.

Of course this is all a bit ridiculous, as it’s hardly a secret that a corporation like HSBC has been involved in ethically questionable stuff for years.  It’d be nice to think that when a company we buy from, or use the services of, does something wrong, we could immediately decide to stop using them.  And to an extent, that is possible.  But it’s complicated by a whole bunch of factors.  For a start, not buying from a particular shop, say, is a lot easier than cutting off a long-term relationship.  And then there’s always the matter of finding somewhere else that isn’t up to the same stuff.  Which in many sectors is easier said than done.  Linking these is how much difficulty it’s going to be for me, balanced against the effect it will have on the companies in question.  I would like to see change, but want to avoid just cutting off my nose to spite my face.

What to do and when?

So, I guess the first point is deciding when it’s time to do something.  I guess this is one of the biggest hurdles, built of inertia and cynicism.  Disengagement with capitalism tout court is just not really viable, at least not without a like-minded community around you, but it feels odd to single out a single company without picking on, say, an arms manufacturer, or a chemical company that is directly poisoning the water supply.  But then that’s the point, I’m not saying I want to get out of HSBC because of one evil thing they’ve done; it’s the whole shebang, amoral at best.  To be fair, against that is the other side of the inertia coin: it’s not like they’ve been great to me.  If I’d made a fortune, it wouldn’t make their behaviour acceptable, but it would at least provide a personal, selfish reason to stay with them.

Anyway, so let’s take it that their crimes are significant enough to outweigh any good they’ve done me.  What then?  I could go into HSBC tomorrow (well maybe not tomorrow, as I’m in the wrong country, but soon) and ask to close my accounts, and I hope it happen pretty quickly.  But then what?  For all sorts of reasons, I can’t really see myself living without a bank at all, at least not for the foreseeable future.  So I need to find a suitable alternative.  A little while back, the obvious place to start would be something like the Cooperative, but they’ve been tainted too.  Still, I’m not sure if they’re beyond redemption, so I need to do some research.  Failing that, I need to do more research to find somebody else.

Obviously, when I say research, it’ll largely be looking at websites that discuss these things, and balancing them against my practicalities, including how much inconvenience I’m prepared to put up with.  The latter is something I came across when trying not to use Amazon any more.  It was fine when in the UK, but getting English language academic literature at short notice in the Netherlands is more difficult.  So I don’t think I’m going to be able to commit to that until I return home to London.  Unfortunately, lecturers aren’t that forgiving of failure to get the texts, however principled the reason is.  And I’m obviously not yet prepared to bugger up my studies.

On the plus side, boycotting Amazon is an established thing, so I’d be adding my action to that of others.  Of course there’s the fact that these others haven’t yet achieved their aims, but somebody has to be the one who pushes things over the limit.  And we know that these things can have an effect – you don’t kill the company off, but you can make them change their policies.  On my return to London, I am going to take a little time to look at where I shop, and commit to being a bit more selective.  It’s a small thing, but I hope a good one.  And, of course, there are various other forms of pressure one can get involved in putting on.

Low expectations

Another factor that feeds the inertia is that most companies are only doing what we expect of them.  We might think of small companies as being, or trying to be, ethical, but once they’re big enough to hire professional managers, that goes out of the window.  In fact, as I understand it, such managers and directors were legally compelled to behave as they do: they could be found negligent or fined if they failed to act in their company’s best interests (which sounds reasonable), in terms of maximising stock price.  While there are certainly issues around this – social responsibility – it can work in the long term.  But it all started to go horribly wrong as the view got ever shorter and shorter – directors running a company in a way that will kill it in 5 years, in order to maximise for the current financial year.  Even very pro-capital types have seen that this is untenable.

In the HSBC/Telegraph case, the accusation is two-fold: first, that HSBC is using its financial clout, through advertising in the paper, to affect the editorial position; and second that the Telegraph is accepting this, and modifying its behaviour in line with the client’s expectations.  Of course the Telegraph denies that this is the case, but how this pans out remains to be seen.  Anyway, there are broadly three ways we can view this apparent transaction: either as a straight up trade for a service, as something more informal akin to a gratuity, or as a bribe (the implication from the coverage being that it looks closest to the latter.

If HSBC is simply paying for favourable coverage, then the transaction would be legitimate, and our concerns, from a social point of view, directed at the system that allows this.  The more laissez-faire position might be simply to complain about the price and the openness – it’s not that either party is doing anything inherently wrong, it’s just that they’re getting a lot of benefit for not much outlay, and they’re doing it in an underhand fashion.  From this point of view, the system is damaged rather than irreparably broken.  Some form of regulation may be needed, but the issue is with this specific case (and possibly many others), rather than with the concept.

At the other extreme, there will be people who look at it as a straight-up bribe.  In this case, there is a clear need for legal action, which will no doubt be messy and expensive, but is entirely justified.  However, the Telegraph is not a public body, so this looks untenable.  We may not like it, but there’s no reason in principle why it should be treated this way.  Notwithstanding the legal details of the particular transaction, it’s hard to say, as things stand, that a private business shouldn’t be able to sell its credibility if it chooses to do so (and its shareholders support the move).

So it looks like we’re somewhere in the middle ground, where you might consider the advertising payments like some form of gratuity.  There’s no formal expectation of return for the money – other than the actual advertising space – but an unspoken, um, thing.  It seems entirely natural that a company should act slightly favourably towards its best customers, if it can be done without breaking the law.  I guess this is because ‘everybody does it’.  So why is this case unacceptable?  The easy solution would be to push it towards one of the prior positions: either to completely legitimise the transaction (thereby opening it to regulation), or to ban it completely.  But I don’t really see either happening.  It suits too many people to have something like this, in that grey area.

So, who’s done wrong?

I think most people will agree that, if this situation pans out in line with the accusations, that the Telegraph had certainly acted in an undesirable fashion, if not an illegal one.  Readers of that particular organ, as well as society at large, see the value of a free press.  Of course, like free speech and the free market, this is always going to have some limits, but freedom of the press is at least something to aspire to.  But this is the ‘easy’ part.  How to solve the problem is much less so, but at least having some parameter makes it viable in principle.

More complicated is the matter of the advertiser, and this is where the problem of low expectation kicks in.  We expect our newspapers to be free-ish, or at least open about their influences.  It’s ‘fine’ that each paper tends to have a party affiliation, as long as we know about it.  And of course we tend to choose our reading material on that basis.  Our expectations of another type of company, especially a financial one, are equally simple: that it do whatever it can – within the law – to maximise its profits.  As long as the wider capitalist system works, this seems fine, as a company’s takings and profits should be broadly derived from two factors: whether it provides the right service, demanded by *the public*, and how efficiently it does so.  This is how the private sector is supposed to work, and is the basic argument for its superiority over the public.  The problem is when we have two conflicting sets of expectations.  We expect a company to behave as specified, but we also expect it to behave with some degree of social responsibility.

And this gets us to how we act to get a result that we want.  The straight-forward way we should act, the way within the capital-based system, is that we withdraw our custom.  If enough of us do so, any well-managed company will modify its behaviour.  After all, the customer is always right.  And we know that this works to an extent.  McDonalds didn’t start sourcing their meat more rigorously, and selling salads, out of the kindness of their hearts.  But it is also extremely limited.

The alternative is a wholesale rearrangement of our social system.  I have no idea how to do this, but I reckon its got to be worth looking into.  We don’t have to accept the status quo just because it’s been like that a long time.  Let’s not make what is essentially the naturalistic fallacy writ large.

Postscript

I’m  not entirely sure I want to tear down capitalism in toto.  It’s a massively flawed system, and often does a huge amount of harm, but it also allows for much good, if properly regulated. A lot would argue that it’s not that capitalism is bad, just the particular form of it we seem to have evolved of late.  I’m not entirely convinced by this.

At the very least, some consideration of what to put in its place is needed.  A lot of people will shout for communism, but I can’t help recalling how that worked out last time. Which is not to say it should be ruled out, but at the very least the vanguard business needs to be sorted.  Leaders are too easily convinced of their own importance and necessity to not be corrupted.  If we are going to make anything else work, it needs to be built from the ground up.

But I think the biggest problem to overcome is a lack of *imagination*.  Capital has been the dominant system for a considerable amount of time, taking over from militaristic monarchies and aristocracies (I’m aware that it’s been a while since we expected our kings to lead troops into battle, but this was the foundational premise).  I think that at least part of the problem with communism as it panned out is that it found itself working within the same framework.  In the same way that monarchies rested initially upon might, then some kind of traditional claim (which may have been institutionalised as divine right, but was essentially: we should rule because that’s always been the way), communism is built on the same premise as capitalism: that power goes with control of capital and the means of production.  The only difference is that the state claims these, rather than private individuals.  No wonder the same problem remain.
So if we’re going to build a new sort of society, what do we start with?