Harrod’s massacre of the innocents

Herod the Great: Ancient Judaean tyrant and department store magnate

From today’s Guardian:

Harrods limits Christmas grotto to £2,000-plus spenders

I think it’s fair to say that there is nothing that makes Jews in the US and UK feel more alien than Christmas, and nothing weirder about Christmas for those not part of that culture than the Santa Claus/Father Christmas complex. As I’ve commented at length before, I have always been genuinely baffled by the custom of persuading children to believe — not just play believe, but genuinely believe — in a mythical figure that no adult believes in. Unlike belief in God, or trustworthy government, which can lead to awkward but also fruitful discussions, this one depends on the children never asking the question. Once they ask the question the jig is up, or the parents need to lie, or create elaborate deceptions that are the stuff of modern legends. This puts children from non-Christian religious traditions in an awkward position, because they have to keep this obvious truth from their fellows, or be accused of undermining the Christian family, which is a heavy burden to place on five-year-olds.

Which brings us to today’s headline.

Amid all this there is nothing odder — unless it’s the workshop literally in the middle of the ocean — than the nexus of Father Christmas to capitalism. On the one hand, there’s the whole racist sweatshop vibe (brilliantly parodied by S J Perelman in his Clifford Odets spoof Waiting for Santy) that’s supposed to paste a gift-economy covering over the cold cash transaction of holiday purchases. On the other hand, there’s the literal use of the Santa Claus figure for in-store sales promotion.

The Knightsbridge department store has been accused of “behaving like the Grinch who stole Christmas” by restricting access to its Father Christmas to customers who have spent at least £2,000 in the 170-year-old shop.

One customer complained that his family’s Christmas tradition “had been ruined by Harrods’ greed”, and that the store

has turned the charitable nature of Father Christmas into a money-making venture.

I think Harrods is playing with fire here. How long until Father Christmas finds out about the grasping nature of his partner and pulls out of this arrangement, which he obviously had entered into in the assumption that an upscale London department store could be counted on to put the interests of ordinary people first?

Really, if wealthy capitalists can’t be trusted anymore to eschew greed and promote the general welfare, who can we turn to? Any ideas? Karl? Friedrich?

Correspondence bias and communism

Reading Terry Eagleton’s Why Marx was Right I was struck by this relatively banal observation:

In its brief but bloody career, Marxism has involved a hideous amount of violence. Both Stalin and Mao Zedong were mass murderers on an almost unimaginable scale… But what of the crimes of capitalism? What of the atrocious bloodbath known as the First World War, in which the clash of imperial nations hungry for territory sent working-class soldiers to a futile death? The history of capitalism is among other things a story of global warfare, colonial exploitation, genocide and avoidable famines.

Superficially, this looks like dialectical what-about-ism. Whose mass murder was worse? But it occurred to me that there is something here that needs explanation: Given that communism and capitalism both have long charge sheets in the court of history, how can the association with atrocity and tyranny serve so broadly as a knock-down argument against communism?

It made me think of correspondence bias, the psychological tendency of people to interpret their own behaviour as situation-dependent — I didn’t do the reading for the seminar because I had a family crisis and I was exhausted — while someone else’s behaviour is seen as representing their essential nature — too lazy or inconsiderate to do the reading. This also works between groups, as when, for instance, a man’s failure to successfully lead a research team shows that he’s not cut out for that sort of responsibility (or not yet ready for it) while a woman’s failure shows that women aren’t suited to leadership.

So it is with economic systems: Stalin reveals the fundamental nature of communism, its core evil revealed by the Ukrainian famine and the Great Purge; but but Hitler and Pinochet are only incidentally capitalists, and the explanation of their crimes must be found outside the economic sphere. The Great Irish Famine has nothing to do with capitalist ideology, even while merchants were exporting food from starving Ireland to British markets, and American slavery and the Native American genocide are particular historical events that cannot tell us anything about the general implications of capitalism.

Increasingly, climate change makes capitalism look like a global suicide pact.

There is a similar bias at work in the judgement of religious communities: Many Christians attribute violence and brutality to Islam as an essential quality of the religion, proved by selective quotes from the Koran, while dismissing Christian-motivated atrocities to “not real Christians” or special circumstances of people long ago or far away. (We Jews are in an awkward position relative to this: On the one hand, our communal experience does not incline us to trust the good faith of Christians any more than of Muslims or druids or Satanists; on the other hand, Jews have become a particular target of Muslim rage, while many of us are well assimilated in majority-Christian nations. Some are happy to repay the recent good treatment by echoing the local prejudices.)

Hysterical costs

There’s an interesting article in the NY Times about a young legal scholar, Lina Khan, who is gaining attention for a novel and detailed argument that antitrust enforcement in the US has come to be inappropriately fixated on price as the sole anticompetitive harm, and so giving a free pass to Amazon. I have no original thoughts about the argument, but I am intrigued by the dismissive language of the critics cited in the article. One (antitrust lawyer Konstantin Medvedovsky) called her approach “hipster antitrust”. And then there’s this:

Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School, wrote that if companies like Amazon are targeted simply because their low prices hurt competitors, we might “quickly drive the economy back into the Stone Age, imposing hysterical costs on everyone.”

Is “hysterical costs” a real thing? Or was he just reaching for a word that would impugn the rationality of a female opponent, and came up with the classic wandering womb?

Divided illoyalties

A few years back I commented on the British government’s attempts to bully David Miranda — partner of Edward Snowden’s favourite journalist, Glenn Greenwald — during a stopover at Heathrow Airport, accusing him of transporting secrets that were damaging to UK interests. There is literally no sense in which a foreign national acting on foreign soil to dig out UK state secrets is violating UK laws, whether or not they collaborate with Britons and/or foreign governments. I felt similarly about the bizarre sotto voce threats of American authorities to charge Julian Assange with espionage.

First time tragedy, second time (or third time) farce. From the dwindling arsenal of Brexit rhetoric health secretary Jeremy Hunt has pulled out the rustiest blunderbuss yet:

Jeremy Hunt has called warnings from Airbus about the UK’s Brexit strategy “completely inappropriate”, saying the government should ignore “siren voices”.

In the most bullish comments from a cabinet minister since the intervention by the aerospace company’s chief executive, Hunt said businesses sounding the alarm about job losses risked undermining the government at a key moment in the negotiations.

“It was completely inappropriate for businesses to be making these kinds of threats, for one simple reason,” the health secretary told the BBC’s The Andrew Marr Show on Sunday. “We are in a critical moment in the Brexit discussions. We need to get behind Theresa May to deliver the best possible Brexit, a clean Brexit.”

Airbus, perhaps Mr Hunt needs to be reminded, is not a British company. They care about a “good” Brexit deal for their own narrow interests, but have no obligation not to “undermine” the chieftain of the strange folk among whom they are temporarily working. They are issuing a warning — a threat if you will — not an expression of patriotic support. Their obligations to the British nation begin and end with maximising long-term shareholder value. According to the ideology that his party has been promoting for the past 40 years, that would be the case even if it were a centuries-old British company. Fiat lucrum, pereat mundus.

To put it differently, if the plan to leave the EU depended for its success on the loyal support of businesses based in the UK, then it wasn’t a very smart plan. (I’m pretending, for rhetorical purposes, that I believe there was a plan.) To paraphrase an earlier Tory PM, a politician complaining about the disloyalty of business is like a sailor complaining about the sea.

My “industry” — education — is immovably British, and isn’t going to move away, even as its status will diminish post-Brexit. Many other leading British companies — concentrated, as far as I can tell, in gambling, manufacture of liquor, and money laundering — will do splendidly.

Less than zero: A new reckoning

One of the most important lessons I ever learned about capitalism and the nature of wealth I learned from Donald Trump. And now I discover that I was entirely misled, at least as regards Trump’s particular role.

As I discussed in a post a couple of years ago, back in the 1990s I read a newspaper article about Donald Trump’s most recent bankruptcy, and was struck by the fact that, despite having vastly more liabilities than possessions, Trump was still treated as a wealthy man, and not worse than a pauper. And his creditors were willing to come to an arrangement that allowed him to live a rich-man lifestyle, if somewhat less opulent than before. I understood that to mean that modern capitalism makes debt almost as valuable as property, that the person with a billion in debt and the person with a billion in property are considered to be much more similar to each other than either is to the one who has neither debts nor wealth.

Now, having read several books on Trump, including most recently Seth Hettena’s Trump/Russia: A Definitive History, I see that this beautifully esoteric interpretation must yield — at least in the case of Trump — to a simpler and crasser interpretation: At various stages of his career Trump has been propped up by criminals who found the Trump Organisation, and its self-absorbed empty-headed chief, too useful as a cover for moneylending — first for the New York mob, then on a larger scale for Russian oligarchs and criminals from the former Soviet Union — to let it fail. In some sense, this is the value of debt: When there are large numbers in play, it’s easy to hide smaller numbers, just as long as you can come to an agreement to keep the flow going. And it does take a special kind of person to have managed to accumulate that amount of debt in the first place, making Trump’s debt truly a rare and valuable commodity.

I’m perfectly willing to accept a certain claim of innocence, that Trump believed all along that the fact that he kept managing to steer around failure demonstrated nothing but his unique genius. It reminds me of Hitler’s famous comment “Ich gehe mit traumwandlerischer Sicherheit den Weg, den mich die Vorsehung gehen heißt”: I follow, with the certainty of a sleepwalker, the path that Providence has laid out for me.

That narcissistic naïveté probably was, and remains, his most useful quality. First time tragedy, second farce.

Why people hate statisticians

Andrew Dilnot, former head of the UK Statistics Authority and current warden (no really!) of Nuffield College, gave a talk here last week, at our annual event honouring Florence Nightingale qua statistician. The ostensible title was “Numbers and Public policy: Why statistics really matter”, but the title should have been “Why people hate statisticians”. This was one of the most extreme versions I’ve ever seen of a speaker shopping trite (mostly right-wing) political talking points by dressing them up in statistics to make the dubious assertions seem irrefutable, and to make the trivially obvious look ingenious.

I don’t have the slides from the talk, but video of a similar talk is available here. He spent quite a bit of his talk trying to debunk the Occupy Movement’s slogan that inequality has been increasing. The 90:10 ratio bounced along near 3 for a while, then rose to 4 during the 1980s (the Thatcher years… who knew?!), and hasn’t moved much since. Case closed. Oh, but wait, what about other measures of inequality, you may ask. And since you might ask, he had to set up some straw men to knock down. He showed the same pattern for five other measures of inequality. Case really closed.

Except that these five were all measuring the same thing, more or less. The argument people like Piketty have been making is not that the 90th percentile has been doing so much better than the 10th percentile, but that increases in wealth have been concentrated in ever smaller fractions of the population. None of the measures he looked was designed capture that process. The Gini coefficient, which looks like it measures the whole distribution, because it is a population average is actually extremely insensitive to extreme concentration at the high end. Suppose the top 1% has 20% of the income. Changes of distribution within the top 1% cannot shift the Gini coefficient by more than about 3% of its current value. He also showed the 95:5 ratio, and low-and-behold, that kept rising through the 90s, then stopped. All consistent with the main critique of rising income inequality.

Since he’s obviously not stupid, and obviously understands economics much better than I do, it’s hard to avoid thinking that this was all smoke and mirrors, intended to lull people to sleep about rising inequality, under the cover of technocratic expertise. It’s a well-known trick: Ignore the strongest criticism of your point of view, and give lots of details about weak arguments. Mathematical details are best. “Just do the math” is a nice slogan. Sometimes simple (or complex) calculations can really shed light on a problem that looks to be inextricably bound up with political interests and ideologies. But sometimes not. And sometimes you just have to accept that a political economic argument needs to be melded with statistical reasoning, and you have to be open about the entirety of the argument. Continue reading “Why people hate statisticians”

The true face of capitalism

Modern capitalism started with the railways. And today:

A mother has launched an appeal to try to find a generous stranger who bought her stranded daughter an £85 train ticket home.

India Ballancore, 16, missed her return train to Bristol from Stockport, Greater Manchester, on Sunday.

Her mother Andrea said the stranger stepped in and paid for a new fare after India was told her ticket was not valid for the next service.

Of course, the only reason why she needed this kindness from a generous stranger is that Cross Country Rail employees couldn’t resist the opportunity to profiteer off a vulnerable girl who had already paid for a ticket, but had missed her train.

The sound of one invisible hand clapping

There is a Rand-ian trope (or Mises-macherei) that attempts to reverse the Marxian notion that labour is the unit of economic contribution, that working people are the creators of our world, and capitalists mere parasites. The opposing view — pushed by Ayn Rand, and advocated in increasingly stark terms by right-wing politicians, is that the capitalists and managers are “job-creators”, that everything exists because of their contributions. From Adam Smith’s idea that capitalism enables the private greed to be channeled into promoting the public good, we have come to the notion that private greed is itself almost a form of charity.

The reductio ad absurdum has been provided (of course) by Donald Trump, in the less commented upon portion of his bizarre attack on the family of killed-in-action Muslim American soldier Humayun Khan. Responding to Khizr Khan’s attack “You have sacrificed nothing — and no one,” Trump said

I think I’ve made a lot of sacrifices. I work very, very hard. I’ve created thousands and thousands of jobs, tens of thousands of jobs, built great structures. I’ve had tremendous success. I think I’ve done a lot.

For Trump, a rich man’s “tremendous success” is itself a sacrifice, to be matched against an ordinary man losing his child.

Brecht’s take on this question is below. I cited it in the last US presidential election as well.

Continue reading “The sound of one invisible hand clapping”

None dare call it “evasion”

Just another example of how the business elites have normalised their criminal activities:

So when politicians, journalists and the public ask rude questions about how Google can pay its chief executive more in one year than it hands over to the British tax authorities, the company should have a simple answer. You make the rules, we obey them – if you don’t like it make some new rules, otherwise go away and leave us alone.

The article suggests that Google is suffering from a sick compulsion to hold itself to a higher standard than is just obeying the rules.

Except, they don’t actually obey the rules. What they do (as I’ve discussed at greater length) is to create structures to exploit the ambiguity in such legal terms as “residence” and “business activity” and “profits”, ambiguity that is in the rules because the lobbyists would otherwise squeal about unreasonable constraints and irrational behaviour being forced upon them by more specific regulations. The law doesn’t actually permit you to pretend your business is actually transpiring at the shell address in the Cayman Islands, but it’s sufficiently hard to prove otherwise, and the elite civil servants are sufficiently unmotivated.

In fact, despite the billions of dollars they spend on tax lawyers in lieu of taxes, they’re not even particularly conscientious about keeping their plausible deniability plausible. Former London Google employee Barney Jones gave evidence to HMRC:

He had watched Matt Brittin, his former boss at Google, give evidence to MPs on the Public Accounts Committee with interest but also mounting disquiet. Mr Brittin emphasised to the PAC one reason Google paid so little tax in the UK was that it did so little business here. The bulk of its work was generated through its Dublin headquarters – where corporation tax was lower than in London.

Mr Jones, a father of four and a devout Christian, knew that wasn’t true. He had worked in the London office from 2002 to 2006 and had his own view of the large turnover of work that was really going on in the UK. He took the facts to PAC chair Margaret Hodge and then on to Her Majesty’s Revenue & Customs (HMRC), which took his evidence but wasn’t exactly overjoyed by it.

“They seemed quite defensive and seemed to be more interested in justifying their position.”

For that matter, it’s not even entirely true that they don’t make the laws. Unless you think the US Treasury just decided in a purely independent and disinterested way that the European Commission doesn’t really understand its own tax rules.