The original stories:
“No Surrender”
The corporation will become smaller, but no less potent
The Economist
6 March 2010

“The BBC’s retreat may yet turn into a rout”
Losing a few digital stations and web pages will not be enough to keep the licence fee off the political agenda
David Elstein
The Times
4 March 2010

Summary of the stories:
The Economist made the usual noises about the BBC being a remarkable broadcaster and admired by Britons who broadly accept the licence fee they have to pay a little nonsensically since it’s supposed to be premised on buying the right to watch TV, though many watch relatively little of the corporation’s output. The magazine pointed out that the BBC is a bigger success with older people and the middle classes than with the young and less well-off. In response, the BBC has over the years expanded into hep digital radio and TV stations, and into the web. It noted that the BBC’s new strategy seems to be to head-off criticism that it crowds into markets where it threatens burgeoning commercial competitors. Its says  future it will concentrate on its core, home-made, high quality material. 

David Elstein’s piece covered much the same ground as The Economist but with the significant difference that Mr Elstein thinks that the BBC’s strategy may “backfire”:

“Paradoxically, a more efficient BBC spending more on content may strike its competitors as even more of a threat than its current incarnation.”

livingissues comment:
For a free market and socially libertarian magazine, The Economist is surprisingly friendly toward the state’s involvement in the funding and behaviour of the BBC. David Elstein has a record of being much more sceptical (not least in a ground-breaking review he chaired for the Conservative Party). He was writing for The Times which is regarded as being anti-BBC not least because it is owned by Ruper Murdoch, whose Sky is one of the BBC’s most important competitors.

It’s useful to remember that the BBC needs both to be high quality and even elite in its material whilst also offering a wide range of mass market material. It needs to appeal to everyone or its political support will disappear. In current circusmtances, as Mr Edelstein catches better than the Economist, it can’t please anyone very easily. When competes better in the elite market, it makes it even harder for commercial stations to offer work in this non-commercial arena, and when it sticks to its populist guns, it is robbing the commercial sector of viewers which are all the more badly needed in a recession (which has seen advertising revenues fall).

In short, in bad times, the BBC looks even more like a spoiled and protected monolith than it does in good times. Of course, the BBC retains a large amount of political support, partly because the public  likes and more or less trusts it, and partly because it’s quite cheap, and partly because voters hang on nanny for fear of something worse. 

All the same, the funding system is unfair (it penalises the poor). Besides, bit by bit, a more radical argument gains traction: the state should stop controlling the broadcasters (there are more legal controls on broadcasting than any other media) as though they had a unique power to corrupt or defile us. This is especially true the more satellite and cable platforms give viewers access to a huge range of material from around the world. The more time one spends not “consuming” BBC shows, the less one is inclined to continue to pay for them.

[The editor of this site in 2007 wrote "Scrap the BBC!": Ten years to set broadcasters free]

The original story:
“Has capitalist ideology failed us?”
BBC Radio 4 Today Programme (listen again)
23 November 2009, 08.55hrs

Summary of the story:
The Today programme set up their “listen-again” with this blurb:

In his new book How Markets Fail, John Cassidy claims that the economic calamity of 2008 did not shatter principles of capitalism as there is not a static set of capitalist principles to destroy. John Cassidy and Executive vice chair of the Work Foundation, Will Hutton, debate who got it most wrong in the Credit Crunch.

John Cassidy argues that we are at a turning point after 30-odd years of Thatcherite Reaganism which discredits “ultra versions” of the free market especially as applied to financial markets. Will Hutton said that it had been a “giant intellectual mistake” to think that while markets work some of the time, they could work all the time.  Alan Greenspan, both contributors thought, was at the centre of all this, based on an ideological view of how markets work. The result is a “vast problem for Britain”. JC said we would “row back” from the extremes of the market view. WH said that there’s a lot of new economic thinking springing up without a clear left right view and a new interest in behavioural economics. JC finished with the remark that Adam Smith’s view that “we can all leave it to the market has been discredited.”

livingissues comment:
It is certainly true that a good deal of commentary suggests that we are re-evaluating free markets. We are revisiting the idea that markets are in equilibrium, that economic players are both rational and selfish, that deregulation is good. It is also often said that John Maynard Keynes has been returned to favour and Milton Friedman and Friedrich Hayek are out of it and that fiscal intervention not monetarism are the order of the day.

However, it is only fair to say that “old” economics has been discussing all these themes for a very long time and there is no particular hope that some new style of the discipline will spring up and solve ancient problems. For instance, whilst “behavioural” economics does indeed discuss economic players who have consciences and moods, old economics itself spent a good deal of time discussing, for instance, the mood swings which afflict markets. I’m thinking of Keynes’s “animal spirits” and the reviled Greenspan’s “irrational exuberance”, just to cite two sources thought to be at opposite ends of the spectrum.

It is true that market theory discusses the idea of a crowd of perfectly-informed players producing a market-clearing price in a way which can’t be bettered. But even market enthusiasts accept that all players are not likely to be equally well-informed, and that markets are not all-wise (for a start there are “market failures” to do with “externalities” such as environmental issues (which the market doesn’t price properly).

Even though its own fans acknowledge that the free market is richer, weirder and less perfect than theory suggests, in the current crisis they stress that financial breakdowns  like the present really might have been avoided if the markets had been freer. In short, financial institutions took risks in part because they were encouraged by governments to do so. There was, for instance, a surplus of cheap money, a surfeit of government encouragement (and even a tacit guarantee) of “bad” loans to customers (who were also voters) who were not good risks.  Besides, the banks fooled themselves that new-fangled and complex financial instruments were safe. This was a mistake which flowed from their not being rational enough market players who ruthlessly sought full information because failure would have been fatal to their own livelihoods. A truly free market would have kept them more fearful and lot less trusting.

In short, it is not as clear as some commentators suggest that there was once an all-powerful freemarket ideology which created a colossal danger and which now be over-ridden in favour of a more statist, enriched, socialised capitalism which would be vigorous, attractive, safe and responsible.

The original story:
“American journalism needs public support”
Leonard Downie
Financial Times
21 October 2009

Summary of the story:
Leonard Downie, a veteran senior journalist, not least with the Washington Post, argues that there is an interesting response to the crisis afflicting the US newspaper market. Funded from all sorts of sources (and even their own pockets), journalists are putting their own journalism, and that of colleagues of many sorts, online. Furthermore, some bloggers - with diverse sources of funding (and none) are putting good journalism on their sites.  

Downie argues that the many varied sorts of funding for this work should include some sort of state subvention too.

livingissues comment:

There is much to celebrate here. The implication is that journalists can:

(1) sometimes become profit-centres in their own right;
(2) usually get their stuff out there very cheaply;
(3) be funded directly to create their journalism.

As Downie says, everyone from universities to philanthropists and special interest groups can fund this new model.

More generally:
We might want to remember that the future of opinion journalism is much less problematic than the future of news-gathering and investigation. Very good opinion can be produced free or is very easy to pay for (by appreciative users of blogs, for instance).

News is not necessarily expensive: many bodies from law courts to firms to armies can produce high quality and invaluable material for virtually no cost and in their own or the public interest. Much of this can be reaily assessed for its accuracy, and outlets will soon gain or lose reputations for accuracy.

But much news is very expensive to produce and the many new outlets may benefit from sort of professional quality monitoring.

Mr Downie’s own piece suggests that there are lots of ways putting that funding in place.(I have argued elsewhere for a National Media Trust).

One could argue that Mr Downie is quite wrong to reach for state support for this burgeoning process. The state’s influence would be stodgy and tend to the monolithic. It could be argued, surely, that this is a case where society could gain strength by informing itself by the involvement of as many voluntary or market sources as possible?

The original story:
“Disadvantaged children failed by British system, warns OECD”
Strapline: Britain’s education and welfare system is failing disadvantaged children despite high levels of public funding, the OECD has warned.
The Daily Telegraph
1 September 2009

Summary of the story:
The papers – including the sensible Telegraph – have got excited by some OECD research (probably not much more than a look through existing data) which purports to show that the UK is failing the younger end of its young, and the poorer end of the younger end.

Here’s the work the papers are referring to: www.oecd.org/els/social/childwellbeing

livingissues comment:
I’ll look at the work in greater detail soon, but even a cursory glance suggests that the UK is an ordinary mid-range big European country in most ways. Our young have a pretty good school experience and are pretty safe. But they are bit hooliganish (they get drunk and have babies a bit more commonly than other rich nation kids). Most other countries seem to fail their young in more ways than we do ours. I think that’s the conclusion one comes to when looking at Table 2.1 (here: http://www.oecd.org/dataoecd/19/4/43570328.pdf).

Of course, we don’t do as well by our children as the Scandinavians. But we compare pretty well with the French and Germans. We do better than the Italians and Greeks, who famously love their children.

The original story:
“In defence of the dismal science”
Robert Lucas
The Economist
6 August 2009

Summary of the story: 
Robert Lucas, a distinguished economist, defends his trade. He argues that economists are getting better at forecasting the effects of various possible and likely future events, and better at dealing with events as they come along. He adds that the future to a large extent is a mystery and will remain one.

(Other valuable contributions to the debate came from Robert Skidelsky and Samuel Brittan, in the Financial Times, 6 August 2009.)

livingissues comment:
This is nothing like the last word on a very difficult problem. In effect, Robert Lucas seems to be saying that economists are good at dealing with economic facts provided they are known. This implies (for instance) that when a bank owns assets whose value and riskiness is unknown (as was the case with quite important chunks of bank assets in 2007 and 2008), it’s pretty hard for economics to get a grip on the banks’ situation. So predicting a banking collapse isn’t all that easy. But he goes on to say that the same sort of economics (especially the use of complex modelling) which is accused of knowing less than it thinks, actually was able to respond much better to the 2008/9 crisis than would have been the case previously. What’s more, it built on insights from Keynes and Friedman.

Some of this is in line with the kind of problem Donald Rumsfeld usefully described as he accounted for the difficulty of running a war.

 “….  as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.”

It is possible to argue that economists don’t properly acknowledge how little they understand, let alone how little they know.

But they don’t need to. The general public already accepts that economists can’t all be right. We often mutter that, “Whenever there are six economists, there are six different opinions.” We are bound to be taking a risk when we pick just one of the six economist to be in charge of our fortunes, and are probably taking as big a risk when we rely on a committee of six economists.

The original story:
“Happiness Schmappiness”
David Aaronovitch
The Times
11 August 2009

Summary of the story:
David Aaronovitch has been an important contributor to the Happiness Debate. In this piece he attacks a much-cited piece of work which purported to show that British children were unhappy. He does so on his familiar territories. He says the “data” employed is deployed to produce the result the researchers demand. (The UK the “worst” in the league table of countries.) He implies that the researchers are dishonest in not challenging their own findings. (They happily cite the bits of data which go with their flow, but they don’t tell us where glaring gaps in their knowledge lie.) 

livingissues comment:
It is very useful to have Mr Aaronovitch’s detailed debunking of a piece of “happiness” research, not only because it’s an important debate about well-being but also because the reading public need to know how to interrogate this kind of material in whatever debate it’s employed.

The original story:
“Crisis? What crisis? The market confounds the left”
Philip Stephens
Financial Times
12 June 2009

and others…

Summary of the stories
Philip Stephens – a commentator symapthetic to New Labour – notes that a largely free market view of capitalism and globalisation seems to have survived the latest ruction. He notes that in the recent EU elections, the left – including the social democrats (the UK’s LibDems, for instance) and incumbents of the left – did badly, whilst the right (including some “far-right”) – including incumbents of the right – did well.

Meanwhile, elsewhere in the same newspaper, Peter Clarke notes that the LibDems might surf to success on Labour’s discomfiture and resurface to mimic the success of their Liberal forebears. Richard Reeves made much the same point.

livingissues comment:
It is indeed fascinating that the left at the moment is suffering even though capitalism and ancient institutions have proved rather fallible. The City and Westminster have survived their recent crises much better than is widely supposed and in all sorts of ways, it may be business surprisingly as normal.

I think this is because people do deep down recognise that things have worked pretty well and probably will again.

There is a pretty good chance that MPs and Parliament will emerge stronger than ever. Good. It is likely that Anglo-Saxon capitalism will stay different from more state-controlled capitalism. Good.

It is indeed quite possible that the problem of politics being a battle between dead classes and ideas will be solved. Good. That may happen because centrists parties hoover up the right of the left and left of the right. Good. It may even be that party structures will matter less. Good.

The British on the whole like private life and not public. Their ideal is not to have to bother with the public realm because it is doing well in the hands of professionals paid to run it. They make a partial exception for politics because it is sufficiently like sport to offer amusement at least as a spectacle. Similarly, they follow business news when their wallet is on the line, or the events are exciting.

It is very fashionable just now to say that politics is about to become less “top down” and more “bottom up”. On this account, the elite won’t be able administer everything centrally because we the people will spring up in myriad forms to manage things more locally, and for ourselves. This is supposed in part to be a function of two-way digital media. These may be good developments, but I see no evidence whatever of a widespread urge to take up the tedious and irksome business of running things like schools, hospitals, prisons, and welfare services. If you do… do write in.

The original story:
“Wall Street slow to see zeitgeist”
Chrystia Freeland
Financial Times
3 April 2009

Summary of the story:
Chrystia Freeland’s piece discusses the public anger about failures in Wall Street and The City. Here is a key passage:

The technorati and the punditocracy have tended to characterise public anger provoked by the crisis with the lazy shorthand of “populist rage”.

This week’s robust mass manifestation of that discontent in London will have strengthened that perception. But the truth is that the people’s disgruntlement is far more focused than that dismissive tag would suggest. Even those London crowds – and remember, these were people animated by the passions of a public demonstration, not participants in an Oxford Union debate – targeted the windows of Royal Bank of Scotland, one of the big public welfare recipients, rather than the hedge funds of nearby Mayfair.

livingissues comment:

Chrystia Freeland seems irritated that Wall Street people dismiss as “populism” the anger about the hiatus in capitalism. Fair do’s: one imagines that there are elite, educated, thoughtful people who are angry with the generation of capitalists who have so failed their customers, employees and firms. Certainly, it’s not just mob folly to dislike what’s been going on.

But Ms Freeland’s analysis seems to emphasise the wrong things. Here are a few:

(1) The street protest against the G-20 was mostly old-style anti-capitalism of the sort we’ve heard for a decade or more. This anger is always directed at whatever capitalist target looks the most unpopular at the time.

(2) This wasn’t “popular protest” by “The People”. Not many taxpayers (all of them) with money in RBS would think it clever to add to the bank’s problems by breaking the firm’s windows.

(3) The really interesting thing about the mass media response to the financial chaos we are living through is how little of it is anti-capitalist. There seems to be a quite a lot of tacit understanding that capitalism hasn’t failed us, we have failed capitalism.

(4) It is very interesting how much interesting discussion there is now about what sort of controls are needed on capitalism as we rebuild the system. The good thing is that there is a lot of sensible discussion about how too much new regulation would be as dangerous as too little.

(5) The important thing is that Chrystia Freeland seems quite wrong to say that the G20 leaders have much to learn from the protestors. They are already being quite thoughtful and have plenty of more interesting voices to take account of.

The original story:
Seeds of its own destruction
by Martin Wolf
8 March 2009

Summary of the story:
Martin Wolf opens an FT analysis of the state of capitalism in The Crunch with a piece which supposes that free market capitalism ruled the roost for a while and that government was once despised and now isn’t.  The tone of Wolf’s piece then changes somewhat to suggest that whilst things may get very much worse, and government interference will certainly be needed, capitalism may not be quite as dead as the opening paragraphs imply.

livingissues comment:
It is worth pointing out that capitalism is and always has been an unruly beast. We should admire it for its energy much more than for qualities it couldn’t really have, like niceness or stability. What’s more, capitalism is premised on the idea that energetic and greedy people are important and can be harnassed for good. (Nice unambitious people can also be harnessed, but that’s not controversial.)

This is not a process in which governments are neutral. Indeed, they regulate so much that what they don’t outlaw they seem to condone. If government slackens the reins, that’s a government decision about the form of economy they want.

It is entirely possible for free-market fans to argue that it was over-regulation which caused the present crisis, as Eamon Butler points out in the Times.

But it is also and rather differently possible to argue that regulation matters and that the present crisis arises not because capitalism is a monster and an enemy of the state, but because it always presents a challenge to regulators.

There always was an understanding that markets are prone to “animal spirits”, as another FT piece notes. They overdo things.

The point is that managing capitalism is something which is always difficult and interesting.

We can’t seriously blame financiers for being greedy and enthusiastic. They are Alpha Males and being over the top is what they are for. On this line, the current problems were caused by governments wholly misreading the world they were dealing with.

In short, governments failed to do government much more than capitalists failed to do capitalism.

Of course it is also true that a generation of capitalists have failed: they destroyed the institutions they were employed to run. To that extent, they misread their own greedy self-interest.

But the free market did not fail and capitalism certainly didn’t. The free market and capitalism don’t exist independently of government and society. Indeed, they take the form allowed to them by government.

The lesson may indeed be that governments should not resile from their role in governmening capitalism, but that still places the present problem as a government failure as much as a failure of capitalism.

The original story:
“This is indeed a class war, and the campaign against the Aga starts here”
George Monbiot
The Guardian
14 January 2009

Summary of the stories:
George Monbiot’s column criticises middle class consumption habits and asserts that the climate damage they will cause will mostly afflict poorer people. He cites the Aga (an expensive cooker and room-heater). But he also takes on the “no frills” flying revolution. He quotes authoritative data that whilst all classes are flying more than they used to, there hasn’t been much change in the share of flying done by the well-off.

GM also looks at the class warfare aspect of the argument over climate change and notes that the Marxists at spikedonline seem to be caught in a paradox as they defend the rights of middle class people to damage poor people.

livingissues comment:
George Monbiot is surely right that the better-off do much more climate damage than poor people (and he might have stressed the degree to which most damage by well-off people is discretionary whilst much of the damage done by poor people is unavoidable).

However, whilst it is popularly believed that the main effect of low-cost flying was to unleash a working-class flight to the sun, in fact almost everyone in all classes is doing more flying. It really ought not to be a surprise that the proportion of poor and rich people flying has not much changed.

The data GM seems to be using says that about 60 percent of leisure flying is done by people earning over £46,000. About 40 percent is done by those earning less. This may not be hugely just, but it is not very surprising.

Interestingly, the data also suggests that much of the increase in flying is amongst people travelling on business, and it seems that the big increase here is amongst the less well-off passengers.

GM is right that spiked online are vigorous – and seemingly paradoxical – in defending the freedoms of consumers (rich or poor) against the anxious nay-saying of the environmentalists. But he perhaps overlooks the value of spiked online as squib-merchants. Besides, spiked and others are surely on the money when they argue that environmentalism is in large degree an argument between affluent greens and affluent consumers, and that these are often really the same type of person and even the self-same person.

But then much protest has a middle class accent. Does now, allways has. See here for a wonderful video about a charming protest at Heathrow.