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Half the Jobs Are Going

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is, to our minds, faintly ridiculous,” said one of the judges on the employment tribunal. So the tribunal ruled that Uber’s 30,000 drivers in London were actually employees, and therefore entitled to be paid the minimum wage, to be given sick pay, even to have paid holidays.

Uber promptly appealed the ruling, because it would wreck its business model in the United Kingdom and, if the example spreads, worldwide. But it was only a temporary victory for workers’ rights, because just as the real jobs have been replaced by fake “freelance” jobs like Uber that strip people of their old legal protections, so the “freelance” driving gigs will soon be replaced by – no jobs at all.

The first self-driving cars are already on the roads. Automation, in the form of artificial intelligence, will probably abolish almost all the driving jobs in the next twenty years. In Britain alone, that means 400,000 jobs driving big trucks and almost 300,000 licensed taxi drivers. (The jobs driving delivery vans will last a little longer.)

Three-quarters of a million jobs gone, say, and nothing plausible coming down the road to replace them. Scale it up to the size of the United States, and that’s around 4 million more American jobs gone, not to foreign competition and “outsourcing” but just to technological change. It’s harder to replace drivers than bank tellers – “every ATM is the ghost of three bank tellers” – but it just takes a little longer to develop the right software.

There is a message here for all the angry people who voted for Brexit in Britain, who will vote for Donald Trump next week in the United States, who will vote for Marine Le Pen and the National Front in France next April. They are angry because the secure jobs and decent living standards they enjoyed in the latter half of the 20th century are gone. Something must be done about it, but the jobs are not coming back.

The newly insecure millions blame “globalisation” and the export of manufacturing jobs to lower-wage economies overseas for their plight, and in the early days that was indeed what killed most of the jobs. This is why they cheer for Donald Trump when he promises 40 percent tariffs on imported goods and the end of free trade deals like the North American Free Trade Agreement. They hope that he’ll bring the jobs home.

If he wins, he will destroy the Mexican economy, cause immense collateral damage to the Canadian economy, and trigger a full-scale trade war with China, but there is still no hope that those lost jobs will ever come home again. There might be more manufacturing in the United States, but automation would still ensure that most of the old jobs were eliminated. As they will one day be eliminated in their new homes overseas too.

This is a global economic transformation comparable to the industrial revolution, when entire populations went from overwhelmingly rural to overwhelmingly urban in only two generations. This time the transformation is from a full-employment economy to an economy of abundance that only requires a fraction of the population to work.

A 2013 study by Oxford University economists Carl Frey and Michael Osborne concluded that 47 percent of American jobs are likely to be destroyed by automation in the next 20 years. That’s change so big and so fast that people can’t believe it’s happening, and so they prefer to focus on something like out-sourcing that might be fixed by politics.

The industrial revolution was an angry, turbulent time, with urban uprisings and class warfare. We’ll be lucky if the damage this time is limited to demagogues like Donald Trump, who pander to the fear and anger of the newly displaced – and not just the displaced of the old working class, but the growing numbers of middle-class people who are also being displaced by machines.

They are not “right-wing” in the traditional sense, although many have become more socially conservative and some openly racist as their panic rises. “Populist” is a much better word: they hate the changes and the “elites” who seem untouched by them, and they want their old jobs and their self-respect back. But the old jobs are not coming back, and even populist politics cannot resurrect them.

Besides, most of them actually hated their jobs, from which they were only free for two weeks (the US and Japan) or at most five weeks (Europe) a year. The real task will be to find ways of providing a majority of our fellow-citizens with money and self-respect without those jobs. Some form of Guaranteed Minimum Income is probably the answer, but we have barely got round to asking the right question yet.

This is not a disaster; it’s a process. Last time it took over a century of mass misery and occasional mass bloodshed to get through it, but at the end most people were living much longer, healthier, more interesting lives than their peasant ancestors. We should try to do it a lot better and quicker this time.
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To shorten to 725 words, omit paragraphs 6 and 7. (“The newly…too”)

Brussels Bombs

Belgium may be a boring country, but it still seems extreme for a Belgian politician to say that the country is now living through its darkest days since the end of the Second World War. Can any country really be so lucky that the worst thing that has happened to it in the past seventy years is a couple of bombs that killed 34 people?

That may sound a bit uncharitable, but respect for the innocent people killed by terrorists does not require us to take leave of our senses. What is happening now is the media feeding frenzy that has become almost a statutory requirement after every terrorist attack in the West.

And people do let themselves get wound up by the media-generated panic. Last night at dinner a young man, staying with us overnight in London before taking a morning flight to the United States, openly debated with himself about whether he should cancel his (non-refundable) ticket or not. It was a ticket from London to Chicago that went nowhere near mainland Europe at all.

The airlines are just as prone to panic, cancelling flights into Belgium as if the country had suddenly become a seriously dangerous place. This story will dominate the Belgian media for weeks, and the rest of the Western media for the remainder of this week. Even non-Western media will play it for a day or two. Almost nothing new or useful will be said, and then the frenzy will die down – until next time.

This is a very stupid way of behaving, but you will notice that I am a part of it. No matter what I say about the bombs in Brussels, the fact that I am writing at length about them in a column that appears all over the world contributes to the delusion that they are not only a nasty event but also an important one.

It is the sheer volume of coverage that determines an event’s perceived importance, not what is actually said about it. But if we in the media are compelled to write about an event like the Belgian bombs anyway, what can we truthfully say about it that will not feed the panic?

The first thing, after every terrorist attack, is to stress that the media coverage of the attack is its primary purpose – indeed, almost its only purpose. It’s obvious and it’s trite, but if you don’t actually say it people forget it. Like the health warning on cigarette packets, it should be part of every story on terrorism.

Secondly, we have to put the alleged “threat” of such terrorist attacks into perspective. People rarely do this for themselves, because once events are beyond the range of their daily experience most people cannot distinguish between what is truly dangerous and what is only dramatic and frightening.

It really does help to remind people that terrorism is a statistically insignificant risk – that they are in much greater danger of dying from a fall in the bath than of dying in a terrorist attack – even if that approach conflicts with the journalists’ natural urge to emphasise the importance of whatever they are writing about.

And finally, a little dispassionate analysis quickly deflates the notion that terrorism is “an existential threat” (as British prime minister David Cameron once said). For example, the recent terrorist attacks in Europe have been largely confined to French-speaking countries.

Muslim immigrants in France and Belgium mostly come from Arab countries, and especially from North Africa, where French is the second language. Radical Islamism is much weaker in the rest of the Muslim world, so Germany (whose Muslims are mostly Turkish) and Britain (where they are mostly of South Asian origin) generate fewer Islamist extremists than the francophone countries, and face fewer terrorist attacks.

France’s and Belgium’s Muslim citizens are also less integrated into the wider community. French housing policy has dumped most of the immigrants in high-rise, low-income developments at the edge of the cities, often beyond the end of the metro lines. Unemployed, poorly educated and culturally isolated, their young men are more easily recruited into extremist groups.

The point of this sort of analysis is to cut the problem down to size. There is no terrorist army in Belgium, just a bunch of young men making it up as they go along. For example, the Brussells attacks happened four days after the arrest of Salah Abdeslam, the sole survivor of the gang who carried out the attacks on the Bataclan arena and the Stade de France in Paris last November.

Back in Brussels after failing to use his suicide vest in the Paris attack, Abdeslam was a psychological wreck, and his Islamist colleagues undoubtedly expected that once in police custody he would sing like a canary. So they decided to launch another attack and go to glory before the police kicked in their doors.

Prime Minister Charles Michel issued the usual ritual incantation about Belgians being “determined to defend our freedom,” but Belgium’s freedom is not at risk. Terrorists are not an existential threat. They are a lethal nuisance, but no more than a nuisance.
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To shorten to 725 words, omit paragraphs 3 and 4. (“And people…time”)

A Scottish Neverendum

10 March 2014

A Scottish Neverendum?

The referendum on Scotland’s independence is only six months away, and suddenly the cautious sparring between the Conservative-led coalition government in London and First Minister Alex Salmond’s pro-independence government in Edinburgh has turned into open war. London won the first battles, and the “No” side will probably win the referendum in September – but it is going to be a long war.

The opening shot was fired by Chancellor George Osborne in London, who declared that an independent Scotland could not negotiate a currency union with the rest of the United Kingdom. With only one-tenth of Britain’s population, Scotland is just too small to demand an equal say in how the pound is run. Besides, why would London want to keep the responsibility for Scotland’s huge and rather dodgy banking sector?

Alex Salmond responded by threatening to repudiate Scotland’s share of the national debt if London wouldn’t agree to a currency union, but the conclusion was obvious. Scotland could go on using the British pound if it wanted (like Panama and East Timor use the US dollar), but it could have no formal link.

Next was the president of the European Commission, Jose Manuel Barroso, who warned that it would be “difficult, if not impossible” for an independent Scotland to join the European Union. Other EU members that don’t want their own autonomous regions to secede (he meant Spain) would almost certainly block Scotland’s membership in order not to create a precedent.

Independence was looking more complex and expensive by the minute – and then Standard Life spoke up. The Edinburgh-based company is the largest pension provider in the United Kingdom, managing around $400 billion in assets and employing 5,000 people in Scotland.

Ninety percent of Standard Life’s four million UK customers do not live in Scotland, however, and it warned that it might have to leave if the Scots voted for independence. A poll subsequently revealed that 36 percent of Scottish firms would consider leaving following a “yes” vote.

It was a cold shower for the Scottish National Party (SNP), and the number of people planning to vote “yes” in the referendum dropped to 32 percent, while the “noes” remained unchanged at 57 percent. Lots of Scots would like independence if it doesn’t cost them anything, but they don’t want it badly enough to risk any major changes. Unless something changes quite dramatically, the final vote will be 60-40 or more against independence.

So what are the Scottish Nationalists really hoping to achieve? Originally Salmond planned to build support for independence through a long period of successful government within the UK, but the SNP’s landslide victory in 2011, in the depths of the recession, stoked unrealistic hopes among his militants and forced his hand. Nevertheless, he probably knew he was going to lose this one.

That’s how it worked in Quebec in the 1980 referendum, which the separatists lost 60-40. The idea of leaving Canada and striking out on their own frightened the French-speaking majority in Quebec too much at the time. But it did put the question on the table, and it never really went away again.

Salmond will know the history of Quebec separatism well, for it is the best analogy to his own situation. He will be aware that the second referendum, in 1995, came within a hair’s breadth of succeeding. And he will have noticed that the separatist Parti Quebecois is still around, is likely to win the provincial election due on 7 April – and will almost certainly call a third referendum in the next few years.

It’s what English-speaking Quebecers call the “neverendum”, but it actually does end eventually. You only have to win the referendum once. After 34 years of this, the “Rest of Canada” really doesn’t care any more, so there will be no pleas to Quebec to stay this time, no special offers to sweeten the Confederation.

The “Rest of the United Kingdom” is already there: the English, in particular, seem distinctly unmoved by the prospect of Scottish independence. This may be because Scotland has much less of the UK’s population than Quebec has of Canada’s (one-tenth vs. one-fifth), and because Scotland is at the far end of Britain whereas Quebec is in the middle of Canada. So maybe it will only take two referendums in Scotland.

They should pray that this is so, because the four-decade, three-referendum scenario is pretty grim. In Quebec, it caused the most spectacular case of “planning blight” in recent history. The perpetual uncertainty about Quebec’s political and economic future drove the corporate headquarters out (they moved to Toronto), and the immigrants and the investment went elsewhere. The population numbers in Canada’s two biggest provinces tell the story.

In 1980, the year of the first referendum, there were 6.5 million people in Quebec and 8.5 million in Ontario, and the ratio had been steady for most of the century. There are now 8.2 million people in Quebec – and 13.4 million in Ontario. Montreal had always been Canada’s biggest city, but Toronto is now more than 50 percent bigger.

Salmond must know that this is where he is taking Scotland.  He presumably thinks it is worth it.
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To shorten to 725 words, omit paragraphs 3, 5 and 6. (“Alex…link”; and “Independence… vote”)

Margaret Thatcher

8 April 2013

The Passing of Margaret Thatcher

By Gwynne Dyer

Margaret Thatcher was the woman who began the shift to the right that has affected almost all the countries of the West in the past three decades. She died in London on Monday, 34 years after she became Britain’s first female prime minister and 23 years after she was driven from office, at the age of 87. But it is an open question whether even the crash of 2008 and the ensuing prolonged recession have finally ended the long reign of her ideas in Western politics.

“This woman is headstrong, obstinate and dangerously self-opinionated,” wrote some minion in the personnel department of British chemical giant ICI, rejecting young Margaret Roberts’s application for a job as research chemist in 1948. She was fresh out of Oxford University, 23 years old, brimming with self-confidence, and absolutely full of opinions. She probably frightened the job interviewer half to death.

But she landed a job with a plastics company in Colchester in 1949. She joined the Conservative Party and stood for parliament in the 1950 election (she was the youngest candidate ever), and married businessman Denis Thatcher in 1951. Margaret Thatcher, as she then became, finally made it into parliament in the 1959 election.

She entered the cabinet of Conservative Prime Minister Edward Heath in 1970 as the “statutory female” (as he gallantly put it). But she had the last laugh in 1975, replacing Heath as party leader after the Conservatives lost the 1974 election. She took a very hard line from the start, both in domestic and in foreign politics. Her open hostility to the Soviet Union led a Soviet newspaper in 1976 to dub her the “Iron Lady”, a title in which she reveled.

Her real impact, however, was in British domestic politics, where she broke the welfare-state consensus that had dominated all the major parties for the previous thirty years. “It is our duty to look after ourselves,” she said, and the political orthodoxy trembled before her onslaught.

An American diplomat in London, in a confidential assessment of the new Conservative leader in 1975, captured the essence of Thatcher’s revolutionary politics. She was, he wrote, the “genuine voice of a beleaguered bourgeoisie, anxious about its eroding economic power and determined to arrest society’s seemingly inexorable trend towards collectivism.”

That was what carried her into office in the 1979 election, and as prime minister she acted on her convictions. After she had fought and won the Falklands War against long odds in 1982 her popularity was unassailable, and she used it to break the power of the trade unions and privatise state-owned industries. More than that, she made free-market ideology for all intents and purposes the state religion.

So it remained for thirty years, long after her harsh and confrontational style had lost her the support even of her own party. She was ousted as Conservative Party leader and prime minister by her own colleagues in 1990, but the Labour governments of 1997-2010 were also in thrall to her ideas. Their influence abroad, particularly in the United States, was equally great.

Yet her greatest contribution to politics, and the foundation of the right’s political success over recent decades, was not ideological but tactical. She was the first politician to grasp the fact that with the decline of the old working class, it had become possible to win elections on a platform that simply ignored the wishes and needs of the poor. There weren’t as many of them as there used to be, and the poorest among them usually failed to vote at all.

This insight was key to the success of President Ronald Reagan in the United States in the 1980s, and to the triumph of conservative parties in many European countries in the same period. It continues to be a major factor in the calculations of parties both on the right and on the left down to the present day: you cannot count on the poor to win an election for you.

Margaret Thatcher was made a baroness after she relinquished her seat in the House of Commons in 1992, and continued to sit in the House of Lords until ill health forced her to withdraw from public life entirely in 2002. In her last years she suffered from dementia, and she finally succumbed to a stroke on Monday.

Her influence lives on, at least for the moment, but it may not last much longer. The powerful middle class on which she founded her political strategy has been hollowed out by the very success of the free-market policies she promoted. Once you allow for the effects of inflation, average middle class income in the United States, for example, has not grown at all in the past three decades.

The time may be coming when gaining the votes of the poor, including the growing numbers of the “new poor”, will once again be essential to win elections.

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To shorten to 725 words, omit paragraphs 6 and 11. (“An American…collectivism” and “Margaret…Monday”)