Category Archives: Government

Will the post virus economy collapse or emerge leaner and fitter?

Many people facing the corona virus pandemic are focussing on immediate needs and requirements but some correspondents – and hopefully heads of state – are looking further.

A Moseley resident writes: “Once again, the bill will have to be paid. Expect years of austerity to pay for this virus disaster. I’m guessing that, otherwise the currency will be valueless and inflation will run riot. At the moment we’re in 1918 to be followed by 1920 and then 1930 and 1940 ….

A clear, convincing and relatively optimistic account was written on March 7th by Australian-born economist, Dr Steve Keen (right).

Dr Keen’s breadth and depth of education inspires confidence: it includes Bachelor of Arts and Bachelor of Laws degrees from the University of Sydney in the ‘70s and later a Master of Commerce and a PhD in economics in the ‘90s at the University of New South Wales in 1998. He is currently professor and Head of the School of Economics, History and Politics at Kingston University in London.

His article A Modern Jubilee as a Cure to the Financial Ills of the Coronavirus – is summarised here. Some links and graphics added

He points out that this is the first disease to compare to the Spanish Flu in terms of both transmissibility and virulence. Europe was embroiled in World War I at the outbreak of the Spanish Flu. Its health and population impacts were huge: estimates of the death toll vary between 40 and 100 million in a global population of 1.8 to 1.9 billion.

But its financial effects were mild, disruptions to the war economy for much of the world were relatively small, with guaranteed employment and wages for military personnel, rationing for the general public and other wartime measures. Crucially, private debt was a mere 55% of US GDP when the flu outbreak began. The private sector was relatively robust.

The situation is vastly different today. Our great financial crisis, the “Great Recession” or “Global Financial Crisis”, lies in the recent past, and its primary cause is still with us: US private sector debt is just 20% of GDP lower than its peak during the crisis, three times higher than at the time of the Spanish Flu.

In addition, we now have “the gig economy” and precarious jobs in industries which are likely are likely to be hard hit by the Coronavirus: health itself, entertainment, restaurants, tourism, education. They could lose their jobs, and be unable to service their debts or pay their rents, or even buy food.

Many employers could also be unable to service their debts. Corporations in the USA have levered up during the period of Quantitative Easing, pushing the US corporate debt to GDP ratio to an all-time record. It is also twice the level that applied during the Spanish Flu. Many corporations will find their cash flows dry up and many will find these debt levels crushing.

The production system is also more vulnerable than at the time of the Spanish Flu.

The global economy today relies on long and complicated supply chains, with many goods being produced from components manufactured in dozens of countries and shipped between them on container vessels.

  • If manufacturing in even one place (such as China) comes to a near standstill, production elsewhere will do the same.
  • “Just in Time” manufacturing methods will run out of inputs, even if their factories are still capable of operating.
  • Shipping could be affected if crews refuse to undertake trips that can take weeks with potentially asymptomatic carriers on board, or if crews are quarantined for two weeks prior to departure.
  • Shares are likely to plunge in value. We have already seen a 14% fall in the S&P500 (though followed by a 5% rebound on Monday March 2nd) . . . We are clearly in the exponential phase of the pandemic. It will ultimately taper, but at present the number of cases outside China is doubling every 2-6 days, depending on the country.
  • Banks will also suffer badly. The asset side of their ledgers includes corporate shares: if these fall in value, banks will find their assets plunging, while their liabilities remain constant. A bank cannot: it must have assets that exceed its liabilities, or it is bankrupt.

A private non-financial company can continue to operate with negative equity, so long as it can pay its debts as and when they fall due even if its liabilities are greater than their assets. But a bank cannot: it must have assets that exceed its liabilities, or it is bankrupt.

A credit-driven, private sector monetary system is not capable of handling a systemic crisis like this. If the rules of such a system are enforced, it will make the crisis worse:

  • renters and mortgagors will be evicted, put on the streets, where they are more likely to catch and transmit the virus,
  • personal hygiene and public health will suffer, when one is needed to slow the pandemic, and the other must be functional to support its current victims,
  • stock markets will crash,
  • banks themselves will fail as their shareholdings plunge in value, bringing the payments system to an end
  • and even those unaffected by the crisis will be unable to shop.

It is, on the other hand, possible for Central Banks and financial regulators, once authorised by their governments, to take actions that prevent the medical crisis from becoming a financial one.

Other mechanisms may exist, but these are the obvious ones to prevent a financial pandemic on top of a medical one.

First: make a direct payment now, on a per-capita basis, to all residents via their primary bank accounts (most effectively, their accounts through which they pay taxes).

As Quantitative Easing has shown, this does not have to be financed by asset purchases. It is quite possible for Central Banks to put a notional asset on their balance sheets to finance. This is already done by the Bank of England to back the value of the notes issued by Scottish Banks: a bill known as a Titan with a face value of £100 million balances the value of bank notes issued by Scottish banks.

The same could be done by any Central Bank to balance a direct cash transfer to the bank accounts of all residents of its country – see People’s Quantitative Easing (Coppola 2019).

This already has been done in Hong Kong. The payment there is HK$10,000, or roughly US$2,000. It does not need to be financed by the Treasury or by taxation: neither were used by the USA to support its $1 trillion dollars per year Quantitative Easing program. There will be no “debt burden for future generations”.

Secondly: boost share prices by buying shares directly.

Quantitative Easing was intended to boost share prices. Clearly it worked—but there is no guarantee that it would work in this situation.

Instead, Central Banks should directly buy shares, as they are also quite capable of doing: Japan’s Central Bank has been doing this for several years already. This puts money in the bank accounts of shareholders, while the shares are then owned by the Central Bank. This could prevent a collapse in share prices, which in turn could prevent a collapse in the banking sector—since if shares fall substantially, many banks will find that their assets are worth less than their liabilities, and they would be forced to declare bankruptcy.

Central Banks can also cope with a share market collapse in a way that private banks and financial institutions cannot. Unlike a private bank, a Central Bank can operate with negative equity. If there was still a stock market crash, a Central Bank holding shares would still be able to operate.

Thirdly: suspend standard bankruptcy rules while the crisis exists

Banks and financial institutions in particular are vulnerable to bankruptcy in this crisis. Non-financial companies which are heavily exposed to the pandemic—health companies, airlines and other transport firms, education providers (including many public universities reliant on student fees), restaurants, sporting grounds—could see their revenues plummet, making them unable to service their debts, and therefore liable to bankruptcy.

Corporations exposed to Coronavirus-driven losses of revenues should also be able to receive direct aid from Central Banks as well. This could take the form of the sale of newly issued shares in return for cash—it should not be in the form of debt, which would simply replace one problem with another.

As Professor Keen ends his constructive and reassuring article, the words of John and Andy, from Moseley and Bournville, have been blended to give their views on a post pandemic future:

If we look coolly, perhaps rather brutally, at our situation, a complete generation may be wiped out, but in the worst scenario most humans on the planet are unlikely to die and the younger members least of all. The NHS will be saved millions by not having to treat the elderly and generally infirm. Pensions will be reduced and a younger, leaner, more focused workforce that realises how soft we had become will take up the cudgels to drive the economy onwards. Human life will go on and maybe the lessons learnt from tackling this infection will help in facing the next.

 

 

 

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A different kind of life is possible: Bruce Kent

After a US commander revealed the information to the Senate, the Ministry of Defence confirmed on Sunday that it has committed the taxpayer to fund a multi billion pound replacement of Trident, with nuclear warheads based on US technology.

Colin Archer and Dave Webb point out that, given the importance of finding large sums of public money to fund the now-urgent green transition, this is the right time to highlight the huge sums devoted to the military sector and top of the list is the UK’s commitment to nuclear weapons. The proposed slogan for Global Days of Action on Military Spending (GDAMS) is ‘Military spending costs the Earth’. 

Amongst the articles listed on the GDAMS international campaign website was one by Bruce Kent originally published in Peace News. The article opens with his tribute to the readable, international and interesting Peace News, before signing off, at least for a time. He thanked all on the team, especially the very modest editor and continued:

Hospital is always an eye-opening experience. Any London hospital is an international community on its own: a Portuguese doctor, nurses from the Philippines and all parts of Africa – all helpful and concerned even if very over-worked. My biggest shock came in a chat with a young trainee nurse. I asked if she did an eight-hour day. She just smiled. Her working day runs for 12½ hours. She lives at least an hour away in South London. So she has about eight or nine hours at home to sleep, cook, eat and have any kind of social life. Not fair. It’s not just money that the NHS needs but good working conditions as well.

In the run-up to the general election, both main parties promised many millions to be spent on increased NHS funding. Why did they not say this and do it long ago?

We can apparently afford £200 billion for a new set of very non-independent nuclear missile submarines. Missiles are on rotating loan from the US, which no one seems to notice. Not a word so far, in all the electioneering that I have heard, about nuclear bombs except for a contemptuous mention that Jeremy Corbyn would not ‘press the button’ – and so kill tens of thousands of innocent civilians far away.

Our concern about military expenditure is clearly a global one. Only recently a report came through my letterbox from the Global Campaign on Military Spending (GCOMS) started by the International Peace Bureau in 2011.

(Right: Bruce and other campaigners attended a GDAMS protest and letter hand-in at the MoD in April 2019)

GCOMS concentrates every April-May on actions all around the world, highlighting the connection between military expenditure and the lack of money for real human needs. Last time, there were 110 events in 27 countries – with UK events in York, Bradford and London. Have a look at the work in progress on www.demilitarize.org.

The need is obvious. The money spent on war and the preparations for war is a scandal and ought to be commonly recognised as such. The global military budget is now not far off two trillion dollars a year. We now have the climate change campaigners with us.

To read the small print click here and use the magnifying glass symbol to read the data from SIPRI’s Arms Transfers Database (March 2019)

Military production involves the release of CO2 in massive quantities. The two great current perils, war and climate change, are dangerous twins.

Many of the events are fun to organise, such as the ‘Move the money’ selfie project, or stalls offering passers-by the opportunity to indicate their alternative budget choices (buttons in jam jars or buckets work well, labelled ‘education’, ‘green energy’, etc). We need a group campaigning on military expenditure to be active in every part of this country, but that means hard and imaginative work and energy. We need an enthusiastic volunteer to coordinate and encourage more GCOMS events next spring. How about you?

From “The Chance for Peace,” a speech to the American Society of Newspaper Editors, April 16, 1953

The best quote that I can end with comes, rather surprisingly, from a US general. Dwight Eisenhower was never a hawk. He can’t have been popular in his world for saying that the nuclear bombs on Japan in 1945 were never necessary. He had this to say in 1953 and you may well recognise the quotation: Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who are hungry and are not fed, those who are cold and not clothed. This is not a way of life. Under the cloud of war, it is humanity hanging on a cross of iron….’

Bruce ends: “A different kind of life is possible. Let’s together make it happen”.

 

 

 

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A Labour government will reverse forty years of privatised services: Professor Richard Hatcher

On 20 July Labour’s Shadow Chancellor John McDonnell launched a new Labour Party document, Democratising Local Public Services: A Plan for Twenty-First Century Insourcing. (1).

Richard Hatcher’s September paper, which may be read in full here, discusses its implications for social care, referring to Birmingham as a case study. Edited extracts follow (several hyperlinks added):

Democratising Local Public Services commits a future Labour government to reversing four decades of outsourcing by local councils by legislating to ensure that the default option for councils is for the public sector to deliver its own services.

The section headed ‘How Outsourcing Has Gone Wrong’ identifies two key issues:

  • poor quality of provision: there is now widespread evidence of failures in service quality in services provided through outsourced contracts’ (p12)
  • and lack of public accountability in different forms: the Information Commissioner has noted that just 23% of the public polled thought that the activities of private providers of public services were accessible. Information about outsourcing companies can only be requested by the public if it is held by a public authority on behalf of that outsourcing company. (p13)

Hatcher points out that social care is the largest single area of council spending, most of which goes to external providers, and finds it very surprising that there is only one reference to social care in the 53 pages of the Labour Party report. This is a regrettable missed opportunity because social care exemplifies the two major problems with outsourced provision that the Labour party report identifies and is therefore a prime candidate for insourcing.

The Thatcher government, we are reminded, created a lucrative new market in social care by forcing local authorities to spend 85% of their social care budget in the private sector, decimating local authority provision.

Since then the transformation towards a market in adult social care has progressed steadily, with no attempt by any government to halt or reverse the trend. [ ….]  In 1979 64% of residential and nursing home beds were still provided by local authorities or the National Health Service; by 2012 the local authority share was 6%; in the case of domiciliary care, 95% was directly provided by local authorities as late as 1993; by 2012 it was just 11%. This also means the bulk of the adult social care workforce – around 72% – is now employed in the private and voluntary sectors, along with another 14% employed by individual service users making use of ‘personal budgets’, leaving just 14% employed by local authorities.’ (pp7-8)  [2]

RH2However, the prospect of exceptional profits attracted big equity investors into this new market. They bought up small providers and opened much larger homes for maximum profit, employing staff, largely women, on low pay, according to Social Care as a Local Economic Solution for the West Midlands, a report by David Powell, New Economics Foundation, with Karen Leach and Karen McCarthy, Localise West Midlands, published in 2017 [4]:

Built into every contract to a major provider will be the underlying need to deliver a significant return on investment

CRESC [the Centre for Research on Socio-Cultural Change] found that big care providers expect to offer 11% returns to investors (including costly debt repayments which often return to the parent operating company). The business models of the largest five residential care chain companies in the UK offer returns to investors that account for as much as 29p in every £1 of their costs – the second biggest drain on expenditure after wages.

The care ‘market’ is increasingly consolidating towards such providers. As of 2015, nearly 20% of all care beds were provided by the ‘big four’ care companies – Four Seasons, Bupa Care Homes, HC-One Ltd, and Barchester Healthcare. They are gradually increasing their market share – buying up small chains and taking over provision from family-owned homes. (p12) But now the care market is in crisis because the government cuts in local authority budgets have squeezed the flow of profits to the care businesses. More than 400 care home operators have collapsed in the last five years, including over 100 in 2018 (Guardian 12 March 2019).

Insourcing will be difficult as the social care market is highly fragmented. As Bob Hudson says [3]:

rh3 (2)There is no compact adult social care service that can be easily repatriated into public sector ownership. Rather the sector is characterised by many fragmented, competing providers. The care home sector supports round 410,000 residents across 11,300 homes from 5500 different providers (Competition and Markets Authority, 2017). The situation in home care is even more diverse with almost 900,000 people receiving help from over 10,000 regulated providers. (2018, pp1-2)

After a detailed seven-page Birmingham case-study of the privatised care industry, Richard Hatcher ends, “One section of Birmingham Council’s Local Manifesto 2018-2022 is titled ‘A Rebirth of Municipal Socialism’. It promises, “We will re-state the case for the municipal provision of services in Birmingham, heralding a new age of municipal socialism. And the Labour council in Birmingham will lead by example, calling time on the misplaced notion that the private sector always trumps the public sector by adopting a policy of in-house preferred for all contracts”. That was published in March 2018, a year and a half ago.

He asks “Where are the detailed plans to put this policy into practice?” and recommends Birmingham City Council to publish detailed plans to bring its out-sourced social care services in-house, open the books and make public these and all its other out-sourcing contracts so there can be genuine public accountability – and specifically for social care, the biggest sector of the Council’s outsourcing.

References 

  1. The Labour Party (2019) Democratising Local Public Services: A Plan for Twenty-First Century Insourcing. http://labour.org.uk/wp-content/uploads/2019/07/Democratising-Local-Public-Services.pdf
  2. Bob Hudson (2016) ‘The failure of privatised adult social care in England: what is to be done?’, The Centre for Health and the Public Interest. https://chpi.org.uk/wp-content/uploads/2016/11/CHPI-SocialCare-Oct16-Proof01a.pdf
  3. Bob Hudson (n.d.) ‘Adult Social Care: An Irretrievable Outsourcing?’ https://www.healthcampaignstogether.com/pdf/Hudson%20Social%20Care%202018.pdf
  4. David Powell, New Economics Foundation, with Karen Leach and Karen McCarthy, Localise West Midlands (2017) Social Care as a Local Economic Solution for the West Midlands. https://neweconomics.org/uploads/files/West-Midlands-Social-Care-report.pdf
  5. Birmingham City Council website  (2018) ‘Care Homes and Supported Living 2018’. https://www.birmingham.gov.uk/directory/55/care_homes_home_support_and_supported_living/category/1069
  6. CorporateWatch (2016) The Home Care Business. https://corporatewatch.org/the-home-care-business/#__RefHeading___Toc2989_782775029
  7. The Labour Party (2017) Alternative Models of Ownership. https://labour.org.uk/wp-content/uploads/2017/10/Alternative-Models-of-Ownership.pdf
  8. The Labour Party (2018) Democratic Public Ownership. https://labour.org.uk/wp-content/uploads/2018/09/Democratic-public-ownership-consulation.pdf
  9. Richard Hatcher (July 2019) ‘Co-production, social care and participatory democracy’.  https://www.healthcampaignstogether.com/pdf/1907%2019%20RH%20co-production%20article%20v3.pdf In ‘Health Campaigns Together: The Debate over Social Care – New Additional Reading’ https://www.healthcampaignstogether.com/socialcare.php

10.‘Our Social Care System is Broken’. https://www.healthcampaignstogether.com/pdf/Social%20Care%20Leaflet%20draft%204%20final.pdf

 

 

 

 

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More localised commerce, industry, food, transport and energy provision during the next Labour Government: Paul Halas

It is now understood that the greatest threat to humanity – and the planet – is climate change. Labour introduced the parliamentary debate that led to the UK being the first nation to declare a Climate Emergency.

The planet can’t take any more. People will have to adapt to the changes that will inevitably take place. We’re never going to revert to a pre-industrial society, but we must be prepared to embrace less wasteful technologies, a less destructive food industry and less materialistic lifestyles.

The Labour Party is committed to achieve zero carbon emissions by 2050, but with far greater use of renewable energy, along with greener transport and farming methods, the aim is to reach this target considerably earlier. Stroud District Council is one of those who have long term plans to become a Community Wealth Building council. That means using local services and companies whenever possible, reducing the council’s carbon footprint and keeping money within the area.

The idea is that communities and councils always give priority to local suppliers and services. For instance when building a new school, or hospital, or sports complex, etc, local firms will always be preferred to the big players to carry out the work. The same goes for services.

The next Labour Government will introduce a Green New Deal (GND), collaborating with scientists, industry and trade unions to work towards net zero carbon emissions by 2030. The UK’s infrastructure – transport, communications, energy and transport systems – have suffered from decades of underinvestment. Over the next ten years Labour will make £250 billion available to invest in a fit for purpose, green economy.

  • Four million homes will be insulated, helping to cut carbon emissions, reduce bills and improve health.
  • Grants will be available to make homes more energy efficient,
  • Labour will make it easier to obtain solar panels.
  • Energy will be taken back into public ownership in order to deliver renewable energy at an affordable price – bringing an end to fuel poverty.

Money earned in the locality will stay in the locality and benefit local people

Local energy cooperatives will be formed up and down the country, each using the most practical renewable energy sources in their locality. Under the Labour Green New Deal such local energy suppliers will be encouraged, especially if they are publicly-owned, or run by people’s co-operatives. The GND will replace old industries and technologies with new, sustainable ones; far from putting people out of work, thousands of new fairly-paid, unionised jobs will be created in every area – with training offered so people can adapt to them. Priority will be given to sourcing materials, components and services locally wherever possible.

The vast inequalities we see now will have to be addressed; a fully sustainable economy will by its nature focus far more on well-being than wealth. Commerce will have to be more localised: local credit unions will be created, house-building schemes, housing associations, food co-operatives – cooperatives and small businesses will become the norm rather than big business empires. 

This commitment will entail the most radical change our society has seen, but will lead to a far more sustainable and equitable future. The next Labour Government’s introduction of a Green New Deal will cut down our carbon output by reducing transport of both people and goods and encourage green technologies. It will also create worthwhile employment opportunities in every region and reduce our dependence on the big corporations.

What’s not to like?

 

 

 

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Reviews of John McDonnell’s ‘somewhat alarming publication’

Chris Giles, Economics Editor of the Financial Times, reviews Economics for the Many, a collection of essays by leftwing thinkers who support the Labour party leader Jeremy Corbyn, with an introduction by John McDonnell, the shadow chancellor.

Giles agrees that there is an urgent need for a galvanising economic manifesto for the new left in British politics, because the UK economy has performed poorly since the global financial crisis a decade ago, with stagnant real wages, feeble productivity growth, large cuts to vital public services and many households finding either good jobs or affordable housing out of reach.

“At the core of this programme is a new set of models, institutions and strategies that, if put in place, would in and of themselves produce vastly improved societal outcomes”. It includes:

  • a plan to build a radically fairer and more sustainable society, in which wealth is shared by all.
  • changing the ownership of companies,
  • ending short-termism in the financial sector,
  • a programme of green investment
  • and much greater regional devolution of state powers.

Giles notes some inconsistencies and omissions and complains that “precious little space is devoted to how Britain should deal with an ageing society, housing or how to manage the existing public sector responsibilities of health, education, police or the armed forces”.

He concludes: “If you want a new left coherent programme, this is not it . . . But for all its flaws, the book serves a useful guide to the thinking and language of the new left. Fellow travellers must oppose austerity, financialisation and neoliberalism, while rising to the challenge of radical democratic ownership of the means of production”.

The book will be available in paperback this month and its online blurb says: “With the election of Jeremy Corbyn as Labour leader, and the extraordinary turnaround in Labour’s fortunes in the 2017 election, we have a real opportunity to build an economy in Britain that is radically fairer, radically more democratic, and radically more sustainable”.

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The Telegraph’s Liam Halligan writes in the Spectator: Those wanting an idea of how the world’s fifth biggest economy might look under Prime Minister Jeremy Corbyn should take a look at McDonnell’s speech. For more detail, you can read the book he edited – Economics for the Many – published just before the conference . . .

McDonnell (above) writes: ”Calls for the nationalisation of water, electricity and gas, the Royal Mail and trains, greeted with howls of outrage and press derision, are very popular with the public”.

Halligan comments. “To some extent, that’s true. A recent YouGov poll suggested around 60% of voters think the railways and Royal Mail should be back in public hands, with half wanting water and energy companies re-nationalised”.

He touches on some of the inconsistencies voiced by Giles but continues: “Having said that, this volume does pose some relevant and pressing questions – with McDonnell asking, for instance, if government should ‘deal with Big Data’ by creating ‘new digital rights’. He singles out:

  • a chapter by technology researcher Francesca Bria on ‘surveillance capitalism’, which raises similar key issues, ranging from ‘the monopoly power of the tech giants’ to ‘a new tax on digital platforms’;
  • an argument by Prem Sikka, the respected accountancy academic, that ‘tax revenues are under relentless attack from wealthy elites’ and ‘tackling tax avoidance and evasion is one of the major social and political issues of our time’. He’s not wrong;
  • Ann Pettifor’s call for investment into jobs relating to renewable energy – a policy we’re hearing much more of, after 28-year old Alexandria Ocasio-Cortez won the New York Democrat primary this summer, on a ‘Green New Deal’ ticket. Almost certain to enter Congress in November, her agenda will be catapulted into the political mainstream;’.
  • Christopher Proctor’s chapter about the need for academic economics to get beyond its ‘theoretical strait-jacket’, to become ‘more open, diverse and relevant to the real world’ and
  • McDonnell’s call for ‘a real devolution of powers and resources out from the centre’ of the UK -adding it is, indeed, disturbing Britain is ‘the most geographically unequal country in Europe’ – with ‘the richest single area – central London – but also nine of Northern Europe’s ten most deprived areas’.

Labour’s 2017 manifesto promise of a corporation tax rise from 19% to 26% (the Tories plan a cut to 17% by 2021) and the party’s proposal for public spending to increase by around £75bn, a 10% uplift, over the next three years, leads Halligan to warn, “Such measures could well result in a much weaker currency, higher interest rates and slower growth. Similarly, Labour’s share transfer plans may provoke capital flight, curtail investment and, in the words of the Confederation of British Industry, ‘crack the foundations’ of prosperity’ “. And Halligan ends:

Amid corporate scandals, a massive housing shortfall and polarising wealth inequality, UK capitalism faces a crisis of confidence. Senior Tories, if they fail adequately to respond, are fools. For, as McDonnell writes in this somewhat alarming publication, his ‘better world is in sight’ “.

 

 

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Ending the damage the British boarding school does to its pupils – and to Britain

A motion approved by delegates at the 2019 Labour Party Conference in Brighton said a government led by Jeremy Corbyn would “challenge the elite privilege of private schools” and claimed that “the ongoing existence of private schools is incompatible with Labour’s pledge to promote social justice”. The party would therefore include in its next manifesto “a commitment to integrate all private schools into the state sector”.

Below: the final paragraphs of an article first published here and also on this site, reproduced with two profile links added.

Psychohistorian and psychologist Nick Duffell speaks to Richard House about the distinct damage the British boarding school system does to its pupils – and Britain.

A file picture of Eton College

RH: Can you say more about how these traumas drive and distort the attitudes and decision-making of political leaders?

ND: Well, the main thing is that if you’ve been forced to completely dissociate from your natural vulnerability, you can never hope to understand the vulnerable in society.

Neuroscience now proves that if you don’t have emotional intelligence you cannot make good choices; for me, this is the science behind what economist Will Hutton says, that the Tory Party has consistently made bad decisions over decades.

And then there’s the duplicity habit, referred to earlier: if you have a strategic survival personality running your life, you lose touch with what’s true or what’s a lie; you can never be wrong — which is why, even now, Tony Blair cannot admit he was wrong over Iraq.

Boarding school survivors can’t join groups and become team players unless they’ve done the necessary inner work; so we haven’t even really joined Europe yet, despite feeling we should either lead it or quit it. In short, elite boarding is a terrible training for good leadership.

RH: It’s outrageous that, as Robert Verkaik outlines in his book Posh Boys: How the English Public Schools Ruin Britain, these schools receive massive fees, yet as charities pay no rates, corporation tax or investment-income tax. And were VAT charged on fees, it would yield £1.5 billion of tax annually. So what, in your view, is to be done? What line would you advise a left-Corbyn government to take with this toxic class-based schooling system?

ND: It’s vital that Corbyn engages some good advisers on mental health issues in the light of what we now know about psychopathology not only affecting the less privileged, but also the elite.

He should take note of George Monbiot’s recent suggestion in the Guardian of mandatory psychotherapy for would-be political leaders.

Boarding younger than 16 should be stopped, and the existing facilities become residential sixth-form colleges on the model of the Danish “efterskol” and the tax concessions to private schools should be reversed.

Original citation: Nick Duffell is a is psychotherapist, author and psychohistorian based in London. His books include Wounded Leaders, The Making of Them and (with Thurstine Basset) Trauma, Abandonment and Privilege. Richard House is a left-green Corbynista activist in Stroud.

 

 

 

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