I will be doing a talk on “Who Runs the UK?” on the evening of Tuesday 26 September in London. More details to follow before too long.

The Wisdom of Money

4 Jul 2017

This review appeared in the Financial Times on 23 June.

It is all too easy for individuals to think that assumptions prevalent in their own country are universal. Take, for instance, the thorny question of politeness. What is considered reasonable behaviour in one country can be seen as outrageously rude in another. Just look at the faces of passengers on the London Underground when someone barges through a queue to get on to a crowded tube train.

The same is true of attitudes to money and to wealth more generally. What some might consider vulgar and ostentatious might be seen by others to be in the finest taste.

Pascal Bruckner’s The Wisdom of Money should be viewed in this context. It is essentially an attempt by a leading French intellectual to persuade his compatriots to alter their view of money. In Bruckner’s view, money should be treated as a serious subject rather than denigrated. He rejects the centuries of derision that literary figures have, he argues, heaped on to money and prosperity.

For instance, take his view on what he describes as the “soft Bolshevism” prevalent in France. It is common for leading political and cultural figures to condemn materialism, distrust the market and excoriate high finance. At the same time, he says, the poor are often venerated.

Such rhetoric may sound radical but Bruckner is right to argue that in some respects this egalitarian ethos is deeply conservative. The underlying message is that the working and middle classes should be ashamed to express great ambitions. Everyone should be willing to limit their material aspirations for the sake of society as a whole. This is a recipe for social stasis that inevitably favours those currently in positions of wealth.

Bruckner concludes that French anti-materialism amounts to a rejection of human progress. “When a people claims to renounce money and the benefits it provides, that is because it also wants to renounce history. And that proves that it no longer has confidence in itself.”

Bruckner is on weaker ground when he discusses the American attitude to wealth. Historically, it is true that the US has seen itself as the land of opportunity where anyone who works hard can achieve the American dream of prosperity. But he fails to see that in some respects the US has become more like France in that it has become uneasy with money.

Take, for example, the idea that “greed is good”. Bruckner describes this as the “American credo” as opposed to the French “cult of pleasures”. But he has apparently forgotten that the slogan was coined as part of an attack on the perceived excesses of US wealth.

“Greed is good” was the most memorable line of Gordon Gekko, a corporate raider, in Oliver Stone’s 1987 film Wall Street. Yet Stone’s goal was not to celebrate wealth but to warn of its potential dangers. Gekko was the villain of the piece. Stone is far from alone in voicing such criticism even in the US. Some 30 years on from the original film such views have become widespread. It is not that most Americans are opposed to wealth in principle but it often arouses anxiety.

Just consider the vast number of books and articles that warn of the dangers of excessive consumption. Too great a focus on accumulating wealth is said to lead to dangerous inequality, widespread misery and even to threaten the planet’s survival.

The rise of this critical attitude towards consumption also helps explain why the wealthy are keen to be seen promoting philanthropic initiatives. Many rich individuals are eager to rebut the charges made against them and show that they play a beneficial social role.

The US and France maintain distinct attitudes on many topics including wealth. But they have arguably converged to a greater extent than those on either side of the Atlantic would like to admit.

Following the publication of my spiked article on the 50th anniversary of the Six Day War I appeared on a spiked podcast on 16 June to discuss the question further. You can listen here  (it is the final item).

This is the text of my article that was published on spiked on 13 June.

Fifty years ago this week, the Arab world was suffering from severe trauma. In early June 1967, the tiny state of Israel had militarily crushed the surrounding armies of Egypt, Jordan and Syria in just six days of war. That was despite the loudly proclaimed pretensions of the Arab regimes, and Egypt in particular, to represent the Arab masses, anti-imperialism and Third World solidarity.
To understand why Israel’s victory in what came to be know as the Six-Day War was such a shock, it is important to put it into perspective. One way to do this is simply to look at a map of the region as it was. It shows a small state of Israel dwarfed by its much larger neighbours. Not only that, but Israel’s borders, relative to its size, were long and hard to defend. At its narrowest point, the distance between Israel’s border with the West Bank (then part of Jordan) and the Mediterranean Sea was only 9.3 miles (15km). That is just a few minutes’ drive.
Israel was much smaller than the surrounding states by other measures, too. For example, its population in 1967 was about 2.7million compared with 32.4million in Egypt, 5.8million in Syria and 1.3million in Jordan. In economic terms, Israel’s GDP was $1.4 billion compared with $5.6 billion for Egypt, $1.6 billion for Syria and $631million for Jordan. If the numerous other Arab regimes are included – which there is a case for, as many professed support for pan-Arabism – the discrepancy with Israel was even greater.
Some argue that such comparisons understate Israel’s strength. For example, the quality of Israel’s army was better than those of the Arab countries. But such debates need not detain us here. The important point is that in 1967, the Arab regimes were loudly declaring their pan-Arabist credentials while making military threats against Israel. Egypt, for instance, began massing its troops in the Sinai Peninsula along Israel’s border. It also blockaded the strategic straits of Tiran, adjoining the Red Sea, to Israeli shipping.
And yet in the event, the Arab regimes were humiliated by Israel. The Israeli army launched a pre-emptive airstrike which destroyed most of the Egyptian airforce on the ground. When Israel was then attacked by Jordanian and Syrian forces (and some Iraqi forces, too), it struck back against them all.
In less than a week, Israel won a spectacular victory against these combined armies. It took control of the West Bank, including East Jerusalem, as well as the Gaza Strip. The pre-1967 borders are often referred to as the ‘green line’ between Israel as it was and the Palestinian areas that it captured. Israel also captured the Golan Heights from Syria and the Sinai Peninsula from Egypt. Sinai was later handed back in stages following the 1979 peace treaty with Egypt, the largest Arab state.

The war today
The main contemporary relevance of these events of 1967 is that they are seen as the starting point of what is now widely referred to as Israeli ‘apartheid’. Today, there are about 2.7million Palestinians in the West Bank and another 1.9million or so in the Gaza Strip. That is against an Israeli population of about 8.7million, of whom about 1.8million are Palestinian (but who hold Israeli citizenship). In all, there are about 6.5million Israeli Jews and about the same number of Palestinians living in broadly the same area of land.
Although the borders of the West Bank and the Gaza Strip are controlled by Israel, their Palestinian populations have a degree of autonomy. Israel unilaterally withdrew its forces and settlements from Gaza in 2005, and since 2006 the Islamic Hamas movement has governed the enclave. However, the area’s land, maritime and air borders are still controlled by Israeli forces (except for the border with the Sinai Peninsula, which is controlled by Egyptian forces).
The West Bank is an even more complicated patchwork. Some areas are under the control of the Palestinian Authority, some under Israeli jurisdiction, and some under joint control. The area is also occupied by about 600,000 Jewish settlers, living in their own outposts, who often come into conflict with the Palestinians.
This, then, is the basis for the case against Israel as an apartheid state. The argument is that it systematically discriminates against the Palestinian population of the West Bank and the Gaza Strip. It operates a policy of hafrada (the Hebrew word for separation), which involves keeping Israelis and Palestinians apart, with the latter in a subordinate position.
The heavily fortified barrier between Israel and the bulk of the West Bank is seen as perhaps the defining feature of this divide (it is not exactly coterminous with Israel’s 1967 borders). It was built from the 1990s onwards in response to a wave of suicide bombings against Israelis.
No doubt the separation makes it hard for Palestinians to commute and travel. But there is a fundamental problem in the way that Israel is condemned. By singling Israel out as an apartheid state – a description which is not routinely applied to any other country – observers and campaigners give the impression that it is uniquely evil. Applying the term solely as an epithet to Israel suggests much more than that there are instances of discrimination; it implies that Israel’s misdeeds stand out as incomparably despicable. No other nation in the world today is described in this way.
Anyone with a broader view of the world should appreciate the one-sidedness of this charge. Take, for instance, Israel’s separation barrier. It is minute compared with the extensive fortifications keeping migrants out of the European Union. These include substantial naval forces as well as extensive land fortifications along the border between Turkey and Greece. Over the years, many thousands have drowned in the sea or suffocated trying to make the crossing into the EU. Yet the EU is never accused of operating a policy of apartheid or ‘hafrada’ against non-citizens.
At least Israel can reasonably claim that it is facing an existential threat. Most Arab states still refuse to recognise it and Islamist groups routinely threaten to destroy it. In contrast, no one could seriously claim that the EU is facing imminent physical destruction by outsiders. Yet it is Israel that is singled out above all others for criticism.
Another illuminating comparison is between the foreign condemnation of Israel and the external discussion of the conflict in neighbouring Syria. The death toll in the Syrian Civil War is almost 500,000 by one estimate, with millions internally displaced and millions more seeking refuge abroad. Although Israel’s relationship with the Palestinians is undoubtedly troubled, it is a haven of tranquillity compared with life in the neighbouring state. Criticism of the role of Islamist groups such as ISIS seems particularly muted in the West. Yet the Islamists’ goal is not just to discriminate but also systematically to murder large sections of populations they control, including religious minorities and non-fundamentalist Muslims.
There are also numerous instances of bloody conflict around the world, of systematic intolerance and bloodshed. Take, for example, Turkey’s long-running war against the Kurds. Or the humanitarian catastrophe in Yemen in which Saudi-led airstrikes have played a key role. Or the ongoing conflict in Afghanistan, a country that has suffered decades of foreign military intervention. Or consider the fate of the Rohingya Muslim minority in Myanmar. The list could go on and on – and yet it is only Israel that is labelled an apartheid state.
The clear implication is not simply that Israel discriminates against the Palestinians in certain instances – it is that there is something that makes Israel uniquely malign. Although most purveyors of the apartheid label would deny that they are anti-Semitic, it is hard to resist that conclusion. Why else obsess over Israel’s problems while saying little or nothing about what is happening elsewhere? And why apply the apartheid epithet only to the Jewish State?
To understand how this habit developed, it is necessary to look briefly at the discussion in the Arab world, inside Israel and in the West. Although the dynamics of the debate are different in each case, they feed off each other in peculiar ways.

The Arab world
The Arab regimes and their fellow travellers were describing Israel as uniquely evil long before it became commonplace in the West. This was partly a response to the embarrassing blow that the Six-Day War landed on their pan-Arabist pretensions. But it should also be understood as a reaction to developments within the Arab world itself.
Before June 1967, the Arab regimes could present themselves as the champions of the Arab masses and of the anti-Israeli cause. After the war, however, their legitimacy was severely undermined. As a result, they decided to lend rhetorical and material support to the recently founded Palestinian nationalist movements. The Palestine Liberation Organisation (PLO), for example, was founded in 1964 but received new impetus after the 1967 war.
The Arab regimes tried to push the PLO in a more conservative direction and often found themselves in conflict with the Palestinians. For example, the Jordanian regime found itself in a bloody conflict with Palestinian fedayeen (guerrilla fighters) in what became known as ‘Black September’ in 1970. By the summer of 1971, the PLO leadership had been expelled from Jordan to southern Lebanon.
Although Lebanon borders on to Israel, it had stayed out of direct military conflict. Yet the presence of a large armed Palestinian population, including many descendants of refugees who fled their homes when Israel was founded, destabilised the country. This helped create the basis for the outbreak of a bloody civil war in Lebanon which started in April 1975 and went on until 1990. It was not that the Palestinians were entirely or mainly to blame for the conflict, but rather that their presence upset Lebanon’s delicate pre-existing balance.
The Arab regimes’ conflict both with Israel and within their own borders created the basis for the notorious United Nations (UN) resolution, ‘Zionism is Racism’. In November 1975, the UN General Assembly adopted Resolution 3379. Although the resolution started with a ritual condemnation of all forms of racial discrimination, it went on to focus on Israel. It also emphasised the connections between Israel on the one hand and South Africa and Zimbabwe (both then under white minority control) on the other: ‘[T]he racist regime in occupied Palestine and the racist regimes in Zimbabwe and South Africa have a common imperialist origin, forming a whole and having the same racist structure and being organically linked in their policy aimed at repression of the dignity and integrity of the human being.’
The resolution, which had the backing of the Arab regimes, won a large majority in the general assembly. It was revoked in 1991, but by that time it was widely accepted, in the developing world at least, that Israel was a particularly odious state.
Two other remarkable features of this resolution are also worth noting. First, although it uses the term ‘Zionism’ four times, at no point does it refer to Israel. It is as if the country’s influence is so powerful and wicked that it cannot even be mentioned by name. Secondly, and perhaps even more remarkably, there is no mention of the Palestinian people. There is one reference to ‘the racist regime in occupied Palestine’ but no talk of the Palestinian themselves. The Arab regimes and their supporters are all too happy to slate Zionism, but they recoil from supporting real living Palestinians. Instead they focus on Zionism as a kind of free-floating evil that offends right-thinking people.
So for the Arab regimes the stigmatisation of Israel was a way of bolstering their own legitimacy. It enabled them to present themselves as principled opponents of Israel’s nefarious power. Of course, when the Palestinian presence threatened to radicalise other Arab populations, the local regimes were more than happy to use force to crush any opposition.

Inside Israel
To comprehend fully the allegations of Israeli apartheid, it is also necessary to be aware of Israel’s domestic debate. This is in part because foreign criticism sometimes use the Israeli discussion to add weight to their stigmatisation of Israel.
For a start, many mainstream Israeli politicians have warned that Israel is in danger of becoming or might already be an apartheid state. These include former prime ministers such as Yitzhak Rabin, Ehud Barak and Ehud Olmert.
Other Israelis have criticised Israeli intolerance in even more strident political terms. Take, for example, the recent television monologue by Assaf Harel, a popular Israeli TV host, comedy writer and actor. He savages Israeli policies and attitudes towards the Palestinians. It is hard to think of many American or British equivalents, most of whom are staunchly pro-establishment, who would stand up for democracy in their own countries. On the contrary, many Western comedians often make democracy the butt of their jokes. Just think of the derisory attitude so many British comedians took towards Brexit.
In any case, there is a key difference between most of Israel’s domestic critics and foreign opponents of Israel. Internal critics do not usually see Israel as uniquely evil (although there are a few exceptions). Generally their view is that Israel is trapped in a state of neither war nor peace. They dislike Israel’s occupation of the West Bank and its control over Gaza, as well as the consequences of this for Israeli society. They also mourn because they see no peace in sight. But they do not see Israel as a force of free-floating evil that marks it out from other troubled regimes. On the contrary, they generally resent the double standards to which they believe Israel is often subjected.

The West’s culpability
The discussion in the West of Israel as an apartheid state is of relatively recent origin. It is really only in the 2000s that it gained substantial momentum.
In April 2002, two British academics sent an open letter to the Guardian calling for a moratorium on all cultural and research links with Israel. By July, the number of academics supporting it had risen from over 100 to over 700, and they came from several countries. Since then the call to boycott and isolate Israel has gained ever more momentum at universities in Britain, the US and elsewhere.
In 2005, a group of Palestinian non-governmental organisations founded the Boycott, Disinvestment and Sanctions (BDS) movement. The organisation explicitly condemns Israel as an apartheid state. BDS makes clear that its use of the term apartheid does not depend on similarities between Israeli politics and South Africa under Apartheid. Instead it refers to the definition of apartheid set out by the 2002 Rome Statute of the International Criminal Court. This document in turn refers to ‘an institutionalised regime of systematic oppression and domination by one racial group over any other racial group or groups and committed with the intention of maintaining that regime’.
Even if that definition is accepted – and there is good reason to question it – it once again begs the question of why Israel is singled out. There are numerous examples of regimes around the world that arguably conform to that definition, yet they are not singled out. How about the millions of Coptic Christians in Egypt? Or the Shiite minority in Saudi Arabia? Or the Kurds in Turkey? Or countless other examples from across the globe of people being oppressed?
Nevertheless, support for the BDS movement has grown in the West. Israeli Apartheid Week has become an annual ritual in universities around the world. Israelis and those who support Israel are subject to sometimes violent harassment.
Meanwhile, the European Union has taken the view that products that are made in Israeli settlements must be labelled as such. Its arguments are that Israeli settlements are illegal under international law. Once again it is hard not to see a double standard in the EU’s moral posturing.
Of course, criticism of Israel in the West is not in itself new. Many in the past have made justified attacks on specific Israeli policies, as indeed some still do today. Historically, there was also a revolutionary leftist strand that saw Israel as part of a broader system of Western domination of poorer countries. However, the goal then was not to single out Israel, but, on the contrary, to put it into the broader context of Western intervention overseas. From that perspective, Israel was a relatively small cog rather than an all-powerful force.
In contrast, today’s self-appointed radicals often have an unhealthy obsession with Israel. The left, if it can still be called that, has come to see opposition to the Jewish State as one of its defining features. In its disorientated state, the left has picked up on the discussion of Israeli apartheid as a way of giving itself some sense of meaning. But in doing so, it has ended up adapting to anti-Semitic tendencies.
Of course the vast majority of Western radicals would balk at the idea that they might be anti-Semitic. To their minds, such a charge evokes images of violent Nazi thugs in black shirts. They fail to see that singling out Israel as an apartheid state is itself a form of intolerance. That is true even when the criticisms are made by the most genteel academics.
Fifty years since the Six-Day War, there are many legitimate criticisms that can be made of Israel’s treatment of the Palestinians. But identifying Israel as a uniquely malevolent force in the world should be identified for what it is: a form of Jew-hatred.

Spiked has published an essay by me on The Truth About Hatred of Israel. I will upload the full text at a later date.

My latest book review was published in the Spiked Review yesterday.

From the title onwards, Utopia for Realists is an exercise in sophistry. Despite the ample use of revolutionary rhetoric, the consequence of its proposals would be a hyper-austerity that would make the most hawkish free marketeer blush.

Let’s start with the book’s outsized claims. Rutger Bregman, a 29-year-old Dutch writer, says the work is ‘an attempt to unlock the future’. He puts his proposals on a par with the historical campaigns for democracy, the abolition of slavery and women’s suffrage. So he certainly appears to have no shortage of ambition.

Bregman also makes the welcome argument that there is an alternative to the way the world currently runs. ‘Things could be different. The way our world is organised is not the result of some axiomatic evolution.’

More specifically, his big idea is that everyone, however rich or poor, should have a right to a universal basic income (UBI) paid by the state. ‘Free money for everyone’, as he prefers to call it. In this he claims to be following in the footsteps of a peculiar combination of luminaries, from democratic campaigners (Thomas Paine, Martin Luther King) to free-market economists (Milton Friedman, Friedrich Hayek) and disgraced politicians (US President Richard Nixon). Bregman argues that such a programme would lead to lower inequality, less poverty, lower crime rates and higher economic growth. To substantiate his case, he points to empirical studies mainly done by economists.

For example, he starts his second chapter with an account of a research programme conducted on 13 homeless men in London a few years ago. A local charity gave the men £3,000 each in cash to spend as they wished. In Bregman’s account, the experiment was a resounding success. The lives of all 13 improved considerably in the year and a half after the experiment began. Moreover, the London homeless project saved a huge amount of money in terms of the costs of policing and welfare. This opens the way for his subsequent argument that a UBI could replace conventional social-security payments. In his view, the welfare state has become ‘a perverse behemoth of control and humiliation’. This argument has some truth to it although it understates the extent to which the welfare system in many countries has come to sap individual ambition and corrode social solidarity.

Bregman also claims that Westerners will be working 15-hour weeks by 2030. The developed economies will be so wealthy that there will be no need to work longer. Although he devotes an entire chapter to this topic, he does not make the connection to the UBI explicit. Presumably it is to help with the transition to a more leisured society.

In certain circles, Bregman has won widespread plaudits for his arguments. The Guardian has described him as a ‘Dutch Wunderkind’, and numerous intellectual luminaries have endorsed his book. Support for the idea of a UBI is also gaining ground in many countries. In that respect, Britain is relatively late to the game. Switzerland had a referendum in 2016 on a proposal to introduce the basic income, although it was rejected by 77 per cent of those voting with only 23 per cent backing it. There are also UBI experiments taking place in Canada, Finland, India, Kenya and the Netherlands. It has gained significant support in Silicon Valley, including from the likes of Elon Musk, a tech billionaire, and Sam Altman, who is the head of Y Combinator, a start-up incubator, and the backer of a UBI pilot programme.

At first sight, there might not appear to be much in Bregman’s proposals to object to apart from his own hype. Of course, most people would find the idea of governments giving cash handouts to billionaires outlandish. Other than that, it seems like at least a plausible proposal. But read Bregman’s book closely and it becomes apparent that what is really being suggested is a savage cut in living standards. He tries to play down these consequences, but the argument is clearly there for those who care to look. In this he shares much with the eco-modernists who use progressive language but are even more reactionary than mainstream greens.

Read Utopia for Realists closely, and it becomes clear that it favours the idea of a UBI precisely because it will encourage people to work less. Reducing the incentive to work is not an inadvertent flaw in the proposal, but its essence. ‘Some people may opt to work less, but that’s precisely the point’, he says. Bregman wants people to do less work precisely because their income will fall and in turn they will be less able to buy things. ‘Consuming less starts with working less’, he says.

Many of the favourite green dogmas are stated explicitly in Utopia for Realists. He says we live in a world of ‘overabundance’ and in the midst of an ‘addiction to consumerism’, where the working classes are duped by the elite into ‘false consciousness’. Bregman concedes that consumption could rise a little in the short term, but argues that the inevitably adverse effects would include pollution and obesity.

Of course, more leisure time – of the voluntary variety rather than the enforced – would be desirable if it could be achieved while maintaining high living standards. But a precondition for meeting this goal would be a more productive economy than exists at present. An economy that was a more dynamic could maintain high living standards, while allowing us to work 15 hours per week. This challenge of raising productivity is central to the discussion in Creative Destruction, by spiked contributor Phil Mullan.

But nowhere does Utopia for Realists address the West’s prolonged economic lethargy. Instead Bregman loves discussing small-scale academic studies, such as that on 13 homeless men in London, but nowhere does he discuss the West’s economic stagnation. On the contrary, the working assumption, made explicitly but played down, is that popular consumption must be slashed rather than increased.

Utopia for Realists professes opposition to austerity, but he has put forward a programme that would in practice outdo the most hardcore fiscal conservatives. He is yet another green miserabilist discussed as an optimist.

Daniel Ben-Ami is a writer based in London. Visit his website here. An expanded version of Ferraris for All: In Defence of Economic Progress is available in paperback.

Utopia for Realists: And How We Can Get There, by Rutger Bregman, is published by Bloomsbury.

This is the full text of my book review that was in the Financial Times last Friday.

At first sight it is hard to see how anyone could object. Many of the world’s richest people are devoting vast sums towards helping to solve some of the world’s most pressing problems. In some cases, the causes are politically contentious topics, but often they relate to areas of seemingly universal concern such as education and medical research.

One might think the contemporary obsession with economic inequality would only add to the appeal of the new philanthropy. After all, the world’s richest people are giving away their fortunes to benefit those who, by definition, are far worse off financially.

However, the critics are vociferous. They charge the new generation of philanthropists with using their wealth to exert an outsized influence on key areas of public interest. In effect, the wealthy are accused of undermining democracy. In addition, they are charged with setting up foundations and other organisations as a way of sometimes circumventing income taxes and estate taxes.

The Givers, by David Callahan, the founder and editor of the Inside Philanthropy website, is a balanced account of the rise of the new philanthropy in the US. Although the tradition of giving is long established, its exponents are more numerous and more influential than ever. He shows who the new philanthropists are, what causes they favour and what motivates them. He also considers the charge that the rising power of philanthropy is pushing ordinary Americans even farther into the margins of civic life.

Perhaps Callahan’s most striking finding is that, by many dimensions, the new philanthropists are a diverse lot. They come in a wide variety of ages, levels of educational attainment and preoccupations. Admittedly almost all of them are white males, but an increasing number are women.

Many do not fit the traditional mould of fiscal conservatism and support for the free market. On the contrary, more and more of them support what are often regarded as liberal causes. It is true, for example, that the brothers Charles and David Koch are well known for supporting conservative and libertarian groups. Less appreciated is that support for lesbian, gay, bisexual and trans rights has some wealthy backers. Take the Williams Institute, a centre for research into LGBT law and policy at the University of California, Los Angeles, which was established with a $2.5m gift from Chuck Williams, a wealthy donor.

Many other philanthropists see their giving as funding practical help, rather than making any sort of political statement. Their giving is determined by expert assessments of what might achieve the best results. The Bill & Melinda Gates Foundation is perhaps the archetypal example of this trend, with its focus on education, world health and community giving.

Diverse though they may be, the various forms of philanthropy and donor preferences have one thing in common: they all involve the wealthy to some degree exerting an influence on society’s priorities — for example, on which diseases to tackle or which forms of education they see as preferable.

The new philanthropy is on the rise at the same time as the US government appears less able to solve big problems or even efficiently manage routine services. For example, the number of charter schools — which have greater autonomy from state control than traditional publicly funded schools — is growing. Meanwhile, even public (state) universities in the US are increasingly dependent on philanthropic funding.

The net effect is that many ordinary Americans feel marginalised from civic life. Key decisions on how their communities are run seem to have been ceded to the rich in this new gilded age.

There is a risk of exaggerating the role of philanthropy in creating this sense of marginalisation. Indeed, Callahan is right to emphasise that even the billions donated by philanthropists are dwarfed by the scale of the problems they are attempting to address. The level of government spending also greatly exceeds philanthropic giving in many areas.

Callahan’s solution, at least in relation to the philanthropic sector itself, includes stronger watchdogs and greater transparency. But while such proposals may have merits, they fail to get to the core of the problem — that democracy seems to have lost its vitality in the US and indeed in Europe. The broader challenge is one of a democratic renewal that involves the people as a whole, the demos, in the political process.

The Givers: Money, Power and Philanthropy in a New Gilded Age, by David Callahan, Knopf

The Givers

7 May 2017

On Friday the Financial Times published my review of David Callahan’s The Givers: Wealth, Power, and Philanthropy in a New Gilded Age. I will upload the text in the next few days but in the meantime it is available to read here (you may need to register to gain access).

The ÖkonomenBlog, a project of the Initiative Neue Soziale Marktwirtschaft (INSM – Initiative for a New Social Market Economy) has reproduced my recent article on behavioural economics. It was first published in English on spiked then translated into German by Novo magazine.

Latest FT book review

11 Mar 2017

Yesterday the Financial Times published my review of JC Sharman’s The Despot’s Guide to Wealth Management.

Ever thought who the fellow customers of your bank might be? No doubt the vast majority are decent, hard-working people but could they include foreign leaders who have embezzled many millions from their impoverished countries?

Nowadays it is unlikely that a respectable bank would cultivate such a situation knowingly. But it can and almost certainly does happen through the lax implementation of regulations or the successful disguise of the sources of stolen assets.

A similar situation exists in relation to lawyers and property professionals. No doubt a small minority is involved in facilitating this vast siphoning of assets and some know exactly what they are doing.

JC Sharman, a professor of international relations at Cambridge university, is interested in the role of western governments and financial institutions in facilitating grand corruption. The “grand” here refers to political leaders and senior public officials. The Despot’s Guide to Wealth Management: On the International Campaign Against Grand Corruption is not about small-scale theft but about the proceeds of kleptocracy: government by corrupt rulers.

The book’s strength derives from its avoidance of the common error of reading history backwards; looking for the particular characteristics of the present in the past. He shows that, contrary to what many might assume, international corruption was not always a pressing concern. On the contrary, it was only in the 1990s that western leaders started discussing it in earnest.

In the previous period, up until the end of the 1980s, the main western foreign policy imperative was to counter the influence of communism. The west was willing to tolerate kleptocrats if the leaders involved were allies against Soviet influence. These included Ferdinand Marcos, president of the Philippines, and Mobutu Sese Seko, president of the Democratic Republic of Congo.

Of course western countries sometimes still turn a blind eye to dictatorial allies. However, the consensus is that such inaction is wrong even though some might regard it as necessary in some cases.

Since the 1990s, a plethora of institutions has emerged to help tackle grand corruption. These include international organisations such as the OECD and the World Bank as well as non-governmental organisations such as Transparency International and Global Witness. They have support from western governments and sometimes receive funding from philanthropic bodies such as George Soros’ Open Society Foundations.

Sharman is an ardent supporter of the turn against international corruption but is sharply critical of its implementation. He argues that, as far as it is possible to estimate, only a tiny proportion of such assets are recovered and the costs involved are enormous. There are several reasons for this lack of effectiveness, including realpolitik, the commercial incentives operating on banks and the inherent difficulty of international legal action.

Instead he favours an emphasis on alternative anti-kleptocratic measures to bolster prevention and deterrence. These include giving non-governmental organisations a greater role in tackling corruption and targeted financial sanctions.

Yet Sharman’s approach underestimates some fundamental challenges. For a start the west’s drive against grand corruption is, in a sense, not about enforcement. It emerged as part of an attempt to find a mission, or what Sharman calls moral leadership, with the end of the Cold War. Western politicians can all too easily make themselves feel good while winning points back home by using international conferences to denounce foreign kleptocrats.

Sharman also pays scant attention to the consequences of undermining the sovereignty of poor countries still further. It would appear that he suggests having a list of criteria which if met would designate particular countries as being systemically corrupt. The sentiment is no doubt well-intentioned and understandable but it should be recognised that it means subjecting national governments to external sanction.

As a result, poor countries would have even less control over their affairs than they do at present.

The Despot’s Guide to Wealth Management: On the International Campaign Against Grand Corruption, by JC Sharman, Cornell University Press