In an apt phrase Paul Mason describes the Trumpian assault on decency as "the eruption of learned stupidity". He pushes back against the usual rationalisations: "We are asked by liberal commentators to understand what motivates" the bigots in heartland America, but "I prefer a harsher form of sympathy called reason, logic and science".

It's said that the Trump "base" has been created by the politicians and that's a fair point. Yes, working families have been treated with contempt - most of all by Trump himself - but so have most people, because the American President and his puppet Republican senators have no interest in providing an alternative to the neoliberal policies that have exacerbated the prospects of every American who is not very rich.

But how does that justify the racist, misogynist rage that informs Trumpians? Their targets, fellow citizens who are darker skinned or female or Jewish or Muslim or gay or urban "elites" - or anything unlike themselves - are not the ones who imposed neoliberalism, and neoliberalism is the root cause of the alienation. That should not have been hard to figure out.

Money Is Not (Directly) The Problem

Trump households' income is an average $US5,000 a year more than households that voted for Clinton, and in 2016 working class people who had experienced economic hardship were mostly for the Democrats. As we have suggested previously in these updates, Trumpism is basically cultural. Trumpland is marked by higher rates of disability, earlier deaths, poor social mobility and ethnic isolation.

For the culturally dispossessed it is not hardship but economic fatalism that informs. The one obvious way to wean the "base" from their impotence and inexperience would be through an investment in infrastructure, public education, public health, regional development policies, and a drastic overhaul of fiscal policy. With Washington being what it is, these measures will not happen.

Mason thinks that the assault on civilised values that Americans are enduring is an attempt to reverse the ideals of the Enlightenment, when science and secularism gave us the means to escape poverty and ignorance. He rejects the view of too many white liberals, overcome with angst because they have inherited values of democracy and tolerance, that to appreciate the Enlightenment is to be Eurocentric. We might have inherited the insights of 18th Century Germany and Scotland, but these are not ethnically based. They belong to the world. Europe built on previous eras, notably the civilisations of China and the Arabs.

250 years later, in this 21st Century, all should be sweetness and light, and history should have ended in a globe dedicated to freedom. Human potential should have been realised in full. Instead the rich world is everywhere in confusion and, as Mason has to point out, most of the globe has a weak cultural basis for achieving the humanism he is advocating. Our common need, as citizens of Planet Earth, is for all of us to be free to become truly social beings. We are "not machines and we are not subgroups of humans".

So, it hasn't worked so well, has it, and the last few years in Europe and America, not to mention the rest of the planet, have been dismal. Mason's call is for humanism. That means putting the wellbeing of humanity at the centre of policy, an emphasis that the leaders we read about in the headlines oppose.

To explain where we are and how we got there, Mason looks back to a previous time when post-Enlightenment Europe became very dark indeed. As he suggests, the fascism of the 1930s, when Germany, Italy and Spain descended into barbarism, was a mobilisation of a lower-class mob to defeat the organised working class. America's present woes, Mason argues, is a comparable - but so far only temporary - alliance of the elites and the mob.

In the 1980s, when the US's Ronald Reagan and the UK's Margaret Thatcher headed regimes dedicated to breaking the power of working people, both their governments manufactured crises to roll back trade unionism and, as Mason puts it, to "break people’s belief in something better". The way today's deplorables greet any prospect of amelioration with a kneejerk and empty cynicism is the rotten fruit of the inculcation of neoliberal despair.

Instead of the overt violence of 1930s' fascism, what we have now is an alliance of Rightwing authoritarians and those whom Mason calls techno-literate fascists. The technology has changed, but the tactic has not. The permanent need of the authoritarian Right is to break social and political bonds so that they can create a new dispensation. Thatcher launched her assault by manufacturing a crisis with Britain's coal miners. Reagan did it by picking a fight with America's air traffic controllers. The Trumpians are doing it digitally.

Trump Wants Chaos

And he has a personality ideal for his purpose, even if he might not be able to disentangle his psychological and personal needs from the ideological endgame. Unlike him, his agents, more sophisticated and intelligent than the President, have clear ideas about what they want and how to get it. There's Kiwi Peter Thiel, at the centre of the conspiracy. He has pointed out that "I no longer believe democracy and freedom are compatible". There's the Vice President, Mike Pence, Trump's lapdog, whose ascent was enabled by grovelling before the Koch brothers, with their project to deliver America to fossil fuel billionaires.

There's Robert Mercer, the publicly anonymous force behind Cambridge Analytica (CA), a billionaire who believes that the damage that nukes might cause has been exaggerated; that radiation made Hiroshima survivors healthier; that African Americans were better off before the Civil Rights Act was passed; that climate change will improve life. There's Steve Bannon, Trump's chief source of ideas, a man who has mused about the possibility of provoking another civil war ... You get the picture.

Mercer's CA is happy to report that "[w]e collect up to 5,000 data points on over 220 million Americans, and use more than 100 data variables to model target audience groups and predict the behaviour of like-minded people". It's all being done in the interest of what CA insiders (accurately) call "anarcho-totalitarianism". The project is to break down existing post-Enlightenment norms and replace them with a dictatorship of the billionaires and their machine tools. They have lucked into Trump, the ideal useful idiot to be the front man.

Mason's analysis comes along at the same time as Soshana Zuboff and Roger McNamee have linked what Zuboff dubs "surveillance capitalism" to the ideology of neoliberalism. (I reviewed both these in Watchdog 151, August 2019). The anarchic individualism of the overseers, uniting economic need with technological dominance, and their success in subjecting us to the needs of "market forces", has been great for the profits of banks and the social media monopolies, if not for the economy as a whole.

Between 2000 and 2010 productivity growth in the US has actually gone downhill, quite a feat in this era of computing genius. Direct financial policy as expressed through budgets has done little to help. In what reads as a description of the self-congratulations of the John Key-Bill English regime, Mason characterises neoliberalism as having "relied on credit, growing population, rising education and urbanisation to fuel growth".

There's the "learned stupidity" of the deplorables and there's the "learned stupidity" of their nemeses, academic philosophers and liberal academics. Mason writes as a materialist, meaning that he believes reality is an objective fact, independent of human consciousness, as opposed to a subjectivist view, which sees the external world as a projection of the human mind. A popular riddle is to ask: If a tree falls in the forest and we do not hear or see it, has it happened?

Mason would say that it's not about us; the tree is responding to certain physical laws of sound. Outside the undergraduate seminar room everyone is a materialist. Enlightenment science enabled humanist reason to study how the world worked instead of having to shrug and attribute everything to gods. Now, centuries later, Mason accuses "information" as having replaced the gods as "the guiding intelligence of the universe". In the beginning is information.

Mason reserves his deepest contempt for the latter-day subjectivism of postmodernism (pomo), modernity being the two centuries that followed the Enlightenment. Pomo got beyond all the science and logic and hope as exemplified in, for example, Galileo and Shakespeare and Immanuel Kant and Beethoven. What did this quartet have in common? Exactly. They are all long dead white men who therefore "privileged" their socially advantaged perspective.

From the 1980s and 90s, not coincidentally the decades when neoliberalism also peaked, pomo academics told their students that all science is socially constructed belief. The absurd outcome is that the epistemology of science is (was?) being taught by literary theorists and media studies theorists while science classes carry on doing science.

Mason thinks that, although the postmodern critique says it wants to root out racism, sexism and patriarchy in science, it gives a free run to "atomisation and frenzied consumption", which are seen as inevitable products of the contemporary world. This insight can be taken further. By highlighting the symptoms of repression and privilege in their rhetoric, while taking no action to change the society which enables them, the "irrational Leftists" annoy and frustrate. The culture wars splutter on amid the confusion of all the contesting tribes. Factions are formed but no solutions are on hand because none of the belligerents thinks a better world is either possible or desirable or morally acceptable.

Postmodernism holds that people should not think they can act to change any aspect of the physical or social worlds. In the words of one "theorist", what pomo is pleased to sneer at as "grand narratives" (otherwise known as the scientific method or historical analysis) lead "to gas chambers and gulags". Mason misses making a good point when he fails to mention that this is an almost exact echoing of Friedrich von Hayek*, with his worship of the "market", whom Mason is right to have identified elsewhere in his book as the great prophet of neoliberalism. *Friedrich von Hayek (1899-1992), a reactionary economist who opposed the Welfare State and championed market forces. Ed.

Engendering Political Passivity

Mason does suggest that the inevitable consequence of this article of faith was to engender political passivity - and, when things go wrong, a know-nothing cynicism (for a clear example of how the elites work to make people stupid and passive, look at the Republicans in the US over the next 12 months. They will do little else).

Postmodernism reckons that people should not cling to the Enlightenment ethos that claimed humans know any better than animals or plants. As our minds produce the world, there can be no cause and effect and absolutely no claim that Aristotle, say, should command our respect any more than a rabbit should. Mason paraphrases, "[a] human, a frog, an electric grid, a trash can and a Lego brick have equal claims to know about things".

Mason outlines some of the earlier influential theorists whose musings anticipated the pomo moment. Henri Bergson taught that matter has an immaterial "vital impulse" that pre-existed the world. Mason reminds us that vitalism appealed to fascists and anarchists as it freed them from bureaucratic systems. Bureaucracy has long been an easy punching bag.

In the swinging 1920s Oswald Spengler's treatise "The Decline Of The West" was all the rage with its call for the overthrowing of "the tyranny of reason" and its replacement by notions of destiny, fate and intuition. These would promote what he called a "second religiousness". And James Jeans, a British physicist, described the universe as "a great thought". That's not an insight that ever revealed itself to Albert Einstein or Stephen Hawking.

Pomo made relativism a secular religion, whose first commandment is that nothing is true and everything is relative. With all the facile insults that are available to pour abuse on others, and when individuals are encouraged to define themselves as being in oppressed groups and to see others as enemies, there can be no sense of social solidarity.

This means that there can be no sense of universal human attributes - and therefore no human rights. "There is no such thing as society", the neoliberal (and postmodern) Margaret Thatcher notoriously explained (I titled my first piece on the significance of Donald Trump, "The Postmodern President". It is in Watchdog 144, May 2017).

In 1986 - when Thatcher was in full flight - an Ivy League feminist, Sandra Harding, along with countless others, stated the one core aspect of pomo obsession by dismissing science as "sexist, racist, classist and culturally coercive". Had she been describing her President, Ronald Reagan, she might have started a positive discussion, but she was not. She was attacking others in academia, who are often progressive (her being well paid at Cornell might be seen by some as compromising her thesis).

In academic publications there are vast screeds of pomo nonsense, but Mason's examples are as indicative as any. There's Bruno Latour, a French sociologist who opined that a compatriot was above himself in thinking he was in some way superior to milk: "Pasteur can be understood as an event occurring to lactic yeast". Animals have the right not to be thought about by humans as we assume superiority.

Katherine Hayles, a literary critic, might have surprised any humanist readers who were actually lovers of literature when she explained that "[a] historically specific construction called the human is giving way to a different construction called the posthuman". Her title: "How We Became Posthuman: Virtual Bodies In Cybernetics, Literature, and Informatics". And Patricia MacCormack, in her "Posthuman Ethics: Embodiment And Cultural Theory", wanted us to know that "the absence of the human is the most vital living yet to be accomplished".

What happened to the Sandra Hardings of America? Do they lecture on Trump? And if they do, do they endorse his irrationalism? Mason says that Latour subsequently recanted, admitting he had been wrong to advocate irrationalism because it eventuated that climate change deniers based their stance on a repudiation of rational thought. Latour thought his mistake was to think that "the only way to critique matters of fact was to move away from them". He did not already know of climate change deniers or the tobacco and oil industries with their decades-long history of denialism?

Mason calls them the "irrational Left". They might only be poseurs whose direct influence does not reach beyond the campus but, sadly, they echo their antithesis, the irrational Right, the tiny bands of neo-Nazis who hate learning of any kind. The alt Right and the haters actually do define themselves as being the things that pomo despises: they are white skinned and almost all male, doing all they can to validate the enemies of sexism and racism and the rest. For them there are nothing but irreconcilable identities.

The neo-Nazis bang on about "cultural Marxism", which they see as being the philosophy of liberals, most particularly liberals like the postmodern academics, who are accused of subjecting white men to the whims of everyone who is not white and male and full of unlearned stupidity (though it's unlikely that the average thug sieg heiling in the streets of America is aware of postmodernism, just as it's safe to generalise that no Nazi thug would have read Marx).

Snowflakes

In a curious chapter entitled Snowflakes, Mason mentions that the term was coined to patronise the generation that has been accused of being "easily hurt" and overly preoccupied with their identity. The metaphor is based on the observation that the snowflakes we experience in winter all look the same but are said to be endlessly unique. Mason wants to defend the millennials from such a put down and does so by talking up the beauty of (actual) snowflakes and by asserting that they in fact have an identical and beautiful structure. This can't be saying that the (metaphorical) snowflakes are in fact identical - the reverse of what he thinks.

The apparent contradiction is elaborated: human snowflakeism "can be a source of strength", and when the snowflakes do fight "this determination to begin from the self, and defend the self, gives their resistance a hard, granular, irreducible quality". This optimism is surely borne out by Extinction Rebellion. The most pressing issue facing the planet is at last seeing real solutions being advocated in a spontaneous impulse of the snowflake generations.

But the term, insulting as it is, is not helpful, with its judgmental tone. All of us are shaped by our environment, and the society that the Extinction Rebellion generation has inherited is the residue of neoliberal politics, postmodern ideology, and digital hegemony, the trio of forces that have created all the fragmentation. So, of course, there is more individualism and self-regard around than previous generations (of conformists) have been accustomed to.

Science fiction anticipated what Mason sees as the ultimate challenge to humanism. What we call genetic engineering has introduced us to the possibility of a future in which machines rule. He opens his discussion with a chilling quotation. In 2011 a certain Olaf Stapledon thought that once machines could do everything a person could do, humanity might as well move on: "We must produce an organism which shall be no mere bundle of relics left over from its primitive ancestors and precariously ruled by a glimmer of intelligence. We must produce a man who is nothing but man. When we have done this, we can... safely surrender to him control of all human affairs".

As we've seen this ideology has appeals for literary "theorists". According to Mason there are two factions within transhumanism. The more moderate version does not think we should disappear. It's content to ask machines to perfect us physically and mentally and then leave us to get on with things, but of course machines with that power might well prefer to swap a role as servant to that of master.

Goal Is To Eliminate Human Workers From Production

After all these horrors Mason gets to his conclusion, a proposition he elaborated in a previous book. "Post-Capitalism" (which I reviewed in Watchdog 143, December, 2016) argued that neoliberalism's motive has not been to cut public spending or privatise or drive production offshore. These are better seen as the consequence of its essential purpose, which is to eliminate human workers from production. That's the means - and has been since capitalism, the Enlightenment's evil twin, geared up following the Industrial Revolution - by which profits can be maximised.

The information technology (IT) revolution, which Mason has identified as dating from around 1990, is based on horizontal structures or networking, whereas industrial capitalism was hierarchical. This thesis is the organising principle in "Post-Capitalism", where Mason argued that networked relationships could subvert capitalism from within.

This approach is assumed in "Clear Bright Future", the post-hierarchical economy being another way of describing the trends under review here. His big idea in both books is that information technology and networked individuals can create islands of abundance and self-control inside capitalism, and go straight to the goal of a classless abundant society.

Nice try, but no, monopoly capitalism is untouched by this, and the ownership of the means of production is not threatened by people at home tapping away on their keyboards, and especially not when the manipulative social media giants like Facebook and Google are the hugest corporations of all time. Individuals like the author and the snowflakes behind Extinction Rebellion give support to his optimism for sure, but the alt Right and Cambridge Analytica are also networked.

The term "resistance" conjures up thoughts of partisans risking death by sabotaging Nazi occupiers, but any resistance to present day consumer society is necessarily less than heroic. Mason's examples of what we might do to oppose the tech and IT giants are to buy Fair Trade coffee and to refuse to use automated checkouts, gestures which are scarcely new and will not challenge corporate hegemony.

Mason's suggested boycott is curious in that his whole thesis is that digital age technology is ubiquitous, meaning jobs will be continually shed as machines replace humans, freeing work from drudgery, and offering the chance of an enhanced humanity. So why this tiny, anachronistic and contradictory gesture which does not resist Facebook or Google?

Nowhere else does Mason take on global food producers or retailers - or agribusiness, or the fossil fuel climate deniers, or the "free trading" elites who make the globe a sweatshop of exploitation. The omission is not because he would wish to leave them alone. His opposition to neoliberalism is strong and constant (see, for instance, my review below of "Capital"). It’s just that there's no space for it here.

Needs A Bigger Conclusion

But after a discussion about the nature of what it is to be human, we needed a bigger conclusion. If the automatic checkout is convenient - and shoppers now can choose whether they pay a machine or a person, and do so without being provoked to Masonic anger - not many will take up his suggestion. This might be a small example, but the book as a whole often loses perspective and focus.

There's a chapter on China under Xi Jinping, possibly because China threatens to be the world's worst surveillance state, but, if so, that is not made clear. In the same vein, the sections on the many influential thinkers on display seem often to reflect the author's foibles as much as their relevance to his theme.

Mason's call is for networking to challenge capitalism from within, but these are individual actions, lacking the power of organised mass protest. There is nothing wrong with Mason's proposed remedies - regulation of the digital giants, anti-trust legislation, and transferring control of data from Mark Zuckerberg and his mates to his customers, but how will it be achieved? Others have taken this on more directly (see my reviews of "Zucked" and "The Age Of Surveillance Capitalism" in Watchdog 151, August 2019).

And why assume that networked individuals will manage any better in the future than they do now, when the likes of the malignant Cambridge Analytica and the amoral Facebook manipulate whole nations? The trend within digital society has been to tribalism, irrationality, narcissism and isolation, not to human solidarity. Mason is brilliant, progressive and a champion of his species, the human being. But Donald Trump and Vladimir Putin and Steve Bannon and their ilk are also - biologically anyway - human.

CAPITAL IN THE 21st CENTURY
A Film By Justin Pemberton, 2019

THE PIKETTY PHENOMENON
New Zealand Perspectives, BWB Texts, 2014

Justin Pemberton, a New Zealander, says he started work on his film before checking with Thomas Piketty, whose landmark book he was dramatising. Apparently, several other people were also planning to make movies based on the book "Capital In The Twenty-First Century"* but Piketty was happy to go along with Pemberton. It might seem a difficult prospect to entertain with a 700-page treatise on economics, yet the result on screen is absorbing.

*Piketty's book was analysed in detail by Bryan Gould in his article "Capitalism Produces Greater And Greater Inequality: Ever Increasing Concentration Of Wealth Among Owners Of Capital", in Watchdog 136, September 2014, and reviewed by Jeremy Agar in Watchdog 137, December 2014. Ed.

Wider Perspective Than Mere Economics

Part of the reason for the success is that Piketty's original drew on wider perspectives than mere economics, by illustrations from literature and history, so Pemberton already had visual references to enliven the story. Both author and director draw on a historical perspective to make the story accessible to a general audience. Besides its central theme of the dangers arising from the world's inequitable distribution of wealth and opportunity, the film is a brief history of capitalism.

Piketty is French, but that is not necessarily why the story starts with the French Revolution of 1789. The significance of the date is that it marks a start of capitalism and the replacement of feudal power based on the ownership of land by urban manufacturers and industrialists. Before 1789, Piketty argues, the masses of people who toiled on aristocrats' estates had no chances of alternative ways of life (there are also illustrations from across the Channel in Britain).

The revolutionaries in Paris might have ousted the great lords and ladies but they did not bring joy to the peasants, who swapped hard toil on farms for hard toil in factories. Capitalism brought about a world based on money and the power that money allows. "Capital" is "accumulated wealth used in accumulating more", (Oxford English Dictionary) and for centuries it has been capital that rules.

Before Piketty, there had been another "Capital", the even denser analysis by Karl Marx. The allusion to Marx is deliberate - though while Marx thought that capitalism was doomed to be overthrown by a socialist revolution, Piketty advocates only that capitalism be tamed by easing the extremes of wealth that it has created. One of Piketty's most important observations is that the trend to inequality is the default setting. Until recently it had seemed otherwise. For 30 years from 1945, in NZ and other comparable places, average people were faring better and extremes of opportunity were being eased.

Piketty's vital finding is to show that this was an exception to the rule, brought about by the destruction of wealth following the Great Depression and World War 2. Now normal disservice is being resumed. Talking heads include Bryce Edwards from Victoria University; Joseph Stiglitz, an economist we have reviewed several times in these pages, and Paul Mason, whose recent work is reviewed above. All three enthusiastically endorse Piketty.

It could be an opportune time to look at a BWB Text that came out five years ago. "The Piketty Phenomenon" contains contributions from 15 New Zealand observers. All welcome Piketty's analysis, all but one of them without reservation, and nothing that has been done or said since the original publication will have changed any minds.

Several of the writers point out that Piketty has not been as big an item in NZ as he has been overseas. There seems to be a consensus as to why this is. NZ is a small country with a wide-open economy, so it is not going to set the pace when it comes to forming or implementing policy. As always, we tag along behind the big boys. This might be one of the reasons economic policy is seldom a big topic here. Another reason is that, since the ministrations of Rogernomics and then Ruthanasia, economists have been a widely distrusted lot. Unfortunately ignoring them does not help the necessary response, which would be to challenge them.

Bernard Hickey enjoys himself dissecting John Key's remark that the Helen Clark government was subjecting NZ to "Communism by stealth", a nonsense which escaped the ridicule it deserved because Key was the sort of bloke with whom you'd want to have a beer. Between 1999 and 2008, when Labour last was in office, the minimum wage went up a stealthy 71% and the adult minimum wage went from $7 an hour in 2000 to $14.25 in 2014 (when the cost of living rose by 41%.).

Hickey says that New Zealanders are ("in general", it needs to be qualified) healthier and better educated than Americans. If this indicates anything, it is that the American model, despite benefitting from great advantages of total wealth and technology, has failed, yet no contributor directly points out - perhaps because they do not need to - that it is from America that we have imported neoliberalism, the ideology which remains unchallenged in all the "Anglo-Saxon" countries.

Gareth Morgan reminds us that in 2011 he came out with a book advocating a wealth tax, a proposition whose time has come now that Piketty has put it front and centre. Piketty estimates that for a decent degree of cohesion and equality to be achieved within current settings, the incomes of the very rich would need to be taxed at 80%. All agree that this is not about to happen - though it was not so long ago, in fact during the now lamented post-war era - that top rates like that were the norm.

Tax Unearned & Inherited Wealth

The essential reform would be to tax unearned and inherited wealth in whatever form it takes. Morgan and Piketty offer similar numbers. The tax could kick in at 1% on wealth over $1.5 million and at 2% on total assets valued at over $5 million. Besides being morally acceptable, this switch would reward production rather than, as now, rewarding those who lucked out through their parents and grandparents. The first, easier measure might be to shift the burden of taxation from goods and services tax (GST), the regressive consumption tax - very high in NZ.

Max Rashbrooke, who has provided recent discussions on the evils of inequality, reminds us that in the 1890s, before the Seddon Liberal government broke up the big squatters' estates, wealth in NZ was distributed as unequally as it had been in the France of Louis XIV (and the country underwent a depression). The one per centers of the day commanded 60% of all wealth. By the 1930s their share had been reduced to 30%, a big enough take, but one that 50 years later zoomed back up thanks to the Lange-Douglas outfit.

The one obvious harsh effect of inequality is the shrunken prospects for the poorest, whose lack of opportunities increasingly resemble those of the French peasantry with whom the film opens. Rashbrooke cites 2003 numbers, when the lower half of all New Zealanders had 5% of national wealth. For the poorest the number was negative, meaning that their debts exceeded their assets. Policymakers need to be aware that, within this statistic, the rate of inequality within Maoridom is twice that of Pakehas.

Donal Curtin, from BNZ, adds another consideration: growing inequality is not a concern, he suggests, because NZ is not the polarised place that the US is. We have little to worry about. At first glance he looks to have a point, with NZ occupying a middle ranking when it comes to measuring inequality among Organisation for Economic Cooperation and Development (OECD) economies.

If he was to update his contribution to 2019, Curtin would surely add that a Credit Suisse Wealth Report, which should be well informed about such matters, reports that NZ is the fifth wealthiest country in the world. This is an astonishingly high ranking, which initial response has put down to over-priced houses, especially of course in the big Auckland market.

Let's put aside the fact that, by tacitly accepting that the US is unhealthily unequal, Curtin is concurring with Piketty. The other most unequal countries in the OECD are also the poorest and least egalitarian socially. Unequal incomes, misogyny, bigotry, violence and a meagre space for public expressions are inevitable partners in squalor, guaranteeing inequitable outcomes.

So, Curtin's thesis is reduced to the proposition that we are not as badly off as we could be and so must be happy with the way things are. This is scarcely a vote of confidence in the neoliberalism that has forced the inequality, but neither is it as obvious a truth as he would have us think. The official statistics are derived from pre-tax income, but it is post-tax income that indicates what money is available to spend, and here NZ fares less happily.

NZ Notorious As Enabler Of The Rich

Our tax rates on the wealthy are considerably lower than the rates in the countries with which we compare ourselves - including the US. Within the circles who pay attention to such matters - mostly people overseas - NZ is notorious as an enabler of the rich to hide their assets in family trusts and by easy rules on switching money offshore. Several contributors make the point that no-one knows for sure the actual state of play because not enough data is recorded. The room for ambiguity that results blunts any appetite for change.

Echoing the assumptions of the prevailing orthodoxy, Curtin thinks that economic growth and equality of opportunity are more important than worrying about inequality. In this familiar but erroneous formulation it is assumed that the rising tide will lift all boats, with the implication that classical and neoliberal measures make everybody better off (they do not), while progressives want equal outcomes, meaning they want to make everyone the same - as in North Korea (they do not). To get closer to reality we need to reverse the maxim. In real life no progressive wants to deny opportunity. It is inequality itself that does that.

Curtin gives the example of poor children in south Auckland who deserve better (they do), whose reduced opportunities he puts down to "soak the rich" governments. He does not explain how the way taxes are imposed creates urban poverty. And the rich are in reality treated gently. The one real cause of deprivation, Rogernomics and Ruthanasia, is not mentioned.

Despite all this possibly reflex musing, Curtin joins other critics in deriding the "grotesquely high" pay given to senior managers, and he admits to favouring a wealth tax - the one essential Pikettian reform. Not just that, but the Welfare State (the remnants of which help Mangere from tottering into chaos) is "one of the great advances of civilisation of the last century".

And, so, in the end all the contributors to the NZ account agree with Piketty that the essential fact is that inherited capital increases at a faster rate than wages and growth in the working economy and that this is both wrong and fixable. Piketty's findings are that capital tends to increase by around 4% a year while the earning economy does so at a rate of 1-2%. It is his detailed analysis of this situation that is central to understanding why "Capital" has aroused the huge interest that it has.

It's not just Facebook that has the power. Google gathers the most data, while YouTube "has become the nexus for recruiting and training extremists. It is home to countless conspiracy theories. It hosts age-inappropriate content targeting little children" and teenagers, leading to an epidemic of sleeplessness, anxiety, and a lack of concentration (though there is nothing explicitly in either account to do with online bullying). So, we have a new word. Nomophobia is the fear of being separated from your phone.

You don't have to be an economist or a politician to grasp the essential significance of this. It means that if governments are ideologically pragmatic and stick to the centre of the road, the rich will continue to get richer, both absolutely and relatively, and middle and lower-income recipients will slide further behind. Simple arithmetic suggests that two generations on the gaps will have more than doubled. So, to enact budgets that further advantage the rich would be absurd, and to allow the status quo to meander along would be irresponsible.

Timid Tinkering Will Worsen Inequality

However it's reasonable to expect that, even with governments that are content to continue with timid and pragmatic tinkering - as has been the case in NZ - the trend to inequality will deepen as the reach of the very rich, their lobbies, and their hegemonic hold on public assumptions, will become ever more entrenched.

The film's coda shows zombie-like lost souls shuffling along the streets of Los Angeles. It's 2050 and it resembles 1789. Manufacturing jobs have all gone to wherever China's or Bangladesh's cheap labour successors have emerged. In California's biggest city there's little for people to do to earn a crust unless they're the lowest paid in personal service jobs like tending the old in rest homes or cleaning mansions. The millionaires and billionaires in Silicon Valley, whose agents control the state government, will never venture there unless Beverley Hills and Hollywood can carry on behind walls and security guards. That's if the fires of climate change have not already driven them away.

A COMMUNIST IN THE FAMILY
Searching For Rewi Alley
by Elspeth Sandys, Otago University Press, 2019

In China there are numerous statues of Rewi Alley (1897-1987). One of the many photos in Elspeth Sandys' intriguing account of her journey of discovery of the man she had thought to be her uncle is of the current President Xi Jinping's father, who was a big shot in the Red Army. Alley in fact knew all sorts of important people, Mao Zedong and Zhou Enlai among them.

In the country of his birth there is but one memorial to him, in Springfield, inland from Christchurch, where Alley lived for the first month of his life. It is one of two sculptures there, the other being of a doughnut. For the next nine years the family lived a few kilometres away in Amberley, where the only public monument is to another fiery tempered Cantabrian, Charles Upham (but elsewhere in the narrative the Alley memorial joins it, having been absent-mindedly transferred to Amberley).

Having a Communist relative would have been an embarrassment to a family which seems to have been more or less a typical example of provincial New Zealand. A brother was an All Black; a relative trained Phar Lap. It was certainly not to Sandys' father's taste. He told her early on: "Your uncle's a filthy commie". Neither would Alley's own father, a harsh primary principal, have been keen. Sandys, who has a long record as a novelist and memoirist, wanted to know what made Uncle Rewi tick? What did he believe? Would she like what she found?

An early discovery was that she had been adopted so Rewi was not a blood relative after all. This might have helped the author by providing a degree of separation, a lessening of direct personal involvement. At any rate the result is a thoughtful, nuanced discussion. She has no trouble being objective about a very complex man.

From Shanghai OE To Gung Ho Cooperative Movement

After Amberley, Dad transferred to Christchurch. Rewi left school in the middle of World War 1 and was soon fighting in France, where he was wounded in battle. Always restless, back in NZ Rewi was a partner in a scrubby Taranaki farm which was never viable. When Alley went to China politics had nothing to do with it. It was meant to be an OE thing. In Shanghai he was a fireman, then a factory inspector. The latter must have been a depressing episode: in a city run by unaccountable Europeans, where the locals were virtual slaves, a factory inspector's job was surely a mockery, and it would have been what tipped Alley into activism.

Shanghai in the 1920s was notorious for its wild expats, but it seems that Alley lived moderately enough. China attracted a generation of adventurous Westerners. In 1938, for instance, in Wuhan they included Peter Fleming (brother of author Ian Fleming, the creator of James Bond, Agent 007) and writers WH Auden, Christopher Isherwood and Ernest Hemingway.

Meanwhile, the rest of the country was chaotic. Warlords, no more than local bullies, ruled some parts, so the Nationalist Kuomintang (KMT), under Chiang Kai-shek, formed an alliance with the new Communist forces supposedly against the warlords. Chiang's real enemy came to be Mao. After Japan added to the mess by invading Manchuria in 1931 - and bombing Shanghai the next year - Chiang let it be known that while the Japanese were a "disease of the skin", the Communists were a "disease of the heart". He unleashed his White Terror, what he was pleased to call "the holy work of extermination" of his compatriots.

Alley's huge reputation is based on what he called Gung Ho, translated as Work Together, a cooperative movement that grew to 500,000 different factories*, turning out goods for the army throughout unoccupied China. Gung Ho was conceived by a study group in Shanghai. Besides Alley, the group included the American Edgar Snow and a frequently mentioned New Zealander, James Bertram.** Many of the factories were in caves. A visiting Geoff Chapple (who wrote one of several previous biographies of Alley) saw in him "the god of digging the long drop where it could not contaminate the well water". Chapple was talking of Alley's inexhaustible pragmatism and resilience.

* The 500,000 figure presumably totals all factories, including those established in the 30 years after 1942, during which Alley was removed from the movement by Mao, whom Sandys suggests was "jealous". Rewi had been too successful. The number of factories in 1942 is put at 100,000. ** "James Bertram (1910-93) was a New Zealand Rhodes scholar, a journalist, writer, relief worker, prisoner of war and a university professor", Wikipedia.

For ten years from 1966 the Cultural Revolution raged. Contact with foreigners was forbidden and apparently Alley's life was in danger. It was only Zhou's intervention on his behalf that kept him out of trouble. Sandys sees a parallel with the French Revolution of 1789, when the Jacobins unleashed the Terror. In this comparison the so-called Gang of Four played a role comparable to that of the Jacobins and Mao that of Robespierre. After they were ousted, Alley, who Sandys says hated Mao, was reinstated in his Gung Ho.

Both Celebrated & Spied On

You'd think that in the West the news out of China would have rendered Alley as politically incorrect, too dangerous to know, but his visitors in the 1970s included Pierre Trudeau, Gough Whitlam and Ted Kennedy. It seems that attitudes towards China fluctuate according to circumstance. There's the Cold War China, the Red Peril China that so alarmed the US after Mao turned up in Peking (as it was then called) in 1949.

And before that there was the racist concept of "yellow peril" China. But the China which attracted liberal politicians and intellectuals was the China of freedom fighters resisting corruption and exploitation. And for liberal intellectuals it always helps if the oppressed you are championing are exotic. This ambivalence played out in Alley's four visits back to NZ. From the 1960s on he was followed by the New Zealand Security Intelligence Service - the State spies - and for a while the NZ Broadcasting Service stipulated that his name never be mentioned on air. Yet both before and after this time, Alley was often celebrated, and in surprising ways and by unlikely people.

In 1948, for instance, the UK government wanted to confer a knighthood on him and a Foreign Office man travelled by sea and then by truck across China to get Alley's agreement in person. It did not happen, as the Gung Ho founder thought the offer "a ridiculous thing". So, it is not surprising that the Norman Kirk government in 1970s' NZ invited Alley to give talks or that the next Labour PM, David Lange, dubbed him "our greatest son". But who in NZ said he should be knighted? Don Brash, that's who. And we read that Alley got on just fine with Piggy Muldoon.

Matters Chinese were always throwing up surprises. One great friend of Alley's was the wife of the thug Chiang Kai-shek. Support in general was widespread. Funding for the cooperatives flowed from the USA and other Western countries. In NZ CORSO (Council of Organisations for Relief Services Overseas) was a significant ally. Alley had helped establish the many China friendship societies which helped maintain public awareness.

Wouldn't Have Liked Capitalist China

Alley's dislike of Mao would have played a part in his initial support for Deng Xiaoping when he freed up the rules to allow some private property. Sandys, though, is sure that her man would not be at all happy with how China is going these days, posing rhetorically the question: Is Xi anti-corruption or is he anti opponents? The answer is surely the latter. Sandys offers a spectacular statistic: the 200 richest Chinese have wealth totalling $NZ720 billion. All of them are members of the Communist Party.

Alternating with her account of Rewi's life, Sandys relates the story of her recent family trip to China, where they trooped around sites which were important to their famous relative. There is more ambivalence here too. The locals, she says, were unfailingly friendly and polite, but exhausting too, always hurrying them along to the next exhibit and the next statue. The family spent many days on a bus, bumping along a huge country, while guides sang "Three Blind Mice". You sense some disappointment that the reality of "long drop" Rewi has been sanitised, sometimes to the point of obliterating any memory. And she admits to having tired of the food.

In this she was like Rewi himself, endlessly (privately) conflicted but always fascinated. China, she says frequently, is so complex that it is always surprising. For Rewi, she concludes, China was an "essential harmony of body and spirit, of yin and yang, beginnings and endings, life and death, Confucianism, Taoism, Communism, Buddhism, Christianity". Sixty odd years ago the influential historian Arnold Toynbee was widely derided for putting Chinese civilisation at the centre of global culture. Sandys is suggesting something along these lines, but, unlike Toynbee, doing so modestly and implicitly.

He Wasn't Ideological

The themes of ambivalence and complexity extend essentially to Rewi Alley himself. Much of his motivation was negative. He worked with the Communists not out of any theory or doctrine but because they sprang from the roots of daily life. And they were not murderous warlords or torturing Nationalists or exploitative Europeans or invading Japanese. Most of all they were not imperialist Americans. It was not until Alley visited a ruined Korea shortly after its war that he became confirmed in his hostility to US policy. US power was the biggest bully, certainly in more recent times.

So, there was never any sense that the commie in the family was ideological in the usual sense that the epithet suggests. There is no mention of his reading Marx and the boys and no instance of him pondering dialectical materialism. He did not mind being seen as a Communist, but to him it connoted a fight for better living conditions for an impoverished society (at that time back in NZ, children who did not tuck into their porridge were enjoined to think of "the starving millions". At least I was). To be a commie might have been a disgrace, but to stick up for a fair go - which was Alley's ethic - is core Kiwiana. And what better example in our national history of number-eight-wire thinking?

There's a final ambivalence, the answer to the author's original motivation. Just what did she conclude about her "uncle"? He was impatient, bad tempered and a poor, if prolific, poet. She touches on the question of whether Alley was gay, a matter which recent comment on the book has featured. She does not reach a conclusion except to say that there is no reason to think it relevant to understand his life. What matters is that Lange was right. "Uncle" Rewi, with all his eccentricities, was a great man.

REVIEWS

- Greg Waite

THE BROKEN ESTATE
Journalism And Democracy In A Post-Truth World
by Mel Bunce, Bridget Williams Books, Wellington, 2019

This book is critically important for two reasons: New Zealand's media is in really bad shape by world standards - and nobody is noticing. Sure, we grizzle, but grizzling doesn't help understand why and what to change. "The Broken Estate" gives a thorough analysis for just $5/$15 (ebook/book at).

Author Mel Bunce worked at the Otago Daily Times and now teaches journalism at City University in London. She points out that New Zealand is particularly vulnerable to the decline of commercial journalism because we spend less supporting independent media. Australia spends about three times as much per capita as New Zealand, in the UK it's six times as much, and we are almost alone in not having a not-for-profit TV channel.

Advertisers Shift From Print To Online Media

The principal cause for today's reductions in the volume, coverage and quality of journalism is the shift of advertising revenue from newspapers to USA-based Internet corporations Google and Facebook, who don't fund journalism and don't pay their share of taxes. Stuff reported in 2019 that Google paid only $393,000 in tax in New Zealand in 2017, despite revenues in the hundreds of millions, while Facebook paid only about $43,000. Google and Facebook now collect 60% of all digital advertising in the United States and United Kingdom and 50% in New Zealand.

The impact of these funding losses on frontline journalists has been brutal, Dr Bunce says. As circulation figures and advertising revenues fall, reporters' jobs are cut and the work they are expected to do is increased, reducing overall quality and further undermining trust and revenue - a deadly spiral. In New Zealand, in 2013, the number of print journalists had almost halved in just seven years.

All this matters because "news and information are part of the scaffolding of democracy itself" - providing trustworthy information, holding those with power to account and giving space for public debate. Journalism plays a huge role supporting democracy even when there aren't large crowds consuming that news. Studies show that when you have journalists at local meetings up and down the country, elected officials tend to behave better, there's less corruption, people make better hiring decisions.

Bunce says while publications in large markets, such as the New York Times or the Guardian, are large enough to survive or even thrive once their audience migrates online, New Zealand's smaller market makes this unviable. And this quality journalism increasingly relies on subscriptions and paywalls, so that regular and quality news only reaches the rich.

Bunce points out the damages from journalism's decline are not equally spread. "It is regional New Zealand that is most at risk here. The crisis of journalism is most affecting small towns and regions that struggle to support commercial media". The Government is piloting a small-scale scheme called Local Democracy Reporters, to "fill the gaps in the reporting of local bodies and other publicly-funded organisations", mostly in regional New Zealand, brought about by significant decreases in traditional media.

Journalism A Core Public Service

Broadcasting Minister Kris Faafoi has stated the Government is working on a plan to "strengthen public media", but details remain scarce. Bunce says the broader issue is journalism being treated as a commercial product like entertainment rather than a core public service, like education. Bunce also suggests resurrecting New Zealand Newswire, which was shut down in 2018, so that news is shared between publications.

The media also plays a role in representing everyone, and that is important for diversity and inclusion. Research from the US suggests when your local paper shuts down the community becomes more polarised. One of the reasons for that is people without local news tend to get their news nationally, or internationally, and those tend to always be more polarised because they are talking about national politics and people fighting along party lines, whereas local news is often much more constructive, focused on real issues that unite us.

Journalists are also under threat from creeping authoritarianism, Dr Bunce says. Globally, the number of countries where reporters can work in safety continues to decline. According to the United Nations Educational Scientific and Cultural Organisation (UNESCO) 2018 was the deadliest on record for journalists: at least 99 were killed.

Bunce's biggest concern is what's happening to newspapers "because they are the ones that are struggling the most and they are the ones that historically have done by far the most journalism. Some people might think newspapers are yesterday's medium, but around the world, in most countries, newspapers do about 70% of the journalism. That's because of the number of journalists they employ and the systematic nature of their work".

"Newspapers may be in decline but they have been the only independent source that has consistently been there to reveal and scrutinise power at all levels of society; not just politicians, but regional and local issues and businesses and so on. And they are one of the few places we have to articulate our concerns as citizens and to debate the important issues of the day".

Her second concern is today's crisis in media trust; audiences not being sure who they can rely on. Information inequality, aggravated by the rise of sophisticated misinformation from corporations and conservative political parties, has caused trust in the media to plummet worldwide. In the United States it has dropped from 72% in the 1970s to 32%. In New Zealand a similarly low number of people trust the media to "do what is right". Today people get news from more sources. As individuals we've got used to "free" information via Google and bias-reinforcing Websites, but the hidden cost is the decline in skilled independent social scrutiny which newspapers used to provide.

"That's what many of us got very worried about in 2016 - seeing the US elections, seeing the Brexit referendum - and thinking 'Shit, politics might not work without good journalism anymore'. That seemed to me the emergency issue, because it is so important to our democracy. For me, the way in which journalism supports democracy (or undermines it) is our really pressing challenge". In the future, Government funding for independent media may be the only realistic way to improve information inequality. If the market is failing, which it is, then Government support is both important and natural.

CRASHED
How A Decade Of Financial Crises Changed The World
by Adam Tooze, Allen Lane, 2018

This is the story of what happened and how we were rescued from something even worse - but at a price which continues to undermine democracy across Europe and the United States. Gnawing away at our institutions are the many billions of dollars which were conjured up to prevent complete collapse. The end of the crisis has been pronounced, but the policies implemented then continue to shape our world - whether in Greece and the Ukraine, through Brexit and Trump.

"Crashed" provides the most thorough published description you'll find anywhere of 2008's Global Financial Crisis. If you're interested in politics and economics it's essential reading, and now available in cheaper softcover ($NZ22 from Book Depository) or perhaps in your local library (if not, put in a request to buy; this book needs to be widely read).

Did you know for example that the US bailed out not just their own global banks and corporations, but also provided essential liquidity to Europe? And Europe's central banks expected the US Federal Reserve would back them if needed, holding relatively low reserves (p90). Here are just a few of the many sharp observations in this book:

One Crisis Shapes The Next

Emerging markets needed safe assets against market volatility after the 1994-98 crises, driving institutional investors into a limited market for safe assets; this fuelled the rapid growth of the securitised mortgage debt which collapsed in the 2008 crisis (p58). The securitised mortgage industry was designed to suck foreign capital into US financial markets, with a quarter of all securitised mortgages held by foreign investors, and most of the riskiest segment held by European banks (p73).

UK financial deregulation created a home for these low-capital high-risk off-books "investment" subsidiaries and a channel for their transatlantic banking flows, which rapidly became the largest share of global inter-country financial flows (p76-79). To catch up with their UK and US competition, European banks took on even more leverage (up to 50 to 1), making them more at risk to adverse market movements (p88)

Here is Tooze's succinct summary of the start of global financial meltdown (p144): The really decisive break in market confidence came on the morning of August 9, 2007, when BNP Paribas, France's most prominent bank, announced that it was freezing three of its funds. Its explanation: "The complete evaporation of liquidity in segments of the US securitisation market has made it impossible to value certain assets".

"Without valuation the assets could not be used as collateral. Without collateral there was no funding. And if there was no funding all the banks were in trouble, no matter how large their exposure to real estate. In a general liquidity freeze, the equivalent of a giant bank run, no bank was safe. Around noon, the cost of borrowing on European interbank markets surged."

Just as interesting as the coverage of the Global Financial Crisis is the analysis of the origins and results of the European debt crisis which followed, and the politics of Greece in particular. If you're one of those who bought into media coverage of tax-avoiding Greeks causing their own problems, here is the Brazilian International Monetary Fund (IMF) Board member's frank summary of the final Greek debt package:

"The programme should not be described as a rescue of Greece, which will have to undergo a wrenching adjustment, but as a bailout of Greece's private debt holders, mainly European financial institutions". When the European Union (EU) froze lending to Greece, precipitating the bank run which left customer withdrawals limited to €60 a day, the IMF - as principal debtor - took Greece's side, arguing correctly that the debts could not be repaid and must be written down, sooner rather than later (p529).

In 2012 the IMF revisited its research backing the imposed government budget cuts across Europe and found they had systematically underestimated the negative impacts of the austerity programmes (p430). But by then, economic policy was considered above and beyond the impact of elections: Germany's Wolfgang Schauble: as far as the fundamentals of the eurozone were concerned, "elections cannot be allowed to change economic policy" (p522).

"The World Is Governed By Market Forces"

US Federal Reserve Chair Alan Greenspan: "(we) are fortunate that, thanks to globalisation, policy decisions in the US have been largely replaced by global market forces. National security aside, it hardly makes any difference who will be the next President. The world is governed by market forces", p574). And China pulled back from helping Greece because Berlin had let the Chinese know that it did not welcome their intervention in the Greek crisis (p524).

There's so much more in this book - but because "Crashed" is so comprehensive, it raises as many questions as it answers. Tooze is a historian, not a political analyst, so while he has great insider connections and astonishing stories, he's unwilling to go beyond the options allowed on the high table of world leaders' debate.

As he puts it: "These crises are hard to predict or define in advance. They are not anticipated and often deeply complex. And they are urgent. Such moments demand counteracting intervention". So, while noting the ongoing political costs of the US's response (notably the rise of the extreme Right), he argues in favour of the American intervention and damns Europe's lack of effective action.

In the longer run though, I suspect Europe and China will be much more likely sources of alternative responses, and the USA and the UK will continue to create new crises and transfer the costs offshore. And on one point in particular, more could have been done to write down excess home mortgage debts, as argued in the book "House of Debt: How They (And You) Caused The Great Recession, And How We Can Prevent It From Happening Again" by Atif Mian and Amir Sufi.

There is a particularly interesting review from one of those responsible for Obama's policies, Laurence Summers which essentially agrees but says that since this was politically unwinnable in the Senate so they didn't raise it for public debate. Still, there's no better starting place than reading "Crashed" to get better informed on the last global crisis, and to think about how we might respond in the next one.

THE ANARCHY
The East India Company, Corporate Violence And The Pillage Of An Empire
by William Dalrymple, Bloomsbury, 2019

This is the forgotten story of how a "dangerously unregulated" private joint stock company, housed in a nondescript London building, raised an enormous army and ravaged the Indian subcontinent between 1757 and 1858. According to the Hindu newspaper, Dalrymple's "familiar passionate style cuts through the stodge that pervades a lot of writing on history to serve up a book that has it all".

"(It has) the compulsive pull of a thriller, the erudition of a significant piece of non-fiction, and the loveliness of a piece of literature". This Question and Answer with the author published in the Hindu explains his intentions in writing the book and his use of original translations from local sources to support this rewriting of colonial history:

"One of the fictions many of us have come to believe is that the British ruled India for almost two centuries. You suggest that when people talk of British rule, they forget that until the middle of the 19th Century, it was run by the East India Company, a joint stock company. Has the role of this private company, whose representatives often acted on their own, been downplayed or gotten too muddled up with that of the British government?"

"It was extremely well known in the 18th Century that it was a company that was running India, and this was a cause of some scandal. One of the biggest surprises in my research was the amount of resistance in the British press to what was going on. Some of it was because they didn't like the new nabobs coming back to Britain with fortunes and buying up country houses and Parliamentary seats".

Corporate Violence

"But a lot of it read very much like a modern Guardian editorial. 'That we had outdone the Spanish in brutality, for instance. That they at least had the excuse of faith, but that we had done it for profit'. This was a very live issue at the time, but the Victorians spun it as story of national glory and imperialism. And Indian nationalists bought that line but reversed it into a story of national oppression followed by liberation. The corporate violence got forgotten in this mix somehow".

"You say in the Introduction that the book doesn't purport to provide a complete history of the Company. But even so, would it be fair to say, that you have wrapped this account in a slightly episodic manner around some personalities - Robert Clive, Warren Hastings, Richard Wellesley - with Shah Alam running like a thread through it?"

"That's a very good description of it. There are two stories I am telling really. The rise of the Company is the main one, but it is told against its mirror image, which is the fall of the Mughals. And the way they diminish from a trans-Indian power to Shah Alam stuck inside his little box that extends (from Delhi) to Palam".

"But I wouldn't describe it as episodic. The question that the book tries to answer is how one London corporation took over from the Mughal Empire. And I tried to stick to that main question. For example, I jettisoned all talk about the East India Company's movement on the China coast, the Opium Wars, all that sort of thing. I jettisoned a lot of detail of how the Company was run at home. If it was a full history of the East India Company, then you would probably spend a lot of time on boardroom affairs and of different factions within it".

"I set my heart on telling a story of how one London office seized such huge amounts of territory and the answer is only partly technological. Yes, it trained Indian sepoys in cutting-edge military techniques, but it is also a story of Indian collaboration. The Company makes its first territorial seizure with the support of the Jagath Seths (the country's wealthiest bankers). It was they who asked the British to overthrow Siraj-ud-Daulah of Bengal and they offered Clive £2 million to do this".

Indian Bankers Collaborated

"This was the moment the Company realised it could defeat the vast Mughal armies with a very small amount of its newly-trained sepoys. And particularly from the 1780s onwards, the Marwari and Jain bankers of Bengal, and later the Hindu bankers of Benares and Patna, consistently backed the Company against other Indian forces. Which is something I try to understand in the book. When I am in Britain, I emphasise the loot and plunder which some of the people here simply don't know. But when I am in India, I stress on how the Indian capital backed this, something not all Indians know".

"As in your other histories, there is a considerable amount of space and effort devoted to bringing characters to life. This makes it so much more interesting to read, but isn't it a challenge given the partisan nature of sources, to sift between understatement and hyperbole, between even-handedness and prejudice?"

"This is a magnificently well-recorded period. The challenge is obviously in getting the Indian voices. And that is what I focused on. The same was true in the other books I have written as well. I have used a lot of Persian language sources that have not been translated before, including the Shah Alam Nama, which even the indefatigable (historian) Jadunath Sarkar had not used. There was another source, which has been available for 200 years in English but rarely ever used because it is so weighty, Ghulam Hussain Khan's 'Seir Mutaqherin'".

"In two of your previous books ("White Mughals" and "The Last Mughal"), you had highlighted the changing relationship between the British and Indians - a time when the former inter-mixed, married Indian women, adopted the country's ways. But, as you say in "The Anarchy", the worst period of British rule - of loot, wars, conspiracies and impoverishment - happened during the white Mughal era. How do you square this up? And do you feel you need to reconsider the importance you attached to the white Mughal era, for its 'hybridity' and its 'unexpected collisions and mixings'?".

Maximum Extraction For Maximum Profit

"Not at all. The two were very complementary. What you got in the East India Company period was maximum extraction - the period of greatest corruption, loot and plunder as well as human rights abuses. But it was also the period when Indians and the British were collaborating most closely. The country was not conquered by white British manpower".

"It was conquered by Indian troops, who were recruited. And these armies were being funded by Marwari bankers. There were never more than 2,000 British traders in India in this period, most of them in Bengal. The extraordinary audacity of the British was to borrow Indian money, train Indian soldiers, and take on other Indian states. But this is exactly what they did".

"And it was in the middle of this that you got this inter-mixture of families, of ideas, of scholars. Then in the late 19th Century you get a very different Raj, where the British are in their civil lines, and there are a large number of British soldiers, even entire white regiments. This is the more familiar world we know from Kipling and Curzon. You know: 'East is East and West is West and never the twain shall meet'. In a way, this is a relatively more palatable period in terms of governance. This is the period where the hospitals, communications, universities come up. The Company had made no pretense of being interested in anything but profit".

"Counterfactuals are a tricky business, but you suggest that the Company could have been expelled for good with a simple push in 1780. That is, had Haidar (Ali) and Tipu (Sultan) advanced on Madras after winning the Battle of Pollilur and had the Marathas gone on the offensive in the North".

"This was a moment that Indians might regret. In 1780, the entire British regiment had not just been defeated at Pollilur but had been wiped out. They had another major defeat at the hands of the Marathas a year before. At the same point, Bengal was paralysed by the conflict between Warren Hastings and Philip Francis. And the Company was bankrupt".

"If only the Triple Alliance created by Nana Phadnavis between Hyderabad, the Marathas and Tipu Sultan had held together. Had these three pushed at the same time, there was absolutely no question that the Company would have been defeated. Hastings described himself then as being on a leaky vessel being blown towards rocks. And Francis advocated withdrawing troops across India to Calcutta. But the impression of British power was kept up and Hastings played a very clever game. The Triple Alliance broke down and the next (one) was with the British against Tipu. The Marathas collaborated with the Company, idiotically from an Indian perspective, to destroy Tipu".

For more from the author, the Radio New Zealand podcast of Kim Hill's interview with him is also great listening.