Aotearoa/New Zealand has thrown up a number of remarkable people in a number of diverse fields; among them is a unique individualist who got himself arrested in escapades on opposite sides of the planet, confounded Establishment officials by showing them where they were mistaken, built an early version of an environmentally sustainable house - that got demolished by the local authority - and made significant contributions to Aotearoa/New Zealand archaeology, among many other notable achievements.

In 2005, Owen Wilkes, in an act typical of the hard-nosed rationalism he applied throughout his time on Earth, took his own life. A tragedy, rendered clearly by more than a dozen contributors to "Peacemonger", this book of essays about him. But the boy from Christchurch had packed enough into his 65 years for three ordinary lifetimes.

Contribution To World Peace

"Peacemonger" is organised around the contributions of people who knew him in a number of contexts. Unexpectedly, given the number of people writing a chapter for the text, the result is neither dull repetition nor a disconnected mass of data. There is largely agreement about Owen's contribution to world peace.

Roland Simbulan, a former Vice-Chancellor at the University of the Philippines, suggests that Owen "had an important role in ending the Cold War". Several other contributors give him "a large amount of credit" for this country's nuclear free status, and for successes of the nuclear free Pacific movement. Neville Ritchie hails his immense contribution to academic knowledge of pre-pakeha Māori history.

And there is largely agreement also over Owen's strength of character and recurrent obduracy. Murray Horton, a man not given to superfluity of praise, describes Owen as a "giant" and a "legend", while relating how he insisted on eating food mistakenly cooked in methylated spirits on a camping trip, and wrote letters "ripping the shit out of us" with criticisms of CAFCA and the Anti-Bases Campaign (ABC). Ingvar Botnen's chapter includes a splendid colour photo of the man when he insisted on wearing shorts at minus 20 degrees Celsius on a cross-country ski trip in Norway.

But the idiosyncrasies highlight a character whose insights and determination not only made an impact on the people he worked with, but an impact on the world stage. He "was one of the first people to start digging into the post-war global network of signals intelligence facilities" (Maire Leadbeater). These facilities - whose unparalleled surveillance power was marvellously publicised by Edward Snowden in 2013 - are represented in Aotearoa New Zealand by the Government Communications Security Bureau (GCSB).

One-Man Counter-Surveillance

Owen's counter-surveillance - tramping across country with backpack and binoculars, and all-night hours digesting obscure US government documents - resulted in his startling revelation of the GCSB's secret signals interception base at Tangimoana, near Palmerston North. His next key contribution to understanding of what is today recognised as the Five Eyes global attempt to hack into any part of the world's communications that it wants to, was to explain what David Lange signed up for when he gave permission for a satellite spy base to be built at Waihopai near Blenheim.

Nicky Hager was to galvanise the peace movement when he took up this work of revealing to the NZ public the secret machinations of the GCSB and its associates. His book "Secret Power" includes a foreword from Lange admitting he did not know what the Waihopai base was to be actually used for. Nicky's contribution to "Peacemonger" concisely describes Owen's original contribution to peace research. Aotearoa NZ's domestic "security" agency, the Security Intelligence Service (SIS), recognised Owen by compiling copious dossiers on the man which, according to one source, amount to "six volumes" - still mostly inaccessible almost 20 years after Owen's death.

Some areas of Owen's life get little coverage in this collection of essays. Apart from the reflections of May Bass, partner and co-editor, on the latter part of his life, we learn little about family and relationships. But leaving this aside, this is a book that had to be written: for a true understanding of our country's history, to inspire current and future generations of "peacemongers", for the reading satisfaction given to those who took part in the events backgrounding this era, and to celebrate the life of a man who was one of the outstanding characters of his time.

REVIEW

- Murray Horton

COMRADE
Bill Andersen: A Communist, Working-Class Life
by Cybèle Locke
Bridget Williams Books, 2022

It was only after reading this book that I realised what is its point of difference. It is spelled out in the subtitle: "A Communist, Working-Class Life". Communism is unapologetically central, without any of the usual caveats about the subject's "communist life" as having been a mistake, misguided idealism, or even a crime. I found that refreshing. Bill Andersen is presented as he was, a lifelong commo, like it or lump it (there were plenty who opted to lump it, which was only to be expected).

This is a conventional biography (unlike "Peacemonger", reviewed above, which consists of a number of essays about Owen Wilkes by various people, including me). It is not the first time that Bill Andersen's life has featured in Watchdog - he died in 2005, aged 80, and his union colleague and friend, Paul Watson, wrote his obituary in Watchdog 108 (April 2005) Paul's obituary is an excellent concise summary of Bill's life but this book is a full-blown, comprehensive biography.

It has obviously been a labour of love for Cybèle Locke, which has taken her many years of work - some of her oral interviews took place nearly a decade before the book's publication. It is exhaustively researched and referenced, with many pages of end notes. I made a point of reading all of them and I'm glad that I did, because I learned things from them that are not in the main text. One example: the only time Bill ever knocked off work early to go to the pub was to celebrate the death of Spanish fascist dictator Francisco Franco in 1975 (and quite right, too). It is a book written by an academic but it is not an academic book, meaning that it provides both enjoyment and insight for the general reader.

It provides plenty of detail about aspects of Bill's life that I didn't know - about his family, his personal life, and his lifelong passion for, and hands on involvement with rugby league, that most working-class of all sports. In many respects he was very much a working-class Kiwi bloke of his era (he was born in 1924), starting with his very name, which wasn't Bill. He was born Gordon Harold Andersen (and that's what his Police Special Branch and Security Intelligence Service [SIS] files refer to him as). But he chose Bill as his name.

That is so typical of men of that time - I had an uncle born as Herbert but only his mother, my grandmother, called him Bert. He was always Uncle Bill. My father, his brother, told me that he chose Bill for his name because it was "tough". In the mid 1970s NZ had a short-serving Labour Prime Minister called Bill Rowling. But when he was later knighted, it was under his birth name - Wallace.

Early Life At Sea

Courtesy of his father, Bill Andersen was of Danish descent (which showed in his features). His childhood was spent during the Depression in working-class Auckland suburbs (places like Grey Lynn, decades before they became gentrified, with stratospheric rents and house prices now well out of the reach of workers). Bill's Dad was a captain of coastal ships; 16-year-old Bill followed him to sea.

To quote from Paul Watson's Watchdog obituary: "He got a job sailing on coastal vessels and there began his first experience of unions. This, of course, was during World War 2 and he became pretty quickly introduced to union politics when the Seamen's Union attempted to hold a ship up over conditions on board but were not supported by the Federation of Labour (FOL) President, Fintan Patrick Walsh. Walsh believed it was not on to be taking industrial action in wartime. This would not be the first time that Walsh and Bill were to have differences".

"In 1942 Bill got a job on the Pamir and set sail for San Francisco. The Pamir was an unarmed sailing ship taking a load of wool to America. It was during this voyage that further issues arose over seafarers' conditions and Bill got into a bit of strife on the trip. Before docking in San Francisco, he got severe appendicitis and was admitted to hospital. When he went back to the Pamir they wouldn't re-employ him as the employer saw him as a union troublemaker" (he never forgot the Pamirhaving its image tattooed on his upper left arm. MH,).

"He continued sailing in foreign-going vessels for the rest of the war and visited lots of different countries and saw poverty he had never seen before, especially in the Middle East. Such suffering convinced him something was radically wrong with the social and political order with so much wealth on one side and so much misery on the other. These experiences were to be the catalyst for his study of Marxism and subsequent communist beliefs".

"Comrade" spells out the impact made on Bill by the poverty he observed around the world in his travels as a seafarer. It mentions a 1969 magazine interview with him, which detailed his horror at what he saw in ports like Aden, which was then part of a British colony. Funnily enough, I remember, all these years later, reading that interview (my parents used to buy that long-gone magazine and 1969 marked a key milestone in my burgeoning political consciousness) and being struck by how his first-hand observations of the reality of capitalism and imperialism radicalised him and decided him, at a young age, to become a communist.

Bill Andersen was a nationally famous (or infamous, depending on your point of view) trade union leader for decades. But the book makes clear that he prioritised being a communist over being a unionist. So, I'll leave the chronology here for a bit and highlight his life as a communist, which is described in great detail in the book. Indeed, that is its' second point of difference - it emphasises his communism, rather than mentioning it in the context of his being a union leader. It makes plain that both were central to Bill Andersen's life for more than 60 years but that he was a communist first.

Socialist Unity Party

Bill actually first joined the Communist Party of Great Britain when he was overseas as a young seafarer. He joined the Communist Party of New Zealand (CPNZ) in 1946 and rose to leadership positions at both the Auckland and national level. In those days the Party was pro-Soviet, a position which was put under great strain by the Soviet Union's brutal suppression of the Hungarian uprising in 1956. As a result, the CPNZ lost a significant chunk of its membership, who left in disgust or disillusionment. The same thing happened in Communist Parties throughout the Western world.

The 1960s' Sino-Soviet split had global ramifications, with Western CPs deciding whether to back the Soviet Union or China. The CPNZ backed China, which led to Bill and other leading figures to resign and create, in 1966, the new pro-Soviet Socialist Unity Party (SUP). It was a bitter split and Bill was guilty of sectarianism, referring to his former comrades in the CPNZ as "Peking parrots". In its few decades of existence, the SUP built a power base in the trade union movement, including at the national level and became very much the bête noire of employers, and Rightwing politicians and media.

None more so than Piggy Muldoon, National Prime Minister from 1975-84. To quote Paul Watson's Watchdog obituary: "Bill once stood (for the SUP) against Muldoon in his true-blue Tamaki electorate in a general election. He gained less than 100 votes. When Muldoon publicly gloated about this result Bill's retort was 'Well, Mr Muldoon, you stand for President of the Northern Drivers Union and see how many votes you get!!'".

It is necessary at this point to reprint what I wrote in my Watchdog 161 (December 2022) obituary of Ken Douglas, Bill's fellow high profile SUP leader and one-time head of the NZ Council of Trade Unions (CTU): "When Douglas was a national leader of the SUP, I actively opposed what he stood for".

"Having visited both the People's Republic of China and the Soviet Union in the 1970s, I had no doubt that he had backed the wrong side in the bitter ideological divide which split the Second World (remember the Second World? I should add that since Communist China has regressed to being Capitalist China, proving that one party dictatorships and capitalism are a perfect match, my opinion of that country has changed drastically)".

"And as for the former SUP's domestic policy, which was to dampen down any popular movement that threatened the electoral chances of the Labour Party (which it saw as the best hope for workers), the less said the better. It exemplified all the worst characteristics of the trade union bureaucracy. CAFCA had only the most passing acquaintance with the SUP".

Spied Upon By Covert State

The covert State attached great significance to the SUP. In Watchdog 120 (May 2009) I wrote an article titled "SIS Spied On CAFCA For Quarter Of A Century". This is an extract from the subsection "Spying On SUP Still Hush Hush": "The CP(NZ) was one of two rival Communist parties, from the 1960s until the 90s, the other one being the former Socialist Unity Party (SUP) which was aligned with the former Soviet Union - the CP was aligned with, firstly China, secondly Albania, then finally it ceased to align itself with any foreign country". (SIS Director) Warren Tucker's letter to us (30/10/08) said:

"'CAFCINZ was occasionally mentioned at meetings of the SUP. The SUP was a secretive organisation and the methods NZSIS employed to find out what it was up to were also secret. The NZSIS files on the SUP are still sensitive for both security and privacy records and for the time being we are not releasing documents from these records' (he sent us a brief summary of SIS reports on the SUP where CAFCINZ was mentioned). You can take this as meaning that the SIS spied on the SUP (which was prominently represented in the trade union movement, including at the highest level) by means of phone taps and hidden microphones, and doesn't wish to divulge those details".

"The SIS is inconsistent in its approach to this subject, as it is to so many others. It is not prepared to send CAFCA anything about us gleaned from its spying on the SUP. But it was prepared to do so when it released his Personal File to Paul Corliss, who was happy to give a copy to us, and happy for it to be reported in the media when this story broke. Paul is a veteran Christchurch unionist and activist. His file contained a couple of reports where his name was mentioned at Christchurch SUP meetings - plus, most intriguingly, the agenda for a 1980s' SUP Central Executive meeting in Wellington with no mention whatsoever of Paul or any apparent relevance to him".

"Paul received his Personal File in December 2008, which raises the question of whether the SIS had changed its policy on the "sensitivity" of its files on the SUP in the month since Tucker wrote to us saying that everything involving the SUP must remain secret. We notified the Ombudsman of this inconsistency and appealed the SIS' withholding of SUP-related material from us".

"As a result, Warren Tucker sent us the mentions of CAFCINZ from four previously withheld reports of its spying on the SUP but continued to withhold the CAFCINZ material from a further four reports on the SUP, on the grounds that they would lead to sources being able to be identified (the standard reason for virtually all deletions from all SIS reports released). The Ombudsman upheld the SIS' decision".

"...One report (in CAFCA's SIS file) included me on a 'troublemakers in the union' list and included evidence of my employer asking the SIS for any evidence that I was connected to the then Socialist Unity Party (I never was, nor any other party) .... It records that (name withheld) from the Railways had rung the Christchurch office of the SIS 'to enquire about certain individuals who are all employed in the Traffic Branch of the Christchurch railways and who belong to the National Union of Railwaymen. These individuals were described as causing trouble to the Christchurch railways management'".

"Four people are listed, including me and Paul Corliss... The SIS report goes on to say 'I (SIS Officer, name deleted) told (name withheld by MH) that some of these people were known to us in the context of CAFCINZ but that none of them were members of or associated directly with the SUPNZ' (the report is entitled "SUPNZ- ACTIVITY IN INDUSTRY") ... That report concluded: '(name withheld by SIS, presumably the Railways caller)'s conclusion had been that the above named had SUPNZ connections'" I certainly didn't and wrote to SIS Director Tucker to have that corrected - it was.

Bill Andersen stayed as a leading figure in the SUP throughout the extremely turbulent 1980s but he grew increasingly disenchanted with the Party's line supporting the proposed Compact between the CTU, employers and the Government (nothing came of it). Throughout those Rogernomic years which devastated unions, the working-class and weakened the State sector, the SUP supported the Labour government which was wreaking the havoc. Bill's advice to the contrary was ignored within the Party. He was also disenchanted with developments in the Soviet Union, which led to its dissolution in 1991 and "the death of communism".

Building Bridges

So, in 1990, he resigned from the SUP (having given it a quarter of a century of his life) and, with others, formed the Socialist Party of Aotearoa. Bill remained with SPA until his death in 2005 but "Comrade" concludes that it was pretty much a one-man band by that stage and that the few others remaining in it did so for Bill's sake.

It was in his SPA period in the 90s that I first met Bill. To quote from my endnote to Paul Watson's 2005 Watchdog obituary: "But in the 1990s, following the demise of the Soviet Union and Bill moving on from the SUP, my opinion of him improved markedly (as opposed to my view of his former SUP and union colleague, the lamentable Ken Douglas, which has worsened considerably). Bill contacted us and wanted to listen to what we had to say. This was done through the Workers' Institute for Scientific Socialist Education, which ran seminars and built a base among progressive unionists. On a couple of occasions WISSE hosted me at meetings, in Auckland and Hamilton".

"In the course of driving me back to Auckland from the Hamilton one, Bill and I had a wide-ranging discussion, which impressed on me his genuine interest in learning from past mistakes, putting aside political differences, and building a broad-based popular movement. Having finally met him, decades after first becoming aware of him, I liked him and we got on well. He was open minded and had a good sense of humour. He never stopped strategising and he was always looking for people with whom he could productively work. He would regularly ring either myself or Bill Rosenberg, looking for information or to discuss things".

During his post-SUP life, Bill reached out to all sorts of political friends and foes on the Left. For example, one was Don Ross, who was an active CAFCA member in Whangarei for many years. During the 90s Don was running the Organisation for Marxist Unity. To quote from my Watchdog obituary of Don (139, August 2015).

"They were an unlikely couple of old blokes - both had been CPNZ members, who had gone in different directions with the Sino-Soviet split. On one memorable day that decade I was driven from Hamilton to Auckland by Bill; we met Don there and he drove me straight on to Whangarei. So, I got a total Marxist-Leninist earbashing that day. Don and Bill duly fell out and went their separate ways again".

Union Leader

That completes the "communist life" of this book's subtitle. Now, I'll jump decades back into the chronology to the "working-class life", the other half of the subtitle. The best summary is Paul Watson's 2005 Watchdog obituary. "When Bill came back to NZ (in the 1940s, from working on ships abroad) he sailed the coast as a ship's fireman as his eyesight wasn't too good.

He was involved in holding up a ship in Westport and was expelled from the Seamen's Union, which was still under the control of Fintan Patrick Walsh. In late 1948 Bill got a job at Auckland's Westfield freezing works, working two seasons as a mutton butcher. It was there he led a strike over mutton butchers being paid less than beef butchers. They never took him on for a third season".

"Kings Wharf freezing chambers was his next job and in 1949 the carpenters were in dispute. Despite the railway workers supporting them, some butter was railed into the wharf. Bill and two others refused to unload it but they got the sack as they were a minority. The work on the wharf was hard and dirty. In those days they unloaded asbestos in hessian bags and Bill would recall often going home itchy".

"The 1951 waterfront lockout was the next struggle and Bill was elected on to the 1951 lockout committee and had the job of getting all the printing done and worked closely with Dick Scott (who a few years later years published '151 Days', the famous book on the lockout). It's interesting to note that Bill was one of only two unionists who stood up and supported Dick Scott when Walsh sought Scott's expulsion from the 1954 FOL Conference, because of what Walsh called 'vicious propaganda and vile words' against the Labour Party and FOL".

"A number of militant unionists were blacklisted following the 51 Lockout and Bill was one of them. He found it difficult to get a job so he and a mate started cleaning shops. By this time Bill was married with children and the cleaning wasn't paying the bills so he got a job driving for Winstone, working with 120 other drivers. He soon created an impression among his workmates as a confident dedicated unionist. For example, upon receiving news of his death, a retired Winstone worker felt compelled to write a letter of condolence to the family and express his admiration and appreciation for the work Bill had done back then. He hadn't seen Bill for some 50 years".

"Bill was elected on to the Drivers Union Executive in 1953 and became a union organiser in 1954. He was elected Secretary of the Northern Drivers Union in 1957, which meant the end of the Rightwing leadership. Under his leadership the Drivers Union fought for above-award conditions, sick pay, average rates for holidays, ruling rates and were involved in national issues like the $20 campaign*. The Drivers Union became a democratic union with rank and file meetings and members' decisions running the union".

"*Average rates or average weekly earnings for holidays means a week's holiday pay based on an average of your total year's earnings divided by 52 (which could often be greater as a result of working overtime hours during the year) than just being paid an ordinary normal hours' weekly wage for holiday pay. Ruling rates were the percentage wage rates set by 'the lead Award negotiations' during bargaining rounds (pre-Employment Contracts Act)".

"The Drivers were often at the forefront of the wage round and their settlements tended to always set the ruling rates for other unions' bargaining that followed. The $20 campaign related to support (in the form of a levy) from other unionists to help combat the intervention in the industrial dispute by the 1975-84 Muldoon government in locking out the Kinleith Pulp and Paper Mill workers. Muldoon lost - the trade union movement won".

Imprisoned; Tens Of Thousands Marched In Protest

"Perhaps one of the finest moments of solidarity in his life occurred in 1974 when the Seamen's Union was in dispute and held up the ferries from Auckland to Waiheke Island. The seamen had asked the drivers not to deliver oil to the boats and they duly obliged. This action led the late Justice Mahon to issue a court order for the ban to be lifted. The Drivers Union refused to lift the ban so Mahon had Bill arrested by court order and he got locked up in Mount Eden Prison. His arrest caused outrage and many unions around the country were mobilising for a national day of strike action".

"In fact, 20,000 workers marched up Queen Street in Auckland in protest at his arrest. The (Labour) Government eventually got involved and Tom Skinner (FOL President) was sent to see Bill in prison and it was in Mount Eden that the Seamen's claims were met. The settlement was presented to a stop work meeting by Tom Skinner and, once endorsed, a court hearing was held and Bill was let out" ("Comrade's" striking cover photo is of Bill Andersen at the centre of the demonstration following his release from prison. MH).

"Bill's commitment to social justice wasn't just reflected in union activity. His support for the tangata whenua was strong and unwavering. This was demonstrated over many decades. From support in the late 70s during the Bastion Point struggles to the foreshore and seabed issue (of the early 2000s. MH), Bill demonstrated a clear and deep understanding for Māori and their battle to win back land and have decent housing, health and education (indeed, I last met Bill at the foreshore and seabed hikoi, in Queen Street, in October 2004. MH.). Similarly, his support for the Pacific Island community earned him great respect".

"In 1986 the Drivers Union amalgamated into the Northern Distribution Union and later Bill was elected President, a position he held up until his death. Bill was involved in helping all sorts of organisations. If people were being dealt to, no matter what the cause, Bill was there. Whenever there was a picket on you could guarantee Bill Andersen was offering advice behind the scenes and would often turn up to those pickets and stand in solidarity with the workers in struggle".

"When asked (in the early 2000s) what he thought was the most successful struggle he had been involved in, the answer was the Kinleith Pulp and Paper Mill strike in 1980. That dispute lasted for three months involving, from our union, engine drivers, store workers and drivers taking action. The strike broke Muldoon's 1980 wage and price freeze. The strike was very successful as it showed what rank and file involvement could do".

"He was also on the national executive of the Federation of Labour and for many years President of the Auckland District Trades Council. He was active in all levels of the trade union movement and was involved in many progressive campaigns including opposing US imperialism in the 1960s and 70s war in Vietnam... In the 80s Muldoon and Bill often clashed publicly. The Auckland District Law Society in 1971 even organised a public debate between two of them on 'Unions and the Law'".

"Muldoon was a scaremonger and ran a smear campaign on Bill and other militant trade union leaders. An article in Truth (which was then a formidable national weekly devoted, in equal parts, to scandal and hysterical anti-communism. MH.) said that Bill was like the bubonic plague. Prominent business people vied for the spotlight on this bandwagon".

"The late Bob Owens, for example, from Owens Transport, said the only way to shut Bill Andersen up was with a .303 bullet. He received some hate mail as well but some of it, Bill found amusing and kept. One bogus 1981 letter, purporting to summons him to an appointment for an "optrectomy operation" at Auckland Public Hospital, is a beauty. 'The purpose of this delicate operation is to sever the cord that conects (sic) your eyes to your rectum and hopefully get rid of your shitty outlook on life'".

Fighting Back Against The War On Unions & Workers

"...The Right had introduced the draconian Employment Contracts Act (ECA) in 1991, a number of unions amalgamated and with Bolger's National government re-elected in 1993 we experienced an incredibly difficult and challenging time. It was a period where Bill worked tirelessly to organise, consolidate and buffer our union against the effects of the ECA. He saw the vital importance of enhancing education and training of workplace activist delegates, building broader links with progressive organisations and working with the Centre Left political parties to campaign against all that was oppressive and anti-union in that vicious legislation”.

"Bill worked actively to secure a number of amalgamations in the 90s to form what (became) the National Distribution Union (NDU) of some 20,000 members. The South Island Clothing Workers Union. Northern Apparel Workers Union, the Wood Industries of Aotearoa, and NZ Food and Textile Union were just some examples. Also, after a period of NDU disaffection with the NZ Council of Trade Unions (NZCTU) leadership, resulting in disaffiliation in the 1990s, Bill supported reaffiliation under the CTU's new leadership and direction".

"Bill's dedication in advancing the interests of the working class was unswerving. He had that particular ability to forcefully advance reasoned argument in an objective way and he was absolutely dogged in his determination at times. A characteristic I found particularly attractive (and many others have recently commented on this) was his clear, calm objective thinking and his genuine interest in encouraging and promoting in delegates, members and officials the critical need to organise, organise, organise".

"He constantly reminded us, whether in delegate training forums, National Conference meetings, delegate conferences or at stopwork meetings somewhere, of the importance of thinking, objectivity and carefully and calmly taking in all the facts and drawing conclusions from those facts which hopefully developed the best possible tactics and strategy in any given situation. He disliked arrogance, subjective thinking and personal attacks".

"Bill was also an incredibly hard worker. Prior to his January 2005 fatal heart attack, he was still working extraordinarily long hours. Hours that unionists 40 years younger would find difficult to sustain (he was a couple of days short of 81 when he died. MH.). A tribute to that fact was made by a long-serving delegate at a union seminar in 2004 where he said: 'I have never seen a harder working trade unionist than Bill Andersen', and he was absolutely right".

"It has to be said Bill was not the shining example of a good work/life balance - in fact it was the reverse - work was his life and life was his work. Sadly, Bill was also a victim of ageism - there were some who thought he should have retired long ago - for my money, however, he was a taonga - a living treasure that continued to offer our union huge historical experience and perspective, and inject fresh ideas, strategies and tactics right up to the very end - and those contributions will be greatly missed".

I wrote this at the end of Paul Watson's 2005 obituary: "He was the President of the National Distribution Union (NDU) up until his death. This is one of the two unions (the other being the former Seafarers Union) with whom CAFCA has had, and continues to have, a good working relationship. The NDU buys the biggest number of each issue of Watchdog; both Bill Rosenberg and I have spoken at seminars for its officials and delegates. Bill Andersen was unashamedly an old-style trade unionist, one who recognised the central reality of class struggle, and who set a militant tone for the NDU. I remember his pride in showing me the union's 'Battle Bus' (for use at picket lines) at its Auckland national office".

"He was unafraid to get out on picket lines and get himself arrested, even well into his 70s. He was a refreshing reminder of what unions had been, and should be again, in an age when far too many of them concentrated solely on the struggle to survive in a hostile world, and/or took to fighting each other for members. Or, worst of all, abandoned their principles to seek 'partnership' with employers or a safe sinecure as a Labour MP. Politics was his life and he lived it until he died. Bill Andersen's death really does mark the end of an era." ("Comrade" corrected me - the "Battle Bus" was actually called "Fort Knox", in honour of Jim Knox, Bill's old union comrade and former head of the FOL).

Legacy Continues Today

Paul Watson and I wrote that in 2005. I'm pleased to report that CAFCA still has an excellent relationship today with FIRST Union (which is what the NDU became, after further amalgamations). It is the only union to regularly pledge to the CAFCA/ABC Organiser Account, which provides my income. Not only that, until very recently it was the single biggest pledger. And its researcher, Ed Miller, now researches and writes CAFCA's Key Facts, with the union treating that as part of his job. Meaning that he gets paid to do it, at no cost to CAFCA. A lot of this can be attributed to the work done by Bill Andersen in the 90s, reaching out to all sorts of progressive organisations.

Reading this book was very much a trip down memory lane for me, certainly from the 80s and 90s onwards. It reminded me of half-forgotten groups, campaigns and events in which I and CAFCA were involved. Cybèle Locke writes herself into it - she was a leading activist in the Aotearoa Youth Network of the 90s (which is where I met her, when I went to Dunedin). I found myself making a few appearances in the book.

But the (former) CAFCA Committee member who appears the most times is Warren Brewer who, before he moved to Christchurch and joined CAFCA, was a leading figure in both the Workers Institute for Scientific Socialist Education (I first met Warren when I spoke at a WISSE event in Hamilton in the 90s) and the Socialist Party of Aotearoa (SPA). Warren is now in Hastings.

It would be easy to write off Bill Andersen as old school, old fashioned, an old white man. But it would be wrong. He definitely exhibited some negative characteristics such as sectarianism, and sometimes branding developments like women's campaigns as "splitters". I hasten to add that he was not some old troglodyte sexist. He fully and actively supported women unionists and women workers. Laila Harré worked with Bill at the union before she became an Alliance MP.

"He really pushed me forward, he promoted me strongly to the members, he took me to worksite meetings and to meetings with employers to observe the way he dealt with the boss. He was absolutely my kind of work mentor ... and you couldn't have a better one really". Bill was unusual among trade union leaders and communists of his era in that he was not only prepared to admit his mistakes but to learn from them, and to try and build bridges with as many likeminded people and groups as possible (which is where CAFCA came into the picture).

To quote Locke: "Trade union leaders of Bill's era often appear in New Zealand histories as weathered, grey-coated men from another age, gruff and slightly sinister, holding the country to ransom with strikes. But Bill Andersen's personality and his long and colourful life contradict this image. This social biography, centred on Bill, aims to bring him and other 1920s-born communists into the light". It certainly succeeds in doing that. This book is not only extremely thorough, it vividly brings its subject to life.

The book concludes: "Bill Andersen was genuinely 'of the working class', both by birth and by conscious identification. He remained utterly committed to improving the lives of workers through socialism. This meant not just awaiting an eventual political transformation but engaging wholeheartedly in the immediate issues that working-class people cared about, and raising their class consciousness through scientific socialist education. 'The socialist forces should stand for a peaceful transition to socialist power, but always remember that the corporates will not give up without a struggle unless they have to', he wrote in 2004. 'The real answer does not lie in reform, but in revolution'".

This One's For You, Jeremy

I got this book from the publisher for Jeremy Agar to review, as I'd done so many times before over the course of two decades. We made an arrangement to meet and hand over the book at the December 2022 Christchurch launch of "Peacemonger", which is reviewed above. Jeremy was also going to collect his review copy of that. He didn't show up at that launch but I just assumed that he'd forgotten (he'd very recently turned 80 and had started making jokes about having "senior moments"). Two days later I got the shocking news that he was actually dead (my obituary of him is elsewhere in this issue).

I would have been interested to see what he made of this book. Whenever he reviewed a book of 20th Century New Zealand history, politics, economics or biography, he was mindful of the fact that he lived overseas from 1968-98 (in Canada) and that there was a 30-year gap in his personal experience of what had happened in his home country. Plus, like Bill Andersen, Jeremy was a former member of a pro-Soviet Communist Party (that of Canada), although - unlike Andersen - not in any leadership role that I'm aware of. But now we'll never know how he would have reviewed this. This one's for you, Jeremy.

The situation vis a vis reviewing "Peacemonger" is different. I couldn't just step in and review it, because I'm a major contributor to it. For me to review it would be unethical. Fortunately, my old friend and colleague Warren Thomson agreed to do so. Which is entirely appropriate, because for years Warren has been saying: "Somebody should write a book about Owen Wilkes". Well, now they have and Warren got the job of reviewing it.

REVIEWS

- Greg Waite

HOW TO STAND UP TO A DICTATOR:
The Fight For Our Future
by Maria Ressa
WH Allen/Penguin, London, 2022

This is the story of Maria Ressa, the news Website Rappler, and the suppression of journalism in the Philippines under President Rodrigo Duterte (2016-22). The first section is quite different, covering Maria's early family life. It's an enjoyable read, but also explains how she came to be such a brilliant, hard-working and stubborn journalist. Because when you have to deal with full-on State suppression - including directly funding social media campaigns to turn lies into truth, to build on misogynist and racist attitudes to create an anti-democratic public mood - you need to be very stubborn and very clear about what's important.

I don't want to spoil the first section of the book for readers, so I'll just say Maria grew up in the Philippines until aged ten, then was abruptly moved to the United States with a new father. Both parents worked long hours to get ahead and Maria had to find her own internal strengths early on. And Star Trek played a surprising part in all this...

After this introduction the book shifts to Maria's career in journalism, which culminates in the creation of the innovative news Website Rappler. That story can't be told without explaining the changing role of corporate social media giants like Facebook and Youtube - and how they actively encouraged authoritarian campaigns around the world. Does that sound extreme? Read on, read the book, that's the facts. I'm reminded again that social media manipulation is dangerously out of control and we are worryingly ignorant of how bad it is (see my earlier review of Laura Bates' "Men Who Hate Women", in Watchdog 160, August 2022).

Here's a timely reminder about how this works from Maria's book: "On May 2014, Russia's Foreign Minister Sergey Lavrov addressed the UN Security Council saying 'we all know who created the crisis in Ukraine and how they did it ... west Ukrainian cities were occupied by armed national radicals, who used extremist, anti-Russian and anti-Semitic slogans'". But just one day earlier, a fake Facebook account with no followers and no friends seeded this exact narrative. The account went viral (via other fake accounts) and was miraculously translated into other languages. This was not a coincidence...

Philippines A Test-Bed

It turns out the Philippines is, literally, a test-bed for companies which provide social media manipulation to corrupt governments, because Filipinos spend more time on the Internet than any other nation. 97% were on Facebook in 2017. From 2015 there were reports of "account farms" creating apparently valid social media accounts from the Philippines. And in 2015 a report showed that most of Donald Trump's Facebook likes came from outside the United States, and that one in every 27 "followers" was from the Philippines. These are the tools which create social media celebrity and they are being faked by shady companies and states on a global scale.

There is a long history to present-day corruption in the Philippines. Maria describes its origins under the Spanish when the oligarchs were given their land, followed by nearly 50 years of United States rule which failed to develop an independent Government administration, ending with a US-style constitution where the concentration of presidential power encouraged close ties between the Government, the rich, and the military.

Because Maria and her team at Rappler were under huge pressure, she is constantly forced to debate with herself about her core values, what she feels she must do regardless of the personal or organisational cost. In one such debate Maria reminds the reader that once, back in the 1980s, good journalism - access to credible facts and information - was widely understood as essential for democracy. Maria grew up in that time, when journalism was a calling.

"Now I look back longingly at that era. Even in the early 2000s, the news media were still the gatekeepers, when their audiences counted on the skills of the reporters and the track record of the news organisation, when professionals on an entire editorial team made judgement calls according to the same manual. The mission was to the protect the public sphere; our values and principles had been hammered out in countless meetings and set down on paper. Journalists listened to different sides of an issue and consolidated what they learned to help the public make their own informed decisions. The pact felt sacred".

"What you saw was what we all saw. Everyone read the same articles, watched the same news reports. We agreed on the facts. There were limits to what you could ethically do, unlike the design and algorithms of social media today. In most new groups, there was an internal battle between those in charge of the business, which needed to be on the right side of power, and the independent editorial hierarchy, which needed to be responsible to the people".

"Now remove all that and replace news organisations with technology companies, which have largely abdicated the gatekeeping role of protecting facts, truth, and trust. These companies welcome an alliance with power, which guarantees market access and growth because their incentive system is built around power and money. Now, under the technology companies, the information you get is directly determined by the corporations' drive for profit. This is the transition we are living through". As a result, the truth is a heavily contested debate today, with big money weighing in on the side of pro-business news, and corrupt money funding hidden systemic manipulation.

There are surprising stories in this book too, like driving into a compound controlled by the Army during a coup - Maria sitting in the open car window with a white sheet tied to a camera stand and hoping she won't be shot by the snipers. All this just to get the bad guys' side of the story... I think I'd have gone elsewhere. But that's journalists - they're made of tougher stuff. Ninety-nine people died in that coup, 570 were wounded...

Or the time her CNN boss gave her an ultimatum - "I'm giving you six months, and if your turn-around for stories doesn't improve, we'll have to revisit your contract" (Maria was working two jobs at the time, both the local ABS-CBN News and CNN). She revamped her life, shifted her focus to CNN, and within a year the Manila bureau was CNN's most prolific for its size.

Covering Indonesia: Disinformation & Mob Violence

From 1994 Maria moved to and covered Indonesia, expanding her vision to push for better coverage of the Global South (poorer nations) in Western news media. Suharto still ruled, then came the Jakarta Megawati riots in 1996, the Asian financial crisis and the Southeast Asian haze in 1997. Suharto fell in 1998, which triggered a huge upsurge in violence. Maria talks about her interviews with leaders at the time and her growing awareness of how their weaknesses became embedded in the cultures of their people - corruption, collusion, and nepotism. "Their leaders' biggest sin was that they failed to educate their people".

"That was when I began to understand the way a large group behaves is very different from dealing with and understanding individuals. What I was learning in Indonesia was emergent behaviour... the system as a whole exerts pressure on the individuals, a kind of peer pressure exerted by group dynamics, which often makes people do things they wouldn't do if they were alone. When it leads to a group becoming a mob - whether online or in the real world - emergent behaviour is unpredictable and dangerous".

"I had never seen such fickle violence. I began to categorise what I was living through; there was not only political violence but also economic violence, religious violence, separatist violence, and ethnic violence. Every week in the late 1990s, I travelled to another of Indonesia's 27 provinces and reported on the phenomenon of mob violence".

"What I was seeing in Indonesia was something I'd seen in the Philippines and someday would see in countries around the world as the power of disinformation began to devastate the minds, and transform the behaviour, of often less educated people or those less familiar with the Internet. Education determines the quality of governance. An investment in education takes a generation to bear fruit. Likewise, countries feel the impact of this disregard for education a generation later. That determines their productivity, the quality of their workforce, their investments, and ultimately their gross domestic product. A nation's budget line item for education is an investment in its people".

After 9/11 Maria made herself an expert on al-Qaeda. This was before the modern Internet, where painstaking research, hard-copy files and a trusted network of contacts were the essential tools of research. "The more I reported, the more I could see how every major al-Qaeda plot from 1993 to 2003 had some link to the Philippines, the United States' former colony. The two biggest stories of my career had to do with the Philippines as the testing ground of two menaces threatening the United States and the world in the 21st Century: Islamic terrorism and information warfare on social media".

Head Of Network TV News

In 2005 Maria moved back to the Philippines to head ABS-CBN News, firing a third of what she described as a bloated organisation. "Bit by bit, we began to change a culture that emphasised loyalty above performance, demanded blind obedience, suffocated initiative, and emphasised group loyalty instead of the greater good".

These were troubled times for the Philippines with President Gloria Macapagal Arroyo facing multiple coup attempts and beginning the undermining of free journalism which later accelerated under Duterte. ABS-CBN responded with innovative journalism, including citizen-reporters who could uncover local corruption, campaigns to encourage voter turn-out, and organised better debates between politicians.

"Every month for 12 months, we hosted different politicians for debate. Each month, we also added in another layer of engagement. One year before the elections, we gathered the presidential candidates in front of a live audience of students. We layered in Internet engagement, particularly with the relatively new platforms of Facebook, Twitter and Multiply, and instituted live bloggers for each candidate and live chat session on our own news Website".

"In March 2010, we hosted a vice presidential debate in which all of the candidates faced off, rotating two at a time at two podiums that faced each other. One candidate would ask a question of the other, who then had a certain amount of time to respond. We posed a simple question to our audiences on Twitter, Facebook and other online platforms: 'Do you believe what he/she said?' We put the results on screen instantaneously".

"We monitored the impact of our experiments. In July 2010, a survey by the trusted polling institution Pulse Asia showed Filipinos had reached the highest level of optimism nationwide since their surveys had begun in 1999, with 53% of people feeling optimistic and only 11% pessimistic. Our plan had worked. It worked, that is, until the old-style network effect - the power of the country's largest media organisation - was turned upside down by technology's own, far more powerful network effects".

Rappler

This is a reference to the beginning of social media manipulation, which Maria became much more aware of after she was fired in 2010 for resisting the appointment of a former Vice President under Arroyo as prime-time news anchor for ABS-CBN, and started the independent Internet-based news organisation Rappler.

Founded by four women journalists in 2011 "we all believed in the power of journalism - its mission and its standards and ethics. We all worked hard, 14 to 16-hour days, and were used to being in the daily trenches of the creation of news. And we all wanted to create something better than what we had lived through before".

"It was a grand experiment: we wanted to put television news in our viewers' pockets on their mobile phones; in 2010, that was still a dream. We all wanted to do more than just tell stories. We believed that excellent journalism could change the world; we had a theory of change. We imagined three interlocking circles - investigative journalism, technology, and community".

"We launched our first public event on social media: a four-hour workshop for 500 students at the University of the Philippines in the cool northern city of Baguio, about a four-hour drive from Manila. The idea was to train those students in how to use social media for good. The title of my keynote address was 'Social Media for Social Change'".

"I cringe now when I remember that presentation. Those very same developments I welcomed in 2011 would soon be fine-tuned by the platforms' business models, co-opted by State power, and turned against the people, fuelling the rise of digital authoritarians, the death of facts, and the insidious mass manipulation we live with today".

Rappler was on the front line of both innovations to use social media for good, and the counter-reaction - authoritarian manipulation of social media. The real impact of rule changes in the algorithms behind social media, and the rapid rise of misuse of social media by companies which operate outside public scrutiny, was analysed by Rappler as the company struggled to survive.

Timeline Of Key Events

It's a complex story, so I'll reduce it to a timeline of key events:

2010: Philippines overtook India as world's top call centre and business process outsourcing hub; many foreign businesses experimenting in grey areas came too, because of lax regulation.

2011: Rappler becomes the Philippines third top news site in its first year.

2013: Rappler monitors the public mood, tracking and reporting on attempts to manipulate opinion.

2014: Rappler reports on Philippine Long Distance Telephone Company use of fake accounts to shut down rival providers’ marketing.

2015: Reports of "account farms" creating fake phone-verified social media accounts.

2016: Rappler runs crowd-sourcing anti-corruption campaign and tracks election "astroturfing" (fake promotion via paid likes); Rappler briefs Singapore Facebook team on abuse of their platform and warns Trump could win as a result but hears nothing back; June - Rodrigo Duterte elected President with 39% of the vote on promise to kill "drug pushers, holdup men, and do-nothings" and a wave of police killings averaging 33 per night follow.

September - after a bomb in Duterte's home town, Government-backed social influencers promote a six-month-old story linking a different bomb to the communist New People's Army to support his declaration of a "nationwide state of lawlessness"; October - Rappler publishes a series of articles on weaponisation of the Internet but the Website is overrun by automated posts.

2017: Trump elected US President; Google suppresses internal research "Patriotic Trolling: The Rise of State Sponsored Online Hate Mobs"; Duterte falsely claims Rappler is foreign owned; Philippines government puts social influencers on the payroll, including an all-girl band best known for dispensing sex advice, they begin a coordinated campaign to undermine journalists as biased "presstitutes", followed by campaigns to paint the rival Aquino family as elite and out of touch with the lives of ordinary Filipinos, to attack Vice President Leni Robredo, to unfollow Rappler, and finally to seed the ideas "journalist equals criminal" and "arrest Maria Rappler" to lay the groundwork for future legal harassment.

2018: Multiple charges against Rappler filed by the Securities and Exchange Commission (SEC), SEC revokes Rappler's licence; Rappler forced to spend large part of its budget on lawyers, increase security six times in response to online and real-world harassment, and shifts to crowd-funding to survive; Facebook "overhauls" its news feed, prioritising friends and family, deprioritising news so facts reached fewer people and news advertising revenues fall.

Cambridge Analytica scandal reveals illicit private harvesting of personal data for political campaigns including Brexit and Trump; Facebook shuts down API interface which enabled third parties including Rappler to gather data and analyse media manipulation; Facebook inflates value of video to encourage news services to shift into video, which increases addiction and Facebook's income.

2019: Philippines is now the global leader in online fraud attacks, both automated and human, way ahead of the US, Russia, the UK and Indonesia; Maria arrested and released on bail, needing to apply to up to 36 courts before travel; charges against Rappler's Board of Directors; Rappler breaks even for the first time, gives the same bonus to all staff.

2020: Government shuts down ABS-CBN TV, leading to daily protests against the Government ban; March - covid lockdown; Carol Cadwalladr, the UK journalist on the Cambridge Analytica story, forced to mortgage her home to defend a libel case from the UK's largest Brexit donor; Maria steps back from editorial role due to restrictions on access to interviews, joins advocacy group Real Facebook Oversight Board to promote social media reform, notably banning ads which delegitimise election results; faced with "Trump's increasingly unhinged behaviour" Facebook acted but without admitting fault.

2021: After the violent attack on Capitol Hill in the US Facebook admits it can adjust its algorithm to dial up facts and reduce transmission of lies; Rappler examines online data after 15 members of human rights group Karapatan are murdered then smeared online, finds new social media manipulators linked to the Philippines military; Facebook prioritises Government sources to help spread covid health information, inadvertently supporting military misinformation; Maria shares Nobel Peace Prize; Rappler collaborates with competing news agencies to share disinformation analysis, partners with civil society groups to promote fact-checking and sharing.

Cambridge Analytica

The book also includes Maria's revealing conversations with Cambridge Analytica's whistle-blower, Christopher Wylie. "The way SCL, and later Cambridge Analytica, would make money is they would go into countries with relatively underdeveloped regulatory infrastructure or questionable rule of law", Chris explained, "where it was easy to get away with things and create propaganda and support politicians who would be willing later to pay back favours. So, the Philippines is one of those countries where you've got a lot of people online and a lot of people using social media. So, when you've got that kind of setup, it's an ideal target." "Target as in a place to experiment?" Maria asked.

"Yes," Chris said. "...Whether it's manipulating voter opinion or disseminating propaganda, it's more difficult to do that in countries like the US or Britain or Europe where there is a robust regulatory action... In countries… where corruption is rife, it creates an ideal petri dish type situation where you can experiment on tactics and techniques that you wouldn't be able to do as easily in the West".

"And if it doesn't work, it doesn't matter, you won't get caught. If it does work, then you can figure out how to port that into other countries. The company worked in a lot of places in Southeast Asia and in Africa as well as the Caribbean to play with ideas and to try to develop technologies before it would then port it onto the West".

"...They don't go into the country as Cambridge Analytica. You use proxies, they're on camera admitting to this. They go into countries, set up bullshit companies that are just fronts and they send in staff. It makes it very difficult for regulators or Opposition parties to actually identify what's happening. And as they have also admitted, once an election is done, they just get out. So, they're in. They're out. They've got their guy in, and then you know they can come back and ask for favours".

"Okay," Maria interrupted, "Alexander Nix (the Cambridge Analytica President) came to the Philippines at the end of 2015 before the campaigns began, and there was a photo of him with the staff of Duterte".

"Yeah, he met with people there," said Chris. "What do you think he was doing there?" Chris asked. Maria's conclusion: "I believe that Facebook represents one of the greatest threats to democracies around the world, and I am amazed that we have allowed our freedoms to be taken away by technology companies' greed for growth and revenues. Tech sucked up our personal experiences and data, organised it with artificial intelligence, manipulated us with it, and created behaviour at a scale that brought out the worst in humanity".

Whole New Model Of Global Civic Engagement Needed

This is Maria's advice - avoid thinking about "us against them". Stand in someone else's shoes, do unto others as you would have them do unto you. Instead of responding to fear, open up to trust, friendships and new experiences can follow. Embrace your best values: honesty, vulnerability, empathy, moving away from emotions, embracing your fear and acting, believing in the good. You can't do it alone. You have to create a team, strengthen your areas of influence. Globally we need to build a whole new model of civic engagement.

Maria Ressa was interviewed by Kim Hill on Radio NZ (18/2/23).

MADOFF
The Monster Of Wall Street
A Documentary By Joe Berlinger
Netflix 4-Part Series

"Madoff was a big deal on Wall Street, itself the centre of the world's financial system. He was three-times chair of the Nasdaq Stock Exchange and regarded as a statesman of the Street. He was a market-maker (a middle-man between buyer and seller) who processed, at one point, around 7% of the trade on the New York Stock Exchange. He had spent decades in the business and by continuing to buy unwanted stock (and therefore keeping the market functioning) after the 1987 Black Monday crash his reputation soared further" (Irish Times).

The up-front story here is a Ponzi scheme, where there is no viable business. Instead, new funds are used to pay returns to existing customers. More specifically it's described as an "affiliation Ponzi", where public scrutiny is avoided by restricting access via personal introductions to a limited number of very, very rich people.

Hedge funds are portrayed as private, for private super-rich types with large sums to invest. It's not that simple though. Madoff targeted private "charitable" foundations because federal law required them to pay out 5% of their funds each year. That allowed the Ponzi scheme to go undetected for a long period because he only had to return 5% of incoming capital each year. Targeting charities avoided the threat of sudden or unexpected withdrawals.

His Sons Ran Legitimate Side Of Business

The legitimate trading arm of Madoff's business, run by his two sons, was one of the top market makers on Wall Street, and when it collapsed in 2008 was the sixth-largest. "Two floors below was the 'investment' arm where the Ponzi scheme was run from. It was grimy, used old mainframe computers and its client statements were printed on an ancient dot-matrix printer".

"This was Madoff's secret unregistered investment advisory firm, born in the early years of his career and dodgy from the outset. No trades took place here. Instead, fake paper trails and computer systems are created by working-class high-school graduates, groomed from a young age to do Madoff's dirty work" (Guardian). They had been hired from lowly positions, were earning many multiples of what they ever expected and were uber loyal.

"Some of the anecdotes about how they would pull this off are stunning, including using the stock data from the day before on statements and manhandling printouts when the authorities came to see them so they didn't look freshly printed. At one point, a hot document off a line printer was put in the fridge for a few minutes so it wouldn't be so new. It's jaw-dropping and reveals how Bernie didn't do any of this alone" (Roger Ebert review).

"The consistent (made up) double-digit returns attracted more money and the Ponzi scheme grew and grew. If someone wanted out, he paid them from incoming money, but not a lot of people wanted to take their money away from this apparent genius investor. If you questioned the returns or sought proof of stock purchases, the standard Madoff bluff was to say that he didn't have time to explain himself to a mere single investor and that he would simply wire their money back if they were unhappy. Most told him not to" (Irish Times). The 2008 stock market crash meant no new incoming investment, so not enough money to pay returns, and it all came crashing down. Madoff admitted the fraud, was sentenced in 2009 to 150 years in prison, was refused bail for illness and died in prison in 2021.

Plenty Of Danger Signals

There were plenty of danger signals for those who cared to dig. The accounting firm Madoff employed to audit his books was a one-man operation run from an office park in the New York suburbs; the volume of option trading entailed by the amount of money he was supposedly managing would have far exceeded the capacity of the derivatives market; and the returns he claimed to be generating were far too steady and reliable to be plausible. In his guilty plea, Madoff admitted that he had not actually traded since the early 1990s, and all of his returns since then had been fabricated.

Harry Markopolos, a portfolio manager for Boston-based Rampart Investment Management, was asked to devise something to compete with Madoff's stock strategies, which seemingly never lost money. It took Markopolos less than five minutes to figure out that Madoff was running a Ponzi scheme. He harassed the Securities and Exchange Commission (SEC) for nearly a decade, firing off emails with such subject lines as: "The world's largest hedge fund is a fraud".

The SEC, on whose advisory committees Madoff often sat, did next to nothing. "I realised I was at personal risk," says Markopolos, on learning that Madoff was managing money for some of the world's most dangerous people (and prestigious banks). "I started carrying a gun and checking my vehicle for bombs".

And here is a comment on a Madoff story in the insider magazine Wall Street Journal: "missing from the commentary is the reaction (or abdication thereof) by the SEC. As the documentary makes clear, the SEC whiffed on Madoff, in part, due to his prominence in the Nasdaq, his avoidance of registering his hedge fund, the change in agency priorities after 9/11 and persistent underfunding and understaffing. The hollowing out of Government and agency ties to industry continue to present a fascinating commentary on our priorities".

Largest Accounting Fraud Ever

Was anyone else ever held accountable? In 2014, five of Madoff's employees were found guilty for their part in the Ponzi scheme. In 2009, Madoff's accountant and lawyer David G Friehling faced a maximum sentence of 114 years in prison, but was later fined and sentenced to just one year of house arrest and an additional year of a supervised release instead. Being directly responsible for fraud as an employee is apparently barely a crime in the US. Meanwhile at the SEC, (share market regulator) seven people were "disciplined but not fired". This $US64 billion scam was the largest accounting fraud ever (Wikipedia).

Here is the telling point though. None of the major derivatives firms traded with him because they did not believe his numbers were real. None of the major Wall Street firms invested with him. If you were an insider talking over drinks with these guys, of course they knew this was a fraud, but none of these big companies did anything. Remember, he was a market-maker (taker of share trades) in down times, because he had to be. He had to trade shares even in bad years to keep up the pretence of the miraculous steady returns he guaranteed to his investors.

Everyone knows you can't pick good returns all the time. Insiders know this more than most. But this fraud was helping them make money in the tough times. No-one is going to speak up until it can't be avoided, because this is a system geared to short-term corporate profits for as long as possible. So, don't be surprised when the next recession throws up more "surprises". Who knew that crypto-currency was an unsustainable money laundering scheme? Who knew that US junk-bond corporations were broke? Everyone.

REVIEW

- Linda Hill

RENTIER CAPITALISM
Who Owns The Economy And Who Pays For It
by Brett Christophers
Verso, 2020, $40

"The current transformation of capitalism is characterised by a full-fledged comeback and proliferation of forms of rent".

This first page quotation from University of Paris economist Carlo Vercellone was written in 2008, as financial markets crashed around us.(1) In Rentier Capitalism, Christophers investigates that "fully-fledged comeback" in the UK economy, exploring a "bewildering array of contemporary rentiers" - including some I would not have thought of. This book is about Britain, but it is very relevant for thinking about foreign and local "investment" now operating here.

Christophers defines "rent" as profit extracted from ownership and control of an asset, as distinct from profit extracted from labour power in production and other enterprises.(2) The control is made possible by monopoly ownership, within an economic, political and fiscal environment which rentiers and their wealth actively help create. This focus on monopoly differs from Keynes's* on scarcity of capital, tied in his day to the availability of gold. It also differs from a current neo-liberal definition of rent and rent seeking as only excessive profits, beyond that needed or reasonable in a well-functioning competitive market. Note an assumption that competition produces market fairness.

*John Maynard Keynes (1863 - 1946) advocated Government spending on public works to stimulate the economy and provide employment. He was the most influential Western economist for several decades after World War 2, until he was supplanted by the monetarists. Keynes is now very much back in vogue. Ed.

Christophers instead sees monopoly as a natural result of winning the market competition in order to control assets and their flow of revenue. "Rent" is not paid for a resource or product or service received by customers, but to access or use an asset. Purely by virtue of owning and controlling something valuable, and without the effort of producing anything themselves, rentiers have the capacity to generate future income.

Christophers explores seven kinds of rentier capitalism and their impacts: financial; natural resources (carbon-based); intellectual property; digital platforms; contracts; infrastructure; and land. There's a lot to think about in this book, which includes a wealth of fascinating, well-referenced detail. I'll try to summarise his arguments, and leave you to apply these to the New Zealand experience.

Financial Rents

Let me first summarise UK economic history in a sentence. After two World Wars, a Great Depression and a couple of decades of Keynesian governments "anaesthetising" banks, the old rentier class of land-owning aristocrats-turned-bankers, the liberal bourgeois merchants-turned-bankers, and new moneymen spawned by neo-liberal Thatcherism transformed the old Empire for colonial resource extraction into a new financial empire-cum-tax-haven.(3)

It centres on the City of London (not to be confused with Greater London) whose independence and privileges date back to 1066 when William the Conqueror had to borrow funds for the aforesaid conquering. Together with its off-shore islands, this financial hub can be said to suck investment from productive parts of the UK economy and from other economies.(4) Christophers quotes journalist James Meek that the UK comprises 2% of the global economy, 0.87% of the world's population, and curates 18% of the world's international bank liabilities.

Financial rentiers make money out of money - extracting interest from loans, fees from financial services, and capital gains from trading in shares, commodities and various financial instruments. Banks' assets are, of course, everyone else's deb(i)ts, which are leveraged to buy and sell more debt. UK banks operating overseas and in that mythical realm called "off-shore", plus overseas banks operating in London (especially in Euro-dollars), complicates the data, but the ever-expanding flood of financial assets swirling in and out of London from the 1970s captured Treasury and fiscal policy. Neo-liberal ideology captured Thatcher and New Labour, who privatised publicly-owned assets and deregulated the financial sector.

Christophers uses Barclays Bank to illustrate modern banking: a "quintessential rentier" using "balance sheet capitalism" to farm its assets (our debts) efficiently. Barclays' superior performance at this in 2009 enabled a doubling of profits and eye-watering executive bonuses, in a period of painful austerity. Banks and financial markets had, of course, just crashed the planet again and been bailed out by governments and taxpayers.

A graph shows the phenomenal mushrooming of bank assets, compared to gross domestic product (GDP), since the 1970s, which has dropped little from its 2008 peak. This is the asset stock available to UK financial institutions to earn them rent. Most of the growth came from a colossal increase in household mortgage debt, followed by "the capitalisation of almost everything". Financial activity within the sector involved multi-layered buying, selling and swapping of access to income streams from securitised debt.

The non-interest income of UK banks increased from about a third in 1984 to around two-thirds in 2006. Christophers' coverage of derivatives, collateralised hypothecation, 'repos', etc. is perfunctory - try John Lancaster's "Whoops" and John Kay's "Other People's Money" on financial crashes. He focuses on how the Conservatives and New Labour enabled the expansion of credit/capital and supported the profitability of banks and other financial players through a "big bang" of deregulation, removal of most capital gains tax, stamp duty, and value added tax (VAT) from financial and insurance services, high interest/low inflation monetary policy, and prolific use of tax havens in the UK's own overseas territories.

Underpinning this is what the International Monetary Fund (IMF) has called an implicit State subsidy - the expectation that if things go pear-shaped, mates in Government will prevent banks from failing. They did, and they did. Bank trading income bounced back within two years, at the cost of austerity policies for others.

There's a lot in this expansion of capital and the UK financial sector that would have surprised Keynes, says Christophers. Here he makes his argument that financial rentier power derives from control over capital, rather than its scarcity. Banks had long had almost complete control over the supply of new credit (97% of total money supply).

Concentration of UK bank ownership was markedly increased by the 2008 crash: the seven largest banks now control 75% of domestic banking assets. Those banks maintained profitability by not passing on the low quantitative easing (QE) rates of interest on required bank reserves. There's more discussion and detail about the UK financial sector, and its impacts on most households, than I can cover here - I recommend reading it.

Natural Resource Rentiers

The UK State owns all gold and silver rights and fuel rights; other mineral rights are held privately. For these assets to produce rentier profits, they need to be discovered, economically worth developing, and under secured ownership. Christophers illustrates what lengths global mining corporations go to, to ensure this. Moreover, mining companies' capital assets include "proven", "probably" or "possible" reserves still in the ground - "not so much practical facts as performance artefacts" - which matter because corporate share value is a future-oriented phenomenon.

In the UK, from 1974 the big resource extraction assets have been North Sea oil and gas, with coal phasing out. Manufacturing, employment and unions all declined as capital was sucked into non-unionised North Sea mining, massively supported by the Thatcher government. Its contribution to national economic output declined rapidly at the end of the 1980s but was still above early 1970s' levels until 2010.

Natural resources' contribution to Christophers' analysis of rentierism is much larger than this brief peak would suggest because many of the world's largest resource corporations are UK-based, listed on the London Stock Exchange. They extract their rents elsewhere, their histories saturated in the political economy of empire and indigenous dispossession.

There was nothing in principle to prevent UK governments from developing the North Sea fields themselves, monopolising and capturing natural resource rents, as the Saudis do. Instead, under Thatcher, they granted enormous tracts for seabed exploration, reduced public holdings in licensed mining corporations, then fully privatised them. The resulting North Sea industry was oligopolistic and anti-labour. A business-friendly fiscal regime of royalties and income and mineral taxes was implemented "to support British competitiveness" in response to industry lobbying. Had the UK's effective tax rate equalled Norway's, its oil and gas receipts could have been £111 billion higher.

Unemployment and immiseration in the 1980s did not lead to widespread social unrest - although coal miners did their best. The Government's North Sea receipts were sufficient to fund the considerable rise in social security costs resulting from industrial dislocation and mismanagement. They also paid for the tax cuts essential to Thatcher's continuing electoral success.

Christophers makes a telling point about oil and gas rentiers in the Guardian.(5) Their trumpeted transition to becoming "energy companies" will not turn on the relative cost of renewables, but on profitability. Lower barriers to solar and wind technologies mean more competition, less monopoly power and less profit. So, BP, Shell and Total continue to invest in hydrocarbon production. To achieve net zero, he says, we'll need to take a far more radical approach than relying on market forces and carbon pricing.

Intellectual Property Rentiers

Alongside finance, other "buoyant" areas in the UK economy have been aerospace, pharmaceuticals and the creative industries. Christophers identifies a commonality: all three are highly intensive in their use of intellectual property. High revenues earned by corporate owners of intellectual property (IP) are clearly rents.

Most creations of the mind are not "assets" in Christophers' sense - unless the law recognises and polices exclusive property rights over them, through patents, trademarks, designs and copyright. The rationale for this monopoly power is that it stimulates investment and innovation, and a return on investment. The owner may exploit the IP themselves - e.g., AstraZeneca, or the Harvard mouse for cancer research. Or licence it to a third party for a royalty or fee - e.g. Microsoft, "probably the most prolific rentier in capitalist history", and McDonald's, whose franchisees pay royalties for the brand, restaurant design features, menu and recipes, as well as land rent for its buildings.

Christophers says there is no evidence that patents and other monopoly protection laws support innovation or competitiveness. IP rights prevent others from competing with the same or too-similar products. The current owner may or may not have created the intellectual asset themselves, and is more likely to sit and hatch the egg they've got than to lay more. The UK, its IP lobbyists and its courts have been active players in the extension of IP rights to other jurisdictions, as Christophers recounts in detail. Adherence to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is now an implied part of World Trade Organisation membership.

The monopoly periods for different IP types are finite and vary, but "rentability" is being extended with "evergreening" strategies, by pharmaceutical companies in particular for drugs for long term treatment (HIV, hypertension). These include: recycling slightly changed drugs as new ones; changing the delivery system; applying for an "off label" use; launching a "citizens' petition" for continued availability; suing for patent infringement to delay a generic drug manufacturer getting to market, or simply paying them to delay.

Platform Rentiers

This is the most recently developing and smallest form of rentier capitalism in the UK. Platform rentiers create and shape online means by which others connect or trade with each other. This includes labour platforms (Uber for car rides; Deliveroo for food; Taskrabbit for household services, Upwork for freelance professionals); capital platforms (Airbnb accommodation in private homes; Turo renting private cars); commodity platforms (eBay, London Stock Exchange, Flutter peer to-peer betting); attention platforms (Facebook, Google, price comparisons, real estate portals).

The rentier charges a fee or sells ads ("selling eyeballs"), and can dictate or manipulate how the intermediation between parties operates (Uber sets low driver rates; Google prioritises sites and personalises ads). Data about digital trades is sold by the London Stock Exchange Group (as well as its trading and settlement services) and about people by Experian, a global leader among credit reporting agencies.

So far, Christophers says, other kinds of platforms do not sell data, including Facebook, "the biggest surveillance-based enterprise in history" - the Cambridge Analytica scandal excepted. They mine data in-house for their own purposes only, for the reason that tailoring data-mining to each client's needs, and pricing that, presents difficulties and incurs transaction costs.

The huge profits of, for example, Google and Facebook demonstrate platform rentiers' monopoly power. Digital market monopoly by early adopters is increased by "network effects" - the biggest network works best for users on both sides of interactions. Profits are also increased by economies of scale, by buying up rivals, and by using dominance in one market to start up in another. Choice and innovation are suppressed. Global platforms register in one country and operate in others, for purposes of tax "efficiency", including exemption from UK VAT.

The UK uses the highest number of digital platforms in Europe, by size of publicly-listed companies or by employment in platform-mediated work. Christophers attributes this to the UK's accommodating political, regulatory and legal environment, and to lobbying power. It was not the Government, but a Labour Mayor of London who twice withdrew Uber's Transport for London licence. Uber is banned or restricted in Denmark, Germany, Italy and Spain. Digital platforms for labour are a new form of "putting out" that contributes to the growing, insecure "gig economy", in which pay and access to social protections are considerably lower.

Contracts Rents

What we often think of as "outsourcing" is harder to grasp as a rentier practice. Competitive outsourcing decreases costs, increases productivity (revenue per head of employees), and thereby profits. This is the logic of global commodity chains. Businesses traditionally outsourced accountancy, auditing and legal work - now it's the entire "back office", including human resources.

Corporations focus on "core competencies" and outsource other functions - mainly within UK, says Christophers, but also shifting manufacturing and other operations to contractors in countries with cheaper labour. Everything is ordered "just-in-time", with subcontractors carrying downtime and risk. BP, a North Sea resource rentier, no longer does even its own drilling.

Public sector outsourcing is not privatisation, because ownership is retained. It can be goods procurement or services, e.g., a contract for Serco to build a prison and/or operate it. In the UK it started with the Thatcher government requiring competitive tendering by local councils, then by central Government agencies. This shifted financial risk and jobs off the public books. Cost cutting through competitive bidding forced down wages and conditions for workers who were already low paid. Some general contractors grew huge - Serco in the UK, Spotless and Downer in Australasia.

But, in Christophers' analysis, if a contract is for three years rather than by the job, that's a rentier. Contractors do the work, they don't live idly off rent, but their contracts are a major asset for their business. They don't have to compete in a market every day like most businesses; they are assured of earning rent on their asset. The longer the contract, the bigger the asset. Investors see contracts as company assets on the balance sheet, so scoring new contracts becomes a central business objective.

Contract capitalism/rentierism is a bigger slice of the UK economy than even finance or land, Christophers says, although this is hard to assess as it cuts across industry categories. Maybe £207 billion in 2009, or 8% of UK economic output. Of that, 40% would be in the public sector, especially health and defence. Many State-funded contracts are small, and the average length is four years nine months, longer for IT. However, 25% of the total value is earned from contracts lasting five years or more. A HM Revenue & Customs IT contract with French-based transnational Capgemini has been running for 17 years.

Winning contracts is one thing, fulfilling them is another matter, and Christophers gives examples of chronic underperformance. His key point that the monopoly inherent in rentier capitalism stifles innovation, research and development (R&D) and investment applies here, in the difference between competition for the market and competition in the market.

A fifth of UK Government contract money goes to around 30 companies dubbed "strategic suppliers". The bigger and more complex the job, the more reluctant governments are to swap contractors, the more concentrated the ownership of contracts, and the more profitable. With Private Financial Initiatives - what we call Private Public Partnerships - the Government pays out capital, operational costs and profit together in instalments over 20-30 years. That keeps the cost to Government out of this year's public deficit. Instead, the debt is an asset on a private sector corporate balance sheet.

Infrastructure Rents

Infrastructure is a physical "platform" used by others. Rentiers build and provide an infrastructure that gives them first mover advantage and consequent monopoly. They can then expand it to other products, or they "rent" the infrastructure out to others (Amazon Web server farms, supermarket distribution networks, electricity retailing). No-one else is big enough to build a new infrastructure that can compete.

Except most UK infrastructure rentiers didn't build it themselves. They acquired infrastructure that is indispensable to the delivery of public utility services, built by the State at high cost to taxpayers, from privatisation in the 1980s. The UK was "the world's undisputed privatisation trailblazer", says Christophers. Most are 'natural monopolies' as it makes no sense to have, for example, two electricity networks or two sewerage systems. Railways, water supply, telecommunications, airports, the broadcasting spectrum. He details the consequences of the cut-price privatisation of these in monopoly pricing, reduced innovation, reduced (re)investment in the infrastructure, and poor services.

In market theory, high monopoly prices attract competition. With the exception of new tech companies in the mobile spectrum, that didn't happen. Why waste capital on establishing a competing company when you can share in existing monopoly profits via the stock market? "Light touch" State regulators did consistently little to increase competition, and National Infrastructure Plans "continue to ensure regulated infrastructure networks remain an attractive place to invest". UK infrastructure became a magnet for overseas investors, many exempt from UK taxes. This raises share prices. Some rentier corporations chose to delist to protect current owners and their returns. Some raised finance through loans, including from their own shareholders, rather than through equity.

UK State regulators focused on consumer pricing, using the formula "RPI - x" - that is, the UK inflation-adjusted consumer price index minus a certain annual amount to spur productivity. The "x" totally underestimated infrastructure corporations' strategies for increasing profit by reducing labour numbers, wages and unionisation, financing via interest-deductible debt loading, and "efficiency gains" that reduced the quality of services.

Thames Water is perhaps the worst but by no means the only example. In the 11 years it was owned by Australian bank Macquarie, debt was increased by £2 billion, the Thames and other rivers were extensively polluted with sewage in 2012-14, it failed to reduce leakages of millions of litres per day and was fined a few million in 2017, yet in the same year paid investors £100 million in dividends. Christophers lists the 2018 operating profits of 11 major UK infrastructure rentiers, ranging from a very enviable 23% to a jaw-dropping 64%.

This privileging of investors also shifted the distribution of risks. Here Christophers quotes Financial Times editor Jonathan Ford: "The purpose of privatisation was to pass the operational and financial risks of utilities to the private sector ...private owners have been allowed to transfer these risks onto the shoulders of consumers".

Land Rent

Property is what most of us associate with the word rent. Land rentierism, along with financial rentierism, has deep historical roots in the UK. In Christophers' analysis, the neo-liberal era gave land rentierism renewed impetus. When water, electricity, coal and rail were privatised, as much as one million acres of land passed into private hands along with the resource and infrastructure operations. Consequent sales of "excess" land for private agricultural, residential or commercial development can be understood as land rent in capitalised form, "releasing" value for shareholders.

New owners also became landlords, renting out surplus properties, or developing land themselves. Over four decades, a further 1.6 million acres of public land was sold - about 8% of Britain by area. Local councils and State agencies also sold "excess" land to balance their books, or were forced to by Government legislation in 1980 and 2016, to a very short deadline. Publicly owned land was sold into private hands at hugely under-valued prices. A modern-day enclosure of the commons.

Over the last century, land rent has predominantly been generated from urban property, commercial or residential. From the 1990s, huge public housing stocks were sold off. Under the 1980 Act, council housing was sold under low interest "rent to buy" and "buy to rent" programmes. With the financial sector deregulated, rules went unenforced. Owner-occupiers sold houses on. The result was not a "property-owning democracy". Owner-occupation is now just seven percentage points higher than before 1980. It was a transfer of housing wealth from the State to the existing rentier class and its new members, says Christophers.

With less social housing to influence the market rate, residential rents increased markedly (despite a post-2008 dip). Rent controls and long tenancy rights were reduced, then ended, by legislation in 1988 and 1996. Population growth, social housing shortages and a low build rate also contributed. In 2017 private owners of rented residential and commercial real estate were taking in about £90-£100 billion a year from tenants in rental payments. For the bottom income deciles, rent increased to a half share of disposable income. Although, as Christophers notes, it's not "disposable", as you have to have somewhere to live.

Unaffordable rents had increasingly to be subsidised by housing benefits, and some councils bought back council housing, at higher prices. Similarly, in 2014 the renationalised Network Rail bought back a hundred sites for £200 million "representing pure rentier profit". These increases in rents and property prices reflect the exchange value of urban land, which inflated from as little as 2% of house price in the 1930s to something like 70% today. From the 1980s to 2017, house prices increased five-fold in real terms, supported by the widening, deregulated credit.

Land rentiers - Christophers means those explicitly in the business, rather than owner-occupiers - thus benefited from both high rents and high capital value gains. They also benefit from planning rules and permits, and from new infrastructure paid for by others. They lobbied for such changes. He quotes John Stuart Mills: "They grow richer, as it were, in their sleep, without working, risking or economising".

From 1992 to 2004, the largest contributor to economic growth in the UK was "letting of dwellings", which exceeded "banking and finance". From 2005 this statistic was split in three: real estate activities for a fee, owner-occupied housing, and "buying, selling, renting, operating of owned or leased real estate". The last showed fastest growth over the next decade, double that of any other sector. Moreover, between 1995 and 2014, the market value of land itself increased by 460%. Meaning that land's share of the UK's non-financial wealth increased from about a third to about half now.

Not surprisingly, this hot UK property market attracted overseas investment and speculation, especially in central London.(6) But the State recoups nothing from the massive wealth generated. There is no annual land or property tax, and almost no capital gains tax on land value. Little inheritance tax is paid by owners of farmland, with the largest 10% by acreage receiving 50% of European Union (EU) farm subsidies. Publicly-listed real estate investment trusts (REITs) were exempted from corporate tax by Labour in 2007.

Christophers categorises the biggest corporate landowners: property companies, REITs, financial investors, property developers, infrastructure rentiers, and "others" - which includes land-banking by supermarkets. He tells stories about some extremely wealthy land-owning individuals. Mills and Marx were probably talking about the same titled families, but there is also brash new money. Most own farmland and commercial property such as retail premises, offices and hotels.

Much of the strongly growing rental housing sector - 20% of dwellings - is privately owned by what Thomas Piketty calls "petit rentiers" and John Key calls "Mum and Dad investors". Probably with a mortgage, but their eye on capital gains (which in February 2023 was finally dropping (7)). Such people getting on the rentier ladder may sound progressive, but around half are already in the top decile of UK housing wealth - rich compared to tenants with rising rents.

Christophers shows how the growth of petty rentierism is at the same time the growth of wealth inequality. Christophers addressed land rentierism more fully in an earlier book, "The New Enclosure: The Appropriation Of Public Land In Neoliberal Britain" (2019). He is a Professor of Social and Economic Geography at Uppsala University, Sweden.

What Is To Be Done?

"Rentier Capitalism" shows that the central effect of neo-liberal reforms in the UK was to open up whole new income streams that owe little to productivity and a great deal to gaining a stranglehold over those who depend on the services provided. The privatisation of public infrastructure was largely a disaster, says Christophers.

North Sea oil and finance were rentier booms that contributed little to the rest of the economy, where capital investment and R&D fell steadily. It was the restoration of capitalist class power after the Left shift and rising wages of the 1960s and 1970s. From the 1980s, wealth inequality increased, while wages and labour's share of national income fell. London is the financial hub of the world, but four million people in the UK are living in poverty.

Commenting on Christophers' work, William Davies(8) says many political economists see re-establishment of the supremacy of asset owners and financial elites as a deliberate political project through monetarism. Inflation decreases wealth and debt, so "it was only after Thatcher had strangled the life out of inflation (and much else besides) that the City and the housing market could begin their dramatic ascent... an unleashing of capital to chase the highest returns possible, regardless of any broader social or economic benefit".

Christophers says he doesn't have all the answers, but suggests four areas for action. He proposes strong competition policy; major changes to corporate and wealth taxes; a pivotal role for Government with a State investment bank redirecting the economy for a low carbon transition; underpinned by different forms of ownership - public, community, co-operative - that spread economic rewards and democratise decision making. Shaping our future is as much about politics as about economics, he says.

In 2019, Labour under Jeremy Corbyn proposed bringing rail, mail, water and energy back into public ownership. It proposed increases to wealth tax, minimum wages, council housing and National Health Service funding, staying in the EU and a Green New Deal. Labour lost the 2019 election, for reasons that included a smear campaign about anti-Semitism(9) and media misrepresentation that owner-occupied homes would be taxed. But younger people - the renters, not the rentiers - overwhelmingly voted for Labour's policies. They are the future.

Labour's is not the only voice, or the only country, calling for redirection of the whole economy, a State investment bank and a Green New Deal. For example, Mariana Mazzucato(10), Institute for Innovation & Public Purpose, proposes a "mission economy" that goes beyond mitigating climate change to establish "green growth" opportunities for investment and innovation. This will require "courage in the policy arena, unlocking hoarded investment and supporting workers", with civil society as the major stakeholder. It will require not just tax incentives and disincentives, but cross-sectoral industry plans and "patient long term strategic finance" from a State development bank.

Saving Capitalism Is Logically Undesirable

These are similar-sounding policies. But Christophers asks an astute question: who or what are we saving? Us the people, or capitalism from itself? Because both won't work. Saving us - and keeping human activity within our planetary boundaries - requires a major departure from the present. An economy based less on rent and more on people and the "foundational" goods and services required by their daily lives.

A carbon-neutral economy, which will require massive investment in infrastructure, raising questions of who will pay for it, and who will own and operate it. Ownership, competition and taxation are of central significance to capitalism, however. "Rentierism is not some epi-phenomenon in the UK; it essentially constitutes the capitalist economy, with deep roots and pervasive reach", says Christophers. "Saving capitalism is a logical impossibility".

Because capitalism is inherently profit-driven and growth-dependent. The income flows to rentiers - from capital assets or investment - are ongoing and cumulative, so necessarily increasingly exploitative and extractive. The prime legal imperative of "the return to shareholders" has driven capitalism since Dodge vs Ford in 1919. Any reinvestment of rentier returns increases the economic growth required, which, as Jason Hickel(11) and others point out, is measured as a yearly percent, but in fact compounds at an expediential rate. Saving capitalism is logically undesirable because it is eating the planet as well as people.

Endnotes

1. Carlo Vercellone, "Wages Rent And Profit: The New Articulation Of Wages, Rent And Profit In Cognitive Capitalism", 2008
2. As distinct - if it can be - from productive new capital goods or merchant capital maintaining cash flows in trade.
3. EJ Hobsbawn, Age of... series, Michael Osward (dir.); "The Spider's Web: Britain's Second Empire, How Britain Transformed From An Imperial Power To A Financial Power", 2022.
4. Nicholas Shaxson, "Treasure Islands: Tax Havens And The Men Who Stole The World", Vintage, 2011; "The Finance Curse: How Global Finance Is Making Us All Poorer", Vintage, 2018
5. Brett Christophers, "Big Oil Companies Are Driven By Profit, They Won't Turn Green By Themselves", Guardian, 25/5/21.
6. Sadiq Khan and Ada Colau, "City Properties Should Be Homes For People First, Not Investments", Guardian, 3/7/18.
7. New Statesman, "UK Housing Market Crash Is 'The End Of The Ponzi Scheme'", 4/2/23.
8. William Davies, "This Age Of Inflation Reveals The Sickness Ailing Britain's Economy: Rentier Capitalism", Guardian, 30/5/22, Political economist, University of London, author of "This Is Not Normal: The Collapse Of Liberal Britain", Verso, 2021.
9. Al Jazeera, "The Labour Files", September 2022.
10. Muzzocato and Martha McPherson, "The Green New Deal: A Bold Mission-Oriented Approach", December 2018. Institute for Innovation & Public Purpose (IIPP), University College London; Muzzucato, "Mission Economy: A Moonshot Guide To Changing Capitalism", Penguin, 2020; and other IIPP work.
11. Jason Hickel, "The Divide: Global Inequality From Conquest To Free Markets", WW Norton, 2017.