The Failure of British Refugee Policy: Through The Story of a Afghani refugee

At the age of 13, Nas Popalzai landed on British shores. Freed from the shackles of the Afghan Taliban, an arduous journey through Turkey, Greece, Italy and France at the behest of smugglers had led him to the final destination. An echo of the Windrush generation half a century earlier, British streets paved with gold provided the opportunity for Nas to finally live free of persecution. “I don’t mind any job for the first few months, but later I want to be a firefighter”, Nas tells us in our interview. After saving a young girl who fell down an oven used to cook chapati in his earlier years, Nas saw this as his route to giving back to the British state in this land of promise and opportunity.

9 years later, this idyllic image that many accompanies many refugees has faded. He remained an asylum seeker for his first decade in England, waiting for refugee status. The Home Office tried to twist his case to unearth the flaws they needed to send him back to Afghanistan. Yet still, Nas has thrived; now a conversational English speaker despite receiving no formal education before the age of 13, he even managed to extinguish a fire in a pizza shop. But Nas’s case is the epitome of the downright failure of the British refugee system. 57% of asylum seekers are housed in the poorest third of the country, where the fewest opportunities for them exist – deemed a “deeply unfair shambles” by Home Office Select Committee Chairman, Yvette Cooper. The dream vision of Britain is but a mirage; and having come from corrupt, bloody and broken backgrounds, the intense bureaucracy and discrimination in British society is a reflection of our failure to meet the basic rights of humankind.

Britain had 121,837 refugees on its shores at the end of 2017, yet 40,365 asylum cases are still pending – awaiting the bleak possibility of deportation to the dangers of their homeland. This pales in comparison to the world scale – 68.5 million people have fled their homes, more than the entire population of our island. We are living through the biggest refugee crisis since the second world war. As Latin American violence explodes, Middle Eastern conflicts persists and African civil wars rage, citizens are left with little choice but to seek safety in faraway lands.

Britain’s de facto refugee stance under May has been to support refugees in the first safe country they reach, rather than welcoming them to the British mainland. Yet this is a dangerous move. Refugees are left stranded in safer neighbouring countries, which are often too poor and unstable to support the population influx. Amnesty International reported that 70,000 Somali refugees in Kenya have been pressured to return since 2014 – as a nation of poverty itself, Kenya does not have the resources to sustain the refugee numbers. Britain does.

Amidst the furore of the alt-right that Britain cannot afford to welcome the world’s neediest with open arms, at just 0.25% of the total population an increase in refugee numbers would be a minor burden on the budget deficit. And our treatment of these individuals, who have come to rebuild their lives from the wreckage of destruction, has been a national shambles. Nas was housed with a foster family in Coventry when he arrived as a teenager; and whilst he says that they did provide support through his first month, placing a foreign child with an alcoholic foster mother is a failure of care by the system.

Above all, to truly enter into British society, migrants must navigate the rough waves of the British legal system. This maze of confusion within the Home Office has resulted in low rates of acceptance, with 41% of asylum cases rejected in 2016. Often recounted by asylum seekers as a hostile process, this interrogation by British officials is a sharp contrast to the vision of an outward Britain, welcoming the world’s poorest. And despite the shame of Nas’s ordeal, he can be considered lucky – 71 children were locked up in detention centres in 2016. The Windrush generation were fooled by the streets paved with gold; half a century on, British attitudes remain unchanged.

And whilst Nas has made a success of his time in Britain, past scars still remain. We carried out the GHQ-12 with Nas, a psychological test to assess mental wellbeing. Scored out of 36, a score above 12 is considered to indicate poor mental health. Nas scored 24. Despite coming across as a sociable, happy and positive, this example reflects the deep trauma that refugees have been through and which we must provide care for – an area of the NHS which is chronically underfunded.

They do not deserve this. As the Arab Spring unfolded, a wave of chaos was unleashed across the Middle East that created a myriad of stories all to similar to that of Mr Popalzai. His village was seized by the Taliban. His father was the first victim – “one night they came and took him” he tells us, never to be seen again. His brother and sister followed a similar fate. Nas was taken for 5 to 6 days at a time by the Madrasah people to train as a suicide bomber; instead of following his dream of extinguishing fires, he was being forced to ignite them. As the sole survivor of his dynasty, Nas hoped to reignite the hope in his life which had all but dissipated in his native Afghanistan. Britain could have capitalised on this hope; allowing Nas to become a tax-paying, law-abiding citizen contributing his share to the British economy, and saving lives as a fireman. But Britain didn’t. Thousands of wasted talents, barred from British employment, are left sitting idle at home. Brexiteers often complain of the unwillingness of migrants to accept the job opportunities provided to them; but in reality, it is the other way around.

This negative attitude does not end at the Channel; it has spread across the globe. Trump’s first Presidential controversy was over his ban on immigrants from 7 Muslim countries, to the raucous applause of American supporters. Merkel welcomed over a million into Germany, an echo to the 10 million individuals who fled the Deutschland when the Nazi regime collapsed. Yet her openness to the world resulted in her closure from her party; after 14 years at the helm of Europe’s largest power, this will be Merkel’s last. Austria, Italy and Hungary have followed similar fates, as the nationalist right rises to the forefront of global politics. This force sweeping across the globe has made the current environment for refugees even more hostile than that which Nas faced a decade ago.

And yet whilst the political wave is turning its back on the world’s neediest, ambitious young startups are springing to the forefront. The Gateway – a student run organisation at Warwick University – provides training workshops and employment opportunities for refugees in the local area, helping them to assimilate into society. Free from the political stranglehold of the Brexiteers, individual aspiring efforts such as this can together create a sizeable impact, softening the hard landing that asylum seekers face all too often.

We live in a world where money can move freely around the globe, yet people are chained to where they are born. The world has begun to wake up; following Nas’s interview for his right to remain in the UK, over 10,000 signed a petition in support – and at the time of writing, his refugee status has finally been achieved. But this achievement masks the years of discrimination, interrogation and uncertainty that refugees across our country face. And with the nationalist right continuing their march to power, we must fight for the most vulnerable in our world before it is too late.

London Knife Crime Desperately Needs A Solution

 

Nestled in between Peckham and Brixton, the South London district of Camberwell was a prime recipient of the wave of knife crime that swept the capital in 2018. 2019 was supposed to be different. A fresh beginning, a year of opportunities to replace a year of deprivation. But, just 4 hours into New Year’s Day, that dream was shattered. A young mother, Charlotte Huggins, became London’s first casualty of the calendar as she was fatally stabbed in her Camberwell home – with the second murder coming 2 hours after. A wave of fear has gripped the borough – and London as a whole. Strained police budgets and an absence of economic opportunities have strengthened the power of the ganglands, yet London’s knife crime trauma runs deeper than just the terror of the gang elders. And with a scarcity of solutions, escalation seems the only outcome.

22 days. Over the entirety of 2018, Earth’s 4th wealthiest city could manage a maximum of 22 days without a fatal or serious injury due to knife crime. A battle is raging between law enforcement and the criminal underworld; and with metal detector arches being introduced to Notting Hill Carnival for the first time in its history, victory is swaying in favour of the latter. 450 offences were gang-related; yet whilst these organised criminal rings often shoulder the criticism for London’s bloodshed, they account for only 25% of total knife crime offences. The problem must run deeper.

 

Camberwell itself epitomises the struggle of London’s poor; as the capital races ahead in finance and technology, with rocketing salaries for skilled graduates elevating central London to the upper echelons of global wealth, the remainder of the capital has been left devoid of opportunity. In Croydon, a nearby South London district, the Deputy Mayor of Policing and Crime Sophie Linden analysed 60 cases of murder and serious injury over the past year. Not one of them had been in mainstream education. The rungs of the social ladder have broken; isolated from the economic opportunities that lie in London’s hotbed of prosperity, hope is fading away. Without education, the possibility of climbing the income ladder is negligible. And when the outlook for the future is dominated by a cash-strapped household struggling to make ends meet, the allure of quick cash through illicit activities becomes ever more enticing. People are not choosing the illegal economy – they are being forced into it by the lack of opportunities surrounding them.

And the gangs have been quick to pounce on such opportunities. During a Brixton debate on youth violence, it emerged that gang members were waiting in chicken shops, offering free chicken to lure young individuals into the criminal underworld. For children with strong educational and earnings prospects the need for criminality to achieve their desired lifestyle is minimal; yet in a world devoid of hope and opportunity, the allure is difficult to refuse.

And mirroring this lack of hope is the hopelessness of government’s response, epitomised by Unity FC. Brandon Estate’s youth football club has been a beacon of ambition for budding footballers, providing a productive use of their time to work towards a future goal. But they still have to train at the park because of the council charge £60 an hour for astroturf pitches. The closure of 80 London youth clubs since 2010 epitomises the inherent failure of the cash-strapped council to nurture opportunities for the people. To solve this problem, money will be needed – and with a scarcity of private actors working for the common good, the Treasury will have to open its purse.

And the struggle of councils to contain the violence has been intensified by their declining presence. Camberwell now has just 2 policemen on day-to-day patrols and as a result, a power vacuum has emerged that the gangs are all too eager to fill. Home Officer Adviser Elena Noel cites the “wall of silence” as one of the greatest challenges law enforcement now faces – as the gangs strengthen their stranglehold on local communities, any cooperation with the police is a risk deemed too great to take. This has choked the ability of the police, with murder crime solving rates dropping from 90% to just over 50%. The gangs are winning. The absence of the top tier of the local hierarchy has cultivated a ‘kill or be killed’ attitude, with ever increasing numbers of youths carrying knives for protection. Greater police presence is essential to maintain the feeling of safety and prevent the gangs from growing ever more powerful in the community hierarchy.

Sadly, politics does not rule in favour of the poor. Jeremy Hunt’s desire for a post-Brexit economy modelled on low-tax Singapore symbolises the attitude of government; improve the national economy with disregard for the people, prioritising GDP figures over livelihoods. Serious investment in both education and extra-curricular activities is essential for providing hope; the key ingredient that can keep children from the prying reach of the gang elders, and lead them higher up the social ladder.

Social immobility is strong, but not immovable. And tackling crime with stop-searches only adds to the magnitude of the problem. Take a child and input family instability, fear, low educational quality and low future earning potential – is it any wonder they will lead a life of criminality? The friendship, brotherhood and cash benefits far outweigh any other opportunities on their horizon; this life may not be a choice, but an inescapable fate.

Knife crime is on the rise, but it is merely a statistic that represents the deeper problem at the heart of the capital. The towering skyscrapers and towering high-rise council blocks symbolise two different worlds inside London, a structural problem that has left the poor in a state of emergency. Whilst increasing police presence will stem the fear that grips the city, tackling the root of the problem – opportunities – is the only long-term solution. If not, expect 2019 to be a bloodier year than ever before.

Climate Change: The UK Must Do More

 

Madagascar, Androy 2018. Gripped by 5 years of unprecedented drought, a humanitarian crisis has emerged in the depths of Southern Madagascar. Local farming has been ravaged. More than a million face the risk of malnutrition. The centuries of stability for the inhabitants of Androy is over, forcing residents such as Alatsoa to flee this inhospitable, deserted land. “There is famine there, there is no water. Our future would have been very bleak if we had stayed,” said Alatsoa. The forces of nature have the power to create and destroy worlds; Madagascan life has been transformed by violent shifts in our geography. And we have only ourselves to blame.

Policymakers have finally awakened to the stark reality which scientists have for so long predicted. Arctic sea ice levels have fallen 13% per decade since 1970. of the Great Barrier Reef has been severely damaged. And 21.5mn refugees have been created by climate change since 2008 – from North African desertification to the flooding of coastal Bangladesh. For so long it was just rhetoric; a doomsday brainchild of the academic community, forcing us to change our behaviour when nobody really understood why. But a new, darker era has dawned. Our misuse of the planet is leading Earth into a dangerous, desolate future.

But what is the UK doing about it?

As the birthplace of the Industrial Revolution, the origin of global warming lies on British shores. The UK Earth overshoot day was May 8th in 2017, meaning that if the world consumed energy at the ravenous rate of the British, it would take 2.87 Earths to sustainably provide the resources. Britain is not doing enough.

Some see us as net beneficiaries; no longer the land of the cold, the 2018 summer heatwave was welcomed by British sun-worshippers alongside farmers benefiting from longer growing seasons. Yet our island is not immune to the perils of global warming. A predicted tripling of global flooding would cost the world £340bn by 2030, affecting low-lying coastal and estuary regions. The Thames Barrier, the sole fortress protecting the capital from the forces of nature, can withstand only a 1-metre rise in water levels; after which we must spend billions on a replacement, or risk losing central London to our self-made destruction.

Yet policies are being implemented, symbolised by the groundbreaking 2008 Climate Change Act which outlined performance targets until 2032. This Act also leads to the creation of the CCC, the Committee on Climate Change who oversee the government’s progress on its green goals. Renewables investment and the shift away from coal have resulted in a momentous 59% decrease in electricity generation emissions since 2008 in the march towards energy decarbonisation, yet progress in other areas has plateaued.

Britain may revel in its low carbon electricity as coal continues to fuel energy in India and China, but power is the easiest sector to change – since it requires minimal changes in the behaviour of the people. As the world battles against the biggest challenge humanity have yet faced, changing the layman’s behaviour is the biggest challenge of them all. Encouraging recycling, home insulation and energy-efficient vehicles to protect farming regions in the Sahel is tough to sell to the average British worker – worlds apart, we must find incentives to encourage green behaviour for the benefit of our common humanity. The gilets jaune are symbolic of this attitude, a rampant protest borne out of an inability to see the impact of Macron’s fuel taxes past the hit to their own personal finances.

With home insulation down 95% since 2012 and tree planting rates ⅔ below target, British efforts are dangerously below the levels needed for a sustainable future. Yet hope is on the horizon. In October 2017 the government launched the Clean Growth Strategy – aiming to phase out diesel by 2040, achieve 85% of power from low-carbon sources by 2032 and support the development of green technologies. Both parties are aligned on climate policy; with May stating it is our “moral imperative” and Corbyn highlighting it as the greatest challenge facing mankind. Yet, as always seen in political spheres, words and action do not match up. Labour’s 2017 manifesto signalled a desire to transition to a green economy with hardly any clear-cut policies, and Conservative rhetoric has taken a hammering from their continued support for fracking.

But the government is not the only way. Individual efforts, brimming with ambition and a desire to save the planet, can together create a sizeable contribution. Food Intercept – a student-run organisation at Warwick University – collects leftover food from shops and markets to redistribute to the homeless in an effort to minimise food waste. With livestock contributing 14.5% to total greenhouse emissions, increasing food efficiency is integral to keeping a lid on global temperatures. Young startups are springing up across the country, that, free from the political and bureaucratic nightmares faced by government, can achieve positive change at a faster and more efficient rate.

In a world of constant political drama, from Brexit furore to Trumpian scandals and Chinese expansionism, climate change has all too often been relegated to background noise. Politicians, hungry to win their current battles, have been all too willing to delay climate policy to the next administration. No longer can this be. 2018, the year of the European heatwave, California wildfires and Puerto Rico hurricane has elevated climate change to the upper echelons of political priority. The world has begun to awaken to the barren reality we face; act now or risk an attack of natural disasters, leaving our species, the most successful in Earth’s history, fragile and vulnerable to the power of nature.

The capitalist economy borne out of the British Industrial Revolution has its roots in private trade. With it has come to satiation of our materialistic desires, producing ever more output without regard for its external impacts. This economic model cannot sustain our future. A newfound global attitude must compel the UK to create an economic system enshrined in green, sustainable principles. As the climate world order negotiated at Paris begins to disintegrate under the weight of President Trump, the UK and other countries who wish for change must keep moving forward in unity. All of our livelihoods depend on it.

The Federal Reserve: Trump’s Biggest Threat

The Federal Reserve. The Central Bank of the world, and the most important non-governmental institution in the United States. It has guided America through the Gold Standard, Bretton Woods and the wreckage of the 2008 Financial Crisis, with its impact reverberating across the global economy. Shielded from the tentacles of the White House, politics is barred from permeating the hard economic data that the Fed uses to ensure strength and stability in the US economy. But it is under attack. President Trump has quarrelled with just about every institutional opponent he can think of, but this one is unique.

“My biggest threat”, this is how President Trump declared that sees Fed.

The size, the scope, the power of the Federal Reserve make it a formidable opposition; one for which Trump must tread carefully, or risk ravaging the economic miracle that he believes he created.

As millions of loans were called in, the immovable banking behemoths began to crumble and dark clouds rose above the US economy in October 2008, the Federal Reserve was there to save it. Dark memories of the 1930s lingered in the fears of Fed Chairman Ben Bernanke. Yet by orchestrating the $700bn Troubled Asset Relief Programme to save the banks, slashing interest rates from 4.5% to 0 and implementing emergency credit programmes to calm the turbulent credit markets, the Fed prevented total financial destruction. Recession did not become Depression.

As the Presidential race heated up, Trump turned his fire towards the ultra-low monetary policy of the Fed; a decade on from the crisis, Chairman Janet L. Yellen was attacked for supporting Obama through her obstinacy towards interest rate hikes. The economy was booming, 15 million jobs had been created and out of the wreckage, America’s financial system had grown stronger. Yellen should be “ashamed”, Trump scolded, for keeping stock markets buoyant on cheap credit to bolster Obama’s image – and so began the pressure on the Fed to raise rates.

But such an attitude has changed. The economy has continued to strengthen in the first 2 years of the Trumpian era. But all of a sudden, the President wishes Yellen had never left.

Last Thursday the Fed raised rates by a further 0.25% on their path to recovery from the unprecedented lows that history had never before seen. Setting in chain a sequence of events culminating in Mnuchin calling the 6 biggest US banks to calm their fears, stock markets collapsed. Trump hit out at the Fed as “the only problem our economy has” as stock markets tumbled towards their worst December since the depths of Depression in 1931. The S&P 500 and Dow Jones suffered their worst Christmas Eve declines in history. After previously venting of Obama’s political stranglehold on the Fed, he now wished he had such a weapon at his disposal.

Trump has attacked and scapegoated almost every potential opposition he can think of, from the Supreme Court to Wall Street to Mexico. But what makes the Federal Reserve different is its impact on The Donald’s holy grail, the one reliable source for which he could always turn when political turmoil arose, the one omnipotent force that has defined the success of the Trumpian era: the stock market.

No President has ever tied themselves closer to the markets than Trump. Having tweeted about the stock market buoyancy 63 times from his election to February 2018, the President has claimed this asset market victory for himself. Isaac Newton’s symbolic acknowledgement that his discoveries were achieved by ‘standing on the shoulders of giants’ has been all but lost in Trump’s masquerading belief in his own self-importance. He, alone, has been the divine spirit that has marched the markets to soaring heights. In fact, it was the solid economic foundation provided by Obama that provided confidence to investors to return to the stocks they frightfully abandoned during dark times a decade ago.

Trump has also lead himself down a seriously dangerous road; spreading the myth that stock markets are a perfect indicator of the US economy. They are not. Markets do reflect economic fundamentals, but they are lost in an ocean of algorithmic traders, market jitters and foreign currency movements. This supposed special relationship between the markets and the economy worked well in the early period of Trump’s reign; now it has come to haunt him. No longer are the markets only a measurement of economic success; they are now a measurement of his success.

And that is what makes the Fed an opponent like Trump has never faced before. He can attack the Clintons, the Supreme Court and Capitol Hill. But just one tweet has sparked uproar that the integrity of this historic institution, smoothing markets and the economy for the past 105 years, has been consumed in the wave of Trumpian destruction. Whilst Trump may endear to his godly stature that has created American economic success, there is only one god which market investors watch with eagle-eyes: the Federal Reserve.

Back in 2016, Trumps was symbolised by his hatred for the establishment. Troops of die-hard supporters rallied on his path to destruction to create a new world order, crushing all institutions in its wake. But the financial system will never be tamed by the President. Operating within their own separate world, a credible central bank can stabilise even the most volatile political events. Bashing the Fed will not win supporters, but only drive markets further towards their doom. Trump has always revelled in his omnipotence, transforming the world economy through his trade wars and shutting down government in response to Democrat obstinacy against funding the Mexican Wall. But now, at last, he has found an enemy that he cannot beat. Trump must tread carefully against the Federal Reserve; if not, stock markets will tumble ever further, and he will crumble with them.

Facebook: Force for Good or Necessary Evil?

June 6th 2010 – Alexandria, Egypt. Khaled Said, a 28 year old computer programmer was sitting in a cafe, known for his verbal disapproval of his country’s politics. Moments later police arrived. He was dragged into the streets; beaten, tortured and killed.

Hosni Mubarak’s regime ruled the population with an iron fist, yet opposition groups had discovered a weapons so destructive that it could topple the Egyptian autocracy and ripple throughout the Middle East: Facebook. ‘We Are All Khaled’, a Facebook group, reached 1.5m members in the wake of Said’s death. The organisations that had been so ruthlessly suppressed had begun to find their voice, with the omnipotent dictator paralysed to the online force that was to lead to his collapse.

Egypt was not alone; from Tunisia to Iraq, Facebook had cultivated revolution. The Arab Spring, a momentous wave of uprisings that changed the course of Middle Eastern history, was aided by the online platform to overcome suppressive governments and determine a new path for their nations.

This begs the all important question: is Facebook a force for good or a necessary evil?

1 billion members; 14 years; 1 network connecting more of humanity than ever before. Mark Zuckerberg’s Harvard innovation has become a fundamental platform for corporate marketing, as well as news – with 63% of people reporting social media as their main source of news. Facebook has become a mecca for advertisers – by connecting businesses to the world of consumers, Facebook has helped to create $225bn of economic activity and 4.5mn jobs worldwide according to Deloitte. Its importance for spreading messages far and wide is immeasurable; the Conservative party’s £120,000 monthly Facebook expenditure in the 2015 election campaign is testament to this.

Yet the power it beholds presents new dangers. The vastness of its reach is shrouded in mystery; with such a large proportion of the world depending on Facebook for the news, Zuckerberg and his army of programmers wield the power to determine humanity’s view of the world. Zuckerberg could be manipulating his creation to favour certain media outlets or political candidates, affecting our global future. And with no third party regulation, the future of fake or preferential news lies in Facebook’s hands.

After a stampede of recent scandals, from the US election to Cambridge Analytica, nothing highlights the immensity of the challenges that Facebook faces more than its newest employee: Nick Clegg. With experience in both the British government and European Parliament, Clegg can provide the expertise to bridge the divide between global politics and Silicon Valley – with hostility from the left and right creating tensions regarding the enormity of Facebook’s control over news and personal data. Clegg’s position as an EU Trade Commissioner provides invaluable experience for negotiating with Brussels; a political monolith that Facebook will undoubtedly have to appease in the near future.

Yet it also represents a profound change from Facebook’s history. Zuckerberg and his COO Sheryl Sandberg have for the first time opened up their inner circle. Unmasking the opaque technocratic interior, this move is symbolic; Facebook has recognised that cooperation with political spheres is unavoidable. Facebook has armed itself with a new weapon in the fight against political hostility; yet despite his intellectual credibility, the man best remembered as David Cameron’s shadow will be unable to rise to Facebook’s problems alone.

Facebook has been a victim of its own success. Its network of subsidiaries, including Instagram and WhatsApp, have allowed in a near-monopoly on global news distribution. The Arab Spring and Conservative election spending are testament to the unnerving reality that within the heartlands of Palo Alto lies control over our political destiny. Facebook users are bombarded by political messages selected by mysterious algorithms, with no concern for the underlying misuse that may be at play. Facebook’s dissemination of fake news is the toughest mountain to climb – the once benevolent platform used to connect the world has been hijacked by malicious groups seeking to promote their own will, often with negative social consequences.

Amidst the furore, a growing quorum have been demanding an iron government fist to halt the flamboyance of the tech giants. Yet government regulation would be a maze of complexity. Facebook is truly global, and it’s legal tussle raises one of the most contentious issues in political history; freedom of speech. What may pass in Westminster would likely be slammed down by the First Amendment across the Atlantic, and so a globally universal code of conduct for the dissemination of news by social media is an immense challenge. And, as Clegg has recently repeated, regulation mustn’t stifle this holy grail of innovation – a necessity for advertisers, business connections and even the social benefits of searching for long lost relatives are the advantages that we would have to concede in return for greater oversight.

Whilst Facebook has implemented regulatory procedures to prevent the speed of the spread of fake news, the problem is far from solved. This week the Facebook algorithmic tools detected the false picture of a main alleged to have attacked Presidential candidate Jair Bolsonaro, proving its ability to limit fake news in political affairs. Yet the 2017 viral circulation of a story claiming NASA were paying $100,000 to stay in bed for 60 days suggests the contrary. Innovative responses to fake news are in their infancy; whether Facebook will choose to deploy them at the risk of their own success remains to be seen.

Facebook holds the power to create and destroy worlds. This technological masterpiece from a Harvard campus has brought boundless benefits, albeit with inevitable trade-offs; news vs memes, education vs indoctrination, connecting to better our world vs connecting to destroy it. Facebook has long shunned the political scene, reclining in its Silicon Valley heartlands to focus on the technology without concern for its social risks. Yet with great size comes great responsibility. Clegg’s appointment marks a change in direction by Facebook towards a realisation of the implications of its own success – but one man cannot change all. The world of social media must be subject to tighter rules regarding fake news. If it isn’t, those with malicious intent have the opportunity of a lifetime to change the course of history.

McDonnell’s Corporate Revolution- How Labour will deliver real socialism

In 1600, a revolutionary corporate change occurred – one that was to shape the global economic sphere ever since. Queen Elizabeth’s Royal Charter for the creation of the East India Company gave rise to one of the defining features in corporate history; the limited liability company. Limitations on investor risk led to a flurry of investment into grandiose, capital-intensive industries, from railways to ship building. And here began the era of corporate capitalism.

 

Corporate capitalism dominates the modern economy. Hierarchical structures are imposed on our workplaces, with boardrooms reserved as much for wealthy merchants now as they were at the inception of the East India Company 400 years ago. But whilst undoubtedly serving major benefit, striding us through the Industrial Revolution and into the modern technological age, change is in the wind. Corporate capitalism’s days are numbered. Amidst the storm of economic progress has been an unnerving surge in inequality – with this economic structure enabling bankers bonuses to emerge unscathed from the 2008 crisis whilst average real wages declined 0.3% annually in the decade since.

 

As wealth further accumulates in the hands of the few, opportunities are being skewed away from the working class heartlands not only of Britain, but across the Western world. Yet the Shadow Chancellor may be on the cusp of a corporate revolution.

 

In an echo to Tony Benn in 1980, McDonnell this week called for an “irreversible shift” of wealth and power towards the working class in our society. The corporate model under creation is yet to be revealed in full. But its central premise is a fundamental change in corporate control away from career managers by creating employee funds, into which firms would legally pay a set percentage of their profits. Using this to purchase shares for workers, which would accumulate over time, would enhance their ability to influence corporate destiny – an ability they can utilise for transforming the corporate hierarchy, pay structure and national economic inequality.

 

And with the prospect of a general election before the year end looking an increasing realistic possibility, Labour’s corporate transformation may be just around the corner.

 

Under Thatcher’s corporate restructure plan, workers were allowed to sell the shares they owned in the company, an economically illogical decision – cash-strapped workers with little belief in their ability to individually influence corporate affairs would be totally rational in selling to exactly the people who already dominate the corporate hierarchy. Yet whilst McDonnell’s plan allows for collection of dividends, shares can not be sold. Worker power would be enshrined in law, an irrefutable force for corporate redirection.

 

Yet a central question remains: how much influence would workers have?

 

The magic number lies in the percentage of profits firms must devote to employee shares – for the corporate behemoths of the financial and technological spheres, this could result in a significant ownership stake for the employees. Yet with a threshold of only 250 employees for this percentage to be applicable, too high a number could place the health of smaller enterprises in jeopardy – and as such, a progressive number should instead be used to enable those with smaller profits to continue to sustainably invest.

 

But the more pressing problem lies in the lair of the profit-hungry, tenacious corporate moguls: the boardroom.

 

This is the ultimate goal of the worker, the only realm where true change can be achieved. Whilst McDonnell is yet to state the route to this upper echelon, the most likely answer is that workers with the most shares accumulated will be the chosen ones. Yet this is a dangerous proposal and the alternative could be an elected position, similar to a syndicalist minus the unions. 

 

The end of the corporate capitalist era is in sight. As our society has transformed from a sea of local rural communities to an eruption of industrial heartlands, our transition to the ultimate goal of a developed modern society is almost complete. Humanity’s next stage of economic progress must come through a redirection of our goals; away from macroeconomic numbers, and towards shared prosperity and equality. Cooperatives number only 6000 in the UK, with 13.6mn members – far behind the OECD average. Yet numbers have been growing across the continental mainland, with the idea gaining traction amongst mainstream political powers.

 

A new corporate structure lies on the horizon. Whilst its details remain to be confirmed, a new model with workers at its epicentre will propel us into a future of shared wealth and greater equality. McDonnell may not have the key; but his solution is certainly one step closer to achieving the corporate revolution that we so desperately need.

The Truth Behind a No deal-WTO Brexit

No deal Brexit. 2 years ago, this proposition seemed almost unfathomable. Yet this alarming proposition is holding businesses, markets and traders across the continent on tenterhooks. As this consuming debate threatens to marshal off our borders and seal our divide from the continental mainland, analysis of the varied impact of a No deal Brexit provides an insight into who – both in the UK and EU – will be most affected under this scenario. As the impenetrable fortress along the Channel begins to harden, the plunge into isolation for Britain may in fact leave Europe breathing a sigh of relief.

Under a No deal Brexit with no free trade agreement, UK-EU trade would be conducted under WTO rules. The UK would be forced to trade with the Most Favoured Nation principle that underlines WTO policy – thus facing the full wrath of the EU Common External Tariff, which it applies to all countries it does not have a free trade deal with.

Boris Johnson described this scenario as “perfectly OK”. It isn’t.

Johnson claims that this apocalyptic tariff can be offset by parading the seven seas to source new free trade partners far and wide. Yet with the European Union accounting for 44.16% of total British exports, “no amount of trade deals with New Zealand” will make up for it, in the words of former Chancellor Osborne. Britain’s trade markets are overwhelmingly skewed towards its continental home, whilst Britain itself accounts for only 6.99% of EU exports – a clear indication of where the bargaining power lies in trade negotiations.

Liam Fox claims that “you couldn’t have a no deal without disadvantaging both UK and EU citizens” yet the numbers above argue to the contrary in terms of magnitude. The average tariff on British exports to the single market under WTO rules would be 4.1%, with 5.7% average on imports. Yet whilst this would decrease British exports by 9.8%, European trade would fall by an average of only 2.13% – with the continental powerhouse, Germany, falling by 2.54%. The enormity of this disparity is evidence that the EU has little to lose under this scenario – whilst European exports to the UK would decrease by a whopping 30%, Britain is such a minute player in the international world that its share of European trade is minimal.

However, the more complex hurdle the UK is facing will be regulatory. Tariffs vary wildly, with the highest taxes levied on food and clothes – neither of which are primary UK exports – whilst technological products including electricals and telecom face a tariff of only 1%. But if the UK credibly commits to its threat to ‘tear up the rulebook’, regulatory idiosyncrasies would only add to the costs of British exporters – and given the current productivity laggard status assigned to our firms, many small exporters will likely run into financial difficulty as interest rates by the Bank of England continue their upwards path.

Yet costs will be high for European nations too. Customs barriers, border checks and IT systems to regulate such trade will cost 600mn euros for the Dutch alone – excessive red tape that is a burden on SMEs who have never traded outside of the customs union. With 200,000 employed in trade with Britain and the prospect of purchasing 4.2mn export licenses, a No deal Brexit is an unattractive proposition for the Dutch – evidence testified by the Brexiteers who hark that European business will drive its government into softer negotiations.

But the stakes in a soft Brexit are higher. A British deal whereby borders are closed to migrants but open to trade would create a near-certain European implosion; the far right from Hungary to Italy would follow in Britain’s wake, and the single market would collapse. Evidently, such a situation would be worse for the Dutch; the destruction of the eurozone, continental trade and ensuing chaos trump the dismay of losing some trade with the UK – despite what the Little Englanders may want to believe. Europe would once more return to the fractured state it existed in prior to the ECSC in 1952; and given the centuries of conflict that preceded this, such a proposition would send fear throughout the continent. British trade is thus a small price to pay in a much more dangerous game.

Brexit is not only a deal in which the UK must hit the sweet spot. The EU too must get this deal right. By balancing business with larger geopolitical interests, a WTO scenario is easily bearable for those at the nexus of eurocentrism – notably France, Germany and the Netherlands, who happen to be amongst the UK’s largest trade partners within the bloc. Britain must open its eyes to this reality; whilst the EU may breathe a sigh of relief at this outcome, Britain would plunge into isolation. In this struggle for supremacy by the British against the EU27, Europe will have won.

The Solution to Inequality: Land Value Tax

3.6 million.

This is the number of British citizens with assets worth over £1mn, affording them an opulent lifestyle and comfortable future for their family. Equally, it is the same number of households with a wealth of less than £20,000 – insufficient for any financial security nor a healthy retirement. The enormity of wealth inequality on the British Isles is almost incomprehensible, with the richest 10% owning 45% of all wealth – including land, pension wealth and financial assets. A solution must be found; yet as is so often decried, government intervention creates distortionary effects that prevent the natural flow of the economy.

But this is no longer the case. There is one policy instrument, whose success ranges from Denmark to Singapore, which can raise the necessary funds for local councils whilst garnering support from acclaimed economists across the political spectrum. With advocates from Winston Churchill to Milton Friedman, this policy – the Land Value Tax – must be adopted by the government in a radical tax overhaul to finally address the increasing inequality in our society.

Ridiculed by Richard Hammond as a “Marxist tax grab”, it is, in fact, the holy grail for taxation amongst liberal economic spheres. The current system of Council Tax and Business Rates are taxes based on the value of the property and the business respectively. Yet under this new system, the tax would only be based on the value of the land, irrespective of the developments made on the land. A derelict wasteland directly next to a modern skyscraper would thus both be taxed identical amounts; creating an incentive for land development on the barren land to justify payment of the annual levy. The LVT is a stimulant for productive investment, which is penalised under the current system. At present, a rise in the property’s valuation from investment by the landowner would result in a rise in Council Tax payable, and so this disincentive to invest vanishes under the LVT.

Yet the core reasoning for its support in laissez-faire circles is encapsulated in Milton Friedman’s acclaim that it is the “least bad tax”. The government aims for taxes to raise maximum public revenues whilst minimising the distortionary effects to the economy. Income tax reduces the incentive to supply labour and corporation tax reduces investment – but the supply of land cannot be changed. Taxing land itself, therefore, has no distortionary effect. Each plot of land makes its relative contribution to the Treasury based on how valuable it is, which would be used to replace more distortionary taxes such as the regressive Council Tax. LVT is the perfect method for raising revenue whilst affording labour and capital the necessary freedom to follow their natural incentives: a political world of which even Adam Smith would support.

Yet away from the realms of economic philosophy, the LVT has useful practical implications too. This one tax has the power to fundamentally reshape the geographical distribution of the economy. Lower land valuations in rural and run-down urban regions create the potential for a higher return on investment, encouraging land and property development in these regions. In contrast to the daunting prospect of London urban sprawl into the greenbelt, this would increase economic activity in smaller towns to enable their growth – beneficial for both the geographical wealth distribution and the environment.

Yet perhaps the most important benefit dates back to 1879; the benefit that was cited by the creator of the policy itself. Henry George, in his work Progress and Poverty, popularised the idea of LVT in mainstream political circles by arguing that the value of the land does not derive from the actions of the landowner, but the actions of those around it. In modern times this claim is perfectly captured by Crossrail – the £15bn public project has increased house prices in Abbey Wood – a station on its route – by 20% more than the London average since construction began in 2009. And this was all without any action taken by the landowner, who reaps all the benefit. This unfairness caught the eye of none other than Winston Churchill – claiming that all the roads, streetlights and water systems that create value for the owner are essentially funded by the taxpayer – whether they benefit from Crossrail or not. The LVT should not be seen as a tax; it is a payment to the government for the benefits that public investment has provided. By preventing excessive growth in landlord wealth and raising public revenue by doing so, the government will have increased funds to spend on those in the lower percentiles of the wealth distribution.

Wealth taxes have long been feared as too radical, stripping individuals of their assets by a predatory government. Yet with wealth inequality threatening to grind social mobility to a halt, the Land Value Tax is the best policy instrument at our disposal for limiting this dangerous advance whilst avoiding the distortionary economic side effects. For a policy to be supported by the polarities of  Milton Friedman and John McDonnell, it really must have a special economic value. The LVT is unique, and the government must utilise it.

Britain craves Corbyn’s manufacturing aspirations

The era of globalisation dawned in the 1980s. Swathes of British industrial heartlands, industries that had defined these commuities since the 19th century Industrial Revolution, left for the low cost environment of China. Britain established itself as a global leader in financial services, allowing the City of London to drive economic progress. Yet nostalgia for the earlier days remain. A remnant of the Northern Powerhouse, the emotional desire for the return of manufacturing amongst derelict and unemployed communities has the power to swing an election; a desire shared by the Leader of the Opposition.

This week Jeremy Corbyn joined the quorum of the disenchanted  – those who have lost from the globalisation idyl that was sold to us 30 years ago. Launching his ‘Build it in Britain’ initiative in Birmingham, the Labour leader declared that “change is needed, we must aim for something better”. A pledge to reverse the tide of manufacturing outflows to East Asia, returning Britain to its position as the ‘workshop of the world’ that it held in the mid-19th century. At just 11% of GDP, British manufacturing has diminished from importance; previously the centrepiece of the North, a rejuvenation would have vast consequences for the region.

Support for a manufacturing return has solid logical foundations: job creation, reduced geographical inequality, green production and economic diversification will all be welcome benefits. Yet Corbyn’s method for achieving this is flawed. Whilst lambasting Donald Trump later in the speech for his protectionist desires, Corbyn’s plan draws him ever closer to both the White House, and the new closed border world order that is rapidly – and dangerously – emerging.

During the speech, Corbyn mocked May’s fondness of exclaiming her desire to “take back control of our laws, our money and our borders”.  Yet Corbyn himself is proposing changing the law to prevent public money flowing out of our borders. With government contracts to private firms worth £200bn annually – 7.6% of GDP – Corbyn plans to redirect them towards British manufacturers in an effort to rejuvenate the sector. He lambasts the £1bn worth of NHS contracts shipped abroad from 2014-17, and even hinted at the absurdity of transferring production of British passport production from Gateshead to France.

This is economic nationalism. Awarding contracts purely based on nationality and not economic efficiency is a form of protectionism that would damage this fundamental principle of economics. It is an insurance lifeline for firms; with the government as a backstop to liquidation, the incentive for investment is drastically diminished.

What the government should instead be addressing is the fundamental roots of the manufacturing decline; productivity. The economic indicator with the power to make or break industries in the era of global trade. The reason why Britain has the smallest manufacturing sector as a proportion of GDP in the G7, which hasn’t run a trade surplus in goods since 1981. Corbyn noted in his Birmingham address that despite being governed by the same rules, in Germany “you’ll struggle to find a train that wasn’t built there”. Yet whilst portrayed as the economic nationalism of Merkel’s government, this omits the fact that annual German R&D expenditure is 1.2% GDP higher than Britain’s, reflected in a UK productivity that is 25.6% lower than Germany’s. This is purely an example of economic efficiency at work. Britain’s dire record on investment and productivity must bear the brunt of the blame, and as such should be the priority for government investment.

The Competition and Markets Authority have warned of the danger of public selective choice of manufacturers – swimming against the tide of globalisation will divert investment away from efficient firms, and thus away from the interests of consumers. Government should instead be a guide; through a system of incentives it should once more make the UK an attractive destination for industrial capital, rather than using an iron fist to blockade money at our borders.

Corbyn does acknowledge the need for this, yet does not assign it the priority it deserves. Whilst Britain cannot claim a cost advantage over the developing world, it’s speciality in logistics, technology and management must be further developed and displayed in the limelight. Coercing manufacturing back to British shores is now within the realm of possibility; 1 in 6 who relocated to China have now returned. Shenzhen’s average wage has tripled from £2500 in 2007 to £8000 today. As labour costs rise and ever-greater importance is assigned to speed of bringing new trends to market, relocating to British land would localise the supply chain and enable production closer to its consumers. Indeed, the businesses that returned cited logistical expertise, speed of production as opposed to cost and technological advancement as their core reasons for relocation. Manufacturing globalisation is on the cusp of a reverse that Britain must capitalise on.

 

Manufacturing therefore need not be forced home through selective, economically damaging public contracts. The government instead must create the right incentives for it to flow back naturally. Corbyn’s suggestion of investment in the “industries of the future” is a welcome proposal, particularly in forms of green energy where Britain can utilise its scientific expertise to truly dominate the market. Yet his criticism of the government in misguided; it is a decade of underinvestment in technology, research and logistical capacity – the ingredients of incentives – that have left the former Northern industrial stalwarts as desolate towns of stagnation.

The public sector is not the culprit. It is merely responding to incentives. The private sector must incentivise these contracts to stay onshore; for which government investment can help to create an environment of SMEs and technological progress to finally end a decade
of stagnant productivity. Whilst Corbyn’s plan is flawed, his idea for an industrial rejuvenation is powerful; and if productivity trends are reversed, this idea may soon turn into reality.

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