Confusion is power

David Runciman

  • The New Few, or a Very British Oligarchy: Power and Inequality in Britain Now by Ferdinand Mount
    Simon and Schuster, 305 pp, £18.99, April 2012, ISBN 978 1 84737 800 2

You can tell Russia is not a real democracy because there is no great mystery about its politics. Democracies are slightly baffling in how they work: just look at America; just look at Europe; just look at us. In Russia the basics are easy to understand: people use money to get power and power to get money. The country is ruled by a narrow, self-serving elite who go through the motions of holding elections and transferring power. No one is fooled. When Putin moves from the office of president to prime minister and then back again, it is not exactly smoke and mirrors stuff. It’s just out one door and in through another. He doesn’t care that no one is fooled. This is how oligarchies work: the people at the top care much more about their dealings with each other than their dealings with the public. It is also the reason oligarchies fail in the end: the public tires of being treated in this way. Democracy may well be bubbling up in Russia in ways that the elite will eventually be unable to control. But until they lose control, there is no doubt about who is in charge.

If Britain is turning into an oligarchy, as Ferdinand Mount claims, then it’s nothing like the Russian version. Mount begins with the Russians and their new breed of ‘nimble freebooters’, whose rise to power he calls ‘an amazing, shocking spectacle’. So shocking is it to democratic sensibilities that it is easy to assume it has ‘nothing much to do with those of us who live in what used to be called the West’. But that would be a mistake, Mount says. Perhaps we are not so different. Power in Britain is becoming concentrated in fewer and fewer hands, and so is wealth. ‘Could it be that, without knowing it, we have been hatching our own oligarchs?’ Well, if we have been doing it without realising it, then it’s an odd sort of oligarchy. This has not been a power grab by a bunch of ruthless operators. It’s more like an embarrassing accident. The people who are running the show seem as confused as anyone about how we got here. They didn’t mean it to turn out like this and they would quite like to do something about it. They just don’t know how. It is, as Mount’s title says, ‘a very British oligarchy’.

The Russians symbolise the kind of society we have become, not because of what they have been doing over there, but because of what they have been doing over here: buying our football clubs, schmoozing with our politicians, fighting it out in our law courts. Roman Abramovich didn’t come to London to muscle in on our politics or to steal our money. He came because we didn’t try to stop him. We let him do what he likes and don’t ask too many questions and we don’t tax him for the privilege. We provide him with a cover of respectability for all the nasty stuff that happens somewhere else. Britain is a functioning democracy that operates according to the rule of law yet doesn’t seem to mind when other people exploit our institutions for their own purposes. As Mount says, we are not really ‘a full-blown oligarchy’ but ‘a flabby, corroded type of liberal democracy in which the oligarchs have been enjoying a free run’. When both Peter Mandelson and George Osborne find themselves compromised by their inability to avoid the company of unaccountable freebooters like Oleg Deripaska and Nat Rothschild it makes British democracy seem not so much corrupt as incompetent and weak. The politicians are just following the line of least resistance. Standing up to people with vast reserves of wealth and the power to make your life more difficult than it might otherwise be takes a certain amount of effort; certainly more effort than playing along with them does. And playing along with them is more fun. So if no one is going to insist on your doing the difficult thing, why bother? After all, a yacht is a yacht.

Why don’t we mind more that our politicians can’t be bothered to get tough on our behalf? Part of the answer is that we too are following the line of least resistance. Modern democracy is a confused and confusing business, and it takes a lot of time and trouble to find your way through it. As Mount says, so much about British society now feels ‘congested’. No one can see the wood for the trees. This is the difference with Russia, where oligarchy was born in the chaotic conditions of post-communist disorder. Under those circumstances, almost anything was possible and the oligarchs pounced because the barriers were down. We can see so many barriers to decisive action that we wouldn’t know how to pounce if we wanted to.

It is striking that in a book about the ‘new few’ Mount does not discuss the most obvious way in which British society seems congested: the incredibly narrow class of people from whom we choose our leaders. Again, Russia looks very different. If you went back twenty years and tried to guess who would be running Russia today and dividing up its spoils you would have to be clairvoyant: Putin was then a functionary in the mayoral office in St Petersburg; Abramovich was a struggling businessman facing a prison term for embezzling oil supplies. Most of Russia’s oligarchs came from next to nowhere. They had to grab power because that was the only way they were going to get their hands on it. Our lot are different. Twenty years ago the fortysomething elite now running the country were a twentysomething elite already getting fitted out for the jackets. If you had predicted back then the rise of Cameron or Johnson or Miliband or Balls, you would not have to be clairvoyant (all were would-be politicians who knew each other at Oxford), just remarkably gloomy about the lack of alternative routes to the top.

One of the marks of a genuine oligarchy is that people fight really hard to get in, and once in fight really hard to push others out. Mikhail Khodorkovsky, for a short while the richest of the new Russian oligarchs, now writing liberal manifestos from his prison cell, is there to remind people of the fine but all-important line between the ins and the outs. Our elite sees no need to draw the line. We don’t have any ex-oligarchs and we don’t send anyone to Siberia. Why bother? Of course, there is Fred Goodwin, once Sir Fred Goodwin. But he hardly counts. The people on the inside didn’t push him out. They waited until he had helped bring the country to the brink of financial disaster and then, after much nervous throat-clearing, stripped him of one of his baubles. Our new few didn’t fight to get in and they don’t fight to keep others out. They just glide along the tracks that the system has laid out for them.

This, then, is an inadvertent oligarchy, distinguished by what Mount calls its ‘neglect, thoughtlessness and indulgence’. Inequality has crept up on us; political power has become concentrated by default; the bankers have been allowed to get away with it. But wasn’t it ever thus? British politics has always been a haphazard affair, presided over by people who weren’t entirely sure what they were doing, plenty of them with a penchant for spending time on other people’s yachts. So what’s different now? One difference is globalisation, which has done more than anything to generate a sense of powerlessness on the part of the politicians. There are two stories that can be told about this. One says that globalisation has simply exposed societies like ours to the hard winds of global competition. This has driven wages down at the bottom but driven rewards up at the top, because in the hyper-competitive global market for executive talent, success is at a premium. The problem with that argument is that executive rewards are insufficiently correlated to success or even to obvious signs of talent: too many of the new rich seem to have had the money given to them regardless of what they do. Their reward is for being in the right place at the right time.

The more convincing story is that globalisation is a cover story for indecision and fear. It does not drive the concentration of power and wealth according to rational measures of market forces but it sows enough confusion and uncertainty to make decisive action look like too much trouble. Politicians who suspect that they don’t know what they are doing are reluctant to do anything that might confirm it. Once again, it’s the contrast not the parallels with Russia that are instructive. As Ivan Krastev has argued in a recent article in the Journal of Democracy, open borders for people and goods are what help Russia’s new elite to hold on to power. Anyone who is unhappy can leave, rather than staying behind to rock the boat: far from being frightened that the disgruntled will vote with their feet, Putin and Co welcome it, because it secures their hold on power. This is the big difference between Putin’s Russia and its Soviet predecessor, which was terrified of letting people out. That was a totalitarian regime. An oligarchy, by contrast, cares only that the people at the top should be relatively unencumbered. Open borders help with that.

In Britain the politicians are terrified that footloose international finance will relocate if they assert themselves. They see globalisation as squeezing their room for manoeuvre, not enhancing it. But they also see it as excusing their relative passivity in the face of rising inequality, since it creates the impression that there are forces out there beyond anyone’s power to control. Globalisation suits a lazy oligarchy as much as it suits a rapacious one. As Mount points out, this sense of powerlessness means we live in a world very different from the one envisaged by some of the prophets of the new oligarchy. James Burnham, author of The Managerial Revolution (1941), envisaged a post-democratic order in which power was concentrated in the hands of an elite managerial class, who controlled the global forces of production. Burnham supposed that the members of this elite would be made up of scientists and engineers, because knowledge was power. ‘Finance executives’, as he called them, would be reduced to the level of servants of this new breed of supermen. But in fact it’s the finance executives who have come to rule the roost, and it’s often the scientists and engineers who are forced to do their bidding. That’s because knowledge is not always power. Sometimes, confusion is power as well. The finance executives don’t really know what they are doing, as we have discovered in the last few years. But they have created a world that no one else understands either, which gives them all the freedom they need.

What is the cure for inadvertent oligarchy? Here Mount is torn, because his argument pulls him in two directions. If the problem is the accumulation of power and wealth in a few hands, then the solution would seem to be to break it up. Mount is in favour of localism, of shareholder action to regulate executive pay, of greater ‘transparency, accountability and fairness’ at all levels of British society. But if the problem is confusion and fear, then the solution would seem to be greater clarity about who has the power and what it can be used for. That might not be consistent with a multiplication of sources of power: it might even require greater centralisation.

This tension comes out in many different parts of Mount’s argument. He says, for instance, that one of the great drivers of oligarchy is war, which empowers the few to take decisions for the many. Yet war, as he also acknowledges, is one of the great drivers of equality: disparities of income and life chances in Britain were brought down most decisively in the periods during and after the First and Second World Wars. States which concentrate wealth and power in their own hands have the ability to break up concentrations of wealth and power. Mount greatly admires the French, who he says have gone much further down the path to decentralisation in recent years than we have. But the French state was able to decentralise because it was so centralised: the directive to disperse power came from on high. The British state’s cack-handed attempts to devolve power have partly been hampered by the fact that power was already too haphazardly dispersed: no one (certainly not the Blair government) was sufficiently in charge of the process of devolution to make it work.

Where Mount is most adamant about what needs to be done is in relation to the EU. He equates its bureaucrats with the worst exponents of inadvertent oligarchy, not because they are corrupt or manipulative, but precisely because they are well-meaning and serious-minded. These are the managerial types who take power away from ordinary people because they don’t know any other way: they are just doing their jobs. Mount wants to take that power back, and for the British parliament and law courts to reassert themselves by insisting on their right to decide things for themselves. As an anti-oligarchy strategy, I don’t think this will work. The EU is not going to go away, even if the euro collapses. We will still be part of a complex international arrangement that we lack the power to control. Reasserting our independence won’t clarify or simplify those arrangements, it won’t make our politicians better able or more confident about standing up to finance capital, it won’t give them more chances to interfere with concentrations of wealth and power. It will simply make them, and us, feel better about our relative impotence. The EU needs to be stronger, not weaker, if it is going to tackle the oligarchic tendencies of the contemporary world. Otherwise, it will simply be an additional source of confusion and fear, which are all the oligarchs need to flourish.

Mount says that oligarchy can only be broken up in small, incremental steps, though he also says that it might take a Thatcher-like strength of purpose to make it happen (‘“Optimism of the will”, Lenin would have called it’). What is perhaps most bizarre is that he sees this holy grail of Leninist localism being incarnated in the current coalition. In that respect, this book already looks a little dated. Mount makes the mistake of treating the coalition’s founding agreement, and ‘the anti-oligarchic theme [that] runs through the whole document’, as a statement of philosophical principle rather than a cobbled-together document designed to paper over the cracks long enough to prise Gordon Brown out of Downing Street. (He is also a little confused about timing: he gives the date of the formation of the coalition – ‘the most interesting political event I have witnessed’ – as May 2011, a year after it happened.) No doubt Clegg and Cameron meant many of the things they said back then. No doubt they hoped that they would preside over an anti-oligarchic revolution, redistributing power to local people and redisciplining the bankers. But politics keeps getting in the way.

Given the chance to vote for elected mayors in the recent ballot, every city bar one said no. People didn’t trust the politicians who were offering them greater local power; they also didn’t trust that having more elections would clarify where power actually lies. They did not see it as a solution to the congestion of British life; they just saw it as more of the same. Who’s to say they were wrong? Meanwhile, the mayor they did vote for was Boris Johnson, whom Mount holds up as the ‘lion comique’ of the new oligarchs. Johnson has not been all bad in Mount’s terms: he has continued Ken Livingstone’s earlier commitment to a ‘living wage for Londoners’, which Mount sees as ‘the indispensable beginning of the virtuous circle’ that will reverse the vicious circle of rising inequality. But if Johnson is the conduit through whom the virtuous circle must pass then it is hard to see how it is going to remain virtuous for long. If ever there was a champion of inadvertence in politics, it’s him.

A better guide to the current state of British oligarchy is the Leveson Inquiry. It hasn’t revealed corruption and avarice on anything but a mundane scale; few outright monsters have emerged; there is as yet no smoking gun. What it has revealed is the complacency, passivity and reckless negligence of those who thought that they were doing nothing wrong. The congestion of British public life, its squeezed, banal, thoughtless, easy way with power, its acquiescence in its own straitened quality, its thin conception of the public good, its sense of comfort with its own limited ambitions have all been on daily display. It’s nothing dramatic. Newspapers don’t need to be explicit with their threats or bribes, they simply show which way comfort, and which way discomfort, lie. Ministers don’t do anything nefarious. They simply don’t know what’s being done in their departments, and they don’t have any real incentive to find out. Murdoch doesn’t know what’s going on in his company either, and he too has no incentive to find out. Confusion and inattention are all our kind of oligarchy needs.

In the Kremlin they have, by all accounts, been enjoying the Leveson Inquiry. Putin’s acolytes have let it be known that Britain is in no position to cast aspersions about the fraudulent state of Russian democracy, given what we have seen about the hidden levers of power in Britain. Are we really any different? Well, the difference is that no one in Britain ever says that they’re at it in Russia too, so stop making a fuss. Ours is, as Mount says, not a true oligarchy, but a frightened, complacent liberal democracy in which the inadvertent oligarchs have been given too much room to breathe. It may take more than judicial inquiries, a living wage and local government reforms to squeeze them out.