Etonian magazine editors go up{
Prospect’s own head honcho David Goodhart was on Radio 4’s Today this morning, along with our contributor Toby Young. Both of them deal with social mobility in the latest edition. Indeed, David used his biog descripton to come out as an old Etonian “who failed his A-levels first time round, went to a provincial university and married a grammar school girl.” The gist of the discussion is a shorter version of the arguments in the two articles. Toby argues that celebrity culture creates the appearance of social mobility that doesn’t really exist; posh, becks, and the rest make us think we can rise, when we can’t. David takes on those who say mobility has fallen a lot, and instead argues its probably only fallen a little, if at all. Eton also gets a mention. Listen to it here.
Obama: liberalism's saviour?
Despite his lofty rhetoric and the frenzied excitement surrounding his campaign, Obama is no radical; argues Michael Lind in this month’s cover story, Obama’s policy proposals have been modest, and his movement so far has been a personality cult, not a true movement with a substantive agenda, Lind says—but extreme events can force politicians to be bold, and the new president now has a chance to redefine American liberalism.
Plus, Prospect experts weigh in on what Obama means for the future of America. Beltway insider Martin Walker looks at how Obama’s gang will change Washington society, and Thomas Wright, a democrat foreign policy analyst, says that an Obama presidency might mean a better transatlantic relationship, but only if Europe keeps its end of the bargain—which will be a challenge.
Meanwhile, Jonathan Derbyshire talks to a number of leading black American thinkers about the future of America’s fraught racial politics: is this the beginning of a brave new post-racial era—or the opposite? And Prospect’s James Crabtree looks at what Obama might do for the economy; the warring ideological factions within Democratic party have declared a truce for the moment, but it is unlikely to hold.
Also, exclusively online this month, ABC’s foreign correspondent Jim Sciutto argues that Obama will struggle to make friends in the middle east, Erik Tarloff dissects the Republican’s Palin problem and Stephen Boyle explains why the congressional Democrats might turn out to be Obama’s own worst enemy.
Let us know what you think about any of these pieces below.
Tulips and art: beautiful but deadly
Many investment bubbles have burst in the past year—housing, credit commodities, oil and so on. But only now are we getting to the real froth.
The boom in contemporary art has been an incredible phenomenon: a true bubble of bubbles. It has exhibited all the classic features of the South Sea bubble of 1720 or the tulip madness of the 1630s. It inflated faster and more violently than other contemporary bubbles. While British house prices took six years to double, contemporary art managed it in just one, 2006-7. Insiders have long tried to justify the sense-defying tulip like increases in the value of some artists—the work of the Chinese painter Zhang Xiaougang, for instance, increased 6,000 times between 1999 and 2008—by claiming that we were living through some sort of golden age.
This, however, is pure poppycock, as Ben Lewis and I argue in our essay for the latest issue of Prospect. To understand why the work of artists such as Damien Hirst and Lucio Fontana have become so valuable, one must analyse it as a classic investment mania: from the point of “displacement,” when a new object of investment attracts speculative interest, to the point we are now at, where credit becomes overextended and the mania ends in panic. All that will ultimately remain is a stock of work that has been churned out by cookie-cutter artists without much regard to originality of aesthetic merit.
The acorn from which a mighty economics grew…
It is worth asking why central bankers so misread the credit boom. Unlike the bankers and the rating agencies, which stood to make millions from their error, the guardians of the credit system had no evident conflict of interest. And it simply isn’t good enough to suggest the bubble was hard to spot. Many more humble analysts and economists managed it.
No, argues Edward Chancellor in his essay for the latest issue of Prospect, the reason the central bankers failed was not that they were blind, conflicted or stupid. It was because they were, to quote John Maynard Keynes, the “slaves of some defunct economist”—in this case Milton Friedman. Our central bankers were drawn from a generation of economists who have been taught that financial markets tend towards equilibrium, that credit and asset price bubbles can be safely ignored, that international capital flows produce an optimal distribution of capital and that financial innovations are always to be welcomed. It is this intellectual enslavement that has taken us to the brink of the severest debt deflation since the 1930s.
The old and new faces of change?
In our latest lead review, Daily Mail political columnist Peter Oborne takes a second look at Dylan Jones’s much-maligned book of interviews with the Tory leader, Cameron on Cameron, and at Douglas Carswell & Daniel Hannan’s manifesto for Cameron’s Tories, The Plan: Twelve Months to Renew Britain. The Cameron that emerges from Oborne’s reading is far from the vacuous PR-man of popular criticism, although he is certainly a toff, a profoundly ambitious man, and a ruthless leader when he needs to be. The future of our country, he suggests, may be in the hands of a man with a very particular vision of conservatism, and of “a tradition of sceptical political enquiry that can be traced back to the origins of the Conservative party in the late 18th century.”
As to whether Cameron can or will deliver on such a vision—well, that remains to be seen. If Cameron’s core beliefs are followed to their logical conclusion, however, Oborne suggests that we could be in for some profound changes in the way the UK is governed. At the least, it seems, we will be in for battles rather than blandishments.
Your Prospect needs you
Prospect’s next edition comes out tomorrow. We’ll be posting details later today, and during tomorrow. Meanwhile, though, we have a Facebook group - and i’ve put a sneak preview of the contents up there. More generally, if you use Facebook, do consider joining the group. We’ll be using it more in the future to take soundings on what should be in the magazine, along with more previews of our stuff. If you’d like to see the new front cover, or find out more, join the group here, or click on the picture to the left.
David Cameron's cup of tea?
While the eyes of the world have been trained on America’s bellwether states, Prospect has not forgotten that a “bellwether” by-election is also taking place in Scotland. Jamie Stevenson argues that Cameron’s Tories have most to gain from a resurgent SNP; even if this means a successful independence bid in 2010. And Alice Onwordi looks at the party most auspiciously absent from the Scottish fray: the Greens. Although the Greens have grown significantly in the last 5 years, with the combined threats of a resurgent BNP, mainstream parties stealing their policies, and their own hopeless disorganisation, they have a tough battle on their hands to remain Britain’s fourth party.
Plus, not wishing to neglect the other election taking place this week, Erik Tarloff will also exclusively report from inside the election night party at Obama HQ in Chicago.
Peter Bazalgette’s article in the most recent edition of Prospect argues for a fundamentally new model of funding media, through different sorts of adverts run by digital tracking technology companies. Why so? Like broadcast television or fireworks displays, the web is very much what economists call a public good—something which is difficult to charge for directly but which can be made economically viable when it is charged for either obliquely or through some kind of compulsory levy such as a TV license fee. And while you can get round this problem with a fireworks display, it can be rather more difficult for television….. Continue reading ‘Fireworks displays and the future of television’
Dear Sirs,
I wish to attack myself for something I wrote in the October issue. Towards the end of my short essay on David Foster Wallace, I took a wild swipe out of nowhere at James Wood, one of the finest literary critics of the age. To explain, but not excuse: I was upset and angered by Wallace’s unhappy and premature death. At such times, we strike out blindly.
My attack was also partly the result of extreme overcompression, as I tried to jam about a book’s worth of ideas into the single page available. (In modest, 1/16 scale homage to Wallace’s famously jammed, crammed, gargantuan essays.) Thus a long, nuanced sequence of subtle, gossamer-delicate thoughts on the subject of critic and author, worthy of late-period Henry James, got reduced to a blow from a brick in a sock.
Though I do disagree with some of James Wood’s notions, I don’t disagree nearly as strongly as was implied in my rude and unfair sentence. On rereading it, I am appalled. I take it back, and I would like to apologise to Mr Wood for kicking him in the knee from behind.
Julian Gough
Berlin
Winston Churchill once remarked, when he was chancellor of the exchequer, that he would rather have finance less proud and industry more content.
Were he still alive, Churchill would find the position little changed: industry remains frustrated by its low relative status in the British economy. But the issue with finance is now not so much its pride (although that remains considerable) as its size. Finance has grown way too big relative to the real economy. In this month’s cover story, I explore the reasons that made this—and the scale of the economic crisis it has precipitated—possible.
The statistics are certainly astonishing. In the 1960s, finance accounted for just 10 per cent of corporate profits in Britain and America. By 2006 this had risen to 35 per cent. Last year, a staggering one in five Britons earned their living in finance. As George Soros has remarked, it is manifestly an “overblown” sector, and needs to shrink. Yet this size is a puzzlement even to those who, like Soros, have done well out of it.
For a long time, academics clung to the notion that finance performed a useful role, shunting capital to its most profitable outlet. If you accepted that, more finance was inevitably a good thing, as it meant the economy was becoming more efficient. Thanks to increasing distortions in financial markets and greater frequency of crashes, this idea has come under increasing attack. Now, drawing on recent research done by Paul Woolley, I make the case that finance is not efficient but dysfunctional—and that accepting this is a vital first step if we are to recover from the current economic crisis.
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