Austerity – it can really drive you Wilde…

Dr Sue Konzelmann, author of Austerity, discusses the long-term impact of a policy that places price before value.

Over the last decade, most of us have been on the receiving end of innumerable attempts to justify continued austerity in the UK, all of which have had one thing in common – they focus purely on money. There has been much talk of public deficits and debt – although at times, even our prime ministers have confused one with the other. The impression you get is that everything has a price; and when it comes to austerity, that’s all that matters. In the words of Oscar Wilde’s Lord Darlington, a cynic is “a man who knows the price of everything and the value of nothing.”

There has been a fair amount of cynicism in discussions about austerity. For example, the value of spending over £136bn in public funds bailing out the banks following the 2008 financial crisis would be questionable enough in itself, without then using it as an excuse to deprive so many tax payers of essential government support services – especially since, as described in my new book, Austerity, the case of Iceland had clearly shown that there was a viable policy alternative to austerity. But whilst it all came down to cash at Westminster, the vast majority of us were losing essential public services that we use, value and, in many cases, depend upon.

If this continues, our society will soon begin to unravel at an even more alarming rate, as we cut the ties that bind it together. Cuts to local authority spending have already had a drastic effect on the level and effectiveness of social services, whilst you hear a lot on the TV – on a daily basis – about the devastating effects of cuts to the police and emergency services.

The corrosive effects of multiple cuts, acting together, became all too clear whilst filming a video about austerity at the Euston food bank – but that’s something you hear a lot less about in the news.

Perhaps counterintuitively, the vast majority of people who have been forced to use the food bank since it was set up in 2010 are actually in work. But the government’s attempts to save money through changes in the benefit system, like Universal Credit, has meant that people claiming it would not get a payment for up to five weeks. How many of us would be comfortable about missing a month’s salary – or more? Not many, I suspect.

It also turns out that in order to avoid homelessness, many Euston food bank users are choosing to pay their rent, rather than buy food. This is probably rather less surprising, given that the average UK household income is around £28,000 – and renting a two bed flat anywhere in that part of London will cost around £2,000 a month. Cuts to social care have also resulted in rising homelessness – and another source of people reliant on food banks.

Austerity, as a single policy, is a very blunt instrument, that has focused on price, rather than value. As a result, it has critically impacted many inter-related policy areas. Undoing its damage will therefore mean not only sharply revising policies in such areas of affordable housing, employment, health, education and social services; it will also require changes in benefit structures and delivery – to ensure that they work together as seamlessly as possible.

In a world where it is, for some unknown reason, apparently impossible to integrate such obviously linked services as the NHS and social care, this vision might seem ambitious. It shouldn’t be. In the words of Oscar Wilde’s Lord Darlington once again, “we are all in the gutter, but some of us are looking at the stars.”

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Why do women favour working in the public sector?

Research carried out by Birkbeck’s Dr Pedro Gomes and Professor Zoë Kuehn from the Universidad Autónoma de Madrid aims to understand why women self-select to the public sector.

The public sector is a large employer, accounting for between 10 and 35 percent of total employment in OECD countries. In most countries, the public sector hires disproportionately more women than men. With my colleague Zoë Kuehn, I developed a model to try and understand this imbalance.

Through the lens of our model, we view the gender bias in public employment as driven by supply, meaning that it is not the government that acts explicitly to hire more women, but it is women that choose the public sector more so than men. Our objective was to better understand this selection, in particular, how much of it is explained by public sector job characteristics that are related to management, organization and human resource practices in the public sector.

We documented gender differences in employment, transition probabilities, hours, and wages in the public and private sector using microdata for the United States, the United Kingdom, France, and Spain. We then built a search and matching model where men and women could decide whether to participate and whether to enter private or public sector labor markets. Running counterfactual experiments, we quantified whether the selection of women into the public sector was driven by: (i) lower gender wage gaps and thus relatively higher wages for women in the public sector, (ii) possibilities of better conciliation of work and family life for public sector workers, (iii) greater job security in the public compared to the private sector, or (iv) intrinsic preferences for public sector occupations.

A natural explanation for the gender bias in public employment could be that certain types of jobs that are predominantly carried out by the government could be preferred by women. However, our research revealed that, for the US, the UK, and France, once we exclude health care and education, women’s public employment is still 20-50% higher than men’s. Interestingly enough, the gender bias is less pronounced within public health care and public education compared to other branches of public employment.

Regarding transition probabilities, we estimated that the probability of moving from employment to inactivity is higher for women, but we found this probability to be significantly lower for public sector workers.

We also provided evidence that gender wage gaps and working hours are lower in the public sector. Individuals holding full time jobs in the public sector work between 3-5% fewer hours compared to similar individuals holding full time jobs in the private sector. However, fewer working hours are just one aspect of a better work-life balance (next to additional sick days, holidays, flexibility to work from home, employer provided child care etc.). In our model we wanted to capture differences in work-life balance across sectors in an ample sense, and hence we do not use these estimates to identify any parameters. Nevertheless, our results on fewer working hours in the public sector support the claim of a better work-life balance in the public compared to the private sector.

The results of our research suggest that women’s preferences explain 20 percent of the gender bias in France, 45 percent in Spain, 80 percent in the US, and 95 percent in the UK. The remaining bias is explained by differences in public and private sector characteristics, in particular relatively higher wages for female public sector workers that explain around 30 percent in the US and Spain and 50 percent in France. Only for France and Spain do we find work-life balance to be an important driver that explains 20 to 30 percent of the gender bias. Higher job security in the public sector actually reduces the gender bias because it is valued more by men than by women.

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Rethinking Britain – How to build a better future

Sue Konzelmann, Reader in Management at Birkbeck, and her colleagues John Weeks and Marc Fovargue-Davies introduce their new book, Rethinking Britain: Policy Ideas for the Many. 

Mind The Gap, London, Underground, Transportation, Uk

Of the nineteen UK governments since the Second World War, only two have torn up the rule book and tried to build a better future, instead of simply recycling the tired slogans and policies of the past. The two governments that did try radical change – not always successfully – were those of Clement Attlee in 1945 and Margaret Thatcher in 1979.  We are therefore well overdue for another major policy rethink, aimed at solving the problems we have now – largely as a consequence of Thatcher’s legacy – rather than endlessly trying to reignite the ideological battles of the past. That’s why we concluded it was high time for Rethinking Britain: Policy Ideas for the Many.

Rethinking Britain is not only for the many – it’s also written by the many. As a result, it doesn’t set out the vision of one or two people, but instead offers the assessment of a wide range of experts, who are working in or studying the areas we cover. We not only set out the problems and suggest policy solutions to address them.  Our aim is to help improve life for people living in today’s Britain.

Between each set of policy ideas, you’ll also find interludes.  These draw upon real-life stories of people in Britain who are experiencing unresolved difficulties that should be considered unacceptable in any developed economy or civilised society – and we suggest how these problems could be solved, too.

“We strongly believe that a society that produces healthy, well educated, strongly motivated people – who have, or can realistically hope for, a good standard of living – will also help to generate a powerful and dynamic economy.”

Although some depressing situations are described, our overall approach is extremely positive. Instead of denying that there are problems – or ignoring them, as many politicians have done – we take a much more “can do” approach to building the society that most of us would want to live in.  That leads to another significant point: Whilst Attlee’s 1945 government put people and society at the centre of its policy ideas, less than forty years later, Thatcher’s administration reversed this, focusing on the individual, privatization and the wealthy. This raises the question: “In whose interests should the economy be run”?

The shift to individualism, private profit maximization and an obsession with “free” markets resulted in serious wealth for the few – and runaway inequality and poverty for the many.  It’s therefore not hard to guess where those contributing to Rethinking Britain are coming from!  We strongly believe that a society that produces healthy, well educated, strongly motivated people – who have, or can realistically hope for, a good standard of living – will also help to generate a powerful and dynamic economy.

The post-1979 dogma – that the British government should play as small a part in the economy as possible – is also misguided. Far too much capital is being used for short-term, speculative purposes, whilst not enough is finding its way into the development of sustainable businesses that provide long term employment and pay decent wages – not the hand to mouth existence of a zero hours contract. In other words, the economy should work for the many, not just the few.

Another theme that runs through Rethinking Britain is the concept of citizenship – where sets of rights and obligations mean that you are indeed part of something bigger than yourself.  This is the polar opposite of Thatcher’s point of view, that there is “no such thing as society”.  Many of her policy ideas were developed in the context of the Cold War – which came to an end thirty years ago; and it’s time for her policy ideas to do the same.

By investing in Britain’s people, we can build a stronger, more cohesive society – which will underpin a more vibrant economy.  Rethinking Britain shows how.

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Speculative Aesthetics: Freeports as the Art Caves of High Finance

This article was written by Neil Fitzgerald, winner of the inaugural Verso Prize for Cultural and Critical Studies. Speculative Aesthetics: Freeports as the Art Caves of High Finance is a selection from the winning dissertation and was originally published on the Verso Books blog.


Fig. 1. Cave art from Lascaux

In a lecture given on January 18, 1955 in Orléans, the French writer and anthropologist Georges Bataille suggested that the paintings discovered at the Lascaux caves in France in 1940 announce the presence of man on earth –  man ‘appeared on earth with art’. The paintings are figurative – ibex, bison, mammoth rhinos, often in the process of being hunted by arrows (Fig. 1) – and Bataille suggests they reveal a magic-oriented desire for ‘assuring miraculous hunts’. He acknowledges the irony of how this discovery of ‘our birth’ is being made at a time when ‘the notion of our death appears to us’ in the guise of atomic experiments in the atolls of the Pacific.

What Bataille repeatedly stresses in this lecture is the relation of these prehistoric artworks to a form of ‘wealth’. One problematic he addresses is the inability of the contemporary visitor to discover these primitive artworks without the ‘present-day world’ following the viewer into the ancient cave. He highlights the parallels between the cave entrance at Lascaux and a Paris subway station, complete with admission tickets, bookstore and postcards. Bataille retraces the moment three 15-year-old boys re-discovered the cave network and art in September 1940.  He quotes one of the boys describing their discovery in terms of discovering treasure – ‘a casket of diamonds or a cascade of precious gems’; they thought that their fortune had been made. Bataille continues: ‘If we suddenly enter this world, the oldest one that man has created, we are seized by a feeling of fabulous wealth’. Their translation of this stupefying event into this language, Bataille argues, is because the feeling of personal wealth is the strongest feeling a human can have: ‘Lascaux is…rich to the point of dazzling us.’ In contrast to such riches is the poverty of his contemporaneous world, wherein everything is submitted to the control of profitability with one exception: ‘the engineering and materials of destruction, works that today threaten to exterminate the species.’ Bataille suggests that if we see ourselves in the beings who created the cave art, it is because they offer us this feeling of wealth, a feeling undermined by the poverty of the present-day which accompanies the latter-day visitor. Linking the marvellous with material wealth, Bataille posits the connection between art and economics lies in the fact that a work of art requires labour to be produced: ‘the work of art is wealth expended without utility.’ ‘The feeling of richness’ and the fact of ‘being dazzled’ are symbiotically entangled.

Since Bataille’s lecture, the interrelationship between art and ‘feelings of wealth’ has taken on a substantively different meaning. In 2012, global sales of art were estimated at more than £40 billion. The richness of this symbiosis is usefully demonstrated by the rise of the Freeport (Fig. 2), secure warehouse complexes which are said to house millions of works of art, although the confidentiality afforded by these locations means precise numbers and their value are impossible to come by.


Fig. 2. Le Freeport, Luxembourg

Freeports have garnered a reputation as ‘fortresses of art’ and ‘bunkers of the super-rich’ which operate as speculative safe-houses and galleries for the wealthy to shop in. It is noticeable how a martial figurative language is used to describe them as protection against potential attack. The website of Le FREEPORT in Luxembourg suggests clients choose their warehouse complex ‘to best preserve goods from theft, depredations, and climatic aggressions’. It is telling, however, that the locations of these warehouse complexes – Geneva, Luxembourg – are all in financial tax havens, suggesting that what they really offer protection against is an attack by the taxman. The key here is that the goods are technically in transit, and as such, are exempt from a raft of customs duties. The ‘port’ location ensures confidentiality, ‘not much scrutiny, the ability to hide behind nominees, and an array of tax advantages’, ultimately transfiguring these zones of transit into ‘permanent homes of accumulated wealth’. Tony Reynard, the chairman of a freeport in Singapore, believes the 2008 financial crash triggered a demand for physical assets such as art. These ‘physical assets’, however, are invisible assets, artworks carefully concealed from the view of thieves and taxation in high-security environments such as Le FREEPORT. Like death and extinction, these artworks are not part of human experience. Hidden from view, entirely withdrawn as phenomena, they move into the philosophical category of ‘non-existent objects’ – something that does not exist in reality, like unicorns or Sherlock Holmes, and yet can still be spoken about. Yet they still function as tradable commodities in a shadow market whose opaque transactions are legally sanctioned. The notion of ‘cave art’ has been inverted in freeports: these highly-secure climate-controlled structures now function as ‘art caves’, as places of un-seeing.

Within the Freeport art cave, artworks become objects of financial speculation – a tax-free safety-deposit box for off-shore assets. The ‘art object’ is wholly withdrawn, its historical ‘truth’ concealed in the logics of finance. Its existence becomes purely nominal, whatever value its title and artist can create on the market. The ‘feeling of richness’ or ‘wealth’ that Bataille spoke of in relation to the Lascaux cave art here becomes an economic investment – a feeling at once buried behind bureaucratic layers of confidentiality and secrecy deep inside the art cave’s security complex, and at the same time exterior to it – abstracted as an asset, a ‘feeling of richness’ revealing itself as a row of numbers on a balance sheet in another country. As Heidegger asked at the beginning of his essay The Origin of the Work of Art (1950-60), how does a painting go from a thing to a work? As a thing it can hang on a wall or be transported like coal. It becomes a work by doing the work of alēthia, disclosing a truth for a historical people. But today works are concealed behind concrete walls in art caves so that the concealing Freeport itself does this unconcealing, revealing the thingliness of works as speculative commodities, reified by an elite as mere financial resource.

Heidegger would perhaps see this as the culmination of the objectification of the aesthetic experience, of the art-object as mere resource. The ‘work’ of the art work is now done by money on the art market and by the artist’s name. A different version of Van Gogh’s A Pair of Shoes (1887) was sold at auction for $8.9 million in 2006 and now resides in a private collection. Heidegger’s pure notion of art also abstracts it from the logics of capitalism which the artist himself worked within. In 1888, Van Gogh writes about making his pictures have some ‘market value’; in 1883, he writes about not paying his taxes, demonstrating his poverty to the ‘assessors’ in his ‘four kitchen chairs’ and lack of ‘rugs, pianos, antiques’. In this conspicuous poverty, his house-cum-studio might be said to serve as a form of tax haven.

What brings the cave art and the art cave together are their susceptibility to the elements, including human observers. Both caves – prehistoric and contemporary – require a constant ambient temperature for the art to endure. Despite the vast temporal differences, the brute materiality of the art and its precariousness remain constant. Heidegger suggests that the art work creates a historical people who preserve the work and the truth it discloses in time, until it is displaced by a new disclosure. But now we find that later historical people are preserving earlier artworks. For example, the Chauvet cave art has been reconstructed using concrete-resin walls to preserve the originals from being damaged through human body temperatures disturbing the cave’s micro-climate. The simulacrum uses 3D scans, sculptures, and photos projected onto the rocks. Even the cool subterranean temperature of the original is replicated, as these atmospheric factors – darkness, humidity – are seen as integral to the ‘feeling of emotion’ generated by the original art.  The website boasts that visitors entering the replica cavern ‘will discover the world as it appeared to men and women 36 000 years ago’. Thus, in spite of Heidegger’s critique of the aesthetic experience of artworks, it is this very quality which engenders the preserving of the cave art. How such simulacra, be it the replica cave, Werner Herzog’s documentary film, or photographs, transfigure the original work of art, is an important question. The German Critical Theorist Walter Benjamin’s ‘The Work of Art in the Age of Mechanical Reproduction’ or Jean Baudrillard’s work on simulacra could provide intriguing frameworks for answering such questions.

In Heidegger’s essay, the earth is seen as the ontological horizon of all human being, which is now being threatened by the worlding of Late Capitalism, a system which benefits from concealing the truth of its destruction of its foundational earth. The Marxist philosopher Slavoj Žižek has suggested humanity’s ‘collective ideology’ is ‘mobilising mechanisms of dissimulation and self-deception’ rather than facing up to the climate catastrophe at hand and the necessary economic shift needed to counter it.[1] Are these freeports, then, one such mechanism of dissimulation and self-deception, seeking to conceal rather than unconceal the increasingly uneven strife between earth and world?


[1] Slavoj Žižek, Living in the End Times (Verso, 2011), p. 327.

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