Christmas is the time for taking

Public sector workers in Leeds, West Yorkshire Nov 2011.
Source Flickr: Fighting For Decent Pensions

As a South African, one is used to industrial action, so it was strange to see the UK up in arms over a public- sector strike recently.

Some two-million public-sector workers, including teachers, healthcare professionals, university lecturers (including myself) and other civil servants, refused to work as government sought to cut pensions and force workers to work longer. The unions described the strike as the biggest in a generation. Government felt it was futile.

I do not wish to rehash the views of the unions and government, but rather highlight the split in opinion on the strike between public-sector and so-called ordinary private-sector workers such as retailers and workers in companies.

The argument from the private sector was simple: public-sector workers still have pensions, so why are they complaining about cuts and having to work slightly longer to get their, relatively speaking, generous payouts. Private-sector workers generally have no pensions, or their pensions were cut years ago. Currently, the mean average public-sector pension is about £7 000 a year, whereas in the private sector it is £5 000.

But what is mystifying about these arguments is that they somehow imply that what has happened to private-sector workers is right, or that if one sector of society is going to be screwed by big business and the pension companies, then everyone should. Two wrongs do not make a right.

The rich, of course, remain immune to all this. The annual pension of 346 directors from 102 of the UK’s top companies will be £200 000, compared with the average workplace pension of £8 100, a study found recently.

The current pension fight is also the thin edge of the wedge. A recent report by PricewaterhouseCoopers estimates that, by 2080, the average person will have to work to 74 to get a pension. Further, figures suggest that the public sector may lose 490 000 jobs in the next few years. This will play itself out in the lives of ordinary people.

As the public sector shrinks, for example, waiting times in hospitals and teacher-to-pupil ratios will increase. Despite attempts to portray the public and private sectors as separate, they are also integrally linked. An enormous number of people in the private sector is dependent on the public sector for contracts.

According to the Institute for Fiscal Studies, the average family in the UK will lose £2 500 in annual household income, compared with three years ago.

So this is not about the public sector versus the private sector – this is about government choosing to support the very rich at the expense of ordinary people.

Bankers, who caused this crisis, continue to steal from taxpayers unashamedly. Directors’ pay rose by 40% last year. A total of £4.2-billion will be paid out in bonuses to bankers this year in the UK.

The Royal Bank of Scotland, now 84%-owned by taxpayers, is still intending next year to pay its top bankers £500-million in bonuses. Last year, the bank made a loss of £1.1-billion and paid out £950-million in bonuses. The top 100 bankers received over £1-million each.

Taxpayers are paying for these bonuses. So when nearly five-million people are told their pensions are going to be cut, including teachers, social workers, soldiers, firefighters and the police, it makes perfect sense they are angry, especially when they have been paying their contributions to pension schemes in good faith.

Now is the time to work together. But instead of the working public uniting to say enough is enough, different sectors of society are hurling abuse at each other. This is akin to having an argument on the deck of the Titanic about who is going to be affected the most when the iceberg hits, while the super-rich row off in the lifeboats.

This article by Brandon Hamber was published on Polity and in the Engineering News on 16 December 2011 as part of the column "Look South". Copyright Brandon Hamber.

I would rather be hung over than be a glutton

t is difficult to write on subjects like alcohol without attracting criticism. Mentioning the word in a column such as this can result in letters claiming the wrong sort of message is being promoted. I recall receiving an email berating me for noting in an article that I had paid for a large purchase with a credit card. The complainant felt it was problematic because I was advocating negligent personal finance. So let me begin by saying that I am not encouraging either irresponsible or responsible drinking, whatever that is.

In fact, I do not even want to write about the merits or demerits of drinking alcohol – rather I want to talk about hangovers, or, in South African parlance, babalas. I have, of course, never experienced a hangover and, for those of you wondering, the glass of wine sitting on my desk right now is only there to increase my bohemian literary credentials rather than assist in lubricating my vocabulary.

I hear, however, that, by all accounts, a hangover is deeply unpleasant. Apparently, there is nothing worse than waking up fully clothed (or sans clothes), dehydrated and with a piercing thud in your head that is only interrupted by waves of nausea that make seasickness seem desirable.

But are hangovers not inevitable if you really want to have fun? The mature among us would say, of course, that they are not. Everything in moderation is a more measured way to live. But is a little overindulgence from time to time not necessary for the human spirit to replenish?

It has not taken long for the word ‘hangover’ to become associated with the post-World Cup woes in South Africa. The Economist ran an article in its August edition titled ‘After the party . . . comes an almighty hangover’. The piece referred to the public-sector strike that shook the country to its core in the last few weeks.

Over one-million people took part in the strike. Horrific incidents hit the international media, including striking hospital workers leaving patients to die and picketing teachers beating children as they tried to attend school. Such stories are stomach churning.

I do not want to debate the machinations of the strike – there are more sophisticated political analysts than I who can do that. But, given the social and economic problems in South Africa, was a serious clash between government and workers not inevitable with or without the World Cup?

The World Cup might have temporarily diverted attention from the country’s underlying social problems, but they were always there. The tournament merely dulled the political senses for a while.

Personally, I think the country was right to throw the World Cup party. Some hangovers are worth it, even if the eupho- ria (which, in this case, came in the form of a reignited sense of racial unity and a reminder of what might be possible) is artificially induced.

Enjoying a party and tackling deep, underlying structural issues are different things. I know many would say this is a reckless comment, as the money spent on the World Cup might have been better used, but tackling social problems in South Africa is a long-term project. The World Cup is a blip in the history of this process, a tiny contributor, whether positive or negative. Only the naïve would have ever seen it any other way.

Remember, when dealing with the deep social problems – whether in South Africa, Ireland or the UK – it is not the occasional spending binge, like the World Cup, that is the problem, but the persistent drain on or misdirected use of resources. The main culprits are businessmen (they are mostly men) and politicians that continue to suck economies dry through greed and a lack of willingness to bring others into their gluttonous economic clubs and, lest we forget, corruption and political ineptitude.

Brandon Hamber writes the column "Look South": an analysis of trends in global political, social and cultural life and its relevance to South Africa on Polity. Copyright Brandon Hamber, September 2010. "Look South" Column published on Polity on 17 September 2010.

Is the credit crunch the new Black Death?

Sometimes I find myself studying random and frankly weird subjects. My most recent foray has involved delving into the history of the Black Death. This makes me appear macabre, but I stumbled across a radio programme on the subject and it pricked my interest.

From 1340 onwards, the Black Death killed some 75-million people across the globe. In Europe it is estimated that 25-million to 50-million people died, meaning that one-third of the European population was wiped out. The scale of death had sweeping social consequences.

For example, the disease, or cluster of diseases, had a major impact on the Catholic Church. Not only were swathes of the church leadership infected and killed, with some sources putting the estimates as high as 40%, it also led to a decline in faith and religious allegiance. Many felt God had forsaken them. For others their loyalty to the church dwindled because promises by the church that the righteous would be saved, or a divine cure could be found, never materialised.

The result, as Samuel K Cohn, professor of medieval history at the University of Glasgow, has noted, was that chroniclers of the plague turned from supernatural and religious causes to considering social, political, and even evidence-based medical causes. He argues this provides new insights into how the Renaissance came about.

Put another way, traditional orthodoxy, assumed knowledge and power, which at the time was monopolised by the church, were challenged and this led to innovation. Further, some argue that the decline in numbers of available workers resulted in improved wages and was one of the factors that contributed to the end of the feudal system.

Of course, I am simplifying a complex history, and there are many competing versions of what I have outlined above, but the point I am trying to make is that disaster can lead to progress. Obviously, pestilence and horrific disease is not what anyone would choose as a way of advancing society. But any process that challenges, for whatever reason, unjust power structures merits interest.

The current financial crisis is a case in point. For the last 20 years, the financial system has been the high church of Western society. Investment bankers were treated as demigods and free market radicals as purveyors of an ideology that was unquestionable. The market, as a self-regulating force that rewarded those who knew how to play it, was an irrefutable belief system.

But many bankers have been proven incompetent and some corrupt, and the world’s largest banks have had to be ‘regulated’ and bailed out by government cash. Financial orthodoxy has been shaken to its core.

However, another consequence of the Black Death in the 1300s was the tendency to scapegoat individuals as the impact of the disease spiralled. For example, Jews, and other minorities, were persecuted across Europe as rumours spread that the plague was caused by them, with some thinking they were poisoning the water.

Applying this to the present, I believe it is only right that the financial crisis should lead us to question perceived economic wisdom, but we should also show restraint and resist attempts to look for easy answers or assume only a handful of people are to blame. Most across the globe bought obediently into the system hoping to make a quick buck.

There are individuals who milked the system and large pension payoffs for those who failed to prevent the collapse are distasteful in the extreme. But campaigns to go after specific bankers miss the bigger picture.

There is a need to find a new economic order and energy should go into that. The system has failed not just individuals.

So, just as the Black Death led to change, the current financial crisis should be about finding new ways to diagnose and run a socially responsible economic system while curing the rampant disease called greed at its core.

This article by Brandon Hamber was published on Polity and in the Engineering News on  13 March 2009. as part of the column "Look South". Copyright Brandon Hamber.

Why I prefer pizza to bankers

Whenever there is a disaster, jokes start doing the rounds pretty quickly. Recently, I heard this one: What’s the difference between a pizza and a banker? A pizza can feed a family of four. Of course, the economic collapse is no laughing matter. But why then are some people poking fun at it? The answer is easy: there is a popular sentiment that the wealthy in society are oblivious to the poor and deserve their comeuppance.

As it stands, it appears that it is those with massive investments in the stock exchange that are taking the initial hit. Since the beginning of 2008, holdings in the US stock exchange have dropped from $20-trillion to $12-trillion. According to the Wall Street Journal, the average loss in stock exchanges across the globe is 40%. In other words, those who are feeling the pinch are the wealthy, at least for now.

The word on the street is that greedy investors have got what they deserve for years of excess and self-indulgence. It was largely bankers and those selling mortgages who wooed in cash-strapped borrowers, making a cut for bringing the financial institution business and essentially tying the borrower into a form of debt bondage for life. Everyone was so busy making money that nobody stopped to think about the consequences.

But the direct economic impact is only one aspect of the disaster that capitalist gluttony has left in its wake; the other part is psychological. The financial feeding frenzy of the last two decades has instilled a set of distorted beliefs. CEs who earn six-figure bonuses believe they are worth it and think that the wealth they create will somehow trickle down to the poor. Workers at the bottom of the financial food chain have started to believe it is their fault they are destitute.

Polly Toynbee and David Walker in the book Unjust Rewards demonstrate that the exact opposite is the case. Firstly, they show that where you are born is the biggest predictor of financial success. Class largely determines your chances of succeeding, not hard work as so many like to think. Secondly, they show that many top earners have no idea about how the majority live. Toynbee and Walker held focus groups with bankers and lawyers in the UK whose earnings are in the top 0,1%. They found that interviewees struggled to understand how people in the UK can live on under £40 000 a year when in fact 90% do. One of the interviewees thought his salary was average. He earns £200 000 a year.

Taking pleasure in the banking sector’s humiliation is, of course, short sighted. There is more to come. According to Forbes.com, in recent times, the average economic decline has lasted for 14,4 months. Further, the process might start with high stake losses on the stock exchange, but will eventually translate into the loss of working-class jobs as the whole economy slows down.

That said, the philosophy that unbridled capitalism is the only option to grow an economy has taken a major knock. One can also only hope that the crisis has left the banking sector humbled and more in touch with its limitations. The so-called financial banking giants of this world, The Guardian estimates, have needed $2-trillion to $4-trillion from the public purse around the globe to bail them out. They should be ashamed, repentant and embarrassed. But have lessons been learned?

Toynbee and Walker point out that the total salary packages of CEOs of the 30 biggest UK companies rose by a staggering 33% in 2007/8 as the reality of the crisis was hitting home. What is more, I have not heard one banker that oversaw this catastrophe apologise or thank taxpayers for the money. So what is the difference between a pizza and a banker? At least a pizza knows it is nothing more than fast food.

This article by Brandon Hamber was published on Polity and in the Engineering News on 31 October 2008 as part of the column "Look South". Copyright Brandon Hamber.