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Friday 22 July 2011

For democracy's sake Charlie Gilmour's appeal must be successful

I've got to give Charlie Gilmour credit - it takes a lot for me to consider a grave miscarriage of justice to be justified, but he gave it a good go. That doesn't change the reality that his disproportionate sentence of 16 months for his behaviour last December during the Tuition fees protest has serious implications for our supposedly pluralist democracy. The result of his appeal will tell us a lot about the type of country we live in now.

From the outset he was a complete and utter PR disaster for the tuition fee protest movement. I have said (click here and click here) that there are legitimate arguments for an against the imposition of tuition fees, but at it's most basic, the issue is whether or not taxpayers' money should be used to fund the university education of (if New Labour's target is reached) 50% of the school leaving population.

If you wanted to paint a picture of why that shouldn't happen, I imagine you might create the image of Charlie Gilmour. Adopted son of Pink Floyd's David Gilmour, he is the scion of a multi-million pound fortune. The two Saville Row suits he received as a reward for getting into Cambridge (click here for proof!) would go a long way towards paying for a year's tuition there under the proposed fee plan. Not the best poster boy when you are asking someone on minimum wage to fund university education (let's not forget that everyone pays tax, not just the rich, and it is the poor who can't avoid it).

Gilmour, allegedly under the influence of a cocktail of drugs, spent the day swinging on the Union Jack hanging from the Cenotaph (insisting he wasn't aware of the significance of the Cenotaph), attempting to start a fire outside the Supreme Court, allegedly throwing a rubbish bin at the Royal Convoy taking the Prince of Wales and the Duchess of Cornwall to the Royal Variety Performance as well as reading poetry to the police and shouting political slogans such as “you broke the moral law, we are going to break all the laws”, "storm Parliament", and, simply, "arson". He was also part of a mob who smashed windows at Top Shop in Oxford street as staff cowered inside.

16 months in prison. You can get less for sexual assault, GBH and many other crimes where people actually get hurt. What's more, Gilmour pleaded guilty from the start. No waste of court time trying to prove the case against him, just the matter of sentencing. 16 months in prison.

I don't know where to start. Apparently it is a legitimate practice for sentencing to be "exemplary" - to discourage others from acting in the same manner. Actually, it may discourage others from acting in the same manner - in that it may discourage others from protesting when they feel they are being wronged.

Let's go back to the apparent "problem" with Charlie Gilmour. He is rich. Whatever happens he will be OK because his parents have a lot of money. So, some people argued that he had no business being on that march. In that case, about 90% of the people on that march had no business being there either. In fact 90% of people on any march have no business being there.

For instance, almost all of those on the march against the Iraq War in 2003 were not actually going to be "affected" by the war. They weren't going to die, they weren't going to go throught what the Iraqi people have gone through in the last 8 years, yet there they were, arguing against a government policy they didn't agree with. Tony Blair, PM at the time - said on that day that being able to protest is a "natural part of our democratic process".

The protesters on that day were there not just in support of themselves but for those who might be students in the future. The word, I believe, is "solidarity". As Barbara Ellen points out in an excellent article on this in the Guardian (click here) "effective protest relies on disinterested participants like Charlie. Society needs, has always needed, people at marches, who don't really have a "reason" to be there, who aren't directly affected by the issues. This is not only to swell numbers, but to demonstrate that different groups will not be left stranded and isolated to fight lonely, desperate battles and that many feel, to borrow a tainted phrase, "all in this together".

Let's move on now to the concept of an "exemplary" sentence. Why prison? Surely that is a missed opportunity to use a far more effective example. Gilmour's crimes were against the community. Although he wasn't charged for what he did at the Cenotaph (as it wasn't a crime) his behaviour - even in the words of Barbara Ellen "was like watching a baboon shit on the faces of the war dead." He did attempt arson and his behaviour around the royal convoy did cause considerable distress to those within it, whether or not he threw the dustbin. So why not community service? Why not ask him, for instance, to use his considerable academic gifts to educate children about the meaning of the Cenotaph? Why not ask him to clear up after the next protest/riot (and there will be one) so he really understands the consequences of the destruction he was part of causing?

Why not find a way to ensure that the young, many of whom have been written off as apathetic but who are just finding their political voice,  learn from Charlie Gilmour's fate something more than that if you show up to protest about something you believe in you run the risk of 'exemplary' justice being done to you, whatever that means.

When we teach the functions of pressure groups in AS politics, we talk about their value as a "pressure" valve, releasing tension and allowing people to "let off steam" about their cause or sectional interest. A pluralist democracy allows power to spread amongst different groups in society. If young people feel powerless, they need to be able to associate with each other as they have done over tuition fees, and make themselves heard. Suddenly, we have our young people politically active, and we need to encourage that.

Yes, Charlie Gilmour went too far. He admitted that and he should have been punished.

But 16 months in jail? For democracy's sake this should be reconsidered.
 

Wednesday 20 July 2011

Murdoch - 'Willful Blindness' or just plain old Diseconomies of scale?

The professed lack of knowledge possessed by Rupert Murdoch and James Murdoch of phone hacking at News International demonstrated either that their company is too big for them to co-ordinate and control successfully, or that they are guilty of "willful blindness".

Diseconomies of scale are easy to explain. Economies of scale are where firms produce more efficiently as output grows. This can be because they can for instance buy in bulk, use the best technology or have access to the best finance terms. Diseconomies of scale are where firms produce more inefficiently as output grows. It happens past a certain point which is different in every industry. It certainly appears to have happened at News Corp.

Diseconomies of scale can happen for a variety of reasons but suffice it to say that the bigger a firm is, the harder communication and co-ordination of all the firm's resources are. In order to deal with this, the firm may put in certain safeguards (for instance, the reason Rupert Murdoch didn't hear about the payoffs to Max Clifford and Gordon Taylor in 2007 was because it wasn't for large enough sums for him to be told about it). No-one who watched or read the reports of the select committee inquiry yesterday could fail to be amazed at just how much wrong-doing the Murdochs weren't aware of within their family company. Rupert Murdoch said that the News of the World is only 1% of his company which is why he wasn't aware of it. But because he and James weren't aware of it, their company is paying to the tune of billions off their valuation. This is diseconomies of scale, and a very good example of it.

But there is another explanation, and committee member Adrian Sanders brought it up yesterday in the inquiry. He asked whether the Murdochs were aware of the term "wilful blindness". Rupert Murdoch indicated he had 'heard of it'.

As Margaret Heffernan has suggested in an excellent article in the Huffington Post (click here to read full article) every institutional debacle features the same arguments from those in charge - that 'it was just a few bad apples. Nobody at the top was to blame.  A few rogue, or over-zealous employees just went off piste'. As the crisis deepens the explanation moves to "no one could possibly have seen this coming". Both arguments were used in Abu Ghraib, Enron, WorldCom, BP and Lehman Brothers. Both were wrong then and are wrong now.

Heffernan believes that the phone hacking scandal, and the enormous price paid for it by News Corporation, isn’t the unfortunate byproduct of a few naughty freelancers. Nor was it an unpredictable, unforeseeable event. Rather, it was the product of a series of systemic failures any one of which was visible, but each one of which Rupert Murdoch and his UK-based chose to ignore.

She goes on to define 'Willful blindness' as a legal term, cited in the trial of Enron’s Skilling and Lay (about this here) . It states that if there is knowledge that you could have had and should have had but chose not to have, you are still responsible. The causes of organizational willful blindness are many but News International demonstrated most of them.

Ideology - Murdoch believes in political power and the importance of economies of scale. This had once made him successful but now blinded him to the British public's recently acquired distates for politics (MP's expenses) and foreign takeovers (Cadburys).

Obedience - As Murdoch's power increased, people wanted more and more to please him - for instance by getting big exclusives, however so acquired - and no one will intervene as non-compliance looks like disharmony.

Conformity - people in large organisations become so determined to 'belong' that they will give the wrong answer rather than be left out. So no-one would tell Murdoch what that something was wrong.

Money - there have been many experiments to show that large amounts of money undermines our social connections - making a person like Murdoch 'blind' to their customers, markets and political mood swings.

Power - the more powerful people become, the more likely they are to take big risks, think in abstract terms, and be absolutely certain they are right.

Affirmation - It is always nice to be surrounded by people just like us, confirming our sense that we are good and right. Murdoch's children surround him and may have blinded him to the full ramifications of what was going on.

'Willful blindness' is convenient. It means you can create an atmosphere and culture in which people will do absolutely anything to please you get noticed yet take no responsibility for their actions. As the executives at Enron found out (and sit in jail because of it) and the Murdochs may be about to find out, it is no excuse.

Tuesday 19 July 2011

If Ed Miliband keeps going he may get the biggest scalp - David Cameron

Ed Miliband is onto something. He knows it too. He's chipping away at a fault line in David Cameron's defences which could turn into a massive earthquake if Cameron has to answer one question on oath - "was the retention of Andy Coulson in Downing Street after the election the condition on which you got the support of News International's papers?" I'm not one for hyperbole, but if it's true, then he will be truly compromised and may have to resign.

Miliband has had an excellent fortnight. He has gone from a laughing stock to the central pillar around whom the country's horror at the behaviour of the News of the World has been built. He tells of the day he decided to come out against them and it says a lot about the power News International thought they had.  He talked in Saturday's Guardian about receiving a phone call from News International to ask what his response will be to the allegations about hacking into Milly Dowler's phone, went into Parliament and demanded an investigation and the resignation of Rebekah Brooks, and received another phone call from News International to warn him that "now he was making it personal against them they would make it personal against him." To his credit, he hasn't backed off since and he is reaping the political dividends rightfully.

Another person who has grown massively in stature throughout this process is the Labour MP Tom Watson. Once one of Gordon Brown's main attack dogs, he has already been named "Committeman of the Year" by the House of Commons for his persistent attempts to get action on phone hacking as a member of the Culture, Media and Sport select committee. He talked on radio the other day about being called rude names by Sun reporters two weeks ago, and being insulted about his weight (which he wasn't bothered by). Then, he alleges, he was told by the Sun journalist that they were sitting on stories about him and if he didn't "back off" they would print them. Thankfully, Watson either has enormous backbone or knows that they have nothing on him because he hasn't backed off one bit.

Back to Miliband though. At the same time as wanting to know about the past he is focussing on the future too. He produced an excellent speech back in June on "responsibility" - putting together bankers and welfare cheats and asking them to show more responsibility (worth a read here). This crisis has come along at a time when he has been able to expand that to all of those with any power. An A-level student of mine once wrote a global politics exam essay around the quote "with great power comes great responsibility", attributing it to Gandhi when it fact it was from Spiderman the movie (!). His sentiments were correct though, and Miliband has expanded his narrative to include politicians, media owners and anyone else who has a bit of power. Even if he has been "lucky" to have so effectively captured the zeitgeist, he may well have a narrative that can propel him and the Labour Party forward to 2015 when they will so need a compelling narrative in order to get back into government. If he can hang some compelling policies around this he really will be going in the right direction.

Connected to that is the question raised by both Ed Miliband and Nick Clegg about whether the type of media power prevalent in this country should ever be allowed. Rupert Murdoch owned newspapers totalling 40% of circulation in this country and a major broadcaster. Richard Desmond owns a few newspapers and a terrestrial channel. That is a large concentration of power and the dividends Murdoch in particular received for the power he held were huge. It has been shown that David Cameron met News International executives since he got into power as many times as all other newspapers put together. Is that right? Expect to see as part of this whole process a decision on the limit of media ownership allowed. This isn't an argument about private vs public or capitalism vs state, it's about government ensuring that democracy isn't affected by the proceeds of capitalism. The basic tenets of Conservatism argue that the role of the state is to ensure that the worst excesses of capitalism and private sector ownership are curbed (thereby ensuring, as Thomas Hobbes stated, we don't live a "nasty, brutish and short existence"). It assumes that man is born with "original sin" and needs to be guided. Turns out that News International needs to be guided, and in the absence of any sense of leadership on this from David Cameron and the Conservatives, Miliband has stepped into the breach.

Which leads us onto the question that David Cameron may one day have to answer. Was Rupert Murdoch's power so great that he could insist that a man clearly tainted by association with scandal had to remain at David Cameron's side, a direct contact for News International into the corridors of power? If so, and if Cameron didn't act responsibly and say that their support wasn't worth the risk, then he may have to take ultimate responsibility for that. Ultimate responsibility is what Sir Paul Stephenson has just taken by resigning from the Met Police for their links to Neil Wallis, links about which he says he didn't know. Cameron insists he didn't know either, yet he still took the risk and now may need to take responsibility for the outcome.

Monday 11 July 2011

NOTW - Let's not throw the baby out with the bathwater.

It was illegal and many people would argue it should not be allowed. An office worker was paid to download private information about the spending habits of their organisation's employees onto a series of disks and hand them over to journalists who would scour through them and publish anything of interest. In that case, it was MP's abuse of expenses that were revealed. If we are not careful, the current witch hunt against the media could result in a the type of hurriedly and badly drafted law that would make it impossible to hold those in power to account. We have the right media laws, we just need to implement them properly.

In what has been a fascinating week for watchers of politics and the media, some other issues spring to mind in terms of what has happened with the closure of the 168 year-old News of the World (NOTW) worth a look for politics and economics students.

1) The Principal- Agent problem -  in very large organisations there is a divorce between ownership and control. Sometimes this can lead to  managers and employees of a company not to act as the owners might have wished. This is certainly the angle that Rupert Murdoch is taking during this crisis. Starting off by blaming the phone hacking on bad eggs within the company, the owners of News International have had to change their tone and verbiage as the realisation has grown that they aren't going to be able to bluff and obstruct their way out of this one. As I said in January (click here), I believe that the culture created by Andy Coulson encouraged journalists to do anything for a story. I would argue the same thing again for the culture created by Rebekah Brooks (then Wade), who was editor at the time when Milly Dowler's mobile phone message box was being hacked (and messages deleted to make room for more, making the police and her parents think she might be alive) by private investigators hired by NOTW journalists. She insists she didn't know about it and was on holiday at the time - but she didn't need to know about it - she was in charge, which is why we have the witch hunt that we do now. Worse for Rupert Murdoch is the involvement of his son, James - who has had nothing to do with the NOTW but may possibly be accused of obstructing justice during the investigation. At the moment, Brooks is taking the heat, as a human lightning rod for the Murdoch family (I wonder how much money persuaded her to do that). But I have heard quite a few times this weekend that there is a possibility James Murdoch could end up dragged into this to the extent he is fighting to stay out of jail. Rupert Murdoch will sacrifice ANYBODY to stop that happening, as we saw last week.

Going back to the Principal - agent problem - some News Corp shareholders have filed a suit in the USA arguing that News Corp management's failure six years ago to take sufficient action when the phone-hacking candal first broke demonstrated an "unwillingness by management to provide adult supervision". This large scale failure of governance was a failure of management and went against the owners' interests. Fact is that management seemed not to have been incentivised to investigate properly.

2) The power of the unions (and lack of power here) - Wither the NUJ? Whilst 200 journalists, many of whom had nothing to do with phonehacking, were stripped of their livelihoods in order to save the person who was editor when the worst of it happened - the NUJ were nowhere to be seen. Unions were set up for this reason, to protect the jobs and working conditions of their members, and this hasn't happened. At first, I was despairing - instead of going on strike against demographics, they should have been fighting against the exact example of capitalist destruction (particularly given it was done to protect a member of management). But then I did a bit of research and found that Donnacha Delong in the Guardian could explain it:

"Unfortunately, the NUJ remains locked out of News International due to a ridiculous loophole in the law on union recognition. While claims for applications for recognition can only be made by independent trade unions, they are blocked from doing so if there is pre-existing recognition of a non-independent "trade union". In the case of News International, that so-called trade union is the News International Staff Association (Nisa), which the Certification Office denied recognition as an independent trade union in 2001. Nisa remains what then NUJ general secretary, John Foster, then called "a company union, set up largely to keep independent unions out". Yet in the three-hour debate in the Commons on Wednesday, or on Thursday night's BBC Question Time, not one political figure mentioned this ridiculous situation."

Unions are absolutely vital for situations like this. I find it annoying when they dress up self-interest and avarice as being in the public interest and when they protect inadequate workers (particularly teachers) but in the case of journalism the unions would not only have caused a justifiable fuss about what happened to NOTW staff last week but in journalism the unions have a record of upholding standards and ethics - such as the time when members of the print unions refused to print a picture of Arthur Scargill making what looked like a nazi salute during the miners' strike and when journalists of the Express stopped working until the paper pulled a regular page called the "Daily Fatwa".

3) The chicken and egg question of just how powerful are newspaper proprietors - On Question Time last week Baroness Shirley Williams pointed out the need for two public inquiries: One to look into phone hacking and the other to look at the relationship between politicians and the media. Politicians have been lining up to admit that they have been too close to newspaper proprietors in the past and want to change now. Ed Miliband had a very good week in being one step ahead of David Cameron by disassociating himself with News International.

Cameron eventually spoke about it on Friday but the fact is that he is a personal friend of Rebekah Brooks, who lives in his consistuency. The other fact is that the major political parties have become terrified of Rupert Murdoch since he claimed to have won the election for the Tories in 1992 then his switches to Labour in 1997 and back to the Tories in 2010 were also influential. Not only have politicians felt this but journalists have done so too. Tom Watson, the Labour politician who has been at the forefront of the backlash against News International, has told of a stream of personal abuse being hurled at him by their journalists and a message being given to him that The Sun were holding back stuff they could print about him but would print it unless he backed off. If journalists feel they have that much power then we are not in a good position.

But actually there is possibly a chicken and egg situation here. People who have worked in communications in Downing Street have been telling on the radio and TV of how policies get sent back to departments unless they are tabloid friendly, and this is seen as a sign of how powerful the tabloids are. Murdoch has argued that he is merely reflecting public opinion. But does he? Or does he impose his opinions - or the opinions and preferred policies of his major advertisers (who are so important that they caused the closure of the papers) on the public, pretending that it reflects everyone's views?

4) Competition policy -  this is a great example of the difficulty when dealing with mergers and acquisitions in this country. Politics gets involved. It got involved with Kraft's acquisition of Cadburys last year (when the withdrawal by Labour of a condition that tested whether a merger was "in the national interest" left them powerless to intervene when a crown jewel of British manufacturing was bought). It is getting involved now with News International's attempt to buy the remainder of BSkyB (they own 39.1% already). Labour and Lib Dem politicians are arguing that the government should pull the plug on that now. I have written before (click here and go about half-way down for this) about why News International wants to do this. Let's just say it would give them access to a massive amount of money. Given the link between money and power and the belief that Rupert Murdoch has quite enough for now you can see why politicians (and rival newspaper proprietors, who must be absolutely delighted with this latest turn of events) are so interested in derailing it.

However, the laws on this are pretty clear, and in a statement today News International pointed it out - "News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK." Given that Sky News only has about 7% of the TV news viewers, they might be right, although when added to the amount of newspapers owned by News Corp (a far greater proportion than in any other country), one can see what the problem might be. 

But opponents of the deal are bringing in the "fit and proper test", which OfCom can apply under the 1990 Broadcasting Act to make sure that owners of broadcasting companies meet ethical requirements. The problem there is that the Act does not make clear what "fit and proper" means, nor gives any guidance on the matter. News Corporation have not had any compliance issues before and should OfCom decide that what has happened is reason to reboke their licence to broadcast they will open up a pandora's box of legal problems for themselves as News Corp will argue that the decision has been politically influenced, in particular because until the law is tightened up and a proper definition of "fit and proper" is created then News Corp's lawyers will have a field day.

Today, News Corp announced they had dropped their commitment to make Sky News independent, which automatically triggered the Competition Commission investigation. This could have been done for a few reasons. One was to give the government breathing space to refer the bid instead of stopping it. The other could be as a pre-cursor to News Corp simply dropping their ownership of UK newspapers. Given they have been subsidising the Times for the past few years we may need to be careful what we wish for. 

5) Media laws - The Press Complaints Commission defines public interest as including but not confined to: detecting or exposing crime or serious impropriety; protecting public health and safety; preventing the public from being misled by an action or statement of an individual or organisation. It points out that there is a public interest in freedom of expression itself. If journalists rely on a public interest defence, editors must be able to demonstrate that they reasonably believed that publication, or journalistic activity undertaken with a view to publication, would be in the public interest. The problem with what the NOTW did was that there is certainly no public interest in deleting Milly Dowler's voicemail messages and, given Gordon Brown's determination never to use his children publicly, no public interest in an exclusive that his son had cystic fibrosis. Rio Ferdinand is at the moment arguing that his sexual pecadillos are also not in the public interest, even if they are interesting to the public.

The point is that undercover methods will always be needed if wrongdoers are to be held to account. You CAN pretend to be soemone else to gain access to private information. You CAN pay someone to download sensistive company data onto a disk. You CAN secretly record conversations. But ONLY if you can prove that the material is obtained in order to publish a story in the public interest. The Watergate scandal, the information on the sinking of the Belgrano during the Falklands war, MPs' expenses, the publication of diplomatic cables provided by Wikileaks - all were obtained illegally but led to stories that were in the public interest. My concern is that new media laws are created that stops this happening.

The history of politics is littered with examples of hurriedly drafted bad laws to respond to public and  political clamour. The laws may need to be clarified, but more importantly, they need to be implemented. There was not a proper police investigation here - partly because the case was passed to the anti-terrorism squad on the very day that the plot to blow up airplanes was discovered, but also allegedly due to the police being compromised by their relationship with the NOTW and possibly being intimidated by the way they operate.

That, I hope, is the change that ensues. What is certain is that much more is to come on this story.