THE age of the "franchise" is back in Britain.
Not franchises to fry burgers or sell Japanese jeeps. But in an older meaning, fitting the London bank traders now crowding round the Bollinger trough. "You still don't get it? Your rules and laws are for the punters – not for us!"
Long ago, when kings rode about their kingdoms, they had fools to make them laugh and the Treasury was an iron box on a cart behind them. And they sold franchises. You could buy the right to make your own rules, to live like a state within a state.
Foreigners often had franchises. German merchants at the Steelyard in London had their own laws, levied their own taxes and spoke their own language. The Lombards did pawnbroking, running their own settlements in the heart of royal cities. The Jews did banking and craftwork, permitted (between anti-Semitic outbursts) to enforce their own religious and secular laws. The Scottish colonists on the Vistula did not follow the laws of the Polish Commonwealth but drew up their own, Presbyterians protected in a Catholic realm. Non-Muslim communities in the Ottoman empire had similar legal autonomy. The price of a franchise was usually a fat rent paid by the community to the king or local ruler.
"You can't touch me, I'm a Lombard!" But this patchwork of privilege was doomed by the arrival of the modern, centralised nation-state. The French Revolution abolished "tax-farming", by which you paid for the right to extort as much cash as you could from a whole district. Ever since, franchises were remembered as horrible, reactionary.
But now, as one British profession after another tumbles into the slime, the franchises return. Look at the chaos in the British state, the cries of moral horror. It is not just that many of the privatisations and "public-private finance initiatives" which arose under Thatcher-Blair governments were really a return to ancien-regime tax farming. It is that whole sections of society have come to feel like franchises, like bubbles immune to the standards of the world outside.
"You can't touch me, I'm a banker." Or a Member of Parliament. Or a tabloid editor. Or (though this scandal has yet to burst) a lawyer. Or a police commander who seldom pays for his own lunch. Or a fat cat whose tax bill is dwindled by a few words over a gin with an old schoolmate. "You just don't get it, do you? The laws and moral standards which you scruffs out there have to comply with, they don't apply to us."
Some call this simply moral decay, the collapse of old standards into general acceptance of selfishness and greed. To the list of delinquents they would add "the people" – or at least the English people, as seen during last summer's enormous riots and lootings. But that's too vague. And it doesn't fit the facts. Firstly, the rioters prompted as many citizens to pour out on to the streets and clear up the mess. Secondly, it has been true for centuries that looting breaks out the moment order is seen to be in retreat. Deplorable but nothing new – any more than murderous English rioting is new (no-one likes to remember the shocking race riots in port cities during the years after the first world war).
So the problem is not some shrivelling of British common feeling. (I have twice in my life had to use a stick, and the readiness of passengers on public transport to give up a seat has increased strikingly). What's wrong is that British institutions are coming apart. The external glue which somehow attached them to the public interest has dissolved. But so, interestingly, has their internal glue: the ability of institution leaders to control what happens within these franchises.
Take Bob Diamond, late head of Barclays Bank. It's unlikely that he told the full truth of what he knows to the House of Commons committee on Wednesday. But what he did say, and what we already know about this reptile-park of banking swindles, shows us one way that the glue dissolves. To put it crudely, these people don't understand what they are doing. All these masters and mistresses of the universe muttering "deeply inappropriate", from corrupt MPs through Rebekah Brooks to Bob Diamond, had to be either criminal or incompetent, and they all preferred to be classed as incompetent. And they were right.
Over the millennia, the human race has invented an ever-growing arsenal of gear to deal with its environment. Our species staggers towards the (luckily impossible) goal of abolishing the unpredictable. But we have now reached a stage in which the technology has overtaken its users. It was OK with flint axes; when they blunted, you chipped a new edge. It was OK with metal type in the printing industry and even with the spidery, flailing linotype machine; when it went wrong, you could put it right. For generations – the ones in which Father's legs stuck out from under the car each Saturday – many people knew not only how to drive but what went on under the bonnet.
No longer. That sort of control – knowing how to use it but also how to fix it – began to grow rare in the technical onrush of the later 20th century. It makes me smile now to remember my own disgust, as a young Marine, when I was issued with an American M-2 carbine and told that you couldn't strip it down. If it jammed, you threw it away and got another one. No careful cleaning and oiling of parts; no skilled armourer to recondition the barrel. Just fire it and junk it.
So it went on. I know how to coax my old car when it stalls, but its computerised failings defy me. Bob Diamond and Andy Coulson and – just for another example – Jeremy Hunt, Secretary of State for Culture, Media, Sport and BSkyB, were in charge of large workforces using equipment designed to gush forth gigabytes of data, gossip and half-baked comment every few seconds. Were they in effective control of their bankers, traders, civil servants, advisers and journalists? They were not. For much of the time, they had no real idea of what might be happening on their watch. Sometimes this was because they preferred not to know, or were plain lazy. Sometimes – but not as often as they want us to think – it was because their lieutenants lied to them or otherwise "let them down". But mostly, and centrally, it was because they didn't understand the systems they were running. They weren't computer geeks; they were busy executives or ministers or editors. They had learned to make the machine work – issuing orders which usually emerged as actions – but they had no conception of what went on under the bonnet.
This situation has consequences. One is a universal bluff culture. Executives must pretend to have an imperial grasp of the situation, to be on top of things and have an overview. In reality, they often have a hopelessly fragmentary glimpse of what's going on; they know little more than what underlings tell them. Meetings between these great figures are comic to witness, as overpaid CEOs boom dogmatically at rivals they know to be as clueless as they are.
A second outcome, prevalent in vast organisations which don't really know where they are going, is the output of solutions which then go searching for a problem to solve. Credit default swaps might be an example. Dreamed up as a brilliant but almost pointless financial gadget, they mooched about until they found that they could solve the ravenous greed of young traders and make them millionaires. It led to disaster, which often follows the application of off-the-peg solutions. I once met an ancient, vagrant English engineer in the deserts of northern Kenya, who said to me: "All the bloody problems of the world arise from this: people start putting things right before they understand what's gone wrong." Bankers and politicians, take note.
So one of the reasons that institutional Britain is disintegrating is opacity – the people who are supposed to run it no longer know what they are doing. Complexity has outstripped hierarchy. Another reason, though it sounds old-fashioned, is that the leaders no longer know how to lead and, just as important, the supervisors hesitate to supervise. Any man or woman who takes responsibility for employees requires an elementary sense of original sin. If you leave open bottles of whisky around the canteen, somebody will drink them. If you leave a pack of boisterous young men alone with a sky-high mountain of bank-notes, as Bob Diamond did with his management of Barclays investment wing, sooner or later they will steal.
Nothing surprising about that. Why is it so hard to admit that men (only recently women) have always joined merchant banks in the City of London in order to get filthy rich? Pods of autonomous operators are left to get on with their own thing, on the dubious assumption that Adam Smith's "hidden hand" will ensure that their private gain will serve the public's prosperity. When scandal explodes, the bosses don't speak of "right" or "wrong", only of "unacceptable" and "inappropriate" – as if somebody had lit a cigarette in a maternity ward, or worn hot-pants to a funeral.
But all this is happening for a deeper reason. The British state is in trouble. The reappearance of these "mediaeval" franchises follows the hollowing-out of state responsibility over the past 30 years, which also meant dismantling the already feeble regulation of private and professional power blocs. And that reduction has led to the rapid falling-away of public interest in party politics, in itself no mystery – after all, the less the state affects the lives of ordinary people, the less concerned the voters will be about who controls it. But that indifference also means that public outrage over the excesses of bankers, MPs or newspaper tycoons shrinks to a much smaller voice.
The English and the Scots alike had come to think of state power as a moral force – often stupid and clumsy, but redemptive. Until about 1980, the "social democratic consensus", the combination of regulated capitalism and welfare state spending, gave Western Europe some 30 years of economic prosperity and growing equality. But today the Conservative faction dominating this Coalition is using the deficit "crisis" as cover and excuse for a final demolition of that welfare state. If they succeed, what monument of the common interest are people supposed to respect? For those who take decisions affecting the lives of other people – their savings, their children's schools, their privacy – where is the scale against which to measure them?
And this decay of the state is about geography as well as politics. Put it this way: Britannia's bum looks increasingly big in neo-liberalism. Wealth, population, blue-chip education, cultural funding, scientific research, public investment in transport and infrastructure and private investment in finance and services continue to fatten the southeast corner of the supposedly United Kingdom. It is an ancient imbalance; 80 years ago, rich London contrasted with the "distressed areas" and mass unemployment of the north. Now it is largely an English problem, affecting devolved Scotland less. But the unfairness has become more blatant since the near extinction of manufacturing and mining north of the Trent.
Here we come to the deep strategy which has been undermining Britain's coherence since 1980. Banking and financial capitalism, not industry, are supposed to be Britain's future. Those who own those services and work in the City live in the southeast of England. Politically, they are now dominant. British investment and finance must go to overseas markets, rather than Britain itself.
A Scot might conclude that the most revolutionary programme today would be to revive industry, defy the City and put Britannia on a diet for her overweight backside. But again, she or he might think that the British state has fractured and franchised itself beyond recovery, and is headed for chaotic isolation. The note in the bottle floating in the North Sea reads: "I'm a Scot. Get me out of here!"
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