Is WikiLeaks grinding to a halt?

It's hard to undock Assange from WikiLeaks. And that's a problem.

Who wasn't secretive enough in their mission to make secretive things less secretive? The accusations are flying between Wikileaks and its former partners, and Julian Assange is getting dragged into the whole mess, once again hitting the headlines; but now, the organisation of which he has become the public face seems to be getting more attention for his rows and behaviour rather than the news it's breaking.

I suppose the problem with the Assange/WikiLeaks thing is that Assange isn't WikiLeaks, but at the same time he is. His glowering face looks down at you from the Cablegate and Wikileaks pages, reminding you of who is at the centre of this all. Never knowingly troubled by a tremendously self-effacing nature, WikiLeaks proclaims "HELP WIKILEAKS KEEP GOVERNMENTS OPEN". That's some claim.

The banner is a bit of a nod to Jimmy Wales's ubiquitous appearances on Wikipedia's pages a while ago, where the founder would regularly pop up and plead for a bit of cash to keep things ticking over. Which is fair enough, of course. But does WikiLeaks really help keep governments open? Or is the grand project beginning to go off the rails?

Part of the personalisation of WikiLeaks into Assange comes from the media, and from us, the way we seek to understand culturally complex movements and forces by turning them into the actions of men and women; but the other part - perhaps the greatest part - comes from Assange himself.

That's not to say that the whole project, the whole movement, is a vast self-aggrandising ego trip, because that's almost certainly not the case; but that doesn't mean that things couldn't have been done differently, because they in all likelihood could have been done differently. It's hard to undock Assange from WikiLeaks, and perhaps that's deliberate.

The problem with this highly centralised, highly personalised approach is that when Assange the man comes up against the kind of personal criminal allegations he has faced; or has been alleged to make the kind of statements about "Jewish journalists" he apparently did to Ian Hislop, the Private Eye editor, that cannot be untangled from the WikiLeaks brand.

The latest dump of WikiLeaks revelations and cables appears not to have attracted the same mainstream interest as previous ones. There is one cable in particular, about the alleged execution of children - youngsters handcuffed and then shot in the head by US forces - which seems, at first glance, to be an astonishing and shocking story.

So why aren't the mainstream picking it up and running with it? Are there doubts about the veracity of the information, or is further digging and checking taking place to ensure that it's correct before the larger news outlets will publish? Or is it just that an unverifiable allegation from five years ago about a few dead Iraqi kids isn't a 'good tale'?

It's easy to turn up at this point with a conspiracy theory or two, to suggest that the mainstream have been waved away from exposing such revelations, to imagine that this is the kind of story that doesn't fit in with our news agenda, and therefore won't be considered worthy of national and international exposure.

I don't think that's the case, though, and I am loath to believe conspiracy theories of any kind unless there's a pretty substantial amount of compelling evidence behind them - so what's going on here?

The concern is that the whole WikiLeaks project is grinding to a halt, that the revelations of unredacted private information -- regardless of whose fault it is -- will dissuade further whistleblowers from coming forward, to WikiLeaks or any other organisation.

Will WikiLeaks really help keep governments open? Or will they struggle to keep themselves open?

Patrolling the murkier waters of the mainstream media
Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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