The (im)morality of markets

How "Hedge Fund Hugh" manages to defend the indefensible.

Hugh Hendry, an engagingly straightforward hedge-fund manager, made another appearance on Newsnight last night -- he's been on before, holding his own rather well against Joseph Stiglitz (or "Joe" Stiglitz, as I noted Ken Clarke called him during the recent Any Questions he appeared on with Mehdi).

Hendry was being attacked by Poul Rasmussen, president of the Party of European Socialists and the driving force behind proposals to limit the activities of hedge funds. Rasmussen said that the way Hendry and his ilk had affected the price of government debts -- Greece's in particular -- was not "democratically acceptable", that they were hurting innocent people by their actions and making structural problems worse.

One's natural sympathy was on the side of Rasmussen. It is very hard to see any merit in the kind of international speculation that made George Soros, for instance, so rich -- which is why I have always been bemused that a man whose wealth and prominence derives from the misfortune of others should be treated with such respect.

But Hendry did a very good job of making himself out as the one who was behaving morally. "If Greece reforms its behaviour, then speculation against it will be profitless," he said, quite truthfully. "I'm trying to save us putting more money into this black hole which is Greece's economy."

Newsnight's reporter Justin Rowlatt had asked him earlier in the programme, with some incredulity: "So are you saying you're providing us with a social service?"

Hendry could see this one coming, but replied: "Maybe I'm naive, maybe I'm foolish, but I believe that I'm the guard dog of the capitalist system." Greece had been caught "cheating", he said -- a statement with which I don't think anyone can disagree -- and was now paying the price.

My point is this: to me Hendry, was the far more convincing guest, because his argument was totally consistent. The "morality" he believes to be contained within the market is the one which is now doling out punishment to Greece, and deservedly so, he would say.

I suspect that Rasmussen does not believe that markets are in any way "moral" at all. Indeed, if he thinks that they are by their very nature cruel and immoral, I would agree with him. He probably regards market economies as necessary, but not virtuous.

Why then, however, would he expect people who really do believe in the market to abide by his moral values? If you sup with the devil . . .

You can find the whole report and the exchange that followed on BBC iPlayer, about 20 minutes in. It's well worth a look. Even if you don't agree with him, I think you'd have to admit that the aforementioned devil has a remarkably good advocate in Hendry.

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Sholto Byrnes is a Contributing Editor to the New Statesman
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The polls are bad, but Jeremy Corbyn’s office has a secret weapon

How a shake-up of the leadership team has steadied nerves at the top of Labour. 

If polling had existed back in 1906, Jeremy Corbyn quipped at one recent strategy meeting, the Labour Party would never have got started.

As far as Labour’s direction is concerned, it is that meeting at four o’clock every Monday afternoon that matters. The people who attend it regularly are the Labour leader, his aides, the shadow home secretary, Diane Abbott, and the shadow chancellor, John McDonnell, as well as the party’s election co-ordinator, and their respective aides.

In recent weeks, the meetings have been stormy affairs, and not only because the numbers from the party’s own pollsters, BMG Research, mirror the uniformly bleak picture from the public polls. There is also concern over Karie Murphy, Corbyn’s office manager. Murphy is highly rated by Corbyn for having brought increased intensity and efficiency to the leader’s office. Corbyn often struggles to deliver bad news in person and appreciates that Murphy will intervene on his behalf.

Her intensity is not uniformly welcomed. “She could start a fight with her own reflection,” in the wry words of one friend. An argument with Jon Trickett – the Hemsworth MP whose unusual career trajectory took him from being a parliamentary aide to Peter Mandelson to the inner sanctum of Ed Miliband’s leadership and finally to the role of election co-ordinator for Corbyn – led to Trickett going on a two-week strike, recusing himself from vital meetings and avoiding any contact with Murphy.

That row eventually led to Trickett being stripped of his role and banished from the Monday meeting. Murphy had a similar turf war with the campaigns director, Simon Fletcher, which culminated in Fletcher resigning on 17 February. In a letter to staffers, he called on the party to “keep the promise” of Corbyn’s first leadership bid, a period when Fletcher was central and Murphy had yet to start working for the Labour leader.

All of which, in better political weather, would simply be part of the back-and-forth of office politics. However, set against the backdrop of unease about by-elections in Stoke-on-Trent Central and Copeland, and a series of unhelpful leaks, it adds to a sense of vulnerability around the leadership. One loyalist shadow cabinet minister calls it “the most dangerous time” for Corbyn since he was first elected leader.

Why the danger? Contrary to popular myth, the backbone of Jeremy Corbyn’s successive landslide victories was not a hard-pressed twentysomething, struggling to find a fixed job or to get a foot on the housing ladder. The shock troops of Corbynism, at least as far as the internal battle in the Labour Party went, were baby boomers. Many of them were either working in, or on early retirement from, a charity or the public sector, deeply concerned about the rightward drift of British politics and worried about the next generation.

Corbyn’s decision to whip Labour MPs in support of triggering Article 50 – the process whereby Britain will begin its exit from the European Union – was, in their eyes, a double heresy. The vote signalled acceptance that the forces of the Eurosceptic right had won on 23 June, and it conceded that visa-free travel, membership of the single market and freedom of movement are over.

None of this is automatically great news for Corbyn’s internal critics – not least because the vote on Article 50 is rare in being an issue that unites Corbyn with most Labour MPs. Yet it adds to the sense that his leadership has passed its best-before date.

Adding to the general malaise is a series of unhelpful leaks. There was a story in the Sunday Times on 12 February claiming that the leadership was road-testing possible replacements for Corbyn, and on 20 February the Mirror claimed that the Labour leadership had commissioned a poll to find out whether or not the leader should quit his post. These stories are hotly denied by the leader’s office. Some in Corbyn’s inner circle believe they are the work of Trickett, embittered at his demotion.

It is true that Corbyn is not enjoying the job as much as he once did. However, if the conversation shifts from the minutiae of Brexit to his natural terrain of the NHS and the continuing consequences of government cuts on education and the prisons service, he could quickly find himself relishing the role once more.

Corbyn retains two powerful cards. His newly energised office, under Karie Murphy, is one. Although her brisk approach has generated some public rows, the feeling in the leader’s office is that a chief of staff was needed, and Murphy has assumed that role. The media team has also grown sharper with the addition of David Prescott (son of John), Matt Zarb-Cousin and the former Momentum spokesman James Schneider.

Corbyn’s second asset is more unexpected. His rivals inside the party now fear rather than relish an immediate end to his leadership. A former shadow cabinet member splits his supporters into two groups: “idealists and ideologues – the first we can inspire and win over, the second have to be got rid of”. In their view, the idealists have not yet moved away from Corbyn enough to guarantee victory; the ideologues, for their part, will slink off as Corbyn puts the demands of his office above their interests, as he did over Article 50.

Although self-defeating panic has never been a rare commodity in the Labour Party, the settled view of Labour MPs is that their leader must be given time and space rather than hustled out of the door. There is an awareness, too, that MPs who are united in opposition to Corbyn are divided over many other issues.

So, while the inner circle’s Monday meetings might be fraught, and Labour’s current polling would have given Keir Hardie pause, Jeremy Corbyn is safe. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 24 February 2017 issue of the New Statesman, The world after Brexit