Sony's Walkman first freed Londoners to travel in a private sound world. Photograph: Contrasto/Eyevine
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Tunnel visions: Krautrock on the Underground

Paul Morley recalls 1979, and travelling on the London Underground with his first ever Walkman, listening to the other-worldly sound of Can.

In 1979, my girlfriend, Karen, brought me a present from Japan, where she had been working. It was a Sony Walkman, able to play, but not record on, cassettes, in stereo, with relatively decent sound quality. It was a little smaller than a paperback book, so therefore not much bigger than a cassette, which seemed some sort of miracle – that the workings required to power the machine and produce the sound could be incorporated into such a compact casing.

Perhaps the most significant thing, along with the removal of an internal loudspeaker, was the 50-gram, or 1.7-ounce, weight of the headphones, which were in scale with the player itself, replacing the usual eighttimes ‑as‑heavy, bulbous, ear-covering headphones. You could now take music with you wherever you went, and somehow, at the time, even though there were machines that could have done this job, and there had been tiny transistor radios for years, this seemed incredibly exciting. Not least because you couldn’t take a radio on the Tube, if you wanted to, because there would be no signal.

Not only did I consider myself the first person to own the fabulously cool new Walkman, but I also imagined that I was the first person to sit on the Tube listening to music of my own choosing. I can’t remember what the very first cassette was that I played on the Bakerloo Line, but thinking about where I was and where the music I mostly listened to was in the late 1970s, I can take a very good guess. It could have been something released in 1979 that was already not only my favourite album of the year but of all time, because this was – if you were approaching music from the point of view of someone my age, with my interests, my levels of anxiety and ardour and with my job on the New Musical Express – a year of considerable transition and purfication. Elsewhere, and perhaps this new music abstractly, nervously diagnosed this, the once-promising countercultural energy of the 1960s had dissipated, and a conservative countercultural revolution was looming, leading to the emergence, along the tracks, around the corner, through the next tunnel, of the controlling, fanatically moralistic New Right of Margaret Thatcher and Ronald Reagan.

This keyed-up, highly charged pre-digital new music also anticipated a world that was about to be cut into gleaming pieces by technology, television, ideology, assisted by its fancy pleasure-seeking slave, the music video, which, what with one thing and another through roaring tunnels that stretched back to the invention of the telephone and forward to the introduction of the Sony Walkman, eventually led to the all-change free-for-all of Facebook and Twitter.

In 1979 – before this post-internet vortex of pressure and pleasure – certain currents and principles had made the disruptive, avant-garde end of rock music particularly engaging. There was still an almost chaste belief in progress, a natural craving for a violent renewal of meanings, and a treatment of influences that was midway between the reverential and the murderous. It was a culmination, rearrangement, refinement of experimental ideas, sounds and principles instigated by punk.

This music was labelled, possibly first of all by me, in the NME (perhaps thought up while daydreaming on the Bakerloo Line stuck outside Oxford Circus), “post-punk”. This name, another slice of convenient collective identification, introduced to diagnose, even conceive, an apparently important cultural movement, slid into general use quite nicely, but didn’t come close to expressing the concern this music and these musicians, often haunted by dread, had with spatial and rhythmic, temporal and geographical displacement, with plotting the physical universe and the individual’s place in it. In some ways they were producing in advance a soundtrack to the disorientating, paradoxically lonely effect of constant contact with the internet.

This 1979 music, not heard much on Radio 1 outside of the John Peel show, where it starred, music which followed on quite naturally from music the year before and would logically move into the 1980s, losing some of its momentum once compact discs arrived, included: Unknown Pleasures by Joy Division, Entertainment! by Gang of Four, Metal Box by Public Image Limited, The Raincoats by the Raincoats, 154 by Wire, Lodger by David Bowie, Reproduction by the Human League, Drums and Wires by XTC, Cut by the Slits, New Picnic Time by Pere Ubu, A Trip to Marineville by Swell Maps, Dragnet and Live at the Witch Trials by the Fall, Fear of Music by Talking Heads, Half Machine Lip Moves by Chrome, Eskimo by the Residents, The B-52’s by the B-52’s, Y by the Pop Group, 20 Jazz Funk Greats by Throbbing Gristle, This Heat by This Heat, Solid State Survivor by Yellow Magic Orchestra, pragVEC by pragVEC, Join Hands by Siouxsie and the Banshees, Mix-Up by Cabaret Voltaire.

I would not be listening on purpose to Rod Stewart, the Eagles, Styx or Foreigner, because they seemed blasé and instantly antique, working on behalf of a mega-corporate entertainment state, with no statements to make about the future. I kept my distance from the Jam, if only because rumour had it one of them voted Tory, and they dressed as though they all did, as if punk were routine show business, a mere day job. Although I would have been paying constant close attention to Neil Young and Bob Dylan, who released Rust Never Sleeps and Slow Train Coming that year, these don’t seem likely candidates for that first Walkman trip. I would have been instinctively drawn to something that belonged on this pioneering new machine that had the capacity to turn an everyday journey on the Bakerloo into an explicit plunge down the rabbit hole or tumble through the looking glass.

Other music that it could have been, the music from the past I tended to play the most at that time: all albums by the Velvet Underground, the spaced-out, splintered Englishness of pre-Dark Side of the Moon Pink Floyd, the telepathic, serenely abstracted post-rock jazz of Miles Davis’s On the Corner, In a Silent Way, Bitches Brew, most Hendrix, Robert Wyatt, Stooges, Joni Mitchell, John Martyn and even (in a spirit of a nerdy need for otherness, or a need to know something other than what the outside world gave and told me) the new forms, and related protean formlessness, of Tony Conrad and Faust, La Monte Young and Karlheinz Stockhausen – whose sparse, spectral 1956 electronic composition Gesang der Jünglinge, incorporating synthesised and natural voices, sounded like music emerging in the dead of night from Tube tunnels that connected the Bakerloo Line with underground cave cities on Jupiter.

All this music that I could have played for the very first time underground on my Walkman, whether right there from 1979 or from earlier, was sound that would have directly or indirectly influenced or been directly or indirectly influenced by a group formed in Germany in 1968 called Can.

Can were less a rock group than a compact orchestra, a jazz collective, a cartel of dreamers, a loose affiliation of individuals, a battery of technicians, a faction of dissidents, a circle of minds, a square of mystics, a haze of weed, an ambush of gurus, a buccaneer of savants, a warp of collaborators, a cabal of freaks, a body of procedures, a lightness of heads, an education of vagabonds.

“Krautrock” was the convenient collective name given in a slightly jokey, slightly wary and affectionately patronising way to an eclectic collection of radicalised German groups from very different parts of the country that contained musicians who were born in the few years before, during or just after the Second World War. Another collective name for these groups, still frivolous but more descriptive of their mission to create sound never heard before on our planet and invent music that could make you feel you were leaving the earth behind, was “kosmische”. As well as Can, these groups included Kraftwerk, Tangerine Dream, Amon Düül II, Cluster, Popol Vuh, Harmonia, Neu! and Faust, and they were looking for ways to repair their traumatic recent history, remove the crippling infection of fascism, break free of totalitarian artistic repression, negotiate turbulent social and emotional currents, and radically, romantically reinstate the positive, progressive elements of their mortified national psyche.

Also linking them, perhaps, was the spectre, the awareness, the modulated, post-linear cosmos of Stockhausen, a notorious, internationally known techno-shaman from within their corrupted land who emerged from deeper inside the grim Nazi shadow (he was 17 when the war ended) with a clear, spiritualised vision – an act of revenge – of how to break free of the poisoned past and dream up the future and a new sort of other-worldly national sensibility.

From Kraftwerk, Can, Neu! and Faust – speculative, observational artists creating their work in a recording studio with what could be called a post-impressionist, even cubist approach – came a way of manipulating, treating and structuring sound, establishing rhythm, heightening dramatic effect and capturing experience that significantly extended the structural and sonic possibilities of all forms of pop and rock music, from the commercial to the extreme.

These new German musicians were to some extent making a new classical music following on from savage, edited musique concrète and tonally opulent, romantically influenced minimalism, experimenting with tape-recording techniques and multi-track recording that prefigured sampling and remixing, but hearing provocative ideas at the more experimental end of rock and the more electronic end of pop; this led to them placing a repetitive groove resembling a funk groove, a psychedelic rock groove, even a compelling disco groove, inside lengthy abstract compositions that seemed to be pondering the shape of the solar system, the colour of orgasm and the density of experience. Pinning a consoling, pleasing, almost jocular rhythm within epochal, Stockhauseninspired pools and patterns of sound and noise rotating past each other with random, tingling electro-acoustic precision meant that, in 1976, before all that 1979 post-punk commotion which connected a lot of the dots Can helped scatter into the universe, Can had a minor hit. They crept on to Top of the Pops miming to the Dalí disco of “I Want More” as an unholy one-hit wonder, prophets dressed as tramps, treated as curios, spooks out of their skulls possibly needing to be exorcised by nervous non-believers before they caused a change in human behaviour. This was my kind of pop group.

This is an edited extract from Paul Morley’s “Earthbound” (Particular Books, £4.99), part of the new Penguin Lines series, inspired by the 150th anniversary of the London Underground

This article first appeared in the 11 March 2013 issue of the New Statesman, The audacity of popes

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

***

In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt