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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers


    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation


    Total pledged by the US alone towards solving the crisis


    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)


    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009


    Number of major global banks which collapsed, were sold or were nationalised during 2008


    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency


    Increase in UK company failures between late 2007 and late 2008


    Drop in level of Chinese exports during January


    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is a journalist and academic. He is currently a visiting fellow at the London School of Economics Asia Research Centre and at the National University of Singapore. Jacques previously edited Marxism Today and co-founded the think-tank Demos in 1993. He writes the World Citizen column for the New Statesman. His new book on the rise of China, When China Rules the World, will be published in June.

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

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Will George Osborne soften the tax credit cuts for low-earners?

Labour MP Frank Field offers the Chancellor a partial escape route. 

The Conservatives are the real "workers' party". That is the message that will be delivered repeatedly at the party's conference in Manchester. To this audacious rebranding, there is no more awkward rejoinder than the coming cuts to tax credits. The new "living wage", which will reach £9 by 2020, will not compensate for the losses that low and middle-income families will endure. As the IFS has calculated, three million households will be £1,000 a year worse off. When MPs recently voted in favour of the cuts, there was a small but significant Tory rebellion (former leadership candidate David Davis and Stephen McPartland voted against). It is the loss of income that low-paid workers (the "strivers" in Conservative parlance) will suffer that they object to. 

Now, Frank Field, the chair of the work and pensions select committee, and one of the Labour MPs most respected by the Tories, has offered George Osborne a partial escape route. In a letter to the Chancellor, the former social security minister argues that he should protect the poorest by raising the withdrawal rate for those earning above the new minimum wage. At present, the planned increase in the taper rate from 41 per cent to 48 per cent and the reduction in the earnings threshold from £6,420 to £3,850 will result in 3.2 million families losing an average of £1,350 a year. 

Field writes: "As you will know I welcome wholeheartedly the introduction of the National Living Wage. But its potentially revolutionary impact will be extinguished next year by these cuts to tax credits. Might I therefore ask please whether you would consider introducing a mitigation policy, at nil cost to the Treasury, to protect the lowest paid while the National Living Wage is phased in?

"There is one cost neutral policy in particular which could protect National Living Wage-earners: a secondary earnings threshold paid for by a steeper withdrawal rate for those earning above this new minimum rate.

"This option would retain the existing £6,420 income threshold but introduce a second gross income of £13,100, the equivalent of working 35 hours a week on the National Living Wage. For gross earnings between £6,420 and £13,100, the taper rate would be kept at 41 per cent. The lowest paid working families, therefore, would experience no reduction in tax credit income compared with the current system. To keep the policy cost neutral, gross earnings above £13,100 would need to be tapered at 65 per cent.

"Might this be something you are willing to consider for the Autumn Statement?"

It might indeed be something Osborne is willing to consider. The Sun reports that Boris Johnson, the Chancellor's chief rival for the Conservative leadership, has been studying the proposal and has warned him of "political disaster" if the lowest-paid are not protected. The Mayor of London, frustrated by Osborne's deft appropriation of the "living wage" he championed, is looking for new means of differentation. Past form suggests that Osborne may well give himself some protective cover when he delivers his joint Spending Review and Autumn Statement on 25 November. 

George Eaton is political editor of the New Statesman.

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The men saving Syria’s treasures from Isis

A remarkable group of archaeologists are battling to save the country’s ancient artifacts.

On 19 May this year, the ancient city of Palmyra was about to fall. Jihadist fighters were advancing in pick-up trucks mounted with heavy machine-guns. They were from the group that calls itself Islamic State, also known as Da’esh and Isis.

Khalil Hariri, an archaeology expert who worked at the Syrian city’s museum, could hear the sounds of the fighting getting closer. Grunting and sweating, he and four friends kept on manhandling wooden crates out of the door of the museum and down to three trucks that were parked outside.

Bullets hit the outside of the museum, sounding like enraged insects as they hissed over their heads. Mortars exploded nearby, sending hot pieces of shrapnel fizzing through the air, blowing shards of wood off the trees and turning them into daggers. The men bundled the last crate into the nearest truck. As they jumped in after it, with the vehicles careering out of Museum Square, a bullet hit Khalil. Shrapnel wounded two of the others.

They drove fast down the road to Homs, away from Da’esh, as they call Isis, not even stopping to treat the wounded until they were well clear of Palmyra.

Against all odds and under heavy fire, five middle-aged men had managed to thwart the new barbarians of Islamic State. In scenes reminiscent of the George Clooney film The Monuments Men, about an army unit that tries to save art treasures hidden by the Nazis, Hariri and his friends had rescued Palmyra Museum’s priceless collection of artefacts, the legacy of one of the world’s earliest civilisations. Ten minutes after the men left, Isis fighters entered the museum. The display cases were empty. Nothing was left inside, except big statues that were too heavy to lift without a crane.

Who were the men who saved the treasures of Palmyra? The first, Khalil Hariri, was the museum’s director. When he left in May, his wife stayed behind in the city with his young son. So rapid was the Isis advance that he had to leave them behind and it took nearly a month to get them to safety. When they were reunited, she told him that the jihadists stormed out of the museum and into their house 30 metres away, looking for him and demanding to know what he had done with the collection.

When I met him this month in Damascus, Khalil inhaled his cigarette smoke to the base of his lungs. “I’m going to get a harsh sentence, if they get hold of me,” he said. He knows this because after the jihadists escaped with the few remaining contents of the museum, Isis men took away his brother and two cousins and killed them. It was, he says, a reprisal.

He was helped in his daring plan by his brothers-in-law Mohammed, Walid and Tarik al-Asaad. Their father was Khaled al-Asaad, the 83-year-old keeper of Palmyra’s antiquities, who was publicly murdered by the jihadists last month.

Khaled al-Asaad was born in the city and served as head of the museum and director of antiquities for 40 years, until 2003. Even in retirement, he was still the man whose opinion and judgement about Palmyra and its treasures mattered most. He so admired Zenobia, the 3rd-century warrior queen of Palmyra who rebelled against the Roman empire, that he named his daughter after her. She married Khalil Hariri.

Mohammed al-Asaad was not scared when the bullets began flying as they were struggling with crates of antiquities. “We believed that what we were doing was important,” he told me. The whole family had been brought up by their father to venerate Palmyra, its buildings and its treasures.

In Iraq over the past year, Islamic State has destroyed ancient sites and reduced statues in museums to rubble. Mohammed’s father knew what might be coming when they reached Palmyra.

So, in May, Khaled al-Asaad refused to leave with his sons. They never saw him again. He was beheaded by Isis fighters in a public square; his body was left hanging on a traffic light.

“My father was 83 years old,” Mohammed told me, “and a true believer in the importance of Palmyra. He was deeply attached to it and refused to flee. He believed that it should be protected against any harm from militants or anyone else.”

I sat with Khalil and Mohammed in the garden of the Damascus museum and talked about how and why Isis had killed Khaled. Mohammed had a picture of his father in better times, downloaded from the internet, on his phone. All the family’s physical mementoes were left behind in Palmyra.

Mohammed was Khaled’s right-hand man at the museum for 25 years; he is proud of his father’s bravery, the way he brought them up, and the love he instilled in them all for Palmyra. “The main reason Da’esh executed my father was he refused to swear allegiance to them. They labelled him an apostate – a non-believer. There were stories that they killed him because he knew the secrets of Palmyra and locations of a hidden store of gold. But that’s false . . . they killed him because he was honest and loved Palmyra and was devoted to it and refused to leave it till his last breath.”

Mohammed added: “We were punished by getting chased out of Palmyra. All our possessions were confiscated. All that’s left for us in Palmyra are the ruins.”



The nihilists of Isis revile all the relics of religious life in the Middle East before the Prophet Muhammad, which they regard as a time of heresy. Palmyra was always a prime target for them because it has Syria’s greatest single concentration of buildings and artefacts from that era. The Prophet died in 632AD; by then Palmyra was already an ancient city, with a remarkable body of architecture. It has survived earthquakes and wars, but is now in greater danger than ever.

It was not an accident that Syria’s monuments men were able to empty Palmyra’s museum. It was part of a plan hatched by Syria’s director of antiquities, an engaging, francophone, energetic man in his early fifties called Professor Maamoun Abdulkarim. He had watched with alarm what was happening in Iraq, and realised as Isis advanced that it was a matter of time before it tried to take its drills and sledgehammers to some of Syria’s heritage, too. Until March the plan had been to bring some objects to Damascus and to hide others locally. But after the fall of a strategic provincial capital, Idlib, to Islamist extremists in March, he gave orders to crate up as much as possible and bring it to “safe places” (he won’t say where they are) in and around Damascus.

When wars are going on, while the killing seems endless, and the fear and the desire to run away and not to stop is overwhelming, it can be hard to think about a time when it will all be over. Looking back and thinking about all the wars that went before – in Syria’s case, over roughly 5,000 years or more of history – and knowing
that all wars end eventually is no comfort for the refugees struggling to escape the battle zone, or to get to Europe. But now history is on the front line of the war in Syria. Perhaps history shouldn’t matter any more. I asked Professor Abdulkarim whether it was right to be concerned about ancient relics when so many human beings were being slaughtered.

“I think it’s two different things; we cannot compare them,” he said. “I understand lives are very important because we are people, too, we are living in this crisis, we know we can be killed in this crisis, too. We understand this question. But our job as archaeologists is saving this heritage. And finally
what we are doing to save cultural heritage in Syria. It’s the memory of the Syrian people, it’s the identity of these people. I’m sure the crisis will finish. Life will be better in the future. But all the damage to the cultural heritage will stay for all the generations. That’s why we are thinking about how we can reduce the damage, how we can save all the collections in all the museums in Syria.”

The National Museum of Damascus is opposite the hotel where the UN is based. Journalists stay there as well. Since the war started, I’ve looked down on the museum many times from a balcony, as the thunder of artillery has broken over the city, and flashes and explosions have come from the Yarmouk Palestinian refugee camp and all the other urban battlefields. All that time, the museum has been there, battened down, closed for the duration of the war.

Abdulkarim ordered that the most precious tombs and sculptures in the garden should be encased in concrete to protect them. On my visit this month, we walked past the strange concrete cubes to see how he has improved security. We waited while a four-tonne steel door at the main entrance rumbled slowly upwards. The old steel grille lay on the floor, dusty and fragile-looking. Armoured glass has been put into the windows. The display cases here have been emptied, too, and their contents put into safe storage.

In the basement is a stunningly preserved tomb from Palmyra which was moved to the museum in the 1930s. It shows the man who commissioned it at a feast, surrounded by his family and possessions. He reclines like a Roman, propping himself up on his elbow as he eats, but the carving is in the distinct style of Palmyra. The generations that followed his body into the tomb for two centuries are immortalised in lines of sculpted heads.



Isis smashes up statues and ancient sites on video to scare its enemies and excite its supporters. But the archaeologists say it also makes a lot of money selling off attractive, portable pieces to dealers. To pre-empt them, Abdulkarim’s team has rescued 16,000 cuneiform tablets and 15,000 coins, ceramics and other objects from Deir az-Zour, a city where Isis has been fighting the Syrian army and local tribes. The tablets are relics of a writing system developed by the Sumerians in Mesopotamia around 3,500BC. Their makers used reeds to mark clay tablets, creating one of the earliest records of politics, war and trade. Many of the objects are small, easy to hide and to smuggle, and worth a lot of money to collectors.

Syria has monuments women, too. A 25-year-old archaeologist, who does not wish to named, so that she can carry on with her work, led the team that rescued 24,000 ancient objects from Aleppo. The road from the regime-held side of Aleppo to Damascus is dangerous, and in places lonely and almost empty. The Syrian army secured it only last year, and its hold on parts of the road is tenuous. The convoys moved quickly and discreetly in unmarked vehicles because of the risk that they might be robbed. They were high-value targets.

Another young female archaeologist, Mayassa Deeb, is in charge of classifying and repacking all the objects that have been saved so they can be put safely into storage. Each one is photographed, its details uploaded on to a database, then it is wrapped in layers of cotton wool and tissue paper. They are packed into sandwich boxes – the staff have had to improvise – and slotted into packing cases lined with protective foam.

Mayassa is an expert on chariots. She showed me her favourite object: a 5,000-year-old clay model of a chariot that was rescued from Deir az-Zour. If Isis had found it, she said, they would have either smashed it or sold it.

The archaeologists work in an open courtyard in the museum, and sometimes they can hear shells, mostly fired out from Syrian army positions, sometimes coming back in from the rebel-held suburbs. May­assa loves coming to work, because it helps her forget what is happening outside. “It’s hard because every minute we have a noise and we have an explosion, and some die, it’s hard . . . but we work, and sometimes we don’t remember we have a war. We feel safe here, we don’t think about the war. Some people lose their houses, somebody loses his family, somebody goes abroad. Everybody has problems.”

She looked at the clay chariot, about the size of a couple of matchboxes, decorated with tiny marks that were made five millennia ago. “It’s important for everybody because this isn’t just about the history of Syria – this chariot speaks to us about the history of all the human world. For this reason we must keep it.”

I expected the museum to be full of despair because of the attacks on Palmyra by Isis and the desolation elsewhere in the country. Some of the worst destruction is in Aleppo’s Old City. It was a gem, a tight mass of alleys and khans, as full of entrepreneurs as it must have been a thousand and more years ago. Now it is in ruins.

But Professor Abdulkarim and his team are remarkably positive, horrified by the destruction of the most significant relic in Palmyra, the Baalshamin temple, but delighted about what has been rescued. They are even hopeful, if the stones are not too badly damaged, that they can put the buildings back together after the war. Now they want help from abroad. Foreign governments, the professor said, need to crack down much harder to stop the illegal trade in stolen antiquities.

He also talked about rebuilding the great minaret of the Umayyad Mosque in the Old City of Aleppo, which was flattened earlier in the war. “We’ve told them not to touch the stones,” he told me enthusiastically. “If they’re all there, we can fix it.”

Abdulkarim has 2,500 people working to save Syria’s past, on both sides of the lines. Fourteen of them have been killed so far. “We saved 99 per cent of the collection in the [country’s] museums. It’s good. It’s not just for the good of the government. It’s for the opposition, for the humanity, for all Syria. It is our common identity, our common heritage.”

The National Museum and the remarkable people who work there have created an unexpected oasis, transcending politics and trying to save a vital part of their country for better times. In a country full of despair, it was the most hopeful place I have been in Syria since the war began.

Jeremy Bowen is the BBC’s Middle East editor and the author of “The Arab Uprisings” (Simon & Schuster)

This article first appeared in the 17 September 2015 issue of the New Statesman, Corbyn's Civil War