Sol Campbell in action for England during Euro 2008. Photograph: Getty Images.
Show Hide image

Sol Campbell is wrong - for most England fans, race is irrelevant

When it comes to choosing an England captain, fans are more likely to have a biased opinion based on club colours than skin colour.

The former England footballer Sol Campbell believes he was prevented from captaining his country more often because of the colour of his skin. He told the Sunday Times: “I don’t fit the FA’s image of an England captain. I’d done enough to be captain. I’ve asked myself many times why I wasn’t. I keep coming up with the same answer. It was the colour of my skin”. Campbell argues that both the FA and most England fans prefer the captain of the national side to be white. “I don’t think it will change because they don’t want it to, and probably the majority of fans don’t want it, either. It’s all right to have black captains and mixed-race in the under-18s and under-21s but not for the full side. There is a ceiling and although no one has ever said it, I believe it’s made of glass.”

Campbell’s views reflect the amount of prejudice and abuse that he has faced in his career. Though he is straight, the player faced significant amounts of homophobic abuse, which the game was much slower to crack down on than racist monkey chants. The arguments about who should have been England captain when in the late 1990s are inevitably subjective. But there is little evidence of an FA “glass ceiling”. After all, Campbell was himself selected to be captain of the full side, and at a younger age than any England captain, except Bobby Moore. Paul Ince and Rio Ferdinand were also England captains in this era, with little public discussion or controversy of this. The Sunday Times’s front-page story reported that he captained England on only that occasion, though Campbell captained England three times in his 70 appearances, as was corrected in the final editions. By chance, Sir Bobby Charlton was also captain three times in his 106 games, which shows that any England team will usually contain many potential leaders. Campbell’s experience probably had more to do with the choices of England managers than with an FA policy. He was asked to captain the side twice, when very young, by Glenn Hoddle in 1998. But Hoddle was forced to resign early the next year and his successors chose other players.

Whatever the merits of the choices that England managers, or the FA made, Campbell is on weakest ground in suggesting that most England fans would prefer a white captain to a black captain. This seems extremely unlikely. The vast majority of England fans see nothing remarkable in our multi-ethnic football team or its leadership. The question of whether you could be black and equally English was a publicly contested issue in the late 1970s and into the 1980s. When Viv Anderson first put on the England shirt as a full international in 1978, and Paul Ince first captained the team in 1993, it was worth marking the breaking of a glass ceiling. The racists were probably in a minority even in the 1980s. The problem was that a vocal National Front-associated group of extremists dominated the England travelling support, to the extent that they put everybody else off. When John Barnes scored that crazy, mazy goal in Brazil’s Maracanã stadium in 1984 to put England two-nil up, the NF contingent in the stadium chanted one-nil. But the nation watching at home knew the real score – and celebrated the goal.

By the time that Campbell or Ferdinand were leading England out, the idea of a non-white captain went unremarked – because it had become enough of a norm for us to barely notice. We don’t discriminate over the race of our sporting heroes. At the last Olympics, three-quarters of people rejected the notion that we should cheer more loudly for British-born Team GB athletes to those who had come to this country to wear our flag. At least that proportion would find the idea of a race bar on picking the England captain bizarre. This goes for Englishness outside the stadium too. Sometimes liberals wonder and worry about whether English remains a racially exclusive category, even though British identity is more inclusive. But this is an idea that most people in England reject. There is still a sizeable minority – of one in five - who say it is very (12 per cent) or fairly (10 per cent) important to be white to be English. But most say it does not matter at all, as YouGov polling for British Future has shown. France did have a rather tortuous and embarrassing debate about whether the Republic of equality and fraternity should have a policy to make sure there weren’t too many black players in the national team. Such a conversation would struggle to get off the ground in England today and would be laughed out of court in the post-match phone-ins. Most England fans will want the team, and the captain, chosen on merit. Football being a matter of opinion, of course fans will argue about who the best captain should be. When it comes to choosing an England captain, most of us are now rather more likely to have a biased opinion based on club colours – who plays for the teams we support, or that we love to loathe – than skin colour.

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.

Getty
Show Hide image

We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?