Utopia means nowhere

The film of The Beach threatens to ruin Thailand forever.

I saw the best minds of my generation destroyed by boredom, unemployed, hysterical, broke, dragging themselves through the naked streets of post-Thatcher Britain looking for a cheap flight to Thailand and an angry fix of adventure . . .

In the early 1990s, Thailand was the place to go for poor graduates hit by the recession. Unable to get a job, fed up with the rat race, my generation packed its bags and left England's 40-watt-bulb sunshine for Thailand.

We were farangs (foreigners of European descent), Siam's new invaders who came to smog-choked Bangkok looking for a route to sun, sand and Shangri-La. The Jack Kerouac of Generation X, Alex Garland, became our Thainik chronicler, the man who knew why we rejected the ordered, boring life for travel and the truth of instantaneous experience.

Garland's novel, The Beach, tapped into the Gameboy fantasies of kids too cynical for On The Road and too young to remember Lost Horizon. Garland's formula worked. The Beach sold five million copies, was translated into eight languages and has now been adapted for the big screen by the Trainspotting team, with a $50 million budget and Leonardo Di Caprio in the lead.

The film has met with a mixed reception from the Thais. The 90-day shoot, which had the set designer Andrew McAlpine reconstructing the novel's fictional community on Ko Phi Phi Leh, a protected, unspoilt National Park, had environmental activists up in arms. Royal Forestry laws, they claimed, were broken; and they picketed the crew on Ko Phi Phi Leh and the US Embassy in Bangkok with placards depicting Leonardo as a blood- sucking vampire.

In the end, the prospect of profit had the locals changing their tune: the film, after all, is bound to increase tourism in the area. And tourism is vital to Thailand's economy. As late as 1997, the IMF had to bail the country out of a crisis with a $17.2 billion loan. Michael Camdessus, the retiring IMF chief, now says he is delighted to see the country's economic recovery - a recovery to which the one million-plus backpackers (most of them British) contributed significantly.

Thailand attracts tourists - not just young scruffy backpackers, but ageing hippies and professionals as well - because it is cheap. At the peak of the 1997-8 high season, the baht was valued at more than 50 to the US dollar, and even five-star hotel rooms in the most popular resorts, like Phuket, cost only 3,000 baht a night.

That is why I went. I arrived in Bangkok to follow the trail of Garland's fictional hero from the boarding houses of the capital to the small islands south of Ko Samui, where he finds Utopia.

With a population of 36,000, Ko Samui is Thailand's third-largest island. Once an exclusive spot for the alternative traveller, it has become the favoured destination of tourists since the late 1980s. Word was out and every farang came to Thailand with the hedonist's formula: strong £ = cheap sex + cheap drugs = full- moon party on the beach.

Take the night train out of Bangkok to Surat Thani, bus to Don Sak and then ferry through high waves to a fog-covered Ko Samui. The island is gridlocked with tie-dyed tourists looking for hidden lagoons, white sand and cheap beds. Dodging Thai ladyboys, drug dealers and wacky Californian surfers, I managed to charter a small fishing boat to explore the small islands off Samui. No sign of a fairy-tale community on Ko Mat Lang or Ko Ang Thong.

My guide, a local fisherman who dabbles in the coconut business, was keen to tell me about the effect of tourism on the islands. "Everyone comes to Thailand looking for a beach," he says. "One by one the islands have been destroyed by foreigners looking for paradise."

After two days scouting for paradise on rubbish strewn beaches, I gave up and took the ferry to Ko Pha Ngan for the full-moon party on Hat Rin beach. Every month, the number of punters doubles for the event, swarming over the beach on a queasy combination of magic-mushroom omelette sluiced down with Thai whisky. High, loud and smelly, the half-naked Brits covered in luminous body-paint, are a parody to other farangs.

"The English people are sad," a German told me. "All they ever do is get drunk and take pills . . . it's really boring."

The full-moon party is a headache for the Thai authorities; back on mainland Surat Thani, a dozen beds in the psychiatric ward are kept aside for the party's druggy casualties.

The film of The Beach will almost certainly make things worse. Following Di Caprio, even bigger hordes of farangs will trespass into National Parks, looking for a paradise and creating chaos. One consolation is that his movie is doing lousy business - it only took £2.3 million in its first week.

The thing to remember is that "utopia" means "nowhere".

This article first appeared in the 21 February 2000 issue of the New Statesman, Just wait for the gold rush to end

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.



This article first appeared in the 21 February 2000 issue of the New Statesman, Just wait for the gold rush to end