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It matters if you’re black or whit­e

Segregated communities are the norm in the US and they seem to be spreading, aggravating social ineq

The consensus at Ian's Bakery, where the scones seem to take their inspiration from the Rocky Mountains framing us, is that the police should have shot back. Footage of the riots in England played for days on the news - a rare penetration of British news that isn't about the royal family into mainstream American consciousness.

A woman in London whose shop had been ran­sacked was shown pleading for police protection. The response was unanimous: give her a gun. "What the hell they doin'?" asked one man. "Shoot 'em." Admittedly this was the Mid­west, where the baker shoots bears in his spare time and hands out the roasted meat free with the breakfast burritos. Still, these people reflected a healthy dose of American opinion that simply would not have put up with what they were watching. They couldn't believe the shop owners were not allowed to defend them­selves, and shook their heads in amazement when I said the police were banned from shooting, too - not even plastic bullets or water cannon.

Another man, a retired army officer studying post-colonial literature - no honky-tonk cowboy - racked his brains to recall disorder of this sort in the US and came up with the Watts riots of 1965. There has been plenty of rioting in the US since then, but it largely occurs around colleges and in poor inner-city areas, so he had not noticed it. The reason why is evident in the suburbs, where I'm writing this: mile upon mile of tasteful clapboard, a low-density sprawl that the writer Eric Schlosser has described as "the architectural equivalent of fast food".

Over the past 20 years, immense subdivisions of small towns have sprung up all over Colorado: "the houses seem not to have been constructed by hand but manufactured by some gigantic machine, cast in the same mould and somehow dropped here fully made. You can easily get lost in these new subdivisions . . . without ever finding anything of significance to differentiate one block from another - except their numbers. Roads end without warning, and sidewalks run straight into the prairie, blocked by tall, wild grasses that have not yet been turned into lawns."

Here is where the white people live, segregated from black America. More than half of America lives in suburban areas; in Europe, two-thirds of us are urban. In tidy houses in neat suburbs, policed by small private armies of security guards and homeowners' committees, white America insulates itself from black.

House rules

With the new suburbs come rules: rules about the size of your trash can, the number of Christmas lights you may display, the colour of your curtains, the weight of the family dog. Professor Setha Low, a former president of the American Anthropological Association, says these rules entrench middle-class values. "Middle-class families imprint their landscapes with 'niceness', reflecting their own landscape aesthetic of orderliness, consistency and control," she observes in Behind the Gates: Life, Security and the Pursuit of Happiness in Fortress America.
This homogeneity in effect excludes ethnic minorities. "Racist fears about the 'threat' of a visible minority, whether it is blacks, Latinos, 'Orientals', or Koreans, are remarkably similar. This is because many neighbourhoods in the US are racially homogeneous. Thus, the physical space of the neighbourhood and its racial composition become synonymous."

You can gate without putting in gates - property prices, residents' associations and just knowing one another's business act as effective barriers to outsiders. "Quiet laws" and indirect economic strategies limiting the minimum lot or house size, cul-de-sacs that allow for easy monitoring of who is where and social regulations complete the separation. In major metropolitan areas of the US, half of all new housing is built and sold as part of a collective regime, with privatised rubbish collection and security, and covenants regulated by governing bodies. One man was fined because his car leaked a spot of oil on the street. A woman was threatened with expulsion for kissing her boyfriend in the driveway. I may not hang out any washing, nor can I leave the rubbish bin out except on Fridays.

The zenith of this "nice, happy" American suburban living is the physically gated community, a "purified" environment where outsiders can be spotted immediately. A third of all new communities in southern California are gated, as is a similar proportion around Phoenix, Arizona, in the suburbs of Washington and parts of Florida. In Tampa, Florida, four out of five home sales valued at $300,000 or more are of prop­erties in gated communities. They come with gates, swipe cards and tight security. And they largely isolate the white middle and upper classes from poorer blacks.

Hurricane Katrina in New Orleans six years ago was an eye-opener for middle-class America. One Midwesterner bemoaned to me the television pictures of all those people "sitting on their fat black asses" and waiting for government help. A more liberal man noted that it was a "wake-up call" to white America, which did not normally see inside the black inner cities.

In the US, as in Asia, Latin America and South Africa, the separation and gating of communities is an accepted symbol of vastly unequal societies in which the winners must be physically protected from the losers. Figures from the US Economic Policy Institute show that, in 2009, the median net worth for white households in America was $97,860 (a fall of 27 per cent in five years); for black households, it was $2,170 (a fall of 84 per cent over the same period).

Black America is finding ways to fight back, with a trend towards flash-mob attacks in upscale department stores and the restaurant districts of cities such as Philadelphia and Chicago. On 29 July, two dozen youths, one as young as 11, beat up and robbed bystanders in central Philadelphia. The city has imposed a weekend curfew of 9pm for minors. In Chicago in June, up to 20 young men violently robbed people in Streeterville, a usually trouble-free area dominated by upmarket shops and skyscrapers. These forays into middle-class white American territory are rare, but becoming less so.

In Europe, we segregate less - and we are less unequal. Median total wealth per household in the UK, according to last year's National Equality Panel report, is £21,000 for black Africans, £76,000 for black Caribbeans and £221,000 for white British. For Bangladeshis, it is £15,000; for Muslims, £42,000; for Indians, £204,000. The figures are not directly comparable with those for the US, but the relative poverty levels are: black America is far poorer relative to white America than black Britain is to white Britain.

Not that we have anything to be smug about. The Equality Panel reported that, by 2008, the UK had the highest level of income inequality since soon after the Second World War. And the average household wealth of the top 10 per cent, at £853,000, was nearly 100 times higher than the wealth of the poorest 10 per cent, at less than £9,000. These figures include property, savings, cars and pension rights.

Geographical segregation, too, is increasing in the UK, not just between north and south, but within regions and local authorities. The north might be far poorer than the south - household wealth in the south-east is 1.7 times that in the north-west - but the variation in wealth is higher in the south and especially stark in London. There is some evidence that the social marginalisation of poorer wards is increasing all over England, with the gap widening between these areas and their locality in terms of health, education, employment and income.

Urban paranoia

The degree of geographical segregation and privatisation of public space in the US will never be matched in England. First, we do not have the space. As John Micklethwait and Adrian Wooldridge point out in The Right Nation, the US has enough land to give every household an acre and still populate only one-twentieth of the continental United States (excluding Alaska). Second, we do not have the same culture of privatisation, even though our security-patrolled shopping centres mirror the trend and gated living is becoming more popular. The research is mixed as to whether it makes people feel more secure; some say their segregated communities make them feel safe, others have become more paranoid about strangers.
So, without segregation and without guns, what is to be Europe's solution to civic unrest in the face of soaring economic inequality? David Cameron has reached for an answer in the shape of Bill Bratton, the former New York City police chief hired to advise the Prime Minister. Bratton is associated with falling crime rates in US cities due to a "zero-tolerance" approach that Cameron has said he will adopt in the UK. He may be disappointed.

The economist Steven Levitt has conducted research suggesting that the decline in New York's crime rate had more to do with rising numbers of (armed) police, a higher prison population and the legalisation of abortion than Bratton's methods. The drop began before Bratton was appointed, Levitt argues, and other cities that did not employ his style of policing experienced similar falls in crime, once police numbers were taken into account.

Bratton may be a good headline, but he is not the solution. That leaves Cameron with the options of spending more on police and prisons
to match incarceration rates in the US, where black people are three times as likely to be jailed as in England and Wales. Or he could tackle inequality: in inherited wealth, in employment, in wages, in opportunity. But that, as Labour can painfully attest, is the hardest headline to win of them all.

This article first appeared in the 22 August 2011 issue of the New Statesman, The answer to the riots?

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 22 August 2011 issue of the New Statesman, The answer to the riots?