We love capitalism

Were trade unionists looking in the wrong place when they fought for better pay and shorter hours? T

Karl Marx famously predicted that capitalism would produce its own gravediggers. If so, they have been an awfully long time on the job. (Perhaps they knock off early.) In fact, there is no grave. Capitalism is alive and well, having triumphed on all fronts: economic, social and political. Like democracy, it has proved to be the worst way to run an economy - with the exception of all the others. Yet it seems unlikely that in a hundred years there will be any general need for the word capitalism at all. The only sixth-formers writing essays on "capitalism" or "socialism" in 2107 will be those studying history.

As a result of this total victory, the market economy has been depoliticised. If anything, it is Labour ministers who now make the case for capitalism - for productivity, competitiveness and growth - and new Conservatives who point to the "social irresponsibility" of a selection of companies. When Rover finally went under in 2005, victim of the scouring forces of global capitalism, the national response was a collective shrug. We are all, it seems, capitalists now.

But what species of capitalist do we want to be? Where markets have proved triumphant is in their ability to drive up living standards and personal choice through rising productivity. And yet, as John Maynard Keynes presciently warned in 1930, this solving of "the economic problem" still leaves mankind with his "real [and] permanent problem - how to use his freedom from pressing economic cares . . . which science and compound interest will have won for him, to live wisely and agreeably and well".

Solving this problem means rethinking the essence of each individual's relationship to the labour market. Capitalism is triumphant but complacent - to reform it, we have to go into the belly of the beast.

There are mountains of data being produced which show us what the Beatles and Aristotle instinctively knew: that higher levels of wealth and consumption have a limited, and diminishing, impact on our sense of well-being. Politicians are trading terms such as "general well-being" and "quality of life" because there is a grow- ing awareness of the costs as well as the benefits of consumer-driven growth - the malaise that the psychologist Oliver James calls "affluenza".

The prescriptions for the disease are to "simplify" our lives, consume less, address our "work-life balance" and meditate. There is even a gentle man giving out free hugs. At a policy level, higher income tax is sometimes proposed (presumably because those days of supertax in the 1970s were so euphoric), along with longer holidays and state-mandated limits on working hours. These are mostly well and good. But they skirt around the central issue (and here Marx was at his most acute): the relationship between the individual and his or her work. Purposeful, rewarding work is at the heart of a well-lived life. This is why Gordon Brown has called for "full and fulfilling" employment and why David Cameron - a decade later - supports a "modern vision of ethical work" as part of a drive towards "general well-being". There is a strong, consistent link between job satisfaction and overall happiness. Work is where economics becomes human, where the connection between the creation of wealth and cultivation of well-being is strongest.

Work is also the site at which the skills and effort of the individual are transformed into something the number-crunchers at the Office for National Statistics can measure and call GDP. Right now, in the UK at least, we are not doing too well on this score. The most important component of overall productivity today is labour productivity - in other words, what people actually do (or fail to do) at their workplace each day.

The problem that companies face is how to motivate people to "go the extra mile": to give the firm more creativity, energy or time than is required under the terms of their contract. In the management literature, this is labelled "discretionary effort". But it is much more than an issue for managers. It goes to the heart of the particular model of a market economy that is and has been in vogue for the past century or so, one that is based on people working for a firm owned by other people, to whom most additional profit flows. As the other Marx (Groucho) put it: "What makes wage slaves? Wages!"

There is a solution to both problems, a remedy that will raise levels of well-being and boost productivity. It is, in that incalculably misused phrase, a "win-win". The solution is this: for the people who work in an enterprise to have a real financial stake in its long-term performance. Firms in which the employees are also the "co-owners" are more productive, with more engaged employees. They account for no less than £20bn worth of turnover - roughly 2 per cent of the UK economy - and cover such diverse sectors as retail (John Lewis), civil engineering (Arup) and advertising (St Luke's). In the mid-1990s, Labour flirted briefly with the idea of a "stakeholder" society, then being articulated by Will Hutton, but backed off once the top brass realised that it would entail taming the capital markets. The essential insight of stakeholding was right, but the place to start is in the firm itself, not the market as a whole.

Most policy-makers view the co-ownership sector in the same way as the royal family: a good thing, slightly anachronistic . . . and a bit wet. But firms where workers not only own a real stake but also play a real role in running the firm - where the co-owners are also co-creators - are not for the soft-hearted. These are not reheated co-operatives: pay differentials tend to be lower than in comparable firms, but there is no expectation that everyone will get a same-sized slice of the pie. One of the sources of higher productivity in these "CoCo" companies is tougher peer policing: it is harder to "pull a sickie" when the co-workers who "welcome" you back will be poorer as a result. Information-sharing and innovation levels look to be higher in CoCo firms.

Latter-day pirates

The best study undertaken of relative performance suggests a 19 per cent productivity lift from co-ownership. Applied across the economy, co-ownership would make the UK the most productive nation in the world. In a survey of managers in co-owner firms, 72 per cent reported that staff worked harder than in competitor companies, and 81 per cent that they took on more responsibility. And CoCo firms should not be tarred with the brush of being an example of "corporate social responsibility". They are only as responsible or irresponsible as their owners, just like with any other firm.

CoCo enterprises should be the next-generation capitalist business model. A new organisation, the Employee Ownership Association, will start a campaign this month to raise political and public awareness. The timing is auspicious: the public limited company, until now the mainstay of capitalism, is in some danger from private equity firms (at this very moment, a ravenous group is circling Sainsbury's). It might be possible to throw a few legislative or regulatory obstacles in the path of these latter-day pirates. But the whole point of a public limited company is that its stock is publicly traded. If a private equity firm offers my pension fund a great price for its stocks in Sainsbury's, the fund might well be obliged to accept it. Most CoCo firms, however, are impregnable to outside raiders: the stock has to remain in the hands of employees. It is also easier, in such firms, to take longer-term decisions without too much fear of the impact on short-term share prices.

John Lewis is flying high, but had some years of retrenchment and reinvestment in the 1990s when its headline profit numbers were weak. "If we had been a plc, you could write a script that we would have been under severe scrutiny in those years," says the firm's personnel director, Andy Street. "But our structure allows us to operate on slightly different timescales."

As a business model co-ownership seems hard to beat. Yet if this was the end of the argument, it would be hard to get very excited. After all, productivity per se is scarcely relevant: what counts is how it is arrived at. But CoCo capitalism has other advantages, in its human engagement with work and an increased sense of citizenship that spills over into life outside work. For one thing, it seems that co-owned firms are less likely to award vast salaries to their chief executives, and may act as a brake on runaway wage inequality.

John Stuart Mill, a passionate advocate for co-ownership, argued in the 19th century that the benefits included "the healing of the standing feud between capital and labour; the transformation of human life, from a conflict of classes struggling for opposite interests, to a friendly riv alry in the pursuit of a common good to all; the elevation of the dignity of labour; a new sense of security and independence in the labouring class; and the conversion of each human being's daily occupation into a school of the social sympathies and the practical intelligence".

Given that the "feud" between capital and labour is the raison d'être of the trade unions, co-ownership is not necessarily good news for them. Even in the "corporatist", German-style version of capitalism, the underlying assumption is that labour and capital have differing interests, which have to be balanced peaceably and fairly. Under co-ownership, the distinction implodes. And it was certainly Mill's view that giving "the whole body of workpeople . . . a direct interest" in the profits of the enterprise would bring about "the true euthanasia of Trades Unionism".

Yet a move towards a different sort of capitalism poses challenges to political orthodoxy, too. Despite capitalism's victory, there is a resistance to looking with a clear eye at its flaws; there is still a timidity about questioning the current version of capitalism for fear of being branded a barricade-building red. But surely, it must now be possible to have a conversation about the kind of economy we want: after all, young people born after the fall of the Berlin Wall are reaching voting age.

There are certain policies that might help with the cultivation of co-ownership, from changes in tax treatment to better data collection and the provision of advice. However, the argument has to be won first. For the left, this requires a significant shift in focus. The primary locus of political attention in the past half-century has been on the state and its relationship to the individual. Taxation, regulation, redistribution and public services are the staple diet of Labour types. The fruits of this philosophy, especially the welfare state, are obvious and real, but the party has to start living up to its name again.

The central social and economic issue of our time is the relationship of individuals not to the state, but to the organisation for which they labour. Co-ownership could be seen, using the old labels, as socialism without the state, yet it could equally be seen as capitalism with more capitalists. The point is that it doesn't matter. What should concern us now is whether existing structures and cultures are enabling us to live "wisely, agreeably and well" and, if not, what we might do about it.

CoCo Companies is published by the Employee Ownership Association (http://www.employeeownership.co.uk)

This article first appeared in the 19 February 2007 issue of the New Statesman, Iran - Ready to attack

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The prophets of Trumpism

How the ideas of two pre-war intellectual refugees – the radical Herbert Marcuse and the reactionary Eric Voegelin – are influencing the new culture wars among Trump and his acolytes.

Even after Donald Trump’s more conciliatory address to Congress, American politics seems set to become a battle between the president’s joyless autocracy and a carnival of protest that could end up evoking the anti-war movements of the 1960s. There will be more draconian executive orders and more marches in pink hats. There may well be violence.

The intellectual battle that will be played out in the months and years to come, however, was foretold by two German refugees from Nazi persecution: Eric Voegelin, the doyen of Cold War reactionary conservatives, and Herbert Marcuse, the inspiration behind the revolutionary student activism of the 1960s. Voegelin argued that society needed an order that could be found only by reaching back to the past. Marcuse argued that refusal to accede to tyranny was essential to give birth to a revolutionary politics that would propel progress to a new kind of society. Marcuse the radical and Voegelin the reactionary could not seem further apart, and yet they share a common intellectual root in Germany in the 1920s, from which came a shared critique of modern society. Their ideas may well inspire some of the political conflicts to come.

The culture wars of the 1960s are very much alive for Trump’s acolytes. Steve Bannon, the former executive chairman of the alt-right website Breitbart News and Trump’s chief strategist, blames the counterculture of the 1960s – the drugs, the hippies, the liberal reforms – for America losing its way and, eventually, succumbing to economic crisis in 2008. Bannon set out his ideas in Generation Zero, a 2010 documentary which blamed the financial crash not on greedy, under-regulated bankers but on the moral and cultural malaise that started in the 1960s. He is still fighting people who might have been inspired by Marcuse. “The baby boomers are the most spoiled, most self-centred, most narcissistic generation the country has ever produced,” he told an interviewer in 2011.

Bannon’s thinking, set out in several speeches over the past few years, is that America’s working and middle classes have been betrayed by an elite in Washington, DC (the “Imperial City”, he calls it) which oversees insider deals so that the insiders can profit from global capitalism. Bannon wants to return America to traditions rooted in Judaeo-Christian values and to reassert national sovereignty. Most worryingly, on several occasions he has said that the crisis will only be resolved through the catharsis of conflict and national mobilisation through war.

America has always been a work in progress. Ronald Reagan and Barack Obama were very different presidents but they shared a belief that progress was America’s calling. The reactionary turn in US politics is not just a shift to the right but an attempt to displace progress as the common creed.

Instead, Bannon and his ilk want America to become a work in regress, as the historian Mark Lilla argues in his recent book on reactionary philosophy, The Shipwrecked Mind. Much of the new reactionary thinking echoes Voegelin’s idea that, in order to renew itself, a society must first go backwards to find where and how it lost its way.

 

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Eric Voegelin defies easy categorisation. Born in 1901 in Cologne and brought up in Vienna, he was brave and principled. After a visit to the United States in the 1920s, he wrote two books criticising Nazi racial politics, which got him sacked from his teaching position at the University of Vienna. When the Germans arrived in Austria following the Anschluss in 1938, Voegelin and his wife fled on a train as the Gestapo ransacked their apartment.

After a brief stay in Switzerland, he moved to America and in 1942 took up an academic post at Louisiana State University. He then embarked on a prolific career, the centrepiece of which was his sprawling, multi-volume work Order and History.

Voegelin’s philosophy gave expression to the dark and powerful forces that had shaped his life. He believed that modern society was prey to flawed utopianism – he called this “gnosticism” – in which an elite of prophets takes power, claiming special insight into how heaven could be created on Earth for a chosen people. Gnostic sects in the Middle Ages had their modern equivalents in the Nazi proclamation of a racially pure utopia and the Marxist promise of equality for all. Voegelin’s catchphrase was: “Don’t immanentise the eschaton!” (meaning: “Do not try to build heaven on Earth”).

Marxism and Nazism, Voegelin argued, were political versions of religion: we get rid of God only to reinstall him in the form of an elite of reformers with all the answers. In his recent bestselling book Homo Deus, Yuval Harari argues that we are entering a new stage of the process that Voegelin identified. We have become as powerful as gods, he argued, but now need to learn how to be wise and responsible gods.

Today Voegelin’s attack on overreaching perfectionism echoes in reactionary criticism of Obamacare and in the yearning for national certitude. Voegelin thought the role of philosophy was not to change the world, but to understand its underlying order and help us tune in to that, rather than being diverted by the lure of the false prophets of political religion.

He was influenced by the Viennese satirist Karl Kraus, who said that “origin is the goal”, by which he meant that the point of the future was to restore the ancient past. For Voegelin, order comes from a sense of harmony, of everything being in its place. This is a position that opens itself up to deeply conservative interpretations.

When, in his presidential inauguration address, Trump spoke of American “carnage”, he was echoing Voegelin’s account of decay and disorder. When he talked of “one people, one nation, one heart” he was evoking the kind of order that Voegelin spoke of. Trump and his acolytes see their mission as the need to restore a natural order, under which illegal immigrants and aliens are kept well away and white people can feel at home once more in a society where everyone signs up to Judaeo-Christian beliefs.

Nothing could be further from the ideas of Herbert Marcuse.

Born in 1898 in Berlin, Marcuse became a member of the celebrated Marxist Frankfurt School, which included Theodor Adorno, Max Horkheimer and, tangentially, Walter Benjamin. Marcuse emigrated to the United States in 1933 as Hitler came to power. By 1940, he had become a US citizen and, while Voegelin was starting work at Louisiana State, Marcuse was working as a researcher for the Office of Strategic Services, the precursor of the CIA. He continued working for the government after the war and resumed his academic career only in 1952. His best-known book, One-Dimensional Man, was published in 1964.

One of Marcuse’s big ideas was the “Great Refusal”: progress had to start with refusing to accept an unacceptable reality. One should say “no” to a world of alienating work, dominated by corporations and impersonal systems, which allow little room for people to explore their deeper sense of humanity. Marcuse saw the student and anti-war protests of the 1960s and 1970s, which adopted him as their intellectual mentor, as evidence that the Great Refusal was gaining momentum.

Trump has given the Great Refusal new life. The documentary film-maker Michael Moore has called for cities to become “regions of resistance” by offering sanctuary to immigrants threatened with deportation. Angela Davis, the once-jailed Black Panther revolutionary who was close to Marcuse, told the Women’s March in Washington that people had to be ready for “1,459 days of resistance: resistance on the ground, resistance on the job, resistance in our art and in our music”. In a lecture at the Free University of West Berlin published in 1970, Marcuse said demonstrations and protests were an essential first step towards a “liberation of consciousness” from the capitalist machine:

“The whole person must demonstrate his participation and his will to live . . . in a pacified, human world . . . it is . . . harmful . . . to preach defeatism and quietism, which can only play into the hands of those who run the system . . . We must resist if we still want to live as human beings, to work and be happy.”

The Great Refusal was a capacious idea capable of embracing anyone who wanted to say, “No, enough!” It could embrace trade unions and workers, African Americans and feminists, students and national liberation movements, those who were on the margins of society and those professionals – technicians, scientists, artists, intellectuals – who worked at its centres of power and who chose to refuse as an act of conscience.

As a new generation prepares to embark on a period of resistance, what lessons should they learn from the wave of protest that Marcuse once helped to inspire?

Protest is a way to bear witness, to make voices heard and to make it possible for people to bond. Yet the fire of protest can easily die out as the Occupy movement did, even if its embers are still glowing. The carnival-type atmosphere can be uplifting but fleeting. Creating common programmes to be taken forward by organisations demands hard work. The Arab spring showed how quickly a popular revolution can turn sour when a movement is not ready to take power.

Since the protests that Marcuse was involved in, no comparable movement of the left in the United States has mobilised such a broad support base. Instead, that period of resistance was followed, at the end of the 1970s, by a shift to the right in the US and the UK. It was reactionaries, not revolutionaries, who set off forward to the past.

Now we seem to be in for an intensifying cycle of conflict between the adherents of Marcuse and Voegelin: between the Marxist revolutionary and the mystic conservative; between resistance and order; between those who want to live among a cosmopolitan, urban multitude and those who want a society of provincial oneness and sameness; those who want change, innovation and creativity and those who crave simplicity, stability and authority.

That much is obvious. Yet what is striking is not how different Marcuse was from Voegelin, but how alike they were. The best way to respond to the rise of Trump might be to blend their ideas rather than set them against one another, to create a new intellectual and political combination. Indeed, they could be seen as different branches of the same intellectual tree.

Voegelin was influenced by the German- Jewish philosopher Hans Jonas, who studied with Martin Heidegger in Freiburg in the 1920s. Jonas joined the German Jewish Brigade, which fought against Hitler, before emigrating to the US, where he became a professor at the New School in New York. He was one of the foremost scholars of gnosticism, which became Voegelin’s focus. Towards the end of his life, Jonas took up a chair at the University of Munich named after Voegelin.

Voegelin did not study at Freiburg, but one of his closest friends was the social ­theorist Alfred Schütz, a student of Edmund Husserl’s who applied his phenomenological thinking to the sociology of ­everyday life. Marcuse studied with Husserl and Heidegger at Freiburg, at the same time as Jonas and Hannah Arendt. From that shared intellectual root have emerged some powerful ideas that could unite progressives and conservatives.

Only at moments of profound crisis – of the kind we are living through – do we see just how contingent, vulnerable and fragile our society is. Voegelin warned: “In an hour of crisis, when the order of society flounders and disintegrates, the fundamental problems of political existence in history are more apt to come into view than in periods of comparative stability.”

A crisis should be a time for profound reflection, yet leaders are more likely to resort to “magical operations” to divert people’s attention: moral condemnation, branding enemies as aggressors, threatening war. “The intellectual and moral corruption,” Voegelin wrote, “which expresses itself in the aggregate of such magical operations may pervade society with the weird ghostly atmosphere of a lunatic asylum, as we experience it in Western society.”

Welcome to the Trump White House.

 

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Voegelin is a timely reminder of how unconservative Donald Trump is and of how conservatives should be a vital part of the coalition against him. Conservatism comes in several strains: laissez-faire conservatives such as George Osborne want small government, free trade, low taxes and freedom of choice. Status quo conservatives such as Angela Merkel want stability and continuity, even if that entails sticking with social welfare programmes and liberal democracy. Authoritarian conservatives, however, are prepared to use the big state to engineer change.

One important question for the future is whether the laissez-faire and status quo conservatives will realign around the ascendant authoritarian camp promoted by Trump. Merkel is the world leader of the conservative-inspired opposition to the US president. But his most profound critic is Pope Francis, who uses language similar to Voegelin’s to condemn the “material and spiritual poverty” of capitalism, and the language of Marcuse to condemn the process of dehumanisation embarked upon by Bannon and Trump.

“As Christians and all people of goodwill, it is for us to live and act at this moment,” the Pope has said. “It is a grave responsib­ility, since certain present realities, unless ­effectively dealt with, are capable of ­setting off a process of dehumanisation which would then be hard to reverse.”

The challenge for progressives is to reframe resistance in terms that can appeal to conservatives: to use conservative ideas of character and spirituality for progressive ends. We will spend a great deal more time trying to conserve things. The swarm of legal challenges against Trump will hold him to the principles of the US constitution and the rule of law. Many of the young people attracted to Bernie Sanders and the Occupy movement yearned for the restoration of the American dream.

Building bridges with the conservative opposition is not merely a tactical manoeuvre to widen support. It has deeper roots in shared doubts about modernity which go back to Freiburg and the man both Marcuse and Jonas renounced in 1964 for supporting the Nazis: Martin Heidegger.

For Heidegger, modernity was a restless, disruptive force that displaced people from jobs, communities and old ways of life, and so left them searching for a sense of home, a place to come back to, where they could be at one with the world. Technology played a central role in this, Heidegger argued, providing not just tools for us to use, but an entire framework for our lives.

Marcuse, writing four decades before ­Facebook and Google, warned that we needed to resist a life in which we freely comply with our own subjugation by technical, bureaucratic systems that control our every thought and act; which make life rich but empty, busy but dead, and turn people into adjuncts of vast systems. We should “resist playing a game that was always rigged against true freedom”, he urged, using language that has been adopted by Trump.

Writing not far from what was to become Silicon Valley, Marcuse pointed to a much larger possibility: the technological bounty of capitalism could, in principle, free us from necessity and meet all human needs, but “. . . only if the vast capabilities of science and technology, of the scientific and artistic imagination, direct the construction of a sensuous environment; only if the world of work loses its alienating features and becomes a world of human relationships; only if productivity becomes creativity are the roots of domination dried up in individuals”.

Writing in the 1960s, when full employment was the norm and advanced society was enjoying a sense of plenty, Marcuse foreshadowed the debates we are having now about what it will mean to be human in an age of machines capable of rapid learning. Mark Zuckerberg’s argument in his recently published manifesto that Facebook creates an infrastructure for a co-operative and creative global civil society is a response to concerns that Marcuse raised.

 

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Just as Marcuse saw that capitalism was a union of contradictions – freedom created on the basis of exploitation, wealth generated by poverty – Voegelin thought modern society was self-defeating: it declined as it advanced. Giving everyone wages to buy stuff from the shops was not progress, he said, but a soulless distortion of the good life, an invitation to spiritual devastation. The gnosticism that Voegelin so hated, the effort to design a perfect society, was also the source of the technological and rational bureaucracy that Marcuse blamed for creating a one-dimensional society. Voegelin would have regarded the apostles of Silicon Valley as arch-gnostics, creating a rational order to the world with the insights gleaned from Big Data and artificial intelligence.

Marcuse and Voegelin point us in the same direction for a way forward. People need to be able to find a sense of meaning and purpose in their lives. Both would have seen Trump’s ascendancy as a symptom of a deeper failure in modern society, one that we feel inside ourselves. The problem for many of us is not that we do not have enough money, but that we do not have enough meaning.

For Voegelin, living well involves “opening our souls” to something higher than buy and sell, work and shop, calculate and trade, margins and profits. Once we detach ourselves from these temporary, Earthly measures of success, we might learn to accept that life is a mysterious, bubbling stream upon which we cannot impose a direction.

A true sense of order, Voegelin argues, comes from living with an open soul and a full spirit, not being part of a machine manufacturing false promises. If we cannot manage to create order from within, by returning to the life guided by the soul, we will find order imposed, more brutally, from without. Marcuse, likewise, thought that turning the Great Refusal into a creative movement required an inner renewal, a “liberation of consciousness” through aesthetics, art, fantasy, imagination and creativity. We can only escape the grip of the one-dimensional society, which reduces life to routines of buying and selling, by recognising that we are multidimensional people, full of potential to grow in different ways. It is not enough merely to resist reality; we have to escape it through leaps of imagination and see the world afresh.

Václav Havel, the leader of the Czech resistance to communist rule, called this “living in truth”. Havel’s most influential essay, “The Power of the Powerless”, written in 1978, is about how to avoid the slow spiritual death that comes from living in an oppressive regime that does not require you to believe in what it does, merely to go along with “living within a lie”.

The greengrocer who is the central figure and motif in Havel’s essay eventually snaps, and stops putting in his shop window an official sign that reads: “Workers of the world, unite!” Havel wrote: “In this revolt the greengrocer steps out of living within the lie. He rejects the ritual and breaks the rules of the game. He discovers once more his suppressed identity and dignity. His revolt is an attempt to live within the truth.”

Human beings by nature long to live in truth, even when put under pressure to live a lie. In language evocative of Voegelin and Marcuse, Havel writes: “In everyone there is some longing for humanity’s rightful dignity, for moral integrity, for free expression of being and a sense of transcendence over the world of existence.”

In communist Czechoslovakia that meant taking a wide and generous view of what counts as resistance as people sought their own ways to “live in truth”. Under President Trump, many Americans are finding they are living within a regime of lies, and they will be drawn back, time and again, to find ways, large and small, personal and political, to live in truth.

Resistance to Trump and Trumpism will succeed only if it mobilises both conservative and progressive forces opposed to authoritarianism, and it needs to stand for a better way to live in truth, with dignity.

Charles Leadbeater is the author of the ALT/Now manifesto, which is available to read at: banffcentre.ca

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution