2012 in review: The New Statesman's best interviews

Ricky Gervais on atheism, Boris Johnson on "lefty crap", Hilary Mantel on Bring Up The Bodies, Stuart Hall on Englishness.

Welcome to the sixth instalment of the New Statesman's 12 days of Blog-mas. (Yesterday's round up, of our best writing on identity, is here). 

A crop of new writers, comedians, activists and political figures entered the scene in 2012, and a crop of old ones re-emerged. Here are some of our best interviews - click the headlines to open them in a new window:

Terry Pratchett: Sex, death and nature

For more than 40 years, Terry Pratchett has used science fiction and fantasy to craft subtle satires. But the onset of Alzheimer’s has forced him to confront a stark question – what will happen when he is no longer able to write? He talks to Laurie Penny:

I Shall Wear Midnight, features a set piece in which the young heroine has to prevent the suicide of a man who has recently beaten his unmarried, pregnant, 13-year-old daughter so badly that she has miscarried – and bury the foetus. Harry Potter it ain’t. Yet the kids gobble it up, because one thing that Pratchett understands is that just because kids like stories doesn’t mean they like to be lied to.

So, the possibility of young readers seeing their favourite author on television talking frankly about his own death worries him not a whit. “Scaring the kids is a fine and noble thing to do,” he says. “I’m happy to tell kids to prepare for a short life. But it works like this – you can take them through the dark forest, but you must bring them out into the light.”

The unquiet mind of Hilary Mantel

A portrait of the author of the Booker-winning Wolf Hall. She talks to Sophie Elmhirst about memory, class, Bring Up the Bodies and the unsettled writer’s life.

Mantel wondered if she was being too demanding. But then she thought that to adjust her style in any way would be not only a loss, but patronising (“You simply cannot run remedial classes for people on the page”). Some will be lost along the way, but she doesn’t mind. “It makes me think that some readers read a book as if it were an instruction manual, expecting to understand everything first time, but of course when you write, you put into every sentence an overflow of meaning, and you create in every sentence as many resonances and double meanings and ambiguities as you can possibly pack in there, so that people can read it again and get something new each time.”

She can sound arrogant, Mantel, assured of her abilities and candid about them in a way that seems peculiarly un-English. But even the arrogance is purposeful. It is one of her pieces of advice to young authors: cultivate confidence, have no shame in being bullish about your ideas and your abilities. She was patronised for years by male critics who deemed her work domestic and provincial (one, writing about "A Place of Greater Safety" – the French 800-pager – dwelt on a brief mention of wallpaper). So she makes no apologies for her self-belief.

Ricky Gervais: “There shouldn’t be a word for atheism"

Spending time in the US has only made Ricky Gervais a more outspoken atheist. He tells Robin Ince why that's important.

"My atheism might be higher-profile than other people’s atheism, but it’s not high on my agenda. But it’s the thing they always pick out. I can do 30 tweets of my cat, a bath pic, a Karl [Pilkington] quote, plugging. The one tweet that’s . . . I mean, I don’t even know what an atheist tweet is. Sometimes they’re scientific tweets that oppose some of the “facts” in the Bible. And I get: “Why do you keep going on about atheism?” One of [the questions] is “Why are you obsessed with God if you don’t believe in him?”, and I want to say: “I’m not obsessed with God, I’m obsessed with people who want to do things in his name.”

Another one is: “Why are you obsessed with only the Christian God?” How many times have I stated that I don’t believe in any God? There are possibly 3,000 so-called deities. If we’re talking about monotheistic gods, I believe in one less god than you. When they say, “Why don’t you believe in God?”, I often say, “Which one?”

Chen Guangcheng: “Facts have blood as evidence”

Chen Guangcheng was forced to flee China in May after years of persecution. His advocacy on behalf of women and the poor in the face of China’s one-child policy has made him an enemy of the state. He talks to Ai Wei Wei.

The old approach began in the 1980s and continued until the end of the policy in 2002. It had slogans: “Sterilise when you should or lose your roof.” “Abort when you should or lose the house.” This meant that [the state] could seize a family’s home and food and resell them cheaply. If you refused to undergo ster­ilisation, your house would be destroyed by bulldozers and tractors. They would use a wire rope, called “seed rope” at that time, and this would be tethered to a beam on a tractor. One pull, and the houses would collapse. This is what they mean by the old approach.

Some people committed suicide. The government would ridicule such acts of desperation. The person in charge of the local party committee and the family planning committee has said that suicide was no problem – “I won’t take away the bottle if you want to take an overdose; I won’t take away the rope if you want to hang yourself.” So the 2002 law hasn’t changed much. The destruction of the value of human life has continued.

Ed Miliband: He’s not for turning

How will Ed Miliband remake capitalism when there is no money to spend? He speaks to Jason Cowley.

How do politicians capture that sense of thrilling possibility and make of it something of lasting value? How do you make the restructuring of capitalism a collaborative, patriotic, nation-building project? “I think that’s exactly the right way to put it,” Miliband says, tilting forward in his chair. “I think the Olympics is a very important moment for me – it was very important for the country most of all, but important for me because I think, for the first time in my life, I got a sense of what my dad [the Marxist academic Ralph Miliband] used to talk to me about, about the wartime spirit, his time in the navy. You can’t have a permanent Olympic Games, but I think there’s something about ‘what kind of country do we feel like’. Do we feel a sense of obligation to each other? Do people feel the benefits and burdens of life are fairly distributed? Those things are partly economic but they go deeper than that.”

Stuart Hall: “We need to talk about Englishness”

Born in Jamaica, Stuart Hall is the éminence grise of the British intellectual left and one of the founders of cultural studies. He coined the word “Thatcherism” and, aged 80, he remains one of our leading thinkers. He talks to Jonathan Derbyshire.

“Suez marked the end of an illusion about the end of imperialism,” he observes. “Hungary marked the end of an illusion – which I never shared – about the Soviet Union and communism. If you were on the left, you had to be independent of those two extremes. That’s the space I identified with. There were people in the Communist Party who were shocked and torn by Khrushchev’s revelations about what had gone on under Stalinism. There were a number of independent left people like me, many of them from the third world. And then some critical people from the Labour establishment, Labour intellectuals. They all came together at the Socialist Club.”

José Manuel Barroso: Why is Britain so closed to the EU?

Britain will be reduced to the role of a “Norway or Switzerland” in Europe if Eurosceptics push us into leaving the EU, warns the president of the European Commission, talking to David Miliband.

The new narrative for Europe should be about the need to have a responsible organisation, the need to be able to defend our interests and promote our values, like human rights. In the 21st century, this has not yet been able to mobilise people’s minds and hearts. What I want to underline – and this isn’t a way of escaping my own or the Commission’s responsibility – is that, for this to succeed, it has to be done also with leaders at national level. We have to . . . make the case for explaining in a rational – but at the same time passionate – way what we have to lose, globally. And we may be in the margins of irrelevance if we don’t do things together.

Boris Johnson: “I’ll tell you what makes me angry – lefty crap”

The London mayor regrets ever having agreed to an interview with Jemima Khan.

One of Boris's advantages over Ken might be that he knows every journalistic trick. He is extraordinarily conscious of how he will appear in print and of how his comments will be reported. Unlike Ken, he points out, he has no need for a Matthew Freud PR push at public expense. He is constantly vigilant, on the lookout for the tripwire. "That might have been my cagey look," he says, when I question his expression, "my mind scooting very rapidly forward, thinking: 'Where is she going with this one?'" If he's so canny, what does he think the headline for this interview will be? "The headline is obviously 'The man to win - why I back Boris, by Jemima'. That is the headline."

Ken Livingstone:“The world is run by monsters”

Jemima Khan finds the Labour challenger spoiling for a fight, with opinions on everything from “clinically insane” Margaret Thatcher to the “moral imbecile” running the BBC.

"I've got so many schemes ready for them," Ken Livingstone says with some glee. By "them" he means the Tories, with whom he will have to work if he wins the London mayoral election in May. "If I am re-elected it will be a devastating blow for them. They are halfway through their term. They want to get re-elected. Are they going to plough on with a strategy that clearly doesn't work?"

 
“You simply cannot run remedial classes for people on the page” Hilary Mantel tells Sophie Elmhirst. Portrait by Leonie Hampton
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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?