How Britain wages war: John Pilger interrogates military tradition

The military has created a wall of silence around its frequent resort to barbaric practices.

Five photographs together break a silence. The first is of a former Gurkha regimental sergeant major, Tul Bahadur Pun, aged 87. He sits in a wheelchair outside 10 Downing Street. He holds a board full of medals, including the Victoria Cross, the highest award for bravery, which he won serving in the British army.

He has been refused entry to Britain and treatment for a serious heart ailment by the National Health Service: outrages rescinded only after a public campaign. On 25 June, he came to Down ing Street to hand his Victoria Cross back to the Prime Minister, but Gordon Brown refused to see him.

The second photograph is of a 12-year-old boy, one of three children. They are Kuchis, nomads of Afghanistan. They have been hit by Nato bombs, American or British, and nurses are trying to peel away their roasted skin with tweezers. On the night of 10 June, Nato planes struck again, killing at least 30 civilians in a single village: children, women, schoolteachers, students. On 4 July, another 22 civilians died like this. All, including the roasted children, are described as "militants" or "suspected Taliban". The Defence Secretary, Des Browne, says the invasion of Afghan istan is "the noble cause of the 21st century".

The third photograph is of a computer-generated aircraft carrier not yet built, one of two of the biggest ships ever ordered for the Royal Navy. The £4bn contract is shared by BAE Systems, whose sale of 72 fighter jets to the corrupt tyranny in Saudi Arabia has made Britain the biggest arms merchant on earth, selling mostly to oppressive regimes in poor countries. At a time of economic crisis, Browne describes the carriers as "an affordable expenditure".

The fourth photograph is of a young British soldier, Gavin Williams, who was "beasted" to death by three non-commissioned officers. This "informal summary punishment", which sent his body temperature to more than 41 degrees, was intended to "humiliate, push to the limit and hurt". The torture was described in court as a fact of army life.

The final photograph is of an Iraqi man, Baha Mousa, who was tortured to death by British soldiers. Taken during his post-mortem, it shows some of the 93 horrific injuries he suffered at the hands of men of the Queen's Lancashire Regiment who beat and abused him for 36 hours, including double-hooding him with hessian sacks in stifling heat. He was a hotel receptionist. Although his murder took place almost five years ago, it was only in May this year that the Ministry of Defence responded to the courts and agreed to an independent inquiry. A judge has described this as a "wall of silence".

A court martial convicted just one soldier of Mousa's "inhumane treatment", and he has since been quietly released. Phil Shiner of Public Interest Lawyers, representing the families of Iraqis who have died in British custody, says the evidence is clear - abuse and torture by the British army is systemic.

Shiner and his colleagues have witness statements and corroborations of prima facie crimes of an especially atrocious kind usually associated with the Americans. "The more cases I am dealing with, the worse it gets," he says. These include an "incident" near the town of Majar al-Kabir in 2004, when British soldiers executed as many as 20 Iraqi prisoners after mutilating them. The latest is that of a 14-year-old boy who was forced to simulate anal and oral sex over a prolonged period.

"At the heart of the US and UK project," says Shiner, "is a desire to avoid accountability for what they want to do. Guantanamo Bay and extraordinary renditions are part of the same struggle to avoid accountability through jurisdiction." British soldiers, he says, use the same torture techniques as the Americans and deny that the European Convention on Human Rights, the Human Rights Act and the UN Convention on Torture apply to them. And British torture is "commonplace": so much so, that "the routine nature of this ill-treatment helps to explain why, despite the abuse of the soldiers and cries of the detainees being clearly audible, nobody, particularly in authority, took any notice".

 

 

Arcane rituals

 

Unbelievably, says Shiner, the Ministry of Defence under Tony Blair decided that the 1972 Heath government's ban on certain torture techniques applied only in the UK and Northern Ireland. Consequently, "many Iraqis were killed and tortured in UK detention facilities". Shiner is working on 46 horrific cases.

A wall of silence has always surrounded the British military, its arcane rituals, rites and practices and, above all, its contempt for the law and natural justice in its various imperial pursuits. For 80 years, the Ministry of Defence and compliant ministers refused to countenance posthumous pardons for terrified boys shot at dawn during the slaughter of the First World War. British soldiers used as guinea pigs during the testing of nuclear weapons in the Indian Ocean were abandoned, as were many others who suffered the toxic effects of the 1991 Gulf War. The treatment of Gurkha Tul Bahadur Pun is typical. Having been sent back to Nepal, many of these "soldiers of the Queen" have no pension, are deeply impoverished and are refused residence or medical help in the country for which they fought and for which 43,000 of them have died or been injured. The Gurkhas have won no fewer than 26 Victoria Crosses, yet Browne's "affordable expenditure" excludes them.

An even more imposing wall of silence ensures that the British public remains largely unaware of the industrial killing of civilians in Britain's modern colonial wars. In his landmark work Unpeople: Britain's Secret Human Rights Abuses, the historian Mark Curtis uses three main categories: direct responsibility, indirect responsibility and active inaction.

"The overall figure [since 1945] is between 8.6 and 13.5 million," Curtis writes. "Of these, Britain bears direct responsibility for between four million and six million deaths. This figure is, if anything, likely to be an underestimate. Not all British interventions have been included, because of lack of data." Since his study was published, the Iraq death toll has reached, by reliable measure, a million men, women and children.

The spiralling rise of militarism within Britain is rarely acknowledged, even by those alerting the public to legislation attacking basic civil liberties, such as the recently drafted Data Com muni cations Bill, which will give the government powers to keep records of all electronic communication. Like the plans for identity cards, this is in keeping what the Americans call "the national security state", which seeks the control of domestic dissent while pursuing military aggression abroad. The £4bn aircraft carriers are to have a "global role". For global read colonial. The Ministry of Defence and the Foreign Office follow Washington's line almost to the letter, as in Browne's preposterous description of Afghanistan as a noble cause. In reality, the US-inspired Nato invasion has had two effects: the killing and dispossession of large numbers of Afghans, and the return of the opium trade, which the Taliban had banned. According to Hamid Karzai, the west's puppet leader, Britain's role in Helmand Province has led directly to the return of the Taliban.

 

 

Loans for arms

 

The militarising of how the British state perceives and treats other societies is vividly demonstrated in Africa, where ten out of 14 of the most impoverished and conflict-ridden countries are seduced into buying British arms and military equipment with "soft loans". Like the British royal family, the British Prime Minister simply follows the money. Having ritually condemned a despot in Zimbabwe for "human rights abuses" - in truth, for no longer serving as the west's business agent - and having obeyed the latest US dictum on Iran and Iraq, Brown set off recently for Saudi Arabia, exporter of Wahhabi fundamentalism and wheeler of fabulous arms deals.

To complement this, the Brown government is spending £11bn of taxpayers' money on a huge, pri vatised military academy in Wales, which will train foreign soldiers and mercenaries recruited to the bogus "war on terror". With arms companies such as Raytheon profiting, this will become Britain's "School of the Americas", a centre for counter-insurgency (terrorist) training and the design of future colonial adventures.

It has had almost no publicity.

Of course, the image of militarist Britain clashes with a benign national regard formed, wrote Tolstoy, "from infancy, by every possible means - class books, church services, sermons, speeches, books, papers, songs, poetry, monuments [leading to] people stupefied in the one direction". Much has changed since he wrote that. Or has it? The shabby, destructive colonial war in Afghanistan is now reported almost entirely through the British army, with squaddies always doing their Kipling best, and with the Afghan resistance routinely dismissed as "outsiders" and "invaders". Pictures of nomadic boys with Nato-roasted skin almost never appear in the press or on television, nor the after-effects of British thermobaric weapons, or "vacuum bombs", designed to suck the air out of human lungs. Instead, whole pages mourn a British military intelligence agent in Afghanis tan, because she happens to have been a 26-year-old woman, the first to die in active service since the 2001 invasion.

Baha Mousa, tortured to death by British soldiers, was also 26 years old. But he was different. His father, Daoud, says that the way the Ministry of Defence has behaved over his son's death convinces him that the British government regards the lives of others as "cheap". And he is right.

www.johnpilger.com

John Pilger, renowned investigative journalist and documentary film-maker, is one of only two to have twice won British journalism's top award; his documentaries have won academy awards in both the UK and the US. In a New Statesman survey of the 50 heroes of our time, Pilger came fourth behind Aung San Suu Kyi and Nelson Mandela. "John Pilger," wrote Harold Pinter, "unearths, with steely attention facts, the filthy truth. I salute him."

This article first appeared in the 14 July 2008 issue of the New Statesman, ‘I’ll leave when I finish the job’

JONATHAN McHUGH/IKON IMAGES
Show Hide image

The optimism error

We are told that austerity has triumphed and that the British economy is running full steam ahead. The reality is more alarming.

In Cardiff last Thursday, 7 January, George Osborne warned of a “dangerous cocktail of new threats” to Britain’s prosperity. These include collapsing global stock-market and commodity prices, weak growth in China and Latin America, stagnation in Europe and turbulence in the Middle East. Osborne was right to prepare us for “headwinds”. What he could not admit was that the fragility of the British recovery he now discerns – just two months after his triumphal Autumn Statement – is due, in no small measure, to his own austerity policies.

The unpalatable truth is that austerity in the face of the private-sector collapse of 2008-2009 has weakened our ability to produce output. Britain has been left overfinancialised, overborrowed and underinvested. It is not surprising that it is exceptionally exposed to any global downturn.

Before John Maynard Keynes it was believed, by economists at least, that a competitive market would normally produce full employment. As the facts of experience appeared to indicate otherwise, economists, prompted by Keynes, sharpened up their theory. A market economy would ­always lead to full employment provided wages and prices were flexible. Workers, if facing unemployment, had only to accept wage reductions to “price themselves back into work”.

However, as it seemed unrealistic to suppose that workers would do this – or do it quickly enough – government policy could short-circuit the painful process of adjustment. When a slump threatened or occurred, a government could stimulate spending by cutting interest rates and by incurring budget deficits. This was the main point of the Keynesian revolution.

This policy ran from the 1950s to the 1970s. It was overthrown in the 1980s, when unemployment prevention became confined to interest-rate policy, eventually run by the central bank, not the government. By keeping the rate of inflation constant, the monetary authority could keep unemployment at its “natural rate”. This worked quite well for a time, but then, following the widespread failure of the banking system, the world economy collapsed in 2008.

In a panic, the politicians, from Barack Obama to Gordon Brown, took Keynes out of the cupboard, dusted him down, and “stimulated” the economy like mad. When this produced some useful recovery they got cold feet. “Keynes,” they said, “you’ve done your job. Back in the cupboard you go.” I wrote a book at the time called The Return of the Master. A reviewer pointed out that the Master had returned for six months only.

Why had the politicians’ nerve failed and what were the consequences?

The answer is that in bailing out leading banks and allowing budget deficits to soar, governments had incurred huge debts that threatened their financial credibility. It was claimed that bond yields would rise sharply, adding to the cost of borrowing. This was never plausible in Britain, but bond yield spikes threatened default in Greece and other eurozone countries early in 2010. Long before the stimulus had been allowed to work its magic in restoring economic activity and government revenues, the fiscal engine was put into reverse, and the politics of austerity took over.

Yet austerity did not hasten recovery; it delayed it and rendered it limp when it came. Enter “quantitative easing” (QE). The central bank would flood the banks and
pension funds with cash. This, it was expected, would cause the banks to lower their interest rates, lend more and, by way of a so-called wealth effect, cause companies and high-net-worth individuals to consume and invest more. But it didn’t happen. There was a small initial impact, but it soon petered out. Bank lending, an important index of recovery, in fact went down as the institutions sat on piles of cash and the wealthy speculated in property.

So we reach the present impasse. Events have confirmed that a competitive market economy is subject to severe collapses, and the effects of these linger in the form of elevated unemployment, lower output, lower productivity and increased poverty. At the same time, however, counter-cyclical policy is disabled. Monetary expansion is much less potent than people believed; and using the budget deficit to fight unemployment is ruled out by the bond markets and the ­Financial Times. The levers either don’t work, or we are not allowed to pull them. Where do we go from here?

 

The present situation

The first thing is to establish where we now are. How much recovery has there been in Britain? Economists try to answer this question with reference to the output gap – the difference between what an economy is actually producing and what it can produce. The OECD’s most recent estimate of this gap in the UK stands at a negligible -0.017 per cent. We might conclude from this that the British economy is running full steam ahead and that we have, at last, successfully recovered from the crash. This is the basis of George Osborne’s triumphalism. His critics, including myself, have been proved wrong. His austerity policies have worked. Or so we are told.

But such a conclusion would be premature. Although we are producing as much output as we can, our capacity to produce output has fallen. This can be shown by comparing the current economic situation to where we would expect to be, according to the historic trend.

From this perspective, championed by the Oxford economist Simon Wren-Lewis, the position is far less rosy. Growth in output per person in Britain (roughly “living standards”) averaged 2.25 per cent per year for the half-century before 2008. Recessions in the past have caused deviations downward from this path, but recoveries had delivered above-trend growth, lifting us back up to the previous path. One can say that the “business cycle” oscillates between errors of pessimism and errors of optimism. In other words, the loss of output is temporary.

This time it was different. The recovery from the financial crisis was the weakest on record, and the result of this is a yawning gap between where we are and where we should have been. Output per head is between 10 and 15 per cent below trend.

We are faced with a puzzle. If the output gap is as small as the OECD believes, then the British economy appears to have lost much of its productive potential. It is no longer a case of demand falling short of supply, leaving a surplus of workers and capital equipment. The supply is no longer available: we have lost eight years’ growth of productivity. Between 1971 and 2007 productivity growth averaged 2-3 per cent a year. Since the recession started it has been close to zero. Why is it that the recession turned spare capacity into lost capacity? One answer lies in the ugly word “hysteresis”.

 

Hysteresis

This is an idea borrowed from physics. If an insulated wire is wrapped around an iron bar, and an electric current is then passed along the wire, the iron bar becomes magnetised. Some of this magnetism remains even after the current has been switched off. A shock has a long-lasting effect. This is labelled hysteresis.

An economy experiences hysteresis not when output falls relative to potential output, but when potential output itself falls as a result of a recession. What happens is that the recession itself shrinks productive capacity: the economy’s ability to produce output is impaired.

The intuition behind it is simple enough: if you let a recession last long enough for capital and labour to rust away you will lose growth potential, on account of discouraged workers, lost skills, broken banks and missing investment in future productivity. By not taking steps to offset the negative shock of the recession with the positive shock of a stimulus, the coalition government cost the country 10 per cent or more of potential output.

The phenomenon of hysteresis is not ­necessarily captured by high levels of “headline” unemployment. In fact, low levels of unemployment may reflect low productivity growth, as employers prefer to use cheap workers to investing in machines: unemployed workers may be re-employed in part-time or minimum-wage or zero-hour contract jobs. Much of the new private-sector job creation lauded by the Chancellor is exactly in such low-productivity sectors. The collapse of investment is particularly serious, because investment is the main source of productivity.

The challenge for policy is to liquidate the hysteresis – to restore supply. How is this to be done?

 

Blockage of policy

An economic recession is precipitated by a fall in private spending, be it investment or consumption. It can be countered by monetary and fiscal policy, aiming either to stimulate private spending or to replace it temporarily by public spending. On the monetary front, the bank rate was dropped to near zero; this not being enough, the Bank of England pumped out hundreds of billions of pounds between 2009 and 2012, but too little of the money went into the real economy. As Keynes recognised, it is the spending of money, not the printing of it, which stimulates productive activity, and he warned: “If . . . we are tempted to assert that money is the drink which stimulates the system to activity, we must remind ourselves that there may be several slips ­between the cup and the lip.”

That left fiscal policy. Fiscal policy can fight recession by cutting taxes or increasing public spending. Both involve deliberately budgeting for a deficit. In Britain, any possible tolerance for a deficit larger than the one automatically caused by a recession was destroyed by fearmongering about unsustainable debt. From 2009 onwards, the difference between Labour and ­Conservative was about the speed of deficit reduction. The contribution that deliberate deficit budgeting might make to recovery was never mentioned, except by unreconstructed Keynesians.

So we now have a situation in which the main tools available to government to bring about a robust recovery are out of action. In addition, sole reliance on monetary policy for stimulus creates a highly unbalanced recovery. The money the government pours into the economy either sits idle or simply pumps up house prices, threatening to re-create the asset bubble that produced the crisis in the first place. We already have the highest rate of post-crash increase in house prices of all OECD countries. This suggests that the next crash may not be far off.

 

The public accounts trap

From 2009 onwards the main obstacle to a sensible recovery policy has been the obsession with balancing the national budget. A government can finance its spending in one of three ways: it can raise taxes, borrow from the private sector, or borrow from the Bank of England (that is, “print money”). Each has advantages and disadvantages, but public opinion has decided that the first of these – covering all spending by taxes – is the only “honest” way. In popular discourse, borrowing signifies a “deficit”, and a particular horror attaches to deficits, because they suggest the government is not “paying its way”. “We must get the deficit down” has been the refrain of all the parties.

Printing money to finance public investment has been suggested by both the Labour leader and the shadow chancellor as a way to get round the borrowing constraint. Its advantage is that it wouldn’t directly increase the national debt, because the government would only owe the money to itself. On the other hand, it might destroy confidence in the state’s ability to control its spending, and it would jeopardise the independence of the central bank. So, printing money to pay for public spending should only be a remedy of the last resort.

It is right to be concerned about a rising national debt (now roughly £1.6trn). But the way to reverse it is not to cut down the economy, but to cause it to grow in a sustainable way. In many circumstances, that involves deliberately increasing the deficit. This is a paradox too far for most people to grasp. But it makes perfect sense if the increased deficit causes the economy, and thus the government’s revenues, to grow faster than the deficit. If the economy is in the doldrums, practically all forms of government expenditure should be welcomed, as they utilise idle resources.

In our present situation, with little spare capacity, the government needs to think much more carefully about what it should be borrowing for. Public finance theory makes a clear distinction between current and capital spending. A sound rule is that governments should cover their current or recurrent spending by taxation, but should borrow for capital spending, that is, investment. This is because current spending gives rise to no government-owned assets, whereas capital spending does.

If these assets are productive, they pay for themselves by increasing government earnings, either through user charges or through increased tax revenues. If I pay for all my groceries “on tick” my debt will just go on rising. But if I borrow to invest in, say, my education, my increased earnings will be available to discharge my debt.

Covering current account spending by taxation is at the heart of the balanced budget rule. But as Thomas J Sargent, certainly no Keynesian, wrote in 1981 (Federal Reserve Bank of Minneapolis, Research Department Working Paper W): “The principles of classical economic theory condone deficits on capital account.”

Now is an ideal time for the government to be investing in the economy, because it can borrow at such low interest rates. But surely this means increasing the deficit? Yes, it does, but in the same unobjectionable way as a business borrows money to build a plant in the expectation that the investment will pay off. It is because the distinction between current and capital spending has become fuzzy through years of misuse and obfuscation that we have slipped into the state of thinking that all government spending must be balanced by taxes – in the jargon, that net public-sector borrowing should normally be zero. George Osborne has now promised to “balance the budget” – by 2019-20. But within this fiscal straitjacket the only way he can create room for more public investment is to reduce current spending, which in practice means cutting the welfare state.

 

A British Investment Bank

How can we break this block on capital spending? Several of us have been advocating a publicly owned British Investment Bank. The need for such institutions has long been widely acknowledged in continental Europe and east Asia, partly because they fill a gap in the private investment market, partly because they create an institutional division between investment and current spending. This British Investment Bank, as I envisage it, would be owned by the government, but would be able to borrow a multiple of its subscribed capital to finance investment projects within an approved range. Its remit would include not only energy-saving projects but also others that can contribute to rebalancing the economy – particularly transport infrastructure, social housing and export-oriented small and medium-sized enterprises (SMEs).

Unfortunately, the conventional view in Britain is that a government-backed bank would be bound, for one reason or another, to “pick losers”, and thereby pile up non-performing loans. Like all fundamentalist beliefs, this has little empirical backing. Two relevant comparators – the European Investment Bank and Germany’s KfW (Kreditanstalt für Wiederaufbau) – show that, in well-regulated financial systems, such banks pay for themselves. Neither bank has had to go back to its shareholder(s) to raise fresh money to cover losses. The EU is setting up a European Fund for Strategic Investments, which, with a capitalisation of €21bn, is expected to lever at least €315bn of investment over the first three years.

George Osborne has rejected this route to modernisation. Instead of borrowing to renovate our infrastructure, the Chancellor is trying to get foreign, especially Chinese, companies to do it, even if they are state-owned. Looking at British energy companies and rail franchises, we can see that this is merely the latest in a long history of handing over our national assets to foreign states. Public enterprise is apparently good if it is not British.

Britain already has two small state investment banks – the Green Investment Bank (GIB) and the British Business Bank. But the Treasury is so obsessed with avoiding any increase in the deficit that, up to this point, it has deprived these newly formed institutions of any power to borrow. This has restricted their investment potential. The Green Investment Bank was capitalised with £3.8bn of public funds in 2012; it has so far invested £2bn. Now the government proposes to privatise the GIB, because “it is necessary to move the bank off the public balance sheet if it is to arrange additional funding through borrowing”. The same fate no doubt awaits the British Business Bank, set up to channel money to SMEs.

Apart from exposing its unjustified belief that public investment must be loss-making, the Treasury’s stance is an artefact of its insistence that there should be no net borrowing. It was to avoid this grave effect on public investment that Gordon Brown, as chancellor, was drawn into the large-scale Private Finance Initiative, when there were cheaper financing mechanisms available.

Setting up a British Investment Bank with enough borrowing power to make it an effective investment vehicle is the essential first step towards rebuilding supply. Distancing it from politics by giving it a proper remit would create confidence that its ­projects would be selected on commercial, not political criteria. But this step would not be possible without a different accounting system. The solution would be to make use of comprehensive accounting that appropriately scores increases in net worth of the bank’s assets. The British Investment Bank I envisage would only finance investment in productive assets: although its borrowing would show up in the public accounts, it would be financed by revenue from its own activities. This is fundamentally different from tax-financed debt, and fully in line with the conventional theory of public finance outlined above.

Has the Chancellor the courage to grasp the opportunity?

He can justifiably congratulate himself on having avoided the worst disasters to which Treasury accounting rules and narrow ideology could have led him. But in the non-political recesses of his mind he must understand that the recovery over which he has presided is incomplete, fragile and, above all, unfair.

The first necessary step is to reform the way we do our national accounts, in order to dispel the deficit and debt phobia that blights sensible policy.

Robert Skidelsky is a cross-bench peer and a leading biographer of J M Keynes. His most recent book is “Britain Since 1900: a Success Story?” (Vintage)

This article first appeared in the 14 January 2016 issue of the New Statesman, David Bowie