David and Goliath, or Why the One Percent Has to Rig the System

By Polly Cleveland

Malcolm Gladwell’s bestseller, David and Goliath, asks how and why the weak win far more often than we expect. What characteristics of the weak can sometimes make them strong? What characteristics of the powerful can often make them vulnerable? For a long-time inequality buff like me, Gladwell provides some new insights.

Gladwell tells the story of a girls’ basketball team coached by one of the fathers. The girls were small and not much good at dribbling or shooting. So the father, who had no prior experience with basketball, had his girls engage in a “full court press”, constantly running up and down the length of the court, blocking the opponents. This unorthodox behavior enabled the little girls to win again and again against better trained, taller and stronger teams – much to the resentment of their opponents. But as Gladwell points out, underdog strategies like this are very hard work.

What characterizes successful individual underdogs? A much higher than random number have overcome a traumatic childhood. For example, David Boies overcame severe dyslexia to become a prominent trial attorney. Emil Freireich, who lost both parents as a small child, bucked the medical establishment to develop effective chemotherapy for childhood leukemia.

I know personally two such underdogs: my husband Tom Haines and his daughter Avril. Tom’s father deserted when he was three; shortly afterwards the courts removed him from his mentally ill mother and placed him in an orphanage. He worked his way through high school and City College of New York as a live-in houseboy and baby-sitter. Before even completing his PhD in chemistry, he became an assistant professor at City College, and landed the College’s first NIH grant. Still in his thirties, he founded the Sophie Davis School of Medicine at City College. No conventional medical school, Sophie Davis begins European-style at the undergraduate level, to make it easier for minorities to enter medicine. When Tom’s daughter Avril was eight, her mother developed emphysema. Tom and Avril nursed her until she died when Avril was fifteen. Later, as an attorney, Avril rose rapidly in the U.S. State Department Legal Division, becoming Director of the Treaties Division, moving on to Counsel to the U.S. Senate Foreign Relations Committee, then to several top jobs for President Obama, including a year as Deputy Director of the CIA. A senior law professor at Columbia recently recommended her for the U.S. Supreme Court. She’s still only 47!

What’s with Tom and Avril? Both are supremely self-confident and optimistic, obsessively hard-working, skilled in personal relations, yet ready to buck convention. Did the trauma in their lives help make them this way?

Of course, as Gladwell points out, a rough childhood crushes more people than it empowers. However, oppression of an entire community—Gladwell gives examples of the Catholic communities in Northern Ireland during the Troubles, and the South Vietnamese peasants during the Viet Nam war—such oppression can strengthen resistance. Herein lies a major weakness of the powerful: they easily assume that the weak will give up in the face of overwhelming force. If a little force doesn’t work, just apply more.

Near-death business experiences can empower as well—as I discovered when my first husband took over his dad’s failing small health and beauty aid business. We made and marketed a variety of products, starting with Ezo Denture Cushions to stick in your false teeth and Zip Wax to peel the hair off your legs. We had $7 million annual sales and 30 employees. With my ex as CEO, I wore multiple hats: controller, purchaser, computer programmer, new product designer. It was an exhilarating nightmare: 12 hours a day, seven days a week, panic at payroll time, hours on the phone soothing vendors we had to pay late. Moving from Manhattan to a cheap old warehouse in New Jersey, and cutting back advertising, slowly we dug ourselves out.

But that’s the nature of small business: grueling hard work, over-optimism, constant crises, innovations born of desperation. And that can make small business enormously productive. Consider just one simple statistic: According to the U.S. Census, in the first quarter 2016 businesses with under $25 million in assets generated 48c in sales per dollar of assets, while those with $25 million and over generated only 13.4c, a ratio of 3.35 to one.

So what keeps us small business Davids behind fences? As Joseph Stiglitz points out in his recent book, Rewrite the Rules, over the last forty years the tax system has become much less progressive, monopolists have been given free reign, unions have been busted, the minimum wage hasn’t risen, corporate criminals have gone unpunished. Most significant, the giant banks, fattened by free money from the Federal Reserve Bank, more and more refuse to lend to small business.

So, applying Gladwell’s themes, why does the One Percent need to rig the system against the Ninety-nine Percent? Why can’t the One Percent live happily with the wealth and privilege they already enjoy? Because if they did, the more entrepreneurial members of the Ninety-nine Percent would soon do to them as David did to Goliath.

Labour Party Leadership:  Fight for Policies Not Souls

By John Weeks

A Yawning Divide

Those following the internal conflict in the UK Labour Party repeatedly read that  it is a fight for the “soul” of the party.  This metaphysical reference to the contest between Jeremy Corbyn and Owen Smith comes as part of the concerted campaign to depoliticize and divert from the basic issues at stake.  It may be that some or most of Jeremy Corbyn’s opponents within the party believe that the unfolding leadership contest involves something analogous to religious conversion.  The use of this evangelistic metaphor consciously to avoid policy debate is considerably more likely.

As I wrote is my last post, “the Corbyn Phenomenon”, the deep division in the Labour Party results from one major fissure, social democracy on the left of the crack and neoliberalism-lite on the right.  Initially narrow enough for a few politicians to straddle, over the last year the crack widened to breech and now a deep chasm for which the famous US union song “Which side are you on” applies in spades.

Almost thirty years ago Tony Blair and his supporters undertook a spectacularly successful conversion of official LP policy to neoliberalism.  Why, suddenly it seems, can a social democrat lead the party he made his own and none dare speak his name except to denounce him?

Therein lies the explanation for why the center-right of the Labour Party refuses to debate its political differences with the social democrat progressives, focusing instead on allegations of Jeremy Corbyn’s lack of leadership qualities including incompetence, lack of charisma and being “out of touch”.

A serious and frank discussion of policies would destroy Corbyn’s opponents within the party.  The social democrats at the party base that Blair disenfranchised have reasserted control of party policy.

How the Labour Party got here

Until quite recently the Labour Party (LP) functioned in a strictly hierarchical manner.  For decades LP members of Parliament selected the party leader.  A change in rules that assigned MPs, trade unions and members at the constituency level each a one-third share brought the victory in 2010 of the more progressive candidate (Ed Miliband) over the center-right candidate (his older brother David, now living in the United States).

Ed Miliband’s parliamentary party (PLP) had supported his opponent by a considerable majority and set out consciously to undermine his leadership.  He proved unable to shift the PLP toward social democratic policies.  This was obvious in the general election of May 2015 when official party policy endorsed a balanced fiscal budget.  However, he achieved one change that would undo the power of the center-right in the party.  He introduced one-person-one-vote for the party’s leaders.

The failure to block this change indicates out out-of-touch was the center-right with the grass roots.  However, the Miliband voting reform still required that a leadership candidate obtain the endorsement of at least 35 MPs.  So marginalized were the social democratic MPs that the late-day Blairites assumed that 35 would be an insurmountable obstacle to a progressive leadership challenge.

In every leadership contest for a generation the “far left” (aka committed social democrats) of the party put forward a candidate.  In May 2015 this small group of social democratic insurrectionist MPs (no more than a dozen) faced a serious constrain.  Their most prominent members had either served as the sacrificial lambs previously or were not available (one that I had the honor of knowing, Michael Meacher, would soon die of a sudden illness).

Jeremy Corbyn received one more than the minimum endorsements, making the cut literally at the last minute before the deadline.  At least two of his endorsers came from the center-right after much pleading from progressive MPs that the contest should have at least the appearance of inclusiveness.  The campaign proved remarkably policy focused.

Corbyn opposed austerity, and his three opponents endorsed it with varying degrees of enthusiasm.  Corbyn opposed renewing the UK nuclear program; the other three endorsed renewal.  Corbyn advocated renationalization of the railroads and eliminating university fees.  His opponents ridiculed both policies.  Corbyn endorsed union rights without qualification, while his opponents adopted various degrees of equivocation.

The rest, as the cliché goes, is history.  At a meeting in September 2015 the results were announced.  Corbyn came first among four candidates with 59.9%, far ahead of his runner-up at 19.5%.  The most blatantly Blairite candidate came last with less than 5%.  Over 400,000 voted, three-quarters of the membership.

The Labour Party, social democratic at the base, elected a social democratic as leader for the first time in over thirty years with overwhelming support from unions and working class members.  The PLP remained overwhelmingly center-right.  The social democratic MPs had begrudgingly, if passively supported the party leadership under Blair and his short-lived successor Gordon Brown (even as the purge of progressives continued).  The leaders center-right quickly made it clear that Corbyn would find no loyalty or even civility from them.  The intra-party war began immediately upon Corbyn’s election.

Deposing Corbyn without an Election

Corbyn’s overwhelming victory among Labour Party members left center-right opponents with no obvious strategy for deposing him.  They did not accept his leadership, but they could not remove him through established party procedures.  By necessity they sought a combination of strategy and tactics that they hoped would force him to resign.

They could not force his resignation through debate over political issues because his policies reflected the views of the grassroots.  This left the anti-Corbyn MPs with only one tactic, to discredit Corbyn personally.  The tactic would prove an extremely difficult to implement successfully.  While Corbyn has faults as all humans do, like Bernie Sanders he suffers from none of those flaws that usually discredit a politician.

He lies modestly without a hint of corruption.  The closest his enemies have come to a case of corruption was the revelation that Corbyn supporter t-shirts were made by sweatshop labor, which he quickly denounced.  In one of those ironies no one could make up, Britain’s most right-wing newspaper burst with outrage over “poverty-stricken workers” (the support group distributing the shirts quickly changed supplier).  Try as they might, Corbyn’s opponents have found no evidence of sexual misconduct, that other variety of politician-slaying scandals (except in France).

The discrediting campaign shifted focus to allegations of “unelectability”.  This proved ineffective across the Labour grass roots, because electoral outcomes during the Corbyn months have been sufficiently ambiguous to produce no clear message.  However, the aggressiveness of the person attacks took a quantum leap after the English and Welsh electorates (but not the Scots or the Northern Irish) voted “out” in the referendum on EU membership.

Guardian columnist Polly Toynbee, who had bolted the Labour Party in the 1980s as part of a right-wing exodus, denounced Corbyn as “dismal, lifeless, spineless”.  A few days later prominent economist and editor-in-chief of the Guardian Sunday edition (The Observer) Will Hutton informed his readers that Corbyn was not a social democratic, but an ideologue committed to the overthrown of capitalism, not to its reform.

Various decisions by Labour Party’s politically split National Executive Committee make it unclear as to the number of eligible voters in the unfolding leadership contest.  None-the-less, polling suggests that Corbyn will achieve re-election with a strong majority.  Whether this is true, his opponents appear to believe it a strong possibility.  In response a major donor to the Labour Party funded a court case to have Corbyn excluded from the leadership race, a case being heard as I write (see discussion on the putatively neutral website of Labour MPs).

End of an Era?

The current leadership contest is not a re-run of 2015.  During last year’s leadership contest no one in the Labour Party realized the revolutionary impact of the Miliband voting reforms.  The surge of enthusiasm for Jeremy Corbyn and his overwhelming victory came as surprise to opponents and supporters.

For an early campaign appearance his major strategist (John McDonnell now his shadow chancellor) urged booking a small room of less than 50 chairs to avoid embarrassment should few arrive.  Over 500 Labour Party members appeared at the provincial university venture, which required Corbyn to speak outdoors with a megaphone.

This time both sides come prepared for the conflict that will solidify in the Labour Party the new era of resurgent social democracy, or re-establish center-right leadership of the Blair period.  Should the later occur, on the surface British politics will return to a neoliberal consensus across the parties of England and Wales (but not Scotland where the social democratic Scottish National Party rules like a colossus).

On the assumption that legal challenges do not exclude Corbyn from the contest, the center-right campaign will be slanderous, venal and petty.  The fundamental source of this political degeneration is not the character failings on the anti-Corbyn forces (though these are many).  The center-right campaign will take this form because it cannot on peril of certain defeat enter into political debate, its fatal weakness.

In contrast, the Corbyn campaign will take the cliché-ridden “high ground”, stressing policies, not personalities.  Many of Corbyn’s devoted supporters have and will launch savage tweets against his opponent Owen Smith.  Corbyn himself and those in his campaign will avoid such trivialities.

Corbyn has the winning card and will play it repeatedly: that he and his shadow cabinet are social democrats.

John Weeks is a professor emeritus at the School of Oriental and African Studies of the University of London and author of The Economics of the 1%: How Mainstream Economics Serves the Rich, Obscures Reality and Distorts Policy. Follow him Twitter: @johnweeks41.